Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_11-cv-01699/USCOURTS-casd-3_11-cv-01699-0/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 28:1331 Fed. Question

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

ALI SHAPOURI and LAURA

AMANDA SHAPOURI,

Plaintiffs,

CASE NO: 11-CV-1699-W-(MDD)

ORDER DENYING PLAINTIFFS’

MOTION TO SET ASIDE

JUDGMENT [DOC. 21]

 v.

NDEX WEST, LLC, a Delaware Limited

Liability Corporation, et al., 

Defendants.

Pending before the Courtis PlaintiffsAli Shapouri and Laura Amanda Shapouri’s

motion to set aside judgment under Federal Rule of Civil Procedure 60(b). Defendants

NDEX West, LLC (“NDEX”), Wells Fargo Bank,NationalAssociation(“Wells Fargo”),

and Mortgage Electronic Registration Systems Inc. (“MERS”) oppose.

The Court decides the matter on the papers submitted and without oral

argument. See Civ. L.R. 7.1(d)(1). For the reasons discussed below, the Court

DENIES Plaintiffs’ motion [Doc. 21].

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I. BACKGROUND

On March 21, 2005, Plaintiffs obtained a mortgage loan from the now-defunct

Secured Bankers Mortgage Company (“SBMC”) for real property located at 7759 Via

Zafiro, Rancho Santa Fe, California (the “Property”). (FAC [Doc.9] ¶¶ 1, 24.) The

loan was secured by a Deed of Trust in favor of SBMC, which named MERS as

beneficiary. (Id.¶ 32; NDEX’s Req. Judicial Notice (“RJN”) [Doc. 13] Ex. 2.) Later,

Wells Fargo took over for SBMC as the servicer of the loan. (FAC ¶ 45.)

On August 3, 2010, NDEX filed a Notice of Default and Election to Sell under

Deed of Trust with the San Diego County Recorder’s Office. (See RJN Ex. 4.) NDEX

then filed a Notice of Trustee’s Sale on November 4, 2010, declaring that a sale would

take place on November 29, 2010. (Id. Ex. 6.) The sale did not go forward.

On June 30, 2011, Plaintiffs filed this lawsuit in the San Diego Superior Court,

alleging 17 state and federal causes of action. On August 1, 2011, Wells Fargo and

MERS removed the action to this Court under diversity and federal question

jurisdiction. Thereafter, Defendants Wells Fargo and MERS filed a motion to dismiss

the complaint based on, among other grounds, the expiration of the relevant statute of

limitations. On December 16, 2011, this Court granted the motion, but also granted

leave to amend claims that were found to be time barred. (See 12/16/11 Order [Doc.

8], 6:22–7:9, 8:7–9, 10:24–11:6.) 

On December 28, 2011, Plaintiffs filed the FAC asserting five causes of action. 

On January 11, 2012, Wells Fargo and MERS (hereinafter collectively, “Wells Fargo”)

filed another motion to dismiss, and on January 18, 2012, NDEX filed a motion to

dismiss the FAC. Plaintiffs filed an opposition to NDEX’s motion, but not to Wells

Fargo’s motion.

On July 23, 2012, this Court granted the motions to dismiss the FAC. (See

Dismissal Order [Doc. 19].) The Dismissal Order was based on Plaintiffs’ failure to

oppose, as well as on the Court’s evaluation of the merits of both motions. Plaintiffs

now seek to set aside the Dismissal Order.

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II. ANALYSIS

Federal Rule of Civil Procedure 60(b)(1) permits a court to “relieve a party or its

legal representative from a final judgment, order, or proceeding” on grounds of

“mistake, inadvertence, surprise, or excusable neglect.” As the Ninth Circuit has

recognized, “Rule 60(b) is remedial in nature and . . . must be liberally applied.” TCI

Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001) (quoting Falk v.

Allen, 739 F.2d 461, 463 (9th Cir. 1984)). Relief under rule 60(b), however, is not a

matter of right, and courts have discretion whether to grant it. See Carter v. United

States, 973 F.2d 1479, 1489 (9th Cir. 1992.)

The determination of whether a party’s inaction in a case constitutes excusable

neglect is “at bottom an equitable one, taking account of all relevant circumstances

surrounding the party’s omission.” Briones v. Riviera Hotel & Casino, 116 F.3d 379,

381 (9th Cir. 1997) (quoting Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship,

507 U.S. 380, 391 (1993)). When deciding if a party’s failure to meet a court deadline

is excusable under Rule 60(b)(1), the Ninth Circuit has instructed courts to apply a

four-factor balancing test that considers (1) “the danger of prejudice to the [nonmoving party],” (2) “the length of the delay and its potential impact on judicial

proceedings,” (3) “the reason for the delay, including whether it was within the

reasonable control of the movant,” and (4) “whether the movant acted in good faith.” 

Id. at 381-82 (quoting Pioneer Inv. Servs. Co., 507 U.S. at 391). 

Here, Plaintiffs contend that the Dismissal Order should be set aside because

their “counsel’s failure to file a timely response to Defendants’ Motion to Dismiss

Plaintiffs’ First Amended Complaint was not as a result of Plaintiffs’ counsel’s culpable

conduct as she was not aware of Defendants [Wells Fargo’s] . . . Motion to Dismiss

Plaintiffs’ First Amended Complaint.” (Set Aside Mt. [Doc. 21], 6:10–13.) The Court

is not persuaded for at least two reasons.

First, Plaintiffs’ counsel’s claimed lack of knowledge about Wells Fargo’s motion

is difficult to reconcile with the relevant facts. When Wells Fargo filed its motion,

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Plaintiffs’ counsel was registered with CM/ECF, the court’s electronic notification

system. As a result, Plaintiffs’ counsel was automatically electronically served with

Wells Fargo’s motion to dismiss. See Civ. L.R. 5.4 (c). Indeed, the CM/ECF electronic

receipt on the docket confirms that Plaintiff’s counsel was served with the motion on

January 11, 2012 at 2:39 p.m. And the receipt establishes that electronic service of

Wells Fargo’s motion was emailed to the same address (e.g.,

veronica@vaguilarlaw.com) as NDEX’s motion, which was electronically served on

January 18, 2012 and towhich Plaintiffs responded. Finally, assuming Plaintiff’s counsel

did not receive the electronically served version of Wells Fargo’s motion, Wells Fargo’s

proof of service confirms that she was served with a copy of the motion by regular U.S.

mail. (See Proof of Serv. [Doc. 10-2], 2.)

Moreover, Plaintiff’s counsel’s claimed lack of “culpability” cannot be reconciled

by her presumed knowledge of the normal pleading deadlines applicable to civil cases.

Federal Rule of Civil Procedure 15(a)(3) requires a defendant to respond to an

amended pleading “within the time remaining to respond to the original pleading or

within 14 days after service of the amended pleading, whichever is later.” Plaintiffs’

FAC was filed on December 28, 2011 (see FAC [Doc. 9]). Under Rule 15(a)(3),

Defendants’ responsive pleading was clearly due by the end of January 2012. Assuming

(1) that Plaintiff’s counsel was keeping track of deadlines in this case and (2) that she

did not believe Wells Fargo had filed the motion to dismiss, Plaintiff’s counsel should

have believed that by February 1, 2012, Wells Fargo had failed to respond to the FAC. 

Yet, as of July 23, 2012, Plaintiff’s counsel had apparently done nothing to determine

whether Wells Fargo and MERS had responded to the FAC. For these reasons, the

Court finds that Plaintiffs have failed to provide a sufficient reason for failing to file an

opposition to Wells Fargo’s motion.

Second, Rule 60(b) balances the policy of deciding cases on the merits with the

litigants’ interest in the finality of judgments. TCI Group, 244 F.3d at 697 (citing Pena

v. Seguros La Comercial, 770 F.2d 811, 814 (9th Cir. 1985)). Conspicuously missing

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from Plaintiffs’ motion to set aside is any assertion that the Dismissal Order is wrong. 

Instead, the entire motion is based on Plaintiffs’ counsel’s alleged lack of knowledge

about the motion. But the Dismissal Order evaluated the merits of Wells Fargo’s

motion and found that the FAC’s allegations established that Plaintiffs’ claims were

time barred and that Plaintiffs were not entitled to tolling: “the few ‘factual’ allegations

in the FAC establish that the Shapouris should have discovered the alleged wrongful

conduct immediately after the loan closed.” (Dismissal Order, 5:1–2.) Additionally,

because this Court had previously given Plaintiffs leave to amend the complaint to

address the statute of limitations problems, and the FAC utterly failed to do so, leave

to amend would not have been granted regardless of whether Plaintiffs had filed an

opposition requesting leave. Indeed, this Court denied Plaintiffs’ request for leave to

amend that was included in their opposition to NDEX’s motion to dismiss. 

Accordingly, for all these reasons, Plaintiffs’ request to set aside the judgment will be

denied.

III. CONCLUSION

For the reasons discussed above, Plaintiffs’ motion to set aside [Doc. 21] is

DENIED.

IT IS SO ORDERED.

DATED: November 16, 2012

Hon. Thomas J. Whelan

United States District Judge

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