Filed 12/16/19 Malfatti v. Specialzed Loan Servicing CA1/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

ANTHONY A. MALFATTI,

Plaintiff and Appellant,

v.

SPECIALZED LOAN SERVICING, LLC et al.,

Defendants and Respondents.

A153821

(Alameda County

Super. Ct. No. RG17853239)

Anthony Malfatti defaulted on a loan secured by a deed of trust resulting in foreclosure and a trustee’s sale of the property. Malfatti sued the loan servicers, the beneficiary of the deed of trust, and a prior owner of the loan. He sued under the Homeowners Bill of Rights, the Unfair Competition Law, and for wrongful foreclosure. The trial court sustained demurrers to his first amended complaint without leave to amend, and Malfatti appeals the judgment. We affirm.

BACKGROUND

“Because this appeal challenges a trial court order sustaining a demurrer, we draw the relevant facts from the complaint subject to judicial notice.” (Goncharov v. Uber Technologies, Inc. (2018) 19 Cal.App.5th 1157, 1161.)

In June 2007, Malfatti borrowed $469,000 from Countrywide Bank, FSB (Countrywide). He secured the loan with a deed of trust recorded against his Granada Avenue property in Oakland. The deed of trust named Mortgage Electronic Registration System (MERS) the beneficiary “as a nominee for Lender [Countrywide] and Lender’s successors and assigns.” It gave MERS “the right[] to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited, to releasing and canceling this Security Instrument.”

In March 2008, Malfatti as “Trustee of Declaration of Trust of Casa D’Oro Ministries” transferred the Granada Avenue property by grant deed to Casa D’Oro Ministries.

In July 2008, after Bank of America Corporation purchased Countrywide, the loan was serviced by BAC Home Loans Servicing LP, which was succeeded by Bank of America, N.A. (BANA). In November 2012, BANA assigned and transferred servicing of the loan to Specialized Loan Servicing, LLC.

On January 9, 2013, MERS assigned the deed of trust to HSBC Bank USA, National Association, as trustee for the holders of the Deutsche Alt-A Securities, Inc. Mortgage Loan Trust, Mortgage Pass-Through Certificates Series 2007-OA4 (HSBC). Robin Mathews, identified as “Assistant Secretary of MERS,” executed the Assignment.

On November 17, 2015, a Notice of Default and Election to Sell Under Deed of Trust was recorded against the property stating Malfatti was in arrears $123,960.16. On April 1, 2016, the Mortgage Law Firm, which was SLS’s foreclosing trustee, recorded a Notice of Trustee’s Sale for the Granada Avenue property. Malfatti engaged in various efforts to modify the defaulted loan. Around November 10, 2016, SLS mailed him a letter discussing possible foreclosure options. The letter “was mailed to [Malfatti’s] residence, located at 4100-10 Redwood Road, Unit 391, Oakland, CA 94619.” Ultimately, the loan was never modified. On January 26, 2017, a Trustee’s Deed Upon Sale was recorded, transferring title to the property to Duke Partners II, LLC.

In March 2017, Malfatti filed suit and ultimately filed the operative First Amended Complaint against BANA, SLS, MERS, HSBC, and the Mortgage Law Firm. He asserted five causes of action: (1) violation of the California Homeowners Bill of Rights under Civil Code section 2923.6, (2) violation of the Unfair Competition Law (UCL) under Business and Professions Code section 17200, (3) wrongful foreclosure, (4) fraud by deceit, and (5) a violation of Civil Code section 2934a.

After a contested hearing, the trial court sustained the demurrers filed by defendants without leave to amend. Malfatti, representing himself in propia persona, moved for reconsideration, which the court denied. The court dismissed Malfatti’s case in its entirety with prejudice. Malfatti, in propia persona, appeals.

DISCUSSION

I. Standard of Review on Demurrer

We review an order sustaining a demurrer de novo to determine whether the complaint states facts sufficient to constitute a cause of action. (Bower v. AT & T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1552; Stanton Road Associates v. Pacific Employers Ins. Co. (1995) 36 Cal.App.4th 333, 341 (Stanton Road).) We construe the complaint “liberally . . . with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) “ ‘ “[W]e treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.” [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.’ ” (Stanton Road, supra, 36 Cal.App.4th at p. 340; see Jager v. County of Alameda (1992) 8 Cal.App.4th 294, 296-297.)

II. BANA

Malfatti raises no argument regarding BANA in his opening or reply briefs, which are both devoid of any discussion about why the judgment in BANA’s favor was in error. “ ‘A judgment or order of the lower court is presumed correct. . . . and error must be affirmatively shown.’ ” (Denham v. Superior Court (1970) 2 Cal.3d 557, 564 (Denham), italics omitted.) “When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785.) Accordingly, Malfatti has waived any claim of error regarding the judgment for BANA. We presume it is correct.

The rest of our discussion addresses the judgment in favor of SLS, MERS, and HSBC (collectively the SLS Defendants), which is the entire focus of Malfatti’s briefs.

III. SLS DEFENDANTS

A. First Cause of Action

Malfatti argues the trial court abused its discretion when it dismissed his first cause of action under the Homeowners Bill of Rights, in which he alleged violations of the statute’s prohibition against dual-tracking.

“The Homeowner Bill of Rights (Civ. Code, 4 §§ 2920.5, 2923.4–.7, 2924, 2924.9–.12, 2924.15, 2924.17–.20) (“HBOR”), effective January 1, 2013, was enacted ‘to ensure that, as part of the nonjudicial foreclosure process, borrowers are considered for, and have a meaningful opportunity to obtain, available loss mitigation options, if any, offered by or through the borrower’s mortgage servicer, such as loan modifications or other alternatives to foreclosure.’ (§ 2923.4.) Among other things, [the] HBOR prohibits ‘dual tracking,’ which occurs when a bank forecloses on a loan while negotiating with the borrower to avoid foreclosure. (§ 2923.6.) [The] HBOR provides for injunctive relief for statutory violations that occur prior to foreclosure (§ 2924.12, subd. (a)), and monetary damages when the borrower seeks relief for violations after the foreclosure sale has occurred. (§ 2924.12, subd. (b).)” (Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272.)

The HBOR applies only to first lien mortgages or deeds of trust that are secured by “owner-occupied residential real property containing no more than four dwelling units.” (Civ. Code, § 2924.15; Herrejon v. Ocwen Loan Servicing, LLC (2013) 980 F. Supp.2d 1186, 1209-1210.) The term “owner-occupied” means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes. (Civ. Code, § 2924.15.)

Here, Malfatti alleged in his operative complaint that “[a]t all times relevant to this action, [he] has owned [the] real property” located on Granada Avenue. But the judicially noticed grant deed shows Malfatti transferred the property to Casa D’Oro Ministries as of March 12, 2008. In one of his prior complaints, Malfatti underscored this and alleged: “Plaintiff CASA D’ORO MINISTRIES is the owner, in fee simple title, of the subject real property of this action . . . bearing municipal address . . . Granada Avenue, Oakland, California.” Since Malfatti did not own the property, he could not allege the property was owner-occupied, and the trial court properly sustained the demurrer to his HBOR cause of action without leave to amend.

Malfatti says he was a trustee of Casa D’Oro Ministries and that transferring the property to the non-profit trust was simply a way to refinance his loan. He claims he resided there, made payments on the loan, and was the sole administrator of the Trust, so “for all intents and purposes, [the property] has never ceased to be owned and controlled” by him. He further contends he held a “beneficial interest . . . in the assets included in the Trust” which give him “standing to bring this action as a beneficiary . . . of the Non-Profit Trust.” Regardless of whether he has a beneficial interest which gives him standing to sue, Malfatti provides no argument or authorities that make him, as beneficiary or trustee of Casa D’Oro Ministries, the owner of the Granada Avenue property within the meaning of the HBOR. “Where a point is merely asserted by appellant’s counsel without any argument of or authority for the proposition, it is deemed to be without foundation and requires no discussion by the reviewing court.” (Atchley v. City of Fresno (1984) 151 Cal.App.3d 635, 647.) In light of the judicially noticed grant deed transferring ownership of the property to Casa D’Oro Ministries, he cannot allege the ownership required under the HBOR.

Based on this conclusion, we do not address Malfatti’s extensive arguments regarding his occupancy of the house. Even assuming he could allege he occupied the property as his primary residence, Casa D’Oro Ministries’ ownership of the property is fatal to his claim.

B. Second Cause of Action

Malfatti contends the court’s dismissal of the second cause of action under the UCL was also erroneous.

The UCL defines unfair competition as any unlawful, unfair or fraudulent business act or practice, and unfair, deceptive, untrue, or misleading advertising. (Bus. & Prof. Code, § 17200.) “ ‘By proscribing “any unlawful” business practice, “section 17200 ‘borrows’ violations of other laws and treats them as unlawful practices” that the unfair competition law makes independently actionable.’ ” (Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 938.)

The UCL violation alleged in Malfatti’s operative complaint was based on the practice of dual-tracking prohibited by the HBOR. Because the UCL claim utilizes the HBOR as its trigger statute, if no violation of the HBOR has been demonstrated, the entire UCL cause of action fails. Since the HBOR cause of action was dismissed with prejudice so, too, his UCL cause of action was rendered ineffectual. Malfatti does not allege any other unlawful business practices by the SLS Defendants which would support a UCL claim, so the trial court correctly sustained the demurrer as to this cause of action without leave to amend.

C. Third, Fourth, and Fifth Causes of Action

Malfatti contends the trial court erred when it sustained the demurrer to his third, fourth, and fifth causes of action on res judicata grounds.

The doctrine of res judicata operates to give “ ‘ “certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.” ’ ” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797 (Boeken), italics omitted.) The primary aspect of res judicata, claim preclusion, bars a second suit between the same parties on the same cause of action. (Ibid.) “The law of preclusion helps to ensure that a dispute resolved in one case is not relitigated in a later case.” (Samara v. Matar (2018) 5 Cal.5th 322, 326.) “Claim preclusion ‘prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.’ ” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824 (DKN Holdings), italics omitted.) This doctrine “ ‘rests upon the ground that the party to be affected, or some other with whom he is in privity, has litigated, or had an opportunity to litigate the same matter in a former action in a court of competent jurisdiction, and should not be permitted to litigate it again to the harassment and vexation of his opponent. Public policy and the interest of litigants alike require that there be an end to litigation.’ ” (Citizens for Open Access etc. Tide, Inc. v. Seadrift Assn (1998) 60 Cal.App.4th 1053, 1065.) “Claim preclusion 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, supra, 61 Cal.4th at p. 824.) “If claim preclusion is established, it operates to bar relitigation of the claim altogether.” (Ibid.) All three requirements for claim preclusion were satisfied here.

1. Same Cause of Action

“ ‘In California the phrase “cause of action” is often used indiscriminately . . . to mean counts which state [according to different legal theories] the same cause of action. . . .’ [Citation.] But for purposes of applying the doctrine of res judicata, the phrase ‘cause of action’ has a more precise meaning: The cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced.” (Boeken, supra, 48 Cal.4th at p. 798.) “Causes of action are considered the same if based on the same primary right.” (Citizens for Open Government v. City of Lodi (2012) 205 Cal.App.4th 296, 325.) “ ‘[T]he primary right is simply the plaintiff’s right to be free from the particular injury suffered.’ ” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.) “Thus, under the primary rights theory, the determinative factor is the harm suffered. When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right.” (Boeken, supra, at p. 798.)

The current action is Malfatti’s fourth lawsuit seeking to invalidate the deed of trust or the foreclosure against his property. In June 2011, in Malfatti v. Mortgage Electronic Registrations Systems, Inc. et al., U.S. District Court-N.D. Cal., Case No. C11-03142, Malfatti sued MERS to cancel the deeds of trust designating MERS the beneficiary. The trial court granted MERS’s motion to dismiss the claims seeking to cancel the deeds.

In January 2013, Malfatti filed a second federal lawsuit involving the property, Malfatti v. Specialized Loan Servicing LLC., U.S. District Court-N.D. Cal., Case No. C13-00287), in which he sued SLS, MERS, and HSBC for wrongful foreclosure. Malfatti alleged the notice of default and intent to foreclose recorded against his property in December 2012 was void because SLS had no right to claim an interest in the property because it was neither a trustee under the deed of trust, a holder of the note securing the property, nor a beneficiary of the deed of trust. Malfatti voluntarily dismissed the case without prejudice.

In March 2016, Malfatti filed another wrongful foreclosure action in state court, Malfatti v. Bank of America, N.A., et al., Alameda County Superior Court, Case No. RG16808857, against SLS, MERS, HSBC, the Mortgage Law Firm, and BANA. Malfatti sued for wrongful foreclosure on the grounds that MERS was not entitled to act as a nominee beneficiary authorized to assign the deed of trust to HSBC, and thus HSBC could not exercise its foreclosure rights due to the void assignment. He alleged “MERS had no interest to convey on December 18, 2012 to HSBC. . . . Therefore, the 2012 Assignment of the Deed of Trust . . . from MERS to HSBC . . . is fraudulent, null and void ab initio. HSBC is pursuing foreclosure activity solely on the basis that the aforementioned void assignment confers authority upon it do so.” He further alleged that because MERS was not authorized to assign the beneficial interest in his loan to HSBC, neither HSBC nor its agent SLS could authorize the Mortgage Law Firm to exercise the power of sale under the deed of trust. After sustaining the demurrers to Malfatti’s amended complaint without leave to amend, the trial court dismissed the amended complaint with prejudice.

This case involves the same loan for the same Granada Avenue property secured by the same deed of trust as the prior cases. In this lawsuit, Malfatti alleged in the third cause of action for wrongful foreclosure that the Assignment was void, rendering foreclosure proceedings improper. In the fourth cause of action for fraud by deceit, he alleged defects in the Assignment due to “a fraudulent assertion that [the Assignment] was executed by an Officer of MERS.” Malfatti further alleged the documents instituting foreclosure are “void, invalid and illegal . . . because they are all predicated on the false premise that said [Assignment] was validly executed and validly notarized.” In the fifth cause of action, he alleged Civil Code section 2934a was violated based on the allegedly invalid assignment since MERS was never the true beneficiary of the deed of trust and thus ‘had no authority, right or power to execute said [assignment]”, rendering the foreclosure proceedings invalid.

Thus, Malfatti is now suing to circumvent the same harm, namely, the foreclosure against his Granada Avenue property, by way of an allegedly fraudulent or void assignment as he did in his earlier state lawsuit. In both state cases, he sought to vindicate his claim to ownership of the property, free and clear of the foreclosure proceedings and the purportedly void deed of trust. We have no difficulty concluding that the current action involves the same primary right as his earlier state action. (See Gillies v. JPMorgan Chase Bank, N.A. (2017) 7 Cal.App.5th 907, 914 [“It matters not that appellant has a new theory of wrongful foreclosure. It is the same primary right which appellant has always claimed.”].)

2. Same Parties

In his first state case, Malfatti named HSBC, MERS, and SLS as defendants. In this action, he again sued HSBC, MERS, and SLS. The parties in the two cases are identical.

3. Final Judgment on the Merits

In his first state case, the trial court sustained the demurrers to Malfatti’s amended complaint without leave to amend and dismissed the entire action with prejudice. “[F]or purposes of applying the doctrine of res judicata . . . , a dismissal with prejudice is the equivalent of a final judgment on the merits . . . . [Citations.] . . . ‘The statutory term “with prejudice” clearly means the plaintiff’s right of action is terminated and may not be revived. . . . [A] dismissal with prejudice . . . bars any future action on the same subject matter.’ ” (Boeken, supra, 48 Cal.4th at p. 793.) It is the equivalent of a judgment on the merits. (Torrey Pines Bank v. Superior Court (1989) 216 Cal.App.3d 813, 820-821.)

None of Malfatti’s arguments against res judicata are compelling. He disagrees that the two cases assert identical causes of action. He argues that his latest case “alleges additional facts . . . i.e., that Robin Mathews, who signed the 2012 [Assignment], was never employed by MERS or could act as an officer for MERS. Specifically, [he] alleges in his FAC that Robin Mathews did not have authority to execute the [Assignment] because the MERS Board of Directors did not vote on, approve and ratify non-MERS employee Robin Mathews’ authority to execute said [Assignment].” He contrasts these allegations concerning Mathews with allegations of past complaints, which asserted different reasons for voiding the Assignment. Malfatti may be pleading “additional facts” in this case, but these new allegations do not entitle him to re-litigate a decided matter. “ ‘ “If the matter was within the scope of the action, related to the subject matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged.” ’ ” (Villacres v. ABM Industries Inc. (2010) 189 Cal.App.4th 562, 576.) Malfatti’s allegations regarding Mathews’s authority to act on behalf of MERS is simply an alternate legal theory to invalidate the assignment, which he unsuccessfully challenged in prior cases on a different theory.

Malfatti’s reliance on Daniels v. Select Portfolio Serving, Inc. (2016) 246 Cal.App.4th 1150 (Daniels), is also misplaced. There, the Danielses defaulted on their mortgage loan after unsuccessfully attempting to modify it. (Id. at pp. 1158-1160.) In 2011, they sued their loan servicer and other defendants in a mass joinder action alleging in part that their loan servicers falsely misrepresented they would assist in loan modifications. (Id. at p. 1161.) The court sustained the defendants’ demurrer with leave to amend, noting that the plaintiffs failed to plead their misrepresentation claims with specificity. (Id. at p. 1161.) Since the Danielses did not file a timely amended complaint, the trial court entered judgment. (Ibid.) In 2013, the Danielses filed another action against the loan servicer, the foreclosing trustee, and other defendants, which again included claims premised on the servicer’s conduct in connection with the loan modification process. (Id. at pp. 1161-1162.) The court sustained a demurrer without leave to amend on res judicata grounds and dismissed the loan servicer and foreclosing trustee. (Id. at p. 1162.)

On appeal, the court reversed the trial court’s res judicata decision. (Daniels, supra, 246 Cal.App.4th at p. 1188.) The court noted that the preclusive effect of a judgment of dismissal entered “after a general demurrer had been sustained with leave to amend and appellants had failed to amend” was of “ ‘limited scope.’ ” (Id. at p. 1165.) Recognizing the Danielses had alleged facts about the attempted modification of the loan which had not been alleged in the 2011 action, the court observed, “[T]he final judgment on the merits requirement is satisfied only if, despite the newly alleged facts, appellants claims are (1) susceptible to a demurrer (2) on the same grounds that the demurrer in [the first action] was sustained.” (Ibid.) Because the trial court had not considered the order in sustaining the demurrer in the first case the Danielses filed, it never analyzed whether their claims were susceptible to a demurrer for the same reasons as before. (Id. at p. 1166.) That issue was not briefed below or developed on appeal, so the court declined to determine whether claim preclusion barred any of the Danielses claims and allowed them to amend their complaint. (Ibid.)

Malfatti argues that since his fourth cause of action “is based upon additional facts than the prior actions . . . [it] is clearly not susceptible to a demurrer on the same grounds that the Demurrer in the prior action was sustained because the additional facts pleaded in the current action relates [sic] to the authority of the person executing said [Assignment] on behalf of MERS and not the authority of MERS itself to execute said [Assignment].” We disagree with Malfatti’s analysis. Daniels does not address the same-cause-of-action element of res judicata, so it does not offer any analysis of the primary rights theory we have relied upon to conclude that element is satisfied here. Rather, Daniels declined to find a prior final judgment on the merits. (Daniels, supra, 246 Cal.App.4th at p. 1165.) That analysis has little bearing in this case because it was premised on the fact that the general demurrer in the earlier lawsuit had been sustained with leave to amend and the plaintiffs did not amend. (Ibid.) Here, Malfatti’s earlier case, that is the basis for our res judicata analysis, was dismissed after the court sustained a demurrer without leave to amend. There is no question that such a dismissal is a final judgment on the merits. (See Boeken, supra, 48 Cal.4th at p. 793.)

Malfatti also disputes that this action involves identical parties to previous ones. He contends, “[T]he parties in the present case were not identical with the parties in the prior cases.” Specifically, he refers to his second federal case which named solely SLS as a defendant. Correct. SLS was the only defendant in that case, but his first case in state court included all the same Defendants as this one.

Malfatti further argues the “second Superior Court of California civil action . . . was not fully adjudicated or heard on the merits” since he voluntarily dismissed it. We understand his reference to be to his second federal case, the only one he voluntarily dismissed, but his argument fails to account for his first state case dismissed with prejudice.

Since we conclude res judicata bars Malfatti from seeking relief from foreclosure through his third, fourth, and fifth causes of action, we need not consider any of Malfatti’s underlying arguments challenging Mathews’s authority to assign the deed of trust.

D. Leave to Amend

Malfatti further argues the trial court erred when it denied him leave to amend his complaint. He contends “there is more than a reasonable possibility that [he] can cure any pleading insufficiencies by the Court, by . . . pleading with more supporting facts, including more specificity in his causes of action, through an allowed Amended Complaint.”

We review a trial court ruling sustaining a demurrer without leave to amend to determine “whether on the pleaded and noticeable facts there is a reasonable possibility of an amendment that would cure the complaint’s legal defect or defects.” (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.) “[T]he burden falls upon the plaintiff to show what facts he or she could plead to cure the existing defects in the complaint. [Citation.] ‘To meet this burden, a plaintiff must submit a proposed amended complaint or, on appeal, enumerate the facts and demonstrate how those facts establish a cause of action.’ ” (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 792.) “ ‘The assertion of an abstract right to amend does not satisfy this burden. [Citation.] The plaintiff must clearly and specifically set forth the “applicable substantive law” [citation] and the legal basis for amendment, i.e., the elements of the cause of action and authority for it. Further, the plaintiff must set forth factual allegations that sufficiently state all required elements of that cause of action. [Citations.] Allegations must be factual and specific, not vague or conclusionary.’ ” (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1491.)

Here, Malfatti sought leave to amend only to add a cause of action for negligence based on SLS’s allegedly negligent review of his loan modification application. Based on our review of the record, there was no indication Malfatti sought leave from the trial court to amend any of the five causes of action discussed above in a way that could assert injury to a different primary right. We have no grounds to conclude the trial court abused its discretion in denying him leave to amend his complaint. We are not persuaded absent actual ownership of the house, which he cannot allege in light of the transfer to Casa D’Ora Ministries, that new allegations regarding his residency could revive his first and second causes of action or the causes of action asserted in his prior lawsuit. The trial court did not abuse its discretion in sustaining the demurrers without leave to amend.

E. Continuance of Hearing on Demurrer

Finally, we address Malfatti’s argument that the trial court erred by failing to continue the hearing on the demurrer. He contends his counsel’s malpractice and other errors “scream[ed] for a continuance . . . in order to allow [him] . . . a fair and just opportunity to be heard in a competent fashion.”

“ ‘ “Generally, power to determine when a continuance should be granted is within the discretion of the court, and there is no right to a continuance as a matter of law.” ’ ” (American Continental Ins. Co. v. C & Z Timber Co. (1987) 195 Cal.App.3d 1271, 1280.) To obtain a continuance of a hearing, a party must show good cause. (Cotton v. StarCare Medical Group, Inc. (2010) 183 Cal.App.4th 437, 444.)

Whether a particular hearing or trial should be postponed under a given set of facts is determined under an abuse of discretion standard of review. (Dailey v. Sears, Roebuck & Co. (2013) 214 Ca1.App.4th 974, 1004.) In determining whether the trial court abused its discretion in denying a request for a continuance, a reviewing court should focus on whether the denial prejudiced the requestor or whether it constituted harmless error. (See Rebney v. Wells Fargo Bank, N.A. (1990) 220 Cal.App.3d 1117, 1141, disapproved on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.).

When Malfatti filed the amended complaint in June 2017, his attorney of record was Mark Lapham. After demurrers were filed, Malfatti retained and substituted in Crossroads Legal Group. The demurrers were originally noticed to be heard on August 22, 2017, but the court continued the hearing for a couple of weeks. On September 1, 2017, the court issued its tentative ruling sustaining the demurrers. On September 5, 2017, the matter was heard, and Edward Chung of the Crossroads Legal Group argued at the hearing on behalf of Malfatti. The court’s minutes from that date indicate, “The tentative ruling was published and was contested.” The court’s minutes further note, “Plaintiff’s request for continuance of the hearings on the demurrers and to continue this case management conference in order for Plaintiff to obtain new counsel is DENIED.” Following the hearing, the trial court adopted its tentative ruling and sustained the demurrers without leave to amend.

According to a “declaration of attorney neglect” from Chung that accompanied Malfatti’s subsequent reconsideration motion, his partner “neglected to take the formal steps to contest the Court’s tentative ruling” when it was issued due to illness. Nonetheless, Malfatti insisted his lawyers appear at the hearing and argue against the tentative. Chung also stated that they had developed “an irreconcilable conflict of interest” with Malfatti based on “substantial and material disagreements with him regarding legal strategy.” He added: “In retrospect, I believe it may have been better to alert the court to my ethical conflict of interest and simply requested to have the matter continued so that Mr. Malfatti could have obtained new counsel to represent him and make such arguments as Mr. Malfatti wanted advanced or so that Mr. Malfatti could have appeared and made such arguments himself.” He cited as one “concrete example” of failing to represent Malfatti adequately his statement to the court that he believed further pursuit of the action might submit his law firm and Malfatti to sanctions, which he regretted stating given it “may not have been in [Malfatti’s] interests.” Chung supported Malfatti’s request to reconsider its rulings, reverse the order sustaining the demurrer, and set the matter over to allow Malfatti to obtain new counsel or appear on his own behalf.

In the order denying Malfatti’s reconsideration motion, the trial court noted that Malfatti’s counsel appeared for the hearing on the demurrer and the court heard the matter notwithstanding the failure to timely contest. It asserted, “[C]ounsel’s failure to timely contest the court’s tentative ruling, although arguably a mistake or inadvertent, [was not] a factor in the court’s ultimate ruling sustaining the demurrer without leave to amend.” As to Chung’s concerns about the comments he made about possible sanctions, the court stated, “Counsel’s suppositions [that his comments resulted in the court’s ruling] are incorrect and do not appear in the court’s ruling as a factor in its determination.”

Under these circumstances, we see no valid basis for the court to have granted the continuance. First, we have no record that Malfatti ever requested a continuance prior to the September 5, 2017 hearing date or proffered any grounds establishing good cause to justify the request. (Cf. Mahoney v. Southland Mental Health Assocs. Med. Group (1990) 223 Ca1.App.3d 167, 170-172 [denial of continuance not abuse of discretion where counsel failed to submit declaration in support, give prior notice, make request promptly or show good cause]). The court’s minutes indicated Malfatti requested the continuance to obtain new counsel at the hearing, but it is unlikely this reason would have established good cause. At the time, Malfatti had new counsel who had appeared at the hearing at Malfatti’s insistence.

In addition, Malfatti has not demonstrated he was prejudiced by the denial of the continuance. He was not harmed by counsel’s failure to contest the court’s tentative ruling. In denying Malfatti’s reconsideration motion, the trial court explicitly stated counsel’s failure to timely contest had no bearing on the ultimate decision. The court’s order reflects the tentative ruling was contested and the matter was argued. Nor was Malfatti harmed by Chung’s statements related to conflicts of interest or possible sanctions, which did not factor into the court’s decision. Malfatti provides no further arguments or facts he could have developed if a continuance had been granted, and thus no prejudice resulted from the denial of a continuance.

DISPOSITION

The judgment of dismissal is affirmed. Costs are awarded to respondents.

_________________________

Siggins, P.J.

WE CONCUR:

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Petrou, J.

_________________________

Wick, J.*

Malfatti v. Specialized Loan Servicing, LLC, A153821