United States District Court, D. Nevada
FDIC as Receiver for AMTRUST BANK, f/k/a Ohio Savings Bank, a federal savings bank, et al., Plaintiffs,
REX H. LEWIS, an individual, et al., Defendants.
REPORT AND RECOMMENDATION JUDGMENT CREDITORS'
RENEWED MOTION TO APPOINT RECEIVER IN AID OF EXECUTION (ECF
FERENBACH, UNITED STATES MAGISTRATE JUDGE.
the Court is Iota Violet, LLC; Iota Coral, LLC; Iota
Cinnamon, LLC; Iota Red, LLC; and Iota Royal, LLC's (the
“Judgment Creditors”) motion to appoint a
receiver in aid of executing the judgment (ECF No. 59)
against Judgment Debtors Rex H. Lewis; Alpha Vista, LLC;
Omega Vista, LLC; HH INV, LLC; Bartlett Sunrise, LLC;
Cottongin, LLC; Midway Cornman, LLC; Regena Teepee, LLC; Mesa
Verde, LLC; Pebble Cimmaron, LLC; and Corrales Peters, LLC.
(ECF No. 265). For the reasons stated below, the Judgement
Creditors' motion should be granted in part.
Judgment Debtors are individuals or entities that either
borrowed money from AmTrust Bank or guaranteed repayment.
(ECF No. 35 at 5-16). The Court has entered judgment in favor
of the Judgment Creditors in this action for over $59
million. (ECF No. 59).
Judgment Creditors' argue there are significant questions
“with respect to that cash and assets once held by
those Judgment Debtors” because “[d]espite the
nearly $84 million [they] received, as of today each Borrower
and Entity Guarantor appears to be a defunct company.”
(ECF No. 265 at 4-5). The Judgment Creditors move that a
“receiver be appointed over all the Judgment
Debtors' assets; that the receiver be empowered to
investigate the Judgment Debtors' alienation of their
assets…; [and] that the receiver be empowered to
investigate those entities through which Lewis continues to
hold and control assets.” (Id. at 5). In a
proposed order granting this motion, the Judgment Creditors
identify several “Lewis Entities” (third parties
to this action that are allegedly related to Rex Lewis),
lists records and bank accounts held by the Lewis Entities as
part of the “Receivership Property, ” and directs
the Lewis Entities to take certain actions such as refrain
from transferring property and provide financial information
to the receiver. (ECF No. 266-1 at 4-6, 11-13). At an
evidentiary hearing held on October 16, 2017, the Judgment
Creditors clarified that their intent was to appoint a
receiver over the Judgment Debtor entities other than the
individual Rex Lewis with the authority to investigate other
response, Lewis argues the motion seeks “a receivership
over not only Judge Debtors' assets, but over entities
and assets owned by third-parties who are not before this
Court.” (ECF No. 271 at 1). Lewis also asserts the
Judgment Creditors already have “adequate legal
remedies” against the third parties, including legal
actions in Nevada State Court and the Isle of Man.
(Id. at 21).
procedure on execution-and in proceedings supplementary to
and in aid of judgment or execution-must accord with the
procedure of the state where the court is located, but a
federal statute governs to the extent it applies.” Fed
R. Civ. P. 69. Under NRS 32.010(3), a receiver may be
appointed in an action “[a]fter judgment, to carry the
judgment into effect.” “[T]he practice in
administering an estate by a receiver or a similar
court-appointed officer must accord with the historical
practice in federal courts or with a local rule.”
Fed.R.Civ.P. 66. In determining whether to appoint a
receiver, federal courts consider factors such as whether the
party seeking receivership has a valid claim, whether there
is imminent danger of property being lost or squandered,
“whether the harm to plaintiff by denial of the
appointment would outweigh injury to the party opposing
appointment, ” and whether the interests of the party
seeking receivership will be well-served by receivership.
Canada Life Assur. Co. v. LaPeter, 563 F.3d 837, 844
(9th Cir. 2009).
case, the Judgment Creditors have demonstrated a need for a
receiver to be appointed over the Judgment Debtor entities.
The Judgment Creditors have already obtained a judgment
against the Judgment Debtors. The Judgment Debtor entities
appear to be defunct, but questions remain regarding their
current status and any traceable assets. Appointing a
receiver will protect any property currently held by the
Judgment Debtor entities and assist the Judgment Creditors in
executing their judgment. In addition, Lewis acknowledged at
the October 16, 2017 hearing that he would not be prejudiced
by the appointment of a receiver, and it is unlikely that the
Judgment Debtor entities would be prejudiced as they do not
appear to be currently in operation.
the Court should not authorize the receiver to take actions
against the Lewis entities or their property at this time.
The Judgment Creditors do not have a judgment against these
entities in this case. The Lewis entities are not parties to
this case and they would be prejudiced by a Court order
impacting their rights and properties. There are other
pending court actions involving the Lewis entities and
additional proceedings could be commenced by the Judgment
Creditors or the receiver.
and for good cause shown, IT IS HEREBY RECOMMENDED that the
Judgment Creditors' Renewed Motion to Appoint Receiver in
Aid of Execution (ECF No. 265) ...