SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 6, Honorable Theodore C. Zayner Presiding
Maggie Marin, Courtroom Clerk
191 North First Street, San Jose, CA 95113
Telephone: 408-882-2160
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
DATE: JANUARY 28, 2016
TIME: 9 A.M.
EFFECTIVE JANUARY 19, 2016, ALL LAW & MOTION CASES
SET IN DEPARTMENT 21 WILL BE HEARD BY JUDGE
THEODORE C. ZAYNER IN DEPARTMENT 6
PREVAILING PARTY SHALL PREPARE THE ORDER
(SEE RULE OF COURT 3.1312)
LINE #
CASE #
LINE 1
2015-1-CV-285889
LINE 2
2015-1-CV-285957
LINE 3
2015-1-CV-285957
LINE 4
2015-1-CV-287198
LINE 5
2013-1-CV-244905
LINE 6
2010-1-CV-167069
LINE 7
2014-1-CV-261702
LINE 8
2014-1-CV-261702
LINE 9
2014-1-CV-261702
CASE TITLE
RULING
Salazar v Bank of
America et al
Garcia v The Bank
of New York
Mellon, et al
Control/Click Line 1 for tentative ruling.
Garcia v The Bank
of New York
Mellon, et al
Loyola Corners
Estate, LLC et al v
City of Los Altos
Control/Click Line 3 for tentative ruling.
Control/Click Line 2 for tentative ruling.
Control/Click Line 4 for tentative ruling.
Jordan-Macias v
Control/Click Line 5 for tentative ruling.
Onewest Bank, et al
Ammini, et al v
Off Calendar. Notice of Removal filed.
Antara Biosciences,
Inc. et al
Doe, et al v Hong, et Off Calendar per request of moving party.
al
Doe, et al v Hong, et Off Calendar per request of moving party.
al
Doe, et al v Hong, et Off Calendar per request of moving party.
al
LINE 10 2013-1-CV-250570
Laue v Ortiz
Control/Click Line 10 for tentative ruling.
LINE 11 2013-1-CV-250570
Laue v Ortiz
Control/Click Line 11 for tentative ruling.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 6, Honorable Theodore C. Zayner Presiding
Maggie Marin, Courtroom Clerk
191 North First Street, San Jose, CA 95113
Telephone: 408-882-2160
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 12 2014-1-CV-260619
Drake v Yanovsky
LINE 13 2015-1-CV-279978
Miletak v Royal
Coach Tours
LINE 14 2015-1-CV-281200
Le v Nguyen, et al
LINE 15 2014-1-CV-259355
LINE 16
LINE 17
LINE 18
LINE 19
LINE 20
LINE 21
LINE 22
LINE 23
LINE 24
LINE 25
LINE 26
LINE 27
LINE 28
LINE 29
LINE 30
Proof of Service in Court file. No Opposition.
Motion for Leave to File Amendment to
Complaint is GRANTED.
Control/Click Line 13 for tentative ruling.
Plaintiff’s Motion for Leave to File a Fourth
Amended Complaint is GRANTED.
Banuelos v Safeway, Control/Click Line 15 for tentative ruling.
Inc.
Calendar line 1
Case Name: Salazar, et al. v. Bank of America, N.A., et al.
Case No.:
2015-1-CV-285889
This is a wrongful foreclosure action concerning real property (“the Property”) owned
by plaintiffs Davin Lyn Peck and Celia J. Salazar (collectively, “Plaintiffs”). In the complaint,
Plaintiffs assert causes of action against defendants Bank of America, N.A. (“BANA”) and
MTC Financial Services, Inc. d.b.a. Trustee Corps (“MTC”) (collectively, “Defendants”) for:
(1) intentional interference with contractual relations; (2) violation of the Homeowner Bill of
Rights (“HBOR”) Civil Code section 2924.17; (3) negligent misrepresentation; and (4) “final
injunction.”
MTC demurs to the complaint as a whole and to each cause of action for failure to state
a claim, and makes a request for judicial notice in support thereof. (See Code Civ. Proc.,
§ 430.10, subd. (e).) Plaintiffs oppose the demurrer and MTC’s request for judicial notice.
I.
Judicial Notice
MTC requests judicial notice of: (a) the deed of trust (“DOT”) recorded against the
Property on May 20, 2004 (“DOT”); (b) the interspousal transfer deed recorded
November 30, 2005; (c) the subordination agreement recorded on November 30, 2005; (d) the
senior deed of trust recorded against the Property on November 30, 2005 (“2005 DOT”);
(e) the interspousal transfer deed recorded December 6, 2005; (f) the assignment of the DOT
(“ADOT”) recorded June 15, 2015; (g) the substitution of trustee (“SOT”) recorded
June 15, 2015; (h) the notice of default (“NOD”) recorded on June 15, 2015; and (i) the notice
of trustee’s sale (“NOTS”) recorded on September 21, 2015. Each item is a recorded
document that is relevant to pending issues and therefore subject to judicial notice. (See Evid.
Code, § 452, subd. (c); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th
256, 264-265; see also Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301.)
Plaintiffs argue that the Court should not take judicial notice of these documents
because they dispute the facts contained therein. Their argument lacks merit. “The official act
of recordation and the common use of a notary public in the execution of such documents
assure their reliability, and the maintenance of the documents in the recorder’s office makes
their existence and text capable of ready confirmation, thereby placing such documents beyond
reasonable dispute.” (Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th, at pp. 264265.) Accordingly, MTC’s request for judicial notice is GRANTED as to the existence of the
documents at issue, the fact of their recordation, the dates upon which they were recorded and
executed, the parties reflected in the documents, the documents’ legally operative language,
and the legal effect of the documents. (See id., at p. 265.)
II.
Demurrer
On demurrer, courts admit “all material facts properly pleaded” and facts subject to
judicial notice, but not contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.) Courts also admit facts in exhibits attached to the subject
complaint, and facts in such exhibits are given precedence over inconsistent allegations in the
complaint. (Mead v. Sanwa Bank Cal. (1998) 61 Cal.App.4th 561, 567-568.) Courts “will not
close their eyes to situations where a complaint contains allegations of fact inconsistent with
attached documents, or allegations contrary to facts which are judicially noticed.” (Del E.
Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)
The documents subject to judicial notice disclose the following facts: Plaintiffs entered
into a loan agreement with Countrywide in the amount of $407,950 secured by the DOT
recorded against the Property that named Countrywide Bank, N.A. (“Countrywide”) as
beneficiary in May 2004. (Compl., ¶ 7, & Ex. 1.) In November 2005, Plaintiffs granted the
Property to Peck as his separate property, Peck borrowed $582,000 from Sovereign Bank
secured by the 2005 DOT against the Property, and Countrywide agreed that the 2005 DOT
would be the senior lien and the DOT would be the junior lien. (MTC’s RJN, Exs. B-D.) The
following month, Peck transferred the Property to Plaintiffs as joint tenants. (Id., Ex. E.)
Countrywide assigned the beneficial interest in the DOT to BANA by recording the ADOT on
June 15, 2015. (Id., Ex. F.) The same day, BANA substituted MTC as trustee under the DOT
by recording the SOT. (Id., Ex. E.) Also on June 15, 2015, MTC recorded the NOD, stating
that as of June 11, 2015, Plaintiffs were in default on the DOT. (Id., Ex. H.) MTC recorded
the NOTS on September 21, 2015, indicating that Plaintiffs were still in default, and the
foreclosure sale of the Property was scheduled for October 23, 2015. (Id., Ex. I.)
In the complaint filed on September 21, 2015, Plaintiffs allege the following:
Countrywide never assigned the beneficial interest in the DOT to BANA as evidenced by
articles in the Wall Street Journal and other publications. (Compl., ¶¶ 11, 18, & 33-35.) The
ADOT was not actually executed by Countrywide, but rather, it was executed by BANA. (Id.,
¶¶ 12-15.) Therefore, the assignment to BANA is void, and the subsequently-recorded SOT
naming MTC as trustee is also void. (Id., ¶¶ 16, 32, & 37-40.)
MTC’s assertion that Plaintiffs must allege that they tendered the amount of the
indebtedness lacks merit because the foreclosure sale has not yet occurred. The requirement
that the borrower tender the amount of indebtedness to challenge an irregularity in the nonjudicial foreclosure procedure does not necessarily apply when the borrower challenges the
validity before the sale has occurred. (See Munger v. Moore (1970) 11 Cal.App.3d 1, 7; see
also Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 225.)
Next, MTC argues that Plaintiffs lack standing to challenge the validity of the
assignment of the beneficial interest to BANA and the substitution of MTC as trustee, the
claims are based on privileged communications, and Plaintiffs have not otherwise adequately
alleged facts to support their claims. These arguments are discussed in turn below.
A.
Plaintiffs’ Standing
“California’s nonjudicial foreclosure scheme is set forth in Civil Code sections 2924
through 2924k, which ‘provide a comprehensive framework for the regulation of a nonjudicial
foreclosure sale pursuant to a power of sale contained in a deed of trust.’” (Gomes v.
Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1154, quoting Moeller v. Lien
(1994) 25 Cal.App.4th 822, 830.) No statute allows a borrower to assert a claim, before the
foreclosure sale, to determine whether the foreclosing entities have the authority to foreclose,
and courts have refused to create such a cause of action. (Id., at p. 1155; Robinson v.
Countrywide Home Loans, Inc. (2011) 199 Cal.App.4th 42, 46.) A borrower lacks standing to
challenge the validity of any assignment or substitution because a promissory note is a
negotiable instrument and the borrower must anticipate that it might be transferred to another
creditor. (Id., at pp. 1154-1155; Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216
Cal.App.4th 497, 515.) An assignment merely substitutes one creditor for another without
changing the borrower’s underlying obligation to repay the amount owed on the note. (Jenkins
v. JP Morgan Chase Bank, N.A., supra, 216 Cal.App.4th, at p. 515; see also Fontenot v. Wells
Fargo Bank, N.A., supra, 198 Cal.App.4th, at p. 272.) Accordingly, Plaintiffs cannot state any
cause of action against MTC based on the allegedly ineffective assignment to BANA and
resulting invalidity of the SOT substituting MTC as trustee.
In opposition, Plaintiffs rely on Cockerell v. Title Insurance & Trust Co. (1954) Cal.2d
284 for the proposition that the defendant only has standing if it can prove by a preponderance
of the evidence that it possesses a valid assignment of the deed of trust. Plaintiffs’ reliance on
that case is misplaced, and they misunderstanding the concept of standing. Standing pertains
to a plaintiff’s ability to allege injury, not a defendant’s ability to assert a defense. (See
Coldren v. Hart, King, & Coldren, Inc. (2015) 239 Cal.App.4th 237, 245.) Furthermore,
Plaintiffs’ claims are predicated on the allegation that BANA lacks evidence to prove that it
received an assignment of the beneficial interest in the DOT from Countrywide in exchange for
value. (E.g., Compl., ¶¶ 75-102.) In opposition, Plaintiffs insist that Defendants must present
proof that BANA paid consideration in exchange for the assignment of the beneficial interest
from Countrywide under Civil Code section 2924.17. This argument lacks merit for several
reasons. First, Civil Code section 2924.17 only imposes duties on “a mortgage servicer,” not a
trustee, and Plaintiffs do not allege that MTC is a mortgage servicer. (See Civ. Code, §
2924.17.) Second, Civil Code section 2924.17 does not require an assignment of a beneficiary
or substitution of trustee under a deed of trust to be supported by evidence. (See ibid.) Third,
the copy of the ADOT attached to the complaint expressly states that Countrywide received
value in exchange for the assignment to BANA. (Compl., Ex. 2.) This is read into the
complaint and takes precedence over contrary allegations. (See Mead v. Sanwa Bank
California, supra, 61 Cal.App.4th, at pp. 567-568.) Most importantly, the plaintiff cannot state
a claim based on the alleged lack of evidence to support a purported assignee’s authority under
a deed of trust, since such a claim is still an improper challenge to the foreclosing entity’s
authority to foreclose. (Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219
Cal.App.4th 75, 85.) Therefore, Plaintiffs cannot state a viable cause of action against MTC
based on the alleged absence of evidence to support the validity of the assignment to BANA.
Plaintiffs’ assertion that the ADOT and SOT are void as the result of the allegedly
invalid or improper assignment to BANA (e.g., Compl., ¶ 16) is a legal contention or
conclusion that is not accepted on demurrer. (See Blank v. Kirwan, supra, 39 Cal.3d, at
p. 318.) In opposition, they rely on Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 8
(“Ram”) for the proposition that a foreclosure sale is “rendered void when the foreclosure sale
is conducted by an entity that lacks the authority to do so.” Their reliance on that case is
misguided, since the court found that the foreclosure sale was not rendered void due to the fact
that a substitution of trustee was not recorded until he after the sale had occurred. (Ram, supra,
at pp. 6-20.) Moreover, in this case, the SOT was recorded concurrently with the NOD.
(Compl., Ex. 3; MTC’s RJN, Exs. G-H.) Once recorded, a substitution of trustee constitutes
conclusive evidence of the authority of the substituted trustee or his or her agents to act. (Civ.
Code, § 2934a, subd. (d).) Thus, the ADOT and the SOT are not void, and the SOT is
conclusive evidence of MTC’s authority to conduct the foreclosure sale.
All four of Plaintiffs’ claims against MTC are based on the invalidity of the assignment
to BANA, the lack of evidence to prove that the assignment was valid, and the resulting
ineffectiveness of the SOT. (Compl., ¶¶ 55-59, 87-102, 112-117, & 124-129.) For the reasons
set forth above, Plaintiffs cannot state a cause of action based on this alleged theory of liability.
B.
Privileged Communications
MTC persuasively argues that Plaintiffs cannot state any viable cause of action based
on allegedly false statements in recorded documents because such statements are privileged
communications. (See Civ. Code § 2924, subd. (d); see also Civ. Code, § 47.) This privilege
provides a significant level of protection to trustees, leaving them open to liability only if they
act with malice. (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 340.) In this context,
malice means “a wanton and reckless disregard of the consequences and of the rights” of
others. (Id., at p. 344.) Plaintiffs allege that MTC acted negligently by knowingly relying
upon the invalid ADOT without being lawfully substituted as trustee by the correct lender,
Countrywide. (Compl., ¶¶ 56-59, 63, & 109-117, & Exs. 2-4.) Plaintiffs do not allege that
MTC made any false statement in the recorded documents with malice. MTC’s conduct is
therefore privileged.
C.
Sufficiency of the Facts Alleged in Support of Each Claim
The only allegations against MTC in support of the claims for intentional interference
with contractual relations and negligent misrepresentation (first and third causes of action)
arise from Plaintiffs’ challenge of the assignment to BANA and MTC’s statements in recorded
documents. (Compl., ¶¶ 56-59, 63, & 109-117, & Exs. 2-4.) Thus, they have not adequately
pleaded the first and third causes of action.
Plaintiffs’ claim for violation of Civil Code section 2924.17 of the HBOR (second
cause of action) is based on the alleged lack of evidence to support the assignment to BANA.
For the reasons set forth above, Plaintiffs cannot state a claim for violation of this statute
against MTC because it is not alleged that MTC is a loan servicer, and regardless, the statute
does not require an assignment or a substitution to be supported by evidence. (See Civ. Code,
§ 2924.17.) Also, the HBOR only applies to first lien mortgages or deeds of trust. (Civ. Code,
§ 2924.15.) The DOT is a junior lien, and the Sovereign DOT is the first lien deed of trust
against the Property. (MTC’s RJN, Exs. A, C, & D.) Plaintiffs therefore have not stated a
viable claim for violation of the HBOR against MTC.
As for the claim for injunctive relief (fourth cause of action), that claim is based on the
same allegations related to the invalidity of the ADOT and the SOT, the lack of evidence
supporting the assignment, and the false statements in recorded documents. (Compl., ¶¶ 122129.) Injunctive relief is a remedy, not a cause of action, and “a cause of action, and a cause
of action must exist before injunctive relief may be granted.” (Shell Oil v. Richter (1942) 52
Cal.App.2d 164, 168.) Since Plaintiffs have not stated a viable cause of action, it follows that
they have not sufficiently pleaded a claim for injunctive relief.
In sum, Plaintiffs have not stated—and cannot state—any cause of action based on their
alleged theory of liability. The general demurrer will therefore be sustained. Plaintiffs do not
request leave to amend or specify how the defects identified above may be cured by amending
the complaint. Leave to amend should be denied where the facts are not in dispute and the
nature of the claim is clear, but no liability exists under substantive law.” (Jenkins v. JP
Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 535.) Here, Plaintiffs cannot state a
claim based on their asserted theory of liability. Accordingly, MTC’s general demurrer to the
complaint as a whole for failure to state a claim is SUSTAINED WITHOUT LEAVE TO
AMEND.
- oo0oo -
Calendar line 2
Case Name: Garcia v. The Bank of New York Mellon, et al.
Case No.:
2015-1-CV-285957
This is a wrongful foreclosure action against defendants the Bank of New York Mellon
f.k.a. The Bank of New York (“BNYM”) as trustee for the holders of the CWALT, Inc.
Alternative Loan Trust 2005-652 Mortgage Pass-Through Certificate Series 2005-62 (“the
Trust”),1 Select Portfolio Servicing, Inc. (“SPS”), The Wolf Law Firm (“the Firm”), Mortgage
Electronic Registration Systems, Inc. (“MERS”),2 Barbara DiPrimo (“DiPrimo”), and Does 120 (collectively, “Defendants”).
In the first amended complaint (“FAC”), plaintiff Jerry Garcia (“Plaintiff”) asserts
causes of action against BNYM as trustee for the Trust, SPS, the Firm, DiPrimo, and Does 120 for: (1) “statutory violations”; (2) declaratory judgment; (3) slander of title; (4) attempted
unlawful foreclosure; (5) unfair business practices in violation of the unfair competition law
(“UCL”); and (6) fraud.3 He only asserts the second cause of action for declaratory judgment
against MERS. BNYM as trustee for the Trust, SPS, and MERS (collectively, “Demurring
Defendants”) demur to the FAC as a whole and to each cause of action for failure to state a
claim, and make a request for judicial notice in support thereof. (See Code Civ. Proc. [“CCP”],
§ 430.10, subd. (e).) Plaintiff opposes the demurrer and makes a request for judicial notice in
support of the opposition.
I.
Judicial Notice
Demurring Defendants request judicial notice of (a) the deed of trust (“DOT”) recorded
on September 30, 2005; (b) the substitution of trustee (“SOT”) recorded on May 27, 2015; and
(c) the original complaint filed on September 22, 2015. Each item is a recorded real property
record or court record that is relevant to pending issues and therefore subject to judicial notice.
(See Evid. Code, § 452, subds. (c)-(d); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198
Cal.App.4th 256, 264-265; see also Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301; see also
People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.) Thus,
Demurring Defendants’ request for judicial notice is GRANTED.
Plaintiff requests judicial notice of the DOT recorded on September 30, 2005. This
item is a relevant recorded real property record that is subject to judicial notice. (See Evid.
Code, § 452, subd. (c); see also Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th,
at pp. 264-265; see also Gbur v. Cohen, supra, 93 Cal.App.3d, at p. 301.) Plaintiff’s request
for judicial notice is therefore GRANTED.
1
Erroneously sued as trustee for the holders of the Alternative Loan Trust 2005-652 Mortgage PassThrough Certificate Series 2005-62.
2
3
Erroneously sued as MERSCorp Holdings, Inc.
In the FAC, the declaratory judgment and slander of title claims are both labeled as the second cause of
action, and the subsequent claims are numbered as the third through fifth causes of action. For clarity, the Court
will refer to the causes of action in consecutive numerical order.
II.
Demurrer
Before deliberating the merits of Demurring Defendants’ demurrer for failure to state a
claim, the Court will address several procedural issues raised by Plaintiff in the opposition.
A.
Procedural Issues
Without citing any legal authority, Plaintiff contends that this demurrer should be
continued to be heard concurrently with DiPrimo’s demurrer set to be heard on
March 17, 2016. The basis for his request is that a case is currently pending before the
California Supreme Court— Yvanova v. New Century Mortgage Corporation, review granted
August 27, 2014, S218973—addresses issues concerning a homeowner’s ability to challenge
an assignment under a deed of trust. (Plaintiff’s Opp’n, at p. 1:5-13.) Plaintiff seeks a
continuance because the California Supreme Court might issue a favorable opinion in that case
sometime before the date set for the hearing on DiPrimo’s demurrer. The Court will not
continue this matter simply because, at some unspecified time in the future, the California
Supreme Court will issue an opinion that might constitute a change in the law. After the
California Supreme Court issues its opinion, Plaintiff may make a code-compliant motion for
reconsideration, if necessary. (See CCP, § 1008.) Plaintiffs’ request for a continuance is
therefore denied.
In addition, Plaintiff takes issue with the fact that Demurring Defendants refer to the
original complaint in their demurrer. (Plaintiff’s Opp’n, at p. 3:17-24.) A plaintiff’s prior
complaint is subject to judicial notice, and a demurrer considers all matters alleged in the
operative complaint and subject to judicial notice. (Larson v. UHS of Rancho Springs, Inc.
(2014) 230 Cal.App.4th 336, 344.) Thus, it is not improper for Demurring Defendants to refer
to the original complaint support of their demurrer.
Finally, Plaintiff takes issue with the fact that Demurring Defendants refer to federal
cases in support of their demurrer, but did not submit an appendix of those federal decisions as
required by California Rules of Court, rule 3.1113(i). (Plaintiff’s Opp’n, at p. 4:16-28.) That
rule simply states that a judge may require a party to submit an appendix of non-California
authorities; it does not require a party to submit such an appendix. (Cal. Rules of Court, rule
3.1113(i).) Plaintiffs’ argument therefore lacks merit.
To summarize, Plaintiffs’ procedural arguments are not well-taken. The Court will
therefore consider the merits of the pending demurrer.
B.
Merits of the Demurrer
On demurrer, courts admit “all material facts properly pleaded” and facts subject to
judicial notice, but not contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.) Courts also admit facts in exhibits attached to the subject
complaint, and facts in such exhibits are given precedence over inconsistent allegations in the
complaint. (Mead v. Sanwa Bank Cal. (1998) 61 Cal.App.4th 561, 567-568.)
1.
Facts at Issue
The FAC and matters subject to judicial notice disclose the following facts: Plaintiff
borrowed $696,400 pursuant to a promissory note (“the Note”) secured by the DOT recorded
against the Property in September 2005, naming MERS as beneficiary and CTC Real Estate
Services as trustee. (FAC, ¶¶ 19-20 & Plaintiff’s RJN, Ex. 1.) DiPrimo, as Assistant Secretary
of MERS, recorded a substitution of trustee and assignment (“SOT/ADOT”) on
September 2, 2009, and a notary public notarized that document upon sufficient evidence to
confirm DiPrimo’s identity and authority to act on behalf of MERS. (FAC, ¶¶ 21-23, & Ex. 1.)
Under the SOT/ADOT, MERS substituted Recontrust as trustee under the DOT and assigned
the beneficial interest in the DOT and the Note to BNYM as trustee for the Trust. (Id., Ex. 1.)
BNYM as trustee for the Trust caused the SOT to be recorded on May 27, 2015, thereby
substituting the Firm as trustee under the DOT. (Demurring Defendants’ RJN, Ex. B.) The
Firm recorded the notice of default (“NOD”) on May 27, 2015, stating that Plaintiff defaulted
and owed $382,404.81 on the Note as of May 5, 2015. (FAC, ¶ 24, Ex. 2.) The Firm recorded
the notice of trustee’s sale (“NOTS”) on September 4, 2015 stating that the unpaid balance on
the Note was over $1 million, and the foreclosure sale was scheduled for September 30, 2015.
(Id., ¶ 25, Ex. 3.) Plaintiff filed the complaint on September 22, 2015. (Demurring
Defendants’ RJN, Ex. C.)
In the FAC, Plaintiff alleges that Defendants acted in furtherance of a joint venture or
conspiracy to exercise an alleged power-of-sale and deprive him of his property and legal
rights. (FAC, ¶¶ 13-14.) Plaintiff asserts that the language in the SOT/ADOT that refers to the
transfer of the right to receive payment under the Note to BNYM as trustee for the Trust
somehow “stripped the note of any negotiability, making it a monetary contract only.” (Id.,
¶ 21.) He also contends that the SOT/ADOT should be deemed null and void because DiPrimo
worked for Recontrust and has never been an agent of MERS, and thus, the SOT/ADOT is
fraudulent. (Id., ¶¶ 22-23 & 34-48.) Plaintiff alleges that as a result of the fraudulent
assignment, the foreclosure process does not comply with Civil Code sections 2924 and
2924.17, the NOD and the NOTS are null, void, and Defendants have committed fraud. (Id.,
¶¶ 29-33 & 41-61.) Simply put, all of Plaintiff’s claims are based on the contention that
ADOT/SOT, and the subsequently-recorded NOD and NOTS, are void based on the allegation
that DiPrimo lacked the authority to execute the ADOT/SOT for MERS.
2.
Analysis
In support of the demurrer, Demurring Defendants argue that Plaintiff has not
adequately pleaded any cause of action against them because he lacks standing to challenge the
assignment, and allegations of robo-signing—i.e. the execution of documents without
reviewing them to ensure their accuracy—cannot support a viable cause of action. In
opposition, Plaintiff contends that his causes of action are not based solely on allegations of
robo-signing; rather, his claims are based on the allegation that the SOT/ADOT is fraudulent
and invalid. (Plaintiff’s Opp’n, at pp. 3:25-4:5.)
To state a claim based on an irregularity in the non-judicial foreclosure process, the
plaintiff must allege resulting prejudice. (Civ. Code, § 2924.12, subd. (a).) A borrower in
default lacks standing to seek relief based on a claim that an assignment is void due to an
allegation of robo-signing because he cannot allege harm, given that the foreclosure proceeding
was commenced by the default, not on any defect in the assignment. (Javaheri v. JPMorgan
Chase Bank, N.A. (C.D. Cal., Aug. 13, 2012, No. 2:10-CV-08185-ODW) 2012 WL 3426278,
at *6; see also Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th, at p. 272.) Here,
matters subject to judicial notice show that Plaintiff defaulted on the Note. (Demurring
Defendants’ RJN, Ex. 1.) Plaintiff does not allege that the SOT/ADOT resulted in any actual
prejudice. Therefore, he lacks standing to state a claim based on the claim that the SOT/ADOT
is void due to DiPrimo’s alleged lack of authority to execute the document for MERS.
Next, Plaintiff relies on Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079
(“Glaski”) for the proposition that, under California’s Homeowner Bill of Rights (“HBOR”)
effective January 1, 2013, a borrower may state a claim to challenge an allegedly void
assignment under a deed of trust. (Plaintiff’s Opp’n, at pp. 5:1-6, 6:3-5, 6:9-10, & 8:14-17.)
As Demurring Defendants’ persuasively argue, Glaski is factually distinguishable. The court
in Glaski held that a borrower had standing to challenge a foreclosure based assignments that
were allegedly rendered void for having occurred after the securitized trust’s closing date in
violation of the trust’s pooling and service agreement. (Glaski, supra, at 1093-1098.) Here, in
contrast, Plaintiff does not allege that the assignments are void based on any irregularity in the
securitization of the loan. Thus, the holding in Glaski does not apply. In any event, even if the
Glaski decision was applicable to this case, it is inconsistent with the weight of California
authority. (See, e.g., Jenkins v. JP Morgan Chase Bank N.A. (2013) 216 Cal.App.4th 497,
514-515; see also Herrera v. Federal Nat’l Mortg. Assn. (2012) 205 Cal.App.4th 1495, 1507;
see also Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th, at pp. 271-272.)
Additionally, district courts in California have rejected the Glaski decision. (See e.g., Newman
v. Bank of New York Mellon (E.D. Cal. 2013) 2013 WL 5603315, *3 [“no courts have yet
followed Glaski and Glaski is in a clear minority on the issue”]; see also Gilbert v. Chase
Home Fin., LLC (E.D. Cal. 2013) 2013 WL 2318890, *3; see also Ganesan v. GMAC
Mortgage, LLC (N.D. Cal. 2012) 2012 WL 4901440, *4.) The Court therefore declines to
follow the holding in Glaski.
Furthermore, “California’s nonjudicial foreclosure scheme is set forth in Civil Code
sections 2924 through 2924k, which ‘provide a comprehensive framework for the regulation of
a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.’”
(Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1154, quoting
Moeller v. Lien (1994) 25 Cal.App.4th 822, 830.) No statute allows a borrower to assert a
claim, before the foreclosure sale, to determine whether the foreclosing entities have the
authority to foreclose, and courts have refused to create such a cause of action. (Id., at p. 1155;
Robinson v. Countrywide Home Loans, Inc. (2011) 199 Cal.App.4th 42, 46.) Thus, Plaintiff
lacks standing to challenge the validity of the assignment and substitutions.
Additionally, Plaintiff argues that Demurring Defendants reliance on various federal
cases is misguided because those decisions did not discuss the HBOR. (Plaintiff’s Opp’n, at
p. 5:8-6:5.) It is Plaintiff’s position that his claims are governed by the HBOR, and that the
HBOR gives a borrower standing to challenge an allegedly void assignment under a deed of
trust. (Id., at pp. 9:23-11:4.) To the contrary, the HBOR—including Civil Code sections 2924
and 2924.17—does not allow a borrower to state a claim based on an allegedly valid
assignment or substitution. In any event, the HBOR became effective in January 2013, and it
is not retroactive. (Rockridge Trust v. Wells Fargo, N.A. (N.D.Cal. 2013) 985 F.Supp.2d 1110,
1152.) Since the SOT/ADOT was executed and recorded in 2009 (FAC, Ex. 1), Plaintiff
cannot state any cause of action for violation of the HBOR based on the SOT/ADOT.
Next, Plaintiff argues that he has adequately pleaded viable claims based on his
assertion that MERS and DiPrimo have not produced evidence to demonstrate that DiPrimo
had the authority to execute the ADOT/SOT on behalf of MERS. (E.g., Plaintiffs’ Opp’n, at
p. 8:3-4.) Since the facts asserted in Plaintiff’s memorandum are not set forth in the FAC or
subject to judicial notice, they cannot be considered on demurrer. (See Hall v. Great Western
Bank (1991) 231 Cal.App.3d 713, 719, fn.7; see also Ion Equip. Corp. v. Nelson (1980) 110
Cal.App.3d 868, 881.) In any event, a plaintiff cannot state a claim based on the alleged lack
of evidence to support a purported assignee’s authority under a deed of trust, since such a claim
is still an improper challenge to the foreclosing entity’s authority to foreclose. (Siliga v.
Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 85.) Plaintiff’s
argument therefore lacks merit.
Plaintiff also asserts that the DOT somehow gives him the right to sue based on the
foreclosing entities’ alleged lack of authority. (Plaintiff’s Opp’n, at pp. 8:8-9:22.) To the
contrary, nothing in the DOT gives Plaintiff the authority to challenge an assignment.
(Demurring Defendants’ RJN, Ex. 1.) The DOT provides that the beneficiary acting as the
nominee for the lender, MERS, has the authority to assign the beneficial interest and to
substitute the trustee. (Id., at pp. 2-4 & 13-14.) The borrower must anticipate that the note
and/or deed of trust might be transferred to another creditor, and such an assignment does not
change the borrower’s obligation to repay the amount owed. (Gomes v. Countrywide Home
Loans, Inc., supra, 192 Cal.App.4th, at pp. 1154-1155; Jenkins v. JP Morgan Chase Bank,
N.A. (2013) 216 Cal.App.4th 497, 515; Fontenot v. Wells Fargo Bank, N.A., supra, 198
Cal.App.4th, at p. 272.) Accordingly, nothing in the Note or the DOT authorizes Plaintiff to
assert a cause of action based on an allegedly void assignment.
Next, Plaintiff contends that he has standing to challenge the validity of the
SOT/ADOT by virtue of the fact that he allegedly suffered resulting harm, and cites Civil Code
sections 3523 and 3539 and an unpublished decision—Peng v. Chase Home Finance, LLC
(Cal. Ct. App., Apr. 8, 2014, No. B245436) 2014 WL 1373784 (“Peng”)—in support of his
position. (Plaintiff’s Opp’n, at pp. 6:11-7:9.) His reliance on Civil Code sections 3523 and
3539 is misguided because those statutes merely set forth general maxims of jurisprudence.
Such maxims cannot be intruded in matters that are plain and fully covered by a positive
statute. (Lass v. Eliassen (1928) 94 Cal.App. 175, 179.) As discussed above, California’s
nonjudicial foreclosure statutes provide a comprehensive statutory framework applicable to
claims based on the foreclosure process and do not authorize a claim based on an allegedly
void assignment. (See Civ. Code, § 2924 et seq.; see also Gomes v. Countrywide Home Loans,
Inc., supra, 192 Cal.App.4th, at p. 1154; see also Jenkins v. JP Morgan Chase Bank, N.A.,
supra, 216 Cal.App.4th, at p. 515; see also Fontenot v. Wells Fargo Bank, N.A., supra, 198
Cal.App.4th, at p. 272.) Plaintiff’s reliance on Peng is misplaced for two reasons. First, he
cites to the dissenting opinion. The majority in Peng found that the plaintiff had failed to state
a claim for violation of the California non-judicial foreclosure statutes because he could not
plead prejudice while in default. (Peng, supra, at pp. *1-3, citing Fontenot v. Wells Fargo
Bank, N.A., supra, 198 Cal.App.4th, at p. 262 & 271-272.) In addition, even if the majority
opinion supported Plaintiff’s position, he could not rely upon the that case because it is an
unpublished decision. An unpublished decision of the Court of Appeal “must not be cited or
relied on by a court or a party in any other action.” (Cal. Rules of Court, rule 8.1115(a).)
Thus, Plaintiff’s contention is not well-taken.
To summarize, Plaintiff lacks standing to assert a cause of action based on the allegedly
void assignment and substitution in the SOT/ADOT because he cannot allege that he suffered
any prejudice while he is in default. It therefore follows that he has not stated any viable cause
of action against Demurring Defendants, including a claim for fraud based on the purportedly
fraudulent assignment and violation of the UCL. (See Fontenot v. Wells Fargo Bank, N.A.,
supra, 198 Cal.App.4th, at p. 262 & 271-272; see also Jenkins v. JP Morgan Chase Bank, N.A.,
supra, 216 Cal.App.4th, at pp. 515 & 522-523 [discussing standing under the UCL]; see also
Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 638 [providing that fraud requires a false
representation].) The demurrer to the FAC will therefore be sustained.
In opposition, Plaintiff requests leave to amend to cure any defects identified by the
Court; however, he does not specify how he could amend the FAC to cure the issues discussed
above. (Plaintiff’s Opp’n, at p. 11:8-9.) Leave to amend should be denied where the facts are
not in dispute and the nature of the claim is clear, but no liability exists under substantive law.”
(Jenkins v. JP Morgan Chase Bank, N.A., supra, 216 Cal.App.4th 497, 535.) Here, Plaintiff
cannot state a claim based on his asserted theory of liability. Accordingly, Demurring
Defendants’ general demurrer to the complaint as a whole for failure to state a claim is
SUSTAINED WITHOUT LEAVE TO AMEND.
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Case Name: Garcia v. The Bank of New York Mellon, et al.
Case No.:
2015-1-CV-285957
This is a wrongful foreclosure action against defendants Mortgage Electronic
Registration Systems, Inc. (“MERS”),4 Barbara DiPrimo (“DiPrimo”), and others. In the first
amended complaint (“FAC”), plaintiff Jerry Garcia (“Plaintiff”) asserts causes of action for:
(1) “statutory violations”; (2) declaratory judgment; (3) slander of title; (4) attempted unlawful
foreclosure; (5) unfair business practices in violation of the UCL; and (6) fraud.5 He only
asserts the second cause of action for declaratory judgment against MERS.
A discovery dispute has arisen as to whether MERS should be compelled to respond to
Plaintiff’s first set of form interrogatories (“FI”), special interrogatories (“SI”), and requests for
production of documents (“RPD”). The FI seeks general background information about
MERS. The SI and the RPD ask for information and documents concerning the “status” of
MERS and another defendant, and DiPrimo’s authority to execute the SOT/ADOT. MERS
believes that Plaintiff has not stated any viable cause of action against it, and thus, Plaintiff
should withdraw his discovery requests. MERS, as well as other defendants, have filed a
demurrer to the FAC that is still pending. Counsel for MERS and Plaintiff met and conferred,
but ultimately were unable to resolve the dispute as to whether MERS should be required to
respond to the FI, SI, and RPD.
MERS moves for a protective order to strike the FI, SI, and RPD, or alternatively, to
stay discovery—and thereby postpone the time limit for MERS to respond to the pending
requests—until 30 days after it has been determined that Plaintiff asserts a viable cause of
action against MERS. (See Code Civ. Proc. [“CCP”], §§ 2030.090 & 2031.060.) Plaintiff
opposes the motion and requests an award of monetary sanctions.6
I.
MERS’s Motion for a Protective Order
After form interrogatories and/or requests for production of documents have been
propounded, the responding party may promptly move for a protective order directing that the
discovery requests do not need to be answered at all, or extending the time to respond. (CCP,
§§ 2030.090, subds. (a), (b)(1), & (b)(3) & 2031.060, subds. (a) & (b)(1)-(2).) The court, for
good cause shown, may make any order that justice requires to protect any party or other
natural person or organization from unwarranted annoyance, embarrassment, or oppression, or
undue burden and expense. (CCP, §§ 2030.090, subd. (b) & 2031.060, subd. (b).) “[T]he
burden is on the party seeking the protective order to show good cause for whatever order is
sought.” (Fairmont Ins. Co. v. Superior Court (2000) 22 Cal.4th 245, 255.) “[T]he issuance
4
Erroneously sued as MERSCorp Holdings, Inc.
5
In the FAC, the declaratory judgment and slander of title claims are both labeled as the second cause of
action, and the subsequent claims are numbered as the third through fifth causes of action. For clarity, the Court
will refer to the causes of action in consecutive numerical order.
6
In the opposition, Plaintiff also requests that the Court enter an order compelling MERS to provide
responses to the FI, SI, and RPD. (Plaintiff’s Opp’n, at p. 9:6-17.) Since Plaintiff has not filed a noticed motion
as required by CCP sections 2030.290 and 2031.300, his request is summarily denied.
and formulation of protective orders are to a large extent discretionary.” (Raymond Handling
Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584, 588.)
MERS argues that its motion should be granted because Plaintiff has not pleaded a
viable cause of action against it. In opposition, Plaintiff insists that his only cause of action
against MERS—i.e. the second cause of action for declaratory relief—has merit, and he is
therefore entitled to obtain discovery from MERS. To the extent MERS seeks a protective
order directing that the FI, SI, and RPD be stricken in their entirety, the Court finds that it has
shown good cause, in light of the Court’s ruling on the demurrer. As a general rule, a party is
entitled to discover information relevant to the “pending action,” and discovery may relate to
the claim or defense of any party. (CCP, § 2017.010.) “Once it is recognized that the
complaint shows that plaintiff has no claim, all concerned should be spared the expense of
further proceedings.” (Silver v. City of Los Angeles (1966) 245 Cal.App.2d 673, 674-675; see
also Terminals Equipment Co. v. City and County of San Francisco (1990) 221 Cal.App.3d
234, 247.) Although the fact that a demurrer is pending does not justify the outright denial of
discovery, that would not be the case once the demurrer has been sustained without leave to
amend. (See Mattco Forge, Inc. v. Arthur Young & Co. (1990) 223 Cal.App.3d 1429, 1436.)
Even after a demurrer to a complaint has been sustained with leave to amend, a plaintiff may
seek discovery – but that is not the case here. (Budget Finance Plan v. Superior Court (1973)
34 Cal.App.3d 794, 798; McClatchy Newspapers v. Superior Court of Sacramento County
(1945) 26 Cal.2d 386, 395; see also Wellpoint Health Networks, Inc. v. Superior Court (1997)
59 Cal.App.4th 110, 128-129.)
To the extent MERS seeks a protective order extending its time to respond until after
the Court has determined whether Plaintiff has adequately stated a claim against it, it has
shown good cause. When a demurrer is pending, it should be resolved before the court
determines whether to limit the scope of discovery. (See Mattco Forge, Inc. v. Arthur Young
& Co. (1990) 223 Cal.App.3d 1429, 1436.) It is not improper for a court to postpone discovery
pending the outcome of a demurrer. (See Budget Finance Plan v. Superior Court (1973) 34
Cal.App.3d 794, 797.) Therefore, the Court would extend MERS’s time to respond to the FI,
SI, and RPD, were this request not mooted by the Court’s ruling on the demurrer.
In light of the Court’s tentative ruling in Line 2 to sustain Defendants’ demurrer
without leave to amend, Defendants’ motion to strike the pending discovery requests is
apposite, and is GRANTED.
Although the alternative motion for protective order requesting an extension of time is
moot in light of the Court’s indicated ruling on the demurrer, were the Court to overrule the
demurrer or grant leave to amend, MERS’s motion for a protective order would be GRANTED
to the extent it seeks an order extending the time for it to respond to the FI, SI, and RPD.
Accordingly, the time for MERS to respond to the FI, SI, and RPD would be extended to 30
days after the entry of the order on the demurrer filed by MERS and other defendants. Such
ruling would not affect MERS’s ability to move for a protective order after the filing of the
order on the demurrer.
II.
Plaintiff’s Request for Monetary Sanctions
Plaintiff requests an award of monetary sanctions in the amount of $2,750, but does not
specify against whom the sanction is sought. Thus, the request is not code-compliant. (See
CCP, § 2030.040 [requiring a request for a sanction to specify each person, party, or attorney
against whom the sanction is sought].) In any event, the Court may only impose a monetary
sanction against a party or attorney who unsuccessfully makes or opposes a motion for a
protective order. (See CCP, §§ 2030.090, subd. (d) & 2031.060, subd. (h).) Since MERS
prevailed on its motion for a protective order extending its time to respond to the FI, SI, and
RPD, an award of sanctions against MERS and/or its counsel is not warranted. Accordingly,
Plaintiff’s request for an award of monetary sanctions is DENIED.
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Case Name: Loyola Corners Estates, LLC, et al. v. City of Los Altos, et al.
Case No.:
2015-1-CV-287198
In the verified petition, petitioners Loyola Corners Estates, LLC, Gregg Bunker, and
Burke Kaltenberger (collectively, “Petitioners”) assert causes of action against respondent City
of Los Altos (“the City”) for: (1) writ of mandamus, and (2) inverse condemnation.
Petitioners allege the following: Petitioners own a parcel of real property (“the
Property”) in Los Altos that is zoned as “CN Neighborhood Commercial” and is subject to the
Loyola Corners Neighborhood Commercial Center Specific Plan (“the Specific Plan”) adopted
by the City in 1990. (Petition, ¶¶ 1-4 & 13.) In 2014, Petitioners submitted applications for
land use entitlements to develop the Property to the City, and in June 2015, the City’s staff
recommended that the City’s Planning and Transportation Commission (“Commission”)
approve the proposed project subject to findings and conditions. (Id., ¶¶ 10-11, & Exs. 1-2.)
The Commission subsequently recommended that the City Council deny the proposed project.
(Id., ¶ 11.) The City Council unanimously voted to deny the proposed development project on
July 28, 2015. (Id., ¶¶ 10 & 12, & Ex. 1.) The City Council’s supplemental findings adopted
on August 25, 2015, indicated that the proposed project was inconsistent with the City’s
general plan, Specific Plan, and zoning ordinance. (Id., ¶ 12, & Ex. 3.) In fact, the proposed
project complies with the City’s general plan, Specific Plan, and zoning ordinances. (Id., ¶ 19.)
The denial violated Petitioners’ constitutional rights by depriving them of due process and a
fair hearing. (Id., ¶ 19.) Petitioners are informed and believe that the denial constitutes an
unconstitutional taking of the Property without just compensation. (Id., ¶¶ 27-33.)
The City demurs to the second cause of action for failure to state a claim. (See Code
Civ. Proc., § 430.10, subd. (e).) Petitioners oppose the demurrer and make a request for
judicial notice in support thereof.
I.
Judicial Notice
Petitioners’ request judicial notice of two ordinances of the City is GRANTED. (See
Evid. Code § 452, subd. (b); see also Horn v. County of Ventura (1979) 24 Cal. 3d 605, 615
[taking judicial notice of a county ordinance]; see also Gbur v. Cohen (1979) 93 Cal.App.3d
296, 301 [judicial notice is limited to matters that are relevant].)
II.
Demurrer
On demurrer, courts admit “all material facts properly pleaded” and facts subject to
judicial notice, but not contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318.) Courts also admit facts in exhibits attached to the subject
pleading, and facts in such exhibits are given precedence over inconsistent allegations. (Mead
v. Sanwa Bank Cal. (1998) 61 Cal.App.4th 561, 567-568.)
In support of the demurrer to the inverse condemnation claim, the City argues that
(1) the claim is time-barred, and (2) the claim is not ripe.
A.
Limitations Period
A challenge to a complaint based on statute of limitations lies only where the dates
alleged in the complaint “clearly and affirmatively” show that the claim is barred. (Geneva
Towers Ltd. Partnership v. City and County of San Francisco (2003) 29 Cal.4th 769, 781;
Union Carbide Corp. v. Super. Ct. (1984) 36 Cal.3d 15, 25; United Western Medical Centers v.
Super. Ct. (1996) 42 Cal.App.4th 500, 505.) The City contends that the inverse condemnation
claim is essentially an attack on the validity of the Specific Plan adopted in 1990, and thus, the
claim is barred by a 90-day statute of limitations under Government Code section 65009. To
the contrary, the commencement of the limitations period is based on the date of the final
administrative adjudication in denying the owners’ application, not on the date that the specific
plan was adopted. (Avenida San Juan Partnership v. City of San Clemente (2011) 201
Cal.App.4th 1256, 1275.) The petition shows that the City rendered a final decision denying
Petitioners’ proposed project on August 27, 2015. (Petition, Ex. 3.) Since the petition was
filed within 90 days of that date, it is not time-barred under Government Code section 65009.
The City’s first argument therefore lacks merit.
B.
Ripeness
A demurrer may be sustained when the complaint shows on its face the claim is not ripe
for adjudication. (Breneric Associates v. City of Del Mar (1998) 69 Cal.App.4th 166, 188.)
“The developer bears a heavy burden of showing that a regulation as applied to a particular
parcel is ripe for a taking claim.” (Milagra Ridge Partners, Ltd. v. City of Pacifica (1998) 62
Cal.App.4th 108, 117.) “It ‘must establish that it has submitted at least one meaningful
application for a development project which has been thoroughly rejected, and that it has
prosecuted at least one meaningful application for a zoning variance, or something similar,
which has been finally denied. [Citations.]’” (Ibid.)
Petitioners allege that the City has issued a final decision denying their proposed
project. (Petition, Ex. 3.) That being said, they do not allege that they have sought at least one
meaningful application for a zoning variance, or something similar, which has been finally
denied. In opposition, Petitioners argue that they are not required to seek a variance or
amendment to the Specific Plan because cases have found that a petitioner is not required to
seek a variance or amendment to a general plan. A general plan is not the same as a specific
plan, and courts have found that a request for a variance or amendment to a specific plan, but
not a general plan, is necessary to state a claim. (See, e.g., Milagra Ridge Partners, Ltd. v. City
of Pacifica, supra, 62 Cal.App.4th, at pp. 118-119.) Petitioners’ argument therefore lacks
merit. Since they do not allege that they sought an exception to the Specific Plan or a variance
of the applicable ordinances, the inverse condemnation claim is not ripe.
Next, Petitioners argue that they are not required to seek a variance or amendment
under the “futility exception.” Under that exception, the “failure to pursue administrative
remedies does not bar judicial relief where the administrative remedy is inadequate or
unavailable, or where it would be futile to pursue the remedy. ([Citation].)” (Howard v.
County of San Diego (2010) 184 Cal.App.4th 1422, 1430.) In order to invoke the futility
exception, a plaintiff must show that the entity “has declared what its ruling will be on a
particular case.” (Ibid., internal citation and quotation marks omitted.) “A plaintiff need not
pursue administrative remedies where the agency’s decision is certain to be adverse.
([Citation].)” (Ibid.) Here, Petitioners have not alleged that the City Council declared what its
ruling would be on a request for a variance or amendment to the Specific Plan. Thus, the
futility exception is not adequately pleaded.
That being said, it may be possible for Petitioners to amend the petition to show that
they are not required to seek an amendment or variance under the futility exception. Leave to
amend in response to a demurrer to an original pleading is liberally allowed as a matter of
fairness, unless the pleading shows on its face that it is incapable of amendment. (City of
Stockton v. Super. Ct. (2007) 42 Cal.4th 730, 747.) Accordingly, the City’s demurer to the
second cause of action for failure to state a claim is SUSTAINED WITH 10 DAYS’ LEAVE
TO AMEND.
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Case Name: Loree Jordan-Macias v. Onewest Bank, FSB
Case Number: 2013-1-CV-244905
Motion for Summary Judgment by Defendant OneWest Bank
This case arises from a mortgage dispute—specifically a dispute as to whether
Defendant OneWest Bank (“OWB”) negligently reviewed Plaintiff’s numerous requests for a
loan modification over several years. The parties agree that there is only one cause of action
still at issue: the second cause of action of negligence in the operative Third Amended
Complaint (“TAC”), which alleges that OWB “had a duty to provide accurate and reliable
information to Plaintiff and to perform the evaluation of the loan modification with reasonable
care and attention.” TAC at 24. Before the Court is Defendant OWB’s motion for summary
judgment.
Defendant OWB’s request for judicial notice of nine documents is GRANTED as
follows. Notice of exhibits, 1, 2, 4, 5 and 7-9, all recorded documents, is GRANTED pursuant
to Evidence Code §452(c). (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th
256, 264-65 [stating that “a court may take judicial notice of the fact of a document’s
recordation, the date the document was recorded and executed, the parties to the transaction
reflected in a recorded document, and the document’s legally operative language . . . [and,
f]rom this, the court may deduce and rely upon the legal effect of the recorded document.”])
Notice of exhibits 3 and 6, copies of records of the federal Bankruptcy Court, is GRANTED
pursuant to Evidence Code §452(d) (court records).
“A defendant seeking summary judgment must show that at least one element of the
plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause
of action. … The burden then shifts to the plaintiff to show there is a triable issue of material
fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98
Cal.App.4th 66, 72; internal citations omitted.) “The elements of a cause of action for
negligence are well established. They are (a) a legal duty to use due care; (b) a breach of such
legal duty; [and] (c) the breach as the proximate or legal cause of the resulting injury.” (Ladd v.
County of San Mateo (1996) 12 Cal.4th 913, 917.) The existence and scope of an alleged duty
of care are questions of law to be determined by the Court on a case-by-case basis. (Liaco v.
Chevron U.S.A., Inc. (2004) 123 Cal App.4th 649, 659. See also Kentucky Fried Chicken of
California, Inc. v. Superior Court (1997) 14 Cal.4th 814, 819 [“The issue of whether a legal
duty exists is an issue of law, not an issue of fact for the jury.”])
It is settled under California law that “as a general rule, a financial institution owes no
duty of care to a borrower when the institution’s role in the loan transaction does not exceed
the scope of its conventional role as a mere lender of money.” (Nymark v. Heart Fed. Savings
& Loan Ass’n (1991) 231 Cal.App.3d 1089, 1096. See also Ragland v. U.S. Bank National
Assn. (2012) 209 Cal.App.4th 182, 207 [Bank advice directly related to loan modification is
within the scope of conventional role as a lander, and does not support a lender duty in
negligence or negligent infliction of emotional distress.])
Defendant’s primary argument is that there is no common law duty of care applicable
to the review of an application for a loan modification. This means that Plaintiff cannot
establish a key element of the negligence claim and/or that Defendant OWB has a complete
defense. The parties acknowledge that there is presently a split amongst the California courts of
appeal on this issue. Defendant urges the Court to adopt the position taken in Lueras v. BAC
Home Loans Servicing L.P. (2013) 221 Cal.App.4th 49 (“Lueras”) a Fourth District decision
which held that lenders owe no duty of care in a loan modification situation because it is
effectively a renegotiation of the loan terms and therefore part of the lender’s conventional
role. Plaintiff argues the Court should follow Alvarez v. BAC Home Loans Servicing, L.P.
(2014) 228 Cal App 4th 941, 945 (“Alvarez”), a First District decision holding that, while a
lender has no duty to modify a loan, once it agrees to consider a loan modification application
it owes a duty to exercise reasonable care in reviewing the application.
The Court finds the decision in Lueras more persuasive and therefore finds that no
common law duty of care applies to Defendant’s reviews of Plaintiff’s multiple applications for
a loan modification. As the Lueras Court found, the factors outlined in Biakanja v. Irving
(1958) 49 Cal.2d 647 do not support the imposition of a common law duty to “consider” a loan
modification application because if the modification is necessary due to the borrower’s
inability to repay the loan, the borrower’s harm, suffered from denial of the loan modification,
is not closely connected to the lender’s conduct. Similarly, because the lender did not place the
borrower in a position creating a need for a loan modification, no moral blame attached to the
lender’s conduct. (Id. at 61-65.) The Court further finds that a loan modification—which is a
renegotiation of the loan contract central to the borrower/lender relationship—cannot be
logically separated from Defendant’s “conventional role as a mere lender of money.” (See
Carbajal v. Wells Fargo Bank, N.A. (“Carbajal”) (C.D. Cal. April 10, 2015) 2015 WL
2454054 [“The California Supreme Court has not spoken on this issue, and this Court agrees
with the reasoning in Lueras. The Court fails to discern how considering an application for the
renegotiation of loan terms could fall outside the scope of a lender’s ‘conventional role as a
lender of money.’”] Id. at *6, citing Nymark, supra.)
Defendant OWB’s motion for summary judgment is therefore GRANTED.
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Case Name:
Case Number:
Dale Laue v. Liliana Ortiz
2013-1-CV-250570
Defendant’s Motion for an Order for Post-Judgment Attorney’s Fees
Defendant’s Motion for Fees is GRANTED.
Plaintiff’s Motion for Order for Acknowledgment of Satisfaction of Judgment
Plaintiff’s motion is DENIED, without prejudice, as it has been shown by the
Defendant to be premature under the circumstances. Plaintiff has not demonstrated the
Judgment has yet been satisfied in full, and Defendant has clearly shown the Judgment has not
yet been satisfied in full. Until such time as all amounts ordered paid by Plaintiff to Defendant
have in fact been paid and received, any motion for Acknowledgment of Satisfaction of
Judgment is premature.
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See tentative ruling under Line 10, above.
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Case Name:
Case Number:
Nick Miletak v. Royal Coach Tours
2015-1-CV-279978
Plaintiff’s Motion for Sanctions
Plaintiff’s motion for sanctions is DENIED. Plaintiff has not presented a valid factual
or legal basis for awarding sanctions, based upon the conduct, and the facts and circumstances,
alleged.
Defendant’s counsel states she did not oppose the court’s tentative ruling for the
hearing on December 17, 2015, which was to impose monetary sanctions in the amount of
$1,490 against Plaintiff for failure to comply with discovery requests. Thus, counsel did not
advise Mr. Miletak that she would appear at the hearing.
Mr. Miletak did appear at the hearing to contest the court’s tentative decision.
However, he did not comply with California Rule of Court 3.1308 and Santa Clara County
Local Rule 8.E., and did not timely advise defense counsel of his intent to appear and oppose
the tentative decision. This is noted in the court’s order signed on December 17, 2015, which
modified the tentative decision and found it reasonable under the circumstances to impose a
sanction of $500 against Mr. Miletak, to be paid by January 31, 2016.
It appears defense counsel then proceeded according to Rule of Court 3.1312, and
submitted a proposed order to Plaintiff adopting the court’s tentative decision imposing $1,490
in monetary sanctions. The Court infers that defense counsel, at the time the proposed order
was submitted to Plaintiff and then to the court in accordance with the Rule of Court, remained
unaware of the court’s modified award of a lesser amount of monetary sanctions. The court’s
order was served on both parties on December 21, 2015 – the same day that defense counsel
submitted to the court the proposed order adopting the tentative decision, per 3.1312. It also
appears the court, in error, signed the later proposed order.
Defense counsel requests sanctions pursuant to C.C.P. §128.5, as additional sanctions –
along with “reinstatement” of the court’s prior tentative decision. Although such sanctions may
be timely requested in a responsive pleading, the Court does not find that Plaintiff’s motion is a
tactic that is frivolous or solely intended to cause delay. Although Plaintiff’s motion is
DENIED, given the circumstances outlined above, the Court cannot find in this instance that
Plaintiff’s motion was “completely without merit or for the sole purpose of harassing” the
opposing party. Defendant’s request for additional sanctions is DENIED.
On its own motion the Court orders that its order that appears to have been entered
erroneously and filed on December 30, 2015, which awards $1,490 in sanctions against
Plaintiff consistent with the prior tentative decision, is VACATED. The operative court order
filed on December 21, 2015, imposing $500 sanctions against Plaintiff to be paid by January
31, 2016, remains in full force and effect.
The parties and counsel are reminded that they are to appear for a Trial Setting
Conference on February 2, 1016 at 11 a.m. in Department 6.
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Case Name: Banuelos v. Safeway, Inc., et al.
Case No.:
2014-1-CV-259355
This is a personal injury action arising from an alleged slip-and-fall accident at a selfservice grocery store. In the operative form complaint, plaintiff Maria Banuelos (“Plaintiff”)
asserts causes of action against defendant Safeway, Inc. (“Defendant”), the alleged owner,
lessee, and/or controller of the subject property (“the Premises”) for (1) general negligence,
and (2) premises liability.
Defendant moves for summary judgment and makes a request for judicial notice in
support thereof. (See Code Civ. Proc. [“CCP”], § 437c.)
Defendant’s request for judicial notice of the complaint is GRANTED. (See Evid.
Code, § 452, subd. (d); see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24
Cal.4th 415, 422, fn. 2.)
A defendant moving for summary judgment has the initial burden to demonstrate that a
cause of action has no merit by showing “that one or more elements of the cause of action,
even if not separately pleaded, cannot be established, or that there is a complete defense to that
cause of action.” (CCP, § 437c, subd. (p)(2).) The “tried and true” way for a defendant to
meet the initial burden is to present affirmative evidence negating, as a matter of law, an
essential element of the plaintiff’s claim. (Guz v. Bechtel Nat., Inc. (2000) 24 Cal.4th 317,
334.) The defendant may also present “evidence that the plaintiff does not possess, and cannot
reasonably obtain, needed evidence-as through admissions by the plaintiff following extensive
discovery to the effect that he has discovered nothing.” (Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 855.) If the defendant meets that burden, then the burden shifts to the
plaintiff to show that a triable issue of one or more material facts exists. (CCP, § 437c,
subd. (p)(2).)
Plaintiff’s claims for negligence and premises liability require her to establish, amongst
other things, the elements of duty and breach. (Truong v. Nguyen (2007) 156 Cal.App.4th 865,
875; Brooks v. Eugene Burger Management Corp. (1989) 215 Cal.App.3d 1611, 1619.)
Defendant argues that its motion for summary judgment should be granted because Plaintiff
cannot establish the necessary elements of duty and breach.
First, with respect to the element of duty, everyone is generally responsible “for an
injury occasioned to another by his or her want of ordinary care or skill in the management of
his or her property.” (Civ. Code, § 1714, subd. (a).) One who owns, leases, or controls real
property “must use reasonable care to discover any unsafe conditions and to repair, replace, or
give adequate warning of anything that could be reasonably expected to harm others.” (CACI,
No. 1000; see also, e.g., Brooks v. Eugene Burger Management Corp. (1989) 215 Cal.App.3d
1611, 1619.) Thus, to show that Plaintiff cannot establish that it owed her a duty of care,
Defendant must proffer evidence showing that it did not own, lease, or control the Premises. It
does not proffer any such evidence. It therefore has not met the initial burden in support a
motion for summary judgment with respect to the element of duty. (See CCP, § 437c, subd.
(p)(2).)
Turning to the element of breach, Plaintiff’s negligence claim is based on an alleged
slip-and-fall incident at a store that is owned, leased, managed, and/or controlled by Defendant,
and her injuries were allegedly caused by Defendant’s failure to remedy and warn store patrons
against a dangerous condition at the Premises. (Compl., ¶¶ GN-1 & Prem.L-1.) As a general
rule, a storekeeper owes the patrons a duty to exercise reasonable care in keeping the premises
reasonably safe. (Ortega v. Kmart Corp. (2001) 26 Cal.4th 1200, 1205.)
If the owner operates a self-service grocery store, where customers are invited
to inspect, remove, and replace goods on shelves, “the exercise of ordinary care
may require the owner to take greater precautions and make more frequent
inspections than would otherwise be needed to safeguard against the possibility
that such a customer may create a dangerous condition by disarranging the
merchandise” and creating potentially hazardous conditions. (Ibid.) “However,
the basic principle to be followed in all these situations is that the owner must
use the care required of a reasonably prudent [person] acting under the same
circumstances.” (Ibid.)
(Ortega, supra, at p. 1505.) If the storekeeper’s practices create a higher risk that dangerous
conditions will exist, then “ordinary care will require a corresponding increase in precautions.”
(Moore v. Wal-Mart Stores, Inc. (2003) 111 Cal.App.4th 472, 479.)
To establish breach, the plaintiff bears the burden to show that either (a) the defendant
had actual knowledge of the dangerous condition; (b) the dangerous condition was not present
for a sufficient period of time to charge the defendant with constructive knowledge; or (c) the
site had not been inspected within a reasonable period of time and, thus, the defendant should
be charged with constructive knowledge of the dangerous condition. (See Ortega, supra, at
pp. 1206-1207 & 1212.) Whether the dangerous condition has existed long enough for a
reasonably prudent person to have discovered it is a question of fact. (Id., at pp. 1207 & 1213.)
Defendant proffers the facts in its separate statement of undisputed material facts
(“UMF”) to show that Plaintiff lacks evidence of the length of time that the dangerous
condition existed. (Defendant’s UMF Nos. 3-4, citing Stone decl., Ex. 1.) Defendant also
proffers evidence showing that only between 3 and 13 minutes had passed between the time of
the most recent inspection of the area and the accident. (Defendant’s UMF Nos. 1-2 & 6-8,
citing Compl., Stone decl., Exs. 1-3, Bowers’ decl., ¶¶ 2-6 & Ex. A.) Whether Defendant’s
evidence shows that Plaintiff cannot establish the legal theories to satisfy the element of
breach, that is, constructive knowledge based on either the amount of time that the spill existed
or since the most recent inspection, remain triable issues of fact to be decided by a jury (See
CACI 1101).
The remaining issue is whether Defendant has proffered sufficient evidence to show
that Plaintiff cannot establish that it had actual knowledge of the dangerous condition. (See
Ortega, supra, at p. 1206.) Defendant asserts that Plaintiff has “no facts” to support her
allegation of actual or constructive knowledge based on her responses to special interrogatories
(“SI”). (Defendant’s UMF No. 5, citing Plaintiff’s responses to SI Nos. 7 & 10.) This
misstates the evidence. In her responses to SI Nos. 7 and 10, Plaintiff did not concede that she
has no facts to support her allegation that Defendant had actual or constructive notice. (Stone
decl., Ex. 3.) Defendant’s evidence does not negate the element of actual knowledge, or show
that Plaintiff does not possess and cannot obtain necessary evidence. Thus, it is insufficient to
satisfy Defendant’s initial burden. (See Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th, at
p. 855.) Defendant does not otherwise assert any facts or proffer any evidence to show that it
lacked actual knowledge of the dangerous condition, or that Plaintiff does not possess and
cannot reasonably obtain necessary evidence to establish actual knowledge. Thus, Defendant
has not met its initial burden to show that it lacked actual knowledge of the dangerous
condition.
Since Defendant has not met its initial burden with respect to the three legal theories
that Plaintiff may use to support the element of breach, it follows that it has not met its initial
burden in support of its motion for summary judgment. (See CCP, § 437c, subd. (p)(2).)
Plaintiff therefore is not required to submit any evidence in opposition. (See ibid.) In addition,
Defendant has not shown that it is entitled to summary judgment as a matter of law. (See id.,
subd. (c).) Accordingly, Defendant’s motion for summary judgment is DENIED.
Given that Defendant’s evidence was insufficient to meet its initial burden in support of
the motion, Plaintiff’s objections to Defendant’s evidence are immaterial to the outcome of the
motion. The Court is only required to rule on objections that it deems material to the
disposition of the motion, and any objections that are not expressly sustained are preserved on
appeal. (See CCP, § 437c, subd. (q), amended by Stats. 2015, ch. 345, § 1.5; see also former
CCP, § 437c, added by Stats. 1973, ch. 366, § 2, p. 807, amended by Stats. 2011, ch. 419, § 3,
and repealed operative January 1, 2015, by Stats. 2011, ch. 419, §§ 3-4; see also Reid v.
Google, Inc. (2010) 50 Cal.4th 512, 526-527 & 532-534; see also, e.g., Sen. Com. on Judiciary,
com. on Sen. Bill No. 470 (2015-2016 Reg. Sess) July 10, 2015, pp. 4-5.) The Court therefore
declines to rule on Plaintiff’s evidentiary objections.
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