Nevada Supreme Court Opinions

			Cases Interpreting Nevada Law

			Holt v. Regional Trustee Services Corp. Thursday, 15 December 2011

			After a denial of a FM Certificate, a foreclosing entity can institute a new foreclosure action

			Preliminary Injunctions - Real Property - Claim Preclusion

			Foreclosure Mediation Rules

127nevadvopno80.pdf

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			Cite as: Holt v. Regional Trustee Services Corp. 127 Nev. Adv. Op. No. 80 December 15, 2011 IN THE SUPREME COURT OF THE STATE OF NEVADA No. 56479 KARL HOLT AND FRANCES HOLT, Appellants, vs. REGIONAL TRUSTEE SERVICES CORPORATION, A FOREIGN ENTITY; ONE WEST BANK, FSB, A FOREIGN ENTITY; AND VERISE CAMPBELL, IN HER OFFICIAL CAPACITY AS DEPUTY DIRECTOR, NEVADA FORECLOSURE MEDIATION PROGRAM, Respondents. Appeal from a district court order denying a motion for preliminary and permanent injunctions in a real property action. Eighth Judicial District Court, Clark County; Michelle Leavitt, Judge. Affirmed. Law Offices of Roderic A. Carucci and Roderic A. Carucci, Reno, for Appellants. Wright, Finlay & Zak, LLP, and Donna M. Osborn and Robin Prema Wright, Las Vegas, for Respondents Regional Trustee Services Corporation and One West Bank, FSB. Fennemore Craig, P.C., and Christopher H. Byrd, Las Vegas, for Respondent Verise Campbell. BEFORE THE COURT EN BANC. OPINION By the Court, PICKERING, J.: Since 2009 Nevada law has required loan-modification mediation on homeowner request before a nonjudicial foreclosure sale can proceed on an owner-occupied residence. Compliance is evidenced by a Foreclosure Mediation Program (FMP) certificate that mediation has concluded or been waived. This certificate must be recorded for a valid foreclosure sale to occur. On this appeal, we consider whether a lender who has been denied an FMP certificate for failing to mediate in good faith can reinitiate foreclosure by means of a new notice of default and election to sell and rescission of the original, thereby restarting the FMP process. In the circumstances of this case, we conclude that it can. We therefore affirm the district court’s refusal to enjoin the nonjudicial foreclosure initiated by the second notice of default and election to sell and its further order directing the parties to return to FMP mediation. I. Appellants Karl and Frances Holt signed a $2,350,000 note secured by a first deed of trust on their home. Respondents Regional Trustee Services Corporation (RTSC) and One West Bank, FSB are the trustee and beneficiary, respectively, of the deed of trust.[1] The Holts have not made a house payment since September of 2008; as of July, 2010, their arrearages stood at more than $360,000. RTSC initiated nonjudicial foreclosure on July 16, 2009, by recording a notice of default and election to sell (the 2009 NOD). The Holts elected mediation under the then-new FMP. When no one from the lender’s side appeared at the scheduled mediation, the mediator declared RTSC in bad faith. The Holts then filed a petition for judicial review in district court pursuant to NRS 107.086(5) to redress RTSC’s bad faith non-participation in the FMP process. The petition named only RTSC as respondent and sought loan modification as sanctions, specifically, reduced principal (from $2,345,000 to $1,300,000), lower interest (from 6.5% to 2%), and a change in terms (from “interest only” to fully amortized over 30 years). The matter was assigned to Judge Donald M. Mosley, who ordered a rescheduled mediation at RTSC’s expense. Once again, no one from the lender’s side appeared, and the Holts returned to district court, where they renewed their request for sanctions. After hearing argument but without taking evidence, Judge Mosley declined the Holts’ request for court-ordered loan modification. He also rejected RTSC’s excuses (miscommunication and an incompetent agent) for missing the rescheduled mediation and declared RTSC in bad faith. As sanctions, he directed that RTSC be denied the FMP certificate needed to conduct a valid foreclosure sale and awarded the Holts their attorney fees. Orally, Judge Mosley limited his order to the foreclosure sale initiated by the 2009 NOD. He emphasized that denying the FMP certificate “doesn’t mean that [RTSC] can’t go through the process again of trying to foreclose.” The Holts’ counsel acknowledged the point (“I understand that you’re not allowing an issuance of the certification, so the foreclosure cannot proceed unless they start over again”), and the hearing ended with this recap: COUNSEL FOR THE HOLTS: So as I understand it . . . , this matter is concluded . . . . Sanctions were ordered for $3144.20 [in attorney fees]. There will be no certificate issued by the Mediation Administrator; therefore, they can’t proceed with foreclosure? THE COURT: On this one. They can restart the process. COUNSEL FOR THE HOLTS: They can start all over again. Terse “findings of fact, conclusions of law and order” followed. These do not mention the oral limitation Judge Mosley put on his order, stating only: (1) “the Respondent, Regional Trustee Services, Corp. was in bad faith in that they failed to attend the [rescheduled] mediation”; (2) the Holts “are to be reimbursed for costs and expenses in the amount of $3,144.20”; and (3) “Letter of Certification shall not issue.” Neither side appealed. Meanwhile, the Holts continued to live in their house without making payments, and on March 1, 2010, RTSC reinitiated nonjudicial foreclosure by recording a second notice of default and election to sell (the 2010 NOD). The 2010 NOD encompassed the monthly payment defaults declared in the 2009 NOD (September 2008 to July 2009) and added those that had occurred since (from July 2009 forward). RTSC also recorded a notice of rescission of the 2009 NOD that stated, “this rescission shall not in any manner be construed as waiving or affecting any breach or default—past, present or future—under said Deed of Trust, . . . but is, and shall be deemed to be, only an election, without prejudice, not to cause a sale to be made pursuant to said [2009] Notice of Default . . . .” The Holts responded to the 2010 NOD by filing a second action in district court, seeking to enjoin RTSC and One West from pursuing foreclosure under it. They argued that the order denying the FMP certificate carries claim- and issue-preclusive effect and permanently prevents foreclosure, even though they continue to default on their monthly house payments. In addition, the Holts elected FMP mediation as to the 2010 NOD “out of an abundance of caution,” to protect their rights should their first line of defense—claim and issue preclusion—fail. This second suit, which gives rise to this appeal, was assigned to Judge Michelle Leavitt. After briefing and argument, she denied the Holts’ application for injunctive relief and ordered FMP mediation to take place within 90 days before the originally assigned mediator. The Holts appealed. Mediation has been stayed pending briefing, argument, and decision of the matter. While three loan modification mediations have been scheduled, therefore, none has actually occurred. II. Denial of an FMP certificate does not, without more, permanently preclude foreclosure. The judicial review proceeding before Judge Mosley halted the foreclosure sale noticed by the 2009 NOD, but it did not preclude RTSC and One West from restarting the nonjudicial foreclosure process via the 2010 NOD. The Holts’ contrary argument misapprehends the claim- and issue-preclusion doctrines, as well as the nature of nonjudicial foreclosure and FMP-mediation and judicial-review proceedings. Additionally, claim and issue preclusion cannot enlarge an order that the rendering judge expressly limited. Given the limitations Judge Mosley placed on his sanction order, to the extent the order carries preclusive effect, it inhibits the Holts’ challenge to the 2010 NOD, not the 2010 NOD itself. Because Judge Leavitt neither committed an error of law nor abused her discretion in denying the Holts’ application for injunctive relief, see University Sys. v. Nevadans for Sound Gov’t, 120 Nev. 712, 721, 100 P.3d 179, 187 (2004), we affirm. A. Claim and issue preclusion “‘protect the finality of decisions and prevent the proliferation of litigation,’ but do not apply unless specific requirements are met.” Redrock Valley Ranch v. Washoe County, 127 Nev. ___, ___, 254 P.3d 641, 646 (2011) (quoting Littlejohn v. United States, 321 F.3d 915, 919 (9th Cir. 2003)). “Among other requirements, for [claim] preclusion to attach . . . ‘the subsequent action [must be] based on the same claims or any part of them that were or could have been brought in the first case.’” Id. (third alteration in original) (quoting Five Star Capital Corp. v. Ruby, 124 Nev. 1048, 1054-55, 194 P.3d 709, 713 (2008)). For “issue preclusion to attach, the issue decided in the prior [proceeding] must be identical to the issue presented in the current [proceeding],” id. (alterations in original) (quotation omitted), and have been “‘actually litigated and determined by a valid and final judgment [in which] the determination [was] essential to the judgment.’” In re Sandoval, 126 Nev. ___, ___, 232 P.3d 422, 424 (2010) (quoting Restatement (Second) of Judgments § 27 (1982)). Claim and issue preclusion can apply in the administrative context “[w]hen an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate,” United States v. Utah Constr. Co., 384 U.S. 394, 421-22 (1966),[2] and to defenses and compulsory counterclaims, but “only to defenses which were available in the prior action” (claim preclusion), 18 James Wm. Moore, Moore’s Federal Practice § 131.21[5][a], at 131-53–131-54 (3d ed. 2011), and actually asserted and necessarily decided (issue preclusion), id. § 131.21[5][b], at 131-55. The Holts argue that the judicial review proceedings before Judge Mosley extinguished RTSC’s and One West’s “claim” to a nonjudicial foreclosure remedy for the Holts’ defaults on the note. But as the name implies, nonjudicial foreclosure is not a judicial “action,” giving rise to a claim or defense of foreclosure based on a mediation election and the subsequent institution of FMP judicial review proceedings. See NRS 40.430(6)(e). It “occurs outside of the ‘range of procedures incident to litigation,’ and instead involves act[s] unrelated to court authority.” Tom v. GMAC Mortgage, LLC, No. 10-00653 SOM/BMK, 2011 WL 2133705, at 10 (D. Haw. May 25, 2011) (quoting Young v. Allstate Ins. Co., 198 P.3d 666, 675 (Haw. 2008)). RTSC’s and One West’s nonjudicial foreclosure option—subject to the FMP requirements—was neither a defense to, or obligatory counterclaim in, the judicial review proceedings the Holts brought as to RTSC’s bad faith. Ordinarily, a lender pursuing nonjudicial foreclosure has the option under the loan documents “whether to declare a default, whether and when to accelerate, and whether, having chosen to take advantage of any of its [nonjudicial] remedies, to rescind the process before its completion.” Trident Center v. Connecticut General Life Ins., 847 F.2d 564, 567 (9th Cir. 1988). A notice of rescission renders moot disputes concerning the notice of default or its timing. Coley v. Accredited Home Lenders, Inc., No. 4:10CV01870 JLH, 2011 WL 1193072, at 4 (E.D. Ark. Mar. 29, 2011) (“Whether the Notice of Default was valid is moot because the nonjudicial foreclosure sale described in the notice was cancelled. Thus, [the party exercising the power to sell] would be required by law to file a new Notice of Default and Intention to Sell before a sale could take place.”); Sakugawa v. Mortgage Electronic Registration Systems, Inc., No. 10-00028 JMS/BMK, 2011 WL 776051, at 6 (D. Haw. Feb. 25, 2011) (“the Notice of Rescission moots Plaintiff’s claims for equitable relief—there is no existing controversy regarding the Notice of Foreclosure because it was rescinded. . . . Although nothing prevents anyone from seeking foreclosure on the subject property again . . . , any defects in that subsequent action would give rise to a separate claim from what is alleged in the Complaint, which is based on this particular Notice of Foreclosure.”); Tabb v. One West Bank, FSB, No. 3:10-CV-855-ST, 2011 WL 4448752, at 8 (D. Or. Aug. 26, 2011) (quoting Coley and Sakugawa with approval). Rescission and renotice are not, as the Holts declaim, without lender consequence. Taking this path resets the right-to-cure and other time periods provided by law for the debtor’s protection, causing delay and additional losses, to the extent the property is financially under water, at the lender’s expense. See NRS 107.080(2)(b), (3). NRS 107.086 adds mediation and procurement of an FMP mediation certificate to the statutory prerequisites for a valid nonjudicial foreclosure sale under NRS 107.080, when owner-occupied residential property is involved. See NRS 107.086(2)(c) (a “trustee shall not exercise a power of sale . . . unless the trustee . . . [c]auses to be recorded [an FMP certificate stating either] that no mediation is required [or that] mediation has been completed in the matter”). If the homeowner elects mediation, the beneficiary of the deed of trust must participate in mediation in good faith and produce the documents and information specified in NRS 107.086(4) and (5) and FMR 11 to earn a certificate permitting foreclosure sale.[3] See Pasillas v. HSBC Bank USA, 127 Nev. ___, ___, 255 P.3d 1281, 1286-87 (2011). The petition for judicial review affords a way to challenge compliance with the statutory attendance, production, and good faith requirements. FMR 21. But the proceeding is expedited, FMR 21(2), does not require personal service, FMR 21(3), and exists “for the limited purposes of determining bad faith, enforcing agreements made between the parties within the Program, including temporary agreements, and determining appropriate sanctions pursuant to NRS Chapter 107 as amended.” FMR 21(1). When “an initial action [is] circumscribed by . . . limitations [that] go to the very nature of the first action,” “ordinary claim-preclusion rules” do not apply. 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4412, at 305 (2d ed. 2002). Nothing in the FMP statutes or rules suggests that denial of an FMP certificate permanently costs a lender the security afforded by the deed of trust. As Pasillas establishes, 127 Nev. at ___, 255 P.3d at 1286-87, denial of an FMP certificate follows automatically from a finding the statutory FMP requirements have been shirked, see also Leyva v. National Default Servicing Corp., 127 Nev. ___, ___, 255 P.3d 1275, 1278-79 (2011) (such requirements are strictly construed). It is the bare minimum sanction; a district court abuses its discretion if it does not order the FMP certificate withheld for noncompliance with the FMP requirements. Pasillas, 127 Nev. at ___, 255 P.3d at 1286-87. The goal of foreclosure mediation is to produce an agreed-upon loan modification. To credit the Holts’ argument that any omission that leads to denial of an FMP certificate should cost the lender its security and give the homeowner the property free and clear would convert the mediation from a cooperative endeavor to an antagonistic one and shift the focus from finding consensus to finding fault. If this is the purpose of the FMP, the Legislature needs to say so directly.[4] While sanctions conceivably could be imposed that would wipe out the lender’s security—we do not decide this issue since it is not presented—it would be up to the petitioner to allege and establish the propriety of such drastic sanctions and the reviewing court to impose them explicitly. But the Holts, the petitioners here, did not request, nor did Judge Mosley order, forfeiture of the security provided by the deed of trust as a sanction in this case. Because we do not equate denial of an FMP certificate with loss of the right to exercise a power of sale under a new notice of default, the Holts’ claim- and issue-preclusion arguments fail. RTSC’s and One West’s[5] nonjudicial foreclosure rights were neither defenses to the Holts’ claims, nor the subject of compulsory counterclaims “that were or could have been brought” in the judicial review proceedings before Judge Mosley. Five Star Capital, 124 Nev. at 1054-55, 194 P.3d at 713; see 18 Moore’s Federal Practice, supra, § 131.24[5][a], at 131-79 (“Th[e] ‘use or lose’ approach [of claim preclusion doctrine] may be unworkable in instances in which the court hearing the initial action does not have jurisdiction to hear certain claims or to award certain types of relief, or the nature of the claims and relief sought is limited by statute.” (citing Restatement (Second) of Judgments § 26(c) & cmt. c (1982))); see also G.C. Wallace, Inc. v. Dist. Ct., 127 Nev. ___, ___, 262 P.3d 1135, ___ (2011) (landlord who prevailed in summary eviction proceeding in justice court was not precluded from suing separately for unpaid rent; it was “‘the sense of the [statutory] scheme that the plaintiff should be permitted to split his claim’” (quoting Restatement (Second) of Judgments § 26(1)(d) (1982)). And as for issue preclusion, the only issue “actually litigated and determined” in the judicial review proceeding was that RTSC acted in bad faith and would be penalized by having to pay the Holts’ attorney fees and being denied an FMP certificate. As the right to foreclose based on the Holts’ continuing defaults was not at issue, issue preclusion does not apply. In re Sandoval, 126 Nev. at ___, 232 P.3d at 424. B. An additional basis exists for upholding Judge Leavitt’s refusal to enjoin RTSC and One West from pursuing foreclosure under the 2010 NOD: “[T]he general rule of claim preclusion does not apply if the court in the first action expressly reserves the right to maintain a second action” or defense, 18 Federal Practice and Procedure, supra, § 4413, at 314 (citing Restatement (Second) of Judgments § 26(1)(b)); “[t]he same rule should hold for issue preclusion.” Id. § 4424.1, at 642; see Central States, SE and SW Areas Pen. v. Hunt Truck, 296 F.3d 624, 629 (7th Cir. 2002). In declaring RTSC in bad faith, awarding fees, and directing that the certificate not issue, Judge Mosley expressly stated that RTSC could restart the foreclosure process. The Holts ignore this statement (and their counsel’s acknowledgment of it), perhaps assuming it is irrelevant since it was oral and did not make it into the written findings of fact and conclusions of law. But a court may consult the record and proceedings giving rise to another court’s order, at least when the latter is ambiguous. First Union Nat. Bank v. Pictet Overseas Trust, 477 F.3d 616, 620 (8th Cir. 2007) (citing Oklahoma v. Texas, 256 U.S. 70, 88 (1921)); see City of Lakewood v. Pierce County, 30 P.3d 446, 450-51 (Wash. 2001) (oral pronouncements that were consistent with a judgment may be considered in construing it). As we have discussed, nothing in the written order directing denial of an FMP certificate requires the sweeping preclusion for which the Holts contend; the written order’s silence on the point at the very least renders it ambiguous. This made it appropriate for Judge Leavitt to look to Judge Mosley’s oral statements in interpreting the scope of his sanction order. Because sanction proceedings tend to be summary, courts proceed cautiously in attributing preclusive effect to them. See Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1197 (3d Cir. 1993); Cohen v. Lupo, 927 F.2d 363, 365 (8th Cir. 1991); but see Reilly v. Natwest Markets Group, Inc., 178 F. Supp. 2d 420, 425-26 (S.D.N.Y. 2001) (applying claim preclusion to bar subsequent litigation requesting expanded sanctions for conduct for which lesser Fed. R. Civ. P. 37 sanctions had been awarded in prior litigation). To the extent the judicial review proceedings before Judge Mosley may command preclusive effect, the limits he placed on his order defeat the Holts’ position on this appeal. Claim- and issue-preclusion doctrines are not concerned with whether the decision in the prior proceeding was right or wrong.[6] If the Holts were aggrieved by Judge Mosley’s failure to impose harsher sanctions than he did, the remedy was to appeal his order, not to seek to enlarge it by bringing a second proceeding before a different district court judge. See Hudson v. Hedge, 27 F.3d 274, 276 (7th Cir. 1994) (plaintiff “cannot use a new suit to contend that the disposition of the first was mistaken”). C. The Holts’ final argument contests Judge Leavitt’s order directing that FMP mediation occur. Given that the Holts specifically requested mediation as to the 2010 NOD, albeit “out of an abundance of caution,” we find no error in this order. We therefore dissolve the stay and affirm. SAITTA, C.J., and DOUGLAS, CHERRY, GIBBONS, HARDESTY, and PARRAGUIRRE, JJ., concur. ********FOOTNOTES******** [1] We base this statement on the representations made to the district court. The Holts dispute One West’s beneficiary status but did not develop the issue in either of the two district court proceedings in this matter. This issue may be fleshed out when mediation occurs. [2] The Holts stop short of arguing that the statutorily mandated mediation amounts to an administrative adjudication, with claim- and issue-preclusive effect of its own. See Guzman v. Laguna Development Corp., 219 P.3d 12, 16 (N.M. Ct. App. 2009) (the purpose of mediation “is not to adjudicate or issue findings [but] instead . . . to define, evaluate, make recommendations on issues, and try to settle issues”; this fact, combined with “the inherently informal nature of mediation proceedings itself argues against applying res judicata to the end product of the process”). [3] The Foreclosure Mediation Rules became effective on June 30, 2009, and have been amended and renumbered since. The amendments do not change the substance of our analysis; for clarity, the citations in the text are to the current Foreclosure Mediation Rules. [4] The FMR were amended during the pendency of this appeal to limit the potential abuse of the notice of rescission/new notice of default option, by suspending the lender’s right to pursue it after the homeowner has elected FMP mediation but before the mediation has occurred, unless the homeowner consents. FMR 8(3). Notably, the suspension is temporary—pending mediation—not permanent. [5] Claim and issue preclusion generally require identity of parties. Five Star Capital, 124 Nev. at 1054-55, 194 P.3d at 713. Because we reject the Holts’ claim- and issue-preclusion arguments on other bases, we do not address the Holts’ failure to join One West as an additional respondent with RTSC in the judicial review proceeding and whether this would defeat preclusion against One West. [6] The Holts’ failure to appeal the order entered by Judge Mosley also makes procedurally improper their criticism of the Eighth Judicial District Court’s assignment of all FMP judicial review proceedings to a single district court judge. See also EDCR 1.30(b)(5) (requiring the chief judge to “[m]ake regular and special assignments of all judges”).

			Walters v. Dist. Ct. Thursday, 13 October 2011

			NRS Chapter 40 for seeking a deficiency judgment based upon a breach of guaranty.

127nevadvopno66.pdf

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Cite as: Walters v. Dist. Ct.
127 Nev. Adv. Op. No. 66
October 13, 2011

IN THE SUPREME COURT OF THE STATE OF NEVADA

No. 55912

WILLIAM T. WALTERS,
Petitioner,
    vs.
THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK, AND THE HONORABLE MARK R. DENTON, DISTRICT JUDGE,
Respondents,
    and
FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR COMMUNITY BANK OF NEVADA,
Real Parties in Interest.

            Original petition for a writ of mandamus or prohibition challenging district court orders denying a motion for partial summary judgment and granting, in part, a motion for summary judgment in a breach of a loan guaranty action.
            Petition denied.

Bailey Kennedy and Dennis L. Kennedy, Kimberly R. McGhee, and Craig A. Henderson, Las Vegas, for Petitioner.
McDonald Carano Wilson LLP and Jeffrey A. Silvestri, Andrew P. Gordon, and Lisa M. Wiltshire, Las Vegas, for Real Parties in Interest.

BEFORE THE COURT EN BANC.[1]

OPINION

By the Court, DOUGLAS, J.:
This original petition for a writ of mandamus or prohibition presents the issue of whether the counterclaim, cross-claim, and written motion setting the grounds for the application and the relief sought satisfies the requirements of NRS Chapter 40 for seeking a deficiency judgment based upon a breach of guaranty. We conclude that it does and deny petitioner William T. Walters’ request for extraordinary relief.

FACTS AND PROCEDURAL HISTORY

            This case involves the sale of Stallion Mountain Golf Course for $24,480,000 to a group of 26 investors (the Borrowers) in February 2006. To complete the purchase, the Borrowers contributed $9,230,000 in cash and financed the remaining balance owed ($15,250,000) through a nonrecourse loan (the Loan) with Community Bank of Nevada (CBN). In order to facilitate the sale, Walters entered into a separate guaranty with CBN where he personally guaranteed the Loan. In Walters’ guaranty, he expressly waived the requirements of NRS 40.430 (the one-action rule), “which provides that a creditor can pursue only one action to recover a debt secured by a mortgage or lien on real property.”[2] McDonald v. D.P. Alexander, 121 Nev. 812, 814, 123 P.3d 748, 749 (2005).
            Prior to the Borrowers’ default and the eventual foreclosure of Stallion Mountain, Walters filed a complaint in the district court in May 2008, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing against CBN.[3] Thereafter, the Borrowers failed to make the monthly payment on the Loan in July 2008, and CBN recorded a notice of breach and election to sell as evidence of its intent to foreclose on Stallion Mountain in August 2008.
            In September 2008, CBN filed its initial answer, counterclaim, cross-claim, and third-party complaint in response to Walters’ complaint. In its counterclaim, CBN alleged that Walters breached his personal guaranty. Specifically, CBN asserted that Walters “absolutely and unconditionally agree[d] to pay the indebtedness of the Borrowers under the Loan” and his failure to pay was a default on his guaranty. In December 2008, a trustee’s sale was held for Stallion Mountain, and CBN purchased the property with a credit bid of $5 million.
            In April 2009, CBN filed an answer, counterclaim, cross-claim, and third-party complaint in response to Walters’ second amended complaint. In the First Cause of Action of the counterclaim, CBN asserted breach of guaranty against Walters. CBN further maintained that Walters waived the one-action rule and that he defaulted on his guaranty. In its cross-claim, CBN sought to recover the deficiency against the Borrowers pursuant to NRS 40.455(1). CBN alleged a deficiency on the amount due on the Loan and the “amount of the credit bid in an amount to be proved-up at trial.”
            CBN filed a motion for summary judgment on its breach of guaranty action against Walters and sought damages of $12,470,919.37, which, at the time, was the remaining amount of the unpaid balance of the Loan on Stallion Mountain. In June 2009, Walters filed a motion for partial summary judgment on CBN’s counterclaim for breach of the guaranty arguing that (1) CBN failed to apply for a deficiency judgment within six months after the foreclosure pursuant to NRS 40.455(1) (the anti-deficiency statute), (2) CBN’s failure afforded him the protection of the anti-deficiency statutes pursuant to NRS 40.495(3), and (3) CBN was barred from recovering any amount against him under the guaranty. This motion was filed six months and one day after the date of the Stallion Mountain foreclosure. The district court denied the motion, finding that CBN’s breach of guaranty counterclaim served as an “application” for relief as contemplated under NRS 40.455 because CBN framed the deficiency issue in moving for summary judgment against Walters on its breach of guaranty counterclaim. Thus, the district court concluded that CBN’s counterclaim and motion for summary judgment met the requirements of an “application” for deficiency under NRS 40.455. The court also concluded that CBN was not seeking double recovery as it clearly stated in its motion for summary judgment that it was giving Walters credit for the sale price of Stallion Mountain.
            In August 2009, the district court granted in part CBN’s motion for summary judgment, concluding that no genuine issues of material fact existed as to Walters’ guaranty liability to CBN. However, the district court concluded that factual issues still remained as to the amount of Walters’ liability. The court ordered a hearing to determine the fair market value of Stallion Mountain in order to establish the amount of Walters’ liability under the guaranty and ensure that Walters received appropriate credit for the value of the property as applied to his guaranty.
            The Nevada Financial Institutions Division subsequently closed CBN and real party in interest, Federal Deposit Insurance Corporation (FDIC), has acted as receiver since that time. Walters now petitions this court for a writ compelling the district court to vacate its partial summary judgment in favor of CBN, to vacate its decision denying Walters’ motion for partial summary judgment, and to preclude CBN from recovering any amount from Walters under his guaranty.

DISCUSSION

            Walters argues that extraordinary writ relief is appropriate because the district court was required to grant his motion for partial summary judgment and deny CBN’s motion, based on CBN’s failure to apply to the district court for a deficiency judgment within the statutory six-month time period. As a result, CBN is barred as a matter of law from recovering any amount under the guaranty.[4] We disagree and deny Walters’ petition.
            Both mandamus and prohibition are extraordinary remedies, and whether a petition for extraordinary relief will be considered is solely within this court’s discretion. See Smith v. District Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991). Neither writ will issue when the petitioner has “a plain, speedy and adequate remedy in the ordinary course of law.” NRS 34.170, 34.330. This court will only consider writ petitions challenging a district court denial of a motion for summary judgment when no factual dispute exists and summary judgment is clearly required by a statute or rule, or an important issue of law requires clarification. Smith v. District Court, 113 Nev. 1343, 1345, 950 P.2d 280, 281 (1997).
The district court did not act arbitrarily or capriciously in entering summary judgment in favor of CBN on its breach of guaranty counterclaim
            According to CBN, it clearly asserted a claim that comported with NRS 40.459 by calculating the amount Walters owed as a result of the deficiency (total indebtedness less the property’s fair market value). We agree.
            “Statutory interpretation is a question of law that we review de novo, even in the context of a writ petition.” International Game Tech. v. Dist. Ct., 124 Nev. 193, 198, 179 P.3d 556, 559 (2008). “‘Where the language of a statute is plain and unambiguous and its meaning clear and unmistakable, there is no room for construction, and the courts are not permitted to search for its meaning beyond the statute itself.’” Madera v. SIIS, 114 Nev. 253, 257, 956 P.2d 117, 120 (1998) (quoting Erwin v. State of Nevada, 111 Nev. 1535, 1538-39, 908 P.2d 1367, 1369 (1995)).
            The parties dispute whether CBN’s counterclaim, cross-claim, and summary judgment motion, which asserted a deficiency against Walters, met NRS 40.455(1)’s requirements that a judgment creditor apply for a deficiency judgment within six months after a foreclosure sale. NRS 40.455(1) states:
Except as otherwise provided in subsection 3, upon application of the judgment creditor or the beneficiary of the deed of trust within 6 months after the date of the foreclosure sale or the trustee’s sale held pursuant to NRS 107.080, respectively, and after the required hearing, the court shall award a deficiency judgment to the judgment creditor or the beneficiary of the deed of trust if it appears from the sheriff’s return or the recital of consideration in the trustee’s deed that there is a deficiency of the proceeds of the sale and a balance remaining due to the judgment creditor or the beneficiary of the deed of trust, respectively.
The statute requires an application within six months after the foreclosure sale but does not state that it must be specifically labeled as a deficiency judgment application as Walters asserts. Walters fails to argue persuasively that CBN’s motion for summary judgment did not meet the application requirement. Although NRS 40.455(1) does not state how an application should be made, NRCP 7(b)(1) supports CBN’s argument that its motion for summary judgment served as an application for a deficiency as required by NRS 40.455(1). NRCP 7(b)(1) provides that
[a]n application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought. The requirement of writing is fulfilled if the motion is stated in a written notice of the hearing of the motion.
Here, CBN’s motion for summary judgment meets the requirements of NRCP 7(b)(1) as an application because it was made in writing, set forth in particularity the grounds for the application, and set forth the relief sought. Under the clear and unambiguous language of NRS 40.455(1), an application must be made within six months, and CBN’s application was well within that time frame. The trustee’s sale was conducted on December 8, 2008. The counterclaim and cross-claim were filed April 13, 2009, within six months of the date of the trustee’s sale. The district court also found that CBN’s motion for summary judgment constituted an application made within six months as required under NRS 40.455(1). Based on this determination, the district court concluded that CBN was not barred from attempting to prove a deficiency.
            Having concluded that CBN complied with the deficiency application requirements of NRS Chapter 40, we next address Walters’ contention that CBN is attempting double recovery. In Bonicamp v. Vasquez, this court noted that “the one-action rule prohibits first seeking the personal recovery and then attempting, in an additional suit, to recover against the collateral.” 120 Nev. 377, 383, 91 P.3d 584, 587 (2004). Further, in McDonald v. D.P. Alexander, this court stated that “the purpose behind the one-action rule in Nevada is to prevent harassment of debtors by creditors attempting double recovery by seeking a full money judgment against the debtor and by seeking to recover the real property securing the debt.” 121 Nev. at 816, 123 P.3d at 751. There may also be potential of double recovery when a guarantor waives the one-action rule pursuant to NRS 40.495(2); however, double recovery is not an issue in the instant case. Here, the district court found the fact that CBN factored in its $5 million bid on Stallion Mountain into the amount Walters owed under the guaranty in its cross-claim “to be a clear recognition that CBN was not seeking a double recovery.” Additionally, the district court planned to determine the fair market value of Stallion Mountain on the date of the foreclosure sale and the amount Walters owes on his guarantee at trial or a deficiency hearing, as outlined in its Order Granting in Part Community Bank of Nevada’s Motion for Summary Judgment dated November 25, 2009.[5]
            Accordingly, we deny Walters’ petition for a writ of mandamus or prohibition.[6]

SAITTA, C.J., and CHERRY, GIBBONS, HARDESTY, and PARRAGUIRRE, JJ., concur.

**********FOOTNOTES**********

[1]        The Honorable Kristina Pickering, Justice, voluntarily recused herself from participation in the decision of this matter.
[2]        The applicable waiver in the guaranty states in pertinent part:
Waiver of One-Action Rule, Anti-Deficiency Rules and Marshalling. Guarantor hereby irrevocably waives to the maximum extent permitted by applicable law, all rights under Nevada Revised Statues 40.430 and 40.495 . . . . Guarantor hereby waives to the maximum extent permitted by applicable law any “anti-deficiency” law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender’s commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale . . . .
[3]        Walters also asserted claims for waste and indemnity and contribution against several other parties, who are not part of this appeal.
[4]        Walters also argues that although he waived the one-action rule by permitting CBN to bring an action on the guaranty for the full amount of the debt without first having to exhaust the security through foreclosure, CBN’s decision to foreclose on Stallion Mountain triggered NRS 40.495(3), thereby obligating CBN to comply with Nevada’s anti-deficiency statutes. We need not address the issue of waiver because we conclude that CBN properly complied with NRS 40.455(1) by making an application to the district court for deficiency judgment within six months of the foreclosure.
[5]        In view of our holding, we need not address the other issues raised by the parties.
[6]        In light of this decision, we vacate the stay imposed by our July 22, 2010, order.

			Daane v. Dist. Ct. Thursday, 29 September 2011

			Foreclosure Mediation

127nevadvopno59.pdf

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			Cite as: Daane v. Dist. Ct. 127 Nev. Adv. Op. No. 59 September 29, 2011 IN THE SUPREME COURT OF THE STATE OF NEVADA No. 57020 WILLIAM DAANE, Petitioner, vs. THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA, IN AND FOR THE COUNTY OF CLARK; AND THE HONORABLE DONALD M. MOSLEY, DISTRICT JUDGE, Respondents, and CR TITLE SERVICES, INC.; AND CITIMORTGAGE, INC., Real Parties in Interest. Original petition for a writ of prohibition that seeks to preclude further foreclosure mediation proceedings with respect to petitioner’s residence. Petition denied. Law Office of Jacob L. Hafter & Associates and Jacob L. Hafter and Michael K. Naethe, Las Vegas, for Petitioner. Pite Duncan, LLP, and Gregg A. Hubley and Laurel I. Handley, Las Vegas, for Real Parties in Interest. BEFORE THE COURT EN BANC. OPINION By the Court, SAITTA, C.J.: In this opinion, we address a single issue—specifically, whether a writ of prohibition is available to preclude Nevada’s Foreclosure Mediation Program from conducting further proceedings with respect to petitioner William Daane’s residence. Because Daane has an adequate remedy in the ordinary course of law, we conclude that a writ of prohibition is inappropriate at this time. We therefore deny the petition. FACTS AND PROCEDURAL HISTORY Daane refinanced the mortgage on his residence and ultimately fell into default on the new loan. Real party in interest CR Title Services, Inc., the trustee of the deed of trust, filed a notice of default to initiate the foreclosure process. Daane opted to participate in the Foreclosure Mediation Program. See NRS 107.086; Foreclosure Mediation Rules (FMRs). Shortly thereafter, the mediation was conducted. At the mediation, however, real party in interest CitiMortgage, Inc., the beneficiary of the deed of trust, failed to produce necessary documents and sent a representative that lacked authority to negotiate. Consequently, the mediator determined that CitiMortgage participated in the mediation in bad faith. Daane filed a petition for judicial review in the district court, seeking a finding that CitiMortgage had participated in bad faith. After a hearing on the matter, the district court found that CitiMortgage acted in bad faith, requiring it to reimburse Daane for his attorney fees and costs. CitiMortgage was also denied a letter of certification. A couple of hours after the hearing, CR Title filed a second notice of default, reinitiating the foreclosure process. Daane again elected for mediation in the Foreclosure Mediation Program. He then brought this petition for a writ of prohibition, along with a request to stay the foreclosure proceedings, which we granted. Daane now seeks to preclude the Foreclosure Mediation Program from proceeding with further mediations or issuing a letter of certification. DISCUSSION Our inquiry with a writ petition necessarily begins with whether we should exercise our discretion to entertain the petition. Daane primarily argues that his petition warrants our consideration because he does not have an adequate remedy in the ordinary course of law. We disagree. A writ of prohibition is an extraordinary remedy, and therefore, the decision to entertain the petition lies within our discretion. Cheung v. Dist. Ct., 121 Nev. 867, 869, 124 P.3d 550, 552 (2005). Such a writ is available to “arrest[ ] the proceedings of any tribunal, corporation, board or person exercising judicial functions, when such proceedings are without or in excess of the jurisdiction of such tribunal, corporation, board or person.” NRS 34.320. A writ of prohibition “may be issued only . . . where there is not a plain, speedy and adequate remedy in the ordinary course of law.” NRS 34.330. We have consistently held, “on several occasions, that the right to appeal is generally an adequate legal remedy that precludes writ relief.” Pan v. Dist. Ct., 120 Nev. 222, 224, 88 P.3d 840, 841 (2004). The petitioner bears “the burden of demonstrating that extraordinary [writ] relief is warranted.” Id. at 228, 88 P.3d at 844. Daane asserts that NRS 107.086 and the FMRs prevent CitiMortgage from reinitiating the foreclosure process by issuing a second notice of default after the district court found bad faith on CitiMortgage’s behalf and denied it a letter of certification. He therefore seeks a writ of prohibition to preclude the Foreclosure Mediation Program from conducting further proceedings with respect to his residence. We are unpersuaded, however, that extraordinary relief is warranted at this time. After the currently scheduled second mediation is conducted, Daane may file a petition for judicial review with the district court, and an appeal will lie from the district court’s order. NRAP 3A(b)(1) (“An appeal may be taken from . . . [a] final judgment entered in an action or proceeding commenced in the court in which the judgment is rendered.”); FMR 21(1) (“A party to the mediation may file a petition for judicial review with the district court.”); see also Leyva v. National Default Servicing Corp., 127 Nev. ___, ___ n.3, 255 P.3d 1275, 1277 n.3 (2011) (indicating that we have jurisdiction, under NRAP 3A(b)(1), over an appeal from a district court order denying a petition for judicial review in a foreclosure mediation action); Pasillas v. HSBC Bank USA, 127 Nev. ___, 255 P.3d 1281 (2011) (considering an appeal from a district court order denying a petition for judicial review arising in a foreclosure mediation action). Because we have consistently held that the existence of an appeal is an adequate remedy at law barring writ relief, we deny the petition for a writ of prohibition. CONCLUSION We conclude that a writ of prohibition is unwarranted to preclude the foreclosure mediation program from conducting further proceedings with respect to Daane’s residence because he has an adequate remedy in the ordinary course of law. We therefore deny the petition for a writ of prohibition.[1] DOUGLAS, CHERRY, GIBBONS, PICKERING, HARDESTY, and PARRAGUIRRE, JJ., concur. ********FOOTNOTES******** [1] In light of our disposition, we vacate the stay imposed by our January 10, 2011, order.

			Leyva v. National Default Servicing Corp. Thursday, 07 July 2011

			A homeowner, even if he or she is not the named mortgagor, is a proper party entitled to request mediation following a notice of default.

			A party is considered to have fully complied with the statute and rules only upon production of all documents required.

			Required Sanctions

127nevadvopno40.pdf

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			Cite as: Leyva v. National Default Servicing Corp. 127 Nev. Adv. Op. No. 40 July 7, 2011 IN THE SUPREME COURT OF THE STATE OF NEVADA No. 55216 MOISES LEYVA, Appellant, vs. NATIONAL DEFAULT SERVICING CORP.; AMERICA’S SERVICING COMPANY; AND WELLS FARGO, Respondents. Appeal from a district court order denying a petition for judicial review in a foreclosure mediation action. Eighth Judicial District Court, Clark County; Donald M. Mosley, Judge. Reversed and remanded. Crosby & Associates and David M. Crosby and Troy S. Fox, Las Vegas, for Appellant. Snell & Wilmer, LLP, and Gregory A. Brower and Cynthia Lynn Alexander, Las Vegas, for Respondents America’s Servicing Company and Wells Fargo. Wilde & Associates and Gregory L. Wilde, Las Vegas, for Respondent National Default Servicing Corp. BEFORE THE COURT EN BANC. OPINION By the Court, HARDESTY, J.: In this appeal, we consider issues arising out of Nevada’s Foreclosure Mediation Program. First, we must determine whether a homeowner who is not the original mortgagor is a proper party to participate in the program. We conclude that the Foreclosure Mediation statute, NRS 107.086, and the Foreclosure Mediation Rules (FMRs) dictate that a homeowner, even if he or she is not the named mortgagor, is a proper party entitled to request mediation following a notice of default. Second, we must determine if a party is considered to have complied with the applicable statute and FMRs governing document production in a mediation proceeding by producing what the district court referred to as “essential documents.” In this, we address whether substantial compliance satisfies the mandates of the statute and FMRs. Because we conclude that strict compliance is compelled by NRS 107.086(4) and (5), that the assignment offered was defective, and that no endorsement of the mortgage note was provided according to Article 3 of the Uniform Commercial Code, we conclude that Wells Fargo failed to produce the documents required under NRS 107.086(4). Additionally, we recently concluded in Pasillas v. HSBC Bank USA, 127 Nev. ___, ___ P.3d ___ (Adv. Op. No. 39, July 7, 2011), that a party’s failure to produce the enumerated documents required by NRS 107.086 and the FMRs prohibits the district court from directing the program administrator to certify the mediation so that the foreclosure process can proceed. Here, we again conclude that, due to the statute’s and the FMRs’ mandatory language regarding document production, a party is considered to have fully complied with the statute and rules only upon production of all documents required. Failure to do so is a sanctionable offense, and the district court is prohibited from allowing the foreclosure process to proceed. Therefore, we must reverse and remand this case to the district court for it to determine appropriate sanctions against respondents.[1] FACTS AND PROCEDURAL HISTORY Appellant Moises Leyva received and recorded a quitclaim deed in 2007 in exchange for taking over monthly mortgage payments on a residence in Las Vegas. Leyva did not expressly assume the mortgage note, however, and it remained in the original mortgagor’s name, Michael Curtis Ramos. Nonetheless, Leyva made the mortgage payments in Leyva’s name to respondent Wells Fargo’s servicing company for 25 months. Thereafter, Leyva defaulted on the mortgage and, upon receiving a notice of election to sell, decided to pursue mediation through the Foreclosure Mediation Program. Both he and Ramos signed the form electing to mediate. The mediation occurred on September 23, 2009,[2] and Leyva, Ramos, and Wells Fargo were represented by counsel at the mediation. Leyva was present at the mediation, while Ramos was available by telephone. At the mediation, Wells Fargo produced a certified copy of the original deed of trust and mortgage note, on both of which MortgageIT, Inc., not Wells Fargo, was named as the lender, as well as a notarized statement from a Wells Fargo employee asserting that Wells Fargo was in possession of the deed of trust and mortgage note, as well as any assignments thereto. Wells Fargo did not submit copies of any assignments. The parties failed to resolve the foreclosure at the mediation, and the mediator’s statement indicated that Wells Fargo failed to bring the statutorily required documents to the mediation. The mediator did not, however, indicate that Wells Fargo participated in the mediation in bad faith. Leyva then filed a petition for judicial review in district court, claiming that Wells Fargo mediated in bad faith and that it should be sanctioned. After conducting hearings on the petition, the district court found that there is a lack of showing of bad faith on the part of [Wells Fargo] in that all essential documents were provided, contrary to the indication of the mediator, and that [Wells Fargo] otherwise negotiated in good faith notwithstanding the fact that an agreement was not reached. Absent timely appeal, a Letter of Certification shall enter. (Emphasis added.) This appeal followed.[3] DISCUSSION In resolving this appeal, as a preliminary matter, we must determine whether Leyva could properly elect to mediate and participate in the mediation even though he was not a named party on the mortgage note and did not assume the note in his purchase of the residence. Determining that he could participate as the title holder of record, we next consider whether the district court erred in finding that Wells Fargo brought “all essential documents” to the mediation. In doing so, we address Wells Fargo’s argument that possessing the original mortgage note and deed of trust is sufficient to demonstrate ownership of the same. We conclude that Wells Fargo failed to produce the documents required under the applicable statute and FMRs and to otherwise show that it had an enforceable interest in the property subject of the mediation. Accordingly, the district court abused its discretion, and sanctions are warranted pursuant to our holding in Pasillas, 127 Nev. at ___, ___ P.3d at ___. Leyva was a proper party to the mediation Wells Fargo first argues that because Leyva was neither the grantor on the deed of trust nor the obligor on the note, he was not a proper party to the mediation. We disagree. NRS 107.086(3) allows “[t]he grantor or the person who holds the title of record” to elect to mediate. (Emphasis added.) Similarly, FMR 5(1) states that “any grantor or person who holds the title of record and is the owner-occupant of a residence” is eligible to participate in the Foreclosure Mediation Program. (Emphasis added.) Leyva recorded his ownership of the subject property in March 2007 and is therefore clearly the title holder of record eligible to participate in the Foreclosure Mediation Program. Even though the mortgage note remained in Ramos’s name, this bifurcation of title ownership and liability on the note served only to potentially limit the foreclosure solutions available to Leyva at the mediation, not to exclude all possible remedies. And while Wells Fargo argues that modification was not an option because Leyva lacked authority over the loan, the record reflects that Ramos, the person with such authority, signed the election-of-mediation form, was represented by counsel at the mediation, and was available by telephone during the mediation. Therefore, Wells Fargo’s argument lacks merit. Regardless, because both NRS 107.086(3) and FMR 5(1) permit the person holding the title of record to mediate, and Wells Fargo does not dispute that Leyva possessed a valid, recorded quitclaim deed, we conclude that Leyva could properly elect to mediate and was eligible to participate in the Foreclosure Mediation Program. Wells Fargo failed to meet the mediation program’s documentation requirements, compelling consideration of sanctions In Pasillas, we held that if a party fails to (1) provide the required documents, or (2) either attend the mediation in person or, if the beneficiary attends through a representative, that person fails to have authority to modify the loan or access to such a person, the district court is required to impose appropriate sanctions. 127 Nev. at ___, ___ P.3d at ___. Here, despite Wells Fargo’s failure to bring the assignments for the mortgage note and deed of trust, the district court refused to impose sanctions.[4] “[W]e . . . review a district court’s decision regarding the imposition of sanctions for a party’s participation in the Foreclosure Mediation Program under an abuse of discretion standard.” Id. Wells Fargo concedes that it did not provide written assignments of the deed of trust and mortgage note as required by NRS 107.086(4) and FMR 5(6). Nevertheless, it argues that it fulfilled the purpose of the statute and rule, and thus, its failure to bring actual copies of any assignments was harmless. In essence, Wells Fargo asserts that its failure to strictly comply with the statute’s and FMRs’ requirements should not subject it to sanctions, because it substantially complied with those requirements. “Substantial compliance may be sufficient ‘to avoid harsh, unfair or absurd consequences.’ Under certain procedural statutes and rules, however, failure to strictly comply . . . can be fatal to a case.” Leven v. Frey, 123 Nev. 399, 407, 168 P.3d 712, 717 (2007) (quoting 3 Norman J. Singer, Statutes and Statutory Construction § 57:19, at 58 (6th ed. 2001)). To determine whether a statute and rule require strict compliance or substantial compliance, this court looks at the language used and policy and equity considerations. Id. at 406-07, 168 P.3d at 717. In so doing, we examine whether the purpose of the statute or rule can be adequately served in a manner other than by technical compliance with the statutory or rule language. See id. at 407 n.27, 168 P.3d at 717 n.27 (citing White v. Prince George’s County, 877 A.2d 1129, 1137 (Md. Ct. Spec. App. 2005) (“Where the purpose of the notice requirements is fulfilled, but not necessarily in a manner technically compliant with all of the terms of the statute, this Court has found such substantial compliance to satisfy the statute.” (internal quotation omitted))). Here, both the statutory language and that of the FMRs provide that the beneficiary “shall” bring the enumerated documents, and we have previously recognized that “‘shall’ is mandatory unless the statute demands a different construction to carry out the clear intent of the legislature.” S.N.E.A. v. Daines, 108 Nev. 15, 19, 824 P.2d 276, 278 (1992); see also Pasillas, 127 Nev. at ___, ___ P.3d at ___. The legislative intent behind requiring a party to produce the assignments of the deed of trust and mortgage note is to ensure that whoever is foreclosing “actually owns the note” and has authority to modify the loan. See Hearing on A.B. 149 Before the Joint Comm. on Commerce and Labor, 75th Leg. (Nev., February 11, 2009) (testimony of Assemblywoman Barbara Buckley). Thus, we determine that NRS 107.086 and the FMRs necessitate strict compliance. Because we conclude that strict compliance is necessary, we must discuss what constitutes a valid assignment of deeds of trust and mortgage notes. Transfers of deeds of trust and mortgage notes are distinctly separate, thus we discuss each one in turn. The deed of trust, with any assignments, identifies the person who is foreclosing In this case, Wells Fargo was not the original named beneficiary on the deed of trust, but it contends on appeal that it has the right to foreclose as the assignee of the original beneficiary, MortgageIT. Although Wells Fargo conceded during oral argument that it did not provide the written assignment, it claims that because it provided a certified copy of the deed of trust and a notarized statement from its employee claiming that it was the rightful owner of the deed of trust, no written assignment was necessary. We disagree. A deed of trust is an instrument that “secure[s] the performance of an obligation or the payment of any debt.” NRS 107.020. This court has previously held that a deed of trust “constitutes a conveyance of land as defined by NRS 111.010.”[5] Ray v. Hawkins, 76 Nev. 164, 166, 350 P.2d 998, 999 (1960). The statute of frauds governs when a conveyance creates or assigns an interest in land: No estate or interest in lands, . . . nor any trust or power over or concerning lands, or in any manner relating thereto, shall be created, granted, assigned, surrendered or declared . . . , unless . . . by deed or conveyance, in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same, or by the party’s lawful agent thereunto authorized in writing. NRS 111.205(1) (emphases added). Thus, to prove that MortgageIT properly assigned its interest in land via the deed of trust to Wells Fargo, Wells Fargo needed to provide a signed writing from MortgageIT demonstrating that transfer of interest. No such assignment was provided at the mediation or to the district court, and the statement from Wells Fargo itself is insufficient proof of assignment. Absent a proper assignment of a deed of trust, Wells Fargo lacks standing to pursue foreclosure proceedings against Leyva. Mortgage note The proper method of transferring the right to payment under a mortgage note is governed by Article 3 of the Uniform Commercial Code―Negotiable Instruments, because a mortgage note is a negotiable instrument.[6] Birkland v. Silver State Financial Services, Inc., No. 2:10-CV-00035-KJD-LRL, 2010 WL 3419372, at 4 (D. Nev. Aug. 25, 2010). The obligor on the note has the right to know the identity of the entity that is “entitled to enforce” the mortgage note under Article 3, see NRS 104.3301, “[o]therwise, the [homeowner] may pay funds to a stranger in the case.” In re Veal, No. 09-14808, 2011 WL 2304200, at 16 (B.A.P. 9th Cir. June 10, 2011) (holding, in a bankruptcy case, that AHMSI did not prove that it was the party entitled to enforce, and receive payments from, a mortgage note because it “presented no evidence as to who possessed the original Note. It also presented no evidence showing [e]ndorsement of the note either in its favor or in favor of Wells Fargo, for whom AHMSI allegedly was servicing the [bankrupt party’s] Loan.”). If the homeowner pays funds to a “stranger in the case,” then his or her obligation on the note would not be reduced by the payments made. See id. at 7 (“if a[n obligor on a mortgage note] makes a payment to a ‘person entitled to enforce,’ the obligation is satisfied on a dollar for dollar basis, and the [obligor] never has to pay that amount again”). Wells Fargo argues that, under Nevada law, possession of the original note allowed it to enforce the note. We disagree and take this opportunity to clarify the applicability of Article 3 to mortgage notes, as we anticipate increasing participation in the Foreclosure Mediation Program, as well as a corresponding increase in the number of foreclosure appeals in this state. As discussed below, we conclude that Article 3 clearly requires Wells Fargo to demonstrate more than mere possession of the original note to be able to enforce a negotiable instrument under the facts of this case. Pursuant to NRS 104.3102(1), Article 3 applies to negotiable instruments. Negotiable instruments are defined as an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it: (a) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (b) Is payable on demand or at a definite time; and (c) Does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money. NRS 104.3104(1). Thus, a mortgage note is a negotiable instrument, and any negotiation of a mortgage note must be done in accordance with Article 3. A note can be made payable to bearer or payable to order. NRS 104.3109. If the note is payable to bearer, that “indicates that the person in possession of the promise or order is entitled to payment.” NRS 104.3109(1)(a). However, “[a] promise or order that is not payable to bearer is payable to order if it is payable to the order of an identified person . . . . A promise or order that is payable to order is payable to the identified person.” NRS 104.3109(2). For a note in order form to be enforceable by a party other than to whom the note is originally payable, the note must be either negotiated or transferred.[7] A “‘[n]egotiation’ means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.” NRS 104.3201(1). “[I]f an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder.”[8] NRS 104.3201(2) (emphasis added). An “endorsement” is a signature that is “made on an instrument for the purpose of negotiating the instrument.” NRS 104.3204(1). Thus, if the note is payable to the order of an identifiable party, but is then sold or otherwise assigned to a new party, it must be endorsed by the party to whom it was originally payable for the note to be considered properly negotiated to the new party. Once a proper negotiation occurs, the new party, or “note holder,” with possession is entitled to enforce the note. NRS 104.1201(2)(u)(1) (“Holder means . . . [t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.”). If a party cannot attain “holder” status by showing a valid negotiation, the party may establish its right to enforce the note by showing that the note has been validly transferred. NRS 104.3203(2). The only distinction between a negotiation and a transfer is that, in the case of a transfer, the note need not be endorsed by the party who is relinquishing enforcement rights. Because a transferred note is not endorsed, however, the party seeking to establish its right to enforce the note “must account for possession of the unendorsed instrument by proving the transaction through which the transferee acquired it.” U.C.C. § 3-203 cmt. 2 (explaining the effect of § 3-203(b), codified in Nevada as NRS 104.3203(2)). In other words, because the party seeking to enforce the note cannot “prove” its right to enforce through the use of a valid endorsement, the party must “prove” by some other means that it was given possession of the note for the purpose of enforcing it.[9] In this case, the adjustable rate mortgage note provides: “In return for a loan that I have received, I promise to pay U.S. $192,000.00 . . . plus interest, to the order of Lender. Lender is [MortgageIT, Inc.]” (emphasis added). Because the mortgage note is payable to the order of a specific party, MortgageIT, to negotiate the note to a new party, in this case Wells Fargo, Wells Fargo must have possession of the note and the note must be properly endorsed by MortgageIT. See NRS 104.3201(2). No such endorsement was included in the documents produced at mediation or in the documents filed with the district court, nor was a valid assignment produced as proof of the note’s transfer, and mere possession does not entitle Wells Fargo to enforce the note. Therefore, because the mortgage note is payable to MortgageIT, unless Wells Fargo can prove that the note was properly endorsed or validly transferred, thereby making it the party entitled to enforce the note, it has not demonstrated authority to mediate the note. As we concluded in Pasillas, a foreclosing party’s failure to bring the required documents to the mediation is a sanctionable offense under NRS 107.086 and the FMRs. Therefore, we conclude that the district court abused its discretion when it denied Leyva’s petition for judicial review. Accordingly, we reverse the district court’s order and remand this matter to the district court with instructions to determine the appropriate sanctions for Wells Fargo’s violation of the statutory and rule-based requirement. In doing so, the district court should consider the factors discussed in Pasillas.[10] DOUGLAS, C.J., and CHERRY, SAITTA, GIBBONS, PICKERING, and PARRAGUIRRE, JJ., concur. *******FOOTNOTES******** [1] Because we reverse on other grounds, we do not reach Leyva’s contention that respondent Wells Fargo also participated in the mediation in bad faith because it refused to offer anything other than a cash-for-keys option to avoiding foreclosure. [2] Therefore, this mediation was governed by the Foreclosure Mediation Rules in effect from July 31, 2009, until September 28, 2009, at which time the rules were amended. See In the Matter of the Adoption of Rules for Foreclosure Mediation, ADKT 435 (Order Adopting Foreclosure Mediation Rules, June 30, 2009, and Order Amending Foreclosure Mediation Rules and Adopting Forms, September 28, 2009). Although the changes required some renumbering of the rules, the language of the rules important to this case, namely, those specifying who can participate in the mediation and the documents that must be provided, remain essentially the same. [3] This court has jurisdiction over the appeal from the district court’s final order in the judicial review proceeding. Nev. Const. art. 6, § 4; NRAP 3A(b)(1). [4] At the time the district court entered its order, the Pasillas opinion had not been published. [5] “‘Conveyance’ shall be construed to embrace every instrument in writing, except a last will and testament, whatever may be its form, and by whatever name it may be known in law, by which any estate or interest in lands is created, aliened, assigned or surrendered.” NRS 111.010(1). [6] Article 3 is codified in NRS 104.3101-.3605. [7] Since the documents provided at the mediation did not establish transfer of either the mortgage or the note, we express no opinion on the issue addressed in the Restatement (Third) of Property section 5.4 concerning the effect on the mortgage of the note having been transferred or the reverse. [8] Under NRS 104.3301(1)(a), a person entitled to enforce an instrument is “[t]he holder of the instrument.” [9] To “prove” a transaction under NRS 104.3203(2), a party must present evidence sufficient to establish that it is more likely than not that the transaction took place. NRS 104.3103(1)(i) (defining “prove”); NRS 104.1201(h) (defining “burden of establishing”). [10] In Pasillas, we concluded that the following nonexhaustive list of factors would aid district courts in determining what sanctions are appropriate: “whether the violations were intentional, the amount of prejudice to the nonviolating party, and the violating party’s willingness to mitigate any harm by continuing meaningful negotiation.” Pasillas v. HSBC Bank USA, 127 Nev. ___, ___, ___ P.3d ___, ___ (Adv. Op. No. 39, July 7, 2011).

			Pasillas v. HSBC Bank USA Thursday, 07 July 2011

			A lender commits sanctionable offenses when it does not produce documents and does not have someone present at the mediation with the authority to modify the loan, as set forth in the applicable statute, NRS 107.086, and the Foreclosure Mediation Rules (FMRs).

			The district court shall not direct the program administrator to certify the mediation to allow the foreclosure process to proceed until the parties have fully complied with the statute and rules governing foreclosure mediation.

			A party’s failure to comply with these requirements (documents and person with authority to negotiate) is an offense subject to sanctions by the district court.

127nevadvopno39.pdf

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			Cite as: Pasillas v. HSBC Bank USA 127 Nev. Adv. Op. No. 39 July 7, 2011 IN THE SUPREME COURT OF THE STATE OF NEVADA No. 56393 EMILIANO PASILLAS AND YVETTE PASILLAS, Appellants, vs. HSBC BANK USA, AS TRUSTEE FOR LUMINENT MORTGAGE TRUST; POWER DEFAULT SERVICES, TRUSTEE; AND AMERICAN HOME MORTGAGE SERVICING, INC., Respondents. Appeal from a district court order denying a petition for judicial review arising in a foreclosure mediation action. Second Judicial District Court, Washoe County; Patrick Flanagan, Judge. Reversed and remanded. Terry J. Thomas, Reno, for Appellants. Pite Duncan, LLP, and Gregg A. Hubley, Laurel I. Handley, and Cuong M. Nguyen, Las Vegas, for Respondents. BEFORE THE COURT EN BANC. OPINION By the Court, HARDESTY, J.: In this appeal, we consider issues arising out of Nevada’s Foreclosure Mediation Program and address whether a lender commits sanctionable offenses when it does not produce documents and does not have someone present at the mediation with the authority to modify the loan, as set forth in the applicable statute, NRS 107.086, and the Foreclosure Mediation Rules (FMRs). Because NRS 107.086 and the FMRs expressly require that certain documents be produced during foreclosure mediation and that someone with authority to modify the loan must be present or accessible during the mediation, we conclude that a party’s failure to comply with these requirements is an offense subject to sanctions by the district court. In such an event, the district court shall not direct the program administrator to certify the mediation to allow the foreclosure process to proceed until the parties have fully complied with the statute and rules governing foreclosure mediation. Here, because respondents HSBC Bank USA, Power Default Services, and American Home Mortgage Servicing, Inc. (AHMSI), did not bring the required documents to the mediation and did not have access to someone authorized to modify the loan during the mediation, we conclude that the district court erred in denying appellants Emiliano and Yvette Pasillas’s petition for judicial review. Therefore, we reverse the district court’s order and remand this matter to the district court so that the court may determine sanctions. FACTS AND PROCEDURAL HISTORY The Pasillases purchased a home in Reno in 2006 with a loan from American Brokers Conduit. The note and deed of trust were allegedly assigned to HSBC.[1] Near the end of 2009, Power Default Services became a substitute trustee, removing HSBC from that role. Allegedly, the servicer for the Pasillases’ loan is AHMSI.[2] When the Pasillases defaulted on their mortgage and received a notice of election to sell, they elected to mediate pursuant to the Foreclosure Mediation Program provided for in NRS 107.086. Two separate mediations occurred, one on February 18, 2010, and one on March 8, 2010,[3] but neither mediation resulted in a resolution. While a representative of AHMSI was available by phone at both mediations, it is unclear whether HSBC was present or represented by counsel. There is some disagreement between the parties regarding who the respondents’ attorneys represented at the mediations and at the hearing on the petition for judicial review. In the addendum to the mediator’s statement, the mediator stated that “HSBC . . . was identified as Beneficiary . . . and represented by Cuong Nguyen, Esq. of Pite Duncan, LLP.” In the second mediation, the mediator indicated that “HSBC . . . was again identified as Beneficiary . . . and represented by Heather Hudson, Esq. of Pite Duncan, LLP.” However, in responding to the Pasillases’ petition for judicial review, the Pite Duncan law firm indicated that it was not counsel for HSBC. Specifically, the response opened with the following statement: “Respondents AMERICAN HOME MORTGAGE SERVICING, INC. (‘AHMSI’), erroneously named herein as HSBC BANK USA AS TRUSTEE FOR LUMINENT MORTGAGE TRUST.” Respondents also claimed that the Pasillases were “incorrect that Pite Duncan, LLP attended [the mediations] on behalf of HSBC.” At oral argument before this court, respondents’ counsel stated that they represented all of the respondents named in this case at the mediations, but they did not dispute the mediator’s finding that respondents needed additional authority from investors to agree to a loan modification. After both mediations were completed, the mediator filed a statement indicating that (1) “[t]he parties participated but were unable to agree to a loan modification or make other arrangements,” (2) “[t]he beneficiary or his representative failed to participate in good faith,” and (3) “[t]he beneficiary failed to bring to the mediation each document required.” The mediator also filed an addendum to his statement, wherein he stated that two pages of the mortgage note were missing, that the assignment purportedly assigning the mortgage note and deed of trust to HSBC was incomplete, that instead of an appraisal HSBC provided a broker’s price opinion,[4] and that respondents stated they would need additional investor approval before agreeing to a loan modification. The mediator concluded that he would not recommend that the administrator issue a certificate authorizing further foreclosure proceedings because HSBC “failed to participate in [the] mediation in good faith as evidenced by its failure to produce required documents and information initially, or subsequently to cure its failures.” The Pasillases subsequently filed a petition for judicial review in the district court. In the petition, the Pasillases requested sanctions in the form of a modification of their mortgage and attorney fees. The district court conducted a short hearing, during which the only issue addressed was the parties’ failure to come to an agreement. The district court did not address whether respondents failed to provide the required documents at the mediation or whether respondents lacked the requisite authority at the mediation to modify the loan. After the hearing, the district court entered an order finding that “Respondent[s] [have] met the burden to show cause why sanctions should not lie,” and directed the Foreclosure Mediation Program administrator to issue a certification authorizing the foreclosure to proceed. The Pasillases appealed. DISCUSSION In resolving this appeal, we must determine whether the district court abused its discretion when it refused to enter sanctions against respondents for failing to satisfy express statutory requirements and allowed respondents to continue with the foreclosure process. We begin our discussion with a brief background of the Foreclosure Mediation Program. The Foreclosure Mediation Program The Nevada Legislature enacted the Foreclosure Mediation Program in 2009 in response to the increasing number of foreclosures in this state. Hearing on A.B. 149 Before the Joint Comm. on Commerce and Labor, 75th Leg. (Nev., February 11, 2009) (testimony of Assemblywoman Barbara Buckley). The program requires that a trustee seeking to foreclose on an owner-occupied residence provide an election-of-mediation form along with the notice of default and election to sell. NRS 107.086(2)(a)(3). If the homeowner elects to mediate, both the homeowner and the deed of trust beneficiary must attend, must mediate in good faith, provide certain enumerated documents,[5] and, if the beneficiary attends through a representative, that person must have authority to modify the loan or have “access at all times during the mediation to a person with such authority.” NRS 107.086(4), (5); FMR 5(7)(a). After the conclusion of the mediation, the mediator must file a mediator’s statement with the program administrator, indicating whether all parties complied with the statute and rules governing the program. FMR 12(2). If the beneficiary does not (1) attend the mediation; (2) mediate in good faith; (3) provide the required documents; or (4) if attending through a representative, have a person present with authority to modify the loan or access to such a person, the mediator is required to “submit . . . a petition and recommendation concerning the imposition of sanctions.”[6] NRS 107.086(5). The homeowner may then file a petition for judicial review with the district court,[7] and the court “may issue an order imposing such sanctions against the beneficiary of the deed of trust or the representative as the court determines appropriate.” See FMR 5(7)(f).[8] But if the district court finds that the parties met the four program requirements, it will direct the program administrator to certify the mediation, allowing the foreclosure process to proceed. See NRS 107.086(2)(c)(2), (3), (6), (7). Respondents failed to meet the mediation program’s statutory requirements The Pasillases argue that respondents failed to meet the program’s requirements—the document requirement because respondents failed to bring a complete mortgage note and failed to provide assignments of the note and deed of trust, and the loan modification authority requirement because they failed to have someone present at the mediation with the authority to modify the loan. We agree. The scope and meaning of a statute is a question of law, which we review de novo. Arguello v. Sunset Station, Inc., 127 Nev. ___, ___ P.3d ___ (Adv. Op. No. 29, June 2, 2011). Court rules are also subject to de novo review. Moon v. McDonald Carano Wilson LLP, 126 Nev. ___, ___, 245 P.3d 1138, 1139 (2010). “When the language in a provision is clear and unambiguous, this court gives ‘effect to that meaning and will not consider outside sources beyond that statute.’” City of Reno v. Citizens for Cold Springs, 126 Nev. ___, ___, 236 P.3d 10, 16 (2010) (quoting NAIW v. Nevada Self-Insurers Association, 126 Nev. ___, ___, 225 P.3d 1265, 1271 (2010)). Both NRS 107.086 and the FMRs use the word “shall” or “must” when listing the actions required of parties to a foreclosure mediation. Use of the word “shall” in both the statutory language and the FMRs indicates a duty on the part of the beneficiary, and this court has stated that “‘shall’ is mandatory unless the statute demands a different construction to carry out the clear intent of the legislature.” S.N.E.A. v. Daines, 108 Nev. 15, 19, 824 P.2d 276, 278 (1992). Additionally, Black’s Law Dictionary defines “shall” as meaning “imperative or mandatory. . . . inconsistent with a concept of discretion.” 1375 (6th ed. 1990). And as it is used here, “must” is a synonym of “shall.” We conclude that NRS 107.086(4) and (5) and FMR 5(7)(a) clearly and unambiguously mandate that the beneficiary of the deed of trust or its representative (1) attend the mediation, (2) mediate in good faith, (3) provide the required documents, and (4) have a person present with authority to modify the loan or access to such a person. Here, the mediator’s statement and his addendum to that statement, which were provided to the district court in the Pasillases’ petition for judicial review, clearly set out respondents’ failure to bring the required documents to the mediation and to have someone present with authority to modify the loan. Additionally, respondents do not dispute that they failed to bring all the required documents to the mediation.[9] Although respondents argue on appeal that their counsel at the mediation “had the requisite authority and/or access to a person with the authority to modify the loan,” they do not controvert the mediator’s statement that their counsel claimed at the mediation that additional investor approval was needed in order to modify the loan. The record before the district court demonstrates that respondents failed to meet the statutory requirements. Nonetheless, respondents argue that the district court’s conclusion that sanctions were unwarranted did not constitute an abuse of discretion because, despite the failures noted above, they mediated to resolve the foreclosure in good faith. We disagree. Standard of review At the outset, we establish that we will review a district court’s decision regarding the imposition of sanctions for a party’s participation in the Foreclosure Mediation Program under an abuse of discretion standard. See Arnold v. Kip, 123 Nev. 410, 414, 168 P.3d 1050, 1052 (2007) (abuse of discretion standard used to review district court’s imposition of sanctions on a party for discovery abuses); Banks v. Sunrise Hospital, 120 Nev. 822, 830, 102 P.3d 52, 58 (2004) (reviewing sanctions imposed for spoliation of evidence under an abuse of discretion standard). When determining whether the district court has abused its discretion in such cases, we do not focus on whether the court committed manifest error, but rather we focus on whether the district court made any errors of law. Failure to satisfy statutory mandates is a sanctionable offense As discussed above, under NRS 107.086(5), there are four distinct violations a party to a foreclosure mediation can make: (1) “fail[ure] to attend the mediation,” (2) “fail[ure] to participate in the mediation in good faith,” (3) failure to “bring to the mediation each document required,” and (4) failure to demonstrate “the authority or access to a person with the authority [to modify the loan].” If any one of these violations occurs, the mediator must recommend sanctions. Id. If the homeowner petitions for judicial review, “[t]he court may issue an order imposing such sanctions against the beneficiary of the deed of trust or the representative as the court determines appropriate.” Id. We interpret NRS 107.086(5) to mean that the commission of any one of these four statutory violations prohibits the program administrator from certifying the foreclosure process to proceed and may also be sanctionable. See Tarango v. SIIS, 117 Nev. 444, 451 n.20, 25 P.3d 175, 180 n.20 (2001) (explaining that “may” can be interpreted as “shall” in order to carry out the Legislature’s intent, which in the instant case was to make mandatory the requirements set forth in NRS 107.086(5)). In this case, despite the mediator’s opinion that respondents did not participate in the mediation in good faith based on their failure to comply with the FMRs, the district court did not impose sanctions and instead entered a Letter of Certification that allowed respondents to proceed with the foreclosure process on the Pasillases’ property. The district court essentially ignored the fact that respondents failed to bring “to the mediation each document required” and did “not have the authority or access to a person with the authority” to modify the loan, failures which we determine constitute sanctionable offenses. Thus, the district court’s order directing the program administrator to enter a letter of certification and its failure to consider sanctions was an abuse of discretion because respondents clearly violated NRS 107.086 and the FMRs.[10] This abuse requires us to remand the case for the district court to consider appropriate sanctions. The nature of the sanctions imposed on the beneficiary or its representative is within the discretion of the district court. We have previously listed factors to aid district courts when considering sanctions as punishment for litigation abuses. See Young v. Johnny Ribeiro Building, 106 Nev. 88, 93, 787 P.2d 777, 780 (1990); see also Bahena v. Goodyear Tire & Rubber Co., 126 Nev. ___, ___, 235 P.3d 592, 598-99 (2010); Arnold, 123 Nev. at 415-16, 168 P.3d at 1053. However, we conclude that other factors, more specific to the foreclosure mediation context, apply when a district court is considering sanctions in such a case. When determining the sanctions to be imposed in a case brought pursuant to NRS 107.086 and the FMRs, district courts should consider the following nonexhaustive list of factors: whether the violations were intentional, the amount of prejudice to the nonviolating party, and the violating party’s willingness to mitigate any harm by continuing meaningful negotiation. Because, in this case, the foreclosing party’s failure to bring the required documents to the mediation and to have someone present at the mediation with the authority to modify the loan were sanctionable offenses under the Foreclosure Mediation Program, the district court abused its discretion when it denied the Pasillases’ petition for judicial review and ordered the program administrator to enter a letter of certification authorizing the foreclosure process to proceed. Therefore, we reverse the district court’s order and remand this matter to the district court with instructions to determine the appropriate sanctions for respondents’ violations of the statutory and rule-based requirements. DOUGLAS, C.J., and CHERRY, SAITTA, GIBBONS, PICKERING, and PARRAGUIRRE, JJ., concur. ********FOOTNOTES******** [1] The Pasillases claim that HSBC failed to provide a valid assignment; the one it provided during the mediation was signed by American Brokers Conduit but did not state who the assignee was. [2] The parties do not argue and we do not reach the question of whether AHMSI is a valid agent for HSBC or the real party in interest, or the “person entitled to enforce” the promissory note in this case. See In re Veal, No. 09-14808, 2011 WL 2304200, at *12-14 (B.A.P. 9th Cir. June 10, 2011). [3] These mediations were governed by the Foreclosure Mediation Rules (FMRs) as amended on November 4, 2009. [4] We note that while FMR 11(7)(b) currently allows for a broker’s price opinion in lieu of an appraisal, the rules applicable to this matter called for an appraisal without mention of a broker’s price opinion. In the Matter of the Adoption of Rules for Foreclosure Mediation, ADKT 435 (Order Adopting Foreclosure Mediation Rules, June 30, 2009, and Order Amending Foreclosure Mediation Rules and Adopting Forms, November 4, 2009). [5] With regard to the documents required, NRS 107.086(4) provides that “[t]he beneficiary of the deed of trust shall bring to the mediation the original or a certified copy of the deed of trust, the mortgage note[,] and each assignment of the deed of trust or mortgage note.” The FMRs echo this documentation requirement nearly word for word. FMR 5(7)(a). FMR 7(2) also provides that “[t]he beneficiary of the deed of trust or its representatives shall produce an appraisal . . . and shall prepare an estimate of the ‘short sale’ value of the residence.” [6] If the homeowner fails to attend the mediation, the administrator will certify that no mediation is required. NRS 107.086(6). [7] Generally, if the parties fail to reach an agreement and neither party files a petition for judicial review, the program administrator will certify the mediation, which allows the foreclosure process to proceed. NRS 107.086(3), (6), (7). [8] The current version of the FMRs requires the district court to review a case de novo when a party files a petition for judicial review. FMR 21(5) (rules including amendments through March 1, 2011). De novo review may include an evidentiary hearing concerning what transpired at the mediation. See Black’s Law Dictionary 924 (9th ed. 2009) (defining “de novo judicial review” as “[a] court’s nondeferential review of an administrative decision, usu[ally] through a review of the administrative record plus any additional evidence the parties present”). [9] At oral argument, respondents’ counsel argued that an assignment for the mortgage note was provided, but the name of the assignee was missing. We determine that an assignment provided without the name of the assignee is defective for the purposes of the Foreclosure Mediation Program because it does not identify the relevant parties. The Supreme Judicial Court of Massachusetts recently reached the same conclusion regarding the production of assignments to mortgage notes and deeds of trust, albeit in a slightly different context. In U.S. Bank National Ass’n v. Ibanez, 941 N.E.2d 40 (Mass. 2011), two separate banks foreclosed on the mortgages of two homeowners whose properties the banks then bought at the foreclosure sales. Id. at 44. The banks later filed complaints in the lower court seeking a declaration that they had clear title to the properties. Id. Because the banks failed to show an interest in the mortgages at the time of the foreclosure sales, the sales were invalid, and the lower court entered judgment against the banks. Id. at 45. On appeal, the court determined that, similar to this case, the banks were not the original mortgagees and, therefore, they had to show that the mortgages were properly assigned to them in writings signed by the grantors before they could notice the sales and foreclosures of the properties. Id. at 51. In an attempt to prove that they had the authority to foreclose on the properties, the banks provided contracts purporting to assign to them bundles of mortgages; however, the attachments that identified what mortgages were being assigned were not included in the documents provided. Id. at 52. The court concluded that the banks demonstrated no authority to foreclose on the properties because they did not have the assignments. Id. at 53 (“We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment.”). The court additionally stated that “[a] plaintiff that cannot make this modest showing cannot justly proclaim that it was unfairly denied a declaration of clear title.” Id. at 52. We agree with the rationale that valid assignments are needed when a beneficiary of a deed of trust seeks to foreclose on a property. [10] Respondents argue that this court should decline to address the Pasillases’ argument that respondents failed to provide someone at the mediation with the authority to modify the loan because it was not raised in the petition for judicial review. First, we note that our decision here would require the district court to impose sanctions even if respondents’ only omission was the failure to provide the required documents. However, we determine that the Pasillases adequately raised this issue in their petition for judicial review by alleging that respondents’ counsel at the mediations did not accurately state who they were representing. Therefore, our decision of the issue is appropriate.