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. Saticoy
Bay LLC Series 7712 Beach Falls (“Saticoy Bay”)
contends that PHH Mortgage Corporation (“PHH”)
received notice of the HOA's foreclosure sale. (ECF No.
54 at 3-4.) Accordingly, this Court sua sponte stays
this action in its entirety until the Nevada Supreme Court
resolves the certified question.
PHH'S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF No.
argues that the Property Clause of the United States
Constitution precludes the HOA's foreclosure sale from
extinguishing PHH's deed of trust (“DOT”).
(ECF No. 55 at 7.) PHH contends that the Property Clause
protects PHH's DOT because PHH's mortgage is insured
by the Department of Housing and Urban Development
(“HUD”) through its Single Family Mortgage
Insurance Program, also known as FHA insurance.
(Id.) However, HUD-insured mortgages do not receive
the protection of the Property Clause under these
circumstances. See Freedom Mortg. Corp. v. Las Vegas Dev.
Corp., 106 F.Supp.3d 1174, 1177 (D. Nev. 2015).
Accordingly, the Court denies PHH's motion on the merits
to the extent it relies on this argument.
SATICOY BAY'S MOTION TO DISMISS (ECF No. 41)
Bay 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. 41 at 17-18.) 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 Saticoy
Bay's motion on the merits to the extent it relies on
SATICOY BAY'S COUNTERMOTION FOR RELIEF (ECF No.
Bay again argues that NRS Chapter 116's notice scheme
returns to that of the 1991 version of the statute in its
Countermotion for Relief. (ECF No. 50 at 19-22.)
Court denies Saticoy Bay's motion on the merits to the
extent it relies on this argument. See discussion
supra at Sect. III.
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. 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 ...