United States District Court, D. Nevada
THE BANK OF NEW YORK MELLON FKA THE BANK OF NEW YORK, AS TRUSTEE FOR THE CERTIFICATEHOLDERS OF CWALT, INC., ALTERNATIVE LOAN TRUST 2007-AL1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-AL1, a New York corporation, Plaintiff,
HIGHLAND RANCH HOMEOWNERS ASSOCIATION, a Nevada corporation; AIRMOTIVE INVESTMENTS, LLC, a Nevada limited liability company; LETICIA RANGEL DE LOPEZ, an individual; LUIS LOPEZ-LANDEROS, an individual; DOES 1 through 10, inclusive, and ROES 1 through 10, inclusive, Defendants.
R. HICKS, UNITED STATES DISTRICT JUDGE.
Bank of New York Mellon, FKA The Bank of New York as Trustee
for the Certificateholders of CWALT, Inc., Alternative Loan
Trust 2007-AL1, Mortgage Pass-Through Certificates, Series
2007-AL1 (“BoNYM”), moves this court for default
judgment against defendants Leticia Rangel De Lopez (ECF No.
50) and Luis Lopez-Landeros (ECF No. 51) pursuant to Federal
Civil Procedure Rule 55. Defendants have failed to respond.
Because the requirements of default judgment are met in this
case and relief is warranted, the court will grant
BoNYM's motion and order the clerk of court to enter
judgment in its favor.
matter arises from a nonjudicial foreclosure sale by Highland
Ranch Homeowners Association (“Highland Ranch”)
on real property located at 6185 Arapaho Drive, Sun Valley,
Nevada 89433 (“the property”) under Nevada
Revised Statute (“NRS”) § 116.3116 et.
seq. ECF No. 1 ¶ 6; ECF No. 34 at 2. In 2006,
Leticia Rangel de Lopez and Luis Lopez-Landeros
(“borrowers”) purchased the property, executing a
deed of trust with lender Alliance Bankcorp and designating
Mortgage Electronic Registration Systems Inc. (MERS) as the
beneficiary, in the amount of $229, 600.00. ECF No. 1 ¶
8; ECF Nos. 34-1; 43-1. The deed was recorded in the Washoe
County Recorder's Office on December 4, 2006, Document
Number 3470178. ECF Nos. 34-1; 43-1. MERS subsequently
assigned the deed of trust to BoNYM and recorded the
assignment in the Washoe County Recorder's Office on July
30, 2013. ECF No. 34-4.
the borrowers failed to pay their HOA assessments, Highland
Ranch filed the applicable notices regarding foreclosure on
its superpriority lien. See ECF Nos. 34-5; 34-6;
34-7; 43-2; 43-3; 43-5. Miles, Bauer, Bergstrom &
Winters, LLP (“Miles”), counsel for MERS as
nominee for Bank of America, attempted to tender the
superpriority total to Highland Ranch in order to discharge
the HOA's senior lien. ECF No. 34-8. However, Highland
Ranch refused to accept tender stating it was impermissibly
conditional. ECF No. 43-4. Highland Ranch then held a
nonjudicial foreclosure sale on or around March 28, 2013, and
the property was ultimately conveyed to Airmotive
Investments, LLC (“Airmotive”) via quitclaim deed
on February 29, 2016. ECF Nos. 34-9; 34-11; 34-6; 48-8.
one year later, BoNYM brought suit against Airmotive,
Highland Ranch, and the borrowers, alleging one cause of
action, quiet title, and seeking this court declare Highland
Ranch's foreclosure sale void ab initio and/or
that the foreclosure did not extinguish its first deed of
trust. ECF No. 1. After the borrowers failed to answer, move,
or otherwise plead before this court, the Clerk entered
notice of default against Luis Lopez-Landeros and Leticia
Rangel De Lopez on July 7, 2017. ECF No. 23. Per stipulation,
the court dismissed Highland Ranch on May 29, 2018. ECF No.
36. On February 25, 2019, this court then granted BoNYM's
motion for partial summary judgment finding that because the
tender was proper and unconditional, Airmotive took title to
the property subject to the first deed of trust. ECF No. 49.
BoNYM now moves this court for default judgment against the
borrowers. ECF Nos. 50, 51.
a default judgment is a two-step process governed by Federal
Rule of Civil Procedure 55. Eitel v. McCool, 782
F.2d 1470, 1471 (9th Cir. 1986). First, Rule 55(a) provides,
“[w]hen a party against whom a judgment for affirmative
relief is sought has failed to plead or otherwise defend, and
that failure is shown by affidavit or otherwise, the clerk
must enter the party's default.” Second, after the
clerk enters default, a party must seek entry of default
judgment under Rule 55(b). Nevertheless, while entry of
default by the clerk is a prerequisite to default judgment,
“[e]ntry of default does not entitle the non-defaulting
party to a default judgment as a matter of right.”
In re Villegas, 132 B.R. 742, 746 (9th Cir. BAP
granting or denying relief is within the court's
discretion. Id. The Ninth Circuit has identified
seven relevant factors in determining whether to grant
default judgment: (1) the possibility of prejudice to the
plaintiff; (2) the merits of the plaintiff's substantive
claim; (3) the sufficiency of the complaint; (4) the sum of
money at stake in the action; (5) the possibility of a
dispute concerning the material facts; (6) whether the
default was due to excusable neglect; and (7) the strong
policy favoring decisions on the merits. Eitel, 782
F.2d at 1471-72.
court takes the well-pleaded factual allegations in the
non-defaulting party's complaint as true, except as to
the amount of damages. Televideo Sys., Inc. v.
Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).
Finally, “[a] default judgment must not differ in kind
from, or exceed in amount, what is demanded in the
pleadings.” Fed.R.Civ.P. 54(c).
court finds that default judgment is warranted in this case.
First, BoNYM has satisfied the procedural requirements for
default judgment: both defendants were properly
served and failed to respond, BoNYM acquired the
clerk's entry of default on July 7, 2017, (ECF No. 23),
and there is no reason to believe either defendant is a
“minor or incompetent person. . . .” Fed.R.Civ.P.
the applicable Eitel factors weigh in favor of
granting this relief. First, “[c]ourts in this district
hold that a defendant's failure to respond or otherwise
appear in a case ‘prejudices a plaintiff's ability
to pursue its claims on the merits,' and therefore
satisfies this first factor.” Bank of America, N.A.
v. Terraces at Rose Lake Homeowners Ass'n, No.
2:16-cv-01106-GMN-PAL, 2018 WL 4778033, at *4 (D. Nev. Oct.
2, 2018); see e.g., Tropicana Entm't Inc. v.
N3A Mfg., Inc., No. 3:16-cv-0257-LRH-VPC, 2018 WL
2088871, at *2 (D. Nev. May 3, 2018) (“Tropicana will
be severely prejudiced if a default judgment is not entered
because defendants have shown an unwillingness to appear or
otherwise defend themselves in this action . . ..”);
Summit Canyon Res., LLC v. Tanksley, No.
2:15-cv-00656-RFB-VCF, 2018 WL 5116842, at *2 (D. Nev. Oct.
18, 2018) (“Because of [defendants'] inaction,
[plaintiff] cannot litigate its claim against [defendants] on
the merits”). Similarly, BoNYM will be severely
prejudiced if a default judgment is not granted because the
defendants have shown an unwillingness to appear or otherwise
defend themselves in this action.
second and third factors, the merits of the plaintiff's
substantive claim and the sufficiency of the complaint, also
weigh in favor of default judgment. As discussed fully in the
court's prior order granting BoNYM's motion for
summary judgment, because BoNYM's successor in interest
properly and unconditionally tendered the superpriority lien