| Case Number: KC069027??? Hearing Date: July 14, 2017??? Dept: J
Re: Tina M. Arellano v. Select Portfolio Servicing, Inc., et al. (KC069027) MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT Moving Party: Plaintiff Tine M. Arellano Respondent: Defendant Select Portfolio Servicing, Inc. POS: Moving OK; Opposing OK This is a wrongful foreclosure action involving plaintiff?s residential property located at 4805 North Darfield Avenue in Covina. The complaint, filed on 1/23/17, asserts causes of action for: 1.????? Violation of ? 2923.6 2.????? Violation of ? 2923.7 3.????? Intentional Misrepresentation 4.????? Unfair Business Practices, B&P Code ?? 17200 et seq. On 2/24/17, the court related this case to Case No. KC067552. On 6/13/17, the court granted Defendant Select Portfolio Servicing, Inc.?s motion for judgment on the pleadings as to the first, third and fourth causes of action, without leave. A Case Management Conference is set for 7/10/17. Plaintiff Tina M. Arellano (?plaintiff?) moves the court, per California Rules of Court Rule 3.1324, for leave to file her proposed First Amended Complaint (“FAC”) to add causes of action for Violation of ? 2923.6, Negligent Misrepresentation, Negligence, Wrongful Foreclosure and Unfair Business Practices, B&P Code ?? 17200 et seq. Plaintiff asserts the following grounds: After plaintiff filed her 1/23/17 complaint, defendants foreclosed on the subject property and recorded a Trustee?s Deed after Sale. Defendant Select Portfolio Servicing, Inc. (?SPS?) also sent plaintiff a letter detailing the fact that plaintiff was still being considered for a ?loan resolution option? five days after the trustee sale occurred, thus adding to plaintiff?s contention that SPS had not finished its review of plaintiff?s modification. The remedies set forth in CCP ?? 2923 and 2924 are now applicable, because the subject property is in post foreclosure proceedings. REQUEST FOR JUDICIAL NOTICE: Defendant Select Portfolio Servicing, Inc.?s (?SPS?) request for judicial notice is ruled on as follows: GRANT as to Exhibit ?1? (i.e., deed of trust recorded 7/6/06); GRANT as to Exhibit ?2? (i.e., ?Corporation Assignment of Deed of Trust? recorded 10/19/07); GRANT as to Exhibit ?3? (i.e., ?Substitution of Trustee and Assignment of Deed of Trust? recorded 10/19/07); GRANT as to Exhibit ?4? (i.e., ?Notice of Default and Election to Sell? recorded 2/23/07); GRANT as to Exhibit ?5? (i.e., ?Substitution of Trustee? recorded 11/4/14); GRANT as to Exhibit ?6? (i.e., ?Notice of Default and Election to Sell Under Deed of Trust? recorded 11/4/14); GRANT as to Exhibit ?7? (i.e., ?Notice of Trustee?s Sale? recorded 3/10/15); GRANT as to Exhibit ?8? (i.e., ?Notice of Trustee?s Sale? recorded 7/26/16); GRANT as to Exhibit ?9? (i.e., complaint filed 3/30/15 in case styled Arellano v. Select Portfolio Servicing, Inc., et al., Case No. KC067552 [?Prior Action?]); GRANT as to Exhibit ?10? (i.e., docket in the Prior Action); GRANT as to Exhibit ?11? (i.e., First Amended Complaint [?FAC?] filed 9/28/15 in the Prior Action); GRANT as to Exhibit ?12? (i.e., demurrer to the FAC filed 10/30/15 in the Prior Action), to the extent that the court takes judicial notice of its existence and filing date); GRANT as to Exhibit ?13? (i.e., court?s tentative ruling on the demurrer to FAC in the Prior Action); GRANT as to Exhibit ?14? (i.e., ?Request for Dismissal? without prejudice filed 3/30/16 in the Prior Action). ?[A] court may take judicial notice of the fact of a document’s recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document’s legally operative language, assuming there is no genuine dispute regarding the document’s authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.? Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265, disapproved of on other grounds by Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919. The judicially noticeable documents reflect the following: On 7/6/06, a deed of trust was recorded on the subject property, which identified AMB LLC, dba American Mortgagebanc as the lender and beneficiary and Security Union Title as the trustee. (RJN, Exhibit ?1?). On 10/19/07, a ?Corporation Assignment of Deed of Trust? was recorded, wherein all beneficial interest in the deed of trust was transferred to New Century Mortgage Corporation (?New Century?). (Id., Exhibit ?2?). On 10/19/07, a ?Substitution of Trustee and Assignment of Deed of Trust? was recorded, wherein New Century substituted Recontrust Company (?Recontrust?) in as trustee and transferred its beneficial interest in the deed of trust to HSBC Bank USA, National Association for the Benefit of ACE Securities Corp. Home Equity Loan Trust, Series 2006-NC3, Asset Backed Pass-Through Certificates. (Id., Exhibit ?3?). On 2/23/07, a ?Notice of Default? was recorded by Recontrust. (Id., Exhibit ?4?). On 11/4/14, a ?Substitution of Trustee? was recorded, wherein Quality Loan Service Corporation (?Quality? was substituted in as trustee. (Id., Exhibit ?5?). On 11/4/14, a ?Notice of Default? was recorded by Quality. (Id., Exhibit ?6?). On 3/10/15, a ?Notice of Trustee?s Sale? was recorded. (Id., Exhibit ?7?). On 7/26/16, another ?Notice of Trustee?s Sale? was recorded. (Id., Exhibit ?8?). ?The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading?? CCP ? 473(a)(1); and see ? 576. A motion for leave to amend must (1) include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments, (2) state what allegations in the previous pleading are proposed to be deleted, if any, and where (by page, paragraph and line number) the deleted allegations are located, and (3) state what allegations are proposed to be added to the previous pleading, if any, and where (by page, paragraph, and line number) the additional allegations are located. California Rules of Court (?CRC?) Rule 3.1324(a). Additionally, a separate declaration must accompany the motion and must specify (1) the effect of the amendment, (2) the reason why the amendment is necessary and proper, (3) the time when the facts giving rise to the amended allegations were discovered, and (4) the reasons why the request for amendment was not made earlier. CRC Rule 3.1324(b). ?While a motion to permit an amendment to a pleading to be filed is one addressed to the discretion of the court, the exercise of this discretion must be sound and reasonable and not arbitrary or capricious. Richter v. Adams [(1941)] 43 Cal.App.2d 184, 187; Eckert v. Graham [(1933)] 131 Cal.App. 718, 721. And it is a rare case in which ?a court will be justified in refusing a party leave to amend his pleadings so that he may properly present his case.? Guidery v. Green [(1892)] 95 Cal. 630, 633; Marr v. Rhodes [(1900)] 131 Cal. 267, 270. If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion. Nelson v. Superior Court [(1950)] 97 Cal.App.2d 78; In re Estate of Herbst [(1938)] 26 Cal.App.2d 249; Norton v. Bassett [(1910)] 158 Cal. 425, 427.? Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530. Moreover, ?if the proposed amendment fails to state a cause of action, it is proper to deny leave to amend.? Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 230 (citing 5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, ? 1125, p. 541). In this instance, amendment appears futile. In her motion, plaintiff wishes to add causes of action for wrongful foreclosure and negligence, and to resurrect her causes of action for Violation of ? 2923.6, Unfair Business Practices, B&P Code ?? 17200 et seq. and misrepresentation. The ?factual basis? for all of these proposed amendments is the conclusory claim that SPS actually conducted an NPV test that resulted in a negative value, which in turn resulted in the denial of her loan modification application and thus obligated SPS to provide her with the NPV inputs used during the review. (See Proposed FAC, ? 43, et seq.). Plaintiff concedes that she ?continues to allege that SPS has not complied with California?s Homeowners Bill of Rights (HBOR) and have violated [sic] ? 2923.6 by concealing all but two of the Net Present Value (NPV) inputs used in Plaintiff?s loan modification review.? (Motion, 4:7-9; see also Proposed FAC, ? 14). As stated in the 10/20/16 denial letter, SPS denied plaintiff?s application because ?[w]e are unable to offer you this program because your account is not eligible based on your current monthly gross income, as we could not create an affordable payment within the program?s guidelines.? (Complaint, Exhibit ?C;? emphasis added). The court has determined, in connection with SPS? motion for judgment on the pleadings, that the denial ?was based on the fact that no affordable payment could be created, based on [plaintiff’s] monthly income? and that plaintiff alleged no facts supporting her claim that there were ?many other? inputs used in SPS? calculations. On 6/13/17, the court denied counsel?s oral request for leave to amend in connection with its ruling granting SPS? motion for judgment on the pleadings with respect to the first, third and fourth causes of action, thereby implicitly finding that plaintiff could not make an offer of proof. In the proposed FAC, plaintiff does not provide facts to support her allegations that SPS actually conducted an NPV test which concluded with a negative NPV calculation; instead, she pleads that ?[t]his is the basis of Plaintiff?s allegation that she was denied due to a negative NPV and not for the reason SPS has claimed?SPS conducted a NPV calculation and through that calculation, created a proposed payment [that] was deemed unaffordable as a result of the NPV calculation test.? (Proposed FAC, ? 43). Plaintiff?s proposed negligent misrepresentation claim fails for other reasons. ?The elements of negligent misrepresentation are ?(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.? (Apollo Capital Fund LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243).? National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50. ?While there is some conflict in the case law discussing the precise degree of particularity required in the pleading of a claim for negligent misrepresentation, there is a consensus that the causal elements, particularly the allegations of reliance, must be specifically pleaded. (E.g., Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184; Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519).? Id. Plaintiff cannot allege any actual reliance and causation. Her attempt to state a different cause of action by simply reclassifying the misrepresentation as negligent, rather than intentional, also does?not address the defective nature of the underlying misrepresentation alleged. The motion, then, is denied. |
