Valladares v. Calliance Realty Fund CA2/2 ( 2014 )

Filed 9/5/14 Valladares v. Calliance Realty Fund CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
SECOND APPELLATE DISTRICT
DIVISION TWO
LETICIA VALLADARES, Individually B243876
and as Trustee, etc.,
(Los Angeles County
Plaintiff and Appellant, Super. Ct. No. BC470177)
v.
CALLIANCE REALTY FUND LLC et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Deidre Hill, Judge. Affirmed.
William Beck for Plaintiff and Appellant.
Alpert, Barr & Grant, Gary L. Barr, Mark S. Blackman for Defendants and
Respondents.
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The trial court sustained demurrers to a first amended complaint without leave to
amend and entered judgment for the defendants. On appeal, plaintiff does not contend
that the operative pleading has any merit. Instead, plaintiff seeks leave to file an entirely
new pleading, with different facts and new theories of recovery. Although the possibility
of amending a pleading is open on appeal, plaintiff failed to carry her burden of showing
that an amendment would cure any defects. We affirm.
FACTS
The responding defendants in this appeal are Capital Alliance Advisors and its
loan servicer Calliance Realty Funding. In November 2007, Capital Alliance loaned
Leticia Valladares $760,000, secured by a deed of trust on real property (the Property).
The promissory note requires repayment by December 1, 2010.
Valladares soon defaulted on her monthly payments. She and Calliance entered a
modification agreement in December 2008 (the Modification). The Modification recites
arrearages of $78,033, dating from March 1, 2008, which were added to the principal
balance for a total debt of $838,033. Calliance agreed to temporarily decrease the interest
rate and lower Valladares’s payments. In return, Valladares agreed to give the lender title
to a vehicle as additional collateral. In consideration for the Modification, Valladares
agreed to pay a fee of $7,500.
A notice of trustee’s sale was recorded, stemming from Valladares’s second
default. The Property was sold at public auction in June 2011. Valladares sued on the
theory that respondents lacked standing to foreclose on the deed of trust: they allegedly
failed to perfect their security interest in the Property and “cannot establish possession
and proper transfer and/or endorsement of the Promissory Note and proper assignment of
the Deed of Trust.”
Respondents demurred to the complaint. They challenged the foundation for
Valladares’s claim that the foreclosing creditor lacked lawful ownership or a security
interest in the Property, and asked the trial court to take judicial notice of recorded
documents showing the validity of their ownership.
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In response to the demurrer, Valladares filed a first amended complaint. Her
appellate brief describes the amended pleading as “essentially identical to the original
Complaint.” Two weeks after filing the amended pleading, plaintiff’s attorney asked to
be relieved from representing her.
Respondents demurred. After pointing out that the two pleadings are “almost
word-for-word identical,” they argued that they held title to the Property from the date
the loan was made to the date of foreclosure. Three days before the hearing on the
demurrer—and two months after plaintiff’s counsel sought to withdraw from
representation—Valladares tried to delay the matter and (purportedly) offered the court a
proposed second amended complaint (SAC). Valladares concedes in her opening brief
that the SAC “never made it into the Court’s file, according to its electronic docket
sheet,” and the trial court never saw it. Valladares did not seek leave from the trial court
to file the SAC.
At the hearing on the demurrer, Valladares asked for leave to allow new counsel to
substitute into the case and amend the complaint. The trial court denied both requests,
reasoning that Valladares had ample opportunity to find new counsel and file a motion to
amend between May 2, 2012 (when the first amended complaint was filed) and July 16,
2012 (the date of the hearing). The court sustained demurrers to the first amended
complaint without leave to amend. Valladares appeals from the judgment.
DISCUSSION
1. Appeal and Review
Appeal lies from the judgment after demurrers are sustained without leave to
amend. (Code Civ. Proc., § 581d, 904.1, subd. (a)(1); Serra Canyon Co. v. California
Coastal Com. (2004) 120 Cal. App. 4th 663, 667; Tanen v. Southwest Airlines Co. (2010)
187 Cal. App. 4th 1156, 1162.) We review de novo the ruling on the demurrers,
exercising our independent judgment to determine whether a cause of action has been
stated. (Desai v. Farmers Ins. Exchange (1996) 47 Cal. App. 4th 1110, 1115.) We
assume that the pleading’s material allegations are true. (Moore v. Regents of University
of California (1990) 51 Cal. 3d 120, 125.)
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2. The First Amended Complaint
Valladares acknowledges that the demurrer to the first amended complaint “was
sustained, which it should have been,” adding that the original complaint and its
amendment “did not make sense” and “missed the point.” We do not address the merits
of the first amended complaint in this opinion because Valladares does not contend that
any portion of that pleading states a viable claim. She has abandoned her original claim
that respondents lacked standing to foreclose on the Property.
3. Leave to Amend
Valladares says “she should have been allowed to file a SAC by new lawyers and
have the Superior Court render judgment on it.” She wishes to allege new facts and
claims. Plaintiff’s ability to amend her pleading is “open on appeal.” (Code Civ. Proc.,
§ 472c, subd. (a).) She must show a reasonable possibility that an amendment would
cure any defects. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1081; Aubry
v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962, 967.) “The burden of proving such
reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985) 39 Cal. 3d
311, 318.) The papers must spell out how an amendment can cure a defect or change the
legal effect of the pleading. Leave to amend should not be granted if it would be an
exercise in futility. (Long v. Century Indemnity Co. (2008) 163 Cal. App. 4th 1460, 1467-
1468.)
Valladares’s brief offers a section heading that reads, “The standard of review also
requires plaintiff to show the appellate court in what manner amendments can be made to
the complaint which will change the legal effect of the pleadings.” This is a correct
statement of the law. However, the opening brief fails to show that the pleading can be
amended to survive demurrer. (See McAllister v. Los Angeles Unified School Dist.
(2013) 216 Cal. App. 4th 1198, 1214 [this Court declined to reverse a demurrer sustained
without leave to amend “[b]ecause appellant has completely failed to make any factual
showing supporting her claim” to satisfy us that an amendment is appropriate].)
For example, the brief states that information obtained from Valladares “appear[s]
to establish her performance on the interest only loan.” To survive demurrer on a
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wrongful foreclosure claim, plaintiff must allege a full tender of the debt. “Allowing
plaintiffs to recoup the property without full tender would give them an inequitable
windfall, allowing them to evade their lawful debt.” (Stebley v. Litton Loan Servicing,
LLP (2011) 202 Cal. App. 4th 522, 526.) Plaintiff hedges whether or not she performed.
Certainly, there is no claim in the brief that she fully tendered the principal—plus
arrearages and delinquency fees—when the foreclosure took place.
Elsewhere in her brief, Valladares hints that she and respondents discussed a
resolution. They agreed on a buyout of $725,000, but respondents wanted a lump sum
payment while Valladares wanted to make four payments over time. The law imposes no
duty on lenders to agree to a loan modification. (Hamilton v. Greenwich Investors XXVI,
LLC (2011) 195 Cal. App. 4th 1602, 1617.) Preliminary negotiations for a modification do
not show a meeting of the minds, so a debtor’s hope “that the notes would be ‘redone’
thus raises no triable issue as to a legally enforceable understanding inconsistent with the
written terms of the notes.” (Price v. Wells Fargo Bank (1989) 213 Cal. App. 3d 465, 483,
overruled on other grounds in Riverisland Cold Storage, Inc. v. Fresno-Madero
Production Credit Assn. (2013) 55 Cal. 4th 1169, 1182.) Valladares’s payments on the
debt are unavailing: she had a contractual obligation to pay, notwithstanding the lender’s
willingness to discuss a modification. (Auerbach v. Great Western Bank (1999) 74
Cal. App. 4th 1172, 1185-1187; Lueras v. BAC Home Loans Servicing, LP (2013) 221
Cal. App. 4th 49, 79.)
Valladares suggests that this Court might review the legal sufficiency of her
proposed SAC “right off-the-bat,” to determine if any viable causes of action are stated,
citing Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal. App. 3d
1371. The Careau case reiterates that plaintiff must show the appellate court that a
proposed amendment states a viable cause of action. (Id. at p. p. 1388.) Plaintiff’s brief
offers no analysis of her proposed SAC. She makes no attempt to show this Court how
she can allege facts to establish the requisite legal elements in a way that is sufficient to
survive demurrer. Indeed, she does not even mention what her proposed new causes of
action might be.
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In short, plaintiff cites statutory and case law authorizing appellate courts to
examine proposed amendments to determine whether a viable cause of action exists.
What is missing from the brief is step two: case/statutory citations demonstrating why
Valladares’s proposed amendment is legally sufficient. An appellate court is not charged
with doing plaintiff’s work of researching the elements of possible claims and reciting
factual allegations supporting those elements. Valladares has failed to carry her burden
of convincing this Court that she can make viable claims in her proposed SAC.
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
BOREN, P.J.
We concur:
CHAVEZ, J.
FERNS, J.*
_____________________________________________________________________
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant
to article VI, section 6 of the California Constitution.
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