Judge: Michael Small, Case: 21STCV20483, Date: 2023-07-11 Tentative Ruling

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Case Number: 21STCV20483    Hearing Date: July 11, 2023    Dept: 57

The Fourth Amended Complaint ("4AC") of Plaintiff Southern California Conference ("SCC") asserts two causes of action against Defendant Evergreen Advantage, LLC ("Evergreen") -- the seventh cause of action for declaratory relief and the ninth cause of action for quiet title.  Evergreen has demurred to the 4AC. The Court is overruling the demurrer.

Taking the ninth cause of action first, Evergreen asserts in the demurrer that SCC has failed, as it did in prior iterations of its complaint, to plead around the defense to the quiet title claim that is raised by SCC's allegations --- namely, that Evergreen is a bona fide encumbrancer for value of the real properties listed in the 4AC as having mortgages on them that are held by Evergreen.  The Court disagrees.  The 4AC contains new allegations as to the Evergreen mortgages that enable SCC, at the pleading stage, to avoid Evergreen's defense that it  is a bona fide encumbrancer for value.  Those allegations also enable SCC to avoid at the pleading stage the requirement that a party seeking to quiet title to a property on which a mortgage is held must show that it has tendered payment of the mortgage.  The tender requirement does not apply when a mortgage is procured by fraud.  Here, the 4AC alleges fraud in connection with the mortgages on the properties that Evergreen holds.  

Turning to the seventh cause of action, because the Court has concluded that the 4AC sufficiently alleges a quiet title claim against Evergreen, there is necessarily a viable claim for declaratory relief against Evergreen as well.

Evergreen also argued in the demurrer to the 4AC that SCC has failed to allege that it has standing to sue Evergreen.  Here, too, the Court disagrees.  In the Court's view, the allegations in the 4AC are sufficient to support SCC's standing to sue.