United States District Court, D. Nevada
BAYVIEW LOAN SERVICING, LLC, substituted for Wilmington Savings Fund Society, FSB per ECF No. 33, Plaintiff,
v.
MARTHA C. TREJO, et al., Defendants.
ORDER
MIRANDA M. DU CHIEF UNITED STATES DISTRICT JUDGE
I.
SUMMARY
This
dispute involves a homeowners' association
(“HOA”) foreclosure sale of the property located
at 6039 Sun Appello Ave., Las Vegas, Nevada 89122 (the
“Property”). (See ECF No. 1 at 2.) Before the
Court is Defendant Martha C. Trejo's motion to set aside
default judgment (“Motion”).[1] (ECF No. 47.) For
the reasons explained below, the Court will deny the Motion.
II.
BACKGROUND
In
September 2007, Trejo purchased the Property by obtaining a
loan evidenced by a note (“Note”) and secured by
a deed of trust (“DOT”). (ECF No. 45 at 1.)
Through a series of assignments recorded against the
Property, Plaintiff Bayview Loan Servicing, LLC is now the
beneficiary of the DOT and holder of the Note. (Id.)
On March 1, 2009, Defendant defaulted on the Note and failed
to pay her HOA dues, resulting in the HOA initiating
foreclosure proceedings. (Id. at 2.) On January 11,
2011, Las Vegas Development, LLC bought the Property at the
HOA sale and sold it to Co-Defendant Airmotive Investments,
LLC (“Airmotive”) on February 24, 2011. (ECF No.
1 at 2, 5.)
On
April 4, 2017, Plaintiff's predecessor in interest filed
this action against Airmotive and Trejo. (ECF No. 1.) On
April 27, 2017, the Complaint and Summons were personally
served on Trejo (ECF No. 11), but she did not appear or
otherwise respond. She alleges that, as a 72-year-old
Hispanic women who speaks English as a second language, she
relied on the advice of her friends and family “that
the action only really related to the current owner of the
Property, [Airmotive] and the Plaintiff; not with
[Trejo].” (ECF No. 47 at 8.) On May 31, 2018, Chicago
Title Insurance Company (“Title Company”) sent
Trejo a demand letter that she reimburse the company $2,
026.66 for paying off the HOA lien on the Property. (ECF No.
47-1.) Trejo remitted $1, 000.00 to the Title Company to
settle the account and assumed “this payment was the
same payment for which she had been sued by the
Plaintiff.” (ECF No. 47 at 8.)
On
November 8, 2018, the Clerk of Court entered default against
Trejo. (ECF No. 37.) On December 13, 2018, Plaintiff served
Trejo with a motion for leave to file documents under seal in
support of Plaintiff's anticipated application for
default judgment. (ECF No. 38.) The Court denied this motion
without prejudice. (ECF No. 39.) On January 17, 2019,
Plaintiff served Trejo its motion to file documents under
seal and application for default judgment against her. (ECF
Nos. 40, 41.) On February 26, 2019, the Court granted
Plaintiff's motion for default judgment (ECF No. 43) and
entered the order on March 11, 2019 (ECF No. 45.) On March
13, 2019, Trejo finally appeared and filed this counseled
Motion. (ECF No. 47.)
III.
LEGAL STANDARD
Federal
Rule of Civil Procedure Rule 60(b) provides that a court may
relieve a party from a final judgment only in the following
circumstances: (1) mistake, inadvertence, surprise, or
excusable neglect; (2) newly discovered evidence; (3) fraud;
(4) the judgment is void; (5) the judgment has been
satisfied; or (6) any other reason justifying relief from the
judgment. Stewart v. Dupnik, 243 F.3d 549, 549 (9th
Cir. 2000); see also De Saracho v. Custom Food Mach.,
Inc., 206 F.3d 874, 880 (9th Cir. 2000) (noting that the
district court's denial of a Rule 60(b) motion is
reviewed for an abuse of discretion). A district court has
discretion to correct a judgment for mistake caused by the
party, counsel, or even the court. Fid. Fed. Bank, FSB v.
Durga Ma Corp., 387 F.3d 1021, 1024 (9th Cir. 2004);
Kingvision Pay-Per-View Ltd. v. Lake Alice Bar, 168
F.3d 347, 350 (9th Cir. 1999).
A court
may find excusable neglect by applying the “good
cause” standard. TCI Grp. Life Ins. Plan v.
Knoebber (“TCI Group”), 244 F.3d
691, 696 (9th Cir. 2001), overruled on other grounds by
Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 121
(2001). That standard requires a court to consider the three
following Falk factors: “‘(1) whether
the plaintiff will be prejudiced, (2) whether the defendant
has a meritorious defense, and (3) whether culpable conduct
of the defendant led to the default.'” Brandt
v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 1111
(9th Cir. 2011) (quoting Falk v. Allen, 739 F.2d
461, 463 (9th Cir. 1984)). The court may refuse to set aside
default if it holds any one of the three factors is true.
U.S. v. Signed Pers. Check No. 730 of Yubran S.
Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010). However,
“‘judgment by default is a drastic step
appropriate only in extreme circumstances; a case should,
whenever possible, be decided on the merits.'”
Mesle, 615 F.3d at 1091 (quoting Falk, 739
F.2d at 463).
IV.
DISCUSSION
Trejo
argues that the Court should aside default judgment because
her delay was the result of mistake and excusable neglect
(Fed. R. Civ. P. 60(b)(1)).[2] (ECF No. 47 at 8.) For the
reasons explained below, the Court rejects both arguments.
Trejo
asserts she failed to answer the Complaint due to two
mistakes: (1) she thought this action only related to
Airmotive, not her; and (2) she thought that her check to the
Title Company would settle Plaintiff's claims against her
in this action. (Id.) Contrary to Trejo's first
argument, her second argument suggests that she knew she was
the target of this lawsuit from the start. Furthermore, the
Title Company sent Trejo a demand letter more than a year
after the Complaint was filed, which highlights her failure
to explain why she did not appear in the action up until that
point. Even if Trejo believed that she settled
Plaintiff's claims, she was on notice that she was
mistaken when Plaintiff repeatedly served her with documents
on December 13, 2018 (ECF No. 39) and January 17, 2019 (ECF
Nos. 40, 41) indicating that Plaintiff was seeking default
judgment against her. Nevertheless, she remained absent from
this case until she filed the Motion on March 13, 2019. (ECF
No. 47.) Because there are contradictions and gaps in
Trejo's excuses, this Court finds that her failure to
answer the Complaint was not due to mistake.
Trejo
asserts that her tardiness was due to excusable neglect, but
Plaintiff counters that she is culpable, and that her
tardiness has prejudiced Plaintiff. The Court agrees with
Plaintiff and finds that these ...