United States District Court, D. Nevada
J. Dawson United States District Judge.
before the Court is Defendant Tow Properties, LLC IV's
Motion to Dismiss Complaint (#10). Plaintiff filed a response
(#12) to which Defendant Tow Properties, LLC IV replied
(#13). Also before the Court is Defendant Peppertree
Homeowners Association's Motion to Dismiss with Prejudice
(#14). Plaintiff filed a response (#16).
case emerges from Peppertree Homeowners Association's
November 20, 2013 non-judicial foreclosure sale of the
property located at 729 Nectarine Court, Henderson, Nevada
89014 (“the Property”). Both motions presently
before the Court center in whole or in part around the
question of what notice of default Peppertree Homeowners
Association was required to provide Plaintiff prior to its
foreclosure sale on the Property. This case shares a similar
fact pattern with many cases currently pending before this
Court. In the words of Defendant Peppertree Homeowners
Association, it is “one of the hundreds of Homeowners
Association lawsuits filed in this District following the
Nevada Supreme Court's decision in SFR Investments
Pool 1 LLC, v. U.S. Bank, 334 P.3d 408 (Nev. 2014) where
the Nevada Supreme Court held that ‘NRS 116.3116(2)
gives an HOA a true superpriority lien, proper foreclosure of
which will extinguish a first deed of trust.'”
However, after the Nevada Supreme Court's decision in
SFR Investments Pool 1 LLC v. U.S. Bank, the Ninth
Circuit decided Bourne Valley Court Trust v. Wells Fargo
Bank, NA, 832 F.3d 1154, 1160 (9th Cir. 2016), holding
NRS 115.3116(2)'s statutory notice scheme was facially
unconstitutional. In light of Bourne Valley, what
notice an HOA must provide prior to foreclosing on a
superpriority lien remains uncertain.
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).
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 (9th Cir. 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 issues of notice
and actual notice in light of Bourne Valley.
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.
Sua Sponte Stay of the Case
pending 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 further
resources into the issues surrounding the notice requirement,
the Court sua sponte stays all proceedings in this
case and denies all pending motions without prejudice.
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
Damage from a stay
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 ...