Edward Karayan v. Susan Mardian
690 F. App'x 996
| 9th Cir. | 2017Background
- The dispute arises from a $4,000,000 loan secured by real property and guaranteed by Susan and Leonard Mardian; Edward Karayan (trustee) owns a 20.925% interest in the Note.
- Karayan sued the guarantors personally for alleged default without first foreclosing on the secured property.
- Defendants moved to dismiss; the district court granted dismissal, citing Nevada’s “51 percent rule” and, alternatively, the statutory one-action rule.
- The one-action rule requires a creditor to foreclose on real-property collateral before suing a guarantor personally for the debt.
- The district court found the property was farmland (used primarily for cattle grazing) based on a declaration and parcel tax records, which triggers a statutory exception that prevents waiver of the one-action rule.
- Karayan did not rebut the evidence that the land was used primarily for farm products, and he failed to raise an argument against the district court’s one-action ruling on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the one-action rule bars a personal suit against guarantors before foreclosure | Karayan proceeded directly against guarantors to collect on the debt | Defendants argued the one-action rule requires foreclosure on the property first | Court held the one-action rule barred the suit; dismissal affirmed |
| Whether the one-action rule was waivable here | Karayan contended waiver (or did not preserve objection on appeal) | Defendants argued waiver is ineffective because the property is farmland and Nevada law prevents waiver when property is used primarily for farm production | Court held waiver inapplicable because the property is used primarily for farm products (cattle grazing), so the rule cannot be waived |
Key Cases Cited
- Lavi v. Eighth Jud. Dist. Ct., 325 P.3d 1265 (Nev. 2014) (one-action rule requires foreclosure on real-property collateral before suing guarantors)
- Bank of Nev. v. Petersen, 380 P.3d 854 (Nev. 2016) (addresses statutory changes and recognizes prior rule’s treatment on other grounds)