329 F. Supp. 3d 1221
D. Nev.2018Background
- BONY held a deed of trust on property sold at an HOA non-judicial foreclosure on July 27, 2012; trustee's deed recorded Aug 1, 2012. SFR purchased at that sale.
- BONY sued (filed Apr 27, 2017) seeking (1) declaratory relief that its deed of trust still encumbers the property or that the HOA sale was void, (2) declaration it may foreclose judicially or non-judicially, (3) equitable indemnification from the HOA and its agent (Foothills and NAS) if the deed was extinguished, and (4) wrongful foreclosure damages.
- SFR and Foothills moved to dismiss as time-barred; Foothills also argued equitable indemnity fails for lack of duty/contract.
- The court applied Nevada accrual and discovery rules, and relied on prior district rulings holding the four-year catchall governs lienholder quiet-title claims under NRS 40.010; BONY sought certification to the Nevada Supreme Court on the limitations question.
- Court dismissed (with leave to amend limited theories) BONY’s declaratory claim(s) and wrongful-foreclosure claim as untimely, allowed the equitable indemnity claim to proceed, denied certification, and granted BONY leave to amend to plead facts supporting waiver, estoppel, or equitable tolling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BONY’s declaratory quiet-title claim is time-barred | BONY: no limitations period (sale unconstitutional) or alternative tolling/relation-back/defenses; tendered superpriority | SFR/Foothills: claim challenges NRS Ch.116 foreclosure and is time-barred (3- or 4-year periods); court should apply limitations | Court: claim untimely under applicable 4-year catchall; dismissal without prejudice to amend to plead waiver/estoppel/tolling |
| Whether request for declaratory relief that BONY may foreclose is viable | BONY: seeks declaration it may foreclose judicially/non-judicially | Defs: claim duplicates count one and seeks advisory opinion | Court: duplicative/untimely and would be advisory; dismissed |
| Whether equitable indemnity against Foothills/NAS is barred or insufficient | BONY: equity permits indemnity because HOA/agent refused tender and fairness supports shift | Foothills: claim untimely and no duty/contract to bank; CC&Rs cannot waive superpriority | Court: indemnity governed by 4-yr implied-contract rule that accrues on payment; here no payment alleged so timely; claim survives pleading challenge (but may ultimately fail on merits) |
| Whether wrongful-foreclosure claim is timely and which limitations period applies | BONY: did not know injury until Nevada Supreme Court decisions; alternatively contract statute applies | Defs: claim accrued at sale/recording; limitations run; claims alleging statutory violations use 3-year period; tortious allegations use 4-year catchall | Court: plaintiff knew or should have known by recording; statutory-based allegations barred by 3-year rule; tort theory analogous only to catchall and is barred as filed >4 years after sale; dismissed with leave to amend for tolling/waiver/estoppel facts |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard requires plausible factual allegations)
- Wyler Summit P'ship v. Turner Broad. Sys., Inc., 135 F.3d 658 (9th Cir. 1998) (pleading construed favorably to nonmoving party)
- United States ex rel. Air Control Techs., Inc. v. Pre Con Indus., Inc., 720 F.3d 1174 (9th Cir. 2013) (statute-of-limitations dismissal only when limitations apparent on complaint face)
- Facklam v. HSBC Bank USA, 401 P.3d 1068 (Nev. 2017) (no statute of limitations for non-judicial foreclosure itself because limitations apply to judicial actions)
- SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (interpretation of NRS 116.3116 and effect of HOA superpriority lien)
- City of Fernley v. State, Dep't of Tax, 366 P.3d 699 (Nev. 2016) (limitations may apply to claims alleging actions pursuant to allegedly unconstitutional statutes)
- Zuill v. Shanahan, 80 F.3d 1366 (9th Cir. 1996) (declaratory relief subject to statute-of-limitations applicable to underlying claims)
- Perry v. Terrible Herbst, Inc., 383 P.3d 257 (Nev. 2016) (nature, not label, of claim determines applicable statute of limitations)