Judge: Mel Red Recana, Case: BC610795, Date: 2024-03-19 Tentative Ruling

Case Number: BC610795    Hearing Date: March 28, 2024    Dept: 45

Superior Court of California 

County of Los Angeles 

Hearing Date:             March 28, 2024

Moving Party:             Defendants Homeward Residential, Inc. fka American Home Mortgage Servicing, Inc., Deutsche Bank National Trust Company, as trustee for Soundview Home Loan Trust 2006-OPT 3, Asset Backed Certificates, Series 2006-OPT 3, Western Progressive, LLC, Owen Loan Servicing, LLC, Power Default Services, Inc., Brandy Berns, and Vicki Pospisil, and Defendant Sand Canyon Corporation fka Option One Mortgage Corporation

Responding Parties:    Plaintiff Ron Hacker, as Successor Trustee for 1713 Stearns Laverne Family Trust, dated August 1, 2012

Motion for Summary Judgment, or alternatively, Summary Adjudication

The court considered the moving, opposition, and reply papers.

The court GRANTS Defendants’ motion for summary judgment as to the remaining causes of action of the Second Amended Complaint for wrongful foreclosure, unfair business practices, cancellation, slander of title, and declaratory relief.

Background

This action arises out of an alleged attempted wrongful foreclosure of real property located at 1713-1717 Stearns Drive, Los Angeles, CA 90035.  Plaintiff Ron Hacker, as successor trustee for 1713 Stearns Laverne Family Trust, dated August 1, 2012, filed this action on February 19, 2016, and a First Amended Complaint (FAC) on April 6, 2016.

On July 25, 2016, the Court sustained the demurrer to the FAC without leave and entered judgment.  Plaintiff appealed and, on August 16, 2018, the Court of Appeal remanded the case, holding that the trial court properly found that Plaintiff failed to alleged facts establishing an ownership interest in the subject property sufficient to confer standing, but the trial court abused its discretion in denying leave to amend.  (Defendants’ RJN, Ex. “2.”)

Plaintiff filed a Second Amended Complaint (SAC) on November 21, 2018 against defendants Homeward Residential, Inc. fka American Home Mortgage Servicing, Inc.; Sand Canyon Corporation fka Option One Mortgage Corporation; Western Progressive, LLC; Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-Opt 3, Asset-Backed Certificates, Series 2006-Opt 3; Ocwen Loan Servicing, LLC; Linda Greene; Brandy Berns; Doc X; Lorraine Brown; Vicki Pospisil; Power Default Services, Inc.; T.D. Service Company; and Ahmsi Default Services.

The SAC alleges causes of action for (1) Breach of Written Contracts; (2) Breach of the Covenant of Good Faith and Fair Dealing; (3) Wrongful Foreclosure; (4) Fraud; (5) Unfair Business Practices (Bus.& Prof. Code §§ 17200, et seq.); (6) Cancellation of Void Instruments; (7) Quiet Title; (8) Declaratory Relief; and (9) Specific Performance of Contract.

On April 5, 2019, the Court struck the SAC, and on August 29, 2019, entered a judgment of dismissal for defendants.  (Minute Order 04/05/2019.) 

Plaintiff appealed and, on April 2, 2021, the Court of Appeal remanded the case holding that the trial court should have set aside the judgement under section standing to foreclose.

On November 9, 2021, upon stipulation of the parties, the Court struck the SAC’s first, second, fourth, seventh, and ninth causes of action.  (Minute Order 11/09/2021.)

On March 22, 2023, defendants Homeward Residential, Inc. fka American Home Mortgage Servicing, Inc., Deutsche Bank National Trust Company, as trustee for Soundview Home Loan Trust 2006-OPT 3, Asset Backed Certificates, Series 2006-OPT 3, Western Progressive, LLC, Owen Loan Servicing, LLC, Power Default Services, Inc., Brandy Berns, and Vicki Pospisil, and defendant Sand Canyon Corporation fka Option One Mortgage Corporation filed their instant motion for summary judgment, or alternatively, summary adjudication. 

Plaintiff filed his opposition on March 15, 2024, and Defendants replied on March 21, 2024.

Legal Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial.  (Aguilar v. Atlantic Richfield 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.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense.  (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)  A motion for summary judgment must be denied where the moving party's evidence does not prove all material facts, even in the absence of any opposition  (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salesguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387)

Evidentiary Objections

The court rules on Defendants’ evidentiary objections to the Declaration of Ron Hacker submitted in opposition to Defendants’ motion as follows.

            Sustained: Objections 1-8.

            Overruled: None

Judicial Notice

            Defendants have requested that the court take judicial notice of the following:

(1)   Joint Stipulation and Order Striking Portions of Plaintiff’s Second Amended Complaint, filed November 9, 2021, in Los Angeles Superior Court Case Number BC610795;

(2)   August 16, 2018, Opinion filed in Court of Appeal of California, Second Appellate District, Case No. B278537, Hacker v. Homeward Residential, Inc.;

(3)   Deed of Trust dated March 10, 2006, recorded on March 21, 2006, as Document 06- 0594660 in the Los Angeles County Recorder’s Office;

(4)   Assignment of Deed of Trust, dated August 21, 2008, and recorded on August 26, 2008, as Document No. 20081537022 in the Los Angeles County Recorder’s Office;

(5)   Notice of Default and Election to Sell Under Deed of Trust dated October 8, 2009, and recorded on October 9, 2009, as Document No. 20091540709 in the Los Angeles County Recorder’s Office;

(6)   Substitution of Trustee dated July 31, 2009, and recorded November 12, 2009, as Document No. 20091702776 in the Los Angeles County Recorder’s Office;

(7)   Notice of Trustee’s Sale dated January 10, 2010, and recorded January 11, 2010 as Document No. 20100035471 in the Los Angeles County Recorder’s Office;

(8)   Corporate Assignment of Deed of Trust dated December 22, 2014, and recorded January 9, 2015, as Document No. 20150029691, in the Los Angeles County Recorder’s Office;

(9)   Substitution of Trustee dated February 3, 2015, and recorded February 12, 2015, as Document No. 20150161832, in the Los Angeles County Recorder’s Office;

(10)                   Notice of Default and Election to Sell Under Deed of Trust dated August 4, 2015, and recorded August 10, 2015, as Document No. 20150972885 in the Los Angeles County Recorder’s Office;

(11)                   Notice of Trustee’s Sale dated January 13, 2016, and recorded January 19, 2016, as Document No. 20160054659 in the Los Angeles County Recorder’s Office;

(12)                   Trustee’s Deed Upon Sale dated July 8, 2016, and recorded July 13, 2016 as Document No. 20160812935 in the Los Angeles County Recorder’s Office;

(13)                   Grant Deed dated October 6, 2020, and recorded October 28, 2020 as Document No. 2021353262 in the Los Angeles County Recorder’s Office;

(14)                   Complaint filed October 16, 2012, in Los Angeles Superior Court, Case Number BC493904, Estrelita Lane as Trustee for 1713 Stearns Laverne Family Trust, Dated August 1, 2012 v. Marcia Chaissions, et al.;

(15)                   First Amended Complaint filed March 27, 2013, in Los Angeles Superior Court, Case No BC493904, Estrelita Lane as Trustee for 1713 Stearns Laverne Family Trust, Dated August 1, 2012 v. Marcia Chaissions, et al.; and

(16)                   Declaration of Ron Hacker in Support of Reply of Plaintiff to Defendant’s Opposition to Plaintiff’s Request for Preliminary Injunction After Granting of TRO signed on March 11, 2016.

Evidence Code section 451, subdivision a, provides the court shall take juridical notice of the law of this state and of the United States.  The court may take judicial notice of “[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.”  (Evid. Code, § 452, subds. (c), (d), (h).)¿  This includes recorded deeds and other documents recorded by a county recorder’s office.  (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 [“The court may take judicial notice of recorded deeds”].)  Pursuant to Evidence Code sections 451 and 452, the court GRANTS Defendants’ requests insofar as their existence and the orders made within, if any.

Plaintiff has requested that the court take judicial notice of the following:

(1)   Assignment of Deed of Trust signed by Linda Green, purporting to represent American Home Mortgage Servicing Inc., transferring Deed of Trust to Deutsche Bank National Trust Company, as Trustee for the Certificate holders of Soundview Home Loan Trust 2006-OPT3, Asset-Backet Certificates, recorded with the Los Angeles County Recorder on August 26, 2008 as Instrument No. 20081537022;

(2)   Substitution of Trustee recorded with the Los Angeles County Recorder on September 4, 2008 as Instrument No. 20081594227;

(3)   Notice of Rescission recorded with the Los Angeles County Recorder on November 8, 2008 as Instrument No. 20082030238;

(4)   Substitution of Trustee recorded with the Los Angeles County Recorder on November 12, 2009 as Instrument No. 20091702776;

(5)   Order on Plaintiff's Ex Parrte Application for Order to Show Cause recorded with the Los Angeles County Recorder on September 4, 2013 as Instrument No. 20131517257;

(6)   Corporate Assignment of Deed signed by Brandy Berns, Assistant Secretary on behalf of Sand Canyon Corporation fka Option One Mortgage Corporation, transferring the Deed of Trust to Deutsche Bank National Trust Company, as Trustee for Soundview Home Loan Trust 2006-OPT3, recorded with the Los Angeles County Recorder on January 9, 2015 as Instrument No. 20150029691;

(7)   Temporary Restraining Order and Preliminary Injunction recorded with the Los Angeles County Recorder on March 2, 2016 as Instrument No. 20160229088;

(8)   Trustee's Deed Upon Sale recorded with the Los Angeles County Recorder on July 13, 2016 as Instrument No. 2016812935;

(9)   Grant Deed transferring the Property to MARK MEADOR, as Trustee for 1713 Stearns Laverne Family Trust Dated August 1, 2012, recorded with the Los Angeles County Recorder on July 13, 2016 as Instrument No. 20160814985.

Without the court even determining whether the documents are in fact judicially noticeable, “There is, however, a precondition to the taking of judicial notice in either its mandatory or permissive form—any matter to be judicially noticed must be relevant to a material issue.”  (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)  Plaintiff does not reference his request for judicial notice in his opposition.  Therefore, the request for judicial notice is DENIED.

Allegations

In 2006, Marcia Chaissions (Chaissions) obtained an $875,000 loan from Option One Mortgage Corporation (Option One) secured by a deed of trust.  (FAC ¶¶ 19, 160.)  In June 2006, Option One transferred the loan to the Option One Mortgage Loan Trust 2006-2 (Option One Trust).  (Id. at ¶ 161.) 

On April 30, 2008, Option One changed its name to Sand Canyon and sold its mortgage servicing portfolio to American Home Mortgage Servicing, Inc. ( AHMSI).  (Id. at ¶¶ 24, 31.) 

On August 21, 2008, AHMSI assigned the deed of trust to Deutsche Bank National Trust Company (Deutsche Bank) as trustee for the certificate holders of the Soundview Home Loan Trust (Soundview Trust).  (Id. at ¶ 30.)  On July 23, 2008, a sham and void substitution of trustee was recorded whereby AHMSI Default Services, Inc., was named as the trustee on the deed of trust and, on July 31, 2009, another shame and void substitution of trustee was recorded whereby Power Default Services, Inc. became the trustee on the deed of trust.  (Id. at ¶¶ 32-33.) 

Chaissions defaulted on the loan and Trust Deed Service Company (T.D.) recorded a notice of default on October 9, 2009.   (Id. at ¶ 36; Ex. “H.”)  The notice reflects that T.D. recorded the instrument and directed the borrower (Chaissions) to contact Deutsche Bank, as trustee for the Soundview Trust, care of AHMSI, if she wished to arrange payment to prevent foreclosure.  (Id.)  T.D. recorded notices of trustee's sale on January 11, 2010, June 20, 2011, and January 12, 2012.  (Id. at ¶¶ 40, 42, 44; Exs. “I,” “J,” “K.”)

On May 29, 2012, AHMSI’s name was changed to Homeward Residential, Inc. (Homeward).  (Id. at ¶ 25.) 

Eventually, on February 12, 2015, Western Progressive, LLC (Western Progressive) was named as trustee on the deed of trust.  (Id. at ¶ 148.)  On August 10, 2015, Western Progressive recorded a notice of default and election to sell under deed of trust, directing the borrower to contact Deutsche Bank, as trustee for the Soundview Trust, if the borrower wished to arrange for payment in order to avoid foreclosure.  (Id. at ¶¶ 53,148; Ex. “N.”)  Western Progressive recorded a notice of trustee's sale on January 19, 2016.  (Id. at  ¶ 54, 148. Ex. “O.”)

The Soundview Trust acquired the property at a foreclosure sale on July 6, 2016; Western Progressive recorded the trustee's deed upon sale on July 13, 2016.  (Id. at  ¶¶  92, 141, 156; Ex “T.”)

Discussion

Defendants move for summary judgment, or alternatively, summary adjudication with respect to Plaintiff’s remaining causes of action in the SAC for wrongful foreclosure, unfair business practices, cancellation, slander of title, and declaratory relief.

Alternatively, Defendants moves for summary adjudication of issues as follows:

Issue 1: Defendants, and each of them, are entitled to summary adjudication on the SAC’s third cause of action for wrongful foreclosure because Plaintiff cannot establish that Defendants lacked the standing to foreclose on the subject real property, and thus cannot establish an illegal, fraudulent, or willfully oppressive sale of the real property, or any prejudice or harm.  Moreover, Plaintiff’s claims are time-barred as to Sand Canyon, if not all Defendants;

 Issue 2: Defendants, and each of them, are entitled to summary adjudication on the SAC’s fifth cause of action for unfair business practices because Plaintiff cannot establish standing to pursue this claim, damages caused by Defendants, or any unlawful, unfair, or fraudulent business practices.  Moreover, Plaintiff’s claims are time-barred as to Sand Canyon, if not all Defendants;

Issue 3: Defendants, and each of them, are entitled to summary adjudication on the SAC’s sixth cause of action for cancellation because Plaintiff cannot establish any invalid instrument as Defendants had clear authority and standing to foreclose on the subject real property.  Moreover, Plaintiff’s claims are time-barred as to Sand Canyon, if not all Defendants;

Issue 4: Defendants, and each of them, are entitled to summary adjudication on the SAC’s seventh cause of action for slander of title because Plaintiff cannot establish any tortious injury to property resulting from unprivileged, false, malicious publication of disparaging statements regarding title to the subject real property, to plaintiff’s damage.  Moreover, Plaintiff’s claims are time-barred as to Sand Canyon, if not all Defendants; and

Issue 5: Defendants, and each of them, are entitled to summary adjudication on the SAC’s eighth cause of action for declaratory relief because Plaintiff cannot establish that Defendants lacked the standing to foreclose on the subject real property, and cannot establish the existence of an actual, present controversy.

Remaining Causes of Action for Wrongful Foreclosure, Unfair Business Practices, Cancellation, Slander of Title; and Declaratory Relief

Defendants contend that Plaintiff’s remaining causes of action in the SAC fail because they depend upon the same false argument that the foreclosure sale on behalf of Deutsche Bank as Trustee was invalid.  (Motion, p. 18.)

Plaintiff’s SAC provides that the 2008 assignment of the deed of trust from Option One to Deutche Bank as Trustee was a “sham” and “void” as Option One did not hold the loan to make a transfer since Option One had transferred the loan in 2006 to the “Option One Mortgage Loan Trust 2006-2.”  (UMF No. 1; SAC, ¶¶ 24-57, 88-92, 120-123, 132-167.)  Based on the foregoing, Plaintiff contends that Deutsche Bank was not the beneficiary and the resulting foreclosure sale on behalf of Deutsche Bank was invalid and void.  (Id.)  According to Defendants, the remaining causes of action in the SAC fail because they depend upon this false argument by Plaintiff.  (Motion, p. 18.)  In his Separate Statement, Plaintiff does not dispute that his remaining causes of action are based on the allegation that the foreclosing beneficiary Deutsche Bank as Trustee lacked standing to foreclosure in 2016.  (UMF No. 1.) 

Defendants contend that the remaining causes of action fail as a matter of law because (1) Option One sold and conveyed the subject loan to Deutsche Bank as Trustee in May of 2006; (2) Deutsche Bank as Trustee possessed the original wet-ink note, endorsed in blank, at all pertinent times; (3) the foreclosure sale was valid; (4) Plaintiff’s reliance on purported defects in the “Assignments” of Deed of Trust recorded in the public record is erroneous; and (5) Plaintiff has not evidence to support his false argument that the loan was sold and held by “Option One Mortgage Loan Trust.”

As to Defendants’ first reason, Defendants argue Option One never sold, transferred, or assigned the subject loan to an “Option One Mortgage Loan Trust”; instead, the subject loan was sold and conveyed to Deutsche Bank as Trustee in 2006.  (UMF Nos. 2-3.)  Thus, Deutsche Bank had standing to foreclose in 2016.  (Id.)  Specifically, the subject loan originated by Option One to borrower Chaissions was sold in 2006, and deposited, conveyed, and assigned at that time to Deutsche Bank as Trustee.  (UMF Nos. 2-3.)  The subject loan was not sold, transferred, or assigned to the "Option One Mortgage Loan Trust 2006-2" or any other Option One Trust as Plaintiff contends.  (UMF Nos. 2-4.)  Deutsche Bank as Trustee had clear authority to foreclose as it continuously held possession of the original Note endorsed in blank via the Allonge and the original Deed of Trust at all times from its acquisition of the Loan in 2006 through the foreclosure sale in July 2016.  (UMF, No. 5.)  Defendants also provide a declaration from Brian McConnell on behalf of the subject loan’s originating lender (Sand Canyon Corporation fka Option One Mortgage Corporation) confirming that.  (UMF Nos. 3-4; Declaration of Brian McConnell, ¶¶ 6-14 and Exs. 3-5.)  The foreclosure sale based on borrower's uncured default was valid and each of Plaintiff's remaining causes of action fail.  (UMF Nos. 1-13.) 

Based on the foregoing, the Court finds that Defendants have met their initial burden showing that they had the authority to foreclose on the subject loan because the subject loan was transferred by Option One to Deutsche Bank as Trustee, not “Option One Mortgage Loan Trust 2006-2” as claimed by Plaintiff.  Therefore, the burden shifts to the Plaintiff to establish a triable issue of material fact. 

In opposition, Plaintiff states his third cause of action for wrongful foreclosure, and all derivative causes of action, should survive even if Defendants did have standing to sue.  (Opposition, p. 1; Declaration of Vincent J Quigg, ¶ 5.)  Plaintiff also states that “Defendants’ evidence in support of their claim that they had standing to foreclose is also fatally flawed, and Defendants have failed to prove, so far, that they had standing to foreclose.”  (Id.)  Specifically, Plaintiff argues the following: (1) Mr. McConnell never learned who owned the loan in question, so he cannot assert that Defendants own it; (2) Mr. McConnell searched for the wrong loan number when he claimed that the subject loan was not on the list of loans conveyed to Option One Mortgage Loan Trust 2006-2; (3) Mr. McConnell does not establish whether the loan number would have appeared as the loan number or servicing number; (4) 031042077 is the loan number that appears on the note, versus 31042077, which is the number that Mr. McConnell searched for; and (5) Mr. McConnell also never explained whether the loan would appear in the trust by its servicing number or its loan.  (Id. at p. 5.) 

Plaintiff does not provide admissible evidence to support his claim that the subject loan was sold, transferred, and assigned to Option One Mortgage Loan Trust.  Nor does Plaintiff provide factual support for his broad claims challenging the Declaration of McConnell, which covers the Pooling and Servicing Agreement, Mortgage Loan Purchase Agreement, and Mortgage Loan Schedule that details the sale of the subject loan and conveyance to Deutsche Bank as Trustee and specifically identifies the subject loan, borrower, property address, and other loan details in the loan schedule accompanying the sale agreements. 

Further, Plaintiff agrees with Defendants that his remaining causes of action are based solely on the allegation that foreclosing beneficiary Deutsche Bank as Trustee lacked standing to foreclose in 2016.  (UMF No. 1.)  Plaintiff subsequently states he “will seek leave of Court to amend the SAC to include additional reasons why he should recover under [the remaining causes of action].  These additional reasons will not be premised on the argument Defendants referenced.”  (Id.; see also Declaration of Vincent J. Quiggs, ¶ 5 “Even if [Defendants] did have such authority, I believe that the foreclosure sale was illegal and willfully oppressive, and I will explain this more thoroughly in an amended complaint.”)  Plaintiff does not identify how amendment can cure his pleadings because he merely states that he will assert a different reason for his causes of action and his counsel will explain further in an amended complaint.  Also, considering trial is set for June and the SAC was filed in 2018, leave to amend at this stage would be prejudicial to Defendants.

Based on the foregoing, the Court finds that Plaintiff has failed to meet his burden to raise a triable issue of material fact, and Plaintiff’s request to amend is improper.

Accordingly, the court GRANTS Defendants’ motion for summary judgment as to the remaining causes of action of the Second Amended Complaint.

It is so ordered.

Dated: March 28, 2024

_______________________

ROLF M. TREU

                                                                                         Judge of the Superior Court