National Real Estate Opportunity Fund I LP v. Kliment et al
Filing
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ORDER, granting Plaintiff's motion for summary judgment 48 ; Judgment is granted in favor of Plaintiff and against Defendants Felicia D Kliment, the Estate of Stephen A Kliment, and Blue Phoenix Holdings, LLC, and each of them, as follows: (1) For principal in the amount of $1,097,250.37; and (2) For interest accruing on the principal balance at the rate of $575.45 per day, from December 27, 2011 until paid; granting Plaintiff's motion for sanctions against Defendants 53 in the amount of $1,184.79; granting Plaintiff' motion for summary disposition on its motion for summary judgment 55 ; denying as moot Plaintiff's Motion for Ruling 58 . Signed by Senior Judge Stephen M McNamee on 3/12/13. (REW)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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National Real Estate Opportunity Fund I,)
LP,
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Plaintiff,
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vs.
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Felicia D. Kliment, et al.,
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Defendants.
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No. CV-12-301-PHX-SMM
ORDER
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Pending before the Court is Plaintiff’s motion for summary judgment and its
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statement of facts in support. (Docs. 48, 49.) Also pending is Plaintiff’s motion for
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sanctions. (Doc. 53.) Defendants have failed to respond to either motion. The Court will
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grant Plaintiff’s motions.
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BACKGROUND
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On April 30, 2012, Plaintiff National Real Estate Opportunity Fund I, LP (“NREOF”)
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filed a first amended complaint against Defendants Felicia D. Kliment, Estate of Stephen A.
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Kliment, and Blue Phoenix Holdings, LLC (“BPH”), alleging breach of promissory note and
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breach of guaranty. (Doc. 22.) NREOF alleges that on June 20, 2007, BPH executed and
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delivered to IMPAC Commercial Capital Corporation (“IMPAC”) a promissory note in the
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original principal amount of three million dollars (the “Note”). (Id. ¶ 13.) In conjunction
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with the Note, BPH executed and delivered to IMPAC a deed of trust (the “Deed”) in real
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property located at 7125 N. 19th Avenue, Phoenix, Arizona 85021 (the “Property”), which
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is a complex of 50 apartments. (Id. ¶ 14.)
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Also on June 20, 2007, the Kliments executed a guaranty in which they guaranteed
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the obligations of BPH under the Note (the “Guaranty”). (Id. ¶ 23.) The Guaranty contained
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provisions indicating that the guarantors’ obligations can be enforced by the applicable
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creditor regardless of whether a trustee’s sale is held and that the applicable creditor has the
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right to collect deficiencies owed thereafter. (Id. ¶ 24.) On October 30, 2007, IMPAC
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assigned all right, title, and interest in the Note, Deed of Trust, Guaranty, and all related loan
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documents to Zions First National Bank (“Zions”), who then assigned all right, title, and
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interest in these loan documents to Plaintiff. (Id. ¶¶ 15,16.) The note required BPH to make
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monthly payments to the holder of the loan documents. (Id. ¶ 17.)
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From April 1, 2011 to the present, BPH has been in default under the Note for failure
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to pay all amounts due. (Id. ¶ 18.) Plaintiff notified BPH that, due to its default, the entire
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unpaid principal balance and accrued unpaid interest were immediately due and payable
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pursuant to the terms of the Note. (Id. ¶ 19.) BPH’s default also gave rise to the Kliments’
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contractual obligation under the Guaranty to make payment on all amounts due under the
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Note. (Id. ¶ 26.) BPH and the Kliments failed and refused to make payments. (Id. ¶ 28.)
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Pursuant to the Deed and loan documents, a trustee’s sale of the Property was held
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on January 10, 2012, in which Plaintiff purchased the Property for $2,147,618.07, an amount
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Plaintiff has established was above the fair market value for the Property on the date of the
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sale. (Doc. 48 at 4-6.) Applying NREOF’s credit bid of $2,147,618.07, after accrued interest
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and additional penalties and fees, NREOF claims a balance due of $1,097,250.37, with daily
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interest of $575.11 beginning on December 27, 2011. (Doc. 49 at 4.) Plaintiff made demand
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upon the Defendants for the amount owing, but Defendants failed to make payment. (Doc.
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48 at 5.) Plaintiff filed for summary judgment, and Defendants failed to respond.
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Moreover, Defendants also failed to obey this Court’s order to meet in person and
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engage in settlement talks. (Doc. 39.) The Court gave a warning to Defendants that further
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noncompliance with this order would be treated as a contempt of court. (Docs. 39, 52.)
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Defendants failed to comply; this Court indicated that it would grant Plaintiff’s request for
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attorney’s fees and client costs incurred in attempting to meet with Defendants as ordered.
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(Doc. 52.) Plaintiff submits its motion for sanctions in the amount of $1,184.79. (Doc. 53.)
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STANDARD OF REVIEW
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A court must grant summary judgment if the pleadings and supporting documents,
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viewed in the light most favorable to the nonmoving party, “show that there is no genuine
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issue as to any material fact and that the moving party is entitled to judgment as a matter of
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law.” FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);
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Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law
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determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248
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(1986); see also Jesinger, 24 F.3d at 1130. “Only disputes over facts that might affect the
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outcome of the suit under the governing law will properly preclude the entry of summary
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judgment.” Anderson, 477 U.S. at 248. The dispute must also be genuine, that is, the
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evidence must be “such that a reasonable jury could return a verdict for the nonmoving
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party.” Id.; see Jesinger, 24 F.3d at 1130.
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A principal purpose of summary judgment is “to isolate and dispose of factually
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unsupported claims.” Celotex, 477 U.S. at 323-24. Summary judgment is appropriate
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against a party who “fails to make a showing sufficient to establish the existence of an
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element essential to that party's case, and on which that party will bear the burden of proof
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at trial.” Id. at 322; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.
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1994). The moving party need not disprove matters on which the opponent has the burden
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of proof at trial. See Celotex, 477 U.S. at 323-24. The party opposing summary judgment
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need not produce evidence "in a form that would be admissible at trial in order to avoid
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summary judgment." Id. at 324. However, the nonmovant “may not rest upon the mere
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allegations or denials of [the party's] pleadings, but . . . must set forth specific facts showing
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that there is a genuine issue for trial.” FED. R. CIV. P. 56(e); see Matsushita Elec. Indus. Co.,
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Ltd. v.Zenith Radio Corp., 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint
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Venture, 53 F.3d 1044, 1049 (9th Cir. 1995).
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DISCUSSION
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Defendants failed to respond to Plaintiff’s motion of summary judgment. Pursuant to
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LRCiv 7.2(i), Plaintiff requests that Defendants’ noncompliance be deemed a consent to the
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granting of summary judgment and summary disposition of Plaintiff’s motion. (Doc. 55.)
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The Court agrees. Plaintiff has amply demonstrated that it is entitled to summary judgment.
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Defendants executed a promissory note secured by a deed of trust to purchase about
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50 apartment units on 19th Avenue north of Glendale Avenue. (Doc. 48 at 2.) Defendant
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Felicia D. Kliment and her late husband, Stephen A. Kliment then signed as guarantors for
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their entity’s debt. (Id.) Defendants defaulted on the note, and a trustee’s sale was
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conducted on January 11, 2012. (Id. at 3.) Plaintiff submitted a successful credit bid of
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$2,147,618.07 for the apartment complex, leaving a balance due of $1,097,250.37, with
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interest after December 27, 2011 at the rate of $575.45. per day. (Id. at 3-4.) Defendants are
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liable for the deficiency pursuant to A.R.S. § 33-814. (Id. at 5-6.)
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Accordingly, on the basis of the foregoing,
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IT IS HEREBY ORDERED GRANTING Plaintiff’s motion for summary judgment.
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(Doc. 48.) Judgment is granted in favor of Plaintiff and against Defendants Felicia D.
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Kliment, the Estate of Stephen A. Kliment, and Blue Phoenix Holdings, LLC, and each of
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them, as follows:
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1. For principal in the amount of $1,097,250.37; and
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2. For interest accruing on the principal balance at the rate of $575.45 per day, from
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December 27, 2011 until paid, based on the promissory note, guaranty and A.R.S. § 33-814.
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IT IS FURTHER ORDERED GRANTING Plaintiff’s motion for sanctions against
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Defendants in the amount of $1,184.79. (Doc. 53.)
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IT IS FURTHER ORDERED GRANTING Plaintiff’s motion for summary
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disposition on its motion for summary judgment. (Doc. 55.)
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IT IS FURTHER ORDERED denying as moot Plaintiff’s motion for ruling. (Doc.
58.)
DATED this 12th day of March, 2013.
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