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Wachovia Bank, National Association v. Winchester Properties

August 1, 2008

WACHOVIA BANK, NATIONAL ASSOCIATION, PLAINTIFF,
v.
WINCHESTER PROPERTIES, LLC, A DELAWARE LIMITED LIABILITY COMPANY; WINCHESTER COUNTRY CLUB, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY; CLINTON C. MYERS; CLINTON C. MYERS, AS THE TRUSTEE OF THE CLINTON CHARLES MYERS REVOCABLE TRUST DATED 03/07/89; MYERS HOMES OF CALIFORNIA, LLC, A NEVADA LIMITED LIABILITY COMPANY; MYERS HOMES, INC., A CALIFORNIA CORPORATION; SECURITY SAVINGS BANK; A NEVADA STATE BANK AND DOES 1 THROUGH 200, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Hon. John A. Mendez United States District Judge

STIPULATION REGARDING MODIFICATION OF STATUS ORDER, LIMITED DISCOVERY EXTENSION, AND ADDITIONAL TIME TO AMEND PLEADINGS TO CONFORM TO RECENT FACTUAL DEVELOPMENTS; ORDER

Complaint Filed: December 5, 2007 Honorable John A. Mendez Trial Date: December 8, 2008

Plaintiff Wachovia Bank, National Association ("Wachovia"), defendants Winchester Properties, LLC, Winchester Country Club, LLC, ("Borrower Defendants"), Clinton C. Myers, Clinton C. Myers as the Trustee of the Clinton Charles Myers Revocable Trust Dated 03/07/89, Myers Homes of California, LLC, Myers Homes, Inc. ("Guarantor Defendants"), and Security Savings Bank ("SSB") (all collectively, "Defendants"), the parties herein (collectively, the "Parties"), by and through their respective counsel, hereby enter into this "Stipulation Regarding Limited Discovery Extension and Amendment of Pleadings" with reference to the following:

RECITALS

A. This action relates to a loan that certain defendants received from Wachovia, which loan was secured by certain real estate (the "Real Property Security").

B. On December 5, 2007, Wachovia filed a complaint against Defendants, asserting claims for judicial foreclosure of the deeds of trust, specific performance of assignments of rents and appointment of receiver, injunctive relief, and breach of written guaranty. SSB was named by Wachovia as a junior lien holder.

C. Based on facts set forth in the Parties' Joint Status Report, on May 6, 2008 the Court entered a Status (Pre-Trial Scheduling) Order ("Status Order") setting certain time limits concerning disclosure of experts, amended pleadings, parties, and close of discovery. August 4 was one such date.

D. Separate from this action, Wachovia initiated non-judicial foreclosure proceedings. Those proceedings culminated in two "Trustee's Sales" on May 21, 2008, at which Winchester REO, LLC, as assignee of lenders for whom Wachovia serves as agent, acquired the Real Property Security through two opening credit bids totaling $25 million, which were partial credit bids of the unpaid debt.

E. The Parties agree that the non-judicial foreclosure moots certain claims in Wachovia's complaint, including particularly the claim for judicial foreclosure, and that other claims are likely to be affected, particularly after a receiver is discharged.

F. On May 7, 2008, by stipulation of the Parties, the Court entered an order appointing Douglas Wilson as Receiver over a portion of the Real Property Security then owned by Winchester Country Club LLC, primarily comprised of a golf course and clubhouse. The Receiver has, since May 21, 2008, been involved with various complex and ongoing transition issues as described when the Receiver filed its Initial Report with the Court in July. The Receiver has not yet submitted a final accounting report nor been discharged by the Court. Borrower Defendants wish to be dismissed as parties but also wish to retain the opportunity to review and comment upon the final accounting report prior to the Receiver's discharge.

G. On June 27, 2008, Wachovia served certain written discovery on Guarantor Defendants such that objections and responses are due on July 31, 2008.

H. On July 21-22, 2008, Wachovia took the depositions of (1) Linda Clifford, (2) Clinton C. Myers, and (3) Clinton W. Myers. In those depositions, testimony was given regarding various subjects, including among others allegations about opening credit bid amounts. I. Wachovia wishes to amend its complaint to adjust for events that have occurred since it filed its original complaint. For example, Wachovia intends to dismiss its claim for judicial foreclosure and to make other changes that derive from the non-judicial foreclosure, including, upon stipulation or motion and Court approval of discharge of the receiver, likely dismissal of related causes of action in support of the receivership which by stipulation or discharge should become unnecessary soon. The anticipated primary claim in the amended pleading is expected to be a modified version of the current fifth cause of action for breach of the Guaranty against four Guarantor Defendants.

J. The Parties have discussed and are continuing to discuss appropriate stipulations to provide for dismissal of certain claims and parties voluntarily under Rule 41(a), and for discharge of the Receiver subject to the final accounting and court approval under Rules 41 and 66. Plaintiff has circulated an initial draft proposed Amended Complaint which requires further discussion and is complicated by still-pending receivership issues. The Parties expect to reach accord, but if for any reason the Parties cannot reach accord, Wachovia wishes to file a motion for court approval to amend the pleadings, dismiss certain parties, and resolve any disputed terms in connection therewith.

K. As a result of recent deposition testimony, Guarantor Defendants wish to amend their answer in order to assert three additional defenses, concerning: (1) possible opening partial credit bid information and its effect, if any, upon the prices obtained at the two non-judicial foreclosure sales; (2) possible guarantor defenses based on California CCP ยง 580a; and (3) whether Wachovia should have agreed to alter release terms for ...


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