Martinez v. The Bank of New York Mellon CA6
H047862
| Cal. Ct. App. | Aug 11, 2021Background
- Plaintiffs Petra Martinez and Stanley Atkinson previously owned a Salinas property secured by a loan; Martinez defaulted and a nonjudicial foreclosure sale occurred in March 2018.
- The Bank of New York Mellon (Bank) was assigned the deed of trust; the property was later conveyed to U4RIC, which obtained possession via unlawful detainer.
- Martinez and Atkinson litigated multiple prior wrongful-foreclosure suits (2009–2018); an earlier 2018 dismissal by this court upheld the foreclosure and rejected plaintiffs’ lack-of-authority theories.
- In Sept. 2019 plaintiffs sued Bank and U4RIC again, alleging among other claims that a 2016 substitution of trustee was forged and the sale was invalid.
- The trial court sustained Bank’s demurrer without leave to amend on res judicata/collateral estoppel grounds, declared the plaintiffs vexatious litigants, imposed a prefiling bond/order, and entered judgment of dismissal.
- Plaintiffs appealed without first obtaining the trial-court leave required by the prefiling order; the Court of Appeal declined to dismiss the appeal on that basis and affirmed the judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether demurrer should have been overruled (res judicata/issue preclusion) | The 2019 complaint raises new evidence (handwriting expert) and new causes of action tied to alleged forgery | Prior suits resolved the same claims/issues; prior final judgments bar relitigation | Demurrer affirmed: claim and issue preclusion apply; suit barred |
| Whether the appeal must be dismissed for failure to get leave under a prefiling order | Plaintiffs did not seek leave but proceeded | Bank argued the appeal is barred on its face by the prefiling order | Appeal not dismissed; court permitted merits review because parties fully briefed and plaintiffs showed arguable merit |
| Whether alleged forgery of the 2016 substitution of trustee avoids preclusion | Expert declaration shows forgery, so foreclosure invalid | The forgery issue was or could have been litigated earlier; new evidence doesn’t evade preclusion | Preclusion bars relitigation of the forgery claim; new evidence insufficient to overcome bar |
| Whether trial court abused discretion by refusing leave to amend | Plaintiffs could cure defects by amendment | Plaintiffs failed to show any amendment could cure legal defects | No abuse of discretion; plaintiffs did not demonstrate reasonable possibility of curing defects |
Key Cases Cited
- Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (2016) (standards for reviewing demurrer and judicially noticeable facts)
- Boeken v. Philip Morris USA, Inc., 48 Cal.4th 788 (2010) (overview of claim and issue preclusion as aspects of res judicata)
- Gillies v. JPMorgan Chase Bank, N.A., 7 Cal.App.5th 907 (2017) (res judicata promotes finality and curtails multiple litigation)
- Blank v. Kirwan, 39 Cal.3d 311 (1985) (plaintiff bears burden to show reasonable possibility amendment could cure defects)
- Direct Shopping Network, LLC v. James, 206 Cal.App.4th 1551 (2012) (a party cannot withhold issues for consecutive suits or rely on subsequently marshaled evidence to escape preclusion)
- McColm v. Westwood Park Ass’n, 62 Cal.App.4th 1211 (1998) (procedures and effects of filing while subject to a prefiling order)
- Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., 140 S.Ct. 1589 (2020) (observations on claim preclusion and claims predicated on postdating events)