STIPULATION AND ORDER TO AMEND COMPLAINT

CAM FERENBACH, Magistrate Judge.

COMES NOW Plaintiff FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), as receiver for Community Bank of Nevada, by and through its attorneys of record, Meier Fine & Wray, LLC, and Defendant Nevada Title Company, by and through its attorneys of record, Marquis Aurbach Coffing, and hereby Stipulate as follows:

1. That Plaintiff may file its Amended Complaint, a copy of which is attached hereto as Exhibit "1"; and

2. The Motion to Amend Complaint [Document No. 34] is hereby taken off calendar as moot.

ORDER

IT IS SO ORDERED.

EXHIBIT "1"

COMES NOW Plaintiff COMMONWEALTH LAND TITLE COMPANY, ("Commonwealth") and FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), as receiver for Community Bank of Nevada, by and through their attorneys of record, Meier Fine & Wray, LLC, and complains against Defendant Nevada Title Company ("NTC"), a Nevada Corporation.

GENERAL ALLEGATIONS

A. Jurisdiction

1. Jurisdiction is proper in this Court pursuant to 12 U.S.C. § 1819(b)(2). Venue is proper because the transaction which is the subject of the dispute took place in Clark County Nevada.

B. Parties

2. Commonwealth Land Title Insurance Company, is a Pennsylvania corporation.

3. FDIC is a United States government corporation and is the Receiver for Community Bank of Nevada, which was a Nevada corporation.

4. Upon information and belief Defendant Nevada Title Company is a Nevada corporation.

C. Background Facts

5. This litigation is the result of a purchase loan transaction of certain real property located in Clark County Nevada commonly described as 3685 West Flamingo Road, Las Vegas, NV 89103, Assessors Parcel Number: 162-20-110-008 ("Subject Property").

6. On or about October 11, 2005, nonparty Dynasty Towers, LLC ("Dynasty") and Outback Steakhouse of Florida, LLC ("Outback") entered into a contract to purchase the Subject Property, the "Agreement of Purchase and Sale" ("APS").

7. The APS sets forth certain obligations between the nonparty Dynasty and Outback relating to the sale and development of the Subject Property.

8. On or about March 10, 2008, nonparty Dynasty, executed and granted Community Bank a deed of trust ("First Deed of Trust"). The First Deed of Trust was recorded on April 4, 2008 with the Clark County recorder as Book and Instrument number: 20080404-0004710.

9. The First Deed of Trust secured a six million six hundred thousand dollar ($6,600,000.00) purchase money loan from Community Bank of Nevada ("CBON") and encumbered the Subject Property in the first priority position.

10. CBON obtained a title insurance policy (the "Policy") issued by Commonwealth Land Title insurance Company ("Commonwealth"). A copy of the relevant portions of the Policy is attached as Exhibit 1.

11. The Policy provides that, in the event of a payment by Commonwealth under the Policy, Commonwealth is entitled to all the rights and claims of the FDIC. See Exhibit 1, Policy Conditions § 12.

12. On or about April 4, 2008, nonparty Dynasty granted Outback a deed of trust ("Second Deed of Trust"). The Second Deed of Trust was also recorded on April 4, 2008 with the Clark County recorder as Book and Instrument number: 20080404-0004711.

13. The Second Deed of Trust expressly secured, to Outback, Dynasty's performance of the obligations set forth in the APS and not the obligations under the First Deed of Trust.

14. CBON was not a party to the Second Deed of Trust.

15. CBON was not a party to the APS.

16. NTC was the escrow agent on the April 4, 2008 transaction No. 05-10-0508-CLB. See Instructions to Title Company, (the "Escrow Instructions") a copy of which is attached as Exhibit 2.

17. The Escrow Instructions required NTC to record the documents which memorialized the transaction "only when [NTC] assured that the enclosed deed of trust will be afforded a first lien priority status." See Exhibit 2.

18. On or about April 4, 2008, Outback conveyed the Subject Property to Dynasty via Grant, Bargain, Sale Deed ("GBS Deed") which was recorded with the Clark County recorder as Book and Instrument number: 20080404-0004709.

19. The GBS Deed purports to incorporate the APS and create a "covenant running with the land" (the "Purported Covenant"). A copy of the GBS Deed is attached as Exhibit 3.

D. Default and Acquisition by FDIC.

20. On or about October 8, 2008 nonparty Dynasty defaulted under the First Deed of Trust.

21. On March 2, 2009, a Notice of Trustee's Sale was recorded with the Clark County Recorder as Book and Instrument number: 20090302-0001686.

22. On March 24, 2009, Outback recorded a document called "Notice of Covenant Running With the Land" ("Notice of Covenant"), instrument number: 20090324-0003822.

23. On August 14, 2009, CBON failed and the FDIC was appointed receiver of CBON.

24. On January 6, 2010, a second Notice of Trustee's Sale was recorded at the Clark County recorder as Book and Instrument number as Book/Instrument No. 20100106-0003937.

25. On or about February 2, 2010, the FDIC acquired the Subject Property via Trustee's Deed Upon Sale under the Subject Deed of Trust.

26. The Trustee's Deed Upon Sale was recorded with the Clark County Recorder as Book and Instrument number: 20100202-0004006.

27. The February 2, 2010 Trustee's Sale as memorialized by the Trustee's Deed Upon Sale extinguished all junior liens, including the Second Deed of Trust and the Purported Covenant.

E. Declaratory Relief Litigation

28. On June 6, 2011, a Nevada limited liability company 26 Flamingo, LLC ("Flamingo") claimed to have acquired certain purported remaining interests in the Subject Property from Outback, via a quitclaim "Assignment of Interests."

29. The Assignment of Interests refers to the Purported Covenant, the Second Deed of Trust, and a Guaranty of Payment by a nonparty. A copy of the Assignment of Interests is attached as Exhibit 4.

30. Flamingo claimed that the Purported Covenant was not extinguished by the Trustee's sale under the First Deed of Trust, and on June 20, 2011, Flamingo demanded from the FDIC, a payment of four million dollars ($4,000,000.00) based on the Purported Covenant.

31. The FDIC tendered a claim under the Policy to Commonwealth, which Commonwealth accepted under the Policy.

32. On December 5, 2011, the FDIC filed a complaint for declaratory relief regarding Flamingo's claims about the Assignment of Interests and the Purported Covenant in the United States District Court, District of Nevada (2:11-cv-01936-JCM-NJK) (the "Declaratory Relief Action").

33. On October 17, 2013 the Declaratory Relief Action settled and was dismissed. See 2:11-cv-01936-JCM-NJK, ECF No. 109.

34. The settlement required Commonwealth to pay $400,000.00 ("Settlement Payment").

35. The settlement further required the FDIC to transfer title to the Subject Property for an amount, which upon information and belief, was far less than the value of the Subject Property.

FIRST CLAIM FOR RELIEF

Breach of Contract

36. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 35 and incorporates the same herein by reference.

37. NTC and Commonwealth's predecessor CBON, entered into a contract memorialized by the Escrow Instructions.

38. Commonwealth's predecessor CBON performed fully under the contract by providing the $6.6 million funds and documents necessary for NTC to close escrow transaction on April 4, 2008.

39. NTC breached the Escrow Instructions by not ensuring that the First Deed of Trust was afforded first lien priority position, which resulted in the Declaratory Relief Action and the related costs and expenses thereof, including attorneys' fees.

40. Commonwealth as successor to the FDIC and CBON, suffered damages relating to NTC's breach by having to pay $400,000.00 to facilitate settlement, along with the costs and expenses of the Declaratory Relief Action, including attorneys' fees.

41. As a result of NTC's conduct the FDIC to facilitate the settlement agreement had to transfer the Subject Property for less than its value.

42. The FDIC incurred the costs and expenses of the Declatory Relief Action, including attorneys' fees.

SECOND CLAIM FOR RELIEF

Professional Negligence

43. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 42 and incorporates the same herein by reference.

44. NTC was a fiduciary and agent to the parties to the escrow agreement.

45. NTC had a duty to follow the Escrow Instructions to ensure that the Property was not encumbered with any interest with priority over the First Deed of Trust. NTCs duty to follow the Escrow Instructions required the use of the skill, prudence, and diligence as other members of the escrow profession.

46. NTC breached its duty to follow the Escrow Instructions by recording the GBS Deed, the First Deed of Trust, and the Second Deed of Trust, without ensuring that the First Deed of Trust was "afforded a first lien priority status" as required by the Escrow Instructions.

47. Because of NTC's breach of its duty, nonparty 26 Flamingo claimed the Purported Covenant, as memorialized in the GBS Deed and the Second Deed of Trust, had a superior priority interest over the First Deed of Trust.

48. As a result of NTC's breach of its duty to follow the Escrow Instructions, FDIC was forced to initiate the Declaratory Relief Action.

49. As a result of the Declaratory Relief action, Commonwealth suffered actual damages by paying $400,000.00 to facilitate the settlement agreement and in addition to the settlement payment, Commonwealth incurred the costs and expenses of the Declaratory Relief Action, including attorneys' fees.

50. As a result of the Declaratory Relief Action, the FDIC transferred title to the Subject Property for an amount less than the value of the Subject Property. The FDIC incurred the costs and expenses of the Declaratory Relief Action, including attorneys' fees.

THIRD CLAIM FOR RELIEF

Breach of Fiduciary Duty

51. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 50 and incorporates the same herein by reference.

52. NTC was an agent and fiduciary of the parties to the Escrow Instructions.

53. NTC owed a fiduciary duty to Commonwealth and the FDIC, through its predecessor CBON.

54. NTC breached its fiduciary duty by failing to ensure that the First Deed of Trust was "afforded a first lien priority status" as required by the Escrow Instructions.

55. NTC's breach caused Commonwealth damages by having to pay $400,000.00 to facilitate settlement of the Declaratory Relief Action, and additional costs and expenses of the Declaratory Relief Action, including attorneys' fees.

56. As a result of NTC's conduct, the FDIC to facilitate the settlement agreement had to transfer the Subject Property for less that its value. The FDIC incurred the costs and expenses of the Declaratory Relief Action, including attorneys' fees.

FOURTH CLAIM FOR RELIEF

Equitable Indemnity

57. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 60 and incorporates the same herein by reference.

58. Flamingo claimed that the Purported Covenant had priority over the First Deed of Trust, and that the Purported Covenant survived the foreclosure of the First Deed of Trust, which necessitated the Declaratory Relief Action, which resulted in Commonwealth paying $400,000.00 to facilitate settlement between the FDIC and Flamingo, all of which resulted because of NTC's failure to follow the contract terms set forth in Escrow Instructions ensuring that the First Deed of Trust was a first priority lien.

59. In equity, Commonwealth, as successor to the FDIC, is entitled to indemnity from Nevada Title for any damages sustained by the FDIC or Commonwealth, if any, and for any sums paid by way of settlement or judgment rendered against the FDIC in the Declaratory Relief Action.

60. Commonwealth, as successor to the FDIC, is entitled to recover from Nevada Title all costs, expenses and attorneys' fees incurred in the prosecution of the Declaratory Relief Action and this litigation.

61. According to the Policy, Commonwealth, by paying $400,000.00 to facilitate settlement of the Declaratory Relief Action, has all of the rights of the FDIC, including the rights created by the Escrow Instructions and the right to seek recovery of the Settlement Payment.

PRAYER

WHEREFORE, Plaintiff Commonwealth, prays for:

Dated this 26th day of January, 2015.

EXHIBIT 1

EXHIBIT 2

EXHIBIT 3