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FILED

NOV 24 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. NC-13-1615-KuPaJu

 )

ANTON ANDREW RIVERA and DENISE ) Bk. No. 14-54193*

ANN RIVERA, )

 ) Adv. No. 14-05108

Debtors. )

_______________________________)

 )

ANTON ANDREW RIVERA; DENISE )

ANN RIVERA, )

 )

Appellants, )

 )

v. ) MEMORANDUM**

 )

DEUTSCHE BANK NATIONAL TRUST )

COMPANY, Trustee of Certificate)

Holders of the WAMU Mortgage )

Pass Through Certificate )

Series 2005-AR6, )

 )

Appellee. )

_______________________________)

Argued and Submitted on October 23, 2014

at San Francisco, California

Filed – November 24, 2014

Appeal from the United States Bankruptcy Court

for the Northern District of California

Honorable M. Elaine Hammond, Bankruptcy Judge, Presiding

*The bankruptcy case and adversary proceeding were

originally pending in the Oakland Division of the United States

Bankruptcy Court for the Northern District of California as

bankruptcy case no. 12-49703 and adversary proceeding

no. 13-04008. On October 15, 2014, the bankruptcy case and

adversary proceeding were transferred to the San Jose Division

and assigned new case numbers.

**This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8013-1.
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Appearances: Ronald H. Freshman argued for appellants; Stefan

Perovich of Keesal, Young & Logan argued for

appellee.

 

Before: KURTZ, PAPPAS and JURY, Bankruptcy Judges.

INTRODUCTION

Chapter 131 debtors Anton and Denise Rivera appeal from an

order dismissing their second amended complaint without leave to

amend and dismissing their adversary proceeding with prejudice. 

We have conducted a de novo review of the Riveras’ second

amended complaint against defendant Deutsche Bank National Trust

Company, Trustee of Certificate-Holders of the WAMU Mortgage Pass

Through Certificate Series 2005-AR6 (“DBNTC”). Based on our de

novo review, we conclude that some of the Riveras’ claims for

relief contain sufficient factual allegations to state a

plausible entitlement to recovery under a cognizable legal

theory. Some of their claims do not. Accordingly, we AFFIRM IN

PART, REVERSE IN PART, and REMAND for further proceedings.

FACTS

The Riveras’ second amended complaint contained five causes

of action, as follows: (1) to determine the extent and validity

of DBNTC’s lien; (2) for cancellation of written instruments;

(3) for slander of title; (4) for violation of California’s

Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.;

1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037. All "Civil Rule" references are to

the Federal Rules of Civil Procedure.

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and (5) for violation of the Federal Truth In Lending Act.,

15 U.S.C. § 1641(g).2

According to the Riveras’ second amended complaint, in 2004,

they refinanced their real property located in Bethel Island,

California, by obtaining a $440,000 loan from Washington Mutual

Bank. In 2008, the Office of Thrift Supervision shut down

Washington Mutual and appointed the FDIC as receiver for

Washington Mutual. The FDIC as receiver for Washington Mutual

then entered into a purchase and assumption agreement with

JP Morgan Chase Bank pursuant to which Chase purchased some of

Washington Mutual’s assets and assumed some of its liabilities. 

In 2012, Chase (as Washington Mutual’s successor in interest)

executed a corporate assignment of deed of trust, thereby

purporting to assign to DBNTC the deed of trust securing the

Riveras’ $440,000 loan.

Chase and DBNTC jointly filed a proof of claim in the

Riveras’ bankruptcy case asserting that DBNTC is a secured

creditor and the holder of the Riveras’ $440,000 promissory note

and that Chase is DBNTC’s servicing agent. The Riveras filed an

objection to that proof of claim asserting that neither DBNTC nor

Chase are entitled to enforce the note or to receive the payments

owed under the note and hence lack standing to file the proof of

claim.

2On DBNTC’s motions, the bankruptcy court dismissed with

leave to amend both the Riveras’ original complaint and their

first amended complaint. On appeal, the Riveras have not raised

any issues challenging either of these two dismissals, so our

review will be limited to the dismissal with prejudice of their

second amended complaint.

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The Riveras’ second amended complaint refers to and attaches

as an exhibit a copy of the deed of trust the Riveras signed in

order to secure the $440,000 loan. In turn, the deed of trust

refers to the promissory note the Riveras signed in exchange for

the $440,000 loan. A copy of the note is not attached to the

second amended complaint, but it is referenced in the complaint

at paragraphs 52-53. Paragraphs 50-53 focus on the proof of

claim DBNTC and Chase filed in the Riveras’ bankruptcy case. The

Riveras do not dispute that the copy of the note attached to the

proof of claim is a copy of the note they signed, but they do

challenge the authenticity, reliability and validity of the

endorsement stamped on the last page of the note – an undated

endorsement in blank purportedly signed by Leta Hutchinson as

Assistant Vice President for Washington Mutual Bank.

The Riveras allege that the endorsement on the note is

suspect for two reasons. First, they allege that, in an SEC

filing disclosing information about the mortgage securitization

trust for which DBNTC is trustee, the filing states that the

mortgage notes pooled into the trust would not be endorsed and

negotiated to the trust. And second, the Riveras allege that,

after the FDIC’s 2008 asset sale to Chase, Leta Hutchinson became

an officer of Chase. The Riveras in essence infer from the

above-referenced allegations that the Hutchinson endorsement is a

sham: (1) that Hutchinson did not actually endorse the Riveras’

note until 2012 – around the time Chase executed the assignment

of the deed of trust; and (2) that, in 2012, Hutchinson no longer

was an officer of the shut down Washington Mutual Bank and hence

no longer had any authority to endorse the note on behalf of

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Washington Mutual.

According to the Riveras, there were fatal problems not only

with the endorsement of the note, but also with the transfer of

Washington Mutual’s rights in the loan and the security. The

Riveras’ second amended complaint pled alternate theories. In

the first theory, the Riveras alleged that Chase’s purported

transfer of the security to the trust – by way of the 2012

corporate assignment of deed of trust – was void because Chase’s

purported 2012 assignment occurred seven years after the trust

pool was supposed to close, as specified in the pooling and

servicing agreement governing the securitization trust. Relying

on Glaski v. Bank of Am., N.A., 218 Cal.App.4th 1079, 1083

(2013), the Riveras reason that Chase’s attempted assignment was

void because the assignment violated the trust’s terms.

In the second theory, the Riveras allege that Chase could

not convey to DBNTC any interest in the loan or the security 

because Chase never acquired from Washington Mutual any interest

in the loan or security. The Riveras have offered two potential

explanations for this theory. First, they posit that the FDIC’s

2008 asset sale to Chase did not include Washington Mutual’s

rights with respect to the Rivera loan and security. And second,

they posit that, because the note never was properly negotiated

or otherwise properly transferred to Chase, neither Chase nor

DBNTC ever acquired any valid right in the loan or the security.3

3The Riveras admit in their opening appeal brief that their

legal argument – the one regarding the assignment of the security

being a nullity without a valid assignment of the underlying debt

– is new. See Aplt. Opn. Br. at pp. 16-17. Ordinarily, we will

(continued...)

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In short, the Riveras’ second amended complaint disputes 

every link in the chain of title through which DBNTC claims to

have acquired the right to enforce the Riveras’ note and deed of

trust. The Riveras contend that neither Washington Mutual nor

the FDIC as the receiver for Washington Mutual ever conveyed any

valid interest in these rights to Chase or DBNTC and that Chase

never conveyed any valid interest in these rights to DBNTC.

The Riveras filed their chapter 13 bankruptcy case in

December 2012. Within weeks, they commenced their adversary

proceeding against DBNTC seeking declaratory relief and to

determine the extent and validity of DBNTC’s claimed lien against

their property. The Riveras’ complaint also sought, among other

things, damages based upon DBNTC’s alleged recordation of “false

documents” and damages based on DBNTC’s alleged violation of

15 U.S.C. § 1641(g) (“TILA Claim”).

 After the bankruptcy court twice dismissed the Riveras’

complaint with leave to amend, and after the Riveras twice

amended their complaint, the court heard DBNTC’s motion to

dismiss the Riveras’ second amended complaint. The court ruled

at the hearing that the second amended complaint did not state a

3(...continued)

not consider issues raised for the first time on appeal. Scovis

v. Henrichsen (In re Scovis), 249 F.3d 975, 984 (9th Cir. 2001). 

However, we have discretion to do so when: “the issue is purely

one of law, does not affect or rely upon the factual record

developed by the parties, and will not prejudice the party

against whom it is raised.” Dream Palace v. Cnty. of Maricopa,

384 F.3d 990, 1005 (9th Cir. 2003). Here, we will exercise our

discretion to consider the Riveras’ additional argument. Because

this is an appeal from a Civil Rule 12(b)(6) dismissal, the

parties have not yet developed any factual record.

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valid claim for relief. In so ruling, the court acknowledged

that the second amended complaint sought to challenge DBNTC’s

claim that it is the holder of the Riveras’ note and was entitled

to enforce the note. But the court held that California law did

not require DBNTC to establish its status as holder of the note

or as a person entitled to enforce the note in order to conduct a

nonjudicial foreclosure of the property, citing Gomes v.

Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (2011). The

court further held that the Riveras lacked standing to challenge

the validity of the assignment between Chase and DBNTC because

the Riveras were not a party to that assignment, citing Dick v.

Am. Home Mortg. Servicing, Inc., 2013 WL 5299180 (E.D. Cal.

2013). Finally, the court held that the Riveras had not alleged,

as required, that any defects in the foreclosure process had

prejudiced the Riveras by interfering with their ability to make

payments owed on the loan, or that the original lender would not

have initiated foreclosure proceedings, citing Fontenot v. Wells

Fargo Bank, N.A., 198 Cal.App.4th 256 (2011).

Based on these holdings, the bankruptcy court determined

that the Riveras’ first through fourth claims for relief all

should be dismissed because these claims all hinged on the

Riveras’ defective challenge to DBNTC’s disputed status as the

holder of the note or the person entitled to enforce the note. 

As for the Riveras’ fifth claim – their TILA claim – it is not

entirely clear why the court ruled that this claim should be

dismissed. In spite of the Riveras’ allegations that they never

received notice of the purported change in owners of their home

loan as required under 15 U.S.C. § 1641(g), the court appears to

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have concluded that the Riveras had sufficient actual knowledge

of the change in ownership, as reflected in the Riveras’ court

filings, so that they were not entitled to any recovery on

account of 15 U.S.C. § 1641(g).

Finally, because the Riveras already had been given three

prior opportunities to file their complaint against DBNTC and had

not yet been able to state a viable claim for relief, the court

ruled that the complaint would be dismissed without leave to

amend and that the entire adversary proceeding would be dismissed

with prejudice.

The bankruptcy court entered its final dismissal order on

December 10, 2013, and the Riveras timely filed their notice of

appeal on December 23, 2013.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(A), (K) and (O). We have jurisdiction

under 28 U.S.C. § 158.

ISSUE

Did the bankruptcy court err when it dismissed the claims

for relief stated in the Riveras’ second amended complaint?

STANDARDS OF REVIEW

We review de novo the bankruptcy court's Civil Rule 12(b)(6)

dismissal. Barnes v. Belice (In re Belice), 461 B.R. 564, 572

(9th Cir. BAP 2011).

CIVIL RULE 12(b)(6) STANDARDS AND JUDICIAL NOTICE STANDARDS

When we review a matter de novo, we consider the matter anew

as if the bankruptcy court had not previously ruled. Sachan v.

Huh (In re Huh), 506 B.R. 257, 262 (9th Cir. BAP 2014) (en banc). 

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Therefore, we apply the same standards to Civil Rule 12(b)(6)

dismissal motions that all other federal courts are required to

apply. In re Belice, 461 B.R. at 572-73.

Under Civil Rule 12(b)(6), made applicable in adversary

proceedings by Rule 7012, a complaint may be dismissed for

“failure to state a claim upon which relief can be granted.” 

To survive a Civil Rule 12(b)(6) dismissal motion, a complaint

must present cognizable legal theories and sufficient factual

allegations to support those theories. See Johnson v. Riverside

Healthcare Sys., LP, 534 F.3d 1116, 1121-22 (9th Cir. 2008). As

the Supreme Court has explained:

a complaint must contain sufficient factual matter,

accepted as true, to state a claim to relief that is

plausible on its face. . . . A claim has facial

plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference

that the defendant is liable for the misconduct

alleged. . . . Threadbare recitals of the elements of

a cause of action, supported by mere conclusory

statements, do not suffice.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations and

internal quotation marks omitted).

In reviewing the sufficiency of a complaint under Civil

Rule 12(b)(6), we must accept as true all facts alleged in the

complaint and draw all reasonable inferences in favor of the

plaintiff. See Newcal Indus., Inc. v. Ikon Office Solutions,

513 F.3d 1038, 1043 n.2 (9th Cir. 2008). However, we do not need

to accept as true conclusory allegations or legal

characterizations cast in the form of factual allegations. See

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007).

We may use judicially noticed facts to establish that a

complaint does not state a claim for relief. Skilstaf, Inc. v.

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CVS Caremark Corp., 669 F.3d 1005, 1016 n.9 (9th Cir. 2012). We

can take judicial notice of the existence, filing and content of

documents in the Riveras’ underlying bankruptcy case. See

O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d

955, 957–58 (9th Cir. 1989).

We also may consider the existence and content of documents

attached to and referenced in the complaint as exhibits. Lee v.

City of L.A., 250 F.3d 668, 688 (9th Cir. 2001); Durning v. First

Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). Even when a

document is not physically attached to the complaint, we may

consider its existence and contents when its authenticity is not

contested and when it necessarily is relied upon by the

plaintiffs in their complaint. See United States v. Ritchie,

342 F.3d 903, 907–08 (9th Cir. 2003); Lee, 250 F.3d at 688.

Of course, just because a document states a “fact” does not

necessarily mean that this fact is true. Roth v. Jennings,

489 F.3d 499, 509 (2d Cir. 2007). Whether the facts stated in a

judicially noticed document are reasonably subject to dispute

depends on the nature of the facts stated and the nature and

purpose of the document as a whole. See Ferguson v. Wells Fargo

Bank, N.A., 2013 WL 504709, at **2-3 (E.D. Cal. 2013); see also 

Lee, 250 F.3d at 690.

DISCUSSION

Citing Gomes and Dick, the bankruptcy court held that the

Riveras had no right to dispute that DBNTC was the person

entitled to enforce the note and no right to challenge the

validity of the assignment of the deed of trust from Chase to

DBNTC. We disagree with the bankruptcy court on both points.

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Gomes was a state court lawsuit in which the plaintiff was

alleging that the agent who had initiated nonjudicial foreclosure

proceedings on behalf of the noteholder had not been authorized

by the noteholder to initiate those proceedings. Gomes,

192 Cal.App.4th at 1152. In order to protect California’s

comprehensive scheme of laws governing nonjudicial foreclosures,

Gomes held that there is no cognizable legal theory that enables

a borrower to obtain a pre-foreclosure judicial determination as

to whether the noteholder’s nominee or agent actually had been

authorized by the noteholder to initiate the foreclosure

proceedings. Gomes, 192 Cal.App.4th at 1155-57.

Thus, the holding in Gomes is not quite as expansive as the

bankruptcy court here treated it. This Panel recently examined

Gomes and was careful to articulate Gomes’s narrow holding:

[A]s a California court recently held, Cal.Civ.Code

§ 2924 “does not provide for a judicial action” when

the issue is not whether the wrong entity initiated

foreclosure but whether the entity was merely

authorized to do so by the owner of the note.

Cedano v. Aurora Loan Servs., LLC (In re Cedano), 470 B.R. 522,

531 (9th Cir. BAP 2012) (emphasis added) (citing Gomes,

192 Cal.App.4th at 1155). 

Meanwhile, in Dick, after a nonjudicial foreclosure had been

completed, the debtor-borrower commenced an adversary proceeding

for wrongful foreclosure, alleging that an assignment of the deed

of trust from the lender to the trustee of a securitization trust

was void because the assignment violated the trust’s terms, as

specified in the pooling and servicing agreement governing the

trust. See Dick, 2013 WL 5299180, at *1-2. The bankruptcy court

here construed Dick as holding that a debtor-borrower lacks

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standing to challenge the validity of an assignment of the deed

of trust for purposes of asserting that the foreclosure

proceedings were unauthorized. We acknowledge that the literal

language of Dick arguably might support the bankruptcy court’s

construction. See Id. Nonetheless, when one reads Dick’s

literal language in context and looks at the cases that Dick

cites, Dick only provides support for a more limited proposition: 

that the debtor-borrower cannot attack the assignment of a deed

of trust to the trustee of a securitization trust based on the

terms of a pooling and servicing agreement governing that trust

because the debtor-borrower is not a party to the pooling and

servicing agreement. Id. Furthermore, Dick acknowledged that

there was a split of authority on this issue and ultimately

declined to resolve the appeal based on this issue. Id. at *2-3. 

Instead, the court resolved the appeal based on the borrowers’

failure to allege harm or prejudice. Id.

On a more fundamental level, Gomes and Dick each involved a

direct attack on pending or completed nonjudicial foreclosure

proceedings, and each can best be understood as part of a series

of decisions protecting the comprehensive scheme of laws enacted

by the California legislature to regulate nonjudicial

foreclosures and aiming to keep such foreclosures relatively

inexpensive, expeditious and out of court. See Debrunner v.

Deutsche Bank Nat’l Trust Co., 204 Cal.App.4th 433, 442 (2012). 

In contrast, the Riveras’ second amended complaint arises in

a markedly different procedural context. While some aspects of

the second amended complaint might be construed as a direct

attack on the foreclosure proceedings initiated against the

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Riveras’ property, other aspects addressed DBNTC’s proof of claim

and its assertions therein that it held a secured claim and was

entitled to enforce the note. See, e.g., second amended

complaint at ¶¶ 50-53. 

It is clear from the bankruptcy court’s comments at the

hearing on the motion to dismiss the second amended complaint 

that the court understood the Riveras were alleging that DBNTC is

not the holder of the note and is not a person entitled to

enforce the note. Furthermore, we have no doubt that the

bankruptcy court considered DBNTC’s proof of claim to be at issue

in the adversary proceeding, at least in terms of whether DBNTC

was the person entitled to enforce the note and whether DBNTC 

had standing to file the proof of claim against the Riveras.4 

4If we had any doubt that the bankruptcy court intended its

rulings in the adversary proceeding to resolve these questions,

that doubt would be dispelled by the court’s comments at a

subsequent hearing in the Riveras’ bankruptcy case. At the

March 20, 2014 hearing on the Riveras’ objection to DBNTC’s proof

of claim, the court explicitly stated that its ruling disposing

of the Riveras’ adversary proceeding also disposed of the

question regarding DBNTC’s standing to file the proof of claim:

“The issues as to authority to enforce the note were brought

forth in the adversary proceeding which I have ruled on and that

I understand is on appeal, so those are being litigated in that

area and so [in these claim objection proceedings] we are looking

strictly at the amount of the claim on the objection to claim.”

Audio File of hearing (March 20, 2014) (attached to Bk. Dkt.

No. 12-49703 as Doc. No. 102). We may consider the court’s

comments at the March 20, 2014 hearing to the extent they

constitute the court’s interpretation of its own rulings. See

generally Rosales v. Wallace (In re Wallace), 490 B.R. 898, 906

(9th Cir. BAP 2013) (holding that we give significant deference

to the bankruptcy court’s interpretation of its own order).

At oral argument in this appeal, both the Riveras and DBNTC

argued that DBNTC’s proof of claim was not at issue in the

(continued...)

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This Panel previously has held that a debtor may object on

standing grounds to a proof of claim based on a note secured by a

deed of trust and that, unless the creditor establishes that it

is a person entitled to enforce the note (or an agent of such a

person), the claim objection should be sustained. See Veal v.

Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897,

919-21 (9th Cir. BAP 2011). As stated in In re Veal:

When debtors such as the Veals challenge an alleged

servicer's standing to file a proof of claim regarding

a note governed by Article 3 of the UCC, that servicer

must show it has an agency relationship with a “person

entitled to enforce” the note that is the basis of the

claim. If it does not, then the servicer has not shown

that it has standing to file the proof of claim.

* * *

As stated before, AHMSI presented no evidence as to who

possessed the original Note. It also presented no

evidence showing indorsement of the note either in its

favor or in favor of Wells Fargo, for whom AHMSI

allegedly was servicing the Veal Loan. Without

establishing these elements, AHMSI cannot establish

that it is a "person entitled to enforce" the Note. 

The Veals would thus have a valid claim objection under

§ 502(b)(1).

Id. at 920, 21.

Here, it is unnecessary for us to decide for purposes of

this appeal whether the Riveras’ note is a negotiable instrument

within the meaning of Cal. Com’l Code § 3104 and thus subject to

California’s Uniform Commercial Code provisions governing

negotiable instruments, as specified in Cal. Com’l Code

§ 3102(a). Even if the Riveras’ note does not qualify as a

4(...continued)

adversary proceeding, but the parties’ arguments on this point

are contrary to the bankruptcy court’s explicitly stated intent

regarding the scope of its rulings in the adversary proceeding.

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negotiable instrument covered by the Uniform Commercial Code, for

purposes of establishing DBNTC’s standing to file its proof of

claim and to overcome the Riveras’ objection to that claim, DBNTC

still would need to establish that the payment rights evidenced

by the note had been assigned or negotiated to it. As a matter

of general California contract law, an entity seeking to enforce

contract rights as an alleged assignee of those rights ordinarily

must show that the rights actually were assigned to it. See

Heritage Pac. Fin., LLC v. Monroy, 215 Cal. App. 4th 972, 988-89

(2013); Fontenot, 198 Cal.App.4th at 270.5 Without such proof,

as In re Veal generally teaches, DBNTC’s failure to establish its

standing would be fatal to its proof of claim. See In re Veal,

450 B.R. at 919.

With respect to the Riveras’ challenge to DBNTC’s assertion

of secured status, there is a similar dichotomy between the

Riveras’ rights for purposes of a nonjudicial foreclosure and

their rights for purposes of DBNTC’s assertion of secured status

in its proof of claim. California law indicates that, for

purposes of a non-judicial foreclosure, a party may foreclose

based solely on its status as an assignee of the lender’s rights

under the deed of trust without regard to who holds the

borrower’s note. See Siliga v. Mortg. Electr. Registration Sys.,

Inc., 219 Cal.App.4th 75, 84 n.5 (2013); Jenkins v. JP Morgan

Chase Bank, N.A., 216 Cal.App.4th 497, 512-13 (2013); Debrunner,

5For an overview of the different ways under California law

a lender might convey its payment rights to another outside the

Uniform Commercial Code provisions governing negotiable

instruments, see 4 Harry D. Miller & Marvin B. Starr, CAL. REAL

EST. § 10:43 (3d ed. 2014).

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204 Cal.App.4th at 440-42. But outside of the nonjudicial

foreclosure context, an attempted assignment of a mortgage or

trust deed without an assignment of the underlying debt is a

nullity. Kelley v. Upshaw, 39 Cal. 2d 179, 192 (1952); Wolfe v.

Leisure Time Sports, Inc. (In re Leisure Time Sports, Inc.),

194 B.R. 859, 861 (9th Cir.BAP 1996) (citing Union Supply Co. v.

Morris, 220 Cal. 331, 338–39, 30 P.2d 394, 397 (1934)); see also

Carpenter v. Longan, 83 U.S. 271, 275 (1872) (“An assignment of

the note carries the mortgage with it, while an assignment of the

latter alone is a nullity.”).

Even though Siliga, Jenkins and Debrunner may preclude the

Riveras from attacking DBNTC’s foreclosure proceedings by arguing

that Chase’s assignment of the deed of trust was a nullity in

light of the absence of a valid transfer of the underlying debt,

we know of no law precluding the Riveras from challenging DBNTC’s

assertion of secured status for purposes of the Riveras’

bankruptcy case. Nor did the bankruptcy court cite to any such

law.

We acknowledge that our analysis promotes the existence of

two different sets of legal standards – one applicable in 

nonjudicial foreclosure proceedings and a markedly different one

for use in ascertaining creditors’ rights in bankruptcy cases. 

But we did not create these divergent standards. The California

legislature and the California courts did. We are not the first

to point out the divergence of these standards. See CAL. REAL

EST., at § 10:41 (noting that the requirements under California

law for an effective assignment of a real-estate-secured

obligation may differ depending on whether or not the dispute

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over the assignment arises in a challenge to nonjudicial

foreclosure proceedings). 

We must accept the truth of the Riveras’ well-pled

allegations indicating that the Hutchinson endorsement on the

note was a sham and, more generally, that neither DBNTC nor Chase

ever obtained any valid interest in the Riveras’ note or the loan

repayment rights evidenced by that note. We also must

acknowledge that at least part of the Riveras’ adversary

proceeding was devoted to challenging DBNTC’s standing to file

its proof of claim and to challenging DBNTC’s assertion of

secured status for purposes of the Riveras’ bankruptcy case. As

a result of these allegations and acknowledgments, we cannot

reconcile our legal analysis, set forth above, with the

bankruptcy court’s rulings on the Riveras’ second amended

complaint. The bankruptcy court did not distinguish between the

Riveras’ claims for relief that at least in part implicated the

parties’ respective rights in the Riveras’ bankruptcy case from

those claims for relief that only implicated the parties’

respective rights in DBNTC’s nonjudicial foreclosure proceedings.

Given these circumstances, we must separately examine each

of the Riveras’ claims for relief to account for this distinction

and to determine if there is any alternate basis for concluding

that, as a matter of law, a particular claim for relief lacks

merit.

1. First Claim for Relief – to Determine the Extent and

Validity of Lien

Except when the debtor seeks to avoid a lien or other

interest in exempt property under § 522(f), all other bankruptcy

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court actions challenging a creditor’s secured status must be

brought as an adversary proceeding to determine the validity,

priority or extent of the creditor’s lien. See Rule 7001(2);

Bear v. Coben (In re Golden Plan of Cal., Inc.), 829 F.2d 705,

711–12 (9th Cir. 1986). 

Here, the underlying legal basis for the Riveras’ first

claim for relief is state law. They principally allege that

Chase’s assignment of the deed of trust was void because it

violated the terms of the pooling and servicing agreement

governing the securitization trust to which Chase purported to

assign the Riveras’ deed of trust. The Riveras cited Glaski,

218 Cal.App.4th at 1094-97, to support their argument. Glaski

held that the assignment of a deed of trust to a securitization

trust is void under New York trust law if the assignment violated

the trust’s governing pooling and servicing agreement. Id. The

bankruptcy court here rejected Glaski and instead adopted as

persuasive the reasoning of Sandri v. Capital One, N.A.

(In re Sandri), 501 B.R. 369 (Bankr. N.D. Cal. 2013), which held

that such a violation of the pooling and servicing agreement only

would render the deed of trust assignment voidable rather than

void and that the borrower lacked standing to raise issues

regarding violation of the pooling and servicing agreement

because it was not a party to that agreement. Id. at 375-76. 

In re Sandri followed the weight of authority among the

California appellate courts on this issue. See, e.g., Jenkins,

216 Cal.App.4th at 515. Moreover, like the bankruptcy court, we

find Sandri’s analysis persuasive. 

When, as here, we must apply state law to resolve an issue,

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and the state’s highest court has not yet addressed the issue,

our job as a federal court applying state law is to predict how

the state’s highest court would resolve the issue. Hemmings v.

Tidyman's Inc., 285 F.3d 1174, 1203 (9th Cir. 2002). Unless we

are convinced that the California Supreme Court would decide the

issue differently, we are obliged to follow the decisions of

California’s intermediate appellate courts. Vestar Dev. II, LLC

v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir. 2001); Spear

v. Wells Fargo Bank, N.A. (In re Bartoni-Corsi Produce, Inc.),

130 F.3d 857, 861 (9th Cir. 1997).

Here, we note that the California Supreme Court recently

granted review from an intermediate appellate court decision

following Jenkins and rejecting Glaski. Yvanova v. New Century

Mortg. Corp., 226 Cal.App.4th 495 (2014), review granted &

opinion de-published, 331 P.3d 1275 (Cal. Aug 27, 2014). Thus,

we eventually will learn how the California Supreme Court views

this issue. Even so, we are tasked with deciding the case before

us, and Ninth Circuit precedent suggests that we should decide

the case now, based on our prediction, rather than wait for the

California Supreme Court to rule. See Hemmings, 285 F.3d at

1203; Lewis v. Telephone Employees Credit Union, 87 F.3d 1537,

1545 (9th Cir. 1996). Because we have no convincing reason to

doubt that the California Supreme Court will follow the weight of

authority among California’s intermediate appellate courts, we

will follow them as well and hold that the Riveras lack standing

to challenge the assignment of their deed of trust based on an

alleged violation of a pooling and servicing agreement to which

they were not a party.

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Even though the Riveras’ first claim for relief principally

relies on their allegations regarding the assignment’s violation

of the pooling and servicing agreement, their first claim for

relief also explicitly incorporates their allegations challenging

DBNTC’s proof of claim and disputing the validity of the

Hutchinson endorsement. Those allegations, when combined with

what is set forth in the first claim for relief, are sufficient

on their face to state a claim that DBNTC does not hold a valid

lien against the Riveras’ property because the underlying debt

never was validly transferred to DBNTC. See In re Leisure Time

Sports, Inc., 194 B.R. at 861 (citing Kelly v. Upshaw, 39 Cal.2d

179 (1952) and stating that “a purported assignment of a mortgage

without an assignment of the debt which it secured was a legal

nullity.”).

While the Riveras cannot pursue their first claim for relief

for purposes of directly challenging DBNTC’s pending nonjudicial

foreclosure proceedings, Debrunner, 204 Cal.App.4th at 440-42,

the first claim for relief states a cognizable legal theory to

the extent it is aimed at determining DBNTC’s rights, if any, as 

a creditor who has filed a proof of secured claim in the Riveras’

bankruptcy case.

Consequently, the bankruptcy court erred when it dismissed

the Riveras’ first claim for relief.

2. Second Claim for Relief – For Cancellation of Written

Instruments

The Riveras’ second claim for relief seeks cancellation of

Chase’s assignment of the deed of trust, as well as the notice of

default and the notice of sale that Chase caused to be recorded

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on DBNTC’s behalf.

As provided in Cal. Civ. Code § 3412: 

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.

Id.; see also In re Cedano, 470 B.R. at 533. To plead a viable

claim for relief, the Riveras needed to allege that they would be

injured or prejudiced unless these instruments were cancelled. 

See Dick, 2013 WL 5299180, at *4.

The Riveras’ second claim for relief is based on the same

two legal arguments regarding the violation of the pooling and

servicing agreement and the absence of a valid transfer of the

underlying debt to DBNTC. As set forth above, the Riveras lack

standing to assert violations of the pooling and servicing

agreement in support of their claims for relief. See Jenkins,

216 Cal.App.4th at 515; see also In re Sandri, 501 B.R. at 375-

76.

As for their remaining argument – that the assignment was a

nullity because DBNTC did not receive a valid transfer of the

underlying debt – the only alleged harm the second amended

complaint specifically references (arising from the trust deed

assignment, the notice of default and the notice of sale) relates

to DBNTC’s pending nonjudicial foreclosure proceedings. As we

already have explained, the alleged absence of noteholder status

is not an issue that a borrower can raise to challenge

nonjudicial foreclosure proceedings. Debrunner, 204 Cal.App.4th

at 440-42.

Even if the California courts generally permitted borrowers

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to raise noteholder status issues to challenge nonjudicial

foreclosure proceedings, any harm arising from DBNTC’s

foreclosure proceeding is not logically attributable to the

so-called false written instruments; rather, it is attributable

to the Riveras’ default on their loan obligations. As the

bankruptcy court pointed out, the Riveras admitted in other court

filings that they had fallen behind on their loan payments. The

Riveras have not challenged this point on appeal. In light of

this admitted default, we cannot reasonably infer from the

Riveras’ allegations that they have been harmed by the allegedly

false written instruments. See Iqbal, 556 U.S. at 678. 

Our reasoning is consistent with a number of California

appellate court decisions holding that, when a borrower is in

default and seeks to challenge the foreclosure process by

attacking a prior assignment of the deed of trust, the borrower

must allege particularized prejudice arising from the assignment

– either that the allegedly invalid assignment interfered with

his or her ability to make loan payments or that the original

lender would not have initiated foreclosure proceedings. See,

e.g., Siliga, 219 Cal.App.4th at 85; Herrera v. Fed. Nat'l Mortg.

Ass'n, 205 Cal.App.4th 1495, 1507-08 (2012); Fontenot,

198 Cal.App.4th at 272. 

Because the Riveras second amended complaint did not allege

any legally congnizable harm arising form the subject written

instruments, the bankruptcy court did not err when it dismissed

the Riveras’ cancellation of written instruments claim.

3. Third Claim for Relief – For Slander of Title

“Slander of title is a ‘tortious injury to property

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resulting from unprivileged, false, malicious publication of

disparaging statements regarding the title to property owned by

plaintiff, to plaintiff's damage.’” In re Cedano, 470 B.R. at

533 (quoting Southcott v. Pioneer Title Co., 203 Cal.App.2d 673,

676 (1962)). Recording a facially valid written instrument with

no underlying merit can give rise to a slander of title claim for

relief. In re Cedano, 470 B.R. at 533 . The elements for a

slander of title claim are: “(1) publication, (2) absence of

justification, (3) falsity, and (4) direct pecuniary loss.” Id.

The Riveras’ slander of title claim is based on the same

legal theories as their cancellation of written instruments

claim. It also suffers from the same fatal deficiencies. Thus,

the bankruptcy court did not err when it dismissed the Riveras’

slander of title claim.

4. Fourth Claim for Relief – for Violation of California’s

Unfair Competition Law, Cal. Bus. & Prof. Code § 17200

The Riveras’ fourth claim for relief alleges that DBNTC

engaged in unfair, unlawful and fraudulent business practices

within the meaning of Cal. Bus. & Prof. Code § 17200, et seq.,

which is known as California’s Unfair Competition Law (“UCL”).

To establish their right to pursue their UCL claim, the Riveras

needed to allege, among other things, that they lost money or

property “as a result of” the alleged unfair business practice. 

Kwikset Corp. v. Super. Ct., 51 Cal.4th 310, 321-22 (2011).

In their UCL claim for relief, the Riveras allege against

DBNTC a number of different wrongful practices arising from the

same activities complained of throughout their second amended

complaint. Even if we were to assume that these allegedly

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wrongful practices are actionable under the UCL, the Riveras have

not alleged facts from which we reasonably can infer that they

personally have been injured by those practices. See Iqbal,

556 U.S. at 678. 

We already have explained in detail above the fatal

deficiencies in the Riveras’ second amended complaint concerning

the issues of causation and injury. More specifically, we

explained that any loss they might have suffered as a result of

DBNTC’s foreclosure proceedings is logically and legally the

result of the Riveras’ default on their loan obligations rather

than the result of Chase’s and DBNTC’s alleged conduct. 

Accordingly, the bankruptcy court did not err when it dismissed

the Riveras’ slander of title claim.

5. Fifth Claim for Relief – for violation of the Federal Truth

In Lending Act, 15 U.S.C. § 1641(g)

The Riveras’ TILA Claim alleged, quite simply, that they did

not receive from DBNTC, at the time of Chase’s assignment of the

deed of trust to DBNTC, the notice of change of ownership 

required by 15 U.S.C. § 1641(g)(1). That section provides:

In addition to other disclosures required by this

subchapter, not later than 30 days after the date on

which a mortgage loan is sold or otherwise transferred

or assigned to a third party, the creditor that is the

new owner or assignee of the debt shall notify the

borrower in writing of such transfer, including--

(A) the identity, address, telephone number of the new

creditor;

(B) the date of transfer;

(C) how to reach an agent or party having authority to

act on behalf of the new creditor;

(D) the location of the place where transfer of

ownership of the debt is recorded; and

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(E) any other relevant information regarding the new

creditor.

The bankruptcy court did not explain why it considered this

claim as lacking in merit. It refers to the fact that the

Riveras had actual knowledge of the change in ownership within

months of the recordation of the trust deed assignment. But the

bankruptcy court did not explain how or why this actual knowledge

would excuse noncompliance with the requirements of the statute.

Generally, the consumer protections contained in the statute

are liberally interpreted, and creditors must strictly comply

with TILA’s requirements. See McDonald v. Checks–N–Advance, Inc.

(In re Ferrell), 539 F.3d 1186, 1189 (9th Cir. 2008). On its

face, 15 U.S.C. § 1640(a)(2)(A)(iv) imposes upon the assignee of

a deed of trust who violates 15 U.S.C. § 1641(g)(1) statutory

damages of “not less than $400 or greater than $4,000.”

While the Riveras’ TILA claim did not state a plausible

claim for actual damages, it did state a plausible claim for

statutory damages. Consequently, the bankruptcy court erred when

it dismissed the Riveras’ TILA claim.

6. Dismissal without leave to amend

Because we are affirming the bankruptcy court’s dismissal of

at least some of the Riveras’ claims for relief, it is

appropriate for us to acknowledge the issue of the bankruptcy

court’s denial of leave to amend. In appeals from Civil

Rule 12(b)(6) dismissals, we typically review the court’s

decision to deny leave to amend. See, e.g., Tracht Gut, LLC v.

Cnty. of L.A. Treasurer & Tax Collector (In re Tracht Gut, LLC),

503 B.R. 804, 814-15 (9th Cir. BAP 2014); Nordeen v. Bank of

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Am., N.A. (In re Nordeen), 495 B.R. 468, 489-90 (9th Cir. BAP

2013). Here, however, the Riveras did not argue in either the

bankruptcy court or in their opening appeal brief that the court

should have granted them leave to amend. Having not raised the

issue in either place, we may consider it forfeited. See Golden

v. Chicago Title Ins. Co. (In re Choo), 273 B.R. 608, 613 (9th

Cir. BAP 2002).

Even if we were to consider the issue, we note that the

bankruptcy court gave the Riveras two chances to amend their

complaint to state viable claims for relief, examined the claims

they presented on three occasions and found them legally

deficient each time. Moreover, the Riveras have not provided us

with all of the record materials that would have permitted us a

full view of the analyses and explanations the bankruptcy court

offered them when it reviewed the Riveras’ original complaint and

their first amended complaint. Under these circumstances, we

will not second-guess the bankruptcy court’s decision to deny

leave to amend. See generally In re Nordeen, 495 B.R. at 489-90

(examining multiple opportunities given to the plaintiffs to

amend their complaint and the bankruptcy court’s efforts to

explain to them the deficiencies in their claims, and ultimately

determining that the court did not abuse its discretion in

denying the plaintiffs leave to amend their second amended

complaint).

CONCLUSION

In ruling on DBNTC’s motion to dismiss the Riveras’ second

amended complaint, the bankruptcy court erred when it dismissed

the Riveras’ first and fifth claims for relief, but the court did

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not err when it dismissed the Riveras’ second, third and fourth

claims for relief. Accordingly, we AFFIRM the dismissal of the

second, third and fourth claims for relief, we REVERSE the

dismissal of the first and fifth claims for relief, and we REMAND

for further proceedings.

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