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Bank of America, N.A. v. Bailey

United States District Court, D. Nevada

September 21, 2017

BANK OF AMERICA, N.A., Plaintiffs,
v.
SAMUEL R. BAILEY, et al., Defendants.

          ORDER

         Presently before the court is plaintiff Bank of America, N.A.'s (“BOA”) motion to bifurcate trial. (ECF No. 77). Defendant Samuel R. Bailey filed a response (ECF No. 80), to which plaintiff replied (ECF No. 84).

         I. Facts

         Plaintiff initiated the present action, requesting declaratory relief and quiet title as to its alleged first-position security interest in the real property at 4850 Impressario Court, Las Vegas, Nevada (the “property”). (ECF No. 1). Neither party has requested a jury.

         Bailey then filed the following counterclaims against BOA: (1) offset; (2) unjust enrichment; (3) slander of title; and (4) attorneys' fees as special damages. (ECF No. 39).

         According to BOA, dismissed co-defendant Peter Aguilar owned the property, refinancing it with a roughly $400, 000.00 loan from Countrywide Bank, FSB (“Countrywide”) on December 17, 2008. (ECF No. 68). This transaction was secured by a deed of trust for Countrywide that was recorded on the same day. Id.

         On January 23, 2010, Aguilar then refinanced the property by means of a $396, 459.00 loan from BOA, which satisfied the outstanding Countrywide loan. Id. As a result, a February 2, 2010, substitution of trustee and reconveyance was recorded. Id.

         Plaintiff asserts that a first deed of trust on the property secured the BOA loan. Id. Importantly, plaintiff indicates that the deed of trust was executed by Aguilar on January 23, 2010, but it was not recorded until October 21, 2011. Id.

         In the meantime, Aguilar and Bailey allegedly acted as principals of Silver State Steel Group, Inc. in the course of that entity's acquisition of a Small Business Administration (“SBA”) loan from Meadows Bank (“Meadows”). (ECF No. 70).

         Plaintiff asserts that “Aguilar and Bailey additionally each personally guaranteed the SBA Loan. As additional collateral for the SBA Loan, Aguilar granted Meadows a second-position Deed of Trust . . . on the Property, which was recorded on July 1, 2010.” (ECF No. 68 at 4) (citations omitted). Plaintiff alleges that Bailey and Meadows had actual knowledge of the BOA loan and unrecorded deed of trust. Id.

         Next, Aguilar received a loan from Franklin America Mortgage Company (“Franklin”). (Id.). That “[l]oan was secured by a First Deed of Trust recorded against the Property on December 1, 2010.” Id. at 5. This loan was “used to fully satisfy the outstanding balance owed on the BOA Deed.” Id.

         On December 13, 2012, Franklin assigned its deed of trust to BOA. Id. Thereafter, “Bailey . . . acquired an assignment of Meadows' right, title, and interest on June 6, 2013.” (ECF No. 71 at 6).

         On September 3, 2013, defendant Bailey recorded a notice of default and election to sell. Id. On May 14, 2014, defendant recorded a notice of sale. Id. Plaintiff initiated the instant action on June 6, 2014, requesting a declaratory judgment that its security interest in the property, stemming from the Franklin deed of trust, “is superior to and holds priority over the Meadows Deed of Trust.” (ECF No. 1 at 4). Finally, “Bailey acquired a Trustee's Sale Deed to the Property on September 9, 2014.” (ECF No. 70 at 5).

         Plaintiff and defendant filed cross-motions for summary judgment on their claims. (ECF Nos. 68, 70). On June 22, 2017, this court granted in part and denied in part plaintiff's motion, and denied defendant's motion. (ECF No. 76). The court held that a dispute of fact exists concerning whether Franklin's expectation of subrogation at the time of discharge of the original BOA deed of trust was reasonable. (ECF No. 76 at 7-8).

         II. ...


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