Bank of America, N.A. v. The Villas Community Association, 2:16-cv-00516

Bank of America sued following an HOA nonjudicial foreclosure sale after a prior owner failed to pay assessments; central dispute is whether that HOA sale extinguished the deed of trust.
The case arises against the backdrop of Bourne Valley Court Trust v. Wells Fargo Bank, a divided Ninth Circuit panel decision holding that Nevada’s Chapter 116 foreclosure scheme (pre-2015 amendments) facially violated mortgage lenders’ due process rights.
The district judge expressed disagreement with Bourne Valley, citing the Nevada Supreme Court’s construction in SFR Investments Pool 1, LLC v. U.S. Bank, NA that Chapter 116 requires notice to mortgage lenders and Nevada rules favoring constructions that preserve constitutionality.
Because Bourne Valley could be dispositive of many issues (including whether HOA sales extinguish deeds of trust), the court found potential for duplicative briefing and inconsistent rulings across pending cases in this district.
The court denied the pending motion to dismiss without prejudice and sua sponte administratively stayed the case pending issuance of the Ninth Circuit’s mandate in Bourne Valley, while allowing limited service-related efforts by cross-claimant SFR to continue.
The stay was justified under Landis factors: potential simplification of issues, minimal prejudice from delay, and avoidance of unnecessary briefing if Bourne Valley’s mandate changes precedent.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Chapter 116 is facially unconstitutional as applied to HOA nonjudicial foreclosures	Bank argues the HOA sale did not extinguish its deed of trust if the statutory scheme deprived mortgagees of due process	HOA (and purchaser) rely on Chapter 116 procedures and prior state-court interpretations to validate HOA sales	Court did not decide constitutionality; stayed the case pending Ninth Circuit mandate in Bourne Valley to await controlling appellate guidance
Whether the HOA foreclosure sale extinguished the deed of trust	Bank asserts the sale was void or ineffective and thus deed of trust survives	HOA/purchaser contend the sale validly extinguished the deed under Chapter 116	Court held resolution may depend on Bourne Valley and therefore paused adjudication
Whether to adjudicate now or stay pending Ninth Circuit action	Bank seeks adjudication but recognizes controlling appellate law issue	HOA/purchaser opposed delay but would be affected by precedent	Court found a Landis stay appropriate to promote efficiency and uniformity; administratively stayed the case pending mandate
Disposition of pending motion to dismiss (ECF No. 20)	Bank opposed dismissal	Movant sought dismissal	Court denied the motion without prejudice (permitting refile/motion after stay lifted)

SFR Investments Pool 1, LLC v. U.S. Bank, N.A., 334 P.3d 408 (Nev. 2014) (Nevada Supreme Court construed Chapter 116 to require notice to mortgagees)
Landis v. North American Co., 299 U.S. 248 (1936) (district courts have inherent power to stay proceedings to control docket and promote efficiency)
Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) (factors for staying a case pending resolution of another matter)
Dependable Highway Exp., Inc. v. Navigators Ins. Co., 498 F.3d 1059 (9th Cir. 2007) (district courts’ power to stay cases to manage docket)
California Teachers Ass’n v. State Bd. of Educ., 271 F.3d 1141 (9th Cir. 2001) (federal courts must follow state supreme court’s authoritative construction of state law)
State v. Castaneda, 245 P.3d 550 (Nev. 2010) (Nevada presumption favoring interpretations that preserve statutes’ constitutionality)