Judge: Malcolm Mackey, Case: 22STCV05079, Date: 2023-03-13 Tentative Ruling
Case Number: 22STCV05079 Hearing Date: March 13, 2023 Dept: 55
SHETTY
v.
BLOCK 22STCV05079
Hearing Date: 3/13/23,
Dept. 55
#Add-on: DEMURRER
TO FIRST AMENDED COMPLAINT.
Notice: Okay
Opposition
MP:
Defendants JACK EMREK and SUE EMREK,
individually and as Trustees of the EMREK FAMILY TRUST.
RP:
Plaintiffs
Summary
On 2/9/22, plaintiffs NIKI-ALEXANDER SHETTY et al
filed a Complaint.
On 9/22/22, plaintiffs filed a First Amended
Complaint, alleging the following:
The EMREK defendants purported to retain a security
interest in Plaintiffs’ home, when the security interest and loan documents that
Plaintiff ADINA ZAHARESCU signed with NEW HAVEN FINANCIAL, INC., was to finance
the acquisition of a Chatsworth Property.
The security interest was based on forged changes in
the Note and Deed of Trust that she executed on December 29, 2005, as part of
the loan documents for the Chatsworth Property transaction, which never closed
with NEW HAVEN, but instead with another lender. On or about July 7, 2008, timely, within
three years from the date of the original transaction, Plaintiffs sent a
recission demand, pursuant to the Truth in Lending Act. Defendant THOMAS
BLOCK obtained an assignment of the
altered and forged Deed of Trust from Defendant SUE EMREK, as trustee of the
EMREK FAMILY TRUST, recorded on 7/7/11. The
Deed of Trust was rendered void by Plaintiff’s rescission, and the note was
rendered unsecured. Block has been
foreclosing on plaintiffs’ home pursuant to the altered, forged Note and Deed
of Trust, with a trustee’s sale date of February 22, 2022.
The causes of action are:
1. WRONGFUL FORECLOSURE;
2. QUIET TITLE;
3. CANCELLATION OF
INSTRUMENT;
4. DECLARATORY RELIEF;
5. VIOLATION OF
REGULATION Z OF THE TRUTH IN LENDING ACT;
6. FRAUD;
7. ACCOUNTING;
8. VIOLATION OF THE
UNFAIR BUSINESS PRACTICES ACT.
MP
Positions
Moving party requests an order sustaining the demurrer
to the 5th and 6th claims of the First Amended Complaint,
on grounds including the following:
·
Fifth Cause of Action for Violation
of the Truth In Lending Act and Sixth Cause of Action of the F AC for Fraud: The amended complaint seeks to allege that
the Emreks defendants are "behind the scenes" seeking to enforce the
promissory note by and through co-Defendant Block. But an assignment establishes that the Emreks
are not involved in current enforcement of the Note or the Deed of Trust. The
Emreks no longer had any interest in the Deed of Trust nor the accompanying
promissory note, as both had been assigned to co-Defendant Block. (See
Assignment, F.A.C., Exhibit 5, p. 2).
·
5th Cause of Action: There is a one-year statute of limitations in
which to file an action for damages under TILA. See 15 U.S.C. § 1640(e); Beach
v. Ocwen Fed Bank (1998) 523 U.S. 410,412. Regulation Z was to implement TILA,
and as part of TILA, is subject to its statute of limitations. Plaintiffs received the loan of $77,786.00
on or about January 31, 2006. (FAC, ¶
20.). This action was filed on
February 9, 2022, or more than 16 years later.
·
6th Cause of Action: The statute of limitations for fraud in
California is three years. Code of Civil Procedure §338(d). Plaintiffs were
well aware of any acts allegedly taken by the Emreks to promote this alleged
fraud by 2008, when Plaintiffs received all of the relevant documentation. The
time to file was by 2011 or more than a decade prior to this current
litigation.
RP Positions
Opposing parties advocate overruling, or leave to
amend, for reasons including the following:
·
Although defendants claim that the Emreks
involvement in this matter ended for a time, it is Emreks’ participation in
creation and recordation of false documents and forgery and attempted
foreclosure by transferee defendant Thomas Block in 2022, which is at
issue. The issue here is not whether the
Emreks divested their interest in the promissory note and Deed Of Trust in
2011, it is whether the Emreks have any interest in the first place, in the
unenforceable note and Deed Of Trust that they caused to be altered, forged
prior to recording in the official records of Los Angeles County in violation
of the Truth in Lending Act.
·
This suit and the cause of action for
violation of Regulation Z were brought within one year of the Emreks’ and
Block’s attempts to collect and planned foreclosure date. The Emreks and Block only recently, as of
February 22, 2022, sought to collect and foreclose on the security interest,
which has been rendered unsecured under federal law.
Tentative
Ruling
The demurrer is overruled.
Twenty days to answer.
The First Amended Complaint sufficiently alleges that
demurring parties were still involved.
Judicial notice of an assignment does not necessarily contradict
involvement, since factually, assignors can continue participation.
In ruling upon demurrers, courts treat as being true
“not only the complaint's material factual allegations, but also facts that may
be implied or inferred from those expressly alleged.” Poseidon Development, Inc. v. Woodland
Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-12. Accord Schauer v. Mandarin Gems of Cal., Inc.
(2005) 125 Cal. App. 4th 949, 953.
An assignment does not necessarily preclude all
participation. After an assignment,
assignees take assignors’ rights and remedies subject to any defenses that
obligors had against the assignors before notice of the assignment. Manson,
Iver & York v. Black (2009) 176 Cal.App.4th 36, 49 (“An assignment
transfers the interest of the assignor to the assignee.”); Johnson v. County of Fresno (2003) 111
Cal. App. 4th 1087, 1096. After
assignments, the assignor lacks standing to participate in litigation, except
where assignees expressly consent to prosecution continued by their assignors,
in which case no reversible error occurs.
Cal. Prac. Guide: Civ. Pro.
Before Trial (The Rutter Group 2022) §2:25
(citing Purcell v. Colonial
Ins. Co. (1971) 20 Cal.App.3d 807, 814;
Greco v. Oregon Mut. Fire Ins. Co. (1961) 191 Cal.App.2d 674,
687); CCP § 368.5.
Next, allegations of the timing of actions, do not
necessarily commence a Statute of Limitations, since generally some harm is first
required.
The TILA Statute of Limitations can be as much as 3
years, and extended further by the continuing violation doctrine, if the
complaint alleges a series of unactionable harms. Struiksma v. Ocwen Loan Servicing, LLC
(2021) 66 Cal. App. 5th 546, 559.
A Statute of Limitations does not accrue until the
claiming party was entitled to prosecute an action, which is when the last
element essential to the cause of action has occurred, including appreciable
harm. County of Santa Clara v.
Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 316-17.
“'A demurrer on the ground of the bar of the statute
of limitations will not lie where the action may be, but is not necessarily
barred'.... It must appear clearly and affirmatively that, upon the face of the
complaint, the right of action is necessarily barred.... This will not be the
case unless the complaint alleges every fact which the defendant would be
required to prove if he were to plead the bar of the applicable statute of limitation
as an affirmative defense." Lockley
v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881. Accord State of Cal. ex rel. Metz v. CCC
Information Services, Inc. (2007)149 Cal. App. 4th 402, 413; United W. Medical Ctrs. v. Sup. Ct.
(1996) 42 Cal. App. 4th 500, 505.