MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

Tentative Ruling

NOTICE:

PLEASE TAKE NOTICE that pursuant to “Public Notice – Civil Division Expansion of Law and Motion Calendar” any oral arguments regarding this tentative ruling will be heard in Department 31, located at 720 9th Street, Sacramento, CA, the Hon. Steven M. Gevercer presiding, at 10:00 a.m. Should argument be requested by either party, the requesting party must call the Law and Motion Oral Argument Request Line at (916) 874-2615, request the hearing, and notify the opposing party of the location and time of hearing pursuant to Local Rule 1.06.

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23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING:

The demurrer of Defendants Selene Finance, LP; U.S. Bank Trust National Association, in its capacity as Trustee two trusts (collectively “Defendants”) to complaint filed by pro per Plaintiff Roddie McElhaney (“Plaintiff”) is ruled on as follows.

This action arises from a dispute concerning real property owned by Plaintiff. The complaint alleges that in 2013, Ocwen Loan Servicing (“Ocwen”) attempted to foreclose the property based on fabricated documents. (Complaint, ¶¶ 9-13.) The complaint alleges Defendants and Prestige Trustee are now attempting to foreclose on the property again using the same fabricated documents. (Complaint, ¶ 14.) The complaint asserts causes of action for lack of standing to foreclose, statute of limitations, violation of Civil Code § 2924, and quiet title. Defendants demur to each cause of action on grounds the allegations lack facts upon which relief may be granted. Plaintiff opposes the demurrer.

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.) A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against demurrer.' (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38-39; Bagatti v. Dept. of Rehabilitation (2002) 97 Cal.App.4th 344, 352.)

For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ.Proc. § 452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v.

Kirwan 1985) 39 Cal.3d 311, 318 (Blank); Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.) The Court treats as true not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged. (Amarel v. Connell, supra, 202 Cal.App.3d at p. 141.) “A court will not consider facts which have not been alleged in the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

complaint unless they may be reasonably inferred from the matters which have been pled or are proper subjects of judicial notice.” (Hall v. Great Western Bank (1991) 231 Cal.App.3d 713, 722, n. 7 [282 Cal.Rptr. 640].) Rather, “facts not alleged are presumed not to exist.” (Schick v. Lerner (1987) 193 Cal.App.3d 1321, 1327 [238 Cal.Rptr. 902].) Extrinsic evidence may not properly be considered on demurrer. (Ion Equipment Corp. v. Nelson (1980) 110 Cal. App. 3d 868, 881; Hibernia Savings & Loan Soc. v.

Thornton (1897) 117 C. 481, 482.) A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice. (Blank, supra, 39 Cal. 3d at 318; William S. Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal.App.3d 1612, 1616, fn.2.) The Court is to give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Blank, supra, 39 Cal.3d at p. 318)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v.

Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733, citation omitted.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action - not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

“A special demurrer for uncertainty is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (People v. Lim (1941) 18 Cal.2d 872, 883.) “Such a demurrer should not be sustained where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet.” (Ibid.) “Uncertainty arising out of the legal effect of facts alleged is not a ground for demurrer.” (James v.

Herbert (1957) 149 Cal.App.2d 741, 750.) A demurrer for uncertainty does not lie as to immaterial matters or facts that are presumptively within the knowledge of the demurring parties. (Dumm v. Pacific Valves (1956) 146 Cal.App.2d 792, 799.) A special demurrer must be disregarded where it fails to specify the particular allegations or defects giving rise to the demurrer. (Taliaferro v. Salyer (1958) 162 Cal.App.2d 685, 688.)

Analysis

Entire Complaint

Defendant demurs to the entire complaint on grounds that a “cursory review of the Complaint confirms that it is comprised almost exclusively of Plaintiff’s own unfounded conclusions.”

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

(Memorandum, p,. 7:8-9.) Defendant also conclusively asserts that Plaintiff has failed “to present any worthwhile facts in support of such conclusions.” (Id., p. 7:1-12.) These arguments are insufficient to support a demurrer. A demurrer must be based on more than a “cursory review” of a pleading as a “cursory review” may be insufficient to identify all pertinent factual allegations. Nor can a demurrer be properly based on a contention that the factual allegations are not “worthwhile,” because, at the demurrer stage, the Court presumes the plaintiff will be able to prove the truth of the facts alleged.

Defendant also argues Plaintiff’s claims are barred by catch-all 4 year statute of limitations set forth in Code of Civil Procedure § 343 because Plaintiff’s claims are based on contentions that a 2013 assignment is invalid and that payments tendered in 2013 were misapplied. Generally, the statutes of limitations begins to run when a cause of action accrues. (Fox v. Ethicon Endo- Surgery, Inc. (2005) 35 Cal.4th 797, 806.) Here, the claims in the FAC are based on Defendant’s alleged efforts to wrongfully foreclose on the subject property. Defendant has failed to provide sufficient analysis to demonstrate Plaintiff’s causes of action accrued in 2013, before Defendants commenced foreclosure proceedings. Thus, Defendants have failed to meet their burden on demurrer.

The demurrer to the entire complaint on this grounds is overruled.

First Cause of Action

Plaintiff’s first cause of action, entitled “No Standing to Enforce,” appears to assert that Defendants are attempting to wrongfully foreclose on the property because they lack standing to assert the power of sale clause in the mortgage secured by the subject property. Defendants demur to this cause of action on grounds Plaintiff lacks standing to challenge the loan assignment.

A wrongful foreclosure plaintiff has standing to challenge an assignment of a note and deed of trust where the assignment is void, but not where it is merely voidable. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939-940.)

Relying on Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256 (disapproved to the extent it states a plaintiff lacks standing to challenge a foreclosure based on a void assignment by Yvanova, supra, 62 Cal.4th 919, 939, fn. 13), Defendants argue Plaintiff cannot prevail on an argument the assignment was void merely by challenging the recorded documents. Rather, Defendant argues Plaintiff must show they did not receive a valid assignment of the debt in any manner. (Fontentot, supra, 198 Cal.App.4th at pp. 271-272.)

The Court is not persuaded that Plaintiff’s claim is based solely on defects in the recorded documents. The complaint alleges that as of 5/20/2013 there was no record of an assignment from New Century Mortgage to U.S. Bank National in Ocwen’s records. (FAC, ¶ 15.) Plaintiff

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

alleges Ocwen then proceeded to fabricate an assignment by recording documents containing forged signatures and that reference a power of attorney that does not actually exist and that at the time this occurred, New Century Mortgage had been bankrupt and closed for six years. (FAC, ¶ 15.) Further, the complaint alleges that Ocwen mistakenly started foreclosure proceedings on another individual’s loan but using plaintiff’s previous loan number. (FAC, ¶ 19.) Defendant fails to explain why these allegations, when construed liberally and in favor of Plaintiff, are insufficient to attack not only the record of assignment but also to allege that the fabricated documents were created for the purpose of attempting to conceal that no actual assignment of the underlying debt ever took place. Defendant has therefore failed to meet its burden on demurrer as to this cause of action.

Moreover, the Court notes that the allegedly non-existent and forged assignment is not the only basis for Plaintiff’s claim that Defendants lack standing to foreclose. Plaintiff also alleges that she was not behind on payments, made extra payments toward the principal for several years, and that the “subject loan was closed in April 18, 2022” and refers to the loan as a “zombie mortgage.” (FAC, ¶¶ 11, 25, 26.) Defendants have failed to explain why these allegations are insufficient to support a contention that the loan has been satisfied and that Defendants therefore lack standing to wrongfully foreclose because any power of sale they received by assignment has been extinguished.

The demurrer as to the first cause of action is overruled.

Second Cause of Action

Plaintiff’s second cause of action is entitled “State of Limitations” and contends the deadline to foreclose under Civil Code section 882.020 has expired because Ocwen accelerated the loan in March of 2013. (FAC, ¶¶ 28-30.)

Defendant argues that a statute of limitations is an affirmative defense, not a recognizable cause of action. However, as noted above, it is clear that the nature of the cause of action is one for wrongful foreclosure based on the expiration of the deadline to foreclose under Civil Code section 882.020. Plaintiff’s inaccurate description of this deadline as a statute of limitations does not defeat Plaintiff’s claim that the foreclosure fails to comply with statutory timelines.

Defendant also argues the cause of action is defective on its face. Civil Code section 882.020 provides, in pertinent part, that where the final maturity date or last date fixed for payment of the debt or performance of the obligation is ascertainable from the record of indebtedness, a lien expires 10 years after that date. Defendants argue the last fixed date for payment is ascertainable from the Deed of Trust as June 1, 2033. (See RJN, Exh. 1.) However, Defendants ignore the allegation in the complaint that the last fixed date for payment was changed to March of 2013 when the loan was accelerated (FAC, ¶ 29) and have failed to present any legal authority or analysis that the last fixed date for payment within the meaning of section 882.020 cannot be

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

changed through the exercise of an acceleration clause. Accordingly, Defendants have failed to meet their burden on demurrer to show the facts alleged do not constitute a cause of action. The

The demurrer as to the second cause of action is overruled.

Third Cause of Action

Defendant demurs to the third cause of action on grounds it is based on the same allegations that give rise to the other causes of action and is defective for the same reasons. For the reasons set forth above, the Court overrules the demurer to the first and second cause of action. This is sufficient grounds for overruling the demurrer to the third cause of action.

Fourth Cause of Action

Plaintiff’s fourth cause of action seeks to quiet title to the property.

Defendant demurs to this cause of action on grounds it is barred by the statute of limitations. Again, however, Defendant fails to present any legal authority as to when a cause of action to quiet title accrues or any analysis as to when Plaintiff’s cause of action accrued. Notably, Plaintiff alleges the “subject loan was closed in April 18, 2022.” (FAC, ¶ 25.) Defendant offers no explanation as to why Plaintiffs’ cause of action necessarily accrued before the subject loan was closed. Defendant has therefore failed to meet its burden.

Defendant also argues the complaint fails to state facts sufficient to constitute a cause of action because the complaint does not allege Plaintiff discharged the debt. However, the Court notes the complaint alleges Plaintiff was not behind on payments, made extra payments, disputes the existence of any current debt, and that the loan was closed on April 18, 2022. (FAC, ¶¶ 11, 23, and 25.) Defendant fails to explain why these factual allegations are insufficient to support a reasonable inference that debt was discharged. Thus, Defendant has failed to meet its burden.

The demurrer to the fourth cause of action is overruled.

Disposition

The demurrer is overruled in its entirety. Defendant shall file an answer no later than February 12, 2024.

The notice of motion does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06. Moving counsel is directed to contact opposing counsel and/or selfrepresented litigants and advise them of Local Rule 1.06 and the Court’s tentative ruling procedure and the manner to request a hearing. If moving counsel is unable to contact opposing parties prior to hearing, moving counsel is ordered to appear at the hearing by Zoom or by

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV009343: MCELHANEY vs U.S. BANK NATIONAL ASSOCIATION 02/02/2024 Hearing on Demurrer in Department 54

telephone.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.