Nevada Supreme Court Cabins Statute Eliminating Limitations Period On Deposit Claims Against Banks

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[co-author: Dick Thomson]

On November 20, 2020, the Nevada Supreme Court handed banks a significant victory by agreeing with the Defendant bank’s interpretation of a Nevada statute concerning the application of statutes of limitation.

In Cantlon v. Wells Fargo Bank, N.A., et al., addressing certified questions from the Bankruptcy Court for the District of Nevada, the Nevada Supreme Court rejected the argument that the statute eliminates temporal limits on claims against banks relating to deposit accounts. Because several other western states—including California—have nearly identical statutes, the Court’s opinion should have persuasive effect beyond Nevada. Ballard Spahr attorneys Dick Thomson and Amy Schwartz successfully briefed the case to the Nevada Supreme Court on behalf of Wells Fargo.

In her bankruptcy case, Plaintiff Margaret Cantlon asserted a number of state law claims against Wells Fargo. Wells Fargo moved to dismiss on the basis of the statutes of limitation for each of the claims. Ms. Cantlon opposed, relying on Nevada Revised Statute 11.290 which provides:

Except as otherwise provided in subsection 5 of NRS 104.3118, to actions brought to recover money or other property deposited with any bank, credit union, banker, trust company or savings and loan society, there is no limitation.

After hearing argument, the bankruptcy court judge sua sponte certified the following questions to the Nevada Supreme Court:

  • Under Nevada law, does NRS 11.290 apply to any and all actions or claims that may be brought against a bank for any reason?
  • Does NRS 11.290 apply to claims for elder exploitation pursuant to NRS 41.1395, breach of fiduciary duties, violation of Nevada’s Deceptive Trade Practices Law-NRS 598, breach of confidential relationship, negligent hiring, retention, and supervision of certain employees, violations of expectation of privacy, and/or conversion?
  • Does NRS 11.290 apply when the claims asserted against a bank seek statutory double or treble damages, compensatory damages, restitution, punitive damages, special and general damages, and disgorgement?

In 2019, the parties briefed the certified questions to the Nevada Supreme Court. Wells Fargo argued that Nevada’s statutes of limitation govern the claims and that NRS 11.290 is inapplicable.

By its order, the Nevada Supreme Court agreed with Wells Fargo, holding that the statutes of limitation for each alleged claim take precedence over the general sweep of NRS 11.290. Had the plaintiff’s interpretation prevailed, the time for commencing deposit-RELATED claims against banks in Nevada would be limitless. The Court’s order makes clear that banks are on an equal footing with other litigants when such claims are made.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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