Judge Bruce G. Iwasaki, Case Number: 24STCV02397, Date: 2024-08-08 Tentative Ruling

Tentative Ruling: Plaintiff fails to state a cause of action against Defendants. if the complaint fails to state a cause of action, a default judgment is erroneous and will be set aside on appeal. (Molen v. Friedman (1998) 64 Cal.App.4th 1149, 1153-1154; Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 282.) Plaintiff’s request for default judgment must therefore be denied.

Plaintiff holds a Deed of Trust as to real property located at 1912 Las Flores Drive, Los Angeles, CA 90041 dated April 28, 2008, as Instrument No. 20080733829 (“Plaintiff’s DOT”). Plaintiff’s DOT is a second priority deed of trust against the property. Plaintiff filed this action seeking to cancel two other deeds of trust that were recorded prior to Plaintiff’s DOT: (1) the deed of trust dated October 19, 1970 and recorded on October 21, 1970 held by Defendant American City Bank (“Cloud DOT One”); and (2) the deed of trust dated February 19, 1982 and recorded on February 26, 1982 held by Defendant Aetna Finance Corporation.

On January 30, 2024, Plaintiff filed a complaint for (1) cancellation of instruments and (2) declaratory relief.

Code of Civil Procedure section 585 permits entry of a default judgment after a party has failed to timely respond or appear. A party seeking judgment on the default by the court must file a Request for Court Judgment and the following documents: (1) a brief summary of the case; (2) declarations or other admissible evidence in support of the judgment requested; (3) interest computations as necessary; (4) a memorandum of costs and disbursements; (5) a proposed form of judgment; (6) a dismissal of all parties against whom judgment is not sought or an application for separate judgment under Code of Civil Procedure section 579, supported by a showing of grounds for each judgment; (7) exhibits as necessary; and (8) a request for attorneys’ fees if allowed by statute or by the agreement of the parties. (Cal. Rules of Court, rule 3.1800.)

A defendant who defaults admits only facts well pleaded in the complaint. Thus, if the complaint fails to state a cause of action, a default judgment is erroneous and will be set aside on appeal. (Molen v. Friedman (1998) 64 Cal.App.4th 1149, 1153-1154; Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 282.) “If the complaint fails to state a cause of action or the allegations do not support the demand for relief, the plaintiff is no more entitled to that relief by default judgment than if the defendant had expressly admitted all the allegations. Such a default judgment is erroneous, and will be reversed on appeal.” (6 Witkin, Cal. Proc. (6^th ed. 2021), PWT, §223).)

Civil Code section 3412 states that a written instrument may be cancelled if “there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable.” “To prevail on a claim to cancel an instrument, a plaintiff must prove (1) the instrument is void or voidable due to, for example, fraud; and (2) there is a reasonable apprehension of serious injury including pecuniary loss or the prejudicial alternation of one's position.” (Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1193-1194.)

Plaintiff fails to plead any basis to cancel Cloud One DOT or Cloud Two DOT. Defendants have therefore not admitted to any facts that would entitle Plaintiff to the cancellation of either DOT.

Plaintiff fails to allege any facts entitling them to a declaratory order finding that it has priority over Cloud One DOT or Cloud Two DOT

Plaintiff fails to allege a declaratory relief cause of action. “To be entitled to declaratory relief the party need not establish a right to a favorable declaration. A complaint for declaratory relief is legally sufficient if its sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the parties under a written instrument or with respect to property and requests that the rights and duties of the parties be adjudged by the court.” (Lockheed Corp. v. Continental Ins. Co. (2005) 134 Cal.App.4^th 187, 221.) “The complaint is sufficient if it shows an actual controversy; it need not show that plaintiff is in the right.” (Id. at 222.)

Plaintiff fails to allege an actual controversy with Defendants. Plaintiff contends that “its right, title and interest is first priority, paramount, and free and clear of all interest of Defendant and all other parties, as of April 28, 2008, and at all times thereafter.” (Complaint, ¶15.) However, Plaintiff fails to allege that Defendants affirmatively dispute this position. Plaintiff alleges, “Plaintiff is informed and believes that each of the Defendants may dispute Plaintiff’s contentions therein.” (Complaint, ¶16.) Plaintiff has not alleged an actual controversy. Plaintiff has alleged a possible controversy.

Plaintiff’s Request for Default Judgment is denied for failure to state a cause of action against Defendants

Plaintiff fails to state a cause of action against Defendants. Plaintiff’s request for default judgment must therefore be denied.

Department 58