Case Name: Nelson & Nenebeth Herrera v. Rochelle Matkin, et al.
Case No.: 18CV326449

This is an action brought by Pro Per Plaintiffs Nelson and Nenebeth Herrera (“Plaintiffs”) alleging fraud during the foreclosure process relating to real property located at 341 Rayos Del Sol Drive in San Jose. It is the fifth such lawsuit brought by Plaintiffs since 2010 relating to this same real property. The operative First Amended Complaint (“FAC”) in this action was filed on July 10, 2018 and states causes of action against Defendants Rochelle Matkin, Quality Loan Service Corp., Barbara Lynn Simmons, Allan McGurk, Equity Center Real Estate, Nationstar Mortgage, LLC, Citibank, N.A., Wilmington Trust, N.A., BAC Home Loans Servicing, L.P. fka Countrywide Home Loans Servicing, Bank of America, N.A. and various Does (“Defendants”) The seven causes of action alleged are: (1) Fraudulent Transfer; (2) Conspiracy; (3) Temporary Restraining Order, Preliminary and Permanent Injunction; (4) Fraud (Intentional Misrepresentation); (5) Declaratory Relief; (6) Cancellation of Instruments, and; (7) Quiet Title.

Currently before the Court is the demurrer to the FAC by Defendant Bank of America, N.A. (“BANA”), joined by Defendants Nationstar Mortgage and Wilmington Trust (whose request for joinder is granted). BANA demurrers to all seven causes of action, and has submitted a request for judicial notice in support of the demurrer.

Request for Judicial Notice
A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)

In support of its demurrer, BANA has submitted a request for the Court to take judicial notice of 20 documents (attached to the request as exhibits A-T) pursuant to Evidence Code §§ 452(c),(d) and (h). These documents mostly consist of various court records from Plaintiffs’ several prior lawsuits and copies of recorded documents.

Taking the court records first, the submitted documents are: 1) a copy of Plaintiffs’ verified complaint in case no.110CV161549 (lawsuit #1) filed January 15, 2010, brought against several defendants including BANA’s predecessor Countrywide Home Loans, which admits at ¶2 that Plaintiffs’ loan on the property was entered into on November 28, 2006 (Ex. A); 2) a copy of the May 12, 2011 order of the Court (Hon. Kirwan) dismissing case no. 110CV161549 without prejudice based on Plaintiffs’ failure to appear after an order to show cause hearing (Ex. B); 3) a copy of Plaintiffs’ verified complaint in case no. 111CV202207 filed June 2, 2011 (lawsuit #2), brought against several defendants including BANA’s predecessor Countrywide and again admitting (at ¶17) that the loan for the subject property was entered into on or about November 28, 2006 (Ex. C); 4) a copy of the August 28, 2012 judgment of the Court (Hon. Overton) sustaining the demurrer to that complaint brought by BANA and other defendants without leave to amend and dismissing case no. 111CV202207 with prejudice (Ex. D); 5) a copy of Plaintiffs’ verified Complaint in case no. 114CV264242 filed April 23, 2014 (lawsuit #3) brought against several defendants including BANA’s predecessor Countrywide and again admitting (at ¶8) that the loan for the subject property was entered into on or about November 28, 2006 (Ex. E); 6) a copy of the January 23, 2015 Judgment of the Court (Hon. Overton) dismissing case no. 114CV264242 with prejudice after sustaining the demurrer to the first amended complaint brought by BANA (as successor by merger to Countrywide) and other defendants without leave to amend (Ex. F); 7) A copy of Plaintiffs’ verified Complaint in case no. 17CV308216 filed April 5, 2017 (lawsuit #4) brought against several defendants including (again) BANA’s predecessor Countrywide as well as current defendants Nationstar Mortgage and Wilmington Trust, which claimed (at ¶26 among others) that a loan agreement for the subject property was entered into on August 17, 2016 (Ex. G), and; 8) a copy of the January 4, 2018 “Order and Judgment of Dismissal” issued by the Court (Hon. Zayner) after granting a motion for judgment on the pleadings brought by BANA, in its own capacity and as successor by merger to Countrywide without leave to amend, dismissing all claims against BANA with prejudice and entering judgment in favor of BANA and against Plaintiffs in case no. 17CV308216 (Ex. H).

Notice of Exhibits A-H is GRANTED pursuant to Evidence Code § 452(d) as they are copies of court records. The judgments and court orders (exhibits B, D, F and H) are noticed as to their contents and their legal effect.

The recorded documents submitted for judicial notice are: 1) a copy of the Deed of Trust for the subject property signed by both Plaintiffs and recorded in Santa Clara County on November 28, 2006 (Ex. I); 2) a copy of a Notice of Default for the subject property, indicating that Plaintiffs were in default on the 2006 Deed of Trust, recorded in Santa Clara County on March 13, 2009 (Ex. J); 3) a copy of a Notice of Rescission of the notice of default, recorded in Santa Clara County on November 29, 2012 (Ex. K); 4) a copy of a corporation assignment of deed of trust/mortgage, assigning the deed of trust for the subject property from MERS to Citibank recorded in Santa Clara County on April 11, 2011 (Ex. L); 5) a copy of a corporation assignment of deed of trust, transferring the deed of trust for the subject property from Defendant Wilmington Trust (as successor trustee to Citibank) to Defendant BANA, recorded in Santa Clara County on September 23, 2014. It states in pertinent part that it is recorded to “correct the chain of title between assignment recorded on 04/18/11 [ex. L] . . . and assignment recorded on 11/08/2013,” [ex. N]; (Ex. M); 6) a copy of an assignment of deed of trust transferring the deed of trust for the subject property from BANA to Defendant Nationstar, recorded in Santa Clara County on November 8, 2013 (Ex. N); 7) a copy of another corporation assignment of deed of trust transferring the deed of trust from Defendant Nationstar to Defendant Wilmington, recorded in Santa Clara County on December 14, 2014 (Ex. O); 8) a copy of a substitution of trustee replacing Wilmington Trust with Quality Loan Servicing Corp., recorded in Santa Clara County on April 13, 2015 (Ex. P); 9) a copy of Notice of Default for the subject property recorded in Santa Clara County on August 19, 2015 (Ex. Q); 10) a copy of a Notice of Trustee’s Sale for the subject property recorded in Santa Clara County on March 23, 2017 (Ex. R), and; 11) a copy of a Trustee’s Deed Upon Sale, indicating that the subject property was sold to Defendant Wilmington Trust at public auction on March 22, 2018, recorded in Santa Clara County on April 2, 2018 (Ex. S).

Notice of Exhibits I-S is GRANTED pursuant to Evidence Code § 452(c), which states the court may take judicial notice of “any official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.” This has been interpreted to include documents recorded by a government department. “The court may take judicial notice of recorded deeds.” (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549. See also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-65, disapproved of on other grounds in Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919, [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.”])

Finally, Exhibit T to the request for judicial notice is a copy of an excerpt from the federal FDIC’s 2011 report on merger decisions. The excerpt is relevant here as it contains an official acknowledgement that BANA’s merger with BAC Home Loans Servicing (formerly Countrywide) was approved on June 24, 2011. Notice of exhibit T is GRANTED pursuant to Evidence Code §452(c) as the issuance of the report is an official act of the FDIC.

Demurrer to the FAC
In ruling on a demurrer the Court treats it “as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214.) Allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. (See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474 [rejecting allegation contradicted by judicially noticed facts]; See also Witkin, California Evidence (4th Ed., 2000) 1 Judicial Notice §3(3) [“It has long been established in California that allegations in a pleading contrary to judicially noticed facts will be ineffectual; i.e., judicial notice operates against the pleader.”])

Here the judicially noticed material (exhibits A-F & I to BANA’s request) among other things contradicts the FAC’s allegation (made under penalty of perjury through Plaintiffs’ verification of the FAC) at ¶¶ 18, 30 and 49 that “[o]n or about 08/17/16 Plaintiffs entered in a residential real estate loan agreement with Defendants,” as the judicially noticed material establishes that Plaintiffs’ loan for the subject property was entered into on November 28, 2006, as they repeatedly admitted in verified pleadings in prior lawsuits and as reflected in the recorded documents concerning the subject property. Those allegations in the FAC are therefore disregarded. The judicially noticed documents also establish that Plaintiffs were in default on their 2006 loan more than once and that Plaintiffs have not owned the subject property since March 22, 2018, before the original complaint in this action was filed on April 11, 2018.

The Court may not consider extrinsic evidence in ruling on a demurrer. Accordingly the Court has not considered the declarations of Plaintiff Nelson Herrera attached to Plaintiff’s original opposition brief filed November 21, 2018 and to the unauthorized “supplemental” opposition filed December 19, 2018 (the “supplemental” opposition has not been considered by the Court). Pro per Plaintiffs are held to same standards as other civil litigants. “[W]hen a litigant is appearing in propria persona, he is entitled to the same, but no greater, consideration than other litigants and attorneys. Further, the in propria persona litigant is held to the same restrictive rules of procedure as an attorney.” (Burnete v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1267, internal citations omitted).) The Court has only considered the declaration offered by counsel for Defendant BANA, Adam Summerfield, because it contains a description of BANA’s attempted meet and confer efforts as required by CCP § 430.41. The Court has not considered the (unauthorized) second reply brief filed by BANA on Feb. 1, 2019.

BANA demurrers to all seven causes of action in the FAC on two grounds: 1) that each cause of action is uncertain, and; 2) that each cause of action fails to state sufficient facts to state a claim against BANA. (See Notice of Demurrer and Demurrer at pp. 3:9-4:17.)

BANA’s demurrer to all seven causes of action on uncertainty grounds is OVERRULED. “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135; see also Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”]) Here, while the FAC lacks clarity (particularly as to what each particular defendant is alleged to have done), it is apparent from BANA’s other arguments (particularly the res judicata argument) that BANA understands what the FAC at least attempts to allege (large portions of it are repeated verbatim from the pleading in the prior lawsuits) and there is no true uncertainty such that BANA cannot respond.

BANA’s demurrer to the FAC’s first cause of action for fraudulent transfer on the ground that it fails to state sufficient facts is SUSTAINED. “A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred . . .” (Civil Code §3439.04(a).) “A creditor may bring an action for relief from a fraudulent transfer or obligation.” (8 Witkin, California Procedure (5th ed. 2008) Enforcement of Judgment, §498, p. 538; see also Civ. Code §3439.07(a)(1).) The FAC’s first cause of action, alleging that the sale of the subject property on March 22, 2018 (see ex. S to BANA’s request for judicial notice) was somehow fraudulent fails as a matter of law as the judicially noticed material establishes that Plaintiffs are, and have been for the entire relevant time period, debtors in relation to the subject property and not creditors. Furthermore the claim is barred by the res judicata effect of the dismissal of Plaintiffs’ lawsuit #4, case no. 17CV308216, as the FAC at ¶56 incorrectly asserts that Plaintiffs “have a right to payment” from the various defendants “for the claims alleged in the related lawsuit described above,” which is a reference to case no. 17CV308216 (See FAC at ¶32). This allegation is completely contradicted by the judicially noticed material as the Court (Hon. Zayner) dismissed all of Plaintiffs’ claims against BANA with prejudice and entered judgment in favor of BANA and against Plaintiffs in that case on Jan. 4, 2018 (see ex. G to BANA’s request for judicial notice).

BANA’s demurrer to the FAC’s second cause of action for conspiracy on the ground that it fails to state sufficient facts is SUSTAINED. “Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511, 514.) “Standing alone, a conspiracy does no harm and engenders no tort liability,” no matter how atrocious; rather, “[i]t must be activated by the commission of an actual tort.” (Id., at p. 511.) If the underlying tort claim fails, there is no conspiracy liability. In order to properly plead a conspiracy theory, a plaintiff may not rely on “bare legal conclusions, inferences, generalities, presumptions, and conclusions.” (State of California ex. rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 419.) The conspiracy claim as pled in the FAC is entirely dependent upon the fatally flawed fraudulent transfer claim. Plaintiffs allege, without any explanation of the role played by each particular defendant (BANA in particular) in the common plan or design, that “defendants and DOES” in some fashion conspired to sell the subject property on March 29, 2018 and that this “constitutes a Fraudulent Transfer.” (FAC at ¶¶ 71-72.) As the judicially noticed facts establish that Plaintiffs are not creditors of Defendants, and that that the sale of the subject property therefore cannot be framed as a fraudulent transfer, the conspiracy claim based on that sale fails as well. Neither claim can be cured through amendment in light of the judicially noticed facts.

BANA’s demurrer to the FAC’s third through seventh causes of action on the ground that they each fail to state sufficient facts against BANA because each is barred by the res judicata effect of the judgments in Plaintiffs’ prior lawsuits is SUSTAINED.

A general demurrer lies where the facts alleged in the complaint or matters judicially noticed show that a plaintiff’s claim is barred by res judicata or collateral estoppel. (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 792 (“Boeken”).) Res judicata, i.e. claim preclusion, “prevents relitigation of the same cause of action in a second suit between the same parties” and “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.” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824 (“DKN Holdings”).) “When a matter is within the ‘scope of the [prior] action, related to the subject matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it…. Hence the rule is that the prior judgment is res judicata on matters which were raised or could have been raised, on matters litigated or litigable….’” (Federal Home Loan Bank of San Francisco v. Countrywide Financial Corporation (2013 214 Cal.App.4th 1520, 1529, internal citation omitted.) “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.” (DKN Holdings, supra, at p. 824, citation omitted.)

Here is it readily apparent (particularly when the allegations of a “08/17/16” loan agreement are disregarded as contradicted by judicially noticed material) that the third through seventh causes of action alleged in the FAC either expressly were asserted or could have been asserted in each of Plaintiffs’ four prior lawsuits. As pled in the FAC these claims repeat almost verbatim the allegations made in Plaintiffs’ fourth lawsuit in which all their claims against BANA (including claims for a restraining order, for fraud-intentional misrepresentation, for declaratory relief, for cancellation of instruments and for quiet title) were dismissed with prejudice (see Ex. G to BANA’s request for judicial notice). In the FAC in this action Plaintiffs continue to attempt to assert arguments against the nonjudicial foreclosure process (such as continuing to challenge the chain of title) that have already been dealt with in the prior lawsuits and/or continue to improperly attempt to circumvent the statutes governing that process through declaratory relief claims. (See Filarsky v. Superior Court (2002) 28 Cal.4th 419, 433 [declaratory relief improper where Legislature has created specific statutory scheme to govern dispute].) That the current FAC adds allegations relating to the (fatally flawed) fraudulent transfer and conspiracy claims to these causes of action does not change the res judicata analysis.

While Plaintiffs request leave to amend if the demurrer is sustained to any cause of action their opposition not only fails to offer any response to BANA’s specific arguments in support of the demurrer it also offers no explanation as to how the Complaint could be amended to state claims that both state sufficient facts and/or are not barred by res judicata effect of the judgments in the several prior lawsuits. Accordingly, leave to amend is DENIED. (See Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 535 [court should deny leave to amend where the facts are not in dispute and no liability exists under substantive law]; Medina v. Safe-Guard Products (2008) 164 Cal.App.4th 105, 112 fn. 8 [“As the Rutter practice guide states: ‘It is not up to the judge to figure out how the complaint can be amended to state a cause of action. Rather, the burden is on the plaintiff to show in what manner he or she can amend the complaint, and how that amendment will change the legal effect of the pleading.’”])

Plaintiffs’ request, in their opposition, for a statement of decision is DENIED. CCP §1291 states: “A statement of decision shall be made by the court, if requested pursuant to Section 632, whenever an order or judgment, except a special order after final judgment, is made that is appealable under this title.” CCP §1291 is expressly to be construed in light of CCP §632. CCP §662 applies where there has been a trial followed by a judgment; it does not apply to an order on a motion, including a demurrer. (See In re Marriage of Askmo (2000) 85 Cal.App.4th 1032, 1040; City of San Diego v. Rancho Penasquitos Partnership (2003) 105 Cal.App.4th 1013, 1044-1045 [“[A] written statement of decision is required, if requested, ‘upon the trial of a question of fact by the court.’ However, it is well established that a statement of decision is ordinarily not required for a decision granting or denying a motion, including a motion in limine. There is a very limited exception to this rule. A statement of decision may be required on a motion ruling where the motion was in the nature of a ‘trial’ of fact issues.”]) A demurrer does not involve a “trial” of fact issues.