United States District Court, D. Nevada
DITECH FINANCIAL LLC and FEDERAL NATIONAL MORTGAGE ASSOCATION, Plaintiffs,
CHALET VEGAS HOMEOWNERS ASSOCIATION, Defendant.
ORDER DENYING MOTION TO LIFT STAY (ECF NO.
P. GORDON, UNITED STATES DISTRICT JUDGE
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. 3. 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.
Ditech Financial LLS and Federal National Mortgage
Association move to partially lift the stay. 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.
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
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
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.
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.
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. The stay will remain in place until the
proceedings in the Supreme Court have concluded.
Additionally, although the plaintiffs contend that the
defendant has defaulted, I stayed the case. Therefore, the
defendant's answer has not yet become due.
THEREFORE ORDERED that plaintiffs Ditech Financial LLC and
Federal National Mortgage Association's motion to lift
stay (ECF No. 8) is DENIED.
FURTHER ORDERED that this case remains 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.
 The Supreme Court of Nevada stayed the
issuance of the remittitur in Saticoy Bay pending
the Supreme Court's disposition of the certiorari
proceedings. No. 68630, Dkt. No. ...