United States District Court, D. Nevada
ROBERT C. JONES, District Judge.
This case arises out of the default of a commercial loan. Pending before the Court are Plaintiff's Motion for Summary Judgment and Hearing (ECF Nos. 78, 79), Defendant's Motion for Summary Judgment (ECF No. 80), and Defendant's Motion to Certify Questions to the Nevada Supreme Court (ECF No. 107). For the reasons given herein, the Court grants the Motion for Summary Judgment and Hearing (ECF Nos. 78, 79), denies the Motion for Summary Judgment (ECF No. 80), and denies the Motion to Certify Questions to the Nevada Supreme Court (ECF No. 107).
I. FACTS AND PROCEDURAL HISTORY
On September 7, 2005, non-party Colonial Bank, N.A. gave Defendant Regena Homes, LLC a $3, 377, 000 loan in exchange for a promissory note in that amount (the "Note") and secured by a deed of trust (the "DOT") against certain real property in Clark County Nevada (the "Property"). ( See First Am. Compl. ¶¶ 15-16, June 8, 2012, ECF No. 6). The Note was further secured by a guaranty (the "Guaranty"), signed by Defendants Yoel Iny (both in his individual capacity and as trustee for Defendant Y&T Iny Family Trust), Noam Schwartz (both in his individual capacity and as trustee for Defendant Noam Schwartz Trust), D.M.S.I., LLC, and Great American Capital (collectively, "Guarantors"). ( See id. ¶¶ 4-10, 17). The Note was thrice amended, once to both decrease the debt and extend the maturity date, and twice more to further extend the maturity date. ( Id. ¶¶ 18, 20-21).
During this time period, Colonial Bank became the successor-in-interest to Colonial Bank, N.A., ( id. ¶ 19), and on or about August 14, 2009, the State banking Department of the State of Alabama closed Colonial Bank, naming the Federal Deposit Insurance Corp. ("FDIC") as receiver. ( Id. ¶ 22). On that date, the FDIC assigned its interest in the Note, the DOT, and the Guaranty to Plaintiff Branch Banking & Trust Co. ("BB&T"). ( See id. ¶¶ 1, 23).
Regena failed to pay Plaintiff the outstanding principal balance of $2, 016, 109.66 plus interest due under the note on the amended maturity date of December 8, 2009. ( Id. ¶ 25). Plaintiff sent a demand letter to all Defendants demanding payment under the Note and Guaranty, respectively, but all Defendants refused to pay. ( Id. ¶¶ 27-28). Plaintiff executed and recorded a Notice of Default and Election to Sell (the "NOD"), and the trustee under the DOT executed and recorded a Notice of Trustee's Sale (the "NOS"), setting the Property for non-judicial sale on January 17, 2012. ( See id. ¶¶ 29-30). The trustee postponed the sale on January 17, 2012, rescheduling it for sale on February 28, 2012, on which date Plaintiff purchased the Property for a credit bid of $240, 000. ( Id. ¶ 31). On the date of the trustee's sale, the principal balance on the note was $2, 016, 109.66 and accrued interest was $54, 282.15, for a total indebtedness on the Note of $2, 070, 391.81. ( Id. ¶ 32). The fair market value of the Property on the date of sale was $300, 000, ( id. ¶ 33), so the deficiency is $1, 770, 391, ( see id. ¶ 34; Nev. Rev. Stat. § 40.459(1)).
Plaintiff has sued Defendants in this Court for a deficiency judgment, breach of guaranty, and breach of the implied covenant of good faith and fair dealing. Plaintiff has moved for summary judgment as to Defendants' liability on the breach claims and has requested a hearing to determine the fair market value of the Property pursuant to Nevada Revised Statutes ("NRS") section 40.457. Defendants have moved for defensive summary judgment on all claims based upon Plaintiff's lack of standing at the time it filed the lawsuit and under section 40.459(1)(c). Defendants have also asked the Court to certify two questions to the Nevada Supreme Court.
II. LEGAL STANDARDS
A court must grant summary judgment when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id. A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). In determining summary judgment, a court uses a burden-shifting scheme:
When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case.
C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations and internal quotation marks omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323-24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).
If the moving party meets its initial burden, the burden then shifts to the opposing party to establish a genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., Inc. v. P. Elec. Contractors Ass'n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment by relying solely on conclusory allegations unsupported by facts. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions and allegations of the pleadings and set forth specific facts by producing competent evidence that shows a genuine issue for trial. See Fed.R.Civ.P. 56(e); Celotex Corp., 477 U.S. at 324.
At the summary judgment stage, a court's function is not to weigh the evidence and determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. The evidence of the nonmovant is "to be believed, and all justifiable inferences are to be drawn in his favor." Id. at 255. But if the evidence of the nonmoving party is merely ...