Judge: Helen Zukin, Case: 22SMCV00983, Date: 2022-09-30 Tentative Ruling
Case Number: 22SMCV00983 Hearing Date: September 30, 2022 Dept: 207
Background
The action arises from a loan agreement between borrower
Clarence Ohashi and third-party Mortgage Electronic Registration System, Inc.
secured by a deed of trust for the property located at 411 Westlawn Ave., Los
Angeles, CA 90066. The deed of trust was subsequently transferred to Defendant
Plaza Home Mortgage (“Defendant”) in 2018. Mr. Ohashi passed away in May 2020.
Plaintiff Francine Ohashi (“Plaintiff”) is Mr. Ohashi’s daughter and brings
this action against Defendant in her capacity as administrator of Mr. Ohashi’s
estate alleging several violations of the Homeowner’s Bill of Rights codified
at Civ. Code § 2923.4 et seq. (“HBOR”) in connection with the loan made to her
father. Plaintiff alleges four causes of action against Defendant, for wrongful
foreclosure, violation of Business & Professions Code § 17200, cancellation
of written instruments, and three causes of action alleging violations of the
HBOR.
Defendant brings this demurrer to each of the six causes of
action asserted against it, arguing they fail to state a cause of action and
are uncertain under Code Civ. Proc. §§ 430.10 (e) and (f).
Request for Judicial Notice
Defendants request the Court take judicial notice of six
documents filed with the Los Angeles County Recorder’s Office as well as a
complaint and request for dismissal filed in a prior lawsuit, Los Angeles
Superior Court case number 22STCV09380. Courts can take judicial notice of the
existence of Court records. (Arce ex rel. Arce v. Kaiser Found. Health Plan,
Inc. (2010) 181 Cal.App.4th 471, 483; Schmidlin v. City of Palo Alto
(2007) 157 Cal.App.4th 728, 790 n.10.) This includes the records of any Court
of record in the United States. (Salazar v. Upland Police Dept.¿(2004)
116 Cal.App.4th 934, 946.) However, while Courts may take judicial notice of
official acts and public records, they cannot take judicial notice of the truth
of the matters stated therein. (In re Joseph H.¿(2015) 237 Cal.App.4th
517, 541.) Accordingly, the Court will take judicial notice of the existence
of, recording of, and legal effect of such recorded instruments, and not as to
the truth of any disputed factual matters therein.
Demurrer Standard
When considering demurrers, courts read the allegations
liberally and in context. (Wilson v. Transit Authority of City of Sacramento
(1962) 199 Cal.App.2d 716, 720-21.) 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
pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v.
Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such,
the court assumes the truth of the complaint’s properly pleaded or implied
factual allegations. (Id.) However, it does not accept as true
deductions, contentions, or conclusions of law or fact. (Stonehouse Homes
LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)
A special demurrer
for uncertainty under Section 430.10(f) is disfavored and will only be
sustained where the pleading is so unintelligible that a defendant cannot
reasonably respond—i.e., cannot reasonably determine what issues must be
admitted or denied, or what counts or claims are directed against him/her. (Khoury
v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even
if the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Id.)
Analysis
1. Meet
and Confer Requirement
The Court
finds that Defendant has complied with the meet and confer requirements set
forth under Code of Civil Procedure §§ 430.41. (Chvat Decl. at 1.)
2. Homeowner’s
Bill of Rights
Plaintiff’s
first three causes of action allege violation of the HBOR. Defendant argues
Plaintiff lacks standing to assert violations of the HBOR, arguing Plaintiff is
not the “borrower” as the term is defined by the statute. Defendant also claims
the subject real estate was transferred to the Ohashi Family Trust and is thus
not an asset of Mr. Ohashi’s estate over which Plaintiff, as the estate’s
administrator, is entitled to bring suit over. Defendant also alleges Plaintiff
has failed to sufficiently plead the property is “owner-occupied” as required
by the HBOR.
Plaintiff offers
no response to Defendant’s arguments concerning her residence at the property
or the lack of an ownership interest in the subject property and instead claims
“Pursuant to Civ. Code §2920.7(e)(l), the survivors and heirs have a right of
action for violations of the Homeowner' s Bill of Rights….” (Opp. at 1.) The
Complaint itself also alleges Civ. Code § 2920.7(e)(1) is the basis of
Plaintiff’s standing to assert violations of the HBOR. (Complaint at ¶¶ 20, 25,
34.) However, as Defendant points out, section 2920.7 was repealed effective
January 1, 2020, pursuant to the express terms of former section 2920.7(o),
which stated: “This section shall remain in effect only until January 1, 2020,
and as of that date is repealed, unless a later enacted statute, that is
enacted before January 1, 2020, deletes or extends that date.” Plaintiff thus
cannot rely on section 2920.7 to establish standing to assert violations of the
HBOR. As Plaintiff has not asserted or pled any other basis for standing, the
Court thus SUSTAINS Defendant’s demurrer to the first, second, and third causes
of action in the Complaint for violation of the HBOR with leave to amend.
3. Wrongful
Foreclosure
“The elements of a wrongful foreclosure cause of action are:
(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.” (Citrus
El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal.App.5th 943, 948 [quotations
and brackets omitted].)
Defendant
argues Plaintiff’s claim for wrongful foreclosure fails for the same reasons as
Plaintiff’s causes of action for violation of the HBOR. Defendant also argues
Plaintiff has failed to join an indispensable party, namely 2209 Superior Ave,
LLC (“2209 Superior”).
Defendant’s
Request for Judicial Notice included the Trustee’s Deed Upon Sale recorded
against the property transferring ownership to 2209 Superior. (RJN Ex. 6.)
Plaintiff offers no response as to whether 2209 Superior is an indispensable party
who must be named as a defendant in this action. “A person is an indispensable
party [only] when the judgment to be rendered necessarily must affect his
rights.” (Olszewski v. Scripps Health (2003) 30 Cal. 4th 798, 808-809; Washington
Mut. Bank v. Blechman (2007) 157 Cal.App.4th 662, 667-668.) Plaintiff seeks
to vacate the foreclosure by which 2209 Superior acquired its interest in the
property, and thus the Complaint clearly affects this ownership interest. The
Court thus agrees with Defendant that 2209 Superior is an indispensable party
which must be named as a party to this action.
Accordingly, the Court SUSTAINS
Defendant’s demurrer to this cause of action with leave to amend.
4. Unfair
Business Practices
California’s Unfair Competition Law
(“UCL”), codified at Business and Professions Code section 17200 et seq.,
prohibits “any unlawful, unfair, or fraudulent business act or practice.” (Bus.
& Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th
605, 610.) A UCL plaintiff must plead and prove the defendant engaged in a
business practice which was either unlawful (i.e., is forbidden by law) or
unfair (i.e., harm to victim outweighs any benefit) or fraudulent (i.e., is
likely to deceive members of the public). (Albillo v. Intermodal Container
Services, Inc. (2003) 114 Cal.App.4th 190, 206.) “An unlawful business
practice or act within the meaning of the UCL is an act or practice, committed
pursuant to business activity, that is at the same time forbidden by law.” (Bernardo
v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322,
351.)
Plaintiff’s cause of action under
the UCL is predicated on the violations of the HBOR and thus must stand or fall
with the causes of action under the HBOR. As set forth above, the Court
sustained Defendant’s demurrer to the HBOR causes of action with leave to amend
and the same result follows with respect to Plaintiff’s UCL claim. Accordingly,
Defendant’s demurrer to Plaintiff’s cause of action for unfair business
practices is SUSTAINED with leave to amend.
5. Cancellation
of Written Instruments
“A written instrument, in respect
to which there is a reasonable apprehension that if left outstanding it may
cause serious injury to a person against whom it is void or voidable, may, upon
his application, be so adjudged, and ordered to be delivered up or canceled.”
(Civ. Code § 3412.) To plead a right to cancellation under this section, a
plaintiff must allege that the instrument is “void or voidable” and would cause
“serious injury” if not cancelled. (Saterbak v. JPMorgan Chase Bank, N.A.
(2016) 245 Cal.App.4th 808, 818-819.) To state a cause of action under section 3412,
a plaintiff “must allege the assignment was void or voidable against her.”
(Ibid.)
Plaintiff’s cause of action for
cancellation of written instruments seeks to cancel the Notice of Default and
Notice of Trustee’s Sale recorded against the property. Defendant argues the
Complaint merely alleges in conclusory terms that the two notices are “void or
voidable” without providing factual allegations showing why the notices are
void or voidable. Defendant also argues Plaintiff cannot rely on alleged
violations of HBOR to support her cause of action for cancellation because
Plaintiff does not have standing to sue under the HBOR and the HBOR itself
limits a borrower’s remedy to monetary damages and does not provide for
cancellation as a remedy. Plaintiff does not address these arguments.
The Court agrees with Defendant.
As set forth above, the Complaint does not sufficiently establish Plaintiff’s
standing to sue under the HBOR, and the Complaint does not allege any other
purported basis for cancellation. (Complaint at ¶ 60.) Accordingly, Defendant’s
demurrer to Plaintiff’s cause of action for cancellation of written instruments
is SUSTAINED with leave to amend.
Conclusion
Defendant’s demurrer to Plaintiff’s Complaint is SUSTAINED
with leave to amend as to each cause of action.