United States District Court, D. Nevada
BANK OF NEW YORK MELLON, f/k/a Bank of New York, as Trustee for the Certificateholders of the CWABS, Inc., Asset-Backed Certificates, Series 2006-2, Plaintiff,
SOMMERSET PARK HOMEOWNERS ASSOCIATION, et al., Defendants.
M. NAVARRO, CHIEF JUDGE UNITED STATES DISTRICT COURT
before the Court are the Motions for Default Judgment, (ECF
Nos. 100, 102- 03), filed by Defendant SFR Investments Pool
1, LLC (“SFR”), against Cross-Defendants Liliana
M. Morfin and Raul Chiang-Bueno (“Borrowers”),
Household Finance Realty Corporation (“HFRC”),
and Allied Collection Services, Inc. (“Allied”)
(collectively “Cross-Defendants”). For the
reasons addressed below, SFR's Motions for Default
Judgment are GRANTED.
case arises from the non-judicial foreclosure on real
property located at 6652 Lund Drive, Las Vegas, Nevada 89108
(the “Property”). (See Deed of Trust,
ECF No. 85-1). Borrowers financed their purchase of the
Property in 2005 by way of a loan in the amount of $228, 000
secured by a deed of trust. (Id.). Plaintiff Bank of
New York Mellon (“Plaintiff”) became beneficiary
under the deed of trust through an assignment recorded on
November 17, 2017. (See Assignments of Deed of
Trust, ECF Nos. 85-2-85-5).
Borrowers' failure to pay all amounts due, Sommerset Park
Homeowners Association (“HOA”), through its agent
Alessi & Koenig, LLC (“A&K”), initiated
foreclosure proceedings on the Property. Pursuant to NRS
Chapter 116, A&K recorded a notice of delinquent
assessment lien, following by a notice of default and
election to sell. (See Notice of Lien, ECF No.
85-8); (Notice of Default, ECF No. 85-9).
to the sale, Bank of America, N.A. (“BANA”),
Plaintiff's loan servicer at the time, sought to preserve
the first deed of trust by satisfying the HOA superpriority
lien. (See Request for Accounting, Ex. 2 to Miles
Bauer Aff., ECF No. 85-10). On December 29, 2010, BANA sent
A&K a check for $228.09, which A&K rejected. (Tender
Letter, Ex. 4 to Miles Bauer Aff.); (see also
A&K 30(b)(6) Dep. 46:24-47:5, ECF No. 85-11). A&K
proceeded with foreclosure proceedings, recording a notice of
trustee's sale. (Notice of Sale, ECF No. 85-14). On
December 5, 2012, A&K sold the Property to SFR for $7,
800.00. (See Trustee's Deed Upon Sale, ECF No.
10, 2019, the Court issued its decision with respect to HOA,
SFR, and Plaintiff's motions for summary judgment.
(See Order, ECF No. 98). The Court granted Plaintiff
summary judgment on its quiet title claim on the basis that
BANA, Plaintiff's predecessor in interest, validly
tendered the HOA superpriority lien, thus invalidating the
sale insofar as it purported to extinguish the deed of trust.
(Id. 11:3-10). Rather than unwinding the foreclosure
sale, however, the Court issued a declaration stating SFR
purchased the Property subject to Plaintiff's first deed
of trust, which continues to encumber the Property.
(Id.). As such, the Court denied SFR's motion
for summary judgment on Plaintiff's quiet title claim and
on SFR's competing quiet title claim. (Id.
the Court's Order, SFR filed the Motions presently before
the Court against Cross-Defendants, who SFR alleges purport
to claim junior, adverse interests in the Property.
Specifically, SFR seeks default judgment against: (1)
Borrowers, who granted the first deed of trust to
Plaintiff's predecessors in interest; (2) HFRC, the
holder of the second deed of trust executed by Borrowers; and
(3) Allied, who secured a default judgment against Borrowers
in state court. (See Second Deed of Trust, Ex. 1-B
to Mot. for Default J., ECF No. 100-3); (Assignments, ECF
Nos. 100-4, 100-5); (See Order Granting Default J.,
ECF No. 100-6).
a default judgment is a two-step process governed by Rule 55
of the Federal Rules of Civil Procedure. Eitel v.
McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, the
moving party must seek an entry of default from the clerk of
court. Fed.R.Civ.P. 55(a). Then, after the clerk of court
enters default, a party must separately seek entry of default
judgment from the court in accordance with Rule 55(b). Fed R.
Civ. P. 55(b). Upon entry of a clerk's default, the court
takes the factual allegations in the complaint as true.
Nonetheless, while the clerk's entry of default is a
prerequisite to an entry of default judgment, “a
plaintiff who obtains an entry of default is not entitled to
default judgment as a matter of right.” Warner
Bros. Entm't Inc. v. Caridi, 346 F.Supp.2d 1068,
1071 (C.D. Cal. 2004) (citation omitted). Instead, whether to
grant a default judgment is in the court's discretion.
Ninth Circuit has identified several relevant factors in
determining whether to grant default judgment including: (1)
the possibility of prejudice to the plaintiff; (2) the merits
of the plaintiff's substantive claims; (3) the
sufficiency of the complaint; (4) the sum of money at stake
in the action; (5) the possibility of a dispute concerning
material facts; (6) whether the default was due to the
excusable neglect; and (7) the strong public policy favoring
decisions on the merits. Eitel, 782 F.2d at 1471-72.
moves for default judgment against Borrowers, HFRC, and
Allied, requesting declaratory relief with respect to its
crossclaims. SFR has initiated the two-step process required
by Rule 55 by moving for clerk's entry of default against
Cross-Defendants, (ECF Nos. 80-84), which the clerk of court
subsequently entered, (ECF No. 87). In accordance with Rule
55(b), SFR brings the present Motions.
reviewing the documents and pleadings on file in this matter,
the Court finds that the Eitel factors support entry
of default judgment in favor of SFR, and against
Cross-Defendants. The first Eitel factor weighs in
favor of default judgment. 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. See,
e.g., Nationstar Mortg. LLC v. Operture, Inc.,
No. 2:17-cv-03056-GMN-PAL, 2019 WL 1027990, at *2 (D. Nev.
Mar. 4, 2019); ME2 Prods., Inc. v. Sanchez, No.
2:17-cv-667-JCM-NJK, 2018 WL 1763514, at *1 (D. Nev. Apr. 12,
2018); see also PepsiCo, Inc. v. Cal. Sec. Cans, ...