Judge Melvin D. Sandvig, Case Number: 23CHCV00371, Date: 2024-01-30 Tentative Ruling

Judge: Melvin D. Sandvig, Case: 23CHCV00371, Date: 2024-01-30 Tentative Ruling

Case Number: 23CHCV00371 Hearing Date: January 30, 2024 Dept: F47

Dept. F47

Date: 1/30/24

Case #23CHCV00371

MOTION TO SUBSTITUTE PLAINTIFF

Motion filed on 12/29/23.

MOVING PARTY: Plaintiffs Erickson Lavilla and Rose Ann Lavilla

RESPONDING PARTY: Defendant Forrest K. Balmain

NOTICE: ok

RELIEF REQUESTED: An order substituting Chicago Title Insurance Company in place and stead of Plaintiffs Erickson Lavilla and Rose Ann Lavilla as the real-party-in-interest in this case.

RULING: The motion is granted.

SUMMARY OF FACTS & PROCEDURAL HISTORY

This action arises out of Plaintiffs Erickson Lavilla and Rose Ann Lavilla’s (the Lavillas) purchase of real property commonly known as 29227 North Rio Lobo Way, Santa Clarita, California 91354 (the Property) from Defendant Forrest K. Balmain (Defendant).

Defendant acquired title to the Property on or about 3/2/22 by way of Quitclaim Deed from Mark Balmain. (RJN, Ex.A). On or about 2/12/07, Defendant obtained a loan from Aegis Wholesale Corporation (Aegis) in the amount of $587,200, which was secured by the Property (2008 DOT). (See RJN, Ex.B). On 3/26/10, the beneficial interest under the 2007 DOT was assigned to Aurora Loan Services, LLC (Aurora Assignment). (RJN, Ex.C). On 7/21/10, the beneficial interest under the 2007 DOT was assigned to MERS (MERS Assignment). (RJN, Ex.D).

On or about 6/22/22, Defendant sold the property to the Lavillas for $730,000.00 (Insured DOT). (RJN, Ex.E). The 2007 DOT was not discovered in the title search and, unbeknownst to the Lavillas, the encumbrance was not released from the Property when they purchased it.

On 7/18/22, the beneficial interest in the 2007 DOT was assigned to Deutsche Bank (Deutsche Bank Assignment). (RJN, Ex.F). On 8/2/22, a Substitution of Trustee whereby Barrett Daffin Frappier Treder & Weiss, LLP (BDF) was substituted as trustee under the 2007 DOT was recorded. (RJN, Ex.G). Deutsche Bank remained the beneficiary under the 2007 DOT and Mr. Cooper was the loan servicer on the 2007 DOT for Deutsche Bank.

On 10/31/22, a Notice of Default and Election to Sell Under Deed of Trust (NOD) was recorded. (RJN, Ex.H). On 3/8/23, BDF began foreclosure proceedings in connection with the 2007 DOT. (RJN, Ex.I – Notice of Trustees Sale (NOTS)).

On 3/3/23, as title insurer for the Lavillas, Chicago Title Insurance Company (Chicago Title) paid off the sums due under the 2007 DOT in the amount of $675,078.84 to prevent foreclosure and release the lien of the 2007 DOT from the Property (Rousso Decl., Ex.3; RJN, Ex.J).

During all times relevant to this action, Defendant did not disclose the 2007 DOT and the Lavillas were not aware of same when they purchased the Property. As such, on 2/8/23, the Lavillas filed this action against Defendant and others for: (1) Violation of Civil Code 2943 and for Statutory Damages/Injunctive Relief, (2) For Accounting, (3) Declaratory Relief, (4) Fraud and Deceit and (5) Breach of Implied Covenant (Civil Code 1113(2)). Claims against Deutsche Bank, Nationstar, Mr. Cooper and BDF have been settled by virtue of Chicago Title’s Settlement Payment of $675,078.84 to release the 2007 DOT from the Property. (Rousso Decl., Ex.3). As such, those parties have been dismissed from this action.

Chicago Title, as the Lavillas title insurer and payor of the 2007 DOT, seeks to pursue the Lavillas’ claims against Defendant for Declaratory Relief, Fraud and Deceit and Breach of Implied Covenant as the real-party-in-interest pursuant to its subrogation rights in the title insurance policy issued the Lavillas. (See Rousso Decl., Ex.2, Condition 8).

Therefore, on 12/29/23, the instant motion was filed (served on 1/2/24 by overnight mail) seeking an order substituting Chicago Title in place and stead of the Lavillas as the real-party-in-interest in this case. Defendant has not opposed the motion.

ANALYSIS

The Lavillas’ Request for Judicial Notice (RJN) is granted.

“An insurer/subrogee paying for a loss has the right to pursue its insured’s rights and remedies against the third party causing the loss.” Allstate Insurance Co. (1996) 46 CA4th 1794, 1799, as modified 8/1/96, citing Continental Casualty Company (1956) 46 C2d 423, 429; AMCO Insurance Company (2016) 244 CA4th 883, 895-896.

In addition to Chicago Title’s right under the insurance policy to be substituted into this action as subrogee, the right is recognized by statute. See CCP 368.5; Hearn Pacific Corporation (2016) 247 CA4th 117, 133-134.

The substitution does not change the nature of the action or any of the remaining claims as Chicago Title would merely be stepping into the shoes of the Lavillas as the transferee and subrogee of all rights and remedies that the Lavillas have against Defendant. Therefore, Defendant will suffer no prejudice by granting the relief requested in this motion.

CONCLUSION

The motion is granted.

The Court notes that exhibits attached to the motion are not electronically bookmarked as required. CRC 3.1110(f)(4); (5/3/19 First Amended General Order Re Mandatory Filing for Civil, Technical Requirements, p.4:7-21 (General Order)). Additionally, although there are electronic bookmarks for the Request for Judicial Notice filed in support of the motion, they are improperly labeled as numbered exhibits when the exhibits attached to the Request for Judicial Notice are designated by letters. Additionally, the bookmarks do not link to the corresponding exhibit (if the numbers were to be replaced with letters). For example, the link for “Exhibit 1” takes you to “Exhibit B,” the link for “Exhibit 2” takes you to “Exhibit C.” Also, the motion itself is not in a text searchable format as required. (General Order, p.4:5-6).

Counsel is warned that failure to properly comply with the foregoing rules, orders and/or requirements in the future may result in matters being continued so that papers can be re-submitted in compliance, papers not being considered and/or the imposition of sanctions.