Case 2:12-cv-01026-TS Document 41 Filed 09/19/13 Page 1 of 7
IN THE UNITED STATES COURT FOR THE DISTRICT OF UTAH
BANK OF AMERICA, N.A., a national
MEMORANDUM DECISION AND
ORDER ON DEFENDANTS’
MOTION TO REQUIRE PAYMENT
D. STEPHEN SORENSEN, an individual, et
Case No. 2:12-CV-1026 TS
AND RELATED COUNTERCLAIMS AND
THIRD PARTY CLAIMS
This matter is before the Court on Defendants Stephen Sorensen, D. Stephen Sorensen
and Shannon P. Sorensen, Trustee of the Sorensen Trust Dated July 26, 1991, and Sweet Water
Enterprises LLC’s Motion for Order Requiring Bank of America to Accept Payment or, in the
Alternative, to Stay Proceeding. For the reasons discussed more fully below, the Court will
grant in part and deny in part Defendants’ Motion.
Docket No. 22.
Case 2:12-cv-01026-TS Document 41 Filed 09/19/13 Page 2 of 7
At issue in this case is the repayment of a line of credit extended to Defendant Sorenson
in April of 2009. During the course of the years 2008 and 2009, Plaintiff extended lines of credit
to Defendant Sorenson and entities he controlled. As collateral for the 2009 line of credit,
Defendant Sorensen pledged, among other things, the Flying V Bar Ranch Deed of Trust and the
10 Mile Ranch Deed of Trust. The real property held by those deeds of trust is located in Utah.
Plaintiff filed this action seeking to reform the legal description of the Flying V Bar Ranch and
bring about the judicial foreclosure of the deeds of trust.
Defendants allege that in 2012, they properly tendered payment on the 2009 line of credit
and Plaintiff improperly refused to accept the payment tendered. Defendants bring various
counterclaims, each premised on their argument that Plaintiff’s attempt to foreclose on the deeds
of trust is predicated on a pretextual default and unjustifiable refusal to accept repayment. Three
months prior to this action being filed, Defendants brought an action against Plaintiff in
California state court. That action is similarly centered on the 2009 line of credit and Plaintiff’s
attempts to foreclose on property securing that line of credit located in California. That case is
now pending before the United States District Court for the Central District of California.
Defendants’ Motion seeks two distinct forms of relief. Defendants argue that the Court
should either (1) require Plaintiff to accept payment on the underlying debt that gives rise to this
proceeding or (2) stay this matter pending completion of the related case in the Central District of
California. The Court will consider each of Defendants’ arguments below.
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Defendants argue that the Court should require Plaintiff to accept their tender of payment
made in 2012. Plaintiff counters that Defendants’ Motion is procedurally improper, the tender of
payment was not a proper tender, and it should not be compelled to accept payment from anyone
other than the parties contractually obligated to pay Plaintiff.
It is not clear by what procedural vehicle Defendants seek to bring about the result they
seek. In their Reply, Defendants recognize that “the relief requested does not fit squarely in one
category provided by the rules” but nevertheless assert that “the Court has the power to grant the
requested relief under is [sic] ‘broad discretion to conform the pleadings to the arguments raised
by the parties.’” 2
While cognizant of its broad discretion, it is unclear to the Court how such discretion is
availing in this circumstance. Even construing Defendants’ Counterclaims to include the
arguments made in their Motion, the Court is left without the proper vehicle to provide
Defendants relief. It is not clear from Defendants’ Motion whether Defendants would have the
Court grant them injunctive relief, or whether they are seeking a summary adjudication of their
Counterclaims. Under either standard, Defendants have not met their burden. Accordingly, the
Docket No. 33, at 2 (quoting Weyerhaeuser Co. v. Brantley, 510 F.3d 1256, 1267 (10th
See Gen. Motors Corp. v. Urban Gorilla, LLC, 500 F.3d 1222, 1226 (10th Cir. 2007)
(holding that to obtain “a preliminary injunction is an extraordinary remedy; it is the exception
rather than the rule”); Fed. R. Civ. P. 56(a) (providing that summary judgment is only
appropriate “if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law”); DUCivR 56-1 (providing the local briefing
requirements for a motion for summary judgment).
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Court will deny Defendants’ Motion to the extent Defendants seek an order requiring Plaintiff to
accept their tender of funds.
Defendants move the Court to stay this action pending the outcome of an earlier filed
action in the Central District of California. Plaintiff contends that Defendants’ request for a stay
should be denied because there are issues of Utah state law that must be resolved in this forum
before Plaintiff can foreclose on Defendants’ Utah properties and a stay will result in delaying
the foreclosure process.
The Supreme Court has described the stay power as “incidental to the power inherent in
every court to control the disposition of the causes on its docket with economy of time and effort
for itself, for counsel, and for litigants.” The following factors are relevant when considering
whether to grant a stay: (1) whether a stay would promote judicial economy; (2) whether a stay
would avoid confusion and inconsistent results; and (3) whether a stay would unduly prejudice
the parties or create undue hardship.5
Though not directly before the Court in this Motion, also implicated is the first-to-file
rule. The first-to-file rule is well-settled law establishing the general principle that the first court
who obtains jurisdiction over the same parties and issues is the appropriate court to resolve the
Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).
Evergreen Holdings, Inc. v. Sequoia Global, Inc., 2008 WL 4723008, at *2 (W.D. Okla.
MedSpring Grp., Inc. v. Atl. Healthcare Grp., Inc., 2006 WL 581018, at *3 (D. Utah
Mar. 7, 2006) (“Case law indicates that the court in which the first-filed case was brought
decides the question of whether or not the first-filed rule, or alternatively, an exception to the
first-filed rule, applies.” (quotations marks and citation omitted)).
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case. Other courts have stayed second-filed declaratory judgment actions and declined to
consider contentions that it would be more convenient to litigate a case in a second-filed forum
pending ruling on those issues in the first-filed forum. 8
Here, the central claim at issue is whether Plaintiff improperly denied repayment on the
2009 line of credit. The resolution of that issue is a predicate to Plaintiff’s foreclosure
proceedings. The propriety of Defendants’ payment is already being litigated before the Central
District of California. It is rarely efficient for two courts to consider the same issue. For this
reason, the Court finds that judicial economy favors a stay in this instance.
For substantially the same reasons, a stay would avoid confusion and inconsistent results.
The possibility exists that this Court and the Central District of California could reach a different
result on the issue of whether Defendants’ payment was proper. Such a result would end in
confusion as Plaintiff would be enabled to foreclose on property in one jurisdiction but not the
As to prejudice, Plaintiff maintains that it will be prejudiced by a stay in this case because
of the delay that will result from such a stay. Plaintiff properly notes that there are certain types
of relief that it can seek only in this forum, such as the reformation of the Trust Deed to the
Flying V Bar Ranch and the judicial foreclosure proceedings. That being said, depending on the
O’Hare Int’l Bank v. Lambert, 459 F.2d 328, 331 (10th Cir. 1972); see also Celotex
Corp. v. Edwards, 514 U.S. 300, 313 (1995); Cessna Aircraft Co. v. Brown, 348 F.2d 689 (10th
See EMC Corp. v. Bright Response, LLC, 2012 WL 4097707, at *3–5 (N.D. Cal. 2012);
Cellectis S.A. v. Precision Biosciences, Inc., 881 F. Supp. 2d 609, 613 (D. Del. 2012); Mycone
Dental Supply Co., Inc. v. Creative Nail Design, Inc., 2012 WL 1495496, at *1–2 (D. N.J. 2012);
Drew Tech., Inc. v. Robert Bosch, L.L.C., 2012 WL 314049, at *6–7 (E.D. Mich. 2012).
Case 2:12-cv-01026-TS Document 41 Filed 09/19/13 Page 6 of 7
outcome of the parties’ case before the Central District of California, those actions may not be
warranted. In any event, a resolution of the payment issue must be reached before the Court may
properly address Plaintiff’s foreclosure-related claims. The valuing of the Utah property and
other steps required for the foreclosure process can be promptly addressed upon the resolution of
the payment issue. In light of the dispositive nature of the payment issue, the Court finds that
Plaintiff will not be unduly prejudiced or suffer any undue hardship in being required to await a
determination of that issue prior to proceeding on its foreclosure claims.
Based on the foregoing factors, the Court finds that a stay is warranted in this case. In the
event the Central District of California reaches a decision as to the payment issue, or as to the
merits of any first-filed or other venue issue, either party may move to reopen this case and
address the merits of Plaintiff’s claims.
It is therefore
ORDERED that Defendants’ Motion for Order Requiring Bank of America to Accept
Payment or, in the Alternative to Stay Proceeding (Docket No. 22) is GRANTED IN PART AND
DENIED IN PART. It is further
ORDERED that the hearing scheduled in this matter for October 3, 2013 at 10:30 am is
hereby STRICKEN. The Clerk of Court is directed to administratively close this case. Either
party may move to reopen this case upon the occurrence of the events provided in this Order.
Case 2:12-cv-01026-TS Document 41 Filed 09/19/13 Page 7 of 7
DATED September 19, 2013.
BY THE COURT:
United States District Judge