The Mafia Collection v. Gc-Global Capital C/W 64748 ( 2015 )

 defaulted on the loans, GC-Global and JVLV filed complaints, seeking,
among other relief, foreclosure on the collateral. While the case was
pending, Mafia acquired some of the notes that it guaranteed. Mafia then
filed a counterclaim/third-party claim against the collateral agent, Andrew
DeMaio, alleging unjust enrichment and breach of fiduciary duty. The
district court granted summary judgment in favor of GC-Global, JVLV,
and DeMaio (cumulatively "the respondents"), and awarded attorney fees
and costs as allegedly provided for in the parties' secured notes and
security agreement.
Mafia appeals, raising three principal arguments: (1) the
district court erred by ruling that Mafia's interests in the collateral
merged when it allegedly acquired some but fewer than all of the secured
notes, (2) the district court erred by dismissing as nonassignable its claim
for breach of fiduciary duty, and (3) the security agreement did not provide
for attorney fees and costs. Our review of the district court orders
granting summary judgment is de novo, Wood v. Safeway, Inc., 121 Nev.
724, 729, 121 P.3d 1026, 1029 (2005), and we reverse and remand.
I.
"Summary judgment is appropriate under NRCP 56 when the
pleadings, depositions, answers to interrogatories, admissions, and
affidavits, if any, that are properly before the court demonstrate that no
genuine issue of material fact exists, and the moving party is entitled to
judgment as a matter of law." Id. at 731, 121 P.3d at 1031. The record
assembled thus far does not establish as a matter of law that the merger
doctrine or Nevada's fraudulent transfer statute extinguished Mafia's
claims. We therefore reverse.
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At the outset, the respondents and district court mistake
Mafia's acquisition of 29 (or 31) 1 secured notes as an attempt to owe a debt
to itself when in fact Mafia is the nondebtor guarantor—not the debtor.
Thomas v. Valley Bank of Nev., 97 Nev. 320, 323, 629 P.2d 1205, 1207
(1981) ("[G]uarantors['] . . . obligations are wholly separate from the
principal obligation guaranteed."), overruled on other grounds by First
Interstate Bank of Nev. v. Shields, 102 Nev. 616, 730 P.2d 429 (1986). As a
nondebtor guarantor, Mafia did not owe a debt to the creditors from whom
it acquired the notes. Instead, when Mafia acquired the notes, it reduced
its liability as guarantor and "subrogated to the rights of the creditor." Id.
at 325, 629 P.2d at 1209. Mafia's subrogation to the rights of a creditor
did not, however, extinguish its independent duties as a guarantor to the
remaining creditors, including JVLV and GC-Global. 38A C.J.S. Guaranty
§ 106 (2008) ("A settlement by the guarantor of one default does not
discharge him or her from liability for another . ..."). Accordingly, Mafia
did not acquire all of the legal and equitable interests in the collateral
given that, at minimum, the collateral guaranteed the unsatisfied secured
notes from Murder, Inc. to JVLV and GC-Global, and as such, there could
be no merger. See Aladdin Heating Corp. v. Trustees of Cent. States, 93
Nev. 257, 261, 563 P.2d 82, 85 (1977) ("Since respondents acquired only
part of the subject matter covered. .. there can be no merger."); see also
Roy v. Luschar, 108 Nev. 567, 571, 835 P.2d 807, 810 (1992) (holding that
'The record is unclear as to the number of notes that Mafia
purchased from the "Former Noteholders." A dispute also appears to exist
as to the legitimacy of some of the Mafia-acquired notes; we make no
ruling on that issue one way or the other.
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merger will not occur if "the interests said to merge were not coextensive
and commensurate").
The respondents try to defend the district court's orders on the
alternative basis that NRS 112.180 prohibits a defaulting debtor from
working with some creditors with the intent to thwart enforcement of the
other creditors' rights, charging that Mafia's purchase of the secured notes
could serve no purpose "other than to hinder the remaining creditors'
rights." We disagree. For one, the respondents' reliance on NRS 112.180
is misplaced because Murder Inc.—not Mafia—is the defaulting debtor.
More importantly, there is nothing nefarious about a guarantor acquiring
a secured party's note because "an owner of property on which there is a
lien created or imposed by another may protect himself or herself by
purchasing the lien." 51 Am. Jur. 2d Liens § 16 (2d ed. 2011). Indeed, the
only "wrong" that the respondents protest is that they may not receive the
entirety of the collateral, but that is the consequence of the multi-secured
party security agreement that the respondents agreed to, not Mafia's
acquisition of other secured parties' notes.
Claims for breach of fiduciary duty are akin to fraud claims,
Stalk v. Mushkin, 125 Nev. 21, 30, 199 P.3d 838, 844 (2009); Nev. State
Bank v. Jamison Family P'ship, 106 Nev. 792, 799, 801 P.2d 1377, 1382
(1990), and rights of action based on fraud are not assignable because they
are personal to the party who was defrauded. Prosky v. Clark, 32 Nev.
441, 445, 109 P. 793, 794 (1910). Here, the district court correctly
reasoned that a claim for breach of fiduciary duty may not be assigned.
Nevertheless, the district court erred by dismissing Mafia's
counterclaim/third-party claim because there is a disputed issue of
material fact as to the basis of Mafia's claim, namely, whether DeMaio
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allegedly breached his fiduciary duty to Mafia in its personal capacity, as a
guarantor and/or a creditor (after it acquired the secured loans), or
whether DeMaio allegedly breached his fiduciary duty to the Former
Noteholders, who in turn attempted to assign their claim to Mafia by
virtue of the loan assignments. The former claim would be permissible;
the latter would not.
For the foregoing reasons, we
ORDER the judgments of the district court REVERSED AND
REMAND this matter to the district court for proceedings consistent with
this order. Because the district court erred by granting summary
judgment in favor of the respondents, we also VACATE the award of
attorney fees and costs.
J.
cc: Hon. Joanna Kishner, District Judge
Maier Gutierrez Ayon, PLLC
Greenberg Traurig, LLP/Las Vegas
Randolph L. Westbrook, III
Eighth District Court Clerk
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