Opinion
D081908
12-16-2024
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Plaintiff and Respondent, v. DAVID WARD, as Successor Trustee, etc., Defendant and Appellant.
Higgs Fletcher & Mack and John Morris for Defendant and Appellant. Dillon Miller Ahuja & Boss, Scott Alan Miller and Devon R. Franza for Plaintiff and Respondent.
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of San Diego County, Nos. 37-2013- 00044721-CU-OR-NC & 37-2018-00006810-CU-OR-NC Cynthia A. Freeland, Judge. Affirmed.
Higgs Fletcher & Mack and John Morris for Defendant and Appellant.
Dillon Miller Ahuja & Boss, Scott Alan Miller and Devon R. Franza for Plaintiff and Respondent.
MCCONNELL, P. J.
David Ward, in his capacity as successor trustee to The Walter Dean Ward and Marijane Frances Ward Trust Dated January 5, 1996 (the Trust), argues three errors related to timeliness that he believes invalidates the judgment of the superior court. First, he asserts that JPMorgan Chase Bank, National Association (Chase) did not file a suit for breach of contract within four years of the initial default, extinguishing the debt. Second, David alleges there is no substantial evidence to support the trial court's finding that the suit was not time-barred by the statute of limitations. Finally, he contends Chase failed to bring its case to trial within the statutorily permissible time frame. We conclude these contentions lack merit. Accordingly, we affirm the judgment.
Because the original trustees and successor trustee share a common surname, we identify them by first name in our opinion. In so doing, we intend no disrespect.
Both parties have submitted requests for judicial notice. "[B]ecause the proffered documents are not 'necessary, helpful, or relevant' to the resolution of the appeal, [the] motion[s] for judicial notice of these documents [are] denied." (Atempa v. Pedrazzani (2018) 27 Cal.App.5th 809, 819.).
FACTUAL AND PROCEDURAL BACKGROUND
In 1999, Walter and Marijane Ward acquired real property in Valley Center (the Property). Together, they created the Trust in 2002 and conveyed the Property to the Trust by grant deed. Walter became the sole successor trustee and lifetime beneficiary of the Trust following Marijane's passing in 2002.
The record before us is clear that in December 2007, Walter refinanced the Property and took out a loan for $402,876. As security, he pledged the Property to Washington Mutual Bank (Washington Mutual) via a deed of trust (DOT) that he signed in his name, representing that he had the right to grant and convey the Property. The San Diego County Recorder's Office did not record the DOT, rejecting it for an error with the affidavit of death of a joint tenant. The notary public certified that Walter executed the instrument in his "authorized capacity."
Chase ultimately acquired the promissory note and DOT in 2009 as Washington Mutual's successor in interest.
Walter made his final payment to Chase in August 2009, and the loan subsequently entered default. Chase opened a claim with its title insurance company in July 2010, seeking to record the unrecorded DOT. Approximately 44 months after Walter defaulted on the loan payments, on April 18, 2013, Chase sued Walter in both his individual capacity and his capacity as trustee. Chase pursued quiet title, reformation of the DOT, and declaratory relief. Walter passed away in September 2016 and his son, David, became successor trustee of the Trust. David filed two general demurrers to Chase's complaint; the trial court sustained David's demurrers and denied leave to amend the complaint. Chase claimed the gravamen of its action was to enforce the DOT, not to correct a mistake in its execution, and appealed the trial court's judgment. (JPMorgan Chase Bank, N.A. v. Ward (2019) 33 Cal.App.5th 678, 683, 690 (Ward).)
In February 2018, Chase filed a second suit against David as successor trustee for the Trust, filing for equitable subrogation and equitable lien to establish a first position equitable lien on the Property because Walter used the 2007 loan proceeds to pay off the original 2002 purchase loan.
In March 2019 our court concluded Chase could amend its complaint to state a valid cause of action based on the facts alleged in the original complaint. (Ward, supra, 33 Cal.App.5th at pp. 684-689.) Accordingly, we remanded the matter to the superior court with directions to grant Chase leave to amend its complaint; the superior court filed the remittitur July 5, 2019. Chase then filed its amended complaint in August 2019, seeking declaratory relief and quiet title. David filed a cross-complaint the following month, alleging causes of action for trespass, conversion, intentional interference with a contract, declaratory relief, negligence per se, and negligence. The court consolidated Chase's 2013 and 2018 cases in October 2019.
David dismissed the cross-complaint without prejudice in August 2022.
Trial concluded on August 23, 2022, approximately 38 months after the superior court filed the remittitur. The court rejected David's statute of limitations defense, finding the title insurer had the original DOT as late as 2010.
DISCUSSION
David advances three purported errors on appeal. First, David maintains that Chase could not file its claims without also asserting a breach of contract claim. Failing to file an action for breach of contract, he contends, extinguished Chase's interest in the Property in August 2013. Second, David claims there is not substantial evidence to support the trial court's finding that the statute of limitations did not bar Chase's suit. Accordingly, he argues the four year statute of limitations tolled approximately a year before Chase filed its 2013 suit. Finally, David urges us to reverse the trial court's judgment on the grounds that Chase failed to bring the 2013 case to trial within the statutorily mandated time frames. Although we reversed and remanded to the trial court in 2019, David argues that all the relevant statutory rules and emergency orders set a final trial deadline of January 21, 2021.
A. The statute of limitations imposed in Civil Code section 2911 does not bar Chase's Civil Code section 3415 action.
David alleges that because Chase did not file a breach of contract claim within four years of the initial default, the lien Chase held extinguished in August 2013. Accordingly, he argues Chase could not seek quiet title or use the judicial process to restore the unrecorded and lost DOT. In support of his argument, he cites Robin v. Crowell (2020) 55 Cal.App.5th 727 (Robin).
In Robin, the plaintiff sought to eliminate a defendant's existing lien and to change the parties' interests in the property. (Robin, supra, 55 Cal.App.5th at p. 740). Our colleagues in the Fifth District concluded the plaintiff's judicial foreclosure action on a subordinate lien they failed to include in a prior foreclosure action was barred by Civil Code section 2911 because the statute of limitations had run. (Robin, supra, at pp. 741, 748.) Accordingly, the plaintiff could not invoke the aid of the court to pursue the collection of the debt. (Id. at p. 748.) The court reasoned that Civil Code section 2911 extinguished "only the lien of the deed of trust, i.e., the security interest enforceable through judicial foreclosure." (Robin, supra, at p. 749.) The power of sale survives Civil Code section 2911 time bar. (Robin, supra, at p. 749.) In Robin, the plaintiff could not pursue a nonjudicial foreclosure sale because the property was already sold in the judicial foreclosure action; there was no surviving power of sale. (Id. at p. 752.)
Consistent with the conclusions drawn in Robin, Civil Code section 2911 proscribes bringing an action for judicial foreclosure after the four year statute of limitations has tolled. (Nicolopulos v. Superior Court (2003) 106 Cal.App.4th 304, 309-310.) However, the section preserves the lender's power of sale granted in a deed of trust. (Id. at p. 310.) As the trial court observed, Chase pursued a Civil Code section 3415 claim so that it could enforce its power of sale, not to collect on the debt in a breach of contract claim. Chase did not seek to revive a lien and collect on the debt; Chase sought the court's assistance in restoring a lost instrument, a fact David acknowledges in the reply brief he submitted to this court.
David encourages us to prohibit Chase from obtaining any judicial relief, arguing "Chase could not invoke the jurisdiction of the court in support of any of its claims." To support his argument, he cites case law relevant to mortgage foreclosures and judicial foreclosure for a deed of trust. His reliance on Goldwater v. Hibernia Savings &Loan Soc. (1912) 19 Cal.App. 511 (mortgage extinguished pursuant to Civil Code section 2911) and Fontana Land Co. v. Laughlin (1926) 199 Cal. 625 (mortgage extinguished pursuant to Civil Code section 2911) is misguided. While it may be true that mortgage liens create no surviving power of sale, Civil Code section 2911 does not bar the power of sale under a deed of trust. (See Ung v. Koehler (2005) 135 Cal.App.4th 186, 195-198.) Similarly, Flack v. Boland (1938) 11 Cal.2d 103 offers David no support as it centers on judicial foreclosure of a deed of trust, not a trustee enforcing a power of sale. Finally, he relies on Aviel v. Ng (2008) 161 Cal.App.4th 809, 817, footnote 4, for the proposition that "[t]he running of the statute of limitations on an obligation underlying a mortgage or deed of trust bars judicial foreclosure as well as an action to enforce the obligation." However, we again observe that Chase did not seek either judicial foreclosure or collection of the debt. As we have previously concluded," '[t]he restoration of lost instruments is an old and well-established function of courts of equity'" (Ward, supra, 33 Cal.App.5th at p. 687), and we find no support for David's argument that Chase should be barred from accessing judicial relief through a Civil Code section 3415 action. Indeed, we find no case law that suggests Chase must bring a breach of contract action in order to preserve its right to seek the restoration of a lost document.
B. Substantial evidence supports the court's finding that the DOT was not lost until mid-2010.
David disagrees with the trial court's rulings regarding exhibits admitted into evidence and the finding that Fidelity had the original 2007 DOT in its possession in 2010. In support of the finding, the court relied on testimony from two separate witnesses: Diane Brossart and Emily Gordon.
"When a civil appeal challenges findings of fact, the appellate court's power begins and ends with a determination of whether there is any substantial evidence-contradicted or uncontradicted-to support the trial court's findings." (Schmidt v. Superior Court (2020) 44 Cal.App.5th 570, 582.) The testimony of a single credible witness may constitute substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.)
Brossart testified that the mortgage recording company's regular practice was to annotate the exceptions that prevented recording and return the documents to the client. In December 2008, the fatal error that prevented recording was an error in the affidavit of death of a joint tenant. There were no reported errors with the DOT. Following the discovery of the fatal error with the affidavit, the mortgage recording company returned the original documents to Washington Mutual or its parent company. Gordon, an employee at Chase's title insurer, testified that the title insurer records indicated it had the original DOT in approximately August of 2010. The records further indicate that the title insurer forwarded the original documents to legal counsel for curative work in August 2010; the attorney did not receive them. Entries further reflect that the title insurer endeavored to locate and recover the then-missing original documents.
Although David argues the facts might support a date of loss in 2008,"' "[w]e have no power on appeal to judge the credibility of witnesses or to reweigh the evidence." '" (Fabian v. Renovate America, Inc. (2019) 42 Cal.App.5th 1062, 1067.) We conclude the evidence introduced at trial is substantial enough for the court to conclude the original DOT became lost, destroyed, or otherwise unavailable in or around August 2010.
C. Chase brought their action to trial within the legally required time limits.
Code of Civil Procedure section 583.310 requires that an action be brought to trial within five years. However, when a judgment is reversed and remanded for a new trial, that new trial must be brought to trial "within three years after the remittitur is filed by the clerk of the trial court." (Code Civ. Proc., § 583.320.) The trial court entered the remittitur in this action on July 5, 2019. Instead of adding three years to the date the remittitur was entered, David advances an argument that the trial clock was extended by the time between Chase's notice of appeal and the date of the remittitur, or about one and a half years. In support of his argument, David seeks to distinguish this case before us from our Supreme Court's holding in McDonough Power Equipment Co. v. Superior Court (1972) 8 Cal.3d 527 (McDonough).
In McDonough, the Supreme Court addressed the question of whether an appellate court's remand following a sustained demurrer and dismissal constituted a "new trial" within the meaning of Code of Civil Procedure section 583.320. (McDonough, supra, 8 Cal.3d at p. 532.) The court concluded "a judgment of dismissal, entered upon an order sustaining a demurrer without leave to amend," when reversed on appeal, is an action that "must be brought to trial within three years from the filing of the remittitur in the trial court." (Ibid.) The court expressly rejected the contention that "upon reversal of the judgment of dismissal the action is reinstated 'under the umbrella' of the five-year provision of [Code of Civil Procedure section 583.310]." (Id. at p. 533.) Nevertheless, David asks that we return Chase to the umbrella of the five-year provision, stating our high court had "no occasion to consider whether the five-year provision in Section 583.310 operated as an outside time limit within which plaintiffs must advance their cases to trial." The judgment before us is not from the original trial, bound to the limits of a five-year clock. Instead, it was a retrial following remand from our court. We therefore necessarily conclude that Code of Civil Procedure section 583.320 governs, and the appropriate deadline for trial, absent other excludable delay, would have been July 5, 2022.
In March 2020, eight months after the remittitur was filed in the superior court, Governor Gavin Newsom declared a State of Emergency in California due to the threat of COVID-19. Governor Newsom also issued an executive order directing all California residents to follow the state public health directive to stay at their place of residence, with certain exceptions, and directing all nonessential business to cease operating to prevent further spread of COVID-19. (SVAP III Poway Crossings, LLC v. Fitness Internat., LLC (2023) 87 Cal.App.5th 882, 886.) Shortly thereafter, the Judicial Council of California adopted emergency rule 10, which extended the deadline to bring a civil action to retrial under Code of Civil Procedure section 583.320 by six months. (Cal. Rules of Court, appen. I, emergency rule 10(b).) Effective April 6, 2020, emergency rule 10 provides that "[n]otwithstanding any other law, including Code of Civil Procedure section 583.320, for all civil actions filed on or before April 6, 2020, . . . the three years provided in section 583.320 in which the action must again be brought to trial is extended by six months for a total time of three years and six months." (Ibid.) Accordingly, Chase had until January 5, 2023 to bring this matter to trial. Trial concluded in August 2022, well within the statutory deadline without considering other possible excludable delay. We therefore reject David's assertion that Chase did not bring their case to trial within the appropriate statutory time frame.
DISPOSITION
The judgment is affirmed. Chase is entitled to costs on appeal.
WE CONCUR: O'ROURKE, J., IRION, J.