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Bank of New York Mellon v. Hillcrest at Summit Hills Homeowners Association

United States District Court, D. Nevada

January 24, 2018

THE BANK OF NEW YORK MELLON, Plaintiff,
v.
HILLCREST AT SUMMIT HILLS HOMEOWNERS ASSOCIATION et al., Defendants.

          ORDER

          Kent J. Dawson, United States District Judge.

         Presently before the Court is Plaintiff's Motion for Summary Judgment (#45). Defendant Edward Kielty Trust filed a response (#59) to which Plaintiff replied (#63). Also before the Court is Defendant Edward Kielty Trust's Motion for Summary Judgment (#46). Plaintiff filed a response (#58) to which Defendant Edward Kielty Trust replied (#62). Also before the Court is Defendant Hillcrest at Summit Hills Homeowners Association's Motion to Dismiss Amended Complaint (#71). Plaintiff filed a response (#74) to which Defendant Hillcrest at Summit Hills Homeowners Association replied (#76). Also before the Court is Defendant Hillcrest at Summit Hills Homeowners Association's Motion to Dismiss Amended Complaint (#73). Plaintiff filed a response (#75) to which Defendant Hillcrest at Summit Hills Homeowners Association replied (#77).

         I. Background

         This case emerges from Summit Hills Homeowners Association's May 2013 non-judicial foreclosure sale of the property located at 2216 Calm Sea Avenue, Las Vegas, Nevada 89106 (“the Property”). All motions presently before the Court center in whole or in part around the question of what notice of default Summit Hills Homeowners Association was required to provide Plaintiff prior to its foreclosure sale on the Property.

         II. Analysis

         A. Certified Question

         On April 21, 2017, in Bank of New York Mellon v. Star Hills Homeowners Association, 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 answered the question that the statute's “opt-in” framework was 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. “It 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). Allowing the Nevada Supreme Court to answer this question before considering any other motions will provide this Court the necessary guidance as to how to handle the issue of notice and actual notice in light of Bourne Valley.

         In Bank of New York Mellon, the Court did not and could not rely upon any controlling state law as to the requirements of notice. This Court faces the same predicament here. An answer to the above already certified question will provide much needed clarity, and may be dispositive of many of the issues currently before the Court in this case.

         B. Sua Sponte Stay of the Case

         The pending motions for summary judgment and motions to dismiss in this case implicate the previously certified question regarding what notice state law requires. To save the parties from the need to invest resources in discovery surrounding the notice requirement, the Court sua sponte stays all proceedings in this case and denies all pending motions without prejudice.

         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 is appropriate.

         1. Damage from a stay

         The only potential damage that may result from a stay is that the parties will 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 ...


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