Case Name: Gonzalez v. Greenpoint Mortgage Funding, Inc., et al.
Case No.: 1-14-CV-267689
On July 8, 2014, plaintiff Ramona A. Gonzalez (“Plaintiff”) filed a complaint asserting claims against Greenpoint Mortgage Funding, Inc., Northwest Trustee Services, Inc., Real Time Resolutions, Inc., Mortgage Electronic Registration Systems, Inc., Ocwen Loan Servicing, LLC, Nguyen Tran (“Tran”) and Jagroop Bhandal (“Bhandal”) for: unfair business practices; breach of the covenant of good faith and fair dealing; slander of title; alter ego liability; anticipatory breach of contract; unjust enrichment; unfair business practices; predatory lending based on a violation of the Truth in Lending Act; violation of Civil Code section 2923.5; defamation; false light; void or cancel assignment or deed of trust; cancellation of a voidable contract under Revenue and Tax Code sections 23304.1 and 23305A and Corporations Code section 191(c)(7); and, intentional misrepresentation.
Defendants Tran and Bhandal (collectively, “demurring defendants”) demur to the complaint on the ground that it fails to state a cause of action against them. Indeed, the lone allegation in the complaint regarding these demurring defendants is that they “are individual investors, represented by Kirkman J. Hoffman, Esq. of the HOFFMAN LAW GROUP located at 2021 The Alameda, Suite 275 in San Jose, California 95126.” (Complaint, ¶ 7.)
Demurring defendants’ request for judicial notice of the trustee’s deed upon sale is GRANTED. (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382, quoting Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal. App. 4th 1106, 1117; see also 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, 264-265 (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”); see also Stormedia Inc. v. Super. Ct. (Werczberger) (1999) 20 Cal.4th 449, 457, fn.9; see also Evid. Code § 452, subds. (c), (d), (h).)
In response to the demurrer, Plaintiff filed a 23-paged opposition, in violation of Rule of Court 3.1113, which requires that no memorandum filed in opposition to a demurrer exceed 15 pages. (See Rule of Court 3.1113, subd. (d).) Plaintiff did not apply to the court for permission to file a longer memorandum, and her memorandum does not include a summary of argument. (See Rule of Court 3.1113, subds. (e) and (f).)
In her opposition, Plaintiff argues that the demurring defendants “are professional investors, (real estate speculators), who are in the business of asset acquisition for profit… [and c]onsidering their professional involvement in this matter, they knew or should have known that in light of the civil action identified as case number 112-CV-231150 involving the (‘Subject Property’) filed by Plaintiff in the Court Jurisdiction noted herein and currently pending, it was technically prudent to formally file a Lis Pendens in the Official Records of Santa Clara County Recorders Office in which the property is located to give ‘constructive notice’ to the public at large that this property has a lawsuit pending that could affect whether or not the owner of record has the right to sell, put it up as collateral for a loan or otherwise transfer the subject property pursuant to sections 405-405.6 of the California Code of Civil Procedures.” (Pl.’s opposition to demurrer (“Opposition”), p.7:1-10.)
However, there are no such allegations in the complaint. Nevertheless, even if Plaintiff were to have included these allegations, they are without merit. Demurring defendants were never required to file a notice of lis pendens on Plaintiff’s behalf or for the benefit of Plaintiff. Rather, Code of Civil Procedure section 405.20 states that “[a] party to an action who asserts a real property claim may record a notice of pendency of action in which that real property claim is alleged.” (Code Civ. Proc. § 405.20.) The language of the statute is permissive and not mandatory, and demurring defendants were not asserting a real property claim against Plaintiff. It was up to Plaintiff to record a lis pendens to give notice of the action. Accordingly, Plaintiff’s argument is plainly without merit.
Plaintiff also asserts that the demurring defendants conspired with Northwest Trustee Services, Inc. to transfer the title in blatant disregard of the December 11, 2013 order by Judge McKenney that “give[s] constructive notice to the public at large that the subject property has a lawsuit pending.” Again, there are no such allegations in the complaint itself and as evidenced by Plaintiff’s prior argument, Plaintiff did not record a notice of lis pendens. Instead, Plaintiff implies that, based on the unrecorded December 13, 2013 order, demurring defendants should have somehow had notice that there was a cloud on the title prior to the foreclosure sale.
Regardless, there is no possibility that Plaintiff could state any cause of action against demurring defendants based on this assertion as each of these claims are alleged to have been predicated on acts predating the trustee sale. (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).) The first, third, sixth, and eighth causes of action are predicated on certain defendants who allegedly “steer[ed] Plaintiff into a loan that was engineered to fail from inception.” The second and fifth causes of action involve contracts to which the demurring defendants were not parties. The fourth cause of action is dependent on the first three causes of action. The seventh and ninth though eleventh causes of action are premised on the publication of the notice of default. The twelfth and thirteenth causes of action are apparently premised on In re Walker (Bankr. E.D. Cal. May 20, 2010) 2010 Bankr. LEXIS 3781 *1, in which the court noted that “MERS acted “only as a nominee” and stated that “[s]ince MERS did not own the underl[y]ing [sic] note, it could not transfer the beneficial interest of the Deed of Trust to another.” (Id. at p.*6.) However, the Walker opinion is a federal decision that is not binding on this court, and numerous other decisions have criticized or declined to follow the Walker case. (See Bever v. Cal-Western Reconveyance Corp. (E.D.Cal. Oct. 1, 2013) 2013 U.S. Dist. LEXIS 143939 *1, *9-*10 (stating that “to the extent that Walker supports the argument that MERS cannot transfer a beneficial interest, that decision is contrary to more recent California decisions… [t]he Court will not follow Walker”); see also Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 83 (stating that “a trustor who agreed under the terms of the deed of trust that MERS, as the lender’s nominee, has the authority to exercise all of the rights and interests of the lender, including the right to foreclose, is precluded from maintaining a cause of action based on the allegation that MERS has no authority to exercise those rights… [t]he authority to exercise all of the rights and interests of the lender necessarily includes the authority to assign the deed of trust”); see also Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1504-1505 (same); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 270 (stating that “the allegation that MERS was merely a nominee is insufficient to demonstrate that MERS lacked authority to make a valid assignment of the note on behalf of the original lender”).) As there are numerous other decisions that are in fact binding on this court that contradict the statement in Walker, the twelfth and thirteenth causes of action lack merit. The fourteenth cause of action alleges that Ocwen Loan Servicing, LLC failed to reasonably contact Plaintiff or to reasonably engage Plaintiff in an interactive process and/or discussion designed to enable plaintiff to avoid foreclosure and/or avoiding losing her home to foreclosure. (See complaint, ¶¶ 114-116.) Like certain causes of action already discussed, this cause of action is premised on acts that occurred prior to the alleged involvement with the demurring defendants.
Demurring defendants’ demurrer to the first through thirteenth causes of action is SUSTAINED without leave to amend. The demurrer to the fourteenth cause of action is SUSTAINED with 10 days leave to amend a claim against the demurring defendants based on her conspiracy allegations.
The Court will prepare the Order.
Link to this page