Opinion
A129915
08-12-2011
JULIO BARRERA, Plaintiff and Appellant, v. WELLS FARGO BANK, N.A. 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. RG09471378)
Julio Barrera lost his home in Oakland in a nonjudicial foreclosure sale (Civ. Code, § 2924). He filed a complaint seeking, among other things, to set aside the sale on the ground that the parties that conducted the sale did not have authority to do so. His complaint named Argent Mortgage Company, LLC (Argent), Wells Fargo Bank, N.A. (Wells Fargo), Litton Loan Servicing, L.P. (Litton), and Quality Loan Service Corporation (Quality) as defendants. The trial court sustained Wells Fargo's and Litton's demurrer to Barrera's first amended complaint (FAC) and an order of dismissal was entered. Barrera contends that the trial court erred in sustaining the demurrer. We affirm.
All further statutory references are to the Civil Code unless otherwise specified.
Barrera's claims against Argent and Quality are not at issue on appeal. Wells Fargo and Litton are hereinafter referred to as respondents.
I. LEGAL BACKGROUND
It is helpful to begin with a summary of the law governing nonjudicial foreclosure, as provided in a recently published opinion in Ferguson v. Avelo Mortgage, LLC (2011) 195 Cal.App.4th 1618, 1623-1624 (Ferguson): "The power of sale in a deed of trust allows a beneficiary recourse to the security without the necessity of a judicial action. [Citation.] Absent any evidence to the contrary, a nonjudicial foreclosure sale is presumed to have been conducted regularly and fairly. (. . . § 2924.) However, irregularities in a nonjudicial trustee's sale may be grounds for setting it aside if they are prejudicial to the party challenging the sale. [Citations.] Setting aside a nonjudicial foreclosure sale is an equitable remedy. [Citation.] A court will not grant equitable relief to a plaintiff unless the plaintiff does equity. [Citations.] Thus, '[i]t is settled that an action to set aside a trustee's sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security.' [Citations.] [¶] However, a tender may not be required where it would be inequitable to do so. (See Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424; see also Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 876-878 [when new trustee has been substituted, subsequent sale by former trustee is void, not merely voidable, and no tender needed to set aside sale].)" (Parallel citations omitted.)
II. FACTUAL & PROCEDURAL BACKGROUND
Given the procedural posture of this case, the facts are drawn from Barrera's FAC, its exhibit, and the documents judicially noticed by the trial court.
Barrera owned real property located at 1222 44th Avenue in Oakland (the Property). Barrera defaulted on a loan secured by the Property and the Property was sold in a trustee's foreclosure sale on August 7, 2009. On August 28, 2009, Barrera filed his complaint seeking to set aside the trustee's sale of his property and for damages, alleging causes of action for declaratory and injunctive relief, fraud, unfair debt collection practices, unfair and deceptive business practices (Bus. & Prof. Code, § 17200),conspiracy to commit conversion, violation of Finance Code sections 4970 through 4979.8, negligence, breach of fiduciary duty, and violation of section 1632. Respondents successfully demurred to the complaint and the trial court granted leave to amend. On April 9, 2010, Barrera filed his FAC, which alleged the same causes of action.
We will refer to this cause of action as the unfair competition law (UCL) cause of action.
On appeal, Barrera focuses on his declaratory relief, negligence and UCL causes of action and does not present any argument with respect to his remaining causes of action. Accordingly, we do not further address these causes of action, or the allegations underlying them.
In the FAC, Barrera alleged that: On or about November 12, 2004, Barrera obtained a loan from Argent for purchase of the Property and executed a promissory note (the Note) in the amount of $480,000. Barrera also signed a deed of trust (the Deed of Trust) on the Property securing that note, wherein he was designated as "borrower," Argent was designated as "lender," and Town and Country Title Services, Inc. (Town & Country) was designated "trustee." Barrera alleges that Wells Fargo, Litton, and Quality were not identified on either the Note or the Deed of Trust.
On or about January 13, 2009, Argent assigned the Deed of Trust to Wells Fargo. But, according to Barrera, the Note was not assigned. Specifically, Barrera asserts: "[T]he promissory note . . . was never assigned to [Wells Fargo, Litton, or Quality] . . . . [B]ecause there was not a proper assignment of the note to any of the defendants and assuming there was an assignment it was not recorded, . . . the promissory note was rendered non-negotiable and no power of sale was conveyed with the note at the time of the assignment, and therefore, defendants . . . have no lawful security interest in the subject property."
On or about January 13, 2009, Quality served a notice of default on behalf of Wells Fargo and Litton, alleging that Barrera had failed to make payments on the promissory note. A notice of trustee's sale was recorded on April 16, 2009. The Property was eventually sold in August 2009. As a result of the assignment of only the Deed of Trust, Barrera alleges that neither Wells Fargo, Litton, nor Quality had any "rights or interest in the debt or any right to proceed with any foreclosure proceedings on the subject property." Barrera alleged that "the foreclosure of the subject property is void . . . as a matter of law."
Respondents demurred, arguing that Barrera's FAC failed to state a cause of action. Specifically, respondents argued that all of Barrera's causes of action failed because Barrera's allegations were contradicted by judicially noticeable documents and because Barrera had not alleged tender.
Respondents asked the trial court to take judicial notice of certain documents recorded in the official records of Alameda County, including the Deed of Trust, an assignment of the Deed of Trust, the notice of default, the notice of trustee's sale, and the trustee's deed upon sale. The Deed of Trust provides: "The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. . . . [¶] . . . [¶] . . . Lender, at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located. . . . This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution." The assignment of deed of trust, dated January 13, 2009, and recorded on February 26, 2009, provided: "For value received, [Argent] hereby grants, assigns, and transfers to [Wells Fargo] all beneficial interest under [the Deed of Trust] together with the Promissory Note secured by said Deed of Trust and also all rights accrued or to accrue under said Deed of Trust." The notice of default shows that it was recorded, on January 13, 2009, by "Quality . . . , AS AGENT FOR BENEFICIARY." On April 16, 2009, Quality recorded a notice of trustee's sale. On August 17, 2009, a trustee's deed was recorded showing sale of the Property to the foreclosing beneficiary.
The assignment was actually to "Wells Fargo Bank, N.A., as Trustee, in trust of the registered Holders of Park Place Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2005-WLL1." For ease of reference, we refer simply to Wells Fargo.
With respect to Barrera's declaratory relief cause of action, the trial court granted the request for judicial notice and sustained respondents' demurrer, without leave to amend. The court's ruling provides: "This cause of action seeks a judicial declaration that [respondents] have no rights with respect to the Property . . . since 'there was a separation of the [D]eed of [T]rust from the [N]ote/debt . . . and there was no assignment of the rights under the promissory note . . . . [¶] These allegations are contrary to the judicially noticed facts and deficient as a matter of law. . . . The judicially noticed facts reflect that on February 26, 2009, [respondents] recorded an 'Assignment of Deed of Trust' that states that 'all beneficial interest' under the [Deed of Trust], 'together with the Promissory Note secured by said' [Deed of Trust] were assigned to [Wells Fargo.] (RJN, Exh. B.) The recorded assignment of the beneficial interest in the [N]ote and [Deed of Trust] were sufficient, as a matter of law, to transfer the obligation under the [N]ote and [Deed of Trust] to [Wells Fargo] and to allow its duly appointed trustee or other agent to conduct the sale, regardless of who had possession of the 'original note.' [Citations.] [¶]Thus, [Barrera's] allegations that there was a 'separation' of the rights under the Note and [Deed of Trust], or that there was no valid assignment, such that [respondents] could assert no rights in the Property, are contradicted by the judicially noticed facts. Further, [Barrera] does not assert that Argent has continued to assert any rights under the Note or [Deed of Trust], or that he has been subject to competing demands, making his allegations that [respondents] were not the appropriate payees hollow."
With respect to Barrera's UCL and negligence causes of action, respondents' demurrer was sustained with leave to amend. The trial court noted that these claims were derivative of the first cause of action, but granted leave to amend because Barrera also included conclusory allegations that respondents violated sections 2923.5, 2923.6, 2932.5, and 2924. The trial court also noted: "To the extent [Barrera] asserts some other irregularity in the sale process under . . . § 2924, a challenge on this basis requires [him] to allege not only a substantial or material irregularity in the sale or notice procedure resulting in prejudice [citation] but also that he tendered the debt due under the Note . . . ." Barrera was given 15 days to file and serve a second amended complaint.
After Barrera failed to file a second amended complaint, the court granted respondents' unopposed motion to dismiss (Code Civ. Proc., § 581, subd. (f)(2)). An order of dismissal was entered and notice of entry of the dismissal order was served on August 4, 2010. Barrera filed a notice of appeal on October 5, 2010.
III. DISCUSSION
Although the arguments presented in Barrera's opening brief lack clarity, we believe that he raises two alternative arguments. First, Barrera argues that the trial court erred by taking judicial notice of the contents of the recorded assignment. He also argues that, even if the trial court properly took judicial notice of the assignment, his FAC was sufficient to state a cause of action because it alleged that Quality had not been properly substituted as trustee on the Deed of Trust. We construe the latter point as an argument that the court abused its discretion by denying leave to amend. Neither argument has merit.
A. Jurisdiction
Although respondents do not raise the point, we first observe that it appears that Barrera's notice of appeal was not timely filed. We address the issue sua sponte because "[c]ompliance with the time for filing a notice of appeal is mandatory and jurisdictional. [Citation.] If a notice of appeal is not timely, the appellate court must dismiss the appeal. [Citation.]" (Laraway v. Pasadena Unified School Dist. (2002) 98 Cal.App.4th 579, 582.)
A written and signed order of dismissal is an appealable "judgment." (Code Civ. Proc., § 581d.) Thus, in this case, the 60-day appeal period began to run on August 4, 2010, when Barrera was served with notice of entry of the dismissal order. (Cal. Rules of Court, rule 8.104(a)(2).) The file stamp on Barrera's notice of appeal shows that Barrera's notice of appeal was filed on October 5, 2010—one day past the 60-day deadline.
A document is "filed" when it is actually delivered to the clerk of the court during office hours, even if the clerk erroneously refuses to file it. (United Farm Workers of America v. Agricultural Labor Relations Bd. (1985) 37 Cal.3d 912, 918.) In his opening brief, Barrera asserts: "On October 4, 2010, [he] timely filed his notice of appeal . . . by facsimile transmission to the clerk of the Alameda County Superior Court. However, the clerk erroneously processed this timely filing as having occurred on October 5, 2010 . . . ." The notice of appeal does bear a notation that reads: "Oct 04 2010 3:22PM HP LASERJET FAX." There is nothing else in the record on this point.
Barrera notes in his opening brief that "[he] will seek permission . . . to present evidence of [his] timely filing of his notice of appeal pursuant to California Rule of Court 8.252." Despite Barrera's notation in his opening brief and our focus letter calling the matter to his counsel's attention, he has not filed a motion asking the court to take evidence on the issue, but instead attempted to file at the time of oral argument a declaration by an attorney in his office purporting to describe the circumstances of the filing. Accordingly, we disregard the declaration submitted by counsel. The record before the court shows that Barrera's notice of appeal was not timely filed. Even if we were to assume that the appeal was timely filed, it would lack merit, as we explain. B. Standard of Review
California Rules of Court, rule 8.252(c) provides: "(1) A party may move that the reviewing court take evidence. [¶] (2) An order granting the motion must: [¶](A) State the issues on which evidence will be taken; [¶] (B) Specify whether the court, a justice, or a special master or referee will take the evidence; [¶] (C) Give notice of the time and place for taking the evidence. [¶] (3) For documentary evidence, a party may offer the original, a certified copy, or a photocopy. The court may admit the document in evidence without a hearing."
"On appeal from an order of dismissal after an order sustaining a demurrer, the standard of review is de novo: we exercise our independent judgment about whether the complaint states a cause of action as a matter of law. [Citation.] First, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. Next, we treat the demurrer as admitting all material facts properly pleaded. Then we determine whether the complaint states facts sufficient to constitute a cause of action. [Citations.] [¶] We do not, however, assume the truth of contentions, deductions, or conclusions of law. [Citation.]" (Stearn v. County of San Bernardino (2009) 170 Cal.App.4th 434, 439-440.)
A complaint is properly subject to demurrer if judicially noticeable facts render it defective. (See Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) "Under the doctrine of truthful pleading, the courts 'will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed.' [Citation.] 'False allegations of fact, inconsistent with annexed documentary exhibits [citation] or contrary to facts judicially noticed [citation], may be disregarded . . . .' [Citations.]" (Hoffman v. Smithwoods RV Park, LLC (2009) 179 Cal.App.4th 390, 400; accord C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1102 [allegations in conflict with judicially noticeable facts are null].) However, " '[t]he hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.' [Citations.]" (Silguero v. Creteguard, Inc. (2010) 187 Cal.App.4th 60, 64 [denying request for judicial notice of deposition testimony].)
"[I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]" (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) The burden of showing a reasonable possibility that a complaint's defects can be cured by amendment is on the plaintiff. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) On appeal from a demurrer we search the facts to see if they make out a claim for relief under any theory, regardless of whether the theory was raised before the trial court. (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 629-630.) C. Judicial Notice
Barrera alleged, in his FAC, that the foreclosure sale was void because Argent assigned only the Deed of Trust to Wells Fargo, and not the Note. The trial court disregarded Barrera's factual allegation because it was contradicted by the recorded assignment, which provided: "For value received, [Argent] hereby grants, assigns, and transfers to [Wells Fargo] all beneficial interest under [the Deed of Trust] together with the Promissory Note secured by said Deed of Trust and also all rights accrued or to accrue under said Deed of Trust." (Italics added.) Barrera argues on appeal that "[t]he trial court's conclusive acceptance of the truth of Respondents' recorded foreclosure documents via judicial notice was contrary to law." We conclude that the trial court did not err in granting respondents' request for judicial notice.
1. Background
Barrera opposed respondents' demurrer, but did not raise any written objection to respondents' request for judicial notice. However, at oral argument on the motion, Barrera's counsel objected to the court taking judicial notice of the truth of statements contained within the recorded assignment. Specifically, Barrera's counsel argued: "[W]e are at the pleading stage, and if plaintiff says [the assignment] is insufficient, then that's a factual dispute whether or not you record one document or record both documents . . . . [¶] At a pleading stage, it has to go forward." The court responded: "I am sure that's true if your view was those documents that were recorded, the signature is a forgery . . . and therefore I should not accord it any significance . . . . [¶] But where there is not a claim of forgery and [the recorded document] recites [that both the Note and the Deed of Trust were assigned to Wells Fargo], it's not hearsay, because the document itself effects the assignment. . . . [¶] . . . [¶] . . . [A] contract is not hearsay of the terms in the contract. It's a nonhearsay purpose. So, I am trying to understand what is the basis for your saying in the face of the recording that the [D]eed of [T]rust but not the [N]ote was assigned?" Barrera did not put forward any factual basis to challenge the recorded assignment.
We will assume that trial counsel's objection at the hearing was sufficient to preserve Barrera's argument on appeal.
2. Analysis
Barrera concedes that courts may notice the existence of public records (Evid. Code, § 452, subds. (c), (h)), but asserts that the courts cannot take judicial notice of the truth of matters stated therein. Barrera relies on Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057 (Mangini). In Mangini, our Supreme Court held that it could not take judicial notice of the truth of conclusions within a report from the United States Surgeon General regarding smoking's health effects. (Id. at pp. 1063-1064, overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1262, 1276.) Likewise, the court determined that it could not judicially notice the truth of matters reported in a newspaper article. (Mangini, at p. 1065.)
But, Mangini obviously did not address legally operative documents such as the recorded assignment. The courts of appeal have repeatedly approved taking judicial notice of facts established by similar real property records, including the fact of the document's recordation, the date of recordation and execution, the parties to the transaction, and, if there is no genuine dispute about the document's authenticity, its legal effect, when that effect is clear from the face of the document. (See Fontenot v. Wells Fargo Bank, N.A. (Aug. 11, 2011, A130478) __ Cal.App.4th __ <http://www.courtinfo.ca.gov/opinions/documents/A130478.PDF>; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1367, fn. 8, 1382; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117-1118 (Poseidon); McElroy v. Chase Manhattan Mortgage Corp. (2005) 134 Cal.App.4th 388, 394; Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 548-549; Cal-American Income Property Fund II v. County of Los Angeles (1989) 208 Cal.App.3d 109, 112, fn. 2.)
Much of the authority relied on by Barrera is distinguishable for the same reason. (See In re Noreen G. (2010) 181 Cal.App.4th 1359, 1389, fn. 13; C.R. v. Tenet Healthcare Corp., supra, 169 Cal.App.4th at pp. 1100-1104; Unruh-Haxton v. Regents of University of California (2008) 162 Cal.App.4th 343, 364-365; Hughes v. Blue Cross of Northern California (1989) 215 Cal.App.3d 832, 856-857, fn. 2; Middlebrook-Anderson Co. v. Southwest Sav. & Loan Assn. (1971) 18 Cal.App.3d 1023, 1038; Elford v. Hiltrabrand (1944) 63 Cal.App.2d 65, 73.)
Poseidon, supra, 152 Cal.App.4th 1106, is directly on point. In Poseidon, a borrower executed a promissory note in favor of Poseidon. The borrower also executed a deed of trust to Chicago Title Company for the benefit of Poseidon. (Id. at p. 1110.) After the borrower defaulted, Poseidon sued for breach of the promissory note and sought to recover, among other things, expenses incurred in initiating nonjudicial foreclosure proceedings. (Id. at p. 1109.) The trial court sustained the borrower's demurrer without leave to amend, reasoning that Poseidon's assignment of the trust deed and note to another entity, of which it had taken judicial notice, showed Poseidon had no right to initiate foreclosure. (Id. at pp. 1111, 1116-1117.) The trial court also took judicial notice of the deed of trust, several substitutions of trustee, and a notice of default. (Id. at p. 1116.)
Poseidon challenged the trial court's judicial notice ruling on appeal, arguing that "the trial court erred in relying on judicial notice to resolve a factual dispute as to whether [it] remained the beneficiary on the [n]ote and [d]eed of [t]rust." (Poseidon, supra, 152 Cal.App.4th at p. 1117.) Specifically, Poseidon contended that the trial court could not take judicial notice of the truth of matters stated in the assignment. (Ibid.) The court agreed that it would have been improper to take judicial notice of the truth of hearsay statements of fact recited within recorded documents. Accordingly, the court noted: "For example, the First Substitution recites that Shanley 'is the present holder of beneficial interest under said Deed of Trust.' By taking judicial notice of the First Substitution, the court does not take judicial notice of this fact, because it is hearsay and it cannot be considered not reasonably subject to dispute." (Ibid.) However, the court rejected Poseidon's argument that the trial court should not have taken judicial notice of the effect of the assignment—that it transferred beneficial interest in the note and deed of trust to another entity—because it conflicted with Poseidon's allegations. The reviewing court noted that Poseidon did not dispute the validity of the assignment, only its effect. (Id. at pp. 1117-1118.) The court observed: "[The] legal effect [of the assignment] could not be clearer. It is not reasonably subject to dispute that, whatever else occurred, Poseidon gave up and no longer held the beneficial interest under the deed of trust. Poseidon's argument that the trial court erred in taking judicial notice of the effect of the [assignment] is comparable to saying that, while a court may take judicial notice of a judicial decision awarding damages, it may not take judicial notice that the effect of that decision is to make the prevailing party entitled to the damages awarded." (Id. at p. 1118.)
The Poseidon court again addressed the proper scope of judicial notice of recorded documents when it decided Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366 (Herrera). In Herrera, the court concluded that it was error to take judicial notice of the truth of several recitations of fact within a substitution of trustee and an assignment of deed of trust. The court noted: "The substitution of trustee recites that the Bank 'is the present beneficiary under' the 2003 deed of trust. As in Poseidon, this fact is hearsay and disputed; the trial court could not take judicial notice of it. Nor does taking judicial notice of the assignment of deed of trust establish that the Bank is the beneficiary under the 2003 deed of trust. The assignment recites that JPMorgan Chase Bank, 'successor in interest to WASHINGTON MUTUAL BANK, SUCCESSOR IN INTEREST TO LONG BEACH MORTGAGE COMPANY' assigns all beneficial interest under the 2003 deed of trust to the Bank. The recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. . . . [¶] Judicial notice of the recorded documents did not establish that the Bank was the beneficiary or that CRC was the trustee under the 2003 deed of trust." (Id. at p. 1375.)
This case is remarkably similar to Poseidon, which we believe was correctly decided. Thus, we agree with respondents that the trial court properly took judicial notice of the legal effect of the assignment—that Argent transferred its beneficial interest, in both the Deed of Trust and the Note, to Wells Fargo. The operative language of the assignment expressly states that Argent assigned its interest in the Deed of Trust "[t]ogether with the Promissory Note secured by said Deed of Trust" (italics added) to Wells Fargo. Unlike the statement at issue in Herrera, this statement was not hearsay.(Evid. Code, § 1200.) Barrera does not assert that anything beyond execution and recordation of the assignment was required to make the assignment's language legally operative. And Barrera does not assert that the recorded assignment was a forgery or that Argent has continued to assert any rights under the Note. We conclude that the trial court was entitled to take judicial notice of the assignment and disregard conflicting allegations in Barrera's complaint, rendering Barrera's declaratory relief claim insufficient to state a cause of action. (See Poseidon, supra, 152 Cal.App.4th at pp. 1117-1118.)
In Herrera, the trial court improperly took judicial notice of the truth of a hearsay recitation, within an assignment, that JPMorgan Chase Bank held the beneficial interest under a deed of trust before its assignment. (Herrera, supra, 196 Cal.App.4th at p. 1375.) In this case, Barrera himself alleges that Argent was the original beneficiary under the Deed of Trust.
Barrera's citation to Abernathy Valley, Inc. v. County of Solano (2009) 173 Cal.App.4th 42 (Abernathy) and South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725 (South Shore) does not compel a different conclusion. In Abernathy, this division denied a request for judicial notice of "various deeds, judgments and indentures evidencing the conveyance history" of certain property. (Abernathy, supra, 173 Cal.App.4th at p. 54, fn. 6.) In denying the request for judicial notice, this division stated: "Abernathy cites the documents for the truth of the facts stated therein (i.e., as evidence of actual conveyances of the property, not as evidence of the existence of records on file in court), which is not a proper subject of judicial notice." (Ibid., citing Mangini, supra, 7 Cal.4th at p. 1063.) But, this division also went on to note several other alternative reasons to deny judicial notice. (Abernathy, at p. 54, fn. 6.) We do not read the Abernathy reference as a rejection of Poseidon, supra, 152 Cal.App.4th at pages 1117-1118, which was clearly not considered.
In South Shore, the reviewing court denied a request for judicial notice of recorded deeds and other instruments. (South Shore, supra, 226 Cal.App.2d at p. 746.) In South Shore, the parties had presented competing chains of title to establish their individual claims of right to the property at issue. (Id. at pp. 742-744, 746-747.) The question was which of two grants from the government included the property in question. (Ibid.) The court concluded: "We do not . . . take judicial notice of private maps and instruments of record as between private individuals . . . . [A]s applied to the instant case, we cannot judicially notice the deeds and conveyances in the chains of title asserted respectively by appellant and respondent other than the conveyances from the United States and the State of California . . . ." (Id. at p. 746, fn. omitted.)
Here, unlike in South Shore, there is no genuine dispute that Argent's interest in the Note was conveyed by the assignment. Barrera has presented no claim of forgery or competing instruments showing anyone other than Wells Fargo holding a beneficial interest in the Note after January 13, 2009. The trial court did not err in taking judicial notice of the legal effect of the assignment. D. Quality's Authority to Act as Substitute Trustee
Perhaps recognizing that his judicial notice argument lacks merit, Barrera contends: "The [trial] court also failed to consider [Barrera's] allegations that [Quality] . . . commenced and conducted foreclosure on [Barrera's] home without proper substitution as the foreclosing trustee." Respondents argue that we should not reach this point because it was not raised in the trial court.
The question is whether Barrera alleged, in his FAC, that Quality had commenced and conducted foreclosure proceedings without substitution as the trustee. "When a demurrer is sustained without leave to amend the petitioner may advance on appeal a new legal theory why the allegations of the petition state a cause of action. [Citation.]" (20th Century Ins. Co. v. Quackenbush (1998) 64 Cal.App.4th 135, 139, fn. 3, italics added; accord, Smith v. Commonwealth Land Title Ins. Co., supra, 177 Cal.App.3d at pp. 629630 ["on appeal from a demurrer we search the facts to see if they make out a claim for relief under any theory" (1st italics added)].)
Our review of the FAC shows that, contrary to his repeated assertion, Barrera failed to allege that Quality had not been substituted as trustee. Barrera did repeatedly set forth the legal conclusion that the trustee's sale was void and that neither "[Wells Fargo, Litton, or Quality] had . . . any right to proceed with any foreclosure proceedings on the subject property." But, the factual allegation underlying that conclusion was that Wells Fargo had not been assigned the Note. For example, Barrera alleges that "the Notice of Default by [Quality] was void because it resulted from the improper assignment of the [D]eed of [T]rust . . . ."
In his opening brief, Barrera actually concedes at one point that "he did not specifically allege that the foreclosure process and sale were void due to [respondents'] failure to substitute Quality . . . as the trustee . . . ." Thus, Barrera must be arguing (obliquely) that he could amend his declaratory relief cause of action to allege that Quality was not substituted as trustee. An order sustaining a demurrer without leave to amend constitutes an abuse of discretion if there is any reasonable possibility that the defect can be cured by amendment. And a plaintiff may show for the first time on appeal that the complaint can be amended to state a cause of action. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386.) Nonetheless, Barrera bears the burden of demonstrating how the proposed amendment would render his complaint legally sufficient. (Id. at p. 1388.)
Barrera's proposed amended pleading would not state a cause of action because, again, it would conflict with judicially noticeable facts. Respondents have requested that we take judicial notice of a document titled "Substitution of Trustee," which was recorded on February 24, 2009. The legal effect of the substitution of trustee is apparent from the operative language of the recorded substitution itself, which expressly states that Wells Fargo "hereby substitutes [Quality] as Trustee" under the Deed of Trust. This statement is not hearsay. (Evid. Code, § 1200.) The substitution was legally operative when recorded, on February 24, 2009. (See § 2934a, subd. (a)(1)(A) ["[t]he trustee under a trust deed upon real property . . . may be substituted by the recording in the county in which the property is located of a substitution executed and acknowledged by . . . all of the beneficiaries under the trust deed, or their successors in interest"]; Dimock v. Emerald Properties, supra, 81 Cal.App.4th at pp. 874-876 ["section 2934a only permits a substitution by way of a recorded document"].) Barrera does not claim forgery. Accordingly, we grant respondents' request and take judicial notice of the substitution. (See Poseidon, supra, 152 Cal.App.4th at pp. 1117-1118.)
Respondents did not request that the trial court take judicial notice of the recorded substitution, presumably because the allegations of the FAC did not challenge it.
Unlike in Herrera, we have not been asked to judicially notice the truth of the substitution's recitation that "[Wells Fargo] is the present Beneficiary under [the] Deed of Trust . . . ." Barrera himself alleges that Wells Fargo was the beneficiary after assignment of the Deed of Trust.
Because the other documents included in respondents' request for judicial notice are already part of the record on appeal, we need not take judicial notice of them. We deny respondents' request for judicial notice of exhibits A, B, C, E, and F.
Thus, the judicially noticed facts show that Quality was substituted as trustee, on February 24, 2009, after Wells Fargo had been assigned the Note and Deed of Trust. Even if the January 13, 2009 notice of default was defective because it was issued by Quality before its substitution, the notice of sale was valid when recorded three months later. (See Ferguson, supra, 195 Cal.App.4th at p. 1628.) And, as Barrera himself alleges, the trustee's sale was not completed until August 2009—long after Quality's substitution became effective. Any irregularity in the foreclosure process caused by the defective notice of default does not render the sale void, but merely voidable. But in such a case, the tender requirement applies. (Ibid.) Barrera has not alleged, and has not shown he could amend to allege, that he tendered payment of the full debt as required to support the cause of action.
Barrera's reliance on Dimock, supra, 81 Cal.App.4th 868, is misplaced. In Dimock, the Fourth District Court of Appeal held that a foreclosure sale noticed and completed by the original trustee was void, and tender was not required, because a substitution of trustee had been recorded in the interim. (Id. at pp. 876-878.)
Barrera has not shown that the trial court abused its discretion by denying leave to amend the declaratory relief cause of action. Barrera does not argue on appeal that his negligence and UCL causes of action are based on facts independent of his declaratory relief claim. Accordingly, Barrera's appeal fails with respect to these causes of action for the reasons stated above. The appeal is, in any event, untimely.
IV. DISPOSITION
The judgment is affirmed.
Bruiniers, J.
We concur:
Jones, P.J.
Needham, J.