Judge: Loren G. Freestone, Case: 37-2022-00047893-CU-OR-CTL, Date: 2023-12-15 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - December 14, 2023

12/15/2023  10:30:00 AM  C-64 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Loren G. Freestone

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Civil - Unlimited  Other Real Property Demurrer / Motion to Strike 37-2022-00047893-CU-OR-CTL MORGAN VS PENTAGON FEDERAL CREDIT UNION [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING Defendant Impac Mortgage Corp.'s demurrer to Plaintiff Timothy Morgan's first amended complaint is SUSTAINED as set forth below. Impact's motion to strike is DENIED AS MOOT.

First and Fourth Causes of Action Morgan's first cause of action for breach of contract alleges a breach of 'the 2018 Refinance and related agreements' by 'failing to remove the Pen Fed HELOC from Plaintiff's Property.' Morgan's fourth cause of action for promissory estoppel similarly alleges that 'Defendants failed to release the Pen Fed HELOC as contemplated.' An essential element of a breach of contract claim is a contract. (See Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) An essential element of a promissory estoppel claim is a promise. (See Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 416–417.) Here, there is no dispute that Impac fulfilled its obligation to pay off 'the existing encumbrances on the Subject Property, including the outstanding balance on the Pen Fed HELOC.' Although Morgan faults Impac for not also removing the Pen Fed deed of trust, he has not adequately alleged that was a contractual requirement of the 2018 refinance or that Impac otherwise promised that it would. Morgan only alleges that he 'believed' and 'intended' for the Impac deed of trust to become the 'new First Trust Deed mortgage for the Subject Property.' Notably, Impac could not require Pen Fed to reconvey the deed of trust securing the HELOC even after it was paid off unless Morgan provided Impac with a signed a request to close the HELOC-a request that Morgan has not alleged he ever made. (See Civ. Code, §§ 2941, 2943.1, subd. (d)(2); see also Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 947 [a 'lender must close the line of credit and release the lien on the property upon receipt of a payoff and written instructions from the borrowers to suspend and close the line of credit'] [emphasis in original].) The demurrer to the first and fourth causes of action is therefore sustained.

Third Cause of Action Morgan's third cause of action alleges that 'Defendants have violated the provisions of Civil Code section 2924 and 2943 by initiating non-judicial foreclosure proceedings against Plaintiff Timothy Calendar No.: Event ID:  TENTATIVE RULINGS

3009747  37 CASE NUMBER: CASE TITLE:  MORGAN VS PENTAGON FEDERAL CREDIT UNION [IMAGED]  37-2022-00047893-CU-OR-CTL Morgan's Property with inaccurate and incorrect information.' Section 2924 imposes requirements before a nonjudicial foreclosure, including a notice of default and notice of sale. (Civ. Code, § 2924, subd. (a).) Section 2943 requires the beneficiary of a deed of trust (i.e., the lender) to provide a copy of the note, deed of trust, a beneficiary statement, and a payoff demand statement upon request of the trustor (i.e., the borrower). (Id. at § 2943, subds. (b), (c), (e).) Here, the only entity allegedly pursuing a nonjudicial foreclosure is Shellpoint, which Morgan indicates in his opposition acquired the beneficial interest in Impac's loan in October 2021. Morgan does not allege that Impac ever attempted to foreclose, nor does he allege that he ever requested Impac provide him with a beneficiary statement, payoff demand statement, or any other information.

The demurrer to the third cause of action is therefore sustained.

Fifth Cause of Action Morgan's fifth cause of action for quiet title alleges that 'Defendants claim an interest in the Property adverse to Plaintiff' and that the 'claims of said Defendants are without any right whatsoever, except to the extent that they are consistent with the 2018 Refinance transaction, the underlying deeds of trust, and the other dealings of the parties.' 'An element of a cause of action for quiet title is 'the adverse claims to the title of the plaintiff against which a determination is sought.'' (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1010; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 802–803.) A borrower may not 'quiet title against a secured lender without first paying the outstanding debt on which the mortgage or deed of trust is based.' (Lueras v. BAC Home Loans Servicing LP (2013) 221 Cal.App.4th 49, 86.) Morgan alleges that he obtained a refinance loan through Impac that was secured by a deed of trust.

Morgan does not allege that he paid off that loan, and therefore there is no basis to quiet title as to that deed of trust. Moreover, Morgan has not alleged that Impac claims any right to title beyond the deed of trust securing the refinance loan. In fact, as noted above, Morgan concedes that Impac no longer even holds the beneficial interest in the refinance loan-Shellpoint does. Thus, there is no adverse claim by Impac against the subject property, much less one that it has no right to assert.

The demurrer to the fifth cause of action is therefore sustained.

Second Cause of Action Morgan's second cause of action for declaratory relief seeks a 'court determination concerning the deed priorities of the Property's mortgage loans and an accounting of balances due on each loan.' A cause of action for declaratory relief requires an 'actual controversy relating to the legal rights and duties of the respective parties.' (Code Civ. Proc., § 1060.) A claim for declaratory relief may not be alleged against a defendant unless there is a controversy with that defendant, even if there is a controversy with other defendants. (See Greenberg v. Hollywood Turf Club (1970) 7 Cal.App.3d 968, 973, fn. 1.) Here, Morgan concedes Impac transferred its interest in the refinance loan to Shellpoint before this case was even filed. Thus, to the extent Morgan currently has a dispute about the deed priorities and account balances, Impac is not part of that fight.

The demurrer to the second cause of action is therefore sustained.

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3009747  37 CASE NUMBER: CASE TITLE:  MORGAN VS PENTAGON FEDERAL CREDIT UNION [IMAGED]  37-2022-00047893-CU-OR-CTL The demurrer is sustained in its entirety as to the claims against Impac. The court will hear as to whether leave to amend should be granted.

In light of the above, Impac's motion to strike the prayers for attorney fees and punitive damages is denied as moot.

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