Fuleihan v. Wells Fargo Bank, N.A. et al

Filing 62

ORDER that 58 Motion for Release of Lis Pendens is DENIED without prejudice. Signed by Judge James C. Mahan on 6/22/16. (Copies have been distributed pursuant to the NEF - MMM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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DENISE FULEIHAN,

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Case No. 2:13-CV-1145 JCM (NJK)
Plaintiff(s),

ORDER

v.
WELLS FARGO BANK, N.A., et al.,
Defendant(s).

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Presently before the court is defendants Wells Fargo Bank, N.A., U.S. Bank as trustee for

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Societe Generale Mortgage Securities Trust Series 2006-FRE2, and Mortgage Electronic

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Registration Systems, Inc.’s motion for release of lis pendens. (ECF No. 58). Pro se plaintiff

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Denise Fuleihan filed a response (ECF No. 60), and defendants filed a reply. (ECF No. 61).

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This matter centers on a mortgage foreclosure dispute. Plaintiff has filed actions in several

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courts across a span of more than five years to stall defendants’ attempts to foreclose on her

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property. Here, she brought claims for allegedly deceptive trade practices, negligence, and fraud

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by concealment, amongst others. (See ECF No. 1). The court dismissed all of plaintiff’s claims

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after it found that they were barred by res judicata. (See ECF No. 52). At that time, the court did

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not expunge the lis pendens recorded by plaintiff at the outset of the case. (Id.)

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Plaintiff subsequently filed a notice of appeal. (ECF No. 54). That appeal is currently

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pending before the United States Court of Appeals for the Ninth Circuit. Plaintiff has filed two

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motions to stay or enjoin defendants’ foreclosure in the appeal case. Both motions were summarily

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denied, and defendants foreclosed on the property. (See ECF Nos. 56, 57). Defendants now ask

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that this court release or cancel the lis pendens associated with this case. (ECF No. 58).

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James C. Mahan
U.S. District Judge

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Defendants argue that the lis pendens should be expunged because the court has dismissed

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all of plaintiff’s causes of action for failure to state a claim. (ECF No. 58). In response, plaintiff

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contends that expunction is improper because his appeal is pending. (ECF No. 60).

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Nevada Revised Statute 14.010(2) states that “[a] notice of an action affecting real

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property, which is pending in any United States District Court for the District of Nevada may be

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recorded and indexed in the same manner and in the same place as provided with respect to actions

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pending in courts of this state.” NRS 14.010(2).

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A party recording a notice must establish that he is likely to prevail in the action or that he

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has a fair chance of success on the merits. NRS 14.015(3)(a) and (b). The court must order

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cancellation of the lis pendens upon finding that the party who recorded it has failed to meet the

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requirements set forth in that section. NRS 14.015.

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However, when a case has been appealed, the district court is generally divested of

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jurisdiction over any aspects of the case involved in the appeal. See Griggs v. Provident Consumer

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Discount Co., 459 U.S. 56, 58 (1982); see also Habon v. Mortg. Elec. Reg. Sys., Inc., No. 3:10-cv-

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191-RCJ-VPC, 2012 WL 5944892, at *3 (D. Nev. Nov. 26, 2012) (denying, without prejudice,

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motion to expunge lis pendens in a similar case for lack of jurisdiction).

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“That rule of exclusive appellate jurisdiction is a creature of judicial prudence, however,

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and is not absolute.” Masalosalo by Masalosalo v. Stonewall Ins. Co., 718 F.2d 955, 956 (9th Cir.

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1983) (citing Hoffman v. Beer Drivers & Salesmen's Local Union No. 888, 536 F.2d 1268, 1276

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(9th Cir.1976). “It is designed to avoid the confusion and inefficiency of two courts considering

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the same issues simultaneously.” Id. (citing 9 J. Moore, B. Ward & J. Lucas, Moore's Federal

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Practice ¶ 203.11 at 3–44 n. 1 (2d ed. 1983). District courts retain jurisdiction to “to act to preserve

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the status quo.” Nat. Res. Def. Council, Inc. v. Sw. Marine Inc., 242 F.3d 1163, 1166 (9th Cir.

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2001) (citations omitted).

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Defendants argue that this court retains jurisdiction over the lis pendens in this matter

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because it “can no longer be maintained on the [p]roperty as the case has been dismissed.” (ECF

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No. 58 at 5). Thus, they assert that expunging the lis pendens maintains the status quo. Plaintiff

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maintains that the court is without jurisdiction.

James C. Mahan
U.S. District Judge

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At the time that the notice of appeal was filed, the court had not addressed plaintiff’s

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maintenance of the lis pendens. (See ECF No. 54). The notice of the pendency of the action was

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thus in full effect. That being the case, preservation of the status quo at the time of the appeal

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requires preservation of the lis pendens, not cancellation.

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Furthermore, the rule of exclusive appellate jurisdiction exists to “avoid the confusion and

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inefficiency of two courts considering the same issues simultaneously.” Masalosalo, 718 F.2d at

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956. While the lis pendens in this case is not a direct issue on appeal, the propriety of its

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maintenance depends on the appeal court’s resolution of the case. If the Ninth Circuit panel

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reverses or otherwise upsets this court’s order dismissing plaintiff’s claims, an action “affecting

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the title or possession of real property” will again be pending. See NRS 14.015.

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This court’s exercise of jurisdiction over the notice of action could therefore result in both

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confusion and inefficiency. This is the type of situation the rule of exclusive appellate jurisdiction

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exists to prevent. The court will not therefore exercise jurisdiction over the lis pendens.

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Defendants’ motion is denied without prejudice to refiling after a final adjudication of plaintiff’s

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appeal.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants Wells Fargo

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Bank, N.A., U.S. Bank as trustee for Societe Generale Mortgage Securities Trust Series 2006-

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FRE2, and Mortgage Electronic Registration Systems, Inc.’s motion for release of lis pendens

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(ECF No. 58) be, and the same hereby is, DENIED without prejudice.

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DATED June 22, 2016.
__________________________________________
UNITED STATES DISTRICT JUDGE

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James C. Mahan
U.S. District Judge

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