Bergenfield v. U.S. Bank, National Association et al

Filing 29

ORDER denying Plaintiff's ECF No. 5 Motion for Summary Judgment; granting Defendants' ECF No. 16 Motion for Summary Judgment. Signed by Judge Richard F. Boulware, II on 10/10/2017. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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MARCIA M. BERGENFIELD,

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ORDER
Plaintiff,

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v.

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Case No. 2:16-cv-01691-RFB-PAL

U.S. BANK NATIONAL ASSOCIATION et
al.,
Defendants.

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I.

INTRODUCTION

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Before the Court are Plaintiff’s Motion for Summary Judgment (ECF No. 5), and

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Defendants’ Motion for Summary Judgment (ECF No. 16). For the reasons stated below,

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Plaintiff’s Motion for Summary Judgment is denied and Defendants’ Motion for Summary

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Judgment is granted.

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II.

BACKGROUND

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Plaintiff seeks quiet title and declaratory relief that defendants may not foreclose on her

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property because of the passing of the applicable statute of limitations. The complaint was first

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filed in state court on June 9, 2016, and removed on July 18, 2016. ECF No. 1. Prior to the filing

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of an answer, on July 19, 2016, Plaintiff Bergenfield filed a Motion for Summary Judgment. ECF

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No. 5. The Motion argues only that under Nevada law, a foreclosure is an action upon a contract,

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and therefore the six-year contract statute of limitations bars any action against Plaintiff’s property.

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Defendants filed an Answer on August 1, 2016. ECF No. 6. Defendants responded to Plaintiff’s

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Motion for Summary Judgment on August 12, 2016, and Plaintiff Replied on August 22, 2016.

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ECF Nos. 8, 11. A discovery order issued on August 22, 2016. ECF No. 12. Discovery closed on

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January 30, 2017. Defendant Nationstar Mortgage filed a Motion for Summary Judgment on

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February 3, 2017. ECF No. 16. The Motion argues that a longer ten-year statute of limitations, for

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“expungement of liens” applies to foreclosures, among other defenses.

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III.

LEGAL STANDARD
A. Motion for Summary Judgment

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Summary judgment is appropriate when the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show “that there is no

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genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

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Fed. R. Civ. P. 56(a); accord Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). When considering

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the propriety of summary judgment, the court views all facts and draws all inferences in the light

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most favorable to the nonmoving party. Gonzalez v. City of Anaheim, 747 F.3d 789, 793 (9th Cir.

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2014). If the movant has carried its burden, the non-moving party “must do more than simply show

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that there is some metaphysical doubt as to the material facts . . . . Where the record taken as a

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whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine

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issue for trial.” Scott v. Harris, 550 U.S. 372, 380 (2007) (alteration in original) (internal quotation

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marks omitted).

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IV.

UNDISPUTED/DISPUTED FACTS
A. Undisputed Facts
The parties do not dispute the facts, but make only legal arguments regarding the applicable

statute of limitations. The Court finds the following undisputed facts:
This lawsuit involves real property located at 7501 Midnight Rambler Street, Las Vegas,
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NV 89149-0119, and bearing Assessor’s Parcel Number 125-18-710-047 (the “Property”). On or

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about November 30, 2004, Plaintiff executed a promissory note related to the Property naming

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Countrywide Home Loans, Inc. (“Countrywide”), as the “Lender”, and promising to pay

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$636,663.00 (“Note”). On or about November 30, 2004, Plaintiff also executed a deed of trust

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related to the Property naming Countrywide as the “Lender” (“Deed of Trust”). The Deed of Trust

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and correlating Note encumbered the Property with an indebtedness in the amount of $636,663.00.

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Plaintiff contacted Defendant, or its predecessor or agent, in September, 2008, to discuss loan

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modification options. Plaintiff was informed that she would have to be in default before a loan

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modification would be forthcoming.

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In or around October, 2009, in compliance with directions from representatives of BAC

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Home Loans, Plaintiff missed a payment on her mortgage. On or about January 22, 2010,

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Defendant, through its trustee, filed a Notice of Default and Election to Sell related to the Property

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in the official records of Clark County, as document number 20100122-0003782 (“First Notice of

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Default”). The First Notice of Default stated that because there was a “FAILURE TO PAY THE

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INSTALLMENT OF PRINCIPAL, INTEREST AND IMPOUNDS WHICH BECAME DUE ON

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10/01/2009 … the present beneficiary under such deed of trust has executed and delivered to

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RECONTRUST COMPANY, N.A., a written Declaration of Default and Demand for sale… and

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has declared and does hereby declare all sums secured thereby immediately due and payable and

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has elected and dues hereby elect to cause the trust property to be sold to satisfy the obligations

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secured thereby.”

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On January 29, 2010, the Deed of Trust was assigned to HSBC Bank USA, National

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Association, as Trustee on behalf of CSFB, ARMT 2004-5 Trust Fund. As a result of the above

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quoted information from the First Notice of Default, Defendant accelerated the Note and Deed of

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Trust on January 22, 2010, or the day that the First Notice of Default was executed. On April 4,

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2010, Bergenfield and Bank of America participated in a foreclosure mediation pursuant to NRS

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107.087.

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A Notice of Trustee's Sale was recorded on May 9, 2011. On May 11, 2016, the Deed of

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Trust was assigned to U.S. Bank, N.A., National Association, As Trustee for CSFB Mortgage3

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Backed Pass-Through Certificates, Series 2004-5. On May 23, 2016, a substitution of trustee was

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filed as Instrument No. 20160523-0000769 of the official Clark County Recorder’s records naming

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Clear Recon Corp., as Trustee under the Mortgage. On June 3, 2016, Nationstar, as U.S. Bank's

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servicer, recorded a Notice of Rescission of the Notice of Default, rescinding the 2010 notice of

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default. On June 3, 2016, Defendants, through their agents, predecessors, or predecessors’ agents,

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specifically, Clear Recon Corp., filed another Notice of Default and Election to Sell the Property,

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in the official records of Clark County, Nevada, which was assigned document number 20160603-

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0001608.

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V.

DISCUSSION

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Declaratory relief is available when: (1) a justiciable controversy exists; (2) the controversy

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is between parties with adverse interests; (3) the party seeking declaratory relief has a legally

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protectable interest; and (4) the issue involved in the controversy is ripe for judicial determination.

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Doe v. Bryan, 728 P.2d 443, 444 (Nev.1986). The Court finds that declaratory relief is available

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here. There is a justiciable controversy – whether the statute of limitations bars Defendants from

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enforcing their rights under the Deed of Trust. The parties are adverse. The interest which Plaintiff

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is seeking to protect is ownership of the Property. And, finally, given that the Defendants have

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issued a notice of default, the controversy—who possesses superior title to the property and

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whether the Defendant may foreclose on the plaintiff—is ripe for judicial determination

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Plaintiff alleges that the foreclosure is barred by the six-years statute of limitations

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provided in NRS 11.190(1). “Except as otherwise provided in N.R.S. 40.4639, 125B.050 and

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217.007, actions other than those for the recovery of real property, unless further limited by

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specific statute, may only be commenced as follows: 1. Within 6 years: (a) . . . (b) An action upon

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a contract, obligation or liability founded upon an instrument in writing, except those mentioned

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in the preceding sections of this chapter.” N.R.S. 11.190(1)(b). “The peculiar language of NRS

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11.190(1)(b) is derived from a California statute adopted in 1850, allowing four years for: ‘An

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action upon any contract, obligation, or liability, founded upon an instrument of writing.’” El

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Ranco, Inc. v. New York Meat and Provision Co., 493 P.2d 1318, 1320 (Nev. 1989) (citing 1850

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Calif. Stats., Ch. 127 (ch. III s 17)).

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Defendants contend that NRS 106.240, entitled “Extinguishment of lien created by

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mortgage or deed of trust upon real property,” provides the applicable statute of limitations. NRS

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106.240 provides: “The lien heretofore or hereafter created of any mortgage or deed of trust upon

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any real property, appearing of record, and not otherwise satisfied and discharged of record, shall

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at the expiration of 10 years after the debt secured by the mortgage or deed of trust according to

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the terms thereof or any recorded written extension thereof become wholly due, terminate, and it

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shall be conclusively presumed that the debt has been regularly satisfied and the lien discharged.”

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NRS 106.240. In Pro-Max Corp. v. Feenstra, 117 Nev. 90, 94, 16 P.3d 1074, 1077 (2001), opinion

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reinstated on reh'g (Jan. 31, 2001), the Nevada Supreme Court held that “NRS 106.240 creates a

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conclusive presumption that a lien on real property is extinguished ten years after the debt becomes

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due.”

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Plaintiff cites to two cases from the 1860’s to support the proposition that a foreclosure

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action is governed by the six-year NRS 11.190(1) statute of limitations. In Henry v. Confidence

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Gold & Silver, the Nevada Supreme Court analyzed which of two statutes of limitations applied

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to a foreclosure action, either (1) a statute providing that “Actions other than those for the recovery

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of real property can only be commenced as follows . . . within four years an action upon any

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contract, obligation or liability founded upon an instrument of writing, except those mentioned in

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the preceding section.”—the first and basically unaltered 1865 version of NRS 11.190(1)—or (2)

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a statute then in existence limiting actions “upon any judgment, contract, obligation or liability,

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for the payment of money or damages…” 1 Nev. 618 (1865). The Court stated its concurrence

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with a California Supreme Court opinion finding that the statute at issue—the same statute as

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Nevada borrowed it from California—“limits equity suits in the same manner that it limits actions

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at law.” The court then found that even where the damages statute of limitations would bar any

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claim for payment of the debt in money, “a bill to foreclose the mortgage would not be barred until

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four years had elapsed since the cause of action arose thereon.” Four years was the length of time

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provided in the 1865 version of NRS 11.190(1). In Mackie v. Lansing, the Supreme Court of
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Nevada reversed the lower court holding that a second mortgage took precedence because a prior

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mortgage was barred by a different statute of limitations. The Court stated “his right to foreclose

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the mortgage is not barred until the lapse of four years.” 2 Nev. 3012 (Nev. 1866) (citing Henry,

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1 Nev. 619).

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These cases applied the “obligation upon an instrument in writing” statute of limitations to

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foreclosures. In the absence of intervening authority, these cases may establish that foreclosures

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today, and the foreclosure at issue in this case, are subject to the six-year statute of limitations.

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However, in 1917, the Nevada legislature passed the first version of what is now NRS 106.240,

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which provides: “The lien heretofore or hereafter created of any mortgage or deed of trust upon

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any real property, appearing of record, and not otherwise satisfied and discharged of record, shall

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at the expiration of 10 years after the debt secured by the mortgage or deed of trust according to

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the terms thereof or any recorded written extension thereof become wholly due, terminate, and it

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shall be conclusively presumed that the debt has been regularly satisfied and the lien discharged.”

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NRS 106.240.

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Plaintiff argues, based upon the title and text of the statute, and its placement within the

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Nevada Code, that the statute is meant as a record-keeping mechanism, allowing the clearing of

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stale liens from records related to real property. Defendants argue that it is a newer and more

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specific statute of limitations, and therefore it provides the statutory limit for foreclosure actions.

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On March 2, 1917, the Nevada legislature approved a bill with the following caption: “An Act to

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quiet title to real estate by defining when the lien of an attachment and mortgage and the notice of

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the pendency of an action expires.” Nevada Laws 1917, c. 37 § 2. The section that became NRS

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106.240 read as follows: “The lien heretofore or hereafter created of any mortgage upon any real

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estate, appearing of record, and not otherwise satisfied and discharged of record, shall at the

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expiration of ten years after the debt secured by said mortgage according to the terms thereof

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become wholly due, terminate, and it shall be conclusively presumed that said debt has been

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regularly satisfied and said lien discharged.” Id. The relevant section was amended in 1965, by a

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bill with the heading, “An Act to amend NRS section 106.240, relating to the extinguishment of

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recorded mortgage liens, by including deeds of trust and recorded extensions of mortgages and
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deeds of trust.” Nevada Laws 1965, p. 1229. That law created the current version of NRS 106.240,

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as cited by the Defendants. It added the words “or deed of trust” and “or any recorded written

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extension thereof” to the 1917 version of the law. Id. The 1965 Assembly Committee on Judiciary

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contain a statements from a legislator that the bill was “a basis for clearing a title.” Minutes of

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Meeting – Committee on Judiciary, 53rd Legislature, March 13, 1965, AB 426.

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This legislative history establishes that NRS 106.240 was not intended simply to “allow

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county clerks to clean the books,” as contended by Plaintiff. The heading of the original 1917 bill

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makes clear that it provides a means to “quiet title.” After the 1965 amendments, the bill provides

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for quieting title as to both mortgages and deeds of trusts. The plain meaning is thus that it

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unburdens a property of any obligations pursuant to these types of written instruments. NRS

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107.025 provides: “A deed of trust may encumber an estate for years however created, including

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a lease of a dwelling unit of a cooperative housing corporation, unless prohibited by the instrument

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creating the estate, and foreclosure may be had by the exercise of a power of sale in accordance

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with the provisions of this chapter.” NRS 107.080 provides: “Except as otherwise provided in NRS

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106.210, 107.085 and 107.086, if any transfer in trust of any estate in real property is made after

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March 29, 1927, to secure the performance of an obligation or the payment of any debt, a power

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of sale is hereby conferred upon the trustee to be exercised after a breach of the obligation for

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which the transfer is security.” The plain meaning of these statutes indicates that a lien generally

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confers the power to foreclose. While it may be possible that a contract could create a lien

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encumbering a property, but lacking the right to foreclose, the terms “mortgage” and “deed of

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trust” are commonly understood to create a power of foreclosure, and as a general matter, may do

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so under Nevada law.

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The Court adopts the straightforward reading of NRS 106.240 to find that it establishes a

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specific statute of limitations as to foreclosure actions based upon mortgages or deeds of trust. The

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specific and plain language of the statute clearly supersedes any prior law to the contrary. This

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does not mean that where a lienholder issues a Notice of Default and Election to sell, it will

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necessarily have ten years to carry out a foreclosure sale. Equitable defenses such as laches, for

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example, may apply. Laches was not raised here and the Court need not consider whether it would

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provide a basis for the relief sought.

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Because the Court finds that NRS 106.240 provides the only statutory limitation on

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foreclosure actions based upon a deed of trust, and Plaintiff seeks quiet title and declaratory relief

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based only on the application of the six-year statute of limitations under NRS 11.190(1), the Court

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denies Plaintiff’s Motion for Summary Judgment, and Grants Defendants’ Motion. The Court does

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not consider Defendants’ remaining arguments as to the non-applicability of NRS 11.190(1).

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VI.

CONCLUSION

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Accordingly,

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IT IS HEREBY ORDERED that ECF No. 5 Plaintiff’s Motion for Summary Judgment

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is denied.
IT IS FURTHER ORDERED that ECF No. 16 Defendants’ Motion for Summary
Judgment is granted.

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DATED: October 10, 2017.

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__________________________________
RICHARD F. BOULWARE, II
UNITED STATES DISTRICT JUDGE

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