Following the precedent it set on Thursday, the Nevada Supreme Court ruled on Friday that a commercial developer did not qualify for the protections spelled out in Assembly Bill 273.
Developers Frank Nielsen and Robert Schulman had guaranteed full repayment of a loan from Colonial Bank in 2005 to purchase 90 acres in Mohave County, Ariz. When the bank failed four years later, the loan was assumed by Branch Banking and Trust Co., which foreclosed on the land in 2010 following a default.
Branch Banking then filed suit in Clark County District Court to collect on a $2 million deficiency, the difference between the $3.7 million owed on the loan and the $1.7 million value set on the property at foreclosure. Clark County District Judge Elizza Cadish ruled against the bank, saying that the deficiency was capped at the unspecified amount Branch Banking had paid to take over the loan, in keeping with the provisions of AB 273.
However, the Supreme Court reversed her, following its principle that since the foreclosure took place prior to AB 273 going into effect on June 10, 2011, the law’s protections did not apply. As was the case in the precedent, justices Michael Cherry and Ron Parraguire dissented.