Stacey et al v. Carrington Mortgage Service, LLC et al

Filing 22

ORDER. IT IS HEREBY ORDERED that Carrington Mortgage Service, LLC's Motion to Dismiss Complaint [ECF No. 11] is GRANTED. This action is dismissed with prejudice. The Clerk of Court is directed to ENTER JUDGMENT in favor of the defendants and against the plaintiff and CLOSE THIS CASE. Signed by Judge Jennifer A. Dorsey on 6/4/2018. (Copies have been distributed pursuant to the NEF - ADR)

1

UNITED STATES DISTRICT COURT

2

DISTRICT OF NEVADA

3 Douglas Stacey, an individual; Shellie Stacey,
an individual, and Jeniece Valley, an
4 individual,
5

Plaintiffs

Case No.: 2:17-cv-02128-JAD-CWH

Order Granting Motion
to Dismiss

6 v.

[ECF No. 11]
7 Carrington Mortgage Service, LLC, a
Delaware limited liability company; Sables,
8 LLC, a Nevada limited liability company,
9

Defendants

10
11

Plaintiffs bring this action to stop their lender from conducting a non-judicial foreclosure

12 sale of the home that they haven’t paid the mortgage on in eight years. They theorize that the
13 lender’s right to sue on the note expired when the six-year statute of limitations expired on June
14 1, 2016, so any foreclosure is now time barred.1 But, as the Nevada Supreme Court recently held
15 in Facklam v. HSBC Bank USA,2 non-judicial foreclosures are not judicial actions subject to the
16 six-year deadline, and the lender moves for dismissal on this basis. Because I find that Facklam
17 renders the homeowners unable to state a plausible claim for relief, I grant the lender’s motion
18 and dismiss this case.
19

Discussion

20

Plaintiffs Douglas Stacey, Shellie Stacey, and Jeniece Valley own the home at 11053

21 Romola Street in Las Vegas, Nevada. They filed this action after Carrington Mortgage, LLC, the
22
1

ECF No. 1-1.

2

Facklam v. HSBC Bank USA, 401 P.3d 1068, 1070 (Nev. Sept. 17, 2017).

1 beneficiary of the deed of trust securing their home mortgage, provided formal notice that it was
2 going to initiate non-judicial foreclosure proceedings because the mortgage has been in default
3 since June 1, 2010. Over three separately pled claims, the homeowners allege that “Pursuant to
4 the Nevada Statute of Limitations at NRS 11.190(1)(b) and NRS 104.3118; Defendants had 6
5 years from the time of declaring a default and accelerating the loan to commence a foreclosure
6 action to collect the monies owed under its Deed of Trust and Note with the Plaintiffs.”3
7 Because they “failed to commence and maintain a foreclosure action within” the six years after
8 the June 1, 2010, default, the “Note became unenforceable and invalid,” and Carrington can no
9 longer foreclose.4
10

But the notion that the expiration of the right to sue on a note also precludes the lender

11 from foreclosing under a deed of trust was squarely rejected by the Nevada Supreme Court last
12 year in Facklam v. HSBC Bank. HSBC was the beneficiary of the promissory note and deed of
13 trust on Facklam’s home. Facklam defaulted on her loan in 2009 and again in 2016, and after the
14 2016 default, HSBC notified her that it was electing to foreclose.5 Like the homeowners here,
15 Facklam sued to stop HSBC from foreclosing, claiming that HSBC’s window to foreclose had
16 shut “because the six-year limitation period began running with the initial notice of default in
17 2009 and, therefore, expired in 2015.”6 The Court disagreed. It held that NRS 11.190 serves
18 only to bar judicial actions; it is “inapplicable to nonjudicial foreclosures.”7 It reasoned:
19

For over 150 years, this court’s jurisprudence has provided that
lenders are not barred from foreclosing on mortgaged property

20

22

3

ECF No. 1-1 at 5.

4

21

Id.

5

Facklam, 401 P.3d at 1070.

6

Id.

7

Id. at 1071.
2

1

merely because the statute of limitations for contractual remedies
on the note has passed.
...
HSBC chose to exercise its right to foreclose outside of the judicial
arena. NRS 1.190(1)(b) does not override our long-standing
precedent that a lender may recover on a deed of trust even after
the statute of limitations for contractual remedies on the note has
passed.8

2
3
4
5
6

Facklam compels dismissal of all of the homeowners’ claims. Though they are

7 structured as three claims—one for declaratory relief and two for wrongful foreclosure—distilled
8 to its essence, the complaint states a single declaratory relief claim that asks the court to declare
9 that Carrington Mortgage can’t foreclose because more than six years have passed since the
10 initial default.9 Because the Facklam decision eliminated the homeowners’ ability to rely on this
11 legal theory, their claim is no longer plausible. Accordingly, I grant Carrington Mortgage’s
12 motion and dismiss this case.
13

Conclusion

14

Accordingly, IT IS HEREBY ORDERED that Carrington Mortgage Service, LLC’s

15 Motion to Dismiss Complaint [ECF No. 11] is GRANTED. This action is dismissed with
16 prejudice. The Clerk of Court is directed to ENTER JUDGMENT in favor of the defendants
17 and against the plaintiff and CLOSE THIS CASE.
18 Dated: June 4, 2018
19

_________________________________
______________________
__
__ _
_ _
U.S. District Judge Jennifer A. Dorsey
istrict Judge Jennifer A. Do
ic
ic ud
if
f

20
21
22
8

Id.

9

See generally id. at 5–6.
3