U.S. Bank N.A. v. Sfr Investments Pool 1, LLC

          KIM GILBERT EBRON, DIANA S. EBRON, ESQ. Nevada Bar No. 10580 JACQUELINE A. GILBERT, ESQ. Nevada Bar No. 10593, Attorney for SFR Investments Pool 1, LLC

          TYSON & MENDES, LLP, CHRISTOPHER AMMON LUND, ESQ. Nevada Bar No. 12435 THOMAS E. MCGRATH, ESQ. Nevada Bar No. 7086, Attorney for Canyon Gate Master Association

          BALLARD SPAHR LLP, ABRAN E. VIGIL, ESQ. Nevada Bar No. 7548 SYLVIA O. SEMPER, ESQ. Nevada Bar No. 12863, Attorney for Plaintiff/Counter-Defendant

          STIPULATION AND ORDER TO STAY LITIGATION PENDING FINAL RESOLUTION OF CERTIFIED QUESTION BEFORE THE NEVADA SUPREME COURT (FIRST REQUEST)

         Pursuant to LR IA 6-2 and LR 7-1, Defendant/Counterclaimant/Cross-Claimant, SFR INVESTMENTS POOL 1, LLC (“SFR”), Plaintiff/Counter-defendant U.S. BANK, N.A., SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A., SUCCESSOR TO LASALLE BANK, N.A., AS TRUSTEE, ON BEHALF OF THE HOLDERS OF THE WAMU MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-AR16 TRUST (“U.S. Bank”), and Defendant/Third-Party Plaintiff CANYON GATE MASTER ASSOCIATION (collectively, the “Parties”), by and through their respective undersigned counsel of record, hereby submit the following Stipulation and Order Staying Case Pending Resolution of Certified Question Before the Nevada Supreme Court:

         1. This lawsuit involves the parties seeking quiet title/declaratory relief and other claims related to a non-judicial homeowner's foreclosure sale conducted on a Property pursuant to NRS Chapter 116.

         2. On August 12, 2016, the Ninth Circuit issued its decision in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d 1154, 1156 (9th Cir. 2016) (“Bourne Valley ”) holding that NRS Chapter 116 is facially unconstitutional.

         3. On January 26, 2017, the Nevada Supreme Court issued its decision in Saticoy Bay LLC Series 350 Durango v. Wells Fargo Home Mortg, 388 P.3d 970 (Nev. 2017) (“Saticoy Bay”), holding, in direct contrast to Bourne Valley, that no state action supported a challenge under the Due Process Clause of the United States Constitution. The Nevada Supreme Court further concluded in Saticoy Bay that since due process was not implicated and it “need not determine whether NRS 116.3116 et seq. incorporates the notice requirements set forth in NRS 107.090, ” thereby requiring notice to subordinate mortgage lenders. Saticoy Bay, 388 P.3d at 974.

         4. The Nevada Supreme Court's decision in Saticoy Bay calls into question the Bourne Valley court's conclusions and creates a split in authority between the state and federal courts on the same issue.

         5. Accordingly, on April 26, 2017, a certified a question was presented to the Nevada Supreme Court regarding NRS 116's notice requirement. See The Bank of New York Mellon v. Star Hill Homeowners Association, et al., No. 2:16-cv-02561-RFB-PAL, [ECF No. 41].

         6. Specifically, the certified question presented is as follows: “Whether NRS § 116.31168(1)'s incorporation of NRS § 107.090 requires homeowner's association to provide notices of default to banks even when a bank does not request notice?” 7. The Nevada Supreme Court issued an Order accepting the certified question on June 13, 2017. See Nevada Supreme Court, No. 72931. Briefing in that matter is currently completed.

         8. An answer to this certified question in a published opinion pronouncing that NRS 116.31168 fully incorporates NRS 107.090, and mandates notice to junior lienholders of record, has the potential to cure the conflict between Nevada's courts and provide a singular, binding authority on the issue which is central to the instant case.

         9. U.S. Bank and SFR filed their respective motions for summary judgment in the instant case on February 5, 2018. [ECF No.'s 62, 63]. Each party's response to the other party's motion for summary judgment was filed on February 26, 2018. [ECF No.'s 65, 66]. Pursuant to a Stipulation and Order entered on March 13, 2018, the deadline for each party to file replies in support of their respective motions for summary judgment is currently set for March 23, 2018.

         10. The parties believe that the stay requested herein is appropriate.

         11. To determine if a continued stay is appropriate, the Court considers (1) damage from the stay; (2) hardship or inequity that befalls one party more than the other; and (3) the orderly course of justice. See Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th ...