United States District Court, D. Nevada
before the court is a stipulation for extension of time
regarding the dispositive motions deadline. (ECF No. 103).
February 23, 2017, the court granted SFR Investments Pool 1,
LLC's (“SFR”) motion for summary judgment
(ECF No. 68), to which Elkhorn Community Association (the
“HOA) joined (ECF No. 72), on its quiet title
counterclaim (ECF No. 13) against Ditech Financial LLC f/k/a
Green Tree Servicing, LLC (“Ditech”). (ECF No.
87). In light of the court's February 23rd order, the
claims that remain are as follows: Ditech's claims
against the HOA for breach of NRS 116.1113 and wrongful
foreclosure (ECF No. 44); and the HOA's third-party
complaint against Absolute Collection Services, LLC
(“ACS”) for breach of contract, indemnity, and
contribution (ECF No. 21).
instant stipulation, Ditech, the HOA, and ACS (collectively,
as the “parties”) assert that a mediation request
has been submitted to the Nevada Real Estate Division
(“NRED”), but “despite the statutory
requirement that NRED appoint a mediator within 60 days,
” NRED has yet to appoint a mediator. (ECF No. 103 at
2). The parties thus request a 90-day extension of the
dispositive deadline to allow continued efforts to complete
mediation. (ECF No. 103).
initial matter, nothing in NRS 38.330 provides that
NRED's failure to appoint a mediator within 60 days
constitutes exhaustion, nor does the statute place the burden
on NRED to complete mediation within a specified period of
time. Rather, the burden is on the parties to either complete
mediation within 60 days after the filing of a written claim
or agree to extend the time to complete mediation.
Specifically, subsection (1) of NRS 38.330 states that
“[u]nless otherwise provided by an agreement of the
parties, mediation must be completed within 60 days after the
filing of the written claim.” Nev. Rev. Stat. §
(1) of NRS 38.310 provides, in relevant part, as follows:
No civil action based upon a claim relating to [t]he
interpretation, application or enforcement of any covenants,
conditions or restrictions applicable to residential property
. . . or [t]he procedures used for increasing, decreasing or
imposing additional assessments upon residential property,
may be commenced in any court in this State unless the action
has been submitted to mediation.
Nev. Rev. Stat. § 38.310(1). Subsection (2) continues by
stating that a “court shall dismiss any civil action
which is commenced in violation of the provisions of
subsection 1.” Nev. Rev. Stat. § 38.310(2).
Ditech has submitted a request for mediation, the parties
have not participated in mediation. Thus, Ditech has not
exhausted its administrative remedies and must mediate
certain claims-specifically, its wrongful foreclosure and
breach of NRS 116.1113 claims-prior to initiating an action
“civil action” includes any actions for monetary
damages or equitable relief. See Nev. Rev. Stat.
§ 38.300(3). “A wrongful foreclosure claim
challenges the authority behind the foreclosure, not the
foreclosure act itself.” McKnight Family, L.L.P. v.
Adept Mgmt., 310 P.3d 555, 559 (Nev. 2013) (citing
Collins v. Union Fed. Sav. & Loan, 662 P.2d 610,
623 (Nev. 1983)). “The material issue in a wrongful
foreclosure claim is whether ‘the trustor was in
default when the power of sale was exercised.'”
Turbay v. Bank of Am., N.A., No.
2:12-CV-1367-JCM-PAL; 2013 WL 1145212, at *4 (quoting
Collins, 662 P.2d at 623). “Deciding a
wrongful foreclosure claim against a homeowners'
association involves interpreting covenants, conditions or
restrictions applicable to residential property.”
McKnight Family, L.L.P., 310 P.3d at 559.
“This type of interpretation falls under NRS
38.310.” Id. Additionally, NRS 38.310 applies
to laws “contain[ing] conditions and restrictions
applicable to residential property.” Id. at
Ditech's breach of NRS 116.1113 claim alleges a NRS
violation, which requires an interpretation of the
regulations and statutes that contained conditions and
restrictions applicable to the property so as to fall within
the scope of NRS 38.310.
Ditech must first submit these claims to mediation before
proceeding with a civil action. See e.g., U.S.
Bank, N.A. v. Woodchase Condo. Homeowners Ass'n, No.
215CV01153APGGWF, 2016 WL 1734085, at *2 (D. Nev. May 2,
2016); Saticoy Bay, LLC Series 1702 Empire Mine v. Fed.
Nat'l Mortg. Ass'n, No. 214-cv-01975-KJD-NJK,
2015 WL 5709484, at *4 (D. Nev. Sept. 29, 2015).
NRS 38.350 expressly tolls the statute of limitations
applicable to Ditech's claims that are subject to
mediation under NRS 38.310. Specifically, NRS 38.350 provides
that “[a]ny statute of limitations applicable to a
claim described in NRS 38.310 is tolled from the time the
claim is submitted to mediation . . . until the conclusion of
mediation . . . of the claim and the period for vacating the
award has expired.” Nev. Rev. Stat. § 38.350.
Therefore, Ditech's claims are not prejudiced by the
statute's requirement that the parties participate in
mediation prior to initiating an action in court.
light of the foregoing, the court will dismiss, without
prejudice, claims (3) and (4) of Ditech's complaint (ECF
No. 44) for Ditech's failure to mediate pursuant to NRS
38.310. See, e.g., Nev. Rev. Stat. § 38.310(1);
McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555
the court will dismiss, without prejudice, the HOA's
third-party complaint (ECF No. 21) against ACS as the claims
asserted therein are predicated on the outcome of
Ditech's claims that are subject to mediation. Upon the