Vladimir Privalov v. Villa Zinfandel LLC et al

DEMURRER TO PLAINTIFF’S COMPLAINT

TENTATIVE RULING: The Demurrer is SUSTAINED. Plaintiff is granted 10 days’ leave from notice of entry of order to amend. (See Rules of Court, rule 3.1320(g).) Defendant is directed to provide notice of entry of order.

The moving party failed to include in the notice of this motion proper notice of the Court’s tentative ruling system as required by Local Rule 2.9. Moving party is directed to immediately provide, by telephone call AND email, the missing notice to opposing party/ies forthwith. The requirements for requesting oral argument under Local Rule 2.9 remain in effect. However, the Court may grant belated requests for oral argument or continuance of hearing, made by any party who represents it did not timely receive the required notice, regardless of whether or not moving party is present at the hearing.

A. PROCEDURAL MATTER

Defendant 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 2005-9, Mortgage Pass Through Certificates, series 2005-9 (“Defendant”) demurs, pursuant to Code of Civil Procedure section 430.10, subdivision (e), 2 to Plaintiff Vladimir Privalov’s (“Plaintiff”) Complaint, filed May 27, 2026.

Defendant’s Request for Judicial Notice of recorded documents (Exhibits A-P) and court records (Exhibit Q) is GRANTED, but not for the truth of any disputed factual matter asserted therein. (Villa Zinfandel, LLC v. Bearman (2025) 116 Cal.App.5th 848, 858 [“While courts cannot take judicial notice of factual representations in recorded documents, “a court may take judicial notice of ... a document’s recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.”].)

The Complaint asserts five causes of action as follows: First Cause of Action for Wrongful Foreclosure, Second Cause of Action for Cancellation of Instruments, Third Cause of Action for Quiet Title, Fourth Cause of Action for Judicial Foreclosure of Judgment Lien, and Fifth Cause of Action for Declaratory Relief.

B. LEGAL STANDARD

A complaint must contain “facts constituting the cause of action.” (§ 425.10, subd. (a)(1).) The party against whom a complaint has been filed may object, by demurrer, on the grounds that “[t]he pleading does not state facts sufficient to constitute a cause of action.” (§ 430.10, subds. (e).)

A demurrer is treated as “admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court must “construe the allegations of a complaint liberally in favor of the pleader.” (Skopp v. Weaver (1976) 16 Cal.3d 432, 438.) The Court must also accept as true facts that may be inferred from those expressly alleged. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1405.) The Court may also consider as grounds for a demurrer any matter that is judicially noticeable under Evidence Code sections 451 or 452. (Code. Civ. Proc., § 430.30, subd. (a).) 2 All subsequent statutory references are to the Code of Civil Procedure unless otherwise specified.

Because “[a] demurrer tests only the legal sufficiency of the pleading . . . the question of plaintiff’s ability to prove the [] allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Comm. on Children’s Television, Inc. v. Gen. Foods Corp. (1983) 35 Cal.3d 197, 213-14.)

C. DISCUSSION

1. First Cause of Action

Defendant argues that the First Cause of Action fails because Plaintiff has not alleged facts satisfying each element for a claim for wrongful foreclosure.

To state a claim for wrongful foreclosure, a plaintiff must plead that (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering. (Sciarratta v. U.S. Bank Nat’l Assn. (2016) 247 Cal.App.4th 552, 561-62.)

As to the first element, Defendant implicitly argues that the Complaint’s theory for an illegal, fraudulent, or willfully oppressive sale is that the trustee failed to give notice of the sale to Plaintiff. (Mem., 10:15-17.) Defendant argues that such theory fails because a trustee is not required to notify a judgment lienholder of a sale absent a request for special notice, and the face of the Complaint shows that Plaintiff could not have properly requested special notice. (Mem., 9:15-10:16.)

Plaintiff does not dispute this in Opposition. Rather, Plaintiff argues that the Complaint pleads another theory satisfying the first element, specifically, that the sale was not properly noticed in general because “the sole recorded and published Notice of Sale [(recorded on September 23, 2021)] set the sale for October 20, 2021; ... the noticed sale did not occur; and ... the trustee then conducted the operative sale on a later date [(on or about November 19, 2021)] without recording or publishing any new notice as the statutes require.” (Opp., 3:15-22, 5:21-24, citing Civ. Code, §§ 2924f, 2924g.)

Plaintiff fails to cite to where in his Complaint he contends this theory is pled. While the Court does not find such theory clearly pled in the Complaint, Defendant seems to acknowledge its existence. (Reply, 5:20-22.) Defendant argues, however, that there is no requirement for the service, publishing, or recording of a new notice of sale when a postponement of not more than 365 days from the noticed sale is made. (Reply, 5:22-25, citing Civ. Code, § 2924g, subd. (c)(1).) Thus, Defendant argues that Plaintiff still has not alleged an illegal, fraudulent, or willfully oppressive sale of real property under the theory advanced in Opposition.

Civil Code section 2924g provides that notice of each postponement of the sale proceedings and the reason therefor “shall be given by public declaration by the trustee at the time and place last appointed for sale. A public declaration of postponement shall also set forth

the new date, time, and place of sale and the place of sale shall be the same place as originally fixed by the trustee for the sale. No other notice of postponement need be given.... The trustee shall maintain records of each postponement and the reason therefor.” (Civ. Code, § 2924g, subd. (d)(1).) However, “[i]n the event that the sale proceedings are postponed for a period or periods totaling more than 365 days, the scheduling of any further sale proceedings shall be preceded by giving a new notice of sale in the manner prescribed in Section 2924f [requiring, in part, publication in a newspaper and recordation with the county recorder].” (Id., § 2924g, subd. (c)(2).)

Thus, contrary to Plaintiff’s assertion, the statute does not require the trustee to record or publish new notice for the postponed November 21, 2021 sale that had been originally noticed for October 20, 2021. Plaintiff’s theory that the trustee caused an illegal, fraudulent, or willfully oppressive sale because the trustee failed to record or publish new notice once the noticed October 20, 2021 sale was postponed to November 21, 2021 therefore fails.

Based on the foregoing, the Complaint fails to state facts sufficient to constitute the first element for the First Cause of Action for Wrongful Foreclosure. As a result, the demurrer to the First Cause of Action is SUSTAINED.

Although the above ruling renders it unnecessary for the Court to consider Defendant’s additional arguments on demurrer to the First Cause of Action, the Court elects to consider them in the interest of efficiency.

As to the second element, Defendant argues that Plaintiff cannot allege prejudice because it is undisputed that there was no surplus equity in the property such that Plaintiff would have recovered anything from his junior lien interest, and that other liens, senior to Plaintiff’s lien, were about to foreclose. (Mem., 10:18-11:2; Reply, 6:1-4.) Plaintiff argues that the Complaint alleges the opposite; that there was sufficient equity in the property to reimburse Plaintiff’s lien, and further argues that the question of whether or not equity in fact existed is a disputed fact. (Opp., 5:9-20.)

Plaintiff again fails to cite to the Complaint in support of what he contends it alleges. The Court has reviewed the Complaint and finds that it does not allege the facts that Defendant represents are “undisputed.” Rather, those purportedly undisputed facts raised by Defendant are matter outside the four corners of the Complaint and not subject to judicial notice.

Based on the foregoing, Defendant’s argument on demurrer as to the second element of the First Cause of Action is overruled.

As to the third element, Defendant argues that Plaintiff has not alleged tender, which Arnolds Mgmt. Corp. v. Eischen (1984) 158 Cal.App.3d 575, 580 expressly held is a required allegation even for a junior lienholder against a senior obligation. In Opposition, Plaintiff argues that the tender requirement is excused here because the sale is void and/or because requiring a judgment creditor to tender a senior lienholder’s debt, when the tender requirement is truly for debtors, is inequitable. Plaintiff attempts to distinguish Eischen by arguing that, there, the cause of action was based upon irregularities in the sale procedure; whereas, here, Plaintiff alleges that the sale is void.

Defendant does not dispute that the tender requirement may be excused where inequitable or where the sale is void. Defendant argues, however, that Plaintiff has failed to cite authority which specifically holds that tender is inequitable/not required for a junior lienholder. The Court agrees with Defendant that Plaintiff has failed to cite authority in support of his argument that tender is not required where inequitable, or that the circumstances here are distinguishable from those in Eischen.

Defendant next disputes that the sale is void, contending instead that, at most, it is voidable, based on the notice defects alleged in the Complaint. (Mem., 12:1-4.) Plaintiff argues that, whether the deed is void or voidable, presents a question that cannot be resolved on demurrer. The Court agrees that the question of whether a deed is void or voidable depends on several factors, including recitals in recorded documents, not appropriate for determination on a demurrer. (See Dimock v. Emerald Properties LLC (2000) 81 Cal.App.4th 868, 877; Little v. Cfs Serv. Corp. (1987) 188 Cal.App.3d 1354, 1358-59.) However, in light of the Court’s above finding that the Complaint fails to allege that the trustee caused an illegal, fraudulent, or willfully oppressive sale, no factual basis remains to support Plaintiff’s allegation that the sale is void or voidable.

Based on the foregoing, Defendant’s argument on demurrer as to the third element of the First Cause of Action is sustained.

2. Second Cause of Action

Defendant’s demurrer to the Second Cause of Action relies upon the same void/voidable and tender arguments Defendant advances in support of the First Cause of Action. (See Mem., 11:19-12:5.) Because the Court sustained those objections above, the demurrer to the Second Cause of Action is SUSTAINED.

3. Third and Fourth Causes of Action

As to the Third and Fourth Causes of Action, Defendant argues that they fail because both Plaintiff’s and Defendant’s claims to title were extinguished by the foreclosure sale and, without a claim to title, Plaintiff cannot maintain causes of action for Quiet Title or Judicial Foreclosure of Judgment Lien. (Mem., 12:15-13:16; Reply, 8:2-16, citing Outten v. Bank of New York Mellon, No. CV 13-4624, 2013 WL 6086899 (C.D. Cal. Nov. 18, 2013; Eng v. Dimon, No. 11-3173, 2012 WL 3649600 (N.D. Cal. Aug. 24, 212.) In general, “[a] senior foreclosure sale conveys the property free of all junior liens.... Thus, the junior no longer has a lien on the property, and the security has been entirely destroyed. A sold-out junior thus holds security that has ‘become valueless’ and is permitted to sue directly on the note.” (Bank of America v. Graves (1996) 51 Cal.App.4th 607, 611-12)

Plaintiff does not dispute the general rule of extinguishment of a junior lien resulting from a foreclosure sale. Plaintiff contends that this argument assumes the disputed fact underlying the action—that the foreclosure sale was valid in the first place. (Opp., 7:22-8:15.)

While Plaintiff’s argument might have merit, it necessarily relies upon the Complaint’s

allegation that the sale is void or invalid. However, the only basis therefor alleged in the Complaint is that asserted in support of the first element of the First Cause of Action, which, as noted, fails. Therefore, Plaintiff’s defense that neither Plaintiff’s nor Defendant’s claims to title extinguished because the foreclosure sale was void/invalid fails for lack of a basis therefor.

As such, the demurrer to the Third and Fourth Causes of Action is SUSTAINED.

4. Fifth Cause of Action

The demurrer to the Fifth Cause of Action is based on the fact that it is wholly derivative of the other causes of action. Because the other causes of action have all been sustained, the demurrer to the Fifth Causes of Action is also SUSTAINED.

5. Leave to Amend

Plaintiff is granted leave to amend. (Angie M. v. Super. Ct. (1995) 37 Cal.App.4th 1217, 1227 [“Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.”]; Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [“Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.”].)

13