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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1 2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 6 7 8 9 10 11 ______________________________________ ) ) US BANK, N.A., ) ) Plaintiff, ) ) vs. ) ) SFR INVESTMENTS POOL 1, LLC et al., ) ) Defendants. ) ) 3:15-cv-00241-RCJ-WGC ORDER 12 13 This case arises out of a homeowners’ association (“HOA”) foreclosure sale. Pending 14 before the Court is a motion to certify a question of law to the Nevada Supreme Court. 15 I. 16 FACTS AND PROCEDURAL HISTORY Plaintiff US Bank, N.A. became the successor beneficiary of a $236,000 promissory note 17 (the “Note”) and first deed of trust (the “DOT”) encumbering real property at 2546 Napoli Dr., 18 Sparks, NV 89434 (the “Property”) on October 7, 2013. (Compl. ¶¶ 2, 6–19, ECF No. 1). Four 19 months earlier, on June 6, 2013, Defendant D’Andrea HOA (“D’Andrea”) had sold the Property 20 to Defendant SFR Investments Pool 1, LLC (“SFR”) for $9,000 at a non-judicial HOA 21 foreclosure sale. (Id. ¶¶ 31–32). Prior to the sale, counsel for US Bank’s predecessor-in-interest 22 had tendered the $288 superpriority piece of D’Andrea’s lien to D’Andrea’s counsel, Defendant 23 Alessi & Koenig, LLC (“Alessi”), but Alessi had rejected the tender. (Id. ¶¶ 24–30). Defendant 24 Siena HOA (“Siena”) (a sub-HOA of D’Andrea) and its agent, Defendant The Clarkson Law 1 of 3 1 Group, P.C. (“Clarkson”), later initiated a subsequent non-judicial HOA foreclosure based on 2 SFR’s own delinquency in paying HOA assessments to Siena. 3 US Bank sued SFR, D’Andrea, Alessi, Siena, and Clarkson in this Court for: (1) quiet 4 title; (2) a preliminary injunction; (3) wrongful foreclosure; (4) negligence; (5) negligence per se; 5 (6) breach of contract; (7) misrepresentation; (8) unjust enrichment; and (9) breach of the 6 covenant of good faith and fair dealing. SFR answered and counterclaimed for declaratory relief 7 that D’Andrea’s June 6, 2013 foreclosure sale extinguished the DOT under Nevada Revised 8 Statutes section (“NRS”) 116.3116. 9 Clarkson moved to dismiss the single claim against it for a preliminary injunction, and 10 Siena separately moved to dismiss the quiet title and preliminary injunction claims for failure to 11 state a claim. US Bank moved to dismiss SFR’s Counterclaim and for a preliminary injunction 12 preventing Siena and its agents (including Clarkson) from selling the Property. The Court 13 denied Clarkson’s and Siena’s motions to dismiss but granted US Bank’s motion to dismiss the 14 Counterclaim, with leave to amend. The Court consolidated US Bank’s preliminary injunction 15 motion with a trial on the merits as to the single question of the superpriority amount of Siena’s 16 lien against the Property. US Bank stipulated to dismiss as against Clarkson and Siena when 17 they released the lien and rescinded the notice thereof. SFR filed the Amended Counterclaim 18 (“ACC”). US Bank moved to dismiss the ACC for failure to state a claim or, in the alternative, 19 for summary judgment, and SFR filed a countermotion for summary judgment. US Bank and 20 SFR filed additional cross motions for summary judgment as to US Bank’s claims. The Court 21 granted the motion to dismiss the ACC and denied SFR’s countermotion for summary judgment. 22 The Court denied US Bank summary judgment under the opt-in notice statutes but granted it 23 summary judgment on the quiet title claim under the Bourne Valley Court Tr. v. Wells Fargo 24 Bank, NA, 832 F.3d 1154, 1159 (9th Cir. 2016) and the issue of pre-sale tender of the 2 of 3 1 superpriority amount. The Court reserved judgment on commercial unreasonableness issues. 2 The Court granted summary judgment to SFR against the unjust enrichment claim. 3 II. 4 DISCUSSION SFR asks the Court to certify the following question to the Nevada Supreme Court: 5 “Does NRS 116.31168(1)’s incorporation of NRS 107.090 require homeowners’ associations to 6 provide notices of sale to banks even when a bank does not request notice?” The Court will not 7 certify the question. As the Court has ruled after careful analysis of the language of the statute, 8 the statute’s legislative history, and the Nevada Supreme Court’s own language interpreting the 9 statute’s operation, the answer is “no.” See U.S. Bank, N.A. v. SFR Invs. Pool 1, LLC, 124 F. 10 Supp. 3d 1063, 1079–80 (D. Nev. 2015) (citing SFR Invs. Pool 1, LLC v. U.S. Bank, N.A., 334 11 P.3d 408, 411 (Nev. 2014)). The Court of Appeals has since ruled in accord. See Bourne Valley 12 Court Tr., 832 F.3d at 1159 (reasoning that NRS 116.31168’s incorporation of NRS 107.090(3)– 13 (4) would render NRS 116.31163 and 116.311635 superfluous). 14 CONCLUSION 15 IT IS HEREBY ORDERED that the Motion to Certify (ECF No. 139) is DENIED. 16 IT IS SO ORDERED. 17 DATED: 25th day of of May, 2017. Dated thisThis 24th dayApril, 2017. 18 19 _____________________________________ ROBERT C. JONES United States District Judge 20 21 22 23 24 3 of 3

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