Court Opinion

ID: 6341696
Source: CourtListenerOpinion
Date Created: 2022-05-18 01:01:37.910998+00
Date Added: 2024-06-11T09:11:21.359109
License: Public Domain

Filed 5/17/22 Raiano v. Ocwen Loan Servicing, LLC CA2/3
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 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 This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115.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

                           SECOND APPELLATE DISTRICT

                                        DIVISION THREE

 HUMBERTO RAIANO,                                                 B311671

           Plaintiff and Appellant,                               (Los Angeles County
                                                                  Super. Ct.
           v.                                                     No. 19VECV00832)

 OCWEN LOAN SERVICING, LLC,

           Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Huey P. Cotton, Jr., Judge. Affirmed.
     Tamer Law and Steven Michael Tamer for Plaintiff and
Appellant.
     Houser, Robert W. Norman, Jr., and Neil J. Cooper for
Defendant and Respondent.
                     ——————————
       Humberto Raiano appeals from a judgment after the trial
court sustained Ocwen Loan Servicing, LLC’s (Ocwen) demurrer to
his third amended complaint without leave to amend. We affirm.
                          BACKGROUND
       Because this appeal comes to us after the trial court sustained
a demurrer without leave to amend, we recite the facts as alleged in
the third amended complaint and those matters that have been
judicially noticed.
       In 2006, Rosa Portillo purchased a house in Los Angeles (the
property) from Raiano. Portillo obtained a loan secured by a first-
position deed of trust against the property. Ocwen is the loan
servicer and The Mortgage Law Firm, PLC (MLF) is the trustee for
the purchase money loan. Portillo subsequently borrowed money
from Raiano, and the loan was secured by a junior deed of trust on
the property. In 2015, Portillo defaulted on the purchase money
loan and the loan from Raiano. Raiano foreclosed on and took
possession of the property.
       In March 2016, Ocwen recorded a notice of default and, in
November 2017, MLF recorded a notice of trustee’s sale on behalf of
the first lienholder. In December 2017, Raiano sued Ocwen and
MLF, alleging a violation of Civil Code1 section 2924b,
subdivision (c)(2)(A) and(B) on the ground that they failed to serve
him with the notice of default and notice of trustee’s sale. Although
it is not clear from the record, Ocwen represented, and Raiano did
not dispute, that the parties settled the prior lawsuit after Ocwen

      1 All   further statutory references are to the Civil Code.

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agreed to rescind the notice of default and notice of trustee’s sale.2
       In August 2018, Ocwen recorded a new notice of default and,
in May 2019, MLF recorded a notice of trustee’s sale. In June 2019,
Raiano sued Ocwen and MLF, alleging violations of sections 2924b
and 2923.4 et seq. (California Homeowner Bill of Rights) (HBOR) on
the ground that he did not receive the new notice of default and
notice of trustee’s sale. Ocwen demurred, arguing Raiano failed to
allege that he suffered prejudice from the lack of notice because he
had actual knowledge of the default and trustee’s sale for years yet
did not pay off the loan or bring it current to avoid the sale.
       Before the trial court could rule on Ocwen’s demurrer, Raiano
filed a first amended complaint. The first amended complaint was
nearly identical to the original pleading, merely adding allegations
that the pending trustee’s sale had been moved to a later date, and
contained no allegations of how Raiano was prejudiced by the lack
of notice. The parties stipulated that the first amended complaint
needed revisions. Raiano served but never filed a second amended
complaint. Ocwen demurred again on the same grounds as before.
Because Raiano did not file the second amended complaint, the trial
court ordered Raiano to do so and continued the demurrer hearing.3
The trial court sustained the demurrer and dismissed Raiano’s

      2 In conjunction with Ocwen’s demurrer to Raiano’s third
amended complaint, the trial court took judicial notice of the prior
lawsuit’s complaint and docket. It also accepted Ocwen’s
representation that Ocwen rescinded the prior notice of default and
notice of trustee’s sale as part of the settlement of the first lawsuit.
      3 Over six months elapsed between the filing of the first
amended complaint and the second amended complaint even though
the allegations were identical.

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HBOR cause of action with prejudice and granted him leave to
amend his section 2429b cause of action only if he could allege
prejudice.
      Raiano filed a third amended complaint that was identical to
the previous pleading except that it omitted references to the
HBOR. Ocwen demurred on the same grounds. Raiano opposed the
demurrer, claiming that he could file a fourth amended complaint
that alleged that he would have paid the arrears if he had been
served with the notice of default and the notice of trustee’s sale.
The trial court sustained the demurrer without leave to amend. As
to Raiano’s proposed amendment, the trial court found that, if the
allegation was truthful, Raiano failed to explain why he has not
brought the loan current despite actual knowledge of the default
and trustee’s sale for years.
      The trial court entered judgment in favor of Ocwen and
Raiano appealed.4
                             DISCUSSION
      We apply two standards of review on appeal from a judgment
of dismissal after a demurrer is sustained without leave to amend.
(Aguilera v. Heiman (2009) 174 Cal.App.4th 590, 595.) First, we
review the complaint “de novo to determine whether the complaint
alleges facts sufficient to state a cause of action under any legal
theory or to determine whether the trial court erroneously
sustained the demurrer as a matter of law.” (Ibid.) “Second, we

     4 Although   Raiano’s notice of appeal identified MLF as a
respondent, his appeal is from a judgment in favor of Ocwen after
the trial court sustained Ocwen’s demurrer to his third amended
complaint. MLF did not join in Ocwen’s demurrer and has not
made an appearance in this court.

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determine whether the trial court abused its discretion by
sustaining the demurrer without leave to amend.” (Ibid.) Under
both standards, the appellant has the burden of demonstrating the
trial court erred. (Ibid.)
       Sections 2924 et seq govern nonjudicial foreclosure sales
when a power of sale is contained in a deed of trust. The statutory
framework provides creditors with a quick, inexpensive, and
efficient remedy against a defaulting debtor; protects debtors from
wrongful loss of the property; and ensures a properly conducted
final sale to a bona fide purchaser. (Moeller v. Lien (1994)
25 Cal.App.4th 822, 830.) The foreclosure process is commenced by
the recording of a notice of default and election to sell by the
trustee. (§ 2924, subd. (a)(1).) Within one month after the notice of
default is recorded (§ 2924b, subd. (c)(1)), the trustee or authorized
agent must mail the notice of default to the “successor in
interest . . . of the estate or interest or any portion thereof of the
trustor or mortgagor of the deed of trust or mortgage being
foreclosed.” (§ 2924b, subd. (c)(2)(A).) After the notice of default is
recorded, the trustee must wait three calendar months before
proceeding with the sale. (§ 2924, subd. (a)(2)–(4).) The trustee
must mail a copy of the notice of trustee’s sale to the same persons
entitled to receive a copy of the notice of default at least 20 days
before the date of sale. (§ 2924b, subds. (b)(2) & (c)(2).) These
notice requirements give the debtor several opportunities to cure
the default and avoid the loss of the property. (Moeller, at p. 830.)
       Raiano alleges a single cause of action against Ocwen and
MLF for violating section 2924b, based on their failure to properly
serve him with the notice of default and notice of trustee’s sale.
This procedural error, however, is insufficient to state a cause of
action under section 2924b without an allegation of resulting

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prejudice. (Knapp v. Doherty (2004) 123 Cal.App.4th 76, 96; Orcilla
v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1002.) Courts will not
elevate form over substance when it is obvious that the plaintiff had
actual notice of the default and the trustee’s sale. (See Knapp v.
Doherty, at pp. 94–95.) Beyond Raiano’s conclusory allegation that
the trustee’s sale is prejudicial because he will lose the property, he
has not alleged prejudice because of Ocwen’s and MLF’s alleged
failure to properly serve him with the notices. Thus, the third
amended complaint did not state a viable cause of action under
section 2924b. The trial court did not err when it sustained
Ocwen’s demurrer.
       Nor did the trial court abuse its discretion when it denied
Raiano leave to amend. The trial court abuses its discretion when it
sustains a demurrer without leave to amend if there is a reasonable
probability that the plaintiff can amend the defective pleading to
state a cause of action. (Berg & Berg Enterprises, LLC v. Boyle
(2009) 178 Cal.App.4th 1020, 1035.) The plaintiff bears the burden
of demonstrating how the complaint can be amended. (Ibid.)
Where there are repeated failures to allege a valid cause of action,
the trial court may reasonably conclude that the plaintiff was
unable to do so. (Ruinello v. Murray (1951) 36 Cal.2d 687, 690.)
Further, unwarranted delay or lack of diligence in amending a
pleading is a valid reason for denying leave to amend. (Le Mere v.
Los Angeles Unified School Dist. (2019) 35 Cal.App.5th 237, 245.)
       Raiano asserts that he can allege that he would have brought
the loan current by paying the arrears had he known about the
default and the trustee’s sale. We are not persuaded. The record
shows that Raiano has known that the property was subject to
imminent foreclosure since 2017 when he filed the first lawsuit and
attached the prior notices to his complaint. However, despite

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knowing about the pending foreclosure for years and filing two
lawsuits that included five complaints, he never alleged that he
could pay the arrears had he been served with the notices of default
and trustee’s sale. Raiano’s general allegation that he would have
paid the arrears had he been served with the notices is belied by his
actual knowledge of the pending foreclosure and his failure to
include that allegation in successive complaints over a period of
years. These circumstances support the trial court’s conclusion that
Raiano’s proposed new allegation is disingenuous and belies any
honest claim of prejudice. Further, Raiano has not explained why,
after repeated opportunities to amend his pleadings, he failed to
allege that he could pay the arrears had he been served with the
notices. This is not a case where the plaintiff refines or focuses his
claims by amending his complaint after multiple demurrers.
Indeed, Raiano filed nearly identical complaints that suffered from
the same defect after he was repeatedly alerted to that defect by
Ocwen and the trial court. While there is no set number of
amended pleadings that a plaintiff may file, “there must be a limit
to the number of amended complaints.” (Johnson v. Ehrgott
(1934)1 Cal.2d 136, 138.) The trial court did not abuse its
discretion.

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                         DISPOSITION
     The judgment is affirmed. Ocwen Loan Servicing, LLC is
awarded its costs on appeal.
     NOT TO BE PUBLISHED.

                                     KIM, J.*

We concur:

             EDMON, P. J.

             EGERTON, J.

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

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