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Filed 10/29/20 Taasan v. CitiMortgage, Inc. CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or 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. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

MARLON TAASAN et al.,

Plaintiffs and Appellants,

v.

CITIMORTGAGE, INC.,

Defendant and Respondent.

 A156973

 (Solano County

 Super. Ct. No. FCS050686)

After their home was sold at a trustee’s sale, Marlon and Febes Taasan 

sued CitiMortgage, Inc., alleging several causes of action including wrongful 

foreclosure. Judgment was entered for CitiMortgage after the trial court 

sustained CitiMortgage’s demurrer to the Taasans’ First Amended Complaint

(FAC) without leave to amend. On appeal the Taasans argue that the trial 

court erred in dismissing their cause of action for wrongful foreclosure and in 

failing to grant them leave to amend that claim. We conclude that the 

Taasans fail to show error, and we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Allegations in the FAC

In February 2004, the Taasans obtained a loan of $252,000 from ABN 

AMRO to buy a home in Fairfield, California (the property). The loan was 

evidenced by a promissory note secured by a deed of trust on the property. As 
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the lender, ABN AMRO was identified as the beneficiary of the deed of trust. 

First American Title Insurance Company was identified as the trustee. 

ABN AMRO was merged into CitiMortgage, which subsequently held 

itself out as the lender. At some point before June 4, 2014, the Taasans’ loan 

was sold to Federal Home Loan Mortgage Corporation (Freddie Mac), though 

apparently no assignment was recorded. On separate occasions in June, 

August and November of 2014, CitiMortgage identified itself to the Taasans 

as “the servicer” of the mortgage that was owned by Freddie Mac. Among 

other things, CitiMortgage informed the Taasans that it had the right to 

collect payments on the loan. CitiMortgage also informed the Taasans, “As 

Servicer, we have the authority to act on the Owner’s behalf regarding the 

administration of your loan. We are responsible for collecting payments, 

answering questions about your account, and providing assistance if you have 

difficulty making your payments.” 

A key transaction in the Taasans’ chronology occurred in September 

2014, when CitiMortgage executed and recorded a substitution of trustee 

appointing Quality Loan Service Corporation (Quality) as the successor 

trustee of the DOT. The substitution of trustee stated that CitiMortgage, 

identified as “successor by merger to ABN AMRO,” was the “the present 

Beneficiary” under the DOT. The Taasans allege that at that time neither 

ABN AMRO nor CitiMortgage was the beneficiary under the DOT, which had 

been assigned to Freddie Mac, and that therefore neither “had any power to 

authorize a substitution of trustee at that time.” The Taasans contend that 

because the substitution of trustee was signed by CitiMortgage, which had no 

beneficial interest in the note, it was void (and not merely voidable) and thus 

Quality had no legal power to initiate and complete non-judicial foreclosure 

proceedings. 
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Quality issued and recorded a notice of default in October 2014 and a 

notice of trustee’s sale in February 2015. The Taasans admit owing money 

on the loan, but deny that they owed money to CitiMortgage, “who only acted 

as the servicer although purporting to be the actual lender / beneficiary.” The 

property was sold at a trustee’s sale on April 22, 2015 for $199,000, which the 

Taasans allege was below market value. The next month, Quality issued and 

recorded a trustee’s deed upon sale, which stated that the amount of unpaid 

debt together with costs was $271,481. Subsequently, the Taasans received a 

Form 1099-A, “Acquisition or Abandonment of Secured Property,” issued by 

“Freddie Mac c/o CitiMortgage” as “lender.” According to that document, the 

“date of lender’s acquisition or knowledge of abandonment” was April 22, 

2015, the date of the foreclosure sale.

B. Proceedings in the Trial Court

On April 19, 2018, the Taasans filed a complaint alleging four causes of 

action against CitiMortgage. In response to a demurrer filed by 

CitiMortgage, and as permitted by Code of Civil Procedure section 472, 

subdivision (a), the Taasans filed their FAC, alleging six causes of action: 

fraud/misrepresentation, cancellation of instruments, wrongful foreclosure, 

unfair competition, violation of Civil Code section 2924.17, and negligence. 

CitiMortgage again demurred, arguing that the Taasans had failed to state 

facts sufficient to constitute a cause of action.

The trial court issued a tentative ruling sustaining the demurrer 

without leave to amend. When neither party requested a hearing, the trial 

court adopted the tentative ruling as its order. Judgment was entered for 

CitiMortgage and the Taasans timely appealed.
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DISCUSSION

The Taasans challenge the trial court’s ruling only insofar as it 

concerns their claim for wrongful foreclosure. 

A. Applicable Law and Standard of Review 

To state a cause of action for wrongful foreclosure, a plaintiff must 

allege: “ ‘(1) the trustee or mortgagee caused an illegal, fraudulent, or 

willfully oppressive sale of real property pursuant to a power of sale in a 

mortgage or deed of trust; (2) the party attacking the sale (usually but not 

always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases 

where the trustor or mortgagor challenges the sale, the trustor or mortgagor 

tendered the amount of the secured indebtedness or was excused from 

tendering.’ ” (Miles v. Deutsche Bank National Trust Co. (2015) 236 

Cal.App.4th 394, 408, quoting Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 

89, 104.) The Taasans do not allege tender; their theory is that they have 

alleged facts showing that they were excused from tender. 

We determine independently whether the complaint alleges facts 

sufficient to state a cause of action, assuming the truth of properly pleaded or 

implied factual allegations in the complaint. (Schifando v. City of Los 

Angeles (2003) 31 Cal.4th 1074, 1081 (Schifando).) We consider judicially 

noticed matters, and give the complaint a reasonable interpretation, reading 

it in context. (Ibid.) “We do not, however, assume the truth of contentions, 

deductions, or conclusions of fact or law.” (Moore v. Regents of University of 

California (1990) 51 Cal.3d 120, 125.)

If we conclude that the complaint does not state a cause of action, we 

decide whether there is a reasonable possibility that the complaint could be 

amended to cure the defects. (Schifando, supra, 31 Cal.4th at p. 1081.) The 

issue of amendment may be raised for the first time on appeal. (Code. Civ. 
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Proc., § 472c, subd. (a).) The plaintiff bears the burden to show what facts 

could be pleaded to cure the defects in the complaint if allowed the 

opportunity to amend, and meets that burden on appeal by enumerating the 

additional facts to be alleged and demonstrating how those facts establish a 

cause of action. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 

890 (Cantu).)

B. Analysis 

The Taasans argue that their FAC adequately alleges each of the three 

elements of a cause of action for wrongful foreclosure. The gravamen of their 

complaint is that CitiMortgage, having assigned the loan to Freddie Mac, was 

no longer the beneficiary of the deed of trust and thus could not have had any 

authority to identify itself as beneficiary in the recorded substitution of 

trustee. As a result, its substitution of Quality as the successor trustee was 

void and not merely voidable, and Quality could not lawfully foreclose on the 

property (first element). 

The Taasans further argue that by alleging foreclosure by an 

unauthorized entity they have alleged the requisite prejudice or harm to 

satisfy the second element. For this argument they rely on Sciarratta v. U.S. 

Bank National Assn. (2016) 247 Cal.App.4th 552, 555 (Sciarratta), which 

held, “a homeowner who has been foreclosed on by one with no right to do 

so—by those facts alone—sustains prejudice.” 

Finally, the Taasans rely on Glaski v. Bank of America (2013) 218 

Cal.App.4th 1079, to argue that because the trustee’s sale was predicated on 

a void document, it was unauthorized and void, and therefore they were 

excused from making tender (third element). (Id. at p. 1100 [“[t]ender is not 

required where the foreclosure sale is void, rather than voidable, such as 
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when a plaintiff proves that the entity lacked the authority to foreclose on the 

property”].) 

CitiMortgage points out that under the Civil Code a substitution of 

trustee may be executed by the authorized agent of a beneficiary: “A trustee 

named in a recorded substitution of trustee shall be deemed to be authorized 

to act as the trustee under the mortgage or deed of trust for all purposes from 

the date the substitution is executed by the mortgagee, beneficiaries, or by 

their authorized agents.” (Civ. Code, § 2934a, subd. (d)(1).) True enough. 

But the Taasans allege that CitiMortgage was not an authorized agent of 

beneficiary Freddie Mac with respect to execution of the substitution of 

trustee. 

CitiMortgage further asserts that the Taasans have not articulated any 

basis for questioning CitiMortgage’s authority to execute the document, but 

that is not strictly correct. On the basis of correspondence they received from 

CitiMortgage, the Taasans allege in the FAC that CitiMortgage assigned 

their loan to Freddie Mac before the substitution of trustee was executed. 

They further allege that CitiMortgage did not act as Freddie Mac’s agent in 

executing the substitution of trustee, based on the fact that CitiMortgage did 

not identify itself as an agent of Freddie Mac in the substitution of trustee, 

but instead identified itself as the beneficiary. 

CitiMortgage also notes that the Taasans have not cited any authority 

that required CitiMortgage to identify itself as Freddie Mac’s agent. That is 

beside the point. The Taasans have alleged that CitiMortgage was not acting 

as Freddie Mac’s agent in executing the substitution of trustee; CitiMortgage 

claims that it was. That is a dispute of fact and cannot be resolved on the 

record before us. There is no dispute that CitiMortgage represented to the 

Taasans that it had the authority to act on Freddie Mac’s behalf in certain 
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respects: indeed, the Taasans allege that CitiMortgage did in fact act on 

Freddie Mac’s behalf as servicer of the loan. But it does not follow that 

CitiMortgage had the authority to execute the substitution of trustee as 

beneficiary of the loan.1 

However, the Taasans’ allegation that CitiMortgage lacked the 

authority to execute the substitution of trustee as beneficiary gets them only 

so far. That is because simply alleging that CitiMortgage lacked authority to 

execute the document is not equivalent to alleging that the substitution of 

trustee is necessarily void (as opposed to voidable), nor is it equivalent to

alleging that the subsequent trustee’s sale was unauthorized, unlawful or 

void. (Burlingame v. Traeger (1929) 101 Cal.App. 365, 369 [“an allegation 

that an instrument is ‘illegal,’ ‘unauthorized’ or ‘void’ is but a conclusion of 

law”].)

The Taasans admit that they owed money on the loan, and they allege 

that the loan was owned by Freddie Mac, and that CitiMortgage had the 

authority to act on Freddie Mac’s behalf in certain respects. Significantly, 

they do not allege that Quality conducted the foreclosure sale for 

CitiMortgage rather than for Freddie Mac, and therefore they have not 

alleged that the foreclosure sale itself was unauthorized.

The Taasans argue on appeal that CitiMortgage, a mere servicer of the 

loan, foreclosed on the property in its own name and thus they were 

1 CitiMortgage refers us to an unpublished federal trial court opinion 

on a motion for summary judgment in which the court took judicial notice of 

Freddie Mac’s servicing guidelines, which undisputedly provided that 

servicers may act as record beneficiaries for deeds of trust owned by Freddie 

Mac. (Ditech Financial, LLC v. Vegas Property Services, Inc. (D.Nev. 2019) 

2019 WL 1428685 at *2.) The case is irrelevant to the matter before us, a 

demurrer in which there has been no request for judicial notice of documents 

governing the relationship between Freddie Mac and CitiMortgage. 
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prejudiced by virtue of a foreclosure conducted by an entity without the 

authority to foreclose. But the Taasans failed to plead that fact in the FAC, 

which simply alleges that Quality issued and recorded the notice of default 

and the notice of trustee’s sale, effected the trustee’s sale, and issued and 

recorded the trustee’s deed upon sale. The FAC does not allege that 

CitiMortgage foreclosed on the property or that CitiMortgage had Quality 

conduct the trustee’s sale in CitiMortgage’s name. Furthermore, the IRS 

Form 1099-A that the Taasans referenced in and attached to their FAC 

indicates that the foreclosure sale was indeed held for the benefit of lender 

Freddie Mac, and thus undercuts the Taasans’ argument on appeal.2 Thus, 

even if CitiMortgage had acted without authority in signing the substitution 

of trustee as beneficiary,3 the Taasans essentially concede that any such 

unauthorized action was subsequently ratified. 

The Taasans assert that if, as they allege, CitiMortgage lacked 

authorization to execute the substitution of trustee, the unauthorized act 

2 In advance of oral argument, we sent a memorandum to counsel 

asking them to be prepared to address the following issue: Does the Form 

1099-A attached to the FAC “identifying ‘Freddie Mac’ as ‘Lender’ affect the 

Taasans’ ability to allege that they were prejudiced or harmed by the 

trustee’s sale?”

3 Contrary to their suggestion in their opening brief on appeal, 

however, the Taasans did not prove that CitiMortgage acted without 

authorization in signing the substitution of trustee; they merely so alleged. 

The Taasans argue that as a matter of law CitiMortgage could not have been 

authorized to sign the substitution of trustee as beneficiary because Civil 

Code section 2322, subdivision (a) provides that “[a]n authority expressed in 

general terms, however broad, does not authorize an agent to . . . [a]ct in the 

agent’s own name, unless it is the usual course of business to do so.” But the 

Taasans do not allege that any agreement between Freddie Mac and 

CitiMortgage gave CitiMortgage only general authority, rather than specific 

authority. 
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could not be ratified because under Civil Code section 2313, “No unauthorized 

act can be made valid, retroactively, to the prejudice of third persons, without 

their consent.” But even if CitiMortgage’s execution of the substitution of 

trustee was unauthorized, the Taasans have not alleged that they were 

prejudiced by Freddie Mac’s ratification of the substitution of trustee. The 

Taasans were in default to Freddie Mac, Quality conducted a foreclosure sale, 

and Freddie Mac acknowledged the subsequent status of the debt in issuing 

the Form 1099-A that the Taasans refer to in the FAC. 

The Taasans argue that their case should be governed by Yvanova v. 

New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) or Sciarratta, 

supra, 247 Cal.App.4th 552. Those cases, however, rest on fact patterns

unlike those alleged by the Taasans and accordingly we do not find them 

persuasive here. In Yvanova, our Supreme Court was clear that its ruling 

was “narrow”: the Court held “only that a borrower who has suffered a 

nonjudicial foreclosure does not lack standing to sue for wrongful foreclosure 

based on an allegedly void assignment merely because he or she was in 

default on the loan and was not a party to the challenged assignment.” (62 

Cal.4th at p. 924.) But the Taasans have not alleged a void assignment of the 

underlying loan. The only assignment they allege is to Freddie Mac, and by 

pleading that Freddie Mac “was the owner of the loan” as a result of the 

assignment, they have alleged that the assignment was valid. 

In Sciarratta, the plaintiff alleged that the beneficiary of the deed of 

trust, Chase, recorded two assignments: one to Deutsche Bank in April of 

2009, and a second assignment to Bank of America in November 2009. (247 

Cal.App.4th at pp. 557-558.) The Court of Appeal ruled that the plaintiff had 

alleged that second assignment was void: Chase could not assign the loan to 

Bank of America, because it had no interest to assign, having previously 
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assigned its interest to Deutsche Bank. (Id. at p. 563.) Therefore, plaintiff 

alleged that Bank of America, which foreclosed on the property, had no right 

to foreclose, and, by alleging foreclosure by a non-debtholder, adequately

alleged harm or prejudice. (Id at pp. 565-566.) As we noted above, the 

Taasans have not alleged a void assignment.

In sum, we conclude that the Taasans have not adequately alleged an 

illegal foreclosure, nor have they adequately alleged prejudice or harm from 

the foreclosure. Accordingly, we need not reach the issue of tender. 

We turn now to the possibility of amendment. As plaintiffs, the 

Taasans have the burden to demonstrate how they could amend their First 

Amended Complaint to allege facts that would state a cause of action for 

wrongful foreclosure. (Cantu, supra, 4 Cal.App.4th at p. 890.) In opposing 

CitiMortgage’s demurrer in the trial court, the Taasans asserted that they 

should be granted leave to amend, but they did not identify any factual 

allegations that would cure the defects in the First Amended Complaint. In 

arguing for leave to amend in their opening brief on appeal, the only 

additional allegation they propose is that it is not the usual course of 

business for a servicer to foreclose in its own name. If it were added, this 

allegation would bolster the claim that CitiMortgage acted without 

authorization in executing the substitution of trustee if the Taasans alleged a 

general, rather than specific, agency agreement, but it would not constitute 

an allegation that the substitution of trustee was void, as opposed to 

voidable. Nor would it constitute an allegation that the trustee’s sale was 

unauthorized, because it is not an allegation that Quality conducted the 

foreclosure sale for CitiMortgage rather than for Freddie Mac. 
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DISPOSITION

The judgment is affirmed. CitiMortgage shall recover its costs on 

appeal.
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_________________________

Miller, J.

WE CONCUR:

_________________________

Kline, P.J.

_________________________

Richman, J.

A156973, Taasan et al. v. CitiMortgage, Inc.