United States District Court, D. Nevada
MIRANDA M. DU UNITED STATES DISTRICT JUDGE
case arises out of a homeowner association's
(“HOA”) foreclosure and involves the notice
provisions applicable to foreclosure sales under Nevada
Revised Statutes (“NRS”) Chapter 116. Currently
there is a federal-state split in the interpretation and
effect of the notice provisions found at the pre-2015 version
of NRS Chapter 116. However, a question regarding the
applicable notice provisions was recently certified to the
Nevada Supreme Court, asking whether the notice provisions
found at NRS § 107.090 were incorporated by reference
into the pre-2015 version of NRS § 116.31168. Because
the parties in this action do not dispute that Deutsche Bank
National Trust Company (“Deutsche”) received
actual notice of the HOA's foreclosure sale (see
ECF No. 87 at 27 (not disputing that it received actual
notice but instead contending that actual notice is
irrelevant to the Court's analysis)), this Court sua
sponte stays this action in its entiretyuntil the Nevada
Supreme Court resolves the certified question.
result, the Court denies the four pending motions: (1) SFR
Investments Pool I, LLC's (“SFR”) Renewed
Motion for Partial Summary Judgment Regarding a Pure Issue of
Law: Application of the Return Doctrine Post-Bourne
Valley (“Return Doctrine MPSJ”) (ECF No.
(2) Deutsche's Motion for Partial Summary Judgment (ECF
No. 67); (3) Independence II Homeowners Association's
Second Renewed Motion to Dismiss Claims (ECF No. 78); and (4)
SFR's Countermotion for Relief under Fed.R.Civ.P. 56(d)
(ECF No. 79).
RETURN DOCTRINE MPSJ (ECF No. 66)
moves for partial summary judgment requesting that this Court
find that in the wake of Bourne Valley Court Tr. v. Wells
Fargo Bank, N.A., 832 F.3d 1154, 1156 (9th Cir. 2016),
cert. denied, 137 S.Ct. 2296 (2017), NRS Chapter
116's notice scheme returns to that of the 1991 version
of the statute and thereby eliminates Plaintiffs'
20th affirmative defense as well as their other
claims of unconstitutionality. (ECF No. 66 at 15.) This Court
has already addressed the issue of whether it should analyze
the facts of a particular case under the notice provisions of
the 1991 version of NRS Chapter 116 and declined to do so.
See U.S. Bank National Association v. Thunder Properties
Inc., No 3:15-cv-00328-MMD-WGC, 2017 WL 4102464, *3 (D.
Nev. Sept. 14, 2017).
the Court denies SFR's Return Doctrine MPSJ on the
STAY OF ENTIRE PROCEEDINGS
district court has the inherent power to stay proceedings in
its own court. Landis v. N. Am. Co., 299 U.S. 248,
254-55 (1936). “A trial court may, with propriety, find
it is efficient for its own docket and the fairest course for
the parties to enter a stay of an action before it, pending
resolution of independent proceedings which bear upon the
case.” Leyva v. Certified Grocers of Cal.,
Ltd., 593 F.2d 857, 863 (9th Cir. 1979). In deciding
whether to grant a stay, courts should consider “the
possible damage which may result from the granting of a stay,
the hardship or inequity which a party may suffer in being
required to go forward, and the orderly course of justice
measured in terms of the simplifying or complicating of
issues, proof, and questions of law which could be expected
to result from a stay.” Lockyer v. Mirant
Corp., 398 F.3d 1098, 1110 (9th Cir. 2005) (quoting
Landis, 299 U.S. at 268). Courts should also
consider “the judicial resources that would be saved by
avoiding duplicative litigation.” Pate v. DePuy
Orthopaedics, Inc., No. 2:12-cv-01168-MMD-CWH, 2012 WL
3532780, at *2 (D. Nev. Aug. 14, 2012) (quoting Rivers v.
Walt Disney Co., 980 F.Supp. 1358, 1360 (C.D. Cal.
Court finds that significant judicial resources will be saved
if the Court refrains from issuing a decision in this case
until the Nevada Supreme Court determines whether NRS §
116.31168 incorporates the notice provisions of NRS §
107.090. See SFR Investments Pool 1, LLC v. Bank of New
York Mellon, Nev. S.Ct. Case No. 72931. NRS §§
116.31168 and 107.090 prescribe two fundamentally different
notice mechanisms. The first requires lenders to
affirmatively request notice of foreclosure sales from HOAs.
The second requires HOAs to notify lenders as a matter of
course, regardless of whether a request was made.
Ninth Circuit recently held the first mechanism to be
facially unconstitutional because it impermissibly shifts the
burden to lenders in violation of their procedural due
process rights. Bourne Valley Court Tr., 832 F.3d at
1156. NRS § 107.090 seems to ameliorate this
burden-shifting problem by requiring the HOAs to provide
notice to lenders absent any request from lenders for notice;
however, the Ninth Circuit has held that NRS § 107.090
is not incorporated in NRS § 116.31168. Id. at
1159. If it were, the Ninth Circuit reasoned, the opt-in
notice scheme would be superfluous. Id.
question of whether NRS § 116.31168 incorporates NRS
§ 107.090 is now pending before the Nevada Supreme Court
in Case No. 72931. Moreover, that court has hinted it will
answer the question in the affirmative. See Nationstar
Mortg., LLC v. Saticoy Bay LLC Series 227 Shadow Canyon,
405 P.3d 641, 648 n.11 (Nev. 2017). If the Nevada Supreme
Court holds that NRS § 107.090 is incorporated, then a
factual question would arise in this case: did the HOA
provide notice to the lender consistent with NRS §
107.090? As the law stands currently, it is irrelevant
whether the HOA provided notice to the lender-foreclosure
sales conducted pursuant to Chapter 116 could not have
satisfied the lenders' constitutional due process rights.
See, e.g., U.S. Bank, N.A. v. Emerald Ridge
Landscape Maint. Ass'n, No. 2:15-cv-00117-MMD-PAL,
2017 WL 4386967, at *3 (D. Nev. Sept. 29, 2017). But if NRS
§ 116.31168 incorporated NRS § 107.090, then some
foreclosure sales may have satisfied constitutional due
process requirements (i.e., those in which HOAs gave lenders
notice consistent with NRS § 107.090). Because actual
notice occurred here, resolution of the certified question is
Court therefore stays all proceedings in this case until
resolution of the certified question in Nev. S.Ct. Case No.