Vodonick v. Federal Home Loan Mortgage Association, Inc.

Filing 36

ORDER signed by District Judge John A. Mendez on 3/30/2017 DENYING 24 Motion for Summary Judgment. (Michel, G.)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 8 JOHN VODONICK, 9 12 13 2:15-cv-00539 JAM-EFB Plaintiff, 10 11 No. v. ORDER DENYING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT FEDERAL NATIONAL MORTGAGE ASSOCIATION, INC., a federally chartered corporation, all persons claiming any right, title or interest in certain real property; and DOES 1 through 50, inclusive, 14 Defendants. 15 16 Federal National Mortgage Association (“Fannie Mae” or 17 “Defendant”) moves for summary adjudication on a portion of John 18 Vodonick’s (“Plaintiff”) first claim for declaratory relief. 1 For the reasons set forth below, the Court denies the 19 20 motion. 2 21 1 22 23 24 25 26 27 28 Although Defendant uses the term “summary judgment,” the substance of the motion and the proposed order, ECF No. 28, demonstrate that Defendant only seeks judgment as to part A of Plaintiff’s declaratory relief claim and not on Plaintiff’s second claim related to his purported easement. Defendant contends this claim was dismissed, Reply at 6 (citing ECF No. 18 at 13–14), but nothing on the docket indicates that the Court has adjudicated the second claim for relief or part B of the declaratory relief claim. 2 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled for March 21, 2016. 1 1 2 I. FACTUAL AND PROCEDURAL BACKGROUND Plaintiff owns and resides at 15240 Willow Ridge Court in 3 Nevada City, California. Plaintiff’s Response to Defendant’s 4 Statements of Undisputed Material Facts (“SUF”) at ¶ 1. 5 August 2014, Fannie Mae was assigned the promissory note to the 6 neighboring property, which was declared to be in default. 7 at ¶¶ 2, 3. 8 though Defendant disputes—that he has an easement over a portion 9 of the property. In SUF In addition to being neighbors, Plaintiff alleges— First Amended Complaint (“FAC”) at ¶¶ 10–14; 10 Defendant’s Response to Plaintiff’s Statement of Disputed 11 Material Facts (“SDF”) at ¶ 8. 12 notice of the foreclosure sale—to take place on November 26, 13 2014, at 12:30 p.m.—at the main entrance of the Nevada County, 14 California, Superior Courthouse. 15 for Judicial Notice (“RFJN”), ECF No. 27, Exh. 6. 16 Fannie Mae posted a copy of the SUF at ¶ 4; SDF at ¶ 1; Request Plaintiff was out of town on November 26, 2014, and 17 dispatched an agent, Michael Nudelman, to appear at the auction. 18 SUF at ¶ 6. 19 Nudelman could have made a valid bid on that day, the parties 20 appear to agree that he showed up for the scheduled sale. 21 ¶¶ 6–8; SDS at ¶ 4. 22 to the amount of Fannie Mae’s lien, but to not get into a bidding 23 war with another bidder. 24 whether or not someone appeared to cry the sale or continue the 25 sale to another date. 26 a subsequent day. 27 Upon Sale,” the property was sold “at public auction on 28 12/01/2014 at the place named in the Notice of Sale[.]” Although the parties dispute whether or not Mr. SUF at Plaintiff instructed Mr. Nudelman to bid up SUF at ¶ 9. SDS at ¶ 4. SDS at ¶ 7. The parties dispute The actual sale took place on According to the “Trustees Deed 2 RFJN, 1 Exh. 8 at 2. 2 Plaintiff filed this action in March, 2015, and the Court 3 granted Defendant’s Motion for Judgment on the Pleadings with 4 respect to claims three, four, and five, and part of the first 5 claim in March, 2016. 6 Defendant’s motion with respect to the part of the first claim 7 seeking a declaration that the deed to Defendant is null and 8 void. 9 seeks declarations that the purported deed is null, void, and of ECF No. 18. ECF Nos. 1, 4, & 18. The Court denied For the surviving claims, Plaintiff first 10 no effect and that Plaintiff is vested in title and interest to 11 the easement. Second, Plaintiff seeks to quiet title to the 12 easement by implication. 13 See FAC. II. OPINION 14 A. Jurisdiction 15 The FAC states that the basis for this Court’s jurisdiction 16 is federal question jurisdiction because Defendant’s “charter 17 provides that it is empowered to sue and be sued, and to complain 18 and to defend, in any court of competent jurisdiction, State or 19 Federal.” 20 overruled the Ninth Circuit on this issue, holding that the sue- 21 and-be-sued clause in Defendant Fannie Mae’s charter only permits 22 suit in a court already endowed with subject-matter jurisdiction 23 and is not an independent source of jurisdiction. 24 Cendant Mortg. Corp., 137 S.Ct. 553 (2017). 25 the parties of the change and permitted the parties to brief this 26 issue. 27 MMD-VPC, 2017 WL 899961 (D. Nev. Mar. 7, 2017) (relying on 28 Lightfoot in remanding a case to state court where removal was FAC at ¶ 1. Earlier this year, the U.S. Supreme Court Lightfoot v. The Court notified See Thunder Prop., Inc. v. Treadway, No. 3:15-cv-00141- 3 1 based on the “sue-and-be-sued” clause in Fannie Mae’s charter). 2 The parties submitted a joint response conceding that the Court 3 no longer has federal question jurisdiction over the case. 4 No. 34. 5 case under diversity jurisdiction because the parties are diverse 6 and the property in dispute puts the amount in controversy over 7 the $75,000 minimum. 8 9 ECF They argued, however, that the Court should retain the The Court is satisfied that diversity jurisdiction applies in this case. First, Plaintiff is a California citizen, FAC ¶ 3, 10 and Defendant is a citizen of the District of Columbia, 12 U.S.C. 11 § 1717(a)(2)(B). 12 a declaration that the deed to Defendant is null and void. 13 though the FAC does not allege damages, the parties provide 14 persuasive authority and evidence that the requirement is met in 15 this case. 16 for the price of $393,824.21); Cohn v. Petsmart, Inc., 281 F.3d 17 837, 840 (9th Cir. 2002) (“In actions seeking declaratory or 18 injunctive relief, it is well established that the amount in 19 controversy is measured by the value of the object of the 20 litigation.”) (citation omitted); Hendricks v. Wells Fargo Bank, 21 N.A., No. CV-15-01299-MWF (JEMx), 2015 WL 1644028, at *5–6 (C.D. 22 Cal. Apr. 14, 2015) (finding that, in an action seeking to enjoin 23 the foreclosure sale, the value of the property was relevant to 24 determining the amount in controversy). 25 the case. Second, Plaintiff’s first cause of action seeks Even See RFJN, ECF No. 35, Exh. 1 (Trustees Deed Upon Sale The Court thus retains 26 B. 27 Defendant seeks judicial notice of several documents, most 28 Judicial Notice and Evidentiary Objections of which are not pertinent to the Court’s ruling on this motion. 4 1 See RFJN, ECF No. 27. 2 notice of Defendant’s Exhibit 6 ([“Notice of Trustee’s Sale”] 3 dated October 29, 2014, recorded on October 31, 2014, in the 4 official records of Nevada County as document number 20140021214) 5 and Exhibit 8 ([“Trustee’s Deed Upon Sale”] dated December 2, 6 2014, recorded in the official records of Nevada County on 7 December 8, 2014, as document number 20140023981). 8 again requests notice of the same “Trustee’s Deed Upon Sale” in 9 support of its jurisdictional argument. Among those documents, Defendant requests Defendant RFJN, ECF No. 35, Exh. 10 1. 11 in the public record and not subject to reasonable dispute. 12 Grant v. Aurora Loan Services, Inc., 736 F. Supp. 2d 1257, 1263– 13 64 (C.D. Cal. 2010). 14 as to these three documents. 15 Plaintiff does not raise any objections. These documents are See Thus, the Court grants Defendant’s requests As for evidentiary objections, Defendant objects to portions 16 of John Vodonick’s Declaration, ECF No. 30-1, and portions of 17 Michael Nudelman’s Declaration, ECF No. 30–2, due to 18 contradictions between the declarations and prior testimony or 19 statements. 20 turn on the declarations, the Court declines to rule on this 21 issue. Reply at 7–9. Because the Court’s ruling does not 22 C. Legal Standard 23 Summary judgement is proper if the movant shows that there 24 is no genuine dispute as to any material fact and the movant is 25 entitled to judgment as a matter of law. 26 “A moving party without the ultimate burden of persuasion at 27 trial . . . has both the initial burden of production and the 28 ultimate burden of persuasion on a motion for summary judgment.” 5 Fed. R. Civ. P. 56(a). 1 Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Companies, Inc., 210 2 F.3d 1099, 1102 (9th Cir. 2000). 3 of production, the moving party must either produce evidence 4 negating an essential element of the nonmoving party’s claim or 5 defense or show that the nonmoving party does not have enough 6 evidence of an essential element to carry its ultimate burden of 7 persuasion at trial.” 8 burden of persuasion on the motion, the moving party must 9 persuade the court that there is no genuine issue of material 10 fact.” Id. “In order to carry its burden “In order to carry its ultimate Id. 11 D. Analysis 12 Plaintiff seeks a declaration that Fannie Mae’s deed to the 13 property is null, void, and of no effect due to procedural 14 defects in the notice of sale. 15 presumption is that a foreclosure sale has been conducted 16 regularly and fairly. 17 Inc., 85 Cal. App. 4th 1279, 1284 (2001). 18 the sale for failure to comply with procedural requirements, 19 there must be evidence that the failure caused prejudice to the 20 plaintiff. 21 (2004) (finding that the premature mailing of the Sale Notice did 22 not render the sale subject to attack); Benson v. Ocwen Loan 23 Servicing, LLC, 562 Fed. Appx. 567, 570 (9th Cir. 2014) 24 (rejecting a wrongful foreclosure claim premised on defendant’s 25 failure to announce the new sale date because the plaintiff 26 received actual notice of the new sale date and could not show 27 prejudice). 28 Compl. at ¶¶ 20, 24. The general 6 Angels, Inc. v. Stuart-Wright Mortg., In order to challenge Id.; see Knapp v. Doherty, 123 Cal. App. 4th 76, 96 Defendant argues that Plaintiff was unable to tender payment 6 1 at the foreclosure sale scheduled for November 26, 2014. 2 4–8; SUF at ¶¶ 7–10. 3 inability, Plaintiff cannot show he was prejudiced by the alleged 4 procedural defect. 5 ability to tender on November 26, 2014 (the advertised sale date) 6 are irrelevant because the sale did not occur on that date. 7 at 1–2. MSJ at Defendant contends that, due to this Plaintiff argues that facts concerning his Opp. 8 The Court agrees with Plaintiff; Defendant misses the mark. 9 The alleged prejudicial procedural error was Defendant’s failure 10 to announce the continuance of the foreclosure sale to a later 11 date, causing Plaintiff to be unable to make a bid at the actual 12 sale. 13 have tendered payment on December 1, 2014. 14 would have attended and made a full credit bit. 15 Defendant produces no evidence that Plaintiff could not have done 16 so. 17 none of the cited cases give the Court any reason to conclude 18 that the inquiry turns on the cancelled foreclosure sale rather 19 than the actual foreclosure sale. 20 favor of summary adjudication are premised on this theory, its 21 motion is denied. 22 Thus, the relevant question is whether Plaintiff could Plaintiff alleges he Compl. at ¶ 20. Although neither party cites a factually analogous case, As Defendant’s arguments in In a final effort, Defendant asks for summary judgment 23 because declaratory relief is not appropriate where Plaintiff 24 seeks to redress past wrongs. 25 argument in its earlier motions on the pleadings. 26 13. 27 28 Defendant did not make this ECF Nos. 6 & In an action for declaratory relief, the Court must inquire whether there is a case of actual controversy within its 7 1 jurisdiction. 2 (9th Cir. 1994). 3 claim operates ‘prospectively,’ not to redress past wrongs.” 4 Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1111 (E.D. Cal. 5 2014) (citation omitted). 6 Am. States Ins. Co. v. Kearns, 15 F.3d 142, 143 As Defendant argues, “[a] declaratory relief The only foreclosure sale case Defendant cites is 7 distinguishable from the present circumstances. In Flores v. EMC 8 Mortg. Co., the court dismissed a claim seeking a declaration 9 that the defendants were not authorized to foreclose on a 10 property after the defendants had already foreclosed on the 11 property. 12 sought to redress past alleged wrongs, rather than prospective 13 wrongdoing, and, additionally, that the claim must fail given the 14 court’s dismissal of the plaintiff’s claims on identical issues. 15 Id. 16 and Plaintiff seeks a declaration that it is null and void. 17 Thus, there appears to be a live controversy over the deed’s 18 status and the Court is not persuaded that the action is merely 19 backward looking. Id. at 1111–12. Here, however, the validity of the deed itself is in dispute 20 21 22 23 24 The court reasoned that the complaint III. ORDER For the reasons set forth above, the Court DENIES Defendant’s Motion for Summary Judgment. IT IS SO ORDERED. Dated: March 30, 2017 25 26 27 28 8

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