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Scenic Valley View, L.L.C. v. Ridgeway Holdings

May 24, 2010

SCENIC VALLEY VIEW, L.L.C., AN IDAHO LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
RIDGEWAY HOLDINGS, LLC, AN IDAHO LIMITED LIABILITY COMPANY; ESTATE OF GEORGE MCDANIEL RE: AND WENDY MCDANIEL, ITS PERSONAL REPRESENTATIVE, THE SUCCESSOR(S) TO GEORGE MCDANIEL, DECEASED, FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER FOR AMERICA WEST BANK, LC, DBA AMERICA WEST BANK, A UTAH LIMITED LIABILITY COMPANY. DEFENDANT.



The opinion of the court was delivered by: Honorable Candy W. Dale Chief United States Magistrate Judge

MEMORANDUM DECISION AND ORDER RE: MOTION FOR CONSOLIDATION (DKT. 6) INTERVENTION OR REPORT AND RECOMMENDATION MOTION FOR SUMMARY JUDGMENT (DKT. 21)

REPORT

On January 29, 2010, Plaintiff Scenic Valley View, LLC ("Plaintiff") filed a motion for summary judgment. (Docket No. 21.) On February 16, 2010, Defendants Ridgeway Holdings, LLC, the Estate of George Z. McDaniel, and the Federal Deposit Insurance Corporation as receiver for America West Bank, L.C. filed notices of non-opposition to the Plaintiffs motion for summary judgment. (Docket Nos. 24, 25.) Herbert Paschen ("Intervenor") also has filed a motion seeking intervention and/or consolidation of this matter with another case. (Docket No. 6.) Intervenor requested that his motion be ruled upon prior to the Court deciding the motion for summary judgment. (Docket No. 32.) Both matters are now ripe for review.

Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be aided significantly by oral argument, the motions will be decided on the record before this Court without oral argument. Dist. Idaho Loc. Civ. R. 7.1.

I. FACTS

There is no dispute as to the facts set forth in Plaintiff's Memorandum in Support of Summary Judgment. (Docket No. 21-1.) The Court will therefore only briefly set forth the facts here. Defendant Ridgeway, an Idaho Limited Liability Company managed by member Defendant McDaniel, purchased property in Bonneville County (the "Bonneville Property") and executed a promissory note secured by a mortgage, security agreement, assignment of leases, rents and profits and fixture filing dated May 13, 2005, in favor of Scenic Valley in the principal amount of $1,240,000. Defendant McDaniel executed a guaranty of the note and mortgage. Scenic Valley recorded its mortgage, and thereafter Defendant America West Bank recorded a second-position mortgage on a portion of the Bonneville Property.

Defendant Ridgeway defaulted on the mortgage, and Scenic Valley filed a complaint on December 4, 2008, seeking to foreclose its mortgage, in the District Court of the Seventh Judicial District of the state of Idaho, in and for the County of Bonneville, Case Number CV-2008-7561. On April 2, 2009, Scenic Valley filed a motion for judgment on the pleadings. Defendants did not oppose this motion. On May 11, 2009, The Honorable Joel E. Tingey entered an Order granting partial judgment on the pleadings providing that Plaintiff Scenic Valley's mortgage was paramount in time and superior in right to each of Defendants' claims against the real property and granting Plaintiff Scenic Valley the right to foreclose its mortgage once the balance due on the Note was determined. The state court order states, in relevant part:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:

The amount of the Indebtedness claimed by plaintiff Scenic Valley View, L.L.C. ("Scenic Valley") remains in dispute and shall be stipulated or adjudicated hereafter at trial or upon motion. As to all other allegations and prayers for relief, the Court hereby GRANTS Scenic Valley's Motion for Rule 12(c) Judgment on the Pleadings . . . .

On May 22, 2009, the FDIC moved to substitute itself as the receiver for America West Bank, which motion was granted on June 9, 2009, and a ninety-day stay imposed commencing June 10, 2009. On September 8, 2009, this suit was removed by the FDIC as receiver from Defendant America West Bank from the Idaho state court to this Court.

Intervenor Herbert Paschen filed his motion to intervene and/or consolidate on September 8, 2009. (Docket No. 6.) Intervenor asserts that the parties, facts and claims in this case (hereafter identified as "Case One," referred to as "Pending Case" by Intervenor) are the same as that in another case (hereafter identified as "Case Two," referred to as "Current Case" by Intervenor) and is related to Scenic Valley's foreclosure of its mortgage against the Bonneville Property. Intervenor represented that the case number of Case Two is CV 09-1954. Scenic Valley argued that Intervenor did not appropriately identify the federal case he wished to consolidate, yet identified the "state court filing" as Paschen v. Estate of George McDaniel, et. al., Case No. 09-1954 filed on or about April 9, 2009. (Opp. at 2, Docket No. 9.)

A cursory review of the Court's dockets reveal that Paschen v. Estate of George McDaniel, et. al., Bonneville County Case No. 09-1954, was removed to this Court on October 5, 2009, and was filed as Case No. CV 09-502-E-BLW. Pursuant to Fed. R. Evid. 201(b) and (c), the Court takes judicial notice of its own case files, and the record in Case Two, identified as Case No. CV 09-502-E-BLW.

While the two matters were pending in state court, Intervenor brought a motion in Case Two, which was before The Honorable Jon Shindurling, to consolidate Case Two with Case One, which was at that time before state District Judge Tingey. The Honorable Jon Shindurling heard Intervenor's motion to consolidate on April 27, 2009, and "declined to rule on the motion to consolidate," but held that "the parties are free to bring the matter before Judge Tingey in CV-2008-7561." (Minutes, Docket No. 1-9, Case No. CV 09-502-E-BLW.) Thereafter, Case One was removed to this Court, and Intervenor filed his motion on September 8, 2009, for consideration by the undersigned United States Magistrate Judge.

The basis for intervention and/or consolidation is better understood by reference to the Verified Complaint and proceedings in Case Two. (Docket No. 1-15, 23, Case No. CV 09-502-E-BLW.) According to the Complaint in Case Two, Intervenor and McDaniel formed Fox Creek holdings, LLC, for the purpose of investing in and developing real property. Fox Creek obtained a loan from America West to purchase property in Teton County, Idaho (the "Teton Property") in the principal amount of $3.5 million. Fox Creek executed a promissory note secured by a mortgage on the Teton Property in favor of America West, ...


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