Re: ???????????????????????????? Nationstar Mortgage, LLC v. Pacific Equity Credit, Inc., et al.
Court Case No. 17 CECG 00719
Hearing Date: ?????????? December 21, 2017? ??????????? (Dept. 502)
Motion: ????????????????????? Default Prove Up
The court is required to render default judgment only ?for such sum?as appears to be just?, based on the evidence presented.? (Code Civ. Proc. ? 585, subd. (b).)? At the hearing, the plaintiff must prove-up his right to relief, by introducing sufficient evidence to support his claim.? (See, Taliaferro v. Hoogs (1963) 219 Cal.App.2d 559, 560; and 6 Witkin, Cal. Procedure (5th Ed. 2008) Proceedings Without Trial, ? 169, p. 609.)
A defendant who fails to answer admits only the facts that are well pleaded.? (See 5 Witkin, supra, ?981.)? If the complaint fails to state a cause of action or the allegations do not support the demand for relief; the plaintiff is no more entitled to that relief by default judgment than if the defendant expressly admitted all the allegations.? (See Vasey v. California Dance Co. (1977) 70 Cal.App.3d 742, 749.)
First Cause of Action — Quiet Title
The statutory elements of a cause of action for quiet title are as follows:
- A description of the property that is the subject of the action. In the case of real property, the description must include both its legal description and its street address or common designation, if any [Code Civ. Proc. ? 761.020(a)];
- The title of the plaintiff as to which a determination is sought and the basis of the title. [Code Civ. Proc. ? 761.020(b)];
- The adverse claims to the title of the plaintiff against which a determination is sought [Code Civ. Proc. ? 761.020(c)];
- The date as of which the determination is sought [Code Civ. Proc. ? 761.020(d)];
- A prayer for the determination of the title of the plaintiff against the adverse claims [Code Civ. Proc. ? 761.020(e)].
All the elements of the quiet title action have been facially pled, except for the requirement that all known defendants be named.? A person seeking to quiet title must name ?the persons having adverse claims that are of record or known to the plaintiff or reasonably apparent from an inspection of the property? as defendants.? (Code Civ. Proc., ? 762.060.)? In fact, the court must order joinder of ?additional parties as are necessary or proper.?? (Code Civ. Proc., ? 762.040. subd. (a).)? Any person with a claim to the property must appear as a defendant.? (Code Civ. Proc., ? 762.050.)? Here Henry Sanchez is known to have some interest in the property, and has not been served.? The court cannot enter judgment on the quiet title cause of action for this reason.
??????????? Second Cause of Action ? Cancellation of Instrument
Civil Code section 3412 provides that a written instrument, “in respect to which there is reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.”? A cause of action under this code section is an equitable claim. (M.F. Farming Co. v. Couch Distributing Co., Inc. (2012) 207 Cal.App.4th 180, 200.) Further, a plaintiff must allege specific facts, ?not mere conclusions, showing the apparent validity of the instrument designated, and point out the reason for asserting that it is actually invalid.? (Ephraim v. Metropolitan Trust Co. (1946) 28 Cal.2d 824, 833?834; accord, Wolfe v. Lipsy (1985) 163 Cal.App.3d 633, 638, disapproved on other grounds, Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 35?36.)
According to a leading treatise, instruments have been found void or voidable due to: lack of capacity of a signatory due to minority, lack of capacity of a signatory due to lack of mental incapacity, procurement by fraud; procurement by duress, procurement by breach of fiduciary duty; evidence of the absence, failure or inadequate consideration, the contract violating a statute or having an illegal object, mutual mistake, or unilateral mistake known or induced by one party, forgery, or absence of delivery of a deed.? (12 Miller & Starr (4th Ed.) Cal. Real Est. ? 40:114.) The court could find no authority suggesting that a deed of trust is void or voidable merely because it is alleged to have been paid in the past.? Plaintiff cited none.
Presumably, plaintiff is thinking of extinguishment.? Once the underlying obligation is satisfied, the deed of trust is automatically extinguished by operation of law. (See, e.g., Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1235 [“A security interest cannot exist without an underlying obligation, and therefore a . . . deed of trust is generally extinguished by . . . payment . . . .?]; Snider v. Basinger (1976) 61 Cal.App.3d 819, 823 [“When the obligation secured by a trust deed is satisfied, the deed is terminated and title to the property automatically revests in the trustor or his successor without a reconveyance. [Citations.] The trustor is entitled to a reconveyance [citation], but the legal effect of reconveyance is only to clear the title of record.”].)
The remedy for extinguishment is Civil Code section 2941.? That section provides a detailed procedure whereby on satisfaction of the obligation secured by a mortgage, the mortgagee is obligated to execute and record a certificate of discharge whether or not requested by the mortgagor. A certificate of discharge of a mortgage can be recorded.? The certificate of discharge must be executed and recorded within 30 days after the mortgage has been satisfied and the original note and mortgage has been delivered by the mortgagee to the mortgagor or his or her heirs, successors, or assigns.
Because the deed of trust is neither void nor voidable, the court declines to enter judgment in favor of plaintiff on the second cause of action.
??????????? Third Cause of Action ? Declaratory Relief
Code of Civil Procedure section 1060 provides: Any person interested under a written instrument ? who desires a declaration of his or her rights or duties with respect to another, ? in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties ?, including a determination of any question of construction or validity arising under the instrument or contract.?
The priority of trust deeds and other liens may be determined in an action for declaratory relief.? (Radunich v. Basso (1965) 235 Cal.App.2d 826, 836.)? Here, however, the complaint?s allegation that the offending deed of trust?s obligation was paid is completely undercut by the submitted ?proof? of that allegation.? Nationstar offers the declaration of David Andrews, Jr., a Document Execution Associate, in support of its prove up. He has reviewed the documents in Nationstar?s files which he declares to be ?reliable and verifiable.?? Andrews does not make an Evidence Code section 1271 showing.
In Andrews? review of the file, he reaches the following inadmissible legal conclusion: ?the Offending deed of trust, has been extinguished as it as it was paid in full and should have been reconveyed prior to the creation and execution of the NSM promissory note and deed of trust.? The offending deed of trust should be of no force or legal effect and should not be viewed as encumbering the property.?? Also, in Andrew?s six years of experience, ?NSM or any major lender would not enter into a loan of this substantial a dollar amount [$172,000] without it being secured by a first priority deed of trust and in this case specifically did not agree to be considered a junior priority lien to the offending deed of trust.??? This statement is speculation and lacks personal knowledge.? Nationstar did not originate the loan.
While, a default admits any well-pleaded facts, here, the ?evidence? shows that the ?fact? that the loan was paid is not a fact at all.? It is speculation.? Accordingly, the court will not enter a judgment of declaratory relief in favor of plaintiff on this showing.
Pursuant to California Rules of Court, rule 3.1312(a) and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary.? The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Issued By: ???????????RTM???????????????????????? on?? 12/20/17????????????????????? .