Jackson v. Specialized Loan Servicing CA4/2 (2021) · DecisionDepot
Jackson v. Specialized Loan Servicing CA4/2
California Court of Appeal Nov 15, 2021 No. E074576Unpublished
Filed 11/15/21 Jackson v. Specialized Loan Servicing 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
PHILLIP D. JACKSON,
Plaintiff and Appellant, E074576
v. (Super.Ct.No. CIVDS1902207)
SPECIALIZED LOAN SERVICING OPINION LLC,
Defendant and Respondent.
APPEAL from the Superior Court of San Bernardino County. Donna G. Garza,
Judge. Affirmed.
Phillip D. Jackson in pro. per.
Yu Mohandesi LLP, Pavel Ekmekchyan and Sara E. Stratton for Defendant and
Respondent.
Plaintiff Phillip Jackson defaulted on his home loan mortgage resulting in a notice
of default and intent to foreclose by defendant Specialized Loan Servicing, LLC (SLS),
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the successor in interest under the deed of trust securing the mortgage. Plaintiff filed suit
on grounds the proposed foreclosure proceeding violated the Fair Debt Collection
Practices Act (Civ. Code, § 1788, et seq.), violations of Civil Code sections 2924,
subdivision (a)(6) and 2924.17 [asserting that SLS lacked authority to issue the notice of
default or initiate foreclosure], and violation of Business and Professions Code section
17200 [unfair and deceptive business practices]. Defendant’s demurrer to the second
amended complaint was sustained without leave to amend and a judgment of dismissal
was entered. Plaintiff appeals.
On appeal, plaintiff argues: (1) the trial court erred in sustaining the demurrer
without leave to amend based on judicially noticed documents; (2) the demurrer should
not have been sustained as to plaintiff’s claimed violations of the Rosenthal Debt
Collection Practices Act (Civ. Code, §§1788, et seq. and 15 U.S.C. 1692, et seq.) because
the assignment of the deed of trust did not establish SLS’s rights thereunder; (3) the
demurrer should not have been sustained as to plaintiff’s claimed violations of Civil Code
section 2924, et seq.; and (4) the demurrer should not have been sustained as to plaintiff’s
cause of action for violation of the Unfair Business Practices law. (Bus. & Prof. Code,
§ 17200, et seq.) We affirm.
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BACKGROUND1
On June 14, 2006, plaintiff purchased a home, executing an adjustable note in the
amount of $391,999, agreeing to repay Mountain West Financial, Inc. the amount of the
loan, which was secured by a deed of trust. The deed of trust described Mountain West
Financial, Inc. as the lender, First American Title Insurance Co. as the trustee, and MERS
(Mortgage Electronic Registration Systems, Inc.) as a nominee for the lender and the
beneficiary under the security instrument.2
While plaintiff was still in default, the deed of trust was assigned to Aurora Bank
on August 12, 2011, followed by another assignment of the deed of trust to Federal Home
Loan Mortgage Corporation on May 21, 2012. On May 14, 2014, the deed of trust was
assigned to Nationstar. At this point, plaintiff obtained a loan modification from
Nationstar, but did not make any payments under the loan modification agreement.
On December 28, 2017, plaintiff received a notice of servicing transfer, whereby
the servicing of the loan was transferred from Nationstar to SLS. On January 21, 2018,
SLS served a default notice and notice of intent to foreclose on plaintiff. On January 30,
2018, Nationstar executed an assignment of the deed of trust to SLS. Plaintiff remained
1 We take the facts from the second amended complaint, which was the subject of the ruling from which the appeal is taken. “On appeal from dismissal following a sustained demurrer, we take as true all well-pleaded factual allegations of the complaint.” (Haggis v. City of Los Angeles (2000) 22 Cal.4th 490, 495.)
2 “A ‘nominee’ is a person or entity designated to act for another in a limited role—in effect, an agent.” (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 270, and cases there cited.) MERS was acting as nominee for the lender, which did possess an assignable interest. (Ibid.)
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in default. In March 2018, SLS became aware that plaintiff had filed for bankruptcy and
that his debt obligation had been discharged. On June 11, 2018, a substitution of trustee
was recorded naming Zieve, Brodnax and Steele, LLP (ZBS) as the foreclosing trustee.
On January 2, 2019, ZBS recorded a notice of trustee’s sale as to the property.
Plaintiff’s first amended complaint3 against SLS and ZBS alleged violations of the
Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.), as well as
violations of Civil Code section 2924, et seq., Unfair Business Practices (Bus. & Prof.
Code, § 17200), and violations of Business and Professions Code section 6077.5,
subdivision (e) (against ZBS only). Defendant SLS demurred to the FAC and the
demurrer was sustained without leave to amend as to those causes of action.
On August 23, 2019, plaintiff filed his second amended complaint (SAC), alleging
(1) violations of the Rosenthal Fair Debt Collection Practice Act; (2) violation of Civil
Code sections 2924.17 and 2924, subdivision (a)(6); (3) violation of Business and
Professions Code, section 17200, and violation of Business and Professions Code section
6077.5, subdivision (e) (against ZBS only).
Defendant filed a demurrer to the SAC, arguing that it failed to state facts
sufficient to constitute a cause of action against it, pointing out that the previous demurrer
to the allegations pertaining to violations of the Rosenthal Act (Civ. Code, §§ 1788 et
seq.) and violations of Civil Code section 2924, et seq., had been sustained without leave
to amend, barring inclusion of those counts in the SAC. Defendant requested that the
3 The original complaint is not a part of the record on appeal.
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court take judicial notice of the original deed of trust executed June 13, 2006, the
substitution of trustee dated June 11, 2018, and the court’s minute order sustaining the
demurrer to the FAC in its entirety. After hearing argument, the court sustained the
demurrer to the SAC in its entirety without leave to amend and entered a judgment of
dismissal of plaintiff’s complaint in favor of SLS.
Plaintiff appeals.
DISCUSSION
Plaintiff argues that the trial court erred in sustaining the demurrer to the SAC
without leave to amend. In part, his challenges are based on the mistaken notion that the
trial court was required to accept only plaintiff’s allegations and could not consider
matters of which it could take judicial notice. We disagree.
1. Standards of Review
The standard of review on appeal from a judgment dismissing an action after
sustaining a demurrer without leave to amend is well settled. (City of Dinuba v. County
of Tulare (2007) 41 Cal.4th 859, 865.) Demurrers raise a question of law, so on appeal
the standard of review is de novo. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178
Cal.App.4th 1020, 1034.) In reviewing demurrers, “‘we give the complaint a reasonable
interpretation, reading it as a whole and its parts in their context.’ [Citation.]” (Ibid.)
Further, we treat the demurrer as admitting all material facts properly pleaded, but do not
assume the truth of contentions, deductions or conclusion of law.
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“When a demurrer is sustained, we determine whether the complaint states facts
sufficient to constitute a cause of action.” (City of Dinuba v. County of Tulare, supra, 41
Cal.4th at p. 865.) “We give the complaint a reasonable interpretation, reading it as a
whole and its parts in their context. [Citation.] Further, we treat the demurrer as
admitting all material facts properly pleaded, but do not assume the truth of contentions,
deductions or conclusions of law. [Citations.] When a demurrer is sustained, we
determine whether the complaint states facts sufficient to constitute a cause of action.
[Citation.]” (Ibid.)
If the demurrer is sustained without leave to amend, we also ask whether there is a
reasonable probability that the defect can be cured by amendment. (City of Dinuba v.
County of Tulare, supra, 41 Cal.4th at p. 865.) In this regard, we consider whether on the
pleaded and noticeable facts there is a reasonable possibility of an amendment that would
cure the complaint’s legal defect or defects. (Schifando v. City of Los Angeles (2003) 31
Cal.4th 1074, 1081.)
“The plaintiff has the burden of proving that an amendment would cure the
defect.” (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) Where the
defect can be cured by amendment, we find the trial court abused its discretion and
reverse. (City of Dinuba v. County of Tulare, supra, 41 Cal.4th at p. 865.) Otherwise, we
affirm.
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2. The Trial Court Properly Considered Judicially Noticeable Documents in
Ruling on the Demurrer.
Plaintiff argues that it was improper for the trial court to consider judicially
noticed documents in ruling on the demurrer. Instead, pointing to the judicial policy and
language of Code of Civil Procedure section 430.10, subdivision (e), that the demurrer
tests the sufficiency of the complaint solely by accepting as true plaintiff’s allegations
therein, he posits that contradictory information, even when subject to judicial notice,
cannot be considered. This is incorrect, and plaintiff’s misconception affects all his
claims on appeal.
Code of Civil Procedure section 430.30 provides, “(a) When any ground for
objection to a complaint, cross-complaint, or answer appears on the face thereof, or from
any matter of which the court is required to or may take judicial notice, the objection on
that ground may be taken by a demurrer to the pleading.” Additionally, although a court,
in ruling on a demurrer, accepts the truth of material facts properly pleaded in the
operative complaint, it does not accept as true the contentions, deductions, or conclusions
of fact or law. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.)
False allegations of fact, or allegations that are inconsistent with annexed documentary
exhibits or contrary to facts judicially noticed, may be disregarded. (Hoffman v.
on the adequacy of its factual allegations in the claims pled under the Rosenthal Act and
under Civil Code section 2924, et seq.
As we have demonstrated, antecedent substantive causes of action cannot stand:
the plaintiff alleged only that assignment of the deed of trust was not valid, although the
judicially noticed documents contradict this allegation. SLS did not threaten or harass
plaintiff to collect the debt. Additionally, as we have explained, nonjudicial foreclosure
does not constitute a debt collection activity under the Rosenthal Act. Having failed to
allege any “unlawful acts” under either the Rosenthal Act or Civil Code section 2924, et
seq., plaintiff’s UCL claim necessarily fails.
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DISPOSITION
The judgment is affirmed. Defendant is entitled to costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS RAMIREZ P. J. We concur:
SLOUGH J.
FIELDS J.
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AI Brief
AI-generated · verify before citing
Holding. The court held that the trial court properly sustained the defendant's demurrer without leave to amend because the plaintiff failed to state a cause of action, as judicially noticed documents established the defendant's authority to initiate foreclosure.
Issues
Whether the trial court erred in considering judicially noticed documents when ruling on a demurrer.
Whether the defendant's initiation of nonjudicial foreclosure proceedings violated the Rosenthal Fair Debt Collection Practices Act.
Whether the defendant lacked authority to initiate foreclosure under Civil Code section 2924 et seq.
Whether the plaintiff stated a viable claim for unfair business practices under Business and Professions Code section 17200.