Jeff Schwartz vs. Select Portfolio Servicing, Inc.

Opposition

Cal. Super. - 4th Dist.February 18, 2016

Oo 0 9 A Un b w BN N D RN ND RN N N m k k a k a p d p m e a e m e m p a XR NN A A W R Y = O Y X N YN R W NN = o o WRIGHT, FINLAY & ZAK, LLP Gwen H. Ribar, Esq. (SBN 188024) Kaelee M. Gifford, Esq. (SBN 303533) rar oeart Nitorna 4665 MacArthur Court, Suite 200 County of Orange Newport Beach, CA 92660 10/30/2018 at 01:54:00 PM Tel. (949) 477-5050; Fax (949) 608-9142 Clerk of the Superior Court kgifford@wrightlegal.net By e Clerk. Deputy Clerk Attorneys for Defendants SELECT PORTFOLIO SERVICING, INC. and QUALITY LOAN SERVICE CORPORATION SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE JEFF SCHWARTZ; SANDRA Case No.: 30-2016-00836466-CU-BC-CJC SCHWARTZ DEFENDANTS’ OPPOSITION TO Plaintiffs, MOTION TO REVOKE NON MONETARY Vs. STATUS SELECT PORTFOLIO SERVICING, HEARING: INC.; QUALITY LOAN SERVICE Date: November 13, 2018 CORPORATION and DOES 1 to 100 Time: 2:00 p.m. inclusive Dept.: C-11 Defendants. TO THE HONORABLE COURT AND TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: Defendant SELECT PORTFOLIO SERVICING, INC. and Quality Loan Service Corporation (“Defendants”) hereby oppose Plaintiffs’ Jeff Schwartz and Sandra Schwartz (“Plaintiffs”) Motion to Revoke Defendant Quality Loan Service Corporations’ Nonmonetary status pursuant to Civil Code §29241 as follows: 1 OPPOSITION TO ORDER TO SHOW CAUSE REGARDING PRELIMINARY INJUNCTION Oo 0 NN O N L t W N N N N N N N N N N H m m d e m a e m e m e m em 0 N N N L i A W N R O Y N D E W N , MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Two years after filing suit against their mortgage servicer, Plaintiffs now seek to revoke the nonmonetary status of the foreclosure trustee, Defendant Quality Loan Serving Corporation (“QLS”). However, Plaintiffs’ motion is both untimely and lacks an adequate basis for revoking the monetary status. Notably, despite Plaintiffs having already sold the subject property (before QLS ever proceeded with foreclosure), they seek to bring a nominal party back into a case after more than two years. As Plaintiffs provide no viable basis for this unreasonable delay, nor any sufficient explanation of their supposed claims against QLS, Plaintiff’s Motion should be denied. II. STATEMENT OF FACTS On or about July 14, 2005 Plaintiffs obtained a loan from Washington Mutual Bank in the amount of $712,500 (“Loan”) which was secured by a deed of trust encumbering real property located at 2602 Calle Onice, San Clemente, California (the “Property’’) (Request for Judicial Notice, [“RIN”], Exhibit 1). The Loan was thereafter assigned to Bank of America, National Association as successor by merger to LaSalle Bank NA, as trustee for WaMu Mortgage Pass-Through Certificates Series 2005-AR17 Trust. (RIN, Exhibit 2) After Plaintiffs defaulted on the Loan, a Notice of Default was recorded July 30, 2015. (RJN, Exhibit 3) A Notice of Trustee’s Sale was recorded June 6, 2018 (RIN, Exhibit 4), however no foreclosure sale has occurred to date. QLS was substituted in as foreclosure trustee on February 10, 2016 (RIN, Exh. 5) and filed its DNMS to the instant case on March 24, 2016 (RJN, Exh. 6) more than two years ago. III. ARGUMENT A. Plaintiff’s Motion to Set Aside the DNMS under CCP § 473 is Untimely. Under Civ. Code § 29241(e): “in the event that the parties elect not to, or fail to, timely object to the declaration of nonmonetary status, but later through discovery, or otherwise, determine that the trustee should participate in the action because of the performance of its duties as a trustee, the parties may file and serve on all parties and the trustee a motion pursuant to Section 473 of the Code of Civil Procedure that specifies the factual basis for the demand.” 2 OPPOSITION TO ORDER TO SHOW CAUSE REGARDING PRELIMINARY INJUNCTION Oo 0 9 S N n n B A W ND N D N N N N N N Rm k m e m e m e a a m m e m pe R N aA L n A W N R O 0 O D N W N ~, o o A motion for relief from an order or proceeding resulting from “mistake, inadvertence, surprise, or excusable neglect” under CCP § 473(b) must be filed “within a reasonable time, in no case exceeding six months” after the order or proceeding was taken. The DNMS in question was filed and served on March 24, 2016. Plaintiff did not file his Motion to Set Aside until August 2018, approximately two and a half years later. The time for Plaintiff to file this motion expired long ago. Therefore, it is untimely and should be denied on this basis, alone. While Plaintiffs may argue that their basis for this motion is that QLS violated the TRO by noticing the sale of the Property on July 5, 2018 (Schwartz Decl. § 5), such an argument would still fail. The Declaration claims to attach a copy of the TRO allegedly sent to quality, but does not actually include proof that the TRO order was send to QLS, nor does it include the allegedly offending notice supposedly sent to QLS. Therefore, there is no adequate basis for Plaintiffs’ delay, and the Motion should be denied. B. There is no Factual Basis to Revoke Non-Monetary Status and Require QLS to Participate in the Action. Plaintiff curiouslyreasons that QLS somehow violated the TRO by postponing the foreclosure sale. However, such conduct was not a violation of the TRO, as QLS was merely removing the former sale date of July 5, 2018. Such conduct was entirely consistent with this Court’s ruling. Even assuming, arguendo, that this was a sufficient basis for revoking the nonmonetary status of QLS, Plaintiffs have not sufficiently established that QLS actually did anything wrong or actionable. Rather, the available facts suggest that the opposite is true, as they show that,QLS did exactly what it was supposed to do by refraining from proceeding with the scheduled foreclosure sale. While QLS may not have cancelled the foreclosure sale as Plaintiffs hopes, there was nothing in the TRO which required it to do so. Cancelling the foreclosure sale is an entirely different event, involving rescinding the Notice of Default and essentially starting the non-judicial foreclosure process over again. That was not required here, as evidenced by the express terms of the TRO order. 3 OPPOSITION TO ORDER TO SHOW CAUSE REGARDING PRELIMINARY INJUNCTION OO 0 3 O&O wn hk W N N N N N N N O N N N m d mb e a e a e m a a e m e m pe N I AA n n BA W N = O Y U N YN RN W N =, OO Additionally, requiring QLS to participate in this case would be futile, as the actions of QLS are covered by the statutory trustee privilege. The foreclosure trustee’s rights, powers and duties are strictly defined and limited by the deed of trust and governing statutes. The duties cannot be expanded by the Courts and no other common law duties exist. See Civil Code § 2934a, “conferring no other duties upon the trustee than those which are incidental to the exercise of the power of sale.” “[A]n enforceable deed of trust requires the trustee to execute only one of the following mutually exclusive duties: (1) should the trustor-debtor default on the debt, the trustee must initiate foreclosure on the property for the benefit of the beneficiary-creditor or (2) should the trustor-debtor satisfy the secured debt, the trustee must reconvey title to the real property back to the trustor-debtor, extinguishing the security device.” Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal. App.4™ 497 (disapproved of on other grounds by Yvanova, (2016) 62 Cal. 4" 919 at 939). Furthermore, pursuant to Civil Code § 2924(b) the foreclosure trustee incurs no liability for reliance in good faith on information provided in good faith by the beneficiary regarding the nature (or amount) of the default under the secured obligation. Thus, QLS cannot be held liable for any wrongdoing when it acted in reliance on information provided by the beneficiary. Moreover, the trustee’s conduct, including the mailing, publication and delivery of notices and the performance of the procedures for a non-judicial foreclosure, is privileged pursuant to Civil Code §§ 47 and 2924(d). The effect of the litigation privilege is that it bars any tort action based on a protected communication. See, Kachlon v. Markowitz (2008) 168 Cal. App.4™ 316, 333-334; Silberg v. Anderson (1990) 50 Cal.3d 205, 216; Rubin v.Green (1993) 4 Cal. 411 1187, 1194-1195. The privilege of Civil Code § 47, subdivision (b) applies to all torts other than malicious prosecution. Edwards v. Centex Real Estate Corp. (1997) 53 Cal. App.4™ 15, 29. The court in Kachlon v. Markowitz, supra, stated as follows: “Logic and the purposes of the statutory scheme suggest that the common interest privilege (§47, subd. (c)(1)) ... applies to nonjudicial foreclosure. As noted, the common interest privilege, applies to a “communication, without malice, to a person interested therein ... by one who is interested.” Kachlon, supra, at pp. 339-342 Here, the allegations in the SAC do not allege any malice as to QLS. Rather, Plaintiffs’ allegations against QLS are based upon a fundamental misunderstanding of a foreclosure trustee’s 4 OPPOSITION TO ORDER TO SHOW CAUSE REGARDING PRELIMINARY INJUNCTION Oo 0 N N O N B R A W N e m BN N N N O N N N N N M o e m h m p m a p a p m pe d p m © N N N BA W N E O Y N N N DN W O N m o role. QLS was not the successor servicer, as alleged in the Complaint, but rather the foreclosure trustee, as noted by the Substitution of Trustee (RIN, Exh 12). There are no allegations of specificity against QLS contained in Plaintiffs> SAC, nor are there any facts to suggest that it did anything besides its statutory duties as trustee. Moreover, the Property has since been sold and, thus, QLS no longer has any statutory duties pursuant to the Deed of Trust. Therefore, QLS never has, and never can, violate the TRO Order, and attempting to revoke its nonmonetary status despite the fact that the Property has been sold is nonsensical. Therefore, as there is no valid basis for revoking the non-monetary status of QLS, Plaintiffs’ Motion should be denied. IV. CONCLUSION For the reasons set forth above, Defendants respectfully request that Plaintiffs’ motion be denied. Respectfully submitted, atlee M. Gifford, Esq. Attorneys for Defendants Select Portfolio Servicing, Inc. and Quality Loan Service Corporation: WRIG, IN Dated: October 30, 2018 By: 5 OPPOSITION TO ORDER TO SHOW CAUSE REGARDING PRELIMINARY INJUNCTION N Y nn RA W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 97 28 PROOF OF SERVICE I, Marilee V. Johnson, declare as follows: I am employed in the County of Orange, State of California. I am over the age of eighteen (18) and not a party to the within action. My business address is 4665 MacArthur Court, Suite 200, Newport Beach, California 92660. I am readily familiar with the practices of Wright, Finlay & Zak, LLP, for collection and processing of correspondence for mailing with the United States Postal Service. Such correspondence is deposited with the United States Postal Service the same day in the ordinary course of business. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. On October 30, 2018, I served the within DEFENDANTS’ OPPOSITION TO MOTION TO REVOKE NON MONETARY STATUS on all interested parties in this action as follows: SEE ATTACHED SERVICE LIST [1] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date following ordinary business practices. [1] (BY PERSONAL SERVICE) I caused personal delivery by ATTORNEY SERVICE of said document(s) to the offices of the addressee(s) as set forth on the attached service list. [X] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct copies thereof enclosed in a package designated by Federal Express Overnight with the delivery fees provided for. [X] (BY ONE LEGAL FILE AND SERVE) I caused the document(s) to be e-served through One Legal File and Serve, to the recipient(s) on the attached service list. [X] (STATE) I declare under penalty of perjury under the law of the State of California that the foregoing is true and correct. Executed on October — 2018, at Newport Beach, California. Marilee V. Johnson PROOF OF SERVICE Co 0 N N Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SERVICE LIST Jeffrey M. Schwartz, Esq. Schwartz Law, PC 647 Camino De Los Mares, Suite 225 San Clemente, CA 92673 T: (888) 730-0529 / F: (949) 481-8836 Email: jeff@JeffSchwartzLaw.com Attorney for Plaintiffs Jeffrey & Sandra Schwartz John M. Sorich, Esq. Jeffrey J. Gillard, Esq. jeffrey.gillard@piblaw.com Parker Ibrahim & Berg LLC 695 Town Center Drive, 16th Floor Costa Mesa, CA 92626 T: (714) 361-9550 / F: (714) 784-4190 Email: john.sorich@piblaw.com Attorneys for Defendant JPMorgan Chase Bank, N.A. PROOF OF SERVICE