The Bank of New York Mellon v. Red Rock Country Club Homeowners Association et al

Filing 35

ORDER that SFR's motion to dismiss (ECF No. 28 ) is granted; Plaintiff's motion to stay (ECF No. 25 ) is denied as moot; Clerk directed to enter judgment and close this case. Signed by Judge Miranda M. Du on 8/29/2018. (Copies have been distributed pursuant to the NEF - LH)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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THE BANK OF NEW YORK MELLON fka
THE BANK OF NEW YORK, AS
SUCCESSOR TRUSTEE TO JPMORGAN
CHASE BANK, N.A., AS TRUSTEE ON
BEHALF OF THE CERTIFICATEHOLDERS
OF THE CWHEQ INC., CWHEQ
REVOLVING HOME EQUITY LOAN
TRUST, SERIES 2006-H,

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ORDER

Plaintiff,

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Case No. 2:17-cv-01830-MMD-CWH

v.
RED ROCK COUNTRY CLUB
HOMEOWNERS ASSOCIATION; and SFR
INVESTMENTS POOL 1, LLC,

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Defendants.

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I.

SUMMARY

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Plaintiff asserts claims against Defendants Red Rock Country Club Homeowners

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Association (“HOA”) and SFR Investment Pool 1, LCC (“SFR”) arising from the HOA’s

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foreclosure on property (“the Property”) encumbered by a senior deed of trust held by

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Plaintiff. (ECF No. 1.) Plaintiff subsequently filed a motion to stay (ECF No. 25) because

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of a state action involving the same Property (“State Action”). SFR opposes a stay and

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moves for dismissal. (ECF Nos. 27, 28.) The Court has reviewed the briefs relating to the

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parties’ motions. For the reasons discussed herein, SFR’s motion to dismiss (ECF No.

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28) is granted and Plaintiff’s motion to stay (ECF No. 25) is denied as moot.

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II.

RELEVANT BACKGROUND

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The Complaint alleges the usual claims common to these HOA foreclosure

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cases—quiet title/declaratory judgment and injunctive relief against Defendants, and

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wrongful foreclosure and breach of NRS § 116.1113 against the HOA. (ECF No. 1 at 6-

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12.) The relief requested includes an order declaring the foreclosure sale void ab initio

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and enjoining SFR from transferring or encumbering the Property. (Id. at 12-13.) Plaintiff

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asserts that the foreclosure sale on the Property occurred on August 1, 2013. (Id. at 2.)

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On August 6, 2013, a few days after the foreclosure sale, the owners of the

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Property at the time of the sale filed the State Action against SFR, the HOA and others.

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(ECF No. 25 at 2; ECF No. 28 at 2.) SFR answered and asserted counterclaims for quiet

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title. (ECF No. 28 at 2.) Plaintiff intervened in the State Action in August 2014. (Id.) The

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State Action was later stayed pending the parties’ completion of mediation and the court

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statistically closed the State Action on January 25, 2017. (ECF No. 25 at 2.)

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About six months later, on July 5, 2017, Plaintiff initiated this action because,

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according to Plaintiff, of “SFR’s unwillingness to move the state court action forward.”1

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(ECF No. 25 at 2.) Yet, on January 10, 2018, Plaintiff filed a motion in the State Action to

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dismiss or alternatively to reopen the case. (Id. at 3.) The state court denied Plaintiff’s

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motion to dismiss, but reopened the case. (Id.) On August 21, 2018, Plaintiff filed a motion

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to dismiss in the State Action. (ECF No. 34.)

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III.

DISCUSSION

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SFR argues that the Court should dismiss rather than stay this action because of

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the prior exclusive jurisdiction doctrine and because Plaintiff elected to intervene in the

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State Action in 2014. (ECF No. 28 at 4-5.) The Court agrees.
“The prior exclusive jurisdiction doctrine holds that when one court is

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exercising in rem jurisdiction over

a

res,

a

second

court

will

not

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Of course, Plaintiff could have filed a motion to reopen the State Action in July 2017
when the State Action had only been statistically closed for about six months, as it later
did in January 2018.

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assume in rem jurisdiction over the same res.” Chapman v. Deutsche Bank Nat’l Trust

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Co., 651 F.3d 1039, 1043 (9th Cir. 2011) (citation and internal quotation marks

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omitted). In Chapman v. Deutsche Bank Nat’l Trust Co., 302 P.3d 1103 (Nev. 2013), the

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Nevada Supreme Court held that quiet title proceedings are in rem or quasi in rem in

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nature. Accordingly, the Court cannot assume in rem jurisdiction.

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Plaintiff insists that exceptional circumstances here warrant a stay rather than

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dismissal in part because its quiet title claim is an in rem proceeding. (ECF No. 25 at 5.)

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However, the State Action also involves a quiet title claim. Moreover, Plaintiff elected to

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intervene and apparently participated in the prerequisite mediation in connection with the

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State Action. Yet, instead of moving to reopen the State Action when SFR purportedly

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refused to move that action forward, Plaintiff filed this action. Plaintiff then waited seven

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more months to move to reopen or dismiss the State Action. Under these circumstances,

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the Court declines to stay the action.

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IV.

CONCLUSION

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The Court notes that the parties made several arguments and cited to several

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cases not discussed above. The Court has reviewed these arguments and cases and

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determines that they do not warrant discussion as they do not affect the outcome of the

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motions before the Court.

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It is therefore ordered that SFR’s motion to dismiss (ECF No. 28) is granted.

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It is further ordered that Plaintiff’s motion to stay (ECF No. 25) is denied as moot.

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The Clerk is directed to enter judgment in accordance with this order and close this

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case.
DATED THIS 29th day of August 2018.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE