Copelin v. Great Western Capital LLC et al

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Carol G. Unruh, #102929
LAW OFFICES OF CAROL G. UNRUH
3000 S. Robertson Blvd., Suite 215
Los Angeles, CA 90034
Tel(310) 842-9660, Fax (310) 842-9664
cgunruh@sbcglobal.net
Attorney for Defendants
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re
AVIS RICHELLE COPELIN,
Debtor
AVIS RICHELLE COPELIN,
Plaintiff
vs.
GREAT WESTERN CAPITAL, LLC,
AMBER INVESTMENTS GROUP, INC.,
NARA INVESTMENTS GROUP, LLC,
U.S. BANK, N.A., AS TRUSTEE
FOR THE FIRST FRANKLIN MORT-
GAGE PASS THROUGH CERTIFICATE
SERIES 2005-FF10, SELECT
PORTFOLOIO SERVICING, INC.,
BANK OF AMERICA, N.A., DOES 1
TO 20,
Defendant(s)
Chapter 11
Case No. 2:13-bk-32580 RK
Adv. No. 2:14-ap-01250 RK
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
Date: 11/05/14
Time: 1:30 P.M.
Ctrm: 1675 Roybal Bldg.
After consideration of the papers in support of and in
opposition, if any, to Defendants’ Motion For Summary Judgment and
oral argument, if any, the court determines that the following
facts have been established as:
FILED & ENTERED
JAN 14 2015
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	tatum
CHANGES MADE BY COURT
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UNCONTROVERTED FACTS
1. On August 30, 2005, Plaintiff herein, Avis Richele Copelin,
executed a promissory note in the amount of $1,200,000.00 secured
by a first deed of trust in favor of lender First Franklin
regarding that certain real property located at 4629 Talofa Ave.,
Toluca Lake, CA 91602. APN 2420-020-011 (“the property”). The
deed of trust was recorded on September 2, 2005 in the Office of
the Recorder of Los Angeles County as recording number 05-
2125528.
[Defendants’ Request For Judicial Notice, Exhibit 1].
2. On August 30, 2005, Plaintiff herein, Avis Richelle Copelin,
executed a promissory note in the amount of $300,000.00 secured
by a second deed of trust in favor of First Franklin regarding
the property. The deed of trust was recorded on September 2, 2005
in the Office of the Recorder of Los Angeles County as recording
number 05 2125529.
[Defendants’ Request For Judicial Notice, Exhibit 2].
3. On March 27, 2007, Plaintiff herein, Avis Richelle Copelin
executed a grant deed transferring her interest in the property
to Holy Nation Entertainment, Inc. The grant deed was recorded on
December 10, 2007 in the Office of the Recorder of Los Angeles
County as recording number 20072705526.
[Defendants’ Request For Judicial Notice, Exhibit 3].
4. On September 15, 2008, Plaintiff herein, Avis Richelle
Copelin, executed a grant deed transferring her interest in the
property to Armen Hovhannisian. The grant deed was recorded on
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September 18, 2008 in the Office of the Recorder of Los Angeles
County as recording number 20081687049.
[Defendants’ Request For Judicial Notice, Exhibit 4].
5. On December 22, 2008, the beneficiary of the promissory note
and second deed of trust on the property exercised the power of
sale contained therein and conducted a foreclosure sale. The
purchaser of the property was Siboney A. Monge, Trustee to the
Talofa 4629 Trust. A Trustee’s Deed Upon Sale was recorded on
December 24, 2008 in the Office of the Recorder of Los Angeles
County as recording number 20082254894.
[Defendants’ Request For Judicial Notice, Exhibit 5].
6. On May 7, 2009 Siboney Monge conveyed an interest in the
property to Alvina Hiznay. A Grant Deed was recorded on May 22,
2009 in the Office of the Recorder of Los Angeles County as
recording number 20090767420.
[Defendants’ Request For Judicial Notice, Exhibit 6].
7. On December 11, 2009, Alvina Hiznay executed a deed of trust
regarding the property in favor of Nicklaus Seward and Marina
Avetisyan. This junior deed of trust was recorded on December 16,
2009 in the Office of the Recorder of Los Angeles County as
recording number 20091911259.
[Defendants’ Request For Judicial Notice, Exhibit 7].
8. On July 7, 2010, the beneficiaries of the junior deed of
trust conducted a foreclosure sale of the property. Title to the
property was conveyed to beneficiaries Nicklaus Seward and Marina
Avetisyan. A Trustee’s Deed upon Sale was recorded on July 12,
2010 in the Office of the Recorder of Los Angeles County as
recording number 20100943787.
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[Defendants’ Request For Judicial Notice, Exhibit 8].
9. On April 18, 2011, the Superior Court Of California, County
Of Los Angeles entered a judgment in case number EC049804 (c/w
BC421897) declaring US Bank to be the beneficiary of the first
deed of trust on the property. The judgment also declared a
purported reconveyance of the deed of trust to Avis Copelin to be
a forgery, null and void, of no effect and ordered it to be
expunged from the records of the County Recorder’s Office. This
judgment was recorded on April 20, 2011 in the Office of the
Recorder of Los Angeles County as recording number 20110572273.
[Defendants’ Request For Judicial Notice, Exhibit 9].
10. On August 12, 2013, US bank, the beneficiary under the
promissory note and first deed of trust on the property,
exercised the power of sale contained therein and conducted a
foreclosure. The purchasers of the property were Great Western
Capital, LLC (40%), Amber Investments Group, Inc. (30%), and NARA
Investments Group, LLC (30%). A Trustee’s Deed upon Sale was
recorded on August 15, 2013 in the Office of the Recorder of Los
Angeles County as recording number 20131201002.
[Defendants’ Request For Judicial Notice, Exhibit 10].
Based on the foregoing uncontroverted facts, the Court
now makes its
CONCLUSIONS OF LAW
1. On August 12, 2013, Plaintiff herein, Avis Richelle
Copelin, did not have an ownership interest in the
real property located at 4629 Talofa Ave., Toluca Lake,
CA 91602, APN 2420-020-011.
2. At the time of the August 12, 2013 foreclosure sale, US
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Bank was the beneficiary of the first deed of trust executed by
Plaintiff herein, Avis Richelle Copelin, on August 30, 2005 and
recorded on September 2, 2005.
3. In this adversary proceeding, Debtor has asserted claims
for relief with respect to a certain parcel of real property
located in California in which she claimed an interest. At some
point in time, debtor had acquired title to such parcel of real
property by taking out a loan and executing a promissory note and
a deed of trust in favor of the lender with respect to such loan.
Debtor’s claims are against parties to foreclosure sales relating
to this property, including prior lenders, assignees of the deed
of trust and purchasers of the property. The gravamen of
Debtor’s claims against these parties is that they are liable to
her for wrongful foreclosure because they have no rights,
ownership or claim to the properties and that any attempted
foreclosure of the deeds of trust was illegal or fraudulent
because they are claiming through parties which did not hold the
original “wet ink signature” promissory note. In re Preston, 931
F. Supp. 2d 743 (N.D. Tex. 2013). Debtor’s claims are based on
what is known as the “show me the note” theory. Id. at 756. In
this regard, Debtor principally relies upon Carpenter v. Longan,
83 U.S. 271 (1872) for the proposition that “the note and
mortgage are inseparable; the former as essential, the latter as
an incident. An assignment of the note carries the mortgage with
it, while an assignment of the mortgage alone is a nullity.” See
ECF 106, Debtor’s Opposition to Motion to Dismiss, filed on
October 6, 2014, at 6-7. Thus, according to Debtor, based on
assignments of the deed of trust without authenticated
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endorsements of the promissory note, the foreclosing party, U.S.
Bank, an assignee of the trust deed, lacked authority to
foreclose on the property pursuant to the trust deed in a
nonjudicial foreclosure sale, and the purchasers at the
nonjudicial foreclosure sale thus did not validly purchase the
property. Id. In other words, assignment of the trust deed
(i.e., mortgage) alone without the note is a nullity based on
Carpenter v. Longan. However, while Carpenter v. Longan is a
decision of the United States Supreme Court, it is not
dispositive of otherwise constitutional state property laws. In
re Preston, 931 F.Supp.2d at 759, citing inter alia, Grayned v.
City of Rockford, 408 U.S. 104, 110 (1972)(“[I]t is not within
our power to construe and narrow state laws.”). As noted in
Preston, the Supreme Court in Carpenter v. Longan was not
construing Texas property law regarding nonjudicial foreclosure
similar to California property law here; rather, it was applying
Colorado territorial or federal common law. Id. Similarly,
Carpenter is not controlling here and does not override
California property law regarding nonjudicial foreclosure, which
permits a party to foreclose based solely on its status as an
assignee of a lender’s rights under a deed of trust, without
regard to who holds the borrower’s promissory note. California
Civil Code, § 2924 et al.; Debrunner v. Deutsche Bank National
Trust Co., 204 Cal.App.4th
433, 439-442 (2012); In re Rivera, 2014
WL 6675693 at *7 (9th
Cir. BAP 2014).
4. Under California law, for the purposes of a non-
judicial foreclosure, a party may foreclose based solely on its
status as an assignee of the lender’s rights under the deed of
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trust without regard to who holds the borrower’s note. See Siliga
v. Mortg. Electr. Registration System, Inc., 219 Cal.App.4th 75,
84 n.5 (2013); Jenkins v. JP Morgan Chase Bank, N.A., 216
Cal.App.4th 497, 512-13 (2013); Debrunner v. Deutsche Bank Nat.
Trust Co., 204 Cal. App. 4th 433, 439, 138 Cal. Rptr. 3d 830, 834
(2012)
5. Defendants herein Great Western Capital, LLC, Amber
Investments Group, Inc., and NARA Investments Group, LLC were
bona fide purchasers of the real property located at 4629 Talofa
Ave., Toluca Lake, CA 91602, APN 2420-020-011 at the foreclosure
sale conducted on August 12, 2013.
6. Upon the recording of the Trustee’s Deed upon Sale on
August 15, 2013, there arose a conclusive presumption that
defendants herein Great Western Capital, LLC, Amber Investments
Group, Inc., and NARA Investments Group, LLC were the owners of
the real property located at 4629 Talofa Ave., Toluca Lake, CA
91602, APN 2420-020-011.
7. The foreclosure sale conducted on August 12, 2013
regarding the property located at 4629 Talofa Ave., Toluca Lake,
CA 91602, APN 2420-020-011 and the recording of the Trustee’s
Deed upon Sale on August 15, 2013 did not slander title of
Plaintiff herein, Avis Richelle Copelin, to that real property.
8. The foreclosure sale conducted on August 12, 2013
regarding the real property located at 4629 Talofa Ave., Toluca
Lake, CA 91602, APN 2420-020-011 and the recording of the
Trustee’s Deed upon Sale on August 15, 2013 did not constitute an
unfair business practice or unfair competition pursuant to
California Business & Professions Code Section 17200, et seq.
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(California’s Unfair Competition Law), or any other statute.
9. Plaintiff herein, Avis Richelle Copelin, has not
tendered payment or alleged tender of payment of the underlying
debt secured by the deed of trust in favor of US Bank. In re
Mortgage Electronic Registration Systems, Inc., 754 F.3d 772,
784-786 (9th
Cir. 2014).
10. Plaintiff herein, Avis Richelle Copelin, has not
offered sufficient evidence in support of her claim for slander
of title.
11. Plaintiff herein, Avis Richelle Copelin, has not
offered sufficient evidence in support of her claim for quiet
title.
12. Plaintiff herein, Avis Richelle Copelin, has not
offered sufficient evidence in support of her claim for unfair
business practice or unfair competition pursuant to California
Business & Professions Code Section 17200, et seq. (California’s
Unfair Competition law), or any other statute.
Judgment shall be entered in Defendants’ favor consistent
herewith.
IT IS SO ORDERED.
###
Date: January 14, 2015
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