Opinion
A150309
11-07-2017
SONIA GUZMAN et al., Plaintiffs and Appellants, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. RG16821736)
This is an appeal from judgment of dismissal following the trial court's order sustaining the demurrer filed by defendants Wells Fargo Bank, N.A. (Wells Fargo); Mortgage Electronic Registration Systems, Inc. (MERS); and HSBC Bank USA, N.A. (HSBC), as Trustee for Wells Fargo Asset Securities Corp., Mortgage Pass-Through Certificates, Series 2007-7 (collectively, defendants). Plaintiffs Sonia Guzman and German Zaragoza filed suit against defendants asserting causes of action for declaratory relief and quiet title after the real property that is the subject of this appeal went into foreclosure. The trial court determined that plaintiffs had failed to state a valid cause of action for several reasons, including that California law does not authorize preemptive lawsuits, like theirs, to determine whether the foreclosing beneficiary of a deed of trust may initiate nonjudicial foreclosure proceedings, citing Saterbak v. J.P. Morgan Chase Bank N.A. (2016) 245 Cal.App.4th 808, 815.
For reasons we will discuss below, we conclude plaintiffs' challenge to the trial court's ruling on demurrer must be deemed forfeited in light of their failure to comply with mandatory rules of appellate procedure. Accordingly, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The following set of facts is taken from the trial court order subject to challenge on appeal, to wit, the November 15, 2016, order sustaining the demurrer to the original complaint without leave to amend. As alleged in this complaint, in 2007, plaintiffs entered into a loan agreement secured by a deed of trust (DOT) with American Home Mortgage (AHM) for the subject real property. AHM thereafter sold the loan to defendant Wells Fargo, who sold the loan to defendant Wells Fargo Asset Securities Corporation. The latter corporation, in turn, sold the loan to a securitized trust, Wells Fargo Mortgage-Backed Securities Trust, Series 2007-7.
According to the complaint, in 2009, defendant MERS assigned the loan to defendant HSBC. Later that year, a Notice of Default and Notice of Trustee's Sale was filed with respect to the subject real property. The complaint is silent, however, with respect to whether plaintiffs defaulted on the loan on this real property, or took steps to repay the loan at any time.
Plaintiffs thereafter filed the operative complaint, asserting causes of action against defendants for declaratory relief and quiet title. Specifically, plaintiffs sought by this complaint a declaration that defendants had no interest in the subject real property, that the Notices of Default and of Trustees Sale were invalid, and that plaintiffs were entitled to be granted title to the subject real property free and clear of any liens or adverse interests.
Following a contested hearing, the trial court issued a final order sustaining without leave to amend the demurrer to the complaint. In this order, the trial court reasoned as follows. With respect to plaintiffs' request for declaratory relief, the court found that California law does not authorize preemptive suits, like this, to determine if the foreclosing beneficiary of a DOT may initiate nonjudicial foreclosure proceedings. Next, the trial court found that borrowers, like plaintiffs, lack standing to challenge an assignment of rights or interests that is merely voidable, rather than void. And moreover, the court found, in this case, MERS was in fact authorized under the DOT terms to assign the interests of the lender or its successor. And, finally, in finding plaintiffs had failed to state a valid claim for quite title, the court reasoned that the borrower of a loan secured by real property cannot, under California law, quiet title to said property without first repaying the secured debt, which, in this case, plaintiffs do not allege occurred.
Judgment of dismissal with prejudice was thus entered in defendants' favor, prompting this appeal.
DISCUSSION
Plaintiffs challenge the trial court's ruling to sustain defendants' demurrer to their complaint without leave to amend. On appeal, a trial court's decision to sustain a demurrer is subject to de novo review. (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.) "[W]e give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded, but not the truth of contentions, deductions or conclusions of law. We reverse if the plaintiff has stated a cause of action under any legal theory. [Citation.]" (Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 507.) Conversely, we apply an abuse of discretion standard of review to a trial court's decision to sustain a demurrer with or without to leave to amend. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
Plaintiffs contend the trial court erred in sustaining this demurrer because their complaint states a valid claim for wrongful foreclosure. Plaintiffs reason that, in their complaint, they properly asserted that only the "true owner" or "beneficial holder" of a deed of trust can bring to completion a nonjudicial foreclosure under California law and, thus, that the trial court erred by "fail[ing] to verify that Wells Fargo was the real party in interest and beneficiary before dismissing [it] with prejudice."
We reject plaintiffs' contentions for several fundamental reasons. Most importantly, plaintiffs proceed in disregard of several well-established rules of appellate procedure, the first of which is the rule that a " 'judgment or order of the lower court is presumed correct. All intendments and presumptions are indulged to support it on matters as to which the record is silent, and error must be affirmatively shown. This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.' [Citations.]" (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) Further, and also disregarded by plaintiffs, is the rule that "it is the appellant's burden of providing a record that establishes error, and where the record is silent, we must indulge all intendments and presumptions to support the challenged ruling." (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1271.) " 'In the absence of a contrary showing in the record, all presumptions in favor of the trial court's action will be made by the appellate court.' " (Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th 181, 187.) And of particular significance, " '[a] necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial courts should be affirmed.' " (Gee v. American Realty & Construction, Inc. (2002) 99 Cal.App.4th 1412, 1416; accord Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502.)
In this case, as defendants point out, plaintiffs failed to uphold their threshold duty when challenging a lower court order to present the reviewing court with a competent record on appeal establishing error. Indeed, neither a clerk's transcript nor an appellants' appendix was ever filed. Nor does plaintiffs' brief set forth - much less address - the reasons provided by the trial court in the final order for sustaining the demurrer, or suggest any ways in which the pleading defects identified by the court could be cured by amendment. Instead, plaintiffs argue quite generally that the trial court erred by not accepting as true the allegations in their complaint but, rather, accepting as true the allegations in defendants' demurrer, citing various federal and state cases where courts have permitted a homeowner to proceed with a wrongful foreclosure action. This approach, however, does not comply with the well-established rule that an appellant must affirmatively demonstrate error in the case at hand to prevail on appeal. (Denham v. Superior Court, supra, 2 Cal.3d at p. 564; see also Blank v. Kirwan, supra, 39 Cal.3d at p. 318 [the burden of proving a reasonable possibility that the defect(s) in the complaint could be cured by amendment is "squarely on the plaintiff"].) And, yet, when defendants pointed out plaintiffs' fatal procedural flaws in their respondents' brief, plaintiffs responded by failing to file a reply brief on appeal.
The docket sheet in this case reflects that, on January 4, 2017, plaintiffs filed notice in court designating the record on appeal as including a clerk's transcript and reporter's transcript, as well as an administrative record. On January 11, 2017, defendants, in turn, filed notice of their election to use an appendix as the record on appeal. (Cal. Rules of Court, rule 8.124(a)(1)(B) & cmt. ["If . . . the respondent timely elects to use an appendix, that election will govern unless the superior court orders otherwise"].) Plaintiffs, however, thereafter filed nothing by way of a record on appeal. --------
As a result of these serious procedural deficiencies, we find no acceptable alternative to deeming plaintiffs' appellate challenge forfeited. Accordingly, because there is no valid basis upon which this court could conclude the trial court erred in sustaining defendants' demurrer without leave to amend, the judgment stands. (J.B. Aguerre, Inc. v. American Guarantee & Liability Ins. Co. (1997) 59 Cal.App.4th 6, 15-16 ["A trial court's order is affirmed if correct on any theory, even if the trial court's reasoning was not correct"].)
DISPOSITION
The judgment is affirmed. Defendants shall recover costs on appeal.
/s/_________
Jenkins, J. We concur: /s/_________
McGuiness, P. J. /s/_________
Pollak, J.