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Jannifer Williams v. U.S. Bank National Assoc.

February 13, 2013


The opinion of the court was delivered by: Justin L. Quackenbush Senior United States District Judge


I. Introduction and Background

Plaintiff's First Amended Complaint (herein "FAC") asserts three federal claims and twelve claims based on state law. The court has already determined that two of the federal claims, the Truth In Lending Act and Fair Debt Collection Practices Act claims, are barred by the applicable statute of limitations. See Order of January 16, 2013 (ECF No. 107). The sole remaining federal claim is Count Five alleging violation of the Servicemembers Civil Relief Act, 50 U.S.C. App. § 501 et seq. (herein "SCRA"). The SCRA claim is asserted against four of the nine Defendants: U.S. Bank, Law Offices of Les Zieve, Les Zieve, and Michael Gonzales. These four Defendants, in two separately filed Motions, have moved to dismiss the SCRA claim. The court heard argument on all five pending Motions to Dismiss on December 3, 2012, and received supplemental briefing from Plaintiff and U.S. Bank on December 20, 2012.

II. Discussion

The court begins its analysis with the SCRA claim, as resolution of that sole remaining federal claim may be dispositive. The following facts are as set forth in Plaintiff's pleadings. Plaintiff joined the United States Marine Corps in July 1981. On January 22, 2007, Plaintiff, while serving on active duty in the Marine Corps as an enlisted career person, obtained two loans from GE Money Bank totaling $329,999.00 for the purchase of real property. (FAC ¶ 43-44; Complaint ¶ 16-17). By the summer of 2009, Plaintiff was in default on the loans, and by August 2009 was $11,089.50 in arrears. (Complaint ¶ 20). Defendant U.S. Bank began non-judicial foreclosure proceedings, and a non-judicial foreclosure sale was held on January 5, 2010. (FAC ¶ 77). Plaintiff was serving overseas on Okinawa at the time and did not receive the Notice of Default or Notice of Trustee's Sale (FAC ¶ 40).

On February 22, 2010, Defendants Law Offices, Les Zieve, and Michael Gonzales filed a verified complaint in state court for unlawful detainer. (FAC ¶ 105). Plaintiff received notice of the unlawful detainer action in March 2010. Plaintiff alleges that Law Offices of Les Zieve, Les Zieve, and Michael Gonzales "executed or caused to be executed sworn declarations, signed under penalty of perjury, declaring that Plaintiff was not on active military duty at the time they filed a default judgment." (FAC ¶ 13). U.S. Bank obtained a Judgment for Possession in the state court action on March 29, 2010.

Plaintiff was discharged and retired from the military on July 31, 2011. (ECF No. 104, p. 3). In February 2012, the Judgment of Unlawful Detainer was set aside in state court. (Complaint ¶ 53).

A. Servicemembers Civil Relief Act

Plaintiff's Fifth cause of action alleges violation of the SCRA. (ECF No. 49, ¶¶ 173 - 185). Plaintiff alleges that Law Offices of Les Zieve, Les Zieve, and/or Michael Gonzales executed sworn declarations in state court asserting that Plaintiff was not on active military duty in order to obtain the unlawful detainer default judgment, even though they knew such declaration was false. (ECF No. 49, ¶ 177).

Plaintiff further alleges that these Defendants failed to serve her with state court documents related to the unlawful detainer proceeding. (¶ 178). Plaintiff alleges that these Defendants violated the Serviceman's statute by executing the false declarations and failing to inform the state court that Plaintiff was on active military duty. Plaintiff alleges a violation of Section 521 of the SCRA. Section 521, enacted to provide servicemembers protection from default judgments being entered against them while they are serving abroad, requires that the opposing litigant file an affidavit stating whether or not the defendant is in military service. § 521(b)(1). Section 521(c) further provides that one who makes such an affidavit, knowing it to be false, is subject to fine or imprisonment pursuant to Title 18, U.S.C. Plaintiff seeks civil monetary relief against these Defendants, while the statute provides relief in the form of fines and/or imprisonment. Therefore, Plaintiff relies on Section 597a as creating a private right of action to allow her to pursue a civil claim for violation of Section 521. Section 597a provides that "any person aggrieved by a violation of this Act may in a civil action - (1) obtain any appropriate equitable or declaratory relief with respect to the violation; and (2) recover all other appropriate relief, including monetary damages."

Defendants argue that Plaintiff's claim for relief under the SCRA is barred by California's absolute litigation privilege. (ECF No. 73, p. 5).

B. Litigation Privilege

California recognizes a broad, or sometimes called "absolute" privilege for communications made during the course of judicial proceedings. The privilege is codified in California Civil Code section 47 and derives from common law principles. Rusheen v. Cohen, 37 Cal.4th 1048, 1057 (Cal. 2006). The California Supreme Court has held that while originally applied to defamation, the privilege now applies to "all torts except malicious prosecution." Id. The privilege applies "to any communication (1) made in a judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of litigation; and (4) that have some connection or logical relation to the action." Id.

In Rusheen, the California Supreme Court held that "the communicative act of filing an allegedly false declaration of service of process fell within the litigation privilege." Id. at 1058. In Rusheen, the false declaration of service was used to obtain a default judgment and then post-judgment enforcement actions were taken, including applying for a writ of execution and levying on property. The California Supreme Court found that the privilege extended to non-communicative actions that were necessarily related to the false declaration: "because the claim for abuse of process was based on the communicative act of filing allegedly false declarations of service to obtain a default judgment, the postjudgment enforcement efforts, including the application for writ of execution and act of levying on the property, were protected by the privilege." Id. at 1052.

The allegations in this case are quite similar - - that Defendants executed a false state court declaration in order to obtain a default judgment in the unlawful detainer action. Defendants' conduct falls squarely within the litigation privilege. The declarations were (1) filed in a judicial proceeding, (2) by litigants or their attorneys, (3) to achieve the objects of litigation, and (4) were logically related to the action. Plaintiff alleges that the declarations were submitted "to obtain a default judgment against ...

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