State Bank of Texas v. Parabia et al
Filing
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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)
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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Case No.: 14-cv-3031-L-KSC
STATE BANK OF TEXAS,
Plaintiff,
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v.
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ORDER:
SAM PARABIA, ET AL.,
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(1) DENYING DEFENDANTS PERIN
AND SAM PARABIA'S MOTION TO
SET ASIDE DEFAULT JUDGMENT
[Doc. No. 284]; AND
Defendants.
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(2) DENYING DEFENDANTS PERIN
AND SAM PARABIA'S MOTION
FOR TEMPORARY RESTRAINING
ORDER [Doc. No. 285]
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By order filed September 15, 2017, the Court granted Plaintiff's motions for default
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judgment against Defendants Sam and Perin Parabia, Farzin Morena ("Morena") and Ayer
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Capital Advisors, Inc. ("Ayer"), thus allowing judicial foreclosure sale of the residence
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owned by Defendants Parabia to go forward. (Doc. No. 84 (the "September 15, 2017
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Order")). Subsequently, the Court overruled Perin Parabia's Objection to U.S. Marshal's
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Sale (Doc. No. 164 (the “December 19, 2017 Order”). On October 4, 2019, Defendants
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Perin and Sam Parabia filed a Motion to Set Aside Default and Default Judgment based on
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Federal Rules of Civil Procedure 60(b)(3) and (5). See Doc. 284-1. Also, Defendants filed
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a motion for a Temporary Restraining Order seeking to stay the October 9, 2019 sale of
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the Parabia residence (7213 Romero Drive, La Jolla, California). For the reasons stated
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below, both motions are DENIED.
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I.
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In 2009, National Republic Bank of Chicago ("Republic") extended a home loan to
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the Parabias for $1 million. The loan was accompanied by a promissory note and secured
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by a deed of trust ("Deed of Trust") on the property located at 7213 Romero Drive in La
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Jolla, California ("Property"). The Federal Deposit Insurance Corporation ("FDIC") took
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receivership of Republic. On October 24, 2014, Plaintiff acquired Republic's assets from
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the FDIC, including all rights to the Parabias' loan, promissory note and deed of trust.
BACKGROUND
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Shortly thereafter, Plaintiff filed this action for judicial foreclosure against the
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Parabias, who were in default. In July 2015, the parties settled. On July 7, 2015, they filed
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a Stipulation for Entry of Judgment of Foreclosure and Order of Sale ("Stipulation"),
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together with the underlying Settlement Agreement and Mutual Release ("Settlement")
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(See doc. no. 27 & 27-1.) The Court approved the Stipulation and entered Order Granting
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Joint Motion for Judgment of Foreclosure and Order of Sale. (Doc. No. 28.)
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On March 1, 2016, a day before foreclosure, Citizens Business Bank ("Citizens")
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filed a Judgment Lienholder's Objection to U.S. Marshal's Sale, claiming to hold a lien on
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the Property. (Doc. No. 48). On March 25, 2016, Plaintiff filed a motion to vacate the
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judgment because, in preparation for the sale, it discovered that in addition to Citizens,
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Morena and Ayer also held liens on the Property. (Doc. Nos. 51 & 53.) The judgment was
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vacated, and Plaintiff filed the Verified Second Amended and Supplemental Complaint for
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Judicial Foreclosure on Deed of Trust ("Second Amended Complaint") against the
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Parabias, Morena, Ayer and Citizens for judicial foreclosure free and clear of junior liens.
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The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.
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Of all Defendants, only Citizens appeared in response to the Second Amended
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Complaint. Defaults were entered against the Parabias, Morena and Ayer. Plaintiff filed
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a motion for default judgment against the non-appearing Defendants, and a summary
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judgment motion against Citizens, seeking a finding that Citizens' lien is junior to
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Plaintiff's. On September 15, 2017, the motions were granted. The Court found that
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Plaintiff held a lien senior to the Citizens' lien, and entered default judgment against the
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remaining Defendants. This allowed Plaintiff to seek a writ of execution and proceed with
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the U.S. Marshal's sale.
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On November 13, 2017, Perin Parabia filed the Objection, requesting that the default
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and judgment of sale be set aside pursuant to Federal Rules of Civil Procedure 55(c) and
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60(b)(1). The December 19, 2017 order overruled Defendant Parabia’s objections. On the
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eve of the sole of the Parabia residence, Defendants Perin and Sam Parabia filed a Motion
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to Set Aside Default and Default Judgment based on Federal Rules of Civil Procedure
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60(b)(3) and (5). Also, Defendants filed a motion for a Temporary Restraining Order
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seeking to stay the October 9, 2019 sale of the Parabia residence.
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II.
DISCUSSION
A.
Rule 60(b)(3)
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Under Federal Rule of Civil Procedure 60(c)(1), a rule 60(b)(3) motion must be
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made within a reasonable time and no later than a year after entry of the judgment or order.
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“To prevail [under Rule 60(b)(3)], the moving party must prove by clear and convincing
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evidence that the verdict was obtained through fraud, misrepresentation, or other
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misconduct and the conduct complained of prevented the losing party from fully and fairly
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presenting the defense.” Casey v. Albertson’s Inc., 362 F.3d 1254, 1260 (9th Cir. 2004)
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(quoting De Saracho v. Custom Food Machinery, Inc., 206 F.3d 874, 880 (9th Cir. 2000)).
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The instant motion attempts to set aside the September 15, 2017 default judgment on the
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basis of fraud. However, the instant motion is untimely as it was not filed in a reasonable
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amount of time, clearly beyond the one year deadline. Notwithstanding, the Court finds
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that Defendants have not provided clear and convincing evidence that the default judgment
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was obtained by fraud. Accordingly, Defendants’ motion to set aside the default judgment
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on Rule 60(b)(3) grounds is DENIED.
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B.
Rule 60(b)(5)
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A court may relieve a party from a final judgment or order if “the judgment has been
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satisfied, released, or discharged[.]” Fed. R. Civ. P. 60(b)(5). Defendants assert, “the
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matter had been settled [by] mutual agreement between Sam Parabia and State Bank of
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Texas on January 21, 2016.” Doc. 284-1 at 5. Defendant further claim that Chan Patel,
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acting as Chairman of State Bank of Texas, entered into a novation to the note and deed of
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trust on the Parabia residence, in which the foreclosure matter would be settled upon Mr.
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Parabia’s payment of “2,4211,740 [sic] Indian Rupees[] ($357,000.00)[.]” Id. Defendants
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rely on four exhibits to demonstrate satisfaction of the judgment. See Doc. No. 284-2.
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However, upon review, the Court finds that none of these documents demonstrate
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satisfaction of either the default judgment or the underlying foreclosure matter. In fact, the
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Parabia residence is not even mentioned these documents. As such, the Court further finds
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that Defendants have not carried their burden. See Rufo v. Inmates of Suffolk Cty. Jail, 502
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U.S. 367, 383 (1992). Accordingly, Defendants’ motion to set aside the default judgment
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on Rule 60(b)(5) grounds is DENIED.
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C.
Motion for Temporary Restraining Order
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Federal Rule of Civil Procedure 65 provides authority to issue preliminary
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injunctions or temporary restraining orders. The purpose of these orders is to preserve the
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status the parties’ relative positions until a full trial on the merits can be conducted. See
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Univ. of Texas v. Camenish, 451 U.S. 390, 395 (1981). Generally, a plaintiff “must
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establish that he is [1] likely to succeed on the merits, [2] that he is likely to suffer
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irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in
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his favor, and [4] that an injunction is in the public interest.” Am. Trucking Ass’ns v. City
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of Los Angeles, 559 F.3d 1046, 1052 (9th Cir. 2001). Plaintiff fails to establish a likelihood
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of success or that a temporary restraining or serves the public interest. As such, denial of
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Defendants’ motion is required.
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restraining order is DENIED.
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IT IS SO ORDERED.
Accordingly, Defendants’ motion for a temporary
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Dated: October 8, 2019
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