The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge
ORDER ON MOTION TO DISMISS, OR IN THE ALTERNATIVE, TO STAY THE PROCEEDINGS (Doc. 10)
PRELIMINARY STATEMENT TO PARTIES AND COUNSEL
Judges in the Eastern District of California carry the heaviest caseloads in the nation, and this Court is unable to devote inordinate time and resources to individual cases and matters. Given the shortage of district judges and staff, this Court addresses only the arguments, evidence, and matters necessary to reach the decision in this order. The parties and counsel are encouraged to contact the offices of United States Senators Diane Feinstein and Barbara Boxer to address this Court's inability to accommodate the parties and this action. The parties are required to reconsider consent to conduct all further proceedings before a Magistrate Judge, whose schedules are far more realistic and accommodating to parties than that of U.S. District Judge Lawrence J. O'Neill, who must prioritize criminal and older civil cases.
Civil trials set before Judge O'Neill trail until he becomes available and are subject to suspension mid-trial to accommodate criminal matters. Civil trials are no longer reset to a later date if Judge O'Neill is unavailable on the original date set for trial. Moreover, this Court's Fresno Division randomly and without advance notice reassigns civil actions to U.S. District Judges throughout the nation to serve as visiting judges. In the absence of Magistrate Judge consent, this action is subject to reassignment to a U.S. District Judge from outside the Eastern District of California.
On February 28, 2013, Plaintiff LBUBS 2004-C6 Stockdale Office Limited Partnership ("LBUBS") brought this action to obtain judgment for the amount of deficiency on a loan guaranteed by Defendants Terry L. Moreland and Peggy J. Moreland ("Morelands"). Before the Court is the Morelands' motion to dismiss or, in the alternative, to stay the action on the basis of the abstention doctrine as outlined in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817-21 (1976). As discussed further below, the Court DENIES the Morelands' motion to dismiss.
The current action represents the latest of four lawsuits based on the same loan.
On August 2, 2004, UBS Real Estate Investments ("UBS") made a $24 million securitized loan ("the loan") to Stockdale Tower I ("Stockdale Tower"). Doc. 1, ¶ 9. In connection with the loan, Stockdale Tower executed a deed of trust that encumbered its real property located in Bakersfield ("Bakersfield property"). Id. at ¶ 10. The Morelands were the sole members of Stockdale Tower and also entered into an indemnity and guaranty agreement with UBS. Id. at ¶ 12, Doc. 10, p. 13.
In August 2004, UBS transferred and assigned its interest in the loan to LaSalle Bank National Association ("LaSalle Bank"). Doc. 1, ¶ 18. In December 2009, LNR Partners, LLC ("LNR") became the special servicer for the loan to represent investors who had purchased an interest in securitized loans such as Stockdale Tower's loan. Doc. 10, p. 7. In May 2010, Bank of America, N. A., LaSalle Bank's successor by merger, transferred and assigned its interest in the loan to LBUBS. Doc. 1, ¶ 19. The Morelands allege that LBUBS is a wholly owned subsidiary of LNR. Doc. 10, pp. 8-9.
After several disputes among Stockdale Tower, the Morelands, and LNR, Stockdale Tower filed for Chapter 11 bankruptcy on November 7, 2011. Doc. 1, ¶ 23.
On May 23, 2012, LBUBS filed suit against the Morelands in this Court seeking a deficiency judgment on the loan based on the guaranty agreement. Doc. 10, p. 7. The Morelands also brought crossclaims against LBUBS and related entities.
On May 31, 2012, Stockdale Tower commenced an action in Kern County Superior Court against LBUBS and other entities for breach of contract and interference with prospective business advantage. Doc. 10, p. 8.
On September 11, 2012, the Morelands, Stockdale Tower, and LBUBS entered into a discounted payoff agreement ("DPO") whereby LBUBS agreed to accept $20 million as full repayment of the loan from Stockdale Tower by January 9, 2013. Doc. 1, Exh. 12. Under the DPO, the parties also agreed to dismiss any pending ...