Martinez v. The Bank of New York Mellon CA6

Filed 8/11/21 Martinez v. The Bank of New York Mellon CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
PETRA MARTINEZ et al., H047862
(Monterey County
Plaintiffs and Appellants, Super. Ct. No. 19CV003671)
v.
THE BANK OF NEW YORK MELLON,
as Trustee, etc., et al.,
Defendants and Respondents.
Appellants Petra Martinez and Stanley Atkinson, representing themselves in this
court, have previously filed several unsuccessful wrongful foreclosure actions related to
their former property in Salinas. In 2019, they filed this suit against respondents, The
Bank of New York Mellon (bank)1 the former owner of the loan and property, and
U4RIC Investments, LLC (U4RIC), the property’s current owner. The trial court
sustained bank’s demurrer to the complaint based on principles of res judicata and
entered a judgment of dismissal. For the reasons set forth below, we affirm.
1
Bank was sued in its capacity as a corporate trustee, and the judgment, refers to
bank as “The Bank of New York Mellon f/k/a The Bank of New York as Trustee for the
Certificate Holders of the CWMBS, Inc., CHL Mortgage Pass-Through Trust 2006-
HYB4, Mortgage Pass-Through Certificates Series 2006-HYB4.” (Some capitalization
omitted.)
I. FACTS AND PROCEDURAL BACKGROUND
A. Property, Loan, and Foreclosure
Appellants Martinez and Atkinson (collectively, appellants) are or were married
and previously resided on a property in Salinas, California (property). In or around 2009,
Martinez defaulted on a substantial loan that was secured by the property. In 2009, a first
notice of default was recorded on the property. Bank (which was not the original lender)
was assigned the deed of trust in 2010.
Following extensive litigation, some of which we detail below, a nonjudicial
foreclosure sale of the property occurred in March 2018. In summer 2019, bank
conveyed the property to U4RIC by grant deed. U4RIC successfully brought an unlawful
detainer action pursuant to Code of Civil Procedure section 1161a against Martinez and
Atkinson to gain possession of the property.
B. Other Lawsuits Related to the Property
Appellants extensively litigated issues and claims surrounding the loan, the loan
securitization, and the property foreclosure process. Between 2009 and 2018, either
Martinez or both Martinez and Atkinson brought at least four actions in various courts
against bank and other entities alleging wrongful conduct connected to the loan and
foreclosure proceedings.
One of those lawsuits involved a suit by appellants against bank and several
related entities in 2016 in superior court (case No. 16CV003679) for wrongful
foreclosure of the property. In November 2018, a panel of this court affirmed the
judgment of dismissal in favor of bank and the other respondents. (See Martinez v. The
Bank of New York Mellon (Nov. 7, 2018, H044702) [nonpub. opn.].) In that opinion, this
court decided that the facts in appellants’ complaint did not establish a lack of authority
to foreclose. (Ibid.)
Following the foreclosure sale in March 2018, in April 2018 appellants initiated
another wrongful foreclosure lawsuit (case No. 18CV001430) against bank. Their
2
lawsuit alleged claims similar to those they had made in prior lawsuits. In addition, the
complaint alleged that a 2016 substitution of trustee recorded prior to the foreclosure sale
was “fraudulently flawed on several grounds,” including that the notary’s signature in the
substitution of trustee was “apparently forged.” The trial court entered a judgment of
dismissal in that case, which appellants did not appeal, and which has long since been
final.
B. Current Lawsuit
Shortly after the property was conveyed to U4RIC by grant deed, in September
2019 appellants filed this action in Monterey County Superior Court, against bank and
U4RIC (collectively, respondents).
Bank filed a demurrer. Additionally, bank contemporaneously filed a motion to
deem appellants vexatious litigants based on their prior unsuccessful wrongful
foreclosure-related lawsuits against bank and other entities. As part of their vexatious
litigant motion, bank requested that the trial court order appellants to furnish security
(Code Civ. Proc., §§ 391.1, 391.3) and prohibit them from filing any new litigation in the
courts of the State of California in propria persona without first obtaining leave of the
presiding judge of that court. In support of its demurrer to the original complaint and
vexatious litigant motion, bank filed a request for judicial notice. The request attached
numerous exhibits, including recorded documents related to the loan and foreclosure and
court documents from prior litigation involving either Martinez or both appellants over
the loan and foreclosure-related proceedings.
Rather than respond to the demurrer, appellants filed the operative, amended
complaint on October 30, 2019 (complaint) against defendants.2 Appellants alleged 11
causes of action and sought injunctive relief and various damages and costs. Appellants
2
Following the filing of the amended complaint, bank filed a notice to the court
that it was withdrawing its demurrer to the original complaint. Bank did not withdraw its
vexatious litigant motion or accompanying request for judicial notice.
3
attached several exhibits to the complaint, including a declaration from a purported
handwriting expert named Beth Chrisman who questioned the veracity of signatures on
various recorded documents related to the property. The declaration included the opinion
that the notary’s signature on a recorded 2016 substitution of trustee was forged.
Bank filed a demurrer to all causes of action asserted in the complaint.
Codefendant U4RIC filed a notice of joinder to bank’s demurrer. Bank’s demurrer
argued that the complaint was barred as a matter of law by the doctrines of “res judicata
and collateral estoppel” and, alternatively, appellants’ causes of action failed to state facts
sufficient to constitute a cause of action. Bank filed another request for judicial notice
and attached 38 exhibits, which included this court’s prior 2018 opinion and many of the
same documents attached to its prior request for judicial notice.
On December 13, 2019, the trial court held a hearing on both bank’s demurrer and
vexatious litigant motion. The trial court sustained the demurrer without leave to amend.
The trial court observed that appellants’ first amended complaint was “almost identical”
to case No. 18CV001430, filed in April 2018, which had been dismissed with prejudice
and from which appellants had not appealed. The court found “res judicata” applied and
sustained the demurrer without leave to amend because “here there [are] no facts that are
going to change that this lawsuit was previously filed in April of 2018 under a different
case number.” The court also granted the bank’s request for judicial notice filed in
connection with its demurrer.
Turning to bank’s vexatious litigant motion, the trial court declared appellants
vexatious litigants. The court also granted the request for judicial notice of court
documents filed in connection with the vexatious litigant motion. The trial court ordered
appellants to post bond in the amount of $5,855, representing the estimated attorney fees
to date in the case, “before any further activity with respect to [bank].” The court also
granted a prefiling order prohibiting “plaintiff from filing new litigation” against bank
4
and, upon request by bank, stated it would consider whether it could extend the order
beyond bank.
On January 10, 2020, the trial court entered a written order memorializing its
ruling sustaining the demurrer to the complaint and granting bank’s vexatious litigant
motion.3 The trial court’s written order extends the prefiling order to prohibit appellants
“from filing any further actions against [bank], its associated entities, and agents relating
to the origination, servicing and foreclosure of real property located at 25339 Camino De
Chamisal, Salinas, CA 93908, without first obtaining leave from the presiding Judge and
posting a $5,855.00 bond.”
Appellants timely appealed the judgment of dismissal. Appellants did not obtain a
prefiling order, as required by the trial court’s vexatious litigant order, prior to filing this
appeal.
II. DISCUSSION
In their appeal of the judgment of dismissal, appellants contend the trial court
erred in sustaining the demurrer without leave to amend. Among other claims, appellants
assert that documents related to the foreclosure proceeding were forged and therefore
“null and void.” Both bank and U4RIC have filed briefs contending appellants’ claims
are defective as a matter of law, including based on the doctrine of “res judicata.” Bank
further submits that appellants’ appeal is “barred on its face” by the trial court’s vexatious
litigant finding and prefiling order.
A. Vexatious Litigant Prefiling Order
On appeal, appellants do not challenge (or acknowledge) the trial court’s January
10, 2020 ruling subjecting them to a prefiling order. It is therefore undisputed that
3
The trial court denied, following its entry of judgment, appellants’ motion for
reconsideration of the trial court’s order sustaining the demurrer and declaring appellants
vexatious litigants. Appellants do not contend the trial court erred in denying their
motion for reconsideration.
5
appellants were subject to a prefiling order requiring them to seek permission from this
court prior to filing this appeal, and they failed to do so. (See McColm v. Westwood Park
Ass’n (1998) 62 Cal.App.4th 1211, 1219, disapproved on another ground in John v.
Superior Court (2016) 63 Cal.4th 91, 97–98.) Bank contends that the appeal should be
dismissed on this ground.
Where the clerk of the court erroneously files new litigation by a vexatious
litigant, the court may stay the action and direct the litigant to submit a request to proceed
with the litigation. (Code Civ. Proc., § 391.7, subd. (c).) While a court may take such
action, the relevant statute does not mandate it do so. (Code Civ. Proc., § 391.7, subd.
(c).) Because appellants did not and still do not appear on the record of vexatious
litigants subject to prefiling orders maintained by the Judicial Council, and because prior
to filing its respondent’s brief the bank failed to notify this court of appellants’ vexatious
litigant status, this court did not stay the action nor direct appellants to seek permission to
proceed before briefing was completed.4
As the parties have fully briefed the appeal, staying the action and directing
appellants to seek permission to proceed with the litigation at this juncture would serve
no purpose. Code of Civil Procedure section 391.7, subdivision (b), authorizes the
presiding justice to permit a vexatious litigant to file the appeal “if it appears that the
[appeal] has merit and has not been filed for the purposes of harassment or delay.” At
this late stage of the appellate process, any submission from appellants regarding merit,
harassment, or delay would be superfluous.
Appellants’ contentions show at least arguable merit sufficient to warrant the
unauthorized appeal to proceed on the merits. Therefore, we decline to dismiss the
appeal and reject bank’s assertion that the appeal is barred on its face. Nevertheless, as
4
Appellants do not appear on the list maintained by the Judicial Council. The
clerk of this court is directed to forward a copy of the January 10, 2020 order to the
Judicial Council for inclusion of Martinez and Atkinson on the vexatious litigant list.
6
explained more fully below, we conclude that the arguable merit of appellants’ claims
does not withstand close examination.
B. Order Sustaining Demurrer Without Leave to Amend
In our review of the trial court’s ordering sustaining the demurrer, “we accept the
truth of material facts properly pleaded in the operative complaint, but not contentions,
deductions, or conclusions of fact or law.” (Yvanova v. New Century Mortgage Corp.
(2016) 62 Cal.4th 919, 924.) We also accept as true facts of which a court may take
judicial notice. (Ibid.) “To determine whether the trial court should, in sustaining the
demurrer, have granted the plaintiff leave to amend, we consider whether on the pleaded
and noticeable facts there is a reasonable possibility of an amendment that would cure the
complaint’s legal defect or defects.” (Ibid.) The plaintiff has the burden of
demonstrating there is a reasonable possibility the defect can be cured by amendment,
and that the trial court abused its discretion in finding otherwise. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318 (Blank).) We may deem issues not raised or supported by
legal authority as forfeited. (See In re Marriage of Davila & Mejia (2018) 29
Cal.App.5th 220, 227). Self-represented litigants are subject to the same rules as litigants
who are represented by legal counsel. (Rappleyea v. Campbell (1994) 8 Cal.4th 975,
984–985.)
Applying these well-established principles, we agree with bank that appellants
have not made any discernible argument that the trial court erred in sustaining the
demurrer as to the majority of the causes of action in the complaint.5 (See Paterno v.
5
Specifically, appellants do not address the following six claims that are titled a
“cause of action” in their complaint: “filing false complaint” related to an unlawful
detainer action (sixth cause of action), “holder of a void note” (seventh cause of action),
“holder of a void deed of trust” (eighth cause of action), “no chain of endorsement”
(ninth cause of action), “violation of court order” (tenth cause of action) related to an
order in a 2010 unlawful detainer case that preceded the later unlawful detainer
proceedings, and “sale of plaintiffs’ property at mock auction” (eleventh cause of action).
7
State of California (1999) 74 Cal.App.4th 68, 106.) We decline to address these
undeveloped claims. (See Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, 984–
985.)
Appellants’ briefing appears to challenge the trial court’s order only insofar as it
sustained the demurrer with respect to the causes of action for unlawful foreclosure (first
cause of action), cancellation of instrument (second cause of action), quiet title (third
cause of action), violation of Civil Code section 2924, subdivision (a)(6), a provision of
the California Homeowner Bill of Rights (fourth cause of action), and violation of
California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.) (fifth cause of
action). Appellants’ claims are premised on bank’s wrongful foreclosure and lack of
authority to foreclose and are largely underpinned by the allegation that the 2016
substitution of trustee was forged rendering the foreclosure sale invalid. However,
because appellants’ complaint was barred by the doctrines of claim and issue preclusion,
the trial court properly sustained bank’s demurrer without leave to amend.
The term “ ‘res judicata’ ” (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813,
823) is often used “as an umbrella term encompassing both claim preclusion and issue
preclusion, which [is] described as two separate ‘aspects’ of an overarching doctrine.
[Citations.] Claim preclusion, the ‘ “ ‘primary aspect’ ” ’ of res judicata, acts to bar
claims that were, or should have been, advanced in a previous suit involving the same
parties. [Citation.] Issue preclusion, the ‘ “ ‘secondary aspect’ ” ’ historically called
collateral estoppel, describes the bar on relitigating issues that were argued and decided
in the first suit.” (Id. at pp. 823–824.) “ ‘ “The prerequisite elements for applying the
doctrine to either an entire cause of action or one or more issues are the same: (1) A
claim or issue raised in the present action is identical to a claim or issue litigated in a
Even assuming appellants had not forfeited their arguments as to these claims, their
contention that the trial court erred lacks merit. For instance, several of these causes of
action were plainly barred under the doctrine of claim preclusion.
8
prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and
(3) the party against whom the doctrine is being asserted was a party or in privity with a
party to the prior proceeding.” ’ ” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th
788, 797.) “ ‘A predictable doctrine of res judicata benefits both the parties and the
courts because it “seeks to curtail multiple litigation causing vexation and expense to the
parties and wasted effort and expense in judicial administration.” ’ ” (Gillies v.
JPMorgan Chase Bank, N.A. (2017) 7 Cal.App.5th 907, 914 (Gillies).)
Appellants have previously litigated the validity of the loan and foreclosure of the
property. Their earlier litigation was unsuccessful, and the sale of the property has been
upheld. Indeed, in 2018, this court rejected numerous theories of wrongful foreclosure
advanced by appellants, including the same core claim they make here that bank was not
authorized to foreclose on their home. (See Martinez v. The Bank of New York Mellon,
supra, H044702.) Additionally, as the trial court noted, appellants’ April 2018 lawsuit
alleged issues identical to the present lawsuit, including forgery of the 2016 substitution
of trustee. There is no dispute that the trial court in that prior 2018 lawsuit entered a
judgment of dismissal, which appellants did not appeal, and which has long since been
final.
In support of their argument that the current lawsuit should nevertheless survive,
appellants rely extensively on the declaration attached to their complaint from their
handwriting expert (Chrisman). Appellants assert that Chrisman’s declaration was “made
last year” and “provided better proof that there were forged documents” and “[a]ppellants
have new Causes of Action.” However, their argument fails because there is no dispute
that the issue of whether the recorded documents were forged could have been raised
earlier and, at least as to the 2016 substitution of trustee, was in fact raised and litigated.
(See Direct Shopping Network, LLC v. James (2012) 206 Cal.App.4th 1551, 1559.) “A
party cannot ‘ “by negligence or design withhold issues and litigate them in consecutive
actions” ’ [citation], or ‘escape the bar of the prior decision[] by asserting that . . . [it has]
9
other evidence which was not introduced in the earlier proceedings.’ ” (Ibid.) “
‘Somewhere along the line, litigation must cease.’ ” (Gillies, supra, 7 Cal.App.5th at
p. 914.) The doctrines of claim and issue preclusion bar appellants from attempting to
resurrect the validity of the foreclosure sale now, including on the theory that certain
recorded documents were forged.6
Regarding the trial court’s order denying leave to amend, appellants do not
attempt to show that any amendment could cure the defects alleged in their complaint.
We therefore must conclude that the trial court did not abuse its discretion in sustaining
the demurrer without leave to amend. (Blank, supra, 39 Cal.3d at p. 318.)
III. DISPOSITION
The judgment is affirmed. Respondents are awarded costs on appeal. (Cal. Rules
of Court, rule 8.278(a)(1) & (2).)
6
Similarly unavailing is appellants’ reliance on the United States Supreme Court’s
observation in a trademark case that “claim preclusion generally ‘ “does not bar claims
that are predicated on events that postdate the filing of the initial complaint.” ’ ” (Lucky
Brand Dungarees, Inc. v. Marcel Fashions Group, Inc. (2020) 590 U.S. ___, ___, 140
S.Ct. 1589, 1596.) The core events of the underlying loan and filing of recorded
documents in the foreclosure process all predate at least the filing of the April 2018
complaint. The assertion that appellants may have marshalled “better proof” that certain
documents may have been forged is irrelevant under these circumstances.
10
______________________________________
Danner, J.
WE CONCUR:
____________________________________
Greenwood, P.J.
____________________________________
Grover, J.
H047862
Martinez et al. v. Bank of New York Mellon et al.