White Lantern, LLC v. PHH Mortgage Corp., 103019 NVCA, 76299-COA

Docket Nº:76299-COA
Opinion Judge:Gibbons, C.J.
Party Name:WHITE LANTERN, LLC, Appellant, v. PHH MORTGAGE CORPORATION, Respondent.
Judge Panel:Tao, Bulla, Judges. Hon. Joanna Kishner, District Judge.
Case Date:October 30, 2019
Court:Court of Appeals of Nevada
 
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WHITE LANTERN, LLC, Appellant,

v.

PHH MORTGAGE CORPORATION, Respondent.

No. 76299-COA

Court of Appeals of Nevada

October 30, 2019

UNPUBLISHED OPINION

ORDER OF AFFIRMANCE

Gibbons, C.J.

White Lantern, LLC, appeals from a judgment following a bench trial in a quiet title action. Eighth Judicial District Court, Clark County; Joanna Kishner, Judge.

The original owners of the subject property failed to make periodic payments to their homeowners' association (HOA). The HOA recorded a notice of lien for delinquent assessments and later a notice of default and election to sell to collect on the past due assessments and other fees pursuant to NRS Chapter 116. Appellant White Lantern, LLC (White Lantern), acquired the property from the purchaser at the resulting foreclosure sale and filed the underlying action seeking to quiet title against respondent PHH Mortgage Corporation (PHH), the beneficiary of the first deed of trust on the property. Following a bench trial, the district court found that the Federal National Mortgage Association (Fannie Mae) owned the loan secured by the deed of trust such that 12 U.S.C. § 4617(j)(3) (the Federal Foreclosure Bar) prevented the foreclosure sale from extinguishing the deed of trust. This appeal followed.

This court reviews a district court's legal conclusions following a bench trial de novo, but we will not disturb the district court's factual findings "unless they are clearly erroneous or not supported by substantial evidence." Wells Fargo Bank, N.A. v. Radecki, 134 Nev. 619, 621, 426 P.3d 593, 596 (2018).

On appeal, White Lantern primarily contends that PHH failed to prove that Fannie Mae owned the loan secured by the deed of trust because it failed to produce any evidence that Fannie Mae physically possessed the note, which was endorsed in blank. However, as argued by PHH, possession of a note with a blank endorsement merely indicates that the note is payable to the bearer, and the right to enforce a negotiable instrument is distinct from actual ownership- See NRS 104.3205(2); see also NRS 104.3203; U.C.C. § 3-203 cmt. 1 (Am. Law Inst. & Unif. Law Comm'n 2004). And because White Lantern does...

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