Opinion
E067665
10-12-2018
ROBIN L. HOFFMAN, Plaintiff and Appellant, v. DEUTSCHE BANK NATIONAL TRUST COMPANY as Trustee, etc. et al., Defendants and Respondents.
Moore & Pico and Dennis Moore for Plaintiff and Appellant. Bryan Cave, Christopher L. Dueringer, and Kazim A. Naqvi for 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. CIVDS1513176) OPINION APPEAL from the Superior Court of San Bernardino County. Bryan F. Foster, Judge. Affirmed. Moore & Pico and Dennis Moore for Plaintiff and Appellant. Bryan Cave, Christopher L. Dueringer, and Kazim A. Naqvi for Defendants and Respondents.
According to her complaint, Robin L. Hoffman took out a home loan from IndyMac Bank, FSB (IndyMac). Under the deed of trust, the beneficiary was Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for IndyMac and its successors and assigns. IndyMac was taken over by the Federal Deposit Insurance Corporation (FDIC); most or all of its assets were sold. Thereafter, MERS purported to assign the loan to Deutsche Bank National Trust Company as Trustee for Residential Asset Securitization Trust 2005-A8CB Mortgage Pass-Through Certificates Series 2005-H (Trust). Finally, the Trust foreclosed.
Based on these facts, Hoffman asserted a cause of action against the Trust and others for wrongful foreclosure. The trial court sustained a demurrer, without leave to amend.
Hoffman now contends:
1. The assignment was void because MERS no longer had an interest in the note and trust deed.
2. Hoffman was not required to allege either tender or prejudice because the assignment was void.
3. Hoffman is entitled to leave to amend.
We will affirm because Hoffman has not shown error.
I
FACTUAL BACKGROUND
The following facts are taken from the allegations of the operative (second amended) complaint.
Hoffman owned a piece of residential real property in Crestline. In 2005, she refinanced the existing loan on the property.
As part of the refinancing, she signed a note and a deed of trust. The deed of trust defined the "Lender" as IndyMac. It defined the "beneficiary" as MERS, "solely as nominee for Lender and Lender's successors and assigns . . . ."
The deed of trust also provided: "Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right to exercise any and all of those interests, including, but not limited to, the right to foreclose and sell the property . . . ."
The Trust was formed in 2005 pursuant to New York law. It is governed by a pooling and service agreement. The pooling and service agreement provides that any and all assets of the Trust are to be transferred into the Trust by 2005. It also provides that, to transfer a loan into the Trust, the loan must first be transferred to an entity known as the "Depositor," and then transferred by the Depositor to the Trust. Moreover, the original note must be endorsed and delivered to the Trust.
In 2009, IndyMac was taken over by the FDIC. Most of IndyMac's assets were sold to OneWest Bank, FSB (OneWest). As of 2014, IndyMac no longer existed.
In April 2014, MERS purported to assign Hoffman's note and deed of trust to the Trust. The assignment was signed by Noemi Morales, as Assistant Secretary of MERS. It stated that MERS was "acting solely as nominee for IndyMac, . . . its successors and assigns . . . ." (Capitalization altered.)
Hoffman alleges that both the note and the trust deed were assigned. The assignment itself, however, which is attached to the complaint, assigns only the trust deed. For purposes of this appeal, we treat Hoffman's allegation as a concession that the note was also assigned (perhaps in a separate document). (See Kelley v. Upshaw (1952) 39 Cal.2d 179, 192 ["[The] purported assignment of the mortgage without an assignment of the debt which is secured was a legal nullity."]; In re Macklin (Bankr. E.D. Cal. 2013) 495 B.R. 8, 13, fn. 4 ["' . . . An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.'"]; cf. Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th 433, 440-442.)
The assignment was allegedly ineffective, however, because:
1. The loan was transferred to the Trust after 2005.
2. The loan was not transferred to the Trust by the Depositor.
3. The original note was not delivered to the Trust.
4. IndyMac had been taken over by the FDIC, most of its assets had been sold to OneWest, and it did not exist anymore.
5. Noemi Morales was not an officer, employee, or agent of MERS (and perhaps did not even exist).
In September 2014, the Trust recorded a notice of default. In June 2015, it recorded a notice of trustee's sale. In August 2015, it purchased the property at the trustee's sale.
Ocwen Loan Servicing, LLC (Ocwen) is named as a defendant. However, other than the conclusory allegation that "[d]efendants engaged in a fraudulent and wrongful foreclosure," there are no allegations of any wrongdoing by Ocwen.
II
PROCEDURAL BACKGROUND
Hoffman filed this action in 2015. Demurrers to her original and her first amended complaint were sustained, with leave to amend.
In 2016, she filed a second amended complaint (complaint), naming the Trust and Ocwen (defendants), among others, as defendants. It asserted a single cause of action, for wrongful foreclosure; it prayed for an order setting aside the foreclosure as well as for damages.
The caption listed IndyMac as a defendant. The complaint, however, alleged that "IndyMac no longer exists as a legal entity."
Western Progressive Trustee, LLC was named as a defendant, but it filed a declaration of nonmonetary status. This meant that it disclaimed any involvement in the action, other than as trustee, and it agreed to be bound by any subsequent judgment. (Civ. Code, § 2924l .)
Defendants filed a demurrer. In it, they argued, among other things, that: (1) Hoffman lacked standing to assert noncompliance with the pooling and service agreement; (2) Hoffman failed to allege that she had tendered payment of the loan; and (3) Hoffman failed to allege that she had been prejudiced by the alleged defects in the foreclosure.
In her opposition, Hoffman argued that: (1) the thrust of her allegations was not that the pooling and service agreement was not complied with, but rather that the note and trust deed were never effectively assigned; and (2) tender and prejudice were not required because the foreclosure was void rather than merely voidable.
The trial court, without stating reasons, sustained the demurrer without leave to amend and ordered the action dismissed with prejudice.
Four months later, the trial court also entered an arguably superfluous judgment of dismissal. Hoffman's notice of appeal was timely, however, regardless of whether it was taken from the order for dismissal (see Code Civ. Proc., § 581d; Cal. Rules of Court, rule 8.104(a)(1)(B)) or from the judgment of dismissal (Cal. Rules of Court, rule 8.104(d)).
III
ALLEGATIONS REGARDING DEFENDANTS' RIGHT TO FORECLOSE
Hoffman contends that she adequately alleged that defendants had no right to foreclose.
A demurrer should be sustained when "[t]he pleading does not state facts sufficient to constitute a cause of action." (Code Civ. Proc., § 430.10, subd. (e).) "'In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory.' [Citation.]" (King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1050.)
"A beneficiary or trustee under a deed of trust who conducts an illegal, fraudulent or willfully oppressive sale of property may be liable to the borrower for wrongful foreclosure. [Citations.] A foreclosure initiated by one with no authority to do so is wrongful for purposes of such an action. [Citations.] . . . [O]nly the original beneficiary, its assignee or an agent of one of these has the authority to instruct the trustee to initiate and complete a nonjudicial foreclosure sale." (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 929, fn. omitted.)
The allegations of Hoffman's complaint as to why defendants lacked such authority fall into two categories. First, she alleges that the purported assignment of the note and trust deed violated the pooling and service agreement. Second, she alleges that MERS lacked the power to assign the note and trust deed. In this appeal, however, she expressly disclaims any reliance on the pooling and service agreement; she relies exclusively on her second theory. Accordingly, we deem her first theory forfeited for purposes of this appeal, and we focus on her theory that MERS lacked the power to assign.
MERS was the named beneficiary in the trust deed. Thus, ordinarily, it would have the authority to assign the trust deed. Hoffman does not argue that MERS lost this authority simply because IndyMac went out of existence. If she did, we would disagree, because MERS had the authority to act as nominee not only for IndyMac, but also, after IndyMac went out of existence, for IndyMac's "successors and assigns."
Hoffman does argue, however, that the note and trust deed had been sold to OneWest, and OneWest was not IndyMac's successor or assign. We disagree, for two reasons.
First, the complaint alleged that "most of IndyMac's assets . . . were sold to OneWest . . . ." (Italics added.) It did not allege that Hoffman's note and trust deed were among them. For all we know, the FDIC sold them to the Trust.
More importantly, however, the rightful owner of the note and trust deed in 2014 — no matter who that was — was a successor of IndyMac, as a matter of law. "Successor in interest" means "[s]omeone who follows another in ownership or control of property." (Black's Law Dict. (10th ed. 2014) p. 1660.) Initially, IndyMac held the note and trust deed, then the FDIC took over the note and trust deed, and then the FDIC sold the note and trust deed to OneWest (or sold them to whoever or did not sell them at all). In each instance, the original lender's entire interest in the note and trust deed was conveyed. Thus, we reject Hoffman's unsupported assertion in her brief that "OneWest was not a successor in interest to the Lender, IndyMac . . . ."
"The [FDIC] shall, as conservator or receiver, and by operation of law, succeed to [¶] . . . all rights, titles, powers, and privileges of the insured depository institution . . . ." (12 U.S.C.A. § 1821(d)(2)(A)(i).)
Hoffman relies on Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552. There, the holder of the plaintiff's note and trust deed purported to assign them twice — first to Deutsche Bank, and then to Bank of America. (Id. at p. 557.) The court held that the subsequent foreclosure by Bank of America was wrongful, because after the first assignment, the assignor had nothing left to assign. (Id. at pp. 561-565.)
Hoffman argues that MERS, like the assignor in Sciarratta, no longer had anything to assign. Here, however, MERS had not made any previous assignment. Moreover, nothing else had occurred that would deprive MERS of the authority to assign.
The case most nearly on point is this court's decision in Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, disapproved on other grounds in Yvanova v. New Century Mortgage Corp., supra, 62 Cal.4th at p. 939, fn. 13.
There, as here, the plaintiffs' original lender was IndyMac. (Herrera v. Federal National Mortgage Assn., supra, 205 Cal.App.4th at p. 1499.) The trust deed named MERS as beneficiary and provided that "' . . . MERS (as nominee for Lender and Lender's successors and assigns) has . . . the right to foreclose and sell the Property . . . ." (Ibid.) IndyMac was taken over by the FDIC, and the FDIC sold IndyMac's assets to OneWest. MERS also assigned the plaintiffs' note and trust deed to OneWest. OneWest then assigned the note and trust deed to Fannie Mae. (Ibid.) Finally, Fannie Mae foreclosed. (Id. at p. 1500.)
On appeal, the plaintiffs asserted that the assignment from MERS to OneWest was void because there was no agency agreement between the FDIC and OneWest. (Herrera v. Federal National Mortgage Assn., supra, 205 Cal.App.4th at pp. 1498, 1502-1503, 1505.) We held that this argument was barred by the plaintiffs' agreement, in the trust deed itself, that MERS had the power to foreclose. (Id. at pp. 1503-1505.)
Herrera is controlling here as a matter of stare decisis. We also note that, both there and here, all of the successors to IndyMac took the trust deed subject to its terms, which included its provision that MERS could act as nominee of IndyMac's successors and assigns. Arguably, those successors could have affirmatively terminated MERS's power to act as nominee, but because they did not, that power continued.
Hoffman's only response to Herrera is that it is "distinguishable . . . since in her case, there are no allegations or evidence that demonstrate OneWest was the assignee or successor to IndyMac . . . ." (Capitalization altered.) As we have already held, however, there are. Indeed, on this point, the facts are the same as in Herrera.
In this appeal, Hoffman does not argue that Noemi Morales was not duly authorized to execute the assignment. Hence, she has forfeited any such contention.
We conclude that Hoffman has failed to allege that defendants lacked the right to foreclose. We therefore do not discuss her contentions that she did not need to allege either tender or prejudice.
IV
POSSIBILITY OF AMENDMENT
Hoffman also contends that, even if the demurrer was properly sustained, she could amend her complaint by adding additional facts so as to state a cause of action. Apparently she would allege that she was never in default; rather, Ocwen, as loan servicer for the Trust, refused to accept her payments, demanding more than was really due.
We say "apparently" because her brief is not clear on this point. For example, she claims that she had been paying approximately $976 a month, but in the summer of 2013, she and Ocwen agreed to a "payment plan" that called for her to pay $1506.44 a month. By December 2013, because she "was no longer behind on her mortgage payments," her payment "should have" reverted to approximately $976. However, she does not claim that the payment plan provided for the payments to revert, nor does she claim that she was in full compliance with the payment plan.
When a demurrer is sustained, "[i]t is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. [Citations.]" (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2018) ¶ 7:129.1, p. 7(I)-59, italics omitted.) 'The burden is on the plaintiff, however, to demonstrate the manner in which the complaint might be amended. [Citation.]'" (Hendy v. Losse (1991) 54 Cal.3d 723, 742.)
We deem this contention forfeited because Hoffman does not explain how her new allegations would state a cause of action. The only authority that she cites deals with the possibility of amending after a demurrer has been sustained. She provides no authority or analysis dealing with the elements of a wrongful foreclosure action. "'"'When an appellant [asserts a point] but fails to support it with reasoned argument and citations to authority, we treat the point as waived [or forfeited].'" [Citation.] . . . ' [Citation.]" (Sviridov v. City of San Diego (2017) 14 Cal.App.5th 514, 521, fn. omitted.)
V
DISPOSITION
The judgment is affirmed. Defendants are awarded costs on appeal against Hoffman.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAMIREZ
P. J.
We concur:
CODRINGTON
J.
RAPHAEL
J.