Judge: Barbara M. Scheper, Case: 22STCV16146, Date: 2023-04-03 Tentative Ruling
Case Number: 22STCV16146 Hearing Date: April 3, 2023 Dept: 30
Dept. 30
Calendar No.
Gainer-Maiden,
et. al. vs. SGLC, Inc., et. al.,
Case No. 22STCV16146
Tentative Ruling
re: Defendant’s Demurrer to Complaint
Defendant Hollyvale Rental
Holdings, LLC (Hollyvale) demurs to the first, second, third, sixth, eighth,
and ninth causes of action in the Complaint of Plaintiffs Mitchaelle
Ganier-Maiden, individually and as trustee of the Estate of Ida Ganier Trust
(collectively, Plaintiffs). The demurrer is sustained without leave to amend.
In reviewing the legal sufficiency of a complaint against a demurrer, a
court will treat the demurrer as admitting all material facts properly pleaded,
but not contentions, deductions, or conclusions of law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank); C & H Foods Co.
v. Hartford Ins. Co. (1984) 163 Cal.App.3d 1055, 1062.) It is well settled
that a “demurrer lies only for defects appearing on the face of the
complaint[.]” (Stevens v. Superior Court
(1999) 75 Cal.App.4th 594, 601.) “The rules by which the sufficiency of a
complaint is tested against a general demurrer are well settled. We not only
treat the demurrer as admitting all material facts properly pleaded, but also
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.” (Guclimane Co.
v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (internal quotes
omitted).) For purposes of ruling on a demurrer, the complaint must be
construed liberally by drawing reasonable inferences from the facts pleaded. (Wilner v. Sunset Life Ins. Co. (2000) 78
Cal.App.4th 952, 958.)
When ruling on a demurrer, the Court may only consider the complaint’s
allegations or matters which may be judicially noticed. (Blank, supra, 39 Cal.3d at 318.) The Court may not consider any
other extrinsic evidence or judge the credibility of the allegations plead or
the difficulty a plaintiff may have in proving his allegations. (Ion Equip. Corp. v. Nelson (1980) 110
Cal.App.3d 868, 881.) A demurrer is properly sustained only when the complaint,
liberally construed, fails to state facts sufficient to constitute any cause of
action. (Kramer v. Intuit Inc. (2004)
121 Cal.App.4th 574, 578.)
Since her mother’s passing in
December 2015, Plaintiff Mitchaelle Gainer-Maiden (Maiden) has served as
trustee of the Estate of Ida Garnier (the Trust). (Comp. ¶ 12.) The Trust’s
major asset is the real property located at 2922 W. 77th Street, Inglewood, CA
90305 (the Property). (Comp. ¶ 12.)
In January 2020, Maiden applied for
a refinance loan on the Property from Defendants SGLC, Inc. and Michael Goodman,
in order to pay off a prior loan and make payments due to the Trust
co-beneficiaries, Maiden’s siblings. (Comp. ¶ 15.) Defendant Del Toro Loan
Servicing, Inc. is the servicing agent of SGLC, Inc. (SGLC). (Comp. ¶ 21.)
Maiden obtained a loan of $325,000 from SGLC on January 15, 2020, secured by a
first deed of trust against the Property. (Comp. ¶ 17.) However, the defendants
failed to approve the full amount sufficient to pay Maiden’s siblings. (Comp. ¶
19.)
Maiden’s financial problems
worsened over the next year, and she became unable to make installment payments
to SGLC. (Comp. ¶ 20.) On April 12, 2021, SGLC, through Del Toro Loan Servicing
and Total Lender Solutions, placed the Property in foreclosure proceedings and
scheduled a trustee sale of the Property for August 12, 2021. (Comp. ¶ 21.)
Maiden’s siblings also instituted a court action against Maiden to recover for
a balance of $50,000. (Comp. ¶ 22.) Maiden filed for chapter 13 bankruptcy on
August 11, 2021, and began a plan to pay SGLC the amount owed over 60 monthly
installments. However, Maiden defaulted in other obligations to the chapter 13
trustee, causing her bankruptcy case to be dismissed without prejudice. (Comp.
¶ 24.)
Following
the dismissal of Maiden’s case, on January 12, 2022, SGLC represented to Maiden
through her real estate broker that if Maiden held off from filing another
bankruptcy petition and secured a loan to pay off the defendants, they would
not foreclose on her property and would postpone the foreclosure sale set for
February 22, 2022. (Comp. ¶ 25.) Maiden secured a loan commitment and held off
from filing another bankruptcy petition, but discovered on February 22, 2022,
that the Property had been sold in the foreclosure sale regardless. (Comp. ¶¶
26-27.) The Property was sold to Defendant Hollyvale Rental Holdings, LLC
(Hollyvale) for $566,000, though the fair market value of the Property was
$800,000. (Comp. ¶ 31.)
First Cause of Action to Set Aside Sale
Plaintiffs’
first cause of action seeks to set aside the February 22 sale of the Property
to Hollyvale on the grounds that SGLC, Del Toro Loan Servicing, and Michael
Goodman (SGLC’s Secretary) “misrepresented facts . . . and by their conduct in
violation of the terms and conditions of the promissory note and deed of trust
and in violation of the duties and obligations of Defendant beneficiary and
Defendant trustee to Plaintiffs, all to Plaintiffs[‘] loss and damage in that
Plaintiff has been wrongly deprived and has been deprived of legal title by
forfeiture.” (Comp. ¶ 50.) Plaintiffs also allege that the defendants
“attempted and purported to sell the trust property without recording a new
postponement and for an unreasonable commercial value to [Hollyvale].” (Comp. ¶
48.)
Hollyvale first argues that its status as a
bona fide purchaser (BFP) precludes Plaintiff’s claims challenging title of the
Property. In support of its BFP status, Hollyvale requests judicial notice of the
Trustee’s Deed Upon Sale for the Property. (RJN, Ex. 4.) The Trustee’s Deed
recites that the Trustee “complied with all applicable statutory requirements
of the State of California and performed all duties required by the Deed of
Trust…”
Under Civil Code § 2924, “there is a
conclusive presumption created in favor of a BFP who receives a trustee's deed
that contains a recital that the trustee has fulfilled its statutory notice
requirements.” (Melendrez v. D & I Investment, Inc. (2005) 127
Cal.App.4th 1238, 1250.) “If the
trustee's deed recites that all statutory notice requirements and procedures
required by law for the conduct of the foreclosure have been satisfied, a
rebuttable presumption arises that the sale has been conducted regularly and
properly; this presumption is conclusive as to a bona fide purchaser.” (Moeller v. Lien
(1994) 25 Cal.App.4th 822, 831; Civ. Code, § 2924, subd. (c).)
The recital in the Trustee’s Deed does not show
that Hollyvale is a BFP. “[T]he issue of whether a buyer is a BFP is a question
of fact . . . a purchaser at foreclosure is a BFP if he or she (1) purchases
the property in good faith and for value, and (2) has no knowledge or notice of
the asserted rights claimed by another.” (Melendrez, 127 Cal.App.4th
at 1254.) The recital cited by Hollyvale establishes a conclusive presumption
under Civ. Code § 2924 that notice requirements have been met for a purchaser
who has been determined to be a BFP; the recital does not itself establish a
buyer’s status as a BFP. (Id. at 1254-55.) Based on documents of which
the Court may properly take judicial
notice, Hollyvale is a BFP. In
particular the trustee’s deed upon sale was recorded before this action was
filed and before the lis pendens was filed.
In connection with Hollyvale’s motion to expunge lis pendens, Plaintiff failed
to offer any evidence to dispute Hollyvale’s status as a BFP. Accordingly, the motion to expunge was
granted on March 16, 2023 on the grounds that Plaintiff could not prove the probable
validity of her real property claim against Hollyvale -- a BFP.
Hollyvale also argues that Plaintiff has
failed to sufficiently allege tender. The Court agrees. “[A]s a condition
precedent to an action by the borrower to set aside the trustee's sale on the
ground that the sale is voidable because of irregularities in the sale notice
or procedure, the borrower must offer to pay the full amount of the debt for
which the property was security.” (Lona v. Citibank, N.A. (2011) 202
Cal.App.4th 89, 112.) There are exceptions to the tender requirement, such as
when “the borrower's action attacks the validity of the underlying debt,” and “when
the person who seeks to set aside the trustee's sale has a counterclaim or
setoff against the beneficiary.” (Id. at 112-13.)
Plaintiff alleges
that she “will tender to Defendants or Defendant Trustee all amounts due and
owing so that the claimed default may be cured… Plaintiff is ready, willing and
able to tender those sums, if any, that the court finds due and owing…” (Comp.
¶ 51.) This allegation is insufficient because tender must take place before
filing suit. (Lona, 202 Cal.App.4th at 115.) Plaintiff has not shown
that any exception to the tender requirement applies. Because Plaintiff has not
properly alleged tender, the first cause of action fails.
Second and Third Causes of Action for Fraud and
Constructive Fraud
The elements of fraud are:
(1) misrepresentation (false representation, concealment, or nondisclosure);
(2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance;
(4) justifiable reliance; and (5) damages. (See Civil Code §1709.) Fraud
actions are subject to strict requirements of particularity in pleading. (Committee
on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
216.) “The particularity requirement demands that a
plaintiff plead facts which show how, when, where, to whom, and by what means
the representations were tendered.” (Cansino v. Bank of America (2014)
224 Cal.App.4th 1462, 1469.)
Plaintiff’s second and third causes
of action are for Fraud and Constructive Fraud, respectively. While these
claims are asserted against all Defendants, the underlying factual allegations
concern misrepresentations made by SGLC and Michael Goodman. (Comp. ¶ 56.)
Plaintiff has not pled any specific misrepresentation made by Hollyvale. In
addition, for purposes of the constructive fraud claim, Plaintiff has not pled
any basis for a fiduciary relationship between her and Hollyvale. Accordingly,
the demurrer is sustained as to the second and third causes of action.
Sixth Cause of Action for Quiet Title
Plaintiff alleges
under the sixth cause of action that she is the owner of the Property, and that
the February 22 foreclosure sale is void “since it failed to comply with the
requirements of service, posting, publication and recordation of the sale
notice in accordance with the provisions of California Civil Code section 2924,
et seq. Thus, Defendant Hollyvale Rental Holdings, LLC is not a bona fide
purchaser.” (Comp. ¶ 97.)
As discussed above, Hollyvale is a BFP and Plaintiff
has failed to allege that she made an offer of tender “as a condition precedent
to an action by the borrower to set aside the trustee's sale on the ground that
the sale is voidable because of irregularities in the sale notice or
procedure.” (Lona v. Citibank, N.A., 202 Cal.App.4th at 112.)
Eighth and Ninth Causes of Action for Declaratory Relief,
Injunctive Relief
“Any
person interested under a written instrument, excluding a will or a trust, or
under a contract, or who desires a declaration of his or her rights or duties
with respect to another, or in . . . property . . . may, in cases of actual
controversy relating to the legal rights and duties of the respective parties,
bring an original action or cross-complaint in the superior court for a
declaration of his or her rights and duties in the premises, including a
determination of any question of construction or validity arising under the
instrument or contract.” (Code Civ. Proc. § 1060.)
As to
Hollyvale, Plaintiffs’ eighth cause of action seeks a declaratory judgment that
the Trustee’s Deed Upon Sale is void based on SGLC’s alleged fraud. (Comp. ¶¶
71-74, 108-09.) But as the Court has found that Hollyvale is a BFP, Plaintiff
cannot succeed on this claim.
Because
Plaintiffs’ underlying claims fail, the demurrer is also sustained as to Plaintiffs’
ninth cause of action for injunctive relief.