Judge Lisa K. Sepe-Wiesenfeld, Case Number: 23SMCV01102, Date: 2023-09-07 Tentative Ruling

Judge: Lisa K. Sepe-Wiesenfeld, Case: 23SMCV01102, Date: 2023-09-07 Tentative Ruling

Case Number: 23SMCV01102 Hearing Date: September 7, 2023 Dept: N

TENTATIVE ORDER

Plaintiff VIG Private Lending, Inc.’s Motion for Summary Judgment is DENIED.

Plaintiff VIG Private Lending, Inc. to give notice.

REASONING

At the outset, the Court notes that this motion has been subject to several rounds of briefing by both Plaintiff VIG Private Lending, Inc. (“Plaintiff”) and Defendants Raymond Tash and Katrin Tash (“Defendants”). The Court’s ruling herein incorporates all briefing submitted by the parties to date.

Request for Judicial Notice

Plaintiff requests judicial notice of (1) a Notice of Default against Defendants, (2) a Deed of Trust as to the property at 2959 North Beverly Glen Circle, (3) a Notice of Trustee’s Sale in Plaintiff’s favor, and (4) a Trustee’s Deed Upon Sale, transferring title to the property in Plaintiff’s favor. Plaintiff’s request is GRANTED pursuant to Evidence Code section 452, subdivision (h).

Plaintiff also requests judicial notice of the Substitution of Trustee substituting Elite Realty Services Group as Trustee under the Deed of Trust in place of the original Trustee, recorded on

November 2, 2021. Plaintiff’s request is GRANTED pursuant to Evidence Code section 452, subdivision (h).

Legal Standard

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant moving for summary judgment or summary adjudication “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 . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2).) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Med. Ctr. (2008) 159 Cal.App.4th 463, 467.)

“Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “[T]he court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection) . . . in the light most favorable to the party opposing summary judgment.” (Avivi, supra, 159 Cal.App.4th at p. 467; see also Code Civ. Proc., § 437c, subd. (c).)

Analysis

At the outset, the Court notes that in their initial opposition, Defendants ask the Court to deny Plaintiff’s motion because Plaintiff failed to submit a separate statement of undisputed material facts with its motion. A separate statement is not required for motions for summary judgment or adjudication in unlawful detainer actions. (Code Civ. Proc., §§ 437c, subd. (s), 1170.7.) Thus, Plaintiff’s motion is not denied on that basis. Second, Defendants ask the Court to deny the motion because they are still attempting to obtain relevant evidence. While a denial or continuance is proper where a party shows that essential evidence may exist but cannot be presented (Code Civ. Proc., § 437c, subd. (h)), Defendants fail to set forth the essential evidence that may exist but cannot be presented. Defendants state only that they need to complete certain depositions, but they do not describe the information they need in the depositions that will help them oppose this motion. Thus, Defendants’ request to deny or continue on that basis is denied.

In the complaint, Plaintiff alleges that it owns the property at 2959 North Beverly Glen Circle, Los Angeles, California 90077; Defendants are not tenants and have held possession of the premises after the foreclosure sale giving Plaintiff title to the premises; Defendants have failed to provide the terms of any tenancy; and Defendants have failed to deliver possession of the premises since expiration of a notice to quit provided to them. (Compl. ¶¶ 1, 6-8.)

Under Code of Civil Procedure section 1161a, subdivision (b)(3), “a person who holds over and continues in possession of a manufactured home, mobilehome, floating home, or real property after a three-day written notice to quit the property has been served upon the person, . . . may be removed therefrom . . . [w]here the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” Thus, Plaintiff must establish that the property was sold in accordance with Civil Code section 2924, Plaintiff has perfected title to the property, and that Defendants have held over and continued in possession of the property after the three-day notice to quit was served.

Plaintiff provides evidence that its agreed to loan Defendants $620,000 pursuant to a promissory note, and a Deed of Trust was executed against the property to secure the loan. (Mot., Valsky Decl. ¶ 2, Exs. 1, 2.) Defendants failed to repay the loan and default upon the terms of the promissory note, and Elite Realty Services, as the trustee under the Deed of Trust, executed and served a Notice of Default on August 1, 2022, which was recorded as Document No. 20220787416. (Mot., Valsky Decl. ¶ 4, Ex. 3.) Elite Realty Services then served a Notice of Trustee’s Sale on Defendants on November 11, 2022, informing Defendants of the sale date of December 20, 2022, and the Notice of Trustee’s Sale was recorded on November 17, 2022, as Document No. 20221084494. (Mot., Valsky Decl. ¶ 5, Ex. 4.) Plaintiff’s CEO, Vladimir Valsky, reached out to Defendants on December 7, 2022, to offer an extension, and the parties agreed to a 30-day extension to January 25, 2023, upon the exchange of $7,500. (Mot., Valsky Decl. ¶ 6, Ex. 5.) On January 24, 2023, Defendant Raymond Tash informed Valsky that he was attempting to obtain funds to repay his loan and avoid the upcoming foreclosure sale, and the next day, Valsky informed Defendant that Valsky would grant a second extension in exchange for another payment of $7,500 and proof that Defendant was current with his first mortgage. (Mot., Valsky Decl. ¶¶ 7, 8, Ex. 6, 7.) This delayed the sale date to February 1, 2023. (Mot., Valsky Decl. ¶ 8, Ex. 7.) Defendants did not satisfy the conditions of Valsky’s offer of a second extension, and no further extension was granted, so the property was sold on February 1, 2023, by the trustee at the foreclosure auction. (Mot., Valsky Decl. ¶ 9.) A Trustee’s Deed Upon Sale was recorded on February 22, 2023, as Document No. 20230111345. (Mot., Valsky Decl. ¶ 9, Ex. 8.) This evidence allows Plaintiff to establish that the property was sold in accordance with Civil Code section 2924, and title to the property was perfected in Plaintiff’s favor. Thus, the burden shifts to Defendants to create a triable issue of material fact as to this issue.

In their initial opposition, Defendants argue that they entered into an agreement to refinance their loans, and Plaintiff’s CEO assured Defendant he would take no actions in connection with the existing loans, but a notice of default was filed against the property, which sabotaged the refinancing. (Opp’n, pp. 3-4.) Defendants also argue that the sale of the property was a sham, and Plaintiff presented a higher payoff amount. (Opp’n, pp. 4-5.) Notably, Defendants provide only argument to this effect without any supporting evidence; the only document provided by Defendants is a copy of the First Amended Complaint in the related action, Los Angeles Superior Court Case No. 23STCV06014 (The Tash Family Trust, dated November 20, 2014 v. Valsky). It is axiomatic that a triable issue of material fact is created only where the opposing party provides evidence in opposition to the motion, and a pleading is insufficient to make the evidentiary showing required in the summary judgment context. (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 720, fn. 7.)

In their amended opposition, Defendants provide the declaration of Defendant Raymond M. Tash, who states that he paid Plaintiff a cash extension fee of $7,500 to postpone the foreclosure sale, and Defendants argue this violated a duty to not make material misrepresentations about the date, time, or status of a foreclosure sale. (Am. Opp’n, Tash Decl. ¶ 12.) Defendants essentially argue Plaintiff wrongfully foreclosed on the property. To establish a wrongful foreclosure, Defendants must provide evidence that “(1) The trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.” (Citrus El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal.App.5th 943, 948, quotation marks and brackets omitted.) Defendants have presented evidence that Valsky required payment of an extension fee to postpone the sale, Defendants were harmed in reliance on this statement, and they were excused from tendering the amount of indebtedness because Valsky agreed to extend through payment of the extension fee.

Defendants also argue in their pocket brief that the trustee for the original transaction was Stewart Title of California, while an entity named Elite Realty Services Group was responsible for the notice of default, notice of sale, and trustee’s deed upon sale. (Mot., Valsky Decl. ¶¶ 2, 5, 6, 9, Exs. 1, 4, 5, 8.) In a “reply to pocket brief,” Plaintiff provided evidence of a Substitution of Trustee substituting Elite Realty Services Group as Trustee under the Deed of Trust in place of the original Trustee, Stewart Title of California. While reply evidence is generally not permitted for a motion for summary judgment, “a trial court may properly consider new evidence submitted with a reply brief so long as the party opposing the motion for summary judgment has notice and an opportunity to respond to the new material.” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1183, quotation marks omitted.) The Court continued the hearing on the motion after submission of this reply evidence and allowed the parties to submit additional briefing. Thus, the Court considers the reply evidence submitted by Plaintiff.

Notably, the Deed of Trust requires in paragraph 38 that a Substitution of Trustee must include the address of the new trustee and certification of payment by the former trustee for the substitution to be effective. (Mot., Valsky Decl. ¶ 2, Ex. 2.) The Substitution of Trustee does not include either piece of information. While paragraph 38 states that the procedure described is not exclusive of provisions provided by governmental requirements, these requirements are not exclusive of statutory requirements, as Plaintiff argues; instead, the Deed of Trust imposed additional requirements, which does not exclude anything in governmental requirements. This evidence creates a triable issue of material fact as to whether there was a valid sale of the property, thus precluding summary judgment in Plaintiff’s favor, as Plaintiff must establish all elements of its claim under Code of Civil Procedure section 1161a, subdivision (b)(3). Accordingly, Plaintiff VIG Private Lending, Inc.’s Motion for Summary Judgment is DENIED.