WILKINSON et al v. PHH MORTGAGE CO. et al

April 24, 2026 Dept. 9 Tentative Rulings

5. 25CV3113 WILKINSON et al v. PHH MORTGAGE CO. et al Demurrer

This demurrer was filed on December 19, 2025, and was continued from its original March 13, 2026, hearing date. No opposition has been filed, and the demurring parties have filed a Declaration indicating that the Plaintiff did not respond to meet and confer efforts.

The demurring Defendants are financial institutions associated with a 1999 loan to a prior owner of the property on a residential real property that was the subject of a foreclosure sale. Plaintiff’s Complaint asserts that the foreclosure sale was accomplished without judicial order, without proper venue, and without service of process. Complaint, para. 5.9. Specifically, underlying the causes of action in the Complaint are Plaintiffs’ assertions that Defendants lacked standing to enforce the terms of the loan and that the loan itself was void ab initio.

Request for Judicial Notice

Judicial notice is a mechanism which allows the court to take into consideration matters which are presumed to be indisputably true. California Evidence Code Sections 451, 452, and 453 collectively govern the circumstances in which judicial notice of a matter may be taken. While Section 451 provides a comprehensive list of matters that must be judicially noticed, Section 452 sets forth matters which may be judicially noticed. A trial court is required to take judicial notice of any matter listed in section 452 if a party requests it and gives the other party sufficient notice to prepare to meet the request.

Evidence Code § 453. Evidence Code § 452 lists matters of which the court may take judicial notice. Evidence Code § 452(c) allows the court to take judicial notice of “official acts of the legislative, executive and judicial departments of the United States and of any state of the United States.” Evidence Code § 452(d) permits judicial notice of “records of (1) any court in this state or (2) any court of record of the United States.”

Accordingly, Defendants’ Requests for Judicial Notice of materials that fall within the categories covered by Evidence Code § 452(c) and (d) are granted.

Standard of Review A demurrer tests the sufficiency of a complaint by raising questions of law. (Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 20, 223 Cal.Rptr. 806.) In determining the merits of a demurrer, all material facts pleaded in the complaint and those that arise by reasonable implication, but not conclusions of fact or law, are deemed admitted by the demurring party. (Moore v. Conliffe, supra, 7 Cal.4th at p. 638, 29 Cal.Rptr.2d 152, 871 P.2d 204; Interinsurance Exchange v. Narula, supra, 33 Cal.App.4th at p. 1143, 39 Cal.Rptr.2d 752.) The complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. (Flynn v. Higham (1983) 149 Cal.App.3d 677, 679, 197 Cal.Rptr. 145.)

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Rodas v. Spiegel, 87 Cal. App. 4th 513, 517 (2001).

In addition to the facts actually pleaded, the court considers facts of which it may or must take judicial notice. Cantu v. Resolution Trust Corp., 4 Cal.App.4th 857, 877 (1992).

Factual Background

The 1999 loan at issue has been the subject of a chain of assignments, and Defendant Bank of New York Mellon Trust Company (“BNYM”) is the current assignee-beneficiary of record. RJN No. 52, Exhibit D. Defendant PHH Mortgage Company (“PHH”) is the current servicer of the loan. Id., Exhibit C. Defendant Western Progressive, LLC (“WP”) is the substituted trustee of record, RJN No.

51.

According to the demurrer, the original borrower (“Borrower”) defaulted several times on the loan between 2000 and 2016. Request for Judicial Notice (“RJN”) Nos. 2-17. In the interim, the Borrower filed for bankruptcy in 2012, and in the course of those proceedings conceded that the loan was an undisputed secured interest in the real property. RJN No.

22. Plaintiff also filed for bankruptcy in 2014 and also conceded that the loan is an undisputed secured interest in the real property that was listed as an asset of Plaintiff. RJN No.

23.

The Borrower defaulted again in 2017, leading to a scheduled Trustee Sale on March 13, 2018. Borrower and Plaintiff, who are co-owners of the property, filed a lawsuit IN El Dorado County Superior Court (PC20180114, RJN No. 25), requesting an injunction, which was denied and the matter was dismissed with prejudice when the parties negotiated a loan modification in settlement. RJN No.

28. Thereupon the Borrower and Plaintiff filed a petition for Chapter 13 bankruptcy. RJN No.

29. Borrower passed away in 2020. Complaint, para. 4.5.

Another default occurred in 2021, and a Trustee Sale was scheduled for May 23, 2024. RJN No.

31. In response, Plaintiff filed both a federal lawsuit (“2024 Federal Action”) and another Chapter 13 bankruptcy action (RJN No. 32). The trustee sale proceeded on September 26, 2024 (RJN No. 33). Defendant WP erroneously recorded the Trustee’s Deed Upon Sale during the bankruptcy court’s stay (RJN No. 40) and for that reason that Deed was rescinded on May 7, 2025 (RJN No. 41).

Following these events Plaintiff filed an “Adversary Complaint” in bankruptcy court (“2025 Federal Action”), alleging violation of the bankruptcy stay, as well as causes of action challenging the underlying loan (for lack of consideration and lack of statutory authority to make a private residential loan) and alleging violations of the Fair Debt Collection Practices Act (because the underlying debt was void and unconscionable). RJN No.

42. All of these claims were dismissed by the bankruptcy court in the 2025 Federal Action except the claim related to the violation of the automatic stay. This action is still pending as to that single claim. As to the

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Plaintiffs’ challenges to the underlying loan transactions (lack of consideration) and the Fair Debt Collection Practices Act, these claims were all dismissed with prejudice. RJN No.

43.

The 2024 Federal Action included causes of action based on lack of standing to foreclose, fraud in the loan origination and breach of contract. In response to Defendants’ motion the court dismissed the matter on May 1, 2025, based on Plaintiff’s lack of standing to challenge the loan origination or to maintain an action for wrongful foreclosure. RJN No.

37.

Analysis

Defendants demur to the First Cause of action in the Complaint (wrongful foreclosure) on the grounds that Plaintiffs lack standing to challenge the contract comprising the mortgage or the foreclosure because he was not a party to the loan agreement, a matter which was previously determined in prior judicial proceedings and is now barred by res judicata:

Res judicata bars a subsequent claim when “1) the decision in the prior proceeding is final and on the merits; (2) the present proceeding is on the same cause of action as the prior proceeding; and (3) the parties in the present proceeding or parties in privity with them were parties to the prior proceeding.”

The doctrine of collateral estoppel or issue preclusion is a secondary form of res judicata... It prevents a party who had a full and fair opportunity to litigate on a particular issue in a prior proceeding from relitigating it in a subsequent proceeding.”

Colombo v. Kinkle, Rodiger & Spriggs (2019) 35 Cal.App.5th 407, 416.

“Res judicata or claim preclusion bars relitigation of a cause of action that previously was adjudicated in another proceeding between the same parties or parties in privity with them. [Citation.] Res judicata applies if the decision in the prior proceeding is final and on the merits and the present proceeding is on the same cause of action as the prior proceeding. [Citation.] Res judicata bars the litigation not only of issues that were actually litigated but also issues that could have been litigated. [Citation.]” (Citizens for Open Government, supra, 205 Cal.App.4th at p. 324, 140 Cal.Rptr.3d 459.)

“Causes of action are considered the same if based on the same primary right. [Citation.] A claim in the present proceeding is based on the same primary right if based on the same conditions and facts in existence when the original action was filed. [Citation.] Even if petitioner's challenge is not based on the same conditions and facts, those different conditions and facts must be ‘material.’ [Citation.]” (Citizens for Open Government, supra, 205 Cal.App.4th at p. 325, 140 Cal.Rptr.3d 459.)

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Ione Valley Land, Air, & Water Def. All., LLC v. Cnty. of Amador, 33 Cal. App. 5th 165, 171 (2019).

The Court finds that Plaintiffs’ claims articulated in the Complaint are the same claims that were asserted by this Plaintiff against the same parties or parties in privity with those partes, regarding the same loan and foreclosure that was at issue in the 2024 Federal Action and the 2025 Federal Action. Plaintiffs’ claims were considered in those proceedings on their merits and were rejected.

The U.S. District Court’s Findings and Recommendations in 2:24-cv-1416, dated February 19, 2025, considered Plaintiff’s standing at length, and concluded that, as a stranger to the loan, Plaintiff lacked standing to contest the to contest the validity of the loan or the foreclosure proceedings. RJN No.

37. Based on those Findings and Recommendations the Court dismissed Plaintiff’s claims on those issues with prejudice. RJN No.

43.

In a November 19, 2025, Memorandum Regarding Objection to Proof of Claim No. 1, Motion to Confirm Plan, ECF No. 187, and Trustee’s Motion to Dismiss Case (Complaint, Exhibit A) the bankruptcy court agreed to dismiss BNYM’s claim in bankruptcy without prejudice so that foreclosure could proceed, and included in that Memorandum the finding that “the debtor has attempted to . . . litigate the validity of the deed of trust. Twice. And in each instance, he was found to lack standing. Findings and Recommendations 2:12, Wilkinson v. PHH Mortgage Corporation, No. 2:24-cv-1416 (E.D. Cal. February 20, 2025), adopted by Order, ECF No. 31; Mem., Wilkinson v. PHH Mortgage Corporation, No. 25-2061 (Bankr. E.D. Cal.2025), ECF No. 126.”

In addition to the issue of Plaintiffs’ standing to contest the validity of the loan and of the foreclosure, Defendants also demur to Plaintiffs’ Second and Third causes of action asserting constitutional violations on the grounds that Defendants are not state actors, and as such, are not subject to claims under 42 U.S.C. 1983 because they are not acting “under color of state law.” “California's nonjudicial foreclosure procedure does not constitute state action and is therefore immune from the procedural due process requirements of the federal Constitution.” Garfinkle v. Superior Court, 21 Cal.3d 268, 281, (1978).” Altman v. PNC Mortg., 850 F. Supp. 2d 1057, 1080 (E.D. Cal. 2012).

As to the Fourth cause of action for Quiet Title, Defendants assert that the cause of action fails as a matter of law because Plaintiff did not tender or offer to tender the outstanding loan balance as required to maintain a quiet title action with respect to a mortgaged property:

To quiet title to the Property encumbered by a mortgage loan, the plaintiff must allege that he/she tendered the amount of outstanding debt to the lender. Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 8; Sipe v. McKenna (1948) 88 Cal.App.2d 100,1 1006. The rules governing tender “are strict and are strictly applied.” Nguyen,

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supra, at 439. Nothing short of the full amount due is sufficient to constitute a valid tender. Gaffney v. Downey Savings & Loan Assn. (1988) 200 Cal.App.3d 1154, 1165. Tender must be (1) valid, (2) made in good faith, (3) unconditional, (4) made with intent to extinguish the obligation, and the party making the tender must have had the ability to perform. Civ. Code §§1485, 1486, 1494.

The Complaint does not allege that Plaintiff tendered or offered to tender the loan balance.

Plaintiffs’ Fifth and Sixth causes of action relate to the Trustees Deed of Sale that issued in violation of the bankruptcy stay, citing Civil Code § 3412, which provides:

A written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.

The instrument in question has already been rescinded, returning “the priority and existence of all title and lien holders to the status quo-ante as existed prior to the trustee’s sale.” RJN No.

41. Accordingly, Civil Code § 3412 has no application to the current status of the title to the real property and the Fifth and Sixth causes of action of the Complaint are moot.

Finally, Plaintiff’s Seventh cause of action for violation of the Fair Debt Collection Practices Act because Plaintiff does not qualify as a debtor under that statute, and accordingly lacks standing to assert any rights as a debtor under that statute. Further, Defendants note that non-judicial foreclosure, which involves selling the security for the loan, not collecting money from the borrower, does not come within the Fair Debt Collection Practices Act. (“[T]he ‘activity of foreclosing on [a] property pursuant to a deed of trust is not the collection of a debt within the meaning of the FDCPA.’ Hulse v.

Ocwen Fed. Bank, FSB, 195 F.Supp.2d 1188, 1204 (D.Or.2002); see also Williams v. Countrywide Home Loans, Inc., 504 F.Supp.2d 176, 190 (S.D.Tex.2007) (“Mortgage companies collecting debts are not ‘debt collectors').” Ines v. Countrywide Home Loans, Inc., No. 08CV1267WQH(NLS), 2008 WL 4791863, at *2 (S.D. Cal. Nov. 3, 2008). TENTATIVE RULING #5: DEFENDANTS’ DEMURRER IS SUSTAINED WITHOUT LEAVE TO AMEND. NO HEARING ON THIS MATTER WILL BE HELD UNLESS A REQUEST FOR ORAL ARGUMENT IS TRANSMITTED ELECTRONICALLY THROUGH THE COURT’S WEBSITE OR BY TELEPHONE TO THE COURT AT (530) 621-6551 BY 4:00 P.M.

ON THE DAY THE TENTATIVE RULING IS ISSUED. CAL. RULE CT. 3.1308; LOCAL RULE 8.05.07; SEE ALSO LEWIS V. SUPERIOR COURT, 19 CAL.4TH 1232, 1247 (1999). NOTICE TO ALL PARTIES OF A REQUEST FOR ORAL ARGUMENT AND THE GROUNDS UPON WHICH ARGUMENT IS BEING REQUESTED MUST BE MADE BY TELEPHONE OR IN PERSON BY

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4:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED. CAL. RULE CT. 3.1308; EL DORADO COUNTY LOCAL RULE 8.05.07. PROOF OF SERVICE OF SAID NOTICE MUST BE FILED PRIOR TO OR AT THE HEARING. LONG CAUSE HEARINGS MUST BE REQUESTED BY 4:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED AND THE PARTIES ARE TO PROVIDE THE COURT WITH THREE MUTUALLY AGREEABLE DATES ON FRIDAY AFTERNOONS AT 2:30 P.M. LONG CAUSE ORAL ARGUMENT REQUESTS WILL BE SET FOR HEARING ON ONE OF THE THREE MUTUALLY AGREEABLE DATES ON FRIDAY AFTERNOONS AT 2:30 P.M. THE COURT WILL ADVISE THE PARTIES OF THE LONG CAUSE HEARING DATE AND TIME BY 5:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED. PARTIES MAY PERSONALLY APPEAR AT THE HEARING.

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