Filed 12/18/15 Hernandez v. PNMAC Mortgage Opportunity Fund Investors CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication 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

SECOND APPELLATE DISTRICT

DIVISION FIVE

SHERRY HERNANDEZ,

Plaintiff and Appellant,

v.

PNMAC MORTGAGE OPPORTUNITY

FUND INVESTORS, LLC, et. al.,

Defendants and Respondents.

 B258583

 (Los Angeles County

 Super. Ct. No. YC 068794)

APPEAL from a judgment of the Superior Court of Los Angeles County, Ramona 

G. See, Judge. Affirmed.

Sherry Hernandez, in pro. per.; Law Office of David Seal, David Seal for Plaintiff 

and Appellant.

Blank Rome, Todd A. Boock, Shawnda M. Grady and Jessica A. McElroy for 

Defendant and Respondent PNMAC Mortgage Opportunity Investors, LCC.

Burke, Williams & Sorensen, Richard J. Reynolds and Joseph P. Buchman for 

Defendant and Respondent, MTC Financial, Inc. dba Trustee Corps.
2

. Plaintiff Sherry Hernandez (plaintiff) sued the parties responsible for foreclosing 

on her residence. She alleged there were defects in the assignment of the deed of trust on 

the property such that the entity that initiated the foreclosure sale did so without proper 

authority. Because a foreclosure sale may not be set aside based solely on a borrower’s 

contention that the entity that recorded a notice of default was without authority to initiate 

the foreclosure proceedings, we hold the trial court correctly dismissed plaintiff’s lawsuit.

BACKGROUND1

On January 18, 2008, plaintiff’s husband, Alfredo Hernandez, borrowed $752,500 

from Your-Best-Rate Financial, LLC, evidenced by his promissory note in that amount 

(the Note). The Note was secured by a deed of trust on the family’s Rancho Palos Verdes 

home (the Property), which was executed by plaintiff, her husband, and her daughter

Elizabeth. 

The original lender assigned the Note to CitiMortgage, Inc., who later endorsed 

the Note in blank, thus assigning its interest to the holder of the Note. On January 5, 

2012, Mortgage Electronic Registration Systems, Inc. (MERS), a nominee under the deed 

of trust, executed an assignment of that deed (the Assignment) in favor of PNMAC 

Opportunity Fund Investors, LLC (PNMAC). The Assignment was recorded in the Los 

Angeles County Recorder’s Office on January 18, 2012. On that same day, MTC 

Financial, Inc. dba Trustee Corps (Trustee Corps)2recorded a Notice of Default and 

Election to Sell, stating that the Note was in default in the amount of $55,059.76. Trustee 

Corps served and recorded a notice of trustee’s sale on July 10, 2012, which scheduled 

the foreclosure sale to take place on August 6, 2012. The sale was subsequently 

 

1 We take the following facts from plaintiff’s second amended complaint and the 

Los Angeles County Recorder’s office documents that the trial court judicially noticed. 

We likewise take judicial notice of these documents pursuant to Evidence Code sections 

452 and 459. 

2 Trustee Corps was named the substitute trustee on February 14, 2012, and the 

Substitution of Trustee was recorded on July 10, 2012. 
3

postponed due to a bankruptcy petition filed by Elizabeth Hernandez, plaintiff’s cotrustor under the deed of trust.

PNMAC sought relief from the automatic bankruptcy stay. In its tentative ruling, 

the bankruptcy court questioned PNMAC’s interest in the Note and gave the parties 

additional time to provide evidence that PNMAC was entitled to enforce the terms of the 

Note. The Bankruptcy Court subsequently ruled that defendant PNMAC, as assignee of 

the deed of trust, had standing to seek relief from the stay. The Bankruptcy Court lifted 

the stay on April 15, 2013.

On April 16, 2013, Trustee Corps conducted the foreclosure sale of the Property. 

PNMAC purchased the Property for $695,000; a Trustee’s Deed Upon Sale was 

subsequently recorded in the County Recorder’s Office. 

Plaintiff filed suit against defendants PNMAC and Trustee Corps on March 6, 

2013, and she filed a first amended complaint on June 25, 2013. Plaintiff alleged causes 

of action for violation of the Commercial Code, quiet title, wrongful foreclosure, 

declaratory relief, “lack of standing,” and cancellation of instruments (specifically, the 

deed of trust, notice of default, and notice of trustee’s sale). Plaintiff did not allege a 

procedural defect in the foreclosure process. Rather, the gist of the complaint was that 

the Assignment of the deed of trust from MERS to PNMAC was fraudulent and void so 

that PNMAC had no legal or beneficial interest in the Note, and thus no right to institute 

foreclosure proceedings against the Property. In her brief on appeal to this court, plaintiff 

identifies the facts on which she relies to claim the Assignment is invalid: “during the 

pendency of this case, [the person who notarized the Assignment] was convicted of over 

one-hundred (100) criminal acts pertain[ing] to the illegal use and abuse of her notary 

license,” and the original lender, Your-Best-Rate Financial LLC, “was administratively 

dissolved by the Secretary of State of Georgia [sic] on May 30, 2010.” 

Defendants each demurred to the first amended complaint. They contended that 

all of plaintiff’s causes of action failed because she had not tendered the amounts due 

under the Note, and because the “comprehensive statutory framework” for non-judicial 
4

foreclosure precluded plaintiff’s Commercial Code claim and her challenge to the 

authority of the defendants to conduct the foreclosure sale. The trial court granted the 

demurrer with leave to amend.

Plaintiff filed a second amended complaint “dropping the complaint of 

Declaratory Relief and Lack of Standing.” Defendants again demurred. The trial court 

granted defendants’ request for judicial notice of certain documents recorded in the Los 

Angeles County Recorder’s Office. After hearing argument from the parties, the trial 

court issued an order sustaining the demurrers. The trial court found: the complaint 

failed to allege that plaintiff tendered the amount of indebtedness, or facts to establish 

that tender was not required; the complaint failed to sufficiently allege that plaintiff 

suffered prejudice by reason of the foreclosure; plaintiff’s theory that the foreclosure sale 

was improper because defendants did not hold the Note or have physical possession of 

the original Note has been “consistently rejected by the courts”; and the allegation that 

the document assigning the trust deed contained an improper signature was insufficient, 

absent prejudice, to state a cause of action.

The trial court entered a judgment of dismissal, and plaintiff timely appeals.

DISCUSSION

“In determining whether plaintiffs properly stated a claim for relief, our standard

of review is clear: ‘“We treat the demurrer as admitting all material facts properly 

pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We 

also consider matters which may be judicially noticed.” [Citation.] Further, we give the 

complaint a reasonable interpretation, reading it as a whole and its parts in their context. 

[Citation.] When a demurrer is sustained, we determine whether the complaint states 

facts sufficient to constitute a cause of action. [Citation.] And when it is sustained

without leave to amend, we decide whether there is a reasonable possibility that the 

defect can be cured by amendment: if it can be, the trial court has abused its discretion 

and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.]
5

The burden of proving such reasonable possibility is squarely on the plaintiff.’ (Blank v. 

Kirwan (1985) 39 Cal.3d 311, 318; see also McCall v. PacifiCare of Cal., Inc. (2001) 25 

Cal.4th 412, 415 [noting that our review is de novo].)” (Zelig v. County of Los Angeles

(2002) 27 Cal.4th 1112, 1126.)

The elements of a claim for wrongful foreclosure are “(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.” (Lona v. Citibank, N.A.

(2011) 202 Cal.App.4th 89, 104; accord, Herrera v. Federal Nat. Mortg. Assn. (2012) 

205 Cal.App.4th 1495, 1507 [discussing prejudice requirement]; see also Fontenot v. 

Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 272 [discussing the general 

requirement that irregularities in the foreclosure process be prejudicial to the plaintiff’s 

interest].)

Plaintiff alleges that the foreclosure sale was predicated on the “fraudulent”

Assignment but she ignores the additional elements of a wrongful foreclosure claim, that 

is, prejudice and tender. Thus, while plaintiff acknowledges that she, her husband, and 

their daughter executed the deed of trust on the Property as security for a $752,500 loan 

to Alberto Hernandez, she does not allege that any of the three trustors, or anyone else on 

their behalf, repaid the Note. Instead, she offers to “tender to the rightful holder of the 

Note in the event that any legal holder can show non-payment and possession or right to 

enforce the Note.” This is not an unambiguous tender sufficient to support a cause of 

action for wrongful foreclosure. “A valid tender of performance must be of the full debt, 

in good faith, unconditional, and with the ability to perform. (Civ. Code, §§ 1486, 1493, 

1494, 1495.)” (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 

1047, 1053.)
6

Moreover, the allegations of the complaint are not grounded in a flaw in the 

implementation of the nonjudicial foreclosure procedure set forth in Civil Code sections 

2924 through 2924k, such as a failure to give the borrower the required notice of default, 

or to permit redemption of the property as provided by statute. Rather the complaint 

challenges the authority of the trustee to conduct the foreclosure sale. 

Because California’s nonjudicial foreclosure scheme is exhaustive, courts have 

declined to read additional requirements into the statutory framework, including on the 

issue of a nominee’s authority to initiate nonjudicial foreclosure. (Gomes v. Countrywide 

Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1150.) The statutory scheme does not 

permit a borrower to bring an action to challenge an entity’s authority to initiate 

foreclosure proceedings unless the borrower can demonstrate prejudice from the claimed 

lack of authority.

3

(Siliga v. Mortgage Electronic Registration Systems, Inc (2013) 219 

Cal.App.4th 75, 86 (Siliga); Herrera v. Federal Nat. Mortg. Assn., surpa, 205 

Cal.App.4th at p. 1507; Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th at 

p. 271.) As the Siliga court stated: “[T]he Siligas fail to allege any facts showing that 

they suffered prejudice as a result of any lack of authority of the parties participating in 

the foreclosure process. The Siligas do not dispute that they are in default under the note. 

The assignment of the deed of trust and the note did not change the Siligas’ obligations 

under the note, and there is no reason to believe that Accredited as the original lender 

would have refrained from foreclosure in these circumstances. Absent any prejudice, the 

Siligas have no standing to complain about any alleged lack of authority or defective 

assignment.” (Siliga, supra, at p. 85.) 

Here, the complaint challenges the authority of PNMAC and Trustee Corps to 

foreclose on the Property because the person who notarized the Assignment was later 

 

3 The issue is currently pending review in the Supreme Court. (Yvanova v. New 

Century Mortgage Corporation, review granted Aug. 27, 2014, S218973) [“In an action 

for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have 

standing to challenge an assignment of the note and deed of trust on the basis of defects

allegedly rendering the assignment void?”].)
7

convicted of criminal charges related to abuse of her notary license, and because the 

original lender had gone out of business prior to the Assignment of that deed. The 

complaint does not, however, specify how plaintiff was harmed by the notary’s

conviction, or by the dissolution of the original lender. Indeed, the operative complaint 

does not sufficiently allege the purportedly defective Assignment of deed of trust caused 

plaintiff cognizable harm. As was true of the plaintiffs in Siliga, supra, 219 Cal.App.4th 

at p. 85, plaintiff does not dispute that her husband had ceased making payments on the 

Note. The Assignment also did not change the borrower’s obligations under the Note,

and there is no allegation, nor reason to believe, that CitiMortgage (the holder of the Note 

prior to the asserted fraudulent Assignment) would not have proceeded with foreclosure. 

Thus, plaintiff’s challenge to the validity of the Assignment of deed of trust necessarily 

fails. 

Plaintiff’s remaining causes of action, for Commercial Code violations, quiet title 

and cancellation of instruments, are all premised on the notion that the foreclosure sale 

was invalid because PNMAC was not properly assigned the beneficial interest in the 

Note or deed of trust.

4 These causes of action likewise failed to state a claim upon which 

relief could be granted. As the trial court concluded, the Commercial Code has no 

application in the realm of nonjudicial foreclosure. (See Debrunner v. Deutsche Bank 

Nat. Trust Co., supra, 204 Cal.App.4th at p. 441.) Moreover, “[i]t is settled in California 

that a mortgagor cannot quiet his title against the mortgagee without paying the debt 

secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649.) And as to the cause of 

action for cancellation of instruments, plaintiff has alleged no facts which would support 

cancellation of the deed of trust, since she does not dispute the validity of that document 

but challenges only its subsequent Assignment; cancelling the notice of default and notice 

 

4 As the trial court correctly observed, there is no requirement that the foreclosing 

party have physical possession of the original promissory note. (Debrunner v. Deutsche 

Bank Nat. Trust Co. (2012) 204 Cal.App.4th 433, 440.)
8

of trustee’s sale would be an idle act. In short, the trial court properly sustained the 

defendants’ demurrers to each of plaintiff’s causes of action.

Finally, plaintiff contends that the trial court abused its discretion by sustaining the 

demurrer without leave to amend. To demonstrate error, plaintiff “must show in what 

manner [s]he can amend [the] complaint and how that amendment will change the legal 

effect of [the] pleading.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349, internal 

citations omitted.) However, in her opposition to the demurrers to the second amended 

complaint, plaintiff failed to suggest how the complaint could be amended to overcome 

the deficiencies identified in the demurrers. Rather, she simply requested “leave to 

amend for any defects in form or substantive defects” and “additional time to address any 

defects that the Court may sustain on the Demurrer.”5 Because plaintiff offered no 

proposed amendment that would cure the defects of the complaint, nor has she articulated 

a viable theory of amendment in her opening brief on appeal,6 we hold the demurrer was 

properly sustained without leave to amend.

 

5 Plaintiff has not included in the record a reporter’s transcript of the hearing on the 

demurrers or a settled statement regarding the proceedings that transpired. We therefore 

have no basis to determine whether plaintiff described how she might amend the 

complaint at the hearing, and we must affirm the judgment unless an abuse of discretion 

is affirmatively shown. (Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1200-1201 

[judgment or order of the trial court is presumed correct].) 

6 Plaintiff makes several passing references in her opening brief (e.g., “Appellant 

can add additional allegations along with numerous other violations since discovered”) 

regarding theories she might assert if allowed leave to amend. However, these vague 

assertions are unsupported by reasoned argument and therefore insufficient to carry her 

burden to show how she could cure the complaint’s defects by further amendment.

(Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 44 [“Where the 

appellant offers no allegations to support the possibility of amendment and no legal 

authority showing the viability of new causes of action, there is no basis for finding the 

trial court abused its discretion when it sustained the demurrer without leave to amend”]; 

Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [“When an appellant fails 

to raise a point, or asserts it but fails to support it with reasoned argument and citations to 

authority, we treat the point as waived”].) We decline to address theories of amendment 

raised for the first time in plaintiff’s reply brief. (Shimmon v. Franchise Tax Bd. (2010) 
9

DISPOSITION

The judgment is affirmed.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

BAKER, J.

We concur:

MOSK, Acting P.J.

KRIEGLER, J.

 

189 Cal.App.4th 688, 694, fn. 3; Neighbours v. Buzz Oates Enterprises (1990) 217 

Cal.App.3d 325, 335, fn. 8.)