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Federal National Mortgage Association v. Boyd

United States District Court, C.D. California

January 12, 2015

FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff,
v.
DAVID BOYD, individually; DAVID BOYD as trustee of ANCESTRAL ACQUISITIONS TRUSTS; All Persons and Entities Known or Unknown, Claiming Any Legal or Equitable Right, Title, Estate, Lien or Interest in the Real Property Described in the Complaint Adverse to Plaintiff's Interest or Any Cloud on Plaintiffs Interest; DOES 1-25, inclusive, Defendants.

ORDER DENYING DEFENDANT DAVID BOYD'S MOTION TO SET ASIDE ENTRY OF DEFAULT [45], GRANTING PLAINTIFF FEDERAL NATIONAL MORTGAGE ASSOCIATION'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT BOYD AS TRUSTEE [31], AND GRANTING PLAINTIFF FEDERAL NATIONAL MORTGAGE ASSOCIATION'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT BOYD INDIVIDUALLY [42]

OTIS D. WRIGHT, II, District Judge.

I. INTRODUCTION

There are three motions pending before the Court. The first is Defendant David Boyd's Motion to Set Aside Entry of Default. (ECF No. 45.) The other two motions are both Plaintiff Federal National Mortgage Association's ("Fannie Mae") Motions for Default Judgment Against Defendant Boyd-one against Boyd in his individual capacity (ECF No. 42) and the other against Boyd as trustee of Ancestral Acquisitions Trust (ECF No. 31). In this action, Fannie Mae seeks to clear title to real property that it now owns as a result of a non-judicial foreclosure sale. For the reasons discussed below, the Court DENIES Boyd's Motion to Set Aside Default, and GRANTS both of Fannie Mae's Motions for Default Judgment.

II. FACTUAL BACKGROUND

Fannie Mae filed the Complaint on May 2, 2014, bringing claims for (1) cancellation of instruments, (2) quiet title, (3) slander of title, and (4) injunctive relief against Boyd individually and Boyd as trustee of Ancestral Acquisitions Trust. (ECF No. 1.) Fannie Mae is seeking to clear title to real property located at 5510 Wilton Place, Los Angeles, California 90062 ("the Wilton Property"). (Compl. ¶ 8.) Fannie Mae alleges full ownership of the Wilton Property as the result of a non-judicial foreclosure sale conducted on April 27, 2010, and a Trustees Deed Upon Sale, which was recorded on April 30, 2010. (Id. 9.) According to Fannie Mae, Boyd and his agents clouded title to the Wilton Property by recording several fraudulent documents in the Los Angeles County Recorder's Office.

Fannie Mae alleges that after it foreclosed on the Wilton Property, Juanita Everline the borrower subject to the foreclosure-recorded a Grant Deed, reportedly transferring title from Everline to Ancestral Acquisitions Trust. (Id. ¶10.) The Grant Deed was dated October 6, 2010, and recorded November 8, 2010. (Id. ) Boyd, as trustee of Ancestral Acquisitions Trust, then allegedly executed a Grant Deed from the trust to himself. (Id. ¶ 11.) This second Grant Deed was dated June 15, 2012, and recorded on June 18, 2012. (Id. )

In 2012, Boyd allegedly retained David Alan Boucher to further assist in clouding the title to the Wilton Property. (Id. ¶ 12.) Together Boyd and Boucher allegedly recorded a transfer of a Grant Deed from "Federal Home Loan Mortgage Corporation" to Ancestral Acquisitions Trust dated February 22, 2012. (Id. ) This Grant Deed was recorded on August 1, 2012, and signed by Boucher as "authorized representative" of "Federal Home Mortgage Corporation." (Id. ) Fannie Mae claims that Boucher has a criminal past involving fraud and unauthorized use of the names of lending institutions. ( See ECF No. 12 at 3.) On November 13, 2012, Boyd then executed another Grant Deed from Boyd to Ancestral Acquisitions Trust, which was recorded on November 27, 2012. (Id. 13.)

Finally, Boyd-in his capacity as trustee of Ancestral Acquisitions Trust- allegedly executed a Grant of Lien from Ancestral Acquisitions Trust to himself dated November 13, 2012. (Id. ¶ 14.) This Grant of Lien was recorded on December 3, 2012, and purportedly encumbered the Wilton Property in favor of Boyd in the amount of $61, 275.00. (Id. )

Fannie Mae took numerous steps to clear the Wilton Property title before entering federal court. Fannie Mae settled an unlawful detainer action against Everline in 2012 (ECF No. 32, Ex. J), and received an unlawful detainer judgment against Boyd in 2013 (ECF No. 32, Ex. P).

III. PROCEDURAL HISTORY

Fannie Mae sued Boyd as an individual and as the trustee of Ancestral Acquisitions Trust. Boyd's multi-plaintiff role in this action is why the Court must adjudicate two separate Motions for Default Judgment, and is also why the procedural history is clouded.

Boyd's first filing in this case was a meritless Motion to Dismiss (ECF No. 10) which the Court promptly denied (ECF No. 15). In denying the Motion, the Court advised Boyd to visit the Federal Pro Se Clinic. (Id. ) Boyd, acting in his individual and trustee capacities, then filed a pro se Answer and Counterclaim on July 30, 2014. (ECF No. 17.) That same day, the Court issued a Self-Representation Order, detailing the obligations of a pro se litigant and advising Boyd to visit the Federal Pro Se Clinic. (ECF No. 16.) Relying on Local Rule 83-2.2.2, which states that "[n]o organization or entity of any other kind (including... trusts) may appear in any action or proceeding unless representing by an attorney permitted to practice before this Court, " Fannie Mae filed a Request for Entry of Default against Boyd as trustee. (ECF No. 18.) The Court then issued an Order to Show Cause ordering Boyd to explain why he failed to comply with Local Rules by not retaining counsel to represent the Ancestral Acquisitions Trust. (ECF No. 20.) Boyd ignored the Court's Order, and on September 8, 2014, the Court Granted Fannie Mae's Request for Entry of Default Against Boyd as trustee. (ECF No. 25.) In granting the Request, the Court struck the Answer and Counterclaim as to Boyd as trustee, and left the Answer and Counterclaim intact as to Boyd in his individual capacity. (Id. ) For the third time, the Court advised Boyd to visit the Federal Pro Se Clinic. (Id. )

On September 22, 2014, Fannie Mae filed a Motion for Default Judgment Against Boyd as trustee. (ECF No. 31.) Boyd failed to respond, and on October 21, 2014, Fannie Mae filed a Reply to Non-Opposition to Motion for Entry of Default Judgment. (ECF No. 37.) This Motion is currently pending before the Court.

The action against Boyd as an individual took a slightly different trajectory. On August 18, 2014, Fannie Mae filed a Motion to Dismiss the Answer and Counterclaim as to Boyd as an individual-the week prior, Fannie Mae requested an entry of default against Boyd as trustee. (ECF No. 21.) Boyd, as an individual, filed a timely Opposition (ECF No. 27), and Fannie Mae filed a Reply (ECF No. 30). On October 8, 2014, the Court Granted Fannie Mae's Motion and dismissed both the Answer and Counterclaim with leave to amend. (ECF No. 34.) The Court concluded that the unintelligible Answer and Counterclaim failed to comply with Federal Rule of Civil Procedure 8, but the Court allowed Boyd twenty-one days to file an amended answer and counterclaim. (Id. ) The Court, once again, advised Boyd to visit the Federal Pro Se Clinic. (Id. )

Boyd failed to timely file any amended pleadings, and on November 4, 2014, Fannie Mae filed a Request for Entry of Default Judgment against Boyd individually. (ECF No. 39). The Clerk entered default the next day. (ECF No. 35.) On November 6, 2014, the Court issued an Order to Show Cause Re Dismissal for Lack of Prosecution against Fannie Mae unless a Motion for Entry of Default Judgment was filed on or before November 13, 2014. (ECF No. 41.) On November 11, Fannie Mae filed a Motion for Default Judgment against Boyd as an individual. (ECF No. 42.) On November 12, Boyd attempted to file a First Amended Answer and Counterclaim, but the Court rejected the filings because they were eleven days late. (ECF No. 43.) Fannie Mae's Motion for Default Judgment Against Boyd Individually is the second pending motion before the Court. On December 4, 2014, Boyd filed a pro se Motion to Set Aside Entry of Default. (ECF No. 45.) This Motion to Set Aside is only applicable to Boyd as an individual-Boyd cannot represent the trust pro se. The Motion to Set Aside is the third pending motion before the Court.

IV. MOTION TO SET ASIDE DEFAULT

For ease of discussion, the Court will first address Boyd's Motion to Set Aside Entry of Default. (ECF No. 45.) Boyd filed the Motion on December 4, 2013, and Fannie Mae filed a timely Opposition on December 10, 2014. (ECF No. 46.) For the reasons discussed below, the Motion is DENIED.

A. Legal Standard

Federal Rule of Civil Procedure 55(c) authorizes a court to "set aside the entry of default" for "good cause shown." Fed.R.Civ.P. 55(c). District courts look at three factors when deciding whether to set aside a default: "(1) whether the plaintiff will be prejudiced, (2) whether the defendant has a meritorious defense, and (3) whether culpable conduct of the defendant led to the default." Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d 1108, 1111 (9th Cir. 2001) (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)).[1] "Where timely relief is sought from a default... doubt, if any, should be resolved in favor of the motion to set aside the ...


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