United States District Court, D. Nevada
ROBERT C. JONES, District Judge.
This declaratory judgment action arises out of uncertainty in the priority of liens against real property in Nevada after a complex series of transactions, as well as Defendant Tahoe Regional Planning Agency's ("TRPA") refusal to recognize the existence of one of the real estate parcels at issue for the purposes of development under the Tahoe Regional Planning Compact (the "Compact") after the subject parcel was created by a state court judge in Nevada pursuant to a settlement agreement in a previous action. Pending before the Court is a Motion for Relief Under Rule 36(b) (ECF No. 147). For the reasons given herein, the Court denies the motion.
I. FACTS AND PROCEDURAL HISTORY
A. Creation of the Parcels
On September 19, 2000, a judge of the Ninth Judicial District Court in Nevada issued a stipulation and order (the "State Court Order") in a case called Harvey v. Smittkamp, No. 99-CV-00305-DC, splitting a parcel of real estate (the "Former Parcel") into two parcels, Parcel 008 and Parcel 009 (collectively, the "New Parcels"). (Compl. ¶¶ 7-9, June 22, 2011, ECF No. 1-1). The State Court Order was recorded with the Douglas County Recorder's Office, with a survey of the New Parcels attached thereto, and the Douglas County Assessor thereafter identified Parcels 008 and 009 as APN: XXXX-XX-XXX-XXX and -009, respectively, and assessed taxes against them. ( See id. ¶¶ 10-12).
B. Encumbrances upon the Parcels
The New Parcels (previously the Former Parcel) were owned by the Rockwell 1997 Trust (the "Trust"), with trustees Chad Smittkamp and Jean Merkelbach, who had been parties to the Harvey case. ( See id. ¶¶ 5, 7, 13). During the real estate boom, the New Parcels experienced what can only be described as an orgy of encumbrances.
On November 14, 2003, separate deeds of trust were recorded against Parcel 008 and Parcel 009, both securing a single loan for $252, 000 from Novasel & Schwarte Investments, Inc., d.b.a. Western Highland Mortgage Co. ("WHMC"). ( Id. ¶¶ 13-15). A Release Agreement recorded as an attachment to the deed of trust against Parcel 009 provided that WHMC would release the deed of trust against Parcel 009 once the loan from WHMC was secured by a firstposition deed of trust against Parcel 008. ( See id. ¶ 17). At the time WHMC's deeds of trust were recorded, Parcel 009 was already encumbered by two deeds of trust, putting the deed of trust against Parcel 009 in favor of WHMC in third position. ( Id. ¶ 16). The first-position deed of trust against Parcel 009 secured a $2, 000, 000 debt to Washington Mutual Bank ("WaMu"), and the second-position deed of trust against Parcel 009 secured a $200, 000 debt to Anne Marie Rehberger as trustee of the Rehberger Family Trust. ( Id. ). The WaMu and Rehberger debts were subsequently satisfied, and the respective deeds of trust reconveyed, on unspecified dates, putting the WHMC deeds of trust in first position. ( See id. ).
On March 9, 2004, the Trust gave WaMu a deed of trust against Parcel 009 to secure a $2, 500, 000 loan. ( See ¶ 18). On March 24, 2004, WHMC caused to be recorded a "Partial Reconveyance" of its deed of trust against Parcel 009, the intent of which was apparently to reconvey the deed of trust against Parcel 009 pursuant to the Release Agreement, conditioned upon the valid existence of Parcel 008 under the State Court Order and the vitality of its deed of trust against Parcel 008. ( See id. ¶ 20).
On April 20, 2004, the Trust gave the Rehburger Family Trust a deed of trust against Parcel 009 to secure a $450, 000 loan. ( Id. ¶ 19). On December 8, 2004, the Trust gave Acres Corp. a deed of trust against Parcel 009 to secure a $120, 000 loan. ( Id. ). The Rehburger and Acres debts were subsequently satisfied, and the respective deeds of trust reconveyed, on unspecified dates. ( See id. ).
On January 27 and April 20, 2005, the Trust gave CitiMortgage deeds of trust against Parcel 009 to secure two loans of unspecified amounts. ( See id. ¶¶ 21-22). The Trust later refinanced the first CitiMortgage mortgage with CitiMortgage on December 6, 2005, recording a subordination agreement indicating that the December 2006 mortgage with CitiMortgage was prior to the April 2005 mortgage with CitiMortgage in case there were any doubt about subrogation via the refinance. ( See id. ¶ 23).
On October 30, 2006, the Trust refinanced the 2003 loan from WHMC for $500, 000 with Western Highland Mortgage Fund I ("WHMF-I"), with some additional cash-back, giving WHMF-I a deed of trust against unspecified real estate. ( See id. ¶¶ 25-26). WHMF-I expected when it gave the Trust the loan, and believes today, that it is equitably subrogated to WHMC's first-position lien against the New Parcels. ( See id. ¶ 27).
Further complicating matters, although the Douglas County Assessor recognizes Parcel 008 as a legal parcel, TRPA refuses to. ( Id. ¶ 29). This fact may make title to Parcel 008 unmarketable, diminishing its value, as TRPA presumably has what amount to zoning powers over ...