Bank of America, N.A. v. Mesa Verde Homeowners Association et al
Filing
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ORDER. IT IS HEREBY ORDERED, ADJUDGED, and DECREED that 63 SFR's motion to certify be, and the same hereby is, DENIED. Signed by Judge James C. Mahan on 2/28/17. (Copies have been distributed pursuant to the NEF - ADR)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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***
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BANK OF AMERICA, N.A.,
Case No. 2:16-cv-00498-JCM-NJK
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Plaintiff,
ORDER
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v.
MESA VERDE HOMEOWNER’S
ASSOCIATION, INC., et al.,
Defendants.
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Presently before the court is SFR Investments Pool 1, LLC’s (“SFR”) motion to certify
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question of law to the Nevada Supreme Court. (ECF No. 63). Plaintiff Bank of America, N.A.
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(“BANA”) filed a response (ECF No. 67), to which SFR replied (ECF No. 68).
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I.
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Facts
This case involves a dispute over real property located at 4129 Thomas Patrick Avenue,
North Las Vegas, Nevada (the “property”).
On May 27, 2008, George and Juanita Bennett obtained a loan from CTX Mortgage
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Company, LLC in the amount of $215,761.00, which was secured by a deed of trust recorded on
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May 29, 2008. (ECF No. 1). The Federal Housing Administration (“FHA”) insured the deed of
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trust. (ECF No. 1). The deed of trust was assigned to BANA. (ECF No. 1).
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On March 9, 2010, Alessi & Koenig, LLC (“A&K”), acting on behalf of the Mesa Verde
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homeowners’ association (the “HOA”), recorded a notice of delinquent assessment lien, stating
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an amount due of $920.00. (ECF No. 1). On August 5, 2010, A&K recorded a notice of default
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and election to sell to satisfy the delinquent assessment lien, stating an amount due of $5,380.00.
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(ECF No. 1).
On October 13, 2011, A&K recorded another notice of delinquent assessment lien,
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stating an amount due of $3,545.00 and scheduling the sale for November 16, 2011. (ECF No.
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1). On August 2, 2012, A&K recorded a second notice of trustee’s sale, scheduling the
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foreclosure sale for September 5, 2012, and stating an amount due of $3,545.00. (ECF No. 1).
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On June 3, 2013, A&K recorded a third notice of trustee’s sale, scheduling the sale for July 3,
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2013 and stating an amount due of $7,686.26. (ECF No. 1).
On August 7, 2013, SFR Investment Pool 1, LLC (“SFR”) purchased the property for
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$20,000.00. (ECF No. 1). The trustee’s deed upon sale was recorded August 13, 2013. (ECF
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No. 1).
In the underlying complaint, BANA alleges four claims of relief: (1) quiet
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title/declaratory judgment against all defendants; (2) breach of NRS 116.1113 against A&K and
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the HOA; (3) wrongful foreclosure against A&K and the HOA; and (4) injunctive relief against
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SFR. (ECF No. 1). The court dismissed claims (2) through (4) on October 11, 2016. (ECF No.
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52).
In the instant motion, SFR moves to certify a question of law to the Nevada Supreme
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Court. (ECF No. 63).
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II.
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Legal Standard
The Nevada Rules of Appellate Procedure provide that the Supreme Court of Nevada has
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the power to answer “questions of [state] law . . . which may be determinative of the cause then
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pending in the certifying court and as to which it appears to the certifying court there is no
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controlling precedent in the decisions of the Supreme Court of [Nevada].” Nev. R. App. P. 5(a).
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The Nevada Supreme Court “may answer questions of law certified [] by a federal court
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when (1) [the] answers to the certified questions may be determinative of part of the federal case,
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(2) there is no clearly controlling Nevada precedent, and (3) the answers to the certified
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questions will help settle important questions of law. See, e.g., Hartford Fire Ins. Co. v. Tr. of
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Const. Indus., 208 P.3d 884, 888 (Nev. 2009).
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Where the question does not impact the merits of a claim pending before the certifying
court, the question should not be certified to the Supreme Court. See Nev. R. App. P. 5(a)
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(requiring that certified question be “determinative”); see also Volvo Cars of N. Am., Inc. v.
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Ricci, 137 P.2d 1161, 1164 (Nev. 2006) (declining to answer certified questions where “answers
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to the questions posed [] would not ‘be determinative’ of any part of the case”). “The
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certification procedure is reserved for state law questions that present significant issues,
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including those with important public policy ramifications, and that have not yet been resolved
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by the state courts.” Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003).
Federal courts have discretion to certify questions of state law. Lehman Bros. v. Schein,
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416 U.S. 386, 391 (1974). “Resort to certification is not mandatory where state law is unclear on
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a particular issue.” Carolina Cas. Ins. Co. v. McGhan, 572 F. Supp. 2d 1222, 1225 (D. Nev.
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2008) (citing Lehman Bros., 416 U.S. at 390–91). Generally, “[w]hen a decision turns on
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applicable state law and the state’s highest court has not adjudicated the issue, a federal court
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must make a reasonable determination of the result the highest state court would reach if it were
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deciding the case.” Aetna Cas. & Sur. Co. v. Sheft, 989 F.2d 1105, 1108 (9th Cir. 1993).
Further, a federal court may decline to certify a question where controlling precedent is
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available for guidance. Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033, 1041 (9th
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Cir. 2014); see also Kehoe v. Aurora Loan Servs., LLC, No. 3:10-cv-256-RCJ-RAM; 2010 WL
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4286331, at *11 (D. Nev. Oct. 20, 2010) (declining to certify question to Nevada Supreme Court
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where statutory language was sufficiently clear for the court to apply).
Finally, a party must show “particularly compelling reasons” for certification when that
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party first requests it after losing on an issue. Complaint of McLinn, 744 F.2d 677, 681 (9th Cir.
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1984) (“Ordinarily such a movant should not be allowed a second chance at victory when, as
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here, the district court employed a reasonable interpretation of state law.”).
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III.
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Discussion
SFR requests that the court certify the following question to the Nevada Supreme Court:
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“Whether NRS § 116.31168(1)’s incorporation of NRS § 107.090 requires homeowners’
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associations to provide notices of default to banks even when a bank does not request notice?”
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(ECF No. 63).
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The court declines to certify this question as controlling precedent is available for
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guidance. The Ninth Circuit, in Bourne Valley Court Trust v. Wells Fargo Bank, N.A., 832 F.3d
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1154 (9th Cir. 2016)—which SFR cites to in its motion—expressly answered this exact question
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in the negative. More specifically, the Ninth Circuit held, in relevant part, as follows:
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Bourne Valley argues that Nevada Revised Statute section 116.31168(1), which
incorporated section 107.090, mandated actual notice to mortgage lenders whose
rights are subordinate to a homeowners’ association super priority lien. . . .
According to Bourne Valley, this incorporation of section 107.090 means that
foreclosing homeowners’ associations were required to provide notice to
mortgage lenders even absent a request.
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If section 116.31168(1)’s incorporation of section 107.090 were to have required
homeowners’ associations to provide notice of default to mortgage lenders even
absent a request, section 116.31163 and section 116.31165 would have been
meaningless. We reject Bourne Valley’s argument.
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Bourne Valley Court Trust, 832 F.3d at 1159.
Accordingly, the court will deny SFR’s motion to certify this question to the Nevada
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Supreme Court.
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IV.
Conclusion
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Accordingly,
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IT IS HEREBY ORDERED, ADJUDGED, and DECREED that SFR’s motion to certify
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(ECF No. 63) be, and the same hereby is, DENIED.
DATED THIS 28th day of February, 2017.
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JAMES C. MAHAN
UNITED STATES DISTRICT JUDGE
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