Gonzales v. Desert Land, LLC et al
Filing
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ORDER denying as moot 175 Motion to Strike; directing Clerk to enter 142 Proposed Judgment effective 4/25/2013, nunc pro tunc, and close the case administratively. Signed by Judge Robert C. Jones on 10/20/2014. (Copies have been distributed pursuant to the NEF - KR)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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In re SPECIALTY TRUST, INC.,
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Debtor.
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________________________________________ )
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TOM GONZALES,
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Plaintiff,
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vs.
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DESERT LAND, LLC et al.,
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Defendants.
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3:11-cv-00613-RCJ-VPC
ORDER
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This bankruptcy removal case arises out of the alleged breach of a settlement agreement
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that was part of a confirmation plan in a Chapter 11 bankruptcy action. Pending before the Court
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is a Motion to Strike Jury Demand (ECF No. 175). For the reasons given herein, the Court
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denies the motion as moot, enters judgment nunc pro tunc, and closes the case. Neither the
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motion nor the response note that all claims in this case have been finally adjudicated and
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affirmed on appeal. The timing of the jury demand is moot.
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On December 7, 2000, Plaintiff Tom Gonzales loaned $41.5 million to Defendants Desert
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Land, LLC and Desert Oasis Apartments, LLC to finance their acquisition and/or development of
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land (“Parcel A”) in Las Vegas, Nevada. The loan was secured by a deed of trust. On May 31,
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2002, Desert Land and Desert Oasis Apartments, as well as Desert Ranch, LLC (collectively, the
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“Desert Entities”), each filed for bankruptcy, and I jointly administered those three bankruptcies
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while sitting as a bankruptcy judge. I confirmed the second amended plan, and the Confirmation
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Order included a finding that a settlement had been reached under which Gonzales would
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extinguish his note and reconvey his deed of trust, Gonzales and another party would convey
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their fractional interests in Parcel A to Desert Land so that Desert Land would own 100% of
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Parcel A, Gonzales would receive Desert Ranch’s 65% in interest in another property, and
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Gonzales would receive $10 million if Parcel A were sold or transferred after 90 days (the
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“Parcel Transfer Fee”). Gonzales appealed the Confirmation Order, and the Bankruptcy
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Appellate Panel affirmed, except as to a provision subordinating Gonzales’s interest in the Parcel
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Transfer Fee to up to $45 million in financing obtained by the Desert Entities.
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Gonzales sued Desert Land, Desert Oasis Apartments, Desert Oasis Investments, LLC,
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Specialty Trust, Specialty Strategic Financing Fund, LP, Eagle Mortgage Co., and Wells Fargo
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(as trustee for a mortgage-backed security) in state court for: (1) declaratory judgment that a
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transfer has occurred entitling hin to the Parcel Transfer Fee; (2) declaratory judgment that the
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lender Defendants knew of the bankruptcy proceedings and the requirement of the Parcel
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Transfer Fee; (3) breach of contract (for breach of the Confirmation Order); (4) breach of the
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implied covenant of good faith and fair dealing (same); (5) judicial foreclosure against Parcel A
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under Nevada law; and (6) injunctive relief. Defendants removed to the Bankruptcy Court. The
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Bankruptcy Court recommended moving to withdraw the reference because I had issued the
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underlying Confirmation Order while sitting as a bankruptcy judge. One or more parties so
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moved, and the Court granted the motion.
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The Court dismissed the second and fifth causes of action. The first, third, fourth, and
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sixth claims against the Desert Entities and Eagle Mortgage Co. remained at that stage, and the
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Court later granted Defendants’ counter-motion for summary judgment. Plaintiff asked the Court
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to reconsider and to clarify which, if any, of its claims remained, and Defendants asked the Court
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to certify its March 4, 2013 summary judgment order under Rule 54(b) and to enter judgment in
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their favor on all claims.
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On April 25, 2013, the Court denied the motion to reconsider, clarified that it had
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intended to rule on all claims, and certified the March 4, 2013 ruling as a final ruling on all
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claims for immediate appeal. Defendants submitted a proposed judgment. The Court never
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formally entered that proposed judgment, but the Court of Appeals accepted jurisdiction under 28
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U.S.C. § 1291. The Court of Appeals affirmed the judgment (and subsequent orders denying
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various requests for relief, which the Court of Appeals accepted jurisdiction to review under
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§ 1292(a)(1)). The mandate has issued. Defendants have asked the Court to strike the jury
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demand. The Court denies the motion as moot. The Court should have directed the Clerk to
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formally enter judgment and close the case when it certified the March 4, 2013 ruling as final for
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immediate appeal. The Court has adjudicated all claims in this case, the Court of Appeals has
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affirmed, and the mandate has issued.1
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CONCLUSION
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IT IS HEREBY ORDERED that the Motion to Strike Jury Demand (ECF No. 175) is
DENIED as moot.
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IT IS FURTHER ORDERED that the Clerk shall enter the Proposed Judgment (ECF No.
142) effective April 25, 2013, nunc pro tunc, and close the case administratively.
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IT IS SO ORDERED.
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Dated this 20th day of October, 2014.
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_____________________________________
ROBERT C. JONES
United States District Judge
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The related case, Gonzales v. Shotgun Nevada Investments, No. 2:13-cv-931, remains
open.
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