United States District Court, D. Nevada
LJS&G, LTD., a Nevada Corporation, d/b/a/ LEACH JOHNSON SONG & GRUCHOW, Plaintiff,
Z's, a Nevada Corporation, et al., Defendants, UNITED STATES OF AMERICA, Cross-Claim Plaintiff,
LAKE LAS VEGAS MASTER ASSOCIATION, Cross-Claim Defendant.
M. Navarro, District Judge United States District Court.
before the Court are the United States of America's (the
“Government's”) Motion for Default Judgment,
(ECF No. 53), and Motion for Disbursement of Funds, (ECF No.
55). No. parties filed a response. For the reasons discussed
below, the Court GRANTS the Government's
case stems from a March 21, 2013 foreclosure on real property
located at 31 Rue Mediterra, Henderson, Nevada (the
“Property”), which Z's Corporation had owned.
(Compl. Interpleader 1:26-3:17, Ex. 1 to Pet. Removal, ECF
No. 1-1). The foreclosure occurred due to outstanding fees
owed to the homeowners' associations for the Property:
South Shore Residential Community Association
(“SSRCA”) and Lake Las Vegas Master Association
(“LLVMA”). (Id. 4:7-11).
time of the foreclosure sale, the homeowners'
associations were not the only parties with liens on the
Property. The Government had filed a Notice of Federal Tax
Lien against the Property on January 5, 2010; and other
parties may have also had an interest, such as Leasecomm
Corporation, Lake Las Vegas Resort Association, the City of
Henderson, and Clark County. (Id. 1:26-3:17).
Accordingly, when $62, 325.30 remained in trust after the
foreclosure sale, Plaintiff LJS&G, LTD
(“Plaintiff”) filed a Complaint for Interpleader
in the Eighth Judicial District Court for the District of
Nevada on January 15, 2016, so that the court could properly
adjudicate the various parties' rights to the trust.
(Id. 4:11-13). After Plaintiff's deduction of
$2, 852.87 from the trust for its attorney's fees and
costs associated with the interpleader proceeding, a final
fund amount of $59, 472.43 remained in the court's
registry (“Interpleaded Funds”). (State Court
Pleadings, Ex. 2 to Pet. Removal, ECF No. 1-2).
23, 2016, the Government removed Plaintiff's Complaint
for Interpleader to this Court pursuant to 28 U.S.C. §
1442 because it was a civil action against the United States
in which the United States may have a right to property.
(Pet. Removal 2:1-3:4). On April 24, 2019, the Government
filed a Motion requesting the Court's distribution of the
Interpleaded Funds in the amount of $59, 472.43. (Mot.
Disbursement 2:7-5:3, ECF No. 44). The Court denied the
Government's Motion for Disbursement of Funds because the
Government had not secured, nor moved for, default judgment
against the remaining claimants in this case who had not
appeared and had not actively litigated their claims
(Leasecomm Corporation, Lake Las Vegas Resort Association,
and Z's Corporation). (Order, ECF No. 46). The Government
then secured Clerk's Entry of Default as to the claimants
on September 10, 2019; and filed the instant Motion for
Default Judgment alongside its re-filed Motion for
Disbursement of the Interpleaded Funds. (Entry of Default,
ECF No. 52)
purpose of interpleader is for a stakeholder to
‘protect itself against the problems posed by multiple
claimants to a single fund.'” Mack v.
Kuckenmeister, 619 F.3d 1010, 1024 (9th Cir. 2010)
(quoting Minn. Mut. Life Ins. Co. v. Ensley, 174
F.3d 977 (9th Cir. 1999)). An interpleader action general
involves a two-stage procedure. (Id.). “In the
first stage, the district court decides whether the
requirements for rule or statutory interpleader action have
been met by determining if there is a single fund at issue
and whether there are adverse claimants to that fund.”
(Id.) (quoting Rhoades v. Casey, 196 F.3d
592 (5th Cir. 1999)). “If the district court finds that
the interpleader action has been properly brought the
district court will then make a determination of the
respective rights of the claimants.” (Id.).
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. Id. The
Ninth Circuit has identified several factors relevant 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.
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 the Government and against
Z's Corporation, Leasecomm Corporation, and Lake Las
Vegas Resort Association. Those parties' failure to
respond or otherwise appear in a case prejudices the
Government's ability to pursue its claims on the merits,
and therefore satisfies the first Eitel 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.
the second and third Eitel factors, the Court finds
that the Government's claim to the Interpleaded Fund is
sufficiently pleaded and supported by evidence. Specifically,
the Government's Answer asserts a claim to the
Interpleaded Fund, alleging that the Government provided
“timely notice of and demand for payment” of the
federal tax lien assessments made upon Z's as required by
26 U.S.C. § 6308; and Z's failure to pay the
outstanding lien. (Answer ¶¶ 25-27, ECF No. 5). The
Government then recorded its lien in the Clark County
Recorder's Office on January 5, 2010. (Id.
¶ 28). Because a federal tax lien is perfected at the
time that the tax is assessed and continues in force
“until the liability for the amount so assessed . . .
is satisfied or becomes unenforceable by reason of lapse of
time, ” the Government's actions demonstrate the
merits of its claims over Z's and other junior
lienholders on the property such as Leasecomm and Lake Las
Vegas Resort Association. 26 U.S.C. § 6322; Premier
Trust, Inc. v. Duvall, 559 F.Supp.2d 1109, 1114 (D. Nev.
fourth Eitel factor is neutral here. See
Standard Ins. Co. v. Asuncion, 43 F.Supp.3d 1154, 1157
(W.D. Wash. 2014) (discussing how the fourth Eitel