Judge: Jon R. Takasugi, Case: 24STCV09290, Date: 2025-01-27 Tentative Ruling

Case Number: 24STCV09290    Hearing Date: January 27, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ demurrer is SUSTAINED, WITH 15 DAYS LEAVE TO AMEND.

On 4/12/2024, Plaintiff Beatriz Alejandra Brownlee (Plaintiff) filed suit against Bank of America, N.A., National Default Servicing Corporation, the Bank of New York Mellon fka the Bank of New York, the Bank of New York Mellon fka the Bank of New York, trustee on behalf of the noteholders of the CWHEQ, Inc., CWHEQ revolving home equity loan trust, series 2007-G, and Dionicios Properties, Inc.

On 10/10/2024, Plaintiff filed a first amended complaint (FAC) alleging: (1) quiet title; (2) wrongful foreclosure; (3) adverse possession; (4) cancellation of instruments; (5) intentional misrepresentation; (6) negligent misrepresentation; (7) violation of Fair Debt Collection Practices Act; (8) violation of California Homeowner Bill of Rights; (9) declaratory relief.

On 12/27/2024, Plaintiff dismissed her third cause of action for adverse possession.

            On 11/26/2024, Defendant Bank of America, N.A. (BANA), the Bank of New York Mellon fka the Bank of New York (BONY), and the Bank of New York Melon fka the Bank of New York, trustee on behalf of the noteholders of the CWHEQ, Inc., CWHEQ revolving home equity loan trust, series 2007-G (CWHEQ) (collectively, Defendants) demurred to Plaintiff’s Complaint.

Factual Background

Chinnie Brownlee (Borrower) obtained title to the subject property located at 1535 W 70th St, Los Angeles, CA 90047-2033 (the Property) via a Deed transfer recorded against the Property on May 15, 1984.

Borrower was previously married to Priscella Brownlee (Co-Borrower) until her death on January 21, 2010. (FAC ¶19.) The Complaint alleges that Borrower married Plaintiff in May 2011. (FAC ¶ 20.) Borrower died in October 2016. (FAC ¶15, Ex. 1.)

The Borrower and his prior wife, Co-Borrower, obtained a refinance loan (the First Loan) in the amount of $260,000 from America’s Wholesale Lender (AWL), secured by a Deed of Trust (First DOT) recorded against the Property on June 2, 2005. (RJN, Ex. B; FAC ¶25.) Plaintiff alleges that since Borrower’s death, Plaintiff made regular payments on the Primary Loan and “maintained the [Primary Loan] in good standing through December 2023.” (FAC ¶23.)

Borrower and Co-Borrower also obtained a home equity line of credit in the amount of up to $50,000 (the HELOC), secured against the Property by a Deed of Trust and Assignment of Rents (the Second DOT) recorded against the Property on January 20, 2006. (RJN, Ex. C; FAC ¶27.) The beneficiary listed in the 2nd DOT was Mortgage Electronic Registration Systems, Inc. (MERS). (RJN, Ex. C.)

On June 25, 2012, an Assignment of Deed of Trust was recorded, reflecting that the beneficial interest in the Second DOT was assigned to CWHEQ. (RJN, Ex. D.) On December 1, 2022, a Substitution of Trustee was recorded, reflecting that National Default Servicing Corporation (NDSC) had been substituted as the trustee of record for the 2nd DOT. (RJN, Ex. E.)

On December 1, 2022, NDSC recorded a Notice of Default and Election to Sell Under Deed of Trust (NOD), reflecting that the HELOC was $45,744.10 in arrears as of November 25, 2022. (FAC Ex. 2.) On March 15, 2023, NDSC recorded a Notice of Trustee’s Sale (the NOTS). (FAC Ex. 3.) Plaintiff claims that she “had no knowledge that the Second [DOT] existed until” the NOTS was “posted on the front door of the Property” around this time period. (FAC ¶29.)

On November 22, 2023, a Trustee’s Deed Upon Sale (the TDUS) was recorded reflecting that a trustee’s sale of the Property had occurred on September 25, 2023, at which point title to the Property reverted to CWHEQ. (FAC Ex. 4.)

On March 1, 2024, a Grant Deed was recorded, reflecting that title to the Property had been transferred to Dionicios Properties LLC (Dionicios). (FAC Ex. 5.) On March 21, 2024, a Deed of Trust, Security Agreement and Fixture Filing was recorded, reflecting that Dionicios had obtained a $460,275 loan from Center Street Lending VII SPE, LLC. (RJN, Ex. F.)

Discussion

Defendants argue that Plaintiff has failed to state a claim as to each cause of action. For consistency, the Court addresses the causes of action in the same order as Defendants’ motion.

Plaintiff’s eighth cause of action, which serves as the underlying basis for nearly all of her other claims, is for alleged violations of California’s HBOR. Defendants argue that Plaintiff is unable to establish an HBOR violation for two reasons: (1) Plaintiff’s claims for alleged violations of sections 2923.55 and 2924.9 fail because Plaintiff had not assumed the loan at the time of the NOD recording; and (2) the HBOR is inapplicable to the HELOC and Second DOT.

After review, the Court agrees.

Plaintiff was not a borrower; Chinnie and Pricella Brownlee were. (See, FAC, ¶27; RJN, Ex. C.) Plaintiff’s FAC also admits that she did not immediately assume the HELOC after the Borrower’s death; she recorded an affidavit of Death of Joint Tenant on June 5, 2023. (FAC, ¶33, Ex. 3.) Since Plaintiff was not a “borrower” at the time of the recording of the NOD and had not assumed the HELOC (or even applied to assume the HELOC), Civil Code sections 2923.55 and 2924.9 are inapplicable to Plaintiff as a matter of law. Plaintiff cannot support a HBOR claim based upon purported violations of these statutes. (Deck v. Wells Fargo Bank, N.A. (E.D. Cal. 2017) 2017 WL 2505193, at *3 (“Only borrowers have standing to assert claims for violation of the California Homeowner's Bill of Rights.”); citing Green v. Central Mortgage Co. (N.D. Cal. 2015) 2015 WL 5157479, at *4 [collecting case authorities].)

Second, Civil Code section 2924.15 provides: (a) Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924 and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.18 shall apply only to a first lien mortgage or deed of trust …”

Here, the Second DOT is not a first priority lien, as admitted by the FAC. (See, FAC, ¶27.) Because the HELOC is not “a first lien mortgage or deed of trust,” Sections 2923.55, 2923.7, and 2924.9 are inapplicable as a matter of law. (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal. 5th 905, 921–22 (“Because the loans at issue in this case were junior loans ... HBOR does not apply”).)

As for the seventh cause of action for violation of Fair Debt Collection Practices Act (FDCPA), Plaintiff alleges that BANA violated the FDCPA because the Second DOT was “time-barred” when the trustee’s sale occurred. (FAC, ¶¶81-85.)

However, California Courts have held that non-judicial foreclosures are governed by California Civil Code §§ 2911 and 882.020. (Ung v. Koehler (2005) 135 Cal. App. 4th 186, 190.)

As such, the statute of limitations to enforce a deed of trust in California:

 ‘expires 10 years after the maturity date of the obligation if that date “is ascertainable from the record,’ or 60 years after recordation of the deed, if ‘the last date fixed for payment of the debt ... is not ascertainable from the record.’

            (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1708–1709 (quoting Civ. Code § 882.020(a)-(b); see also, Nicolopulos v. Super. Ct. (2003) 106 Cal.App.4th 304, 312; Trenk v. Soheili (2020) 58 Cal.App.5th 1033, 1044.)

As both Miller and Nicolopulos held, the language of section 882.020 indicates that the statute was intended to end the unrestricted enforceability of a power of sale in deeds of trust by placing a time limit of either 10 or 60 years, as applicable, on the power's enforcement. (Ung, supra, 135 Cal.App.4th at 198.)

Since the Second DOT in this case does not identify the maturity date for the HELOC, the Second DOT is enforceable for sixty years from the date of the Second DOT recording. (Civ. Code § 882.020(a)-(b); Miller, supra, 26 Cal.App.4th at 1708–1709; Nicolopulos, supra, 106 Cal.App.4th at 312; Trenk, supra, 58 Cal.App.5th at 1044; Ung, supra, 135 Cal.App.4th at 198.) The power to conduct a nonjudicial foreclosure sale on the Second DOT therefore would have lapsed January 20, 2066, had the trustee’s sale not occurred. (Id.) Plaintiff must allege facts which could show otherwise.

As to the claim for quiet title, a quiet title complaint must be verified and include all of the following: (a) A description of the property that is the subject of the action, including both its legal description and its street address or common designation; (b) The title of the plaintiff as to which a determination is sought and the basis of the title; (c) The adverse claims to the title of the plaintiff against which a determination is sought; (d) The date as of which the determination is sought; and (e) A prayer for the determination of the title of the plaintiff against the adverse claims. (Code of Civ. Proc. §761.020.) A non-judicial foreclosure sale “is accompanied by a common law presumption that it ‘was conducted regularly and fairly.’” (Melendrez v. D & I Investments (2005) 127 Cal.App.4th 1238, 1258.)

Here, Plaintiff has failed to allege (a) the legal description of the Property; and/or (b) her legal title to the Property as to which a determination is sought and the basis of the title. (FAC., generally; Code Civ. Proc. §761.020.) In fact, Plaintiff’s Complaint admits that “Probate of [Borrower’s] estate is currently pending in Los Angeles Superior Court,” which apparently had yet to grant Plaintiff legal title to the Property at the time of the trustee’s sale. (FAC., ¶22.)

Moreover, Plaintiff fails to allege a basis to establish that her claim to title was, or is, superior to that of the now foreclosed upon Second DOT (or First DOT for that matter), other than her previously discussed HBOR claim. (See, FAC., generally.) Neither reversing a trustee’s sale nor stripping a lien from title to a property are valid HBOR remedies. (See, Civ. Code § 2924.12.) As such, Plaintiff has failed to allege facts which could “show [Plaintiff's] title free and clear of the first deed of trust”—as necessary to establish superior title. (Debrunner v. Deutsche Bank Nat'l Trust Co. (2012) 204 Cal.App.4th 433, 444.)

As to the claim for wrongful foreclosure, this claim is derivative of Plaintiff’s HBOR and FDCPA claims. For reasons set forth above, Plaintiff has failed to allege sufficient facts to support this claim.

As for the adverse possession claim, Plaintiff dismissed this claim.

As for the cancellation of instruments cause of action, this claim is derivative of her HBOR claim and fails for the reasons set forth above.

As for the misrepresentation claims, Plaintiff’s FAC admits the alleged misrepresentation was not made to Plaintiff. Her misrepresentation claims are instead based on the Declaration attached to the NOD, which she claims misrepresented that BANA contacted the Borrower prior to the trustee’s sale, as BANA did not contact Plaintiff. ((FAC, ¶¶72-73, 78-79.) Here, Plaintiff was not the Borrower. The statement in the NOD declaration was not actually made to Plaintiff -- the Complaint alleges Plaintiff did not even receive the NOD. (FAC, ¶¶30-32.) Since this alleged misrepresentation was not made to Plaintiff, it cannot serve as a basis for her misrepresentation claims as a matter of law. (Security Officers Service, Inc. v. State Compensation Ins. Fund (1993) 17 Cal.App.4th 897, 899) (“In other words, the plaintiff is the person to whom the misrepresentation must have been made, and it is the plaintiff who must have relied on the misrepresentation to [her] damage.”) Moreover, Plaintiff here admittedly did not rely upon the alleged misrepresentation in the NOD, since she claims she did not even know of the existence of the HELOC and/or Second DOT until approximately four months later when the NOTS was recorded. (FAC, ¶¶30-32.)

Finally, Plaintiff seeks declaratory relief based upon the alleged HBOR violation committed by Moving Defendants. (See, FAC ¶¶89-96.) For reasons set forth above, Plaintiff has not sufficiently alleged an HBOR violation.

            While many of Plaintiff’s claims appear to fail as a matter of law, Plaintiff will be afforded a final opportunity to allege additional facts which could show that they are not.

Based on the foregoing, Defendants’ demurrer is sustained, with 15 days leave to amend.

It is so ordered.

Dated:  January    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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