In a question certified by the Ninth Circuit Court of Appeals, the Nevada Supreme Court recently held via a split decision that a prior lender's action attacking an HOA sale is subject to a four-year limitations period, and that the period does not begin to run as of the date of sale, but instead when "the lienholder receives notice of some affirmative action by the titleholder to repudiate the lien or that is otherwise inconsistent with the lien's continued existence."  See U.S. Bank, N.A. v. Thunder Props., 2022 Nev. LEXIS 3 (Feb. 3, 2022).  In the case, the lender had a first deed of trust on the property.  In 2011, the HOA foreclosed and sold the property, and the lender did not challenge the sale at that time.  The property was subsequently transferred to the defendant and, in 2016, the lender brought a quiet title action.  The defendant filed a motion to dismiss arguing that the claim was time-barred because the limitations period began to run upon the sale date, and the District Court agreed.  The lender appealed, and the Ninth Circuit certified the questions of (i) how long the limitations period is; and (ii) when the period begins to run to the Nevada Supreme Court.

First, the four-judge majority found that a four-year limitations period should apply.  The Court determined that none of the proposed limitations statutes proposed by the parties were analogous, and that "we conclude that this is exactly the type of situation for which NRS 11.220's catch-all period was built."  Accordingly, the lender had four years to bring the claim.  Second, the Court found that "the limitations period does not begin to run until the lienholder receives notice of some affirmative action by the titleholder to repudiate the lien or that is otherwise inconsistent with the lien's continued existence."  Moreover, "[t]he HOA foreclosure sale, standing alone, is not sufficient to trigger the period. . . . because the foreclosure sale does not necessarily extinguish the lien. . . . To rise to the level that would trigger the limitations period, something more is required."  Three judges concurred in part and dissented in part from the majority's decision.  Although they agreed that the four-year period was applicable to any claim to invalidate the sale, they argued that the period should begin at the time of the sale:  "If a superpriority lien foreclosure sale does not call the deed of trust sufficiently into question to trigger the statute of limitations, it is hard to imagine what would."  They also argued that, to the extent the lender claimed that the sale itself was vaild but did not affect the deed of trust (e.g., "that tender of the superpriority portion of the lien was futile and therefore excused"), that limitations period would follow the standard periods for enforcing deeds of trusts as against borrowers (e.g., six years from the maturity date).

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