United States District Court, D. Nevada
(DEFS' MOTION FOR SUMMARY JUDGMENT - DKT. NO. 24; DEF'S MOTION TO DISMISS - DKT.
NO. 31; PLF'S MOTION TO AMEND - DKT. NO. 39; DEFS' OBJECTIONS OR MOTION FOR
DISTRICT JUDGE TO RECONSIDER SCHEDULING ORDER - DKT. NO. 49; DEFS' EMERGENCY
MOTION FOR HEARING - DKT. NO. 50)
MIRANDA M. DU, District Judge.
Before the Court are Defendants' Motion for Summary Judgment (dkt. no. 24) and Emergency Motion for Hearing regarding their Motion for Summary Judgment (dkt. no. 50). For the reasons set out below, consideration of these motions is reserved until the Court has had an opportunity to consider whether this action should be stayed.
Also before the Court are Defendant Ronnie Schwartz's Motion to Dismiss (dkt. no. 31), Plaintiff Wells Fargo Bank's Motion to Amend (dkt. no. 39) and Defendants' Objections or Motion for District Judge to Reconsider Scheduling Order (dkt. no. 49). For the reasons set out below, Ronnie Schwartz's Motion to Dismiss (dkt. no. 31) and Plaintiff Wells Fargo Bank's Motion to Amend (dkt. no. 39) are granted. Defendants' Objections or Motion for District Judge to Reconsider Scheduling Order (dkt. no. 49) are overruled and denied.
Plaintiff filed the Complaint on August 28, 2013, against Defendants Yoel Iny, individually and as trustee of the Y&T Iny Family Trust ("Iny Trust"), Yoel Iny's wife Tikva Iny, Noam Schwartz, individually and as trustee of the Noam Schwartz Trust ("Schwartz Trust"), Noam Schwartz's wife Rachel Elmalam, 613 Investments, LLC, Ronnie Schwartz, as trustee of the NS 1998 Family Trust, Rachel Schwartz, as trustee of the Leenoy Coreen Qualified Personal Retirement Trust, Triangle Trading Ltd., Haskel Iny, Nira Sayegh and doe defendants. (Dkt. no. 1.) The Complaint collectively refers to Yoel Iny, the Iny Trust, Noam Schwartz and the Schwartz Trust as "Guarantors". ( Id. at 2 ¶ 10.)
The Complaint alleges the following. On or about February 28, 2008, Plaintiff made a loan to borrower GAC Storage El Monte, LLC for $12, 650, 000 ("GAC Loan") and Guarantors executed and delivered a guaranty to Plaintiff jointly and severally guaranteeing GAC Storage El Monte, LLC's payment and performance ("GAC Guaranty"). ( Id. at 4.) On or about September 10, 2007, Plaintiff made a loan to borrower The Makena Great American Anza Company, LLC for $15, 150, 000 ("Makena Loan") and Guarantors executed and delivered a guaranty to Plaintiff jointly and severally guaranteeing The Makena Great American Anza Company, LLC's payment and performance ("Makena Guaranty"). ( Id. at 5.) The borrowers defaulted under both loans and, despite demand, the borrowers and the Guarantors did not, and have not, cured the defaults. ( Id. at 4-6.)
On June 19, 2012, Plaintiff brought an action against Guarantors in Arizona Superior Court for breach of the GAC Guaranty and Makena Guaranty ("Arizona Litigation"). ( Id. at 6.) In the instant action, Plaintiff does not seek enforcement of the guaranties or assert any deficiency claims against Guarantors. Instead, the Complaint asserts fraudulent transfer claims, alleging that Plaintiff has a right to payment under the GAC Guaranty and Makena Guaranty, and that Defendants were involved in the transfer of assets with the purpose of hindering, delaying or defrauding their creditors, including Plaintiff.
On May 9, 2013, Plaintiff completed non-judicial foreclosure sales of the GAC and Makena properties. ( See dkt. no. 24 at 3-4; dkt. no. 36 at 6.)
Defendants filed a Motion for Summary Judgment (dkt. no. 24) and an Emergency Motion for Hearing on the Motion for Summary Judgment (dkt. no. 50). Plaintiff filed oppositions to both motions (dkt. nos. 36 and 56) and Defendants replied (dkt. nos. 40 and 60). Defendant Ronnie Schwartz filed a Motion to Dismiss (dkt. no. 31), Plaintiff filed an opposition (dkt. no. 38) and Ronnie Schwartz filed a reply (dkt. no. 41). In response to Ronnie Schwartz's Motion to Dismiss, Plaintiff filed a Motion to Amend. (Dkt. no. 39.) Defendants filed an opposition to Plaintiff's Motion to Amend (dkt. no. 46) and Plaintiff filed a reply (dkt. no. 48). Lastly, Defendants filed Objections to a February 19, 2014, scheduling order entered by Magistrate Judge Nancy Koppe. (Dkt. no. 49.) Plaintiff filed an opposition to the objections (dkt. no. 55) and Defendants filed a reply (dkt. no. 65).
A. Defendants' Motion for Summary Judgment and Emergency Motion for Hearing
In their Motion for Summary Judgment, Defendants argue that Plaintiff does not have an enforceable debt against the Guarantors and therefore cannot maintain a fraudulent transfer action. Under the Uniform Fraudulent Transfer Act, a creditor may bring a fraudulent transfer claim, and a creditor is defined as one who holds a "claim" against a debtor. See Ariz. Rev. Stat. Ann. § 44-1001(4); NRS 112.150(4). A "claim" is defined as "a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured." See Ariz. Rev. Stat. Ann. § 44-1001(2); NRS 112.150(3). Defendants argue that, as a result of Plaintiff's actions pursuing non-judicial foreclosure and failing to preserve deficiency rights against the borrowers themselves, Plaintiff has destroyed Guarantors' rights of subrogation against the borrowers and consequently released Guarantors from liability under the GAC Guaranty and Makena Guaranty. ( See dkt. no. 24 at 7.)
The issue of whether the Guarantors' debt is legally enforceable is a matter that is already pending in the Arizona Litigation, where Plaintiff is suing to enforce the guaranties. Indeed, Defendants state in their Emergency Motion that the Arizona Litigation "involves the same issue regarding liability on the Guaranty Agreements." (Dkt. no. 50 at 3.) Plaintiff represents in its opposition to the Emergency Motion, that Plaintiff has filed the same Motion for Summary Judgment in the Arizona Litigation. (Dkt. no. 56 at 3.) The Arizona Litigation was initiated prior to the present action and Plaintiff's fraudulent transfer claims in the present action appear to be ancillary to the claims in the Arizona Litigation. The Arizona court's decision as to the enforceability of the GAC Guaranty and Makena Guaranty could potentially prove to be dispositive as to the fraudulent ...