Judge: Theresa M. Traber, Case: 23STCV30992, Date: 2024-12-11 Tentative Ruling

Case Number: 23STCV30992    Hearing Date: December 11, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     December 11, 2024                TRIAL DATE: NOT SET

CASE:                         Marina Ivanoff v. Rushmore Loan Management Services, LLC, et al.

CASE NO.:                 23STCV30992           

MOTION FOR JUDGMENT ON THE PLEADINGS

MOVING PARTY:               Defendants Rushmore Loan Management Services, LLC and UMB Bank

RESPONDING PARTY(S): Plaintiff Marina Ivanoff, in pro per.  

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for injunctive relief that was filed on December 20, 2023. Plaintiff seeks to preclude Defendants from foreclosing on her home.

Defendants move for judgment on the pleadings.

TENTATIVE RULING:

Defendants’ Motion for Judgment on the Pleadings is GRANTED.

            Plaintiff shall have 30 days leave to amend as to the third cause of action only.

DISCUSSION:

            Defendants move for judgment on the pleadings.

Legal Standard

A motion for judgment on the pleadings is the functional equivalent to a general demurrer.  (Lance Camper Mfg. Corp. v. Republic Indemnity Co. of Am. (1996) 44 Cal.App.4th 194, 198).  Like demurrers, motions for judgment on the pleadings challenge the legal sufficiency of the allegations, not their veracity.  (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994). Any defects must either appear on the face of the pleading, or else be taken by judicial notice.  (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-22).  The parties’ ability to prove their respective claims is of no concern.  (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 99.)  Though the Court must accept the allegations of the complaint and answer as true (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 515), it will not do so for “conclusions of law or fact, opinions, speculation, or allegations contrary to law or [judicially noticed] facts…” (Stevenson Real Estate Servs., Inc. v. CB Richard Ellis Real Estate Servs., Inc. (2006) 138 Cal.App.4th 1215, 1219-20).

Meet and Confer

Before filing a motion for judgment on the pleadings, the moving party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the motion for judgment on the pleadings and file a declaration detailing their meet and confer efforts.  (Code Civ. Proc., § 439(a).) However, an insufficient meet and confer process is not grounds to grant or deny a motion for judgment on the pleadings. (Code Civ. Proc., § 439(a)(4).)

            Defendants filed a form Declaration on June 11, 2024 stating that Plaintiff failed to respond to the requests to meet and confer or otherwise failed to meet and confer in good faith. (Declaration of Moving Party Regarding Meet and Confer ¶ 2b.) Defendants have therefore satisfied their statutory meet and confer obligations.

Requests for Judicial Notice

Defendants request that the Court take judicial notice of (1) the Complaint in the action entitled Marina Ivanoff v. Rushmore Loan Management Services, LLC, Case No. 22STCV12119 (the “Prior Action”); (2) the Notice of Entry of Judgment filed August 30, 2022 in the Prior Action; (3): the Court of Appeal’s July 27, 2023 order affirming the judgment; and (4) the California Supreme Court’s November 15, 2023 order denying the petition for review of the Court of Appeal’s decision. These requests are GRANTED pursuant to Evidence Code section 452(d) (court records.) Defendants also request that the Court take notice of a Declaration in Opposition to an application for a Temporary Restraining Order (Exh. 10) and a Notice of Ex Parte Order to Show Cause re: Temporary Restraining Order (Exh. 16) in the prior action. As these materials are not relevant to the Court’s ruling, these requests are DENIED. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 (“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].) 

            Defendants further request that the Court take judicial notice of (5) the November 26, 2007 deed of trust with Instrument No. 20072597064; (6) a Substitution of Trustee recorded July 28, 2016 with Instrument No. 20160888081; (7) a July 28, 2016 Notice of Default with Instrument No. 20160888082; (8) a Notice of Trustee’s Sale recorded October 26, 2016 with Instrument No. 20161316151; (9) a Notice of Trustee’s Sale recorded September 25, 2018 with Instrument No. 20180981237; (11) a March 4, 2020 Substitution of Trustee with Instrument No. 20200254506; (12) a Notice of Recission of Notice of Default recorded March 4, 2020 with Instrument No. 20200254507; (13) an August 26, 2020 Corporate Assignment of Ded of Trust with Instrument No. 20201005551; (14) a June 28, 2021 Substitution of Trustee with Instrument No. 20210857507; (15) a June 9, 2021 Notice of Default with Instrument No. 20210910427; and (17) a Notice of Recission recorded February 1, 2022 with Instrument No. 20220127680. These requests are GRANTED pursuant to Evidence Code section 452(c) (official acts.)

First Cause of Action

            Defendants move for judgment on the pleadings on the first cause of action for injunctive relief on the grounds that Plaintiff’s claim is barred by claim and issue preclusion and fails to state facts sufficient to constitute a cause of action.

            In DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, the California Supreme Court clarified the distinctions between “claim preclusion” and “issue preclusion” thus:

We have frequently used “res judicata” as an umbrella term encompassing both claim preclusion and issue preclusion, which we described as two separate “aspects” of an overarching doctrine. (E.g., Boeken, supra, 48 Cal.4th at p. 797, 108 Cal.Rptr.3d 806, 230 P.3d 342; Teitelbaum Furs, Inc. v. Dominion (1962) 58 Cal.2d 601, 604, 25 Cal.Rptr. 559, 375 P.2d 439 (Teitelbaum Furs).) Claim preclusion, the “‘“primary aspect”’” of res judicata, acts to bar claims that were, or should have been, advanced in a previous suit involving the same parties. (Boeken, at p. 797, 108 Cal.Rptr.3d 806, 230 P.3d 342.) Issue preclusion, the “‘“secondary aspect”’” historically called collateral estoppel, describes the bar on relitigating issues that were argued and decided in the first suit. (Ibid.)

We have sometimes described “res judicata” as synonymous with claim preclusion, while reserving the term “collateral estoppel” for issue preclusion. (See Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896, 123 Cal.Rptr.2d 432, 51 P.3d 297 (Mycogen).) On occasion, however, we have used the term “res judicata” more broadly, even in a case involving only issue preclusion, or collateral estoppel. (See Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813, 122 P.2d 892.) We are not the only court to sometimes use the term “res judicata” with imprecision. (See, e.g., Migra v. Warren City School Dist. Bd. of Ed. (1984) 465 U.S. 75, 77, fn. 1, 104 S.Ct. 892, 79 L.Ed.2d 56.) To avoid future confusion, we will follow the example of other courts and use the terms “claim preclusion” to describe the primary aspect of the res judicata doctrine and “issue preclusion” to encompass the notion of collateral estoppel. (See ibid.) It is important to distinguish these two types of preclusion because they have different requirements.

Claim preclusion “prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.” (Mycogen, supra, 28 Cal.4th at p. 896, 123 Cal.Rptr.2d 432, 51 P.3d 297.) Claim preclusion arises if a second suit involves: (1) the same cause of action (2) between the same parties (3) after a final judgment on the merits in the first suit. (Ibid., In re Crow (1971) 4 Cal.3d 613, 622, 94 Cal.Rptr. 254, 483 P.2d 1206; Teitelbaum Furs, supra, 58 Cal.2d at p. 604, 25 Cal.Rptr. 559, 375 P.2d 439.) If claim preclusion is established, it operates to bar relitigation of the claim altogether.

Issue preclusion prohibits the relitigation of issues argued and decided in a previous case, even if the second suit raises different causes of action. (Mycogen, supra, 28 Cal.4th at p. 896, 123 Cal.Rptr.2d 432, 51 P.3d 297.) Under issue preclusion, the prior judgment conclusively resolves an issue actually litigated and determined in the first action. (Boeken, supra, 48 Cal.4th at p. 797, 108 Cal.Rptr.3d 806, 230 P.3d 342.) There is a limit to the reach of issue preclusion, however. In accordance with due process, it can be asserted only against a party to the first lawsuit, or one in privity with a party. (Bernhard v. Bank of America, supra, 19 Cal.2d at p. 812, 122 P.2d 892.)

Issue preclusion differs from claim preclusion in two ways. First, issue preclusion does not bar entire causes of action. Instead, it prevents relitigation of previously decided issues. Second, unlike claim preclusion, issue preclusion can be raised by one who was not a party or privy in the first suit. (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828, 88 Cal.Rptr.2d 366, 982 P.2d 229.) “Only the party against whom the doctrine is invoked must be bound by the prior proceeding. [Citations.]” (Ibid.) In summary, issue preclusion applies: (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. (Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, 272 Cal.Rptr. 767, 795 P.2d 1223; Vandenberg, at p. 828, 88 Cal.Rptr.2d 366, 982 P.2d 229; Teitelbaum Furs, supra, 58 Cal.2d at p. 604, 25 Cal.Rptr. 559, 375 P.2d 439.)

(DKN Holdings, LLC v. Faerber (2015) 61 Cal.4th 813, 823-25 [bold emphasis added, italics in original].)

            Defendants contend that Plaintiff seeks to relitigate identical claims and issues under the first cause of action as in a prior complaint filed in April 2022. In the Prior Action, as in this case, Plaintiff alleged that she obtained a loan modification from Defendant Rushmore on her mortgage which called for excessive mortgage payments using an improper appraisal figure for the subject property. (Complaint ¶¶ 20, 24, 32-33; RJN Exh. 1 ¶¶ 16, 19-20.) Plaintiff’s 2022 Complaint asserted five causes of action, including one for injunctive relief precluding Rushmore from foreclosing on Plaintiff’s property. (RJN Exh. 1 ¶¶ 43-47; compare Complaint ¶¶ 22-29.) Rushmore’s Demurrer to the 2022 Complaint was sustained on August 30, 2022 without leave to amend, and the action dismissed with prejudice. (RJN Exh. 2.) That decision was affirmed on appeal, with review denied by our Supreme Court. (RJN Exhs. 3-4.) A dismissal with prejudice is a final judgment on the merits. (Serv. Employees Int’t. Union v. Hollywood Park, Inc. (1983) 149 Cal.App.3d 745, 756.) Thus, the undisputed record establishes that an identical claim by Plaintiff against Defendant Rushmore was litigated to final judgment on the merits, such that claim preclusion should bar Plaintiff’s claims against Defendant Rushmore.

            As to Defendant UMB Bank, Defendants concede that UMB was not named as a party to the Prior Action. (See RJN Exh. 1.) Nonetheless, Defendants argue that UMB stands in privity with Rushmore such that they are entitled to the same result. As the parties asserting preclusion, Defendants bear the burden of establishing that they were in privity in that they shared “an identity or community of interest, with adequate representation of that interest in the first suit, and circumstances such that the nonparty ‘should reasonably have expected to be bound’ by the first suit. (Grande v. Eisenhower Med. Ctr. (2022) 13 Cal.5th 313, 326 [internal quotations omitted].) Defendants state that, at the time of the conduct complained of in 2021, UMB was the actual owner and beneficiary of the loan. (Complaint ¶ 20; RJN Exh. 13 [Assignment of Deed of Trust dated August 26, 2020].) Defendants thus contend that UMB Bank shares a community of interest with Rushmore, as loan beneficiary and servicer, but do not apply the elements of privity under California law. Rather, Defendants cite federal authorities, which do not apply California precedent in this respect and do not use an identical test for determination of privity. (See, e.g., Ghalehtak v. Fay Servicing, LLC (N.D. Cal. 2018) 304 F.Supp.3d 877, 885.) Defendant UMB Bank has therefore failed to demonstrate privity for the purpose of claim preclusion.

            That said, under the doctrine of issue preclusion, UMB Bank need not show that it is in privity with Rushmore, only that (1) there was a final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) that Defendants are asserting preclusion against one who was a party in the first suit or one in privity with that party. (DKN Holdings, LLC v. Faerber, supra, 61 Cal.4th at 825.) As stated above, the same Plaintiff asserted an identical cause of action premised on identical factual issues, which was actually litigated on the merits and therefore necessarily decided adversely to Plaintiff. Consequently, issue preclusion bars Plaintiff from relitigating those issues, whether against Rushmore or against UMB Bank.

            Accordingly, Defendants are entitled to judgment on the pleadings of the first cause of action.

Second Cause of Action: Rescission

            Defendants move for judgment on the pleadings of the second cause of action for recission of the Loan Modification Agreement on the grounds that Plaintiff’s claims are barred by claim and issue preclusion and fail to state facts sufficient to constitute a cause of action.

            Defendants contend that the second cause of action is premised on the same facts and issues as the first cause of action, and therefore commands an identical result. The Court concurs. Although Plaintiff did not assert a specific claim for equitable recission in her 2022 Complaint, she asserted identical contentions regarding the unconscionability of the loan modification and demanded a new modification of the Loan Agreement, as she does here. (Complaint ¶¶ 20, 30-36; RJN Exh. 1. ¶ 16, Prayer No. 5.) Plaintiff thus appears to be raising identical issues which were finally and necessarily determined against her in a prior action. This cause of action is therefore barred by the doctrine of issue preclusion.

            Accordingly, Defendants are entitled to judgment on the pleadings of the second cause of action.

Third Cause of Action: Violation of Homeowners’ Bill of Rights

Defendants move for judgment on the pleadings of the third cause of action for violation of the Homeowners’ Bill of Rights on the grounds that Plaintiff’s claim fails to state facts sufficient to constitute a cause of action.

Defendants argue that the third cause of action is defective because it does not specify what code provisions Defendants have allegedly violated. Statutory violations must be pled with specificity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.) Here, Plaintiff’s Complaint is devoid of any statutory citations, and thus has failed to apprise Defendants of what portions of the HBOR they alleged to have breached. (Complaint ¶ 39.) Defendants are therefore entitled to judgment on the pleadings as to the third cause of action.

Leave to Amend

            When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318).  When a plaintiff “has pleaded the general set of facts upon which his cause of action is based,” the court should give the plaintiff an opportunity to amend his complaint, since plaintiff should not “be deprived of his right to maintain his action on the ground that his pleadings were defective for lack of particulars.” (Reed v. Norman (1957) 152 Cal.App.2d 892, 900.) Accordingly, California law imposes the burden on the plaintiffs to demonstrate the manner in which they can amend their pleadings to state their claims against a defendant.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) “Denial of leave to amend constitutes an abuse of discretion unless the complaint shows on its face it is incapable of amendment.  [Citation.]  Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

Although Plaintiff requests leave to amend, she has not demonstrated how the Complaint might be amended to correct the deficiencies raised by Defendants. Moreover, the first and second causes of action are not curable as they are precluded by the August 2022 judgment. Leave to amend is therefore not proper as to those causes of action. On the other hand, as the third cause of action fails for lack of detail, rather than because the Court’s ruling on the merits precludes amendment, the Court is obligated to permit leave to amend as to that claim. (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

CONCLUSION:

            Accordingly, Defendants’ Motion for Judgment on the Pleadings is GRANTED.

            Plaintiff shall have 30 days leave to amend as to the third cause of action only.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated:  December 11, 2024                            ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.