1

Filed 10/22/15 Fazio v. The Bank of New York Mellon CA 1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DI VISION ONE

MICHAEL A. FAZIO et al.
, Plaintiffs and Appellants,

v. THE BANK OF NEW YORK MEL L ON et al. Defendant s and Respondent s

. A144010
(Alameda County Super. Ct. No. HG14724942)

Michael A. Fazio and Kim Marie F azio appeal from a judgment of dismissal
entered against them after the trial court sustained a demurrer to their first amended complaint against T he Bank of New Yo rk Mellon (BNY Mellon or Bank)

. 1 Th is appeal
follows on the heels of two other cases that have ruled against the Fazios and in favor of
BNY Mellon

. 2 We conclude that the Fazios ’ claims are barred by principles of res judicata , and we therefore affirm the judgment.

1 The full name of defendant and respondent is The Bank of New York Mellon, FKA The Bank of New York, as Trustee for Certificate Holders of the CWALT, Inc. Alternative Loan Trust 2006

- 40T1, Mortgage Pass

- Through Certificates, Series 2006

- 40T1.

2 See Fazio v . Bank of New York et al., Alameda County Superior Court case number RG11608571 (the prior state

- court action) and Fazio v. Bank of New York et al. , United States District Court for the Northern District of California case number 3:13

- cv

- 00554

- MEJ (the pri or federal

- court action).2 F ACTUAL AND 

### P ROCEDURAL B ACKGROUND The operative complaint is the Fazios’ first amended complaint, which was filed
after the trial court sustained with leave to amend BNY Mellon ’s demurrer to the original complaint. In the first amended complaint, t he Fazios allege d that they were the tit le d

owners and in possession of real property located at 1468 East Avenue in Hayward ( the

p roperty)

. O ther than facts relating to the legal description of the p roperty, the first amended complaint contained vague assertions
, conclusory allegations
, and unspecific
claims

. In d escribing the “present dispute between the parties,” for example, it refer red

to an “alleged Deed of Trust” and “an alleged potential ‘Adverse Claim ’ ” (boldface and initial capitalization omitted)
, and it asserted that BNY Mellon “ha[d] insinuated without provision of corroborative evidence that it ha [d] some interest in the [p] roperty that is
adverse to Plaintiffs. ” In its cause of action for quiet title, the first amended complaint
asserted
, without providing any details
, that “ a controversy has arisen and now exists”
between the Fazios and BNY Mellon, and it maintained that a “judicial determination of the rights and responsibilities of the parties over, to and about the [p] roperty [wa s ] necessary and appropriate to remove uncer tainties that cloud the usefulness and enjoyment of the property.”
In September 2014, BNY Mellon filed a d emurrer to the first amended complaint
and requested judicial notice be taken of a series of pleadings filed in the prior state

- and
federal

- court ac tions. In the demurrer, BNY Mellon maintained that the first amended complaint failed to state facts sufficient to constitute a ca use of action for qui et title
because : (1) the claim was barred by the doctrine of res judicata; (2) the Fazios failed to allege they have paid the outstanding debt owing on the p roperty; and (3) the B ank received a valid assignment of the deed of trust and promissory note for the p rop erty. The demurrer was set for a hearing on October 24, 2014. On October 22, t w o days before the hearing, the trial court issued a tentative ruling sustaining the demurrer
without leave to amend

. The next day, October 23, the Fazios requested a dismissal of the entire complaint without prejudice and the clerk entered the dismissal.3

On October 24, 2014, the demurrer was argued , and the court sustained it wi thout
leave to amend. The court first found that the Fazios’ “purported dismissal without prejudice

. . . did not deprive the court of jurisdiction to affirm [the] tentative ruling. [Citation.]” The court noted that after it sustained the demurrer to the Fazios’ original compl aint , the Fazios were given leave to amend “to allege clearly the basis for the adverse claims to title against which a determination is sou ght

. . . . Rather than do so, [the Fazios ] filed a [ first amended complaint ] that is even more vague and ambiguous as
to the basis of [ BNY Mellon ] ’s alleged adverse claim than the prior version of the complaint. [The Fazios’ ] only allegations in the [ fir st amended complaint regardin g their claim for quiet title]

. . . is that [ BNY Mellon ] ‘has insinuated without provision of
corroborative evidence that it has some interest in the [p] roperty that is adverse to [the
Fazios ] and that [the Fazios] never delivered a copy of the Deed of Trust to [BNY Mellon] .”
The trial court took judicial notice of the original complaint
, as well as two exhibits, including the deed of trust and an August 2011 assignment of the beneficial
interest in the deed of tru st to BNY Mellon by MERS

. 3 The court concluded that MERS had authority to assign the beneficial interest in the loan under the terms of the deed of

trust and that the Fazios’ agreement to the se terms precluded them from challenging the assignment. The co urt further concluded that to the extent the Fazios’ claim was based
on the separation of the promissory note from t he deed of trust as part of the securitization process, “that theory of liability has been soundly rejected by California [appellate] courts

. [Citations.]” The court also found that the first amended complaint
was defect ive because it was not verified
, and it granted BNY Mellon ’s request for judicial notice of the series of pleadings filed in the prior state

- and federal

- court actions

. 4

3 MERS is an acronym for Mortgage Electronic Registration Systems, Inc.

4 On August 4, 2015, BNY Mellon filed a motion requesting judicial notice in this court, asking that we take judicial notice of the same series of pleadings f iled in the prior state

and federal

- court actions for which judicial notice had been sought in the trial court. We granted the motion on August 20, 2015.4

I n sustaining BNY Mellon ’s demurrer without leave to amend , the court concluded that it
“need not reach [ BNY Mellon ’s ] argument that [the Fazios’ ] clai ms are barred by res judicata.”
On October 24, the trial court also temporarily set aside the Fazios’ dis missal without prejudice, issued an order to show cause why the dismissal sh ould not be permanently vacated and scheduled a case management conference and hearing on its

or der to show cause for November 13, 2014. Michael Fazio personally appeared at the
November 13 hearing

. Following the hearing, the court issued its ruling, finding that the
Fazios had “no right to dismiss the complaint without prejudice” because the y attempted

to dismiss the complaint only because “they were dissatisfied” with the court ’s tentative ruling to sustain BNY Mellon ’s demurrer. The court noted that the Fazios employed a
similar tactic in the prior state

- court action. 5 In ruling on the order to show cause, the

court stated that it had “considered the interests of fairness to both [ BNY Mellon ] and the judicial system, the potential for undermining the tentative ruling system, the negative impact on scarce judicial resources resulting from successive meritless litigation, the potential for encouraging forum shopping, and the nee d to protect [ BNY Mellon ] from the prejudice caused by annoying and continuous litigation , and [the court] concluded
that [the Fazios’ ] dismissal without prejudice cannot stand.” A j udgment in favor of
BNY Mellon was filed on November 18, 2014

. 

### D ISCUSSION A. The Trial Court Properly Vacated the Fazios’ Dismissal Without Prejudice

. The Fazios assert that the trial court erred by vacating their voluntary dismissal without prejudice

. The y contend that under s ection 581 of the Code of Civil Procedure

5 In the prior state

- court action, the trial court vacated the dismissal after concluding that the o nly reason for the dismissal was “gamesmanship and the desir e to engage in forum shopping.”5

(section 581)
, 6 voluntary dismissal is available “as a matter of right

. . . and is effective immediately,” thereby depriving the trial court of any further jurisdiction over the action

exc ept to award costs or attorney fees. We are not persua ded

. As obs erved by Division Two of this C o urt in Groth Bros. Oldsmobile, Inc. v. Gallagher (2002) 97 Cal.App.4th 60 ( Groth ), “ ‘ “ [ t ] he right of a plaintiff to voluntarily dismiss an action before commencement of trial is not absolute.” [Citation.] ’ ” ( Id. at
p. 66.) Courts have created exceptions to section 581’s general rule that plaintiffs may voluntarily dismiss an action at any time “ before the actual commencement of trial ” (§ 581, subd. (b) (1) ) , and these exceptions have evolved as courts construed the term t rial

to include not only jury or court trials, but also other proc edures that “ ‘ “effectively dispose of the c ase. ” ’ ” ( Groth, at p. 66.) In considering the scope of a plaintiff’s right to a voluntary dismissal in the context of a ruling on a demurrer, Groth looked to the California Supreme Court in
Wells v. Marina City Properties, Inc

. (1981) 29 Cal.3d 781 ( Wells ) and concluded that
Wells reaffirmed “the plaintiff’s ri ght to dismiss an action voluntarily ‘was ended when a trial court order sustained a defendant’s general demurrer without leave to amend

. ’ ” ( Groth, supra, 97 Cal.App.4th at p p. 66

- 67 .) “ Wells recognized that to allow the plaintiff to voluntarily dismiss without prejudice after allowing the time limit for amendment to pass would run counter to the Legislature’ s purpose in amending former Code of Civil Procedure section 581 to ‘limit [the plaintiff’ s] right of voluntary dismissal to the point of the “ commencement of trial ” ’ [citation] and would subvert the statutory scheme. [Citation.] ‘ The obvious consequence of such a statutory construction would be to

6 Section 581 provides: “An action may be dismissed [¶]

. . . [¶] [w]ith or without prejudice, upon written request of the plaintiff to the clerk, filed with paper s in the case, or by oral or written request to the court at any time before the actual commencement of trial .” (§ 581, subd. (b)(1), italics added.) Under this section, “trial shall be deemed to actually commence at the beginning of the opening statemen t or argument of any party or his or her counsel, or if there is no opening statement, then at the time of the administering of the oath or affirmation to the first witness, or the introduction of any evidence.” (§ Id. , subd. (a)(6).)6

prolong, rather than to terminate, lawsuits. It would not serve the orderly and timely disposit ion of civil litigation. No good reason appears why encouragement should be given to such tactics, the effect of which is to ex pose defendants to duplicative “ annoy ing and continuous litigation,” to burden our trial court with “ fruitless ” proceedings, and to delay the ultimate resolution o f the validity of the plaintiff’ s pleading. [Citations.]’ [Citation.]” ( Groth, at p. 67 .)
Groth then explained that these same interests applied to cut off a plaintiff’s right

to a voluntary dismissal when the court i ssues a tentative ruling on a dispositive motion
, such as a demurrer

. “ Not only does allowing a plaintiff to file a voluntary dismissal without prejudice in the face of a tentative ruling that the court will sustain the demurrer without leave to amend waste the time and resources of the court and other parties and promote ann oying and continuous litigation, but [ it also]

. . . undermines

. . . the tentative ruling system

. ” ( Groth, supra, 97 Cal.App.4th at p

. 70.) The court noted that the plaintiff in the case before it “ used the window of opportunity presented by the tentat ive decision procedure

. . . to voluntarily dismiss his act ion after learning of the court’ s ruling, but before it could become final. ” ( Id. at pp. 70

- 71.)
C ases subsequent to Groth
, supra, 97 Cal.App.4th 60 have follow ed the principle
that v oluntary dis missal is ineffective after a court announces a tentative ruling a dverse to plaintiff on a dispositive motion . (See Franklin Capital Corp. v. Wilson (2007)
148 Cal.App.4th 187, 202 [harmonizing cases and stating voluntary dismissal is
ineffective when the dismissal “could be said to have been taken [¶]

. . . in the light of a public and formal indication by the trial court of t he le gal merits of the case, or [¶]

. . . in the light of some procedural dereliction by the dismissing plaintiff that made di smiss al
otherwise inevitable
, ” italics omitted ]; accord
, Gogri v. Jack In The Box Inc. (2008)
166 Cal.App.4th 255, 264 [“ Absent special circumstances that make an adverse j udgment inevitable, a plaintiff’ s section 581 voluntary dismissal of an action is timely when, as in this case, it is filed before the trial court issues a tentativ e ruling granting the defendant’ s motion for summary judgment,” italics in original ] .) We agree with this approach. As

one respected treatise has noted, “ [a] llowing plaintiffs to dismiss without prejudice after7

notice of an adverse ruling is contrary to policies noted in Wells [ v. Marina City Properties, Inc. , supra , 29 Cal.3d 781 ]

. It would permit a plaintiff ‘who was led to suppose a decision would be adverse to him [ to ] prev ent such decision and begin anew, thus subjecting the defendant to annoying an d continuous litigation.’ Moreover, it would waste ‘the time and money of the [ P ] eople in a fruitless proceeding in the courts
, ’ ” c iting Wells, at p. 785

. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2015) ¶11:25(a)(2), p. 11

- 14 .) Here, the Fazios filed their voluntary dismissal the day after the trial court issued its tentative ruling sustain ing BNY Mellon ’s demurrer and the day before the hearing on
the demurrer. This timing makes it apparent that the Fazios “used the window of opportunity presented by the tentative decision procedure ... to voluntarily dismiss [their] action after learning of the court’s ruling, but before it could become final.” ( Groth,

supra, 97 Cal.App.4th at pp. 70

- 71.) We conclude that the court correctly vacated the voluntary dismissal u nder these circumstances

. B. The Trial Court Properly Sustained BNY Mellon ’s Demurrer Without Leave to Amend

. O n appeal from a demurrer sustained without leave to amend
, we may “affirm the
court’ s ruling if it is correct under any legal theory raised in the demurrer, whether the

cou rt relied on the theory or not . [C itation

. ]” ( Debro v. Los Angeles Raiders (20 01)
92 Cal.App.4th 940, 946

. ) Relying on this principle, we affirm the trial court’s judgment on res judicata principles.

“ Code of Civil Procedure section 1908 codifies the res judica ta doctrine, and provides that ‘ a judgment or final order in an action or special proceeding ’ is conclusive
as to ‘ the matter directly adjudged. ’ [Citation.] ‘ Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties

or parties in privity with them.’ [Cit ation.] The doctrine applies when (1) the issues decided in the prior adjudication are identical with those pre sented in the later action; (2) there was a final judgment on the merits in the prior action; and (3) the party against whom the plea is raised was a party or was in privity with a party to the prior8

adjudication. [Citation.]” ( Needelman v. DeWolf Realty Co., Inc. (20 15)
239 Cal.App.4th 750, 757; Estate of Dito (2011) 198 Cal.App.4th 791, 801 [ “ Under the doctrine of res judicata, ‘ all claims bas ed on the same cause of action must be decided in a single suit; if not brought initially, they may not be raised at a later date.’ [Citation.]” )
Our review of the documents submitted with BNY Mellon ’s motion for judicial
notice shows that these principl es of res judicata bar the F azios’ action . F irst, “[a] claim raised in a second suit is ‘based on the same cause of action’ as one asserted in a prior action if they are both premised on the same ‘ primary right

. ’ [Citation.] ‘ The plaintiff’s primary right is the right to be free from a particular injury, regardless of the legal theory on which liability for the injury is based

. [Citation.] ’ ” ( Estate of Dit o, supra, 198 Cal.App.4th at p. 801 , italics added .) The Fazios’ prim ary right here

— that BNY
Mellon has no valid legal or equitable right, titl e, or interest in the property

— is th e same primary right the Fazios asserted in the prior state

- and federal

- court actions

. Second
, the prior state

- and federal

- court actions are fi nal. In the state

- court action, judgment was entered in November 2012 after the superior court sustained BNY
Mellon ’s demurrer to the Fazios’ first amended co m plaint without leave to amend. A nd
in the prior federal

- court action
, t he district court granted the Bank’s motion to dismiss in July 2013 after c oncluding “res judicata bars the instant action.” These determinations are final for purposes of res judicata. (See Goddard v. Security Title Insurance & Guar.
Co. (1939) 14 Cal.2d 47, 52 [“judgmen t [in state

- court action] given after the sustaining of a general demurrer on a ground of substance, for example, that an absolute defense is disclosed by the allegations of the complaint, may be deemed a judgment on the merits, and conclusive in a subsequ ent suit”] ; Boeken v. Philip Morris USA, Inc. (2010)
48 Cal.4th 788, 793 [“ dismissal with prejudice [in federal case] is the equivalent of a final judgment on the merits, barr ing the entire cause of action”]

. ) 7

7 The record include s no indication that appeals were taken, and the Fazios do not contend that appeals are pending or that the dispositions are otherwise not final.9

Finally, “[w]ith regard to the issue of privity, the doctrine of res judicata operates to bar any further litigation arising out of the same subject matter of a prior action as between the same parties or parties in privity with them. [Citation.]” ( Gates v. Super ior
Court (1986) 178 Cal.App.3d 301, 308.) Here, privity is apparent because the parties are the same as they were in the prior state

- and federal

- court actions. W e affirm the trial court’s judgment of dismissal because the Fazio s ’ action is barred by pr inciples of res judicata

. 

### D ISPOSITION The judgment is affirmed. BNY Mellon is entitled to costs on appeal.10 _________________________ Humes, P.J.

We concur:

_________________________ Margulies, J.

_________________________ Dondero, J.

Fazio v. The Bank of New York (144010)