Judge: Stephen P. Pfahler, Case: 22CHCV00171, Date: 2022-08-01 Tentative Ruling

Case Number: 22CHCV00171    Hearing Date: August 1, 2022    Dept: F49

Dept. F-49

Date: 8-1-22

Case: 22CHCV00171

Trial Date: Not Set

DEMURRER

MOVING PARTY: Defendants, Select Portfolio Servicing, Inc., et al.

RESPONDING PARTY: Plaintiff, Edith Augustt, Pro Se

RELIEF REQUESTED

Demurrer to the Complaint

·         1^st Cause of Action: Declaratory Relief

SUMMARY OF ACTION

Plaintiff Edith Augustt owns/owned certain real property located at 12436 Longacre Ave. The home was purchased in 2007 with a $1,399,900 dollar loan from third party AmeriCorps Funding, who also held the deed of trust. The loan and/or deed of trust were subsequently transferred to Chase, though Plaintiff denies the existence of any recorded substitution of trustee, though represents the transfer occurred on September 7, 2011. On August 26, 2013, Plaintiff and Chase executed a loan modification agreement, whereby the loan was divided into two. One lon listed a principal balance of $766,000, with a second “deferred interest” loan of $576,000 (the balance on the second loan was due in 2053, but it’s unclear when the loan began). The loan and/or deed of trust were subsequently assigned to TOWD Point Mortgage Trust 2018-5 and U.S. Bank, N.A. The loan was subsequently serviced by Select Portfolio Services.

Plaintiff subsequently suffered a financial setback, yet continued to make payments. Plaintiff maintains one or both loans are current. Notwithstanding the “current” representation, Plaintiff also alleges the variable rate of the loan(s) led to arrearages, thereby rendering continued payments unaffordable. On December 13, 2021, Plaintiff requested “Loan Subordination,” which was denied on January 21, 2022. Plaintiff paid a $6,144.70 charge for this service and/or as part of a loan deferment fee.

Plaintiff alleges both the lack of any properly documented and recorded substitution of trustee from AmeriCorps to Chase but also the improper retention of Covid-19 government relief programs which should have been passed on to Plaintiff in the form of loan principal forgiveness. Plaintiff also contends the denial was done in bad faith, and therefore faces potential foreclosure.

On March 16, 2022, Plaintiff, pro se, filed a complaint for declaratory judgment (relief).

RULING

Request for Judicial Notice: Granted.

Demurrer: Sustained with Leave to Amend.

Defendants, Select Portfolio Servicing, Inc., Chase Mortgage Holdings, Inc., TOWD Point Mortgage Trust 2018-5, and U.S. Bank, N.A. submits a demurrer to the complaint of Plaintiff Edith Augustt. Defendants demurrer characterizes the complaint in multiple ways, and offers a myriad of challenges, including: Plaintiff lacks a preemptive right to challenge Defendants’ right to enforce the deed of trust; lack of authority to oblige the approval of the subordination request; no available relief under the Homeowner Bill of Rights; failure to plead any statutory violation with sufficient factual particularity; failure to plead any void of deed of trust as a result of any and all assignments; and, failure to articulate a basis for declaratory relief.

The court electronic filing system shows no opposition, amended pleading or reply at the time of the tentative ruling publication cutoff.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

“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; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

Declaratory relief arises under Code of Civil Procedure section 1060, which states in part:

“Any person interested under a written instrument … or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property … may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”

“[U]nder California rules, an actual controversy that is currently active is required for such relief to be issued, and both standing and ripeness are appropriate criteria in that determination. (Citation.) One cannot analyze requested declaratory relief without evaluating the nature of the rights and duties that plaintiff is asserting, which must follow some recognized or cognizable legal theories, that are related to subjects and requests for relief that are properly before the court.”

(Otay Land Co.v. Royal Indemn. Co. (2008) 169 Cal.App.4th 556, 563.)

“[Declaratory relief] serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.” (Travers v. Louden (1967) 254 Cal.App.2d 926, 931.)

It remains unclear from the operative language in the complaint as to which agreement(s) Plaintiff relies upon in seeking relief. The court accepts the argument from Defendants that to the extent Plaintiff seeks to challenge any potential foreclosure rights and/or potentially seek a declaration of a void/voidable deed of trust, the deed of trust itself becomes an integral document for consideration of any declaration of rights. The court also considers the possibility of the application of the Homeowners Bill of Rights (HBOR) or other agreement integral to the subordination denial. All possibilities considered, the basis(es) for relief remain(s) unclear in that the court cannot determine whether any documents actually incorporate the statutory duties and obligations of the HBOR and/or other agreement, thereby presenting a basis for consideration of the declaratory relief claim.

The court therefore finds an insufficiently articulated claim for declaratory relief as presented. The demurrer is sustained with 30 days leave to amend.

Motion to Strike: Moot

Plaintiff is granted 30 days leave to amend. “Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court's order. (Citation.) The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.” (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Defendants may file a motion to strike as to any new causes of action added without leave of court. If no first amended complaint is filed within 30 days of this order, Defendants may file a motion to dismiss.

Moving Defendants to give notice.