Opinion
D072045
05-16-2018
JACQUELINE A. QUILALANG, Plaintiff and Appellant, v. WELLS FARGO BANK, N.A. et al., Defendants and Respondents.
Law Offices of Charles T. Marshall and Charles T. Marshall for Plaintiff and Appellant. Severson & Werson, Jan T. Chilton and Kerry W. Franich 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 37-2016-00016146-CU-OR-NC) APPEAL from a judgment of the Superior Court of San Diego County, Robert P. Dahlquist, Judge. Affirmed. Law Offices of Charles T. Marshall and Charles T. Marshall for Plaintiff and Appellant. Severson & Werson, Jan T. Chilton and Kerry W. Franich for Defendants and Respondents.
I.
INTRODUCTION
Jacqueline A. Quilalang brought this action against Wells Fargo Bank, N.A. (Wells Fargo) and U.S. Bank, National Association as trustee for Certificate Holders of Bear Stearns Asset-Backed Securities I LLC, Asset Backed Certificates Series 2006-AC1 (U.S. Bank; collectively defendants). In the operative second amended complaint, Quilalang brought a total of 11 causes of action against defendants, including causes of action styled as invalidity of contracts, cancellation of instruments, quiet title, declaratory relief/injunctive relief, violation of Civil Code section 2924.17, breach of contract, and violation of Business and Professions Code section 17200. Quilalang requested that the trial court cancel a deed of trust and various notices and documents pursuant to which U.S. Bank had sought to foreclose on real property owned by Quilalang, among other forms of relief. The trial court sustained defendants' demurrer without leave to amend as to all of her causes of actions on various grounds and entered a judgment in favor of defendants.
Although Quilalang's brief and pleadings are not entirely clear as to the status of the parties, it appears from the record that U.S. Bank is the beneficiary of a deed of trust on Quilalang's property, and that Wells Fargo is the servicer of a loan on a note secured by the deed of trust.
Unless otherwise specified, all subsequent statutory refences are to the Civil Code.
On appeal, Quilalang contends that the trial court erred in sustaining defendants' demurrer without leave to amend. In order to demonstrate that the trial court erred in sustaining the demurrer without leave to amend, Quilalang was required to outline the elements of each cause of action that she seeks to pursue in this case and explain how she has alleged facts sufficient to state each such cause of action. Quilalang fails to do so. Instead, Quilalang offers a series of legal arguments unmoored to the asserted causes of action and their required elements. Nevertheless, we endeavor to address each of Quilalang's arguments, and conclude that she has failed to demonstrate any error. Accordingly, we affirm the judgment.
II.
FACTUAL BACKGROUND
A. The allegations in the operative second amended complaint
As discussed in part III.A, post, in reviewing the trial court's order sustaining defendants' demurrer, we accept as true all material facts alleged in the complaint.
In October 2005, Quilalang obtained a loan on certain real property that she owns. Quilalang signed a note, payable to Novelle Financial Services, Inc. (Novelle) and signed a deed of trust encumbering the property, naming Novelle as the beneficiary. An unlicensed lender unlawfully provided the funds for the transaction.
Novelle "purportedly executed" an assignment of that deed of trust to U.S. Bank in October 2005. The assignment was recorded in June 2010. The assignment was fabricated and back-dated.
U.S. Bank's agent recorded a notice of default under Quilalang's deed of trust in October 2009. After that notice of default was rescinded, a second notice of default was recorded in July 2012. Notices of trustee's sale were recorded in October 2012 and May 2016.
Among other forms of relief, Quilalang requested that defendants be "enjoined from taking any further acts in completing the nonjudicial foreclosure as they are not the proper party and cannot rely upon their false instruments for that authority." B. Procedural background
Quilalang filed this action against defendants in May 2016 and filed the operative second amended complaint later that same year. Defendants filed a demurrer as to all of the causes of action in the second amended complaint. After briefing and a telephonic hearing, the trial court sustained the demurrer as to all causes of action without leave to amend. The trial court subsequently entered a judgment of dismissal, from which Quilalang timely appeals.
III.
DISCUSSION
The trial court properly sustained defendants' demurrer without leave to amend
Quilalang claims that the trial court erred in sustaining defendants' demurrer without leave to amend. Before addressing each of Quilalang's separately captioned arguments, we outline the law governing demurrers and the applicable standard of review. A. The law governing demurrers and the applicable standard of review
In Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, the court outlined the following well-established law governing the review of an order sustaining a demurrer without leave to amend:
"A demurrer tests the legal sufficiency of the complaint. We review the complaint de novo to determine whether it alleges facts sufficient to state a cause of action. For purposes of review, we accept as true all material facts alleged in the complaint, but not contentions, deductions or conclusions of fact or law. We also consider matters that may be judicially noticed. [Citation.] When a demurrer is sustained 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.' [Citation.] Plaintiff has the burden to show a reasonable possibility the complaint can be amended to state a cause of action." (Id. at pp. 1608-1609, fn. omitted.)
" 'It is well settled . . . that a party challenging a judgment has the burden of showing reversible error . . . .' " (Bains v. Moores (2009) 172 Cal.App.4th 445, 478.) In considering a trial court's order sustaining a demurrer without leave to amend, " 'we review the trial court's result for error, and not its legal reasoning.' " (Ibid.) "On appeal from a judgment of dismissal entered after a demurrer has been sustained without leave to amend . . . the appellate court must affirm the judgment if it is correct on any theory." (Hendy v. Losse (1991) 54 Cal.3d 723, 742 (Hendy).) B. Quilalang's claims for invalidity of contracts, cancellation of instruments, and quiet title are untimely
Quilalang's primary contention of appeal is styled, "Statute of limitations were in dispute." (Some capitalization omitted.) However, Quilalang fails to clearly identify which causes of action she contends were timely brought, fails to identify the statutes of limitations that apply to such causes of action, and fails to explain why the trial court erred in determining that certain of her causes of action were time-barred. Given these material deficiencies in her brief, it is clear that Quilalang has not demonstrated reversible error. (See, e.g., Tellez v. Rich Voss Trucking, Inc. (2015) 240 Cal.App.4th 1052, 1066 ["An appellant has the burden to demonstrate reversible error with reasoned argument . . . ."].) Nevertheless, we attempt to address Quilalang's arguments with respect to the timeliness of her claims for invalidity of contracts, cancellation of instruments, and quiet title, post.
Although Quilalang's brief is far from clear on this point, it appears that she may be contending that the trial court erred in concluding that her breach of contract cause of action was time-barred. As we explain post, even assuming that the trial court erred in concluding that the breach of contract claim was time-barred, the trial court properly sustained the demurrer without leave to amend for an alternative reason. (See Hendy, supra, 54 Cal.3d at p. 742 [appellate court must affirm judgment of dismissal entered after a demurrer has been sustained without leave to amend if the judgment is correct on any theory].)
While the trial court concluded that Quilalang's breach of contract claim was based on an allegation that the 2005 deed of trust was invalid, Quilalang's breach of contract cause of action is based on the allegation that U.S. Bank's agent breached the 2005 deed of trust in 2012 by recording a July 2012 notice of default that allegedly failed to inform Quilalang that she could bring an action to dispute the default. However, even assuming that Quilalang's breach of contract claim is timely, it fails to properly state a cause of action.
A breach of contract claim is not actionable without an allegation of damage. (Monster, LLC v. Superior Court (2017) 12 Cal.App.5th 1214, 1230.) Quilalang fails to allege that she was damaged by this alleged breach. Further, the trial court took judicial notice of two actions that Quilalang brought against these defendants in 2013. Thus, given that Quilalang was not only aware that she could bring an action to dispute the default, but in fact, did so, Quilalang has not established that she could amend her complaint to allege damage by the alleged failure to provide her with notice that she could bring an action to dispute the default.
To the extent that Quilalang contends that she was damaged by the purported failure to provide notice because such notice is a condition precedent to U.S. Bank taking action to foreclose on the deed of trust, Quilalang fails to identify any language from the deed of trust demonstrating that the notice provision constitutes a condition precedent, and our review of the provision reveals none. (Barroso v. Ocwen Loan Servicing, LLC (2012) 208 Cal.App.4th 1001, 1010 [" ' "provisions of a contract will not be construed as conditions precedent in the absence of language plainly requiring such construction" ' "].) Accordingly, we conclude that Quilalang has not properly stated a cause of action for breach of contract.
1. Governing law
"A party may demur to a complaint, alleging that the pleading does not state facts sufficient to constitute a cause of action, when the claims are barred by the applicable statutes of limitations. [Citation.] 'When a ground for objection to a complaint, such as the statute of limitations, appears on its face or from matters of which the court may or must take judicial notice, a demurrer on that ground is proper.' " (Staniforth v. Judges' Retirement System (2016) 245 Cal.App.4th 1442, 1449.)
2. Application
As noted in part I, ante, Quilalang's second amended complaint contains causes of action for invalidity of contracts, cancellation of instruments, and quiet title, among other causes of actions. These claims were premised on Quilalang's allegation that the original 2005 deed of trust and promissory note were void as violative of California public policy allegedly prohibiting "table funding" of residential loans, and her allegation that a 2005 assignment of the deed of trust, recorded in 2010, was fraudulent.
"In a table-funded loan, the originator closes the loan in its own name, but is acting as an intermediary for the true lender, which assumes the financial risk of the transaction. The timing of the assignment is therefore sometimes pivotal in determining whether a residential mortgage loan is table-funded because the determinative question is who bears the risk of the transaction." (Easter v. Am. West Fin. (9th Cir. 2004) 381 F.3d 948, 955.)
This action was brought in May 2016. The statute of limitations for a claim that an instrument is void as violative of public policy is four years. (Moss v. Moss (1942) 20 Cal.2d 640, 644.) A claim for cancellation of instruments is subject to, at the most, a four-year statute of limitations. (Robertson v. Superior Court (2001) 90 Cal.App.4th 1319, 1326.) The statute of limitations for a quiet title cause of action premised on fraud is three years. (Salazar v. Thomas (2015) 236 Cal.App.4th 467, 476-477.) Quilalang fails to discuss these limitations periods and fails to make a coherent argument as to why they do not apply to her causes of action.
The arguments that Quilalang does raise are unpersuasive. Quilalang appears to suggest that, because she contended that the deed of trust and promissory note are void, her claims are not subject to any statute of limitations. That is not the law. (See Walters v. Boosinger (2016) 2 Cal.App.5th 421, 433 [stating that case law " 'make[s] clear,' that 'statutes of limitations apply whether the document under challenge is asserted to be "void" or "voidable" ' "].) Quilalang also argues that because the "harm of the illegal loan is ongoing," her causes of action are not subject to a statute of limitations. (Italics omitted.) Without an analysis of each of the causes of action to which this contention pertains and the elements of such causes of action, it is clear that Quilalang is not entitled to reversal on this basis. Finally, Quilalang's statute of limitations argument includes a lengthy discussion of the merits of various legal theories pertaining to the purported invalidity of the deed of trust and related documents. We need not address these contentions, in light of our conclusion that the claims are untimely.
In a section of her brief under the subheading, "[c]laims were not subject to [statute of limitations]," Quilalang argues, "If the allegations are true and the loan was illegal, the resulting contracts are void." (Some capitalization omitted.) Quilalang also states in the Statement of Facts portion of her brief, "As a void instrument, there is no statute of limitations for cancelling the [assignment of deed of trust]."
Accordingly, we conclude that Quilalang's claims for invalidity of contracts, cancellation of instruments, and quiet title are untimely. C. Quilalang has not established that she can state a claim for a violation of section 2924 .17
Quilalang has a separately captioned argument in which she contends that the assignment of the deed of trust and the associated allonge of the promissory note are invalid and subject to cancellation. However, in light of our conclusion that Quilalang's cancellation cause of action is barred by the statute of limitations, we need not consider her argument as to the merits of this cause of action.
Quilalang contends that she properly stated a cause of action for a violation of section 2924.17, a provision contained in the Homeowner's Bill of Rights (HBOR) (§ 2923.4 et seq.). She argues that, pursuant to section 2924.12, she may seek "injunctive relief and damages," for a violation of section 2924.17.
Section 2924.17 provides in relevant part:
"(a) A . . . notice of sale . . . recorded by or on behalf of a mortgage servicer in connection with a foreclosure subject to the requirements of Section 2924, or a declaration or affidavit filed in any court relative to a foreclosure proceeding shall be accurate and complete and supported by competent and reliable evidence.
"(b) Before recording or filing any of the documents described in subdivision (a), a mortgage servicer shall ensure that it has reviewed competent and reliable evidence to substantiate the borrower's
default and the right to foreclose, including the borrower's loan status and loan information."
Section 2924.12 provides in relevant part:
"(a)(1) If a trustee's deed upon sale has not been recorded, a borrower may bring an action for injunctive relief to enjoin a material violation of Section . . . 2924.17. [¶] . . . [¶]
"(b) After a trustee's deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section . . . 2924.17 by that mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent where the violation was not corrected and remedied prior to the recordation of the trustee's deed upon sale. . . ."
In her second amended complaint, Quilalang alleged that defendants violated section 2924.17 by recording three notices of trustee's sale between 2014 and 2016, because those notices were based on false and misleading statements contained in the "assignment instruments, notice of default, and substitutions of trustee." Quilalang alleged that she suffered economic damages due to the improperly recorded instruments and requested that the court enjoin defendants from taking any further actions against her based on the notices of trustee's sale.
In Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 162 (Lucioni), the court held that that "section 2924.17 does not impose a preforeclosure duty on foreclosing entities to demonstrate that they have a right to foreclose." Rather, according to the Lucioni court, the statute merely "creates a procedural right" (ibid.), directed "at ensuring the foreclosing entity's 'review[]' of its right to foreclose. (Id. at p. 163.) The Lucioni court explained:
"Section[] 2924.17 . . . do[es] not create a right to litigate, preforeclosure, whether the foreclosing party's conclusion that it had the right to foreclose was correct. If the Legislature wished to authorize as much, it could have authorized injunctive relief for a violation of 2924[ subdivision ](a)(6),[] but it did not." (Ibid.)
The Lucioni court noted that section 2924, subdivision (a)(6) "requires an entity initiating a foreclosure be legally entitled to do so." (Lucioni, supra, 3 Cal.App.5th at p. 155.) The Lucioni court however noted that the Legislature did not authorize injunctive relief for a violation of section 2924, subdivision (a)(6):
"The Legislature, however, did not provide for injunctive relief for a violation of section 2924[ subdivision ](a)(6), the provision that the complaint relies upon in seeking injunctive relief. . . . In our view, under the text of the HBOR, a foreclosure may be enjoined due to a material violation of the statutory provisions that the Legislature has chosen to list, but not due to a violation of unlisted provisions." (Lucioni, at pp. 158-159.)
Quilalang does not address Lucioni, or otherwise explain why she may pursue her claim for injunctive relief to preclude defendants from foreclosing on her real property.
With respect to her claim for money damages pursuant to section 2924.12 for a violation of section 2924.17, Quilalang does not allege that a trustee's deed upon sale has been recorded and she does not explain why she may pursue a claim for money damages in the absence of such an allegation. (See § 2924.12, subd. (b) [authorizing a claim for money damages for a material violation of section 2924.17 "[a]fter a trustee's deed upon sale has been recorded"], italics added.)
Accordingly, we conclude that Quilalang has not established that the trial court erred in sustaining defendants' demurrer to her cause of action for a violation of section 2924.17. D. The trial court properly granted defendants' demurrer with respect to Quilalang's cause of action for declaratory relief because that claim is derivative of other nonviable claims
Quilalang claims that the trial court erred in sustaining defendants' demurrer to her cause of action for declaratory relief.
Quilalang contends that she stated a viable claim for declaratory relief because "[s]he disputes the validity of the underlying debt, the validity of the contracts at issue and the series of title and foreclosure documents that are being used to threaten . . . deprivation of her real property." A trial court properly sustains a demurrer to a declaratory relief claim that is "wholly derivative" of other nonviable claims in the complaint. (Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794.) We concluded in part III.B, ante, that Quilalang's claims premised on the alleged invalidity of the underlying debt and the assignment of the deed of trust and associated documents are barred by the applicable statutes of limitations. Accordingly, the trial court did not err in sustaining defendants' demurrer to Quilalang's cause of action for declaratory relief, because it is derivative of other nonviable claims. E. Quilalang fails to establish that the trial court erred in sustaining defendants' demurrer to her unfair business practices cause of action
Quilalang contends that the trial court erred in sustaining defendants' demurrer to her cause of action for unfair business practices (Bus. & Prof. Code, § 17200).
The trial court sustained defendants' demurrer to this cause of action on the ground that Quilalang "failed to allege facts, instead of conclusions, establishing actual loss and standing to assert this claim." Quilalang fails to present any argument with respect to the trial court's conclusion that her unfair business practices cause of action failed to adequately allege actual loss and standing. Accordingly, we conclude that Quilalang has failed to establish that the trial court erred in sustaining defendants' demurrer to her unfair business practices cause of action. (See Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [fundamental rule of appellate review is that a trial court's order is presumed to be correct and " 'error must be affirmatively shown' "].) F. We need not consider whether the trial court properly determined that Quilalang's failure to allege tender of the debt was fatal to her claims for quiet title and cancellation of instruments
Quilalang claims that the trial court erred in sustaining defendants' demurrer to her causes of action for cancellation of instruments and quiet title on the ground that she failed to allege tender of the debt owed.
We concluded in part III.B, ante that Quilalang's claims for cancellation of instruments and quiet title are barred as a matter of law on statute of limitations grounds. Accordingly, we need not need not consider whether the trial court properly sustained the defendants' demurrer to her claims for cancellation of instruments and quiet title for failure to allege tender of the debt.
Quilalang presents no argument as to her causes of action for slander of title, violation of section 2923.55, wrongful foreclosure, or tortious interference. Accordingly, we conclude that she has forfeited any claim that the trial court erred in sustaining defendants' demurrer to those causes of action. (See Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699-700 [issue that is not supported by pertinent or cognizable legal argument may be deemed abandoned].)
IV.
DISPOSITION
Quilalang's claims in this appeal have no merit, and the record on appeal suggests that this appeal may have been taken in an attempt to delay foreclosure proceedings. Specifically, the record demonstrates that Quilalang sought to enjoin foreclosure proceedings by way of this lawsuit, notwithstanding the clear lack of merit of the claims she raises in this appeal. Moreover, the trial court in this case took judicial notice of court records indicating that Quilalang brought two prior lawsuits against these defendants in which she contended that any foreclosure against her property would be unlawful. Both lawsuits were dismissed without prejudice. While this court declines to order sanctions on its own motion in this appeal, Quilalang and Attorney Marshall are admonished that similar meritless filings in this court will likely subject either or both them to the imposition of monetary sanctions. (See Cal. Rules of Court, rule 8.276(a) ["On motion of a party or its own motion, a Court of Appeal may impose sanctions, including the award or denial of costs under rule 8.278, on a party or an attorney for: (1) Taking a frivolous appeal or appealing solely to cause delay . . . ."].) --------
AARON, J. WE CONCUR: BENKE, Acting P. J. O'ROURKE, J.