Coppage v. WMC Mortgage CA6
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
LARRY COPPAGE,
Plaintiff and Appellant,
v.
WMC MORTGAGE, LLC et al.,
Defendants and Respondents.
H041592
(Santa Cruz County
Super. Ct. No. CV169052)
Plaintiff Larry Coppage appeals from judgments of dismissal entered after the trial
court sustained the demurrers of defendants WMC Mortgage LLC (WMC)1
and Quality
Loan Service Corporation (Quality) to his second amended complaint for declaratory
relief. He contends that the trial court (1) improperly sustained both demurrers, (2)
abused its discretion in denying leave to amend, and (3) erred in denying his ex parte
application for a stay of enforcement. We affirm.
I. Background
Because this appeal follows the sustaining of demurrers, we take the facts from the
operative and earlier complaints, the exhibits thereto, and matters judicially noticed.
1 Defendant and respondent WMC Mortgage LLC is the successor in interest to
WMC Mortgage Corporation. We refer to these entities collectively as WMC.
2
(Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank); Dodd v. Citizens Bank of Costa
Mesa (1990) 222 Cal.App.3d 1624, 1627 (Dodd); Berg & Berg Enterprises, LLC v. Boyle
(2009) 178 Cal.App.4th 1020, 1034 (Berg).)
Plaintiff bought a house on Manzanita Road in Boulder Creek in 1998. In 2004,
he obtained a $454,750 loan from Argent Mortgage Company. The Argent loan was
evidenced by a promissory note and secured by a deed of trust on the property.
Plaintiff refinanced the property in 2005 with a $517,000 loan from WMC. The
WMC loan was evidenced by a promissory note and secured by a deed of trust on the
property. The WMC deed of trust named plaintiff as the borrower, WMC as the lender,
Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary, and
Westwood Associates as the trustee. It reflected plaintiff’s agreement to “irrevocably
grant[] and convey[] to Trustee, in trust, with power of sale, the [Manzanita Road]
property . . . .” It provided that “[t]he Note or a partial interest in the Note . . . can be sold
one or more times without prior notice to Borrower.” It also provided that “Lender, at its
option, may from time to time appoint a successor trustee to any Trustee appointed
hereunder by an instrument executed and acknowledge by Lender and recorded in the
office of the Recorder of the county in which the Property is located.” The WMC deed of
trust was recorded on June 2, 2005. To evidence the payoff of the Argent loan, the
trustee under the Argent deed of trust executed a “Full Reconveyance” of “all the estate,
title and interest” the Argent trustee had acquired in the Manzanita Road property. The
full reconveyance was recorded on July 1, 2005.
Plaintiff soon defaulted on the new loan from WMC. On May 8, 2006, WMC as
the present beneficiary under the deed of trust executed a “Substitution of Trustee”
replacing Westwood Associates with Quality as trustee. The substitution was recorded
on August 18, 2006.
On May 15, 2006, Quality “as agent for . . . the beneficiary” WMC under the deed
of trust recorded a “Notice of Default and Election to Sell Under Deed of Trust.” The
3
notice informed plaintiff that his loan was $35,056.46 in arrears as of May 8, 2006, and
that the arrearage would continue to increase until he brought the loan current. He did
not do so, and on August 18, 2006, Quality recorded a “Notice of Trustee’s Sale.”
On August 30, 2006, WMC sold plaintiff’s loan to Morgan Stanley. On
February 13, 2007, WMC assigned plaintiff’s deed of trust to FV-1, Inc. The assignment
was recorded on April 6, 2007.
The trustee’s sale was conducted on March 15, 2007. FV-1 purchased the
Manzanita Road property at the sale. On March 16, 2007, Quality issued a “Trustee’s
Deed Upon Sale” that inaccurately named WMC as the buyer of the property. Later that
same day, Quality issued a corrected trustee’s deed upon sale that accurately named FV-1
as the buyer. The corrected trustee’s deed prominently stated that “This document is
being recorded to correct the Beneficiary name on that Trustee’s Deed upon sale that
recorded on 03/23/07, as instrument No. 2007-0015834.”
On January 22, 2009, WMC executed a quitclaim deed releasing any interest it
had in the Manzanita Road Property to FV-1. The quitclaim deed prominently stated that
it was issued “IN ORDER TO CORRECT THE GRANTEE NAMED IN THE [incorrect]
TRUSTEE’S DEED UPON SALE RECORDED ON 03/23/2007 . . . .” The quitclaim
deed was recorded on February 14, 2009.
On August 4, 2009, FV-1 prevailed in an unlawful detainer action against plaintiff.
On March 10, 2010, FV-1 sold the Manzanita Road property to Paul and Mary Zehr. On
February 18, 2011, the Zehrs sold the property to Tsegerada Embaye.
On April 22, 2010, MERS as nominee for WMC recorded a “Substitution of
Trustee and Full Reconveyance” substituting Nationwide Title Clearing as the trustee and
releasing plaintiff’s deed of trust as “fully paid and/or satisfied.”
Plaintiff initiated this action on October 7, 2010 with the filing of a document
captioned “Petition to Rescind Trustee’s Deed Upon Sale.” The petition named WMC as
the sole defendant. It alleged that plaintiff obtained a loan from WMC in 2005, that “the
4
loan was paid in full,” and that a “‘Full Reconveyance’” was recorded on April 22, 2010.
It alleged that “no payment was ever made” at the trustee’s sale reflected in the March
16, 2007 trustee deed upon sale and “no payment was made by FV-1 to WMC” for
WMC’s February 13, 2007 assignment of the deed of trust to FV-1. The theory of the
petition was that “[s]ale is automatically [r]escinded” for failure of consideration. The
petition sought rescission of the assignment of the deed of trust and of the original and
corrected trustee’s deeds upon sale. It also asked that plaintiff “be granted QUIET
TITLE and Right of Possession” to the property.
On February 24, 2014, plaintiff filed a first amended complaint that added Quality
as a defendant. WMC and Quality demurred. The record does not include copies of the
first amended complaint or of the demurrer papers but the hearing transcript indicates that
the court sustained the demurrers to plaintiff’s “monetary relief,” fraud, “cancellation of
false documents,” and quiet title causes of action without leave to amend. The court
sustained the demurrers to plaintiff’s declaratory relief cause of action with leave to
amend “if you can.”
Plaintiff filed an 18-page second amended complaint (the complaint) with 75
pages of exhibits. The complaint purported to assert a single cause of action for
“Declaratory Relief of invalid documents.” The gravamen of the complaint was that
“[t]he QUITCLAIM DEED dated 02/04/2009 recorded in error by WMC MORTGAGE
if left outstanding may cause serious injury or loss of property to Plaintiff.” The
complaint alleged that WMC could not quitclaim any interest in the property to FV-1
because WMC sold plaintiff’s loan to Morgan Stanley on August 30, 2006. The
complaint also alleged that plaintiff’s loan was never in default but had instead been
“paid in full” as evidenced by the substitution of trustee and full reconveyance that
Nationwide Title Clearing recorded on April 22, 2010. It alleged that Quality had no
authority to conduct the sale because Quality was “never the trustee and no
ASSIGNMENT OF TRUSTEE exist[s] in the SANTA CRUZ RECORDER records.” It
5
also alleged that no notice of default or notice of trustee’s sale was ever sent to plaintiff.
The complaint sought “an official declaration of the status of the documents in
controversy” and prayed for a declaration (1) “invalidating defendant’s [sic] claim of said
property,” (2) declaring “all documents” recorded against the property by WMC and
Quality invalid, and (3) declaring “that Plaintiff has satisfied the loan by [WMC], and
that possession of property be given to plaintiff.”
WMC and Quality again demurred. Quality argued among other things that
plaintiff’s claim was time-barred. WMC argued among other things that the complaint
failed to allege the existence of an “actual controversy” and thus failed to allege facts
sufficient to constitute a cause of action. (Code Civ. Proc., § 1060.)2
Plaintiff argued in opposition to the demurrers that the Penal Code allows actions
for falsification of documents to be brought at any time and that the trial court was
required to “take as true all allegations” of the second amended complaint. WMC and
Quality submitted reply briefs. The trial court conducted a hearing on
September 18, 2014. The transcript of the hearing is not included in the record on appeal.
The trial court sustained the demurrers without leave to amend and dismissed
plaintiff’s action with prejudice.
Plaintiff filed a timely notice of appeal from the judgments of dismissal. One day
later, he filed an ex parte application for a temporary stay of enforcement of the
judgments “to allow plaintiff time to consider filing posttrial motions and a notice of
appeal, and to evaluate the proceedings and consult with his attorney.” The trial court
denied the application.
2
Subsequent statutory references are to the Code of Civil Procedure unless
otherwise specified.
6
II. Discussion
A. Standard of Review
Plaintiff complains that the trial court “improperly determined issues of fact
without a trial or review of the documents in controversy” and “erred in finding there
were no triable issues of material fact . . . .” Plaintiff misunderstands the applicable
standard of review.
“In reviewing the sufficiency of a complaint against a general demurrer, we are
guided by long-settled rules. ‘We treat the demurrer as admitting all material facts
properly pleaded, but not contentions, deductions or conclusions of fact or law.
[Citation.]’ ” (Blank, supra, 39 Cal.3d at p. 318.) “[F]acts appearing in exhibits attached
to the complaint will also be accepted as true and, if contrary to the allegations in the
pleading, will be given precedence.” (Dodd, supra, 222 Cal.App.3d at p. 1627.) We also
consider matters which may be judicially noticed. (Alfaro v. Community Housing
Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1371
(Alfaro).) “[A]ssertions contradicted by judicially noticeable facts” will not be accepted
as true. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 20.) “[W]e give the complaint a
reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]”
(Blank, at p. 318.) “‘Specific factual allegations modify and limit inconsistent general
statements.’ [Citation.]” (Alfaro, at p. 1371.)
We “review the complaint de novo to determine . . . whether or not the trial court
erroneously sustained the demurrer as a matter of law. [Citation.]” (Cantu v. Resolution
Trust Corp. (1992) 4 Cal.App.4th 857, 879.) “We will affirm if there is any ground on
which the demurrer can properly be sustained, whether or not the trial court relied on
proper grounds or the defendant asserted a proper ground in the trial court proceedings.”
(Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031.) “If a
complaint shows on its face (or from matters of which the court must or may take judicial
notice . . .) that a cause of action is barred by the statute of limitations, a general demurrer
7
for failure to state a cause of action will be sustained.” (Hawkins v. Pacific Coast Bldg.
Products, Inc. (2004) 124 Cal.App.4th 1497, 1502.) On appeal, “‘the plaintiff bears the
burden of demonstrating that the trial court erred.’ [Citation.]” (Zipperer v. County of
Santa Clara (2005) 133 Cal.App.4th 1013, 1020.)
When a demurrer is sustained without leave to amend, “we decide whether there is
a reasonable possibility that the defect can be cured by amendment: if it can be, the trial
court has abused its discretion and we reverse; if not, there has been no abuse of
discretion and we affirm.” (Blank, supra, 39 Cal.3d at p. 318.) “The burden of proving
such reasonable possibility is squarely on the plaintiff.” (Ibid.) “Plaintiff must show in
what manner he can amend his complaint and how that amendment will change the legal
effect of the pleading.” (Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636 (Cooper).)
The showing need not be made in the trial court so long as it is made to the reviewing
court. (Dey v. Continental Central Credit (2008) 170 Cal.App.4th 721, 731; § 472c.)
B. Quality’s Demurrer
Quality contends that its demurrer was properly sustained without leave to amend
because plaintiff’s declaratory relief cause of action was time-barred by section 343, the
so-called catchall statute that prescribes a four-year limitations period for actions seeking
“relief not hereinbefore provided . . . .” (§ 343.) Plaintiff responds that the three-year
statute of limitations prescribed by section 338, subdivision (d) for actions grounded on
fraud or mistake applies. We agree with Quality.
“To determine the statute of limitations which applies to a cause of action it is
necessary to identify the nature of the cause of action, i.e., the ‘gravamen’ of the cause of
action. [Citations.] ‘[T]he nature of the right sued upon and not the form of action nor
the relief demanded determines the applicability of the statute of limitations under our
code.’ [Citation.]” (Hensler v. City of Glendale (1994) 8 Cal.4th 1, 22-23.) Here, the
gravamen of plaintiff’s action was that “[t]he QUITCLAIM DEED dated 02/04/2009
8
recorded in error by WMC MORTGAGE if left outstanding may cause serious injury or
loss of property to Plaintiff.” Plaintiff alleged that he was “unable to obtain possession,
refinance, rent, or sell the property since loss of possession on 08/04/2009 when [WMC]
transferred title” to the property to FV-1. Accordingly, he sought a declaration that “all
documents” recorded against the property were invalid. In similar actions involving
allegedly improper transfers of or restrictions on property, courts have applied section
343’s four-year statute of limitations. (E.g., Moss v. Moss (1942) 20 Cal.2d 640, 643-645
[action for declaration that property settlement agreement was void as against public
policy]; Dunn v. County of Los Angeles (1957) 155 Cal.App.2d 789, 798 [action for
declaration that transfer was “invalid for it was obtained by . . . coercion”], 805 [action
for declaration that deed allegedly procured by coercion was invalid]; Costa Serena
Owners Coalition v. Costa Serena Architectural Com. (2009) 175 Cal.App.4th 1175,
1195 [homeowners’ action for declaration that architectural committee’s amendments to
declaration of restrictions were invalid] (Costa Serena).) We conclude that section 343
governs here.
“‘As a general rule, a statute of limitations accrues when the act occurs which
gives rise to the claim [citation], that is, when “the plaintiff sustains actual and
appreciable harm.”’ ” (Costa Serena, supra, 175 Cal.App.4th at pp. 1195-1196.) Here,
the only acts by Quality that plaintiff claims caused him harm were its allegedly
unauthorized recording of the notice of default and notice of trustee’s sale and its conduct
of the sale itself. Quality performed those acts in 2006 and 2007. The four-year statute
of limitations thus expired no later than mid-2011. Plaintiff did not file suit against
Quality until February 2014. His action was time-barred. (§ 343.)
We reject plaintiff’s contention that the three-year limitations period for actions
grounded on fraud or mistake applies. (§ 338, subd. (d).) Fraud must be pleaded with
specificity, “‘and the policy of liberal construction of the pleadings . . . will not ordinarily
be invoked to sustain a pleading defective in any material respect.’ [Citations.]”
9
(Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
216.) Plaintiff did not plead any facts suggesting fraud. The record supports a
conclusion that he cannot do so, since the trial court sustained Quality’s demurrer to the
fraud cause of action in plaintiff’s first amended complaint without leave to amend
because “there are time-barred considerations.” Plaintiff has not challenged that ruling.
Plaintiff’s complaint did not state any facts suggesting mistake either. Even if it
had, a cause of action premised on allegations that the foreclosure sale was conducted
because of mistake would be barred under the three-year statute of limitations that
plaintiff maintains applies here.
That statute provides that a cause of action for relief on the ground of fraud or
mistake “is not deemed to have accrued until the discovery, by the aggrieved party, of the
facts constituting the fraud or mistake.” (§ 338, subd. (d).) “A cause of action for fraud
or mistake accrues, and the limitations period commences to run, when the aggrieved
party could have discovered the fraud or mistake through the exercise of reasonable
diligence.” (Sun’n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671, 701
(Sun’n Sand).) “Under the discovery rule, the statute of limitations begins to run when
the plaintiff suspects or should suspect that [his] injury was caused by wrongdoing, that
someone has done something wrong to [him].” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d
1103, 1110 (Jolly).)
In his reply brief, plaintiff admits that he became “aware of the numerous false
documents recorded by WMC and Quality” when he received the unlawful detainer
action that WMC filed on June 7, 2007. The allegations of the complaint compel the
conclusion that plaintiff should have suspected no later than August 4, 2009 (when FV-1
prevailed in its unlawful detainer against him and he lost possession of the property even
though he insisted that “[t]he loan was not in default”) that his injury was caused by the
alleged fraud or mistake. Thus, the statute of limitations began to run no later than
August 4, 2009. (Sun’n Sand, supra, 21 Cal.3d at p. 701; Jolly, supra, 44 Cal.3d at
10
pp. 1110-1111.) Plaintiff did not sue Quality until February 24, 2014. His suit against
Quality was time-barred even under the three-year statute of limitations that he contends
applies. (§ 338, subd. (d).)
Plaintiff argues that the statute did not begin to run until November 2013, when he
obtained evidence establishing Quality’s alleged wrongdoing. We reject the argument.
The issue is not when he obtained evidence to support his cause of action but when the
cause of action accrued. (Sun’n Sand, supra, 21 Cal.3d at p. 701.) “A plaintiff need not
be aware of the specific ‘facts’ necessary to establish the claim; that is a process
contemplated by pretrial discovery.” (Jolly, supra, 44 Cal.3d at p. 1111.) “[A] suspicion
of wrongdoing, coupled with a knowledge of the harm and its cause, will commence the
limitations period.” (Jolly, at p. 1112.) Plaintiff admits that he had that knowledge as
early as June 2007. The complaint demonstrates that he had that knowledge no later than
August 2009. His action against Quality was time-barred.
Plaintiff argues for the first time in his reply brief on appeal that his action against
Quality was well within the statute of limitations because his first amended complaint
adding Quality as a defendant related back to the October 7, 2010 filing of his original
pleading. We deem this argument waived. Appellate courts ordinarily do not consider
new issues raised for the first time in an appellant’s reply brief because to do so “‘would
deprive the respondent of an opportunity to counter the argument.’ [Citation.] ‘Obvious
reasons of fairness militate against consideration of an issue raised initially in the reply
brief of an appellant.’ [Citation.]” (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754,
764 (Reichardt).) “‘“Hence the rule is that points raised in the reply brief for the first
time will not be considered, unless good reason is shown for failure to present them
before.”’ [Citation.] [¶] . . . [T]he court may properly consider them as waived . . . .”
(Id. at pp. 764-765.) Plaintiff offers no explanation here. He waived his relation-back
argument.
11
We would reject the argument even if plaintiff had preserved it. “The
straightforward rule is that amendment after the statute of limitations has run will not be
permitted when the result is the addition of a party who, up to the time of the proposed
amendment, was neither a named nor a fictitiously designated party to the proceeding.”
(Ingram v. Superior Court (1979) 98 Cal.App.3d 483, 492.) Plaintiff’s original pleading
did not name any fictitious defendants who could later be brought in under their true
names. WMC was the sole defendant. Thus, plaintiff’s first amended complaint adding
Quality as a defendant did not relate back to the October 7, 2010 filing of his original
pleading.
The cases that plaintiff relies on do not change our conclusion. Those cases are
easily distinguished because each involved an amended pleading that brought a defendant
originally sued under a fictitious name into the case. (Austin v. Massachusetts Bonding &
Ins. Co. (1961) 56 Cal.2d 596, 599; Barnes v. Wilson (1974) 40 Cal.App.3d 199, 201-
202; Smeltzley v. Nicholson Mfg. Co. (1977) 18 Cal.3d. 932, 934-935; Barrows v.
American Motors Corp. (1983) 144 Cal.App.3d 1, 6-7.)
Plaintiff argues for the first time in his reply brief on appeal that he is entitled to
equitable estoppel under cases holding that a defendant may be estopped from asserting
the statute of limitations where its fraudulent conduct has induced the plaintiff to delay
filing suit. We deem this argument waived. (Reichardt, supra, 52 Cal.App.4th at
pp. 764-765.)
Because plaintiff’s action against Quality was barred by the statute of limitations,
the trial court did not err in sustaining Quality’s demurrer. Because plaintiff has not
explained how he can amend his complaint to avoid the bar of the statute of limitations,
the trial court did not abuse its discretion in sustaining the demurrer without leave to
amend.3
(Cooper, supra, 70 Cal.2d at p. 636.)
3 Our conclusion means that we need not reach Quality’s additional arguments that
the demurrer was properly sustained because the complaint failed to join indispensable
12
C. WMC’s Demurrer
1. Plaintiff’s Self-Representation
WMC contends that plaintiff’s failure to comply with basic rules of appellate
practice “should be reason enough to affirm the judgment.” WMC correctly points out
that plaintiff’s “arguments are presented scatter-shot, without headings and without
sufficient references to the record or supporting authority.”
We agree that plaintiff’s in propria persona status does not entitle him to lenient
treatment. A self-represented party “‘is to be treated like any other party . . . .’” (Nwosu
v. Uba (2004) 122 Cal.App.4th 1229, 1246-1247.) The rationale for this rule is that “[a]
doctrine generally requiring or permitting exceptional treatment of parties who represent
themselves would lead to a quagmire in the trial courts, and would be unfair to the other
parties to litigation.” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 985.) Thus, whether
a party is represented by counsel or self-represented, “this court is under no obligation to
search the record in an effort to ascertain a sound legal reason either for reversal of the
judgment, or the order in question.” (People v. Gidney (1937) 10 Cal.2d 138, 142-143,
disapproved on another point in People v. Hutchinson (1969) 71 Cal.2d 342, 347.) “Mere
suggestions of error without supporting argument or authority other than general abstract
principles do not properly present grounds for appellate review.” (Department of
Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100
Cal.App.4th 1066, 1078.) “We may treat arguments not properly presented as forfeited.”
(Foster v. Britton (2015) 242 Cal.App.4th 920, 928, fn. 6 (Foster).) As did the court in
Foster, we shall respond in the interest of justice to plaintiff’s legal arguments as we
parties, failed to allege an “actual controversy” between plaintiff and Quality (§ 1060),
failed to allege facts showing any prejudicial irregularity in the foreclosure process, and
failed to allege facts sufficient to overcome the qualified statutory privileges conferred on
trustees like Quality. (Civ. Code, §§ 47, 2924.)
13
understand them; “however, to the extent we fail to address a point made in the opening
brief, the issue is treated as forfeited.” (Ibid.)
2. Actual Controversy
WMC contends that the trial court properly sustained WMC’s demurrer because
plaintiff did not properly plead or show how he could plead facts entitling him to
declaratory relief. WMC specifically argues that plaintiff did not allege an actual
controversy.
“To state a cause of action for declaratory relief under section 1060 . . .
appropriate facts should be alleged from which the court may determine that an ‘actual
controversy relating to the legal rights and duties of the respective parties’ exists.” (City
of Alturas v. Gloster (1940) 16 Cal.2d 46, 48.) “[T]he ‘“actual, present controversy must
be pleaded specifically.”’ [Citation.] Thus, a claim must provide specific facts, as
opposed to conclusions of law, which show a ‘ “controversy of concrete actuality.” ’
[Citation.] Whether a claim presents an ‘“‘actual controversy’ within the meaning
of . . . section 1060 is a question of law that we review de novo.” [Citation.]’
[Citation.]” (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513-
514, disapproved on another ground in Yvanova v. New Century Mortg. Corp. (2016) 62
Cal.4th 919, 934, 939, fn. 13 (Yvanova).)
Here, plaintiff’s attempt to allege an actual controversy focused on the 2009
quitclaim deed that WMC recorded and the “serious injury or loss of property” he
allegedly suffered and would continue to suffer if that deed were left outstanding. WMC
maintains that plaintiff’s emphasis on the quitclaim deed is a red herring. We agree.
“‘A quitclaim deed transfers whatever present right or interest the grantor has in
the property. [Citation.]’” (City of Manhattan Beach v. Superior Court (1996) 13
Cal.4th 232, 239.) “A quitclaim deed only purports to release and quitclaim whatever
interest the grantor possesses at the time. [The grantor] does not thereby affirm the
14
possession of any title . . . .” (San Francisco v. Lawton (1861) 18 Cal. 465, 475-476 (San
Francisco).)
Plaintiff cannot premise his declaratory relief cause of action on the 2009
quitclaim deed. A reasonable reading of the complaint as a whole compels the
conclusion that the quitclaim deed could not and did not operate to deprive plaintiff of his
interest in the Manzanita Road property. Two reasons support this conclusion. First,
WMC had no interest in the property to convey in 2009 because it no longer owned
plaintiff’s loan. The complaint admits that WMC sold the loan to Morgan Stanley on
August 30, 2006. Second, plaintiff had no interest in the property to lose in 2009. He
lost all interest in the property two years earlier when FV-1 purchased it at the
March 15, 2007 trustee’s sale, as reflected in the trustee’s deed upon sale that plaintiff
attached as an exhibit to his complaint. Thus, the only effect of the 2009 quitclaim deed
was (as the document itself prominently proclaimed) “TO CORRECT THE GRANTEE
NAMED IN THE [incorrect] TRUSTEE’S DEED UPON SALE RECORDED ON
03/23/2007 . . . .” The quitclaim deed does not show an actual controversy between
plaintiff and WMC.
Plaintiff argues that WMC lacked authority to record the quitclaim deed in 2009
because it sold plaintiff’s loan to Morgan Stanley in 2006. Not so. A quitclaim deed
releases “whatever interest the grantor possesses at the time.” (San Francisco, supra, 18
Cal. at p. 475.) That WMC had no interest to release in 2009 does not mean it lacked
authority to record the quitclaim deed to correct the grantee named in the incorrect
trustee’s deed upon sale that Quality recorded in error. Plaintiff’s focus on the quitclaim
deed is misplaced.
Plaintiff’s attempt to premise his declaratory relief cause of action on the
substitution of trustee and full reconveyance that Nationwide Title Clearing recorded on
April 22, 2010, also fails. Plaintiff maintains and his complaint alleged that the
document showed that his loan was paid in full, that there was no foreclosure, and that
15
“[a]s of 04/22/2010 [he] is the true owner [of the property] free of all liens or mortgages.”
Plaintiff misunderstands the purpose of the recorded reconveyance.
“The sale of any property on which there is a lien, in satisfaction of the claim
secured thereby . . . extinguishes the lien thereon.” (Civ. Code, § 2910; see Cornelison v.
Kornbluth (1975) 15 Cal.3d 590, 606 (Cornelison).) After the obligation the deed of trust
secures has been satisfied, the trustor is entitled to a reconveyance of the deed of trust.
(Civ. Code, § 2941, subd. (b)(1).) The full reconveyance must be recorded. (Civ. Code,
§ 2941, subd. (b)(1)(A).) The purpose of these requirements is to provide trustors with
proof that the obligation has been satisfied and to “free them from the liability if the
original note was transferred to a bona fide purchaser for value.” (Huckell v. Matranga
(1979) 99 Cal.App.3d 471, 476.)
The March 15, 2007 trustee’s sale of the Manzanita Road property satisfied
plaintiff’s obligation under the note and extinguished the lien that secured that obligation.
(Civ. Code, § 2910; see Cornelison, supra, 15 Cal.3d at p. 606.) Plaintiff was therefore
entitled to a reconveyance of his deed of trust. (Civ. Code, § 2941, subd. (b)(1).) The
recorded document reflects the extinguishment of the obligation that the deed of trust
secured and the release of the lien. It does not reflect a reconveyance to plaintiff of title
to the property. Thus, it does not show an actual controversy over ownership of the
property.
The adjustable rate recalculation form letters that plaintiff allegedly received from
new loan servicers America’s Servicing Company and Saxon Mortgage Services, Inc.
(Saxon) in May and November 2007 and thereafter do not show an actual controversy on
which plaintiff can premise his declaratory relief cause of action either. Those letters
were not sent by or on behalf of WMC. The complaint admitted that WMC “sold the
loan and had no interest after 08/30/2006.” The sale of the loan occurred before the
property was sold in foreclosure and long before any of the letters was sent. Thus, the
16
letters cannot support plaintiff’s allegation that an actual controversy existed in that
WMC claimed his loan was in default and he claimed it was current.
The “Short-Year History Statement” that plaintiff apparently obtained from Saxon
in 2010 does not show an actual controversy between plaintiff and WMC. Plaintiff
asserts and the complaint alleged that the document reflected a $40,336.63 payment to
Saxon in March of 2008 “which was placed in an escrow account to make the monthly
payments.” Elsewhere in his complaint plaintiff vaguely alleged that “an overpayment
was put into an escrow account which was used to over pay the loan with plaintiff [sic]
over payments being made up to September 2011” and that he was “unable to get refund
of over payment . . . .” To the extent these sparse allegations suggest any controversy,
they do not suggest a controversy between plaintiff and WMC because the complaint
admitted that WMC sold plaintiff’s loan in 2006. Plaintiff’s failure to allege an actual
controversy is fatal to his declaratory relief cause of action.
Plaintiff argues that a demurrer is a procedurally inappropriate method for
disposing of a complaint for declaratory relief. His reliance on Lockheed Martin Corp. v.
Continental Ins. Co. (2005) 134 Cal.App.4th 187, 221 (Lockheed), disapproved on
another ground in State of California v. Allstate Ins. Co. (2009) 45 Cal.4th 1008, 1036 is
misplaced. Lockheed stands for the proposition that a defendant “‘cannot, on demurrer,
attack the merits of the plaintiff’s claim. The complaint is sufficient if it shows an actual
controversy; it need not show that plaintiff is in the right.’” (Lockheed, at p. 221.) Here,
we have determined that plaintiff failed to plead facts showing the existence of an actual
controversy. Lockheed does not advance his position.
3. Alleged Deficiencies in the Foreclosure Process
Plaintiff argues and the complaint alleged that the challenged instruments should
be cancelled because the foreclosure process did not satisfy the requirements of the
foreclosure statutes, his loan was not in default, and no trustee’s sale was ever conducted.
WMC responds that these allegations need not be taken as true because they are contrary
17
to facts stated in recorded instruments that plaintiff attached as exhibits to his complaint.
We agree with WMC.
On appeal from the sustaining of a demurrer “facts appearing in exhibits attached
to the complaint will . . . be accepted as true and, if contrary to the allegations in the
pleading, will be given precedence.” (Dodd, supra, 222 Cal.App.3d at p. 1627.) Here,
plaintiff alleged that WMC initiated the foreclosure process when his loan was not in
default. That allegation was contrary to facts appearing in the recorded notice of default
and notice of trustee’s sale that plaintiff attached as exhibits to his complaint. His
allegation that he was never served with the notice of default or notice of trustee’s sale
was contrary to facts appearing in the recorded trustee’s deed upon sale, which recited
that the trustee “complied with all statutory requirements . . . and performed all duties
required by the Deed of Trust including sending a Notice of Default and Election to
Sell . . . and a Notice of Sale . . . .” His allegation that no trustee’s sale was ever
conducted was contrary to facts appearing in the recorded trustee’s deed upon sale that he
attached to his complaint. Thus, we need not accept those allegations as true. (Dodd, at
p. 1627.) Without them, the complaint does not plead facts showing a failure to satisfy
the requirements of the foreclosure statutes.
Plaintiff argues that WMC sold the note on July 12, 2006, and thus “had no
standing or authorization to . . . record the foreclosure documents in controversy.” The
argument lacks merit. Plaintiff’s assertion that WMC sold the note on July 12, 2006,
contradicts the complaint’s repeated allegations that WMC sold the note on August 30,
2006. Documents that plaintiff attached as exhibits to the complaint, including the
MERS “Milestone Report” on which he relies, support the August 30, 2006 sale date
allegations. The notice of default was recorded on May 15, 2006, by Quality “as agent
for . . . the beneficiary” WMC under the deed of trust. The notice of trustee’s sale was
recorded by Quality on August 18, 2006, immediately after the recording of the
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substitution of trustee that replaced Westwood Associates with Quality. These dates
precede WMC’s sale of the loan.
Plaintiff also argues that WMC had no authority to record the trustee’s deeds upon
sale, the assignment of the deed of trust to FV-1, and the quitclaim deed. The argument
does not advance his position. The trustee’s deed upon sale that incorrectly named WMC
as the buyer was executed and recorded in error by Quality. Plaintiff has not called our
attention to, nor have we found, anything in the record suggesting that WMC was
involved in the preparation or recording of that document. The corrected trustee’s deed
upon sale that named FV-1 as the buyer was also recorded by Quality. Again, plaintiff
has not called our attention to, nor have we found, anything in the record suggesting that
WMC was involved in the preparation or recording of that document.
WMC recorded an assignment of the deed of trust to FV-1 on April 6, 2007. That
this occurred after WMC sold plaintiff’s loan to Morgan Stanley is irrelevant here for two
reasons. First, the assignment of a deed of trust need not be recorded. (Calvo v. HSBC
Bank USA, N.A. (2011) 199 Cal.App.4th 118, 121-122.) Second and more importantly, a
deed of trust “is inseparable from the note it secures, and follows it even without a
separate assignment.” (Yvanova, supra, 62 Cal.4th at p. 927.) WMC’s August 30, 2006
sale of the loan to Morgan Stanley included the transfer of plaintiff’s deed of trust.
Plaintiff’s complaint does not plead facts showing that WMC lacked authority to record
the challenged documents.
We conclude that plaintiff’s complaint failed to allege facts constituting any cause
of action against WMC.4
Thus, the trial court did not err when it sustained WMC’s
demurrer.
4 Our conclusion means that we need not reach WMC’s additional arguments that
the demurrer was properly sustained because the complaint failed to join indispensable
parties and because the action was time-barred.
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4. Leave to Amend
Plaintiff asserts that the complaint “can be amended to show a cause of action.” A
laundry list of possible causes of action (including those the trial court rejected when it
sustained the demurrers to plaintiff’s first amended complaint without leave to amend)
follows. Plaintiff does not identify any new facts. He does not explain “in what manner
he can amend his complaint and how that amendment will change the legal effect of the
pleading.” (Cooper, supra, 70 Cal.2d at p. 636.) Thus, he has failed to satisfy his burden
of demonstrating a reasonable possibility that the defects in his current complaint can be
cured by amendment. (Blank, supra, 39 Cal.3d at p. 318.) The trial court did not err
when it sustained WMC’s demurrer without leave to amend. (Ibid.)
D. Denial of Plaintiff’s Ex Parte Application for Temporary Stay of Enforcement
Plaintiff complains that the trial court improperly denied his ex parte application
for a stay of enforcement “without a trial or review of documents.” The argument lacks
merit.
“[T]he trial court may stay the enforcement of any judgment or order.” (§ 918,
subd. (a).) “‘Ordinarily, the word “may” [in a statute] connotes a discretionary or
permissive act; the word “shall” connotes a mandatory or directory duty.’” (Wittenberg
v. Beachwalk Homeowners Assn. (2013) 217 Cal.App.4th 654, 667.) “Discretion is
abused in the legal sense ‘whenever it may be fairly said that in its exercise the court in a
given case exceeded the bounds of reason or contravened the uncontradicted evidence.’”
(Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 527 (Continental Baking).) There
was no abuse of discretion here.
Plaintiff cannot complain that the trial court denied his application “without a trial
or review of documents.” His application did not seek or even mention a trial or a review
of documents. Plaintiff sought a stay in part to allow himself “time to consider filing . . .
20
a notice of appeal . . . .” But he filed the application the day after he filed his notice of
appeal. Thus, he did not need time to consider whether to appeal.
Plaintiff also sought the stay to allow himself “time to consider filing posttrial
motions . . . and to evaluate the proceedings and consult with his attorney.” Neither in
the application nor in his briefs on appeal did he identify the posttrial motions he was
contemplating. Generally, “‘the perfecting of an appeal stays proceedings in the trial
court upon the judgment or order appealed from or upon the matters embraced therein or
affected thereby, including enforcement of the judgment or order, but the trial court may
proceed upon any other matter embraced in the action and not affected by the judgment
or order.’ (§ 916, subd. (a).) The purpose of the automatic stay provision of section 916,
subdivision (a) ‘is to protect the appellate court’s jurisdiction by preserving the status quo
until the appeal is decided. The [automatic stay] prevents the trial court from rendering
an appeal futile by altering the appealed judgment or order by conducting other
proceedings that may affect it.’ [Citation.]” (Varian Medical Systems, Inc. v. Delfino
(2005) 35 Cal.4th 180, 189, fn. omitted.) Here, where plaintiff failed to identify any
posttrial motions that the trial court could consider notwithstanding the stay of
proceedings in the trial court, we cannot say that the denial of his application exceeded
the bounds of reason. (Continental Baking, supra, 68 Cal.2d at p. 527.) On this record,
the denial of his application was not an abuse of discretion.
IV. Disposition
The judgments of dismissal are affirmed.
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___________________________
Mihara, J.
WE CONCUR:
_____________________________
Elia, Acting P. J.
_____________________________
Bamattre-Manoukian, J.
Coppage v. WMC Mortgage LLC, et al.
H041592
Description | Plaintiff Larry Coppage appeals from judgments of dismissal entered after the trial court sustained the demurrers of defendants WMC Mortgage LLC (WMC)1 and Quality Loan Service Corporation (Quality) to his second amended complaint for declaratory relief. He contends that the trial court (1) improperly sustained both demurrers, (2) abused its discretion in denying leave to amend, and (3) erred in denying his ex parte application for a stay of enforcement. We affirm |
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