United States District Court, D. Nevada
NATIONSTAR MORTGAGE LLC and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a government sponsored enterprise, Plaintiffs,
HIGHLAND RANCH HOMEOWNERS ASSOCIATION and AIRMOTIVE INVESTMENTS, LLC, Defendants.
R. HICKS UNITED STATES DISTRICT JUDGE
motions come before the court: defendant Airmotive
Investments, LLC's motion to dismiss and defendant
Highland Ranch Homeowners' Association's motion for
partial summary judgment. ECF Nos. 13, 30. Plaintiffs
Nationstar Mortgage LLC and Federal National Mortgage
Association (“Fannie Mae”) opposed both motions.
ECF Nos. 15, 31. A reply was filed in response to both
oppositions. ECF Nos. 16, 32.
considering the parties' arguments, the court grants
Airmotive's motion to dismiss in part. The court will
stay this action until the resolution of the parallel
state-court action rather than dismiss it. As a result, the
court denies Highland Ranch's motion for partial summary
judgment as moot.
Williams and Angela Bailey-Williams obtained a loan to
purchase a property located at 6245 Choctaw Court, Sun
Valley, Nevada 89433. ECF No. 31 at Ex. 1. The two executed a
deed of trust to secure the repayment of the loan, which was
recorded in Washoe County, Nevada. Id. Williams
later transferred his interest in the property to
Bailey-Williams via a grant, bargain, and sale deed. ECF No.
31 at Ex. 2.
Mae allegedly acquired the loan in 2005, taking ownership of
the deed of trust and the related promissory note. ECF No. 1,
¶ 27. Nationstar became the servicer of the loan by way
of assignment. Id., ¶¶ 28-31. Between 2011
and 2013, Highland Ranch foreclosed on the property as a
result of delinquent homeowners' association assessments.
Id., ¶¶ 40-44. The foreclosure deed
identified TBD, LLC (a non-party) as the purchaser of the
property at the foreclosure sale. Id., ¶ 44.
TBD deeded the property to TBR I LLC (a non-party), which
then quitclaimed the property to Airmotive. Id.,
and Fannie Mae sued Highland Ranch and Airmotive in federal
court on May 4, 2017. ECF No. 1. 1. The plaintiffs alleged
eight causes of action: (1) declaratory relief under 12
U.S.C. § 4617(j)(3); (2) quiet title under 12 U.S.C.
§ 4617(j)(3); (3) declaratory relief under Amendments
Five and Fourteen to the U.S. Constitution; (4) quiet title
under Amendments Five and Fourteen to the U.S. Constitution;
(5) declaratory judgment under 28 U.S.C. § 2201, N.R.S.
§ 40.010, and N.R.S. 30.040; (6) breach of N.R.S. §
116.1113; (7) wrongful foreclosure; and (8) injunctive
Airmotive sued Bailey-Williams, Nationstar, and Fannie Mae in
state court one week earlier. ECF No. 13, Ex. 1. In the state
action, Airmotive asserted a quiet-title and
declaratory-relief claim against the state-court defendants.
Id. Airmotive also asserted a misrepresentation
claim against Nationstar. Id.
court first considers Airmotive's motion to dismiss.
Because the motion to dismiss results in a stay of this
matter, the court denies Highland Ranch's motion for
partial summary judgment as moot.
Motion to Dismiss
parties dispute whether the Colorado River doctrine
applies to this matter. See ECF Nos. 13, 15, 16.
“Generally ‘the pendency of an action in state
court is no bar to proceedings concerning the same matter in
the [f]ederal court having jurisdiction….'”
Seneca Ins. Co., Inc. v. Strange Land, Inc., 862
F.3d 835, 841 (9th Cir. 2017) (quoting Colo. River Water
Conservation Dist. v. United States, 424 U.S. 800, 817
(1976)). “Abstention from the exercise of federal
jurisdiction is the exception, not the rule.” Colo.
River, 424 U.S. at 813. Accordingly, a strong
presumption against abstention generally governs. Seneca
Ins. Co., 862 F.3d at 842. But still, “[i]n
exceptional circumstances, a federal court may decline to
exercise its ‘virtually unflagging obligation' to
exercise federal jurisdiction, in deference to pending,
parallel state proceedings.” Montanore Minerals
Corp. v. Bakie, 867 F.3d 1160, 1165 (9th Cir. 2017),
as amended on denial of reh'g and reh'g en
banc (Oct. 18, 2017) (quoting Colo. River, 424
U.S. at 817). If exceptional circumstances exist, the Ninth
Circuit “generally require[s] a stay rather than a
dismissal[, ]” which “ensures the federal forum
will remain open if for some unexpected reason the state
forum turns out to be inadequate.” Id.
(quoting Attwood v. Mendocino Coast Dist. Hosp., 886
F.2d 241, 243 (9th Cir. 1989)) (internal quotation marks and
punctuation marks omitted).
courts balance eight factors when determining whether to stay
or dismiss a matter under the Colorado River
(1) which court first assumed jurisdiction over any property
at stake; (2) the inconvenience of the federal forum; (3) the
desire to avoid piecemeal litigation; (4) the order in which
the forums obtained jurisdiction; (5) whether federal law or
state law provides the rule of decision on the merits; (6)
whether the state court proceedings can adequately protect
the rights of the federal litigants; (7) the desire to avoid