Skylights LLC v. Byron et al

Filing 44

ORDER Granting 39 Motion for Hearing. Motion Hearing set for 6/18/2015 01:30 PM in LV Courtroom 7D before Chief Judge Gloria M. Navarro re 26 Motion for Summary Judgment. Signed by Chief Judge Gloria M. Navarro on 5/27/15. (Copies have been distributed pursuant to the NEF - TR)

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Laurel I. Handley, Esq. (SBN 9576)
Krista J. Nielson, Esq. (SBN 10698)
PITE DUNCAN, LLP
520 South 4th Street, Suite 360
Las Vegas, Nevada 89101
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]
Attorneys for Defendants Federal National Mortgage Association;
CitiMortgage, Inc., and Clear Recon Corp.

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Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
FENNEMORE CRAIG, P.C.
300 E. Second St., Suite 1510
Reno, Nevada 89501
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]

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(Admitted Pro Hac Vice)
Asim Varma, Esq.
Michael A.F. Johnson, Esq.
ARNOLD & PORTER LLP
555 12th Street NW
Washington, DC 20004
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]

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Attorneys for Intervenor Federal Housing Finance Agency

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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SKYLIGHTS LLC,

CASE NO. 2:15-cv-00043-GMN-VCF
Plaintiff,

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vs.
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DAVID BYRON; et al.,
Defendants.
and

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FEDERAL HOUSING FINANCE AGENCY,
as Conservator for the Federal National
Mortgage Association,

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Intervenor.

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10398235

FANNIE MAE AND FHFA’S MOTION TO
COMBINE HEARING ON THEIR
MOTION FOR SUMMARY JUDGMENT
WITH THE CURRENTLY SCHEDULED
HEARING IN SATICOY BAY

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FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Counterclaimant,
and
FEDERAL HOUSING FINANCE AGENCY,
as Conservator for the Federal National
Mortgage Association,
Intervenor,
vs.
SKYLIGHTS LLC; THE FALLS AT
RHODES RANCH CONDOMINIUM
OWNERS ASSOCIATION, INC.,

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Counter-defendants.

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Fannie Mae and FHFA respectfully request that the Court set the pending, fully briefed
dispositive motion in this action, as well as the fully briefed dispositive motions in Williston
Investment Group v. Freddie Mac, No. 2:14-CV-02038-GMN-PAL, and Elmer v. Freddie Mac,
No. 2:14-cv-01999-GMN-NJK, for argument on June 18, 2015, the date currently scheduled for
the hearing on the pending summary judgment motion in a related action, Saticoy Bay, LLC
Series 1702 Empire Mine v. Fannie Mae, No. 2:14-cv-1975-GMN-NJK. See Minute Order,
Saticoy Bay (Dkt. 76) (granting expedited hearing); Minute Order, Saticoy Bay (Dkt. 83) (setting
June 18 as date for hearing). These cases all involve a common and potentially dispositive issue
of federal law—whether a federal statute mandating that “[n]o property of [an FHFA
conservatorship] shall be subject to ... foreclosure[] or sale without [FHFA’s] consent” preserves
Fannie Mae’s and Freddie Mac’s property interests when a homeowners’ association forecloses a
super-priority lien in a way that, under state law, might otherwise extinguish mortgage interests.
See 12 U.S.C. § 4617(j)(3). As we explained in seeking expedited argument in Saticoy Bay,
dozens of cases presenting that issue already are pending in this District, and more are expected.
See Joint Motion to Expedite Hearing, Saticoy Bay (Dkt. 72).

potentially dispositive common issue therefore will serve the interests of efficiency and judicial
economy.

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

Prompt resolution of this

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We propose that oral argument in Elmer, Williston, and Skylights be combined with

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argument in Saticoy Bay for two principal reasons. First, in addition to the common issue

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discussed above, Elmer, Williston, and Skylights all involve a newly minted “constitutional”

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defense to summary judgment not presented in Saticoy Bay—whether applying Section

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4617(j)(3) to preserve the Enterprises’ property interests would violate the due process rights of

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parties to the HOA foreclosure sale.1 Resolution of that issue, now being advanced in an ever-

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growing number of cases in an attempt to anticipate and avoid the dispositive consequences

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should this Court rule that 12 U.S.C. § 4617(j)(3) prevents the extinguishment of Fannie Mae’s

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and Freddie Mac’s property interests, will facilitate the expeditious resolution of these litigations.

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Indeed, this due process argument has been raised in five of the ten similar cases pending in the

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District in which opposing parties already have filed briefs supporting or opposing dispositive

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motions.2 Resolving the due process issue contemporaneously with the federal supremacy issue

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would eliminate the need for piecemeal litigation and would provide more useful guidance to

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other courts hearing similar cases, thereby serving the interests of efficiency and judicial

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economy.

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Second, the Saticoy Bay plaintiff is attempting to prevent this Court from resolving the

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Section 4617(j)(3) issue promptly by seeking to moot its case unilaterally. Specifically, Saticoy

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Bay’s counsel reports that his “client has made the decision to pay off the outstanding trust deed

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in order to make the issues in [its] case moot.” E-mail from Bohn to Varma (May 5, 2015) (copy

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attached as Ex. A). Saticoy Bay, which is a plaintiff in several pending state court cases—and a

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few less advanced cases in federal court—raising the same legal issue, may hope to put off the

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

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See Elmer’s Response to Motion for Summary Judgment at 9-15, Elmer (March 23,
2015) (Dkt. 71) (arguing a violation of a purchaser’s due process rights); Williston’s Response to
Motion for Summary Judgment at 13-18, Williston (April 3, 2015) (Dkt. 54) (same); The Falls at
Rhodes Ranch Owners Association’s Response to Motion for Summary Judgment at 14-17,
Skylights (April 16, 2015) (Dkt. 31) (arguing a violation of a homeowner association’s due
process rights).
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In addition to Elmer, Williston, and Skylights, these include Fannie Mae v. SFR
Investments Pool 1, LLC, No. 2:14-cv-2046-JAD-PAL (D. Nev.), and Nationstar Mortgage, LLC
v. SFR Investments Pool 1, LLC, No. 2:15-cv-0267-RFB-NJK (D. Nev.).
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day this federal court resolves the controlling federal-law question.3

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motivation, Saticoy Bay’s effort to moot the case comes to naught, as a party’s “voluntary

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cessation of a challenged practice does not deprive a federal court of its power to determine the

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legality of the practice. If it did, the courts would be compelled to leave the [party] free to return

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to his old ways.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167,

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189 (2000) (quoting City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 & n.10 (1982))

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(internal quotation marks, brackets, ellipses, and citation omitted). That said, hearing argument

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contemporaneously in cases that squarely present the substantive issues without the distraction of

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a mootness determination—such as Elmer, Williston, and Skylights—would likely result in a

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more thorough airing of the issues the Court anticipated addressing when it expedited the Saticoy

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Bay argument in the first place, thereby facilitating proper and complete resolution on the merits.

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Setting argument for June 18 in Elmer, Williston, and Skylights will not unreasonably

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burden the parties or the Court. That date is more than a month away, leaving each party ample

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time to prepare to argue issues that are already fully briefed in each case. It will surely conserve

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judicial resources to hear argument on the Section 4617(j)(3) issue in one combined session

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rather than in multiple, case-specific sessions on separate dates.4 Moreover, because Elmer,

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Williston, and Skylights involve an issue not presented in Saticoy Bay, hearing the cases

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contemporaneously will be more efficient than convening a second argument to resolve

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separately the due process defense.

But whatever the

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Counsel for FHFA contacted counsel for all opposing parties—Skylights, the HOA in

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Skylights, Elmer, and Williston—to seek their positions as to this motion and their availability

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June 18. Counsel for Skylights responded telephonically that he does not object and is available

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June 18. Counsel for the HOA in Skylights responded via e-mail that he is available June 18 and

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does not object generally to expediting argument, albeit with two narrow concerns relating to the

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

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Indeed, Saticoy Bay sent its payoff request only five days after another court in this
District ruled against it on a similar issue of federal preemption involving an HOA Sale. See
Order, Saticoy Bay LLC, Series 7342 Tanglewood Park v. SRMOF II 2012-1 Trust, No. 2:13-cv1199-JCM-VCF (Apr. 30, 2015) (Dkt. 53).
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This is even more true here because Elmer and Williston are represented by the same
counsel.
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possibility that further briefing may be submitted. See E-mail from Dunkley to Johnson (May

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11, 2015) (attached as Ex. B).5 Counsel for Elmer and Williston interposed no objection to

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combining the hearings, but objected to scheduling a hearing on June 18 and every other date in

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the month of June, stating:
I have a weeklong binding arbitration (AAA) starting on June 22nd
that is going to take up most of availability in June. Moreover, the
beginning of June is filled with a number of outstate depositions. I
would be opposed to having any argument on these matters in
June. My first availability would be sometime after the July 4th
weekend.

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E-mail from Ayon to Johnson (May 11, 2015) (attached as Ex. C). Counsel for FHFA, Fannie
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Mae, and Freddie Mac believe that presenting argument in all four cases on June 18 would best
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facilitate the prompt and efficient resolution of the important issues pending in these cases. As
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no actual conflict with June 18 has been stated, FHFA, Fannie Mae, and Freddie Mac
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respectfully ask the Court to maintain that as the date of argument in Saticoy Bay, and to set
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argument in Elmer, Williston, and Skylights for that date as well.
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Prompt resolution of the fully briefed dispositive motions in Elmer, Williston, and
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Skylights will benefit the parties, the Court, other courts in this District, and the public at large by
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providing guidance on important issues that may affect hundreds of Nevada properties.
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Combining argument in Elmer, Williston, and Skylights with the already-scheduled argument in
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Saticoy Bay will enable the Court to resolve all of the principal issues presented in dozens of
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pending cases, with no unreasonable burden to any party or the Court. Doing so would surely
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aid in “secur[ing] the just, speedy, and inexpensive determination” of this and many other
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actions, which is one of this Court’s prime directives. See Fed. R. Civ. Pro. 1. Accordingly,
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Fannie Mae and FHFA respectfully urge the Court to set argument on the pending dispositive
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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

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We have no reason to believe counsel’s concerns cannot be resolved well before June
18. We doubt that any further briefing will be required, but regardless there is ample time for
any additional briefs to be submitted substantially in advance of June 18.
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motions in Elmer, Williston, and Skylights for June 18, 2015, to be heard contemporaneously

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with argument in Saticoy Bay.
DATED this 11th day of May, 2015.

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PITE DUNCAN, LLP
By:

FENNEMORE CRAIG, P.C.

By: /s/ Leslie Bryan Hart
/s/ Laurel I. Handley
Leslie Bryan Hart, Esq. (SBN 4932)
Laurel I. Handley, Esq. (SBN 9576)
John D. Tennert, Esq. (SBN 11728)
Krista J. Nielson, Esq. (SBN 10698)
300 E. Second St., Suite 1510
520 South 4th Street, Suite 360
Reno, Nevada 89501
Las Vegas, Nevada 89101
Tel: [phone] Fax: [phone]
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]
[e-mail];
and
[e-mail]

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ARNOLD & PORTER LLP
(Admitted Pro Hac Vice)
Asim Varma, Esq.
Michael A.F. Johnson, Esq.

Attorneys for Federal National Mortgage
Association; CitiMortgage, Inc., and Clear
Recon Corp.

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Attorneys for Intervenor Federal Housing
Financing Agency

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IT IS SO ORDERED.

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________________________________
Gloria M. Navarro, Chief Judge
United States District Court

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DATED: 05/27/2015

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10398235

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CERTIFICATE OF SERVICE

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Pursuant to F.R.C.P. 5(b) and Electronic Filing Procedure IV(B), I certify that on the 11th

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day of May, 2015, a true and correct copy of FANNIE MAE AND FHFA’S MOTION TO

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COMBINE HEARING ON THEIR MOTION FOR SUMMARY JUDGMENT WITH

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THE CURRENTLY SCHEDULED HEARING IN SATICOY BAY, was transmitted
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electronically through the Court’s e-filing electronic notice system to the attorney(s) associated

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with this case. If electronic notice is not indicated through the court’s e-filing system, then a true

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and correct paper copy of the foregoing document was delivered via U.S. Mail.

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Joseph P Garin

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Kaleb D. Anderson

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Michael N. Beede

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Peter E Dunkley

[e-mail]
[e-mail]
[e-mail]
[e-mail]

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/s/ Pamela Carmon
Pamela Carmon

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10398235

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