United States District Court, D. Nevada
For Branch Banking and Trust Company, Plaintiff: Nicole E. Lovelock, Holland & Hart LLP, Las Vegas, NV; Jeremy J. Nork, Holland & Hart LLP, Reno, NV.
For Smoke Ranch Development, LLC, Yoel Iny an individual, Noam Schwartz, an individual, DMSI, LLC, Defendants: Janet L Rosales, Randolph L. Howard, LEAD ATTORNEYS, Kolesar & Leatham, Las Vegas, NV; Bart K Larsen, Kolesar & Leatham, Chtd., Las Vegas, NV; Jeremy J. Nork, Holland & Hart LLP, Reno, NV.
For Yoel Iny, as Trustee on behalf of, Noam Schwartz as Trustee on behalf of, Defendants: Janet L Rosales, LEAD ATTORNEY, Kolesar & Leatham, Las Vegas, NV; Bart K Larsen, Kolesar & Leatham, Chtd., Las Vegas, NV; Jeremy J. Nork, Holland & Hart LLP, Reno, NV.
ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE.
The parties dispute whether the defendants are entitled to a jury trial on the amount of the deficiency following a trustee's sale of property that secured payment on a promissory note. Based on the Nevada statutory scheme and the Seventh Amendment, I conclude defendants are entitled to a jury trial on the amount of the debt owed and the price paid at the trustee's sale, but defendants are not entitled to a jury trial on the fair market value of the property at the time of the trustee's sale.
The predecessor to plaintiff Branch Banking and Trust Company (" BBT" ) loaned money to the defendants as evidenced by a promissory note, with the indebtedness being secured by a deed of trust encumbering real property. (Dkt. #1 at 3.) The loan was personally guaranteed. ( Id.) The borrowers defaulted, leading BBT to sell the property through a trustee's sale under the deed of trust. ( Id. at 4-5.) BBT then brought suit in this court, asserting claims for breach of the guaranties and breach of the covenant of good faith and fair dealing, and for a deficiency judgment under Nevada Revised Statutes § 40.451, et seq. ( Id. at 6-7.)
I granted summary judgment on defendants' liability for breach of the guaranties and breach of the covenant of good faith and fair dealing, leaving only a determination of the deficiency as the remaining issue to be resolved. (Dkt. #130.) The parties now dispute whether the defendants are entitled to a jury trial at the deficiency hearing. (Dkt. #144, #145.)
The parties raise two main issues: (1) whether defendants have a right to a jury trial under the Nevada statutory scheme governing deficiency judgments and (2) if not, whether the Seventh Amendment of the United States Constitution nevertheless requires a jury trial when the action is brought in federal court.
A. Nevada Law
BBT argues that by the statute's plain language, the Nevada Legislature intended the court to make the deficiency findings and enter the deficiency judgment. BBT also contends the statute did not contemplate juries being involved because the hearing can be held in as little as fifteen days. BBT notes that the statute refers to a jury elsewhere, thus demonstrating the Legislature was distinguishing between the court and a jury. Defendants respond that although the statute mentions the " court" holding a hearing, the statute does not specify whether a judge or ...