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Wells Fargo Bank, N.A. v. Iny

United States District Court, D. Nevada

October 21, 2014

WELLS FARGO BANK, NATIONAL ASSOCIATION, Plaintiff,
v.
YOEL INY and TIKVA INY, husband and wife, et al., Defendants.

ORDER (DEFS' MOTION FOR SUMMARY JUDGMENT - DKT. NO. 24)

MIRANDA M. DU, District Judge.

I. SUMMARY

Before the Court is Defendants' Motion for Summary Judgment ("Motion") (dkt. no. 24). For the reasons set out below, the Motion is denied.

II. BACKGROUND

Plaintiff Wells Fargo Bank, National Association, 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, [1] 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 ΒΆ10.)

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" and, collectively with GAC Guaranty, "Guarantees"). ( 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 Guarantees ("Arizona Litigation"). ( Id. at 6.) In the instant action, Plaintiff does not seek enforcement of the Guarantees or assert any deficiency claims against the Guarantors. Instead, the Complaint asserts fraudulent transfer claims, alleging that Plaintiff has a right to payment under the Guarantees, 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.)

One June 13, 2014, the Court entered an order resolving various motions and reserving judgment on the Motion until the parties had an opportunity to brief the issue of whether this action should be stayed pending resolution of the Arizona Litigation ("Order"). (Dkt. no. 86.) The parties filed supplemental briefing regarding the stay. (Dkt. nos. 90, 91.) The Court held a hearing to address the Motion on October 2, 2014. (Dkt. no. 108.)

III. DISCUSSION

A. The Court will not stay this action

The Court finds that it would not be appropriate to stay this action pending resolution of the Arizona Litigation. The parties do not argue that traditional doctrines of abstention apply in this instance, nor is the Court aware of any that may apply. Where traditional doctrines of abstention do not apply, a district court may stay an action pending resolution of a concurrent state court proceeding based on consideration of "wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation." Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976) (citations omitted). However, the Ninth Circuit has recognized that the Colorado River doctrine is a "narrow exception to the virtually unflagging obligation of the federal courts to exercise the jurisdiction given them." Smith v. Cent. Ariz. Water Conservation Dist., 418 F.3d 1028, 1033 (9th Cir. 2005) ( citing Holder v. Holder, 305 F.3d 854, 867 (9th Cir. 2002)) (internal quotation marks omitted). Indeed, the Ninth Circuit has stated that "the existence of a substantial doubt as to whether the state proceedings will resolve the federal action precludes the granting of a [ Colorado River ] stay." Cent. Ariz., 418 F.3d at 1033 ( quoting Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993)). "Thus, the decision to invoke Colorado River necessarily contemplates that the federal court will have nothing further to do in resolving any substantive part of the case, whether it stays or dismisses." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 28 (1983) (citation omitted).

A stay would not be appropriate in this case. As the Court noted in its previous Order, "[t]he 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 [Guarantees]" and "Plaintiff's fraudulent transfer claims in the present action appear to be ancillary to the claims in the Arizona Litigation." (Dkt. no. 86 at 4.) While, as the Court noted, a decision in the Arizona Litigation on the enforceability of the Guarantees could prove to be dispositive as to Plaintiff's fraudulent transfer claims ( id. ), the Court would have to determine whether the alleged fraudulent transfers occurred in the event the Arizona court finds that Plaintiff may recover on the Guarantees. On September 23, 2014, Plaintiff notified this Court that the Guarantors' pending motion for summary judgment, which raises a similar issue, [2] was denied in the Arizona Litigation. (Dkt. no. 100.) At the hearing on the Motion, Defendants' counsel further represented that the Arizona court rejected the Guarantors' arguments that the Guarantees are not enforceable. ...


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