Nexa Mortgage LLC v. Smart Mortgage Centers Incorporated

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8

Nexa M ortgage LLC, ) No. CV-23-00410-PHX-SPL ) 9 ) 10 Plaintiff, ) ORDER vs. ) ) 11 ) Smart Mortgage Centers Incorporated, ) 12 et al., ) 13 ) ) Defendants. ) 14 ) 15 Before the Court is Plaintiff Nexa Mortgage LLC’s (“Nexa’s”) Motion for Summary 16 Judgment (Doc. 66) and Motion for Leave to File Second Amended Complaint (Doc. 72). 17 Defendant Smart Mortgage Centers Incorporated (“Smart Mortgage”) has not filed any 18 response to either of the pending motions. 19 After Smart Mortgage’s counsel withdrew from this matter in February 2025 (Doc. 20 61), it was explicitly warned that, as a corporation, it could not proceed pro se in this action, 21 and that if it “fails to obtain counsel and respond to Plaintiff’s Motion for Summary 22 Judgment (Doc. 66), the Court advises Defendant that it will rule on the Motion for 23 Summary Judgment without a Response . . . .” (Doc. 69 at 2).1 Despite this explicit warning, 24

25 1 Smart Mortgage failed to respond to the Motion for Summary Judgment, but it also failed to timely respond to Nexa’s Requests for Admission, which were served on 26 February 13, 2025. (Doc. 66 at 3). Those requests may therefore be deemed admitted as a matter of law. See Fed. R. Civ. P. 35(a)(3) (“A matter is admitted unless, within 30 days 27 after being served, the party to whom the request is directed serves on the requesting party a written answer or objection . . . .”). “[S]ummary judgment cannot be granted by default 28 even if there is a complete failure to respond to the motion . . . .” Fed. R. Civ. P. 56 advisory 1 and despite Smart Mortgage being granted a 30-day extension to obtain new counsel and 2 respond to the pending Motion for Summary Judgment, no new counsel has entered an 3 appearance. By all appearances, Smart Mortgage has abandoned this litigation. 4 Nexa has moved for summary judgment as to Smart Mortgage’s liability only, as it 5 “seeks the opportunity to present evidence on damages at a later stage.” (Doc. 66 at 16). 6 However, the Court is disinclined to rule on the merits at this juncture, as Smart Mortgage’s 7 continued nonappearance may foreclose Nexa’s ability to take the damages issue to trial. 8 As to Nexa’s Motion for Leave to File Second Amended Complaint (Doc. 72), Nexa 9 explained that the amendment simply clarifies a number of allegations in its First Amended 10 Complaint and “incorporates the facts set forth in Plaintiff’s summary judgment briefing 11 as to the licensing process and conversations that occurred with regulators,” and 12 amendment would therefore not prejudice Smart Mortgage. (Doc. 72 at 2, 4). Given that 13 Smart Mortgage failed to respond to Nexa’s Motion for Leave to File Second Amended 14 Complaint (Doc. 72), this Court may deem its nonresponse as consent to the Motion being 15 granted. See LRCiv 7.2(i). 16 Accordingly, 17 IT IS ORDERED that Plaintiff Nexa Mortgage LLC’s Motion for Summary 18 Judgment (Doc. 66) is denied without prejudice. 19 IT IS FURTHER ORDERED that Plaintiff Nexa Mortgage LLC’s Motion for 20 Leave to File Second Amended Complaint (Doc. 72) is granted. Plaintiff shall have until 21 July 25, 2025 to file its Second Amended Complaint on the docket. Furthermore, Plaintiff 22 shall have until August 1, 2025 to serve a copy of the Second Amended Complaint on 23 Defendant Smart Mortgage Centers Incorporated and file proof of service with this Court.

24 committee’s note to 2010 amendment. However, “an opposing party’s failure to respond to the motion will be deemed an admission of the facts as presented by the moving party.” 25 Heinemann v. Satterberg, 731 F.3d 914, 917 (9th Cir. 2013); Fed. R. Civ. P. 56(e)(2) (if a party “fails to properly address another party’s assertion of fact as required by Rule 56(c), 26 the court may . . . consider the fact undisputed for purposes of the motion.”). Because of Smart Mortgage’s failure to respond both to the RFAs and the MSJ, it is deemed to have 27 admitted the relevant material facts, which could justify granting Nexa’s MSJ. However, the Court will deny the motion without prejudice at this time given that the procedural 28 posture of this case appears to be in limbo. 1 IT IS FURTHER ORDERED that Plaintiff Nexa Mortgage LLC shall have until 2| August 4, 2025 to either file an Application for Entry of Default against Defendant Smart 3 | Mortgage Centers Incorporated or file a status report apprising this Court of how it intends 4 to proceed with this matter given Defendant’s continued nonappearance. 5 IT IS FURTHER ORDERED that Plaintiff Nexa Mortgage LLC shall serve a copy of this Order on Defendant Smart Mortgage Centers Incorporated and file proof of service 7 | with this Court by August 1, 2025. 8 Dated this 21st day of July, 2025. 9

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