Nationstar Mortgage LLC v. SFR Investments Pool 1, LLC

Filing 50

ORDER granting ECF No. 43 Motion to Reconsider; denying ECF No. 45 Motion to Stay. Signed by Judge Robert C. Jones on 04/13/2017. (Copies have been distributed pursuant to the NEF - KW)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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NATIONSTAR MORTGAGE, LLC,
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Plaintiff,
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vs.
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SFR INVESTMENTS POOL 1, LLC,
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Defendant.
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2:15-cv-00583-RCJ-PAL
ORDER

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This case arises out of a homeowners’ association foreclosure sale. Pending before the

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Court are a motion to reconsider and a motion to stay.

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I.

FACTS AND PROCEDURAL HISTORY

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John Ring purchased real property at 820 Peachy Canyon Circle, Unit #104, Las Vegas,

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Nevada, 89144 (“the Property”), giving Evergreen Moneysource Mortgage Co. (“Evergreen”) a

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$210,123 promissory note (“the Note”) and a deed of trust (“the DOT”) against the Property.

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(See Compl. 9–10, ECF No. 1). Dakota Condominiums Homeowners Association (“the

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CHOA”) sold the Property to SFR Investments Pool 1, LLC (“SFR”) at a non-judicial

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foreclosure sale for $9,200 on August 10, 2012. (See id. ¶¶ 12–18). 1 Nationstar Mortgage, LLC

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(“Nationstar”) became the assignee of the DOT on March 26, 2013. (Id. ¶ 11).

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1 Although the Complaint states that “plaintiff” bought the Property, that is apparently a
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Nationstar sued SFR in this Court to quiet title to the Property as to the validity of the

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sale and the continuing vitality of the DOT. SFR answered and filed a Counterclaim to quiet title

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in its favor and for a permanent injunction against foreclosure under the DOT. The parties filed

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cross motions for summary judgment, each party asking the Court for defensive summary

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judgment against the other’s claims and for offensive summary judgment on its own claims. The

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Court granted both motions in part and denied them both in part in April 2016, ruling that SFR

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was entitled to summary judgment against the Complaint as to the Shadow Wood issue, tender of

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the superpriority amount before sale, and the due process issue under the quiet title claim, and

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that Nationstar was entitled to summary judgment against the Counterclaim as to the bona fide

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purchaser issue. The Court ruled that the respective quiet title claims must be tried to a jury on

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the issues of lien priority (the comparative dates of recordation of the Declaration and the DOT),

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commercial unreasonableness of the sale, whether constitutional notice of the sale was given (as

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to SFR’s counterclaim), and whether the loan was FHA-insured at the time of the sale.

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Nationstar has asked the Court to reconsider summary judgment in part. SFR has

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opposed the motion and has asked the Court to stay the case pending issuance of the mandate in

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Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016), anticipating

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that the U.S. Supreme Court may grant certiorari in that case now that the Nevada Supreme

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Court has ruled contrary to the Court of Appeals as to the constitutionality of the notice scheme

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under Chapter 116.

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typographical error. Nationstar clearly asserts an adverse interest in the Property as against the
buyer (SFR) based on SFR’s claim that the sale extinguished the DOT.
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II.

DISCUSSION
The Court will reconsider and will not stay the case. Nationstar correctly notes that

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Bourne Valley is in conflict with this Court’s previous ruling that there was no state action under

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Chapter 116 to support Nationstar’s quiet title action under a due process theory. The issue of

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notice remains factually disputed, as the Court noted in denying summary judgment on SFR’s

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quiet title counterclaim. As it stands now, Bourne Valley therefore requires this Court’s

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reconsideration of summary judgment against Nationstar’s due process claim. Nor would a U.S.

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Supreme Court reversal of Bourne Valley affect this Court’s ruling that the notice issue must be

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tried as to SFR’s counterclaim, because the governmental action implicated in the counterclaim

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is not Fourteenth Amendment state action via Chapter 116 (the issue in Bourne Valley), but Fifth

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Amendment federal government action via this Court’s putative declaration. (See Order 11–12,

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ECF No. 31 (citing U.S. Bank N.A. v. SFR Invs. Pool 1, LLC, 124 F. Supp. 3d 1063, 1075–81 (D.

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Nev. 2015) (Jones, J.))). Also, the issues of lien priority, commercial unreasonableness, and

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FHA insurance remain to be tried even if there were no due process issues at all.
CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Reconsider (ECF No. 43) is GRANTED.

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IT IS FURTHER ORDERED that the Motion to Stay (ECF No. 45) is DENIED.

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IT IS SO ORDERED.

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DATED: This 13th dayFebruary, 2017.
Dated this 24th day of of April, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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