Lane v. Wells Fargo Bank, N.A. et al, No. 3:2012cv00015 - Document 45 (D. Nev. 2012)
Court Description: ORDER DENYING 20 Motion for Default Judgment; GRANTING IN PART AND DENYING IN PART 23 Motion to Quash Service and Set Aside Default (default set aside, but service not quashed); and GRANTING 41 Motion for Summary Judgment. Signed by Chief Judge Robert C. Jones on 10/2/12. (Copies have been distributed pursuant to the NEF - JC)
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Lane v. Wells Fargo Bank, N.A. et al Doc. 45 1 2 3 UNITED STATES DISTRICT COURT 4 DISTRICT OF NEVADA 5 6 7 8 9 10 11 ______________________________________ ) ) KEVIN LANE, ) ) Plaintiff, ) ) ) vs. ) ) WELLS FARGO BANK, N.A. et al., ) ) Defendants ) 3:12-cv-00015-RCJ-VPC ORDER 12 Before the Court is Plaintiff’s Motion for Default Judgment (ECF No. 20), Defendants’ 13 14 Motion to Quash Service of Process and Set Aside Defaults Against U.S. Bank, National 15 Association and Citigroup Mortgage Loan Trust 2007-AR4 (ECF No. 23), and Defendants’ 16 Motion for Summary judgment (ECF No. 41). For reasons given herein, the Court denies the 17 motion for default judgment, grants the motion to set aside default, denies the motion to quash 18 service, and grants the motion for summary judgment. 19 I. 20 FACTS AND PROCEDURAL HISTORY Plaintiff Kevin Lane gave lender Wells Fargo a $1,295,000 promissory note secured by 21 real property at 425 Crestview Dr., Stateline, NV 89449 (the “Property”). (Deed of Trust 22 (“DOT”) 1–3, Dec. 14, 2006, ECF No. 8, at 8). United Title of Nevada (“United Title”) was the 23 trustee, and MERS is not listed on the DOT. (See id. 2). Plaintiff obtained a home equity line of 24 1 of 14 Dockets.Justia.com 1 credit (“HELOC”) of $55,000 against the Property from Wells Fargo. (See HELOC DOT 1–2, 2 Dec. 15, 2006, ECF No. 8, at 28). Wells Fargo assigned the note and DOT to U.S. Bank 3 National Association (“USBNA”), as trustee for a mortgage-backed security. (See Assignment, 4 Aug. 2, 2011, ECF No. 8, at 48). USBNA substituted National Default Servicing Corp. 5 (“NDSC”) as trustee. (See Substitution, Oct. 21, 2011, ECF No. 8, at 51). NDSC filed the notice 6 of default (“NOD”) as agent for Wells Fargo based on a default on the DOT of $68,702.34 as of 7 June 15, 2011. (See NOD, June 16, 2011, ECF No. 8, at 44). A trustee’s sale was scheduled for 8 November 23, 2011 by NDSC. (See Notice of Trustee’s Sale, Oct. 24, 2011, ECF No. 8, at 54). 9 Plaintiff sued Defendant in state court on six causes of action: (1) Unfair Debt Collection 10 Practices Under Nevada Revised Statutes (“NRS”) section 649.370; (2) Unfair and Deceptive 11 Trade Practices Under NRS sections 41.600 and 598.0923; (3) Breach of the Covenant of Good 12 Faith and Fair Dealing; (4) Violation of NRS section 107.080; (5) Quiet Title; and (6) Fraud. 13 Defendants removed. The Court dismissed all claims except the section 107.080 claim because: 14 NDSC filed the NOD not only before it became the trustee, but also before the assignee that eventually substituted it as trustee, USBNA, obtained the beneficial interest. Unless NDSC can show by affidavit or otherwise on summary judgment that it was in fact commanded to file the NOD on June 16, 2011 by thenbeneficiary Wells Fargo, there will remain a genuine issue of material fact that NDSC was a stranger to the mortgage when it filed the NOD. NDSC’s own statement of agency on behalf of Wells Fargo on the NOD is not sufficient. 15 16 17 18 19 (Order 4:5—11, May 14, 2012, ECF No. 31). Plaintiff asks the Court in the present motion for default judgment to: (1) rescind the 20 foreclosure and Notice of Default; (2) issue a declaratory judgment that Plaintiff’s rights were 21 violated; and (3) issue an order quieting title to the Property in his name “unless some party, 22 namely: CITIGROUP MORTGAGE LOAN TRUST 2007-AR4, U.S. BANK NATIONAL 23 24 2 of 14 1 ASSOCIATION TRUSTEE, Dated 2/09/07, who has a right to enforce the Note and Deed of 2 Trust upon his house, comes forward in this litigation.” (Mot. for Default J. 8–9, ECF No. 20). Plaintiff identifies one Defendant as “CITIGROUP MORTGAGE LOAN TRUST 2007- 3 4 AR4, U.S. BANK NATIONAL ASSOCIATION TRUSTEE, Dated 2/09/07.” (Compl. 5, ECF 5 No. 20-1). According to the “Citigroup Loan Trust 2007-AR4, Pooling and Servicing 6 Agreement,” or the PSA, USBNA is the trustee to the Trust (the “Trustee”). (Resp. to Mot. to 7 Quash Serv. 4–5, ECF No. 25). The PSA requires “all directions, demands and notices 8 hereunder shall be sent . . . (e) in the case of the Trustee, [to] One Federal Street, 3rd floor, 9 Boston, Massachusetts 02110.” (Id. at 5). It also states that the “principal corporate trust office 10 of the trustee” is the same address. (Id.). On December 13, 2011, Plaintiff’s agent attempted to serve “Citigroup Mortgage Loan 11 12 Trust 2007-AR4, U.S. Bank National Association Trustee” at the principal corporate trust office 13 of the Trustee. (Mot. Precipe for Default 7, ECF No. 18). Plaintiff served Amy Byrnes, the Vice 14 President of Corporate Trust at the “Mortgage Loan Trust 2007-AR4,” who stated she was 15 authorized to accept service for “Citigroup Mortgage Loan Trust 2007-AR4” (the Trust). (Id.). 16 The Trust failed to answer, so the Clerk entered default on April 17, 2012. (See Entry of 17 Default, ECF No. 19). On April 19, 2012, Plaintiff filed the present motion for default judgment. 18 Citibank and USBNA then filed notices of appearance, as well as the present motion to quash 19 service of process and set aside default. Citibank and USBNA later filed the present motion for 20 summary judgment. 21 /// 22 /// 23 /// 24 3 of 14 1 II. LEGAL STANDARDS 2 A. 3 Obtaining default judgment is a two-step process under Rule 55. Eitel v. McCool, 782 Default Judgment 4 F.2d 1470, 1471 (9th Cir. 1986); see also Fed. R. Civ. P. 55. First, the clerk must enter the 5 party’s default. Fed. R. Civ. P. 55(a). The party seeking default judgment must then petition the 6 court for a default judgment. Id. at 55(b)(2). “A grant or denial of a motion for the entry of 7 default judgment is within the discretion of the court.” Lau Ah Yew v. Dulles, 236 F.2d 415, 416 8 (9th Cir. 1956). A court may, “for good cause shown,” set aside an entry of default. See 9 McMillen v. J.C. Penney Co., 205 F.R.D. 557, 558 (D. Nev. 2002). Default judgments are 10 generally disfavored, so courts should attempt to resolve motions for default judgment to 11 encourage a decision on the merits. See id. (citing TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 12 691, 696 (9th Cir. 2001)). In order for a court to determine whether to “exercise its discretion to 13 enter a default [judgment],” the court should consider seven factors: 14 15 16 17 (1) the possibility of prejudice to the plaintiff, (2) the merits of the plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Id. (citing Eitel, 782 F.2d at 1471–72). 18 B. 19 The plaintiff bears the burden of establishing the validity of its service of process when Quashing Service of Process 20 the defendant makes a motion to dismiss for insufficient service of process. See Carr v. Int’l 21 Game Tech., 770 F. Supp. 2d 1080, 1100 (D. Nev. 2011). If service is insufficient, the court has 22 broad discretion to extend the time for the plaintiffs to properly serve the defendants under Rule 23 4(m). See id. at 1101 (quoting Mann v. Am. Airlines, 324 F.3d 1088, 1090 (9th Cir. 2003)). In 24 4 of 14 1 considering whether to grant an extension, a court should consider factors “like a statute of 2 limitations bar, prejudice to the defendant, actual notice of a lawsuit, and eventual service.” Id. 3 (quoting Efaw v. Williams, 473 F.3d 1038, 1040 (9th Cir. 2007)). 4 C. 5 A court must grant summary judgment when “the movant shows that there is no genuine Summary Judgment 6 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 7 Civ. P. 56(a). Material facts are those which may affect the outcome of the case. See Anderson 8 9 10 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id. A principal purpose of summary judgment is “to isolate and dispose of factually unsupported claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986). In determining summary 11 judgment, a court uses a burden-shifting scheme: 12 13 14 15 16 17 18 19 20 21 22 23 When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case. C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations and internal quotation marks omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party’s case on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–24. If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60 (1970). 24 5 of 14 1 If the moving party meets its initial burden, the burden then shifts to the opposing party 2 to establish a genuine issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio 3 Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute, the opposing 4 party need not establish a material issue of fact conclusively in its favor. It is sufficient that “the 5 claimed factual dispute be shown to require a jury or judge to resolve the parties’ differing 6 versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 7 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid summary judgment 8 by relying solely on conclusory allegations that are unsupported by factual data. See Taylor v. 9 List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go beyond the assertions 10 and allegations of the pleadings and set forth specific facts by producing competent evidence that 11 shows a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex Corp., 477 U.S. at 324. 12 At the summary judgment stage, a court’s function is not to weigh the evidence and 13 determine the truth, but to determine whether there is a genuine issue for trial. See Anderson, 477 14 U.S. at 249. The evidence of the nonmovant is “to be believed, and all justifiable inferences are 15 to be drawn in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely 16 colorable or is not significantly probative, summary judgment may be granted. See id. at 249–50. 17 III. ANALYSIS 18 A. 19 The decision whether to enter default judgment is within the discretion of the district Motion for Default Judgment 20 court. See Eitel, 782 F.2d at 1471. Courts should examine the seven Eitel factors in determining 21 whether to enter default judgment. McMillen, 205 F.R.D. at 558. 22 /// 23 /// 24 6 of 14 1 1. 2 The first factor favors default judgment where the plaintiff will suffer prejudice if default 3 judgment is not entered. See McMillen, 205 F.R.D. at 558. Simply delaying the resolution of the 4 case is not prejudicial under this standard. See TCI Grp. Life Ins. Plan, 244 F.3d at 701. “Rather, 5 ‘the standard is whether [the plaintiff’s] ability to pursue the claim will be hindered.’” Id. 6 (quoting Falk v. Allen, 739 F.2d 461, 462 (9th Cir. 1984)); see also Rockstar, Inc. v. Rap Star 7 360 LLC, No. 2:10-CV-179-LRH-RJJ, 2010 WL 2773588, at *2 (D. Nev. July 8, 2010) (citing 8 PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002)) (granting default 9 judgment where defendant did not appear in court before or after the Clerk’s entry of default); 10 MATSCO v. Hang D.D.S., Prof. Corp., No. 2:09-CV-2242-LRH-RJJ, 2010 WL 2681807 (D. 11 Nev. July 1, 2010) (granting default judgment because plaintiffs continue to fail to make an 12 appearance in court after four months); Koninklijke Philips Elecs. N.V. v. KXD Tech., Inc., Nos. 13 2:05-CV-1532-RLH-GWF & 2:06-CV-101-RLH-GWF, 2008 WL 2699701, at *5 (D. Nev. July 14 2, 2008) (entering default judgment because destroying evidence in discovery gives plaintiffs no 15 other recourse if default judgment is not entered). Possibility of Prejudice to the Plaintiff 16 Here, Plaintiff has not received an answer after removing the case over four months ago 17 and claims he would be prejudiced by a further delay of a decision on his claims. The prejudice 18 against the Plaintiff must be greater than delay. He still has another recourse if default judgment 19 is not entered because he can continue his action in the Court. Since Defendants appeared in 20 Court, opposed the Motion for Default Judgment, and filed their own Motion to Quash Service 21 and Set Aside Default, there is no prejudice in allowing the case to continue to be tried on its 22 merits. 23 /// 24 7 of 14 1 2. 2 The second and third factors favor default judgment if the Plaintiff makes enough factual The Merits of the Claims and the Sufficiency of the Complaint 3 allegations to state a claim upon which relief can be granted, in accordance with Rule 8(a). See 4 Eitel, 782 F.2d at 1471; see also Rockstar, 2010 WL 2773588, at *2 (citing Danning v. Lavine, 5 572 F.2d 1386, 1389 (9th Cir. 1978)). In evaluating this standard, all factual allegations in the 6 complaint should be taken as true. See Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 7 1977). The court should only look at whether the complaint sufficiently states a claim for relief 8 under Rule 8, not whether the claim would actually prevail at trial. See Rockstar, 2010 WL 9 2773588, at *2. 10 In denying a motion to dismiss in part, the Court has already ruled that Plaintiff’s section 11 107.080 claim satisfies Rule 8(a). These factors therefore weigh in favor of a default judgment. 12 3. 13 The fourth factor mitigates against default judgment when there is a substantial amount The Sum of Money at Stake 14 of money involved. See Eitel, 482 F.2d at 1472. The court compares the “the amount of money 15 at stake in relation to the seriousness of [the d]efendants’ conduct.” PepsiCo, Inc., 238 F. Supp. 16 2d at 1176. Here, the “amount remaining on the original loan as of the date of the ‘Notice of 17 Trustee Sale’ on October 25, 2011 was $1,396,386.37,” which is a substantial amount of money. 18 (Petit. for Removal 4, ECF No. 1). Since there is a substantial amount of money at stake, and the 19 seriousness of the alleged conduct by the Defendants is also substantial, this factor weighs 20 against granting default judgment. 21 4. 22 The fifth factor mitigates against default judgment where there is a “possibility of a 23 The Possibility of a Dispute Concerning Material Facts dispute concerning material facts.” Eitel, 782 F.2d at 1471-72. Defendants still have not 24 8 of 14 1 answered. However, they do claim that “the material facts alleged in the Plaintiff’s Complaint 2 are false and fail to establish a viable cause of action against the Defendants, U.S. Bank and 3 Citigroup,” since they are not part of the foreclosure of the Property. (Mot. to Quash Serv. 10– 4 11, ECF No. 23). There is a dispute as to issues of material fact, at least as to USBNA. As the 5 Court noted in its May 14, 2012 order, it appeared based upon the public records adduced that 6 National Default Servicing Corp. filed the Notice of Default as the purported trustee not only 7 before USBNA substituted it as trustee on the DOT, but before USBNA even had the beneficial 8 interest. It therefore appears probable that USBNA commanded NDSC to file the NOD before 9 USBNA had the beneficial interest. But it is still possible that the previous beneficial interest 10 holder commanded USBNA to foreclose or that it had authority to do so via an agency 11 agreement. It is also possible USBNA had the beneficial interest at an earlier date than the 12 records so far adduced indicate. The statutory propriety of mortgage foreclosures in Nevada is 13 fact-intensive. This factor does not mitigate in favor of a default judgment at this stage. 14 5. 15 The sixth factor favors default judgment where the default was not due to excusable Excusable Neglect 16 neglect. See Eitel, 782 F.2d at 1472. Plaintiff argues that dicta in Aristocrat Techs., Inc. v. High 17 Impact Design & Entm’t, 642 F. Supp. 2d 1228, 1234 (D. Nev. 2009) (Sandoval, J.) indicates 18 that a defendant’s culpable conduct should be dispositive. However, Aristocrat is the only case 19 in this District that hinted at such anapproach, while the other cases weigh excusable neglect as 20 only one Eitel factor. See, e.g., McMillen 205 F.R.D. at 558 (denying a motion for default 21 judgment where there was no excuse for filing the answer late, but there was also no prejudice); 22 see also Rockstar, 2010 WL 2773588, at *3 (holding there was no excusable neglect, but 23 continuing to weigh all seven of the Eitel factors). “A defendant’s conduct is culpable if he has 24 9 of 14 1 received actual or constructive notice of the filing of the action and failed to answer.” Meadows 2 v. Dominican Republic, 817 F.2d 517, 521 (9th Cir. 1987) (analyzing “excusable neglect” under 3 Rule 60(b)(1)). 4 Defendants argue that their conduct was due to excusable neglect because Plaintiff named 5 them improperly in the caption of the Complaint and served them improperly by serving the 6 wrong person at the wrong address. The caption of the Complaint named Defendants as 7 “CITIGROUP MORTGAGE LOAN TRUST 2007-AR4, U.S. BANK NATIONAL 8 ASSOCIATION TRUSTEE, Dated 2/09/07.” Defendants argue Plaintiff should have named 9 them “U.S. Bank, as Trustee for Citigroup Mortgage Loan Trust,” or “U.S. Bank” individually. 10 “In the complaint the title of the action shall include the names of all the parties . . . .” Nev. R. 11 Civ. P. 10(a). Defendants argue that Nevada law “require[s]” the plaintiff to name solely the 12 trustee, not the trust. Nevada requires service upon the trustee if the party has a trustee. Nev. R. 13 Civ. P. 4(d)(2). The caption on its face identifies both the Trust and the Trustee. Plaintiff’s 14 intent here is clear. He identified both the Trust and the Trustee together in order to designate 15 which of the Trustee’s trusts (the Trust) he was suing the Trustee over. USBNA cannot 16 reasonably have been confused that it was being sued as trustee of the Trust in this case. 17 Defendant next argues that Plaintiff should have served the Trustee at the USBNA 18 corporate headquarters in Minnesota. Plaintiff’s Affidavit of Service shows that Plaintiff served 19 “Citigroup Mortgage Loan Trust 2007-AR4, U.S. National Association Trustee, 1 Federal Street, 20 Boston, MA 02110.” (Mot. Precipe for Default 7, ECF No. 18). Plaintiff claims that he served 21 the correct address because the PSA lists the corporate trust office “with respect to the Trustee, 22 U.S. Bank National Association, One Federal Street, 3rd Floor, Boston, Massachusetts 02110.” 23 The Court finds that Plaintiff effected service at the Trustee’s proper address. Even though 24 10 of 14 1 USBNA is the Trustee in this case, and its headquarters are in Minnesota, the PSA lists the 2 principal corporate trust office of the trustee headquarters as the address that Plaintiff’s agent 3 served in Massachusetts. Therefore, the Plaintiff made service at the correct address. 4 Finally, Defendants argue that Plaintiff served the wrong person. Amy Byrnes indicated 5 to the Process Server that she was authorized to accept service “for Citigroup Mortgage Loan 6 Trust 2007-AR4.” (Id.). Defendants argue Ms. Byrnes was merely authorized to accept service 7 for the Trust, but not for the Trustee, and that Plaintiff therefore never actually served the 8 Trustee, but only the Trust. (Id.) The Court rejects this argument. A trust is not a separate legal 9 entity. Unlike a business trust, for example, which is more in the nature of a corporate entity de 10 facto if not de jure, see generally Nev. Rev. Stat. ch. 88A, a traditional common law trust is a 11 legal relationship between legal entities, not a legal entity in-and-of-itself. A typical trust can 12 only act through its trustee(s) or agents thereof. 13 15 A trust is not a legal entity. A trust is not an entity distinct from its trustees and capable of legal action on its own behalf, but merely a fiduciary relationship with respect to property. A trust is not a legal “person” which can own property or enter into contracts, rather, a trust is a relationship having certain characteristics. 16 76 Am. Jur. 2d Trusts § 3 (2005) (citing Roberts v. Lomanto, 5 Cal. Rptr. 3d 866 (Ct. App. 2003) 17 Stevens Family Trust v. Huthsing, 81 S.W.3d 664 (Mo. Ct. App. 2002); Dennett v. Kuenzli, 936 18 P.2d 219 (Idaho Ct. App. 1997)) (footnotes omitted). The Court therefore rejects the argument 19 that only the Trust itself was served and not the Trustee. In other words, to say that Ms. Byrnes 20 may accept service for the Trust is to say that she may accept service for the Trustee, because the 21 Trustee is the sole legal embodiment of the Trust. By designating Ms. Byrnes as agent for 22 service of process upon the Trust, USBNA (the Trustee) effectively designated Ms. Byrnes as an 23 agent for service of process. And even assuming that the Trust qualified as a business trust under 14 24 11 of 14 1 Nevada law, see Nev. Rev. Stat. § 88A.030, service may be had upon the registered agent of 2 such a trust, see Nev. Rev. Stat. § 88A.520(b)(2). The Court need not rely on this analysis, 3 however, because U.S. Bank and Citigroup appear implicitly to disclaim any Massachusetts 4 business trust-type status when they argue that it is the trustee who must be served, not the Trust 5 itself. 6 Moreover, Plaintiff claims that Amy Byrnes in fact accepted service on behalf of the 7 Trustee, because the Affidavit of Service read that the Complaint was “to be served on Citigroup 8 Mortgage Loan Trust 2007-AR4, U.S. National Association Trustee, 1 Federal Street, Boston, 9 MA 02110.” (See Reply to Resp. to Mot. for Default J. 5, 10, ECF No. 29). Plaintiff argues there 10 is no other explanation as to why a “representative of the Trust indicates to the process server 11 that they are authorized to accept service.” (Resp. to Mot. to Quash Serv. 10, ECF No. 25). 12 Nevada requires the proof of service to list “if practicable, the name of the person who was 13 personally served or a physical description of that person.” Nev. Rev. Stat. § 14.025(d). 14 According to the Affidavit of Service, the process server informed Ms. Byrnes of the contents of 15 the Complaint. (Mot. Precipe for Default 7, ECF No. 18). Ms. Byrnes was at the address of the 16 principal corporate trust office of the Trustee headquarters and accepted service on “Citigroup 17 Mortgage Loan Trust 2007-AR4, U.S. National Association Trustee.” Even though she only 18 indicated to the process server that she was authorized to accept service for Citigroup and 19 neglected to mention USBNA (Trustee), she was at the address for the principal corporate trust 20 office of the Trustee headquarters and accepted service on behalf of the Trustee. As a result, 21 Plaintiff properly served the Trustee. Finally, Citigroup has had ample time to file a motion with 22 the Court to quash service, yet none was filed until after the Clerk entered default. Therefore, 23 there is no excusable neglect. 24 12 of 14 1 6. 2 There is a strong policy in the Federal Rules of Civil Procedure favoring decisions on the The Strong Policy Favoring Decisions on the Merits 3 merits. Eitel, 782 F.2d at 1472. Yet the “mere existence of [Rule 55(b)] indicates that this 4 ‘preference, standing alone, is not dispositive.’” PepsiCo, Inc., 238 F. Supp. 2d at 1177. 5 However, if it is reasonably possible for a case to be decided on the merits, it should be. See 6 Eitel, 782 F.2d at 1472 (citing Pena v. Seguros La Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 7 1985)). Therefore, if “movant has a meritorious defense, doubt, if any, should be resolved” 8 against default judgment. Pena, 770 F.2d at 814 (citation omitted). After weighing the seven 9 factors, the Court finds that default judgment is not appropriate. 10 B. 11 Because the motion for default judgment will be denied, the motion to set aside default Motions to Set Aside Default and to Quash Service 12 will be granted. As explained, supra, however, service upon Defendants was proper. Therefore, 13 the motion to quash service will be denied. 14 C. 15 First, Defendants argue that they should be granted summary judgment against the fourth 16 claim for wrongful foreclosure, because there is no dispute as to Plaintiff’s default. But unlike a 17 common law wrongful foreclosure claim, a claim based upon a statutory defect in foreclosure 18 does not require a lack of default. The Court has already dismissed any claim insofar as it 19 purports to rely on a common law wrongful foreclosure theory. 20 Motion for Summary Judgment Next, Defendants adduce the declaration of Robert Bateman, a Vice President of Loan 21 Documentation at Wells Fargo who qualifies as a records custodian and who attests to personal 22 knowledge of the relevant facts. (See Bateman Decl. ¶ 1, Aug. 16, 2012, ECF No. 41, at 13). 23 Bateman attests mainly as to facts already presented to the court, however, he also attests that 24 13 of 14 1 NDSC was authorized by Wells Fargo to record the NOD on June 17, 2011. (See id. ¶ 9). 2 Plaintiff adduces no contrary evidence. Wells Fargo was the beneficiary when NDSC filed the 3 NOD, and Wells Fargo’s records custodian Bateman testifies as to NDSC’s agency. 4 CONCLUSION 5 IT IS HEREBY ORDERED that the Motion for Default Judgment (ECF No. 20) is 6 7 DENIED. IT IS FURTHER ORDERED that the Motion to Quash Service and Set Aside Default 8 (ECF No. 23) is GRANTED in part and DENIED in part. Default is set aside, but service is not 9 quashed. 10 11 12 13 IT IS FURTHER ORDERED that the Motion for Summary Judgment (ECF No. 41) is GRANTED. IT IS SO ORDERED. DATED: This 2nd day of October, 2012. 14 15 16 _____________________________________ ROBERT C. JONES United States District Judge 17 ________________________________ 18 19 20 21 22 23 24 14 of 14
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