Filed 7/29/16 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION ONE

MOSHE YHUDAI ,
Plaintiff and Appellant
,

v.
IMPAC FUNDING CORPORATION, et al.
,
Defendant s and Respondent s

. B 26 2509
(Los Angeles County Super. Ct. No. BC495503 )

APPEAL from a judgment of the Superio r Court of Los Angeles County, Mel Red
Recana , Judge. Affirmed

.
Richard L. Antognini for Plaintiff and Appellant.
Reed Smith
, Michael Gerst, Kasey J . Curtis, and Elena Gekker for Defendants and Respondents

.

______2

Appellant M oshe Yhudai sued his lender and other parties alleging causes of
action arising from the nonjudicial foreclosure sale of his residence

. The trial court
sustained the respondent s’ demurrer to Yhudai’s second amended complaint without
leave to amend and entered a judgment dismissing the case with prejudice

. 1 Yhudai appealed. We affirm.

FAC TUAL AND PROCEDURAL SUMMARY
Yhuda i owne d a residen ce in Los Angeles

. In February 2007 he borrowed $1, 802 , 5 00 from Impac Funding
, and s ecured the loan with a deed of trust against the
residence

. Impac Funding is named a s the “l ender” and ME RS a s the “beneficiary

. ”
The deed of trust provides that (1) MERS “ is acting solely as a nominee for Le nder and Lender’ s successors and assigns ” and (2) Yhudai’s promissory note, together with the
deed of trust , “can be sold one or more times without prior notice to [Yhudai].” On March 29, 2007, Impac Funding sold Yhudai’s promissory note and other promiss ory notes to a certain securitized investment trust ( the ISA Trust )

. Deutsche Bank
is the trustee of the ISA Trust, which was formed under New York law pursuant to a pooling and service agreement ( PSA )

. 2 Under the PSA, in order for a loan to be included
in the ISA Trust, it must be transferred into the trust by the “closing date” of March 29,
2007. More than two years after the ISA Trust’s closing date, MERS, as nominee for Impac Funding, recorded an “Assignment of Deed of Trust
, ” purporting to assign to Deutsche Bank, as t rustee of the ISA Trust , “[a]ll beneficial interest” under the deed
of trust “together with the Promissory Note secured by said Deed of Trust ” (the 2009

1 Respondents are IMPAC Funding Corporation (Impac Funding ) , Mortgage Electronic Regist ration Systems, Inc. (MERS) , Deutsche Bank National Trust Company (Deutsche Bank) , as Trustee Under the PSA Relating to IMPAC Secured Assets Corp., Mortgage Pass

- Through Certificates, Series 2007

- 02, and Bank of America, N.A.

2 A securitize d investment trust is created by pooling the loans into a trust and selling to investors the right to receive the mortgage in terest and principal payments. ( Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 930, fn. 5 ( Yvanova ) .) T erms of the trusts and the rights and obligations of the parties are set forth in a pooling and service agreement . ( Ibid. )3

assignment). The 2009 assignment is dated August 31, 2009, signed on October 15,
2 009, and recorded in Los Angeles County on October 22, 2009. On February 22, 2012, Deutsche Bank, as trustee for the ISA Trust , recorded a substitution of trustee naming Recon T rust Company, N.A. (Recon T rust) the trustee under
the deed of trust

. The same day, ReconTrust recorded a notice of default and election

to sell the property pursuant to the deed of trust

. About three months later, ReconTrust recorded a notice of trustee’s sale

. O n June 15, 2012, ReconTrust conducted a trustee’s
sale and sold the p roperty to Deutsche Bank, as trustee for the ISA Trust. In his second amended complaint, Yhudai alleged t hat the 2009 assignment is
void because it occurred after the ISA Trust’s closing date, and that Deutsche Bank’s
and ReconTrust ’s actions , including t he trustee’s sale, are voi d because they are derived
from the void 2009 assignment

. 3 He asserted causes of action for : (1) negligent misrepresentation; (2) slander of title; (3) fraud; (4) quiet title; (5) declaratory and injunctive relief; and (6) viola tion of Business and Professions Code section 17200.
Yhudai sought damages and equitable relief, including orders nullifying and rescinding the foreclosure sale, cancellation of the notice of default and notice of trustee’s sale,
and a judgment quieting h is title to the property. The trial court sustained the respondent s’ demurrer to the entire pleading without leave to amend, and thereafter
entered a judgment of dismissal

. Yhudai appealed.

3 Yhudai also alleged that the person who signed the 2009 as signment on behalf of MERS was actually an employee of Bank of America, and that the February 20 12 substitution of trustee was forged or “robo

- sign[ed],” and therefore invalid. He further alleged that respondents violated the terms of an agreement, or “Consent Judgment,” entered into with the United States requiring respondents to offer and facilita te loan modifications to avoid foreclosure, and that respondents failed to comply with that agreement. On appeal, however, Yhudai makes no argument concerning these allegations and represents that his claims depend upon his allegation that the 2009 assign ment is void. B ased on that representation and the absence of relevant arguments, we do not consider these additional allegations.4 DISCUSSION
I

. Standard O

f Review On appeal from a judgment after the court sust ains a general demurrer without leave to amend, “ we determine whether the complaint states facts sufficient to constitute
a cause of action. ” ( Blank v. Kirwan (1985) 39 Cal. 3d 311, 318 .) “ ‘W e treat the demurrer as admitting all material f acts properly pleaded, but not contentions, deductions
or conclusions of fact or law. [Citation.] We als o consider matters which may be judicially noticed. ’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole a nd its parts in their context. [Citation.] ” ( Ibid. )
When the demurrer is sustained without leave to amend, we reverse if “ there is a reasonable possibility that the defect can be cured by amendment

. ” ( Ibid. )
II

. Yhudai’s Contention T hat T he 2009 Assig nment I

s Void

. In Yhudai’s opening brief on appeal, he acknowledge d that the viability of his
claims , as well as a proposed new cause of action for “ wrongful foreclosure, ” “turns

on his ability to challenge” the 2009 assignment. Th is challenge is based s olely on the premise that the 2009 assignment is void because it occur red after the ISA Trust’s closing
date , as established in the PSA. Our Supreme Court addressed a similar contention in Yvanova , supra , 62 Cal.4th
919. 4 In that case, the plaintiff secu red a loan with a deed of trust against her property.
As in the present case, the loan was sold to Deutsche Bank, as trustee for a n investment

trust. ( Id. at p p

. 925

- 926 .) Under the terms of that trust, the closing date for the transfer
of loans and tru st deeds into th e trust was January 27, 2007. ( I d. at p. 925. ) Almost
five years after that date, in December 2011, t he plaintiff ’s lender executed an assignment
of the deed of trust to Deutsche Bank , as trustee of the investment trust. Deutsche Bank
th en caused t he plaintiff’s property to be sold at a foreclosure sale

. ( Id. at pp. 924

- 925.)

4 Yvanova was decided after the respondents filed their initial brief on appeal. Yhudai discusses and relies on Yvanova i n his reply brief. We gave r espondents the opportunity to address the effect of Yvanova on this case and they filed a supplemental brief in response.5

The plaintiff in Yvanova alleged that the assignment of her deed of trust into the investment trust was void because it occurred after the investment trust’s clos ing date. ( Yvanova , supra , 62 Cal.4th at p. 925 .) The trial court sustained a demurrer to the complaint
, and this court affirmed. The Supreme Court reversed , and held that the plaintiff could state a cause of action for wrongful foreclosure if the assig nment of the deed of trust “was void, and not merely voidable at the behest of the parties to the assignment.” ( Id. at p. 923.) The court explained that “ only the entity holding the
beneficial interest under the deed of trust

— the original lende r, its ass ignee, or an agen t of one of these

— may instruct the trustee to commence and complete a nonjudicial
foreclosure. [Citations

. ] If a purported assignment nece ssary to the chain by which
the foreclosing entity claims that power is absolutely void, meaning of no legal for ce

or effect whatsoever [citations] , the foreclosing entity has acted without legal authority by pursuing a trustee’ s sale, and such an unauthorized sale constitutes a wr ongful foreclosure.” ( Id. at p. 935 ; see Sciarratta v. U.S. Bank Nationa l Assn. (2016)
247 Cal.App.4th 552, 564.) An assignment that is merely voidable , by contrast, does not support a wrongful
foreclosure action . “California law,” the Yvanova court explained, “ does not give a party personal standing to assert rights or inte rests belonging solely to others. [Citations.] When an assignment is merely voidable, the power to ratify or avoid the transaction lies solely with the parties to the assignment; the transaction i s not void unless and until one of the parties takes steps to make it so. A borrower who challenges a foreclosure on the ground that an assignment to the foreclosing party bore defects rendering it voidable could thus be said to assert an interest belonging solely to the parties to the assignment
rather than to herself. ” ( Yvanova , supra , 62 Cal.4th at p. 936 ; see also Glaski v. Bank of
America (2013) 218 Cal.App.4th 1079, 1094

- 1095 ( Glaski ) .) Yhudai is such a borrower. Significantly, Yvanova did not consider or decide whether the assignment of the plaintiff’s deed of trust to the investment trust after the trust’s closing date rendered the assignment void , and not merely voidable ; that question was a matter to be determined
after remand . ( Yvanova , supra , 62 Cal.4th at p p

. 936 & 942 .)6

In his second amended c omplaint, Yhudai alleged that the 2009 assignment is void
under New York law ( w hich he alleged governs the ISA Trust ) because it occurred after the closing date specified in the PSA

. He asserts that , under Yvanova , this allegation
is enough to survive the demurrer. We disagree. Altho ugh we must accept the truth
of Yhudai’s factual allegations when reviewing the ruling on a demurrer , we are not required to accept the truth of his legal conclusions . (See Yvanova , supra , 62 Cal.4th

at p. 925; Zelig v. Coun ty of Los Angeles (2002) 27 Cal.4th 1112, 1126.) In opposition to the demurrer, Yhudai relied on Glaski
, supra , 218 Cal.App.4th
1079 , to support his assertion that the 2009 assignment is void

. In Glaski , the plaintiff’s loan was pooled with other loans a nd transferred to a n investment trust formed under
New York law. ( Id. at p p

. 1083

- 1084.) Like Yhudai, t he plaintiff alleged that a purported assignment o f his note and deed of trust to the investment trust was ineffective because the assignment was made after the trust’s closing date

. ( Id. at p. 1084.) To
determin e whether there was “a legal basis for concluding that the trustee’s attempt to accept a loan after the closing date would be void as an act in contravention of the trust document” ( id

. at p. 1 096) , t he C ourt of Appeal looked to a New York statute, which provides: “ ‘ If the trust is expr essed in an instrument creating the estate of the tru stee, every sale, conveyance or other act of the trustee in contravention of the trust

. . . is void.’ ” ( Ibid. , quoting N.Y. Est. Powers & Trusts Law § 7

– 2.4

. ) In applying this
statute, t he court relied on a then

- recent decision by a New York trial court, Wells Fargo Bank, N.A. v. Erobobo ( N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A) [ 2013 WL 1831799 ] ( Erobobo I

), w hich involved a mortga ge that had been transferred to a n investment trust after the trust closing date. The Erobobo I court stated that “ ‘the acceptance of the note and mortgag e by the trustee after the date the trust closed, would be void.’ [Citations. ]” ( Glaski
, supra , at p. 1097, quoting Erobobo I , supra , 2013 WL 1831799 at *8 .)
Based on Erobobo I and a bankruptcy c ourt decision that followed Erobobo I ( In re Saldivar (Bankr. S.D.Tex. June 5, 2013, No. 11

- 10689) 2013 WL 2452699 ( Saldivar ) ) , Glaski concluded that the plaintiff’s “factual allegations regarding [the] postclosing date attempts to transfer his deed of trust into the [ investment trust] are7

sufficient to state a basis for concluding the attempted transfers were void.” ( Glaski
, supra , 218 Cal.App.4th at p. 1097.)
A fter Glaski was decided, a New York intermediate appellate court reversed
Erobobo I . ( Wells Fargo Bank, N.A. v. Erobobo ( N.Y.App.Div. 2015) 127 A.D.3d 1176, 1178 ( Erobobo II

) .) In r ejecting the trial court’s view of N ew York la w, t he higher court explained that the borrower in that case , “ as a mortgagor whose loan is owned by a trust, does not have standing to challenge the [mortgage assignee’s] possession or status as assignee of the note and mortgage based on purported noncomp liance with certain provisions of the [trust’s PSA ].” ( Ibid .) The trustee of the investment trust in that case
was thus entitled to summary judgment on its action to foreclose the mortgage. ( Ibid. )
S ubsequent cases have consistently rejected Erobobo I . (See, e.g., In re Jepson (7th Cir. 2016) 816 F.3d 942, 94 7 [“ New York courts consistently have held that an assignment that fails to comply with the terms of a trust agreement merely is voidable
and not void”]; Cocroft v. HSBC Bank USA, N.A. (7th Cir. 2 015) 796 F.3d 680, 690 ( Cocroft ) [rejecting borrower’s reliance on Erobobo I in light of reversal in Erobobo II ] ; Ferguson v. Bank of New York Mellon Corp. (5th Cir. 2015) 802 F.3d 777, 782

- 7 83 [based on Erobobo II
, court construed New York law such that v iolation of a PSA
would render challenged assignment of deed of trust “ at most voidable but not void ”]; Rajamin v. Deutsche Bank Nat. Trust Co. (2d Cir. 2014) 757 F.3d 79, 90 ( Rajamin ) [under New York law, unauthorized acts of trustee of investment trust w ere “ not void
but voidable ”]; Butler v. Deutsche Bank Trust Co. Americas (1st Cir. 2014) 748 F.3d 28, 37, f n. 8 [ even before Erobobo II
, “the vast majority of cou rts to consider the
issue have rejected Erobobo ’s [ I ] reasoning, determining that

. . . the ac ts of a trustee
in contravention of a trust may be ratified, and are thus voidable” ] .) Saldivar
, supra , t he bankruptcy court case Glaski cited
, has received simil ar negative treatment. (See Berezovskaya v. Deutsche Bank Nat. Trust Co. (E. D .N.Y. Aug. 1, 20 14,
No. 12 CV 6055 (KAM) ) 2014 WL 4471560 at *6

- 7; Koufos v. U.S. Bank, N.A. (D.Mass. 2013) 939 F.Supp.2d 40, 57 , fn. 2; In re Stanworth (Bankr. E.D. Va. 2016)
543 B.R. 760, 777 .)8

The rejection of Erobobo I is based on sound reason ing

. Under New York law, unauthorized acts by trustees may generally be approved, or ratified, by the trust
beneficiaries. ( Rajamin , supra , 757 F.3d at p. 88 ; Mooney v. Madden ( N.Y.App.Div. 1993) 193 A.D.2d 933, 934 .) Under Erobobo I , however, a stranger to the trust w ould
have standing to assert that the unauthorized transaction is void, thereby giving “ the stranger

. . . the power to interfere with the beneficiaries’ right of ratification.” ( Rajamin , supra , at p. 89 .) The stranger’s right (under Eroboba I ) to declare a transa ction void
would thus conflict directly with the beneficiaries’ right to ratify the transaction. This
conflict is avoided by rejecting Erobobo I : Because a trust beneficiary under New York law “retains the authority to ratify a trustee’s ultra vires act, such as a late transfer [ , ]

. . . the act

. . . must not be void; it must merely be voidable .” ( Cocroft , supra , 796 F.3d

at p. 6 89 .)
Because the decision upon which Glaski relied for its understanding of New York
law has not only been reversed, but sound ly and overwhelming ly rejected, we decline

to follow Glaski on this point. (See Saterbak v. JPMorgan Chase Bank, N.A. (2016)
245 Cal.App.4th 808, 815
, fn. 5 ( Saterbak ) [rejecting Glaski because “the New York case upon which Glaski relied has been overturn ed”] .) 5 Yhudai offers no other authority for
his contention . Based on the authorities cited above indicate, a post closing assignment o f

a loan to an investment trust that violat es the terms of the trust renders the assignment
voidable , not void, under Ne w York law. (See also Morgan v. Aurora Loan Services,
LLC (9th Cir. Mar. 28, 2016, No. 14

- 55203) 2016 WL 1179733 at *2 [“an act in violation of a trust agreement is voidable

— not void

—under New York law ”].)

5 Our Supreme Court’s decision in Yvanova approved of Glaski ’s holding that

a plaintiff has standing to assert a cause of action for wrongful foreclosure when “a purported assignment necessary to the chain by which the foreclosing entity claims that power is absolutely void.” ( Yvanova , supra , 62 Cal.4th a t p . 935.) The Court stated, however, that Glaski ’s further holding that the assi gnment of a deed of trust to

an investment trust was void because it occurred after the investment trust’s clo sing date was “not before” the C ourt , and it “express[ed] no opinion as to Glaski ’s correctness on the point.” ( Id. at p p

. 931 & 941 .)9

The reversal of Erobobo I and the judicial respo nse to it occurred after Yhudai
filed his second amended complaint and his opposition to the demurrer

. Yhudai now contends that New York law is “ irrelevant ” and “has no role in this case.” He points

to a choice of law clause in the deed of trust , which p rovides that the deed of trust is “governed by federal law and the law of the jurisdiction where the property is located,” i.e., California. 6 E ven if this clause governed the question whether the assignment is
void , Yhudai offered no citation to federal o r California authority (other than Glaski )

to support his assertion that the 2009 assignment is void be cause it was made after the
ISA Trust ’s closing date

. We therefore reject it. (See Cahill v. San Diego Gas & Electric
Co. (2011) 194 Cal.App.4th 939, 9 56 [arguments made without “ reasoned argument and citations to authority ” may be treated as waived].)
Yhudai also contends that he should not have to prove that the 2009 assignment
is void ; the respondents , he argues, should bear the burden of proving the validity of the
2009 assignment. He cites to cases in which a plaintiff purporting to be the assignee of

a contract right had the burden of proving it actu ally held the contractual right it was suing to enforce. ( See, e .g., Cockerell v. Title Ins. & Tru st Co. (1954) 42 Cal.2d 284, 292; Neptune Society Corp. v. Longanecker (1987) 194 Cal.App.3d 1233, 1242.) Here, however, Deutsche Bank has sued no one. Yhudai , as the plaintiff challenging

a nonjudicial foreclosure
, has the burden to prove it was wrongfu l. ( See Saterbak
,

6 California law does not support Yhudai’s claim. As Yvanova stated, “[t]he deed of trust

. . . is inseparable from the note it secures, and follows it even without a separate assignment.” ( Yvanova , supra , 62 Cal.4th at p. 927 ; see Civ. Code, § 2936 [“ The assignment of a debt secured by mortgage carries with it the security ”].) Thus, if the note was timely conveyed to the ISA Trust, as Yhudai alleged, so was the deed of trust. Although the conveyance of the note may have been separ ated in time from the execution, recording, and physical transfer of the instrument reflecting the assignment of the deed of trust, that gap does not alter the legal fact that the deed of trust and the right to foreclose was, as a matter of law, transferre d along with the note. (See U.S. v. Thornburg (9th Cir. 1996) 82 F.3d 886, 892 [even if party holding the deed of trust instrument fails “to hand [it] over” to the note holder, the note holder has the right to foreclose].) Under California law, therefore , there is no basis for Yhudai’s allegation that the deed of trust was assigned to Deutsche Bank after Deutsche Bank acquired the note.10

supra , 245 Cal.App.4th at pp. 813

- 814; Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1258; Fontenot v. Wells Fargo Bank, N.A. (2011)
198 Cal.App.4th 256, 270, disapproved on another point in Yvanova , supra , 62 Cal.4th

at p. 939, fn. 13.) Yhudai further contends that language in the deed of trust confers upon him,

as the borrower, the right to sue “to assert the non

- existence of a d efault or any
other defense

. . . to acceleration and sale.” Yhudai has not, however, as serted the

non existence of a default, and his only purported “defense” to foreclosure is that the
2009 assignment i s void. As explained above, we reject his legal conclusion that the assignment is void

. Even if language in the deed of trust mig ht have pr ovided Yhudai
with standing to assert a defense to prevent a foreclosure, it does not help him here

. (See Saterbak
, supra , 245 Cal.App.4th at pp. 816

- 817 .) Yhudai also argues that the deed of trust is an adhesion contract that “does not

use conspicuous and clear language to warn [him] that he has no power to challenge an invalid assignment of [his] loan.” The problem with Yhudai’s claims, however, is not
that the deed of trust precludes him from alleging an invalid assignment, but that he has
not suffic iently alleged an invalid assignment. Finally, Yhudai contends that he should be permitted to a mend to add a cause of action for wrongful foreclosure . T his proposed cause of action , however, is similarly dependent upon the allegation that the 2009 assi gnment i s void because it was made
after the ISA Trust’s March 2007 closing date. Because he has not alleged sufficient
facts to establish that critical allegation, the proposed new cause of action would also fail
as a matter of law.11 DISPOSITION The judg ment is affirmed. Respondents shall recover their costs on appeal.

CERTIFIED FOR PUBLICATION

.

ROTHSCHILD, P. J. We concur:

CHANEY, J.

LUI, J.