Varma v. The Bank of New York Mellon CA4/2

California Court of Appeal·Decided August 27, 2026·No. E085566·Unpublished

Opinion

Filed 8/27/26 Varma v. The 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

RAJESH VARMA et al., Plaintiffs and Appellants, E085566 v. (Super.Ct.No. CVCO2403625)

THE BANK OF NEW YORK MELLON, OPINION Defendant and Respondent.

APPEAL from the Superior Court of Riverside County. Daniel A. Ottolia, Judge.

Affirmed.

Rajesh Varma and Mahima Varma, in pro. per., for Plaintiffs and Appellants.

Troutman Pepper Locke, Jared D. Bissell, and Meagan S. Tom for Defendant and Respondent.

Rajesh and Mahima Varma appeal from an order denying and striking their petition for entry of default administrative judgment and damages. We issued a tentative opinion stating that we were inclined to affirm the trial court’s order. In that tentative

opinion, we noted that the Varmas’ opening brief contained citations to cases that do not exist, citations to cases that do not stand for the proposition cited, and quotations that do not appear in the authorities cited. We noted that all of those citations bear the hallmarks of fabricated legal authority created by generative artificial intelligence (AI), commonly referred to as AI hallucinations. (Schlichter v. Kennedy (2025) 116 Cal.App.5th 24, 26 (Schlichter); Noland v. Land of the Free, L.P. (2025) 114 Cal.App.5th 426, 445 (Noland).) We cautioned that attorneys have been sanctioned for filing briefs containing AI hallucinated citations and that the same outcome was possible for pro se litigants. The Varmas did not request oral argument.

We subsequently issued an order to show cause why the Varmas should not be sanctioned for “‘relying on fabricated legal authority’” in the opening brief. (Schlichter, supra, 116 Cal.App.5th at p. 26.) We conclude that the Varmas have failed to show cause why sanctions should not be imposed. We otherwise affirm.

BACKGROUND

In June 2024, the Varmas filed a pro se “petition for entry of default administrative judgment and damages” against the Bank of New York Mellon (hereafter Bank of New York or the bank). (Capitalization omitted.) The pleading was accompanied by 68 pages of exhibits.

According to the petition and attachments, in 2016 a lender assigned the mortgage on the Varmas’ residence in Corona, California to the Bank of New York. In 2019, the bank foreclosed on the property. The bank took possession of the property in 2021.

In November 2023, the Varmas sent the Bank of New York an “administrative notice and default” in the form of an affidavit demanding that the bank respond within 10 days or the “entire Affidavit and default provisions shall be deemed true and correct.” The default provisions included that the Bank of New York agreed “to a Deed of release or a Reconveyance,” “to set aside any Note and Deed of Trust,” “to cancel and set aside the Trustee’s Deed Upon Sale recorded” on a certain date, and to “return any money or property of Affiants including but not limited to any original documentation, including but not limited by, any Notes, securities, assets, applications, transfers, blotters, book entries, assignments, and security interests to Affiants’ address stated herein.” The Varmas allege that they did not “receive a proper response” from the bank within 10 days.

Over the next six months, the Varmas sent the Bank of New York numerous additional notices. Those notices advised the bank that it was in default because it did not respond sufficiently to the Varmas’ previous affidavit and notices; the subsequent notices gave the bank an opportunity to cure that default. The Varmas alleged that the Bank of New York did not respond to those notices and that, “[b]y their silence,” the bank agreed that the foreclosure on the residential property “was null and void.” The Varmas notified the Bank of New York that they considered the “commercial matter settled and closed.”

In April 2024, the Varmas filed a form entitled “UCC Financing Statement (UCC-

1)” with the California Secretary of State, which the Varmas intended to be a lien under

the Uniform Commercial Code. It identifies the Bank of New York as the debtor and the Varmas as the secured parties. In the form, the Varmas asserted: “Debtor has tacitly agreed and admitted Secured Parties owed Debtor zero on [a certain] Public Account No. … on or before May 2, 2018. By their tacit admission and acquiescence, Debtor owes Secured Parties damages in the amount of $10,500,000.00.”

The Varmas’ petition contains one cause of action: “order for satisfaction of lien.”

(Capitalization, boldface, and underlining omitted.) They alleged that the “matter has been resolved through Petitioners’ private administrative process as described in the Statement of Facts and therefore, by their tacit admission, there is no controversy or dispute for this Honorable Court to adjudicate. [The Bank of New York] is in default of an opportunity to respond to Petitioners’ Commercial Affidavits under penalty of perjury attesting to this fact. They have abandoned their right to answer, oppose and appeal.” The Varmas sought the following forms of relief: (1) a court order that someone (presumably the bank) “[r]emove all derogatory reporting with the credit bureaus” and “report all the account as ‘Paid or Settled in Full as Agreed’” and (2) an award of damages in the amount of $10,500,000 “as tacitly agreed and as stated in Petitioner’s UCC-1 Financing Statement.”

The Bank of New York filed an opposition to the Varmas’ petition. The bank asked the court to dismiss the Varmas’ petition “with prejudice, order rescission of the invalid UCC-1 lien, and award costs in favor of” the bank.

The trial court issued a tentative ruling denying the petition. Neither party requested oral argument, so the court adopted the tentative ruling as the court’s final ruling. The tentative ruling is not included in the record on appeal.

In August 2024, the trial court issued a minute order denying the petition as “without merit.” The minute order provides: “There is no statutory authority for the filing of a Petition for Entry of Default Administrative Judgment. The UCC sections cited by Petitioners are inapplicable to any issue in this action or in the foreclosure action. The Petition is stricken pursuant to CCP § 436, which provides; ‘[t]he court … at any time in its discretion, and upon terms it deems proper: Strike out all or any part of any pleading not drawn in conformity with the laws of this state, a court rule, or an order of the court.’ The relief requested by respondent cannot be granted by the court as it does not have the power to award costs or order re[s]cission of the UCC-1 lien statement.”

DISCUSSION

I. Appealability The existence of an appealable order or “judgment is a jurisdictional prerequisite to an appeal.” (Jennings v. Marralle (1994) 8 Cal.4th 121, 126.) We are independently obligated “‘in this as in every matter to confirm whether jurisdiction exists.’” (Kirk v. Ratner (2022) 74 Cal.App.5th 1052, 1060.) If an “order is not appealable, we must dismiss the appeal.” (Reddish v. Westamerica Bank (2021) 68 Cal.App.5th 275, 277.)

“The right to appeal is wholly statutory.” (Dana Point Safe Harbor Collective v.

Superior Court (2010) 51 Cal.4th 1, 5 (Dana Point).) Section 904.1 of the Code of Civil

Free access — add to your briefcase to read the full text and ask questions with AI

Varma v. The Bank of New York Mellon CA4/2, (Cal. Ct. App. 2026).

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