Josefina Galindo v. Select Portfolio Servicing Inc
2:15-cv-03582
C.D. Cal.Apr 11, 2017Background
- Pro se plaintiff Josefina Galindo sued SPS, NDS, attorney Randall Naiman, U.S. Bank (Trustee), and others alleging wrongful foreclosure and related claims; original complaint included FDCPA and Rosenthal Act claims and an equity claim to set aside foreclosure.
- Court dismissed the original complaint without prejudice and gave leave to amend; plaintiff’s FAC added new defendants (including “Encore Credit”) and new claims without leave; Court dismissed several claims with prejudice and others without prejudice, and instructed plaintiff to seek leave to file a second amended complaint.
- Plaintiff sought leave to file a second amended complaint alleging the loan was made by a non-existent lender (“ENCORE CREDIT”), arguing that made the Deed of Trust and subsequent transfers void; the Court denied leave and dismissed the action with prejudice as those claims failed as a matter of law and were time-barred.
- After that dismissal, Galindo obtained a Los Angeles Superior Court default judgment against “Encore Credit” that expunged the Deed of Trust and quieted title; she then moved in this federal case to reopen and correct the Court’s judgment, arguing preclusive effect of the Superior Court judgment.
- The Court denied the motion to reopen, finding the Superior Court default judgment had no preclusive effect as defendants were not parties and lacked a full and fair opportunity to litigate; the federal court’s prior ruling remained controlling under the last-in-time rule.
- Galindo moved for reconsideration under Rule 60(b) and Local Rule 7-18 reiterating the challenge that Encore Credit did not exist when the loan was made; the Court denied reconsideration as she failed to present any grounds warranting relief and did not address prior res judicata findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Superior Court default judgment precludes the federal judgment denying leave to amend | Galindo: Superior Court default judgment against Encore Credit expunged deed and quieted title, so federal judgment should be reopened/corrected | Defendants: They were not parties, lacked notice, and thus the Superior Court judgment has no preclusive effect; federal judgment stands | Denied — Superior Court judgment has no preclusive effect as to defendants; federal ruling controls under last-in-time rule |
| Whether the Deed of Trust is invalid because the lender named (“Encore Credit”) did not exist | Galindo: Loan was made by a non-existent entity, so the Deed of Trust and all transfers are void | Defendants: Validity of the Deed of Trust does not depend on exact corporate identity as stated; claims based on name inaccuracies fail | Denied — Court previously held such challenges fail as a matter of law; reconsideration rejected |
| Whether relief under Rule 60(b) / Local Rule 7-18 is warranted based on Superior Court judgment/new evidence | Galindo: New/default judgment is newly discovered evidence/fraud/grounds for relief | Defendants: No basis — no mistake, fraud, or new facts that would justify relief; plaintiff repeats prior arguments | Denied — Plaintiff failed to satisfy Rule 60(b) or Local Rule 7-18 criteria; motion untimely/repetitive |
| Whether leave to amend should be granted to add claims/defendants based on the Encore Credit theory | Galindo: Sought leave to add claims challenging title and loan validity based on lender identity | Defendants: Claims are futile and time-barred; prior dismissal appropriate | Denied previously; Court found amendment futile and time-barred, and reiterated on reconsideration |
Key Cases Cited
- Sch. Dist. No. 1J, Multnomah Cty., Or. v. ACandS, Inc., 5 F.3d 1255 (9th Cir. 1993) (standards for Rule 60(b) relief)
- Laguna v. Royalty Co. v. Marsh, 350 F.2d 817 (5th Cir. 1965) (judge must weigh newly discovered evidence against the whole record)
- Latshaw v. Trainer Wortham & Co., Inc., 452 F.3d 1097 (9th Cir. 2006) (Rule 60(b)(6) requires demonstrating injury and circumstances beyond control)
- Casey v. Albertson’s Inc., 362 F.3d 1254 (9th Cir. 2004) (Rule 60(b) motions are within district court's discretion)