Opinion
08-21-2013
ANDREA MICHAEL ANIA, Plaintiff and Appellant, v. DEUTSCHE BANK NATIONAL TRUST COMPANY et al., Defendants and Respondents.
Andrea Michael Ania, in pro. per., for Plaintiff and Appellant. Pite Duncan, Peter J. Salmon, Laurel I. Handley and Cuong M. Nguyen for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2011-00066378-CU-WE-EC)
APPEAL from a judgment of the Superior Court of San Diego County, Joel R. Wohlfeil, Judge. Affirmed.
Andrea Michael Ania, in pro. per., for Plaintiff and Appellant.
Pite Duncan, Peter J. Salmon, Laurel I. Handley and Cuong M. Nguyen for Defendants and Respondents.
Appearing in propria persona, Andrea Ania contends the court erred in sustaining a demurrer without leave to amend on his second amended complaint against defendants Deutsche Bank National Trust Company (Deutsche Bank) and Central Mortgage Company (Central Mortgage). We reject Ania's contentions and affirm the judgment.
Although Ania did not specifically identify Central Mortgage in its notice of appeal, we construe the notice liberally to include this defendant.
FACTUAL AND PROCEDURAL SUMMARY
Because we are reviewing a judgment after a demurrer, we assume the truth of the properly pleaded factual allegations of Ania's second amended complaint and the information contained in documents properly judicially noticed. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 (Schifando).)
In March 2005, Eugenio Beltrame and Frank DeSantis (collectively Homeowners) obtained a $388,000 loan from Downey Savings and Loan Association (Downey). The loan was evidenced by a promissory note and deed of trust on the property. In December 2005, Downey assigned the note and deed of trust to Mortgage Electronic Registration Systems, Inc. (MERS). The assignment was recorded in January 2006.
Several years later, in November 2008, Ania entered into a three-year lease agreement with Homeowners, with an option to purchase the property. Ania paid $12,000 for the option to purchase. The lease term was from December 1, 2008 through December 2, 2011.
In June 2009, the Homeowners stopped making their mortgage payments. On September 24, 2009, Old Republic Default Management Services (Old Republic), acting as "agent for the trustee or beneficiary," recorded a notice of default. On October 13, 2009, MERS assigned the note and deed of trust to Central Mortgage. On or about that same date, Central Mortgage assigned the note and deed of trust to Deutsche Bank and substituted Old Republic as trustee.
On March 26, 2010, Old Republic recorded a notice of trustees' sale (a nonjudicial foreclosure sale). The next month, in April 2010, Deutsche Bank purchased the property at the foreclosure sale. On April 19, 2010, a trustees' deed was recorded showing Deutsche Bank as the owner of the property.
After the foreclosure sale, Ania remained living at the property.
In January or February 2011, Deutsche Bank filed an unlawful detainer complaint seeking to evict Ania from the property based, in part, on its allegation that Ania was not making the required lease payments. (See Code Civ. Proc., § 1161a, subd. (b)(3) (§ 1161a(b)(3).) In opposition, Ania argued that Deutsche Bank did not hold lawful title "by way of a Duly Perfected Title." Ania claimed Deutsche Bank obtained title through "wrongful assignments" and ultimately a "wrongful foreclosure sale."
Deutsche Bank moved for summary judgment and, on October 26, 2011, the court entered final judgment in Deutsche Bank's favor on its unlawful detainer complaint. Ania appealed to the appellate division of the superior court. In January 2013, the appellate division dismissed the appeal as moot because Ania had not sought a stay of the judgment and the property had been sold to a third party.
The judgment became final while this appeal was pending. On our own motion, we took judicial notice of this fact. (See Evid. Code, §§ 452, subd. (d), 459, subd. (a).) We grant defendants' unopposed motion for judicial notice of other documents filed in the unlawful detainer action. (Ibid.) Ania requested that we also take judicial notice of various documents attached to his complaint. We denied this motion as moot because the documents were already in the appellate record. We have considered these documents to the extent they are relevant to the appellate issues.
Ania also filed a separate action against Deutsche Bank and Central Mortgage (this action), alleging numerous causes of action based on the same factual claim he raised in the unlawful detainer proceedings, i.e., that Deutsche Bank wrongfully obtained title to the property and thus had no authority to seek to evict Ania or take possession of the property. The court sustained defendants' demurrers to Ania's original and first amended complaints on several grounds.
In December 2011, Ania filed a second amended complaint. The complaint is 51 pages, alleges 14 causes of action, and contains numerous attachments. Of relevance here: (1) the fifth cause of action alleges violation of the federal law known as the Protecting Tenants at Foreclosure Act of 2009 (PTFA) (Pub.L. No. 111-22 (May 20, 2009) 123 Stat. 1661); (2) the seventh and eighth causes of action allege wrongful foreclosure (Civ. Code, §§ 2924b, subd. (c), 2932.5, 2941.9); and (3) the twelfth cause of action alleges wrongful eviction.
The primary factual basis for each of these claims was Ania's allegations that Deutsche Bank did not acquire valid title through its purchase of the property at the foreclosure sale because: (1) the entities that initiated or were involved in the foreclosure sale (including Central Mortgage and Old Republic) had no authority to record the default or conduct the foreclosure sale; and (2) the first note holder (Downey) sold the note to a third party in May 2005 and thus Downey did not validly hold or own the note when it assigned the note and deed of trust to MERS in December 2005. In support of this latter contention, Ania attached a document dated September 1, 2004 and entitled Master Mortgage Loan Purchase and Interim Servicing Agreement.
Deutsche Bank and Central Mortgage demurred, arguing that the claims lack merit on various procedural grounds, including: (1) Ania had no standing to challenge the foreclosure sale because he was neither a borrower on the loan nor a trustor on the deed of trust; (2) there is no private right of action to bring a PTFA claim; and (3) the res judicata doctrine bars the claims because the validity of Deutsche Bank's title had been decided in the unlawful detainer action. On the merits of the claims, defendants argued Deutsche Bank obtained valid title at the foreclosure sale because the sale was properly noticed and conducted, and to the extent there were any irregularities in the transfer of the note or deed of trust, these irregularities were not prejudicial to Ania. In support of these arguments, defendants requested the court to judicially notice various recorded documents relating to the note and deed of trust and the foreclosure sale.
In opposition, Ania argued the second amended complaint adequately alleged that the foreclosure sale was "improper and Void." He raised numerous arguments, including that Deutsche Bank obtained title through a flawed foreclosure sale, and therefore Deutsche Bank was "powerless and without authority to initiate an unlawful[] detainer action and the eviction [was] Wrongful[] and Improper." Ania requested the court to take judicial notice of various documents, including several recorded documents pertaining to the Homeowners' secured loan and the nonjudicial foreclosure sale at which the Homeowners' property was sold.
After a hearing, the court took judicial notice of a bankruptcy dismissal order and several recorded title documents, including those submitted by Ania, but declined to take judicial notice of several additional (nonrecorded) documents. The court then sustained the demurrer without leave to amend. The court concluded that the claims failed on procedural and substantive grounds, and issued a detailed explanation for its rulings on each cause of action.
DISCUSSION
I. Review Standards
A demurrer tests the sufficiency of a complaint by raising questions of law. On appeal, we exercise our independent judgment to determine whether the complaint states a cause of action. (City of Morgan Hill v. Bay Area Air Quality Management Dist. (2004) 118 Cal.App.4th 861, 869.) A trial court errs in sustaining a demurrer when the plaintiff has stated a cause of action under any possible legal theory. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) In conducting our review, we must accept as true all properly pleaded material facts and facts contained in materials properly judicially noticed, but do not accept the truth of contentions, deductions or conclusions of law. (Id. at p. 967.) We are not bound by the trial court's stated reasons and must affirm the judgment if any ground offered in support of the demurrer was well taken. (Walgreen Co. v. City and County of San Francisco (2010) 185 Cal.App.4th 424, 433.)
We apply an abuse of discretion standard in reviewing the court's refusal to permit an amendment. The court abuses its discretion if there is a reasonable possibility an amendment would cure the defects. (Schifando, supra, 31 Cal.4th at p. 1081.) A plaintiff has the burden to show how the complaint could be amended to state a viable cause of action. (Ibid.)
II. Analysis
On appeal, Ania challenges the court's ruling only on his wrongful eviction claim against Deutsche Bank. That claim is based on Ania's contention that Deutsche Bank did not have a right to evict him from the property because Deutsche Bank obtained title through a flawed foreclosure process and/or through improper prior transfers of Ania's former landlord's note and deed of trust.
This claim is without merit for several reasons.
First, Deutsche Bank obtained the eviction through appropriate judicial procedures, i.e., an unlawful detainer action and a writ of possession. In this situation, a party has no valid tort cause of action for a wrongful eviction. (See Munoz v. MacMillan (2011) 195 Cal.App.4th 648, 653; Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1042; see also Friedman et al., Cal. Practice Guide: Landlord-Tenant (The Rutter Group 2012) ¶ 7:37.5, p. 7-13 ["no 'wrongful eviction' damages liability . . . when the tenant was ousted of possession using orderly judicial processes in good faith and pursuant to a properly issued writ of possession"].)
Second, Ania's claim is barred by res judicata and collateral estoppel doctrines because the same issues asserted in the wrongful eviction claim were necessarily litigated in the unlawful detainer proceeding and decided adversely to Ania in that proceeding.
Under the res judicata doctrine, a party is barred from relitigating "the same cause of action in a second suit between the same parties or parties in privity with them." (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896, italics added.) Under the collateral estoppel doctrine, a party is precluded from relitigating an issue already decided in a prior litigation even if the causes of action were different. (Ibid.; Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 828.) These doctrines " ' "promote judicial economy by minimizing repetitive litigation, . . . prevent inconsistent judgments which undermine the integrity of the judicial system, [and] . . . protect against vexatious litigation." [Citation.]' [Citation.]" (Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869, 878.)
In Vella v. Hudgins (1977) 20 Cal.3d 251, the California Supreme Court recognized and approved of decisions holding that an unlawful detainer judgment bars subsequent litigation of issues challenging the validity of title based on irregularities in a nonjudicial foreclosure sale. (Id. at pp. 255-258.) Relying on Vella, state and federal courts have consistently held that a former owner's claims alleging irregularity of title related to a foreclosure sale are barred after an unlawful detainer judgment in favor of the party who purchased the property at the foreclosure sale. (See Malkoskie v. Option One Mortgage Corp. (2010) 188 Cal.App.4th 968, 972-976 (Malkoskie); Hopkins v. Wells Fargo Bank, N.A. (E.D.Cal., May 22, 2013) 2013 WL 2253837, pp. *4-*6; Castle v. Mortgage Electronic Registration Systems, Inc. (C.D.Cal., Aug. 16, 2011) 2011 WL 3626560, pp. *6-*11; Dancy v. Aurora Loan Services, LLC (N.D.Cal., Mar. 4, 2011) 2011 WL 835787, pp. *5-*6; Lai v. Quality Loan Serv. Corp. (C.D.Cal., Aug. 26, 2010) 2010 WL 3419179, pp. *3-*5.)
Although Vella recognized this rule, its actual holding was that the plaintiff's claim was not barred because the claim was not "directly connected" to the trustee's sale, and instead concerned alleged fraud in inducing the borrower to default on the loan. (Vella v. Hudgins, supra, 20 Cal.3d at pp. 256-258.)
The Malkoskie court explained that although an unlawful detainer judgment is generally given "limited res judicata effect," the limitation is inapplicable if the defendant acquired title through a trustees' sale and then prevailed in an unlawful detainer action brought under section 1161a(b)(3). (Malkoskie, supra, 188 Cal.App.4th at p. 973.) Section 1161a(b)(3) states that an unlawful detainer action may be filed where "the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust . . . and the title under the sale has been duly perfected." To prevail on an unlawful detainer action under section 1161a(b)(3), a party who purchased property at a foreclosure sale "must prove that the property was sold in accordance with [Civil Code] section 2924" and that " 'title under the sale has been duly perfected.' " (Malkoskie, supra, at pp. 973-974.) Thus, an unlawful detainer judgment based on a claim brought under section 1161a(b)(3) necessarily includes a finding that the moving party proved title had been " 'duly perfected.' " (Malkoskie, supra, at pp. 973-974.) Under these principles, the Malkoskie court held that a later tort action challenging title was barred even though the unlawful detainer action was resolved by a stipulated judgment: "[B]ecause the sole basis upon which [the bank] asserted its right to possession of the property was its 'duly perfected' legal title obtained in the nonjudicial foreclosure sale, the validity of [the bank's] title had to be resolved in the unlawful detainer action." (Id. at p. 974.)
As in Malkoskie, the judgment in the unlawful detainer action in this case necessarily decided the validity of Deutsche Bank's title because Deutsche Bank brought the unlawful detainer complaint under section 1161a(b)(3). Under this code section, the sole basis for Deutsche Bank's asserting its right to possession of the property was "its 'duly perfected' legal title obtained in the nonjudicial foreclosure sale." (Malkoskie, supra, 188 Cal.App.4th at p. 974.) In his appellate brief, Ania acknowledges that in the unlawful detainer action, Deutsche Bank "expressly alleged in its complaint the specific facts it contended established it had perfected legal title to the property, including that the foreclosure sale was conducted in accordance with Civil Code section 2924.5." Ania further acknowledges that in his opposition pleadings and papers in the unlawful detainer action, he "denied the allegations and raised two affirmative defenses contending the foreclosure proceedings contained irregularities and were invalid due to prior wrongful assignment." Ania further concedes that the title issues raised here concerning the "conduct of the sale and the validity of the resulting transfer of title to Deutsche Bank . . . were . . . directly at issue in the unlawful detainer case." Ania additionally admits that it was proper for these issues to be "conclusively resolved" and that Deutsche Bank prevailed on its unlawful detainer complaint.
Thus, the legality of Deutsche Bank's title and the validity of the foreclosure sale were finally determined and established as a matter of law against Ania at the unlawful detainer action, thereby defeating his current wrongful eviction claim against Deutsche Bank. In this regard, Ania's reliance on Stillwell Hotel Co. v. Anderson (1935) 4 Cal.2d 463 is misplaced. Stillwell held a tenant may have remedies against a successor landlord for a breach of the covenant of quiet enjoyment that runs with the land. (Id. at p. 465.) Stillwell is inapplicable here because it did not involve the issue whether the eviction cause of action was barred by a prior unlawful detainer judgment, nor did it involve allegations of a defect in the new owner's title.
To the extent Ania contends he was not given the opportunity to fully litigate the title issues in the unlawful detainer action, this argument does not affect the applicability of the res judicata and collateral estoppel doctrines. The critical point is that the title issues were necessarily decided in the unlawful detainer proceeding because Deutsche Bank had to prove valid title to prevail in the unlawful detainer proceeding under section 1161a(b)(3). Thus, the unlawful detainer action was the appropriate forum for Ania to raise these issues, and his remedy was to challenge the judgment in the unlawful detainer action. Although he appealed the unlawful detainer judgment, he did not preserve his rights by seeking a stay and thus the appeal was dismissed. Accordingly, the judgment is final and bars all later claims challenging Deutsche Bank's acquisition of legal title through the foreclosure proceedings.
Under the res judicata doctrine, the relitigation bar applies to all claims actually litigated and to all claims that could have been litigated. (See Bullock v. Philip Morris USA, Inc. (2011) 198 Cal.App.4th 543, 557.) Similarly, under the collateral estoppel doctrine, an issue raised and decided in a prior proceeding triggers the collateral estoppel bar even if some factual matters or legal theories that could have been presented with respect to that issue were not presented. (Bridgeford v. Pacific Health Corp. (2012) 202 Cal.App.4th 1034, 1042; Murphy v. Murphy (2008) 164 Cal.App.4th 376, 401-402.) In this case, the issue of the validity of Deutsche Bank's title through the foreclosure process was necessarily decided in the unlawful detainer action and thus all factual and legal arguments regarding title should have been raised and litigated in that action.
This conclusion also applies to Ania's claimed rights under the PTFA. Congress enacted the PTFA to protect tenants who are the victims of the foreclosure crisis. (Nativi v. Deutsche Bank Nat. Trust Co. (N.D.Cal., May 26, 2010) 2010 WL 2179885, p. *3 (Nativi).) The federal statute provides protection in various ways, including requiring an owner who acquires a covered residential property through foreclosure to take the property subject to the tenant's rights under a lease and/or to provide the tenant with at least 90 days' notice to vacate. (See PTFA, Pub.L. No. 111-22, § 702(a)(1), (a)(2)(A), 123 Stat. 1661.) In his appellate briefs, Ania does not specifically contend the court erred in sustaining the demurrer on his PTFA claim or suggest that he properly stated a wrongful eviction claim based on his PTFA rights. However, to the extent he is asserting these claims, they are also barred by the res judicata and collateral estoppel doctrines. Ania could have raised these issues in defense to the unlawful detainer action.
Further, the PTFA does not create a private right of action, and instead provides a defense to an unlawful detainer action. (See Lopez v. DAPC, LLC (N.D.Cal., June 15, 2012) 2012 WL 2237227, pp. *2-*4; Nativi, supra, 2010 WL 2179885, at pp. *3-*4.) Thus, even if the res judicata and collateral estoppel doctrines do not bar this claim, there is no legal right to bring a PTFA claim as a basis for affirmatively seeking damages under a wrongful eviction tort theory.
Third, Ania's wrongful eviction claim is without merit because he has no standing to challenge Deutsche Bank's title. Ania was neither a borrower on the promissory note nor was he a trustor under the deed of trust. Ania did not allege any facts showing he was a successor to, or assignee of, any rights under the note or deed of trust. Ania was a former tenant of the borrowers without any recorded interest in the property. Although he was twice given an opportunity to do so, he alleged no factual basis showing he is a proper party to challenge Deutsche Bank's title as a basis for prevailing in a tort action for wrongful eviction. Likewise, in his appellate briefs, he has not identified any facts or legal basis supporting a conclusion that the trial court erred in concluding that he did not have standing to raise these issues. An appellant has the burden to affirmatively establish error through reasoned arguments based on relevant legal authority. (See Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215.)
Fourth, Ania's wrongful eviction claim fails because once a trustees' sale occurs and a trustees' deed has been recorded, the sale is presumed to have been conducted properly. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 272; Knapp v. Doherty (2004) 123 Cal.App.4th 76, 86, fn. 4; Moeller v. Lien (1994) 25 Cal.App.4th 822, 831.) A plaintiff bears the burden of overcoming this presumption by demonstrating that the alleged title defects caused him or her actual prejudice. Ania has never alleged a basis for showing that the alleged flaws in the transfer of the loan and deed of trust prejudiced his rights, or that the flaws rendered the sale void. The assignments and transfers merely substituted one creditor for another without changing any of the Homeowners' obligations under the note. It is undisputed that the Homeowners were in default on the note and the note was secured by the deed of trust that was the basis for the foreclosure sale. Ania was not a borrower on the loan, but a former tenant of the borrowers. He has not shown the alleged flaws in the transferring documents had any prejudicial effect on his rights.
Ania raises several other arguments. We have examined each of these arguments and we find each of them to be without merit. We briefly mention a few of these contentions.
Ania contends that his constitutional rights were violated by defendants' actions. However, he does not provide any legal or factual basis showing a constitutional violation. The contention is thus without merit.
In his appellate briefs, Ania refers at various times to the second respondent, Central Mortgage. To the extent we can interpret these references to mean that Ania is challenging the demurrer on his claims against defendant Central Mortgage, these contentions are unsupported. There is no showing that Central Mortgage participated in the eviction or otherwise had any contact with Ania. In his appellate brief, Ania argues that Central Mortgage violated federal law by failing to timely respond to the Homeowners' written requests for information about their mortgage. However, Ania identifies no factual or legal basis upon which he is entitled to assert the Homeowners' rights (if any) to such responses.
We also find unavailing Ania's contention the court erred in refusing to provide him with another opportunity to amend the complaint. An appellate court must reverse a judgment sustaining a demurrer if there is a reasonable possibility the defect can be cured by amendment. (Schifando, supra, 31 Cal.4th at p. 1081.) The plaintiff has the burden of proving a reasonable possibility of curing a defect by amendment. (Ibid.) Ania was given two opportunities to amend the pleading to state a cause of action. In his appellate briefs, he does not explain with any specificity what facts he could add to his pleading that would support his legal theories. Thus, the court did not err in refusing to provide him with a third opportunity to amend the complaint.
DISPOSITION
Judgment affirmed. Appellant to bear respondents' costs on appeal.
HALLER, J. WE CONCUR: HUFFMAN, Acting P. J. MCINTYRE, J.