Opinion
G055563
11-13-2019
ALFREDO ESCOBEDO, Plaintiff and Appellant, v. WELLS FARGO BANK, N.A., Defendant and Respondent.
Community Law Center, William P. Mullins and R. Spelger for Plaintiff and Appellant. Anglin Flewelling Rasmussen Campbell & Trytten and Robert A. Bailey for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2016-00850794) OPINION Appeal from a judgment of the Superior Court of Orange County, James Di Cesare, Judge. Affirmed. Community Law Center, William P. Mullins and R. Spelger for Plaintiff and Appellant. Anglin Flewelling Rasmussen Campbell & Trytten and Robert A. Bailey for Defendant and Respondent.
* * *
Plaintiff and Appellant Alfredo Escobedo (plaintiff) appeals from a judgment entered after the court sustained without leave to amend the demurrer of defendant and respondent Wells Bank, N.A. (defendant) to the third amended complaint (TAC), which arose out of plaintiff's default on a mortgage loan and defendant's subsequent foreclosure. The court ruled the TAC was barred by judicial estoppel arising out of plaintiff's failure to list claims against defendant in bankruptcy filings.
Although plaintiff named Wells Fargo Home Mortgage as a defendant, this is a division of defendant and we do not treat it as a separate party. The TAC also named Regional Service Corporation as a defendant. Plaintiff points to nothing in the record to show that entity was served, responded to the complaint, or otherwise participated in the lawsuit. His certificate of interested parties filed with his brief does not list that entity.
Plaintiff asserts judicial estoppel does not apply, and also the court abused its discretion by allowing defendant to demur to consecutive complaints on issues the court had already decided. We disagree and affirm
DEFICIENCIES IN PLAINTIFF'S BRIEFING
California Rules of Court, rule 8.204(a)(1)(C) requires a party to "[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears." (All further references to rules are to the California Rules of Court.) This rule applies to the entire brief, not just the statement of facts. (Conservatorship of Kevin A. (2015) 240 Cal.App.4th 1241, 1253.) Plaintiff violated this rule on multiple occasions. His briefs contain statements not supported by any citation to the record. Plus, many of the record references stated were incorrect.
It is not our responsibility to search the record for evidence supporting plaintiff's factual assertions and contentions. (City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 286.) These violations are all the more problematic given the length (2750-plus pages) of the appellant's appendix, made worse because of the number of irrelevant documents plaintiff included (rule 8.124(b)(3)(A) prohibits inclusion of documents "unnecessary for proper consideration of the issues") and the inability to find illegible page numbers for many of the documents due to the overprinting of the page numbers on text in the documents (see rule 8.144(b)(2)(D) requiring page numbering). These violations made our job much more complicated, difficult, and time consuming and were more egregious because the respondent's brief pointed them out and plaintiff took no action to correct them.
Based on these violations, we could dismiss the appeal or strike plaintiff's briefs. (Spangle v. Farmers Ins. Exchange (2008) 166 Cal.App.4th 560, 564, fn. 3.) We decline to do so but instead elect to disregard any factual claims and treat as forfeited any arguments not supported by accurate citations to the record. (Butte Fire Cases (2018) 24 Cal.App.5th 1150, 1169, fn. 10; Provost v. Regents of University of California (2011) 201 Cal.App.4th 1289, 1294.)
FACTS AND PROCEDURAL HISTORY
In January 2008 plaintiff obtained a $525,000 loan from Wachovia Mortgage, FSB (Wachovia), defendant's predecessor in interest, evidenced by a note and trust deed and secured by plaintiff's residence (Property). Less than 18 months later plaintiff defaulted by failing to make payments on the note. The trustee recorded a notice of default in December 2009.
In 2008 plaintiff filed suit against his mortgage broker and Wachovia (Robles v. Fast Track Lending, (Super. Ct. Orange County, 2008, No. 30-2008-00108293); Prior Action), setting out a variety of causes of action. He claimed, in essence, he was fraudulently induced to enter into the loan transaction and sought to rescind the transaction, quiet title, and recover damages.
In April 2010 plaintiff filed a chapter 13 bankruptcy (bankruptcy 1) to bar foreclosure on the Property. It was dismissed in July 2010. In August 2010 plaintiff filed another chapter 13 bankruptcy (bankruptcy 2), disclosing the Prior Action. He dismissed it in November 2013 on the eve of trial in the Prior Action.
After trial had commenced, the parties settled the Prior Action, putting the terms on the record (Settlement Agreement). In the Settlement Agreement, defendant agreed to suspend foreclosure for 120 days, through March 1, 2014, and plaintiff agreed defendant was not required to fulfill any of the notice and review requirements under the Homeowners Bill of Rights (former Civ. Code, § 2923.55 et seq.; HBOR). Plaintiff agreed that if he could not sell the Property or refinance the loan within the 120-day period, he would not take any action, including seeking an injunction or filing bankruptcy to interfere with defendant's foreclosure of the Property. The Prior Action was to be dismissed with prejudice. Plaintiff stated on the record he understood and agreed to the Settlement Agreement terms and would comply with them. The Settlement Agreement and the resulting dismissal were confirmed in a minute order.
At this point defendant had succeeded to Wachovia's interests. (Hannon v. Wells Fargo Bank, N.A. (N.D.Cal. Aug. 13, 2015) No. 14-CV-05381-LHK) [2015 WL 4776305, at p. *1, fn. 2] (Hannon).)
The HBOR became effective January 1, 2013, with many provisions sunsetting January 1, 2018. (Schmidt v. Citibank, N.A. (2018) 28 Cal.App.5th 1109, 1115, fn. 4.)
In March 2014 plaintiff filed his third chapter 13 bankruptcy (bankruptcy 3). The bankruptcy court issued a deficiency notice based on plaintiff's failure to file required notices, schedules, certifications, declarations, and statements as delineated, and ordered them filed within 14 days or bankruptcy 3 would be dismissed. Although plaintiff filed the required documents, on June 16 the court dismissed bankruptcy 3, prohibiting plaintiff from filing any new bankruptcy action for 180 days. The bankruptcy 3 schedules did not mention any actual or potential claims against defendant.
In May 2016, plaintiff filed this action, including claims for violations of Civil Code sections 2923.55 and 2923.6, part of the HBOR; violation of Business and Professions Code section 17200 (UCL); negligence; breach of contract; and breach of the covenant of good faith and fair dealing. He also obtained a temporary restraining order (TRO) to stop the foreclosure sale.
After a hearing, the court denied a preliminary injunction, finding that, pursuant to the Settlement Agreement, plaintiff waived both his rights under the HBOR and a right to seek an injunction to stop the foreclosure.
On August 31, 2016, the day before the then scheduled trustee sale and two weeks after the court denied the preliminary injunction, plaintiff filed a fourth chapter 13 bankruptcy petition (bankruptcy 4) without any accompanying schedules or statement of financial affairs. The bankruptcy court issued an order to show cause (OSC) ordering plaintiff and his lawyer to "appear and explain the skeletal petition" so the court could determine whether the action "should be dismissed as filed improperly" and to impose sanctions. The next month at the OSC hearing the court dismissed bankruptcy 4.
Defendant's demurrer to the original complaint in this action was sustained with leave to amend as to the HBOR and UCL causes of action on the grounds plaintiff had waived the HBOR claims in the Settlement Agreement and the UCL claim was based on the HBOR causes of action. It was overruled as to the other three causes of action in the original complaint.
Plaintiff then filed a first amended complaint (FAC), adding allegations as to why the Settlement Agreement should not bar the claims. Plaintiff also alleged defendant failed to keep tax payments current. Defendant demurred to the FAC, arguing judicial estoppel barred all the causes of action based on the filing of bankruptcy 4 because plaintiff failed to disclose his claims against defendant. Defendant also again challenged the HBOR and UCL claims.
In addition, it attacked the breach of contract and breach of covenant of good faith and fair dealing causes of action based on the new allegation about failure to make tax payments. Finally, defendant demurred to the negligence claim based on a new allegation in that cause of action.
While acknowledging judicial estoppel applied, the court nevertheless overruled the demurrer to the FAC without prejudice on that ground because the bankruptcy documents defendant had submitted in support of the demurrer were not certified copies. It also sustained with leave to amend the demurrer to one of the HBOR causes of action in the FAC.
In the meantime, plaintiff applied ex parte for a TRO to stop the trustee's sale. After the court denied the request, the Property was sold at foreclosure.
At about the same time plaintiff filed the second amended complaint (SAC), to which defendant demurred, providing certified copies of the bankruptcy documents. Defendant also filed an alternative nonstatutory motion for judgment on the pleadings.
The court sustained the demurrer with leave to amend all causes of action in the SAC, finding plaintiff had not included those claims on his bankruptcy schedule or statement of financial affairs as required, judicially estopping him from pursuing the claims in this action. It found the demurrer to the causes of action on other grounds in the SAC and the motion for judgment on the pleadings moot.
Plaintiff then filed the TAC. It contained a new allegation that bankruptcy 3 had been filed to stay the foreclosure. The TAC also alleged plaintiff had disclosed the "pending predatory lending lawsuit" in bankruptcy 3. Defendant again demurred on judicial estoppel grounds based on plaintiff's failure to schedule his claims against defendant in bankruptcy 4. Defendant argued judicial estoppel also applied based on bankruptcy 3 because many of the claims alleged in the TAC existed at the time bankruptcy 3 was filed and plaintiff did not list them on those bankruptcy schedules either. Plus, the predatory lending lawsuit alleged was the Prior Action.
The court sustained the demurrer to the TAC without leave to amend because plaintiff again failed to allege facts showing he had included the claims against defendant on his bankruptcy schedules in bankruptcy 3 and bankruptcy 4.
DISCUSSION
1. Principles of Appellate Review and Standard of Review
"[I]t is a fundamental principle of appellate procedure that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment." (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609.)
We review a judgment after order sustaining a demurrer without leave to amend de novo. (Minton v. Dignity Health (2019) 39 Cal.App.5th 1155, 1161.) "'[W]e treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law'" (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 43) or speculative allegations (Folgelstrom v. Lamps Plus, Inc. (2011) 195 Cal.App.4th 986, 993). "[W]e give the complaint a reasonable interpretation, and read it in context." (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 (Schifando).) If the demurrer can be sustained on any ground raised, we must affirm. (Ibid.) 2. Judicial Estoppel
Judicial estoppel is an equitable doctrine that precludes a party gaining an advantage by taking one position and later taking an inconsistent position, be it in the same case or two different cases. (Aguilar v. Lerner (2004) 32 Cal.4th 974, 986 (Aguilar); Hamilton v. State Farm Fire & Cas. Co. (9th Cir. 2001) 270 F.3d 778, 782 (Hamilton).) It may also be applied based on "'general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings,' and to 'protect against a litigant playing fast and loose with the courts.'" (Hamilton, at p. 782.) The purposes of the doctrine "'"are to maintain the integrity of the judicial system and to protect parties from opponents' unfair strategies."'" (Aguilar, at p. 986.) "[T]the trial court may sustain a demurrer on the ground of judicial estoppel where the facts pleaded and judicially noticed indicate as a matter of law the doctrine should be applied." (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 844, fn. omitted.)
Judicial estoppel applies when: the same party has taken one position in one action and a totally inconsistent position in another; the court accepted the party's first position; the first position was not taken due to fraud, mistake, or ignorance; and the party gained an unfair advantage. (Augilar, supra, 32 Cal.4th at pp. 986-987; accord, MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 422; Hamilton, supra, 270 F.3d at pp. 782-783, citing New Hampshire v. Maine (2001) 532 U.S. 742, 750-751.)
Plaintiff argues none of these factors is present. Plaintiff is wrong.
First he asserts he never took a different position in his bankruptcies from that taken in this case because he never filed schedules or a statement of financial affairs in bankruptcy 4. Plaintiff relies on Federal Rules of Bankruptcy Procedure rule 1007(c), which requires the schedules and statements be filed with the petition or within 14 days thereafter. He argues bankruptcy 4 was dismissed on the 13th day following its filing and thus he never had the opportunity to file schedules. This does not persuade.
"The bankruptcy code . . . places an affirmative duty on debtors to schedule their assets and liabilities with the bankruptcy court." (Yack v. Washington Mutual, Inc. (N.D.Cal. 2008) 389 B.R. 91, 95-96, citing 11 U.S.C. § 521(1).) This includes "'contingent and unliquidated claims'" as well as "'"all potential causes of action."'" (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 133, italics omitted.) "[T]he integrity of the bankruptcy system depends on full and honest disclosure by debtors of all their assets'" (Hamilton, supra, 270 F.3d. at p. 785, italics omitted) and "the importance of full disclosure in bankruptcy proceedings 'cannot be overemphasized'" (Ah Quin v. County of Kauai Dept. of Transportation (9th Cir. 2013) 733 F.3d 267, 273). Thus, where a bankruptcy is involved, "a party is judicially estopped from asserting a cause of action not . . . mentioned in the debtor's schedules or disclosure statements." (Hamilton, at p. 783 & cases cited therein; Ah Quin, at p. 271 [party who represents in bankruptcy action no claim exists "is estopped from representing in the lawsuit that a claim does exist"].)
In Hannon, supra, the plaintiff filed three chapter 13 bankruptcies, which were all dismissed because they did not include schedules or statements of financial affairs and thus did not disclose claims against the defendant. In defending against a motion to dismiss his complaint, the plaintiff asserted judicial estoppel should not apply. He argued that because he had not filed any schedules of statements of financial affairs, he had not taken an inconsistent position or received any unfair advantage. The court rejected this argument, concluding there is no difference between failing to list a claim on a filed schedule or failing to file a schedule at all. (Id. at p. *7.)
Further, in statements at the hearing on the OSC re dismissal of bankruptcy 4, plaintiff's counsel took a different position than the one taken in the case before us. Although counsel noted plaintiff had filed an action against defendant, he did not explain the basis of the claims or relief sought. He did not disclose that the action challenged the debt and sought injunctive relief to stop foreclosure. He noted only that plaintiff sought damages that "may be used to pay" defendant but he made no mention of the estimated value of the claim. He then requested a dismissal without a 180-day bar to refiling because he might need to file a chapter 7 action after foreclosure. This was not an accurate summary of the pending state court proceedings. Thus, when presented with an opportunity to accurately disclose the claims, plaintiff failed to do so. And the generalized statements about a possible claim were not sufficient to meet the requirement claims be scheduled. (Kunica v. St. Jean Financial, Inc. (S.D.N.Y. 1999) 233 B.R. 46, 56-57 & cases cited therein.)
In addition, as first alleged in the TAC, when plaintiff filed schedules in bankruptcy 3 he violated the Federal Rules of Bankruptcy Procedure when he did not include any of the current claims against defendant, which were ripe at that time. (Gottlieb v. Kest, supra, 141 Cal.App.4th at p. 133; Hamilton, supra, 270 F.3d at p. 784.) This was a separate basis on which the court sustained the demurrer. Plaintiff failed to address this omission and why it should not serve as a basis for judicial estoppel. Thus he forfeited any argument as to this issue. (Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125.)
Here, in claiming he was not successful in asserting a different position in bankruptcy 4, plaintiff again relies on the argument he did not file schedules. Thus, he contends, the court did not rely on them and the bankruptcy trustee never accepted his position because plaintiff never took a position.
Case law is to the contrary. Plaintiff's position was accepted when he received the benefit of the automatic stay to prevent the foreclosure sale. (E.g., Hamilton, supra, 270 F.3d at pp. 784-785 [automatic stay sufficient acceptance]; HPG Corp. v. Aurora Loan Services, LLC (E.D.Cal. 2010) 436 B.R. 569, 578 (HPG) [same]; Sharp v. Nationstar Mortgage, LLC (N.D.Cal. Sept. 3, 2014) No. 14-CV-00831-LHK [2014 WL 4365116 at p. *5] [same]; Swendsen v. Ocwen Loan Servicing, LLC (E.D.Cal. Mar. 21, 2014) No. 2:13-cv-02082-TLN-CKD [2014 WL 1155794 at pp.*5-6] (Swendsen) [same]; 11 U.S.C. § 301(b) [commencement of voluntary bankruptcy action "constitutes an order for relief"].)
International Engine Parts, Inc. v. Feddersen & Co. (1998) 64 Cal.App.4th 345, on which plaintiff relies, is inapt. There the court applied judicial estoppel where the debtor-plaintiff made affirmative misrepresentations in its statement of financial affairs, which the court adopted, that it was not a party to any action nor was it contemplating filing one. (Id. at pp. 348-349.) Nowhere does that case state, however, this fact scenario is the only one justifying application of judicial estoppel. The cases cited above are to the contrary.
Plaintiff argues he had the "absolute right" to dismiss bankruptcy 4. He claims the trustee "accepted the dismissal" and there was never a finding plaintiff acted without good cause. The point of this argument is unclear. It does not bear on application of judicial estoppel. (HPG, supra, 436 B.R. at pp. 578-579 [judicial estoppel applied although bankruptcy petitions dismissed].)
In the reply brief plaintiff asserts he was never estopped by the bankruptcy court from filing a bankruptcy petition. This is also irrelevant to the issue before us. Plaintiff attempts to distinguish the judicial estoppel cases on which we rely as applying only to bankruptcy actions. That is not correct. The cases applied judicial estoppel to civil actions based on failure to schedule claims in a bankruptcy.
Further, contrary to his claim, plaintiff did not voluntarily dismiss bankruptcy 4. After plaintiff's counsel explained plaintiff could not put together a workable plan, the court asked whether he intended to convert the action to a chapter 7 or dismiss it. Counsel replied he would not object "[i]f the court is inclined to dismiss it." The court then stated it would dismiss bankruptcy 4.
Moreover, plaintiff had no absolute right to dismiss bankruptcy 4. In In re Rosson (9th Cir. 2008) 545 F.3d 764 the court held that based on Marrama v. Citizens Bank of Massachusetts (2007) 549 U.S. 365 there is no absolute right to dismiss a chapter 13 bankruptcy. (Rosson, at p. 772.) Where there has been an abuse of the bankruptcy process or bad faith by the debtor, the court may convert the action to a chapter 7 (id. at p. 775) or dismiss it with prejudice (In re Blendheim (9th Cir. 2015) 803 F.3d 477, 499). The almost full page of cases cited by plaintiff on this point do not support his position as all but two predate Marrama, one out of a bankruptcy court in Puerto Rico and the other from a North Carolina bankruptcy court. These cases do not bind us or persuade us. (Western Heritage Ins. Co. v. Frances Todd, Inc. (2019) 33 Cal.App.5th 976, 989, fn. 6.)
There is no question plaintiff received an unfair advantage because he was the beneficiary of an automatic stay in bankruptcy 3 and bankruptcy 4 without disclosing his claims against defendant. (HPG, supra, 436 B.R. at pp. 578-579.) "The debtor, once he institutes the bankruptcy process, disrupts the flow of commerce and obtains a stay and the benefits derived by listing all his assets." (Hamilton, supra, 270 F.3d at p. 785.)
That bankruptcy 4 was ultimately dismissed makes no difference. (HPG, supra, 436 B.R. at p. 578; Swendsen, supra, 2014 [WL 1155794 at p. *6] [judicial estoppel barred the plaintiff's wrongful foreclosure action where he failed to schedule claim in two chapter 13 bankruptcy petitions, which were later dismissed, because the plaintiff received benefit of stay]; Leffridge v. Nationstar Mortgage, LLC (C.D.Cal. Nov. 19, 2015, No. EDCV1401940JAKKKX) [2015 WL 12681307 at p. *10] [where bankruptcy dismissed because of failure to file schedules, the plaintiff received unfair advantage because stay prevented foreclosure].) Discharge of plaintiff's debts "'is not a prerequisite to finding judicial estoppel.'" (Hannon, supra, [2015 WL 4776305 at p. *8].) "Where a debtor files successive petitions and obtains successive stays without full disclosure of all assets, the debtor derives an unfair advantage if he can later recover on undisclosed claims, and the bankruptcy system is laid bare for abuse." (HPG, supra, 436 B.R. at p. 578.)
As to the last element, plaintiff asserts his failure to file schedules "would have been the result of ignorance . . . or mistake." This argument fails for several reasons. First, plaintiff points to nothing in the TAC to show he alleged mistake or ignorance. Second, he fails to provide any facts to justify such a claim and the pleadings refute it. This was plaintiff's fourth bankruptcy and he was represented by counsel.
In Natividad v. Resmae Mortgage Corporation (N.D.Cal. Sept. 17, 2015) No. 5:15-CV-02359-EJD , the plaintiffs filed three bankruptcy cases over a three-year period that were all dismissed. The court applied judicial estoppel, characterizing the activity as "'playing fast and loose with the courts,'" which could not "be tolerated." (Id. at p. *3.) "The necessary implication that arises from this pattern of opening bankruptcy cases ad seriatim is that Plaintiffs never actually intended to use the bankruptcy process to restructure their finances. If they did, they would not have allowed their cases to be dismissed. In reality, what is apparent is that Plaintiffs wanted to advantage themselves of the automatic bankruptcy stay, which they did for three years." (Ibid.; see Hannon, supra, [2015 WL 4776305, at p. *7] [the plaintiff failed to allege any facts to support mistake or ignorance and affirmatively alleged he filed three bankruptcies to "'stave off eviction'" after foreclosure; judicial estoppel applied]; see In re Huerta (Bankr. C.D.Cal. 1992) 137 B.R. 356, 370 [filing bankruptcy for sole purpose of delaying or stopping foreclosure "is an abuse and therefore is not the proper basis" for filing].)
This is strikingly similar to plaintiff's conduct here and the same conclusion obtains. Plaintiff admits he filed bankruptcy 4 only "after all other avenues [to save the Property from foreclosure] had failed." Not only that, but at the bankruptcy order to show cause (OSC) hearing, less than two weeks after bankruptcy 4 was filed, plaintiff admitted he could not "propose a feasible plan." According to counsel the plan depended on family members contributing. "Gratuitous payments from family members and other third parties do not generally constitute regular income for purposes of" a bankruptcy plan. (In re Deutsch (Bankr. C.D.Cal. 2015) 529 B.R. 308, 315.) Therefore, there was never a viable plan to begin with.
From these facts, as in Natividad, we must imply plaintiff never intended to restructure his finances, which is the purpose of a chapter 13 bankruptcy, but filed bankruptcy only to obtain the benefit of the automatic stay to stop the foreclosure. This does not support a finding of ignorance or mistake.
In sum, defendant cited numerous cases to support application of judicial estoppel both in the trial court and its brief here. Plaintiff failed to discuss or distinguish these cases or to cite contrary estoppel cases in the bankruptcy context.
Plaintiff has not persuaded us to reject the numerous and consistent federal cases cited and discussed above and we choose to rely on them. "'Where lower federal precedents are divided or lacking, state courts must necessarily make an independent determination of federal law [citation], but where the decisions of the lower federal courts on a federal question are "both numerous and consistent," we should hesitate to reject their authority [citation].'" (Barrett v. Rosenthal (2006) 40 Cal.4th 33, 58; accord Uecker v. Zentil (2016) 244 Cal.App.4th 789, 795.) 3. Procedural Issues
Plaintiff argues Code of Civil Procedure section 430.41, subdivision (b) prevented defendant from relying on judicial estoppel in its demurrers to the FAC, SAC, and TAC because it was not asserted in the demurrer to the original complaint. But defendant could not have argued judicial estoppel in its demurrer to the original complaint because plaintiff did not file bankruptcy 4 until after the complaint was filed. Once bankruptcy 4 was filed, defendant raised judicial estoppel in its demurrers to each complaint filed in this action thereafter.
This section states: "A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint . . . on grounds that could have been raised by demurrer to the earlier version of the complaint."
Moreover, plaintiff did not make any allegations about bankruptcy 3 until the TAC. Defendant then responded, adding this as an additional basis for judicial estoppel in its demurrer to the TAC.
Plaintiff also argues the court should not have allowed defendant to demur to causes of action in the SAC and TAC where the court had previously overruled prior demurrers on those same causes of action. The thrust of plaintiff's argument is unclear.
He refers to the ruling on the demurrer to the SAC where the court noted that, because it had previously overruled demurrers to the UCL, negligence, breach of contract, and breach of the covenant of good faith and fair dealing causes of action on substantive grounds, defendant should not have filed another demurrer without making a motion for reconsideration under Code of Civil Procedure section 1008. But the court did not sustain the demurrer to these causes of action on substantive grounds. The court sustained it, with leave to amend, based on judicial estoppel. Therefore, there was no error.
Further, when overruling defendant's demurrer to the FAC based on judicial estoppel, the court did so without prejudice based solely on the ground the bankruptcy documents defendant submitted were "taken from a website" and not certified copies. The court specifically ruled defendant could raise the argument in a subsequent demurrer if it presented competent evidence, i.e., certified copies.
The court acknowledged in its ruling on the demurrer to the SAC that generally court documents need not be certified for a court to take judicial notice of them. (Thayer v. Kabateck Brown Kellner LLP (2012) 207 Cal.App.4th 141, 156.)
Finally, in sustaining the demurrer to the SAC with leave to amend the court noted plaintiff had not alleged any bankruptcy rules to show he was not required to file notice of this action with his bankruptcy petition. Plaintiff argues the court improperly sustained the demurrer to the TAC because he complied with the court's ruling by adding allegations as to Federal Rules of Bankruptcy Procedure rule 1007(c). Plainly, the court did not believe this was sufficient. In sustaining the demurrer to the TAC the court again noted plaintiff had not cited "proper authority" to show the "14-day grace period excused his failure to file proper schedules disclosing his potential claims against" defendant. We agree. 4. Leave to Amend
To be granted leave to amend, a plaintiff must demonstrate how the complaint could be pleaded to state a valid cause of action. (Schifando, supra, 31 Cal.4th at p. 1081.) "'To satisfy that burden on appeal, a plaintiff "must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading." [Citation.] . . . The plaintiff must clearly and specifically set forth the "applicable substantive law" [citation] and the legal basis for amendment, i.e., the elements of the cause of action and authority for it. Further, the plaintiff must set forth factual allegations that sufficiently state all required elements of that cause of action. [Citations.] Allegations must be factual and specific, not vague or conclusionary. [Citation.]'" (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1491.)
Plaintiff has not met any of these requirements. In fact, in his reply brief plaintiff essentially states he does not seek leave to amend. He argues the court erred in applying judicial estoppel and reversal would rectify the error, making leave to amend "unnecessary" (capitalization omitted). As discussed, we disagree. Further, plaintiff has had four opportunities to plead a proper complaint. There is no basis to believe he could do so if given yet another chance. It is past time for this litigation to end.
DISPOSITION
The judgment is affirmed. Defendant is entitled to costs on appeal.
THOMPSON, J. WE CONCUR: IKOLA, ACTING P. J. GOETHALS, J.