Johnson v. JP Morgan Chase Bank CA2/6

Filed 7/17/14 Johnson et al. v. JP Morgan Chase Bank CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SIX

WES W. JOHNSON, KEN ERISMAN 2d Civil No. B250227 AND MARIE ERISMAN, (Super. Ct. No. CV100342) (San Luis Obispo County) Plaintiffs and Appellants,

v.

JP MORGAN CHASE BANK,

Defendant and Respondent.

Wes W. Johnson, Ken Erisman, and Marie Erisman appeal from the judgment entered after the trial court sustained, without leave to amend, a demurrer filed by JP Morgan Chase Bank, N.A., respondent. Appellants resided on property owned by Johnson. After Johnson defaulted on a loan secured by a deed of trust on the property, respondent bought the property at a trustee's sale and filed an unlawful detainer action against appellants. The unlawful detainer action was dismissed with prejudice, and respondent did not appeal. In the instant action appellants claim that, pursuant to principles of res judicata, the unlawful detainer judgment conclusively establishes that the deed of trust was void and that respondent did not acquire valid title to the property. We disagree and affirm.

The Operative Complaint in the Instant Action In October 2012 appellants filed a second amended verified complaint (the complaint) against respondent. The complaint consisted of three causes of action: quiet title, cancellation of instruments, and wrongful foreclosure. The complaint alleged: Appellant Johnson was the owner of property in Pismo Beach. Respondent was the beneficiary under a deed of trust on the property. Respondent "wrongfully caused the trustee under the Deed of Trust to conduct the illegal, fraudulent, and willfully oppressive sale of the Property . . . ." Respondent purchased the property at the sale. After the sale, respondent filed an action against appellants "alleging ownership of the Property and seeking possession" (the unlawful detainer action). Appellant Ken Erisman is Johnson's stepfather, and appellant Marie Erisman is his mother. "At all times relevant to this action, they also resided in the home located on the Property." The complaint further alleged: Appellants' answer to the unlawful detainer action "alleged as [their] Second Affirmative Defense that the Deed of Trust had been voided, and as their Fifth Affirmative Defense that [respondent's] title to the Property . . . had been obtained by fraud." In August 2009 respondent voluntarily dismissed the unlawful detainer action without prejudice. In October 2009 the trial court vacated the dismissal without prejudice and ordered that the action be dismissed with prejudice. "The order dismissing the [unlawful detainer action] with prejudice . . . is the equivalent of a judgment on the merits barring any future action on the same subject matter." It therefore constitutes "a final and conclusive determination" that "the Deed of Trust had been voided prior to the alleged acquisition of title by [respondent]. Consequently, [respondent] could not have acquired title to the Property by virtue of an alleged foreclosure sale and the Trustee's Deed. It has no right to possession of the Property and holds no title, legal or equitable to it." "Johnson was, and is, the vested owner of fee simple title to the Property." The Demurrer Respondent demurred to the complaint. In support of its demurrer, respondent requested that the trial court take judicial notice of various documents filed in the