Filed 10/25/18 Farrens v. CIT Bank, N.A. CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. John W. Vineyard, Judge. Affirmed.

Stephen F. Lopez Esq. and Stephen F. Lopez for Plaintiff and Appellant.

Allen Matkins Leck Gamble Mallory & Natsis, Francis N. Scollan and Andrea M. Schoor for Defendants and Respondents.

I.

INTRODUCTION

After the foreclosure sale of her property, plaintiff and appellant, Joani Farrens, filed a verified complaint against defendants and respondents, OneWest Bank, FSB, now CIT Bank, N.A. (OneWest) and OWB REO, LLC (OWB) for (1) wrongful foreclosure, (2) quiet title, (3) violation of the California Homeowner’s Bill of Rights (HBOR),[1] and (4) unfair business practices. (Bus. & Prof. Code, § 17200.) Ms. Farrens later stipulated to dismiss the wrongful foreclosure and quiet title causes of action with prejudice after the trial court sustained a demurrer to those claims. Following the California Supreme Court’s decision in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova), Ms. Farrens attempted to revive her wrongful foreclosure claim by seeking leave to amend her complaint. The trial court denied Ms. Farrens’s motion for leave to amend her complaint because she had already stipulated to dismiss with prejudice her claims for wrongful foreclosure and quiet title. Ultimately, the trial court summarily adjudicated the remaining claims and entered a judgment in favor of defendants.

On appeal, Ms. Farrens seeks to reverse the judgment on several grounds: (1) Ms. Farrens contends the trial court erred in sustaining the defendant’s demurrer to her wrongful foreclosure cause of action; (2) Ms. Farrens contends the trial court abused its discretion in denying leave to amend her complaint because the court misapplied the doctrine of res judicata; and (3) Ms. Farrens contends, without supporting argument, that the trial court had no basis on which to summarily adjudicate her remaining causes of action.

We reject Ms. Farrens contentions and affirm the judgment.

II.

FACTUAL AND PROCEDURAL BACKGROUND

1. The Promissory Note and Deed of Trust

Although Ms. Farrens was a party to the deed of trust in this case, she was not the borrower of the residential mortgage loan and thus not a signatory to the promissory note. The loan was obtained by her husband, Nicholas Farrens, from IndyMac Bank, F.S.B., on August 17, 2007. Mr. Farrens then defaulted on the loan in December 2007, and remained in default. When Mr. Farrens died on September 27, 2010, Ms. Farrens became the sole trustor on the deed of trust.

2. The Foreclosure Sale

The deed of trust was assigned to OneWest on May 18, 2009, and recorded on June 9, 2009. OneWest had a notice of default recorded on September 9, 2013. On February 19, 2014, OneWest had a second notice of default recorded. A notice of foreclosure sale was recorded on or about May 16, 2014. Despite Ms. Farrens filing for bankruptcy on June 10, 2014, the foreclosure sale proceeded on September 11, 2014. The sale was held for OWB, which was listed as grantee and foreclosing beneficiary on the trustee’s deed upon sale.

3. Defendants’ Demurrer

Ms. Farrens filed a verified complaint against defendants on December 9, 2014. Defendants filed a demurrer to the entire complaint on January 27, 2015. On March 9, 2015, defendants’ demurrer was sustained by the trial court, but only as to the wrongful foreclosure and quiet title causes of action, with leave to amend.

4. The Unlawful Detainer Proceedings[2]

OWB served Ms. Farrens with a notice to quit on October 10, 2014, and commenced a separate unlawful detainer action after Ms. Farrens failed to vacate the foreclosed property. When the limited jurisdiction court precluded evidence challenging OWB’s title and the assignment of the trust deed, Ms. Farrens and OWB agreed to waive jury trial and proceed by means of a directed verdict, to be issued following an offer of proof. The trial court entered a final judgment on April 23, 2015, against Ms. Farrens and in favor of OWB for possession, without damages.[3] Although Ms. Farrens appealed the judgment, it was affirmed by the Appellate Division of the Superior Court of Riverside County, in its per curiam opinion filed on January 24, 2017.

5. The Stipulated Dismissal of Wrongful Foreclosure and Quiet Title Causes of Action

Ms. Farrens chose not to amend her complaint. As a result, defendants applied ex parte to dismiss the entire action and enter the judgment in defendants’ favor on April 23, 2015. Through her counsel, Ms. Farrens informed defendants that she had decided not to pursue her wrongful foreclosure and quiet title causes of action. The parties stipulated on April 24, 2015, that Ms. Farrens would dismiss with prejudice the wrongful foreclosure and quiet title causes of action, but continue litigating the remaining claims for HBOR and unfair competition law violations. The stipulation was approved by and became the order of the trial court on May 8, 2015.

6. The Motion for Leave to Amend and Summary Judgment

On April 1, 2016, after the California Supreme Court issued its ruling in Yvanova, supra, 62 Cal.4th 919, Ms. Farrens filed a motion for leave to amend her complaint. The motion was denied by the trial court on June 1, 2016. In its tentative ruling, the trial court wrote: “On May 8, 2015, this court signed a Stipulation and Order Dismissing Plaintiff’s Causes of Action for Wrongful Foreclosure and Quiet Title. [Citation.] The Order states that these two causes of action are dismissed ‘with prejudice.’ [Citation.] A dismissal with prejudice bars any later lawsuit on the same claim. [¶] Plaintiff’s motion focuses on the prior demurrer, and ignores the effect of the stipulation and order, which bars Plaintiff’s proposed causes of action.” At the hearing, the court denied Ms. Farrens leave to amend for the reasons stated in its tentative ruling.

Ms. Farrens then petitioned this court for writ of mandate directing the trial court to grant her leave to amend. (Super. Ct. Riverside County, 2016, No. E066518; petn. den.) The petition for writ of mandate was denied on August 3, 2016.

On September 21, 2016, the trial court granted summary judgment against Ms. Farrens and in favor of defendants on the remaining causes of action for HBOR and unfair competition law violations. Ms. Farrens appeals both the order denying her motion for leave to amend and the order granting summary judgment.

III.

DISCUSSION

1. No Error in Sustaining Demurrer to Wrongful Foreclosure Cause of Action

Ms. Farrens contends that her verified complaint sufficiently alleged all the elements of a common law wrongful foreclosure cause of action and, thus, the trial court erred in sustaining defendants’ demurrer. We review de novo the trial court’s decision to sustain defendants’ demurrer to the wrongful foreclosure cause of action, accepting all material facts properly pled, but not contentions, deductions, or conclusions of law. (Flowers v. Los Angeles County Metropolitan Transportation Authority (2015) 243 Cal.App.4th 66, 73-74.) We must affirm the trial court’s judgment if any ground for demurrer is well taken. (Ibid.)

In view of all the material facts properly pled and the state of the law at the time, defendant’s demurrer to Ms. Farrens’s wrongful foreclosure cause of action was well taken. “The elements of a wrongful foreclosure cause of action are: ‘“(1) [T]he trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.”’” (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 561-562 (Sciarratta).) Tender of the outstanding debt was not alleged by Ms. Farrens because she did not cure the default on the mortgage debt and was not legally excused from doing so. Moreover, Ms. Farrens was not a signatory to the promissory note and hence lacked standing to assert any borrower’s rights. Ms. Farrens therefore could not sufficiently allege a wrongful foreclosure cause of action and could not have avoided demurrer given the ultimate facts and existing precedent.

Ms. Farrens nonetheless contends that her wrongful foreclosure cause of action would have survived demurrer given our high court’s subsequent holding in Yvanova, supra, 62 Cal.4th 919, along with the holding of Sciarratta, supra, 247 Cal.App.4th 552. Yvanova and Sciarratta together hold that a homeowner has standing to challenge a foreclosure sale by anyone lacking beneficial interest in the deed of trust, without the need to allege prejudice beyond the foreclosure sale itself and without the need to allege tender of the debt owed to the foreclosing party.[4] (Yvanova, supra, at pp. 928-929, fn. 4, 935, 939; Sciarratta, supra, at pp. 555, 562, 565, fn. 10, 568.) Relying on Yvanova and Sciarratta, Ms. Farrens argues that her verified complaint sufficiently alleged all the elements of wrongful foreclosure; she was prejudiced by the sale; she was not required to allege tender; and the foreclosure sale participated in by OWB was wrongful because OneWest was the only beneficiary under the deed of trust.

We disagree. Yvanova and Sciarratta apply only when a foreclosing entity has acted without legal authority. (Yvanova, supra, 62 Cal.4th at pp. 924, 928, 935; Sciarratta, supra, 247 Cal.App.4th at p. 566.) Specifically, Yvanova established that a borrower alleging a void and not merely voidable assignment of the promissory note and deed of trust was sufficient to sustain an action for wrongful foreclosure. (Yvanova, supra, at p. 923.) Here, Ms. Farrens did not allege that OWB was a party to a void assignment of the promissory note and deed of trust. In paragraph five of her original verified complaint’s general allegations, Ms. Farrens alleged that defendants were each other’s employee, agent, and/or servant, “acting [within] the course and scope of such agency, employment and/or servancy.” An agent of the entity holding the beneficial interest under the deed of trust may commence and complete a nonjudicial foreclosure. (Yhudai v. IMPAC Funding Corp. (2016) 1 Cal.App.5th 1252, 1256; Sciarratta, supra, at p. 564; Yvanova, supra, at p. 935.) Because Ms. Farrens pled that OWB was an authorized agent acting on behalf of OneWest[5] (Civ. Code, § 2304; see Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 14 [typical generalized agency allegations admitted the requisite agency relationship]), Ms. Farrens did not allege ultimate facts sufficient to show that OWB lacked legal authority to commence and complete the nonjudicial foreclosure. Absent a foreclosing entity that has acted without legal authority, the Yvanova and Sciarratta holdings are inapplicable to the facts alleged in this case.

Accordingly, we find that Ms. Farrens could not have relied on Yvanova and Sciarratta to sufficiently allege all the elements of wrongful foreclosure. We therefore conclude that the trial court did not err in sustaining the demurrer to the wrongful foreclosure cause of action.

2. No Abuse of Discretion in Denying Leave to Amend

Ms. Farrens contends that the trial court abused its discretion in denying leave to amend her complaint because there was no final judgment on the merits and, thus, the court misapplied the doctrine of res judicata to the wrongful foreclosure cause of action. Ms. Farrens makes this argument even though the court’s decision was explicitly based on her stipulated dismissal with prejudice.

We review the trial court’s decision not to grant leave to amend for abuse of discretion and reverse only if we determine there is a reasonable possibility the pleading can be cured by amendment. (Ellena v. Department of Ins. (2014) 230 Cal.App.4th 198, 205.) “Otherwise, the trial court’s decision will be affirmed for lack of abuse.” (Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1498.)

Here, we find no abuse of discretion in the court’s denial of leave to amend based on any misapplication of the res judicata doctrine. Res judicata only applies to later, separate litigation, not to rulings within the same action. (Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 770; Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 701-702.) A final judgment on the merits can nonetheless result from a voluntary dismissal with prejudice, which is the modern name for retraxit. (Federal Home Loan Bank of San Francisco v. Countrywide Financial Corp. (2013) 214 Cal.App.4th 1520, 1527; Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319, 1327, 1331.) In the stipulation and proposed order filed on April 24, 2015, Ms. Farrens stipulated through her counsel to “not pursue her first and second causes of action for wrongful foreclosure and quiet title.” The proposed order provided for dismissal of both causes of action “with prejudice.” The proposed order was not only adjacent to the trial court’s signature but also adjacent to the stipulation signature of Ms. Farrens’s counsel. The stipulation and order thus constituted an intentional retraxit by which Ms. Farrens expressly renounced her claims for wrongful foreclosure and quiet title, which were then deemed actually litigated on the merits. (Alpha Mechanical, supra, at pp. 1331-1333.) A similar conclusion was reached by the appellate division in its January 24, 2017, per curiam opinion.[6]

Ms. Farrens argues that her stipulated dismissal does not preclude her from challenging the trial court’s denial of leave to amend because her stipulation was not voluntary, but compelled by the circumstances of her litigation. She claims that amending her complaint would have waived any error on the part of the trial court in sustaining the demurrer. (Sciarratta, supra, 247 Cal.App.4th at p. 560, fn. 6.) Ms. Farrens also claims that, as a matter of law, she could no longer voluntarily dismiss her causes of action, even with prejudice, once she chose not to amend her complaint after the court sustained the demurrer with leave to amend. (Bank of America, N.A. v. Mitchell (2012) 204 Cal.App.4th 1199, 1212; Wells v. Marina City Properties, Inc. (1981) 29 Cal.3d 781, 785.) Accordingly, Ms. Farrens maintains that the stipulated dismissal was the only means of standing on her pleadings and appealing the trial court’s rulings.

This argument was rejected by the appellate division, and we reject it as well. A plaintiff generally has the right to voluntarily dismiss an action with or without prejudice any time before the actual commencement of trial. (Code Civ. Proc., § 581, subds. (b)(1), (c).) While that right has exceptions, they apply only when an action has proceeded to some determinative adjudication, and the plaintiff’s dismissal of the case is merely a tactical means of avoiding an adverse ruling. (Bank of America, N.A. v. Mitchell, supra, 204 Cal.App.4th at pp. 1209, 1212.) Ms. Farrens’s stipulated dismissal in this case was not a tactical means of avoiding an adverse ruling. Nor was it unilaterally requested by Ms. Farrens. The dismissal with prejudice was stipulated by both sides prior to the trial court ruling on the ex parte application to dismiss the action for lack of prosecution. The stipulated dismissal was not Ms. Farrens’s only alternative. If Ms. Farrens had not intended the stipulated dismissal to be a retraxit, she could have simply accepted an adverse ruling on the ex parte application. The stipulated dismissal was a valid means of voluntarily anticipating an adverse ruling and bringing finality only to the wrongful foreclosure and quiet title portion of the litigation.

As to Ms. Farrens’s standing on her pleadings, we agree with the appellate division that there is nothing in the content of the stipulation and order indicating her litigation posture was to stand on her pleadings. “[P]arties may by agreement limit the legal effect of a dismissal with prejudice so that it would not constitute a retraxit and affect their rights in a later pending action.” (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America, supra, 133 Cal.App.4th at p. 1334.) The stipulated dismissal in this case contained no limiting language suggesting Ms. Farrens intended to later challenge the court’s ruling on the demurrer. The language of the stipulation unambiguously expressed her intent to have the dismissal function as a retraxit.

Finally, Ms. Farrens argues that her attorney had no authority to compromise her litigation by stipulating to the dismissal of the wrongful foreclosure and quiet title causes of action. This argument is, however, inconsistent with her claim that the stipulation was compelled by the circumstances of litigation. More importantly, this argument is unsupported on appeal by any declaration or other evidence showing that her causes of action were dismissed contrary to her instructions. Absent support in the record, we disregard this argument. (Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1149 [we may disregard any claims that are not properly supported].)

We thus find that the stipulated dismissal of the wrongful foreclosure cause of action was a retraxit, properly deemed to be a final judgment on the merits. Based on our discussion above, we also find that there was no reasonable possibility Ms. Farrens could cure her complaint by amendment. We therefore conclude that the trial court did not abuse its discretion in denying Ms. Farrens leave to amend her complaint.

3. Forfeiture of Challenge to Summary Judgment

Ms. Farrens additionally challenges the trial court’s summary judgment ruling and discusses the appropriate standard of review. However, she fails to discuss or offer supporting arguments for her challenge. We thus deem the issue forfeited. (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 19, fn. 12 [“[I]ssues and arguments not addressed in the briefs on appeal are deemed forfeited.”].)

IV.

DISPOSITION

The judgment is affirmed. Defendants shall recover their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

CODRINGTON

J.

We concur:

RAMIREZ

P. J.

SLOUGH

J.