1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 JPMORGAN CHASE BANK, N.A., ) 4 ) Plaintiff, ) Case No.: 2:17-cv-00004-GMN-DJA 5 vs. ) ) ORDER 6 SFR INVESTMENTS POOL 1, LLC, et al., ) 7 ) Defendants. ) 8 )

9 10 Pending before the Court are the Motions for Default Judgment, (ECF Nos. 60, 62), filed 11 by SFR Investments Pool 1, LLC (“SFR”) against Cross-Claim Defendants Moushir Manious 12 (“Manious”) and United Guaranty Residential Insurance Company of North Carolina (“United 13 Guaranty”). For the reasons discussed below, the Court GRANTS SFR’s Motions for Default 14 Judgment. 15 I. BACKGROUND 16 This case arises from a foreclosure sale of real property located at 3030 Panorama Ridge 17 Drive, Henderson, Nevada 89052 (“the Property”), which occurred in January of 2013. The 18 foreclosing party was the homeowners association that governed the Property, Seven Hills 19 Master Community Association (“HOA”). The HOA initiated foreclosure proceedings based 20 on the statutory scheme in Chapter 116 of the Nevada Revised Statutes due to delinquent 21 assessments owed to the HOA by the Property’s owner (Manious). (Not. Delinquent 22 Assessment, Ex. 1-B to Mot. Default J., ECF No. 60-3); (Notice of Trustee’s Sale, Ex. 1-D to 23 Mot. Default J., ECF No. 60-5). SFR purchased the Property at the HOA’s foreclosure sale. 24 (Trustee’s Deed Upon Sale, Ex. 1-E to Mot. Default J., ECF No. 60-6). 25 1 On January 3, 2017, JPMorgan Chase Bank, N.A. (“JPMorgan”) commenced this action 2 by filing its Complaint against SFR, the HOA, and Manious, wherein JP Morgan claimed that 3 the HOA’s foreclosure sale was improper and invalid. (Compl. ¶¶ 43–73, ECF No. 1). SFR 4 then filed an Answer on March 20, 2017, and alleged various counter-claims and cross-claims. 5 (Answer/Counterclaim/Cross-Complaint, ECF No. 15). SFR’s cross-claims named Manious 6 and United Guaranty as cross-defendants based on the possibility of holding an interest in the 7 Property that could affect SFR’s interest. (Id. ¶¶ 3–4, 48–55). SFR served United Guaranty 8 with its Cross-Complaint on April 20, 2017, and then served Manious through several 9 publications in June and July of 2017. (Summons Returned Executed, ECF No. 26); (Aff. 10 Publication, ECF No. 35). 11 United Guaranty and Manious failed to appear or otherwise defend themselves in this 12 case. Accordingly, on July 18, 2019, SFR secured an Entry of Default against Manious; then 13 secured an Entry of Default against United Guaranty on January 15, 2020. (Entry of Default, 14 ECF Nos. 56, 61). SFR now moves for entry of judgment by default against Manious and 15 United Guaranty. (Mots. Default J., ECF No. 60, 62). 16 II. LEGAL STANDARD 17 Obtaining a default judgment is a two-step process governed by Rule 55 of the Federal 18 Rules of Civil Procedure. Eitel v. McCool,

(9th Cir. 1986). First, the 19 moving party must seek an entry of default from the clerk of court. Fed. R. Civ. P. 55(a). Then, 20 after the clerk of court enters default, a party must separately seek entry of default judgment 21 from the court in accordance with Rule 55(b). Upon entry of a clerk’s default, the court takes

22 the factual allegations in the complaint as true. 23 In determining whether to grant default judgment, courts are guided by the following 24 seven factors: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s 25 substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the 1 action; (5) the possibility of a dispute concerning material facts; (6) whether the default was 2 due to excusable neglect; and (7) the strong public policy favoring decisions on the merits. 3 Eitel, 782 F.2d at 1471–72. 4 III. DISCUSSION 5 Judgment by default in favor of SFR and against United Guaranty and Manious is 6 appropriate here based on the seven Eitel factors listed above. First, SFR has litigated this case 7 for nearly three years—with all of that time involving its cross-claims against United Guaranty 8 and Manious. (Answer/Counterclaim/Cross-Complaint, ECF No. 15). SFR would consequently 9 suffer prejudice without default judgment against United Guaranty and Manious by expending 10 additional resources to litigate the unopposed cross-claims. 11 Regarding the second and third Eitel factors, SFR provides evidence to support its 12 claims against United Guaranty and Manious, which are sufficiently alleged in the Cross- 13 Complaint, (ECF No. 15), based on the liberal pleading standard from Rule 8 of the Federal 14 Rules of Civil Procedure. SFR’s evidence supports its contention that the HOA followed NRS 15 116’s procedures to foreclose under a superpriority lien; and that the HOA’s foreclosure 16 permitted SFR to purchase the Property without United Guaranty and Manious continuing to 17 hold an interest in the Property. (Not. Delinquent Assessment, Ex. 1-B to Mot. Default J., ECF 18 No. 60-3); (Notice of Trustee’s Sale, Ex. 1-D to Mot. Default J., ECF No. 60-5); (Not. Default 19 and Election to Sell, Ex. 1-C to Motion Default J., ECF No. 60-4); (Not. Trustee’s Sale, Ex. 1- 20 D to Motion Default J., ECF No. 60-5); (Trustee’s Deed Upon Sale, Ex. 1-E to Mot. Default J., 21 ECF No. 60-6).

22 The fourth Eitel factor bears minimal consideration because SFR does not request a 23 monetary award against United Guaranty or Manious. (See Decl. Christopher J. Hardin ¶ 10, 24 Ex. 1 to Default J., ECF Nos. 60-1, 62-1). Rather, SFR requests declaratory judgment against 25 United Guaranty and Manious for the following: the foreclosure sale and resulting deed are 1 deemed valid; SFR is the rightful owner of title to the Property; and United Guaranty and 2 Manious have no right, title, or interest in the Property. This fourth factor thus does not defeat 3 SFR’s request for default judgment. 4 The remaining Eitel factors support judgment by default against United Guaranty and 5 Manious. The failure of United Guaranty and Manious to participate in this case renders a 6 likelihood of dispute over materials facts unlikely. And no facts suggest that default arises 7 from excusable neglect because SFR served United Guaranty and Manious with the Summons, 8 Answer, Counterclaim, Crossclaims, and Lis Pendens back in April and July of 2017. 9 (Summons Returned Executed, ECF No. 26); (Aff. Publication, ECF No. 35). SFR then earned 10 Entries of Default against United Guaranty and Manious over a year later. (Entry of Default, 11 ECF Nos. 56, 61). Based on these procedures taken by SFR, a decision on the merits appears 12 “impractical, if not impossible.” PepsiCo, Inc. v. Cal. Sec. Cans,

, 1177 13 (C.D. Cal. 2002.). Entry of judgment by default in favor of SFR and against United Guaranty 14 and Manious is therefore proper under these circumstances. 15 IV. CONCLUSION 16 IT IS HEREBY ORDERED that SFR’s Motions for Default Judgment, (ECF Nos. 60, 17 62), are GRANTED. 18 The Clerk of Court is instructed to enter judgment accordingly and close the case. 19 DATED this _1_8___ day of February, 2020. 20 21 ___________________________________ Gloria M. Navarro, District Judge 22 United States District Court 23 24 25