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Larkin v. Ocwen Loan Servicing, LLC CA4/2

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Larkin v. Ocwen Loan Servicing, LLC CA4/2
By
06/05/18

Filed 6/1/18 Larkin v. Ocwen Loan Servicing, LLC CA4/2


NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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



WILLIAM LARKIN,

Plaintiff and Respondent,

v.

OCWEN LOAN SERVICING, LLC,

Defendant and Appellant.


E067513

(Super.Ct.No. PSC1601473)

OPINION


APPEAL from the Superior Court of Riverside County. James T. Latting, Judge. Dismissed.
McGlinchey Stafford, Kevin S. Kim and Brian A. Paino for Defendant and Appellant.
No appearance for Plaintiff and Respondent.
Defendant and appellant Ocwen Loan Servicing, LLC, (Ocwen) filed this interlocutory appeal from an order granting plaintiff and respondent William Larkin’s request for a preliminary injunction, barring Ocwen from foreclosing on Larkin’s property while Larkin’s lawsuit was pending. By the time Ocwen filed its opening brief in this appeal, the trial court had already dissolved the preliminary injunction because Larkin failed to post an undertaking as a condition of obtaining the injunction, and the trial court had denied Larkin’s request for attorney fees under Civil Code section 2924.12, subdivision (h), having concluded the injunction never took effect and Larkin was not a prevailing party. Ocwen nonetheless requested that this court decide the merits of the order granting the preliminary injunction because Larkin might challenge on appeal the order denying his request for attorney fees or seek prevailing party status at a later stage in the litigation.
Since then, the trial court granted Ocwen’s motion for judgment on the pleadings to Larkin’s third amended complaint without leave to amend, and the trial court dismissed the lawsuit and entered judgment for Ocwen. We directed Ocwen to show cause why its appeal should not be dismissed as moot. In response, Ocwen invokes the exception to the mootness doctrine for material questions that remain to be decided by the court. Ocwen argues Larkin might appeal from the judgment and challenge the order denying his request for attorney fees, so this court should retain jurisdiction and decide the merits of the order granting the preliminary injunction.
Ocwen’s invocation of the exception to the mootness doctrine for material questions that remain to be decided is speculative at this time: if Larkin timely appeals from the judgment, he may challenge the order denying his request for attorney fees. And even if we were certain that Larkin would appeal and challenge the denial of his request for attorney fees, the implied premise to Ocwen’s argument—that the merits of the preliminary injunction may only be challenged in Ocwen’s appeal—is mistaken. If and when Larkin appeals from the judgment and seeks to overturn the order denying him attorney fees, Ocwen will be permitted at that time to challenge the validity of the underlying order granting the preliminary injunction.
We dismiss Ocwen’s appeal as moot.
I.
PROCEDURAL BACKGROUND
On March 29, 2016, Larkin filed his original complaint naming Bank of America, N.A., Ocwen, and various Doe defendants. The complaint alleged causes of action for fraud, promissory estoppel, wrongful foreclosure, violations of Civil Code sections 2923.6 and 2923.7, and unfair business practices in violation of Business and Professions Code section 17200, all arising from the default on the deed of trust on Larkin’s home. The next day, Larkin filed an ex parte application for a temporary restraining order (TRO) and requested that the trial court set a hearing on an order to show cause why a preliminary injunction should not issue enjoining defendants from conducting a trustee’s sale on Larkin’s property until his claims were adjudicated. The trial court granted the ex parte request and issued a TRO. Ocwen filed an opposition to Larkin’s request for a preliminary injunction, arguing, inter alia, that Larkin was not at risk of suffering irreparable harm because Ocwen had transferred servicing of Larkin’s mortgage to another entity, Ocwen had no interest in the property, and Ocwen no longer had any authority to conduct a trustee’s sale on Larkin’s property.
After receiving various briefs and declarations regarding Larkin’s request for a preliminary injunction, and after numerous continuances, on November 15, 2016, the trial court granted Larkin’s request. Balancing the parties’ interests, the trial court concluded Larkin was at risk of suffering irreparable injury if the foreclosure sale were to proceed, whereas defendants would only suffer a delay in the foreclosure proceedings if the preliminary injunction should issue. The court also concluded there was a reasonable probability Larkin would prevail on his claims. The court conditioned the issuance of the preliminary injunction on Larkin posting an undertaking in the amount of $25,000 within 10 days of the hearing date. Larkin did not post an undertaking within the time provided.
On December 23, 2016, Larkin filed a motion for attorney fees pursuant to Civil Code section 2924.12, requesting an award of $47,789 as the prevailing party on his request for a preliminary injunction. On January 3, 2017, Larkin filed a motion requesting the trial court modify the preliminary injunction by reducing the undertaking to a nominal amount.
On January 9, 2017, Ocwen timely filed a notice of appeal from the order granting the preliminary injunction.
On January 26, 2017, the trial court heard and denied Larkin’s request to modify the injunction. In its tentative ruling, which became the trial court’s order, the court noted that Larkin “did not file [his] motion until weeks after the time to file the undertaking expired.” Citing Code of Civil Procedure section 529, subdivision (a), the trial court dissolved the injunction. (See ABBA Rubber Co. v. Seaquist (1991) 235 Cal.App.3d 1, 10 [preliminary injunction is ineffective until undertaking is posted and must be dissolved if undertaking is not posted within the time provided by statute].) The following day, the trial court heard and denied Larkin’s request for attorney fees. The court’s written ruling stated, in relevant part, “As part of the Court’s granting of the preliminary injunction, Larkin was ordered to post a bond in the amount of $25,000 within 10 days of the hearing date, but failed to do so. Accordingly, the preliminary injunction never took effect and was rendered void as a matter of law. Therefore, Larkin cannot be a ‘prevailing party’ as he effectively did not obtain injunctive relief.”
In its opening brief filed in this appeal, Ocwen argues the trial court erred by granting Larkin’s request for a preliminary injunction. Ocwen acknowledges that the trial court subsequently dissolved the injunction and denied Larkin’s request for attorney fees. Nonetheless, Ocwen argues it still remains at risk of being ordered to pay attorney fees “in the event Larkin: (1) elects to appeal the trial court’s order denying his motion for attorney’s fees; or (2) seeks prevailing party status under California Civil Code [former] section 2924.12(i) at a later point in the underlying lawsuit.” Larkin failed to file a respondent’s brief.
The case proceeded in the trial court, and on December 11, 2017, Larkin filed a third amended complaint alleging one cause of action against Ocwen for promissory estoppel. On March 1, 2018, Ocwen filed a motion for judgment on the pleadings arguing, inter alia, that Larkin failed to state a claim for promissory estoppel because his reliance on certain promises allegedly made by Ocwen was neither reasonable nor foreseeable. On March 23, 2018, the trial court heard and granted Ocwen’s motion without leave to amend. The court agreed with Ocwen that Larkin’s reliance was neither reasonable nor foreseeable. On April 2, 2018, the trial court entered a final judgment dismissing Larkin’s lawsuit against Ocwen with prejudice, entering judgment for Ocwen and ordering that Larkin shall recover nothing from Ocwen, and ordering that Ocwen shall recover its costs of suit upon filing a memorandum of costs. Four days later, Ocwen filed and served a notice of entry of judgment.
II.
DISCUSSION
“Appellate courts generally will neither decide controversies that are moot nor render decisions on abstract propositions. (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541 . . . ; see Mercury Interactive Corp. v. Klein (2007) 158 Cal.App.4th 60, 78 . . . .) ‘A case is moot when the decision of the reviewing court “can have no practical impact or provide the parties effectual relief. [Citation.]” [Citation.] “When no effective relief can be granted, an appeal is moot and will be dismissed.” [Citation.]’ (MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 214 . . . .)” (Steiner v. Superior Court (2013) 220 Cal.App.4th 1479, 1485.)
Because the trial court has already dissolved the preliminary injunction, denied Larkin’s request for attorney fees, and entered judgment dismissing Larkin’s lawsuit with prejudice, we directed Ocwen to show cause why its appeal should not be dismissed as moot. In its response, Ocwen effectively concedes its appeal from the order granting the preliminary injunction has been rendered moot. A reversal of that order will have no immediate effect because the injunction was dissolved more than a year ago. Nevertheless, Ocwen continues to insist this court should address the merits of the order granting the preliminary injunction out of its concern that, unless that order is adjudged to have been in error, Larkin may one day be awarded attorney fees as the prevailing party on his request for the injunction. We are not persuaded.
As this court has recognized, there are exceptions to the requirement that a court must dismiss a moot appeal. “[T]here are three discretionary exceptions to the rules regarding mootness: (1) when the case presents an issue of broad public interest that is likely to recur [citation]; (2) when there may be a recurrence of the controversy between the parties [citation]; and (3) when a material question remains for the court’s determination [citation].” (Cucamongans United for Reasonable Expansion v. City of Rancho Cucamonga (2000) 82 Cal.App.4th 473, 479-480.) A court should apply the third exception if dismissal of the present appeal on mootness grounds will prevent a party from litigating an issue in a future proceeding. (See Viejo Bancorp, Inc. v. Wood (1989) 217 Cal.App.3d 200, 205.)
Ocwen invokes the exception for material questions that remain to be decided. According to Ocwen, Larkin was unable to immediately appeal the order denying his attorney fees, but now that a final judgment has been entered, Larkin may “appeal the denial of his motion for attorneys’ fees” and “Ocwen may be subject to an attorneys’ fee award against it based on an injunction it contends was erroneously issued by the trial court.”
True, the order denying Larkin’s motion for attorney fees under Civil Code section 2924.12, subdivision (h), was not appealable. (Sese v. Wells Fargo Bank N.A. (2016) 2 Cal.App.5th 710, 714-717.) Also true, now that a final judgment has been entered, Larkin may appeal from the judgment and in that appeal challenge the interim order denying his motion for attorney fees. (Code Civ. Proc., § 906; Garcia v. Mercedes-Benz USA, LLC (2018) 21 Cal.App.5th 1259, 1264, as modified 2018 Cal.App.Lexis 397.) But Ocwen appears to be under the impression that the merits of the order granting the preliminary injunction will not be subject to review in such an appeal. Not so.
“An intermediate ruling that necessarily affects a final judgment is properly within the scope of our review of the judgment without the need for the party challenging that intermediate ruling to file its own cross-appeal. (See Code Civ. Proc., § 906.) The purpose of this statutory exception to the general rule requiring an aggrieved party to file its own appeal is to allow a respondent to assert a legal theory that would result in affirming a judgment even though the trial court did not rely on that theory. [Citation.]” (Hong Sang Market, Inc. v. Peng (2018) 20 Cal.App.5th 474, 487.) In other words, if Larkin does timely appeal from the final judgment, and if Larkin challenges the order denying his motion for attorney fees, at that time Ocwen will have the opportunity to challenge the legality of the underlying order granting the preliminary injunction. By waiting until an appeal from the final judgment to address the merits of the preliminary injunction, this court will have before it a fuller record on appeal and briefing from both parties.


III.
DISPOSITION
The appeal is dismissed as moot. The dismissal is without prejudice to Ocwen challenging the legality of the interim order granting a preliminary injunction should Larkin timely appeal from the final judgment. (Code Civ. Proc., § 913.)
No costs are awarded. (Cal. Rules of Court, rule 8.278(a)(5).)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS

McKINSTER
Acting P. J.
We concur:



CODRINGTON
J.



FIELDS
J.




Description Defendant and appellant Ocwen Loan Servicing, LLC, (Ocwen) filed this interlocutory appeal from an order granting plaintiff and respondent William Larkin’s request for a preliminary injunction, barring Ocwen from foreclosing on Larkin’s property while Larkin’s lawsuit was pending. By the time Ocwen filed its opening brief in this appeal, the trial court had already dissolved the preliminary injunction because Larkin failed to post an undertaking as a condition of obtaining the injunction, and the trial court had denied Larkin’s request for attorney fees under Civil Code section 2924.12, subdivision (h), having concluded the injunction never took effect and Larkin was not a prevailing party. Ocwen nonetheless requested that this court decide the merits of the order granting the preliminary injunction because Larkin might challenge on appeal the order denying his request for attorney fees or seek prevailing party status at a later stage in the litigation.
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