Badger v. Eighth Judicial Dist. Court of Nev.

• Citation: 373 P.3d 89,132 Nev. Adv. Op. 39
• Decision Date: 26 May 2016
• Docket Number: No. 67835.,67835.
• Parties: Darrin D. BADGER, an Individual, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for the County of Clark; and The Honorable Jerry A. Wiese, District Judge, Respondents, and Omni Family Limited Partnership, A Nevada Domestic Limited Partnership, Real Party in Interest.
• Court: Supreme Court of Nevada

373 P.3d 89

132 Nev. Adv. Op. 39

Darrin D. BADGER, an Individual, Petitioner

v. The EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for the County of Clark; and The Honorable Jerry A. Wiese, District Judge, RespondentsandOmni Family Limited Partnership, A Nevada Domestic Limited Partnership, Real Party in Interest.

No. 67835.

Supreme Court of Nevada.

May 26, 2016.

Reid Rubinstein & Bogatz and I. Scott Bogatz, Charles M. Vlasic, III, and Jaimie Stilz, Las Vegas, for Petitioner.

Roger P. Croteau & Associates, Ltd., and Roger P. Croteau and Timothy E. Rhoda, Las Vegas; Lewis Roca Rothgerber, LLP, and Daniel F. Polsenberg and Joel D. Henriod, Las Vegas, for Real Party in Interest.

Before the Court En Banc.

OPINION

By the Court, GIBBONS

, J.:

In this opinion, we consider whether a creditor's amended complaint seeking a deficiency judgment against petitioner may relate back to a timely complaint against a different party pursuant to NRCP 15(c)

, so as to satisfy NRS 40.455(1)'s six-month deadline for an application for a deficiency judgment against petitioner. We conclude that the district court erred in permitting real party in interest's amended complaint to relate back to the timely original complaint pursuant to NRCP 15(c), so as to satisfy the six-month deadline for an application for a deficiency judgment against petitioner, as required by NRS 40.455(1). Additionally, we conclude that the timely complaint against the borrowers does not constitute a valid application for deficiency judgment against the unnamed petitioner. Finally, we conclude that petitioner did not waive his right to object under NRS 40.455(1). Accordingly, we conclude that the district court erred in denying petitioner's motion for summary judgment in the guaranty action and motion to dismiss in the borrower action, and we grant the petition for writ of mandamus.

FACTS AND PROCEDURAL HISTORY

Southwest Desert Equities, LLC (the Borrower) borrowed from OneCap Mortgage Corporation (OneCap), where OneCap was the predecessor-in-interest to real party in interest Omni Family Limited Partnership (Omni). On the same day that the Borrower took out the loan, petitioner Darrin Badger (the Guarantor) personally guaranteed the Borrower's loan by executing a continuing guaranty.

After the Borrower defaulted on the loan, the Guarantor allegedly breached the guaranty. Omni filed a complaint against the Guarantor for the alleged default on the guaranty (referred to as the Guaranty Action or Guaranty Complaint).

While the Guaranty Action was pending, Omni foreclosed on the property securing the underlying loan. The August 13, 2013, foreclosure triggered the six-month deadline for Omni to file an application for a deficiency judgment against either or both the Borrower and the Guarantor pursuant to NRS 40.455(1)

. Omni applied for a deficiency judgment against the Borrower within the six-month deadline by virtue of filing a complaint against the Borrower (referred to as the Borrower Action or Borrower Complaint) but failed to file a timely application for a deficiency judgment against the Guarantor before the lapse of the six-month deadline on February 13, 2014. On April 15, 2014, the parties filed a stipulation and order to consolidate the Guaranty Action with the Borrower Action. On September 18, 2014, the Guarantor filed a motion for summary judgment in the Guaranty Action, seeking dismissal of Omni's claims against him due to Omni's failure to apply for a deficiency judgment against the Guarantor within the six months following the foreclosure sale pursuant to NRS 40.455(1).

On December 1, 2014—approximately 16 months after the foreclosure sale—Omni filed an amended complaint in the Borrower Action (referred to as the Amended Borrower Complaint) naming the Guarantor as an additional defendant and seeking to relate the Amended Borrower Complaint back to the Borrower Complaint pursuant to NRCP 15(c)

, where the Borrower Complaint constituted a timely application for a deficiency judgment against the Borrower.

In addition to the earlier motion for summary judgment in the Guaranty Action, the Guarantor filed a motion to dismiss the Amended Borrower Complaint. The district court denied both motions and concluded that the Amended Borrower Complaint related back to the timely Borrower Complaint pursuant to NRCP 15(c)

, thereby curing Omni's failure to apply for a deficiency judgment against the Guarantor within the six-month time frame required by NRS 40.455(1). The Guarantor then filed this petition for writ of mandamus or prohibition.

DISCUSSION

Consideration of the writ petition

“This court has original jurisdiction to issue writs of mandamus and prohibition.” MountainView Hosp., Inc. v. Eighth Judicial Dist. Court, 128 Nev. 180, 184, 273 P.3d 861, 864 (2012)

; see also Nev. Const. art. 6, § 4. Where there is no plain, speedy, and adequate remedy available at law, extraordinary relief may be available. NRS 34.170 ; Smith v. Eighth Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991). While this court will not normally entertain a writ petition that challenges the denial of a motion to dismiss, “we may do so where, as here, the issue is not fact-bound and involves an unsettled and potentially significant, recurring question of law.” Buckwalter v. Eighth Judicial Dist. Court, 126 Nev. 200, 201, 234 P.3d 920, 921 (2010). Additionally, this court may address writ petitions when “summary judgment is clearly required by a statute or rule.” ANSE, Inc. v. Eighth Judicial Dist. Court, 124 Nev. 862, 867, 192 P.3d 738, 742 (2008).

We exercise our discretion to consider this writ petition because the petition involves a significant and potentially recurring question of law, the petition is not fact-based, and the district court failed to grant summary judgment where a Nevada statute required it. Specifically, the district court's application of NRCP 15(c)

to supplement the deadline contained in NRS 40.455(1) reveals confusion with our previously strict application of the deadline. We believe that consideration of this petition will clarify our position and prevent further misapplication of NRCP 15(c) in cases that are subject to NRS 40.455(1). Accordingly, we conclude that this writ petition warrants our consideration.

Merits of the writ petition

In the context of a writ petition, statutory interpretation is a question of law that this court reviews de novo. Otak Nev., LLC v. Eighth Judicial Dist. Court, 129 Nev. ––––, ––––, 312 P.3d 491, 498 (2013)

. Statutory language must be given its plain meaning if it is clear and unambiguous. D.R. Horton, Inc. v. Eighth Judicial Dist. Court, 123 Nev. 468, 476, 168 P.3d 731, 737 (2007). Further, this court is “loath to depart from the doctrine of stare decisis.” City of Reno v. Howard, 130 Nev. ––––, ––––, 318 P.3d 1063, 1065 (2014) (quoting Armenta–Carpio v. State, 129 Nev. ––––, ––––, 306 P.3d 395, 398 (2013) ).

A writ of mandamus is available “to control an arbitrary or capricious exercise of discretion.” Humphries v. Eighth Judicial Dist. Court, 129 Nev. ––––, ––––, 312 P.3d 484, 486 (2013)

(quoting Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) ). “An exercise of discretion is considered arbitrary if it is founded on prejudice or preference rather than on reason and capricious if it is contrary to the evidence or established rules of law.” State, Dep't of Public Safety v. Coley, 132 Nev. ––––, ––––, 368 P.3d 758, 760 (2016) (internal quotations omitted).

The district court erred in permitting the Amended Borrower Complaint to relate back to the timely Borrower Complaint under NRCP 15(c) to satisfy the six-month deadline required by NRS 40.455(1)

Omni argues that the district court properly denied summary judgment and the Guarantor's motion to dismiss because Omni's Amended Borrower Complaint related back to the timely Borrower Complaint pursuant to NRCP 15(c)

, thereby satisfying NRS 40.455(1)'s six-month deadline for an application for a deficiency judgment against the Guarantor. We disagree.

It is well-settled that every obligation secured by property through a mortgage or a deed of trust is subject to Nevada's antideficiency statutes. First Interstate Bank of Nev. v. Shields, 102 Nev. 616, 620–21, 730 P.2d 429, 432 (1986)

. Indeed, “the Legislature has shown a strong inclination towards protecting an obligor's rights under the antideficiency statutes.” Lavi v. Eighth Judicial Dist. Court, 130 Nev. ––––, ––––, 325 P.3d 1265, 1268 (2014)

. Accordingly, Nevada's deficiency judgment statutes are intended not only to protect borrowers, but to protect guarantors as well. Shields, 102 Nev. at 621, 730 P.2d at 432. Such protection furthers Nevada public policy goals because “[a] guarantor is the favorite of the law.” Tri–Pac. Commercial Brokerage, Inc. v. Boreta, 113 Nev. 203, 206, 931 P.2d 726, 729 (1997) (citation omitted).

Consistent with these policy rationales, NRS 40.455(1)

requires that an application for a deficiency judgment be made within six months after the date of a foreclosure sale. NRS 40.455(1) ;¹

see also

Lavi, 130 Nev. at ––––, 325 P.3d at 1268 (holding that a “timely application for a deficiency judgment must be made under NRS 40.455 ” in order to seek a deficiency judgment);²

see also

Walters, 127 Nev. at 728, 263 P.3d at 234 (“Under the clear and unambiguous language of NRS 40.455(1), an application must be made within six months.”). It follows that a complaint filed prior to a foreclosure sale cannot sufficiently put an obligor on notice of a deficiency claim. Lavi, 130 Nev. at ––––, 325 P.3d at 1269. As a general principle, this court will not interpret statutes so as to render the statutory language meaningless. In re Parental Rights as to S.M.M.D., 128 Nev. 14, 24, 272 P.3d 126, 132 (2012).

Under NRCP 15(c)

, “[w]henever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted...