                                                   130 Nev., Advance Opinion 58
                       IN THE SUPREME COURT OF THE STATE OF NEVADA


                SIMON LAVI,                                           No. 58968
                Petitioner,
                vs.
                THE EIGHTH JUDICIAL DISTRICT
                                                                            FILED
                COURT OF THE STATE OF NEVADA,                                   MAY 2 9 2014
                IN AND FOR THE COUNTY OF
                                                                                  IL   Li DEMAN
                CLARK; AND THE HONORABLE                                CL -T
                                                                                           -



                VALERIE ADAIR, DISTRICT JUDGE,                             CHI IC         CLERK
                Respondents,
                   and
                BRANCH BANKING AND TRUST
                COMPANY, SUCCESSOR-IN-
                INTEREST TO COLONIAL BANK BY
                ACQUISITION OF ASSETS FROM THE
                FDIC AS RECEIVER FOR COLONIAL
                BANK, A NORTH CAROLINA
                BANKING CORPORATION
                ORGANIZED AND IN GOOD
                STANDING UNDER THE LAWS OF
                NORTH CAROLINA,
                Real Party in Interest.


                            Petition for rehearing of this court's May 24, 2013, order
                granting a petition for a writ of mandamus and directing the district court
                to award summary judgment to petitioner in a breach of guaranty action.
                           Rehearing denied.

                Marquis Aurbach Coifing and Frank M. Flansburg, III, and Jason M.
                Gerber, Las Vegas; Baker & Hostetler LLP and Michael Matthias, Los
                Angeles, California,
                for Petitioner.




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                Sylvester & Polednak, Ltd., and Allyson R. Noto and Jeffrey R. Sylvester,
                Las Vegas,
                for Real Parties in Interest.




                BEFORE THE COURT EN BANC.

                                                 OPINION
                By the Court, DOUGLAS, J.:
                            Real party in interest Branch Banking and Trust Company
                (BB&T) has petitioned for rehearing of our earlier decision to grant a writ
                of mandamus in this case, based on the district court's failure to dismiss a
                breach of guaranty action after the property securing the underlying
                commercial real estate loan was sold at a trustee's sale. In that order, we
                concluded that BB&T was barred from recovering under the guaranty
                because it failed to apply for a deficiency judgment under NRS 40.455
                within six months after the property's sale. On rehearing, BB&T asserts
                that we misapprehended the legal effect of the guarantor's waiver of
                certain statutory protections under NRS 40.430, otherwise known as the
                one-action rule. BB&T argues that the waiver effectively nullified NRS
                40.455's requirements. We deny rehearing because we considered and
                resolved BB&T's arguments in our order granting mandamus relief, and
                because we are not convinced that we misread or misapplied the pertinent
                law.

                                                  FACTS
                            In addition to others not party to this proceeding, petitioner
                Simon Lavi personally guaranteed a commercial real estate loan that

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                BB&T eventually purchased. After the borrowers defaulted on the loan,
                BB&T filed a complaint seeking full recovery of the loan's balance from
                Lavi and the other guarantors. While the case against the guarantors was
                pending, BB&T foreclosed and took ownership of the property through a
                credit bid at a trustee's sale. At that time, the property was worth less
                than what the borrowers owed BB&T under the loan.
                            Nearly one year later, BB&T moved for summary judgment
                regarding Lavi's liability for breach of the loan guaranty. In response,
                Lavi filed a countermotion for summary judgment, asserting that NRS
                40.455 precluded BB&T from obtaining a judgment for the deficiency on
                the loan balance arising after the trustee's sale. In pertinent part, NRS
                40.455 requires a party who is seeking a deficiency judgment to file an
                application for the judgment within six months after the trustee's sale.
                The district court determined that NRS 40.455 did not bar BB&T's action
                because BB&T sufficiently notified Lavi that it intended to seek a
                deficiency judgment. Accordingly, the district court granted BB&T's
                motion for summary judgment as to Lavi's liability and denied Lavi's
                countermotion.
                            Lavi then filed a petition for a writ of mandamus or a writ of
                prohibition in this court, challenging the district court's order. Lavi
                asserted that BB&T was barred from recovering a deficiency judgment
                because BB&T did not apply for it within six months after the trustee's
                sale. We agreed and issued a writ of mandamus compelling the district
                court to dismiss the guaranty action against Lavi BB&T has now
                petitioned this court for rehearing of our decision.




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                                                 DISCUSSION

                               Under NRAP 40(c)(2), this court may consider petitions for
                   rehearing when "a material fact in the record or a material question of law
                   in the case" has been overlooked or misapprehended, or when we have
                   misapplied a controlling decision. A petition for rehearing will not be
                   considered when it raises a point for the first time, or when it merely
                   reargues matters previously presented to the court. NRAP 40(c)(1).
                               Our order granting the writ of mandamus was based on the
                   conclusion that per NRS 40.455 and Walters v. Eighth Judicial District
                   Court, 127 Nev. 263 P.3d 231 (2011), a party seeking a deficiency
                   judgment must file the application particularizing the reasons for the
                   requested judgment within six months after selling the property at a
                   trustee's sale, regardless of any purported waiver of the one-action rule.
                   We explained that under NRS 40.495(3), Lavi was allowed to assert
                   BB&T's failure to comply with NRS 40.455 as a defense to the breach of
                   guaranty action. In Walters, a lender filed a summary judgment motion
                   on a breach of guaranty claim, seeking to recover the unpaid balance on a
                   loan, after the lender sold the real property that secured the loan at a
                   trustee's sale.   Id. at , 263 P.3d at 232-33. There, we considered
                   whether the lender's failure to apply for a deficiency judgment within six
                   months after the trustee's sale entitled a guarantor, who waived the one-
                   action rule, to partial summary judgment.     Id. at , 263 P.3d at 233.
                   Ultimately, we concluded—without addressing the waiver issue—that the
                   summary judgment motion in Walters sufficed as an application for a
                   default judgment because it was written, set forth the particular grounds
                   for the relief sought, and was filed within NRS 40.455(1)'s six-month time
                   frame after the trustee's sale. Id. at , 263 P.3d at 234.
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                               In seeking rehearing of our decision, BB&T argues that we
                mistook the applicability of both NRS 40.495(3) and Walters to this case.
                According to BB&T, when Lavi waived the one-action rule, he also
                released BB&T from the obligation of satisfying NRS 40.455. BB&T also
                argues that Walters does not control here because, in that case, we
                expressly refused to consider whether any waiver of the one-action rule
                impacted NRS 40.455's applicability. BB&T's arguments are meritless
                because we neither misunderstood nor ignored these authorities.
                Nevertheless, we issue this opinion addressing BB&T's rehearing petition
                because our explanation may prove useful beyond the facts of this case.
                NRAP 36(c)(3).
                               Generally, "there may be but one action for the recovery of any
                debt, or for the enforcement of any right secured by a mortgage or other
                lien upon real estate. That action must be in accordance with the
                provisions of NRS 40.430 to 40.459, inclusive." NRS 40.430(1). We have
                interpreted this statute to require an obligee, who seeks to recover a debt
                secured by real property, to recover on the property through foreclosure
                before attempting to recover from the loan's guarantor personally.         See
                McDonald v. D.P. Alexander & Las Vegas Boulevard, L.L.C., 121 Nev. 812,
                816, 123 P.3d 748, 750 (2005). If a guarantor waives the NRS 40.430
                protections, the obligee may maintain an action to recover from the
                guarantor prior to completing the foreclosure process. See NRS 40.495(2).
                BB&T's interpretation that waiving the one-action rule also frees an
                obligee from complying with the provisions of NRS 40.455 is unreasonable.
                NRS 40.495(2) focuses on maintaining a separate action; nothing in the
                subsection implies that it also terminates the procedural requirements for
                that action.

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                             Additionally, NRS 40.495(3) allows a guarantor to assert any
                 defenses provided under NRS 40.451 to 40.4639 if an "obligee maintains
                 an action to foreclose or otherwise enforce a mortgage or lien and the
                 indebtedness or obligations secured thereby." In our order granting Lavi's
                 petition, the dissent suggested that allowing a guarantor to assert a
                 defense against a breach of guaranty claim based on the obligee's
                 foreclosure action effectively reads "separately and independently" out of
                 NRS 40.495(2). The dissent's concerns are reasonable, but unjustified. If
                 an obligee seeks a deficiency judgment from a guarantor in an action
                 separate from a foreclosure action, the two actions are undeniably and
                 inextricably connected because the foreclosure sale necessarily impacts the
                 deficiency judgment award. See Carrillo v. Valley Bank of Nev., 103 Nev.
                 157, 159, 734 P.2d 724, 725 (1987) (a party who buys a property at
                 foreclosure may seek a deficiency judgment only to the extent that the
                 debts exceed the property's fair market value). If we disregard this fact, a
                 party could possibly receive an excess recovery.        See id.    Also, the
                 Legislature has shown a strong inclination towards protecting an obligor's
                 rights under the antideficiency statutes.    See Lowe Enters. Residential
                 Partners, L.P. v. Eighth Judicial Dist. Court, 118 Nev. 92, 103-04, 40 P.3d
                 405, 412-13 (2002). Allowing a guarantor to assert a defense to a
                 deficiency action is consistent with both legislative intent and NRS
                 40.495(2) because it preserves the obligor's rights under the antideficiency
                 statutes and it does not prevent an obligee from maintaining that action
                 separately from a foreclosure action. Further, this interpretation can be
                 fairly harmonized with NRS 40.495's 2011 amendment adding subsection
                 4. The subsection does not deny applicability of the deficiency judgment
                 defenses or the six-month deadline; rather, it governs the amount due

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                 from the guarantor and implements a fair market value determination
                 regardless of whether the property has been foreclosed.     See 2011 Nev.
                 Stat., ch. 311, § 5.5, at 1743-44.
                              When Lavi waived the one-rule action, BB&T was allowed to
                 bring an action against him prior to completing the foreclosure on the
                 secured property, but that waiver did not terminate the procedural
                 requirements for asserting that separate action. Although BB&T
                 commenced an action on the guaranty first under NRS 40.495(2), once it
                 foreclosed on the property and sought a deficiency judgment, it was
                 required to satisfy MRS 40.455. Thus, Walters' holding that timely
                 application for a deficiency judgment must be made under NRS 40.455
                 applies here as well. While the guaranty action is being maintained
                 separately from any other action to recover the debt, the defenses against
                 a deficiency judgment nonetheless apply after the property is sold at
                 foreclosure. So, under MRS 40.495(3), Lavi was entitled to raise any
                 defenses to BB&T's attempt to recover a deficiency judgment.
                              BB&T also asserts that even if Walters applies, its complaint
                 met the same standards for being considered a deficiency judgment
                 application as did the pre-foreclosure counterclaim in Walters, which the
                 district court in that case concluded sufficed as a deficiency judgment
                 application under NRS 40.455. But, in Walters, this court affirmed on the
                 ground that the summary judgment motion met the deadline because it
                 was filed within six months after the foreclosure sale, thus we did not
                 consider the counterclaim argument.      See id. Here, we have determined




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                     that BB&T's complaint could not have met NRS 40.455's requirements
                     because BB&T filed it before the trustee's sale. A right to deficiency
                     judgment does not vest until the secured property is sold.      Sandpointe
                     Apartments v. Eighth Judicial Dist. Court, 129 Nev. „ 313 P.3d 849,
                     856 (2013). Therefore, a complaint filed before the foreclosure sale cannot
                     sufficiently put an obligor on notice that the deed of trust beneficiary
                     intends to seek further recovery from the obligor. Accordingly, Walters
                     does not provide support for BB&T's rehearing petition.
                                    As explained above, in rendering our decision in this matter
                     we did not overlook, misapprehend, or misapply the law. As a result,
                     rehearing is not warranted. NRAP 40(c). Therefore, we deny BB&T's
                     petition.




                        •
                                                           Douglas
                     We concur:




                     Gibbons


                        79±7,0a0,6e4r1J.
                     Parra:guirre


                                                      J.
                     Cherry

                     _digs v                          J.
                     Saitta


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                PICKERING, J., with whom HARDESTY, J., agrees, dissenting:

                            The majority exonerates Lavi from his unconditional guaranty
                of a $6,695,000 commercial loan. It does so on the basis that the lender,
                BB&T, forfeited Lavi's payment guaranty by foreclosing on the real
                property securing the loan without "applying]" for a "deficiency judgment"
                against Lavi "within 6 months after the date of the foreclosure sale," as
                NRS 40.455 would require if this were a one-action rule case. But BB&T
                had already applied for judgment against Lavi by suing him on the
                guaranty before it foreclosed, and in the guaranty, Lavi waived the one-
                action rule, NRS 40.430, as NRS 40.495(2) permits. This took BB&T's suit
                against Lavi outside the "one action .. . in accordance with the provisions
                of NRS 40.430 to 40.459, inclusive," that NRS 40.430 describes, and
                entitled BB&T to proceed to judgment against Lavi "separately and
                independently from . . . [t]he exercise of any power of sale [and a]ny action
                to foreclose or otherwise enforce a mortgage or lien and the indebtedness
                or obligations secured thereby." NRS 40.495(2)(b) & (c).
                            A lender extends commercial credit with the expectation that
                the interest to be earned exceeds the risk of default and consequent loss.
                Where, as here, the borrower is a special-purpose entity formed to buy and
                develop a specific piece of commercial real estate, the lender often relies on
                personal guaranties to assure repayment if the real estate does not deliver
                the value the investors anticipate. Ordinarily, the guarantor is closer to
                the borrower than the lender and stands to profit beyond the interest a
                lender may reasonably charge, else there would be no economic incentive
                for the guaranty. The 6-month period in NRS 40.455 is a statute of
                limitations, designed to cut off stale post-foreclosure deficiency claims. To
                exonerate the guarantor, whom the lender sued before the foreclosure sale,
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                because the lender sued before instead of within 6 months after the
                foreclosure sale, punishes the diligent lender without statutory basis or
                policy reason. And because such a rule is not apparent from a natural
                reading of the applicable statutes, and virtually unprecedented nationally,
                it impedes Nevada's economic growth and development. Without
                predictable laws permitting efficient enforcement of commercial
                guaranties, commercial loans in Nevada will become increasingly
                expensive and difficult to obtain.
                                                      I.
                                                      A.
                            Some background is helpful to an understanding of the issues
                in this case. Nevada's one-action rule, set forth in NRS 40.430, says that
                "there may be but one action for the recovery of any debt, or for the
                enforcement of any right secured by a mortgage or other lien upon real
                estate. That action must be in accordance with the provisions of NRS
                40.430 to 40.459, inclusive." NRS 40.430(1). This statute dates back to
                statehood days, Hyman v. Kelly, 1 Nev. 179, 185 (1865), and, in general,
                requires a lender to proceed against a borrower's pledged security before
                seeking a deficiency judgment against the borrower, thereby preventing
                the lender from inflating its recovery with an unfairly low credit bid. Id.;
                see McDonald v. D.P. Alexander & Las Vegas Blvd., L.L.C.,      121 Nev. 812,
                820, 123 P.3d 748, 753 (2005).
                            The "provisions of NRS 40.430 to 40.459, inclusive" that define
                the "one action" NRS 40.430(1) affords include: MRS 40.455, which
                provides that, "upon application of. . . the beneficiary of the deed of trust
                within 6 months after the date of. . the trustee's sale, . . . and after the
                required hearing, the court shall award a deficiency judgment to
                the .. . beneficiary of the deed of trust if it appears .. . that there is
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                      a ... balance remaining due"; NRS 40.457(1), which provides that, "Before
                      awarding a deficiency judgment under NRS 40.455, the court shall hold a
                      hearing and ... take evidence ... concerning the fair market value of the
                      property sold as of the date of .. . sale"; and NRS 40.459(1), which limits
                      the recoverable deficiency to the lesser of "the amount by which the
                      [secured indebtedness] exceeds the fair market value of the property sold
                      at the time of the sale" or "the difference between the amount for which
                      the property was actually sold" and the secured indebtedness.
                                  Before 1986, Nevada's one-action rule and its associated
                      protections applied only to borrowers, not guarantors.    Mfrs. & Traders
                      Trust Co. v. Eighth Judicial Din. Court, 94 Nev. 551, 554, 583 P.2d 444,
                      446 (1978) ("a creditor is not required to pursue the maker of the note, or
                      the real property security, before suing the guarantor of a note secured by
                      a mortgage or deed of trust for the full amount of the indebtedness
                      remaining on the note"); see Coombs v. Heers, 366 F. Supp. 851, 855 (D.
                      Nev. 1973) ("The rule that a creditor may first pursue an absolute
                      guarantor has not been abrogated by any Nevada case and the only
                      Nevada decision approaching the subject approves the rule." (citing
                      Quillen v. Quigley, 14 Nev. 215, 218-20 (1879))); 2 Michael T. Madison,
                      Jeffry R. Dwyer & Steven W. Bender, The Law of Real Estate Financing §
                      15:12 (2013) (few states have one-action rules; the majority of courts in
                      those that do "have concluded that the applicable one-action statute [does]
                      not protect guarantors"). This makes economic sense, because if the
                      lender forecloses on a borrower's security, the guarantor can choose to pay
                      the guaranteed debt and be subrogated to the lender's position, to bid for
                      the property, or to claim an offset against the sums otherwise due on the
                      guaranty. And it comports with the common law view that a guarantor's

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                liability is "premised on a separate and distinct contract of guaranty
                rather than on any obligations imposed by the notes and mortgages
                subject to a foreclosure action." Alerus Fin., N.A. v. Mardi Grp. Inc., 806
                N.W.2d 160, 167 (N.D. 2011). Consistent with prevailing law, before 1986,
                suits on guaranties in Nevada were governed by general contract
                principles, not the foreclosure statutes. Thomas v. Valley Bank of Nev., 97
                Nev. 320, 322, 629 P.2d 1205, 1207 (1981) ("It has always been the law of
                this state that a contract of guaranty is not a secured obligation, even if
                the primary obligation is secured.").
                            But in 1986, this court decided First Interstate Bank of Nevada
                v. Shields, 102 Nev. 616, 730 P.2d 429 (1986).      Shields revolutionized
                Nevada guaranty law by overruling Manufacturers & Traders, supra, and
                Thomas, supra, and extending the one-action rule and its associated
                protections to guarantors.   Shields, 102 Nev. at 618, 730 P.2d at 430-31.
                The Shields decision has been widely criticized. See In re SLC Ltd. V, 152
                B.R. 755, 773 (Bankr. D. Utah 1993) (rejecting Shields because "the better
                reasoned state court decisions" do not follow it (citing cases)); Mitt, of
                Omaha Bank v. Murante, 829 N.W.2d 676, 684 (Neb. 2013) (dismissing
                Shields as not "persuasive"). And, it provoked an immediate outcry from
                Nevada's banking and business community, which pressed the 1987 and
                1989 Nevada Legislatures to invalidate it. See Hearing on S.B. 359 Before
                the Senate Comm. on the Judiciary, 64th Leg. (Nev., April 16, 1987)
                (Nevada Bankers' Ass'n Summary Position Paper stating that "the Shields
                decision. . . has unfairly shifted the risk of loss to the lender, and has
                unilaterally destroyed reasonable lender reliance on a guarantor's contract
                of performance"); Hearing on A.B. 557 Before the Assembly Comm. on the
                Judiciary, 65th Leg. (April 19, 1989) (Nevada Bankers Ass'n Position

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                Paper advocating legislation to "restore the status of the law as it existed
                prior to Shields" as to commercial loans over $250,000).
                            In response, the Legislature limited, but did not entirely
                invalidate, Shields. Insofar as relevant here, the 1989 Legislature passed
                NRS 40.495(2), 1989 Nev. Stats., ch. 470, § 2, at 1001, which provides that
                a "guarantor. . . may waive the provisions of NRS 40.430" and that, if the
                guarantor signs such a waiver,
                            ... an action for the enforcement of that person's
                            [i.e., the guarantor's] obligation to pay, satisfy or
                            purchase all or part of an indebtedness or
                            obligation secured by a mortgage or lien upon real
                            property may be maintained [by the lender]
                            separately and independently from:
                                  (a) An action on the debt;
                                  (b) The exercise of any power of sale;
                                  (c) Any action to foreclose or otherwise
                            enforce a mortgage or lien and the indebtedness or
                            obligations secured thereby; and
                                 (d) Any   other proceeding against a
                            mortgagor or grantor of a deed of trust.
                (Emphasis added.) NRS 40.495(2) waivers may be had only in the context
                of guaranteed commercial loans exceeding $500,000; guarantors of
                residential, agricultural, or commercial loans under $500,000 retain the
                full protection of Shields. NRS 40.495(5).
                                                     B.
                            This case involves a typical commercial land acquisition and
                development loan. BB&T (Bank) loaned $6,695,000 to a special purpose
                entity (Borrower) created to acquire and develop a piece of commercial real
                estate on the Las Vegas Strip. The loan was secured by a deed of trust on
                the property. The Bank required a personal payment guaranty, which
                Lavi supplied. In the guaranty, Lavi waived "Any right [he] may have to
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                require Bank to proceed against Borrower, proceed against or exhaust any
                security held by Borrower or Bank, or pursue any other remedy in Bank's
                power to pursue; [and] Mo the extent permitted in paragraph 40.495(2) of
                the Nevada Revised Statutes, the benefits of the one-action rule under
                NRS Section 40.430."
                            Borrower defaulted, Lavi dishonored his guaranty, and on
                October 19, 2009, BB&T sued Lavi for breach of guaranty, seeking
                damages "in excess of $10,000" per NRCP 8(a). At roughly the same time,
                BB&T recorded a notice of default and election to sell the property,
                notifying Lavi as required by NRS 107.095. Lavi understood that BB&T
                sought judgment against him for the post-foreclosure deficiency on the
                guaranteed note. Thus, when Lavi answered BB&T's complaint on
                November 23, 2009, almost three months before the foreclosure sale, Lavi
                asserted, as a "separate, and affirmative defense, . that Plaintiffs
                [BB&T's] recovery, if any, must be offset by the amounts recovered by
                Plaintiff in the foreclosure proceeding."
                            The trustee's sale took place on February 11, 2010. Lavi did
                not bid at the foreclosure sale and BB&T acquired the property with a
                $3,275,000 credit bid against the $6,783,372 due on the note, leaving
                $3,508,372 unpaid.
                            Meanwhile, BB&T's lawsuit against Lavi continued apace.
                Both sides hired experts who gave conflicting estimates of the fair market
                value of the foreclosed property (FMV) as of the date of its sale of
                $2,330,000 (BB&T) and $4,420,000 (Lavi). They also exchanged written
                discovery. If NRS 40.455 applied, its 6-month deadline for making
                "application" for a "deficiency judgment" would have expired on August 10,
                2010. Lavi's answer asserting offset as an affirmative defense and his

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                 written discovery responses did not question BB&T's right to proceed to
                 judgment against him under NRS 40.495(2), with Lavi receiving credit for
                 the value of the foreclosed property as an offset. But on June 1, 2011, in
                 response to BB&T's motion for partial summary judgment on liability,
                 Lavi filed a countermotion for summary judgment in which he argued, for
                 the first time, that BB&T forfeited its rights under the guaranty when it
                 did not apply for a deficiency judgment against him "within 6 months after
                 the date of the foreclosure sale," or by August 10, 2010, as required by
                 NRS 40.455.
                             The district court granted partial summary judgment to
                 BB&T. Lavi petitioned for extraordinary writ relief, which a divided en
                 banc court granted by unpublished, or nonprecedential, order.        Lavi V.
                 Eighth Judicial Dist. Court, Docket No. 58968 (Order Granting Petition
                 for Writ of Mandamus, May 24, 2013) (5-2). There followed a motion to
                 publish the order as an opinion, which was denied, and the petition for
                 rehearing now before us.


                             The majority's analysis suffers three principal flaws. First, it
                 does not deal with the fact that, if an "application [for] . . . a deficiency
                 judgment" was required under NRS 40.455, BB&T's complaint qualified as
                 such and was timely under the statute's 6-month limitations period.
                 Second, given Lavi's waiver, NRS 40.495(2) authorized BB&T to pursue
                 him on the guaranty "separately and independently" from "any action"
                 against the Borrower or the Borrower's security, making NRS 40.455
                 irrelevant. Third, newS NRS 40.495(4), which applies specifically to suits
                 against guarantors who have given NRS 40.495(2) waivers, confirms that,
                 in this context, NRS 40.455 and NRS 40.459 do not apply because they are

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                   inconsistent with NRS 40.495(4) and do not require an "application"
                   beyond the pre-foreclosure complaint against the guarantor.
                                                        A.
                               The 6-month deadline in NRS 40.455 is a statute of limitations
                   or repose. Like most such statutes, its purpose is "to protect a defendant
                   against the evidentiary problems associated with defending a stale claim"
                   and "to promote repose by giving security and stability to human affairs."
                   Nev. State Bank v. Jamison Family P'ship, 106 Nev. 792, 798, 801 P.2d
                   1377, 1381 (1990). Here, Lavi conceded at oral argument that BB&T's
                   complaint against him for breach of guaranty qualified as an "application"
                   for a "deficiency judgment" under NRS 40.455 in every respect except one:
                   BB&T filed it three-and-a-half months before instead of "within 6 months
                   after" the foreclosure sale (emphasis added). See, e.g., Shields, 102 Nev. at
                   618 n.2, 730 P.2d at 430 n.2 (to make application for a "deficiency
                   judgment" the lender must file a complaint against the guarantor within
                   the time set by NRS 40.455). This would lead most people, at least non-
                   lawyers, to ask: So, what, exactly, is the problem here? BB&T filed its
                   "application" 9 months before the 6-month post-foreclosure-sale
                   limitations period expired. Thus, Lavi knew even before the foreclosure
                   sale that BB&T expected him to satisfy the Borrower's debt, to the extent
                   the pledged real estate did not. No "evidentiary problems associated
                   with. . . stale claim Es1" arose, and Lavi was not left wondering if his
                   guarantee would be called. Id. And, by his answer and expert exchanges,
                   Lavi fully joined with BB&T on the FMV and offset issues in their pending
                   suit. Cf. Grouse Creek Ranches v. Budget Fin, Corp., 87 Nev. 419, 426, 458
                   P.2d 917, 923 (1971) (NRCP 54(c) authorized the district court to amend



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                    the pleadings to grant a primary lien where the objecting party joined
                    issue on the matter and suffered no prejudice).'
                                   In Interim Capital, L.L.C. v. The Herr Law Group, Ltd., 2:09-
                    CV-1606-KJD-LRL, 2011 WL 7053806 (D. Nev. Aug. 23, 2011), the United
                    States District Court for the District of Nevada considered and rejected
                    the position the majority adopts. The lender in Herr sued the defendant
                    guarantors before foreclosure and the guarantors argued, as Lavi does,
                    "that MRS 40.430, the 'one action rule' and MRS 40.455, the 'deficiency
                    judgment statute,' protect them from a deficiency judgment, requiring
                    application for judgment within six months after the date of the
                    foreclosure sale."     Id.   The court disagreed. It concluded that the
                    guarantors' argument conflated the time the lender's cause of action
                    against the guarantors accrued (upon the borrower's default) with the
                    outside 6-month limitations period established by MRS 40.455 (which the
                    lender's pre-foreclosure suit satisfied):
                                   Plaintiff brought this action before the foreclosure
                                   sale, not after the foreclosure sale. The Court
                                   rejects the argument that this action could not be
                                   brought until after the foreclosure sale. Defendant
                                   guarantors waived the one action rule. The
                                   subject time provision acts only as a limitation of
                                   time within which an action may be brought. It
                                   does not purport to address when the cause of
                                   action accrued. Defendants' interpretation flies in
                                   the face of NRS 40.495 which allows actions
                                   against guarantors before a sale has occurred.
                                   Plaintiffs cause of action accrued upon default.


                          1 Lavidoes not argue that BB&T prejudiced his subrogation rights or
                    caused other cognizable prejudice.



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                             The deficiency statute only functions to limit
                             damages.
                 Id. (emphasis in original); see Schuck v. Signature Flight Support of Nev.,
                 Inc., 126 Nev. „ n.2, 245 P.3d 542, 546 n.2 (2010) (this court may
                 rely on unpublished federal district court opinions as persuasive, though
                 nonbinding authority).
                             In other, more exacting contexts, this court has treated a
                 premature filing as effective, so long as the proceeding has not been
                 dismissed before the actual due date arrives.            See NRAP 4(a)(6)
                 (premature notice of appeal). No reason appears why a premature
                 application for a deficiency judgment should not be treated the same way,
                 especially since NRS 40.455's time deadline is procedural, not substantive
                 or jurisdictional. Nevis v. Fid. New York, F.A.,     104 Nev. 576, 579, 763
                 P.2d 345, 347 (1988) (time limit in NRS 40.455 is procedural, not
                 substantive, and so able to be judicially excused); Vogt v. Dennett, 105
                 Nev. 303, 304-05, 774 P.2d 1036, 1037 (1989) (to similar effect).
                             Nor does Walters v. Eighth Judicial District Court, 127 Nev.
                     263 P.3d 231 (2011), counsel a different rule.    Walters addressed the
                 issue the parties in that case framed: whether the lender's "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."       Id. at
                      263 P.3d at 232. The court held that they did, noting that "NRS
                 40.455(1) does not state how an application should be made" 2 and that


                       2NRS 40.455's lack of specificity distinguishes it from the Utah
                 statute considered in Machock v. Fink, 137 P.3d 779, 786-87 (Utah 2006).
                 Even so, the Utah Supreme Court allowed the lender's pre-foreclosure
                                                                continued on next page . .
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                "Walters fails to argue persuasively that [the lender's] motion for
                summary judgment did not meet the application requirement." Id. at ,
                263 P.3d at 234. Given this holding, the court did not need to decide
                whether, in a waived one-action rule case, the lender's pre-foreclosure-sale
                pleadings (complaint, counterclaim, or cross-claim) qualified as such.
                Issues raised but not decided because the case is resolved on another basis
                do not constitute the holding of a case, much less establish binding
                precedent. Cf. Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 170
                (2004) ("Questions which merely lurk in the record [of earlier cases and
                not] ruled upon, are not to be considered as having been so decided as to
                constitute precedents.").
                             Unlike Walters, Lavi concedes that BB&T's complaint was, in
                form, a qualifying "application" under NRS 40.455. His argument is that
                it was filed early so it didn't count. But Shields, 102 Nev. at 618 n.2, 730


                . . . continued

                complaint that did not meet Utah's technical requirements for a deficiency
                action to be amended after the statutory time to pursue a deficiency
                expired; doing so was consistent with the purposes of the statute "(1) to
                prevent the creditor from purchasing the property for below market value
                at the trustee's sale and then suing the debtor or guarantor for a large
                deficiency,. . . and (2) to provide a debtor or guarantor with prompt notice
                that the creditor intends to pursue a deficiency so as to allow the debtor or
                guarantor to plan its finances." Id. at 786. Since "these purposes were
                met and [the] failure to file a complaint strictly compliant with [Utah's]
                statutory requirements . . . was a procedural defect," the lender's right to a
                deficiency was preserved. Id. This accommodation is more consistent
                with Nevada's rules of pleading and practice than, in effect, requiring a
                superfluous filing entitled "deficiency application" to duplicate an already
                formally compliant complaint.



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                P.2d at 430 n.2, deems a complaint a qualifying "application" under NRS
                40.455. Accord Jamison, 106 Nev. at 797-98, 801 P.2d at 1381 (an answer
                and counterclaim constitute a qualifying application). To read Walters as
                holding that BB&T's complaint—in form, a "qualifying application"—
                needed a post-foreclosure motion on penalty of forfeiture to satisfy NRS
                40.455 is to impose a requirement nowhere stated in the statutes and that
                is inconsistent with Shields and Jamison.          And, while a motion for
                summary judgment was available in Walters within the 6-month post-
                foreclosure-sale time frame, it was coincidental that the case was at the
                stage and in a condition to justify summary judgment practice. What
                about the case that is just beginning or in which, as here, factual disputes
                make summary judgment inappropriate? Surely it is not the rule that a
                pending suit, in which by their complaint and answer the parties have
                joined issue on the sums due under a guaranty after offset, needs to be
                dismissed and refiled in identical form, merely to satisfy an unstated
                requirement of NRS 40.455.      Washington v. State, 117 Nev. 735, 739, 30
                P.3d 1134, 1136 (2001) (a statute should always be construed so as to
                avoid unreasonable or absurd results).
                                                      B.
                            Applying NRS 40.455 to impose a forfeiture on BB&T also
                cannot be squared with Lavi's waiver of "the benefits of the one-action rule
                under MRS Section 40.430 . . . [Co the extent permitted in [NRS]
                40.495(2)." The statute whose benefits Lavi waived, MRS 40.430, provides
                that, "Except in cases where a person proceeds under subsection 2 of NRS
                40.495. . . , there may be but oneS action for the recovery of any debt, or for
                the enforcement of any right secured by a mortgage or other lien upon real
                estate.   That action must be in accordance with the provisions of NRS
                40.430 to 40.459, inclusive. . . ." NRS 40.430(1) (emphasis added). Since
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                   Lavi waived the protections of NRS 40.430, BB&T's action against him did
                   not have to be pursued "in accordance with the provisions of NRS 40.430
                   to 40.459, inclusive." On the contrary, Lavi's waiver authorized BB&T to •
                   proceed against him "separately and independently" from "[ably action to
                   foreclose or otherwise enforce a mortgage or lien and the indebtedness or
                   obligations secured thereby [or] lalny other proceeding against a
                   mortgagor or grantor of a deed of trust." NRS 40.495(2)(c) & (d). 3
                               This does not deprive guarantors who waive the one-action
                   rule of their fair value defenses, as the majority suggests. See NRS 40.459
                   (affording a deficiency defendant the right to have the deficiency
                   calculated by using the greater of the FMV of the property as of the date of
                   sale or the foreclosure sale price). Unlike the time deadlines in NRS
                   40.455, the fair market value approach is substantive, not procedural, in
                   that it serves to avoid the unjust enrichment of the lender.             See
                   Restatement (Third) of Property: Mortgages § 8.4 cmt. a (1997). As an
                   equitable defense designed to avoid unjust enrichment, a borrower or the
                   borrower's guarantor is entitled to a fair market value offset post-
                   foreclosure "whether a statute requires it or not."   Id. To hold otherwise
                   would be to sanction a double recovery, which our law does not allow. See
                   Elyousef v. O'Reilly & Ferrario, L.L.C., 126 Nev. „ 245 P.3d 547,
                   549 (2010). Because the fair market value approach is substantive, I
                   would take it as applicable by virtue of NRS 40.459 to the one
                   "action . . . in accordance with the provisions of NRS 40.430 to 40.459,
                   inclusive" that NRS 40.430 prescribes, and as an available nonstatutory,

                         3 Broad-formwaiver of guarantors in the commercial loan context are
                   routine—and routinely enforceable. See Cal. Civ. Code § 2856.



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                   equitable defense in the "separate [ I and independent [ I . . . action" that
                   NRS 40.495(2) authorizes when a guarantor has waived the protections of
                   the one-action rule. See Restatement (Third) of Property, supra, § 8.4 cmt.
                   b. In the context of a one-action proceeding under NRS 40.430, NRS
                   40.459 mandates the fair value determination. As an equitable defense to
                   a proceeding not subject to the one-action rule, it is not self-executing and
                   thus waived if not raised as an affirmative defense. Restatement (Third)
                   of Property, supra, § 8.4 cmt. a.
                                                        C.
                               Recognizing BB&T's right to proceed "separately and
                   independently" from the one-action rule procedures, including NRS
                   40.455, harmonizes the version of NRS 40.495 at issue in this case with
                   the Legislature's amendment of it to add new subsection 4 in 2011. NRS
                   40.495(4) now specifically addresses the situation where, as here, "before a
                   foreclosure sale .. . the obligee commences an action against a
                   guarantor. . . to enforce an obligation to pay. ... all or part of an
                   indebtedness or obligation secured by a mortgage or lien upon the real
                   property." It expressly gives the guarantor who has waived the one-action
                   rule a fair value defense. Unlike the fair value defense given one-action
                   rule deficiency defendants in NRS 40.459, which directs the court to
                   determine value as of the date of the foreclosure sale, the defense given
                   guarantors in new NRS 40.495(4) calculates fair value according to the
                   value of the property "as of the date of the commencement of the action."
                   And, confirming that the "application" requirement in NRS 40.455 is not
                   needed in an NRS 40.495(2) pre-foreclosure suit against a guarantor, new
                   NRS 40.495(4) imposes no separate "application" requirement, treating
                   the pre-foreclosure complaint as the application.

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                                When the 2011 Legislature added new subsection 4 to NRS
                    40.495, it did not change a word in NRS 40.455 and NRS 40.459, as
                    relevant to this case. Thus, today, NRS 40.495(4) conflicts with NRS
                    40.455 and NRS 40.459, as interpreted by the majority here to apply to
                    NRS 40.495(2) pre-foreclosure suits by lenders against guarantors. NRS
                    40.459 measures FMV as of the date of the foreclosure sale, while NRS
                    40.495(4) measures FMV as of the date of the commencement of the
                    action. And NRS 40.495(4) requires no "application" beyond the lender's
                    complaint against the guarantor, while the majority reads NRS 40.455 as
                    imposing an additional application-by-motion requirement. "Mhis court
                    has a duty to construe statutes as a whole, so that all provisions are
                    considered together and, to the extent practicable, reconciled and
                    harmonized."   Cromer v. Wilson, 126 Nev. 106, 110, 225 P.3d 788, 790
                    (2010). Reading new MRS 40.495(4) in harmony with the rest of NRS
                    40.430-40.512, the more reasonable view is that NRS 40.455 and NRS
                    40.459 do not apply to suits under NRS 40.495(2).
                                Lavi and the majority argue that this reading of MRS 40.430
                    and NRS 40.495(2) repudiates MRS 40.495(3), which provides, "If the
                    obligee maintains an action to foreclose or otherwise enforce a mortgage or
                    lien and the indebtedness or obligations secured thereby, the guarantor,
                    surety or other obligor may assert any legal or equitable defenses provided
                    pursuant to the provisions of NRS 40.451 to NRS 40.4639." But the
                    language "action to foreclose or otherwise enforce a mortgage or lien and
                    the indebtedness or obligations secured thereby" in MRS 40.495(3)
                    necessarily refers to the one action described in NRS 40.430. To read it
                    more broadly would make MRS 40.495(2) inapplicable to all suits by a
                    lender against a guarantor who has waived his NRS 40.430 protections

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                except those prosecuted to final judgment before a foreclosure occurs. This
                is inconsistent with NRS 40.495(2)'s provision that such a suit may
                proceed "separately and independently" from "[ably action to foreclose or
                otherwise enforce a mortgage or lien and the indebtedness or obligations
                secured thereby," NRS 40.495(2)(c), and with new NRS 40.495(4). And, as
                noted above, Lavi's fair value defense exists with or without a statute,
                though today it is assured by NRS 40.495(4).
                            Finally, Lavi argues that NRS 40.453 mandates that NRS
                40.455 and NRS 40.459 apply to NRS 40.495(2) suits. NRS 40.453(1) says
                that, "Except as otherwise provided in NRS 40.495: . . . Lift is hereby
                declared by the Legislature to be against public policy for any document
                relating to the sale of real property to contain any provision whereby a
                mortgagor or the grantor of a deed of trust or a guarantor or surety of the
                indebtedness secured thereby, waives any right secured to the person by
                the laws of this state." (Emphasis added.) Here, in permitting waivers by
                guarantors of NRS 40.430 and providing for suits against them to be
                maintained "separately and independently" from the proceedings, if any,
                against the borrower, NRS 40.495(2) "otherwise provide [s]." Thus, NRS
                40.453 does not apply.


                            "The law abhors a forfeiture." Humphrey rv. Sagouspe, 50 Nev.
                157, 171, 254 P. 1074, 1079 (1927). Yet, that is the result of today's
                holding, which resurrects the clearly waived one-action rule, midsuit, and
                springs it on a lender proceeding "separately and independently" against
                its guarantor as statutorily authorized by NRS 40.495(2). In my view,
                where a guarantor waives his NRS 40.430 rights as permitted under NRS
                40.495(2), and the lender sues the guarantor before foreclosing on the
                borrower's deed of trust, the lender may prosecute its suit against the
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                guarantor to conclusion, subject only to an equitable fair value defense
                pre-2011, and the more specific fair value defense given by NRS 40.495(4),
                post-2011. This is fair to both sides, avoids forfeiture and double recovery,
                and harmonizes NRS 40.495(2) with NRS 40.495(3) and the recently
                enacted NRS 40.495(4).
                            For these reasons, I respectfully dissent.


                                                                                    J.


                I concur:


                   t-trA&A -e.tac
                             s                  J.
                Hardesty




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