California Court of Appeals, Second District, First Division
CERTIFIED
FOR PARTIAL PUBLICATION[*]
APPEALS from orders of the Superior Court of Los Angeles
County, Nos. PC057181, PC057199, PC057291, Stephen P. Pfahler
and Melvin D. Sandvig, Judges. Affirmed in part and reversed
in part with directions.
Norminton, Wiita & Fuster, Thomas M. Norminton and
Kathleen Dority Fuster for Plaintiff and Appellant Canyon
View Limited.
McCarthy & Holthus and Melissa Robbins Coutts for
Defendant and Respondent Lakeview Loan Servicing, LLC.
McGlinchey Stafford, Sanford P. Shatz and Kevin S. Kim for
Defendants and Respondents Bank of America, N.A., and The
Bank of New York Mellon, as Trustee for the
Certificateholders CWALT, Inc., Alternative Loan Trust
2005-84 Mortgage Pass Through Certificates, Series 2005-84.
Bryan
Cave Leighton Paisner, Christopher L. Dueringer and Kazim A.
Naqvi for Defendants and Respondents Ocwen Loan Servicing,
LLC, and Power Default Services, Inc.
Katten
Muchin Rosenman, Stuart M. Richter, Gregory S. Korman, Paul
A. Grammatico and Austin T. Beardsley for Defendants and
Respondents Household Finance Corporation of California and
HSBC Mortgage Services Inc.
ROTHSCHILD, P.J.
Plaintiff
Canyon View Limited (Canyon View), a mobilehome park owner,
appeals from orders denying its motions for attorney fees and
costs under the Mobilehome Residency Law (MRL) (Civ. Code,
[1]
§ 798 et seq.), and costs under Code of Civil Procedure
section 1032. These orders stem from four actions,
consolidated for purposes of appeal, in which Canyon View
sued several entities that at one time held liens on four
mobilehomes located in Canyon View's mobilehome park: (1)
defendant and respondent Lakeview Loan Servicing, LLC
(Lakeview); (2) defendants and respondents Bank of America,
N.A. (BOA) and The Bank of New York Mellon (BONY)
(collectively, the BONY respondents); (3) defendants and
respondents Ocwen Loan Servicing, LLC (Ocwen) and Power
Default Services, Inc. (Power) (collectively, the Ocwen
respondents); and (4) defendants and respondents Household
Finance Corporation of California (Household) and HSBC
Mortgage Services Inc. (HSBC) (collectively, the Household
respondents). The actions sought to quiet title to these
homes in Canyon View after it purchased them via
MRL-regulated proceedings and public sales. Under the MRL,
the purchase of a mobilehome at such a sale extinguishes all
then-existing liens and interests in the home. After Canyon
View purchased the mobilehomes and acquired title,
respondents recorded documents that asserted liens on and
security interests in the homes. Canyon View alleged that
such documents created a cloud on title, which its lawsuits
sought to clear.
All
actions were resolved in Canyon View's favor before
trial. Thereafter, the trial court denied Canyon View's
requests for attorney fees and costs under the MRL's
attorney fees statute, which applies to actions
“arising out of ” the MRL. (§ 798.85.) It
further denied Canyon View's requests in two of the four
actions for costs under Code of Civil Procedure section 1032,
subdivision (b).
In the
published portion of this opinion, we conclude that, contrary
to the trial court's ruling, an action need not involve
the mobilehome park management-resident relationship or
landlord-tenant issues in order for it to “arise out of
” the MRL. The MRL addresses numerous issues and
rights, including the right of a purchaser at an
MRL-regulated abandonment or warehouse lien sale to take
title free and clear of any existing liens and interests,
other than a lien in favor of the state for nonpayment of
fees and penalties. (§§ 798.61, subd. (e)(4),
798.56a, subd. (e)(1).) Because Canyon View's actions
against Lakeview, the BONY respondents, and the Household
respondents were necessary to perfect Canyon View's right
to free and clear title under the MRL, they arose out of the
MRL, and Canyon View, as the prevailing party, is entitled to
recover its reasonable attorney fees and costs.
In the
unpublished portion of this opinion, we reject the trial
court's alternative bases for denying attorney fees and
costs under the MRL in all actions, reverse the trial
court's order granting the BONY respondents' motion
to strike costs in the BONY action, and affirm the
court's rulings denying Canyon View's requests for
fees and costs in the Ocwen action. As to the Ocwen action,
before Canyon View filed suit, the Ocwen respondents offered
to take all steps within their power to remove any cloud on
Canyon View's title, including executing a reconveyance
and recording a quitclaim deed. Suing the Ocwen respondents
for this same relief was therefore not necessary to enforce
Canyon View's right under the MRL to clear title; thus,
the Ocwen action did not arise out of the MRL. Accordingly,
Canyon View is not entitled to attorney fees or costs under
the MRL in that action.
As to
Canyon View's memoranda of costs, we conclude that the
trial court acted within its considerable discretion in
concluding that Canyon View was not entitled to costs in the
Ocwen action under Code of Civil Procedure section 1032,
subdivision (b). We need not address the court's refusal
to award costs under Code of Civil Procedure section 1032,
subdivision (b) in the BONY action, given our conclusion that
Canyon View is entitled to reasonable costs under the MRL in
that action.
Accordingly,
we reverse the court's orders denying Canyon View's
motions for attorney fees and costs under the MRL in the
Lakeview, BONY, and Household actions, as well as the trial
court's order granting the BONY respondents' motion
to strike costs, and direct the trial court in these three
actions to determine the amount of section 798.85 attorney
fees and costs reasonable under the circumstances. In all
other respects, we affirm.
FACTUAL
AND PROCEDURAL SUMMARY
A.
The MRL
The MRL
is a collection of statutes regulating various issues
involving mobilehomes. Although the MRL is not the only law
addressing the unique legal issues created by mobilehome
ownership and tenancy, [2] its provisions address a wide range
of such issues.
Much of
the MRL is dedicated to “ ‘ “extensively
regulat[ing] the landlord-tenant relationship between
mobilehome park owners and residents.”' ”
(SC Manufactured Homes, supra, 148 Cal.App.4th at p.
673.) These sections of the MRL address such issues as rental
agreements between mobilehome park owners and their
residents, rules and regulations in mobilehome parks, fees
and charges a mobilehome park owner may charge its residents,
utilities, rent control, and homeowners associations. (See
§§ 798.15-798.53 [MRL arts. 2-5.5]; see also
§§ 799-799.11 [MRL art. 9].) These provisions
“ ‘reflect legislative recognition of the unique
nature of mobilehome tenancies.' [Citation.] Ordinarily,
mobilehome park tenants own their homes but rent the spaces
they occupy. [Citation.] Once a mobilehome is in place in a
park, it is difficult to relocate. [Citations.] Its owner
thus “is more likely to be a long term resident.”
[Citation.] In many cases, mobilehome park tenants have
limited and undesirable options if they find “living in
the park no longer desirable, practical, or
possible....” [Citation.]' [Citation.] The MRL
provides ‘homeowners a measure of stability and
predictability in their mobilehome park residency.'
” (See SC Manufactured, supra, at p.
673, fn. omitted.)
Because
over half of the sections contained in the MRL address
relations between mobilehome park owners and residents, many
courts have focused on that relationship when describing the
MRL's scope and goals. (See, e.g., Cacho v.
Boudreau (2007) 40 Cal.4th 341, 345 (Cacho)
[the MRL “regulates relations between the owners and
the residents of mobilehome parks”]; SC
Manufactured, supra, 148 Cal.App.4th at p. 678
[“The MRL regulates the conduct between tenants and
landlords-mobilehome homeowners and residents and mobilehome
[park] management.”].)
But the
MRL also addresses other situations and serves other policy
goals that, like the goals related to tenants' rights,
arise from the unique characteristics of mobilehomes, such as
the difficulty and cost associated with moving and/or
installing a mobilehome.[3] (See § 798.55.) Most notably
for the purposes of this appeal, the MRL seeks to improve
“the flexibility and attractiveness of mobilehome
financing” and creates rights and procedures that
facilitate and encourage the purchase or other disposition of
abandoned mobilehomes. (Business and Transportation Agency,
Enrolled Bill Rep. on Assem. Bill No. 2915 (1979-1980 Reg.
Sess.) Sept. 15, 1980 at p. 3 (BTA Report); see id.
at p. 1 [noting certain amendments were “developed with
the lending industry to make mobilehomes more desirable
collateral despite their mobility”]; see also
Adamson Companies v. Zipp (1984) 163 Cal.App.3d
Supp. 1, 13-15 (Adamson) [noting legislative goal of
certain MRL provisions was “to enhance the availability
of financing of mobilehome purchasers” and “to
protect the security and ownership interests of the nontenant
owner”].) By accomplishing these goals, the MRL seeks
to address California's broader housing issues as well.
(See id. at p. 21 [Legislature was
“cognizant” while drafting MRL of the
“critical shortage of decent housing available in
particular to families with children in California”];
see BTA Report at p. 3.)
The MRL
promotes these goals in various ways. For example, article 7
of the MRL (§§ 798.70-798.83), which addresses the
transfer of mobilehomes or mobilehome parks, permits any
lienholder[4] to sell that home while it is still
installed in a mobilehome park. (§ 798.79.)
Article
6 of the MRL (§§ 798.55-798.61) addresses the
termination of mobilehome tenancies not only by granting
tenants certain rights prior to termination, but also by
requiring that mobilehome park management give notice of
termination to lienholders and afford them the opportunity to
take certain actions upon termination of a leasehold,
including “sell[ing] the obligation secured by the
mobilehome to the management, ” “foreclose[ing]
on [the] security interest, ” and selling the
mobilehome to a third party, provided the lienholder fulfills
certain duties. (§ 798.56a, subd. (a)(1)-(2).)
Relatedly,
article 6 of the MRL (§§ 798.55-798.61) also
creates procedures whereby mobilehome park management may
sell or dispose of abandoned mobilehomes. (See §
798.61.) Specifically, management must properly notice all
owners and lienholders regarding management's intention
to file a petition for declaration of abandonment.
(Id., subds. (b) & (c).) If no lienholder or
owner appears at the hearing on the petition to claim the
abandoned home (and pay all rents and fees due), the court
may issue a judgment of abandonment, following which
management may sell or otherwise dispose of the abandoned
home in compliance with MRL procedures. (Id., subds.
(e) & (f).) When management opts to sell the home, the
purchaser takes the home “free of any prior interest...
or lien.”[5] (Id., subd. (e)(4).) The MRL
expressly permits park management to purchase an abandoned
mobilehome at such a sale, and to offset from its bids the
amount management is owed under the lease.[6]
(Id., subd. (e)(2).) The MRL includes similar
procedures whereby a mobilehome park manager may acquire a
warehouse lien on an abandoned mobilehome and conduct a
warehouse lien sale, at which the purchaser takes title to
the home “whether or not there existed a [lienholder]
on this title to the mobilehome.” (§ 798.56a,
subd. (e)(1); see generally § 798.56a.)
Thus,
the MRL creates rights and protections not only for
mobilehome tenants, but also for lienholders,
“management, selling homeowners”-whether or not
they are also residents-and “purchasers” of
mobilehomes as well. (SC Manufactured,
supra, 148 Cal.App.4th at p. 674; accord,
Simandle v. Vista de Santa Barbara Associates, LP
(2009) 178 Cal.App.4th 1317, 1323 (Simandle); see,
e.g., §§ 798.61, 798.79.)
Finally,
article 8 of the MRL (§§ 798.84-798.88) addresses
civil actions to remedy particular violations of the MRL,
such as public nuisance actions based on mobilehome park
management failing to properly maintain common areas, or
substantial violations of mobilehome park rules. (See §
798.87.) Crucially for the purposes of this appeal, it also
contains an attorney fees and costs provision, which requires
a court to award reasonable attorney fees and costs to the
“prevailing party” “[i]n any action arising
out of the provisions of this chapter [i.e., the MRL].”
(§ 798.85.) For the purposes of this section, “[a]
party shall be deemed a prevailing party... if the judgment
is rendered in his or her favor or where the litigation is
dismissed in his or her favor prior to or during the trial,
” absent an agreement to the contrary. (Ibid.)
B.
The Quiet Title Actions Below
The
cases below share certain facts relevant to this appeal.
There are, however, also key factual differences between
them. We therefore provide a summary of the facts and
proceedings in each action as necessary to resolve the
issues.
1.
Canyon View
Canyon
View owns and operates Canyon View Estates, a mobilehome park
located in Santa Clarita. Canyon View owns the fee interest
in the land. It leases the lots in the park pursuant to
long-term leases to owners of mobilehomes, which are
installed on the lots.
2.
Case No. PC057181 against Lakeview and Quality Loan
Service Corporation (the Lakeview action)
In
December 2004, Canyon View leased lot 213 to Blanca Shapiro.
Also in 2004, Shapiro obtained a loan from Lakeview, secured
by a deed of trust on the mobilehome installed on lot
213.[7]
Shapiro
defaulted on her loan in 2014, and a notice of default under
the deed of trust was recorded. Also in 2014, Shapiro
breached her lease with Canyon View by failing to pay rent
and other obligations. Canyon View issued the requisite
notices to Shapiro and all lienholders, but no one cured
Shapiro's defaults under the lease.
Canyon
View initiated an abandonment proceeding under the MRL and,
in June 2014, obtained a judgment declaring the mobilehome
abandoned. As required by the MRL, Canyon View provided
notice to Shapiro and all lienholders of the abandonment
proceedings and the resulting court-ordered public sale.
Canyon View purchased the mobilehome on lot 213 at that sale
on July 2, 2014. Under the MRL, section 798.61, subdivision
(e)(4), that purchase extinguished all liens on and interests
in the mobilehome. A grant deed conveying the mobilehome to
Canyon View was recorded on July 15, 2014.
Almost
a year after Canyon View took title to the mobilehome, on May
14, 2015, Quality Loan Service Corporation (Quality), as
trustee under Lakeview's deed of trust, recorded a
rescission of the notice of default recorded in
2014.[8] The rescission notice stated that,
although Quality was not electing to foreclose on the home,
the deed of trust and all rights and obligations thereunder
“remain in force and effect, ” and that this
election “shall in no way jeopardize or impair any
right, remedy or privilege” under the deed of trust or
“alter in any respect” that deed. A corrected
version of this document recorded on May 11, 2016 contains
similar language purporting to recognize, without alteration,
the security rights in the mobilehome created by the deed of
trust.
Upon
learning that such documents had been recorded, Canyon View
sent several letters to Lakeview, Quality, and their counsel,
demanding that they take all actions necessary to remove the
cloud on Canyon View's title to the subject mobilehome,
including executing a full reconveyance and quitclaim deed.
These communications spanned several months, and the record
does not reflect whether Lakeview or Quality responded.
On July
14, 2016, Canyon View filed this action against Lakeview and
Quality to quiet title (Code Civ. Proc., § 760.010 et
seq.), seeking declaratory relief under the MRL (§
798.61; Code Civ. Proc., § 1060), and removal of the
cloud on title (§ 3412), and for relief under the unfair
competition law (UCL) (Bus. & Prof. Code, § 17200 et
seq.).
Three
months into the litigation with Canyon View, on August 17,
2016, Lakeview recorded a full reconveyance of the deed of
trust and substitution of trustee, naming itself as the new
trustee. Soon thereafter, on September 21, 2016, it recorded
a quitclaim deed in favor of Canyon View. These documents
disclaimed any and all interest Lakeview had in the
mobilehome.
On
April 3, 2017, Canyon View and Lakeview filed a stipulation
for judgment. The stipulated judgment entered by the court
that same day provides that, as a result of Canyon View
purchasing the mobilehome on lot 213 at the abandonment sale,
Canyon View owned the home, and Lakeview had no lien thereon
or interest therein. It further provided that Canyon View
would have the right to file a motion for attorney fees and
costs pursuant to section 798.85, and Lakeview would have a
right to oppose such a motion.
3.
Case No. PC057199 against the BONY respondents (the BONY
action)
In
October 2005, Dominique Reese and Donna Worthington-Reese
purchased a mobilehome on lot 332 in Canyon View Estates. The
Reeses obtained a loan secured by a deed of trust encumbering
both the mobilehome on lot 332 and the Reeses' leasehold
interest in lot 332 as well. That deed of trust was later
assigned to BONY and serviced by BOA.
The
Reeses entered into a long-term lease with Canyon View for
lot 332. In 2007, the Reeses breached their lease by failing
to make payments. Canyon View issued the requisite notices to
the Reeses and all lienholders, and no one cured the defaults
under the lease.
Canyon
View initiated abandonment proceedings under the MRL and
obtained a judgment of abandonment in April 2009. As required
by the MRL, Canyon View provided notice to the Reeses and all
lienholders of the abandonment proceedings and the resulting
court-ordered public sale. Canyon View purchased the
mobilehome on lot 332 at that sale on May 7, 2009. Under
section 798.61, subdivision (e)(4), the sale extinguished all
liens on and interests in the mobilehome. A grant deed
conveying the mobilehome to Canyon View was recorded on
February 23, 2010.
Later
on that same day, the trustee for the deed of trust recorded
a notice of trustee sale, based on the Reeses having
defaulted on their note. On March 19, 2010, the trustee
recorded a notice of default and election to sell under the
deed of trust. This notice claimed BONY held a lien on the
subject mobilehome. The trustee held a foreclosure sale, and
BONY purchased the mobilehome and leasehold interest on
September 30, 2010; the trustee's deed upon sale was
recorded on October 12, 2010. BONY never attempted to take
possession of the home.
In
February and March of 2016, Canyon View sent letters to BONY
and the trustee under the deed of trust, as well as counsel
for BOA, demanding they remove the cloud on Canyon View's
title to the mobilehome. Communications between the parties
regarding these demands continued through June 2016.
On July
22, 2016, Canyon View sued the BONY respondents to quiet
title, seeking declaratory relief and removal of the cloud on
title, and for relief under the UCL. Several months into
litigation of the suit, in December 2016, BOA, as BONY's
agent, recorded a notice of rescission of the trustee's
deed to BONY, noting that the foreclosure sale resulting in
the trustee's deed was “conducted in error.”
In this document, BONY “rescind[s], cancel[s], and
withdraw[s] [the] [t]rustee's [d]eed [u]pon [s]ale,
” but notes that the “[d]eed of [t]rust shall
remain in force.”
Several
months after that, on May 3, 2017, the parties entered into a
stipulation for judgment. The stipulated judgment entered by
the court provided that, as a result of Canyon View
purchasing the home at the court-ordered public sale, Canyon
View owned the home, and the BONY respondents had no lien
thereon or interest therein. Like the judgment in the
Lakewood action, it provided that Canyon View had the right
to seek, and the BONY respondents had the right to oppose,
attorney fees and costs pursuant to section 798.85.
4.
Case No. PC057291 against the Ocwen respondents (the
Ocwen action)
In May
2008, Eileen Corp purchased a mobilehome permanently attached
to lot 304 in Canyon View Estates, and entered into a
long-term lease with Canyon View. To finance the purchase,
Corp took out a loan secured by the home, and a deed of trust
was recorded, identifying Assurity Financial Services LLC
(Assurity) as the lender, Mortgage Electronic Registration
Systems, Inc. (MERS) as the beneficiary, and Landsafe Title
of California, Inc. (Landsafe) as the trustee.[9]
On May
21, 2014, MERS, acting “as designated nominee for
Assurity... beneficiary of the security instrument, ”
executed an assignment, which purported to assign “all
beneficial interest under a certain [d]eed of [t]rust”
to Ocwen, but incorrectly identified “1st Choice
Mortgage Equity Corporation” as the assignor (although
MERS still signed the document). On November 5, 2014, a
corrected notice of assignment was filed, in which MERS,
...