TENTATIVE RULINGS

CourtCall is available for all Law & Motion appearances, EXCEPT parties in small claims cases and motions for claims of exemption which are mandatory appearances. Please contact CourtCall directly at (888) 882-6878.

The following tentative rulings will become the ruling of the Court unless a party desires to be heard. If you desire to appear and present oral argument as to any motion, YOU MUST notify the Judicial Assistant by telephone at (707) 521-6725, and all other opposing parties of your intent to appear by 4:00 p.m. today, Tuesday, May 15, 2012. Parties in small claims cases and motions for claims of exemption are exempt from this requirement.

1. SCV-246299, Arin v. Tapley
DROPPED from calendar as dismissal was filed 5/15/12.

2. SCV-248103, Hogan v. Klobas
DROPPED from calendar as matter settled as to moving party at 5/1/12 settlement conference.

3. SCV-248639, Divodi v. Wal-Mart Stores
DROPPED from calendar as first amended cross-complaint filed 4/30/12.

4. SCV-248781, Chiurco v. Switala
Defendant Jessica Switala moves to reopen discovery pursuant to CCP § 2024.050. Although counsel for Defendant included a declaration in support, no facts were included which would justify the order sought. The points and authorities submitted in support of the motion indicate that Defendant seeks to reopen discovery in order to designate an additional defendant and to obtain additional fact discovery “as facts develop” in the consolidated action. The motion is denied.

Even if the motion is properly made pursuant to CCP § 2024.050, there is nothing other than hearsay statement made by counsel in the points and authorities to support the motion. Even as to this, there are no facts stated; only a few conclusory statements were made which addressed the factors subject to the court's consideration. The court notes that Plaintiff's action was filed on December 10, 2010. As of April 14, 2011, the parties agreed that the case would be ready for trial within 12 months of the date that the complaint was filed. At that time, the matter was assigned to trial on July 13, 2012. Thereafter, this moving party filed a motion to continue the trial and, essentially, a motion to extend the discovery cutoff. The trial date was vacated by the court, the case was consolidated with another arising from the same incident, but the discovery cut off was not extended. This occurred on February 8, 2012. There has been ample opportunity for Defendant to disclose any additional experts, but she has failed to do so. This motion presents no new facts or circumstances which would justify modification of the court's previous order.

Based on the foregoing, Defendant’s motion is denied.

5. SCV-249375, Bernal v. Wells Fargo Bank
Defendant NDEX West, LLC demurs to the First Amended Verified Complaint.

NDEX asserts that the first and second causes of action each fail to state facts sufficient to constitute a cause of action, and are uncertain. NDEX argues that there is no private right of action to challenge its standing to foreclose since the process is non-judicial; it did not violate Civil Code § 2923.5; Plaintiff failed to allege tender; the recorded notice of default shows that it followed the proper procedures; and that the fraud allegations do not involve the demurring party.

NDEX contends that Plaintiff has no private right of action for a preemptive lawsuit to stop non-judicial foreclosure because it “upsets [the] legislative balance” set forth in the statutes for allowing non-judicial foreclosure without court involvement. This argument is conclusory and unsupported as a matter of law. There is ample authority indicating that parties may seek court relief, including an injunction, to stop non-judicial foreclosures before they take place. See, for example, Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 217-221. In Mabry, the court specifically and expressly held that borrowers have a private right of action to stop and prevent a foreclosure based on, inter alia, violation of Civil Code § 2923.5, one of the very statutes upon which Plaintiff relies and which is a primary basis for the first cause of action. As the court there stated, to find otherwise would render the statute “a dead letter” and that “the absence of an express private right of action is not necessarily preclusive of such a right. There are times when a private right of action may be implied by a statute. [Citation].”

NDEX relies on Gomes v. Countrywide Home Loans (2001) 192 Cal.App.4th 1149, at 115, for the proposition that a borrower may not bring a preemptive lawsuit to stop non-judicial foreclosure based on an unsupported allegation that the beneficiary did not authorize the trustee to foreclose. However, that case is distinguishable because it deals with a specific context, alleged circumstances, and law that are different from those here. In Gomes, the plaintiff had merely made an unsupported allegation based on information and belief that the lender or owner of the note had not authorized MERS, the foreclosing trustee, to foreclose. As the court put it, the plaintiff simply wanted to determine “whether” MERS had authority from the note holder, and did not show that MERS lacked authority. Here, as noted, Plaintiff is alleging that Defendants failed to comply with the statutes governing non-judicial foreclosures and has also defrauded him into entering into the agreement, with the result that he should not be bound by its terms or should otherwise have some appropriate relief, as yet undetermined. Fonenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, reached a result somewhat similar to that in Gomes, but there are key differences. First of all, with regard to the demurrer they are involved, the court noted that judicially noticeable recorded documents demonstrated the authority to foreclose by revealing that defendants were in fact the trustee, and had authority as nominee of the lender. Second, the court explained that “[g]iven the presumption of regularity, if plaintiff contended the sale was invalid because HSBC had no authority to conduct the sale, the burden rested with plaintiff affirmatively to plead facts demonstrating the impropriety” and the trustee does not have the burden of showing that it has the authority to foreclose. The court did not rule that a borrower may not bring a preemptive action on this basis and instead merely held that the borrower has the burden of proving lack of authority, so has the burden of alleging facts showing lack of authority, if the borrower is to prevail on such an action.

It is well established in California that assigning a mortgage without assigning the underlying debt confers no right. See, for example, Kelley v. Upshaw (1952) 39 Cal.2d 179, 192, where the Supreme Court noted that, when faced with a purported assignment of a mortgage, “assignment of the mortgage without an assignment of the debt which is secured was a legal nullity.” This is because “a deed of trust in a mere incident of the debt it secures and that an assignment of the debt ‘carries with it the security.’ [Citations omitted]” The result is that a party lacking ownership of the note and its attendant right to foreclose may not foreclose, and courts have repeatedly held as much.

In Herrera v. Deutsche Bank Nat. Trust Co. (2011) 196 Cal.App.4th 1366, a bank and other entity, which claimed that they were, respectively, the beneficiary and trustee of a deed of trust, moved for summary judgment against a homeowner’s action challenging their rights to foreclose on this basis. The court ruled that the defendants could not simply submit copies of recorded instruments purportedly showing assignment of the relevant rights in order to establish that they in fact were the beneficiary and trustee, ruling that the documents may be judicially noticeable but the information contained within them is hearsay. A recorded instrument stating that X owns an interest and transfers that interest to Y, for example, cannot be used to show that X actually has that interest.

Although Herrera involved a lawsuit to set aside a foreclosure sale that had already occurred, that distinction, contrary to Gomes and NDEX, seems irrelevant. To rule that a borrower, who clearly may challenge a foreclosure sale on this basis after it is done, has no basis for stopping what may be an invalid and groundless foreclosure sale before it occurs, makes absolutely no sense, either in terms of justice and fairness or in terms of practicality and judicial economy. The court determines that “preemptive” actions to stop foreclosure sales that have not occurred are invalid when they are based solely on facially speculative, wholly unsubstantiated claims. Any “preemptive” actions to stop foreclosure that are based on other claims, such as fraud, failure to comply with statutory requirements, or actual, positive allegations that there is no authority to foreclose, especially if substantiated with documentary or other factual evidence, are valid. The demurrer is overruled on this basis.

Plaintiff alleges violation of Civil Code §§ 2923.5 and 2924. Civil Code § 2924 governs the power of sale and notice of default on “mortgages.” It requires, before exercising a power of sale, that the party with the power first record a notice of default that must include certain listed elements, and that the party must wait at least three months after filing the notice of default. It lists other required information and recitals. Plaintiff’s cause of action is based on alleged violation of the requirement of “personal” contact set forth in section 2923.5. NDEX argues that the notice of default includes the proper requirements but this is irrelevant here. The notice of default declaration may be sufficient for demonstrating that it complied with the form requirements for the notice of default, but it is not itself evidence that NDEX actually did what the declaration states and the court cannot base a finding on it. NDEX also argues that if there is a defect with the portion of the procedure, since another entity filled out the declaration, Plaintiff’s remedy is against that entity, not NDEX. Even if this assertion is true, it ignores the fact that Plaintiff’s most fundamental requested remedy is simply to stop the foreclosure, not simply obtain damages. Regardless of who may have failed to comply with this procedure, Plaintiff has a right to try to stop the foreclosure proceedings and this necessarily applies to NDEX, the entity trying to foreclose.

NDEX also argues that Plaintiff has failed to allege tender. This is irrelevant here since Plaintiff bases these claims on, inter alia, failure to comply with the law, fraud, and lack of ownership of the note. Whether Plaintiff has offered to pay off the debt is thus irrelevant to these claims.

Based on the foregoing, the court overrules the demurrers to the first cause of action.

NDEX argues that the second cause of action fails because Plaintiff is not entitled to monetary damages, the first amended complaint fails to allege violation of any underlying law, and the alleged fraud does not involve NDEX. Plaintiff does allege violation of law, and thus possible unfair business practices, since, with respect to NDEX, he alleges violation at least of Civil Code § 2923.5. NDEX contends that another entity violated this but, as noted above, this is not apparent, at least as a matter of law, from the face of the complaint. NDEX also argues that the necessary declaration was provided but, also as noted above, this is not dispositive of this issue. The court overrules the demurrers to the second cause of action.

Defendant shall file an answer to the first amended complaint within 20 days of notice of entry of this order. Defendant shall prepare a written order within 5 days.

6. SCV-249872, Maldonado v. Morgan Stanley Mortgage
Defendants Central Mortgage Company, Morgan Stanley Mortgage Capital Holdings, LLC and Mortgage Electronic Registration Systems, Inc.’s motion for summary judgment or summary adjudication is granted in part and denied in part. Summary adjudication is granted as to issue 7 since the moving parties met their burden of demonstrating that Plaintiff cannot show that there was a disclosure or use of his confidential private information. It is denied as to all other issues.

The moving parties fail to meet their burden of showing ownership of the note or debt and providing any admissible evidence establishing either such ownership or status as beneficiary under the deed of trust. The court notes that what is important is not possession or production of the original note, but “ownership” of that debt. The moving parties also fail to show that fraud was not committed, that they were not involved in that fraud, that Plaintiff suffered no damage, or that the statute of limitation bars the allegations of fraud. Summary judgment is denied.

Cal-Bay’s demurrer is sustained, without leave to amend, as to the seventh cause of action for failure to state a cause of action. The demurrer is overruled as to all other causes of action.

Cal-Bay seeks judicial notice, which is granted.

Defendant Cal-Bay Mortgage Group shall file a responsive pleading within 20 days of notice of entry of this order.

Plaintiff shall prepare a written order within 5 days.

7. SCV-250447, Jacobsen v, City of Santa Rosa
The court takes judicial notice, as requested by Respondent, of Exhibit “A”; the court denies judicial notice of Exhibit “B” which is unsigned.

Respondent City of Santa Rosa demurs to the causes of action of the amended petition. Respondent argues, and the court agrees, that the developers appear to be necessary and indispensable parties. The court further agrees with Petitioners as to the difficulty that the court would have in fashioning a judgment that would “provide any relief to Petitioners without severely impacting the financial interests of the Developers.” It appears that any claims contemplated by the Petitioners are time-barred. The only exception would be if the relation back doctrine here applied.

It appears that the developers are necessary and indispensable parties. Petitioners themselves allege that they agreed with the City to bear the burden of costs for the improvements, but then entered into a new agreement whereby property owners seeking to improve the owner's property must pay for the development, to be collected by the City. If the court finds that the agreement and the fees imposed under the agreement are illegal or otherwise invalid, the developers would be prejudiced as they would lose their reimbursement.

No rational arguments are espoused by Petitioners which would render the addition of the developer parties timely absent application of the relation back doctrine. As to that, it appears that Petitioners were expressly aware of the identity and potential involvement of the developers. There is no explanation for the delay that is plausible, and the delay is unreasonable. The issues involving the developers are based upon the same facts as pled by Petitioners.

The demurs are sustained with leave to amend.

The demurrer to the amended petition for writ of mandate is overruled. Although it appears that Petitioners will likely be unable to amend the pleading to add the developers, which appear to be necessary and indispensable parties, the court will grant leave to amend in order to permit Petitioners one further opportunity to add these parties with allegations pertaining to the failure to previously add them.

Petitioners shall file an amended petition within 20 days of notice of entry of this order. Respondent shall prepare a written order within 5 days.

8. SCV-250912, Bonnelli v. Bank of America
Continued to 7/11/12 per stipulation and order filed 5/3/12.

9. SCV-250940, Howard v. City of Petaluma
The petition for relief from provisions of Gov. Code § 945.4 is granted. Petitioner has demonstrated that the failure to present the claim to the appropriate governmental entity was as a result of mistake, surprise, or excusable neglect. The court notes that the letter offered by Respondent was written by a different member of Petitioner’s firm, approximately eight years ago.