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Smith v. JPMorgan Chase Bank CA3

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Smith v. JPMorgan Chase Bank CA3
By
04:24:2018

Filed 3/2/18 Smith v. JPMorgan Chase Bank CA3
NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
THIRD APPELLATE DISTRICT
(Sacramento)
----



BELINDA SMITH,

Plaintiff and Appellant,

v.

JPMORGAN CHASE BANK, N.A.,

Defendant and Respondent.
C077742

(Super. Ct. No. 34201000089981CUFRGDS)




Plaintiff Belinda Smith obtained two loans from Washington Mutual Bank, FA (Washington Mutual) to purchase a house. The loans were secured by the house. Subsequently, defendant JPMorgan Chase Bank, N.A. (JPMorgan) acquired assets and liabilities of Washington Mutual. Smith defaulted on her loans and JPMorgan initiated nonjudicial foreclosure proceedings and purchased the property at a trustee’s sale. Smith filed a complaint and an amended complaint against JPMorgan. The trial court sustained JPMorgan’s demurrer to the amended complaint without leave to amend. Smith appeals, arguing the trial court abused its discretion in sustaining the demurrer without leave to amend and in not taking judicial notice of certain documents. In addition, Smith contends she has a constitutionally guaranteed right to a jury trial on her complaint. We shall affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In April 2007 Smith obtained a loan of $908,000 from Washington Mutual, secured by a deed of trust recorded against her property. The deed of trust identified Smith as the borrower, Washington Mutual as the lender, and California Reconveyance Company as the trustee.
That same month, Smith received a second loan of $113,387 from Washington Mutual. This second loan was also secured by a deed of trust against Smith’s property, listing the same parties as borrow, lender, and trustee.
After Smith defaulted on the first loan, a notice of default was recorded on July 1, 2008. The notice of default stated the amount in arrears was $10,939.26. Approximately a month later an assignment of the first deed of trust was recorded in which Washington Mutual assigned its interest to LaSalle Bank, NA. A substitution of trustee was recorded substituting Quality Loan Service Corporation for California Reconveyance Company.
In October 2008 a notice of trustee sale was recorded, reflecting a sale on October 23, 2008. A trustee’s deed upon sale states JPMorgan purchased the property for $773,910.
Smith filed a complaint on October 21, 2010, stating fifteen causes of action against various defendants including JPMorgan and Washington Mutual. Smith alleged the defendants lacked standing to foreclose and failed to offer her a loan modification. JPMorgan filed a demurrer.
Smith’s counsel filed a motion to be relieved as counsel and filed an opposition to JPMorgan’s demurrer. In the opposition, counsel stated: “[D]ue to the lack of communication, counsel for Plaintiff is not in a position to be able to oppose the demurrer, and/or prepare an amended complaint, as counsel has no input from Plaintiff.” The trial court granted the motion to be relieved.
The court sustained JPMorgan’s demurrer with leave to amend. After Smith failed to file an amended complaint within the court’s deadline, JPMorgan filed a motion to dismiss. However, JPMorgan served the motion on Smith’s former counsel rather than Smith.
Subsequently, the trial court granted the motion to dismiss and entered judgment in favor of JPMorgan. Smith appealed and we reversed the judgment and remanded the case to the trial court to exercise its discretion as to whether to allow Smith to file an amended complaint.
The trial court granted Smith leave to file an amended complaint, and she filed an amended complaint. Smith alleged causes of action for wrongful foreclosure, civil conspiracy, quiet title, cancellation of an instrument, breach of the covenant of good faith and fair dealing, and wrongful eviction.
JPMorgan filed a demurrer to the amended complaint. JPMorgan asserted the sham pleading doctrine, arguing Smith’s amended complaint was based on the allegation that she had paid off both loans prior to the trustee’s sale. However, Smith’s original complaint failed to state this allegation.
Following oral argument, the trial court sustained JPMorgan’s demurrer without leave to amend. The trial court concluded the sham pleading doctrine barred the amended complaint. After the trial court entered judgment in favor of JPMorgan, Smith, proceeding in pro. per., filed a timely notice of appeal.
DISCUSSION
I
The function of a demurrer is to test the sufficiency of the complaint by raising questions of law. We give the complaint a reasonable interpretation and read it as a whole with its parts considered in their context. A general demurrer admits the truth of all material factual allegations. We are not concerned with the plaintiff’s ability to prove the allegations or with any possible difficulties in making such proof. We are not bound by the construction placed by the trial court on the pleadings; instead, we make our own independent judgment. (Herman v. Los Angeles County Metropolitan Transportation Authority (1999) 71 Cal.App.4th 819, 824.)
When the trial court sustains the demurrer without leave to amend, we must decide whether there is a reasonable possibility the plaintiff can cure the defect with an amendment. If we find that an amendment could cure the defect, we must find the court abused its discretion and reverse. If not, the court has not abused its discretion. The plaintiff bears the burden of proving an amendment would cure the defect. (Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1153.)
The rules of appellate procedure apply to Smith even though she is representing herself on appeal. (Leslie v. Board of Medical Quality Assurance (1991) 234 Cal.App.3d 117, 121.) A party may choose to act as his or her own attorney. We treat such a party like any other party, and he or she “ ‘is entitled to the same, but no greater consideration than other litigants and attorneys. [Citation.]’ ” (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1247.)
II
In sustaining JPMorgan’s demurrer without leave to amend, the trial court found Smith’s original complaint was premised on the theory that JPMorgan lacked standing to foreclose and failed to offer a loan modification. In contrast, Smith’s amended complaint “is now premised on the allegations that the subject foreclosure was wrongful because the loans at issue were paid in full.”
The sham pleading doctrine prevents a plaintiff from attempting to breathe life into a complaint by omitting relevant facts from an amended complaint that made the plaintiff’s previous complaint defective. However, the doctrine is not intended to prevent a plaintiff from correcting erroneous allegations or clarifying ambiguous facts. Instead, the doctrine seeks to enable courts to prevent an abuse of process. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 426 (Deveny); Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 946.)
Under the sham pleading doctrine, a plaintiff cannot avoid allegations that are determinative to a cause of action simply by filing an amended complaint which omits the problematic facts or pleads facts inconsistent with those alleged in the original complaint. This doctrine precludes a plaintiff from amending a complaint to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers. Instead, the plaintiff must satisfactorily explain such an omission. Failure to provide such an explanation allows the court to disregard the inconsistent allegations and read into the amended complaint the allegations of the superseded complaint. (Deveny, supra, 139 Cal.App.4th at pp. 425-426.)
In her original complaint, Smith’s causes of action were based on her contention that JPMorgan is “not the holder[ ] or assignee[ ] of the original debt . . . [and] did not have the right to cause the foreclosure and non-judicial sale of the Subject Property owned by Plaintiff on October 23, 2008.” The original complaint also alleged after Smith “fell behind on her mortgage, [JPMorgan] failed and refused to offer Plaintiff the promised loan assistance and instead commenced foreclosure proceedings against her.”
In contrast, all Smith’s causes of action in her amended complaint are based on the allegation that in “January 2008, Plaintiff made her last payment to Defendant Washington Mutual Bank closing out the written contract consistent [sic] of a promissory note and deed of trust on the subject property as all funds were forwarded to Washington Mutual to closed [sic] out the contract entered into on April 23, 2008. [¶] . . . Defendant Washington Mutual acknowledged full consideration of the contract executed with Plaintiff on the subject property by sending documents stamped PAID IN FULL.”
The trial court considered the conflicting allegations in the two complaints and disregarded the “inconsistent allegations in the F[irst] A[mended] C[omplaint] that the foreclosure was wrongful because the loan was paid in full.” As a result, the trial court sustained JPMorgan’s demurrer without leave to amend. We find no error in the trial court’s determination.
Nor does Smith provide a coherent explanation for her contradictory pleadings. Smith failed to file an opposition to JPMorgan’s demurrer. Smith also did not provide any explanation for the discrepancy between the two complaints in her amended complaint.
On appeal, Smith simply states: “Appellant had previously hired counsel to represent her interest in the case before the court. Appellant [sic] previous counsel has since been relieved. Appellant’s previous counsel made allegation [sic] pursuant to incomplete information at the inception of the lawsuit and was artful upon conclusions. As such Appellant’s pervious [sic] counsel upon the careful review of documents provided to counsel by Appellant along with discovery into the nature and structure of the Financial industry would have revised the complaint to reflect his better comprehension, volume and complexity of the issues involved.” However, Smith provides no explanation why she failed to correct this alleged mistake after filing the original complaint or why her counsel did not have this information in drafting the original complaint. Smith fails to provide a satisfactory explanation for the discrepancy between the original and amended complaint.
Nor do we find the trial court erred in denying Smith leave to amend. Smith failed to demonstrate a reasonable possibility that she could amend her complaint to cure the defect.
III
Smith also argues the trial court erred in taking judicial notice of items No. 1 through 8 of the defendants’ request for judicial notice. It is well established that “In determining the sufficiency of a complaint against demurrer a court will consider matters that may be judicially noticed.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) Smith objects that the documents judicially noticed here are “grounded in the dispute of a written contract” and the court “cannot determine based on only the four corners of the documents that the meanings of the documents are clear and unambiguous.”
Whatever the merit of Smith’s observations, the trial court qualified its review and did “not accept the truth of any facts within the judicially noticed documents except to the extent such facts are beyond reasonable dispute.” In so doing, the trial court’s ruling was well within its discretion and comported with well settled rules on judicial notice.
“ ‘Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.’ ” (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.) A court may take judicial notice of something that cannot reasonably be controverted, even if it negates an express allegation of the pleading. (Columbia Casualty Co. v. Northwestern Nat. Ins. Co. (1991) 231 Cal.App.3d 457, 468-469.) This includes recorded deeds. (Maryland Casualty Co. v. Reeder (1990) 221 Cal.App.3d 961, 977.)
“However, the fact a court may take judicial notice of a recorded deed, or similar document, does not mean it may take judicial notice of factual matters stated therein. (See Kilroy v. State of California (2004) 119 Cal.App.4th 140.)” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.)
Smith cites no authority beyond statutes and general principles that are consistent with the trial court’s ruling. We find no error.
IV
Finally, Smith contends she did not waive or forfeit her right to a jury trial and therefore the judgment should be reversed. However, Smith fails to provide any legal or statutory support for this assertion. It is well settled that while factual issues are subject to the jury trial guarantee, issues of law can be determined by the court; the right to trial by jury does not pertain. (Stofer v. Shapell Industries, Inc. (2015) 233 Cal.App.4th 176, 179, 188-189.) Under Code of Civil Procedure section 430.10, the party against whom a complaint is filed may object by demurrer and the court may sustain the demurrer as a matter of law. This is what happened in the present case and we find no error.
DISPOSITION
The judgment is affirmed. JPMorgan shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)



RAYE , P. J.



We concur:



MAURO , J.



RENNER , J.





Description Plaintiff Belinda Smith obtained two loans from Washington Mutual Bank, FA (Washington Mutual) to purchase a house. The loans were secured by the house. Subsequently, defendant JPMorgan Chase Bank, N.A. (JPMorgan) acquired assets and liabilities of Washington Mutual. Smith defaulted on her loans and JPMorgan initiated nonjudicial foreclosure proceedings and purchased the property at a trustee’s sale. Smith filed a complaint and an amended complaint against JPMorgan. The trial court sustained JPMorgan’s demurrer to the amended complaint without leave to amend. Smith appeals, arguing the trial court abused its discretion in sustaining the demurrer without leave to amend and in not taking judicial notice of certain documents. In addition, Smith contends she has a constitutionally guaranteed right to a jury trial on her complaint. We shall affirm the judgment.
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