This case was last updated from Los Angeles County Superior Courts on 04/26/2022 at 16:49:54 (UTC).

UNITED LENDER, LLC VS LORENZO ESPINOZA, ET AL.

Case Summary

On 04/25/2022 UNITED LENDER, LLC filed a Property - Other Real Property lawsuit against LORENZO ESPINOZA. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******3690

  • Filing Date:

    04/25/2022

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiff

UNITED LENDER LLC

Defendants

ESPINOZA LORENZO

SBS TRUST DEED NETWORK

STONE SAM INC. AKA SAM STONE INC.

Attorney/Law Firm Details

Plaintiff Attorneys

SINCLAIR KEVIN S.

STEINBERG ANDREW H.

 

Court Documents

Unknown - ALTERNATE DISPUTE RESOLUTION PACKET

4/25/2022: Unknown - ALTERNATE DISPUTE RESOLUTION PACKET

Unknown - FIRST AMENDED GENERAL ORDER RE: MANDATORY ELECTRONIC FILING

4/25/2022: Unknown - FIRST AMENDED GENERAL ORDER RE: MANDATORY ELECTRONIC FILING

Voluntary Efficient Litigation Stipulation Packet

4/25/2022: Voluntary Efficient Litigation Stipulation Packet

Notice of Case Assignment - Unlimited Civil Case

4/25/2022: Notice of Case Assignment - Unlimited Civil Case

Summons - SUMMONS ON COMPLAINT

4/25/2022: Summons - SUMMONS ON COMPLAINT

Civil Case Cover Sheet

4/25/2022: Civil Case Cover Sheet

Complaint

4/25/2022: Complaint

 

Docket Entries

  • 04/25/2022
  • DocketComplaint; Filed by United Lender, LLC (Plaintiff)

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  • 04/25/2022
  • DocketSummons (on Complaint); Filed by United Lender, LLC (Plaintiff)

    Read MoreRead Less
  • 04/25/2022
  • DocketCivil Case Cover Sheet; Filed by United Lender, LLC (Plaintiff)

    Read MoreRead Less
  • 04/25/2022
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

    Read MoreRead Less
  • 04/25/2022
  • DocketFirst Amended General Order re: Mandatory Electronic Filing; Filed by Clerk

    Read MoreRead Less
  • 04/25/2022
  • DocketVoluntary Efficient Litigation Stipulation Packet; Filed by Clerk

    Read MoreRead Less
  • 04/25/2022
  • DocketAlternate Dispute Resolution Packet; Filed by Clerk

    Read MoreRead Less

Tentative Rulings

Case Number: *******3690 Hearing Date: June 9, 2022 Dept: 76

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument should notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

This is an action to quiet title to the subject property against a deed of trust which was deemed to have been reconveyed by a prior judgment, but which was re-recorded by Defendants.

Plaintiff United Lender, LLC moves for the issuance of a preliminary injunction.

TENTATIVE RULING

Plaintiff United Lender, LLC’s motion for a preliminary injunction is GRANTED. The injunction shall not become effective until Plaintiff posts a $500.00 bond.

ANALYSIS

Motion For Preliminary Injunction

Request For Judicial Notice

Plaintiff requests that the Court take judicial notice of the following: (1) The deed of trust purported to secure a $20,000 debt in favor of Stone Sam, Inc. recorded as Instrument No. 01-1886201 in the Official Records of Los Angeles County on

October 4, 2001; (2) The Quiet Title Judgment which was recorded in the Official Records of Los Angeles County on October 5, 2007 as Instrument No. 20072294980; (3)

The deed of trust which was recorded on November 25, 2019 as Instrument No.

20191295389 in the Official Records of Los Angeles County; (4) The trustee’s deed upon sale recorded as Instrument No. 20201375110 on November 2, 2020 in the Official Records of Los Angeles County; (5) The assignment of deed of trust recorded on February 16, 2022 as Instrument No. 20220191456 in the Official Records of Los Angeles County; (6) The substitution of trustee recorded as Instrument No. 20220267362 in the Official Records of Los Angeles County on March 8, 2022; (7) The notice of default and election to sell recorded on March 8, 2022 as Instrument No. 20220267363 in the Official Records of Los Angeles County; (8) The Entity Details from the State of Delaware regarding Stone Sam Inc. confirming that Stone Sam Inc.’s status is void or tax delinquent since March 1, 2002; (9) The Business Search – Entity Detail for Stone Sam Inc. from the California Secretary of State’s website.

Decl.

Requests Nos. 1 – 7 are GRANTED. The Court may take judicial notice of recorded documents. (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549, overruled on other grounds in Black Sky Capital, LLC v. Cobb (2019) 7 Cal.5th 156, 165; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 263, 274). Requests Nos. 8 and 9 are GRANTED. The Court may take judicial notice of a business entity’s corporate status as reflected in the Secretary of State’s records. (Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1286; Pedus Bldg. Servs. v. Allen (2002) 96 Cal.App.4th 152, 156 n.2.)

Discussion

Plaintiff United Lender, LLC moves for the issuance of a preliminary injunction restraining defendants Lorenzo Espinoza, Stone Sam, Inc., SBS Trust Deed Network, (collectively, “Defendants”) and anyone acting or purporting to act on their behalf from proceeding forward with any nonjudicial foreclosure sale of the real property located 422 N. Soto Street, Los Angeles, California 90033 until this matter has been fully adjudicated on the merits.

The Complaint sets forth a causes of action for quiet title, declaratory relief, injunctive relief and cancellation of instrument. Plaintiff prays for judgment as follows:

For a judgment quieting title to the Property establishing that (1) United Lender owns a 100% fee simple interest in the Property as of October 29, 2020 (i.e., the date of the trustee’s sale referenced above); (2) United Lender owns the Property free and clear of the Stone Sam Deed of Trust or any other claim of lien; (3) that none of Defendants has any title, estate, interest, lien, or right in the Property;

For a preliminary and permanent injunction enjoining SBS from conducting a non-judicial foreclosure sale of the Property, and enjoining the rest of Defendants from non-judicially foreclosing on the Property;

For a judicial declaration of its interest in the Property pursuant to Cal. Code Civ. Proc. 1060, including that (1) United Lender owns a 100% fee simple interest in the Property as October 29, 2020 (i.e., the date of the trustee’s sale referenced above); (2) United Lender owns the Property free and clear of the Stone Sam Deed of Trust or any other claim of lien; (3) that none of Defendants has any title, estate, interest, lien, or right in the Property (such that Espinoza not the beneficiary of, or holder of, any lien against the Property)

For an order pursuant to Cal. Civ. Code 3412 cancelling the Assignment of DOT, the Substitution of Trustee, and the Notice of Default;

(Complaint, Prayer, 31-34.)

Requirements For Issuance Of A Preliminary Injunction

“In determining whether to issue a preliminary injunction, the trial court considers two related factors: (1) the likelihood that the plaintiff will prevail on the merits of its case at trial, and (2) the interim harm that the plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction.” (14859 Moorpark Homeowner's Assn. v. VRT Corp. (1998) 63 Cal.App.4th 1396, 1402 [74 Cal. Rptr. 2d 712].) “The latter factor involves consideration of such things as the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving the status quo.” (Abrams v. St. John's Hospital & Health Center (1994) 25 Cal.App.4th 628, 636 [30 Cal. Rptr. 2d 603].)

“The determination whether to issue a preliminary injunction requires the trial court to exercise its discretion by considering and weighing ‘“two interrelated factors,” specifically, the likelihood that plaintiffs will prevail on the merits at trial, and the comparative harm to be suffered by plaintiffs if the injunction does not issue against the harm to be suffered by defendants … if it does.’” (Right Site Coalition v. Los Angeles Unified School Dist. (2008) 160 Cal.App.4th 336, 338 [72 Cal. Rptr. 3d 678].) “The more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue. [Citation.] Further, ‘if the party seeking the injunction can make a sufficiently strong showing of [*1351] likelihood of success on the merits, the trial court has discretion to issue the injunction notwithstanding that party's inability to show that the balance of harms tips in his [or her] favor.’” (Id. at pp. 338–339.)

The determination of whether to grant a preliminary injunction generally rests in the sound discretion of the trial court. (14859 Moorpark Homeowner's Assn. v. VRT Corp, supra, 63 Cal.App.4th at p. 1402.) “‘Discretion is abused when a court exceeds the bounds of reason or contravenes uncontradicted evidence.’” (Id. at p. 1402.)

. . .

B. Balancing of Harms Favor Take Me Home

A trial court's decision on a motion for a preliminary injunction “‘does not amount to an adjudication of the ultimate rights in controversy. It merely determines that the court, balancing the respective equities of the parties, concludes that, pending a trial on the merits, the defendant should or that he should not be restrained from exercising the right claimed by him [or her].’ [Citations.] The general purpose of such an injunction is the preservation of the status quo until a final determination of the merits of the action. [*1353] [Citations.] Thus, the court examines all of the material before it in order to consider ‘whether a greater injury will result to the defendant from granting the injunction than to the plaintiff from refusing it … .’ [Citations.] In making that determination the court will consider the probability of the plaintiff's ultimately prevailing in the case and, it has been said, will deny a preliminary injunction unless there is a reasonable probability that plaintiff will be successful in the assertion of his rights. [Citations.] … ‘In the last analysis, the trial court must determine which party is the more likely to be injured by the exercise of its discretion [citation] and it must then be exercised in favor of that party [citation].’” (Continental Baking Co. v. Katz (1968) 68 Cal.2d 512, 528 [67 Cal. Rptr. 761, 439 P.2d 889].)

(Take Me Home Rescue v. Luri (2012) 208 Cal.App.4th 1342, 1350-53.)

"A trial court may not grant a preliminary injunction, regardless of the balance of interim harm, unless there is some possibility that the plaintiff would ultimately prevail on the merits of the claim. [Citation.]" (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.)

1. Re: the likelihood that the plaintiff will prevail on the merits of its case at trial.

Plaintiff has demonstrated a strong likelihood of prevailing on the merits of this case at trial.

In 2007, Judge Duffy-Lewis entered a quiet title judgment confirming that a deed of trust recorded against the Property in 2001 as Instrument No. 01-1886201 purporting to secure a $20,000 loan that Stone Sam allegedly made to Marcelina Galarzo, the then-owner of the subject property was null, void, and of no further force or effect. (Steinberg Decl., 3, 4; Exh. 1, RJN, Exhs.1, 2.) The Quiet Title Judgment specifically recites that the “‘Short Form Deed of Trust and Assignment of Rents’, dated September 21, 2001, and recorded with the Los Angeles County Recorder’s Office as 01-1886201, and associated Note secured by said Deed be deemed fully reconveyed, without warranty, paid off by Plaintiff, as of December 18, 2002.” (RJN, Exh. 2) That judgment is now final and non-appealable.

Fifteen years later, Defendants are now attempting to foreclose on that extinguished deed of trust. Because there is a final, non-appealable judgment extinguishing the 2001 deed of trust, there is no lien against the Property upon which Defendants can foreclosure. And, because the judgment quieting title was publicly recorded, United Lender was a bona fide purchaser for value when it acquired the Property.

The doctrine of the "bona fide purchaser" can be generally described as follows: A purchaser or encumbrancer who pays valuable consideration for his interest in real property in good faith and who records his interest, receives his interest free and clear of all prior unrecorded claims in [*690] the property which are unknown to him. (Civ. Code, 1107, 1214, 1217; 2 Miller & Starr, Current Law of Cal. Real Estate (1977) 11:27, pp. 50-51; 4 Witkin, Summary of Cal. Law (9th ed. 1987) Real Property, 205-209, pp. 411-414.)

(Reiner v. Danial (1989) 211 Cal. App. 3d 682, 689-90 )

[T]he two elements of being a BFP are that the buyer (1) purchase the property in good faith for value, and (2) have no knowledge or notice of the asserted rights of another. (14 Powell on Real Property (1996) Recording Acts and Priorities, 82.01[2], p. 82-12.)

(Melendrez v. D & I Inv., Inc. (2005) 127 Cal. App. 4th 1238, 1251 [italics in original, bold emphasis added].)

Here, Plaintiff acquired the subject property by way of a trustee’s deed upon sale recorded on November 2, 2020. (RJN, Exh. 4.) The Trustee’s Deed Upon Sale recites that the amount paid by United Lender, LLC was $1,151,177.10. As such, Plaintiff acquired the subject property as a bona fide purchaser, free and clear of any unrecorded interests. As noted above, the recorded Quiet Title Judgment declared the Deed of Trust recorded as Instrument No. 01-1886201 as null and void, and of no further force and effect.

It was not until after Plaintiff had acquired title to the subject property that Defendant Stone Sam Inc. purported to assign the Deed of Trust recorded as instrument No. 01-1886201 to Defendant Lorenzo Espinoza, as reflected in the Assignment of Deed of Trust, recorded on February 16, 2022. (RJN, Exh. 5[1].) As noted, the Deed of Trust recorded as instrument No. 01-1886201 had been declared as null and void, and of no further force and effect by virtue of the recorded Quiet Title Judgment. Thus, there could be no subsequent assignment of the Deed of Trust.

On March 8, 2022, Lorenzo Espinoza recorded a Substitution of Trustee, substituting Defendant S.B.S. Trust Deed Network as Trustee under the Deed of Trust. (RJN, Exh. 6.) On March 8, 2022, S.B.S. Trust Deed Network recorded a Notice of Default and Election To Sell Under Deed of Trust, regarding the Deed of Trust recorded as instrument No. 01-1886201. (RJN, Exh. 7.) Given that the Deed of Trust had been declared as null and void, and of no further force and effect by virtue of the recorded Quiet Title Judgment, there is no right to foreclose on that Deed of Trust.

Defendants did not file an opposition.

Given the foregoing, Plaintiff has demonstrated a strong likelihood of prevailing on the merits of its claims at trial.

2. Re: the interim harm that the plaintiff is likely to sustain if the injunction is denied as compared to the harm that the defendant is likely to suffer if the court grants a preliminary injunction.

Here, if the preliminary injunction is denied, Plaintiff will lose the property if it does not win a bid on it at the trustee’s sale and, if Plaintiff loses the property, may end up having to sue the purchaser and any successor in interest recover such property.

On the other hand, Defendants is only likely to suffer a delay in receiving money at the trustee’s sale, as to which there is a high likelihood it would not be an authorized sale

Defendants did not file an opposition.

The Court finds that the balance of the harms favors Plaintiff.

3. Re: Bond.

Plaintiff requests a nominal undertaking of $500.

Code of Civil Procedure section 529 states in relevant part: "On granting an injunction, the court or judge must require an undertaking on the part of the applicant to the effect that the applicant will pay to the party enjoined any damages, not exceeding an amount to be specified, the party may sustain by reason of the injunction, if the court finally decides that the applicant was not entitled to the injunction . . .." (Code Civ. Proc., 529, subd. (a).)

(Condor Enterprises, Ltd. v. Valley View State Bank (1994) 25 Cal.App.4th 734, 741.)

However, “the injunction bond requirement of section 529 can be waived or forfeited by the party to be enjoined.” (Smith v. Adventist Health System/West (2010) 182 Cal.App.4th 729, 744.)

“ “‘[T]he trial court's function is to estimate the harmful effect which the injunction is likely to have on the restrained party and to set the undertaking at that sum.’” ”(Citations omitted.)” (Oiye v. Fox (2012) 211 Cal. App. 4th 1036, 1061.) Where there is a strong showing of likelihood on the merits, this is relevant to the amount of the bond. (Id. at 1061-62 [approving nominal bond amount of $1,000].)

Here, Plaintiff has made a strong showing of likelihood on the merits, and Defendants have not demonstrated measurable harm by virtue of a delayed trustee’s sale.

As such, the bond amount is set at $500.

Conclusion

The motion for a preliminary injunction is GRANTED. The injunction shall not become effective until Plaintiff posts a $500.00 bond.


[1] The Court does not address Plaintiff’s additional argument that Stone Sam is a suspended corporation because it is not necessary to the analysis.



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