from a district court order granting summary-judgment in a
quiet title action. Eighth Judicial District Court, Clark
County; Douglas Smith, Judge.
P. Faughnan, North Las Vegas, for Appellant.
& Wyman LLP and Colt B. Dodrill, Las Vegas, for
Respondent. BEFORE DOUGLAS, GIBBONS and PICKERING, JJ.
appeal, we consider the effect of a sale of real property
situated in Nevada in violation of an automatic stay from the
homeowners' bankruptcy proceedings commenced in Texas.
This court was presented with a purported conflict of laws
issue due to where the real property was situated and where
the bankruptcy proceedings commenced, to which the United
States Court of Appeals for the Ninth Circuit law would apply
to the former and Fifth Circuit law would apply to the
latter. However, under either circuit, the immediate effect
of property sold in violation of an automatic stay is the
same. Accordingly, we conclude that there is no conflict of
laws issue here because under both the Ninth and Fifth
Circuits, a sale conducted during an automatic stay in
bankruptcy proceedings is invalid. Therefore, the district
court properly granted respondent's motion for summary
AND PROCEDURAL HISTORY
property at issue is located in Las Vegas. Homeowners
encumbered the property with a note and deed of trust that
were ultimately assigned to respondent Green Tree Loan
Servicing LLC. When the homeowners filed for bankruptcy in
Texas, they listed the property in their relevant bankruptcy
schedule but failed to list the homeowners' association
(HOA) as a creditor. During the bankruptcy proceedings and
without seeking relief from the automatic stay, the HOA
recorded a default and notice of sale and ultimately sold the
property to appellant LN Management LLC. Appellant sought to
quiet title in the district court, and respondent disputed
the validity of the HOA sale by filing a complaint in
intervention. Respondent then moved for summary
judgment. Ultimately, the district court granted
respondent's motion for summary judgment by concluding
that Ninth Circuit law controls, respondent has standing as a
creditor to enforce the automatic stay in the homeowners'
bankruptcy, and the HOA foreclosure sale was void due to the
violation of the automatic stay. This appeal followed.
court reviews a district court's order granting summary
judgment de novo. Wood v. Safeway, Inc., 121 Nev.
724, 729, 121 P.3d 1026, 1029 (2005). Summary judgment is
proper if the pleadings and all "other evidence on file
demonstrate that no genuine issue as to any material fact
[remains] and that the moving party is entitled to a judgment
as a matter of law." Id. (alteration in
original) (internal quotation marks omitted). Acts in
violation of a bankruptcy automatic stay are invalid
irrespective of which circuit law applies
argues that the district court erred in granting
respondent's motion for summary judgment. In particular,
appellant looks to Texas, as the state where the homeowners
commenced their bankruptcy proceedings, to argue that the HOA
foreclosure sale is voidable pursuant to Fifth Circuit law.
Conversely, respondent looks to where the property is
situated to argue that the HOA foreclosure sale is void
ab initio pursuant to Ninth Circuit law and, thus,
the district court did not err in granting respondent's
motion for summary judgment.
automatic stay takes effect on the date the bankruptcy
petition was filed, regardless of whether the creditor or
other affected entity has knowledge of the bankruptcy and
without the necessity of any formal service of process or
notice to the creditors." 9B Am. Jur. 2d
Bankruptcy § 1698 (2016) (footnotes omitted). Thus,
"the automatic stay is effective against the world,
regardless of notice." Id.
the HOA foreclosure sale was an act in violation of the
automatic stay, despite the lack of notice of the
homeowners' bankruptcy. The immediate effect of this act
is the same regardless of which circuit law is applied. Thus,
no conflict of laws issue arises at this point. Rather, it is
the available recourse after a sale in violation of an
automatic stay that distinguishes Ninth Circuit law from
Fifth Circuit law.
Ninth Circuit has held that acts in violation of the
automatic stay are void ab initio, whereas the Fifth
Circuit has held that such violations are voidable. See
In re Schwartz,954 F.2d 569, 571 (9th Cir. 1992);
In re Sikes v. Global Marine, Inc.,881 F.2d 176,
178 (5th Cir. 1989). "This [latter] position rests on
the bankruptcy court's statutory power to annul the
automatic stay, i.e., to lift the automatic stay
retroactively and thereby validate actions which otherwise
would be void." In re Coho Res., Inc., 345 F.3d
338, 344 (5th Cir. 2003) (footnote and internal quotation
marks omitted). In other words, the difference between a void
and a voidable transaction is that the former "can never
become valid, " and the latter "can be made valid
by subsequent judicial decision. Until that decision is
rendered, however, it is not valid." In re
Pierce,272 B.R. 198, 207 n.2l (Bankr.S.D.Tex. 2001).
Thus, under federal law in Texas, retroactive relief from the
stay may be granted under some circumstances to validate the
transaction; however, in general, an act in violation of the
automatic stay has no effect, even if the parties did not
have notice of the bankruptcy. Id. at 211.
Accordingly, it is well recognized in the Fifth ...