United States District Court, D. Nevada
January 4, 2017
ABSOLUTE BUSINESS SOLUTIONS, INC., Plaintiff,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. et al., Defendants.
C/TONES United States District Judge.
case arises from a homeowners association foreclosure sale.
Now pending before the Court is Defendant Fannie Mae's
Motion to Compel Plaintiff-in-Intervention Alessi &
Koenig to deposit HOA sale proceeds with the Court. (ECF No.
61.) For the reasons given herein, the Court denies the
FACTS AND PROCEDURAL BACKGROUND
2005, Irma Mendez (“Plaintiff”) purchased real
property at 3416 Casa Alto Ave., North Las Vegas, Nevada,
89031 (the “Property”) for $315, 000, giving the
lender a promissory note for $252, 792 and a deed of trust
against the Property securing the note. When Mendez became
delinquent on her monthly assessment fees, Alessi &
Koenig (“Alessi”) conducted a foreclosure sale on
behalf of Fiesta Del Norte Homeowners Association (the
“HOA”). At the HOA sale, the Property was sold to
Plaintiff Absolute Business Solutions, Inc.
(“ABS”) for $20, 600.
the HOA sale, on March 17, 2014, ABS brought this action to
quiet title in the Eighth Judicial District Court of Clark
County, Nevada. (See Compl., ECF No. 3-2 at 2-7.) On
October 2, 2014, Alessi filed a complaint in interpleader in
intervention, acknowledging that multiple persons have a
claim to the HOA sale proceeds and asking the district court
to determine who is entitled to the proceeds. (See
Compl. in Interpleader, ECF No. 3-3 at 9-17.) In its
complaint in interpleader, Alessi stated that it would
“deposit excess proceeds with [the] court in the sum of
$9, 645.03, representing the total proceeds at sale [of] $20,
600.00, minus [the] amount due to Fiesta Del Norte HOA of $4,
954.97; and fees and costs of this interpleader action of $6,
000.00.” (Id. at ¶ 27.)
29, 2015, Federal National Mortgage Association
(“Fannie Mae”) intervened in the action as a
defendant, “due to Fannie Mae being the current
beneficiary on the underlying Deed of Trust.”
(Stipulation and Order, 3-12 at 89-92.) Then, on July 13,
2015, Fannie Mae removed the action to this Court under 28
U.S.C. § 1331, based on the fact that “Fannie
Mae's corporate charter confers federal question
jurisdiction over claims brought against Fannie Mae.”
(Pet. Removal 2, ECF No. 1.) See Lightfoot v. Cendant
Mortg. Corp., 769 F.3d 681, 682 (9th Cir. 2014).
Mae now seeks an order compelling Alessi to deposit $20, 600
in the registry of the Court, representing the full amount
paid for the Property at the HOA sale. (Motion 5-6, ECF No.
61.) To date, contrary to Alessi's stated intention of
depositing $9, 645.03 in “excess proceeds, ” it
appears that no such deposit has been made, in state or
federal court. Fannie Mae argues that Alessi, having filed a
complaint in interpleader, is required to make the promised
deposit. Fannie Mae further contends that a deposit of less
than the full HOA sale amount would be insufficient, because
the entire $20, 600 is in dispute in this case. Alessi has
not responded to Fannie Mae's motion, and the time for
response has passed.
purpose of interpleader is for the stakeholder to
‘protect itself against the problems posed by multiple
claimants to a single fund.'” Lee v. W. Coast
Life Ins. Co., 688 F.3d 1004, 1009 (9th Cir. 2012)
(quoting Mack v. Kuckenmeister, 619 F.3d 1010, 1024
(9th Cir. 2010). There are two avenues for an interpleader
action in federal court: “rule interpleader”
under Federal Rule of Civil Procedure 22, and
“statutory interpleader” under 28 U.S.C. §
1335. See Libby, McNeill, & Libby v. City Nat.
Bank, 592 F.2d 504, 507 n. 3 (9th Cir. 1978).
interpleader is permissible where a plaintiff-stakeholder may
be exposed to double or multiple liability due to the
existence of multiple claimants, and is available even where
the defendants' claims “lack a common origin or are
adverse and independent rather than identical, ” and
where the plaintiff “denies liability in whole or in
part to any or all of the claimants.” Fed.R.Civ.P.
22(a). Rule 22 interpleader is “merely a procedural
device, ” and does not grant a plaintiff an independent
basis for federal subject matter jurisdiction. Morongo
Band of Mission Indians v. California State Bd. of
Equalization, 858 F.2d 1376, 1382 (9th Cir. 1988).
Therefore, “for the interpleader to be proper under
[Rule 22] it must be within some statutory grant of
jurisdiction.” Gelfgren v. Republic Nat. Life Ins.
Co., 680 F.2d 79, 81 (9th Cir. 1982). Deposit of the
disputed funds is not a requirement for Rule 22 interpleader.
See Id. at 81-82.
interpleader under Section 1335 requires diversity between
the adverse claimants, and that the plaintiff in interpleader
deposit the disputed funds into the registry of the Court. 28
U.S.C. § 1335(a). In contrast to Rule 22 interpleader,
satisfying the requirements of statutory interpleader will
confer the federal courts with subject matter jurisdiction
over the action. Gelfgren, 680 F.2d at 81.
Alessi, as plaintiff in interpleader, is required to deposit
the disputed funds in the Court's registry depends on
whether Rule 22 or Section 1335 applies to its interpleader
action. In reality, when Alessi filed its complaint, neither
Rule 22 nor Section 1335 was invoked. This action was in
state court at the time, and thus Alessi filed its complaint
in interpleader pursuant to Nevada Rule of Civil Procedure
22. NRCP 22 does not require a plaintiff to deposit the
disputed funds with the court. See Golightly &
Vannah, PLLC v. TJ Allen, LLC, 132 Nev. Adv. Op. 41, 373
P.3d 103, 106 (2016). Nevertheless, state court rules of
procedure cease to govern a case at the time of removal, and
the Court must determine whether deposit of the disputed
funds is now required under any federal rule or statute.
See Fed. R. Civ. P. 81(c); Savarese v. Edrick
Transfer & Storage, Inc., 513 F.2d 140, 145 (9th
Cir. 1975); Grivas v. Parmelee Transp. Co., 207 F.2d
334, 337 (7th Cir. 1953) (stating that after a defendant
removes a case to federal court, it is “subject to the
same rules of procedure as if it had been originally sued in
Court construes Alessi's interpleader action as governed
by Rule 22, and not Section 1335. When Alessi filed its
complaint in intervention, it used interpleader as merely a
procedural device, not as a basis for invoking federal court
jurisdiction (which is the very purpose of an interpleader
action under Section 1335). Here, an independent basis exists
for federal jurisdiction, namely, Defendant Fannie Mae's
federal corporate charter. Because Alessi's interpleader
action is unrelated to the Court's jurisdiction over this
case, Rule 22 is a better fit. Accordingly, the Court finds
there is no basis in the federal rules or statutes-and surely
Fannie Mae has cited none-to compel Alessi to deposit the
disputed funds in the registry of the Court.
HEREBY ORDERED that the Motion to Compel Deposit (ECF No. 61)