Sphere, LLC v. Pawnee Leasing Corporation

• Court: District Court, D. Nevada
• Decided: November 17, 2023
• Docket: 3:23-cv-00176
• Status: Unknown

Opinion

3 UNITED STATES DISTRICT COURT

4 DISTRICT OF NEVADA

5 * * *

6 SPHERE, LLC, Case No. 3:23-cv-00176-MMD-CBL

7 Plaintiff, ORDER v. 8 PAWNEE LEASING CORPORATION, et 9 al.,

10 Defendants. 11 I. SUMMARY 12 Plaintiff Sphere, LLC (“Sphere”) holds title to real property located at 5444 13 Spanish Moss Court in Sparks, Nevada (“Property”) and brings this action against 14 Defendants Donald Clark1, from whom Sphere acquired title, and Pawnee Leasing 15 Corporation (“Pawnee”), which asserts that it holds a valid judgment lien attached to the 16 Property. (ECF No. 1 (“Complaint”).) Before the Court is Defendant Pawnee’s motion to 17 dismiss Plaintiff’s claim for quiet title and declaratory relief. (ECF No. 12 (“Motion”).)2 As 18 further explained below, the Court will deny the Motion. 19 II. BACKGROUND3 20 On November 25, 2021, Plaintiff Sphere entered into an agreement with Donald 21 Clark to purchase real property in the Vista Ridge neighborhood of Sparks, Nevada. 22 (ECF No. 1 at 3.) During an escrow period, Clark completed an owner’s affidavit 23 disclaiming any debts, liens, or other off-record claims against the Property. (Id.) The 24 sale closed on December 17, 2021, at which time Sphere paid Clark the purchase price 25 26 1Defendant Clark filed a notice of bankruptcy (ECF No. 28) and this action is stayed with respect to the claims against him. 27 2Plaintiff filed a response (ECF No. 16) and Defendant filed a reply (ECF No. 23). 28 3The following facts are adapted from the Complaint. 2 and sale deed. (Id.) The deed was recorded in the Official Records of Washoe County. 3 (Id.) 4 After this conveyance and recording, Sphere received notice from Defendant 5 Pawnee that Pawnee holds a default judgment against Clark, which it recorded in the 6 Official Records of Washoe County on April 9, 2021—eight months before the sale of 7 the Property to Sphere. (Id. at 4.) It is undisputed that at the time Pawnee recorded the 8 judgment in April, it did not record an additional “affidavit of judgment” as described in 9 NRS § 17.150(4). (Id. at 4-5.) The recorded judgment itself did not identify property 10 information, such as parcel number or address. (Id.) It identified the judgment debtor as 11 “Donald Clark, Jr.,” rather than as “Donald Clark,” as he was known at the sale of the 12 Property. (Id. at 5, 6-7.) It did not include other debtor information, such as the last four 13 digits of Clark’s driver’s license or social security number. (Id. at 5.) Finally, the 14 judgment did not include a statement that the judgment creditor had confirmed Clark 15 was the legal owner of the Property. (ECF Nos. 1 at 5, 16 at 11.) 16 Sphere alleges that on October 20, 2022 Pawnee attempted to fix its mistake in 17 failing to record an affidavit along with the judgment in April 2021. (ECF No. 1 at 6.) It 18 again recorded the same default judgment in the Washoe County Records. (Id.) This 19 time, however, Pawnee also recorded an attorney declaration of judgment. (Id.) Sphere 20 alleges that Pawnee has since threatened to commence foreclosure of the Property, 21 maintaining that its lien is valid against Sphere. (Id.) 22 Pawnee now moves to dismiss the single claim4 for quiet title and declaratory 23 relief brought against it in the Complaint for insufficient pleading under Federal Rule of 24 Civil Procedure 12(b)(6). (ECF No. 12.) Plaintiff seeks relief under the Nevada Uniform 25 Declaratory Judgment Act, NRS § 30.010 et seq., and NRS § 40.010, and asks the 26 27 4Sphere alleges seven causes of action. Six of those claims are solely against Defendant Clark. (ECF No. 1.) 28 2 the Property because Pawnee failed to record the affidavit of judgment mandated by 3 NRS § 17.150(4); (2) the October 2022 recording did not create a lien on the Property 4 because Clark did not own the Property at the time of the recording; and (3) Pawnee 5 has no interest in the Property whatsoever by virtue of the default judgment. (ECF No. 1 6 at 7.) Alternatively, Plaintiff seeks judgment declaring that it is a bona fide purchaser 7 who took title to the Property free and clear of Pawnee’s claimed interest. (Id.) 8 III. DISCUSSION 9 Pawnee moves to dismiss Sphere’s claim for declaratory relief and/or quiet title 10 for failure to state a claim under Rule 12(b)(6), arguing that as a matter of Nevada law, 11 Pawnee maintains a valid judgment lien and thus there are no facts under which Sphere 12 is entitled to relief denying Pawnee’s rights with respect to the Property. (Id.) See NRS § 13 30.010; NRS § 40.010 (“An action may be brought by any person against another who 14 claims an estate or interest in real property, adverse to the person bringing the action, 15 for the purpose of determining such adverse claim.”).5 Sphere argues that it is entitled to 16 relief on two separate but connected grounds. First, Sphere maintains that Pawnee did 17 not create a valid judgment lien on the property in April 2021 because, although 18 Pawnee recorded the judgment as required by section 17.150(2), it failed to record an

19 5Pawnee argues in its reply brief that Sphere’s citation to the Nevada Uniform 20 Declaratory Judgment Act is misplaced, and that this Court should instead apply the Federal Declaratory Judgments Act, because “[a] request for a declaratory judgment is 21 a remedy, not a [substantive] cause of action” and Sphere “has not stated a claim for ‘Quiet Title.’” (ECF No. 23 at 5.) However, Sphere does not present a standalone 22 declaratory judgment claim—its request is tied to Nevada’s quiet title statute. Actions to “resolve competing claims to title and clouds on title are quiet title actions brought under 23 NRS 40.010.” U.S. Bank, N.A. as Tr. for Specialty Underwriting & Residential Fin. Tr. Mortg. Loan Asset-Backed Certificates Series 2006-BC4 v. Thunder Properties, Inc., 24 503 P.3d 299, 304 (Nev. 2022). See also Weeping Hollow Ave. Tr. v. Spencer, 831 F.3d 1110, 1113 (9th Cir. 2016) (citing Chapman v. Deutsche Bank Nat'l Trust Co., 302 P.3d 25 1103, 1106 (Nev. 2013)). “A plea to quiet title does not require any particular elements, but ‘each party must plead and prove his or her own claim to the property in question’ 26 and a ‘plaintiff’s right to relief therefore depends on superiority of title.’” Chapman, 302 P.3d at 1106 (quoting Yokeno v. Mafnas, 973 F.2d 803, 808 (9th Cir.1992)). Because 27 Pawnee argues that declaratory relief is inappropriate only on the basis that Sphere has not stated a quiet title claim, in resolving this Motion the Court will consider the 28 substantive validity of the quiet title claim under NRS § 40.010. 2 Sphere argues that it is a bona fide purchaser because Pawnee failed to impart 3 requisite notice to third-party buyers. (Id. at 7.) Here, Sphere may be entitled to relief 4 even if Pawnee created a valid lien in April 2021. The Court addresses Pawnee’s 5 Motion as to each argument. 6 A. Attachment of Pawnee’s Judgment Lien Under NRS § 17.150 7 The Court first considers whether Pawnee created a valid lien in April 2021 as a 8 matter of Nevada law under NRS § 17.150, the statute governing judgment liens on real 9 property. Pawnee argues that Sphere fails to state a claim to remove the cloud on its 10 title because under section 17.150(2), Pawnee unequivocally established a valid lien on 11 the Property when it recorded its judgment in Washoe County in 2021. (ECF Nos. 1 at 12 6-7, 12 at 3.) Sphere responds that Pawnee did not establish a valid lien at that time, 13 because it failed to record an additional affidavit of judgment mandated under section 14 17.150(4) with information required to “put[] the world on notice of the identity of the 15 judgment debtor and the property that is the subject of the lien.” (ECF No. 16 at 3.) The 16 Court agrees with Pawnee. 17 Pawnee’s Motion rests primarily on a question of Nevada law—how and when a 18 judgment lien attaches under NRS § 17.150. Dismissal is proper under Rule 12(b)(6) 19 when a complaint exhibits the “lack of a cognizable legal theory.” Balistreri v. Pacifica 20 Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). While a district court must accept as 21 true all well-pled factual allegations in a complaint, legal conclusions are not entitled to 22 the assumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The Nevada 23 Supreme Court has not directly addressed the instant question. “Where the state’s 24 highest court has not decided the issue, a federal court must predict how that court 25 would decide.” Sears v. Russell Rd. Food & Beverage, LLC, 460 F. Supp. 3d 1065, 26 1071 (D. Nev. 2020) (citing Orkin v. Taylor, 487 F.3d 734, 741 (9th Cir. 2007)). See also 27 Goudge v. State, 287 P.3d 301, 303 (Nev. 2012). When considering a statute, the 28 Nevada Supreme Court “ascribe[s] plain meaning to its words, unless the plain meaning 2 is subject to more than one reasonable interpretation, the Court looks to legislative 3 intent to resolve ambiguity. See Id. “[R]eason and public policy may be considered in 4 determining what the legislature intended.” Id. In addition, the high court considers “the 5 statute’s multiple legislative provisions as a whole” because “statutory interpretation 6 should not render any part of a statute meaningless” or “produce absurd or 7 unreasonable results.” Leven v. Frey, 168 P.3d 712, 716 (Nev. 2007) (quoting Harris 8 Assocs., 81 P.3d 532, 534 (Nev. 2003)). 9 NRS § 17.150 is ambiguous to the extent the subsection (2) appears on its face 10 to indicate that judgment lien on a debtor’s current and future real property is created 11 when a transcript of the original docket or an abstract or copy of any judgment is 12 recorded, but subsection (4) imposes an additional requirement that a creditor creating 13 a lien on real property “shall record at [the time of the recording of a judgment] an 14 affidavit” with more information about the debtor and property.6 See id. The statute 15 could be read either to indicate that a lien is perfected according to subsection (2), or 16 that a lien does not attach unless or until an affidavit of judgment is filed under 17 subsection (4). The Court thus must apply statutory construction principles to interpret 18 NRS § 17.150, beginning with the statute’s plain meaning and considering legislative 19 intent to predict how the Nevada Supreme Court would decide the issue. See In re 20 Contrevo, 153 P.3d at 653-54. 21 First, taken as a whole, the plain meaning of the text of NRS § 17.150 supports 22 Pawnee’s position. Subsection (2) states that “[a] transcript of the original docket or an 23 24 6Subsection (4) states that “[i]n addition to recording the information described in subsection 2, a judgment creditor who records a judgment or decree for the purpose of 25 creating a lien upon the real property of the judgment debtor pursuant to subsection 2 shall record at that time an affidavit on judgment stating” information including the name 26 and address of the judgment debtor; the last four digits of the debtor’s driver’s license, identification card, or social security number; and the parcel number and address of 27 currently-owned real property. NRS § 17.150(4). In addition, “[a]ll information included in an affidavit of judgment recorded pursuant to this subsection must be based on the 28 personal knowledge of the affiant.” Id. 2 recorder in any county, and when so recorded it becomes a lien upon all the real 3 property of the judgment debtor not exempt from execution in that county, owned by the 4 judgment debtor at the time, or which the judgment debtor may afterward acquire, until 5 the lien expires.” NRS § 17.150(2) (emphasis added). Subsection (2) also provides that 6 a “lien continues for 6 years after the date the judgment or decree was docketed, and is 7 continued each time the judgment or decree is renewed,” unless one of several 8 enumerated exceptions applies. Id. On its face, this suggests that a judgment creates a 9 lien at the moment it is recorded. This plain reading is supported by the fact that 10 recording under subsection (2) sets a six-year timeframe during which a lien is valid, 11 subject to few exceptions, and this clock is not impacted by the filing of an affidavit 12 under subsection (4). See Evans v. Samuels, 75 P.3d 361, 363 (Nev. 2003) 13 (emphasizing that NRS § 17.150(2) provides a lien will last for six years from the date 14 the judgment was docketed); Leven, 168 P.3d at 713. 15 Moreover, by the statute’s plain language, a lien created under subsection (2) 16 applies not just to a debtor’s presently-owned real property but to property “afterward 17 acquire[d]” by the debtor. NRS § 17.150(2). Because real property acquired in the future 18 by definition is not yet identifiable by parcel number and address, it is not clear why any 19 lien’s initial validity must depend upon the recording of this information under subsection 20 (4)(c) for the purpose of notice, as Sphere argues. (ECF No. 16 at 3.) Rather, because 21 subsection (2) plainly indicates that a judgment lien attaches to not-yet-acquired future 22 property at the moment of recording, the statute most logically suggests that all liens are 23 perfected at the time a judgment is recorded as to debtors—who also independently 24 receive notice of judgments under Chapter 21 of the Nevada Revised Statutes.7 See, 25

26 7The Nevada legislature amended NRS § 17.150 in 2011 to include additional 27 requirements for the affidavit filed under subsection (4), including requiring parcel number and address of currently-owned real property, as well as indicating that 28 information in the affidavit must be based on personal knowledge. See 2011 Nev. Laws 2 Revised Statutes. See, e.g., NRS § 21.020 (governing issuance of writs of execution 3 “out of the real property belonging to the debtor on the day when the abstract or certified 4 copy of the judgment or decree was recorded”); NRS § 68.040 (governing liens created 5 by judgments rendered in Nevada justice court and stating that when an abstract is 6 recorded the judgment “becomes a lien upon all the real property of the judgment 7 debtor” without requiring an additional affidavit). 8 This reading of the statute is also consistent with Nevada courts’ approaches. 9 While the Nevada Supreme Court has never directly addressed this issue, it has 10 regularly assumed that recording a judgment under subsection (2) itself creates a valid 11 lien. See, e.g., Leventhal v. Black, 305 P.3d 907, 909 (Nev. 2013) (“[A] law firm can sue 12 its client and obtain a money judgment for fees due, thereby acquiring, if recorded 13 [under NRS § 17.150(2)], a judgment lien against the client's property”); In re Contrevo, 14 153 P.3d at 653-54 (citing to § 17.150(2) as guidance for when a judgment becomes a 15 lien on real property). Pawnee cites to the single unpublished disposition in which the 16 court of appeals has considered this question directly, Secured Holdings, Inc. v. Eighth 17 Jud. Dist. Ct. In & For Cnty. of Clark, 133 Nev. 1072, (Nev. App. 2017). (ECF No. 12 at 18 2-3.)8 There, the court of appeals similarly determined that filing an affidavit under 19 section 17.150(4) is not a condition precedent to the creation of a valid judgment lien on 20 real property. (Id.) While the affidavit is required, the statute “does not provide that the 21 lien is invalid if the affidavit is not filed” and does not provide any consequence if an 22 affidavit of judgment is not recorded. (Id.) The state supreme court would likely agree 23

24 Ch. 388 (S.B. 186). The amendment, however, did not clarify or change the requirements or timing for attachment of a lien. Id. 25 8Sphere notes that the decision is not binding on this Court and may not be cited 26 for precedential value according to Nevada Rule of Appellate Procedure 36(c). (ECF No. 16 at 11.) That rule does not apply to this Court. The Court considers the disposition 27 only as to its persuasive value in interpreting how the state high court would rule on the issue. 28 2 NRS 17.150[(4)].” (Id.) 3 Sphere argues that the Nevada Supreme Court’s decision in Leven v. Frey, 168 4 P.3d 712, which applies statutory construction principles to a related statute governing 5 judgment renewals, supports its position that a lien attaches to real property only when 6 an affidavit is filed in accordance with NRS § 17.150(4). (ECF No. 16 at 13-14.) But 7 Plaintiff misinterprets the nature of the strict compliance and recording requirements at 8 issue in Leven as they relate to the requirements of NRS § 17.150 because the 9 “affidavits” at issue under the two statutes are not analogous. In Leven, a judgment 10 creditor timely filed an affidavit of judgment renewal but failed to serve or record the 11 affidavit according to the timeline set by the renewal statute, NRS § 17.214. See 168 12 P.3d at 714. The debtor moved to declare void the expired judgment. See id. The 13 Nevada Supreme Court ruled in favor of the debtor, finding that NRS § 17.214 requires 14 strict compliance with all the renewal statute’s requirements, including timely recording 15 and service of the renewal affidavit. See id. at 720. 16 The Nevada Supreme Court’s decision in Leven is consistent with Defendant’s 17 interpretation that a lien is perfected once the requirements of NRS § 17.150(2) are met 18 for several reasons. First, the Leven Court explicitly reads the renewal statute in 19 conjunction with NRS § 17.150, and in doing so assumes that a lien on real property 20 becomes effective according to the requirements of section 17.150(2), without reference 21 to section 17.150(4). See id. at 715 (quoting Evans v. Samuels, 75 P.3d at 363) (“NRS 22 17.150(2) creates a lien on a debtor's real property in a particular county when a 23 judgment is recorded in that county . . . .”) Second, and more structurally, the Leven 24 Court interprets section 17.214(2) to require recording a judgment renewal affidavit in 25 order to perfect the renewal—in addition to merely filing that document—because 26 renewal without recordation would result in liens “automatically continuing under NRS 27 17.150(2) without any recorded notice.” Id. at 717. However, importantly, the affidavit 28 required to renew a judgment under section 17.214 requires no information beyond that 2 of the parties; if the judgment is recorded, the name of the county and the document 3 number; the date and the amount of any payment on a judgment; the exact amount due 4 on the judgment). The recorded affidavit which perfects renewal of a judgment does not 5 require additional information about debtors or real property analogous to the affidavit in 6 section 17.150(4), such as the debtor’s social security number, driver’s license number, 7 or parcel number. See id. This implies that renewal of a lien is not conditioned on such 8 information.9 Put another way, it would produce an inconsistent result for a lien on real 9 property to attach only if an affidavit with complete real property information is filed 10 under section 17.150(4), while a judgment may be renewed without a requirement to 11 record or update similarly detailed information to renew the lien associated with the 12 judgment. 13 The Court thus concludes that the state high court would interpret NRS § 17.150 14 to indicate that a judgment becomes a valid lien when it is recorded under subsection 15 (2), and that recording an affidavit of judgment under subsection (4), while mandatory, is 16 not a condition precedent to the creation of a valid lien. Accordingly, the Court finds that 17 Sphere cannot as a matter of law state a claim for declaratory relief or quiet title purely 18 19 20

21 9As the Leven Court notes, when the Nevada legislature amended the renewal 22 statute in 1995 it “focused on requiring that affidavits be recorded to ensure that real 23 property liens are apparent in title searches.” Id. at 716 (citing Hearing on S.B. 455 Before the Senate Judiciary Comm., 68th Leg., at 11 (Nev., May 23, 1995)). It failed to 24 amend the statute to require additional information in the affidavit beyond that required 25 to establish a lien under 17.150(2). See id. Moreover, when the legislature amended NRS § 17.150 in 2011 to require additional information in subsection (4) affidavits, it 26 simultaneously amended NRS § 17.214, but added only that the document number of a 27 recorded judgment must be included in the renewal affidavit. See 2011 Nev. Laws Ch. 388 (S.B. 186). 28 2 Property.10 3 B. Validity of Judgment Lien as to Sphere 4 The Court next considers Sphere’s alternative claim that it is entitled to 5 declaratory relief because it is a bona fide purchaser that took title to the Property free 6 and clear of Pawnee’s claimed interest. (ECF No. 1 at 5, 7; ECF No. 16 at 10-11.) In 7 particular, the Court considers whether Sphere can claim bona fide purchaser status 8 even if a valid lien attached in April 2021. Again, Sphere argues that “[w]ithout the 9 recording of an affidavit of judgment [under NRS § 17.150(4)] . . . the world is not on 10 proper notice of the identity of the judgment debtor and the property to which the lien 11 pertains.” (ECF No. 16 at 14-15.) Pawnee argues that the default judgment recorded in 12 April 2021 put Sphere on constructive notice of the lien and thus that Sphere cannot 13 qualify as a bona fide purchaser. (ECF No. 23 at 4-5.) The Court finds that while 14 recording an affidavit under NRS § 17.150(4) is not a condition precedent to the 15 creation of a valid lien as to a debtor, failure to record such an affidavit may plausibly 16 result in inadequate notice to third-party purchasers and prevent a creditor from 17 enforcing a lien against real property obtained in good faith. On this basis, the Court 18 finds that Sphere has stated a plausible claim. 19 Under Nevada law, a purchaser of real property with notice of a prior interest 20 takes the property subject to that interest. See NRS § 111.320; Buhecker v. R.B. 21 Petersen & Sons Const. Co., Inc., 929 P.2d 937, 939 (Nev. 1996). “A subsequent 22 purchaser with notice, actual or constructive, of an interest in the land superior to that 23 which he is purchasing is not a purchaser in good faith, and not entitled to the protection

24 10Sphere also seeks judgment declaring that Pawnee’s October 2022 re- 25 recording of the judgment with an additional declaration of judgment did not create a lien on the Property because Clark did not own the property at the time of that 26 recording. (ECF No. 1 at 6-7.) There is no dispute that Clark no longer owned the property at that time. Pawnee also does not dispute that the October 2022 recording 27 had no impact on legal rights to the Property in its Motion, and such an argument is contingent on the invalidity of the initial April 2021 attempt to create a lien. Thus, the 28 Court will not address the October recording further in resolving this Motion. 2 1970). NRS § 247.120(1) provides that “each county recorder shall, upon the payment 3 of the prescribed statutory fees, record separately, in a manner which will allow a legible 4 copy to be made” specified documents including “transcripts of judgments which by law 5 are made liens upon real estate in this state.” NRS § 247.190 further provides that “[a] 6 document acknowledged or proved and certified and recorded in the manner prescribed 7 in this chapter from the time of depositing the document with the county recorder of the 8 proper county for record, provides notice to all persons of the contents thereof, and all 9 third parties shall be deemed to purchase and take with notice.” 10 Whether or not a purchaser of real property performs a title search, “he or she is 11 charged with constructive notice of, and takes ownership of the property subject to, any 12 interest such a title search would reveal.” Adaven Management, Inc. v. Mountain Falls 13 Acquisition Corp., 2008, 191 P.3d 1189, 1195 (Nev. 2008). In Nevada, record indexes 14 are arranged alphabetically by grantor and grantee name, and a party must “search the 15 grantor index . . . to see whether he or she transferred or encumbered the property 16 during the time between his or her acquisition of the property and its transfer to the next 17 person in the chain of title.” Id. 18 Here, Pawnee’s failure to record an affidavit of judgment is meaningful. The 19 automatic constructive notice provided under NRS § 247.190 requires that such a 20 recording be made “in the manner prescribed” by statute to provide notice of its 21 contents. Because NRS § 17.150(4) prescribes that an affidavit “shall” be recorded at 22 the same time as a judgment, and Pawnee did not record such an affidavit, the Court 23 finds that Pawnee’s April recording of its default judgment falls outside the blanket 24 constructive notice protection conferred by the NRS § 247.190. This reading aligns with 25 a common-sense view of legislative intent. The affidavit required by section 17.150(4) 26 plainly connects information about a judgment debtor—who may, for example, have a 27 common name and be otherwise difficult to identify through a brief abstract of 28 judgment—with information about the debtor’s property. The legislature strengthened 2 property information included in an affidavit is based on personal knowledge. See 2011 3 Nev. Laws Ch. 388 (S.B. 186). In short, a primary benefit of requiring a recorded 4 affidavit of judgment is that it makes it easier for third parties to identify debtors, 5 associated liens, and currently-owned properties. The Court concludes it would frustrate 6 legislative intent to find that failure to record an affidavit of judgment is wholly irrelevant 7 to its consideration of constructive notice. 8 The Court finds that Sphere has alleged enough facts to support a plausible 9 inference that it had no constructive notice of Pawnee’s lien on the Property after an 10 adequate search. See Iqbal, 556 U.S. at 678. It is true that even where Pawnee failed to 11 record an affidavit of judgment, Sphere is nevertheless charged with constructive or 12 inquiry notice of a Pawnee’s lien that a title search would reveal, whether or not it in fact 13 conducted such a search. See Adaven Mgmt., 191 P.3d at 1195. But as Sphere alleges, 14 “the [April 2021] standalone default judgment identified the judgment debtor as ‘Donald 15 Clark, Jr.,’ rather than ‘Donald Clark’ as he was known to Plaintiff based upon the 16 documents in the sale.” (ECF No. 16 at 5.) Absent a properly-recorded affidavit, 17 Pawnee’s recorded judgment did not include any further identifying information about 18 Clark, such as his social security or driver’s license number. (Id.) The recorded 19 judgment did not itself include any information about the Property, such as its APN. (Id.) 20 And it did not include a statement confirming that Clark was the legal owner of the 21 Property. (Id.) Here, Sphere states facts indicating that the only information tying 22 Pawnee’s lien to the Property at the time of purchase was Clark’s name itself presented 23 non-identically across multiple recordings. 24 As Pawnee notes, constructive or inquiry notice may potentially arise when a 25 party searches the grantor and grantee index and ignoring names with suffixes. (ECF 26 No. 23 at 5.) See Berge v. Fredericks, 591 P.2d 246, 249 (1979) (emphasizing that a 27 subsequent purchaser is not a good faith purchaser without notice when they possess 28 facts that would inspire a reasonable person to make further inquiry). But see Tai-Si Kim 2 249) (noting that a subsequent purchaser claiming protection “may rebut the 3 presumption of notice [of an unrecorded or improperly recorded interest] by showing 4 that he made due investigation without discovering the prior right,” and that the question 5 of adequacy of investigation is one for the fact finder). Counties in Nevada vary in their 6 indexing structures and the appropriate construction of a title search may similarly 7 vary.11 Both “Donald” and “Clark” are common names. And in other cases where the 8 Nevada high court has charged parties with constructive or inquiry notice even where 9 there are recorded errors in grantor names or where property information is missing in 10 recorded documents, parties have had more information than Sphere had when it 11 purchased the Property in the instant case. See, e.g., Adaven Mgmt., 191 P.3d at 1195 12 (finding that plaintiff had inquiry notice of a prior water right because it had access to a 13 both a deed of sale and a deed of trust in the grantor-grantee index and the permit 14 number was included explicitly in the deed of trust). 15 Taking the facts in the light most favorable to the Plaintiff, the Court finds that 16 Sphere has stated a plausible claim for declaratory relief on the basis that as a third- 17 party in Washoe County, Sphere did not have notice of Pawnee’s lien and qualified as a 18 bona fide purchaser for value. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 19 (2007). The Court accordingly denies Pawnee’s motion to dismiss Sphere’s quiet title 20 claim. 21 /// 22 23 11In the context of tax liens on property, while governing statutes differ from judgment lien statutes in significant ways, courts have come to inconsistent conclusions 24 about what constitutes a reasonable search of a recording office, including with regard to errors in names. See In re Crystal Cascades Civ., LLC, 398 B.R. 23, 29-30 (Bankr. D. 25 Nev. 2008), aff'd, 415 B.R. 403 (B.A.P. 9th Cir. 2009) (noting that locality—and the particular manner in which liens are indexed and searchable—introduces salient factual 26 questions about adequacy of a search). Compare United States v. Polk, 822 F.2d 871 (9th Cir.1987) (enforcing a tax lien when there was a disparity in record names between 27 “Roy Bruce Polk” and “Bruce Polk”), with Haye v. United States, 461 F.Supp. 1168 (C.D.Cal.1978) (finding a superior third party property interest when the notice of tax 28 lien misspelled a taxpayer's name as “Castello” rather than “Castillo”). 1 || IV. CONCLUSION 2 The Court notes that the parties made several arguments and cited to several 3 || cases not discussed above. The Court has reviewed these arguments and cases and 4 || determines that they do not warrant discussion as they do not affect the outcome of the 5 || Motion before the Court. 6 It is therefore ordered that Pawnee’s motion to dismiss (ECF No. 12) is denied. 7 DATED THIS 17" Day of November 2023. MIRANDA M. DU 10 CHIEF UNITED STATES DISTRICT JUDGE 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14