Hardisty v. Moore et al

Filing 267

ORDER denying Plaintiff's 264 Motion for Post-Judgment Relief. Signed by Judge Cynthia Bashant on 1/25/2018. (jah)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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JOHN T. HARDISTY,

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Case No. 11-cv-01591-BAS-BLM
Plaintiff,

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v.

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ORDER DENYING MOTION
FOR POST-JUDGMENT RELIEF
[ECF No. 264]

MELANIE MOORE, et al.,

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Defendants.

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Plaintiff John T. Hardisty moves for post-judgment relief concerning deeds of

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trust recorded on two of his properties. (ECF No. 264.) Alternatively, he requests this

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Court determine the sufficiency of a supersedeas bond posted by Defendants. (Id.)

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Defendants oppose. (ECF No. 265.) The Court finds this motion suitable for

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determination on the papers submitted and without oral argument. See Fed. R. Civ. P.

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78(b); Civ. L.R. 7.1(d)(1). For the following reasons, the Court DENIES Plaintiff’s

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motion.

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I.

Request for Court Order Concerning Deeds of Trust

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Plaintiff’s first request is styled as a “motion to enforce ruling.” (Mot. 1:14–

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15.) To explain this request, the Court will provide a truncated background. As part

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of a real estate development project financed by the U.S. Department of Housing and
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Urban Development (“HUD”), Hal Moore contributed $1.5 million in capital to the

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project. (Am. Findings of Fact & Conclusions of Law 3:20–21, ECF No. 236.) In

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return, Plaintiff “agreed to seek approval from HUD for the transfer of a 50%

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membership interest in [the project] to Hal Moore and signed a Promissory Note

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Secured by Deeds of Trust dated August 20, 2007 in the amount of $1.5 million.” (Id.

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3:21–24.) “In the Promissory Note, [Plaintiff] agreed to pay 13% interest per year on

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the unpaid balance of the $1.5 million investment.” (Id. 3:24–4:1.)

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In his Third Amended Complaint, Plaintiff brought a claim under California

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state law to quiet title in the properties subject to the deeds of trust securing the $1.5

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million loan. (Third Am. Compl. ¶¶ 257–67, ECF No. 34.) He alleged that Defendants

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have “no right, title, estate, lien, or interest” in the subject properties and sought to

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“quiet title as of the date of the filing of this Complaint.” (Id. ¶¶ 266–67.)

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A quiet title action seeks “to finally settle and determine, as between the parties,

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all conflicting claims to the property in controversy, and to decree to each such interest

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or estate therein as he [or she] may be entitled to.” Peterson v. Gibbs, 147 Cal. 1, 5

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(1905). Therefore, a plaintiff may bring a quiet title action “to establish title against

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adverse claims to real or personal property or any interest therein.” Cal. Civ. Proc.

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Code § 760.020.

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In 2013, Defendants moved for summary judgment on Plaintiff’s quiet title

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claim. (Mot. Summ. J. 17:12–18:6, ECF No. 59-1.) Defendants argued Plaintiff’s

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quiet title claim should be adjudicated in their favor because Plaintiff had failed to

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properly bring this claim. (Id. 18:3–6.) Judge Battaglia granted the motion, noting

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Plaintiff “did not oppose dismissal of this claim for failure to set forth the allegations

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in a verified complaint.” (Summ. J. Order 25:16–19, ECF No. 80.)

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This case proceeded to a bench trial. By then, only several of Plaintiff’s causes

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of action remained. “Each of the remaining causes of action was limited to

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allegations” concerning: (i) Plaintiff’s “transfer of his 27% ownership interest” in the

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project, (ii) Plaintiff’s separate transfer of another ownership interest, and (iii) “an
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amount of $380,000 allegedly owed by Hal Moore to [Plaintiff] upon completion of

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the” project. (Am. Findings of Fact & Conclusions of Law 2:19–26.) Ultimately,

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Plaintiff prevailed on his claim seeking $380,000 and certain attorneys’ fees he

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incurred in another jurisdiction in connection with Defendants’ tortious conduct. (Id.

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25:18–26:14.) After an adjustment for prejudgment interest, the Court found Plaintiff

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is entitled to recover $675,101.66. (Id. 27:16–20.) Plaintiff, however, had also

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accepted before trial an offer of judgment under Federal Rule of Civil Procedure 68

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with respect to a counterclaim against him. (ECF No. 130.) Thus, in addition to

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entering judgment in Plaintiff’s favor for $675,101.66, the Court also entered

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judgment against him for $750,000. (Second Am. J., ECF No. 237.) Since then, this

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case has been on appeal.

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Now, over three years after trial, Plaintiff brings this “motion to enforce

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ruling.” (Mot. 1:14–15.) Plaintiff is not, however, seeking to enforce a determination

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this Court made at trial. Rather, the motion concerns a statement from Judge

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Battaglia’s order on Defendants’ motion for summary judgment. (Id. 2:7–9.) In

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discussing the $1.5 million loan Hal Moore made and its associated promissory note,

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Judge Battaglia reasoned that “any disagreement between the parties regarding

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Plaintiff’s justifiable reliance or the application of the parol evidence rule with regard

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to the August 2007 Note is moot because the Court finds the August 2007 Note was

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canceled when Plaintiff transferred the 50% membership interest in [the project] to

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Defendant Hal Moore.” (Summ. J. Order 13:12–15.) The Court made this statement

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while granting “Defendants’ motion for summary judgment with respect to alleged

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misrepresentations regarding the August 2007 Note.” (Id. 13:16–17.)

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Plaintiff reports that since the Court’s summary judgment order, he has

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requested that Defendants reconvey the deeds of trust on his properties. (Mot. 2:12–

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15.) He based this request on the Court’s statement that the August 2007 Note was

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cancelled. (Id. 2:12–15.) Yet, Defendants have apparently refused to do so. (Id. 2:14–

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15.) They assert the deeds of trust also secure additional promissory notes that were

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executed after the August 2007 Note. (Opp’n 6:1–23.)

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Dissatisfied with this response, Plaintiff brings this motion to somehow enforce

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the Court’s statement in its 2014 summary judgment order, which—as mentioned—

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granted partial summary judgment against Plaintiff and dispensed with his quiet title

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claim. He wants the Court to “order Defendants to remove the improperly asserted

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liens in aid of implementation of the Court’s ruling that the $1.5 million note was

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cancelled as of November 2007.” (Mot. 5:1–3.)

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The Court will not issue the requested order. Plaintiff’s request is peculiar. At

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bottom, he is using a post-judgment motion to request that this Court quiet title in his

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properties. But Plaintiff’s quiet title claim was summarily adjudicated in Defendants’

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favor. It was not at issue at trial, and as far as this Court can surmise, this post-

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judgment motion is the first time Plaintiff has attempted to raise this controversy since

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his quiet title claim was summarily dismissed. Moreover, this matter is not one of

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compliance with the Court’s prior order. The Court never ordered Defendants to

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reconvey the deeds of trust recorded on Plaintiff’s properties.

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That being said, the Court expresses no opinion on whether Plaintiff may be

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successful in pursuing other avenues of relief outside of this Court, including

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California’s statutory procedure for reconveyance of a deed of trust where the

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obligation “has been fully satisfied and the present mortgagee or beneficiary of record

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. . . refuses to execute and deliver a proper certificate of discharge or request for

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reconveyance.” See Cal. Civ. Code § 2941.7; see also Carter v. Cont’l Land Title Co.,

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233 Cal. App. 3d 1597, 1598 (1991) (“Civil Code section 2941.7 provides a procedure

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by which a borrower may obtain reconveyance of a trust deed, when the obligation

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secured by the trust deed has been paid and the lender cannot be located or refuses to

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request the trustee to reconvey.”). For this proceeding, however, the train has already

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left the station—several years ago. Plaintiff’s request for post-judgment relief is

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denied.
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II.

Request to Determine Sufficiency of Supersedeas Bond

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In the alternative, Plaintiff requests this Court “vacate the approval of

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Defendants’ bond because the bond is insufficient.” (Mot. 5:7–10.) To summarize

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Plaintiff’s position, he argues that if Defendants are appealing the Court’s statement

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that “the August 2007 Note was canceled when Plaintiff transferred the 50%

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membership interest in [the project] to Defendant Hal Moore,” they should be forced

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to increase their supersedeas bond on file to account for the additional consideration

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at stake. (Id. 5:7–17.) Plaintiff therefore asks this Court to order Defendants to

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increase the amount of their bond “by no less than $1,875,000.” (Id. 5:16–17.)

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Federal Rule of Civil Procedure 62(d) permits a stay of the execution of a final

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judgment pending appeal when the moving party posts a supersedeas bond. The

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purpose of a supersedeas bond is to shield an appellee from a loss that could result

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from the stay. Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir.

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1987); N.L.R.B. v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988). “The stay takes effect

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when the court approves the bond.” Fed. R. Civ. P. 62(d).

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“District courts have inherent discretionary authority in setting supersedeas

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bonds.” Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1505 n.1 (9th Cir. 1987).

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Thus, a court has not only “discretion to allow other forms of judgment guarantee,”

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Int’l Telemeter, Corp. v. Hamlin Int’l Corp., 754 F.2d 1492, 1495 (9th Cir. 1985), but

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also “broad discretionary power to waive the bond requirement if it sees fit,”

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Townsend v. Holman Consulting Corp., 881 F.2d 788, 796–97 (9th Cir. 1989).

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However, “the standard practice of district courts is to require that the supersedeas

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bond be a surety bond, and that it be for the full amount of the judgment plus interest,

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costs, and an estimate of any damages attributed to the delay.” Antoninetti v. Chipotle

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Mexican Grill, Inc., No. 05-cv-1660-J (WMC), 2009 WL 1390811, at *2 (S.D. Cal.

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May 15, 2009) (citation omitted).

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In this case, the Court approved a supersedeas bond in the amount of

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$843,877.00. (ECF No. 258.) This bond represents 125% of the amount of damages
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the Court determined Plaintiff is entitled to—$675,101.66. (See Second Am. J.)

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Having considered Plaintiff’s motion, the Court is not persuaded that it should

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exercise its discretion to require Defendants to post a larger bond. Plaintiff does not

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convincingly demonstrate the current bond fails to shield him from a loss that could

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result from the stay. See Rachel, 831 F.2d at 1505 n.1. Consequently, the Court denies

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Plaintiff’s request to increase the supersedeas bond.

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III.

Conclusion
In light of the foregoing, the Court DENIES Plaintiff’s motion for post-

judgment relief (ECF No. 264).
IT IS SO ORDERED.

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DATED: January 25, 2018

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