Judge: Mark A. Young, Case: 21SMCV00756, Date: 2024-02-06 Tentative Ruling

Case Number: 21SMCV00756    Hearing Date: February 6, 2024    Dept: M

CASE NAME:                       Sunrise Projects, LLC v. Allstar Financial Services Inc. et al.

CASE NO.:                            21SMCV00756 [c/w 21SMCV01011 and 21STCV23459]

MOTION:                              Cross-Defendant Allstar Financial Services, Inc. Motion for Summary Judgment

HEARING DATE:                2/06/2024

Background

            This case arises from the sale of real property located at 2478 Glyndon Avenue, Los Angeles, CA 90291. Defendant/Cross-Defendant Allstar Financial Services, Inc. (“Allstar”), the lender on a loan secured by the property, sought to sell the property at a non-judicial foreclosure sale. Plaintiff Sunrise Projects, LLC (“Sunrise”) and Cross-Complainant Alvin Cox (“Cox”) each claim to be the highest bidder for the property under the provisions of a recently enacted statutory scheme which changes the procedures for certain non-judicial foreclosure sales as codified by the Legislature at Civil Code § 2924m. The property and Defendant Allstar’s attempted sale have given rise to multiple lawsuits which have been consolidated in whole or in part with this action.

            Cox initiated his own action against Allstar, Case No. 21SMCV01011, and has filed a Cross-Complaint in this 21SMCV00756 action. Allstar now moves for summary judgment on the sole cause of action for quiet title asserted against it in Cox’s Cross-Complaint in the 21SMCV00756 action.

            By way of background, on January 24, 2023, in the 21SMCV01011 action, the Court granted Allstar’s motion for summary judgment as to Cox’s First Amended Complaint, finding Cox could not claim the benefit of section 2924m because he had not complied with the statutory requirements of section 2924m in tendering his bid to Allstar.

            On March 16, 2023, in this action, the Honorable Helen Zukin heard oral argument on cross-defendant Allstar’s motion for summary judgment as to the cross-complaint filed by Cox. After argument, the Court took the matter under submission. Subsequently, and in light of the appeal filed by Cox on March 14, 2023 in connection with the 21SMCV01011 action, the Court stayed ruling on the motion pending resolution of Cox’s appeal. That appeal was dismissed on July 18, 2023. Now, having considered the moving, opposing, and reply papers as well as oral argument, the Court rules as follows.

Basis for summary adjudication

This motion for summary judgment is predicated on two arguments. First, Allstar argues that Cox had failed to satisfy the statutory requirements imposed by Civil Code § 2924m, in accord with the Court’s earlier ruling in 21SMCV01011. Second, Allstar also argues that Civil Code § 2924m does not apply to this property because it was not habitable.

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.)  “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.) 

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c(f)(1).)

“The supporting papers shall include a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed.  Each of the material facts stated shall be followed by a reference to the supporting evidence.  The failure to comply with this requirement of a separate statement may in the court's discretion constitute a sufficient ground for denial of the motion.”  (Code Civ. Proc., § 437c(b)(1); see also Cal. Rules of Court, rule 3.1350(c)(2) & (d).)  “The opposition papers shall include a separate statement that responds to each of the material facts contended by the moving party to be undisputed, indicating if the opposing party agrees or disagrees that those facts are undisputed. The statement also shall set forth plainly and concisely any other material facts the opposing party contends are disputed. Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence. Failure to comply with this requirement of a separate statement may constitute a sufficient ground, in the court's discretion, for granting the motion.” (Code Civ. Proc., § 437b(b)(3) (emphasis added).)

“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.)  The moving party is entitled to summary judgment if they can show that there is no triable issue of material fact or if they have a complete defense thereto. (Aguilar v. Atlantic Richfiend Co. (2001) 25 Cal.4th 826, 843.)  

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)  When deciding whether to grant summary judgment, the Court must consider all   evidence set forth in the papers, except evidence to which the Court has sustained an objection, as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.  (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467, as modified (Jan. 24, 2008).)

“A moving defendant now has two means by which to shift the burden of proof under subdivision (o)(2) of section 437c to the plaintiff to produce evidence creating a triable issue of fact. The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon…. Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff's cause of action.”  (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598; see also Code Civ. Proc., § 437c(p)(2).)  A moving defendant must show that plaintiff cannot reasonably obtain evidence to prove a cause of action, which is more than simply arguing that there is an absence of evidence.  (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)   

A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.  (Code Civ. Proc., § 437c(f)(1).) 

EVIDENTIARY OBJECTIONS

Cox objects to various portions of the Declaration of Alfred Haberstroh. These objections are overruled in their entirety.

Analysis

            In terms of undisputed facts, the facts mirror those identified in the Court’s January 24, 2023, ruling on Allstar’s motion for summary judgment directed at Cox’s First Amended Complaint in the 21SMCV01011. (See January 24, 2023 Minute Order at pp. 3-4.)  The subject property was previously owned by LDM-PP, LLC (“LDM”). Allstar provided a loan to LDM secured by a deed of trust for the property. Allstar then assigned its interest in the deed of trust to a group of individuals collectively referred to by the parties as the “Beneficiaries.” The loan included $600,000 in funds to redevelop and expand the existing residence on the property. When the loan became delinquent, Allstar foreclosed and decided to sell the property at a trustee’s sale. At Allstar’s direction, the opening bid on the property was $364,770. The sale was held on March 4, 2021, and the only bid received was from the Beneficiaries in the amount of $364,770. (UMF Nos. 11-12.) Allstar then executed a Trustee’s Deed Upon Sale, which was recorded on March 9, 2021. (UMF No. 14.)

            On March 17, 2021, Allstar received a Notice of Intent to Bid from Cox for purchase of the property pursuant to Civil Code § 2924m, a recently enacted statute which changes the procedures for non-judicial foreclosures. (UMF Nos. 16-17.) Prior to the new statute, the delivery of the trustee’s deed to a bona fide purchaser was conclusive and the buyer took free and clear of any other claims. With Section 2924m in effect, the sales of properties having one to four residential units are not immediately final. Rather, the sale only becomes final after 15 days unless an eligible bidder, as defined by the statute, submits a notice of intent to bid an amount exceeding the highest bid at the sale. An eligible bidder then has an additional 30 days to submit a formal bid with a tender of payment by cash or cashier’s check. Plaintiff’s Notice of Intent to Bid indicated he intended to bid $369,770 for the property, $5,000 more than the highest bid at the March 4, 2021, auction. On March 29, 2021, Plaintiff submitted his formal bid for the property. On March 30, 2021, Defendant recorded a Notice of Rescission of Trustee’s Deed Upon Sale purporting to rescind the March 4, 2021, trustee’s sale. (UMF No. 23.) On April 2, 2021, a new Notice of Trustee’s Sale was recorded setting a new sale date for April 28, 2021. (UMF No. 27.) On April 28, 2021, the Court granted Sunrise’s request for a temporary restraining order prohibiting the sale from happening. On May 26, 2021, the Court entered a preliminary injunction further enjoining the sale of the property.

Previously, the Court found that Cox failed to satisfy the requirements of Section 2924m, and as a result, he was not entitled to purchase the property. (January 24, 2023, Minute Order at pp. 6-7.) In particular, it was conceded that Cox did not tender a higher bid in cash or cashier’s check along with his formal bid for the property, as required under Civil Code § 2924m(c)(4), (Id. at pg. 5.) It was on this basis that the Court granted Allstar’s motion for summary judgment in the 21SMCV01011 action. Because Cox’s appeal was dismissed July 18, 2023, this decision and the resulting judgment was ultimately upheld.

Consequently, the Court finds that Cox is unable to maintain his claim of quiet title raised in his Cross-Complaint in the 21SMCV00756 action pursuant to the doctrine of collateral estoppel. Collateral estoppel prevents re-litigation when the following factors are met: (1) the issue is identical to an issue decided in a prior proceeding; (2) the issue was actually litigated; (3) the issue was necessarily decided; (4) the decision in the prior proceeding is final and on the merits; and (5) the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior proceeding. (Gabriel v. Wells Fargo Bank, N.A. (2010) 188 Cal.App.4th 547, 556.) Furthermore, in order to maintain a claim for quiet title, the complainant must have an interest and basis in the subject property. (Code Civ. Proc. § 761.020.) Here, Cox’s interest in the property stemmed from whether or not he was entitled to purchase the property under Section 2924m. Because this issue had been previously litigated, necessarily decided, and has become final against Cox’s favor, the claim of quiet title is barred.

Accordingly, the motion for summary adjudication is GRANTED. In the interest of judicial economy, the Court declines to address the remaining arguments raised in Allstar’s motion for summary judgment.