Filed 8/29/18 Qumsia v. Selene Finance LP CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

ROD QUMSIA, as Trustee, etc., et al.,

Plaintiffs and Appellants,

v.

SELENE FINANCE LP et al.,

Defendants and Respondents.

G054801

(Super. Ct. No. 30-2015-00827927)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Linda S. Marks, Judge. Affirmed.

Stephen F. Lopez for Plaintiffs and Appellants.

The Law Offices of Michelle Ghidotti and Michelle R. Ghidotti, Stephen T. Hicklin, Robert B. Norum and Nancy R. Tragarz for Defendants and Respondents.

* * *

 

Plaintiffs Rod Qumsia and Viviana Solitro Qumsia (plaintiffs) allege that defendants Wilmington Savings Fund, FSB (WSF) and Selene Finance, LP (Selene) (collectively, defendants) lacked authority to foreclose on plaintiffs’ home because several assignments in the loan’s chain of title to WSF were void. Relying on judicially noticed public records that confirmed WSF’s rights in the subject loan at the time of foreclosure, the trial court granted summary judgment for defendants. The trial court found that plaintiffs’ sole evidence in support of their void transfer theory, the declaration of William J. Paatalo, was inadmissible, and that there was therefore no issue of material fact as to defendants’ interest in the subject loan at the time of foreclosure. For the reasons set forth below, we affirm the judgment.

I

FACTS AND PROCEDURAL HISTORY

The admissible portion of the summary judgment record reflects the following facts. In 2006, plaintiffs obtained a mortgage loan secured by a deed of trust from Washington Mutual (WaMu) to purchase a residence in Ladera Ranch, California. In 2008, WaMu’s assets were put into receivership with the Federal Deposit Insurance Corporation (FDIC) and sold to JPMorgan Chase Bank (Chase) pursuant to a Purchase and Assumption Agreement (the Agreement). Plaintiffs’ loan was among the WaMu assets acquired by Chase in 2008 as part of that transaction. In 2011, Chase, as WaMu’s successor in interest, assigned plaintiffs’ note and deed of trust to Bank of America. In 2015, Bank of America assigned the note and deed of trust to WSF. Both assignments were recorded in Orange County.

Plaintiffs defaulted on the loan, and in July 2015, WSF’s designated trustee recorded a notice of default. Plaintiffs did not cure the default, and in October 2015, a notice of sale was recorded. The nonjudicial foreclosure sale went forward in January 2016.

Shortly before the foreclosure sale occurred, plaintiffs filed suit for wrongful foreclosure, quiet title, and cancellation of instrument. The named defendants included both WSF (the entity that foreclosed) and Selene (the servicer of the loan). In their operative Second Amended Complaint, plaintiffs alleged that defendants had no right to foreclose on the subject property because several assignments necessary to WSF’s chain of title (i.e., the 2011 assignment from Chase to Bank of America and the 2015 assignment from Bank of America to WSF) were void.

Defendants moved for summary judgment, asking the trial court to take judicial notice of the Agreement and the various recorded assignments, among other things. Defendants also submitted two declarations by Mesha Williams, an employee of Selene, in support of their motion.

Plaintiffs opposed the motion. Importantly, the only evidence plaintiffs submitted in their opposition was the declaration of William J. Paatalo, a purported expert in mortgage securitization who claimed to have tracked plaintiffs’ loan using a software program called ABSNet. Relying on information obtained through ABSNet, Paatalo opined that in 2007, WaMu had assigned the subject loan to its affiliate, Washington Mutual Asset Acceptance Corp. (WMAAC), which had then assigned the loan to Bank of America, which in turn had pooled and securitized the loan in an offshore trust known as RESIF 2007-B. Thus, argued plaintiffs, since Chase did not acquire the

subject loan in 2008 as part of the Agreement, Chase had no interest in the loan to assign to Bank of America, and Bank of America in turn had no interest to assign to WSF, rendering WSF’s foreclosure unlawful.

Defendants objected to Paatalo’s declaration on a number of grounds, and the trial court sustained those objections, observing that “the evidence submitted in support of [p]laintiffs’ contention that the loan was sold to RESIF 2007-B Trust on or before 3/29/07 is inadmissible.” The trial court granted defendants’ request for judicial notice of the Agreement, the publicly recorded deed of trust and assignments, and various other documents, and held that “the legal consequences of the judicially noticeable documents reflect valid chain of title.” From this, the trial court concluded that plaintiffs lacked standing to challenge the nonjudicial foreclosure sale, and therefore entered summary judgment for defendants. Plaintiffs now appeal.

 

II

DISCUSSION

A. The Trial Court’s Evidentiary Rulings

1. Standard of Review

Plaintiffs assert that because this matter “involves” a summary judgment motion, we should review the trial court’s evidentiary rulings de novo. Not so. We review the trial court’s rulings on evidentiary objections in summary judgment proceedings for abuse of discretion. (Duarte v. Pacific Specialty Ins. Co. (2017) 13 Cal.App.5th 45, 52; Sanchez v. Kern Emergency Med. Transportation Corp. (2017) 8 Cal.App.5th 146, 154.)

“The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court.” (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479.) “A ruling that constitutes an abuse of discretion has been described as one that is ‘so irrational or arbitrary that no reasonable person could agree with it.’” (Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 773.)

2. Rules Governing the Admissibility of Expert Declarations

The same rules of evidence applicable to oral testimony at trial apply to the declarations submitted on a motion for summary judgment. “[T]he summary judgment statute still requires the evidence provided in declarations to be admissible at trial.” (Perry v. Bakewell Hawthorne, LLC (2017) 2 Cal.5th 536, 541.) “[A] party opposing a motion for summary judgment may use declarations by an expert to raise a triable issue of fact on an element of the case provided the requirements for admissibility are established as if the expert were testifying at trial.” (Towns v. Davidson (2007) 147 Cal.App.4th 461, 472.) “The condition that an expert’s declaration must set out admissible evidence . . . has determinative importance.” (Perry v. Bakewell Hawthorne, supra, 2 Cal.5th at p. 541.)

For an expert opinion to be admissible, the witness must have sufficient knowledge, skill, experience, training, or education to qualify as an expert on the subject matter of his or her testimony. (Evid. Code, § 720, subd. (a).) His or her opinion must also be based on material “of a type that reasonably may be relied upon by an expert in forming an opinion upon the subject.” (Evid. Code, § 801, subd. (b).) “The essential questions which must be favorably answered to qualify a witness as an expert are two: Does the witness have the background to absorb and evaluate information on the subject? Does he [or she] have access to reliable sources of information about the subject?” (Los Altos El Granada Investors v. City of Capitola (2006) 139 Cal.App.4th 629, 658.)

An expert’s opinion based on assumptions of fact without evidentiary support, or on speculative or conjectural factors, has no evidentiary value and may be excluded from evidence. (Sanchez v. Kern Emergency Medical Transportation Corp. (2017) 8 Cal.App.5th 146, 155.) Similarly, when an expert’s opinion is purely conclusory because it is unaccompanied by a reasoned explanation connecting the factual predicates to the ultimate conclusion, that opinion has no evidentiary value; an “‘“expert opinion is worth no more than the reasons upon which it rests.”’” (Ibid.) “These rules apply to expert witness declarations submitted in connection with a motion for summary judgment.” (Id. at pp. 155-156.) “‘[U]nder Evidence Code section 801, the trial court acts as a gatekeeper to exclude speculative or irrelevant expert opinion.’” (Ibid.) “The trial court has broad discretion to determine whether proposed expert testimony lacks the necessary foundation to be reliable, relevant and admissible.” (People v. Fortin (2017) 12 Cal.App.5th 524, 531.)

3. The Exclusion of Pataalo’s Declaration

As already noted, plaintiffs’ sole evidence that the subject loan was transferred to Bank of America in 2007 (and thus could not have been acquired by Chase in 2008) was the declaration of Paatalo, their purported mortgage securitization expert. From his declaration, it appears Paatalo used the subject loan’s loan number to run a search in a software program called ABSNet, and the search results indicated that the subject loan had become part of an offshore trust known as the RESIF 2007-B Trust. According to Paatalo, “little information is available” about the RESIF 2007-B Trust, aside from a March 2007 strictly confidential “Offering Circular” that Paatalo retrieved from ABSNet. The Offering Circular purportedly identifies the various parties involved in the trust’s formation. Although not entirely clear, it appears Paatalo deduced from the Offering Circular that Bank of America (which reportedly pooled and securitized certain loans from a variety of sellers into the RESIF 2007-B Trust) bought the subject loan (among other assets) from WMAAC (one of the reported “sellers” of the mortgage loans pooled in the trust), and that WMAAC had acquired the subject loan from WaMu.

Importantly, the Offering Circular does not reference the subject loan, and Paatalo did not present any documentary evidence (e.g., assignments) of the alleged transfers of the subject loan from WaMu to WMAAC, or from WMAAC to Bank of America, or from Bank of America to the RESIF 2007-B Trust. Instead, his opinion appears to be based solely on assumptions made from (1) the ABSNet search results showing that the subject loan at some point became part of the RESIF 2007-B Trust and (2) the RESIF 2007-B Trust’s Offering Circular, which identifies the various banks and parties reportedly involved in the trust’s formation.

The trial court sustained defendants’ objections to the Paatalo declaration, finding that (1) Paatalo is not qualified to testify as an expert in the specific area of mortgage securitization, and (2) he failed to establish that his opinion is based on reliable matters. As set forth below, we find no abuse of discretion in this ruling.

a. Expert Qualifications

According to Paatalo’s declaration and the attached curriculum vitae, his qualifications are as follows: he worked as a police officer for seven years, as a mortgage loan officer for two years, and as a branch manager and then president of various mortgage brokerages or companies for nine years. He is now an Oregon licensed private investigator who investigates foreclosure fraud, chain of title, mortgage securitization, and defaults. In 2011, he took a 32-hour course through “CFLA,” which earned him a Certified Forensic Mortgage Loan Auditor certification, and he has spent over 10,000 hours investigating mortgage securitization and conducting chain of title analyses. He pays an annual $25,000 membership fee to conduct searches on ABSNet, which he describes as a private software program used by institutional investors in mortgage-backed securities. His declaration is silent as to what training, if any, he has received on using the ABSNet program and why he believes his search results are reliable or accurate.

The trial court ruled that Paatalo “failed to establish his appropriate qualifications to testify as an ‘expert forensic witness in the areas of securitization,’” and that “[t]here is no evidence showing Mr. Paatalo’s experience in investment banking and/or securitization of mortgages.” The court found Paatalo’s experience as a police officer and private investigator to be irrelevant to his qualifications as an expert in the area of mortgage securitization. The court further found that his work in the mortgage industry only reflects his knowledge of loan origination and perhaps title documents, but does not render him qualified in the specific area of mortgage securitization. As for the 32-hour course to obtain a Certified Forensic Mortgage Loan Auditor certification, his experience investigating mortgage securitization and chain of title analysis, and his payment of the $25,000 ABSNet membership fee, the court found these “insufficient to establish specialized knowledge, training, or experience in properly researching and analyzing mortgage securitization related issues.” (Italics added.) We find no abuse of discretion in these rulings. To be clear, we do not hold that Paatalo could never qualify as an expert in the area of mortgage securitization. We hold only that his declaration failed to establish that he is so qualified and that the court thus did not abuse its discretion in sustaining defendants’ objections to his declaration.

b. Reliability

The trial court also held that Paatalo failed to establish that his opinion is based on reliable matters. The court noted that there was no “evidence showing that the information resulting from searches conducted on ABSNet” is reliable. Paatalo’s declaration merely stated that ABSNet is a “globally recognized software program used by institutional investors in mortgage-backed securities,” that it requires an annual subscription fee of $25,000, and that it “is not a resource readily available to the general public.” His declaration did not explain who operates ABSNet, how it works, from what sources it pulls its data, how often that data is updated, whether the data therein is current, or how the program is maintained. As already noted, the declaration also did not explain what training, if any, Paatalo has received on using ABSNet. We therefore find no abuse of discretion in the court’s conclusion that plaintiffs failed to prove that ABSNet search results are reliable.

The trial court also held that plaintiffs failed to establish that the purported Offering Circular, which Paatalo reportedly “retrieved” from ABSNet, is reliable. Paatalo did not attempt to authenticate the document or attest to its accuracy, nor did he provide any information about what happened to the trust and its assets after the Offering Circular was purportedly issued on March 27, 2007. Indeed, he confirmed that “little information is available” about the RESIF 2007-B Trust, aside from the Offering Circular.

In short, Paatalo’s declaration failed to provide reliable factual support for his opinions that WaMu sold the subject loan to WMAAC, that WMAAC sold the loan to Bank of America, and that the Bank of America pooled and securitized the loan into the RESIF 2007-B Trust. Further, we reject plaintiffs’ contention on appeal that Paatalo’s declaration is admissible as lay opinion testimony regarding ownership of the subject property. None of the cases plaintiffs cite indicate that a person unaffiliated with the property at issue can provide lay opinion testimony as to chain of title in a wrongful foreclosure case, and it is, at best, counterintuitive. For the above reasons, we find the trial court did not abuse its discretion in excluding Paatalo’s declaration.

B. Summary Judgment for Defendants Was Proper

“‘“‘“We review the trial court’s decision [to grant summary judgment] de novo, considering all the evidence set forth in the moving and opposing papers except that to which objections were made and sustained.”’”’” (Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347; see Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, 813.)

A trial court properly grants a motion for summary judgment if there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) A defendant moving for summary judgment meets its initial burden of showing that a cause of action has no merit if it shows that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (§ 437c, subd. (p)(2).) If this burden is met, the party opposing the motion bears the burden of showing the existence of disputed facts. (§ 437c, subd. (p)(2).)

Plaintiffs did not carry their burden. The admissible evidence in the record indicates that defendants had a right to commence and execute the nonjudicial foreclosure: plaintiffs obtained the subject loan from WaMu in 2006, Chase acquired the subject loan in 2008 through the Agreement, Chase assigned the subject loan to Bank of America in 2011, and Bank of America in turn assigned the loan to WSF (the foreclosing entity) in 2015. Plaintiffs’ opposition, which hinged entirely on the inadmissible Paatalo declaration, presented no admissible evidence that any assignments necessary to the chain of title were void. There was thus no triable issue of material fact, and summary judgment for defendants was proper.

III

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

MOORE, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

THOMPSON, J.