DEEDS OF TRUST: The court held that a Home Equity Line of Credit with a closed draw period and specified maturity date is both a negotiable instrument and a promissory note. Accordingly, the statute of limitations begins to run from the earlier of the fixed maturity date or the date upon which the lender accelerates the loan, and not from the date of the first missed payment as it would with a revolving line of credit. The court also held that a home is “owner-occupied” under NRS 107.015 where title is in the settlor/trustees as trustees of a trust and the settlor/trustees reside in the property.

LIS PENDENS: The court held that a creditor's claim seeking avoidance of a fraudulent transfer under Nevada Uniform Fraudulent Transfer Act supports the recording of a lis pendens even though the creditor does not claim an interest in the property but instead seeks to transfer title back to the debtor. Such an action is one "affecting the title or possession of real property" under NRS 14.010(1). The court pointed out that a lis pendens may not be used in place of a writ of attachment to secure the ultimate collection of an anticipated money judgment.

TRUSTS: Decedent signed a trust agreement before he died containing a statement that a “house” was transferred to himself and a third person as trustees, but did not execute a deed conveying property to the trust. The court held that the trust agreement could be characterized as either a declaration that the house is held in trust or as a transfer of the house to the trust. The court also held that the reference to the house was a sufficient description because the house could be identified through extrinsic evidence. The court pointed out that Nevada law (NRS 163.002(1)(a) provides for a declaration of trust to be made where the trustee is a third person, whereas California law provides for a declaration of trust only where the grantor is the trustee.

RECEIVERSHIP: The court held that a lender is entitled to the appointment of a receiver when the borrower agrees to such in the event of a default and, after a default, the lender seeks a receiver in enforcing the loan, NRS 32.260(2), or the property is subject to the assignment of rents, NRS 107A.260(1). As the lender has an entitlement to a receiver in such instances, appointment of a receiver is not subject to the court's discretion.

HOA FORECLOSURE: The court held:
1. A homeowners association had no duty to disclose whether it had received a tender of the superpriority portion of the HOA lien because NRS 116.31164(2), which now requires recordation of a notice that the superpriority portion has been tendered, was not enacted until after the foreclosure in this case.
2. The excess sale proceeds were properly paid to the foreclosed out owner pursuant to NRS 116.31164(8)(b).

HOMESTEADS: In this civil forfeiture action, the court held that incarcerated individuals may still be deemed residents for purposes of the homestead exemption under NRS 115.020.

JUDGMENTS: The court held that enforceability of a foreign judgment is not defeated if a judgment creditor domesticates the judgment before its expiration in the rendering state, notwithstanding that the judgment debtor receives notice of the filing after its purported expiration in the rendering state.

DEEDS OF TRUST: NRS 106.240 provides that 10 years after the debt secured by a deed of trust has become "wholly due" and has remained unpaid , "it shall be conclusively presumed that the debt has been regularly satisfied and the lien discharged." The court held that, while the notice of default accelerated the due date, recording a notice of rescission, as defendant did here, cancels the acceleration triggered by the notice of default, such that NRS 106.240's 10-year period is reset.

QUIET TITLE / HOA FORECLOSURE: The court held that when the beneficiary of a deed of trust brings a claim seeking a declaratory judgment that the lien was not extinguished by a subsequent homeowner's association lien foreclosure, the claim is subject to the four-year catch-all statute of limitations in NRS. 11.220. However, the statute of limitations does not begin to run until the titleholder affirmatively repudiates the lien of the deed of trust.

HOA FORECLOSURE: The court held:
1. The foreclosure of an HOA lien did not wipe out defendant's deed of trust because defendant's predecessor tendered the amount of the super-priority portion of the lien (and possibly more), and
2. The fact that defendant recorded its assignment of the deed of trust after the foreclosure sale is irrelevant because the original recordation of the deed of trust gave constructive notice that title was subject to the deed of trust and the assignment did not change the status of plaintiff's title, which was always subordinate to the deed of trust.

DEEDS OF TRUST: The court held that because Oella Ridge took title to property subject to Silver State's deed of trust, and because Silver State was entitled to its reasonable fees under the deed of trust, Silver State properly added its reasonable fees to the indebtedness secured by the deed of trust. Nevada Rules of Civil Procedure Section 54(d)(2), which requires a party seeking attorney's fees to move for such fees at the case's conclusion, does not apply to this situation.

INSURANCE: The court held that the burden of proving the applicability of an exception to an exclusion for coverage in an insurance policy falls on the insured, and further held that the insured may rely on any extrinsic evidence that was available to the insurer at the time the insured tendered the defense to the insurer.

HOA FORECLOSURE: The court held that under NRS 116.3116, where an HOA assessment is assessed yearly, only the 9-month pro rata portion of the assessment is entitled to superpriority status even where the annual assessment became due within 9 months preceding the HOA's recording of its notice of delinquent assessments.

INSURANCE: In a 4-3 decision answering a question referred by the 9th Circuit Court of Appeals, the court held that an insurer is entitled to reimbursement of amounts expended in defense of its insureds where it was determined in a declaratory relief action that the insurer did not owe a duty to defend and the insurer expressly reserved its right to seek reimbursement in writing after defense was tendered, even thought the insurance policy contains no reservation of rights.

HOA FORECLOSURE: The court held that a valid presale tender of the super-priority portion of an HOA lien preserved the deed of trust, in spite of conclusive recitals of default in the HOA's foreclosure deed.

HOA FORECLOSURE: The court has previously held that the Federal Foreclosure Bar, 12 U.S.C. 4617(j)(3), preempts NRS 116.3116 and prevents a homeowners' association foreclosure sale from extinguishing a first deed of trust that secures a loan owned by the Federal Housing Finance Agency or by a federal entity under FHFA conservatorship. Here, the court held that a loan servicer can raise the Federal Foreclosure Bar on FHFA's behalf without joining the regulated entity that owns the loan as a party, and that the 6-year statute of limitations under 12 U.S.C. 4617(b)(12) for contract claims applies, not the 3-year statute of limitations for tort claims.

WATER RIGHTS: The court held that the public trust doctrine as implemented through Nevada's comprehensive water statutes does not permit the reallocation of water rights already adjudicated and settled under the doctrine of prior appropriation. The court reaffirmed that the public trust doctrine applies in Nevada and clarified that the doctrine applies to all waters within the state, including those previously allocated under prior appropriation.

HOA FORECLOSURE: The court held that under NRS 116.3116, where an HOA assessment is assessed yearly, the entire amount of the assessment is entitled to superpriority status so long as the assessment became due within 9 months preceding the HOA's recording of its notice of delinquent assessments.

LOST NOTE: The court held that defendant satisfied NRS 104.3309 and may enforce a lost note in a judicial foreclosure action, where defendant produced a lost-note affidavit and other evidence to show that it had acquired the right to enforce the note from a party entitled to enforce the note, the note was not lost due to a prior transfer or lawful seizure, and the not could not be located. The court noted that an assignment of a deed of trust also transfers the secured obligation unless the parties to the transfer agree otherwise.

DIVORCE: While married, Paul and Chari lived in a home Chari owned as her separate property. Chari later transferred the property to the family trust via a quitclaim deed, but did not change its status as her separate property. They were subsequently divorced. The court affirmed the district court order transferring the property to the secondary beneficiary of the trust because the plain language of NRS 111.781(1) automatically revokes any revocable disposition from one spouse to another upon divorce.

QUIET TITLE: The 5-year limitations period in NRS 11.080 for bringing a quiet title action does not run against and owner who is undisputed possession of the land. Instead, it begins to run from the time ownership or possession is disputed. Here, the facts alleged in the complaint do not establish whether, or when, plaintiff received notice of disturbed possession, so the court reversed the district court's dismissal order.

HOA FORECLOSURE: The court held that a homeowner has the ability to cure a default as to the superpriority portion of a Homeowner's Association lien. Allocating partial payments made by a homeowner depends on the express or implied intent and actions of the homeowner and the HOA and, if indeterminate, an assessment of the competing equities involved. Accordingly, the court reversed a summary judgment in favor of defendant and remanded for the parties to develop and the district court to determine the proper allocation of the homeowner's payments.

HOA FORECLOSURE: The court held that an offer to pay the HOA lien superpriority amount in the future, once that amount is determined, does not constitute a valid tender. However, formal tender is excused when evidence shows that the party entitled to payment had a known policy of rejecting any payment for less than the full lien amount. NOTE: In Footnote 3 the court points out that it did not reach the question of whether tender is excused when the HOA fails to provide the statutorily required notice of the amount due under NRS 116.31162(1)(b)(2)(I) (detailing that the HOA must provide "[t]he amount of the association's lien that is prior to the first security interest".

TRUSTEE'S SALES: The court held that trustees who exercise a power of sale under a deed of trust pursuant to NRS Chapter 107 are not engaging in collection activities under NRS Chapter 649, and do not need to be licensed under that chapter. While deed of trust trustees engage in activities that would otherwise meet the definition of a collection agency under NRS Chapter 649, the comprehensive statutory scheme of NRS Chapter 107 demonstrates that the Nevada Legislature did not intend that deed of trust trustees be subjected to NRS Chapter 649 licensing requirements when they are engaged in nonjudicial foreclosure.

HOA FORECLOSURE: The court held that a property owner's association assessment lien in a commercial common-interest community did not have any super-priority status over a first deed of trust. The CC&R's expressly elected to incorporate NRS 116.3116-31168, and no other provisions of Chapter 116. Accordingly, NRS 116.1104 did not apply to render the CC&Rs' mortgage savings clause unenforceable, nor did the CC&Rs apply other NRS Chapter 116 provisions that would have provided super-priority status under NRS 116.3116(2).

HOMEOWNERS ASSOCIATIONS: Plaintiffs asserted that Defendant ("RLE") was not a validly created Homeowners Association. The court held that 1) RLE is a valid common interest community within the meaning of NRS 116.021 because RLE's Declaration contained an implied payment obligation for the common elements and other real estate that plaintiffs had notice of by virtue of the Declaration when they purchased their lots and 2) NRS 116.3101(1) (requiring a unit owners' association to be organized when the first unit in a common-interest community is conveyed) does not apply to common-interest communities formed before the statute was enacted in 1992.

HOA FORECLOSURE: An HOA conducted a trustee's sale in violation of the automatic stay in the property owner's bankruptcy, but later obtained an order from the bankruptcy court retroactively validating the sale. The court acknowledged that a foreclosure sale may be set aside if the price obtained is greatly inadequate AND the sale is affected by some irregularity, such as evidence of fraud, oppression or unfairness. The court held that, while the price obtained was greatly inadequate, the sale would not be set aside because the sale was properly conducted in accordance with NRS Chapter 116, and there was no evidence that the violation of the automatic stay resulted in unfairness.

HOA FORECLOSURE: An HOA foreclosed its lien, including its super-priority lien and filed this quiet title action asserting that the foreclosure wiped out a first deed of trust that was serviced by Wells Fargo but had actually been assigned to the Federal Home Loan Mortgage Corporation (Freddie Mac). The court pointed out that the foreclosure of an HOA super-priority lien does not extinguish a loan owned by the Federal Housing Finance Agency (FHFA) or when the FHFA is acting as conservator of a federal entity such as Freddie Mac or the Federal National Mortgage Association (Fannie Mae). This is due to the operation of the Federal Foreclosure Bar (12 U.S.C. 4617(j)(3)). The court held that the Federal Foreclosure Bar applies even where there was no recorded assignment of the deed of trust and Wells Fargo did not produce the actual loan servicing agreement, where properly authenticated business records establish the ownership interest in the loan.

NOTE: This case was decided under former NRS 106.210, which provided that an assignment of deed of trust may be recorded. The statute was subsequently amended to provide that the assignment must be recorded. However, the court noted that even under the amended statute, since MERS was the original beneficiary of the deed of trust and recorded an assignment to Wells Fargo in 2011, both entities were agents for the note holder. Accordingly, the deed of trust did not need to be assigned to Freddie Mac in order for Freddie Mac to own the secured loan and NRS 106.210 was, therefore, not implicated.

TITLE INSURANCE: Plaintiff learned that his property was not lakefront property and was, instead, separated from a lake by an 18-foot strip of land owned by the County. Defendant denied plaintiff's claim under his title insurance policy for diminution in value. The Court found that there was no coverage under the policy because the property description in the policy referenced a 1921 plat, which distinctly depicts the 18-foot strip of land separating the insured property from the meander line of the lake. Furthermore, the court found that a title insurance policy does not insure against losses due to a seller's misrepresentations or a buyer's failed expectations. It was plaintiff's duty to confirm that the advertised land was waterfront.

HOA FORECLOSURE: The court remanded the case to the trial court, holding:
1. The foreclosure of an HOA super-priority lien is void if the holder of the first deed is not sent a copy of the notice of default and notice of sale AND the lender is prejudiced because it did not receive notice by other means. Here, the notice of default was not properly provided because it was sent to a non-affiliated entity at its "return to" address shown in the top left of the deed of trust, but not sent to the lender's address shown in the first paragraph.
2. Even if the sale was not void, the grossly inadequate price (10-15% of fair market value), combined with problems with the notice of default -- even assuming the lender received the notice of sale -- presents a classic claim for determining that the sale is voidable.

HOA FORECLOSURE: The court held that a property owner properly redeemed the property from an HOA foreclosure sale, finding:
1. The amount necessary to redeem was properly made where the owner directed the trustee to return the bid amount to the purchaser, less the amount paid to the foreclosing HOA, and combined with the owner's own funds in an amount that made up the balance necessary to redeem. The entire redemption amount did not need to come directly from the owner.
2. Compliance with the requirement in NRS 116.31166(4)(a) for the owner to include a certified copy of the deed was not necessary where there was no dispute about ownership of the property and the purchaser could not demonstrate prejudice.
3. Substantial compliance with the redemption provisions of NRS 116.31166 is sufficient without explicitly invoking the statute.

GARBAGE LIENS: NRS 444.520, authorizing a garbage lien, incorporates the mechanics lien statute's procedural requirements for foreclosure, as set forth in NRS 108.239. But NRS 444.520 contains its own requirements for perfecting a lien and does not incorporate the requirements for perfecting a lien set forth in NRS 108.226. Also, NRS 444.520 provides that a garbage lien is a "perpetual lien", so no limitations period applies to foreclosing the lien. (Note: The statute provides that a garbage lien is a super-priority lien "superior to all liens, claims and titles other than liens for general taxes and special assessments".)

HOA FORECLOSURE: A unit-owners' association in a nonresidential development conducted a trustee's sale pursuant to NRS Chapter 116. The property was sold to plaintiff and shortly after the sale was held, the trustee realized that the owner had sent a check to cure the default. The owner had the burden of proof to show that the check arrived before the sale, but was unable to do so. The court held that the purchaser at the sale was entitled to a trustee's deed because even if the purchase price was inadequate, there was no showing that the sale was infected with fraud, unfairness or oppression.

HOA FORECLOSURE: The court held that an HOA foreclosure did not wipe out Bank of America's deed of trust. The bank's offer to pay the superpriority amount of the HOA lien in the future was not sufficient to constitute a tender. However, the bank was excused from making a formal tender because the HOA's agent told the bank's agent that it would reject a superpriority tender if made.

FORECLOSURE MEDIATION: The court held that where an individual has been appointed special administrator of an estate that includes residential property held in the name of the decedent alone, the special administrator resides in the property as his or her primary residence, and the special administrator retains an ownership interest via intestate succession laws, the administrator is entitled to participate in the Foreclosure Mediation Program.

INSURANCE: An insurer's liability where it breaches its duty to defend is not capped at the policy limits plus defense costs. Instead, an insurer may be liable for any consequential damages caused by its breach. Furthermore, this liability appliers even where the insurer does not act in bad faith.

JOINT TENANCY: Fractional shares held by joint tenants, as well as tenants in common, are presumed to be held in equal shares unless the parties are not related (and? or?) show no donative intent. Where the presumption is successfully rebutted, the proceeds upon sale are to be divided in proportion to the amount contributed by each to the purchase price. Here, the court held that the parties held title in equal shares, finding that, while plaintiff paid the full purchase price, defendant was able to establish plaintiff’s donative intent.

HOA FORECLOSURE: In upholding the District Court's conclusion that the foreclosure of a Homeowner's Association's assessment lien wiped out plaintiff's deed of trust, the court held:
1. The trustee's sale could not be sit aside on equitable grounds because plaintiff failed to show evidence of unfairness or irregularity in the foreclosure process,
2. A properly conducted HOA foreclosure sale is not a fraudulent transfer under the Uniform Fraudulent Transfer Act (NRS Chapter 112), even though the price paid by the purchaser was very low, and
3. An alleged inaccuracy in a foreclosure deed does not invalidate an otherwise valid foreclosure sale.

HOA FORECLOSURE: The court held that the foreclosure of a Homeowner's Association's assessment lien did not wipe out the bank's deed of trust because:
1. The bank tendered the super priority portion of the lien to the HOA,
2. The bank had the right to condition the tender on the payment satisfying the super priority lien,
3. The super priority portion of the HOA lien includes only 9 months of unpaid assessments (and, not involved here, charges for maintenance and nuisance abatement), and
4. Defendant's status as a bona fide purchaser for value is irrelevant when a defect in the foreclosure proceeding renders the sale void.

IMPLIED RESTRICTIVE COVENANTS: Defendant purchased a parcel of land, formerly used as part of a private golf course, adjacent to his residential parcel. Plaintiff sought to prevent defendant from constructing anything on the additional parcel based on the doctrine of implied restrictive covenants. That doctrine has not been recognized in Nevada and the court refused to do so in this case, although it has been recognized in some other jurisdictions. Also, the plaintiff purchased the property "as-is, where-is, with all faults", so it could not state a cause of action against the seller for negligent representation or unjust enrichment. However, plaintiff did state a cause of action against the real estate agent for failure to disclose material facts pursuant to NRS 645.252.

HOA FORECLOSURE: This case is a certified question from the United States District Court. The Supreme Court held that even before October 1, 2015, when NRS 116.31168 was amended to specifically require notice to junior deeds of trust, that section required an HOA foreclosing on an assessment to provide such notice because it incorporated NRS 107.090's requirement to provide notices to all holders of subordinate interests, even when such persons or entities did not request notice.

HOA FORECLOSURE: The court held that the foreclosure of an HOA assessment lien wiped out a deed of trust that had been assigned to Nationstar where:
1. The NOD had not been sent to a previous assignee, but the NOS was sent to Nationstar. Since the NOD was recorded at the time of the assignment to Nationstar, it took with constructive notice of the NOD and was not able to show prejudice.
2. The HOA did not lose standing to foreclose when it entered into a "factoring agreement" by which the HOA's interest in past assessments was sold to a third party and where the agreement obligated the HOA to continue collection efforts on past-due assessments.

HOA FORECLOSURE: Former NRS 116.3116(8) (now 116.3116(12)), providing for attorney's fees to the prevailing party, applies only to an action by a homeowners' association to enforce its assessment lien, not a quiet title action brought by a third-party purchaser at the trustee's sale.

HOA FORECLOSURE: When the Federal Housing Finance Agency ("FHFA") placed Fannie Mae and Freddie Mac into conservatorships, 12 U.S.C 4617(j)(3) applies, which provides that mortgages it holds are not subject to "levy, attachment, garnishment, foreclosure or sale" without its consent. This is known as the "Federal Foreclosure Bar". The court held that 1) the Federal Foreclosure Bar preempts NRS 116.3116, so that an HOA foreclosure does not extinguish Fannie Mae's deed of trust without FHFA's consent, 2) Fannie Mae has standing to invoke the Federal Foreclosure Bar and 3) FHFA did not consent to the extinguishment of Fannie Mae's deed of trust.

TRUSTEE'S SALES: The time limitations to bring an action challenging a trustee's sale under NRS 107.080(5)-(6) (90 and 120 days, respectively, under the statute as applicable in this case; 30 and 90 days as subsequently amended) apply only to challenges to the procedural aspects of conducting the sale. Here, NRS 11.080, providing for a 5-year statute of limitations, applies because this is a quiet title action asserting that the deed of trust that was foreclosed had been wiped out by a previous HOA lien foreclosure and the trustee's sale was, therefore, void.

ASSESSMENT LIEN FORECLOSURES: The court held that after a foreclosure sale of an assessment lien under NRS Chapter 271, NRS 271.595(3) and (4) create a 60-day notice and redemption that must occur after the redemption period described in NRS 271.595(1).

HOA FORECLOSURE: A Homeowner's Association that properly records a notice of foreclosure does not need to re-start the foreclosure process each time the property changes ownership. A subsequent owner takes title subject to the pending foreclosure. Accordingly, the court held that defendant lender who foreclosed its deed of trust and became the owner by purchasing at its own foreclosure sale took with notice of the HOA's pending foreclosure.

HOA FORECLOSURE: The court held:
1. The Uniform Commercial Code's concept of commercial reasonableness for foreclosure sales has no applicability to homeowners association (HOA) foreclosures.
2. Inadequacy of price, however gross, is not in itself a sufficient ground for setting aside a trustee's sale absent additional proof of some element of fraud, unfairness or oppression that accounts for and brings about the inadequacy of price. The court specifically rejected the 20 percent standard for setting aside a foreclosure sale based on inadequacy of price, which is recognized by the Restatement (Third) of Property: Mortgages.
3. Where the inadequacy of price is great, a court may grant relief based on only slight evidence of fraud, unfairness or oppression, which plaintiff was unable to show in this case.
4. The following did not establish purported irregularities in the foreclosure process: a) inclusion in the HOA's lien of fines in addition to monthly assessments, b) listing in the notice of sale of the unpaid lien amount as of the day the notice was given, rather than as of the date of the sale as specified by NRS 116.311635(3)(a), and c) the person who signed the notice of sale was not personally "designated" to sign the notice, but was an employee of the entity that was so designated.
Note: the court pointed out that this appeal did not implicate the potential due process implications of NRS 116.31166's conclusive presumption provisions regarding required notices and other conduct of a trustee's sale.

TRUSTEE'S SALES: The court held that the 6-year statute of limitations set forth in NRS 11.190(1)(b) does not apply to a nonjudicial foreclosure under a deed of trust because statutes of limitations only apply to judicial actions.

HOA FORECLOSURE: The court held that 1) when a Homeowners Association rescinds a superpriority lien on a property, the HOA may subsequently assert a separate superpriority lien on the same property based on monthly assessments, and any maintenance and nuisance abatement charges, accruing after the rescission of the previous lien, and 2) an HOA lien survives bankruptcy even though the homeowner's personal obligation is discharged.

BANKRUPTCY AUTOMATIC STAY: The court held that the foreclosure of a homeowners association lien violated the automatic stay where the bankruptcy was filed in Texas and the foreclosed property is in Nevada, even though the HOA was not named as a creditor and did not know that the bankruptcy had been filed. The fact that a violation of the stay is only voidable in the 5th Circuit (it would be void in the 9th Circuit) was not relevant in this case because the HOA had not obtained an order in the bankruptcy action retroactively annulling the stay.

HOA FORECLOSURE: Answering a certified question from the U.S. District Court for the District of Nevada, the court held that the rule of SFR Investments Pool 1 v. U.S. Bank (2014), that foreclosures by homeowners associations under NRS 116.3116 extinguish first security interests, applies retroactively to all foreclosures conducted since NRS 116.3116's inception.

HOA FORECLOSURE: The court held that the provisions of NRS 116.3116, providing for 9 months of superpriority lien status for homeowners association liens, are not preempted by federal law when the first deed of trust is insured through the Federal Housing Administration (FHA). The court concluded that because the FHA insurance program specifically contemplates that lenders may be subject to superpriority liens, federal law is not in conflict with state law and the preemption doctrine does not apply.

ANTIDEFICIENCY: The court held that the one-action rule (NRS 40.430) must be timely interposed as an affirmative defense in a party's responsive pleadings or it is waived, and the nonwaiver provisions of NRS 40.495(5) do not preclude a party from waiving the rule by failing to assert it in his responsive pleadings. Because defendant failed to raise the one-action rule defense until prior to the commencement of the second trial (after a motion for a new trial was granted), the defense was waived.

HOA FORECLOSURE: When the Federal Housing Finance Agency ("FHFA") placed Fannie Mae and Freddie Mac into conservatorships, 12 U.S.C 4617(j)(3) applies, which provides that mortgages it holds are not subject to "levy, attachment, garnishment, foreclosure or sale" without its consent. This is known as the "Federal Foreclosure Bar". The court held that the servicer of a loan owned by Fannie Mae or Freddie Mac has standing to assert the Federal Foreclosure Bar in a quiet title action alleging that the nonjudicial foreclosure of a Homeowner's Association lien wiped out the mortgage securing the loan. The court did not address the merits of Nationstar's argument that the Federal Foreclosure Bar preempts NRS 116.3116, and stated that if the district court concludes on remand that the facts warrant a finding that Nationstar has standing to assert the Federal Foreclosure Bar, then it should determine whether the Federal Foreclosure Bar preempts NRS 116.3116.

MECHANICS LIENS: NRS 108.245(1) requires mechanics lien claimants to deliver a written notice of right to lien to the owner of the property after they first perform work or provide material to a project. However, the Supreme Court has previously held that the failure to serve the pre-lien notice does not invalidate a mechanics lien where the owner received actual notice of the work or material provided to the property and knows the claimants identity. Here the court held that the actual notice exception does not apply to offsite work and services performed by an architect for a prospective buyer of the property when no onsite work has been performed.

HOA FORECLOSURE: The court held that the previous version of NRS 116.3116, which provided for an "opt-in" notice scheme requiring a Homeowners Association to alert a mortgage lender that it intended to foreclose only if the lender had affirmatively requested notice, did not violate the lender's constitutional due process rights under the Fourteenth Amendment to the Federal Constitution, nor did it violate the Takings Clauses of the United States and Nevada Constitutions. Neither the HOA's nonjudicial foreclosure, nor the Nevada Legislature's enactment of the applicable statutes, constitutes "state action" that would implicate the constitutional provisions.

HOA FORECLOSURE: Former NRS 116.3116(6) provided that an HOA lien is extinguished unless "proceedings to enforce the lien are instituted within 3 years after the full amount of the assessments becomes due". The court held that "proceedings to enforce the lien" for purposes of the statute are instituted when the HOA provides the homeowner with notice of the delinquent assessment pursuant to NRS 116.31162(1)(a). Here, notice was provided within the 3 year time period, so the foreclosure of the HOA lien was not time barred.

MECHANICS LIENS: The court held that the 10-year statute of repose under NRS 11.2055(1)(b) for filing an action for construction defects begins to run from recordation of a notice of completion, not from the earlier time when it was signed and notarized. The court reached this conclusion by referring to NRS 108.226, which provides that a mechanics lien must be recorded within 40 days of recording of a valid notice of completion.

MECHANICS LIENS: The court held:
1. N.R.S. 108.2457(5)(e) precludes enforcement of an unconditional mechanics lien release when the check given in exchange for the release is not honored by the payor's bank.
2. An "equitable fault analysis", by which the district court reduced the lien claim by attributing 67% of fault to the lien claimant, may not be used to reduce the amount of a mechanics lien.

ANTIDEFICIENCY: The court held that in the context of a suit by an undersecured creditor on a commercial guaranty, a pre-foreclosure complaint for a deficiency satisfies NRS 40.455, which requires a foreclosing lender to make application for a deficiency judgment within 6 months after the date of the foreclosure sale, where the debtor waived NRS 40.430's one-action rule and where the complaint specifically sought only the allowable deficiency, and not the entire debt.

FORECLOSURE MEDIATION: The court held that a petition for judicial review following a mediation cannot be filed after 30 days from receiving the mediator's statement even when the petitioner discovers fraud months after the mediation.

ANTIDEFICIENCY: The court held that under the pre-2015 version of NRS 40.455(1):
1. As to a guarantor, a lender does not comply with the requirement for filing an application for a deficiency within 6 months after foreclosure where the complaint for a deficiency named only the borrower and was not amended to additionally name the guarantor until after the 6 month period had run. The amendment adding the guarantor did not relate back to the filing of the complaint.
2. The timely filing of a separate action against the guarantor does not constitute a valid application for a deficiency judgment against the unnamed guarantor.
3. NRS 40.455 was amended by SB453 (2015 Nev. Stat., ch. 518) to provide that a separate action against a guarantor does constitute a valid application for a deficiency judgment against the guarantor, but the amendment cannot be applied retroactively.

HOA LIENS: The court held that:
1. A superpriority lien for common expense assessments pursuant to former NRS 116.3116(2) does not include collection fees and foreclosure costs incurred by a homeowners' association. (NOTE: The court points out that this holding applies only to assessment liens arising before NRS 116.3116 was amended by 2015 Nev. Stat., Ch. 266, SB 306, which now provides that superpriority HOA liens include certain fees and costs.)
2. An HOA's covenants, conditions, and restrictions that purport to create a superpriority lien that includes certain fees and costs in additional to six months of assessments are superseded by former NRS 116.3116(2), so that the superpriority lien includes 9 months of assessments but no fees and costs.

ADVERSE POSSESSION: This case is mainly a civil procedure case that is not significant for title insurance issues, but the court makes one comment of interest at page 26: "Even assuming Gang is correct and Hunter's failure to plead the payment of property taxes is dispositive of his adverse possession claim and the related quiet title claim, that deficiency would not dispose of Hunter's claims for injunctive and declaratory relief based on the theories of an implied or prescriptive easement, irrevocable license, or an agreed boundary by acquiescence because the payment of taxes is not an element of those claims."

MECHANICS LIENS: The court reversed the district court's grant of a motion for summary judgment in favor of defendant, holding that there were triable issues of fact based on the following:
1. The State Contractors' Board's (the "Board") decision that defendant did not need an electrical license for the work performed is not entitled to preclusive effect.
2. Reliance on certain written Board opinions was improper because the opinions were very brief and specifically stated that they were limited to the facts and circumstances described in the opinions.
3. The Board's closing of Plaintiff's complaint after defendant completed the Board's recommended repair work did not resolve the issue of whether defendant properly completed the work.

HOA FORECLOSURE: The Supreme Court reversed the district court's order setting aside a trustee's deed following an HOA lien foreclosure sale, and remanded for further proceedings, holding that:
1) The provision in NRS 116.31166 that the recitals in a trustee's deed are conclusive pertains only to providing notices of default and sale, and not to claims that the sale is invalid on equitable grounds.
2) A trustee's sale may not be set aside solely on the basis that the sale was for a grossly inadequate price, unless there is also a showing of fraud, unfairness or oppression. Here, the price was not grossly inadequate because the sale price was apparently 23% of the fair market value, and while gross inadequacy cannot be precisely defined, it generally requires a showing that the sale price was less than 20% of fair market value.
3) The owner of the property, who was a lender who had previously foreclosed, was responsible for HOA dues attributable to the HOA's 9-month super-priority lien, plus amounts that became due after the acquisition of title by the lender. Here, whether the lender tendered the proper amount to the HOA prior to the sale involved disputed facts that cannot be resolved by summary judgment.
4) A trustee's sale cannot normally be set aside if the sale was to a bona fide purchaser, and whether the purchaser had knowledge of any impropriety in the sale process (which would defeat the purchaser's BFP status) involved disputed facts that cannot be resolved by summary judgment.

HOA FORECLOSURE: NRS 116.3116(4) (now 116.3116(8)) unambiguously gives "equal priority" to two or more HOA liens on the same property regardless of when the underlying assessment arose. When one equal priority lienholder forecloses, all other equal priority lienholders are extinguished. However, all equal priority lienholders share in the foreclosure sale proceeds in one of two ways: (1) all equal priority liens are paid in full whenever the proceeds are sufficient to do so; or (2) when the sale proceeds are inadequate to fully satisfy all the equal priority liens, all equal priority lienholders receive a pro-rata share of the proceeds.

DEFICIENCY JUDGMENTS: A deficiency judgment against guarantors is available pursuant to Nevada law where the property is located in Arizona, was foreclosed upon, and the guarantee contained a waiver of Nevada's antideficiency laws and a choice of law provision stating that the contract was governed by Nevada law. However, the court held in favor of the guarantors because plaintiff failed to apply for a deficiency within 6 months after the date of the foreclosure as required by N.R.S. 40.455(1).

MECHANICS LIENS: When a deed of trust that is senior to mechanics liens is subordinated to a construction deed of trust that is junior to mechanics liens (because it recorded after commencement of construction), the construction deed of trust is senior to the mechanics liens up to the amount of the subordinated deed of trust. This leaves mechanics lien claimants in exactly the position they would be in if the subordination had not occurred.

CONTRACTS: Mutual mistake does not provide a ground for rescission of a contract where one of the parties bears the risk of mistake. The court held that plaintiff bore the risk of mistake because it was aware that water and access rights were uncertain, but did not make inquiry into the availability of such rights and did not make its obligations under a contract to purchase real property contingent on confirming such rights. The court also held that a nuisance claim may be maintained where the only alleged damages are emotional distress and there is no physical harm.

FORECLOSURE: At the time debtor's bankruptcy petition was filed, Deutsche Bank held the promissory note, and the deed of trust was in the name of MERS, as nominee for Deutsche Bank. After the petition was filed, MERS assigned the deed of trust to Deutsche Bank and recorded the assignment. The Bankruptcy Court certified two questions to the Nevada Supreme Court:
1. What occurs when the promissory note and the deed of trust remain split at the time of foreclosure? The court held that reunification of the note and the deed of trust was not necessary to foreclose because the beneficiary was an agent for the principal note holder.
2. The court restated the second question as follows: Is the state law effect of the recordation of an assignment of a beneficial interest in a deed of trust by an agent of the note holder a ministerial act under Nevada law? The court held that the recordation of an assignment from a beneficiary of a deed of trust is a ministerial act, because the agent is fulfilling a contractual obligation and has no discretion to disobey. (The significance of this question is that recordation of the assignment did not violate the automatic stay if it was a ministerial act.)

DEFICIENCY JUDGMENTS: The District Court issued a judgment against guarantors for a deficiency without considering the limitations of NRS 40.459(1)(c), holding that the statute cannot be applied retroactively and that it would be an impermissible retroactive application in this case where the assignment of the loan occurred prior to June 10, 2011, the effective date of the statute. The Supreme Court subsequently held in Sandpointe Apartments, LLC v. Eighth Judicial District Court that NRS 40.459(1)(c) can only be applied prospectively, and that the application of the statute is prospective if there had been no foreclosure as of June 10, 2011. Therefore, the District Court's holding was in error because the foreclosure sale occurred August 29,  2011, after the statute took effect.. But in spite of the erroneous decision, the judgment cannot be set aside on equitable grounds under NRCP 60(b)(5) because that rule only allows an injunction to be set aside on equitable grounds, not a money judgment that is based on an interpretation of law that is incorrect under a subsequent Supreme Court decision.

JUDGMENT LIENS: Under NRS 360.473(2), a tax lien has the effect and priority of a judgment lien. The court held that the Department of Taxation, like a judgment creditor, is not protected by Nevada's recording statutes, so the tax lien is junior to a previous deed of trust even though the deed of trust was not recorded until after the tax lien recorded.

DEFICIENCY JUDGMENTS: NRS 40.459(1)(c) limits the amount an assignee of a deed of trust may recover on a deficiency judgment to the amount paid by the assignee to acquire the secured debt, less the secured property's actual value. The court held that NRS 40.459(1)(c) is preempted by the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) to the extent NRS 40.459(1)(c) limits deficiency judgments that may be obtained from loans transferred by the FDIC.

DEFICIENCY JUDGMENTS: NRS 40.455(1) permits a creditor or deed of trust beneficiary who is unable to fully recover its investment through foreclosure to bring an action for a deficiency judgment after "the foreclosure sale or the trustee's sale held pursuant to NRS 107.080, respectively." The court held that NRS 40.455(1) does not preclude a deficiency judgment when the beneficiary non-judicially forecloses on property in another state and the foreclosure is conducted pursuant to that state's laws instead of NRS 107.080.

TRUSTEE'S SALES: NRS 107.080(2)'s requirement of providing a new Notice of Sale is not triggered by a third oral postponement of the sale. It is triggered only for postponements that follow the third postponement.

DEFICIENCY JUDGMENTS: 1. A sale of property by a receiver is a form of judicial foreclosure, and thus, to the extent that proceeds from such a sale are deficient, a deficiency judgment is available pursuant to NRS 40.455.
2. NRS 40.455(1)'s six-month time frame for applying for a deficiency judgment runs from the time escrow closes for the sale in question.

DEFICIENCY JUDGMENTS: The court held that NRS 40.451 does not limit an assignee's recovery of a deficiency judgment based on the consideration paid by the assignee. The limitation in the last sentence of the code section speaks only to the final category of indebtedness, "all other amounts secured by the mortgage or other lien on the real property in favor of the person seeking the deficiency judgment," and limits the measure of that category to consideration extended by the lender to the borrower. It does not restrict an assignee's recovery of other amounts due under the note, even where the assignee paid less than the amount due to the assignor. (NOTE: The subject assignment occurred prior to the enactment of NRS 40.459(1)(c), which now limits the deficiency recoverable by an assignee to the amount by which the consideration paid for the assignment exceeds the fair market value of the property sold at the time of a foreclosure sale or the amount for which the property was actually sold, whichever is greater, with interest from the date of sale and reasonable costs.)

HOA FORECLOSURE: The court applied the "Voluntary Payment Doctrine" to deny recovery to the purchaser at a trustee's sale who had paid the entire amount of delinquent homeowners association dues, then sued to recover an alleged overpayment. The court refused to apply an exception to the doctrine where a payment is made under duress or in defense of property because the purchaser had alternatives to making the payment, such as arbitration or mediation before the Nevada Real Estate Department.

HOA FORECLOSURE: The court held that:
1. A Homeowner Association's super-priority lien for 9 months of HOA dues and nuisance abatement charges, provided by NRS 116.3116, is a true super-priority lien that is senior to a first deed of trust;
2. A properly conducted foreclosure of the HOA lien extinguishes a first deed of trust;
3. NRS 116.3116 renders the mortgage savings clause in the CC&R's invalid; and
4. The HOA lien can be foreclosed upon non-judicially.

MECHANICS LIENS: Responding to questions certified by the United States Bankruptcy Court, the Supreme Court held:
(1) Supreme Court's prior statement that "preparatory work on a site, such as clearing or grading, does not constitute commencement of construction" for purposes of lien priority was dictum;
(2) grading work can be an integral part of the entire structure or scheme of improvement, so as to establish commencement of construction, as long as it is visible from a reasonable inspection of the site; and
(3) contract dates and permit issuance dates are irrelevant to the visible-commencement-of-construction test set forth by NRS 108.22112, so mechanics lien claimants could claim lien priority based on work performed months before a building permit was issued or the general contractor was hired.

ASSIGNMENT OF LOAN: A loan assignment made in violation of a Pooling and Servicing Agreement (PSA) is not void, but merely voidable and may be ratified or rejected at the option of the parties to the PSA. Because the borrower is neither a party nor an intended beneficiary of the PSA, the borrower lacks standing to contest the assignment's validity. Accordingly, defendants properly produced the assignment at a mediation conducted pursuant to Nevada's Foreclosure Mediation Program.

MECHANICS LIENS:
1. Under NRS 108.222 a materialman has a lien upon a property and any improvements thereon for which he supplied materials. He does not need to prove that the materials he supplied were used or incorporated into the property or improvements.
2. A supplier's lien waivers were invalid where they were signed by a person who was not authorized to sign them and where the supplier did not know of or acquiesce to the signature by the unauthorized person.

DEFICIENCY JUDGMENTS:  Pursuant to NRS 40.453, a guarantor cannot waive the right to be mailed a notice of default required by NRS 107.095. However, NRS 107.095 requires only substantial, not strict, compliance, and substantial compliance exists where the guarantor had actual notice of the trustee's sale and was not prejudiced by the lack of statutory notice.

DEFICIENCY JUDGMENTS:  Where a guarantor waives the one-action rule, the lender may bring an action against the guarantor prior to completing the foreclosure, but the waiver does not terminate the procedural requirements for asserting a deficiency once the property was sold at foreclosure. Although the lender commenced an action on the guaranty first, once it foreclosed on the property and sought a deficiency judgment, it was required to satisfy NRS 40.455, which requires that an application for a deficiency judgment must be made within 6 months of the foreclosure sale. Since the lender failed to separately make such application, the guarantor was entitled to raise such failure as a defense.

EQUITABLE SUBROGATION: Nevada recognizes the doctrine of equitable subrogation, which permits a person who pays off an encumbrance to assume the same priority position as the holder of the previous encumbrance, so long as the payor 1) reasonably expected to receive a security interest in the real estate with the priority of the encumbrance being discharged and 2) subrogation would not materially prejudice the holders of intervening interests in the real estate. The payor is subrogated only to the extent that the funds are actually applied toward payment of the prior lien.

HOMESTEADS: The Bankruptcy Court certified a question of law to the Nevada Supreme Court: Can a debtor properly claim a homestead exemption for his interest in real property when the debtor himself does not reside on the property but his minor children do? The court held that the answer is no; the debtor must actually reside on the property in order to qualify for the exemption.

DEFICIENCY JUDGMENTS: NRS 40.459(1)(c), which limits the amount of a deficiency judgment after a trustee's sale to the amount paid for the note by an assignee, is a new statute that impacted vested rights. Accordingly, the statute cannot apply retroactively. Because the trustee's sale in this case occurred before the statute became effective, the limitations in the statute do not apply here.

FORECLOSURE MEDIATION: A district court order granting a petition for judicial review of a foreclosure mediation and remanding the matter for additional mediation is not final and, thus, not appealable.

FORECLOSURE MEDIATION: An appraisal older than 60 days, as required by the Foreclosure Mediation Program Rules, may nevertheless substantially comply with the rule sufficient to avoid the imposition of sanctions when there is no evidence that the appraisal is so old that it would impair the rule's policy of facilitating good-faith negotiations or the appraisal's content is inaccurate to the extent that the homeowner would be prejudiced.

STATUTE OF FRAUDS: The court held:
1. The Statute of Frauds does not apply to a writing that is subsequently lost or destroyed, and oral evidence is admissible to prove the existence and terms of that lost or destroyed writing.
2. Parol evidence is admissible to show that a written agreement was induced by fraud or modified by a subsequent agreement.
3. A liquidated damages clause requiring the breaching party to pay additional damages of 150% of actual damages is an unenforceable penalty.

FORECLOSURE MEDIATION: When a deed of trust to real property and the promissory note are held by two different entities and not reunified before mediation in the Foreclosure Mediation Program, the note holder's attendance at the mediation on its own behalf is insufficient to meet the statutory requirement that the deed of trust beneficiary attend and participate in good faith.

QUIET TITLE: Quiet title and unlawful detainer are both in rem actions (the court did not address whether either might be quasi in rem). Therefore the prior-exclusive-jurisdiction doctrine required the federal court, to which the later-filed quiet title action had been removed, to abstain in favor of the earlier-filed state court unlawful detainer action.

OPTION AGREEMENTS: Where an option agreement provided that "buyer shall have the option to purchase . . . for a sum of $8,000,000", seller was obligated to pay off a $1.3 million encumbrance. Additional language in the agreement stating that the buyer would pay "all costs of transfer and closing" did not mean that buyer was obligated to take title subject to the encumbrance.

FORECLOSURE MEDIATION: Because the district court's order granting judicial review denied appellant's request for a loan modification, appellant is an aggrieved party with standing to appeal. Nevertheless, there is no basis for reversing the judgment of the district court because the court properly concluded that respondent violated NRS 107.086 by failing to bring the proper documents to the Foreclosure Mediation, and the court exercised its sound discretion in denying a Foreclosure Mediation Program certificate and imposing monetary sanctions.

LENDER LICENSING: An arbitrator found that even though defendant engaged in mortgage banking activity in Nevada without first seeking a certificate of exemption, as required by NRS 645E.910, the loan was not void. The court upheld the award because it found that the arbitrator's decision was not a "manifest disregard of the law". The court pointed out that the issue before it on appeal was limited to whether the arbitrator manifestly disregarded existing Nevada law, not whether the common law in Nevada should be extended to determine that failure to comply with a licensing requirement necessarily renders a contract unenforceable.

MECHANIC'S LIENS: A "work of improvement" for constructing a shooting range did not include soundproofing that was installed after the range began operating and that was not contemplated as part of the original construction. Accordingly, a mechanic's lien recorded within 90 days of completion of the soundproofing, but more than 90 days after completion of the original construction, was not timely.

TRUSTEE'S SALES: A nonjudicial foreclosure sale may occur after a delinquent-tax certificate has issued and before the final disposition of the property, and the property's acquirer can then pay the delinquent taxes and other amounts due to redeem, or obtain reconveyance of, the property from the county treasurer.

FORECLOSURE MEDIATION: The requirement that a lender bring all assignments of the note or mortgage was satisfied where the lender failed to bring one of the assignments, but the borrower brought a copy of the assignment. The requirement that the copy be certified was satisfied because it was obtained from the Recorder's office and had been notarized.

EQUITABLE SUBROGATION: 1. NRS Section 108.225 gives mechanics lien claimants priority over all other liens that attach after commencement of a work of improvement, so that a lender who made a loan after commencement of construction is not entitled to equitable subrogation as to proceeds that paid off a loan that was made prior to commencement of construction.
2. Prospective waivers of mechanics liens are unenforceable.

TRUSTEE'S SALES / FORECLOSURE MEDIATION: The court held that when MERS is the named beneficiary and a different entity holds the promissory note, the note and the deed of trust are split, making nonjudicial foreclosure by either improper. However, any split is cured when the promissory note and deed of trust are reunified. Because the foreclosing bank in this case became both the holder of the promissory note and the beneficiary of the deed of trust, the court concluded that it had standing to proceed through the Foreclosure Mediation Program, and to thereafter foreclose on the subject property. [Ed. Note: The case contains a good explanation of the "traditional rule", under which the deed of trust follows the note so that splitting the note and deed of trust is impossible, and the Restatement approach (adopted by the court), under which a transfer of the deed of trust transfers the obligation unless the parties agree otherwise.]

HOMEOWNERS ASSOCIATIONS: The Department of Business and Industry, Financial Institutions Division, issued an advisory opinion stating that the superpriority status of homeowners association liens under NRS 116.3116 is limited to the total of nine (9) months of assessments, and that this cap includes any additional fees, charges, interest, costs, penalties or fines which the association could apply towards a lien. The Department additionally found that prior to the imposition of any additional charges by a collection agency, the association must expressly approve the charges pursuant to the provisions in its governing documents. The Supreme Court affirmed the district court's order granting defendants' request for injunctive relief, holding that only the Real Estate Division and the Commission for Common Interest Communities and Condominium Hotels (CCICCH) have the authority to interpret provisions of NRS Chapter 116.

FORECLOSURE MEDIATION: A short sale agreement entered into by the borrower and lender as a result of mediation under Nevada’s Foreclosure Mediation Program is an enforceable contract. Accordingly, the district court properly refused to impose sanctions against the lender after it violated NRS 107.086 by failing to provide assignments of the deed of trust at the mediation.

TRUSTEE'S SALES: A lender who has been denied a Foreclosure Mediation Program (FMP) certificate for failing to mediate in good faith can reinitiate foreclosure by means of a new notice of default and election to sell and rescission of the original, thereby restarting the FMP process.

DEFICIENCY JUDGMENTS: A lender foreclosed on a deed of trust, then sought a deficiency judgment against a guarantor. The court held:
1. A cross-complaint, which included a cause of action to recover a deficiency, filed by the lender in a declaratory relief action brought by the guarantor, constituted an "application" under NRS 40.455(1). Since the cross-complaint was filed within 6 months of the foreclosure, it satisfied the statutory requirement that an application for a deficiency be made within 6 months after the foreclosure.
2. The lender did not seek a prohibited double recovery by obtaining the property and also seeking a deficiency judgment because the district court intended to reduce the deficiency judgment by the fair market value of the property.

TRUSTEE'S SALES: After the District Court found that the lender had acted in bad faith in connection with the Foreclosure Mediation Program, the lender filed a second Notice of Default. Plaintiff filed a Petition for a Writ of Prohibition to prevent a second mediation from proceeding. The court denied the Writ of Prohibition, holding that plaintiff had an adequate remedy at law, which is that plaintiff can file a petition for review with the district court after the second mediation is conducted.

INSURANCE: While an insurance company is free to contract its way around the general rule regarding an insurer's duty to defend its policyholder, the policy provision in this case was ambiguous with regard to whether it could terminate its duty to defend by depositing the policy's liability limits with the district court. The policy provided that the duty to settle or defend ends when the limit of liability has been exhausted, but that sentence was only part of a policy provision regarding the duty to defend, and it was not clear that depositing policy limits in court was one of the methods by which the limit of liability can be "exhausted".

TRUSTEE'S SALES: The court held that Nevada's Foreclosure Mediation Law applies to a homeowner even if he is not the named mortgagor and did not assume the obligation secured by the mortgage. One of the requirements of the mediation is that the lender bring the original or a certified copy of the assignment of the deed of trust or note. The court also held that strict compliance, not merely substantial compliance, is required. The lender failed to comply and was subject to sanctions (which can include imposition of a loan modification) because it failed to produce either an assignment of the note and deed of trust or a note containing an endorsement. [Ed. note: The case contains a good explanation of negotiable instruments law.]

TRUSTEE'S SALES: Nevada's Foreclosure Mediation Law requires that when a borrower requests mediation, the lender must (1) attend the mediation; (2) mediate in good faith; (3) provide the required documents (original or certified copy of the deed of trust, promissory note, each assignment of the note and an appraisal); and (4) attend the mediation, or if attending through a representative, have a person present with authority to modify the loan or access to such a person. A lender who fails to comply is subject to sanctions (which can include imposition of a loan modification). Here, the lender failed to comply, and was subject to sanctions, because it did not provide all pages of the promissory note, the assignment it provided was defective because the name of the assignee was left blank and someone with authority to modify the note was not available.

MECHANIC'S LIENS:
1. Under NRS 108.22112, "commencement of construction" requires that work performed be visible on the ground, including preconstruction services, in order to establish priority.
2. The 2003 amendments to NRS Chapter 108 did not affect the long-standing requirement that work must be visible on the property for a mechanic's lien to take priority over a deed of trust recorded before commencement of construction.
3. The statutory visibility requirement is not waived by a lender who has actual knowledge of off-site preconstruction services.
4. The preparatory placement of signs advertising an architect's work on the project and removal of power lines does not constitute visible work.
5. "Commencement of construction" does not include architectural, soil testing and survey work, nor does it include preparatory work on a site, such as clearing and grading.
6. The court explains what the "Ê" symbol means when used in the Nevada Revised Statutes pursuant to NRS Section 0.025.

MECHANIC'S LIENS: A judgment is not final for purposes of appeal where the trial court determines a mechanic's lien's validity and enters judgment on the lienable amount, but fails to direct the subject property's sale.

MECHANIC'S LIENS: The court held that NRS 108.2453 does not abrogate Nevada's substantial compliance doctrine. Substantial compliance, however, requires notice to be given to the party whose interest the lien claimant is seeking to affect. Notice to one owner is not sufficient to affect the interest of other owners. The court further concluded that the actual knowledge exception requires the owner to have actual knowledge of the identity of the lien claimant (not just the fact that work was being done, but the identity of the person doing the work). Since knowledge of the owner was a question of fact, the court reversed the district court's grant of summary judgment

EQUITABLE SUBROGATION: Equitable subrogation is allowed as long as the intervening lien holder is not prejudiced, and as long as the mortgagee reasonably expected to get security with a priority equal to the mortgage that was paid. The fact that the new loan has a higher loan balance and interest rate does not prejudice the intervening lien holder because equitable subrogation is allowed only to the extent of the payoff of the original note and only to the extent of the debt balance that would have existed if the interest rate had been unchanged. However, the court denied equitable subrogation because the much shorter maturity date of plaintiff's loan did have a prejudicial effect on junior lienholders and plaintiff failed to demonstrate how the court could equitably bifurcate the new note to apply both the maturity date of the original note and the maturity date of plaintiff's note. [Ed. note: The court was also perturbed by the plaintiff's inequitable conduct in inflating the value of the subrogated loan. Would a future plaintiff in this situation prevail if it is reasonable in asserting the amount of the subrogated loan and if it sets forth a plan to be subrogated only to the extent of the original loan, including the original due date?]

MECHANIC'S LIENS: The district court did not err in expunging the lien because it applied the correct standard of proof and substantial evidence supported its decision. The court made the following points:
1. When a property owner seeks to remove a lien by arguing it is frivolous or excessive, the court must determine the material facts in order to reach a conclusion regarding whether a lien is frivolous or excessive.
2. In making these factual determinations, the court is not required to hold a full evidentiary hearing, but instead may base its decision on affidavits and documentary evidence submitted by the parties.
3. This procedure meets due process requirements. However, pursuant to the time frame mandated by NRS 108.2275(3), if the court determines that a hearing is necessary, it must be held within 15 to 30 days of the court’s order for a hearing. And while any hearing must be initiated within that time frame, the statute does not require the court to resolve the matter within that time frame.
4. In evaluating whether a lien is excessive, the court must use a preponderance-of-the-evidence standard, rather than the reasonable-cause standard used for frivolous liens, and the burden is on the lien claimant to prove the lien and the amount claimed.

EASEMENTS: The Court adopts Section 4.8 of the Restatement (Third) of Property, which provides that the owner of a servient estate can make reasonable changes in the location of an easement, except where the location of the easement is specified in the instrument creating the easement or where the instrument specifically prohibits relocation. Here, the Court refused to allow the owner of the servient estate to relocate the easement because its location was specified by a metes and bounds description.

MECHANIC'S LIENS:
1. Not every lien waiver provision violates public policy. The enforceability of each lien waiver clause must be resolved on a case-by-case basis by considering whether the form of the lien waiver clause violates Nevada’s public policy to secure payment for contractors. NOTE: Subsequent to the events described in this case, the Nevada legislature amended NRS Chapter 108 to prohibit lien waivers unless such waivers comply with the statutory requirements and specific forms set forth in NRS 108.2453 and NRS 108.2457.
2. "Pay-if-paid" provisions (i.e. the right to payment is contingent upon the obligor being paid) are unenforceable because they violate public policy. NOTE: Subsequent to the events described in this case, the Nevada legislature enacted NRS 624.624 and 624.626, which make pay-if-paid provisions unenforceable.
3. Change orders become part of the original contract and are therefore lienable.

PARTITION / JUDICIAL SALES: Judicial sales to bona fide purchasers generally are not subject to later challenge if an underlying judgment is reversed on appeal. Although as a general matter judicial sales to bona fide purchasers will survive appellate reversals, these sales may be challenged collaterally or in remanded proceedings in the original action if the order of sale was void. Here the court order for a sale in a partition action was void because the court did not have jurisdiction after it wrongly denied a motion to dismiss under NRCP 41(e) for failure to bring the action to trial within 5 years.

WATER RIGHTS: Water rights are freely alienable, but the transferee can only use the water in accordance with NRS 533.040.
RECORDING: The case explains the procedure for searching the grantor/grantee indices: The prospective purchaser first searches the grantee index for the purported owner's name to ascertain when and from whom the purported owner received the property. Using that name, the purchaser checks the grantee index for the names of each previous owner, thus establishing the "chain of title." The purchaser must then search the grantor index, starting with the first owner in the chain of title, to see whether he or she transferred or encumbered the property during the time between his or her acquisition of the property and its transfer to the next person in the chain of title.

FORECLOSURE: This case is not of much interest to people in the title industry. But it is interesting because it shows the kind of liability a lender incurs when it forecloses on a condominium unit and mistakenly enters the wrong unit, disposes of the owners' personal property, then purportedly re-sells the unit.

JUDGMENTS:  After Nevada’s 6-year limitation period for the enforcement of judgments expired on the original domestication of the foreign judgment, the judgment was renewed in the issuing state, which has a 10-year limitation period for renewing judgments, and could again be domesticated in Nevada.

EASEMENTS: Plaintiff could not establish an easement over defendant's property under any of the 3 theories he raised:
1. Deeds in the chain of title granted the City a road easement, but did not grant easements to the property owners.
2. An easement by necessity requires (1) prior common ownership of the land to be benefitted and the land to be burdened and (2) the easement is "reasonably necessary" to use the land. However, "reasonable necessity" requires something significantly greater than inconvenience, which must exist both at the time of the severance of the parcels and present necessity. Here plaintiff has no present necessity because he has access to two other public roads from his property.
3. Plaintiff does not have private easement rights in the abandoned road because an abandoned public easement reverts to abutting property owners in the approximate proportion that the easement was dedicated by the abutting owners or their predecessors.

CONTRACTS:
1. When a contract does not make the time for a party's performance of the essence, either party can make it so by setting a reasonable time for performance and notifying the other party of an intention to abandon the contract if it is not performed within that time.
2. Absent such a demand for performance, or a term making time of the essence, a contract must be performed within a reasonable time. What constitutes a reasonable time for a contract's performance is a question of fact to be determined based on the nature of the contract and the circumstances surrounding its making.
3. When a contract contains a condition precedent to a party's performance, that party may waive the condition and tender performance so long as the parties included the condition in the contract for the sole benefit of the party seeking to waive the condition. Whether a condition included in a contract is for the benefit of one or both parties is a question of fact.

NOTARIES / RECORDING:
1. Claims for notary misconduct or negligence brought under NRS 240.150(1) and NRS 240.150(2) are claims upon a liability created by statute, other than a penalty or forfeiture, and are subject to a three-year statute of limitations under NRS 11.190(3)(a).
2. A recorded but improperly acknowledged instrument may provide constructive notice only if honoring the instrument would not improperly benefit the notary or any party to the instrument and would not create harm.
3. A court may consider the individual factual circumstances surrounding a defective acknowledgment, thereby permitting it to waive certain technical notarial violations while protecting against actual harm that may flow from honoring an improperly acknowledged document.

QUIET TITLE: 1) An easement was not extinguished by prescription where the dominant tenement owners gained access to the easement area on a regular basis by climbing over and walking around fences erected on the easement area by the owner of the servient tenement; 2) The original grantor's reservation of the right to promulgate reasonable regulations for use of the easement ran with the land and passed to successive owners of the servient tenement; 3) The District Court did not have a similar right to promulgate regulations for use of the easement; 4) Attorney's fees are only available as special damages in slander of title actions and not simply when a litigant seeks to remove a cloud upon title.

CC&R's: The original developer of a recreational vehicle park had authority, consistent with NRS 116.003, to define "declarant" in the CC&R's differently than the definition set forth in NRS 116.035. Therefore the successor in interest to the original developer is a "declarant" as set forth by the CC&R's and also owns land within the community, and had to approve any material amendment.

JUDGMENTS: Judgment renewal under NRS 17.214 requires 1) the timely filing of an affidavit, 2) timely recording of the affidavit (if the judgment to be renewed was recorded), and 3) timely service of the affidavit. These requirements must be complied with strictly or the renewal is invalid.

DISCLOSURE: Under NRS 113.140(1), a seller of residential property has a duty to disclose only those conditions that materially and adversely affect the value or use of the property, and of which the seller is aware. Because repaired water damage does not constitute a defect under NRS Chapter 113 and Nelson did not know of the presence of elevated amounts of mold in the cabin, she did not violate the disclosure requirements contained in NRS 113.130 when she completed the Seller's Real Property Disclosure Form.

HOMESTEADS / JUDGMENTS: An abstract judgment lien under NRS 17.150 cannot attach to homestead property that is fully exempt, both at the time the judgment is recorded and at the time the property is sold. The Court in footnote 13 states that it does not address the situation where a debtor’s home is fully exempt at the time the lien is recorded, but the debtor subsequently gains surplus equity in his home prior to or during the sale or transfer. The Court points out that one could argue that the abstract judgment lien attaches to the surplus equity when and if it exists, and that at such time the creditor could execute against the surplus equity, but that was not the question certified to the court, so it declined to address the issue.

RECORDING: The Court denied a petition for a writ of mandamus challenging a district court order expunging a lis pendens. The Court held that the recording numbers of two deeds of trust controlled priority where they were recorded at exactly the same time. Court also points out that the higher numbered TD reflected the possibility of being junior to another TD because it contained a recital requiring the borrower to meet his obligations "under any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust".

NOTE: I reviewed the actual recorded TD's. TD #4670 secured a $380,000 loan and is on a Fannie Mae/Freddie Mac form used for first TD's. TD #4671 secured a $95,000 loan and is on a form used for junior TD's and, in fact, states at the bottom of the first page: "Nevada - Second Mortgage - 1/80 - FNMA/FHLMC Uniform Instrument Form 3829". [Emphasis added.] It is not clear to me that the Court would rely on order of the recording numbers if the $95,000 TD had been recorded first.

It seems possible that the Court would do like California does and seek to determine the intention of the parties. However, it may not go as far as California courts in holding that the mere fact of simultaneous recording imposes a duty of inquiry into the intention of the parties regardless of the recording numbers assigned to the documents.

DEEDS OF TRUST / MECHANICS' LIENS: A lender did not comply with the statutory scheme of NRS 106.300 to 106.400 regarding future advances. However, the Court held that statutory scheme to be an optional safe-harbor that applies only if the parties opt-in. Since the parties did not do so, the Court applied common law principles in holding that obligatory advances are entitled to the same priority as the deed of trust, which was senior to mechanics' liens on a work of improvement commenced after recordation of the deed of trust.

TRUSTEE'S SALES / ANTI-DEFICIENCY: Where a bankruptcy court sets aside, as a preference, a deed of trust securing a guaranty, two exceptions to Nevada's anti-deficiency rules apply: 1) NRS Section 40.430(4)(i) (bankruptcy stay of foreclosure) and 2) NRS Section 40.430(4)(j) (sold-out junior lienholder). Guarantor's waiver of notice under NRS Section 107.095(1) constitutes a waiver under 40.430(4)(i) of the notice required by that section.

CONTRACTS: After entering into a contract to sell real property, the seller told the buyer he was terminating the sale, but would sell for a higher price. The buyer agreed and signed a contract for the higher price. Subsequently the buyer sued to enforce the original contract. The Court held that the second contract was invalid, and the buyer could enforce the original contract, under the "preexisting duty rule". No consideration supported the second contract where the seller promised to do what he was already obligated to do.

DEEDS: A deed that described more property than the seller intended may be reformed to describe the correct property where the seller made a unilateral mistake, and the buyer knew about it but failed to bring it to the seller's attention.

ONE ACTION RULE: Under the one action rule of NRS 40.430, a creditor forfeited the real estate collateral under a deed of trust where he first obtained an out-of-state judgment on the debt.

EQUITABLE SUBROGATION: Equitable subrogation is allowed even with actual knowledge of the intervening lien, as long as the intervening lien holder is not prejudiced, and as long as the mortgagee reasonably expected to get security with a priority equal to the mortgage that was paid. Furthermore, a refinancing mortgagee should be found to lack such an expectation only where there is affirmative proof that the mortgagee intended to subordinate its mortgage to the intervening interest.

MECHANICS' LIENS: The right to a mechanics' liens can be waived in a construction contract. HOWEVER, NRS 108.2453, prohibits such waiver after October 1, 2003, except under certain circumstances.

HOMESTEADS: The homestead exemption is inapplicable when the proceeds used to purchase real property can be traced directly to funds obtained through fraud or similar tortious conduct.

RECORDING: The district court found that an access road depicted on a record of survey did not create an easement because the record of survey did not meet the statutory requirements for a parcel or subdivision map, as required to create an easement. The Supreme Court held that the County Recorder is not liable for recording the defective map because it has not duty to determine whether a document serves its intended purpose, given that recording is a purely ministerial task.

JUDGMENTS: Under NRS 17.150(2), a judgment lien expires after six years from the date the judgment was docketed if the judgment is not renewed within such time frame. The judgment, itself, was renewed subsequent to the six-year period, but the court does not explain why that was allowed.

RAILROADS: Upon abandonment by the railroad of a right-of-way granted by Congress before 1871, the right-of way reverts to the underlying landowner, not to the adjacent landowner (unless the right-of-way runs through a municipality, in which case it reverts to the municipality). Note that before 1871, the right-of-way that railroads received was a limited fee with the right of reverter, but after 1871 it was an exclusive-use easement because in 1871 Congress discontinued conveying the land outright.

MECHANICS' LIENS: Employees may file mechanics' liens for their wages, but only where their services improve the property.

Court's Note: The opinion in this matter was amended by an order filed on September 24, 2003.

TITLE INSURANCE: A title company is not the insured's agent, so it's knowledge of an encumbrance is not imputed to the insured. The court does not explain why recordation of the encumbrance did not, itself, impart constructive notice to the insured. (This case follows the California case of Rice v. Taylor (1934) 220 Cal. 629.)

MECHANIC'S LIENS: A mechanic's lien cannot include amounts claimed for delay damages. NRS 108.222(1) limits the amount of mechanic's liens to the contract price for, or in the absence of a contract the value of, labor performed or material furnished or rented.

MECHANIC'S LIENS: The beneficiary of a deed of trust is not a necessary party to a mechanic's lien enforcement action. Only the owner of the property is a necessary party. However, a beneficiary of a deed of trust may bring a subsequent action to determine priority and contest matters that were at issue in the foreclosure action.

ESCROW:
1. Double Escrow Case. The Court adopted the holding in Burkons v. Ticor Title Ins. Co. of California, 813 P.2d 710 (Ariz. 1991). Although not required to investigate, when an escrow agent is aware of facts and circumstances that a reasonable escrow agent would perceive as evidence of fraud by one of the parties to the escrow, then there is a duty to disclose to the other party.

2. An escrow agent owes a duty to disclose fraud only to parties to the escrow, not to third parties.

3. An escrow agent does not have a duty to a third party for disbursing disputed funds to the parties to the escrow in accordance with the escrow instructions.

HOMESTEADS: A conveyance of homestead property by one party to a declaration of homestead is void. The court also makes the somewhat confusing comment that: "To the extent that the homestead property here did not exceed the statutory value stated in NRS 115.010, [the plaintiff] is entitled to prevail on her quiet title action." (Emphasis added.)

LEASES: The Nevada Constitution prohibits the state from contracting for “public debts”, which are debts that bind future legislatures to successive appropriations. However, a lease-purchase agreement is valid where the lease 1) contains a nonappropriation clause, 2) limits recourse to the leased property and 3) does not create a long-term obligation binding on future legislatures.

DEEDS OF TRUST/MORTGAGES: NRS 106.240, which provides that mortgages and deeds of trust secured by real property are extinguished 10 years after the due date, applies to all such debts, and is not limited to protecting BFP's. However, it is a question of fact in this case as to whether the owner is estopped (based on certain representations) from raising the statute.

MECHANIC'S LIENS: Preparatory work which was performed by a civil engineering firm, including engineering studies, surveys, creation of parcel maps and drawings, and the placement of temporary stakes, did not rise to the level of "work done" of a kind that would permit a mechanic's lien to attach.