HSBC Bank USA, National Association v. SFR Investments Pool 1, LLC et al

Filing 4

ORDER STAYING CASE. This case is administratively STAYED. Regardless of this stay, the plaintiff shall timely serve process upon the defendants and file proof of service. Signed by Judge Andrew P. Gordon on 5/24/2017. (Copies have been distributed pursuant to the NEF - SLD)

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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 *** 4 5 HSBC BANK USA, NATIONAL ASSOCIATION, Plaintiff, 6 ORDER STAYING CASE v. 7 8 Case No. 2:17-cv-01479-APG-VCF SFR INVESTMENTS POOL 1, LLC, et al., Defendants. 9 10 This is one of many disputes over the effect of a nonjudicial foreclosure sale conducted by 11 12 a homeowners association (“HOA”) after the prior owner failed to pay HOA assessments. On 13 August 12, 2016, a divided Ninth Circuit panel in Bourne Valley Court Trust v. Wells Fargo Bank 14 held that Nevada Revised Statutes Chapter 116’s HOA nonjudicial foreclosure scheme, as it 15 existed before the statutory scheme was amended in 2015, “facially violated mortgage lenders’ 16 constitutional due process rights.” 832 F.3d 1154, 1155 (9th Cir. 2016); but see id. at *6-11 17 (Wallace, J., dissenting). Those motions were denied and the mandate issued on December 14, 18 2016. Bourne Valley Court Tr. v. Wells Fargo Bank, 9th Cir. Dkt. No. 15-15233, ECF Nos. 75, 19 76. 20 The Supreme Court of Nevada recently decided Saticoy Bay LLC Series 350 Durango 104 21 v. Wells Fargo Home Mortgage, holding that “the Due Process Clauses of the United Sates and 22 Nevada Constitutions are not implicated in an HOA’s nonjudicial foreclosure of a superpriority 23 lien.” 388 P.3d 970, 975 (Nev. 2017). The losing party in Bourne Valley filed a petition for 24 certiorari in the United States Supreme Court and the prevailing party has filed a brief agreeing 25 that the Supreme Court should grant certiorari. Because Bourne Valley and Saticoy Bay reached 26 opposite conclusions, the constitutionality of Nevada’s HOA nonjudicial foreclosure scheme may 27 be decided by the United States Supreme Court. See Sup. Ct. R. 10(b) (identifying as a 28 1 compelling reason for granting certiorari that “a state court of last resort has decided an important 2 federal question in a way that conflicts with the decision . . . of a United States court of appeals”). 3 I therefore sua sponte stay this case pending a decision on the petition for certiorari in Bourne 4 Valley. 5 A district court has the inherent power to stay cases to control its docket and promote the 6 efficient use of judicial resources. Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936); 7 Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1066 (9th Cir. 2007). 8 When determining whether to stay a case pending the resolution of another case, I must consider 9 (1) the possible damage that may result from a stay, (2) any “hardship or inequity” that a party 10 may suffer if required to go forward, (3) “and the orderly course of justice measured in terms of 11 the simplifying or complicating of issues, proof, and questions of law” that a stay will engender. 12 Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). I find that a Landis stay is 13 appropriate here. 14 The crux of the parties’ dispute is whether the HOA foreclosure sale extinguished the 15 deed of trust. If the HOA sale was void because Chapter 116 is facially unconstitutional, then the 16 parties’ dispute is, in large part, resolved or at least simplified. The Supreme Court’s 17 consideration of the petition in Bourne Valley thus could be dispositive of this case, or at least of 18 significant issues in the case. As the jurisprudence and the parties’ arguments in this area evolve, 19 the parties file new motions or move to supplement the pending briefs, burdening our already- 20 busy docket. Bourne Valley and Saticoy Bay no doubt will inspire more motions and 21 supplements. Staying this case pending the Supreme Court’s disposition of the petition in Bourne 22 Valley will permit the parties to present arguments and evidence in the context of complete and 23 resolved precedent, and it will allow me to evaluate the claims in light of this legal authority. 24 Consequently, a stay pending the disposition of the certiorari proceedings will simplify the 25 proceedings and promote the efficient use of the parties’ and the court’s resources. 26 27 28 Page 2 of 3 1 Resolving the claims or issues in this case before the Supreme Court decides whether to 2 grant or deny the petitions could impose a hardship on both parties. A stay will prevent 3 unnecessary or premature briefing on Bourne Valley and Saticoy Bay’s impact on this case. 4 The potential damage that may result from a stay is that the parties will have to wait 5 longer for resolution of this case and any motions that they intend to file in the future. But a 6 delay would also result from new briefing that may be necessitated if the Supreme Court grants 7 certiorari. So a stay pending the Supreme Court’s decision will not necessarily lengthen the life 8 of this case. Any possible damage that a stay may cause is minimal. 9 Finally, I expect the stay pending the Supreme Court’s disposition of the petitions for 10 certiorari to be reasonably short. The petition in Bourne Valley was filed on April 3, 2017 and the 11 response brief was filed May 16, 2017. The length of this stay is tied to the Supreme Court’s 12 decision on the petition for certiorari, so the stay will be reasonably brief and is not indefinite. 13 The stay will remain in place until the proceedings in the Supreme Court have concluded. 14 IT IS THEREFORE ORDERED that this case is administratively STAYED. Once the 15 proceedings in the United States Supreme Court in Bourne Valley Court Trust v. Wells Fargo 16 Bank have concluded, any party may move to lift the stay. Regardless of this stay, the plaintiff 17 shall timely serve process upon the defendants and file proof of service. 18 DATED this 24th day of May, 2017. 19 20 21 ANDREW P. GORDON UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 Page 3 of 3

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