                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS                            FILED
                           FOR THE NINTH CIRCUIT                              OCT 24 2012

                                                                          MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

In Re: LAKE AT LAS VEGAS JOINT                   No. 11-15403
VENTURE, LLC,
                                                 D.C. No. 2:10-cv-01037-JCM-RJJ
              Debtor,

                                                 MEMORANDUM*
LID ACQUISITION, LLC,

              Appellant,

       v.

LAKE AT LAS VEGAS JOINT
VENTURE, LLC;
TRANSCONTINENTAL
CORPORATION; OFFICIAL
COMMITTEE OF UNSECURED
CREDITORS; LLV-1, LLC; CREDIT
SUISSE, CAYMAN ISLANDS
BRANCH,

              Appellees.


                   Appeal from the United States District Court
                            for the District of Nevada
                    James C. Mahan, District Judge, Presiding



        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                     Argued and Submitted September 12, 2012
                               Las Vegas, Nevada

Before: RAWLINSON, BYBEE, and IKUTA, Circuit Judges.



      The Security Agreement between Lake at Las Vegas Joint Venture (LLVJV)

and Wells Fargo granted the bank a security interest, not an absolute assignment, in

payments “due or to become due under or in connection with” the T-12

Acquisition Agreement, because the agreement: (1) expressly contemplated that,

once signed, it created a security interest, see, e.g., “T-12 Security Agreement” at ¶

2; (2) gave Wells Fargo the right to demand the amount of any deficiency between

the proceeds from the sale of the collateral and the amount of the loans, see id. at ¶

15(e); and (3) required Wells Fargo to pay any surplus received from the sale of

the collateral to the debtors or at the debtors’ direction, see id. See Dewhirst v.

Citibank (In re Contractors Equip. Supply Co.), 861 F.2d 241, 245 (9th Cir. 1988)

(citing In re Evergreen Valley Resort, Inc., 23 B.R. 659, 661–62 (Bankr. D. Me.

1982)) (identifying factors relevant to determining whether an agreement creates a

security interest or an absolute assignment). For these same reasons, the Security

Agreement between LLV-1, LLC and Wells Fargo granted the bank a security

interest, not an absolute assignment, in the T-16 Acquisition Agreement and



                                           2
payments “due or to become due under or in connection with” that agreement.

Nothing in the Notices and Irrevocable Directions to Pay, attached to both security

agreements, changes this analysis.

      Because the T-12 Security Agreement gave LID Acquisition (Wells Fargo’s

assignee) a security interest only in payments from the T-12 Acquisition

Agreement, and LLVJV received no payments in connection with the T-12

Acquisition Agreement before its bankruptcy filing, the T-12 Security Agreement

does not give LID Acquisition a security interest in any post-petition payments

made in connection with the T-12 Acquisition Agreement. See 11 U.S.C. § 552(a).

Even if LLVJV had received a payment in connection with the T-12 Acquisition

Agreement before filing bankruptcy, the T-12 Security Agreement would not give

LID Acquisition a security interest in any post-petition payments under the T-12

Acquisition Agreement because those post-petition payments are not “proceeds” of

pre-petition payments. See 11 U.S.C. § 552(b)(1); see also Philip Morris Capital

Corp. v. Bering Trader, Inc. (In re Bering Trader, Inc.), 944 F.2d 500, 501 (9th

Cir. 1991).

      Article 9 of the Uniform Commercial Code applies to LID Acquisition’s

security interest in the T-16 Acquisition Agreement and payments thereunder

because payments made by a governmental purchaser, here, the City of Henderson,


                                         3
are not “transfer[s] by a . . . government unit.” Nev. Rev. Stat. 104.9109(4)(n); see

also Former UCC § 9-104, Official Comment 5 (explaining that the governmental

exception to the UCC applies only to transactions involving governmental

borrowers); United Servs. Auto Ass’n v. Schlang, 894 P.2d 967, 970–71 (Nev.

1995) (recognizing the “general validity of [such] legal principles,” including those

presented in the UCC Official Comments).

      Applying Article 9 here, LID Acquisition lost priority for its security interest

in payments under T-16 when Wells Fargo filed its March 2008 termination

statement. See Nev. Rev. Stat. § 104.9322(1)(a). LID Acquisition’s new theory,

asserted for the first time in oral argument, that Wells Fargo was without authority

to file such a termination, was not “argued specifically and distinctly in [its]

opening brief,” Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994), which stated

that Wells Fargo “inadvertently terminated its financing statement in the T-16

Acquisition Agreement.” This new argument is waived. See id.

      AFFIRMED.




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