Filed 4/21/16 Hinojos v. Asset Ventures CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

EZEQUIEL HINOJOS,
Plaintiff and Appellant,

v.
ASSET VENTURES, LLC, ET AL.,
Defendants and Respondents. H040853 (Santa Clara County Super. Ct. No. 113CV256853)

In 2006, Plaintiff and appellant Ezequiel Hinojos obtained a home equity line of
cred it (HELOC) secured by a deed of trust on his home. In 2009 , Hinojos defaulted on the loan

. He has not made any payments since then. In 2012 , the lender assigned the
loan to an investor. After a series of assignments, Asset Ventures, LLC (Asset Ventures) purported to hold the beneficial interest in the loan and proceeded to foreclose on the
property. Six day s before t he foreclosure sale , Hinojos filed a complaint alleging wrongful foreclosure and other claims against Asset Ventures , among others . He also obtained an order temporarily restraining the foreclosure sale

. After a hearing, t he trial

court denied H inojos’s request for a pr eliminary injunction

. Hinojos challenges that order in this appeal. Hinojos did not request a stay of the proceedings in the trial court. Consequently,
while this appeal was pending
, the trial court entered a number of orders, including a judgment of dismissal and two default judgments. In view of this history, we asked for2

supplemental briefing on the question whether th is appeal i s moot. After considering the supplemental briefs, we conclude this appeal is moot and will dismiss the appeal.

F ACTS

On Ma y 10, 2006, Hinojos obtained a HELOC from Well Fargo Bank (Wells Fargo) with a credit line l i mit of $134,600. The parties describe this HELOC as a “second position loan” and a “junior lien.” It was secured by a deed of trust on Hinojos’s
home in San José (Deed of Trust)

. The Deed of Trust provided that Hinojos and his wife
were the “ TRUSTOR [s] (‘Grantor[s]’).” The trustee was American Securities Company
and the “ BENEFICIARY (‘Lender’)” was W ells Fargo

. Hinojos defaulted on the HELOC on December 30, 2009 . He did not make any further payments and continued to reside in the home until at least February 2014

. By that time, he had lived in the house for more than 35 years. On March 14, 2012
, more than two years after Hinojos defaulted, Well Fargo assigned its interest in the Deed of Trust to Eagle Crest, LLC (Eagle Crest). On April 9, 2012, Eagle Crest assigned its interest in the Deed of Trust to Newport Beach Holdings (NBH) . The assignme nts to Eagle Crest and NBH were both recorded on April 18, 2012. On August 10, 2012, NBH assigned its interest in the Deed of Trust to Asset Ventures, L LC (Asset Ventures) . The assignments (1) from Eagle Crest to NBH and (2) from NBH to Asset Ventures w ere signed by Michaela Brychcova as “Assistant Vice
President” of both Eagle Crest and NBH . The assignment to Asset Ventures was

recor ded on August 20, 2012. On April 19, 2013, Asset Ventures recorded a Substitution of Trustee, subs tituting
MTC Financial, Inc. doing business as Trustee Corps (Trustee Corps) in place of American Securities Company. The substitution was signed by Asset Ventures’s president, Anthony Martinez. That same day , Trustee Corps recorded a notice of default
and election t o sell under deed of trust (Notice of Default). According to the Notice of
Defa ult, the amount due on the loan as of April 17, 2013

— not including foreclosure fees
and cos ts

— was $17,167.60. Attached to the Notice of Default was a declarati on of3

compliance with Civil Code section 2923.5 5 , signed by Martinez, which stated that Asset Ventures had exercised due diligence to contact Hinojos to assess his financial situation and explore options to avoid forecl osure. On November 8, 2013, Trustee Corps issued and recorded a notice of trustee’s sale (Notice of Sale), which stated that the propert y would be sold on December 3, 2013. According to the Notice of Sale, the unpaid balance plus reasonable costs was

“ estimated ” at $105,001.38.

P ROCEDURAL H ISTORY

Preappea l Procedure in Trial Court

On November 27, 2013, six days before the date set for the nonjudicial foreclosure sale, Hino jos filed this action in the superior court. The complaint alleged causes of
action for (1) wrongful foreclosure, (2) cancellation of recorded instruments, (3) unfair business practices (Bus. & Prof. Code, § 17200 et seq.), (4) fraud, and (5) violations of
the California Homeowner Bill of Rights (HBOR )

— specifically violations of Civil Code
sections 2923.4, 2923.55, 2924c, subd. (b)(1), a nd 2924.12

. The named defendants were Asset Ventures, Trustee Corps, NBH, Martinez, and Brychcova. Eagle Crest was not named in the complaint. The complaint alleged that NBH did not exist and was not authorized to do business in California, which rende red any assignment by NBH void . It also alleged that
since the assign ment from NBH to Asset Ventures was void, Asset Ventures did not have the authority to substitute the trustee or to foreclose

. And it alleged that Eagle Crest was
not authorized to do busin ess in California when it acted in this matter because it had not
filed a s tatement of information with the California Secretary of State. Hinojos argued
that these “unlawful assignments have clouded, contaminated [] title and have created uncertainty over the status and ownership of the note executed in favor of Wells Fargo Bank.” The complaint also alleged that Martinez had not contacted Hinojos to explore options to avoid foreclosure as stated in Martinez’s declaration
, and that the assignments4

sig ned by Brychcova were defective . Finally, Hinojos alleged the estimated amount due
in the Notice of Sale was inflated and excessive. He later asserted that the maximum due was $65,000 and that Asset Ventures had offered to accept $37,000. The relief req uested in the complaint included : (1) cancellation of the assignments, the substitution of trustee, the Notice of Default, and the Notice of Sale ; (2) damages ; (3) a declaration that the debt
was an unsecured debt ; (4) injunctive relief ; (5) punitive dama ges ; and (6) attorney fees

. On December 2 , 2013, before any defendant appeared in the action, Hinojos appeared ex parte and obtained a temporary restraining order and an order to show cause for a preliminary injunction, which enjoined the foreclosure sale pending a hearing on hi s request for a preliminary injunction. The court scheduled a hearing on the preliminary injunction and set a briefing schedule. Asset Ventures and Brych c ova filed opposition to the request for preliminary injunction. Asset Vent ures argued the preliminary injunction should be denied because Hinojos would be unlikely to prevail on the merits for several reasons

. Regarding Hinojos’s statutory claims, Asset Ventures asserted that the HBOR applies to “first lien mortgages or deeds of trust” and not the junior lien in this case, citing Civil Code section
2924.15. Asset Ventures advised the court that the “amount to reinstate” the loan was $20,172.31 as of December 2, 2013
, and “the past due amount on the loan [was] $85,397.62. ” Brychcova told the court that when she signed the assignments, she worked for Corporation Services Company, a document recording company that contracted with both Eagle Crest and NBH, and that she was authorized to sign documents on behalf of both compa nies.
I n light of Brychcova’s response, Hinojos adv ised the court at the hearing th a t he did not object to Brychcova’s name being deleted from the list of persons to be
restrained . T he court denied the preliminary injunction as to Brychcova and took the matter under submission as to the other parties. On February 13, 2014, the court denied the request for preliminary injunction as to the remaining parties. The court stated :

“ Plaintiff has not established the likelihood of prevailing on the merits at tr ial or that under the circumstances presented preliminary injunctive relief is otherwise warranted.”5

Hinojos appealed the court’s order denying his request for a preliminary injunction in case No. H040853 (hereafter sometimes “ First Appeal ” )

. Proceedings in Trial Court After Hinojos Filed His Notice of Appeal

While the First A ppeal was pending, we took judicial notice of the notice of appeal filed in Hinojos v. Asset Ventures, LLC , c ase No. H042405 , a second appeal filed
in this case (hereafter sometimes “Second Appeal”)

. We then requested supplemental briefing from the parties on the following questions: “Has the real property at issue in both appeals been foreclosed on? In light of the proceedings after the trial court entered
it s .

. . order denying appellant’s request for a preliminary injunction .

. . , is the appeal of
that Order .

. . moot?” Hinojos and NBH responded to our request for supplemental briefing. They both state that the property at issue has not been foreclosed upon. Appellate courts generally disregard matters that occur after the trial court enters the judgment or order that has been appealed. Appellate courts will, however, consider
such matter s if they cause issues on appeal or the entire appeal to become moot. ( Reserve
Ins. Co. v. Pisciotta (1982) 30 Cal.3d 800, 813.) Since we have raised the mootness
issue , we will re view the procedural history in the trial court after the court entered its order denying Hinojos’s request for a preliminary injunction. The following procedural history is based on: (1) the online docket entries in the superior court’s website for this case ( Superior Court Case No. 113CV256853 ) ; (2) Hinojos’s notice of appeal in the Second Appeal (c ase No. H042405 ) ; and (3) the orders att ached thereto , all of which we judicially notice on our own motion . (Evid. Code, § § 452, subd. (d), 459.)
While the parties were waiting for the trial court’s order on the request for a

pr eliminary injunction , NBH, Brychcova, Asset Ventures, and Martinez filed demurrers to the original complaint. Asset Ventures and Martinez also filed a motion to strike.
B efore the hearing on the demurrers, Hinojos filed a first amended complaint, which added Eagle Crest as a defendant and added causes of action for abus e of process against Eagle Crest and slander of title against Asset Ventures and Martinez. Some of the6

defendants filed demurrers to the first amended complaint , which were sustained with
leave to amend. After that, Hinojos filed two more iterations of h is complaint.
In October 2014, after the court sustained demurrers to the second amended complaint with leave to amend , Hinojos filed a request for dismissal without prejudice as to Brychcova. Hinojos filed his third amended complaint in November 2014. NBH responded
with a demurrer and a motion to strike the third amended complaint. In February 2015, the court sustained NBH’s demurrers to each of Hinojos’s causes of action without leave
to amend and concluded that the motion to strike was moot. In Marc h 201 5, the court entered a judgment of dismissal in favor of NBH , which Hinojos has appealed in the Second Appeal

. Eagle Crest never appeared in the action. In December 2014, Hinojos took Eagle Crest’s default. In February 2015, after a prove

- up hearin g, the court entered a default judgment against Eagle Crest, which awarded Hinojos $105,001.38 in damages. Hinojos
has also appealed t hat default judgment in the Second Appeal

. Asset Ventures and Martinez did not respond to the third amended complaint.
I nstead, t heir attorneys filed motions to be relieved as counsel, which were granted in January 2015. Hinojos subsequently took Asset Ventures’s, Martinez’s, and Trustee Corps’s default. In February 2016, after a prove

- up hearing, the court entered a defa ult judgment for Hinojos against Asset Ventures, Martinez, and Trustee Corps. T he records we have judicially noticed do not describe t he relief awarded in that default judgment.

D ISCUSSION
In this appeal

— the First A ppeal

— Hinojos challenge s the trial cour t’s order of February 13, 2014
, denying his request for a preliminary injunction. Be f ore examining
the merits of the appeal, we first determine w hether the appeal is moot

. Hinojos argu es the First Appeal is not moot. He acknowledges that as a result of the default judgment entered in February 2016, “Asset Ventures no longer has the legal right to initiate foreclosure on the property .

. . .” He contends, however, that a7

preliminary injunction is “necess ary to prevent any

. . . adverse action against the property by [NBH].” He also contends a preliminary injunction is necessary for him to collect attorney fees against NBH.
NBH did not foreclose, did not file opposition to the request for a preliminary
i njunction i n the trial court
, and did not file a respondent’s brief on appeal. ( In deed, none
of the defendants have filed a respondent’s brief in the First A ppeal. ) Most of the points raised in NBH’s supplemental letter b rief address the merits of the Se cond Appeal . To the extent NBH has responded to the question whether the First A ppeal is moot , w e understand its argument to be that the First A ppeal is moot becaus e the court sustained its demurrer to the third amended compla int without leave to amend.
T he other defendants have not responded to our request for supplemental briefing

. Legal Principles Regarding Mootness

“ A case is moot when the reviewing court cannot provide the parties with practical, effectual relief. [Citation.] In such cases, the appe al generally should be
dismissed. ( Ibid. ) But even if a case is technically moot, the court has inherent power to decide it where the issues presented are important and of continuing interest. [Citation.]” ( City of San Jose v. International Assn. of Firefighters, Local 230 (2009) 178 Cal.App.4th 408, 417

- 4 18 .)

“ When no effective relief can be granted, an appeal is moot and will be dismissed. [Citation.] ‘ “ ‘ [T]he duty of this court .

. . is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions, or to declare principles or rules of law which cannot affect the
matter in issue in the case before it. ’ ” [Citation.] .

. . “ [W]hen, pending an appeal from
the judgment of a lower court, and without any fault of the [respondent], an event occurs which renders it impossible for [the] court, if it should decide the case in favor of [ the appellant], to grant him [or her] any effectual relief whatever, the court will not proceed to a formal judgment, but will dismiss the appeal. [Citations.] ” ’ ” ( In re Jessica K

.8

(2000) 79 Cal.App.4th 1313, 1315

- 13 16 , quoting Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967) 67 Cal.2d 536, 541. )

Nature of a Preli minary Injunction

A prelimina ry injunction is an interim remedy designed to preserve the status quo until a final judgment has been entered. (6 Witkin, Cal. Procedure (5th ed. 2008) Provisional Remedies, § 285, p. 225, citing Kendall v. Foulks (1919) 180 Cal. 171, 173.) “In determining the propriety of granting a preliminary injunction, the trial court does not decide the case on its merits; it merely decides whether or not a defendant’s activities should be limited during the period before a final judgm ent is made.” ( People e x rel. Gow v. Mitchell Brothers’ Santa Ana Theater (1981) 118 Cal.App.3d 863, 872 .)
A preliminary injunction only operates up to the entry of final judgment. “At that time, either a permanent injunction is granted and the preliminary injunction is merged with it, or a permanent injunction is denied and the preliminary injunction cease s to have any effect.” ( 6 Witkin, supra , at p. 226, citing Shahen v. Superior Court (1941) 46 Cal.App.2d 187, 188 and other authorities.) The permanent injunction may, and often does, differ from the preliminary injunction in its effect and terms. ( San Diego Water Co.

v. P acific Coast St e amshi p Co. (1894) 101 Cal. 216, 220

- 221.)

Analysis

When a trial court sustains a demurrer without leave to amend as to causes of action that might have supported a preliminary injunction in favor of a plaintiff, that plaintiff’s appeal from the order denying the preliminary injunction is moot. ( MaJor v.
Miraverde Homeowners Assn

. (1992) 7 Cal.App.4th 618, 623) To avoid this result, the plaintiff may request a stay of trial court proceedings while the appeal from the denial of the preliminary injunction is pe nding. ( Id. at pp. 623

- 624.) Hinojos did not request a stay.9

Since the trial court sustained NBH’s demurrer to Hinojos’s third amended complaint without leave to amend, Hinojos’s appeal from the order denying the preliminary injunction is moot as to NB H. After Hinojos filed his F irst A ppeal, the trial court entered a final judgment as to
each of the defendants , except Brychcova

. Hinojos voluntarily dismissed Brychcova

. NBH obtained a judgment of dismissal after the trial court sustained its demurrers to the third amended complaint without leave to amend. And Hinojos obtained default judgments against Eagle Crest in February 2015, and against Asset Ventures, Martinez, and Trustee Corps in February 2016. Each of these judgments was a final judgment. Upon entry of those judgments, a preliminary injunction would have cease d to have any
effect. Since the trial court has finally adjudicated Hinojos’s claims as to each of the defendants, except Brychcova, even if we were to reverse the trial court’s order denying the request for a preliminary injunction, it would be impossible to grant Hinojos any
effectual relief, becaus e the time during which the preliminary inju nction would operate
has passed. And a pre liminary injunction would not have any effect as to Brychcova,
since she was dismissed from the action. For the s e reasons, we conclude this appeal is

moot. Hinojos argues that a preliminary injunction is “necessary to prevent any

. . . adverse action aga inst the property by [NBH].” But NBH is not the party that foreclosed, and after it assigned its interest to Asset Ventures, it did not have the right to foreclose. Hinojos also argues that a preliminary injunction is necessary for him to collect

attorne y fees against NBH pursuant t o : (1) Civil Code section 1717, which governs recovery of attorney fees “in any action on a contract”; (2) Code of Civil Procedure
section 1021.5 , the private attorney general statute; and (3) Civil Code sections 2924.12,
subd ivision (i), and 2924.19, subdivision (h) , which are part of t he HBOR

. None of these statutes provide for an award of attorney fees upon the grant of a preliminary injunction.
Under Civil Code section 1717 , fees are awarded to a “prevailing party.” Unde r Code of
Civil Procedure section 1021.5 , fees are awarded “to a successful party.” And under10

Civil Code sections 2924.12, subdivision (1), and 2924.19, subdivision (h), fees are awarded to a “prevailing borrower.” Whether a party or a borrower has preva iled or succeeded is generally determined at the conclusion of the litigation, after a preliminary injunction has been dissolved. Given the interim nature of a preliminary injunction, appellate review of the trial court’s order denying the preliminary inj unction is not necessary to determine whether Hinojos may recover attorney fees. We therefore conclude that a preliminary injunction is not necessary for Hinojos to collect attorney fees against NBH.

D ISPOSITION
The appeal is dismissed as moot. The part ies shall bear their own costs on appeal._______________________________ Márquez, J.

WE CONCUR:

____________________________________________ Bamattre

- Manoukian , Acting P. J.

______________________________ Mihara , J.

Hinojos v. Asset Ventures LLC et al. No. H040853