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Asturias v. Nationstar Mortgage LLC

United States District Court, N.D. California

July 8, 2016

ELENA ASTURIAS, et al., Plaintiffs,
v.
NATIONSTAR MORTGAGE LLC, et al., Defendants.

          ORDER DENYING PLAINTIFFS' MOTION FOR RELIEF FROM THE JUDGMENT AND A NEW TRIAL

          RICHARD SEEBORG UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Plaintiffs Elena Asturias and Carlota Del Portillo have a mortgage secured by real property at 176 Randall Street in San Francisco. Defendants Nationstar Mortgage LLC, Veriprise Processing Solutions LLC, and U.S. Bank National Association (collectively "defendants") have obtained judgment in their favor after plaintiffs failed to state claims for relief despite having three opportunities to do so. Plaintiffs now seek relief from judgment and a fourth chance to amend their complaint based on an alleged intervening change in the law brought about by Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919, 925 (2016).

         Yet, the "change" plaintiffs identified is insufficient to warrant relief from the judgment because it did not provide a new avenue of relief. At all times leading to their final judgment, plaintiffs could have advanced this claim and relied upon the theory of standing articulated in Glaski v. Bank of Am., Nat'l Ass'n, 218 Cal.App.4th 1079, 1082 (2013)-the very case the Yvanova court affirmed. Plaintiffs have not articulated sufficient reason to set aside the judgment or to order a new trial, and therefore their motions must be denied.

         II. FACTUAL AND PROCEDURAL BACKGROUND

         In October 2005, plaintiffs sought to acquire the real property 176 Randall St., San Francisco, California. To finance the purchase, Del Portillo and Asturias entered into a mortgage agreement with All California, Inc. in the amount of $1, 000, 000. She was required to begin making monthly payments of $5, 833.33 in December 2005. The promissory Note underlying the transaction listed only Del Portillo as the borrower. The Deed of Trust, which was recorded in October 2005, identified All American Mortgage as the lender, Fidelity National Title as the trustee, Bank of America, N.A. as the Loan Servicer, and MERS as the beneficiary.

         In December 2005, the relevant securitized trust was formed under New York law. The loans pooled for the Trust were, with certain exceptions, used to create Real Estate Mortgage Investment Conduits (each individually referred to as a "REMIC"); its terms were set forth in a Pooling and Servicing Agreement ("Trust Agreement") for the trust, which was governed under New York law. Under the trust agreement and REMIC provisions, all loans intended to be part of the Trust were to be acquired by the closing date on December 31, 2005, or within 90 days thereafter. Plaintiffs claim the transfer of the Note and Deed of Trust did not occur by the closing date, or 90 days thereafter. Instead, the assignment occurred four years later-on April 22, 2010-when MERS replaced Fidelity with Reconstrust as the trustee and assigned all beneficiary interest in the Note and Deed of Trust to U.S. Bank. Plaintiffs believe this document entitled "Substitution of Trustee and Assignment" was the first recordation of an assignment since October 2005.

         In early 2015, plaintiffs defaulted on the loan and failed to cure the default. Therefore, defendants ultimately proceeded to sale in July 2015. That same month, plaintiffs filed their original complaint in San Francisco County Superior Court alleging claims arising under California's Homeowner Bill of Rights. Defendants removed the case to federal court and filed a motion to dismiss the complaint. That motion to dismiss was granted, but plaintiffs received an opportunity to amend the complaint. Subsequently, plaintiffs filed their first amended complaint, which also failed adequately to plead claims for relief. Plaintiffs had one final opportunity to plead their claims sufficiently, but the second amended complaint was also inadequate, and therefore dismissed with prejudice in April 2016.

         About a month later, with the benefit of new counsel, plaintiffs filed ex parte application for relief from the judgment and for an extension of time to file a notice of appeal. Good cause existed to grant plaintiffs' request for extension of time, but plaintiffs had not properly noticed their motion for relief from the judgment or a new trial, and it was accordingly stricken. The very next day, plaintiffs noticed the motion for relief from the judgment and a new trial and refiled the same papers submitted in support of their ex parte application. Despite the fact plaintiffs have already received an extension to file a notice of appeal, they apparently request another extension.

         III. LEGAL STANDARD

         Plaintiffs seek to reopen the judgment under two separate motions: (1) motion for relief from judgment under Federal Rule of Civil Procedure 60(b)(6), and (2) motion for new trial under Rule 59(a)(2). In the alternative, they seek a second extension of time to file an appeal with time starting from a ruling on these motions.

         In the instant case, however, Rule 59(a)(2) is inapplicable because neither jury nor bench trial has taken place. Rule 59(e) allows parties to seek alteration or amendment of a judgment within 28 days after the entry of judgment, whether or not it was entered as a result of trial. Plaintiffs, however, do not seek to alter or to amend the judgment; they wish to vacate the judgment. Accordingly, Rule 59(e) is wholly inapplicable, and plaintiffs' motion for a new trial must be denied for that reason.

         Rule 60(b)(6) provides that "the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for . . . any other reason justifying relief from the operation of the judgment." Relief from the judgment is appropriate only when it is necessary "to prevent manifest injustice." Latshaw v. Trainer Wortham & Co., 452 F.3d 1097, 1103 (9th Cir. 2006). Parties moving for relief from a judgment therefore face a high burden to show both "injury and circumstances, " beyond their control, that prevented them from taking "timely action to prevent or correct an erroneous judgment." Id. (internal quotation marks omitted).

         IV. ...


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