Opinion
A156472
10-01-2019
ANGELICA MARIA LANGARICA, Plaintiff and Appellant, v. DEUTSCHE BANK NATIONAL TRUST, as Trustee, etc., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG18911621)
In this action, plaintiff Angelica Maria Langarica preemptively challenges the authority of defendant Deutsche Bank National Trust (Deutsche Bank) to foreclose on her property. The trial court sustained defendant's demurrer without leave to amend. We shall affirm the judgment.
The operative complaint names as defendants Deutsche Bank National Trust Company, solely as Trustee for Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certification, Series 2007-4; and Western Progressive, LLC, the substitute trustee of the deed of trust on the property. Although both defendants demurred below, the respondent's brief in this action was filed solely on behalf of defendant Deutsche Bank.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff brought her original complaint on July 5, 2018, alleging a single cause of action for cancellation of instruments, on the theory that defendants were not authorized to initiate foreclosure proceedings against her property because they did not hold a beneficial interest in the deed of trust on the property. Defendants demurred to the complaint.
Rather than opposing the demurrer, plaintiff filed a first amended complaint. The first amended complaint alleges plaintiff owns a property in San Leandro (the property) secured by a deed of trust that was recorded on March 21, 2007, with plaintiff as trustor, Seaside Financial Corporation as trustee, and First Federal Bank of California (First Federal) as beneficiary. Deutsche Bank purports to be successor in interest to First Federal based on an assignment of the deed of trust on the property from the Federal Deposit Insurance Corporation (FDIC) as receiver of First Federal to Deutsche Bank. However, according to the first amended complaint, FDIC had previously transferred all of First Federal's assets (including her loan) to another entity, OneWest Bank, FSB (OneWest); accordingly, FDIC did not own the loan at the time of the purported assignment of the deed of trust to Deutsche Bank, and the assignment was void. As a result, Deutsche Bank was not authorized to initiate foreclosure proceedings against the property.
The first amended complaint asserts a single cause of action for cancellation of instruments. It seeks a declaration that the assignment of the deed of trust was void and of no force or effect and that any subsequent foreclosure proceedings or recorded documents based on those assignments were also void; an order enjoining defendants from attempting to dispossess plaintiff from title or possession of the property; and a judgment enjoining them from claiming any interest in the property. The first amended complaint attached a December 18, 2009 agreement between FDIC as receiver of First Federal, and OneWest, under which OneWest purchased from FDIC all of First Federal's assets as of the date it was closed, with certain exceptions.
Defendants demurred to the first amended complaint, arguing that plaintiff could not bring a pre-foreclosure action based on an allegedly void assignment; that, in any case, plaintiff had not identified any theory under which the assignment of the deed of trust was void; and that the first amended complaint did not allege plaintiff suffered any prejudice from the purported invalid assignment. Defendants requested judicial notice of four documents recorded in the official records of Alameda County: the deed of trust recorded March 21, 2007 by First Federal; the corporate assignment of the deed of trust from FDIC as receiver of First Federal to Deutsche Bank, dated March 15, 2018 and recorded March 29, 2018; a document substituting Western Progressive, LLC as trustee, recorded April 30, 2018, and a notice of default and election to sell under the deed of trust, recorded May 11, 2018. The notice stated that plaintiff had not made payments on the property since July 1, 2017.
The trial court sustained the demurrer on three independent grounds. The court first concluded plaintiff could not bring a pre-foreclosure challenge to the March 15, 2018 assignment of the deed of trust from FDIC to Deutsche Bank. It went on to conclude that, in any case, (1) plaintiff's allegations and attached assignment of the deed of trust did not show that FDIC conveyed all assets of First Federal to OneWest in 2009; and (2) plaintiff did not have standing to allege that FDIC sold the loan twice. Noting plaintiff had already amended her complaint once and had not suggested any way she could cure the defects in the first amended complaint, the trial court denied leave to amend.
DISCUSSION
I. Standard of Review
When reviewing a trial court's ruling sustaining a demurrer without leave to amend, we review the complaint de novo to see whether it alleges facts sufficient to state a cause of action under any legal theory. (Total Call Internat., Inc. v. Peerless Ins. Co. (2010) 181 Cal.App.4th 161, 166.) We treat the demurrer as admitting all properly pleaded material facts, but we do not assume the truth of contentions, deductions, or conclusions of fact or law, and we disregard any allegations that are contrary to the law or to facts of which the trial court properly took judicial notice. (Ibid.; Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 751-752 (Scott).)
The appellant bears the burden to affirmatively demonstrate error. "Specifically, the appellant must show that the facts pleaded are sufficient to establish every element of a cause of action and overcome all legal grounds on which the trial court sustained the demurrer. [Citation.] We will affirm the ruling if there is any ground on which the demurrer could have been properly sustained." (Scott, supra, 214 Cal.App.4th at p. 752.)
If the trial court sustained a demurrer without leave to amend, " ' "we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." ' " (Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 992 (Buller).)
II. The Merits
We begin with an overview of the nonjudicial foreclosure process. "A nonjudicial foreclosure sale is a 'quick, inexpensive[,] and efficient remedy against a defaulting debtor/trustor.' [Citation.] To preserve this remedy for beneficiaries while protecting the rights of borrowers, 'Civil Code sections 2924 through 2924k provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.' [Citation.] Under a deed of trust, the trustee holds title and has the authority to sell the property in the event of a default on the mortgage. [Citation.] To initiate the foreclosure process, '[t]he trustee, mortgagee, or beneficiary, or any of their authorized agents' must first record a notice of default . . . . After three months, a notice of sale must then be published, posted, mailed, and recorded in accordance with the time limits prescribed by the statute. [Citations.] [¶] The 'traditional method' to challenge a nonjudicial foreclosure sale 'is a suit in equity . . . to have the sale set aside and to have the title restored." (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 10-11.)
One of the independent grounds for the trial court's ruling was that plaintiff was not authorized to bring a preemptive action to challenge a nonjudicial foreclosure. (See Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 813-815 (Saterbak).) But plaintiff ignores this issue in her opening brief on appeal. By doing so, she has forfeited her challenge to the ruling. Plaintiff, as appellant, has the burden of persuasion. (People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1237.) "When a trial court states multiple grounds for its ruling and appellant addresses only some of them, we need not address appellant's arguments because 'one good reason is sufficient to sustain the order from which the appeal was taken." (Ibid., citing Sutter Health Uninsured Pricing Cases (2009) 171 Cal.App.4th 495, 513; see Brown v. Deutsche Bank National Trust Co. (2016) 247 Cal.App.4th 275, 281-282.)
In any case, we agree with the trial court on the merits of this issue. California courts have repeatedly held that preemptive actions may not be brought to determine whether a foreclosing party may initiate a nonjudicial foreclosure, because such actions are inconsistent with the nonjudicial foreclosure scheme. Saterbak is squarely on point. The plaintiff there brought an action for declaratory relief and cancellation of an instrument, a deed of trust (Civ. Code, § 3412), alleging the transfer of a deed of trust on her property was void, in order to forestall a foreclosure sale. (Saterbak, supra, 245 Cal.App.4th at pp. 811-812.) The appellate court concluded the plaintiff lacked standing to challenge the assignment, reasoning, "The crux of Saterbak's argument is that she may bring a preemptive action to determine whether the 2007-AR7 trust may initiate a nonjudicial foreclosure. She argues, '[i]f the alleged "Lender" is not the true "Lender," ' it 'has no right to order a foreclosure sale.' However, California courts do not allow such preemptive suits because they 'would result in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature.' " (Id. at p. 814.) The court noted that the California Supreme Court had held that a borrower had standing to sue for wrongful foreclosure where an alleged defect in an assignment rendered the assignment void, but it had expressly limited this ruling to the post-foreclosure context. (Id. at p. 815, citing Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 942-943, 934-935.)
All statutory references are to the Civil Code.
Other California cases are in accord. The court in Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149 (Gomes), concluded a plaintiff could not maintain an action alleging wrongful initiation of foreclosure; in doing so, it explained the plaintiff "is not seeking a remedy for misconduct. He is seeking to impose the additional requirement that MERS demonstrate in court that it is authorized to initiate a foreclosure. . . . [S]uch a requirement would be inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpensive and efficient remedy." (Id. at p. 1154, fn. 5.) Gomes was followed by Robinson v. Countrywide Home Loans, Inc. (2011) 199 Cal.App.4th 42, 46, which stated, "We agree with the Gomes court that the statutory scheme (§§ 2924-2924k) does not provide for a preemptive suit challenging standing [to initiate a foreclosure proceeding]." Similarly, the court in Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 513, disapproved on another ground in Yvanova, supra, 62 Cal.4th at p. 939, fn. 13, followed Gomes to conclude that the statutory scheme does not authorize preemptive actions to prevent foreclosure, "because doing so would result in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature." (See also Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 159 ["a plaintiff may not seek to enjoin a foreclosure based on a claim that the foreclosing party lacked the necessary authority to foreclose"]; Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 82-83, disapproved on another point in Yvanova, supra, 62 Cal.4th at p. 939, fn. 13 [plaintiff could not bring preemptive suit challenging authority to foreclose because it would impermissibly create additional requirement for foreclosing party].)
Thus, even if plaintiff had not forfeited her challenge to this independent basis for the trial court's ruling, we would follow the consistent line of California cases holding that a plaintiff may not bring a preemptive action challenging a defendant's authority to proceed with a foreclosure on the ground that the deed of trust is void.
Finally, plaintiff has not met her burden to show the trial court abused its discretion in denying leave to amend. (Buller, supra, 160 Cal.App.4th at p. 992.) She has already had one opportunity to amend her complaint, and she suggests no manner in which she could amend it further to cure the defects the trial court identified.
DISPOSITION
The judgment is affirmed.
/s/_________
TUCHER, J. WE CONCUR: /s/_________
POLLAK, P. J. /s/_________
BROWN, J.