Judge James L. Crandall, Case 17-920620 2022-09-08 Tentative Ruling

Judge: James L. Crandall, Case: 17-920620, Date: 2022-09-08 Tentative Ruling

Motion to Set Aside/Vacate

Plaintiff Nancy M. Horner’s Motion to Set Aside/Vacate Defendant The Wolf Firm, A Law Corporation’s nonmonetary status under Civil Code § 29241(e) and Code Civ. Proc. § 473(b) is GRANTED.

Plaintiff’s Request for Judicial Notice is GRANTED.

Pleadings:

The chronology of the pleadings is important.

Verified complaint (filed 5-16-17): By plaintiff Nancy M. Horner against defendants Nationstar Mortgage LLC, The Bank of New York Mellon, as Trustee for Structured Asset Securities Corporation Mortgage Pass-Through Certificate Series 2005-16, The Wolf Law Firm, APC, and Aurora Loan Services, LLC for: (1) wrongful foreclosure; (2) quiet title; (3) cancellation of instruments; (4) slander of title; (5) violation of the HBOR; and (6) violations of the Unfair Competition Law.

Notice of declaration of nonmonetary status (filed 6-16-17): By defendant The Wolf Firm.

Notice of recording of pendency of action (filed 8-25-17).

Answer (filed 12-13-17): By defendants Nationstar Mortgage LLC and The Bank of New York Mellon, as Trustee for Structured Asset Securities Corporation Mortgage Pass-Through Certificate Series 2005-16.

Notice of settlement of entire case (filed 2-21-19).

Order denying defendants’ motion to enforce settlement and granting alternative motion to reset the MSC and trial dates (entered 4-25-19).

Order granting motion for terminating sanctions against plaintiff (entered 7-11-19).

Judgment of dismissal (entered 8-2-19): In favor of defendants Nationstar Mortgage LLC and The Bank of New York Mellon, as Trustee for Structured Asset Securities Corporation Mortgage Pass-Through Certificate Series 2005-16.

Memo of costs (filed 8-19-19): Claiming costs of $19,105.80.

Notice of appeal (filed 9-30-19)

Motion to Expunge Lis Pendens (ROA 345; denied, in part, and deferred, in part 1-16-20)

Motion to Expunge Lis Pendens (ROA 389; vacated 10-26-20)

Judgment affirmed (ROA 405; 6-15-21)

Motion to Expunge Lis Pendens (ROA 412; filed 7-8-21)

Plaintiff’s Petition for Rehearing Denied (ROA 410; 7-13-21)

Plaintiff’s Petition for Review filed with the California Supreme Court (7-26-21)

Remittitur Issued affirming the judgment on 9-30-21.

Plaintiffs claims against The Wolf Law Firm has not been determined/dismissed although the firm does have nominal status.

Analysis

Civil Code § 2924l(a) provides: “In the event that a trustee under a deed of trust is named in an action or proceeding in which that deed of trust is the subject, and in the event that the trustee maintains a reasonable belief that it has been named in the action or proceeding solely in its capacity as trustee, and not arising out of any wrongful acts or omissions on its part in the performance of its duties as trustee, then, at any time, the trustee may file a declaration of nonmonetary status.”

Civil Code § 2924l(c) provides: “The parties who have appeared in the action or proceeding shall have 15 days from the service of the declaration by the trustee in which to object to the nonmonetary judgment status of the trustee. Any objection shall set forth the factual basis on which the objection is based and shall be served on the trustee.”

Civil Code § 2924l(d) provides: “In the event that no objection is served within the 15-day objection period, the trustee shall not be required to participate any further in the action or proceeding, shall not be subject to any monetary awards as and for damages, attorneys' fees or costs, shall be required to respond to any discovery requests as a nonparty, and shall be bound by any court order relating to the subject deed of trust that is the subject of the action or proceeding.”

Civil Code 2924l(e) provides, in relevant part: “Additionally, in the event that the parties elect not to, or fail to, timely object to the declaration of nonmonetary status, but later through discovery, or otherwise, determine that the trustee should participate in the action because of the performance of its duties as a trustee, the parties may file and serve on all parties and the trustee a motion pursuant to Section 473 of the Code of Civil Procedure that specifies the factual basis for the demand. Upon the court's granting of the motion, the trustee shall thereafter be required to participate in the action or proceeding, and the court shall provide sufficient time prior to trial for the trustee to be able to respond to the complaint, to conduct discovery, and to bring other pretrial motions in accordance with the Code of Civil Procedure.”

Bae v. T.D. Serv. Co. of Arizona, (2016) 245 Cal. App. 4th 89, 104–05 states: “Civil Code section 2924l, by its plain language, excuses a trustee from participation in an action after an unchallenged declaration of nonmonetary interest has been filed, subject to limited qualifications, and shields that trustee from liability for monetary damages. Subdivision (d) of Civil Code section 2924l provides that after the filing of such a declaration, a trustee “shall not be required to participate any further in the action or proceeding,” and “shall not be subject to any monetary awards ... for damages....” (Italics added.) An unchallenged declaration thus renders the trustee a nominal defendant not subject to a judgment for damages. Because the filing of an unchallenged declaration in response to the complaint exempts the trustee from participation in the action, it cannot be required to file an answer or other responsive pleading to the complaint in order to avoid a default and a default judgment awarding monetary damages.”

Code Civ. Proc. 473(a) provides, in relevant part: “The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.” In addition, Code Civ. Proc. § 473(b) provides, “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. However, in the case of a judgment, dismissal, order, or other proceeding determining the ownership or right to possession of real or personal property, without extending the six-month period, when a notice in writing is personally served within the State of California both upon the party against whom the judgment, dismissal, order, or other proceeding has been taken, and upon his or her attorney of record, if any, notifying that party and his or her attorney of record, if any, that the order, judgment, dismissal, or other proceeding was taken against him or her and that any rights the party has to apply for relief under the provisions of Section 473 of the Code of Civil Procedure shall expire 90 days after service of the notice, then the application shall be made within 90 days after service of the notice upon the defaulting party or his or her attorney of record, if any, whichever service shall be later. No affidavit or declaration of merits shall be required of the moving party. Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect.”

Code Civ. Proc. § 473(d) provides: “The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.”

Civil Code § 2924l(e) states that plaintiffs may move under Code Civ. Proc. § 473 in order to challenge the declaration of nonmonetary status.

Plaintiff claims that she did not see eye to eye with her former attorney Stephen Lopez. Plaintiff further claims that Lopez did not inform her that he failed to object to or oppose The Wolf Firm’s Declaration Re Non-Monetary Status within fifteen (15) days of the filing thereof pursuant to Civil Code §2924l.

Plaintiff claims that because Lopez,did not object to Wolf’s Declaration Re Non-Monetary Status within fifteen (15) days, Wolf obtained nominal party status as a matter of law. And although she became aware of Lopez’ misstep in 2019, she believed there was no immediate relief available until now.

Based on the foregoing, the Motion is valid as to form.

The Motion is also required to specify the factual basis for the demand. (Civil Code 2924l(e).)

Plaintiff declares: “On or about March 25, 2022, I received a purported Mortgage Statement from Selene Finance via the United States Postal Service. This document states I owe an outstanding balance payable to Selene Finance in the amount of $791,620.78. The Selene Finance Mortgage Statement identifies my Property address and a regular monthly payment due in the amount of $4,880.20.” (Horner Decl. ¶ 3; Ex. 1, a true and correct copy of Selene Finance’s Mortgage Statement.)

Plaintiff brought the Motion on 6-20-22.

Plaintiff contends that the following facts reflected in the Trustee’s Deed Upon Sale are specifically contradicted by the Selene Finance Mortgage Statement Plaintiff received:

(1) BNYM/SASCO 2005-16 purportedly paid $856,726.94 “in lawful money of the United States” to Wolf for the purported purchase of the Property;

(2) Wolf’s purported receipt of $856,726.94 “in lawful money of the United States” from BNYM/SASCO 2005-16;

(3) Wolf purportedly paid off and satisfied the purported Debt Obligation in full; and

(4) BNYM/SASCO 2005-16 purportedly acquired duly perfected title of the sale of real property not a lien as reflected in the Notice of Trustee’s Sale. (RJN, Ex. M.)

Plaintiff contends Wolf neither paid the purported Debt Obligation in full nor recorded a reconveyance of the purported Debt Obligation subject to the Note with the Orange County Recorder’s Office, as asserted in the Trustee’s Deed upon Sale. (RJN Ex. M.)

Plaintiff further contends that Selene Finance Mortgage Statement she received appears to be an attempt to recover purported deficiencies in violation of Code of Civil Procedure §580d(a), which holds: “no deficiency shall be owed or collected, ….. for a deficiency on a note secured by a deed of trust …. on real property …. in which the real property …. has been sold by the …. trustee under power of sale contained in ….. deed of trust.”

On this basis, Plaintiff claims that the auction was a hoax and a sham based on Smith v. Allen, (1968) 68 Cal.2d 93, 96, which states: “[A] properly conducted foreclosure sale should constitute a final adjudication of the rights of the borrower and the lender.”

Defendant, The Wolf Firm, has not opposed the motion.

Further, there is no undue prejudice to defendant in participating in this action. The Wolf Firm can assert whatever affirmative defenses that may apply.

Accordingly, the Court GRANTS Plaintiff Nancy M. Horner’s Motion to Set Aside/Vacate Defendant The Wolf Firm, A Law Corporation’s nonmonetary status under Civil Code § 29241(e) and Code Civ. Proc. § 473(b).

Defendant to file responsive pleading within 30 days of this ruling.

Court clerk to give notice.

Future hearing dates

No future hearing dates