Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00301/USCOURTS-azd-2_12-cv-00301-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

National Real Estate Opportunity Fund I,

LP,

Plaintiff, 

vs.

Felicia D. Kliment, et al., 

Defendants. 

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No. CV-12-301-PHX-SMM

ORDER

Pending before the Court is Plaintiff’s motion for summary judgment and its

statement of facts in support. (Docs. 48, 49.) Also pending is Plaintiff’s motion for

sanctions. (Doc. 53.) Defendants have failed to respond to either motion. The Court will

grant Plaintiff’s motions. 

BACKGROUND

On April 30, 2012, Plaintiff National Real Estate Opportunity Fund I, LP (“NREOF”)

filed a first amended complaint against Defendants Felicia D. Kliment, Estate of Stephen A.

Kliment, and Blue Phoenix Holdings, LLC (“BPH”), alleging breach of promissory note and

breach of guaranty. (Doc. 22.) NREOF alleges that on June 20, 2007, BPH executed and

delivered to IMPAC Commercial Capital Corporation (“IMPAC”) a promissory note in the

original principal amount of three million dollars (the “Note”). (Id. ¶ 13.) In conjunction

with the Note, BPH executed and delivered to IMPAC a deed of trust (the “Deed”) in real

property located at 7125 N. 19th Avenue, Phoenix, Arizona 85021 (the “Property”), which

Case 2:12-cv-00301-SMM Document 59 Filed 03/13/13 Page 1 of 5
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is a complex of 50 apartments. (Id. ¶ 14.)

Also on June 20, 2007, the Kliments executed a guaranty in which they guaranteed

the obligations of BPH under the Note (the “Guaranty”). (Id. ¶ 23.) The Guaranty contained

provisions indicating that the guarantors’ obligations can be enforced by the applicable

creditor regardless of whether a trustee’s sale is held and that the applicable creditor has the

right to collect deficiencies owed thereafter. (Id. ¶ 24.) On October 30, 2007, IMPAC

assigned all right, title, and interest in the Note, Deed of Trust, Guaranty, and all related loan

documents to Zions First National Bank (“Zions”), who then assigned all right, title, and

interest in these loan documents to Plaintiff. (Id. ¶¶ 15,16.) The note required BPH to make

monthly payments to the holder of the loan documents. (Id. ¶ 17.)

From April 1, 2011 to the present, BPH has been in default under the Note for failure

to pay all amounts due. (Id. ¶ 18.) Plaintiff notified BPH that, due to its default, the entire

unpaid principal balance and accrued unpaid interest were immediately due and payable

pursuant to the terms of the Note. (Id. ¶ 19.) BPH’s default also gave rise to the Kliments’

contractual obligation under the Guaranty to make payment on all amounts due under the

Note. (Id. ¶ 26.) BPH and the Kliments failed and refused to make payments. (Id. ¶ 28.)

Pursuant to the Deed and loan documents, a trustee’s sale of the Property was held

on January 10, 2012, in which Plaintiff purchased the Property for $2,147,618.07, an amount

Plaintiff has established was above the fair market value for the Property on the date of the

sale. (Doc. 48 at 4-6.) Applying NREOF’s credit bid of $2,147,618.07, after accrued interest

and additional penalties and fees, NREOF claims a balance due of $1,097,250.37, with daily

interest of $575.11 beginning on December 27, 2011. (Doc. 49 at 4.) Plaintiff made demand

upon the Defendants for the amount owing, but Defendants failed to make payment. (Doc.

48 at 5.) Plaintiff filed for summary judgment, and Defendants failed to respond. 

Moreover, Defendants also failed to obey this Court’s order to meet in person and

engage in settlement talks. (Doc. 39.) The Court gave a warning to Defendants that further

noncompliance with this order would be treated as a contempt of court. (Docs. 39, 52.)

Defendants failed to comply; this Court indicated that it would grant Plaintiff’s request for

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attorney’s fees and client costs incurred in attempting to meet with Defendants as ordered.

(Doc. 52.) Plaintiff submits its motion for sanctions in the amount of $1,184.79. (Doc. 53.)

STANDARD OF REVIEW

A court must grant summary judgment if the pleadings and supporting documents,

viewed in the light most favorable to the nonmoving party, “show that there is no genuine

issue as to any material fact and that the moving party is entitled to judgment as a matter of

law.” FED. R. CIV. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986);

Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law

determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248

(1986); see also Jesinger, 24 F.3d at 1130. “Only disputes over facts that might affect the

outcome of the suit under the governing law will properly preclude the entry of summary

judgment.” Anderson, 477 U.S. at 248. The dispute must also be genuine, that is, the

evidence must be “such that a reasonable jury could return a verdict for the nonmoving

party.” Id.; see Jesinger, 24 F.3d at 1130.

A principal purpose of summary judgment is “to isolate and dispose of factually

unsupported claims.” Celotex, 477 U.S. at 323-24. Summary judgment is appropriate

against a party who “fails to make a showing sufficient to establish the existence of an

element essential to that party's case, and on which that party will bear the burden of proof

at trial.” Id. at 322; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir.

1994). The moving party need not disprove matters on which the opponent has the burden

of proof at trial. See Celotex, 477 U.S. at 323-24. The party opposing summary judgment

need not produce evidence "in a form that would be admissible at trial in order to avoid

summary judgment." Id. at 324. However, the nonmovant “may not rest upon the mere

allegations or denials of [the party's] pleadings, but . . . must set forth specific facts showing

that there is a genuine issue for trial.” FED.R.CIV.P. 56(e); see Matsushita Elec. Indus. Co.,

Ltd. v.Zenith Radio Corp., 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint

Venture, 53 F.3d 1044, 1049 (9th Cir. 1995).

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DISCUSSION

Defendants failed to respond to Plaintiff’s motion of summary judgment. Pursuant to

LRCiv 7.2(i), Plaintiff requests that Defendants’ noncompliance be deemed a consent to the

granting of summary judgment and summary disposition of Plaintiff’s motion. (Doc. 55.)

The Court agrees. Plaintiff has amply demonstrated that it is entitled to summary judgment.

Defendants executed a promissory note secured by a deed of trust to purchase about

50 apartment units on 19th Avenue north of Glendale Avenue. (Doc. 48 at 2.) Defendant

Felicia D. Kliment and her late husband, Stephen A. Kliment then signed as guarantors for

their entity’s debt. (Id.) Defendants defaulted on the note, and a trustee’s sale was

conducted on January 11, 2012. (Id. at 3.) Plaintiff submitted a successful credit bid of

$2,147,618.07 for the apartment complex, leaving a balance due of $1,097,250.37, with

interest after December 27, 2011 at the rate of $575.45. per day. (Id. at 3-4.) Defendants are

liable for the deficiency pursuant to A.R.S. § 33-814. (Id. at 5-6.)

Accordingly, on the basis of the foregoing,

IT IS HEREBY ORDERED GRANTING Plaintiff’s motion for summary judgment.

(Doc. 48.) Judgment is granted in favor of Plaintiff and against Defendants Felicia D.

Kliment, the Estate of Stephen A. Kliment, and Blue Phoenix Holdings, LLC, and each of

them, as follows: 

1. For principal in the amount of $1,097,250.37; and

2. For interest accruing on the principal balance at the rate of $575.45 per day, from

December 27, 2011 until paid, based on the promissory note, guaranty and A.R.S. § 33-814.

IT IS FURTHER ORDERED GRANTING Plaintiff’s motion for sanctions against

Defendants in the amount of $1,184.79. (Doc. 53.) 

IT IS FURTHER ORDERED GRANTING Plaintiff’s motion for summary

disposition on its motion for summary judgment. (Doc. 55.)

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IT IS FURTHER ORDERED denying as moot Plaintiff’s motion for ruling. (Doc.

58.)

DATED this 12th day of March, 2013.

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