On November 20, 2019, Plaintiff Richard Peterson filed this action against Defendants Ditech Financial LLC (“Ditech”), The Wolf Firm (“Wolf”), and Casas Bonitas, arising from an allegedly fraudulent trustee sale in 2019 of the real property located at 4817 Stargazer Place, Palmdale, California 93552. The verified complaint sought to rescind the sale of the property, damages of $100,000.00, punitive damages of $3,000,000.00, and various determinations concerning the title and sale of the property. Plaintiff later dismissed Ditech and Wolf.
On July 8, 2020, Finance of America Commercial, LLC (“Finance”) moved to intervene because it made a loan to Casas Bonitas in the amount of $296,250.00 that was secured by the property, and Finance was the beneficiary of the Deed of Trust related to the loan. On October 5, 2020, the Court granted Finance’s motion.
On October 20, 2020, Plaintiff filed a verified first amended complaint (“FAC”) with a single cause of action for declaratory relief against Casas Bonitas and Finance on the issue of their status as bona fide purchasers and encumbrancers of the property. On February 26, 2021, the Court sustained Casas Bonitas’ demurrer without leave to amend.
On February 10, 2021, Finance filed this motion for judgment on the pleadings. Finance’s request for judicial notice is granted.
A motion for judgment on the pleadings is the functional equivalent to a general demurrer. (Lance Camper Mfg. Corp. v. Republic Indemnity Co. of Am. (1996) 44 Cal.App.4th 194, 198.) Like demurrers, motions for judgment on the pleadings challenge the legal sufficiency of the allegations, not their veracity. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) The Court “must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed.” (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-1220.)
In the FAC, Plaintiff alleges that Finance’s claim as a bona fide encumbrancer is based on an alleged bona fide purchase by Casas Bonitas, and Casas Bonitas’ claim as a bona fide purchaser is based on its June 18, 2019 purchase of the property from Ditech. (FAC at p. 2.) Plaintiff seeks a judicial determination that Finance is not a bona fide subsequent purchaser of the property due to competing claims in the title record. (Id. at p. 10.)
Finance contends that it is no longer a proper party because, although it previously had a security interest in the property, Casas Bonitas has paid off the loan made by Finance, and Finance is no longer an encumbrancer of the property. (Motion at pp. 3-4.) Finance provides a copy of the Substitution of Trustee and Full Reconveyance, recorded in the Official Records, Recorder’s Office, Los Angeles County, California on November 30, 2020. (RJN, Ex. 1.) The document identifies Casas Bonitas as the original trustor and Finance as the original beneficiary under the Deed of Trust dated 7/1/2019 and recorded on July 5, 2019 regarding the property. The document substitutes Finance as trustee and substitute trustee, and reconveys “to the person or persons legally entitled thereto, without warranty, all the estate, title, and interest acquired by Trustee under said Deed of Trust.” Finance is therefore no longer an encumbrancer of the property.
Accordingly, the motion for judgment on the pleadings is GRANTED. Because Plaintiff cannot remedy this defect, no leave to amend is granted.
As the Court sustained Casas Bonitas’ demurrer and grants Finance’s motion, none of the FAC’s defendants remain in this action. This case is therefore dismissed.
Moving party to give notice.