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Gonzales v. Shotgun Creek Las Vegas, LLC

United States District Court, D. Nevada

April 13, 2017

TOM GONZALES, Plaintiff,
v.
SHOTGUN CREEK LAS VEGAS, LLC et al., Defendants. TOM GONZALES, Plaintiff,
v.
DESERT LAND, LLC et al., Defendants.

          ORDER

          ROBERT C. JONES, UNITED STATES DISTRICT JUDGE

         This case arises out of the alleged of breach of a settlement agreement that was part of a confirmation order in a Chapter 11 bankruptcy. Pending before the Court are cross-motions for summary judgment.

         I. PROCEDURAL HISTORY

         This case is the third action in this Court by Plaintiff Tom Gonzales concerning his alleged entitlement to a fee under a plan of confirmation the undersigned entered years ago while sitting as a bankruptcy judge.

         A. The Desert Land Bankruptcies

         On December 7, 2000, Plaintiff loaned $41.5 million to Desert Land, LLC and Desert Oasis Apartments, LLC to finance their acquisition and development of land in Las Vegas, Nevada. The loan was secured by a deed of trust. On May 31, 2002, Desert Land, LLC, Desert Oasis Apartments, LLC, and Desert Ranch, LLC filed for bankruptcy, and the undersigned jointly administered those bankruptcies while sitting as a bankruptcy judge. The court confirmed the Second Amended Plan of Reorganization (“the Plan”), and the resulting confirmation order (“the Confirmation Order”) included a finding that a settlement had been reached (“the Settlement Agreement, ” which, along with the Plan, was attached to the Confirmation Order) under which Plaintiff would extinguish his note and reconvey his deed of trust as to his interest in Parcel A, Plaintiff and another party would convey their fractional interests in Parcel A to Desert Land, LLC and/or Desert Oasis Apartments, LLC so that those entities would own 100% of Parcel A, Plaintiff would receive Desert Ranch, LLC's 65% interest in another property, and Plaintiff would receive $7.5 million or $10 million if Parcel A were sold or otherwise transferred, depending on the date of transfer (“the Parcel A Transfer Fee”). Plaintiff appealed, and the Bankruptcy Appellate Panel (“BAP”) affirmed except as to a provision subordinating Plaintiff's interest in the Parcel A Transfer Fee to up to $45 million in financing. The Court of Appeals affirmed the BAP's ruling.

         B. The First Action

         In 2011, Plaintiff sued Desert Land, LLC, Desert Oasis Apartments, LLC, Desert Oasis Investments, LLC, Specialty Trust, Specialty Strategic Financing Fund, LP, Eagle Mortgage Co., and Wells Fargo in state court for: (1) declaratory judgment that a transfer of Parcel A had occurred entitling him to the Parcel A Transfer Fee; (2) declaratory judgment that the lender defendants in that action knew of the bankruptcy proceedings and the requirement of the Parcel A Transfer Fee; (3) breach of contract; (4) breach of the implied covenant of good faith and fair dealing; (5) judicial foreclosure against Parcel A under Nevada law; and (6) injunctive relief. He defendants removed the case to the Bankruptcy Court. The Bankruptcy Court recommended withdrawal of the reference because the undersigned had issued the Confirmation Order while sitting as a bankruptcy judge. One or more parties so moved, and the Court granted the motion. In that case, No. 3:11-cv-613, the Court ruled against Plaintiff, and the Court of Appeals affirmed, ruling that the Parcel A Transfer Fee had not been triggered based on the allegations made there, and that Plaintiff had no lien against Parcel A.

         C. The Second Action

         In Case No. 2:13-cv-931, also removed from state court, Plaintiff alleges that Shotgun Investments Nevada, LLC made various loans to the Desert entities for the development of Parcel A between 2012 and January 2013 despite its awareness of the Plan and the Parcel A Transfer Fee provision therein. (See Compl. ¶¶ 22-23, ECF No. 1). Plaintiff sued Shotgun Investments Nevada, LLC (erroneously named as “Shotgun Nevada Investments, LLC”), Shotgun Creek Las Vegas, LLC, Shotgun Creek Investments, LLC, and Wayne M. Perry for intentional interference with contractual relations, intentional interference with prospective economic advantage, and unjust enrichment. Defendants removed and moved for summary judgment, arguing that the preclusion of certain issues decided in the First Action controlled the Second Action. The Court granted that motion as a motion to dismiss, with leave to amend.

         Plaintiff filed the Amended Complaint (“AC”). (See Am. Compl., ECF No. 28). Defendants moved for summary judgment, and Plaintiff moved to compel discovery. The Court struck the conspiracy and declaratory judgment claims from the AC, because Plaintiff had no leave to add them. The Court otherwise denied the motion for summary judgment and granted the motion to compel discovery, although the Court noted that the intentional interference with prospective economic advantage claim was legally insufficient. Defendants moved for summary judgment after further discovery. The Court denied the motion and a motion to reconsider but granted a motion to strike the untimely jury demand. The Court held a bench trial in Las Vegas on the claim for intentional interference with contractual relations, and the case settled during a recess of the trial.

         D. The Present (Third) Action

         In the present case, Plaintiff sued the various Desert entities, SkyVue Las Vegas, LLC, Howard Bulloch, and David Gaffin variously in this Court for breach of contract, breach of the covenant of good faith and fair dealing, and conspiracy, making a timely jury demand. No parties filed dispositive motions before trial. The case is scheduled for a jury trial on ...


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