Mora v. Superior Court

Filed 1/29/07 Mora v. Superior Court CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

Petitioners Raul and Marianne Mora (collectively, Moras) lost their Hollister home through foreclosure and thereafter brought an action challenging the legality of the sale. This petition for writ of mandate arises out of an order sustaining without leave to amend the demurrers of two defendants to some (but not all) of the causes of action of Moras second amended complaint (Complaint). Moras filed a nonstatutory petition for writ of mandamus or supersedeas challenging the order; they also sought a stay to prevent any attempts to remove them from their home via unlawful detainer. The principal argument in the petition is that the court erred by making a conclusive determination of certain facts supposedly contained in documents of which it took judicial notice. Those facts contradicted key allegations of the Complaint and resulted in the court sustaining the demurrers. Real parties in interestthe lender, Ocwen Financial Corporation (Ocwen), and the trustee, Cal-Western Reconveyance Corporation (Cal-Western)have opposed the petition.

After consideration of the entire matter, including supplemental opposition papers filed by Ocwen, we conclude that the lower courts ruling was erroneous. Accordingly, we will grant Moras petition for writ of mandate.

FACTUAL BACKGROUND

The following material factswhich this court accepts as true for purposes of evaluating the trial courts ruling on demurrer (Searle v. Wyndham Internat., Inc. (2002) 102 Cal.App.4th 1327, 1330, fn. 1)are alleged in the Complaint:

Moras are the owners of a single family residence at 191 Gonzalez Drive in Hollister (the Property). Ocwen is the beneficiary (through assignment) of a deed of trust signed by Moras encumbering their residence. On some date (unspecified in the Complaint), Moras became delinquent in their mortgage payments. They had negotiations with Ocwen concerning a forbearance agreement, and in July 2005, those negotiations reached fruition and Ocwen agreed to transmit to [Moras] a copy of [the agreement that] would reinstate their deed of trust, loan, and provide them an opportunity to repay the default amounts. During the negotiations, an Ocwen representative assured [Moras] there were no foreclosure proceedings underway. This representation corroborated [Moras] understanding that there was no pending foreclosure. In fact, unknown to Moras, foreclosure proceedings were pending and concluded before Moras could sign the forbearance agreement.

A foreclosure sale occurred on July 20, 2005. As recited in the trustees deed, the sale was purportedly conducted pursuant to a Notice of Default recorded December 30, 2002. After learning of the foreclosure, Moras conducted a search of the public record and located a Notice of Trustees Sale recorded March 31, 2003, that scheduled a trustees sale for April 22, 2003. Moras never received a notice of default or a notice of sale, and no such notices were posted on the Property. Although Moras had filed for bankruptcy protection in April 2003, they did not (and could not have reasonably been expected to) relate the July 2005 foreclosure sale with foreclosure proceedings that had been pending when they filed their bankruptcy petition nearly two years earlier.

As a result of the foreclosure sale, defendants Ouita Martin and Thomas A. Johns (collectively, Buyers)who are foreclosure specialists speculating in the purchase and sale of foreclosure properties and are sophisticated foreclosure investorsacquired the Property for $224,085. Moras allege that the Property has a fair market value in excess of $550,000. Moras were served with an eviction notice two days after the foreclosure.

In the first cause of action of the Complaint, Moras seek to set aside the foreclosure sale and invalidate the trustees deed. They allege on information and belief that, [i]n addition to the deficiencies and irregularities previously set forth in [the] Complaint, the foreclosure sale was postponed more than the maximum number (three times) permitted by Civil Code section 2924. Presumably, the other deficiencies and irregularities to which Moras allude are the alleged service defects with respect to the notice of default and the notice of trustees sale, and the alleged misrepresentation by Ocwen that no foreclosure proceeding was pending.[1]

Moras incorporate by reference all prior allegations of the Complaint in the second cause of action. They allege that the defendants[2] breached the covenant of good faith and fair dealing implied in the contract (promissory note and deed of trust). Moras claim that they have been damaged in the sum of approximately $250,000 as a result of the breach.

The third cause of action of the Complaint alleges that Cal-Western was negligent in the performance of its duties as trustee. The fourth and fifth causes of action allege that Ocwen committed actionable negligent and intentional misrepresentation with respect to the statement to Moras in or about July 2005 that no foreclosure proceedings were pending.

PROCEDURAL BACKGROUND

Following service of an eviction notice on July 22, 2005, Buyers filed and served on Moras an unlawful detainer action. Moras filed their original complaint on August 25, 2005, which was apparently consolidated with the unlawful detainer action. Ocwen demurred, and Moras filed a first amended complaint in lieu of opposing the demurrer. Ocwen demurred to the first amended complaint; the court sustained the demurrer with leave to amend as to the first and second causes of action and overruled the demurrer as to the fourth and fifth causes of action.[3]

Moras filed the (Second Amended) Complaint on or about February 28, 2006. Ocwen and Cal-Western filed separate demurrers to the Complaint. In essence, both defendants asserted that the claims had no merit because, contrary to Moras allegations that they had no notice of the trustees sale and that the sale was postponed in excess of the number of times allowed by statute, judicially-noticeable documents conclusively proved otherwise. In support of its demurrer, Ocwen filed a request that the court take judicial notice of (1) Moras bankruptcy petition; (2) a document substituting Cal-Western as trustee under Moras deed of trust; (3) the notice of default and notice of sale signed by Cal-Western concerning the Property; (4) certain pleadings filed in Moras bankruptcy proceeding; and (5) various documents reflecting postponements of the foreclosure sale.[4]

The superior court sustained without leave to amend Ocwens demurrer to the first and second causes of action of the Complaint. It also sustained without leave to amend Cal-Westerns demurrer to the first, second, and third causes of action of the Complaint. The court expressly found that judicially-noticed documents contradicted material allegations of the Complaint, namely, (1) the bankruptcy petition contradicted the allegation that Moras did not receive notice of the foreclosure, and (2) documents produced by Moras in response to discovery contradicted the allegation that the maximum number of postponements allowed by statute for foreclosure had been exceeded. The order contained the further recital that the foreclosure was valid and statutory procedures were followed.

Moras filed their petition for writ of mandamus or supersedeas with this court on July 21, 2006. On August 4, 2006, we issued an order staying all trial court proceedings and permitting the filing of preliminary opposition by real parties in interest. Separate preliminary opposition papers were filed on behalf of Ocwen and Cal-Western. In addition to its opposition, Ocwen filed a request for judicial notice asking that this court, in conjunction with appraising the merits of the petition, take judicial notice of six documents not considered by the court below. (We address that request for judicial notice below.) On December 19, 2006, we issued a Palma[5] notice indicating that we were considering issuing a peremptory writ of mandate in the first instance. Ocwen filed supplemental opposition on January 3, 2007.

DISCUSSION

I. Standard of Review

The standard of review is de novo. (Cryolife, Inc. v. Superior Court (2003) 110 Cal.App.4th 1145, 1152.) 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.] We also consider matters which may be judicially noticed. [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; see also Randi W. v. Muroc Joint Unified School Dist. (1997) 14 Cal.4th 1066, 1075.)

It is not the ordinary function of a demurrer to test the truth of the plaintiffs allegations or the accuracy with which he describes the defendants conduct. A demurrer tests only the legal sufficiency of the pleading. (Committee On Childrens Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213.) Thus, as noted, in considering the merits of a demurrer, the facts alleged in the pleading are deemed to be true, however improbable they may be. [Citation.] (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604; see also Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496 [court reviewing propriety of ruling on demurrer not concerned with the plaintiffs ability to prove . . . allegations, or the possible difficulty of making such proof].)

Where a demurrer is sustained without leave to amend, the reviewing court must determine whether there is a reasonable probability that the complaint could have been amended to cure the defect; if so, it will conclude that the trial court abused its discretion by denying the plaintiff leave to amend. (Williams v. Housing Authority of Los Angeles (2004) 121 Cal.App.4th 708, 719.) The plaintiff bears the burden of establishing that it could have amended the complaint to cure the defect. (Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 320.)

II. Judicial Notice

The court may consider as grounds for a demurrer any matter that is judicially noticeable under Evidence Code sections 451 or 452. (Code. Civ. Proc.,  430.30, subd. (a).)[6]  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. [Citation.] The court may in its discretion take judicial notice of any court record in the United States. [Citation.] This includes any orders, findings of fact and conclusions of law, and judgments within court records. [Citations.] However, while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files. [Citation.] Courts may not take judicial notice of allegations in affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof. (Lockley v. LawOffice of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 (Lockley); see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2006) 7:13-7:16.5.)

Thus, it is proper for a court to take judicial notice of a complaint filed in a previous action to support a finding that a challenged complaint is demurrable on the basis of res judicata. (Frommhagen v. Board of Supervisors (1987) 197 Cal.App.3d 1292, 1299, 1301 (Frommhagen); see also Bistawros v. Greenberg (1987) 189 Cal.App.3d 189, 192.) But the courts ability to take judicial notice of the existence of other pleadings does not extend to judicial notice of the existence of facts asserted in every document of a court file, including pleadings and affidavits. . . . [A] court cannot take judicial notice of hearsay allegations as being true, just because they are part of a court record or file. A court may take judicial notice of the existence of each document in a court file, but can only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact and conclusions of law, and judgments. (Day v. Sharp (1975) 50 Cal.App.3d 904, 914; see also Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145.)

Similarly, the taking of judicial notice of official governmental acts does not, of itself, extend to acceptance of the truth of the matters therein stated: While courts may notice official acts and public records, we do not take judicial notice of the truth of all matters stated therein. [Citations.] (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063.) Likewise, judicial notice of a partys applications and supporting documentation filed with a state agency is improper, since the documents are not official acts for which judicial notice may be taken. (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 607-608.)

III. Sufficiency Of Moras Complaint

A. Judicially-Noticed Documents

In this case, the key documents of which the court took judicial notice were (1) the bankruptcy petition filed by Moras and other bankruptcy pleadings, and (2) the foreclosure postponements. The trial court erred by relying on purported factual matters contained in these documents to reach the conclusion that the Complaint was demurrable.

1. Bankruptcy pleadings

The bankruptcy petition itselfas a court pleadingwas a proper subject of judicial notice. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999, 1018 [judicial notice of bankruptcy filings in considering motion for judgment on the pleadings]; Frommhagen, supra, 197 Cal.App.3d at pp. 1299, 1301.) But the court here went beyond acknowledging through judicial notice the existence of the filing of the Moras bankruptcy petition. It improperly held that the petitionand, in particular, the notation in schedule D of the petition that Cal-Western was representing Ocwenconclusively established that Moras received the notice of default and notice of sale with respect to the foreclosure proceeding. While Ocwen argued in its demurrer that the listing in schedule D demonstrated that Moras received the foreclosure noticesbecause the only way Moras could have known about Cal-Western (who had substituted as trustee shortly before the notices were recorded) was through receipt of such noticesthis was plainly an evidentiary leap that could not have been made at the demurrer stage of the proceedings.

Similarly, another bankruptcy pleadingthe motion for relief from stay filed by Ocwens assignorcould not have been used through the vehicle of judicial notice to refute Moras allegation concerning lack of notice. While the pleading contained allegations concerning recordation of the notices, it did not conclusively establish that the notices were properly given to Moras.[7]

2. Postponement certificates

The other key documents of which the court took judicial notice were the various notices postponing the foreclosure sale. These documents consisted of 27 unsigned documents (collectively, the postponement certificates), each entitled Certificate of Postponement, and each written on Fidelity National Agency Sales & Posting letterhead. Of the certificates, 14 indicated that the reason for postponement was bankruptcy, 12 noted the reason as Mutual Agreement, and one stated the reason as Beneficiarys Request. Ocwen argued that under the statutory scheme existing at the time of foreclosure, postponements due to bankruptcy or as a result of mutual agreement were not counted for purposes of calculating the maximum number of postponements (three) that could occur before the trustee was required to serve and record a new notice of trustees sale.[8] Therefore (Ocwen argued), the postponement certificates produced by Moras refuted the Complaints allegation that the trustees sale was postponed in excess of the maximum number of times (3) set forth by the California Civil Code [section] 2924. The court below agreed with Ocwens position: Judicially-noticed documents from Plaintiffs discovery responses also contradicted allegations that the maximum number of postponement[s] allowed for foreclosure was exceeded. This was error.

Ocwen contends that judicial notice of the postponement certificates was authorized under Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, 83, in which the Supreme Court acknowledged that a complaints allegations may be disregarded when they conflict with judicially noticed discovery responses. [Citation.] In Bockrath, the discovery responses of which the court took judicial notice were the plaintiffs sworn interrogatory responses. (Id. at p. 84.) In contrast to the circumstances in Bockrath, here, the discovery responses were not, in fact, discovery responses at all; they were documents produced by Moras in response to Ocwens document demands, made pursuant to Code of Civil Procedure section 2031.010. Neither Ocwen nor Cal-Western cites any authoritynor do we believe that any existsfor the proposition that the court may take judicial notice of unverified documents produced in response to discovery, such as the postponement certificates here.

Furthermore, even were we to conclude that judicial notice was appropriate, the court, at most, could have taken judicial notice of the fact that Moras possessed copies of the postponement certificates. It is an entirely different matter to suggest that the court could have properly taken judicial notice of the truth of the contents of those documents. (Stevens v. Superior Court, supra, 75 Cal.App.4th at pp. 607-608 [judicial notice of truth of matters stated in the defendants filings with Department of Insurance improper]; Lockley, supra, 91 Cal.App.4th at p. 882 [court may not take judicial notice of truth of matters stated in pleadings].) But that is exactly what Ocwen asked of the court below, and the court in fact did so. The trial court accepted the truth of the hearsay recitals in the postponement certificatesmade by a third party (apparently, Cal-Westerns agent)that 14 of the postponements were due to bankruptcy, 12 were by mutual agreement, and only one postponement was at the beneficiarys request. Based upon this improper application of judicial notice, the court concluded that the documents contradicted a critical allegation in Moras Complaint, namely, that the foreclosure sale was improper because there had been more than the three postponements permitted by law.

3. Conclusion re judicial notice

The trial court based its decision to sustain without leave to amend Ocwens and Cal-Westerns demurrers on the premises that (1) bankruptcy pleadings (and possibly the recorded foreclosure notices themselves) contradicted the allegation in the Complaint that there was no proper notice of default or notice of sale given to Moras in connection with the foreclosure proceedings; and (2) recitals contained in postponement certificates produced by Moras in response to document demands contradicted the allegation in the Complaint challenging the foreclosure sale because there had been more than three postponements of the sale. The postponement certificates were not proper subjects for permissive judicial notice. Nor was it appropriate for the court to conclude that the trustees sale did not violate the three-postponements rule, based upon the hearsay reasons for postponement recited by a third party in those documents. Likewise, while judicial notice of the fact of the filing of the bankruptcy pleadings may have been proper, it was improper for the court to have accepted as true the matters stated in them as a basis for concluding that the Complaint was demurrable. Accordingly, since the Complaint alleged statutory noncompliance with respect to the foreclosure sale, Moras claims challenging the foreclosure stated viable causes of action; the demurrers should have been overruled.[9]

B. Other Grounds for Demurrer

On appeal, we will affirm a trial courts decision to sustain the demurrer [if it] was correct on any theory. [Citation.] (Kennedy v. Baxter Healthcare Corp. (1996) 43 Cal.App.4th 799, 808, fn. omitted.) Thus, we do not review the validity of the trial courts reasoning but only the propriety of the ruling itself. [Citations.] (Orange Unified School Dist. v. Rancho Santiago Community College Dist. (1997) 54 Cal.App.4th 750, 757.) Therefore, we must examine the other arguments raised by Ocwen or Cal-Western in this proceeding in support of the propriety of the trial courts decision to sustain the demurrers without leave to amend.

1. Tender

Ocwen contends that the Complaint was demurrable because Moras failed to properly plead tender in conjunction with their request for equitable relief. It argues that because Moras tendered $25,000 (by allegation in the Complaint), while the total amount due to cure the obligation was in excess of $224,000, the tender was insufficient and therefore the Complaint was defective. Ocwen cites United States Cold Storage v. Great Western Savings & Loan Assn. (1985) 165 Cal.App.3d 1214, in support of this proposition.

The requirement that a trustor seeking equitable relief to set aside a foreclosure sale must make a proper tender is based upon the principle that one seeking equity must do equity. (MCA, Inc. v. Universal Diversified Enterprises Corp. (1972) 27 Cal.App.3d 170, 177.) While Ocwen presents it as a hard-and-fast rule that a trustor seeking to set aside a trustees sale must in all cases tender the full amount of the indebtedness (as opposed to simply the arrearages and expenses of commencing foreclosure proceedings), this is not the law. [A]s a condition precedent to an action by the trustor to set aside the trustees sale on grounds that the sale is voidable, the trustor must pay, or offer to pay, the secured debt, or at least all of the delinquencies and costs due for redemption, before an action is commences or in the complaint. . . . [] Exceptions to tender requirement. The court may permit the trustor to set aside the foreclosure sale on condition that payment be made after entry of judgment. Also, a tender may not be required where it would be inequitable to impose this condition. (4 Miller & Starr, Cal. Real Estate (3d ed. 2000) Deeds of Trust 10:212, p. 686, fns. omitted.)

Here, Moras alleged that they hereby tender the full amount necessary to cure the [d]eed of [t]rust, to wit: approximately $25,000.00 or such other amount as the Court shall determine. We conclude that the Complaint was not demurrable on the basis of insufficient or inadequate tender, in light of (1) the fact that it is unclear at this stage of the action whether a proper tender would be the total amount of the indebtedness, or simply the amount of the arrearages plus foreclosure expenses; (2) the plus-or minus nature of the tender as alleged in the Complaint; and (3) the fact that there is no incontrovertible proof that the amount of the tender is inadequate.[10]

2. Judicial estoppel

Ocwen also claims that the Complaint was demurrable based upon principles of judicial estoppel. Because Moras failed to list in schedules attached to their bankruptcy petition the existence of a claim against Ocwen based upon lack of notice of the foreclosure, Ocwen contends that Moras are estopped from asserting the claims in the Complaint. We reject this argument on both procedural and substantive grounds.

One of the leading California cases on the issue of judicial estoppel is Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171 (Jackson). In Jackson, the court enunciated a five-part test for determining the applicability of judicial estoppel: [T]he doctrine should apply when: (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. (Id. at p. 183.) Judicial estoppel is an extraordinary remedy that should be applied with caution. [Citation.] (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 598.)

Applying this five-part test, we cannot say that Moras claims are barred by judicial estoppel. It is far from clear that Moras, in fact, took a position in the bankruptcy proceedings that, in effect, they had been given proper notice of the foreclosure proceedings. This would require us to findbased upon judicial notice of the bankruptcy petitionthat Moras received proper notice of the foreclosure. As discussed, ante, while judicial notice of the bankruptcy pleading itself is proper, it cannot be concluded from the fact of its filing that Moras received the proper statutory notices. Further, even were we to conclude (which we do not) that the filing of the bankruptcy petition did constitute taking a position concerning notice, that conclusion would not address other legal theories asserted by Moras in the Complaint that were not even arguably addressed in the bankruptcy. These theories include (1) the claim that the sale had been postponed more than the three times permitted by statute, and (2) the assertion that Ocwen misrepresented the status of foreclosure proceedings in July 2005 (long after the conclusion of the bankruptcy proceedings). And applying judicial estoppel would require us to conclude that, assuming Moras took an inconsistent bankruptcy position, they did not take that position as a result of ignorance, fraud, or mistake. (Jackson, supra, 60 Cal.App.4th at p. 183.) It is not possible at this stage to reach that conclusion.

Ocwens assertion that judicial estoppel bars Moras claims fails for procedural reasons as well. In Cloud v. Northrop Grumman Corp., supra, 67 Cal.App.4th 995a case cited by Ocwenthe appellate court concluded that the trial court erred by granting judgment on the pleadings based upon the defense theory that plaintiff was judicially estopped from asserting her claims because she did not disclose them in prior bankruptcy proceedings: Clearly, consideration of whether a debtor has engaged in a deliberate scheme to mislead and gain unfair advantage, as opposed to having made a mistake born of misunderstanding, ignorance of legal procedures, lack of adequate legal advice, or some other innocent cause, requires consideration of the evidence. . . . [T]here is evidence which could negate the findings necessary to support the application of judicial estoppel in this case. Hence the trial court should not have attempted to decide this issue on a motion for judgment on the pleadings. (Id. at p. 1020; see also Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 510-511.)[11] Likewise, following the reasoning in Cloud, it is particularly inappropriate here to conclude at this early stage of the action that Moras claims are barred by judicial estoppel.

3. Breach of contract claim

Ocwen also contends that the demurrer to the second cause of action was properly sustained without leave to amend because the Complaint failed to state a breach of contract claim. Ocwen argues that, because Moras admitted that they were in default with respect to their obligations under the note and deed of trust, they cannot plead contract performance, a prerequisite for a breach of contract claim. We reject this contention as well.

One element of a breach of contract cause of action that must be pleaded is the plaintiffs performance or excuse for nonperformance. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388 (Careau & Co.).) Moras have pleaded that they performed their obligations required under the contract . . . or such performance has been otherwise discharged or [Moras] obligation to perform [has been] held in abeyance. Elsewhere in the Complaint, however, Moras allege that [a]s a consequence of temporary financial reverses, [Moras] had fallen behind in their payments to Ocwen. We reject Ocwens contention that Moras have not pleaded a breach of contract claim for at least three reasons.

First, [t]he general rule is that allegations of a complaint are to be liberally construed with a view to substantial justice between the parties. [Citation.] (Careau & Co., supra, 222 Cal.App.3d at p. 1387.) Viewing the totality of the allegations, the Complaint should be liberally construed as alleging that any nonperformance of Moras obligations has been excused by reason of (1) Ocwens and Cal-Westerns alleged failure to comply with all statutory foreclosure requirements, and (2) Ocwens alleged misrepresentation of the status of foreclosure upon which Moras detrimentally relied.

Second, were we to accept Ocwens position, it would be difficult to imagine a borrower being able to plead successfully a breach of contract claim in a case where his or her home was lost through a foreclosure proceeding that the borrower alleged was improperly conducted. If Ocwens position were accepted, the borrowers default would bar such a claim. This is clearly not the law.

Lastly, Ocwen argues that the breach of contract claim cannot be asserted because Morasbased upon the bankruptcy pleadings and other documents of which Ocwen requested judicial noticecannot claim either that they were ignorant of the status of foreclosure proceedings, or that they did not receive proper notice. This assertion must be rejected for the reasons stated, ante.

C. Ocwens Request for Judicial Notice

As part of its preliminary opposition to the petition, Ocwen requested that this court take judicial notice of documents not presented to the court below, namely, (1) the notice of dismissal of Moras bankruptcy proceeding; (2) Moras written responses to Ocwens document demands; and (3) excerpts from the respective depositions of Moras taken after the filing of this petition.

Such a request that this court take judicial notice of documents not considered by the trial courtand in some instances, documents that did not even exist when the court heard the demurrersis inappropriate. In Evans v. Pillsbury, Madison & Sutro (1998) 65 Cal.App.4th 599, the court, in considering the propriety of an order overruling a demurrer to one cause of action of a cross-complaint, denied the respondents (cross-complainants) request for judicial notice of a declaration not considered by the trial court: [The] declaration is a part of the trial courts file and thus a judicial record of which permissive judicial notice could be taken. (Evid. Code, 452, subd. (d).) Nevertheless, the declaration is not a subject for mandatory judicial notice, and the trial court was not asked to take judicial notice of the declaration in connection with appellants demurrer. The declaration is therefore not a proper subject for judicial notice. (Evid. Code, 459, subd. (a).) Respondents request is denied accordingly. (Id. at p. 605, fn. 5.)

None of the documents here was considered by the trial court. Indeed, unlike the circumstances in Evans, none of the documents was even part of the court file below. Accordingly, Ocwens request for judicial notice is denied.

IV. Propriety Of Mandamus

An order overruling a demurrer is not directly appealable but may be reviewed on an appeal from the final judgment. (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 912-913.) Appeal is presumed to be an adequate remedy, and therefore writ review is rarely granted unless a significant issue of law is raised, or resolution of the issue would result in a final disposition as to the petitioner. (Curry v. Superior Court (1993) 20 Cal.App.4th 180, 183.) Relief by mandamus may be appropriate when the trial court has deprived a party of an opportunity to plead a substantial portion of the case and extraordinary relief may prevent a needless trial and reversal. (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1223; see also North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 773.)

In this instance, mandamus is appropriate. Although the challenged order does not preclude Moras from proceeding against Ocwen on two of their claims for damages (misrepresentation), it effectively deprives Moras of relief against the remaining defendants (Cal-Western and the Buyers). In addition, the courts ruling deprives Moras of the remedy that, in light of the uniqueness of land, may be most desirable to them (equitable relief). Moreover, the orderinsofar as it concludes that there was no irregularity in the foreclosure sale, would probably have an adverse impact upon Moras remaining misrepresentation claims.

As we have concluded, ante, the trial court erred in sustaining the demurrers to the Complaint without leave to amend. That order effectively deprives Moras of an opportunity to plead a substantial portion of [their] case_[,] and extraordinary relief may prevent a needless trial and reversal. (Angie M. v. Superior Court, supra, 37 Cal.App.4th at p. 1223.) Accordingly, we will grant Moras petition for writ of mandamus.

DISPOSITION

Respondent superior court erred in sustaining without leave to amend the demurrers of real parties in interest Ocwen and Cal-Western to the second amended complaint. Accordingly, let a peremptory writ of mandate issue commanding the superior court to vacate its order and enter a new order overruling the demurrers.

Duffy, J.

WE CONCUR:

Premo, Acting, P.J.

Elia, J.

Publication courtesy of California pro bono legal advice.

Analysis and review provided by La Mesa Property line Lawyers.

[1] Moras allege further that they put Ocwen, Cal-Western, and Buyers on notice of the alleged sale irregularities before delivery and recordation of the trustees deed.

[2] Because the caption of the Complaint identifies the second cause of action as pertaining to Ocwen and Cal-Western, we infer that the cause of action charges these defendants only, and does not concern Buyers.

[3] The court also sustained without leave to amend the sixth cause of action of the first amended complaint seeking injunctive relief.

[4] Cal-Western also filed a request for judicial notice in support of its demurrer, asking that the court take judicial notice of the matters identified in Ocwens request for judicial notice in support of its demurrer to the first amended complaint. Those matters were the same as those in Ocwens later request for judicial notice, except that in its demurrer to the Complaint, Ocwen also asked the court to take judicial notice of various foreclosure postponements.

[5]Palma v. U.S. Fasteners, Inc. (1984) 36 Cal.3d 171.

[6] When any ground for objection to a complaint . . . appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to that pleading. (Code. Civ. Proc.,  430.30, subd. (a).)

[7] By the same token, the court could not have properly held that certain recorded documents attached to Ocwens request for judicial noticenamely, the substitution of trustee, notice of default, and notice of saleestablished that proper notice under the foreclosure statutes was given. At mostassuming arguendo that judicial notice of these recorded documents was properthey establish only that the notices were recorded on certain dates; they do not speak to the issue of whether service was properly effected on Moras.

[8] Prior to its amendment in September 2005, former Civil Code section 2924g, subdivision (c)(1) provided that [t]here may be a maximum of three postponements of the sale proceedings pursuant to this subdivision. In the event that the sale proceedings are postponed more than three times, the scheduling of any further sale proceedings shall be preceded by the giving of a new notice of sale, in the manner prescribed by [Civil Code] Section 2924f. (See Stats. 2001, ch. 438,  5, amended by Stats. 2005, ch. 224,  2, p. 1970.) Former Civil Code section 2924g, subdivision (c)(2), prior to its amendment in 2005, specifically excluded postponements due to pending bankruptcy proceedings or mutual agreement from the three-postponement limit of former subdivision (c)(1).

[9] The conclusion that the Complaint was sufficient to survive demurrer is, of course, not an expression of an opinion regarding the merits of Moras claims. It may very well be the case that Moras will be unable to establish the procedural irregularities in the foreclosure process that they allege. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199 [acknowledging that, while complaint stated prima facie case for relief sufficient to survive demurrer, the defendant could raise the same challenges later by motion for judgment on the pleadings or summary judgment].) But on reviewing the propriety of sustaining a demurrer to a complaint without leave to amend, we are not concerned with whether the plaintiff ultimately may be able to prove the allegations in his or her pleading. (Alcorn v. Anbro Engineering, Inc., supra, 2 Cal.3d at p. 496.)

[10] It appears that the entire amount of the indebtednesswere we to assume the accuracy of the recital in the trustees deed, a copy of which was attached to the Complaint (which is an assumption that is not a proper application of judicial notice)was approximately $224,000. The amount necessary to cure the arrearages cannot be determined from the record; the only document that provides any guidance is an unsigned forbearance agreement that recited that the amount due under the promissory note was $26,865.95, as of July 7, 2005. Ocwen contends that the amount of the required tender was the full amount of the loan, because the time period for a trustor to reinstate a delinquent loan, i.e., five business days prior to the trustees sale (Civ. Code,  2924c, subds. (a)(1), (e)) had elapsed. In light of the Complaints allegations of noncompliance with statutory procedure and misrepresentations by Ocwen concerning the status of foreclosure, however, we do not believe it appropriate to decide the question of the proper amount of the tender at this juncture.

[11] Ocwen also cites Conrad v. Bank of America (1996) 45 Cal.App.4th 133, in support of its position that Moras claims are barred by judicial estoppel. Conrad is plainly distinguishable. There, the trial court held that judicial estoppel applied to bar the plaintiffs claims. In so holding, the trial court granted the defendants motion for judgment notwithstanding the verdict, only after a full trial on the merits.