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Mfc Twin Builders, LLC v. Henry Doloso Fajardo; Jk

May 9, 2012

MFC TWIN BUILDERS, LLC,
PLAINTIFF,
v.
HENRY DOLOSO FAJARDO; JK DEFENDANTS.



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

FINDINGS AND RECOMMENDATIONS THAT: PLAINTIFF'S MOTION FOR REMAND BE GRANTED (Doc. 6) DENTAL CLINIC; and DOES 1-10, inclusive, PLAINTIFF'S REQUEST FOR ENTRY OF DEFENDANTS' DEFAULTS BE GRANTED (Doc. 9)

I. INTRODUCTION

This matter was removed from the Fresno County Superior Court to the U.S. District Court for the Eastern District of California on February 14, 2012, by Defendants Henry Doloso Fajardo ("Fajardo") and JK Dental Clinic (collectively, "Defendants"). On March 14, 2012, Plaintiff MFC Twin Builders, LLC ("Plaintiff") filed a motion to remand the case to state court. (Doc. 6.) On March 14, 2012, Plaintiff also filed a request that the Court enter the defaults of Defendants Fajardo and JK Dental Clinic. (Doc. 9.) On April 10, 2012, Plaintiff filed a motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. (Doc. 12.)

For the reasons set forth below, the Court RECOMMENDSthat the defaults of Defendant Fajardo and JK Dental Clinic be ENTERED and that Plaintiff's motion for remand be GRANTED.

II. BACKGROUND

On February 6, 2012, Plaintiff filed a verified complaint asserting a claim for unlawful detainer against Defendants Fajardo and JK Dental Clinic. (Doc. 1, p. 10-16.) The complaint alleges that, on December 12, 2008, Fajardo executed a "Construction Collateral Deed of Trust" conveying the property located at 2100 E. Clinton Avenue, Fresno, California (the "Property") to secure payment of a promissory note made by JP Unlimited LLC ("JP") in the amount of $1,300,000.00, payable to Metro Funding Corporation ("Metro"). (Doc. 1, p. 11, ¶ 7.) The Construction Collateral Deed of Trust ("deed of trust") indicates that JP is a California limited liability company that entered into a loan agreement with Metro in the amount of $1,300,000.00. (Doc. 1, p. 22; see also Doc. 18-1, p. 14.) Pursuant to the Construction Collateral Deed of Trust, Fajardo agreed to guaranty that loan by pledging the Property. (Doc. 1, p. 21-54; see also Doc. 18-1, p. 14.) An assignment of the deed of trust was made by Metro to MFC Funding, LLC, which was recorded on December 15, 2008. (Doc. 1, p. 11, ¶ 8.)

JP defaulted in payment of the note and, on January 26, 2010, a notice of default and an election to sell under the deed of trust was recorded. (Doc. 1, p. 12, ¶ 9.) On February 14, 2011, Metro assigned its interests in the deed of trust to MFC Funding, LLC. (Doc. 1, p. 12, ¶ 10.) On February 15, 2011, MFC Funding, LLC, assigned its interests under the deed of trust to MFC Real Estate, LLC. (Doc. 1, p. 12, ¶ 11.) On March 23, 2011, notice was given that the Property was to be sold at public auction on April 20, 2011. (Doc. 1, p. 12, ¶ 12.)

On April 19, 2011, Fajardo filed a Chapter 11 petition in the United States Bankruptcy Court for the Eastern District of California (the "Bankruptcy Court"). (Doc. 1, p. 12-13, ¶ 13.) The April 20, 2011, trustee's sale was postponed until June 1, 2011. (Doc. 1, p. 13, ¶ 14.) On May 25, 2011, the Bankruptcy Court issued an order dismissing Fajardo's bankruptcy petition. (Doc. 1, p. 13, ¶ 15.) On May 31, 2011, Fajardo filed another Chapter 11 bankruptcy petition. (Doc. 1, p. 13, ¶ 16.) The trustee's sale scheduled for June 1, 2011, was postponed twice and renoticed for August 24, 2011. (Doc. 1, p. 13, ¶¶ 17-18.)

On July 28, 2011, the Bankruptcy Court entered an order granting MFC Real Estate, LLC relief from the automatic stay relating to Fajardo's bankruptcy petition. (Doc. 1, p. 13, ¶ 19.) In granting relief from the automatic stay, the Bankruptcy Court found that the filing of the bankruptcy petition was part of a scheme to delay, hinder, and defraud creditors that involved multiple bankruptcy filings affecting the Property. (Doc. 1, p. 13, ¶ 19; see also, Doc. 18-4, p. 5.)

On August 15, 2011, MFC Real Estate, LLC assigned its interest under the deed of trust to Plaintiff. (Doc. 1, p. 84, Exhibit I; see also Doc. 18-4, p. 9) On August 24, 2011, the Property was sold to Plaintiff at the trustee's sale. (Doc. 1, p. 13, ¶ 20.) Plaintiff alleged that, at the time of the sale, Defendants, who were not tenants, but instead the prior owners of the Property, were in possession of the Property and have remained in possession after that sale. (Doc. 1, p. 14, ¶ 22.)

On October 28, 2011, Plaintiff served on Defendants a written Notice to Quit the premises. (Doc. 1, p. 14, ¶ 24.) Defendants failed to comply with the Notice to Quit, which provided Defendants until November 1, 2011, to vacate the Property. (Doc. 1, p. 14, ¶ 24.) On that same day, Fajardo filed a new Chapter 13 bankruptcy petition in the Bankruptcy Court. (Doc. 1, p. 14, ¶ 25.) On December 16, 2011, the Bankruptcy Court issued an order confirming that the automatic stay was not in effect as to Fajardo's third Chapter 13 bankruptcy petition. (Doc. 1, p. 14, ¶ 26.)

On February 5, 2012, Plaintiff filed an unlawful detainer action in Fresno County Superior Court against Defendants seeking the reasonable rental value of the Property since August 26, 2011. The caption of the complaint indicates that the amount prayed for does not exceed $25,000, and the matter is designated as a limited-jurisdiction civil case because the amount in controversy does not exceed $25,000. (Doc. 1, p. 10.)

No response to Plaintiff's complaint was filed in state court. (See Doc. 9-1, ¶ 3.) On February 14, 2012, a Notice of Removal was filed on behalf of Defendants Farjardo and JK Dental Clinic. (Doc. 1.) Following removal, no response to the complaint was filed in federal court by either Defendant. On March 14, 2012, Plaintiff filed a motion to remand and also requested that defaults of both Defendants be entered. (Docs. 6, 9.) On April 10, 2012, Plaintiff filed a motion for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure. (Doc. 12.) On April 18, 2012, Defendant Fajardo filed an opposition to the motion to remand. (Doc. 14.) No opposition to Plaintiff's Rule 11 motion was filed.

III. DISCUSSION

A. Plaintiff's Requests for Judicial Notice Should be Granted

Plaintiff filed two separate requests for judicial notice pursuant to Federal Rule of Evidence 201.A judicially noticed fact must be one not subject to reasonable dispute in that it is either

(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Fed. R. Evid. 201(b)(1)-(2).

Judicially noticed facts often consist of matters of public record, such as prior court proceedings. See, e.g., Emrich v. Touche Ross & Co., 846 F. 2d 1190, 1198 (9th Cir. 1988) (administrative materials); Barron v. Reich, 13 F. 3d 1370, 1377 (9th Cir. 1994) (city ordinances); Toney v. Burris, 829 F. 2d 622, 626-27 (7th Cir. 1987) (geological surveys and existing land use maps); and Rothman v. ...


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