Opinion
D069086
04-18-2017
SEAN M. PARK et al., Plaintiffs and Appellants, v. JP MORGAN CHASE, N.A. et al., Defendants and Respondents.
Sean M. Park, in pro. per.; Michelle Park, in pro. per.; and Stephen F. Lopez for Plaintiffs and Appellants. Bryan Cave, Glenn J. Plattner and Deborah P. Heald for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2013-00065415-CU-OR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Gregory W. Pollack, Judge. Affirmed. Sean M. Park, in pro. per.; Michelle Park, in pro. per.; and Stephen F. Lopez for Plaintiffs and Appellants. Bryan Cave, Glenn J. Plattner and Deborah P. Heald for Defendants and Respondents.
In this wrongful foreclosure case, plaintiffs and appellants Sean Park and Michelle Park alleged causes of action, which, on a number of grounds, challenged defendant and respondent JP Morgan Chase, NA's (Chase) right to pursue foreclosure on a deed of trust the Parks had given to Chase's predecessor in interest, Washington Mutual Bank, FA (WaMu). By way of orders sustaining Chase's demurrer without leave and granting a later motion for summary judgment, the trial court rejected each of the Parks' claims and, in September 2015, entered a judgment in the bank's favor.
The Parks filed a timely notice of appeal; while their appeal has been pending, Chase acquired the home secured by the deed of trust at a June 24, 2016 trustee's sale. Shortly thereafter, the Parks filed a second lawsuit against Chase in which they allege the trustee's sale was wrongful.
We grant the Parks' request for judicial notice of the recorded documents which reflect the postjudgment foreclosure sale of their home. (Evid. Code, §§ 451, subd. (f), 452, subds. (d), (g), (h) & 459, subd. (c).)
On appeal here, the Parks argue Chase failed to establish that it had any right to foreclose on the deed of trust and, in particular, that the trial court erred in taking judicial notice of documents that established Chase's beneficial ownership of the Parks' deed of trust. Although in their opening brief the Parks also argued, among other contentions, that the bank failed to communicate with them as required by Civil Code section 2923.5, that they were relieved of their obligation to make payments on the loan when a Chase representative advised them to default in their payments on the loan and apply for a loan modification, and that they were damaged by the bank's conduct, in their reply brief the Parks abandoned these contentions and ask only that we find error in the trial court's determination that Chase had the right to foreclose on the deed of trust. As we explain more fully below, the record on appeal undermines the Parks' contention with respect to Chase's beneficial ownership of the deed of trust. Thus, we affirm the trial court's judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In October 2007, the Parks borrowed $1 million from WaMu. The loan was secured by a home the Parks acquired in La Jolla, California. The Parks made payments on the loan through June 2009. Thereafter, the Parks made no further payments on the loan.
In August 2013, the trustee under the deed of trust, having previously recorded a notice of default, recorded a notice of trustee's sale; in response, the Parks filed a complaint against Chase, which by that time had succeeded to WaMu's interest in the deed of trust under the terms of a 2008 purchase and assumption agreement (P&A Agreement) with the Federal Deposit Insurance Corporation (FDIC), which itself, as receiver, had succeeded to WaMu's assets and liabilities. The Parks eventually filed a first amended complaint (FAC), which alleged a number of causes of action, including cancellation of the notices of default and notices of sale that had been recorded prior to August 2013. As we indicated, the Parks also alleged Chase had not met its communication obligations under Civil Code section 2923.5 and had breached the terms of the deed of trust.
The trustee filed a notice of default in October 2009 and six notices of trustee sales between April 2010 and August 2013.
Chase filed a demurer to the FAC. It asked for and received judicial notice of documents, which it argued—in addition to the allegations of and exhibits attached to the FAC—established its capacity as successor in interest to WaMu and its right to initiate and execute foreclosure proceedings. The trial court sustained, without leave to amend, Chase's demurrer with respect to seven causes of action and overruled it with respect to three remaining causes of action. With respect to the remaining causes of action, Chase moved for summary judgment on the grounds that the Parks could not show that they had suffered any damage. The trial court granted Chase's motion and entered judgment in its favor. Following entry of judgment, the trustee conducted a nonjudicial sale of the home and Chase acquired it.
I
As we have noted, on appeal the Parks only challenge that portion of the trial court's order sustaining the bank's demurrer in which the trial court took judicial notice of the documents by which Chase acquired WaMu's interest in their deed of trust. The Parks' reply brief states: "[W]hile the Court may be well within the law to sustain the demurrer and summary judgment in this case, it should do so based upon a correct interpretation of the facts and the current state of the applicable law." The reply brief further states: "At this time, the issue Appellants have with the trial court's rulings on the demurrer concerns only one ruling that resulted in part in the grant of the demurrer to the First and Fourth causes of action. The trial court was wrong in taking judicial notice of the Chase/FDIC purchase agreement and accepting it as proof of Chase's status as holder of the note at issue and beneficiary of the deed of trust." The reply brief then reiterates this limitation on the scope of its appeal: "There is no question there was a basis for sustaining the demurrer in this case on the First; Third; Fourth; Fifth; Sixth; Seventh; and Tenth causes of action. However, the basis for doing so was not the reasons found by the trial court. The Court should reject the ruling of the trial court granting the demurrer by taking as true the purchase and sale agreement between Chase and the FDIC and thereby determining Respondents were the holders of the note and beneficiary of the deed of trust. Instead the Court should uphold the demurrer because Appellants had no right pre-foreclosure to make claims based upon a pending wrongful foreclosure."
In reviewing the trial court's order sustaining the bank's demurrer, we are governed by familiar principles. " 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Importantly, however, we do not admit plaintiff's contentions, deductions or conclusions of law or fact. (Ibid.)
II
The trial court granted Chase's request for judicial notice of, among other documents: the recorded deed of trust, notice of default, notices of trustee sales, assignment of the deed of trust, and substitution of trustee. In addition, the trial court took judicial notice of the P&A Agreement by which Chase acquired WaMu's assets, including the Parks' deed of trust. In sustaining Chase's demurrer without leave to amend, the trial court found the documents that it judicially noticed established the bank's right to foreclose. In particular, the trial court stated: "[S]ection 3.1 of the [P&A Agreement] shows that the FDIC transferred and conveyed to CHASE, 'all right, title, and interest of the Receiver in and to all of the assets . . . of the [WaMu] Bank whether or not reflected on the books of the [WaMu] Bank . . . .' Furthermore, CHASE 'specifically purchased all mortgage servicing rights and obligations [of] [WaMu] Bank.'
"Thus, Defendants acquired all assets of WaMu Trust, including Plaintiffs' Note and Deed of Trust. Furthermore, Plaintiffs do not allege a theory under which their debt obligation ended up in the possession of a third party rather than Chase. Nor do Plaintiffs allege that any third party has ever come forward attempting to enforce the debt."
Contrary to the Parks' argument, the trial court did not err in taking judicial notice of the recorded notices of default and trustees sales, substitution of trustee and the P&A Agreement, and, importantly, it did not err in also taking notice of the legal effect of those documents. In materially indistinguishable circumstances, the court in Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 752-755 (Scott) rejected a debtor's argument that a trial court had erred in judicially noticing the legal effect of the very P&A Agreement noticed by the trial court here. In Scott, Chase, by way of its demurrer, sought to establish that although the P&A Agreement transferred the debtor's deed of trust to Chase, it did not transfer any of WaMu's liability growing out of acts which took place when the loan originated. In finding the trial court acted properly in taking notice of the fact that under the P&A Agreement Chase did not assume WaMu's liabilities, the court stated:
"First, [Evidence Code] section 452, subdivision (c) provides that judicial notice may be taken of '[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.' This subdivision 'enables courts in California to take notice of a wide variety of official acts[, and] [a]n expansive reading must be provided to certain of its phrases[;] included in "executive" acts are those performed by administrative agencies.' [Citation.] Scott does not dispute that official acts of the FDIC may be subject to judicial notice under section 452, subdivision (c). As JPMorgan argues, the FDIC's official acts of seizing WaMu's assets and publishing the P&A Agreement are judicially noticeable. Moreover, as explained post, the FDIC's official act of transferring certain WaMu assets (but not certain liabilities) to JPMorgan as of September 25, 2008—as evinced by the P&A Agreement—is an official act subject to judicial notice under section 452, subdivision (c) under the circumstances of this case.
All further statutory references are to the Evidence Code unless otherwise indicated.
"Second, section 452, subdivision (h) provides that judicial notice may be taken of '[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.' In this case, the fact of the P&A Agreement and the fact of the transfer to JPMorgan of WaMu assets, but not liabilities for borrower's claims, are not reasonably subject to dispute and are capable of ready determination, particularly since Scott did not question with specificity the authenticity, completeness, or legal effect of the P&A Agreement posted on the official FDIC Web site. Numerous federal courts have taken judicial notice of the P&A Agreement on a similar basis." (Scott, supra, 214 Cal.App.4th at pp. 752-753, fns. omitted.)
Importantly, in Scott the court rejected the plaintiff's contention that although the P&A Agreement was subject to judicial notice, facts asserted within the document were not subject to notice. "Where, as here, judicial notice is requested of a legally operative document—like a contract—the court may take notice not only of the fact of the document and its recording or publication, but also facts that clearly derive from its legal effect. [Citation.] Moreover, whether the fact derives from the legal effect of a document or from a statement within the document, the fact may be judicially noticed where, as here, the fact is not reasonably subject to dispute." (Scott, supra, 214 Cal.App.4th at p. 754.)
In Scott, the court distinguished the record before from the ones considered in Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (Herrera) and Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 883 (Jolley). In Herrera, the court held that a hearsay statement as to ownership of the deed of trust in a recorded document could not be admitted over the plaintiff's objection where there was no other proof of truth of the statement and the plaintiff's objection appeared to have some reasonable basis. (Herrera, at p. 375.) In Scott, the court found that, in contrast, on the record it was considering, the plaintiff had no basis upon which to challenge the validity or effect of the P&A Agreement. (Scott, supra, 214 Cal.App.4th at p. 756.)
In Jolley, the plaintiff argued that the copy of the P&A Agreement attached to the bank's request for judicial notice was not in fact a true and accurate copy of the operative agreement between Chase and the FDIC. In light of the plaintiff's bona fide objection to the authenticity of the document, the court in Jolley found judicial notice was not proper. (Jolley, supra, 213 Cal.App.4th at p. 883.) The court in Scott distinguished Jolley on much the same basis it distinguished Herrera: unlike the plaintiff in Jolley, the plaintiff in Scott had no reasonable basis upon which to dispute the authenticity of the document presented by Chase. (Scott, supra, 214 Cal.App.4th at p. 760.)
The Scott court's discussion of Herrera and Jolley demonstrate that by the time Chase was defending itself in Scott, its counsel had taken care to fully meet the substantive requirements of judicial notice and relied on an authentic version of the P&A Agreement, which on its face and without reference to any other document outside the record established its status as successor to WaMu's assets.
Here, as in Scott, the P&A Agreement and its legal effects were the proper subject of judicial notice. As Scott found, here the P&A Agreement and its transfer of assets to Chase was both an official act within the scope of section 452, subdivision (c) and a matter not reasonably subject to dispute within the meaning of section 452, subdivision (h). In particular, as in Scott, the Parks have not presented, either here or in the trial court, any basis upon which to believe the P&A Agreement presented by Chase in the trial court was not what it purported to be or that any party other than Chase is the beneficiary of their deed of trust. Rather, as in Scott, here the P&A Agreement the trial court considered on Chase's demurrer established Chase was the successor in interest to WaMu and that the notices of default and sale as well as the substitution of trustee that Chase caused to be recorded were therefore valid.
Like the trial court, we also reject the Parks' contention there was any defect in the assignment of the deed of trust by an officer of Chase, who executed the assignment and identified himself as an officer of Chase and identified Chase as attorney in fact for the FDIC. Where, as here, the document recites the name of the corporation for whom an individual is acting in making the assignment or other transfer, the requirements of Civil Code section 1095 have been met. (See Fonteno v. Wells Fargo (2014) 228 Cal.App.4th 1358, 1378.)
DISPOSITION
The judgment of the trial court is affirmed. Chase to recover its costs of appeal.
While we have interpreted the Parks' brief as limiting their appeal to the trial court's judicial notice of the P&A Agreement and that ruling's impact on the order sustaining Chase's demurrer, were we to reach the order granting summary judgment on the merits, we would expressly affirm it as well. As Chase points out, the three causes of action which survived its demurrer each required that the Parks allege and prove they suffered some damage. Because the record shows that at the time Chase made its motion for summary judgment the Parks still owned the home and were collecting rent from the tenants, the trial court correctly determined that at that point they could not show any damage and properly granted the bank's motion for summary judgment. --------
BENKE, J. WE CONCUR: McCONNELL, P. J. DATO, J.