Opinion
A142702
01-13-2016
RONALD HOGAN, et al. Plaintiffs and Appellants, v. CENLAR FSB, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV254820)
Plaintiffs Ronald and Victoria Hogan appeal the trial court's June 3, 2014, denial of their request for a temporary restraining order and order to show cause why a preliminary injunction should not issue to enjoin a foreclosure sale. Defendants contend the appeal should be dismissed as moot because the foreclosure sale has already occurred. We agree, and will dismiss the appeal.
BACKGROUND
In May 2000, the Hogans purchased a home on Gardenview Place in Santa Rosa (the Gardenview property) for $499,000. The Gardenview property has been the subject of extensive litigation in a separate case instituted by the Hogans against the developers of the Gardenview property and the real estate agents for the sale. Much of that litigation is chronicled in our opinions in Hogan, et al. v. DeAngelis Construction, Inc., et al. (A117321, A118257, A120840, May 20, 2009) [nonpub. opn.], and Hogan, et al. v. DeAngelis Construction, Inc., et al. (A128451, A130351, April 18, 2012) [nonpub. opn.].
This separate action, which relates to foreclosure proceedings involving the Gardenview property, was instituted by the Hogans against defendants Cenlar FSB (Cenlar), Nationstar Mortgage LLC (Nationstar), Northwest Trustee Services, Inc. (Northwest), and First Tech Federal Credit Union (First Tech). The facts relevant to this appeal are as follows:
The Hogans also named T.D. Service Company and State Farm General Insurance Company as defendants. These two defendants are not relevant parties to this appeal.
In January 2009, the Hogans obtained a $417,000 loan from Taylor, Bean & Whitaker Mortgage Corp. that was secured by a deed of trust against the Gardenview property. The deed of trust was assigned to Nationstar in June 2013. In July 2013, Cenlar, as attorney-in-fact for Nationstar, executed a substitution of trustee that substituted Northwest as the trustee under the deed of trust.
On September 16, 2013, Northwest recorded a notice of default stating that the Hogans were in default under the loan. On December 20, 2013, Northwest recorded a notice of trustee's sale, which scheduled a foreclosure sale of the Gardenview property for January 23, 2014.
On December 31, 2013, the Hogans initiated this action and filed an ex parte application for a temporary restraining order to enjoin the foreclosure sale scheduled for January 23, 2014. The trial court granted the Hogans' request for a temporary restraining order that same day. However, on Feburary 7, 2014, the trial court dissolved the temporary restraining order and denied the Hogans' request for a preliminary injunction, stating that the Hogans "have failed to present competent evidence that they would prevail on any of the causes of action they have pled against the Defendants and, as such, are not entitled to a preliminary injunction."
On April 25, 2014, the Hogans filed an amended complaint. On May 28, 2014, they submitted another ex parte application for a temporary restraining order to enjoin the foreclosure sale, which had been rescheduled for June 12, 2014, and requested an order to show cause why a preliminary injunction should not issue. The trial court denied the Hogans' application on June 3, 2014, again stating that the Hogans failed to demonstrate a likelihood of success on the merits on any of their causes of action.
On July 31, 2014, the Hogans filed a notice of appeal from the trial court's June 3, 2014, order denying their request for a temporary restraining order. The Hogans did not seek to enjoin the foreclosure sale pending their appeal. On October 31, 2014, a Trustee's Deed Upon Sale was recorded, stating that the Gardenview property was sold at a foreclosure sale on October 16, 2014, to First Tech.
In a civil case information statement filed on August 24, 2014, the Hogans represented that they filed a Chapter 13 bankruptcy petition two months earlier. On September 17, 2014, we issued an order stating that the automatic stay of the federal bankruptcy law (11 U.S.C. § 362(a)(1)) did not operate to stay this appeal because the Hogans initiated the underlying action. We are not aware of any other attempts by the Hogans to enjoin the foreclosure sale pending this appeal. Nor does it appear that they requested an expedited review of their appeal.
We grant defendants' unopposed request for judicial notice of a Trustee's Deed Upon Sale recorded on October 31, 2014, with the Sonoma County Recorder's Officer. (Evid. Code, § 425.)
The Hogans filed their opening brief in this appeal on February 2, 2015. On February 24, First Tech moved to dismiss the Hogans' appeal, arguing that the foreclosure sale mooted the appeal. The other defendants joined First Tech's motion, which the Hogans opposed. We denied the motion to dismiss without prejudice to defendants arguing the mootness issue in their responsive briefs. Defendants subsequently filed responsive briefs addressing both the mootness issue and the merits of the Hogans' appeal. The Hogans filed reply briefs addressing the mootness issue and the merits of their appeal.
DISCUSSION
Defendants argue that this appeal is moot because the Hogans are appealing the denial of a request to enjoin a foreclosure sale that has already taken place. As such, defendants contend that this court can no longer provide the relief sought by the Hogans.
"It is well settled that an appellate court will decide only actual controversies. Consistent therewith, it has been said that an action which originally was based upon a justiciable controversy cannot be maintained on appeal if the questions raised therein have become moot by subsequent acts or events." (Finnie v. Town of Tiburon (1988) 199 Cal.App.3d 1, 10.) "This rule has been regularly employed where injunctive relief is sought and, pending appeal, the act sought to be enjoined has been performed." (Giles v. Horn (2002) 100 Cal.App. 4th 206, 227.) Thus, "[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 Nat. Assn. (2012) 209 Cal.App.4th 182, 208 (Ragland) [foreclosure sale mooted appeal from denial of preliminary injunction that sought to enjoin the sale].) In this situation, "[a] reversal would be without practical effect, and the appeal will therefore be dismissed." (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 749, p. 814.)
The Hogans' appeal is moot. The Hogans requested a temporary restraining order and preliminary injunction that would have prevented the Gardenview property from being sold at a foreclosure sale. The trial court denied their request. After the Hogans appealed the trial court's order denying their request, the foreclosure sale—i.e. the act sought to be enjoined—occurred. Accordingly, even if we were to disagree with the trial court's decision, a reversal would have no practical effect because we cannot compel the trial court to enjoin an event that has already occurred.
The Hogans argue that this case is distinguishable from Ragland, supra, 209 Cal.App.4th at page 208, where the appeals court held that the occurrence of a foreclosure sale mooted an appeal from the denial of a request for a temporary restraining order to enjoin the sale. The Hogans contend Ragland is distinguishable because they "had a lis pendens recorded when their case was filed, which precluded any bona fide purchaser. But the Ragland case did not have a lis pendens recorded." The Hogans further contend "[t]here was no issue in Ragland related to the priority of liens, and specifically did not deal with the issue of the existence of a superior lien under Civil Code § 3050 as this case does." Whether the Hogans recorded a lis pendens or held a superior lien has no bearing on the mootness issue presented here. The mootness issue turns on whether the act the Hogans sought to enjoin—the foreclosure sale—has occurred. (Giles v. Horn, supra, 100 Cal.App.4th at p. 227.) Because it has, a reversal of the trial court's order denying the Hogans' injunction request would have no practical effect, regardless of whether the Hogans recorded a lis pendens or held a superior lien.
Civil Code section 3050 states: "One who pays to the owner any part of the price of real property, under an agreement for the sale thereof, has a special lien upon the property, independent of possession, for such part of the amount paid as he may be entitled to recover back, in case of a failure of consideration."
The Hogans argue that Ragland is distinguishable because the Hogans brought a cause of action under the Homeowner Bill of Rights, while Ragland was decided before the Homeowner Bill of Rights was enacted. They also argue that they can pursue other remedies not sought by the plaintiff in Ragland, such as a constructive trust or additional injunctive relief to prevent future sales of the Gardenview property. Contrary to what the Hogans argue, whether this appeal is moot is a separate issue from what other causes of actions and remedies they can pursue. As we explained, this appeal became moot once the foreclosure sale the Hogans sought to enjoin had occurred. Nevertheless, "nothing in [this court's] dismissal, in and of itself, will foreclose further litigation of this case in the trial court. We hold only that the correctness of the trial court's denial of a preliminary injunction is a moot question[.]" (Epstein v. Superior Court (2011) 193 Cal.App.4th 1405, 1410.)
In 2012, the Legislature enacted Senate Bill No. 900 (2011-2012 Reg. Sess.) and Assembly Bill No. 278 (2011-2012 Reg. Sess.). (Stats. 2012, ch. 86; Stats. 2012, ch. 87.) "Although the Legislature did not give the legislation a title, the Governor in his signing statement, and courts and commentators, have referred to the legislation as the 'California Homeowner Bill of Rights.' " (Monterossa v. Superior Court (2015) 237 Cal.App.4th 747, 749, fn. 1.)
The Hogans argue that Ragland is distinguishable because the Hogans rescinded the loan agreement prior to the foreclosure sale while the plaintiff in Ragland did not. This difference is immaterial because, even if we were to agree with the Hogans that they rescinded their loan agreement, their appeal would still be moot because the foreclosure sale has occurred.
Last, the Hogans argue the appeal is not moot because, following a jury trial in 2007 in their case against the developers, the trial court ordered the developers to assume the balance of the Hogans' mortgage obligation. Therefore, the Hogans contend, the developers received a "windfall" from the foreclosure sale because "the net result of this scheme was the . . . debt obligation that shifted to [the developers] appears potentially to have been wiped out also." Even if we agreed that the developers received a "windfall" from the foreclosure sale, this appeal would still be moot because the foreclosure sale has occurred. Whether the developers received a "windfall" as a consequence of the foreclosure sale is a separate issue.
DISPOSITION
The appeal is dismissed. Respondents are awarded costs on appeal.
The Hogans requested that we take judicial notice of (1) an April 23, 2015, letter from counsel for the developers of the Gardenview property to First Tech, (2) a trial court order ruling on defendants' demurrers to the Hogans second amended complaint, and (3) excerpts of a reply brief filed in an appeal related to the Hogans lawsuit against the developers. Defendants opposed the request for judicial notice. We have reviewed the request and conclude that it would have no effect on the outcome of this appeal if granted, and deny the request on that ground. --------
/s/_________
Miller, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.