Covarrubias v. Union Adjustment Co. CA2/5

CourtCalifornia Court of Appeal
DecidedAugust 12, 2014
DocketB250489
StatusUnpublished

This text of Covarrubias v. Union Adjustment Co. CA2/5 (Covarrubias v. Union Adjustment Co. CA2/5) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Covarrubias v. Union Adjustment Co. CA2/5, (Cal. Ct. App. 2014).

Opinion

Filed 8/12/14 Covarrubias v. Union Adjustment Co. CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

IGNACIO COVARRUBIAS, B250489

Plaintiff and Respondent, (Los Angeles County Super. Ct. No. GC051048) v.

UNION ADJUSTMENT COMPANY, INC.,

Defendant and Appellant.

APPEAL from an order of the Superior Court of Los Angeles County, William D. Stewart, Judge. Affirmed in part; reversed in part with directions. Zee Law Group, Tappan Zee and Jamie San Gabriel, for Defendant and Appellant. No appearance on behalf of Plaintiff and Respondent. I. INTRODUCTION

Defendant, Union Adjustment Company, Incorporated, appeals from an order denying its special motion to strike under Code of Civil Procedure section 425.16.1 Defendant sought to strike plaintiff’s complaint for title slander, process abuse, violation of the Fair Debt Collection Act (15 U.S.C. § 1692 et seq.) and injunctive and declaratory relief. We affirm the denial of the special motion to strike as to the claims for violation of the Fair Debt Collection Act and injunctive and declaratory relief. We reverse the order denying the special motion to strike as to the first and second causes of action for title slander and process abuse. Upon remittitur issuance, as we will discuss in detail, the trial court is to resolve issues concerning costs and attorney fees.

II. BACKGROUND

A. Plaintiff’s Complaint

On March 5, 2013, plaintiff, Ignacio Covarrubias, filed his complaint. He alleges the following. Defendant is a collection agency in Burbank, California. Zee Law Group is a law firm in Alhambra, California. Tappan Zee is an attorney at law and the principal of Zee Law Group. On July 30, 1997, defendant entered into a stipulation for judgment with plaintiff’s son, Ignacio Covarrubias, Jr., (Mr. Covarrubias). The stipulation concerned a $2,000 unpaid loan. Plaintiff was not involved in that litigation. On April 24, 2007, defendant, through its attorneys of record, Mr. Zee and Zee Law Group, filed a notice of renewal of judgment against Mr. Covarrubias. On June 19, 2012, defendant through its attorneys, executed an affidavit of identity and order. The

1 Further statutory references are to the Code of Civil Procedure unless otherwise noted.

2 affidavit listed “Ignacio Covarrubias” as an additional name by which Mr. Covarrubias was known. On July 13, 2012, Mr. Zee and Zee Law Group caused an abstract of judgment to be entered against “Ignacio Covarrubias, Jr. aka Ignacio Covarrubias” in defendant’s favor. On July 30, 2012, defendant recorded the abstract of judgment against plaintiff’s real property located in Walnut, California. Mr. Covarrubias never held an ownership interest in the real property. In November 2012, plaintiff discovered the lien was recorded against his real property when he attempted to “secure and use” his home equity line of credit with his lender, California Bank & Trust. On November 29 or 30 of 2012, plaintiff, through counsel, sent correspondence to defendant and his lender. That correspondence indicated Mr. Covarrubias did not have an ownership interest in plaintiff’s real property. Plaintiff contended the affidavit and abstract of judgment lien were in error and should be removed from his property’s title report. Plaintiff’s counsel held a telephonic conference with Mr. Zee on November 30, 2012. Mr. Zee denied intending to record an abstract of judgment lien against plaintiff’s property. Mr. Zee claimed he would personally follow up with plaintiff’s real estate lender, the title company and the county recorder to correct the error. On February 1, 2013, Mr. Zee served plaintiff’s lender with a demand letter. Mr. Zee wrote: “Union Adjustment Co., Inc. is the Judgment Creditor in this matter and is pursuing a judgment abstract lien on [plaintiff’s] property . . . . [¶] A property profile report obtained in connection with a pending or proposed levy sale of the aforementioned property, has identified California Bank & Trust as being a lienholder as against the property interest of the judgment debtor and/or recorded against the aforementioned property.” On February 11, 2013, California Bank and Trust notified plaintiff it had terminated his home equity credit line. The lender cited Mr. Zee’s February 1, 2013 letter and assumed it was a “‘request for payoff related to an enforcement of judgment action’” against plaintiff’s property. The lender indicated: “[Mr. Zee’s letter] is . . . ‘considered to be an adverse change in [plaintiff’s] financial condition which,

3 pursuant to the terms of the loan documents, constituted an event of default. As a result of this we sent [plaintiff] an adverse action notice, as required by federal regulation, and froze the credit line . . . .’” On February 11, 2013, plaintiff’s attorney contacted Mr. Zee “to meet and confer prior to” filing suit. However, defendant’s attorney failed to return the voicemail. Attached to the complaint are numerous court promulgated documents and communications concerning the disputed debt. Plaintiff alleges claims for: title slander; process abuse against Mr. Zee and his law firm; and violation of the Fair Debt Collection Practices Act. (15 U.S.C. § 1692 et seq.) The second cause of action for process abuse is based on alleged misconduct arising from the processing of enforcement of judgment documents in the trial court. Plaintiff requests: declaratory and injunctive relief; cancellation of the affidavit of identity and abstract of judgment lien; statutory damages; punitive damages; costs of suit; and all other relief as the court deems proper.

B. Defendant’s Special Motion To Strike

On May 9, 2013, defendant filed its special motion to strike pursuant to section 425.16. Defendant argued: enforcement of the judgment actions against Mr. Covarrubias are subject of section 425.16; plaintiff’s title slander claim failed because the recorded abstract of judgment was clearly issued against Mr. Covarrubias; the abstract of judgment listed a social security number ending in 4 digits that were for Mr. Covarrubias, not plaintiff; the abstract named Ignacio Covarrubias, Jr., as the individual in question; the abstract only created a lien against Mr. Covarrubias, not against plaintiff’s property; and the conduct of Mr. Zee and his law firm was part of their representation of defendant and was per se protected under section 425.16. As to the second cause of action, defendant argued: there was no process abuse; process abuse requires a showing that an act done under the authority of the court was for the purpose of perpetrating an injustice; and there was nothing unlawful in how the

4 affidavit of identity and abstract of judgment were obtained. Defendant contended the Fair Debt Collection Practices Act does not apply. Defendant argued plaintiff is not a consumer within the meaning of title 15 United States Code section 1692e(3) and therefore his statutory claim is frivolous. No other ground concerning the application of the title 15 United States Code section 1692 et seq. was raised. In support of defendant’s special motion to strike, Mr. Zee, its counsel, filed a declaration. Mr. Zee secured a “Lexis Report” for Mr. Covarrubias. The Lexis Report for Mr.

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Covarrubias v. Union Adjustment Co. CA2/5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/covarrubias-v-union-adjustment-co-ca25-calctapp-2014.