Wilmington Trust, NA v. SFR Investments Pool 1, LLC
2:16-cv-02713
| D. Nev. | Apr 21, 2020Background
- Property at 1412 Andrew David Ave, North Las Vegas; borrower Raymond A. Schep obtained a $279,750 loan secured by a deed of trust and defaulted.
- Citibank (later Wilmington Trust as successor trustee) held the DOT by assignment recorded in 2010.
- Woodcrest HOA, through agent Nevada Association Services, recorded NRS Chapter 116 notices and conducted a nonjudicial HOA foreclosure sale.
- SFR Investments Pool 1, LLC purchased the Property at the HOA foreclosure sale and asserted crossclaims for declaratory relief/quiet title that the sale extinguished junior interests.
- Citibank and Schep failed to answer SFR’s crossclaims; the clerk entered defaults against both, and SFR moved for default judgment under Fed. R. Civ. P. 55.
- The court applied the Eitel factors, found they favored SFR, granted default judgment against Citibank and Schep, and directed the clerk to close the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment on SFR's crossclaims is proper | Clerk's defaults entered; SFR pleads meritorious quiet-title claim based on valid HOA sale | No response/opposition | Granted — court found Eitel factors favor SFR and exercised discretion to enter default judgment |
| Whether the HOA foreclosure under NRS Ch. 116 extinguished the DOT/junior interests | HOA foreclosed the superpriority lien; SFR purchased at a valid sale, extinguishing junior interests | No response | Court found SFR presented evidence making its quiet-title claim likely meritorious |
| Whether defendants' failures to appear were excusable neglect | SFR: defendants were served and offered no justification | No submissions asserting excusable neglect | Not excusable — service occurred and defendants did not respond within the required timeframes |
| Whether relief sought is limited to non-monetary declaratory relief | SFR seeks only quiet title/declaratory relief, not money damages | N/A | Weighs in favor of default judgment because no sum of money is at stake |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (sets factors for courts to consider when deciding default-judgment motions)
- Warner Bros. Entm't Inc. v. Caridi, 346 F. Supp. 2d 1068 (C.D. Cal. 2004) (entry of default judgment is discretionary, not automatic)
- PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172 (C.D. Cal. 2002) (failure to grant default judgment can leave plaintiff without recourse; prejudice factor supports relief)
- Chapman v. Deutsche Bank Nat'l Tr. Co., 302 P.3d 1103 (Nev. 2013) (quiet-title relief depends on superiority of title)
- Yokeno v. Mafnas, 973 F.2d 803 (9th Cir. 1992) (each party must plead and prove its own claim to property)