Dixon v. Thatcher
| Decision Date | 30 September 1987 |
| Docket Number | No. 17835,17835 |
| Citation | 103 Nev. 414,742 P.2d 1029 |
| Parties | Richard P. DIXON and Sharon E. Dixon, Appellants, v. R.H. THATCHER, E.E. Buchanan and C. Reade Kaley, Respondents. |
| Court | Nevada Supreme Court |
C. Nicholas Pereos and Laurie A. Yott, Reno, for appellants.
Guild, Hagen & Clark, Ann Morgan, and C. Joseph Guild III, Reno, for respondents.
The Dixons borrowed money from Lemons and Associates which was secured by a promissory note and deed of trust. Lemons assigned the note and deed of trust to R.H. Thatcher and his niece, E.E. Buchanan. Lemons continued collecting monthly payments on behalf of Thatcher and Buchanan. Stewart Title of Northern Nevada set up an escrow in order for the Dixons to pay off the entire loan and sent a check for $62,339.50 to Lemons. Lemons declared bankruptcy and did not forward the money to Thatcher and Buchanan, who instituted foreclosure proceedings against the Dixons. The district court denied a preliminary injunction to stop the foreclosure. We conclude the district court erred.
The Dixons contend, and we agree, that the district court abused its discretion in not granting their motion for a preliminary injunction. A preliminary injunction to preserve the status quo is normally available upon a showing that the party seeking it enjoys a reasonable probability of success on the merits and that the defendant's conduct, if allowed to continue, will result in irreparable harm for which compensatory damage is an inadequate remedy. Number One Rent-A-Car v. Ramada Inns, 94 Nev. 779, 780, 587 P.2d 1329, 1330 (1978).
The district court held that the Dixons had not met the burden of proof on irreparable harm as required by statute. NRS 33.010 provides, in relevant part, Because real property and its attributes are considered unique and loss of real property rights generally results in irreparable harm, the district court erred in holding otherwise. See Leonard v. Stoebling, 102 Nev. 543, 728 P.2d 1358 (1986) (); see also Nevada Escrow Service, Inc. v. Crockett, 91 Nev. 201, 533 P.2d 471 (1975) (). The Dixons had built a log house which they use as their home. If the house is sold at a trustee's sale, they will not be able to reclaim it. The house is worth in excess of $127,000. Thatcher holds the first deed of trust for a debt of approximately $59,000. Clearly, compensatory damages do not provide an adequate remedy in this situation.
However, even if damages are an inadequate remedy, the Dixons must also show a reasonable likelihood of prevailing on the merits before a preliminary injunction can issue. See Number One Rent-A-Car v. Ramada Inns, supra, 94 Nev. 779, 587 P.2d 1329. The district court held that there was little likelihood of success on the merits because the Dixons had actual notice of the assignment to Thatcher by Thatcher's recording of the assignment. Stewart Title, the Dixons' agent, obtained actual notice when it ran a title search and found the recorded assignment. NRS 106.210 provides as relevant: "[A]ny assignment of the beneficial interest under a deed of trust may be recorded, and from the time any of the same are so filed for record shall operate as constructive notice of the contents thereof to all persons."
The Dixons maintain that Lemons was Thatcher's agent and, therefore, their payment to Lemons was proper. They rely on Nevada Escrow Service, Inc. v. Crockett, supra, 91 Nev. 201, 533 P.2d 471, which held: "For the purpose of a preliminary injunction to halt a threatened foreclosure on the property that is the subject of the proposed purchase and about which the litigation arose a prima facie showing of possible agency ... need only be shown." Id. at 203, 533 P.2d at 472, emphasis supplied. Nevada Escrow is nearly identical to the present case. The Crocketts were the beneficiaries of two deeds of trust on property which was being sold. The buyers agreed to pay off the existing debt of $51,000 plus 12% interest owed by Ray Petitfils. Nevada Escrow, as escrow agent, wrote Acro Mortgage for the payoff on the Crockett...
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