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Abet Justice LLC v. First America Trustee Servicing Solutions, LLC

United States District Court, D. Nevada

September 21, 2017

ABET JUSTICE LLC,, Plaintiffs,


         This is a case with a long, tortured procedural history that has resulted in case-ending sanctions in favor of defendants for plaintiffs' failures to comply with the local rules of practice and the explicit orders of the court.

         Presently before the court is an August 1, 2017 motion for default judgment (ECF No. 165) by defendants Bank of New York Mellon (BNYM), First America Trustee Servicing Solutions (First America), L.L.C., and Residential Credit Solutions, Inc. (Residential Credit). The motion seeks to enforce a prior order of the court entering default in favor of defendants. On August 8, 2017, pro se plaintiff Guetatchew Fikrou responded.[1] (ECF No. 168). On August 15, 2017, defendants replied. (ECF No. 169).

         Also before the court is Fikrou's August 7, 2017 motion for district judge to reconsider its order dismissing the complaint (ECF 163) and the clerk's entry of default (ECF No. 164). (ECF No. 167). Defendants responded (ECF No. 170), to which Fikrou replied (ECF No. 173).

         I. Facts

         This case involves a dispute over real property located at 2138 Montana Pine Drive, Henderson, Nevada 89052 (the “property”).

         On March 20, 2007, Shannon Moore obtained a loan from Countrywide Home Loans, Inc. Mortgage in the amount of $556, 000.00 to purchase the property, which was secured by a deed of trust recorded on April 26, 2007.

         The deed was assigned to BNYM via an assignment of deed of trust recorded on November 9, 2010.[2] An assignment of deed of trust was recorded on March 7, 2014, clarifying the assignment to BNYM.

         On September 11, 2013, defendant Nevada Association Services, Inc. (NAS), acting on behalf of the HOA, recorded a notice of delinquent assessment lien, stating an amount due of $4, 062.92. (ECF No. 49 at 51). On October 28, 2013, NAS recorded a notice of default and election to sell to satisfy the delinquent assessment lien, stating an amount due of $4, 988.64. (ECF No. 49 at 53).

         On March 17, 2014, NAS recorded a notice of trustee's sale, stating an amount due of $5, 867.36. (ECF No. 49 at 57). BNYM did not bid or pay the noticed amount. On April 11, 2014, Abet Justice, LLC purchased the property at the foreclosure sale for $42, 100.00. A trustee's deed upon sale in favor of Abet was recorded on April 14, 2014. (ECF No. 49 at 59). Fikrou asserts that he is the owner of Abet Justice. (ECF No. 1).

         On June 11, 2014, Fikrou and Abet Justice filed the underlying complaint against defendants, alleging two causes of action: (1) quiet title and (2) declaratory relief. (ECF No. 1). On February 9, 2015, defendants filed an answer. (ECF No. 33). On April 29, 2015, defendants filed an amended answer and counterclaim, alleging six causes of action: (1) quiet title/declaratory judgment; (2) preliminary and permanent injunction against Fikrou; (3) wrongful foreclosure against NAS and the HOA; (4) negligence against the HOA and NAS; (5) negligence per se against the HOA and NAS; and (6) breach of the covenant of good faith and fair dealing against the HOA. (ECF No. 49).

         On March 23, 2016, the court dismissed BNYM's counterclaims (2) through (6). (ECF No. 104). BNYM's only counterclaim remaining, then, was its quiet title claim against Abet Justice. (See ECF No. 49).

         On April 11, 2016, Abet Justice's and Fikrou's counsel moved to withdraw as attorney. (ECF No. 105). On April 29, 2016, this court granted the motion. (ECF No. 110). In that order, the court ordered that “Abet Justice L.L.C. must retain new counsel if it intends to continue to litigate this matter. Plaintiff Abet Justice L.L.C. shall have until 5/30/16, to advise the Court if it will retain new counsel.” Id. Abet Justice did not comply.

         On June 24, 2016, the court entered an order to show cause stating the following:

Plaintiff Abet Justice, L.L.C. shall show cause, in writing, no later than July 1, 2016, why sanctions should not be imposed for the failure to comply with this Court's prior order. Failure to timely respond to this Order to Show Cause shall result in the imposition of sanctions.

(ECF No. 117).

         Abet Justice never complied with the court's orders. Accordingly, on July 20, 2016, Magistrate Judge Foley recommended that plaintiff Abet Justice's claims be dismissed with prejudice based on plaintiff's failure to comply with the court's order to obtain successor counsel. (ECF No. 121). Fikrou timely objected, arguing that the failure to comply was excusable neglect. (ECF No. 123).

         On September 8, 2016, Fikrou filed a document entitled “Plaintiff Guetatchew Fikrou's substitution of representation.” (ECF No. 130). In this document, Fikrou notified the court that Abet Justice conveyed whatever interest it had in the subject property of this litigation to Fikrou by way of quitclaim deed, and attached a copy of the deed to Fikrou's filing. Id. The deed has been recorded by the Clark County recorder. See Id. at 4.

         On September 26, 2017, this court adopted Magistrate Judge Foley's R&R in its entirety and dismissed all of Abet Justice's claims with prejudice. (ECF No. 132). At this point, Abet Justice was terminated as a plaintiff but remained in the action as a counterdefendant to BYNM's first counterclaim. (ECF 49 at 8-18). However, as Abet Justice quitclaimed to Fikrou any and all interest it had in the property subject to BYNM's quiet title claim, Fikrou thereby substituted himself as the successor and real party in interest subject to counterdefendant to BNYM's quiet title claim. (See ECF No. 130). Abet Justice had no remaining interest in this action.

         On April 27, 2017, Magistrate Judge Foley ordered the parties to file a joint pretrial order “which fully complies with the requirements of LR 16-3 and LR 16-4 no later than 5/5/17.” (ECF No. 146).

         On May 2, 2017, this court ordered Fikrou to show cause why this action should not be dismissed for lack of standing. (ECF No. 147). Fikrou responded, informing the court that Abet signed a quitclaim deed to Fikrou, conveying its interest in the subject property to Fikrou, giving him standing, and that Abet has since been dissolved as an entity in the state of Nevada. (ECF No. 152). Fikrou argued that he is “well aware now that his entity ABET cannot be represented by a ‘Pro se Representation.' . . . That is why Fikrou has transferred ownership of the property to him around August 30, ...

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