Judge Michael P. Linfield, Case 22STCV18744 2022-10-06 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV18744, Date: 2022-10-06 Tentative Ruling

Case Number: 22STCV18744 Hearing Date: October 6, 2022 Dept: 34

SUBJECT: Demurrer

Moving Party: Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC (collectively, “Defendants”)

Resp. Party: None

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the First Cause of Action is SUSTAINED with leave to amend.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Second, Third, Eighth and Ninth Causes of Action is SUSTAINED without leave to amend.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Fourth, Fifth, Sixth, Seventh and Tenth Causes of action is OVERRULED.

I. PRELIMINARY COMMENT

The Court recognizes that to the pro per litigant, “law and motion proceedings” are “baffling devices.” (Bruno v. Superior Court (1990) 219 Cal.App.3d 1359, 1363, quoting Burley v. Stein (1974) 40 Cal.App.3d 752, 755, fn. 3.) Nonetheless, Plaintiff, either by himself or with the help of counsel, was able to draft a 90-paragraph verified complaint. Given that this demurrer asked the Court to dismiss the defendants with prejudice – i.e., to end the litigation as to these defendants – the Court is surprised that Plaintiff has not opposed this demurrer.

The Court also reminds Plaintiff that he must comply with the rules of court, including the requirement to meet-and-confer with opposing counsel when required by law or by order of this Court.

II. BACKGROUND

On June 8, 2022, Plaintiff Llewellyn C. Werner (“Werner”), in propria persona, filed a verified complaint against Defendants PHH Mortgage Corporation (“PHH”); Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7 (“Deutsche Bank as Trustee”); Western Progressive; and Western Progressive, LLC (“Western Progressive” and, collectively, “Defendants”) alleging the following causes of action:

1. Elder Abuse

2. Breach of Oral Contract

3. Breach of Written Contract

4. Wrongful Foreclosure

5. Quiet Title

6. Slander of Title

7. Cancellation of Instrument

8. Promissory Estoppel

9. Negligence

10. Declaratory Relief

On September 7, 2022, Defendants demurred to Werner’s Complaint “pursuant to Code of Civil Procedure § 430.10(e) and 430.10(f) on the grounds that the Complaint fails to state facts sufficient to constitute a cause of action and is uncertain. Defendants attempted to meet and confer concerning the objections raised by this Demurrer, but Plaintiff did not cooperate. See Declaration of Neil J. Cooper, ¶2 and Ex. A.” (Demurrer, p. 2:10-13.) No opposition has been filed.

III. ANALYSIS

A. Request for Judicial Notice

On September 7, 2022, Defendants requested that the Court take judicial notice of the following documents.

1. Deed of Trust recorded in the Official Records of the County of Ventura on April 2, 2007 as Instrument No. 20070402-00068061, a true and correct copy of which is attached hereto as Exhibit 1;

2. Assignment of Deed of Trust recorded in the Official Records of the County of Ventura on February 1, 2011 as Instrument No. 20110201-00017059, a true and correct copy of which is attached hereto as Exhibit 2;

3. Substitution of Trustee recorded in the Official Records of the County of Ventura on April 18, 2016 as Instrument No. 20160418-000522870, a true and correct copy of which is attached hereto as Exhibit 3;

4. Notice of Default recorded in the Official Records of the County of Ventura on April 28, 2016 as Instrument No. 20160428-000586600, a true and correct copy of which is attached hereto as Exhibit 4;

5. Grant Deed recorded in the Official Records of the County of Ventura on November 21, 2016 as Instrument No. 20161121-001722830, a true and correct copy of which is attached hereto as Exhibit 2;

6. Docket in In re Benny Harris, C.D. Cal. Bankr. Case No. 2:16-bk-25344-SK, a true and correct copy of which is attached hereto as Exhibit 2;

7. Grant Deed recorded in the Official Records of the County of Ventura on April 29, 2019 as Instrument No. 20190429-000463740, a true and correct copy of which is attached hereto as Exhibit 7;

8. Docket in In re Madalyn Mary Phillips, C.D. Cal. Bankr. Case No. 2:17-bk-11068-NB, a true and correct copy of which is attached hereto as Exhibit 8;

9. Order Granting Motion for Relief from the Automatic Stay in In re Madalyn Mary Phillips, C.D. Cal. Bankr. Case No. 2:17-bk-11068-NB, a true and correct copy of which is attached hereto as Exhibit 9;

10. Notice of Trustee’s Sale recorded in the Official Records of the County of Ventura on July 30, 2019 as Instrument No. 20190730-000864500, a true and correct copy of which is attached hereto as Exhibit 10;

11. Trustee’s Deed Upon Sale recorded in the Official Records of the County of Ventura on November 7, 2019 as Instrument No. 20191107-00137947, a true and correct copy of which is attached hereto as Exhibit 11;

12. Complaint in Benny Harris et al. v. Western Progressive, LLC et al., Ventura County Superior Court, Case No. 56-2020-00542274-CU-MC-VTA, a true and correct copy of which is attached hereto as Exhibit 12;

13. Order Granting Demurrer Without Leave to Amend in Benny Harris et al. v. Western Progressive, LLC et al., Ventura County Superior Court, Case No. 56- 2020-00542274-CU-MC-VTA, a true and correct copy of which is attached hereto as Exhibit 13; and

14. Judgment in Benny Harris et al. v. Western Progressive, LLC et al., Ventura County Superior Court, Case No. 56-2020-00542274-CU-MC-VTA, a true and correct copy of which is attached hereto as Exhibit 14.

Defendants request for judicial notice is GRANTED. (Evidence Code § 452(c, d).)

B. Legal Standard

A demurrer is a pleading used to test the legal sufficiency of other pleadings. (Cty. of Fresno v. Shelton (1998) 66 Cal.App.4th 996, 1008–09; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) It raises issues of law, not fact, regarding the form or content of the opposing party’s pleading. It is not the function of the demurrer to challenge the truthfulness of the complaint. (Unruh-Haxton v. Regents of Univ. of California (2008) 162 Cal.App.4th 343, 365, as modified (May 15, 2008).) For purpose of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true, however improbable they may be. (CCP §§ 422.10, 589.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). A demurrer is brought under Code of Civil Procedure § 430.10 (grounds), § 430.30 (as to any matter on its face or from which judicial notice may be taken), and § 430.50(a) (can be taken to the entire complaint or any cause of action within).

A demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted. A demurrer for uncertainty may be brought pursuant to Code of Civil Procedure section 430.10, subdivision (f). “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) “In general, ‘demurrers for uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.’” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)

The demurring party must file with the court, and serve on the other party, the: (1) demurrer; (2) notice of hearing; (3) memorandum of points and authorities; and (4) proof of service. (See Cal. Rules of Court, rule 3.1112(a), rule 3.1300(c), rule 3.1320; Code Civ. Proc., § 1005(b).) “A demurrer shall distinctly specify the grounds upon which any of the objections to the complaint . . . are taken. Unless it does so, it may be disregarded.” (CCP § 430.60.)

C. Discussion

1. First Cause of Action for Elder Abuse

“The substantive law of elder abuse provides that financial abuse of an elder occurs when any person or entity takes, secretes, appropriates, or retains real or personal property of an elder adult to a wrongful use or with an intent to defraud, or both. A wrongful use is defined as taking, secreting, appropriating, or retaining property in bad faith. Bad faith occurs where the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his or her representative.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174; Welf. & Inst.Code, § 15610.30.)

The Court finds that Werner’s First Cause of Action fails to plead all elements of a financial elder abuse claim because it is unclear in the first twenty-one (21) paragraphs of Werner’s Complaint that some taking, secretion, appropriation, or retention of Werner’s real or personal property occurred. (Complaint, ¶¶ 1-21.) Though Defendants note facts that they suggest render the First Cause of Action in Werner’s Complaint uncertain, the Court may not evaluate facts on demurrer. (Demurrer, MPA, p. 10:10—11:10.) However, Werner’s complaint fails to clearly identify the alleged taking central to this claim.

2. Second Cause of Action for Breach of Oral Contract

“The elements of a breach of oral contract claim are the same as those for a breach of written contract: a contract; its performance or excuse for nonperformance; breach; and damages.” (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.)

Defendants note that the statute of limitations on a breach of an oral contract under CCP § 339 is two years, and that the Subject Property in question was foreclosed upon on October 27, 2019. (Demurrer, MPA, p. 11:18-21.) Werner’s Complaint was filed on June 8, 2022. Werner’s breach of oral contract claim was filed more than two years and seven months following foreclosure. Werner’s Second Cause of Action is time-barred.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Second Cause of Action for Breach of Oral Contract in Plaintiff Llewellyn C. Werner’s Complaint is SUSTAINED without leave to amend.

3. Third Cause of Action for Breach of Written Contract

“The elements of breach of contract include the existence of a contract, plaintiff's performance or excuse for nonperformance, defendants' breach, and resulting damages.” (Coral Farms, L.P. v. Mahony (2021) 63 Cal.App.5th 719, 727 [cleaned up].)

Werner’s Third Cause of Action asserts breach of a servicer participation agreement with Fannie Mae “in which US Bank and DOES 1 through 10 ‘agreed to apply the Treasury Department’s criteria to all the loans they service, including Plaintiffs.’” (Complaint, ¶ 37.) Defendants note that “agreements under the HAMP SPA do not provide an express or implied private right of action for borrowers as third-party beneficiaries.” (Kimball v. Flagstar Bank F.S.B. (S.D. Cal. 2012) 881 F.Supp.2d 1209, 1224; Demurrer, MPA, p. 11:25-28.) The Court finds that the lack of a private right of action for borrowers in this instance precludes the Third Cause of Action for Breach of Written Contract in Werner’s Complaint.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Third Cause of Action for Breach of Written Contract in Plaintiff Llewellyn C. Werner’s Complaint is SUSTAINED without leave to amend.

4. Fourth Cause of Action for Wrongful Foreclosure

“The elements of a wrongful foreclosure cause of action are: (1) The trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.” (Citrus El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal.App.5th 943, 948 [cleaned up]; see also Turner v. Seterus, Inc. (2018) 27 Cal.App.5th 516, 525.)

Werner alleges an illegal sale, and harm. (Complaint, ¶¶ 42-57.) Werner’s Complaint does not address tender. (Demurrer, MPA, p. 12:12-13.) Defendants note that Werner’s loan ownership and beneficiary allegations are contradicted by admitted evidence. (Demurrer, MPA, p. 12:7-9; RJN, Exs. 1, 2.)

Further, judicial notice of a document does not allow the Court to assume the correctness of the document’s findings. “Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable.” (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9, 84 Cal.Rptr.2d 843, 976 P.2d 214.) To determine whether the evidence Defendants raise is reasonably disputed by Werner would force the Court to determine the sufficiency of evidence on demurrer, an inappropriate exercise during pleading analysis.

Defendants argue that because the Fourth Cause of Action for Wrongful Foreclosure in Werner’s Complaint does not address tender, it is susceptible to demurrer. The Court disagrees. Under Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062, recognized exceptions to the tender rule exist when “(1) the underlying debt is void, (2) the foreclosure sale or trustee's deed is void on its face, (3) a counterclaim offsets the amount due, (4) specific circumstances make it inequitable to enforce the debt against the party challenging the sale, or (5) the foreclosure sale has not yet occurred.” Defendants do not analyze whether any of these exceptions fit the present circumstances, and the Court is not convinced that no exception could apply.

Defendants also note that Werner references other people, allegedly deceased, as the “true owners” of the Property, without explanation. (Complaint, ¶ 27.) The Court cannot discern what, if anything, this reference means, nor can the Court locate a definitive allegation that Werner was or was not the owner of the Subject Property. Werner claims to be “the legal owner of the property that is commonly known as . . . Assessor's Parcel Number 206-0-267-070 Office of the County Recorder of the County of Los Angeles, California.” (Complaint, ¶ 59.) Recognizing that the Complaint was authored by a plaintiff in propria persona, the Court is not prepared to find that Werner was or was not the owner of the Subject Property without further evidence – which would be improper on demurrer.

“[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers and can only be dismissed for failure to state a claim if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” (Estelle v. Gamble, 429 U.S. 97, 106 [97 S. Ct. 285, 50 L. Ed. 2d 251] (1976) [cleaned up].)

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Fourth Cause of Action for Wrongful Foreclosure in Plaintiff Llewellyn C. Werner’s Complaint is OVERRULED.

5. Fifth Cause of Action for Quiet Title

“In an action to quiet title based on adverse possession the burden is upon the claimant to prove every necessary element: (1) Possession must be by actual possession under such circumstances as to constitute reasonable notice to the owner. (2) It must be hostile to the owner's title. (3) The holder must claim the property as his own under either color of title or claim of right. (4) Possession must be continuous and uninterrupted for five years. (5) The holder must pay all the taxes levied and assessed upon the property during the period.” (Preciado v. Wilde (2006) 139 Cal.App.4th 321, 325.)

Defendants note that Werner has not paid off the Loan and there cannot quiet title. (Demurrer, MPA, p. 12:16-19; Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86 [“A borrower may not, however, quiet title against a secured lender without first paying the outstanding debt on which the mortgage or deed of trust is based.”].) However, the Court may not verify such a claim without evidence that is improper on demurrer.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Fifth Cause of Action for Quiet Title in Plaintiff Llewellyn C. Werner’s Complaint is OVERRULED.

6. Sixth Cause of Action for Slander of Title and Seventh Cause of Action for Cancellation of Instrument

“To establish slander of title, a plaintiff must show: “(1) a publication, (2) which is without privilege or justification, (3) which is false, and (4) which causes direct and immediate pecuniary loss.” (Klem v. Access Ins. Co. (2017) 17 Cal.App.5th 595, 612.)

“To prevail on a claim to cancel an instrument, a plaintiff must prove (1) the instrument is void or voidable due to, for example, fraud, and (2) there is a reasonable apprehension of serious injury including pecuniary loss or the prejudicial alternation of one's position.” (Weeden v. Hoffman (2021) 70 Cal.App.5th 269, 294.)

Defendants note that Werner’s slander of title and cancellation of instrument causes of action “both allege Defendants caused the foreclosure documents to be recorded against the Property despite having no authority to do so.” (Demurrer, MPA, p. 13:3-5; Complaint, ¶¶ 64, 68-73.) Defendants note that “the recorded chain of title establishes that Defendants did have the right to record the subject documents.” (Demurrer, MPA, p. 13:5-7; RJN, Exs. 1-4.)

The Court may not verify Defendants’ assertion without an evaluation of the evidence that would be improper on demurrer. (See II.C.4. on judicially noticed evidence on demurrer.)

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Sixth Cause of Action for Slander of Title and Seventh Cause of Action for Cancellation of Instrument in Plaintiff Llewellyn C. Werner’s Complaint are both OVERRULED.

7. Eighth Cause of Action for Promissory Estoppel

“The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

The statute of limitations for promissory estoppel based on oral promises is two years. (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1224; CCP § 339(a)(1), Demurrer, MPA, p. 13:16-19.) As noted above, the Subject Property in question was foreclosed upon on October 27, 2019. (Demurrer, MPA, p. 11:18-21.) Werner’s Complaint was filed on June 8, 2022. Werner’s promissory estoppel claim was filed more than two years and seven months following foreclosure.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Eighth Cause of Action for Promissory Estoppel in Plaintiff Llewellyn C. Werner’s Complaint is SUSTAINED without leave to amend.

8. Ninth Cause of Action for Negligence

“To succeed in a negligence action, the plaintiff must show that (1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the duty, and (3) the breach proximately or legally caused (4) the plaintiff's damages or injuries.” (Thomas v. Stenberg (2012) 206 Cal.App.4th 654, 662.)

Defendants note that under CCP § 339(a)(1) the statute of limitations for negligence claims in contract actions is two years. (CCP § 339(a)(1); Demurrer, MPA, p. 13:24-26.) Werner’s Complaint was filed on June 8, 2022. Werner’s negligence claim was filed more than two years and seven months following foreclosure.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Ninth Cause of Action for Negligence in Plaintiff Llewellyn C. Werner’s Complaint is SUSTAINED without leave to amend.

9. Tenth Cause of Action for Declaratory Relief

“To qualify for declaratory relief under section 1060, plaintiffs were required to show their action (as refined on appeal) presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party. The actual controversy language in ... section 1060 encompasses a probable future controversy relating to the legal rights and duties of the parties. It does not embrace controversies that are conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546 [cleaned up].)

The Court finds sufficient allegations in Werner’s Complaint to support a finding that an actual controversy exists in the present action. Thus, the Court finds the Tenth Cause of Action for Declaratory Relief cognizable.

Defendants PHH Mortgage Corporation; Deutsche Bank National Trust Company as Trustee for IndyMac INDX Mortgage Loan Trust 2007-AR7, Mortgage Pass-Through Certificates Series 2007-AR7; Western Progressive; and Western Progressive, LLC’s demurrer to the Tenth Cause of Action for Declaratory Relief in Plaintiff Llewellyn C. Werner’s Complaint is OVERRULED.

IV. CONCLUSION