Filed 7/14/21

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

DWAYNE A. STRUIKSMA et al.,

 Plaintiffs and Appellants,

v.

OCWEN LOAN SERVICING, LLC, et 

al.,

 Defendants and Respondents.

 G059223

 (Super. Ct. No. 30-2019-01044597)

 O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Melissa 

R. McCormick, Judge. Affirmed in part, reversed in part, and remanded as directed.

Vasu Vijayraghavan for Plaintiffs and Appellants.

Locke Lord, Regina McClendon and Meagan S. Tom, for Defendants and 

Respondents.

* * *
2

Plaintiffs Linda and Dwayne Struiksma lost title to their home in a 

foreclosure sale. The purchaser at the sale then brought an unlawful detainer action 

against them under Code of Civil Procedure section 1161a, subdivision (b)(3).1

 A default 

judgment was issued, and plaintiffs were evicted from their property. Plaintiffs then filed 

this action against defendants HSBC Bank USA, N.A. and Ocwen Loan Servicing, LLC

(collectively, defendants), their lender and loan servicer, who were not parties to the 

unlawful detainer action. Generally, they alleged defendants carelessly failed to credit 

several payments to their loan balance. Thus, plaintiffs contended they were never in 

default and defendants wrongfully foreclosed on the property. The trial court sustained 

defendants’ demurrer to the complaint. It found all of plaintiffs’ claims were precluded 

by the unlawful detainer judgment except for a claim under the Truth in Lending Act

(TILA), which was defective for other reasons. Plaintiffs were denied leave to amend on 

all claims and appealed the resulting judgment.

We find the court erred in ruling plaintiffs’ claims were precluded, and we 

publish this case to clarify the preclusive effect of an unlawful detainer action under 

section 1161a. In such a proceeding, the court must determine whether the purchaser 

duly perfected title. But this is a limited inquiry focusing on how the trustee’s sale is 

conducted. Issues of title outside this narrow scope need not be raised and are not 

precluded in subsequent lawsuits. Here, plaintiffs’ claims were not directly related to the 

conduct of the sale and were not at issue in the unlawful detainer action. Nor were 

plaintiffs required to bring their claims against defendants in that proceeding.

Defendants also argue that certain claims the trial court found precluded fail 

for reasons other than preclusion. Given its ruling, the court had no opportunity to 

consider these arguments. So, we remand this case for the court to consider them in the 

1

 All further statutory references are to the Code of Civil Procedure unless otherwise 

specified.
3

first instance. Finally, as to the TILA claim, it suffers from several defects and the court 

correctly sustained the demurrer to this claim without leave to amend.

For these reasons, we affirm the court’s decision in part, reverse in part, and 

remand as directed.

I

FACTS

In 2006, plaintiffs obtained a $510,000 loan to buy a home in Placentia (the 

property) from nonparty First Street Financial Inc. (First Street). The loan was secured 

by a deed of trust on the property. A few years later, First Street assigned its beneficial 

interest in the deed of trust to defendant “HSBC Bank USA, N.A., as Trustee on behalf of 

ACE Securities Corp. Home Equity Loan Trust and for the registered holders of ACE 

Securities Corp. Home Equity Loan Trust, Series 2007-HE2, Asset Backed Pass-Through 

Certificates” (HSBC). Defendant Ocwen Loan Servicing, LLC, was HSBC’s servicer for 

the loan.

A notice of default was recorded on the property in February 2017, but it 

was rescinded the following month. Another notice of default was recorded in September 

2017, which was followed by the recording of a notice of trustee’s sale in March 2018.

The property was sold at a foreclosure sale in November 2018 to DNE Associates (DNE).

DNE then sought to evict plaintiffs under section 1161a, subdivision (b)(3), 

which allows the purchaser at a nonjudicial foreclosure sale to file an unlawful detainer 

action against the occupant in possession. Plaintiffs responded with a motion to strike. 

The motion was denied, and plaintiffs were ordered to file an answer.2 They failed to do 

2

 Plaintiffs submitted a request for judicial notice of the unlawful detainer complaint and 

the notice of ruling given in connection with their motion to strike. The unlawful 

detainer complaint is already in the record, so we deny this request. We grant the request 

as to the notice of ruling. (Evid. Code, § 452, subd. (d).)
4

so, and a default judgment was entered against them in March 2019. Plaintiffs claim 

their counsel at the time, Nationwide Legal, LLC, was responsible for the default. DNE 

subsequently evicted plaintiffs.

Plaintiffs filed this lawsuit in January 2019 against numerous parties. They 

alleged the following claims against defendants: (1) wrongful foreclosure; 

(2) negligence; (3) violation of TILA; (4) violation of Business and Professions Code 

section 17200; (5) quiet title; (6) cancellation of the trustee’s deed on sale; (7) breach of 

contract; (8) breach of the implied covenant of good faith and fair dealing; (9) unjust 

enrichment; and (10) slander of title.

3

All these claims, except the TILA claim, were based on plaintiffs’

allegations that they made four telephonic payments on their loan from March to June 

2017, which defendants failed to apply to their account. They allegedly informed

defendants about the error over the phone on multiple occasions, submitted paperwork on 

the missing payments, and even provided proof that the payments had been made. 

Plaintiffs claimed that though they were never in default, defendants proceeded with the 

trustee’s sale and unlawfully sold the property to DNE.

Defendants demurred to the complaint, arguing, among other things, that 

the non-TILA claims were precluded by the unlawful detainer action. They asserted the 

TILA claim failed because TILA only applies to the initial creditor, which was First 

Street, not defendants. The trial court agreed with both arguments and sustained 

defendants’ demurrer without leave to amend. Judgment was entered in their favor in 

May 2020, which plaintiffs now appeal.

3

 Plaintiffs also asserted claims for legal malpractice and unauthorized practice of law 

against Nationwide Legal, LLC, and wrongful eviction against DNE. Plaintiffs later 

dismissed DNE from the lawsuit.
5

II

DISCUSSION

A. Failure to Cite the Record

Plaintiffs’ opening statement of facts sparsely cites to the record. “If a 

party fails to support an argument with the necessary citations to the record, that portion 

of the brief may be stricken and the argument deemed to have been waived.” (Duarte v. 

Chino Community Hospital (1999) 72 Cal.App.4th 849, 856.) Though we admonish 

plaintiffs for their lack of citations, the material facts are drawn from the complaint and 

assumed to be true for purposes of the demurrer. (Zelig v. County of Los Angeles (2002) 

27 Cal.4th 1112, 1126.) Since there are no factual disputes and the complaint is 

relatively short, we will overlook plaintiffs’ error and consider their arguments.

B. Legal Standard

“‘“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.’” (Zelig v. 

County of Los Angeles, supra, 27 Cal.4th at p. 1126.)

C. Preclusion of Non-TILA Claims

The trial court found that plaintiffs’ non-TILA claims against defendants 

were precluded by the unlawful detainer action: “the validity of the foreclosure, the 
6

foreclosure process, and the trustee’s sale were encompassed by the unlawful detainer 

action. Plaintiffs’ claims that the foreclosure and the trustee’s sale were wrongful could 

have been litigated in the unlawful detainer case. The default judgment entered on the 

unlawful detainer complaint therefore necessarily adjudicated issues relating to the 

propriety of the foreclosure and the trustee’s sale.” As we explain below, the preclusive 

effect of an unlawful detainer action under section 1161a is narrow. The non-TILA 

claims arise from defendants’ failure to credit plaintiffs’ payments to their account, not 

any irregularity in the trustee’s sale. As such, they are not precluded by the unlawful 

detainer action.

“The law of preclusion helps to ensure that a dispute resolved in one case is 

not relitigated in a later case. . . . [I]ts contours and associated terminology have evolved 

over time. We now refer to ‘claim preclusion’ rather than ‘res judicata’ [citation], and 

use ‘issue preclusion’ in place of ‘direct or collateral estoppel . . . .’” (Samara v. Matar

(2018) 5 Cal.5th 322, 326.) “Claim preclusion prevents relitigation of entire causes of 

action. [Citations.] [It] applies only when ‘a second suit involves (1) the same cause of 

action (2) between the same parties [or their privies] (3) after a final judgment on the 

merits in the first suit.’ [Citation.] Issue preclusion, by contrast, prevents ‘relitigation of 

previously decided issues,’ rather than causes of action as a whole. [Citation.] It applies 

only ‘(1) after final adjudication (2) of an identical issue (3) actually litigated and 

necessarily decided in the first suit and (4) asserted against one who was a party in the 

first suit or one in privity with that party.’” (Id. at pp. 326-327.)

“[A]n unlawful detainer judgment has limited [preclusive] force because it 

typically follows a summary proceeding focused only on deciding a party’s right to 

immediate possession of property.” (Gombiner v. Swartz (2008) 167 Cal.App.4th 1365, 

1371.) Thus, title issues generally cannot be raised in unlawful detainer actions. 

(Martin-Bragg v. Moore (2013) 219 Cal.App.4th 367, 385.) “However, where title is 

acquired through [section 1161a proceedings], courts must make a limited inquiry into 
7

the basis of the plaintiff’s title.” (Old National Financial Services, Inc. v. Seibert (1987) 

194 Cal.App.3d 460, 465, italics added.) “Section 1161a provides for a narrow and 

sharply focused examination of title. To establish that he is a proper plaintiff, one who 

has purchased property at a trustee’s sale and seeks to evict the occupant in possession 

must show that he acquired the property at a regularly conducted sale and thereafter ‘duly 

perfected’ his title.” (Vella v. Hudgins (1977) 20 Cal.3d 251, 255, italics added (Vella).)

Since only a limited range of title issues can be raised in a section 1161a 

unlawful detainer action, the preclusive effect of a resulting judgment is likewise limited. 

Cheney v. Trauzettel (1937) 9 Cal.2d 158 (Cheney), is one of the formative cases defining 

the scope of title issues that can be resolved in a section 1161a proceeding. In Cheney, 

the plaintiffs brought an unlawful detainer action under section 1161a. The defendants’

answer contended that plaintiffs lacked valid title. They asserted the foreclosure “sale 

was merely colorable” and done by both parties to protect the property from execution by 

a judgment creditor. (Id. at pp. 159-160.) The trial court struck these allegations from

the answer, finding they were outside the scope of an unlawful detainer proceeding. 

(Id. at p. 159.)

Our Supreme Court agreed. “It is true that where the purchaser at a 

trustee’s sale proceeds under section 1161a . . . he must prove his acquisition of title by 

purchase at the sale; but it is only to this limited extent, as provided by the statute, that the 

title may be litigated in such a proceeding.” (Cheney, supra, 9 Cal.2d at p. 159, italics 

added.) The defendants’ “attack on [the] plaintiff’s title [had] no place in the . . . 

summary proceeding, for, if such issues are permissible, the proceeding entirely loses its 

summary character. [T]he plaintiff need only prove a sale in compliance with the statute 

and deed of trust, followed by purchase at such sale, and the defendant may raise 

objections only on that phase of the issue of title. Matters affecting the validity of the 

trust deed or primary obligation itself, or other basic defects in the plaintiff’s title, are 
8

neither properly raised in this summary proceeding for possession, nor are they 

concluded by the judgment.” (Id. at p. 160.)

Our Supreme Court later built upon Cheney in Vella, where it addressed the 

preclusive effect of a section 1161a unlawful detainer action. Plaintiff Vella and 

defendant Hudgins were in an intimate relationship. When Vella had financial troubles, 

Hudgins purchased her mortgage and the accompanying deed of trust. Vella then stopped 

making loan payments based on Hudgins assurances that she no longer needed to do so. 

After the parties had a falling out, Hudgins foreclosed on the property and purchased it at 

the trustee’s sale. He then filed an unlawful detainer action against Vella, whose answer 

contended that Hudgins had defrauded her. Following trial, judgment was awarded to 

Hudgins and Vella was evicted. (Vella, supra, 20 Cal.3d. at pp. 253-254.)

Vella filed a separate fraud action against Hudgins. (Vella, supra, 20 

Cal.3d at p. 254.) Our Supreme Court found the fraud suit was not barred by the 

unlawful detainer judgment. Its analysis recognized two separate ways an unlawful 

detainer action under section 1161a could preclude future litigation. The first scenario 

arises when the subsequent suit is “founded upon allegations of irregularity in a trustee’s 

sale.” (Id. at p. 256.) A second less common scenario can occur when “the second action 

encompasses activities not directly connected with the conduct of the [trustee’s] sale.” 

(Ibid.) In such a scenario, preclusion applies if the issues raised in the subsequent suit 

were fully and fairly litigated in the unlawful detainer action: “‘[F]ull and fair’ litigation 

of an affirmative defense—even one not ordinarily cognizable in unlawful detainer, if it 

is raised without objection, and if a fair opportunity to litigate is provided—will result in 

a judgment conclusive upon issues material to that defense.” (Id. at pp. 256-257.)

The Court found neither scenario applied. First, the fraud claims were 

unrelated to the trustee’s sale. And “section 1161a does not require a defendant to 

litigate, in a summary action within the statutory time constraints [citations], a complex 

fraud claim involving activities not directly related to the technical regularity of the 
9

trustee’s sale.” (Vella, supra, 20 Cal.3d at p. 258.) Second, the defendants had not 

shown the claims had been fully and fairly litigated in the unlawful detainer action. 

While Vella had alleged fraud in her answer to the unlawful detainer complaint, nothing 

in the record showed “either the precise nature of the factual issues litigated, or the depth 

of the court’s [unlawful detainer] inquiry.” (Ibid.)

Here, neither scenario outlined in Vella applies to plaintiffs’ non-TILA

claims. As to the first scenario, plaintiffs’ claims are not sufficiently related to the 

trustee’s sale to be precluded by the unlawful detainer action. Only claims “directly 

connected with the conduct of the sale” are required to be litigated in a 1161a proceeding. 

(Vella, supra, 20 Cal.3d at pp. 256, 258, italics added.) And the required title inquiry is 

limited due to the condensed nature of unlawful detainer actions.

4

 (Id. at p. 258; see 

Cheney, supra, 9 Cal.2d at p. 159.) To preserve the summary nature of section 1161a 

proceedings, we narrowly construe whether a claim directly relates to the conduct of the 

sale. Here, plaintiffs’ non-TILA claims focus on activity that predates the initiation of 

the trustee’s sale procedures. Their claims relate to defendants’ failure to apply payments 

to their account. While this alleged failure eventually led to the initiation of foreclosure 

sale proceedings, it is not directly connected to the conduct of the sale. Thus, plaintiffs’

claims did not have to be raised in the unlawful detainer proceeding and are not 

precluded by it.

Further, it would be unfair to compel plaintiffs to litigate complex claims 

within the summary confines of an unlawful detainer proceeding. (See Vella, supra, 20 

Cal.3d at p. 258.) Among other things, their claims will likely require robust discovery 

that is generally unavailable in unlawful detainer proceedings. “Accelerated discovery 

4

 For example, “[t]he unlawful detainer statutes prescribe shorter times for (i) filing a 

responsive pleading to the complaint, (ii) responding to motions to quash and motions for 

summary judgment, (iii) conducting discovery, (iv) noticing discovery motions, (v) courtordered extensions of time, and (vi) setting the action for trial.” (Friedman et al., Cal. 

Practice Guide: Landlord-Tenant (The Rutter Group 2020) ¶ 8:2, p. 8-3.)
10

and other deadlines ‘severely limit the time the parties have to complete their discovery 

and thus, necessarily, limit the discovery options available to [unlawful detainer] 

litigants.’” (Winslett v. 1811 27th Avenue, LLC (2018) 26 Cal.App.5th 239, 255, fn. 9.) 

Consequently, requiring plaintiffs to bring their claims in the unlawful detainer action 

would either unfairly prejudice them or destroy the summary nature of the proceeding. 

This apparent lack of finality to the unlawful detainer action is not unfair to DNE or 

defendants. The unlawful detainer process comes with certain tradeoffs. “In return for 

speedy determination of his right to possession, [the unlawful detainer] plaintiff sacrifices 

the comprehensive finality that characterizes judgments in nonsummary actions.” (Vella, 

supra, 20 Cal.3d at p. 258.)

Our conclusion is confirmed through a different analytical route. Only 

“claims based on the same cause of action must be decided in a single suit.” (Mycogen 

Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 897.) The primary rights theory is applied 

to determine whether claims involve the same cause of action. Under this theory, “the 

determinative factor is the harm suffered. When two actions involving the same parties 

seek compensation for the same harm, they generally involve the same primary right.” 

(Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 798.) In the unlawful detainer 

proceeding, DNE only needed to show that it “acquired the property at a regularly 

conducted sale and thereafter ‘duly perfected’ [its] title.” (Vella, supra, 20 Cal.3d at 

p. 255.) At issue were plaintiffs’ harms caused by defects in the procedure of the 

trustee’s sale. This lawsuit, however, seeks recovery for harms caused by defendants’

failure to apply plaintiffs’ payments to their account. Since the two lawsuits involve 

different primary rights, they do not involve the same cause of action.

As to the second scenario set forth in Vella, defendants’ alleged 

carelessness in failing to credit plaintiffs’ payments was not fully and fairly litigated in 

the unlawful detainer proceeding. Nothing in the record shows it was raised in plaintiffs’

motion to strike. And plaintiffs did not file an answer, so a default judgment was entered 
11

against them. While a default judgment precludes relitigation of all issues pleaded in the 

complaint (Kahn v. Kahn (1977) 68 Cal.App.3d 372, 382), defendants’ carelessness was 

not raised in DNE’s unlawful detainer complaint. And, as discussed above, plaintiffs 

were not required to raise the issue in the proceeding.

Defendants analogize this case to Malkoskie v. Option One Mortgage Corp. 

(2010) 188 Cal.App.4th 968, which found that the plaintiffs’ negligence, quiet title, 

wrongful foreclosure, and other related claims were precluded by a prior unlawful 

detainer action against them. (Id. at pp. 970-971.) But unlike here, all the claims against 

the defendant in Malkoskie “were premised on the alleged invalidity of the sale.” (Id. at 

p. 976.) The plaintiffs’ answer in the unlawful detainer action “raised two affirmative 

defenses contending the foreclosure proceedings contained irregularities and were invalid 

due to lack of notice.” (Id. at p. 974.) Specifically, plaintiffs alleged the wrong trustee 

and beneficiary had instituted the foreclosure process. (Id. at pp. 971-972.) As such, the 

court found that “[t]he conduct of the sale and the validity of the resulting transfer of title 

to [the purchaser] were . . . directly in issue in the unlawful detainer case.” (Id. at p. 974.)

Defendants also compare this case to Seidell v. Anglo-California Trust Co.

(1942) 55 Cal.App.2d 913, in a footnote. But the issues raised Seidell had been 

previously raised by the Seidell plaintiffs in their defense to the unlawful detainer action

and had been decided by the unlawful detainer court. (Id. at pp. 916-917, 922-923.) 

Because the unlawful detainer suit raised “identical questions,” the plaintiffs’ subsequent 

suit was barred by res judicata. (Id. at pp. 919-920.)

D. TILA Claim

The trial court found plaintiffs’ TILA claim failed “because TILA’s 

disclosure obligations only apply to the original creditor in a loan transaction” and the 

original creditor was First Street, not defendants. TILA requires creditors to make certain 

disclosures to consumers regarding leases or credit transactions. (15 U.S.C. § 1631(a).) 
12

A “creditor” is defined as “the person to whom the debt arising from the consumer credit 

transaction is initially payable.” (15 U.S.C. § 1602(g), italics added.) “TILA [also] 

provides for assignee liability if the violation is ‘apparent on the face of the loan 

documents.’” (Romero v. Countrywide Bank, N.A. (N.D. Cal. 2010) 740 F.Supp.2d 1129, 

1141; 15 U.S.C. § 1641(a).) As the trial court found, defendants were not plaintiffs’

initial creditor. Nor have plaintiffs alleged the purported TILA violation was apparent on 

the face of the loan documents. Thus, their TILA claim is defective.

Defendants also claim that plaintiffs’ TILA claim is barred by the statute of 

limitations, which they contend is either one or three years. We agree. The TILA claim 

is based on defendants’ extension of a loan with unconscionable interest rates that 

plaintiffs had no ability to repay.

5

 This violation occurred when the loan was originated 

in 2006. Plaintiffs brought this suit in 2019, so the claim is time-barred regardless of 

which limitations period is applied. Based on the record, we reject plaintiffs’ argument 

that the continuing violation doctrine extends the statute of limitations. The complaint 

identifies a discrete, actionable harm, not a series of unactionable harms. (Aryeh v. 

Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197-1198.)

“‘The plaintiff bears the burden of proving there is a reasonable possibility 

of amendment.’” (Rosen v. St. Joseph Hospital of Orange County (2011) 193 

Cal.App.4th 453, 458.) “‘Where the appellant offers no allegations to support the 

possibility of amendment and no legal authority showing the viability of new causes of 

action, there is no basis for finding the trial court abused its discretion when it sustained 

the demurrer without leave to amend.’” (Ibid.) Here, plaintiffs did not explain to the trial 

court how they could cure the defects in the TILA claim. Nor have they attempted to do 

5

 Plaintiffs also appear to have alleged that their TILA claim is based on defendants’

failure to finalize their loan modification application. But their complaint states that 

defendants denied their application.
13

so on appeal. Thus, we cannot find the court abused its discretion when it denied leave to 

amend on this claim.

E. Remaining Arguments

Defendants make a series of arguments as to why plaintiffs’ claims for 

wrongful foreclosure, negligence, quiet title, breach of the implied covenant of good faith 

and fair dealing, unjust enrichment, and slander of title fail for reasons other than 

preclusion. These arguments were not considered by the trial court. The record and the 

relevant minute order show the primary issue before the court was preclusion, which the 

trial court decided in favor of defendants. As such, we remand this case to the trial court 

to determine in the first instance whether defendants’ arguments on these claims have any 

merit.

III

DISPOSITION

The judgment of the trial court is affirmed as to the TILA claim and 

reversed and remanded as to the remaining claims. On remand, the court shall conduct 

further proceedings as directed within this opinion. The parties shall bear their own costs 

on appeal.

MOORE, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

FYBEL, J.