Judge: Thomas Falls, Case: 21PSCV00055, Date: 2023-01-11 Tentative Ruling

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Case Number: 21PSCV00055    Hearing Date: January 11, 2023    Dept: O

Hearing DATE:                      Wednesday, January 11, 2023

Counsel Thomas’s Motion to Be Relieved as Counsel for Plaintiff

            Responding Party: Unopposed

Tentative Ruling

Counsel Thomas’s Motion to Be Relieved as Counsel for Plaintiff is TBD/GRANTED if Counsel provides proof of timely service of notice of the motion to Plaintiff.

Background

This is a wrongful foreclosure case. Plaintiff Ih Heen Chang (“Plaintiff”) alleges the following against Defendants Aegis and Ashwood TD Services, LLC (“Defendant Ashwood”): In 2018, Plaintiff entered into a written loan agreement wherein she secured $50,000 secured by the Property. Plaintiff fell behind on her payments. On January 8, 2020, a Notice of Default (“NOD”) and Election to Sell Under Deed of Trust was recorded on the Property. On April 14, 2021, Ashwood recorded a Notice of Trustee’s Sale, setting a trustee’s sale for May 7, 2020. On April 28, 2020, filed for Chapter 13 Bankruptcy. During the course of bankruptcy, Plaintiff made payments to Aegis. The bankruptcy was dismissed on September 10, 2020. Plaintiff and Aegis agreed that if Plaintiff increased the balance owed to $8,000, Aegis would agree to a loan modification. Ashwood proceeded with a foreclosure sale on September 15, 2020. Plaintiff never received notice of this date. On September 23, 2020, Defendant Ashwood, on behalf of Aegis, recorded a Trustee’s Deed Upon Sale. The basis of Plaintiff’s action against Defendants is that:

Because Defendants and its authorized representatives failed to comply with the requirements of the Notice of Default provisions of California Civil Code section 2924, et seq. by not notifying Plaintiff that Defendant had changed its prior trustee under its Deed of Trust, and the Notice of Sale provisions of California Civil Code section 2924, et seq., were violated as she did not receive proper notice of the September 15, 2020 sale date. There was no subsequent incidental right to enforce any deed of trust and proceed with a non-judicial foreclosure. Further, pursuant to California Civil Code section 2923.5, a trustee may not file a Notice of Default pursuant to California Civil Code section 2924, et seq., until thirty (30) days after satisfying the due diligence requirements outlined above. As Plaintiff was never contacted by ASHWOOD TD SERVICES, LLC, the beneficiary, or their agents, they failed to comply with California Civil Code sections 2923.5 and 2924 et seq., and the recorded Notice of Default on Plaintiff’s Property is void.

(First Amended Complaint (“FAC”) ¶¶26, 27) (emphasis added).

On January 22, 2021, Plaintiff filed suit against Defendants and Doe Defendants for:

1.      Wrongful Foreclosure

2.      Promissory Estoppel

3.      Fraud and

4.      Negligent Misrepresentation

5.      Unfair Business Practices

On March 17, 2021, the court sustained with leave to amend Defendant Aegis’s Demurrer to Plaintiff’s Complaint.

On April 5, 2021, Plaintiff filed her First Amended Complaint (“FAC”).

On December 29, 2021, Plaintiff filed a Substitution of Attorney.

On April 15, 2022, Defendant Aegis filed an instant Motion for Summary Judgment (“MSJ”), which the court granted.

On August 11, 2022, a notice of filing of notice of appeal was filed.

On December 16, 2022, Plaintiff’s Counsel filed the instant motion.

Discussion

Counsel seeks to be relieved as counsel “[t]here exists an actual conflict of interest between Counsel and Clients which mandates withdrawal under rule 3-700.”

California Rules of Professional Conduct Rule 3-700 (b), provides that mandatory withdrawal is necessary if:

(1) The member knows or should know that the client is bringing an action, conducting a defense, asserting a position in litigation, or taking an appeal, without probable cause and for the purpose of harassing or maliciously injuring any person; or

(2) The member knows or should know that continued employment will result in violation of these rules or of the State Bar Act; or

(3) The member's mental or physical condition renders it unreasonably difficult to carry out the employment effectively.

Here, though Counsel has not disclosed the details due to confidentiality, the court finds Counsel’s declaration is sufficient to establish the good faith basis for mandatory withdrawal. Notwithstanding the foregoing, the court’s only hesitation with denying the motion is that the case is on appeal, meaning Plaintiff will likely be prejudiced without counsel. As to any prejudice, Plaintiff/client has not filed an opposition to explain any such prejudice. However, the proof of service attached to all the required documents does not indicate that Plaintiff/client has been served with notice of the motion; only Julian Bach (Defense Counsel for AEGIS ASSL'T BACKED SECIJRITIFS, LLC) has been served.

Notwithstanding the foregoing, considering that the proposed order (MC-053) form indicates that Plaintiff has been served via mail, the court will grant the motion if Counsel provides proof of service that it timely served Plaintiff with notice of the motion, which is to be provided prior or during the hearing.

Conclusion

Based on the foregoing, the motion is TBD. However, if proof of service is provided prior or during the hearing, then the motion will be granted effective upon the filing of proof of court’s order relieving Counsel, which is to be sent to Plaintiff, Defendants, and all other parties who have appeared in the case.