Judge: Holly J. Fujie, Case: 22STCV10862, Date: 2022-11-21 Tentative Ruling

Case Number: 22STCV10862    Hearing Date: November 21, 2022    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: PHH Mortgage Corporation, Deutsch Bank National Trust Company (collectively, “Moving Defendants”)

RESPONDING PARTY: Plaintiff

The Court has considered the moving, opposition and reply papers. 

BACKGROUND

            This action arises out of foreclosure proceedings taken against real property (the “Property”).  Plaintiff initiated this action by filing a complaint (the “Complaint”) on March 30, 2022.  The currently operative first amended complaint (the “FAC”) alleges: (1) violations of the Homeowners Bill of Rights (“HOBR”); (2) violation of Civil Code section 2923.5; (3) declaratory relief for void deed of trust; (4) declaratory relief for void claim of lien; (5) injunctive relief; (6) intentional misrepresentation; and (7) accounting. 

In relevant part, the FAC alleges: On or about August 11, 2004, Plaintiff executed a first deed of trust (the “DOT”) in favor of Agent Mortgage Company in the principle sum of $734,500.  (FAC ¶ 10, Exhibit A.)  Moving Defendants violated the HBOR: (1) by recording or causing to be recorded a notice of default (the “NOD”) and election to sell without fully informing Plaintiff of the statutory opportunity to seek a loan modification; recording the NOD when Plaintiff had submitted an application for a loan modification; (3) failing to appoint to Plaintiff a single point of contact to provide information about foreclosure alternatives; and (5) providing Plaintiff with written materials about foreclosure prevention and alternatives.  (See FAC ¶ 14.) 

Moving Defendants filed a demurrer (the “Demurrer”) to the first through fifth and seventh causes of action on the grounds that the FAC fails to allege sufficient facts to state a cause of action against them. 

REQUEST FOR JUDICIAL NOTICE

            Moving Defendants’ Request for Judicial Notice is GRANTED.

DISCUSSION

Meet and Confer

The meet and confer requirement has been met.

Legal Standard

A demurrer tests the sufficiency of a complaint as a matter of law.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)  The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.  (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)  With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.  (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.)  A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)   

First and Second Causes of Action

            The first cause of action alleges that Moving Defendants violated several sections of the HBOR, including Civil Code section 2923.5, while the second cause of action alleges Civil Code section 2923.5.  As the second cause of action is duplicative of the first cause of action, the Court will analyze the sufficiency of the allegations in both causes of action concurrently.  

            Moving Defendants argue that these causes of action are barred by res judicata and the statute of limitations.

            The FAC does not state when the NOD or Notice of Trustee’s Sale was executed or recorded.  The original Complaint, however, alleges that the NOD was recorded on March 22, 2016, and the Notice of Trustee’s Sale was recorded on June 27, 2018.  (See Complaint ¶¶ 22-23, Exhibits B-C.)

The admission of fact in a pleading is a judicial admission.  (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 187.)  A judicial admission in a pleading is not merely evidence of a fact; it is a conclusive concession of the truth of the matter.  (Id.)  When a complaint contains allegations that are fatal to a cause of action, a plaintiff facing demurrer cannot avoid those defects simply by filing an amended complaint that omits the problematic facts or pleads facts inconsistent with those alleged earlier.  (Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044.)  Absent an explanation for the inconsistency, a court will read the original defect into the amended complaint, rendering it vulnerable to demurrer again.  (Hendy v. Losse (1991) 54 Cal.3d 723, 743.) 

Moving Defendants argue that although omitted from the FAC, Plaintiff is bound by the NOD and Notice of Trustee’s Sale alleged in and attached to the original Complaint which form the basis for Plaintiff’s HBOR claims.  Plaintiff’s opposition (the “Opposition”) contends that Moving Defendants’ argument on this point is without legal basis.  The Opposition, unlike the Demurrer, however, does not cite to any legal authority to support this argument.  Nor does the Opposition set forth facts to explain the omission of these documents from the FAC.  The Court thus agrees with Moving Defendants and finds that Plaintiff is bound by the NOD and Notice of Trustee’s Sale alleged in the Complaint. The FAC is therefore susceptible to demurrer on any grounds that would appear on the face of the pleading had Plaintiff included the allegations of the NOD and Notice of Trustee’s Sale.

Res Judicata

A demurrer may be brought on the ground that the doctrine of res judicata bars an action.  (See generally Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797-805.)  Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties.  (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.)  Res judicata precludes piecemeal litigation by splitting a single cause of action or relitigation of the same cause of action on a different theory or for different relief.  (Weikel v. TCW Realty Fund II Holding Co. (1997) 55 Cal.App.4th 1234, 1245.)  For res judicata purposes, the central inquiry is not whether identical causes of action were litigated, but whether a party had the opportunity to litigate the causes of action.  (See id.)  Two proceedings are on the same cause of action if they are based on the same “primary right.”  (Federation of Hillside & Canyon Assns. v. City of Los Angeles (2004) 126 Cal.App.4th 1180, 1202.)  For the doctrine of res judicata to apply to a subsequent action, the decision in the prior proceeding must have been final and on the merits.  (Id.)  It is the nature of the action and character of the judgment that determines whether it is res judicata.  (Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1220.)  Where a complaint is dismissed on procedural or technical grounds and the substance of the underlying claim was never tried or determined the doctrine of res judicata does not apply because there was no judgment on the merits.  (Id.)   

The doctrine of res judicata generally precludes parties, or parties in privity with them, from relitigating a cause of action determined with finality in a prior proceeding.  (See, e.g., Smith v. ExxonMobil Oil Corp. (2007) 153 Cal.App.4th 1407, 1413-14; Wright v. Ripley (1998) 65 Cal.App.4th 1189, 1193.)  The doctrine has two aspects: it applies to both a previously litigated cause of action, referred to as claim preclusion, and to an issue necessarily decided in a prior action, referred to as issue preclusion.  (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828; Teitelbaum Furs, Inc. v. Dominion Ins. Co. (1962) 58 Cal.2d 601, 604.)  This distinction is essential, as courts have oft-noted the “seemingly ineradicable confusion over the distinctions between ‘res judicata’ (claim preclusion) and ‘collateral estoppel’ (issue preclusion).”  (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 541 n. 21.) 

Issue preclusion applies only to issues that were actually litigated in the earlier matter; whereas claim preclusion extends to all legal theories, proofs, and demands for relief that might have been presented in the first matter, provided both suits assert the same cause of action.  (Id.) Res judicata (claim preclusion) bars the relitigation not only of claims that were conclusively determined in the first action, but also matter that was within the scope of the action, related to the subject matter, and relevant to the issues so that it could have been raised and includes matters which were raised or could have been raised, on matters litigated or litigable.  (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-75; accord Mark v. Spencer (2008) 166 Cal.App.4th 219, 229 (noting that res judicata bars claims that parties had fair opportunities to litigate).)  Claim preclusion therefore applies as a bar to splitting a cause of action for partial, later litigation, or relitigation of the same cause of action based upon on another legal theory or associated with different relief, that could have been sought in the prior action.  (Noble v. Draper (2008) 160 Cal.App.4th 1, 10.)  The prerequisite elements for determining whether a claim or issue is precluded are the same: (1) a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.  (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829.)

            Plaintiff has filed several lawsuits relating to the foreclosure proceedings described in the FAC.  (See generally RJN, Exhibits 4-18.)   In 2019, Plaintiff filed a complaint in the action styled as Gass v. Ocwen Loan Servicing, LLC, LASC Case No. 19STCV20341 (the “2019 Action”).  (See RJN, Exhibit 13.)  The 2019 Action alleged: (1) quiet title/wrongful foreclosure; (2) damages for severe mental and emotional distress; and (3) declaratory relief.  (See id.)  In the 2019 Action, Plaintiff alleged that Moving Defendants wrongfully foreclosed on the Property in part by violating the HBOR.  (See id. at ¶ 14.)  Moving Defendants filed a demurrer in the 2019 Action that was sustained without leave to amend, and the action was dismissed with prejudice.  (See RJN, Exhibit 14.)

            The Court finds that the first two causes of action are barred based on the dismissal in the 2019 Action.  These claims arise out of the same primary right asserted in the 2019 Action and Plaintiff is not entitled to relitigate them.  (See Gillies v. JPMorgan Chase Bank, N.A. (2017) 7 Cal.App.5th 907, 914-15.)  The Court therefore SUSTAINS the Demurrer to the first to causes of action without leave to amend.

Third and Fourth Causes of Action

            Plaintiff alleges that the DOT is void because it was not signed in the presence of a notary public.  (FAC ¶ 23.)  Plaintiff further alleges that the DOT is also void because the underlying loan was improperly inflated be because of an unsupported claim of lien.  (See FAC ¶ 26.)  

            The Court finds that these two claims are time-barred.  Plaintiff is essentially seeking redress on a breach of contract theory, which has a statute of limitations of four years.  (CCP § 337, subd. (a).)

Both claims are based on facts that were available to Plaintiff when the DOT was executed, and Plaintiff has alleged no facts to support a tolling of the statute of limitations.  The Opposition does not provide facts indicating that this claim can be remedied by further amendment.  The Court therefore SUSTAINS the Demurrer to the third and fourth causes of action without leave to amend. 

Sixth Cause of Action

Injunctive relief is a remedy, not a cause of action.  (Guessous v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187.)   As this is not an independent cause of action, the Court SUSTAINS the Demurrer to the sixth cause of action without leave to amend.

Seventh Cause of Action

An action for an accounting may be brought to compel the defendant to account to the plaintiff for money or property: (1) where a fiduciary relationship exists between the parties; or (2) where, even though no fiduciary relationship exists, the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable.  (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 910.)  A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due to the plaintiff that can only be ascertained by an accounting.  (Id.)

Plaintiff has not alleged the existence of a duty that justifies an accounting.  The Court therefore SUSTAINS the Demurrer to the seventh cause of action without leave to amend.

Moving party is ordered to give notice of this ruling. 

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

  Dated this 21st day of November 2022