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Branch Banking and Trust Co. v. Jones/Windmill, LLC

United States District Court, D. Nevada

March 3, 2015

JONES/WINDMILL, LLC, et al., Defendant(s)


JAMES C. MAHAN, District Judge.

Presently before the court is defendants' motion to reconsider. (Doc. # 98). Plaintiff has filed a response, (doc. # 107), and defendants have replied (doc. # 111).

Also before the court is plaintiff's motion for attorneys' fees. (Doc. # 108). Defendants have filed a response, (doc. # 112), and plaintiff has replied (doc. # 113).

I. Background

Plaintiff Branch Banking and Trust Company ("Branch Banking") is the successor in interest to non-party Colonial Bank by acquisition of assets from the Federal Deposit Insurance Corporation ("FDIC") as receiver for the bank.

Branch Banking's initial claims arose out of a January 18, 2006, promissory note secured by a deed of trust executed by defendant Jones/Windmill, LLC ("Jones/Windmill"). The note secured a loan from Colonial Bank in the original principal amount of $1, 100, 000. The deed of trust encumbered certain real property located in Clark County, Nevada. The individual and corporate defendants executed guaranties, promising to repay the present and future indebtedness of Jones/Windmill. Those guarantors are defendants Yoel Iny, individually and as trustee of the Y&T Iny Family Trust; Noam Schwartz, individually and as trustee of the Noam Schwartz Trust; and D.M.S.I., LLC.

On August 14, 2009, Colonial Bank was closed and the FDIC was named as receiver. That same day, the FDIC assigned all of its rights, title, and interest in, to, and under the loan documents to Branch Banking.

On August 3, 2011, Branch Banking served a demand letter upon Jones/Windmill and the individual guarantors. Jones/Windmill and the guarantors failed to pay the balance due by the demanded date of August 31, 2011.

On February 29, 2012, a trustee's sale was held, and the property was sold to Branch Banking for a credit bid in the amount of $296, 000 in partial satisfaction of the note. According to Branch Banking, the principal balance remaining under the note is $1, 099, 917.66, with accrued interest at the time of filing in the amount of $28, 724.32, for a total of $1, 128, 641.98.

Branch Banking brought a complaint asserting claims for breach of guaranty, breach of the covenant of good faith and fair dealing, and seeking a deficiency judgment. (Doc. # 6). Plaintiff and defendants filed cross motions for summary judgment. (Docs. ## 68, 70).

Defendants claimed that Branch Banking did not have standing to enforce payment on the loan. Specifically, defendants argued that plaintiff was collaterally estopped from relying on the purchase agreement that plaintiff executed with the FDIC as evidence that plaintiff had a specific right to the loan. This court found that Branch Banking was not estopped from asserting it holds the right to pursue a deficiency judgment on the loan. (Doc. # 97).

Alternatively, defendants argued that Branch Banking had failed to provide evidence of the consideration paid as required under NRS 40.459(1)(c). This court held that this subsection does not apply retroactively to assignments made prior to the statute's effective date of June 10, 2011. Because the effective date of the assignment was August 14, 2009, this court granted plaintiff's motion for summary judgment as to all issues except the fair market value of the property at the time of the trustee's sale. (Doc. # 97). In addition, this court denied defendants' motion for summary judgment. (Doc. # 97).

This court also denied defendants' motion to certify questions of law, (doc. # 97), finding certification unnecessary in light of the fact that NRS 40.459(1)(c) was not applicable to the assignment in this case. Defendants subsequently brought this motion to reconsider. (Doc. # 98).

II. Legal standard

A motion for reconsideration "should not be granted, absent highly unusual circumstances." Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Reconsideration "is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law." School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993).

Federal Rule of Civil Procedure 59(e) "permits a district court to reconsider and amend a previous order." Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003). However, "the rule offers an extraordinary remedy, to be used sparingly in the ...

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