Harbour Vista v. HSBC Mortgage Services Inc.
201 Cal. App. 4th 1496
| Cal. Ct. App. | 2011Background
- Harbour Vista alleges a ground lease and seeks to quiet title to a condominium unit in Huntington Beach; Nugent is the owner who borrowed from Fieldstone Mortgage and secured the unit by a deed of trust.
- Nugent allegedly subleased the land to Harbour Vista; Harbour Vista obtained an unlawful detainer against Nugent and Harbour Vista foreclosed her mortgage via Fieldstone and HSBC purchased the condo at foreclosure in December 2009.
- In October 2009 Harbour Vista filed a quiet title action naming HSBC among the defendants; HSBC received pleadings and lis pendens by November.
- HSBC failed to answer; Harbour Vista took a default in January 2010; HSBC appeared in April 2010 and sought to set aside the default; a show-up race to entry of judgment occurred at a case management conference.
- The trial court entered a default judgment for Harbour Vista on April 28, 2010 without an evidentiary hearing; HSBC moved to set aside the default and for reconsideration, which were denied.
- This appeal argues the court had no authority to enter a default judgment and that an evidentiary hearing in open court was mandated by §764.010 prior to adjudicating title; the matter is remanded for such a hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a default judgment is permitted in a quiet title action | HSBC: statute §764.010 bars default judgments in quiet title actions. | Harbour Vista: the court may grant default judgments when supported by evidentiary showings. | Default judgment not permitted; remand for evidentiary open hearing. |
| Whether an evidentiary hearing in open court is required | HSBC asserts the hearing can be conducted informally or in chambers. | Harbour Vista contends open-court evidentiary hearing is required to determine title under §764.010. | Open-court evidentiary hearing required; judgment must be in accordance with the evidence and law. |
| Whether a defaulting defendant may participate in the quiet title hearing | HSBC: no right to participate beyond pleading; defaults should not yield ambush. | Harbour Vista: due process requires allowing defendant to present its evidence at the hearing. | Participation by defaulting defendant is required to determine title; remand for hearing with both sides. |
| Whether declarations/declarations as evidence can be used at the hearing | HSBC: declarations should be admissible to prove/oppose title. | Harbour Vista: declarations are hearsay and not permitted unless statute allows. | Declarations are not permitted to prove quiet title; must use live/open evidentiary hearing with admissible evidence. |
Key Cases Cited
- Yeung v. Soos, 119 Cal.App.4th 576 (Cal. App. 2004) (default judgments in quiet title require evidentiary hearing under §764.010)
- Garcia v. Politis, 192 Cal.App.4th 1479 (Cal. App. 2011) (participation rights after default; context for default procedures)
- Johnson v. Stanhiser, 72 Cal.App.4th 357 (Cal. App. 1999) (prima facie standard at default prove-up; evidentiary burden)
- Taliaferro v. Hoogs, 219 Cal.App.2d 559 (Cal. App. 1963) (evidence standards at default prove-up in civil actions)
- Yeung v. Soos, 119 Cal.App.4th 576 (Cal. App. 2004) (statutory interpretation of §764.010 and evidentiary hearing requirements)
- Lechuza Villas West v. California Coastal Com., 60 Cal.App.4th 218 (Cal. App. 1997) (antagonistic claims and quiet title pleading requirements)
- Sporn v. Home Depot USA, Inc., 126 Cal.App.4th 1294 (Cal. App. 2005) (prejudice considerations in default contexts)