IN RE BRYCE L. MONTIERTH AND MAILE L. MONTIERTH, DEBTORS. BRYCE L. MONTIERTH AND MAILE L. MONTIERTH, Appellants,
DEUTSCHE BANK, Respondent
Certified questions under NRAP 5 concerning the status of a promissory note when the note and deed of trust on a mortgage are split at the time of foreclosure. United States Bankruptcy Court, District of Nevada; Bruce A. Markell, Bankruptcy Court Judge.
Questions answered in part.
Crosby & Fox, LLC, and Troy S. Fox and David M. Crosby, Las Vegas, for Appellants.
Tiffany & Bosco, P.A., and Gregory L. Wilde, Las Vegas; Severson & Werson and Jan Timothy Chilton, San Francisco, California, for Respondent.
Snell & Wilmer, LLP, and Andrew M. Jacobs and Kelly H. Dove, Las Vegas; for Amicus Curiae Mortgage Electronic Registration Systems, Inc.
Hardesty, C.J. We concur: Parraguirre, J., Cherry, J., Gibbons, J., Douglas, J., Saitta, J., Pickering, J.
BEFORE THE COURT EN BANC.
The United States Bankruptcy Court for the District of Nevada has certified two questions of law to this court concerning the legal effect on a foreclosure when the promissory note and the deed of trust are split at the time of foreclosure. The bankruptcy court asks " what occurs when the promissory note and the deed of trust remain split at the time of the foreclosure" and whether recordation of an assignment of a deed of trust " is a purely ministerial act [that] would not violate the automatic stay." However, under the facts of this case, the real question involves what occurs when the promissory note is held by a principal and the beneficiary under the deed of trust is the principal's agent at the time of foreclosure. We conclude that reunification of the note and the deed of trust is not required to foreclose because the beneficiary of the deed of trust is authorized to foreclose on behalf of the note holder as its agent. We also conclude that, as a matter of law, the recording of an assignment of a deed of trust is a ministerial act; however, we decline to determine the effect of that ministerial act on the application of the stay statute as this is a question involving federal law.
In June 2005, appellants Bryce and Maile Montierth signed a promissory note in favor of 1st National Lending Services for $170,400. The note provided that " the Lender may transfer [the] [n]ote." The note was subsequently transferred to respondent Deutsche Bank.
The note was secured by a deed of trust on the Montierths' property in Logandale, Nevada. The beneficiary of the deed of trust was Mortgage Electronic Registration Systems, Inc. (MERS), " solely as nominee for Lender and Lender's successors and assigns." Additionally, the deed of trust provided:
MERS holds only legal title to the interests granted by Borrower in this Security Instrument; but, if necessary . .., MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.
The Montierths' last payment on the note was made in June 2009. Deutsche Bank recorded a notice of default and initiated foreclosure. The Montierths opted into Nevada's Foreclosure Mediation Program (FMP), but the first two mediation attempts were unsuccessful. The Montierths petitioned for judicial review of the attempted mediation, and the district court found that Deutsche Bank failed to participate in the mediation in good faith.
Deutsche Bank then filed another notice of default, and the Montierths again elected to mediate. Less than two weeks before the scheduled mediation, the Montierths ...