NHN Holdings, LLC v. U.S. Small Bus. Admin.

• Decision Date: 03 January 2023
• Docket Number: 2:22-CV-647 TS
• Parties: NHN HOLDINGS, LLC, a Utah limited liability company, Plaintiff, v. U.S. SMALL BUSINESS ADMINISTRATION and U.S. DEPARTMENT OF THE TREASURY, Defendants.
• Court: U.S. District Court — District of Utah

NHN HOLDINGS, LLC, a Utah limited liability company, Plaintiff,
v.
U.S. SMALL BUSINESS ADMINISTRATION and U.S. DEPARTMENT OF THE TREASURY, Defendants.

No. 2:22-CV-647 TS

United States District Court, D. Utah

January 3, 2023

MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Ted Stewart, District Judge.

This matter is before the Court on a Motion to Dismiss filed by Defendants the U.S. Small Business Administration (“SBA”) and the U.S. Department of the Treasury (“Treasury”) (collectively, Defendants”). Plaintiff has failed to respond and the time for doing so has expired.^[1] For the reasons discussed below, the Court will grant the Motion.

I. BACKGROUND

Plaintiff NHN Holdings, LLC (“NHN”) alleges that it is a fee-simple owner of real property located in Nephi, Utah (the “Subject Property”). On January 11, 2010, NHN executed a Loan Agreement and Certification (the “SBA Loan”) for the benefit of Mountain West Small Business Finance, LLC (“Mountain West”) and its intended assignee, SBA, for the amount of $647,000. Simultaneously, NHN executed a Trust Deed Fixture Filing and Assignment of Rents to the Administrator of SBA as trustee and Mountain West as beneficiary. As collateral for the SBA Loan, NHN pledged the Subject Property and the building, fixtures, and improvements.

1

On January 11, 2010, Mountain West executed an Assignment of Trust Deed, assigning all its interest in the Trust Deed to SBA. Mountain West was the servicer of the SBA Loan.

On February 26, 2013, Mountain West sent NHN a Notice of Default and Intent to Accelerate, which advised NHN that it had failed to pay the previous seven payments due under the SBA Loan. On March 31, 2013, SBA delivered to NHN a notice of its intent to refer the SBA Loan to Treasury for collection. On September 26, 2014, Treasury sent a letter to NHN advising them that the SBA Loan had been referred to Treasury for collection. Since February 26, 2013, NHN has defaulted on its obligation to pay the SBA Loan by failing to make the required monthly payments and has not made any payment toward the SBA loan.

Plaintiff brings this action asserting two causes of action. First, Plaintiff seeks declaratory relief that Defendants are time-barred from pursuing an action to enforce the Trust Deed securing the SBA loan and, as such, “the right to enforce the lien securing the SBA Loan has forever expired.”^[2] Second, Plaintiff seeks to quiet title in the Subject Property.

II. MOTION...