Holt v. Regional Trustee Services Corp.
127 Nev. 886
Nev.2011Background
- Nevada requires loan-modification mediation (FMP) before nonjudicial foreclosure on owner-occupied residences, evidenced by an FMP certificate.
- Holts defaulted on a $2,350,000 note; arrears exceeded $360,000 by July 2010; RTSC recorded a 2009 notice of default and election to sell (2009 NOD).
- Holts elected FMP; lender failed to participate; mediator found RTSC in bad faith; Judge Mosley ordered rescheduled mediation and denied sanctions beyond withholding FMP certificate.
- Oral order: RTSC could restart the foreclosure process; no FMP certificate issued; Holts later remained in home without payments.
- RTSC reinitiated nonjudicial foreclosure with a 2010 NOD and rescission of the 2009 NOD; Holts challenged in a second district-court action.
- Judge Leavitt denied injunctive relief and ordered FMP mediation to occur within 90 days; on appeal, court affirmed allowing restart of mediation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does denial of an FMP certificate permanently bar foreclosure? | Holts: denial extinguishes lender’s right to foreclose. | RTSC/One West: denial is not permanent; foreclosure may restart via new notice. | Denial does not permanently bar foreclosure; process may restart with new NOD. |
| Can a lender’s nonjudicial foreclosure rights be barred by claim/issue preclusion from the prior sanctions order? | Holts: prior bad-faith sanction, denial of FMP cert. precludes further action. | RTSC/One West: preclusion applies where appropriate. | Preclusion does not bar the 2010 NOD; sanctions limited scope did not adjudicate foreclosure rights. |
| Does a rescission of the prior NOD moot the disputes or allow a new foreclosure action? | Holts: rescission moots issues and prevents restart. | Rescission allows重新-notice and new NOD; thus foreclosure may proceed after mediation. | Rescission does not foreclose a subsequent NOD; it resets the process for foreclosure. |
| Was the ordered FMP mediation for the 2010 NOD properly required and enforceable? | Holts: mediation should not be compelled if already litigating; ambiguity remains. | Mediator-directed mediation necessary to complete FMP requirements for 2010 NOD. | Yes; the district court did not err in directing FMP mediation to occur. |
Key Cases Cited
- Pasillas v. HSBC Bank USA, 127 Nev. 462 (Nev. 2011) (denial of FMP certificate follows from noncompliance; sanctions remain minimum)
- Leyva v. National Default Servicing Corp., 127 Nev. 470 (Nev. 2011) (strict construction of FMP requirements)
- Guzman v. Laguna Development Corp., 219 P.3d 12 (N.M. Ct. App. 2009) (mediation not adjudicative; no res judicata applied to end product)
- Five Star Capital Corp. v. Ruby, 124 Nev. 1048 (Nev. 2008) (claim and issue preclusion requirements; same claims must be brought)
- University System of Nevada v. Nevadans for Sound Gov't, 120 Nev. 712 (Nev. 2004) (preclusion considerations and procedural posture standards)
- In re Sandoval, 126 Nev. 136 (Nev. 2010) (issue preclusion requires actual litigation of the issue; final judgment essential)