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Supreme Court of Nevada
February 3, 2022, Filed
[*302] BEFORE THE SUPREME COURT, EN BANC.
By the Court, STIGLICH, J.:
The United States Court of Appeals for the Ninth Circuit certified questions to this court concerning the statute of limitations in a declaratory relief and quiet title matter arising out of an HOA foreclosure sale. The Ninth Circuit asks two questions:
(1) When a lienholder whose lien arises from [**2] a mortgage for the purchase of a property brings a claim seeking a declaratory judgment that the lien was not extinguished by a subsequent foreclosure sale of the property, is that claim exempt from statute[s] of limitations under City of Fernley v. [State,] Department of Taxation, 132 Nev. 32, 366 P.3d 699 (2016)?
(2) If the claim described in (1) is subject to a statute of limitations:
(a) Which limitations period applies?
(b) What causes the limitations period to begin to run?
We respond to the Ninth Circuit that ] declaratory relief actions are not categorically exempt from statutes of limitations under City of Fernley v. State, Department of Taxation, 132 Nev. 32, 366 P.3d 699 (2016). We next determine that ] the four-year catch-all statute of limitations, NRS 11.220, applies to an action (like this one) to determine the validity of a lien under NRS 40.010. And finally, the statute of limitations does not begin to run until the titleholder affirmatively repudiates the lien, which does not necessarily happen at the foreclosure sale.
Because this is a certified question, the court takes the facts as stated in the Ninth Circuit's order certifying the questions, U.S. Bank, N.A. v. Thunder Properties, Inc., 958 F.3d 794 (9th Cir. 2020).
[*303] Briefly, appellant U.S. Bank, N.A., holds a first deed of trust on the subject residential real property. Based on unpaid HOA assessments, the HOA foreclosed on the property in 2011, and the bank made no effort [**3] to challenge the foreclosure sale at that time. The property was subsequently transferred to respondent Thunder Properties, Inc. In 2016, five years after the sale, U.S. Bank sued for a declaration to quiet title. It stated that this claim was made pursuant to the state and federal declaratory judgments acts, as well as Nevada's quiet title statute. It also asserted other claims that are not at issue here. The bank argued that it is entitled to a declaration that its deed of trust was not extinguished by the sale and remains a present interest in the property. Thunder Properties argued that the statute of limitations began to run when the property was sold and has since expired, such that the bank's suit must be dismissed. The federal district court dismissed the bank's claim as time-barred. The bank appealed, and the Ninth Circuit Court of Appeals certified the above-stated questions of law to this court.
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503 P.3d 299 *; 2022 Nev. LEXIS 3 **; 138 Nev. Adv. Rep. 3
U.S. BANK, N.A., AS TRUSTEE FOR THE SPECIALTY UNDERWRITING AND RESIDENTIAL FINANCE TRUST MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES 2006-BC4, Appellant, vs. THUNDER PROPERTIES, INC.; AND WESTLAND REAL ESTATE DEVELOPMENT AND INVESTMENTS, Respondents.
Prior History: Certified questions under NRAP 5 [**1] concerning statutory limitations periods for declaratory judgment and quiet title actions. United States Court of Appeals for the Ninth Circuit; Ronald M. Gould, Carlos T. Bea, and Michelle T. Friedland, Circuit Judges.
U.S. Bank, N.A. v. Thunder Props., Inc., 958 F.3d 794, 2020 U.S. App. LEXIS 14033, 2020 WL 2091095 (9th Cir. Nev., May 1, 2020)
Disposition: Questions answered.
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Civil Procedure, Declaratory Judgments, State Declaratory Judgments, Scope of Declaratory Judgments, Governments, Legislation, Statute of Limitations, Time Limitations, Real Property Law, Title Quality, Adverse Claim Actions, Quiet Title Actions, Financing, Foreclosures, Private Power of Sale Foreclosure, Common Interest Communities, Homeowners Associations