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Apartments v. U.S. Bank National Association

United States District Court, D. Nevada

March 25, 2014

WASHOE-MILL APARTMENTS, Plaintiff,
v.
U.S. BANK NATIONAL ASSOCIATION, Defendant. U.S. BANK NATIONAL ASSOCIATION, Counterclaimant,
v.
WASHOE-MILL APARTMENTS; SECRETARY SHAUN DONOVAN, Counter-defendants.

ORDER

MIRANDA M. DU, District Judge.

I. SUMMARY

Before the Court is Plaintiff/Counter-defendant Washoe-Mill Apartments' ("WMA") Motion to Alter or Amend Judgment (dkt. no. 44), and U.S. Bank's Motion to Dismiss (dkt. no. 35), Motion to Be Relieved as Stakeholder (dkt. no. 37), and Motion for Attorneys' Fees and Costs (dkt. no. 38). For the reasons set forth below, WMA's Motion is denied, U.S. Bank's Motion to Dismiss is granted, and U.S. Bank's Motions to Be Relieved as Stakeholder and Motion for Attorneys' Fees and Costs are denied.

II. BACKGROUND

The parties agree on the majority of the facts in this case. WMA is a Nevada General Partnership comprised of eight partners. WMA entered into a partnership agreement in order to construct and operate a United States Department of Housing and Urban Development ("HUD") subsidized facility for seniors and disabled citizens, the Washoe-Mill Apartments. (Dkt. no. 1 ¶ 4.) In 1993, Bank of America Nevada ("BOAN") and the Washoe Housing Finance Corporation ("WHFC") entered into a Trust Indenture Agreement ("Agreement") regarding bonds used to refinance WMA's mortgage loans for the WMA facility. (Dkt. no. 21 at 3.) The Agreement was executed pursuant to HUD's tax-exempt bond financing program regulations. ( Id. ) Under the Agreement, BOAN was the trustee of the bond proceeds and was charged with making payment to bondholders. ( Id. at 4.) U.S. Bank is BOAN's successor in interest under the Agreement. ( Id. at 4; dkt. no. 1 ¶ 5.) HUD states that these bonds were tax-exempt, the mortgage was insured by HUD, and WMA received rental subsidies from HUD. ( See dkt. no. 21 at 3.)

The WMA facility was sold on January 21, 2011, and the payoff amount for the mortgage loan was remitted as full settlement of the mortgage. ( See id. at 3-4; dkt. no. 1 ¶ 6.) A year later, in January 2012, a trust officer for U.S. Bank informed WMA that it had conducted an audit that revealed the existence of $229, 160.81 remaining in the trust account. ( See dkt. no. 21 at 4.) U.S. Bank conducted an investigation to determine who the funds belonged to but was unable to reach a conclusion. ( See dkt. nos. 21 at 4; 1 ¶ 8.) U.S. Bank declares that it has no beneficial interest in the remaining balance. ( See dkt. no. 6 ¶ 20.)

WMA asserts a single claim for conversion. WMA asks that this Court grant it damages for the full amount remaining in the trust, as well as prejudgment and postjudgment interest and the cost of the suit.

On October 9, 2012, U.S. Bank answered the Complaint and brought a counterclaim for interpleader against WMA and HUD. (Dkt. no. 6.) On December 18, 2012, Counter-defendant HUD answered and set forth a prayer for relief asking for the full amount remaining in the trust and the cost of the suit. (Dkt. no. 15.) HUD moved for summary judgment on February 14, 2013. (Dkt. no. 21.) The Court issued its Order on September 30, 2013 ("Summary Judgment Order"). (Dkt. no. 43.) On October 14, 2013, WMA filed its Motion to Alter or Amend Judgment (dkt. no. 44).

U.S. Bank filed a Motion to Dismiss (dkt. no. 35), Motion to be Relieved as Stakeholder (dkt. no. 37), and Motion for Attorneys' Fees and Costs (dkt. no. 38). The Court has considered the briefing on these motions as well as the supplemental briefing in response to the Court's February 27, 2014, Minute Order (dkt. no. 50). (Dkt. nos. 39, 40, 41, 42, 51, 52.)

During the pendency of the case, U.S. Bank has deposited $229, 160.81 in interpleaded funds into the registry of the Court. (Dkt. no. 26.)

III. MOTION TO ALTER OR AMEND JUDGMENT

A. Legal Standard

Although not mentioned in the Federal Rules of Civil Procedure, motions for reconsideration may be brought under Rules 59(e) and 60(b). Sch. Dist. No. 1J, Multnomah Cnty., Or. v. ACandS, Inc., 5 F.3d 1255, 1262 (9th Cir. 1993). WMA brings its Motion to Alter or Amend exclusively under Rule 59(e), which provides that any motion to alter or amend a judgment shall be filed no later than 28 days after entry of the judgment. Fed.R.Civ.P. 59(e). The Ninth Circuit has held that a Rule 59(e) motion for reconsideration should not be granted "absent highly unusual circumstances, unless the district court is presented with newly discovered evidence, committed clear error, or if there is an intervening change in the controlling law." Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 880 (9th Cir. 2009) ( quoting 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999)).

A motion for reconsideration must set forth the following: (1) some valid reason why the court should revisit its prior order; and (2) facts or law of a "strongly convincing nature" in support of reversing the prior decision. Frasure v. United States, 256 F.Supp.2d 1180, 1183 (D. Nev. 2003). On the other hand, a motion for reconsideration is properly denied when the movant fails to establish any reason justifying relief. Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir. 1985) (holding that a district court properly denied a motion for reconsideration in which the plaintiff presented no arguments that were not already raised in his original motion). Motions for reconsideration are not "the proper vehicles for rehashing old arguments, " Resolution Trust Corp. v. Holmes, 846 ...


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