Court Opinion

ID: 4679437
Source: CourtListenerOpinion
Date Created: 2021-04-21 17:03:07.14216+00
Date Added: 2024-06-11T08:03:50.382443
License: Public Domain

Filed 4/21/21 Randle v. Cenlar F.S.B. CA2/4
              NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 FOUR

OTTO RANDLE,                                                           B296235

         Plaintiff and Appellant,                                      (Los Angeles County
                                                                        Super. Ct. No. BC676941)
         v.

CENLAR F.S.B. d/b/a CENTRAL
LOAN ADMINISTRATION AND
REPORTING et al.,

         Defendants and Respondents.

         APPEAL from a judgment of the Superior Court for Los Angeles
County, Richard E. Rico, Judge. Affirmed.
         Otto Randle, in pro. per., for Plaintiff and Appellant.
         Houser LLP, Robert W. Norman, Jr., Emilie K. Edling and Neil J.
Cooper for Defendants and Respondents.
      Plaintiff Otto Randle appeals from a judgment of dismissal
entered in a lawsuit he brought against an individual, Rita Gayle
Farris-Ellison, and three entities, Cenlar F.S.B. d/b/a Central Loan
Administration and Reporting (Cenlar), Mortgage Electronic
Registration Systems, Inc. (MERS), and the Federal National Mortgage
Association (Fannie Mae). The judgment at issue was entered in favor
of the three entities after the trial court granted their motion for
judgment on the pleadings.1 We conclude the court did not err in
entering judgment in favor of the entities because the statutes of
limitation had run and Randle failed to allege (and appears unable to
allege) facts sufficient to support application of the discovery rule.
Accordingly, we affirm the judgment.

                              BACKGROUND
      In 2000, Randle inherited the property at issue (his home), free
and clear of any mortgage. That year, he took out a $100,000 loan
against the property to do home improvements. By 2007, the monthly
payments on the mortgage had almost doubled. Randle contacted
Farris-Ellison, a loan broker, to see if he could modify his loan to
decrease the payment. He alleges that, unbeknownst to him, rather
than modifying the existing loan, Farris-Ellison arranged for a new loan

1      The trial court previously had sustained without leave to amend a
demurrer by the individual, Farris-Ellison. There is no indication in the
record that a judgment or a dismissal order was entered in favor of Farris-
Ellison. Randle’s notice of appeal identifies only the judgment in favor of the
entities.

                                       2
in the amount of $146,000, which was $50,000 more than the amount
owed on his original loan; he alleges that Farris-Ellison pocketed that
additional money. He concedes that the deed of trust, which states that
he signed a promissory note in the amount of $146,000, was recorded
against his property on September 25, 2007.2 He claims, however, that
he never signed the deed of trust or promissory note. Nevertheless, he
made all the monthly payments on the new loan.

    A.     Procedural History Leading to the Motion for Judgment on the
           Pleadings

         Appearing in propria persona, Randle filed the instant action in
September 2017 against Farris-Ellison, IndyMac Bank, F.S.B.
(IndyMac), MERS, and Cenlar, alleging claims (1) to quiet title, (2) for
declaratory relief, and (3) for cancellation of an instrument. Before all
of the defendants answered, Randle filed a first amended complaint
alleging the same claims, except he removed IndyMac as a defendant
and added Fannie Mae.
         Cenlar, MERS, and Fannie Mae filed a demurrer to the first
amended complaint. They raised several grounds for the demurrer,
including that all of the causes of action were barred by the applicable
statutes of limitation, the longest of which is four years. Since the
alleged fraud took place in 2007, they argued the claims must be
dismissed because Randle failed to allege facts to support application of

2      Randle attached a copy of the recorded deed of trust to his original and
first amended complaints.

                                       3
the discovery rule. The trial court sustained the demurrer with leave to
amend.
     Randle retained an attorney and filed a second amended
complaint. The second amended complaint, which is the complaint at
issue in this appeal, alleges causes of action for cancellation of an
instrument, declaratory relief, and nine other claims.3 Cenlar, MERS,
and Fannie Mae jointly filed an answer to the complaint, and Farris-
Ellison filed a demurrer.
     The trial court sustained Farris-Ellison’s demurrer without leave
to amend. As to the cancellation of an instrument and declaratory relief
claims, the court based its ruling on statute of limitations grounds,
finding that Randle failed to plead facts showing exactly how he
discovered the alleged fraud and why he could not have discovered it
earlier despite reasonable diligence. As to the remaining claims, the
court sustained the demurrer on the ground that Randle failed to obtain
permission to add those claims following the sustaining of the demurrer
to the first amended complaint. The court issued its ruling on the
demurrer on November 14, 2018, and Farris-Ellison gave notice of the
ruling on November 20, 2018. It appears, however, that no dismissal
order was ever filed.
     A month later, Cenlar, MERS, and Fannie Mae filed a motion for
judgment on the pleadings. They argued that (1) Randle was not
permitted to add new causes of action; (2) all of the causes of action

3      The attorney moved to withdraw as counsel less than a week after
filing the complaint; Randle thereafter represented himself.

                                     4
were barred by the statutes of limitation; and (3) the claims against
MERS and Fannie Mae failed because there were no allegations of any
wronging by them. In support of their motion, the entities filed a
request for judicial notice of, among other documents, a document that
Randle had filed that attached a letter he wrote to IndyMac in February
2010 to complain that it had the incorrect principal amount listed for
his loan.
     On February 5, 2019, the trial court issued its tentative decision,
which addressed only the first and third arguments made by Cenlar,
MERS, and Fannie Mae; it granted the motion as to the newly-alleged
causes of action on the ground that Randle had not obtained permission
to add those claims, and it granted the remaining claims on the ground
that there were no allegations of wrongdoing by MERS or Fannie Mae.
The court did not in its tentative ruling address the statute of
limitations argument, nor did it directly address the cancellation of
instrument and declaratory relief claims against Cenlar. Although the
court’s minute order stated the court deemed the tentative ruling as its
order, the minute order also stated that the court signed the submitted
written order and judgment of dismissal. That written order and
judgment states that the court grants the motion for judgment on the
pleadings and dismisses the action with prejudice as to Cenlar, MERS,
and Fannie Mae.

                                    5
      Randle timely filed a notice of appeal from the February 5, 2019
judgment.4

                                DISCUSSION
      In his appellant’s opening brief, Randle raises many issues, most
of which are not cognizable in this appeal, either because they relate to
the claims against Farris-Ellison (this appeal is only from the judgment
in favor of Cenlar, MERS, and Fannie Mae) or they are not adequately
briefed with coherent legal arguments supported by citations to legal
authority. (Lee v. Kim (2019) 41 Cal.App.5th 705, 721 [“the scope of our
review is limited to those issues that have been adequately raised and
supported in the appellant’s brief”]; Badie v. Bank of America (1998) 67
Cal.App.4th 779, 784-785 [“When an appellant fails to raise a point, or
asserts it but fails to support it with reasoned argument and citations to
authority, we treat the point as waived”].) The one issue Randle raises
for which he provides citation to legal authority is whether the trial
court erred by dismissing the action against Cenlar, MERS, and Fannie
Mae, because the statutes of limitation were tolled due to fraudulent
concealment.5 Although Randle did not raise this argument below, we

4     Randle’s notice of appeal mistakenly states that the judgment was
entered on February 8, 2019; that is the date Randle was served with notice
of entry of the judgment.

5      Shortly before oral argument, Randle filed a request for judicial notice.
In it, he asks this court to take judicial notice of certain “facts” and
documents. Most of the “facts”—such as his belief that the loan documents
from the 2007 loan were intentionally kept from him—are not properly
subjects of judicial notice. (Evid. Code, § 452, subds. (g), (h).) The remaining

                                       6
will address it and the related issue of the application of the discovery
rule.

A.      Applicable Statutes of Limitations
        Randle does not properly challenge the dismissal of the newly-
alleged claims in the second amended complaint.6 Therefore, the only
claims at issue in this appeal are his claims for cancellation of an
instrument and declaratory relief. These claims seek cancellation of the
deed of trust and/or promissory note on the ground it was obtained by
fraud. Thus, the applicable statute of limitations is either four years for
cancellation of instrument (see Salazar v. Thomas (2015) 236
Cal.App.4th 467, 476-477 [four-year catchall provision applies]; Code
Civ. Proc., § 343; see also Code Civ. Proc., § 337, subd. (c) [four-year
statute for rescission of written contract]) or three years for fraud (Code
Civ. Proc., § 338, subd. (d)).
        The statute of limitations usually starts to run when a cause of
action accrues, and a cause of action ordinarily accrues on the date of
injury. (Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926,
931.) However, these principles have been modified by two related
rules: the discovery rule and its “close cousin,” the rule of fraudulent
concealment, both of which operate to toll the running of the statute of

requested facts and documents are not relevant to the only cognizable issue
presented in this appeal, i.e., whether the statute of limitations bars Randle’s
claims. Therefore, we deny his request.

6    Randle raises the issue in a heading, but includes no discussion
addressing the court’s ruling and demonstrating any error.

                                       7
limitations, under certain circumstances, until the plaintiff discovers
the injury or cause of action. (Ibid.)
      In this case, the injury to Randle occurred when Farris-Ellison
allegedly obtained a $146,000 loan in Randle’s name and recorded a
deed of trust against his home in 2007.7 Because Randle did not bring
his claims for cancellation of an instrument and declaratory relief until
2017, both claims are time-barred unless the discovery rule or the rule
of fraudulent concealment apply.

B.    Fraudulent Concealment
      “The doctrine of fraudulent concealment, which is judicially
created [citations], limits the typical statute of limitations. ‘[T]he
defendant’s fraud in concealing a cause of action against him tolls the
applicable statute of limitations. . . .’ [Citations.] In articulating the
doctrine, the courts have had as their purpose to disarm a defendant

7      Randle appears to argue that he suffered new injuries every time
Cenlar, MERS, or Fannie Mae sought to collect payment based upon the
allegedly fraudulent loan documents. That argument, however, appears only
in a heading in his appellant’s opening brief, with no discussion or citation to
legal authority, and therefore it is forfeited. In any event, the fact that
Randle may have suffered new injuries by those collection efforts does not
mean that his claims accrued each time payments were collected. Under the
theory of continuous accrual, a new cause of action accrues “‘each time a
wrongful act occurs.’” (Aryeh v. Canon Business Solutions, Inc. (2013) 55
Cal.4th 1185, 1199.) But the wrongful act Randle alleges is the fraudulent
obtaining of a loan in his name and recording of the deed of trust. The injury
Randle allegedly suffered when Cenlar, MERS, or Fannie Mae sought to
collect on the loan does not constitute a new wrong act, but rather additional
harm arising from the original wrongful act. (See NBCUniversal Media, LLC
v. Superior Court (2014) 225 Cal.App.4th 1222, 1237-1238, fn. 10.)

                                       8
who, by his own deception, has caused a claim to become stale and a
plaintiff dilatory.” (Regents of University of California v. Superior Court
(1999) 20 Cal.4th 509, 533.)
     For the fraudulent concealment rule to apply, the plaintiff must
plead and prove the substantive elements of fraud and an excuse for
late discovery of the facts. (Community Cause v. Boatwright (1981) 124
Cal.App.3d 888, 900 (Boatwright).) The elements of fraud are (1) a false
representation or concealment by the defendant; (2) the defendant’s
knowledge of the falsity or concealment; (3) the defendant’s intent to
defraud; (4) the plaintiff’s justifiable reliance; and (5) resulting damage.
(Charnay v. Colbert (2006) 145 Cal.App.4th 170, 184.) To establish an
excuse for late discovery, the plaintiff must plead and prove “(1) when
the fraud was discovered; (2) the circumstances under which it was
discovered; and (3) that the plaintiff was not at fault for failing to
discover it or had no actual or presumptive knowledge of facts sufficient
to put him on inquiry.” (Boatwright, supra, 124 Cal.App.3d at p. 900.)
     In the present case, the only fraud referenced in the second
amended complaint was alleged to have been committed by Farris-
Ellison, not by Cenlar, MERS, or Fannie Mae. Because the fraudulent
concealment rule is designed to toll the statute of limitations only as to
“a defendant who, by his own deception, has caused a claim to become
stale and a plaintiff dilatory” (Regents of University of California v.
Superior Court, supra, 20 Cal.4th at p. 533), it cannot be applied to toll
the statute as to parties not involved in the alleged fraud. Therefore,
the fraudulent concealment rule does not assist Randle here.

                                      9
C.    Discovery Rule
      The discovery rule “postpones accrual of a cause of action until the
plaintiff discovers, or has reason to discover, the cause of action.” (Fox
v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox).) Under
the rule, the statute of limitations begins to run “once the plaintiff ‘“‘has
notice or information of circumstances to put a reasonable person on
inquiry. . . .’”’ [Citations.] A plaintiff need not be aware of the specific
‘facts’ necessary to establish the claim; that is a process contemplated
by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing,
and therefore an incentive to sue, she must decide whether to file suit
or sit on her rights. So long as a suspicion exists, it is clear that the
plaintiff must go find the facts; she cannot wait for the facts to find
her.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111 (Jolly).)
      To rely upon the discovery rule, “‘[a] plaintiff whose complaint
shows on its face that his claim would be barred without the benefit of
the discovery rule must specifically plead facts to show (1) the time and
manner of discovery and (2) the inability to have made earlier discovery
despite reasonable diligence.’ [Citation.] In assessing the sufficiency of
the allegations of delayed discovery, the court places the burden on the
plaintiff to ‘show diligence’; ‘conclusory allegations will not withstand
demurrer [or, in this case, a motion for judgment on the pleadings].’”
(Fox, supra, 35 Cal.4th at p. 808.)
      In the present case, Randle’s allegations (and other statements in
documents he filed with the court) regarding when and how he

                                      10
discovered the allegedly fraudulent loan changed several times over the
course of the lawsuit. In both the original and the first amended
complaints, Randle alleged that he first learned about the $146,000
loan when he saw the loan document during litigation he brought
against the loan servicer (i.e., Cenlar) in 2016.8 Randle alleged both a
different date of discovery as well as the manner of discovery in the
second amended complaint. In that complaint, he alleged he first
discovered the alleged fraud in 2017, when he received a notice from a
real estate company, offering to take over his $146,000 loan. The
complaint stated that this prompted Randle to investigate, including by
going to the County Recorder’s office to obtain a copy of the loan
document; it was only then that Randle learned that what he thought
was a loan modification of his $100,000 mortgage in 2007 was, in fact, a
new $146,000 loan secured by a deed of trust.
      A week after the second amended complaint was filed, Randle
filed a document in which he declared under penalty of perjury that he
filed a police report against Farris-Ellison, accusing her of fraud, in
January 2015, and that he filed a complaint against her with the
California Bureau of Real Estate in March 2016. Two and a half
months later, Randle filed a motion to which he attached a letter he had
written to IndyMac Mortgage Services in February 2010 complaining

8     Randle filed a small claims action against Cenlar in July 2016, alleging
he was improperly charged $5,120 while awaiting a loan modification.
Judgment was awarded in his favor. A few months later he filed an
unlimited civil action against Cenlar based upon the same loan servicing
issues. Cenlar’s demurrer to that complaint was sustained on res judicata
grounds.

                                      11
that it was showing an incorrect principal amount (he stated it was
“about $133,000”) on his loan account; IndyMac responded that it would
investigate.
     Several months later, after Farris-Ellison had filed her demurrer,
Randle filed a motion for leave to file a third amended complaint. He
explained that the purpose of the third amended complaint was to
correct errors in the second amended complaint regarding the time and
manner in which he became aware of the allegedly fraudulent
promissory note. His verified proposed third amended complaint
alleged that (1) the loan servicing agency on the $146,000 loan was
transferred five times over the years since the loan’s inception; (2)
Randle sent letters to each agency requesting the loan documents, but
none of the agencies gave him those documents; (3) an employee from
Cenlar finally sent Randle a scanned copy of the first page of the
promissory note on or about April 7, 2016; (4) it was not until he
received that page that Randle realized the loan amount was incorrect,
so he started investigating; (5) on February 15, 2017, Randle finally
went to the County Recorder’s office and obtained a copy of the
promissory note, which “had been recorded with [Randle’s] forged
signature.”9

9     The trial court denied Randle’s motion for leave to file the amended
complaint, noting that the motion did not meet the requirements under rule
3.1324 of the California Rules of Court, including the requirement that the
moving party state when the facts giving rise to the amended allegation were
discovered and the reason why the request for amendment was not made
earlier.

                                     12
     Less than two months later (two weeks after the court ruled on
Farris-Ellison’s demurrer), Randle filed a “revised and corrected” second
amended complaint in which he alleged that in October 2015 he
received a letter from Reliable Mortgage Company, offering to refinance
his $146,000 mortgage, which caused him to realize that he might have
been defrauded. Randle also alleged that he filed a police report on
January 30, 2016, reporting that an “unknown suspect used [his]
information to obtain a loan in addition to his initial loan” without his
permission.
     A few weeks later, Randle filed what was, in effect, a motion for
reconsideration of the trial court’s ruling denying him leave to amend
upon the sustaining of Farris-Ellison’s demurrer. In that motion,
Randle explained that the second amended complaint had been drafted
by an attorney, who had not shown it to him before it was filed. He
stated that the attorney made an error regarding the date he discovered
the alleged fraud. Although he provided no details regarding how he
discovered it, he stated that he discovered Farris-Ellison’s “fraudulent
behavior . . . sometime before November 11, 2015, as evidenced by the
fact that [he] filed a police report on that date” alleging that Farris-
Ellison had “engaged in real estate fraud involving the manipulation of
the mortgage which she had obtained for [him].”
     Given Randle’s ever-changing explanation of how he purportedly
discovered the fraudulent loan, it was incumbent upon him to explain
the inconsistencies in his stories. Although he explained the incorrect
allegation of discovery in the second amended complaint drafted by an
attorney, he offered no explanation for the other inconsistencies.

                                     13
     Moreover, in none of his complaints, proposed complaints, or other
documents did Randle attempt to explain why he was unable to discover
the alleged fraudulent loan earlier. In light of his allegation in the
second amended complaint that he made all of his monthly payments
(at the refinanced amount)—as well as his allegation in his proposed
third amended complaint that he had contacted each of the five loan
servicing agencies over the years, requesting copies of the loan
documents—the trial court reasonably could presume that Randle
“‘“‘ha[d] notice or information of circumstances to put a reasonable
person on inquiry’”’” (Jolly, supra, 44 Cal.3d at p. 1110-1111) no later
than 2010, when he wrote to IndyMac because he noticed a discrepancy
in the principal loan amount. Because the deed of trust and promissory
note evidencing the $146,000 loan were recorded in September 2007,
and thus publicly available, the trial court did not err in concluding that
Randle did not (and could not) rely upon the discovery rule to avoid the
bar of the statute of limitations.
                                     //
                                     //
                                     //
                                     //
                                     //
                                     //
                                     //
                                     //

                                     14
                            DISPOSITION
     The judgment is affirmed. Cenlar, MERS, and Fannie Mae shall
recover their costs on appeal.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                      WILLHITE, J.
     We concur:

     MANELLA, P. J.

     CURREY, J.

                                 15