639 P.2d 528 (Nev. 1982), 12849, Long v. Towne

Docket Nº:12849.
Citation:639 P.2d 528, 98 Nev. 11
Party Name:Helen LONG and Ray Long, Appellants, v. Dorothy A. TOWNE and Steamboat Mobile Homeowners Association, Respondents.
Case Date:January 28, 1982
Court:Supreme Court of Nevada

Page 528

639 P.2d 528 (Nev. 1982)

98 Nev. 11

Helen LONG and Ray Long, Appellants,


Dorothy A. TOWNE and Steamboat Mobile Homeowners

Association, Respondents.

No. 12849.

Supreme Court of Nevada.

January 28, 1982.

Page 529

        Paul A. Richards, Reno, for appellants.

        Woodburn, Wedge, Blakey & Jeppson by Suellen E. Fulstone and William E. Peterson, Reno, for respondents.

[98 Nev. 12] OPINION

        PER CURIAM:

        Appellants Helen and Ray Long purchased a lot in Steamboat Springs Estates, a mobile home park, from respondent Dorothy A. Towne. 1 When they signed the contract of sale, the Longs received a copy of the Declaration of Covenants, Conditions and Restrictions (CC&Rs). Among other things, the CC&Rs established the Steamboat Mobile Homeowners Association (the Association), respondent herein, and gave the Association authority to assess and collect fees. The Association was also given authority to file a lien on a member's property for failure to pay the assessment and to enforce the lien by a foreclosure sale. 2

        Mrs. Long repeatedly refused to pay the monthly assessment of $10.00. In January 1978, the Association filed a lien against the Longs' property for the amount of the past due assessments. Because the assessments remained unpaid, on March 8, 1978, the Association served upon Mrs. Long a notice of default and election to sell. Four months later, on July 17, 1978, the Association served a notice of sale. The sale was conducted on August 17, 1978, and Towne purchased the property for $3,000.00. 3

        On September 15, 1978, the Longs filed this lawsuit seeking to set aside the lien foreclosure sale. The district court granted summary judgment in respondents' favor. In this appeal the Longs do not dispute the fact that all notices to them were properly given and that the sale was properly conducted. They contend that Mrs. Long was confused and that she thought that by paying off the deed of trust to Towne, she had also satisfied the Association's lien.

        [98 Nev. 13] 1. The Longs first contend that respondents Towne and the Association committed constructive fraud in holding the lien foreclosure sale. Constructive fraud is the breach of some legal or equitable duty

Page 530

which, irrespective of moral guilt, the law declares fraudulent because of its tendency to deceive others or to violate confidence. Sec. Nat. Bank v. Peters, Writer & Christensen, Inc., 569 P.2d 875 (Colo.App.1977); Loucks v. McCormick, 198 Kan. 351, 424 P.2d 555 (1967); Braselton v. Nicolas & Morris, 557 S.W.2d 187 (Tex.Civ.App.1977). Constructive fraud is characterized by a breach of duty arising out of a fiduciary or confidential relationship. In re Guardianship of Chandos, 18 Ariz.App. 583, 504 P.2d 524. A "confidential or fiduciary relationship" exists when one reposes a special confidence in another so that the latter, in equity and good conscience, is bound to act in good faith and with due regard to the interests of the one reposing the confidence. Paskvan v. Mesich, 455 P.2d 229 (Alaska 1969); Stevens v. Marco, 147 Cal.App.2d 357, 305 P.2d 669 (1956); Ford v. Guarantee Abstract and Title Co., Inc., 220 Kan. 244, 553 P.2d 254 (1976).

        In this case, the Longs reposed no special confidence...

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