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Wells Fargo Bank, N.A. v. MEI-GSR Holdings, LLC

United States District Court, D. Nevada

March 3, 2017

WELLS FARGO BANK, N.A., Plaintiff,
v.
MEI-GSR HOLDINGS, LLC, and GRAND SIERRA RESORT UNIT-OWNERS' ASSOCIATION, Defendants.

          ORDER

          Gloria M. Navarro, Chief Judge.

         Pending before the Court is the Motion to Rescind, (ECF No. 30), filed by Defendants MEI-GSR Holdings, LLC ("MEI-GSR"), and Grand Sierra Resort Unit-Owners' Association (the "HO A") (collectively "Defendants"). Plaintiff Wells Fargo Bank, NA. ("Wells Fargo"), filed a Response, (ECF No. 38), and Defendants filed a Reply, (ECF No. 39). For the reasons discussed below, the Court GRANTS in part and DENIES in part Defendants' Motion.[1]

         I. BACKGROUND

         This case arises out of a homeowners' association foreclosure sale. On May 1, 2007, Elizabeth L. Andres Mecua purchased real property located at 2500 East Second Street #1940, Reno, Nevada 89595 (the "Property"), giving lender Bank of America, NA. ("BANA") a promissory note for $227, 324.00 (the "Note"), secured by a deed of trust (the "DOT") against the Property. (Am. Compl. ¶ 11, ECF No. 20; Ex. A to Am. Compl, ECF No. 20-1). On October 22, 2013, BANA assigned the DOT to Wells Fargo via a corporate assignment of deed of trust. (Am. Compl ¶ 12; Ex. B to Am. Compl, ECF No. 20-2).

         After recording a Notice of Delinquent Assessment Lien, a Notice of Default and Election to Sell, and a Notice of Foreclosure Sale, the HOA, through its agent Alessi & Koenig, LLC, sold the Property at the foreclosure sale to MEI-GSR for $4, 300.00 on June 6, 2013. (Am. Compl. ¶¶ 16-18, 24-25; Ex. C to Am. Compl., ECF No. 20-3). Wells Fargo alleges that the pre-sale notices failed to identify the super-priority amount and also failed to describe the “deficiency in payment” required by Chapter 116 of the Nevada Revised Statutes. (Id. ¶¶ 19- 23).

         Wells Fargo sued MEI-GSR and the HOA in this Court to, inter alia, quiet title to the Property, i.e., for a declaration that the DOT still encumbers the Property because the HOA sale was not in accordance with Chapter 116, did not provide an opportunity to cure the default, was commercially unreasonable, and did not comport with due process. (Id. ¶¶ 35-52).

         On July 11, 2016, the Court determined that “an unsettled question of state law is at least partially dispositive in this case” and sua sponte certified the following question to the Nevada Supreme Court:

Does the rule of SFR Investments Pool I, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) that foreclosures under NRS 116.3116 extinguish first security interests apply retroactively to foreclosures which occurred prior to the date of that decision?

(Order 1:11-17, ECF No. 27). The Court simultaneously denied all pending motions. (See Id. 4:2-4). In the instant Motion, Defendants ask the Court to rescind its Order and reinstate Defendants' Motion to Dismiss, (ECF No. 12). (Mot. to Rescind 4:17-20, ECF No. 30). The Court construes Defendants' request as a Motion to Reconsider.

         II. LEGAL STANDARD

         “[A] motion for reconsideration should not be granted, absent highly unusual circumstances.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (citation omitted). Reconsideration is appropriate where: (1) the court is presented with newly discovered evidence, (2) the court committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law. School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). However, a motion for reconsideration is not a mechanism for rearguing issues presented in the original filings, Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985), or “advancing theories of the case that could have been presented earlier, Resolution Trust Corp. v. Holmes, 846 F.Supp. 1310, 1316 (S.D. Tex. 1994) (footnotes omitted). Thus, Rule 59(e) and 60(b) and are not “intended to give an unhappy litigant one additional chance to sway the judge.” Durkin v. Taylor, 444 F.Supp. 879, 889 (E.D. Va. 1977).

         III. DISCUSSION

         Defendants argue that the question of whether to apply a state law retroactively is a matter of federal law, not state law, for federal courts and therefore inappropriate for certification to the Nevada Supreme Court. (Mot. to Rescind 2:5-16). On this point, the Ninth Circuit has clarified:

When we consider a matter of state law, . . . “[w]e are required . . . to apply the law as presently defined by the highest court of [the State], despite the fact that the law was ...

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