Judge: David A. Rosen, Case: 22BBCV00006, Date: 2023-03-17 Tentative Ruling
Case Number: 22BBCV00006 Hearing Date: March 17, 2023 Dept: E
Case No: 22BBCV00006
Hearing Date: 03/17/2023 – 10:00am
Trial Date: UNSET
Case Name: TRACEY L BAUMERT v. BANK OF AMERICA, et al.
TENTATIVE RULING -
DEMURRER
Moving
Party: Defendants, HSBC Bank
USA National Association, as Trustee for the Certificate Holders of Deutsche
Alt-A Securities Mortgage Loan Trust, Series 2007-OA3, and National Default
Servicing Corporation [collectively Loan Defendants]
Responding Party: Plaintiff, Tracey Baumert
(Oppo and Reply Submitted)
Moving Papers: Demurrer; Dailey Declaration; Request for Judicial
Notice
Opposition Papers: Opposition
Reply Papers: Reply
RELIEF REQUESTED
Defendants, HSBC Bank
USA National Association, as Trustee for the Certificate Holders of Deutsche
Alt-A Securities Mortgage Loan Trust, Series 2007-OA3 and National Default Servicing
Corporation [collectively Loan Defendants] demur to the Third Amended Complaint
(TAC) as follows:
1.
Loan Defendants generally demur pursuant to California Code of Civil Procedure
section 430.10(e) to the Third Amended Complaint, and every cause of action
contained therein, on the basis that judicial estoppel bars claims not raised
in Plaintiff’s bankruptcy cases.
2.
Loan Defendants generally demur pursuant to California Code of Civil Procedure
section 430.10(e) to the First Cause of Action of the Third Amended Complaint,
styled “To Set Aside Sale for Wrongful Foreclosure,” on the basis that
Plaintiff fails to state facts constituting a cause of action because A) this
Court found the claim as to the 2009 agreement to modify the loan failed as
against Loan Defendants, B) this cause of action is time barred to the extent
it is based on the 2007 loan origination or the trial modification plans in
2008-2009, C) the October 4, 2019 trustee’s sale is presumed valid, D)
Plaintiff fails to allege tender, E) Plaintiff fails to plead any statutory
violation with reasonable particularity, F) Plaintiff’s claim of a “predatory
loan” cannot support this cause of action, G) the bankruptcy court found the
stay was not violated by the trustee’s sale and relief was granted to proceed
with obtaining possession, H) Plaintiff has not alleged substantial prejudice
due to any alleged defect, and I) Plaintiff has not alleged any basis to cancel
any document.
3.
Loan Defendants generally demur pursuant to California Code of Civil Procedure
section 430.10(e) to the Second Cause of Action of the Third Amended Complaint,
styled “Rescission/Cancellation of Trustee’s Deed Upon Sale,” on the basis that
Plaintiff fails to state facts constituting a cause of action because A) this
Court found the claim as to the 2009 agreement to modify the loan failed as
against Loan Defendants, B) this cause of action is time barred to the extent
it is based on the 2007 loan origination or the trial modification plans in
2008-2009, C) the October 4, 2019 trustee’s sale is presumed valid, D)
Plaintiff fails to allege tender, E) Plaintiff fails to plead any statutory
violation with reasonable particularity, F) Plaintiff’s claim of a “predatory
loan” cannot support this cause of action, G) the bankruptcy court found the
stay was not violated by the trustee’s sale and relief was granted to proceed
with obtaining possession, H) Plaintiff has not alleged substantial prejudice
due to any alleged defect, and I) Plaintiff has not alleged any basis to cancel
any document.
4.
Loan Defendants generally demur pursuant to California Code of Civil Procedure
section 430.10(e) to the Third Cause of Action of the Third Amended Complaint,
styled “Declaratory Relief,” on the basis that Plaintiff fails to state facts
constituting a cause of action because A) Plaintiff fails to allege any actual
controversy, and B) Plaintiff cannot identify any valid substantive claim.
5.
Loan Defendants generally demur pursuant to California Code of Civil Procedure
section 430.10(e) to the Fourth Cause of Action of the Third Amended Complaint,
styled “Damages for Wrongful Foreclosure,” on the basis that Plaintiff fails to
state facts constituting a cause of action because A) this Court found the
claim as to the 2009 agreement to modify the loan failed as against Loan
Defendants, B) this cause of action is time barred to the extent it is based on
the 2007 loan origination or the trial modification plans in 2008-2009, C) the
October 4, 2019 trustee’s sale is presumed valid, D) Plaintiff fails to allege
tender, E) Plaintiff fails to plead any statutory violation with reasonable
particularity, F) Plaintiff’s claim of a “predatory loan” cannot support this
cause of action, G) the bankruptcy court found the stay was not violated by the
trustee’s sale and relief was granted to proceed with obtaining possession, H)
Plaintiff has not alleged substantial prejudice due to any alleged defect, and
I) Plaintiff has not alleged any basis to cancel any document.
BACKGROUND
Plaintiffs’
FAC alleged six causes of action, and this Court sustained demurrers with leave
to amend granted to the FAC at the hearing on July 1, 2022.
On
August 3, 2022, Plaintiffs filed a Second Amended Verified Complaint alleging
causes of action for: (1) Breach of Contract, (2) Wrongful Foreclosure, (3)
Fraud by Misrepresentation, (4) Rescission/Cancellation, and (5) Declaratory
Relief.
On
December 9, 2022, this Court ruled on two demurrers and a motion to strike to
the SAC. The Court ruled as follows:
Loan
Defendants’ demurrer as to the first cause of action for breach of contract as
to the loan modification was sustained without leave to amend as to both
Plaintiffs.
Loan
Defendants’ demurrer with respect to the second cause of action (wrongful
foreclosure) as to Tracey’s wrongful foreclosure cause of action was sustained
with 20 days’ leave to amend granted. Loan Defendants’ demurrer as to Henry’s
wrongful foreclosure cause of action was sustained without leave to amend.
Loan
Defendants’ demurrer as to the third causes of action for fraud was sustained
without leave to amend as to both Plaintiffs.
Loan
Defendants’ demurrer as to the fourth cause of action for rescission/cancellation
was sustained with leave to amend for Tracey and sustained without leave to
amend for Henry.
Loan
Defendants’ demurrer to the fifth cause of action for declaratory relief was sustained
with leave to amend as to Tracey, and Loan Defendants’ demurrer to the fifth
cause of action for declaratory relief as to Henry was sustained without leave
to amend.
Defendant,
Bank of America’s (BoA) demurrer as to all causes of action in the SAC were
sustained without leave to amend as to both Plaintiffs.
Loan
Defendants’ motion to strike the entire first cause of action for breach of
contract was granted.
Loan
Defendants’ motion to strike “and punitive” appearing in the prayer for the
third cause of action was granted.
Loan
Defendants’ motion to strike, “Punitive Damages in the amount the Court deems
necessary to punish Defendants for fraudulent conduct,: appearing in the prayer
for the third cause of action was granted.
On
1/9/2023 a Third Amended Complaint (TAC) was filed. Although the caption of the
TAC indicates there are three causes of action: (1) Wrongful Foreclosure, (2)
Recission, and (3) Declaratory Relief, there is a fourth cause of action
alleged in the body of the TAC for damages for wrongful foreclosure.
PROCEDURAL
Meet and Confer
A party filing a
demurrer “shall meet and confer in person or by telephone with the party who
filed the pleading that is subject to demurrer for the purpose of determining
whether an agreement can be reached that would resolve the objections to be raised
in the demurrer.” (Code Civ. Proc.,
§430.41, subd. (a).) “The parties shall
meet and confer at least five days before the date the responsive pleading is
due. If the parties are not able to meet and confer at least five days prior to
the date the responsive pleading is due, the demurring party shall be granted
an automatic 30-day extension of time within which to file a responsive
pleading, by filing and serving, on or before the date on which a demurrer
would be due, a declaration stating under penalty of perjury that a good faith
attempt to meet and confer was made and explaining the reasons why the parties
could not meet and confer.” (Code Civ.
Proc., §430.41, subd. (a)(2).) Failure to sufficiently meet and confer is not
grounds to overrule or sustain a demurrer. (Id., §430.41(a)(4).)
Attorney for Loan
Defendants’ state in the declaration of Dailey at Paragraph 2 that an agreement
was not able to be reached when meeting and conferring.
LEGAL STANDARDS FOR DEMURRERS
Demurrer
– Sufficiency
A demurrer for
sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda, (2007) 147 Cal.App.4th
740, 747.) When considering demurrers,
courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of
Water and Power (2006) 144 Cal.App.4th 1216, 1228.) The court “treat[s] the demurrer as admitting
all material facts properly pleaded, but not contentions, deductions or
conclusions of fact or law ….” (Berkley
v. Dowds (2007) 152 Cal.App.4th 518, 525.)
In a demurrer proceeding, the defects must be apparent on the face of
the pleading or via proper judicial notice.
(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968,
994.) A demurrer tests the pleadings
alone and not the evidence or other extrinsic matters; therefore, it lies only
where the defects appear on the face of the pleading or are judicially
noticed. (Code Civ. Proc., §§ 430.30,
430.70.) The only issue involved in a
demurrer hearing is whether the complaint, as it stands, unconnected with
extraneous matters, states a cause of action. (Hahn, supra, 147
Cal.App.4th at 747.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of
Los Angeles (2007) 42 Cal.4th 531, 550.)
“All that is required of a plaintiff, as a matter of pleading … is that
his complaint set forth the essential facts of the case with reasonable
precision and with sufficient particularity to acquaint the defendant with the
nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp.
(1945) 26 Cal.2d 149, 156-157.)
On
demurrer, a trial court has an independent duty to “determine whether or not
the … complaint alleges facts sufficient to state a cause of action under any
legal theory.” (Das v. Bank of
America, N.A. (2010) 186 Cal.App.4th 727, 734.) Demurrers do not lie as to only parts of
causes of action, where some valid claim is alleged but “must dispose of an
entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.) “Generally
it is an abuse of discretion to sustain a demurrer without leave to amend if
there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349.)
ANALYSIS
Judicial Estoppel
Loan Defendants argue
that the claims in the TAC are barred because Plaintiff was required to
disclose all potential claims on her schedules in bankruptcy cases filed in
2013 and 2015. Loan Defendants argue that since Plaintiff did not disclose any
claims against Loan Defendants as assets in her schedules, the instant claims
are barred.
The
Court does not find this argument availing, as this action pertains to the wrongful
foreclosure of the property in October 2019. Clearly, claims based on events in
2019 would not exist in 2013 and 2015.
First Cause of Action – Wrongful Foreclosure
“To obtain the equitable
set aside of a trustee’s sale or maintain a wrongful foreclosure claim, a plaintiff
must allege that (1) the defendants caused an illegal, fraudulent, or willfully
oppressive sale of the property pursuant to a power of sale in a mortgage or
deed of trust; (2) the plaintiff suffered prejudice or harm; and (3) the
plaintiff tendered the amount of the secured indebtedness or was excused from
tendering.” (Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th
1052, 1062 citing Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89,
112.)
Loan
Defendants properly point out that this claim is barred to the extent it is
based on the alleged breach of loan modifications in 2008 and 2009, as this Court
already sustained the breach of contract cause of action without leave to amend
as to the alleged loan modification.
In
Opposition, Plaintiff states, “The gravamen of this action is that the HSBC
Defendants wrongfully foreclosed on Plaintiff’s home, in violation of an
executed and binding loan modification agreement, based upon excessive and
erroneous claims as to amounts owed and while refusing Plaintiff’s tenders of
sums due. Plaintiff primarily seeks to set aside the subject trustee’s sale,
but in one cause of action, in the alternative, seeks monetary damages.” (Oppo.
p. 2.)
To
reiterate, Plaintiff’s argument is incorrect, it can not base any causes of
actions on wrongfully foreclosing on Plaintiff’s home in violation of an
executed and binding loan modification agreement. The Court already sustained
the breach of contract cause of action pertaining to loan modification without
leave to amend.
As
to Loan Defendants’ argument that the October 4, 2019 trustee’s sale is
presumed valid, this argument is unavailing. The instant case is at the
pleading stage. No fact finding has occurred. Loan Defendants cite: (1) Wolfe
v. Lipsy (1985) 163 Cal.App.3d 633, 639; (2) Hatch v. Collins (1990)
225 Cal.App.3d 1104, 1113; and (3) Taliaferro v. Crola (1957) 152
Cal.App.2d 448. All three of the cases cited by Loan Defendants pertain to the fact
finding stages of litigation. In Wolfe, a court trial occurred, in Hatch,
summary judgment rulings occurred, and in Taliaferro, a trial occurred.
Therefore, Loan Defendants’ argument is not on point.
Loan
Defendants argue that element 2 (prejudice/harm) and element 3 (tender) were
not alleged in the TAC. Loan Defendants’ arguments on these two points are
incorrect. Plaintiff alleged both of these two elements in the TAC at
Paragraphs 50, 51, 52, 68, 86, inter alia.
Loan
Defendants also argue that Plaintiff did not allege element 1 of a wrongful
foreclosure cause of action. It appears that Plaintiff’s TAC is basing its
wrongful foreclosure cause of action on violations of Civil Code 2924c. Loan
Defendants completely ignore the allegations in Paragraphs 59, 60, and 85 in
the TAC. Moving party does not provide any law that Plaintiff cannot base
alleged violations of Civil Code 2924c as the basis for satisfying the illegal
prong in element 1 for wrongful foreclosure. Since Loan Defendants have
provided this Court with no law supporting the sustaining of a demurrer for
wrongful foreclosure on this ground, Loan Defendants’ demurrer as to the first
cause of action for wrongful foreclosure is OVERRULED.
TENATIVE RULING ON FIRST CAUSE OF ACTION:
Loan Defendants’ demurrer as to the first cause of action for wrongful
foreclosure is OVERRULED because Loan Defendants did not provide any case law
to the Court that alleged violations of Civil Code 2924c cannot provide a basis
for the illegal prong under a wrongful foreclosure cause of action. However,
Loan Defendants are correct to note that Plaintiff cannot base its wrongful
foreclosure cause of action, or any causes of action, on an alleged binding and
executed loan modification agreement because the Court already sustained the
demurrer without leave to amend as to the breach of contract cause of action.
Second Cause of Action – Rescission/Cancellation
As a preliminary matter,
it is entirely unclear to this Court what cause of action the Plaintiff is
bringing for its second cause of action. Plaintiff’s second cause of action in
the caption of the TAC is titled “Recission/Cancellation.” Despite the fact that
Recission and Cancellation on their face are two different words which leads to
ambiguity as to what the cause of action Plaintiff is alleging here, Plaintiff
goes on to name its second cause of action as “Rescission/Cancellation of
Trustee’s Deed Upon Sale” in the body of the TAC. To add further confusion,
Plaintiff changes the name of the second cause of action for a third time in
the body of the TAC at Paragraph 88 by stating:
In
order to set aside the Trustee’s Deed Upon Sale due to wrongful foreclosure,
the following elements must be established: (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. (Lona v. Citibank, N.A., supra at 104 citing Bank of America,
etc. Assn. v. Reidy (1940) 15 Cal.2d 243, 248.)
(TAC
¶88.)
Not only does Plaintiff title its second cause
of action three different things, but Plaintiff’s citation to Luna alleges
that the elements of its second cause of action are the exact same as
Plaintiff’s first cause of action for wrongful foreclosure.
In any event, Loan Defendants demur to the
second cause of action for Rescission/Cancellation under two theories.
Loan Defendants argue, “To the extent this claim
is analyzed akin to a wrongful foreclosure claim, as this Court stated in its
prior Order, Loan Defendants incorporate subsections A-H above, and assert that
these claims fail along with the wrongful foreclosure cause of action. The
foreclosure sale was permitted upon Plaintiff’s default.” (Oppo. p. 13-14.) This argument is, however, unavailing as the
Court has overruled Loan Defendants’ demurrer as to the wrongful foreclosure
cause of action.
Nevertheless, Loan Defendants also argue, “The
basis for rescission, either mistake, fraud or duress, must be pled with
specificity. [Stock v. Meek (1950) 35 Cal.2d 809, 815.] Plaintiff does
not allege fraud, mistake, or duress as to Loan Defendants.” (Oppo. p. 13.)
It thus appears to the Court that Loan
Defendants are implying, although it is less than clear, that Rescission is
comprised of different elements than a wrongful foreclosure cause of action.
Therefore, Loan Defendants appear to argue that one element of a rescission
cause of action is either mistake, fraud, or duress. Loan Defendants argue that this was not pled.
Problematic with Loan Defendants’ argument is
that the Loan Defendants do not point the Court to what the elements are for a
rescission cause of action. Loan Defendants’ citation of Stock v. Meek
(1950) 35 Cal.2d 809, 815 is unavailing for two reasons. First, the Court does
not find at Loan Defendants’ citation any language supporting Loan Defendants’
argument. Second, the closest language the Court can find to what the Loan
Defendants alleged the language in the citation to say is as such, “This
complaint states a valid cause of action for recission because of mutual
mistake of law.” (Stock v. Meek (1950) 35 Cal.2d 809, 815.) This
citation does not state that mutual mistake of law is a necessary element for
recission, nor does this citation set forth the elements for recission.
Loan Defendants failed to meet their burden to point the Court to
any case law as a basis for the Court to sustain Loan Defendants’ demurrer as
to the second cause of action for rescission/cancellation.
However,
the Court notes the following case law from Nmsbpcsldhb v. County of Fresno (2007)
152 Cal.App.4th 954, 959:
Section 1688 provides that “A contract is
extinguished by its rescission.” “ ‘[A] party to a contract cannot rescind at
his pleasure, but only for some one or more of the causes enumerated
in section 1689 of the Civil Code.’ ” (McCall v. Superior Court (1934)
1 Cal.2d 527, 538, 36 P.2d 642.)2 The term
“rescission” is not defined in the Civil Code. “Rescission” means to
“restore the parties to their former position.” (Young v. Flickinger (1925)
75 Cal.App. 171, 174, 242 P. 516; accord, Sanborn v. Ballanfonte (1929)
98 Cal.App. 482, 488, 277 P. 152.)
(Nmsbpcsldhb v. County of Fresno (2007)
152 Cal.App.4th 954, 959.)
Further, Civil Code 1689(a)-(b) provides:
(a) A contract may be rescinded if all the
parties thereto consent.
(b) A party to a contract may rescind the
contract in the following cases:
(1) If the consent of the party rescinding,
or of any party jointly contracting with him, was given by mistake, or obtained
through duress, menace, fraud, or undue influence, exercised by or with the
connivance of the party as to whom he rescinds, or of any other party to the
contract jointly interested with such party.
(2) If the consideration for the obligation
of the rescinding party fails, in whole or in part, through the fault of the
party as to whom he rescinds.
(3) If the consideration for the obligation
of the rescinding party becomes entirely void from any cause.
(4) If the consideration for the obligation
of the rescinding party, before it is rendered to him, fails in a material
respect from any cause.
(5) If the contract is unlawful for causes
which do not appear in its terms or conditions, and the parties are not equally
at fault.
(6) If the public interest will be
prejudiced by permitting the contract to stand.
(7) Under the circumstances provided for in
Sections 39, 1533, 1566, 1785, 1789, 1930 and 2314 of this code, Section 2470
of the Corporations Code, Sections 331, 338, 359, 447, 1904 and 2030 of the
Insurance Code or any other statute providing for rescission.
(Civil
Code 1689(a)-(b).)
Here, the Court fails to understand how Plaintiff is alleging a
rescission of a contract. First, the Court is unclear what contract Plaintiff
would be attempting to rescind. Plaintiff makes no reference to a contract,
although it appears Plaintiff is requesting to set aside the trustee’s deed
upon sale due to wrongful foreclosure.
Additionally, the opinion in Nmsbpcsldhb v. County of Fresno (2007)
152 Cal.App.4th 954, 959-960, further notes:
“Rescission” is a “retroactive termination”
of a contract, as compared to “cancellation,”
which is a “prospective termination.” (Barrera v.
State Farm Mut. (1969) 71 Cal.2d 659, 663, fn. 3, 79 Cal.Rptr. 106,
456 P.2d 674.) “The consequence of rescission is not only the termination
of further liability, but also the restoration of the *960 parties
to their former positions by requiring each to return whatever consideration
has been received.”
(Nmsbpcsldhb v. County of Fresno (2007)
152 Cal.App.4th 954, 959-960.)
Here, it appears to the Court that rescission and cancellation would
be different forms of relief as indicated by the statement in Nmsbpcsldhb
that rescission is a retroactive termination of a contract, as compared to
cancellation which is a prospective termination. If rescission and cancellation
are two different things, then it would appear to this Court that Plaintiff’s
allegation of “Rescission/Cancellation” make the second cause of action vague
and ambiguous. Further, the Court again fails to see what contract Plaintiff attempts
to base these claims upon as Plaintiff alleges only that she is trying to set
aside the trustee’s deed upon sale due to wrongful foreclosure, and Plaintiff
does not identify a contract.
The court in Sharabianlou v.
Karp 181 Cal.App.4th 1133, 1144-1145, stated:
The claim authorized by Civil Code section
1692 is one “ ‘based upon ... rescission’ or the disaffirmance of the
contract. The statute does not authorize a claim based upon the affirmance of
the contract.” (Akin v. Certain Underwriters at Lloyd's London (2006)
140 Cal.App.4th 291, 297, 44 Cal.Rptr.3d 284 (Akin ).) The
distinction between disaffirmance and affirmance of the contract has important
consequences when it comes to damages. A party who sues for breach of contract
thereby affirms the contract's existence, and the damages
awarded “compensate[ ] the party not in default for the loss of his
‘expectational interest’—the benefit of his bargain which full performance
would have brought.” (Runyan, supra, 2 Cal.3d at p. 316, fn. 15, 85
Cal.Rptr. 138, 466 P.2d 682.) In contrast, rescission is a remedy that disaffirms the contract. (Akin, at
p. 296, 44 Cal.Rptr.3d 284; see also Lobdell v. Miller, supra, 114
Cal.App.2d at p. 343, 250 P.2d 357 [“The remedy of rescission necessarily
involves a repudiation of the contract”].) Rescission extinguishes the contract
(Civ.Code, § 1688), terminates further liability, and restores the parties to
their former positions by requiring them to return whatever consideration they
have received. (Nmsbpcsldhb v. County of Fresno (2007) 152
Cal.App.4th 954, 959–960, 61 Cal.Rptr.3d 425.) Thus, the “[r]elief given in
rescission cases—restitution and in some cases consequential damages—puts the
rescinding party in the status quo ante, returning him to his
economic position before he entered the contract.” (Runyan, supra, at
p. 316, fn. 15, 85 Cal.Rptr. 138, 466 P.2d 682.)
(Sharabianlou v. Karp 181 Cal.App.4th
1133, 1144-1145.)
As stated above in Sharabianlou, rescission is a remedy
that disaffirms the contract. Here, the Court fails to see how Plaintiff is
attempting to disaffirm a contract. Plaintiff does not identify a contact, and
Plaintiff appears to be seeking to set aside a trustee’s deed upon sale due to
wrongful foreclosure.
TENTATIVE RULING ON SECOND CAUSE OF ACTION:
Loan Defendants’ demurrer as to the second cause of action for
rescission/cancellation is SUSTAINTED without leave to amend. Although Loan
Defendants don’t demur on the grounds of uncertainty, the Court finds the
allegations vague, ambiguous, and uncertain because it is unclear what the basis
for second cause of action is. Additionally, Plaintiff doesn’t appear to allege
any of the bases for rescission under Civil Code 1689(b), and Plaintiff doesn’t
identify a contract she is trying to rescind. Plaintiff has already had four
attempts at properly alleging this cause of action, and it does not reasonably appear
that further leave to amend will result in Plaintiff’s curing the noted
pleading defects.
Third Cause of Action – Declaratory Relief
To state a declaratory relief claim, the
plaintiff must allege a proper subject of declaratory relief and an actual
controversy involving justiciable questions relating to the party’s rights or
obligations. (See Jolley v. Chase Home Finance, LLC (2013) 213
Cal.App.4th 872, 909.) The validity of a contract is a proper subject of
declaratory relief. (See Code Civ. Proc., § 1060.) While declaratory relief
operates prospectively, a proper action for declaratory relief can redress past
wrongs. (See Travers v. Louden (1967) 254 Cal.App.2d 926, 931.)
Under CCP §1060: 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 respect to, in, over or upon property, or with respect to the
location of the natural channel of a watercourse, 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. He or she may ask for a declaration of rights or
duties, either alone or with other relief; and the court may make a binding
declaration of these rights or duties, whether or not further relief is or
could be claimed at the time. The declaration may be either affirmative or
negative in form and effect, and the declaration shall have the force of a
final judgment. The declaration may be had before there has been any breach of
the obligation in respect to which said declaration is sought.
Under CCP §1061, “The court may refuse to
exercise the power granted by this chapter in any case where its declaration or
determination is not necessary or proper at the time under all the
circumstances.”
Here, Loan Defendants argue that declaratory relief is improper if
it relates to a request to redress alleged past wrongs. Loan Defendants cite Travers
v. Louden, the same case the Court also cited above. The Court does not
find Loan Defendants’ argument availing.
Loan Defendants also argue that there is no justiciable
controversy; however, this argument is incorrect. The Plaintiff at the very
least has alleged wrongful foreclosure.
TENTATIVE RULING ON THIRD CAUSE OF ACTION:
Loan Defendants’ demurrer as to the third cause of action for declaratory
relief is OVERRULED.
Fourth Cause of Action – Wrongful Foreclosure
Plaintiff’s “fourth cause of action” isn’t really a separate cause
of action at all. The Court considers its allegations to be part of the First
Cause of Action. Demurring Defendants do
not separately address this “fourth cause of action” in the moving papers.
Demurring Defendants’ Requests for Judicial Notice are Granted. Cal. Evid. Code, sec. 452.