Property Reserve, Inc. v. Wasson et al

Filing 128

ORDER AFFIRMING ORDER REINSTATING THE ENTRY OF DEFAULT AND ADOPTING THE FINDINGS AND RECOMMENDATION THAT DEFAULT JUDGMENT BE ENTERED AGAINST DAWN K. WASSON re 94 , 103 , 105 , 107 , 115 , 119 , 123 - Signed by CHIEF JUDGE SUSAN OKI MOLL WAY on 2/4/2014. "The court affirms the order reinstating the entry of default and adopts the findings and recommendation that default judgment be entered. The Clerk of Court is directed to terminate all pending motions and to enter default judgment in favor of Property Reserve as set forth in this order. Property Reserve shall prepare the requested decree or ejectment and/or writ of possession. If Wasson is considering seeking post-judgment relief from this orde r, the court suggests that she first pay the sanction in issue." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-m ail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry Modified on 2/4/2014 Dawn K. Wasson shall be served by first class mail at the address of record on February 5, 2014. (emt, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
PROPERTY RESERVE, INC.,
a Utah corporation,

)
)
)
Plaintiff,
)
)
vs.
)
)
DAWN K. WASSON,
)
)
Defendant.
)
_____________________________ )

CIVIL NO. 12-00649 SOM/KSC
ORDER AFFIRMING ORDER
REINSTATING THE ENTRY OF
DEFAULT AND ADOPTING THE
FINDINGS AND RECOMMENDATION
THAT DEFAULT JUDGMENT BE
ENTERED AGAINST DEFENDANT
DAWN K. WASSON

ORDER AFFIRMING ORDER REINSTATING THE ENTRY OF DEFAULT AND
ADOPTING THE FINDINGS AND RECOMMENDATION THAT
DEFAULT JUDGMENT BE ENTERED AGAINST DEFENDANT DAWN K. WASSON
I.

INTRODUCTION.
In the more than one year since Defendant Dawn K.

Wasson was served with the Complaint and summons by Plaintiff
Property Reserve, Inc., she has failed to answer the Complaint.
Default was entered against her.

But default was vacated on the

condition that Wasson pay Property Reserve a sanction of
$7,840.05 to alleviate any prejudice to Property Reserve caused
by Wasson’s conduct.

When Wasson failed to timely pay the

sanction, Property Reserve moved to reinstate default and for
default judgment.

That motion was referred to the magistrate

judge, who granted the motion reinstating the entry of default
and issued findings and a recommendation that default judgment be
entered.

Wasson objected to the order, arguing that she could

not afford to pay the sanction and raising other arguments.
Because Wasson has not demonstrated that she is unable to pay the

sanction, and because none of her other arguments is persuasive,
the court affirms the order to the extent it orders the entry of
default and adopts the findings and recommendation that default
judgment be entered.
II.

FACTUAL BACKGROUND.
On December 4, 2012, Plaintiff Property Reserve, Inc.,

filed the Complaint in this matter.

See ECF No. 1.

The

Complaint alleges that Property Reserve is the fee simple owner
of five parcels of land, Tax Map Key Parcel Numbers (1) 5-5-00520, -21, -22, -24, and -25.

See id. ¶ 6.

The Complaint also alleges that Wasson owns an interest
as a tenant in common with others in Tax Map Key Parcel Number
(1) 5-5-8-43, which is located adjacent to parcel numbers (1) 55-005-24 and -25.

See id. ¶ 7.

According to the Complaint, there is a road that
provides access to parcel numbers (1) 5-5-005-20, -21, -22, and 24, as well as to parcel number (1) 5-5-8-43, running primarily
through parcel number (1) 5-5-005-24.

It alleges that this

access road is a private road owned by Property Reserve.

See id.

¶¶ 8, 10.
Property Reserve allegedly leases portions of its
parcels to various tenants who use the roadway.

See id. ¶ 11.

The Complaint alleges that Wasson “attempted to move
into or otherwise authorized third parties to move into a

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residence owned by Plaintiff’s tenant and located on the Subject
Properties” without Property Reserve’s consent and that she has
refused to vacate the premises.

See id. ¶¶ 12, 14, 15.

The

Complaint further alleges that, without permission, Wasson
blocked the roadway so that Property Reserve’s tenants could not
get to the properties they occupied; Wasson allegedly claimed to
own those properties and the roadway.

See id. ¶¶ 16-20.

Wasson

has allegedly buried her deceased husband on one of the
properties.

See id. ¶ 25.

Property Reserve seeks a declaration that it is the
owner of the five properties and that its ownership interest is
superior to any interest Wasson may have in the properties.
Property Reserve further asks the court to declare that Wasson
has no legal interest in those properties and that she cannot
block the roadway access.

See id., Count I.

Finally, Property

Reserve seeks a writ of ejectment and/or writ of possession, and
damages arising from Wasson’s trespass on the properties.

See

id., Counts II and III.
Wasson was served with the Complaint and Summons in
this case on December 18, 2012.

See Declaration of Adrian L.

Lavarias ¶ 15, ECF No. 14-1, PageID # 147.
On February 14, 2013, the Clerk of Court entered
default against Wasson.

See ECF No. 14-3.

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On March 7, 2013, Property Reserve filed a motion for
default judgment.

See ECF No. 18.

The motion was set for

hearing on April 15, 2013, before Magistrate Judge Kevin S.C.
Chang.

See ECF No. 19.
Wasson did not timely oppose the motion for default

judgment.

See Local Rule 7.4 (“An opposition to a motion set for

hearing shall be served and filed not less than twenty-one (21)
days prior to the date of hearing.”).

Instead, she waited until

the day before the hearing to file a motion to dismiss the
Complaint.

See ECF No. 21, Apr. 14, 2013.

At that time, Wasson

was represented by an attorney, Anthony P. Locricchio.

Id.

On April 15, 2013, Magistrate Judge Chang postponed the
hearing on the motion for default judgment to a date after the
hearing on Wasson’s motion to dismiss, despite the untimeliness
of the motion.

See ECF No. 27.

On April 16, 2013, the court set the hearing on the
motion to dismiss for June 18, 2013, and set the hearing on the
motion for default judgment for July 2, 2013.

See ECF Nos. 28

and 29.
On June 17, 2013, the day before the hearing on the
motion to dismiss, the court questioned whether Wasson could
proceed with her motion to dismiss while the entry of default
remained in effect.

See ECF No. 34.

4

On June 17, 2013, Wasson filed an ex parte motion to
continue the hearing scheduled for the next day on her motion to
dismiss, this time indicating that her counsel had been
hospitalized at the beginning of May 2013.

See ECF No. 35.

On June 18, 2013, the court denied the motion to
continue and the motion to dismiss.

The court denied the motion

to dismiss without prejudice in the event default was vacated.
The court instructed Wasson to file a motion to vacate the entry
of default by June 25, 2013, or to proceed with opposing the
motion for default judgment, informing her that any opposition to
the motion for default judgment would be due on June 28, 2013.
See ECF No. 38.
On June 25, 2013, Wasson filed her opposition to the
motion for default judgment.

See ECF No. 40.

On July 2, 2013, the hearing on the motion for default
judgment was held.

See ECF No. 43.

Counsel for Wasson did not

appear at that hearing and did not explain his absence.

Id.

At

the hearing, despite Wasson’s failure to appear, the court
ordered Wasson to file a motion to set aside the entry of default
no later than July 16, 2013.

Id.

motion for default judgment.

The court then continued the

Id.

On July 16, 2013, Wasson filed a motion to set aside
the entry of default.

See ECF No. 44.

hearing on August 5, 2013.

This motion was set for

See ECF Nos. 46 and 47.

5

On August 6, 2013, Magistrate Judge Chang granted
Wasson’s motion to set aside the entry of default, but
conditioned the setting aside of the entry of default on Wasson’s
payment of sanctions to Property Reserve for the fees and costs
caused by Wasson’s failure to timely answer the Complaint.

The

sanction was intended to alleviate the prejudice to Property
Reserve caused by Wasson’s conduct.

See ECF No. 52.

The court

directed counsel for Property Reserve to submit a declaration of
those fees and costs, and warned Wasson “that future violations
of the applicable rules, orders, and deadlines may result in the
imposition of additional sanctions, including but not limited to
the entry of default judgment.”

Id., PageID # 1475.

After briefing on the matter, Magistrate Judge Chang
ordered Wasson to pay Property Reserve $7,487.25 in attorneys’
fees and $352.80 in tax, for a total of $7,840.05.

Wasson was

ordered to pay this sanction by September 24, 2013, and was
warned that failure to pay the sanction by that date might result
in the imposition of further sanctions, including attorneys’ fees
and the entry of default judgment.

See ECF No. 73.

Wasson did not timely appeal any of the orders relating
to sanctions.

Nor did she timely pay the sanction.

Property

Reserve then moved to reinstate default and for default judgment.
See ECF No. 74.
2013.

That motion was set for hearing on November 18,

See ECF No. 75.

6

On October 10, 2013, counsel for Wasson filed a motion
to withdraw as her attorney, which was set for hearing on October
24, 2013.

See ECF Nos. 77 and 80.

The motion to withdraw was

granted orally, see ECF No. 85, and a

written order to that

effect was filed on November 4, 2013, see ECF No. 91.
Wasson did not timely oppose the motion to reinstate
default and motion for default judgment.

She instead filed a

motion for judgment on the pleadings on November 8, 2013.
ECF No. 94.

See

She then filed a motion seeking the recusal of this

judge on November 12, 2013, which was denied the next day.

See

ECF Nos. 96 and 99.
On November 18, 2013, Magistrate Judge Chang heard the
motion to reinstate default and motion for default judgment and
informed Wasson that she had seven days to pay the $7,840.05
sanction, and that failure to timely pay that sanction would
result in the reinstatement of the entry of default and possibly
a recommendation that default judgment be entered against her.
See ECF No. 100.
following day.

A written order to that effect was filed the
See ECF No. 101.

On November 26, 2013, the court directed counsel for
Property Reserve to submit a declaration indicating whether the
sanction had been paid.

See ECF No. 112.

That day, counsel

submitted a declaration indicating that the sanction had not been
paid.

See ECF No. 114.

7

On December 2, 2013, Magistrate Judge Change filed an
order reinstating the entry of default and recommending that
default judgment be entered against Wasson.

See ECF No. 115.

On December 6, 2012, Wasson filed her objection to the
order of December 2, 2013.

See ECF No. 119

currently before the court.

That objection is

Wasson claims that she is unable to

pay the sanction and argues that she should not be forced to sell
her property, which she says may be worth more than a million
dollars, to pay the sanction.
71.

See ECF No. 119, PageID #s 3270-

Wasson does not detail her financial situation or contend

that she even attempted to get a loan to pay the sanction.

See

id.
III.

STANDARD.
Under Local Rule 74.1 and 28 U.S.C. § 636(b)(1)(A), a

district judge may set aside a magistrate judge’s nondispositive
order if it is “clearly erroneous or contrary to law.”

See Bhan

v. NME Hosp., Inc., 929 F.2d 1404, 1414-15 (9th Cir. 1991).
threshold of the “clearly erroneous” test is high.

The

“A finding is

‘clearly erroneous’ when although there is evidence to support
it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.”
United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948);
Burdick v. Comm’r, 979 F.2d 1369, 1370 (9th Cir. 1992) (“A

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finding of fact is clearly erroneous if we have a definite and
firm conviction that a mistake has been committed.”).
A party’s objection to findings and a recommendation
issued by a magistrate judge as to a dispositive motion is
examined using a different standard.

A district court reviews de

novo those portions of a magistrate judge’s findings and
recommendation to which an objection is made and may accept,
reject, or modify, in whole or in part, the findings and
recommendation made by the magistrate judge.

28 U.S.C.

§ 636(b)(1); Fed. R. Civ. P. 72(b); Local Rule 74.2.

The

district court may accept those portions of the findings and
recommendation that are not objected to if it is satisfied that
there is no clear error on the face of the record.

United States

v. Bright, 2009 WL 5064355, *3 (D. Haw. Dec. 23, 2009); Stow v.
Murashige, 288 F. Supp. 2d 1122, 1127 (D. Haw. 2003).

The

district court may receive further evidence or recommit the
matter to the magistrate judge with instructions.
§ 636(b)(1).

28 U.S.C.

It may also consider the record developed before

the magistrate judge.

Local Rule 74.2.

The district court must

arrive at its own independent conclusions about those portions of
the magistrate judge’s report to which objections are made, but a
de novo hearing is not required.

United States v. Remsing, 874

F.2d 614, 617 (9th Cir. 1989); Bright, 2009 WL 5064355, *3; Local
Rule 74.2.

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IV.

ANALYSIS.
A.

The Court Affirms the Magistrate Judge’s
Determination that the Entry of Default Should be
Reinstated.

Wasson did not appeal Magistrate Judge Chang’s order
that vacated the entry of default on the condition that Wasson
pay a sanction to Plaintiff Property Reserve.

Wasson now asks

this judge to reverse Magistrate Judge Chang’s order reinstating
the entry of default.

Default was reinstated because Wasson

failed to pay the sanction, and Wasson’s arguments challenging
that reinstatement are meritless.

The court affirms the order

reinstating default because Wasson failed to comply with the
condition for vacating the entry of default.
Wasson first argues that this court lacks subject
matter jurisdiction over this case.

The court notes that the

Complaint bases jurisdiction on diversity of citizenship, with
more than $75,000 in controversy.

See ECF No. 1, PageID # 3.

It

alleges that Property Reserve is a nonprofit corporation
organized and existing under Utah law with its principal place of
business in Utah.

Id., PageID # 2.

It then alleges that Wasson

is a resident and domiciliary of Hawaii.

Id.

Wasson submits no

facts supporting her argument that “the parties in this action
are all residents of the State of Hawaii” or that Property
Reserve lacks standing to pursue the claims in this case.
ECF No. 119, PageID # 3269.

See

Property Reserve says it is a Utah

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corporation that owns the properties Wasson claims to own,
properties the parties agree are worth in excess of $75,000.

The

court therefore has diversity jurisdiction under 28 U.S.C.
§ 1332.
Wasson’s next argument does not excuse her failure to
file an answer in this case.

She claims that, under Hawaii law,

she has no obligation to produce any evidence of ownership until
Property Reserve first meets its initial burden of demonstrating
it has title to the property.

This burden of production has no

impact on whether Wasson was required to file an answer to the
Complaint.

See Fed. R. Civ. P. 12(a).
Nor does Wasson’s reference to a letter from Title

Guaranty of Hawaii, Inc., to counsel for Property Reserve
demonstrate that default should not be reinstated.

That letter

indicates that Property Reserves “has a good and complete chain
of title” to the properties in question.
# 3285.

ECF No. 119-11, PageID

Although the letter notes that the properties have

within them “kuleana parcels which were issued to native tenants
of the area as their home and [for] subsistence gardens,” it
further notes that all of these parcels have breaks in the chain
of title and does not indicate that Wasson is one of the “native
tenants” who has any right to the properties.
# 3286.

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Id., PageID

Wasson argues that Property Reserve should be
judicially estopped from arguing that she is not an owner of the
properties because Property Reserve’s attorney purportedly stated
in a 2006 state-court proceeding that Wasson is “at best . . .
co-tenant.”

Even assuming that statement was made, it does not

a

indicate Property Reserve’s agreement that Wasson is, in fact, a
“co-tenant” such that her interest in the properties should be
recognized.
Wasson next argues that the court’s condition that she
pay the sanction is tantamount to involuntary servitude.
argument is unpersuasive.

That

Wasson appears to admit that she owns

a 1/35 share of land valued at over a million dollars.

That she

is unwilling to sell that property or even attempt to obtain a
loan with that property as collateral does not mean that she “is
unable to pay such an absurd amount of money.”
PageID #s 3270-71.

ECF No. 119,

Wasson did not seek reconsideration of or

appeal to this district judge Magistrate Judge Chang’s order
conditioning the vacating of the entry of default on her payment
of sanctions to Property Reserve to ensure that it would not be
prejudiced by her dilatory conduct if the entry of default was
vacated.

Under these circumstances, the court will not review

the amount or propriety of the sanctions.

Wasson cannot now

argue that the sanction and reinstatement of default should be
vacated.

12

The court is similarly unpersuaded by Wasson’s argument
that her former counsel “sabotaged” her defense.
119, PageID # 3271.

See ECF No.

The court has no facts before it suggesting

such “sabotage” and leaves that issue to other proceedings,
possibly before decisionmakers other than a federal judge.
B.

Default Judgment.

Wasson raises the same objections with respect to the
findings and recommendation that default judgment be entered.
Having reviewed those objections de novo, the court rejects
Wasson’s arguments for the reasons set forth above.

The court

adopts the well-reasoned and thoughtful findings and
recommendation that default judgment be entered.
Default judgment shall be entered in favor of Property
Reserve and against Wasson for the relief requested in the
Complaint, except with respect to money damages.

Default

judgment shall be entered as follows:
1.

Wasson and all others claiming by, through, or under
her, are permanently enjoined from occupying and/or
using, the properties identified by Tax Map Key Numbers
(1) 5-5-005-20, -21, -22, -24, and -25, as described in
the Complaint (“Subject Properties”), or blocking or
otherwise interfering with the private road that
provides access to those properties;

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2.

The court declares that Property Reserve is the legal
title holder to the Subject Properties and that Wasson
has no right, title and/or interest in the Subject
Properties.

The court further declares that Wasson

(and anyone acting on her behalf or at her direction)
cannot exclude, prevent, and/or otherwise block access
to the subject properties;
3.

Property Reserve is entitled to a decree of ejectment
and/or writ of possession that a) authorizes and
directs the removal of Wasson and any others claiming,
by, through, or under her, from possession and control
of the Subject Properties, b) places Property Reserve
into sole and exclusive possession of the Subject
Properties, and c) allows Property Reserve to dispose
of any personal property left on the Subject Properties
by Wasson; and

4.

Any duly authorized law enforcement officer may enforce
the terms of this default judgment.

V.

CONCLUSION.
The court affirms the order reinstating the entry of

default and adopts the findings and recommendation that default
judgment be entered.

The Clerk of Court is directed to terminate

all pending motions and to enter default judgment in favor of
Property Reserve as set forth in this order.

14

Property Reserve

shall prepare the requested decree or ejectment and/or writ of
possession.
If Wasson is considering seeking post-judgment relief
from this order, the court suggests that she first pay the
sanction in issue.

IT IS SO ORDERED.
DATED: Honolulu, Hawaii, February 4, 2014.

/s/ Susan Oki Mollway
Susan Oki Mollway
Chief United States District Judge

Property Reserve, Inc. v. Wasson; Civil No. 12-00649 SOM/KSC; ORDER AFFIRMING ORDER
REINSTATING THE ENTRY OF DEFAULT AND ADOPTING THE FINDINGS AND RECOMMENDATION THAT
DEFAULT JUDGMENT BE ENTERED AGAINST DEFENDANT DAWN K. WASSON

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