Federal Deposit Insurance Corporation v. Nevada Title Company

Filing 33

ORDER that 18 Motion to Dismiss is GRANTED in part and DENIED in part. FURTHER ORDERED that 25 Motion to Strike is DENIED as moot. FURTHER ORDERED that 17 Motion to Substitute Party is GRANTED in part and DENIED in part. Commonwealth Land T itle Company shall be joined as a plaintiff in this case. FURTHER ORDERED that 19 Motion to Amend Complaint is DENIED without prejudice. Signed by Chief Judge Gloria M. Navarro on 9/25/14. (Copies have been distributed pursuant to the NEF - MMM)

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1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 4 5 6 7 8 9 10 11 FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver for COMMUNITY BANK OF NEVADA, ) ) ) ) Plaintiff, ) vs. ) ) NEVADA TITLE COMPANY, a Nevada ) corporation; DOE INDIVIDUALS 1 through ) 10; and ROE CORPORATIONS 1 through 10, ) ) Defendants. ) ) Case No.: 2:13-cv-00606-GMN-VCF ORDER Pending before the Court is the Motion to Dismiss (ECF No. 18) filed by Defendant 12 13 Nevada Title Company (“Nevada Title”) on January 28, 2014. Plaintiff Federal Deposit 14 Insurance Corporation (the “FDIC”) filed its Response (ECF No. 20) on February 13, 2014, and 15 Nevada Title filed its Reply (ECF No. 23) on February 21, 2014. The FDIC then filed a 16 Motion to Strike Nevada Title’s Reply (ECF No. 25) on February 25, 2014, to which Nevada 17 Title filed a Response (ECF No. 30) on March 12, 2014. Also pending before the Court are the Motion to Substitute Plaintiff (ECF No. 17) and 18 19 Motion to Amend Complaint (ECF No. 19) filed by the FDIC on January 28, 2014 and January 20 29, 2014 respectively. On February 21, 2014, Nevada Title filed its Response (ECF No. 24) to 21 both motions, and the FDIC filed its Reply (ECF No. 26) on March 3, 2014. 22 I. 23 BACKGROUND The FDIC initiated this action seeking to obtain contractual or equitable indemnification 24 from Nevada Title for any of the FDIC’s costs, attorney’s fees, and damages that resulted from 25 a declaratory relief action. (Complaint, ECF No. 1). The relevant facts are as follows: Page 1 of 12 On October 11, 2005, nonparties Dynasty Towers, LLC (“Dynasty”) and Outback 1 2 Steakhouse of Florida, LLC (“Outback”) entered into an “Agreement of Purchase and Sale” 3 (“APS”), which set forth certain obligations between the two entities relating to Dynasty’s 4 purchasing of property from Outback located at 3695 West Flamingo Road, Las Vegas, NV 5 89103 (the “Property”). (Id. ¶¶ 4–6). To assist in financing the purchase, Dynasty obtained a 6 $6,600,000 purchase money loan from Community Bank of Nevada (“Community Bank”). (Id. 7 ¶ 8). The loan was secured by a Deed of Trust executed on March 10, 2008 that encumbered 8 the Property in the first priority position. (Id. ¶¶ 7, 9; First Deed of Trust, ECF No. 1-1). This 9 First Deed of Trust was recorded with the Clark County Recorder’s Office on April 4, 2008. 10 (First Deed of Trust, ECF No. 1-1). 11 On April 4, 2008, the day escrow closed for the purchase of the Property, Dynasty 12 granted Outback a Deed of Trust securing Dynasty’s performance of its obligations to Outback 13 under the APS. (Complaint ¶¶ 9–10, ECF No. 1, Second Deed of Trust, ECF No. 1-2). This 14 Second Deed of Trust was also recorded on April 4, 2008. (Second Deed of Trust, ECF No. 1- 15 2). 16 Nevada Title served as the escrow agent for the closing of the April 4, 2008 transaction. 17 (Complaint ¶ 13, ECF No. 1). In the Escrow Instructions, Nevada Title was instructed to 18 record the documents memorializing the transaction “only when [Nevada Title was] assured 19 that the enclosed [First] deed of trust will be afforded a first lien priority status.” (Id. ¶ 15; 20 Escrow Instructions, ECF No. 1-3). Escrow closed on April 4, 2008, and Outback conveyed 21 the Property to Dynasty via a Grant, Bargain, Sale Deed recorded that day. (Complaint ¶ 16, 22 ECF No. 1; Sale Deed, ECF No. 1-4). The Sale Deed states that the Property is being conveyed 23 subject to the APS, creating a “covenant running with the land.” (Sale Deed at 2, ECF No. 1- 24 4). 25 Page 2 of 12 1 On October 8, 2008, Dynasty defaulted under the First Deed of Trust, which led to the 2 FDIC being appointed receiver of Community Bank and ultimately acquiring the Property via a 3 Trustee’s Deed upon Sale on February 2, 2010. (Complaint ¶¶ 18–23, ECF No. 1). In its 4 Complaint, FDIC asserts that the February 2, 2010 Trustee’s Sale memorialized by the 5 Trustee’s Deed extinguished all junior liens, including the Second Deed of Trust and the APS 6 covenant. (Id. ¶ 25). 7 On June 6, 2011, 26 Outback executed an “Assignment of Interests,” under which it 8 conveyed “all right, title and interest, if any,” on the Property to Flamingo, LLC (“Flamingo”). 9 (Assignment of Interest, ECF No. 1-5). The Assignment of Interests lists the APS covenant 10 and Second Deed of Trust as interests that Outback may be conveying through the assignment. 11 (Id.). Following the assignment, Flamingo asserted that the APS covenant had not been 12 extinguished by the February 2, 2010 Trustee’s Sale and demanded $4,000,000 in payment 13 from the FDIC based upon its interest under the covenant. (Complaint ¶ 28, ECF No. 1). 14 Subsequently, on December 5, 2011, the FDIC filed a declaratory relief action in Federal 15 District Court against Flamingo seeking a declaration from the court on the relative priority of 16 the First Deed of Trust and APS covenant. (Id. ¶ 29; Dec. Action Compl. Ex. 1-1 to MTD, ECF 17 No. 18). On April 9, 2013, during the pendency of the declaratory relief action, the FDIC filed 18 the Complaint in the present action. (Complaint, ECF No. 1). In this action, the FDIC seeks 19 contractual and equitable indemnity from Nevada Title for failing to follow the Escrow 20 Instructions should the FDIC incur damages in the declaratory relief action based on Nevada 21 Title’s failure to properly place the First Deed of Trust in first priority. (Complaint ¶¶ 30–39, 22 ECF No. 1). 23 On October 18, 2013, the FDIC and Flamingo settled the declaratory relief action and 24 entered a Stipulation and Order dismissing the case. (Stip. and Order, Ex. 1-2 to MTD, ECF 25 No. 18). In their settlement, the FDIC agreed to sell the Property to Flamingo for the purchase Page 3 of 12 1 price of $1,600,000 and both parties would release their claims against each other and dismiss 2 the suit. (Mutual Settlement Agreement and Release, Ex. 1-3 to MTD ¶¶ 5–8, ECF No. 18). As 3 part of the settlement, FDIC’s insurer, Commonwealth Land Title Insurance Company 4 (“Commonwealth”), paid $400,000 to “facilitate settlement.”1 (McCall Affidavit ¶¶ 3–6, ECF 5 No. 20-2). Under the Insurance Policy, Commonwealth was subrogated and assumed all the 6 rights, claims, and remedies of the FDIC relating to the claim paid out by Commonwealth. 7 (Insurance Policy ¶ 12, ECF No. 20-1). 8 The parties subsequently filed the current pending motions in which Nevada Title seeks 9 to dismiss the FDIC’s claims and the FDIC seeks to substitute Commonwealth for itself as the 10 real party in interest following the FDIC’s assignment of its rights to Commonwealth under the 11 principles of subrogation. 12 II. 13 LEGAL STANDARD Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a 14 cause of action that fails to state a claim upon which relief can be granted. See North Star Int’l 15 v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to 16 dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the 17 complaint does not give the defendant fair notice of a legally cognizable claim and the grounds 18 on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering 19 whether the complaint is sufficient to state a claim, the Court will take all material allegations 20 as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v. 21 Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 22 23 1 24 25 It is unclear from the record whether Commonwealth paid the $400,000 to the FDIC or to Flamingo as part of the settlement because neither party indicates the entity that received this payment in any of their filings. However, in the copy of the Insurance Policy attached to the FDIC’s Response to Nevada Title’s Motion to Dismiss, the portion of the policy addressing Commonwealth’s obligation “to pay or otherwise settle with parties other than Insured” is highlighted. (Insurance Policy ¶ 6(b), ECF No. 20-1). Therefore, the implication appears to be that Commonwealth paid $400,000 to Flamingo as part of the settlement. Page 4 of 12 1 The Court, however, is not required to accept as true allegations that are merely 2 conclusory, unwarranted deductions of fact, or unreasonable inferences. See Sprewell v. Golden 3 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). A formulaic recitation of a cause of action 4 with conclusory allegations is not sufficient; a plaintiff must plead facts showing that a 5 violation is plausible, not just possible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing 6 Twombly, 550 U.S. at 555) (emphasis added). 7 In order to survive a motion to dismiss, a complaint must allege “sufficient factual 8 matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 9 556 U.S. 662, 678 (2009) (internal quotation marks omitted). “A claim has facial plausibility 10 11 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Generally, a district court may not consider any material beyond the pleadings in ruling 12 13 14 15 on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly, “documents whose contents are alleged in a complaint and whose authenticity no party 16 questions, but which are not physically attached to the pleading, may be considered in ruling on 17 a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for 18 summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule 19 20 21 22 23 24 25 of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers materials outside of the pleadings, the motion to dismiss is converted into a motion for summary judgment. See Fed. R. Civ. P. 12(d); Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 2001). III. DISCUSSION A. Motion to Dismiss Page 5 of 12 1 In the Complaint, the FDIC asserted two causes of action, contractual indemnity and 2 equitable indemnity. (Complaint ¶¶ 30–39, ECF No. 1). “Noncontractual or implied indemnity 3 is an equitable remedy that allows a defendant to seek recovery from other potential tortfeasors 4 whose negligence primarily caused the injured party’s harm.” Rodriguez v. Primadonna Co., 5 LLC, 216 P.3d 793, 801 (Nev. 2009). “[C]ontractual indemnity is where, pursuant to a 6 contractual provision, two parties agree that one party will reimburse the other party for 7 liability resulting from the former’s work.” United Rentals Hwy. Techs. v. Wells Cargo, 289 8 P.3d 221, 226 (Nev. 2012). 9 Nevada Title bases its Motion to Dismiss primarily on the argument that because the 10 FDIC received $1.6 million in the settlement of the declaratory relief action, it has not suffered 11 any damages and therefore cannot state a claim for relief. (MTD 2:3-11; 7:9-9:13, ECF No. 18). 12 Additionally, Nevada Title argues that the FDIC’s claim for equitable indemnity should 13 independently be dismissed because no tort was alleged in the underlying declaratory relief 14 action and because parties may not rely upon implied indemnity theories when they have 15 agreed to an express indemnity provision in a written contract. (Id. 9:14-11:8). 16 As an initial matter, the Court notes that a tort claim in the underlying action is not a 17 requirement for a claim of equitable indemnity.2 See Rodriguez, 216 P.3d at 801 (“A claimant 18 seeking equitable indemnity must plead and prove that: (1) it has discharged a legal obligation 19 owed to a third party; (2) the party from whom it seeks liability also was liable to the third 20 party; and (3) as between the claimant and the party from whom it seeks indemnity, the 21 22 23 24 25 Nevada Title cites Operating Engineers Pension Trust v. Cecil Backhoe Serv., Inc. for the principle that “[a] claim for equitable indemnity requires, inter alia, a tort claim by the original plaintiff against the proposed indemnitee.” (MTD 9:16-19, ECF No. 18 (citing 795 F.2d 1501, 1508 (9th Cir. 1986)). However, this Ninth Circuit opinion, citing California law, makes no such finding. See Operating Eng’rs Pension Trust, 795 F.2d at 1508. Instead the Court held that a claim for indemnity “requires that the [indemnitor] must have committed a ‘wrong’ to entitle the [prospective indemnitee] to equitable indemnity.” Id. Here, the FDIC has alleged that Nevada Title committed a wrong by failing to follow the Escrow Instructions. (Complaint ¶¶ 33, 37, ECF No. 1). 2 Page 6 of 12 1 obligation ought to be discharged by the latter.”) (citing 41 Am. Jur. 2d Indemnity § 20 (2005)). 2 Therefore, Nevada Title’s argument on this point is without merit. 3 Regarding its argument that the FDIC’s claim for equitable indemnity must fail because 4 a party that contracted for an express indemnification provision may not rely on a theory of 5 implied indemnity, Nevada Title appears to be correct on the law but wrong on the facts in this 6 case. The Supreme Court of Nevada has held that “implied indemnity theories are not viable in 7 the face of express indemnity agreements.” Calloway v. City of Reno, 939 P.2d 1020, 1029 8 (Nev. 1997) opinion withdrawn on grant of reh’g, 971 P.2d 1250 (1998); see also Wells Cargo, 9 289 P.3d at 226 (“When the duty to indemnify arises from contractual language, it generally is 10 not subject to equitable considerations; rather it is enforced in accordance with the terms of the 11 contracting parties’ agreement.”) (internal quotes omitted). However, the contract that the 12 FDIC alleges gives rise to its claim for contractual indemnity is the Escrow Instructions, which 13 does not contain any provision relating to indemnification. (Complaint ¶ 31, ECF No. 1; 14 Escrow Instructions, ECF No. 1-3). Because the alleged contract does not contain an express 15 indemnification provision, the FDIC’s claims against Nevada Title “sound[] exclusively in 16 implied contractual (equitable) indemnity, not contractual indemnity.” Medallion Dev., Inc. v. 17 Converse Consultants, 930 P.2d 115, 117 (Nev. 1997) superseded by statute on other grounds 18 as stated in The Doctors Co. v. Vincent, 98 P.3d 681, 688 (Nev. 2004). Accordingly, because 19 there is no contractual provision addressing indemnification, it is actually the FDIC’s claim for 20 contractual indemnification that must fail not its claim for equitable indemnification. See id.; 21 see also Wells Cargo, 289 P.3d at 226 (“[C]ontractual indemnity is where, pursuant to a 22 contractual provision, two parties agree that one party will reimburse the other party for 23 liability resulting from the former’s work.”). Therefore, because the FDIC has actually alleged 24 a claim for equitable indemnity based upon a contract and there is no specific contract 25 Page 7 of 12 1 provision addressing indemnity, the FDIC’s claim for contractual indemnity is dismissed with 2 prejudice. 3 Regarding its argument that the FDIC has not suffered damages—for which Nevada Title 4 has failed to provide any supporting facts or relevant law—, Nevada Title appears to ignore the 5 crucial fact that in exchange for the $1.6 million received in the settlement, the FDIC gave up 6 title to property that it alleges it should have held free of Flamingo’s interest but for Nevada 7 Title’s failure to follow the Escrow Instructions. (Complaint ¶¶ 33–34, ECF No. 1). A basic 8 measure for damages in cases of breach of contract or negligence is the amount necessary to 9 make the injured party whole and place him in the position he would have occupied had the 10 contract not been breached or the tort not committed. See Hanneman v. Downer, 871 P.2d 279, 11 283 (Nev. 1994) (negligence); Dalton Properties, Inc. v. Jones, 683 P.2d 30, 31 (Nev. 1984) 12 (breach of contract). 13 The FDIC has alleged that if Nevada Title had properly followed the Escrow Instructions 14 then the FDIC would own the Property free of Flamingo’s alleged interest. (Complaint ¶¶ 33– 15 34, ECF No. 1). While the precise value of the Property is currently unknown, in 2005, 16 Dynasty took out a $6.6 million dollar loan in order to purchase the Property, and in 2010, 17 Flamingo asserted that its rights to the Property were valued at $4 million. See (First Deed of 18 Trust, ECF No. 1-1; Complaint ¶ 28, ECF No. 1). Therefore, based on the pleadings, it is 19 highly probable that the value of the Property at the time of the settlement far exceeded its sale 20 price and that selling the Property to Flamingo for only $1.6 million and a mutual release of 21 claims resulted in a considerable loss for the FDIC. Such a loss constitutes damages for which 22 the FDIC may seek relief. See Surowiec v. Capital Title Agency, Inc., 790 F.Supp.2d 997, 1002 23 (D. Ariz. 2011) (noting that “a jury could find with reasonable certainty that Plaintiff has 24 suffered more than $100,000 in damages taking into account the $137,000 purchase price [and] 25 the property’s current value of $31,000” after the escrow agent failed to disclose the property Page 8 of 12 1 was encumbered by a deed of trust); Hounshel v. Battelle Energy Alliance, LLC, 4:11-CV- 2 00635-BLW, 2013 WL 6073878, at *2–4 (D. Idaho Nov. 18, 2013) (recognizing that having to 3 sell a house quickly for less than market value constitutes damages for which a plaintiff may 4 receive relief). Furthermore, while the FDIC ultimately bears the burden of proving these 5 damages, such proof is not required at this stage in the litigation. See Twombly, 550 U.S. 544, 6 570 (2007) (To survive a motion to dismiss, a plaintiff need only plead “enough facts to state a 7 claim to relief that is plausible on its face.”); see also Clark Cnty. Sch. Dist. v. Richardson 8 Const., Inc., 168 P.3d 87, 97 (Nev. 2007) (“The plaintiff has the burden to prove the amount of 9 damages it is seeking[, a]lthough the amount of damages need not be proven with mathematical 10 certainty”). Accordingly, the FDIC’s claim for equitable indemnification shall not be dismissed. 11 12 B. Motion to Strike 13 The FDIC has moved to strike portions of Nevada Title’s Reply on the Motion to 14 Dismiss. In particular, the FDIC seeks to strike out the portions of Nevada Title’s Reply that 15 address the sufficiency of the new claims alleged in the Proposed Amended Complaint attached 16 to the FDIC’s Motion to Amend.3 (Mot. to Strike 5:11-21, ECF No. 25). However, because the 17 Court has already ruled on Nevada Title’s Motion to Dismiss without relying on any of the 18 challenged statements in Nevada Title’s Reply, the Motion to Strike is denied as moot. 19 C. Motion to Substitute & Motion to Amend The FDIC’s Motion to Substitute (ECF No. 17) and Motion to Amend (ECF No. 19) 20 21 essentially seek the same result, to file a complaint in this matter with Commonwealth, as the 22 new plaintiff, asserting all of the claims to which it alleges it is entitled against Nevada Title. 23 Nevada Title has opposed both of these motions on the grounds that the FDIC’s true purpose is 24 25 3 Nevada Title also asserts these arguments virtually verbatim in its opposition to the Motion to Substitute and Motion to Amend. Compare (Opp. to Sub. & Amend. 12:1-15:9, ECF No. 24) with (Reply to MTD 7:5-10:9, ECF No. 23). Page 9 of 12 1 not to substitute the proper party or plead additional claims of an existing party, but to 2 transform this case to enable Commonwealth to collect damages from Nevada Title for which 3 Nevada Title does not have liability to pay. (Opp. to Sub. & Amend. 2:2-4:15, ECF No. 24). 4 Nevada Title, however, bases this argument on its contention that the FDIC has no damages. 5 (Id. 2:23-28). Nevada Title contends that the only damages arising from the settlement was the 6 $400,000 payment made by Commonwealth, and that because the FDIC has no damages, 7 Commonwealth’s indemnity claim is inherently defective. (Id. 6:13-7:2) Because the Court has 8 already rejected Nevada Title’s assertions that the FDIC has not suffered damages, its 9 arguments against substitution and amendment are without merit. 10 The Federal Rules of Civil Procedure provide that “[i]f an interest is transferred, the 11 action may be continued by or against the original party unless the court, on motion, orders the 12 transferee to be substituted in the action or joined with the original party.” Fed. R. Civ. P. 25(c). 13 “Rule 25(c) is not designed to create new relationships among parties to a suit but is designed 14 to allow the action to continue unabated when an interest in the lawsuit changes hands.” In re 15 Bernal, 207 F.3d 595, 598 (9th Cir. 2000). The decision of whether to order substitution lies in 16 the sound discretion of the trial court. Id. 17 Here, the FDIC has sufficiently alleged that it suffered damages as a result of Nevada 18 Title’s failure to follow the Escrow Instructions. See supra section III.A. Commonwealth 19 insured the FDIC for such loss and ultimately paid $400,000 under its policy to facilitate 20 settlement of Flamingo’s claims against the FDIC, which allegedly arose from Nevada Title’s 21 actions. (Complaint ¶¶ 31–39, ECF No. 1; McCall Affidavit ¶¶ 3–6, ECF No. 20-2; Insurance 22 Policy, ECF No. 20-1). Under the Insurance Policy, Commonwealth was entitled to 23 subrogation and the assumption of all the rights, claims, and remedies of the FDIC relating to a 24 claim paid out by Commonwealth to the extent of its payment. (Insurance Policy ¶ 12, ECF No. 25 20-1). Accordingly, under the Insurance Policy and the basic principles of subrogation, by Page 10 of 12 1 paying $400,000 to facilitate settlement, Commonwealth assumed all the rights, claims, and 2 remedies of the FDIC in this action. In re Hamada, 291 F.3d 645, 649 (9th Cir. 2002); Arguello 3 v. Sunset Station, Inc., 252 P.3d 206, 208 (Nev. 2011). 4 However, because it appears that Commonwealth has not paid out the whole loss of the 5 FDIC and is only subrogated to the extent of its $400,000 payment, both Commonwealth and 6 the FDIC appear to “have substantive rights against [Nevada Title] which qualify them as real 7 parties in interest.” Arguello, 252 P.3d at 208. Therefore, the Court finds it appropriate in the 8 exercise of its discretion to join Commonwealth as a party in interest in this case but not to 9 substitute it for the FDIC. 10 Turning to the FDIC’s Motion to Amend, pursuant to Rule 15(a) of the Federal Rules of 11 Civil Procedure, a court should “freely” give leave to amend “when justice so requires,” and in 12 the absence of a reason such as “undue delay, bad faith or dilatory motive on the part of the 13 movant, repeated failure to cure deficiencies by amendments previously allowed, undue 14 prejudice to the opposing party by virtue of allowance of the amendment, futility of the 15 amendment, etc.” Foman v. Davis, 371 U.S. 178, 182 (1962); see also Johnson v. Buckley, 356 16 F.3d 1067, 1077 (9th Cir. 2004). (“Five factors are taken into account to assess the propriety of 17 a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, futility of 18 amendment, and whether the plaintiff has previously amended the complaint.”). 19 The FDIC has not previously amended the complaint, and Nevada Title has presented no 20 evidence that granting leave to amend in this case would result in undue delay or prejudice. 21 Moreover, Nevada Title’s assertion that amending the Complaint would be futile because the 22 FDIC and Commonwealth cannot show damages is again premised on its erroneous belief that 23 FDIC has not suffered damages. Therefore, amending the Complaint to join Commonwealth as 24 a plaintiff and add additional claims is permissible. 25 Page 11 of 12 1 Local Rule 15-1, however, requires that a party moving to amend a pleading must attach 2 the proposed amended pleading to their motion to amend, and if that party’s motion to amend is 3 granted, then the attached pleading shall be filed and served. D. Nev. L.R. 15-1. While 4 Plaintiffs did attach a Proposed Amended Complaint to their Motion to Amend, that Proposed 5 Amended Complaint contains a claim for contractual indemnity and removes the FDIC as a 6 plaintiff in this case. (Prop. Am. Complaint 1, ¶¶ 54–59; ECF No. 19-2). Because this Court 7 has found the claim for contractual indemnity must fail and that the FDIC is still a party in 8 interest, the current Proposed Amended Complaint is defective. Therefore, the Court denies the 9 Motion to Amend without prejudice. 10 IV. CONCLUSION 11 IT IS HEREBY ORDERED that NTC’s Motion to Dismiss (ECF No. 18) is 12 GRANTED in part and DENIED in part. The FDIC’s claim for contractual indemnity is 13 dismissed with prejudice. 14 15 16 IT IS FURTHER ORDERED that FDIC’s Motion to Strike (ECF No. 25) is DENIED as moot. IT IS FURTHER ORDERED that the FDIC’s Motion to Substitute Plaintiff (ECF No. 17 17) is GRANTED in part and DENIED in part. Commonwealth Land Title Company shall 18 be joined as a plaintiff in this case. 19 IT IS FURTHER ORDERED that the FDIC’s Motion to Amend Complaint (ECF No. 20 19) is DENIED without prejudice. The FDIC and Commonwealth may file a new motion to 21 amend with an attached proposed amended complaint that complies with this order. 22 DATED this _____ day of September, 2014. 25 23 24 25 ___________________________________ Gloria M. Navarro, Chief Judge United States District Judge Page 12 of 12

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