Opinion
E065453
05-15-2018
REGENA M. PATTERSON, Plaintiff and Appellant, v. U.S. BANK, N.A., Defendant and Respondent.
Regena M. Patterson, in pro. per.; Law Office of Stephanie N. West and Stephanie N. West for Plaintiff and Appellant. [Retained.] Wright, Finlay & Zak, LLP, Gwen H. Ribar, Cori B. Jones and Marvin B. Adviento for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. CIVDS1406766) OPINION APPEAL from the Superior Court of San Bernardino County. Wilfred J. Schneider, Jr., Judge. Affirmed. Regena M. Patterson, in pro. per.; Law Office of Stephanie N. West and Stephanie N. West for Plaintiff and Appellant. [Retained.] Wright, Finlay & Zak, LLP, Gwen H. Ribar, Cori B. Jones and Marvin B. Adviento for Defendant and Respondent.
INTRODUCTION
On May 1, 2006, plaintiff and appellant Regena M. Patterson refinanced her home in Ontario through Washington Mutual Bank (WaMu). The property was sold at a trustee's sale on October 21, 2014. Plaintiff alleged that the foreclosure was wrongful because there is no valid assignment of the trust deed or promissory note to U.S. Bank, which was the foreclosing beneficiary at the trustee's sale. She now appeals a judgment of dismissal entered after a demurrer to her second amended complaint was sustained without leave to amend. Although the complaint alleged 10 causes of action and the demurrer was sustained as to all of them, she addresses only the validity of the demurrer as to her claim for wrongful foreclosure. Her sole contention on appeal is that the trial court erred in sustaining the demurrer because she had standing to challenge the foreclosure as based on void assignments of the trust deed.
We will affirm the judgment.
LEGAL ANALYSIS
Standard of Review
On appeal from a judgment of dismissal after an order sustaining a demurrer without leave to amend, we examine the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) We give the complaint a reasonable interpretation and treat the demurrer as admitting all material facts properly pleaded, but we do not assume the truth of contentions, deductions or conclusions of law. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)
The fact that we examine the complaint de novo does not, however, "mean that [appellants] need only tender the complaint and hope we can discern a cause of action. It is [the appellant's] burden to show either that the demurrer was sustained erroneously or that the trial court's denial of leave to amend was an abuse of discretion. [Citations.]" (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655.) The trial court's judgment is presumed to be correct, and the appellant "has the burden to prove otherwise by presenting legal authority on each point made and factual analysis, supported by appropriate citations to the material facts in the record; otherwise, the argument may be deemed forfeited. [Citations.]" (Ibid.) In the context of an appeal following a sustained demurrer, this means that the appellant must not only explain the legal basis for the cause of action but that he or she must also cite the particular facts alleged in the complaint which, if found to be true, would support the cause of action. "It is the appellant's responsibility to support claims of error with citation and authority; this court is not obligated to perform that function on the appellant's behalf. [Citation.]" (Id. at p. 656.)
Where, as here, the trial court sustains the demurrer without leave to amend, "we must decide whether there is a reasonable possibility [appellant] could cure the defect with an amendment. [Citation.] If we find that an amendment could cure the defect, we conclude that the trial court abused its discretion and we reverse; if not, no abuse of discretion has occurred. [Citation.]" (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) The appellant also bears the burden of proving an amendment would cure the defect. (Ibid.)
Factual Allegations
The following are the factual allegations plaintiff relies on for purposes of the appeal:
The record citations are plaintiff's. There are no record citations in plaintiff's statement of facts other than as stated.
Although in plaintiff's opening brief she entitled this section, "What the Second Amended Complaint alleges," it is a mixture of factual assertions, legal citations and argument. We quote it in full to avoid making it appear disjointed.
"Appellant owned her home located at 1008 N. Turner Ave., #263, Ontario, CA 91764. On May 1, 2006, Appellant took out a refinance loan on her home. (Vol. 1, pg. 204.) The amount of the loan was $328,000.00. The lender was Washington Mutual Bank, FA, hereinafter referred to as WAMU. The Deed of Trust provided security for the loan.
"The Deed of Trust identified WAMU as the 'Lender.' The Deed of Trust granted the Trustee the power of sale, but only to protect the 'Lender.' This Security Instrument secures to the Lender: '(i) the repayment of the Loan . . . and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property . . . .'
"Appellant alleges that on March 22, 2011, Defendants recorded or caused to be recorded an Assignment of Deed of Trust, hereinafter referred to as ADOT, which allegedly assigned all beneficial interest in the Deed of Trust to LaSalle Bank NA as Trustee for the [WAMU Mortgage Pass-Through Certificates 2006-AR11], hereinafter referred to [as the] 2006-AR11 Trust. (Vol. 1, pg. 233.) This ADOT was allegedly executed by Colleen Irby, purportedly the 'Officer' of JPMORGAN CHASE NATIONAL ASSOCIATION, hereinafter referred to as Chase.
"Colleen Irby intentionally misrepresented to Plaintiff in writing that LaSalle, now [Bank of America], had acquired an interest in her Note and Deed of Trust and that Plaintiff's Note and Deed of Trust were endorsed, transferred, and negotiated to LaSalle when LaSalle had ceased to exist after October of 2008. Plaintiff adamantly disputes the contents and validity of this instrument. Plaintiff alleges that this instrument was not only signed by an individual who lacked personal knowledge of Plaintiff's loan file in violation of California law but it was prepared in violation of California Civil Code § 2356(a).
"Furthermore, the ADOT was in violation of California Civil Code § 2356(a) which states the following:
"(a) Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated by any of the following:
"(1) Its revocation by the principal.
"(2) The death of the principal.
"(3) The incapacity of the principal to contract.
"(b) Notwithstanding subdivision (a), any bona fide transaction entered into with an agent by any person acting without actual knowledge of the revocation, death, or incapacity shall be binding upon the principal, his or her heirs, devisees, legatees, and other successors in interest.
"In the case at bar, Respondents [Bank of America] and/or U.S. BANK could not have been the foreclosing beneficiary at the trustee's sale on October 21, 2014 because it was not assigned the beneficial interest under the Deed of Trust. Moreover, the Assignment of Deed of Trust was not valid in any event, because it was executed on behalf of JPMorgan Chase Bank, hereinafter referred to as Chase, acting as agent (attorney-in-fact) for LaSalle Bank. However, on March 21, 2011, there was no agency relationship between LaSalle Bank and Chase, because the principal, LaSalle Bank, no longer existed. Absent any evidence that Chase's agency relationship with LaSalle Bank was coupled with any interest in the subject of the agency, the agency relationship between LaSalle Bank and Chase also ceased to exist when LaSalle Bank ceased to exist on March 21, 2011, or, for that matter, at any time after October 2008 when WAMU was seized by the FDIC. (Civ. Code § 2356(a).) Accordingly, Chase had no authority or power to assign the Deed of Trust and the note to Respondent U.S. BANK in March of 2011, or, for that matter, at any time after October 2008.
"It follows, then, that if Respondents were neither the beneficiary under the Deed of Trust nor the owner of the underlying note at the time of the trustee's sale, it could not have acquired title to Appellant's property at that sale on October 21, 2014.
"U.S. BANK's claim of right is based on a Trustee's Deed Upon Sale, hereinafter referred to as TDUS, not an Assignment of Deed of Trust. An Assignment of Deed of Trust to U.S. BANK does not exist. Prior to the TDUS, U.S. BANK held no interest in Plaintiff's Property, in violation of California Civil Code § 2924(a)(1)(C). Pursuant to statute, U.S. BANK had the requisite legal authority to evidence that they were the party elected to conduct a sale and as the 'electing beneficiary' they must have had legal power deriving from the original Note and Deed of Trust, which they did not. U.S. BANK never had a recorded interest or claim in Appellant's Property."
The Demurrer Was Properly Sustained Without Leave to Amend
The sole issue plaintiff raises in her opening brief is that the trial court erred in sustaining the demurer because she had standing to challenge the foreclosure based on her contention that an assignment in the chain of title was void.
Plaintiff is correct that the borrower on a debt secured by a trust deed has standing to assert that a foreclosure was wrongful if the assignment of the trust deed or promissory note to the entity that foreclosed on the loan was void. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 923-924, 928 (Yvanova).) The borrower does not have standing to challenge the foreclosure if the assignment was merely voidable. (Id. at pp. 923, 942-943.) A void assignment is one that has no force or effect and which could not be ratified or validated by the parties to the agreement, even if they wished to do so; a voidable assignment is one that is valid unless an action is taken to void it or one that can be ratified. (Id. at pp. 936, 942-943.)
Plaintiff relies on Glaski v. Bank of America (2013) 218 Cal.App.4th 1079 (Glaski) to contend that because the purported transfer of the promissory note and deed of trust to the WaMu trust was made after the closing date of the trust, the transfer and all subsequent assignments were void. That case involved a purported assignment of the note and trust deed to a different WaMu pass-through trust than the one in this case. That trust was created under the laws of New York state. The plaintiff asserted that the purported assignment was void because it occurred after the closing date of the trust. The appellate court agreed that a late assignment is void under New York trust law and that the plaintiff therefore had standing to sue. (Id. at pp. 1094-1095, 1097.) Subsequent cases, including cases emanating from New York, have held that such a purported assignment is voidable under New York law, not void, because the law provides that the beneficiaries of the trust can ratify unauthorized actions by the trust. (Mendoza v. JPMorgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 812-818 and cases discussed therein.) We agree with the overwhelming weight of authority on this point. Accordingly, even if we assume that the WaMu trust involved in this case was also created under New York law and that the transfer of the trust deed and note to the trust was late according to the terms of the trust, those facts do not establish that plaintiff had standing to assert wrongful foreclosure. On the contrary, they mandate the conclusion that she does not have standing.
In Yvanova, the California Supreme Court acknowledged Glaski's holding but rendered no opinion as to its correctness on this point. (Yvanova, supra, 62 Cal.4th at pp. 941-942.)
To the extent that plaintiff asserts that there was a void assignment elsewhere in the chain leading to U.S. bank, the only factual basis she identifies as supporting this contention is an assignment of trust attached as exhibit D to the second amended complaint. Plaintiff asserts that the exhibit shows that "Plaintiff's Note and Deed of Trust were . . . transferred . . . to LaSalle [Bank NA] when LaSalle had ceased to exist after October of 2008." Exhibit D, however, is not an assignment to LaSalle Bank. Rather, it is an assignment of plaintiff's deed of trust from "JPMorgan Chase Bank, National Association, successor in interest to Washington Mutual" to "Bank of America, National Association, successor by merger to LaSalle Bank NA as trustee for WaMu Mortgage Pass-Through Certificates Series 2006-AR11 Trust." (Italics added.) This assignment has no relevance to plaintiff's argument that the deed of trust was invalidly transferred to the WaMu trust after the trust had closed to new transfers, nor does it establish that the deed of trust was assigned to LaSalle Bank after that bank had ceased to exist. It also does not demonstrate in any other manner that there is a defect in the chain of assignments that culminated in the assignment to U.S. Bank. While the "'allegations [of a complaint] must be accepted as true for purposes of demurrer,' the 'facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence. [Citations.]'" (Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 767-768.)
Finally, although she does not develop the argument, plaintiff appears to assert that exhibit D is a void assignment because it was "robo-signed" by a person who had no personal knowledge of the facts surrounding plaintiff's default. Even if we assume that the second amended complaint adequately alleges that the document was robo-signed, this too is insufficient to state a cause of action of wrongful foreclosure: "Although the [allegation that a robo-signed assignment is void] has been launched in many cases, plaintiff fails to cite any authority in which a court set aside a trustee's sale based on a robo-signed document. To the contrary, a federal court explained: '[T]o the extent that an assignment was in fact robo-signed, it would be voidable, not void, at the injured party's option.' [Citation.] The bank, not the borrower[,] would be the injured party. [Citation.]" (Mendoza v. JPMorgan Chase Bank, N.A., supra, 6 Cal.App.5th at p. 819.)
Accordingly, plaintiff has not met her burden of showing that she alleged facts sufficient to prove that any assignment in the chain was void under applicable law.
In a separately captioned argument, plaintiff also asserts that the trial court abused its discretion in sustaining the demurrer. However, the sole basis for this claim is that the trial court's ruling was "not consistent with [the] laws of this state." She does not attempt to show how she could amend the complaint to state a cause of action. Accordingly, she has also not met her burden on appeal in this respect. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.)
DISPOSITION
The judgment of dismissal is affirmed. Respondent is awarded costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
J. We concur: RAMIREZ
P. J. SLOUGH
J.