Sexton v. Ndex W., LLC, No. 11–17432.

CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)
Writing for the CourtIKUTA
Citation713 F.3d 533
PartiesScott D. SEXTON; Sonia L. Sexton, Plaintiffs–Appellants, v. NDEX WEST, LLC; OneWest Bank, FSB; Stewart Title Guaranty Company, Defendants–Appellees.
Docket NumberNo. 11–17432.
Decision Date12 April 2013

713 F.3d 533

Scott D. SEXTON; Sonia L. Sexton, Plaintiffs–Appellants,
v.
NDEX WEST, LLC; OneWest Bank, FSB; Stewart Title Guaranty Company, Defendants–Appellees.

No. 11–17432.

United States Court of Appeals,
Ninth Circuit.

Submitted March 12, 2013.*
Filed April 12, 2013.


[713 F.3d 534]


Terry J. Thomas, Reno, NV, for Plaintiffs–Appellants.

Michael R. Brooks, Brooks Bauer LLP, Las Vegas, NV, for Defendants–Appellees NDEX West, LLC and OneWest Bank, FSB.


Douglas D. Gerrard, Gerrard Cox Larsen, Henderson, NV, for Defendant–Appellee Stewart Title Guaranty Company.

Appeal from the United States District Court for the District of Nevada,

[713 F.3d 535]

Larry R. Hicks, District Judge, Presiding. D.C. No. 3:11–cv–00440–LRH–VPC.
Before: J. CLIFFORD WALLACE, M. MARGARET McKEOWN, and SANDRA S. IKUTA, Circuit Judges.


OPINION

IKUTA, Circuit Judge:

Scott and Sonia Sexton appeal from the district court's summary judgment in favor of NDEX West, LLC, OneWest Bank, FSB, and Stewart Title Guaranty Company in an action alleging wrongful foreclosure and related claims that the defendants had removed to federal court. The Sextons argue that under the “prior exclusive jurisdiction” doctrine, see Chapman v. Deutsche Bank Nat'l Trust Co., 651 F.3d 1039, 1043 (9th Cir.2011), or under the Colorado River abstention doctrine, see Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 818, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976), the district court should have remanded sua sponte. Because neither doctrine applies here, we affirm.

I

Scott and Sonia Sexton bought a home in Reno, Nevada, in April 2007, and financed the purchase with a loan of $752,000 from IndyMac Bank, secured by a deed of trust on the home. The original deed of trust identified IndyMac Bank as the lender, Stewart Title as the trustee, and Mortgage Electronic Registration Systems (MERS) as the beneficiary, serving solely as nominee for IndyMac. In August 2010, after the Sextons had fallen behind in their loan payments, an agent for the trustee sent the Sextons a notice of breach and election to sell the house under the deed of trust, pursuant to Nevada's statutory provisions governing non-judicial foreclosure proceedings. SeeNev.Rev.Stat. § 107.080.

After mediation to avoid foreclosure failed, the Sextons filed a complaint in Nevada state court against various parties associated with the loan and deed of trust.1 In their complaint, the Sextons alleged wrongful foreclosure, debt collection violations, unfair lending practices, unfair and deceptive trade practices, violation of the covenant of good faith and fair dealing, fraud in the inducement, slander of title, and abuse of process. They sought to quiet title and requested other forms of equitable relief under Nevada law. Along with their lawsuit, they filed a notice of lis pendens to halt the foreclosure process.

The defendants removed the action to federal court on diversity grounds under 28 U.S.C. § 1441.2 The Sextons did not contest that the requirements for diversity jurisdiction were satisfied. The defendants moved to dismiss the Sextons' action for failure to state a claim, and NDEX West and OneWest also moved to expunge the Sextons' lis pendens so that they could proceed with foreclosure. The district court granted NDEX West, OneWest Bank, and Stewart Title's motions to dismiss, which the Sextons timely appealed. 3

[713 F.3d 536]

We have jurisdiction under 28 U.S.C. § 1291. We review determinations regarding federal subject-matter jurisdiction de novo, and factual findings underlying those determinations for clear error. See Robinson v. United States, 586 F.3d 683, 685 (9th Cir.2009).

II

On appeal, the Sextons argue that the district court should have remanded the action sua sponte to state court under two different prudential rules directing federal courts to abstain from adjudicating actions involving property that is the subject of concurrent state proceedings: (1) the prior exclusive jurisdiction doctrine, and (2) the Colorado River abstention doctrine. We consider each in turn.

A

Under the Supreme Court's long-standing prior exclusive jurisdiction doctrine, if a state or federal court “ ‘has taken possession of property, or by its procedure has obtained jurisdiction over the same,’ ” then the property under that court's jurisdiction “ ‘is withdrawn from the jurisdiction of the courts of the other authority as effectually as if the property had been entirely removed to the territory of another sovereign.’ ” State Engineer v. S. Fork Band of Te–Moak Tribe of W. Shoshone Indians, 339 F.3d 804, 809 (9th Cir.2003) (emphasis omitted) (quoting Palmer v. Texas, 212 U.S. 118, 125, 29 S.Ct. 230, 53 L.Ed. 435 (1909)). That is, when “one court is exercising in rem jurisdiction over a res, a second court will not assume in rem jurisdiction over the same res. Chapman, 651 F.3d at 1043 (internal quotation marks omitted).4 As we have explained, “[t]he purpose of the rule is the maintenance of comity between courts; such harmony is especially compromised by state and federal judicial systems attempting to assert concurrent control over the res upon which jurisdiction of each depends.” United States v. One 1985 Cadillac Seville, 866 F.2d 1142, 1145 (9th Cir.1989) (citing Penn Gen. Cas. Co. v. Pennsylvania ex rel. Schnader, 294 U.S. 189, 195, 55 S.Ct. 386, 79 L.Ed. 850 (1935)).5

Relying on this doctrine, the Sextons claim that because they filed a complaint in state court...

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41 practice notes
  • Tucker v. Specialized Loan Servicing, LLC, Case No. PWG–14–813.
    • United States
    • U.S. District Court — District of Maryland
    • 3 Febrero 2015
    ...Loan & Trust Co. v. Lake Street Elevated R.R., 177 U.S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667 (1900) ; see also Sexton v. NDEX West, LLC, 713 F.3d 533, 537 (9th Cir.2013) (“The doctrine of prior exclusive jurisdiction applies to a federal court's jurisdiction over property only if a state cour......
  • Hanover Ins. Co. v. Fremont Bank, No. C–14–01519 DMR
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 22 Septiembre 2014
    ...both a ‘rule of comity’ and as a rule of subject-matter jurisdiction, the doctrine is judge-made, not statutory.” Sexton v. NDEX W., LLC, 713 F.3d 533, 536 n. 5 (9th Cir.2013). “Because the Supreme Court has recently ‘clarified that court-promulgated rules are not jurisdictional’ and ‘[o]nl......
  • Flam v. Flam, CASE NO. 1:12-CV-1052 AWI DLB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • 3 Marzo 2016
    ...jurisdiction over that same property and retains that jurisdiction in a separate, concurrent proceeding." Sexton v. NDEX W., LLC, 713 F.3d 533, 537 (9th Cir. 2013). That is, the doctrine of prior exclusive jurisdiction provides that when one court is exercising in rem or quasi in rem jurisd......
  • Goncalves v. Rady Children's Hosp. San Diego, No. 15-55010
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 2 Agosto 2017
    ...(alteration in original) (quoting Cal. Prob. Code § 3500(b) )). The court had not "taken possession of property," Sexton v. NDEX W., LLC , 713 F.3d 533, 536 (9th Cir. 2013), nor did it have "custody," Marshall , 547 U.S. at 312, 126 S.Ct. 1735, over the potential settlement money. In fact, ......
  • Request a trial to view additional results
41 cases
  • Tucker v. Specialized Loan Servicing, LLC, Case No. PWG–14–813.
    • United States
    • U.S. District Court — District of Maryland
    • 3 Febrero 2015
    ...Loan & Trust Co. v. Lake Street Elevated R.R., 177 U.S. 51, 61, 20 S.Ct. 564, 44 L.Ed. 667 (1900) ; see also Sexton v. NDEX West, LLC, 713 F.3d 533, 537 (9th Cir.2013) (“The doctrine of prior exclusive jurisdiction applies to a federal court's jurisdiction over property only if a state cour......
  • Hanover Ins. Co. v. Fremont Bank, No. C–14–01519 DMR
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • 22 Septiembre 2014
    ...both a ‘rule of comity’ and as a rule of subject-matter jurisdiction, the doctrine is judge-made, not statutory.” Sexton v. NDEX W., LLC, 713 F.3d 533, 536 n. 5 (9th Cir.2013). “Because the Supreme Court has recently ‘clarified that court-promulgated rules are not jurisdictional’ and ‘[o]nl......
  • Flam v. Flam, CASE NO. 1:12-CV-1052 AWI DLB
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • 3 Marzo 2016
    ...jurisdiction over that same property and retains that jurisdiction in a separate, concurrent proceeding." Sexton v. NDEX W., LLC, 713 F.3d 533, 537 (9th Cir. 2013). That is, the doctrine of prior exclusive jurisdiction provides that when one court is exercising in rem or quasi in rem jurisd......
  • Goncalves v. Rady Children's Hosp. San Diego, No. 15-55010
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 2 Agosto 2017
    ...(alteration in original) (quoting Cal. Prob. Code § 3500(b) )). The court had not "taken possession of property," Sexton v. NDEX W., LLC , 713 F.3d 533, 536 (9th Cir. 2013), nor did it have "custody," Marshall , 547 U.S. at 312, 126 S.Ct. 1735, over the potential settlement money. In fact, ......
  • Request a trial to view additional results

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