Marine Amikhanyan et al v. Laurie Selber Silverstein et al

• Court: District Court, C.D. California
• Decided: March 10, 2026
• Docket: 2:25-cv-07794
• Status: Unknown

Opinion

1 O 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Case No.: 2:25-cv-07794-MEMF-AGR 11 MARINE AMIKHANYAN et al, 12 Plaintiff, ORDER GRANTING MOTION TO SET ASIDE ENTRY OF DEFAULT [DKT. NO. 49] 13 v.

15 LAURIE SELBER SILVERSTEIN et al, Defendants. 16 17

18 19 20 Before the Court is Brewster Johnson’s Motion to Set Aside Entry of Default. Dkt. No. 49 21 (“Motion”). For the reasons stated herein, the Court GRANTS the Motion. 22 / / / 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 / / / 1 I. Background 2 A. Factual Background1 3 i. The Loan 4 Plaintiff Marine Amikhanyan and Defendant Brewster Johnson are residents of California. 5 Compl. ¶¶ 1-13. Johnson is employed as the Governor and President for Defendant PS Funding, Inc. 6 Id. ¶ 7. 7 On February 2, 2021, Amikhanyan borrowed from PS Funding $665,000 at an interest rate of 8 8.990%, secured by real property. Id. ¶ 13. The loan had a maturity date of March 1, 2023. Id. 9 Amikhanyan signed a Note and Deed of Trust. Id. Amikhanyan paid on time mortgage payments to 10 PS Funding of $4,981.96 from February 2, 2021 to March 1, 2023, and made three additional 11 mortgage payments from March 1, 2023, to June 2023. Id. ¶ 14. In June 2023, PS Funding informed 12 Amikhanyan that it could not accept payments and should not have accepted Amikhanyan’s three 13 payments from March 1, 2023, to June 2023 as it was in Chapter Eleven bankruptcy. Id. ¶ 15. PS 14 Funding’s bankruptcy was assigned to Judge Laurie Selber Silverstein and was subject to an 15 automatic stay under 11 U.S.C. § 362. Id. ¶ 16. 16 In August 2023, Amikhanyan received a Notice of Default and Election to Sell Under Deed 17 of Trust from California TD Specialist, an affiliate of PS Funding. Id. ¶ 17. Amikhanyan attempted 18 to contact California TD Specialist, but California TD Specialist refused Amikhanyan’s request. Id. 19 In December 2023, California TD Specialist sent Amikhanyan a Notice of Trustee’s Sale, claiming 20 that Amikhanyan owed PS Funding $764,180.97 and that the sale would take place on December 27, 21 2023, at 10:30 a.m. Id. ¶ 18. Amikhanyan then contacted Jennifer Duran, a real estate negotiator for 22 assistance on the upcoming auction. Id. ¶ 19. 23 In January 2024, California TD Specialist held the Trustee’s Sale and provided a Demand for 24 Payoff regarding Amikhanyan’s loan. Id. ¶ 21. Romy Lasam signed off on the demand, indicating 25 that the Lender Agrees with the Amount in the Demand for the loan payoff. Id. 26 27 28 1 Except as otherwise indicated, the following factual background is derived from Amikhanyan’s Complaint. Dkt. No. 1 1 During negotiations with California TD Specialist, Duran requested an extension of time to 2 meet with the perspective private lender, and the extension was granted providing a new payoff date 3 of April 15, 2024. Id. ¶ 22. During the negotiations, Amikhanyan was informed to file Chapter 4 Thirteen bankruptcy for the amount owed under the loan. Id. ¶ 23. Amikhanyan’s bankruptcy 5 petition regarding the property loan was discharged as the writer of the petition did not mark the box 6 to contest California TD Specialist’s motion to discharge the property from the petition. Id. 7 ii. Trustee Sale 8 On April 16, 2025, California TD Specialist initiated a Trustee Sale on the property. Id. ¶ 24. 9 The Auction Levying Officer issued a Post Foreclosure Trustee Sale, rather than a regulatory 10 Trustee’s Sale, and did not inform any bidder that the property was subject to a Mandatory 11 California Redemption Law and California Code of Civil Procedures 729.030. Id. 12 iii. Bidder 13 On April 16, 2024, Paladar Capital Investments, L.P. (“Paladar”), a bidder claiming to be at 14 the Amikhanyan’s property auction, filed an unverified Complaint against Amikhanyan for 15 declaratory relief and quiet title. Id. ¶ 28. Amikhanyan filed an Answer on April 26, 2024, and an 16 amended Answer on May 22, 2024. Id. ¶¶ 29-30. Paladar amended its Complaint on May 22, 2024. 17 Id. ¶ 31. The amended Complaint alleged that Mona Elalami filed a false affidavit claiming to be the 18 highest bidder at the April 16, 2024, auction. Id. ¶ 33. 19 Defendant Mona Elalami had not produced her Affidavit as she claimed in the month of 20 April 2024. Id. ¶ 34. She claimed she was the highest bidder at the said auction on the “Subject 21 Property” as stated also in Paladar’s amended Complaint. Id. She lied and instead, allowed her father 22 Defendant Zeyad R. Elalami and Luxor Funding Group, Inc., to act as a Lender for another bidder, 23 Defendant Walid Wasifi, who bid on the Property and was the highest bidder. Id. Essentially, Luxor 24 Funding Group and Zeyad R. Elalami provided monies to Wasifi to purchase the Property at the 25 foreclosure auction. Id. Luxor was “Not Licensed” as a California Lender with California 26 Department of Protection and Innovation nor was Luxor registered with the National Mortgage 27 Licensing Act and Registry System. Id. ¶ 37. Luxor Funding Group and Zeyad R. Elalami allegedly 28 knew that PS Funding was in a Chapter Eleven proceeding in the Wilmington, Delaware District 1 Bankruptcy Court and took advantage of PS Funding’s Bankruptcy situation and added themselves 2 to the auction bidding as though Mona Elalami bid. Id. ¶ 39. Lasam and their associate California 3 TD Specialist commenced with a Trustee Sale of the Subject Property on April 16, 2024, and 4 commenced with a Notice of Default and Notice of Trustee Sale of the Subject Property starting in 5 2023 through 2024 with PS Funding. Id. ¶ 34. Lasam issued a Trustee Deed Upon Sale to Wasifi, 6 and thus allowing their associate, California TD Specialist, to commence with a Trustee Sale on the 7 Subject Property, while PS Funding was under the Bankruptcy Court Judge’s Automatic Stay Order. 8 Id. ¶¶ 41-42. 9 On June 17, 2024, Amikhanyan mailed and had independent confidential mail carried to 10 service to Defendants Zeyad Elalami and Wasifi a request for information as to the Notice to 11 Occupant to Vacate Premises. Id. ¶ 45. Wasifi had filed in Van Nuys Superior Court of California, 12 Case Number: 24VEUD01210, numerous Ex-Parte Unlawful Detainer Motions to evict the 13 Amikhanyan from the Subject Property. Id. Wasifi filed for a Writ of Possession. Id. Amikhanyan 14 had not received any kind of notice from Wasifi, and due to that his false swearing, the court issued 15 the writ in February of 2025. Id. 16 On May 9, 2025, while Amikhanyan and her husband left to work that morning, Wasifi, 17 Zeyad Elalami and Zeyad Elalami’s Brother, Mamdouh Elalami, went with a Peace Officer under a 18 Peaceful Escort to change the Subject Property’s Locks while the Amikhanyan and her husband, 19 Gevork Avetisyan, were at work, and upon returning, Amikhanyan could not enter the Subject 20 Property and was not able to retrieve basic care items and necessities. Id. ¶ 46. 21 A. Procedural Background 22 On August 20, 2025, Amikhanyan filed suit in this Court. See generally Compl. The 23 Complaint asserted twenty-five causes of action: (1) breach of contract, (2) breach of implied 24 covenant of good faith and fair dealing, (3) fraud and misrepresentation, (4) fraud in factum, (5) 25 violation of notice law, (6) violation of disclosure law, (7) violation of California Financial Code § 26 22000 et seq., (8) violation of the S.A.F.E. Act, (9) violation of the National Mortgage Licensing Act 27 and Registry System, (10) fraud and misrepresentation upon the FHA, (11) violation of 42 U.S.C. § 28 1986, (12) violation of 18 U.S.C. §§ 241 and 242, (13) violation of 18 U.S.C. § 1001, (14) violation 1 of 18 U.S.C. § 1621, (15) violation of 18 U.S.C. § 1341, (16) violation of 18 U.S.C. § 1343, (17) 2 violation of California Business and Professional Code § 17200, (18) usury, (19) unlawful 3 foreclosure, (20) violation of California Senate Bill 1079, (21) fraud and misrepresentation upon 4 California Senate Bill 1079, (22) illegal eviction, (23) violation of ponzi schemes, (24) violation of 5 the RICO Act, and (25) Intentional Infliction of Emotional Distress. See id. 6 On October 8, 2025, Amikhanyan filed an Application for Entry of Default on Johnson. Dkt. 7 No. 29. On October 10, 2025, the clerk entered default against Johnson. Dkt. No. 24. 8 On January 20, 2026, Johnson filed the instant Motion. Motion. Amikhanyan did not file an 9 Opposition. 10 I. Applicable Law 11 The Federal Rules of Civil Procedural provide that a “court may set aside an entry of default 12 for good cause.” Fed. R. Civ. P. 55(c). When determining whether good cause exists to justify 13 setting aside an entry of default, a court considers three factors: (1) whether the party seeking to set 14 aside the default engaged in culpable conduct that led to the default; (2) whether the party had any 15 meritorious defense; and (3) whether reopening the default judgment would prejudice the other 16 party. United States v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th 17 Cir. 2010). “This standard, which is the same as is used to determine whether a default judgment 18 should be set aside under Rule 60(b), is disjunctive, such that a finding that any one of these factors 19 is true is sufficient reason for the district court to refuse to set aside the default.” Id. Most 20 importantly, “judgment by default is a drastic step appropriate only in extreme circumstances; a case 21 should, whenever possible, be decided on the merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 22 1984). 23 II. Discussion 24 Johnson moves for an Order vacating the default entered against him on October 10, 2025. 25 Dkt. No. 24. Johnson contends that good cause exists for the Court to vacate the default because: (1) 26 he did not engage in culpable conduct leading to the default; and (2) he has multiple meritorious 27 defenses. See generally Motion. For the reasons stated below, the Court finds that good cause exists 28 to set aside the entry of default. 1 A. Johnson Did Not Engage in Culpable Conduct. 2 i. Amikhanyan Did Not Comply with Procedural Requirements. 3 Johnson argues that he was not properly served. Motion at 12-14. “[A] defendant’s conduct is 4 culpable if he has received actual or constructive notice of the filing of the action and intentionally 5 failed to answer.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001), overruled 6 on other grounds by Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141 (2001). Failure to answer is 7 only culpable if the movant acted with bad faith, such as an “intention to take advantage of the 8 opposing party, interfere with judicial decisionmaking, or otherwise manipulate the legal process.” 9 Id. The Ninth Circuit has “typically held that a defendant’s conduct was culpable for purposes of the 10 [good cause] factors where there is no explanation of the default inconsistent with a devious, 11 deliberate, willful, or bad faith failure to respond.” Id. at 698. Simple carelessness is insufficient to 12 treat a negligent failure to reply as inexcusable without a demonstration that other factors, such as 13 prejudice, weigh heavily in favor of denial of the motion to set aside default. Id. at 696–97. 14 Applying the proper standard, Johnson’s conduct was not culpable. Pursuant to Federal Rule 15 of Civil Procedure 4, a party must be served a summons and a copy of the complaint. Fed. R. Civ. P. 16 4(c); Mason v. Genisco Tech. Corp., 960 F.2d 849, 851 (9th Cir. 1992) (“A person is not bound by a 17 judgment in a litigation to which he or she has not been made a party by service of process.”). Rule 18 4(e) provides that the service requirement for an individual within a judicial district of the United 19 States can be satisfied by “following state law for serving a summons in an action brought in courts 20 of general jurisdiction in the state where the district court is located or where service is made.” Fed. 21 R. Civ. P. 4(e). 22 Amikhanyan asserts that they served Johnson pursuant to California Code of Civil Procedure 23 Sections 415.30 and 415.40. Dkt. No. 14. Section 415.30 states: A copy of the summons and of the complaint shall be mailed (by first-class mail or 24 airmail, postage prepaid) to the person to be served, together with two copies of the 25 notice and acknowledgment provided for in subdivision (b) and a return envelope, postage prepaid, addressed to the sender. 26 Cal. Code Civ. Proc. § 415.30. 27 Section 415.40 provides: 28 1 Ath issu amrtmicolen so rm bayy s been dseinrvge ad coonp ya poef rtshoen s ouumtsmidoen sth ains ds toafte t hine acnoym mplaaninnte tro p trhoev pideerdso bny t o 2 be served by first-class mail, postage prepaid, requiring a return receipt. 3 Cal. Code Civ. Proc. § 415.40. 4 Here, the proof of service, dated August 27, 2025, states that Johnson was served pursuant to 5 Sections 415.30 and 415.40 at 2121 Park Place Ste. 250, El Segundo, CA 90245. Dkt. No. 14. The 6 served address was PS Funding’s—Johnson’s employer until June 2024—former principal place of 7 business. Motion at 12; Dkt. No. 49-1 ¶ 4. PS Funding moved out of that location in or around June 8 2023. Id. As such, by the service date, Johnson did not have access to or an affiliation with the 9 served address. Dkt. No. 49-1 ¶¶ 4-5. Therefore, Johnson was never served with process in this 10 action. Because Johnson was never served, Johnson did not sign an acknowledgement form pursuant 11 to Section 415.30. Motion at 12, 14-15. And Amikhanyan has not presented evidence that Johnson 12 has been served and signed an acknowledgement form. In sum, Amikhanyan did not comply with 13 Section 415.30. 14 As the Court finds that Johnson was never served with process, the Court similarly holds that 15 Amikhanyan did not comply with Section 415.40. Notably, Section 415.40 pertains to service of “a 16 person outside” California. Cal. Code Civ. Proc. § 415.40 (emphasis added); Motion at 15. 17 Therefore, Section 415.40 is inapplicable as the served address is within California. Dkt. No. 14. 18 Taken together, it is reasonable for Johnson to conclude that he was not required to respond 19 to the Complaint. Accordingly, the Court finds that Johnson did not engage in culpable conduct 20 resulting in the entry of default.2 Because this finding is “sufficient reason for the district court to 21 refuse to set aside the default,” Signed Personal Check, 615 F.3d at 1091, the Court need not discuss 22 the other factors. 23 III. Conclusion 24 For the reasons stated, the Court hereby GRANTS the Motion and ORDERS as follows: 25 26 2 Additionally, the Court finds that Johnson, upon receiving notice of this action, was diligent in defending this action. Motion at 16; Dkt. No. 49-1 ¶¶ 2, 9. Johnson claims that he was made aware of this action on November 6, 2025, nearly 27 a month after the default entry. Motion at 12; Dkt. No. 49-1 ¶¶ 2, 9. Once Johnson learned of this action, he quickly retained counsel and filed the instant Motion. Id. 28 l 1. The Motion to Set Aside Entry of Default is GRANTED; 2 2. Amikhanyan is ORDERED to serve Johnson the summons and Complaint in compliance 3 with Federal Rule of Civil Procedure Rule 4; and 4 3. Upon service of the summons and Complaint, Johnson is ORDERED to file a response to 5 the Complaint within fourteen (14) days of the date the summons and Complaint are 6 served. 7 IT IS SO ORDERED.

9 Dated: March 10, 2026 10 MAAME EWUSI-MENSAH FRIMPONG 11] United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28