Heraux v. JPMorgan Chase Bank CA4/3 ( 2014 )

Filed 10/31/14 Heraux v. JPMorgan Chase Bank CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
CLERVIL HERAUX,
Plaintiff and Appellant, G048737
v. (Super. Ct. No. 30-2011-00445053)
JPMORGAN CHASE BANK, N.A., et al., OPINION
Defendants and Respondents.
Appeal from judgments of the Superior Court of Orange County, Linda S.
Marks, Judge. Affirmed.
Clervil Heraux, in pro. per., for Plaintiff and Appellant.
AlvaradoSmith, S. Christopher Yoo, and Mariel A. Gerlt for Defendant and
Respondent JP Morgan Chase Bank, N.A.
Law Offices of David K. Tran and David Khanhhung Tran for Defendant
and Respondent Tien Vu.
* * *
Defendant JPMorgan Chase Bank, N.A. (Chase) foreclosed on plaintiff
Clervil Heraux’s residence after Heraux defaulted on his loan. The property was sold to
Tien Vu at a trustee’s sale. Heraux subsequently brought suit against Chase, Vu, and the
trustee on Heraux’s deed of trust, California Reconveyance Company (California
Reconveyance). The first amended complaint purported to allege seven causes of action
against Chase and California Reconveyance. Vu was named in two of the causes of
action. The superior court sustained their demurrers to the first amended complaint
without leave to amend. Heraux appealed.1
Heraux claims the court erred in sustaining the demurrers and in sustaining
the demurrers without leave to amend. We affirm.
I
FACTS
Heraux, acting in propria persona, filed a complaint against Chase,
California Reconveyance Company, and Vu. The court sustained demurrers to the
complaint and granted Heraux leave to amend. Heraux thereafter filed a first amended
complaint. According to that complaint, Heraux gave Washington Mutual Bank, FA a
deed of trust on his residence in Anaheim (the property) on September 28, 2005, to
secure the repayment of a $455,000 loan. California Reconveyance was named as
trustee. The complaint alleges Chase subsequently acquired Washington Mutual’s
beneficial interest in the deed of trust. At the end of March 2009, California
Reconveyance Company recorded a notice of default and intent to sell under the deed of
trust, stating Heraux was $10,359.29 in arrears as of March 28, 2009.
Heraux alleged he thereafter sought to modify the loan secured by the deed
of trust. At the end of May 2009, Heraux received a call from someone at Chase about
possibly arranging a loan modification. Heraux alleged his notes from his conversation
1 California Reconveyance Company is not a party to this appeal.
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with the individual show Chase had a two-step approach to modifications. There was a
90-day trial modification and, if that was successfully completed, it could lead to a loan
modification. The representative said it appeared Heraux was preapproved for a three–
month deferment from June to August.
Heraux then played phone tag with Chase over the next few months and
sent Chase the financial information Chase had requested. In August 2009, another
representative of Chase said Chase received Heraux’s paperwork and the representative
would attempt to negotiate a loan modification or forbearance. In November 2009,
Heraux was informed by another person at Chase that his income was too high for him to
qualify for President Obama’s stimulus plan, but that Chase was “still going to try and
work” with him. Heraux made a number of telephone calls to Chase over the next month,
and on January 20, 2010, he received a telephone call from the collection department of
Chase. Heraux was told Chase needed updated financial information immediately.
On November 22, 2010, California Reconveyance filed a notice of trustee’s
sale of the property scheduled for December 15, 2010. The notice stated an estimated
unpaid balance and charges of approximately $502,501.47. The day before the scheduled
sale, an attorney for Heraux faxed California Reconveyance Company a request to
postpone the sale. The letter alleged there was funding in place to cure the default on the
loan.
Apparently a postponement was granted, because on January 3, 2011,
counsel for Heraux again faxed California Reconveyance Company asking the scheduled
sale set for the next day again be postponed. This time counsel asserted funding for a
new loan was then “being transferred” and the transfer and funding would take
approximately 10 to 14 days. No extension was granted and the property was sold to Vu
at the trustee’s foreclosure sale on January 4, 2011.
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On January 28, 2011, Heraux filed his complaint against Chase, California
Reconveyance, and Vu. It alleged causes of action to set aside the foreclosure and quiet
title, breach of the covenant of good faith, declaratory relief, fraud, reformation, civil
conspiracy, and accounting. Vu was named in the first and fifth causes of action (set
aside foreclosure and quiet title, respectively). The court sustained demurrers to the
complaint with leave to amend. Heraux filed an amended complaint on December 3,
2012. It alleged the same causes of action.
Chase (with California Reconveyance) demurred to the complaint,
contending each purported cause of action failed to state facts sufficient to state a cause
of action. Vu demurred to the two causes of action in which he was named as a
defendant, asserting each failed to allege facts sufficient to state a cause of action and
each was uncertain, ambiguous, and unintelligible. The court sustained the demurrers
without leave to amend. On May 28, 2013, the court entered judgment against Heraux
and in favor of Chase and California Reconveyance, and on July 3, 2013, entered
judgment against Heraux and in favor of Vu.
On July 15, 2013, Heraux filed his notice of appeal, stating the appeal was
from the court’s July 3, 2013 judgment after granting “Defendant’s Motion for Summary
Judgment.” After Heraux filed his opening brief, Chase filed a motion to dismiss the
appeal as to it because the judgment against Chase was not named in the notice of appeal.
We liberally construed Heraux’s propria persona notice of appeal to include the judgment
against Chase and found Chase would not be prejudiced by our doing so. At the same
time, we granted Chase’s request to augment the record on appeal.
II
DISCUSSION
Heraux contends the trial court abused its discretion in sustaining the
demurrers without leave to amend and in sustaining the demurrers in the first place. We
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address these issues in reverse order. Before addressing those issues, we note Heraux’s
brief does not comply with California Rules of Court, rule 8.204(a)(1)(c). For example,
the section of the opening brief under the heading alleging Heraux pled sufficient facts to
state causes of action for fraud and misrepresentation contains no citations to the record.
A. Standard of Review
A trial court’s action sustaining a demurrer presents a pure question of law
which we review de novo. (Farm Raised Salmon Cases (2008) 42 Cal. 4th 1077, 1089,
fn. 10.) “[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. [Citations.]”
(City of Dinuba v. County of Tulare (2007) 41 Cal. 4th 859, 865.) “Where written
documents are the foundation of an action and are attached to the complaint and
incorporated therein by reference, they become a part of the complaint and may be
considered on demurrer. [Citations.]” (City of Pomona v. Superior Court (2001) 89
Cal. App. 4th 793, 800.) “We may also consider matters that have been judicially noticed.
[Citations.]” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors
(2010) 48 Cal. 4th 32, 42.)
Additionally, when the court sustains a demurrer 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.
[Citation.]” (City of Dinuba v. County of Tulare, supra, 41 Cal.4th at p. 865.) A
plaintiff, however, bears the burden of proving the complaint could be amended to cure
the defect. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1081.)
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B. The Merits of Heraux’s Contentions
Heraux contends the court abused its discretion in sustaining the demurrer
to the first cause of action to set aside the foreclosure and to quiet title. This cause of
action was alleged as to Chase and Vu. He argues that as the trustee’s sale occurred on
January 7, 2011,2 and the transaction was not recorded until February 2, 2011, the sale
was not “perfected” within the meaning of Civil Code section 2924h, subdivision (c),3
and consequently the deed to the purchaser Vu is void. He cites no authority for this
interpretation of subdivision (c) of Civil Code section 2924h and we are not aware of any.
The 15-day time period in which to perfect a trustee’s sale provided by
Civil Code section 2924h, subdivision (c), has to do with a “race to the courthouse”
situation involving a debtor filing a petition in bankruptcy and obtaining an automatic
stay prior to the filing of a deed from a trustee’s sale. (In re Bebensee-Wong v. Fed. Nat’l
2 Heraux’s complaint alleges the sale occurred on January 4, 2011.
3 “In the event the trustee accepts a check drawn by a credit union or a
savings and loan association pursuant to this subdivision or a cash equivalent designated
in the notice of sale, the trustee may withhold the issuance of the trustee’s deed to the
successful bidder submitting the check drawn by a state or federal credit union or savings
and loan association or the cash equivalent until funds become available to the payee or
endorsee as a matter of right.
“For the purposes of this subdivision, the trustee’s sale shall be deemed
final upon the acceptance of the last and highest bid, and shall be deemed perfected as of
8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days
after the sale, or the next business day following the 15th day if the county recorder in
which the property is located is closed on the 15th day. However, the sale is subject to an
automatic rescission for a failure of consideration in the event the funds are not ‘available
for withdrawal’ as defined in Section 12413.1 of the Insurance Code. The trustee shall
send a notice of rescission for a failure of consideration to the last and highest bidder
submitting the check or alternative instrument, if the address of the last and highest
bidder is known to the trustee.
“If a sale results in an automatic right of rescission for failure of
consideration pursuant to this subdivision, the interest of any lienholder shall be
reinstated in the same priority as if the previous sale had not occurred.” (Civ. Code, §
2924h, subd. (c).)
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Mortg. Ass’n (Bankr. 9th Cir. 2000) 248 B.R. 820, 822.) Under Civil Code section
2924h, subdivision (c), a deed from a trustee’s sale relates back to 8:00 a.m. on the date
of the sale if the deed was recorded within 15 days of the sale. Failure to file the deed
within 15 days of the sale does not mean the deed is void. The court did not err in
sustaining the demurrers to the first cause of action.
Heraux contends he alleged facts sufficient to overcome a demurrer to his
cause of action for fraud, the fourth cause of action. An action for fraud has five
elements: “‘[1] a misrepresentation . . . ; [2] knowledge of its falsity. . . ; [3] intent to
defraud, i.e., to induce reliance; [4] justifiable reliance; and [5] resulting damage.’”
(Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638.) Although he alleges
misrepresentations occurred as evidenced by a post-trustee’s sale overnight letter seeking
information to proceed with a modification (again without citation to the record), he
made no allegation of the knowledge of the falsity of the purported misrepresentation,
that he justifiably relied on the representation, or that he was damaged by the alleged
misrepresentation. After all, the purported misrepresentation he specifically refers to in
his opening brief occurred after the sale had already taken place. Moreover, the
purported misrepresentation appears to have been a mass mailing4 to individuals in
Southern California seeking loan modifications for two “Homeowner Assistance Events”
to be held in Los Angeles and Ontario. The court did not err in sustaining the demurrers
to the fourth cause of action of the first amended complaint.
Heraux does not state how the court erred in sustaining demurrers to the
remaining five causes of action, other than his claim the court failed to comply with Code
of Civil Procedure section 472d. Specifically, he asserts the court failed to specify the
defects in his first amended complaint.
4 The font used for Heraux’s name and address is different from other fonts
used in the notice.
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Section 472d of the Code of Civil Procedure provides: “Whenever a
demurrer in any action or proceeding is sustained, the court shall include in its decision or
order a statement of the specific ground or grounds upon which the decision or order is
based which may be by reference to appropriate pages and paragraphs of the demurrer.
[¶] The party against whom a demurrer has been sustained may waive these
requirements.” (Italics added.) The statute does not require the court to refer in its order
sustaining a demurrer to particular paragraphs or pages in the complaint. It merely states
the court “may” refer to them. A court does not err by failing to do so. (Woodbury v.
Brown-Dempsey (2003) 108 Cal. App. 4th 421, 433 [“may” generally connotes a
permissive, not mandatory act].)
Code of Civil Procedure section 472d “was designed to fit a situation where
multiple grounds are set forth in a demurrer. In such case, the court is required to specify
the ground or grounds upon which it ruled so that a reviewing court may be apprised as to
which grounds were relied upon by the ruling court. [Citations.]” (Berkeley Police Assn.
v. City of Berkeley (1977) 76 Cal. App. 3d 931, 943.) Chase’s demurrer, however, stated a
single ground: each cause of action failed to allege facts sufficient to state the cause of
action. In sustaining Chase’s demurrer, the court stated its reason for doing so.
“Defendants’ general demurrer is well-taken. Plaintiff failed to show otherwise. Indeed,
plaintiff has failed to address most of the arguments made by defendants. Plaintiff argues
that the Trustee’s Deed Upon Sale was not timely recorded—which are beyond the
allegations of the FAC. Nowhere does plaintiff explain why the foreclosure sale was
improper to begin with. A mere technicality in recording the trustee’s sale would not
appear to void the sale or permit plaintiff to avoid foreclosure altogether.”
The court did not violate the dictate of Code of Civil Procedure 472d. As
Chase’s demurrer raised only one ground and the court found the demurrer was well-
taken, the court necessarily based its decision on that ground. (Schuetram v. Granada
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Sanitary Dist. (1964) 229 Cal. App. 2d 25, 31 [contention the court erred in failing to state
basis of decision sustaining demurrer was “frivolous” where demurrer raised a single
ground].) The court did not violate Code of Civil Procedure section 472d when it
sustained Chase’s demurrer.
In ruling on Vu’s demurrer, the court stated: “Defendant Tien Vu demurs
to the 1st and 5th causes of action in the FAC, generally and on the ground of
uncertainty. ([Code Civ. Proc.], § 430.10(e) and (f).) [¶] SUSTAIN without leave to
amend.” Even were we to conclude the court failed to comply with Code of Civil
Procedure section 472d here, Heraux could not prevail. He waived any irregularity when
he failed to bring the issue to the court’s attention. (Cohen v. Superior Court (1966) 244
Cal. App. 2d 650, 654-655; Code of Civ. Proc., § 472d.) He also has failed to argue, much
less demonstrate, prejudice. An error under this statute is reversible only if it is
demonstrated to have been prejudicial. (Wheeler v. County of San Bernardino (1978) 76
Cal. App. 3d 841, 846, fn. 3.)
Lastly, Heraux argues the court erred in sustaining the demurrers without
leave to amend. He claims he could amend the complaint to allege promissory estoppel,
because he had the right to prevent or delay the foreclosure by filing a chapter 13
bankruptcy. (See Aceves v. U.S. Bank N.A. (2011) 192 Cal. App. 4th 218 [Aceves was in
bankruptcy and gave up a stay of proceedings based on bank’s promise to work with her
on a modification].) This argument does not benefit him as he does not now claim he
gave up the right to file a bankruptcy petition, that bankruptcy was an option for him, or
that he ever considered filing a bankruptcy petition. In other words, he has failed to
establish “a reasonable possibility that the defect can be cured by amendment.” (City of
Dinuba v. County of Tulare, supra, 41 Cal.4th at p. 865.) The court did not err in
sustaining the demurrers without leave to amend.
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III
DISPOSITION
The judgments are affirmed. JPMorgan Chase and Vu shall recover their
costs on appeal.
MOORE, ACTING P. J.
WE CONCUR:
ARONSON, J.
FYBEL, J.
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