Salinas v. Bank of New York Mellon CA4/2

• Court: California Court of Appeal
• Decided: September 19, 2016
• Docket: E060651
• Status: Unpublished

Opinion

Filed 9/19/16 Salinas v. Bank of New York Mellon CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

NORMA SALINAS,

Plaintiff and Appellant, E060651

v. (Super.Ct.No. RIC1307554)

BANK OF NEW YORK MELLON et al., OPINION

Defendants and Respondents.

APPEAL from the Superior Court of Riverside County. Edward D. Webster,

Judge. (Retired judge of the Riverside Super. Ct. assigned by the Chief Justice pursuant

to art. VI, § 6 of the Cal. Const.) Affirmed.

De Clue Law Group, Joseph L. De Clue and Jackson K. Eskew; Stephen F. Lopez

for Plaintiff and Appellant.

Wright, Finlay & Zak, Jonathan M. Zak, James J. Ramos and Michael H. Chang

for Defendants and Respondents.

1 Plaintiff and appellant Norma Salinas purchased certain real property using funds

from a loan, secured by a deed of trust, in 2005. In 2012, nonjudicial foreclosure

proceedings were instituted with respect to the property, but they have not been

completed: one trustee’s sale was rescinded; both parties represented in briefing in this

appeal that the property had not yet been sold again. Plaintiff brought suit against the

entity to whom the loan had been assigned,1 the agent of that entity who recorded the

notice of trustee’s sale,2 and defendant and respondent Mortgage Electronic Registration

Systems, Inc. (MERS). The trial court sustained defendants’3 demurrer to plaintiffs’ first

amended complaint (FAC) without leave to amend. In this appeal, plaintiff contends that

each of the causes of action asserted in the FAC is adequate to survive demurrer, and

requests leave to amend. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

On June 23, 2005, plaintiff obtained a loan in the amount of $632,572, used to

purchase certain real property in Riverside, California, and secured by a deed of trust

recorded against the property. MERS is identified as “beneficiary” and “nominee for

Lender and Lender’s successors and assignees” in the deed of trust. MERS, acting as

1 This entity is defendant and respondent The Bank of New York Mellon, f/k/a The Bank of New York Mellon, as Successor-in-interest to JPMorgan Chase Bank, N.A., as Trustee for Bear Stearns Asset Backed Securities, Bear Stearns ALT-A Trust, Mortgage Pass-Through Certificates, Series 2006-2 (BONY Trust).

2This is defendant California Reconveyance Company, which filed a declaration of nonmonetary status in the trial court, and is not a party to this appeal.

3 In this opinion, except where specifically noted, we use the term “defendants” to refer to those defendants who are also respondents.

2 nominee for the lender, assigned the loan to BONY Trust on March 27, 2012. On

June 26, 2012, BONY Trust designated California Reconveyance Corporation as trustee

under the deed of trust.

On June 27, 2012, a notice of default was recorded against the property. A notice

of trustee’s sale was recorded on September 28, 2012, and the sale was conducted on

October 29, 2012, but the sale was rescinded on January 30, 2013. A new notice of

trustee’s sale was recorded on June 15, 2013, but according to the parties’ briefing on

appeal, the property has yet to be sold.

Plaintiff filed the present lawsuit on July 1, 2013, and on October 21, 2013, filed

the FAC. The FAC alleges five purported causes of action: (1) cancelation of

instruments; (2) to “enjoin foreclosure sale” (capitalization omitted); (3) slander of title;

(4) violation of Business and Professions Code section 17200 et seq.; and (5) declaratory

relief. These claims arise from the alleged circumstance that the assignment of plaintiff’s

loan from the originator to the BONY trust was made after the closing date of the BONY

trust, and also that the assignment was made while the originator of the loan was in

bankruptcy, but without approval by the bankruptcy court.

After a hearing on January 16, 2014, the trial court sustained defendants’ demurrer

to the FAC. At the request of plaintiff’s counsel, it did so without granting leave to

amend. Judgment was entered in favor of defendants on January 22, 2014.

3 II. DISCUSSION

A. Standard of Review.

“‘On review of an order sustaining a demurrer without leave to amend, our

standard of review is de novo, “i.e., we exercise our independent judgment about whether

the complaint states a cause of action as a matter of law.” [Citation.]’ [Citation.] ‘“‘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.]”’ [Citation.] ‘We affirm if any ground offered in

support of the demurrer was well taken but find error if the plaintiff has stated a cause of

action under any possible legal theory. [Citations.] We are not bound by the trial court’s

stated reasons, if any, supporting its ruling; we review the ruling, not its rationale.

[Citation.]’ [Citation.]” (Walgreen Co. v. City and County of San Francisco (2010) 185

Cal.App.4th 424, 433.)

B. Analysis.

The state of the law regarding foreclosure-related claims has evolved substantially

while this appeal has been pending, and plaintiff’s arguments have evolved with it.

Plaintiff’s most recent position is that the trial court erred in sustaining defendant’s

demurrer, because in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919

(Yvanova) the California Supreme Court has “finally addressed most of the arguments

made by both Appellant and Respondents in this case,” and decided them, according to

plaintiff, in her favor. We disagree, for two reasons. First, Yvanova on its face is limited

in applicability to postforeclosure claims, leaving intact previous authority adverse to

4 plaintiff regarding borrower suits brought to preempt a threatened nonjudicial

foreclosure. Second, even assuming plaintiff might be authorized to bring such a suit,

she has still failed to plead facts showing the challenged assignment of her loan was void,

and not merely voidable, and therefore failed to demonstrate standing under Yvanova.

Additionally, plaintiff has not shown that she could successfully cure the defects in her

pleadings by amendment. We will therefore affirm the judgment.

A. California Law Does Not Authorize Plaintiff’s Suit to Preempt a Threatened

Nonjudicial Foreclosure.

In Yvanova, the California Supreme Court held that a borrower has standing to sue

for wrongful foreclosure where an alleged defect in an assignment of the loan renders the

assignment void. (Yvanova, supra, 62 Cal.4th at pp. 942-943.) Yvanova’s holding,

however, is expressly limited to the postforeclosure context: “We do not hold or suggest

that a borrower may attempt to preempt a threatened nonjudicial foreclosure by a suit

questioning the foreclosing party’s right to proceed.” (Id. at p. 924.) As such, Yvanova

left intact previous authority on the issue: “California courts do not allow such

preemptive suits because they ‘would result in the impermissible interjection of the courts

into a nonjudicial scheme enacted by the California Legislature.’” (Saterbak v.

JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 814 (Saterbak) [citing Jenkins

v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497 (disapproved on other

rounds in Yvanova, supra, at p. 939, fn. 13), and Gomes v. Countrywide Home Loans,

Inc. (2011) 192 Cal.App.4th 1149, 1156].)

5 Plaintiff also points to the California Homeowner Bill of Rights (Civ. Code,

§§ 2920.5, 2923.4-2923.7, 2924, 2924.9-2924.12, 2924.15, 2924.17-2924.20) (HBOR) to

argue standing, suggesting that the combination of Yvanova and HBOR places that

previous authority on “shaky ground.” HBOR went into effect, however, on January 1,

2013. (Civ. Code, § 2923.4.) The challenged assignment of plaintiff’s loan took place on

March 27, 2012. Plaintiff has failed to point to any authority for the proposition that

HBOR was intended to apply retroactively, and we are aware of none. (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’”].) We

need not address whether HBOR applies in the manner urged by plaintiff in similar suits

involving assignments made on or after January 1, 2013; it suffices to conclude that it

does not so apply to her claims.

In short, neither Yvanova nor HBOR (nor any other provision of California law)

authorizes plaintiff to bring a suit to preempt a threatened nonjudicial foreclosure by a

suit questioning the foreclosing party’s right to proceed.

B. Even If Yvanova’s Holding Applied to Preemptive Suits, Plaintiff Has Not

Demonstrated Standing.

Under Yvanova, to demonstrate standing to challenge a foreclosure on the basis of

an allegedly improper assignment of the loan, the plaintiff must allege specific facts

showing the defect in the assignment renders it void, rather than voidable. (Yvanova,

6 supra, 62 Cal.4th at pp. 942-943.) The facts alleged by plaintiff, however, even if

assumed true, would only demonstrate the challenged assignment to be voidable.

Plaintiff asserts that because the challenged assignment occurred on a date when

the original lender was in bankruptcy, and because it occurred without the approval of the

bankruptcy court, the assignment must have been void. Not so: “Transfers of bankruptcy

estate property initiated by the debtor are . . . voidable, not void . . . .” (Johnson v. E-Z

Ins. Brokerage, Inc. (2009) 175 Cal.App.4th 86, 96-97 [discussing In re Tippett (9th Cir.

2008) 542 F.3d 684, 690-691].)

Plaintiff also argues that the assignment is void because it took place after the

closing date of the BONY Trust. Again, plaintiff is incorrect. The California Supreme

Court declined to address the issue in Yvanova. (Yvanova, supra, 62 Cal.4th at p. 941.)

But most courts to have addressed it have concluded that an assignment of a deed of trust

to a securitized mortgage investment trust after its closing date is voidable, not void.

(Saterbak, supra, 245 Cal.App.4th at p. 815 & fn. 5; see Rajamin v. Deutsche Bank

National Trust Co. (2d Cir. 2014) 757 F.3d 79, 88-89 (Rajamin) [“the weight of New

York authority is contrary to plaintiffs’ contention that any failure to comply with the

terms of the PSAs rendered defendants’ acquisition of plaintiffs’ loans and mortgages

void as a matter of trust law”; “an unauthorized act by the trustee is not void but merely

voidable by the beneficiary”]; see also Morgan v. Aurora Loan Services, LLC (9th Cir.

Mar. 28, 2016) 2016 U.S. App. LEXIS 5720, at *6-7 [similar, citing Rajamin].)

Plaintiff’s arguments to the contrary, based primarily on several unreported decisions by

New York trial courts, one of which was subsequently reversed on other grounds, and

7 general authority regarding New York trust law dating from the 19th century, are

unpersuasive.

Because plaintiff fails to point to allegations of fact that would establish the

challenged assignment to be void, and not merely voidable, she would have failed to

establish standing under Yvanova, even if that case’s holding extended to the

preforeclosure context.

C. Leave to Amend Was Properly Denied.

Plaintiff argues that, even though her trial counsel preferred judgment to be

entered immediately, rather than taking another opportunity to amend the complaint, she

has not forfeited the opportunity to request leave to amend on appeal. Even accepting

this argument, however, plaintiff has failed to meet her burden of proving that an

amendment would cure the defect. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Plaintiff has made no showing, on appeal or below, that she could successfully amend the

complaint to cure the defects discussed above. Leave to amend was therefore properly

denied.

8 III. DISPOSITION

The judgment is affirmed. Defendants are awarded their costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

HOLLENHORST Acting P. J. We concur:

MILLER J.

SLOUGH J.