Judge: Armen Tamzarian, Case: 23STCV13312, Date: 2023-12-18 Tentative Ruling
Case Number: 23STCV13312 Hearing Date: December 18, 2023 Dept: 52
Defendant Easy Financial, LLC’s Motion to Expunge Notice of Pendency of
Action (Lis Pendens) and Request for Attorney’s Fees and Costs
Defendant Easy Financial, LLC moves
to expunge the lis pendens plaintiff 630 Quebec LLC recorded against real
property at 6380 Quebec Drive, Los Angeles, CA 90068.
Requests for Judicial Notice
Defendant requests judicial
notice of six documents. (Def. RJN, Exs.
1-6.) All six documents are recorded property instruments subject to
judicial notice of their existence and legal effects. (See Yvanova v. New Century
Mortgage Corp. (2016) 62 Cal.4th 919, 924, fn. 1.)
The
court grants
defendant’s requests for judicial notice of exhibits 1-6.
Plaintiff requests judicial notice of six documents. (Exs. 62-67.)
These documents are complaints and cross-complaints against Easy
Financial, LLC in other actions. These
exhibits are not relevant or necessary
to the court’s analysis. (See Jordache
Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th
739, 748, fn. 6; Appel v. Superior Court
(2013) 214 Cal.App.4th 329, 342, fn. 6.)
Plaintiff’s requests for judicial notice are denied.
Evidentiary Objections
Plaintiff makes nine
objections to the declaration of Benjamin Donel in support of defendant’s
motion. All nine objections are overruled.
Legal Standard
Code of Civil Procedure section 405.30 provides that a party
with an interest in the subject real property may move to expunge a lis
pendens. Section 405.32 provides that “the
court shall order that the notice be expunged if the court finds that the claimant
has not established by a preponderance of the evidence the probable validity of
the real property claim.” Plaintiff must
show “it is more likely than not that [it] will obtain a judgment against the
defendant on the claim.” (CCP § 405.3.)
Opposition’s Failure to Cite Evidence
Plaintiff’s opposing
memorandum fails to cite the evidence it relies on. “All references to exhibits or declarations
in supporting or opposing papers must reference the number or letter of the
exhibit, the specific page, and, if applicable, the paragraph or line
number.” (Cal. Rules of Court, rule
3.1113(k).) “A trial court may decline
to consider an argument that does not comply with rule 3.1113 of the California
Rules of Court.” (Nationwide Ins. Co.
of America v. Tipton (2023) 91 Cal.App.5th 1355, 1365.)
When a party’s brief does not
comply with rule 3.1113, “the trial court ha[s] no obligation to undertake its
own search of the record ‘backwards and forwards to try to figure out how the
law applies to the facts’ of the case.
[Citations.] Rule 3.1113 rests on
a policy-based allocation of resources, preventing the trial court from being
cast as a tacit advocate for the moving party’s theories by freeing it from any
obligation to comb the record and the law for factual and legal support that a
party has failed to identify or provide.” (Quantum Cooking Concepts, Inc. v. LV
Associates, Inc. (2011) 197 Cal.App.4th 927, 934; see also Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 590 [“By failing to
support the factual assertions in their legal arguments with citations to the
evidence, plaintiffs have forfeited their argument”].)
In support of its opposition,
plaintiff filed four declarations and 70 exhibits totaling nearly 600 pages. Plaintiff’s brief begins by acknowledging
“[t]he [sic] are a multitude of facts.”
(Opp., p. 1.) Rather than
properly citing evidence in the record by reference to specific pages of
plaintiff’s 70 exhibits or specific paragraphs of plaintiff’s four
declarations, plaintiff merely summarizes, “All of the facts are in the
corresponding declarations and the declarations link to the referenced exhibits
to the compendium.” (Ibid.) Plaintiff’s opposition makes only the
following citations or references to evidence:
(1) citing
defendant’s RJN, Ex. 2 (Opp., p. 4);
(2) citing
plaintiff’s Ex. 35 (ibid.);
(3) citing
defendant’s RJN, Ex. 4 (ibid.);
(4) describing
a fact “mentioned in Mager’s declaration” (Opp., p. 6);
(5) describing
facts “mentioned in both Mager’s and Mallel’s declarations” (ibid.);
(6) citing
defendant’s RJN, Ex. 3 (Opp., p. 7);
(7) citing
“the first 12 exhibits” (Opp., p. 11);
(8) asserting
facts “[a]s described in the Mager Declaration” (Opp., p. 12);
(9) asserting
facts “[a]s described above and in the Mager Decl.” (Opp., p. 13);
(10) asserting
facts “[a]s more fully detailed in the Mager Decl.” (Opp., p. 14);
(11) describing
what “the Mager Decl. and Mallel Decl. provide” (ibid.); and
(12) asserting
facts “[a]s provided in the Kinnan Decl.” (Opp., p. 15).
These citations to evidence
are wholly inadequate. Plaintiff refers
to the entire Mager Declaration, which is 51 paragraphs, and to the entire
Mallel declaration, which is 35 paragraphs.
The only way to determine the probable validity of plaintiff’s real
property claims is for the court to undertake its own search of the 600-page
record. Plaintiff’s opposition provides
no assistance toward that effort. This
reason alone suffices for the court to conclude plaintiff has not met its
burden of showing the probable validity of any real property claim. Additionally, as explained below, even if the
court considers plaintiff’s opposition on the merits, plaintiff fails to meet
its burden with respect to any of its causes of action.
Breach of Contract and Breach of Implied
Covenant of Good Faith and Fair Dealing
Plaintiff
does not show it is more likely than not it will prevail on its causes of
action for breach of contract or breach of the implied covenant of good faith
and fair dealing. Plaintiff does not
meet its burden of proving a fundamental element of these causes of action: “To
prove breach of contract, plaintiff must show that the parties
had, and defendants breached, an enforceable agreement.” (Ojjeh v. Brown (2019) 43
Cal.App.5th 1027, 1037.)
Plaintiff
argues defendant breached the “forbearance agreement.” (P. Ex. 35.)
That agreement is between lender “Easy Financial LLC” and borrower
“Pacific Capital Partners LLC.” (Id.,
p. 1.) The agreement provides, “This Forbearance Agreement shall be binding
upon and insure [sic] the benefit of the parties hereto and their respective
successors and assigns; provided, however, the Owners/Borrowers may not
transfer its right under the Forbearance Agreement or the Loan Documents
without prior written consent of the Lender.”
(Id., ¶ 23.) It further
provides, “Lender shall not be deemed to have waived any right, power, or
remedy, except in writing signed by an officer of the Lender expressly stating
that it is a waiver of the same right, power or remedy.” (Id., ¶ 25.)
The plaintiff in this action
is 6380 Quebec LLC—not Pacific Capital Partners LLC. Plaintiff has not shown it is a party to this
contract. Plaintiff has not presented
evidence that Easy Financial, LLC gave written consent permitting Pacific
Capital Partners LLC to transfer any of its rights to plaintiff. Plaintiff instead relies on waiver or
estoppel, which the court will discuss below.
Plaintiff also alleges
defendant breached an oral “foreclosure agreement.” (Opp., p. 5)
Plaintiff does not, however, show by a preponderance of the evidence
that it had any such agreement with defendant.
In support of its claim there was an oral agreement, plaintiff relies on
vague statements in the supporting declarations of David Mallel and Shasha
Mager. (Mallel Decl., ¶ 30; Mager Decl.,
¶ 45.) The declarants do not state when
and where this agreement was formed and what words were used by the
parties. Since plaintiff could have
easily provided this evidence, their vague and conclusory assertions are viewed
by the court with distrust. (Evid. Code,
§ 412.)
Moreover, Benjamin Donel, the
managing member of Easy Financial, LLC (Donel Decl., ¶ 2) denies making any
such oral agreement (id., ¶¶ 15-16, 20). Donel instead states he agreed to forebear on
foreclosure if “the borrower immediately paid two months of regular interest
payments, and then kept making regular monthly interest-only payments” (id., ¶ 13), but “the borrowers failed to make even one regular interest
payment” (id., ¶ 14).
He further states, “Easy Financial, LLC never agreed to
transfer or assign this loan to any other entity - including the Plaintiff.” (Id., ¶ 20.)
Finding
plaintiff’s asserted verbal “foreclosure agreement” existed depends on which
testimony the court finds more credible.
Plaintiff provides no basis for finding its witnesses more credible than
Benjamin Donel. Plaintiff therefore does
not meet its burden of showing “it is more likely than not that [plaintiff]
will obtain a judgment against the defendant on the claim.” (CCP § 405.3.)
Waiver and Estoppel
In response to defendant’s
argument that it never permitted the borrower to transfer any interest or
rights to plaintiff, plaintiff relies on the doctrines of waiver and estoppel. “[N]otwithstanding a provision in a written
agreement that precludes oral modification, the parties may, by their words or
conduct, waive contractual rights.” (Wind
Dancer Production Group v. Walt Disney Pictures (2017) 10 Cal.App.5th 56,
78.) “In addition to waiving contractual
rights, the parties may, by their words or conduct, be estopped from enforcing
a written contract provision.” (Ibid.) “The elements of equitable estoppel are: (1)
the party to be estopped must be apprised of the facts; (2) he must intend that
his conduct shall be acted upon, or must so act that the party asserting
estoppel had the right to believe that it was so intended; (3) the party
asserting the estoppel must be ignorant of the true state of facts; and (4) he
must rely on the conduct to his prejudice.”
(Butler America, LLC v. Aviation Assurance Company, LLC (2020) 55
Cal.App.5th 136, 147.)
Plaintiff does not meet its
burden of showing it is more likely than not to prevail through waiver or
estoppel. Plaintiff’s witnesses state Easy
Financial, LLC, through Benjamin Donell, did various acts that constituted
waiver or deceived plaintiff. David
Mallel states, “Accordingly,
through Donel’s choice of escrow, and per Donel’s instructions, Raymond and I
created 6380 Quebec LLC, a California limited liability company (‘6380 Quebec
LLC’ or ‘Plaintiff’). Donel provided his
input in this operating agreement. Donel
assisted with the Quitclaim Deed attached at the end of Exhibit 22 from PCQ to
6380 Quebec LLC.” (Mallel Decl., ¶ 19.) Again, Mallel’s statements are vague and
conclusory. He does not explain precisely
what “instructions” Donel gave him or why he felt compelled to follow
them. The absence of this crucial detail
undermines Mallel’s credibility. (See Evid. Code, § 412.)
Moreover, Benjamin Donel denies
permitting the borrower to transfer the property to plaintiff and denies
waiving the provision requiring the lender’s prior written consent before doing
so. He states, “While various people,
who claimed to be ‘affiliated’ with the borrower, made all sorts of offers,
suggestions, and proposals, Easy Financial never agreed to extend the loan,
transfer or assign the loan to another entity, nor agreed to waive any of its
rights under the loan documents.” (Donel
Decl., ¶ 16.) “Easy Financial, LLC never
agreed to transfer or assign this loan to any other entity - including the
Plaintiff.” (Id., ¶ 20.)
This dispute again boils down
to a credibility contest between Benjamin Donel and plaintiff’s witnesses. Plaintiff’s papers and evidence give the
court no reasonable basis to credit plaintiff’s witnesses over Donel. Plaintiff therefore does not meet its burden
of showing it is more likely than not to prevail on a real property claim
against defendant.
Wrongful Foreclosure
Plaintiff has not established by a preponderance of the evidence the probable validity of its
cause of action for wrongful foreclosure.
The
elements of wrongful foreclosure are “ ‘(1)
the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive
sale of real property pursuant to a power of sale in a mortgage or deed of
trust; (2) the party attacking the sale (usually but not always the trustor or
mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or
mortgagor challenges the sale, the trustor or mortgagor tendered the amount of
the secured indebtedness or was excused from tendering.’ ” (Miles v. Deutsche Bank National Trust Co.
(2015) 236 Cal.App.4th 394, 408.)
Plaintiff
does not meet its burden of proving the first element. Plaintiff concedes the borrower defaulted on
the loan from Easy Financial, LLC. Plaintiff
asserts the foreclosure was illegal, fraudulent, or oppressive because defendant
foreclosed in breach of the “forbearance agreement” and verbal “foreclosure
agreement.” A foreclosure may be illegal
or wrongful if the trustee breached an agreement to modify a loan or cure a
default. (Chavez v. Indymac Mortgage
Services (2013) 219 Cal.App.4th 1052, 1063; Barroso v.
Ocwen Loan Servicing, LLC (2012) 208 Cal.App.4th 1001, 1017.) But as discussed above, plaintiff has not met
its burden of proving defendant breached the “forbearance agreement” or verbal
“foreclosure agreement” or any other agreement to modify a loan or cure a
default.
Disposition
Defendant Easy
Financial, LLC’s motion to expunge lis pendens is granted. The court hereby expunges the notice
of pending action recorded on June 14, 2023, instrument number 20230389108.