Judge: Robert S. Draper, Case: 22STCV33659, Date: 2023-03-15 Tentative Ruling

Case Number: 22STCV33659    Hearing Date: March 15, 2023    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Defendants Elizabeth Newsom, Ro’Quintessa Ledawnika Givens, Krisshune Benjamin, and Katrina Ashton’s Motion to Quash Service of Summons and the First Amended Complaint is GRANTED.

FACTUAL BACKGROUND   

This is an action for wrongful foreclosure. The operative First Amended Complaint (“FAC”) alleges as follows.

Plaintiff Grover Henry Colin Nix, IV (“Nix”) purchased real property located at 2651 Aberdeen Ave., Los Angeles, CA (the “Subject Property”) in 2007. (FAC ¶ 17.) To finance the purchase, Nix retrained mortgage brokers J&R Lending, Inc. d/b/a First Security Lending (“First Security”). (FAC ¶ 18.) Nix’s mortgage lender was American Brokers Conduit (“ABC”), a subsidiary of American Home Mortgage Investment Corp. (“AHM”). (Ibid.) At closing, Nix signed a promissory loan secured by a deed of trust (the “Deed”) to the Subject Property in favor of ABC. (Ibid.) Neither defendant JPMorgan Chase & Co. (“Chase”), nor defendant Wilmington Trust, N.A. (“Wilmington”) provided any funds for the purchase of the Subject Property. (FAC ¶ 21.)

Shortly after closing, AHM filed for Chapter 11 bankruptcy protection in Delaware. (FAC ¶ 22.) For the next eleven years, AHM’s assets, including the Deed, were under judicial control of the Delaware Bankruptcy Court. (Ibid.) Between 2007 and 2018, the Bankruptcy Court did not sell the Deed to Chase or Wilmington. (Ibid.)

In 2012, Chase, without consideration, created a document of title conveying the Deed to a Chase entity called SAM II. (FAC ¶ 25.) SAM II is a pool of home mortgages, bundled together by a “pooling agreement.” (FAC ¶ 26.) In 2012, Wilmington became trustee of SAM II. (FAC ¶ 27.) The only document of title conveying the Deed to SAM II was on ABC’s behalf and was created in 2012; Plaintiffs contend that this document is false, as ABC was out of business in 2012, and all its assets controlled by the Bankruptcy Court. (FAC ¶ 31.) Chase and Wilmington have not produced the original promissory note, despite being asked to do so repeatedly by the Bankruptcy Court. (FAC ¶ 40.)

In investigating the creation of the allegedly false deed endorsement, Plaintiffs conducted investigation into Chase’s affairs in its Monroe, Louisiana office, where the Deed was created. (FAC ¶ 49.) Plaintiffs allege that the Deed’s fraudulent creation and endorsement was completed under the direction of senior employees in Chase’s Monroe office. (FAC ¶ 50.) Moreover, Plaintiffs allege that Chase’s Monroe office contained a document remediation office where Chase employed numerous “Quality and Compliance” employees who were not given Chase email addresses, were not part of Chase’s corporate team, and were never promoted to Chase’s corporate team. (FAC ¶ 59.)

On November 1, 2012, Chase, pursuant to the new Deed of Trust, filed a Notice of Default in the Los Angeles County Recorder to initiate nonjudicial foreclosure proceedings against Nix. (FAC ¶ 75.)  At that time, Chase informed Nix that Chase would entertain a loan modification agreement that would cure his default; Nix provided all requested documentation to Chase, and signed and notarized the Loan Modification Agreement. (FAC ¶ 76.) Shortly thereafter, Chase filed a Withdrawal of Notice of Default with the Los Angeles County Recorder. (FAC ¶ 77.) For the following 33 months, Nix paid no monthly mortgage payments, and Chase took no action. (FAC ¶ 78.)

On September 3, 2015, Chase filed a Notice of Sale on the Subject Property announcing a foreclosure sale on September 24, 2015. (FAC ¶ 80.) Nix thereafter conveyed the title to the Subject Property to plaintiff Soames Lane Trust (the “Trust”, and with Nix, “Plaintiffs”), with Nix as trustee. (FAC ¶ 80.)

On September 23, 2015 the Trust filed for Chapter 11 Bankruptcy, thereby halting the foreclosure sale. (FAC ¶ 81.) Eighteen months later, Chase and Wilmington filed a motion to lift the stay to permit the foreclosure sale. (FAC ¶ 82.) This motion was heard eight times; upon each hearing the Bankruptcy Court would ask the banks to bring forward their custodians of records to authenticate the Deed, and each time the banks refused. (Ibid.)

In 2020, the Bankruptcy Court granted Chase’s Motion for Relief from Stay as no other party had presented a colorable claim of title. (FAC ¶ 83.) The Bankruptcy Court emphasized that Plaintiffs could contest the foreclosure and related documents in state court. (Ibid.) After the Bankruptcy Court granted Chase’s stay, Plaintiffs reviewed the AHM bankruptcy docket and discovered that the conveyance to SAM II was fraudulent. (FAC ¶ 85.)

After the bankruptcy stay was listed as to Chase, Chase filed a new notice of sale with the Los Angeles County Recorder. (FAC ¶ 87.) To prevent the foreclosure sale, the Trust filed a second Chapter 11 petition. (FAC ¶ 88.) That bankruptcy court again lifted the stay as to Chase. (FAC ¶ 90.) Chase held a foreclosure sale on October 26, 2022, based on the notice of default from 2015. (Ibid.) Plaintiffs are now awaiting an unlawful detainer action. (FAC ¶ 91.)

Plaintiffs bring this action to prove that Chase’s title documents, as well as the endorsement on the Promissory note, are fake documents created with the express permission of Chase’s senior employees. (FAC ¶ 92.)

PROCEDURAL HISTORY 

On October 17, 2022, Plaintiffs filed the Complaint for Declaratory Relief.

On October 24, 2022, Plaintiffs filed a Notice of Lis Pendens.

On December 5, 2022, Plaintiffs filed the operative First Amended Complaint adding a cause of action for Wrongful Foreclosure.

On January 4, 2023, Wilmington filed a Demurrer with Motion to Strike; the hearing is scheduled for April 4, 2023.

On January 11, 2023, Chase filed a Demurrer with Motion to Strike; the hearing is scheduled for April 11, 2023.

On January 17, 2023, defendants Katrina Ashton (“Ashton”), Elizabeth Newsom (“Newsom”), Krisshune Tate Benjamin (“Benjamin”) and Ro’Quintessa Ledawnika Givens (“Givens”, and collectively, “Movants”) filed the instant Motion to Quash Service of Summons.

As of March 13, 2023, no Opposition has been filed. An Opposition was due by March 8, 2023.

DISCUSSION

I.                MOTION TO STRIKE

Movants move to quash service of the summons and First Amended Complaint pursuant to Code of Civil Procedure section 418.10.

 “A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion . . . [t]o quash service of summons on the ground of lack of jurisdiction of the court over him or her.” (C.C.P. §418.10(a)(1).) C.C.P. §418.10(a)(1) “is a limited procedural tool to contest personal jurisdiction over the defendant where the statutory requirements for service of process are not fulfilled.” (Stancil v. Superior Court (2021) 11 Cal.5th 381, 390.) 

Here, Movants contend that Plaintiffs cannot establish the Court’s personal jurisdiction over non-resident Movants.

Due process allows a state court to exercise personal jurisdiction over non-residents where certain “traditional bases” for personal jurisdiction exist, those being: (1) service on persons physically present in the forum state; (2) domicile within the state; (3) consent or appearance in the action. (In re Marriage of Fitzgerald & King (1995) 39 Cal.App.4th 1419, 1425 – 1426.) These traditional bases are separate from the “minimum contacts” analysis for personal jurisdiction. (Nobel Farms, Inc. v. Pasero (2003) 106 Cal.App.4th 654, 658.) Here, neither service, nor domicile, nor consent or appearance is at issue.

California’s long-arm statute authorizes California courts to exercise jurisdiction on any basis not inconsistent with the Constitution of the United States or the Constitution of California. (CCP § 410.10; Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th 434, 444 – 445; International Shoe Co. v. Washington (1945) 326 U.S. 310, 316.) Accordingly, a California court’s assertion of personal jurisdiction over a non-resident defendant who has not been served with process within the State comports with the requirements of the due process clause of the federal Constitution if the defendant has such minimum contacts with the State that the assertion of jurisdiction does not violate traditional notions of fair play and substantial justice. (Vons, supra, 14 Cal.4th at 444 – 445.)

The concept of minimum contacts embraces two types of personal jurisdiction over the non-resident defendant: general and specific. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 536; Vons, supra, 14 Cal.4th at 445 – 446.) A non-resident defendant may be subject to the general jurisdiction of the forum if his or her contacts in the forum state are substantial, continuous, and systematic, so that the defendant’s contacts with the forum are so wide-ranging that they take the place of physical presence in the forum as a basis for jurisdiction. (Vons, supra, 14 Cal.4th at 445 – 446; International Shoe Co. v. Washington (1945) 326 U.S. 310; Perkins v. Benguet Mining Co. (1952) 342 U.S. 437, 447 – 448; Worldwide Volkswagen Corp. v. Woodson (1980) 444 U.S. 286, 291.) If the non-resident defendant does not have substantial and systematic contacts in the forum sufficient to establish general jurisdiction, he/she/it may be subject to the specific jurisdiction of the forum, if the defendant has purposefully availed himself or herself of forum benefits, and the controversy is related to or “arises out of” a defendant’s contacts with the forum. (Vons, supra, 14 Cal.4th at 446; Asahi Metal Industry Co. v. Superior Court (1987) 480 U.S. 102, 109.) A controversy relates to or arises out of such contacts if there is a substantial connection between the forum contacts and the plaintiff’s claim. (Vons, supra, 14 Cal.4th at 452.)

Here, Movants contend that the Court does not have general jurisdiction over Movants as Movants do not reside in California, have never resided in California, and have no intention to move to California. (Givens Decl. ¶ 3; Benjamin Decl. ¶ 3; Newson Decl. ¶ 3; Ashton Decl. ¶ 3.)

Additionally, Movants contend that the Court does not have specific jurisdiction over Movants as the only allegations pertaining to Movants is their employment in the remediation department with Chase.  (FAC ¶¶ 7-10.) Of the four Movants, only Ashton remains employed by Chase. (Givens Decl. ¶ 3; Benjamin Decl. ¶ 3; Newson Decl. ¶ 3; Ashton Decl. ¶ 3.) Movants argue that the First Amended Complaint does not allege any actions on Movants part that took place in California that would substantiate Plaintiffs’ causes of action.

The Court finds that Movants have shown the absence of any minimum contacts sufficient to establish the Court’s jurisdiction over Movants. And, as Plaintiffs do not oppose the instant motions, Plaintiffs fail to prove the existence of the Court’s jurisdiction.

Accordingly, defendants Elizabeth Newsom, Ro’Quintessa Ledawnika Givens, Krisshune Benjamin, and Katrina Ashton’s Motion to Quash Service of Summons and the First Amended Complaint is GRANTED.

DATED: March 15, 2023        

____________________________ 

Hon. Robert S. Draper

Judge of the Superior Court