Filed 5/27/21 Adem v. America’s Wholesale Lender CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

ERIC ADEM, 

 Plaintiff and Appellant, 

v.

AMERICA’S WHOLESALE 

LENDER, et al., 

 Defendants and Respondents.

 

2d Civ. No. B304896

(Super. Ct. No. 56-2019-

00523697-CU-OR-VTA)

(Ventura County)

Eric Adem brought this wrongful foreclosure action against 

defendants Countrywide Home Loans, Inc. (Countrywide), 

formerly doing business as America’s Wholesale Lender; 

Community Loan Servicing, LLC, formerly known as Bayview 

Loan Servicing, LLC (Bayview); Mortgage Electronic Registration 

Systems, Inc. (MERS); and The Bank of New York Mellon (Bank 

of New York), formerly known as The Bank of New York as 

Trustee for the Certificate Holders of CWMBS Inc., CHL 

Mortgage Pass-Through Trust 2007-7 Mortgage Pass-Through 
2

Certificates, Series 2007-07. The trial court sustained 

defendants’ demurrers to the original complaint and first 

amended complaint (FAC) with leave to amend most causes of 

action. 

Adem filed a second amended complaint (SAC), to which 

Bayview and Bank of New York demurred. The trial court again 

sustained their demurrer with leave to amend. When Adem 

chose not to amend, the court dismissed the action with prejudice 

pursuant to Code of Civil Procedure section 581, subdivision 

(f)(2). Adem appeals portions of the dismissal. We affirm. 

PROCEDURAL AND FACTUAL BACKGROUND

In 2007, Adem obtained a $800,000 home loan from 

Countrywide, secured by a deed of trust on real property located 

at 5209 Via Jacinto in Thousand Oaks. MERS, as beneficiary, 

later assigned the deed of trust to the Bank of New York. 

On August 3, 2018, Bayview, as the loan servicer, recorded 

a notice of default and election to sell under the deed of trust. No 

notice of trustee’s sale has been recorded. 

The SAC alleges causes of action for (1) violation of Civil 

Code section 2924.11, (2) breach of the covenant of good faith and 

fair dealing, (3) violation of the unfair competition law (UCL), 

Business and Professions Code section 17200 et seq. and (4) 

declaratory relief. Countrywide and MERS answered the SAC, 

generally denying the allegations. The trial court sustained 

Bayview and Bank of New York’s demurrer to the SAC with leave 

to amend, but noted the allegations had not significantly changed 

from the earlier complaints. 

When no amended pleading was filed, Countrywide and 

MERS filed an ex parte application for involuntary dismissal of 

the action pursuant to Code of Civil Procedure section 581, 
3

subdivision (f)(2).1 The trial court granted the application and 

dismissed the action with prejudice as to all defendants. 

DISCUSSION

Adem contends the trial court erred by sustaining, with 

leave to amend, his causes of action for violation of Civil Code 

section 2924.11, breach of the covenant of good faith and fair 

dealing and violation of the UCL (Bus. & Prof. Code, § 17200 et 

seq.). He also challenges the dismissal of his cause of action for 

violation of TILA, 15 United States Code section 1641(g). The 

court had previously sustained the demurrers to that cause of 

action without leave to amend. (See Hudis v. Crawford (2005) 

125 Cal.App.4th 1586, 1590, fn. 4 [order sustaining a demurrer 

without leave to amend is appealable upon dismissal of case].)

Standard of Review

Where, as here, “a demurrer is sustained with leave to 

amend but [the] plaintiff elects not to amend, it is presumed on 

appeal that the complaint states as strong a case as is possible.” 

(Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs 

(The Rutter Group 2018) ¶ 8:136.3e, p. 8-109.) “The judgment of 

dismissal must be affirmed if the unamended complaint is 

objectionable on any ground raised by the demurrer.” (Ibid.; 

Holcomb v. Wells Fargo Bank, N.A. (2007) 155 Cal.App.4th 490, 

495-496; Otworth v. Southern Pac. Transportation Co. (1985) 166 

Cal.App.3d 452, 457.) “‘[W]e do not consider the possibility that 

any defects in [the claims] could be cured by amendment . . . .’” 

1 Code of Civil Procedure section 581, subdivision (f)(2) 

allows the court to dismiss the complaint “after a demurrer to the 

complaint is sustained with leave to amend, [and] the plaintiff 

fails to amend it within the time allowed by the court and either 

party moves for dismissal.”
4

(Ibarra v. California Coastal Com. (1986) 182 Cal.App.3d 687, 

692; Holcomb, at p. 496.) 

When a demurrer is sustained without leave to amend, we 

“‘determine de novo whether the complaint alleges facts sufficient 

to state a cause of action or discloses a complete defense.’”

(McBride v. Smith (2018) 18 Cal.App.5th 1160, 1172-1173.) If 

“there is a reasonable possibility that the defect can be cured by 

amendment . . . the trial court has abused its discretion and we 

reverse; if not, there has been no abuse of discretion and we 

affirm. [Citations.] The burden of proving such reasonable 

possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985) 

39 Cal.3d 311, 318.) 

Violation of Civil Code Section 2924.11

Civil Code section 2924.11, subdivision (a) formerly 

provided: “If a borrower submits a complete application for a 

foreclosure prevention alternative offered by, or through, the 

borrower’s mortgage servicer, a mortgage servicer, trustee, 

mortgagee, beneficiary, or authorized agent shall not record a 

notice of sale or conduct a trustee’s sale while the complete 

foreclosure prevention alternative application is pending.” 

This section was repealed effective January 1, 2019, and 

now states: “(a) If a foreclosure prevention alternative is 

approved in writing prior to the recordation of a notice of default, 

a mortgage servicer, mortgagee, trustee, beneficiary, or 

authorized agent shall not record a notice of default under either 

of the following circumstances: [¶] (1) The borrower is in 

compliance with the terms of a written trial or permanent loan 

modification, forbearance, or repayment plan. [¶] (2) A 

foreclosure prevention alternative has been approved in writing 

by all parties, including, for example, the first lien investor, 

junior lienholder, and mortgage insurer, as applicable, and proof 
5

of funds or financing has been provided to the servicer.” (Civ. 

Code, § 2924.11, subd. (a)(1), (2).) 

The SAC alleges that Adem submitted a complete loan 

modification application on December 10, 2018. Although it is 

unclear which version of Civil Code section 2924.11 would apply

in this case, we need not reach this issue because Adem is 

ineligible for relief under either version. The current version 

requires the actual approval of a foreclosure prevention 

alternative and there is no allegation that occurred. 

As for the pre-January 1, 2019 version, Adem does not 

allege that a notice of sale was recorded or that a trustee’s sale 

was conducted while his loan modification application was 

pending. To the contrary, the SAC acknowledges that “no Notice 

of Trustee sale has been recorded in this matter.”2 In addition, 

Adem cites no authority suggesting that his allegation that 

“Bayview informed him that they were moving forward with a 

trustee sale despite his pending loan modification” is sufficient to 

invoke the statute’s protections in the absence of either a 

recorded notice of sale or an actual trustee’s sale. 

Breach of the Implied Covenant of Good

Faith and Fair Dealing

The covenant of good faith and fair dealing, which is 

implied in every contract, “not only imposes upon each 

contracting party the duty to refrain from doing anything which 

would render performance of the contract impossible by any act of 

his own, but also the duty to do everything that the contract 

presupposes that he will do to accomplish its purpose.” (Harm v. 

Frasher (1960) 181 Cal. App. 2d 405, 417.) “It is universally 

recognized the scope of conduct prohibited by the covenant of 

2 At oral argument, respondents’ counsel confirmed that no 

notice of sale has been recorded to date. 
6

good faith is circumscribed by the purposes and express terms of 

the contract.” (Carma Developers (Cal.), Inc. v. Marathon 

Development California, Inc. (1992) 2 Cal.4th 342, 373.) The 

covenant “cannot impose substantive duties or limits on the 

contracting parties beyond those incorporated in the specific 

terms of their agreement.” (Guz v. Bechtel National Inc. (2000) 

24 Cal.4th 317, 349-50.) 

The SAC fails to allege conduct by defendants that violated 

the terms of the parties’ agreement or prohibited the performance 

of the contract. As one court explained, “[t]he purpose of the note 

and deed of trust is that [the borrower] shall have the use of the 

funds loaned on the terms and at the interest rate specified in the 

note, and that [the lender] shall have the security provided by the 

deed of trust.” (Milstein v. Security Pac. Nat. Bank (1972) 27 

Cal.App.3d 482, 487.) 

The SAC does not allege that Adem failed to receive the 

benefits of the loan proceeds or that the lender was not entitled to 

the security interest authorized by the deed of trust. These 

obligations were contemplated by the loan agreement and, as 

Bayview and the Bank of New York point out, no foreclosure 

instruments have been recorded since Adem submitted his loan 

modification application in December 2018. Given these facts, 

the demurrer to this claim was properly sustained. 

UCL Violation

The UCL “does not proscribe specific activities, but in 

relevant part broadly prohibits ‘any unlawful, unfair or 

fraudulent business act or practice.’ [Citation.]” (Aleksick v. 7-

Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1184 (Aleksick).) It 

identifies three varieties of unfair competition -- acts or practices 

which are unlawful, or unfair or fraudulent. (Ibid.) “‘“By 

proscribing ‘any unlawful’ business practice, ‘section 17200
7

“borrows” violations of other laws and treats them as unlawful 

practices’ that the unfair competition law makes independently 

actionable.”’ [Citation.] ‘Virtually any law -- federal, state or 

local -- can serve as a predicate for a [UCL] action.’ [Citation.] 

When a statutory claim fails, a derivative UCL claim also fails.” 

(Id. at p. 1185.) 

The UCL claim is based upon the allegations in the causes 

of action for violation of Civil Code section 2924.11 and breach of 

the covenant of good faith and fair dealing. The SAC also 

“asserts the unsupported conclusion that defendants . . . violated 

numerous other statutes.” 

As we have explained, Adem’s claims for violation of Civil 

Code section 2924.11 and breach of the covenant of good faith and 

fair dealing fail as a matter of law. Consequently, the derivative 

UCL cause of action arising from those claims also fails. 

(Aleksick, supra, 205 Cal.App.4th at p. 1185; Plan Check 

Downtown III, LLC v. AmGuard Ins. Co. (C.D.Cal. 2020) 485 

F.Supp.3d 1225, 1233 [Because plaintiff “fails to state a claim for 

a breach of contract or the covenant of good faith and fair dealing

. . . [i]ts derivative claim for unfair business practices therefore 

also fails”].) 

Even if Adem did allege an actionable UCL violation, he 

has not established standing to pursue that claim. To 

demonstrate standing, a private plaintiff must allege a financial 

or property loss as a result of the unlawful acts. (Bus. & Prof. 

Code, § 17204.) In other words, the plaintiff must show a “causal 

connection” between the economic injury and the defendant’s 

allegedly unfair or unlawful conduct. (Jenkins v. JPMorgan 

Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522, disapproved 

on another ground in Yvanova v. New Century Mortgage Corp.

(2016) 62 Cal.4th 919, 939 & fn. 13.) “A plaintiff fails to satisfy 
8

[this requirement] if he or she would have suffered ‘the same 

harm whether or not a defendant complied with the law.’ 

[Citation.]” (Ibid.)

Adem contends he was willfully induced to change his 

financial position and, as a result, suffered the loss of his credit, 

equity in his home and the potential loss of monies spent on home 

improvement. But these bare allegations of economic loss are not 

sufficiently precise to meet the standing requirement. (Saldate v. 

Wilshire Credit Corp. (E.D.Cal. 2010) 686 F.Supp.2d 1051, 1066; 

Hosseini v. Wells Fargo Bank, N.A. (N.D.Cal. Aug. 9, 2013, No. 

13-cv-02066) 2013 US Dist. Lexis 113583, *8 [plaintiff lacked 

standing under the UCL where no foreclosure sale had taken 

place and plaintiff only included conclusory allegations of 

economic injury].)

TILA Violation

A TILA claim for damages under 15 United States Code 

section 1641(g) is subject to a one-year statute of limitations. 

(Id., § 1640(e).) The period begins to run “at the time the loan 

documents were signed.” (Meyer v. Ameriquest Mortgage Co. (9th 

Cir. 2003) 342 F.3d 899, 902.) 

TILA states that “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.” (15 U.S.C. § 1641(g)(1).) The FAC alleged that Bank of 

New York violated this section by failing to disclose in writing the 

2015 assignment of the deed of trust from Countrywide. 

Adem acknowledges that more than one year had passed 

since his loan documents were signed but contends the 

limitations period was tolled because the Bank of New York did 

not provide the requisite written notice of the assignment. (See 
9

15 U.S.C. § 1641(g)(1).) TILA claims may be subject to equitable 

tolling, but only “in situations where, despite all due diligence, 

the party invoking equitable tolling is unable to obtain vital 

information bearing on the existence of the claim.” (Cervantes v. 

Countrywide Home Loans, Inc. (9th Cir. 2011) 656 F.3d 1034, 

1045.) Adem contends he could not have discovered the transfer 

because he did not receive notice of the assignment as required 

by law and was not required to check the recorder’s office for such 

notice. 

Courts have held, however, that a defendant’s failure to 

make the necessary TILA disclosures is not a sufficient basis for 

equitable tolling. Equitable tolling is the “exception – not the 

general rule,” and “[t]o allow tolling whenever a plaintiff alleges 

an improper disclosure would render the TILA limitations period 

completely meaningless.” (Vargas v. JP Morgan Chase Bank, 

N.A. (C.D.Cal. 2014) 30 F.Supp.3d 945, 949; Garcia v. Wachovia 

Mortgage Corp. (C.D.Cal. 2009) 676 F.Supp.2d 895, 906 [“[T]he 

mere existence of TILA violations and lack of disclosure does not 

itself equitably toll the statute of limitations”].) As Vargas 

observed, “[i]t is rather unclear how [the plaintiff] can 

characterize his conduct as reasonably diligent when he did not 

check the recorder's office.” (Vargas, at p. 949; see Dela Cruz v. 

HSBC Bank USA, N.A., (D.Nev. Feb. 6, 2013, No. 2:12-cv-01283-

MMD-PAL, 2013 US Dist. Lexis 15985, *13 [“[T]here is no basis 

to equitably toll the statute of limitations, as Plaintiffs request, 

since the recording of the Assignment provided Plaintiffs with 

constructive notice of the Assignment”].) 

We agree with the trial court that the TILA cause of action 

is barred by the one-year statute of limitations (15 U.S.C. 
10

§ 1640(e)) and that allowing further leave to amend would have 

been futile.3

DISPOSITION

The judgment is affirmed in its entirety. Respondents shall 

recover their costs on appeal. 

 NOT TO BE PUBLISHED.

PERREN, J.

We concur:

GILBERT, P. J. 

TANGEMAN, J. 

3 Countrywide and MERS contend that Adem has waived 

or forfeited any claims of error in the judgment of dismissal

which they sought and obtained pursuant to Code of Civil 

Procedure section 581, subdivision (f)(2). Although Countrywide 

and MERS answered the SAC, they maintain they are entitled to

the benefit of that judgment. Adem’s briefs do not raise or 

respond to this issue and we therefore deem it waived. (Swain v. 

LaserAway Medical Group, Inc. (2020) 57 Cal.App.5th 59, 72-73; 

Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 

1250, 1282.)
11

Mark S. Borrell, Judge

Superior Court County of Ventura

______________________________

Rodriguez Law Group, Patricia Rodriguez and Eric 

Rasmussen, for Plaintiff and Appellant. 

McGuireWoods, Tanya L. Greene and E. Christine Hehr, 

for Defendants and Respondents Countrywide and MERS. 

Akerman, Preston K. Ascherin, Parisa Jassim and Joseph 

Yoon, for Defendants and Respondents Community Loan 

Servicing, LLC, FKA Bayview Loan Servicing, LLC, and The 

Bank of New York Mellon, FKA The Bank of New York as 

Trustee for the Certificate Holders of CWMBS Inc., CHL 

Mortgage Pass-Through Trust 2007-7 Mortgage Pass-Through 

Certificates, Series 2007-07.