FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BELLA PEREZ; ENRIQUE PEREZ,

Plaintiffs-Appellants,

v.

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC.; U.S.

BANK, N.A., as trustee for the 

Lehman XS Trust 2006-14N 

Mortgage Pass-Through Certificates, 

Series 2006-14N,

Defendants-Appellees.

No. 18-16584

D.C. No.

2:17-cv-01790-

TLN-EFB

Appeal from the United States District Court

for the Eastern District of California

Troy L. Nunley, District Judge, Presiding

BELLA PEREZ; ENRIQUE PEREZ,

Plaintiffs-Appellants,

v.

MORTGAGE ELECTRONIC 

REGISTRATION SYSTEMS, INC.; THE 

BANK OF NEW YORK MELLON,

Defendants-Appellees.

No. 18-17230

D.C. No.

3:17-cv-04880-

JD

OPINION
2 PEREZ V. MERS

Appeal from the United States District Court

for the Northern District of California

James Donato, District Judge, Presiding

Submitted February 13, 2020*

San Francisco, California

Filed May 11, 2020

Before: Ronald M. Gould and Mary H. Murguia, Circuit 

Judges, and Gary Feinerman,** District Judge.

Opinion by Judge Gould

SUMMARY***

California Law / Foreclosure

The panel affirmed the district court’s dismissals for 

failure to state claims of two actions brought by plaintiff 

homeowners against the Mortgage Electronic Registration 

Systems, Inc. and banks, challenging the banks’ authority to 

foreclose on their properties.

* The panel unanimously concludes this case is suitable for decision 

without oral argument. See Fed. R. App. P. 34(a)(2).

** The Honorable Gary Feinerman, United States District Judge for 

the Northern District of Illinois, sitting by designation.

*** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
PEREZ V. MERS 3

Plaintiffs owned properties in Sacramento and San 

Pablo, and neither of the properties were ultimately 

foreclosed. Plaintiffs sought declaratory relief and 

cancellation of instruments as to the banks and MERS, and 

quiet title as to only the banks.

The panel held that California law does not permit 

borrowers to bring judicial actions to challenge a foreclosing 

party’s authority to foreclose on the borrower’s property 

before a foreclosure has taken place. Because the California 

Supreme Court had not yet addressed the question of 

whether preemptive, pre-foreclosure actions were viable 

under California law, the panel looked to the relevant 

decisions of the California intermediate appellate courts. 

The panel held that plaintiffs did not state any valid claims

under California law, and affirmed the district court’s 

dismissal of plaintiffs’ complaints.

The panel held that the district court did not abuse its 

discretion by denying plaintiffs leave to amend because the 

proposed amendments would not have changed the 

determination that the action was impermissible under 

California law.

COUNSEL

Mark W. Lapham, Law Offices of Mark W. Lapham, 

Danville, California, for Plaintiffs-Appellants.

Jan T. Chilton, Severson & Werson, San Francisco, 

California; Kerry W. Franich, Severson & Werson, Irvine, 

California; Ian A. Rambarran, Betsy S. Kimball, and 
4 PEREZ V. MERS

Lindsey N. Casillas, Klinedinst PC, Sacramento, California;

for Defendants-Appellees.

OPINION

GOULD, Circuit Judge:

These cases, in which we apply California law because 

of our diversity jurisdiction, present the question of whether 

California law permits borrowers to bring judicial actions to 

challenge a foreclosing party’s authority to foreclose on the 

borrower’s property before a foreclosure has taken place.

Plaintiffs-Appellants Bella and Enrique Perez 

(“Appellants”) filed two such pre-foreclosure actions here. 

In both actions, Appellants sued Mortgage Electronic 

Registration Systems, Inc.1 (“MERS”) and the banks 

holding their two mortgages—U.S. Bank, National 

Association (“U.S. Bank”) in No. 18-16584, and Bank of 

New York Mellon in No. 18-17230. Appellants brought 

these actions to challenge the banks’ authority to foreclose 

on their properties. The district courts dismissed the 

complaints for failure to state plausible claims for relief 

under California law. We have jurisdiction under 28 U.S.C. 

§ 1291, and we affirm.

I.

Appellants own two California properties that are at 

issue in these appeals: a West Sacramento property (Perez v. 

1 MERS is a subscription-based service that tracks changes in 

mortgage servicing rights and beneficial ownership interests in loans 

secured by residential properties.
PEREZ V. MERS 5

MERS & U.S. Bank, N.A., No. 18-16584 [“Perez I”]) and a 

San Pablo property (Perez v. MERS & Bank of New York 

Mellon, No. 18-17230 [“Perez II”]).

A.

In Perez I, Appellants executed a deed of trust in 2006 to 

secure a note for $399,000 on their property in West 

Sacramento. The deed of trust identified Dollar Mortgage 

Corporation (“Dollar”) as the lender and DefendantAppellee MERS as the beneficiary for Dollar and Dollar’s 

“successors and assigns.” The mortgage loan was sold four 

times between 2005 and 2006; Defendant-Appellee U.S. 

Bank has owned the loan since 2006.

In 2009, a notice of default and a notice of trustee’s sale 

were issued against Appellants for failure to make payments 

on their loan. A sale was scheduled, but it did not take place, 

and the complaint did not allege any subsequent actions 

taken to foreclose on the property.

After briefing concluded during the motion to dismiss 

stage, Appellants filed a case notification to inform the 

district court they had received a new notice of default less 

than a month after filing their original complaint. There are 

no allegations that this notice of default resulted in a 

foreclosure or that any further action was taken to foreclose 

on the property.

B.

In Perez II, Appellants executed a deed of trust in 2006 

to secure a note for $440,000 on their property in San Pablo. 

The deed of trust identified American Mortgage Express 

Corporation (“American Mortgage Express”) as the original 

lender and Defendant-Appellee MERS as the beneficiary for 
6 PEREZ V. MERS

American Mortgage Express and American Mortgage 

Express’s “successors and assigns.” The loan was sold three 

times; Defendant-Appellee Bank of New York Mellon 

currently owns the loan.

There are no allegations that any foreclosure proceedings 

have been initiated against Appellants relating to this 

property. The record indicates that Appellants are 

consistently making their mortgage payments and are not in 

default.

C.

Appellants filed the underlying actions against MERS 

and the banks in California state court. Both actions were 

removed to federal court based on diversity jurisdiction.

In each action, Appellants filed claims seeking 

declaratory relief and cancellation of instruments as to the 

banks and MERS, and quiet title as to only the banks. They 

sought declarations that the banks had no legal rights in the 

underlying notes or deeds of trust, and that the banks did not 

have authority to collect mortgage payments or to initiate 

foreclosure proceedings. Appellants sought unencumbered 

titles to their properties and permanent injunctions to prevent 

the banks from collecting mortgage payments or foreclosing 

on the properties. Appellants base their claims for relief on 

alleged defects in the assignments of the underlying deeds of 

trust, such that, Appellants contend, the banks never 

received any beneficial interest in the loans. The district 
PEREZ V. MERS 7

courts dismissed the complaints for failure to state plausible 

claims for relief under California law.2

II.

Appellants seek reversal of the district courts’ dismissals 

of their complaints. We review a district court’s dismissal 

of a complaint de novo. Yagman v. Garcetti, 852 F.3d 859, 

863 (9th Cir. 2017). “To survive a motion to dismiss, a 

complaint must contain sufficient factual matter, accepted as 

true, to ‘state a claim to relief that is plausible on its face.’” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

We apply California law to these removed diversity 

actions. Vestar Dev. II, LLC v. Gen. Dynamics Corp., 

249 F.3d 958, 960 (9th Cir. 2001).

A.

Appellants’ claims are premised on the theory that they 

can preemptively challenge the banks’ authority to foreclose 

on their properties by filing judicial actions before any 

nonjudicial foreclosure has taken place. The controlling 

question before us is whether such preemptive, preforeclosure actions are viable under California law.

When interpreting California law, we are bound by the 

decisions of the California Supreme Court, the state’s 

highest court. Vestar, 249 F.3d at 960. If there are no such 

decisions, and “where there is no convincing evidence that 

2 In Perez II, the district court dismissed the original complaint with 

leave to amend. The district court then dismissed the amended complaint 

without leave to amend because the amended complaint failed to add 

“any new or different operative facts.”
8 PEREZ V. MERS

the state supreme court would decide differently, a federal 

court is obligated to follow the decisions of the state’s 

intermediate appellate courts.” Id. (quoting Lewis v. Tel. 

Emps. Credit Union, 87 F.3d 1537, 1545 (9th Cir. 1996)).

The California Supreme Court has not directly answered 

the question of whether preemptive, pre-foreclosure actions 

are viable under California law.3 In Yvanova v. New Century 

Mortg. Corp., 365 P.3d 845, 858–59 (Cal. 2016), the 

California Supreme Court held that, in an action for 

wrongful foreclosure, borrowers have standing to challenge 

prior assignments of the note if they allege the assignment 

was void, as compared to voidable. The California Supreme 

Court expressly limited its holding to post-foreclosure 

actions for wrongful foreclosure, explaining that the holding 

did not apply to borrowers who “attempt to preempt a 

threatened nonjudicial foreclosure by a suit questioning the 

foreclosing party’s right to proceed,” id. at 848, or to 

borrowers who bring “action[s] for injunctive or declaratory 

3 Before deciding Yvanova, the California Supreme Court granted 

review of a pre-foreclosure action in Keshtgar v. U.S. Bank, 334 P.3d 

686 (Cal. 2014), but deferred a decision until after the court reached a 

decision in Yvanova. After Yvanova, the California Supreme Court 

decided not to reach the underlying question raised in Keshtgar—the 

viability of preemptive, pre-foreclosure actions—and instead vacated 

and remanded the decision for the Court of Appeal to reconsider in light 

of Yvanova. See Keshtgar v. U.S. Bank, 368 P.3d 921 (Cal. 2016). On 

remand, the Court of Appeal held that Yvanova did not displace prior 

California precedent that preemptive actions to prevent foreclosure are 

not allowed. See Keshtgar v. U.S. Bank, No. B246193, 2016 WL 

4183750, at *3 (Cal. Ct. App. Aug. 8, 2016).
PEREZ V. MERS 9

relief to prevent a foreclosure sale from going forward,” id.

at 855.4

Because California’s highest court has not yet addressed 

the question of whether preemptive, pre-foreclosure actions 

are viable under California law, we look to the relevant

decisions of the California intermediate appellate courts. 

See Vestar, 249 F.3d at 960.

In Gomes v. Countrywide Home Loans, Inc., 121 Cal. 

Rptr. 3d 819, 822 (Cal. Ct. App. 2011), a defaulting 

borrower brought a legal action to challenge whether the 

defendants were authorized to foreclose on his property. The 

Court of Appeal held that California’s comprehensive 

statutory scheme for nonjudicial foreclosures did not permit 

a borrower to bring a judicial action before a foreclosure had 

taken place to challenge whether a foreclosing party was 

authorized to foreclose. Id. at 824 (“[N]owhere does the 

statute provide for a judicial action to determine whether the 

person initiating the foreclosure process is indeed 

authorized, and we see no ground for implying such an 

action.”). The intermediate appellate court reasoned that 

allowing borrowers to bring such pre-foreclosure actions 

would impermissibly interject courts into California’s 

“comprehensive nonjudicial scheme” of foreclosure and 

“fundamentally undermine the nonjudicial nature of the 

4 Appellants ignore this express limitation in Yvanova and dedicate 

most of their appellate briefing to argue that the assignments of their 

deeds of trust are void, rather than voidable, premised on the theory that 

the Yvanova holding applies to their pre-foreclosure cases. But we need 

not reach the question of whether the assignments were allegedly void 

or voidable because Yvanova’s holding does not apply to Appellants’ 

pre-foreclosure actions. See 365 P.3d at 848.
10 PEREZ V. MERS

process and introduce the possibility of lawsuits filed solely 

for the purpose of delaying valid foreclosures.” Id.

In Jenkins v. JP Morgan Chase Bank, N.A., 156 Cal. 

Rptr. 3d 912, 923 (Cal. Ct. App. 2013), a defaulting 

borrower brought a preemptive judicial action in part to 

determine whether the defendants had the authority to 

initiate nonjudicial foreclosure on her property. The Court 

of Appeal held that the borrower lacked a legal basis to bring 

her preemptive action under California’s statutory scheme 

for nonjudicial foreclosure.5 Id. at 925. Reviewing prior 

California appellate decisions, including Gomes, this second 

California intermediate appellate court explained: 

“California courts have refused to delay the nonjudicial 

foreclosure process by allowing trustor-debtors to pursue 

preemptive judicial actions to challenge the right, power, and 

authority of a foreclosing ‘beneficiary’ or beneficiary’s 

‘agent’ to initiate and pursue foreclosure.” Id. at 924.

In Saterbak v. JPMorgan Chase Bank, N.A., 199 Cal. 

Rptr. 3d 790, 793 (Cal. Ct. App. 2016), a defaulting 

borrower brought an action claiming that the foreclosing 

party lacked authority to foreclose on her property because 

the prior assignment of her deed of trust was void. Saterbak

was decided shortly after the California Supreme Court 

decided Yvanova. The Court of Appeal examined the 

Yvanova decision to determine whether it changed the 

viability of preemptive, pre-foreclosure actions in 

California. Id. at 795–96. This intermediate appellate court 

held that Yvanova did not alter prior California precedent 

barring pre-foreclosure suits because Yvanova was 

5 In Yvanova, although the California Supreme Court disapproved 

of Jenkins on some grounds, the court declined to review or address this

aspect of the Jenkins opinion. 365 P.3d at 854.
PEREZ V. MERS 11

“expressly limited to the post-foreclosure context.” Id.

at 796. Accordingly, the court dismissed the action, holding 

that preemptive, pre-foreclosure actions were still not viable

under California law. Id. at 795.

But in Brown v. Deutsche Bank National Trust Co., 

201 Cal. Rptr. 3d 892, 896 (Cal. Ct. App. 2016), the Court 

of Appeal, although not deciding the question of whether 

pre-foreclosure actions are viable after Yvanova, noted that 

the California Supreme Court could decide to extend its 

limited holding in Yvanova to cover some pre-foreclosure 

cases. The court explained that the reasoning in Yvanova

“raises the distinct possibility that [the California] Supreme 

Court would conclude that borrowers have a sufficient injury 

[from the initiation of foreclosure proceedings], even if less 

severe [than the injury from wrongful foreclosure], to confer 

standing to bring similar allegations before the [foreclosure] 

sale.” Id.

Although federal courts sitting in diversity cases cannot 

initiate an alteration of California state law, it is possible that 

the California Supreme Court could conclude that preforeclosure suits are to be considered viable in certain 

circumstances—as a federal district court decision cited by 

Appellants predicted it might. Lundy v. Selene Finance, 

L.P., No. 15-cv-05676, 2016 WL 1059423, at *13 (N.D. Cal. 

Mar. 17, 2016) (noting that “this Court does conclude that if

the California Supreme Court decides to adopt Jenkins’s bar 

to pre-foreclosure challenges, it will limit that bar only to 

claims that lack any ‘specific factual basis’”). But the 

existing California appellate cases demonstrate that, both 

before and after Yvanova, California appellate courts have 

dismissed preemptive, pre-foreclosure actions. There is no 

convincing evidence the California Supreme Court would 
12 PEREZ V. MERS

break with that precedent.6 Thus, we follow the decisions of 

the California appellate courts in holding that California law 

does not permit preemptive actions to challenge a party’s 

authority to pursue foreclosure before a foreclosure has 

taken place.

B.

Here, it is undisputed that no foreclosures have taken 

place. In Perez I, Appellants claim there was an initiation of 

foreclosure proceedings, as they received a notice of default 

in 2017 after filing their federal court complaint. But there 

are no allegations that this notice resulted in a foreclosure. 

In Perez II, Appellants do not allege any initiation of 

foreclosure proceedings, and it appears that Appellants are 

not even in default.

Because no foreclosures have taken place, Appellants’ 

suits are pre-foreclosure judicial actions that preemptively 

challenge the banks’ authority to foreclose on their 

properties in the future. Such actions are not viable under 

California law. Appellants do not state any valid claims 

6 The Ninth Circuit, in unpublished memorandum dispositions, has 

also regularly held that Yvanova did not alter the existing California 

precedent barring preemptive, pre-foreclosure suits. See, e.g., Wasjutin 

v. Bank of Am., N.A., 732 F. App’x 513, 516–17 (9th Cir. 2018) 

(“Nothing about Yvanova suggests that, contrary to longstanding 

precedent on this point, California now allows an action for wrongful 

foreclosure before a foreclosure takes place.”); Yagman v. Nationstar 

Mortg., LLC, 699 F. App’x 634, 635 (9th Cir. 2017) (“Yvanova provides 

no assistance to [a pre-foreclosure borrower]; his property has not been 

subject to a nonjudicial foreclosure. As we have in the past, we join the 

majority of courts that have declined to extend Yvanova.”). Because of 

the number of such similar litigations and appeals, we now write for 

publication to describe currently applicable California law.
PEREZ V. MERS 13

under California law, and we affirm the district courts’ 

dismissals of Appellants’ complaints.

III.

On appeal in Perez I, Appellants seek a determination 

that the district court abused its discretion by dismissing the 

complaint without leave to amend.7 We review for abuse of 

discretion the district court’s decision denying leave to 

amend. A.E. ex rel. Hernandez v. Cty. of Tulare, 666 F.3d 

631, 636 (9th Cir. 2012). If a complaint does not state a 

plausible claim for relief, a “district court should grant leave 

to amend even if no request to amend the pleading was made, 

unless it determines that the pleading could not possibly be 

cured by the allegation of other facts.” Lopez v. Smith, 

203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (quoting Doe 

v. United States, 58 F.3d 494, 497 (9th Cir. 1995)).

In Appellants’ opposition to the motion to dismiss, they 

requested leave to amend if the district court determined the 

complaint was “deficient.” The district court granted the 

motion to dismiss without leave to amend. In Appellants’ 

opening appellate brief in Perez I, they contend that, if they 

had been given the opportunity to amend their complaint, 

they would have included additional arguments and 

explanations as to why MERS lacked authority to execute 

the assignment of the deed of trust, and they would have 

attached the 2017 notice of default as an exhibit.

The district court did not abuse its discretion by denying 

Appellants leave to amend. The proposed amendments 

7 On appeal in Perez II, Appellants did not challenge the district 

court’s denial of their request for leave to amend in their opening 

appellate brief. We therefore deem this challenge waived. Tri-Valley 

CAREs v. U.S. Dep’t of Energy, 671 F.3d 1113, 1129–30 (9th Cir. 2012).
14 PEREZ V. MERS

would not have changed the determination that the action 

was a preemptive, pre-foreclosure action seeking to 

challenge the banks’ authority to foreclose, and that such an 

action is impermissible under California law. The notice of 

default did not indicate that a foreclosure had taken place, 

and thus the suit remained preemptive. The additional 

arguments and explanations relating to MERS’s assignment 

of the deed of trust are irrelevant here because they do not 

change the fact that Appellants filed their suit preemptively.

The district court properly determined that permitting 

Appellants leave to amend would be futile. Therefore, we 

hold that the district court in Perez I did not abuse its 

discretion by dismissing Appellants’ complaint without 

granting leave to amend.

AFFIRMED.