Mardian v. Greenberg Family Trust

131 Nev., Advance Opinion 72-
IN THE SUPREME COURT OF THE STATE OF NEVADA
SUSAN MARDIAN; AND LEONARD No. 62061
MARDIAN,
Appellants,
vs.
MICHAEL AND WENDY GREENBERG SEP 2 k 2015
FAMILY TRUST, AG
CL
Respondent. BY
CLERK
Appeal from a district court judgment in a deficiency action.
Eighth Judicial District Court, Clark County; Gloria Sturman, Judge.
Reversed.
Hutchison & Steffen, LLC, and Michael K. Wall, Cami M. Perkins, and
Tanya S. Gaylord, Las Vegas,
for Appellants.
Fredrickson, Mazeika & Grant and Tomas V. Mazeika and Matthew D.
Peterdy, Las Vegas,
for Respondent.
BEFORE THE COURT EN BANC.
OPINION
By the Court, CHERRY, J.:
This is an appeal from a district court judgment in a real
property deficiency action. Appellants Susan and Leonard Mardian (the
SUPREME COURT
OF
NEVADA
(0) 1947A (44Pp -7(3(86c_c
Mardians) guaranteed a promissory note executed in favor of respondents
Michael and Wendy Greenberg Family Trust (Greenberg), which was
secured by land in Arizona. The documents for the transaction were
executed in Nevada and contained a Nevada choice-of-law provision. After
default on the promissory note, Greenberg filed a complaint in Nevada and
then initiated a foreclosure sale in Arizona. Nine months later, Greenberg
sought a deficiency judgment on the guaranty through its initially filed
complaint. The district court found that, because the foreclosure was in
Arizona but the proceedings took place in Nevada, neither Nevada's nor
Arizona's time limit for seeking a deficiency judgment applied and the
deficiency action could proceed. We conclude that the district court erred
when it found that neither the Nevada nor the Arizona limitations period
applied. Because of the choice-of-law provision in the promissory note, the
contract is governed by Nevada law. We also conclude that the district
court erred when it denied appellants' motion to dismiss the complaint as
time-barred because the Greenbergs did not apply for a judgment within
the limitations period under NRS 40.455(1).
FACTS AND PROCEDURAL HISTORY
In September 2007, Joshua Tree, LLC, executed a promissory
note in the amount of $1,100,000 in favor of respondent Michael and
Wendy Greenberg Family Trust (Greenberg). The note was secured by a
deed of trust encumbering 280 acres of undeveloped real property located
in Arizona, and also by personal guaranties, each for the full amount of
the note, from appellants Susan Mardian and Leonard Mardian. Both
guaranties stated that they were governed by Nevada law and waived the
one-action rule found in NRS 40.430.
SUPREME COURT
OF
NEVADA
2
(0) 1047A e
The parties agree that Joshua Tree defaulted on the loan and
the guaranties were not upheld. In March 2009, Greenberg filed a
complaint against the Mardians for breach of contract, breach of the
implied covenant of good faith and fair dealing, and unjust enrichment.
Greenberg then initiated foreclosure proceedings. A month later,
Greenberg purchased the property at auction for $37,617. The property
was then relisted for sale at $2,520,000. The price was subsequently
reduced and, at the time this appeal was filed, the property had not yet
sold.
In December 2009, the Mardians moved the district court to
dismiss the underlying complaint for the entire amount due under the
promissory note or, alternatively, for summary judgment because a
deficiency application for the balance due on the loan was time-barred.
Greenberg opposed the motion. At a hearing, the district court
determined that it would not apply the limitations period in NRS 40.455
because the property was located in Arizona and sold pursuant to Arizona
law, not Nevada law. Therefore, the district court indicated, neither
Arizona's nor Nevada's limitations period applied. The court later entered
an order denying the Mardians' motion.
The Mardians again moved for summary judgment in January
2012, which Greenberg opposed. At the hearing on that motion, a
different district court judge stated that "the problem I have here is that
we do have law of the case and we don't know why [the prior judge] ruled
the way that she ruled, but it's her ruling." The district court then entered
an order denying summary judgment, concluding that the motion for
summary judgment was based on the same issues as the Mardians'
previously denied motion.
SUPREME COURT
OF
NEVADA
3
(0 \ 1947A
Following a bench trial, the district court found that the
Mardians owed $1,279,224 under the promissory note and that the fair
market value of the property at the time of its sale was $350,000.1 Thus,
the court determined that adding interest to the default amount while
reducing it by the fair market value of the property resulted in a
deficiency totaling $929,224. Judgment was entered in Greenberg's favor
for that amount. The Mardians appealed.
DISCUSSION
Standard of review
The Mardians argue that the statute of limitations applies
regardless of whether the foreclosure was conducted pursuant to NRS
107.080 or pursuant to foreign law. Greenberg argues that NRS 40.455
encompasses only judicial foreclosures under NRS 40.430 or nonjudicial
foreclosures under NRS 107.080. Greenberg asserts that because the
property was in Arizona, it could not utilize the NRS 40.430 foreclosure
process or the NRS Chapter 107 trustee's sale process and instead needed
to initiate separate proceedings in Arizona.
Although a district court's order denying summary judgment
is not independently appealable, "where a party properly raises the issue
on appeal from the final judgment, this court will review the decision de
novo." Cromer v. Wilson, 126 Nev. 106, 109, 225 P.3d 788, 790 (2010).
Summary judgment is proper only if, when considering the evidence "in a
light most favorable to the nonmoving party," no genuine issue of material
fact exists and the moving party is entitled to a judgment as a matter of
law. Wood v. Safeway, 121 Nev. 724, 729, 121 P.3d 1026, 1029 (2005).
SUPREME COURT
OF
NEVADA
4
(0) I947A 9gV37)0
Issues of law, including statutory interpretation, are also
reviewed de novo. Cromer, 126 Nev. at 109, 225 P.3d at 790. When a
statute's language is unambiguous, this court does not resort to the rules
of construction and will give that language its plain meaning. Id. "[This
court has a duty to construe statutes as a whole, so that all provisions are
considered together and, to the extent practicable, reconciled and
harmonized." Id. at 110, 225 P.3d at 790. Generally, statutes should not
be interpreted to "render [[ language meaningless or superfluous." In re
Parental Rights as to S.M.M.D., 128 Nev., Adv. Op. 2, 272 P.3d 126, 132
(2012) (internal quotations omitted). Moreover, "[wle presume that a
statute does not modify common law unless such intent is explicitly
stated." Branch Banking v. Windhaven & Tollway, LLC, 131 Nev., Adv.
Op. 20, 347 P.3d 1038, 1040 (2015).
Choice-of-law provision
While the arguments made by the parties focus on Nevada
law, the issue of whether the Arizona law should have been applied must
also be addressed. In this regard, Greenberg avers that it would not have
been appropriate for the district court to apply the Arizona limitation
period for foreclosures to the personal action commenced in Nevada
because the guaranties specify that they are governed by Nevada law. We
agree and conclude that because of the choice-of-law provision, Nevada
law—particularly Nevada's limitations period, see NRS 40.455(1)—applies
in this case. See Key Bank of Alaska v. Donnels, 106 Nev. 49, 52, 787 P.2d
382, 384 (1990) (concluding that where there was "no evidence or
argument. . . regarding bad faith or evasion of Nevada law, the provision
designating Alaska law in the promissory note [was] valid"). Having
SUPREME COURT
OF
NEVADA
5
(0) 1947A e
concluded that Nevada's deficiency statutes apply, we turn to the parties'
arguments concerning the deficiency application.
Application of NRS 40.455W'
In this case, the Mardians are the guarantors of Joshua Tree's
promissory note, which was held by Greenberg and which was secured by
the Arizona real property. Although Greenberg sued the Mardians on
their guaranties, we have previously held that Nevada's deficiency
judgment statutes are applicable to actions on guaranty contracts when
the underlying note is secured by real property. First Interstate Bank of
Nev. v. Shields, 102 Nev. 616, 621, 730 P.2d 429, 432 (1986). Thus, in
order to proceed against the Mardians on their guaranties, Greenberg was
required to comply with Nevada's deficiency statutes.
We first consider the parties' contentions regarding whether
NRS 40.455(1) permits deficiency judgments in Nevada when the property
foreclosed upon was in another state. NRS 40.455(1) provides:
Except as otherwise provided in subsection 3,
upon application of the judgment creditor or the
beneficiary of the deed of trust within 6 months
after the date of the foreclosure sale or the trustee's
sale held pursuant to NRS 107.080, respectively,
and after the required hearing, the court shall
award a deficiency judgment to the judgment
creditor or the beneficiary of the deed of trust. . . .
'The 2015 Legislature amended NRS 40.455 and related statutes.
S.B. 453, 78th Leg. (Nev. 2015) (effective Oct. 1, 2015). This appeal is
governed by the pre-amendment version of NRS 40.455, see NRS 40.455
(2009), and all references herein to NRS 40.455 are to the pre-amendment
version.
SUPREME COURT
OF
NEVADA
6
(0) 1947A e
NRS 40.455(1) (emphasis added). "NRS 40.455(1) is an anti-deficiency
statute that derogates from the common law, and this court construes
such provisions narrowly, in favor of deficiency judgments." Branch
Banking, 131 Nev., Adv. Op. 20, 347 P.3d at 1041 (internal quotations
omitted).
In Branch Banking, we considered "whether NRS 40.455(1)
precludes a deficiency judgment when the beneficiary nonjudicially
forecloses upon property located in another state and the foreclosure is
conducted pursuant to that state's laws instead of NRS 107.080." Id. at
1039. In that case, a note with a Nevada choice-of-law provision was
secured by real property in Texas Id. After default, the lender sold the
property at a Texas nonjudicial foreclosure sale and then sought a
deficiency judgment in Nevada. Id. We concluded that NRS 40.455(1)
"does not. . . preclude[ ] deficiency judgments arising from nonjudicial
foreclosure sales held in another state." Id. at 1041.
In this case, it is unclear whether Greenberg proceeded via a
judicial or nonjudicial foreclosure sale against the Arizona property.
However, the distinction is irrelevant. We held in Branch Banking that a
lender who had proceeded via nonjudicial foreclosure in another state
could seek a deficiency judgment in Nevada under NRS 40.455(1). Id. We
also held in Branch Banking that "the foreclosure sale described [in NRS
40.455(1)] is a judicial foreclosure," and we further held that, as in the
nonjudicial context, NRS 40.455(1) does not contain limiting language
precluding deficiency judgments arising from judicial foreclosure sales
held in another state. Id. ("NRS 40.455(1) . . . does not indicate that it
precludes deficiency judgments arising from nonjudicial foreclosure sales
held in another state."). Accordingly, NRS 40.455(1) is not a bar to
SUPREME COURT
OF
NEVADA
7
(0) 1947A e
Greenberg seeking a deficiency judgment from the Mardians solely
because Greenberg foreclosed on real property in Arizona.
Next, we turn to the Mardians' contention that NRS 40.455(1)
required Greenberg to file an "application" for a deficiency judgment
"within 6 months after the date of the foreclosure sale." We have
previously addressed the six-month limitation period and what is required
of an application for a deficiency judgment in Walters v. Eighth Judicial
District Court, 127 Nev., Adv. Op. 66, 263 P.3d 231 (2011), and Lavi v.
Eighth Judicial District Court, 130 Nev., Adv. Op. 38, 325 P.3d 1265
(2014).
In Walters, we considered the requisite form of a deficiency
judgment application under NRS 40.455(1) and held that the motion for
summary judgment constituted such an application "because it was made
in writing, set forth in particularity the grounds for the application, and
set forth the relief sought" in accordance with NRCP 7(b)(1). 2 Walters, 127
Nev., Adv. Op. 66, 263 P.3d at 234. Because the lender filed its motion for
summary judgment within six months of the foreclosure, we concluded
that the lender was not time-barred from seeking a deficiency judgment.
Id.
2NRCP 7(b)(1) states that
Fain application to the court for an order shall be
by motion which, unless made during a hearing or
trial, shall be made in writing, shall state with
particularity the grounds therefore, and shall set
forth the relief or order sought. The requirement
of writing is fulfilled if the motion is stated in a
written notice of the hearing of the motion.
SUPREME COURT
OF
NEVADA
8
(0) 1941A
In Lavi, a lender filed suit against the guarantor after the
borrower defaulted on the loan. 130 Nev., Adv. Op. 38, 325 P.3d at 1266.
Almost one year after the foreclosure sale, the lender filed a motion for
summary judgment to recover the deficiency. Id. at 1267. The guarantor
responded by filing a countermotion for summary judgment, arguing that
NRS 40.455 precluded the lender from any recovery because the lender did
not apply for a deficiency judgment within six months of the foreclosure
sale. Id. The district court concluded that the lender was not barred from
seeking a deficiency judgment because the lender "sufficiently notified" the
guarantor of its intent to pursue a judgment. Id. On appeal, we concluded
that when the guarantor waived the one-action rule, the lender "was
allowed to bring an action against [the guarantor] prior to completing the
foreclosure on the secured property, but that waiver did not terminate the
procedural requirements for asserting that separate action" within six
months of the foreclosure sale. Id.
Here, the promissory note is governed by Nevada law, despite
the location of the collateral property, so Greenberg was required to make
its application pursuant to NRS 40.455(1). We conclude that it failed to
comply with NRS 40.455(1) because it did not apply for a deficiency
judgment within six months of the foreclosure sale. Therefore, the
district court erred when it denied the Mardians' motion for summary
SUPREME COURT
OF
NEVADA
9
(0) 194Th 0
judgment, and we reverse both the district court's judgment in favor of
Greenberg and the district court's order denying the Mardians' motion for
summary judgment. 3
We concur:
, C.J.
Hardesty
J.
—C24ackasm.a
Parra guirre r
J.
J.
Gibbons
3 We have considered respondent's other arguments and conclude
that they lack merit. Furthermore, we conclude that the parties'
remaining arguments are moot and decline to consider them. Personhood
Nev. v. Bristol, 126 Nev. 599, 602, 245 P.3d 572, 574 (2010) (indicating
that this court will generally not consider moot issues).
SUPREME COURT
OF
NEVADA 10
(0) 1947A ex,