Bogden v. Citigroup, Inc.

DIANA BOGDEN, Plaintiff and Appellant, v. CITIGROUP, INC., et al., Defendants and Respondents.

B278352

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FIVE

May 30, 2019

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC526888)

APPEAL from a judgment of the Superior Court of Los Angeles County, Holly E. Kendig, Judge. Reversed.

Diana Bogden, in pro. per., for Plaintiff and Appellant.

Bryan Cave Leighton Paisner and Alfred Shaumyan for Defendants and Respondents.

____________________ Plaintiff and appellant Diana Bogden appeals from the trial court's denial of her motion to vacate, for attorney fault, a dismissal entered against her. Bogden argues that her attorney's declaration was sufficient under Code of Civil Procedure section 473, subdivision (b) to justify mandatory relief from the dismissal of her action against defendants and respondents Citigroup, Inc., Citibank, N.A., Citi Residential Lending, Inc., CitiMortgage Inc., Associates First Capital Corp. and CR Title Services (collectively, Citibank). We agree and reverse.

FACTUAL AND PROCEDURAL BACKGROUND

To call this case a procedural quagmire is something of an understatement. Bogden was one of many plaintiffs in a mass-joinder litigation brought by an attorney who abandoned his clients shortly after filing suit, and was suspended from the practice of law while the action was pending. Although the court and opposing counsel were aware of the attorney's apparent abandonment, if not his actual suspension, they nonetheless allowed the action to proceed to dismissal against Bogden and her co-plaintiffs when they were virtually unrepresented. An associate who joined the suspended attorney's firm filed a motion to vacate the dismissal, supported by a declaration of fault by the suspended attorney. Just before the hearing on the motion to vacate, a receiver took over the troubled firm and the parties stipulated to a continuance of the motion to vacate. The court denied the continuance, proceeded to a hearing where neither party appeared, and denied the motion to vacate.

As we shall explain, the road to this miscarriage of justice also contained a notice of ruling which did not match the court's order, a dismissal order which did not match the court's intendedorder, and a number of attorneys not officially substituting out of a representation when they should have done so.

Our recitation of the complete history of the case begins not with plaintiff Bogden, but with her attorney, Vito Torchia, Jr. and his law firm, Brookstone Law, PC.

1. Attorney Torchia and Brookstone Law

Attorney Torchia opened Brookstone in 2009. Some time after, he "expanded the scope of Brookstone's practice to include mass-joinder litigation and related legal services necessary to postpone foreclosure sales on real property (e.g., bankruptcy). Mass-joinder litigation refers to lawsuits in which numerous (e.g., hundreds of) property/homeowners sue their common mortgage lender or servicer for alleged false, fraudulent, and deceptive lending and foreclosure practices."

While it is unknown how Bogden came to be a client of Brookstone, Brookstone obtained some of its clients by means of "mass mailing advertising" to property owners.

2. The Mass-Joinder Complaint in This Action

On November 5, 2013, Attorney Torchia filed the complaint against Citibank in this action.¹ The plaintiffs were 68 individuals, Bogden among them, who together alleged 24 causes of action arising from: (1) the intentional placement of borrowers into dangerous loans they could not afford by use of deceptive tactics; (2) individual appraisal inflation; (3) market-fixing; (4) deception in loan modifications; and (5) (with respect to some plaintiffs other than Bogden) unauthorized foreclosures.

The complaint consisted of approximately 100 pages of allegations on behalf of all of the plaintiffs together, followed by an appendix setting forth the facts pertaining to each individual plaintiff. The appendix indicates that Bogden's complaint arises from a mortgage refinance. She alleged that: (1) she had been steered into an adjustable rate mortgage, but did not know the interest rate was, in fact, adjustable, nor did she know her payments for the first five years were interest-only; (2) Citibank had altered her loan application without her knowledge, to indicate that she had a greater income, so that she would be approved for a loan she could not, in reality, afford; (3) defendants fraudulently inflated the appraisal on her property to justify an increased loan amount; (4) Citibank represented that she would be able to refinance the loan later, but she could not do so, because her actual income was too low and she had insufficient equity in her home; and (5) had she known the truth, she never would have accepted the loan.

3. The Case is Removed to Federal Court

On January 6, 2014, Citibank removed the case to federal court, due to the presence of a single federal law cause of action. The case would ultimately be remanded, but the proceedings in federal court are notable because it was during these proceedings that Attorney Torchia first disappeared.

4. Attorney Torchia Stops Participating

After the case was removed to federal court, plaintiffs conceded that their federal cause of action was not properly pleaded and should be dismissed, which would defeat federal question jurisdiction. On April 22, 2014, the district court concluded that the matter should be remanded back to state court, but indicated that its remand order would not be effectiveuntil plaintiffs filed a request for dismissal of their federal cause of action.

Attorney Torchia did not file a request for dismissal. Nor did he respond to a series of orders to show cause why he should not be sanctioned for failing to do so and failing to appear. Eventually, the district court dismissed the federal cause of action itself, imposed sanctions, remanded the matter to state court, and required Attorney Torchia to pay Citibank over $16,000 in attorney fees. The court's order explained that Attorney Torchia could not "proceed with inappropriate litigation tactics, fail to comply with court orders, and cause the opposing parties to incur unnecessary costs, without consequences." Attorney Torchia did not pay, and a bench warrant would ultimately be issued in February 2015.

5. The Case Returns to State Court

The case was remanded in August 2014. By order of August 21, 2014, the trial court set the case for a case management conference for September 29, 2014.

6. Citibank Demurs and Attorney Torchia Does Not Oppose

On September 10, 2014, Citibank demurred to the complaint, arguing, among other things, that the plaintiffs were misjoined. Attorney Torchia filed no opposition to the demurrer. Nor did he file an opposition to Citibank's motion to strike, or the other defendants' motions challenging the complaint. Attorney Torchia simply did not participate in the case, just as in federal court.

7. Attorney Torchia Briefly Surfaces in Connection with the Case Management Conference

After the case had been remanded to state court, Attorney Torchia filed only two documents on behalf of plaintiffs. The firstwas a September 26, 2014 case management statement for plaintiffs. Attorney Torchia also attended, by telephone, the September 29, 2014 case management conference. At the conference, the court ordered Attorney Torchia to file "a detailed declaration with information of all parties, including which parties have been served and what remains in this case" by October 17, 2014. The case management conference was continued to May 12, 2015, to be heard with the then-pending demurrers.

Attorney Torchia did not file the required declaration. In fact, he would go on to file only one more document on behalf of plaintiffs, an association of counsel.

8. Brookstone Has a Win in the Petersen Litigation

Before we discuss the association of counsel, we pause to recognize that, while Brookstone's mass-joinder action against Citibank was pending in this court, Brookstone had been pursuing other mass-joinder litigations in other courts. Brookstone's action against Countrywide Financial Corporation had been dismissed for misjoinder of plaintiffs. On December 11, 2014, Division Three of the Court of Appeal, Fourth Appellate District reversed, holding, albeit over a dissent, that Brookstone's mass-joinder action was not, in fact, misjoined. (Petersen v. Bank of America Corp. (2014) 232 Cal.App.4th 238 (Petersen).) The Petersen action had been filed by Attorney Torchia on behalf of 965 plaintiffs; and the complaint contained similar allegations to the complaint in this case. (Id. at pp. 240-241.) Review was denied in Petersen on March 25, 2015.

Because Attorney Torchia did not oppose Citibank's demurrer, he did not bring the Petersen opinion to the court's attention in response to Citibank's demurrer for misjoinder. Bythe time the demurrer was heard, May 12, 2015, the Petersen case was final.

9. Attorney Torchia Associates in Attorney Mortimer

On March 4, 2015, Attorney Torchia filed, on behalf of plaintiffs, a notice of association of counsel, associating in as co-counsel Attorney John E. Mortimer, a non-Brookstone attorney. Both attorneys signed this association. Attorney Mortimer would ultimately submit a declaration explaining that he "agreed to assist as requested, and as mutually agreed upon, but never independently." He was never asked to do anything by Attorney Torchia, and therefore, did nothing in the case.

After filing the association of Attorney Mortimer, Attorney Torchia filed nothing else in this case, until he was called upon to file a declaration of...