Bank of New York Mellon v. Foreclosure Sales Services, LLC

Filing 46

ORDER STAYING CASE. Once the proceedings in the U.S. Supreme Court have concluded, any party may move to lift the stay. Signed by Judge Andrew P. Gordon on 4/11/2017. (Copies have been distributed pursuant to the NEF - JM)

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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 *** 4 BANK OF NEW YORK MELLON, 5 6 7 8 9 10 Plaintiff, v. Case No. 2:15-cv-02087-APG-GWF ORDER STAYING CASE FORECLOSURE SALES SERVICES, LLC, et al., Defendants. This is one of many disputes over the effect of a nonjudicial foreclosure sale conducted by 11 a homeowners association (“HOA”) after the prior owner failed to pay HOA assessments. On 12 August 12, 2016, a divided Ninth Circuit panel in Bourne Valley Court Trust v. Wells Fargo Bank 13 held that Nevada Revised Statutes Chapter 116’s HOA nonjudicial foreclosure scheme, as it 14 existed before the statutory scheme was amended in 2015, “facially violated mortgage lenders’ 15 constitutional due process rights.” 832 F.3d 1154, 1155 (9th Cir. 2016); but see id. at *6-11 16 (Wallace, J., dissenting). The Supreme Court of Nevada recently decided Saticoy Bay LLC Series 17 350 Durango 104 v. Wells Fargo Home Mortgage, holding that “the Due Process Clauses of the 18 United Sates and Nevada Constitutions are not implicated in an HOA’s nonjudicial foreclosure of 19 a superpriority lien.” 388 P.3d 970, 975 (Nev. 2017). The losing parties in both Bourne Valley 20 and Saticoy Bay have indicated they intend to file petitions for certiorari in the United States 21 Supreme Court. Because Bourne Valley and Saticoy Bay reached opposite conclusions, the 22 constitutionality of Nevada’s HOA nonjudicial foreclosure scheme may be decided by the United 23 States Supreme Court. See Sup. Ct. R. 10(b) (identifying as a compelling reason for granting 24 certiorari that “a state court of last resort has decided an important federal question in a way that 25 conflicts with the decision . . . of a United States court of appeals”). I therefore sua sponte stay 26 this case pending a decision on the petitions for certiorari in Bourne Valley and Saticoy Bay. 27 28 1 A district court has the inherent power to stay cases to control its docket and promote the 2 efficient use of judicial resources. Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936); 3 Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). 4 When determining whether to stay a case pending the resolution of another case, I must consider 5 (1) the possible damage that may result from a stay, (2) any “hardship or inequity” that a party 6 may suffer if required to go forward, (3) “and the orderly course of justice measured in terms of 7 the simplifying or complicating of issues, proof, and questions of law” that a stay will engender. 8 Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). I find that a Landis stay is 9 appropriate here. 10 The crux of the parties’ dispute is whether the HOA foreclosure sale extinguished the 11 deed of trust. If the HOA sale was void because Chapter 116 is facially unconstitutional, then the 12 parties’ dispute is, in large part, resolved or at least simplified. The Supreme Court’s 13 consideration of the petitions in Bourne Valley and Saticoy Bay thus could be dispositive of this 14 case, or at least of significant issues in the case. As the jurisprudence and the parties’ arguments 15 in this area evolve, the parties file new motions or move to supplement the pending briefs, 16 burdening our already-busy docket. Bourne Valley and Saticoy Bay no doubt will inspire more 17 motions and supplements. Staying this case pending the Supreme Court’s disposition of the 18 petitions in Bourne Valley and Saticoy Bay will permit the parties to present arguments and 19 evidence in the context of complete and resolved precedent, and it will allow me to evaluate the 20 claims in light of this legal authority. Consequently, a stay pending the disposition of the 21 certiorari proceedings will simplify the proceedings and promote the efficient use of the parties’ 22 and the court’s resources. 23 Resolving the claims or issues in this case before the Supreme Court decides whether to 24 grant or deny the petitions could impose a hardship on both parties. A stay will prevent 25 unnecessary or premature briefing on Bourne Valley and Saticoy Bay’s impact on this case. 26 The potential damage that may result from a stay is that the parties will have to wait 27 longer for resolution of this case and any motions that they intend to file in the future. But a 28 Page 2 of 3 1 delay would also result from new briefing that may be necessitated if the Supreme Court grants 2 certiorari. So a stay pending the Supreme Court’s decision will not necessarily lengthen the life 3 of this case. Any possible damage that a stay may cause is minimal. 4 Finally, I expect the stay pending the Supreme Court’s disposition of the petitions for 5 certiorari to be reasonably short. The petition in Bourne Valley was filed on April 3, 2017. The 6 petition in Saticoy Bay is due April 25, 2017. The length of this stay is tied to the Supreme 7 Court’s decision on the petitions for certiorari, so the stay will be reasonably brief and is not 8 indefinite.1 The stay will remain in place until the proceedings in the Supreme Court have 9 concluded. 10 IT IS THEREFORE ORDERED that this case is administratively STAYED. Once the 11 proceedings in the United States Supreme Court in Bourne Valley Court Trust v. Wells Fargo 12 Bank and Saticoy Bay LLC Series 350 Durango 104 v. Wells Fargo Home Mortgage have 13 concluded, any party may move to lift the stay. 14 DATED this 11th day of April, 2017. 15 16 ANDREW P. GORDON UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 1 27 28 The Supreme Court of Nevada stayed the issuance of the remittitur in Saticoy Bay pending the Supreme Court’s disposition of the certiorari proceedings. No. 68630, Dkt. No. 17-04543 (Nev. Feb. 8, 2017). Page 3 of 3

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