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Hellerstein v. Desert Lifestyles

United States District Court, D. Nevada

March 31, 2018

STEVEN HELLERSTEIN, et al. Plaintiffs,
v.
DESERT LIFESTYLES, et al., Defendants.

          ORDER

          RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This case, removed from state court in 2015, involves a dispute between two groups of plaintiffs and two groups of defendants regarding a golf course property located in a planned community in Las Vegas, Nevada. After a long and protracted series of events, including an appeal to the Ninth Circuit, the Court ordered jurisdictional discovery to determine the citizenship of Defendant LLCs and Intervenor Defendant LLC. At a hearing on October 27, 2017, the Court took the matter under submission, and this order now follows.

         II. PROCEDURAL HISTORY

         a. Events Leading Up to the Joinder of Stoneridge

         The parties are familiar with the elaborate procedural development of this case. However, the Court summarizes the relevant events with regard to its determination of subject matter jurisdiction. This case was initially filed in the Eighth Judicial District Court for Clark County, Nevada by several homeowners of properties in the common interest community Silverstone Ranch (collectively, “Homeowner Plaintiffs”) on September 7, 2015. In the Complaint, Homeowner Plaintiffs allege that Defendants Desert Lifestyles, LLC (“Desert Lifestyles”) and Western Golf Properties, LLC (“Western Golf”) (collectively, “Desert Lifestyles Defendants”) violated an agreement to maintain the golf course property around which the Silverstone Ranch community was formed. Homeowner Plaintiffs sought declaratory and injunctive relief to compel Desert Lifestyles, as owner of the golf course, to maintain and operate the golf course. Plaintiff-in-Intervention Silverstone Ranch Community Association (“Intervenor Plaintiff”) filed a Complaint-in-Intervention on September 11, 2015. On September 18, 2015, Desert Lifestyles Defendants removed the case to federal court, on the grounds that both Desert Lifestyles and Western Golf were California limited liability companies. The Petition for Removal included an Ex-Parte Application for Temporary Restraining Order (“TRO”).

         Homeowner Plaintiffs filed a Motion to Remand to state court on September 23, 2015, arguing that Desert Lifestyles Defendants failed to demonstrate diversity of citizenship, as the Petition for Removal failed to indicate who were the members of the respective LLCs. The following two days, the Court held hearings on the Ex-Parte Application for TRO and granted the TRO against Desert Lifestyles Defendants. Beginning its jurisdictional inquiry, the Court also ordered Desert Lifestyles Defendants to produce information about their members as of the date of removal. The Court held several hearings on the request for preliminary injunction, which the Court granted on November 10, 2015.[1] Desert Lifestyles Defendants appealed this decision to Ninth Circuit.

         On December 15, 2015, while Desert Lifestyles Defendants' appeal was pending, Desert Lifestyles sold the golf course property to Stoneridge Parkway, LLC (“Stoneridge”). Desert Lifestyles Defendants filed a Notice claiming that, due to the sale, they no longer had an interest in the golf course property within Silverstone Ranch and therefore were not obligated to attend the hearing previously set for December 17, 2015 regarding proposals for restoring the golf course. The Court ordered Desert Lifestyles to produce documents relating to the sale of the golf course for in camera review. On December 17, 2015, prior to the scheduled hearing, Homeowner Plaintiffs filed an Emergency Motion requesting sanctions against Desert Lifestyles.[2] Intervenor Plaintiff also filed several Emergency Motions, requesting, among other relief, binding successors-in-interest to the preliminary injunction and adding Stoneridge as a party to the action. During the hearing on the same day, the Court granted Intervenor Plaintiff leave to file an Amended Complaint, including Stoneridge a party. The Court additionally ordered Plaintiffs to file an Amended Motion for Sanctions by December 24, 2015.[3]

         Before an Amended Complaint was filed adding Stoneridge as a party to the action, Intervenor Plaintiff filed a Notice of Bankruptcy as to Stoneridge. Homeowner Plaintiffs and Desert Lifestyles Defendants continued to engage in voluminous briefing regarding sanctions and discovery issues. On January 7, 2016, the Court clarified its prior ruling and stated that it did not find that it had jurisdiction to join any additional party - i.e., Stoneridge - absent the filing of an Amended Complaint with proof of service on the new party. The same day, the Court also granted Homeowner Plaintiffs' oral motion to withdraw their Motion to Remand without prejudice.

         The Court granted the Desert Lifestyles Defendants' Motion to Dismiss without prejudice on September 30, 2016. The case was stayed pending a decision from the Ninth Circuit and resolution of the bankruptcy proceeding as to Stoneridge.

         On May 8, 2017, the Ninth Circuit entered the Mandate to its Memorandum, denying Desert Lifestyle Defendants' appeal as moot, but finding that there was a “serious question as to whether the requirements for diversity jurisdiction [were] satisfied, ” based upon the Complaint and the evidence in the record. The Ninth Circuit concluded that it would “leave it to the district court to conduct the proceedings and consider the evidence it deems appropriate” to determine diversity jurisdiction. The Court issued an Order on the mandate on May 12, 2017.

         b. The Instant Motions

         Intervenor Plaintiff filed its Amended Complaint on April 13, 2017, adding Stoneridge as a Defendant-in-Intervention. (ECF No. 211). Intervenor Plaintiff subsequently filed several Motions to Amend the Complaint. (ECF Nos. 212, 213, 276, 277). Stoneridge filed the instant Motion to Remand or alternatively Motion to Dismiss on April 27, 2017. (ECF No. 223). On April 28, 2017, Desert Lifestyles Defendants filed a Motion to Dismiss for Lack of Jurisdiction (ECF No. 231) and Joinder to Stoneridge's Motion to Remand (ECF No. 233), both of which were later withdrawn (ECF No. 285). Stoneridge additionally filed a Motion to Dismiss or alternatively Motion to Compel Arbitration (ECF No. 240). Intervenor Plaintiff filed Responses to the Motion to Remand and Motions to Dismiss on May 15, 2017 (ECF Nos. 247, 248) and May 19, 2017 (ECF No. 249). Stoneridge filed its Replies on May 22, 2017 (ECF Nos. 250, 251) and May 26, 2017 (ECF No. 253). Intervenor Plaintiff filed a Partial Motion for Summary Judgment on the issue of enforcement of the Golf Course Agreement on July 24, 2017 (ECF No. 261). Stoneridge filed an Emergency Motion to Stay or Defer Response on the Partial Motion for Summary Judgment (ECF No. 275).

         Further voluminous briefing, including several emergency motions, prompted the Court to hold a series of hearings on the matter. The Court held a hearing on August 3, 2017, in which it outlined the parameters for jurisdictional discovery on the record. On September 8, 2017, at a second hearing on the matter, the Court ordered the deposition of the person most knowledge about the information in Desert Lifestyles' possession regarding the sales transaction involving the golf course property. The Court provided further instruction on jurisdictional discovery at a hearing on October 5, 2017. On October 27, 2017, the Court held an evidentiary hearing on jurisdictional issues and heard testimony from Danny Modaberpour (“Modab”), the majority owner and manager of Stoneridge.

         III. ...


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