Strickland v. Citizens Bank

1

KEMP STRICKLAND, an individual, Plaintiff, v. CITIZENS BANK, N.A., Defendant.

No. 3:23-cv-01126-IM

United States District Court, D. Oregon

January 18, 2024

Kelsey M. Peddie, Chenoweth Law Group PC, Attorney for Plaintiff.

OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

Karin J. Immergut United States District Judge

Before this Court is Plaintiff Kemp Strickland's Motion for Default Judgment (“Mot.”), ECF 28. Plaintiff has filed a quiet title action under Oregon law against Defendant Citizens Bank, N.A. On October 25, 2023, the Clerk entered the default of Defendant, ECF 27, which has not appeared in this action. Plaintiff now seeks a default judgment against Defendant, asserting that he is entitled to declaratory and injunctive relief. For the reasons below, Plaintiff's Motion is GRANTED.

BACKGROUND

The following background is taken from the allegations in Plaintiff's Complaint (“Compl.”), ECF 1-1 and two supplemental declarations provided by Plaintiff see First Declaration of Kemp Strickland (“First Strickland Decl.”), ECF 33; Second Declaration of Kemp Strickland (“Second Strickland Decl.”), ECF 38.

Plaintiff is the sole owner in fee simple of real property located at the address 14301 SE Viola Vineyard Drive, Happy Valley, OR 97086, which this Court will call the “Viola Vineyard property.” Compl., ECF 1-1 ¶¶ 2-3. Defendant is not in possession of the property. Id. ¶ 8. On or about November 7, 2006, Plaintiff and his ex-wife took out a $96,955 home equity line of credit with National City Bank. First Strickland Decl., ECF 33 ¶ 2; Compl., ECF 1-1 ¶ 6. Plaintiff and his ex-wife signed a fixed rate consumer note, security agreement, and line of credit trust deed. First Strickland Decl., ECF 33 ¶ 2. The note and trust deed were executed in Oregon. Id. ¶ 3. The trust deed granted National City Bank a security interest in the Viola Vineyard property. Id. ¶ 4.

In August 2016, Plaintiff filed for bankruptcy. Id. ¶ 5. After the bankruptcy, on November 23, 2016 Defendant assumed the trust deed from National City Bank and recorded its interest in the Viola Vineyard property with Clackamas County. Id. ¶ 7; see ECF 33 Ex. 1 (copy of Clackamas County record of assignment). Defendant continues to be the beneficiary of the trust deed. Compl., ECF 1-1 ¶ 6. However, Defendant has not attempted to collect any loan payments from Plaintiff to release this trust deed. Second Strickland Decl., ECF 38 ¶ 5. When Plaintiff has called Defendant's representatives about paying off the loan, he has been told that Defendant has no record of Plaintiff's loan. Id.

On July 13, 2023, Plaintiff brought this quiet title suit under O.R.S. 105.605 against Defendant and Wilmington Trust, N.A. in the Circuit Court of the State of Oregon for the County of Clackamas. See Compl., ECF 1-1 ¶ 10. In his Complaint, Plaintiff seeks (i) a declaration that Plaintiff is the owner of the Viola Vineyard property in fee simple and “entitled to possession thereof, free of any estate, title, claim, lien, or interest of Citizens Bank” and (ii) an injunction against “Citizens Bank and those claiming under Citizens Bank from asserting any estate, title, claim, lien, or interest in the Property or any portion thereof.” Id. Wilmington Trust removed this case to federal court on August 2, 2023, ECF 1, but Plaintiff moved to have Wilmington Trust dismissed from the case nineteen days later, ECF 9.

Then, between August 22 and 30, 2023, Plaintiff moved for both an entry of default and default judgment against Defendant, who had not yet appeared in this case. ECF 11, 13, 15. On August 31, this Court ordered Plaintiff to provide documentation of proper service to Defendant and denied the Motion for Default Judgment with leave to renew. ECF 17. Plaintiff filed proof that it had served a manager of a Citizens Bank branch in Rhode Island. ECF 19. This Court deemed this service to be insufficient and denied Plaintiff's Motion for Entry of Default. ECF 20. As this Court explained, Oregon law requires Plaintiff, at a minimum, to serve Defendant's registered agent in its principal place of business, Rhode Island. Id. For this reason, and because this Court sought to ensure that Defendant received fair notice of this suit consistent with Federal Rule of Civil Procedure 4, this Court ordered Plaintiff to mail copies of the Summons, his Complaint, and Amended Motion for Entry of Default to Defendant's registered agents in Rhode Island and Delaware, its state of incorporation. Id.

Plaintiff complied with this Court's order and filed proof of service on October 2, 2023. ECF 21. Plaintiff moved for entry of default again on October 23, 2023, ECF 25, and this Court granted it two days later, ECF 27. Plaintiff next filed a renewed Motion for Default Judgment. ECF 28. However, since the Motion did not engage with the Ninth Circuit's test for determining the appropriateness of default judgment-i.e., the Eitel factors, see infra at 8-9-this Court ordered supplemental briefing addressing those factors. ECF 30. Plaintiff timely filed his supplemental brief. Supplemental Brief (“Supp.”), ECF 31. This Court then ordered Plaintiff to provide additional factual allegations concerning whether this Court has personal jurisdiction over Defendant. ECF 32. Plaintiff filed a responsive declaration on December 7, 2023. First Strickland Decl., ECF 33. Finally, this Court ordered Plaintiff to then provide additional briefing and factual allegations concerning the merits of his equitable quiet title action and his request for permanent injunctive relief. ECF 34. Plaintiff filed responsive briefing and a declaration on January 3, 2024. ECF 37; Second Strickland Decl., ECF 38.

DISCUSSION

Part A of this Opinion holds that this Court has personal jurisdiction over Defendant. Part B holds that Plaintiff has satisfied the procedural prerequisites to pursuing a default judgment. Part C holds that Plaintiff has satisfied the Eitel factors. And Part D holds that permanent injunctive and declaratory relief are appropriate here.

A. Jurisdiction Over Defendant Citizens Bank

As an initial matter, this Court is satisfied that it has personal jurisdiction over Defendant based on the facts in this record. A district court “has an affirmative duty” to determine whether it has subject matter jurisdiction and personal jurisdiction over the defendant before entering a default judgment. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The court “may dismiss an action sua sponte” where personal jurisdiction does not exist. Id. However, it must first give the plaintiff moving for a default judgment the opportunity to show facts supporting the exercise of personal jurisdiction. Id. at 712-13.

Plaintiff has alleged sufficient facts to support the exercise of specific personal jurisdiction in this case. Specific personal jurisdiction exists where a defendant has “purposefully avail[ed] itself of the privilege of conducting activities within” the state attempting to exert personal jurisdiction. Hanson v. Denckla, 357 U.S. 235, 253 (1958). A plaintiff's claims must also “arise out of or relate to the defendant's contacts” with the forum. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cnty., 582 U.S. 255, 262 (2017) (citation and brackets omitted). While this does not necessarily require a strict causal link between the defendant's contacts and the plaintiff's injury, the two must be sufficiently related such that subjecting the defendant to suit in the forum state would not “offend traditional notions of fair play and substantial justice.” Int'l. Shoe Co. v. Washington, 326 U.S. 310, 316-17 (1945) (internal quotation marks omitted). Courts within the Ninth Circuit apply a three-part test to determine whether the exercise of specific jurisdiction over a non-resident defendant is appropriate:

(1) the defendant must either purposefully direct his activities toward the forum or purposefully avail himself of the privileges of conducting activities in the forum;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

AMA Multimedia, LLC v. Wanat, 970 F.3d 1201, 1208 (9th Cir. 2020) (citations, brackets, and internal quotation marks omitted).

This Court finds all three prongs met in the present case. First, although Defendant is based in Rhode Island and Delaware, it purposefully registered a security interest in real property located in Oregon with an Oregon county office. See ECF 33, Ex. 1. Accordingly, it sought to “avail [it]self of the privilege of conducting activities in” Oregon and “invoke[] the benefits and protections of” Oregon law to assert that security interest. Schwarzenegger v. Fred Martin Motor Co. 374 F.3d 797, 802 (9th Cir. 2004). On this point, Sher v. Johnson is dispositive. 911 F.2d 1357 (9th Cir. 1990). There, the Ninth Circuit held that executing a deed of trust in the State of California constituted a significant contact with that State. Id. at 1363-64. “The execution of the deed,” the Ninth Circuit reasoned, “contemplated significant future consequences in California: perfection of the partnership's security interest would require filing in the California recorder's office; judgment on the deed would require the application of California law; enforcement of such a judgment would require the action of a California court.” Id. at 1363 (internal quotation marks and brackets omitted). That holding applies with full force here; Defendant's actions contemplated “significant future consequences” in Oregon. Second, Plaintiff's claim arises out of Defendant's security interest in the Viola Vineyard property. Third,...