Vega v. Goradia CA2/5 ( 2015 )

Filed 2/26/15 Vega v. Goradia CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
SECOND APPELLATE DISTRICT
DIVISION FIVE
LIRIO A. VEGA, B253579
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. YC067224)
v.
YOGESH N. GORADIA et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Ramona G. See, Judge. Affirmed.
Albert Passaretti for Plaintiff and Appellant.
Stanley D. Bowman for Defendants and Respondents.
******
Plaintiff Lirio Vega appeals the judgment entered in favor of defendants Yogesh
and Ranjan Goradia following a bench trial on plaintiff’s claims for wrongful foreclosure
and related causes of action.
FACTUAL AND PROCEDURAL BACKGROUND
In 2002, plaintiff purchased from defendants the real property located at 92 Sea
Breeze Avenue in Rancho Palos Verdes (the “Property”). She financed the purchase by
assuming the two existing loans on the Property in the principal amount of approximately
$882,000, giving defendants a promissory note for a new loan of $228,000, and executing
an all inclusive, or “wraparound,” deed of trust naming defendants as the beneficiaries.
In 2004, defendants commenced a judicial foreclosure proceeding when plaintiff
defaulted on her mortgage payments. On June 10, 2010,1 a judgment for foreclosure and
order of sale was entered against plaintiff with respect to the Property. At a sheriff’s sale
held on or about March 21, 2012, defendants purchased the Property with their credit bid
of nearly $1 million.
On June 7, 2012, a judgment of unlawful detainer was entered, awarding
possession of the Property to defendants herein.2
Plaintiff commenced this lawsuit on June 6, 2012, filing a complaint alleging
seven causes of action: wrongful foreclosure based on a defect in notice; wrongful
foreclosure, right to redemption, and fraud, all based on improprieties in defendants’
credit bid; and abuse of process based on the allegation that defendants filed the unlawful
detainer complaint and served her with a Notice to Quit before the sheriff’s Deed of Sale
was recorded “in order to obtain a collateral advantage.” The complaint also sought to
1
The lapse of six years’ time is accounted for by an appeal, reversal and retrial in
the foreclosure lawsuit, and the appeal of the judgment entered in the retried case.
2
The two-year lapse between the entry of judgment in the foreclosure action, the
sale of the Property and the entry of judgment in the unlawful detainer case was the
consequence of two bankruptcy petitions filed by plaintiff’s husband, each of which
resulted in an automatic stay of proceedings.
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quiet title in the Property and to enjoin the unlawful detainer lawsuit. Plaintiff prayed for
damages of $2.5 million for the abuse of process claim, and the same sum for the
wrongful foreclosure claim.
Defendants demurred to the complaint. They cited Code of Civil Procedure
section 701.560, subdivision (a) for the proposition that plaintiff’s only recourse for
improper notice of sale is a monetary claim against the levying officer. They also noted
that plaintiff did not allege tender of the amounts owed, an essential element of a cause of
action for wrongful foreclosure; that the discrepancy between the $999,154.01 which
plaintiff claimed was the maximum credit bid and defendants’ actual credit bid of
$999,822.27 was de minimus; that judicially noticeable facts established that plaintiff
was not entitled to the credit against the judgment which she claimed; and that plaintiff
had no right of redemption because Civil Code section 2903 specifies that the right is
extinguished by the foreclosure sale, and plaintiff had no statutory right of redemption
under Code of Civil Procedure section 729.010 because defendants did not seek a
deficiency judgment. Finally, defendants argued that the filing of the unlawful detainer
action and service of the Notice to Quit could not be the basis for an abuse of process
claim, as that claim concerns the misuse of the tools the law affords litigants once they
are in a lawsuit. “Merely obtaining or seeking process is not enough; there must be
subsequent abuse, by a misuse of the judicial process for a purpose other than that which
it was intended to serve. [Citations.] The gist of the tort is the improper use of the
process after it is issued.” (Adams v. Superior Court (1992) 2 Cal.App.4th 521, 530-
531.)
The court sustained without leave to amend the causes of action for wrongful
foreclosure based on defects in the notice of sale, right of redemption, and injunctive
relief; sustained with leave to amend the abuse of process and quiet title claims; and
overruled the claims for fraud and wrongful foreclosure based on credit bid improprieties.
Plaintiff filed a first amended complaint, the operative complaint herein.
Defendants again demurred, and moved to strike portions of the first amended complaint.
The court granted the latter motion with respect to allegations which challenged the
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attorney fees awarded in the foreclosure action. The court agreed that the issues raised in
these portions of the complaint had been litigated and decided in the former action, and
were therefore barred by collateral estoppel. After the court’s ruling on that demurrer,
four causes of action remained: wrongful foreclosure based on the credit bid, abuse of
process, fraud, and quiet title.
Defendants answered the first amended complaint and concurrently filed a cross-
complaint alleging causes of action for implied indemnity and declaratory relief. The
cross-complaint alleged that, in the event the foreclosure sale were declared void,
defendants would be entitled to recoup from plaintiff the mortgage payments they had
made to Chase bank, the holder of the first deed of trust, so that Chase would not
foreclose on the Property, as well as post-judgment attorney fees.
Plaintiff sought to compel production of the attorney fee agreement between
defendants and their counsel. When defendants refused to produce the fee agreement
based on attorney-client privilege, plaintiff filed a motion to compel. The trial court
denied the motion.
On or about September 4, 2013, defendants dismissed their cross-complaint
without prejudice.
On October 9, 2013, the trial court entered judgment in favor of defendants on all
causes of action. The judgment recites that the “action came on regularly . . . on
August 21, 22, 23, 26, 27, 28, and 29, 2013. . . . [¶] The Court heard testimony and
considered the evidence presented. At the conclusion of Plaintiff’s case in chief,
defendants made a motion for judgment pursuant to California Code of Civil Procedure
Section [631.8]. The court issued a minute order dated August 30, 2013, containing its
Statement of Decision, in which the Court found that plaintiff had failed to meet her
burden of proof on any and all of the claims contained in the operative First Amended
Complaint. . . .” Neither the above-referenced statement of decision nor a reporter’s
transcript of proceedings is included in the record on appeal.
Plaintiff timely appealed the judgment. In her brief on appeal, plaintiff lists the
trial court rulings she is appealing as follows: (1) the judgment; (2) the order denying her
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motion to compel the fee agreement between defendants and their counsel; (3) the order
sustaining defendants’ demurrer to the cause of action for wrongful foreclosure based on
a defect in the notice of sale; (4) the order granting defendants’ motion to strike portions
of her first amended complaint; and (5) the order sustaining defendants’ demurrer to her
cause of action based on a right of redemption.
DISCUSSION
1. Absence of a reporter’s transcript
A trial court’s judgment or order is presumed to be correct. In Denham v.
Superior Court (1970) 2 Cal.3d 557, the court stated: “[I]t is settled that: ‘A judgment or
order of the lower court is presumed correct. All intendments and presumptions are
indulged to support it on matters as to which the record is silent, and error must be
affirmatively shown [by the appellant]. This is not only a general principle of appellate
practice but an ingredient of the constitutional doctrine of reversible error.’” (Id. at
p. 564.) “A necessary corollary to this rule is that if the record is inadequate for
meaningful review, the appellant defaults and the decision of the trial court should be
affirmed.” (Mountain Lion Coalition v. Fish & Game Com. (1989) 214 Cal.App.3d
1043, 1051, fn. 9.) “The burden of affirmatively demonstrating error is on the appellant.”
(Fundamental Investment etc. Realty Fund v. Gradow (1994) 28 Cal.App.4th 966, 971.)
The appellant has the burden to provide an adequate record on appeal to allow the
reviewing court to assess the purported error. (Maria P. v. Riles (1987) 43 Cal.3d 1281,
1295; Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416.)
If the record on appeal does not contain all of the documents or other evidence submitted
to the trial court, a reviewing court will “decline to find error on a silent record, and thus
infer substantial evidence” supports the trial court’s findings. (Haywood v. Superior
Court (2000) 77 Cal.App.4th 949, 955.) California Rules of Court, rule 8.163 provides:
“The reviewing court will presume that the record in an appeal includes all matters
material to deciding the issues raised. If the appeal proceeds without a reporter’s
transcript, this presumption applies only if the claimed error appears on the face of the
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record.” In other words, “in the absence of a required reporter’s transcript and other
[necessary] documents, we presume the judgment is correct.” (Stasz v. Eisenberg (2010)
190 Cal.App.4th 1032, 1039.)
Here, plaintiff has failed to provide this court with a transcript, or suitable
substitute, of the proceedings at trial. Because the trial court’s judgment in this case was
based on the factual findings made on the evidence presented to it, yet we are not privy to
that evidence, we are unable to review any of the rulings made at trial.
Because the trial court’s rulings on defendants’ demurrer and motion to strike
portions of the first amended complaint, as well as plaintiff’s motion to compel
production, were not dependent upon the presentation of evidence, we consider plaintiff’s
challenge to them below.
2. Standard of review
“In determining whether plaintiffs properly stated a claim for relief, our standard
of review is clear: ‘“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; see also McCall v. PacifiCare of Cal., Inc. (2001) 25
Cal.4th 412, 415 [noting that our review is de novo].)” (Zelig v. County of Los Angeles
(2002) 27 Cal.4th 1112, 1126.)
An order striking all or part of a pleading under Code of Civil Procedure section
436 is normally reviewed for abuse of discretion. (The Capital Gold Group, Inc. v.
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Nortier (2009) 176 Cal.App.4th 1119, 1127; see also, Leader v. Health Indutries of
America (2001) 89 Cal.App.4th 603, 613 [abuse of discretion standard used when the
trial court determines a pleading has disregarded prior court orders or has failed to
maintain compliance with the procedural processes]; Greshko v. County of Los Angeles
(1987) 194 Cal.App.3d 822, 830 [abuse of discretion standard used when basis for order
to strike is “to limit the focus of the proceedings to the issues framed by the remaining
viable pleadings”].) But when a motion to strike “challenges the legal sufficiency of the
complaint’s allegations, which are assumed to be true,” we review those questions of law
under a de novo standard. (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 53.)
“Appellate review of discovery rulings is governed by the abuse of discretion
standard. ‘Where there is a basis for the trial court’s ruling and the evidence supports it,
a reviewing court will not substitute its opinion for that of the trial court. [Citation.]’
(Johnson v. Superior Court (2000) 80 Cal.App.4th 1050, 1061.) ‘The trial court’s
determination will be set aside only when it has been demonstrated that there was “no
legal justification” for the order granting or denying the discovery in question.’
(Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 1612, citing Carlson v. Superior
Court (1961) 56 Cal.2d 431, 438.)” (OXY Resources California LLC v. Superior Court
(2004) 115 Cal.App.4th 874, 887.)
3. Demurrer to wrongful foreclosure—deficiencies in notice of sale
Plaintiff alleged that the sheriff’s sale of the Property was void due to various
irregularities in the conduct of the sale, most specifically, failure to give adequate notice.
Defendants maintained that plaintiff failed to state a claim for relief, since Code of Civil
Procedure section 701.560 specifically states that “[f]ailure to give notice of sale as
required by this article does not invalidate the sale.” The trial court agreed, and sustained
the demurrer without leave to amend. We concur with this ruling.
Plaintiff argues as if the defendants had initiated a nonjudicial foreclosure sale and
were responsible for the actions of their agents. However, defendants obtained a
judgment ordering foreclosure, which judgment was executed by the sheriff, not by
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defendants. California law has long held that a sale made under a judgment in
foreclosure on insufficient notice cannot be set aside on this ground; the remedy is an
action against the officer. (Shores v. Scott River Water Co. (1861) 17 Cal. 626, 628;
Hamilton v. Carpenter (1942) 52 Cal.App.2d 447, 448; see also Code Civ. Proc.,
§ 701.560.) And while plaintiff cites various purported discrepancies in the foreclosure
process, she does not allege that she was unaware of the sale, or that she was prejudiced
by the manner in which it was conducted. In short, plaintiff’s complaint failed to state a
cause of action for wrongful foreclosure.
4. Demurrer to right of redemption
As a condition to staying the sale of the Property by foreclosure, the Bankruptcy
Court ordered plaintiff’s husband to “make regular monthly payments in the amount of
$2,000” to defendants, and “adequate protection payments to Chase bank in the amount
of $5,600 each month.” Pursuant to these orders, plaintiff alleges that defendants
collected $128,000 postjudgment for which she received no offset or credit. Relying on
this court’s opinion in Birman v. Loeb (1998) 64 Cal.App.4th 502, plaintiff contends that
these post-judgment payments “created a deficiency” thereby entitling her to redeem the
Property within one year of the date of sale pursuant to the provisions of Code of Civil
Procedure sections 726, subdivision (e), 716.020, and 729.010 through 729.090. The
claim is unavailing.
We began our opinion in Birman v. Loeb, supra, 64 Cal.App.4th 502 by stating:
“This case presents the question whether a creditor can set off a debt owed to the debtor
against a deficiency remaining after nonjudicial foreclosure under a purchase money trust
deed.” (Id. at p. 506.) In that case, the plaintiffs had successfully sued the defendants for
fraud in connection with the purchase and sale of property; a judgment including an
award of attorney fees and costs was entered in their favor. The defendants subsequently
reacquired the subject property at a nonjudicial foreclosure sale. Defendants’ $2 million
credit bid left an unsecured debt of more than $2 million. We held that, pursuant to the
anti-deficiency provisions of Code of Civil Procedure section 580d, defendants were not
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entitled to an equitable setoff of the sums they owed plaintiffs under the latter’s
judgment.
Contrary to the situation in Birman v. Loeb, supra, 64 Cal.App.4th 502, plaintiff
was not both a creditor and a debtor of defendants; thus, the issue of an equitable setoff
simply does not arise under the facts of this case. Defendants did not seek a deficiency
judgment. Instead, they looked only to the Property to satisfy plaintiff’s obligations
under the All Inclusive Deed of Trust. Consequently, plaintiff had no statutory right of
redemption.
5. Motion to strike
Plaintiff appeals the trial court’s ruling striking the allegations of her first amended
complaint which concerned the attorney fees awarded to defendants in the foreclosure
action. Specifically, plaintiff alleged that defendants and their attorney, Stanley
Bowman, “fraudulently and illegally agreed to split the award of attorney fees. . . . [¶][¶]
At the time of the award of attorney fees to [defendants, defendants] had not paid Stanley
Bowman any part of the approximate $250,000 in attorney fees awarded to [defendants]
which was part of and included in the total $332,697.00 award of attorney fees to
[defendants].” Plaintiff alleged that defendants never intended to pay Bowman the full
amount of the attorney fee award, making “that portion of the judgment awarding the
attorney fees an illegal fee split and the credit bid which included that fee split . . .
fraudulent, illegal and improper and the judicial foreclosure sale void.”
In its motion to strike, defendants maintained that the issue of attorney fees
awarded in the foreclosure action had been litigated to a final judgment, which judgment
had been affirmed on appeal. Thus, collateral estopped barred any further litigation of
the issue. The trial court agreed, and ordered these allegations stricken from the first
amended complaint. We concur with the ruling.
“Collateral estoppel or issue preclusion bars the relitigation of an issue that was
previously adjudicated if (1) the issue is identical to an issue decided in a prior
proceeding; (2) the issue was actually litigated; (3) the issue was necessarily decided; (4)
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the decision in the prior proceeding is final and on the merits; and (5) the party against
whom collateral estoppel is asserted was a party to the prior proceeding or in privity with
a party to the prior proceeding. [Citation.] ‘The “identical issue” requirement addresses
whether “identical factual allegations” are at stake in the two proceedings, not whether
the ultimate issues or dispositions are the same. [Citation.]’ [Citation.]” (Bostick v. Flex
Equip. Co., Inc. (2007) 147 Cal.App.4th 80, 96.)
Here, the issue of the amount of attorney fees to which defendants were entitled in
connection with their prosecution of the foreclosure action was actually litigated in that
proceeding by the identical parties to this action. The foreclosure judgment is final.
Indeed, plaintiff appealed the judgment entered in that action for the sole purpose of
challenging the award of attorney fees. Division Two of this District Court of Appeal
affirmed the judgment, including the attorney fee award. (Goradia v. Vega (B228128)
filed March 5, 2012.) Consequently, plaintiff may not relitigate the issue of the amount
of attorney fees to which defendants are entitled in connection with the foreclosure
proceeding in this lawsuit. The motion to strike was therefore properly granted.
6. Motion to compel production of fee agreement
Plaintiff sought the production of the fee agreement between defendants and their
attorney, Stanley Bowman, purportedly to defend the cross-complaint which included the
recovery of attorney fees as damages. As the court noted in denying plaintiff’s request,
“the documents sought are protected by Business and Professions Code § 6149.”
Moreover, because the cross-complaint was filed only to protect defendants in the event
the foreclosure sale was declared void, and was dismissed when the trial ended in
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defendants’ favor, plaintiff was not in any way prejudiced by the order denying her
motion.
DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
GOODMAN, J.
We concur:
MOSK, Acting P.J.
KRIEGLER, J.

Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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