Opinion
B256199
04-13-2017
PARVIN JAMALI, Plaintiff and Appellant, v. BANK OF AMERICA HOME LOANS, AS SUCCESSOR LOANS, INC. et al., Defendants and Respondents.
Michael Shemtoub and Payman Taheri for Plaintiff and Appellant. Reed Smith, Kasey J. Curtis, Elena Gekker, Michael Gerst and Myles A. Lanzone for Defendants and Respondents Bank of America, N.A., as successor-by-merger to Bank of America Home Loans Servicing L.P., formerly known as Countrywide Home Loans Servicing L.P., ReconTrust Company, N.A., and The Bank of New York Mellon formerly known as The Bank of New York as Trustee for Certificateholders of CWMBA, Inc., CHL Mortgage Pass-Through Trust 2007-HY4, and Mortgage Pass-Through Certificates, Series 2007-HY4. Dinsmore & Sandelmann, Frank Sandelmman and Kirsten Stockton for Defendant and Respondent Martingale Investments, LLC.
ORDER DENYING REHEARING AND MODIFYING OPINION
[NO CHANGE IN JUDGMENT]
Plaintiff Parvin Jamali's petition for rehearing is denied. The opinion filed on April 13, 2017, is modified as follows:
On page 6, the third full sentence, beginning with "On March 30," delete "3016" and replace with "2016." /s/_________
KRIEGLER, J. /s/_________
KIN, J. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC518965) APPEAL from a judgment of the Superior Court of Los Angeles County, Michelle R. Rosenblatt, Judge. Affirmed in part; dismissed in part. Michael Shemtoub and Payman Taheri for Plaintiff and Appellant. Reed Smith, Kasey J. Curtis, Elena Gekker, Michael Gerst and Myles A. Lanzone for Defendants and Respondents Bank of America, N.A., as successor-by-merger to Bank of America Home Loans Servicing L.P., formerly known as Countrywide Home Loans Servicing L.P., ReconTrust Company, N.A., and The Bank of New York Mellon formerly known as The Bank of New York as Trustee for Certificateholders of CWMBA, Inc., CHL Mortgage Pass-Through Trust 2007-HY4, and Mortgage Pass-Through Certificates, Series 2007-HY4. Dinsmore & Sandelmann, Frank Sandelmman and Kirsten Stockton for Defendant and Respondent Martingale Investments, LLC.
Judge of the Los Angeles County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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I. INTRODUCTION
Plaintiff, Parvin Jamali, appeals from a March 10, 2014 judgment of dismissal in favor of defendants: Bank of America, N.A., as successor-by-merger to Bank of America Home Loans Servicing L.P., formerly known as Countrywide Home Loans Servicing L.P. (Bank of America); ReconTrust Company, N.A. and The Bank of New York Mellon formerly known as The Bank of New York. The Bank of New York was the Trustee for Certificateholders of CWMBA, Inc., CHL Mortgage Pass-Through Trust 2007-HY4, and Mortgage Pass-Through Certificates, Series 2007-HY4 (the trust). The judgment was entered after the trial court sustained without leave to amend the demurrers of defendants and a codefendant, Martingale Investments, LLC. We affirm the judgment of dismissal. Plaintiff also appeals the order sustaining the demurrer of Martingale Investments, LLC without leave to amend. However, we dismiss the appeal from the orders involving Martingale Investments, LLC.
II. BACKGROUND
A. Complaint
On August 20, 2013, plaintiff filed a verified complaint against defendants and Martingale Investments, LLC. The complaint alleges four causes of action: quiet title; wrongful foreclosure; cancellation of instruments; and elder abuse. Plaintiff is an elderly person who purchased real property in Los Angeles, California on August 3, 2007. On the same day, Countrywide Home Loans, Inc. recorded a trust deed reflecting a loan of $720,000 that was made to plaintiff. ReconTrust Company, N.A., is named the trustee on the trust deed with Countrywide Home Loans, Inc. identified as the lender. Bank of America later became the successor in interest to Countrywide Home Loans, Inc.
On March 1, 2012, Mortgage Electronic Registration Systems, Inc., on behalf of Bank of America, recorded the assignment of trust deed to the trust. On August 9, 2012, ReconTrust Company, N.A. recorded a notice of default on behalf of the trust. On June 14, 2013, ReconTrust Company, N.A. Company recorded a notice of trustee's sale. ReconTrust Company, N.A. allegedly failed to comply with Civil Code section 2923.3. The trustee's sale notice stated plaintiff's home would be sold at an auction on July 8, 2013. Martingale Investments, LLC purchased the property at the auction. On July 18, 2013, Martingale Investments, LLC recorded the trustee's deed upon sale.
The complaint alleges Bank of America's securitization and transfer of the trust deed and promissory note to the trust was void. The complaint relies upon New York Estates, Powers and Trust Law section 7-2.4 as the basis for its contention the transfer of the trust deed was void. Bank of America's assignment of the trust deed and promissory note allegedly failed because they occurred after the closing date of the trust. According to the complaint, no trust deed and promissory note can be transferred to the trust after the September 28, 2007 closing date. In addition, the complaint alleges, "Coupled with all of the failings with Civil Code 2923 et seq., . . . it is clear that Plaintiff who has offered to pay off her loan as early as the invalid Assignment of the Deed of Trust was recorded (to the proper entity) (months before any default had even occurred and continuing to so offer after Notice of Default was recorded and continuing till even after the Trustee's Sale) is entitled to a rescission of the Trustee's Sale of July 8, 2013, and is likewise entitled to tort like damages as well."
B. Plaintiff's Applications for Orders to Transfer, Relate, and
Consolidate the Unlawful Detainer Case
On August 23, 2013, plaintiff filed an ex-parte application for an order transferring the unlawful detainer case from the Los Angeles County Superior Court in Santa Monica and relating the cases. The unlawful detainer case was filed by Martingale Investments, LLC against plaintiff on July 23, 2013. On November 4, 2013, plaintiff filed a motion to consolidate the cases. On December 4, 2013, the trial court granted plaintiff's motion to consolidate the unlawful detainer case with the civil action.
C. Demurrers
In September 2013, defendants and Martingale Investments, LLC demurred to the complaint. In support of their demurrers, defendants and Martingale Investments, LLC requested judicial notice of the following documents: the trust deed; the trust deed assignment; the default notice and election to sell; the trustee's sale notice; and the trustee's deed upon sale. On December 30, 2013, plaintiff filed oppositions to the demurrers and judicial notice requests.
On March 10, 2014, the trial court sustained the demurrers without leave to amend. In ruling on the demurrers, the trial court judicially noticed the: trust deed dated July 25, 2007; trust deed assignment dated March 1, 2012; default notice recorded on August 9, 2013; trustee's sale notice recorded on June 14, 2013; and trustee's deed upon sale recorded on July 18, 2013. On March 10, 2014, the trial court entered a judgment of dismissal in favor of defendants.
On April 21, 2014, the trial court entered an order and judgment of dismissal in favor of Martingale Investments, LLC. In addition, the trial court, nunc pro tunc, ordered the unlawful detainer severed from the civil action and transferred back to the superior court in Santa Monica. On April 30, 2014, plaintiff filed an ex-parte application for an order vacating the order and judgment of dismissal in favor of Martingale Investments, LLC. On April 30, 2014, the trial court granted plaintiff's application and vacated the April 21, 2014 order and judgment of dismissal as to Martingale Investments, LLC. Plaintiff filed her notice of appeal on May 8, 2014.
On January 6, 2016, we issued an unpublished opinion affirming the March 10, 2014 judgment of dismissal and dismissing the appeal of Martingale Investments, LLC. (Jamali v. Bank of America Home Loans as successor Loans, Inc. (Jan. 6, 2016, B256199) [nonpub. opn.].) On February 16, 2016, plaintiff filed a review petition with our Supreme Court. On March 30, 3016, our Supreme Court granted plaintiff's review petition. (Jamali v. Bank of America Home Loans (Mar. 30, 2015, No. S232426) [nonpub. order].) The order granting review transferred the case back to us with directions to vacate our decision. Further, we were directed to reconsider our ruling in light of Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova). (Jamali v. Bank of America Home Loans (Mar. 30, 2015, No. S232426).) On April 15, 2016, we vacated our prior unpublished decision. Subsequently, the parties filed supplemental briefs addressing the applicability of Yvanova to this case.
III. DISCUSSION
A. Appealability
Plaintiff argues we may not have jurisdiction to consider the appeal because of the one final judgment rule. Under the one final judgment rule, a judgment that fails to dispose of all causes of action pending between the parties is interlocutory and thus not generally appealable. (Code Civ. Proc., § 904.1, subd. (a); Kurwa v. Kislinger (2013) 57 Cal.4th 1097, 1100-1101; Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 741.) But an appeal will not be dismissed when the case involves multiple parties and a judgment is entered which leaves no issues to be determined as to those litigants. (Justus v. Atchison (1977) 19 Cal.3d 564, 568, disapproved on another ground in Ochoa v. Superior Court (1985) 39 Cal.3d 159, 171; Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 437; Estate of Gonzalez (1990) 219 Cal.App.3d 1598, 1601 ["It is well settled that where, as here, there is a judgment resolving all issues between a plaintiff and one defendant, then either party may appeal from an adverse judgment, even though the action remains pending between the plaintiff and other defendants."]) Here, the March 10, 2014 judgment dismissing defendants from the case with prejudice is a final judgment that resolves all issues between plaintiff and defendants. Thus, we have jurisdiction to consider plaintiff's appeal from the March 10, 2014 judgment of dismissal in defendants' favor.
However, we cannot consider plaintiff's appeal from the order sustaining the demurrer of Martingale Investments, LLC without leave to amend. The trial court entered a judgment of dismissal in favor of Martingale Investments, LLC on April 21, 2014. But the trial court later vacated that judgment on April 30, 2014. Thus, plaintiff cannot appeal the order sustaining Martingale Investments, LLC's demurrer without leave to amend. In I.J. Weinrot & Son v. Jackson (1985) 40 Cal.3d 327, 331, our Supreme Court stated, "An order sustaining a demurrer without leave to amend is not an appealable order; only a judgment entered on such an order can be appealed." (Accord, Singhania v. Uttarwar (2006) 136 Cal.App.4th 416, 425; Orange Unified School Dist. v. Rancho Santiago Community College Dist. (1997) 54 Cal.App.4th 750, 756.)
Martingale Investments, LLC contends dismissal of plaintiff's appeal would cause "unnecessary delay and circuity," citing Shepardson v. McLellan (1963) 59 Cal.2d 83, 89 (Shepardson). Relying on Shepardson, Martingale Investments, LLC argues we can save the appeal by amending the judgment in favor of defendants so as to include it. But in Shepardson, our Supreme Court modified an existing judgment to dismiss the cause of action subject to the demurrer. Our Supreme Court then treated the notice of appeal as a premature filing from the judgment as modified. (Ibid.) Shepardson is inapplicable because in this case there is no existing judgment as to Martingale Investments, LLC. (Currier v. County of San Diego (1963) 216 Cal.App.2d 595, 596-597 [dismissing appeal of order where there was no judgment to modify]; see 1 Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2014) ¶ 2:20, p. 2-19.) Accordingly, plaintiff's appeal from the March 10, 2014 order sustaining the demurrer of Martingale Investments LLC is dismissed.
B. Judicial Notice
Plaintiff asserts the judgment must be reversed because defendants failed to request that we take judicial notice of documents already noticed by the trial court. Under Evidence Code section 459, subdivision (a), we are required to judicially notice each matter properly noticed by the trial court. (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1.) In reviewing the trial court's ruling sustaining the demurrer, we may consider matters that have been judicially noticed. (Yvanova, supra, 62 Cal.4th at p. 924; Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42 (Committee for Green Foothills); Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)
Plaintiff also challenges the trial court's judicial notice of the: trust deed; trust deed assignment; default notice; notice of trustee's sale; and trustee's deed upon sale. Plaintiff argues it was inappropriate for the trial court to take judicial notice of these documents. We review for abuse of discretion the trial court's ruling of a judicial notice request. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264, disapproved on another ground by Yvanova, supra, 62 Cal.4th at p. 939, fn. 13; Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549.)
The trial court did not abuse its discretion in granting defendants' judicial notice request. All of the judicially noticed documents were referenced and attached to the complaint. Exhibits attached to the complaint may be considered on demurrer. (Qualcomm, Inc. v. Certain Underwriters at Lloyd's, London (2008) 161 Cal.App.4th 184, 191; City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 800 ["Where written documents are the foundation of an action and are attached to the complaint and incorporated therein by reference, they become a part of the complaint and may be considered on demurrer."]; Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 1101; Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) On review of a ruling on a demurrer, we accept as true the contents of documents attached to the complaint. (Jibilian v. Franchise Tax Bd. (2006) 136 Cal.App.4th 862, 864, fn. 1; Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1409.) Furthermore, the trial court may judicially notice recorded documents under Evidence Code sections 452, subdivisions (c) and (h) and 453. (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1 [judicial notice of recorded trust deed, assignment of trust deed, substitution of trustee, notices of default and of trustee's sale, and trustee's deed upon sale]; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 803 [judicial notice of trustee's deed upon sale].)
C. Standard of Review for Demurrer
On appeal from a judgment based on an order sustaining a demurrer, we assume all the facts alleged in the complaint are true. (Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 998; Evans v. City of Berkeley, supra, 38 Cal.4th at p. 6.) In addition, we consider judicially noticed matters. (Committee for Green Foothills, supra, 48 Cal.4th at p. 42; Evans v. City of Berkeley, supra, 38 Cal.4th at p. 6.) We accept all properly pleaded material facts but not contentions, deductions or conclusions of fact or law. (Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 152; Evans v. City of Berkeley, supra, 38 Cal.4th at p. 6.) We determine de novo whether the complaint alleges facts sufficient to state a cause of action under any legal theory. (Committee for Green Foothills, supra, 48 Cal.4th at p. 42; McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) We read the complaint as a whole and its parts in their context to give the complaint a reasonable interpretation. (Evans v. City of Berkeley, supra, 38 Cal.4th at p. 6; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) We affirm an order sustaining a demurrer only if the complaint fails to state a claim under any possible legal theory. (Sheehan v. San Francisco 49ers, Ltd., supra, 45 Cal.4th at p. 998; Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810.)
D. Quiet Title
For a quiet title claim, it is sufficient to allege plaintiff's ownership and possession of the real property and defendant's assertion of an adverse interest. (Lucas v. Sweet (1956) 47 Cal.2d 20, 22; Ephraim v. Metropolitan Trust Co. (1946) 28 Cal.2d 824, 833; South Shore Land Co. v. Peterson (1964) 226 Cal.App.2d 725, 740-741.) In West v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at page 802, the Fourth Appellate District, Division Three explained, "An element of a cause of action for quiet title is '[t]he adverse claims to the title of the plaintiff against which a determination is sought.' (Code Civ. Proc., § 761.020, subd. (c).)" A borrower cannot satisfy this element where defendants make no adverse claims to title after the property has been sold at a foreclosure sale to a third party purchaser. (West v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at pp. 802-803.) Here, the property was sold at a trustee's sale to a third party purchaser, Martingale Investments, LLC. The complaint does not allege defendants have an adverse claim to title subsequent to the foreclosure sale. Nor does the complaint allege defendants still hold an interest in the property after the trustee's sale. Because defendants do not have an adverse claim to title, the trial court correctly sustained their demurrer to the first cause of action for quiet title.
E. Wrongful Foreclosure
To challenge a nonjudicial foreclosure sale, plaintiff may bring a suit in equity to have the sale set aside and title restored. (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 10-11; Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 103.) To maintain a wrongful foreclosure claim, the complaint must allege: the defendant caused an illegal, fraudulent or willfully oppressive sale of the property pursuant to a power of sale in a mortgage or trust deed; the plaintiff suffered prejudice or harm; and the plaintiff tendered the amount of the secured indebtedness or was excused from so tendering. (Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062; West v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at p. 800; Lona v. Citibank, N.A., supra, 202 Cal.App.4th at p. 104.)
Plaintiff premises her wrongful foreclosure cause of action on the alleged void assignment of her note and trust deed to the trust. Plaintiff contends she has standing to challenge the assignment of the note and trust deed pursuant to Yvanova, supra, 62 Cal.4th at pages 926 through 942. In Yvanova, the borrower secured a note with a trust deed against her property in 2006. (Id. at p. 924.) The lender assigned the trust deed to the trustee of an investment trust on December 19, 2011. (Id. at p. 925.) Under the terms of the trust, the closing date for transfer of loans and trust deeds into the investment trust was January 27, 2007. (Ibid.) The property was later sold at a foreclosure sale and a trustee's deed upon sale was recorded on December 24, 2012. (Ibid.)
The borrower alleged the assignment of her trust deed was void because it occurred after the investment trust's 2007 closing date. (Yvanova, supra, 62 Cal.4th at p. 925.) Our Supreme Court limited its review to the following issue: "'In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void?'" (Id. at p. 926.) The Supreme Court ruled the borrower has standing to challenge the assignments of the note and trust deed as void. (Id. at p. 939.) A borrower has standing to sue for wrongful foreclosure if the assignment is void, and not merely voidable at the behest of the parties to the assignment. (Id. at p. 923.) Our Supreme Court reasoned: "[O]nly the entity holding the beneficial interest under the deed of trust—the original lender, its assignee, or an agent of one of these—may instruct the trustee to commence and complete a nonjudicial foreclosure. [Citations.] If a purported assignment necessary to the chain by which the foreclosing entity claims that power is absolutely void, meaning of no legal force or effect whatsoever [citations], the foreclosing entity has acted without legal authority by pursuing a trustee's sale, and such an unauthorized sale constitutes a wrongful foreclosure. [Citation.]" (Id. at p. 935; see Sciaretta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 442, 564.)
However, a borrower bringing a wrongful foreclosure action does not have standing to challenge an assignment that is merely voidable. (Yvanova, supra, 62 Cal.4th at p. 936; Mendoza v. JP Morgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 811 (Mendoza); Yhudai v. IMPAC Funding Corp. (2016) 1 Cal.App.5th 1252, 1256 (Yhudai).) Our Supreme Court explained: "In general, California law does not give a party personal standing to assert rights or interests belonging solely to others. [Citations.] When an assignment is merely voidable, the power to ratify or avoid the transaction lies solely with the parties to the assignment; the transaction is not void unless and until one of the parties takes steps to make it so. A borrower who challenges a foreclosure on the ground that an assignment to the foreclosing party bore defects rendering it voidable could thus be said to assert an interest belonging solely to the parties to the assignment rather than herself." (Yvanova, supra, 62 Cal.4th at p. 936; accord, Mendoza, supra, 6 Cal.App.5th at p. 811; Yhudai, supra, 1 Cal.App.5th at pp. 1256-1257.)
Significantly, the Yvanova decision did not rule on whether the assignment was void or merely voidable under New York law. (Yvanova, supra, 62 Cal. at pp. 924, 940-943; Mendoza, supra, 6 Cal.App.5th at p. 811; Yhudai, supra, 1 Cal.App.5th at p. 1257; Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 815 (Saterbak).) Our Supreme Court recognized Rajamin v. Deutsche Bank National Trust Co. (2d Cir. 2014) 757 F.3d 79, 90 (Rajamin) disagreed with Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1094-1097 (Glaski), but expressed no opinion as to Glaski's correctness on this issue. (Id. at p. 941.) The Supreme Court stressed, "We express no opinion on whether plaintiff has alleged facts showing a void assignment, or on any other issue relevant to her ability to state a claim for wrongful foreclosure." (Id. at p. 943.)
Similar to the borrower in Yvanova, plaintiff's wrongful foreclosure cause of action is based on an alleged void transfer of her note and trust deed to the trust. The complaint alleges Bank of America's securitization and transfer of the trust deed and promissory note to the trust on March 1, 2012 was void. According to the complaint, no trust deed or promissory note could be transferred to the trust after it closed on September 28, 2007. Plaintiff contends the assignment of the note and deed of trust is void because it occurred after the trust's closing date. Whether the assignment is void or merely voidable is a legal question. (Mendoza, supra, 6 Cal.App.5th at p. 811.) Thus, we are not required to accept plaintiff's legal conclusion that the assignment is void. (Mendoza, supra, 6 Cal.App.5th at p. 810; Yhudai, supra, 1 Cal.App.5th at p. 1257.)
In support of her contention that the 2012 assignment is void, plaintiff relies on Glaski, supra, 218 Cal.App.4th at pages 1094 through 1097. In Glaski, the plaintiff alleged the transfer of his trust deed to the securitized trust was ineffective because it was made after the trust's closing date. (Glaski, supra, 218 Cal.App.4th at p. 1082.) A Fifth Appellate District panel reasoned plaintiff had standing to challenge the trust deed assignment if the assignment was void and not merely voidable. (Glaski, supra, 218 Cal.App.4th at pp. 1094-1095.) The Fifth Appellate District panel concluded the assignment was void based on its interpretation of New York Estates, Powers and Trusts Law section 7-2.4, which states, "If the trust is expressed in the instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void." (Glaski, supra, 218 Cal.App.4th at pp. 1096-1097.) The Court of Appeal held the borrower had standing to challenge the trust deed assignment because transfers made after the trust's closing date were void. (Glaski, supra, 218 Cal.App.4th at p. 1097.) In applying the New York statute, the Fifth Appellate District panel relied on a New York trial court decision. That decision was Wells Fargo Bank, N.A. v. Erobobo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A). (Glaski, supra, 218 Cal.App.4th at p. 1097.)
After Glaski, a New York intermediate appellate court reversed the trial judge's ruling in Erobobo. (Wells Fargo Bank, N.A. v. Erobobo (N.Y.App.Div. 2015) 127 A.D.3d 1176, 1177.) The New York appellate court ruled, "[A] mortgagor whose loan is owned by a trust [] does not have standing to challenge the [assignee's] possession or status as assignee of the note and mortgage based on purported noncompliance with certain provisions of the [pooling and servicing agreement]." (Id. at 127 A.D.3d at p. 1178, citing Bank of N.Y. Mellon v. Gales (N.Y. App. Div. 2014) 116 A.D.3d 723, 724-725 and Rajamin, supra, 757 F.3d at pp. 86-87.) Subsequent cases have rejected the trial judge's reasoning in Erobobo in light of its reversal on appeal. (In re Jepson (2016) 816 F.3d 942, 947 ["New York courts consistently have held that an assignment that fails to comply with the terms of a trust agreement merely is voidable and not void."]; Ferguson v. Bank of N.Y. Mellon Corp. (5th Cir. 2015) 802 F.3d 777, 782-783; Cocroft v. HSBC Bank USA, N.A. (7th Cir. 2015) 796 F.3d 680, 689-690; Mendoza, supra, 6 Cal.App.5th at p. 812; Yhudai, supra, 1 Cal.App.5th at pp. 1258-1259.)
Furthermore, in Rajamin, the Second Circuit panel rejected Glaski's interpretation of New York Estates, Powers and Trusts Law section 7-2.4. (Rajamin, supra, 757 F.3d at p. 90.) The Second Circuit panel ruled the trust deed assignments were voidable, not void. (Ibid.) The Second Circuit panel explained: "[W]e conclude that as unauthorized acts of a trustee may be ratified by the trust's beneficiaries, such acts are not void but voidable; and that under New York law such acts are voidable only at the instance of a trust beneficiary or a person acting in his behalf. Plaintiffs here are not beneficiaries of the securitization trusts; the beneficiaries are the certificateholders. Plaintiffs are not even incidental beneficiaries of the securitization trusts, for their interests are adverse to those of the certificateholders. Plaintiffs do not contend that they did not receive the proceeds of their loan transactions; and their role thereafter was simply to make payments of the principal and interest due. The law of trusts provides no basis for plaintiffs' claims." (Ibid.)
Under New York law, the March 2012 assignment of the note and trust deed is merely voidable. (Mendoza, supra, 6 Cal.App.5th at pp. 812-813; Yhudai, supra, 1 Cal.App.5th at pp. 1257-1259; Saterbak, supra, 245 Cal.App.4th at p. 815; Rajamin, supra, 757 F.3d at p. 90; Erobobo, supra, 127 A.D.3d at p. 1178.) Thus, plaintiff does not have standing to challenge the nonjudicial foreclosure based on an assignment that fails to comply with the trust agreement's terms. (Mendoza, supra, 6 Cal.App.5th at p. 813; Yhudai, supra, 1 Cal.App.5th at pp. 1258-1259; Saterbak, supra, 245 Cal.App.4th at p. 815 & fn. 5; Rajamin, supra, 757 F.3d at p. 90; Erobobo, supra, 127 A.D.3d at p. 1178.) Because plaintiff lacks standing to challenge the March 2012 assignment, we need not determine whether the complaint sufficiently alleges tender in support of the wrongful foreclosure claim.
We also decline to decide whether Civil Code sections 2924.19 and 2924.12 permit plaintiff to assert a wrongful foreclosure claim based on irregularities in the securitization process. For the first time in the reply brief, plaintiff argues Civil Code sections 2924.12 and 2924.19 grant her standing to challenge the validity of the trust deed assignment. By failing to raise this argument in the opening brief, plaintiff has forfeited the issue on appeal. (Telish v. State Personnel Bd. (2015) 234 Cal.App.4th 1479, 1487, fn. 4; Dieckmeyer v. Redevelopment Agency of Huntington Beach (2005) 127 Cal.App.4th 248, 260 (Dieckmeyer).)
F. Cancellation of Instruments
Plaintiff seeks judicial cancellation of the: trust deed assignment; default notice; trustee's sale notice; and the trustee's deed upon sale. Under Civil Code section 3412, a plaintiff may bring suit to remove a cloud on title by judicial cancellation or adjudication that the instrument is invalid. (Castro v. Barry (1889) 79 Cal. 443, 445; M.F. Farming Co. v. Couch Distributing Co. (2012) 207 Cal.App.4th 180, 200.) Civil Code section 3412 provides, "A written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled."
Plaintiff's third cause of action for cancellation of instruments is based on the alleged invalid assignment of the promissory note and trust deed. But as discussed above, plaintiff lacks standing to challenge the validity of the assignment. The trial court properly sustained defendants' demurrer to the cancellation of instruments cause of action.
G. Elder Abuse
Welfare and Institutions Code section 15610.30, subdivision (a)(1) states, "'Financial abuse' of an elder or dependent adult occurs when a person or entity does any of the following: [¶] (1) Takes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both." Further, Welfare and Institutions Code section 15610.30, subdivision (b) provides: "A person or entity shall be deemed to have taken, secreted, appropriated, obtained or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates, obtains or retains the property and the person or entity knew or should have know that this conduct is likely to be harmful to the elder or dependent adult." It is not necessary to show an intent to defraud if the defendant took the property for a wrongful use and knew or should have known his or her conduct likely harmed an elder. (Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 527-528 (Stebley); Bonfigli v. Strachan (2011) 192 Cal.App.4th 1302, 1315.) In Stebley, supra, 202 Cal.App.4th at page 528, the Third Appellate District explained: "As we held in an analogous case, 'It is simply not tortious for a commercial lender to lend money, take collateral, or to foreclose on collateral when a debt is not paid. . . . [A] commercial lender is privileged to pursue its own economic interests and may properly assert its contractual rights.' (Sierra-Bay Fed. Land Bank Assn. v. Superior Court (1991) 227 Cal.App.3d 318, 334-335 [].)"
Plaintiff's fourth cause of action for elder abuse is predicated on the alleged invalid assignment of the promissory note and trust deed. Based on the foregoing analysis, plaintiff lacks standing to challenge the March 2012 assignment. The trial court did not err in sustaining defendants' demurrer to the elder abuse cause of action.
H. Denial of Leave to Amend Complaint
When a trial court sustains a demurrer without leave to amend, we determine whether there is a reasonable possibility that the defect can be cured by amendment. (Yvanova, supra, 62 Cal.4th at p. 924; City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865; Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) The trial court abuses its discretion if there is a reasonable possibility plaintiff could cure the defect by amending the complaint. (City of Dinuba v. County of Tulare, supra, 41 Cal.4th at p. 865; Campbell v. Regents of University of California (2005) 35 Cal.4th 311, 320.) The plaintiff has the burden of proving the defect would be cured by an amendment. (Campbell v. Regents of University of California, supra, 35 Cal.4th at p. 320; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
Plaintiff argues the trial court abused its discretion by denying her leave to amend the complaint. Plaintiff has not proposed any specific amendment to cure the pleading defects identified above and we can conceive of none. The trial court's denial of leave to amend the complaint was not an abuse its discretion.
For the first time at oral argument after remand from our Supreme Court, plaintiff seeks leave to amend the complaint to add a cause of action for rescission. Plaintiff suggests she can plead a cause of action for rescission under Civil Code section 1689 and the Truth in Lending Act (15 U.S.C. § 1635). Plaintiff's request is untimely. Further, by failing to raise this issue in her briefs, plaintiff has forfeited this contention on appeal. (Telish v. State Personnel Bd., supra, 234 Cal.App.4th at p. 1487, fn. 4; Dieckmeyer, supra, 127 Cal.App.4th at p. 260.)
IV. DISPOSITION
The appeal of plaintiff, Parvin Jamali, from the orders involving Martingale Investments, LLC is dismissed. As to the appeal involving Martingale Investments, LLC, each side is to bear its own costs. As to the remaining parties, the March 10, 2014 judgment of dismissal is affirmed. Defendants, Bank of America, N.A., as successor-by-merger to Bank of America Home Loans Servicing L.P. formerly known as Countrywide Home Loans Servicing L.P., ReconTrust Company, N.A., and The Bank of New York Mellon formerly known as The Bank of New York as Trustee for Certificateholders of CWMBA, Inc., CHL Mortgage Pass-Through Trust 2007-HY4, and Mortgage Pass-Through Certificates, Series 2007-HY4, shall recover their costs on appeal from plaintiff.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
TURNER, P. J. We concur:
KRIEGLER, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.