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Nevada Supreme Court Hears Arguments October 1, 2012, on Retroactive Application of NRS 40.459

Posted by: on Thu, Nov 15, 2012

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Sandpointe Apartments., LLC vs. Dist. Ct. (CML-NV Sandpointe, LLC)

Docket No. 59507

Las Vegas – 10:00 a.m. – Full Court

This is an original petition for a writ of mandamus or prohibition challenging a district court order denying a motion for partial summary judgment and granting a countermotion for partial summary judgment in a deficiency action. In 2007, Silver State Bank loaned $5,135,000 to petitioner Sandpointe Apartments, LLC, for the construction of an apartment complex (the Loan). To obtain the Loan, Sandpointe executed a promissory note in favor of Silver State, secured by a deed of trust to certain real property, and petitioner Stacy Yahraus-Lewis personally guaranteed the Loan (the Guarantee). In 2008, Silver State failed, and the Federal Deposit Insurance Corporation (the FDIC) was appointed as receiver. In 2009, the Loan matured, and Sandpoint defaulted by failing to repay the Loan in full. In 2010, the FDIC transferred the interest in the Loan and the Guarantee to Multibank 2009-1 CML-ADC Venture, LLC. Multibank, in turn, transferred its interest therein to its wholly-owned subsidiary, real party interest CML-NV Sandpointe, LLC. In early 2011, CML-NV foreclosed on the collateral that secured the Loan. Subsequently, the Nevada Legislature passed Assembly Bill 273, which, broadly stated, implements a certain limitation on the amount of a deficiency judgment that can be recovered under NRS 40.459(1)(c). On June 10, 2011, Governor Sandoval signed Assembly Bill. 273 into law. On June 27, 2011, CML-NV filed a complaint in district court against Sandpointe and Yahraus-Lewis for deficiency judgment and breach of guaranty. Yahraus-Lewis thereafter moved for partial summary judgment, requesting the district court to apply the limitation contained in NRS 40.459(1)(c) to CML-NV’s action. CML-NV opposed the motion and filed a countermotion for partial summary judgment, arguing that the limitation in NRS 40.459(1)(c) cannot be applied. The district court denied Yahraus-Lewis’s motion and granted CML-NV’s countermotion, determining that applying NRS 40.459(1)(c) here would constitute retroactive application of the statute and that the language of NRS 40.459(1)(c) did not overcome the presumption against retroactivity. Sandpointe and Yahraus-Lewis now petition this court for a writ directing the district court to apply NRS 40.459(1)(c) and enter partial summary judgment in their favor. Issues: (1) Should this court entertain this petition? (2) Would applying NRS 40.459(1)(c) here constitute retroactive operation of the statute? (3) Can NRS 40.459(1)(c) be applied retroactively? (4) Is the underlying loan transfer within the purview of NRS 40.459(1)(c)? (5) Would retroactively applying NRS 40.459(1)(c) here violate the Contracts Clause? (6) Does federal law preempt the application of NRS 40.459(1)(c) to loans acquired from the FDIC? (Disclaimer: This synopsis is intended to provide only general information about this case before the Nevada Supreme Court. It is not intended to be all-inclusive or reflect all positions of the parties. To access the documents that have been filed in this matter, type the docket number into the court’s case search page: