US Bank v. Thunder Properties, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 17, 2022
• Docket: 17-16399
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 17 2022 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

U.S. BANK, N.A., as Trustee for the No. 17-16399 Specialty Underwriting and Residential Finance Trust Mortgage Loan Asset-Backed D.C. No. Certificates Series 2006-BC4, 3:16-cv-00501-RCJ-WGC

Plaintiff-Appellant, MEMORANDUM* v.

THUNDER PROPERTIES, INC.,

Defendant-Appellee,

and

WESTLAND REAL ESTATE DEVELOPMENT AND INVESTMENTS,

Defendant.

Appeal from the United States District Court for the District of Nevada Robert Clive Jones, District Judge, Presiding

Argued and submitted September 13, 2019 Submission withdrawn October 2, 2019 Re-submitted February 15, 2022 San Francisco, California

Before: GOULD, BEA, and FRIEDLAND, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Appellant U.S. Bank appeals from the district court’s order dismissing its

claim against Appellee Thunder Properties, Inc. (“Thunder”) for a declaratory

judgment that U.S. Bank’s first deed of trust on a residential property owned by

Thunder remains a present interest in the property. We have jurisdiction under 28

U.S.C. § 1291. We vacate the district court’s order dismissing U.S. Bank’s action

and remand for further proceedings.

Appellant U.S. Bank held a first deed of trust on a residential property in

Cold Springs, Nevada. After the property owners fell behind on their homeowners

association (“HOA”) assessments, the HOA proceeded with a foreclosure sale,

recording its election to sell the property in April 2010, selling the property in

February 2011, and recording the sale on the same day it occurred. The buyer later

sold the property to Westland Real Estate Development and Investments, which

transferred its interest in the property to Appellee Thunder Properties, Inc.

(“Thunder”).

In August 2016, U.S. Bank sued Thunder in the United States District Court

for the District of Nevada. U.S. Bank sought a declaration to quiet title, arguing

that its deed of trust was not extinguished by the foreclosure sale and remains a

present interest in the property. The district court granted Thunder’s motion to

dismiss U.S. Bank’s claim for declaratory relief. The district court applied the

five-year statute of limitations set forth in Nevada Revised Statutes §§ 11.070 and

2 11.080 for certain quiet title actions, reasoning that U.S. Bank’s claim accrued and

the five-year limitations period started to run on February 10, 2011, when the

foreclosure sale took place and was recorded. The district court thus held that the

claim was time-barred by the time U.S. Bank filed its Complaint in August 2016,

approximately five and a half years later. U.S. Bank appealed the dismissal of its

claim to this court.

We vacated submission, stayed further proceedings, and certified the

following questions to the Nevada Supreme Court:

(1) When a lienholder whose lien arises from 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 of limitations under City of Fernley v. Nevada Department of Taxation, 366 P.3d 699 (Nev. 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?

U.S. Bank, N.A. v. Thunder Props., Inc., 958 F.3d 794, 796 (9th Cir. 2020).

The Nevada Supreme Court accepted these certified questions and, on

February 3, 2022, issued an opinion answering them. U.S. Bank, N.A. v. Thunder

Props., Inc., No. 81129, 2022 WL 332614 (Nev. Feb. 3, 2022). The court held that

declaratory relief actions are not categorically exempt from statutes of limitations

under Nevada law, id. at *1-2, and that Nevada’s four-year catch-all statute of

limitations, Nev. Rev. Stat. § 11.220, applies to actions like this one to determine

3 the validity of a lien, id. at *3. The court further held that the statute of limitations

does not begin to run until the titleholder affirmatively repudiates the lien or takes

some action that is otherwise inconsistent with the lien’s continued existence, id. at

*5—and the court specified that a foreclosure sale does not necessarily meet these

criteria for starting the limitations period, id. at *5-6.

On the record before us, we cannot determine whether such an action

triggering the running of the limitations period has occurred and, consequently, we

cannot determine whether U.S. Bank’s action is time-barred by the four-year

limitations period. Accordingly, we vacate the district court’s order dismissing

U.S. Bank’s action and remand for further proceedings consistent with the Nevada

Supreme Court’s opinion answering our certified questions.

VACATED and REMANDED.