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The Bank of New York Mellon v. SFR Investments Pool 1, LLC

United States District Court, D. Nevada

July 24, 2018

THE BANK OF NEW YORK MELLON, Plaintiff(s),
v.
SFR INVESTMENTS POOL 1, LLC, Defendant(s).

          ORDER

         Presently before the court is plaintiff Bank of New York Mellon's (“BNYM”) motion to alter or amend judgment. (ECF No. 27). Defendant SFR Investments Pool 1, LLC (“SFR”) filed a response (ECF No. 28), to which BNYM replied (ECF No. 29).

         I. Facts & Background

         BNYM's complaint alleged that the HOA foreclosure sale did not extinguish its deed of trust on the property. (ECF No. 1). However, BNYM failed to name Shadow Crossing Homeowners' Association (the “HOA”) as a defendant to the action. Id. On May 22, 2017, SFR filed a motion to dismiss BNYM's complaint pursuant to Federal Rule of Civil Procedure 12(b)(7) for failure to join the HOA, a necessary party, pursuant to Federal Rule of Civil Procedure 19(a)(1). (ECF No. 15). On November 8, 2017, the court granted SFR's motion and dismissed BNYM's complaint without prejudice. (ECF No. 25). On November 9, 2017, the clerk of the court entered judgment in favor of SFR. (ECF No. 26).

         In the instant motion, BNYM moves the court to alter or amend the entry of judgment in favor of SFR resulting from the court's dismissal of BNYM's complaint. (ECF No. 27). . . . . . .

         II. Legal Standard

         Rule 59(e) “permits a district court to reconsider and amend a previous order[;]” however, “the rule offers an extraordinary remedy, to be used sparingly in the interests of finality and conservation of judicial resources.” Carroll v. Nakatani, 342 F.3d 934, 945 (9th Cir. 2003) (internal quotations omitted). “A motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment.” Fed.R.Civ.P. 59(e).

         “Since specific grounds for a motion to amend or alter are not listed in the rule, the district court enjoys considerable discretion in granting or denying the motion.” McDowell v. Calderon, 197 F.3d 1253, 1255 n. 1 (9th Cir.1999) (en banc) (per curiam). Generally, there are four grounds upon which a Rule 59(e) motion may be granted: (1) to correct manifest errors or law or fact; (2) to present newly discovered or previously unavailable evidence; (3) to prevent manifest injustice; or (4) if amendment of the judgment is justified by an intervening change in controlling law. Allstate Ins. Co. v. Herron, 634 F.3d 1101, 1111 (9th Cir. 2011) (citing McDowell, 197 F.3d at 1255 n. 1).

         III. Discussion

         BNYM requests that the court either (1) reconsider its order granting SFR's motion to dismiss and amend the subsequent judgment, or (2) grant BNYM leave to amend its complaint to join the HOA as a party. (ECF No. 27). BNYM contends that such action by the court is necessary so as “to avoid manifest injustice.” Id.

         BNYM does not challenge the court's finding that the HOA is a necessary party to the litigation. (ECF No. 27). Instead, BYNM argues that dismissal of the complaint was improper on such a basis. Id. BNYM argues that the court's determination that the HOA is a necessary party obligates the court to order the HOA be joined as a defendant to this action pursuant to Rule 19(a), and not to dismiss the complaint. Id.

         BNYM further contends that the order and judgment dismissing its complaint “will cause BNYM undue prejudice because BNYM will be effectively estopped from pursuing any adequate remedy on its claims.” (ECF No. 27). While BNYM filed its complaint in advance of the five-year statute of limitations governing quiet title actions, BNYM argues that “because the [order granting SFR's motion to dismiss without prejudice] was issued after the statute of limitations ran, it effectively [] rendered a dismissal with prejudice.” Id.

         As an initial matter, the court will not reconsider its order dismissing BNYM's complaint as it relates to BNYM's claim for declaratory relief. “[A] ‘claim' for declaratory relief is not a substantive cause of action at all; it is merely a prayer for a remedy.” Pettit v. Fed. Nat'l Mortg. Ass'n, no. 2:11-cv-00149-JAD-PAL, 2014 WL 584876 (D. Nev. Feb. 11, 2014); see Wells Fargo Bank, N.A. v. SFR Invs. Pool 1, LLC, no. 2:15-cv-02257-JCM-CWH, 2017 WL 1902158, at *4 (D. Nev. May 9, 2017) (citing Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989)); see also Centex Homes v. Everest Nat'l Ins. Co., no. 2:16-cv-01275-GMN-CWH, 2017 WL 4349017 (D. Nev. Sept. 29, 2017) (“[T]he Court will interpret Plaintiff's claim for declaratory relief as a request for a remedy rather than a separate cause of action . . . .”). BNYM requests a remedy of declaratory relief, and as this is not a substantive cause of action, the court will not reconsider its order granting SFR's motion to dismiss as to this claim. See Wells Fargo, 2017 WL 1902158, at *4.

         While BNYM seeks to place blame on the court for dismissing its complaint just beyond the expiration of the statute of limitations period, BNYM's current predicament is fundamentally due to its own failure to initially name the HOA as a defendant in this action. Further, BNYM had five (5) months between the filing of SFR's motion to dismiss and the expiration of the statute of limitations in which to request leave from the court to amend its complaint to add the HOA as a defendant. Despite BNYM's knowledge that dismissal based on Rule 19 grounds was possible, BNYM failed to file such a motion.

         Nonetheless, the court recognizes that joinder, and not dismissal, was appropriate in this case. Pursuant to Rule 19(a), once determining the necessary status of an absent party, the next step “is for the court to determine whether it is feasible to order that the absentee be joined.” Thunder Properties, Inc. v. Wood, no. 3:14-cv-00068-RCJ-WGC, 2015 WL 1926768, at *2 (D. Nev. April 28, 2015) (citing E.E.O.C. v. Peabody Western Coal Co., 400 F.3d 774, 779 (9th Cir. 2005)). Joinder is not feasible “when venue is improper, when the absentee is not subject to personal ...


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