United States District Court, D. Nevada
For Amtrust Bank, formerly known as Ohio Savings Bank, Iota Violet, LLC, Iota Coral, LLC, Iota Cinnamon, LLC, Iota Red, LLC, Iota Royal, LLC, Plaintiffs: Abran E. Vigil, Timothy R. Mulliner, Ballard Spahr, Las Vegas, NV; Matthew David Lamb, Ballard Spahr LLP, Las Vegas, NV.
For Iota Jade, LLC, Plaintiff: Abran E. Vigil, Ballard Spahr, Las Vegas, NV; Matthew David Lamb, Ballard Spahr LLP, Las Vegas, NV.
For Recoveredge L.P., Plaintiff: Matthew David Lamb, Ballard Spahr LLP, Las Vegas, NV; Timothy R. Mulliner, Ballard Spahr, Las Vegas, NV.
For Rex H. Lewis, Alpha Vista, LLC, Defendants: Leland E. Backus, LEAD ATTORNEY, Backus-Carranza, Las Vegas, NV.
CAM FERENBACH, UNITED STATES MAGISTRATE JUDGE.
This matter involves a post-judgment execution proceeding against Rex H. Lewis. Before the court is judgment creditor Iota Violet, LLC, et al .'s Motion to Compel (#81). Lewis opposed (#84) and Iota Violet, LLC replied (#86). Also before the court is Lewis' Counter Motion to Limit the Scope of his Judgment Debtor Exam (#84). For the reasons stated below, Iota Violet, LLC's Motion to Compel is granted and Lewis' Counter Motion is denied.
In 2008, Nevada's real estate market crashed. (Pl.'s Mot. to Compel (#81) at 3:23). This led to a series of unfortunate events for Rex H. Lewis, a homebuilder and developer, who personally guaranteed five commercial loans in the amount of $59 million. (Id. at 3:4, 19-20).
When the market crashed, the borrowers defaulted and the banks foreclosed. (Id. at 3:23-24). When the foreclosure sales were complete, the debts were not repaid in full. ( See id. at 3:26-28). Then, the banks commenced this deficiency judgment action against Lewis as guarantor. (Id.) Lewis was served and initially defended against the bank's claims, but soon gave up: his attorney withdrew, the banks moved for summary judgment, Lewis failed to oppose, and judgment was entered against Lewis in the amount of $66, 089, 661.52. ( See id. at 5:4-7); (Docs. #55, #57).
Now, the judgment creditors are searching for Lewis' assets in order to satisfy their judgment. They propounded post-judgment written discovery requests, but Lewis evaded service. (Doc. #81 at 5:17). On June 30, 3014, a process server went to Lewis' house. A man resembling Lewis answered the front door, identified himself as " Randy Peterson, " and stated that Lewis no longer resided at the property. (Id. at 5:17-20). Later, the judgment creditors attempted to serve written discovery requests on a guard at the front gate of Lewis' neighborhood. (Id. at 5:21-22). It did not work. Then, the judgment creditors found Lewis while he was going for a walk. (Id. at 5:22-23). When the process server approached, Lewis ran away. (Id. at 5:22-25). A chase ensued and the discovery requests were left on Lewis' front porch. (Id.)
Lewis eventually acquiesced to the judgment creditors' demands, retained counsel, and sat for a deposition. (Id. at 5-6). But, Lewis remembered nothing. (Id. at 6:22-24). He did not know who owns his house. He did not know who paid his property taxes. He did not know anything about the source of his income. In fact, he stated, " I don't know" 175 times, " I don't believe so" 250 times, " I don't believe I do" 75 times, " I don't recall 20 times, " and I don't believe I know" 60 times. (Id. at 6-7).
Additionally, Lewis believes that the banks owe him money. He asserts that between 2007 and 2009--(i.e., before judgment was entered against him)--the loan agreements were modified. According to Lewis' counsel, " as of October 2009, not only did Lewis not believe he was personally liable on any guaranty, but he [also believed he] was entitled to recover substantial sums [from] the banks." (Def.'s Opp'n (#84) at 4:18-22).
This has frustrated the judgment creditors. Unlike typical post-judgment proceedings, in which the judgment creditor subpoenas a third-party bank to locate the judgment debtor's assets, here the banks require Lewis' testimony. Lewis has allegedly been hiding assets for years. The judgment creditors contend that Lewis conveyed millions of dollars in property to his children, transferred money to offshore bank accounts, and laundered funds through various shell corporations. But, Lewis has either forgotten about the transfers or refuses to discuss them if they occurred before September 5, 2010, a date Lewis' arbitrarily selected. (Doc. #81 at 6:20-22).
This prompted the instant Motion to Compel. Thirteen written discovery requests are in controversy. Each concern asserts, which the judgment creditors hope to use ...