Green Tree Servicing LLC v. SFR Investments Pool1, LLC et al

Filing 106

ORDER. IT IS HEREBY ORDERED that 103 the parties stipulation be, and the same hereby is, DENIED. IT IS FURTHER ORDERED that claims (3) and (4) of Ditechs complaint 44 be, and the same hereby are, DISMISSED WITHOUT PREJUDICE. IT IS FURTHER OR DERED that 21 the HOAs third-party complaint against ACS be, and the same hereby is, DISMISSED WITHOUT PREJUDICE. The clerk is instructed to enter judgment in favor of SFR in accordance with 87 the courts February 23rd order and close the case. Signed by Judge James C. Mahan on 7/13/17. (Copies have been distributed pursuant to the NEF - ADR)

1
2
3
4

UNITED STATES DISTRICT COURT

5

DISTRICT OF NEVADA

6

***

7

GREEN TREE SERVICING, LLC,

8
9
10

Case No. 2:15-CV-476 JCM (VCF)
Plaintiff(s),

ORDER

v.
SFR INVESTMENTS POOL I, LLC, et al.,

11

Defendant(s).

12
13
14

Presently before the court is a stipulation for extension of time regarding the dispositive
motions deadline. (ECF No. 103).

15

On February 23, 2017, the court granted SFR Investments Pool 1, LLC’s (“SFR”) motion

16

for summary judgment (ECF No. 68), to which Elkhorn Community Association (the “HOA)

17

joined (ECF No. 72), on its quiet title counterclaim (ECF No. 13) against Ditech Financial LLC

18

f/k/a Green Tree Servicing, LLC (“Ditech”). (ECF No. 87). In light of the court’s February 23rd

19

order, the claims that remain are as follows: Ditech’s claims against the HOA for breach of NRS

20

116.1113 and wrongful foreclosure (ECF No. 44); and the HOA’s third-party complaint against

21

Absolute Collection Services, LLC (“ACS”) for breach of contract, indemnity, and contribution

22

(ECF No. 21).

23

In the instant stipulation, Ditech, the HOA, and ACS (collectively, as the “parties”) assert

24

that a mediation request has been submitted to the Nevada Real Estate Division (“NRED”), but

25

“despite the statutory requirement that NRED appoint a mediator within 60 days,” NRED has yet

26

to appoint a mediator. (ECF No. 103 at 2). The parties thus request a 90-day extension of the

27

dispositive deadline to allow continued efforts to complete mediation. (ECF No. 103).

28
James C. Mahan
U.S. District Judge

1

As an initial matter, nothing in NRS 38.330 provides that NRED’s failure to appoint a

2

mediator within 60 days constitutes exhaustion, nor does the statute place the burden on NRED to

3

complete mediation within a specified period of time. Rather, the burden is on the parties to either

4

complete mediation within 60 days after the filing of a written claim or agree to extend the time to

5

complete mediation. Specifically, subsection (1) of NRS 38.330 states that “[u]nless otherwise

6

provided by an agreement of the parties, mediation must be completed within 60 days after the

7

filing of the written claim.” Nev. Rev. Stat. § 38.330(1).

8

Subsection (1) of NRS 38.310 provides, in relevant part, as follows:

9

11

No civil action based upon a claim relating to [t]he interpretation, application or
enforcement of any covenants, conditions or restrictions applicable to residential
property . . . or [t]he procedures used for increasing, decreasing or imposing
additional assessments upon residential property, may be commenced in any court
in this State unless the action has been submitted to mediation.

12

Nev. Rev. Stat. § 38.310(1). Subsection (2) continues by stating that a “court shall dismiss any

13

civil action which is commenced in violation of the provisions of subsection 1.” Nev. Rev. Stat.

14

§ 38.310(2).

10

15

While Ditech has submitted a request for mediation, the parties have not participated in

16

mediation. Thus, Ditech has not exhausted its administrative remedies and must mediate certain

17

claims—specifically, its wrongful foreclosure and breach of NRS 116.1113 claims—prior to

18

initiating an action in court.

19

A “civil action” includes any actions for monetary damages or equitable relief. See Nev.

20

Rev. Stat. § 38.300(3). “A wrongful foreclosure claim challenges the authority behind the

21

foreclosure, not the foreclosure act itself.” McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d

22

555, 559 (Nev. 2013) (citing Collins v. Union Fed. Sav. & Loan, 662 P.2d 610, 623 (Nev. 1983)).

23

“The material issue in a wrongful foreclosure claim is whether ‘the trustor was in default when the

24

power of sale was exercised.’” Turbay v. Bank of Am., N.A., No. 2:12-CV-1367-JCM-PAL; 2013

25

WL 1145212, at *4 (quoting Collins, 662 P.2d at 623). “Deciding a wrongful foreclosure claim

26

against a homeowners’ association involves interpreting covenants, conditions or restrictions

27

applicable to residential property.” McKnight Family, L.L.P., 310 P.3d at 559. “This type of

28
James C. Mahan
U.S. District Judge

-2-

1

interpretation falls under NRS 38.310.”

2

“contain[ing] conditions and restrictions applicable to residential property.” Id. at 558.

Id.

Additionally, NRS 38.310 applies to laws

3

Similarly, Ditech’s breach of NRS 116.1113 claim alleges a NRS violation, which requires

4

an interpretation of the regulations and statutes that contained conditions and restrictions

5

applicable to the property so as to fall within the scope of NRS 38.310.
Consequently, Ditech must first submit these claims to mediation before proceeding with

6

See e.g., U.S. Bank, N.A. v. Woodchase Condo. Homeowners Ass’n, No.

7

a civil action.

8

215CV01153APGGWF, 2016 WL 1734085, at *2 (D. Nev. May 2, 2016); Saticoy Bay, LLC Series

9

1702 Empire Mine v. Fed. Nat’l Mortg. Ass’n, No. 214-cv-01975-KJD-NJK, 2015 WL 5709484,

10

at *4 (D. Nev. Sept. 29, 2015).

11

Relatedly, NRS 38.350 expressly tolls the statute of limitations applicable to Ditech’s

12

claims that are subject to mediation under NRS 38.310. Specifically, NRS 38.350 provides that

13

“[a]ny statute of limitations applicable to a claim described in NRS 38.310 is tolled from the time

14

the claim is submitted to mediation . . . until the conclusion of mediation . . . of the claim and the

15

period for vacating the award has expired.” Nev. Rev. Stat. § 38.350. Therefore, Ditech’s claims

16

are not prejudiced by the statute’s requirement that the parties participate in mediation prior to

17

initiating an action in court.

18

In light of the foregoing, the court will dismiss, without prejudice, claims (3) and (4) of

19

Ditech’s complaint (ECF No. 44) for Ditech’s failure to mediate pursuant to NRS 38.310. See,

20

e.g., Nev. Rev. Stat. § 38.310(1); McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555 (Nev.

21

2013).

22

Further, the court will dismiss, without prejudice, the HOA’s third-party complaint (ECF

23

No. 21) against ACS as the claims asserted therein are predicated on the outcome of Ditech’s

24

claims that are subject to mediation. Upon the conclusion of mediation, Ditech and the HOA may

25

reassert their claims in a new case.

26

Accordingly,

27

IT IS HEREBY ORDERED that the parties’ stipulation (ECF No. 103) be, and the same

28
James C. Mahan
U.S. District Judge

hereby is, DENIED.

-3-

1
2
3
4
5
6
7
8
9

IT IS FURTHER ORDERED that claims (3) and (4) of Ditech’s complaint (ECF No. 44)
be, and the same hereby are, DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that the HOA’s third-party complaint against ACS (ECF No.
21) be, and the same hereby is, DISMISSED WITHOUT PREJUDICE.
The clerk is instructed to enter judgment in favor of SFR in accordance with the court’s
February 23rd order (ECF No. 87) and close the case.
DATED July 13, 2017.
__________________________________________
UNITED STATES DISTRICT JUDGE

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
James C. Mahan
U.S. District Judge

-4-