Capital One, National Association v. SFR Investments Pool 1, LLC et al

Filing 249

ORDER granting 248 MOTION to Extend Time (Fourth Request) to Extend Dispositive Motion Deadline re 238 Order. Motions due by 6/29/2020. Signed by Magistrate Judge Nancy J. Koppe on 4/13/2020. (Copies have been distributed pursuant to the NEF - DRS)

1

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

2
3
4
5
6

E. CARMEN RAMIREZ
Trial Attorney, Tax Division
U.S. Department of Justice
P.O. Box 683
Washington, D.C. 20044
T: [phone]
F: [phone]
[e-mail]
[e-mail]

7
8

Of Counsel
NICHOLAS A. TRUTANICH
United States Attorney

9
Attorneys for the United States of America
10
11

IN THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF NEVADA

12
13
14
15
16
17
18
19
20
21
22
23
24
25

)
)
)
)
)
Plaintiff,
)
)
v.
)
)
)
SFR INVESTMENTS POOL 1, LLC, a
)
Nevada limited liability company; and
ANTHEM COUNTRY CLUB COMMUNITY, )
)
ASSOCIATION, a Nevada nonprofit
)
corporation,
)
)
Defendants.
_______________________________________ )
)
)
SFR INVESTMENTS POOL 1, LLC, a
)
Nevada limited liability company,
)
)
Counterclaimant/Crossclaimant,
)
)
v.
)
CAPITAL ONE, NATIONAL
ASSOCIATION, a national banking
association,

Case No. 2:17-cv-00604-RFB-NJK
consolidated with
Case No. 2:17-cv-00916-KJD-NJK
STIPULATED MOTION TO
EXTEND DISPOSITIVE MOTION
DEADLINE AND ORDER
(FOURTH REQUEST UNDER
CURRENT SCHEDULING ORDER)

1
2

CAPITAL ONE, NATIONAL
ASSOCIATION, a national banking
Association; LEON BENZER, an individual;
UNITED STATES OF AMERICA

3
4

Cross-Defendants,
Counter-Defendants.

5
_______________________________________
6
UNITED STATES OF AMERICA,
7
Plaintiff,
8
v.
9
10
11
12
13

LEON BENZER;
SFR INVESTMENTS POOL 1, LLC;
CAPITAL ONE, N.A.; ROCKTOP
PARTNERS, LLC; WILMINGTON SAVINGS
FUND SOCIETY, FSB, AS TRUSTEE OF
STANWICH MORTGAGE LOAN TRUST A;
ANTHEM COUNTRY CLUB
COMMUNITY ASSOCIATION; and
REPUBLIC SILVER STATE DISPOSAL INC.,

14
15
16

Defendants.
_______________________________________
CAPITAL ONE, NATIONAL ASSOCIATION
a national banking association,

17
Counter-Claimant/Cross-Claimant,
18
v.
19
20
21
22
23
24
25

UNITED STATES OF AMERICA;
LEON BENZER, an individual;
SFR INVESTMENTS POOL 1, LLC,
a Nevada limited liability company; and
ANTHEM COUNTRY CLUB
ASSOCIATION, a Nevada corporation,
Counter-Defendant/Cross-Defendants.
_______________________________________

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

1

The United States of America; Rocktop Partners, LLC (“Rocktop”); Wilmington Savings

2

Fund Society, FSB, as Trustee of Stanwich Mortgage Loan Trust A (“Wilmington”); SFR

3

Investments Pool 1, LLC (“SFR”); and Anthem Country Club Community Association

4

(“Anthem”) (collectively, the “Parties”) hereby stipulate to extend the dispositive motion

5

deadline in this matter by 60 days, from April 30, 2020 to June 29, 2020.

6
7

MEMORANDUM IN SUPPORT
1.

This consolidated proceeding concerns competing claims to the same piece of real

8

property. The Parties reached this stipulation and request the Court’s approval for two primary

9

reasons. First, the Parties have reached a tentative agreement to resolve an ongoing discovery

10

dispute by conducting a deposition of Capital One, National Association (“Capital One”). The

11

United States has issued a subpoena and has made contact with Capital One. However, the

12

Parties likely cannot complete the deposition in sufficient time to meet the current deadline,

13

particularly in light of business and work disruptions related to the Covid-19 pandemic.

14
15

2.

Second, there is a potential need to amend the United States’ operative pleading to

include a new party. It is unlikely this issue can be resolved in advance of the current deadline.

16
17

Background
3.

From March 2018 to May 2019, these consolidated cases were stayed while the

18

Court awaited certain case law developments and while the Parties conducted a settlement

19

conference. (ECF Nos. 87-88, 91, 109-110, 127, & 136-138). Ultimately, settlement

20

negotiations were unsuccessful.

21

4.

On May 24, 2019, the Court entered a new scheduling order that set a discovery

22

cutoff of August 22, 2019, a dispositive motion deadline of September 23, 2019, and a pretrial

23

order deadline of October 23, 2019. (ECF No. 144).

24
25

5.

On August 19, 2019, Capital One, SFR, Anthem, and the United States filed a

Stipulation to Extend Discovery Cutoff, Dispositive Motion Deadline, and Pretrial Order
1

1

Deadline. (ECF No. 162). The Court partially granted the stipulation by extending the

2

dispositive motion deadline to December 23, 2019 to help resolve scheduling difficulties with the

3

deposition of a Rule 30(b)(6) witness of Capital One. (ECF No. 169).

4

6.

Capital One made claims to the property based on two deeds of trust on the

5

property at issue. At a hearing on October 21, 2019, the Court ordered that Rocktop and

6

Wilmington be joined as parties because Capital One had transferred its interest in one deed of

7

trust to Rocktop and its interest in the other deed of trust to Wilmington. (ECF No. 214). On

8

January 6, 2020, Capital One moved to substitute Rocktop and Wilmington for Capital One.

9

(ECF No. 232). SFR and the United States oppose. (ECF Nos. 233 and 234). The motion is

10

pending.

11

7.

On November 25, 2019, the Rule 30(b)(6) deposition of Capital One was held.

12

The witness was an employee of Carrington Mortgage Services, LLC, an entity that provides

13

loan servicing. During the deposition, a dispute arose as to whether the witness was prepared to

14

testify about certain topics in the deposition notices issued by SFR and the United States.

15

8.

To allow the Parties time to hold a second deposition, the Parties requested and

16

obtained a further extension of the dispositive motion deadline to February 28, 2020. (ECF Nos.

17

230-231).

18

9.

The second deposition was held on January 15, 2020. The witness was an

19

employee of Rocktop. During and after the deposition, a dispute arose as to various issues,

20

including (1) whether the witness was adequately prepared to testify about certain policies and

21

procedures of Capital One; (2) whether the witness was adequately prepared to testify about

22

certain entries in Capital One’s servicing records; (3) whether the desired testimony was relevant

23

and proportional to the needs of the case; and (4) the degree to which the parties had previously

24

communicated or reached agreement on these issues.

25
2

1
2

10.

motion deadline until April 30, 2020, while they negotiated these issues. (ECF No. 238).

3
4

The Court approved a stipulation among the parties to extend the dispositive

The New Proposed Deposition and Scheduling Issues
11.

The parties continued to meet and confer. They discussed whether deposing a

5

witness from Capital One would help resolve the disputes concerning the Rule 30(b)(6)

6

depositions of witnesses from Rocktop and Carrington. To move forward, and without intending

7

to waive any substantive rights, the Parties agreed to submit a stipulation for the Court’s

8

approval to allow the United States to contact Capital One directly pursuant to Nevada Rule of

9

Professional Conduct 4.2, and to issue a subpoena directly to Capital One. (ECF No. 245).

10

12.

The Court approved the stipulation on March 10, 2020. (ECF No. 246).

11

13.

The United States subsequently issued a subpoena to Capital One for a deposition

12

on April 15, 2020. The United States did not propose an earlier date because of the uncertainty

13

posed by the Covid-19 situation, and because it believed that Capital One would reasonably ask

14

for time to prepare a witness. Counsel for the United States has spoken with an in-house

15

attorney for Capital One. Capital One appears willing to cooperate, but counsel did not believe

16

the witness could be available and prepared by April 15.

17

14.

During a recent meet and confer, the Parties expressed concerns that if the

18

deposition did not happen until April 15 or after, it would be too close to the April 30 dispositive

19

motions deadline to be practical, especially if there are delays in obtaining a transcript, or

20

technical difficulties in arranging a web-based deposition with multiple parties. (In light of the

21

Covid-19 pandemic, the Parties anticipate that the deposition will occur by video or internet

22

conference.) Further, Rocktop and Wilmington intend to move for a protective order to

23

eliminate two subtopics contained in the subpoena to Capital One. The Parties have discussed

24

scheduling the deposition during the week of May 4, 2020, assuming the Court approves this

25
3

1

stipulation, and subject to the resolution of Rocktop and Wilmington’s motion for a protective

2

order.

3
4

The Potential New Party
15.

The United States brought the second of these two consolidated cases to foreclose

5

federal tax liens on the property in dispute. Under the applicable statute, 26 U.S.C. § 7403(a),

6

the United States is required to name other persons who may claim an interest in the property as

7

defendants, so that their claims may be adjudicated and, if appropriate, their claims satisfied

8

from the sales proceeds.

9

16.

The United States typically obtains a title report on disputed property to check for

10

other potential lienholders at the start of litigation, and did so here. However, because the

11

litigation has been pending for over three years, the United States recently obtained an updated

12

title report in mid-February of 2020. In reviewing the report in preparation for dispositive

13

motions, counsel determined that an entity it had not previously named appeared to have filed a

14

lien on the property at issue in 2018, after the litigation was well under way and after the United

15

States filed a lis pendens notice.

16

17.

In an abundance of caution, the United States contacted the counsel that had filed

17

the lien on the property. The lienholder’s attorney acknowledged receipt of the message, and

18

replied that he would discuss the matter with his client. The United States does not know yet

19

whether the potential lienholder will wish to assert a claim to the proceeds, to sign a disclaimer,

20

or take other action.

21

18.

Without waiving any rights to object to any new claims on the merits, the other

22

Parties agreed they would not object to an extension of time to allow the United States to further

23

investigate the new claim. The United States informed the other parties that it may be

24

appropriate to seek leave to amend the operative complaint to name the new claimant.

25
4

1

Request for Relief
19.

2

Good cause exists for the requested 60-day extension. It will allow the Parties to

3

conduct a deposition of Capital One (assuming the resolution of Rocktop and Wilmington’s

4

anticipated motion for a protective order), which should help reduce disputes about the adequacy

5

of the prior depositions. It will also allow the United States to investigate the new potential

6

claimant, without cutting out a potentially legitimate claim.

7

//

8

//

9

//

10

//

11

//

12

//

13

//

14

//

15

//

16

//

17

//

18

//

19

//

20

//

21

//

22

//

23

//

24

//

25
5

1

WHEREFORE, the parties jointly seek the Court’s authorization approval to extend the

2

dispositive motions deadline from April 30, 2020, to June 29, 2020.

3

DATED this 10th day of April, 2020.

4

BALLARD SPAHR LLP

KIM GILBERT EBRON

5

By: /s/ Matthew Lamb
Abran E. Vigil
Nevada Bar No. 7548
1980 Festival Plaza Drive, Suite 900
Las Vegas, Nevada 89135

By: /s/ Diana Ebron
Diana S. Ebron
Nevada Bar No. 10580
Jacqueline Gilbert
Nevada Bar No. 10593
Karen L. Hanks
Nevada Bar No. 9578
7625 Dean Martin Drive, Ste. 110
Las Vegas, Nevada 89139

6
7
8
9
10
11
12
13
14
15
16
17

Matthew D. Lamb
Nevada Bar No. 12991
1909 K Street NW, 12th Floor
Washington, D.C. 20006
Attorneys for Capital One, National
Association; Rocktop Partners, LLC; and
Wilmington Savings Fund Society, FSB,
as Trustee of Stanwich Mortgage Loan
Trust A

Attorneys for SFR Investments Pool 1,
LLC

LIPSON, NEILSON, COLE, SELTZER & GARIN,
P.C.

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

By: /s/ Janeen Isaacson
J. William Ebert
Nevada Bar No. 2697
Janeen V. Isaacson
Nevada Bar No. 6429
9900 Covington Cross Dr., Ste. 120
Las Vegas, Nevada 89144

By: /s/ E. Carmen Ramirez
E. Carmen Ramirez
Trial Attorney, Tax Division
U.S. Department of Justice
P.O. Box 683
Washington, DC 20044

Attorneys for Anthem Country Club
Community Association

Attorneys for United States

18
19

IT IS SO ORDERED:

20
21
22
23

_______________________________________
UNITED STATES MAGISTRATE JUDGE
DATED: April 13, 2020

24
25
6