Pinson v. Blue Mountain Homes CA2/1 ( 2016 )

Filed 2/29/16 Pinson v. Blue Mountain Homes CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 ONE
YVETTE PINSON, B260751
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC518148)
v.
BLUE MOUNTAIN HOMES, LLC, et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Malcolm H. Mackey, Judge. Affirmed.
Yvette Pinson, in pro. per., for Plaintiff and Appellant.
Law Office of Mike Hogan and Mike Hogan for Defendant and Respondent Blue
Mountain Homes, LLC.
Bryan Cave, Richard C. Ochoa, and Richard P. Steelman, Jr., for Defendants
and Respondents Countrywide Home Loans, Inc., CTC Real Estate Service, and
Mortgage Electronic Registration Systems, Inc.
__________
Appellant Yvonne Pinson defaulted on a home loan, and respondent Blue
Mountain Homes, LLC (BMH) acquired the property through a conveyance pursuant to a
foreclosure sale. Pinson filed this action attacking the validity of the foreclosure sale.
Several months thereafter, BMH initiated an unlawful detainer action against Pinson.
The two actions proceeded simultaneously.
Following a trial on the merits in the unlawful detainer case, a judgment was
entered in favor of BMH. Pinson appealed that judgment, alleging, among other things,
that the trial court erred because the chain of title pertaining to the property was
defective. The appellate division of the superior court rejected her arguments and
affirmed the trial court. Meanwhile, the trial court in the instant case sustained
respondents’ demurrer to Pinson’s first amended complaint without leave to amend.
Pinson filed a post-judgment motion for relief from that dismissal pursuant to Code of
Civil Procedure section 473, subdivision (b),1 which the trial court denied. Pinson
subsequently filed this timely appeal.
Because we determine that the unlawful detainer judgment conclusively
established BMH’s title and lawful possession, Pinson’s claims are barred by collateral
estoppel, and any amendment would be futile. We therefore affirm the trial court’s ruling
sustaining the demurrer without leave to amend and the trial court’s denial of Pinson’s
motion to amend pursuant to section 473, subdivision (b).
FACTS AND PROCEDURAL HISTORY
On April 12, 2006, Yvette Pinson executed a deed of trust securing a promissory
note in the amount of $360,000 in order to purchase the property located at 1307 West
111th Street, Los Angeles, California 90044 (Property). Less than two years later,
Pinson defaulted on her loan, and on April 16, 2008, the trustee recorded a notice
of default and election to sell, indicating that Pinson was $12,778.82 in arrears.
On September 29, 2011, at the trustee’s public sale, the foreclosing lender, Bank of New
York Mellon (BONYM) purchased the property for $195,750. The amount of unpaid
1
All subsequent statutory references are to the Code of Civil Procedure unless
otherwise noted.
2
debt at the time of sale was $469,223.81. On August 8, 2013, BONYM sold and
transferred title of the property to BMH via a quitclaim deed. Pinson, however, refused
to surrender the property, which she had been renting to a tenant for $1,500 per month for
over one year. On August 14, 2013, Pinson filed her complaint in the instant action
alleging wrongful foreclosure. On December 28, 2013, BMH served a written notice on
Pinson demanding that she quit the property within three days of service. Pinson and her
tenant refused to do so. On January 8, 2014, BMH filed an unlawful detainer complaint.
A. The Unlawful Detainer Case
On February 28, 2014, BMH filed its first amended complaint in the unlawful
detainer action pursuant to section 1161a, subd. (b). Pinson filed an answer generally
denying the allegations in the complaint and asserting an affirmative defense that BMH
“lacked standing.”
At trial on June 6, 2014, William Lujan, BMH’s director of occupied properties,
testified and the trial court admitted several documents into evidence, including the
original notice of default, notice of trustee sale, trustee’s deed upon sale and the quitclaim
deed. Pinson then testified that she was the former owner of the property, and she was
currently involved in litigation regarding title to the property.
The trial court found that Pinson vacated the property three years earlier, but
she had been, and continued to be, renting it to her tenant, William Thompson, for
$1,500 a month for over one year. The court rendered judgment for BMH, awarding it
restitution of the property and damages. Pinson appealed the judgment claiming that the
trial court erred in admitting unauthenticated documents and that BMH lacked standing
based on defective title. On June 24, 2015, the appellate division of the superior court
rejected her arguments and affirmed the trial court.2
2
On November 2, 2015, we granted BMH’s request for judicial notice of
the appellate division of the superior court’s opinion issued on June 24, 2015.
3
B. The Instant Case
Pinson filed her first amended complaint (FAC) in this action on May 30, 2014,
alleging fraud in the chain of title and wrongful foreclosure, and seeking a judgment to
quiet title to the property. On July 1, 2014, BMH filed and served its demurrer to the
first amended complaint and notice of the September 9, 2014 hearing on the demurrer.
On August 12, 2014, BMH’s co-defendants—Countrywide Home Loans, Inc., CTC Real
Estate Service and Mortgage Electronic Registration Systems, Inc. (codefendants)—filed
a notice of joinder to BMH’s demurrer.
On September 9, 2014, the trial court heard BMH’s demurrer to Pinson’s first
amended complaint and codefendants’ joinder motion. Although she received notice of
the hearing, Pinson did not appear or file an opposition to the demurrer or an opposition
to the codefendants’ joinder.3 At the hearing, the trial court sustained, without leave to
amend, BMH’s demurrer and the codefendants’ joinder “based upon all of their page
numbers,” and dismissed the case. On October 29, 2014, the trial court heard, and
denied, Pinson’s ex parte application for an order to vacate and set aside the order
sustaining defendants’ demurrer without leave to amend, finding that there were “no new
facts or circumstances alleged.” Pinson filed this timely appeal.
DISCUSSION
I. Standard of Review
A demurrer tests the legal sufficiency of the complaint. We review the complaint
de novo to determine whether it alleges facts sufficient to state a cause of action. For
purposes of review, we accept as true all material facts alleged in the complaint, but not
contentions, deductions or conclusions of fact or law. We also consider matters that may
be judicially noticed. (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) “On appeal, we do
3
Pinson alleges in her opening brief that she “has attempted to file or has filed
opposition response motions which may not have been properly placed in the file from
the various Court Departments in which [p]laintiff has appeared.” The docket sheet for
this case, however, contains no such filings.
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not review the validity of the trial court’s reasoning but only the propriety of the ruling
itself.” (Rodas v. Spiegel (2001) 87 Cal. App. 4th 513, 517.)
We apply the abuse of discretion standard in reviewing a trial court’s denial of
leave to amend. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) The plaintiff bears the
burden of proving there is a reasonable possibility that she can cure the defect by
amendment. (Ibid.) Leave to amend, however, should not be granted where amendment
would be futile because, under substantive law, there is no liability. (Heckendorn v. City
of San Marino (1986) 42 Cal. 3d 481, 486.)
II. Pisnon’s Proposed Causes of Action Are Barred By Collateral Estoppel
On appeal, Pinson contends the trial court erroneously sustained the demurrer
without leave to amend, reasoning that she was denied due process because any defects in
the first amended complaint could have been cured by amendment. She also argues that
non-judicial foreclosure sales in general are “unconstitutional” because they can be based
on “fraudulent documentation or defective c[l]aim of ownership and title.” In essence,
Pinson is claiming that she should be permitted to attack and unwind the foreclosure sale
by which BMH acquired the property and is entitled to damages for alleged irregularities
in the process. We disagree.
We determine that Pinson is collaterally estopped from challenging the foreclosure
sale under the causes of action at issue in this appeal because the unlawful detainer
judgment in favor of BMH conclusively established that it lawfully had possession of the
property and that it perfected its title to the property, i.e., that the foreclosure was
properly conducted pursuant to Civil Code section 2924 et seq.4
“Under collateral estoppel, once a court has decided an issue of fact or law
necessary to its judgment, that decision may preclude relitigation of the issue in a suit on
4
Contrary to Pinson’s allegations, the Supreme Court of California has affirmed the
constitutionality of non-judicial foreclosure sales under Civil Code section 2924, holding
that they do not involve “state action,” and, thus the constitutional guarantees of
substantive due process and equal protection do not apply, and their notice provisions
comport with procedural due process requirements. (See, e.g., Garfinkle v. Superior
Court (1978) 21 Cal. 3d 268, 272, 283.)
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a different cause of action involving a party to the first case.” (San Remo Hotel, L. P. v.
City and County of San Francisco (2005) 545 U.S. 323, 336 fn. 16.) The purposes of the
doctrine are “to promote judicial economy by minimizing repetitive litigation, to prevent
inconsistent judgments which undermine the integrity of the judicial system, [and] to
protect against vexatious litigation.” (Clemmer v. Hartford Insurance Co. (1978)
22 Cal. 3d 865, 875.)
The application of the collateral estoppel doctrine requires that: (1) the issues in
the two matters be identical; (2) the previous proceeding resulted in a final judgment on
the merits; and (3) the party against whom collateral estoppel is asserted was party to
the previous proceeding. (Syufy Enterprises v. City of Oakland (2002) 104 Cal. App. 4th
869, 878.)
Our Supreme Court has recognized the potential of an unlawful detainer judgment
to collaterally estop subsequent litigation: “Applying the traditional rule that a judgment
rendered by a court of competent jurisdiction is conclusive as to any issues necessarily
determined in that action, the courts have held that subsequent fraud or quiet title suits
founded upon allegations of irregularity in a trustee’s sale are barred by the prior
unlawful detainer judgment.” (Vella v. Hudgins (1977) 20 Cal. 3d 251, 256.)
The fundamental issue in an unlawful detainer proceeding is the plaintiff’s right to
possession. (See Old National Financial Services, Inc. v. Seibert (1987) 194 Cal. App. 3d
460, 465.) But where, as here, the unlawful detainer action is brought pursuant to
section 1161a, subdivision (b)(3), title is also an issue. This section provides that an
unlawful detainer action may be filed “[w]here the property has been sold in accordance
with Section 2924 of the Civil Code, under a power of sale contained in a deed of
trust . . . and the title under the sale has been duly perfected.” (§ 1161a, subd. (b)(3).)
Indeed, in a similar case, the Court of Appeal held that parties were collaterally
estopped from relitigating issues of title where the sole basis upon which a plaintiff in an
unlawful detainer case asserted its right to possession of the property was its “duly
perfected” legal title obtained in the non-judicial foreclosure sale and the validity of its
title had to be resolved in the unlawful detainer action. (Malkoskie v. Option One
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Mortgage Corp. (2010) 188 Cal. App. 4th 968, 974.) The Malkoskie court concluded that
the “judgment [in the unlawful detainer case] conclusively determined the specific factual
contentions embraced by the complaint, namely that [plaintiff] had obtained valid record
title pursuant to a nonjudicial foreclosure sale that had been duly conducted pursuant to
statute.” (Id. at p. 975.)
Here, BMH alleged in its unlawful detainer complaint that its title was “duly
perfected.” In Pinson’s answer to that complaint and in her appeal of that judgment, she
contended that title was defective and BMH lacked standing because the foreclosure sale
was unlawful. Under these circumstances, the conduct of the sale and the validity of the
resulting transfer of title to BMH were directly at issue in the unlawful detainer case and
the validity of BMH’s title had to be resolved. (Malkoskie v. Option One Mortgage
Corp., supra, 188 Cal.App.4th at p. 974.)
Because all of Pinson’s claims against all respondents are premised on the alleged
invalidity of the foreclosure sale and defects in title, we find that she is collaterally
estopped from asserting any of these claims against any respondent. The legality and
validity of the foreclosure sale were finally determined and established as a matter of law
against Pinson, thereby defeating her claims against all respondents.5 The unlawful
detainer judgment now precludes us from considering the merits of Pinson’s claims on
appeal. Because leave to amend under these circumstances would be futile, we find that
the demurrer was properly sustained without leave to amend. (Vaillette v. Fireman’s
Fund Ins. Co. (1993) 18 Cal. App. 4th 680, 685.)
5
The appeal on the unlawful detainer judgment was decided after the trial court
sustained the demurrer at issue in this appeal, so collateral estoppel was not raised below,
but respondents raised the issue here.
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DISPOSITION
We affirm the trial court’s judgment dismissing the case. Respondents are entitled
to recover their costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, P. J.
We concur:
JOHNSON, J.
LUI, J.
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