Case Number: KC069327 Hearing Date: August 22, 2017 Dept: J

Re: Carlos Zuniga v. Olivia Nava, et al. (KC069327)

MOTION FOR JUDGMENT ON THE PLEADINGS

Moving Party: Defendant Ocwen Loan Servicing, LLC

Respondent: Plaintiff Carlos Zuniga

POS: Moving OK; Opposing OK

Plaintiff alleges that on or about 10/2/07, he entered into a contract with his former landlord, Olivia Nava (“Nava”), in which Nava agreed plaintiff would take over ownership of the property located at 13637 Moccasin St. in La Puente (“subject property”) after he paid $10,000.00 and made all remaining monthly mortgage payments. Nava added plaintiff to the deed, and plaintiff made all mortgage payments from 10/2/07-6/14. During the time plaintiff was making payments, he obtained several loan modifications on the home with Nava’s permission. In or around June 2014, Nava allegedly went to the lender, Defendant Ocwen Loan Servicing, LLC (“Ocwen”), and told Ocwen to stop accepting payments from plaintiff. The loan subsequently went into default. On or about 1/17/17, Nava transferred plaintiff’s interest in the subject property to herself by allegedly forging plaintiff’s signature. Nava then executed a second quitclaim deed that day, in which she transferred the subject property to Defendant Jose Mares (“Mares”). Plaintiff claims that Nava’s purported sale of the subject property to Mares was done while plaintiff’s bankruptcy action was pending. The complaint was filed on 5/18/17. The First Amended Complaint, filed 5/23/17, asserts causes of action against Nava, Mares, Luz Maria Aguilar, Ocwen, Provident Title Company, Inc. and Does 1-100 for:

Fraud
Breach of Contract
Unjust Enrichment
Quiet Title
Declaratory Relief
Professional Negligence

On 6/19/17, plaintiff filed an “Amendment to Complaint,” wherein Merchant Bonding Company was named in lieu of Doe 1. A Case Management Conference is set for 10/17/17.

Defendant Ocwen Loan Servicing, LLC (“Ocwen”) moves the court for an order, per CCP § 438, granting it judgment on the pleadings on the fifth and sixth causes of action in Plaintiff Carlos Zuniga’s (“plaintiff”) First Amended Complaint (“FAC”), on the basis that they do not state facts sufficient to constitute a cause of action against it.

“Judgment on the pleadings is akin to a demurrer and is properly granted only if the complaint does not state facts sufficient to state a cause of action against that defendant. (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Smiley v. Citibank (1995) 11 Cal.4th 138, 146). The grounds for the motion must appear on the face of the complaint, and in any matters subject to judicial notice. (Code Civ. Proc., § 438, subd. (d).) The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts. (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 515-516; Long Beach Equities, Inc. v. County of Ventura (1991) 231 Cal.App.3d 1016, 1024.)” Shea Homes Ltd. Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.

REQUEST FOR JUDICIAL NOTICE:

Ocwen’s request for judicial notice (“RJN”) is ruled on as follows: GRANT as to Exhibit “1” (i.e., deed of trust recorded 6/6/06); GRANT as to Exhibit “2” (i.e., grant deed recorded 10/22/07); GRANT as to Exhibit “3” (i.e., bankruptcy docket report for Case No. 2:16-bk-25596-VZ); GRANT as to Exhibit “4” (i.e., “Order Dismissing Chapter 13 Case Due to Failure of Debtor to Comply with the Court’s Directive filed 11/10/16 in case styled In re: Carlos Zuniga Ceron, Case No. 2:16-bk-18716-WB); GRANT as to Exhibit “5” (i.e., bankruptcy docket report for Case No. 2:16-bk-18716-WB) and GRANT as to Exhibit “6” (i.e., full reconveyance recorded 2/21/17).

“[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, assuming there is no genuine dispute regarding the document’s authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.” Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265, disapproved of on other grounds by Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919.

The judicially noticeable documents and exhibits to the FAC reflect the following: On 6/6/06, a deed of trust was recorded on the property commonly known as 13637 Moccasin St. in La Puente (“subject property”), which identified Nava as the borrower, First Mortgage Corporation as the lender, Hacienda Service Corporation as the trustee and MERS as the beneficiary. (RJN, Exhibit “1”). On 10/22/07, a grant deed was recorded, which transferred an interest in the subject property to plaintiff. (Id., Exhibit “2”). On 6/30/16, plaintiff filed for Chapter 13 bankruptcy in Case No. 2:16-bk-18716-WB (“First Bankruptcy Action”). (Id., Exhibit “5”). On 11/10/16, the First Bankruptcy Action was ordered dismissed. (Id., Exhibit “4”). On 11/28/16, plaintiff again filed for Chapter 13 bankruptcy, in Case No. 2:16-bk-25596-VZ (“Second Bankruptcy Action”). (Id., Exhibit “3”). On 1/5/17, another grant deed was recorded, wherein plaintiff purportedly transferred his interest in the subject property to Nava. (FAC, Exhibit “B”). On 2/21/17, Ocwen caused a reconveyance of the deed of trust to be recorded against the subject property. (RJN, Exhibit “6”).

FIFTH CAUSE OF ACTION (DECLARATORY RELIEF):

“Any person interested under a written instrument,…or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property,…may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract…” CCP § 1060.

Declaratory relief is not available when the rights of the complaining party have crystallized into a cause of action for past wrongs, all relationship between the parties has ceased and there is no conduct of the parties subject to regulation by the Court. Osseous Technologies of America v. Discovery Ortho Partners (2010) 191 Cal.App.4th 357, 367. By virtue of the reconveyance, Ocwen no longer claims an interest in the subject property. The demurrer to the fifth cause of action is therefore sustained.

SIXTH CAUSE OF ACTION (PROFESSIONAL NEGLIGENCE):

“’The elements of a cause of action in tort for professional negligence are: (1) the duty of the professional to use such skill, prudence and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.’” Turpin v. Sortini (1982) 31 Cal.3d 220, 229, quoting Bud v. Nixen (1971) 6 Cal.3d 195, 200.

Plaintiff alleges that Ocwen was negligent by participating in the sale of the property during the pendency of the Second Bankruptcy Action. (FAC, ¶ 72). Specifically, plaintiff alleges that the sale of the subject property violated the automatic stay imposed by the Second Bankruptcy Action. (Id.). Ocwen, however, was not the buyer or seller of the subject property, but only the servicer for the creditor holding a deed of trust. In any event, the automatic stay imposed by the Second Bankruptcy Action expired by operation of law on 12/28/16. Pursuant to 11 U.S.C. § 362(c)(3), when a debtor had a prior bankruptcy pending within the 1-year period preceding a subsequent filing, the automatic stay terminates on the 30th day after the filing of the subsequent bankruptcy. See In re Reswick (9th Cir. BAP 2011) 446 B.R. 362, 373. Here, plaintiff filed the First Bankruptcy Action on 6/30/16. (RJN, Exhibit “5”). The First Bankruptcy Action was dismissed on 11/10/16. (Id., Exhibit “4”). Plaintiff then filed the Second Bankruptcy Action on 11/28/16. (Id., Exhibit “3”). The automatic stay imposed by the Second Bankruptcy Action, then, terminated on 12/28/16. Since the sale of the subject property occurred in January 2017 (FAC, ¶ 38), Ocwen did not violate the automatic stay.

Additionally, plaintiff fails to establish that Ocwen owed him a duty of care. “[L]oan servicers do not owe a duty to the borrowers of the loans they service. See Watts v. Decision One Mortg. Co., No. 09-43, 2009 U.S. Dist. LEXIS 59694 (S.D. Cal. July 13, 2009); Marks v. Ocwen Loan Servicing, No. 07-2133, 2009 WL 975792, at *7 (N.D.Cal. Apr. 10, 2009) (‘[A] loan servicer does not owe a fiduciary duty to a borrower beyond the duties set forth in the loan contract’).” Shepherd v. American Home Mort. Services, Inc. (E.D. Cal.2009) 2009 WL 4505925, at *2. Again, plaintiff was not even a borrower under the loan. (See RJN, Exhibit “1”).

The motion is granted. The court will hear from counsel for plaintiff with respect to the issue of leave to amend, and will require an offer of proof if leave is requested.