Stateline Lender Inc. v. Drycreek Management LLC and Sonoma Investments LLC

• Court: District Court, S.D. California
• Decided: May 4, 2026
• Docket: 3:26-cv-00577
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 STATELINE LENDER INC., Case No.: 3:26-cv-577-CAB-MSB

12 Plaintiff, ORDER DENYING MOTION FOR 13 v. APPOINTMENT OF RECEIVER

14 DRYCREEK MANAGEMENT LLC, and [Doc. No. 5] SONOMA INVESTMENTS LLC, 15 Defendants. 16

17 On January 29, 2026, Plaintiff Stateline Lender Inc. (“Stateline”) sued Defendants 18 Drycreek Management LLC (“Drycreek”) and Sonoma Investments LLC (“Sonoma”) for 19 fraud and breach of promissory note. [Doc. No. 1 (“Complaint”).] Now before the Court 20 is Stateline’s motion to appoint a receiver for the property at 698 Braemar Terrace, 21 Fallbrook, CA 92028 (“Property”). [Doc. No. 5.] Stateline alleges that Defendants 22 fraudulently transferred the Property to “an insider” for no consideration to hinder and 23 delay Stateline “from collecting over $2 million in commercial debt obligations 24 [Defendants] undisputedly owe” from alleged fraud related to a separate property, which 25 gave rise to the Complaint. [Id. at 3.] 26 Defendants have not appeared, answered, or otherwise responded to this lawsuit. 27 Stateline states that it cannot “confirm whether service of the summons and complaint on 28 1 the Defendants has been completed in accordance with [Fed. R. Civ. P.] 4(h)” and later 2 that “Defendants have yet to be personally served via Rule 4(h)[.]” [Doc. No. 5 at 17–18.] 3 Yet Stateline argues that the Court has in rem jurisdiction over the Property pursuant to 4 Fed. R. Civ. P. 4(n) and can thus appoint a receiver for the Property. [Id.] Rule 4(n)(2) 5 allows a court to assert jurisdiction over a defendant’s assets in the district if the moving 6 party shows “that personal jurisdiction over [the] defendant cannot be obtained in the 7 district where the action is brought by reasonable efforts to serve a summons[.]” 8 Rather than an in rem action, the Court finds Stateline’s action is quasi-in-rem. 9 Indeed, given that Stateline’s underlying complaint asserts fraud against Defendants, “the 10 action is not really against the property; rather, the action involves the assertion of a 11 personal claim against the defendant of the type usually advanced in an in personam 12 action[,]” but here Stateline also seeks “attachment or garnishment of some or all of the 13 property the defendant may have in the jurisdiction.” Ventura Packers, Inc. v. F/V Jeanine 14 Kathleen, 424 F.3d 852, 860 n.4 (9th Cir. 2005) (italics added) (quoting Wright & Miller, 15 Federal Practice and Procedure; Civil 3d § 1070, at 286 (2002)). “Quasi-in-rem actions 16 require personal service of notice of the actions[,]” which Stateline concedes they have 17 failed to do. Scherbenske v. Wachovia Mortg., FSB, 626 F. Supp. 2d 1052, 1057 n.3 (E.D. 18 Cal. 2009) 19 Stateline cites Office Depot, Inc. v. Zuccarini in support, but the case offers none. 20 596 F.3d 696, 700–01 (9th Cir. 2010). There, the plaintiff had already secured a judgment 21 against the defendant and was seeking to collect on it by levying defendant’s property. Id. 22 at 698–99. The Ninth Circuit noted that for a district court to obtain quasi-in-rem 23 jurisdiction over property, due process and proper notice must be satisfied. Id. at 700. (“In 24 an action to execute on a judgment, due process concerns are satisfied, assuming proper 25 notice, by the previous rendering of a judgment by a court of competent jurisdiction.” 26 (emphasis added)); see also AM Tr. v. UBS AG, 681 F. App’x 587, 589 (9th Cir. 2017) 27 (“Service of process and personal jurisdiction are two different things.”). 28 l Here, Stateline has not shown any valid judgment which they seek to enforce, nor 2 due process is satisfied. Moreover, pursuant to Fed. R. Civ. P. 4(n)(2), Stateline fails 3 ||to make a showing that personal jurisdiction over Defendants cannot be obtained by 4 ||reasonable efforts to serve the summons and complaint. See Fed. R. Civ. P. 4(n)(2). 5 || Accordingly, the Court DENIES the motion to appoint a receiver. 6 It is SO ORDERED. 7 Dated: May 4, 2026 □ Z 8 Hon. Cathy Ann Bencivengo ? United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28