United States District Court, D. Nevada
ORDER(1)DENYING MOTION TO LIFT STAY AND (2) DEEMING
ORDER TO SHOW CAUSE SATISFIED (ECF No. 114)
ANDREW
P. GORDON, UNITED STATES DISTRICT JUDGE
This is
one of many disputes over the effect of a nonjudicial
foreclosure sale conducted by a homeowners association
(“HOA”) after the prior owner failed to pay HOA
assessments. On August 12, 2016, a divided Ninth Circuit
panel in Bourne Valley Court Trust v. Wells Fargo
Bank held that Nevada Revised Statutes Chapter 116's
HOA nonjudicial foreclosure scheme, as it existed before the
statutory scheme was amended in 2015, “facially
violated mortgage lenders' constitutional due process
rights.” 832 F.3d 1154, 1155 (9th Cir. 2016); but
see Id. at *6-11 (Wallace, J., dissenting). I previously
stayed this case pending issuance of the mandate in
Bourne Valley because counsel for the purchaser in
that case had indicated that he would be filing a motion for
panel rehearing and rehearing en banc. ECF No. 109. Those
motions were denied and the mandate issued on December 14,
2016. Bourne Valley Court Tr. v. Wells Fargo Bank,
9th Cir. Dkt. No. 15-15233, ECF Nos. 75, 76.
Plaintiff
Carrington Mortgage Services, LLC moves to lift the stay
because the mandate in Bourne Valley has issued.
However, the Supreme Court of Nevada recently decided
Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo
Home Mortgage, holding that “the Due Process
Clauses of the United Sates and Nevada Constitutions are not
implicated in an HOA's nonjudicial foreclosure of a
superpriority lien.” 388 P.3d 970, 975 (Nev. 2017). The
losing parties in both Bourne Valley and Saticoy
Bay have indicated they intend to file petitions for
certiorari in the United States Supreme Court. Because
Bourne Valley and Saticoy Bay reached
opposite conclusions, the constitutionality of Nevada's
HOA nonjudicial foreclosure scheme may be decided by the
United States Supreme Court. See Sup. Ct. R. 10(b)
(identifying as a compelling reason for granting certiorari
that “a state court of last resort has decided an
important federal question in a way that conflicts with the
decision . . . of a United States court of appeals”). I
therefore sua sponte continue the stay in this case
pending a decision on the petitions for certiorari in
Bourne Valley and Saticoy Bay.
A
district court has the inherent power to stay cases to
control its docket and promote the efficient use of judicial
resources. Landis v. N. Am. Co., 299 U.S. 248,
254-55 (1936); Dependable Highway Exp., Inc. v.
Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir.
2007). When determining whether to stay a case pending the
resolution of another case, I must consider (1) the possible
damage that may result from a stay, (2) any “hardship
or inequity” that a party may suffer if required to go
forward, (3) “and the orderly course of justice
measured in terms of the simplifying or complicating of
issues, proof, and questions of law” that a stay will
engender. Lockyer v. Mirant Corp., 398 F.3d 1098,
1110 (9th Cir. 2005). I find that a Landis stay is
appropriate here.
The
crux of the parties' dispute is whether the HOA
foreclosure sale extinguished the deed of trust. If the HOA
sale was void because Chapter 116 is facially
unconstitutional, then the parties' dispute is, in large
part, resolved or at least simplified. The Supreme
Court's consideration of the petitions in Bourne
Valley and Saticoy Bay thus could be
dispositive of this case, or at least of significant issues
in the case. As the jurisprudence and the parties'
arguments in this area evolve, the parties file new motions
or move to supplement the pending briefs, burdening our
already-busy docket. Bourne Valley and Saticoy
Bay no doubt will inspire more motions and supplements.
Staying this case pending the Supreme Court's disposition
of the petitions in Bourne Valley and Saticoy
Bay will permit the parties to present arguments and
evidence in the context of complete and resolved precedent,
and it will allow me to evaluate the claims in light of this
legal authority. Consequently, a stay pending the disposition
of the certiorari proceedings will simplify the proceedings
and promote the efficient use of the parties' and the
court's resources.
Resolving
the claims or issues in this case before the Supreme Court
decides whether to grant or deny the petitions could impose a
hardship on both parties. A stay will prevent unnecessary or
premature briefing on Bourne Valley and Saticoy
Bay's impact on this case.
The
potential damage that may result from a stay is that the
parties will have to wait longer for resolution of this case
and any motions that they intend to file in the future. But a
delay would also result from new briefing that may be
necessitated if the Supreme Court grants certiorari. So a
stay pending the Supreme Court's decision will not
necessarily lengthen the life of this case. Any possible
damage that a stay may cause is minimal.
Finally,
I expect the stay pending the Supreme Court's disposition
of the petitions for certiorari to be reasonably short. The
petition in Bourne Valley was filed on April 3,
2017. The petition in Saticoy Bay is due April 25,
2017. The length of this stay is tied to the Supreme
Court's decision on the petitions for certiorari, so the
stay will be reasonably brief and is not
indefinite.[1] The stay will remain in place until the
proceedings in the Supreme Court have concluded.
I deem
the order to show cause (ECF No. 109) satisfied. Although
defendant Hampton & Hampton Collections, LLC argues that
Carrington is a California citizen because it is
headquartered there, the membership of a limited liability
company is determined by the citizenship of its members, not
by its principal place of business. See Johnson v.
Columbia Properties Anchorage, LP, 437 F.3d 894, 899
(9th Cir. 2006) (stating that “an LLC is a citizen of
every state of which its owners/members are citizens”).
It appears diversity jurisdiction exists in this case and I
therefore will not dismiss for lack of subject matter
jurisdiction.
IT IS
THEREFORE ORDERED that plaintiff Carrington Mortgage
Services, LLC's motion to lift stay (ECF No. 114) is
DENIED without prejudice.
IT IS
FURTHER ORDERED that this case is administratively STAYED.
Once the proceedings in the United States Supreme Court in
Bourne Valley Court Trust v. Wells Fargo Bank and
Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo
Home Mortgage have concluded, any party may move to lift
the stay.
IT IS
FURTHER ORDERED that the order to show cause (ECF No. 109) is
deemed satisfied.
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