Opinion
B295819
10-07-2020
MITCHELL MILLER, Plaintiff and Appellant, v. BAYVIEW LOAN SERVICING, LLC et al., Defendants and Respondents.
J. Wright Law Group and Jamie Wright for Plaintiff and Appellant. Wright, Finlay & Zak, Jonathan D. Fink and Cathy K. Robinson for Defendants and Respondents Bayview Loan Servicing, LLC, etc., et al. Anderson, McPharlin & Conners, Vanessa H. Widener and Lisa Anne Coe for Defendants and Respondents FCI Lenders Services, Inc. and 2005 Residential Trust 3-2.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. BC703835) APPEAL from a judgment of the Superior Court of Los Angeles County. Daniel S. Murphy, Judge. Affirmed. J. Wright Law Group and Jamie Wright for Plaintiff and Appellant. Wright, Finlay & Zak, Jonathan D. Fink and Cathy K. Robinson for Defendants and Respondents Bayview Loan Servicing, LLC, etc., et al. Anderson, McPharlin & Conners, Vanessa H. Widener and Lisa Anne Coe for Defendants and Respondents FCI Lenders Services, Inc. and 2005 Residential Trust 3-2.
Mitchell Miller (appellant) appeals from a judgment of dismissal entered after the trial court sustained demurrers to all causes of action appellant alleged against respondents Bayview Loan Servicing, LLC (Bayview); The Bank of New York Mellon formerly known as The Bank of New York, as Trustee for the Alternative Loan Trust 2005-86CB Mortgage Pass-Through Certificates, Series 2005-86CB (erroneously sued as The Bank of New York Mellon fka The Bank of New York, as Trustee for the Certificateholders of CWALT, Inc., Alternative Loan Trust 2005-86CB) (BONY); FCI Lender Services, Inc. (FCI); and 2005 Residential Trust 3-2 (RT) (collectively "respondents").
We find that appellant has failed to state a cause of action against respondents, and that appellant's challenge to the award of attorney fees is not properly before us. Therefore, we affirm the judgment in its entirety.
FACTUAL BACKGROUND
On December 9, 2005, appellant entered into two loans secured by property known as 11812 South Main Street, Nos. 1, 2, 3, 4, in Los Angeles, California (property). Appellant's first loan, in the amount of $448,000, was from America's Wholesale Lender (AWL). It was evidenced by a note, and secured by a first priority deed of trust (first priority DOT) against the property. The first priority DOT was recorded on December 20, 2005, in the official records of the Recorder's Office of Los Angeles County.
Appellant also borrowed $128,000, secured by the property and evidenced by a note and second priority deed of trust (second priority DOT) in favor of AWL. The second priority deed of trust was also recorded on December 20, 2005, in the official records of the Recorder's Office of Los Angeles County.
Appellant admits to having defaulted on his loan obligations on the second priority loan in the summer of 2009, and on the first priority loan in the summer of 2010.
On November 8, 2010, all beneficial interest in the first priority DOT was transferred to BONY by a recorded Assignment of Deed of Trust (ADOT). The servicing of the first priority loan was transferred to Bayview on June 16, 2014. A notice of default on the loan was recorded on June 30, 2016 and, because the default was not cured, a notice of trustee's sale was recorded on October 6, 2016.
The second priority deed of trust was assigned to RT via an assignment dated June 28, 2017, and recorded July 10, 2017. The servicing of the second priority loan was transferred to FCI effective June 1, 2017. Appellant received a letter dated September 25, 2017, entitled "Notice of Intent," advising appellant of his default and that unless he cured the default, the lender would begin foreclosure proceedings.
The foreclosure proceedings on the first priority loan, first recorded in October 2016, were delayed due to appellant's "scheme to hinder, delay, or defraud" his creditors by transferring interests in the property to debtors in bankruptcy and obtaining an automatic stay. Bayview and BONY obtained an order granting relief from the automatic stay in July 2017. The relief order was recorded on July 20, 2017.
On September 28, 2017, Bayview and BONY recorded a new notice of default against the property. On December 29, 2017, Bayview and BONY recorded a new notice of trustee's sale.
PROCEDURAL HISTORY
Initial Complaint and demurrer
Appellant filed his initial complaint against respondents on April 25, 2018. The initial complaint asserted causes of action for (1) violations of the Rosenthal Fair Debt Collection Practices Act, Civil Code section 1788 et seq. (the Act); (2) violations of Civil Code sections 2924.17 and 2924, subdivision (a)(6); (3) violations of Business and Professions Code section 17200; (4) intentional infliction of emotional distress (IIED); and (5) injunctive relief pursuant to Business and Professions Code section 17200 and Code of Civil Procedure section 526.
On August 27, 2018, the trial court sustained Bayview and BONY's demurrer to the complaint with 30 days leave to amend.
First Amended Complaint (FAC)
On September 28, 2018, appellant filed his FAC against respondents for (1) violations of the Act; (2) violations of Civil Code sections 2924.17 and 2924, subdivision (a)(6); (3) violations of Business and Professions Code section 17200; (4) cancellation of instruments; (5) negligent representation; and (6) IIED. Two new causes of action for negligent representation and cancellation of instruments were added without leave of court.
In the FAC, appellant alleged that he entered the two loan transactions with AWL. He further alleged that due to financial hardship, the loans fell into default in summer 2009 and summer 2010. Appellant alleged that the ADOT, executed on November 8, 2010, "granted, assigned, conveyed and transferred all beneficial interest" under the first priority deed of trust, "but not the Note," to BONY. Appellant attached the ADOT to the FAC. Appellant also attached a letter dated June 24, 2014, by which he was informed that the mortgage servicing would be transferred to Bayview. The letter was attached to the FAC as exhibit D. Bayview informed appellant by letter dated June 30, 2014, that it was attempting to collect a debt on behalf of BONY. Appellant alleged that Bayview misrepresented to appellant the true creditor of the consumer transaction.
Appellant alleged that the mortgage servicing of the second priority loan was transferred from the previous mortgage servicer to FCI effective June 1, 2017. Appellant attached as exhibit F to the FAC FCI's notice of transfer of service dated June 7, 2017. Appellant also attached FCI's letter dated June 7, 2017, to the FAC, representing that FCI was attempting to collect a debt on behalf of the creditor, RT (exh. G). Appellant alleged that RT was not a creditor but a debt collector, and that FCI made the representation prior to the time that RT obtained a beneficial interest in the second priority loan. An ADOT transferring all beneficial interest under the second priority deed of trust to RT was executed on June 28, 2017, and was attached to the FAC as exhibit H.
FCI's September 25, 2017 letter to appellant informing appellant that if he did not make a payment on the loan by October 25, 2017, FCI would begin a foreclosure proceeding against his property, was attached to the FAC as exhibit I.
Bayview's September 28, 2017 notice of default, which was recorded against the property, was attached to the FAC as exhibit J. Appellant alleged that the notice of default falsely represented that Bayview and BONY had the legal right to proceed with a nonjudicial foreclosure.
Bayview and BONY's December 29, 2017 notice of trustee's sale, which was recorded against appellant's property, was attached to the FAC as Exhibit K. Appellant alleged that Bayview and BONY were without the legal authority to demand payment, declare a default, negotiate his debt and attempt to foreclose on his property.
In his first cause of action for violation of the Act, appellant alleged that mortgage servicers like respondents were subject to the Act, and that respondents engaged in unfair and deceptive conduct in violation of the Act. He also alleged that respondents engaged in such conduct within one year of his filing of the complaint. Appellant alleged that the Act incorporates the federal Fair Debt Collection Practices Act (FDCPA), and also alleged purported violations of the FDCPA. Appellant alleged generally that respondents misrepresented the status of the debt, mischaracterized the debt, and attempted to collect amounts they were not authorized to collect. Appellant characterized respondents' conduct as abusive, oppressive, false and misleading. Appellant characterized the foreclosure as an illegal debt collection action.
In his second cause of action for violations of Civil Code sections 2924.17 and 2924, subdivision (a)(6), appellant alleged that respondents acted in violation of the Homeowners Bill of Rights (HBOR). Appellant alleged respondents failed to comply with this section by failing to provide competent support for their authorization to proceed with a nonjudicial action against appellant's property, and that respondents were not creditors with the power to enforce the deeds of trust.
In his third cause of action for violation of Business and Professions Code section 17200, appellant alleged respondents had committed fraudulent business acts through their acts alleged in the first and second causes of action. Appellant alleged, among other things, that respondents made false representations, acted as beneficiaries and trustees without the legal authority to do so, executed false documents, and mischaracterized appellant's obligations to respondents.
In his fourth cause of action for cancellation of instruments, appellant alleged that the deeds of trust, ADOTS, and foreclosure documents should be cancelled because they were invalid with no legal effect. Appellant stated his position that the foreclosure documents were fraudulent because respondents had no authority to execute them.
In his fifth cause of action for negligent representation, appellant repeated his allegations that respondents had falsely represented themselves to be creditors of the transactions at issue, and that appellant was injured by this misrepresentation.
In his sixth cause of action for IIED, appellant alleged that it was extreme and outrageous for respondents to be attempting to collect the debt without the legal right or ability to do so. Appellant alleged that such conduct was malicious and oppressive.
In his prayer for relief, appellant sought attorney fees pursuant to the Act, an award of compensatory and punitive damages, an order compelling removal of any cloud upon appellant's title to property, and declaratory relief.
The parties' demurrers to the FAC
On October 30, 2018, Bayview and BONY filed a demurrer to the FAC. Bayview and BONY argued that appellant's FAC was based on a flawed challenge to the assignment of the security interest. They further argued that appellant lacked standing to challenge the purported defects in the trust assignments, and that he had not shown prejudice, as required. As to appellant's allegations regarding violations of the Act, Bayview and BONY argued that appellant failed to provide specific allegations regarding the conduct that violated the Act; that foreclosure activity is not "debt collection" under the Act; and that appellant's claims were time barred. Bayview and BONY pointed out that California courts had rejected any challenge to the foreclosure process based on robo-signing, and that there were no facts alleged suggesting that Bayview and BONY did not have authority to proceed with the nonjudicial foreclosure. Bayview and BONY pointed to case law indicating that any alleged wrongful conduct occurring after a borrower's default could not cause the borrower injury. Appellant had failed to allege facts showing that any instrument under attack was fraudulent or that respondents had made any false or fraudulent representations. As to his cause of action for IIED, Bayview and BONY argued that appellant failed to allege any extreme or outrageous conduct.
Bayview and BONY also filed a request for judicial notice (RJN) in connection with their demurrer. The RJN sought notice of the December 20, 2015 DOT; the February 2011 notice of trustee's sale; the June 2016 notice of default and election to sell under deed of trust; the October 2016 notice of trustee's sale; and the order granting relief from automatic stay issued by the United States Bankruptcy Court. Bayview and BONY did not seek judicial notice of the ADOT, which had already been attached as exhibit C to the FAC.
On October 31, 2018, FCI and RT filed a demurrer to the FAC. In their memorandum of points and authorities supporting the demurrer, FCI and RT argued that appellant's theory of a void assignment and split note was contrary to law and not supported by the facts as pled. FCI and RT also requested judicial notice of documents in connection with their demurrer. The documents included the second priority DOT and assignment of rents recorded December 20, 2005, and an assignment of the deed of trust recorded July 10, 2017.
Trial court decision
On November 30, 2018, the trial court granted the respondents' requests for judicial notice and sustained the respondents' demurrers. In its ruling, the trial court noted that a promissory note is a negotiable instrument that a lender may sell without notice to the borrower, and that the deed of trust is inseparable from the note it secures. (Citing Creative Ventures, LLC v. Jim Ward & Associates (2011) 195 Cal.App.4th 1430, 1445; Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 928 (Yvanova).) When such an assignment is voidable, the parties to the transaction have the sole power to ratify or void the assignment. (Citing Yvanova, at p. 936.) Relying on Yvanova, the trial court determined that appellant did not have standing to challenge any defects in the trust assignments as a matter of law.
As to appellant's cause of action for violation of the Act, the trial court noted that foreclosing on a deed of trust does not invoke the protections of the Act. (Citing Sipe v. Countrywide Bank (2010) 690 F.Supp.2d 1141, 1151.) Nor does giving notice of a foreclosure sale to a consumer constitute a "debt collection activity" under the FDCPA. (Citing Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1263 (Pfeifer).) Given the admissions by appellant in his complaint, BONY had authority to direct Bayview to foreclose on the first priority DOT, and the notice of such activity was not debt collection activity. For the same reasons, RT had authority to direct FCI to foreclose on the second priority DOT.
Regarding appellant's claims for violation of the HBOR, the court found that respondents complied with the necessary steps prior to noticing the foreclosure. Appellant had not alleged any violation of the HBOR, and furthermore, at the time appellant filed the complaint, portions of one of the statutes appellant relied on, Civil Code section 2924.17, had expired pursuant to its own statutory language.
We note that the FAC cited a former version of the statute which contained language applicable only until January 1, 2018. However, the parties have not provided briefing to this court on the expiration issue. Thus, we decline to address the expired statutory language.
As to appellant's cause of action for IIED, the trial court noted that foreclosing on a deed of trust after default is conduct that is privileged under California's nonjudicial foreclosure statutes and cannot give rise to a claim for IIED. (Citing Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 67.)
As to appellant's causes of action for cancellation of instruments and negligent representation, the trial court stated that because appellant did not seek permission from the court to state new causes of action, the demurrers to these causes of action should be sustained. (Citing People ex rel. Dept. Pub. Wks. v. Clausen (1967) 248 Cal.App.2d 770, 785; Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) In addition, appellant had not pleaded these causes of action with sufficient specificity.
As to appellant's claim of violation of Business and Professions Code section 17200, the trial court pointed out that this cause of action necessarily relied on appellant's ability to prove his other claims. Given that the demurrers were sustained to all the other causes of action, appellant's cause of action for violation of section 17200 necessarily failed.
The demurrers to the FAC were sustained without leave to amend.
A judgment of dismissal was entered on January 2, 2019. Notice of entry of judgment was mailed on January 15, 2019.
Appeal
On February 15, 2019, appellant filed his notice of appeal from the judgment of dismissal.
DISCUSSION
I. Standard of review
A demurrer tests the sufficiency of the complaint as a matter of law. Therefore, the standard of review on appeal after a judgment sustaining a demurrer is de novo. (Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 120 (Lewis).) "'"In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.]" [Citations.]' [Citation.]" (Ibid.) "We will affirm if there is any ground on which the demurrer can properly be sustained, whether or not the trial court relied on proper grounds or the defendant asserted a proper ground in the trial court proceedings. [Citation.]" (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031 (Martin).)
In ruling on a demurrer, courts accept as true material facts properly pleaded. (Yvanova, supra, 62 Cal.4th at p. 924.) Courts may also consider exhibits attached to the complaint, (Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1447 (Holland)), and matters that may be judicially noticed. (Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 210 (Tucker).) If the allegations of a complaint contradict facts appearing in judicially noticed documents or exhibits attached to the complaint, we accept the facts in the documents as true. (Ibid.)
"A trial court has discretion to sustain a demurrer with or without leave to amend. [Citation.]" (Martin, supra, 173 Cal.App.4th at p. 1031.) The appellant has the burden of showing a reasonable possibility exists that the defect can be cured by amendment. If the appellant fails to meet this burden, we affirm the judgment. (Ibid.)
II. Appellant failed to adequately allege flaws in the assignments
A. The recorded documents prevail over appellant's allegations
Appellant takes the position that the trial court was required to accept all of his allegations as true, regardless of whether attached and properly noticed documents contradicted those allegations. Appellant's position is incorrect. (Tucker, supra, 208 Cal.App.4th at p. 210.) Where appellant's allegations were contradicted by the documents properly considered by the trial court, the documents rightly took precedence. (Ibid.)
The documents showed that BONY and RT were the beneficiaries of the first and second priority loans, respectively. The first priority ADOT, which appellant attached to the FAC as exhibit C, contradicted appellant's conclusory allegation that BONY had no authority to initiate foreclosure on the property. The second priority ADOT, which appellant attached to the ADOT as exhibit H, contradicted appellant's conclusory allegation that RT had no authority to initiate foreclosure proceedings. Courts may properly take judicial notice of the existence and recording of real property records, including deeds of trust and related documents. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1367, fn. 8 (Alfaro).) In addition, courts may take judicial notice of the legal effect of such documents. (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117-1118 (Poseidon).) Appellant fails to point out any defect in the ADOTs. Because his conclusory allegations are contradicted by the recorded real property records, we assume the truth of the records.
B. Appellant lacks standing to challenge the allegedly voidable assignments
Even if appellant had pointed out a defect in the recorded assignments, he has no standing to challenge defects in assignments that are merely voidable. (Yvanova, supra, 62 Cal.4th at p. 939.) In attempting to set forth a claim based on purported defects within a voidable assignment, appellant is attempting to "assert an interest belonging solely to the parties to the assignment" rather than to himself. (Id. at p. 936.) Appellant alleged no facts suggesting that the respective assignments were void. Appellant's conclusory allegations that the respective ADOTs were invalid do not create a cause of action. (Lewis, supra, 244 Cal.App.4th at p. 120.) Because appellant's allegations assert only that the ADOTs were voidable, not void, he has no standing to challenge them.
In his reply brief on appeal, appellant notes discrepancies with the dates as to the execution of the ADOT and his first notice that RT was the new creditor on the second priority loan. He also notes that the same ADOT was executed by Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for AWL. However, MERS was not mentioned in the note. Appellant fails to cite any authority that these discrepancies render the ADOTs void, rather than merely voidable.
In his reply brief on appeal, appellant cites for the first time Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552. Because appellant raises this case for the first time in his reply brief, we need not consider it. (Trustees of Capital Wholesale Electric etc. Fund v. Shearson Lehman Brothers, Inc. (1990) 221 Cal.App.3d 617, 627 (Trustees of Capital).) However, we note that Sciarratta does not suggest that appellant had standing in this matter. Rather, in Sciarratta, the plaintiff attached to her complaint an assignment of all interest in her loan from Chase Bank to Deutsche Bank, recorded April 27, 2009. She also attached a second assignment of all interest in her loan from Chase Bank to Bank of America. The second assignment -- of the same interest -- was recorded November 9, 2009. (Sciarratta, at p. 557.) The plaintiff alleged a void assignment because "Chase, having assigned 'all beneficial interest' in Sciarratta's notes and deed of trust to Deutsche Bank in April 2009, could not assign again the same interests to Bank of America in November 2009. [Citation.]" (Id. at p. 564.) Thus, Sciarratta's allegations were not subject to demurrer as the attached recorded documents showed "the assignment to Bank of America is void, and not merely voidable. [Citations.]" (Ibid.) Appellant has not made allegations showing a void assignment. Nor do the documents attached to the FAC demonstrate a void transaction. Thus, appellant lacks the standing discussed in Yvanova and Sciarratta.
Also for the first time in his reply brief, appellant cites Bliss v. California Cooperative Producers (Cal. 1947) 181 P.2d 369, and California Uniform Commercial Code section 3302, subdivision (a)(2), as authority for the proposition that BONY and RT were not holders in due course of his debt obligations because those entities had notice that the instruments were overdue. We reiterate that points raised for the first time in a reply brief will not be considered unless good cause is shown for the failure to present them earlier. (Trustees of Capital, supra, 221 Cal.App.3d at p. 627.) This is true even when the new allegations purport to suggest a new theory after a demurrer has been sustained without leave to amend. (Ibid.) Appellant has failed to show good cause therefore we decline to consider these new allegations and authorities. (Ibid.)
C. Appellant's allegations regarding the respective notes do not salvage his claims
In the FAC, appellant alleged that the deeds of trust, but not the notes, were assigned. However, this allegation does not render the assignments voidable or void. "The deed of trust . . . is inseparable from the note it secures, and follows it even without a separate assignment. [Citations.]" (Yvanova, supra, 62 Cal.4th at p. 927; Civil Code, § 2936.) The deed of trust may be assigned multiple times over the life of the loan it secures, without notice to the borrower. (Ibid.) The current beneficiary of the deed of trust may direct a nonjudicial foreclosure, as BONY and RT did in this case after appellant defaulted on the respective loans. (Ibid.)
Appellant cites no convincing legal authority in support of his argument that assignment of the deed of trust is a nullity without a separate assignment of the note. Carpenter v. Longan (1872) 83 U.S. 271, arising out of "Colorado Territory," did not involve a nonjudicial foreclosure under the current law of this state, and we decline to consider the quoted language as applicable to the present matter. Henley v. Hotaling (1871) 41 Cal. 22, also involved irrelevant circumstances and did not concern the present issue under the current nonjudicial foreclosure statute. Nor does Seidell v. Tuxedo Land Co. (1932) 216 Cal. 165, 170 assist appellant's position. Appellant points to nothing in the case that supports his position that the ADOTs were ineffective in this matter.
Contrary to appellant's arguments, relevant authority suggests there is no requirement that the party holding the note prove ownership prior to nonjudicial foreclosure. (See Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1154). Nonjudicial foreclosure proceedings may be initiated by a "'trustee, mortgagee, or beneficiary, or any of their agents.'" The nonjudicial foreclosure statute "'does not require a beneficial interest in both the Note and the Deed of Trust to commence a non-judicial foreclosure sale.' [Citation.]" (Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th 433, 444; Civ. Code, § 2924; see also Shuster v. BAC Home Loans Servicing, LP (2012) 211 Cal.App.4th 505, 511 ["California's statutory nonjudicial foreclosure scheme . . . does not require that the foreclosing party have a beneficial interest in or physical possession of the note"].) Under these authorities, appellant's argument that respondents were required to produce separate assignments of the notes in question is insufficient to create a cause of action.
D. Respondents had authority to initiate foreclosure proceedings
The first priority DOT was assigned to BONY on November 8, 2010. Therefore BONY, as beneficiary, had authority to direct Bayview to enforce the DOT and commence foreclosure proceedings. The second priority DOT was assigned to RT on June 28, 2017. Therefore RT, as beneficiary, had authority to direct FCI to enforce the DOT and commence foreclosure proceedings. Appellant made no allegations suggesting respondents lacked authority to commence the nonjudicial foreclosure proceedings, and the documents show that they had such authority. Bearing these facts in mind, we turn to appellant's specific causes of action.
III. Appellant failed to state a cause of action
A. First cause of action for violation of the Act
The Act was enacted "to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts." (Civ. Code, § 1788.1, subd. (b).) The Act defines "debt collector" as "any person who, in the ordinary course of business, regularly, on behalf of that person or others, engages in debt collection." (§ 1788.2, subd. (c).) Mortgage lenders and mortgage servicers may, under certain circumstances, be considered debt collectors under the Act. (Davidson v. Seterus, Inc. (2018) 21 Cal.App.5th 283, 303.) However, the act of foreclosing on a mortgage loan does not constitute debt collection. (Pfeifer, supra, 211 Cal.App.4th at p. 1264 ["giving notice of a foreclosure sale to a consumer as required by the Civil Code does not constitute debt collection activity under the FDCPA"].)
The Act prohibits, among other things, the use of threats or unlawful conduct during the collection of a consumer debt. (Civ. Code, § 1788.10). It also prohibits misrepresentations in communications with the debtor. (Civ. Code, § 1788.13.)
The FAC sets forth general allegations that respondents misrepresented the status of the debt, mischaracterized the debt, and attempted to collect amounts they were not authorized to collect. However, the FAC provides no details as to any specific conduct that would violate the Act. It appears that appellant's allegations are based on purported flaws in the respective assignments, but the FAC does not point out the precise nature of any such flaws. Appellant argues that he disputed the "contents and truthfulness" of the ADOTs. He argues that the assignments were not valid. He points to Civil Code section 1788.13, subdivision (l), which prohibits any communication by a licensed collection agency to a debtor "unless the claim is actually assigned" to the agency. Appellant further argues that an assignment of the note, executed by both buyer and seller, is necessary to evidence that the debt obligations were assigned to BONY and RT. He claims that assignment of the deed of trust alone is a nullity.
As set forth above, appellant fails to adequately allege that either of the assignments at issue was flawed or invalid. The respective ADOTs served to assign all beneficial interests to BONY and RT. The ADOTs were attached to appellant's FAC, and thus were properly before the trial court. Appellant has failed to point out any misrepresentations or mischaracterizations within the documents. Appellant's conclusory, general allegations that respondents have violated the Act are insufficient to state a cause of action. (Lewis, supra, 244 Cal.App.4th at p. 120.)
Further, as set forth above, appellant has no standing to challenge the assignments of the beneficial interests in his loans. Such assignments were made by agents of the beneficiaries, and the current assignees are the proper parties to challenge any purported flaws in the assignments. (Yvanova, supra, 62 Cal.4th at p. 939.)
Finally, as set forth above, foreclosure activity is not debt collection under the Act and does not invoke the Act's statutory protections. (Pfeifer, supra, 211 Cal.App.4th at pp. 1261-1264.) Thus, giving notice of a foreclosure sale to a consumer is not actionable under the Act. (Id. at p. 1263.)
Respondents also make a convincing argument that appellant's claim was time barred under the Act, which mandates that any action be brought within one year from the date of the occurrence of the alleged violation. (Civ. Code, § 1788.30, subd. (f).) However, because appellant has failed to state an actionable violation, we decline to address this defense in detail.
The ADOTs showed that BONY and RT were the respective beneficiaries of the two DOTs at issue. There is no viable allegation that either ADOT was flawed, deceptive, invalid, or misleading. Appellant failed to allege any violation of the Act.
B. Second cause of action for violations of Civil Code sections 2924 .17 and 2924 , subdivision (a)(6)
Civil Code section 2924.17 provides that notices of default, notices of sale, and assignments of deeds of trust, among other documents, must be "accurate and complete and supported by competent and reliable evidence." (Civ. Code, § 2924.17, subd. (a).) Section 2924.17, subdivision (b) requires that a mortgage servicer "ensure that it has reviewed competent and reliable evidence to substantiate the borrower's default and the right to foreclose," among other things.
Appellant's position that he has stated a claim appears to be based on his allegations that respondents did not have authority to proceed with nonjudicial foreclosure against him. However, appellant failed to allege any facts suggesting that respondents did not have authority to proceed with the nonjudicial foreclosure. As discussed above, the ADOTs show respondents' authority to proceed with nonjudicial foreclosure, and appellant has failed to adequately allege any flaw in the ADOTs. Nor does he have standing to challenge any such flaw. Thus, this cause of action fails as a matter of law.
To the extent that appellant's claim for violation of Civil Code section 2924.17 was based on the purported robo-signing of these documents, California courts have rejected any challenge to the nonjudicial foreclosure process based on purported robo-signing. (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 814 [plaintiff lacked standing to challenge assignment of deed of trust on the ground that it was "forged or robo-signed"]; Kalnoki v. First American Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th 23, 46 [assuming, for purposes of demurrer, allegation that default declaration was "robosigned," such "robo-signing" had no bearing on the validity of the foreclosure process.])
Civil Code section 2924, subdivision (a)(6) provides:
"An entity shall not record or cause a notice of default to be recorded or otherwise initiate the foreclosure process unless it is the holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest. An agent of the holder of the beneficial interest under the mortgage or deed of trust, original trustee or substituted trustee under the deed of trust shall not record a notice of default or
otherwise commence the foreclosure process except when acting within the scope of authority designated by the holder of the beneficial interest."
Appellant argues that he alleged a violation of this statute due to flaws in the chain of title and respondents' act of misleading him into believing that they were acting on behalf of his true creditors when they were not. As set forth above, no such violations were adequately alleged. Further, the Legislature did not provide a private right of action for injunctive relief for a violation of Civil Code section 2924, subdivision (a)(6). (Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 158-159). Thus, this section does not appear to provide any enforceable private right.
For these reasons, appellant's second cause of action for violations of Civil Code sections 2924.17 and 2924, subdivision (a)(6) fails as a matter of law.
C. Third cause of action for violation of Business and Professions Code section 17200 et seq.
Business and Professions Code section 17200 et seq. (section 17200 or "unfair competition law") proscribes "unfair competition," which is defined as "any unlawful, unfair or fraudulent business act or practice." (Bus. & Prof. Code, § 17200.) Among other things, section 17200 covers injuries to consumers. The statute "'borrows' violations of other laws and treats them as unlawful practices' that the unfair competition law makes independently actionable. [Citations.]" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) However, section 17200 also "makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law." Section 17200 "establishes three varieties of unfair competition -- acts or practices which are unlawful, or unfair, or fraudulent." (Cel-Tech, at p. 180.)
In support of his claim for violation of the unfair competition law, appellant claims that he sufficiently alleged that respondents were engaging in acts that were unfair, likely to deceive, and unlawful. He again asserts that respondents were demanding payment for a debt that was not owed to them and acting as beneficiaries and mortgage servicers without the legal authority to do so. Appellant also argues that his allegations for violation of the Act serve to create a violation of the unfair competition law as well.
Appellant's Business and Professions Code section 17200 claim fails for the same reasons that his previous causes of action failed. He did not adequately allege that the debt was not owed to respondents, or that they did not have the legal authority to commence nonjudicial foreclosure. Nor did he allege any violation of the Act. Thus, appellant's section 17200 cause of action must fail.
D. Fourth and fifth causes of action for cancellation of instruments and negligent representation
Civil Code section 3412 permits cancellation of a void or voidable written instrument when there is "a reasonable apprehension that if left outstanding it may cause serious injury." Appellant argues that his cause of action for cancellation of instruments was supported by his allegations that the ADOTs and foreclosure documents were executed by entities without the authorization or legal right to do so, and were therefore void. In sum, appellant's cancellation of instruments cause of action is again based on the allegations that respondents were not his true creditors. As set forth above, this allegation has not been adequately pled. The documents, which were properly reviewed as part of the decision on demurrer, showed that respondents had authority to proceed with a nonjudicial foreclosure action on the property. Further, appellant lacked standing to challenge the ADOTs.
As to his cause of action for negligent representation, appellant sets forth the elements of this cause of action as follows: (1) defendant made a misrepresentation as to a past or existing material fact; (2) defendant made the misrepresentation without any reasonable grounds for believing it to be true; (3) the representation was made with the intent of inducing the plaintiff to rely upon it; (4) plaintiff was unaware of the falsity of the representation and acted in justified reliance upon the representation; and (5) damages. (Citing Civ. Code, § 1710.) Because a negligent misrepresentation is a type of fraud or deceit, it must be pled with specificity. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) This specificity requirement means that an appellant must allege the names of the persons who purportedly made the allegedly false misrepresentations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Ibid.)
Appellant's allegations do not meet these requirements. Appellant asserts that respondents knew they were not acting on behalf of the true beneficiary of appellant's debt obligations but continued to attempt to collect payment anyway by commencing nonjudicial foreclosure proceedings. Appellant further asserts that respondents falsely misrepresented themselves as creditors when they were not. As set forth above, these general, conclusory allegations conflict with the documentary evidence attached to the FAC and cannot prevail.
E. Sixth cause of action for IIED
The tort of IIED requires a plaintiff to show: (1) extreme and outrageous conduct by the defendant carried out with the intent of causing, or reckless disregard of the probability of causing, severe emotional distress to the plaintiff; (2) the plaintiff actually suffered severe or extreme emotional distress; and (3) the outrageous conduct was the actual and proximate cause of the emotional distress. (Ross v. Creel Printing & Publishing Co. (2002) 100 Cal.App.4th 736, 744-745.) The conduct in question "must be so extreme as to exceed all bounds of that usually tolerated in a civilized society. [Citation.]" (Trerice v. Blue Cross of Cal. (1989) 209 Cal.App.3d 878, 883.) While the outrageousness of a defendant's conduct is usually a question of fact, the court may determine whether the defendant's conduct may reasonably be regarded as so extreme as to permit recovery. (Ibid.) "A party is not subject to liability for infliction of emotional distress when it has merely pursued its own economic interests and properly asserted its legal rights. [Citations.]" (Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 67.)
Appellant has failed to allege the kind of extreme and outrageous conduct required to support a cause of action for IIED. "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. [Citations.]" (Sierra-Bay Fed. Land Bank Assn. v. Superior Court (1991) 227 Cal.App.3d 318, 334.) The facts alleged show no extreme or outrageous conduct, and the trial court properly sustained the demurrer to this cause of action.
IV. The trial court did not err in granting respondents' requests for judicial notice
Appellant appears to concede that a trial court may take judicial notice of recorded documents, however, he argues that the trial court was only permitted to take judicial notice of the recording of the documents, and could not take judicial notice of the truth of the matters stated in the documents. (Citing People v. Long (1970) 7 Cal.App.3d 586, 591.) Appellant argues that he disputed the contents of the documents. Appellant cites Poseidon, supra, 152 Cal.App.4th 1106 as support for his position that the truthfulness of the contents of the recorded documents remained subject to dispute.
Courts may take judicial notice of recorded real property records. (Alfaro, supra, 171 Cal.App.4th at pp. 1367, fn. 8, 1382; Cal-American Income Property Fund II v. County of Los Angeles (1989) 208 Cal.App.3d 109, 112, fn. 2 (Cal-American).) The trial court may take judicial notice of recorded documents "'even if [they negate] an express allegation of the pleading.' [Citation.]" (Alfaro, at p. 1382.) While Poseidon confirms that a trial court may not take judicial notice of facts stated within a recorded deed, the case confirms that courts may take judicial notice of the effect of such documents. (Poseidon, supra, 152 Cal.App.4th at pp. 1117-1118.) In referring to an assignment, the Poseidon court stated, "[I]ts legal effect could not be clearer. It is not reasonably subject to dispute that, whatever else occurred, Poseidon gave up and no longer held the beneficial interest under the deed of trust." (Id. at p. 1118.) The Poseidon court rejected the notion that a court may not take judicial notice of the effect of such recorded documents. (Ibid.)
Respondents point out that they never requested judicial notice of the ADOTs, as these documents were attached as exhibits to the FAC. The inclusion of these documents as part of the FAC rendered their inclusion in the respective requests for judicial notice unnecessary. The trial court properly considered the existence and the effect of these recorded documents. (Poseidon, supra, 152 Cal.App.4th at pp. 1117-1118.)
Although RT and FCI requested judicial notice of the second priority ADOT, these respondents pointed out to the trial court that the ADOT was also attached as an exhibit to the FAC. Thus, it was properly considered by the trial court.
Respondents BONY and Bayview requested that the court take judicial notice of the following recorded documents: the first priority DOT, the notices of sale, the 2016 notice of default, and the relief order. Respondents RT and FCI also requested that the court take judicial notice of recorded documents, including the second priority DOT and the ADOT of the second priority loan. For the reasons set forth above, appellant has failed to show that the trial court erred in granting respondents' requests for judicial notice of the existence and effect of these recorded real property records. (Alfaro, supra, 171 Cal.App.4th at pp. 1367, fn. 8, 1382; Cal-American, supra, 208 Cal.App.3d at p. 112, fn. 2.)
V. The trial court did not abuse its discretion in denying appellant leave to amend
If it is reasonably possible that a plaintiff can cure the flaws in a pleading by amendment, a trial court abuses its discretion by not granting the plaintiff leave to amend. However, the plaintiff has the burden of proving the possibility that the flaws will be cured by amendment. (Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 78-79.) A demurrer may be sustained without leave to amend if the plaintiff has unsuccessfully attempted to cure the defects. (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 985.) Further, "[W]here the nature of the plaintiff's claim is clear, and under substantive law no liability exists, a court should deny leave to amend because no amendment could change the result." (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459-460.)
Here, appellant was granted an opportunity to amend his complaint and cure its deficiencies. Despite this opportunity, appellant failed to state any cause of action against respondents. Appellant now argues that he sufficiently alleged a cause of action for wrongful foreclosure, thus he should have been given an opportunity to amend his complaint to state this cause of action. However, appellant's proposed new cause of action for wrongful foreclosure is based on the same theory as his previous allegations-- in short, that respondents did not have the authority to proceed with the nonjudicial foreclosure. Appellant fails to draw the court's attention to any new facts that would render this new theory viable. Appellant bears the burden of demonstrating in what manner he can amend his complaint, and how such an amendment would change the legal effect of his pleading. (In re Social Services Payment Cases (2008) 166 Cal.App.4th 1249, 1274.) Appellant has not shown that he can amend his complaint to allege any viable claim for relief. Accordingly, he has failed to meet his burden of showing that the trial court abused its discretion in denying leave to amend.
VI. Attorney fees
The issue of attorney fees is not properly before us, and we decline to address the merits of appellant's arguments on this issue.
The judgment of dismissal in this matter was entered on January 2, 2019, and did not include any award of attorneys' fees. The notice of appeal was filed on February 15, 2019.
On March 15, 2019, respondents BONY and Bayview filed a motion for an award of attorney fees. Thereafter, the trial court entered an order granting the motion, and an amended judgment incorporating the fee award. Appellant has failed to allege, or include in the record, any indication that he filed a notice of appeal from the subsequent order of attorney fees or the amended judgment. Under the circumstances, we have no jurisdiction to consider any challenge to the award of attorney fees.
DISPOSITION
The judgment is affirmed. Respondents are awarded their costs of appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
CHAVEZ We concur: /s/_________, P. J.
LUI /s/_________, J.
ASHMANN-GERST