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Vodonick v. Federal National Mortgage Association, Inc.

United States District Court, E.D. California

March 30, 2017

JOHN VODONICK, Plaintiff,
v.
FEDERAL NATIONAL MORTGAGE ASSOCIATION, INC., a federally chartered corporation, all persons claiming any right, title or interest in certain real property; and DOES 1 through 50, inclusive, Defendants.

          ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE

         Federal National Mortgage Association (“Fannie Mae” or “Defendant”) moves for summary adjudication on a portion of John Vodonick's (“Plaintiff”) first claim for declaratory relief.[1]

         For the reasons set forth below, the Court denies the motion.[2]

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff owns and resides at 15240 Willow Ridge Court in Nevada City, California. Plaintiff's Response to Defendant's Statements of Undisputed Material Facts (“SUF”) at ¶ 1. In August 2014, Fannie Mae was assigned the promissory note to the neighboring property, which was declared to be in default. SUF at ¶¶ 2, 3. In addition to being neighbors, Plaintiff alleges- though Defendant disputes-that he has an easement over a portion of the property. First Amended Complaint (“FAC”) at ¶¶ 10-14; Defendant's Response to Plaintiff's Statement of Disputed Material Facts (“SDF”) at ¶ 8. Fannie Mae posted a copy of the notice of the foreclosure sale-to take place on November 26, 2014, at 12:30 p.m.-at the main entrance of the Nevada County, California, Superior Courthouse. SUF at ¶ 4; SDF at ¶ 1; Request for Judicial Notice (“RFJN”), ECF No. 27, Exh. 6.

         Plaintiff was out of town on November 26, 2014, and dispatched an agent, Michael Nudelman, to appear at the auction. SUF at ¶ 6. Although the parties dispute whether or not Mr. Nudelman could have made a valid bid on that day, the parties appear to agree that he showed up for the scheduled sale. SUF at ¶¶ 6-8; SDS at ¶ 4. Plaintiff instructed Mr. Nudelman to bid up to the amount of Fannie Mae's lien, but to not get into a bidding war with another bidder. SUF at ¶ 9. The parties dispute whether or not someone appeared to cry the sale or continue the sale to another date. SDS at ¶ 4. The actual sale took place on a subsequent day. SDS at ¶ 7. According to the “Trustees Deed Upon Sale, ” the property was sold “at public auction on 12/01/2014 at the place named in the Notice of Sale[.]” RFJN, Exh. 8 at 2.

         Plaintiff filed this action in March, 2015, and the Court granted Defendant's Motion for Judgment on the Pleadings with respect to claims three, four, and five, and part of the first claim in March, 2016. ECF Nos. 1, 4, & 18. The Court denied Defendant's motion with respect to the part of the first claim seeking a declaration that the deed to Defendant is null and void. ECF No. 18. For the surviving claims, Plaintiff first seeks declarations that the purported deed is null, void, and of no effect and that Plaintiff is vested in title and interest to the easement. Second, Plaintiff seeks to quiet title to the easement by implication. See FAC.

         II. OPINION

         A. Jurisdiction

         The FAC states that the basis for this Court's jurisdiction is federal question jurisdiction because Defendant's “charter provides that it is empowered to sue and be sued, and to complain and to defend, in any court of competent jurisdiction, State or Federal.” FAC at ¶ 1. Earlier this year, the U.S. Supreme Court overruled the Ninth Circuit on this issue, holding that the sue-and-be-sued clause in Defendant Fannie Mae's charter only permits suit in a court already endowed with subject-matter jurisdiction and is not an independent source of jurisdiction. Lightfoot v. Cendant Mortg. Corp., 137 S.Ct. 553 (2017). The Court notified the parties of the change and permitted the parties to brief this issue. See Thunder Prop., Inc. v. Treadway, No. 3:15-cv-00141-MMD-VPC, 2017 WL 899961 (D. Nev. Mar. 7, 2017) (relying on Lightfoot in remanding a case to state court where removal was based on the “sue-and-be-sued” clause in Fannie Mae's charter). The parties submitted a joint response conceding that the Court no longer has federal question jurisdiction over the case. ECF No. 34. They argued, however, that the Court should retain the case under diversity jurisdiction because the parties are diverse and the property in dispute puts the amount in controversy over the $75, 000 minimum.

         The Court is satisfied that diversity jurisdiction applies in this case. First, Plaintiff is a California citizen, FAC ¶ 3, and Defendant is a citizen of the District of Columbia, 12 U.S.C. § 1717(a)(2)(B). Second, Plaintiff's first cause of action seeks a declaration that the deed to Defendant is null and void. Even though the FAC does not allege damages, the parties provide persuasive authority and evidence that the requirement is met in this case. See RFJN, ECF No. 35, Exh. 1 (Trustees Deed Upon Sale for the price of $393, 824.21); Cohn v. Petsmart, Inc., 281 F.3d 837, 840 (9th Cir. 2002) (“In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.”) (citation omitted); Hendricks v. Wells Fargo Bank, N.A., No. CV-15-01299-MWF (JEMx), 2015 WL 1644028, at *5-6 (C.D. Cal. Apr. 14, 2015) (finding that, in an action seeking to enjoin the foreclosure sale, the value of the property was relevant to determining the amount in controversy). The Court thus retains the case.

         B. Judicial Notice and Evidentiary Objections

         Defendant seeks judicial notice of several documents, most of which are not pertinent to the Court's ruling on this motion. See RFJN, ECF No. 27. Among those documents, Defendant requests notice of Defendant's Exhibit 6 ([“Notice of Trustee's Sale”] dated October 29, 2014, recorded on October 31, 2014, in the official records of Nevada County as document number 20140021214) and Exhibit 8 ([“Trustee's Deed Upon Sale”] dated December 2, 2014, recorded in the official records of Nevada County on December 8, 2014, as document number 20140023981). Defendant again requests notice of the same “Trustee's Deed Upon Sale” in support of its jurisdictional argument. RFJN, ECF No. 35, Exh. 1. Plaintiff does not raise any objections. These documents are in the public record and not subject to reasonable dispute. See Grant v. Aurora Loan Services, Inc., 736 F.Supp.2d 1257, 1263- 64 (C.D. Cal. 2010). Thus, the Court grants Defendant's requests as to these three documents.

         As for evidentiary objections, Defendant objects to portions of John Vodonick's Declaration, ECF No. 30-1, and portions of Michael Nudelman's Declaration, ECF No. 30-2, due to contradictions between the declarations and prior testimony or statements. Reply at 7-9. Because the Court's ...


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