Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_19-cv-04158/USCOURTS-cand-4_19-cv-04158-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

NATIONAL DEFAULT SERVICING 

CORPORATION,

Plaintiff,

v.

ALL CLAIMANTS TO SURPLUS FUNDS 

AFTER TRUSTEE'S SALE OF REAL 

PROPERTY LOCATED AT: 1206 

CANTERBURY ROAD, 

HILLSBOROUGH, CA 94010, et al.,

Defendants.

Case No. 19-cv-04158-DMR 

ORDER DISMISSING KEVIN GRIFFIN 

AND DISCOUNT PLUMBING AND 

HEATING, INC. FROM ACTION FOR 

FAILURE TO PROSECUTE

On March 20, 2019, National Default Servicing Corporation (“NDSC”) conducted a 

nonjudicial foreclosure sale of real property located at 1206 Canterbury Road, Hillsborough, 

California (“the Canterbury Road property”), resulting in surplus proceeds of $509,351.31. 

[Docket No. 1-1 (Notice of Removal Ex. 1, Pet. and Decl. Regarding Unresolved Claims and 

Deposit of Undistributed Surplus Proceeds of Trustee’s Sale (the “Petition”)) 2, ¶¶ 1, 3, 4.] 

Following the sale, NDSC sent written notice of the surplus proceeds under California Civil Code 

section 2924j(a) to “all persons with a recorded interest in the [Canterbury Road property] as of 

the date immediately prior to the trustee’s sale who would be entitled to notice,” including 

Discount Plumbing and Heating, Inc. (“Discount”). Petition 2, ¶ 5 Attach. 8 (ECF p. 40). NDSC 

received four written claims by potential claimants, none submitted by Discount. See Petition 2, 

¶¶ 6, 8, Attach. 11b.

Given a conflict between the potential claimants, NDSC filed this action in San Mateo 

County Superior Court pursuant to California Civil Code section 2924j to determine the proper 

recipient(s) of the surplus proceeds. In the Petition, NDSC affirmed that it had provided notice

Case 4:19-cv-04158-DMR Document 76 Filed 04/07/20 Page 1 of 4
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United States District Court

Northern District of California

under section 2924j(d) to “all persons with a recorded interest in the property who would be 

entitled to notice” of its intent to deposit funds from the trustee’s sale with the clerk of the court. 

Consistent with state law, NDSC’s notice informed recipients that any claim for funds must be 

filed with the court within 30 days from the date of the notice and provided the address and 

telephone number for the court. Petition 2, ¶ 10; Notice of Removal Ex. 3 (ECF pp. 139-42). 

NDSC served Discount with the notice. Petition Attach. 13. Discount did not file a claim for the 

surplus proceeds in state court in response to this second notice. See Notice of Removal.

On July 10, 2019, Douglas Whitney and the Dennis Moore 1206 Canterbury Road Trust 

filed a claim to the surplus funds in state court. Notice of Removal Ex. 2. On July 19, 2019, the 

United States of America (“the government”) removed the action to federal court and 

subsequently filed a claim for the surplus proceeds. [Docket No. 7.] Dennis Moore, the former 

owner of the Canterbury Road property, filed a claim to the surplus funds on July 30, 2019. 

[Docket No. 10.] On August 12, 2019, Discount’s CEO Kevin Griffin consented to magistrate 

judge jurisdiction on behalf of himself and Discount. [Docket No. 12.] Discount did not file a 

claim to the surplus funds in this court.

The court held an initial case management conference on October 30, 2019. Discount did 

not appear. [Docket No. 43.] Discount also failed to appear at Judge Sallie Kim’s November 15, 

2019 and November 26, 2019 telephonic scheduling conferences and Judge Kim’s February 5, 

2020 settlement conference, despite having been served with all of the scheduling orders. [Docket 

Nos. 44, 46, 49, 50, 59.] At the settlement conference, Douglas Whitney, the Dennis Moore 1206 

Canterbury Road Trust, and the government (the “settling parties”) reached an agreement to

resolve their competing claims to the surplus funds at issue in this action. [Docket No. 59.] 

On February 7, 2020, the settling parties filed a stipulation regarding the terms of their 

settlement in which they ask the court to approve the settlement agreement and direct the 

distribution of funds in accordance with their agreement. [Docket No. 60.] Neither Griffin nor 

Discount is a party to the settlement agreement. Therefore, on February 11, 2020, the court issued 

an Order to Show Cause (“OSC”) why the court should not approve the settlement agreement and 

why the court should not dismiss Griffin and Discount from this action for failure to prosecute. 

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United States District Court

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[Docket No. 62.] Griffin and Discount timely responded to the OSC and submitted with their 

response an undated, unsigned copy of what appears to be a United States Bankruptcy Court 

claim, with no explanation. [Docket No. 65.] On March 3, 2020, the court issued an order 

regarding Griffin and Discount’s response to the OSC, directing them to “provide evidence in the 

form of a declaration sworn under penalty of perjury setting forth in detail the circumstances of 

any” timely claim for the undistributed surplus funds. [Docket No. 69.] 

Griffin and Discount’s response to the March 3, 2020 order consists of a sworn declaration 

by an individual named Juan C. Pardell, who appears to state that Discount performed repair work 

for Moore at the Canterbury Road property and was never paid and that Discount recorded a 

mechanic’s lien with the County of San Mateo for the amount of the services rendered plus 

interest. [Docket No. 71 (Pardell Decl. (Mar. 11, 2020) ¶¶ 1, 2, 4.] Additionally, Griffin 

submitted a letter to Judge Kim dated February 27, 2020 (i.e., weeks after the settlement 

conference) in which he states “Claimant Kevin Griffin/Discount . . . is a claimant to the surplus 

funds” because Discount recorded a mechanic’s lien, and that he “did not realize that [he] needed 

to file an answer in federal court.” [Docket No. 70.] Griffin asked Judge Kim to “allow us to 

proceed as a proper lien claimant” and “participate in resolving this matter.” He also states,

without explanation, that “[w]hile I understand that notices were sent to our mailbox, those notices 

were not forward[ed] to me.” Id. 

Contrary to Griffin’s assertion that Discount is a “claimant” to the surplus funds, Discount 

failed to file a claim to the funds in state court, despite being served with two notices from NDSC 

regarding the funds along with instructions for filing a claim. Following the removal of the action 

to this court, Griffin and Discount appeared and consented to magistrate judge jurisdiction, but did 

not file a claim to the surplus funds and otherwise failed to participate in the litigation, even 

though they were served with notice of the proceedings throughout the litigation. [See, e.g., 

Docket Nos. 4, 25-1, 44-1, 46-1, 49-1, 50-1, 53-1, 55-1.] As the settling parties have reached an 

agreement that resolves their competing claims to the surplus funds at issue, the court declines to 

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permit Griffin and/or Discount to assert a claim at this late stage of the proceedings. The court 

hereby dismisses Griffin and Discount from this action for failure to prosecute. 

IT IS SO ORDERED.

Dated: April 7, 2020

______________________________________

Donna M. Ryu

United States Magistrate Judge

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORN

I

A

IT IS SO ORDERED

Judge Donna M. Ryu

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