United States District Court, D. Nevada
J. Dawson United States District Judge.
before the Court is SFR Investment Pool1, LLC
(“SFR”)'s Counter-Motion to Stay All
Proceedings (#41). JPMorgan Chase Bank, N.A.
(“Bank”), filed a response (#46) to which SFR
December 5, 2016, the Bank filed a complaint seeking
declaratory relief and quiet title. The Bank argues that in
light of the Ninth Circuit's decision in Bourne
Valley and under the return doctrine, NRS Chapter
116's notice scheme should return to its 1991 version.
The Bank alleges that the HOA foreclosure sale at issue did
not extinguish the Bank's deed of trust because NRS
116.3116, as it existed prior to the amendments that took
effect on October 1, 2015, facially violated mortgage
lenders' constitutional due process rights. As such, the
Bank claims that any notice they did receive was inadequate
April 21, 2017, this Court certified the following question
to the Nevada Supreme Court: “Whether NRS §
116.31168(1)'s incorporation of NRS § 107.090
requires homeowners['] associations to provide notices of
default to banks even when a bank does not request
notice?” Bank of New York Mellon v. Star Hill
Homeowners Assoc., 2017 WL 1439671, at *5 (D. Nev. April
21, 2017). In granting certification, the Court reasoned the
following: In Bourne Valley, the Ninth Circuit
definitively stated the statute's “opt-in”
framework is unconstitutional. Bourne Valley Court Trust
v. Wells Fargo Bank, NA, 832 F.3d 1154, 1160 (2016).
However, that leaves this Court with the unresolved question
of what notice must be provided. The Ninth Circuit has stated
“[i]t is solely within the province of the state courts
to authoritatively construe state legislation.”
Cal. Teachers Ass'n v. State Bd. of Educ., 271
F.3d 1141, 1146 (9th Cir. 2001). As such, state law questions
of first impression like this one should be resolved by the
state's highest court. See Huddleston v. Dwyer,
322 U.S. 232, 237 (1944).
Stay of the Case
argues the best course of action for this Court to take in
the present case is to institute a stay until the pending
certified question in Bank of New York Mellon is
resolved by the Nevada Supreme Court. A district court has
the inherent power to stay cases to control its docket and
promote the efficient use of judicial resources. Landis
v. North 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 a stay is appropriate pending the
resolution of another case - often called a
“Landis stay” - the district court must
weigh: (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; and (3) “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). Weighing these
considerations, the Court finds that a Landis stay
Damage from a stay
only potential damage that may result from a stay is that the
parties may have to wait longer for resolution of this case
and any motions that they have filed or intend to file in the
future. But a delay would also result from any rebriefing or
supplemental briefing that may be necessitated pending the
Nevada Supreme Court's answer to the certified question.
It is not clear that a stay will ultimately lengthen the life
of this case.
a stay of this case pending resolution of the certified
question is expected to be reasonably short. This Court
certified the question approximately five months ago, and
briefing on the pending petition in Nevada's Supreme
Court is nearing completion. Because the length of this stay
is directly tied to the petition proceedings in that case, it
is reasonably brief, and not indefinite. Thus, the Court
finds only minimal possible damage that this stay may cause.
Hardship and inequity
parties equally face hardship or inequity if the Court
resolves the claims or issues before the certified question
has been resolved. Further, in the interim both parties stand
to benefit from a stay, regardless of the outcome of the
certified question. A stay will prevent unnecessary ...