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

Filing 144

ORDERED that the Motion to Certify (ECF No. 139 ) is DENIED. Signed by Judge Robert C. Jones on 5/24/2017. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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______________________________________
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US BANK, N.A.,
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Plaintiff,
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vs.
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SFR INVESTMENTS POOL 1, LLC et al.,
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Defendants.
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3:15-cv-00241-RCJ-WGC
ORDER

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This case arises out of a homeowners’ association (“HOA”) foreclosure sale. Pending

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before the Court is a motion to certify a question of law to the Nevada Supreme Court.

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I.

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FACTS AND PROCEDURAL HISTORY
Plaintiff US Bank, N.A. became the successor beneficiary of a $236,000 promissory note

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(the “Note”) and first deed of trust (the “DOT”) encumbering real property at 2546 Napoli Dr.,

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Sparks, NV 89434 (the “Property”) on October 7, 2013. (Compl. ¶¶ 2, 6–19, ECF No. 1). Four

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months earlier, on June 6, 2013, Defendant D’Andrea HOA (“D’Andrea”) had sold the Property

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to Defendant SFR Investments Pool 1, LLC (“SFR”) for $9,000 at a non-judicial HOA

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foreclosure sale. (Id. ¶¶ 31–32). Prior to the sale, counsel for US Bank’s predecessor-in-interest

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had tendered the $288 superpriority piece of D’Andrea’s lien to D’Andrea’s counsel, Defendant

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Alessi & Koenig, LLC (“Alessi”), but Alessi had rejected the tender. (Id. ¶¶ 24–30). Defendant

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Siena HOA (“Siena”) (a sub-HOA of D’Andrea) and its agent, Defendant The Clarkson Law

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Group, P.C. (“Clarkson”), later initiated a subsequent non-judicial HOA foreclosure based on

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SFR’s own delinquency in paying HOA assessments to Siena.

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US Bank sued SFR, D’Andrea, Alessi, Siena, and Clarkson in this Court for: (1) quiet

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title; (2) a preliminary injunction; (3) wrongful foreclosure; (4) negligence; (5) negligence per se;

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(6) breach of contract; (7) misrepresentation; (8) unjust enrichment; and (9) breach of the

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covenant of good faith and fair dealing. SFR answered and counterclaimed for declaratory relief

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that D’Andrea’s June 6, 2013 foreclosure sale extinguished the DOT under Nevada Revised

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Statutes section (“NRS”) 116.3116.

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Clarkson moved to dismiss the single claim against it for a preliminary injunction, and

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Siena separately moved to dismiss the quiet title and preliminary injunction claims for failure to

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state a claim. US Bank moved to dismiss SFR’s Counterclaim and for a preliminary injunction

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preventing Siena and its agents (including Clarkson) from selling the Property. The Court

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denied Clarkson’s and Siena’s motions to dismiss but granted US Bank’s motion to dismiss the

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Counterclaim, with leave to amend. The Court consolidated US Bank’s preliminary injunction

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motion with a trial on the merits as to the single question of the superpriority amount of Siena’s

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lien against the Property. US Bank stipulated to dismiss as against Clarkson and Siena when

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they released the lien and rescinded the notice thereof. SFR filed the Amended Counterclaim

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(“ACC”). US Bank moved to dismiss the ACC for failure to state a claim or, in the alternative,

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for summary judgment, and SFR filed a countermotion for summary judgment. US Bank and

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SFR filed additional cross motions for summary judgment as to US Bank’s claims. The Court

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granted the motion to dismiss the ACC and denied SFR’s countermotion for summary judgment.

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The Court denied US Bank summary judgment under the opt-in notice statutes but granted it

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summary judgment on the quiet title claim under the Bourne Valley Court Tr. v. Wells Fargo

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Bank, NA, 832 F.3d 1154, 1159 (9th Cir. 2016) and the issue of pre-sale tender of the

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superpriority amount. The Court reserved judgment on commercial unreasonableness issues.

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The Court granted summary judgment to SFR against the unjust enrichment claim.

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II.

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DISCUSSION
SFR asks the Court to certify the following question to the Nevada Supreme Court:

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“Does NRS 116.31168(1)’s incorporation of NRS 107.090 require homeowners’ associations to

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provide notices of sale to banks even when a bank does not request notice?” The Court will not

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certify the question. As the Court has ruled after careful analysis of the language of the statute,

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the statute’s legislative history, and the Nevada Supreme Court’s own language interpreting the

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statute’s operation, the answer is “no.” See U.S. Bank, N.A. v. SFR Invs. Pool 1, LLC, 124 F.

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Supp. 3d 1063, 1079–80 (D. Nev. 2015) (citing SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334

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P.3d 408, 411 (Nev. 2014)). The Court of Appeals has since ruled in accord. See Bourne Valley

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Court Tr., 832 F.3d at 1159 (reasoning that NRS 116.31168’s incorporation of NRS 107.090(3)–

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(4) would render NRS 116.31163 and 116.311635 superfluous).

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CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Certify (ECF No. 139) is DENIED.

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IT IS SO ORDERED.

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DATED: 25th day of of May, 2017.
Dated thisThis 24th dayApril, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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