Bank of America, N.A. v. Aliante Master Association
2:16-cv-00962
D. Nev.Dec 22, 2017Background
- BANA (plaintiff) challenges an HOA foreclosure affecting its mortgage; dispute centers on whether HOA complied with Nevada foreclosure notice requirements under NRS Chapter 116.
- Defendant Saticoy Bay moved to stay the federal case pending resolution by the Nevada Supreme Court of whether NRS § 116.31168 incorporates the notice provisions of NRS § 107.090 (Nev. S. Ct. Case No. 72931).
- Two competing notice schemes: Chapter 116’s opt‑in system (lender must request notice) and NRS 107.090’s opt‑out/systemic notice (HOA/notices to lenders as a matter of course).
- Ninth Circuit in Bourne Valley found the opt‑in requirement facially unconstitutional as it shifted the burden to lenders; it also held that § 107.090 was not incorporated into § 116.31168 (raising circuit/state law tension).
- If Nevada Supreme Court holds § 107.090 is incorporated, a factual inquiry will follow whether the HOA actually provided the notice required by § 107.090; that factual issue exists in this case.
- District court found a stay appropriate to conserve judicial resources and avoid duplicative litigation pending the Nevada Supreme Court’s decision; denied the pending motion without prejudice to refiling after resolution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay the federal action pending Nevada Supreme Court decision | Stay is unnecessary because incorporation of § 107.090 wouldn’t save the statute — § 107.090 is constitutionally deficient | Stay appropriate because state court decision could resolve controlling legal question and narrow/focus federal issues | Granted stay pending resolution of certified question in Nev. S. Ct. Case No. 72931 |
| Whether NRS § 116.31168 incorporates NRS § 107.090 (controlling legal question) | Even if incorporated, § 107.090 fails to provide constitutionally adequate notice (not required to state steps to protect mortgagee) | Incorporation would change applicable notice regime and may render some foreclosures constitutionally adequate | Not decided on merits; stayed so Nevada Supreme Court can resolve the certified question |
| Whether continued litigation would waste judicial resources | BANA argues prejudice from delay (economic harms) outweighs stay benefits | Saticoy Bay argues decision could moot or materially affect federal case, saving resources | Court finds stay saves judicial resources and outweighs plaintiff’s asserted economic prejudice |
| Whether factual dispute exists about actual notice to mortgagee | BANA points to payments/tender efforts as evidence of actual notice | Saticoy Bay disputes and notes legal significance depends on whether § 107.090 applies | Court notes factual dispute exists but defers resolution until state law question is decided |
Key Cases Cited
- Landis v. North American Co., 299 U.S. 248 (1936) (district courts have inherent discretion to stay cases pending resolution of related proceedings)
- Leyva v. Certified Grocers of California, Ltd., 593 F.2d 857 (9th Cir. 1979) (stays may be appropriate to promote docket efficiency and fairness)
- Lockyer v. Mirant Corp., 398 F.3d 1098 (9th Cir. 2005) (factors for evaluating a stay include hardship, prejudice, and judicial economy)
- Bourne Valley Court Tr. v. Wells Fargo Bank, N.A., 832 F.3d 1154 (9th Cir. 2016) (held opt‑in notice scheme facially unconstitutional and discussed nonincorporation of § 107.090 into § 116.31168)
- Clinton v. Jones, 520 U.S. 681 (1997) (caution against premature adjudication of constitutional questions)
- Nationstar Mortg., LLC v. Saticoy Bay LLC Series 227 Shadow Canyon, 405 P.3d 641 (Nev. 2017) (Nevada Supreme Court discussion suggesting possible incorporation of § 107.090)