Gillies v. JPMorgan Chase Bank, N.A.
213 Cal. Rptr. 3d 210
| Cal. Ct. App. | 2017Background
- Douglas Gillies obtained a WaMu-backed $500,000 loan in 2003 secured by a deed of trust on his Santa Barbara home; he defaulted in 2009.
- Chase acquired WaMu’s assets and mortgage servicing rights under a Purchase and Assumption Agreement in 2008.
- Multiple trustee’s sale notices were recorded between 2009 and 2015; Gillies repeatedly sued challenging foreclosure procedures and Chase’s standing.
- Prior suits: two state-court dismissals affirmed by this court (Gillies I, II), and a federal dismissal affirmed by the Ninth Circuit (Gillies III).
- In 2015 Gillies filed the present action alleging HBOR violations (dual-tracking, lack of single point of contact), lack of standing, improper substitution of trustee, fraud (misspelling of his name), and sought injunctive relief; the trial court sustained Chase’s demurrer without leave to amend and dissolved the TRO.
- The Court of Appeal affirmed, holding Gillies failed to plead viable claims and that res judicata principles bar relitigation of his “same primary right.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HBOR dual-tracking (§ 2923.6) and single point of contact (§ 2923.7) | Gillies alleged Chase proceeded with foreclosure while a loan-mod application was pending and failed to provide one SPOC | Chase produced a SPOC, Gillies failed to accept the modification within the statutory 14-day window and ignored counsel’s instruction on document submission | Dismissed: pleadings show Chase provided a SPOC and Gillies did not accept the modification within the permissible period, so no HBOR violation was stated |
| Standing to foreclose | Chase lacked standing because the loan/note was likely sold into a securitized trust before Chase’s 2008 acquisition | Chase succeeded to WaMu’s interest under the Purchase and Assumption Agreement and thus has beneficiary rights | Dismissed: speculative allegations insufficient; judicial notice of the Agreement supports Chase’s succession to WaMu’s interests |
| Substitution of trustee | Because Chase is not beneficiary, it could not validly substitute MTC as trustee | Chase is the successor beneficiary and can substitute trustee | Dismissed: based on succession to WaMu’s interest, substitution challenge fails |
| Fraud based on name misspelling in notices | Repeated notices spelled his first name as “Dougles,” constituting fraud | The misspelling was a clerical error; notices included correct address and surname so no confusion | Dismissed: allegation too general and trivial; no reasonable person would be misled |
| Injunctive relief / Preclusive effect of prior judgments | Sought preliminary injunction and other relief to halt foreclosure | Prior final judgments and federal dismissal; res judicata and court discretion defeat injunction | Denied: trial court properly considered declarations and denied injunction; res judicata and finality principles bar relitigation of the same primary right |
Key Cases Cited
- Ben-Zvi v. Edmar Co., 40 Cal.App.4th 468 (1995) (contract law protects parties’ reasonable expectations)
- Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (2016) (standard for reviewing demurrers in foreclosure-related claims)
- Rossberg v. Bank of America, N.A., 219 Cal.App.4th 1481 (2013) (plaintiff bears burden to show facts establishing each element and possibility to amend)
- Mycogen Corp. v. Monsanto Co., 28 Cal.4th 888 (2002) (res judicata prevents splintered litigation of same primary right)
- Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788 (2010) (primary-right theory for claim preclusion)
- Jessen v. Keystone Savings & Loan Assn., 142 Cal.App.3d 454 (1983) (trial court may consider verified pleadings and declarations when ruling on preliminary injunction)