United States District Court, D. Nevada
THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK as Trustee for the CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2005-J12 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-J12, Plaintiff,
IMAGINATION NORTH LANDSCAPE MAINTENANCE ASSOCIATION; SFR INVESTMENTS POOL 1, LLC; and ALESSI & KOENIG, LLC, Defendants.
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. SFR
Investments Pool 1, LLC (“SFR”) contends that The
Bank of New York Mellon (“BNYM”) received actual
notice of the HOA's foreclosure sale. (See ECF
No. 97 at 6.) Accordingly, this Court sua sponte
stays this action in its entirety until the Nevada Supreme
Court resolves the certified question.
SFR'S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No.
SFR Investments Pool 1, LLC (“SFR”) argues that,
in the wake of Bourne Valley, NRS Chapter 116's
notice scheme returns to that of the 1991 version of the
statute and thereby eliminates any constitutional problems.
(ECF No. 86 at 5.) 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
Nat'l Ass'n v. Thunder Props. Inc., No
3:15-cv-00328-MMD-WGC, 2017 WL 4102464, *3 (D. Nev. Sept. 14,
2017). Accordingly, the Court denies SFR's Motion for
Partial Summary Judgment.
STAY OF ENTIRE PROCEEDINGS
district court has discretionary 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 in 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 facially
unconstitutional because it impermissibly shifts the burden
to lenders in violation of their procedural due process
rights. 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 § 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
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). SFR contends that
BNYM received such notice in this case. (See ECF No.
97 at 6.)
parties may be concerned that a stay will prejudice them.
However, any damage to the parties from a stay will be
outweighed by the fees that all parties will surely incur
from continued litigation-a decision in the proceedings
before the Nevada Supreme Court could moot a decision by this
Court. Until there is finality on the issue of whether NRS
§ 116.31168 incorporates NRS § 107.090, a stay will
benefit the parties and conserve judicial resources.
therefore ordered that this action is temporarily stayed
until resolution of the certified question in Nev. S.Ct. Case
No. 72931. The stay will be lifted upon such resolution. The
parties must ...