Bel Air Grand Holdings, LLC, et al v. Federal Deposit Insurance Corporation, No. 2:2010cv00063 - Document 25 (D. Nev. 2010)

Court Description: ORDER Granting 9 MOTION for Preliminary Injunction. Signed by Judge James C. Mahan on 7/19/10. (Copies have been distributed pursuant to the NEF; CC: Finance - ASB)
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1 CRAIG A. HENDERSON Nevada Bar No. 10077 2 BAILEY.:.KENNEDY 8984 Spanish Ridge Avenue 3 Las Vegas, Nevada 89148 (702) 562-8820 Telephone 4 (702) 562-8821 Facsimile CHenderson(ƟBaileyKennedy.com 5 Attorneys for Plaintiffs 6 BEL AIR GRAND HOLDINGS, LLC; THE JRB- TAT BAILEY F AMIL Y TRUST; 7 and JOHN R. BAILEY, P.C. 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 12 13 BEL AIR GRAND HOLDINGS, LLC, a Nevada limited liabilty company; The JRBTAT BAILEY FAMILY TRUST, a Nevada trust; and JOHN R. BAILEY, P.C., a Nevada ) ) Case No.: 2:10-cv-00063-JCM-LRL professional corporation, ) Plaintiffs, 14 15 16 17 18 19 ) ) ) ) ) ORDER GRANTING PRELIMINARY ) INJUNCTION vs. FEDERAL DEPOSIT INSURANCE CORPORATION, as Receiver for COMMUNITY BANK OF NEVADA, Defendants. ) ) ) ) ) ) ) 20 Plaintiffs Bel Air Grand Holdings, LLC ("BAGH"), The JRB- TAT Bailey Family Trust, 21 and John R. Bailey, P.C.'s (collectively, "Plaintiffs") Emergency Motion for Temporary 22 Restraining Order and for Preliminary Injunction (the "Motion"), having come before this Court 23 on July 9,2010; Craig A. Henderson, Esq. ofBAILEY.:.KENNEDY appearing for Plaintiffs; 24 James B. MacRobbie, Esq. of Sylvester & Polednak, Ltd. appearing for Defendant Federal 25 Deposit Insurance Corporation ("FDIC"); and the Court, having reviewed the pleadings and BAILEy.:.KENNDY 8984 SPANISH RIGE AVENl LAS VEGAS, NEVADA 89148 FAX (702) 562-882 i 1 PHONE (702) 562-8820 Dockets.Justia.com 1 papers on fie herein, and having considered the oral argument of the parties, at this stage of the 2 proceedings, finds that: 3 1. In or around February 2007, BAGH obtained a loan from Community Ban of 4 Nevada predecessor-in-interest to Defendant FDIC (the "Bank") (Loan No. 9011020396) (the 5 "Spanish Ridge 1 Loan"), for the purchase of commercial real property located at 8984 Spanish 6 Ridge, Las Vegas, Nevada (the "Spanish Ridge Property"). 7 2. The Spanish Ridge 1 Loan was evidenced by a promissory note. 8 3. The Spanish Ridge 1 Loan was secured by a first deed of trust on the Spanish 9 Ridge Property. 10 4. The Spanish Ridge 1 Loan was guaranteed by BAGH's manager, John R. Bailey 11 ("Bailey") and Plaintiff The JRB- TAT Bailey Family Trust (the "Trust"). 12 5. The terms of the Spanish Ridge 1 Loan included a principal amount of$2.8 13 milion, with a fixed interest rate of6.85% per annum, with 119 monthly payments of 14 $19,696.07 and a balloon payment of 15 6. approximately $2,218,540.97. On August 14,2009, due to the Bank's insolvency, the Bank was closed by the 16 Nevada Financial Institutions Division, and Defendant FDIC was appointed as the Ban's 17 receiver (the "Takeover"). 18 7. Plaintiffs were awarded The FDIC, through counsel, represented that even if 19 damages on their claims, that they would not be entitled to a monetary payment from the FDIC, 20 but instead would be entitled to a Trustee's Certificate that would have to be redeemed against 21 the (now insolvent) Bank. 22 8. Following the Takeover, BAGH paid the FDIC $39,392.14 (on or about October 23 15,2009) on the Spanish Ridge 1 Loan for the months of September and October 2009 as well as 24 $984.80 for late charges. 25 BAILEY.:.KENNDY 8984 SPANISH RIGE A VENl LAS VEGAS, NEVADA 89148 PHONE (702) 562-8820 FAX (702) 562-882 i 2 1 The FDIC, through one of its representatives, represented to BAGH in writing 9. 2 that its payment on or about October 15,2009, in the total amount of $40,376.94, would be 3 applied to the August 2009 and September 2009 Spanish Ridge 1 Loan payments, and further 4 that said payment would bring the Spanish Ridge 1 Loan current as of that time. 5 10. BAGH has not made a payment to the FDIC since the October 15,2009 payment. 6 11. Prior to April 12, 2010, the FDIC did not evidence any intention to assess default 7 interest against BAGH on the Spanish Ridge 1 Loan or otherwise put BAGH on notice that the 8 FDIC was exercising its option to assess default interest against BAGH. 9 12. 10 Under Deed of On May 24, 2010, the FDIC recorded a Notice of Trust on the Spanish Ridge Property ("Notice of 11 intention to foreclose on the Spanish Ridge Property. The Notice of Breach and Election to Sell Breach") evidencing the FDIC's Breach on its face failed to 12 describe the deficiency in performance or payment under the Spanish Ridge 1 Loan, i.e., the 13 Notice of Breach did not describe the amount required to cure the default ofthe Spanish Ridge 1 14 Loan. 15 13. Shortly thereafter, BAGH, through its manager, requested and obtained a 16 Redemption Worksheet from Nevada Title Company for the Spanish Ridge 1 Loan. 17 14. The Redemption Worksheet indicated that BAGH would have to pay a cure 18 amount of$316,977.56 in order to bring the Spanish Ridge 1 Loan current. 19 15. On June 11,2010, the FDIC sent BAGH a Loan Payment Notice which states that 20 a cure amount of$205,823.90 would be required by BAGH in order to bring the Spanish Ridge 1 21 Loan current. 22 16. The FDIC has since asserted that the cure amount is $354,588.21. 23 17. None of the cure amounts proffered by the FDIC applies the $40,376.94 payment 24 made by BAGH on or around October 15,2009, to the August and September 2009 payment, no 25 do the cure amounts proffered by the FDIC take into account the FDIC's written representation BAILEY.:. KENNDY ;984 SPANSH RIDGE A VENl LAS VEGAS, NEVADA 89148 PHONE (702) 562-8820 FAX (702) 562.882 i 3 1 on or around October 14,2009 that the $40,376.94 payment would bring the Spanish Ridge 1 2 Loan current at that time. 3 18. It is BAGH's position that the actual cure amount required to bring the Spanish 4 Ridge 1 Loan current is $166,440.76. This amount is colorable and appears to be reasonable on the litigation. 5 its face based on the evidence proffered to this Court at this stage of 6 19. Although BAGH has requested that the FDIC provide the actual cure amount, the 7 FDIC has failed to provide a cure amount that takes into account BAGH's $40,376.94 payment 8 on or around October 15,2009, or that takes into account the FDIC's failure to exercise its 9 option to assess default interest prior to April 12,2010. 10 20. BAGH deposited $166,440.76 in cash into an interest bearing escrow account at 11 Nevada Title Company on June 30, 2010, which account is under this Court's jurisdiction (the 12 "Nevada Title Company Escrow Account"). 13 21. NRS 1 07.080(3)(a) provides in part that a lender may not accelerate a loan breach and election to sell has been 14 secured by real property until 35 days after a notice of 15 recorded and sent to the borrower. 16 22. breach and election to sell NRS 107.080(3) requires in part that the notice of 17 "describe the deficiency in performance or payment and may contain a notice of intent to declare 18 the entire unpaid balance due if acceleration is permitted by the obligation secured by the deed 0 19 trust...." 20 23. Because the FDIC has not provided BAGH with the amount required to bring the 21 Spanish Ridge 1 Loan current, it appears that the FDIC is attempting to collect money it is not 22 owed and is attempting to improperly accelerate the Spanish Ridge 1 Loan. 23 24. Furthermore, the FDIC has indicated to this Cour that in the event BAGH 24 overpays to bring the Spanish Ridge 1 Loan current, or in the event that the FDIC improperly 25 BAIEY.:.KENNDY 1984 SPANISH RIGE A VENl LAS VEGAS, NEVADA 89148 PHONE (702) 562.8820 FAX (702) 562-882 i 4 1 accelerates and/or forecloses upon the Spanish Ridge 1 Loan, that BAGH wil be without a 2 substantive remedy against the FDIC, i.e., that BAGH wil suffer irreparable har. 3 25. The balance of hardship weighs in favor ofBAGH because as the beneficiary of 4 the Spanish Ridge 1 Loan deed of trust, the FDIC is required under NRS 107.080 to provide 5 BAGH with the proper cure amount required to bring the Spanish Ridge 1 Loan current. 6 26. $166,440.76, which amount was deposited The Court further finds that the sum of 7 in cash by BAGH in an interest bearing escrow account at Nevada Title Company on June 30, 8 2010, within the 35-day cure period, shall remain as adequate security for the payment of such 9 costs and damages as may be incurred or suffered by any party who is found to have been 10 wrongfully enjoined by this Order. 11 27. The Court further finds that BAGH's cash bond of $166,440.76 , deposited in the 12 Nevada Title Company Escrow Account within the 35-day statutory cure period, stays the the 35-day statutory cure period. 13 running of 14 28. The Court further finds that BAGH wil deposit its monthly payments of 15 $19,696.07 into the Nevada Title Company Escrow Account which wil thereby provide 16 additional security for this preliminary injunction and any damages that may be assessed in this 17 case. 18 Good cause appearing, it is 19 ORDERED that Plaintiffs' Emergency Motion for a Preliminary Injunction be and the 20 same is granted. And it is further 21 ORDERED, until further order of this Court, that Defendant Federal Deposit Insurance 22 Corporation is enjoined from: (l) taking the position that the foreclosure proceeding on the 23 Spanish Ridge 1 Loan was not cured within the 35-day statutory cure period on June 30, 2010; or 24 (2) attempting to accelerate the principal amount due under the Spanish Ridge 1 Loan (Loan No. 25 9011020396). And it is further BAILEY.:. KENNDY 984 SPANISH RIGE AVENl LAS VEGAS, NEVADA 89148 FAX (702) 562-882 i 5 PHONE (702) 562-8820 1 ORDERED that the 35-day statutory cure period set out in NRS 107.080 is hereby 2 stayed. And it is further 3 ORDERED that Plaintiffs' cash bond of$166,440.76 (and all future payments), deposite 4 into the Nevada Title Company Escrow Account, wil remain subject to fuher order of this 5 Court and wil serve as adequate security for this preliminary injunction. And it is further 6 ORDERED that Plaintiff Bel Air Grand Holdings, LLC wil deposit its monthly payment 7 of$19,696.07 for the Spanish Ridge 1 Loan into the Nevada Title Company Escrow Account to 8 serve as additional security for this preliminary injunction. 19 of July, 2010. 9 ISSUED this _ day 10 11 12 UNITED STATES DISTRICT COURT JUDGE JAMES C. MAHAN 13 14 Respectfully submitted by: 15 16 17 18 19 20 21 22 23 Attorneys for Plaintiffs BEL AIR GRAND HOLDINGS, LLC, THE JRB-TAT BAILEY FAMILY TRUST and JOHN R. BAILEY, P.C. 24 25 BAILEY.:. KENNDY 8984 SPANISH RIGE A VENl LAS VEGAS, NEVADA 89148 PHONE (702) 562.8820 FAX (702) 562-882 i 6