Tashjian v. Invictus Residential Pooler - 2A

Background

Vahe Tashjian moved for default judgment against Recovco Mortgage Management, LLC and Sprout Mortgage Corporation. No party opposed the motion, and the court heard argument on May 9, 2024.

The opinion states that Sprout Mortgage Corporation was voluntarily dismissed in 2019. Tashjian may instead have intended to seek default judgment against Sprout Mortgage Asset Trust, because the court had entered defaults against Recovco and Sprout Mortgage Asset Trust in 2023. The court said it could not assume which parties Tashjian intended to name.

Reasons for the ruling

The court identified several deficiencies:

- The motion did not address subject-matter jurisdiction, which concerns the court's authority over the type of dispute, or personal jurisdiction, which concerns the court's authority over the defendants. The court noted that the federal-question basis for removal had originally involved a Fair Credit Reporting Act claim, but Tashjian had stipulated to strike that claim against Recovco in 2019. - The opinion states that there was no proof that the operative complaint had been served on Recovco or Sprout Mortgage Asset Trust. Although Recovco had filed an answer and therefore might be presumed to have been served, the court directed Tashjian to explain why the court should treat the parties, particularly Sprout Mortgage Asset Trust, as having been aware of the action. - The court questioned whether the motion itself had been properly served. The opinion discusses conflicting notices of appearance filed by an attorney and states that Recovco and Sprout Mortgage Asset Trust appeared not to be represented under the corrected notice. Tashjian was directed to ensure proper service under those circumstances. - The motion did not sufficiently address the factors courts consider under Eitel v. McCool when deciding whether to enter default judgment. For example, Tashjian discussed only three claims, did not explain the legal elements of those claims, and did not show how the pleadings established those elements. The court said it would not consider claims that were not discussed in the motion. - The motion sought about $5.3 million in damages, but provided little explanation. The claimed losses appeared to include five loans with rates allegedly worse than originally quoted, along with claimed losses of $1 million and $2 million. The court could not match the described loans and amounts clearly to the damages alleged in the complaints and directed Tashjian to explain each item and the defendants' responsibility for it. - The court directed Tashjian to address Recovco's answer, which denied several allegations, when discussing the possibility of disputes over important facts. The court also directed Tashjian to address excusable neglect, particularly any issues concerning service of the complaint.

Disposition

Judge Edward J. Davila denied Tashjian's motion for default judgment without prejudice. The court understood that Tashjian planned to file a renewed motion and cautioned that default judgments are generally disfavored. The court set May 20, 2024, as the filing deadline for a renewed motion; June 3, 2024, for oppositions; June 7, 2024, for replies; and June 13, 2024, at 9:00 a.m. for the hearing.