Amtrust Bank et al v. Lewis et al

Filing 226

ORDER. IT IS ORDERED that Five Springs LLCs 216 Motion to Intervene for the Limited Purpose of Retraining Wrongful Foreclosure is DENIED. Signed by Magistrate Judge Cam Ferenbach on 12/28/15. (Copies have been distributed pursuant to the NEF - PS)

UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA
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FDIC as Receiver for AMTRUST BANK, f/k/a
Ohio Savings Bank, IOTA VIOLET, LLC, an
Arizona limited liability company, et. al.,

Case No. 2:10–cv–439–JCM–VCF
ORDER

Plaintiffs,
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vs.

MOTION TO INTERVENE FOR THE LIMITED
PURPOSE OF RESTRAINING WRONGFUL
FORECLOSURE (DOC. #216)

REX H. LEWIS, an individual, et. al.,

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Defendants.
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This matter involves the IOTA entities’ (collectively “the Plaintiffs”) deficiency judgment action

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against Rex H. Lewis for defaults on five commercial loans guaranteed by Lewis. (Doc. #1). Before the

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court, is nonparty Five Springs LLC’s Motion to Intervene for the Limited Purpose of Restraining

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Wrongful Foreclosure (Doc. #216), Plaintiffs’ response (Doc. #221), Lewis’ joinder (Doc. #222), and
Plaintiffs’ Supplement to Response to Motion to Intervene (Doc. #223). For the reasons stated below,

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nonparty Five Springs LLC’s motion to intervene is denied.
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I. BACKGROUND
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On April 28, 2014, Plaintiffs obtained a judgement in excess of fifty million dollars against
Lewis. (Doc. #59). The Plaintiffs then engaged in post-judgment discovery.
Plaintiffs obtained a writ of execution against Lewis’ residence located at: 34 Quail Hollow

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Drive, Henderson, Nevada 89104 (the “Henderson property”). (Doc. #174). Lewis’ residence was sold at

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public auction on December 10, 2015 at 10:00am. (Doc. #220). On December 10, 2015, the same day

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Lewis’ residence was sold, nonparty Five Springs LLC moved to intervene to restrain the foreclosure

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sale of the Henderson property. Five Springs LLC argued, among other issues, that it was entitled to

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intervention as a matter of right because it was the legal title holder of the Henderson property, it was
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not a party to the underlying deficiency action against Lewis, and it was not served with process in a

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related fraudulent transfer action filed in state court. (Doc. #216). Lewis’ joinder reiterates Five Springs

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LLC’s arguments about the wrongfulness of the foreclosure sale. (Doc. #222). The Plaintiffs’

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supplement provides a letter that demonstrates that Five Springs LLC was aware that the Henderson

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property was subject to execution on April 3, 2015. (Doc. #223).

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II. LEGAL STANDARD
“On timely motion, the court must permit anyone to intervene who: … (2) claims an interest
relating to the property or transaction that is the subject of the action and is so situated that disposing of
the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless

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existing parties adequately represent the interest.’ FED. R. CIV. P. 24(a)(2).
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The court considers “three criteria in determining whether a motion to intervene is timely: (1) the
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stage of the proceedings; (2) whether the parties would be prejudiced; and (3) the reason for any delay in
moving to intervene.” Nw. Forest Res. Council v. Glickman, 82 F.3d 825, 836 (9th Cir. 1996).

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“[P]ostjudgment intervention is generally disfavored because it creates ‘delay and prejudice to existing

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parties.’” Calvert v. Huckins, 109 F.3d 636, 638 (9th Cir. 1997).

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“The prospective intervenor bears the burden of demonstrating that the existing parties do not

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adequately represent its interests.” Glickman, 82 F.2d at 838. “Where an applicant for intervention and

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an existing party ‘have the same ultimate objective, a presumption of adequacy of representation

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arises.’” Id.
“A federal court ‘does not have jurisdiction to give opinions upon moot questions.’” Tate v.

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Univ. Med. Ctr. Of S. Nevada, 606 F.3d 631, 634 (9th Cir. 2010 (citing Am. Rivers v. Nat’l Marine
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Fisheries Serv., 126 F.3d 1118, 1123 (9th Cir. 1997)). “A claim ‘is moot when the issues presented are
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no longer live or the parties lack a legally cognizable interest in the outcome. The basic question is
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whether there exists a present controversy as to which effective relief can be granted.’” Id. (citing
Outdoor Media Group, Inc. v. City of Beaumont, 506 F.3d 895, 900 (9th Cir. 2007).
III. DISCUSSION

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The parties present one question: whether nonparty Five Springs LLC may intervene as a matter

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of right 1 for the limited purpose of restraining an allegedly wrongful foreclosure.

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1.

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Five Springs LLC May Not Intervene as a Matter of Right
Five Springs LLC contends, without citing to authority, that its motion to intervene is timely and

that neither Lewis nor any other defendant adequately represents its interests. (Doc. #216 at 8). The
Plaintiffs argue that Five Springs LLC’s motion to intervene is untimely, as it was brought on the same

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day as the Henderson property’s foreclosure sale, and the Lewis adequately represents Five Springs
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LLC’s interests. The court agrees with the Plaintiffs, Five Springs LLC’s motion to intervene is
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untimely and its interests are adequately represented by Lewis.
a.

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Five Springs LLC’s Motion to Intervene is Untimely

Five Springs LLC’s motion to intervene is untimely because it fails to satisfy any of the three

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criteria for timeliness. Five Springs LLC does not dispute that it waited until post judgment, a time

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disfavored for intervention, to move to intervene. Id. at 5. Five Springs LLC alleges that it is prejudiced

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by the writ of execution, but Five Springs LLC fails to address why Plaintiffs would not be prejudiced

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by Five Springs LLC’s intervention on the day of the foreclosure sale. Id. Five Springs LLC also offers

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no explanation why it waited until a writ of execution was recorded to intervene when it had been aware

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The parties do not raise the issue of whether Five Springs LLC should be allowed to permissively intervene under Federal
Rule of Civil Procedure 24(b). (Doc. #216 at 7-8); (Doc. #221 at 6). As the parties did not brief the issue of permissive
intervention, the court does not address it.

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of the underlying deficiency action against Lewis since April 3, 2015. (Doc. #223). For these reasons,
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the court finds Five Springs LLC’s motion to intervene untimely.
b.

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Five Spring LLC’s Interests Are Adequately Represented by Lewis

If even Five Springs LLC had timely moved to intervene, its interests are adequately represented

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by Lewis. Five Springs LLC fails to argue why Lewis cannot adequately represent its interests. Five

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Springs LLC, as the legal title holder, and Lewis, who lived in the Henderson property as his residence,

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had the same objective: prevent the foreclosure sale of the home. The LLC offered no reason and cited

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to no authority to demonstrate why Lewis could not adequately represent its interest. The court thus

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finds Lewis adequately represented Five Springs LLC’s interests for the purpose of restraining the
Henderson property’s foreclosure sale.

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2.

Five Springs LLC’s Claim that the Foreclosure of the Henderson Property is Wrongful is

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Moot
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Five Springs LLC moved to intervene to restrain an allegedly wrongful foreclosure sale of the
Henderson property on December 10, 2015. That same morning, at 10:00a.m., the Henderson property

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was sold at public auction in satisfaction of the Plaintiffs writ of execution. (Doc. #220). As there is no

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pending foreclosure sale to restrain, Five Springs LLC’s motion is moot.

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ACCORDINGLY, and for good cause shown,

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IT IS ORDERED that Five Springs LLC’s Motion to Intervene for the Limited Purpose of

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Retraining Wrongful Foreclosure is DENIED.
IT IS SO ORDERED.
DATED this 28th day of December, 2015.

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_________________________
CAM FERENBACH
UNITED STATES MAGISTRATE JUDGE

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