Two recent California Appellate Court cases confirm that default judgments are prohibited in quiet title actions because C.C.P. § 764.010 requires an evidentiary hearing to establish “plaintiff’s title” and “hear evidence offered respecting the claims of any of the defendants.” Harbour Vista, LLC v. HSBC Mortgage Services, Inc. (2011) 201 Cal.App.4th 1496, [4th Dist.]; Nickell v. Matlock (2012) 206 Cal.App.4th 934, [2nd Dist.]. In both Harbour Vista and Nickell, defaults had been taken against the defendants (one for failure to timely answer, the other upon court’s entry of terminating sanctions for violations of discovery orders). Despite the entry of a default, both cases reversed the judgments and determined that the defaulted defendants had the right to appear and participate in an open-court, evidentiary proceeding the merits of the plaintiffs’ quiet title actions. (A petition for review to the California Supreme Court in the Nickell case has been filed.)
The dissent in Harbour Vista noted that allowing a defaulted defendant to participate in an evidentiary proceeding was a significant departure from existing California law. Indeed, these decisions have the potential to nullify the legal impact resulting from the lawful entry of default and may, as the dissent recognized, lead to a trial by ambush.
SIGNIFICANCE OF HARBOUR VISTA & NICKELL ON FUTURE QUIET TITLE ACTIONS:
Quiet title actions (764.010 et seq.) prohibit judgments entered by default, a result consistent with the statutory language “The court shall not enter trial by default”. This also clarifies dicta in Yeung v. Soos (2004) 119 Cal.App.4th 576, the previous leading case on quiet title actions, which suggested that the statute’s requirements could be satisfied by an evidentiary hearing in the context of “prove-up hearing” for default judgments.
Quiet title actions require an open-court evidentiary hearing, where the court “hears evidence establishing plaintiff’s title” and “hears evidence offered by defendants of their claims”.
The statute’s reference to “any defendant” includes a defendant whose default has been taken.
First cases to severely limit the effect of a prior entry of default.
Will this open the door for the defaulted defendant to hold a “trial by ambush”? The defendant whose default has been taken avoids normal discovery obligations yet has the right to appear at the evidentiary hearing, object to the plaintiff’s evidence and offer evidence and live testimony in support of defendant’s claim or interest in the property.
IS AN IN REM QUIET TITLE ACTION, A “JURIDICAL PLATYPUS”?
Harbour Vista’s majority equated the Legislature’s 1980 rewrite of the Quiet Title chapter to the creation of a “juridical platypus” because a quiet title decree is an in rem proceeding which effectively adjudicates title“ against the world.” The platypus, however, is a semi-aquatic mammal, duck-billed, beaver-tailed, and otter-footed, one of five species of montreones, i.e., referring to mammals that lay eggs. While it is true that real property is unique and quiet title actions are in rem proceedings, they are not nearly as odd as the platypus. Nor are quiet title actions so unusual that they warrant departure from existing law by allowing the defaulted defendant an opportunity to participate meaningfully in the evidentiary proceeding. While it is yet to be seen what practical consequences will arise from these cases, requiring an evidentiary hearing with live testimony in every quiet title action will further tax the resources of the California Superior Courts and increase the cost of the plaintiff’s action.