329 F. Supp. 3d 1208
D. Nev.2018Background
- Plaintiff Bank of New York (BONY) held a deed of trust on property sold at an HOA non-judicial foreclosure on Sept. 19, 2012; trustee’s deed recorded Oct. 9, 2012. BONY filed suit Oct. 20, 2017.
- SFR purchased the property at the HOA sale; Southern Highlands Community Association (HOA) and its agent Alessi & Koenig conducted the sale.
- BONY seeks declarations that its deed of trust remains an encumbrance and that it may foreclose (judicial or non‑judicial); alternatively seeks equitable indemnification and wrongful foreclosure damages.
- Defendants moved to dismiss as time‑barred; court applied Nevada limitation‑period analysis and considered whether the four‑year catchall (NRS § 11.220) governs similar quiet‑title claims.
- Court dismissed counts 1 (declaratory quiet‑title) and 4 (wrongful foreclosure) as untimely, dismissed count 2 (declaratory permission to foreclose) as duplicative/advisory, and allowed count 3 (equitable indemnity) to proceed; granted leave to amend to allege facts supporting equitable tolling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether declaratory claim that HOA sale did not extinguish deed of trust is time‑barred | BONY: no limitations period applies (sale pursuant to unconstitutional statute) or alternatively tolling/relates‑back applies | Defendants: claim is essentially quiet‑title and barred by limitations (four‑year catchall or shorter specific periods) | Court: claim is untimely under four‑year catchall; dismissal without prejudice and leave to amend for equitable tolling facts |
| 2. Whether declaratory claim seeking permission to foreclose is permissible | BONY: seeks declaration it may enforce deed (judicial or nonjudicial) | Defendants: claim is duplicative/abstract and seeks advisory opinion | Court: dismissed as duplicative of count 1 and as seeking an advisory opinion |
| 3. Whether equitable indemnification claim is time‑barred/ripe | BONY: claim timely; limitation accrual awaits actual loss (judgment/settlement) | Defendants: claim governed by limitations (variously argued) | Court: equitable indemnity governed by four‑year rule but accrual requires payment; claim not time‑barred now (but may be substantively inapplicable) |
| 4. Whether wrongful foreclosure claim is time‑barred and which period applies | BONY: limitations tolled until after controlling Nevada decisions or until actual extinguishment; some theories invoke longer periods | Defendants: statute(s) and public records put BONY on notice; three‑year (statutory) or four‑year (tort catchall) apply | Court: statutory‑violation theories barred by three‑year rule; tort wrongful‑foreclosure theories barred by four‑year catchall; dismissal with leave to amend for tolling allegations |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
- Facklam v. HSBC Bank USA, 401 P.3d 1068 (Nev. 2017) (non‑judicial foreclosure itself not subject to statutes of limitations)
- City of Saint Paul v. Evans, 344 F.3d 1029 (9th Cir. 2003) (limits on recasting time‑barred claims as defenses)
- Pro‑Max Corp. v. Feenstra, 16 P.3d 1074 (Nev. 2001) (NRS § 106.240 creates conclusive presumption extinguishing liens after ten years)
- Perry v. Terrible Herbst, Inc., 383 P.3d 257 (Nev. 2016) (nature, not label, of claim governs which statute of limitations applies)
- Wyler Summit P’ship v. Turner Broad. Sys., 135 F.3d 658 (9th Cir. 1998) (motion‑to‑dismiss factual‑allegation standard)