Case Name: Rudy Martin v. P. John Mancuso, et al.
Case No.: 19CV346004

This matter is the latest in a series of lawsuits filed by Plaintiff Rudy Martin (“Plaintiff”) against various persons and entities arising out of disputes as to the ownership of real property located at 2963 Cormorant Road in Pebble Beach, California (“Cormorant Road Property”) and 3905 Williams Road, San Jose, California (Williams Road Property”).

The operative verified First Amended Complaint (“FAC”), first filed in Monterrey County in 2018 and transferred to Santa Clara County on March 22, 2019, states 16 causes of action against various defendants, usually identified only as “Defendants,” including Defendant JPMorgan Chase Bank, N.A. (“Chase”). These claims are: (1) Declaratory Relief (as to the 2963 Cormorant Road Property); (2) Declaratory Relief (as to the 3905 Williams Road Property); (3) Injunctive Relief (re the 2963 Cormorant Road property); (4) Injunctive Relief (re: the Williams Road Property); (5) Breach of Contract; (6) Breach of Fiduciary Duty); (7) Fraudulent Conveyance; (8) Fraudulent Inducement; (9) Promise Without Intent to Perform; (10) Embezzlement; (11) Breach of Implied Covenant; (12) Conversion; (13) Fraud and Intentional Deceit; (14) Quiet Title & Trespass (re: the Williams Road Property); (15) Quiet Title, Trespass & Slander of Title (re: the 2963 Cormorant Road and 2967 Cormorant Road properties), and; (16) Emotional Distress.

None of the individual causes of action in the FAC specifically identify which defendants they are asserted against. The FAC thus clearly fails to comply with Rule of Court 2.112 which states: “Each separately stated cause of action, count, or defense must specifically state: (1) Its number (e.g., ‘first cause of action’); (2) Its nature (e.g., ‘for fraud’); (3) The party asserting it if more than one party is represented on the pleading (e.g., ‘by plaintiff Jones’); and (4) The party or parties to whom it is directed (e.g., ‘against defendant Smith’).” The failure to comply with this rule may, depending on the circumstances, render a pleading confusing and subject to a special demurrer for uncertainty. (See Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, n.2.)

The FAC at ¶6 alleges that Defendant Chase is “as successor in interest of, and liable for” a mortgage on the Cormorant Road Property obtained in 2007 through Washington Mutual Bank (“WAMU”), which Chase later obtained portions of through a Purchase and Assumption Agreement (“P&A Agreement”) with the FDIC in 2008.

Currently before the Court is Defendant Chase’s demurrer to the entire FAC on the ground that it fails to state sufficient facts as alleged against it. Chase asserts that, among other reasons, all causes of action alleged against it fail because they are time-barred. (See Notice of Demurrer and Demurrer at p. 2:7-16.) Plaintiff’s opposition to the demurrer was late filed on July 29, 2019 (any timely opposition was due by July 24, 2019). The Court has exercised its discretion to consider Plaintiff’s opposition despite the late filing. The Court reminds Plaintiff that “when a litigant is appearing in propria persona, he is entitled to the same, but no greater, consideration than other litigants and attorneys. Further, the in propria persona litigant is held to the same restrictive rules of procedure as an attorney.” (Burnete v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1267, internal citations omitted).)

Requests for Judicial Notice
A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)

Both sides have submitted requests for judicial notice.

1) Defendant Chase’s Request
With its Demurrer, Defendant Chase has submitted a request for the Court to take judicial notice of five documents (exhibits A-D). Exhibit A is a copy of the recorded Deed of Trust (“DOT”) for the 2963 Cormorant Road property, dated September 17, 2007 and recorded on September 25, 2007 in Monterrey County. Exhibit B is a copy of Plaintiff’s Second Amended Complaint in case no. 15CV285753, a prior action Plaintiff filed in this Court against several defendants including Defendant Chase that was very similar to the present action. Exhibit C is a copy of a demurrer Chase filed in that action on December 30, 2016. Exhibit D is copy of a February 16, 2017 Order of this Court (Hon. Pierce) on the demurrer filed by Chase as well as a demurrer by another defendant in that action. Exhibit E is a copy of the P&A Agreement between the FDIC and Chase.

Chase’s request is GRANTED in part and DENIED in part as follows. Notice of exhibits A and E is GRANTED pursuant to Evidence Code §452(c) (official acts). Deeds of Trust recorded by a county recorder are judicially noticeable as official acts of the county recorder. (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-65 [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”], disapproved on other grounds in Yvanona v. New Century Mortg. Corp. (2016) 62 Cal.4th 919.) The P&A Agreement can be judicially noticed both because it is incorporated by reference into the FAC and because the Agreement was an official act of the FDIC. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743,753 [holding the PAA is a proper subject of judicial notice under Section 452(c), which provides the court may take judicial notice of official acts of the executive branch, as “the FDIC’s official act of transferring certain WaMu] assets (but not certain liabilities) to JPMorgan as of September 25, 2008—as evidenced by the P&A Agreement—is an official act subject to judicial notice.”])

Notice of exhibit C, the demurrer filed by Chase in case no. 15CV285753, is DENIED. This document could only be noticed under Evidence Code §452(d) (court records) as to its existence and filing date, neither of which are relevant to this demurrer. Notice of exhibits B and D, Plaintiff’s SAC in case no. 15CV285753 is GRANTED under Evidence Code §452(d). This Court’s February 16, 2017 order on Chase’s demurrer to the SAC in that case can be noticed as to its contents and legal effect. That order and the SAC from case no. 15CV285753 are particularly relevant to the material issues presented on this demurrer as those issues are largely identical to those decided on the demurrer in case no. 15CV285753.

In the February 16, 2017 Order, this Court noted that, as with the FAC in this case, the SAC in case no. 15CV285793 failed to identity which specific defendants any of the causes of action were alleged against. The Court further noted that “it appears as though the claims asserted against Chase are predicated on it helping Guang Yue Chen refinance the Cormorant Road Property in 2007, a process through which she allegedly was able to obtain title to the property without Plaintiff’s permission. (SAC, ¶ 14.) There are no allegations of any misconduct by Chase after refinancing the Cormorant Road Property. Thus, Chase’s alleged wrongful conduct occurred in 2007. . . . Assuming the four-year statute of limitations applies, Plaintiff’s claims against Chase are time-barred unless he pleads he is entitled to the benefit of the discovery rule. . . . In opposition, Plaintiff argues he only discovered the underlying wrongs in 2015. As Chase persuasively argues, Plaintiff cannot plead the discovery rule applies because he explicitly pleads that he discovered Guang Yue Chen had title to the Cormorant Road Property in 2010. (SAC, ¶¶ 22, 23, 27, 127.) Thus, at the very least, Plaintiff had reason to know in 2010 that the title of Cormorant Road Property was in Guang Yue Chen’s name and Chase’s alleged connection with her acquisition of title. Because Plaintiff pleads he only discovered the transfer of title in 2010, the SAC reflects the statute of limitations delayed running until this discovery. However, Plaintiff fails to plead he is entitled to the benefit of the discovery rule past 2010 because he could see and appreciate that a wrongdoing occurred with respect to the ownership of the Cormorant Road Property. . . . It does not appear Plaintiff can amend the SAC to include new allegations against Chase which would cure this defect since he expressly pleads he discovered the transfer of title in 2010.” (See Ex C to Chase’s RJN at pp. 7:17-8:21, internal citations omitted.)

2) Plaintiff’s Request
With his late filed Opposition Plaintiff submitted a request for judicial notice of four documents, attached as exhibits B, C, D and E to a declaration submitted by Plaintiff. Exhibit B is a copy of a June 17, 2015 Amended Memorandum Opinion by the U.S. District Court for the District of Columbia in Deutsche Bank National Trust Co. v. FDIC, et al., civil action no. 09-1656 (RMC). Exhibit C is a copy of the decision in Excel Willowbrook L.L.C. v. JP Morgan Chase Bank Nat Ass’n. (5th Cir. 2014) 758 F.3d 592. Exhibit D is a copy of the amended declaration of an attorney (David Zifkin) filed in support of a probate petition in the Orange County Superior Court on April 26, 2017 in case no. 30-2016-00892014-PR-TR-CXC. Exhibit E is purportedly a copy of document Plaintiff describes as “Supreme Court of the United States Cases Involving the FDIC’s Purchase and Assumption Agreement.” (See Plaintiff’s Declaration at ¶7.)

Notice is DENIED as to exhibits B, C and D as the documents are irrelevant to the material issues before the Court on Chase’s demurrer. In addition to not being relevant, the request for judicial notice of the contents of the Zifkin declaration and the attached exhibits (exhibit D) is denied as improper. (See Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1057 [court may take judicial notice of existence of declaration but not of facts asserted in it].)

Notice of Exhibit E is DENIED as no such document is attached to Plaintiff’s Declaration. Only a cover page labeled “Exhibit E” is attached.

Demurrer to the FAC
The Court in ruling on a demurrer treats it as “as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214.) Allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. (See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474 [rejecting allegation contradicted by judicially noticed facts]; See also Witkin, California Evidence (4th Ed., 2000) 1 Judicial Notice §3(3) [“It has long been established in California that allegations in a pleading contrary to judicially noticed facts will be ineffectual; i.e., judicial notice operates against the pleader.”])

The Court in ruling on a demurrer does not consider extrinsic evidence. Accordingly, other than the discussion of meet and confer communications, the Court has not considered the contents of the declarations submitted by Plaintiff or by Counsel for Defendant Chase. The Court finds Plaintiff’s argument that there was insufficient meet and confer efforts before the filing of this demurrer to be unpersuasive. The Court also notes that this is largely a moot point as, pursuant to CCP §430.41(a)(4) “[a]ny determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.”

Defendant Chase’s demurrer to all causes of action in the FAC to the extent they can be reasonably understood as being alleged against Defendant Chase, on the ground that they fail to state sufficient facts because they are time-barred under any possibly applicable statutes of limitation, is SUSTAINED.

Defendant Chase is correct that there is little material difference between the allegations against Chase in the verified FAC in this action and the allegations against Chase in the verified SAC in case no. 15CV285753, which the Court previously found established that all claims alleged against Chase in that action were time-barred because Plaintiff knew of alleged wrongdoing by Chase by no later than 2010.

As noted above the FAC at ¶6 alleges that Chase is liable as the successor-in-interest to WAMU based on the mortgage for the Cormorant Road property issued by WAMU in 2007. The FAC at ¶45 further alleges that “[o]n or about the beginning of 2007, Chase-WaMu proposed to Guang Yue Chen that Chase-WaMu could assist Guang Yue Chen to obtain financing and specifically that Chase-WaMU could organize the financing being done fraudulently in two coordinated steps . . . All the Defendants together orchestrated the 2963 Cormorant Road property being fraudulently conveyed and burdened with a Deed of Trust by Chase-WaMu and Defendants in 2007 . . .” Yet the FAC at ¶14 alleges that “[in] or about the middle of 2010 Jerry Martin requested Rudy Martin check up on the vesting of the title of the 3905 Williams Road business property to make sure that it was getting properly recorded in the name of Occipital Center, LLC. In the course of obtaining this information, Rudy Martin discovered the title of the 2963 Cormorant Road property was in the name of Guang Yue Chen. Upon hearing of this, Jerry Martin requested Guang Yue Chen provide a grant deed acknowledging that Guang Yue Chen and the Defendants were not the owner of the 2963 Cormorant Road [property] which Guang Yue Chen did sign in front of a notary and then directly hand[ed] to Rudy Martin who was present throughout the notarization.”

The FAC thus admits that Plaintiff had discovered that Chase may have been involved with Guang Yee Chen’s alleged wrongdoing by no later than the middle of 2010. At that point the limitations period began running on any claims Plaintiff had against Chase and the various limitations periods ran out well before this action was initially filed in Monterrey County in 2018. “Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. The limitations period begins once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry. A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642-643, internal citations omitted.)

The allegations later in the FAC that Plaintiff did not discover the basis for (unspecified) claims against “Defendants” including Chase until 2015 are (again) insufficient to invoke the delayed discovery rule. “In order to rely on the discovery rule for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’ In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to ‘show diligence’; ‘conclusory allegations will not withstand demurrer.’” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808, internal citations omitted, emphasis added.) Plaintiff could not have been unaware that specific fact pleading was required to rely on the discovery rule when the current action was first filed in Monterrey County as this Court’s February 16, 2017 Order on the demurrer in case no. 15CV28573 expressly referenced the rule and explained why Plaintiff’s allegations in that action were inadequate.

Plaintiff’s late filed opposition fails to offer any substantive response to Chase’s statute of limitations argument. Instead Plaintiff simply asserts that “Defendant” is “playing a shell game with the dates,” and “tries to tie the discovery of the title to the discovery of the deed of trust, but these were distinctly discovered at different times . . . Defendant . . . is misusing what is spelled out in the Complaint for what occurred when, what in 2007, what in 2010 and what occurred in 2017. The Complaint spells out what actions took place and then distinctly covers the later discovery of those actions which had taken place at an earlier time . . .” (Opp. at p. 6:15-7:1.)

As Plaintiff is bound by his verified allegations in the FAC as to when he discovered facts giving rise to a suspicion of wrongdoing by Chase leave to amend is DENIED as the defect cannot be cured without contradicting the verified allegations in the FAC made under penalty of perjury.

As the Court finds that finds that all of Plaintiff’s claims in the FAC are time-barred as alleged against Defendant Chase, it is not necessary for the Court to consider Chase’s argument that Plaintiff’s purported failure to exhaust administrative remedies under the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), 12 U.S.C. § 1811, et seq., deprives the Court of subject matter jurisdiction over this lawsuit or that Chase’s argument that Plaintiff otherwise lacks standing to bring any claim based on the 2007 mortgage and the DOT.