Nevada Ruling Suggests Lenders Wait Until Foreclosure Before Pursuing Guarantor Claim

In a recent case, the Supreme Court of Nevada agreed that a lender needed to wait until the completion of a foreclosure sale before making a deficiency claim against a guarantor. In Ken L. Templeton Family Trust, et al. v. Eighth Judicial District Court of the State of Nevada, et al., 2013 WL 476026 (Nev.), the court granted the issuance of a writ of mandamus, instructing the district court to vacate its order granting in part AG/ICC Willows Loan's motion for summary judgment and directing the district court to enter an order denying AG/ICC Willows Loan's motion for summary judgment.

In this case, borrower Carefree Willows, LLC went into default, and then filed for bankruptcy on the eve of foreclosure. While the bankruptcy was pending and before the foreclosure sale, lender Union Bank of California, N.A. ("Union Bank") filed a guaranty complaint for the full debt amount. District Judge Rob Bare granted summary judgment in favor of Union Bank as to liability and