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Branch Banking and Trust Co. v. Iny

United States District Court, D. Nevada

March 26, 2015

BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation, Plaintiff,
v.
YOEL INY, et al., Defendants. YOEL INY, et al., Counterclaimants,
v.
BRANCH BANKING AND TRUST COMPANY, Counterdefendant.

ORDER (Plf's objection to Magistrate Judge's order - dkt no. 76; Defs' Motion to strike - dkt. no. 81)

MIRANDA M. DU, District Judge.

I. SUMMARY

This Order addresses a discovery dispute and a related motion to strike. Plaintiff Branch Banking and Trust Company ("BB&T") has filed an Objection to Magistrate Judge's Order Denying Plaintiff's Motion for Protective Order (dkt. no. 73) ("Objection"). (Dkt. no. 76.) Defendants have filed a response (dkt. no. 77), and Plaintiff has filed a reply (dkt. no. 78). Plaintiff subsequently filed Notice of Supplemental Authorities ("Notice") to notify the Court of recent orders issued by courts in this district. (Dkt. no. 80.) Defendants have moved to strike Plaintiff's Notice. (Dkt. no 81.)

II. BACKGROUND

A. Relevant Facts

BB&T brings this action against Defendants/Counterclaimants 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. The Amended Complaint alleges the following. On January 11, 2007, GAC Storage Lansing, LLC ("GAC Lansing"), executed and delivered a promissory note ("Note") secured by a deed of trust to Colonial Bank, N.A. (Dkt. no. 16 at 3.) Guarantors executed and delivered a guarantee as to the payment of all amounts due under the Note to Colonial Bank, N.A. ( Id. ) Colonial Bank, an Alabama banking corporation, succeeded Colonial Bank, N.A and was closed by the State Banking Department of the State of Alabama. ( Id. at 4.) The Federal Deposit Insurance Corporation ("FDIC") was named as receiver in order to liquidate and distribute Colonial Bank's assets. ( Id. ) On August 14, 2009, FDIC assigned all of its right, title and interest in the loan documents related to the Note to BB&T. ( Id. ) BB&T thus became the successor in interest and holder of the Note. ( Id. ) Borrower GAC Lansing failed to pay the outstanding balance of the Note by its maturity date of July 29, 2009. ( Id. ) On or about June 16, 2011, BB&T sent a letter to GAC Lansing and the Guarantors demanding that they cure the default but they failed to do so. ( Id. at 4-5.) The Amended Complaint asserts claims against the Guarantors for breach of guaranty and breach of the covenant of good faith and fair dealing. ( Id. at 5-6.)

Defendants filed an Answer to the Amended Complaint and Counterclaim. (Dkt. no. 57.) They assert as affirmative defense no. 23 "all defenses available to them under NRS Chapter 40." ( Id. at 7.)

B. Discovery Dispute

During discovery, Defendants served Plaintiff with a Rule 30(b)(6) notice, seeking to depose Plaintiff on a number of topics. (Dkt. no. 69.) Plaintiff objected to certain topics as unduly burdensome and beyond the scope of the case. These topics involve information relating to payments and the assignment between FDIC and Plaintiff, such as consideration for the loan, the Purchase and Assumption Agreement and loss share payments. ( Id. at 5-6.) Plaintiff moved for a protective order to prohibit Defendants from deposing Plaintiff's representatives on the topics relating to the assignment between FDIC and Plaintiff. ( Id.)

The Magistrate Judge denied Plaintiff's request, finding that the deposition topics relate to Defendants' affirmative defense. (Dkt. no. 73.) In particular, the Magistrate Judge found that Plaintiff's argument that NRS Chapter 40 defenses are not available to Defendants as "misplaced" and Plaintiff's motion for protective order as an improper "vehicle for the court to adjudicate the merits of a party's claims or defenses." ( Id. at 4.) Plaintiff now seeks review of the Magistrate Judge's decision.

III. LEGAL STANDARD

Magistrate judges are authorized to resolve pretrial matters subject to district court review under a "clearly erroneous or contrary to law" standard. 28 U.S.C. § 636(b)(1)(A); see also Fed.R.Civ.P. 72(a); L.R. IB 3-1(a) ("A district judge may reconsider any pretrial matter referred to a magistrate judge in a civil or criminal case pursuant to LR IB 1-3, where it has been shown that the magistrate judge's ruling is clearly erroneous or contrary to law."). "This subsection would also enable the court to delegate some of the more administrative functions to a magistrate, such as... assistance in the preparation of plans to achieve prompt disposition of cases in the court." Gomez v. United States, 490 U.S. 858, 869 (1989). "A finding is clearly erroneous when although there is evidence to support it, the reviewing body on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. Ressam, 593 F.3d 1095, 1118 (9th Cir. 2010) (quotation omitted). A magistrate's pretrial order issued under 28 U.S.C. § 636(b)(1)(A) is not subject to de novo review, and the reviewing court "may not simply substitute its judgment for that of the deciding court." Grimes v. City & County of San Francisco, 951 F.2d 236, 241 (9th Cir. 1991).

IV. DISCUSSION

As an initial matter, the Court will address the briefing relating to Plaintiff's Objection. LR IB 3-1(a) prescribes the procedure for a party to seek review of a magistrate judge's decision involving pretrial matters. It authorizes the filing of an objection to the magistrate judge's decision and a response. LR IB 3-1(a). It does not provide for the filing of a reply. Plaintiff files an objection and a reply to Defendant's ...


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