LN Management LLC Series 8246 Azure Shores v. Wells Fargo Bank, N.A. et al
Filing
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ORDER Denying without prejudice 33 Motion for Summary Judgment. Signed by Judge James C. Mahan on 7/24/2014. (Copies have been distributed pursuant to the NEF - SLR)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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LN MANAGEMENT LLC SERIES
8246 AZURE SHORES,
2:13-CV-1307 JCM (PAL)
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Plaintiff(s),
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v.
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ARLENE G. DIZON, WELLS FARGO
BANK, N.A., et al.,
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Defendant(s).
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ORDER
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Presently before the court is a motion for summary judgment filed by defendant Wells Fargo
Bank, N.A (“Wells Fargo”). (Doc. # 33).
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This case involves a dispute over a property that was subject to an HOA “super priority” lien.
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Plaintiff claims that it purchased the property commonly known as 8246 Azure Shores Court, Las
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Vegas, Nevada 89117 for the nominal amount of $15,000.00 and thereby extinguished Wells Fargo’s
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$150,000 deed of trust.
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Over the last several months, the court has become all too familiar with Nev. Rev. Stat. §
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116.3116, which grants priority to portions of liens arising from delinquent HOA assessments.
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Countless cases have been filed in Nevada posing the question as to whether a foreclosure of an
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HOA’s “super priority” interest extinguishes deeds of trust that predate the HOA lien.
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...
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James C. Mahan
U.S. District Judge
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Courts at both the state and federal levels disagree as to the correct interpretation of this
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provision. See, e.g., 7912 Limbwood Court Trust v. Wells Fargo Bank, N.A., 2013 WL 5780793 (D.
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Nev. 2013) (holding that foreclosure of an HOA super priority lien extinguishes a deed of trust);
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LVDG Series 125 v. Welles, 2013 WL 6175813 (D. Nev. 2013) (holding that a deed of trust is not
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extinguished following the foreclosure of an HOA super priority lien).
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Despite the numerous cases presenting this precise question that have been filed in state
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courts, the Nevada Supreme Court has yet to weigh in on the issue. At present, “there are over fifty
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cases pending before the Nevada Supreme Court that turn upon this very question.” Saticoy Bay LLC
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v. Flagstar Bank, FSB, No. 2:13-cv-1589-JCM-VCF (D. Nev. Feb. 28, 2014) (order granting motion
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to stay). Though federal district courts can generally rule upon questions of state law, this power
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becomes rather murky when there is no precedent from a state’s highest court to assist in interpreting
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novel statutes. See Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007). This
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difficulty is compounded further by the fact that Nevada has no intermediate appellate courts to
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provide guidance before these questions reach the Nevada Supreme Court.
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It is quite apparent that there is disagreement among state and federal courts regarding the
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interpretation of Nev. Rev. Stat. § 116.3116. Therefore, out of respect for Nevada’s sovereignty and
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interest in having its statutes interpreted by its own judges, the court finds it appropriate to deny the
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instant motion without prejudice. The parties are free to re-file the instant motions upon a ruling by
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the Nevada Supreme Court as to whether a foreclosure of an HOA “super priority” lien pursuant to
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Nev. Rev. Stat. § 116.3116 extinguishes an earlier deed of trust.
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Accordingly,
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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendant’s motion for
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summary judgment, (doc. # 33), be, and the same hereby is, DENIED without prejudice.
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James C. Mahan
U.S. District Judge
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IT IS FURTHER ORDERED that the defendant shall have thirty (30) days from the entry
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of a ruling of the Nevada Supreme Court on the question identified above to renew its motion for
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summary judgment.
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DATED July 24, 2014.
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UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge
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