Case Number: BC485406    Hearing Date: August 12, 2014    Dept: 32

CASE NAME: U.S. Bank National Association v. David Behrend, et al.
CASE NO.: BC485406
HEARING DATE: 08/12/14 [continued from 05/12/14]
DEPARTMENT: 32
CALENDAR NO.: 8
SUBJECT: Motion for Summary Adjudication
MOVING PARTY: Plaintiff/Cross-Defendant, U.S. Bank National Association as Trustee for C-Bass Mortgage Loan Asset Backed Certificates, Series 2006-SC1 (“USB”)
RESP. PARTY: Defendants/cross-complainants, Pirouz M. Adeli and Paulina Valderas Adeli as Trustees of the Adeli Trust dated February 24, 2011 and Rafael Iryami (“Adeli”)

COURT’S TENTATIVE RULING

Motion for Summary Adjudication DENIED as to Issues Nos. 1 and 2 (first cause of action for declaratory relief and third cause of action for judicial foreclosure).

ANALYSIS

Defendants’ Objections to Plaintiff’s Evidence

Defendants failed to follow CRC 3.1354(c) by not submitting a proposed order for their evidentiary objections.

Wysocky Decl.

(1) OVERRULED
(2) OVERRULED
(3) OVERRULED
(4) OVERRULED
(5) OVERRULED
(6) OVERRULED
(7) OVERRULED
(8) OVERRULED
(9) OVERRULED
(10) OVERRULED
(11) OVERRULED
(12) OVERRULED

Feezer Decl.

(1) OVERRULED
(2) OVERRULED
(3) OVERRULED
(4) OVERRULED
(5) OVERRULED
(6) OVERRULED
(7) OVERRULED
(8) OVERRULED
(9) OVERRULED
(10) OVERRULED
(11) OVERRULED
(12) OVERRULED
(13) OVERRULED
(14) OVERRULED
(15) OVERRULED
(16) OVERRULED
(17) OVERRULED
(18) OVERRULED
(19) OVERRULED
(20) OVERRULED
(21) OVERRULED
(22) OVERRULED
(23) OVERRULED
(24) OVERRULED
(25) OVERRULED
(26) OVERRULED
(27) OVERRULED
(28) SUSTAINED
(29) Contains no objections
(30) SUSTAINED
(31) SUSTAINED
(32) SUSTAINED
(33) SUSTAINED
(34) SUSTAINED
(35) SUSTAINED
(36) SUSTAINED
(37) SUSTAINED
(38) SUSTAINED

Defendants’ Request for Judicial Notice

Plaintiff’s Third Amended Complaint – GRANTED.

Defendants Objections to Amended Declaration of Gina Feezer

(1) SUSTAINED
(2) SUSTAINED
(3) SUSTAINED

Motion for Summary Adjudication

This judicial foreclosure action arises from an underlying note in the amount of $ 817,500 and deed of trust dated December 23, 2005 relating to real property located at 606 West Vernon Avenue, Los Angeles, California. After a number of conveyances and a bankruptcy, the subject property was ultimately sold to Defendants Adeli as trustees of their trust in May 2012. In connection with that sale a payoff demand was sent to the escrow company in the amount of $ 480,200 and that same amount was wired to Ocwen Loan Servicing purportedly as the payoff for the entire loan. That amount has been retained by the trustee USB since that time. The Plaintiff contends that the payoff demand was unauthorized and was a fraudulent act. The Defendants contend that the loan has been paid off by the $480,200 that has been retained by the trustee and are seeking in their cross complaint to, among other things, remove the cloud of the deed of trust and clear their title to the subject property. Many of the underlying foundational facts are undisputed. However, as set forth below, the moving party has not shown the absence of triable issues of fact on a number of important issues, including whether the payoff demand was authorized or fraudulent, the amount of the outstanding loan balance, whether the loan is in fact in default, and whether given the trustee’s acceptance of and continued retention of the $480,200 there has been an accord and satisfaction.

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP § 437c(c).) There is a triable issue of fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) On its motion for summary judgment, the plaintiff maintains the burden that each of the elements has been proved and that there is no defense available. (Id.) Summary judgment motions are defined by the material allegations in the pleadings. (Baptist v. Robinson (2006) 143 Cal.App.4th 151, 159.) A motion for summary adjudication proceeds in all procedural aspects as a motion for summary judgment. (CCP § 437c(f)(2).)

Plaintiff moves for summary adjudication of the first and third causes of action.

Third Cause of Action – Judicial Foreclosure

The elements of a cause of action for judicial foreclosure are as follows: (1) Obligation provisions (e.g., promissory note) executed, delivered or assumed, with recordation date to define priority over subsequent liens; (2) Security provisions (e.g., deed of trust or mortgage) including described real property; (3) plaintiff’s status (e.g., note owner, payee, beneficiary, mortgagee, or assignee); (4) default of defendant supporting right to foreclose (e.g., breach, nonpayment of principal or interest); (5) interests claimed in the property by other defendants; and (6) attorney’s fees and other expenses, if provided for in the security instrument. (5 Witkin Cal. Pro. (5th 2008) Pleading §675; Cal. Civ. Prac. Real Property Litig. (Thomson Reuters 2012) §4:116. See also Arabia v. BAC Home Loans Servicing, L.P. (2012) 208 Cal.App.4th 462, 470-71 [plaintiffs must establish loan is in default, and amount, before court will order the property sold towards satisfying the balance, and a deficiency judgment against the debtor will be the difference between the fair market value at the time of foreclosure, and the amount of indebtedness].)

Here, Plaintiff argues that the element of Defendants’ default has been met. (Motion, p. 5.) However, the court has sustained Defendants’ objections to Plaintiff’s evidence regarding the alleged default. (See court’s Ruling on Defendant’s Evidentiary Objections Nos. 28, 30-38.)

In any event, even if the court were to consider Plaintiff’s evidence of default, Plaintiff has not met its initial burden of proof under CCP § 473c. According to Plaintiff, the loan that the Defendants took the property subject to was in the amount of $817,500. (Wysocky Decl., ¶ 2, Exhibit B.) As of January 9, 2014, there are 37 payments that are due on the loan, the next payment is the January 1, 2011 payment, and “the total amount due is $270,434.84”, including a late charge that totals $10,333.72. (Feezer Decl., ¶ 20.) But, in May 2012, Ocwen Loan Servicing received a wire transfer from American Trust Escrow in the amount of $480,200, purportedly serving as a payoff of the First Position Loan. (Feezer Decl., ¶ 16.) Plaintiff states that the “Payoff Statement/Escrow Demand” was neither created by nor authorized by Ocwen or Plaintiff, and Ocwen has never agreed to a payoff amount of $480,200. (Feezer Decl., ¶¶ 18-19.) However, Plaintiff does not state that it returned the $480,200 (and in fact it is clear that the amount has been retained) nor has Plaintiff clearly established that the loan is in default in light of this information. Plaintiff does not explain whether the $480,200 was included in the calculation of the amount due, which in itself creates a triable issue as to the amount due. Freezer also provides no explanation or foundation for how she calculated the amount due on the loan. (Freezer Decl. ¶¶ 19-20.)

At the very least, a triable issue of material fact exists as to whether the loan is in default i.e., the amount of $480,200 is in excess of the outstanding balance absent an acceleration. The moving party’s own evidence, revealing triable issues of material fact, may support denial of a motion for summary judgment. (See Simmons v. Cal. Coastal Complaint (1981) 124 Cal.App.3d 790, 797 [“[T]he presence of conflicting inferences must be taken into account in testing both whether a prima facie case to support a judgment has been made and whether any issues of fact are presented for resolution as a result of opposition filings.”]; Sesma v. Cueto (1982) 129 Cal.App.3d 108, 114 [moving party’s own records revealed contrary inferences].)

In the moving papers, Plaintiff contends that the “Court should grant the instant motion and set a prove-up hearing as to the amount of damages owed (including attorney’s fees) such that a writ of sale can issue.” (Mot. 6:1-3.) The court may grant summary adjudication only if the motion will entirely dispose of a cause of action. (CCP § 437c(f)(1).) CCP § 437c does not permit the Court to grant partial summary adjudication as to liability if the amount of damages is in dispute. (See Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084, 1097 [if amount of damages is in dispute, unliquidated damgaes, MSA cannot be granted].) In reply, Plaintiff seems to argue that the only remaining issue for a prove-up hearing is the amount of attorney fees awardable pursuant to CCP § 726(a). (Reply 1-2.) However, as discussed above, the moving papers also reflect a triable issue as to the amount owed on the loan. Accordingly, summary adjudication cannot be granted.

In Reply, Plaintiff states that the money “has never been applied to the loan and sits in a suspense account.” (Reply, p. 8.) Plaintiff did not support this assertion with evidence and the argument is therefore irrelevant.

In addition, Defendants argue that “[e]ven if the amount owed to USB exceeds $480,200.00 there is a triable issue of fact as to whether USB’s retention of this the [sic] wire transfer is an acceptance of the payment constituting and [sic] accord and satisfaction eliminating any debt allegedly owed to USB.” (Opposition, p. 6.) “An accord and satisfaction is the substitution of a new agreement for and in satisfaction of a preexisting agreement between the same parties. The usual purpose is to settle a claim at a lesser amount. [citations omitted] The elements of an accord and satisfaction are: (1) a bona fide dispute between the parties, (2) the debtor sends a certain sum on the express condition that acceptance of it will constitute full payment, and (3) the creditor so understands the transaction and accepts the sum.” (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058.)

Plaintiff acknowledge that at a minimum that there is a dispute between the parties regarding the debt. There is evidence that Defendants transferred, or caused to be transferred, $480,200 to Plaintiff in May 2012 along with a writing purporting to indicate that it represented the payoff amount of the loan. There is nothing in the record to show any communication from the Plaintiff or its agents to the Defendant about this amount, i.e., no statement that it was neither accepting this amount as a payoff nor otherwise applying it to the loan or that the demand was unauthorized. Plaintiff acknowledges that this amount has yet to be returned. There is a plausible inference from the “Payoff Statement/Escrow Demand” that the transfer of $480,200 would have been reasonably understood as an offer of payment of a lesser amount in satisfaction of the debt. (See Mot. Exh. 1 to Exh. L.) Given that there is evidence that Plaintiff has retained the $480,200 for more than two years, a substantial period of time, there is a triable issue as to whether Plaintiff has accepted the sum as full satisfaction of the amount due. Plaintiff submits no evidence of any protest made with regard to Defendants’ payment of $480,200 pursuant to a payoff statement that indicated that this amount would result in “total payoff” of the loan. There is also no evidence in the record of this motion that the Defendants were parties to or had knowledge of any fraud in this transaction.

In response, Plaintiff argues that the cases cited by Defendants are distinguishable, but this argument does not eliminate the evidence that Defendants transferred $480,200 to Plaintiff in May 2012, which apparently has yet to be returned. Finally, Plaintiff cites to an unpublished, federal case which is non-binding on this court (Huck v. Pfizer, Inc. (S.D. Cal., July 25, 2011) 2011 WL 3176432), which can only here serve as persuasive authority at best.

For these reasons, Plaintiff’s Motion for Summary Adjudication of its judicial foreclosure cause of action is DENIED.

First Cause of Action – Declaratory Relief

The elements of a claim for declaratory relief are that (1) plaintiff is a person interested under a written instrument or contract or (2) a declaration of his or her rights or duties with respect to another in respect to, in, over, or upon property and (3) an actual controversy. (CCP § 1060; Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal. App. 4th 592, 605-06.) Declaratory relief is unavailable where it duplicates other causes of action. (Hood v. Superior Court (United Chambers Administrators, Inc.) (1995) 33 Cal. App. 4th 319, 324.)

For the same reasons as discussed above regarding Plaintiff’s third cause of action for judicial foreclosure, Plaintiff’s Motion for Summary adjudication of its declaratory relief cause of action is DENIED.

The Motion is DENIED.