Opinion
B321858
04-26-2024
IVAN A. CROSBIE, Plaintiff and Appellant, v. THE BANK OF NEW YORK MELLON, Defendant and Respondent.
Ivan A. Crosbie, in pro. per., for Plaintiff and Appellant. Houser, Robert W. Norman, Jr. and Timothy A. Schneider for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 19STCV34227, Wendy W.Y. Chang, Judge. Affirmed.
Ivan A. Crosbie, in pro. per., for Plaintiff and Appellant.
Houser, Robert W. Norman, Jr. and Timothy A. Schneider for Defendant and Respondent.
BENDIX, J.
This is an appeal from an order sustaining the demurrer without leave to amend which we deem to be from the judgment of dismissal. Plaintiff and appellant Ivan A. Crosbie, a self-represented litigant, filed a complaint on September 26, 2019 against defendant and respondent The Bank of New York Mellon formerly known as The Bank of New York, as Trustee for TBW Mortgage-Backed Trust 2007-1 Mortgage Backed Pass-Through Certificates Series 2007-1 (the Bank). In that complaint, Crosbie, alleges: "(1) foreclosure fraud; (2) declaratory judgment; (3) a cause of action styled 'fraud including false and fraudulent claim'; (4) quiet title; (5) a request to 'void or cancel all of the assignments of the deed of trust'; and (6) a cause of action styled 'prayer for relief.' " (Crosbie v. The Bank of New York Mellon (Aug. 20, 2021, B305085) [nonpub. opn.] (Crosbie I) at p. 2.) Crosbie's principal allegation is that the Bank may not foreclose on his real property because in 2006, Crosbie's estranged wife forged his signature on a deed of trust (DOT). (Ibid.)
See footnote 6, post.
Altisource Solutions, Inc. and Western Progressive LLC were identified as defendants in Crosbie's 2019 complaint. They are not parties to this appeal.
Crosbie filed this complaint on the same day the parties stipulated in a bankruptcy court order attached to Crosbie's complaint that the Bank "may enforce its remedies to foreclose upon and obtain possession of the Property in accordance with applicable nonbankruptcy law ...."
This is Crosbie's second appeal. In the prior appeal, we concluded his lawsuit was not barred by the doctrine of res judicata. (Crosbie I, supra, B305085, at pp. 2-3, 14.) We refrained from considering other grounds raised in the Bank's demurrer because the trial court had not considered them. (Id. at pp. 14-15.) Following remand, the trial court sustained the Bank's demurrer based on judicial estoppel, one of the grounds in the demurrer we did not decide in our prior appeal. The trial court then dismissed the lawsuit.
We agree with the trial court that judicial estoppel bars Crosbie's current lawsuit. The only element of judicial estoppel Crosbie disputes is whether he acted based on a mistake in 2011 when he omitted his claims against the Bank in schedules that were part of his bankruptcy petition. Judicially noticed documents show as a matter of law that Crosbie did not act based on a mistake and that he cannot amend his complaint without transgressing the sham pleading rule when he alleged in his complaint in a prior action that he executed the 2006 DOT. We thus affirm the judgment of dismissal.
FACTUAL AND PROCEDURAL BACKGROUND
We summarize only the facts relevant to this appeal. The property at issue in this case is real property located in Hawthorne (Hawthorne Property).
The trial court took judicial notice of Crosbie's first amended complaint in a 2012 action and of Crosbie's 2011 bankruptcy petition and additional filings and orders in the bankruptcy court. We may consider these judicially noticed documents. (See Evid. Code, § 459, subd. (a) ["reviewing court shall take judicial notice of . . . each matter properly noticed by the trial court".]
1. Crosbie's 2011 bankruptcy action
In 2011, Crosbie filed a voluntary Chapter 7 bankruptcy petition in the United States Bankruptcy Court of the Central District of California (bankruptcy court). In his bankruptcy schedules identifying creditors holding secure claims, Crosbie identified a secured claim to the Hawthorne Property in the amount of $399,265. Crosbie sought to retain the Hawthorne Property and reaffirm the debt. In the bankruptcy proceedings, Crosbie identified no claims against any party (including the Bank) with respect to the Hawthorne Property. The bankruptcy court discharged Crosbie in November 2011.
2. Crosbie's 2012 superior court action
Crosbie filed a complaint in 2012 and a first amended complaint filed in 2013 related to the Hawthorne Property. Among other defendants, Crosbie sued the Bank. In his first amended complaint, Crosbie alleged he purchased the Hawthorne Property in 1996. According to Crosbie, in 2006, he "executed a series of documents, including but not limited to a Note and Deed of Trust [DOT], securing the [Hawthorne] Property in the amount of $400,000...." He alleged he paid the mortgage from
December 2006 to approximately April 2010, at which time he requested a loan modification. He further asserted that after a notice of default and election to sell under the DOT had been recorded, he filed for bankruptcy. Crosbie also averred that because the debt was discharged in the bankruptcy proceeding, no one could collect the debt anymore.
In his prayer for relief, Crosbie sought, among other things, quiet title to the Hawthorne Property. In 2014, after sustaining the defendants' demurrers without leave to amend, the trial court dismissed Crosbie's lawsuit with prejudice.
3. Crosbie's 2018 superior court action
On our own motion, we take judicial notice of Crosbie's 2018 complaint, the order sustaining the demurrer to the first amended complaint in that action, and the judgment of dismissal. (Evid. Code, §452, subd. (d) [allowing judicial notice of records of the court]; ibid., § 459, subd. (a) [allowing reviewing court to take judicial notice of any matter specified in Evid. Code, § 452].)
In 2018, Crosbie filed a lawsuit alleging Jones-Crosbie, his estranged wife, signed the DOT without his knowledge and forged his signature. The Bank was one of many defendants. The trial court found Crosbie was judicially estopped from litigating any claim against the Bank because Crosbie did not include any such claim in his 2011 bankruptcy schedules. After sustaining the Bank's demurrer without leave to amend, the trial court entered a judgment of dismissal which in the prior appeal we concluded was without prejudice. (Crosbie I, supra, B305085, at p. 11.)
4. Crosbie's 2019 superior court action-the current action
As noted above, in 2019, Crosbie filed the complaint that is the subject of the appeal before us. That complaint was also the subject of a prior appeal. We thus quote from our prior appeal's description of his allegations.
"Crosbie avers his estranged wife executed a note and a deed of trust in favor of an entity named Taylor Bean &Mortgage Corporation (TBW) for $400,000 on real property in Hawthorne that at that time was owned by Crosbie and his estranged wife [Jones-Crosbie]. Crosbie claims his estranged wife signed the note and the deed of trust without his knowledge, and that his estranged wife forged Crosbie's signature on the deed of trust. Crosbie claims that he 'had no knowledge of any of the above[-]mentioned transactions . . . until December 2017 when he began cleaning up his garage and found boxes of [his estranged wife's] documents that she inadvertently left behind.'" (Crosbie I, supra, B305085, at p. 4, fn. omitted.)
"Crosbie further avers in his verified complaint that the Bank has attempted to foreclose on the property despite the fact his estranged wife forged his signature on the deed of trust. Crosbie also suggests the Bank lacks the authority to enforce the deed of trust because it did not originate the underlying loan or establish that the note or deed of trust was assigned to the Bank. He further alleges the Bank breached a stipulation filed in Crosbie's bankruptcy proceedings that barred the Bank from initiating foreclosure proceedings before September 26, 2019." (Crosbie I, supra, B305085, at p. 4.)
Exhibits attached to the complaint include the DOT, which was recorded in December 2006 and bears Crosbie's and Jones-Crosbie's signatures. On July 2, 2019, the bankruptcy court issued an order allowing Crosbie to sell the Hawthorne Property. Six days later, however, on July 8, 2019, the bankruptcy court issued an order allowing the Bank to foreclose on the Hawthorne Property and indicating the foreclosure sale could not occur before September 26, 2019. The order followed a motion by the Bank, which was settled when the parties stipulated that the Bank "may enforce its remedies to foreclose upon and obtain possession of the Property in accordance with applicable nonbankruptcy law ...." Crosbie also attached to his complaint letters from two handwriting examiners, who opined that the signature on the DOT was not "author[ed]" by Crosbie.
On our own motion, we take judicial notice of the bankruptcy court's orders July 2, 2019 and July 8, 2019 and attached as exhibits to Crosbie's complaint. (Evid. Code, § 452, subd. (d) [allowing judicial notice of records of the court]; ibid., § 459, subd. (a) [allowing reviewing court to take judicial notice of any matter specified in Evid. Code, § 452].) These orders were made during the bankruptcy action Crosbie filed on August 16, 2018. That bankruptcy action was dismissed with prejudice on October 12, 2018.
5. Demurrer to the complaint before us
The Bank filed a demurrer to Crosbie's 2019 complaint, arguing among other things, that the complaint is barred by judicial estoppel. Specifically, according to the Bank, Crosbie did not mention any challenge to the DOT in the bankruptcy petition and therefore cannot dispute the validity of the DOT. The Bank also argued Crosbie failed to state a valid cause of action.
6. The trial court order at issue in this appeal
The trial court sustained the Bank's demurrer without leave to amend because it was barred by judicial estoppel. Quoting Hamilton v. State Farm Fire &Casualty Co. (9th Cir. 2001) 270 F.3d 778, 783, the court explained that in the bankruptcy context" 'a party is judicially estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statements.' [Citation.]" The trial court further concluded that filing legal claims not disclosed in earlier bankruptcy proceedings constitutes the assertion of inconsistent positions. On appeal, Crosbie does not dispute this finding.
The court found, in the context of the 2011 bankruptcy proceedings, that Crosbie identified the Hawthorne Property as an undisputed secured claim. The court found Crosbie did not identify any claim against the Bank on his bankruptcy schedules. The court further found Crosbie "persuaded the Bankruptcy Court to accept his earlier position before" issuing the discharge. On appeal, Crosbie does not dispute these findings.
The court also found that in 2012, Crosbie had alleged "he was the one that [sic] executed a . . . Deed of Trust securing the Property in the amount of $400,000." Specifically, "Plaintiff in 2012 alleged that he executed the 2006 Deed of Trust. Yet, he now alleges that he did not know of the Deed of Trust until November or December 2017." On appeal, Crosbie does not dispute this finding of inconsistency.
The court rejected Crosbie's argument that his failure to list his claims against the Bank on his 2011 bankruptcy schedules was the product of mistake. More specifically, Crosbie claims on appeal, as he did below, that the mistake was he did not know until 2017 or 2018 that his signature was forged on the 2006 DOT.
On September 2, 2022, the court entered judgment in favor of the Bank. The court dismissed the action against the Bank with prejudice.
Crosbie appealed immediately after entry of the order sustaining the demurrer without leave to amend, which is not an appealable order. (Cardenas v. Horizon Senior Living, Inc. (2022) 78 Cal.App.5th 1065, 1069.) We treat the appeal as from the judgment. (Ibid; see Cal. Rules of Court, rule 8.104(d)(2) ["The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment."].)
STANDARD OF REVIEW
We review an order sustaining a demurrer under a de novo standard of review but begin with the presumption that the trial court's judgment is correct. (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162; Pinto Lake MHP LLC v. County of Santa Cruz (2020) 56 Cal.App.5th 1006, 1012.) A demurrer is appropriate where the complaint discloses a bar to recovery. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)" '" 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] . . . [Citation.]"' [Citation.]" (State of California ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 412.)
" 'If it is reasonably possible the pleading can be cured by amendment, the trial court abuses its discretion by not granting leave to amend. [Citation.] The plaintiff has the burden of proving the possibility of cure by amendment.' [Citations.]" (Czajkowski v. Haskell &White, LLP (2012) 208 Cal.App.4th 166, 173.) "We will affirm if there is any ground on which the demurrer can properly be sustained, whether or not the trial court relied on proper grounds or the defendant asserted a proper ground in the trial court proceedings." (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031.)
DISCUSSION
A. Judicial Estoppel Bars Crosbie from Challenging the 2006 DOT
Judicial estoppel applies where"' "(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake."' [Citations.]" (Miyahara v. Wells Fargo Bank, N.A. (2024) 99 Cal.App.5th 687, 697 (Miyahara).)
"The Bankruptcy Code and rules require a debtor to file various 'schedules,' including a 'schedule of assets.' [Citations.]" (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 132.)" 'The omission of a cause of action or claim "from . . . mandatory bankruptcy filings is tantamount to a representation that no such claim existed."' [Citations.]" (Id. at p. 137.) A borrower's failure to disclose claims against a lender in the bankruptcy court may bar the borrower from raising them in a subsequent lawsuit. (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1605, 1609.)
Miyahara considered whether judicial estoppel applied in a case involving a homeowner seeking to avoid foreclosure. The plaintiff purchased a home in 1988 and petitioned for bankruptcy in 2017. (Supra, 99 Cal.App.5th at pp. 692-693.) In 2020, the plaintiff filed a complaint against Wells Fargo Bank, N.A. (Wells Fargo), which demurred to the complaint on the ground that plaintiff failed to disclose her claims against the bank in her bankruptcy petition. (Id. at pp. 694-696.) In 2021, the plaintiff moved to reopen the bankruptcy case to include claims against Wells Fargo. (Id. at p. 696.)
The trial court sustained Wells Fargo's demurrer and entered a judgment of dismissal. (Miyahara, supra, 99 Cal.App.5th at p. 696.) The appellate court reversed the judgment; it held the trial court should have granted the plaintiff leave to amend to allege mistake. (Id. at p. 703.)
Miyahara explained:" '[W]here a debtor in bankruptcy violates its statutory and fiduciary duty to disclose a current claim during a bankruptcy proceeding, equitable and judicial estoppel operate as a bar to further litigation by the debtor.' [Citation.]' "By virtue of this failure to disclose, equitable and judicial estoppel operate against further litigation."' [Citations.] '" 'The rationale'"' for these decisions '" 'is that the integrity of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets. The courts will not permit a debtor to obtain relief from the bankruptcy court by representing that no claims exist and then subsequently to assert those claims for his own benefit in a separate proceeding.'"' [Citations.]" (Supra, 99 Cal.App.5th at p. 698.)
The appellate court concluded the plaintiff had taken an inconsistent position by failing to identify any cause of action against Wells Fargo while the bankruptcy petition was pending, which plaintiff had not rectified by amending her bankruptcy petition to assert claims against the bank because the bankruptcy court and creditors base their actions and decisions on disclosures during the bankruptcy process. (Miyahara, supra, 99 Cal.App.5th at pp. 698-700.) The appellate court elaborated that by confirming the plaintiff's plan, the bankruptcy court had accepted the plaintiff's representation by omission that she had no claims against Wells Fargo. (Id. at p. 701.)
The appellate court, however, also concluded the trial court erred in finding as a matter of law that the plaintiff's bankruptcy petition was not the product of mistake or inadvertence. (Miyahara, supra, 99 Cal.App.5th at pp. 701-703.) Thus, the trial court should have allowed the plaintiff leave to amend to allege mistake or inadvertence. (Id. at p. 703.)
It is undisputed Crosbie took two inconsistent positions because on his 2011 bankruptcy schedules, he identified no claims against the Bank challenging the 2006 DOT. It is undisputed the bankruptcy court accepted Crosbie's position by omission when it discharged his bankruptcy. In his reply brief, Crosbie states (without legal support) that a bankruptcy action is not a legal action. He is incorrect. (See Gottlieb v. Kest, supra, 141 Cal.App.4th at p. 137 [indicating judicial estoppel may apply based on omissions in the bankruptcy court].) Thus, the sole issue before us is whether the trial court erred in denying Crosbie leave to amend the complaint to assert his omission of claims against the Bank on his bankruptcy schedules was the product of mistake. As set forth below, it did not err.
B. Allowing Crosbie To Amend To Allege Mistake Would Have Transgressed the Rule Against Sham Pleadings
We conclude the trial court did not abuse its discretion in denying Crosbie leave to amend his 2019 complaint to assert mistake in failing to list on his 2011 bankruptcy schedules his claims against the Bank challenging the DOT as fraudulent. Granting Crosbie the opportunity to amend the 2019 complaint to allege that he did not learn of the DOT or his estranged wife's fraud until 2017 or 2018 would contradict facts pleaded in an earlier complaint and would thus be a sham pleading.
Crosbie previously alleged in his 2013 first amended complaint that he "executed" the DOT. (See Factual &Procedural Background, part 2, ante.) This allegation is fatal to his being able to amend his 2019 complaint to assert mistake based on a forged signature on the very DOT he admitted in the prior pleading that he had executed. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877.) "When the plaintiff pleads inconsistently in separate actions, the plaintiff's complaint is nothing more than a sham that seeks to avoid the effect of a demurrer. [Citations.] Under such circumstances, the court will disregard the falsely pleaded facts and affirm the demurrer." (Id. at pp. 877-888; see also Henry v. Clifford (1995) 32 Cal.App.4th 315, 322-323.)
C. Crosbie Cannot Assert a Viable Cause of Action Because His Remaining Theories Are Inconsistent with Prior Pleadings or Exhibits Attached to His Complaint
Other than his estranged wife's alleged forgery of his signature on the DOT of which Crosbie claims he learned only in 2017 or 2018, Crosbie identifies no other mistake that prevented him from listing his claims against the Bank on his 2011 bankruptcy schedules. He does not challenge any other element of judicial estoppel. Crosbie thus demonstrates no error in the trial court's finding that his lawsuit is barred by judicial estoppel. Crosbie, as plaintiff, bears the burden to demonstrate he could amend the complaint to assert a viable cause of action, but he has made no such argument. (Czajkowski v. Haskell &White, LLP, supra, 208 Cal.App.4th at p. 173.)
Crosbie's allegations not based on his purported forged signature also cannot support a viable cause of action without conflicting with judicially noticed documents. In the prior appeal, we noted Crosbie had alleged the Bank breached a "stipulation filed in Crosbie's bankruptcy proceedings that barred the Bank from initiating foreclosure proceedings before September 26, 2019." (Crosbie I, supra, B305085, at p. 4, CT 35.) This allegation does not support any cause of action because it is inconsistent with the bankruptcy court's order, which bars only the sale of the property prior to September 26, 2019. The order does not prevent the Bank from initiating foreclosure proceedings prior to September 26, 2019. For purposes of evaluating a demurrer, this court need not accept an allegation inconsistent with an exhibit to the complaint. (Smyth v. Berman (2019) 31 Cal.App.5th 183, 191 [appellate court disregards any allegation in the complaint inconsistent with judicially noticed facts]; Nolte v. Cedars-Sinai Medical Center, supra, 236 Cal.App.4th at p. 1406 [facts appearing in exhibits attached to complaint are given precedence over allegations in complaint].)
In the prior appeal, we also noted Crosbie "suggests the Bank lacks the authority to enforce the deed of trust because it did not originate the underlying loan or establish that the note or deed of trust was assigned to the Bank." (Crosbie I, supra, B305085, at p. 4.) Specifically, in the "introduction" to the 2019 complaint, Crosbie alleges that the Bank lacked "legal standing in foreclosing Plaintiff's property." That allegation is inconsistent with Crosbie's stipulation described in the bankruptcy court order attached to his 2019 complaint. Specifically, Crosbie stipulated the Bank "may enforce its remedies to foreclose upon and obtain possession of the Property in accordance with applicable nonbankruptcy law ...." Further in his 2012 action, Crosbie alleged the Bank had an interest in the Hawthorne Property. In sum, Crosbie's "suggest[ion]" the Bank lacked authority to enforce the DOT does not support a viable cause of action because it is inconsistent with his stipulation in the bankruptcy court and directly contradicted by his first amended complaint in the earlier 2012 superior court action. (Smyth v. Berman, supra, 31 Cal.App.5th at p. 191.)
Because we conclude the trial court did not err in sustaining the demurrer, we do not consider the Bank's additional arguments in favor of that ruling. The Bank requests we award it attorney fees. Because the Bank fails to cite to legal theory supporting that request, we do not address it further. (See Meda v. AutoZone, Inc. (2022) 81 Cal.App.5th 366, 383 [matters not properly raised or that lack adequate legal discussion are forfeited].)
D. Crosbie's Remaining Arguments Fail To Demonstrate Error
We agree with the Bank that these arguments are forfeited for failure to cite to the record or provide legal argument. (Hernandez v. First Student, Inc. (2019) 37 Cal.App.5th 270, 277 [" 'When an appellant raises an issue "but fails to support it with reasoned argument and citations to authority, we treat the point as waived."' "].) As explained in the text, Crosbie's arguments also fail on the merits.
Crosbie argues the trial court erred in relitigating the demurrer. The argument lacks merit because we remanded the case to the trial court to consider in the first instance grounds in the Bank's demurrer other than res judicata. (Crosbie I, supra, B305085, at p. 16.)
Crosbie argues the trial court was biased because it did not consider evidence he presented regarding his estranged wife's alleged fraud. Crosbie further contends the trial court's order is incomplete because it does not address his claim that he did not sign the DOT. Neither argument has merit because the court concluded Crosbie was judicially estopped from challenging the alleged fraud and could not amend his complaint to disclaim a DOT that he admitted in a prior pleading he had executed.
Although Crosbie asserts the trial court "discriminated" against him because he is a self-represented litigant, the record does not support that contention. The trial court's order recognized Crosbie's pro per status and reflects that the trial court considered Crosbie's arguments fully.
The trial court did not "interfere" with the federal process when it determined Crosbie was judicially estopped from asserting his signature on the DOT was forged. To the contrary, the trial court was merely ruling on the consequence of Crosbie's representations in his 2011 bankruptcy schedules. It was not interfering with proceedings in the bankruptcy court.
Crosbie argues the trial court violated his due process rights because it did not hold a trial or allow him to file a summary judgment motion. Sustaining a demurrer is not tantamount to a violation of due process; it is part of the civil process when a complaint fails to allege a viable claim either directly or by operation of a complete defense. Once a demurrer is sustained without leave to amend, the trial court may dismiss the lawsuit. (Code Civ. Proc., § 581, subd. (f).)
Crosbie argues the trial court improperly dismissed parties the clerk of the court had previously defaulted. This unsupported assertion is incorrect. The judgment of dismissal included only the Bank.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal.
We concur: ROTHSCHILD, P. J., CHANEY, J.