Samson v. OneWest Bank CA1/2 ( 2016 )

Filed 8/15/16 Samson v. OneWest Bank CA1/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
MARILOU D. SAMSON,
Plaintiff and Appellant,
A144526
v.
ONE WEST BANK et al., (San Francisco City and County
Super. Ct. No. CGC-13-533711)
Defendants and Respondents.
This is the third in a series of appeals to this court stemming from appellant’s
attempts to challenge the foreclosure sale of a residence in San Francisco. In the first of
these appeals, we concluded that appellant’s claims—which challenged respondent’s
authority to foreclose and also raised trespass and conversion claims related to the
foreclosure process—were barred by the doctrine of judicial estoppel. The present appeal
arises from a separate superior court action in which appellant alleged these same
violations against both OneWest and Aurora Loan Services, LLC (Aurora). The trial
court granted a motion for judgment on the pleadings in favor of OneWest Bank, leading
to the second of the three appeals. Subsequently, the trial court granted Aurora’s motion
for judgment on the pleadings and appellant filed the present appeal. We affirm.
STATEMENT OF THE CASE AND FACTS
As described at length in our nonpublished opinion in Samson v. OneWest
(A139967) (Samson II), on July 26, 2005, appellant borrowed $576,000 from Evergreen
Lending, Inc., secured by a deed of trust on the property located at 2574 31st Avenue in
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San Francisco, California. The deed of trust was subsequently assigned to Mortgage
Electronic Registration Systems, and eventually to OneWest National Bank (OneWest)
and then to “U.S. Bank National Association as Trustee for the LXS 2005-5N” (LXS
Trust). Meanwhile, appellant’s loan payments increased, she became unable to pay them,
and in July 2010, a “Notice of Default and Election to Sell under Deed of Trust” was
filed on behalf of OneWest.
On October 25, 2010, appellant, in propria persona, sued Aurora Loan Services
(Aurora) and other defendants including OneWest and U.S. Bank National Association
(U.S. Bank) in federal district court (Samson I), challenging the securitization of her
mortgage loan and, based on alleged defects in the various assignments of the deed of
trust, the defendants’ authority to pursue foreclosure.
On November 23, 2010, appellant filed a voluntary petition in bankruptcy under
chapter 13 of the federal Bankruptcy Act.
The federal court case against Aurora was dismissed in November 2011, after
appellant was permitted two opportunities to amend her complaint; the other defendants
had previously been dismissed because appellant failed to serve them.
The following day, appellant filed her complaint in Samson II, titled “Complaint to
Establish Deed as Mortgage and Quiet Title by Mortgagor,” against OneWest and
Meridian Foreclosure Service. Aurora was not a defendant in this action. OneWest’s
demurrer was sustained with leave to amend to allege a quiet title claim. Appellant’s first
amended complaint, filed on June 5, 2012, added U.S. Bank as a defendant and alleged
several causes of action, including wrongful foreclosure and quiet title, with factual
allegations including that the defendant trespassed on appellant’s property by forcefully
drilling the front door locks and “robbed” appellant of personal property.
On November 28, 2012, the bankruptcy court confirmed appellant’s bankruptcy
plan.
The trial court in Samson II sustained demurrers to appellant’s first amended
complaint without leave to amend as to several of the causes of action but with leave to
amend the quiet title cause of action. Appellant filed a second amended complaint, the
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defendants demurred and the trial court again gave appellant leave to amend. Shortly
after appellant filed her third amended complaint, on May16, 2013, the property was sold
to a third party at a trustee’s sale. The trial court sustained a demurrer to the third
amended complaint without leave to amend on August 7, 2013. On August 27, 2013,
appellant filed a motion for a new trial, which was denied on October 1, 2013. Appellant,
represented by counsel, appealed.
Meanwhile, on August 22, 2013, appellant, in pro. per., filed the present complaint
for intentional trespass, negligent trespass and conversion against OneWest and Aurora.
Appellant alleged that on August 22, 2010, and “thereafter on at least one possibly two
other occasion[s],” the defendants, through their agents and employees, entered
appellant’s property without having obtained legal process or a court order and without
permission from appellant. The first cause of action alleged that the entry was intentional
and/or reckless; the second cause of action alleged that the entry was negligent. The third
cause of action alleged that on August 22, 2010, the defendants “intentionally and
substantially interfered with [appellant’s] personal and business property by taking
possession of and removing the various items of [appellant’s] personal and business
property,” without her consent, including jewelry, business property, “family and other
personal items,” and “home finishing and construction materials.” The defendants’
actions were alleged to have been malicious in that they reflected “willful, wanton, or
reckless disregard for the rights of another,” supporting an award of punitive damages.
Aurora demurred, arguing the claims were barred by the statute of limitations and
by res judicata and collateral estoppel, and failed on the merits. The trial court overruled
the demurrer as to the claims for intentional trespass and conversion, finding that the
complaint was filed within three years of August 22, 2010; res judicata did not apply
because Aurora was not a party to Samson II and a different primary right was involved
in Samson I. The trial court found the negligent trespass claim barred by the two-year
statute of limitations and therefore sustained the demurrer to that cause of action without
leave to amend.
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The trial court had previously granted a motion for judgment on the pleadings
filed by OneWest, finding the claims as to that defendant barred by res judicata. On
October 20, 2014, Aurora filed a motion for judgment on the pleadings, arguing that
appellant’s claims were barred by judicial estoppel because she failed to disclose them in
her chapter 13 bankruptcy case, as well as that the complaint was too vague.1
The trial court filed its order granting judgment on the pleadings on January 7,
2015. The order states: “The court relies on and finds instructive the holding of
Hamilton v. Greenwich Investors XXVI, LLC, 195 Cal. App. 4th 1602 (2011) [(Greenwich
Investors)] and notes plaintiff’s 3-page opposition is insufficient and fails to counter the
pleadings filed by defendant Aurora.” A judgment of dismissal was entered on the same
date.
Appellant filed a timely notice of appeal on March 9, 2015.
DISCUSSION
“ ‘A judgment on the pleadings in favor of the defendant is appropriate when the
complaint fails to allege facts sufficient to state a cause of action. (Code Civ. Proc.,
§ 438, subd. (c)(3)(B)(ii).) A motion for judgment on the pleadings is equivalent to a
demurrer and is governed by the same de novo standard of review.’ (Kapsimallis v.
Allstate Ins. Co. (2002) 104 Cal. App. 4th 667, 672.) ‘All properly pleaded, material facts
are deemed true, but not contentions, deductions, or conclusions of fact or law. . . .’
(Ibid.)” (People ex rel. Harris v. Pac Anchor Transp., Inc. (2014) 59 Cal. 4th 772, 777.)
We review the complaint to determine whether it “alleges facts sufficient to state a cause
of action under any legal theory.” (Cantu v. Resolution Trust Corp. (1992) 4 Cal. App. 4th
857, 879.) We affirm the judgment on the pleadings if it is supported by any proper
ground, “even if the trial court relied on an improper ground” and regardless of whether
“the defendants asserted the proper ground in the trial court.” (See id. at p. 880, fn. 10.)
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OneWest had successfully obtained a judgment on the pleadings on the ground
that the claims against it were barred by res judicata. (Samson III) The propriety of that
judgment and the trial court’s award of sanctions against appellant is the subject of
appellant’s second appeal currently pending in this court (A143668).
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In relying on Greenwich Investors, which held that a suit alleging mortgage loan
and foreclosure related claims was precluded by the plaintiff’s failure to disclose these
claims in a prior bankruptcy proceeding, the trial court accepted Aurora’s argument that
appellant’s claims were barred by judicial estoppel. Appellant listed her federal lawsuit
(Samson I) in her bankruptcy schedules but did not list any state law claims against
Aurora (or OneWest).
“The concept of judicial estoppel prevents a party from asserting a position in a
judicial proceeding that is contrary or inconsistent with a position previously asserted in a
prior proceeding. The purpose is to protect the integrity of the judicial process and not
the parties of the lawsuit.” (International Engine Parts, Inc. v. Feddersen & Co. (1998)
64 Cal. App. 4th 345, 350 (International Engine).) Judicial estoppel “is a doctrine invoked
by courts in their discretion” (id. at p. 351) and “an extraordinary remedy that should be
applied with caution.” (Kelsey v. Waste Management of Alameda County (1999) 76
Cal. App. 4th 590, 598.) “ ‘[T]he doctrine should apply when: (1) the same party has
taken two positions; (2) the positions were taken in judicial or quasi-judicial
administrative proceedings; (3) the party was successful in asserting the first position
(i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are
totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud,
or mistake. [Citations.]’ ” (International Engine, at p. 351, quoting Jackson v. County of
Los Angeles (1997) 60 Cal. App. 4th 171, 183.)
“It is a long-standing tenet of bankruptcy law that one seeking the benefits of
protection under the bankruptcy law has a concomitant duty to disclose to the creditors all
of the debtor’s interests and property rights without limitation. (Oneida Motor Freight,
Inc. v. United Jersey Bank [(3rd Cir. 1988)] 848 F.2d [414,] 416.)” (International
Engine, supra, 64 Cal.App.4th at p. 351.) “The duty to disclose is a continuing one that
does not end once the forms are submitted to the bankruptcy court; rather, a debtor must
amend his financial statements if circumstances change.” (Burnes v. Pemco Aeroplex,
Inc. (11th Cir. 2002) 291 F.3d 1282, 1286.) “Full and honest disclosure in a bankruptcy
case is ‘crucial to the effective functioning of the federal bankruptcy system.’ ” (Ibid.,
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quoting, Ryan Operations G.P. v. Santiam-Midwest Lumber Co. et al. (3d Cir.1996) 81
F.3d 355, 362.) Therefore, “[i]n the bankruptcy context, a party is judicially estopped
from asserting a cause of action not raised in a reorganization plan or otherwise
mentioned in the debtor’s schedules or disclosure statements.” (Hamilton v. State Farm
Fire & Cas. Co. (9th Cir. 2001) 270 F.3d 778, 783 (Hamilton).) “Judicial estoppel will
be imposed when the debtor has knowledge of enough facts to know that a potential
cause of action exists during the pendency of the bankruptcy, but fails to amend his
schedules or disclosure statements to identify the cause of action as a contingent asset.”
(Id. at p. 784.)
Hamilton involved a suit for bad faith and breach of an insurance contract.
Hamilton filed an insurance claim for damage and loss he attributed to tenants he had just
evicted from a house he owned. Suspecting Hamilton was responsible for the losses, the
insurer investigated, then denied the claim a few days after Hamilton had filed for chapter
7 bankruptcy. On his bankruptcy schedules, Hamilton listed a vandalism loss against his
estate but did not list any claim against the insurer as an asset. After the bankruptcy court
discharged Hamilton’s debts, the trustee noticed the large vandalism loss and requested
information from Hamilton that the latter did not provide. The trustee moved to dismiss
the bankruptcy based on bad faith, lack of truthfulness under oath and failure to
cooperate, and the court dismissed the bankruptcy. (Hamilton, supra, 270 F.3d at
pp. 780-781.) A few months later, Hamilton sued the insurer for breach of the covenant
of good faith and fair dealing and breach of contract. (Id. at p. 781.) The trial court
granted summary judgment in part on the basis of judicial estoppel, and the Ninth Circuit
affirmed. (Id. at pp. 782, 786.) The court held that Hamilton had asserted inconsistent
positions by failing to list his claims against the insurer on his bankruptcy schedules and
that the bankruptcy court had relied upon the nondisclosure even though the bankruptcy
was subsequently discharged. (Id. at p. 784.) Hamilton was precluded from pursuing the
undisclosed claims because he “knew of all the material facts surrounding the damage to
the house and [the insurer’s] investigation and denial of his claim at the time he filed his
bankruptcy schedules and for many months before pursuing legal action.” (Ibid.)
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The Hamilton court explained that it “invoke[d] judicial estoppel to protect the
integrity of the bankruptcy process. The debtor, once he institutes the bankruptcy
process, disrupts the flow of commerce and obtains a stay and the benefits derived by
listing all his assets.” (Hamilton, supra, 270 F.3d at p. 785.) The duty to disclose
includes “ ‘contingent and unliquidated claims.’ ” and the debtor’s duty to disclose, as we
have said, “continues for the duration of the bankruptcy proceeding.” (Ibid.) “ ‘The
courts will not permit a debtor to obtain relief from the bankruptcy court by representing
that no claims exist and then subsequently to assert those claims for his own benefit in a
separate proceeding. The interests of both the creditors, who plan their actions in the
bankruptcy proceeding on the basis of information supplied in the disclosure statements,
and the bankruptcy court, which must decide whether to approve the plan of
reorganization on the same basis, are impaired when the disclosure provided by the
debtor is incomplete.’ ” (Ibid., quoting In re Coastal Plains, Inc. (5th Cir. 1999) 179
F.3d 197, 208, italics omitted.)
Greenwich Investors, supra, 195 Cal. App. 4th 1602, which applied these principles
in the context of a lender liability suit, held that the trial court properly sustained a
demurrer without leave to amend based on judicial estoppel because the debtor had failed
to disclose a claim against one of his principal creditors despite the bankruptcy schedules
expressly asking for counterclaims and rights to setoff claims. (Id. at pp. 1609, 1613.)
Because the events underlying the claim occurred before the debtor filed for bankruptcy,
the debtor “must have known of the facts allegedly justifying the claim.” (Id. at p. 1614.)
Appellant argues that Greenwich does not apply here because Aurora was not a
creditor in the bankruptcy proceeding who would have been entitled to an offset, and
because she did disclose “her claim related to the conversion and trespass.” That Aurora
was not a creditor is not dispositive, as Hamilton, supra, 270 F.3d 278, and other cases
illustrate. (E.g., International Engine, supra, 64 Cal. App. 4th 345.) As we have said, the
purpose of judicial estoppel is to protect the integrity of the judicial process, not the
parties. (Id. at p. 350.)
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Appellant’s assertion that she disclosed her claims is based on the fact that she
listed in her bankruptcy schedules pending insurance claims for property lost in a
residential burglary. In a “Schedule B – Personal Property” (Schedule B) filed on
December 28, 2010, she listed “stolen items from above property 2574 31st Ave., SF.,
CA 94116,” with a value of $25,000. Her amended Schedule B filed on July 18, 2011,
listed “Insurance claim for home burglary – items stolen include printers used in
business, household items, jewelry and collectibles, building materials for home
improvements. [¶] Recovery contingent on production of inventory of items and receipts
and insurance company approval.” These insurance claims cannot reasonably be viewed
as disclosures of potential legal claims against Aurora as they give no indication
appellant might pursue litigation against any known intruder, much less against Aurora
specifically.
Appellant states that she did not pursue a lawsuit for trespass and conversion at the
time she filed for bankruptcy because she was “attempting to settle the claim with the
carrier.” But appellant alleged the facts underlying her later-asserted trespass and
conversion claims—forcible entry and removal of property from her home—in her first
amended complaint in Samson II, which was filed in June 2012, months before her
bankruptcy plan was confirmed. At that time, the allegations later asserted against both
OneWest and Aurora were asserted against OneWest, as appellant had not named Aurora
as a defendant in Samson II. “ ‘ “The debtor need not know all the facts or even the legal
basis for the cause of action; rather, if the debtor has enough information . . . prior to
confirmation to suggest that it may have a possible cause of action, then that is a ‘known’
cause of action such that it must be disclosed.” ’ ” (In re Coastal Plains, Inc. (5th Cir.
1999) 179 F.3d 197, 208, quoting Youngblood Group v. Lufkin Fed. Sav. & Loan Assn.
(E.D. Tex 1996) 932 F. Supp. 859, 867.) Clearly appellant knew the factual basis of her
trespass and conversion claims long before the bankruptcy proceedings concluded.
There can be no question appellant knew she had a duty to disclose lawsuits in her
bankruptcy schedules and knew her duty to disclose continued throughout the pendency
of the bankruptcy proceedings. This is evident from her bankruptcy court filings. After
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her initial filing, which mentioned only a “settlement on lawsuit” with payment
“contingent on judgment,” she filed an amended Schedule B in July 2011, adding two
pending lawsuits, as well as the entry of judgment in the previously listed settlement.
She then filed another amended Schedule B in October 2011, adding the then-pending
suit in Samson I. Even crediting appellant’s assertion that she was at this point pursing
insurance claims for losses incurred in the alleged entry of her home, she obviously was
aware of the factual basis of her later-asserted trespass and conversion claims before she
even filed her petition for bankruptcy, and she in fact asserted them as legal claims (albeit
part of a different cause of action) months before her bankruptcy plan was confirmed.
Appellant is not entitled to recover damages now that should have been taken into
consideration by the bankruptcy court for the benefit of her creditors. Having failed to
disclose her potential legal claims during the course of the bankruptcy proceedings, she is
precluded from asserting them now.
DISPOSITION
The judgment is affirmed.
Each party to bear its own costs.
_________________________
Kline, P.J.
We concur:
_________________________
Richman, J.
_________________________
Miller, J.
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