Ellis et al

Filing 245

ORDER GRANTING ECF No. 236 Motion for Order to Show Cause. Defendants shall have until 8/10/2016 to show cause as to why they are not complying with the court's December 16, 2015 order (ECF No. 235 ). Signed by Judge Larry R. Hicks on 7/26/2016. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***
MELINDA ELLIS, individually and on
behalf of all others similarly situated,

3:09-cv-0428-LRH-WGC

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Plaintiff,

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v.

ORDER

ALESSI
TRUSTEE
CORPORATION;
DAVID ANOTHONY ALESSI; ALESSI &
KOENIG, LLC; and DOES I through XX,

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Defendants.

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Before the court is plaintiff Melinda Ellis’ (“Ellis”) motion for an order to show

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cause for failure to comply with the court’s order. ECF No. 236. Defendants Alessi

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Trustee Corporation (“ATC”), David Anthony Alessi (“Alessi”), and Alessi & Koenig LLC

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(“A&K”) (collectively “Defendants”), filed an affidavit from Alessi in opposition to the

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motion for order to show cause (ECF No. 237), but did not file an actual opposition

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containing any points and authorities. Thereafter, Ellis filed a notice of non-opposition.

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ECF No. 239.

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I.

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Facts and Procedural History
In January 2000, Ellis purchased real property in the Arrow Creek subdivision of

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Washoe County, Nevada. In December 2000, Ellis purchased another property in the

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same subdivision. Both properties were subject to recorded Covenants, Conditions, and

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Restrictions (“CC&Rs”) which include the collection of homeowner’s association (“HOA”)

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dues for the care and maintenance of the subdivision.

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In early 2008, Ellis defaulted on her HOA obligations for both properties. In

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response, Arrow Creek retained defendant A&K, along with its separately formed

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collection services company defendant ATC to collect on Ellis’ delinquent assessments.

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ATC and A&K contacted Ellis to collect on the HOA dues and then began non-judicial

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foreclosure proceedings against her in an attempt to collect the delinquent

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assessments. During this process, defendants sent Ellis collection notices and recorded

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liens against the properties in ever increasing amounts as defendants added their own

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costs and fees to the collection amounts.
On July 15, 2009, Ellis filed a complaint against defendants alleging three causes

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of action: (1) breach of fiduciary duty; (2) violation of the Fair Debt Collection Practices

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Act (“FDCPA”); and (3) civil racketeering. ECF No. 1, Exhibit A.
A jury trial was held on Ellis’ claims from January 20, 2015, through January 26,

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2015. Upon the close of Ellis’ case in chief, defendants moved for judgment as a matter

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of law on Ellis’ claims. The court granted the motion as to Ellis’ breach of fiduciary duty

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claim but denied the motion as to the civil racketeering and FDCPA claims. On January

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26, 2015, the jury returned a verdict in favor of Ellis on her remaining claims, and

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awarded her approximately $233,000.00 in damages.
Following the verdict, the parties reached an agreement regarding a stay of the

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judgment pending defendants’ appeal. ECF No. 23. The parties’ stipulation included

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terms stating that A&K would make certain monthly payments to Ellis pending

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defendants’ appeal and Ellis would be granted a first priority security interest in certain

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parcels of real property owned by defendants. Id. The parties’ stipulation was approved

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by the court on December 16, 2015. ECF No. 235. Since the stipulation, A&K has only

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made two monthly payments to Ellis, has not granted a first priority security interest in

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any property, and has indicated that it will not be granting any security interest to Ellis.

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Thereafter, Ellis filed the present motion for order to show cause. ECF No. 236.

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II.

Discussion
Pursuant to Title 18, United States Code, Section 401, a court may hold any

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party in civil contempt who fails to comply with or violates a court order. 18 U.S.C. §

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401(3). A party violates a court order when “it fails to take all the reasonable steps

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within [its] power to insure compliance.” In re Crystal Palace Gambling Hall, Inc., 817

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F.2d 1361, 1365 (9th Cir. 1987). A party seeking an order of contempt has the burden to

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show, by clear and convincing evidence, that the opposing party violated a specific and

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definite order of the court. FTC v. Affordable Media, 179 F.3d 1228, 1239 (9th Cir.

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1999). A party moving for an order to show cause for contempt of a court order must

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establish that defendant willfully violated a court order and that the violation was not

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based on a good faith or reasonable interpretation of the order. See United States v.

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Bright, 596 F.3d 683, 694 (9th Cir. 2010).
Here, Ellis seeks an order to show cause because defendant A&K is not

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complying with the court’s order on the parties’ stipulation to stay judgment pending

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appeal. In opposition, defendants state in their affidavit that their agreement to grant a

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first priority security interest in the form of a deed of trust was an “agreement to agree”

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rather than an agreement itself. This court disagrees. The parties clearly made an

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agreement which was signed by both parties, filed before this court, and then executed

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into an order by this court. ECF No. 233; ECF No. 235. This agreement included an

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obligation to make monthly payments to Ellis and the granting of a first priority security

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interest in certain real property. While defendants have made some payments and kept

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in contact with Ellis, they have not made all payments required. Furthermore, they have

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not granted a first priority security interest to Ellis, and have indicated to Ellis that they

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will not be doing so. Accordingly, the court finds good cause exists for an order to show

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cause why defendants should not be held in contempt of court for violation of the court’s

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order.

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IT IS THEREFORE ORDERED that plaintiff’s motion for order to show cause
(ECF No. 236) is GRANTED.

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IT IS FURTHER ORDERED that defendants shall have fourteen (14) days from

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entry of this order to show cause as to why they are not complying with the court’s

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December 16, 2015 order.

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IT IS SO ORDERED.

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DATED this 26th day of July, 2016.

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LARRY R. HICKS
UNITED STATES DISTRICT JUDGE