Aug 30, 2014

Tentative Rulings
Law and Motion Calendar
Wednesday, August 27, 2014, at 3:30 p.m.
Courtroom 18 -- Hon. Nancy Case Shaffer
3055 Cleveland Avenue, Santa Rosa, CA

 
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) 521-6729, and all other opposing parties of your intent to appear by 4:00 p.m. today, Tuesday, August 26, 2014.  Parties in small claims cases and motions for claims of exemption are exempt from this requirement.

 

 


1. MCV-229846; Collectronics v. Bice

Plaintiff's Motion to Appoint Receiver to sell the defendant’s liquor license is granted.

Plaintiff is to submit a written order after hearing consistent with this ruling.

 

2. MCV-230218; Collectronics v. Mahrouzadeh

Plaintiff's Motion to Appoint Receiver to sell the defendant’s liquor license is granted. 

Plaintiff is to submit a written order after hearing consistent with this ruling.

 

3. MCV-230253; Collectronics v. Shariff

Plaintiff's Motion to Appoint Receiver to sell the defendant’s liquor license is granted. 

Plaintiff is to submit a written order after hearing consistent with this ruling.

 

4. SCV-253973; Brandon v. Roe

Appearances required.

5. SCV-254223; Castle v. Wells Fargo

On April 23, 2014 the Plaintiffs filed a First Amended Complaint alleging ten separate causes of action: (1) Negligence; (2) Fraud; (3) Cancellation of Voidable Contract; (4) Void or Cancel Deed of Trust; (5) Wrongful Foreclosure; (6) Breach of Contract; (7) Breach of the Implied Covenant of Good Faith and Fair Dealing; (8) Violation of BP § 17200; (9) Quiet Title; and (10) Slander of Title (FAC). The voluminous FAC alleges that the Defendants foreclosed on the Plaintiffs’ property at 444 Redrock Way, Petaluma, CA (the Property) without standing and in violation of numerous statutes.

Defendants Selene Finance LP and US Bank National Assoc. as Trustee for the SRMOF REO 2011-1 Trust (the Defendants) have filed a demurrer to the FAC, and each of the causes of action.

The Defendants’ request for judicial notice is granted. (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265; and EC § 451(d).)

For the reasons set forth below, the Defendants’ demurrers to the FAC, and each of the causes of action are sustained for failure to state facts to support any cause of action, without leave to amend.  Further, the Plaintiffs’ claims are barred by the doctrines of res judicata and collateral estoppel.  The Plaintiffs sought a motion to strike the instant demurrer within their opposition; that motion is denied.

Res Judicata/Collateral Estoppel

Defendants contend that the entire FAC is barred under the doctrines of res judicata and/or collateral estoppel as the Plaintiffs asserted these same claims in a cross-complaint in  Selene Finance L.P. et al. v. James Castro and James Castle, Sonoma County Sup. Ct. No. SCV 248729 (Selene I).  The defendants in this action filed the cross-complaint in Selene I.  Their cross-complaint was dismissed with prejudice.

Defendants contend that Plaintiffs’ claims are barred by the doctrines of res judicata and/or collateral estoppel based on the dismissal with prejudice of their cross-complaint in Selene I.  Plaintiffs contend that no valid judgment was ever entered in Selene I.  Further, Plaintiffs contend that the parties are not identical in this case and Selene I; arguing that the Trust defendant is different, and that Defendant Selene Finance was the plaintiff in Selene I and is the defendant in the instant lawsuit.

Res judicata and collateral estoppel apply when “(1) a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.” Brinton v. Banker’s Pension Services, Inc. (1999) 76 Cal. App.4th 550, 556.)   Res judicata applies only between the same parties or where there is “substantial identity” of the parties.  ( CCP §§ 1908, 1910; French v. Rishell (1953) 40 Cal.2d 477, 481.)  

Because of the closeness of the standards, the law on compulsory cross-complaints is instructive.  Compulsory cross-complaints involve issues that must be raised; a failure to do so will bar the defendant from asserting the claims in a later lawsuit.  (CCP § 426.30; AL Holding Co. v. O’Brien & Hicks, Inc. (1999) 75 Cal.App.4th 1310, 1313-1314.)  A compulsory cross-complaint is one filed by a defendant against plaintiff, and which “arises out of the same transaction or series of transactions or occurrences as the cause of action in the complaint.” ( CCP §§ 426.10, 426.50. )  A cause of action arises out of the same transactions or occurrences if the factual or  legal issues are “logically related.”  (Currie Medical Specialties, Inc. v. Bowen (1982) 136 Cal.App.3d 774, 777.)  They need not be absolutely identical. (Id.) 

Here, there is no doubt that Plaintiffs’ present lawsuit is subject to the bars of both res judicata and collateral estoppel.  Plaintiffs are attempting to revive the same causes of action related to the foreclosure of the same house.  The parties are identical (or in privity) and Plaintiffs’ claims were fully and finally decided on the Defendants’ general demurrer in Selene I.

Negligence

Plaintiffs contend that the Defendants failed to fully credit their account, prepared and filed false documents, and illegally foreclosed on the Property.

It is well-settled that a lender owes no duty to a borrower.  (See Nymark v. Heart Sav. & Loan Assn’n (1991) 231 Cal.App.3d 1089, 1095-96.)  This same rule applies to loan servicers.  (Castaneda v. Saxon Mortg. Services, Inc. (E.D.Cal.,2009) 687 F.Supp.2d 1191, 1198.)  Here, there the Defendants did not deviate from their traditional roles as lender and secured creditor.  As a result the Plaintiffs cannot properly allege a negligence cause of action.

Accordingly, the Defendants’ demurrer to the First Cause of Action is sustained without leave to amend.

Fraud

Fraud must be pled specifically; general and conclusory allegations do not suffice. Thus the policy of liberal construction of the pleadings ... will not ordinarily be invoked. This particularity requirement necessitates pleading facts which “show how, when, where, to whom, and by what means the representations were tendered.” Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; accord, Murphy v. BDO Seidman, LLP (2003) 113 Cal.App.4th 687, 692. The objectives of the particularity requirement are to give the defendant notice of “definite charges which can be intelligently met," and to permit the court to determine whether,  “on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-217; accord, Gil v. Bank of America, N.A. (2006) 138 Cal.App.4th 1371, 1381.)

The allegations in the FAC do not satisfy the heightened pleadings standards required to support a fraud cause of action. The allegations in the FAC consist of conclusory statements, and generalized allegations of wrongdoing. This is not enough to allege fraud.

Accordingly, the demurrer to the Second Cause of Action is sustained without leave to amend.

Cancel Assignment/Contract

Plaintiffs argue the transfer of their  promissory note and deed of trust and the subsequent securitization of the note and DOT were improper.  Even if Plaintiffs are correct, “the relevant parties to such a transaction were the holders (transferors) of the promissory note and the third party acquirers (transferees) of the note…. As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [plaintiffs] lack[] standing to enforce any agreements, including the investment trust's pooling and servicing agreement, relating to such transactions.” (Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 510-516.)  “Instead, the true victim may be an individual or entity that believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of its interest in the note. It is also possible to imagine one or many invalid transfers of the promissory note may cause a string of civil lawsuits between transferors and transferees.” (Ibid.) But plaintiff “may not assume the theoretical claims of hypothetical transferors and transferees” to assert causes of action for declaratory relief or wrongful foreclosure. ( Ibid.) “Because a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor. As to the Plaintiffs, an assignment merely substituted one creditor for another, without changing their obligations under the note.” (Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507.) An impropriety in the transfer of a promissory note would therefore affect only the parties to the transaction, not the borrower. The borrower thus lacks standing to enforce any agreements relating to such transactions. (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 515.)

Here, the Plaintiffs are alleging that the assignment of the DOT was illegal; however, as discussed in Jenkins, the Plaintiffs do not have standing to make such a claim or, consequently, to set aside such assignment.

Accordingly, the demurrer to this cause of action is sustained without leave to amend.

Wrongful Foreclosure

Plaintiffs allege that Defendants never lent them money, and therefore the subsequent foreclosure was illegal.  The Plaintiffs also attack the securitization of the note and DOT.

To state a cause of action for Wrongful Foreclosure, the Plaintiff must allege that: (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering. (See Lona v. Citibank NA (2011) 202 Cal.App4th 89, 104.) A “valid tender of performance must be of the full debt, in good faith, unconditional, and with the ability to perform.” (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1053; Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112.)

Here, Plaintiffs have not alleged a viable unconditional tender.  Accordingly, the demurrer to the wrongful foreclosure cause of action is sustained without leave to amend.

Breach of Contract/Covenant of Good Faith and Fair Dealing

“A cause of action for breach of contract requires proof of the following elements: (1) existence of the contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach.” (CDF Firefighters v. Maldonado (2008) 158 Cal.App.4th 1226, 1239.)

The elements of a cause of action for breach of the implied covenant of good faith and fair dealing are: (1) existence of contractual relationship; (2) implied duty; (3) breach; and (4) causation of damages. ( Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49.) A breach of the implied covenant may result in a breach of the contract, although a breach of a consensual (i.e., an express or implied-in-fact) contract term will not necessarily constitute a breach of the covenant. ( Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1393–1395; see Carma Developers (Cal.) Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 373 [To prove a breach of the implied covenant, it is not necessary that plaintiff show that a specific contractual provision was breached; “[w]ere it otherwise, the covenant would have no practical meaning, for any breach thereof would necessarily involve breach of some other term of the contract”].)

Here, Plaintiffs affirmatively allege that no contract existed between the parties. (FAC ¶ 77.)  Since it has been alleged that no contractual relationship existed and a contractual relationship is the first element of these claims, the Plaintiffs cannot allege a breach of contract, or a breach of the implied contractual covenant of good faith and fair dealing.

Accordingly, the demurrers to these causes of action are sustained without leave to amend. 

Unjust Enrichment

It is well settled that unjust enrichment is a remedy not a cause of action. (See Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793.)

Accordingly, the demurrer to this cause of action is sustained without leave to amend.

Quiet Title

To state a cause of action for quiet title, a plaintiff must plead: (1) a legal description of the property that is the subject of the action; (2) the title of the plaintiff and the basis upon which such title is asserted; (3) the adverse claims to the title of the plaintiff against which a determination is sought; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the plaintiff against the adverse claims. (Code Civ. Proc., § 761.020.)

Aside from adequately pleading the statutory elements, “[i]t is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649; see also Horton v. Cal. Credit Corp. Ret. Plan (S.D.Cal.2011) 835 F.Supp.2d 879, 893 [“even if [Code Civ. Proc., § 761.020] requirements are met, California courts have pronounced that in order to maintain a cause of action to quiet title, the mortgagor must allege tender or ability to tender the amounts admittedly borrowed”].) “This rule is based upon the equitable principle that he who seeks equity must do equity ... a court of equity will not aid a person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 386, 390.)

Here, Plaintiffs have not alleged that they have paid off the remainder of their debt, and they have made no offer to tender the remainder of their debt. Therefore, appellants cannot maintain a quiet title action. (See Shimpones, supra, 219 Cal. at p. 649[“[A] mortgager cannot quiet his title against the mortgagee without paying the debt secured”]; see also Lane v. Vitek Real Estate Industries Group (E.D.Cal.2010) 713 F.Supp.2d 1092, 1103 [“As plaintiffs concede they have not paid the debt secured by the mortgage, they cannot sustain a quiet title action against defendants”].)

Accordingly, the demurrer to this cause of action is sustained without leave to amend.

Slander of Title

Slander of title “occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property and causes pecuniary loss. [Citation.]”  (Truck Ins. Exchange v. Bennett (1997) 53 Cal.App.4th 75, 84; see also Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040.  The false statement must be “maliciously made with the intent to defame.” ( Howard v. Schaniel (1980) 113 Cal.App.3d 256, 263.  “Pecuniary loss” is an essential element of a slander of title cause of action. (See Manhattan Loft, LLC v. Mercury Liquors, Inc., supra, 173 Cal.App.4th at 1057.) The most fundamental element of a slander of title claim is  a “false statement.”  The recorded documents simply document the trustee’s sale—which indisputably occurred.  Moreover,  under CC § 2924, “the statutorily required mailing, publication, and delivery of notices in nonjudicial foreclosure, and the performance of statutory nonjudicial foreclosure procedures, [are] privileged communications under the qualified common-interest privilege.” (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 333; CC § 47.)  It follows that the Plaintiffs’ claim for slander of title is subject to demurrer. (Kachlon v. Markowitz, supra, 168 Cal.App.4th at 333.)

Here, the acts complained of were either not false or were privileged.  Accordingly, the demurrer to the slander of title cause of action is sustained without leave to amend.

Violation of BP § 17200

Plaintiffs incorporate the wrongdoing alleged throughout the FAC within this cause of action.  A violation of BP § 17200 is a derivative claim which will either survive or fail with the substantive claims. Here, none of the Plaintiffs substantive claims have survived, and therefore the claim under BP § 17200 fails as well.

Accordingly the demurrer to this cause of action is sustained without leave to amend.

The Defendants are to draft an order consistent with this ruling.

6. SCV-255034; Gellman v. Entler

Motion to Compel Arbitration:

Plaintiff Gary Gellman (“Plaintiff”) moves to compel arbitration pursuant to CCP §§ 1281 and 1281.2 on the ground that the September 17, 2013, California Residential Purchase Agreement and Joint Escrow Instructions provides for arbitration of the dispute.

Defendant has not established that Plaintiff waived his right to arbitration merely by filing this lawsuit. Participating in litigation of an arbitrable claim does not itself waive a party's right later to seek arbitration. (Saint Agnes Med. Ctr. v. PacifiCare of Calif. (2003) 31 Cal. 4th 1187, 1203.)  At some stage, litigation of the issues in dispute may justify a finding of waiver. While there is no single test for establishing waiver, the relevant factors include: “whether the party's actions are inconsistent with the right to arbitrate”; “whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate”; “whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay;” “whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings;”  “whether important intervening steps (e.g., taking advantage of judicial discovery procedures not available in arbitration) had taken place”; and “whether the delay affected, misled, or prejudiced the opposing party.” (Saint Agnes Med. Ctr. v. PacifiCare of Calif., supra, 31 Cal. 4th at 1196.) Here, Plaintiff notified defendants even prior to filing the action that he wanted to arbitrate this case.  (See Petition, ¶¶ 3-10.) The evidence does not support finding Plaintiff has waived the right to arbitrate.

When one of the parties to an arbitration agreement is involved in litigation with a third party arising out of the same transaction, CCP § 1281.2(c) allows a court to refuse to enforce the arbitration provision or stay arbitration pending the outcome of the related litigation.  Here, Defendant Entler, who is a party to the arbitration agreement, is also a party to a pending court action with the Broker Defendants arising out of the same transaction or series of related transactions.  However, the allegations and causes of action alleged in the cross-complaints do not raise a concern of conflicting rulings on a common issue of law or fact.  Accordingly, the motion is granted.  Plaintiff Gary Gellman’s complaint against defendant Richard Entler is hereby ordered to be arbitrated pursuant to the arbitration clause in the subject Purchase Agreement.

Plaintiff is to draft a written order consistent with this ruling.

Demurrer and Motion to Strike

As defendants Century 21 and Laura Fennell have been dismissed from plaintiff’s complaint, these motions are moot.

7. SCV-255627; In Re Katrina Marie Rapp

Stratcap Investments, Inc, has petitioned for approval of the transfer of structured settlement payments.

In order for the court to grant the petition, the court must find: The transfer is fair and reasonable and in the best interest of the payee, taking into account the welfare and support of the payee's dependents; the payee has been advised in writing by the transferee to seek independent professional advice regarding the transfer and has either received that advice or knowingly waived, in writing, the opportunity to receive the advice; the transferee has complied with the notification requirements pursuant to Ins. Code section 10139.5(f)(2), the transferee has provided the payee with a disclosure form that complies with Section 10136, and the transfer agreement complies with Sections 10136 and 10138;  the transfer does not contravene any applicable statute or the order of any court or other government authority; the payee understands the terms of the transfer agreement, including the terms set forth in the disclosure statement required by Section 10136; the payee understands and does not wish to exercise the payee's right to cancel the transfer agreement; and, the transfer complies with the requirements of Article 2.3 (Ins. Code § 10134 et seq.). (Ins. Code § 10137; 10139.5(a).)

Based upon the documents filed with the court in support of this petition, the court cannot affirmatively find all of the above. Section 10136(c) requires the aggregate amount transferred, the amount payable to payee, and the discounted present value, “This is the value of your structured settlement in current dollars” to be in the form prescribed by section 10136(b). The subject transfer agreement does not comply with section 10136(c).

Additionally, the petition is does not establish that Ms. Rapp was domiciled in California at the time she signed the transfer agreement (Ins. Code § 10135); there is no proof of service showing the letter provided in Exhibit F was actually mailed (Ins. Code § 10139.5(f)(2)(L)); and, the petition does not contain a statement regarding the amounts and sources of the payee’s monthly income and financial resources (Ins. Code § 10139.5(c)).

Accordingly, the petition is denied without prejudice.

8. SCV-255676; Adams v. Baker

Both sides in this dispute have filed motions for a preliminary injunction. Plaintiff Stephen Adams requests an order prohibiting defendants from interfering with plaintiff’s use and access to a well and water system which supplies water to his property. Defendants request an order prohibiting plaintiff from consuming more than 10% of the water available from the water system.

Both sides have established irreparable injury as each side provides evidence establishing that the other’s actions limits each side’s ability to water their crops and supply water to their residences. Therefore, the outcome of these motions depends upon the interpretation of the Agreement for Water System Use (“the Agreement”); i.e., a determination of which side is likely to prevail on the merits.

Plaintiff argues that because a water measuring device has been installed, pursuant to section 1(d) of the Agreement, the parties only need to measure plaintiff’s water usage on December 31. Plaintiff argues that the Agreement does not allow defendants to measure his daily water use and unilaterally shut off water to his property.

Defendants argue that the installed measuring device does not change the intent of the contract that defendant is not to use more than 10% of the water at any time. They insist that there is no other way to enforce the contract other than to monitor defendant’s daily use and limit that use to no more than 10% of the water in the system by turning off the water to plaintiff’s property.

The Agreement clearly states that plaintiff is entitled to take 10% of the water that flows through the Water System and may take “such percentage but no greater percentage thereof.” This limit is intended to be enforced “[a]t all times and at any one time…” (Motion, Ex. A, pg. 2, ¶ 1.) Subdivision (d) of subsection (1) does not override the intent of the contract which only allows plaintiff to use 10% of the water in the system at any one time. The amount plaintiff has access to depends upon the amount of water in the system at the time of use.

Additionally, the parties argue over whether the Agreement allows defendant to turn off the system if plaintiff’s use exceeds 10% of the water in the system. Subdivision 4 of the Agreement gives defendant Westside Winery the “sole right” and “responsibility” to, among other things, “operate” the Water System “as it shall see fit in its sole and unfettered discretion.” A general definition of “operate” means to “use and control.” As such, the Agreement appears to provide defendant Westside Winery the right to control the system to turn it off as it sees fit when plaintiff has used more than his 10% allotment.

Plaintiff’s argument that a larger pump may solve the problem is irrelevant to the interpretation of the Agreement and the parties’ rights thereunder.

In sum, plaintiff has not met his burden to establish that he is likely to prevail on his claim and defendants have established they are likely to prevail on the merits of their claim. Therefore, plaintiff’s motion for a preliminary injunction is denied and defendants’ motion is granted.  Plaintiff is hereby ordered to limit his use of the water in the Water System to 10% at any one time.  Defendants may turn off the Water System delivering water to plaintiff’s property if plaintiff’s usage exceeds 10% in any given 24 hour period.

The court denies defendants’ request to keep plaintiff off the property “for the purpose of taking water in excess of 10% of the water available” as this would create an unworkable situation wherein defendants must determine plaintiff’s intent and the Agreement specifically grants plaintiff an easement of “access” to the “facilities, pipelines and equipment that are components of the Water System in order to allow for use, maintenance and repair…” (Motion, Ex. A, ¶ 2.)

Appearances are required regarding the amount of the bond Defendants must post.

Defendants are to submit a written order consistent with this ruling.

9. SPR-86588; In re the Conservatorship of Contessa “Tess” Robertson 

Motion for Appointment of Guardian Ad Litem

This motion is continued to the probate calendar on September 24, 2014.

Motion for Sanctions

Respondent’s motion, by and through her Attorney-In-Fact, for sanctions pursuant to CCP § 128.7 is denied. The motion fails to establish that the subject petition violates CCP § 128.7       

 

 

 

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