Court Opinion

ID: 4690453
Source: CourtListenerOpinion
Date Created: 2021-05-26 20:03:50.098406+00
Date Added: 2024-06-11T08:05:00.135866
License: Public Domain

Filed 5/26/21 Simon v. Hathaway 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                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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 This opinion has not been certified for publication or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

                                      FIRST APPELLATE DISTRICT

                                                   DIVISION ONE

 ROBERT SIMON,
             Plaintiff and Appellant,                               A160305
 v.                                                                 (Mendocino County
 GALEN HATHAWAY et al.,                                             Super. Ct. No. CVG 09-
                                                                    54636)
         Defendants and Respondents.

         This is the second appeal in this case arising out of a note and deed of
trust on an 82-acre parcel of Mendocino property (Property) in which
appellant Robert Simon has an ownership interest.1 Respondents Galen
Hathaway and Charles Ream, who together accumulated a 100 percent
ownership interest in the note, cross-complained for an accounting, judicial
foreclosure, and declaratory relief.
         In the first appeal, which we treated as a petition for writ of mandate,
we concluded Simon was not liable under certain modifications made to the
note without his assent, rejected his statute of limitations defense to

         Debra and Tashina Simon, Simon’s former wife and daughter,
         1

respectively, also have partial ownership interests in the property and are
plaintiffs. However, they did not participate in the prior appeal, nor are they
appellants in the instant appeal.

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enforcement of the note, and calculated the total amount he owed under the
note. We issued a writ of mandate directing the trial court to enter a
modified judgment in accordance with our opinion, which the court did.
      Simon now appeals from an order denying preliminary injunctive relief
to forestall Hathaway and Ream from proceeding with nonjudicial foreclosure
of the note and deed of trust. We affirm.
                                BACKGROUND
      We briefly summarize the underlying facts, which we set forth in our
opinion in Simon’s prior appeal.2 (Simon v. Superior Court, supra, A151810.)3
      “This case involves an 82-acre parcel in Mendocino County, once owned
entirely by plaintiff Robert R. Simon. When Simon got into financial
difficulty, he sold an undivided 50 percent interest in the property to
defendants Charles and Bedar Johnson. The transaction included an
agreement that Simon and the Johnsons would attempt to subdivide the
parcel into two lots. They were aware, however, that a subdivision was
unlikely, since the parcel was below the minimum required under local

      2  We treated Simon’s first appeal as a petition for writ of mandate due
to “serious doubt” about whether his appeal was “from a viable ‘interlocutory
judgment.’ ” (Simon v. Superior Court (May 14, 2019, A151810) [nonpub.
opn.].)
      3  We previously granted Simon’s request to take judicial notice of that
opinion. We now grant Simon’s request for judicial notice of the reporter’s
transcript filed in the earlier appeal and respondents’ cross-complaint. We
also grant respondents’ request for judicial notice of 10 documents, all of
which may be judicially noticed as “ [r]ecords of . . . any court of this state.”
(Evid. Code, § 452, subd. (d).) “ ‘We may take judicial notice of the existence
of judicial opinions and court documents, along with the truth of the results
reached—in documents such as orders, statements of decision, and
judgments—but cannot take judicial notice of the truth of hearsay statements
in decisions or court files. . . .’ ” (Aixtron, Inc. v. Veeco Instruments Inc. (2020)
52 Cal.App.5th 360, 382.)

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planning laws. So they also agreed that, after two years, Simon could
commence an action to partition the property in kind—thus, the genesis of
the instant proceeding.” (Simon v. Superior Court, supra, A151810.)
      “In the meantime, the financing deal the parties had arranged for the
Johnsons’ purchase of a 50 percent interest had become fairly complicated.
Simon and the Johnsons agreed to jointly procure a loan of $ 202,500, the
bulk of which was allocated to the Johnsons’ purchase of an interest in the
property, the remainder of which was allocated to loan fees and paying off
some of Simon’s personal debts. Unable to secure conventional financing,
they obtained a privately funded loan through a broker who had once worked
for Simon. The note provided for interest-only payments, followed by a
balloon payment of the principal and any unpaid interest. The note was
secured by a deed of trust. After the balloon payment came due, the
Johnsons, contrary to their agreement with Simon, unilaterally agreed to two
seriatim modifications of the note. Neither the Johnsons nor the owners of
the debt ever obtained Simon’s agreement to or signature on either
modification.” (Simon v. Superior Court, supra, A151810.) “After the new
maturity date lapsed, the Johnsons . . . sold their 50 percent interest in the
property to defendant Rodney DeFazio.” (Ibid.)
      “As pleadings proliferated in the partition action, the owners of the
debt, which included defendants Galen Hathaway and Charles Ream,
appeared and filed cross-complaints for an accounting, judicial foreclosure
and declaratory relief.” (Simon v. Superior Court, supra, A151810.) “By the
time of trial, Hathaway and Ream, together, owned 100 percent of the
interest in the note. The two agreed, between themselves, that Hathaway
held a 70 percent interest, and Ream, a 30 percent interest.” (Ibid.)

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      “Eventually the trial court held a bifurcated trial to determine the
ownership interests in the property and the amounts owed to Hathaway and
Ream, who by then were the sole owners of the note.” (Simon v. Superior
Court, supra, A151810.) Because there was no dispute as to the ownership
interests in the real property (the Simons owned 50 percent and DeFazio
owned 50 percent), the focus of the bifurcated trial was the amount owed on
the debt held by Hathaway and Ream. (Ibid.)
      “The court ruled the second modification was the operative financial
document, even as to Simon. It then found the principal amount owed was
$ 314,000 and the accrued interest owed was $ 282,076.66 (as of March 1,
2017), for a grand total of $596,076.66, and that interest was continuing to
accrue at $ 2,878.33 per month. The court declined to consider Simon’s
statute of limitations defense based on his claim that he was bound only by
the terms of the original note and not by the modifications unilaterally
obtained by the Johnsons.” (Simon v. Superior Court, supra, A151810.)
      We concluded “the trial court erred in ruling Simon was bound by the
modifications to the note, but [we] reject his statute of limitations defense
that he claims flows from that conclusion. Our conclusion as to the basis of
Simon’s liability does, however, require modification as to the amount he
owes, and we therefore order that a writ issue requiring the trial court to
vacate and modify certain portions of the ‘interlocutory judgment.’ ” (Simon v.
Superior Court, supra, A151810.) We concluded the amount Simon owed was
$384,412.50, which consisted of the unpaid principal balance of $202,500 plus
simple interest of $178,200.00 for eight years, plus $3,712.50 in interest for
two months. (Ibid.)
      We ordered that a peremptory writ of mandate issue directing the trial
court to vacate its interlocutory judgment and to enter a new and different

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judgment in accordance with the opinion. (Simon v. Superior Court, supra,
A151810.)
      The court duly entered a modified interlocutory judgment in October
2019 stating Simon owed, as of April 1, 2017, $384,402.50 in principal and
interest under the original note and deed of trust held by Hathaway and
Ream. The modified judgment further stated “[i]nterest shall continue to
accrue on the note in the monthly amount of $1,856.25 ($22,275.00 per year),
commencing on April 1, 2017. Interest on the note does not compound.” It
also stated, as had the original interlocutory judgment, that “Hathaway and
Ream intend to proceed with non-judicial foreclosure of the Hathaway/Ream
Trust Deed.”
      Hathaway and Ream then commenced nonjudicial foreclosure
proceedings, and in November 2019 filed a notice of default and election to
sell under the deed of trust.4 Simon, along with Debra Simon and Tashina
Simon, sought a “preliminary injunction and/or temporary restraining order
of foreclosure action, and order enjoining defendant’s pursuit of non-judicial
foreclosure.” (Capitalization omitted.) They challenged “specific
beneficiar[ies’] assignment of interests in the note as potentially void and
request[ed] a preliminary injunction to evaluate the validity,” and claimed
“[f]ailure to prove absolute ownership of the debt should result in a
permanent injunction of foreclosure or court forced settlement.”

      4  “When the trustor defaults in its obligations under the promissory
note and deed of trust, the beneficiary ordinarily has two methods to enforce
the security interest of the deed of trust. [Citation.] The beneficiary may
bring an action for judicial foreclosure ([Code Civ. Proc.,] § 725a) or pursue a
nonjudicial foreclosure, also known as a trustee’s sale, pursuant to the power
of sale granted in the deed of trust (Civ. Code, §§ 2924-2924l).” (Robin v.
Crowell (2020) 55 Cal.App.5th 727, 743.)

                                       5
      The trial court denied the requested relief, stating “it has been
determined that the loan subject to foreclosure is the responsibility of Mr.
Simon. In addition, Debra and Tashina Simon did not participate in the
appeal that was filed after the bifurcated trial in this matter and have
waived any argument regarding the interests of Hathaway and Ream.” The
court, nevertheless, stayed “the foreclosure proceedings until 60 days after
the local governing body declares that the Shelter In Place Order related to
the COVID-19 pandemic is lifted.” It also amended the October 2019
modified interlocutory judgment “to reflect the correct percentages of
ownership of the subject property by the Simons as follows: Robert R. Simon,
and undivided 37.50% ownership; Debra Simon an undivided 6.25%
ownership and Tashina Simon an undivided 6.25% ownership.”
                                DISCUSSION
      Simon maintains the trial court erred in denying preliminary
injunctive relief to prevent foreclosure, claiming he is likely to succeed on the
merits of his partition claim and would suffer irreparable harm if injunctive
relief is not granted.
      “Granting or denying an injunction is within the sound discretion of the
trial court and will be upheld on appeal absent an abuse of discretion.
Discretion is abused when a court exceeds the bounds of reason or
contravenes uncontradicted evidence.” (Jessen v. Keystone Savings & Loan
Assn. (1983) 142 Cal.App.3d 454, 458 (Jessen).)
      “In exercising its discretion, the court must consider ‘two interrelated
factors: the likelihood the moving party ultimately will prevail on the merits,
and the relative interim harm to the parties from the issuance or nonissuance
of the injunction. [Citation.]’ (Hunt v. Superior Court (1999) 21 Cal.4th
984 . . .) ‘A trial court may not grant a preliminary injunction, regardless of

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the balance of interim harm, unless there is some possibility that the plaintiff
will ultimately prevail on the merits of the claim. [Citation.] “Where there is
. . . no likelihood that the plaintiff will prevail, an injunction favoring the
plaintiff serves no valid purpose and can only cause needless harm.”
[Citation.]’ ” (County of Los Angeles Dept. of Public Health v. Superior Court
(2021) 61 Cal.App.5th 478, 486–487, italics omitted.)
Validity of Hathaway’s and Ream’s Interests
      Simon first claims he is likely to succeed in preventing foreclosure
because he “presented compelling evidence of defective instruments
regarding conveyance of the deed of trust, including void assignment
conveying no known interest, varying interest rates between beneficiaries,
and payment to beneficiary Petty[5] of over three times the amount of his
original investment.” Simon proffered this “evidence” by way of exhibits and
declarations filed in support of his request for preliminary injunctive relief.
      Simon’s presentation of these materials post-interlocutory judgment,
comes far too late in the day—the issues he now raises have either been
forfeited or were decided against him in connection with the first appeal.
      To begin with, Simon did not, in either his complaint or at trial,
challenge the assertedly ineffective assignments. “[I]if an appellant wishes to
argue a point on appeal, it must first make a record by raising the point in
the trial court.” (Tudor Ranches, Inc. v. State Comp. Ins. Fund (1998)
65 Cal.App.4th 1422, 1433.) “ ‘ “[I]t is fundamental that a reviewing court
will ordinarily not consider claims made for the first time on appeal which
could have been but were not presented to the trial court.” “[W]e ignore

      5  Simon does not explain how “varying interest rates between
beneficiaries” or payment to Petty of more than his original investment, even
if true, demonstrated “defective instruments” or void assignments.

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arguments, authority, and facts not presented and litigated in the trial court.
Generally, issues raised for the first time on appeal which were not litigated
in the trial court are waived. . . .” ’ ” (Gonzalez v. County of Los Angeles
(2004) 122 Cal.App.4th 1124, 1131.)
      In his complaint, Simon alleged Hathaway and Ream, as well as other
defendants, “own[ed] interests” in the deed of trust. At trial, Hathaway and
Ream testified as to how they acquired their collective, one hundred percent
ownership interest the note and deed of trust. And at the close of trial,
Simon requested a statement of decision as to five issues, none of which
concerned the assignments to Hathaway and Ream or the validity of their
interest in the note and trust deed. The court then entered an interlocutory
judgment that “Defendants Galen R. Hathaway and Charles Ream together
hold 100% of the fractional interests in the promissory note dated November
9, 2001, in the original amount of $202,500, which note is secured by a deed
of trust. . . . Pursuant to an agreement between them . . . Hathaway’s
interest in said note and deed of trust is 70%, and Ream’s is 30%.”
      Although Simon appealed from the interlocutory judgment, he did not
raise any issue as to the assignments to Hathaway or Ream, or their
“ownership of the debt.” In fact, Simon conceded in his opening brief that
“Hathaway and Ream together now hold 100% of the fractional interests in
the original Note.” “ ‘[While] briefs and argument are outside the record,
they are reliable indications of a party’s position on the facts as well as the
law, and a reviewing court may make use of statements therein as
admissions against the party.’ ”6 (DeRose v. Carswell (1987) 196 Cal.App.3d

      6
        Simon, himself, made this point elsewhere in his opening brief,
stating “Allegations made in a party’s pleadings constitute judicial
admissions. As admissions, they are conclusive concessions of the truth of
the matter and remove the matter from the issues.”

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1011, 1019, fn. 3, superseded by statute on another ground as stated in
Ramona v. Superior Court (1997) 57 Cal.App.4th 107, 112, fn. 6.)
      Given Simon’s concessions and the trial court’s findings, we thus stated
in our prior opinion, “By the time of trial, Hathaway and Ream, together,
owned 100 percent of the interest in the note.”
      In short, Simon is wholly foreclosed, at this juncture, from mounting a
challenge to the validity of Hathaway’s and Ream’s ownership interest in the
note and deed of trust.
      Partition
      Simon also maintains the trial court erred in “declin[ing] to order
partition” in its modified interlocutory judgment. He maintains this court
“has the authority to review the entirety of the litigation based on its merits
and determine if the trial court abused its discretion in entering a new
Judgment, on October 19, 2019, that contravenes [this court’s] writ of
mandate an opinion on cotenant debts.”
      It is hardly a surprise that the trial court did not order partition in
either the original interlocutory judgment or the modified judgment on
remand, since prior to trial, Simon waived any claim regarding partition.
Indeed, in his partial opposition to Hathaway and Ream’s motion to
bifurcate, Simon unequivocally stated he objected “to any hearing on the
Partition cause of action as . . . plaintiffs no longer intend to pursue such
relief. . . . [¶] Trial should be held solely on [Hathaway and Ream’s] request
for ‘accounting’ and declaratory relief as well as plaintiffs’ unjust enrichment
claims. . . .” (Italics added.)
      Nor, in turn, did we, in our prior opinion, direct any change to the
interlocutory judgment in this regard.
      In short, Simon long ago gave up any claim for partition.

                                         9
      Irreparable Harm
      Simon next claims he will suffer “irreparable harm” because he will
lose his “home of 43 years” if an injunction is not granted.
      Relying on Real Estate Analytics, LLC v. Vallas (2008) 160 Cal.App.4th
463, Simon asserts “ ‘[t]he uniqueness of residential property prevents its’
taking ever being adequately compensated by money.’ ” (Italics omitted.)
That case, however, simply sets forth the longstanding principle that “a
damage award is generally an inadequate remedy for a breach of real estate
contract, and therefore courts routinely grant a plaintiff's request for specific
performance.” (Id. at pp. 472–473.)
      In Jessen, supra, 142 Cal.App.3d 454, the court expressly rejected the
claim Simon advances—that “an injunction is required simply because it is
real property upon which foreclosure is sought, and the uniqueness of real
property prevents its taking ever being adequately compensated by money.”
(Id. at pp. 457–458.) As the court observed, the presumption set forth in Civil
Code section 3387—that “the breach of an agreement to transfer real
property cannot be adequately relieved by pecuniary compensation”—
pertains “to specific[ally] enforcing contracts for conveyance of real property.”
(Id. at p. 458.) As to foreclosures, Jessen explained, “In a practical sense it is
appropriate to deny an injunction where there is no showing of reasonable
probability of success, even though the foreclosure will create irreparable
harm, because there is no justification in delaying that harm where, although
irreparable, it is also inevitable.” (Id. at p. 459; see Choice-in-Education
League v. Los Angeles Unified School Dist. (1993) 17 Cal.App.4th 415, 422.)
      Simon similarly maintains that, in weighing the hardship to Hathaway
and Ream against the claimed “irreparable harm” to him, the “balance[ing] of
equities” favors him. He asserts he “is 73 with severe lung disease” and

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would be placed “in the path of dire physical harm” if “forced from his home
and shelter in the midst of a deadly pandemic.” Simon claims that, in
contrast, “respondents will suffer only the harm of further delay.”
      To begin with, the relative hardships, alone, cannot overcome the lack
of any prospect of prevailing. Furthermore, Hathaway and Ream have been
suffering the harm of delay for over a decade. They have received no
payments on the note since 2009. And they are, themselves, in their eighties
and in ill health. Indeed, we granted Hathaway and Ream calendar
preference on that basis. Nor will Simon be forced from his home during a
pandemic: the trial court stayed “the foreclosure proceedings until 60 days
after the local governing body declares that the Shelter In Place Order
related to the COVID-19 pandemic is lifted.”
      In sum, Simon has not shown that the trial court’s denial of injunctive
relief was an abuse of discretion.7
                                DISPOSITION
      The appealed order is AFFIRMED. Costs on appeal to respondents.8

      7  For the first time in his reply brief, Simon raises numerous other
claims of error as to the modified judgment, including that it “contradicts
testimonial evidence,” was based on a “[f]ailure to hear all evidence,” was in
excess of the court’s jurisdiction, and was a denial of due process. (Boldface
omitted.) Even if Simon had raised these issues in the trial court, which he
did not, we decline to consider points raised for the first time in a reply brief.
(Owens v. City of Oakland Housing, Residential Rent & Relocation Board
(2020) 49 Cal.App.5th 739, 746.)
      8 Respondents assert this court should also award them attorney fees
incurred on appeal, relying on provisions in the “trust deed signed by Simon
in 2001.” However, any motion for contractual attorney fees is more
appropriately brought in the trial court pursuant to California Rules of
Court, rule 3.1702(c)(1).

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                                 _________________________
                                 Banke, J.

We concur:

_________________________
Humes, P.J.

_________________________
Margulies, J.

A160305, Simon v.Hathaway

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