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Filed 11/4/14 Morf v. MTDS, Inc. CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

GEORGE MORF,

Plaintiff and Appellant,

v.

MTDS, INC.,

Defendant and Respondent.

 A140010

 (Marin County

 Super. Ct. No. 1200148)

George Morf challenged the impending foreclosure of his home, alleging inter alia 

that the trustee that filed the notices of default and trustee’s sale, MTDS, Inc. (MTDS),1

lacked authority to enforce the deed of trust, committed fraud, and engaged in unfair 

business practices. The court sustained MTDS’s demurrer without leave to amend and 

awarded MTDS attorney fees under the terms of the deed of trust. Morf appeals only 

from the attorney fee award, challenging MTDS’s entitlement to fees. We affirm.

I. BACKGROUND

In 2005 and 2006, Morf obtained a $1.2 million mortgage loan (Mortgage) from 

Indymac Bank, F.S.B. (Indymac), secured by a deed of trust on his home (Deed of Trust), 

which named Fidelity National Title as trustee.2 The Deed of Trust was assigned a 

 

1 MTDS, Inc. and Meridian Trust Deed Service apparently are former business 

names of the entity now known as Meridian Foreclosure Service.

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In 2007, Morf obtained a $194,000 home equity loan from Indymac, also secured 

by a deed of trust on his home. In 2010, Indymac’s receiver, the Federal Deposit 

Insurance Corporation (FDIC), transferred the 2007 deed of trust to OneWest Bank, 

F.S.B. (OneWest).
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number of times between 2009 and 2011. An assignment recorded November 6, 2009

(dated Aug. 13, 2009) purported to transfer the Deed of Trust from Indymac to OneWest.

Morf alleged that Indymac was no longer in existence at the time of the assignment. 

OneWest recorded a substitution of trustee on November 20, 2009 (dated Aug. 12, 2009) 

substituting MTDS as trustee. On June 17, 2011, OneWest recorded a further assignment 

of the Deed of Trust (dated Nov. 17, 2010) to Deutsche Bank National Trust Company, 

as Trustee of the IndyMac INDA Mortgage Loan Trust 2007-AR7 (Loan Trust)—

apparently a securitized mortgage pool. At some point, the FDIC became receiver for 

IndyMac Federal Bank F.S.B. (IndyMac Federal), successor in interest to Indymac. On 

June 16, 2011, the FDIC as receiver for IndyMac Federal, recorded a “corrected” 

assignment of the Deed of Trust (dated Aug. 12, 2009) to correct the November 6, 2009

assignment from Indymac to OneWest.3 The corrected assignment also purported to 

transfer beneficial interest in the Deed of Trust to the same Loan Trust.

On August 13, 2009, MTDS recorded a notice of default under the Deed of Trust. 

In 2011, MTDS issued a notice of trustee’s sale on the property. In January 2012, Morf 

sued MTDS and others, seeking an injunction barring the foreclosure sale of his home, as 

well as damages and other remedies. Among other claims, he alleged the Deed of Trust 

was rendered unenforceable by securitization of his mortgage and improper assignments

of his loan.

As to MTDS, Morf alleged that the November 2009 substitution of trustee was 

ineffective because (1) OneWest had not been validly assigned the loan at that time; (2) it 

was not executed by an authorized corporate representative of OneWest as required by 

Corporation Code section 313; and (3) the substitution of trustee was improperly 

notarized after the document was signed. Accordingly, Morf argued, MTDS had no

authority to execute and record the notices of default or trustee’s sale. Based on these 

allegations, he stated claims for declaratory and injunctive relief, quiet title, and 

cancellation of instruments. He also brought a claim for fraud, alleging MTDS 

 

3 Recording was requested by the OneWest foreclosure department.
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suppressed files related to his loan and misrepresented the date of the foreclosure sale to 

gain an advantage over Morf and cause him to go further into default. Finally, he 

claimed MTDS’s conduct was part of a pattern of unfair business practices.

MTDS demurred to the complaint. MTDS asserted that a new substitution of 

trustee had been recorded on March 22, 2012, mooting Morf’s contentions regarding the 

November 2009 substitution. MTDS further argued that, even if it had not yet been 

properly substituted as trustee when it recorded the notice of default, it was authorized by 

statute to record that notice as an agent of the Deed of Trust beneficiary. (See also Civ. 

Code, § 2924, subd. (a)(1), (6).)4 The same statute shielded it from liability for wrongful 

foreclosure. (See § 2924, subd. (b).)5 In opposition, Morf continued to argue 

irregularities in the substitution of trustee, and he contended that MTDS could be held 

liable for attempting to foreclose on his property without clarifying the chain of title to 

the property.

The trial court sustained the demurrer in part with leave to amend. On the same 

date, Morf’s request for a preliminary injunction to stop the foreclosure was denied 

because “Defendants’ evidence shows that [the Loan Trust] is the holder of [Morf’s] loan 

and has standing to foreclose.” The court was later informed that Morf’s property was 

sold at a trustee’s sale in September 2012.

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On October 1, 2012, Morf filed a first amended complaint. MTDS again 

demurred. The court sustained the demurrer without leave to amend, finding that Morf 

had not alleged sufficient prejudice, as it was undisputed he was in default on his loan at 

 

4 Undesignated statutory references are to the Civil Code.

5 MTDS noted that it had filed a “Notice of Declaration of Nonmonetary Interest” 

pursuant to section 2924l, agreeing to be bound by the court’s nonmonetary orders, but 

Morf had objected to that notice.

6 On October 2, 2014, MTDS asked us to take judicial notice of a “Trustee’s Deed 

Upon Sale,” which was recorded on September 24, 2012. We ordinarily do not consider 

evidence that was not before the trial court when it made the order we are reviewing on 

appeal. (In re Zeth S. (2003) 31 Cal.4th 396, 405.) We find no reason to do so in this 

case, and the request for judicial notice is denied.
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the time the notice was recorded and the property was sold. The court entered judgment

for MTDS, and Morf did not appeal.7

MTDS then moved for an award of attorney fees under a fee-shifting provision of 

the Deed of Trust and section 1717. The Deed of Trust included the following relevant 

provisions.

“9. Protection of Lender’s Interest in the Property and Rights Under this 

Security Instrument. If (a) Borrower fails to perform the covenants and agreements 

contained in this Security Instrument, (b) there is a legal proceeding that might 

significantly affect Lender’s interest in the Property and/or rights under this Security 

Instrument . . . , then Lender may do and pay for whatever is reasonable and appropriate 

to protect Lender’s interest in the Property and rights under this Security Instrument . . . .

Lender’s actions can include, but are not limited to: . . . (b) appearing in court; and 

(c) paying reasonable attorneys’ fees to protect its interest in the Property and/or rights

under this Security Instrument . . . . [¶] Any amounts disbursed by Lender under this 

Section 9 shall become additional debt of Borrower secured by this Security Instrument. 

These amounts shall bear interest at the Note rate from the date of disbursement and shall 

be payable, with such interest, upon notice from Lender to Borrower requesting payment. 

[¶] . . . [¶]

“22. Acceleration; Remedies. Lender shall give notice to Borrower prior to 

acceleration following Borrower’s breach of any covenant or agreement in this Security 

Instrument . . . . If the default is not cured on or before the date specified in the notice, 

Lender at its option may require immediate payment in full of all sums secured by this 

Security Instrument without further demand and may invoke the power of sale and any 

other remedies permitted by Applicable Law. Lender shall be entitled to collect all 

expenses incurred in pursuing the remedies provided in this Section 22, including, but not 

limited to, reasonable attorneys’ fees and costs of title evidence. [¶] If Lender invokes the 

 

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The case continued against other defendants, including OneWest.
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power of sale, Lender shall [record a notice of default and sell the property at a public 

auction].” (Boldface after section title omitted.)

MTDS argued that, pursuant to section 1717, the Deed of Trust provisions giving 

the Lender a right to recover attorney fees “apply equally to all parties to [the] contract.” 

In opposition, Morf argued MTDS had not established that it was the trustee under the 

Deed of Trust or that Morf could have recovered attorney fees if he had prevailed against 

MTDS, thus allowing MTDS to recover under the mutuality principle of section 1717. 

The court granted the motion, awarding fees in the amount of $9,825.00: “[T]he

language in the Deed of Trust . . . authorizes the prevailing party to recover its attorney’s 

fees in any action challenging the authority and the rights of the Trustee under that Deed 

of Trust constitutes [sic] an ‘action on the contract’ within the meaning of . . .

[section] 1717. (See Valley Bible Center v. Western Title Ins. Co. (1983) 138 Cal.App.3d 

931, 932–933.)”

II. DISCUSSION

On appeal, Morf challenges MTDS’s entitlement to attorney fees. He does not

separately contest the reasonableness of the amount of fees awarded.

A. The Deed of Trust Fee Provision and Section 1717

In Valley Bible Center v. Western Title Ins. Co., supra, the case cited by the trial 

court, the Deed of Trust required the borrower to pay the costs of any action in which the 

lender or trustee appeared to defend its rights under the deed or protect the security of the 

deed. (138 Cal.App.3d at p. 932 [“ ‘Trustor agrees: . . . to pay all costs and expenses . . . 

in any such action or proceeding in which Beneficiary or Trustee may appear’ ”].) Here, 

as Morf correctly notes, the Deed of Trust only expressly authorizes “the Lender” to 

appear and incur costs in such actions, and it requires the borrower to reimburse only 

those costs (i.e., the lender’s costs). Morf argues that section 1717 therefore authorizes a 

reciprocal award of fees only against the lender, not against the borrower.

Section 1717, subdivision (a) provides in relevant part: “In any action on a 

contract, where the contract specifically provides that attorney’s fees and costs, which are 

incurred to enforce that contract, shall be awarded either to one of the parties or to the 
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prevailing party, then the party who is determined to be the party prevailing on the 

contract, whether he or she is the party specified in the contract or not, shall be entitled to 

reasonable attorney’s fees in addition to other costs.”

“The deed of trust is an agreement between three parties, to wit, a trustor (usually 

the debtor), the trustee (a neutral party), and the beneficiary (usually a creditor) 

(Lupertino v. Carbahal [(1973)] 35 Cal.App.3d 742, 747–748).” (Huckell v. Matranga

(1979) 99 Cal.App.3d 471, 481; see also Jenkins v. JPMorgan Chase Bank, N.A. (2013) 

216 Cal.App.4th 497, 518; Aviel v. Ng (2008) 161 Cal.App.4th 809, 816.) While the 

trustee ordinarily does not sign the deed of trust or expressly consent to being a party to 

the deed of trust (4 Miller & Starr, Cal. Real Estate (3d ed. 2013) § 10:4, pp. 10-30 to 10-

31), “[i]t is hornbook law a person who holds himself out as offering a service cannot 

complain if in reliance thereon another accepts the offer and agrees to the terms. Such a 

person becomes a party without being a signator.” (Huckell v. Matranga, at p. 481.) 

Thus, the trustee is a party to the deed of trust.

Because the Deed of Trust here “specifically provides that attorney’s fees and 

costs, which are incurred to enforce that contract, shall be awarded . . . to [the Lender], 

then the party who is determined to be the party prevailing on the contract, whether he or 

she is [the Lender] or not, shall be entitled to reasonable attorney’s fees in addition to 

other costs.” (§ 1717.) MTDS was the prevailing party on Morf’s claims against it for 

declaratory and injunctive relief, which claims were based on the Deed of Trust. 

(Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 347–348.) Thus, MTDS was 

entitled to its attorney fees. (See Huckell v. Matranga, supra, 99 Cal.App.3d at pp. 481–

482 [combined note and deed of trust, which gave lender right to attorney fees, would 

have given trustor right to fees against trustee had trustor prevailed against trustee, but 

trustor only prevailed against lender/beneficiary].) While other causes of action Morf 

pursued against MTDS may not have been “on the contract,” Morf does not argue on 

appeal that MTDS’s attorney fees were not properly allocated between contract and 

noncontract causes of action. Any such argument, therefore, is forfeited. (See Badie v. 

Bank of America (1998) 67 Cal.App.4th 779, 784–785.)
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Leach v. Home Savings & Loan Assn. (1986) 185 Cal.App.3d 1295, cited by Morf, 

is distinguishable. The plaintiff, Leach, filed a quiet title action challenging the validity 

of various deeds of trust signed by the trustee of property that was held in a testamentary 

trust. The defendants prevailed and sought fees under the terms of the deeds of trust. (Id.

at pp. 1298–1301.) Because Leach had not executed any of the deeds of trust, however, 

she could not have recovered fees had she prevailed. Therefore, the defendants had no 

reciprocal right to fees under section 1717. (Id. at pp. 1304–1307.) Unlike Morf, Leach 

was not part of the “tri-partite” deed of trust relationship.

B. Other Arguments

Morf argues that MTDS was not entitled to attorney fees under the Deed of Trust 

fee provision because the November 2009 substitution of trustee was ineffective, as 

OneWest was not the present beneficiary at that time. This argument is forfeited because 

Morf supports the argument with neither citations to the record nor with an adequate 

record. (See Guthrey v. California (1998) 63 Cal.App.4th 1108, 1115 [appellate court 

may treat as forfeited any factual contentions not supported by a citation to the record]; 

Rancho Santa Fe Assn. v. Dolan-King (2004) 115 Cal.App.4th 28, 46 [“[w]here the party 

fails to furnish an adequate record of the challenged proceedings, his claim on appeal 

must be resolved against him”].) Rather than provide citations for the specific factual 

representations he makes in his opening brief (see Cal. Rules of Court, 

rule 8.204(a)(1)(C)), Morf purports to cite large segments of the record in support of his 

statement of facts in a footnote in his brief, and citations in that footnote do not 

correspond to the clerk’s transcript on appeal.

Finally, Morf argues that the Deed of Trust authorizes recovery of attorney fees 

only by means of adding the fees to the secured debt and collecting on that debt through a 

trustee’s sale. This argument was not raised in the trial court is also consequently 

forfeited. (See Ward v. Taggart (1959) 51 Cal.2d 736, 742.)

III. DISPOSITION

The attorney fee order is affirmed. Morf shall bear MTDS’s costs on appeal.
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_________________________

BRUINIERS, J.

WE CONCUR:

_________________________

SIMONS, Acting P. J.

_________________________

NEEDHAM, J.