Opinion
G056707
06-03-2020
CYNTHIA L. BROWN, Plaintiff and Appellant, v. BANK OF NEW YORK MELLON, Defendant and Respondent.
Cynthia L. Brown, in pro. per.; and James Imperiale for Plaintiff and Appellant. The Ryan Firm, Timothy M. Ryan, Andrew J. Mase, and Tadeusz McMahon for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2017-00928877) OPINION Appeal from a judgment of the Superior Court of Orange County, Nathan R. Scott, Judge. Affirmed. Cynthia L. Brown, in pro. per.; and James Imperiale for Plaintiff and Appellant. The Ryan Firm, Timothy M. Ryan, Andrew J. Mase, and Tadeusz McMahon for Defendant and Respondent.
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This is not the first time we have seen the allegations in this wrongful foreclosure lawsuit. In 2015, we affirmed a summary judgment in favor of defendant Bank of New York Mellon (Mellon) in a lawsuit where plaintiff Cynthia L. Brown alleged certain individuals had fraudulently induced her to sign a $880,000 promissory note and deed of trust on her residence by promising her a $15 million line of credit that never materialized. (Brown v. Foigelman (Mar. 10, 2015, G048422) [nonpub. opn.].) Mellon had nothing to do with the fraud; it was apparently a good-faith purchaser of the promissory note and deed of trust sometime after the fact. Brown's allegation as to Mellon was simply that the fraud rendered the note and deed of trust void. In this new lawsuit, she makes the same allegations.
Previously, we affirmed a summary judgment on causes of action for quiet title and cancellation of instruments, concluding that the note and deed of trust were valid despite the alleged fraud in the inducement. Here, Brown has alleged causes of action for wrongful foreclosure, quiet title, cancellation of instruments, defamation of credit, and a violation of Business and Professions Code section 17200 et seq. Of those causes of action, only wrongful foreclosure and defamation of credit are in any sense new, and that is only because the alleged injuries happened after the previous lawsuit.
We conclude Brown's lawsuit is barred by the doctrines of res judicata and collateral estoppel, and thus hold the court correctly sustained Mellon's demurrer. Except for the wrongful foreclosure and defamation of credit causes of action, Brown's lawsuit is functionally identical to the previous lawsuit that resulted in a judgment in favor of Mellon. As to the wrongful foreclosure and defamation causes of action, they are premised on the invalidity of the note and deed of trust. But in affirming the previous summary judgment we determined that "the $880,000 note and deed of trust are not void." (Brown v. Foigelman, supra, G048422.) That ruling binds Brown under principles of collateral estoppel.
Brown's alternative theory of wrongful foreclosure is that her mortgage was acquired by Mellon as trustee for a securitized trust after the closing date listed in a pooling and servicing agreement. We conclude Brown lacks standing to assert this claim because she has not alleged facts showing the assignment was void.
FACTS
On September 19, 2019, Brown requested that we take judicial notice of 23 items. Eighteen items are various California statutes and published cases for which no judicial notice is necessary. The other five items were not before the trial court at the time of its ruling and therefore are neither relevant to this appeal nor necessary to consider in rendering this opinion. Accordingly, the September 19, 2019 request for judicial notice is denied. On May 14, 2020, Brown filed a supplemental request for judicial notice of seven additional items. Likewise, none of those items were before the trial court at the time of its ruling and therefore are neither relevant to this appeal nor necessary to consider in rendering this opinion. Accordingly, the May 14, 2020 request for judicial notice is denied.
Because we have already thoroughly set forth the facts underlying this lawsuit in our previous opinion, we provide only a brief summary here.
Brown alleges that in December 2005 a deed of trust was recorded against her property as a result of fraud. The deed of trust secured a debt of $880,000. Brown alleges that her signature on that deed of trust was forged by copying her signature from two prior deeds of trust recorded in November and December 2005, totaling $880,000. She contends one of those deeds had been rescinded and the other stolen from her home and subsequently recorded. The individual allegedly responsible for this fraud was one Craig Dimond and his related entities. In 2013, the California Department of Business Oversight issued a cease and desist letter to Dimond, accusing him of operating a ponzi scheme and prohibiting him from selling any security in the State of California.
The note and deed of trust were ultimately acquired by Mellon, pooled with other mortgages, and made part of a securitized trust. Mellon had no involvement in the fraud.
In June 2014, a notice of default was recorded against Brown's residence. A trustee's sale occurred in November 2015, though the notice of sale was not recorded until January 2016.
Brown filed this lawsuit in June 2017. She purports to have served the complaint on Mellon in July 2017, but her proof of service demonstrates that the purported service was on an unknown attorney at the law firm of Zieve, Brodnax, and Steele. Service was accomplished by an individual who was not a registered process server. That person declared that Zieve, Brodnax, and Steele were Mellon's attorneys of record, but it is unclear in what capacity they were attorneys of record—Mellon had not previously appeared in the present lawsuit and thus could not have had attorneys of record in the present lawsuit. Mellon did not file a timely answer based on that service, at which point Brown attempted to take Mellon's default. The court rejected the request for default, however, because there was no proof of service on file.
Despite not being served, Mellon filed a demurrer in October 2017 on the ground, inter alia, that the complaint was barred by the doctrines of res judicata and collateral estoppel. Brown filed an untimely opposition that the court ultimately refused to consider. The court's tentative decision was to sustain the demurrer with leave to amend for most causes of action. After oral argument, at which Brown failed to appear, the court modified its tentative ruling to sustain the demurrer without leave to amend. The oral argument was not transcribed and the reason for the court's decision does not appear in the minute order. The court entered a judgment of dismissal in March 2018.
Shortly thereafter, Brown moved to vacate the judgment under Code of Civil Procedure section 473, subdivision (b), contending she failed to appear for oral argument because Mellon did not provide her with a notice that it would be appearing for oral argument after the posting of the tentative ruling. Mellon opposed the motion, contending that no such notice is required in Orange County Superior Court. The court agreed with Mellon and denied the motion. Brown appealed.
DISCUSSION
Brown devotes more space in her brief to addressing perceived procedural errors surrounding the demurrer than she does to the merits of the court's ruling. She renews her contention that Mellon failed to give her notice to appear, alleges Mellon's counsel made unspecified misrepresentations, suggests the court erred in refusing to consider her belated opposition to the demurrer, and states (without analysis) that the court erred in refusing to enter Mellon's default.
Ultimately, however, we review the trial court's ruling on a demurrer de novo. (Moreno v. Sanchez (2003) 106 Cal.App.4th 1415, 1423.) As a result, any procedural deficiencies in the trial court are necessarily harmless—if we conclude the complaint fails to state a cause of action, then she is not entitled to relief in any event; if it does state a cause of action, we would reverse on that ground. Accordingly, we will only address the merits of the complaint in this appeal.
We conclude that most of the complaint is barred by res judicata and collateral estoppel.
"'"The doctrine of res judicata gives conclusive effect to a former judgment in subsequent litigation between the same parties involving the same cause of action. A prior judgment for the plaintiff results in a merger and supersedes the new action by a right of action on the judgment. A prior judgment for the defendant on the same cause of action is a complete bar to the new action. [Citation.] Collateral estoppel . . . involves a second action between the same parties on a different cause of action. The first action is not a complete merger or bar, but operates as an estoppel or conclusive adjudication as to such issues in the second action which were actually litigated and determined in the first action."'" (Murray v. Alaska Airlines, Inc. (2010) 50 Cal.4th 860, 866-867.)
Both doctrines have application here.
First, res judicata bars any claims Brown actually brought or could have brought in her first complaint alleging fraud associated with the deed of trust. Under the doctrine of res judicata, "all claims based on the same cause of action must be decided in a single suit; if not brought initially, they may not be raised at a later date." (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897.) A cause of action, for purposes of this doctrine, is defined by a primary right: "'the primary right is simply the plaintiff's right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: "Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief." [Citation.] The primary right must also be distinguished from the remedy sought: "The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other."'" (Id. at p. 904.)
Here, the primary right upon which Brown's first complaint was based was her right not to be defrauded by Dimond and his related entities. Much of her current complaint is based on the same wrongdoing. She has once again alleged causes of action for quiet title and cancellation of instruments—the exact causes of action upon which we affirmed a summary judgment in the prior proceeding. Those causes of action are plainly barred by res judicata. Brown's cause of action for violation of Business and Professions Code section 17200 is based on those same allegations and is thus likewise barred.
Two causes of action are arguably outside the bar of res judicata: wrongful foreclosure and defamation of credit. The alleged wrongful foreclosure occurred in 2015, after the prior judgment was final. The defamation of credit has allegedly taken place since June 2014, which was after the prior judgment had been entered.
However, both of those causes of action are based on Brown's contention that the note and deed of trust held by Mellon is void. But that exact issue was adjudicated in the prior summary judgment adversely to Brown, and we specifically upheld that finding on appeal. (Brown v. Foigelman, supra, G048422; see 7 Witkin, Cal. Procedure (5th ed. 2008) Judgment, § 372, p. 995 ["A judgment entered after granting a motion for summary judgment is as final and conclusive a determination of the merits as a judgment after trial"].) By operation of collateral estoppel, Brown is barred from relitigating that issue here. Accordingly, except for one claim addressed below, Brown's complaint is entirely barred by res judicata and collateral estoppel.
The one claim that may survive is Brown's alternative basis for wrongful foreclosure: that Mellon, as trustee of a securitized pool of mortgages, acquired Brown's mortgage after the closing date listed in the pooling and servicing agreement, and thus the assignment to Mellon was void. However, we conclude Brown has no standing to assert that alleged breach of the pooling and servicing agreement.
In Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, our high court held that homeowners have standing to challenge assignments of their mortgage on the ground that the transfer is void, but not on the ground that it is merely voidable. (Id. at p. 939.) Our high court, however, specifically declined to address the issue of whether a transfer to a securitized trust after the closing date in the pooling and servicing agreement renders the assignment void or merely voidable. (Id. at p. 931.)
The seminal authority on whether such a transfer is void or merely voidable is Rajamin v. Deutsche Bank Nat. Trust Co. (2d Cir. 2014) 757 F.3d 79. After a thorough analysis, the Rajamin court concluded, "In sum, we conclude that as unauthorized acts of a trustee may be ratified by the trust's beneficiaries, such acts are not void but voidable; and that under New York law such acts are voidable only at the instance of a trust beneficiary or a person acting in his behalf. Plaintiffs here are not beneficiaries of the securitization trusts; the beneficiaries are the certificateholders. Plaintiffs are not even incidental beneficiaries of the securitization trusts, for their interests are adverse to those of the certificateholders." (Id. at p. 90.) Rajamin has been widely cited around the country and we are not aware of any case that has disagreed with its analysis.
Here, Brown alleges the securitized trust was governed by New York law and is void because the trust acquired her mortgage after the closing date listed in the pooling and servicing agreement. We have seen this generic allegation countless times. Based on Rajamin, this allegation is insufficient to establish that the transfer was void. And without a sufficient allegation that the transfer was void, Brown does not have standing to challenge the transfer. Brown has not addressed this issue on appeal and, therefore, has not argued that she could amend the complaint to include allegations establishing that the transfer was void. Thus, the court did not err in sustaining the demurrer without leave to amend on this ground.
DISPOSITION
The judgment is affirmed. Mellon shall recover its costs incurred on appeal.
IKOLA, J. WE CONCUR: ARONSON, ACTING P. J. FYBEL, J.