Opinion
A146462
03-14-2018
PAMELA DRAWSAND ET AL., Plaintiffs and Appellants, v. HABITAT FOR HUMANITY EAST BAY/SILICON VALLEY, INC. ET AL., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG14753214)
Plaintiffs Pamela Drawsand and Elenora Drawsand sued several business entities and various employees involved in the servicing and securitization of a residential mortgage for, among other things, wrongful foreclosure of a third party's home. The trial court sustained demurrers without leave to amend. We affirm, concluding the Drawsands lack standing to challenge the allegedly defective foreclosure because they (Pamela) were merely tenants without an ownership interest in the property, and because they were neither parties to nor third-party beneficiaries of the agreements governing the challenged securitization.
Inasmuch as plaintiffs have the same last name, at times we shall refer to plaintiffs by their first name for purposes of clarity.
I. BACKGROUND
A. The Property and Foreclosure Proceedings
Plaintiffs are relatives of decedent Vicky McConnell, who owned a home in Oakland, California. In 2001, McConnell purchased the house using a $110,015 loan secured by a deed of trust, naming defendant Habitat for Humanity East Bay/Silicon Valley, Inc. (Habitat for Humanity) as the beneficiary. Unbeknownst to Habitat for Humanity, McConnell passed away in January 2007.
After McConnell's death, her son, Carlos Lewis, occupied the house and continued making payments on the note. Lewis claimed that in 2007, he advised Habitat for Humanity of his mother's death and that he intended to keep the house and pay the mortgage. Habitat for Humanity denied that assertion, claiming it first learned of McConnell's death in 2013.
In 2013, Lewis was out of the country serving in the military and he missed several monthly payments. Elenora Drawsand claims she made these payments on Lewis's behalf.
In September 2013, defendant Multi-Financial Services Company, Inc. (Multi-Financial), which had been the servicer of McConnell's loan, returned the monthly payments (March through August 2013) made by Elenora.
That same month, Habitat for Humanity began foreclosure proceedings. Defendant PLM Loan Management Services, Inc. (PLM) was substituted as the trustee under McConnell's deed of trust. A trustee's sale took place on May 2, 2014. B. Probate Proceedings Commencement of Litigation
McConnell purportedly executed a will on January 25, 2007, the day before she died. The will left her property to her four adult children. The will nominated Lewis to act as executor, and if he was unable then Elenora Drawsand was to serve as the executor.
On October 24, 2014, Elenora filed a petition for letters of administration and to be appointed executor of McConnell's estate. After the probate court identified several deficiencies in Elenora's petition, including that the will was not witnessed by two witnesses, decedent's signature was not notarized, and no evidence that decedent's son declined or was unable to serve, Elenora requested a voluntary dismissal of her petition. On April 30, 2015, the probate court dismissed the case without prejudice.
A few weeks later, McConnell's son, Carlos Lewis, filed a complaint against Habitat for Humanity, Multi-Financial, PLM, and others, alleging, among other things, wrongful foreclosure. Habitat for Humanity demurred on various grounds, including that Lewis lacked standing to pursue such claims. Lewis did not file an opposition and the trial court sustained the demurrer on the grounds that Lewis failed to establish standing or a beneficial interest in the property.
On April 3, 2015, by first amended complaint, representing themselves, the Drawsands sued numerous defendants in April 2015, alleging nine causes of action, to wit: 1) set aside of trustee sale; 2) cancellation of trustee's deed; 3) quiet title; 4) fraud; 5) accounting; 6) declaratory relief; 7) injunctive relief; 8) stay of eviction proceedings; and 9) slander of title. The first amended complaint alleged that Elenora was the executor of McConnell's estate and that Pamela was the tenant at the property.
The original complaint to set aside the trustee's sale was filed by Pamela Drawsand as the tenant of the property. --------
Inexplicably, on April 22, 2015, the Drawsands, without leave of court, filed a second amended complaint, adding six new causes of action, all of which were based on the alleged wrongful foreclosure of the McConnell loan and property.
Defendants filed demurrers to the second amended complaint. The trial court struck the second amended complaint, as it was filed without prior court approval, and directed defendants to file demurrers as to the first amended complaint. Defendants demurred to the first amended complaint on several grounds, including that the Drawsands lacked standing to contest the foreclosure. The Drawsands did not file opposition to the demurrers.
The trial court sustained the demurrers without leave to amend, on the grounds that the Drawsands lacked standing to assert their claims against the defendants.
II. DISCUSSION
Still representing themselves, the Drawsands have appealed from the judgment following the sustaining of the demurrers without leave to amend. Whatever the benefit, or lack thereof, in deciding to represent oneself, self-represented individuals are held to the same standard as an attorney. (See Rappleyea v. Campbell (1994) 8 Cal.4th 975, 984-985; Nelson v. Gaunt (1981) 125 Cal.App.3d 623, 638-639; Taylor v. Bell (1971) 21 Cal.App.3d 1002, 1009.) Self-representation is not a ground for lenient treatment, and "as is the case with attorneys, pro. per. litigants must follow correct rules of procedure." (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1247.) In sum, the Drawsands are " 'entitled to . . . no greater[] consideration than other litigants and attorneys [citations], [but are] held to the same restrictive rules of procedure as an attorney [citation].' " (County of Orange v. Smith (2005) 132 Cal.App.4th 1434, 1444.)
When a demurrer is sustained by the trial court, we review the complaint de novo to determine whether, as a matter of law, the complaint states facts sufficient to constitute a cause of action. (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) Reading the complaint as a whole and giving it a reasonable interpretation, we treat all material facts properly pleaded as true. (Ibid.) The plaintiffs have the burden of showing that the facts pleaded are sufficient to establish every element of the cause of action and overcoming all of the legal grounds on which the trial court sustained the demurrer, and if the defendant negates any essential element, we will affirm the order sustaining the demurrer as to the cause of action. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879-880.)
A trial court has discretion to sustain a demurrer with or without leave to amend. (Zelig v. County of Los Angeles, supra, 27 Cal.4th at p. 1126.) If we determine that the plaintiffs have met their burden to demonstrate that a reasonable possibility exists that the defect can be cured by amendment of the pleading, then the trial court has abused its discretion in denying leave to amend and we reverse the denial. (Ibid.) Otherwise, we affirm the judgment on the basis that the trial court has not abused its discretion. (Ibid.)
Standing is the threshold element required to state a cause of action and, thus, lack of standing may be raised by demurrer. (Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798, 813, disapproved on other grounds in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337; Blumhorst v. Jewish Family Services of Los Angeles (2005) 126 Cal.App.4th 993, 1000.) To have standing to sue, a person, or those whom he properly represents, must " 'have a real interest in the ultimate adjudication because [she] has [either] suffered [or] is about to suffer any injury of sufficient magnitude reasonably to assure that all of the relevant facts and issues will be adequately presented.' [Citation.]" (Schmier v. Supreme Court (2000) 78 Cal.App.4th 703, 707.) Code of Civil Procedure section 367 establishes the rule that "[e]very action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute." A real party in interest is one who has "an actual and substantial interest in the subject matter of the action and who would be benefited or injured by the judgment in the action." (Friendly Village Community Assn., Inc. v. Silva & Hill Constr. Co. (1973) 31 Cal.App.3d 220, 225.) Upon review of action on a demurrer, we review the determination of standing de novo.
When a party lacks standing to sue, the action must be dismissed, unless the complaint can be amended by substituting a party who has standing. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004-1011.) The record shows, unequivocally, that the Drawsands lack standing to sue and there is no amendment that can cure this fatal flaw.
This action involves an alleged unlawful foreclosure on property that was owned by someone other than the plaintiffs. "As a general rule 'only parties with an interest in the secured loan or in the real property security itself have standing to challenge or attempt to set aside a nonjudicial foreclosure sale . . . .' [Citation.]" (Banc of America Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc. (2009) 180 Cal.App.4th 1090, 1103; accord Royal Thrift & Loan Co. v. County Escrow, Inc. (2004) 123 Cal.App.4th 24, 33.) According to the first amended complaint, Pamela was merely a tenant at the property. As a former tenant, Pamela's interest in the property was only possessory. To the extent, Elenora asserts that she is the executor of McConnell's estate, the record belies this claim. While it appears that Elenora was named as an alternate executor of McConnell's will in the event that Lewis was unable to do so, this contingent future interest was never properly attested. As noted, McConnell's will only had one witness and the notary did not authenticate McConnell's signature. (See Prob. Code, §§ 6110 et seq.) There is also no showing that Lewis was unable or refused to act as executor. In light of these deficiencies, the probate proceedings were dismissed.
We conclude the Drawsands lack standing to assert any claims seeking to set aside the foreclosure sale or to restore the title in the former owner of the property. In sum, the trial court did not err in sustaining the demurrers without leave to amend.
III. DISPOSITION
The judgment is affirmed.
/s/_________
REARDON, J. We concur: /s/_________
RUVOLO, P. J. /s/_________
STREETER, J.