BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al.

23CV000213: BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al. 04/11/2024 Hearing on Motion to Compel Payment of Rent by Plaintiff in Department 54

Tentative Ruling

Defendants SN Servicing Corporation (“SN Servicing”) and US Bank Trust National Association as Trustee of the Bungalow Series IV Trust’s (“US Bank”) (collectively, “Defendants”) motion to compel Plaintiff Omar Bermudez (“Plaintiff”) to pay rent is ruled upon as follows.

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 advise him/her 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 counsel prior to the hearing, moving counsel is ordered to appear at the hearing by Zoom or in person.

Defendants’ unopposed request for judicial notice is granted.

Background

This is a consolidated action involving certain real property located at 864 Oak Lane, Rio Linda, California 95673 (“the Property”). Plaintiff obtained a mortgage loan of $360,000 against the property in 2007. Plaintiff defaulted on the loan on or around March 20, 2009. On September 1, 2011, a Notice of Trustee’s Sale was recorded against the property. This was followed by the Property being transferred several times between Plaintiff and various other individuals through trusts with Plaintiff and those individuals as trustees or sometimes with the individuals as coowners independent of any trust.

Each transfer began a chain of bankruptcy filings by Plaintiff and his co-owners, with a total of 18 filings by Plaintiff and the other owners between 2012 and 2022. Plaintiff also filed two separate lawsuits against SN Servicing in 2022 that were consolidated before Plaintiff dismissed the entire action without prejudice on May 5, 2023. Defendants contend that Plaintiff’s tactics have delayed their ability to collect on their security interest for almost 15 years.

US Bank purchased the Property at a foreclosure sale on November 4, 2022 and recorded a Trustee’s Deed upon Sale on December 23, 2022. US Bank then served Plaintiff with a Three- Day Notice to Quit pursuant to Code of Civil Procedure section 1161a(b)(3), but Plaintiff has refused to vacate the property. On February 3, 2023, US Bank filed an unlawful detainer action (“UD Action”). Plaintiff filed his answer to the UD Action on May 1, 2023. On April 21, 2023, Plaintiff filed a Complaint in this action.

The operative First Amended Complaint (“FAC”) was filed on September 21, 2023. Following Defendants’ successful demurrer to the FAC, the remaining causes of action are (1) violation of Civil Code section 2923.7; (2) violation of Business and Professions Code section 17200; and (3) wrongful foreclosure. Plaintiff alleges that he was offered a Trial Payment Plan by SN Servicing prior to the foreclosure but that Plaintiff’s time to remit a good faith payment expired by the time he received the offer in the mail.

Plaintiff

23CV000213: BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al. 04/11/2024 Hearing on Motion to Compel Payment of Rent by Plaintiff in Department 54

further alleges that SN Servicing thereafter “refused to work with Plaintiff to reinstate the Trial Payment Plan.” (FAC, ¶ 1.)

On October 5, 2023, Plaintiff filed a motion to consolidate this action with the UD Action. On November 3, 2023, the Court granted the motion. In its ruling, the Court noted:

“In order to extend trial in an unlawful detainer action beyond the 20-day period set forth in Code of Civil Procedure section 1170.5(a), it is necessary to follow the procedures set forth in Code of Civil Procedure section 1170.5(c). That section provides that if the court finds that there is a reasonable probability that the unlawful detainer plaintiff will prevail in the case, the court must determine the amount of damages the unlawful detainer plaintiff would suffer as a result of the extension and order the unlawful defendant to pay that sum into the court each month until conclusion of the action.

In lieu of a separate hearing on the Section 1170.5 issues, the parties are encouraged to confer with each other in order to seek a stipulation as to the proper amount of damages, if any, to be paid into court each month by the unlawful detainer defendant. If the parties reach a stipulation, they can submit it to the court in writing for approval obviating the need for a further hearing on Section 1170.5.”

(11/03/2023 Minute Order, pp. 2-3.)

The parties indicate that they conferred on a rent payment amount and Plaintiff offered $500 per month. It is not clear how much Defendants offered, only that they would not accept $500, as they contend that amount is significantly below market value. Defendants contend that the rental value of the property is $1,924.73 per month and thus request that amount via this motion. Defendants alternatively request that Plaintiff be ordered to make the total payments under the Trial Payment Plan attached to the FAC, as Defendants contend Plaintiff’s allegations indicate a willingness to accept the Trial Payment Plan. The Trial Payment Plan required eight total payments between December 31, 2021 and July 1, 2022, the first two being $2,948.17 and the remaining six being $1,924.73, for a total of $17,444.72. Plaintiff contends that any payment should be limited to $500 per month.

Discussion

Code of Civil Procedure section 1170.5(a) states that if a defendant appears in an unlawful detainer action, “trial of the proceeding shall be held not later than the 20th day following the date that the request to set the time of the trial is made.” (Code Civ. Proc. § 1170.5(a).) Code of Civil Procedure section 1170.5(c) states:

“If trial is not held within the time specified in this section, the court, upon finding that there is a

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000213: BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al. 04/11/2024 Hearing on Motion to Compel Payment of Rent by Plaintiff in Department 54

reasonable probability that the plaintiff will prevail in the action, shall determine the amount of damages, if any, to be suffered by the plaintiff by reason of the extension, and shall issue an order requiring the defendant to pay that amount into court as the rent would have otherwise become due and payable or into an escrow designated by the court for so long as the defendant remains in possession pending the termination of the action.

The determination of the amount of the payment shall be based on the plaintiff’s verified statement of the contract rent for rental payment, any verified objection thereto filed by the defendant, and the oral or demonstrative evidence presented at the hearing. The court’s determination of the amount of damages shall include consideration of any evidence, presented by the parties, embracing the issue of diminution of value or any set off permitted by law.”

Here, Defendants contend that it is reasonable probable they will prevail in the UD Action because US Bank acquired the Property through a properly recorded a noticed foreclosure sale, duly recorded the Trustee’s Deed upon Sale, and properly served the Three-Day Notice to Quit on all occupants of the Property. Further, Defendants note that Plaintiff remains in possession of the property. Plaintiff’s opposition does not address the merits of the UD Action.

To support their claim that the market rental value of the Property is $1,924.73, Defendants’ counsel submits a print out of the Redfin.com page for the Property. (Luu Decl., Exh. A.) The document indicates that the information contained therein is current as of January 27, 2024. (See Exh. A, p. 2.) Although Defendants’ motion and their counsel’s declaration indicates that the estimated rental value according to Redfin is $1,924.73 per month, the document submitted actually provides an estimate of $1,952 per month. (Exh. A, p. 4.)

To support his claim that the rental value is $500 per month, Plaintiff submits a declaration from Noel Fajardo, “a real estate professional employed by Johnson & Associates Real Estate.” (Fajardo Decl., ¶ 1.) Mr. Fajardo indicates that he used Rentometer Pro, a software utilized in the real estate industry to evaluate rental values, but he does not state the estimate provided by Rentometer Pro. Instead, Mr. Fajardo states that the “rental market date from Rentometer does not reflect the condition of the inside and exterior of the subject property, so therefore the market rental value must be adjusted based on the livable condition of the property.” (Fajardo Decl., ¶ 6.)

Mr. Fajardo then provides various details of the Property, noting that it’s a 980 square-foot home built in 1935, has no working air conditioner or heating unit other than a small window unit, has evidence of water damage in the ceiling in the kitchen, has additional rooms that may not be permitted, needs a new roof as well as new or repaired exterior sidings and facias, needs the stairs on the side of the house replaced or repaired, has debris and abandoned vehicles in the back and side yard, has nonpermitted structures in front of and on the side of the home, and is overgrown with weeds. (Fajardo Decl., ¶ 7.)

Given this condition of the property, Mr. Fajardo opines that “the best case scenario is that the subject property would rent for $500.00 per month.” (Fajardo Decl., ¶ 8.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000213: BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al. 04/11/2024 Hearing on Motion to Compel Payment of Rent by Plaintiff in Department 54

Defendants’ motion confirms the conditions described in Mr. Fajardo’s declaration via a declaration from John Brophy, a licensed realtor who is currently the REO agent for US Bank for the Property. (Brophy Decl., ¶ 2.) Mr. Brophy declares that County officials have notified him of various code violations on the Property and that he has personally verified them. (Brophy Decl., ¶ 3.) Mr. Brophy further declares that one ongoing violation is due to the illegal sale of vehicles at the Property, with the inventory being held at the Property and being concealed by an unpermitted corrugated metal structure. (Brophy Decl., ¶ 4.) Mr. Brophy further declares that this neglect of the Property and the ongoing code violations are “causing a detrimental impact on the market value of the Property, a situation that must be rectified with urgency.” (Brophy Decl., ¶ 5.)

Here, the Court finds Defendants have a reasonable probability of prevailing in the UD Action, given that Plaintiff’s opposition does not rebut Defendants’ showing or even address the issue. In considering the evidence of the rental value of the Property submitted by both parties, the Court finds Plaintiff’s evidence more persuasive, particularly given the acknowledgement from Mr. Brophy that the market value of the Property is being diminished by the activities on the Property. Defendants do not submit any other evidence to establish “the amount of damages, if any, to be suffered by reason of the extension” of the trial date. (Code Civ. Proc. § 1170.5(c).)

Accordingly, although Defendants’ motion for an order of payment of rent is GRANTED, the Court orders Plaintiff to pay $500 per month. Defendants request that the payments be made as “monthly deposits to the Clerk of the Court, .” (Defendants’ MPA, p. 13:14.) Accordingly, Plaintiff is ordered to deposit $500 every month with the Clerk beginning on April 15, 2024 and every month thereafter until the UD Action is terminated.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. § 1019.5; Cal. Rules of Court, rule 3.1312.)

NOTICE:

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Law and Motion Oral Argument Request Line at (916) 874-2615 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

23CV000213: BERMUDEZ vs SN SERVICING CORPORATION, A BUSINESS ENTITY, et al. 04/11/2024 Hearing on Motion to Compel Payment of Rent by Plaintiff in Department 54

opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below. If no request for oral argument is made, the tentative ruling becomes the final order of the Court.

Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings. The Department 53/54 Zoom Link is https://saccourt-cagov.zoomgov.com/my/sscdept53.54 and the Zoom Meeting ID is 161 4650 6749. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.pdf.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with 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 forward the form to the Court Reporter’s Office and an official reporter will be provided.