LN Management LLC Series 2543 Citrus Garden v. Gelgotas et al

Filing 19

ORDER granting 15 Stipulation to Entry of Order. Signed by Judge Miranda M. Du on 2/17/2015. (Copies have been distributed pursuant to the NEF - DC)

Case 2:15-cv-00112-MMD-CWH Document 15 Filed 02/13/15 Page 1 of 3

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Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
FENNEMORE CRAIG, P.C.
300 E. Second St., Suite 1510
Reno, Nevada 89501
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]
(Pro Hac Vice to be submitted)
Asim Varma, Esq.
Howard N. Cayne, Esq.
Michael A.F. Johnson, Esq.
ARNOLD & PORTER LLP
555 12th Street NW
Washington, DC 20004
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]; [e-mail];
Attorneys for Proposed Intervenor Federal Housing Finance Agency
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

LN MANAGEMENT LLC SERIES 2543
CITRUS GARDEN,
Plaintiff,
v.
MARCELLE GELGOTAS, an individual;
MICHELLE ROCK, an individual; MARK
ROCK, an individual; FEDERAL NATIONAL
MORTGAGE ASSOCIATION; CITRUS
GARDENS HOMEOWNERS
ASSOCIATION, a Nevada Non-Profit
Corporation; DOES 1 through 10, inclusive,
Defendants.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Counterclaimant,
v.
LN MANAGEMENT LLC SERIES 2543
CITRUS GARDEN, a Nevada LLC; GREEN
VALLEY RANCH COMMUNITY
ASSOCIATION, INC., a Nevada non-profit
corporation; DOES 1 through 10, inclusive;
ROES Business Entities 1 through 10,
inclusive,
Counter-Defendants.

CASE NO. 2:15-cv-00112-MMD-CWH
STIPULATION TO ENTRY OF ORDER
AND PROPOSED ORDER PERMITTING
FEDERAL HOUSING FINANCE
AGENCY TO INTERVENE AS
CONSERVATOR OF THE FEDERAL
NATIONAL MORTGAGE ASSOCIATION

Case 2:15-cv-00112-MMD-CWH Document 15 Filed 02/13/15 Page 2 of 3

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1.

The Federal Housing Finance Agency (“FHFA” or “Conservator”), as

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Conservator for Defendant Federal National Mortgage Association (“Fannie Mae”), seeks to

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intervene in the above-captioned action pursuant to 12 U.S.C. § 4617(b)(2)(A)(i) and Fed. R.

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Civ. P. 24.

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2.

On September 6, 2008, FHFA’s Director appointed the FHFA Conservator of

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Fannie Mae and the Federal Home Loan Mortgage Corporation in accordance with the Housing

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and Economic Recovery Act of 2008, Pub. L. 110-289, 122 Stat. 2654 (codified at 12 U.S.C.

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§ 4617) (“HERA”), and the Federal Housing Enterprises Financial Safety and Soundness Act of

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1992 (12 U.S.C. § 4501, et. seq.).

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3.

The FHFA, as Conservator, has succeeded to “all rights, titles, powers, and

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privileges” of Fannie Mae, including its right to sue and be sued in the federal courts. See

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12 U.S.C. § 4617(b)(2)(A)(i).

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4.

Accordingly, FHFA has an unconditional federal statutory right to intervene in

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this matter, see Fed. R. Civ. P. 24(a)(1), and to assert its interests in a manner consistent with the

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Conservator’s powers and duties.

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5.

Pursuant to Fed. R. Civ. P. 24(c), FHFA attaches as Exhibit A its intended

Answer.

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STIPULATION

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FHFA and Plaintiff LN Management LLC Series 2543 Citrus Garden, through their

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attorneys of record, hereby stipulate and request that the Court make this stipulation an order of

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the Court:
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///

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///

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///

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///

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///

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

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Case 2:15-cv-00112-MMD-CWH Document 15 Filed 02/13/15 Page 3 of 3

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The FHFA shall be permitted to intervene in the above-referenced action pursuant to 12
U.S.C. § 4617(b)(2)(A)(i) and Fed. R. Civ. P. 24.
DATED this 13th day of February, 2015.

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By: /s/ Kerry Faughman
FENNEMORE CRAIG, P.C.
Kerry Faughman, Esq.
By:
/s/ Leslie Bryan Hart
Nevada Bar No. 12204
P.O.Box 335361
Leslie Bryan Hart, Esq. (SBN 4932)
North Las Vegas, NV 89086
John D. Tennert, Esq. (SBN 11728)
Tel. [phone]
300 E. Second St., Suite 1510
Fax. [phone]
Reno, Nevada 89501
Attorneys for Plaintiff LN Management LLC
Tel: [phone] Fax: [phone]
Series 2543 Citrus Garden
[e-mail]; [e-mail]

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and
By: /s/ Colt B. Dodrill
Colt B. Dodrill, Esq.
Nevada Bar No. 9000
WOLFE & WYMAN LLP
980 Kelly Johnson Drive, Ste 140
Las Vegas, Nevada 89119
Tel: [phone]
Fax: [phone]
[e-mail]
Attorneys for Federal National Mortgage
Association

(Pro Hac Vice to be submitted)
ARNOLD & PORTER LLP
Asim Varma, Esq.
Howard N. Cayne, Esq.
Michael A.F. Johnson, Esq.
555 12th Street NW
Washington, DC 20004
Tel:[phone]Fax: [phone]
[e-mail];
[e-mail];
[e-mail];

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Attorneys for Proposed Intervenor Federal
Housing Financing Agency

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ORDER
IT IS SO ORDERED.

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_______________________________________
UNITED STATES DISTRICT COURT JUDGE

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February 17, 2018
DATED: ______________________________

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10061370.1/038236.0001

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 1 of 10

Exhibit A

Exhibit A

Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 2 of 10

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Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
FENNEMORE CRAIG, P.C.
300 E. Second St., Suite 1510
Reno, Nevada 89501
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]
(Pro Hac Vice to be submitted)
Asim Varma, Esq.
Howard N. Cayne, Esq.
Michael A.F. Johnson, Esq.
ARNOLD & PORTER LLP
555 12th Street NW
Washington, DC 20004
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]; [e-mail];
Attorneys for Proposed Intervenor Federal Housing Finance Agency
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

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LN MANAGEMENT LLC SERIES 2543
CITRUS GARDEN
Plaintiff,
vs.
MARCELLE GELGOTAS; MICHELLE
ROCK; MARK ROCK; FEDERAL
NATIONAL MORTGAGE ASSOCIATION;
CITRUS GARDENS HOMEOWNERS
ASSOCIATION; and DOES 1 through 10,
inclusive,
Defendants.
FEDERAL NATIONAL MORTGAGE
ASSOCIATION,
Counterclaimant,

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vs.
LN MANAGEMENT LLC SERIES 2543
CITRUS GARDEN; GREEN VALLEY
RANCH COMMUNITY ASSOCIATION,
INC.; DOES 1 through 10, inclusive; ROES
Business Entities 1 through 10, inclusive,
Counter-Defendants.

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

CASE NO. 2:15-cv-00112-MMD-CWH
ANSWER AND COUNTERCLAIMS BY
PROPOSED INTERVENOR THE
FEDERAL HOUSING FINANCE
AGENCY AS CONSERVATOR FOR THE
FEDERAL NATIONAL MORTGAGE
ASSOCIATION

Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 3 of 10

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Simultaneously with this Answer, the Federal Housing Finance Agency (“FHFA”), in its

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capacity as Conservator for the Federal National Mortgage Association (“Fannie Mae”), is filing,

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along with the other parties to this action, a joint stipulation that FHFA be permitted to intervene

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in this action pursuant to Federal Rule of Civil Procedure 24. In accordance with Rule 24(c)’s
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requirement that a motion to intervene “be accompanied by a pleading that sets out the claim or

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defense for which intervention is sought, FHFA submits this Answer to respond as follows to the

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Complaint filed by Plaintiff LN Management LLC Series 2543 Citrus Garden (“Plaintiff”).

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PARTIES, JURISDICTION AND VENUE
1.

FHFA admits the allegations of Paragraph 1 of the Complaint.

2.

FHFA is without knowledge as to the allegations of Paragraph 2 of the

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Complaint, and on that basis denies them.
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3.

FHFA is without knowledge as to the allegations of Paragraph 3 of the Complaint,

and on that basis denies them.
4.

FHFA is without knowledge as to the allegations of Paragraph 4 of the Complaint,

and on that basis denies them.
5.

FHFA is without knowledge as to the allegations of Paragraph 6 of the Complaint,

and on that basis denies them.

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6.

FHFA denies the allegations of Paragraph 6 of the Complaint.

7.

FHFA admits the allegations of Paragraph 7 of the Complaint.

8.

FHFA is without knowledge as to the allegations of Paragraph 8 of the Complaint,

and on that basis denies them.

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GENERAL ALLEGATIONS
9.

The allegations of Paragraph 7 of the Complaint constitute a conclusion of law as

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to which no response is required. To the extent a response is required, FHFA denies them.
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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 4 of 10

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10.

In answering Paragraph 10 of the Complaint, FHFA admits only that the

referenced deed was recorded in the official records of the Clark County Recorder’s Office as
book and instrument number 201308210000280 and that the referenced deed speaks for itself.

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FHFA denies the remainder of the allegations of Paragraph 10 of the Complaint.
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11.

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In answering Paragraph 11 of the Complaint, FHFA admits only that Defendant

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Fannie Mae has had, and continues to have, an interest in the Property. FHFA specifically

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denies that Fannie Mae’s interest in the Property was extinguished. FHFA is without knowledge

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as the remainder of the allegations contained in Paragraph 11 of the Complaint and therefore

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denies them.

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12.

FHFA denies the allegations of Paragraph 12 of the Complaint.

13.

FHFA is without knowledge as to the allegations of Paragraph 13 of the

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Complaint, and on that basis denies them.
FIRST CLAIM FOR RELIEF
(Quiet Title)

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14.

FHFA repeats its responses to Paragraphs 1 through 13 above, as if fully stated

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15.

FHFA denies the allegations of Paragraph 15 of the Complaint.

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16.

FHFA denies the allegations of Paragraph 16 of the Complaint.

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17.

FHFA denies the allegations of Paragraph 17 of the Complaint.

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In answering Paragraph 18 of the Complaint, FHFA admits only that Fannie

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herein.

Mae’s lien was not extinguished. The remainder of the allegations of Paragraph 18 constitute a

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conclusion of law to which no response is required. To the extent a response to the allegations is
required, FHFA denies them.

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 5 of 10

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SECOND CLAIM FOR RELIEF
(Declaratory Relief)

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19.

FHFA repeats its responses to Paragraphs 1 through 18 above, as if fully stated

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20.

FHFA denies the allegations in Paragraph 20 of the Complaint.

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21.

In answering Paragraph 21 of the Complaint, FHFA admits only that Fannie

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herein.

Mae’s lien was not extinguished. The remainder of the allegations of Paragraph 21 constitute a

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conclusion of law to which no response is required. To the extent a response to the allegations is
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required, FHFA denies them.
AFFIRMATIVE DEFENSES

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FHFA’s investigation of these claims is continuing. By this Answer, FHFA waives no

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affirmative defenses and reserves its right to amend the Answer to insert any subsequently

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discovered affirmative defenses.

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FIRST AFFIRMATIVE DEFENSE

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The Complaint fails to state a claim for which relief can be granted because, among other
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reasons, Plaintiff’s claim of free and clear title to the Property is barred by 12 U.S.C.

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§ 4617(j)(3), which precludes an HOA sale from extinguishing Fannie Mae’s interest in the

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Property and preempts any state law to the contrary.

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SECOND AFFIRMATIVE DEFENSE
Plaintiff’s claims are barred by the doctrines of laches, estoppel, waiver, unjust
enrichment, and/or unclean hands.

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THIRD AFFIRMATIVE DEFENSE

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The damages, if any, that were allegedly sustained by Plaintiff as a result of the acts
described in the Complaint were caused in whole or were contributed to in part by reason of the

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 6 of 10

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acts, omissions, negligence, and/or intentional misconduct of Plaintiff and counter-defendant

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Green Valley Ranch Community Association (the “HOA”)

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FOURTH AFFIRMATIVE DEFENSE

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The damages, if any, that were allegedly sustained by Plaintiff as a result of the acts
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described in the Complaint were caused in whole or were contributed to in part by reason of the

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acts, omissions, negligence, and/or intentional misconduct of one or more third parties over

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whom neither FHFA nor Fannie Mae had control.

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FIFTH AFFIRMATIVE DEFENSE
Plaintiff has an adequate remedy at law and has, through its own acts and/or omissions,
failed to mitigate its damages, the existence of which are denied.

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SIXTH AFFIRMATIVE DEFENSE
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Plaintiff has failed to plead any alleged acts or omissions of FHFA or Fannie Mae

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sufficient to warrant the consideration of general, expectation, consequential, or compensatory

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damages.

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SEVENTH AFFIRMATIVE DEFENSE
Plaintiff is not entitled to equitable relief.

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EIGHTH AFFIRMATIVE DEFENSE

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Plaintiff failed to join one or more indispensable parties.
NINTH AFFIRMATIVE DEFENSE

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FHFA and Fannie Mae breached no duty with regard to Plaintiff.

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TEN AFFIRMATIVE DEFENSE
FHFA incorporates by reference those defenses enumerated in Rules 8 and 12 of the
Nevada Rules of Civil Procedure as if fully set forth herein. In the event further investigation

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 7 of 10

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reveals the applicability of any such defenses, FHFA reserves the right to seek leave of court to

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amend this Answer to assert the same.

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COUNTERCLAIMS

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FIRST COUNTERCLAIM
(Declaratory Judgment versus Plaintiff
and Green Valley Ranch Community Association (the “HOA”))

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1.

FHFA incorporates by reference the responses of all previous paragraphs, as if

fully set forth herein.
2.

Pursuant to 28 U.S.C. § 2201 and NRS § 40.010, this Court has the power and

authority to declare FHFA and Fannie Mae’s rights and interests in the Property.
3.

Fannie Mae has a property interest in the Property through its interest in the Deed

of Trust.

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4.

The Federal Housing Finance Agency (“FHFA” or the “Conservator”) is an

agency of the federal government of the United States of America and is also the Conservator for
Fannie Mae.
5.

The Conservator has succeeded by law to all of Fannie Mae’s “rights, titles,

powers, and privileges.” 12 U.S.C. § 4617(b)(2)(A)(i).
6.

During the Conservatorship, “[n]o property of [FHFA] shall be subject to levy,

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attachment, garnishment, foreclosure, or sale without the consent of the [FHFA], nor shall any
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involuntary lien attach to the property of [FHFA].” 12 U.S.C. § 4617(j)(3).
7.

Fannie Mae’s property interest at issue is property of the Conservator. Therefore,

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applying NRS Chapter 116 or other state law in a manner that extinguishes Fannie Mae’s interest

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in the Property would violate 12 U.S.C. § 4617(j)(3).

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 8 of 10

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8.

12 U.S.C. § 4617(j)(3) preempts any state law that would permit a foreclosure on

a superpriority lien to extinguish a property interest of Fannie Mae while it is under FHFA’s
conservatorship.

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9.

Pursuant to 12 U.S.C. § 4617(j)(3), the HOA Sale could not extinguish Fannie

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Mae’s interest in the Deed of Trust.
10.

FHFA and Fannie Mae are entitled to a declaration from this Court, pursuant to

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28 U.S.C. § 2201 and NRS § 40.010, that Fannie Mae has an interest in a first position Deed of

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Trust which still encumbers the Property after the HOA Sale.

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11.

FHFA and Fannie Mae are entitled to a determination from this Court, pursuant to

28 U.S.C. § 2201 and NRS § 40.010, that 12 U.S.C. § 4617(j)(3) precludes the HOA Sale from

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extinguishing Fannie Mae’s property interest.
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SECOND COUNTERCLAIM
(Quiet Title versus Plaintiff)

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1.

FHFA incorporates by reference the responses of all previous paragraphs, as if

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fully set forth herein.
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2.

Pursuant to 28 U.S.C. § 2201 and NRS § 40.010, this Court has the power and

authority to resolve the Plaintiff’s adverse claims in the Property.
3.

Fannie Mae has a property interest in the Property through its interest in the Deed

of Trust.
4.

Plaintiff claims an interest in the Property through a foreclosure deed that is

adverse to Fannie Mae’s interest.

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5.

Fannie Mae’s interest in the Deed of Trust encumbering the Property constitutes

an interest in real property.

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 9 of 10

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6.

Fannie Mae’s property interest at issue is property of the Conservator. Therefore,

applying NRS Chapter 116 or other state law in a manner that extinguishes Fannie Mae’s interest
in the Property would violate 12 U.S.C. § 4617(j)(3).

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7.

Based on the adverse claims being asserted by the parties, FHFA and Fannie Mae

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are entitled to a judicial determination regarding the rights and interests of the respective parties
to the case.
8.

FHFA and Fannie Mae are entitled to a determination from this Court, pursuant to

28 U.S.C. § 2201 and NRS § 40.010, that Fannie Mae has an interest in a first position Deed of
Trust which encumbers the Property after the HOA Sale.
9.

FHFA and Fannie Mae are entitled to a determination from this Court, pursuant to

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28 U.S.C. § 2201 and NRS § 40.010, that Fannie Mae’s property interest by virtue of the Deed of
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Trust is superior to the interest, if any, acquired by Plaintiff through the foreclosure deed.
PRAYER FOR RELIEF

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WHEREFORE, FHFA prays for the following relief:

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1.

That Plaintiff’s request for injunctive relief be denied;

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That Plaintiff’s request for declaratory relief be denied;

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That Plaintiff takes nothing by way of his Complaint;

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That the Court declare that 12 U.S.C. § 4617(j)(3) preempts any Nevada law that

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would permit a foreclosure on a superpriority lien to extinguish a property interest of Fannie Mae
while it is under FHFA’s conservatorship;
5.

That the Court declare that the HOA Sale did not extinguish the Deed of Trust

and thus did not convey the Property free and clear to Plaintiff;
6.

That the Court declare that Fannie Mae’s property interest is superior to the

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interest, if any, of Plaintiff;
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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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Case 2:15-cv-00112-MMD-CWH Document 15-1 Filed 02/13/15 Page 10 of 10

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7.

That FHFA be awarded reasonable attorneys’ fees and costs; and

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That FHFA receive such other relief as the Court deems just and proper.

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DATED this _____ day of February, 2015.

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FENNEMORE CRAIG, P.C.

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By:
Leslie Bryan Hart, Esq. (SBN 4932)
John D. Tennert, Esq. (SBN 11728)
300 E. Second St., Suite 1510
Reno, Nevada 89501
Tel: [phone] Fax: [phone]
[e-mail]; [e-mail]

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and

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(Pro Hac Vice to be submitted)
ARNOLD & PORTER LLP
Asim Varma, Esq.
Howard N. Cayne, Esq.
Michael A.F. Johnson, Esq.
555 12th Street NW
Washington, DC 20004
Tel: [phone] Fax: [phone]
[e-mail];
[e-mail];
[e-mail];

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Attorneys for Proposed Intervenor Federal Housing
Financing Agency

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FENNEMORE CRAIG, P.C.
300 E. SECOND ST.
SUITE 1510
RENO, NEVADA 89501
[phone]

10031111.1/038236.0001

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