Topol v. First Indep. Bank of Nev. C/W 60405/61342//63420 ( 2014 )

 ORDER OF AFFIRMANCE
These are consolidated appeals from a district court judgment
in a deficiency action, a post-judgment order awarding attorney fees and
costs, and post-judgment charging orders. Second Judicial District Court,
Washoe County; Janet J. Berry, Judge.
Appellants Nathan L. Topol, Virginia B. Topol, and Tami
Topol (collectively, the Topols) argue that the district court erred in (1)
impliedly concluding that Nevada law governed respondent First
Independent Bank of Nevada's (FIBN) right to a deficiency judgment, (2)
awarding the deficiency judgment to FIBN, and (3) issuing an NRS 86.401
charging order against appellant Tami Topol's interest in a limited
liability corporation (LLC) without making the LLC a party to the action.
We disagree with these contentions.
The law that governed FIBN's right to a deficiency judgment
Against a guarantor, a deficiency judgment action is an action
for the breach of the guaranty agreement, not an action on the deed of
trust. Walters v. Eighth Judicial Dist. Court, 127 Nev. „ 263 P.3d
231, 232-34 (2011) (engaging in an analysis that indicates that although
guarantors are protected by Nevada's anti-deficiency statutes, a deficiency
judgment against a guarantor is premised on the breach of the underlying
guaranty agreement); cf. Dobron v. Bunch, 125 Nev. 460, 464, 215 P.3d 35,
37 (2009) ("[G]eneral contract interpretation principles apply to interpret
guaranty agreements."). The parties' business loan agreements,
promissory notes, and the guaranty agreements designated Nevada law as
the governing law. Thus, even though the deeds of trust in this matter
provided that California law governed FIBN's rights against the real
property in California, Nevada law controls FIBN's right to a deficiency
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judgment, and the district court did not err in applying Nevada law. See
Costanzo v. Marine Midland Realty Credit Corp., 101 Nev. 277, 279, 701
P.2d 747, 748 (1985) ("[T]he expressed intention of the parties as to the
applicable law in the construction of a contract is controlling if the parties
acted in good faith and not to evade the law of the real situs of the
contract." (internal quotation omitted)).
The award of the deficiency judgment to FIBN
The Topols argue that FIBN was not entitled to a deficiency
judgment because FIBN entered into a participation agreement with
another bank regarding the 2006 loan, under which the other bank agreed
to fund roughly half of that loan. Accordingly, the Topols argue that FIBN
was not entitled to a deficiency judgment because "FIBN's recovery must
be limited to the . . . percent it contributed to fund the loan" and the fair
market value of the real property "exceeded this amount." In so arguing,
the Topols rely on the last sentence of NRS 40.451, which defines
indebtedness" and states that "a lien is limited to the amount of the
consideration paid by the lienholder."
We agree with the district court's conclusion that the
participation agreement had no bearing on the Topols' express contractual
obligations under the 2006 promissory note and guaranty agreements.
Bielar v. Washoe Health Sys., Inc., 129 Nev. 306 P.3d 360, 364
(2013) (providing that issues of contract interpretation are reviewed de
novo). The 2006 promissory note and guaranty agreements stated that
FIBN was the lender from whom Topol Development Company would
receive the loan proceeds and to whom the Topols would be contractually
bound to repay the loan proceeds in the event of Topol Development's
default. The fact that FIBN contracted with another party regarding the
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source of these loan proceeds did not affect the contractual relationship
between FIBN, Topol Development, and the Topols. Thus, even if the
Topols' proffered interpretation of NRS 40.451 were correct, see
Sandpointe Apartments, LLC v. Eighth Judicial District Court, 129 Nev.
313 P.3d 849, 855 (2013) (reaching a different conclusion as to the
meaning of NRS 40.451's last sentence), the Topols have cited to no salient
authority in support of their stance that such an interpretation would
supersede their express obligations under the promissory note and
guaranty agreements. Accordingly, we do not disturb that determination
by the district court.
The charging order against Tami Topol
Tami Topol contends that the district court improperly entered
a charging order against her interest in an LLC, arguing that the charging
order went beyond the scope of what a charging order can do and that it
was entered without having made the LLC a party to the action. We
disagree.
NRS 86.401 governs the collection rights and remedies against
a member's interest in an LLC. It permits a court to "charge the [LLC]
member's interest with payment of the unsatisfied amount of the
judgment with interest" and clarifies that when the interest is charged
"the judgment creditor has only the rights of an assignee of the member's
interest." NRS 86.401(1). Essentially, a charging order requires the LLC
to make payments to the judgment creditor that it would have made to the
member, but it does not give a judgment creditor an interest in the LLC's
assets or a right to participate in the LLC's affairs. Weddell v. H20, Inc.,
128 Nev. , 271 P.3d 743, 750 (2012).
Here, the charging order against Tami Topol's interest in the
LCC required the LLC to (1) Idlistribute all membership distributions,
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profits, cash, assets, and other monies due or •that shall become due
directly to Ms. Topol, or on her behalf, directly to FIBN until the
Judgment has been fully paid" and (2) "Nefrain from distributing to any
other person or entity any membership distributions, profits, cash, assets,
loans, or other monies due or that shall become due to Ms. Topol,
including any payments to third party creditors of Ms. Topol." Beyond
that, the order required the disclosure of records that concern the nature
and extent of Tami Topols interest and the amounts that would be
distributed to her by the LLC. The order did not give FIBN an interest in
the LLC's assets or a right to participate in its affairs. Thus, it did not
impact the LLC's rights or interests to a degree that would have required
the LLC to be a party. Accordingly, to the extent that Tami Topol has
raised a cogent argument to this effect, see Edwards v. Emperor's Garden
Restaurant, 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006), the
charging order did not violate NRS 86.401(1). Therefore, we conclude that
the district court did not err in issuing the charging order.
In light of the above, and after considering the remaining
contentions in these consolidated appeals and concluding that they lack
merit, we
ORDER the judgments of the district court AFFIRMED.
, J.
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cc: Hon. Janet J. Berry, District Judge
Jill I. Greiner, Settlement Judge
Sterling Law, LLC
Lionel Sawyer & Collins/Reno
Washoe District Court Clerk
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