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Glenn W. Bever v. Cal-Western Reconveyance Corp.

February 28, 2012

GLENN W. BEVER,
PLAINTIFF,
v.
CAL-WESTERN RECONVEYANCE CORP., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Sheila K. Oberto United States Magistrate Judge

ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S REQUEST FOR ENTRY OF DEFAULT (Docket No. 27) ORDER PERMITTING DEFENDANT CAL-WESTERN RECONVEYANCE CORP. TO FILE A RESPONSIVE PLEADING

On February 6, 2012, Plaintiff Glenn W. Bever ("Plaintiff") filed a Request for Entry of Default as to Defendant Cal-Western Reconveyance Corp. ("Cal-Western"). For the reasons set forth below, Plaintiff's request is DENIED WITHOUT PREJUDICE. Further, Cal-Western may file a responsive pleading within twenty-one (21) days of the issuance of this order.

I. BACKGROUND

On September 20, 2011, Plaintiff, proceeding pro se, filed a verified complaint against Defendants Cal-Western, CitiMortgage, Inc. ("CitiMortgage") and Mortgage Electronic Registration Systems, Inc. ("MERS" or, collectively, "Defendants") for quiet title, violation of the Fair Debt Collection Practices Act ("FDCPA"), violation of the Real Estate Settlement Procedures Act ("RESPA"), unjust enrichment, and fraud. (Doc. 1.) Plaintiff also filed a Motion for Temporary Restraining Order, which was denied by the Court on September 23, 2011. (Docs. 2, 10.)

Defendants were served with the summons and complaint on September 23, 2012. (Doc. 12.) On October 12, 2011, CitiMortgage and MERS filed a Motion to Dismiss. (Doc. 13.) On October 14, 2011, Cal-Western filed a Declaration of Non-Monetary Status pursuant to California Civil Code Section 2324l. (Doc. 14.)

On October 19, 2011, Plaintiff filed a Renewed Motion for Temporary Restraining Order, which was granted by the Court on October 26, 2011. (Docs. 16, 19.) The Court set a hearing date of November 14, 2011, to show cause as to why a Preliminary Injunction should not be granted. (Doc. 19, 5:5-7.) On November 9, 2011, the Court noted that no parties had filed oppositions to the Motion to Dismiss or the Preliminary Injunction and thus vacated the hearing and took the matters under submission. (Doc. 22.) On December 9, 2011, Plaintiff filed a Motion to File Out of Time Response to Defendants' Motion to Dismiss. (Doc. 23.) These matters are currently pending before Chief District Judge Anthony W. Ishii. (Doc. 22.)

On February 6, 2012, Plaintiff filed the instant Request for Clerk's Entry of Default against Cal-Western. (Doc. 27.) On February 8, 2012, Cal-Western filed an Objection to Plaintiff's Request for Clerk's Entry of Default, asserting that it had filed a Declaration of Non-Monetary Status pursuant to California Civil Code Section 2324l (Doc. 14) and thus was no longer required to participate further in the action.

II. DISCUSSION

Plaintiff requests that default be entered against Cal-Western pursuant to Federal Rule of Civil Procedure 55(a), contending that Cal-Western has been served in this action but failed to timely respond. Cal-Western objects to Plaintiff's request, contending that it timely responded to Plaintiff's complaint by filing a Declaration of Non-Monetary Status and, since Plaintiff failed to timely object, Cal-Western is no longer required to participate further in the action. See Cal. Civ. Code § 2924l.

California Civil Code Section 2924l provides that if "a trustee under a deed of trust is named in an action or proceeding in which that deed of trust is the subject, and in the event that the trustee maintains a reasonable belief that it has been named in the action or proceeding solely in its capacity as trustee," then the trustee "may file a declaration of non-monetary status." Cal. Civ. Code § 2924l(a). If timely objections are not raised, then "the trustee shall not be required to participate any further in the action or proceeding, shall not be subject to any monetary awards as and for damages, attorneys' fees or costs, shall be required to respond to any discovery requests as a nonparty, and shall be bound by any court order relating to the subject deed of trust that is the subject of the action or proceeding." Id. § 2624l(d).

Here, Cal-Western filed a Declaration of Non-Monetary Status on October 14, 2011. (Doc. 14.) Plaintiff had 15 days from the service of the declaration in which to object to the non-monetary judgment status of the trustee. Cal. Civ. Code § 2624l(c). Plaintiff failed to file any objections.

However, there is a question whether Section 2924l can be applied in cases that are originally filed in federal court. As the court noted in Couture v. Wells Fargo Bank, N.A., No. 11--CV--1096--IEG (CAB), 2011 WL 3489955 at *3, n. 2 (S.D. Cal. Aug. 9, 2011):

District courts in California are divided over whether a trustee may seek status as a nominal party by filing a § 2924l declaration in federal court. Compare, e.g., Tran v. Washington Mut. Bank, No. Civ. S--09--3277, 2010 WL 520878, at *1 (E.D.Cal. Feb.11, 2010) ("California Civil Code § 2924l is a state procedural rule, and not state substantive law. Accordingly, non-monetary status may not be granted in federal court.") (citation omitted), with, e.g., Pinales v. Quality Loan Serv. Corp., No. 09cv1884 L(AJB), 2010 WL 3749427, at *1 n. 1 (S.D.Cal. Sept. 22, 2010) (treating a defendant as a nominal party after it filed a § 2924l declaration in federal court).

Id. at *3, n. 2. The court in Couture did not have to consider whether a declaration of non-monetary status was proper for cases filed in federal court, since the case at issue had initially been filed in state court and removed to federal court. Id. at *1. The Couture court noted that it was "aware of no such disagreement over the treatment of trustees that file ยง 2924l ...


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