Spear v. Wells Fargo

Filed 10/12/06 Spear v. Wells Fargo CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

I.

Introduction

Appellant Theodora Spear “agreed to use her good credit“ to purchase residential property in Contra Costa County solely in her own name at the request of her son, Adam Spear. She admits that she “may have” contributed a nominal amount towards the purchase of the property and that she never resided at the property. Instead, she and her son agreed that he would assume all property-related financial obligations and eventually obtain financing in his own name. Shortly after the property was acquired, she placed her son on the title as her joint tenant.

Without appellant’s knowledge or consent, Adam Spear forged appellant’s signature to utilize the subject property as security to obtain a $60,000 loan from respondent Wells Fargo Bank, and later lost the property at foreclosure after defaulting on the loan. Two foreclosures, multiple financings, and multiple conveyances of the property have taken place in the intervening years since the original foreclosure. Appellant filed suit against respondents, which include several lenders, a foreclosure investment company, two foreclosure trustees, and the present owners of the property,^[1] claiming her son’s forgery warranted cancellation of their subsequent interests in the property and that the property be returned to her sole ownership.

Appellant now appeals from judgments of dismissal in favor of respondents based upon orders sustaining their individual demurrers without leave to amend to all of the causes of action stated against them in appellant’s second amended complaint (SAC). We conclude the superior court properly sustained the demurrers, and we affirm the judgment dismissing her lawsuit as to these respondents.

II.

Facts and Procedural History^[2]

Appellant purchased the subject property at 2472 Encinal Drive in Walnut Creek, California, on June 29, 1999. She admits in her second amended complaint (SAC) that she “took legal title in her name as a single woman” at the request of her son, Adam Spear. Appellant arranged for a $261,250 purchase money mortgage from nonparty Occidental Mortgage Company (Occidental). Her SAC acknowledges that she “may have provided approximately $3,000 of the purchase price,” but the closing costs and down payment were actually provided by Adam Spear.

Appellant never resided at the property for more than a day or two, but instead, resided primarily in Italy. Appellant and her son agreed that he would timely pay all monthly mortgage payments and eventually “obtain financing in his own name” in order to relieve appellant from all property-related financial obligations. They also agreed that he would keep appellant fully apprised of any proposed transactions impacting the property.

Appellant contends that on or about July 20, 1999--shortly after the subject property was acquired and while title was solely in her name--Adam Spear forged her signature on lending documents in order to obtain a $50,000 line of credit from respondent Wells Fargo. To secure the loan, Wells Fargo recorded a deed of trust against the property. Appellant claims she was unaware of this loan from Wells Fargo and her son’s forgery and she did not “knowingly” receive any of the funds.

Unaware that Adam Spear had breached his agreement with her, on or about August 12, 1999, appellant signed a grant deed which transformed the title from appellant alone to appellant and Adam Spear as joint tenants with the right of survivorship. After title to the subject property was transferred to appellant and Adam Spear as joint tenants, Adam Spear increased the line of credit to $60,000. On September 2, 1999, an assignment was recorded whereby the first priority purchase money mortgage was assigned to respondent IMPAC.

Adam Spear failed to pay the monies owed under the loans secured by the first and second deeds of trust recorded against the property. On May 10, 2001, after failing to timely pay the loan from Wells Fargo, Wells Fargo recorded a notice of default. When the default was not cured, Wells Fargo sold the property at a foreclosure sale on September 24, 2001. Appellant had no actual notice of the default or the sale because the address she put on the deed of trust was the property address, which was occupied solely by her son. The property was sold to respondent GAFI at a trustee’s sale. The trustee, respondent American Securities, conveyed the property to GAFI and title was recorded on October 12, 2001. With the foreclosure of the senior deed of trust, appellant’s record interest in the property was eliminated.

GAFI owned the property from September 24, 2001, through February 26, 2002. Respondent Chan Yin Wah made a $63,000 loan to GAFI secured by a deed of trust recorded against the property. Wah’s loan to GAFI was paid off in full when GAFI closed escrow on February 26, 2002, on a sale of the property to Adam Spear, this time posing as Robert Spear, appellant’s ex-husband and Adam Spear’s father. Adam Spear forged his father’s signature in order to obtain a $420,000 purchase money loan from respondent CBSK.

The CBSK loan was subsequently assigned to respondent IMPAC funding corporation. Adam Spear could not repay this loan either and on July 15, 2002, a notice of default was recorded. When the default was not cured, the property was again sold at a foreclosure sale on November 15, 2002. The property was sold to respondent Deutsche Bank, the assignee of the deed of trust from IMPAC. On August 6, 2003, Deutsche Bank sold the property to respondents the Virvitches. The Virvitches purchased the property with a loan from Countrywide Home Loans, Inc. (Countrywide). Appellant claims she only became aware of the $50,000 Wells Fargo loan and her son’s forgery in approximately the summer of 2003.

On March 30, 2004, appellant brought this action against Adam Spear a/k/a Robert A. Spear^[3], and respondents. In bringing this action she sought reinstatement of her ownership of the property and asked that her original deed of trust have priority over any of respondents’ ownership or security interests.

A first amended complaint followed, which initiated the first round of demurrers. In response to the court granting leave to amend, on March 21, 2005, appellant filed the SAC, which is the operative complaint in this proceeding. On appeal, appellant abandons all causes of action except her causes of action alleging negligence, quiet title, and slander of title. Therefore we limit our discussion to these claims. (See Brown v. Professional Community Management, Inc. (2005) 127 Cal.App.4th 532, 537.)

The primary cause of action claiming negligence was maintained against all respondents, except the Virvitches. It was claimed that “[a]s a result of the negligence of [respondents] and each of them, [appellant] has been deprived of clear title” to the property.

The next cause of action sought to quiet title and was maintained against IMPAC, Deutsche Bank, CBSK, and the Virvitches.^[4] Appellant claimed “[w]hether by recording an instrument or taking of some action or otherwise, each of these [respondents] had or has asserted a claim or interest which is adverse to that of [appellant].”

Appellant also alleged a cause of action for slander of title against the same respondents named in her cause of action to quiet title. Her SAC alleged these respondents “have either recorded or published” false documentation concerning the Walnut Creek property.

Respondents filed individual demurrers to all causes of action alleged against them in appellant’s SAC, claiming appellant had failed to state sufficient facts to constitute a cause of action. The court sustained each of the respondents’ demurrers without leave to amend and entered judgments of dismissal in each respondent’s favor. This appeal followed.^[5]

III.

Discussion

A. Standard of Review

On appeal, a trial court’s decision to sustain a demurrer without leave to amend and subsequent judgment are subject to de novo review. (Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 78.) We examine the allegations of the complaint to determine whether it states a cause of action, and if not, we determine whether there is a reasonable possibility that it could be amended to do so. (MacLeod v. Tribune Publishing Co. (1959) 52 Cal.2d 536, 542.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) “ ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law’ [and] we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) We may also consider matters that have been properly judicially noticed. (Ibid.)

B. Demurrer Properly Sustained to Cause of Action for Negligence

Appellant asserts that the trial court erred by dismissing her negligence claim, which was alleged against all of the respondents except the Virvitches. She argues that Wells Fargo, as the lender on the $60,000 loan that was secured by property on which appellant was on title, had a duty to detect her son’s forgery of her signature on this loan and that the breach of that duty caused her damages.

In her SAC, appellant added a litany of allegations against the other respondents, upon information and belief, that they were aware of the existence of identity theft and notary fraud occurring “in connection with the financial abuse of elderly persons” and employed methods to detect and avoid them in connection with real property transactions. She also alleged that respondents, including Wells Fargo, were negligent “in [not] verifying the consent of PLAINTIFF . . . to the transfers and encumbrances upon the PROPERTY and other real property.” In granting each respondent’s demurrer to the cause of action alleging negligence, the trial court found no respondent owed a duty of care to appellant.

To recover on a negligence claim, the plaintiff must prove the existence of a legal duty, breach of that duty, causation, and damages or injury. (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 292-293.) The determination whether a duty exists requires consideration of several factors, including the foreseeability of harm, the social utility of the defendant’s conduct, the magnitude of the burden of guarding against the injury, and the consequences of placing that burden on the defendant. (Rowland v. Christian (1968) 69 Cal.2d 108, 112-113.) Moreover, a person is ordinarily not liable for the actions of another and is under no duty to protect another from harm, in the absence of a special relationship of custody or control. (Roman Catholic Bishop v. Superior Court (1996) 42 Cal.App.4th 1556, 1564.) Whether a duty of care exists is a question of law. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397.)

1. Duty of Wells Fargo

In her SAC, appellant’s most detailed negligence claims are leveled against Wells Fargo as the lender on what appellant characterizes as “the loan underpinning this case”--the $60,000 loan that was secured by the property on which appellant was on title. As appellant alleged in the SAC, her son, Adam Spear forged her signature to this loan and then defaulted on this obligation, causing appellant to lose the subject property through the first foreclosure sale. She claims Wells Fargo was “grossly negligent in making the $50,000 loan, in increasing the amount of that loan to $60,000, and permitting those loan funds to be obtained by or used for the benefit” of Adam Spear.

Appellant claims that Wells Fargo failed in numerous particulars, including failing to follow “reasonable loan procedures” in approving the loan. She alleges that “[n]o attempt was made to determine why this elderly person wanted a line of credit on property she had just purchased, despite the fact that Wells Fargo knew Appellant was elderly, that the loan documents [were] notarized by her son, and that th[e] notary was dated a day after Appellant’s purported signature.” Appellant claims that if Wells Fargo had followed reasonable loan procedures, “it would have discovered” that Adam Spear “had forged the loan documents and improperly arranged to receive or apply the loan funds.”

This division, in Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472 (Software Design), analyzed similar allegations when it found several banks and brokerage firms had no duty to a noncustomer victim of a fraudulent scheme perpetrated by a financial consultant. In Software Design the defrauding consultant opened brokerage accounts in the name of a nonexistent partnership, with himself as sole signatory. (Id. at pp. 476-477.) The consultant transferred the victim’s assets to the account, and then looted the account by transferring money from it to bank accounts which were also in the name of the fictitious partnerships. (Id. at pp. 476-478.) These accounts were opened using falsified information. (Id. at p. 481.)

The victim, whose assets were lost through the financial consultant’s scheme, brought suit against the banks and brokerage firms which were used to funnel the money, attempting to recover on various theories, including negligence. (Software Design, supra, 49 Cal.App.4th at p. 478.) The defrauded victim contended that the banks and brokerages owed it a duty of care to investigate the entity opening the accounts, and to supervise and monitor account transactions. (Ibid.)

The Software Design court affirmed the trial court’s grant of demurrer, finding no such duty existed, noting that the primary flaw in the negligence theory was that the victim was a stranger to the banks and the brokerage firm. (Software Design, supra, 49 Cal.App.4th at pp. 478-479.) As the court noted, the “basic duty of care” between a bank and its customers “derives from the contract with their customer” and “[r]ecent cases have held that absent extraordinary and specific facts, a bank does not owe a duty of care to a noncustomer.” (Id. at p. 479.) Software Design also held that neither a bank’s internal policies nor standard industry practices for verifying the identity and authority of a party opening an account create a duty to a noncustomer. Such internal procedures or industry standards when opening an account do not “exist to protect strangers with whom [the banks] do no business. Rather they exist to protect the banks.” (Id. at p. 482, fn. omitted.)

Appellant cannot successfully distinguish Software Design. She claims its reasoning should be limited to “the role of banks in handling accounts“ and argues it should be deemed inapplicable to a case such as this involving “the duty of lenders, whether or not they are banks, encumbrancers and purchasers . . . .” A cursory review of the cases in this area reveals that the reasoning employed by the court in Software Design has been applied to a broad spectrum of commercial activity, and, therefore, we believe it should not be so narrowly construed. (See, e.g., Chazen v. Centennial Bank (1998) 61 Cal.App.4th 532, 543 [no duty to monitor mortgage trust accounts on behalf of noncustomers for possible misappropriation of funds]; Chicago Title Ins. Co. v. Superior Court (1985) 174 Cal.App.3d 1142, 1159 [no duty to a defrauded payee in a fraudulent real estate financing scheme]; Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1628 [no duty for mismanagement of noncustomer’s payroll account]; Roy Supply Inc. v. Wells Fargo Bank (1995) 39 Cal.App.4th 1051, 1076 [“a bank is liable only to its customer for its mishandling of that customer’s account”].)

Appellant also contends that she “would seem to qualify for ‘customer’ designation” because the fraudulent loan was opened up in her name. In fact, her son merely used her name without her knowledge. This is similar to the situation in Software Design, where the malefactor used the defrauded corporation’s name as a limited partner on the brokerage account in order to funnel securities from the corporation to the fictitious partnership. (Software Design, supra, 49 Cal.App.4th at p. 477.) This did not, however, make the corporation a customer of the brokerage firm.

Consequently, appellant has not alleged any facts in her SAC to support her cause of action of negligence against respondent Wells Fargo. In accordance with established California law, Wells Fargo owed no duty to appellant to discover and report her son’s forgery because she was not a “foreseeable and identifiable injured third party.” (Software Design, supra, 49 Cal.App.4th at pp. 480-481.) To obligate Wells Fargo to investigate the authenticity of third-party signatures whenever a loan is applied for and share its suspicions with unidentified third parties would not only impede the process for procuring loans, but would also make the whole banking industry impracticable to operate.

Finally, as Adam Spear’s mother and owner of the property, appellant was in the best position to monitor Adam’s activities in the first place. “It is the person who has the most control and the most to win or lose . . . with whom the investigative tasks should rest.” (Software Design, supra, 49 Cal.App.4th at p. 483; see also Karen Kane, Inc. v. Bank of America (1998) 67 Cal.App.4th 1192, 1199.) For instance, to protect her ownership interest in the property, appellant could have recorded a request for notice pursuant to Civil Code section 2924b to be apprised of any defaults recorded on the property. Doing so would have insured that foreclosure notices would have been sent to her, potentially putting a quick end to her son’s fraudulent activities.

2. Duty of American Standard and CTC as Foreclosure Trustees

Focusing on the fraudulent loan that caused her to lose her record rights to the property, appellant claims her SAC contains factual allegations which are sufficient to support a negligence claim against respondent American Securities, the trustee who commenced nonjudicial foreclosure proceedings when Adam Spear defaulted on the payment of the fraudulent Wells Fargo loan in 2001. Appellant alleges in her SAC that American Securities knew or should have known that the deed of trust purporting to give it power to sell the property was ineffective or unreliable, among other reasons, because appellant’s purported signature on the loan was dated July 21, 1999, while the notary provided by Adam Spear was dated July 22, 1999. Similar allegations are made against CTC as the foreclosure trustee in the second sale of the property.

Our Supreme Court has essentially inoculated foreclosure trustees against such claims. In I. E. Associates v. Safeco Title Ins. Co. (1985) 39 Cal.3d 281, our Supreme Court held that a trustee under a deed of trust owes no duties beyond those specified in the deed and applicable statutes. (Id. at p. 288.) The “statutory scheme also evidences an intent that a properly conducted sale be a final adjudication of the rights of the creditor and debtor [citations] and the sanctity of title of a bona fide purchaser be protected.” (Moeller v. Lien (1994) 25 Cal.App.4th 822, 832.) As such, it has been held that “once a deed reciting that all legal requirements have been satisfied has been transferred to a buyer at a foreclosure sale, the sale can be successfully attacked on the grounds of procedural irregularity only if the buyer is not a bona fide purchaser. [Citations.]” (6 Angels, Inc. v. Stuart-Wright Mortgage, Inc. (2001) 85 Cal.App.4th 1279, 1286 (6 Angels).)

In considering whether appellant’s negligence claim is viable, we note the recent case of Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807. In Residential Capital the foreclosure trustee learned after the sale, but before delivery of the trustee’s deed to the successful bidder, that the trustor and the beneficiary bank had agreed to postpone the sale. The successful bidder sued the trustee and the beneficiary bank, contending that it was entitled to damages for negligence. After reviewing case law concerning actions against trustees, the court stated there was no reason to create new, nonstatutory duties for trustees at trustee sales. “No negligence cause of action need be recognized here. Otherwise, we would be engaging in judicial legislation by grafting a tort remedy onto a comprehensive statutory scheme in the absence of a compelling justification for doing so. ([Civ. Code,] §§ 2924-2924k.)” (Id. at p. 827.)

CTC and American Securities, as foreclosure trustees, emphasize that they did all that was required of them under the nonjudicial foreclosure statutes. They point out that they had no duty to protect the property for appellant’s benefit or to investigate the status of the loan before conveying title at the trustee’s sale. They claim no public policy would be served by requiring them to question every loan transaction and to do an exhaustive search for all possible claims to real property. (See Diediker v. Peelle Financial Corp. (1997) 60 Cal.App.4th 288, 295; Perez v. 222 Sutter St. Partners (1990) 222 Cal.App.3d 938, 949.)

We agree. The applicable public policies underlying the statutory framework governing foreclosure sales evidences “a concern for swift, efficient, and final sales.” (6 Angels, supra, 85 Cal.App.4th at p. 1287.) “In our view, . . . granting relief under the circumstances present here would frustrate, rather than promote, this policy, by adding uncertainty to the finality of foreclosure sales.” (Ibid.)

3. Duty of Other Respondents

The SAC goes on to allege that respondents were aware that their real property transactions were exposed to the evils of identify theft and notary fraud, including the existence of those evils in cases of elder abuse, and they took steps to avoid such identity theft and notary fraud. It is further alleged that, to protect themselves, respondents searched real property records and exchanged information on purchasers, borrowers, and properties. And it was alleged that the efforts to protect against fraud were, at least in part, intended to protect property owners like appellant. In briefing this matter, appellant expounds on these allegations and claims “a duty should be imposed upon all who purchase, sell, encumber or transfer real property to investigate all questionable circumstances regarding that property.”

Borrowing from the reasoning of Software Design, each respondent claims no such duty existed to appellant, who was a stranger in their dealings with the property. While Software Design is not directly on point, we find its basic premise persuasive. At all times mentioned in the SAC, appellant never had any direct dealings with respondents in each of their respective roles as lenders, bona fide encumbrancers for value, foreclosure trustees, and bona fide purchasers. Perhaps more importantly, there are no facts alleged that would put respondents on notice that there was anything amiss in the transaction, or that circumstances required further investigation or inquiry.^[6] As such, they had no duty to investigate beyond the then-current record title to the property and certainly no duty to determine whether appellant had any claim against the property when her record interest in the property had been extinguished. (See First Fidelity Thrift & Loan Assn. v. Alliance Bank (1998) 60 Cal.App.4th 1433, 1444-1445 [refusing to create “a duty to investigate beyond the state of record title in virtually all cases”].)

C. Demurrer Properly Sustained to Cause of Action for Quiet Title

The court also granted respondents’ demurrers to appellant’s cause of action seeking to quiet title against respondents IMPAC, CBSK, Deutsche Bank and the Virvitches.^[7] Appellant’s SAC states: “Whether by recording an instrument or taking of some action or otherwise, each of these Defendants had or has asserted a claim or interest which is adverse to that of PLAINTIFF.”

“It has been held that in a complaint to quiet title it is sufficient to allege that plaintiff is the owner of certain described property, that the defendant claims an interest therein adverse to plaintiff, and that such claim is without right. [Citations.]” (Compas v. Escondido Mutual Water Co. (1948) 86 Cal.App.2d 407, 411;

Williams v. San Francisco (1938) 24 Cal.App.2d 630, 633.) Appellant admits respondents IMPAC, CBSK and Deutsche Bank have no current interest in the property. Here, the court correctly granted respondents’ demurrers because there is no quiet title claim where respondents do not assert an adverse claim.

Appellant acknowledges that the Virvitches, who acquired the subject property on August 6, 2003, shortly after the second foreclosure sale, are “the only party claiming a current interest” in the property. In an attempt to quiet title in herself, appellant insists that she holds paramount title and that respondents’ Virvitches’ ownership of the property, as bona fide purchasers for value, must be subrogated to her own because her property was wrongfully appropriated through her son’s forgery.

Appellant relies on cases stating that a forged document impacting real property is regarded as void and passes no interest, even to a bona fide purchaser. (Firato v. Tuttle (1957) 48 Cal.2d 136, 139; Handy v. Shiells (1987) 190 Cal.App.3d 512, 517.)

What appellant fails to acknowledge is that particular circumstances may give rise to an estoppel against the person seeking to assert the forgery, in which event the innocent purchasers will be protected. It has been held “that the doctrine of equitable estoppel ‘may be invoked by an innocent purchaser, in spite of the fact that ordinarily a forged instrument cannot carry title. “The owner of property cannot be divested thereof by a forged instrument, but his conduct . . . may estop him from denying its validity.” [Citation.]’ [Citations.] The principle of estoppel is based on Civil Code section 3543, which provides that ‘Where one of two innocent persons must suffer by the act of a third, he, by whose negligence it happened, must be the sufferer.’ “ (Wutzke v. Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36, 44-45 (Wutzke); Common Wealth Systems, Inc v. Kersten (1974) 40 Cal.App.3d 1014, 1025; Crittenden v. McCloud (1951) 106 Cal.App.2d 42, 50.) As pertinent to this case, “ ‘[m]isplaced confidence may be held to be negligence within the meaning of the maxim set forth in section 3543 of the Civil Code, . . .’ “ (Wutzke, supra, 151 Cal.App.3d at p. 45.)

As between appellant and the Virvitches, the equities are with the latter.^[8] Appellant does not allege any facts to show that the Virvitches, the current owners of the subject property, knew of Adam Spear’s fraudulent conduct many years prior to their purchase of the property. There is nothing to show that the Virvitches are anything other than innocent parties, who bought for value, relying upon the title shown by the record. The Virvitches paid a reasonable consideration for the property and were residing there at the time of the lawsuit.

Appellant tacitly admits that because of her son’s history of financial irresponsibility, she submitted a false loan application and supporting documents to obtain a loan for which he did not qualify. She never resided at the property, and she suffered no monetary damage from her son’s fraud. To the contrary, appellant stands only to profit from her son’s fraud if she is allowed to use it to void the Virvitches’ title and place title in herself. Moreover, as implied in the SAC, and made clear by appellant’s briefing in this matter, appellant was an active participant, albeit an innocent one, in the commission of the forgery. Appellant resided out of the country and failed to monitor her son’s activities or take any actions to protect herself. The address that she put on the deed of trust was not her actual address in Italy, which would have assured she receive notice. Instead it was the address of the property that was exclusively occupied by her son. She also assumed the risk that her son would use the property for his own benefit without her knowledge when she made him a record owner of the property.^[9] Thus, an equitable estoppel has arisen which precludes appellant from asserting superior title to the property. (Wurzl v. Holloway (1996) 46 Cal.App.4th 1740, 1752.)

Accordingly, the demurrer to appellant’s quiet title claim was properly sustained. “[I]f the specifically pleaded facts affirmatively reveal the absence of an essential element in a plaintiff’s claim of title, no cause of action [for quiet title] is stated. [Citations.]” (Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 292.)

D. Demurrer Properly Sustained to Cause of Action for Slander of Title

Appellant claims that she “is entitled [to] pursue a slander of title action against Respondents IMPAC, CBSK and Deutsch for their malicious transfer of the Property with knowledge of Appellant’s claims.” However, the order properly sustaining the general demurrer to the quiet title cause of action without leave to amend forecloses appellant from proceeding further upon the allegations embraced in her cause of action for slander of title. A slander of title action can only be prosecuted by the owner of the property who holds title to the property. (5 Miller & Starr, Calif. Real Estate (3d Ed. 2000) § 11:41, p. 112, citing Broadway Fed. etc. Loan Assn. v. Howard (1955) 133 Cal.App.2d 382, 399-400.) Here, the cause of action for slander of title cannot be prosecuted by appellant because she is not the record owner of the property and she has not established that she holds any title to the property.

IV.

Disposition

The judgments dismissing respondents from appellant’s action are affirmed.

_________________________

Ruvolo, P. J.

We concur:

_________________________

Reardon, J.

_________________________

Rivera, J.

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^[1] Named respondents are Chan Yin Wah; Greater Alameda Foreclosure Investments, LLC (GAFI); American Securities Company (American Securities); Wells Fargo Bank, N.A. (Wells Fargo); CBSK Financial Group, Inc. d/b/a American Home Loans (CBSK); IMPAC Funding Corporation (IMPAC); Deutsche Bank National Trust Company (Deutsche Bank); Nationwide Residential Lending; CTC Real Estate Services; US Bank National Association; and Zdigniew and Stella Virvitch (the Virvitches).

^[2] Since this is an appeal from a judgment following the sustaining of a demurrer without leave to amend, we take the facts as pleaded in appellant’s SAC. (Schiavon v. Arnaudo Brothers (2000) 84 Cal.App.4th 374, 376.) We omit recitation of numerous allegations in the SAC which are unnecessary to our resolution of the issues presented in this appeal.

^[3] While Adam Spear is named as a defendant in appellant’s action, he was not involved in the demurrers and is not a party to this appeal.

^[4] In briefing her appeal, appellant claims she inadvertently omitted GAFI as a named defendant in this cause of action.

^[5] Appellant acknowledges she has not appealed from the judgment of dismissal entered in favor of Countrywide; consequently, the judgment dismissing Countrywide from the case is now final and beyond the scope of appellate review. (Gonzales v. R. J. Novick Constr. Co. (1978) 20 Cal.3d 798, 804-805.) At appellant’s request, we have also dismissed this appeal as to US Bank National Association based on the parties’ settlement.

^[6] Appellant’s SAC alleges that “as early as July 7, 2003, counsel for PLAINTIFF wrote to General Counsel for Defendant Countrywide advising that the law rendered all transactions relying upon forged documents created by Defendant ADAM SPEAR . . . were invalid and the title had not been validly taken from either PLAINTIFF or Robert Spear.” As noted, Countrywide is no longer a party to these proceedings. Moreover, an exhibit in appellant’s opposition to demurrer, which appears to be the above-described letter dated July 7, 2003, is actually addressed to IMPAC’s General Counsel not Countrywide. By July 7, 2003, IMPAC had already assigned its interest in the property to Deutsche, so appellant’s letter was of no legal consequence to IMPAC. We reject appellant’s suggestion that the information in this letter should be imputed to the other respondents in this case when there is nothing alleged in the SAC that would support such a theory.

^[7] IMPAC, CBSK, and Deutsche Bank are described in the SAC as “venturers, partners, or each others[‘] agents in obtaining, transferring and servicing various residential real estate loans or packages of loan, including loans which used the property as security.” (Capitalization omitted.) Their actual relationship to the property in this case is as follows: In February, 2002, Adam Spear, allegedly masquerading as his father, Robert Spear, arranged to purchase the subject property with a loan from respondent CBSK in the amount of $420,000. Shortly after its origination, the CBSK mortgage was assigned to respondent IMPAC. Allegedly, IMPAC foreclosed on the subject property and purchased it by credit bid at a “public sale,” arranging for “title to be placed in the name of” respondent Deutsche Bank. Several months later, Deutsche Bank sold the property to the Virvitches.

^[8] Because the facts material to a resolution of the estoppel issue in this case are undisputed and only one inference reasonably may be drawn, the issue is one of law. (Toigo v. Town of Ross (1998) 70 Cal.App.4th 309, 320.)

^[9] As cotenant, appellant’s son was entitled to sell or encumber his interest in the property without appellant’s knowledge, approval, or consent. (Caito v. United California Bank (1978) 20 Cal.3d 694, 704-705 (cotenant can encumber his or her estate with deed of trust); Kane v. Huntley Financial (1983) 146 Cal.App.3d 1092, 1096-1097; Schoenfeld v. Norberg (1970) 11 Cal.App.3d 755, 765.)