Ocwen Loan Serv., Llc v. Chersus Holdings, Llc

IN THE SUPREME COURT OF THE STATE OF NEVADA
OCWEN LOAN SERVICING, LLC, A No. 82680
FOREIGN LIMITED LIABILITY
COMPANY,
Appellant,
vs. FILED
CHERSUS HOLDINGS, LLC, A
DOMESTIC LIMITED LIABILITY SEP 1 5 2022
COMPANY, ELIZAB TH A. BROWN
OF PREME cougr
Respondent.
CLERK
ORDER AFFIRMING IN PART,
REVERSING IN PART, AND REMANDING
This is an appeal from a district court final judgment in an
action to quiet title. Eighth Judicial District Court, Clark County; Nadia
Krall, Judge.'
In 2011, Southern Terrace Homeowners Association (the HOA)
held a foreclosure sale after the former homeowners failed to pay their HOA
dues. Respondent's predecessor, First 100, LLC (First 100), placed the
winning bid at the sale for $3,500. Then in 2013, the first deed of trust
beneficiary purported to foreclose on the first deed of trust. Appellant
placed the winning bid at that sale and subsequently took possession of the
property.
'Pursuant to NRAP 34(0(4 we have determined that oral argument
is not warranted,
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In the underlying action, appellant and respondent asserted
competing quiet title claims. Respondent further asserted counterclaims
against appellant, which revolved around appellant having ousted
respondent from the property.
In May 2019, the district court granted summary judgment for
respondent on the competing quiet title claims. In doing so, it rejected
appellant's argument that a "Factoring Agreement" between First 100 and
the HOA depressed bidding so as to amount to fraud, unfairness, or
oppression sufficient to justify setting aside the sale. Cf. U.S. Bank, Nat'l
Ass'n ND v. Res. Grp., LLC, 135 Nev. 199, 205-06, 444 P.3d 442, 448 (2019)
(reaffirming that a court may set aside a foreclosure sale if the sale is
affected by "fraud, unfairness, or oppression" and that "where the
inadequacy [of the winning bid] is palpable and great, very slight evidence
of unfairness or irregularity is sufficient to authorize" setting aside the sale
(internal quotation marks omitted)). In particular, the district court
identified four issues that appellant raised with respect to the Factoring
Agreement, and it concluded that none of those issues amounted to fraud,
unfairness, or oppression by relying on deposition testimony from the HOA
foreclosure agent's NRCP 30(b)(6) witness that explained how the Factoring
Agreement did not lead to depressed bidding in this case.
The district court also granted summary judgment for
respondent on its counterclaims for (1) wrongful foreclosure, (2)
trespass/conversion, and (3) unjust enrichment. Thereafter, the district
court held a prove-up hearing to establish the damages to which respondent
was entitled for its counterclaims. Following the hearing, the district court
entered an order in March 2021 awarding respondent roughly $77,000 in
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damages for its counterclaims, which represented the amount of rental
income respondent lost while appellant was in possession of the subject
property. The district court also appears to have awarded respondent
$3,417 in costs.2
Appellant first challenges the district court's finding that there
was no fraud, unfairness, or oppression affecting the sale. It argues that
the terms of the Factoring Agreement are themselves the evidence of fraud,
unfairness, or oppression, and that the NRCP 30(b)(6) witness's testimony
should have been disregarded because it was self-serving. Based on the
arguments presented to the district court, however, we are not persuaded
that the district court erred in finding that there was no evidence of fraud,
unfairness, or oppression in this case.3 See Wood v. Safeway, Inc., 121 Nev.
724, 729, 121 P.3d 1026, 1029 (2005) (reviewing de novo a district court's
decision to grant summary judgment); Old Aztec Mine, Inc. v. Brown, 97
'The district court's order is unclear in this respect. The 11 identified
cost components add up to $3,417, and the district court appears to have
awarded all of the cost components, even though the order ultimately
purports to award only $1,364 in costs.
3We likewise perceive no error in the district court's conclusion that
because there was no evidence of fraud, unfairness, or oppression, it was
unnecessary to evaluate whether the sales price was grossly inadequate or
whether First 100/respondent were bona fide purchasers. To the extent that
appellant contends this case is identical to U.S. Bank National Ass'n v. The
Gifford W. Cochran Revocable Living Trust, No. 77642, 2020 WL 2521786(Nev. May 15, 2020) (Order Vacating Judgment and Remanding), we are
not persuaded, as this case contains different evidence. Similarly, Lahrs
Family Trust v. JP Morgan Chase Bank, N.A., No. 74059, 2019 WL 4054161(Nev. Aug. 27, 2019) (Order of Affirmance), is distinguishable because the
winning bid in that case was only $100, id. at *1.
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Nev. 49, 52, 623 P.2d 981, 983 (1981) (recognizing that this court need not
consider arguments raised for the first time on appeal). Accordingly, we
affirm the district court's summary judgment insofar as it adjudicated the
parties' quiet title claims and determined that the HOA's foreclosure sale
extinguished the first deed of trust.4
Appellant next contends that the district court erred in
awarding respondent damages for its counterclaims. Appellant contends
alternatively that (1) respondent did not introduce evidence to support its
unjust enrichment counterclaim,5 or (2) the district court abused its
discretion in relying on the testimony of an untimely disclosed witness as
the basis for its calculation of damages.
We are not persuaded by either argument. With respect to its
first argument, appellant contends that respondent failed to introduce
evidence that respondent "confer[red] a benefit" on appellant. Cf. Certified
Fire Prot. Inc. v. Precision Constr. Inc., 128 Nev. 371, 381, 283 P.3d 250, 257
"Appellant argued alternatively in district court that even if the
HOA's foreclosure sale was not set aside, the sale did not extinguish the
deed of trust. However, appellant does not pursue that argument on appeal,
so we need not address that issue. See Powell v. Liberty Mut. Fire Ins. Co.,
127 Nev. 156, 161 n.3, 252 P.3d 668, 672 n.3 (2011) (recognizing that this
court does not address issues that are not raised in an opening brief).
5Appellant also contends that respondent failed to introduce evidence
to support its wrongful foreclosure and trespass/conversion counterclaims,
but the district court did not award any damages with respect to those
counterclaims beyond the roughly $77,000 in lost rental income that it
awarded for the unjust enrichment counterclaim. Given our below analysis
of the unjust enrichment counterclaim, we need not address appellant's
arguments regarding these other two counterclaims.
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(2012) ("Unjust enrichment exists when the plaintiff confers a benefit on the
defendant, the defendant appreciates such benefit, and there is acceptance
and retention by the defendant of such benefit under circumstances such
that it would be inequitable for hirn to retain the benefit without payment
of the value thereof." (emphasis added) (internal quotation marks omitted)).
In this, appellant appears to contend that because appellant did not rent
out the property while it was in appellant's possession, respondent should
not have been entitled to the rental income respondent would have earned
if the property had rernained in respondent's possession. We disagree, as
the "benefit" that respondent "conferred" upon appellant was the ability to
use the property as a source of income. Cf. Leasepartners Corp. v. Robert L.
Brooks Tr. Dated Nov. 12, 1975, 113 Nev. 747, 756, 942 P.2d 182, 187 (1997)
("The doctrine of unjust enrichment or recovery in quasi contract applies to
situations where there is no legal contract but where the person sought to
be charged is in possession of money or property which in good conscience
and justice he should not retain but should deliver to another [or should pay
for]." (alteration in original)). Appellant cannot "in good conscience" avoid
liability to respondent by preventing respondent from renting out the
property and then deciding not to use the property in the way respondent
would have used it.6 Accordingly, we agree with the district court that
6Appellant does not dispute that respondent would have rented out
the property if respondent retained possession of it. Had there been such a
dispute, our analysis of this issue may have been different. Relatedly,
although there appears to be confusion as to whether appellant, respondent,
a tenant, or a squatter "possessed" the property during the relevant time
frame, appellant has not coherently argued on appeal that this issue
warrants reversal of the damages award.
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respondent introduced evidence to support its unjust enrichment
counterclaim.
With respect to appellant's second argument, appellant
contends that the district court abused its discretion in relying on the
testimony of respondent's expert witness when respondent failed to comply
with NRCP 16.1(a)'s disclosure requirements:7 See Otis Elevator Co. u.
Reid, 101 Nev. 515, 523, 706 P.2d 1378, 1383 (1985) (recognizing that
district courts have discretion to admit the testimony of an untimely
disclosed witness). We disagree. Although appellant did not disclose its
expert witness until October 2019, which was after the close of discovery,
the prove-up hearing was not held until March 2021. Appellant again
objected to the untimely disclosure at that hearing, which the district court
overruled. We conclude that the necessary implication behind the district
court's decision is that the untimely disclosure was harmless, given that
respondent had roughly a year and a half to investigate or challenge the
expert witness's opinions and report. See NRCP 37(c)(1). Accordingly, we
affirm the district court's March 2021 award insofar as it awarded
respondent damages.
Appellant finally contends that the district court erred in
awarding respondent its costs. Appellant contends alternatively that (1)
respondent failed to timely file a memorandum of costs, or (2) respondent
failed to provide sufficient documentation supporting its request for costs
7Appellant also contends that the district court abused its discretion
by finding the witness was qualified to provide expert testimony. However,
appellant did not raise this argument below. We therefore decline to
address it. Old Aztec Mine, 97 Nev. at 52, 623 P.2d at 983.
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with respect to five deposition transcripts. With respect to appellant's first
argument, respondent filed its memorandum of costs five months after the
district court's May 2019 summary judgment order, which is well beyond
the allotted time frame. See NRS 18.110(1) ("The party in whose favor
judgment is rendered, and who claims costs, must file with the clerk, and
serve a copy upon the adverse party, within 5 days after entry of judgment,
or such further time as the court or judge may grant, a memorandum of the
items of the costs in the action or proceeding . . . ."). At the March 4, 2021,
prove-up hearing, however, respondent's counsel cited Barbara Ann Hollier
Trust v. Shack, 131 Nev. 582, 591, 589, 356 P.3d 1085, 1089 (2015), as
support for the proposition that appellant's motion to reconsider the May
2019 summary judgment order tolled NRS 18.110's five-day time frame.
While Shack involved the tolling of NRCP 54(d)(2)(B) (as opposed to NRS
18.110(1)) and involved tolling of a final judgment (which is not the case
here), we nevertheless conclude that Shack provided sufficient justification
for the district court to grant respondent "further time" to file its
memorandum of costs. NRS 11.1180(1); see Valladares v. DMJ, Inc., 110
Nev. 1291, 1293, 885 P.2d 580, 582 (1994) (reviewing for an abuse of
discretion a district court's decision to grant or deny a time extension under
NRS 18.110(1)).
With respect to appellant's second argument, appellant
contends that respondent failed to produce sufficient documentation
regarding the costs for the deposition transcripts because respondent did
not specify whose depositions were taken. Respondent does not address this
argument, which we deem to be a confession of error. See Ozawa v. Vision
Airlines, Inc., 125 Nev. 556, 563, 216 P.3d 788, 793 (2009) (recognizing that
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failure to respond to an argument can be treated as a confession that the
argument is meritorious). Accordingly, we reverse the district court's
March 2021 order insofar as it awarded costs for the five deposition
transcripts.
Consistent with the foregoing, we
ORDER the judgments of the district court AFFIRMED IN
PART AND REVERSED IN PART AND REMAND this matter to the
district court for proceedings consistent with this order.8
Parraguirre
J. , Sr.J.
Cadish
cc: Hon. Nadia Kra11, District Judge
Kristine M. Kuzemka, Settlement Judge
Troutman Pepper Hamilton Sanders LLP/Atlanta
Wright, Finlay & Zak, LLP/Las Vegas
The Law Office of Vernon Nelson
Eighth District Court Clerk
8The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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