Judge: John J. Kralik, Case: 23BBCV02873, Date: 2025-02-21 Tentative Ruling

Case Number: 23BBCV02873    Hearing Date: February 21, 2025    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations of Complaint

Plaintiff Maria Fletcher (“Plaintiff”) alleges that she is the owner of the real property located at 12720 Burbank Blvd., #222, Valley Village, CA 91607, which she uses as her personal, principal residence.  Plaintiff alleges that Defendant Capital Benefit, Inc., (“CBI”) is the current loan servicer of the mortgage loan subject to this action and that Defendant Daniel J. Belshaw (“Belshaw”) is the beneficiary of the mortgage loan.

Plaintiff alleges that on July 22, 2021, she obtained a mortgage loan on the subject property from Belshaw in the amount of $350,000, memorialized by a Deed of Trust (“DOT”) with an undisclosed maturity date.  The DOT lists the trustee as S.B.S. Trust Deed Network (“SBS”).  She alleges that on February 3, 2023, a Notice of Default and Election to Sell Under the Deed of Trust (“NOD”) was recorded.  Plaintiff alleges that on May 11, 2023, a Notice of Trustee’s Sale (“NOTS”) was recorded, which set the date for the sale on June 7, 2023, and the property was sold that date.  Plaintiff alleges that trustee SBS gave her loans, which would make it a conflict of interest and that CBI got the loan approved via SBS.  (Compl., ¶13.)  Plaintiff that she was $15,907.20 in arrears, but was in the process of selling the home to pay off the mortgage and keep equity, and was in a 21-day escrow.  Plaintiff alleges that the lender knew of this arrangement, but continued with the foreclosure.  Plaintiff alleges that SBS was the trustee of several loans taken out by Plaintiff and was aware of the circumstances, but offered no modification or alternatives to foreclosure. Plaintiff alleges she submitted a Complete Request for Mortgage Assistance (“RMA”) to Belshaw and requested a single point of contact (“SPOC”).  She alleges that CBI and Belshaw refused to consider modifying the loan, did not assign a SPOC, there was no written acknowledgement of the RMA with 5 days of receipt, they did not offer any alternatives to foreclosure, and there was no denial letter or right to appeal sent.  (Id., ¶17.)

The complaint, filed December 5, 2023, alleges causes of action for: (1) violation of Civil Code, § 2923.5; (2) violation of Civil Code, § 2923.6(c); (3) violation of Civil Code, § 2923.7; (4) violation of Civil Code, § 2924.9; (5) violation of Civil Code, § 2924.10; (6) wrongful foreclosure; and (7) unfair business practices, violation of Business and Professions Code, § 17200 et seq.

B.     Motion for Summary Judgment on Calendar

            On November 6, 2024, Defendants Capital Benefit, Inc., and Daniel Belshaw filed a motion for summary judgment or in the alternative, summary adjudication, along with a separate statement, a request for judicial notice, and other supporting documents.

            On February 6, 2025, Plaintiff filed her opposition along with a separate statement.

            On February 13, 2025, Defendants filed their reply.

REQUEST FOR JUDICIAL NOTICE

            Defendants requests judicial notice of Exhibits: (A) “Deed of Trust” recorded on or about July 22, 2021, in the Official Records of Los Angeles County as document number 20211132038; (B) “Notice of Default” recorded on or about February 3, 2023, in the Official Records of Los Angeles County as document number 20230071573; (C) “Notice of Trustee’s Sale” recorded on or about May 11, 2023, in the Official Records of Los Angeles County as document number 20230306820; (D) “Trustee’s Deed Upon Sale” recorded on or about July 11, 2023, in the Official Records of Los Angeles County as document number 20230452555; and (E) “Grant Deed” recorded on or about August 11, 2023, in the Official Records of Los Angeles County as document number 20230531622.

The court may take judicial notice of “[o]fficial acts of the . . . executive . . . departments of the United States and of any state of the United States”, and of “[f]acts and propositions that are of such common knowledge within the territorial jurisdiction of the court that they cannot reasonably be the subject of dispute.” (Evid. Code § 452, subds. (c) and (g).) “The court may take judicial notice of recorded deeds.”  (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 (citations omitted).)  The court GRANTS Defendants’ requests for judicial notice in their entirety.

DISCUSSION                                                                                              

A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. (C.C.P. § 437c(a).) To prevail on a motion for summary judgment, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (C.C.P. § 437c(c).) In other words, the opposing party cannot present contrary admissible evidence to raise a triable factual dispute.

“A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (C.C.P. § 437c(p)(2).)

When ruling on a summary judgment motion, the trial court must consider all inferences from the evidence, even those contradicted by the moving party’s evidence. The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal. App. 4th 833, 841.) In determining whether the facts give rise to a triable issue of material fact, "the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true.” (Jackson v. County of Los Angeles (1997) 60 Cal. App. 4th 171, 179.)

With a summary judgment motion, a three-step analysis is required of the trial court. (AARTS Productions, Inc. v. Crocker Nat’l Bank (1986) 179 Cal. App. 3d 1061, 1064–65.) First, the trial court must identify the issues framed by the pleadings since it is these allegations to which the motion must respond by establishing a complete defense or otherwise showing there is no factual basis for relief on any theory reasonably contemplated by the opponent’s pleading. (Id.) Secondly, the court must determine whether the moving party’s showing has established facts which negate the opponent’s claim and justify a judgment in movant’s favor. (Id.) When summary judgment motion prima facie justifies a judgment, the third and final step is to determine whether the opposition demonstrates the existence of a triable, material factual issue. (Id.)

First through Fifth Causes of Action

Defendants argue that Plaintiff’s first through sixth causes of action fail because the evidence shows that the referenced statutes do not apply to Plaintiff’s loan because the loan was for business purposes and was not secured by owner-occupied real property, and the property securing the loan was not occupied by a tenant pursuant to a lease agreement in effect as of March 4, 2020.  (Civ. Code § 2924.15(a)(1).)

In order to be entitled to the relief under the Homeowners Bill of Rights (“HBOR”), the plaintiff must establish that the residential property at issue was owner-occupied at the time the HBOR was violated. (Civ. Code §2924.15(a).) As set forth in section 2924.15(a), enumerated provisions of the HBOR apply only to first mortgages or deeds of trust secured by “owner-occupied” residences containing fewer than five dwelling units. “Owner-occupied” is defined to mean “that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.” (§ 2924.15(a).) Because the designated provisions of the HBOR do not apply unless the residence securing the mortgage is “owner-occupied,” a borrower is ineligible for injunctive relief or damages under the HBOR for a violation of those provisions unless the borrower uses the property securing the mortgage as the borrower’s principal residence.

As evidence that Plaintiff did not live at the subject property, Defendants provided (1) the “Declaration of Non-Owner Occupancy” in which Plaintiff certified that she lived at another address and that the Subject Property was not her “principal residence” (SSUF nos. 2, 3; Bruetsch Decl. ¶5, Exh. 2); (2) the “Business Purpose Loan Application” in which Plaintiff certified that the Subject Property securing the loan was to be an “Investment,” that the property was a “rental unit,” that Plaintiff lived at another address and had done so for four years, and that Plaintiff did not intend to “occupy the property as [her] principal residence” (SSUF nos. 8-13; Bruetsch Decl. ¶ 8, Exh. 5.); and the “Residential Lease or Month-to-Month Rental Agreement,” which represented the subject property to be occupied by tenants and that Plaintiff lived at another address. (SSUF nos. 16, 17; Bruetsch Decl. ¶ 9, Exh. 6.)  Further, the subject loan does not qualify for protections under the Civil Code section 2924.15, sub. (a)(2)(A), standard because the lease that Plaintiff submitted to Defendants shows that the tenants’ lease term began on September 27, 2020, after the statutory cutoff. (SSUF no. 1; Civ. Code § 2924.15(a)(2)(A)(i) [“‘Applicable lease’ means a lease entered pursuant to an arm’s length transaction before, and in effect on, March 4, 2020.”)

Because Defendants have provided evidence which has established facts which negate the opponent’s claims and justify a judgment in movants’ favor, the burden now shifts to the plaintiff to demonstrate the existence of a triable, material factual issue.  However, Plaintiff’s response does not appear to directly address this issue, instead arguing that the complaint is plead with sufficient facts.  Plaintiff does not provide any evidence which could demonstrate the existence of a triable, material factual issue.  The motion for summary judgment/adjudication is GRANTED as to the first five causes of action.

Sixth Cause of Action – Wrongful Foreclosure

Plaintiff’s sixth cause of action for wrongful foreclosure arises out of alleged violations  of Civ. Code §§2923.5, 2923.6(c), 2923.7, 2924.9, 2924.10.  (Compl., ¶¶ 48-54.)  However, for the reasons stated above and based on the evidence provided by Defendants, Plaintiff does not qualify for the protections provided by those code sections.  For that reason, the motion for summary judgment/adjudication is GRANTED as to the sixth cause of action.

Seventh Cause of Action – Unfair Business Practices

Defendants argue that Plaintiff’s claim under the California Unfair Competition Law, Business & Professions Code section 17200, et seq. (the “UCL”). (Compl. ¶¶ 55-67.) Defendants state that undisputed evidence shows that Plaintiff lacks standing under the UCL and cannot state a claim. 

By proscribing “any unlawful” business act or practice, the UCL “borrows” rules set out in other laws and makes violations of those rules independently actionable. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370.) A “violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong.” (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.) Plaintiff must allege a violation of law to support a UCL claim. If there is no violation of another law, defendant cannot be held liable for an “unlawful” business practice. (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 610 [demurrer to SAC which failed to allege violation of a law was properly sustained without leave to amend].)   Here, Plaintiff has alleged violations of the HBOR, which as discussed above, Defendants have provided evidence that it does not apply to Plaintiff.

Additionally, Defendants argue that Plaintiff has no standing under the UCL.  The foreclosure sale of the subject property occurred due to Plaintiff’s default on the subject loan, and not to any alleged actions of Defendants. (SSUF nos. 23-26.)  Defendants note that Plaintiff admits to being delinquent on the loan. (SSUF no. 23; Compl. ¶ 15 [“The borrower was $15,907.20 in arrears […].”].)  Where a borrower cannot dispute her loan default, she has no standing under the UCL because the real property would be subject to foreclosure regardless of any alleged actions of the servicer or lender. (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 523.)

Because Defendants have provided evidence that the implicated code sections do not apply to Plaintiff and that Plaintiff does not have standing under the UCL, the burden shifts to Plaintiff to show the existence of a material triable fact.  However, because Plaintiff failed to provide any evidence regarding this cause of action, the motion for summary judgment/adjudication of this cause of action is GRANTED.

CONCLUSION AND ORDER

Defendants’ motion for summary judgment is GRANTED.

Defendants shall provide notice of this order.

DATED: February 21, 2025                                       ___________________________

                                                                              John J. Kralik

                                                                              Judge of the Superior Court