Bank Of New York Mellon v Nevada Association Services, Inc.

Filing 80

ORDER. IT IS HEREBY ORDERED that 45 Plaintiff's Motion for Summary Judgment is DENIED as moot.IT IS FURTHER ORDERED that 46 Defendant Edward Kielty Trust's Motion for Summary Judgment is DENIED as moot. IT IS FURTHER ORDERED that [ 73] Defendant Hillcrest at Summit Hills Homeowners Association's Motion to Dismiss Amended Complaint is DENIED as moot. IT IS FURTHER ORDERED that 75 Defendant Hillcrest at Summit Hills Homeowners Association's Motion to Dismiss Amended Complaint is DENIED as moot. IT IS FURTHER ORDERED that all pending motions are DENIED without prejudice. IT IS FURTHER ORDERED that this action is STAYED. Signed by Judge Kent J. Dawson on 1/24/2018. (Copies have been distributed pursuant to the NEF - ADR)

1
2
3
4
5
6

UNITED STATES DISTRICT COURT

7

DISTRICT OF NEVADA

8
9

THE BANK OF NEW YORK MELLON,

10

Plaintiff,

11

v.

12

Case No. 2:16-cv-01303-KJD-NJK

HILLCREST AT SUMMIT HILLS
HOMEOWNERS ASSOCIATION et al.,

ORDER
13
Defendants.
14
15

Presently before the Court is Plaintiff’s Motion for Summary Judgment (#45). Defendant

16

Edward Kielty Trust filed a response (#59) to which Plaintiff replied (#63). Also before the Court is

17

Defendant Edward Kielty Trust’s Motion for Summary Judgment (#46). Plaintiff filed a response

18

(#58) to which Defendant Edward Kielty Trust replied (#62). Also before the Court is Defendant

19

Hillcrest at Summit Hills Homeowners Association’s Motion to Dismiss Amended Complaint (#71).

20

Plaintiff filed a response (#74) to which Defendant Hillcrest at Summit Hills Homeowners

21

Association replied (#76). Also before the Court is Defendant Hillcrest at Summit Hills Homeowners

22

Association’s Motion to Dismiss Amended Complaint (#73). Plaintiff filed a response (#75) to

23

which Defendant Hillcrest at Summit Hills Homeowners Association replied (#77).

24

I. Background

25
26

This case emerges from Summit Hills Homeowners Association’s May 2013 non-judicial
foreclosure sale of the property located at 2216 Calm Sea Avenue, Las Vegas, Nevada 89106 (“the

1

Property”). All motions presently before the Court center in whole or in part around the question of

2

what notice of default Summit Hills Homeowners Association was required to provide Plaintiff prior

3

to its foreclosure sale on the Property.

4 II. Analysis
5

A. Certified Question

6

On April 21, 2017, in Bank of New York Mellon v. Star Hills Homeowners Association, this

7

Court certified the following question to the Nevada Supreme Court: “Whether NRS §

8

116.31168(1)’s incorporation of NRS § 107.090 requires homeowners associations to provide

9

notices of default to banks even when a bank does not request notice?” Bank of New York Mellon v.

10

Star Hill Homeowners Assoc., 2017 WL 1439671, at *5 (D. Nev. April 21, 2017).

11

In granting certification, the Court reasoned the following: In Bourne Valley, the Ninth

12

Circuit definitively answered the question that the statute’s “opt-in” framework was unconstitutional.

13

Bourne Valley Court Trust v. Wells Fargo Bank, NA, 832 F.3d 1154, 1160 (2016). However, that

14

leaves this Court with the unresolved question of what notice must be provided. “It is solely within

15

the province of the state courts to authoritatively construe state legislation.” Cal. Teachers Ass’n v.

16

State Bd. of Educ., 271 F.3d 1141, 1146 (9th Cir. 2001). As such, state law questions of first

17

impression like this one should be resolved by the state’s highest court. See Huddleston v. Dwyer,

18

322 U.S. 232, 237 (1944). Allowing the Nevada Supreme Court to answer this question before

19

considering any other motions will provide this Court the necessary guidance as to how to handle the

20

issue of notice and actual notice in light of Bourne Valley.

21

In Bank of New York Mellon, the Court did not and could not rely upon any controlling state

22

law as to the requirements of notice. This Court faces the same predicament here. An answer to the

23

above already certified question will provide much needed clarity, and may be dispositive of many of

24

the issues currently before the Court in this case.

25
26

2

1

B. Sua Sponte Stay of the Case

2

The pending motions for summary judgment and motions to dismiss in this case implicate the

3

previously certified question regarding what notice state law requires. To save the parties from the

4

need to invest resources in discovery surrounding the notice requirement, the Court sua sponte stays

5

all proceedings in this case and denies all pending motions without prejudice.

6

A district court has the inherent power to stay cases to control its docket and promote the

7

efficient use of judicial resources. Landis v. North Am. Co., 299 U.S. 248, 254-55 (1936);

8

Dependable Highway Exp., Inc., v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). When

9

determining whether a stay is appropriate pending the resolution of another case — often called a

10

“Landis stay” — the district court must weigh: (1) the possible damage that may result from a stay;

11

(2) any “hardship or inequity” that a party may suffer if required to go forward; and (3) “the orderly

12

course of justice measured in terms of the simplifying or complicating of issues, proof, and questions

13

of law” that a stay will engender. Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005).

14

Weighing these considerations, the Court finds that a Landis stay is appropriate.

15

1. Damage from a stay

16

The only potential damage that may result from a stay is that the parties will have to

17

wait longer for resolution of this case and any motions that they have filed or intend to file in the

18

future. But a delay would also result from any rebriefing or supplemental briefing that may be

19

necessitated pending the Nevada Supreme Court’s answer to the certified question. It is not clear that

20

a stay will ultimately lengthen the life of this case.

21

Additionally, a stay of this case pending resolution of the certified question is

22

expected to be reasonably short. This Court certified the question approximately nine months ago,

23

and briefing on the pending petition in Nevada’s Supreme Court is completed. Because the length of

24

this stay is directly tied to the petition proceedings in that case, it is reasonably brief, and not

25

indefinite. Thus, the Court finds only minimal possible damage that this stay may cause.

26

3

1

2. Hardship and inequity

2

Both parties equally face hardship or inequity if the Court resolves the claims or

3

issues before the certified question has been resolved. And in the interim both parties stand to benefit

4

from a stay, regardless of the outcome of the question. A stay will prevent any additional,

5

unnecessary briefing and premature expenditures of time, attorney’s fees, and resources.

6

3. Orderly course of justice

7

At the center of this case is the question of what notice is now required under NRS

8

Chapter 116 in light of the Ninth Circuit decision Bourne Valley. The jurisprudence in this area of

9

unique Nevada law continues to evolve, causing parties in the scores of foreclosure-challenge actions

10

to file new motions or supplement the ones that they already have pending, resulting in

11

“docket-clogging entries and an impossible-to-follow chain of briefs in which arguments are

12

abandoned and replaced.” Nationstar Mortg., LLC v. Springs at Spanish Trail Assoc., 2017 WL

13

752775, at *2 (D. Nev. Feb. 27, 2017). Staying this case pending the Nevada Supreme Court’s

14

disposition of the certified question in Bank of New York Mellon will permit the parties to evaluate,

15

and the Court to consider, viability of the claims under the most complete precedent. This will

16

simplify and streamline the proceedings and promote the efficient use of the parties’ and the Court’s

17

resources.

18

Therefore, the Court orders this action stayed. Once the Nevada Supreme Court has

19

resolved the question certified in Bank of New York Mellon, either party may move to lift the stay.

20 III. Conclusion
21
22
23
24

Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary Judgment
(#45) is DENIED as moot;
IT IS FURTHER ORDERED that Defendant Edward Kielty Trust’s Motion for Summary
Judgment (#46) is DENIED as moot;

25
26

4

1
2
3
4

IT IS FURTHER ORDERED that Defendant Hillcrest at Summit Hills Homeowners
Association’s Motion to Dismiss Amended Complaint (#73) is DENIED as moot;
IT IS FURTHER ORDERED that Defendant Hillcrest at Summit Hills Homeowners
Association’s Motion to Dismiss Amended Complaint (#75) is DENIED as moot;

5

IT IS FURTHER ORDERED that all pending motions are DENIED without prejudice;

6

IT IS FURTHER ORDERED that this action is STAYED.

7 DATED this 24th day of January, 2018.
8
9
10

______________________________
Kent J. Dawson
United States District Judge

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

5