Filed 4/14/17 5120 Appleblossom Drive, LLC v. Cal. Reconveyance Co. CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA



5120 APPLEBLOSSOM DRIVE, LLC,

Plaintiff and Appellant,

v.

CALIFORNIA RECONVEYANCE COMPANY et al.,

Defendants and Respondents.
D070320



(Super. Ct. No.
37-2014-00011108-CU-BC-CTL)


APPEAL from a judgment of the Superior Court of San Diego County, Joel M. Pressman, Judge. Affirmed.
Beberman, Stoffel & Beberman and James Jay Stoffel for Plaintiff and Appellant.
Bryan Cave and Glenn J. Plattner, Richard P. Steelman, Jr. for Defendants and Respondents.
Plaintiff and appellant 5120 Appleblossom Drive, LLC, appeals from a judgment of dismissal entered after the trial court sustained without leave to amend the general demurrer of defendants and respondents California Reconveyance Company (CRC) and JP Morgan Chase Bank (Chase) to plaintiff's first amended complaint. In that pleading, plaintiff, an assignee and beneficiary of a note and deed of trust securing real property, sought to allege causes of action for intentional and negligent interference with economic relations as well as interference with written contract arising from CRC's act—taken when CRC was no longer the trustee of record—in recording a rescission of a notice of default it had previously filed on Chase's behalf initiating a nonjudicial foreclosure sale of the property. Plaintiff contends its operative complaint alleges facts sufficient to state causes of action, and thus the trial court erred by its ruling. We disagree, and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
In April 2005, Maria R. Garcia obtained a loan from Washington Mutual Bank (Bank) and signed a promissory note and deed of trust in favor of Bank as the beneficiary and CRC as the trustee. The deed of trust encumbered commercial property in Bakersfield California (the property).
In early 2011, the deed of trust was assigned to Chase. Thereafter, Garcia defaulted on the loan. In November 2011, CRC recorded a notice of default and election to sell the property under the deed of trust. About a month later, Chase executed an assignment of the loan to a limited liability company, which in turn executed an assignment of the loan to another entity: CF SBC 1 UST LLC. In January 2012, Chase substituted Chicago Title Company (Chicago Title) as the new trustee under the deed of trust, effective December 21, 2011. The deed of trust provides that a successor trustee "shall . . . succeed to all the title, powers and duties conferred upon the Trustee herein and by applicable law."
Garcia filed for Chapter 7 bankruptcy on or about March 22, 2012. The foreclosure proceeding was automatically stayed by the bankruptcy petition, and Garcia eventually abandoned the property. On March 27, 2012, CF SBC 1 UST LLC executed an assignment of the loan documents to plaintiff. Three days later on March 30, 2012, CRC recorded a notice of rescission of the November 2011 notice of default and demand for sale it had previously recorded on Chase's behalf. The December 2011 assignments to the limited liability company and to CF SBC 1 UST LLC, and the March 27, 2012 assignment to plaintiff, were not recorded until April 6, 2012.
On May 23, 2012, plaintiff obtained an order granting it relief from the automatic bankruptcy stay in Garcia's bankruptcy matter. In July 2012, Chicago Title on behalf of Statewide Reconveyance Group Inc. recorded a new notice of default and election to sell the property and months after that it recorded a notice of trustee's sale. Plaintiff purchased the property via a credit bid at the trustee's sale in December 2012.
Plaintiff thereafter sued CRC, and in September 2015 filed a first amended complaint adding Chase as a defendant and alleging first and second causes of action respectively for intentional and negligent interference with economic advantage, as well as a third cause of action entitled "negligent interference with economic advantage—written contract." (Capitalization omitted.) As to the first cause of action, plaintiff alleged that it and Garcia had an economic relationship that would have resulted in an economic benefit to plaintiff and that CRC knew or should have known of the relationship. It alleged that CRC intended to disrupt the relationship when it recorded the notice of rescission in March 2012 while it was no longer the trustee and "without written or oral authority from the beneficiary, without statutory authority, and without justification." Plaintiff alleged that when CRC recorded the notice of rescission it "interfered with the nonjudicial foreclosure process thereby interfering with plaintiff's economic relationship with the trustor (borrower) and interfering with plaintiff taking title to the Property, taking possession of the Property, and collecting the monthly rents and other economic benefits." Plaintiff alleged that by recording the notice of rescission, CRC "engaged in wrongful conduct, in that it was not the trustee under the deed of trust, and had no authority to record the Notice of Rescission." Plaintiff alleged that as a result, its relationship with Garcia "was disrupted because the nonjudicial foreclosure proceeding was cancelled, causing plaintiff to suffer a delay by having a 120[-]day foreclosure proceeding rather than a 30[-]day proceeding, causing a delay in plaintiff's taking title to the Property, thereby suffering monetary damages, including damage to the Property, loss rents [sic], additional foreclosure costs, and legal fees . . . ." As to the second cause of action, plaintiff repeated its allegations above, and alleged that when CRC recorded the notice of rescission, it failed to act with reasonable care.
With respect to the third cause of action, in addition to the previous allegations, plaintiff alleged that after CF SBC 1 UST LLC assigned to it the loan documents, "the promissory note and deed of trust was a contract between [it] and Garcia" and CRC interfered with the written promissory note and deed of trust when it recorded the notice of rescission "thereby cancelling the pending foreclosure proceeding."
Defendants generally demurred to plaintiff's first amended complaint on grounds it failed to state causes of action. They argued as to the first cause of action that plaintiff failed to allege independently wrongful conduct committed by either Chase or CRC, an actual disruption with an economic relationship, or damages proximately caused by defendants' conduct. They argued as to the second cause of action that plaintiff did not allege a duty of care. As to the third cause of action, treating it as a claim for intentional interference with contract, defendants argued plaintiff did not allege an actual disruption with an existing contractual relationship or damages proximately caused by CRC or Chase.
In opposition, plaintiff argued, among other things, that CRC's interference was independently wrongful "because it was unauthorized and CRC had no statutory, legal, or contractual reason to have recorded the Notice of Rescission" given CRC was no longer the trustee and Chase no longer the beneficiary. It maintained the disrupted economic and contractual relationships were its ability to proceed under the deed of trust and statutory right to enforce payment on the loan or foreclose against Garcia, and Garcia's agreement it could take title to the property via nonjudicial foreclosure if she failed to make her mortgage payments. Plaintiff argued it did not have a mere expectation for a future benefit; that its economic benefit had the foreclosure been timely processed would have been title to the property and rents, and its losses included recording and legal fees. According to plaintiff, it was not required to allege when, how or by what means it incurred damages. Finally, plaintiff argued it adequately alleged a disruption of its contractual relationship with Garcia under the deed of trust as well as damages; that "CRC's interference in plaintiff's non-judicial foreclosure proceeding caused a significant delay in the plaintiff's right under the deed of trust to foreclose and to take possession and title to the Property, which . . . includes the right to rent the Property and collect rents, the right to sell and recover the equity in the Property."
The trial court sustained defendants' demurrer without leave to amend. It ruled plaintiff had not alleged any wrongful act apart from the interference: "Recording the [notice of] rescission is not independently wrongful conduct." It further ruled defendants owed no duty to plaintiff with respect to the notice of default, and the notice as a matter of law did not confer a benefit on anyone but was only designed to give Garcia notice of her default so as to permit a cure. It ruled plaintiff did not allege actual disruption of any economic relationship between it and Garcia, as their relationship had been disrupted by Garcia's default on both the promissory note and deed of trust before CRC recorded the rescission notice. Thus, the court ruled, there was no economic relationship or benefit left with which defendants could interfere. Finally, the court ruled CRC's conduct had no effect on plaintiff's performance under the note and deed of trust. It reasoned performance under those contracts was not the same as plaintiff recouping its security interest through nonjudicial foreclosure, which is a creature of statute and "triggered separate and apart from the contractual relationship between Plaintiff and Ms. Garcia, and only results after performance between the parties has failed, upon the trustor's (Ms. Garcia's) default."
Plaintiff appeals from the ensuing judgment of dismissal with prejudice.
DISCUSSION
I. Standard of Review
"The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. ' " 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context." ' " (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010; see Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.) After reviewing the allegations of the complaint and its exhibits as well as the matters properly subject to judicial notice, we exercise our independent judgment as to whether the complaint states a cause of action as a matter of law. (See Centinela, at p. 1010; Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.)
"On appeal, we will affirm a 'trial court's decision to sustain the demurrer [if it] was correct on any theory. [Citation.]' [Citation.] Thus, 'we do not review the validity of the trial court's reasoning but only the propriety of the ruling itself.' " (Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 50; see also Staniforth v. Judges' Retirement System (2016) 245 Cal.App.4th 1442, 1449; Palm Springs Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 289 [Court of Appeal will affirm if the judgment is correct on any ground stated in the demurrer or on any other proper ground].)

II. Intentional Interference with Prospective Economic Advantage
A claim for intentional interference with prospective economic advantage has five elements: "(1) an economic relationship between plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) defendant's knowledge of the relationship; (3) an intentional act by the defendant, designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant's wrongful act, including an intentional act by the defendant that is designed to disrupt the relationship between the plaintiff and a third party." (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944; see also Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc., supra, 2 Cal.5th at p. 512; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1164-1165.)
A plaintiff alleging such a claim has the burden to plead and prove as an element not only that the defendant knowingly interfered with an economic relationship, but
" 'that the defendant's interference was wrongful "by some measure beyond the fact of the interference itself." ' " (Popescu v. Apple Inc., supra, 1 Cal.App.5th at p. 63, quoting Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 393; Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404-1405.) " '[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard,' " (Edwards v. Arthur Andersen LLP, supra, 44 Cal.4th at p. 944; Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1159 & fn. 11) not merely the product of an improper, but lawful, purpose or motive. (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1545.) Such conduct must also be independently actionable (Korea Supply, at p. 1159; Popescu, at p. 63), meaning the legal standards must "provide for, or give rise to, a sanction or means of enforcement for a violation of the particular rule or standard that allegedly makes the defendant's conduct wrongful." (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1223.) The interfering act can be independently tortuous as to a third party; it need not be independently wrongful as to the plaintiff. (Crown Imports, at p. 1405; Korea Supply, at p. 1163.)
A. Plaintiff Cannot Allege CRC's Filing of the Notice of Rescission Was Independently Wrongful
Plaintiff contends it sufficiently alleged independently wrongful conduct by CRC under Civil Code section 2924, subdivision (a)(6), which provides that "[n]o entity shall record or cause a notice of default to be recorded or otherwise initiate the foreclosure process unless it is the holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest." According to plaintiff, applying that statute means that "when acting as the trustee CRC was required to have authority from the beneficial holder to initiate the foreclosure process, and therefore, a trustee would likewise need the authority of the beneficial holder of the deed of trust to cancel the foreclosure process." Plaintiff argues it is irrelevant that the statute does not expressly prohibit a former trustee from rescinding a notice of default since CRC's action in doing so was "without any statutory, legal or contractual right to do so and, most importantly, without the specific authorization of the plaintiff . . . ."
The arguments do not establish that CRC's action was independently wrongful within the meaning of the interference tort. This court and others have explained that "Civil Code sections 2924 through 2924k, 'provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.' [Citation.] 'These provisions cover every aspect of exercise of the power of sale contained in a deed of trust.' " (Arabia v. BAC Home Loans Servicing, L.P. (2012) 208 Cal.App.4th 462, 470; see also Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, 813-814.) The scheme is intended to be "exhaustive" (Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807, 821) and courts will not incorporate other provisions or additional requirements into the statute. (Ibid.; see also Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1004; Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th 433, 441; Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1154; accord, Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 814-815.)
Under these principles, it is indeed relevant that Civil Code section 2924, subdivision (a)(6) deals solely with commencing the foreclosure process; it says nothing about ending the process generally, nor does it specifically address rescission or a current or former trustee's ability to rescind a previously filed notice of default. We decline to adopt plaintiff's theory and extend the statute's requirements to a trustee's or former trustee's act of cancelling or rescinding the foreclosure process, which would impose obligations not contained in the statute and " 'result in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature.' " (Saterbak v. JPMorgan Chase Bank, N.A., supra, 245 Cal.App.4th at p. 814.) Thus, plaintiff is incorrect to suggest that CRC's conduct was somehow unlawful or independently wrongful because it violated Civil Code section 2924, subdivision (a)(6). (See, e.g., LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 342-343 [no independently wrongful conduct for claim of intentional interference with prospective economic advantage based on statutory violations when defendant did not violate statutes].) As we explain below, that CRC lacked authority to file the notice of rescission renders its effect questionable by reason of the substitution of a new trustee (see, e.g., Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 871 [substituted-out trustee is without power to conduct trustee's sale and the trustee's sale is void as a consequence]) but that fact does not make CRC's act independently wrongful, and an ineffective or void cancellation of the notice of default would inure in any event to plaintiff's benefit, as it sought to proceed with the foreclosure sale. Plaintiff provides no other argument suggesting a constitutional, regulatory, common law or other basis to conclude CRC's conduct made it liable for damages, or was otherwise wrongful under a "determinable legal standard." (Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1159.)
Even if that were not the case, there is still another reason why plaintiff's complaint fails to state a cause of action. The Homeowner's Bill of Rights, of which Civil Code section 2924, subdivision (a)(6) is a part, has an effective date of January 1, 2013, and does not apply retroactively. (See Saterbak v. JPMorgan Chase Bank, N.A., supra, 245 Cal.App.4th at p. 818; Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 158-159; see Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 841 [absent an express retroactivity provision, a statute will not be applied retroactively unless " 'very clear from extrinsic sources that the Legislature . . . must have intended a retroactive application' "].) The notice of rescission on which plaintiff bases its claim was recorded by CRC on March 30, 2012, and thus Civil Code section 2924, subdivision (a)(6) does not apply to CRC's action. Plaintiff's claim that CRC's conduct in recording the notice of rescission was independently wrongful as a violation of that statute therefore fails. Though the trial court did not rule on this basis, as stated, we must affirm its ruling if it is correct on any proper ground or theory, regardless of the court's stated reasons. (Popescu v. Apple Inc., supra, 1 Cal.App.5th at p. 50; Palm Springs Villas II Homeowners Association Inc. v. Parth, supra, 248 Cal.App.4th at p. 289.) The court did not err in sustaining defendants' demurrer to that cause of action.
B. Plaintiff Cannot Allege CRC's Filing of the Notice of Rescission Interfered with Plaintiff's Economic Relationship with Garcia, As Garcia Had Already Disrupted the Relationship by Defaulting and Vacating the Property
Nor is plaintiff able to allege that CRC's conduct actually disrupted its trustor/beneficiary relationship with Garcia created by the note and deed of trust. By the time CRC filed the notice of rescission, Garcia had already defaulted on the note and filed for bankruptcy. She eventually abandoned the property. Thereafter, any economic benefit to plaintiff under the note and deed of trust did not stem from its economic relationship vis à vis Garcia, but from its independent right under California's statutory nonjudicial foreclosure scheme to demand the trustee conduct a nonjudicial foreclosure sale. Because CRC's rescission of the notice of default did not disrupt plaintiff's economic relationship with Garcia, the trial court properly sustained the demurrer.
III. Negligent Interference with Prospective Economic Advantage
This court has held the requirement of independent wrongfulness—that the defendant's conduct be wrongful by some legal measure other than the fact of interference itself—applies to claims of negligent interference with prospective economic advantage as well as claims of intentional interference with prospective economic advantage. (National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 439-440.) As we have already discussed, because plaintiff failed to allege any conduct by CRC interfering with its economic relationship with Garcia, let alone conduct that was wrongful by some legal measure other than the alleged interference, the first amended complaint fails to state a cause of action for negligent interference with plaintiff's economic advantage.
Moreover, an action for negligent interference with prospective economic advantage will not lie unless the defendant owes the plaintiff a duty of care. (LiMandri v. Judkins, supra, 52 Cal.App.4th at p. 348, quoting Stolz v. Wong Communications Limited Partnership (1994) 25 Cal.App.4th 1811, 1825.) In the first amended complaint, plaintiff did not expressly or by implication allege that CRC or Chase owed it a duty of care; it merely alleges that "[w]hen CRC recorded the Notice of Rescission, it failed to act with reasonable care." On appeal, plaintiff argues that CRC's duty was to do nothing after it was substituted out as trustee, and it had a duty "not to do anything that would cause plaintiff to suffer harm, and that would prevent plaintiff from timely proceeding with the foreclosure proceeding." Applying the principles of LiMandri, plaintiff argues CRC had a duty given the foreseeability of harm plaintiff would suffer if CRC recorded the notice of rescission, that CRC knew it action "would reasonably and likely affect plaintiff adversely." It also argues CRC had general duties of care under Civil Code sections 1714 and 1708 not to do something a reasonably careful person would not do in the same situation, or injure another person or property of another. According to plaintiff, "CRC knew that the purpose of the foreclosure process was to provide the beneficiary with a quick and inexpensive remedy, and knew that when it wrongful [sic] and without authorization from the beneficiary . . . canceled the foreclosure by recording the notice of rescission, the procedure would not then be quick, inexpensive or efficient, as plaintiff would have to begin the process over."
We reject the contention that CRC owed plaintiff a duty of care under these circumstances. Plaintiff's argument is akin to that advanced in Heritage Oaks Partners v. First American Title Ins. Co. (2007) 155 Cal.App.4th 339, in which the plaintiff in connection with a nonjudicial foreclosure sale claimed that the defendant title company negligently conducted the sale when it was no longer the trustee of record. (Id. at p. 341.) The plaintiff, a subsequent purchaser, argued the title company owed it a duty of care to confirm its status as the trustee under the trust deed, and could foresee that subsequent purchasers would be harmed by the fact the sale by an entity not a trustee of record did not convey title. (Id. at pp. 344-345.) The Court of Appeal refused to recognize either a specific duty under the nonjudicial foreclosure statutory scheme, or a general common law duty of care. (Id. at pp. 344-348.) It reiterated the settled principle that " '[t]he rights and powers of trustees in nonjudicial foreclosure proceedings have long been regarded as strictly limited and defined by the contract of the parties and the statutes.' " (Heritage Oaks, at p. 345, quoting I.E. Associates v. Safeco Title Ins. Co. (1985) 39 Cal.3d 281, 287; see also Banc of America Leasing & Capital, LLC v. 3 Arch Trustee Services, Inc. (2009) 180 Cal.App.4th 1090, 1097.) " '[The trustee's] only duties are: (1) upon default to undertake the steps necessary to foreclose the deed of trust; or (2) upon satisfaction of the secured debt to reconvey the deed of trust.' [Citation.] Consistent with this view, California courts have refused to impose duties on the trustee other than those imposed by statute or specified in the deed of trust." (Heritage Oaks, at p. 345.) It was persuaded by the California Supreme Court's stated policy considerations against a judicial expansion of the trustee's duties, holding those reasons militated against the recognition of a duty running from the entity conducting the foreclosure sale to subsequent purchasers. (Id. at p. 346.)
Pertinent to plaintiff's contention here, the Heritage Oaks court further declined to recognize a general duty on the part of the title company advocated by the plaintiff in that case, in part because the plaintiff's damages were not foreseeable, but even if they were, they were "equally so" to the plaintiff: "The substitution of trustee and partial deed of reconveyance was a recorded document that could have been as readily discovered by [plaintiff's] title research as by [the title company's]. Thus, even if [the title company] could foresee that litigation would result from an erroneously conducted foreclosure sale, it could not foresee that a subsequent purchaser would buy the property after conducting a title search and learning that there was such an event in the chain of title." (Heritage Oaks Partners v. First American Title Ins. Co., supra, 155 Cal.App.4th at p. 347.) The Court of Appeal held there was only a small degree of certainty that the title company's conduct would cause the plaintiff harm, and a weak connection between its conduct and the alleged injury. (Id. at p. 348.)
Here, as in Heritage Oaks, supra, 155 Cal.App.4th 339, the asserted harm was as equally foreseeable to plaintiff as it was to CRC. The first amended complaint reflects that the substitution of trustee was recorded in January 2011, and discoverable to plaintiff or the successor trustee had it inspected the property records. "Once recorded, the substitution . . . constitute[d] conclusive evidence of the authority of the substituted trustee or his or her agents to act pursuant to this section." (Civ. Code, § 2934a, subd. (d).) When CRC recorded the notice of rescission on March 30, 2012, the new trustee had already succeeded to all of the trustee's "title, powers and duties . . . ." (Civ. Code, § 2934a, subd. (a)(4) [from the time a substitution is recorded "the new trustee shall succeed to all the powers, duties, authority, and title granted and delegated to the trustee named in the deed of trust"]; see Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 871; Jones v. First American Title Ins. Co. (2003) 107 Cal.App.4th 381, 383.) "Other than by recording a further substitution there are no other statutory means by which the effect of a substitution, once recorded, may be avoided." (Dimock, at
p. 871.) The recorded substitution was binding on the parties, and gave the new trustee the sole power to act as the trustee, rendering any act by CRC in that capacity a "complete nullity with no force or effect." (See Dimock, at pp. 874-876.)
Thus, plaintiff at least had constructive knowledge that CRC had no ability or power to take action as the trustee, and CRC would not foresee that plaintiff would rely on an unauthorized notice of rescission or cancellation of the notice of default. As the court did in Heritage Oaks, we likewise conclude these circumstances establish only a small degree of certainty that CRC's conduct would cause plaintiff's alleged harm, and a weak connection between its conduct and the alleged injury. The trial court therefore did not err in sustaining defendants' demurrer to the negligent interference cause of action.
IV. Intentional Interference with Contract
"Five elements must be alleged to support a claim for intentional interference with contractual relations (contract interference). They are '(1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.' [Citation.] It is not a requirement that 'the defendant's conduct be wrongful apart from the interference with the contract itself. [Citation.]' [Citation.] Furthermore, a plaintiff need not establish that the primary purpose of the defendant's actions was to disrupt the contract. The tort is shown even where ' "the actor does not act for the purpose of interfering with the contract or desire it but knows that the interference is certain or substantially certain to occur as a result of his [or her] action." ' " (Popescu v. Apple Inc., supra, 1 Cal.App.5th at p. 51.) " 'The rule applies, in other words, to an interference that is incidental to the actor's independent purpose and desire but known to him to be a necessary consequence of his action.' " (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1239, quoting Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 56.) Nevertheless, "[t]he act of inducing the breach must be an intentional one. If the actor had no knowledge of the existence of the contract or his actions were not intended to induce a breach, he cannot be held liable though an actual breach results from his lawful and proper acts." (Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 37.)
Plaintiff contends it sufficiently alleged CRC interfered with its contractual rights under the deed of trust by recording the notice of rescission and cancelling the nonjudicial foreclosure. Specifically, it argues "[t]he nonjudicial foreclosure is the means of enforcement authorized by the deed of trust and that is the contract that was interfered with when CRC recorded the Notice of Rescission." According to plaintiff, CRC's conduct "immediately denied plaintiff the immediate rights and remedies set forth in the Deed of Trust," causing delay in its right to foreclose and take possession and title to the property as well as the right to rent, collect rents, or sell the property and recover its equity.
For purposes of this claim, we accept that the deed of trust is a contract, the existence of which was known to defendants. (See Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 230 [a deed of trust is a contract involving mutual obligations on a trustor, trustee and beneficiary; the promissory note is a separate contract and the two agreements form parts of one transaction].) We also recognize that the remedy of nonjudicial foreclosure stems from that contract; indeed, the power of sale exercised by a trustee in nonjudicial foreclosures "is a right authorized solely by the contract between the lender and trustor as embodied in the deed of trust." (Garfinkle v. Superior Court (1978) 21 Cal.3d 268, 277.) A properly conducted nonjudicial foreclosure sale is intended in part as a final adjudication of the rights of the creditor and debtor. (Biancalana v. T.D. Service Co., supra, 56 Cal.4th at p. 814.) However, as we explain, plaintiff's first amended complaint fails to state a cause of action because it does not sufficiently allege either disruption of plaintiff's right to nonjudicial foreclosure under the deed of trust caused by CRC's filing of a void notice of rescission or delay damages resulting from that filing.
As of March 30, 2012, the nonjudicial foreclosure proceeding was already stayed by operation of law by Garcia's bankruptcy filing. (Civ. Code, § 2924g, subd. (c)(2); 11 U.S.C. § 362(a); see California Livestock Production Credit Assn. v. Sutfin (1985) 165 Cal.App.3d 136, 141; 5 Miller & Starr, Cal. Real Estate (4th ed. 2016) § 13:245, p. 1009 ["There is a postponement by operation of law when the sale is postponed because of the automatic stay of further proceedings when the trustor files a petition in bankruptcy [(Civ. Code, § 2924g, subd. (c)(2))]"].) Any delay in the nonjudicial foreclosure sale from that date to May 23, 2012, when plaintiff obtained relief from the automatic stay, was as a matter of law not the result of CRC's conduct. That is, the first amended complaint and its exhibits establish that factors totally independent of any conduct by CRC—Garcia's bankruptcy filing and the attendant stay—actually disrupted plaintiff's contractual rights to the remedy of nonjudicial foreclosure under the deed of trust. And, because CRC's purported rescission was a legal nullity, after plaintiff obtained relief from the stay on May 23, 2012, nothing prevented it from immediately proceeding with the nonjudicial foreclosure. The bankruptcy court's order granting relief from stay, attached as an exhibit to defendants' demurrer and the contents of which are judicially noticeable as a court record (Evid. Code, § 452, subd. (d)), authorized plaintiff to "enforce its remedies to foreclose upon and obtain possession of the Property" and waived the 14-day period in which the order would normally not take effect.
Once plaintiff was relieved from the bankruptcy stay, it had the immediate ability and right to proceed with foreclosure without any further notice. (See Tully v. World Savings & Loan Assn., supra, 56 Cal.App.4th at p. 664 ["California law . . . clearly does not require further notice of any kind when a continued sale follows a termination of the automatic [bankruptcy] stay"], rejecting contrary decision in In re Tome, supra, 113 B.R. 626.) "After obtaining relief from the mandatory stay, [plaintiff] was not required to serve, post, publish, or give any further notices of sale to [Garcia] before proceeding with the sale of the property." (Tully, at p. 664.) Plaintiff was not required to start foreclosure proceedings from scratch, and specifically was not required to record and serve a new notice of default. The import of this is that plaintiff cannot allege that CRC's conduct—as opposed to unrelated factors and plaintiff's own inaction—caused the disruption or delay in the foreclosure proceeding, and its attendant costs or losses.
V. Plaintiff Has Not Shown the Failures of Its First Amended Complaint Can Be Cured
When a demurrer is sustained without leave to amend, we decide whether there is a reasonable possibility that the pleading could have been amended to cured the defects. (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc., supra, 1 Cal.5th at p. 1010.) " ' "The burden of proving such reasonable possibility is squarely on the plaintiff." ' " (Ibid.) The abuse of discretion standard governs our review of that question. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) A request for leave to amend and the showing necessary to cure defects in a pleading may be made for the first time on appeal. (Code Civ. Proc., § 472c, subd. (a); Bergeron v. Boyd (2014) 223 Cal.App.4th 877, 890-891.) But to satisfy the burden on appeal of showing a reasonable possibility that an amendment will cure the defects, a plaintiff must not only set forth the legal basis for amendment, but " 'must show in what manner [it] can amend [its] complaint and how that amendment will change the legal effect of [its] pleading.' " (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43, quoting Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Plaintiff must set forth "factual and specific, not vague or conclusionary" allegations that sufficiently state all required elements of the challenged causes of action. (Rakestraw, at pp. 43-44.) "Where the appellant offers no allegations to support the possibility of amendment and no legal authority showing the viability of new causes of action, there is no basis for finding the trial court abused its discretion when it sustained the demurrer without leave to amend." (Id. at p. 44.)
Plaintiff has argued the trial court erred by sustaining defendants' demurrer, but has not addressed how the first amended complaint could be amended. There is no basis to conclude the trial court abused its discretion in sustaining defendants' demurrer without leave to amend. (Rakestraw, supra, 81 Cal.App.4th at p. 44.)





DISPOSITION
The judgment is affirmed.


O'ROURKE, J.

WE CONCUR:


McCONNELL, P. J.


BENKE, J.