State Bank of Texas v. Parabia et al

Filing 290

ORDER: (1) Denying Defendants Perin and Sam Parabia's Motion to Set Aside Default Judgment [Doc. No. 284 ]; and (2) Denying Defendants Perin and San Parabia's Motion for Temporary Restraining Order [Doc. No. 285 ]. Signed by Judge M. James Lorenz on 10/8/2019. (lrf)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

Case No.: 14-cv-3031-L-KSC

STATE BANK OF TEXAS,
Plaintiff,

12
13

v.

14

ORDER:

SAM PARABIA, ET AL.,

15

(1) DENYING DEFENDANTS PERIN
AND SAM PARABIA'S MOTION TO
SET ASIDE DEFAULT JUDGMENT
[Doc. No. 284]; AND

Defendants.

16
17

(2) DENYING DEFENDANTS PERIN
AND SAM PARABIA'S MOTION
FOR TEMPORARY RESTRAINING
ORDER [Doc. No. 285]

18
19
20
21

By order filed September 15, 2017, the Court granted Plaintiff's motions for default

22

judgment against Defendants Sam and Perin Parabia, Farzin Morena ("Morena") and Ayer

23

Capital Advisors, Inc. ("Ayer"), thus allowing judicial foreclosure sale of the residence

24

owned by Defendants Parabia to go forward. (Doc. No. 84 (the "September 15, 2017

25

Order")). Subsequently, the Court overruled Perin Parabia's Objection to U.S. Marshal's

26

Sale (Doc. No. 164 (the “December 19, 2017 Order”). On October 4, 2019, Defendants

27

Perin and Sam Parabia filed a Motion to Set Aside Default and Default Judgment based on

28

Federal Rules of Civil Procedure 60(b)(3) and (5). See Doc. 284-1. Also, Defendants filed
1
14-cv-3031-L-KSC

1

a motion for a Temporary Restraining Order seeking to stay the October 9, 2019 sale of

2

the Parabia residence (7213 Romero Drive, La Jolla, California). For the reasons stated

3

below, both motions are DENIED.

4
5

I.

6

In 2009, National Republic Bank of Chicago ("Republic") extended a home loan to

7

the Parabias for $1 million. The loan was accompanied by a promissory note and secured

8

by a deed of trust ("Deed of Trust") on the property located at 7213 Romero Drive in La

9

Jolla, California ("Property"). The Federal Deposit Insurance Corporation ("FDIC") took

10

receivership of Republic. On October 24, 2014, Plaintiff acquired Republic's assets from

11

the FDIC, including all rights to the Parabias' loan, promissory note and deed of trust.

BACKGROUND

12

Shortly thereafter, Plaintiff filed this action for judicial foreclosure against the

13

Parabias, who were in default. In July 2015, the parties settled. On July 7, 2015, they filed

14

a Stipulation for Entry of Judgment of Foreclosure and Order of Sale ("Stipulation"),

15

together with the underlying Settlement Agreement and Mutual Release ("Settlement")

16

(See doc. no. 27 & 27-1.) The Court approved the Stipulation and entered Order Granting

17

Joint Motion for Judgment of Foreclosure and Order of Sale. (Doc. No. 28.)

18

On March 1, 2016, a day before foreclosure, Citizens Business Bank ("Citizens")

19

filed a Judgment Lienholder's Objection to U.S. Marshal's Sale, claiming to hold a lien on

20

the Property. (Doc. No. 48). On March 25, 2016, Plaintiff filed a motion to vacate the

21

judgment because, in preparation for the sale, it discovered that in addition to Citizens,

22

Morena and Ayer also held liens on the Property. (Doc. Nos. 51 & 53.) The judgment was

23

vacated, and Plaintiff filed the Verified Second Amended and Supplemental Complaint for

24

Judicial Foreclosure on Deed of Trust ("Second Amended Complaint") against the

25

Parabias, Morena, Ayer and Citizens for judicial foreclosure free and clear of junior liens.

26

The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.

27

Of all Defendants, only Citizens appeared in response to the Second Amended

28

Complaint. Defaults were entered against the Parabias, Morena and Ayer. Plaintiff filed
2
14-cv-3031-L-KSC

1

a motion for default judgment against the non-appearing Defendants, and a summary

2

judgment motion against Citizens, seeking a finding that Citizens' lien is junior to

3

Plaintiff's. On September 15, 2017, the motions were granted. The Court found that

4

Plaintiff held a lien senior to the Citizens' lien, and entered default judgment against the

5

remaining Defendants. This allowed Plaintiff to seek a writ of execution and proceed with

6

the U.S. Marshal's sale.

7

On November 13, 2017, Perin Parabia filed the Objection, requesting that the default

8

and judgment of sale be set aside pursuant to Federal Rules of Civil Procedure 55(c) and

9

60(b)(1). The December 19, 2017 order overruled Defendant Parabia’s objections. On the

10

eve of the sole of the Parabia residence, Defendants Perin and Sam Parabia filed a Motion

11

to Set Aside Default and Default Judgment based on Federal Rules of Civil Procedure

12

60(b)(3) and (5). Also, Defendants filed a motion for a Temporary Restraining Order

13

seeking to stay the October 9, 2019 sale of the Parabia residence.

14
15
16

II.

DISCUSSION
A.

Rule 60(b)(3)

17

Under Federal Rule of Civil Procedure 60(c)(1), a rule 60(b)(3) motion must be

18

made within a reasonable time and no later than a year after entry of the judgment or order.

19

“To prevail [under Rule 60(b)(3)], the moving party must prove by clear and convincing

20

evidence that the verdict was obtained through fraud, misrepresentation, or other

21

misconduct and the conduct complained of prevented the losing party from fully and fairly

22

presenting the defense.” Casey v. Albertson’s Inc., 362 F.3d 1254, 1260 (9th Cir. 2004)

23

(quoting De Saracho v. Custom Food Machinery, Inc., 206 F.3d 874, 880 (9th Cir. 2000)).

24

The instant motion attempts to set aside the September 15, 2017 default judgment on the

25

basis of fraud. However, the instant motion is untimely as it was not filed in a reasonable

26

amount of time, clearly beyond the one year deadline. Notwithstanding, the Court finds

27

that Defendants have not provided clear and convincing evidence that the default judgment

28
3
14-cv-3031-L-KSC

1

was obtained by fraud. Accordingly, Defendants’ motion to set aside the default judgment

2

on Rule 60(b)(3) grounds is DENIED.

3

B.

Rule 60(b)(5)

4

A court may relieve a party from a final judgment or order if “the judgment has been

5

satisfied, released, or discharged[.]” Fed. R. Civ. P. 60(b)(5). Defendants assert, “the

6

matter had been settled [by] mutual agreement between Sam Parabia and State Bank of

7

Texas on January 21, 2016.” Doc. 284-1 at 5. Defendant further claim that Chan Patel,

8

acting as Chairman of State Bank of Texas, entered into a novation to the note and deed of

9

trust on the Parabia residence, in which the foreclosure matter would be settled upon Mr.

10

Parabia’s payment of “2,4211,740 [sic] Indian Rupees[] ($357,000.00)[.]” Id. Defendants

11

rely on four exhibits to demonstrate satisfaction of the judgment. See Doc. No. 284-2.

12

However, upon review, the Court finds that none of these documents demonstrate

13

satisfaction of either the default judgment or the underlying foreclosure matter. In fact, the

14

Parabia residence is not even mentioned these documents. As such, the Court further finds

15

that Defendants have not carried their burden. See Rufo v. Inmates of Suffolk Cty. Jail, 502

16

U.S. 367, 383 (1992). Accordingly, Defendants’ motion to set aside the default judgment

17

on Rule 60(b)(5) grounds is DENIED.

18

C.

Motion for Temporary Restraining Order

19

Federal Rule of Civil Procedure 65 provides authority to issue preliminary

20

injunctions or temporary restraining orders. The purpose of these orders is to preserve the

21

status the parties’ relative positions until a full trial on the merits can be conducted. See

22

Univ. of Texas v. Camenish, 451 U.S. 390, 395 (1981). Generally, a plaintiff “must

23

establish that he is [1] likely to succeed on the merits, [2] that he is likely to suffer

24

irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in

25

his favor, and [4] that an injunction is in the public interest.” Am. Trucking Ass’ns v. City

26

of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2001). Plaintiff fails to establish a likelihood

27

of success or that a temporary restraining or serves the public interest. As such, denial of

28
4
14-cv-3031-L-KSC

1

Defendants’ motion is required.

2

restraining order is DENIED.

3

IT IS SO ORDERED.

Accordingly, Defendants’ motion for a temporary

4
5

Dated: October 8, 2019

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
5
14-cv-3031-L-KSC