United States District Court, D. Nevada
ORDER (1) GRANTING MOTION TO SET ASIDE DEFAULT
JUDGMENT, (2) GRANTING MOTION TO INTERVENE, AND (3) ORDERING
THE PARTIES TO SHOW CAUSE WHY THIS CASE SHOULD NOT BE
DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION
(ECF NOS. 32, 33)
P. GORDON, UNITED STATES DISTRICT JUDGE
Bank of New York Mellon (BONY) filed this suit against
defendants Foreclosure Sales Services, LLC (FSS) and NV
Foreclosure Services, LLC to quiet title in property located
at 628 Bay Bridge Drive in North Las Vegas. ECF No. 1. I
dismissed defendant NV Foreclosure Services without prejudice
after BONY failed to provide proof of service. ECF No. 17.
BONY obtained a default judgment against FSS. ECF No. 27.
New Builds LLC moves to intervene in this action and to set
aside the default judgment. ECF Nos. 32, 33. New Builds
argues it owned the real property at the time BONY obtained
its default judgment against FSS. New Builds contends BONY
was aware of that fact at the time it sought the default
judgment but did not inform the court of that information.
New Builds argues that allowing the default judgment to stand
would deprive it of its interest in the property without due
process. New Builds thus requests leave to intervene and for
the default judgment to be set aside.
opposes, arguing Nevada law precludes New Builds from
intervening after default judgment has been entered. BONY
also argues the motion to intervene is untimely because New
Builds had reason to know its interests might be adversely
affected by the outcome of this litigation as soon as it
bought the property yet it did not seek to intervene until
after default judgment was entered. BONY also argues the
motion to intervene is procedurally improper because it does
not set forth the claim or defense for which intervention is
sought. As to the motion to set aside, BONY argues there was
no fraud on the court to support setting aside the default
aside the default judgment and grant the motion to intervene.
I also direct the parties to show cause why this case should
not be dismissed for lack of subject matter jurisdiction.
property was purchased in 2005 by Alberto Cervantes. ECF No.
34-1. Cervantes borrowed $212, 000.00 from WMC Mortgage
Corp., and the note was secured by a deed of trust
encumbering the property. ECF No. 34-2. WMC assigned the deed
of trust to BONY in 2011. ECF No. 34-3.
2010, the homeowners' association (HOA) recorded a notice
of delinquent assessment after Cervantes failed to pay his
HOA dues. ECF No. 34-4. The HOA foreclosed on its lien and
FSS and NV Foreclosure Services bought the property at the
September 2012 HOA foreclosure sale. ECF Nos. 34-5; 34-6;
October 30, 2015, BONY filed this lawsuit against FSS and NV
Foreclosure Services seeking to quiet title in the property.
ECF No. 1. On November 6, 2015, BONY recorded a notice of
lis pendens advising of the pendency of this action.
ECF No. 34-9.
December 2015, FSS and NV Foreclosure Services quitclaimed
their joint interest in the property to FSS. ECF No. 34-8. On
January 15, 2016, FSS quitclaimed its interest in the
property to New Builds. ECF No. 32-2 at 3-6. The quitclaim
deed was recorded on June 14, 2016. ECF No. 32-2 at 2-3.
not answer or otherwise respond to the complaint so BONY
moved for entry of default. ECF No. 18. The clerk of court
entered default on April 26, 2016. ECF No. 20.
2016, prior to BONY moving for a default judgment, New
Builds' counsel contacted BONY's counsel. ECF No.
32-3. The parties exchanged emails in which New Builds
provided the quitclaim deed showing New Builds owned the
property and explored with BONY the possibility of setting
aside the default or settling the matter. ECF Nos. 32-3 at
2-4; 32-4 at 2-4; 32-5 at 2-5. New Builds' counsel
requested that BONY not take any action against FSS,
"such as seeking a Default Judgment without letting me
know in advance, " while the parties discussed
settlement. ECF Nos. 32-4 at 4; 32-5 at 2.
nevertheless sought and obtained a default judgment against
FSS in August 2016 without telling New Builds. ECF Nos. 25,
26. In doing so, BONY did not advise this court that FSS had
quitclaimed its interest in the property to New Builds.
See ECF No. 25.
talks failed in early September 2016. ECF No. 32-6 at 3-4.
New Builds then requested BONY stipulate to substitute New
Builds into the case. Id. at 3. BONY declined to
stipulate to the substitution. Id. at 2. Throughout
these communications, BONY's counsel did not inform New
Builds' counsel that BONY had obtained a default judgment
against FSS. ECF No. 32-7 ...