Filed 6/26/13 Didak v. Merrill Lynch Mortgage Investors CA2/7 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

SECOND APPELLATE DISTRICT 

DIVISION SEVEN 

MARK F. DIDAK et al., 

 Plaintiffs and Appellants, 

 v. 

MERRILL LYNCH MORTGAGE 

INVESTORS, INC. et al., 

 Defendants and Respondents. 

 B240704 

 (Los Angeles County 

 Super. Ct. No. SC114327) 

ORDER MODIFYING OPINION; 

NO CHANGE IN JUDGMENT 

THE COURT: 

 It is ordered that the opinion filed herein on June 12, 2013, and not certified for 

publication, be modified as follows: 

1. On page 7, footnote 5, lines 9-10 read as follows: 

“(See former Civ. Code, §§ 2924 et seq [amended by Stats. 2012, c. 86 (A.B. 278), 

§ 5].)” 

It should read: “(See Civ. Code, § 2944.)” 

 Appellant’s petition for rehearing is denied. The foregoing does not change the 

judgment. 

WOODS, Acting P. J. ZELON, J. SEGAL, J. (Assigned)
Filed 6/12/13 (unmodified version) 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

SECOND APPELLATE DISTRICT 

DIVISION SEVEN 

MARK F. DIDAK et al., 

 Plaintiffs and Appellants, 

 v. 

MERRILL LYNCH MORTGAGE 

INVESTORS, INC. et al., 

 Defendants and Respondents. 

 B240704 

 (Los Angeles County 

 Super. Ct. No. SC114327) 

 APPEAL from a judgment of the Superior Court of Los Angeles County, Cesar C. 

Sarmiento, Judge. Affirmed. 

 Law Office of Mark F. Didak and Mark F. Didak for Plaintiffs and Appellants. 

 Wolfe & Wyman, Stuart B. Wolfe and Cathy L. Granger for Defendants and 

Respondents Merrill Lynch Mortgage Investors, Inc., HSBC Bank, USA, as Trustee of 

the Merrill Lynch Mortgage Investors Series 2006-AF2, Merrill Lynch Mortgage 

Lending, Inc., Citimortgage, Inc., individually and as successor by merger to ABN Amro 

Mortgage Group, Inc. and Wells Fargo Bank. 

 Wright, Finlay & Zak, Charles C. McKenna and Peter Watson for Defendant and 

Respondent Cal-Western Reconveyance Corporation. 

 Arbogast Bowen and David M. Arbogast; Howard Law and Vincent Howard for 

Amicus Curiae Consumer Attorneys of California in support of Plaintiffs and Appellants. 
2 

Appellants Mark and Anna Didak appeal from the judgment entered upon the trial 

court’s order sustaining respondents’ demurrer without leave to amend. On October 13, 

2011, appellants filed a First Amended Complaint (“FAC”) against Merrill Lynch 

Mortgage Investors, Inc. (“MLMI”), HSBC Bank, USA, N.A. (“HSBC”), Merrill Lynch 

Investors Trust, purportedly a real estate mortgage investment conduit (“REMIC”), 

Merrill Lynch Mortgage Lending, Inc. (“MLML”), Citimortgage, Inc. (“Citi”), Wells 

Fargo Bank, N.A., Stewart Title of California, Inc., and Cal-Western Reconveyance 

Corporation (collectively, “respondents”). Appellants’ FAC alleged claims for fraud, 

quiet title, cancellation of deed of trust, declaratory relief, and wrongful credit reporting. 

Appellants also sought a temporary restraining order, a temporary injunction, and a 

permanent injunction against respondents. 

Here appellants argue that respondents lack authority to service their mortgage.1

Primarily, appellants allege respondents never received legal title to their mortgage due to 

a failed securitization of the mortgage under the governing pooling and servicing 

agreement (“PSA”). For the reasons set forth below, the trial court’s order sustaining 

respondents’ demurrer without leave to amend is affirmed. 

FACTUAL AND PROCEDURAL BACKGROUND2

On April 19, 2006, appellants executed a mortgage in favor of First Capital 

Mortgage on their condominium in Culver City, California. On June 1, 2006, First 

Capital sold appellants’ mortgage to ABN Amro Mortgage Group, Inc. (“ABN”) . 

According to appellants, ABN later sold the mortgage to an unidentified entity. 

 

1 Although in California promissory notes are secured by deeds of trust not 

mortgages, we use the term “mortgage” here for ease of reference. There is little 

practical difference between mortgages and deeds of trust. “[T]hey perform the same 

basic function, and [ ] a deed of trust is ‘practically and substantially only a mortgage 

with power of sale.’” (Domarad v. Fisher & Burke, Inc. (1969) 270 Cal.App.2d 543, 

553.) 

2 The facts are taken from appellants’ FAC. (See Howard Jarvis Taxpayers Assn. v. 

City of La Habra (2001) 25 Cal.4th 809, 814 [we assume the truth of the plaintiffs’ 

pleaded facts when reviewing a judgment of dismissal following a sustained demurrer].) 
3 

Following ABN’s assignment of appellants’ mortgage to the unidentified entity, Citi 

acquired ABN through a merger. 

Appellants’ challenge primarily relies, however, on another purported transfer of 

appellants’ mortgage in 2006. During that year, MLMI, MLML, and HSBC purportedly 

created a real estate mortgage investment conduit (“REMIC”) pursuant to a pooling and 

servicing agreement (“PSA”). Respondents have claimed legal title to appellants’ 

mortgage since 2006, citing transfer of the mortgage to the REMIC pursuant to the terms 

of the PSA. Since that time, Citi has represented itself as the authorized servicer for 

appellants’ loan. Since the purported creation of the REMIC in 2006, Citi has collected 

more than $147,000 in monthly mortgage payments from appellants. 

In March, 2011, appellants stopped making their monthly mortgage payments to 

Citi.3 Soon after, Citi engaged in numerous written and oral communications with 

appellants, in which Citi sought to collect further mortgage payments from appellants. 

Appellants refused to make further payments until Citi proved ownership of their 

mortgage. As a result, Citi retained Cal-Western to serve as its agent for the potential 

foreclosure on appellants’ condominium. Around July 12, 2011, Cal-Western recorded a 

notice of default on appellants’ mortgage and initiated foreclosure proceedings. 

According to appellants, respondents never obtained authority to service their 

mortgage due to a failed securitization of the mortgage under the terms of the PSA. 

Alternatively, appellants allege respondents never obtained authority to service their 

mortgage because ABN aliened its interest in appellants’ mortgage prior to ABN’s 

merger with Citi, when it assigned the mortgage to an unidentified entity. Therefore, 

appellants allege that Citi never obtained authority to collect payments on their mortgage 

or foreclose on their home. 

 

3 Appellants have not claimed that they have continued making mortgage payments 

to any other entity. 
4 

Based on these allegations, appellants filed a complaint alleging the following 

causes of action: (1) fraud, (2) quiet title, (3) cancellation of deed of trust, (4) declaratory 

relief, (5) wrongful credit reporting, and (6) injunctive relief. 

Respondents filed a demurrer to appellants’ FAC. In support of their demurrer, 

respondents argued that appellants: (1) lacked standing to challenge the validity of the 

assignment of their mortgage under the PSA; (2) failed to plead sufficient facts to support 

a fraud cause of action; and (3) failed to tender the remainder of their loan obligation, 

thereby barring a claim for quiet title. In regard to appellants’ other claims, respondents 

argued that appellants failed to plead sufficient facts to show that respondents never 

received legal title to appellants’ mortgage. The trial court sustained the demurrer 

without leave to amend. This appeal followed. 

DISCUSSION 

I. Standard of Review 

This court applies a de novo standard of review to a trial court’s order of dismissal 

following an order sustaining a demurrer. (Los Altos El Granada Investors v. City of 

Capitola (2006) 139 Cal.App.4th 629, 650.) In other words, this court exercises its 

“independent judgment about whether the complaint states a cause of action as a matter 

of law.” (Ibid.) “In reviewing a judgment of dismissal after a demurrer is sustained 

without leave to amend, we must assume the truth of all facts properly pleaded by the 

plaintiffs, as well as those that are judicially noticeable.” (Howard Jarvis Taxpayers 

Assn. v. City of La Habra, supra, 25 Cal.4th at p. 814.) “A judgment of dismissal after a 

demurrer has been sustained without leave to amend will be affirmed if proper on any 

grounds stated in the demurrer, whether or not the court acted on that ground.” (Carman 

v. Alvord (1982) 31 Cal.3d 318, 324.) 

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.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Such a 
5 

showing can be made for the first time before the reviewing court. (Smith v. State Farm 

Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 711.) “The burden of proving 

such reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan, supra, 39 

Cal.3d at p. 318.) 

II. Applicable Law 

 The California Supreme Court has not addressed the issue of whether a borrower 

has standing to challenge the securitization of his or her mortgage under a PSA in a 

published opinion. Recently Division Three of the Fourth District Court of Appeal, in 

dicta noted that: “As an unrelated third party to the alleged securitization, and any other 

subsequent transfers of the beneficial interest under the promissory note, [the plaintiff 

homeowner] lacks standing to enforce any agreements, including the investment trust’s 

pooling and servicing agreement, relating to such transactions. (See In re Correia

(Bankr.1st Cir.2011) 452 B.R. 319, 324-325 [debtors lacked standing to raise violations 

of pooling and service agreement].)” (Jenkins v. JP Morgan Chase Bank, N.A. (2013) 

216 Cal.App.4th 497, ___, 2013 WL 2145098, at *9.) The court in Jenkins also cited the 

appellant’s lack of standing as a reason for affirming the trial court’s decision to deny her 

an opportunity to amend her complaint. (Id. at *10.) 

Notwithstanding a dearth of case law from California state courts on the matter, 

there are a number of federal opinions addressing this issue under California law. The 

overwhelming majority of these cases hold that borrowers lack standing to challenge 

whether their mortgages were properly securitized under the terms of the applicable PSAs 

when those borrowers were neither parties to, nor third-party beneficiaries of, the PSAs. 

(See Sami v. Wells Fargo Bank (N.D. Cal., Mar. 21, 2012, C 12-00108 DMR) 2012 WL 

967051, at *6 [“To the extent Plaintiff bases her claims on the theory that Wells Fargo 

allegedly failed to comply with the terms of the PSA, the court finds that she lacks 

standing to do so because she is neither a party to, nor a third party beneficiary of, that 

agreement”]; Junger v. Bank of America, N.A. (C.D. Cal., Feb. 24, 2012, CV 11-10419 

CAS VBKX) 2012 WL 603262, at *3 [“The Court finds that plaintiff lacks standing to 

challenge the process by which his mortgage was (or was not) securitized because he is 
6 

not a party to the PSA”]; Almutarreb v. Bank of New York Trust Co., N.A. (N.D. Cal., 

Sept. 24, 2012, C-12-3061 EMC) 2012 WL 4371410, at *2; Deerinck v. Heritage Plaza 

Mortg. Inc. (E.D. Cal., Mar. 30, 2012, 2:11-CV-01735-MCE) 2012 WL 1085520, at *5; 

Ramirez v. Kings Mortg. Services, Inc. (E.D. Cal., Nov. 8, 2012, 1:12-CV-01109-AWI) 

2012 WL 5464359, at *5.)4 

Additionally, federal courts throughout the country have reached similar 

conclusions when applying other states’ nonjudicial foreclosure laws. (In re Correia

(B.A.P. 1st Cir. 2011) 452 B.R. 319; In re Smoak (Bankr. S.D. Ohio 2011) 461 B.R. 510; 

In re Veal (B.A.P. 9th Cir. 2011) 450 B.R. 897; In re Walker (Bankr. E.D. Pa. 2012) 466 

B.R. 271; In re Washington (Bankr. W.D. Pa. 2012) 469 B.R. 587.) Although one federal 

case applying California law held that a borrower was entitled to challenge defendants’ 

authority to foreclose on their property based on an alleged violation of the governing 

PSA, that case involved a “unique set of facts” that are not present here. (See Wise v. 

Wells Fargo Bank, N.A. (C.D. Cal. 2012) 850 F.Supp.2d 1047, 1052; see also McGough 

v. Wells Fargo Bank, N.A. (N.D. Cal., June 18, 2012, C12-0050 TEH) 2012 WL 2277931 

[distinguishing Wise from the typical securitization challenges because the FAC in that 

case alleged a “fairly unique set of facts,” involving timely loan payments, a denial of a 

loan modification request, and fabricated loan documents].) 

 

4 “Although we may not rely on unpublished California cases, the California Rules 

of Court do not prohibit citation to unpublished federal cases, which may properly be 

cited as persuasive, although not binding, authority.” (Gomes v. Countrywide Home 

Loans, Inc. (2011) 192 Cal.App.4th 1149, 1155, fn. 6.) 
7 

A. Appellants Failed To Establish that Respondents Lack Authority to 

Service Their Mortgage5

In their FAC, appellants allege “[a] recent investigation into the chain of title to 

[appellants’] loan establishes that legal ownership of the loan was never transferred to 

HSBC in its capacity as trustee for MLMI REMIC, or in any other capacity, as required 

by (a) the Pooling and Service Agreement . . . and/or (b) New York law, which governs 

the PSA . . . .” (Emphasis added.) Thus, appellants primarily rely on an alleged violation 

of the PSA to argue that respondents lack authority to collect payments on appellants’ 

mortgage. As discussed above, this argument has been consistently rejected by federal 

courts interpreting California’s nonjudicial foreclosure statutory scheme. (See Sami, 

supra, 2012 WL 967051, at *6.) 

In their briefs on appeal, appellants attempt to sidestep the standing issue by 

asserting that they “are not suing to attack or enforce the PSA, or to attack the 

securitization of their mortgage.” Rather, appellants claim that the failed securitization is 

simply “evidence” that respondents never received legal title to their mortgage. This is 

essentially the same argument. Regardless of how framed or labeled all of their claims 

depend on the same contention – the mortgage was improperly securitized under the 

PSA. As nearly every court addressing this issue in a published opinion has recognized, 

borrowers who are not a party to, or a third party beneficiary of, the PSA lack standing to 

allege a failed transfer due to improper securitization. (Junger v. Bank of America N.A., 

 

5 Both parties devote discussion in their briefs to the issue of whether Article 3 of 

the California Commercial Code governs appellants’ mortgage. As the court in Gomes v. 

Countrywide Home Loans, Inc., supra, 192 Cal.App.4th 1149, recognized, California 

courts have refused to read additional requirements into California’s statutory nonjudicial 

foreclosure scheme, which is codified in the Civil Code. (Id. at p. 1154.) Because 

respondents recorded a notice of default in 2011, and appear to have initiated foreclosure 

proceedings, the Civil Code governs appellants’ mortgage. (See former Civ. Code, § 

2923.5 [amended by Stats. 2012, c. 86 (A.B. 278), § 5].) The sections of the Civil Code 

governing nonjudicial foreclosures do not refer to the California Commercial Code. (See 

former Civ. Code, §§ 2924 et seq [amended by Stats. 2012, c. 86 (A.B. 278), § 5].) 

Therefore, Article 3 does not govern appellants’ mortgage in this case. 
8 

supra, 2012 WL 603262, at *3; see also Rodenhurst v. Bank of America (D. Hawaii 

2011) 773 F.Supp.2d 866, 899 [“The overwhelming authority does not support a cause of 

action based upon improper securitization”].) As far as appellants’ causes of action rely 

on the allegation that respondents violated the terms of the PSA, the trial court properly 

sustained respondents’ demurrer on the ground that appellants lack standing to challenge 

the securitization of their mortgage. 

Appellants make a second attempt to sidestep the standing hurdle by alleging that 

ABN aliened its interest in appellants’ mortgage prior to ABN’s merger with Citi. 

Appellants are allowed to show for the first time before this Court that there is a 

reasonable possibility any defect in their pleadings can be cured by amendment. (See 

Smith v. State Farm Mutual Automobile Ins. Co., supra, 93 Cal.App.4th at p. 711.) 

However, they have failed to do so. When the matter was addressed at oral 

argument, appellants did not articulate a plausible theory of liability independent of any 

purported breach of the PSA. Likewise the appellate briefs do not offer a plausible 

alternative basis of liability. Appellants copied Paragraph 11 of their FAC and pasted it 

into their opening and reply briefs on appeal. Paragraph 11 alleges that “ABN Amro 

aliened any right, title or interest in plaintiffs’ loan by selling it in 2006 . . . to an entity 

whose identity is currently unknown.” Notwithstanding the allegation that some other 

entity owns the loan,6 appellants have not alleged that any entity, other than Citi, has 

made any attempts to collect mortgage payments from them since the purported 

transaction in 2006. (See Bernardi v. JPMorgan Chase Bank, N.A. (N.D. Cal., Jan. 6, 

2012, C-11-04543 RMW) 2012 WL 33894, at *2 [“Nor do plaintiffs allege that any third 

party has ever come forward attempting to enforce the debt, making plaintiffs’ claim yet 

more implausible”].) The failure to allege that any other entity has made efforts to collect 

on the note undermines any claim that the note was transferred prior to the time that Citi 

acquired ABN or that another entity other than REMIC owns appellants’ mortgage. 

 

6 Appellants do not dispute that they owe money on the mortgage obligation; they 

have not alleged that they have paid the outstanding balance owed on the note. 
9 

Appellants’ allegations are insufficient to support appellants’ claims that 

respondents lack authority to service their loan. In Javaheri v. JPMorgan Chase Bank, 

N.A. (C.D. Cal., Mar. 24, 2011, CV 10-08185 ODW FFMX) 2011 WL 1131518, an 

unpublished district court case cited by appellants, the court recognized that an allegation 

very similar to the one in the instant case was insufficiently pled because it could “only 

be characterized as a ‘legal conclusion couched as a factual allegation’ which the Court is 

not bound to accept.” (Id. at *2, quoting Bell Atlantic Corp. v. Twombly (2007) 550 U.S. 

544, 546 [127 S.Ct. 1955, 1959-60, 167 L.Ed.sd 929].) So too here, appellants attempt to 

couch a legal conclusion – that respondents never obtained legal title to their loan – as a 

factual allegation – that ABN transferred appellants’ mortgage to an unidentified entity. 

Thus, appellants have failed to plead facts sufficient to show respondents are not 

authorized to service their loan and have failed to demonstrate a reasonable possibility 

they could cure the defects in their pleading if afforded the opportunity to amend. 

B. Appellants Failed to Plead Sufficient Facts to Support Their Causes of 

Action Against Respondents 

As discussed above, appellants’ primary contention relies on the allegation that 

respondents never received legal title to appellants’ mortgage due to a purported violation 

of the PSA. Appellants argue their mortgage was improperly securitized as required by 

the PSA, and as a result, Citi lacks authority to service appellants’ mortgage. 

Alternatively, appellants allege that notwithstanding the purported violation of the PSA, 

respondents never received legal title to appellants’ mortgage due to a sale of the 

mortgage to an unidentified entity in 2006, prior to the creation the REMIC. 

Relying on these allegations, appellants seek to quiet title to their home, cancel the 

first deed of trust on their home, collect monetary damages for fraud and wrongful credit 

reporting, obtain a temporary restraining order against respondents, and obtain 

preliminary and permanent injunctions against respondents. For the reasons set forth 

below, appellants have failed to set forth facts sufficient to support their claims against 

respondents. 
10 

1. Fraud Cause of Action 

Appellants base their fraud cause of action on respondents’ “express and oral 

representations that it is the authorized servicer on plaintiffs’ loan.” As discussed above, 

appellants rely on the purported violation of the PSA to contend that respondents lack 

authority to service their loan. As far as appellants’ fraud claim is based on the purported 

violation of the PSA, the claim fails because appellants lack standing to challenge the 

securitization of their mortgage under the PSA. (See Sami, supra, 2012 WL 967051, at 

*6.) Therefore, because appellants lack standing to challenge the securitization of their 

mortgage under the PSA, the court properly sustained the demurrer to the fraud claim 

without leave to amend. (See Tarmann, supra, 2 Cal.App.4th at pp. 157-158.) 

2. Quiet Title Cause of Action 

In their second cause of action, appellants seek to quiet title to their property 

securing the mortgage at issue. To state a cause of action for quiet title, a plaintiff must 

plead: (1) a legal description of the property that is the subject of the action; (2) the title 

of the plaintiff and the basis upon which such title is asserted; (3) the adverse claims to 

the title of the plaintiff against which a determination is sought; (4) the date as of which 

the determination is sought; and (5) a prayer for the determination of the plaintiff against 

the adverse claims. (Code Civ. Proc., § 761.020.) 

Aside from adequately pleading the statutory elements, “[i]t is settled in California 

that a mortgagor cannot quiet his title against the mortgagee without paying the debt 

secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649; see also Horton v. Cal. 

Credit Corp. Ret. Plan (S.D. Cal. 2011) 835 F.Supp.2d 879, 893 [“even if [Code Civ. 

Proc., § 761.020] requirements are met, California courts have pronounced that in order 

to maintain a cause of action to quiet title, the mortgagor must allege tender or ability to 

tender the amounts admittedly borrowed”].) “This rule is based upon the equitable 

principle that he who seeks equity must do equity . . . a court of equity will not aid a 

person in avoiding the payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal.App.3d 

386, 390.) 
11 

Here, appellants admit they have paid only $147,000 on their mortgage. They 

have not alleged that they have paid off the remainder of their debt, and they have made 

no offer to tender the remainder of their debt. Therefore, appellants cannot maintain a 

quiet title action. (See Shimpones, supra, 219 Cal. at p. 649 [“[A] mortgager cannot quiet 

his title against the mortgagee without paying the debt secured”]; see also Lane v. Vitek 

Real Estate Industries Group (E.D. Cal. 2010) 713 F.Supp.2d 1092, 1103 [“As plaintiffs 

concede they have not paid the debt secured by the mortgage, they cannot sustain a quiet 

title action against defendants”].) 

For the reasons stated above, the trial court properly sustained the demurrer to the 

quiet title action without leave to amend. 

3. Cancellation of Deed of Trust Cause of Action 

In their third cause of action, appellants seek to cancel the deed of trust securing 

their mortgage. Civil Code section 3412 states, “[a] written instrument, in respect to 

which there is a reasonable apprehension that if left outstanding it may cause serious 

injury to a person against whom it is void or voidable, may, upon his application, be so 

adjudged, and ordered to be delivered up or canceled.” 

In their FAC, appellants allege that their deed of trust was transferred to 

respondents without the accompanying note, and “[b]ecause plaintiff’s [deed of trust] was 

transferred without the note, the [deed of trust] must be canceled and declared void, with 

full reconveyance to plaintiffs.” They have failed, however, to allege how this purported 

transaction (i.e., the transfer of the deed without the note) will result in serious injury if 

the deed of trust is not cancelled. (See Civ. Code § 3412; see also Malfatti v. Mortgage 

Electronic Registration Systems, Inc. (N.D. Cal., Nov. 29, 2011, C 11-03142 WHA) 

2011 WL 5975055 [granting dismissal on cancellation action when plaintiffs alleged only 

an improper recording of their mortgage and set forth no explanation for how such 

improper recording would result in serious injury].) 

In addition, appellants have not alleged that they have paid the outstanding 

balance owed on the note; they acknowledge that they have paid only a fraction of their 

obligation on their mortgage. As a result, some entity has an interest in receiving the 
12 

remainder of the obligation on appellants’ mortgage. Therefore, even if appellants’ note 

was never properly assigned to respondents as they allege, there are other parties who 

have an interest in receiving the remainder of the obligation. (See Mata v. Citimortgage, 

Inc. (C.D. Cal., Sept. 26, 2011, CV 10-9167 DSF PLAX) 2011 WL 4542723, at *3 

[“Plaintiffs also ask for a declaration that the improper assignment extinguished various 

rights held under the note or deed of trust or that Plaintiffs . . . otherwise do not owe 

money on their note(s) . . . . If Plaintiffs’ note was never assigned to Citimortgage or 

BofA, then there are other parties . . . who have an interest in those issues”].) Thus, any 

improper assignment to Citi would not serve to extinguish the rights and interests that 

others may have in the property. Consequently, the remedy appellants’ seek—“full 

reconveyance” would not be viable. 

For the reasons stated above, the trial court properly sustained the demurrer to the 

cancellation action without leave to amend. 

4. Declaratory Relief Cause of Action 

In their fourth cause of action, appellants seek a judicial declaration that no party 

other than appellants has any right, title or interest in appellants’ loan, property, and deed 

of trust. Under Code of Civil Procedure section 1060, “[a]ny person . . . who desires a 

declaration of his or her rights or duties with respect to another, or in respect to, in, over 

or upon property . . . may, in cases of actual controversy relating the legal rights and 

duties of the respective parties, bring an original action . . . for a declaration of his or her 

rights . . . .” 

Appellants base their declaratory relief claim on allegations that respondents never 

received legal title to their mortgage. Because appellants have failed to adequately plead 

that respondents never received legal title to their mortgage, their declaratory relief claim 

fails for the reasons set forth above. (See Sami, supra, 2012 WL 967051, *8.) 

Appellants’ declaratory relief claim fails for another reason as well. Appellants 

seek a declaration that respondents have no right to initiate or maintain foreclosure 

proceedings against appellants’ property and that such proceedings must immediately be 

terminated. As the Fourth District recognized in Gomes, “‘California appellate courts 
13 

have refused to read any additional requirements into the non-judicial foreclosure 

statute.’” (Gomes v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p. 1154.) 

This is so because California’s nonjudicial foreclosure scheme provides “a 

comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to 

a power of sale contained in a deed of trust.” (Ibid.) “‘These provisions cover every 

aspect of exercise of the power of sale contained in a deed of trust.’” (Ibid.) 

Here, appellants essentially seek a declaration that respondents lack the authority 

to foreclose on their property. Prior to the enactment of the Homeowner Bill of Rights 

(HBR) and the accompanying amendments to California’s statutory nonjudicial 

foreclosure scheme there was nothing in the scheme that authorized a plaintiff to seek 

declaratory relief establishing whether a defendant has the right to foreclose. (See Gomes 

v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p. 1154; see also Ramirez, 

supra, 2012 WL 5464359, at *10.) Therefore, because California’s nonjudicial 

foreclosure scheme must be applied as it existed at the time respondents recorded the 

notice of default in 2011, appellants cannot seek a declaration that respondents lack 

authority to service their mortgage. (See Myers v. Philip Morris Companies, Inc. (2002) 

28 Cal.4th 828, 841; see also McGough v. Wells Fargo Bank, N.A. (N.D. Cal., Oct. 22, 

2012, C12-0050 TEH) 2012 WL 5199411, at *5 (fn.4) [“[The HBR] amendments do not 

go into effect until Jan. 1, 2013 and there is no indication that the law is intended to be, or 

will be, applied retroactively”].) Therefore, the trial court properly sustained the 

demurrer to the declaratory relief claim. 

5. Wrongful Credit Reporting Cause of Action 

In their fifth cause of action, appellants allege that respondents breached Civil 

Code section 1785.25, subdivision (a), when they reported to consumer credit reporting 

agencies that appellants “were delinquent on their mortgage payments . . . when they 

knew or reasonably should have known that [appellants] were not delinquent . . . .” Civil 

Code section 1785.25, subdivision (a), provides: “A person shall not furnish information 

on a specific transaction or experience to any consumer credit reporting agency if the 

person knows or should know the information is incomplete or inaccurate.” In alleging a 
14 

violation of Civil Code section 1785.25, subdivision (a), appellants contend respondents 

“knew or reasonably should have known that plaintiffs were not delinquent because 

plaintiffs had and have no obligation to make payments on their loan to these 

[respondents] . . . .” 

As discussed above, appellants have failed to adequately allege respondents never 

received legal title to their mortgage. Further, appellants have failed to show that they 

have continued making regular mortgage payments to any entity. As a result, appellants 

have caused their own delinquency in the mortgage payment process. (See Javaheri v. 

JPMorgan Chase Bank, N.A. (C.D. Cal., Aug. 13, 2012, 2:10-CV-08185-ODW) 2012 

WL 3426278, at *6 [court recognizes that any injury suffered by the plaintiff was the 

result of his default on the mortgage].) Therefore, appellants have failed to show that 

respondents furnished any information that they knew or reasonably should have known 

was incomplete or inaccurate. (See Civ. Code, § 1785.25, subd. (a).) 

6. Preliminary Restraining Order and Injunctive Claims For 

Relief 

In their sixth cause of action, appellants assert claims for a preliminary restraining 

order, a temporary injunction, and a permanent injunction. “Injunctive relief is a remedy 

and not, in itself, a cause of action, and a cause of action must exist before injunctive 

relief may be granted.” (Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168.) 

Therefore, injunctive relief cannot be issued “if the underlying cause of action is not 

established.” (City of South Pasadena v. Department of Transportation (1994) 29 

Cal.App.4th 1280, 1293.) 

As discussed above, appellants have failed to state a cause of action based on their 

allegations that respondents never received legal title to their mortgage. Therefore, 

appellants have failed to state grounds upon which injunctive relief may be granted. (See 

Shell Oil Co., supra, 52 Cal.App.2d at p. 168; City of South Pasadena, supra, 29 

Cal.App.4th at p. 1293.) 

For the reasons stated above, the trial court properly sustained the demurrer to the 

wrongful credit reporting cause of action. 
15 

III. The Homeowner Bill of Rights Does Not Assist Appellants’ Cause 

Finally, in their opening brief, appellants contend that regardless of whether they 

lack standing to challenge the securitization of their mortgage under the terms of the 

PSA, they nevertheless have the right to demand respondents prove ownership of their 

mortgage under the newly enacted HBR. HBR went into effect January 1, 2013. (See 

Civ. Code, § 2923.4.) According to appellants, respondents recorded a notice of default 

on July 12, 2011. As discussed below, the newly enacted HBR does not grant appellants 

any additional rights than those that existed under California’s statutory nonjudicial 

foreclosure scheme at the time respondents filed the notice of default in 2011. 

“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., supra, 28 Cal.4th at p. 841.) 

Nowhere in its text does HBR state that it applies retroactively. Further, appellants do 

not point to any portion of the statutory scheme’s text or its legislative history that 

suggests that the California Legislature intended HBR to apply retroactively. Because 

HBR went into effect after respondents filed the notice of default in 2011, it does not 

grant appellants new rights upon appeal. Therefore, California’s nonjudicial foreclosure 

statutory scheme as it existed at the time respondents recorded the notice of default in 

2011 applies to this matter. 

DISPOSITION 

The judgment is affirmed. Respondents are entitled to costs on appeal. 

 WOODS, Acting P. J. 

We concur: 

 ZELON, J. SEGAL, J.* 

*Judge of the Los Angeles County Superior Court assigned by the Chief Justice pursuant 

to article VI, section 6 of the California Constitution.
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