Opinion
77847-COA
08-04-2021
IN RE: DANELLE MERBACH. v. NATIONSTAR MORTGAGE LLC, Respondent. DANELLE MERBACH, Appellant,
UNPUBLISHED OPINION
ORDER OF AFFIRMANCE
Danelle Merbach appeals from a district court order directing the issuance of a foreclosure certificate. Second Judicial District Court, Washoe County; Kathleen M. Drakulich, Judge.
Danelle and her ex-husband, nonparty Ralph Merbach, are both signatories to the deed of trust recorded against the subject property, while Ralph is the sole obligor under the associated promissory note. Following Ralph's default, Danelle elected to participate in Nevada's Foreclosure Mediation Program (FMP). Despite the fact that only Danelle filed a petition for foreclosure mediation assistance, both she and Ralph ultimately appeared at the mediation, as did respondent Nationstar Mortgage LLC (Nationstar) in its capacity as loan servicer on behalf of HSBC Bank USA, National Association (HSBC), the beneficiary of the deed of trust. The parties did not come to an agreement on a loan modification, and the mediator subsequently filed a mediator's statement noting that Nationstar had supposedly failed to provide a broker's price opinion (BPO) that was dated within 60 days prior to the mediation as required under the Foreclosure Mediation Rules (FMRs). The mediator's statement did not include any recommendation concerning sanctions or whether the district court should issue a foreclosure certificate.
Both Nationstar and Danelle then filed what were essentially requests for appropriate relief in the district court under FMR 20(2). In its request, Nationstar argued that it had in fact complied with the FMRs because the BPO it submitted was only 53 days old and that a foreclosure certificate should therefore issue. In her request, Danelle conceded that the BPO complied with the FMRs, but she argued that Nationstar failed to provide all assignments of the deed of trust in proper form, that the promissory note and deed of trust were "split" such that no entity was entitled to foreclose, and that Nationstar lacked authority to negotiate a loan modification under the terms of the pooling and servicing agreement (PSA) governing the loan. The district court ultimately entered a written order confirming that Nationstar's BPO was compliant with the FMRs, rejecting all of Danelle's arguments, and directing the issuance of a foreclosure certificate. This appeal followed.
The FMRs were originally adopted on June 30, 2009, and have been amended and renumbered numerous times since. For clarity, we apply the FMRs that went into effect on August 31, 2017, which governed the proceedings at the time of the underlying mediation.
In an FMP matter, we give deference to the district court's factual determinations, but we review legal issues de novo. Pascua v. Bayview Loan Servicing, LLC, 135 Nev. 29, 31, 434 P.3d 287, 289 (2019).
On appeal, Danelle sets forth multiple arguments in favor of reversal. First, she contends that she was unaware of Nationstar's BPO until the mediator filed his statement after the mediation. But Danelle failed to raise this issue before the district court; on the contrary, through counsel, she conceded that Nationstar produced the BPO more than 10 days prior to the mediation and that the mediator mistakenly concluded that the BPO was not dated within the 60 days preceding the mediation. See FMR 13(7)(f) (requiring the beneficiary of the deed of trust to submit a BPO "not more than 60 days old" to the homeowner and the mediator at least 10 days before the mediation), (10)-(11) (requiring the beneficiary or its representative to "produce an appraisal [or BPO] dated no more than 60 days before the commencement date of the mediation"). This issue is therefore waived, and we decline to consider it. See Old Aztec Mine, Inc. v. Brown, 97 Nev. 49, 52, 623 P.2d 981, 983 (1981) ("A point not urged in the trial court... is deemed to have been waived and will not be considered on appeal.").
Danelle also contends for the first time on appeal that Nationstar failed to provide Ralph with adequate statutory notice of the mediation. But even assuming Danelle has standing to raise this issue on behalf of nonparty Ralph-who nevertheless attended the mediation-her failure to raise the issue below results in a waiver. See Old Aztec Mine, 97 Nev. at 52, 623 P.2d at 983.
Danelle next argues that Nationstar failed to produce all assignments of the deed of trust in the manner required under the FMRs. Specifically, she contends that Nationstar produced certified copies of the original assignments that lacked file stamps from the county recorder, which supposedly suggested that the assignments were unrecorded and therefore unenforceable. See NRS 106.210(1) (2011) (setting forth that "any assignment of the beneficial interest under a deed of trust must be recorded" for "the trustee under the deed of trust [to] exercise the power of sale pursuant to NRS 107.080"). But FMR 13(7)(b) requires only that the beneficiary submit "[t]he original or certified copy ... of any document utilized to assign . . . the deed of trust," not a recorded version of the document, and Danelle does not dispute that Nationstar provided such certified copies. Moreover, the record reflects that, despite not being required to under the FMRs, Nationstar provided recorded copies of the assignments to Danelle at the mediation. We therefore reject Danelle's argument on this point.
Danelle further argues that Nationstar failed to demonstrate that it has authority to foreclose on the subject property. She contends that the note and deed of trust are split-as Nationstar holds the former and HSBC holds the latter-such that no entity has authority to foreclose. See Edelstein v. Bank of N.Y. Mellon, 128 Nev. 505, 518, 286 P.3d 249, 258 (2012) (providing that "both the promissory note and the deed must be held together to foreclose; the general practical effect of severance is to make it impossible to foreclose the mortgage" (alteration and internal quotation marks omitted)). However, in In re Montierth, our supreme court recognized an exception to the general severance rule when there is "a principal agent relationship between the note holder and the mortgage holder." 131 Nev. 543, 547, 354 P.3d 648, 651 (2015). Specifically, the court determined that '"[reunification of the note and the deed of trust is not required to foreclose [where there is] an existing principal-agent relationship between [the mortgage holder] and [the note holder]." Id. at 548, 354 P.3d at 651. Because it is undisputed that Nationstar held the note on behalf of HSBC as its loan servicer, reunification of the note and deed of trust was not required.
Finally, Danelle contends that the language of the PSA irrefutably establishes that Nationstar lacked authority to modify the underlying loan. See FMR 13(7)(d) (providing that, if the beneficiary of the deed of trust is represented by a third party at the mediation, the third party must produce proof of its authority to represent the beneficiary and negotiate a loan modification). But as the district court concluded below, Danelle's reading of the PSA is plainly incorrect. She points to a provision of the agreement stating that "the servicer shall not permit any modification
I of any material term of any Mortgage Loan," but she ignores the crucial qualifying language immediately preceding the quoted passage providing that servicers are not authorized to allow modification of the loan "unless the Mortgagor is in default with respect to the Mortgage Loan." (Emphasis I added.) Because it is undisputed that Ralph-as the sole obligor under the note-was in default under the mortgage loan, Danelle's argument on this point is without merit.
In light of the foregoing, Danelle has failed to demonstrate that reversal is warranted, and we therefore affirm the district court's order directing the issuance of a foreclosure certificate.
Insofar as the parties raise arguments that are not specifically addressed in this order, we have considered the same and conclude that they either do not present a basis for relief or need not be reached given the disposition of this appeal.
Gibbons, C.J., Tao, J., Bulla, J.
Hon. Kathleen M. Drakulich, District Judge