Judge: Maurice A. Leiter, Case: 24STCV29325, Date: 2025-05-14 Tentative Ruling

Case Number: 24STCV29325    Hearing Date: May 14, 2025    Dept: 54

Hearing Date: May 14, 2025

Department 54, Judge Maurice A. Leiter

Motion for Preliminary Injunction

Moving Party: Plaintiff Global Network Investments

Responding Party: Defendants Wells Fargo Bank, N.A., et al.

T/R:     PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION IS DENIED

PLAINTIFF TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

A.   Request for Judicial Notice

“Matters that are subject to judicial notice are listed in Evidence Code sections 451 and 452. A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute.” (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1374.) The Court grants Defendants’ requests for judicial notice. “Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Herrera, supra at 1375.)

B.   Evidentiary Objections

The Court overrules Defendants’ evidentiary objections.

C.   Preliminary Injunction

In deciding whether to issue a preliminary injunction, the court looks to two factors: “(1) the likelihood that the Petitioner will prevail on the merits, and (2) the relative balance of harms that is likely to result from the granting or denial of interim injunctive relief.”  (White v. Davis (2003) 30 Cal.4th 528, 553-54.) The factors are interrelated, with a greater showing on one permitting a lesser showing on the other.  (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) 

Plaintiff alleges that the trustee’s sale of the subject property, 4316 Marina City Drive #PH29, Marina Del Rey, California 90292, on March 6, 2025, conducted by Defendant Western Progressive, LLC, was illegal and void due to multiple violations of the California Homeowner Bill of Rights and related statutory provisions. Plaintiff contends that the Notice of Default was recorded in violation of Civil Code § 2923.55(a), which prohibits such recording until the mortgage servicer has fulfilled certain pre-foreclosure contact and due diligence requirements. (FAC ¶ 11.) Plaintiff alleges that Defendants failed to contact Plaintiff to discuss foreclosure avoidance options, as required under Civil Code § 2923.55(e), and did not provide the toll-free HUD telephone number intended to help borrowers locate a HUD-certified housing counseling agency. (FAC ¶¶ 12-13.) Plaintiff asserts that it provided Defendants with its primary telephone number for this purpose, but no attempt to make contact was made. (FAC ¶¶ 14-15.) In addition, Plaintiff recently reviewed the chain of title for the subject property and discovered forged signatures on recorded Assignments of the Deed of Trust, which call into question the validity of the title transfers and undermine Defendants’ authority to initiate or complete a foreclosure. (FAC ¶ 16.)

Plaintiff seeks to enjoin Defendants from taking any further action to enforce the foreclosure sale of the subject property. Plaintiff requests that the Court restrain Defendants from transferring, selling, leasing, encumbering, or otherwise alienating the property; from initiating or continuing any unlawful detainer actions or other legal proceedings to obtain possession of the property; from collecting rents or other consideration from any person or entity in connection with the property; and from creating or recording any liens, encumbrances, or other documents that would cloud title to the property.

1.    Standing

Defendants argue that Plaintiff lacks standing to assert claims under the Homeowner Bill of Rights (HBOR), breach of contract, and fraud because it is a corporate entity, not a “natural person” or borrower under the loan. Plaintiff also was not a party to the loan and does not reside at the property.

Plaintiff argues that it has standing to assert claims under HBOR, wrongful foreclosure, and related statutory provisions despite being a non-borrower and corporate entity. Citing Sciarratta v. U.S. Bank Nat’l Ass’n (2016) 247 Cal.App.4th 552, Plaintiff contends that as the titleholder via a recorded grant deed, it has a direct interest in the property and has suffered harm, including loss of the property, financial damages, and credit impact, as alleged in the Verified Complaint (¶ 56). Plaintiff argues that Civil Code § 2924.15(a), which limits certain HBOR protections to owner-occupied properties, does not preclude non-borrower titleholders from pursuing claims under §§ 2923.55, 2924.17, or 2924f. Plaintiff maintains that its corporate status does not negate its ability to sue for statutory violations affecting its property rights.

Civil Code § 2920.5(c)(1) states:

Unless otherwise provided and for purposes of Sections 2923.4, 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, 2924.18, and 2924.19, ‘borrower’ means any natural person who is a mortgagor or trustor and who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer.

Civil Code § 2924.15 states:

(a) Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924 and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.18 shall apply only to a first lien mortgage or deed of trust that is secured by owner-occupied residential real property containing no more than four dwelling units.

(b) For purposes of this section, “owner-occupied” means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.

Although Plaintiff contends that its status as a titleholder gives it standing to assert claims under the HBOR, the plain language of Civil Code §§ 2920.5(c)(1) and 2924.15(a) limits the applicability of key HBOR provisions to natural persons who occupy the property as their principal residence. Plaintiff, a corporate entity that was not a borrower on the underlying loan and does not reside at the property, does not meet the statutory definition of a “borrower.” The Court finds that Plaintiff lacks standing to assert claims under the HBOR provisions at issue. The Court is not persuaded that the authorities cited by Plaintiff, including Sciarratta, support standing for a corporate, non-borrower entity in this context, particularly where the statutory language is expressly limited.

Since Plaintiff lacks standing to pursue its HBOR, contract-related, and fraud claims, the request for injunctive relief based on those claims is denied.

2.    Probability of Prevailing on the Merits

Plaintiff contends it is likely to succeed on the merits of its claims for wrongful foreclosure and violations of California Civil Code §§ 2923.55, 2924.17, and 2924f, as well as for cancellation of instruments under § 3412. First, Plaintiff alleges that Defendants failed to contact it to assess financial circumstances or explore foreclosure alternatives prior to recording the Notice of Default (NOD), and did not include the required declaration of compliance, in violation of § 2923.55. Plaintiff says this constitutes a material defect that renders the NOD void. (Complaint ¶¶ 47-50; Exh. D; Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1058.)

Second, Plaintiff alleges a violation of § 2924.17 based on forged signatures in the Assignment and Corporate Assignment of Deed of Trust (ADOT and CADOT) and the lack of a sworn declaration with the NOD, suggesting the foreclosure documents are not supported by competent and reliable evidence. (Complaint ¶¶ 38-43, 50; Exhs. B-D; Sciarratta v. U.S. Bank Nat’l Ass’n (2016) 247 Cal.App.4th 552, 565.)

Third, under § 2924f, Plaintiff asserts that Defendant WESTERN failed to properly post or publish the Notice of Trustee’s Sale (NOTS) for three consecutive weeks, as required, depriving Plaintiff of notice. (Complaint ¶¶ 67-70; Exh. F.)

Fourth, Plaintiff alleges that the ADOT, CADOT, and Substitution of Trustee (SOT) contain forged signatures, and that Defendants lacked authority to foreclose. These defects support claims for wrongful foreclosure and cancellation of instruments under § 3412, as the documents cloud title to the property. (Complaint ¶¶ 38-43, 52-54; Zakaessian v. Zakaessian (1945) 70 Cal.App.2d 721, 725.)

            In opposition, Defendants contend that Plaintiff’s claims are barred by res judicata because the same issues were litigated and decided in the 2015 and 2019 lawsuits. Those lawsuits involved the same parties (Plaintiff, Defendants, and borrower Griggs), the same property, and the same core set of facts regarding foreclosure. Courts issued final rulings on the merits, which were upheld on appeal. Under California’s primary rights theory, Plaintiff cannot relitigate claims or legal theories arising from the same injury and transactional facts. (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896-97.)

Defendants assert that the Notice of Default and Notice of Trustee’s Sale complied with statutory requirements. The NOD included the required declaration under Civil Code § 2923.55(f), and Plaintiff lacks standing to challenge it as a non-borrower. (Torres Decl.) Defendants argue that the Notice of Sale was properly posted at the property, published on three occasions, and mailed in accordance with Civil Code §§ 2924f and 2924b, as shown by declarations and documentary evidence. (Exs. 8 & 9.)

Defendants argue that Plaintiff’s wrongful foreclosure claim fails because Plaintiff did not tender or attempt to tender the amount due on the loan, a required element for such claims. Plaintiff’s own bankruptcy records show it lacked funds to do so.

Defendants argue that Plaintiff’s Unfair Competition Law (UCL) claim under Bus. & Prof. Code § 17200 is derivative of the other failed claims and must be dismissed. Also, Plaintiff lacks standing under the UCL because it cannot show that its alleged economic harm was caused by any unfair business practice.

Defendants assert that Plaintiff has provided no evidence to support its claim that the 2011 and 2019 Assignments of Deed of Trust and the 2013 Substitution of Trustee contain forged signatures or are otherwise invalid. (Verdooren & Torres Decls.) Plaintiff raised these same allegations in the 2015 case and lost. Under Civil Code § 3412 and Ephraim v. Metropolitan Trust Co. (1946) 28 Cal.2d 824, 833, cancellation requires specific factual allegations of invalidity, which Plaintiff has not provided.

            In reply, Plaintiff argues that res judicata does not apply because the current lawsuit is based on new facts and violations that occurred after the 2015 and 2019 lawsuits. The Verified Complaint alleges distinct misconduct, including:

·         An illegal trustee’s sale on March 6, 2025 (Complaint ¶ 27);

·         Failure to include a declaration with the Notice of Default recorded on May 23, 2013, a defect recently discovered (Complaint ¶ 50);

·         Improper posting and publication of the Notice of Trustee’s Sale on April 5, 2024 (Complaint ¶¶ 67–70); and

·         Forged signatures in the Assignment and Corporate Assignment of Deed of Trust, supported by expert analysis (Complaint ¶¶ 38–43).

Plaintiff contends these new facts and evidence of fraud postdate the earlier litigation, and could not have been raised in the 2015 or 2019 cases.

Plaintiff argues that Defendants violated Civil Code §§ 2923.55(c) and 2924f by failing to comply with statutory notice and contact requirements. Plaintiff claims these violations are supported by Plaintiff’s sworn declaration and render the foreclosure void.

Plaintiff asserts that it is not required to tender the full amount of the loan to seek injunctive relief under the HBOR. Civil Code § 2924.12(a)(1) allows injunctive relief for statutory violations without tender. Courts have confirmed that no tender is required to enjoin wrongful foreclosure or prevent post-sale enforcement where material violations are alleged. (Lona v. Citibank (2011) 202 Cal.App.4th 89; Mabry v. Superior Court (2010) 185 Cal. App. 4th 208.)

Plaintiff argues that its claim under Business and Professions Code § 17200 is supported by specific allegations of unfair business practices, including recording fraudulent documents and initiating an unlawful foreclosure. These acts stem from HBOR violations and caused Plaintiff economic injury, satisfying UCL standing requirements. (Kwikset Corp. v. Superior Ct. (2011) 51 Cal. 4th 310.) The UCL claim is based on new conduct and is not derivative of previously litigated claims.

And Plaintiff seeks cancellation of the Assignment of Deed of Trust (ADOT), Corporate Assignment of Deed of Trust (CADOT), and Substitution of Trustee (SOT), citing forged signatures and expert document analysis to support the claim. Plaintiff says these facts sufficiently allege invalidity under Civil Code § 3412. (Zakaessian v. Zakaessian (1945) 70 Cal. App. 2d 721.) Plaintiff argues that Defendants’ declarations merely assert the documents’ propriety but do not refute the forgery allegations, raising triable issues and justifying cancellation and injunctive relief.

            The Court finds that Plaintiff fails to demonstrate a likelihood of success on the merits of its claims. Although Plaintiff contends that new facts distinguish this action from prior litigation. It appears that the core issues, relating to the validity of foreclosure documents, notice procedures, and alleged fraud, are substantially like those adjudicated in the 2015 and 2019 lawsuits. Under California’s primary rights theory, the doctrine of res judicata bars re-litigation of claims arising from the same nucleus of facts, regardless of the legal theories asserted. Plaintiff was a party to the prior proceedings, and the foreclosure process challenged here concerns the same loan, property, and transactional events already addressed in earlier rulings.

The Court also finds that Plaintiff’s challenges to the Notice of Default (NOD) and Notice of Trustee’s Sale (NOTS) are unpersuasive. Defendants have presented evidence, including declarations and documentary proof, establishing compliance with Civil Code §§ 2923.55 and 2924f, and Plaintiff lacks standing as a non-borrower to challenge these notices.

3.    Relative Balance of Harms

Plaintiff argues that it will suffer irreparable harm without injunctive relief because real property is unique and cannot be replaced or adequately compensated through monetary damages. The allegedly wrongful foreclosure sale places Plaintiff in immediate danger of losing possession of the property, and without a court order, Defendants may transfer, encumber, or lease the property, further clouding title and harming Plaintiff’s ability to recover its interest. Plaintiff also faces the risk of unlawful detainer actions and negative credit reporting, causing both financial and emotional harm. (Complaint ¶ 56.)

In opposition, Defendants argue that an injunction would unjustly allow Plaintiff, a non-borrower corporate entity that neither owns the loan nor resides at the property, to block Defendants from recovering possession of the property. Meanwhile, Defendants continue to incur costs such as property taxes, insurance, and HOA fees. (Verdooren Decl. ¶ 7.) Defendants emphasize that any claimed harm to Plaintiff, such as credit damage or emotional distress, is speculative, unsupported by admissible evidence, and unconvincing when asserted by a shell entity.

The Court is not persuaded by Plaintiff’s arguments that the harm is imminent, non-speculative, or outweighs the prejudice to Defendants. Plaintiff is a corporate, non-borrower entity that neither executed the underlying loan documents nor resides at the property.

The motion for preliminary injunction is DENIED.