Spinosi v. Quality
Loan Service Corp.
Filed 1/31/14
Spinosi v. Quality Loan Service Corp. CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.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
THREE
JOEL SPINOSI et al.,
Plaintiffs and Appellants,
v.
QUALITY LOAN SERVICE CORPORATION et al.,
Defendants and Respondents.
G047664
(Super. Ct. No. 30-2012-00586502)
O P I N I O N
Appeal
from an order of the Superior Court of
Orange County, William M. Monroe, Judge.
Affirmed.
Law
Office of Lenore Albert and Lenore L. Albert for Plaintiffs and Appellants.
Severson
& Werson, Jan T. Chilton, Eric J. Troutman, Andrew A. Wood and Kerry W.
Franich for Defendants and Respondents.
* * *
Plaintiffs
Joel and Rose Spinosi appeal from the court’s November 15, 2012 order denying their application for a
foreclosure sale of their home.
name="_ftnref1" title="">[1] The trial court concluded plaintiffs were
unlikely to prevail on the merits. We
agree. Accordingly, we affirm the order.
FACTS
In
April 2007, Joel borrowed $930,000 from SCME Mortgage Bankers, Inc. (SCME), secured
by a deed of trust executed by both plaintiffs on their home in Coto De Caza. In a February 2, 2010 letter, defendant Aurora Loan Services, LLC (Aurora) advised Joel
that it had tried unsuccessfully to contact him at least three times and asked him
to contact Aurora about the then-owing arrearage of over $11,900 on the loan and to
discuss with Aurora bringing the loan current before foreclosure became necessary.
In
March 2010, Joel signed a Special Forbearance/
which required him to make six monthly payments between March and August of
2010. The
alia: “The aggregate Plan payment will
be insufficient to pay the Arrearage. At
the Expiration Date, a portion of the Arrearage will still be outstanding. Because payment of the Plan payments will not
cure the Arrearage, Customer’s account will remain delinquent. Upon the Expiration Date, Customer must
full reinstatement, payment in full, loan modification
agreement or other loan workout option that Lender may offer (individually
and collectively, a ‘Cure Method.’)
Customer’s failure to enter into a Cure Method will result in the loan
being disqualified from any future Lender Loss Mitigation program with respect
to the loan evidenced by the Note, and regular collection activity will
continue, including . . . commencement or resumption of the
foreclosure process . . . .†The Forbearance Agreement expired on August 15, 2010.
On September 20, 2010, Aurora advised Joel in writing that he was $11,826 in default and could
cure the default by paying that sum by October 20, 2010.
June 2010, Joel had submitted incomplete documentation to Aurora seeking a
loan modification. In October 2010, Joel
submitted additional documents. In
November 2010, Aurora advised Joel that plaintiffs’ monthly housing-to-income ratio was
too high and they did not qualify for a modification. In February 2011, defendants recorded a
notice of default and election to sell under the deed of trust. In April 2011 Joel submitted a new
application for a loan modification. In
May of 2011 Joel submitted additional documents.
In
June 2011, plaintiffs filed their first lawsuit against defendants.
In July
2011, Aurora offered plaintiffs a
modification because their loan balance was too high to qualify for the federal
Home Affordable Modification Program.
Plaintiffs did not accept the offer.
In January
2012, Judge William M. Monroe sustained defendants’ demurrer to plaintiffs’ complaint
— without leave to amend as to five causes of action and with leave to amend as
to four causes of action. Judge Monroe
also denied without prejudice plaintiffs’ application for a preliminary
injunction, ruling that plaintiffs had failed to establish a probability of
success on any cause of action which would effectively stop any foreclosure. Plaintiffs voluntarily dismissed their
complaint.
The
trustee’s sale was scheduled for July 30, 2012.
On July 26, 2012, plaintiffs filed a second lawsuit against defendants. Plaintiffs simultaneously filed an ex parte
application for a temporary restraining order and an order to show cause to
preliminarily enjoin the trustee’s sale.
Plaintiffs asserted, inter alia, (1) they had reached an agreement with
their loan servicer that they could cure the default by paying $16,786; (2)
they wire transferred $16,786 to their servicer as instructed; and (3) the
servicer failed to rescind the default even though it was cured. Plaintiffs supported their application with
their counsel’s declaration that an assignment of the deed of trust had been
notarized by a robo- or surrogate signer.
Judge
Jamoa A. Moberly granted plaintiffs a temporary restraining order and scheduled
an order to show cause hearing for a preliminary injunction. Defendants peremptorily challenged Judge
Moberly. The case was reassigned to
Judge David T. McEachen.
Defendants
filed an opposition to plaintiffs’ injunction application, supported by the declaration
of Aurora’s vice-president, who declared, inter alia, there are “no records
in the payment history reflecting any payment by Spinosi in the sum of
$16,786.27.†The declaration also set
forth the history of Aurora’s transactions and communications with plaintiffs based on her
review of Aurora’s “servicing records, payment records and loan origination
file.â€
On September 12, 2012, plaintiffs filed a first amended complaint captioned as a class
action, thereby superseding the operative complaint on which the temporary
restraining order had issued. On September 25, 2012, Judge McEachen transferred the case to Judge Monroe. Judge McEachen stated that California Rules
of Court, rule 3.300 (concerning related cases) is meant to prevent judge
shopping, although Judge McEachen stated, “I’m not saying that that was
[plaintiffs’] intent.â€
The
hearing on plaintiffs’ application for a preliminary injunction finally was
held on November
15, 2012.
Defendants’ demurrer to the first amended complaint was also heard on
that date. Plaintiffs and their counsel did
not appear nor did they contact the court or defense counsel. Judge Monroe observed that plaintiffs’
allegation they tendered $16,786 “to wipe out the entire arrears appears to
have been a total fabrication, included for the sole purpose of securing†a
temporary restraining order.
name="_ftnref3" title="">[3] In a lengthy ruling, Judge Monroe (1) found
that plaintiffs had engaged in illegal judge shopping and had hidden the
illegal judge shopping by failing to file a notice of related cases and failing
to advise Judge Moberly the new case was largely identical to plaintiffs’ prior
lawsuit; (2) sustained defendants’ demurrer to the first amended complaint,
with leave to amend two causes of action; (3) denied plaintiffs’ preliminary
injunction motion and dissolved the temporary restraining order; and (4) scheduled
an order to show cause requiring plaintiffs’ counsel to personally appear concerning
monetary sanctions for illegal judge shopping and misleading a judge with false
statements “regarding the alleged $16,786.27 payoff and plaintiffs’ bankruptcy
filing/stay.â€
DISCUSSION
Discretion by Denying Plaintiffs’ Injunction Application
Our
review of the court’s order is limited to considering “whether the trial court
abused its discretion in ‘“evaluat[ing] two interrelated factors when deciding
whether or not to issue a preliminary injunction. The first is the likelihood that the
plaintiff will prevail on the merits at trial.
The second is the interim harm that the plaintiff is likely to sustain
if the injunction were denied as compared to the harm the defendant is likely
to suffer if the preliminary injunction were issued.â€â€™â€ (People
ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1109.) “‘Generally, the ruling on an application for
a preliminary injunction rests in the sound discretion of the trial court.’†(Hunt
v. Superior Court (1999) 21 Cal.4th 984, 999.) “We do not interfere absent a clear showing
the trial court’s discretion has been abused.â€
(Husain v. McDonald’s Corp.
(2012) 205 Cal.App.4th 860, 867.)
“‘Discretion
is abused when a court exceeds the bounds of reason or contravenes
v. McDonald’s Corp., supra, 205
Cal.App.4th at p. 867.) “‘
reweigh it . . . .’â€
(Ibid.) “‘“[T]he trial court is the judge of the
credibility of the affidavits filed in support of the application for
preliminary injunction and it is that court’s province to resolve conflicts.â€â€™ [Citation.]
Thus, even when presented by declaration, ‘if the evidence on the
application is in conflict, we must interpret the facts in the light most
favorable to the prevailing party and indulge in all reasonable inferences in
support of the trial court’s order.’†(
Cal.App.4th 1443, 1450.)
Plaintiffs
bear the burden to “make a clear showing of an abuse of discretion.†(IT
Corp. v. Country of Imperial (1983) 35 Cal.3d 63, 69.) They have failed to do so, having provided us
with inadequate record references, legal argument, and citation to authority. (McComber
v. Wells (1999) 72 Cal.App.4th 512, 522.) As noted in footnote 2, most of plaintiffs’ record
references are to documents which were not before Judge Monroe at the time he
denied their injunction application. (
(1982) 30 Cal.3d 800, 813 [when reviewing correctness of trial court’s
judgment, appellate court considers “only matters which were part of the record
at the time the judgment was enteredâ€].)
Plaintiffs’ brief relies largely on federal case law and standards, and
also raises theories of liability, such as negligence and Civil Code section
2924.12, which were not captioned causes of action alleged in their complaint
or first amended complaint (nor have plaintiffs cited their complaint and/or
first amended complaint as encompassing those theories).
Even if
we consider on the merits plaintiffs’ contentions in their injunction
application, we find no error. A moving
party must support an injunction application with a verified complaint and/or
affidavits. (Code Civ. Proc.,
§ 527, subd. (a).) The record contains
no verified pleading, but does include plaintiffs’ counsel’s declaration
(Albert’s declaration) supporting their injunction application.
Plaintiffs’
injunction application alleged they had wire transferred $16,786 to their loan
servicer to cure the loan default pursuant to an agreement with the servicer,
but the servicer failed to rescind the default.
But there is no evidence of such a payment in Albert’s declaration or the
supporting exhibits. Indeed, Judge
Monroe found untrue the plaintiffs’ allegation they made a $16,786 payment.
A
second contention in plaintiffs’ injunction application was that plaintiffs’
payments under the Forbearance Agreement cured the loan default by mutual
agreement of the parties. There is no
evidence of this in Albert’s declaration or its supporting exhibits. Moreover, the Forbearance Agreement specified
that payments thereunder would not
cure the arrearage and that the loan account would remain delinquent after the
Forbearance Agreement expired.
Finally, plaintiffs’ injunction application
argued that SCME’s assignment of the deed of trust to Aurora was invalid
because it was allegedly robo-signed in the names of Jan Walsh and notary Irene
Guerrero. Plaintiffs contended they were
harmed by the allegedly invalid assignment because it allowed Aurora fraudulently
to foreclose on their home. Plaintiffs
alleged Walsh was an employee of defendants Aurora and Quality Loan Service
Corporation. But the deed of trust
assignment (attached as an exhibit to Albert’s declaration) is executed by
Walsh, as vice president of SCME. There is no evidence concerning Walsh in Albert’s
declaration or its supporting exhibits.
Although
Albert’s declaration does not mention Walsh, it does discuss Guerrero, who notarized
Walsh’s signature on the assignment. Albert’s
declaration states she had Guerrero’s signature analyzed by an expert forensic
document examiner on two prior occasions “wherein it is conclusive†that Guerrero’s
signature on the Nebraska acknowledgment of the assignment was robo- or surrogate-signed. In support, Albert attached as an exhibit the
report of a forensic document examiner opining that certain handwriting
features in three questioned signatures of Guerrero indicated that someone else
probably prepared the signatures; however, the examiner stated his opinion was “due
to the limited amount of comparable exemplars submitted for IRENE GUERRERO.â€
Also
attached as an exhibit to Albert’s declaration was a press release of the
Nevada Attorney General announcing an indictment of two title officers, Gary
Trafford and Gerri Sheppard, for a robo-signing scheme in Clark County, Nevada between
2005 and 2008. Albert’s declaration
refers to the indictment of “Gary Trafford of QLS,†apparently asserting
Trafford was an employee of defendant Quality Loan Service Corporation. This is the only hint we have as to the
identity of Trafford and his alleged relevance to this case.
Albert also purported to attach copies of
Civil Code sections 2924 and 2923.5 (for the proposition that “everything the
plaintiffs are complaining about such as servicer forced defaults, dual
tracking and robo-signing will now be expressly illegal on January 1, 2013â€). The record reflects however, that Albert did
statutes. Furthermore, the court’s November 15, 2012 order observed that robo-signing was not yet illegal in California.
The
court further found that plaintiffs failed to show they suffered any harm from robo-signing
if it did occur, since plaintiffs “readily admit that they have made no
payments on their house since mid-2010, with no plans to make up the deficiency,
and as such have no right to keep the home.†As defendants point out, the “assignment
merely substituted one creditor for another without altering [plaintiffs’]
rights or obligations under their loan agreement.†Moreover, defects in notarization of an assignment
of a deed of trust do not affect its validity as between the parties to it. (Herrera
v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1510 [“Nothing
in the comprehensive statutory scheme governing nonjudicial foreclosures ([Civ.
Code,] §§ 2924 through 2924l )
contains a requirement that [an] assignment of [a deed of trust] must be
acknowledged and recorded before [a] foreclosure saleâ€].)
It was
within the trial court’s province to judge the credibility and relevance of Albert’s
declaration and the supporting exhibits and to weigh them accordingly.
v. Schlage Lock Co., supra, 101
Cal.App.4th at p. 1450.) The court did
not abuse its discretion by finding plaintiffs were unlikely to prevail on the
merits.
DISPOSITION
The
court’s order is affirmed. Defendants
shall recover their costs on appeal.
IKOLA,
J.
WE CONCUR:
MOORE, ACTING P. J.
ARONSON, J.
also purport to appeal from the court’s $1,500 sanctions order imposed on their
attorney. But the sanctions order is not
appealable at this time. (Code Civ.
Proc., § 904.1, subd. (b) [sanctions order of $5,000 or less is appealable
only after final judgment or by petition for extraordinary writ].)
Code of Civil Procedure section 527, subdivision (a), a trial court may
grant a preliminary injunction based on sufficient grounds shown in either a
verifying either the complaint or first amended complaint. We therefore take no facts supporting
plaintiffs’ injunction application from the allegations of those
documents. Furthermore, most of the
record references in plaintiffs’ opening brief (they did not file a reply
brief) are to documents which were not before Judge Monroe on November 12, 2012, when he ruled on plaintiffs’ injunction application.
We grant defendants’
request that we take judicial notice of certain documents related to Joel’s
bankruptcy case.
We deny plaintiffs’
request for judicial notice of the Federal National Mortgage Association’s
(Fannie Mae) Announcement 09-05R since it is irrelevant to the court’s ruling
on their preliminary injunction application.
The record reflects they did not qualify for the Home Affordable
Modification Program. (See
[U.S. Dept. of the Treasury implemented the Home Affordable Modification
Program to “help homeowners avoid foreclosure during the housing market crises
of 2008â€].) The record does not show
that the Special Forbearance/Workout Agreement between the parties was entered
into pursuant to FannieMae’s HomeSaver Forbearance program.
To avoid confusion and
for ease of reference, we refer to the plaintiffs singularly by their first
names. We mean no disrespect.
