Opinion
A134461
03-23-2018
FERMIN SOLIS ANIEL et al. Plaintiffs and Appellants, v. ETS SERVICES LLC et al. Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Mateo County Super. Ct. No. CIV-502857)
Fermin Solis Aniel and Erlinda Abibas Aniel (the Aniels), representing themselves, appeal from an order of dismissal entered after the trial court sustained, without leave to amend, demurrers filed by defendants HSBC Bank, U.S.A. as Trustee for DALT 2007-A03 (HSBC Bank), Mortgage Electronic Registration Systems, Inc. (MERS), GMAC Mortgage, LLC (GMACM), ETS Services, LLC (ETS), and Pite Duncan, LLP (Pite Duncan). For reasons we will explain, we conclude the trial court properly sustained the demurrers without leave to amend and we therefore affirm the dismissal order.
I. FACTUAL BACKGROUND
We summarize the record based on the properly pleaded factual allegations and matters subject to judicial notice. (See Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924 (Yvanova).) We assume the truth of the Aniels' allegations except for claims contradicted by judicially noticeable fact. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 751.)
In March 2007, Raul Estiva refinanced a $1 million mortgage, executing a note secured by a rental property located at 801 Foothill Drive in San Mateo, California (the property). Raul Estiva, and his wife, Corazon Estiva (the Estivas), nonparties to this litigation, signed a deed of trust, which was recorded on April 3, 2007. The deed of trust named MortgageIt, Inc. (MortgageIt) as the lender, Fidelity National Title (Fidelity) as trustee, and MERS as the beneficiary, "solely as nominee for Lender and Lender's successors and assigns." The deed of trust provided that the underlying note could be sold without notice, and that the lender had the right to sell the underlying property if the Estivas defaulted on their loan. The deed further provided that MERS held legal title and, "if necessary to comply with law or custom," could exercise any of the rights described in the deed, "including, but not limited to, the right to foreclose and sell the Property." GMACM was the loan servicer.
" 'MERS is a private corporation that administers a national registry of real estate debt interest transactions. Members of the MERS System assign limited interests in the real property to MERS, which is listed as a grantee in the official records of local governments, but the members retain the promissory notes and mortgage servicing rights. The notes may thereafter be transferred among members without requiring recordation in the public records. [Citation.] [¶] Ordinarily, the owner of a promissory note secured by a deed of trust is designated as the beneficiary of the deed of trust. [Citation.] Under the MERS System, however, MERS is designated as the beneficiary in deeds of trust, acting as "nominee" for the lender, and granted the authority to exercise legal rights of the lender.' " (Saterbak v. JPMorgan Chase, N.A. (2016) 245 Cal.App.4th 808, 816, fn. 6.)
The Aniels allege they owned 50 percent of the property "with" the Estivas, although the Estivas took out the loan, and the Aniels' names did not appear on the deed of trust. The Aniels do not explain how they allegedly acquired the ownership interest, but they allege they maintained the property, "paid for the mortgages, hazard insurance, and property taxes," and disclosed the property in their income tax returns. The amount of the monthly mortgage payments "increased tremendously" by late 2008, however, the Aniels allege, and the tenants' rental payments did not suffice to pay the mortgage. In December 2008, MERS recorded a substitution of trustee, designating ETS as the new trustee under the deed of trust, and ETS recorded a notice of default and election to sell the property, stating that the mortgage payment was past due.
In February 2009, the Aniels filed for bankruptcy. The following month (March 2009), they filed an amended bankruptcy petition, listing their interest in the property as one of their assets.
In May 2009, the Pite Duncan law firm prepared a document entitled, "ASSIGNMENT OF DEED OF TRUST." The document purported to assign and transfer "all beneficial interest" in the property from MERS to HSBC Bank (the assignment). GMACM employee, Jeffrey Stephan, signed the assignment on May 26, 2009. The assignment's signature block identified Stephan as a MERS vice-president. The Aniels allege Stephan signed the assignment—as he did 10,000 other foreclosure-related documents monthly, while working for GMACM—without possessing personal knowledge of the document, i.e., they allege he was a "robo-signer."
The assignment was recorded on July 16, 2009.
In June 2009, GMACM, acting as HSBC Bank's servicing agent, filed a claim as a secured creditor in the Aniels' bankruptcy case, attaching the deed of trust and note for the property. One year later, in June 2010, the Aniels filed a bankruptcy disclosure statement and reorganization plan, asserting that they owned a 50 percent interest in the property, and proposed that the deed of trust and note be amended to include their names. Represented by Pite Duncan, HSBC Bank objected, contending the property could not be considered a part of the Aniels' bankruptcy estate because the Aniels had not produced evidence that they held legal title to the property. The bankruptcy court apparently agreed, as it subsequently ordered the bankruptcy trustee to abandon the property as an estate asset, concluding the property would not benefit the bankruptcy estate. The Aniels were discharged from bankruptcy on December 2, 2010.
See 11 U.S.C. § 554(a) ("[T]he [bankruptcy] trustee may abandon any property of the estate that is . . . of inconsequential value and benefit to the estate").
On December 31, 2010, ETS recorded a notice of trustee's sale, advising that the property would be sold at a public auction sale on January 27, 2011. The date for the sale later was postponed to February 9, 2011. A week before that date, on February 2, 2011, Corazon Estiva recorded an affidavit advising of the death of her joint tenant in the property, Raul Estiva. The same day, the Aniels, representing themselves, filed their complaint commencing this action. One day later, on February 3, 2011, Corazon Estiva executed a grant deed conveying a one percent interest in the property to each of the Aniels. Erlinda Aniel recorded the grant deed the same day.
II. PROCEDURAL BACKGROUND
The Aniels' complaint alleged the following causes of action and requested the following relief as against all defendants, with the exception that MERS was not named in the first cause of action: (1) violation of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.) (the Rosenthal Act); (2) fraud; (3) violation of wrongful foreclosure statutes (§§ 2924a, 2934a); (4) violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) (UCL); (5) injunctive relief enjoining the trustee sale; and (6) quiet title against defendants' claim of right to foreclosure on the property. The Aniels also requested compensatory and punitive damages.
All undesignated statutory references below are to the Civil Code.
Pite Duncan filed a demurrer to the complaint (Pite Duncan demurrer), with a request for judicial notice of documents. The remaining defendants—ETS, GMACM, MERS, and HSBC Bank—filed a separate demurrer (HSBC Bank demurrer) and request for judicial notice. The Aniels filed oppositions to both demurrers, and ETS, GMACM, MERS, and HSBC Bank filed a reply brief (HSBC Bank reply brief). In June 2011, after hearing argument from the parties, the trial court sustained both demurrers as to all causes of action, denying leave to amend, on the ground that the Aniels lacked standing to sue. In reaching this conclusion, the trial court relied on the fact that the Aniels' names did not appear on the promissory note or deed of trust when the events at issue occurred. The trial court subsequently ordered dismissal of the action effective December 6, 2011. This timely appeal followed.
As the Aniels' appellate appendix does not include the required register of actions (Cal. Rules of Court, rules 8.122(b)(1)(F), 8.124(b)(1)(A)), we cannot say whether Pite Duncan filed a reply brief. If it did so, the brief was not included in the appellate record.
Although, as defendants point out, the initial dismissal order took the form of an unsigned minute order, which was ineffective (Code Civ. Proc., § 581d; Powell v. County of Orange (2011) 197 Cal.App.4th 1573, 1578), we take judicial notice of the fact that the trial court subsequently issued a signed dismissal order, which provided that it was effective on the above date. (Evid. Code, § 452, subd. (d)(1).)
While this appeal was pending, GMACM and ETS filed for bankruptcy. Concluding that portions of the appeal were covered by an automatic stay pursuant to title 11 of the United States Code section 362(a), and to avoid a fragmented appeal, we stayed the entire appeal on September 18, 2012. In June 2016, GMACM and ETS advised us that the bankruptcy court had adjudicated claims the Aniels presented against them in the bankruptcy proceedings, including claims based on the causes of action alleged in the current action. After inviting and considering letter briefs from the parties, we subsequently dismissed the Aniels' claims against GMACM and ETS, concluding the bankruptcy order was res judicata as to them. We now consider the Aniels' appeal as to the remaining parties, HSBC Bank, MERS, and Pite Duncan.
III. DISCUSSION
A. Standard of Review
" 'Because a demurrer both tests the legal sufficiency of the complaint and involves the trial court's discretion, an appellate court employs two separate standards of review on appeal. [Citation.] . . . Appellate courts first review the complaint de novo to determine whether or not the . . . complaint alleges facts sufficient to state a cause of action under any legal theory, [citation] . . . .' [Citation, fn. omitted.]" (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 791 (McClain).) To prevail, "the appellant[s] must affirmatively demonstrate error" by showing "the facts pleaded are sufficient to establish every element of a cause of action and [must] overcome all legal grounds on which the trial court sustained the demurrer. [Citation.]" (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1052.)
As part of the de novo review, "[w]e treat the demurrer as admitting all material facts which were properly pleaded. [Citation.] However, we will not assume the truth of contentions, deductions, or conclusions of fact or law [citation], and we may disregard any allegations that are contrary to the law or to a fact of which judicial notice may be taken. [Citation.]' [Citation.] If a proper ground for sustaining the demurrer exists, 'this court will . . . affirm the demurrers even if the trial court relied on an improper ground, whether or not the defendants asserted the proper ground in the trial court. [Citation.]' [Citation.]" (McClain, supra, 159 Cal.App.4th at p. 792.)
" 'Second, if a trial court sustains a demurrer without leave to amend, appellate courts determine whether or not the [appellants] could amend the complaint to state a cause of action. [Citation.]' [Citation.]" (McClain, supra, 159 Cal.App.4th at pp. 791-792.) Here, "the burden falls upon the [appellants] to show what facts [they] could plead to cure the existing defects in the complaint. [Citation.] 'To meet this burden, [the] [appellants] must submit a proposed amended complaint or, on appeal, enumerate the facts and demonstrate how those facts establish a cause of action.' [Citation.]" (Id. at p. 792.) A ruling sustaining a demurrer without leave to amend is reviewed for abuse of discretion. (Schermer v. Tatum (2016) 245 Cal.App.4th 912, 930 (Schermer).)
B. The Rosenthal Act
In their first cause of action, the Aniels allege HSBC Bank and Pite Duncan violated the Rosenthal Act by falsely representing that ownership of the debt had been assigned to HSBC Bank, by relying on the fraudulent assignment in attempting to foreclose on the property, and by fraudulently inflating the amount of the debt. HSBC Bank and Pite Duncan contend the cause of action is fatally flawed, among other things, because the Aniels do not qualify as "debtors" under that act, and because foreclosure on a deed of trust does not qualify as "debt collection."
As support for their allegation that the assignment to HSBC Bank was fraudulent, the Aniels variously alleged that: the GMACM employee who executed it lacked knowledge of the facts asserted therein; the employee was only pretending to act as MERS vice-president; the assignment was not properly notarized; there was no evidence MortgageIT transferred a beneficial interest to HSBC Bank; MERS lacked authority to assign the deed; MERS records did not identify the trust for which HSBC Bank supposedly acted as trustee; the Aniels "believe[d]" MortgageIT had dissolved; MortgageIT dissolved before MERS transferred the beneficial interest to HSBC Bank; and the assignment was executed in violation of the automatic stay in place during the Aniels' bankruptcy action.
The Rosenthal Act was enacted "to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring such debts." (§ 1788.1, subd. (b).) It defines "debtor" as "a natural person from whom a debt collector seeks to collect a consumer debt which is due and owing or alleged to be due and owing from such person." (§ 1788.2, subd. (h).) Under the act, a "debt collector" is "any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection." (§ 1788.2, subd. (c).) "Debt collection" means "any act or practice in connection with the collection of consumer debts" (§ 1788.2, subd. (b)), and "consumer debt" means "money, property or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction" (§ 1788.2, subd. (f)). In turn, a "consumer credit transaction" is "a transaction between a natural person and another person in which property, services or money is acquired on credit by that natural person from such other person primarily for personal, family, or household purposes." (§ 1788.2, subd. (e).) "A debt collector violates the act when it engages in harassment, threats, the use of profane language, false simulation of the judicial process, or when it cloaks its true nature as a licensed collection agency in an effort to collect a consumer debt." (Sipe v. Countrywide Bank (E.D. Cal. 2010) 690 F.Supp.2d 1141, 1151 (Sipe), citing §§ 1788.10-1788.16.)
The Aniels did not specifically allege in their complaint that they qualified as debtors under the act. They alleged that Raul Estiva secured the loan, that they (the Aniels) did not owe money to defendants, and that they (the Aniels) were not named in the loan documents or in the deed of trust. Additionally, the Aniels did not allege HSBC Bank or Pite Duncan sought to collect payment on the loan directly from them. The absence of any such communications is underscored by the Aniels' allegation that they only learned of the impending foreclosure sale from their tenants. If HSBC Bank and Pite Duncan had attempted to collect loan payments from the Aniels, presumably those efforts would have included communications advising the Aniels that the property was to be sold at a public auction following the default on the loan. As the Aniels were not listed as borrowers on the loan and do not claim HSBC Bank or Pite Duncan directly contacted them for payment of the loan, they do not qualify as debtors. (§ 1788.2, subd. (h).)
Attempting to avoid this conclusion, the Aniels assert in their appellate reply brief that they did qualify as debtors because they were obligated "to pay the Estiva's (sic) loan" by practical necessity, to avoid losing the property to foreclosure, and under their agreement with the Estivas. (Italics added.) The Aniels do not quote or acknowledge the statutory definition of "debtor," however, or cite any other authority supporting their assertion that such allegations suffice. As noted above, debtor status under the Rosenthal Act turns on whether one has been the target of collection activities. (§ 1788.2, subd. (c).)
HSBC Bank and Pite Duncan also contend foreclosure on a deed of trust does not qualify as debt collection activity under the Rosenthal Act. They quote Sipe, supra, in which the federal district court observed, " '[t]he law is clear that foreclosing on a deed of trust does not invoke the statutory protections" of the act because it "does not constitute debt collection." (Sipe, supra, 690 F.Supp.2d at p. 1151.) Sipe is just one in a line of federal cases that have reached the same conclusion. (See, e.g., Rosal v. First Federal Bank of California (N.D. Cal. 2009) 671 F.Supp.2d 1111, 1135; Izenberg v. ETS Services, LLC (C.D. Cal. 2008) 589 F.Supp.2d 1193, 1199.) In Vien-Phuong Thi Ho v. ReconTrust Company, N.A. (9th Cir. 2016) 858 F.3d 568 (Ho), discussing the Rosenthal Act's federal counterpart, the Fair Debt Collection Practices Act (15 U.S.C. § 1692 et seq.), the Ninth Circuit recently explained the reasoning: "The object of a non-judicial foreclosure is to retake and resell the security, not to collect money from the borrower. California law does not allow for a deficiency judgment following non-judicial foreclosure. This means that the foreclosure extinguishes the entire debt even if it results in a recovery of less than the amount of the debt. [Citations.] Thus, actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect 'debt.' " (Id. at pp. 571-572; accord, Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1264 [agreeing with "those courts that have held that giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity" under the federal act].)
Before the trial court, the Aniels did not respond to this argument, raised in HSBC Bank's demurrer, implicitly conceding it. Now on appeal, the Aniels simply assert that the various steps in the foreclosure procedure were all designed to collect money and, therefore, must qualify as debt collection efforts, but they cite no legal authority supporting this assertion. We find Ho's reasoning persuasive and hold that the foreclosure-related activities here alleged against HSBC Bank and Pite Duncan did not provide a basis for liability under the Rosenthal Act. As the Aniels have not alleged facts demonstrating they qualified as debtors, or that HSBC Bank or Pite Duncan engaged in qualifying debt collection activities, we affirm the trial court's order sustaining the demurrers to the Aniels' first cause of action. We therefore need not address the parties' further arguments regarding the sufficiency of the complaint allegations under the Rosenthal Act.
C. Tort Claims and the UCL
In their second, third, and fourth causes of action, the Aniels allege HSBC Bank, MERS, and Pite Duncan engaged in fraud, wrongful foreclosure, and UCL violations, again relying primarily on allegations that defendants misrepresented ownership of the debt and created a false assignment to HSBC Bank. The trial court sustained defendants' demurrers to these causes of action on the ground that the Aniels lacked standing to sue, because they admitted in their complaint their names did not appear on the note or deed of trust at the time the alleged misconduct occurred.
The Aniels also alleged that: Pite Duncan failed to comply with the Pooling and Servicing Agreement (PSA) of the trust for which HSBC Bank claimed to act as trustee; ETS was not properly authorized to act as foreclosure trustee because no substitution of trustee was filed; and ETS recorded the notice of trustee sale without first recording a notice of default. The latter two assertions are contradicted by documents attached, respectively, to Pite Duncan's request for judicial notice before the trial court, and to the Aniels' own complaint, and we take judicial notice of the fact the referenced documents were recorded. (Evid. Code, §§ 452, subd. (h), 459; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265 (Fontenot), disapproved on other grounds by Yvanova, supra, 62 Cal.4th at p. 939, fn. 13.) The Aniels do not attach the PSA or allege specific facts explaining the nature of the asserted PSA violation.
The Aniels contend the trial court erred in relying on this point. They contend they established they had an ownership interest in the property, despite the fact they are not named in the note or deed of trust, because they alleged that: they contributed to the property's maintenance; they received and reported rental income from the property; they declared the property as an asset in their bankruptcy case; and, after the events alleged in their complaint, they acquired a two percent interest in the property from Corazon Estiva, who executed a grant deed to them. In their opening appellate brief, however, the Aniels cite no legal authority establishing either that these alleged facts sufficed to establish they had a legal ownership interest in the property at the time of the alleged misconduct, or that their subsequent acquisition of an interest in the property conferred standing to sue for fraud or wrongful foreclosure based on the previous handling of a debt transaction to which they were not a party.
In their appellate reply brief, the Aniels rely upon a case that Pite Duncan cited in its respondent's brief, Banc of America Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc. (2009) 180 Cal.App.4th 1090. The Court of Appeal there stated that "[a]s a general rule 'only parties with an interest in the secured loan or in the real property security itself have standing to challenge or attempt to set aside a nonjudicial foreclosure sale.' " (Id. at p. 1103.) The Aniels then reiterate that they had an "interest" in the property here, again without citing authority confirming that they had a legal interest conferring standing.
As previously noted, the Aniels have the burden on appeal of affirmatively demonstrating error. (Intengan v. BAC Home Loans Servicing LP, supra, 214 Cal.App.4th at p. 1052.) While, as part of our de novo review, we treat the demurrer as admitting all material facts that are properly pleaded, we will not assume the truth of "contentions . . . or conclusions of . . . law." (McClain, supra, 159 Cal.App.4th at p. 792.) The Aniels have not met their burden here because they offer no authority supporting their legal contentions, and no facts explaining why defendants owed the Aniels any duty related to the mortgage (debt) or the deed of trust, when the Aniels were not parties to either transaction. A tort—such as fraud or wrongful foreclosure—" 'involves a violation of a legal duty, imposed by statute, contract, or otherwise, owed by the defendant to the person injured. Without such a duty, an injury is "damnum absque injuria"—injury without wrong.' [Citations.]" (The MEGA Life & Health Ins. Co. v. Superior Court (2009) 172 Cal.App.4th 1522, 1527.) Bare allegations such as the Aniels' that a party had an unrecorded "interest" in property are insufficient to confer standing on the party to challenge transactions regarding the property. (Myles v. Wells Fargo Bank NA (C.D. Cal. Oct. 20, 2011, No. CV 11-05190) 2011 WL 13220466, at *2- 3 [holding plaintiff who alleged that she had "assisted" borrower in making payments, repairs, and paying tax bills—but who did not allege she had a legally enforceable encumbrance on the property—had no standing to sue defendants in tort based on their actions regarding the property].)
Similarly, a person who is not a party to a contract does not have standing either to seek its enforcement or to bring tort claims based on the contractual relationship. (See, e.g., The MEGA Life & Health Ins. Co. v. Superior Court, supra, 172 Cal.App.4th at pp. 1525, 1528-1532 [holding husband who was not a party to deceased wife's health insurance policy had no separate fraud claim based on the policy]; Cabrera v. Countrywide Fin. (N.D. Cal. Oct. 30, 2012, No. C11-4869 SI) 2012 WL 5372116, at *8 [dismissing claims for violations of unfair competition law and other claims for lack of standing because only plaintiff's husband was a signatory to the mortgage]; Brockington v. J.P. Morgan Chase Bank, N.A. (N.D. Cal. July 1, 2009, No. C-08-05795 RMW) 2009 WL 1916690, at *2-3 [holding plaintiff who was not a party to the loan transaction had no standing as an alleged "equitable owner" of the property to challenge defendant's conduct in connection with extending mortgage loan to plaintiff's daughter, or to assert claim for unlawful concealment of facts in such transaction]; Cleveland v. Deutsche Bank Nat. Trust Co. (S.D. Cal. Feb. 2, 2009, No. 08cv0802 JM (NLS)) 2009 WL 250017, *2 [dismissing claims for fraud, violation of the Rosenthal Act and the UCL, and other claims for lack of standing because the borrower on the loan was plaintiff's wife].) The Aniels here were a stranger to Raul Estiva's loan and to the Estivas' deed of trust and have alleged no facts establishing that HSBC Bank, MERS, or Pite Duncan owed them a duty conferring standing to allege claims for fraud or wrongful foreclosure against those defendants.
Further, as the Aniels in essence alleged that defendants engaged in unfair and unlawful business practices in connection with their foreclosure of the property, and as the Aniels failed to allege they held any cognizable interest in the property when the foreclosure proceedings were initiated in 2008, they cannot establish a prerequisite for standing under the UCL, specifically, that they sustained economic injury "caused by" any alleged unfair business practice of defendants. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.) The "prospect of losing the home to foreclosure is the result of default, not the alleged conduct of defendants." (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 614; see also Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522-523 [nonjudicial foreclosure proceedings triggered by default are not economic injury caused by UCL violations, where default occurred prior to allegedly unlawful or unfair acts], disapproved on other grounds, Yvanova, supra, 62 Cal.4th at p. 939, fn. 13; Daro v. Superior Court (2007) 151 Cal.App.4th 1079, 1099 [causation requirement of UCL not met if plaintiff would have suffered "the same harm whether or not a defendant complied with the law"].)
The Aniels' res judicata argument—that the trial court lacked jurisdiction to rule on standing because the bankruptcy court previously established the Aniels had standing to challenge the foreclosure —does not bridge this gap, because the record does not support the assertion. The record establishes only that the Aniels asserted they possessed a 50 percent interest in the property during their bankruptcy proceeding, and that the bankruptcy court subsequently ordered the property abandoned as an estate asset, concluding the property would not benefit the Aniels' bankruptcy estate.
The Aniels cite Busick v. Workmen's Comp. Appeals Bd. (1972) 7 Cal.3d 967, for the proposition that res judicata applies to all issues that were or could have been litigated in an earlier proceeding if the decision there was final on the merits and involved the same cause of action. (Id. at pp. 974-975.) But, as the cited authority confirms, a cause of action is " 'the obligation sought to be enforced' [citation]" (id. at p. 975), and the Aniels do not explain how the obligations sought to be enforced in their bankruptcy case are fairly considered the same as those they here pursue. Finally, the Aniels mistakenly assert that defendants failed to challenge their standing in the bankruptcy court. But, as Pite Duncan points out, on behalf of HSBC Bank, it did file an objection with the bankruptcy court, challenging the Aniels' asserted interest in the property on grounds the Aniels had produced no evidence they held legal title to the property.
Based on the foregoing, we affirm the order sustaining the demurrer to the Aniels' second and third causes of action for fraud and wrongful foreclosure. Because their UCL cause of action is incidental to and depends on the validity (or invalidity) of those claims, it "stand[s] or fall[s] depending on the fate of [those] antecedent substantive causes of action." (Krantz v. BT Visual Images (2001) 89 Cal.App.4th 164, 178.) We therefore affirm the order sustaining the demurrer as to the UCL cause of action as well.
D. Injunctive Relief and Quiet Title
In their fifth and sixth causes of action, the Aniels requested injunctive relief preventing the foreclosure sale and sought quiet title against defendants' claim of a right to foreclose on the property. On June 4, 2012, while this appeal was pending, however, ETS, GMACM, MERS, and HSBC Bank filed a request for judicial notice that the following documents were recorded with San Mateo County: (1) a trustee's deed of sale, indicating that HSBC Bank purchased the property at a public auction on March 10, 2011; and (2) a grant deed, dated February 29, 2012, indicating that HSBC Bank subsequently conveyed the property to nonparties Julian N. Basler and Vanessa Love. Based on these documents, HSBC Bank and MERS contend the fifth and sixth causes of action are moot, and also the UCL cause of action to the extent it sought injunctive relief.
We granted the request for judicial notice on June 25, 2012, three weeks after its filing, observing that it was unopposed. The same day, the Aniels filed appellate reply briefs that included an argument opposing the request. The Aniels contended that the court may take judicial notice of public records, but may not take notice of the truth of the matters stated therein. This is not entirely correct. It is established that "a court may take judicial notice of the fact of a document's recordation, the date the document was recorded and executed, the parties to the transaction reflected in the recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face." (Fontenot, supra, 198 Cal.App.4th at p. 265.) As the Aniels do not dispute the authenticity of the deed of sale or the grant deed, we take judicial notice of their recordation, their legally operative language, and their legal effect and, on that basis, conclude HSBC Bank and MERS are correct in contending the injunctive relief and quiet title causes of action are moot.
A party may only litigate an "actual, present controversy" for which a court may award effective relief. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79, italics omitted.) An appeal from an order denying an injunction "will not be entertained after the act sought to be enjoined has been performed." (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 208 [foreclosure sale mooted appeal from denial of preliminary injunction that sought to enjoin the sale].) In this situation, "[a] reversal would be without practical effect, and the appeal will therefore be dismissed." (9 Witkin, Cal. Procedure (5th ed. 2008) Appeal, § 749, p. 814.) The Aniels sought injunctive relief barring a foreclosure sale of the property, but the sale evidently occurred while the matter was pending before the trial court. Even if we were to disagree with the trial court's decisions granting defendants' demurrers to the fourth and fifth causes of action seeking injunctive relief, a reversal would have no practical effect because we cannot compel the trial court to enjoin an event that has already occurred. We reach the same conclusion as to the sixth cause of action for quiet title, because, following the second sale confirmed in the grant deed, neither the Aniels nor the defendants now have possession of the property. (See South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 740 [To pursue a quiet title cause of action, a plaintiff must be "the owner and in possession of the land," and the defendant must claim "an interest therein adverse to [the plaintiff]"]; accord, Code Civ. Proc., § 761.020; see also West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 802-803 [plaintiff could not pursue quiet title cause of action against defendants following sale of the property, because none of defendants thereafter had an adverse claim to the title].)
The Aniels contend the matter is not moot because they have a right to challenge and set aside the sale. Such a challenge would be framed as a wrongful foreclosure cause of action, however (see Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 561 [a "wrongful foreclosure" is "an equitable action to set aside a foreclosure sale"]), and, for the reasons discussed above, we affirm the trial court's conclusion that they lack standing to pursue such a claim regarding the property here in question. The Aniels also submit that their requests for injunctive relief and quiet title were viable at the time they filed their complaint and will be viable again once they gain title to the property and the sale is set aside. Because we affirm the demurrer to the wrongful foreclosure cause of action, however, this will not occur.
E. Leave to Amend
As previously noted, the Aniels had the burden of proving they could amend the complaint to state a cause of action. (McClain, supra, 159 Cal.App.4th at p. 792.) To do so, they were obligated to "submit a proposed amended complaint or, on appeal, enumerate the facts and demonstrate how those facts establish a cause of action." (Ibid.) " 'Absent such a showing, the appellate court cannot assess whether or not the trial court abused its discretion by denying leave to amend.' [Citation.]" (Schermer, supra, 245 Cal.App.4th at p. 930.)
The Aniels do not meet this burden. Although they contend they should have received an opportunity to amend their complaint, they do not assert the trial court abused its discretion in denying them leave to do so; nor do they enumerate specific facts demonstrating they could allege an ownership interest in the property in the relevant period. Instead, they vaguely contend they could add "more allegations to support their ownership interest, including declarations from Corazon Estiva," without describing the facts the latter might declare. As the Aniels have not demonstrated they could cure their complaint's fatal deficiencies, we conclude the trial court did not abuse its discretion in denying them leave to amend.
IV. DISPOSITION
The order dismissing the complaint without leave to amend is affirmed.
/s/_________
Schulman, J. We concur: /s/_________
Ruvolo, P.J. /s/_________
Reardon, J.
Judge of the Superior Court of California, County of San Francisco, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.