Judge: Deirdre Hill, Case: 22TRCV0607, Date: 2022-09-13 Tentative Ruling

Case Number: 22TRCV0607    Hearing Date: September 13, 2022    Dept: M

Hearing Date:                          September 13, 2022

Moving Parties:                      Defendants PHH Mortgage Services, Deutsche Bank National Trust Company as trustee for CSAMP Trust 2006-HE1, and Western Progressive LLC

Responding Party:                  Plaintiff Emily Gaddi

Demurrer to Complaint

The court considered the moving, opposition, and reply papers.

RULING

            The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the complaint and the 1^st through 4^th causes of action.

BACKGROUND

On July 25, 2022, Emily Gaddi (self-represented) filed a complaint against PHH Mortgage Services, Deutsche Bank National Trust Company as trustee for GSAMP Trust 2006-HE1, and Western Progressive, LLC for “COVID-19 state and foreclosure and moratoriums and stays; failing to review borrowers’ applications for loss mitigation options within 30 days; charging unauthorized amounts; and violation of Homeowner’s Bill of Rights.”

On August 10, 2022, the court issued a TRO based on the allegation of accounting error only.

LEGAL AUTHORITY

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.  “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.”  SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.  “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 v. Mirda (2007) 147 Cal. App. 4th 740, 747.

DISCUSSION

Defendants demur to the 1^st through 4^th causes of action in the complaint on the grounds that they fail to state sufficient facts to constitute a cause of action and are uncertain.

Procedurally, the court finds that the complaint is defective.  Plaintiff failed to comply with Cal. Rules of Court, Rule 2.112 as to separately stating each cause of action by number, its nature, and as to whom it is directed.

Defendants present the following judicially-noticed documents:

Exh. 1 – Deed of Trust recorded on October 13, 2005, indicating that plaintiff obtained a loan secured by her real property at 3605 Hidden Lane, #107, Rolling Hills Estates, CA 90274.

Exh. 2 – Docket of bankruptcy filed on July 8, 2015.

Exh. 3 – Docket of bankruptcy filed on February 23, 2016.

Exh. 4 – Docket of bankruptcy filed on April 27, 2016.

Exh. 5 – Docket of bankruptcy filed on October 19, 2016.

Exh. 6 – Docket of bankruptcy filed on May 16, 2017.

Exh. 7 – Docket of bankruptcy filed on July 23, 2018.

Exh. 8 – Docket of bankruptcy filed on November 7, 2018.

Exh. 9 – Docket of bankruptcy filed on September 30, 2019.

Exh. 10 – Docket of bankruptcy filed on March 22, 2022.

Exh. 11 – Proof of claim in bankruptcy case filed on April 27, 2022 by Deutsche Bank stating that amount of the claim that is secured is $485,679 and the amount in arrears and explaining debt calculation and payment history.

Exh. 12 – Schedules in bankruptcy case.

Exh. 13 – Voluntary Petition in bankruptcy case.

Exh. 14 – Docket in federal case filed on March 15, 2018.

Exh. 15 – Complaint filed in YC072314 by plaintiff against Mila, Inc. and Western Progressive, LLC for unfair business practices and declaratory relief and quieting title to real property, which was removed to district court.

Exh. 16 – Minute order in federal case filed on March 15, 2018, dismissing for failure to oppose.

Exh. 17 – Docket in case no. 19TRCV00369 filed on April 18, 2019.

Exh. 18 – Complaint in 19TRCV00369 against Ocwen Loan Servicing, Deutsche Bank National Trust, and Western Progressive for violation of Civil Code §2924.17, negligence, cancellation of instrument, violation of Bus. & Prof. Code §17200, lack of title and standing (Civil Code §2924(a)(6)), and violations of HBOR.

Exh. 19 – Ruling in 19TRCV00369 sustaining demurrer without leave to amend on the ground that all the causes of action are barred by judicial estoppel.

Exh. 20 – Notice of Default recorded on April 9, 2015.

Judicial estoppel

Defendants argue that the complaint is barred by judicial estoppel.  Defendants assert that plaintiff asserted in a bankruptcy that she had no claims against third parties.  RJN, Exh. 12, at 9.  “[T]he Bankruptcy Code and Rules impose upon bankruptcy debtors an express, affirmative duty to disclose all assets, including contingent and unliquidated claims. . . . ‘ [A] debtor is required to disclose all potential causes of action.’ . . . ‘The debtor need not know all the facts or even the legal basis for the cause of action; rather, if the debtor has enough information . . . to suggest that it may have a possible cause of action, then that is a “known” cause of action such that it must be disclosed.’ . . . ‘Any claim with potential must be disclosed, even if it is “contingent, dependent, or conditional.”’” Gottlieb v. Kest (2006) 141 Cal. App. 4th 110, 133.  A debtor who fails to disclose a legal claim on his bankruptcy schedules may be judicially estopped from asserting the claim in a subsequent proceeding.  See Hamilton v. State Farm Fire & Cas. Co. (9^th Cir. 2001) 270 F.3d 778, 782; Gottlieb, supra, at 137.

In opposition, plaintiff argues that she should not be estopped because there is “good faith” behind the complaint.

In reply, defendants reiterate that the action is barred by judicial estoppel and that plaintiff is not acting in good faith.

Res judicata

Defendants argue that the complaint is barred by res judicata.  Defendants assert that as in the present action, plaintiff previously alleged that defendants were foreclosing in violation of HBOR.  See case no. 19TRCV00369.

In opposition, plaintiff claims that she is not barred.

In reply, defendants reiterate their argument that whether the claims are the same is judged based on the primary right theory and the existence of a continuing violation is barred, citing to Pollock v. University of Southern California (2003) 112 Cal. App. 4^th 1416.

            1^st cause of action for “COVID-19 State Foreclosure and Moratoriums and Stays”

            Plaintiff alleges that PHH “never contacted the Plaintiff regarding Homeowner Assistance Fund.” 

            Defendants argue that the American Rescue Plan Act provides the money to the states and plaintiff has to apply through the California Housing Finance Agency.  Further, defendants contend, there is no requirement that defendants assist plaintiff with third-party relief options.

            The court finds that the allegations are insufficient to constitute a cause of action and plaintiff has not shown how she can amend.

            The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND.

            2^nd cause of action for “Failing to Review Borrowers’ Applications for Loss Mitigation Options Within 30 Days” and 3^rd cause of action for “Violation of Homeowner’s Bill of Rights”

Plaintiff alleges that she spoke to defendant’s customer relations on February 9, 2021 and that the account manager was supposed to call back “regarding ways to prevent foreclosure” but that no one called her back and that there was no review on borrowers’ application for loss mitigation from 2020 to date. 

Defendants contend that although plaintiff recites the provisions of HBOR without alleging what, how, and when it was violated.  Defendants further argue that HBOR only applies to first position deeds of trust secured by the borrower’s primary residence or property occupied by a qualifying tenant but that judicially-noticed documents indicate that the property is not plaintiff’s primary residence.  See RJN, Exh. 13.  Also, defendants assert, a borrower in bankruptcy does not qualify for HBOR.  See Civil Code §2920.5(c)(2)(C).

            In opposition, plaintiff contends that she had submitted a complete application for a modification to MILA in 2016, but the court notes that MILA is not a defendant.  Plaintiff contends that MILA was the parent company of Ocwen, which “later acquired PHH Mortgage.”  She also contends that PHH assigned a single point of contact on July 29, 2022 but that she has yet to receive a loan modification package from PHH.

            In reply, defendants argue that plaintiff has not shown how HBOR is applicable.

            The court finds that the allegations are insufficient as to defendants and fail to state a claim.  Plaintiff has not shown how she can amend.

            The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the 2^nd and 3^rd causes of action.

            4^th cause of action for “Charging Unauthorized Amounts”

            Plaintiff alleges that she received a payoff quote for $477,000 and “How did that happen?  Plaintiff is not an accountant and not very good in numbers. . . . There are [sic] no clear accounting as far as the total bill.” 

            Defendants argue that the allegations that plaintiff is not good with math or cannot comprehend how the total debt was calculated are insufficient to constitute a cause of action.  Further, defendants assert, they provided an accounting as to how the balance of the loan exceeded $480,000, which plaintiff acknowledged in her most recent bankruptcy filing.  See RJN, Exhs. 11-12.

            Plaintiff does not address this purported cause of action in the opposition.

            The court finds that the allegations are insufficient as against defendants and plaintiff has not shown how she can amend.

            The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND.

            Defendants are ordered to give notice of ruling.