United States District Court, D. Nevada
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff FC Real Estate 3, LLC's Motion for
Default Judgement against Defendants Hendricks Trust and
Hutchings. ECF No. 41. The Court denies the motion without
FC Real Estate 3, LLC (“Plaintiff”) sued
Defendants in the Eighth Judicial District Court in Clark
County, Nevada on May 10, 2018. ECF No. 1-1. In its
complaint, Plaintiff seeks partition of property owned as
tenants in common with Defendants Kathryn Ann Davis, Clyde
Perkins, Geneva M. Perkins, Debra J. Stewart, Gary D.
Stewart, Jonathan Hendricks (“Hendricks”), and
Julia Marie Hutchings (“Hutchings”). Defendant
Internal Revenue Service (“IRS”) has a tax lien
on Hutchings's interest in the property. Id. The
IRS removed the case to this Court on June 5, 2018. ECF No.
1. Hutchings was personally served a copy of the complaint on
that same date. ECF No. 10. Hendricks had been served a copy
of the original complaint via personal service on May 25,
2018. ECF No. 8. Defendants Kathryn Ann Davis, Clyde Perkins,
Geneva M. Perkins, Debra J. Stewart, and Gary D. Stewart
answered the complaint on July 3, 2018. ECF No. 15. The IRS
answered on August 6, 2018. ECF No. 19. On August 20, 2018,
Plaintiff filed a notice of intent to take default against
Defendants Jonathan A. Hendricks as Trustee of the John A.
Hendricks 1983 Living Trust and Julia Marie Hutching. ECF No.
21. On October 22, 2018, Plaintiff moved for entry of default
against Hendricks and Hutchings, which the clerk entered on
October 23, 2018. ECF Nos. 37, 38. Plaintiff then filed the
instant motion for default judgment. ECF No. 41.
complaint alleges the following facts: the subject of the
action is certain undeveloped real property (the
“property”) consisting of approximately 80 acres
together with all water rights situated in Moapa Valley in
Clark County, Nevada. Plaintiff is the owner of an undivided
one-quarter interest, as a tenant in common with the
property. The property is concurrently owned by Defendants
Clyde and Geneva Perkins, Defendant Hendricks, Defendant
Hutchings, and Defendants Gary and Debra Stewart. Hendricks
owns an undivided one-half (1/2) interest in the property as
a tenant in common. Hutchings owns an undivided one-twenty
fourth (1/24) interest as a tenant in common. The IRS
recorded two tax liens on Hutchings's interest in the
property on August 9, 2012and October 18, 2012 in the amount
of $29, 003.28 and $95, 659.15 respectively. The answering
defendants and Plaintiff have since agreed to partition the
property by sale. Plaintiff thus seeks an order to sell the
defaulting defendants' interest in the property, to
convey any proceeds from Hutchings's share of up to $140,
609.84 to the IRS, and to interplead with the Court any
surplus amount from the sale of both defaulting party's
interests upon closing of escrow.
granting of a default judgment is a two-step process directed
by Rule 55 of the Federal Rules of Civil Procedure.
Fed.R.Civ.P. 55; Eitel v. McCool, 782 F.2d 1470,
1471 (9th Cir. 1986). The first step is an entry of
clerk's default based on a showing, by affidavit or
otherwise, that the party against whom the judgment is sought
“has failed to plead or otherwise defend.”
Fed.R.Civ.P. 55(a). The second step is default judgment under
Rule 55(b), a decision which lies within the discretion of
the Court. Aldabe v. Aldabe, 616 F.2d 1089, 1092
(9th Cir. 1980).
which a court, in its discretion, may consider in deciding
whether to grant a default judgment include: (1) the
possibility of prejudice to the plaintiff, (2) the merits of
the substantive claims, (3) the sufficiency of the complaint,
(4) the amount of money at stake, (5) the possibility of a
dispute of material fact, (6) whether the default was due to
excusable neglect, and (7) the Federal Rules' strong
policy in favor of deciding cases on the merits.
Eitel, 782 F.2d at 1471-72.
entry of default is made, the Court accepts all well-pleaded
factual allegations in the complaint as true; however,
conclusions of law and allegations of fact that are not
well-pleaded will not be deemed admitted by the defaulted
party. DirecTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854
(9th Cir. 2007). Additionally, the Court does not accept
factual allegations relating to the amount of damages as
true. Geddes v. United Fin. Grp., 559 F.2d 557, 560
(9th Cir. 1977). Default establishes a party's liability,
but not the amount of damages claimed in the pleading.
considering the seven factors, the Court finds that granting
default judgment is not warranted at this time because it
finds there may be a dispute of material fact as to the
ownership interests of the property. In support of its motion
for default judgment, Plaintiff attaches a declaration
listing the various ownership percentages in the property.
The declaration lists Hendricks's ownership interest as
one-half, and Hutchings's ownership interest as
one-twenty-fourth. To further substantiate its declaration,
Plaintiff also submits a “parcel ownership”
printout dated August 24, 2018. The printout lists
Hutchings's interest as one-eighth rather than one-twenty
fourth. Plaintiff does not explain the discrepancy in its
motion. Because property interests are at stake, the Court
will deny the motion without prejudice so that Plaintiff can
clarify the existing ownership interests in the property.