2017-00209197-CU-OR

Glump LP vs. Bank of America

Nature of Proceeding: Motion for Judgment on the Pleadings

Filed By: Labarre, Olivier J.

Defendant Wilmington Savings Fund Society, FSB, as Trustee for Stanwich Mortgage Loan Trust’s Motion for Judgment on the Pleadings is denied.

Defendant’s Request for Judicial Notice is granted but is denied to the extent that there is a request to accept the truth of factual assertions in the noticed document. Defendant seeks judicial notice of many documents in the public record such as the deed of trust, assignment of the deed of trust, quitclaim deed and certain limited partnership documents concerning Glump L.P. Defendant’s Request for Judicial Notice is not to simply recognize the existence of the documents but to interpret the documents, i.e to assume the truth of facts stated in the documents. However, there are disputes of fact as to the validity of the documents particularly the deed of trust that plaintiff contends is forged as well as the capacity in which Ken Caylor was acting when he took out the loan in his own name. In taking judicial notice of recorded documents, the court does not accept the truth of the factual assertions therein. ( Herrera v. Deutsche Bank Nat’l Trust Co. (2011) 196 Cal.App.4th 1366, 1375 )

Plaintiff has filed an Objection to the Request for Judicial Notice as to Nos. 2 (Deed of Trust) and 9 (Assignment of Deed of Trust). The objections are sustained as set forth above.

The Complaint alleges causes of action for fraud, declaratory, and injunctive relief arising out of a pending foreclosure on real property owned by Glump LP.

The Complaint alleges that plaintiff Glump LP is the record owner of the Hazelmere real property since September 25, 2007 (Request for Judicial Notice Ex. 1), at which time Laurel and Kenneth conveyed their interests in the Hazelmere Property to plaintiff by quitclaim deed. Plaintiff alleges that it was not aware at the time of the transfer that previously on September 21, 2007, Kenneth Caylor had executed a promissory note in his individual capacity in the amount of $359,650 with the Bank of America, predecessor of defendant, secured by a deed of trust on the property. Plaintiff alleges that it had no notice of the existence of the promissory note or the deed of trust until after the note went into default and the Bank recorded a notice of default on October 17, 2016. Plaintiff alleges that the bank did not record the deed of trust until October 19, 2007, after Glump had obtained title to the Hazelmere Property.

The Motion is made on the grounds that the Complaint does not state facts sufficient to constitute a cause of action. Code Civ. Proc. § 438. The Motion is based on two separate grounds: (1) The Complaint and each cause of action is barred by the statute

of limitations for actions based on fraud found in Code of Civil Procedure section 338 because the public record discloses that Plaintiff had

actual notice of the Wilmington Trust’s Deed of Trust at the time it was recorded in 2007, but did not file this lawsuit until nearly a decade later in 2017; and (2) The public record confirms that Plaintiff is not a bona fide purchaser because it paid no value for its interest in the subject real property and had actual notice of the subject mortgage loan and Deed of Trust prior to taking its interest.

Defendant contends that all of plaintiff’s claims are barred by the three year statute of limitations for fraud. A fraud claim must be filed within three years before Plaintiff either discovered facts constituting the fraud or with reasonable diligence could have discovered those facts. Sun ‘n Sand Inc. v. United California Bank, (1978) 21 Cal.3d. 671, 701 (1978). The delayed discovery rule in fraud cases applies and is codified in California Code of Civil Procedure §338(d):

“Within three years: (d) An action for relief on the ground of fraud or mistake … [is] not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” This discovery element, triggering the 3-year statute of limitations time clock has been interpreted to mean the discovery by the aggrieved party of the fraud. Doe v. Roman Catholic Bishop of Sacramento (2010) 189 Cal.App.4th 1423, 1430

Defendant further claims that the quit claim deed establishes that Glump is not a bona fide purchaser of the property and that it had actual notice of the deed of trust at the time it took title to the property.

Because the Court cannot take judicial notice of the facts in the recorded documents, the motion is denied. In a motion for judgment on the pleadings, like a general demurrer, the Court’s review is confined to the face of the pleadings without reference to extrinsic evidence. A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. Blank v Kirwan (1985) Cal.3d 311, 318. A defendant may bring a motion for judgment on the pleadings on the same grounds as a general demurrer, but the motion may be made after the time for filing the demurrer has expired. (Code of Civ. Proc. § 438.) Like a general demurrer, a “motion for judgment on the pleadings” tests the sufficiency of the complaint to state a cause of action. (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331; See also International Assn. of Firefighters Local Union 230 v. City of San Jose (2011) 195 Cal.App.4th 1179, rehearing denied, review denied.)

For pleading purposes the court must assume the truth of the matters alleged, that Glump LP did not discover the existence of the deed of trust until 2017. Thus on the face of the complaint, the action is not barred by the statute of limitations because the court cannot consider extrinsic factual issues such as whether Glump had notice of the deed of trust/note in 2007.