Branch Banking & Trust Co. v. Eloy Bus. Park, LLC

• Decision Date: 22 June 2015
• Docket Number: No. 2:12–cv–01679–LRH–PAL.,2:12–cv–01679–LRH–PAL.
• Citation: 112 F.Supp.3d 1129
• Parties: BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff, v. ELOY BUSINESS PARK, LLC, a Nevada limited liability company, Yoel Iny; Noam Schwartz; Yoel Iny, Trustee of the Y & T Iny Family Trust dated June 8, 1994; Noam Schwartz, Trustee of the Noam Schwartz Trust dated August 19, 1999; D.M.S.I., LLC, a Nevada limited liability company; and Does 1 through 10, inclusive, Defendants.
• Court: U.S. District Court — District of Nevada

112 F.Supp.3d 1129

BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff,
v.
ELOY BUSINESS PARK, LLC, a Nevada limited liability company, Yoel Iny; Noam Schwartz; Yoel Iny, Trustee of the Y & T Iny Family Trust dated June 8, 1994; Noam Schwartz, Trustee of the Noam Schwartz Trust dated August 19, 1999; D.M.S.I., LLC, a Nevada limited liability company; and Does 1 through 10, inclusive, Defendants.

No. 2:12–cv–01679–LRH–PAL.

United States District Court, D. Nevada.

Signed June 22, 2015.
Filed June 23, 2015.

112 F.Supp.3d 1131

Brian G. Anderson, Nicole E. LovelockJeremy J. Nork, Holland & Hart, L.L.P., Las Vegas, NV, Reno, NV, for Plaintiff.

E. Daniel Kidd, Kolesar & Leatham, Chtd., Las Vegas, NV, for Defendants.

ORDER

LARRY R. HICKS, District Judge.

Before the Court is Plaintiff Branch Banking and Trust Company's ("Branch Banking") Motion for Summary Judgment as to Liability and Application for Deficiency Judgment Hearing. Doc. # 53.¹ Defendants Eloy Business Park, LLC; Yoel Iny; Noam Schwartz; Yoel Iny, trustee of the Y & T Family Trust dated June 8, 1994; Noam Schwartz, trustee of the

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Noam Schwartz Trust dated August 19, 1999; and D.M.S.I., LLC (collectively "Defendants") filed a Response (Doc. # 59), to which Branch Banking replied (Doc. # 69).

Also before the Court is Defendants' Motion for Summary Judgment. Doc. # 52. Branch Banking filed a Response (Doc. # 60), to which Defendants replied (Doc. # 67). Defendants also filed a Motion to Certify Questions of Law to the Nevada Supreme Court. Doc. # 71. Branch Banking filed a Response (Doc. # 75), to which Defendants replied (Doc. # 76).

I. Facts and Background

This action arises out of Defendants' alleged breach of a secured loan agreement. Following a judicial foreclosure sale on the real property securing the loan, Branch Banking filed the present action to obtain a deficiency judgment against Defendants. Doc. # 1. The undisputed facts are as follows. On September 20, 2007, Borrower Eloy Business Park, LLC ("Borrower") executed and delivered a Promissory Note Secured by Deed of Trust to Colonial Bank, N.A. ("Colonial Bank"), in the original amount of $6,300,000.00 (the "Note"). Doc. # 52, Ex. 1; Doc. # 53, Ex. 2. The Note was secured by a Deed of Trust and Security Agreement with Assignment of Rents and Fixture Filing ("Deed of Trust"), dated September 20, 2007, encumbering certain real property in Pinal County, Arizona (the "Property").² Doc. # 52, Ex. 2; Doc. # 53, Ex. 3. Also on September 20, 2007, Defendant Yoel Iny ("Guarantor") executed and delivered to Colonial Bank a Guarantee (the "Guarantee"). Doc. # 52, Ex. 3. Pursuant to the Guarantee, the Guarantor guaranteed the payment of all indebtedness of the Borrower under the loan evidenced by the Note (the "Loan"). Id.

On August 14, 2009, Colonial Bank was closed by the State Banking Department of the State of Alabama and the Federal Deposit Insurance Corporation ("FDIC") was named receiver in order to liquidate and distribute the assets of Colonial Bank. Doc. # 52, Ex. 4; Doc. # 53, Ex. 5. On September 28, 2011, the FDIC executed an Assignment of Security Instruments, Notes and Other Loan Documents (the "Assignment"), to be deemed effective as of August 14, 2009. Id. Pursuant to the terms of the Assignment, the FDIC assigned all rights, title, and interest in the Note, the Deed of Trust, and the Guarantee to Branch Banking. Id. The Assignment was recorded in Pinal County, Arizona on November 4, 2011. Id.

Branch Banking alleges that the Borrower failed to pay the outstanding principal balance of the loan due under the Note on September 24, 2009.³ Doc. # 53 at 5. By demand letter dated June 16, 2011 (the "Demand Letter"), Branch Banking indicated its intent to take steps to exercise its rights and remedies under the Loan on or after July 8, 2011. Doc. # 53, Ex. 7. Branch Banking alleges that the Borrower and the Guarantors failed and refused to pay the balance due under the Note. Doc. # 1, ¶ 27. On December 16, 2011, Branch Banking commenced a judicial foreclosure action under the Deed of Trust by filing a Verified Complaint in the Superior Court of the County of Maricopa, Arizona. Doc.

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# 52, Ex. 5. A Default Judgment ordering the judicial foreclosure of the Property in full or partial satisfaction of the outstanding balance due under the Loan via Sheriff's sale was entered by the Superior Court of the County of Pinal, Arizona, on March 19, 2012. Doc. # 52, Ex. 7; Doc. # 50, Ex. 8. The Sheriff of Pinal County, Arizona, sold the Property on July 19, 2012, at public auction for a cash bid of $480,000.00 in partial satisfaction of the Loan. Doc. # 52, Ex. 8; Doc. # 53, Ex. 9.

On September 24, 2012, Branch Banking filed a Complaint before this Court, alleging claims for deficiency, breach of guarantee, and breach of the covenant of good faith and fair dealing. Doc. # 1. Branch Banking claims that there is an unpaid principal balance of $3,472,779.60 as of July 19, 2012. See id. at ¶ 28.

II. Legal Standard

A. Summary Judgment

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir.2001).

The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986) ; see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D.Cal.2001). On an issue as to which the non-moving party has the burden of proof, however, the moving party can prevail merely by demonstrating that there is an absence of evidence to support an essential element of the non-moving party's case. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.

To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir.2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir.1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See id. at 252, 106 S.Ct. 2505. Finally, whereas here, both sides have moved for summary judgment, the court must consider evidence submitted in support of both motions before ruling on either motion. See Fair Housing Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir.2001).

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B. Certification to Nevada Supreme Court

Pursuant to Nevada Rule of Appellate Procedure ("NRAP") 5 :

The [Nevada] Supreme Court may answer questions of law certified to it by ... a United States District Court ... when requested by the certifying court, if there are involved in any proceeding before th[at] court[ ] questions of law of this state which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court of this state.

III. Cross Motions for Summary Judgment

Branch Banking contends that this is a straightforward breach of contract case, in which the Borrower and the Guarantors failed to repay their loan obligations under the Note and the Guarantee, thereby entitling Branch Banking to summary judgment as to liability against Defendants. The Court agrees. In a breach of contract action, Nevada law requires that the plaintiff establish (1) the existence of a valid contract, (2)...