Case Number: BC605612??? Hearing Date: February 21, 2017??? Dept: 51
Background
This is a wrongful foreclosure action concerning certain real property known as 858 Hyde Avenue, Pomona. According to the allegations, in 2005, plaintiffs obtained a mortgage from defendant Countrywide. In February 2013, Countrywide purportedly transferred the deed of trust to defendant Bank of New York Mellon (BONY). Plaintiffs never received notice of the transfer as required under the Truth in Lending Act (TILA). On July 13, 2015, plaintiff rescinded the transaction (presumably, the assignment) by mailing a notice of rescission to non-party Ocwen as their mortgage servicer and BONY?s beneficiary. BONY did not act within 20 days to challenge the rescission as required by the TILA. Therefore, plaintiffs? contract (presumably, the mortgage) became void and their debt was eradicated as of July 13, 2015.
On December 31, 2015, plaintiffs filed a complaint against Countrywide for (1) violation of the TILA, (2) quiet title, (3) cancellation of instrument, and (4) declaratory relief. On November 29, 2016, plaintiffs filed the operative first amended complaint against Countrywide and BONY for (1) declaratory relief relating to violations of the TILA (against all defendants), (2) violation of 15 USC section 1641, subdivision (g) (against BONY), (3) cancellation of instrument (against all defendants), and (4) wrongful foreclosure (against BONY).
On December 7, 2016, Countrywide filed this unopposed demurrer to the first and third causes of action for insufficient facts, arguing, among other things, that plaintiffs? claims are barred by claim and issue preclusion principles because they were litigated to final judgment unfavorably to plaintiffs in LASC Case No. BC561286. Defendant?s counsel filed a compliant meet and confer declaration. CCP ? 430.41; Jindal Decl. ?? 3-5. The Court considered the moving papers, and rules as follows.
Plaintiffs are self-represented. Self-represented litigants are held to the same standards that apply to licensed attorneys. Harding v. Collazo (1986) 177 Cal.App.3d 1044, 1056; Lombardi v. Citizens Nat?l Trust & Sav. Bank (1955) 137 Cal.App.2d 206, 208-209 (stating that pro per litigants are ?restricted to the same rules of evidence and procedure as is required of those qualified to practice law before our courts.?)
Request for Judicial Notice
Defendants? request for judicial notice of Court records in BC561286 is GRANTED. Evid. Code ? 452(d).
Demurrer Standard
A demurrer may be sustained where the complaint fails to state facts sufficient to constitute a cause of action. CCP ? 430.10(e). Thus, concerning the legal sufficiency of a pleading, the sole issue on demurrer is whether the facts pleaded, if true, state a valid cause of action, i.e., if the complaint pleads facts that would entitle the plaintiff to relief. Garcetti v. Superior Court (1996) 49 Cal.App.4th 1533, 1547; Limandri v. Judkins (1997) 52 Cal.App.4th 326, 339. The question of plaintiff?s ability to prove the allegations of the complaint or the possible difficulty in making such proof does not concern the reviewing court. Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47. The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 113 (stating, ?[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true?). Nevertheless, this rule does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. Vance v. Villa Park Mobilehome Estates (1995) 36 Cal.App.4th 698, 709. Leave to amend must be allowed where there is a reasonable possibility of successfully stating a cause of action. Schulz v. Neovi Data Corp. (2007) 152 Cal.App.4th 86, 92.
If the demurrer is sustained, plaintiff ?has the burden of proving the possibility of cure by amendment.? Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 173 (quoting Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 78-79 (internal quotations omitted)).
Claim and Issue Preclusion
Countrywide argues that claim and issue preclusion principles bar plaintiffs? claims.
?Claim preclusion ?prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.? [Citation.] Claim preclusion arises if a second suit involves: (1) the same cause of action (2) between the same parties (3) after a final judgment on the merits in the first suit. [Citation.] If claim preclusion is established, it operates to bar relitigation of the claim altogether. [?] Issue preclusion prohibits the relitigation of issues argued and decided in a previous case, even if the second suit raises different causes of action. [Citation.] Under issue preclusion, the prior judgment conclusively resolves an issue actually litigated and determined in the first action. [Citation.] There is a limit to the reach of issue preclusion, however. In accordance with due process, it can be asserted only against a party to the first lawsuit, or one in privity with a party. [Citation.] [?] Issue preclusion differs from claim preclusion in two ways. First, issue preclusion does not bar entire causes of action. Instead, it prevents relitigation of previously decided issues. Second, unlike claim preclusion, issue preclusion can be raised by one who was not a party or privy in the first suit. [Citation.] ?Only the party against whom the doctrine is invoked must be bound by the prior proceeding. [Citations.]? [Citation.] In summary, issue preclusion applies: (1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party. [Citation.]? DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824-825 (citations omitted).
?? [T]he party asserting the defense of [issue preclusion] bears the burden of establishing that its requirements have been met. [Citation.]? Basurto v. Imperial Irrigation District (2012) 211 Cal.App.4th 866, 881 (citation omitted).
Concerning claim preclusion, ?[t]o determine whether two proceedings involve identical causes of action for purposes of claim preclusion, California courts have ?consistently applied the ?primary rights? theory.? [Citation.] Under this theory, ?[a] cause of action … arises out of an antecedent primary right and corresponding duty and the delict or breach of such primary right and duty by the person on whom the duty rests. ?Of these elements, the primary right and duty and the delict or wrong combined constitute the cause of action in the legal sense of the term….? ? [Citation.]? Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797-798 (citations omitted).
Here, in BC561286, in opposing Countrywide?s demurrer to the first amended complaint, plaintiffs argued that they could cure defects by alleging that the promissory note and deed of trust were void by operation of law, asserting the same facts and legal basis alleged in this FAC: the July 13, 2015 notice of rescission to Ocwen, that no one challenged the rescission within 20 days, and various TILA provisions. RJN, Exh C. OPP 6:14-9:17. Having necessarily considered this argument, the Court (Judge Bruguera) sustained the demurrer without leave to amend and dismissed Countrywide from the action with prejudice on October 16, 2015. RJN, Exhs. D, E.
Accordingly, all of the issue preclusion elements are present: the matter was dismissed; plaintiffs raised an identical issue; the Court necessarily decided the issue in ruling on the demurrer in determining that there was no basis on which to grant leave to amend; and both plaintiffs and Countrywide were the parties.
All of the claim preclusion elements also appear to be present: plaintiffs assert the same primary right (to be free from foreclosure proceedings on the ground that the assignment was void because no one challenged the notice of recession); plaintiffs unsuccessfully asserted this right against Countrywide; and the action was dismissed.
In failing to oppose, plaintiffs offer no rebuttal or fail to establish any basis on which these defects could be cured. The Court need not reach defendants? other arguments.
Conclusion
The demurrer is SUSTAINED WITHOUT LEAVE. The Court intends to sign the proposed order. Defendants to submit a proposed judgment of dismissal within five days and give notice.