Judge Jill Feeney, Case 20STCV45897 2023-01-03 Tentative Ruling

Moving Defendants demur to Plaintiff’s Complaint on the grounds that (1) the Complaint fails to state facts sufficient to sustain causes of action against them and (2) the Complaint is uncertain. Moving Defendants argue they had no duty to maintain the premises in a reasonably safe condition because they were the beneficiary and trustee to a deed of trust with Defendant Pickford Investment Group, the trustor. As the trustee and beneficiary, Moving Defendants did not have ownership, possession, or control of the subject property.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) 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.) 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 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, supra, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally, and allegations contained therein are assumed to be true”].)

Moving Defendants request that the Court take judicial notice of Plaintiff’s Complaint and the Doe Amendment dated August 30, 2022 naming Moving Defendants as defendants in this action. These requests are denied because they are unnecessary. The Court may always refer to the pleadings in the matter at hand.

Under California Evidence Code section 453, the Court shall take judicial notice of any matter specified in section 452 if a party requests it and (a) gives each adverse party sufficient notice of the request to enable such adverse party to prepare to meet the request and (b) furnishes the court with sufficient information to enable it to take judicial notice of the matter. Under California Evidence Code section 452, the Court may take judicial notice, among other things, of official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States and facts, court records, and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy. (§ 452(c), (d), (h).) The Court can take judicial notice of the official acts of a state including records, orders, and reports of its administrative agencies. (Rodas v. Spiegel (2001) 87 Cal. App. 4th 513, 518.) The Court may take notice of matters that cannot reasonably be controverted, even if it negates an express allegation of the pleading. (Columbia Casualty Co. v. Northwestern Nat. Ins. Co. (1991) 231 Cal.App.3d 457, 468–469.)

Here, Moving Defendants cite Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117 and argue that the Court may take judicial notice of the facts flowing from recorded deeds. Poseidon Development still states a court may not take judicial notice of facts that are subject to dispute, even if the facts are included in a recorded deed. (Id.) However, matters such as a recorded deed’s legal effect may be subject to judicial notice. (Id.) Moving Defendants’ request is granted.

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).) “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (Code Civ. Proc., section 430.41(a)(2).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

Counsel for Moving Defendants contacted Plaintiff’s counsel requesting an extension of time to respond to the Complaint. (Sharifi Decl., ¶5.) Counsel also requested to meet and confer with Plaintiff’s counsel telephonically to discuss the matters raised in this demurrer and never received a response. (Id., ¶¶6-7.) Moving Defendants satisfied the meet and confer requirement.

Moving Defendants demur to Plaintiff’s Complaint on the grounds that they had no duty to maintain the premises in a reasonably safe condition because they were the beneficiary and trustee to a deed of trust with Defendant Pickford Investment Group, the trustor. As the trustee and beneficiary, Moving Defendants did not have ownership, possession, or control of the subject property.

“The elements of a cause of action for negligence are well established. They are (a) a legal duty to use due care; (b) a breach of such legal duty; [and] (c) the breach as the proximate or legal cause of the resulting injury.” (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917, internal quotations omitted.) “The first element, duty, may be imposed by law, be assumed by the defendant, or exist by virtue of a special relationship.” (Doe v. United States Youth Soccer Assn., Inc. (2017) 8 Cal.App.5th 1118, 1128, internal quotations omitted.) “[T]he existence of a duty is a question of law for the court.” (Ky. Fried Chicken of Cal. v. Superior Court (1997) 14 Cal.4th 814, 819.)

“The owner of premises is under a duty to exercise ordinary care in the management of such premises in order to avoid exposing persons to an unreasonable risk of harm. A failure to fulfill this duty is negligence.” (Brooks v. Eugene Burger Management Corp. (1989) 215 Cal.App.3d 1611, 1619.) “[P]roperty owners are liable for injuries on land they own, possess, or control. But . . . the phrase own, possess, or control is stated in the alternative. A defendant need not own, possess and control property in order to be held liable; control alone is sufficient.” (Alcaraz v. Vece (1997) 14 Cal.4th1149, 1162.)

Under a deed of trust, the borrower, or trustor, conveys nominal title to a property to a trustee who holds that title as security for repayment of the loan to the beneficiary, the lender. (Miller & Starr, 5 Cal Real Estate (4th ed.2022) § 13:3. Parties.) There is no practical difference between mortgages and deeds of trust in California and the same rules are generally applied to deeds of trust. (Domarad v. Fisher & Burke, Inc. (1969) 270 Cal. App. 2d 543, 553.) Where a mortgage or deed of trust contains a clause which merely includes the rents as a portion of the property pledged to secure a debt, only a security interest passes. (Childs Real Estate Co. v. Shelburne Realty Co. (1943) 23 Cal.2d 263, 268.)

Here, Moving Defendants and Defendant Pickford are parties to a deed of trust, with Bank of the West (“BOW”) as the beneficiary, First Santa Clara Corporation (“FSC”) as the trustee, and Pickford as the borrower. (Moving Defendants’ request for judicial notice, Exh. C.) The Deed of Trust (“Deed”) conferred possession and maintenance of the property to Pickford. The Deed assigned BOW the power of sale, a security interest in the property, leases of the property, and rents from the property. Pickford was also required to inform BOW of construction to the property and was prohibited from removing improvements from the property. BOW also had the right to inspect the property to ensure Pickford’s compliance with the terms of the Deed. BOW’s ability to take possession of the property was contingent upon default. Thus, the Deed only gave BOW a security interest in the property.

With respect to FSC, the Deed conferred the power of sale to FSC. FSC also had the power to join in preparing and filing a map or plat of the property, join in granting easements or other restrictions, and join in any subordination or other agreement affecting the Deed or the lender’s interest in the property.

Moving Defendants cite persuasive authority, including out-of-state authority that is persuasive on the issue of whether mortgagees without possession, such as BOW, owe third parties a duty of care to maintain the property in a safe condition. There is no California case on point as to this issue.

The Deed of Trust between Pickford and Moving Defendants conferred a security interest to BOW. The Deed assigned FSC with the power of sale and other rights pertaining to mapping the property, easements, and subordination. The legal effect of the Deed of Trust cannot be reasonably controverted because the rights were each clearly assigned. Because Pickford alone retained the right to possession and maintenance of the property, Moving Defendants did not have the power to remedy any dangerous condition that might have existed on the property.

The Deed of Trust between Pickford and Moving Defendants directly controverts Plaintiff’s Complaint because Moving Defendants did not have control over the property. The Complaint thus fails to state a cause of action for premises liability. Because the demurrer is sustained on this ground, the Court need not touch on Moving Defendants’ argument that the Complaint is uncertain.