PNC Bank, National Association v. Mao and Zhang LV LLC

Filing 39

ORDER Granting Defendant Mao and Zhang LV, LLC's 38 Motion to Stay. Plaintiff's 34 Motion for Status Conference is Denied as moot. Signed by Judge Kent J. Dawson on 3/31/2017. (Copies have been distributed pursuant to the NEF - SLD)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 DISTRICT OF NEVADA 9 10 PNC BANK, NATIONAL ASSOCIATION, 11 Case No. 2:15-CV-1164-KJD-VCF Plaintiff, 12 ORDER v. 13 MAO AND ZHANG LV LLC, et al., 14 Defendants. 15 16 Presently before the Court is Defendant Mao and Zhang LV, LLC’s Motion to Stay (#38). 17 Though the time for doing so has passed, no response in opposition has been filed. Having read and 18 considered the motion and good cause being found, the motion will be granted. Also, before the 19 Court is Plaintiff’s Motion for Status Conference (#34). 20 The Nevada Supreme Court recently held that “the Due Process Clause of the United States 21 and Nevada Constitutions are not implicated in an HOA’s nonjudicial foreclosure of a superpriority 22 lien.” Saticoy Bay v. Wells Fargo, 388 P.3d 970, 975 (Nev. 2017). However, the Ninth Circuit Court 23 of Appeals considered the same issue in Bourne Valley Ct. Trust v. Wells Fargo Bank, 832 F.3d 24 1154, 1160 (9th Cir. 2016) and came to the opposite conclusion: “Nevada Revised Statutes section 25 116.3116's “opt-in” notice scheme facially violated mortgage lenders’ constitutional due process 26 1 rights.”1 Parties in both Bourne Valley and Saticoy Bay have indicated they will file petitions for 2 certiorari in the United States Supreme Court, leaving the constitutionality of portions of Nevada’s 3 non-judicial foreclosure statute in question. In fact, the Nevada Supreme Court has stayed issuance of 4 remittitur until June 21, 2017, to allow time for Defendants to seek certiorari. Saticoy Bay, Nev. S. 5 Ct. Case No. 68630, Doc. No. 17-04543 (Feb. 8, 2017). Additionally, the United States Supreme 6 Court extended the deadline for the Bourne Valley cert petition to April 3, 2017. Case No. 16A753 7 (Feb 24, 2017). 8 9 The issues the parties in this case have raised implicate Bourne Valley and Saticoy Bay. To save the parties from the need to invest resources in discovery surrounding commercial 10 reasonableness of the sale including any fraud, unfairness or oppression, before the United States 11 Supreme Court has ruled on the petitions for certiorari review in these cases, the Court grants 12 Defendants unopposed motion to stay this case. 13 A district court has the inherent power to stay cases to control its docket and promote the 14 efficient use of judicial resources. Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936); 15 Dependable Highway Exp., Inc., v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). When 16 determining whether a stay is appropriate pending the resolution of another case – often called a 17 “Landis stay” – the district court must weigh: (1) the possible damage that may result from a stay, (2) 18 any “hardship or inequity” that a party may suffer if required to go forward, and (3) “and the orderly 19 course of justice measured in terms of the simplifying or complicating of issues, proof, and questions 20 of law” that a stay will engender. Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). 21 Weighing these considerations, the Court finds that a Landis stay is appropriate. 22 1. 23 At the center of this case is an HOA-foreclosure sale under NRS Chapter 116 and the A stay will promote the orderly course of justice. 24 25 26 1 The “opt-in” notice scheme was in effect on the date of the Foreclosure Sale, November 1, 2013. The 2015 Legislature substantially revised Chapter 116. 2015 Nev. Stat., ch. 266. However, this court looks at the statute in effect on the day of the sale. 2 1 competing arguments that the foreclosure sale either extinguished the mortgagor’s security interest or 2 had no legal effect because the statutory scheme violates due process and the takings clause. The 3 United States Supreme Court’s consideration of petitions for certiorari in Bourne Valley and Saticoy 4 Bay has the potential to be dispositive of this case or major discrete issues presented by it. The 5 jurisprudence in this area of unique Nevada law continues to evolve causing parties in the scores of 6 foreclosure-challenge actions pending to file new motions or supplement the ones that they already 7 have pending, resulting in “docket-clogging entries and an impossible-to-follow chain of briefs in 8 which arguments are abandoned and replaced.” Nationstar Mortg., LLC v. Springs at Spanish Trail 9 Assoc., 2017 WL 752775, *2 (D. Nev. February 27, 2017). Staying this case pending the Supreme 10 Court’s disposition of the petitions for certiorari in Bourne Valley and Saticoy Bay will permit the 11 parties to evaluate, and the Court to consider, viability of the claims under the most complete 12 precedent. This will simplify and streamline the proceedings and promote the efficient use of the 13 parties’ and the court’s resources. 14 2. 15 Hardship and inequity Both parties equally face hardship or inequity if the Court resolves the claims or 16 issues before the petitions for certiorari have been decided. A stay will prevent unnecessary briefing 17 and premature expenditures of time, attorney’s fees, and resources. While this is one of the few cases 18 in which multiple supplemental briefs have not been filed, the prospect of that occurrence is greater 19 than not while the petitions are pending. 20 3. 21 The only potential damage that may result from a stay is that the parties will have to wait Damage from a stay 22 longer for resolution of this case. But a delay would also result from any rebriefing or supplemental 23 briefing that may be necessitated if the Supreme Court grants certiorari and resolves this circuit-state 24 split. It is not clear that a stay pending the Supreme Court’s disposition of the petitions for certiorari 25 will ultimately lengthen the life of this case. The Court finds minimal any possible damage that this 26 stay may cause. 3 1 4. 2 Finally, a stay of this case pending the disposition of the petitions for certiorari in Bourne The length of the stay is reasonable. 3 Valley and Saticoy Bay is expected to be reasonably short. The petition in Bourne Valley is due April 4 3, 2017, and the petition in Saticoy Bay is due April 25, 2017. Because the length of this stay is 5 directly tied to the petition proceedings in those cases, it is reasonably brief, and not indefinite. 6 5. 7 Therefore, the Court orders this action stayed. Once the United States Supreme Court 8 proceedings in Bourne Valley and Saticoy Bay have concluded, either party may move to lift the stay. 9 Conclusion 10 11 12 13 14 Summary Accordingly, IT IS HEREBY ORDERED that Defendant Mao and Zhang LV, LLC’s Motion to Stay (#38) GRANTED; IT IS FURTHER ORDERED that Plaintiff’s Motion for Status Conference (#34) DENIED as moot. DATED this 31st day of March 2017. 15 16 17 18 _____________________________ Kent J. Dawson United States District Judge 19 20 21 22 23 24 25 26 4

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