Notice of Demurrer; Demurrer To Complaint; Memorandum of Points & Authorities

Motion

Cal. Super. - 6th Dist.March 3, 2017

«w w 1 ] S N n n \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MARK JOSEPH KENNEY (State Bar No. 87345) mjk@severson.com JASON M. RICHARDSON (State Bar No. 250916) jmr@severson.com SEVERSON & WERSON A Professional Corporation One Embarcadero Center, Suite 2600 San Francisco, California 94111 Telephone: (415) 398-3344 Facsimile: (415) 956-0439 Attorneys for Defendant BANK OF AMERICA, N.A., as successor in interest to LASALLE BANK, N.A. SUPERIOR COURT OF CALIFORNIA COUNTY OF MONTEREY JOHN VITALICH,an individual; MARIA Case No. 17CV000239 VITALICH,an individual, BANK OF AMERICA, N.A.’S NOTICE OF Plaintiff, DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF Vs. POINTS AND AUTHORITIES JP MORGAN CHASE BANK, N.A; Date: October 20, 2017 LASALLE BANK N.A.; MTC FINANCIAL Time: 9:00 am. INC., dba TRUSTEE CORPS; MORTGAGE Crtrm.: 15 ELECTRONIC REGISTRATION SYSTEMS; AND DOES 1 THROUGH 10, INCLUSIVE, Defendants. TO PLAINTIFFS AND THEIR ATTORNEY(S) OF RECORD: PLEASE TAKE NOTICEthat on Friday, October 20, 2017 at 9:00 a.m., or as soon thereafter as counsel may be heard in Department 15 of the Monterey County Superior Court, located at 1200 Aguajito Road, Monterey, CA 93940, Defendant BANK OF AMERICA, N.A. as successor in interest to LaSalle Bank (sued as “LaSalle Bank, N.A.) (hereinafter, “Bank of America”) will and hereby does demur to Plaintiffs’ Complaint. The demurrer is made pursuant to Code of Civil Procedure section 430.10(e) on the grounds that the complaint fails to state facts sufficient to constitute a cause of action. 70000.3118/10851595.1 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES This demurrer is based upon this Notice, the accompanying Demurrer, the accompanying Memorandum of Points and Authorities, the accompanying Request for Judicial Notice, the pleadings and papers on file in this action, and upon such further evidence, both oral and documentary, as may be offered at the time ofthe hearing. DATED: August 31,2017 SEVERSON & WERSON A Professional Corporation * mr Cope Yoo ason M. Richardson Attorneys for Defendant BANK OF AMERICA, N.A,, as successor in interest to LASALLE BANK, N.A. 70000.3118/10851595.1 2 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 0 N a A N \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRER Defendant Bank of America, N.A. as successor in interest to LaSalle Bank, N.A. (“Bank of America”) demurs to the Complaint (“complaint”) filed by Plaintiffs John Vitalich and Maria Vitalich (“Plaintiffs”) pursuant to California Code of Civil Procedure Section 430.10(e) as follows: 1. On groundsthat the first cause of action of the complaint fails to state facts sufficient to state a cause of action for wrongful foreclosure because this claim rests on foreclosure delay theories that fail to articulate a basis on which to challenge the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(e).) 2. On grounds that the first cause of action of the complaint fails to state facts sufficient to state a cause of action for wrongful foreclosure because Bank of America, as successor in interest to LaSalle Bank, N.A., had no role whatsoever in the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(e).) 3. On groundsthat the second cause of action of the complaint fails to state facts sufficient to state a cause of action for “violation of Civil Code of Procedure [sic] § 2924(a)(6)” because this claim rests on foreclosure delay theories that fail to articulate a basis on which to challenge the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(e).) 4. On grounds that the second cause of action of the complaintfails to state facts sufficient to state a cause of action for “violation of Civil Code of Procedure [sic] § 2924(a)(6)” because Bank of America, as successor in interest to LaSalle Bank, N.A., had no role whatsoever in the alleged conduct that is the basis for this attempted claim. (Cal. Code Civ. Proc. § 430.10(e).) 5. On grounds that the third cause of action of the complaint fails to state facts sufficient to state a cause of action for violation of Cal. Civ. Code 2924.17 because this claim rests on foreclosure delay theories that fail to articulate a basis on which to challenge the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(e).) 6. On grounds that the third cause of action of the complaint fails to state facts sufficient to state a cause of action for violation of Cal. Civ. Code 2924.17 because Bank of 70000.3118/10851595.1 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES O o 0 ~ ~ O N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 oF 28 America, as successorin interest to LaSalle Bank, N.A., had no role whatsoeverin the alleged conductthat is the basis for this attempted claim. (Cal. Code Civ. Proc. § 430.10(¢).) fe On grounds that the fourth cause of action of the complaint fails to state facts sufficient to state a cause of action for violation of California Bus. & Prof. Code Sections 17200 et seq because this claim rests on foreclosure delay theories that fail to articulate a basis on which to challenge the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(¢).) 8. On grounds that the fourth cause of action of the complaint fails to state facts sufficient to state a cause of action for violation of California Bus. & Prof. Code Sections 17200 et seq because Bank of America, as successor in interest to LaSalle Bank, N.A., had no role whatsoeverin the alleged conductthat is the basis for this attempted claim. (Cal. Code Civ. Proc. § 430.10(e).) 9. On groundsthat the fifth cause of action of the complaint fails to state facts sufficient to state a cause of action for violation of the implied covenant of good faith and fair dealing because this claim rests on foreclosure delay theories that fail to articulate a basis on which to challenge the subject foreclosure sale. (Cal. Code Civ. Proc. § 430.10(e).) 10. On grounds that the fifth cause of action of the complaintfails to state facts sufficient to state a cause of action for violation of the implied covenant of good faith and fair dealing because Bank of America, as successor in interest to LaSalle Bank, N.A., had no role whatsoeverin the alleged conduct that is the basis for this attempted claim. (Cal. Code Civ. Proc. § 430.10(e).) DATED: August 31,2017 SEVERSON & WERSON A Professional Corporation “ Jason M. Richardson Attorneys for Defendant BANK OF AMERICA, N.A,, as successorin interest to LASALLE BANK, N.A. 70000.3118/10851595.1 2 BANK OF AMERICA, N.A.”S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES E N ~ N Y W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In response to this nonjudicial foreclosure following their failure to repay a $3.15 million loan, Plaintiffs have broughtthis lawsuit against defendants who foreclosed on the property securing that loan, MTC Financial and JP Morgan Chase. For reasons that are entirely unclear, they also name as a defendant La Salle Bank, N.A. As described below, neither LaSalle Bank nor its successorin interest Bank of America had any interest in the property securing the loan that Plaintiffs failed to repay. Nor did LaSalle or Bank of America conduct the foreclosure sale that Plaintiffs seek to challenge through this lawsuit. As described below, Plaintiffs’ allegations fail to state a claim against Bank of America as successorin interest to LaSalle — both because the allegations rest on thoroughly discredited foreclosure delay theories, and also because neither Bank of America nor LaSalle are responsible for any ofthe alleged conduct described in Plaintiffs’ Complaint. According, Bank of America requests that this Court sustain the present demurrer in its entirety and without leave to amend, dismissing this Action against it with prejudice. II. STANDARDS GOVERNING THIS MOTION General demurrer is appropriate where “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Cal. Code Civ. Proc., § 430.10(e).) When a demurrer attacks a specific cause of action, it must be determined whether that cause of action states a claim for which relief can be granted. (Warren v. Atchison, T & S.F. Ry. Co. (1971) 19 Cal.App.3d 24, 40- 41.) If no such claim for relief can be made, a court must sustain the demurrer with respect to that cause of action and any related cause of action that rests upon its allegations. (Western Title Ins. Co. v. Bartolacelli (1954) 124 Cal.App.2d 690, 694.) To determine whether a particular cause of action is sufficiently pleaded, the court must accept as true “all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Hood v. Hacienda La Puente Unified Sch. Dist. (1998) 65 Cal.App.4th 435, 438.) The court must also accept as true all matters subject to judicial notice or incorporated by 70000.3118/10851595.1 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 reference into the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) The court, however, need not accept as true statements that are inconsistent with other allegations in the complaint or in the plaintiff’s prior pleadings. (See Morris Plan Co. v. State (1946) 73 Cal.App.2d 415,425.) The court may, in its discretion, sustain the demurrer without leave to amend if an amendment will not resolve the inadequacy of the complaint’s allegations. (Heckendorn v. City of San Marino (1986) 42 Cal. 3d 481, 486.) If a demurrer successfully demonstrates that a pleading’s allegations are insufficient to state a cause of action, the claimant bears the burden of showing that all defects can be cured by amendment. (Association ofCmty Orgs. for Reform Now v. Dep't ofIndus. Relations (1995) 41 Cal.App.4th 298, 302.) Leave to amend is properly denied where judicially noticed or incorporated facts or documents show that a plaintiff cannot make or should be estopped from making the necessary amendments. (Furia v. Helm (2003) 111 Cal.App.4th 945, 958-59.) III. FACTS AND PROCEDURAL HISTORY As noted above, a demurrer is based on those matters alleged in the operative complaint and those matters properly subject to judicial notice. The facts alleged in this complaint and subject to judicial notice are as follows: A. Plaintiffs’ Default on a $3.15 Million Loan that Bank of America had No Connection to. This case relates to Plaintiffs’ interest in real property located at 601 Belavida Road, Monterey, California 93940 (“the Subject Property”), In July of 2007 Plaintiffs obtained a loan in the amount of $3,150,000 from Washington Mutual Bank secured by a deed of trust to the Subject Property. (Request for Judicial Notice in Support of Demurrer to Complaint (“RJN”), Exhibit A; Complaint (“Compl.”), 97 14-15.) As the recorded deed of trust confirms, this loan was made by Washington Mutual. The loan’s trustee was California Reconveyance Company. (/d.) Neither Bank of America nor LaSalle Bank had any interest in this loan whatsoever. (/d.) The trustee for this loan was substituted twice since Plaintiffs originally acquired the loan, with Quality Loan Service becoming trustee in May of 2008, and with defendant MTC Financial 70000.3118/10851595.1 2 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES O O o w 3 O N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 becoming trustee in February of 2014. (RIN, Exs. B and C.) At no time was Bank of America or LaSalle Bank ever substituted as Trustee for this loan. Beneficial interest in the loan was also transferred, with JP Morgan Chase Bank, N.A. obtaining beneficial interest in the loan. (/d., Ex. D.) At no time did Bank of America or LaSalle Bank ever hold any interest in this loan secured by the Subject Property. Plaintiffs failed to repay their $3.15 million loan. In September of 2016 the loan’s trustee issued to Plaintiffs and recorded in the Monterey County Recorder’s Office a Notice of Default. (RIN, Ex. E.) This Notice of Default informed Plaintiffs that they were $4,675,261.72 in default on their loan secured by the Subject Property and advised them of the consequences of failure to cure this loan deficiency. (Id.) This was issued by the loan’s trustee, MTC Financial Inc., on behalf of the loan’s beneficiary, JP Morgan Chase Bank. (/d.) Neither Bank of America nor LaSalle Bank issued, recorded, or had any association with the Notice of Default. (/d.) Plaintiffs failed to cure their $4,675,261.72 loan deficiency in the months following the Notice of Default and a Notice of Trustee’s Sale was issued and recorded in December of 2016. (RIN, Ex. F.) Eventually, the Subject Property was sold at a trustee’s sale, conducted by MTC Financial on behalf of the loan’s beneficiary, JP Morgan Chase Bank. (RIN, Ex. G.) In response to this nonjudicial foreclosure following their failure to repay a $3.15 million loan, Plaintiffs have brought this lawsuit against defendants including MTC Financial and JP Morgan Chase. For reasons that are entirely unclear, they also name as a defendant La Salle Bank, N.A. B. Plaintiffs’ Allegations in this Case. Plaintiffs’ Complaint attempts to allege five separate causes of action “against all named defendants” for (1) wrongful foreclosure; (2) for violation of Civil Code of Procedure [sic] § 2924(a)(6)”; (3) for “violation of Cal. Civ. Code 2924.17; (4) for violation of California Bus. & Prof. Code Sections 17200 et seq.; and (5) for violation of the implied covenant of good faith and fair dealing. Plaintiffs seek to assert these claims against their loan’s beneficiary, their loan’s trustee and, inexplicably, against LaSalle Bank, N.A. — an entity that never serviced or held any 70000.3118/10851595.1 3 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 interest in the loan whatsoever. Though the allegations on which these claims rest are far from a modelofclarity, the claims appear to rest on two basic categories of allegations. First, Plaintiffs assert that those defendants who did foreclose on the Subject Property did not physically produce the original Note containing their loan terms. At paragraph 31 Plaintiffs allege that those entities collecting on their unpaid $3.15 loan “must prove and certify...actual physical possession of the Note.” (See Compl., ]31; 80.) Second, Plaintiffs seek to allege that a transfer of interest pursuant to a pooling and servicing agreement that they were not parties to pursuant to the loan’s securitization was untimely conducted. Though Plaintiffs do not allege that they were parties to this pooling and servicing agreement, or that it affected their own payment obligations in any way, the nonetheless seek to conclude that an untimely assignment ofinterest violated such an agreement between the loan’s beneficiary and servicer (neither of whom are Bank of America or LaSalle) and that this therefore relieved them of their obligations to make loan payments or invalidated the resulting foreclosure. (See Compl., 1] 36-71.) These allegations fail to state a claim against any defendant. Furthermore, they come nowhere near stating a cause of action against LaSalle Bank’s successor in interest, Bank of America, which had no connection whatsoever to the loan itself or to the foreclosure sale following Plaintiffs’ default. IV. ARGUMENT A. Plaintiffs’ Claims Rest on thoroughly Discredited Foreclosure Delay Theories. As an initial matter Bank of America emphasizes that the thoroughly discredited foreclosure delay theories that Plaintiffs attempt to assert do not provide any basis on which to challenge the nonjudicial foreclosure sale that followed their default in 2016. 1. The Entities that Did Foreclose Were not Required to ‘Produce the Note.’ Plaintiffs attempt to assert that the various defendants who foreclosed on the Subject Property following their default are not in physical possession of the promissory note is not a basis on which to challenge the February 2017 foreclosure at issue in this case. (See Compl., 31; 80.) 70000.3118/10851595.1 4 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES N y o o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This well-worn theory has been unequivocally rejected by California courts. (Debrunner v. Deutsche Bank Nat'l Trust Co. (2012) 204 Cal.App.4th 433, 440-41.) In Debrunner, the Court of Appeal addressed a borrower plaintiff's argumentthat “no foreclosure of a deed of trust is valid unless the beneficiary is in possession of the underlying promissory note.” The court unequivocally rejected this argument, emphasizing that “[t]he procedures to be followed in a nonjudicial foreclosure are governed by sections 2924 through 2924k, which do not require that the note be in the possession of the party initiating the foreclosure.” (Id. at 440.) The court continued to explain, “[n]otably, section 2924, subdivision (a)(1), permits a notice of default to be filed by the trustee, mortgagee, or beneficiary, or any oftheir authorized agents. The provision does not mandate physical possession of the underlying promissory note in order for this initiation of foreclosure to be valid.” (/d. (internal quotations omitted).) Insofar as Plaintiffs seek to rest any of his claims on this allegation, such attempts fail as a matter of law. 2s Plaintiffs Cannot Sue under a Pooling and Servicing Agreement they were not Parties to that Had no Effect on their Loan or Payment Obligations. Plaintiffs’ attempt to allege that a pooling and servicing agreement pursuant to the loan’s securitization was violated by an untimely assignment ofinterest is similarly defective. First, Plaintiffs cannot sue under such a pooling and servicing agreement because they do not supply the agreement. If an action is founded on a written contract, “the terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference.” (Otword v. Southern P. Transp. Co. (1985) 166 Cal. App. 3d 452, 458) Plaintiffs here fail to set forth the terms ofthis apparently written contract, which they believe was purportedly violated. Accordingly, they cannot state a claim under it. Second, and more fundamentally, Plaintiffs’ claim would fail even if they had supplied the agreement because Plaintiffs cannot sue under the PSA as a stranger to it. As the California Court of Appeal has explained: “As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [borrower] lacks standing to enforce any agreements, including the investmenttrust's pooling and servicing agreement, relating to such transactions.” (Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal. App. 4th 70000.3118/10851595.1 5 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 497,515.) “To the extent Plaintiff relies on violations of the PSA or any other agreements among third parties, Plaintiff's claim fails. As this Court has often explained, plaintiffs who are not parties to PSAs lack standing to challenge that aspect ofthe securitization process’s validity.” (Subramani v. Wells Fargo Bank N.A., C 13-1605 SC, 2013 WL 5913789 (N.D. Cal. Oct. 31, 2013).) To the extent any split of authority may have previously existed as to this issue, recent and binding California Court of Appeal decisions have put the issue to rest. Last year the California Court of Appeal explicitly rejected exactly the theory Plaintiffs here attempt to assert. (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal. App. 4th 808, 811.) In the Saterbak case — as here — the plaintiff “contend[ed] the assignment was void under the PSA because MERS did not assign the DOT to the 2007-AR7 trust until years after the closing date.” (Id. at 815) The Court of Appeal expressly rejected the borrower’s attempt to challenge foreclosure on such grounds. The Saterbak court emphasized that the borrower seeking to bring claims under the purported pooling and servicing agreement “lacks standing to pursue these theories.” (Id.) Furthermore, the court in Saterbak stressed that even if the borrower had standing (and, like the borrowersin this case, she did not), and even assuming such a defect had existed in the timing of an assignment “such an assignment is merely voidable” rather than void, and would therefore fail to provide a legal basis on which to challenge foreclosure following the borrower’s own default. (Id. at *4.) Plaintiffs’ claim here fail for this reason as well. More recently still, the Court of Appeal fully and finally put this issue to rest in a decision published just months ago. In the Yhudai decision, the Court of Appeal explained that a borrower cannot state a claim “on the ground that an assignmentto the foreclosing party bore defects” that allegedly render the assignment void. (Yhudai v. Impac Funding Corp. (2016) 1 Cal. App. 5th 1252, 1257-1259.) The court admonished that the prior line of authority suggesting otherwise “has not only been reversed, but soundly and overwhelmingly rejected.” (/d.) The Glaski line of authority — including the Yvanova case cited by Plaintiffs in the Complaintitself— does nothing to change this result. (See Compl., 9 67-69)(citing to and relying on Yvanova v. New Century Mortg. Corp. (2016) 62 Cal. 4th 919, 929.) In Yvanova, the 70000.3118/10851595.1 6 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 California Supreme Court reaffirmed the general rule cited in the opening memorandum here that a defaulted borrower cannot raise an objection to the assignment of the deed of trust. Yvanova, 62 Cal.4th at 927. The court carved out one very narrow exception to the general rule that a borrower lacks standing to challenge an entity's authority to foreclose. The Court held that a borrower- claimant does not lack standing to sue for wrongful foreclosure to contest the authority of the foreclosing entity if (1) the trustee’s sale has been completed and (2) the borrower properly alleges that the assignment is void; not merely voidable. See id. at 924. The court in Yvanova was careful to limit its holding regarding this second prong. Significantly, the Court in Yvanova expressly declined to determine whether an allegedly untimely assignment ofinterest rendered a foreclosure void, or merely voidable. Id. at 943. Unlike a voidable transaction, a void one cannot be ratified or validated by the parties to it even if they so desire. Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal. App. 4th 808, 815 (2016) When this issue was subsequently addressed by California courts those courts expressly determined that such a purportedly untimely assignment would be only voidable, as opposed to void. See Saterbak, 245 Cal. App. 4th at 815 (“We conclude such an assignmentis merely voidable...Consequently, Saterbak lacks standing to challenge alleged defects in the MERS assignment of the DOT to the 2007-AR7 trust.) As the California Court of Appeal recently explained “a postclosing assignment of a loan to an investment trust that violates the terms of the trust renders the assignment voidable, not void, under New York law.” Yhudai v. Impac Funding Corp., 1 Cal. App. 5th 1252, 1259 (2016) “[A]n assignment that is merely voidable, [rather than void], does not support a wrongful foreclosure action.” Id., at 1256. The court admonished that the line of authority suggesting that allegedly defective assignments are void rather than voidable “has not only been reversed, but soundly and overwhelmingly rejected.” (/d.) In the Kalnoki decision — which is both recent and binding case law — the Court of Appeal once again expressly rejected the Plaintiffs’ suggested interpretation of Yvanova and their suggested application ofNew York trust law to an agreement they are strangers to. (Kalrnoki v. First Am. Tr. Servicing Sols., LLC, (2017) 8 Cal. App. 5th 23 at 43.) As the Kalnoki Court explained when referring to the Yvanova decision, [t]he Supreme Court expressed no opinion as to 70000.3118/10851595.1 7 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES S O 0 N N 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 whether, under New York law, an untimely assignment to a securitized trust made after the trust's closing date is void or merely voidable.” Kalnoki 8 Cal. App. 5th at 43. The court in Kalnoki explained: “Because any alleged irregularities in the securitization process are merely voidable at the securitized trust beneficiary's behest, and the Kalnokis are not beneficiaries of the Bear Stearns securitized trust, they lack standing to challenge the Assignment on such grounds.” Id. Simply stated, Plaintiffs are attempting to challenge a foreclosure sale on grounds that an assignment violated a pooling and servicing agreement to which they were not parties, and which had no effect at all on their rights and obligations concerning the loan or the Subject Property. Such allegations do not provide a basis on which to challenge the nonjudicial foreclosure sale following their $4,675,261.72 default. B. Plaintiffs’ Allegations Have Nothing to do with Bank of America or LaSalle. Even if Plaintiffs had articulated an actionable theory on which to challenge the recent foreclosure sale (and they have not), their claims would nonetheless fail as asserted against the moving Defendant, Bank of America. Neither Bank of America nor its predecessor in interest, LaSalle Bank had any legal interest in the loan or any connection to the foreclosure sale that followed Plaintiffs’ default. Bank of America was not the loan’s trustee. The loan’s original trustee was California Reconveyance Corp. (See RIN, Ex. A atp. 2, 1D.) The trustee for this loan was substituted twice since Plaintiffs originally acquired the loan, with Quality Loan Service becoming trustee in May of 2008, and with defendant MTC Financial becoming trustee in February of 2014. (RJN, Exs. B and C.) At no time was Bank of America or LaSalle Bank ever substituted as Trustee for this loan. Nor was Bank of America the original lender. (See RIN, Ex. Ap.1,§C.) Nor was Bank of America the assigned beneficiary on whose behalf the challenged foreclosure sale occurred last year. Rather, after the loan was made, beneficial interest in it was transferred to JP Morgan Chase Bank, N.A. (/d., Ex. D.) When the foreclosure sale took place last year the property was sold to the beneficiary, JP Morgan Chase with the foreclosure sale completed by the loan’s trustee, MTC Financial. (RJN, 70000.3118/10851595.1 8 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ex. G)) At no time did Bank of America or LaSalle Bank ever hold any interest in this loan secured by the Subject Property. Accordingly, even if Plaintiffs’ claims rested on valid theories (and they do not) these claims and the foreclosure at issue would have nothing to do with LaSalle Bank or its successor in interest Bank of America. These claims would therefore remain subject to dismissal. V. CONCLUSION Where the nature of a plaintiff’s claim is clear, but under substantive law no liability exists, leave to amend should be denied, for no amendment could change the result.” (Tyco Indus. v. Superior Court (1985) 164 Cal.App.3d 148, 153.) It is the plaintiff's burden to show that such amendment could cure the complaint’s defects. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) Here, not only do Plaintiffs’ allegations fail to state a claim against those defendant who did foreclose on the Subject Property but, more significantly for purposes of leave to amend, Plaintiffs’ allegations have nothing to do with the moving Defendant, Bank of America, N.A. Plaintiffs will not be able to meet their burden of demonstrating that these claims can be cured through amendment. Accordingly Bank of America respectfully requests that this Court sustain the present demurrer without leave to amend, dismissing this Action against it with prejudice. DATED: August 31,2017 SEVERSON & WERSON A Professional Corporation Jason M. Richardson Attorneys for Defendant BANK OF AMERICA, N.A., as successor in interest to LASALLE BANK, N.A. 70000.3118/10851595.1 9 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE At the time ofservice, I was over 18 years of age and not a party to this action. I am employed in the County of San Francisco, State of California. My business address is One Embarcadero Center, Suite 2600, San Francisco, CA 94111. On August 31, 2017, I served true copies of the following document(s): BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES on the interested parties in this action as follows: Patricia Rodriguez Esq., SBN 270639 Tele: (626) 888-5206 RODRIGUEZ LAW GROUP, INC. Fax: (626) 282-0522 1492 W. Colorado Blvd., Suite 120 Pasadena, CA 91105 Attorneyfor Plaintiffs John Vitalich & Maria Vitalich BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Severson & Werson's practice for collecting and processing correspondence for mailing. On the same day that the correspondenceis placed for collection and mailing,it is deposited in the ordinary course of business with the United States Postal Service,in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on August 31, 2017, at San Francisco, California. Claudia O. Perez 70000.3118/10851595.1 10 BANK OF AMERICA, N.A.’S NOTICE OF DEMURRER; DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES