Recent Nevada Supreme Court Decision on Conflict of Laws in Deficiency Actions

In Soro v. The Eighth Judicial District Court, 133 Nev., Adv. Op. 107, Case No. 72086 (Dec. 28, 2017), the Nevada Supreme Court addressed the application of the anti-deficiency statutes of other states in Nevada deficiency actions. Soro involved a deficiency action for commercial real property located in Nevada; however, the promissory note specified that Utah law governed the agreement and loan documents. Nevada’s anti-deficiency statute allows a deficiency action to be filed within six months of the foreclosure sale, but Utah’s anti-deficiency statute requires that suit be filed within three months of the foreclosure sale. The lawsuit was filed in Nevada six months after the foreclosure sale, and the debtor filed a motion to dismiss as a result. Although the parties agreed that Utah law governed the deficiency action, the Utah Supreme Court had already determined that the Utah anti-deficiency statute did not apply extraterritorially. Therefore, the Nevada anti-deficiency statute applied rather than the Utah anti-deficiency statute, and the motion to dismiss was properly denied by the district court. Soro affirmed and clarified the Nevada Supreme Court’s prior decision in Key Bank of Alaska v. Donnels, 106 Nev. 49, 787 P.2d 382 (1990), holding that before an anti-deficiency statute can be applied extraterritorially, the Court must determine whether the statute was intended to be applied extraterritorially.

Megan K. Mayry McHenry, Esq.


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