Judge: Gail Killefer, Case: 24STCV15903, Date: 2025-03-05 Tentative Ruling
Case Number: 24STCV15903 Hearing Date: March 5, 2025 Dept: 37
HEARING DATE: Wednesday, March 5, 2025
CASE NUMBER: 24STCV15903
CASE NAME: Vicino Limited Partnership v. Jonathan Menlo, et al.
MOVING PARTY: Defendant MCBY26, LLC
OPPOSING PARTY: Plaintiff Vicino Limited
Partnership
TRIAL DATE: Not Set
PROOF OF SERVICE: OK
PROCEEDING: Demurrer to Complaint
OPPOSITION: 20 February 2025
REPLY: 26
February 2025
TENTATIVE: Defendant MCBY26’s demurrer is sustained
without leave to amend. The court finds that MCBY26 has no interest in the real
property real property located at
329-335 South Rampart Boulevard in Los Angeles, CA and dismisses MCBY26 from
this action.
Background
On December 4, 2024, Plaintiff Vicino Limited Partnership
(“Plaintiff’) filed a Complaint against Jonathan Menlo; Rikki Menlo; Jonathan
Menlo and Rikki Menlo as Husband and Wife; Meir Siboni; Ravit Siboni; Meir
Siboni and Ravit Siboni as a community property estate; MCBY26, LLC (“MCBY26”);
all persons unknown, claiming any legal or equitable right, title, estate,
lien, or interest in the property adverse to Plaintiff’s title, or any cloud on
Plaintiff’s title to the Property; and Does 1 to 50.
The Complaint alleges three causes of action: (1) breach of
guaranty; (2) quiet title; and (3) declaratory relief.
Defendant MCBY26 demurs to the Complaint. Plaintiff opposes the
demurrer. The matter is now before the court.
I. Legal Standard
Where pleadings are defective, a party may raise the defect
by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A
demurrer tests the sufficiency of a pleading, and the grounds for a demurrer
must appear on the face of the pleading or from judicially noticeable matters.¿
(CCP § 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In
evaluating a demurrer, the court accepts the complainant’s properly pled facts
as true and ignores contentions, deductions, and conclusory statements. (Daar
v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971)
5 Cal.3d 584, 591.) Moreover, the court does not consider whether a plaintiff
will be able to prove the allegations or the possible difficulty in making such
proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d
590, 604.)
Leave to amend must be allowed
where there is a reasonable possibility of successful amendment. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 348.)¿ The burden is on the complainant to
show the Court that a pleading can be amended successfully. (Ibid.)
II. Discussion
A. Summary of Allegations
The Complaint alleges that on or about March 18, 2021, Defendants
Jonathan Menlo and Meir Siboni obtained from Plaintiff a business-purpose
mortgage loan secured by a deed of trust on real property located at 329-335
South Rampart Boulevard in Los Angeles, CA (the “Property”). (Compl., ¶ 13.) On
or about November 2023, the Loan went into default and neither borrower nor any
Defendant named in this action cured the Loan default. (Id. ¶ 19.) “At
some point in time after Plaintiff made the Loan, but before the foreclosure
sale was completed, defendant MCBY26, LLC acquired an interest in the Subject
Property.” (Id. ¶ 20.) “Plaintiff alleges the interest of defendant
MCBY26, LLC, if any ever existed, was extinguished by operation of the June 6,
2024 trustee’s sale.” (Ibid.)
On June 6, 2024, “Plaintiff elected to foreclosure [sic] on its
security interest in the Subject Property and conduct a trustee’s sale
(foreclosure sale).” (Compl., ¶ 21.) “At the trustee’s sale there were no
bidders other than Plaintiff who took the property back in the trustee’s sale.”
(Ibid.) “As a result of a
trustee’s sale held on June 6, 2024, Plaintiff holds an interest in the
Property as a fee simple owner” and its Trustee’s Deed dated June 6, 2024, is
“recorded with the Los Angeles County Recorder as document number 20240376192.”
(Id. ¶ 32.) “Plaintiff seeks to quiet title against defendants MCBY,
LLC, and DOES 1 through 50, who may have a claim in the Subject Property by
virtue of a Grant Deed recorded with the Los Angeles Cunty [sic] Recorder on
June 5, 2023, bearing document number 230364483.” (Compl., ¶ 34.) “The claim of
Defendant MCBY, LLC are uncertain/contingent in that MCBY, LLC’s title was
junior to that of Plaintiff when Plaintiff conducted the trustee’s sale on June
6, 2024. As such, MCBY, LLC’s claims are without any right, and Defendant has
no right, title, estate, lien, or interest in the Subject Property or any part
of it.” (Id. ¶ 34.) “After completion of the trustee’s sale, the amount
due, unpaid and owing to Plaintiff under the Loan totaled the sum
$2,883,359.01.” (Compl., ¶ 22.)
B. MCBY26’s Demurrer
Defendant MCBY does not deny the allegations in the SAC and
asserts that Plaintiff has no viable cause of action against MCBY because after
the nonjudicial foreclosure, Plaintiff became the title owner, and all junior interests
were wiped away.
“California has an elaborate and interrelated set of foreclosure
and antideficiency statutes relating to the enforcement of obligations secured
by interests in real property.” (Alliance Mortgage Co. v. Rothwell
(1995) 10 Cal.4th 1226, 1236.) “Pursuant to this statutory scheme, there is
only ‘one form of action’ for the recovery of any debt or the enforcement of
any right secured by a mortgage or deed of trust. That action is
foreclosure[.]” (Id. at p. 1236.)
“As a general rule, the purchaser at a nonjudicial foreclosure
sale receives title under a trustee's deed free and clear of any right, title
or interest of the trustor.” (Moeller v. Lien (1994) 25 Cal.App.4th 822,
831; see Civ. Code §§ 2924-2924k.) “A properly conducted nonjudicial
foreclosure sale constitutes a final adjudication of the rights of the borrower
and lender. [Citation.] Once the trustee's
sale is completed, the trustor has no further rights of redemption.
[Citation.]” (Moeller, at p. 831.)“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.” (Id. at p. 8831; see Civ. Code
§ 2924.)
“Generally speaking, the foreclosure sale extinguishes the
borrower's debt; the lender may recover no deficiency.” (Yvanova v. New
Century Mortgage Corp. (2016) 62 Cal.4th 919, 927.)
“The statutory scheme concerning nonjudicial foreclosure
contemplates that in order to protect its interest, a junior lienor must pay
the trustor's obligation to the senior lienor.” (FPCI RE-HAB 01 v. E & G
Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1023.) “If a junior
lienor does not cure the default in the senior obligation or redeem at the
senior foreclosure, its lien will be extinguished at the foreclosure sale
unless the successful bidder purchases at a price high enough to pay off the
senior indebtedness and the junior indebtedness as well.” (Id.)
Defendant MCBY26 asserts:
After
the nonjudicial foreclosure in which Plaintiff became the title owner, all
junior interests were wiped away. Unless the nonjudicial foreclosure is
challenged, Plaintiff’s Second Amended Complaint seeks nothing more than an
advisory opinion as to some future claim or harm, which California case law
prohibits. For these reasons and as explained below, Defendant’s demurrer
should be sustained without leave to amend.
(Demurrer at p. 4:14-19.)
Plaintiff’s opposition fails to show that Plaintiff did not
acquire the property free and clear after the foreclosure, that disputed issues
of fact exist, or any other reason why this demurrer should not be sustained.
Therefore, the court is inclined to sustain the demurrer without leave to amend
and dismiss the action as to Defendant MCBY26 as MCBY26’s junior interest in
the Property was extinguished by the foreclosure sale on June 6, 2024.
Conclusion
Defendant MCBY26’s demurrer is
sustained without leave to amend. The court finds that MCBY26 has no interest
in the real property real property located at
329-335 South Rampart Boulevard in Los Angeles, CA and dismisses MCBY26 from
this action.