Aghchay v. U.S. Bank Nat. Assn.
Filed 5/23/13 Aghchay v. U.S. Bank Nat. Assn. CA2/3
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
SECOND
APPELLATE DISTRICT
DIVISION
THREE
REBA AGHCHAY,
Plaintiff and Appellant,
v.
U.S. BANK NATIONAL ASSOCIATION,
et al.,
Defendants and Respondents.
B238430
(Los Angeles County
Super. Ct.
No. LC093456)
APPEAL
from a judgment of the Superior Court
of
County, Richard A. Adler, Judge. Affirmed.
Ajalat
& Ajalat, Lawrence A. Ajalat;
Law Office of Joseph Trenk and Joseph Trenk for Plaintiff and Appellant.
AlvaradoSmith,
S. Christopher Yoo, Yunnie Youn Ahn and Thomas Van for Defendants and
Respondents.
_______________________________________
Plaintiff and
appellant Reba Aghchay (plaintiff) appeals from a judgment in favor of
defendants and respondents U.S. Bank N.A., successor in interest to the Federal
Deposit Insurance Corporation as receiver for PFF Bank and Trust, JPMorgan
Chase Bank, N.A. and California Reconveyance Company (defendants), following
the trial court’s sustaining of defendants’ demurrer to the original complaint
without leave to amend. Plaintiff
contends the trial court erred in concluding that her complaint was barred by
amend. We disagree and affirm.
FACTUAL
BACKGROUND
In 2004, plaintiff
borrowed $1,120,000.00 from Washington Mutual Bank, FA and executed a deed of
trust (Deed of Trust) on the property located at 3784 Deervale
Drive, Sherman Oaks, California
(Property) securing payment of the loan.
Washington Mutual Bank, FA was the lender and beneficiary of the Deed of
Trust, and California Reconveyance Company was the trustee. In December 2008, a Notice of Default and Election
to Sell Under Deed of Trust was recorded stating that plaintiff owed $65,810.79
in “past due payments plus permitted costs and expenses.†A trustee’s sale in connection with the deed
of trust was held on August 25,
2009 at which JPMorgan Chase Bank, N.A. purchased the
Property. In October 2009, an Assignment
of Deed of Trust was recorded assigning all beneficial interest in the Deed of
Trust to U.S. Bank N.A.
On April 29, 2010, plaintiff filed
an action against U.S. Bank N.A., JPMorgan Chase Bank, N.A., and U.S. Bancorp
based on the foreclosure of the Property (2010 Lawsuit). The complaint alleged that the defendants
agreed to a short sale of the Property (a sale for less than the balance due on
the note) but then refused to complete the short sale and cancel the
foreclosure sale as promised. Plaintiff
alleged causes of action for fraud, breach of implied contract, cancellation of
written instrument, and quiet title. On April 5, 2011, the court sustained the
defendants’ demurrer to the Third Amended Complaint without leave to
amend. Judgment dismissing the complaint
was entered on April 5, 2011,
and plaintiff filed a notice of appeal on April 22, 2011. The
appeal was dismissed on June 13, 2011
due to plaintiff’s failure to procure the record.
On
April 26, 2011, plaintiff
filed the complaint in the underlying action (2011 Lawsuit). The complaint alleged causes of action for
“lack of standing,†violation of Business and Professions Code § 17200 and
Penal Code § 115.5, and intentional infliction of emotional distress. The lack of standing claim alleged that
“Defendants . . . do not have the right to foreclose on the
[Property] because Defendants . . . have failed to perfect
any security interest in the [Property].â€
The claim for statutory violations alleged that defendants had
“fraudulently and knowingly procured or offered false or fraudulently prepared
documents to fabricate the missing gaps in the chain of
title . . . and allowed these documents to be filed,
registered, or recorded in California in violation of California Penal Code
§ 115.5.†The final claim alleged
that defendants’ wrongful foreclosure of the Property caused plaintiff
emotional distress.
Defendants
filed a demurrer arguing the action was barred by res judicata, plaintiff
had not alleged tender, and each claim failed to state facts sufficient to
constitute a cause of action. Plaintiff
did not file an opposition. At the
hearing, the court stated that the primary right involved in both actions was
the same, and asked how plaintiff would amend to cure the defects in the
complaint. Plaintiff’s counsel
acknowledged that the “[f]undamental facts are the same†in both actions, and
that “the transaction is essentially the same . . . it’s
the same foreclosure, same property.â€
However, plaintiff’s counsel also argued that the two actions were
“different†because the first case addressed the failed short sale that “led to
the foreclosure†while the second case involved “the trustees’ standing to
conduct [the] foreclosure.â€
The
court sustained the demurrer in its entirety without leave to amend on the
grounds that the action was barred by the doctrine of res judicata, plaintiff
had not made a valid tender offer, and each claim failed to state facts
sufficient to constitute a cause of action.
Plaintiff filed a motion for reconsideration which the court denied on
the grounds that it was not based upon new or different facts, circumstances or
law. An order dismissing the complaint
was entered on November 10, 2011. Plaintiff filed a timely appeal.
1. Standard
of Review
On appeal from a dismissal following
the sustaining of a demurrer, we review the complaint de novo to determine
whether it alleges facts stating a cause of action under any legal theory. (Linear
Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115,
122.) “ ‘ “We treat the
demurrer as admitting all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law.
[Citation.]†’ â€
[¶] “When a demurrer is sustained
without leave to amend, the reviewing court must determine whether there is a
reasonable probability that the complaint could have been amended to cure the
defect; if so, it will conclude that the trial court abused its discretion by
denying the plaintiff leave to amend.
[Citation.] The plaintiff bears
the burden of establishing that it could have amended the complaint to cure the
defect. [Citation.]†(Sprinkles
v. Associated Indemnity Corp. (2010) 188 Cal.App.4th 69, 75‑76.)
2. Res
Judicata
Plaintiff contends that her
action was not barred by the doctrine of res judicata because the two lawsuits
were based on different facts. “ ‘Res
judicata’ describes the preclusive effect of a final judgment on the
merits. Res judicata, or claim
preclusion, prevents relitigation of the same cause of action in a second suit
between the same parties or parties in privity with them.†(Mycogen
Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.) “Res judicata applies when (1) the
claim raised in the prior adjudication is identical to the claim presented in
the later action; (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 adjudication. [Citation.]â€
(In re Anthony H. (2005) 129
Cal.App.4th 495, 503.)
For
purposes of res judicata, the term “cause of action†refers neither to the
legal theory asserted by a plaintiff nor to the remedy the plaintiff
seeks. (Mycogen Corp. v. Monsanto Co., supra,
28 Cal.4th at p. 904.) Instead, “California
has consistently applied the ‘primary rights’ theory, under which the invasion
of one primary right gives rise to a single cause of action.†(Slater
v. Blackwood (1975) 15 Cal.3d 791, 795‑796 [noting that “the phrase
‘cause of action’ is ‘often used indiscriminately to mean what it says and to
mean counts which state differently
the same cause of action. . . . ’ â€]) “As far as its content is concerned, the
primary right is simply the plaintiff’s right to be free from the particular
injury suffered. [Citation.]†(Crowley
v. Katleman (1994) 8 Cal.4th 666, 681.)
Plaintiff
does not dispute that she brought the 2010 Lawsuit or that the
2010 Lawsuit resulted in a final judgment on the merits. Plaintiff only argues that the claims raised
in the 2010 Lawsuit were different than the claims alleged in the present
action. Plaintiff argues that different
primary rights were at issue in the first and second actions because the
lawsuits were based on “different facts:†“the 2010 lawsuit was based upon the
agency relationship between US Bank and JPMorgan such that JPMorgan had the
power and authority to negotiate a loan modification and/or short sale on
behalf of Plaintiff. This 2011 lawsuit
is based upon the lack of standing the Trustee had under the Deed of Trust to conduct
the foreclosure sale.†In making this
argument, plaintiff mischaracterizes the primary right based upon the
legal theories alleged, not the “right to be free from the particular injury
suffered.†(Crowley v. Katleman, supra, 8 Cal.4th at p. 681.)
The
primary right at issue in the first action and second action was the same. The first action was based on the defendants’
alleged wrongful foreclosure of the Property despite their promise to proceed
with a short sale. The second action was
based on defendants’ alleged wrongful foreclosure of the Property despite their
“fail[ure] to perfect any security interest in the [Property].†The primary right involved in both
proceedings was plaintiff’s “right to be free from†the wrongful foreclosure of
her Property. (Crowley v. Katleman, supra, 8 Cal.4th at p. 681.)
3. New
Facts
Plaintiff
also contends that res judicata does not apply because the 2011 Lawsuit was
based on new facts. “Res judicata serves
as a bar to all causes of action that were litigated or that could have been
litigated in the first action.
[Citations.] . . . [¶] But where it cannot be said that plaintiff
knew or should have known of the claim when the first action was filed, res
judicata should not bar the second action.
[Citation.]†(
Construction, Inc. (2005) 127 Cal.App.4th 150, 155-156.) Plaintiff claims that after she filed the
2010 Lawsuit she heard reports in the media stating that lenders were using
improper foreclosure procedures such as robo-signing. She thereafter obtained an analysis of the
foreclosure of her Property and the resulting report “formed the basis of the
allegations in the 2011 Lawsuit.â€
Plaintiff’s
counsel, however, did not make this argument in opposition to the defendants’
demurrer. Therefore, she forfeited the
argument on appeal. (
Performance Plastering, Inc. (2006) 136 Cal.App.4th 212, 226.) Plaintiff argues that she did make this
argument in her motion for reconsideration.
However, those facts did not constitute “new or different facts†within
the meaning of Code of Civil Procedure section 1008 because they were
apparently known to plaintiff when she opposed the demurrer. (New
York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206,
213.) As the trial court stated: “Plaintiff’s assertion of ‘new facts’ points
to the wrong time period. On a motion
for reconsideration, Plaintiff is required to articulate facts which were
unknown to her at the time of the hearing on the motion as to which she seeks
reconsideration.†Plaintiff does not
argue here that she was unaware of the “new facts†at the time of the hearing
on the demurrer, but only argues that these facts came to her attention after
the 2010 Lawsuit was filed.
Plaintiff
contends that she “did not, and couldn’t have known she needed to, include any
allegations in the 2011 Lawsuit regarding newly acquired
information . . . . â€
However, plaintiff may have been entitled to amend her complaint to
allege these facts had she argued in opposition to the demurrer that her claims
in the 2011 Lawsuit were based on newly discovered information. Plaintiff did not file an opposition and her
counsel did not argue at the hearing that her claims were based on new
facts. Accordingly, plaintiff has
forfeited this argument on appeal.
Moreover, even assuming the argument was not forfeited, the trial court
found that plaintiff’s claims failed on alternate grounds and, as explained
below, plaintiff has not shown how she could amend to cure the defects in the
complaint.
4. Leave
to Amend
The
trial court also sustained defendants’ demurrer on the grounds that plaintiff
had not made a valid tender offer or alleged sufficient facts to state each
cause of action. Plaintiff does not
dispute that she was required to make a valid tender offer in order to set
aside the foreclosure sale or that she failed to do so. Nor does plaintiff dispute that her complaint
failed to allege sufficient facts to state a claim. Plaintiff only argues that she could have
cured the defects in her complaint had she been granted leave to amend.
Plaintiff
has not shown that she could successfully amend the complaint. When a demurrer is sustained
without leave to amend, a plaintiff may show in the first instance on appeal
how the complaint can be amended to state a cause of action. (Careau
& Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d
1371, 1386.) The burden is on the
plaintiff to show “ ‘in what manner he can amend his complaint and how
that amendment will change the legal effect of his pleading. [Citation.]’ †(Goodman
v. Kennedy (1976) 18 Cal.3d 335, 349.)
Here, plaintiff makes the general argument that “any deficiencies that
exist in the allegations of each of the [] causes of action can be cured if
Plaintiff is given the opportunity.†In
addition, plaintiff states that she would amend the complaint to allege that
“Respondent†did not comply with the Deed of Trust’s provision that “Lender, at
its option, may from time to time appoint a successor trustee to any Trustee to
[sic] appointed hereunder by an instrument executed and acknowledged by Lender
and recorded . . . . â€
Plaintiff contends that, in violation of this provision, “[n]o
assignment was executed, acknowledged or recorded at the time the foreclosure
sale took place.†Plaintiff appears to be arguing that California Reconveyance
Company (CRC) was not authorized to initiate the foreclosure proceeding. This theory was alleged in the complaint and
the court addressed it, stating correctly that “[t]he DOT here clearly
authorizes CRC to act as the trustee for lender and beneficiary Washington
Mutual . . . . â€
Plaintiff
does not otherwise show in what manner she would amend the complaint or how
that amendment would change the legal effect of her pleading. On these grounds, plaintiff has not met her
burden of showing how she could amend to cure the defects in the complaint. As plaintiff has failed to make other
arguments regarding the court’s alternate bases for its ruling, she has therefore
waived any other challenge to these grounds.
(Gunn v. Mariners Church,
Inc. (2008) 167 Cal.App.4th 206, 217-218.)
The
judgment is affirmed. Defendants shall
recover their costs on appeal.
TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY,
J.
WE CONCUR:
KLEIN,
P. J.
KITCHING,
J.
Notice of Related Actions was filed in the department where the 2010 Lawsuit
was assigned, and the court found that the two actions were not related. Plaintiff argues that the court therefore
determined that the two actions were based on different facts. We disagree.
The relating of cases is a case management tool used to promote judicial
efficiency and prevent plaintiffs from “judge‑shopping.†(Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter
Group 2012) ¶ 12:38 at
12(I)-B.) The court’s decision to relate
a case or not does not affect the court’s rulings on the merits of the action.
