Petition for Writ of Certiorari — Marguerite DeSelms, Individually and as Trustee of the Circle Road Revocable Living Trust Dated November 11, 2010, Petitioner v. Bank of New York Mellon, fka The Bank of New York
Supreme Court briefMar 14, 2022
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APPENDIX TABLE OF CONTENTS
Opinions and Orders
Memorandum Opinion of the United States
Court of Appeals for the Ninth Circuit
(November 18, 2021).................................
la
Order of the United States Court of Appeals for
the Ninth Circuit (October 27, 2020)................. 5a
Mandate of the United States Court of Appeals
for the Ninth Circuit
(January 4, 2022)................................................... 8a
The Court Grants Plaintiffs Motion for
Attorneys’ Fees and Costs
(November 12, 2020)..........................
10a
The Court Denies the Motion to Vacate Its
Summary Judgment Order
(October 29, 2020).................................
25a
Judgement of the United States District Court
for the Central District of California
(August 28, 2020)...........................................
27a
The Court Grants Plaintiff/Counter-Defendant’s
Motion for Summary Judgment
(August 27, 2020).............................. ................... 30a
Order Continuing Trial, Pre-Trial Conference
and Related Deadline (August 5, 2020)........... 48a
Order to Strike Electronically Filed Document
(June 18, 2020)...................................................... 50a
APPENDIX TABLE OF CONTENTS (Cont.)
Minute Order Re: Settlement Proceedings
(May 27, 2020).........................................
52a
Order Denying Discovery Motion
(April 23, 2020)........................
54a
Order Re: Discovery Motion
(March 20, 2020)............
58a
United States District Court Central District
of California Order for Jury Trial
(December 11, 2019).....................................
59a
United States District Court Central District
of California Vacating Scheduling Conference
(December 11, 2019)............................................. 70a
Order Referral to ADR
(December 11, 2019)
72a
United States District Court Central District of
California Notice of Filing Discovery
(July 10, 2019)....................................................... 74a
Order of the United States District Court Central
District of California Setting Schedule
Conference (May 2, 2019).................................... 77a
Order Granting in Part and Denying in Part the
Bank of New York Mellon’s Motion to
Dismiss Marguerite Deselms’s Counterclaims
(March 25, 2019)................................................... 79a
Order Granting Defendant’s Motion to Set Aside
the Default (January 2, 2019)............................ 98a
APPENDIX TABLE OF CONTENTS (Cont.)
Order to Show Cause Re: Lack of Prosecution
(September 28, 2018)
104a
Order Dismissing the Claims Against Defendant
CAA, Inc. (September 21, 2018)
106a
Order Discharging in Part and Continuing in
Part the Order to Show Cause
(August 30, 2018)
109a
Order to Show Cause Re: Time Limit for Service
(August 16, 2018)
112a
Order of the United States District Court Central
District of California Denying Defendant’s
Motion to Dismiss (August 16, 2018)
114a
Order Re: Application for Permission
Electronic Filing (July 10, 2018)
for
128a
Standing Order Regarding Newly Assigned
Cases (May 23, 2018)
129a
Order Re: Transfer Pursuant to General Order
16-05 (May 22, 2018)
142a
Standing Order Regarding
Cases (May 17, 2018)
Newly Assigned
144a
Rehearing Order
Order of the United States Court of Appeals for the
Ninth Circuit Denying Petition for Rehearing
and Petition for Rehearing En Banc
(December 27, 2021)
154a
App.la
MEMORANDUM* OPINION OF THE
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
(NOVEMBER 18, 2021)
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE BANK OF NEW YORK MELLON, FKA
The Bank of New York, as Trustee for the Certificate
Holders CWALT, Inc. Alternative Loan Trust
2006-OC8 Mortgage Pass-Through
Certificates, Series 2006-OC8,
Plaintiff-co unterdefendant-Appellee,
v.
ALAN DAVID TIKAL, as Trustee
of the KATN Revocable Living Trust;
CAA, INC., a Nevada Corporation,
Defendants,
and
MARGUERITE DESELMS, Individually, and as
Trustee of the Circle Road Revocable Living Trust
Dated November 11, 2010,
Defendant-counterclaimant-Appellant.
This disposition is not appropriate for publication and is not
precedent except as provided by Ninth Circuit Rule 36-3.
App.2a
No. 20-55993
D.C. No. 5:18-cv-01044-PSG-MRW
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, Chief District Judge, Presiding
Submitted November 16, 2021**
San Francisco, California
Before: FERNANDEZ, SILVERMAN, and NGUYEN,
Circuit Judges.
Marguerite DeSelms appeals pro se from the
district court’s judgment in favor of Bank of New
York Mellon (BONY) on BONYs claims for cancellation
of a 2010 Substitution of Trustee and Full Recon
veyance document, and for a declaration that a 2006
deed of trust (the First Deed of Trust) was valid and
reflected BONYs senior hen on a property DeSelms had
purchased in San Bernardino, California (the Prop
erty). DeSelms also appeals the district court’s award
of attorney’s fees to BONY.l BONY brought this
action in its capacity as trustee for the certificateholders of CWALT, Inc., Alternative Loan Trust 2006OC8, Mortgage Pass-Through Certificates, Series 2006OC8. We affirm.
** The panel unanimously concludes this case is suitable for
decision without oral argument. See Fed. R. App. P. 34(a)(2).
1 The district court granted summary judgment to BONY on
DeSelms’ counterclaims as well, but DeSelms has not chal
lenged that aspect of the judgment on appeal. See Smith v.
Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).
App.3a
Reviewing de novo,2 we conclude that the district
court did not err in entering summary judgment on
BONY’S claims. Although DeSelms contended that
the 2010 Substitution of Trustee and Full Reconveyance
extinguished BONY’s interest in the Property, there
was no genuine issue of material fact that BONY
was entitled to cancellation of that document. See id.
BONY presented evidence that the document was
invalid because: it stated that the KATN Trust was
the beneficiary of the First Deed of Trust, even
though the KATN Trust had no interest therein; and
BONY suffered pecuniary loss because it was unable
to foreclose on the Property. See Cal. Civ. Code
§§ 3412-13; U.S. Bank Nat’l Ass’n v. Naifeh, 205 Cal.
Rptr. 3d 120, 128 (Ct. App. 2016). For the same
reason, the district court correctly determined that
declaratory judgment was appropriate because there
was a substantial controversy between the parties
regarding the validity of the First Deed of Trust, and
the evidence showed that document was valid. See
Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270,
272-73, 61 S. Ct. 510, 512, 85 L. Ed. 826 (1941).
None of DeSelms’ arguments to the contrary are
persuasive. BONY had standing to challenge the
2010 Substitution of Trustee and Full Reconveyance
because that document purported to extinguish BONY’s
interest in the First Deed of Trust. See Cal. Civ. Code
§ 3412; cf. Yhudai v. IMPAC Funding Corp., 205 Cal.
Rptr. 3d 680, 683 (Ct. App. 2016). BONY was the
proper party3 to bring this action, was not required
2 Evon v. Law Offs, of Sidney Mickell, 688 F.3d 1015, 1023-24
(9th Cir. 2012).
3 See Moeller v. Superior Court, 947 P.2d 279, 283 n.3 (Cal.
1997); Fed. R. Civ. P. 17(b)(3).
App.4a
to register in California,4 and provided sufficient evi
dence of its existence. DeSelms’ bare assertion that
BONY’S documents were forged does not create a
genuine issue of material fact in that regard. See
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586-87, 106 S. Ct.1348, 1356, 89
L. Ed. 2d 538 (1986). Moreover, the district court cor
rectly determined that DeSelms presented no com
petent evidence supporting her contentions regard
ing the purported separation of the note from the
deed of trust, the purported assignment of the loan
into a closed trust, and the purported payment of her
mortgage debt from other sources. See id.
We further conclude that the district court did
not abuse its discretion in awarding BONY $77,777.50
in attorney’s fees pursuant to Federal Rule of Civil
Procedure 54(d)(2). See Stetson v. Grissom, 821 F.3d
1157, 1163 (9th Cir. 2016); see also United States v.
Hinkson, 585 F.3d 1247, 1261-63 (9th Cir. 2009) (en
banc); MRO Commc’ns, Inc. v. Am. Tel. & Tel. Co.,
197 F.3d 1276, 1281 (9th Cir. 1999). The valid First
Deed of Trust explicitly provides for attorney’s fees in
these circumstances,5 and the district court’s lodestar
calculation was well-supported by the record. See
Caudle v. Bristow Optical Co., Inc., 224 F.3d 1014,
1028-29 (9th Cir. 2000).
AFFIRMED.
4 See Cal. Corp. Code § 191(d); see also id. § 2105(a).
5 See Port of Stockton v. W. Bulk Carrier KS, 371 F.3d 1119,
1121 (9th Cir. 2004); Cal. Civ. Proc. Code § 1021.
App.5a
ORDER OF THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
(OCTOBER 27, 2020)
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE BANK OF NEW YORK MELLON, FKA
The Bank of New York, as Trustee for the Certificate
Holders CWALT, Inc. Alternative Loan Trust
2006-OC8 Mortgage Pass-Through
Certificates, Series 2006-OC8,
Plaintiff-counterdefendant-Appellee,
v.
ALAN DAVID TIKAL, as Trustee
of the KATN Revocable Living Trust;
CAA, INC., a Nevada Corporation,
Defendants,
and
MARGUERITE DESELMS, Individually, and as
Trustee of the Circle Road Revocable Living Trust
Dated November 11, 2010,
Defendant-counterclaimant-Appellant.
No. 20-55993
App.6a
D.C. No. 5:18-cv-01044-PSG-MRW
Central District of California, Riverside
The district court’s judgment was entered on
August 28, 2020. Appellant filed a notice of appeal of
the August 28, 2020 judgment on September 24, 2020.
On September 22, 2020, the district court received
appellant’s filing titled as “defendant’s opposition to
plaintiffs motion for attorneys fees and motion to
strike and motion to alter or vacate the judgment Rule
60(b).” Appellant’s September 22, 2020 filing may, in
part, constitute one of the motions listed in Federal
Rule of Appellate Procedure 4(a)(4). Proceedings in
this court will be stayed until the district court deter
mines whether appellant’s September 22, 2020 filing
includes a motion listed in Federal Rule of Appellate
Procedure 4(a)(4) and, if so, whether the motion should
be granted or denied. See Fed. R. App. P. 4(a)(4); Leader
Nat’l Ins. Co. v. Indus. Indent. Ins. Co., 19 F.3d 444,
445 (9th Cir. 1994).
Within 21 days after the district court’s decision,
appellant must notify this court in writing of the
decision and state whether she wishes to move forward
with this appeal.
To challenge the decision on the post-judgment
motion, appellant must file an amended notice of
appeal within the time set by Federal Rule of Appellate
Procedure 4. See Fed. R. App. P. 4(a)(4).
A copy of this order will be sent to the district
court.
App.7a
FOR THE COURT:
Molly C. Dwver
Clerk of Court
Bv: Delaney Andersen_____
Deputy Clerk
Ninth Circuit Rule 27-7
App.8a
MANDATE OF THE UNITED STATES COURT
OF APPEALS FOR THE NINTH CIRCUIT
(JANUARY 4, 2022)
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE BANK OF NEW YORK MELLON,
as Trustee for the Certificate Holders CWALT, Inc.
Alternative Loan Trust 2006-OC8 Mortgage PassThrough Certificates, Series 2006-OC8,
FKA The Bank of New York,
Plaintiff-counter
defendant-Appellee,
v.
ALAN DAVID TIKAL, as Trustee
of the KATN Revocable Living Trust and
CAA, INC., a Nevada corporation,
Defendants,
and
MARGUERITE DESELMS, Individually, and as
Trustee of the Circle Road Revocable Living
Trust Dated November 11, 2010,
Defendant-counter
claimant-Appellant.
No. 20-55993
App.9a
D.C. No. 5:18-cv-01044-PSG-MRW
U.S. District Court for Central California, Riverside
The judgment of this Court, entered November 18,
2021, takes effect this date.
This constitutes the formal mandate of this Court
issued pursuant to Rule 41(a) of the Federal Rules of
Appellate Procedure.
FOR THE COURT:
Molly C. Dwver
Clerk of Court
Bv: Nixon Antonio Calleias Morales
Deputy Clerk
Ninth Circuit Rule 27-7
App.lOa
THE COURT GRANTS PLAINTIFF’S MOTION
FOR ATTORNEYS’ FEES AND COSTS
(NOVEMBER 12, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Before the Court is a motion for attorneys’ fees and
costs filed by Plaintiff The Bank of New York Mellon
(“Plaintiff’). See Dkt. # 110 (“Mot”). Defendant Mar
guerite DeSelms (“Defendant”) opposed, see Dkt. # 119
(“Opp.”), and Plaintiff replied, see Dkt. # 122 (“Reply”).
The Court finds the matter appropriate for decision
without oral argument. See Fed. R. Civ. P. 78; L.R. 715. After considering the moving, opposing, and reply
papers, the Court GRANTS Plaintiffs motion for
attorneys’ fees and costs.
App.lla
I.
Background
The Court has provided extensive factual back
ground in this case in its previous orders and reiterates
the relevant portions of the background here.
In 2006, DeSelms entered into a mortgage agree
ment with Bondcorp Realty Services, Inc., (“Bondcorp”)
as lender and Mortgage Electronic Registration Sys
tems, Inc. (“MERS”) as nominee beneficiary for Bond
corp. See August 26, 2020 Summary Judgment Order,
Dkt. # 103 (“&/ Ordef'), at 1. Pursuant to the mortgage
agreement, Bondcorp loaned DeSelms $340,000 to
purchase real property located at 3489 Circle Road
in San Bernardino, California (the “Property”). Id. In
connection with the loan, DeSelms executed a promis
sory note in favor of Bondcorp. Id. A deed of trust
(“First DOT”) securing that note in favor of Bondcorp
was recorded with the San Bernardino County
Recorder on August 14, 2006. Id.
Three years later, around August of 2009, DeSelms
defaulted on her mortgage. Id. at 2. A few months
later, DeSelms requested recordation of a document
in the County of San Bernardino that substituted
KATN Trust as the foreclosure trustee and released
the First DOT (“First DOT Reconveyance Attempt”),
supposedly on the authority of the beneficiary of the
First DOT. Id. That same day, DeSelms requested
recordation of a grant deed, which purported to
transfer title from herself to the Circle Road Trust,
and requested recordation of a deed of trust in favor
of Alan David Tikal, trustee of the KATN Trust, as
beneficiary. Id. Despite the First DOT Reconveyance
Attempt, DeSelms admitted under oath in bankruptcy
proceedings one year later that she owed $340,000
under the First DOT. Id.
App.l2a
On September 14, 2011, the beneficial interest
in the First DOT was assigned to BONY (“BONY
Assignment”), and this assignment was recorded with
the San Bernardino County Recorder on October 7,
2011. Id.
Between 2014 and 2017, DeSelms attempted to
obtain a loan modification from her loan servicers.
Id. When these efforts failed, BONY instituted fore
closure proceedings against the property. Id. In doing
so, BONY discovered the First DOT Reconveyance
Attempt, and cancelled the foreclosure sale. Id.
In 2018, BONY filed suit in this Court against
DeSelms, both individually and in her capacity as
trustee of the Circle Road Trust, as well as against
Alan David Tikal, as trustee of the KATN Revocable
Living Trust, and CAA, Inc.,l asserting three causes
of action, only two of which are relevant here:
First Cause of Action: Cancellation of Written
Instrument, seeking to have the Court adjudge
the First DOT Reconveyance Attempt void and
cancelled.
Third Cause of Action: Declaratory Relief, seeking
to have the Court declare the First DOT as a valid
and enforceable senior lien against the Property.
Id. at 3.
On August 26, 2020, the Court awarded BONY
summary judgment on its own claims and against
DeSelms’ counterclaims. See generally id. Consistent
1 BONY’S claims against Defendant CAA, Inc., were dismissed
by the Court without prejudice for failure to serve within 90
days, as required by Federal Rule of Civil Procedure 4. See Dkt.
#28.
App.l3a
with its Order, the Court entered a judgment in
BONYs favor, under which BONY is entitled to recover
attorneys’ fees and costs pursuant to the provisions
of the First DOT. See generally August 27, 2020 Judg
ment, Dkt. #104 (“Judgment”).2 BONY now moves to
recover its attorneys’ fees and costs. See generally
Mot.
II. Legal Standard
Under the “American Rule,” each party to a law
suit is generally responsible for its own attorneys’
fees. Hensley v. Eckerhart, 461 U.S. 424, 429 (1983).
However, under Federal Rule of Civil Procedure
54(d)(2), a party may move for an award of attorneys’
fees within fourteen days of the entry of judgment. The
motion must “specify the judgment and the statute,
rule, or other grounds entitling the movant to the
award,” as well as “state the amount sought or provide
a fair estimate of it.” Fed. R. Civ. P. 54(d)(2)(B)(ii)—
(hi).
If a fee award is appropriate, the court must then
ensure that the amount requested is reasonable. See
Hensley, 461 U.S. at 433-34. Reasonableness is gen
erally determined using the “lodestar” method, where
a court considers the work completed by the attor
neys and multiplies “the number of hours reasonably
expended on the litigation by the reasonable hourly
rate.” Grade v. Grade, 217 F.3d 1060, 1070 (9th Cir.
2000) (internal citations omitted); Hensley, 461 U.S.
at 433. The moving party has the burden to produce
evidence that the rates and hours worked are reason2 While the Court's judgment is dated August 27, 2020, it was
not entered until August 28, 2020.
App.l4a
able. See Intel Corp. v. Terabyte Inti., Inc., 6 F.3d 614,
622-23 (9th Cir. 1983). “The party opposing the
fee application has a burden of rebuttal that requires
submission of evidence to the district court challenging
the accuracy and reasonableness of the hours charged
or the facts asserted by the prevailing party in its
affidavits.” Gates v. Deukmejian, 987 F.2d 1392, 139798 (9th Cir. 1992).
III. Discussion
A. Jurisdiction to Rule on the Instant Motion
As an initial matter, DeSelms argues that BONY’S
motion for attorneys’ fees and costs is premature be
cause her appeal of the Court’s summary judgment
ruling is currently pending in the Ninth Circuit. Opp.
3:14-17, 4:14-16. The Court disagrees.
In Masalosalo by Masalosalo v. Stonewall Ins.
Co., 718 F.2d 955 (9th Cir. 1983), the issue before the
Ninth Circuit was “whether a district court acts
beyond its jurisdiction in awarding attorneys’ fees
after a notice of appeal has been filed and before [the
circuit] has issued its mandate.” Id. at 956. The
Court agreed with other circuits that, in such circum
stances, “an appeal from the merits does not foreclose
an award of attorneys’ fees by the district court.” Id.
Accordingly, the Court rejects DeSelms’s argument
that BONY’S fee motion is premature.
B. Requirements of Rule 54(d)(2)
As mentioned above, under Rule 54(d)(2), BONY’S
motion for attorneys’ fees (1) must have been filed
within fourteen days after entry of judgment, (2)
must specify the judgment and grounds entitling it to
App.l5a
the award, and (3) must state the amount sought.
Fed. R. Civ. P. 54(d)(2)(B)(i)-(iii).
First, the Court entered judgment in BONY’S favor
on August 28, 2020. See generally Judgment. Although
the judgment is dated August 27, it was not entered
until August 28. Id. Therefore, BONY argues that its
motion on September 11—fourteen days after August
28—was timely. Reply 8:4—6. DeSelms counters that
BONY’S motion is untimely because, due to an error
in its original fee motion, BONY filed an amended
version of its motion on September 14—i.e., more than
fourteen days after the Court entered judgment.
Opp. 4:17—5:5; Reply 8:6—14. BONY responds that its
filing of an amended motion “did nothing to prejudice
DeSelms” because the original motion erroneously
contained approximately thirty more hours than were
actually billed, resulting in fees that were roughly
$7,000 too high. Reply 8:8-14; Dkt. # 109. Because
(1) BONY’S original motion was timely, (2) BONY’S
amendment relates only to a calculation error, and
(3) the amendment actually favors DeSelms because
it requests approximately $7,000 less in fees, the
Court accepts the amended motion as timely filed
under Rule 54(d)(2)(B)(i).
Second, BONY requests the award as authorized
by the Court’s judgment and the First DOT. Mot.
10:10-28; Reply 8:22-28. This satisfies Rule 54(d)(2)
(B)(ii).
Third, BONY requests its lodestar fees in the
amount of $77,777.50. Mot. 14:23-25. This satisfies
Rule 54(d)(2)(B)(iii).
Accordingly, the Court finds that BONY has met
the procedural requirements of Rule 54(d)(2). The Court
App.l6a
must now consider whether the fee award is substan
tively appropriate and reasonable under the circum
stances.
C. Attorneys’ Fees Are Appropriate Under
the First DOT
The Court’s judgment “awarded [BONY] costs of
suit and reasonable attorneys’ fees as to DeSelms as
permitted by the provisions of the Deed of Trust.”
Judgment f 4. Therefore, the Court must now deter
mine whether BONY is entitled to its requested fees
under the First DOT.
Section 9 of the First DOT states:
Protection of Lender’s Interest in the Property
and Rights Under this Security Instrument.
If (a) Borrower fails to perform the covenants
and agreements contained in this Security
Instrument, (b) there is a legal proceeding
that might significantly affect Lender’s
interest in the Property and/or rights under
this Security Instrument (such as a proceeding
in bankruptcy, probate, for condemnation or
forfeiture, for enforcement of a lien which
may attain priority over this Security
Instrument or to enforce laws or regulations),
or (c) Borrower has abandoned the Property,
then Lender may do and pay whatever is
reasonable or appropriate to protect Lender’s
interest in the Property and rights under
this Security Instrument, including protecting
and/or assessing the value of the Property,
and securing and/or repairing the Property.
Lender’s actions can include, but are not
limited to: . . . (b) appearing in court; and (c)
App.l7a
paying reasonable attorneys’ fees to protect
its interest in the Property and/or rights
under this Security Instrument, including
its secured position in a bankruptcy pro
ceeding. . . .
Any amounts disbursed by Lender under
this Section 9 shall become additional debt
of Borrower secured by this Security Instru
ment. These amounts shall bear interest at
the Note rate from the date of disbursement
and shall be payable, with such interest, upon
notice from Lender to Borrower requesting
payment.
Declaration of Joshua M. Bryan, Dkt. # 106-1 (‘Bryan
Decl”), Ex. B (“Fee Provision'’), § 9.
BONY argues that DeSelms’s fraudulent recon
veyance and attempt to divest BONY of its security
interests violated the covenants of the First DOT,
and therefore that it is entitled to attorneys’ fees under
the First DOT’s Fee Provision. Mot. 13:17-26. The
closest that DeSelms comes to challenging this argu
ment is her bald conclusory statement that “[t]here
is no agreement requiring [her] to pay the fees,” Opp.
18:7, possibly because she continues to assert that the
First DOT is a forgery, id. 4:1-3, or because “[t]here is
no original signed agreement by [DeSelms] for fees,”
id. 13:20-14:7. In its summary judgment ruling, the
Court already rejected such assertions. SJ Order at 7;
Judgment ^ 2 (finding that DeSelms is bound by the
First DOT). Therefore, the Court finds that DeSelms
conceded this argument by failing to meaningfully
address it in her opposition brief. See Tapia v. Wells
Fargo Bank, N.A., No. CV 15-03922 DDP (AJWX), 2015
WL 4650066, at *2 (C.D. Cal. Aug. 4, 2015) (arguments
App.l8a
to which no response is supplied are deemed conceded);
Silva v. U.S. Bancorp, No. 5:10-cv-01854-JHN-PJWx,
2011 WL 7096576, at *3 (C.D. Cal. Oct. 6, 2011)
(same).
Accordingly, BONY is entitled to its fees under the
First DOT. As such, BONY is entitled to its requested
fees if they are reasonable.
D. Reasonableness of the Requested Fees
The Court must now determine whether BONY’s
requested fees are reasonable. BONY requests its
lodestar fees in the amount of $77,777.50. Mot. 14:2325.
The ‘lodestar’ is calculated by multiplying the
number of hours the prevailing party reasonably
expended on the litigation by a reasonable hourly
rate.” Caudle v. Bristow Optical Co., 224 F.3d 1014,
1028 (9th Cir. 2000) (citing Hensley, 461 U.S. at 424).
Unless some exceptional circumstances justify devi
ation, the lodestar is presumed reasonable. Quesada
v. Thomason, 850 F.2d 537, 539 (9th Cir. 1988). After
computing the lodestar, the district court is to assess
whether additional considerations, enumerated in Kerr
v. Screen Extras Guild. Inc., 526 F.2d 67, 70 (9th Cir.
1975), require the court to adjust the lodestar figure.
Caudle, 224 F.3d at 1028.
i. Lodestar Calculation—Reasonableness
of Hourly Rate
The Court must first determine whether BONY’s
requested rate of $265 per hour is reasonable. See
Caudle, 224 F.3d at 1028.
App.l9a
The reasonable hourly rate is the rate prevailing
in the community for similar work. See Gonzalez v.
City of Maywood, 729 F.3d 1196, 1200 (9th Cir. 2013)
(“[T]he court must compute the fee award using an
hourly rate that is based on the prevailing market
rates in the relevant community.” (citation omitted));
Viveros v. Donahue, CV 10-08593 MMM (Ex), 2013
WL 1224848, at *2 (C.D. Cal. Mar. 27, 2013) (“The
court determines a reasonable hourly rate by looking
to the prevailing market rate in the community for
comparable services.”). The relevant community is
the community in which the court sits. See Schwarz
v. Sec’y of Health & Human Serus., 73 F.3d 895, 906
(9th Cir. 1995). A court can rely on the declaration of
a prevailing plaintiffs attorney regarding the prevailing
fees in the community. See United Steelworkers of
Am. v. Ret. Income Plan For Hourly-Rated Employees
of ASARCO, Inc., 512 F.3d 555, 565 (9th Cir. 2008)
(district court properly relied on a declaration from
plaintiffs counsel to establish prevailing fees in ERISA
case).
BONY seeks an hourly rate of $265. Mot. 16:8-9.
BONY submits a declaration of counsel including a
description of the attorney’s experience and credentials.
Bryan Decl. K 9. Counsel has seventeen years of gen
eral litigation experience and has represented mortgage
lenders and servicers in suits related to secured
interests to mortgaged property for ten years. Id.
The Court also consults the 2018 Real Rate
Report: The Industry’s Leading Analysis of Law Firm
Rates, Trends, and Practices (“Real Rate Report”) as
a resource for analyzing BONYs request. See Eksouzian
v. Albanese, No. CV 13-728 PSG (AJWx), 2015 WL
12765585, at *4-*5 (C.D. Cal. Oct. 23, 2015). The Real
App.20a
Rate Report identifies attorney rates by location,
experience, firm size, areas of expertise and industry,
as well as specific practice areas, and is based on
actual legal billing, matter information, and paid and
processed invoices from more than eighty companies.
See Hicks v. Toys R’ Us-DeL, Inc., No. CV 13-1302 DSF
JCG, 2014 WL 4670896, at *1 (C.D. Cal. Sept. 2, 2014).
The Real Rate Report lists the median hourly rate
for all types of real estate associates as between $225
and $330. See Real Rate Report at 17. Additionally, it
lists the median hourly rate for finance and securities
associates working with “Investments and Other Fin
ancial Instruments” and “Loans and Financing” as
between $310 and $644. See id. at 13. Therefore, the
requested rate of $265 falls squarely within a reason
able range for counsel’s services.
Moreover, DeSelms does not specifically challenge
the requested rate as unreasonable, although she does
state that the “entire motion is a sham” because
“[t]here is no affidavit in support of fees; no attorney
fee bill; [and] no breakdown in the fees or costs.”
Opp. 24:4-7. To the extent that DeSelms’s argument is
relevant at all, it is meritless because there is a dec
laration in support of the fee request, and it explains
the requested award and lodestar calculation. See
generally Bryan Decl.
Accordingly, the Court accepts the requested rate
of $265 as reasonable.
ii. Lodestar Calculation—Reasonableness
of Hours Expended
“The fee applicant bears the burden of document
ing the appropriate hours expended in the litigation
App.21a
and must submit evidence in support of those hours
worked.” United States v. $28,000.00 in U.S. Currency,
802 F.3d 1100, 1107 (9th Cir. 2015) (quoting Gates v.
Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992)). “The
district court. . . should exclude from this initial fee
calculation hours that were not reasonably expended.”
Hensley, 461 U.S. at 434 (cleaned up). Hours not rea
sonably expended are those that are “excessive,
redundant, or otherwise unnecessary.” Id. A district
court may reduce hours by either conducting an
hour-by-hour analysis or by making an across-theboard percentage cut. See $28,000.00 in U.S. Currency,
802 F.3d at 1106.
BONY seeks compensation for 293.50 hours of
work. Mot. 16:22-24; Bryan Decl. Uf 10-11. Among
other things, these hours were spent on “filing and
serving the Complaint, responding to DeSelms’s
Counterclaim and Amended Counterclaim, extensive
law and motion practice on the pleadings, substantial
discovery, extensive communications with Defendant
in pro per, drafting the motion for Summary Judgment
and related briefing, trial preparation and drafting
the instant Motion.” Mot. 16:9-14. BONY argues that,
due to DeSelms’s pro se status, she “often filed lengthy
and convoluted motions and pleadings, most of which
required a response, and [ ] raised a discovery dispute
as to nearly every response to written discovery pro
vided by BONY,” which bolsters the reasonableness
of the hours its attorneys expended on this matter.
Id. 16:14—18. Moreover, BONY chose not to include
in its request 117.4 hours billed by three other attor
neys in this matter. Mot. 14:27-28; Bryan Decl. f 11.
DeSelms argues that BONY’s request “is so
outlandish . . . that it should be denied entirely.” Opp.
App.22a
17:8—9. However, besides her conclusion that the
request “for this case[,] which terminated at such an
unreasonably early juncture [,] is outrageous,” DeSelms
does not explain why the number of hours requested
is unreasonable. Id. 16:9-12. Therefore, the Court finds
that DeSelms conceded this point by failing to mean
ingfully address it in her opposition brief. See Tapia,
2015 WL 4650066 at *2; Silva, 2011 WL 7096576 at
*3. Moreover, the Court agrees with BONY that it
justifiably devoted substantial resources to litigating
this case through summary judgment. Mot. 16:9-18.
This dispute has been extensively litigated for more
than two years, and the parties have engaged in mul
tiple rounds of motion practice. Additionally, BONY
only seeks to recover a portion of its fees—declining
to include 117.4 hours of billed time—which rein
forces the reasonableness of the request. Accordingly,
the Court finds that the number of hours BONY
requests is reasonable.
In sum, the Court concludes that the rates and
hours described above are reasonable, for a total
lodestar amount of $77,777.50.
E. DeSelms’s Miscellaneous Opposition
Arguments
The Court now considers DeSelms’s various oppo
sition arguments, which tangentially address the issues
in BONYs motion (at best). See Florer v. Congregation
Pidyon Shevuyim, N.A., 639 F.3d 916, 923 n.4 (9th Cir.
2011) (the Court “liberally construe[s]” pro se filings,
holding them to a less stringent standard than docu
ments drafted by experienced lawyers (quoting Erick
son v. Pardus, 551 U.S. 89, 94 (2007))).
App.23a
First, DeSelms raises claims that the Court expli
citly rejected in its summary judgment motion, such
as that BONY does not exist, lacks standing to sue,
lacks the capacity to sue, that the First DOT was
forged or is otherwise invalid, and more. See Opp. 5:712:16, 14:4-16:4; see generally SJ Order. Having pre
viously rejected these conclusory (and largely frivolous)
arguments, the Court does not reconsider them here.
Second, DeSelms argues that “[t]here is no origi
nal signed agreement by [DeSelms] for fees” and that
BONY has not filed proof of a retainer agreement. Opp.
13:20—14:7. As discussed above, BONY seeks attorneys’
fees under the Court’s judgment and the First DOT.
As established in the Court’s judgment, DeSelms is
bound by the terms of the First DOT, which encum
bers the Property. Judgment f 2. Therefore, because
BONY can seek its fees under the First DOT, there is,
in fact, an agreement signed by DeSelms that requires
her to pay BONY’S fees.
Separately, to the extent that DeSelms argues
that, under Rule 54(d)(2)(B)(iv), BONY was required
to disclose the terms of its retainer agreement, she is
incorrect. Subsection (iv) only applies “if the court so
orders,” and the Court never ordered BONY to disclose
the terms of its fee agreement. See Fed. R. Civ. P. 54(d)
(2)(B)(iv). Nor did DeSelms move or otherwise request
that the Court issue such an order. Accordingly, the
Court rejects these arguments.
Finally, DeSelms argues that the Court should
deny BONY’S motion because BONY failed to meet
and confer. Opp. 19:18-23:12. The Court disagrees that
BONY failed to do so.
App.24a
Based on the copies of the emails in DeSelms’s
opposition, BONY sought to schedule a phone call to
discuss the case multiple times, see Opp. 23:1—6, 21:26—
22:4, but DeSelms never provided times that she was
available, see id. 22:21-27, 21:17-24. Instead, DeSelms
repeated her previously rejected contentions that the
trust at issue does not exist and that it is not licensed
to do business in California, and she demanded to see
proof of a retainer agreement and proof that the
requested fees were paid. See id. Therefore, it was
DeSelms, herself, who thwarted BONY’S attempt to
meet and confer by making meritless demands and
refusing to provide her availability for such a meeting.
IV. Conclusion
Because DeSelms raises no valid arguments
against BONYs motion, and because BONYs requested
lodestar fees are reasonable, the Court GRANTS
BONYs motion for attorneys’ fees. BONY is entitled
to $77,777.50 in attorneys’ fees under the First DOT.
IT IS SO ORDERED.
App.25a
THE COURT DENIES THE MOTION TO
VACATE ITS SUMMARY JUDGMENT ORDER
(OCTOBER 29, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. CV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
On August 27, 2020, this Court awarded The Bank
of New York Mellon (“BONY’) summary judgment on
its own claims and against Marguerite DeSelms’s
(“DeSelms”) counterclaims. See Dkt. # 103. On August
28, the Court entered a judgment to that effect. See
Dkt. # 104.
On September 11, BONY filed a motion in the
District Court for attorneys’ fees, as authorized by the
Court’s judgment. See Dkts. # 106, 110. On September
22, DeSelms opposed BONYs motion and also request
ed that the Court vacate its prior judgment in favor
of BONY under Federal Rule of Civil Procedure 60(b).
See Dkt. # 119.
App.26a
Meanwhile, two days later, DeSelms appealed the
Court’s prior judgment to the Court of Appeals for
the Ninth Circuit. See Dkt. # 116. On October 26, the
Ninth Circuit ordered this Court to “determine [ ] whe
ther [DeSelms’s] September 22, 2020 filing includes a
motion listed in Federal Rule of Appellate Procedure
4(a)(4) and, if so, whether the motion should be granted
or denied.” See Dkt. # 123.
Construing DeSelms’s pro se motion liberally,
see Estelle v. Gamble, 429 U.S. 97, 106 (1976), the
Court accepts it as properly filed. Therefore, her Rule
60(b) motion, filed 25 days after judgment, satisfies
Federal Rule of Appellate Procedure 4(a)(4)(vi). How
ever, because DeSelms’s motion merely reiterates
arguments that the Court previously rejected, the
Court DENIES her motion on its merits.
IT IS SO ORDERED.
App.27a
JUDGEMENT OF THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA
(AUGUST 28, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON, FKA
The Bank of New York, as Trustee for the Certificate
Holders CWALT, Inc. Alternative Loan Trust
2006-OC8 Mortgage Pass-Through
Certificates, Series 2006-OC8,
Plaintiff\
v.
MARGUERITE DESELMS, Individually, and as
Trustee of the Circle Road Revocable Living Trust
Dated November 11, 2010, ALAN DAVID TIKAL,
as Trustee of the KATN Revocable Living Trust; and
CAA, INC., a Nevada corporation,
Defendants,
No. 5:18-cv-1044-PSG-MRW
Courtroom: 6A
Before: Philip S. GUTIERREZ,
United States District Judge.
App.28a
Pursuant to this Court’s Order granting Plaintiff
The Bank of New York Mellon fka The Bank of New
York, as Trustee for the Certificate Holders CWALT,
Inc. Alternative Loan Trust 2006-OC8 Mortgage PassThrough Certificates, Series 2006-OC8’s (“BONY’ or
- “Plaintiff’) Motion for Summary Judgment, and for
good cause shown, IT IS HEREBY ORDERED,
ADJUDGED AND DECREED that:
1. The Substitution of Trustee and Full Reconvey
ance (hereafter the “Fake First DOT Reconveyance”)
recorded on November 17, 2010 as document number
2010-0476655 in the official records of San Bernardino
County is hereby void and cancelled.
2. It is hereby judicially declared that (i) the Fake
First DOT Reconveyance recorded on November 17,
2010 as document number 2010-0476655 is void and
cancelled; (ii) the First Deed of Trust recorded on
August 14, 2006 as document number 2006-0552510
is valid and encumbers the property commonly known
as “3489 Circle Road, San Bernardino, California
92405 (“Property”); and (iii) BONY is the beneficiary
under the First Deed of Trust with all rights and
interest secured therein including the right to non
judicial foreclosure.
3. A permanent injunction is hereby issued such
that Defendants shall not execute or record any fur
ther documents which purport to modify, amend, or
extinguish the First Deed of Trust, BONYs interest in
the Property, or any ongoing non-judicial foreclosure
proceedings.
4. BONY is hereby awarded costs of suit and
reasonable attorneys’ fees as to DeSelms as permitted
by the provisions of the Deed of Trust (recorded with
App.29a
the San Bernardino County Recorder on August 14,
2006 as document number 2006- 0552110) executed
by DeSelms with respect to the Property and in
accordance with applicable law as to DeSelms.
5. BONY may have this Judgment recorded with
the San Bernardino County Recorder’s Office.
IT IS FURTHER ADJUDGED AND DECREED
that:
1. Defendant Marguerite DeSelms (“DeSelms”)
shall take nothing by way of her operative First
Amended Counterclaim.
2. DeSelms shall take nothing as to Plaintiff.
3. Judgment shall be entered in favor of Plaintiff
and against DeSelms on each and every claim contained
in DeSelms’s First Amended Counterclaim.
4. Plaintiff may recover costs and attorneys’ fees
from DeSelms as permitted by law.
/s/ Phillip S. Gutierrez______
United States District Judge
Dated: August 27, 2020
App.30a
THE COURT GRANTS
PLAINTIFF/COUNTER-DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT
(AUGUST 27, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Before the Court is Plaintiff/Counter-Defendant
The Bank of New York Mellon’s (“BONY”) motion for
summary judgment. See Dkt. # 82 (“Mot.”). Defendant/
Counterclaimant Marguerite Deselms (“DeSelms”)
opposes the motion, see Dkt. # 102 (“Opp”), and
Plaintiff replied, see Dkt. # 97 (“Reply”). The Court finds
the matter appropriate for decision without oral argu
ment. See Fed. R. Civ. P. 78; L.R. 7-15. After consid
ering the moving, opposing, and reply papers, the Court
GRANTS Plaintiffs motion for summary judgment.
App.31a
I.
Factual Background!
In 2006, DeSelms entered into a mortgage agree
ment with Bondcorp Realty Services, Inc., (“Bondcorp”)
as lender and Mortgage Electronic Registration Sys
tems, Inc., (“MERS”) as nominee beneficiary for Bond
corp. See Statement of Uncontroverted Facts, Dkt. #
82-1 (‘SUF*) IfH 1, 4. Pursuant to the mortgage agree
ment, Bondcorp loaned DeSelms $340,000 to purchase
real property located at 3489 Circle Road in San
Bernardino, California (the “Property”). Id. In con
nection with the loan, BONY executed a promissory
note in favor of Bondcorp. Id. f 2. A deed of trust
(“First DOT”) securing that note in favor of Bondcorp
was recorded with the San Bernardino County Recor
der on August 14, 2006. Id. f 3.
Three years later, around August of 2009, DeSelms
defaulted on her mortgage. Id. K 5. A few months later,
DeSelms requested recordation of a document in the
County of San Bernardino that substituted KATN
Trust as the foreclosure trustee and released the First
DOT (“First DOT Reconveyance Attempt”), supposedly
on the authority of the beneficiary of the First DOT.
Id. f 6. That same day, DeSelms requested recordation
of a grant deed, which purported to transfer title
from herself to the Circle Road Trust, see id. U 7, and
requested recordation of a deed of trust in favor of
Alan David Tikal, trustee of the KATN Trust, as
1 Although the Court must take the facts in the light most
favorable to DeSelms, for the reasons set forth in the discussion
section of this Order, DeSelms has not demonstrated a genuine,
material dispute regarding BONY’S proffered statement of
undisputed facts. Therefore, because BONY has cited evidence
supporting its statements of fact, which DeSelms has not success
fully refuted, the operative facts in this case are undisputed.
App.32a
beneficiary, see id. 1 8. Despite the First DOT Recon
veyance Attempt, DeSelms admitted under oath in
bankruptcy proceedings one year later that she owed
$340,000 under the First DOT.2 Id.
9 10.
On September 14, 2011, the beneficial interest
in the First DOT was assigned to BONY (“BONY
Assignment”), and this assignment was recorded with
the San Bernardino County Recorder on October 7,
2011. Id. 1H[ 11 12.
Between 2014 and 2017, DeSelms attempted to
obtain a loan modification from her loan servicers.
Id. 14. When these efforts failed, BONY instituted
foreclosure proceedings against the property. Id. If 15.
In doing so, BONY discovered the First DOT Recon
veyance Attempt, and cancelled the foreclosure sale.
Id. t 16. This case concerns BONY’s and DeSelms’s
rights and obligations regarding the Property.
II.
Procedural Background
In 2018, BONY filed suit in this Court against
DeSelms, both individually and in her capacity as
trustee of the Circle Road Trust, as well as against
Alan David Tikal, as trustee of the KATN Revocable
2 BONY has submitted a Request for Judicial Notice, requesting
that the Court take notice of various documents related to
DeSelms’s bankruptcy petition. See Request for Judicial Notice,
Dkt. # 85 (“RJN’). Because such matters of public record are
proper subjects of judicial notice, the Court GRANTS the request.
See Fed. R. Evid. 201; Schweitzer v. Scott, 469 F. Supp. 1017,
1020 (C.D. Cal. 1979) (“[T]he Court is empowered and does take
judicial notice of court files and records.”); United States ex rel.
Dingle v. BioPort Corp., 270 F. Supp. 2d 968, 972 (W.D. Mich.
2003) (“Public records and government documents are generally
considered ‘not to be subject to reasonable dispute.’”).
App.33a
Living Trust, and CAA, Inc.,3 see Complaint Dkt. # 1
(“Compl.”), asserting three causes of action, only two
of which are relevant here:
First Cause of Action: Cancellation of Written
Instrument, seeking to have the Court adjudge
the First DOT Reconveyance Attempt void and
cancelled. Id.
26 33.
Third Cause of Action: Declaratory Relief, seeking
to have the Court declare the First DOT as a
valid and enforceable senior lien against the Pro
perty. Id. 1H[ 46 50.
DeSelms moved to dismiss BONY’S Complaint
under Federal Rule of Civil Procedure 12(b)(1), arguing
that (1) BONY had no interest in the First DOT, (2)
its claims were barred by a settlement agreement
between DeSelms and another party in an earlier case,
(3) its claims should have been brought as compulsory
counterclaims by Bank of America in another action
that she was litigating, and (4) its claims should be
dismissed due to unclean hands. See Dkt. # 21 at 3.
The Court denied DeSelms’s motion, finding that
(1) BONY had adequately established standing by
pleading that it had an interest in the First DOT and
supporting that allegation with the recorded BONY
Assignment, (2) BONY was not bound by the settle
ment agreement merely because it retained the same
counsel that represented the party that DeSelms
litigated against in an earlier case, (3) BONY was
not a party to the Bank of America lawsuit and
3 BONY’S claims against Defendant CAA, Inc., were dismissed
by the Court without prejudice for failure to serve within 90 days,
as required by Federal Rule of Civil Procedure 4. See Dkt. # 28.
App.34a
therefore could not have pled its claims there, and (4)
it was premature to decide the issue of unclean hands
at that stage of the proceedings. See id. at 7 9.
Next, the Court granted DeSelms’s motion for
leave to file counterclaims. See generally Dkt. # 37. She
asserted twelve, see Dkt. # 48 at 2 3, and BONY moved
to dismiss them all, see id. at 1; Dkt. # 39. The Court
dismissed six of DeSelms’s counterclaims with preju
dice. See Dkt. # 48 at 11 12. However, it granted DeSelms leave to amend (1) her extortion claim, (2) her
Fair Debt Collection Practices Act claim, (3) her
California Unfair Competition Law claim, and (4) her
unjust enrichment and accounting claims. See Dkt. #
48 at 12. The Court denied BONY’s motion regarding
DeSelms’s other two counterclaims one for intentional
infliction of emotional distress (“IIED”) and the other
for quiet title. Id. at 6, 9. DeSelms filed a First Amen
ded Counterclaim (“FACC”), which asserts only IIED
and quiet title counterclaims i.e., the claims that had
already survived BONY’s motion. See Dkt. # 50
64,
70. To the extent that DeSelms now attempts to
revive any of her counterclaims that were either (a)
dismissed with prejudice or (b) dismissed with leave
to amend, but not included in her FACC, those
claims are not properly before the Court, and it will
not consider them.
BONY now moves for summary judgment on its
first and third causes of action and DeSelms’s two
counterclaims. See generally Mot. For the reasons set
forth below, the Court grants BONY’s motion for
summary judgment.
App.35a
III. Legal Standard
“A party may move for summary judgment,
identifying each claim or defense or the part of each
claim or defense on which summary judgment is
sought. The court shall grant summary judgment if
the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a).
A party seeking summary judgment bears the ini
tial burden of informing the court of the basis for its
motion and identifying those portions of the pleadings
and discovery responses that demonstrate the absence
of a genuine issue of material fact. See Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986). If the nonmoving
party will have the burden of proof at trial, the
movant can prevail by pointing out that there is an
absence of evidence to support the moving party’s
case. See id. If the moving party meets its initial
burden, the nonmoving party must set forth, by
affidavit or as otherwise provided in Rule 56, “specif' ic facts showing that there is a genuine issue for
trial.” Anderson v. Liberty Lobby, Inc.,All U.S. 242,
248 (1986).
In judging evidence at the summary judgment
stage, the court does not make credibility determina
tions or weigh conflicting evidence. Rather, it draws
all reasonable inferences in the light most favorable
to the nonmoving party. See T. W. Elec. Serv., Inc. u.
Pac. Elec. Contractors Assn, 809 F.2d 626, 630 31 (9th
Cir. 1987). The evidence presented by the parties
must be capable of being presented at trial in a form
that would be admissible in evidence. See Fed. R.
Civ. P. 56(c)(2). Conclusory, speculative testimony in
App.36a
affidavits and moving papers is insufficient to raise
genuine issues of fact and defeat summary judgment.
See Thornhill Publ’g Co. v. Gen. Tel. & Elecs. Corp.,
594 F.2d 730, 738 (9th Cir. 1979).
IV. Evidentiary Objections
As a preliminary matter, BONY asserts evidenti
ary objections along with its reply. See Dkt. # 99. To
the extent that the Court relies on objected-to evidence,
it relies only on admissible evidence and, therefore,
the objections are overruled. See Godinez v. Alta-Dena
Certified Dairy LLC, No. CV 15-01652 RSWL (SSx),
2016 WL 6915509, at *3 (C.D. Cal. Jan. 29, 2016).
V.
Discussion
BONY argues that it is entitled to summary
judgment on its first cause of action for cancellation
of the First DOT Reconveyance Attempt and its third
cause of action for a declaratory judgment that the
First DOT is a valid, enforceable senior lien against
the Property. See Mot. 14:10 19:2. It also argues that it
is entitled to summary judgment on DeSelms’s counter
claims for IIED and quiet title. See id. 19:3 22:13.
The Court agrees. Each claim is addressed in turn.
A. First Cause of Action: Cancellation of
First DOT Reconveyance Attempt
Under California Civil Code § 3412, a plaintiff can
seek cancellation of a written instrument if “there is
reasonable apprehension that[,] if left outstanding!,]
[the instrument] may cause serious injury to a person
against whom it is void or voidable.” To prevail on
such a claim, a plaintiff must prove that (1) the instru
ment is apparently valid on its face, but that it is act-
App.37a
ually invalid, see Cal. Civ. Code § 3413; Ephraim u.
Metro. Tr. Co. ofCa., 28 Cal. 2d 824, 834 (1946); (2) the
instrument is void or voidable due to, for example,
fraud, see Turner v. Turner, 167 Cal. App. 2d 636,
641 (1959); and (3) there is a reasonable apprehension
of serious injury, including pecuniary loss, see id.
BONY argues (1) that the First DOT Reconveyance
Attempt is apparently valid “because, without exam
ining the balance of the public record, it purports that
Tikal is the trustee of the First DOT and purports to
reconvey the interest in the First DOT to DeSelms,”
but that it is actually invalid because BONY never
granted DeSelms, Tikal, or anyone else authority to
reconvey its interest, see Mot. 17:14 21; SUF
6 8,
21 25; (2) for those same reasons, the First DOT
Reconveyance Attempt was fraudulent and unauth
orized, see Mot. 15:3 13; and (3) the First DOT
Reconveyance Attempt has impeded its ability to
foreclose on the Property notwithstanding DeSelms’s
10-year default on her mortgage, causing it pecuniary
loss, see Mot. 17:22 26;
26 31.
DeSelms does not directly counter this argument,
which is supported by competent evidence in the
record. However, DeSelms makes numerous assertions
throughout her opposition that attempt to dispute
BONYs facts and claims and could seemingly be rele
vant to all of BONY’S arguments. The Court addresses
. all of DeSelms’s blanket arguments here and will
refer back to this section in the subsequent parts of
this Order.
DeSelms argues that (1) BONY lacks standing
to seek cancellation because it does not exist, it was
not a party to the First DOT Reconveyance Attempt,
and there is a break in the chain of assignments or
App.38a
substitution of trustees, see Opp. 10, 15, 19; (2) BONY
does not physically possess the original mortgage and
note and it is not licensed to do business in California,
see id.; (3) the mortgage documents that BONY relies
on are not the originals and are forged, see id. 6; and
(4) her mortgage payments were extinguished either
(a) because BONY was paid via private mortgage
insurance, which was required under “the pooling and
servicing agreement,” see id., or (b) by a settlement
agreement to which she was not a party, see id 13
14.4 The Court rejects each of these arguments in
turn.
i. “Standing”
DeSelms’s argument that BONY does not exist
appears to be based on her belief that “the trust,”
presumably meaning the trust for which BONY is
acting in its trustee capacity, closed when it securitized
her mortgage into it. See Opp. 46. Other than bald,
conclusory statements similar to this, DeSelms has
not offered actual evidence or legal support for her
position (a) that the trust is closed or (b) that such a
closure of the trust would strip BONY of its ability to
recover. Moreover, BONY has provided evidence that
it does, in fact, currently exist. See Reply 11:11 24.
4 The Court does not address arguments it has previously
rejected or the innumerable seemingly unsupported assertions
in DeSelms’s opposition. See Albrechtsen v. Bd. of Regents of
Uniu. of Wis. Sys., 309 F.3d 433, 436 (7th Cir. 2002) (“Judges
are not like pigs, hunting for truffles buried in the record.”); see
also Standing Order ^ 6(c) (“Because summary judgment motions
are fact-dependent, parties should prepare papers in a fashion
that will assist the court in absorbing the mass of facts (e.g.,
generous use of tabs, tables of contents, headings, indices, etc.)”).
V
App.39a
Nor does DeSelms explain why BONY does not
have standing to challenge her fraudulent reconveyance
of its interest in the Property merely because it was
not a party to the First DOT Reconveyance Attempt.
To be sure, it would make fraudulent reconveyances
fairly easy to accomplish if the Court accepted such
an argument. However, the reality is that BONY was
not a party to the reconveyance because DeSelms
sought to secretly deprive BONY of its interest in the
Property. Because DeSelms has not provided any
relevant legal support for her position, and the Court
finds it counterintuitive (at best), the Court rejects
her argument.
Finally, DeSelms’s argument about an alleged
break in the chain of title fails. Although it is not en
tirely clear, it appears that the break in the chain of
title that DeSelms points to is the “break” she caused
by the First DOT Reconveyance attempt. See Opp. 15
(asserting that there has never been a valid substitu
tion of trustee to replace “the last substituted trustee,”
which presumably refers to the First DOT Reconvey
ance Attempt). Again, she offers no reason why her
own fraudulent conduct should block BONY from
challenging the reconveyance.
ii. Possession and License
The Court rejects DeSelms’s claim that BONY lost
its interest in the Property because it lacks physical
possession of the original note and mortgage. California
courts seem to have rejected that proposition. See
Debrunner u. Deutsche Bank Nat’l Trust Co., 204 Cal.
App. 4th 433, 440 (2012) (“We [ ] see nothing in the
applicable statutes that precludes foreclosure when
the foreclosing party does not possess the original
App.40a
promissory note”). And, under California Corporations
Code § 191(d), BONY is not required to be licensed in
California because it is engaged in activities that are
excluded from the definition of transacting “intrastate
business.” See id. § 191(d)(3) (owning and enforcing
loans); id. § 191(d)(4) (modifying, renewing, extending,
transferring, or selling loans); id. § 191(d)(6) (acquiring
title to real property covered by mortgage or deed of
trust via trustee or judicial sale or foreclosure); Cas
taneda v. Saxon Mortg. Servs., Inc., 687 F. Supp. 2d
1191, 1195 n.3 (E.D. Cal. 2009).
iii.
Forged or Fake Documents
While DeSelms claims the documents BONY
relies on are fake or forged, she never disputes that
original copies of those documents exists, nor that the
substance of the “fake” documents is any different
from the originals. Even if she had disputed the sub
stance of the documents provided here, she has no
evidence supporting her assertion that they are, in
fact, forged, and her bald allegation is contradicted by
her bankruptcy petition, which acknowledges the exis
tence of her debt under the First DOT and was filed
under penalty of perjury. See FAC
9 10; RJN Ex. 2
(Schedule D). Accordingly, DeSelms has failed to create
a genuine issue of material fact regarding the authen
ticity of any of BONYs documents, and even if she .
had, she has not demonstrated a genuine factual dis
pute regarding the accuracy of the substance BONYs
documents. See Villiarimo v. Aloha Island Air, Inc.,
281 F.3d 1054, 1061 (9th Cir. 2002) (“[T]his court has
refused to find a ‘genuine issue’ where the only evi
dence presented is ‘uncorroborated and self-serving’
testimony.”).
App.41a
iv. Extinguishment of Mortgage
Finally, DeSelms does not provide any evidence
that (1) BONY possessed mortgage insurance covering
her loan, (2) what “pooling and servicing agreement”
she is referring to, (3) the amount of money that BONY
allegedly received from such insurance, or (4) why
BONY’S receipt of insurance would extinguish her
mortgage obligation. And even if she had done so, she
has not contended why this would render the First
DOT Reconveyance Attempt permissible (instead of
fraudulent).
Nor does she explain why the settlement agree
ment that she attached to her opposition extinguished
her mortgage obligation. The agreement was reached
between Bank of America (among others) and BONY
in its trustee capacity for certain securitized loan trusts.
See Reply 7:9 20; Dkt. # 100 at 56 142. The settlement
was reached so that BONY, in its trustee capacity
for those loan trusts, would release potential claims
against Bank of America and the other parties related
to certain representations and warranties made to
BONY by those parties. See id. The agreement
explicitly states that “[n]o Person not a Party to this
Settlement Agreement shall have any third-party
beneficiary or other rights under this Settlement
Agreement,” see Reply 14:9 13; Dkt. # 100 at 90, and
DeSelms provides no explanation why a settlement
of potential breach of contract claims between BONY
and these other parties affect her whatsoever, let alone
why any such settlement agreement could have ab
solved her of her obligation to pay her personal debts.
In sum, none of DeSelms’s arguments create a
genuine issue of material fact or suggest that BONY
App.42a
is otherwise not entitled to summary judgment.
Accordingly, because BONY has produced undisputed
evidence establishing a claim for cancellation of the
First DOT Reconveyance attempt, it is entitled to
summary judgment on its first cause of action.
B. Third Cause of Action: Declaration that
the First DOT is Valid
The Declaratory Judgment Act (“DJA”) provides
that “[i]n a case of actual controversy within its juris
diction . . . any court of the United States . . . may
declare the rights and other legal relations of any
interested party seeking such a declaration, whether
or not further relief is or could be sought.” 28 U.S.C.
§ 2201(a). A “case of actual controversy” is one in which
“there is [1] a substantial controversy, [2] between
parties having adverse legal interests,” which is “[3]
of sufficient immediacy and reality to warrant the
issuance of a declaratory judgment.” Md. Cas. Co. v.
Pac. Coal & Oil Co., 312 U.S. 270, 273 (1941).
Here, there is a substantial controversy between
BONY and DeSelms over the Property. BONY claims
that it is owed over 10 years of mortgage payments,
worth over $500,000, and that it will be unable to
recover that money absent a declaration of its rights.
Reply 17:21 24. Therefore, the Court agrees that a
declaratory judgment is appropriate because there is
an actual, immediate controversy between the parties.
While DeSelms never specifically addresses
BONYs request for a declaratory judgment in her
opposition, some of her arguments that the Court
addressed above could logically apply to BONYs
declaratory judgment claim. However, as mentioned
in the previous section, none of DeSelms’s arguments
App.43a
create a genuine dispute regarding BONY’S status as
the senior lienholder of the Property. Because (1)
BONY was assigned all of the beneficial interest in the
Property that was originally held by Bondcorp and
secured by the First DOT, (2) the First DOT Recon
veyance attempt was unauthorized and invalid, and
(3) BONY has never relinquished its interest in the
property, see SC/FH 1 4, 11 13, 20 25, the Court finds
that BONY possesses a first priority security interest
in the Property pursuant to the terms of the First
DOT. BONY is therefore entitled to summary judgment
on this claim.
C. First Counterclaim: Intentional Infliction
of Emotional Distress
To plead a claim for IIED under California law,
a claimant must allege that the accused “(1) engaged
in extreme and outrageous conduct with the intention
of causing, or reckless disregard of the probability of
causing, severe emotional distress . . . ; (2) the [claim
ant] actually suffered severe or extreme emotional
distress; and (3) the outrageous conduct was the
actual and proximate cause of the emotional distress.”
Ross v. Creel Printing & PubVg Co., 100 Cal. App. 4th
736, 744 45 (2002). “To be outrageous, conduct must
be ‘so extreme as to exceed all bounds of that usually
tolerated in a civilized community.”’ Id. at 745 (quoting
Ceruantez v. J.C. Penny Co., 24 Cal. 3d 579, 593 (1979)).
California courts have noted that debt collection
“by its very nature often causes the debtor to suffer
emotional distress” because creditors often “intention
ally seek[ ] to create concern and worry in the mind
of a debtor in order to induce payment.” Id. Recognizing
that these tactics can be legitimate in some circum-
App.44a
stances, they have found that “[s]uch conduct is only
outrageous if it goes beyond all reasonable bounds of
decency.” Id. (cleaned up). Accordingly, courts have
held that “[t]he act of foreclosing upon someone’s
home (absent other circumstances) is not the kind of
extreme conduct that supports an intentional infliction
of emotional distress claim.” Quinteros v. Aurora Loan
Servs., 750 F. Supp. 2d 1163, 1172 (E.D. Cal. 2010).
This is true even when the creditor fails to give proper
notice of foreclosure, see id., or when one of the
creditor’s employees told the plaintiff that the sale
would not occur, but the house was sold anyway, see
Mehta v. Wells Fargo Bank, N.A., 737 F. Supp. 2d 1185,
1204 (S.D. Cal. 2010).
When considering BONY’S motion to dismiss
DeSelm’s counterclaims, the Court found that these
cases were distinguishable because they “addressed
conduct by a creditor who had a legal right to fore
close,” whereas DeSelms “allege[d] that BONY inten
tionally fabricated documents in order to foreclose on
her property when it lacked legal authority to do so.”
See Dkt. # 48 at 6. Accordingly, the Court denied
BONY’S motion to dismiss. See id.
Now, BONY argues that it is entitled to summary
judgment because there is no evidence supporting
DeSelms’ allegation that BONY intentionally fabricated
documents to foreclose on her property. Mot. 20:1 23.
The Court agrees. DeSelms relies on all of the argu
ments previously addressed as evidence that BONY
fabricated such documents. For the same reasons
explained above, DeSelms’s unsubstantiated, selfserving declaration that BONY forged documents is
insufficient to raise a triable issue of fact on this
counterclaim. See Villiarimo, 281 F.3d at 1061.
App.45a
Accordingly, the Court awards summary judgment to
BONY on DeSelms’s IIED claim.
D. Second Counterclaim: Quiet Title
To prevail on a quiet title cause of action, a claim
ant must provide (1) a “description of the property that
is the subject of the action,” (2) the “title of the
[claimant] as to which a determination under this
chapter is sought and the basis of the title,” (3) the
“adverse claims to the title of the [claimant] against
which a determination is sought,” (4) the “date as of
which the determination is sought,” and (5) a “prayer
for the determination of the title of the [claimant]
against adverse claims.” Cal. Code Civ. Proc. § 761.020
(a)(e). However, under California law, equitable prin
ciples generally provide that “a mortgagor of real
property cannot, without paying his debt, quiet his
title against the mortgagee.” Miller v. Provost, 26 Cal.
App. 4th 1703, 1707 (1994).
It its motion to dismiss DeSelms’s counterclaims,
BONY argued that DeSelms failed to allege that she
could tender the balance owed on her loan, and
therefore her quiet title claim should be dismissed.
Dkt. # 48 at 9. The Court disagreed that the tender
rule applied at that stage of the proceedings because
DeSelms alleged that the assignment of her mortgage
to BONY was void. Id.
Now, on summary judgment, BONY first renews
its argument that DeSelms’s quiet title claim fails as
a matter of law because she has not alleged that she
has tendered the outstanding balance owed on her loan.
Mot. 21:24 26. Second, BONY asserts that DeSelms
cannot establish the fifth requirement of a quiet title
claim that her claim to title should prevail over BONY’S
App.46a
because the undisputed facts prove that (a) DeSelms
did not pay off her loan, (b) BONY did not release the
lien, and (c) DeSelms and Tikal had no authority to
release BONYs interest by fraudulently recording
the First DOT Reconveyance Attempt. See id. 22:5 9;
1 12, 21 31. The Court agrees on both grounds.
First, DeSelms merely relies on the allegations
in the FACC that she is ready, willing, and able to
tender, but has not provided any evidence substanti
ating that assertion. See Opp. 22. This is insufficient
to survive summary judgment. See Nationstar Mortg.,
LLC v. Maplewood Springs Homeowners Ass’n, 238 F.
Supp. 3d 1257, 1266 (D. Nev. 2017) (“[T]he opposition
must go beyond the assertions and allegations of the
pleadings and set forth specific facts by producing
competent evidence that shows a genuine issue for
trial.”). Moreover, other assertions in her opposition
actually suggest that she is not ready, willing, or
able to tender, for example when she states that “it is
impossible” to tender, see Opp. at 23, and potentially
“lethal” to do so, see id. at 8. DeSelms also argues she
is not required to allege that she can tender because
BONY has no beneficial interest in the property, see
id. at 21, but, as discussed in the preceding sections
of this Order, the Court has found the opposite to be
true.
Second, the Court has declared that BONY has a
valid, enforceable first priority security interest in
the Property under the terms of the First DOT, and
therefore DeSelms cannot establish that her claim to
title should prevail over BONYs (i.e., the fifth element
of a quiet title claim). DeSelms’s claim does not prevail
over BONYs because she defaulted on her mortgage,
which was secured by the Property.
App.47a
Accordingly, BONY is entitled to summary judg
ment on DeSelms’s quiet title counterclaim.
VI. Conclusion
For the foregoing reasons, the Court GRANTS
BONYs summary judgment motion in its entirety.
This Order closes the case.
IT IS SO ORDERED.
App.48a
ORDER CONTINUING TRIAL, PRE-TRIAL
CONFERENCE AND RELATED DEADLINE
(AUGUST 5, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON, FKA
The Bank of New York, as Trustee for the Certificate
Holders CWALT, Inc. Alternative Loan Trust
2006-OC8 Mortgage Pass-Through
Certificates, Series 2006-OC8,
Plaintiff,
v.
MARGUERITE DESELMS, Individually, and as
Trustee of the Circle Road Revocable Living Trust
Dated November 11, 2010; ALAN DAVID TIKAL,
as Trustee of the KATN Revocable Living Trust;
CAA, INC., a Nevada Corporation,
Defendants,
No. 5:18-cv-1044-PSG-MRW
Trial: Date: September 8, 2020, Time: 9:00 AM
Courtroom: 6A
Pre-Trial Conference: Date: August 24, 2020,
Time: 2:30 PM Courtroom: 6A
Before: Philip S. GUTIERREZ,
United States District Judge.
App.49a
Good cause appearing, and pursuant to the stip
ulation of the parties, it is hereby ORDERED that the
dates set forth in the in the Court's Orders of Decem
ber 11, 2019 which include the Civil Minutes Order
“Vacating Scheduling Conference” (hereafter “Sched
uling Order”) and “Order for Jury Trial (hereafter
“Trial Order”) are modified as follows:
1.
The trial date is hereby continued to Novem
ber 10, 2020.
2.
The pre-trial conference is continued to Oct
ober 26, 2020.
3.
All pre-trial and pre-trial conference submis
sion deadlines set forth in the Trial Order
shall be continued in accordance with and
follow the new trial date and pre-trial
conference date.
IT IS SO ORDERED.
/s/ Phillip S. Gutierrez______
United States District Judge
Dated: 8/5/2020
App.50a
ORDER TO STRIKE
ELECTRONICALLY FILED DOCUMENT
(JUNE 18, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON,
Plaintiff(s),
v.
MARGUERITE DESELMS, ET AL.,
Defendant(s),
No. 5:18-cv-1044 PSG-MRW
Before: Philip S. GIJTIERREZ,
United States District Judge.
The Court hereby ORDERS the documents listed
below be STRICKEN for failure to comply with the
Court’s Local Rules, General Orders, and/or Case
Management Order, as indicated:
Date Filed: 6/16/20, Doc. No.: 72
Title of Document:
Motion in Support of Motion for Summary Jgmt
0
Hearing information is missing, incorrect, or
not timely
App.51a
0
Other: The hearing date selected is set on a
Friday. See Calendars > Motion Calendar
when noticing a hearing for motions.
Is/ Phillip S. Gutierrez
U.S. District Judge
Dated: 6/18/2020
App.52a
MINUTE ORDER
RE: SETTLEMENT PROCEEDINGS
(MAY 27, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
BONY MELLON
v.
DESELMS
No. EDCV 18-1044 PSG (MRWx)
Before; Hon. Michael R. WILNER,
United States Magistrate Judge.
1. Judge Gutierrez referred this civil action to
Judge Wilner for settlement proceedings. Those pro
ceedings must occur by July 10. (Docket# 58.) To that
end, Judge Wilner spoke at length with the parties
and set an in-person settlement conference for June
15. (Docket# 60, 61.)
2. However, the coronavirus crisis will not allow
that conference to happen. The federal courthouses
in Los Angeles are closed for civil matters. While it
may be possible to conduct a virtual settlement meeting
using videoconferencing, Judge Wilner will need to
learn more about the parties’ positions. Therefore, the
in-person hearing scheduled for June 15 is VACATED.
App.53a
3. Instead, by June 8, both BONY and Ms.
Deselms will e-mail confidential settlement submissions
to Judge Wilner. The e-mails should briefly highlight
the best admissible evidence supporting the parties’
claims and defenses, and candidly assess the likelihood
of a trial victory or loss. Each party should also explain
the parameters of reasonable settlement proposals
for the action that all parties could plausibly accept.
4. Judge Wilner will not share the information
in these e-mails with the opposing parties or Judge
Gutierrez unless the parties authorize such a disclosure.
The submissions may not exceed 500 words in length.
E-mail this information to Judge Wilner at MRW_
Chambers@cacd.uscourts.gov.
5. After reviewing the submissions, Judge Wilner
may solicit further information, contact the parties
separately, or set further joint proceedings as appro
priate to comply with Judge Gutierrez’s schedule.
Failure to comply with this order mav result in
the imposition of financial or litigation sanctions, or
a recommendation that the action or certain claims
be dismissed pursuant to Federal Rule of Civil Proce
dure 4103), Applied Underwriters. Inc, v. Lichtenesser.
913 F,3d 884 (9th Cir. 20191.
App.54a
ORDER DENYING DISCOVERY MOTION
(APRIL 23, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
BONY MELLON
v.
DESELMS
No. EDCV 18-1044 PSG (MRWx)
Before: Hon. Michael R. WILNER,
United States Magistrate Judge.
1. Defendant Deselms filed a motion to compel
discovery in this civil quiet title action. (Docket# 64.)
The motion suffers from numerous procedural and
substantive defects. Even with an eye toward accommo
dating a self-represented litigant, there is no basis for
enforcing Defendant’s voluminous and chaoticallypled discovery demands. As a result, the motion is
DENIED.l
[
***
2. As an initial matter, Defendant failed to comply
with the Local Rules of Court that require joint pre
paration of discovery motions. L.R. 37-1, 37-2. The
1 No hearing is warranted on this motion. Local Rule 7-15.
App.55a
Court need not consider any motion filed in violation
of those rules unless it is accompanied by an appro
priate declaration describing the reason for the one
sided submission. L.R. 37-2.4. A pro se litigant in feder
al court “is subject to the same rules of procedure and
evidence” as other parties “who are represented by
counsel.” United States v. Merrill, 7 46 F.2d 458, 465
(9t h Cir. 1984).
3. The Deselms motion violates these rules. The
mot ion was not filed jointly, nor did it contain a
compliant declaration explaining why. When prompted
by the Court to explain this failure (Docket # 66), she
explained in her reply that she “did not believe she
needed a formal stipulation because during the confer
ence call [the Court spoke with the parties in February
to discuss settlement proceedings] with the court, the
court ordered her to file a motion to compel.” (Docket#
69 at 1.)
4. That’s not true. Based on Judge Wilner’s review
of his notes of the call, Ms. Deselms certainly com
plained about the discovery she’d received from the
bank during the action. And she was certainly informed
that she could file a motion to compel further responses
or other relief. But the Court neither “ordered” her to
file such a motion nor did it relieve her of the important,
obligations imposed by the joint filing rules. (Docket
#61.)
5. Indeed, the fact that Defendant engaged in
some type of meet-and-confer session with bank—with
her portion of the discovery motion—shortly before
filing the improper motion suggests that she was
aware of her obligation under the Local Rules. (Docket
# 64 at 38, 74.) Even so, she filed it without waiting
to obtain her adversary’s section. That violates the
App.56a
accepted practice in this district. (She also violated
the rule requiring a table of contents for large briefs
(L.R. 11-8, 37-2.1), which makes her submission excep
tionally difficult to read. However, the Court will not
enforce this rule under the circumstances.)
[
***
]
6. Alternatively, on the merits, Defendant’s dis
covery motion is virtually frivolous, not understandable
and wanders far afield from the issues remaining in
this action. The scope of acceptable discovery in this
case encompasses the limited claims and defenses
that have advanced past the pleading stage. Fed. R.
Civ. P. 26(b). Per District Judge Gutierrez’s previous
ruling, the claims in this action are essentially lim
ited to the parties’ various quiet title and mortgage
transfer assertions regarding Ms. Deselm’s home.
(Docket # 48 at 9.)
7. Ms. Deselms bears the burden of demonstrating
that the discovery she seeks is proportional to the
needs of the case. Factors relevant to that assessment
are “the importance of the issues at stake in the
action, the amount in controversy, the parties’ relative
access to relevant information, the parties’ resources,
the importance of the discovery in resolving the issues,
and whether the burden or expense of the proposed
discovery outweighs its likely benefit” Fed. R. Civ.
P. 26(b)(1). A district court’s ruling on a discovery
motion, including issues regarding the proportionality
component of Rule 26(b)(1), “are ordinarily reviewed
for abuse of discretion.” Stevens v. Corelogic. Inc.,
899 F.3d 666, 676 (9th Cir. 2018). A key component
of exercising discretion is for the court to understand
the basis of the discovery request and how it relates
to the underlying action.
App.57a
8. Defendant’s moving papers and reply brief
make no effort to explain how the discovery she seeks
is proportional to this quiet title action. She also does
not show how the bank’s responses interfere with
the proportionality analysis.2 Rather, the bulk of her
papers (other than unclear legal arguments that
relate to state law topics (Docket # 64 at 14)) presses
her arguments about the validity of various “trusts”
in this action. Those contentions are far afield from
any request, for proportional discovery directly related
to her personal quiet title claims.
9. And directly put, her ancillary contentions
about the resolution of another settled lawsuit or the
veracity of the attestor to the discovery responses are
unclear, illogical, and unrelated to issues in this
limited federal action. (Docket # 69 at 5 et seq.)
Defendant’s litigation conduct prevents the Court from
exercising its discretion in her favor in this discovery
dispute.
10. For the foregoing reasons, the motion to com
pel is DENIED. An award of fees against Ms. Deselms
under Rule 37(a)(5) might be warranted given the
nature of the discovery motion and the violation of the
Court’s Local Rules. However, the Court concludes
that the circumstances of the matter make an award
of expenses unjust at present.
^ She makes a valid point about the impropriety of “blanket” or
“form” objections. (Docket # 64 at 6.) Such objections have no real
significance in this Court’s analysis unless a responding party
makes clear that “materials are being withheld on the basis of
that objection.” Fed. R. Civ. P. 34(b)(2)(C). However, Defendant’s
papers don’t allow the Court to easily determine whether the
bank asserted and relied upon such a denominated objection.
App.58a
ORDER RE: DISCOVERY MOTION
(MARCH 20, 2020)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
BONY MELLON
v.
DESELMS
No. EDCV 18-1044 PSG (MRWx)
Before: Hon. Michael R. WILNER,
United States Magistrate Judge.
1. The hearing on Defendant’s discovery motion
(Docket# 64) presently set for April 8 is VACATED
due to the Court’s closure during the coronavirus
outbreak.
2. The Court received and reviewed Plaintiffs
opposition submission. (Docket #65.) Ms. Deselms’s
optional reply submission will be due by April 3. Her
reply should address Plaintiffs contentions regarding
her noncompliance with Local Rule 37-1 et seq.
3. If appropriate, Judge Wilner may set the matter
for a further telephone or video conference at a later
date.
App.59a
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
ORDER FOR JURY TRIAL
(DECEMBER 11, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON,
Plaintiff(s),
v.
MARGUERITE DESELMS, ET AL.,
Defendant(s),
Case No. ED CV-18-01044-PSG (MRWx)
Final Pretrial Conference: August 24, 2020 at 2:30 p.m.
Jury Trial Date: September 8, 2020 at 9:00 a.m.
Before: Philip S. GUTIERREZ,
United States District Judge.
UNLESS OTHERWISE ORDERED BY THE COURT,
THE FOLLOWING RULES SHALL APPLY:
App.60a
SCHEDULING
1.
In General
All motions to join other parties or to amend the
pleadings shall be filed and served by the cut-off date
specified in the Scheduling Order.
2.
Motions for Summary Judgment or Partial
Summary Judgment
Motions for summary judgment or partial sum
mary judgment shall be filed as soon as practical,
however, in no event later than the motion cut-off date.
3.
Discovery Cut-Off
The Court has established a cut-off date for dis
covery in this action. All discovery shall be complete by
the discovery cut-off date specified in the Scheduling
Order. This is not the date bv which discovery requests
must be served: it is the date bv which all discovery
is to be completed.
In an effort to provide further guidance to the
parties, the Court notes the following:
a. Depositions
All depositions shall be scheduled to commence
sufficiently in advance of the discovery cut-off date to
permit their completion and to permit the deposing
party enough time to bring any discovery motion con
cerning the deposition prior to the cut-off date.
b. Written Discovery
All interrogatories, requests for production of
documents, and requests for admission shall be served
App.61a
sufficiently in advance of the discovery cut-off date to
permit the discovering party enough time to challenge
(via motion practice) responses deemed to be deficient.
c. Discovery Motions
Whenever possible, the Court expects the parties
to resolve discovery problems among themselves in a
courteous, reasonable, and professional manner. The
Court expects that counsel will strictly adhere to the
Civility and Professional Guidelines adopted by the
United States District Court for the Central District
of California in July 1995.
Discovery matters are referred to a United States
Magistrate Judge. Any motion challenging the ade
quacy of responses to discovery must be filed timely,
and served and calendared sufficiently in advance of
the discovery cut-off date to permit the responses to
be obtained before that date, if the motion is granted.
Consistent resort to the Court for guidance in dis
covery is unnecessary and will result in the appoint
ment of a Special Master at the joint expense of the
parties to resolve discovery disputes.
4.
Mandatory Settlement Conference
Pursuant to Local Rule 16-15, the parties in every
case must select a settlement procedure. The final
meeting with the parties’ settlement officer must take
place no later than 45 days before the Final Pretrial
Conference.
FINAL PRE-TRIAL CONFERENCE (“PTC”)
This case has been placed on calendar for a Final
Pre-Trial Conference pursuant to Fed. R. Civ. P. 16
App.62a
and 26. Unless excused for good cause, each party
appearing in this action shall be represented at the
Final Pre-Trial Conference, and all pre-trial meetings
of counsel, by the attorney who is to have charge of
the conduct of the trial on behalf of such party.
STRICT COMPLIANCE WITH THE REQUIRE
MENT OF FED. R. CIV. P. 16.26 AND LOCAL
RULES ARE REQUIRED BY THE COURT. Therefore,
carefully prepared Memoranda of Contentions of Fact
and Law, a Joint Witness List, and Joint Exhibit List
shall be submitted to the Court. The Joint Witness
List shall contain a brief statement of the testimony
for each witness, what makes the testimony unique
from any other witness testimony, and the time
estimate for such testimony. The Joint Exhibit List
shall contain any objections to authenticity and/or
admissibility to the exhibit(s) and the reasons for the
objections.
The Memoranda of Contentions of Fact and Law,
Witness List, and Exhibit List are due twenty-one
(21) days before the Final Pre-Trial Conference.
FINAL PRETRIAL CONFERENCE ORDER
(“PTCO”)
The proposed PTCO shall be lodged seven calendar
days before the PTC. Adherence to this time require
ment is necessary for in-chambers preparation of the
matter. The form of the proposed PTCO shall comply
with Appendix A to the Local Rules and the following:
1. Place in “all caps” and in “bold” the separately
numbered headings for each category in the PTCO
(e.g., “1. THE PARTIES” or “7. CLAIMS AND
DEFENSES OF THE PARTIES”).
App.63a
2. Include a table of contents at the beginning.
3. In specifying the surviving pleadings under
section 1, state which claims or counterclaims have
been dismissed or abandoned, e.g., “Plaintiffs second
cause of action for breach of fiduciary duty has been
dismissed.” Also, in multiple party cases where not
all claims or counterclaims will be prosecuted against
all remaining parties on the opposing side, please
specify to which party each claim or counterclaim is
directed.
4. In specifying the parties’ claims and defenses
under section 7, each party shall closely follow the
examples set forth in Appendix A of the Local Rules.
5. In drafting the PTCO, the court also expects
that the parties will attempt to agree on and set forth
as many non-contested facts as possible. The court
will usually read the uncontested facts to the jury at
the start of trial. A carefully drafted and comprehen
sively stated stipulation of facts will reduce the length
of trial and increase jury understanding of the case.
6. In drafting the factual issues in dispute for
the PTCO, the parties should attempt to state issues
in ultimate fact form, not in the form of evidentiary fact
issues. The issues of fact should track the elements of
a claim or defense on which the jury will be required
to make findings.
7. Issues of law should state legal issues on
which the court will be required to rule during the
trial and should not list ultimate fact issues to be
submitted to the trier of fact.
App.64a
TRIAL PREPARATION FOR JURY TRIAL
MOTIONS, INSTRUCTIONS AND EXHIBITS
1.
Motions in Limine
All motions in limine must be filed and served a
minimum of forty-five (45) days prior to the scheduled
trial date. Each motion should be separately filed
and numbered. All opposition documents must be
filed and served at least twenty-five (25) days prior
to the scheduled trial date. All reply documents must
be filed and served at least ten (10) days prior to the
scheduled trial date.
All motions in limine will be ruled upon on or
before the scheduled trial date.
2.
Jury Instructions/Special Verdict Forms
Thirty-five (35) days before trial, plaintiff shall
serve plaintiffs proposed jury instructions and special
verdict forms on defendant. Twenty-eight (28) days
before trial, defendant shall serve on plaintiff defend
ant’s objections to plaintiffs instructions together with
any additional instructions defendant intends to offer.
Twenty-one (21) days before trial, plaintiff shall
serve on defendant plaintiffs objections to defend
ant’s instructions. Twenty-one (21) days before trial,
counsel are ordered to meet and confer to attempt to
come to agreement on the proposed jury instructions.
The parties shall make every attempt to agree upon
the jury instructions before submitting them to the
Court. It is expected that counsel will agree on the
substantial majority of jury instructions.
Sixteen (16) days before trial, counsel shall file
with the Court a JOINT set of jury instructions on
App.65a
which there is agreement. Defendant’s counsel has
the burden of preparing the joint set of jury instruc
tions. At the same time, each party shall file its
proposed jury instructions which are objected to by
any other party, accompanied by points and authori
ties in support of those instructions.
When the parties disagree on an instruction, the
party opposing the instruction must attach a short
statement (one to two paragraphs) supporting the
objection, and the party submitting the instruction
must attach a short reply supporting the instruction.
Each statement should be on a separate page and
should follow directly after the disputed instruction.
The parties ultimately must submit one document,
or if the parties disagree over any proposed jury
instructions, three documents. The three documents
shall consist of: (1) a set of Joint Proposed Jury
Instructions; (2) Plaintiffs Disputed Jury Instructions;
and (3) Defendant’s Disputed Jury Instructions. Any
disputed Jury Instructions shall include the reasons
supporting and opposing each disputed instruction in
the format set forth in the previous paragraph.
The Court directs counsel to use the instructions
from the Manual of Model Jury Instructions for the
Ninth Circuit where applicable. Where California law
is to be applied and the above instructions are not
applicable, the Court prefers counsel to use the Cali
fornia Jury Instructions in CACI. If none of these
sources is applicable, counsel are directed to use the
instructions in Devitt, Blackmar and Wolff, Federal
Jury Practice and Instructions.
Modifications of instructions from the foregoing
sources (or any other form instructions) must specif-
App.66a
ically state the modification made to the original form
instruction and the authority supporting the modifica
tion.
Each requested instruction shall be set forth in
full; be on a separate page; be numbered; cover only
one subject or principle of law; not repeat principles
of law contained in any other requested instructions;
and cite the authority for a source of the requested
instruction. In addition to the foregoing, each party
shall file with the Courtroom Deputy on the first day
of trial a “clean set” of the aforesaid requested duplicate
jury instructions in the following form: Each requested
instruction shall be set forth in full; be on a separate
page with the caption “COURT’S INSTRUCTION
NUMBER
”; cover only one subject or principle of
law; and not repeat principles of law contained in
any other requested instruction. The “clean set” shall
not cite the authority for a source of the requested in
struction. Counsel shall also provide the Court with
a CD in WordPerfect format containing the proposed
jury instructions.
An index page shall accompany all jury instruc
tions submitted to the Court. The index page shall
indicate the following:
• the number of the instruction;
• a brief title of the instruction;
• the source of the instruction and any relevant
case citation; and
• the page number of the instruction.
Example:
No.
5
Title
Evidence for Limited Purpose
App.67a
Source
9th Cir. 1.5
Page No.
9
During the trial and before argument, the Court
will meet with counsel and settle the instructions.
Strict adherence to time requirements is necessary
for the Court to examine the submissions in advance
so that there will be no delay in starting the jury
trial. Failure of counsel to strictly follow the provisions
of this section may subject the non-complving party
and/or its attorney to sanctions and SHALL
CONSTITUTE A WAIVER OF JURY TRIAL in all
civil cases.
3.
Trial Exhibits
Counsel are to prepare their exhibits for presen
tation at the trial by placing them in binders which
are indexed by exhibit number with tabs or dividers
on the right side. Counsel shall submit to the Court
an original and one copy of the binders. The exhibits
shall be in a three-ring binder Labeled on the spine
portion of the binder as to the volume number and con
tain an index of each exhibit included in the volume.
Exhibits must be numbered in accordance with Fed.
R. Civ. P. 16, 26 and the Local Rules.
Exhibit list shall indicate which exhibits are
objected to, the reason for the objection, and the reason
it is admissible. Failure to object will result in a
waiver of objection.
The Court requires that the following be submitted
to the Courtroom Deputy Clerk on the first day of
trial:
App.68a
• The original exhibits with the Court’s exhibit
tags shall be stapled to the front of the exhibit
on the upper right-hand corner with the case
number, case name, and exhibit number placed
on each tag. Exhibit tags may be printed using
G-14A and G14-B forms on the Court’s web
site.
• One bench book with a copy of each exhibit
for use by the Court, tabbed with numbers as
described above. (Court’s exhibit tags not
necessary.)
• Three (3) copies of exhibit lists.
• Three (3) copies of witness lists in the order in
which the witness may be called to testify.
• Counsel are ordered to submit a short joint
statement of the case seven (7) days before
trial that the Court may read to the prospective
panel.
• All counsel are to meet no later than ten (10)
days before trial and to stipulate so far as is
possible as to foundation, waiver of the best evi
dence rule, and to those exhibits which may
be received into evidence at the start of trial.
The exhibits to be so received will be noted on
the copies of the exhibit lists.
• Counsel may, but need not, submit brief
proposed voir dire questions for the jury seven
(7) calendar days before the Pretrial Conference.
The Court will conduct its own voir dire after
considering any proposed voir dire submitted
by counsel.
j
App.69a
• Any items that have not been admitted into
evidence and are left in the courtroom overnight
without prior approval will be discarded.
Isl Phillip S. Gutierrez_____
United States District Judge
Dated: December 11, 2019
App.70a
UNITED STATES DISTRICT COURT CENTRAL
DISTRICT OF CALIFORNIA VACATING
SCHEDULING CONFERENCE
(DECEMBER 11, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
Case No. ED CV-18-01044-PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
On the Court’s own motion, the Scheduling
Conference set for hearing on December 16, 2019 is
VACATED, and the following dates are hereby set.
Please review the Court’s trial order for further details.
Last Day to Add Parties &Amend Pleadings
(Doe defendants are dismissed as of cut-off to
add parties
January 16. 2020
Discovery Cut-Off:
June 21, 2020
Last Day to File Motion:
App.71a
June 16, 2020
Opening Expert Witness Disclosure [See F. R.
Civ. P. 26(a)(2)]
June 9. 2020
Rebuttal Expert Witness Disclosure:
July 7. 2020
Expert Discovery Cut-Off:
July 28. 2020
Final Pretrial Conference (2:30 p.m.):
August 24. 2020
Jury Trial (9:00 a.m.):
September 8. 2020
Estimated Length:
4 Days
Initials of Preparer WH
App.72a
ORDER REFERRAL TO ADR
(DECEMBER 11, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON,
Plaintiff(s),
v.
MARGUERITE DESELMS, ET AL.,
Defendant(s),
Case No. ED CV-18-1044-PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
The Court, having reviewed the parties’ Request:
ADR Procedure Selection (Form ADR-01), the Notice
to Parties of Court-Directed ADR Program, or the
report submitted by the parties pursuant to Fed. R.
Civ. P. 26(f) and L.R. 26-1, hereby:
ORDERS this case referred to:
ADR Procedure No. 1:
This case is referred to
{HI the magistrate judge assigned to the case
IT IS FURTHER ORDERED:
App.73a
The ADR proceeding is to be completed by: July
10, 2020.
The parties shall file a joint report no later than
seven (7) days after the ADR proceeding regarding
the progress of settlement discussions.
/s/ Phillip S. Gutierrez_____
United States District Judge
Dated: 12/10/19
App.74a
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
NOTICE OF FILING DISCOVERY
(JULY 10, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS
Case No. ED CV-18-1044-PSG (MRWx)
Before: Michael R. WILNER,
United States Magistrate Judge.
NOTICE OF DOCUMENT DISCREPANCIES
To: U.S. Magistrate Judge Michael R. Wilner
From: Veronica Piper, Deputy Clerk
Date Received: July 8, 2019
Case No. EDCV-18-1044-PSG (MRWx)
Document Entitled: Notice of Filing of Discovery
Upon the submission of the attached document(s),
it was noted that the following discrepancies exist:
IE)
The request for discovery should be sent to
Plaintiff. The Court does not need a copy.
File 5(d)-No Document Filings
IT IS HEREBY ORDERED:
App.75a
The document is NOT to be filed, but instead
REJECTED, and is ORDERED returned to counsel.*
Counsel shall immediately notify, in writing, all
parties previously served with the attached documents
that said documents have not been filed with the Court.
Is/ Michael R. Wilner
U.S. Magistrate Judge
Date: 7/9/2019
* The term “counsel” as used herein also includes any prose party.
See Local Rule 1-3.
App.76a
NOTICE OF FILING OF DISCOVERY
Defendant MARGUERITE DESELMS hereby
gives notice to the Court of the filing of her first
request for discovery, including requests for production
of documents, requests for admissions, and interroga
tories.
Respectfully submitted on this 5th day of July,
2019
Is/ Marguerite DeSelms
PO Box 3301
Redondo Beach, CA 90277
310 -427-1008 cell
margDeSelms@gmail.com
Plaintiff In Pro Per
App.77a
ORDER OF THE UNITED STATES DISTRICT
COURT CENTRAL DISTRICT OF CALIFORNIA
SETTING SCHEDULE CONFERENCE
(MAY 2, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
THE BANK OF NEW YORK MELLON,
Plaintiff(s),
v.
MARGUERITE DESELMS, ET AL.,
Defendants),
Case No. 5:18-CV-18-01044-PSG-MRW
Before: Philip S. GUTIERREZ,
United States District Judge.
This matter is set for a scheduling conference on
December 16. 2019 at 02:00 PM. The Conference will
be held pursuant to F. R. Civ. P. 16(b). The parties
are reminded of their obligations to disclose information
and confer on a discovery plan not later than 21 days
prior to the scheduling conference, and to file a joint
statement with the Court not later than 14 davs
after they confer, as required by F.R. Civ. P. 26 and
the Local Rules of this Court. In their F. R. Civ. P.
26(f) Report, the parties shall indicate whether they
have agreed to participate in the Court’s ADR Program,
App.78a
to private mediation or, upon a showing of good
cause, to a Magistrate Judge for a settlement confer
ence. Failure to comply may lead to the imposition of
sanctions.
IT IS SO ORDERED.
Isf Phillip S. Gutierrez
United States District Judge
Dated: May 2, 2019
App.79a
ORDER GRANTING IN PART AND
DENYING IN PART THE BANK OF NEW YORK
MELLON’S MOTION TO DISMISS
MARGUERITE DESELMS’S COUNTERCLAIMS
(MARCH 25, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Before the Court is Plaintiff/Counter-Defendant
The Bank of New York Mellon’s (“BONY’) motion to
dismiss Defendant/Counter-Claimant Marguerite
DeSelms’s (“DeSelms”) counterclaims. See Dkt. # 39
(“Mot”). DeSelms has opposed this motion, see Dkt. #
42 (“Opp.”), and BONY replied, see Dkt. # 45 (“RepZy”).1
1 DeSelms’s brief in opposition is 66 pages long, well in excess
of the 25 pages permitted by this Court’s Standing Order. See
Standing Order, Dkt. # 11, § 5(c) (“Memoranda of points and
authorities in support of or in opposition to motions shall not
exceed 25 pages.”). DeSelms’s pro se status does not excuse her
from her obligation to comply with the Court’s rules. BONY
App.80a
The Court finds the matter appropriate for decision
without oral argument. See Fed. R. Civ. P. 78; L.R. 715. Having considered the moving papers, the Court
GRANTS the motion in part and DENIES it in part.
I.
Background
In 2006, DeSelms entered into a mortgage agree
ment with Bondcorp Realty Services, Inc. (“Bondcorp”)
as lender and Mortgage Electronic Registration
Systems, Inc. (“MERS”) as nominee beneficiary for
the lender, whereby Bondcorp loaned Defendant
$340,000 to purchase real property located at 3489
Circle Road in San Bernardino, California (the
“Property”). See Complaint, Dkt. # 1 (“Comp/.”), 1HJ 89. In connection with the loan, Plaintiff executed a
promissory note in favor of Bondcorp. Id. f 9, Ex. A.
A deed of trust securing that note in favor of Bondcorp
was recorded with the San Bernardino County
Recorder on August 14, 2006. Id. 1 10, Ex. B.
This case presents the question of whether
BONY now has a valid interest in that deed of trust
in its capacity as Trustee for the Certificate Holders
CWALT, Inc. Alternative Loan Trust 2006-OC8
Mortgage Pass-Through Certificates, Series 2006OC8. See id.
1, 21. BONY alleges that it was
asks the Court to strike DeSelms’s brief. See Reply 1:22—2:25.
However, while the raw page length of the brief exceeds the
Court’s page limits, it is written in a large font and contains
much less than the standard 28 lines per page, so it appears
unlikely that it contains many more words than it would have
had it been formatted properly. In the interest of expeditiously
resolving BONYs motion to dismiss on the merits, the Court
will not strike the brief in this instance. However, DeSelms is
admonished that all of her filings must comply with the Court’s
rules and that any future non-compliant filings will be stricken.
App.81a
assigned all beneficial interest in the deed of trust
on September 14, 2011 and that the assignment was
recorded with the San Bernardino County Recorder.
See id.
21-22. It filed this case against DeSelms,
alleging that she had improperly attempted to extin
guish the deed of trust by making a series of fraudu
lent conveyances. See generally id. At the time it filed
its complaint, BONY was attempting to foreclose on
DeSelms’s property. See id. U 23.
However, on December 5, 2018, it rescinded the
Notice of Default and Election to Sell that it had pre
viously filed, and therefore there is no active notice of
default on the property. See Request for Judicial Notice,
Dkt. # 40-1, Ex. A (‘Notice of Rescission”)^; Mot. 5: Il
ls.
DeSelms has now responded with counterclaims.
See Counterclaims, Dkt. # 34. While difficult to follow
at times, the crux of her allegations appears to be that
the assignment of the deed of trust to BONY was
void from the outset because the trust that BONY was
a trustee of was closed at the time of the assignment.
See id. H 49. DeSelms asserts twelve causes of action:
First Counterclaim: Violation of California’s
security first rule, Cal. Civ. Proc. Code § 726. Id.
UK 66-72.
Second Counterclaim: Wrongful foreclosure. Id.
H1I 73-104.
Third Counterclaim: Intentional infliction of
emotional distress (“IIED”). Id.
105-110.
2 The Court takes judicial notice of the Notice of Rescission, which
was recorded by the San Bernardino County Recorder’s office.
App.82a
Fourth Counterclaim: Extortion. Id.
111-18.
Fifth Counterclaim: Violation of the Fair Debt
Collection Practices Act (“FDCPA”), 18 U.S.C.
§ 1692.3 Id. 1111 119-24.
Sixth Counterclaim: Violation of the Rosenthal
Fair Debt Collection Practices Act (“Rosenthal
Act”), Cal. Civ. Code §§ 1788 et seq. Id.
125-32.
Seventh Counterclaim: Violation of the Real
Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2605. Id. UK 133-37.
Eighth Counterclaim: Claim that the statute of
limitations has expired. Id.
138— 42.
Ninth Counterclaim: Violation of California’s
Unfair Competition Law (“UCL”), Cal. Bus. & Prof.
Code §§ 17200 et seq. Id. Iffl 143-54.
Tenth Counterclaim: Quiet title. Id.
155—60.
Eleventh Counterclaim: Request for a permanent
injunction. Id.
161—79.
Twelfth Counterclaim: Unjust enrichment and
accounting. Id.
180-189.
BONY now moves to dismiss under Federal Rule of
Civil Procedure 12(b)(6), arguing that each counterclaim
3 The counterclaims mistakenly label both the extortion and
FDCPA claims as the “Fourth Cause of Action.” Consequently,
every cause of action after extortion claim is misnumbered (for
example, the Rosenthal Act claim is listed sixth but is labeled
the “Fifth Cause of Action.”). The Court has numbered the causes
of action based on the order in which they are listed in the counter
claims rather than by the labels DeSelms has given them.
App.83a
fails to state a claim upon which relief can be granted.4
See generally Mot.
II. Legal Standard
To survive a motion to dismiss under Rule 12
(b)(6), a complaint must “contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). In assessing the adequacy
of the complaint, the court must accept all pleaded
facts as true and construe them in the light most
favorable to the plaintiff. See Turner u. City & Cty. of
San Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015);
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009).
The court then determines whether the complaint
“allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. However, “[t]hreadbare recitals
4 DeSelms argues that BONY5s motion should be denied for
failure to comply with Local Rule 7-3, which requires a party
seeking to file a motion to contact the opposing party at least
seven days before filing to discuss the substance of the motion
and any potential resolution. See Opp. 6:16—7:24. However, it
appears that BONY made several attempts to contact DeSelms
beginning nine days before the motion was filed, and the parties
eventually were able to connect by phone on January 21, 2019,
two days before the filing of the motion. See Declaration of Sheri
Guerami, Dkt. # 46,
2-9. The parties also exchanged emails
discussing the issues raised by the motions. Id., Exs. A-D. While
DeSelms contends that BONY did not take her arguments
seriously, see Opp. 7:8-20, it appears to the Court that BONY made
a good faith attempt to convey its position but that the parties
were ultimately unable to agree upon an informal resolution.
Accordingly, it concludes that BONY complied with the require
ments of Local Rule 7-3.
App.84a
of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. According
ly, “for a complaint to survive a motion to dismiss, the
non-conclusory factual content, and reasonable infer
ences from that content, must be plausibly suggestive
of a claim entitling the plaintiff to relief.” Moss v. U.S.
Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (internal
quotation marks omitted).
III. Discussion
The Court discusses each of DeSelms’s twelve
counterclaims in turn.
A. Violation of the Security First Rule
California’s “security first” rule “require [s] a
secured creditor to proceed against the security before
enforcing the underlying debt.” Sec. Pac. Nat. Bank
v. Wozab, 51 Cal. 3d 991, 999 (1990); see also Cal. Civ.
Proc. Code § 726 (codifying the rule). A creditor who
sues on the debt rather than seeking foreclosure of
the security is deemed to have “made an election of
remedies” and therefore to have waived any right to
foreclose. See In re Prestige Ltd. P’ship-Concord, 234
F.3d 1108, 1114 (9th Cir. 2000).
DeSelms’s theory of how BONY violated the secu
rity first rule is difficult to follow. She appears to allege
that Bank of America violated the rule when it failed
to return funds that DeSelms had paid to Countrywide
Financial, and that these actions somehow voided
BONYs right to foreclose under the deed of trust. See
Counterclaims
66-72.
BONY has moved to dismiss the security first
rule cause of action for failure to state a claim, and
App.85a
DeSelms has offered no arguments in opposition. Argu
ments to which no response is supplied are deemed
conceded. See, e.g., Tapia v. Wells Fargo Bank, N.A.,
No. CV 15-03922 DDP (AJWX), 2015 WL 4650066, at
*2 (C.D. Cal. Aug. 4, 2015); Silva v. U.S. Bancorp,
No. 5:10-cv-01854-JHN-PJWx, 2011 WL 7096576, at
*3 (C.D. Cal. Oct. 6, 2011). Accordingly, the Court
GRANTS BONY’S motion to dismiss the claim for
violation of the security first rule.
B. Wrongful Foreclosure
To succeed on a claim for wrongful foreclosure
under California law, a plaintiff must show that the
defendant “caused an illegal, fraudulent, or willfully
oppressive , sale of real property pursuant to a power
of sale in a mortgage or deed of trust.” Miles v.
Deutsche Bank Nat. Tr. Co., 236 Cal. App. 4th 394,
408 (2015). BONY argues that DeSelms’s wrongful
foreclosure claim must be dismissed because the
property at issue has not been sold. See Mot. 6:12-13.
DeSelms appears to concede that the actual sale of
the property is “a necessary element of a wrongful
foreclosure claim.” See Opp. 48:10-13. And she does
not dispute that the property has not been sold;
instead she asks for leave to amend in the event “the
sale transpires.” Id. 48:19-21.
But it is premature to speculate about whether
the property will be sold in the future, especially
given that BONY has rescinded its Notice of Default
and Election to Sell. See Rescission Notice. Because
DeSelms has not, and cannot, allege that her property
has been sold at foreclosure, she cannot state a claim
for wrongful foreclosure. Accordingly, the Court GRANTS
App.86a
BONTs motion to dismiss the wrongful foreclosure
claim.
C. Intentional Infliction of Emotional Distress
(“IIED”)
To plead a claim for IIED under California law,
a plaintiff must allege that “(1) the defendant engaged
in extreme and outrageous conduct with the intention
of causing, or reckless disregard of the probability of
causing, severe emotional distress to the plaintiff; (2)
the plaintiff actually suffered severe or extreme emo
tional distress; and (3) the outrageous conduct was
the actual and proximate cause of the emotional
distress.” Ross v. Creel Printing & Publ’g Co., 100
Cal. App. 4th 736, 744-45 (2002). “To be outrageous,
conduct must be ‘so extreme as to exceed all bounds
of that usually tolerated in a civilized community.”’
Id. at 745 (quoting Cervantez v. J. C. Penny Co., 24
Cal. 3d 579, 593 (1979)).
California courts have noted that debt collection
“by its very nature often causes the debtor to suffer
emotional distress” because creditors often “inten
tionally seek[ ] to create concern and worry in the
mind of a debtor in order to induce payment.” Id.
Recognizing that these tactics can be legitimate in some
circumstances, they have found that “[s]uch conduct
is only outrageous if it goes beyond all reasonable
bounds of decency.” Id. (cleaned up). Accordingly,
courts have held that “[t]he act of foreclosing upon
someone’s home (absent other circumstances) is not the
kind of extreme conduct that supports an intentional
infliction of emotional distress claim.” Quinteros v.
Aurora Loan Servs., 740 F. Supp. 2d 1163, 1172 (E.D.
Cal. 2010). This is true even when the creditor fails
App.87a
to give proper notice of foreclosure, see id., or when
one of the creditor’s employees told the plaintiff that
the sale would not occur, but the house was sold
anyway, see Mehta v. Wells Fargo Bank, N.A., 737 F.
Supp. 2d 1185, 1204 (S.D. Cal. 2010).
BONY argues that under these cases, its attemp
ted foreclosure cannot constitute outrageous conduct
sufficient to form the basis for an IIED claim. See
Mot. 7:13—8:8. However, the cases discussed above
addressed conduct by a creditor who had a legal right
to foreclose. See Mehta, 737 F. Supp. 2d at 1204. Here,
DeSelms alleges that BONY intentionally fabricated
documents in order to foreclose on her property when
it lacked legal authority to do so. See Counterclaims
1 107. DeSelms pointed this out in her opposition, see
Opp. 27:24-30:10, and BONY offered no response in
its reply brief. At this stage, the Court must take
DeSelms’s allegations as true, and it believes that if
BONY did in fact intentionally fabricate documents
to carry out a foreclosure that it knew it had no legal
right to conduct, this could constitute extreme and
outrageous conduct that “exceeds all bounds of that
usually tolerated in a civilized community.” Ross, 100
Cal. App. 4th at 745. Accordingly, the Court DENIES
BONYs motion to dismiss the IIED claim.
D. Extortion
Courts have divided over whether California recog
nizes a civil cause of action for extortion. Compare
Hisamatsu v. Niroula, No. C-07-4371-JSW (EDL),
2009 WL 4456392, at *5 (N.D. Cal. Oct. 22, 2009)
(“California has long recognized a claim of ‘civil
extortion.’”), with Arista Records v. Sanchez, No. CV
05-7046 FMC (PJWx), 2006 WL 5908359, at *2 (C.D.
App.88a
Cal. Mar. 1, 2006) (“[TJhere is no private right of action
for ‘extortion.’”). Those that have recognized a civil
extortion claim have held that it is based on the same
elements as criminal extortion. See Levitt v. Yelp! Inc.,
No. C-10-1321 EMC, 2011 WL 5079526, at *9 n.5 (N.D.
Cal. Oct. 26, 2011). Accordingly, a plaintiff alleging
extortion must show that the defendant “obtain[ed]
the property or consideration from another, with his
or her consent, . . . induced by a wrongful use of force
or fear.” See Cal. Penal Code § 518(a).
Even assuming for the sake of argument that a
civil cause of action for extortion exists, DeSelms’s
complaint fails to state a claim because it does not
allege that BONY actually obtained property from
her. While she alleges that BONY “institute[ed] a
non-judicial foreclosure without any lawful right to
do so and demanded] money,” see Counterclaims H 113,
she has not alleged that this demand resulted in BONY
obtaining money from her. Accordingly, the Court
GRANTS BONY’S motion to dismiss the extortion
claim.
E. FDCPA Claim
The FDCPA regulates actions taken by “debt col
lectors.” In relevant part, the term “debt collector” is
defined by the statute as a person who “regularly
collects or attempts to collect, directly or indirectly,
debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6). The statue specifically
that provides the term does not include a person who
attempts to collect a debt that was originated by that
same person or a “debt which was not in default at
the time it was obtained by [the debt collector].” Id.
§ 1692a(6)(F)(ii)-(iii). Accordingly, “[t]he law is well
App.89a
settled that the FDCPA’s definition of debt collector
does not include the consumer’s creditors, a mortgage
servicing company, or any assignee of the debt.” Lai
v. Am. Home Servicing Inc., 680 F. Supp. 2d 1218, 1224
(E.D. Cal. 2010) (cleaned up).
In her opposition, DeSelms argues that the exemp
tion from the FDCPA’s debt collector definition for
persons who obtain a debt that “was not in default
at the time it was obtained” does not apply because
“at the time of the purported acquisition, BONY
claimed that an arrears already existed from Bank of
America.” See Opp. 35:24-27. However, she does not
cite to where this allegation is made in her counter
claims, and the Court did not find any allegation on this
point in its own review. Accordingly, the Court
concludes that DeSelms has failed to adequately plead
that BONY is a debt collector within the meaning of
the FDCPA. It therefore GRANTS BONY’S motion to
dismiss the FDCPA claim.
F. Rosenthal Act
DeSelms’s claims under California’s Rosenthal
Act also fail. BONY argues that attempts to collect
on a mortgage loan' do not fall within the scope of the
Rosenthal Act, citing to cases that have reached this
conclusion. See Mot. 9:22-10:21; Pittman v. Barclays
Capital Real Estate, Inc., No. 09 CV 241 JM (AJB),
2009 WL 1108889, at *3 (S.D. Cal. Apr. 24, 2009) (“[A]
residential mortgage loan does not qualify as ‘debt’
under the statute.”); Castaneda v. Saxon Mortg. Servs.,
Inc., 687 F. Supp. 2d 1191, 1197 (E.D. Cal. 2009) (col
lecting cases). DeSelms’s opposition provides no res
ponse to this argument. See Opp. 38:4-39:23. According
ly, the Court deems it conceded, see Tapia, 2015 WL
App.90a
4650066, at *2, and GRANTS BONY’S motion to dis
miss the Rosenthal Act claim.
G. RESPA
DeSelms alleges that BONY violated RESPA by
failing to respond to requests she made about her
account that were “qualified written requests”
(“QWRs”) within the meaning of the statute. See
Counterclaims
133-37. BONY argues that the
claim must be dismissed because RESPA only imposes
a duty on loan servicers to respond to QWRs, and
BONY was the beneficial owner of the deed of trust,
not a servicer. See Mot. 11:1-6; see also Phillips v.
Bank of Am. Corp., No. 10-CV-4561-LHK, 2011 WL
132861, at *3 (N.D. Cal. Jan. 14, 2011) (“Absent any
allegation that Bank of America is Plaintiffs loan
servicer, as opposed to just the mortgage lender and
beneficiary of a deed of trust, Plaintiff cannot state a
claim under RESPA.”).
In her counterclaim, DeSelms alleges that “BONY
claim [sic] to be the holder and owner of the subject
mortgage, or claim they [sic] are servicers or agents
for servicers of a federally related mortgage loan
within the meaning of [RESPA].” Counterclaim T| 134.
This allegation does not state that BONY is a servicer;
at best, it expresses uncertainty over what BONY
claims to be. Further, as BONY points out, DeSelms
attached a document reflecting the 2011 assignment
of the deed of trust to her counterclaim, and that doc
ument, which was recorded by the San Bernardino
Country Recorder, lists BONY as the beneficial owner
of the deed of trust, not as a loan servicer. See
Exhibits to Counterclaims, Dkt. # 35, Ex. 9. For these
reasons, the Court concludes that DeSelms has failed
App.91a
to plausibly allege that BONY was a loan servicer
and therefore GRANTS BONYs motion to dismiss
the RESPA claim.
H. Statute of Limitations
DeSelms’s Eighth Cause of Action alleges that
the statute of limitations has already run on the
claims BONY brought against her in this case. See
Counterclaims
139—42. However, while the statute
of limitations may provide DeSelms with an affirmative
defense to BONYs claims, it does not supply an inde
pendent cause of action. Accordingly, the Court
GRANTS BONYs motion to dismiss the statute of
limitations claim.
I. UCL
To state a claim for violation of the UCL, a plain
tiff must allege that she has “suffered injury in fact
and has lost money or property as a result of unfair
competition.” Cal. Bus. & Prof. Code § 17204; Kwikset
Corp. v. Superior Court, 51 Cal. 4th 310, 322 (2011)
(“[A] party must. . . establish a loss or deprivation of
money or property sufficient to qualify as injury in
fact, i.e., economic injury. . . . ”).
BONY contends that DeSelms’s UCL claim must
be dismissed because she does not allege that she
has lost money or property. See Mot. 11:25-12:3.
DeSelms’s opposition does not respond to this argu
ment, see Opp. 57:20-59:9, nor does it appear from
the facts alleged in the counterclaims that she can
allege economic injury because her property has not
been foreclosed on. Accordingly, the Court GRANTS
BONYs motion to dismiss the UCL claim.
App.92a
J. Quiet Title
Under California law, equitable principles gener
ally provide that “a mortgagor of real property cannot,
without paying his debt, quiet his title against the
mortgagee.” Miller v. Provost, 26 Cal. App. 4th 1703,
1707 (1994). BONY argues that DeSelms’s quiet title
claim must be dismissed because she has not alleged
that she could tender the balance owed on her loan.
See Mot. 12:18-13:1.
However, DeSelms points out that several courts
have held that a plaintiff does not need to tender the
loan balance when her claim is that any foreclosure
would be void because the defendant lacks authority
to foreclose.^ Opp. 24:19-27:20. Indeed, the California
Court of Appeal recently held that a plaintiff alleging
that the assignment of his mortgage was void did not
need to tender the debt owed in order to bring a quiet
title claim. Sciaratta v. U.S. Bank Nat’l Assn, 247
Cal. App. 4th 552, 568 (2016). BONY has provided no
response to this argument, and the rule excusing
tender appears to apply here because DeSelms alleges
that the assignment of her mortgage to BONY was
void. Accordingly, the Court DENIES BONYs motion
to dismiss the quiet title claim.
!
5 DeSelms also argues in her opposition that she has alleged
that she is willing to tender the loan balance. See Opp. 27:1—8.
She purports to cite to an allegation reading: “Plaintiff has offered
to and is ready willing and able to unconditionally tender her
obligation.” Id. However, this allegation is nowhere to be found
in the counterclaims themselves, and therefore the Court cannot
consider it on a motion to dismiss.
App.93a
K. Permanent Injunction, Unjust Enrichment,
and Accounting
DeSelms’s Eleventh Cause of Action is a request
for a permanent injunction, and her Twelfth Cause of
Action asks for unjust enrichment and an accounting.
See Counterclaims
161-89.
!
An injunction and an accounting are remedies,
not causes of action. See Ivanoffv. Bank of Am., N.A.,
9 Cal. App. 5th 719, 734 (2017); Batt v. City and County
of San Francisco, 155 Cal. App. 4th 65, 82 (2007).
Because DeSelms could be entitled to an injunction if
she succeeds on her quiet title claim, the Court con
strues her injunction cause of action as a request for
that remedy. As for the request for an accounting, an
accounting is only available when there is a special
relationship between the plaintiff and defendant and
“some balance is due the plaintiff that can only be
ascertained by an accounting.” Jolley v. Chase Home
Fin., LLC, 213 Cal. App. 4th 872, 910 (2013). There is
no need for an accounting unless the amount allegedly
due to the plaintiff is “so complicated that it cannot
be determined in a legal action for damages.” Id. Here,
DeSelms has not explained why any amount she is
allegedly due is so complicated that it cannot be
determined in a legal action for damages. Accordingly,
the Court DISMISSES her request for an accounting.
Finally, as for DeSelm’s unjust enrichment claim,
while there is no cause of action under California law
for unjust enrichment, see McKell u. Wash. Mut., Inc.,
142 Cal. App. 4th 1457, 1490 (2006), courts have con
strued unjust enrichment claims as claims that the
defendant “has been unjustly conferred a benefit
through mistake, fraud, coercion, or request” such that
App.94a
the plaintiff is entitled to restitution. See Astiana u.
Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir.
2015) (internal quotation marks omitted); McKell,
142 Cal. App. 4th at 1490 (“[U]njust enrichment is a
basis for obtaining restitution based on quasi-contract
or imposition of a constructive trust.”). Consequently,
to state a claim, Plaintiff must plausibly allege that
she conferred some benefit on BONY that would be
unjust for BONY to retain. But the counterclaims do
not allege that she paid any money to BONY. Her
opposition argues only that BONY demanded money
from her, not that any money was actually paid. See
Opp. 64:17—22. Accordingly, the Court concludes that
DeSelms has failed to state a claim for unjust
enrichment. Therefore it GRANTS BONYs motion to
dismiss the unjust enrichment claim.
L. Summary
For the reasons set forth above, the Court
GRANTS BONY’s motion to dismiss the security first
rule, wrongful foreclosure, extortion, FDCPA, Rosenthal
Act, RESPA, statute of limitations, UCL, and unjust
enrichment claims, as well as DeSelms’s request for
an accounting. The Court DENIES the motion to
dismiss the IIED and quiet title claims. Finally, the
Court construes DeSelms’s cause of action for a
permanent injunction as a request that a permanent
injunction be entered if she is successful on her
surviving claims.
IV. Leave to Amend
Whether to grant leave to amend rests in the
sound discretion of the trial court. See Bonin v.
Calderon, 59 F.3d 815, 845 (9th Cir. 1995). Courts
App.95a
consider whether leave to amend would cause undue
delay or prejudice to the opposing party, and whether
granting leave to amend would be futile. See SissetonWahpeton Sioux Tribe v. United States, 90 F.3d 351,
355 (9th Cir. 1996). Generally, dismissal without leave
to amend is improper “unless it is clear that the com
plaint could not be saved by any amendment.” Jackson
v. Carey, 353 F.3d 750, 758 (9th Cir. 2003).
The Court addresses leave to amend for each of
DeSelms’s dismissed claims in turn.
Security First Rule—DeSelms entirely failed to
respond to BONY’S argument that her claim based
on California’s security first rule should be dismissed.
Further, nothing in her counterclaims indicates that
she could successfully plead this claim. Accordingly,
leave to amend the security first claim is DENIED
and the claim is DISMISSED WITH PREJUDICE.
Wrongful Foreclosure—The Court concludes that
DeSelms’s wrongful foreclosure claim cannot be saved
by amendment because all parties appear to agree
that her property has not been sold at foreclosure.
Accordingly, leave to amend the wrongful foreclosure
claim is DENIED and the claim is DISMISSED
WITH PREJUDICE.
Extortion—While the Court is skeptical that De
Selms will be able to allege that BONY received money
or property from her, it cannot say definitively at this
point that amendment would be futile. Accordingly,
the Court GRANTS leave to amend the extortion claim.
FDCPA—Because DeSelms could potentially allege
facts sufficient to show that BONY is a debt collector,
the Court GRANTS her leave to amend her FDCPA
claim.
i
App.96a
Rosenthal Act—The Court concluded that DeSelms’s Rosenthal Act claims fail as a matter of law
because attempts to collect on a mortgage loan do not
fall within the scope of the statute. DeSelms provided
no response to this argument. Accordingly, leave to
amend the Rosenthal Act claim is DENIED and the
claim is DISMISSED WITH PREJUDICE.
RESPA—The Court believes that the RESPA
claims cannot be saved by amendment because it is
clear from documents provided by DeSelms herself
that BONY is the beneficial owner of the deed of trust,
not a loan servicer. Accordingly, leave to amend the
RESPA claim is DENIED and the claim is DISMISSED
WITH PREJUDICE.
Statute of Limitations—DeSelms’s statute of lim
itations claim cannot be saved by amendment because
the statute of limitations provides an affirmative
defense, not a cause of action. Accordingly, leave to
amend the statute of limitations claim is DENIED
and the claim is DISMISSED WITH PREJUDICE.
UCL—While the Court is skeptical that DeSelms
will be able to allege that she lost money or property
because of unfair actions by BONY, it cannot say
definitively at this point that amendment would be
futile. Accordingly, the Court GRANTS leave to amend
the UCL claim.
Unjust Enrichment and Accounting—Because
the Court cannot say definitively at this point that it
would be futile to allow DeSelms to amend her claim
for unjust enrichment and request for an accounting,
the Court GRANTS leave to amend this claim.
In summary, the Court GRANTS DeSelms leave
to amend only her extortion, FDCPA, UCL, unjust
App.97a
enrichment, and accounting claims. Any amended
counterclaims must be filed no later than April 30.
2019. Failure to file amended counterclaims by this
date will result in these claims being dismissed with
prejudice.
Leave to amend the security first rule, wrongful
foreclosure, Rosenthal Act, RESPA, and statute of
limitations claims is DENIED, and these claims are
DISMISSED WITH PREJUDICE.
V.
Conclusion
For the foregoing reasons, the Court GRANTS
BONY’S motion to dismiss the security first rule,
wrongful foreclosure, extortion, FDCPA, Rosenthal
Act, RESPA, statute of limitations, UCL, and unjust
enrichment claims, as well as DeSelms’s request for
an accounting. The Court DENIES the motion to
dismiss the IIED and quiet title claims.
Leave to amend is GRANTED as to the extortion,
FDCPA, UCL, unjust enrichment, and accounting
claims only. Any amended counterclaims must be filed
no later than April 30. 2019. Failure to file amended
counterclaims by this date will result in these claims
being dismissed with prejudice.
Leave to amend is DENIED as to the security
first rule, wrongful foreclosure, Rosenthal Act, RESPA,
and statute of limitations claims, and these claims
are DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.
App.98a
ORDER GRANTING DEFENDANT’S
MOTION TO SET ASIDE THE DEFAULT
(JANUARY 2, 2019)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Before the Court is Defendant Marguerite
DeSelms’s (“Defendant”) motion to set aside the
default entered against her on the complaint, see
Dkt. # 32 (“Default Mot”), and motion for leave to file
an answer and counterclaims, see Dkt. # 34 (“Mot. for
Leave”). Plaintiff The Bank of New York Mellon
(“Plaintiff’) has opposed these motions. See Dkt. # 36
(“Opp”). Defendant has not filed a reply. The Court
finds the matter appropriate for decision without oral
argument. See Fed. R. Civ. P. 78; L.R. 7-15. Having
considered the moving papers, the Court GRANTS
Defendant’s motions.
App.99a
I.
Background
In this case, Plaintiff alleges that Defendant fraud
ulently conveyed her interest in a parcel of real prop
erty in order to prevent Plaintiff from exercising its
right to foreclose on it. See generally Complaint, Dkt.
# 1. Defendant filed a motion to dismiss for lack of
standing and failure to state a claim, which the
Court denied on August 16, 2018. See August 16,
2018 Order, Dkt. # 22 (“Aug. 16 Order”). Defendant
failed to answer the complaint within 14 days after
the motion to dismiss was denied, as is required by
Federal Rule of Civil Procedure 12(a)(4)(A). Accordingly,
on September 28, 2018, the Court ordered the parties
to show cause no later than October 12, 2018 why the
case should not be dismissed for lack of prosecution.
See September 28, 2018 Order, Dkt. # 29. It noted
that Defendant filing an answer to the complaint or
Plaintiff filing a request for entry of default would
constitute an appropriate response to the Order to
Show Cause. See id.
Defendant failed to file an answer by the October
12, 2018 deadline in the Order to Show Cause. On
October 11, Plaintiff asked the clerk to enter default
against Defendant, and default was entered that
same day. See Dkts. # 30, 31. On November 1, 2018,
Defendant filed the current motions to set aside the
default and for leave to file an answer and counter
claims. See Default Mot.; Mot. for Leave.
II. Legal Standard
Federal Rule of Civil Procedure 55 permits a court
to set aside an entry of default for “good cause.” Fed.
R. Civ. P. 55(c). “To determine ‘good cause’, a court
must ‘consider! ] three factors: (1) whether [the party
App.lOOa
seeking to set aside the default] engaged in culpable
conduct that led to the default; (2) whether [it] had
[no] meritorious defense; or (3) whether reopening
the default judgment would prejudice’ the other party.”
United States u. Signed Pers. Check No. 730 of Yubran
S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010) (quoting
Franchise Holding II, LLC v. Huntington Rests. Grp.,
Inc., 375 F.3d 922, 925-26 (9th Cir. 2004)) (alterations
in original). This standard is disjunctive, “such that
a finding that any one of these factors is true is suffi
cient reason for the district court to refuse to set
aside the default.” Mesle, 615 F.3d at 1091. However,
the choice to set aside default even if one or more of
the factors is met is within the court’s discretion. See
Brandt u. Am. Bankers Ins. Co. of Fla., 653 F.3d
1108, 1111?12 (9th Cir. 2011) (“A district court may
exercise its discretion to deny relief to a defaulting
defendant based solely upon a finding of defendant’s
culpability, but need not.”).
The Ninth Circuit has cautioned that “judgment
by default is a drastic step appropriate only in extreme
circumstances; a case should, whenever possible, be
decided on the merits.” Mesle, 615 F.3d at 1091
(quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir.
1984)).
III. Discussion
The Court turns to the three factors articulated
by the Ninth Circuit. Because Plaintiff does not argue
that it would be prejudiced if the default is set aside,
the Court will address only whether Defendant engaged
in culpable conduct and whether she has a meritori
ous defense.
App.lOla
A. Culpable Conduct
“[A] defendant’s conduct is considered culpable if
he has received actual or constructive notice of the
filing. . . and intentionally failed to answer.” City of
Colton v. Am. Promotional Events, No. EDCV 091864 PSG (SSx), 2014 WL 12740640, at *2 (C.D. Cal.
Aug. 15, 2014) (cleaned up). However, “intentional”
in the context of a motion to set aside a default means
something different than how the word is often used
colloquially. The Ninth Circuit has made clear that
“a movant cannot be treated as culpable simply for
having made a conscious choice not to answer; rather,
to treat a failure to answer as culpable, the movant
must have acted with bad faith, such as an intention
to take advantage of the opposing party, interfere
with judicial decisionmaking, or otherwise manipulate
the legal process.” Mesle, 615 F.3d at 1092 (cleaned
up). Accordingly, courts have generally found culpable
conduct only “where there is no explanation of the
default inconsistent with a devious, deliberate, willful,
or bad faith failure to respond.” Id.
Plaintiff argues that Defendant engaged in cul
pable conduct by failing to file an answer on two
occasions: (1) after the Court denied her motion to
dismiss and (2) after the Court issued the Order to
Show Cause. See Opp. 3:1-17. But while this might
be enough to show that Defendant was on notice of
her obligation to answer, it does not show that her
failure to answer was necessarily an intentional deci
sion made in bad faith. Indeed, the fact that Defend
ant filed a motion to set aside the default, with a
proffered answer, only three weeks after default was
entered is consistent with the possibility that her
failure to file a timely answer was a product of care-
App.l02a
lessness rather than malice. Accordingly, the Court
finds that Defendant has not demonstrated that
Plaintiff engaged in culpable conduct.
B. Meritorious Defense
“The burden for satisfying the ‘meritorious defense’
requirement is minimal.” Colton, 2014 WL 12740640,
at *3. Defendant must only “allege sufficient facts
that, if true, would constitute a defense.” Mesle, 615
F.3d at 1094. That is because “the question whether
the factual allegation is true is not to be determined
by the court when it decides the motion to set aside
the default. Rather, that question would be the sub
ject of the later litigation.” Id. (cleaned up).
Defendant’s defenses to Plaintiffs claims are essen
tially that the conveyance at issue in this case was
legitimate, rather than fraudulent, and, among other
things, that Plaintiff has unclean hands because it
failed to follow state recording procedures. See generally
Mot. Because these would constitute valid defenses if
they are ultimately proven, the Court concludes that
Defendant has adequately shown that she has a merit
orious defense. Plaintiff argues that the Court rejected
Defendant’s defenses in its order denying Defendant’s
motion to dismiss. See Opp. 3:22-4:4. But this misun
derstands the order. In ruling on the motion to dismiss,
the Court found only that Plaintiff had plausibly
alleged facts sufficient to show that it had standing
and that it could state a claim for relief. See generally
Aug. 16 Order. It did not reject Defendant’s defenses
on the merits. In fact, it specifically declined to rule
on Defendant’s unclean hands defense, finding that
the “fact-bound inquiry” needed to evaluate it was
premature. See id. at 9.
App.l03a
Defendant has adequately shown that she has
potential meritorious defenses. Whether they are valid
will be “the subject of the later litigation.” See Mesle,
615 F.3d at 1094.
IV. Conclusion
“The court’s discretion is especially broad where,
as here, it is entry of default that is being set aside,
rather than a default judgment.” Mendoza v. Wight
Vineyard Mgmt., 783 F.2d 941, 945 (9th Cir. 1986).
Because the three factors to be considered support
setting aside the default, and because the Ninth Circuit
has frequently reiterated that litigation is best settled
on the merits, the Court GRANTS Defendant’s motion
to set aside the entry of default. The default is ordered
set aside.
The Court further GRANTS Defendant’s motion
for leave to file an answer and counterclaims. The
answer and counterclaims proffered by Defendant,
see Dkt. # 34, are deemed filed as of this date.
IT IS SO ORDERED.
App.l04a
ORDER TO SHOW CAUSE
RE: LACK OF PROSECUTION
(SEPTEMBER 28, 2018)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Plaintiff The Bank of New York Mellon (‘Plaintiff’)
brings this case against Defendant Marguerite
DeSelms and Defendant Alan Tikal, in his capacity
as trustee of the KATN Revocable Living Trust. 1 See
Complaint, Dkt. #1.
Defendant DeSelms filed a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(6), which
the Court denied on August 16, 2018. See Dkt. # 21.
Federal Rule of Civil Procedure 12(a)(4)(A) requires
1 Plaintiff also initially brought claims against Defendant CAA,
Inc. However, the Court ordered these claims dismissed on Sep
tember 21, 2018 for failure to serve within 90 days as required
by Federal Rule of Civil Procedure 4(m). See Dkt. # 28.;
App.l05a
defendants to file an answer within 14 days after the
denial of a motion to dismiss under Rule 12. More
than 14 days have elapsed since the Court denied
Defendant DeSelms’s motion, but she has yet to file
an answer.
Defendant Tikal was personally served on July
13, 2018. See Proof of Service, Dkt. # 23. Defendants
are required to file a responsive pleading within 21
days after being served. Fed. R. Civ. P. 12(a)(1)(A)(I).
More than 21 days have elapsed since Defendant Tikal
was served, but he has yet to file a responsive pleading.
Accordingly, the parties are hereby ORDERED
TO SHOW CAUSE in writing no later than October
12. 2018 why this action should not be dismissed for
lack of prosecution. Failure to respond in writing by
this date may result in dismissal of the entire action.
The Court will consider the filing of either of the
following as an appropriate response to the Order to
Show Cause: Defendants filing the appropriate
responses to the complaint OR Plaintiff filing a Request
for Entry of Default.
Pursuant to Rule 78 of the Federal Rules of Civil
Procedure and Local Rule 7.15, oral argument will
not be heard in this matter unless so ordered by the
Court. Pursuant to Local Rule 5-4.5, one mandatory
chambers copy of every electronically filed document
must be delivered no later than 12:00 p.m. on the
following business day. Further, the mandatory
chambers copy shall comply with Local Rule 11-3.
IT IS SO ORDERED.
App.l06a
ORDER DISMISSING THE CLAIMS
AGAINST DEFENDANT CAA, INC.
(SEPTEMBER 21, 2018)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON,
v.
MARGUERITE DESELMS, ET AL.
No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
This is the final chapter in the story of Plaintiff
The Bank of New York Mellon’s (“Plaintiff’) failure
to properly serve Defendant CAA, Inc. (“Defendant”).
On August 16, 2018, the Court ordered Plaintiff
to show cause why its claims against Defendant
should not be dismissed for failure to serve within 90
days as required by Federal Rule of Civil Procedure
4(m). See Dkt. # 22. On August 26, 2018, Plaintiffs
counsel filed a declaration stating that Plaintiff had
been unable to locate the registered agent for Defend
ant, a Nevada corporation. See First Declaration of
Sheri Guerami, Dkt. # 25, t 7. Counsel indicated that
the complaint and summons had been served on the
App.l07a
Nevada Secretary of State, without providing the Court
with any legal authority for why this action would
constitute sufficient service on Defendant. Id. f 8.
The Court concluded that Plaintiffs service of
the summons and complaint on the Nevada Secretary
of State was inadequate because it failed to comply
with California’s procedure for service on the Secretary
of State when a registered agent for a corporation
cannot be located. See Order Continuing OSC, Dkt. #
26. This procedure, found in California Corporations
Code § 1702(a), requires the service to be made “by
delivering by hand to the Secretary of State, or a
person employed in the Secretary of State’s office in
the capacity of assistant or deputy, one copy of the
process for each defendant to be served, together
with a copy of the order authorizing such service.”
Plaintiff did not comply with this procedure because
it did not deliver a copy of the order authorizing
service on the Secretary of State—nor could it have
because the Court had not yet issued such an order.
Plaintiff also did not represent that it served the
Secretary of State by hand. See Cal. Corp. Code § 1702(a).
On August 30, 2018, the Court issued the requisite
order authorizing service on the Nevada Secretary of
State. See Order Continuing OSC. It ordered Plain
tiff to either “serve [Defendant] through the Nevada
Secretary of State, pursuant to the requirements of
§ 1702(a) of the California Corporations Code” or
to “provide the Court with authority demonstrating
that its earlier service was legally sufficient.” Id. Plain
tiff was ordered to either provide the proof of service
or submit legal authority to the Court no later than
September 20, 2018. Id.
App.l08a
That date has passed, and Plaintiff has done
neither of those things. It has not made any further
attempt to serve the Nevada Secretary of State pursu
ant to the procedures of California Corporations
Code § 1702(a). And it has not submitted any legal
authority to the Court justifying its earlier attempted
service. Instead, Plaintiffs counsel has submitted ano
ther declaration reiterating its inability to locate
Defendant’s registered agent and restating that it
had previously served the complaint, summons, and
affidavit of due diligence on Nevada Secretary of State
on August 24, 2018. See Second Declaration of Sheri
Guerami, Dkt. # 27, f f 5-8. Counsel also informed
the Court that “Plaintiff is requesting an order from
the Court, if [its previous service] is not deemed suf
ficient, to re-serve the Secretary of State with the
Complaint, Summons, Affidavit of Due Diligence,
and the Order authorizing such service.” Id. f 9.
But the Court already ordered Plaintiff to re-serve
Defendant through the Nevada Secretary of State by
following the procedures in California Corporations
Code § 1702(a). Order Continuing OSC. And it
informed Plaintiff that the failure to do so by Septem
ber 20, 2018 would result in dismissal of the claims
against Defendant. The Court finds that Plaintiff failed
to comply with the Court’s order.
Accordingly, Plaintiffs claims against Defendant
CAA, Inc. are DISMISSED without prejudice for fail
ure to serve within 90 days as required by Federal
Rule of Civil Procedure 4(m). Plaintiff may proceed
on its claims against Defendants Marguerite DeSelms
and Alan Tikal, who have been properly served.
IT IS SO ORDERED.
App.l09a
ORDER DISCHARGING IN PART
AND CONTINUING IN PART THE
ORDER TO SHOW CAUSE
(AUGUST 30, 2018)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON
v.
MARGUERITE DESELMS ET AL.
Case No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
On August 16, 2018, the Court ordered Plaintiff
The Bank of New York Mellon (“Plaintiff’) to show
cause why the claims against Defendants Alan Tikal
and CAA, Inc. (“CAA”) should not be dismissed for
failure to serve within 90 days as required by Federal
Rule of Civil Procedure 4(m). See Dkt. # 22 (“OSC”).
In response, Plaintiff filed a proof of service for
Defendant Tikal, indicating that he was personally
served on July 13, 2018. See Dkt. # 23. Accordingly
the OSC is DISCHARGED as to Defendant Tikal.
As to CAA, a Nevada corporation, Plaintiffs counsel
filed a declaration stating that Defendant’s Status
App.llOa
with the Nevada Secretary of State is “Permanently
Revoked” and that Plaintiff has attempted to locate
the registered agent for CAA, Inc. but has been
unsuccessful. See Declaration of Sheri Guerami, Dkt.
# 25 Hf 7-8. Plaintiffs counsel advised the Court that
it had served the Nevada Secretary of State with the
complaint and summons. Id. ^ 8. However, Plaintiff
has not provided the Court with any legal authority
supporting this method of service.
Under California law, if a corporate agent “cannot
with reasonable diligence be found” the Court may
authorize the plaintiff to serve the corporation by
“delivering by hand to the Secretary of State . . . one
copy of the process for each defendant to be served,
together with a copy of the order authorizing such
service.” Cal. Corp. Code § 1702(a). Plaintiff cannot
have complied with this procedure because, until today,
the Court had not issued an order authorizing service
on the Secretary of State.
The Court now finds that CAA’s corporate agent
cannot with reasonable diligence be found, and therefore
it authorizes Plaintiff to serve CAA by delivering a
copy of the process and a copy of this order by hand
to the Nevada Secretary of State pursuant to the
requirements of § 1702(a) of the California Corpora
tions Code.
Accordingly, the Order to Show Cause as to CAA
is CONTINUED. Plaintiff is directed to serve CAA
through the Nevada Secretary of State, pursuant to
the requirements of § 1702(a) of the California Corpora
tions Code, and to provide proof of service to the Court
no later than September 20. 2018. Alternatively,
Plaintiff may, no later than that date, provide the
Court with authority demonstrating that its earlier
App.llla
service was legally sufficient. Failure to respond by
that date will result in the Court dismissing CAA
from the action without prejudice.
IT IS SO ORDERED.
■
App.ll2a
ORDER TO SHOW CAUSE
RE: TIME LIMIT FOR SERVICE
(AUGUST 16, 2018)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON
v.
MARGUERITE DESELMS, ET AL.
Case No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
;
On May 14, 2018, Plaintiff The Bank of New York
Mellon (“Plaintiff’) filed this action in this Court
against Defendants Marguerite DeSelms, individually
and as trustee of the Circle Road Revocable Living
Trust, Alan Tikal, as trustee of the KATN Revocable
Living Trust, and CAA, Inc.
While the motion to dismiss filed by Defendant
DeSelms, see Dkt. #15, indicates that she has been
served, from a review of the docket, it does not
appear that Defendants Tikal and CAA, Inc. have
been served within the 90 days required under Federal
Rule of Civil Procedure 4(m).
App.ll3a
The Court therefore orders Plaintiff to show cause
by August 27, 2018 why claims against Defendants
Tikal and CAA, Inc. should not be dismissed without
prejudice under Federal Rule of Civil Procedure 4(m).
Failure to respond by this date will result in the
Court dismissing these Defendants from the action
without prejudice.
IT IS SO ORDERED.
App.ll4a
ORDER OF THE UNITED STATES
DISTRICT COURT CENTRAL DISTRICT
OF CALIFORNIA DENYING DEFENDANT’S
MOTION TO DISMISS
(AUGUST 16, 2018)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES-GENERAL
THE BANK OF NEW YORK MELLON
v.
MARGUERITE DESELMS, ET AL.
Case No. EDCV 18-1044 PSG (MRWx)
Before: Philip S. GUTIERREZ,
United States District Judge.
Before the Court is a motion to dismiss filed by
Defendant Marguerite DeSelms (“Defendant”).1 See
Dkt. # 15. Plaintiff The Bank of New York Mellon
(“Plaintiff’) opposes the motion. See Dkt. # 19. The
Court finds the matter appropriate for decision without
oral argument. See Fed. R. Civ. P. 78; L.R. 7-15. Having
considered the moving papers, the Court DENIES
Defendant’s motion.
1 Co-Defendants Alan Tikal, as trustee of the KATN Revocable
Living Trust, and CAA, Inc. have not joined Defendant’s motion.
App.ll5a
I.
Background
This case presents the question of whether Plain
tiff has a valid interest in a mortgage issued by
Defendant in conjunction with a purchase of real
property, such that Plaintiff is entitled to foreclose
on the property. Defendant asserts that Plaintiff has
no interest in the property because the deed of trust
securing the mortgage loan has been extinguished.
She argues here that because Plaintiff has no interest,
it lacks standing to bring this case, and further that
Plaintiffs claims are barred alternatively by the
doctrine of unclean hands, by a settlement agreement
in a different case, or because they should have been
brought as compulsory counterclaims in even another
case.
In 2006, Defendant entered into a mortgage agree
ment with Bondcorp Realty Services, Inc. (“Bondcorp”)
as lender and Mortgage Electronic Registration
Systems, Inc. (“MERS”) as nominee beneficiary for the
lender, whereby Bondcorp loaned Defendant $340,000
to purchase real property located at 3489 Circle Road
in San Bernardino, California (the “Property”). See
Complaint, Dkt. # 1 (“Comp/.”)
8-9. In connection
with the loan, Plaintiff executed a promissory note in
favor of Bondcorp. Id. T) 9, Ex. A. A deed of trust
securing that note in favor of Bondcorp was recorded
with the San Bernardino County Recorder on August
14, 2006 (the “First Deed of Trust”). Id. 1 10, Ex. B.
Plaintiff alleges that on September 14, 2011, it
was assigned all beneficial interest in the First Deed
of Trust in its capacity as Trustee for the Certificate
Holders CWALT, Inc. Alternative Loan Trust 2006OC8 Mortgage Pass-Through Certificates, Series 2006OC8. Id. K11 1, 21. The assignment was recorded with
App.ll6a
the San Bernardino County Recorder on October 7,
2011, and Plaintiff asserts that it is currently the
holder of the promissory note and the beneficiary of
the First Deed of Trust. Id.
21-22.
Plaintiff alleges that Defendant defaulted on her
repayment obligations under the promissory note and
First Deed of Trust around August 1, 2009. Id. 12.
Between 2014-17, Defendant allegedly communicated
with the loan servicer responsible for servicing the
loan in an attempt to obtain a loan modification. Id.
T| 23. When talks broke down, Plaintiff, through its
loan servicer, began foreclosure proceedings against
the Property. Id.
In connection with the foreclosure proceedings,
Plaintiff discovered that in 2010, Defendant purported
to extinguish the First Deed of Trust by making a
series of conveyances. Id. IHf 13-16, 23. First, Defendant
recorded a grant deed transferring title to the Property
from herself to the Circle Road Revocable Living
Trust. Id. t 13. Second, Defendant recorded a deed of
trust in favor of Defendant Alan David Tikal, trustee
of the KATN Revocable Living Trust (the “Third Deed
of Trust”).2 Id. ][ 14. Third, Plaintiff alleges that
Defendant recorded a “Substitution of Trustee and
Full Reconveyance purporting to nominate the KATN
Trust as trustee under the First Deed of Trust and
reconvey all interest therein to the Circle Road Trust”
(the “Allegedly False Reconveyance”). Id. ^ 15.
2 Plaintiff refers to the deed of trust in favor of Tikal as the
Third Deed of Trust because there was a preceding deed of trust
securing a home equity line that Bondcorp gave to Defendant at
the same time as the original mortgage (“the Second Deed of
Trust”). See Compl. ]f 11. The Second Deed of Trust is not at issue
in this case.
App.ll7a
According to Plaintiff, Defendant asserts that as
a result of these conveyances, she holds title to the
Property (in her capacity as trustee of the Circle
Road Trust) free and clear of the lien created by the
First Deed of Trust. Id. UK 16, 25. She further asserts
that because she holds clear title, Plaintiff has no
right to foreclose on the Property. Plaintiff asserts
that the Allegedly False Reconveyance was fraudulent,
and therefore void, because neither the KATN Trust
nor Defendant Tikal had authority to convey any
interest in the First Deed of Trust, and because
Defendant had no authority to record the Allegedly
False Reconveyance. Id. f 44. Consequently, Plaintiff
alleges that the conveyances did not extinguish the
First Deed of Trust and therefore it remains the
beneficiary of the First Deed of Trust under the Sep
tember 14, 2011 assignment. Id. K 22.
On May 14, 2018, Plaintiff brought suit against
Defendant, both individually and in her capacity as
trustee of the Circle Road Trust, as well against CoDefendants Alan David Tikal as trustee of the KATN
Revocable Living Trust and CAA, Inc, asserting three
causes of action:
First Cause of Action: Cancellation of Written
Instrument. Id. Kt 26-33.
Second Cause of Action: Reformation of
Written Instrument. Id. KK 34-45.
Third Cause of Action: Declaratory Relief.
Id. Kt 46-50.
;
Plaintiff seeks a declaration from the Court that
the Allegedly False Reconveyance was fraudulent
and is therefore void, or in the alternative, asks the
Court to reform the Allegedly False Reconveyance to
App.ll8a
refer only to the Third Deed of Trust. Id. 8:23-28. It
further asks that the Court enjoin all defendants from
executing any further documents that purport to
modify, amend, or extinguish the First Deed of Trust.
Id. 9:12-15.
Defendant DeSelms now moves to dismiss, arguing
that Plaintiff lacks standing under Federal Rule of
Civil Procedure 12(b)(1) because it has no interest in the
First Deed of Trust, that Plaintiffs claims are barred
by a settlement between Defendant and Capital Mana
gement Services, LP (“Capital Management”) in an
earlier case, that Plaintiffs claims should have been
brought as compulsory counterclaims by Bank of
America in another action that Defendant is litigating,
and finally that Plaintiffs claims should be dismissed
under the doctrine of unclean hands. See generally
Mot.
II. Legal Standard
A. Rule 12(b)(1)
Federal courts have limited jurisdiction and there
fore only possess power authorized by Article III of
the United States Constitution and statutes enacted
by Congress. See Bender v. Williamsport Area Sch.
Dist., 475 U.S. 534, 541 (1986). Thus, federal courts
cannot consider claims for which they lack subject
matter jurisdiction. See Wang ex rel. United States v.
FMC Corp., 975 F.2d 1412, 1415 (9th Cir. 1992).
Federal Rule of Civil Procedure 12(b)(1) provides
for a party, by motion, to assert the defense of “lack
of subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1).
This defense may be raised at any time, and the Court
is obligated to address the issue sua sponte. See
App.ll9a
Fed. R. Civ. P. 12(h)(1) (providing for waiver of certain
defenses but excluding lack of subject matter juris
diction); Grupo Dataflux v. Atlas Glob. Grp., 541 U.S.
567, 571 (2004) (“Challenges to subject-matter juris
diction can of course be raised at any time prior to final
judgment.”); Moore v. Maricopa Cty. Sheriff’s Office,
657 F.3d 890, 894 (9th Cir. 2011) (“The Court is obli
gated to determine sua sponte whether it has subject
matter jurisdiction”). The plaintiff bears the burden
of establishing that subject matter jurisdiction
exists. See United States v. Orr Water Ditch Co., 600
F.3d 1152, 1157 (9th Cir. 2010). If the Court finds
that it lacks subject matter jurisdiction at any time, it
must dismiss the action. See Fed. R. Civ. P. 12(h)(3).
A plaintiff must “have ‘standing’ to challenge the
action sought to be adjudicated in the lawsuit.”
Valley Forge Christian Coll. v. Ams. United for
Separation of Church & State, Inc., 454 U.S. 464, 471
(1982). The “irreducible constitutional minimum” of
Article III standing has three elements: (1) “the
plaintiff must have suffered an injury in fact—an
invasion of a legally protected interest” that is “concrete
and particularized” and “actual or imminent”; (2) “there
must be a causal connection between the injury and
the conduct complained of’; and (3) “it must be likely,
as opposed to merely speculative, that the injury will
be redressed by a favorable decision.” Lujan v. Defs.
of Wildlife, 504 U.S. 555, 560-61 (1992) (internal quo
tation marks omitted). The plaintiff, as the party
invoking federal jurisdiction, has the burden of estab
lishing these elements. See id. at 561. Article III
standing bears on the court’s subject matter jurisdic
tion and is therefore subject to challenge under Fed-
App.l20a
eral Rule of Civil Procedure 12(b)(1). See Maya v.
Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011).
A Rule 12(b)(1) jurisdictional attack may be facial
or factual. See White v. Lee, 227 F.3d 1214, 1242 (9th
Cir. 2000). In a facial attack, the challenging party
asserts that the allegations contained in a complaint
are insufficient on their face to invoke federal juris
diction. See Safe Air for Everyone v. Meyer, 373 F.3d
1035, 1039 (9th Cir. 2004). By contrast, in a factual
attack, the challenger disputes the truth of the alle
gations that, by themselves, would otherwise invoke
federal jurisdiction. See id.
B. Rule 12(b)(6)
To survive a motion to dismiss under Rule 12(b)(6),
a complaint must “contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.”’ Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). In assessing the adequacy of
the complaint, the court must accept all pleaded facts
as true and construe them in the light most favorable
to the plaintiff. See Turner v. City and County of San
Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015);
Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009).
The court then determines whether the complaint
“allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. However, “[tjhreadbare recitals
of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.” Id. Accord
ingly, “for a complaint to survive a motion to dismiss,
the non-conclusory factual content, and reasonable
inferences from that content, must be plausibly
App.l21a
suggestive of a claim entitling the plaintiff to relief.”
Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.
2009) (internal quotation marks omitted).
III. Judicial Notice
“Generally, the scope of review on a motion to
dismiss ... is limited to the contents of the complaint.”
Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006);
see also Van Buskirk v. Cable News Network, Inc.,
284 F.3d 977, 980 (9th Cir. 2002) (“Ordinarily, a
court may look only at the face of the complaint to
decide a motion to dismiss.”). Courts may also, however,
consider “attached exhibits, documents incorporated
by reference, and matters properly subject to judicial
notice.” In re NVIDIA Corp. Sec. Litig., 768 F.3d
1046, 1051 (9th Cir. 2014). Such material includes
“notice of proceedings in other courts, whether in the
federal or state systems.” Duckett v. Godinez, 67 F.3d
734, 741 (9th Cir. 1995); see also Schweitzer v. Scott,
469 F. Supp. 1017, 1020 (C.D. Cal. 1979) (“[T]he Court
is empowered to and does take judicial notice of court
files and records.”).
Under Federal Rule of Evidence 201, the court
“can take judicial notice of ‘[pjublic records and gov
ernment documents available from reliable sources on
the Internet,’ such as websites run by governmental
agencies.” Gerritsen v. Warner Bros. Entm’t Inc., 112 F.
Supp. 3d 1011, 1033 (C.D. Cal. 2015) (quoting Hansen
Beverage Co. v. Innovation Ventures, LLC, No. 08-CV1166-IEG-POR, 2009 WL 6598891, at *2 (S.D. Cal.
Dec. 23, 2009)); see also L’Garde, Inc. v. Raytheon Space
& Airborne Sys., 805 F. Supp. 2d 932, 937-38 (C.D.
Cal. 2011) (noting that public records from the Internet
are “generally considered not to be subject to reason-
App.l22a
able dispute”) (internal quotation marks omitted).
Further, “[pjublic records and government documents
are generally considered ‘not to be subject to reason
able dispute.”’ United States exrel. Dingle v. BioPort
Corp270 F. Supp. 2d 968, 972 (W.D. Mich. 2003)
(citing Jackson v. City of Columbus, 194 F. 3d 737,
745 (6th Cir. 1999)).
Defendant asks the Court to take judicial notice
of documents relating to two other Central District
proceedings: the first amended complaint in DeSelms
v. Bank of America, NA., No. CV 18-703 PSG (MRWx)
(C.D. Cal.), see Dkt. # 16-1 Ex. 1 (‘Bank of America
Complaint”), and an agreement settling the claims
brought in DeSelms v. Capital Management Services
LP, No. CV 12-8756 JAK (FFMx) (C.D. Cal), see Dkt.
# 16-1 Ex. 3 (“Capital Management Settlement”).
Plaintiff asks the Court to take judicial notice of the
original promissory note involving Bondcorp, MERS,
and Defendant; the First Deed of Trust; and the
assignment from MERS to Plaintiff. See Dkt. # 20.
Neither party has opposed the other’s request
for judicial notice. Under Local Rule 7-12, a failure to
oppose a request may be deemed consent to granting
it. See L.R. 7-12. Accordingly, the Court GRANTS
both Defendant’s and Plaintiffs requests for judicial
notice.
IV. Discussion
Defendant moves to dismiss on the grounds that
Plaintiff lacks standing because it has no interest in
the Property, that Plaintiffs claims are barred by a
settlement agreement between Defendant and Capital
Management, that Plaintiffs claims should have been
brought as compulsory counterclaims by Bank of
App.l23a
America in a separate action, and that Plaintiffs
claims should be dismissed under the doctrine of
unclean hands. The Court addresses each argument
in turn.
A.
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