Williams v. Novastar Home Mortgage
Filed 8/14/13 Williams v. Novastar Home Mortgage CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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
SECOND APPELLATE
DISTRICT
DIVISION EIGHT
ELENORE A. WILLIAMS,
Plaintiff
and Appellant,
v.
NOVASTAR HOME MORTGAGE, INC., et al.,
Defendants
and Respondents.
B232620
(Los
Angeles County
Super. Ct.
No. BC 401442)
ELENORE A. WILLIAMS,
Plaintiff
and Appellant,
v.
CHICAGO TITLE COMPANY,
Defendant
and Respondent.
B236026
(Los
Angeles County
Super. Ct.
No. BC 401442)
APPEAL
from judgments of the Superior Court
of
County, John Shepard Wiley, Judge. Affirmed.
Elenore A.
Williams, in pro. per., for Plaintiff and Appellant.
The
Dreyfuss Firm and Bruce W. Dannemeyer for Defendant and Respondent
NovaStar Home Mortgage, Inc.
McNulty
& Saacke and William C. Saacke for Defendants and Respondents Saxon
Mortgage Services, Inc., and BNY Mellon Performance & Risk Analytics, Inc.
Garrett
& Tully, Ryan C. Squire and Alia S. Haddad for Defendant and
Respondent Chicago Title Company.
* * * * * *
Appellant
Elenore A. Williams filed her original complaint, in pro. per., on November 6,
2008, against Danny Tartabull, John S. San Nicolas, Theresa San Nicolas,
Centurion Capital, LLC and a number of Does.
The gravamen of the complaint was that appellant had been fraudulently
deprived of her home located at 3974 Dublin Avenue,
Los Angeles. Demurrers to this complaint were sustained
and six more complaints followed; parties were added along the way.
This
opinion addresses three separate appeals that we will refer to by the
respondents’ names. They are the Chicago
Title Company appeal (Chicago Title), the Saxon Mortgage Services, Inc., appeal
(Saxon) and the NovaStar Home Mortgage, Inc., appeal (NovaStar). We have consolidated these appeals on our own
motion for purposes of oral argument and the opinion and decision.
The
Chicago Title appeal, while without merit, is the most substantial. Accordingly, we take it up first and, in
doing so, provide the larger background for these three appeals. Discussion of the Saxon and NovaStar appeals
follow. We find no merit in any of these
three appeals and therefore affirm the judgments.
THE
Respondent
Chicago Title was added as a defendant in the
demurrer to the seventh amended complaint without leave to amend. This appeal followed. We affirm.
We
note initially that the trial court sustained the demurrer to the seventh
amended complaint without leave to amend on September 7, 2011, and that appellant filed her notice of
appeal on September 15, 2011. The “order of dismissal†was entered on December 21, 2011. Rule 8.104(d)(2) of the California Rules of
Court empowers us to treat the premature notice of appeal as filed immediately
after the entry of judgment, which was December 21,
2011.
FACTS
Appellant was persuaded by Danny
Tartabull to transfer title to her home to John S. San Nicolas, who in
turn obtained a mortgage from Centurion Capital Solutions, LLC
(Centurion). (According to the later
complaints, the actual lender was NovaStar.)
Appellant was told that she could buy the property back from
John S. San Nicolas and Centurion in 18 months. Appellant now commenced to make monthly
payments to Centurion under a lease-option, buy back, program. After two and a half years, the loan went
into default and the lender foreclosed.
Chicago
Title’s role in this was to act as escrow agent in the original transaction
between appellant, on the one hand, and John S. San Nicolas and Centurion,
on the other. According to appellant’s
theory of the case, Chicago Title was part of the conspiracy woven by
Tartabull, John S. San Nicolas, Centurion and others, who need not be
named here to deprive appellant of her home.
What
turned out to be decisive for the trial court was that appellant’s original
complaint alleged that appellant voluntarily transferred title to her property
to John S. San Nicolas while the seventh amended complaint alleged that
all that appellant agreed to do was to add John S. San Nicolas to the
title for purposes of financing.
Instead, the papers that were drawn transferred title to John S.
San Nicolas and divested appellant of ownership, which is how Chicago Title
became allegedly liable as escrow agent.
The trial court relied on the “sham pleadings†rule that prevents
parties from ignoring allegations of prior pleadings that are fatal to
pleadings that are filed later. (E.g.,
746, 768-769.)
Complaint
A
demurrer admits all material and issuable facts properly pleaded. (McHugh
v. Howard (1958) 165 Cal.App.2d 169, 174.)
The facts surrounding appellant’s decision to convey her home to
John S. San Nicolas are set forth unambiguously in the original complaint.
On
or about April 25, 2005,
appellant met with Tartabull, a Centurion representative, who told her that
Centurion could save her home from foreclosure.
Tartabull told appellant that Centurion could refinance the home and
stop Countywide Mortgage from foreclosing.
“Defendant [Tartabull] told plaintiff that to save her home, she would
have to transfer the title deed of her home to defendant John S.
San-Nicolas & equity buyer [Centurion].
Then the plaintiff was told that her mortgage payments would go down
from $3600 per month to $2989 per month in a lease-option buy-back contract.â€
After
stating that appellant was told that she had 18 months to “purchase her home
back from [Centurion] and John S. San-Nicolas for the amount of $585,000,â€
the complaint alleges that on “July 8, 2005 Chicago Title closed escrow on
plaintiff’s property.†No other
allegations are made about Chicago Title and about the escrow process.
Amended Complaint
In
this complaint, Tartabull and Centurion appear as brokers and agents of
NovaStar, who is also named as a defendant.
The lender in this complaint is NovaStar. Appellant is a “co-borrower†of the NovaStar
loan. The role of John S. San
Nicolas is not entirely clear. He is
described as a “straw-buyer†as well as the borrower under the NovaStar loan. However, the complaint also alleges that
appellant was told to “add†John S. San Nicolas “to her deed because his
strong credit could help Plaintiff get a refinance loan for her home to stop
foreclosure. Plaintiff was under duress
and did not understand that she was transferring her rights and interest in her
property to JOHN S. SAN-NICOLAS.â€
The gist of this seems to be that appellant was told that she and
John S. San Nicolas were both on the loan as borrowers but, without
knowing what she was doing, she actually transferred her home to John S.
San Nicolas.
Appellant
started making payments to Theresa San Nicolas, who is married to Tartabull.
This
complaint generally alleges that Chicago Title was part of a conspiracy
comprised of Tartabull, John and Theresa San Nicolas, and Centurion to defraud
home owners of their property.
Specifically, the complaint alleges that Amy Ausman, an escrow agent
working for Chicago Title, “forged plaintiff’s name on escrow documents†and
allowed a stranger to the escrow to deposit the down payment, which was
returned to that person upon the close of escrow. Ausman is also charged with committing other
unspecified fraudulent acts.
DISCUSSION
If appellant
intended to convey her property to John S. San Nicolas, and Chicago Title
as the escrow agent assisted in bringing about that result, Chicago Title has
breached no duty it owed appellant. This
is why the critical fact, as far as appellant’s case against Chicago Title is
concerned, is whether appellant intended to convey her home to John S. San
Nicolas.
The
original complaint leaves no doubt that this is exactly what appellant
intended.
“For purposes of
a demurrer to an amended pleading an unexplained suppression of the original
destructive allegation will not, in the words of Lady MacBeth, wash out the
‘damned spot.’†(Blain v. Doctor’s Co. (1990) 222 Cal.App.3d 1048, 1058.) “The court, on demurrer, may examine the
original complaint, determine that the purpose of the amendment was not to
correct but to avoid the effect of a truthful and damaging allegation, and sustain
the demurrer.†(4 Witkin, Cal. Procedure
(5th ed. 2008) Pleading, § 458, pp. 589-590.)
The
question is whether appellant could appreciate and understand that selling or
transferring her home outright to John S. San Nicolas was different from
having John S. San Nicolas cosign on a mortgage loan. The answer is yes, as the critical fact, that
appellant intended to and did transfer ownership to John S. San Nicolas,
was one that is within the common experience of any homeowner. We do not hold that appellant necessarily had
to appreciate all the legal ramifications of the difference between a sale and
cosigning a note in order for the above-cited rule to apply. But, appellant, who was in pro. per. when she
filed the original complaint, could have said that all she agreed to do was to
have John S. San Nicolas cosign the loan, if that was what occurred.
Appellant
contends that the original complaint was unverified and that it was therefore
“not evidence.†She goes on to claim
that the fourth amended complaint, drafted by an attorney, was verified and
sets forth that all she intended was to have John S. San Nicolas
cosign. This argument boils down to the
request that we should ignore the original complaint. However, it has been held that even if the
original complaint containing the later-suppressed fact is unverified, the
demurrer should be sustained because what matters is that a fact destructive of
the claim has been suppressed, not that the original complaint was
unverified. (Reichert v. General Ins. Co. of America (1968) 68 Cal.2d 822, 836.)
Unfortunately
for appellant, her argument about the unverified/verified complaints goes too
far in that she points out that the attorney she retained to draft the fourth
amended complaint explained “the correct order of events,†i.e., that
John S. San Nicolas was not a buyer but a coborrower. This new theory did not change the operative
facts.
Appellant
also contends that the trial court erred in ruling that California’s “tender
rule†bars the cause of action to quiet tile.
agent is really not a party to the cause of action to quiet title. This really ends the matter as to Chicago
Title. We address the merits of
appellant’s argument on the tender issue in the Saxon appeal,
Possibly
the most damaging circumstance, in terms of the equities, is that after several
attempts appellant’s efforts to show that Chicago Title is liable cannot get
beyond vague generalities. That the
escrow agent “prepared multiple, conflicting closing settlement statements and allowed
other fraudulent acts to take place during escrow†says nothing about fraud and
deceit. That is, it remains unclear
what, if any misrepresentations were made, and whether appellant’s reliance
thereon was reasonable; in fact, reliance isn’t even pleaded. In the same vein, simply stating that an
escrow agent forged the plaintiff’s name “on escrow documents†tells one
nothing in that the effect, if any, of such alleged forgeries remains unknown. The only concrete allegation is that the down
payment was allegedly returned but there is no allegation that appellant was
unaware of this; in fact, one would think that as the seller she would have
been well aware of this and would have been part and parcel of the scheme. In sum, appellant has simply failed to allege
facts that would show that Chicago Title defrauded her.
It
is not that we fail to appreciate the dire personal crisis that appellant
faces. Nonetheless, Chicago Title is not
answerable for that crisis.
DISPOSITION
The judgment (order) is affirmed.
THE SAXON APPEAL
The
Saxon appeal involves respondents Saxon and BNY Mellon Performance & Risk
Analytics, Inc. (BNY). BNY is a bank
that bought the problem loan from NovaStar and Saxon performed foreclosure
services for the Dublin Avenue home at BNY’s request.
PROCEDURAL
HISTORY
On April 11, 2011,
the trial court heard demurrers brought by BNY and Saxon to appellant’s sixth
amended complaint. For the reasons set
forth in detail in the court’s minute order of that day, the court sustained both
demurrers without leave to amend.
Appellant filed her notice of appeal on April 20, 2011.
On
January 22, 2013, we entered an order advising appellant that there was no
order of dismissal or judgment as to the order sustaining the demurrers without
leave to amend and we gave appellant until March 15, 2013, to augment the
record with such an order or judgment.
On
March 15, 2013, appellant filed a request to augment the record with an order
of dismissal as to BNY and Saxon, entered on August 11, 2011, and with a
judgment as to NovaStar that was entered on June 29, 2011. That request is granted and the record is
augmented with the aforesaid documents.
THE TRIAL
COURT’S RULINGS
The
trial court gave three reasons why it sustained the demurrers without leave to
amend. They were that claims of fraud
were not specific and factual; that the privilege established by subdivision
(d) of Civil Code section 2924 barred the action; and the tender rule.
As
to the first ground, the trial court’s minute order states: “Williams has not been able to specify who
from BNY and Saxon made fraudulent statements to her, what they said, when they
said it, how Williams relied on those statements to her detriment, why her
reliance was justifiable, and what facts show they made those supposedly
fraudulent statements with scienter -- that is, with an evil intention to
deceive at the time they spoke. Williams
says Saxon and BNY behaved in fraudulent ways, but her pleadings do not set
forth the specific facts to back up these general claims. Williams’s fraud claims fall flat.â€
The
court ruled that under
subdivision (d) of Civil Code section 2924, the various acts undertaken to
foreclose were privileged. As an
example, this privilege extends to the
“mailing, publication, and delivery of notices as required by this section†and
to the “[p]
of the procedures set forth in this article.â€
As to the absence of a tender, the
court found that appellant was unable to pay the mortgage, that she did not
tender any money to bring the loan current and that tender is required in order
to ensure that the loan will not go into default again.
DISCUSSION
Appellant limits herself to the tender issue and ignores the first
two reasons the trial court gave for sustaining the demurrers. The failure to make legal argument why the
first two grounds were erroneous is a waiver of these issues. (People
v. Stanley (1995) 10 Cal.4th 764, 793; see generally 9 Witkin, Cal.
Procedure, supra, Appeal, § 701, pp.
769-771.) We adopt the trial court’s
reasoning as to the first two grounds and hold that they support the order
sustaining the demurrers without leave to amend.
Appellant contends that the tender
rule should not be applied prior to the foreclosure sale. The rule is that the court will not give
relief to the mortgagor, whether by quiet title or ejectment, unless the
mortgagor offers to pay the debt, this being an application of the rule that he
who seeks equity must do equity. (
p. 623; see generally 4 Witkin, Summary of Cal. Law (10th ed. 2005)
Security Transactions in Real Property, § 104, pp. 898-899.) Irrespective of when the foreclosure sale
takes place, the point is that it is in this action that appellant is seeking
equitable relief and it is therefore now that she must do equity, i.e., make a
tender to bring the loan to current.
Appellant’s reliance on a federal
district court decision that held that the tender rule applies only in cases
when the sale has taken place is misplaced.
The decisions of lower federal courts are merely persuasive, not binding
(People v. Uribe (2011) 199
Cal.App.4th 836, 875), and on questions of state law they are certainly not
controlling (Bank of Italy Nat. Trust
& Savings Assn. v. Bentley (1933) 217 Cal. 644, 653). As we have noted, appellant’s action seeks
equity, and therefore it must do equity; it is immaterial whether the
foreclosure has or has not taken place.
The court’s ruling on the demurrers
was correct.
DISPOSITION
The order dismissing Saxon and BNY from the action is affirmed.
THE NOVASTAR APPEAL
Appellant contends that summary judgment should not have been
granted because whether there was an ostensible agency must be determined, as a
matter of law, by the trier of fact. The
second reason that it was error to grant summary judgment, according to
appellant, is that it has not been shown that Steve Solgelman was not an
employee of NovaStar.
name="_ftnref2" title="">[2]
NovaStar’s motion for summary
judgment was very simple. Based on the
declaration under penalty of perjury of John Holtman, an officer of NovaStar,
the motion averred that Tartabull was not an employee of NovaStar, i.e., it did
not provide him with an office, did not set his hours, did not pay him and did
not direct his activities. NovaStar also
claimed that the only connection it had with appellant’s property was to make a
loan to John S. San Nicolas in 2005.
In granting the
court also struck from Williams’s declaration references to Steve Solgelman on
the ground that she lacked personal knowledge and that her assertion about
Solgelman lacked a foundation.
name="_ftnref4" title="">[4] The trial court found that Williams had not
produced any facts to controvert those on which NovaStar relied and that she
had not identified any triable issues of material fact.
Returning to Williams’s first
contention, she offers no authority for the proposition that ostensible agency
is, as a matter of law, a question for the trier of fact. There is, of course, no such legal
proposition. The issue, as Williams
attempted to state it in her complaint, was whether Tartabull was an agent or
employee of NovaStar who had participated in the conspiracy against her. The Holtman declaration squarely rebuts this
claim and Williams produced no probative evidence that contradicted Holtman’s
declaration. All she propounded was her
own declaration, which quoted Tartabull’s hearsay statement that he was a
broker for NovaStar.
Be that as it may, we fail to see
how a loan made by NovaStar to John S. San Nicolas, whether or not
brokered by Tartabull, is in any way actionable by Williams. As the allegations of the original complaint
clearly reveal, the sale to John S. San Nicolas was voluntary on her part
and was not in any way actionable.
Williams’s contention regarding
Solgelman lacks any factual foundation. References to Solgelman were struck by
the trial court and she does not challenge this ruling, which was appropriate
as it was not shown that she had any way of knowing anything about Solgelman. In any event, what was true of Tartabull was
also true of Solgelman. Even if they
assisted in the sale to John S. San Nicolas, Williams was not harmed by
their conduct.
Appellant simply failed to show that
there were any triable issues of material fact when it came to her action
against NovaStar.
The judgment (order) is affirmed.
The judgments dismissing the actions
against Chicago Title Company, Saxon Mortgage Services, Inc., BNY Mellon
Performance & Risk Analytics, Inc., and NovaStar Home Mortgage, Inc., are
affirmed. Respondents are to recover
their costs on appeal.
FLIER,
J.
WE CONCUR:
BIGELOW, P. J.
GRIMES, J.
name="_ftn1" title="">
This rule requires the mortgagor
who seeks to set aside an allegedly void foreclosure sale to offer to pay the
mortgage. (Burns v. Hiatt (1906) 149 Cal. 617, 623.)
name="_ftn2" title="">
her reply brief, appellant contends that NovaStar is liable because it approved
the loan to John S. San Nicolas.
Points raised for the first time in the reply brief will not be
considered. (Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 322.)
