Judge: Malcolm Mackey, Case: 23STCV07896, Date: 2023-08-18 Tentative Ruling
Case Number: 23STCV07896 Hearing Date: August 18, 2023 Dept: 55
MAULTSBY
v. BRUETSCH ,
23STCV07896
Hearing Date: 8/18/23,
Dept. 55.
#4: MOTION TO EXPUNGE LIS PENDENS RECORDED BY
PLAINTIFF.
Notice: Okay
Opposition
MP:
Defendant MURAL MEDIA, LLC 401K PLAN.
RP:
Plaintiff.
Summary
On 4/10/23, Plaintiff LINDA MAULTSBY filed a Complaint.
On 7/6/23, Plaintiff filed a First Amended Complaint, alleging:
The lenders, as to her apartment
property at 4757 S. Mansfield, Los Angeles, CA 90026, were defendants MURAL
MEDIA, LLC and S.B.S. TRUST DEED NETWORK that entered into the original loan
and deed of trust while incapable of legally doing business in the State of
California, due to their filing LLC cancellations. Defendants BRUETSCH and CAPITALBENEFIT,
INC., acted as agents for defendants. Other
defendants represented themselves as being the lien holders, thereby fraudulently
inducing Plaintiff to enter into loan modification agreements.
The causes of action are:
1. QUIET TITLE
2. FRAUD
3. BREACH OF CONTRACT
4. NEGLIGENCE.
MP
Positions
Moving party requests an order expunging Plaintiff’s
notice of lis pendens as to the subject real property, and awarding attorneys’
fees and costs in the sum of $8,240.00 (CCP § 405.38), on grounds including the
following:
·
The Lis Pendens is “void and invalid,”
since it does not include a proof of service, evidencing service on Defendant
and all other owners of the Subject Property. RFJN, Exhibit 7; Code Civ. Proc.
§ 405.23 (“Any notice of pendency of action shall be void and invalid as to any
adverse party or owner of record unless the requirements of Section 405.22 are
met for that party or owner and a proof of service in the form and content
specified in Section 1013a has been recorded with the notice of pendency of
action”).
·
Plaintiff five times executed a “release”
of all potential claims, known and unknown, against Defendant and its
co-lenders related to the subject loan, its enforcement, the Subject Property,
the servicing of the loan, and the “foreclosure process.”
·
Plaintiff has not tendered the debt.
·
There was no fraud. The promissory note Plaintiff signed clearly
identified Defendant and its co-lenders as the “Lender” of the subject loan and
Plaintiff expressly agreed to repay the loan to these parties.
RP
Positions
Opposing party advocates denying, for reasons
including the following:
·
Plaintiff believes that she has a validity
to claim ownership and have the preponderance— a likelihood of success at
trial.
·
Plaintiff owns the subject property
because, on June 5, 2023, the Trustee for the lenders, S.B.S., signed and
recorded a Reconveyance of said Property, stating that the Trust Deed has been
fully paid off.
·
The alleged Modifications were in essence
forced upon Plaintiff during a time of immense medical and financial turmoil:
COVID 19.
·
Defendants took advantage of Plaintiff,
not informing her of material facts including increased interest.
Tentative
Ruling
The motion is granted, as prayed, including attorneys’
fees and costs.
Plaintiff failed to address moving party’s request for
judicial notice that the notice of pendency of action lacked an accompanying
proof of service. See Rey Sanchez Invs. v. Superior Ct. (2016)
244 Cal. App. 4th 259, 263 (“Petitioner
has shown the lis pendens real party in interest recorded is “void and invalid”
as to it. (§ 405 .23.) First, no proof of service was recorded with the lis
pendens.”).
Because the issue of a proof of service is dispositive,
the Court need not address that the verified First Amended Complaint suffices
to evidence a probable validity of the claim based on a preponderance of the
evidence, including based upon a recent conveyance of the property by the
Trustee, to Plaintiff, which would support of the claim to quiet title.
When a motion to expunge a lis
pendens is filed, the burden is on the opposing party to show that the complaint
contains allegations of a real-property claim, and to evidence the probable
validity of the claim based upon a preponderance of evidence. CCP §§405.30, 405.32; Kirkeby v. Sup. Ct. (2004) 33 Cal.
4th 642, 648. "Plaintiff may
establish the prima facie merit of his action by competent material allegations
in a verified complaint, by affidavit, or by other proof allowed by the trial
court." McKnight v. Sup. Ct. (1985) 170 Cal.App.3d 291, 299 ("The material allegations of the
verified complaint demonstrate that no valid basis exists for expungement
of the lis pendens on the ground that plaintiff did not present a prima facie
case affecting title to the subject real property."). [Emphasis added.]
In determining if a real property
claim exists, the court must ascertain whether the pleading states a real
property claim, in a demurrer-like analysis.
Park 100 Inv. Group II v. Ryan (2009) 180 Cal.App.4th 795,
808.
The decision regarding the
likelihood that plaintiffs will prevail, as to a motion to expunge, reflects
trial courts’ evaluations of the record, which appellate courts will review for
substantial evidence, but they will not reweigh moving and opposing parties'
conflicting evidence, or adjudge credibility of witnesses. Howard S. Wright Construction Co. v. Sup.
Ct. (2003) 106 Cal. App. 4th 314, 320.
Parties prevailing on motions to
expunge a lis pendens are entitled to recover reasonable attorney fees
associated with making or opposing the motion, unless courts find the other
parties acted with substantial justification, or other circumstances of
injustice. CCP §405.38; Castro v. Sup. Ct. (2004) 116 Cal.
App. 4th 1010, 1018. The fee award goes
only against the losing party and not counsel.
Doyle v. Sup. Ct. (1991) 226 Cal.App.3d 1355, 1359.
Parties prevailing on a motion to
expunge lis pendens should serve and file a proposed order that is suitable for
recording. See CCP §405.60.
Finally, judicial notice of contracts is
improper. E.g., Freemont Indem. Co.
v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
114-15; Aquila, Inc. v. Sup. Ct.
(2007) 148 Cal. App. 4th 556, 571. Materials
prepared by private parties that are on file with governmental agencies, such
as the Secretary of State, are not official records of which judicial notice
may be taken. People v. Thacker
(1985) 175 Cal.App.3d 594, 598-99; Stevens
v. Sup. Ct. (1999) 75 Cal.App.4th 594, 608.
MAULTSBY
v. BRUETSCH ,
23STCV07896
Hearing Date: 8/18/23,
Dept. 55.
#5: MOTION TO STRIKE ANSWER.
Notice: Okay
Opposition
MP:
Plaintiff
RP:
Defendant MURAL MEDIA, LLC 401K PLAN
Summary
On 4/10/23, Plaintiff LINDA MAULTSBY filed a Complaint.
On 7/6/23, Plaintiff filed a First Amended Complaint, alleging:
The lenders, as to her residential
property at 4757 S. Mansfield, Los Angeles, CA 90026, were defendants MURAL
MEDIA, LLC and S.B.S. TRUST DEED NETWORK that entered into the original loan
and deed of trust while incapable of legally doing business in the State of
California, due to their filing LLC cancellations. Defendants BRUETSCH and CAPITALBENEFIT,
INC., acted as agents for defendants. Other
defendants represented themselves as being the lien holders, thereby fraudulently
inducing Plaintiff to enter into loan modification agreements.
The causes of action are:
1. QUIET TITLE
2. FRAUD
3. BREACH OF CONTRACT
4. NEGLIGENCE.
MP
Positions
Moving party requests an order striking a defendant’s
Answer, on grounds including the following:
·
On February 14, 2020, Defendant MURAL
MEDIA, LLC 401K PLAN filed paperwork cancelling and/or terminating its rights,
privileges, powers in California.
·
Defendant does not have the right to
defend itself in this Lawsuit, nor does counsel have the right to defend
Defendant in this matter.
·
A suspended corporation may not prosecute
or defend an action in a California court. Cal. Rev. s Tax Code Section 2330.
RP
Positions
Opposing party advocates denying, for reasons
including the following:
·
Plaintiff’s cited authorities pertain to
laws: (1) governing corporations—not limited liability companies (which is
Defendant’s business entity type); and (2) relating to the suspension of
corporations—not their cancellation.
·
Defendant—a foreign/out-of-state
entity—has no duty to be registered to do business in California since it’s
subject activities solely related to acquiring and holding the interest in a
secured real property loan, the collection on that loan, and the foreclosure of
that loan. Corp. Code § 17708.03, subds. (b)(7) and (8).
·
The cancellation of any such registration
is irrelevant since registration is not required to defend an action. Corp.
Code § 17708.07, subd. (b) (“The failure of a foreign limited liability company
to have a certificate of registration to transact intrastate business in this
state does not prevent the foreign limited liability company from defending an
action or proceeding in this state”).
·
Even if Defendant was totally terminated,
it remains in existence to wind up its affairs, including defending remaining
litigation, like this one. Corp. Code § 17707.06.
Tentative
Ruling
The motion is denied.
Cites case law regarding suspended corporations for
nonpayment of taxes is clearly distinguishable from LLCs not having
certifications of registration. Taxes
are not part of the facts here.
Revenue and Taxation Code "Section 23301
provides, in relevant part, 'the corporate powers, rights and privileges of a
domestic taxpayer may be suspended' if it does not pay its taxes. The
suspension of the corporate powers, rights, and privileges means a suspended
corporation cannot sue or defend a lawsuit while its taxes remain
unpaid." Kaufman & Broad
Communities, Inc. v. Performance Plastering, Inc. (2006) 136 Cal.App.4th
212, 217-18.
According to a treatise summarizing some applicable
statutory sections:
“(5) Consequences of Not
Registering. Without a certificate of registration, a foreign limited liability
company transacting intrastate business in California may not maintain an
action or proceeding in California. (Corp.C. 17708.07(a).) Lack of a certificate
does not, however, prevent the company from defending an action or proceeding
in California. (Corp.C. 17708.07(b).) ”
9 Witkin, Summary 11th Partn. § 188 (2023).