Rodriguez v. Bank of >America>

 

 

 

 

 

 

 

 

 

 

 

Filed 11/19/13  Rodriguez v. Bank of America CA2/6

 

 

 

 

 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.

 

 

 

 

IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA

 

SECOND APPELLATE
DISTRICT

 

DIVISION SIX

 

 
>

ANABEL RODRIGUEZ et al.,       Plaintiffs and Appellants,   v.   BANK OF AMERICA, N.A., et al.,       Defendants and Respondents.

2d Civil No. B247529 (Super. Ct. No. 56-2012-414550-CU-NP-VTA) (Ventura County)

 

                        Plaintiffs Anabel and
Jose Rodriguez appeal the judgment of
dismissal in favor of defendants Bank of America, N.A. (BofA),href="#_ftn1" name="_ftnref1" title="">>[1]
Federal National Mortgage Association (Fannie Mae), and Mortgage Electronic
Registration Systems, Inc. (MERS) following the trial court's order sustaining
without leave to amend their demurrer to the first amended complaint.   In
that complaint, plaintiffs allege that defendants wrongfully foreclosed the
deed of trust on their home.  Among other
things, they allege that representatives of BAC Home Loans Servicing, L.P.
(BAC) told them they had qualified for a loan modification and assured them the
trustee's sale had been cancelled.  In
the meantime, the trustee, ReconTrust Company, N.A. (ReconTrust), sold the
property to Fannie Mae. 

                        Generally, a borrower
must tender the full amount of the debt to maintain an action to cancel a
completed trustee's sale.  (>Karlsen v. American Sav. & Loan Assn.
(1971) 15 Cal.App.3d 112, 117 (Karlsen).)  The trial court invoked this rule to dismiss the
causes of action seeking to avoid the sale. 
Plaintiffs allege the tender rule does not apply here because the substitution
of trustee and assignments of the deed of trust from the original lender to BAC
were void.  The test, however, is not
whether these documents were void, but whether the sale itself was void.  Plaintiffs have not alleged facts
demonstrating that the substitution and assignments affected the trustee's statutory
authority to foreclose and sell the property. 
As both the original and substitute trustee, ReconTrust had that
authority regardless of whether the substitution was valid. 

                        The complaint also
alleges claims for damages for unfair
competition, promissory estoppel, negligent misrepresentation and fraud
arising out of the purported oral assurances to modify the loan and cancel the
foreclosure.  Plaintiffs did not raise
any issues regarding those claims in their opening brief, and thus waived them
on appeal.  We affirm. 

FACTS AND PROCEDURAL BACKGROUND

                        Countrywide Bank, FSB
(Countrywide) loaned plaintiffs $288,000 to purchase a single-family residence
located at 507 Doris Avenue
in Oxnard (Property).  To secure repayment of the loan, plaintiffs
signed a promissory note and deed of trust. 
The deed of trust identified Countrywide as the lender, ReconTrust as
the trustee, and MERS as the beneficiary. 
The deed of trust stated, "The beneficiary of this Security
Instrument is MERS (solely as nominee for Lender and Lender's successors and
assigns)

.
. . .  This Security Instrument secures
to 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
[ReconTrust], in trust, with power of sale, the [Property] . . . ." 

>                        In
August 2010, ReconTrust recorded a substitution of trustee and assignment of
deed of trust, naming ReconTrust as substitute trustee and assigning the
beneficial interest in the deed of trust from MERS to BAC, successor by merger
to Countrywide. 

                        Plaintiffs allege that
T. Sevillano, who signed the substitution and assignment on behalf of MERS,
lacked authority to do so.  They also allege
that the notary's signature was forged, and that the assignment is invalid
under Civil Codehref="#_ftn2" name="_ftnref2"
title="">>[2]
section 1095 because MERS did not identify the principal on whose behalf it executed
the assignment. 

                        ReconTrust recorded a
notice of default and notice of trustee's sale, but rescinded both notices in
February 2011.  A few months later, a new
assignment of the beneficial interest in the deed of trust to BAC was
recorded.  Once again, plaintiffs allege
that the person who signed the assignment for MERS, Jane Maritorana, lacked
authority to act for MERS, that the notary's signature was forged and that the
assignment is invalid under section 1095. 


                        Plaintiffs applied for a
loan modification in March 2011.  They
allege that BAC representatives told them they were eligible to do so.  Based on these purported assurances, plaintiffs
provided BAC with the requested documentation and regularly contacted BAC to
ensure that nothing more was required. 

                        ReconTrust recorded a
second notice of default in September 2011. 
At that time, the arrearages were $39,968.34.  After ReconTrust recorded a notice of trustee's
sale on January 3, 2012, plaintiffs
contacted BAC to request a postponement of the sale.  They allege that "[i]n multiple
conversations over the following weeks, Defendants represented to [them] that
they had qualified for the 'Making Home Affordable' loan modification program
and that the January 23rd 2012 trustee sale would not be going forward."  They allege that on January 9, 2012, they
advised a BAC representative that they had received a letter of reinstatement
setting forth the outstanding balance due on their loan.  The representative purportedly told
plaintiffs to disregard this letter because of the pending loan modification.  They claim that if they had known that paying
the

 

balance
due would have prevented the foreclosure, they would have made the payment at
that time or taken "other possible steps to avoid foreclosure." 

                        On January 26, 2012,
plaintiffs contacted BAC to follow up on their loan modification.  They were told that the trustee's sale had
gone forward on January 23, and that Fannie Mae was the successful bidder.  A few days before the sale, BofA had assigned
its beneficial interest in the deed of trust to Fannie Mae.  ReconTrust recorded the trustee's deed upon
sale. 

                        Plaintiffs brought this action
against defendants and others for wrongful foreclosure.  The trial court sustained defendants' demurrer
to the original complaint with leave to amend. 


                        Plaintiffs filed a first
amended complaint alleging claims for (1) wrongful foreclosure, (2) quiet
title, (3) unfair competition (Bus. & Prof. Code, § 17200), (4) slander of
title, (5) notary misconduct, (6) promissory estoppel, (7) declaratory relief,
(8) negligent misrepresentation, (9) fraud and deceit, and (10) cancellation of
recorded instruments.  Defendants
demurred to all causes of action except notary misconduct, which involved other
parties.  The trial court sustained the
demurrer without leave to amend. 

                        Regarding the causes of
action seeking to set aside the sale, the trial court determined that "[p]laintiffs
are required to tender the complete amount due under the loan in addition to
all fees and costs in light of the fact that the foreclosure sale has been
conducted and Plaintiffs' admission that they were in default.  Plaintiffs have not done so and do not allege
in good faith that they can."  The
court further concluded that plaintiffs' inability to allege tender suggests
they have not been harmed by defendants, and thus have not suffered any damages
for purposes of stating a claim for unfair competition, promissory estoppel,
negligent misrepresentation and fraud and deceit.  Plaintiffs appeal the judgment of
dismissal. 

DISCUSSION

>Standard of Review

                        "We
independently review the ruling on a demurrer and determine de novo whether the
pleading alleges facts sufficient to state a cause of action.  [Citation.]  We assume the truth of the properly pleaded
factual allegations, facts that reasonably can be inferred from those expressly
pleaded, and matters of which judicial notice has been taken.  [Citation.]  We construe the pleading in a reasonable
manner and read the allegations in context.  [Citation.]  'We affirm the judgment if it is correct on
any ground stated in the demurrer, regardless of the trial court's stated
reasons.  [Citation.]'  [Citation.]"   (>Entezampour v. North Orange County Community
College Dist. (2010) 190 Cal.App.4th 832, 837.)  Also, "if there is a reasonable
possibility the defect in the complaint could be cured by amendment, it is an
abuse of discretion to sustain a demurrer without leave to amend."  (City of
Atascadero v. Merrill Lynch, Pierce, Fenner & Smith (1998) 68
Cal.App.4th 445, 459.)  

Claims
to Set Aside the Trustee's Sale

                        Five of plaintiffs'
causes of action seek to set aside the trustee's sale:  wrongful foreclosure, quiet title, slander of
title, declaratory relief and cancellation of recorded instruments.  Plaintiffs do not dispute that "[a] valid
and viable tender of payment of the indebtedness owing is essential to an
action to cancel a voidable sale under a deed of trust."  (Karlsen,
supra, 15 Cal.App.3d at p. 117; United
States Cold Storage v. Great Western Savings & Loan Assn. (1985) 165
Cal.App.3d 1214, 1222-1223.)  ">This requirement is based on the theory that
one who is relying upon equity in overcoming a voidable sale must show that he
is able to perform his obligations under the contract so that equity will not
have been employed for an idle purpose."  (Dimock
v. Emerald Properties (2000) 81 Cal.App.4th 868, 878 (Dimock).)  Thus, absent an
alleged and actual tender, a complaint seeking to set aside a voidable trustee's
sale fails to state a viable cause of action. 
(Karlsen, at pp. 117-118.)  This tender rule is strictly enforced.  (Nguyen
v. Calhoun (2003) 105 Cal.App.4th 428, 439.) 

                        Tender is not required,
however, if the trustee's sale is void rather than "merely voidable."  (Dimock,
supra, 81 Cal.App.4th at p. 876.)  A
sale that is void "has no force and effect," whereas one that is
voidable can be "avoided" or set aside as a matter of equity.  (Little
v. Cfs Service Corp. (1987) 188 Cal.App.3d 1354, 1358.)  Dimock
held that a sale conducted by a trustee was void rather than voidable because
the apparent validity of a subsequent substitution of trustee created a "conclusive
presumption" that the conveying party was not the true trustee.  (Id.
at p. 877.)  Concluding the former
trustee had no power to convey the property, the court declared the trustee's
deed upon sale "was a complete nullity with no force or effect as opposed
to one which may be set aside but only through the intervention of equity."  (Id.
at p. 876; see Lona v. Citibank, N.A.
(2011) 202 Cal.App.4th 89, 113.) 

                        Plaintiffs assert that
the substitution of trustee and two assignments of the deed of trust from MERS to
BAC were void ab initio as a result
of the purported forgeries and because they violated section 1095.href="#_ftn3" name="_ftnref3" title="">>[3]  Citing Dimock,
they contend they were not required to tender the amount of the debt because
the allegedly void substitution and assignments also rendered the trustee's
sale void.  We disagree.  The validity of these documents is irrelevant
to the validity of the sale because, unlike in Dimock, the trustee here, ReconTrust, had authority to foreclose as
either the original or substitute trustee. 


(§
2924, subd. (a)(1).)

                        In Shuster v. BAC Home Loans Servicing, LP (2012) 211 Cal.App.4th 505,
511-512, we reiterated that "California's statutory nonjudicial
foreclosure scheme

(§§
2924-2924k) does not require that the foreclosing party have a beneficial
interest in or physical possession of the note."  (Accord Debrunner
v. Deutsche Bank Nat. Trust Co. (2012) 204 Cal.App.4th 433, 440-441; >Gomes v. Countrywide Home Loans, Inc. (2011)
192 Cal.App.4th 1149, 1154.)  "Section
2924, subdivision (a)(1) specifically permits the 'trustee, mortgagee, or
beneficiary, or any of their authorized agents' to institute foreclosure by
recording a notice of default."  (>Shuster, at p. 512.)  It does not contemplate "a judicial
action to determine whether the person initiating the foreclosure process is
indeed authorized."   (Gomes, at
p. 1155 [borrower may not bring action challenging MERS' authority to
foreclose].)

                        Plaintiffs rely heavily
upon an unpublished federal case, Tang v.
Bank of America, N.A. (C.D. Cal. 2012) 2012 WL 960373, for the proposition
that the tender rule does not bar claims based upon fraudulently executed assignments
of deeds of trust.  Tang may not be read so broadly. 
In that case, the substitute trustee initiated foreclosure.  Before the sale occurred, the plaintiffs
filed a complaint alleging inter alia that the document appointing the
substitute trustee was void because the person who executed it on behalf of the
bank was a "robo-signer" with no agency relationship with the
bank.  (Id. at p. *10.)  The district
court determined the plaintiffs had made a facially plausible claim that the substitution
was void, raising a question as to whether the substitute trustee was in fact
the trustee when the notice was recorded. 
(Id. at pp. *10-11.)  The court observed that if the substitute
trustee was not the actual trustee, it "was not one of the four parties
authorized by Section 2924 to record a Notice of Default."  (Id.
at pp. *7, 10.)  Because the sale had yet
to occur, the court determined tender was not necessary.  (Id.
at pp. *4-7.) 

                        In contrast to >Tang and Dimock, ReconTrust's authority to institute the foreclosure as one
of the four parties in section 2924 is not reasonably in dispute.  ReconTrust was the named trustee in the
original deed of trust.  Hence, it is irrelevant
whether MERS' attempt to substitute ReconTrust as trustee in the first
assignment was void.  If it was void, ReconTrust
had authority to foreclose as the original trustee.  If it was valid, ReconTrust had authority as
the substitute trustee.  (§ 2924, subd. (a)(1).)  Plaintiffs have not alleged that any other
entity was the true trustee.  Nor have
they demonstrated how the assignments of the beneficial interest in the deed of
trust, even if void, stripped ReconTrust of its statutory authority to
foreclose, rendering the sale "a complete nullity with no force or effect."  (Dimock,
supra, 81 Cal.App.4th at p. 876.) 

 

                        An
assignment of a note and deed of trust merely substitutes one creditor for
another, without changing the borrower's obligations.  (Herrera
v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507-1508; >Fontenot v. Wells Fargo Bank, N.A.
(2011) 198 Cal.App.4th 256, 272.)  Thus,
even if borrowers allege that an assignment is void, as they do here, the
borrowers cannot attack the foreclosure without adequately alleging how the
assignment caused them harm.  (>Herrera, at pp. 1507-1508; >Siliga v. Mortgage Electronic Registration
Systems, Inc. (2013) 219 Cal.App.4th 75, 85 ["Absent any prejudice, [borrowers]
have no standing to complain about any alleged lack of authority or defective
assignment"].)  Plaintiffs
acknowledge they were in default on the loan, and do not allege that the assignments
interfered with their ability to pay their loan, or that the original lender
would have refrained from foreclosure despite their default.  (Herrera,
at pp. 1507-1508; Siliga, at p. 85.)  Although plaintiffs allege facts suggesting
they were harmed by oral representations made by BAC during the foreclosure
process, they do not allege they were harmed by the assignments themselves. 

                        Having admitted they did
not tender the full amount of the indebtedness, plaintiffs cannot overcome this
pleading deficiency through amendment.   (See
City of Atascadero v. Merrill Lynch,
Pierce, Fenner & Smith, supra, 68 Cal.App.4th at p. 459.) 

Thus,
the trial court properly applied the tender rule to sustain the demurrer without
leave to amend as to the causes of action seeking to avoid the sale.  (Karlsen,
supra, 15 Cal.App.3d at p. 117.)   

Claims for Damages

                        The trial court also
dismissed plaintiffs' claims for damages arising out of defendants' alleged
oral assurances that plaintiffs had qualified for a loan modification and that
the foreclosure sale had been cancelled. 
Plaintiffs discussed the  alleged oral
assurances in their opening brief, but raised only two arguments:  (1) that tender was not required because the
foreclosure sale was void, and (2) that leave to amend should be granted to
address tender.  Plaintiffs did not
mention their causes of action for unfair
competition, promissory estoppel, negligent misrepresentation and fraud and
deceit, other than to state they are in the complaint.  Defendants contend plaintiffs waived any
arguments regarding these claims on appeal by failing to address them in their
opening brief.  We agree.  (West
v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 799; >Davies v. Sallie Mae, Inc. (2008) 168
Cal.App.4th 1086, 1096; Christoff v.
Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125 ["an
appellant's failure to discuss an issue in its opening brief forfeits the issue
on appeal"].) 

                        Plaintiffs concede their
brief focused only on the tender rule, but contend they did not abandon their promissory
estoppel claim, which they address for the first time in their reply
brief.  They assert they did not raise that
claim in their opening brief because the trial court neglected to address it in
its order.  To the contrary, the order
expressly stated that "the fact that Plaintiffs have not suffered any
damages as a consequence of Defendants' actions invalidates their claims under
the 3rd [unfair competition], 6th
[promissory estoppel], 8th [negligent misrepresentation] and 9th [fraud and
deceit] causes of action."  (Italics
added.)  Because arguments cannot
properly be raised for the first time in an appellant's reply brief, we deem
them waived in this instance.  (>Cold Creek Compost, Inc. v. State Farm Fire
& Cas. Co. (2007) 156 Cal.App.4th 1469, 1486; West v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at p.
799.) 

DISPOSITION

                        The judgment is
affirmed.  Defendants and respondents shall
recover their costs on appeal.

                        NOT TO BE PUBLISHED.

 

 

                                                                        PERREN,
J.

We concur:

 

 

                        GILBERT, P. J.

 

 

                        YEGAN, J.

>

 

Rebecca
S. Riley, Judge

 

Superior
Court County of Ventura

 

______________________________

                       

                        Fobi Law Offices,
Emmanuel F. Fobi for Appellants.

                        Severson & Werson,
Jan T. Chilton, Jon D. Ives, Kerry William Franich for Respondents.