Court Opinion

ID: 6216896
Source: CourtListenerOpinion
Date Created: 2022-02-09 21:02:00.862429+00
Date Added: 2024-06-11T08:57:11.589357
License: Public Domain

Filed 2/9/22 Ghalehtak v. Fay Servicing CA1/1
                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 publi-
cation 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 This opinion has not been certified for publication or or-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

                                      FIRST APPELLATE DISTRICT

                                                    DIVISION ONE

 FARID GHALEHTAK et al.,
              Plaintiffs and Appellants,                                 A161795

 v.                                                                   (Alameda County
 FAY SERVICING, INC.,                                                 Super. Ct. No.
                                                                    RG18898872)
              Defendant and Respondent.

                                       MEMORANDUM OPINION1
          Plaintiffs and appellants have spent years challenging the nonjudicial
foreclosure of their residential property. They filed two cases in federal court
in an effort to halt foreclosure, both of which were unsuccessful.2 They then

        This case is appropriately resolved by way of memorandum opinion
          1

pursuant to pursuant to California Standards of Judicial Administration,
section 8.1, subdivisions (1) and (3).
         In their first case (no. 3:15-cv-05821-LB), filed in December 2015,
          2

plaintiffs sought “rescission” of their mortgage for alleged “defective
securitization,” asserting numerous federal and state law claims. The federal
court dismissed all the federal claims on the merits and declined to exercise
pendent jurisdiction over the remaining state-law claims.
      In their second case (no. 3:17-cv-05976-EMC), filed in October 2017,
plaintiffs challenged the then-ongoing nonjudicial foreclosure proceedings on
the ground Fay Servicing, LLC and Trustee Corps lacked clear title to their
property due to an allegedly improper assignment of the deed of trust from

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turned to the state courts and filed the instant case after the trustee’s sale,
asserting numerous state law causes of action. The trial court sustained the
defendants’ demurrer on a variety of grounds, including res judicata and
collateral estoppel. We affirmed the judgment of dismissal on January 28,
2020 (No. A156227).3
      Ten months after we affirmed the judgment of dismissal, plaintiffs,
representing themselves, returned to the trial court with a “Motion For
Equitable Relief From Judgment On The Grounds Of Fraud.”4 (Some
capitalization omitted.) Plaintiffs maintained that “through a review of
documents recorded in their chain of title on their Property,” they found
“new” recorded instruments that Sahara Property Management, LLC was
“not the true beneficiaries” of the note and deed of trust. According to
plaintiffs, these new records showed that defendants had procured the
judgment of dismissal through factual misrepresentations about the
foreclosure process.
      Sahara apparently entered the picture at the time of the trustee’s sale,
in May 2018. The “Trustee’s Deed Upon Sale,” prepared on instructions by
Wilmington Trust, National Association, inadvertently named Sahara as the

Mortgage Electronic Registration Systems, Inc. (MERS) to FNBN I, LLC.
Plaintiffs asserted one federal and numerous state law claims. The federal
court dismissed all the claims on the merits and on res judicata grounds. The
judgment was affirmed on appeal to the Ninth Circuit.
      3We denied rehearing on February 25, 2020. Plaintiffs apparently
attempted to file a petition for review but was unsuccessful in doing so.
      4  Plaintiffs disclaim any reliance on Code of Civil Procedure section
473, subdivision (d), pursuant to which a motion to vacate may be granted
more than six months after a judgment is entered, but only if the judgment is
void of its face. (See Pittman v. Beck Park Apartments Ltd. (2018)
20 Cal.App.5th 1009, 1021.)

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foreclosing beneficiary and grantee at the trustee’s sale, when, in fact,
Wilmington had made the credit-bid at the sale. This error was discovered
the following year, and a “Corrective Trustee’s Deed Upon Sale” was recorded
on August 28, 2019.5
      Plaintiffs supported their motion for equitable relief with a proffered
32-page affidavit by one Richard Kalinoski, a Florida attorney who claims to
be an expert in “foreclosure defense litigation,” with extensive knowledge of
“the securitization process.” As far as we can discern, plaintiffs have
included only the first 23 pages of this affidavit in the record. In the portions
that are in the record, Kalinoski opined the documentation associated with
the mortgage and foreclosure was rife with problems that should have
precluded foreclosure and sale. He seemingly summed up on page 22,
stating, “Simply said, since there was no evidence that SAHARA held any
interest under the note in 2018 at the trustee’s sale, and considering the
evidence that MERS could not lawfully transfer an interest in the note or
mortgage to FNBA in 2015, due to the fact that MERS had no interest in the
2007 note to transfer, FNBA could not legally transfer interest in the subject
note” to Wilmington in 2017.6

      5 In the meantime, in February 2019, Sahara had filed an unlawful
detainer action to oust plaintiffs from the property. This action was
dismissed in November 2019, after the trustee’s deed was corrected and
Wilmington Trust had filed an unlawful detainer action.
      6 Plaintiffs had already filed this affidavit, or a variation thereof, and
advanced their extrinsic fraud argument in Wilmington Trust’s unlawful
detainer action, challenging Wilmington’s right to possession of the property.
They had also advanced their extrinsic fraud argument in support of their
petition for rehearing of our decision affirming the judgment of dismissal.

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      Defendants filed written opposition, and after plaintiffs failed to
contest the trial court’s tentative ruling denying their motion on a number of
grounds, the court adopted its tentative as its final ruling.7
      We need not, and do not, address all of the reasons why the trial court
denied plaintiffs’ motion, since one of them—the fact plaintiffs failed to make
any showing they ever tendered the amount owing, or even offered to tender
the amount owing, on the debt—is, in and of itself, dispositive.
      To prevail in any effort to collaterally attack a judgment on the ground
of extrinsic fraud,8 the moving party must show that he or she had a
meritorious case that he or she was deprived of presenting. (See Hudson,
supra, 68 Cal.App.5th at p. 664 [“ ‘moving party must demonstrate that he or
she has a meritorious case, that [they have] a satisfactory excuse for not
presenting a defense to the original action and that [they] exercised diligence
in seeking to set aside the default once the fraud had been discovered’ ”];
Kuehn, supra, 85 Cal.App.4th at p. 831 [“before a party may invoke the aid of

      7 The trial court expressly stated that it considered Kalinoski’s
declaration, overruling defendant’s “ ‘blunderbuss objections’ ” which the
court criticized as oppressive and unhelpful. The court concluded, however,
that on careful examination the documentation did not support Kalinoski’s
assertion that the chain of transactions did not allow for lawful foreclosure.
We also observe that Kalinoski’s claim—that the entire chain of assignments
leading up to the trustee’s sale was defective—had been rejected on the
merits in plaintiffs’ prior federal lawsuits.
      8 We need not decide whether the asserted fraud plaintiffs are
complaining about is extrinsic or intrinsic in character. Even assuming it
qualifies as extrinsic fraud, which is the only kind of fraud that will support
equitable relief from a judgment (see Hudson v. Foster (2021) 68 Cal.App.5th
640, 663-664 (Hudson) [extrinsic, rather than intrinsic, fraud will support
equitable relief from a judgment]; Kuehn v. Kuehn (2000) 85 Cal.App.4th 824,
831-833 (Kuehn) [same]), plaintiffs failed to make the showing required for
equitable relief, as we explain, infra.

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equity for relief from a judgment, she must not only allege matters wherein
the judgment was fraudulently obtained, but must also allege that she has a
meritorious case, so that if the facts were proven a different result would
ensue”].) While this does not require the moving party to “demonstrate with
certainty that a different result would [be] obtain on retrial,” the party must
present “facts indicating a sufficiently meritorious” case to warrant the
exercise of equitable judicial power to reopen a final judgment. (In re
Marriage of Park (1980) 27 Cal.3d 337, 346.)
      The elements of a wrongful foreclosure cause of action are: “ ‘ “(1) [T]he
trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive
sale of real property pursuant to a power of sale in a mortgage or deed of
trust; (2) the party attacking the sale (usually but not always the trustor or
mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or
mortgagor challenges the sale, the trustor or mortgagor tendered the amount
of the secured indebtedness or was excused from tendering.” ’ ” (Sciarratta v.
U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 561-562; accord,
Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017)
13 Cal.App.5th 757, 782.)
      The third element, commonly known as the tender rule, requires that
“a plaintiff seeking to set aside an irregular sale must allege tender of the full
amount of the loan to maintain any cause of action that either is based on
the wrongful foreclosure allegations or seeks redress from that foreclosure.”
(Turner v. Seterus, Inc. (2018) 27 Cal.App.5th 516, 525, boldface added.)
      As the trial court observed in its tentative ruling—which plaintiffs did
not contest and which the court then adopted as its final ruling—plaintiffs, in
connection with their motion, “present[ed] no evidence that they are prepared
to tender the unpaid mortgage obligation, which by their own admission they

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have not paid since May 2012, or any valid reason why they should be
excused from making such a tender.” This deficiency, as the foregoing cases
make clear, is fatal to a “wrongful foreclosure” case no matter what theory or
particular cause of action plaintiffs may claim entitles them to redress for the
allegedly improper sale of their property. Accordingly, plaintiffs failed to
establish one of the three essential requirements for equitable relief on the
basis of supposed extrinsic fraud—that they had a meritorious case.
      As defendants point out, plaintiffs also have not demonstrated how
they can get around the doctrines of res judicata and collateral estoppel,
which were the grounds on which this court affirmed the judgment of
dismissal plaintiffs now seek to overturn. That an error was made in the
trustee’s deed of sale issued after the foreclosure and sale—and was
corrected—does not alter the essence of their wrongful foreclosure claim, no
matter how it is styled—namely, that other than the original lender, no
entity had a right to enforce the debt obligation and institute foreclosure
proceedings because none had “ownership” of the loan. As the first federal
district court characterized their multiple claims, they maintained there had
been a “defective securitization of the mortgage.” The second federal court, in
turn, identified the entire chronology of changes in the “identity of the
beneficiary, servicer, and trustee of the mortgage loan,” and rejected all of
plaintiffs’ claims (one federal and seven based on state law) seeking to halt
the foreclosure process on the ground the entities engaged in that process,
Fay and Trustee Corps, had no right to possession because the initial
assignment from MERS to Trustee Corps. purportedly “broke the chain of
title to the loan.” That is still the heart of plaintiffs’ claim. As we stated in
our prior opinion, the trial court correctly ruled plaintiffs cannot relitigate
these issues again—yet that is ultimately what plaintiffs sought to do by way

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of their motion for equitable relief from the judgment, as evidence by
Kalinoski’s affidavit filed in support of their motion. Indeed, much of their
brief on appeal from the denial of that motion is devoted to rearguing the
merits of their claim that no entity ever established it had “ownership” of the
debt and was entitled to proceed with nonjudicial foreclosure. As we
explained in our prior opinion, plaintiffs cannot continue to litigate these
claims.
                                DISPOSITION
      The order denying plaintiffs’ “Motion For Equitable Relief From
Judgment On The Grounds Of Fraud” (some capitalization omitted) is
AFFIRMED. Defendants to recover costs on appeal.

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                                         _________________________
                                         Banke, J.

We concur:

_________________________
Margulies, Acting P.J.

_________________________
East, J.*

*Judge of the San Francisco Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.

A161795, Ghalehtak et al v. Fay Servicing, LLC

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