Filed 10/13/15 Cole v. J.P. Morgan Chase 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

KIRSTEN COLE,

Plaintiff and Appellant,

v.

J.P. MORGAN CHASE, N.A.,

Defendant and Respondent.

 B258403

 (Los Angeles County Super. Ct. 

 No. BC496591)

APPEAL from a judgment of the Superior Court of Los Angeles, Randolph 

Rogers, Judge. Affirmed.

The Law Offices of Duane R. Folke and Duane R. Folke for Plaintiff and 

Appellant.

Keesal, Young & Logan, David D. Piper, Esther E. Cho, for Defendant and 

Respondent. 

______________________
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Plaintiff and appellant Kirsten Cole appeals from a judgment of dismissal 

following an order sustaining a demurrer in favor of defendant and respondent J.P. 

Morgan Chase Bank, N.A. (Chase Bank), in this action arising out of a postponed 

foreclosure sale on residential property and a subsequent offer for a loan modification. 

Cole contends her claims are not barred by the doctrine of res judicata because they arose 

after her prior action was dismissed. Specifically, Cole argues that her claims arose when 

Chase Bank sent her an approval letter outlining a trial period payment plan for a loan 

modification. We conclude the trial court correctly sustained the demurrer of Chase 

Bank without leave to amend because Cole’s claims in the prior and current action 

constitute “identical causes of action for purposes of claim preclusion.” (Boeken v. Philip 

Morris USA, Inc. (2010) 48 Cal.4th 788, 797.) We affirm the judgment. 

FACTUAL AND PROCEDURAL HISTORY

Because we are reviewing a judgment entered after the sustaining of a demurrer 

without leave to amend, the following factual statement is drawn principally from Cole’s 

second verified amended complaint. We assume the truth of all factual allegations 

properly pleaded in Cole’s operative complaint, as well as matters that may be judicially 

noticed. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081; Code Civ. 

Proc., § 430.30, subd. (a).)

Subject Property

This case involves real property located at 6201 Shannon Valley Road, Acton, 

California, 93510 (the subject property). Cole acquired title to the subject property by 

grant deed, which was recorded on November 14, 2006. She obtained a residential loan 

in the amount of $588,000 (subject loan) secured by a deed of trust encumbering the 

subject property. The deed of trust identified Washington Mutual Bank, FA (WaMu) as 
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the lender and Cole as the borrower. On September 25, 2008, Chase Bank acquired 

assets and liabilities of WaMu from the Federal Deposit Insurance Corporation (FDIC), 

including the subject loan. 

Cole defaulted on her loan. A notice of default and election to sell under deed of 

trust was recorded on February 17, 2009. The notice confirmed that the subject loan was 

$18,396.53 in arrears. A notice of trustee’s sale was recorded on May 26, 2009. A 

second notice of trustee’s sale was recorded on December 8, 2010. 

Proceedings in the Prior Action

On December 20, 2010, Cole initiated the prior action against Chase Bank alleging 

causes of action for breach of contract, common counts, and quiet title. (Cole v. J.P 

Morgan Chase Bank (Super. Ct. L.A. County, 2011, No. MC022170).) Cole’s complaint 

alleged that Chase Bank “represented to [Cole] that the property which it took as a 

security interest in lending money to [Cole] was a single family dwelling” and that “it 

was discovered that the property which was held as as [sic] security interest for the 

indebtedness was not a single family dwelling as represented by [Chase Bank].” Cole 

attached a Los Angeles County Application for Building Permit filed by a previous 

owner of the subject property in July 1986, requesting a permit to build a barn on his 

residential property. In a letter attached to her complaint, Cole’s counsel stated: “At the 

time of the listing of the property, it was concealed from the buyer that the single family 

dwelling was, in fact, a converted barn. It was disclosed to the buyer that there were 

some improvements that had been done without permits, but it was not disclosed to the 

buyer that a certificate of occupancy had not been issued for the structure. [¶] . . . Ms. 

Cole has learned that it would be financially impractical to bring the property into a 

condition where a certificate of occupancy can be issued.” 

On July 11, 2011, Cole filed a verified first amended complaint in the prior action 

alleging the same allegations against Chase Bank and adding a negligence claim. As to 
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the negligence cause of action, Cole alleged that Chase Bank’s predecessor, WaMu, and 

by extension, Chase Bank, “was negligent in appraising the property in that the property 

was not a single family dwelling and its value was not what it was represented and was 

not sufficient to support the purchase price offered by [Cole]. The true facts were that a 

certificate of occupancy was not issued for human occupancy of the property and 

therefore, it could not be utilized as required by [Cole] for her occupancy of the 

property.” On July 28, 2011, Chase Bank filed a demurrer to Cole’s first amended 

complaint. On August 23, 2011, the trial court sustained Chase Bank’s demurrer with 

leave to amend and ruled that Cole “may replead her causes of action for Breach of 

Contract, Common Counts, Quiet Title and Negligence and must do so by September 23, 

2011.” 

On October 14, 2011, Cole filed an untimely and unverified second amended 

complaint adding causes of action for unjust enrichment/imposition of constructive trust 

and declaratory relief. Cole also replead her claim for quiet title. Chase Bank filed a 

demurrer to Cole’s second amended complaint. On November 17, 2011, the trial court 

sustained the demurrer in its entirety without leave to amend and dismissed the prior 

action with prejudice. In the statement of decision, the trial court “carefully explained 

how each of [Cole’s] causes of action lacked legal foundation. In addition, the Court 

further noted that, even had [Cole’s] contentions been meritorious, her claims were 

against the FDIC, WaMu’s immediate successor in interest, and not against [Chase 

Bank], which purchased certain assets, including the Deed of Trust at issue, but did not 

assume the corresponding liabilities, of WaMu. Those liabilities expressly remained with 

the FDIC.” 

On December 12, 2011, Chase Bank filed a notice of entry of judgment. 

The Trial Period Plan

On November 1, 2012, Chase Bank informed Cole by letter that she had been 
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approved for a Trial Period Plan (TPP). The TPP consisted of payments of $1,653.19 due 

on December 1, 2012, January 1, 2013, and February 1, 2013. The letter stated that the 

TPP is not a permanent modification and Cole must make all three payments on time 

before Chase Bank can offer her a final loan modification. If Cole failed to comply with 

the terms of the plan, Chase Bank would commence foreclosure proceedings. On 

November 30, 2012, Cole sent a check to Chase Bank for $1,653.19 to only cover her 

first payment and expressly conditioned the cashing of the check upon the “opportunity 

to address the issues brought up by” Cole’s lawsuit initiated that day. Cole failed to 

make any further payments on the TPP. 

Current Action

On November 30, 2012, Cole filed a verified complaint in the current action 

against Chase Bank alleging causes of action for (1) declaratory relief, (2) strict liability 

in tort for sale of “defective product,” (3) breach of warranty of title and habitability, (4) 

quiet title, (5) breach of fiduciary duty, (6) violation of California Business and 

Professions Code section 17200 et seq., and (7) promissory estoppel/promissory fraud. 

The complaint alleged that after the prior action was dismissed with prejudice, Chase 

Bank had offered Cole a TPP in furtherance of a potential loan modification. Cole 

argued that Chase Bank did so without remedying the claims made by her in the prior 

action. Specifically, Cole argued that, concurrent with any loan modification, Chase 

Bank was required to either improve the property to the point that it would be eligible for 

an occupancy permit as a “Simple Family Residence,” or reduce the principal of the 

outstanding loan of $564,945 to the current fair market value of $135,933. 

On February 13, 2013, Cole filed her first amended verified complaint against 

Chase Bank and Investors Title Insurance Company1 alleging the same seven causes of 

 

1 Cole listed “Investors Title Insurance Company, an underwritten title agent of 

First American Title Company of California” as a named defendant in her first amended 
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action, along with new causes of action for negligence in performance of an undertaking 

and breach of warranty of title in provision of title insurance. Investors Title Insurances 

Company was the only named defendant alleged in the two new causes of action. The 

material allegations against Chase Bank were unchanged. 

On June 21, 2013, Chase Bank filed a demurrer to the first amended complaint, 

arguing that Cole’s claims are barred by the doctrine of res judicata, Chase Bank is not 

responsible for WaMu’s origination or servicing conduct, and Cole’s claims are timebarred. It further argued Cole fails to state a claim for each cause of action alleged 

against Chase Bank. 

On August 22, 2013, Cole filed her opposition to the demurrer, contending she is 

not procedurally barred under the doctrine of res judicata from bringing her claims, and 

Chase Bank is liable for its actions in connection with her loan modification. 

Furthermore, Cole’s claim for breach of contract/promissory estoppel are not time-barred 

because they occurred immediately prior to the filing of this case and are supported by 

recent California case law. Cole is entitled to proceed with a quiet title cause of action 

based upon a finding that Chase Bank should be responsible for fixing her current 

circumstances. Chase Bank is liable for breach of fiduciary duty based on its failure to 

act in a manner keeping with its duties as mortgagor. Cole’s claim for violation of 

California Business and Professions Code section 17200 is well plead and applicable 

under California law. Lastly, “declaratory relief is available where as in this case [Cole] 

has fully set forth . . . the basis for ‘Declaratory Relief.’” 

In its reply filed on August 28, 2013, Chase Bank reiterated that Cole’s claims are 

barred by the doctrine of res judicata. Cole’s causes of action for negligence in 

performance of an undertaking and breach of warranty of title in provision of title 

insurance are not alleged against Chase Bank. Cole did not plead a cause of action for 

 

verified complaint. On April 11, 2013, First American Title Insurance Company (First 

American) was substituted for Doe 1. Cole subsequently filed a request for dismissal and 

a dismissal was entered as to First American. 
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breach of contract and therefore any arguments relating to such a cause of action are 

irrelevant. Moreover, Cole’s promissory estoppel claim is time-barred and her remaining 

claims also fail. 

On November 12, 2013, the trial court sustained the demurrer with leave to amend

until December 2, 2013, finding that “the present complaint is barred by the doctrine of 

res judicata.” The court reasoned that the claims made in the present action concerned 

the same harms as alleged in the prior action, “the failure to provide a loan modification 

and to discover the lack of a certificate of occupancy.” Additionally, the present action 

was between the same parties and therefore barred by the final judgment on the merits 

entered in the prior action. 

On January 22, 2014, Cole filed an untimely and verified second amended 

complaint against Chase Bank, removing the negligence and breach of title insurance 

causes of action, and also removing Investors Title Insurance Company as a named 

defendant. Except for the removal of claims made against Investors Title Insurance 

Company, the material allegations against Chase Bank remained unchanged. Cole 

alleged causes of action for (1) declaratory relief, (2) strict liability in tort for sale of 

“defective product,” (3) breach of warranty of title and habitability, (4) quiet title, (5) 

breach of fiduciary duty, (6) violation of California Business and Professions Code 

section 17200 et seq., and (7) promissory estoppel/promissory fraud. Cole stated that she 

is the owner of the subject property and has been in a mortgagor-mortgagee relationship 

with Chase Bank since she purchased the subject property on November 14, 2006. She 

alleged the loan modification agreement identified the subject property as a single family 

residence, however, the County of Los Angeles Recorder’s Office identifies the property 

as a barn without a occupancy permit. Cole contends Chase Bank must “rectify in its’ 

new contractual relationship including the actual legal status of said real property and/or 

make the loan ‘modification’ commensurate with the current legal status of the subject 

real property.” Cole argued she is left “in a set of circumstances whereupon the 

completion of the ‘Modification’ process with the payments of $1,653.19 . . . she will 
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find herself to be the ‘Owner’ of real property that is without ‘Marketable Title’ as 

represented in the contract.” 

On February 25, 2014, Chase Bank filed its demurrer to the second verified 

amended complaint. Chase Bank contended Cole’s claims are barred by the doctrine of 

res judicia, it is not responsible for WaMu’s origination or servicing, and Cole’s claims 

are time-barred. Chase Bank further argued Cole fails to plead sufficient facts for each 

cause of action. In its request for judicial notice filed concurrently with the demurrer, 

Chase Bank attached the November 14, 2006 grant deed and subject loan secured by the 

deed of trust; September 25, 2008 Purchase and Assumption Agreement between Chase 

Bank and FDIC; February 17, 2009 notice of default and election to sell under deed of 

trust; May 26, 2009 notice of trustee’s sale; and December 8, 2010 second notice of 

trustee’s sale. Chase Bank also requested judicial notice of the moving papers in the 

prior action, including but not limited to Cole’s second amended complaint, Chase’s 

demurrer, and the trial court’s statement of decision granting the demurrer to the second 

amended complaint. 

Cole filed an opposition to the demurrer on May 20, 2014, arguing her claims are 

not barred by the doctrine of res judicata, because the current case involves a loan 

modification agreement which was not the subject of any prior litigation. 

The trial court sustained the demurrer in its entirety without leave to amend and 

dismissed the action against Chase Bank with prejudice. Judgment was entered on June 

18, 2014, and a notice of entry of judgment was entered on June 24, 2014, in favor of 

Chase Bank. Cole filed a notice of appeal on August 22, 2014. 
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DISCUSSION

Standard of Review 

“A demurrer tests the legal sufficiency of the factual allegations in a complaint. 

We independently review the sustaining of a demurrer and determine de novo whether 

the complaint alleges facts sufficient to state a cause of action or discloses a complete 

defense. [Citation.] We assume the truth of the properly pleaded factual allegations, 

facts that reasonably can be inferred from those expressly pleaded and matters of which 

judicial notice has been taken. [Citation.] We construe the pleading in a reasonable 

manner and read the allegations in context. [Citation.] We must affirm the judgment if 

the sustaining of a general demurrer was proper on any of the grounds stated in the 

demurrer, regardless of the trial court’s stated reasons. [Citation.]” (Siliga v. Mortgage 

Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 81.) 

“It is an abuse of discretion to sustain a demurrer without leave to amend if there 

is a reasonable probability that the defect can be cured by amendment. [Citation.] The 

burden is on the plaintiff to demonstrate how the complaint can be amended to state a 

valid cause of action. [Citation.] The plaintiff can make that showing for the first time 

on appeal. [Citation.]” (Siliga v. Mortgage Electronic Registration Systems, Inc., supra,

219 Cal.App.4th at p. 81.)

Res Judicata/Claim Preclusion

Cole contends her claims are not barred by res judicata because she was not trying 

to revive any prior claim, but was in fact addressing claims that arose from the TPP

offered in a November 2012 letter by Chase Bank. We hold that the trial court properly 

sustained Chase Bank’s demurrer because each cause of action was barred by the “claim 

preclusion” concept embodied in the doctrine of res judicata. 
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The doctrine of res judicata has frequently been used “as an umbrella term 

encompassing both claim preclusion and issue preclusion.” (DKN Holdings LLC v. 

Faerber (2015) 61 Cal.4th 813, 823 (DKN).) Our Supreme Court recently stated that in 

order “[t]o avoid future confusion, we will follow the example of other courts and use the 

terms ‘claim preclusion’ to describe the primary aspect of the res judicata doctrine and 

‘issue preclusion’ to encompass the notion of collateral estoppel.” (Id. at p. 824.) “Claim 

preclusion ‘prevents relitigation of the same cause of action in a second suit between the 

same parties or parties in privity with them.’ [Citation.] Claim preclusion arises if a 

second suit involves: (1) the same cause of action (2) between the same parties (3) after a 

final judgment on the merits in the first suit. [Citations.] If claim preclusion is 

established, it operates to bar relitigation of the claim altogether.” (Ibid., italics omitted.) 

Claim preclusion “benefits both parties and the courts because it ‘seeks to curtail multiple 

litigation causing vexation and expense to the parties and wasted effort and expense in 

judicial administration.’ [Citation.]” (Mycogen Corp. v. Monsanto Co. (2002) 28 

Cal.4th 888, 897.) Issue preclusion “prevents relitigation of previously decided issues.”

(DKN, supra, 61 Cal.4th at p. 824.) “[I]ssue preclusion applies: (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 p. 825.)

We are concerned here with claim preclusion. Cole does not dispute that the prior 

and current actions involved the same parties and the judgment in the prior action was

final on the merits. The only issue on dispute is whether the current action involves the 

same cause of action. “To determine whether two proceedings involve identical causes 

of action for purposes of claim preclusion, California courts have ‘consistently applied 

the “primary rights” theory.’ [Citation.] Under this theory, ‘[a] cause of action . . . arises 

out of an antecedent primary right and corresponding duty and the delict or breach of 

such primary right and duty by the person on whom the duty rests. “Of these elements, 

the primary right and duty and the delict or wrong combined constitute the cause of 
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action in the legal sense of the term . . . .”’ [Citation.]” (Boeken v. Philip Morris USA, 

Inc., supra, 48 Cal.4th at pp. 797-798.) “The cause of action is the right to obtain redress 

for a harm suffered, regardless of the specific remedy sought or the legal theory (common 

law or statutory) advanced. [Citations.]” (Id. at p. 798.) 

In both actions, Cole alleged she was harmed because the subject property did not 

have an occupancy permit for a single family dwelling, and therefore, at the time of 

purchase she paid far above fair market value. Cole attempts to use the TPP as a vehicle

to relitigate the same harms resolved against her in the prior action by arguing the TPP 

raised new claims by identifying the subject property as a single family dwelling. 

We reject Cole’s argument for two reasons. First, the TPP contains boilerplate 

language explaining its terms and conditions; it does not address whether the subject 

property is referred to as a single family dwelling. Second, it is irrelevant that the 

specific remedy sought in the current action was a reduction on the principal on the 

outstanding loan as opposed to a reduction on the “true value” of the subject property 

sought in the prior action. Both actions seek redress for Cole’s assertion that she thought 

she was buying a residence and ended up with a barn, and her belief that somehow the 

successor to the original lender is liable for her situation. The two actions are based on 

the same primary right, and Cole has merely split her causes of action. The trial court 

properly sustained the demurrer to the second amended complaint and entered judgment 

in favor of Chase Bank.

Denial of Leave to Amend

The trial court’s decision to sustain the demurrer without leave to amend is a 

matter of discretion. Because Cole has failed to provide a reporter’s transcript or other 

suitable substitute in the record on appeal, we do not know what matters were argued or 

considered by the trial court at the hearing on the demurrer. “All intendments and 

presumptions are indulged to support [the trial court’s decision] on matters as to which 
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the record is silent, and error must be affirmatively shown.” (Denham v. Superior Court

(1970) 2 Cal.3d 557, 564.) Cole has the burden of overcoming the presumption of 

correctness. To do so, she must provide this court with an adequate record demonstrating 

the alleged abuse of discretion. Because Cole did not provide an adequate record, we 

apply the presumption that the trial court properly denied leave to amend. 

Moreover, “‘[Cole] must show in what manner [she] can amend [the] complaint 

and how that amendment will change the legal effect of [her] pleading. [Citation.]’ 

[Citation.]” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) In her opening brief, 

Cole did not attempt to demonstrate that her operative complaint could be amended. No 

reply brief was filed. There is no basis on the record presented for granting leave to 

amend on appeal.

DISPOSITION

The judgment is affirmed. Respondent J.P. Morgan Chase Bank, N.A. is awarded 

its costs on appeal.

KRIEGLER, J. 

We concur: 

TURNER, P. J.

BAKER, J.