Court Opinion

ID: 4467149
Source: CourtListenerOpinion
Date Created: 2019-12-23 21:00:24.178354+00
Date Added: 2024-06-11T14:34:24.809508
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       DEC 23 2019
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

THE BANK OF NEW YORK MELLON,                    No.    18-15551
FKA The Bank of New York, as Successor
to JPMorgan Chase Bank, N.A. as Trustee         D.C. No.
for the Holders of the MLMI Surf Trust,         2:16-cv-02571-JCM-CWH
Mortgage Loan Asset-Backed Certificates,
Series 2005-AB1,
                                                MEMORANDUM*
                Plaintiff-Appellee,

 v.

7321 WANDERING STREET TRUST,

                Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Nevada
                    James C. Mahan, District Judge, Presiding

                     Argued and Submitted December 9, 2019
                              Pasadena, California

Before: BEA, COLLINS, and BRESS, Circuit Judges.

      Appellant 7321 Wandering Street Trust (Wandering Street) appeals the

district court’s grant of summary judgment in favor of the Bank of New York Mellon

(BNYM) on BNYM’s claim for quiet title, following a homeowner association

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
(HOA) foreclosure sale on a residential property to which BNYM held a first deed

of trust. We have jurisdiction under 28 U.S.C. § 1291 and now reverse.

      On July 6, 2015, BNYM filed an earlier initial lawsuit against Wandering

Street and the Elkhorn Community Association (Elkhorn), the HOA, in the United

States District Court for the District of Nevada. In that earlier lawsuit, filed in federal

court based upon diversity of citizenship, see 28 U.S.C. § 1332, BNYM raised the

same claims that it raises here, concerning the same property. When Wandering

Street and Elkhorn moved to dismiss the earlier lawsuit, BNYM obtained two

extensions of time within which to file a response, but ultimately failed to respond.

      Invoking District of Nevada Local Rule 7-2(d), the district court on February

18, 2016 granted the defendants’ motion to dismiss. The court’s order provided:

             Local Rule 7-2(d) states that “[t]he failure of an opposing
             party to file points and authorities in response to any
             motion shall constitute a consent to the granting of the
             motion.” Because plaintiff has not opposed the motion to
             dismiss, it has consented to the granting of the motion.
             IT IS HEREBY ORDERED that the motion to dismiss
             (Dkt. #19) is GRANTED and this case is DISMISSED.

The court’s judgment likewise stated: “This action came to trial or hearing before

the Court. The issues have been tried or heard and a decision has been rendered.”1

1
  We grant Wandering Street’s motion for judicial notice of materials from the prior
judicial proceeding that were submitted to the district court below. See Bennett v.
Medtronic, Inc., 285 F.3d 801, 803 n.2 (9th Cir. 2002).

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      BNYM did not seek relief from the dismissal in the district court, nor did it

appeal the dismissal to us. Instead, it filed a second lawsuit in the same district court

(this time assigned to a different district judge), raising the same claims against

Wandering Street and Elkhorn as BNYM’s first suit. Wandering Street moved to

dismiss, arguing that the previous dismissal of BNYM’s first suit barred this second

one. The district court disagreed and granted summary judgment to BNYM, setting

aside the HOA’s foreclosure sale.

      On appeal, Wandering Street argues that this suit is barred by the prior

dismissal. We agree. Federal Rule of Civil Procedure 41(b) creates a default rule

for dismissals in federal court: unless it is voluntary under Rule 41(a), falls under an

exception specified in Rule 41(b), or “states otherwise,” a dismissal order “operates

as an adjudication on the merits.” “[T]he effect of the ‘adjudication upon the merits’

default provision of Rule 41(b) … is simply that” it “bar[s] refiling of the same claim

in the [same court].” Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 506

(2001); see also Headwaters Inc. v. U.S. Forest Serv., 399 F.3d 1047, 1052 n.4 (9th

Cir. 2005); 9 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure

§ 2373 (3d ed. 2008).

      Rule 41(b) thus bars the instant action: BNYM’s earlier suit involved the same

claims in the same district court, its dismissal was not voluntary under Rule 41(a),

and none of the exceptions in Rule 41(b) apply. The order of dismissal in BNYM’s

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first case quoted District of Nevada Local Rule 7-2(d), which provided that failing

to respond to a motion “constitute[s] a consent to the granting of the motion,” and

on that basis granted the defendants’ motion to dismiss. That order, if anything,

confirmed that the dismissal was an adjudication on the merits. At the very least, it

did not “state[] otherwise.” Fed. R. Civ. P. 41(b).

      BNYM’s suit is also independently barred under the doctrine of claim

preclusion. Absent a conflict with federal interests, of which there is no suggestion

here, the claim-preclusive effect of a judgment entered by a federal court sitting in

diversity is evaluated under “the law that would be applied by state courts in the

State in which the federal diversity court sits.” Semtek, 531 U.S. at 508. Under

Nevada law, claim preclusion applies when “(1) the same parties or their privies are

involved in both cases, (2) a valid final judgment has been entered, and (3) the

subsequent action is based on the same claims or any part of them that were or could

have been brought in the first case.” Five Star Capital Corp. v. Ruby, 194 P.3d 709,

714 (Nev. 2008) (en banc); see also Weddell v. Sharp, 350 P.3d 80 (Nev. 2015) (en

banc) (modifying this test on grounds not relevant here).

      In this case, there is no dispute that the parties and claims are the same in both

actions. The only question is whether the dismissal in the first case qualifies as a

“final judgment” for purposes of claim preclusion. Under Nevada law, it does. In

Five Star, the plaintiff’s first lawsuit was dismissed when counsel failed to appear

                                          4
for calendar call and the defendant moved to dismiss. 194 P.3d at 710. The plaintiff

then filed a second suit alleging similar claims and involving the same parties. Id.

The Nevada Supreme Court held that claim preclusion barred the second suit. Id. at

715–16. Under Nevada law, a dismissal for failure to follow court rules was an

“adjudication upon the merits,” “even though the substantive issues have not been

tried.” Id. at 715 (quotations omitted). That result accorded with “the policy reasons

behind claim preclusion,” because if the second suit were allowed, “a party could

fail to attend a mandatory calendar call, have its suit dismissed, and then easily avoid

the consequences by merely filing a second suit.” Id. at 715–16. Therefore, the

dismissal of BNYM’s first suit barred the instant suit under Nevada’s doctrine of

claim preclusion. See Uranga v. Montroy Supply Co., 281 P.3d 1227 (Table), 2009

WL 1440762, at *1–2 & *1 n.1 (Nev. Jan. 9, 2009) (applying claim preclusion where

prior claims were dismissed based on Nevada state court rule providing that failure

to file an opposition to a motion to dismiss is “‘a consent to granting the same’”)

(quoting Nev. Dist. Ct. R. 13(3)).

      For the foregoing reasons, the judgment of the district court is therefore

REVERSED, and the case is REMANDED with instructions to dismiss.

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