Opinion
H048463
08-11-2022
DAVID MERRITT et al., Plaintiffs and Appellants, v. SPECIALIZED LOAN SERVICING, LLC et al., Defendants and Respondents.
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. 18CV336876
Wilson, J.
I. INTRODUCTION
This appeal arises from the state court action that plaintiffs and appellants Salma Merritt and David Merritt filed in 2018 alleging that defendants and respondents U.S. Bank N.A., Bank of New York Mellon, Specialized Loan Servicing, LLC, Real Time Resolutions, and several individual defendants are liable as debt collectors for their wrongdoing in connection with the attempted foreclosure sale of the Merritts' home in Sunnyvale, which they purchased with financing in 2006. After the nonjudicial foreclosure sale of their home took place in October 2020, the Merritts filed a related wrongful foreclosure action. (Merritt et al. v. Specialized Loan Servicing, LLC et al. (Super. Ct. Santa Clara County, 2020, No. 20CV372516).)
The trial court ordered the two cases to be consolidated for all purposes in the January 13, 2021 order. On appeal, the Merritts seek review of the January 13, 2021 order, as well as five other prejudgment orders entered in the two cases. For the reasons stated below, we determine that the none of the orders are subject to review on the merits because the orders are either moot, not appealable, the notice of appeal was untimely filed, or the appeal from order was dismissed as abandoned.
II. FACTUAL AND PROCEDURAL BACKGROUND
In 2006 the Merritts entered into an agreement to purchase a home in Sunnyvale for $729,000. The financing for the home purchase involved two loans secured with first and second deeds of trust. The Merritts made the monthly payments on both loans until 2008, when they could no longer make the payments and defaulted on the loans. In 2009, the Merritts attempted to rescind the loan agreements and Bank of America, the loan servicer, offered to modify the loan agreements. The Merritts thereafter signed loan modification agreements acknowledging that the agreements modified and supplemented the original notes and the deeds of trust. However, the Merritts did not make any further payments on the loans.
We granted the Merritts' request for judicial notice of this court's prior opinion in a related appeal, Merritt et al. v. Mozilo et al. (Aug. 25, 2021, H047636 [nonpub. opn.]). On our own motion, we also take judicial notice of this court's prior opinion in another related appeal, Merritt et al. v. Countrywide Financial Corp. et al. (Sept. 17, 2019, H041560 [nonpub. opn.]). (Evid. Code, § 452, subd. (d)(1).) Our summary of the pertinent factual and procedural background includes some information that we have taken from these prior opinions.
A. First State Court Action
In 2009 the Merritts filed their first state court action arising from the financing of their 2006 home purchase. (Merritt et al. v. Countrywide Financial Corp. (Super. Ct. Santa Clara County, 2009, No. CV159993).) The defendants in that action included Bank of America, Countrywide Home Loans, Countrywide Financial Corp., JP Morgan Chase Bank, Bear Stearns, and several individual defendants. The Merritts alleged in their complaint that the defendants were liable for their predatory lending practices under several tort and statutory causes of action. After the defendants' motions for judgment on the pleadings were granted, the Merritts appealed from the judgment of dismissal. This court affirmed the judgment in Merritt et al. v. Countrywide Financial Corp., H041560, supra.
B. The Present State Court Action
This appeal arises from a subsequent state court action brought by the Merritts in 2018 that similarly concerns the financing of their 2006 home purchase. (Merritt et al. v. Specialized Loan Servicing, LLC et al. (Super. Ct. Santa Clara County, 2018, No. 18CV336876).) The record available on appeal indicates that the currently operative pleading is the verified third amended complaint. The named defendants include U.S. Bank N.A., Bank of New York Mellon, Specialized Loan Servicing, LLC, Real Time Resolutions, and several individual defendants. The Merritts allege that the defendants are liable as debt collectors under several tort and statutory causes of action. We understand the Merritts to also allege that they have rescinded the 2009 loan modifications and therefore defendants have no authority to foreclose.
During the course of the litigation, defendants filed a motion for an order requiring the Merritts to provide security for costs and fees in the amount of $500,000 pursuant to Code of Civil Procedure section 391.1 on the grounds that the Merritts had been previously declared to be vexatious litigants and there was no probability that they would prevail in the case. Defendants also sought a new prefiling order requiring the Merritts to obtain leave of the presiding justice of the court in which they seek to file the litigation before filing any new litigation in propria persona in any California court, pursuant to section 391.7, subdivision (a). Over the Merritts' opposition, the trial court granted the motion. In the October 20, 2020 order the trial court declared that the Merritts were vexatious litigants under section 391.7 and required them to post a bond in the amount of $250,000 pursuant to section 391.1. The order also provided that all previous prefiling orders pursuant to section 391.7, subdivision (a), would remain in full force in effect.
Unspecified statutory references are to the Code of Civil Procedure.
However, the trial court denied without prejudice defendants' request that the new prefiling order also apply to the Merritts when they are represented by counsel. In a January 14, 2021 order, the trial court amended the October 20, 2020 order to state that the Merritts were ordered to post a bond in the amount of $250,000 pursuant to sections 391.1 and 391.3 on or before February 16, 2021. The record on appeal does not show that the bond has been posted.
While defendants' motion for a security bond and prefiling order was pending, the Merritts filed an ex parte application for a temporary restraining order and an order to show cause regarding preliminary injunction that would bar defendants from taking any action to foreclose on the Merritts' Sunnyvale home, including the trustee's sale that was set in August 2020. The Merritts argued that injunctive relief was warranted because the deed of trust was void and defendants did not have authority to foreclose. The trial court denied the ex parte application in the September 10, 2020 minute order (written order filed September 24, 2020), finding that the Merritts had not met their burden to establish a reasonable probability of prevailing on the merits.
The Merritts filed a notice of appeal from the September 10, 2020 minute order denying their ex parte application for a temporary restraining order and order to show cause regarding preliminary injunction. The record on appeal reflects that the Merritts then filed an ex parte application for an order staying the September 10, 2020 order pending appeal pursuant to section 916, which the trial court denied in the order dated September 30, 2020 and filed on October 6, 2020.
C. Wrongful Foreclosure State Court Action
On November 3, 2020, the Merritts filed a state court action arising from the nonjudicial foreclosure sale of their Sunnyvale home that took place on October 16, 2020. (Merritt et al. v. Specialized Loan Servicing, LLC et al. (Super. Ct. Santa Clara County, 2020, No. 20CV372516).) The verified complaint names as defendants Specialized Loan Servicing, LLC, U.S. Bank N.A., and Zieve, Brodnax, and Steele, LLP. The Merritts allege that the foreclosure was wrongful because defendants did not have authority to foreclose on a deed of trust that was void due to the Merritts rescinding the 2009 loan modifications, and seek declaratory and injunctive relief.
After filing their wrongful foreclosure action, the Merritts filed an ex parte application for a temporary restraining order and an order to show cause regarding preliminary injunction restraining defendants from recording the post-foreclosure trustee's deed, transferring ownership, and evicting them from their Sunnyvale home. The Merritts did not give defendants notice of the ex parte application, and the trial court granted the application in the December 2, 2020 order, which issued the temporary restraining order as requested and an order to show cause regarding preliminary injunction. The record reflects that the hearing on the order to show cause has not been held.
Defendants then filed an ex parte application to consolidate the wrongful foreclosure action with the pending pre-foreclosure action. In support of the application, defendants argued that the Merritts had made the same allegations in both actions-that the loan agreements had been rescinded and defendants and their predecessors had no authority to foreclose-and the Merritts' purpose in filing the wrongful foreclosure action was to evade compliance with the October 20, 2020 prefiling order requiring them to post a $250,000 security bond.
On January 13, 2021, the trial court granted the ex parte application and ordered that the wrongful foreclosure case, No. 20CV372516, was consolidated with the pre-foreclosure case, No. 18CV336876, for all purposes, with the result that "only one set of findings of fact and conclusions of law if any, and only one judgment shall be made herein with respect to the consolidated cases. All further filings shall be made only in lead Case No. 18CV336876; there shall be no further filings in Case No. 20CV372516." The trial court further ordered that case No. 20CV372516 was subject to the vexatious litigant prefiling order entered in case No. 18CV336876, and therefore the prosecution of case No. 20CV372516 was stayed until the Merritts posted a security bond in the sum of $250,000.
Defendants also filed an ex parte application for an order dissolving the temporary restraining order that the trial court had issued on December 2, 2020, and denying a preliminary injunction. The trial court granted the application in the February 3, 2021 order, which states that the temporary restraining order had expired by operation of law. The February 3, 2021 order also states that the order to show cause regarding preliminary injunction was improvidently granted due to the Merritts' failure to give notice to defendants and failure to disclose either the previous denials of their requests for injunctive relief or the related case (No. 18CV336876) in which they had been declared vexatious litigants.
The Merritts then filed an ex parte application to vacate the February 3, 2021 order on the grounds that the order was void because they had filed a notice of appeal from the October 20, 2020 prefiling order declaring them to be vexatious litigants and imposing a security bond requirement, which they argued automatically stayed the trial court action under section 916. The trial court denied the application in the February 22, 2021 order. The record on appeal does not indicate that a judgment has been filed in either of the consolidated cases.
III. DISCUSSION
At the outset, we must determine the scope of our review, based on the three notices of appeal that the Merritts have filed in this matter. Defendants contend that the Merritts have not met their burden to specify the orders for which they seek review.
The California Supreme Court has instructed that "California Rules of Court, rule 8.100(a)(1) requires that, '[t]o appeal from a superior court judgment or an appealable order of a superior court, . . . an appellant must serve and file a notice of appeal in that superior court.' Rule 8.100(a)(2) further provides that '[t]he notice of appeal must be liberally construed. The notice is sufficient if it identifies the particular judgment or order being appealed.'" (K.J. v. Los Angeles Unified School Dist. (2020) 8 Cal.5th 875, 882, fn. omitted (K.J.).) Thus, "Rule 8.100(a)(2)'s liberal construction requirement reflects the long-standing' "law of this state that notices of appeal are to be liberally construed so as to protect the right of appeal if it is reasonably clear what [the] appellant was trying to appeal from, and where the respondent could not possibly have been misled or prejudiced." '" (Ibid.)
Applying these rules of liberal construction, we understand the Merritts to seek review of six orders based on the three notices of appeal filed in this case, including (1) the September 10, 2020 minute order denying their ex parte application for a preliminary injunction and dissolving the temporary restraining order; (2) the October 6, 2020 order (dated September 30, 2020) denying their ex parte application to enforce an automatic stay of foreclosure proceedings pending appeal pursuant to section 916; (3) the October 20, 2020 prefiling order imposing a $250,000 security bond requirement; (4) the January 13, 2021 order granting defendants' application for consolidation; (5) the February 3, 2021 order dissolving the December 2, 2020 temporary restraining order and denying a preliminary injunction; and (6) the February 22, 2021 order denying their ex parte application to vacate the February 3, 2021 order. We will address each order in turn.
A. September 10, 2020 Minute Order
In the September 10, 2020 minute order (written order filed September 24, 2020) the trial court denied the Merritts' ex parte application for a temporary restraining order and an order to show cause regarding preliminary injunction that would prevent defendants from taking any action to foreclose on the Merritts' Sunnyvale home, including the trustee's sale that was set in August 2020. The minute order also instructed defense counsel "to re-notice Foreclosure Sale." The Merritts filed a notice of appeal on September 14, 2020 seeking review of the September 10, 2020 minute order.
We understand the Merritts to contend that the trial court erred in denying their application for injunctive relief on the ground that they had no probability of success on the merits. Defendants respond that the September 10, 2020 minute order is moot because the foreclosure sale of the Merritts' home has taken place. We agree.
" 'It is well settled that an appellate court will decide only actual controversies and that a live appeal may be rendered moot by events occurring after the notice of appeal was filed. We will not render opinions on moot questions or abstract propositions, or declare principles of law which cannot affect the matter at issue on appeal.'" (Building a Better Redondo, Inc. v. City of Redondo Beach (2012) 203 Cal.App.4th 852, 866 (Building a Better Redondo).) "A case is moot when the decision of the reviewing court 'can have no practical impact or provide the parties effectual relief.'" (MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 214.)
It follows that "[a]n appeal from an order denying a temporary restraining order or preliminary injunction will not be entertained after the act sought to be enjoined has been performed." (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 208 (Ragland).) Thus, where the foreclosure sale has taken place, the appeal from an order denying a temporary restraining order or preliminary injunction to prevent the foreclosure sale is moot. (Id. at pp. 208-209.)
Since the Merritts have stated in their verified complaint that the foreclosure sale of their Sunnyvale home took place on October 16, 2020, their appeal from the September 10, 2020 order denying their application for a temporary restraining order and preliminary injunction to prevent the foreclosure sale is moot. (See Ragland, supra, 209 Cal.App.4th at pp. 208-209.)
B. October 6, 2020 Order
In the October 6, 2020 order (dated September 30, 2020) the trial court denied the Merritts' ex parte application for an order enforcing an automatic stay of foreclosure proceedings pending their appeal of the September 10, 2020 minute order pursuant to section 916. The Merritts filed an amended notice of appeal on October 6, 2020 seeking review of the October 6, 2020 order.
Section 916 generally provides that" 'the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.' (§ 916, subd. (a).) The purpose of the automatic stay provision of section 916, subdivision (a) 'is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided. The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.'" (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189, fn. omitted.)
We need not determine whether the trial court erred in denying the Merritts' application for an order enforcing a stay pursuant to section 916, since we find that we lack jurisdiction to review the merits of the October 6, 2020 order because it is not an appealable order. "The right to appeal is wholly statutory. [Citation.] [Section] 904.1 lists appealable judgments and orders." (Dana Point Safe Harbor Collective v. Superior Court (2010) 51 Cal.4th 1, 5.) Thus, "[a] reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment." (Griset v. Fair Political Practices Com. (2001) 25 Cal.4th 688, 696.) An order denying an application to enforce an automatic stay pending appeal under section 916 is not one of the orders listed in section 904.1.
"[T]he appropriate method of challenging the denial of an order to enforce the stay arising under section 916 is a petition for writ of supersedeas [citations]." (Hedwall v. PCMV, LLC (2018) 22 Cal.App.5th 564, 572; Estate of Dabney (1951) 37 Cal.2d 402, 408.) On our own motion, pursuant to Evidence Code section 452, subdivision (d)(1), we take judicial notice of the petition for writ of supersedeas that the Merritts filed on October 5, 2020, in this court seeking a stay of foreclosure proceedings while their appeal was pending, and this court's order summarily denying of the petition.
For these reasons, we determine that the October 6, 2020 order denying the Merritts' ex parte application for an order enforcing an automatic stay of foreclosure proceedings pursuant to section 916 is not an appealable order and we lack jurisdiction to review the order on the merits.
C. October 20, 2020 Prefiling Order
The Merritts contend that the trial court erred in granting defendants' motion for a prefiling order and security bond and issuing the October 20, 2020 prefiling order declaring them to be vexatious litigants under section 391.7 and requiring a $250,000 security bond. According to the Merritts, the trial court erred because they demonstrated a strong likelihood of success on the merits of their claims and therefore defendants' application should have been denied. Defendants argue that this court lacks jurisdiction to review the October 20, 2020 prefiling order because the Merritts did not file a timely notice of appeal from that order. Defendants are correct.
" '[T]he timely filing of an appropriate notice of appeal or its legal equivalent is an absolute prerequisite to the exercise of appellate jurisdiction.'" (K.J., supra, 8 Cal.5th at p. 881.) California Rules of Court provide that an appellant must ordinarily file the notice of appeal on or before the earliest of the following dates: (A) "60 days after the superior court clerk serves . . . a document entitled 'Notice of Entry' of judgment"; (B) "60 days after . . . [being] served by a party with a document entitled 'Notice of Entry' of judgment or a filed-endorsed copy of the judgment, accompanied by proof of service"; or (C) "180 days after entry of judgment." (Cal. Rules of Court, rule 8.104(a)(1)(A)-(C).) As used in this rule, a" 'judgment' includes an appealable order." (Cal. Rules of Court, rule 8.104(e).)
Here, the record reflects that the October 20, 2020 prefiling order was served on the Merritts by the clerk of the superior court by mail on October 20, 2020. The last day for the Merritts to file a notice of appeal from the October 20, 2020 order was therefore December 20, 2020. (Cal. Rules of Court, rule 8.104(a)(1)(A).) Since the Merritts did not file a notice of appeal from the October 20, 2020 order until they filed their second amended notice of appeal in this case on February 26, 2021, their notice of appeal is untimely and we lack jurisdiction to review the order. (See K.J., supra, 8 Cal.5th at p. 881.)
We observe that the appellants' appendix includes a notice of appeal from the October 20, 2020 prefiling order that was originally filed on October 22, 2020, then filed on October 26, 2020, according to the amended clerk's notice of appeal. The October 26, 2020 notice of appeal does not provide this court with jurisdiction, however. On our own motion, we take judicial notice of this court's records in a prior related appeal, H048578, Merritt et al. v. Specialized Loan Servicing, LLC et al., which show that the October 26, 2020 notice of appeal was filed in the prior related appeal, and that an abandonment of that appeal was filed in this court on November 17, 2020. (Evid. Code, § 452, subd. (d)(1).)
Since we lack jurisdiction to review the October 20, 2020 prefiling order, we need not address the merits in this appeal.
D. January 13, 2021 Consolidation Order
On January 13, 2021, the trial court granted defendants' ex parte application and ordered that case No. 20CV372516 was consolidated with case No. 18CV336876 for all purposes, with the "result [that] only one set of findings of fact and conclusions of law if any, and only one judgment shall be made herein with respect to the consolidated cases. All further filings shall be made only in lead Case No. 18CV336876; there shall be no further filings in Case No. 20CV372516."
We understand the Merritts to contend that the trial court erred in granting consolidation because they did not receive notice of defendants' ex parte application and the order is void due to their pending appeal, pursuant to section 916. Defendants respond that an order granting a motion for consolidation is not an appealable order.
Regarding consolidation, section 1048, subdivision (a) provides: "When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay."
Our Supreme Court has instructed that "[a]n order of consolidation is not appealable, [former section 963, now section 904.1,] but is reviewable only upon appeal from a subsequent judgment." (State Farm Mut. Auto. Ins. Co. v. Superior Court (1956) 47 Cal.2d 428, 432.) In the present case, there is nothing in the record to indicate that a judgment has been entered in either of the consolidated cases. We therefore determine that the January 13, 2021 order consolidating case No. 20CV372516 with case No. 18CV336876 for all purposes is not an appealable order, and we need not consider the order further.
E. February 3, 2021 Order
After the trial court granted the Merritts' ex parte application for a temporary restraining order and issued an order to show cause regarding preliminary injunction preventing the foreclosure sale of their home, as stated in the December 2, 2020 order, defendants filed an ex parte application for an order dissolving the temporary restraining order and denying a preliminary injunction.
In the February 3, 2021 order, the trial court granted defendants' application for an order dissolving the temporary restraining order and denying the preliminary injunction. As we have noted, the February 3, 2021 order stated that the order to show cause regarding preliminary injunction was improvidently granted due to the Merritts' failure to give notice to defendants and failure to disclose either the previous denials of their requests for injunctive relief or the related case (No. 18CV336876) in which they had been declared vexatious litigants.
On appeal, we understand the Merritts to argue that the February 3, 2021 order is void or otherwise legally incorrect, and they did not receive notice of defendants' ex parte application. We need not consider the Merritts' arguments regarding the February 3, 2021 order because we determine the appeal of that order is moot.
As we have discussed, "[a]n appeal from an order denying a temporary restraining order or preliminary injunction will not be entertained after the act sought to be enjoined has been performed." (Ragland, supra, 209 Cal.App.4th at p. 208.) Thus, where, as here, the foreclosure sale has taken place, the appeal from an order denying a temporary restraining order or preliminary injunction to prevent the foreclosure sale is moot. (Id. at pp. 208-209.)
The Merritts having stated in their verified complaint that the foreclosure sale of their Sunnyvale home took place on October 16, 2020, their appeal from the February 3, 2021 order dissolving the temporary restraining order preventing the foreclosure sale of their home and issuing an order to show cause regarding preliminary injunction is moot. (See Ragland, supra, 209 Cal.App.4th at pp. 208-209.) As we have discussed, we do not render opinions on moot questions. (See Building a Better Redondo, supra, 203 Cal.App.4th at pp. 866-867.)
F. February 22, 2021 Order
In the February 22, 2021 order, the trial court denied the Merritts' ex parte application to vacate the February 3, 2021 order, in which they argued that the February 3, 2021 order was void because they had previously filed a notice of appeal from the October 20, 2020 prefiling order and therefore the trial court action was automatically stayed under section 916. Defendants assert that the Merritts have waived their challenge to the February 22, 2021 order because their opening brief does not include any argument regarding the February 22, 2021 order.
The general rule is that an appellant must present argument supported by relevant legal authority as to each issue raised on appeal:" '[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration.'" (People v. Stanley (1995) 10 Cal.4th 764, 793.) We may also deem an appeal to be abandoned where the appellant fails to present argument and authorities as to each claim of error. (In re Sade C. (1996) 13 Cal.4th 952, 994 (Sade).)
Having reviewed the Merritts' briefing on appeal, we find that the Merritts have not presented any argument or authorities to support a claim of error regarding the February 22, 2021 order. We therefore determine that the Merritts have abandoned their appeal with respect to the February 22, 2021 order, and we need not consider it further. (See Sade, supra, 13 Cal.4th at p. 994.)
IV. DISPOSITION
The appeal from the September 10, 2020 minute order (written order filed September 24, 2020) is dismissed as moot. The appeal from the October 6, 2020 order, dated September 30, 2020 is dismissed as taken from a nonappealable order. The appeal from the October 20, 2020 prefiling order is dismissed as untimely. The appeal from the January 13, 2021 consolidation order is dismissed as taken from a nonappealable order. The appeal from the February 3, 2021 order is dismissed as moot. The appeal from the February 22, 2021 order is dismissed as abandoned. Costs on appeal are awarded to the respondents.
WE CONCUR: Greenwood, P.J. Danner, J.