Branch Banking and Trust Company v. Rossal et al
Filing
72
ORDER GRANTING Plaintiff's 65 Motion to Dismiss. IT IS FURTHER ORDERED that Plaintiff's 67 Motion for Summary Judgment is GRANTED with respect to Plaintiff's deficiency claim. IT IS FURTHER ORDERED that Plaintiff's [6 8] Motion for a Deficiency Judgment Hearing is GRANTED. The Court will set a hearing to determined the fair market value of the property at the time it was sold. Signed by Judge Miranda M. Du on 9/29/15. (Copies have been distributed pursuant to the NEF - PS)
1
2
3
4
5
UNITED STATES DISTRICT COURT
6
DISTRICT OF NEVADA
7
***
8
9
BRANCH BANKING AND TRUST
COMPANY,
ORDER
Plaintiff,
10
11
Case No. 2:12-cv-01298-MMD-GWF
v.
Motion to Dismiss
dkt. no. 65;
dkt.
FELICIANO ROSSAL, et al.,
dkt. no. 68.)
12
Defendants.
13
14
15
16
I.
SUMMARY
In September 2014, the Court denied, without prejudice, a motion for summary
judgment filed by Plaintiff Branch Banking and Trust Company
. (Dkt. no. 64.)
17
and Feliciano Rossal had filed for
18
bankruptcy several months earlier, which stayed this case with respect to them. (See
19
dkt. nos. 58, 59, 62.) Defendant Onelia Rossal, however, did not file for bankruptcy or
20
oppose the motion for summary judgment. (Dkt. no. 62.) Concerned about the possibility
21
of creating prejudicial effects by deciding the motion for summary judgment during the
22
stay, and in light of the fact that Onelia Rossal had not opposed the motion, the Court
23
denied the motion, but gave Plaintiff leave to reassert it. (Dkt. no. 64.)
24
Plaintiff has since filed the three motions pending before the Court: a Motion for
25
Voluntary Dismissal of Defendant Feliciano Rossal (dkt. no. 65), a Motion for Summary
26
Judgment against Onelia Rossal (dkt. no. 67), and a Motion for a Deficiency Judgment
27
Hearing (dkt. no. 68). Defendants have not responded to these pending motions. For the
28
reasons discussed below, the motions are granted.
1
II.
BACKGROUND
2
A.
Factual Background
3
On December 12, 2005, Defendants Feliciano Rossal and Onelia Rossal
4
t of
5
$281,000.00 and delivered it to Colonial Bank, N.A. (Dkt. no. 67 ¶ 1.) The Note was
6
secured by a Deed of Trust that encumbered real property in Clark County, Nevada
. (Id. ¶ 2.)
7
ote. (Id. ¶ 3.)
8
At some point thereafter, Colonial Bank, N.A., was converted from a national
9
banking association into a state-chartered bank. (Id. ¶ 4.) Colonial Bank, an Alabama
10
banking corporation, became its successor. (Id.) In August 2009, Alabama state officials
11
closed Colonial Bank;
12
the receiver. (Id. ¶ 5.) The FDIC, in turn, assigned its rights under the Note, Deed of
13
Trust, and other loan documents to Plaintiff BB&T. (Id. ¶¶ 6 7.)
was named
14
The Borrowers defaulted on the Note in December 2010. (Id. ¶ 8.) At a non-
15
Plaintiff purchased the Property through a credit
16
bid of $144,000.00. (Id. ¶ 9.) The sale only partially compensated for the
17
outstanding balance. (Id. ¶ 10.)
18
B.
Procedural Background
19
Plaintiff initiated this lawsuit on July 23, 2012, alleging a deficiency against the
20
Borrowers, a breach of guaranty against the Guarantor, and a breach of the covenant of
21
good faith and fair dealing against the Borrowers and the Guarantor. (Dkt. no. 1.)
22
Defendants filed a motion to dismiss for lack of standing in September 2012 (dkt. no. 7),
23
which the Court denied. (Dkt. no. 31.) The parties then filed several motions for summary
24
judgment. (Dkt. nos. 33, 34, 35, 39.) In April 2
.1 (Dkt. no. 54.)
25
26
///
27
///
28
1
Ms. Rossal has not obtained replacement counsel and is proceeding pro se.
2
The next month, in May 2014,
1
notified the Court
2
that they had filed for bankruptcy. (Dkt. nos. 58, 59, 62.) The Court heard oral argument
3
on the pending motions for summary judgment and for a deficiency hearing on
4
September 23, 2014. (Dkt. no. 64.) Onelia Rossal did not appear for the hearing. In light
5
of her absence and the recent bankruptcy filings, the Court denied
6
judgment motions without prejudice, and denied
7
hearing as moot. (Id.)
8
which the Court granted. (Dkt. nos. 70, 71.)
August 2015,
The Court now addresses
9
rted Motion for Summary Judgment
10
and Motion for a Deficiency Judgment Hearing (dkt. nos. 67, 68)
11
Motion to Dismiss Defendant Feliciano Rossal (dkt. no. 65).
12
III.
MOTION TO DISMISS
13
Plaintiff seeks voluntary dismissal of Plaintiff Feliciano Rossal without prejudice
14
under Rule 41 of the Federal Rules of Civil Procedure. (Dkt. no. 65.) Rule 41 allows for
15
a)(2).
16
will not be prejudiced, or
17
Stevedoring Servs. of Am. v. Armilla Int’l B.V., 889 F.2d
18
919, 921 (9th Cir. 1989) (citation omitted). Feliciano Rossal was active in this lawsuit
19
before he filed for bankruptcy. However, in light of the current stay, the Court finds that
20
voluntary dismissal would not prejudice or unfairly affect Mr. Rossal. The Court therefore
21
grants the Motion to Dismiss (dkt. no. 65). Defendant Feliciano Rossal is terminated from
22
this case.
23
IV.
MOTION FOR SUMMARY JUDGMENT
24
According to Plaintiff, the undisputed facts demonstrate that it is entitled to a
25
deficiency judgment against Onelia Rossal. Plaintiff asserts that Ms. Rossal defaulted on
26
her loan, that the
27
Ms. Rossal is responsible for paying that balance. Plaintiff further argues that a provision
28
of
-deficiency statutes, formerly codified at NRS § 40.459(1)(c), cannot bar
3
it is preempted by federal law. (Dkt. no. 67 at 6-7; 10-13.)
1
2
3
The Court agrees.
A.
Legal Standard
4
The purpose of summary judgment is to avoid unnecessary trials when there is
5
no dispute as to the facts before the court. Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric.,
6
7
shows that there is no genuine dispute as to any material fact and the movant is entitled
8
see Celotex Corp. v. Catrett, 477
9
U.S. 317, 322
10
on which a reasonable fact-finder could find for the nonmoving party and a dispute is
11
Anderson v.
12
Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Where reasonable minds could differ
13
on the material facts at issue, however, summary judgment is not appropriate. See id. at
14
250-51
15
16
Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat’l
17
Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary
18
judgment motion, a court views all facts and draws all inferences in the light most
19
favorable to the nonmoving party. Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793
20
F.2d 1100, 1103 (9th Cir. 1986).
21
The moving party bears the burden of showing that there are no genuine issues
22
of material fact. Zoslaw v. MCA Distrib. Corp.
23
order to carry its burden of production, the moving party must either produce evidence
24
25
the nonmoving party does not have enough evidence of an essential element to carry its
26
ultimate burden
Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210
27
t
28
4
Anderson
1
2
not rely on denials in the pleadings but must produce specific evidence, through
3
Bhan v. NME
4
Hosps., Inc.
5
Orr v. Bank of Am., 285
6
F.3d 764, 783 (9th Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
7
475 U.S. 574, 586 (1986)
Anderson, 477 U.S. at 252.
8
9
Finally, the Court notes that Ms. Rossal is proceeding pro se. Even as a pro se
10
litigant, Ms. Rossal must comply with the applicable procedural rules. Ghazali v. Moran,
11
46 F.3d 52, 54 (9th Cir. 1995) (per curiam). The Court cannot, however, grant the Motion
12
solely because Ms. Rossal failed to file an opposition brief. Rather, as noted above, the
13
Court will grant summary judgment only where a party shows that no genuine dispute of
14
material fact exists, and where that party is entitled to judgment as a matter of law. Fed.
15
R. Civ. P. 56(a); see Henry v. Gill Indus., Inc., 983 F.2d 943, 950 (9th Cir. 1993)
16
(affirming grant of summary judgment because moving party demonstrated that a claim
17
was frivolous, but noting that the district court had erred in granting summary judgment
18
for non-
19
B.
Discussion
20
Section 40.455(1) of the Nevada Revised Statutes allows creditors to obtain
21
22
balance remaining due to the judgment creditor or the beneficiary of the deed of t
23
NRS § 40.455(1), amended by 2015 Nev. Stat., Ch. 518, Sec. 8 (Westlaw). Here,
24
Plaintiff offers undisputed evidence to establish such a deficiency. First, Plaintiff offers a
25
signed copy of the Note, in which Ms. Rossal (along with Feliciano Rossal) agreed to
26
pay a principal amount of $281,000 between December 2005 and December 2010. (Dkt.
27
no. 67 at 23-24.) Plaintiff has also reproduced a copy of the corresponding Deed of
28
Trust, which lists Colonial Bank, N.A., as the lender and beneficiary. (Id. at 26-42.) Next,
5
1
Plaintiff offers a copy of an assignment from the FDIC to Plaintiff; the document assigns
2
to Plaintiff all of the
to and interests in deeds of trust, promissory notes,
3
y its predecessors] . . . as of
4
Id. at
5
consideration of the sum of [$10.00], and other good
Id.)
6
hibits also include an allonge assigning
Promissory Note from the FDIC to Plaintiff on August 14, 2009. (Id. at 59.)
7
8
Finally, Plaintiff reproduces
9
for a credit bid of $144,000 at a t
10
s Deed, which indicates that the Property was sold
on February 29, 2012. (Id. at 61-63.)
Together, these documents suggest that the balance remaining due to Plaintiff
11
exceeds the amount produced by the trustee
sale. (See id. at 21 (declaration of Peter
12
Nugent, a Senior Vice President of Plaintiff, noting that the total indebtedness under the
13
Note on February 29, 2012, was $243,037.27).) Under the plain language of NRS
14
§ 40.455(1), Plaintiff has demonstrated a deficiency.
15
in February 2012, however, NRS § 40.459(1)(c)
16
limited the amount that a successor creditor could recover through
17
18
19
20
21
a deficiency judgment. Subsection (1)(c) then2 read:
If the person seeking the judgment acquired the right to obtain the
judgment from a person who previously held that right, [a deficiency
judgment could be limited to] the amount by which the amount of the
consideration paid for that right exceeds the fair market value of the
property sold at the time of sale or the amount for which the property was
actually sold, whichever is greater.
22
2011 Nev. Stat. 1743. Under this provision, a successor creditor could only recover the
23
difference between the consideration it paid for the right to a deficiency judgment and
24
the actual sale price or fair market value of a property. Thus, unless a successor creditor
25
26
27
2
Section 40.459 was amended and reorganized in May 2015.See 2015 Nev. Stat.,
Ch. 149, Sec. 1 (Westlaw) (codified as amended at NRS § 40.459). Subsection (1)(c)
now appears in NRS § 40.459(3)
28
6
1
2
sale value, Subsection (1)(c) foreclosed the successor creditor from recovering a
3
deficiency.
4
The remaining issue in this case, then, is whether Subsection (1)(c) applies to
5
Plaintiff. Plaintiff contends that Subsection (1)(c) interferes with the federal statutory
6
scheme through which the FDIC protects the assets of failed banks. (Dkt. no. 67 at 10-
7
13.) According to Plaintiff, this federal scheme preempts Subsection (1)(c) under the
8
Supremacy Clause of the United States Constitution, such that Subsection (1)(c) cannot
9
See id. (quoting U.S. Const. art. VI, cl. 2)); see Chae
10
v. SLM Corp.
11
Congress enacts a statute that explicitly pre-empts state law; (2) state law actually
12
conflicts with federal law; or (3) federal law occupies a legislative field to such an extent
13
that it is reasonable to conclude that Congress left no room for state regulation in that
14
Tocher v. City of Santa Ana, 219 F.3d 1040, 1045 (9th Cir. 2000))).
15
In April 2015, the Nevada Supreme Court addressed this issue, concluding that
16
federal law
specifically, the federal Financial Institutions Reform, Recovery and
, 12 U.S.C. § 1811 et seq.
17
preempts Subsection
18
(1)(c) from applying to deficiency actions brought by a creditor to which the FDIC has
19
transferred a loan. Munoz v. Branch Banking, 348 P.3d 689, 692 93 (Nev. 2015). There,
20
just as in this case, the plaintiff creditor had obtained rights to a loan from the FDIC,
21
which had previously assumed the loan while acting as the receiver of a failed bank. Id.
22
at 690 91. After n
23
24
ect
assets, the court further stated that [t]o assist the
FDIC in carrying out this duty, federal law provides special status t
25
Id. at
26
a
27
deficiency judgment that exceeds what they paid for the loan. Id. Accordingly, the court
28
7
Id. (quoting Fed.
1
2
Deposit Ins. Corp. v. Newhart, 892 F.2d 47, 50 (8th Cir. 1989)).
3
The Court is persuaded by this reasoning and applies it here. Plaintiff obtained its
4
rights to the loan from the FDIC. The FDIC, in turn, acquired the loan in its role as a
5
receiver pursuant to FIRREA. Because Subsection (1)(c), as interpreted by the Nevada
6
no more than the
7
consideration it paid to acquire the loan, the Court finds that Subsection (1)(c) does not
8
s that federal law
9
preempts Subsection (1)(c) from imposing such a limitation. The Court will therefore
10
11
Ms. Rossal.3
12
V.
MOTION FOR DEFICIENCY JUDGMENT HEARING
13
14
value as of the date it was sold. (Dkt. no. 67 at 14-15.) Because the Court grants
15
a hearing.
16
V.
CONCLUSION
17
The Court notes that Plaintiff made several arguments and cited to several cases
18
not discussed above. The Court has reviewed these arguments and cases and
19
determines that they do not warrant discussion as they do not affect the outcome of the
20
motions.
21
It is ordered
22
It is further ordered that
23
granted
24
for Summary Judgment (dkt. no. 67) is
///
25
26
27
28
3
orward, commonplace breach of contract
does not specifically allege a breach of contract claim. (See dkt. no. 1.) The Court will
not grant summary judgment on a claim that has not been alleged. Nevertheless, the
Court finds that Plaintiff is entitled to judgment as a matter of law on the deficiency claim,
and will grant summary judgment on that basis.
8
1
It is further ordered that
2
no. 68) is granted. The Court will set a hearing to determine the fair market value of the
3
Property at the time it was sold.
4
DATED THIS 29th day of September 2015.
5
6
MIRANDA M. DU
UNITED STATES DISTRICT JUDGE
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?