Federal Housing Finance Agency et al v. Nevada New Builds, LLC

Filing 13

ORDER Granting 12 Stipulation to Stay Discovery. Signed by Magistrate Judge Carl W. Hoffman on 11/29/16. (Copies have been distributed pursuant to the NEF - ADR)

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Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
300 S. Second St., Suite 1510
FENNEMORE CRAIG, P.C.
Reno, Nevada 89501
Tel: [phone] Fax: [phone]
[e-mail],
[e-mail]
Attorneys for Federal Housing Finance Agency
Amy Sorenson, Esq. (SBN 12495)
Robin E. Perkins, Esq. (SBN 9891)
Kelly H. Dove, Esq. (SBN 10569)
SNELL & WILMER
3883 Howard Hughes Parkway, Suite 1100
Las Vegas, Nevada 89169
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]; [e-mail]
Attorneys for Federal National Mortgage Association
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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THE FEDERAL HOUSING FINANCE
AGENCY, in its capacity as Conservator of
Federal National Mortgage Association; and
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,

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STIPULATION TO STAY DISCOVERY

Plaintiffs,

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CASE NO. 2:16-cv-01188-GMN-CWH

vs.
NEVADA NEW BUILDS, LLC, a Nevada
Domestic Limited Liability Company
Defendant.

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INTRODUCTION

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Plaintiffs Federal National Mortgage Association (“Fannie Mae”) and Federal Housing
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Finance Agency (“FHFA” or the “Conservator”), in its capacity as Conservator of Fannie Mae,
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and Defendant Nevada New Builds, LLC hereby stipulate to stay discovery. Good cause exists for
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the Court to stay all discovery in this matter pending resolution of Plaintiffs’ Motion for Summary
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Judgment (Dkt. No. 9).
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Background
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On May 26, 2016, Plaintiffs filed a Complaint, seeking, inter alia, a declaratory judgment
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that federal law prevents a homeowners’ association’s foreclosure sale from extinguishing an
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Enterprise1 Lien while the Enterprise is in FHFA conservatorship. (Dkt. No. 1). Plaintiffs filed

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their Motion for Summary Judgment on August 3, 2016. (Dkt. No. 9). Defendant filed an
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Opposition to Plaintiffs’ Motion for Summary Judgment on August 26, 2016, (Dkt. No. 10), and
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Plaintiffs filed a reply in support of their Motion for Summary Judgment. (Dkt. No. 11). To date,
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no party has served discovery requests on the other.
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Plaintiffs’ Motion for Summary Judgment raises the central legal question in this case—
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whether a homeowner’s association foreclosure sale conducted under Nev. Rev. Stat.
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§ 116.3116(2) (“HOA Sale”) may extinguish Fannie Mae or Freddie Mac’s property interest.
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Plaintiffs argue that 12 U.S.C. § 4617(j)(3) (the “Federal Foreclosure Bar”) precludes an HOA
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Sale from extinguishing Fannie Mae or Freddie Mac’s property interests and preempts any
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contrary state law. No discovery is necessary to resolve this legal question, and the Court’s
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decision on the pending Motion for Summary Judgment could dispose of Plaintiffs’ claims.
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Because discovery may never be required in this action, it would be burdensome, inefficient, and
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inequitable to conduct it at this stage.
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Legal Standard Governing Motions to Stay Discovery
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District courts have “wide discretion in controlling discovery.” Little v. City of Seattle, 863
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F.2d 681, 685 (9th Cir. 1988); see also Yung Lo v. Golden Gaming, No. 2:12-CV-01885-JAD26
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For purposes of this motion, “Enterprise” refers to either Fannie Mae or Freddie Mac.
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CWH, 2014 WL 794205, at *1 (D. Nev. Feb. 26, 2014) (“Courts have broad discretionary power

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to control discovery.”). “In evaluating the propriety of an order staying or limiting discovery while

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a dispositive motion is pending” courts “consider[] the goal of Federal Rule of Civil Procedure 1,

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which provides that the Rules shall ‘be construed and administered to secure the just, speedy, and

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inexpensive determination of every action.’” Yung Lo, 2014 WL 794205, at *3 (quoting Fed. R.

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Civ. P. 1). Courts accordingly ask “whether it is more just to speed the parties along in discovery

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while a dispositive motion is pending or to delay discovery to accomplish the inexpensive

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determination of the case.” Id.

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Courts thus may limit discovery “upon a showing of good cause or where ‘justice requires

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to protect a party or person from annoyance, embarrassment, oppression, or undue burden or

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expense.’” Aguirre v. S. Nevada Health Dist., No. 2:13-CV-01409-LDG-CWH, 2013 WL

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6865710, at *2 (D. Nev. Dec. 30, 2013) (quoting Wagh v. Metris Direct, Inc., 363 F.3d 821, 829

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(9th Cir. 2003)). A stay of discovery also may be appropriate to “further the goals of judicial

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economy and control of the Court’s docket,” id., or to “reduce costs and increase efficiency,”

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Johnson v. Cheryl, No. 2:11-CV-00291-JCM-CWH, 2013 WL 129383, at *4 (D. Nev. 2013).

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When a pending motion raises a threshold legal issue that “do[es] not require further discovery and

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[is] potentially dispositive of the entire case,” this Court has not hesitated to approve a stay of

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discovery. Yung Lo, 2014 WL 794205, at *3; Aguirre, 2013 WL 6865710, at *2; Thrash v. Towbin

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Motor Cars, No. 2:13-CV-01216-MMD-CWH, 2013 WL 5969829, at *2 (D. Nev. Nov. 7, 2013);

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Kidneigh v. Tournament One Corp., No. 2:12-CV-02209-APG-CWH, 2013 WL 1855764, at *2

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(D. Nev. May 1, 2013).

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A Stay Is Appropriate Because the Motion for Summary Judgment May Resolve the Parties’
Claims and Can Be Resolved Without Discovery

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Under the governing standard, a stay of discovery is appropriate here.
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First, if granted, Plaintiffs’ Motion for Summary Judgment will dispose of their claims.
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Plaintiffs’ claims allege that the Federal Foreclosure Bar preempts the Statute Foreclosure Statute.
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Thus, if the Court granted Plaintiffs’ Motion, it would hold that HOA foreclosure sales do not
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extinguish the Fannie Mae’s property interests and Defendant’s interests in the Properties are
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subject to the Fannie Mae’s Liens.

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Second, resolving whether federal law prevents an HOA foreclosure sale from

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extinguishing Fannie Mae’s property interest while under FHFA’s conservatorship does not

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require discovery or resolution of disputed material facts. This issue presents a pure question of

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law and only requires the Court to interpret the Federal Foreclosure Bar and determine its

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preemptive effect on Nevada law. Cf. Aguirre, 2013 WL 6865710, at *2; Thrash, 2013 WL

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5969829, at *2; Kidneigh, 2013 WL 1855764, at *2. For that reason, this Court and other courts in

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this District have repeatedly stayed discovery pending resolution of FHFA, Freddie Mac, and/or

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Fannie Mae’s similar motions for summary judgment. See, e.g., Order, My Home Now LLC v.

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Bank of America, NA, No. 2:14-cv-01957-RFB-CWH (Oct. 19, 2015) (finding “good cause exists

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to stay discovery pending resolution of the parties’ cross-motions for summary judgment”); see

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also Order, 1597 Ashfield, No. 2:14-cv-2123-JCM-CWH (Apr. 16, 2015) (Dkt. 54) (“As in several

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other cases involving similar issues, there is good cause to stay discovery pending resolution of the

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motion for summary judgment.”).

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Because Plaintiffs’ claims can be resolved as a matter of law on the present evidentiary

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record without need for discovery, it would be “more just … to delay discovery to accomplish the

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inexpensive determination of the case.” Yung Lo, 2014 WL 794205, at *3. A stay is appropriate

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“to secure the just, speedy, and inexpensive determination of [this] action.” Fed. R. Civ. P. 1.

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For the foregoing reasons, the parties respectfully request that the Court stay all discovery
pending resolution of Plaintiffs’ Motion for Summary Judgment.

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25242749.1

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DATED this 22 day of November, 2016.
/s/ Kelly H. Dove, Esq.
Amy F. Sorenson, Esq. (SBN 12495)
Robin E. Perkins, Esq. (SBN 9891)
Kelly H. Dove, Esq. (SBN 10569)
SNELL & WILMER LLP
3883 Howard Hughes Parkway,
Suite 1100
Las Vegas, NV 89169
Tel: [phone]
Fax: [phone]
[e-mail];
[e-mail];
[e-mail]

/s/ Leslie Bryan Hart, Esq.
Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
FENNEMORE CRAIG, P.C.
300 E. Second St., Suite 1510
Reno, NV 89501
Tel: [phone]
Fax: [phone]
[e-mail];
[e-mail]
Attorneys for Plaintiff Federal Housing Finance
Agency

Attorneys for Plaintiff Federal National
Mortgage Association

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s/ Joseph Y. Hong, Esq.
Joseph Y. Hong, Esq. (SBN 5995)
HONG & HONG
10781 West Twain Avenue
Las Vegas, NV 89135
Tel: [phone]
Fax: [phone]
[e-mail]

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Attorneys for Defendant Nevada New Builds, LLC

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November 29,
2016

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CERTIFICATE OF SERVICE

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Pursuant to F.R.C.P. 5(b) and Electronic Filing Procedure IV(B), I certify that on the [] day

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of November, 2016, a true and correct copy of STIPULATION TO STAY DISCOVERY was

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transmitted electronically through the Court’s e-filing electronic notice system to the attorney(s)

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associated with this case. If electronic notice is not indicated through the court’s e-filing system,

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then a true and correct paper copy of the foregoing document was delivered via U.S. Mail.
Joseph Y. Hong, Esq.
HONG & HONG
10781 West Twain Avenue
Las Vegas, NV 89135
[e-mail]

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/s/ Kelly H. Dove

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