Sundby v. Marquee Funding Group, Inc. et al, No. 3:2019cv00390 - Document 304 (S.D. Cal. 2021)

Court Description: ORDER denying 296 Rule 60(b) Motion filed by Dale Sundby. Signed by Judge Gonzalo P. Curiel on 11/18/21. (dlg)
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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DALE SUNDBY, Case No.: 19-cv-00390-GPC-AHG Plaintiff, 12 13 v. 14 MARQUEE FUNDING GROUP, INC., et al., 15 Defendant. 16 17 18 19 20 21 22 23 24 25 26 27 28 ORDER DENYING PLAINTIFF’S RULE 60(b) MOTION [ECF No. 296] On September 17, 2021, Plaintiff Dale Sundby (“Plaintiff”) filed a “Motion for Post-Judgment TILA Damages” pursuant to Federal Rule of Civil Procedure (“Rule”) 60(b). ECF No. 296. The parties have fully briefed the matter. The Court finds this issue suitable for disposition on the papers and VACATES the hearing set for November 19, 2021. Having considered the parties’ filings and the applicable law, and good cause appearing, the Court HEREBY DENIES Plaintiff’s Motion pursuant to Rule 60(b). I. BACKGROUND The extensive factual background of this case is well known to the parties and has been summarized in the Court’s previous Orders, so the Court will not restate its details here. See ECF No. 209 (Summary Judgment Order containing a comprehensive summary 1 19-cv-00390-GPC-AHG 1 of the factual background of the case). Relevant to the instant motion, the Court 2 previously entered partial summary judgment for Plaintiff, finding that Plaintiff had met 3 his burden in demonstrating (1) three Truth in Lending Act (“TILA”) violations as to the 4 2016 Lender Defendants, (2) three TILA violations as to the 2017 Lender Defendants, 5 and (3) one TILA violation as to Defendant Marquee Funding Group (“MFG”). Id. at 53. 6 As to damages on Plaintiff’s first cause of action, the Court found that Defendant MFG’s 7 statutory damages under § 1640(a)(2)(A)(i), (iv) were capped at $4,000 per violation and 8 that § 1640(a)(4) did not apply. Id. The Court denied further summary adjudication of the 9 damages issue under Plaintiff’s first cause of action. Id. On April 22, 2021, following 10 Plaintiff’s Ex Parte Motion for an Order on TILA Damages (ECF No. 230), and based on 11 Defendant’s statements in the proposed final pretrial conference order and the pretrial 12 conference held on December 17, 2020 (ECF No. 234), this Court ordered that Plaintiff 13 was entitled to (1) damages of $370,166.71 for the 2016 loans, and $320,017.26 for the 14 2017 loans, against the Investor Defendants; and (2) damages of $4,000 against 15 Defendant MFG. ECF No. 264 at 19. The Court also reiterated that the 2017 Altered 16 Deed, 2017 MFG Note, and 2017 Fine Note were void, but that the 2017 Original Deed 17 and Note were valid. Id. This Court then directed the Clerk of Court to close the case. Id. 18 On May 17, 2021, Plaintiff filed a Notice of Appeal to the Ninth Circuit as to this 19 Court’s Summary Judgment Order (ECF No. 209) and Judgment on Damages (ECF No. 20 264). ECF No. 267. On September 17, 2021, Plaintiff then filed the instant Motion, styled 21 as a “Motion for Post-Judgment TILA Damages.” ECF No. 296. In a single-page 22 Memorandum of Points and Authorities, Plaintiff states that he seeks an additional 23 $954,594.08 in post-judgment TILA damages from Investor Defendants. Id. at 3. Plaintiff 24 attached Platinum Loan Servicing’s June 25, 2021 “Beneficiary’s Demand for Payoff” as 25 Exhibit 1, stating that “[o]f the ‘Payoff Amount’ of $4,239,136.56, the demand included 26 $915,610.00 in ‘Accrued Interest from 7/8/2018 to 7/9/2021’ and an additional $847.48 27 28 2 19-cv-00390-GPC-AHG 1 for each additional day past 7/9/2021. Id. Plaintiff’s residence was sold at a foreclosure 2 sale on August 25, 2021 to the Investor Defendants, whose bid was $4,334,685.48. Id. 3 According to Plaintiff, “[s]ince the $4,239,136.56. payoff amount plus $38,984.08 4 additional interest from 7/10/21 to 8/25/21 is less than the $4,334,685.48 purchase price, 5 all demanded interest charges are included. As such, interest “Finance Charges” subject 6 to 15 U.S.C. § 1640(a)(4), from 7/8/2018 to 8/25/2021 is $915,610.00 plus $38,984.08, or 7 $954,594.08.” Id. Plaintiff asserts that because these charges “were unknown and 8 unknowable to the Court or Plaintiff at final judgment on April 22, 2021,” Plaintiff now 9 seeks to recoup these post-judgment finance charges pursuant to Rule 60(b)(2) because 10 such charges are newly discovered evidence that, with reasonable diligence, could not 11 have been discovered in time to move for a new trial. Id. Furthermore, Plaintiff seeks this 12 relief pursuant to Rule 60(b)(6), “as being lawful and just.” Id. 13 II. 14 15 16 DISCUSSION A. Legal Standard 1. District Court’s Jurisdiction to Consider Rule 60(b) Motion When Appeal is Pending 17 In general, once a notice of appeal has been filed, the district court is divested of 18 jurisdiction over the matters being appealed. Nat. Res. Def. Council, Inc. v. Sw. Marine 19 Inc., 242 F.3d 1163, 1166 (9th Cir. 2001). However, this principle is not absolute. Federal 20 Rule of Civil Procedure 62.1(a) provides that if a timely motion is made for relief that the 21 court lacks authority to grant because of an appeal that has been docketed and is pending, 22 the court may defer consideration of such a motion, deny the motion on the merits, or 23 issue an “indicative ruling” stating whether the district court would grant the motion if 24 the court of appeals remands for that purpose. Fed. R. Civ. P. 62.1; see Out of the Box 25 Enter., LLC v. El Paseo Jewelry Exch., 737 Fed. Appx. 304, 305 (9th Cir. 2017) (citing 26 NewGen, LLC v. Safe Cig, LLC, 840 F.3d 606, 612 n.1 (9th Cir. 2016)). Rule 62.1 does 27 28 3 19-cv-00390-GPC-AHG 1 not support independent, freestanding motions for relief, but rather applies where a timely 2 motion, typically a Rule 60(b) motion, has been made. Lipsey v. Reddy, No. 17-cv- 3 00569-LJO-BAM, 2019 WL 3080769, at *1 (E.D. Cal. Jul. 15, 2019). 4 2. Rule 60(b) Motion 5 Plaintiff brings his Motion pursuant to Rule 60(b)(2) and Rule 60(b)(6). “Rule 6 60(b) is available only to set aside a prior judgment or order; courts may not use Rule 7 60(b) to grant affirmative relief in addition to the relief contained in the prior order or 8 judgment.” Delay v. Gordon, 475 F.3d 1039, 1044 (9th Cir. 2007) (citing 12 Moore’s 9 Federal Practice § 60.25 (Matthew Bender 3d 2004)). 10 Rule 60(b)(2) allows a court to relieve a party from a final judgment, order, or 11 proceeding due to “newly discovered evidence that, with reasonable diligence, could not 12 have been discovered in time to move for a new trial under Rule 59(b).” Fed. R. Civ. P. 13 60(b)(2). “Newly discovered evidence” is that which existed at the time of the judgment 14 but was not discoverable with reasonable diligence. Fantasyland Video, Inc. v. Cnty. of 15 San Diego, 505 F.3d 996, 1005 (9th Cir. 2007) (noting that evidence did not qualify as 16 “newly discovered” because it simply did not exist at the time of the judgment); see 17 Corex Corp. v. U.S., 638 F.2d 119, 121 (9th Cir. 1981), abrogated on other grounds by 18 Gregorian v. Izvestia, 871 F.2d 1515, 1526 (9th Cir. 1989) (“Cases construing ‘newly 19 discovered evidence,’ either under 60(b)(2) or Rule 59, uniformly hold that evidence of 20 events occurring after the trial is not newly discovered evidence within the meaning of 21 the rules.”). In sum, to prevail on a Rule 60(b)(2) motion “the movant must show the 22 evidence (1) existed at the time of the trial, (2) could not have been discovered through 23 due diligence, and (3) was of such magnitude that production of it earlier would have 24 been likely to change the disposition of the case.” Mitchell v. City of Pittsburg, 2011 WL 25 3877081, at *3 (N.D. Cal. Sept. 2, 2011) (quoting Jones v. Aero/Chem Corp., 921 F.2d 26 875, 878 (9th Cir. 1990)). 27 28 4 19-cv-00390-GPC-AHG 1 Rule 60(b)(6) is a catch-all provision that allows a court to relieve a party from a 2 final judgment, order, or proceeding for “any other reason that justifies relief.” Fed. R. 3 Civ. P. 60(b)(6). Rule 60(b)(6) applies only when the reason for granting relief is not 4 covered by any of the other bases set forth in Rule 60. Delay, 475 F.3d at 1044. Courts in 5 the Ninth Circuit require “extraordinary circumstances justifying the reopening of a final 6 judgment under 60(b)(6).” Riley v. Filson, 933 F.3d 1068, 1071 (9th Cir. 2019). “The 7 standard for a Rule 60(b)(6) motion is high, and such relief should be granted sparingly to 8 avoid manifest injustice.” Id. (quoting Navajo Nation v. Dep’t of the Interior, 876 F.3d 9 1144, 1173 (9th Cir. 2017) (internal quotations omitted)). Sufficiency of Plaintiff’s Motion 10 B. 11 Defendants raise several arguments in opposition to Plaintiff’s Motion. ECF No. 12 298 (“Opp.”). First, Defendants argue that this Court completely lacks jurisdiction to hear 13 Plaintiff’s motion while an appeal is pending. Id. at 6. Second, Defendants argue that 14 there is no new alleged TILA violation at issue because Plaintiff did not pay any 15 additional finance charges and fees in connection with the foreclosure sale which 16 occurred in August 2021. Id. Third, Defendants argue that Plaintiff failed to timely raise 17 the issue of the “new alleged TILA damages” and therefore the motion should be denied 18 for lack of reasonable diligence under Rule 60(b)(2). Id. at 7. Fourth, Defendants argue 19 that Plaintiff cannot establish the requisite “extraordinary circumstances” under Rule 20 60(b)(6) because “nothing prevented the Plaintiff from seeking to add the new alleged 21 TILA damages in the Motion for TILA damages filed by Plaintiff in December 2020.” Id. 22 Finally, Defendants argue that Plaintiff’s “new alleged TILA damages claim” is barred 23 by the three-year statute of limitations under 15 U.S.C. § 1640(e). Id. 24 Defendants are incorrect as to the jurisdictional issue, as the Court has explained 25 supra Section II.A.1 and as Plaintiff argues in his Reply brief (ECF No. 300 at 1). 26 Plaintiff also stridently contests Defendants’ remaining points, arguing inter alia that it 27 28 5 19-cv-00390-GPC-AHG 1 would have been impossible for Plaintiff to raise the issue of post-judgment damages 2 before they manifested. Plaintiff’s Reply also challenges the propriety of the foreclosure 3 sale, Investor Defendants’ deed of trust (“DOT”) and Investor Defendants’ notice of 4 default (“NOD”). However, these arguments are directed against Defendants’ past actions 5 and are of no avail to Plaintiff in the central task at hand: convincing this Court that the 6 high hurdle of a motion for reconsideration has been cleared.1 First, this Court is not convinced that Plaintiff’s later-accrued post-judgment 7 8 interest charges constitute “newly discovered evidence.” Nor is the Court convinced, 9 even assuming arguendo that such charges could constitute newly discovered evidence, 10 that the existence of such charges would form a sufficient basis for reconsideration. As 11 noted above, in the Ninth Circuit, “newly discovered evidence” for the purposes of a Rule 12 60(b) motion must have existed at the time of judgment. Fantasyland Video, Inc. v. Cnty. 13 of San Diego, 505 F.3d 996, 1005 (9th Cir. 2007). The underlying reasoning of Plaintiff’s 14 motion is that the post-judgment finance charges could not have been raised to this Court 15 at the time of Plaintiff’s Damages Motion because they did not yet exist. ECF No. 296 at 16 3 (“These charges were unknown and unknowable to the Court or Plaintiff at final 17 judgment on April 22, 2021”). Therefore, the post-judgment finance charges, by 18 definition, cannot constitute “newly discovered evidence” sufficient to support a 19 successful Rule 60(b)(2) motion. 20 The Court also finds that Plaintiff has not met his heavy burden in convincing this 21 Court that reconsideration should be granted pursuant to Rule 60(b)(6). Plaintiff’s Motion 22 only mentions Rule 60(b)(6) in a perfunctory statement that such reconsideration would 23 24 However, the Court is also not persuaded by Defendants’ arguments to the contrary. In particular, Defendants fail to explain why they believe the statute of limitations under 15 U.S.C. § 1640(e) would be relevant where Plaintiff is seeking to augment his damages award rather than bringing a new claim. 1 25 26 27 28 6 19-cv-00390-GPC-AHG 1 be “lawful and just,” with no explanation as to why Plaintiff’s situation might meet the 2 requisite standard of “extraordinary circumstances.” Plaintiff’s Reply brief similarly fails 3 to persuasively address this standard. Therefore, Plaintiff has not provided the Court with 4 any basis for granting relief pursuant to Rule 60(b)(6). 5 Importantly, Plaintiff has not pointed to any legal authority supporting the 6 availability of the unusual relief he seeks. Plaintiff’s Motion appears to ask the Court to 7 re-open a previously entered judgment and augment the damages award to account for 8 events that occurred after the case was closed. As the Court noted above, Rule 60(b) 9 relief is available only to set aside a prior judgment or order, not to grant a party 10 additional affirmative relief in addition to the relief contained in the prior order or 11 judgment. Delay v. Gordon, 475 F.3d 1039, 1045 (9th Cir. 2007) (collecting cases). 12 Plaintiff argues that because none of the five arguments raised in opposition by the 13 Defendants are “legitimate objections,” Plaintiff’s Motion should be granted. ECF No. 14 300 at 2. This is incorrect. It is Plaintiff’s burden to show this Court why such relief is 15 available, and if available, why relief should be granted. Since Plaintiff has failed to do 16 so, the Court accordingly DENIES Plaintiff’s “Motion for Post-Judgment TILA 17 Damages” pursuant to Rule 60(b). 18 19 IT IS SO ORDERED. Dated: November 18, 2021 20 21 22 23 24 25 26 27 28 7 19-cv-00390-GPC-AHG