Judge: Mark H. Epstein, Case: 22SMCV01491, Date: 2023-04-18 Tentative Ruling

Case Number: 22SMCV01491    Hearing Date: April 18, 2023    Dept: R

The court is troubled here.  This case has been here for a while and there is a second amended complaint on file to which defendants have demurred.  The demurrer is set to be heard on May 4, 2023.  If it is sustained, there is a good chance that leave to amend will not be granted given that leave has been granted before unless the court is convinced that the problem is curable.  If it is overruled, then the court would be troubled by the immediate sale of the property in foreclosure.  In light of that, the court wonders why it is that defendants are pressing the foreclosure issue at this juncture.

Plaintiff contends that the parties have reached a deal in principal—an agreement on the payoff amount and that plaintiff will sell by a date certain.  If the sale is unsuccessful or plaintiff has not paid the agreed amount, plaintiff states that the complaint would be dismissed with prejudice, meaning that a foreclosure sale could go through without hinderance.

Plaintiff says the “glitch” in the settlement is that there is a squatter on the property.  The court does not know what that means precisely, but plaintiff says that there is a UD case to which the occupant has demurred but the motion is not set to be heard until June.  The court will inquire whether plaintiff has sought an ex parte order to advance the hearing given the pending sale.  If not, that ought to be done.  While this court will not (of course) set matters on another court’s docket, there is at least some reasonable chance that the UD court will advance the hearing somewhat (perhaps still on statutory time) to allow the demurrer to be heard if doing so would aid a foreclosure.  After all, if there is a foreclosure, the occupant’s continued occupancy would likely not survive.  Further, once defendant has answered, the court assumes that plaintiff will immediately request a trial be set within 20 days, as is plaintiff’s right under the UD statutes.  If those things are done with alacrity, there ought to be a trial and judgment very soon.  If the judgment is in plaintiff’s favor, a writ would issue quickly and it is likely that the property could soon be sold.

If that is the case, the court’s preference would be to allow this to happen.  Rather than litigate to have a couple of months, if plaintiff will agree in a binding way to a date certain by which the sale can go forward if the agreed upon amount is not paid, defendants might be well advised to take the deal—the court will enforce it.  The key is that there always seems to be something that plaintiff asserts to interfere.  This would have to be a near date certain.  If that is the case, the balance of hardships would seem to tilt quite strongly in plaintiff’s favor.  A delay of a few months to allow plaintiff to get FMV would be far preferable to the alternative.

All of that said, the court has not seen the opposition, and plaintiff’s case is somewhat weak.  At the last hearing, the court recited the complaint and noted that it appeared that the whole process has been somewhat snake-bitten.  At least to hear plaintiff tell the tale, the loan was sold and plaintiff could not find out where to send the mortgage payments.  Eventually, plaintiff sought a loan modification, but the single point of contact turned out to look more like a scatter plot than a single point.  The servicer was (allegedly) unresponsive and made contradictory statements.  Plaintiff claims to have retained a third party to work with the servicer, and if the notes attached to the complaint are to be believed even that person was frustrated by the poor response received.  On the other hand, defendant suggests that plaintiff has not made a loan payment in many, many years, which is remarkable. 

For now, and at a minimum, the court would be inclined to issue a TRO for a reasonable period to allow the motion to be fully briefed.  Better still, though, would be for the parties to agree to a resolution along the lines plaintiff suggested: a dismissal of the case without prejudice or (better in the court’s view) a stay until a particular date.  If by that date the loan is paid off at the agreed amount, then the case would be dismissed with prejudice and defendant would also stand down, having been paid.  If the loan is not paid within that time FOR ANY REASON then plaintiff will dismiss the instant case with prejudice, meaning that the causes of action herein cannot be renewed.  That would allow defendant a clear path to foreclosure.  Alternatively, the sale could be delayed until a date after the due date with the understanding and agreement that plaintiff will be barred from seeking any kind of injunction to forestall such a sale.