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Wilson v. Irwin

COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
Dec 7, 2017
H039985 (Cal. Ct. App. Dec. 7, 2017)

Opinion

H039985

12-07-2017

JEFFREY MERRITT WILSON et al., Cross-complainants and Appellants, v. THOMAS C. IRWIN et al., Cross-defendants and Respondents.


NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Benito County Super. Ct. No. CU-11-00119)

Cross-complainant Jeffrey Merritt Wilson defaulted on a loan secured by property he owned on Ricardo Drive in Aromas, and his lender began nonjudicial foreclosure proceedings. One week before the scheduled trustee's sale, Wilson conveyed a half interest in the property to cross-complainant Teresa J. Moore, the "business consultant" who advised him on his purchase and financing of the property. A year later, and five years after Wilson bought the property, Caltrans sued to condemn a portion of it for a highway improvement project. Wilson and Moore cross-complained against the couple who sold Wilson the property, his original and current mortgage lenders, his current loan servicer, and various other entities. The trial court sustained demurrers to the second amended cross-complaint (SACC) without leave to amend.

On appeal from the ensuing judgment of dismissal, Wilson and Moore contend that the court erred in failing to consider the SACC's allegations in the light most favorable to them and abused its discretion in denying leave to amend. We affirm.

I. Factual Background

On appeal from the sustaining of a demurrer, we take the facts from the operative and earlier complaints, their exhibits, and matters judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank); Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1627 (Dodd); Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.)

Wilson bought the Ricardo Drive property from cross-defendants Thomas and Mary Irwin in 2006. To finance the $970,000 transaction, he obtained a $776,000 loan from Commitment Lending (Commitment). The loan was evidenced by a promissory note secured by a deed of trust on the property. The deed of trust named Wilson as the borrower, Commitment as the lender, First American Title Company (First American) as the trustee, and Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary "solely as a nominee for Lender and Lender's successors and assigns."

The note reflected Wilson's "understand[ing] that the Lender may transfer this Note." The deed of trust similarly provided that "[t]he Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower." Wilson's loan was sold to Chevy Chase Bank and later to "U.S. Bank National Association [(U.S. Bank)] as Trustee relating to Chevy Chase Funding LLC Mortgage-Backed Certificates Series 2007-01."

Wilson defaulted on the loan in December 2009. On March 30, 2010, Regional Trustee Services Corporation (Regional) recorded a notice of default. In May 2010, Wilson wrote Regional to dispute the debt, asserting among other things that he had "never entered into a contract agreeing to owe a debt to [Regional]." Regional's response included copies of Wilson's 2006 note and deed of trust, his payment history, a reinstatement letter showing the amount then due to bring the loan current, and a demand/payoff statement. Regional explained that Wilson's loan was delinquent as of December 2009 and that "[h]aving fully complied with the requirements of the Fair Debt Collection Act," Regional intended to proceed with the scheduled foreclosure.

On July 1, 2010, U.S. Bank recorded a substitution of trustee naming Regional in place of original trustee First American. That same day, Regional recorded a notice of trustee's sale. The sale was scheduled for July 26, 2010.

Wilson wrote Regional again on July 19, 2010. His letter disputed that he owed any debt to Regional and threatened a lawsuit unless the trustee's sale was postponed or cancelled.

Just days before the scheduled sale, Wilson conveyed a half interest in the Ricardo Drive property to Moore "to mitigate their damages and to settle their claims against each other." Moore had no interest in the property before July 20, 2010. She has never been a party to Wilson's 2006 note or deed of trust.

The trustee's sale did not go forward. Wilson and Moore remained in possession of the Ricardo Drive property.

II. Procedural Background

In September 2011, Caltrans filed an eminent domain action against Wilson, Moore, U.S. Bank, and others to acquire a portion of the Ricardo Drive property for a Highway 101 improvement project at the San Juan Interchange. In its answer, U.S. Bank claimed entitlement as the beneficiary under Wilson's deed of trust to just compensation for the taking. Wilson and Moore filed their cross-complaint on April 16, 2012. Two months later, they filed a verified first amended cross-complaint (FACC) "for mortgage fraud and for quiet title to real property." The FACC purported to assert causes of action for fraud, constructive fraud, property conversion, unjust enrichment, civil conspiracy, unfair business practices, and quiet title against the Irwins, First American, U.S. Bank, Specialized, MERS, and others. It prayed for a determination of title as of November 8, 2006, for restitution in the amount of $1,230,000, for actual damages in the same amount, for other "compensatory" and "consequential" damages, punitive damages, and attorney's fees and costs.

First American demurred to the FACC on grounds that it was "unintelligible" and uncertain and failed to state facts sufficient to constitute any cause of action. U.S. Bank, Specialized and MERS separately demurred on the same grounds. They also argued that Wilson and Moore were judicially estopped from pursuing their claims because they failed to disclose them in their respective bankruptcy proceedings. The Irwins separately demurred on grounds of uncertainty and failure to state facts sufficient to constitute a cause of action.

At the hearing on the demurrers, the cross-defendants expressed difficulty in understanding the FACC's "confusing" allegations. Counsel for the Irwins complained that the FACC did not specify which causes of action applied to which cross-defendants. Counsel for U.S. Bank, Specialized and MERS noted the absence of case-specific facts to support the FACC's many contentions and conclusions. "This entire action . . . appears to be based entirely on this mortgage fraud theory . . . ." "It's very easy for Ms. Moore to refer to these reports, news stories, etc., that are just out in the ether about all of this. But as you just heard, she's not able to tie any of this directly to this series of transactions . . . . There's a fundamental problem to the extent all of this circles around, quote/unquote, fraud. . . ." "Ms. Moore can toss about the word 'fraud' as much as she likes, but she needs to be able to tie it to the case." Counsel for First American complained that the FACC was "really unintelligible" because on the one hand, "there's been admissions that the funds were deposited into escrow and checks were disbursed, and the deeds were deposited into escrow and that they were recorded," and on the other hand, the FACC alleged "that money wasn't disbursed and title wasn't conveyed."

The trial court described the FACC as "quite confusing" and acknowledged having "as much difficulty in interpreting [it] as do the [cross-]defendants." The court believed the gravamen of the FACC against the Irwins was "that there was some lack of disclosure" and that "the gravamen of the [FACC] against the others tends to be this mortgage fraud or problems." The court sustained the demurrers with leave to amend, explaining that it was doing so in an abundance of caution. The court instructed Wilson and Moore to specify which causes of action applied to which cross-defendants and to plead facts supporting those causes of action.

Wilson and Moore filed their verified SACC on November 26, 2012. The same cross-defendants again demurred. They noted that apart from "purely cosmetic" amendments, the SACC was "indistinguishable" from the FACC. They argued among other things that the SACC was uncertain and failed to allege facts sufficient to constitute any cause of action and that Moore lacked standing to assert all or most of the claims since she had no interest in the property before July 20, 2010.

The SACC also named Commitment and Regional as cross-defendants. The record does not show that either demurred to the SACC. Neither is a party to this appeal. We therefore disregard Wilson's and Moore's irrelevant arguments that the SACC properly pleaded various causes of action against Commitment and Regional.

The court sustained the demurrers without leave to amend. The court explained at the hearing that the fraud and constructive fraud causes of action were time-barred. The fact that Wilson claimed not to have discovered the alleged fraud "until I started—after Caltrans filed a lawsuit [in 2011] and I started getting all the paperwork out, trying to investigate actually what happened" was not a sufficient excuse for delayed discovery. The court ruled as an additional basis for dismissing the fraud causes of action that "there was not adequate pleading of all elements."

The conversion cause of action failed because conversion applies to personalty, and there was no personalty involved. The unjust enrichment cause of action failed because there were no facts alleged to support it and it was in any event time-barred. The conspiracy cause of action failed because it was founded on the deficient fraud claim. The unfair business practices cause of action failed for the same reason and also because no injury in fact was alleged. The quiet title cause of action failed because no tender was alleged.

The court entered judgment for the cross-defendants on May 28, 2013. Wilson and Moore filed a timely notice of appeal.

III. Discussion

A. Standard of Review

On appeal from the sustaining of a demurrer, "we accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law." (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924 (Yvanova).) We also consider matters subject to judicial notice. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) We "review the complaint de novo to determine . . . whether or not the trial court erroneously sustained the demurrer as a matter of law. [Citation.]" (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879.) We will affirm the trial court's ruling "if there is any ground on which [it] 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." (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) On appeal, " 'the plaintiff bears the burden of demonstrating that the trial court erred.' [Citation.]" (Zipperer v. County of Santa Clara (2005) 133 Cal.App.4th 1013, 1020.)

When a demurrer is sustained without leave to amend, "we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff." (Blank, supra, 39 Cal.3d at p. 318.) The showing need not be made in the trial court so long as it is made to the reviewing court. (Dey v. Continental Central Credit (2008) 170 Cal.App.4th 721, 731; Code Civ. Proc., § 472c.)

B. Fraud and Deceit

Wilson and Moore maintain that the SACC "clearly" pleaded a cause of action for fraud and deceit against each of the cross-defendants. We disagree.

" 'The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or "scienter"); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.' [Citations.]" (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar).) Fraud must be pleaded with "particularity." (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47.) "[G]eneral and conclusory allegations do not suffice. [Citations.] 'Thus " 'the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect.' " ' " (Lazar, at p. 645.) " 'This particularity requirement necessitates pleading facts which "show how, when, where, to whom, and by what means the representations were tendered." ' [Citation.]" (Ibid.)

"Concealment is a species of fraud or deceit." (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868.) " ' "[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage." [Citations.]' [Citation.]" (SCC Acquisitions, Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 864.) "[T]he requirement that '[f]raud must be pleaded with specificity . . .' applies equally to a cause of action for fraud and deceit based on concealment." (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472 (Cansino).)

1. Allegations Against the Irwins

Wilson and Moore argue that the SACC properly pleaded a cause of action for fraud and deceit against the Irwins. We disagree.

The SACC alleged that the Irwins told Wilson before he bought the property that it was "a five-acre equestrian estate with the value of the [sic] $1,125,000.00." This statement was false because "the truth was that . . . the value of the property dropped to the amount of the $500,000.00 in the three years or less." But a drop in value after the statement was made does not support the claim that the statement was false when it was made. (See Cansino, supra, 224 Cal.App.4th at pp. 1471-1472.) The SACC alleged no other facts to support its conclusion that the valuation statement was false when it was made. Thus, the valuation averments do not adequately allege the required element of a misrepresentation. (Davis v. Rite-Lite Sales Co. (1937) 8 Cal.2d 675, 680-681 (Davis).)

The SACC also alleged that the Irwins represented that "the property was not the subject of any taking by the action of an eminent domain." This statement was false because "the truth was that . . . the property is now the subject of a taking by the action of the eminent domain." But the allegation that the property was the subject of an eminent domain action "now" (that is, in November 2012 when the SACC was filed) does not support the claim that a contrary statement made by the Irwins six years earlier was false. Thus, the no-taking allegations do not adequately aver the required element of a misrepresentation either.

The SACC also alleged that the Irwins "concealed the existence of the San Juan Interchange Project by the non-disclosure of the plan and its potential impact on the property," which they "knew or should have known . . . would materially affect the value and the desirability of the property" that they sold to Wilson at an inflated price. The alleged nondisclosure occurred "on or about . . . September 25, 2006." Wilson took title to the property on November 8, 2006. This was five years and five months before he and Moore filed their cross-complaint. The Irwins contend that the trial court properly sustained their demurrer to the nondisclosure cause of action as time-barred. We agree.

"Critical to applying a statute of limitations is determining the point when the limitations period begins to run. Generally, a plaintiff must file suit within a designated period after the cause of action accrues." (Pooshs v. Philip Morris USA, Inc. (2011) 51 Cal.4th 788, 797; Code Civ. Proc., § 312.) "A cause of action accrues 'when [it] is complete with all of its elements'—those elements being wrongdoing, harm, and causation. [Citation.]" (Ibid.) "[T]he infliction of appreciable and actual harm, however uncertain in amount, will commence the statutory period." (Davies v. Krasna (1975) 14 Cal.3d 502, 514 (Davies).) "[N]either uncertainty as to the amount of damages nor difficulty in proving damages tolls the period of limitations." (Ibid.)

The statute of limitations for fraud is three years but the cause of action "is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud . . . ." (Code Civ. Proc., § 338, subd. (d).) "The statute commences to run only after one has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry." (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 437 (Hobart).) The discovery rule "has long been treated as an exception and, accordingly, . . . if an action is brought more than three years after commission of the fraud, plaintiff has the burden of pleading and proving that he did not make the discovery until within three years prior to the filing of his complaint." (Ibid.) The plaintiff must also allege "facts showing that he was not negligent in failing to make the discovery sooner and that he had no actual or presumptive knowledge of facts sufficient to put him on inquiry." (Ibid.; Johnson v. Ehrgott (1934) 1 Cal.2d 136, 137 (Johnson).) "[T]he facts relating to such discovery should be detailed in order that the court may determine whether, with due diligence, the fraud should have been discovered sooner." (Davis, supra, 8 Cal.2d at p. 681.) "[W]hen knowledge had by or imputed to plaintiff is such as to compel the conclusion that a prudent man would have suspected the fraud, the court may determine, as a matter of law, that there had been discovery." (National Auto & Casualty Ins. Co. v. Payne (1968) 261 Cal.App.2d 403, 409; Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1151-1153.)

Subsequent statutory references are to the Code of Civil Procedure unless otherwise specified.

Here, the SACC alleged that the Irwins' purported misrepresentations about the value of the property "caused the damages of the [sic] $470,000.00 or more (contract price - market price) to [Wilson]." It thus alleged that Wilson suffered actual and appreciable harm on November 8, 2006 when he bought the property at an allegedly inflated price. Ordinarily, the cause of action would have accrued and the statute of limitations would have begun to run at that time. (Davies, supra, 14 Cal.3d at p. 514.) However, the SACC further alleged that Wilson and Moore "first learned of the eminent domain action" against the property "[o]n or after . . . November 19, 2010, . . . by the receipt of the NOTICE OF DECISION TO APPRAISE from the Plaintiff CALTRANS." Because this was four years after the three-year limitations period began to run, Wilson and Moore had the burden of pleading "detailed" facts showing that they were not negligent in failing to discover the Irwins' alleged fraud sooner and that they had no actual or presumptive knowledge of facts sufficient to put them on inquiry. (Davis, supra, 8 Cal.2d at p. 681; Johnson, supra, 1 Cal.2d at p. 137.)

Nowhere does the SACC allege such facts. This is a critical failure given allegations in the superseded FACC that "[b]efore the conduct of the negotiations, . . . CALTRANS informed the public of the project by the circulation of the proposal in the local news media. . . . [E]xhibit 13 is a true and correct copy of a PROJECT NEWS ARTICLE, which The Valley Advisor published in the area on the September 2, 2007." Apparently relying on this article, the FACC alleged that the Irwins "knew about the planning of the San Juan Road Interchange Project, which would materially affect the value and the desirability of the Ricardo Drive Property before the closing of the transaction" in 2006. Wilson and Moore did not explain in either of their cross-complaints why the 2007 article that they alleged informed "the public" of the project did not put them as well as the Irwins on notice of it and its effect on the value and desirability of the property. At the hearing on the demurrers to the FACC, the trial court observed that "it appears that there may be a good [statute of limitations] defense [to the fraud cause of action against the Irwins]. But for demurrer and pleading purposes, I'm inclined to sustain with leave to amend."

Wilson and Moore amended the FACC without alleging any additional facts about when and how they belatedly discovered the existence of the San Juan Interchange Project. Instead, they omitted all reference to the 2007 news article that had been attached as exhibit 13 to the FACC. In its place, the SACC alleged on information and belief that "CALTRANS informed the public of the project by the circulation of the proposal as early as 2001."

Wilson and Moore cannot so easily escape the damaging effect of their earlier allegations. "A [plaintiff] may not attempt to breathe life into a complaint by omitting relevant facts which made his previous complaint defective." (Hills Transp. Co. v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 713 (Hills).) "In these circumstances, the policy against sham pleading . . . requires that the pleader explain the inconsistency." (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 384 (Owens).) If the pleader fails to do so, "the court may disregard the inconsistent allegations and read into the amended complaint the allegations of the superseded complaint." (Ibid.)

Wilson and Moore have never explained their deletion of all references to the 2007 article or the inconsistent allegation that they replaced those references with. As in Hills and Owens, their changes to the SACC appear to have been calculatedly made to avoid the defects identified by the court at the hearing on the demurrers to the FACC. (Owens, supra, 198 Cal.App.3d at p. 384.) On this record, we conclude that they failed to satisfy their burden of pleading that the discovery rule applied. The Irwins' demurrer to the fraud cause of action was properly sustained on the ground that it was time-barred.

2. Allegations Against First American

Wilson and Moore argue that the SACC properly pleaded a cause of action for fraud and deceit against First American. We disagree.

The fraud cause of action against First American was based on the theory that "[o]n the [sic] November 8, 2006, the Cross-Defendant FATC breached the duty of the escrow by the failure to receive and delivery [sic] the complete title of the property and by the failure to receive and disburse the money of the loan." The SACC alleged that First American made certain "material representations," including that the Irwins were the sellers of the property, that Wilson was the buyer and the borrower, that Commitment was the lender, and that First American "received the money of the escrow," "disbursed the money of the escrow and . . . completed the duties of the escrow." The representations were false because First American "did not receive and disburse the money of the escrow; . . . merely received and disbursed the checks from the escrow[;] . . . did not possess a title document and was a participant in the ponzi securitization scheme."

These allegations do not adequately plead the required element of a misrepresentation. The alleged falsity of the representations was contradicted by facts appearing in exhibits to the complaint, including Wilson's note and deed of trust and the grant deed from the Irwins that First American recorded in 2006. We give precedence to the facts stated in those exhibits, which established for purposes of the demurrers that Wilson was the buyer of the Ricardo Drive property and the borrower under the note and deed of trust, that Commitment was the lender, and that Wilson received title to the property subject to the note and deed of trust. (Dodd, supra, 222 Cal.App.3d at p. 1627.)

The alleged falsity of the representations was also contradicted by more specific averments made elsewhere in the SACC. In their quiet title cause of action, for example, Wilson and Moore alleged that "Wilson is the owner of the property by the possession of the actual premises and by the color of the Grant Deed, which . . . Irwin executed on the [sic] November 3, 2006 and [First American] recorded on the [sic] November 8, 2006." Such " '[s]pecific factual allegations modify and limit inconsistent general statements.' " (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1371 (Alfaro).) This is because " '[w]hile inconsistent theories of recovery are permitted [citation] a pleader cannot blow hot and cold as to the facts positively stated. [Citations.]' [Citation.]" (Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 827-828.) Accordingly, we may disregard the allegations that First American falsely represented that it had delivered title when it purportedly had not done so. (Ibid.) Without those allegations, the fraud cause of action fails to allege the required element of a misrepresentation by First American. (Lazar, supra, 12 Cal.4th at p. 638.) First American's demurrer to the fraud cause of action was properly sustained on that ground.

First American argues that its demurrer to the fraud cause of action was also properly sustained on statute of limitations grounds. We agree.

The fraud cause of action as alleged against First American accrued and the statute of limitations began to run when Wilson took title to the property on November 8, 2006. Wilson and Moore did not file their original cross-complaint until April 16, 2012. Because this was more than five years after the three-year limitations period began to run, they had the burden of pleading "detailed" facts showing that they were not negligent in failing to make the discovery sooner and that they had no actual or presumptive knowledge of facts sufficient to put them on inquiry. (Davis, supra, 8 Cal.2d at p. 681; Johnson, supra, 1 Cal.2d at p. 137.) They failed to satisfy that burden.

The SACC admitted that Wilson attended the November 2, 2006 closing. It admitted that he signed the closing documents that day. It did not allege any explanation or excuse for his delayed discovery of purported problems with those documents. At the hearing on the demurrers, Wilson stated only that he "did not realize this until I started—until after Caltrans filed a lawsuit [in September 2011] and I started getting all the paperwork out, trying to investigate actually what happened." He did not claim that the paperwork was unavailable to him before September 2011. We agree with the trial court that this explanation was an insufficient excuse for the delayed discovery. Because Wilson and Moore failed to satisfy their burden of pleading that the discovery rule applied, the SACC's fraud claim against First American was deficient for the additional reason that it was time-barred. (§ 338, subd. (d).)

Wilson and Moore argue that First American "actively concealed the fraud by the substitution of the unapproved LENDER'S LOSS PAYABLE ENDORSEMENT . . . which identified the CHEVY CHASE BANK F.S.B. as the lender, without any notice to the Appellant Wilson." They do not explain how a statement that plainly appears in a one-page document that Wilson admittedly signed at the November 2, 2006 closing can be characterized as having been "concealed." Nor do they explain whether Wilson read the documents he signed that day or if he did not, why he did not. The bare allegation that First American concealed the fraud does not satisfy Wilson's and Moore's burden of pleading that the discovery rule applied. (See Johnson, supra, 1 Cal.2d at p. 137.)

Wilson and Moore next argue that the statute of limitations was not properly applied because the time bar was not apparent from the face of the SACC. They rely on the rule that "[i]n order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred." (McMahon v. Republic Van & Storage Co., Inc. (1963) 59 Cal.2d 871, 874.) We reject this argument. The SACC clearly alleged that Wilson attended the November 2, 2006 closing and that he signed the loss payable endorsement and other documents that day. A copy of the loss payable endorsement was attached as an exhibit to the SACC. Chevy Chase Bank F.S.B. is plainly listed under a heading stating "Mortgagee/Loss Payable clause to read:" The SACC does not allege that First American concealed this information. Nor does it allege that Wilson was unaware of it when he signed the document on November 2, 2006. The original cross-complaint was not filed until April 16, 2012. Thus, it is apparent from the face of the SACC that to the extent the fraud cause of action was premised on alleged misrepresentations in the closing documents, that cause of action was time-barred.

Wilson and Moore next argue that the statute of limitations was tolled or suspended by the filing of Moore's bankruptcy petition on March 18, 2010. We disagree.

"The automatic stay is applicable only to proceedings against the debtor." (In re Miller (9th Cir. 2005) 397 F.3d 726, 729.) Therefore, "a debtor's cause of action is not tolled by the filing of a bankruptcy petition." (Shorr v. Kind (1991) 1 Cal.App.4th 249, 254.) This follows from the language of section 362 of the Bankruptcy Code, which "provides that the commencement or continuation of any legal proceeding against the debtor is automatically stayed by the filing of a petition in bankruptcy, until adjudication or dismissal of the petition." (Danielson v. ITT Industrial Credit Co. (1988) 199 Cal.App.3d 645, 652; 11 U.S.C. § 362(a)(1).) Here, where the cross-complaint was filed by rather than against Moore, the statute of limitations was not tolled or suspended by her bankruptcy.

The cases on which Wilson and Moore rely do not compel a different conclusion. Those cases involved actions filed against debtors in bankruptcy. (Schumacher v. Worcester (1997) 55 Cal.App.4th 376, 380; Kertesz v. Ostrovsky (2004) 115 Cal.App.4th 369, 377-378.) They say nothing about the timeliness of a cross-complaint filed by a debtor in bankruptcy. The cases are therefore inapposite. We conclude that the fraud cause of action against First American was also properly sustained on statute of limitations grounds. (§ 338, subd. (d).)

3. Allegations Against U.S. Bank, Specialized, and MERS

Wilson and Moore claim the SACC properly pleaded a cause of action for fraud and deceit against U.S. Bank, Specialized, and MERS. We disagree.

a. MERS

The fraud cause of action against MERS was based on alleged misrepresentations in the 2006 closing documents and in the 2010 assignment of Wilson's deed of trust to U.S. Bank. As we have already explained with respect to similar allegations against First American, the cause of action is time-barred to the extent it is based on representations made in 2006. (See ante, pp. 13-16.) This is because Wilson and Moore did not meet their burden of pleading "detailed" facts showing that they were not negligent in failing to discover the alleged fraud sooner and that they had no actual or presumptive knowledge of facts sufficient to put them on inquiry. (Davis, supra, 8 Cal.2d at p. 681; Johnson, supra, 1 Cal.2d at p. 137; § 338, subd. (d).)

Wilson and Moore maintain that the trial court was required to "assume the truth of the allegations (1) about the first suspicion of wrongdoing, (2) about the transmittal of several debt dispute letters, (3) about the visits to the Recorder's office and (4) about the realization of the fraud during the months before the filing of the Cross-Complaint." The argument does not advance their position.

Assuming the truth of the referenced allegations does not remedy the SACC's failure to allege "detailed" facts showing that Wilson and Moore were "not negligent in failing to make the discovery sooner and that [they] had no actual or presumptive knowledge of facts sufficient to put [them] on inquiry." (Hobart, supra, 26 Cal.2d at p. 437; Davis, supra, 8 Cal.2d at p. 681.) Their conclusory allegation that they "first suspected the wrongdoing in this case" around September 2009 "after the viewing of several programs and the reading of several articles about the 'subprime mortgage crash' " says nothing about why they were not negligent in failing to make the discovery sooner. It does not explain why they were not put on inquiry notice much earlier by, for example, the September 2008 failures of Lehman Brothers and Washington Mutual, both of which were heavily reported by the media. Absent any such explanation, the discovery rule does not apply.

Wilson and Moore also rely on an allegation that they "first formed the opinion that the documents of the loan transaction were forgeries [on September 3, 2010] after an examination of the records at the Office of the San Benito County Record[er], which showed no sale or transfer of a loan to the [sic] DOVENMUEHLE MORTGAGE INC on the [sic] November 2, 2006." Assuming the truth of that allegation does not explain why Wilson and Moore could not have discovered the alleged forgery earlier. Exhibits to the SACC established that in December 2006, they had in their possession two documents that (at least in their view) made conflicting statements about Dovenmuehle's role in the 2006 transaction. The first document, which Wilson signed at the November 2006 closing, stated that "[b]ecause your loan has been sold, along with its servicing, all future payments beginning with your [January] 1, 2007 payment are to be sent to Dovenmuehle Mortgage, Inc." The document nowhere stated that Wilson's loan had been sold to Dovenmuehle. However, the forgery allegation (which appears to us to claim some unexplained defect in the chain of title) hinges on Wilson's and Moore's interpretation that it did. To the extent they interpreted the document that way when they received it, their interpretation should have been called into question when Wilson received the second document on December 19, 2006. That document was a letter from Commitment notifying him "that the servicing of your mortgage loan . . . is being assigned, sold or transferred from Dovenmuehle Mortgage, Inc., who has been subservicing your loan . . . to Chevy Chase Bank effective 01/01/2007." "Your present servicer is Dovenmuehle Mortgage, Inc., who has been subservicing your loan for Commitment . . . ." "Your new servicer will be Chevy Chase Bank." The SACC does not explain why this letter did not put Wilson and Moore on inquiry notice that Wilson's loan had not been sold to Dovenmuehle in 2006. Absent such allegations, the discovery rule does not apply.

Implicitly acknowledging the reality that the discovery rule cannot save their allegations about the 2006 documents, Wilson and Moore focus their appellate argument on the 2010 assignment of the deed of trust. We understand them to argue that the SACC properly alleged the required element of a misrepresentation based on MERS's purportedly false statement that it was authorized to act as Commitment's nominee or agent in assigning MERS's interest in the deed of trust to U.S. Bank. We reject the argument.

The SACC alleged that on April 2, 2010, "MERS made the false material representation . . . that . . . MERS, as the 'nominee' for the . . . LENDER, 'grants, bargains, sells, assigns, transfers and sets over . . . all beneficial interest' in the document of the DEED OF TRUST . . . to . . . [U.S. Bank] . . . ." This representation was false "because . . . MERS never acquired any ownership or possessory interest in the purported loan, . . . never had a right to any payment, [and] was not authorized to sign or record the document . . . ." We need not accept the latter allegations as true because they were flatly contradicted by the deed of trust attached as an exhibit to the SACC. (Dodd, supra, 222 Cal.App.3d at p. 1627.) The deed of trust identified MERS as "the beneficiary under this Security Instrument." It expressly provided that "Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property . . . ." By signing the deed of trust, Wilson acknowledged MERS's broad authority and agreed that MERS could act on behalf of the lender and its successors and assigns. (See, e.g., Gomes v. Countrywide Hom e Loans, Inc. (2011) 192 Cal.App.4th 1149, 1157 (Gomes) ["[E]ven if there was a legal basis for an action to determine whether MERS has authority to initiate a foreclosure proceeding, the deed of trust—which Gomes has attached to his complaint—establishes as a factual matter that his claims lack merit. As stated in the deed of trust, Gomes agreed by executing that document that MERS has the authority to initiate a foreclosure. Specifically, Gomes agreed that 'MERS (as nominee for Lender and Lender's successors and assigns) has . . . the right to foreclose and sell the Property.' "].) Thus, Wilson and Moore cannot premise their fraud cause of action on an allegation that MERS had no such authority. (Ibid. ["Gomes's agreement that MERS has the authority to foreclose thus precludes him from pursuing a cause of action premised on the allegation that MERS does not have the authority to do so"]; Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1505 [based on language identical to that in Wilson's deed of trust, rejecting argument that MERS lacked authority], disapproved on another ground in Yvanova, supra, 62 Cal.4th at p. 939, fn. 13.)

Wilson and Moore next argue that MERS lacked authority to assign the deed of trust in 2010 because its powers as the nominee or agent of Commitment terminated when Commitment's license expired in 2008. Not so. The deed of trust authorized MERS to act not only for the original lender but "for Lender and Lender's successors and assigns." Wilson expressly agreed to that provision when he signed the deed of trust. Thus, MERS was authorized to assign the note and deed of trust in 2011, even after Commitment's license allegedly expired. (See Ghuman v. Wells Fargo Bank, N.A. (E.D. Cal. 2013) 989 F.Supp.2d 994, 1001 ["[T]he fact Lender became defunct did not strip MERS' authority to act under the Deed of Trust."].

Wilson and Moore next assert that "MERS and [U.S. Bank] did not have an active license or registration with the Department of Corporations on the July 1, 2010." (Boldface omitted.) They do not develop this assertion into an argument supported by cogent reasoning and citation to authority.

"Appellate briefs must provide argument and legal authority for the positions taken. 'When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived.' [Citation.]" (Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956 (Cahill).) "Mere suggestions of error without supporting argument or authority other than general abstract principles do not properly present grounds for appellate review." (Dept. of Alcoholic Beverage Control v. Alcoholic Beverage Control Appeals Bd. (2002) 100 Cal.App.4th 1066, 1078.) " 'We are not bound to develop appellants' arguments for them.' " (Cahill, at p. 956.)

Wilson's and Moore's status as self-represented parties does not entitle them to lenient treatment. A self-represented party " 'is to be treated like any other party . . . .' " (Nwosu v. Oba (2004) 122 Cal.App.4th 1229, 1246-1247.) The rationale for this rule is that "[a] doctrine generally requiring or permitting exceptional treatment of parties who represent themselves would lead to a quagmire in the trial courts, and would be unfair to the other parties to litigation." (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 985.) Thus, whether a party is represented by counsel or self-represented, "this court is under no obligation to search the record in an effort to ascertain a sound legal reason either for reversal of the judgment, or the order in question." (People v. Gidney (1937) 10 Cal.2d 138, 142, disapproved on another point in People v. Hutchinson (1969) 71 Cal.2d 342, 347.) "The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived." [Citations.]" (Cahill, supra, 194 Cal.App.4th at p. 956; People v. Stanley (1995) 10 Cal.4th 764, 793.) We deem Wilson's and Moore's corporate registration argument waived. The demurrer to the SACC's fraud cause of action against MERS was properly sustained on grounds that it failed to allege the required element of a misrepresentation and was in any event time-barred. (§ 338, subd. (d).)

b. Specialized

The sole point that Wilson and Moore make about their fraud cause of action against Specialized appears under the heading "The Allegations of the Facts Satisfy The Essential Elements Of The Fraud and Deceit Claim Against The Appellees [MERS], [Specialized], [Regional] and [U.S. Bank]." (Boldface omitted.) They summarily assert that "Darren Bronaugh, an employee of the Cross-Defendant [Specialized], executed the [2010] assignment [of Wilson's deed of trust] as the Vice President of the Appellee MERS without the evidence of any power by the Appellee MERS." (Boldface omitted.) This conclusory assertion does not adequately raise a claim of error.

A fundamental rule of appellate review is that " '[a] judgment or order of the lower court is presumed correct' " and " 'error must be affirmatively shown.' " (Denham v. Superior Court (1970) 2 Cal.3d 557, 564.) " ' "Although our review of a [demurrer] is de novo, it is limited to issues [that] have been adequately raised and supported in plaintiffs' brief. [Citations.]" ' " (Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1282 (Pfeifer).) "Appellate courts will not[e] only those assignments [of error] pointed out in the brief of an appellant; all others are deemed to have been waived or abandoned." (Title Guarantee & Trust Co. v. Fraternal Finance Co. (1934) 220 Cal. 362, 363 (Title Guarantee).) Wilson and Moore have waived any claim of error with respect to the sustaining of Specialized's demurrer to the SACC's fraud cause of action. (Pfeifer, at p. 1282.)

c. U.S. Bank

Under the heading just referenced, Wilson and Moore make three assertions with respect to their fraud cause of action against U.S. Bank. The first is that U.S. Bank "did not have an active license or registration with the Department of Corporations on the [sic] July 1, 2010." (Boldface omitted.) This one-sentence assertion does not show by reasoned argument and citation to authority that the trial court erred in sustaining U.S. Bank's demurrer to the fraud cause of action. We therefore treat the point as waived. (Cahill, supra, 194 Cal.App.4th at p. 956.)

Wilson's and Moore's second assertion is that "[t]he interest of the Appellee [U.S. Bank] as the assignee of the Deed is VOID from the beginning because the powers of the Appellee MERS, as a nominee or as an agent, terminated on or about the [sic] January 31, 2008 with the expiration of the Appellee CLC." (Boldface omitted.) Wilson and Moore do not explain how this assertion shows fraud on the part of U.S. Bank. Nor can they plausibly do so, because we have already rejected their argument that MERS misrepresented its authority to assign Wilson's deed of trust. Thus, to the extent Wilson and Moore claim that their fraud cause of action against U.S. Bank was properly premised on MERS's alleged lack of authority, the cause of action fails. (Gomes, supra, 192 Cal.App.4th at p. 1157.)

Wilson's and Moore's third assertion is that "the interest of the Appellee [U.S. Bank] as the holder of the Note is VOID from the beginning because (1) the Appellee [Commitment] as the 'Lender' never performed the obligation of any agreement with the Appellant Wilson as the 'Borrower' by the delivery of any consideration; (2) the Appellant Wilson as the 'Borrower' never formed the obligation of any agreement with the CHEVY CHASE BANK F.S.B. as the 'Lender' by the making of any promise and (3) the Appellee [Commitment] as a 'Holder' never negotiated the instrument of any note to the Appellee [U.S. Bank] as a 'Beneficiary' by the actual endorsement of an instrument and by the physical delivery of the possession. See Civil Code § 2356(a) ('Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated by . . . [t]he death of the principal.')." (Boldface omitted.) This assertion does not show by reasoned argument and citation to authority that the trial court erred in sustaining U.S. Bank's demurrer to the fraud cause of action. We therefore treat whatever point Wilson and Moore were attempting to make as waived. (Cahill, supra, 194 Cal.App.4th at p. 956.) The demurrer to the SACC's fraud cause of action against U.S. Bank was properly sustained because it failed to allege the required elements of the cause of action and was in any event time-barred. (§ 338, subd. (d).)

C. Constructive Fraud

The trial court sustained the demurrers to the constructive fraud cause of action in part because it was barred by the statute of limitations. Wilson and Moore do not challenge this ruling on appeal. We deem them to have abandoned the issue. (Title Guarantee, supra, 220 Cal. at p. 363.) Properly so, as Moore admitted at the hearing that her argument on the issue with respect to the constructive fraud cause of action was no different than her argument on the fraud cause of action. Thus, the constructive fraud cause of action was time-barred for the same reasons that rendered the fraud cause of action time-barred.

MERS, Specialized, and U.S. Bank contend that the constructive fraud cause of action also failed to allege the necessary elements of the cause of action. We agree.

" 'Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.' " (Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, 562.) "The elements of the cause of action for constructive fraud are: (1) fiduciary relationship; (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation)." (Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498, 516, fn. 14.)

"The trustee of a deed of trust is not a true trustee with fiduciary obligations, but acts merely as an agent for the borrower-trustor and lender-beneficiary." (Yvanova, supra, 62 Cal.4th at p. 927.) "His agency is a passive one, for the limited purpose of conducting a sale in the event of the trustor's default or reconveying the property upon satisfaction of the debt. [Citations.]" (Hatch v. Collins (1990) 225 Cal.App.3d 1104, 1111 (Hatch).) "Consequently, '[t]he use of the term "trustee" in the deed of trust is unfortunate and misleading. The "trustee" of a deed of trust is not a trustee at all in a technical or strict sense . . . . He does not assume the obligations which are imposed on a trustee by operation of law, and the statutes applicable to trustees of express trusts do not apply to deeds of trust. The trustee of a deed of trust does not possess the personal confidence for the benefit of another required for a true trust relationship.' [Citations.] A trustee therefore, while an agent for both the beneficiary and the trustor, does not stand in a fiduciary relationship to either. [Citation.]" (Id. at pp. 1111-1112.) "It is true . . . that a trustee has a general duty to conduct the sale 'fairly, openly, reasonably, and with due diligence,' exercising sound discretion to protect the rights of the mortgagor and others. [Citations.] It by no means follows, however, that this duty is a fiduciary one." (Id. at p. 1112.) We conclude that the constructive fraud cause of action is deficient because it does not and as a matter of law cannot allege facts showing the existence of a fiduciary duty.

The cause of action is deficient for a further reason: because it does not adequately plead the required element of a breach. The trustee's duty is "limited . . . [to] conducting a sale in the event of the trustor's default or reconveying the property upon satisfaction of the debt." (Hatch, supra, 225 Cal.App.3d at p. 1111.) Here, where no sale had occurred, neither trustee can possibly have breached its duties. And where there has been no breach by either trustee under the deed of trust, there can be no vicarious breach by MERS, Specialized, or U.S. Bank. The demurrers to the constructive fraud cause of action were properly sustained for failure to state facts sufficient to constitute a cause of action and on statute of limitations grounds.

D. Conversion and Unjust Enrichment

Wilson and Moore argue that "the cross-complaint states the claims of the [sic] conversion and of the [sic] unjust enrichment against the appellees by the sufficient allegations of the facts." (Capitalization & boldface omitted.) We disagree.

" 'Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages.' " (Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 939.)

The SACC asserted its conversion cause of action against all of the cross-defendants. On appeal however, Wilson and Moore focus only on the Irwins and First American. Thus, we deem them to have abandoned any claim of error with respect to the sustaining of the demurrers to this cause of action by MERS, Specialized, and U.S. Bank. (Title Guarantee, supra, 220 Cal. at p. 363.)

With respect to First American, we understand Wilson and Moore to argue that Wilson delivered three checks and one note "which were negotiable instruments under the UCC" and that First American "wrongfully converted the instruments by the failure to close the transaction and to deliver the clear title according to the escrow instructions." They similarly argue that the Irwins "did not deliver any clear title." The allegations of the SACC's conversion cause of action were far more general. The SACC alleged that Wilson was "the owner, the maker and the possessor of the checks and the note with the value of the $1,171,619.71." It then alleged without distinguishing between any of the cross-defendants that they "wrongfully converted the property of the instruments by the taking of the checks and the note through the use of the false material representations and without the exchange of any consideration." We need not accept this conclusory no-consideration allegation as true because it was contradicted by facts stated in the grant deed that Wilson attached as an exhibit to the SACC. (Dodd, supra, 222 Cal.App.3d at p. 1627.) The grant deed established for purposes of demurer that Wilson received title to the Ricardo Drive property. Wilson and Moore admitted as much elsewhere in the SACC when they alleged that "Wilson is the owner of the property by the possession of the actual premises and by the color of the Grant Deed, which . . . Irwin executed on the [sic] November 3, 2006 and [First American] recorded on the November 8, 2006." Such " '[s]pecific factual allegations modify and limit inconsistent general statements.' " (Alfaro, supra, 171 Cal.App.4th at p. 1371.) The conversion cause of action thus fails to plead the necessary element of a wrongful act on the part of First American or the Irwins. The demurrers to that cause of action were properly sustained.

The unjust enrichment cause of action fails for the same reasons. "The elements of an unjust enrichment claim are the 'receipt of a benefit and [the] unjust retention of the benefit at the expense of another.' " (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.) Because the SACC pleaded neither, the demurrers to that cause of action were also properly sustained.

E. Civil Conspiracy and Unfair Business Practices

Wilson and Moore argue that "[t]he cross-complaint states the claims of the [sic] conspiracy and of the [sic] unfair business practices against the appellees by the sufficient allegations of the facts." (Capitalization & boldface omitted.) We disagree.

"Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors." (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.)

The SACC asserted its conspiracy cause of action against First American, MERS, Specialized, and U.S. Bank. The underlying tort on which the cause of action was premised was not apparent from the allegations. However, Moore confirmed at the hearing that the underlying tort was the SACC's failed fraud cause of action. "I do not agree with the Court's dismissal of the fraud claim, but based on the fraud claim, if that was not wiped out, then the conspiracy—the tort would be the fraud, and conspiracy would be the context of the tort claim of fraud of all the parties involved."

On appeal, Wilson and Moore simply restate the allegations of the conspiracy cause of action. Because it was premised on the failed fraud cause of action, it too failed. The demurrer to that cause of action was properly sustained.

Wilson and Moore do not advance a cogent argument about their cause of action for unfair business practices. They simply assert that "Under the Unfair Competition Law, unfair competition means any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising." A citation to Business and Professions Code section 17200 follows. " 'We are not bound to develop appellants' arguments for them.' " (Cahill, supra, 194 Cal.App.4th at p. 956.) We deem them to have waived any claim of error with respect to the sustaining of the demurrers to their cause of action for unfair business practices. (Ibid.)

F. Quiet Title

Wilson and Moore argue that the SACC properly pleaded a cause of action for quiet title. We disagree.

"It is settled in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt secured. [Citation.]" (Shimpones v. Stickney (1934) 219 Cal. 637, 649 (Shimpones).) The rule applies not only to mortgagors but also to persons who purchase property subject to an existing mortgage or deed of trust. (Burns v. Hiatt (1906) 149 Cal. 617, 620-622 (Burns).) " 'Real property is transferable even though the title is subject to a mortgage or deed of trust, but the transfer will not eliminate the existence of that encumbrance. Thus, the grantee takes title to the property subject to all deeds of trust and other encumbrances, whether or not the deed so provides.' " (Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438.) A cloud remains on the title until the debt is paid. (Burns, at p. 622.)

There are a few exceptions to the tender rule, but none applies here. (See, e.g., Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112-113; Pfeifer, supra, 211 Cal.App.4th at pp. 1280-1281.) First, Wilson and Moore do not challenge the validity of the underlying debt. The SACC admitted that Wilson requested and obtained a $776,000 purchase money loan in 2006, which he secured by a deed of trust on the property. Second, the SACC did not seek to enjoin the foreclosure sale. Nor could it, because the notice of trustee's sale recorded on July 1, 2010 expired after one year and there was no new sale notice outstanding at the time of the February 28, 2013 hearing on the demurrers. (Civ. Code, § 2924g, subd. (c)(1)(D), (2).) Finally, the SACC alleged no facts to support a conclusion that it would be inequitable to require tender. (Humboldt Savings Bank v. McCleverty (1911) 161 Cal. 285, 291.) Wilson's and Moore's failure to allege tender of the amount outstanding on the debt is fatal to the SACC's quiet title cause of action. (Shimpones, supra, 219 Cal. at p. 649.)

G. Leave to Amend

Wilson and Moore argue that they should have been granted leave to amend to allege a cause of action under the California Homeowner Bill of Rights. We disagree.

The California Homeowner Bill of Rights was enacted in 2012. (Yvanova, supra, 62 Cal.4th at p. 941; see Monterossa v. Superior Court of Sacramento County (2015) 237 Cal.App.4th 747, 749, fn. 1.) As Wilson and Moore acknowledge, the law became effective on January 1, 2013. (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86, fn. 14.) This was long after the conduct they complain of. The notice of default was recorded on March 30, 2010. The notice of trustee's sale was recorded on July 1, 2010. It has since expired. (Civ. Code, § 2924g, subd. (c)(1)(D), (2).)

"California courts comply with the legal principle that unless there is an 'express retroactivity provision, a statute will not be applied retroactively unless it is very clear from extrinsic sources that the Legislature . . . must have intended a retroactive application.' " (Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 841.) The California Homeowner Bill of Rights is not expressly retroactive, and Wilson and Moore have not identified any extrinsic sources indicating that the Legislature intended a retroactive application. (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 21; Rockbridge Trust v. Wells Fargo, N.A. (N.D. Cal. 2013) 985 F.Supp.2d 1110, 1152.) Thus, they failed to satisfy their burden of showing a reasonable possibility that the SACC's defects could be cured by amendment. (Blank, supra, 39 Cal.3d at p. 318.)

Implicitly acknowledging that the California Homeowner Bill of Rights does not operate retroactively, Wilson and Moore ask us to take judicial notice "of the content, but not the truth" of a notice of Wilson's default that was recorded on September 6, 2013 in Monterey County. They assert that "the matter of the content is relevant" because "the recording of a Notice of Default or Substitution of Trustee against the property upon the basis of a fraudulent Deed of Trust is a 'material violation,' which activates the injunctive relief provisions of [the California Homeowner Bill of Rights]." We deny the request. Judicial notice " 'is always confined to those matters which are relevant to the issue at hand.' " (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063 (Mangini), overruled on another ground in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.) The document is irrelevant because the SACC does not adequately plead fraud, and Wilson and Moore have not explained how they can amend it to allege the required elements and to avoid the bar of the statute of limitations. We conclude that the trial court did not abuse its discretion in sustaining the demurrers without leave to amend.

Wilson and Moore also ask us to take judicial notice "of the content, but not the truth" of four additional documents. We deny the request. The first three documents, which Wilson and Moore claim are relevant to their fraud cause of action, are irrelevant given our rejection of that cause of action as time-barred. (Mangini, supra, 7 Cal.4th at p. 1063.) The fourth document, which Wilson and Moore claim supports their argument that cross-defendants' judicial estoppel argument lacks merit, is irrelevant because our conclusion that the demurrers were properly sustained on the ground that the SACC failed to allege facts sufficient to constitute a cause of action and on statute of limitations grounds means that we need not reach cross-defendants' judicial estoppel arguments. --------

IV. Disposition

The judgment is affirmed.

/s/_________

Mihara, J. WE CONCUR: /s/_________
Bamattre-Manoukian, Acting P. J. /s/_________
Grover, J.


Summaries of

Wilson v. Irwin

COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
Dec 7, 2017
H039985 (Cal. Ct. App. Dec. 7, 2017)
Case details for

Wilson v. Irwin

Case Details

Full title:JEFFREY MERRITT WILSON et al., Cross-complainants and Appellants, v…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT

Date published: Dec 7, 2017

Citations

H039985 (Cal. Ct. App. Dec. 7, 2017)