Opinion
B288520
03-03-2020
LUCERNE VALLEY, LLC, Plaintiff and Appellant, v. SUNRISE FINANCIAL, LLC et al., Defendants and Respondents.
Law Office of Bastian & Dini and Robert L. Bastian, Jr. for Plaintiff and Appellant. The Leichter Firm, Kevin J. Leichter and Andrew E. Hewitt for Defendants and Respondents Sunrise Financial, LLC and Shahram Elyaszadeh. Garrett & Tully, Robert Garrett and Scott B. Mahler for Defendant and Respondent John H. Kohan. Dunningham, Treadwell & Bartelstone and David S. Bartelstone for Defendant and Respondent Bank of the West.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC591739) APPEAL from the judgment of the Superior Court of Los Angeles County, Michael P. Linfield, Judge. Affirmed. Law Office of Bastian & Dini and Robert L. Bastian, Jr. for Plaintiff and Appellant. The Leichter Firm, Kevin J. Leichter and Andrew E. Hewitt for Defendants and Respondents Sunrise Financial, LLC and Shahram Elyaszadeh. Garrett & Tully, Robert Garrett and Scott B. Mahler for Defendant and Respondent John H. Kohan. Dunningham, Treadwell & Bartelstone and David S. Bartelstone for Defendant and Respondent Bank of the West.
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Lucerne Valley, LLC sued its mortgage broker, alleging causes of action including breach of contract, breach of fiduciary duty, fraud, and quiet title. Lucerne alleged its mortgage broker promised to secure refinancing for a home owned by Lucerne, but that his failure to do so caused the property to be foreclosed on and sold to a third party. Following a bifurcated bench and jury trial, the trial court entered judgment for defendants. Lucerne appeals, and we affirm.
FACTUAL AND PROCEDURAL SUMMARY
A. Background Facts
The property at issue in this dispute is a home located at 10748 Lindbrook Drive in Los Angeles. Kamran Sarbaz is the sole owner of Lucerne Valley LLC (Lucerne), which held title to the property. Lucerne took out two promissory notes secured by deeds of trust, in the original sums of $920,000 and $200,000, respectively.
In late 2012, Lucerne was delinquent on payments for both notes; the second note became due. Lucerne contacted a mortgage broker, Shahram Elyaszadeh, in an attempt to avoid foreclosure. Elyaszadeh was an agent of Sunrise Financial, LCC (Sunrise), a company owned by his wife, Yona Samih. Sunrise paid the second note and, in January 2013, Lucerne signed a $310,000 promissory note payable to Sunrise, secured by a deed of trust, which covered the loan made by Sunrise and Elyaszadeh's fee for his services. The loan was due to be repaid in six months. Lucerne claims Elyaszadeh orally promised that he would secure refinancing for Lucerne within six months. Lucerne maintains that Elyaszadeh also promised to make payments during the interim period to prevent foreclosure of the property.
From April 2013 to December 2014, Sunrise made additional payments on behalf of Lucerne on the first note, and Lucerne gave Sunrise promissory notes for these loans. Lucerne claims it understood these loans as short-term "bridge financing" while Elyaszadeh worked on securing refinancing. Elyaszadeh never obtained refinancing for Lucerne. Lucerne failed to pay back the January 8, 2013 loan from Sunrise, and on March 27, 2015, Sunrise acquired title to the property following a nonjudicial foreclosure sale. Sunrise perfected its title with a trustee's deed upon sale recorded on April 10, 2015.
On July 2, 2015, Sunrise sold the property to John A. Kohan who received a grant deed from Sunrise conveying the property to him. On July 10, 2015, Kohan filed an unlawful detainer complaint against Lucerne and Amir Sarbaz, Kamran Sarbaz's brother, who was still living at the property. On October 8, 2015, the parties entered into a stipulated judgment in the unlawful detainer action against Lucerne and Amir Sarbaz.
On August 18, 2015, Lucerne filed a complaint against Elyaszadeh, Sunrise, and Kohan, asserting causes of action for breach of contract, breach of fiduciary duty, fraud, and violation of Business and Professions Code section 17200. Lucerne also sought to vacate the trustee's deed of sale to Sunrise, to vacate the trustee's deed of sale to Kohan, and to quiet title.
Lucerne also sued Samih; Kohan's wife, Hanna Aber; the trustee of the loans at issue, Citivest Financial Service, Inc.; and a notary, Edward Mazzarino. These defendants are not a part of this appeal.
On March 16, 2016, Bank of the West, which had provided Kohan with the loan to purchase the property, filed a motion for leave to intervene and file an answer and cross-complaint against Lucerne and Kohan. Bank of the West sought declaratory relief regarding the validity, existence, and enforceability of its first trust deed lien against the property, or in the alternative, enforcement of its subrogation rights against the property. On April 14, 2016, the trial court granted Bank of the West's motion.
B. The Statute of Limitations Trial
On August 7, 2017, the trial court held a one-day bench trial on the defense of the two-year statute of limitations against Lucerne's breach of oral contract cause of action against Sunrise and Elyaszadeh. The trial court heard testimony from Kamran Sarbaz, and his brothers, Amir Sarbaz and Manoucher Sarbaz. Elyaszadeh also testified.
The trial court found that the two-year statute of limitations barred Lucerne's breach of oral contract claim because the breach occurred on July 8, 2013, but Lucerne did not file its complaint until August 18, 2015. The trial court found no equitable tolling or estoppel.
C. The Trial On The Merits
On November 13, 2017, the jury trial commenced on Lucerne's causes of action for breach of fiduciary duty against Elyaszadeh, and for fraud against Sunrise and Elyaszadeh. The Sarbaz brothers testified, as did Elyaszdeh, Samih, and Kohan.
Following Lucerne's case-in-chief, Kohan and Bank of the West moved for judgment on the equitable causes of action. The trial court granted the motion on Lucerne's causes of action to vacate the trustee's deeds of sale and for quiet title, and on Bank of the West's first cause of action for declaratory relief.
The jury trial continued. On November 17, 2017, the jury returned a complete defense verdict. The trial court entered judgment on January 4, 2018 and an amended judgment setting forth the amounts of attorneys' fees and costs on June 12, 2018.
Lucerne appealed, raising a number of issues. We affirm.
DISCUSSION
A. Denial of Ex Parte Application for Leave to Amend Complaint
Eight months after the discovery cutoff and six days before the commencement of the bench trial, Lucerne filed an ex parte application seeking leave to amend its complaint to include a cause of action against Sunrise and Elyaszedeh for violations of Civil Code section 2945 et seq., governing foreclosure consultant contracts.
The trial court denied Lucerne's request.
We review the court's ruling on a motion to amend a complaint for abuse of discretion. (See Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) Code of Civil Procedure section 473 states the governing rule: "The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars." (Branick, supra, 39 Cal.4th at p. 242, subd. (a)(1); see also Code Civ. Proc., § 576 ["[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order"].) "Leave to amend a complaint is thus entrusted to the sound discretion of the trial court . . . . 'The exercise of that discretion will not be disturbed on appeal absent a clear showing of abuse. More importantly, the discretion to be exercised is that of the trial court, not that of the reviewing court. Thus, even if the reviewing court might have ruled otherwise in the first instance, the trial court's order will yet not be reversed unless, as a matter of law, it is not supported by the record.'" (Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 506.)
"'Generally, "the trial court has wide discretion in determining whether to allow the amendment, but the appropriate exercise of that discretion requires the trial court to consider a number of factors: 'including the conduct of the moving party and the belated presentation of the amendment. [Citation.] . . . The law is well settled that a long deferred presentation of the proposed amendment without a showing of excuse for the delay is itself a significant factor to uphold the trial court's denial of the amendment. [Citation.]' [Citation.] 'The law is also clear that even if a good amendment is proposed in proper form, unwarranted delay in presenting it may—of itself—be a valid reason for denial.' [Citation.]"' [Citation.]" (Eng v. Brown (2018) 21 Cal.App.5th 675, 706-707.)
The trial court did not abuse its discretion in denying Lucerne's ex parte application for leave to amend its complaint. Seeking leave to amend a complaint after an answer has been filed requires providing notice to the adverse party, and supporting the request with a declaration explaining the effect and need for the amendment, when the party discovered the facts giving rise to the amended allegations, and why the request for amendment was not made earlier. (See Code Civ. Proc. § 473, subd. (a); see also Cal. Rules of Court, rule 3.1324.)
Lucerne's application failed to explain when it discovered the facts necessary to support its proposed amendment or why it did not seek leave to amend earlier. In its opposition to Kohan's motion for judgment on the pleadings, filed on December 9, 2016, Lucerne argued that it should be allowed to amend its complaint to assert that "Sunrise, through Elyaszadeh was acting as a mortgage foreclosure consultant within the meaning of section 2945 et seq. of the Civil Code." Thus, Lucerne appears to have known the facts to support its proposed amendment no later than December 2016, but did not seek leave to amend until August 2017. Given the absence of any explanation for Lucerne's delay, the trial court did not abuse its discretion in denying the request.
We note that Lucerne argued in its ex parte application that "[b]ased on the facts alleged in the original complaint" that Elyaszadeh and Sunrise were acting as mortgage foreclosure consultants under Civil Code section 2945. Thus, it appears Lucerne may have been aware of the facts necessary to support its proposed amendment when it filed its original complaint on August 18, 2015.
Lucerne argues the limited record on this issue, including the absence of any explanation by the trial court for its decision, supports finding error. To the contrary, "a fundamental principle of appellate procedure [is] that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment." (Jameson v. Desta (2018) 5 Cal.5th 594, 609.) On this record, appellant has failed to show any error in the trial court's ruling.
B. Pretrial Evidentiary Rulings
"'The usual purpose of motions in limine is to preclude the presentation of evidence deemed inadmissible and prejudicial by the moving party.'" (Kelly v. New West Federal Savings (1996) 49 Cal.App.4th 659, 669.) As rulings on the admissibility of evidence, they are subject to review on appeal for abuse of discretion. (See People v. Alvarez (1996) 14 Cal.4th 155, 203 ["appellate court reviews any ruling by a trial court as to the admissibility of evidence for abuse of discretion"].)
1. Kohan's motion in limine number 5
In its reply brief, Lucerne argues for the first time that the trial court erred in granting Kohan's motions in limine numbers 6 and 7. Lucerne has accordingly forfeited these arguments. (See People v. Duff (2014) 58 Cal.4th 527, 550, fn. 9; see also, People v. Alvarez, supra, 14 Cal.4th at p. 241, fn. 38.)
In his motion in limine number 5, Kohan sought to exclude evidence of irregularities in the foreclosure process and sale of the property. Kohan argued the stipulated unlawful detainer judgment he obtained against Lucerne conclusively barred Lucerne's assertions that there were any irregularities in the foreclosure process and sale; the evidence was accordingly irrelevant and should be excluded under Evidence Code section 352.
Kohan's unlawful detainer complaint against Lucerne and Amir Sarbaz was brought pursuant to Code of Civil Procedure section 1161a, subdivision (b)(3), which states a holdover tenant may be removed: "Where the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected." Kohan asserted that Sunrise acquired the property in a nonjudicial foreclosure sale in accordance with Civil Code section 2924, that Sunrise's title was perfected by the recordation of a trustee's deed upon sale on April 10, 2015, and that his title was perfected by a grant deed recorded on July 2, 2015.
While Lucerne's answer to the unlawful detainer complaint had asserted that Kohan was not a bona fide purchaser because he was aware of Sunrise's wrongful conduct at the time of purchase, the parties entered into a stipulated judgment which provided that defendants "fully and forever waive any and all rights they may have to appeal or otherwise challenge the judgment herein or any part thereof." Holdover damages, attorney's fees, and costs were awarded, and Kohan was awarded possession of the property.
Lucerne contends, without citing any legal authority, that the trial court erred in granting Kohan's motion in limine number 5.
The trial court did not err in granting Kohan's motion in limine number 5. Lucerne argues the trial court violated the "law of the case" doctrine, ignoring its earlier decision denying Kohan's motion for judgment on the pleadings. Lucerne, however, misunderstands the law of the case doctrine. Under this doctrine, "[t]he decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case." (13 Witkin Cal. Procedure (5th ed. 2008) Appeal, § 459 p. 515 (5); accord Leider v. Lewis (2017) 2 Cal.5th 1121, 1127.) The trial court's earlier decision on Kohan's motion for judgment on the pleadings is not law of the case. Even if the trial court changed its decision on the issue of res judicata when deciding Kohan's motion in limine, the trial court possessed the authority to do so. (See Darling v. Kritt (1999) 75 Cal.App.4th 1148, 1156 ["[T]he trial court retains the inherent authority to change its decision [on interim rulings] at any time prior to the entry of judgment].") Lucerne's second argument is that a judgment arising from a summary proceeding, such as an unlawful detainer action, does not operate as res judicata. Lucerne is correct that unlawful detainer proceedings are limited to "claims bearing directly upon the immediate right of possession" and have "very limited res judicata effect." (Vella v. Hudgins (1977) 20 Cal.3d 251, 255-256; see also Malkoskie v. Option One Mortgage Corp. (2010) 188 Cal.App.4th 968, 974 (Malkoskie). However, unlawful detainer proceedings pursuant to Code of Civil Procedure section 1161a, such as the proceedings in this case are an exception to the general rule; judgments from these proceedings have been held to bar "subsequent fraud or quiet title suits founded upon allegations of irregularity in a trustee's sale." (Malkoskie at p. 974)
We again note the limited record relating to the trial court's rulings on the parties' motions in limine, including the absence of a reporter's transcript. The state of the record further supports leaving undisturbed the trial court's orders challenged by Lucerne on appeal. (See Jameson v. Desta, supra, 5 Cal.5th at p. 609; see also Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 187-188 [refusing to reach merits of appellant's claims because no reporter's transcript of the pertinent proceeding or a suitable substitute was provided].)
In this case, the evidence Kohan sought to exclude at trial is related to irregularities in the foreclosure process and sale. Because the stipulated unlawful detainer judgment was pursuant to Code of Civil Procedure section 1161a subdivision (b)(3), the trial court properly excluded this evidence. (See Malkoskie, supra, 188 Cal.App.4th at p. 976 [res judicata bars a subsequent suit alleging invalidity of a foreclosure sale after a stipulated judgment was entered in an unlawful detainer action brought pursuant to Code of Civil Procedure section 1161a subdivision (b)(3)].)
Because all issues concerning the validity of the foreclosure process and title were resolved in the unlawful detainer action, we need not separately address Lucerne's challenge to the determination that Kohan was a bona fide purchaser for value.
Moreover, even if the trial court erred in granting Kohan's motion in limine, Lucerne has not established prejudice. (Code Civ. Proc., § 475 [reversal of judgment requires the error to be prejudicial in that "a different result would have been probable if such error . . . had not occurred or existed"]; see also Cal. Const., art. VI, § 13 ["[n]o judgment shall be set aside, or new trial granted, in any cause . . . for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice"].) "'The burden is on the appellant in every case to show that the claimed error is prejudicial; i.e., that it has resulted in a miscarriage of justice.' [Citation.] Injury is not presumed from error, but injury must appear affirmatively upon the court's examination of the entire record. 'But our duty to examine the entire cause arises when and only when the appellant has fulfilled his duty to tender a proper prejudice argument. Because of the need to consider the particulars of the given case, rather than the type of error, the appellant bears the duty of spelling out in his brief exactly how the error caused a "miscarriage of justice.'" [Citation.]" (In re Marriage of McLaughlin (2000) 82 Cal.App.4th 327, 337.) Lucerne's failure to "tender a proper prejudice argument" supports leaving the trial court's order undisturbed. (Ibid.)
2. Sunrise's motion in limine number 5
Lucerne suggests, in two sentences, that the trial court erred in granting Sunrise's motion in limine number 5 excluding evidence of Sunrise's alleged oral promises not to foreclose and to maintain the first note of behalf of Lucerne. Lucerne fails to present argument or authority in its opening brief in support of its argument, nor does it demonstrate any prejudice resulting from the ruling.
Notwithstanding the trial court's ruling, evidence was presented at trial that Elyaszadeh made certain promises that he would submit applications to refinance Lucerne's existing loans, but that he failed to submit any applications on behalf of Lucerne. The trial court also gave CACI instruction number 1902, which instructed the jury on the elements regarding a false promise.
Lucerne's briefing is insufficient to present an argument on appeal. Lucerne has forfeited any claim of error on this issue. (See In re S.C. (2006) 138 Cal.App.4th 396, 408 ["[I]t is appellant's burden to affirmatively show error. [Citation.] To demonstrate error, appellant must present meaningful legal analysis supported by citations to authority and citations to facts in the record that support the claim of error. [Citations.]"; see also Department of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100 Cal.App.4th 1066, 1078 ["m]ere suggestions of error without supporting argument or authority other than general abstract principles do not properly present grounds for appellate review"].)
C. Evidentiary Rulings and Jury Instruction at Trial
Lucerne complains, in three sentences, that the trial court improperly allowed defense counsel to question Amir Sarbaz about inflammatory comments he made to Samih and Kohan outside of the courtroom during the trial. Lucerne also complains that the trial court erred in instructing the jury that it could infer that Manoucher Sarbaz would have given testimony unfavorable to Lucerne's case when he failed to take the stand during defendants' case-in-chief.
The record shows that Lucerne's counsel did not object until the eighth question by defense counsel on this topic. The trial court sustained the objection, and defense counsel did not ask any more questions on this topic.
The instruction, prepared by the trial court, stated: "Mr. Manoucher Sarbaz was called to testify by plaintiff in plaintiff's case in chief on Tuesday, November 14th. Defendant wished to call Mr. Manoucher Sarbaz to testify today. However, Plaintiff's counsel and Amir Sarbaz have indicated that Mr. Manoucher Sarbaz is not in town today, and therefore, defendants cannot call him as a witness. You may but are not required to infer that Mr. Manoucher Sarbaz did not appear to testify today because his testimony would have been unfavorable to plaintiff's case." --------
Lucerne fails to present any legal analysis or to cite authority in support of its arguments, resulting in a forfeiture of any claims of error on these issues. (See In re S.C., supra, 138 Cal.App.4th at p. 408.)
DISPOSITION
The judgment is affirmed. Defendants are to recover their costs on appeal.
ZELON, Acting P. J. We concur:
SEGAL, J.
FEUER, J.