Smith v. IH4 Prop. W., LP
| Decision Date | 29 March 2019 |
| Docket Number | c/w B279561,B271813,c/w B278477 |
| Court | California Court of Appeals Court of Appeals |
| Parties | TIA SMITH, Plaintiff and Appellant, v. IH4 PROPERTY WEST, LP et al., Defendants and Respondents. |
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
Los Angeles County Super. Ct. No. BC553608
APPEAL from judgments and an order of the Superior Court of Los Angeles County, Teresa A. Beaudet, Judge. Affirmed.
Tia Smith, in pro. per., for Plaintiff and Appellant.
Akerman LLP and Justin D. Balser for Defendants and Respondents Nationstar Mortgage LLC and Homesearch.com Realty Services Inc.
Law Offices of Gregory W. Patterson and Gregory W. Patterson for Defendant and Respondent IH4 Property West, LP.
After unsuccessfully suing her note holder, the trustee of her trust deed, and her loan servicer for wrongful foreclosure, plaintiff filed this action against several entities that participated in subsequent conveyances of her former residence following a trustee sale. The trial court sustained the demurrer of defendants Nationstar Mortgage LLC (Nationstar) and Homesearch.com Realty Services Inc. (Homesearch) without leave to amend, concluding the judgment in plaintiff's prior action precluded the claims against these defendants under the res judicata doctrine. The court also sustained the demurrer of defendants IH4 Property West, LP (IH4) and IH2 Property West, LP (IH2) on res judicata and other grounds. And, after sustaining the defendants' demurrers, the court dissolved a preliminary injunction enjoining IH4, the current owner of the property, from evicting plaintiff and her tenants from the residence. Plaintiff filed separate appeals challenging each of these rulings. We consolidated the appeals for decision and affirm.
Consistent with the applicable standard of review, we draw our statement of facts from the allegations of plaintiff's complaints and other matters properly subject to judicial notice.1 (Stevenson v. Superior Court (1997) 16 Cal.4th 880, 885.) "[W]e treat as true all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law." (Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 178, fn. 3.)
1. Loan Origination and Foreclosure
In 2006, plaintiff executed a promissory note payable to American Mortgage Network to obtain a loan for $556,000, secured by a deed of trust on real property she owned in Los Angeles. Mortgage Electronic Registration Systems, Inc. (MERS) was the beneficiary of the trust deed. By 2007, the RALI 2007-QO1 trust, a mortgage pooling security, had acquired plaintiff's trust deed. Deutsche Bank Trust Company Americas (Deutsche Bank), which was also the trustee for the certificate holders of the RALI 2007-QO1 trust, acquired plaintiff's note. Deutsche Bank retained Aurora Loan Services LLC (Aurora) to service the loan.
In May, June, and August 2008, plaintiff negotiated and entered into three successive loan payment workout agreements with Aurora, each requiring that she make four monthly payments to become current on her loan, the fourth in each case being a balloon payment. She made only the first payment under the first agreement before renegotiating that workout. Under the second agreement, plaintiff made the first, second, and third payments, but on the alleged advice of Aurora's representative did not make the fourth payment. Instead, she negotiated the third workout. Under that agreement, she again made the first, second, and third payments and failed to make the fourth, again on the alleged advice of Aurora's representative, who stated a fourth workout agreement would then be negotiated.
In January 2009, plaintiff and Aurora entered into a fourth workout agreement, calling for four monthly payments that would not yet bring the loan current, after which the parties would renegotiate the terms of the loan. Plaintiff made the four payments, and Aurora's representative advised her not to make any additional payments until she received notice about a loan modification.
Sometime in July 2009, Aurora declined to modify plaintiff's loan. Instead, it extended plaintiff three different workout offers. Plaintiff rejected them all but continued to pursue a loan modification.
On September 15, 2009, MERS substituted Cal-Western Reconveyance Corporation (Cal-Western) as the trustee on plaintiff's deed of trust. On September 23, 2009, Cal-Western executed a notice of default and election to sell against the property based on a $25,509.83 loan default.
On October 1, 2009, MERS assigned to Aurora its beneficial interest in plaintiff's trust deed, "[t]ogether with the note or notes therein described or referred to, in said Deed of Trust, the money due and to become due thereon with interest, and all rights accrued or to accrue under said Deed of Trust." By this time, Aurora had been servicing plaintiff's loan for a year and a half. Aurora recorded the assignment on December 31, 2009.
In January 2010, Aurora offered plaintiff a six-month forbearance agreement—the fifth workout agreement—while considering her application for a loan modification. She accepted the agreement and made the six payments required under it. However, on November 26, 2010, Aurora denied plaintiff's request for modification.
In December 2010, plaintiff resubmitted her request for a loan modification. She made no payments on her loan while the modification request was pending. On June 2, 2011, Aurora denied the loan modification request.
On May 9, 2011, Cal-Western recorded a notice of trustee's sale.
On July 15, 2011, plaintiff filed the Smith I action (see fn. 1, ante) against several financial and mortgage institutions, including MERS; Aurora; and Deutsche Bank, the trustee for the RALI 2007-QO1 trust.
On November 16, 2011, Aurora purchased the property at the trustee's sale for a credit bid of $362,500.
Following the trustee's sale, plaintiff filed her operative third amended complaint in the Smith I action. Among other things, the complaint asserted a claim for wrongful foreclosure and to set aside the trustee's sale, based on the allegation that MERS did not have a legitimate agency relationship with the original lender, and therefore lacked authority to assign a beneficial interest in the note and deed of trust to Aurora. On this basis, the complaint alleged Aurora's "purported status as beneficiary is void ab initio," and Aurora thus lacked "authority to exercise the power of sale" under the deed of trust. Additionally, the complaint alleged Aurora was not a "[c]reditor" and could not legally submit a "credit bid" to acquire the property.
On August 16, 2013, the trial court in Smith I sustained the defendants' demurrer without leave to amend. Plaintiff filed a timely notice of appeal from the resulting judgment.
Around April 2014, Aurora conveyed the property to Nationstar via a quitclaim deed. Nationstar then conveyed the property to IH4 via another quitclaim deed. Both deeds were recorded on April 7, 2014.
On August 4, 2014, while the Smith I appeal was pending, plaintiff filed this action against Aurora, Nationstar, Homesearch, and IH4. Based on her underlying claim in Smith I that Aurora lacked authority to exercise the power of sale and submit a credit bid to purchase the property, plaintiff asserted 10 causes of action, all challenging Aurora's conveyance of the property to Nationstar and Nationstar's subsequent conveyance to IH4.2
On September 5, 2014, Aurora, Nationstar, and Homesearch filed a demurrer to the complaint, arguing, among other things, plaintiff's new action violated the automatic stay in Smith I. On September 10, 2014, plaintiff voluntarily dismissed Aurora, which was a respondent in the Smith I appeal. On November 25, 2014, the trial court stayed all proceedings pending the appellate court's decision in Smith I.
4. IH4 Prevails in an Unlawful Detainer Action and Plaintiff Obtains a Preliminary Injunction Enjoining Eviction
On August 4, 2014, IH4 filed a complaint for unlawful detainer against plaintiff's tenants who occupied the property at the time.3 On August 21, 2014, plaintiff filed a prejudgment claim of right to possession in the unlawful detainer action.
On November 17, 2014, a jury returned a verdict finding IH4 was entitled to possession of the property. Plaintiff appealed the judgment to the superior court's appellate division.4
On March 10, 2015, plaintiff filed an ex parte application for limited relief from the stay in this action and for a temporary restraining order against eviction. The trial court continued the hearing on the application for one week to allow IH4 to file an opposition. IH4 failed to oppose the application and, on March 17, 2015, the trial court issued an order enjoining IH4 from "proceeding in any way with an eviction related to the property" until "further court order."5
5. Division 1 Affirms the Smith I Judgment
On May 21, 2015, our colleagues in Division 1 filed an unpublished opinion affirming the judgment in Smith I. Division 1 concluded the alleged facts and judicially noticeable documents conclusively established plaintiff defaulted on her loan obligations and, therefore, she lacked standing to challenge the foreclosure. The court also held plaintiff had not alleged sufficient facts to support the claim that Aurora never acquired servicing rights when it began servicing her loan in April 2008.
Plaintiff filed a petition for rehearing and a petition for review challenging the Smith I decision. Both were denied. On September 8,...
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