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Facklam v. HSBC Bank USA, a National Association

Supreme Court of Nevada

September 14, 2017

AMY FACKLAM, Appellant,
v.
HSBC BANK USA, A NATIONAL ASSOCIATION, AS TRUSTEE FOR DEUTSCHE ALT-A SECURITIES MORTGAGE LOAN TRUST, MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2007-AR2, Respondent.

         Appeal from a district court order dismissing a quiet title action. Eighth Judicial District Court, Clark County; Elissa F. Cadish, Judge.

          Hafter Law and Jacob L. Hafter, Las Vegas, for Appellant.

          Houser & Allison, APC, and Mark H. Hutchings, Las Vegas, and Jeffrey S. Allison, Irvine, California, for Respondent.

         BEFORE THE COURT EN BANC.

          OPINION

          CHERRY, C.J.

         NRS 11.190(1)(b) provides that an aggrieved party under a contract may not commence a civil action if more than six years have elapsed since the cause of action accrued or the moment that the aggrieved party discovers or reasonably should have discovered facts supporting a cause of action. However, a lender may also pursue a nonjudicial foreclosure available when a borrower fails to meet his or her obligation under a promissory note that is secured by a deed of trust.

         Because the nonjudicial foreclosure stems from the deed of trust, which exists only because of the underlying promissory note, we are asked to apply NRS 11.190(1)(b)'s statute of limitations for contract actions to nonjudicial foreclosures. We decline to do so because statutes of limitations only apply to judicial actions, and a nonjudicial foreclosure by its very nature is not a judicial action.

         FACTS AND PROCEDURAL HISTORY

         In 2006, appellant Amy Facklam entered into a home loan agreement, wherein she signed a promissory note that was secured by a deed of trust on the subject property. In 2009, Facklain defaulted on said loan and the prior mortgage servicer recorded a notice of default. The prior servicer eventually filed a rescission of its election to declare default.

         In 2013, respondent HSBC became the beneficiary of the promissory note and deed of trust on Facklam's home. In 2016, after Facklam defaulted again, HSBC recorded a notice of default and election to sell the property. The notice provided, in bolded capital letters, that if Facklam failed to pay the entire debt that was due, HSBC would sell the property "without any court action."

         Facklam commenced the present action to quiet title and extinguish HSBC's interest in the property. She claimed that HSBC was barred from foreclosing on the mortgaged property because the six-year limitation period began running with the initial notice of default in 2009 and, therefore, expired in 2015.

         Facklam moved for summary judgment, and HSBC filed an opposition and countermotion to dismiss. The district court denied Facklam's motion for summary judgment and dismissed Facklam's complaint, finding that any potential acceleration created in 2009 was canceled when the prior servicer filed its rescission in 2011.[1]

         DISCUSSION

         Standard ...


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