US Bank National Association v. White Lake Ranch Association et al

Filing 69

ORDER - SFR's Counter Motion to Stay (ECF No. 61 ) is granted and U.S. Bank's Motion to Stay (ECF No. 58 ) is granted in part and denied in part. This action is temporarily stayed until resolution of the certiorari proceedings before the United States Supreme Court in Bourne Valley and/or Saticoy Bay. The pending Motion for Partial Summary Judgment (ECF No. 59 ) is denied without prejudice and may be refiled within 30 days after the stay is lifted. Signed by Judge Miranda M. Du on 4/10/2017. (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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USROF IV LEGAL TITLE TRUST 2015-1,
BY U.S. BANK NATIONAL ASSOCIATION,
AS LEGAL TITLE TRUSTEE,

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Plaintiff,
WHITE LAKE RANCH ASSOCIATION;
SFR INVESTMENTS POOL 1, LLC; DOE
INDIVIDUALS I-X, inclusive, and ROE
CORPORATIONS I-X, inclusive.,
Defendants.
SFR INVESTMENTS POOL 1, LLC,

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ORDER

v.

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Case No. 3:15-cv-00477-MMD-CWH

Counter-claimant,
v.
USROF IV LEGAL TITLE TRUST 2015-1,
BY U.S. BANK NATIONAL ASSOCIATION,
AS LEGAL TITLE TRUSTEE; BANK OF
AMERICA, N.A.; JOSE SALAZAR, an
individual; and ELVA SALAZAR, an
individual,
Counter-defendant/Cross-defendants.

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This case arises out of a homeowner’s association (“HOA”) foreclosure and

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involves a constitutional due process challenge to Nevada Revised Statute Chapter 116’s

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notice provisions. Before the Court are a Motion to Stay filed by Plaintiff/Counter-

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defendant U.S. Bank National Association (“U.S. Bank”) (ECF No. 58), and a Counter

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Motion to Stay filed by Defendant/Counter-claimant SFR Investment Pool 1, LLC (“SFR”)

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(ECF No. 61). The Court has also reviewed the parties’ respective responses and replies.

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(ECF Nos. 60, 62, 63.) U.S. Bank asks the Court to stay all proceedings except for

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dispositive motions based on the Ninth Circuit’s ruling in Bourne Valley Court Trust v.

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Wells Fargo Bank, NA, 832 F.3d 1154 (9th Cir. 2016), r’hng denied (9th Cir. Nov. 4, 2016).

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SFR argues that the Court should either stay all proceedings or let the case proceed

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unrestricted. For the reasons below the Court agrees with SFR and finds that a complete

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stay of the case, at least until the Supreme Court addresses the pending certiorari

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petitions, is prudent.

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The Court had sua sponte imposed a temporary stay because of the potential

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impact of the Ninth Circuit Court of Appeals’ decision in Bourne Valley, where the court

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found that Chapter 116’s notice provisions as applied to a nonjudicial foreclosure of an

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HOA lien before the 2015 amendment were facially unconstitutional. 832 F.3d at 1157-

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60. The Court subsequently lifted the stay after the Ninth Circuit issued the mandate in

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Bourne Valley. (ECF No. 57.) The Court reasoned that Bourne Valley’s holding is binding

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precedent unless and until it is reversed, though such finality may not occur for months.

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(Id.) Within days, the Nevada Supreme Court in Saticoy Bay LLC Series 350 Durango

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104 v. Wells Fargo Home Mortgage, a Division of Wells Fargo Bank, N.A., 388 P.3d 970

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(Nev. 2017), reached the opposite conclusion, finding that Nevada’s superpriority lien

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statutes are not facially unconstitutional. The nonprevailing parties in Bourne Valley and

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Satico Bay are seeking review of both decisions in the United States Supreme Court. In

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light of this latest development, the Court finds that a stay is warranted and will grant

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SFR’s Motion.

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A district court has discretionary power to stay proceedings in its own court. Landis

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v. N. Am. Co., 299 U.S. 248, 254-55 (1936); see also Lockyer v. Mirant Corp., 398 F.3d

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1098, 1109 (9th Cir. 2005). “A trial court may, with propriety, find it is efficient for its own

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docket and the fairest course for the parties to enter a stay of an action before it, pending

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resolution of independent proceedings which bear upon the case.” Leyva v. Certified

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Grocers of Cal., Ltd., 593 F.2d 857, 863 (9th Cir. 1979). “When considering a motion to
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stay, the district court should consider three factors: (1) potential prejudice to the non-

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moving party; (2) hardship and inequity to the moving party if the action is not stayed; and

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(3) the judicial resources that would be saved by avoiding duplicative litigation if the cases

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are in fact consolidated.” Pate v. Depuy Orthopaedics, Inc., No. 2:12-cv-01168-MMD-

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CWH, 2012 WL 3532780, at *2 (D. Nev. Aug. 14, 2012) (quoting Rivers v. Walt Disney

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Co., 980 F. Supp. 1358, 1360 (C.D. Cal. 1997)) (internal quotation marks omitted). See

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also Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059, 1067 (9th Cir.

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2007).

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These three factors weigh in favor of a temporary stay in this case, though the

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duration of the stay may be extended depending on whether the Supreme Court will grant

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Bourne Valley and Well Fargo’s petitions for a writ of certiorari. U.S. Bank insists that a

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stay will be prejudicial because of the continued damages to U.S. Bank caused by SFR’s

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assertion of title to the property at issue. (ECF No. 62 at 7.) However, any damage to U.S.

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Bank from a stay will be outweighed by the fees that all parties will surely incur from

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continued litigation because a decision by the Court could be rendered moot by a decision

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in the certiorari proceedings before the Supreme Court. Until there is finality on the issue

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of whether Nevada’s superpriority lien statutes are constitutional, a stay will benefit the

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parties and conserve judicial resources.

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(ECF No. 58)
It is therefore ordered that SFR’s Counter Motion to Stay (ECF No. 61) is granted

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and U.S. Bank’s Motion to Stay (ECF No. 58) is granted in part and denied in part. This

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action is temporarily stayed until resolution of the certiorari proceedings before the United

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States Supreme Court in Bourne Valley and/or Saticoy Bay. The parties must file a status

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report within fifteen (15) days from such resolution. The pending Motion for Partial

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Summary Judgment (ECF No. 59) is denied without prejudice and may be refiled within

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thirty (30) days after the stay is lifted.

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DATED THIS 10th day of April 2017.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE
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