Judge: John J. Kralik, Case: EC064189, Date: 2024-04-19 Tentative Ruling

Case Number: EC064189    Hearing Date: April 19, 2024    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.   Allegations

In this action, Plaintiff The Bank of New York Mellon fka The Bank of New York, as Trustee for the Certificateholders of CWMBS, Inc., Alternative Loan Trust 2006-OA1, Mortgage Pass-Through Trust Certificates, Series 2006-OA1 (“Plaintiff”) alleges that it is and was a mortgaged-backed security and holds a beneficial interest in the Note and Deed of Trust at issue in this action.  The action involves the real property located at 11282 Dona Lola Drive, Los Angeles, CA 91604. 

On January 23, 2006, Defendant Annemarie P. Curry (“Curry”) obtained a $1 million loan from Plaintiff’s predecessor-in-interest, America’s Wholesale Lender, which was evidenced by an Adjustable Rate Note (“Note”) in the original principal amount.  Plaintiff alleges that the Note was secured by a Deed of Trust on the real property.  Plaintiff alleges upon information and belief that the property was quitclaimed to Curry and Defendant Christopher J. Penny (“Penny”) as husband and wife as joint tenants on August 21, 2006.  

Plaintiff initiated this action to allow the subject Deed of Trust to be recorded and Plaintiff’s lien and interest in the property declared in the first/senior position to other outstanding liens as a result of Curry’s default and breach of the Deed of Trust and Note.  The complaint, filed July 8, 2015, alleges causes of action for: (1) quiet title; (2) declaratory and injunctive relief; (3) equitable lien and unjust enrichment; (4) breach of contract; and (5) judicial foreclosure.

B.    Relevant Background and Motion on Calendar

On April 19, 2016, a Joint Stipulation for Entry of Judgment and Judgment was filed with the Court.  The stipulation was signed by the parties and Judge Goldstein. 

On August 8, 2018, Plaintiff filed a motion to amend the Stipulated Judgment.  The motion was not opposed.  On September 14, 2018, the Court granted the motion to amend the Stipulated Judgment, such that the Deed of Trust that was inadvertently not attached as Exhibit A could be included in the Judgment. 

On September 14, 2018, Judge Benny C. Osorio entered the Amended Stipulated Judgment. 

On February 14, 2024, Plaintiff filed this instant motion to amend the Stipulated Judgment.  On April 5, 2024, Defendant filed an opposition brief.  On April 12, 2024, Plaintiff filed a reply brief. 

REQUEST FOR JUDICIAL NOTICE

Plaintiff requests judicial notice of the following Exhibits: (A) the subject deed of trust executed and recorded on January 23, 2006; (B) the complaint filed on July 8, 2015; (C) the Joint Stipulation for Entry of Judgment and Judgment entered on April 19, 2016; (D) Plaintiff’s motion to amend the Stipulated Judgment filed on August 8, 2018; (E) the notice of non-opposition to the motion filed on September 10, 2018; (F) the Order re: Motion to Amend Stipulated Judgment entered on September 14, 2018; and (G) the Amended Stipulated Judgment entered on September 14, 2018 and recorded on September 24, 2018.  The request is granted.  (Evid. Code, § 452(c)-(d).) 

EVIDENTIARY OBJECTIONS

            With the opposition brief, Defendant submitted evidentiary objections.  However, the objections are not in their proper form and do not identify which statements or exhibits the objections are directed to.  To the extent that the objections are generally made to all of the exhibits attached to the request for judicial notice and the motion arguments, the objections are overruled as recorded documents and court records are judicially noticeable documents.  To the extent that Defendant objects to the amendments to the stipulated judgment on its merits, such objections are overruled and are better addressed in the memorandum of points and authorities as opposed to an evidentiary objection. 

LEGAL STANDARD

CCP § 187 states: “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this code.”  Section 187 is an equitable procedure to amend judgments.  (Wells Fargo Bank, N.A. v. Weinberg (2014) 227 Cal.App.4th 1, 8.)

CCP § 726(b) states in relevant part:

(b) The decree for the foreclosure of a mortgage or deed of trust secured by real property or estate for years therein shall declare the amount of the indebtedness or right so secured and, unless judgment for any deficiency there may be between the sale price and the amount due with costs is waived by the judgment creditor or a deficiency judgment is prohibited by Section 580b, shall determine the personal liability of any defendant for the payment of the debt secured by the mortgage or deed of trust and shall name the defendants against whom a deficiency judgment may be ordered following the proceedings prescribed in this section. In the event of waiver, or if the prohibition of Section 580b is applicable, the decree shall so declare and there shall be no judgment for a deficiency.

(CCP § 726(b).) 

DISCUSSION

Plaintiff moves pursuant to CCP § 187 to amend the Stipulated Judgment to include: (a) a statement that there is no deficiency judgment available against Defendant(s); and (b) the current amounts of Defendant AnneMarie Curry’s indebtedness under the Deed of Trust, both of which was inadvertently left out of the Amended Stipulated Judgment entered on September 14, 2018.  Plaintiff argues that a statement indicating whether or not Plaintiff is entitled to pursue a deficiency judgment against the borrower Curry is necessary for a judicial foreclosure under the CCP.  Plaintiff states that it does not intend to pursue a deficiency judgment against Curry and is barred from doing so under CCP § 580b, but instead seeks to execute a foreclosure judgment and conduct a judicial sale of the property in accordance with the terms of the Stipulated Judgment.  Plaintiff argues that it is unable to do so until the Stipulated Judgment is amended to include a statement that Plaintiff may not pursue a deficiency judgment against Curry. 

As a preliminary matter, in the opposition brief, Defendant argues that Plaintiff lack standing because it has not produced the original loan documents and has not shown how it has standing to bring the motion or foreclose on the property.  Defendant also argues that the doctrine of laches applies and bars any amendment to the judgment due to the passage of time and unreasonable delay by Plaintiff to foreclose on the property.  Defendant’s arguments are mostly directed to the merits of the action that should have been litigated prior to the entry of judgment.  Based on the Stipulation, the parties already stipulated that judgment would be entered in Plaintiff’s favor for the quiet title, declaratory and injunctive relief, and judicial foreclosure causes of action; thereby showing that Plaintiff is entitled to seek foreclosure on the property based on the loan documents.  Defense counsel David W.T. Brown states that he intends to bring a motion to set aside the stipulated judgment based on standing and laches and intends to defend the case moving forward.  The Court will determine the basis for Defendant’s motion to set aside the stipulated judgment at that time, but will not prematurely consider the merits of such a request at this time in the motion to amend hearing.

Turning to the substantive merits, according to the Amended Stipulated Judgment, judgment was entered in favor of Plaintiff for its 1^st cause of action for quiet title, 2^nd cause of action for declaratory and injunctive relief; and 5^th cause of action for judicial foreclosure.  (Am. Stipulated Judgment, § 1.)  By stipulation of the parties, the Court ordered and adjudged that: “a. The Subject Deed of Trust executed on January 23, 2006 be given first lien priority in the Property, senior to any other outstanding liens or encumbrances against the Property; and b. Plaintiff’s security interest in the Property is prior and senior to all other liens and/or encumbrances against the Property, and that the Subject Deed of Trust is deemed recorded as of January 23, 2006.”  (Id., § 2.)  Section 3 of the Amended Stipulated Judgment states:

3. As to the Fifth Cause of Action for Judicial Foreclosure, the Court hereby orders and adjudges the following:

a. the total sum of principal, accrued interest thereon, late charges and any applicable pre-payment charges or other charges secured by the Note and Deed of Trust, plus interest calculated at the rate established in the Note, and post-judgment interest as allowed by law;

b. that all rights, claims, ownerships, liens, titles, and demands of all Defendants are subsequent to and subject to Plaintiff’s lien as created by the Subject Deed of Trust;

c. For an adjudication that: (a) the Deed of Trust be foreclosed; (b) that the usual judgment for the sale of the Property according to law by a levying officer to be appointed by the Court; (c) that the proceeds of the sale be applied in payment of the amounts due to Plaintiff; (d) that each of the Defendants and all persons claiming under them after executed of the Subject Deed of Trust, whether lien claimants, judgment creditors, claimants arising under junior mortgages or deeds of trust, purchasers, encumbrances, or otherwise, be barred and foreclosed from all rights, claims, interest or equity of redemption in the Property and residential improvements and every part of the Property when the time for redemption has elapsed;

d. That Plaintiff or any other party to this action be permitted to purchase at the foreclosure sale; and

e. That the Court direct the levying officer, after the time for redemption has elapsed, to execute a deed to the purchaser and that any such purchaser be then let into possession of the Property.

(Id., § 3.) 

            Plaintiff seeks to revise section 3, subsection (a) of the Amended Stipulated Judgment as follows:

a. as of the date of entry of this Judgment, the sums due and owing to Plaintiff under the Subject Deed of Trust are as follows: $___________ in unpaid principal, $___________ in accrued interest thereon, $________ in fees, late charges, and other costs, and $___________ in for escrow funds advanced by Plaintiff;

Plaintiff also seeks to add the following terms as subsections (d) and (e):

d. That no Defendant, including Defendant Curry, shall be personally liable for any deficiency between the sale price and the total amount due to Plaintiff under the Subject Deed of Trust;

e. A deficiency judgment being prohibited, the Property shall be sold by the levying officer as provided in Code of Civil Procedure Section 716.020;

(Mot. at pp.6-7.)  (Based on the proposed Stipulated Judgment, the old subsections (d) and (e) have been moved to new subsections (f) and (g).) 

            The Amended Stipulated Judgment does not state whether Plaintiff has the ability to pursue a deficiency judgment.  Plaintiff argues that the Amended Stipulated Judgment must be amended to include this language as Plaintiff concedes that it is barred from pursuing a deficiency judgment under CCP § 580b because the subject deed of trust arose as part of a refinance of Curry’s prior purchase money loan for the property.  (Def.’s RJN, Ex. B.)  Thus, it argues that pursuant to CCP § 726(b), “[i]n the event of waiver, or if the prohibition of Section 580b is applicable, the decree shall so declare and there shall be no judgment for a deficiency.”  The Court is inclined to grant the motion so that the Amended Stipulated Judgment will be amended at section 3, subsection (e).

            Next, Plaintiff seeks to clarify and update the amount of Curry’s indebtedness under the deed of trust.  Plaintiff argues that the original Joint Stipulation states that as of July 6, 2015, the total amount due on the loan was $1,488,239.88 and that the amount will increase with interest accrual and late charges.  Plaintiff argues that the figures should be updated.  However, Plaintiff has not provided any calculation on the indebtedness, including the amount of interest accrual, late charges, other recoverable costs and advancement assessed, and escrow funds advanced by Plaintiff.  The Court will continue the hearing on the motion and order Plaintiff to file a supplemental brief on this issue. 

CONCLUSION AND ORDER

            The motion to amend the Stipulated Judgment is continued to May 17, 2024 at 8:30 a.m.  By the end of the business day of May 1, 2024, Plaintiff is ordered to file with the Court and serve on Defendant AnneMarie Curry, a supplemental brief (not to exceed 5 pages) discussing in more detail its request to clarify and update the amount of Defendant AnneMarie Curry’s indebtedness under the deed of trust as detailed in the written order.  Defendant may file and serve by the end of the business day of May 9, 2024, a supplemental brief in response, not to exceed 5 pages.