Filed 8/2/22 1197 West 39 th Street v. Seterus CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SEVEN

1197 WEST 39TH STREET, LLC,

Plaintiff and Ap pellant,

v.

SETERUS, INC. et al.,

Defendants and Appellants. B299994

(Los Angeles County Super. Ct. No. BC620025)

APPEAL S from a judgment and postjudgment order of the Superior Court of Los Angeles County

, Rupert A. Byrdsong

, Judge. Judgment r eversed

. Postjudgment order denying attorney fees affirmed

. Leonard, Dicker & Schreiber, Richard C. Leonard and
Kevin S. Dicker for Plaintiff and Appellant

. The Ryan Firm, Timothy M. Ryan

, Andrew J. Mase and
Tadeusz McMahon for Defendants and Appellants Seterus, Inc. and Federal National Mortgage Association

.

______________________________2 Plaintiff 1197 West 39th Street, LLC (the C ompany) purchased from the trustee of Stanley Simmons’s bankruptcy

estate property encumbered by a deed of trust securing a loan to Simmons

. T he Company sued Federal National Mortgage
Association (Fannie Mae)

— the deed of trust’s successor beneficiary

— and Fannie Mae’s loan servicer

, Seterus, Inc. (collectively the Fannie Mae parties)

, for declaratory relief to
determine the amou nt required to pay off the loan . It also sued Fannie Mae for damages for an alleged refusal to provide certain information in violation of Civil Cod e section 2943

. 1 After a bench trial the trial court entered judgment in favor of the Company. On the decl aratory relief cause of action, the
court determined the am ount due to be $185,107.69. On t he
cause of action for a violation of section 2943, the court awarded the Company $88,850 in damages jointly and severally against the Fannie Mae parties

. Although t he court found the Company to be the prevailing party entitled to its costs of suit, including attorney f

ees if applicable, it denied t he Company ’s motion for attorney fees

. The Fannie Mae parties appeal the judgment on a variety of grounds, including the bankruptcy court had exclusive jurisdiction over the Company’s action; the cause of action for
violation of Civil Code section 2943 was preempted by federal law; and the Company failed to establish the elements required by Code of Civil Procedure section 1060 for declaratory relief. 2

1 Undesignated statutory references are to the Civil Code except in section 4 of the Discussion.

2 T he Fannie Mae parties, contending the Company failed to establish the existence of an actual controversy necessary to succeed on its declaratory relief cause of action, argued in the3

The Company appeals the trial court’s postjudgment order denying attorney fees. 3 We reverse the judgment and affirm the postjudgment order denying attorney fees

. FACTUAL AND PROCEDURAL BACKGROUND

1. The Complaint and First Amended Complaint

On May 11, 2016 the Company filed this action for declaratory relief against the Fannie Ma e par ties to determine
the amount due on the secured loan that had been made to
Simmons . On July 13, 2016 the Fannie Mae parties demurred to the complaint asserting that the Company , because it was not the borrower and had neither personal liability under the loan nor a contractual relationship with the Fannie Mae parties, lacked standing to pursue the matter and also that they were prohibited by law, including federal privacy laws, from sharing information with the Company absent authorization from Simmons , th e borrower

. The demurrer was noticed for hearing on February 17,
2017. O n September 2, 2016 the Company filed a first amended complaint that added a second cause of action against only Fannie Mae for violation of section 2943

. In its first amended complaint t he Company alleged its
lawsuit involved a deed of trust record ed on August 4, 2005 against property located at 1197 West 39th Street in Los Angeles

trial court, and asserted at l east inferentially on appeal, that the Company lacked standing to seek a determination of the outstanding amount due on the loan to Simmons, which was secured by the deed of trust. At our request, the parties submitted supplemental briefing on the issue o f standing.

3 On March 11, 2020 we granted the Company’s unopposed motion to consolidate the two appeals.4

that secured a loan to Simmons in the original sum of $285,000 at an interest rate of 5.6 25 percent. The deed of trust and underlying loan changed hands several times but were eventually assigned to Fannie Mae, which hired Seterus to service the loan. Simmons filed for bankruptcy, and ownership of the property passed to his bankruptcy estate . On November 23, 2015 the Company purchased the property from the bankruptcy trustee subject to the deed of trust. On or about December 2, 2015 the Company began contacting the Fannie Mae parties to learn the outstanding loan amount.
T he Fannie Mae pa rties provided a dema nd dated January 8, 2016
, addressed to Simmons and attached as an exhibit to the first amended complaint, which stated the amount required to reinstate the loan to a current status was $32,539.81 if received between January 8, 2016 and February 5, 2016

. The
demand indicated that reinstatement amount was comprised of $24,693 .90 in past due principal and interest payments ; $7,449.39 in tax and in surance payments; actual charges through February 5, 2016 ( including one $411.92 entry with a due date in May 2015 for “PSLGLPOSTINGCOST” ) ; est imated charges through February 5, 2016; and a subtraction (

- $209.52) for “Suspense Funds.” The January 8, 2016 demand stated the unpaid principal balance was $212,101.76

. The first amended complain t noted the January 8, 2016
demand did not further divide the $24,693.90 amount between principal and interest

, and the $7,449.39 amount between tax and insurance

. The Company alleged it had paid all property
taxes due from the date it took title and it h ad also purchased insurance and an umbrella policy of $5 million

. It questioned the charges on the demand as unsupported and contended the May5

2015 charge of more than $400 for posting costs violated an automatic stay issued by the bankruptcy court.
T he Company alleged it wired $3 2,539.81 to Seterus on February 4, 2016, and on February 26, 2016 sent another $5,000, which Seterus accepted. Since February 26, 2016 Seterus either refused to c ash the Company’s checks or, when the Company paid electronically, returned money to the Company’s account. Although the Company submitted payments totaling $180,000
betwe en April 1 and April 14, 2016, all of the payments were
returned or not cashed. T he Company sent a replacement check in the amount of $180,000. On March 30, 2016 Seterus sent a new demand

, addressed to Steven Schuman of Leonard, Dicker & Schreiber LLP and also attached as an exhibit to the first amended complaint , that set forth a payoff amount rather than a reinstatement amount. The demand explained that “ t he amount required to pay your loan in full is $213, 429.17,” a “payoff figure” that was “good through April 22, 2016,” with funds received after April 22, 2016 “requir[ing] an a dditional $32.18 interest per day.” T he Company alleged the March 30, 2016 demand contained unsupported

amounts that it disputed were owed . It also alleged the Fannie Mae parties refused to provide any back

- up or explanation for the charges i n either of the demands. It further contended interest should stop running on the amounts tendered by the Company from the dates of each payment even though the Fannie Mae parties had refused to accept and/or returned the funds. The Company sought a declaration of t he am ount due on the loan. It alleged entitlement to attorney fees pursuant to a paragraph of the deed of trust and section 1717.6 T he second cause of action alleged section 2943 required Fannie Mae to provide certain information to the Co mpany within 21 days of demand

— including the balance owed on the obligation; the amount of the monthly payment; the amount of the impound or escrow account; the nature and amount of any expense that Fannie Mae claimed had become a lien on the

pro perty; and the t otal amount due

— but Fannie Mae failed and refused to provide the information in a timely manner, or at all. Despite the Company’s continuing requests for an accounting after filing of its action, the Fannie Mae parties’ counsel refused to provide further information. The first amended complaint
attached exhibits described as “some of the relevant correspondence.” On July 21, 2016 Seterus returned the sum of $178,026.92 to the Company without an explanatio n. The Company further alleged

, for its second ca use of action

, it had been damaged as a result of the rise in interest rates pending resolution of the matter because it was unable to refinance the property . It sought compensatory damages and a statutory penalty.

2. The Fannie Mae Parties’ Demurrer to the First Amended Complaint The Fannie Mae parties demurred to the first amended complaint contending, among a host of other arguments, the Company failed to allege facts sufficient to establish an actual controversy because it lacked standing to pursue its action: As asserted by the Fannie Mae parties, a lender had no duty to accept a new owner of the collateral property as a borrower, as shown by title 12 United States Code section 1701j

- 3’s7

authorization of “due

- on

- sale clause[s]” 4 ; section 13 of the deed of the trust in the case at bar provided in part, “[A]ny Successor in Interest of Borrower who assumes Borrower’s obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower’s rights and benef its under this Security Instrument . Borrower shall not be released from Borrower’s obligations and liability under this Security Instrument unless Lender agrees to such release in writing”; the Company was not a party to, or named as an intended beneficia ry of, the loan secured by the deed of trust and had not assumed personal liability for the loan, which only reflected a contractual relationship between Simmons and the Fannie Mae parties; and federal district court s have held that a nonborrower lacks standing to challenge a deed of trust solely based on an ownership interest in the collateral property. For the cause of
action for violation of Civil Code section 2943, the Fannie Mae parties argued the first amended c omplaint failed to allege facts
sufficient to show when a written demand for information required under that statute was made to Seterus or Fannie Mae. They also contended the March 30, 2016 demand to Schuman provided information complying with the statut e. In its opposition the Company argued it did not claim to be
the borrower an d neither want ed to assume , nor claimed to have

4 A “due

- on

- sale clause” is defined for purposes of title 12 United States Code section 1701j

- 3 as “a contract provision which authorizes a lender , at its option, to declare due and pay able sums secured by the lender’ s security instrument if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred wi thout the lender’ s prior written consent .”8

assumed, the loan

. It argued it had standing to assert its declaratory relief cause of action as owner of the property and
dis agreed declaratory relief was available only for claims between parties to a contract. It also contended its first amended complaint provided dates and details regarding its attempts to obtain information. As for the March 30, 2016 payoff demand

statemen t, the Company argued it was entitled to an accurate payoff demand statement under section 2943 but the Fannie Mae parties did not provide accurate information. The trial court overruled the demurrer to the declaratory relief cause of action

. T he court determined the Company, as owner of the property, had standing to seek a declaration as to
the amount owed on the lien. The court, however, sustained the demurrer to the cause of
action for violation of section 2943 with leave to amend . After setting forth relevant provisions of that section

— including the statutory requirement a “beneficiary, or his or her authorized agent,” deliver a beneficiary statement or a payoff demand statement within 21 days of a written demand by an “[e]ntitled

person, ” defined to include the trustor’s or mortgagor’s successor in interest in the mortgaged o r trust property

— the trial court, stating statutory causes of action must be ple a d ed with particularity, determined the Company’ s claim was unclear and did not allege when any written demand was made for which the Fannie Mae parties had allegedly failed timely to respond

. The

court also granted the motion to strike attorney fee allegations with leave to amend, on the ground the Company was not a party
to the loan or d eed of trust and did not allege it had assumed, or substituted in as a party to, either agreement.9 3

. The Operative Second Amended Complaint and the Fannie Mae Parties’ Demurrer to the Second Amended Complaint and Motion To Strike

On February 28, 2017 t he Company filed the operative
second amended c omplaint

. With two exceptions, t he allegations for the first cause of action for declaratory relief remained the same, or substantially the same. 5 As for the second cause of action for violation of

se ction 2943, which the Company continued to assert only against Fannie Mae

, t he second amended complaint added new allegations describing emails to the Fannie Mae parties in May
and June 2016 requesting an accounting and other loan
information . The emails were from Schuman, whom the Company identified as its counsel

. T he second cause of action
also contained a new allegation that the Fannie Mae parties’
actions and omissions also constituted “a violation of 12 U.S.C. § 2601, entitled Real Estate Settlement Procedures [Act] (RESPA), the relevant terms of which are largely incorporated by reference into the Deed of Trust.” 6 The Fannie Mae parties demurred to the second amended complaint on several grounds

. They again argued , with respect

5 The two exceptions were: (1) the addition of an allegation that the monthly amounts comprising the $7,449.39 in tax and insurance payments set forth in the January 8, 2016 demand were impounds and not amounts the Fannie Mae parties had paid to someone e lse; and (2) the deletion of the paragraph regarding entitlement to attorney fees under section 1717 and the deed of trust.

6 With regard to the prayer for relief for attorney fees, although the first amended complaint stated entitlement to “costs10

to the d eclaratory relief cause of action, the Company’ s lack of standing. The Fannie Mae parties also moved to strike the
references to a violation of RESPA and entitlement to attorney fees. In support of their motion to strike the RESPA reference

, the Fannie M ae parties argued they had remove d the action to federal court based on the Company’s allegation they had
violated RESPA but the Company filed a motion to remand in
which it admitted it was not relying on that allegation as the basis for any form of relief . The Company’s motion to remand, which was attached as an exhibit to the Fannie Mae parties’ motion to strike, stated the Company “seeks no enforcement of RESPA”; there was “no claim for damages under RESPA”; “[t]he fact that the Deed of Trust happens to incorporate by reference certain terms of RESPA does not mean that any issue arising under the Deed of Trust must be

— or can be

— handled in Federal Court”; “[a]ll of [the Company’s] claims fall under the Deed of Trust and Civil Code § 2943” ; and, because the case did not involve a question of federal law, the matter should be remanded
to the state court. The Company filed an opposition to the Fannie Mae parties’ demur rer and motion to strike. T he Company assert ed the Fannie Mae parties ’ challenges to the declaratory relief cause
of action were already rejected when the trial court over ruled their demurrer to the first amended complaint. In opposing the
motion to stri ke the RESPA allegation, the Company , attaching a copy of the district court’s April 10, 2017 order remanding the
action

, pointed out that court had determined a fleeting reference

of suit , including attorneys’ fees,” the second amended complaint added the language “if applicable.”11

to RESPA buried in a cause of action under section 2943 was insufficient to confer federal question jurisdiction; federal law, specifically RESPA, did not create the cause of action; and the Company’s right to relief did not depend on a resolution of the RESPA allegation. The Company acknowledged its “claims arise
under the deed of trust, not RESPA, as the Federal Court has already decided,” but argued there was no reason to strike any reference to RESPA from the second amended complaint

. On March 5, 2018 the trial court overruled the Fannie Mae parties’ demurrer to the second amended complaint , but

, granting their motion t o strike without leave to amend, struck the allegation relating to RESPA, as well as the allegation of entitlement to attorney fees in the prayer for relief.

4

. The Fannie Mae Parties’ Motion for Summary Judgment or, in the Alternative, Summary Adjudication

On April 19, 2018 the Fannie Mae parties moved for summary judgment, or in the alternative, summary adjudication on both causes of action. The notice of motion identified

two issues for sum mary judgment or adjudication: (1) The second cause of action for a violation of section 2943 was without merit because “the undisputed facts show that Plaintiff received a payoff statement dated March 30, 2016, and a beneficiary statement in July 2016 in response to its singular request for said statement”; and (2) the first cause of action for declaratory relief was without merit because “the undisputed facts show that all charges, fees, and payments made by Plaintiff are accurately accounted for, and no actual controversy exists as to the amount required to satisfy the deed of trust.” On July 17, 2018 the trial court issued an order denying
the motion. Although the order stated “t he refusal to accept12

partial payment does not provide a basis for declar atory relief”
and “the Reinstatement charge of $411.92

, ” “ the accounting for the $5,000 payment from February 26, 2016 ,” and “the escrow
account balance ” similarly do “ not provide a basis for declaratory relief or set forth an inaccuracy in the statement
, ” the court
denied the motion for summary adjudication as to the f irst c ause of a ction due to a material factual dispute regarding the requirement to pay for property insurance. Because of material
fact disputes as to whether the Fannie Mae part ies timely provided accurate pa yoff and beneficiary statements

, the court denied the motion for summary adjudication as to the second
cause of action.

5

. The Trial The bench trial commenced on February 7, 2019. The only witness who testified in person was Schuman , who, along with another attorney, also appeared as the Company’s counsel

. The court admitted many of the Company’s exhibits into evidence. On February 8, 2019 t he Fannie Mae parties sought to
have Ren e Burden, a Seterus employee, testify. The Company objected on the ground another witness, Janisse Hall

, had been produced for deposition as Fannie Mae’s person most knowledgeable about the loan but Fannie Mae refused to have Hall appear at trial. ( The F annie Mae parties’ counsel had explained Hall, as an out of state witness, could not be compelled
to attend the trial

. ) Counsel for the Fannie Mae parties told the
court Burden was on the witness list , the deposition that had
taken p lace was for Fannie Ma e’s person most knowledgeable

, and the Company had voluntarily withdrawn its request to depose Seterus’s person most knowledge able. The Fannie Mae parties’ counsel, as an offer of proof, stated Burden would testify13

about Seterus’s practices as a loan serv icer and its accounting for
Fannie Mae. He explained Fannie Mae, although an owner of the loan, was an investor who did not perform accounting for its own loans; rather, it used servicers like Seterus for the sole purpose of

“ keeping the books. ”
The court replied, “No, not going to do that.” The court
stated , “We don’t play fast and loose with, ‘W ell, you didn’t ask for the right name, didn’t ask for the right label. ’ ” Although the
court stated the “obvious cure” was to provide the Company an opport unity to depose Burden, the court explained, the “problem is, we’re here in the middle of trial.” After further argument from the parties’ counsel, the court asked the Fannie Mae parties’ attorney to identify the business records about which the Fannie
Ma e parties sought testimony. Among the records identified by the Fannie Mae parties’ attorney was trial exhibit 217, which was comprised of account records that had been produced to the Company. The Company’s attorney objected to the admissibility
of tria l exhibit 217 for lack of foundation, and the Fannie Mae parties’ attorney explained Bu rden could testify in depth about the account history and its creation. The court told the Fannie Mae parties’ counsel, “I don’t want the defense to be prejudiced in t erms of putting on the case. So if you deem to put Ms. Burden up for a deposition, after the deposition we’ll resume the trial.” Asked by the court when he wanted to take Burden’s deposition, the Company’s attorney responded he did not wish to take her d eposition. The court stated, “[B]ut I can’t let her testify. Unless you’re not objecting to her testifying and whatever happens happens.” The Company’s attorney replied, “I move to exclude her. The court’s denied that14

and offered me the deposition, so now I’ve got a choice. I either
have to

— right now it’s on me.” The court stated, “It is on you.” 7 The court proposed the parties submit the balance of their arguments in written briefing for the court to rule on and also
referred to an earlier discus sion about the parties submitting closing arguments in writing

. It stated, “I’ll receive whatever and the parties agree that my statement of decision will be based on those briefs and the evidence I’ve received today.” The court clarified the evidence received that day included trial exhibit 217

, which was admitted into evidence

. The Company’s counsel stated he agreed. The court and parties discussed the admissibility of each of the defense’s additional exhibits , more of
which were admitted i nto evidence that day.

6. The Proposed Statement of Decision, the Final Statement of Decision , the Fannie Mae Parties’ Objections and the Judgment The parties submitted their post trial/ closing argument briefs on February 15, 2019. On April 26, 2019 the trial court
filed its “Proposed Statement of Decision” representing its “Intended Statement of Decision

, ” which it explained it was

7 Based on the February 8, 2019 transcript of the court’s discussion with the parties, the parties on appeal dispute whether the trial court had excluded Burde n from testifying. The Fannie Mae parties contend the trial court abused its discretion in prohibiting Burden from testifying. The Company asserts the trial court had denied the Company’s motion to exclude Burden and the Fannie Mae parties thus chose not to call Burden to the stand. The Company also points out it had brought a motion in limine to exclude evidence not produced in discovery, which it contends includes Burden’s testimony, and the court never formally ruled on that motion.15

submitting pursuant to California Rules of Court,
rule 3.1590(c)(4). The proposed statement of decision indicated
the only witness who testified was Schuman and the defense was comprised solely of the cross

- examination of that witness. The

court attached and incorp orated by reference its minute orders detailing the trial exhibits that had been marked, identified
and/or a dmitted in the case. The document also stated, “This
Intended Statement of Decision is submitted in an effort to provide the parties with an understanding of the legal and factual basis for the Court’s rulings.” Under the heading “Factual Summary

, ” 8 the court set forth what it described as “[t]he material, significant facts.” I n a separate section titled “Legal Analysis

— Plaintiff’s Cause of Action for Accounting under
Civil Code 2943

, ” 9 t he court stated in part, “Plaintiff bought the property for $22,0 00 cash subject to a lien of $51,000 and Defendants’ Deed of Trust. Plaintiff paid $39,512.89 and owes another $185,107.69. This evidence was unchallenged.” The court found the Company had sustained damages, discussed its damages calculation and stated the Company was entitled to $87,850. It declined to award any statutory penalties under section 2943, subdivision (e)(4).

8 We have omit ted all unnecessary capitalization of letters, underling and bold

- face type in the trial court’s orders, the parties’ discovery requests and any other documents quoted.

9 Although the introductory paragraphs of the proposed statement of decision referred to the Company’s two causes of action as one for an “accounting (declaratory relief)” and another for “violation of Civil Code Section 2943,” its legal analysis section did not differentiate between the two causes of action.16 On April 26, 2019 a minute order was entered that stated, “The Proposed Statement of Decision will become the final
Statement of Dec ision unless objections or proposals are received pursuant to California Rules of Court [

, rule] 3.1590(c)(1).” On May 16, 2019 the trial court filed its “Final Statement of
Decision

, ” which was substant ially the same as its proposed
statement of decision , except it stated the Company was entitled to $88,850 in damages

. 10 On May 20, 2019 the Fannie Mae parties filed objections to the April 26, 2019 proposed statement of decision on a variety of grounds. On May 23, 2019 the Fannie Mae parties f iled renewed objections on the same grounds, as well as objections to the proposed judgment. On June 6, 2019 a minute order was entered stating the Fannie Mae parties’ May 20, 2019 objections, which the trial

cou rt found were “timely filed,” 11 were overruled. The trial court also overruled their May 23, 2019 renewed objections and objections to the proposed judgment. The court entered judgment o n June 12, 2019 . In its judgment the court stated, for the first c ause of action, it “finds
and determines that the amount due on the First Deed of Trust is $185,107.69.” For the second cause of action, the court stated it “finds in favor of [the Company]

, and against [the Fannie Mae parties], and awards damages in the sum of $88,850, jointly and

10 In its subsequently entered judgment the court explained the difference in the amount of damages was due to a mathematical error in the April 26, 2019 proposed statement of decision.

11 The proposed statement of decision had been mailed to the parties’ counsel on a date later than April 26, 2019.17

severally.” ( Internal footnote has been omitted. ) The court found the Company to be the prevailing party and entitled to its costs of suit, “including if applicable attorneys’ fees,” against the Fannie Mae parties.

DISCUSSION

1

. The Fannie Mae Parties Fail ed To Es tablish the Bankruptcy Court Had Exclusive Jurisdiction over the Action

a. Background facts

At trial Schuman testified he was one of two managers of the Company, which was formed in late 2015 for the purpose of buying a triplex from Simmons’ s bankruptcy estate. The Company bought the property pursuant to an asset purchase agreement entered into on October 31, 2015 by thre e parties: the Company; the trustee for Simmons’s bankruptcy estate ; and Peter Lively , a bankruptcy attorney who was Schuman’s friend
and had told Schuman about the bankruptcy trustee’s attempt to
sell the property

. According to the asset purchase agreement’s
recitals , on November 26, 2013, Simmons had filed a voluntary
b ankruptcy petition pursuant to chapter 7 of t it le 11 of the United States Code; the property , which the bankruptcy trustee had acquired by setting aside fraudulent transfers in an

a dversary proceeding

, was among the assets of the bankruptcy

estate ; Lively had recorded an abstract of judgment with the
Los Angeles County Recorder’s Office and had a secured claim against the estate in the approximate amount of $51,000 ; the Company wishe d to purchase the property; and the bankruptcy trustee wished to resolve Lively’s claim.
The asset purchase agreement provided the bankruptcy trustee was to pay $15,000 to Lively upon entry of a final order18

approving that agreement, with the balance of L ively’s claim to be the Company’s responsibility and Lively having no further claim against the bankruptcy trustee or the bankruptcy estate. Upon entry of that final approval order, the bankruptcy trustee was to execute and deliver a quitclaim deed in fav or of the Company, with the Company purchasing the property on an “as is” basis, without any representations or warranties. The
effectiveness of the asset purchase agreement was subject to the approval of the court in which Simmons’s bankruptcy case was pending . The bankruptcy court’s order was to specify title was being transferred to the Company

, “ subject only to the existing
deed of trust recorded on August 4, 2005 as Inst. No. 05

- 1860555 ”

— that is, as shown by exhibits admitted at trial, the
deed of trust of which Fannie Mae was the successor beneficiary

— Lively’s abstract of judgment and real property taxes, if any. The asset purchase agreement provided, “No other liens shall attach to the Property.” It further provided, “ The parties hereto agree that the United States Bankruptcy Court for the Central District of California shall have sol e and exclusive jurisdiction, si tting without a jury, to hear and determine and [ sic ] disputes that arise under or on account of this Agreement.”
The asset purch ase agreement contained signature blocks for the bankruptcy trustee, Lively and Schuman as the Company’s managing member. On November 23, 2015 the bankruptcy court issued an
order authorizing the bankruptcy trustee to sell the property to
the Company. In conformity with the asset purchase agreement,

t he order provided the property was being sold “as is,” without any representations or warranties, and free and clear of all liens except for the August 4, 2005 deed of trust, Lively’s abstract of19

judgment and any real property taxes. The bankruptcy trustee was authorized and empowered to execute and deliver on behalf of the estate any and all documents as reasonably may be necessary to implement the terms of the propose d sale. The order further stated, “The Court shall retain jurisdiction to adjudicate any disputes that may arise in connection with the sale of the Property.” Subsequently, Schuman was given a quitclaim deed dated November 24, 2015 that provided the bank ruptcy trustee quitclaimed to the Company all of the bankruptcy estate’s right, title and interest in the property. The quitclaim deed’s cover page showed it was recorded December 2, 2015. Schuman testified he never filed a complaint in the B ankruptcy C o urt for
the Central District of California to determine the amount of a lien, nor did he submit any filing in the bankruptcy court to
determine the amount of Fannie Mae’s lien.

b. The bankrupt cy court did not have exclusive jurisdiction over the Company’ s claims The Fannie Mae parties contend on appeal, as they did in their February 15, 2019 closing brief in the trial court, the trial court lacked jurisdiction over the Company’s claims because, pursuant to the provisions of the asset purchase agreement a nd the bankruptcy court’s subsequent order, the bankruptcy court had exclusive jurisdiction over those claims. Specifically, the Fannie Mae parties argue the Company by its action seeks a determination of the amount due on Fannie Mae’s lien, which, they a ssert, is a “dispute[] that [arose] under or on account of” the asset purchase agreement and thus within the scope of that agreement’s exclusive bankruptcy court jurisdiction provision, as well as a “dispute[] that [has] arise[n] in connection with the sal e20

of the Property” and thus within the scope of the bankruptcy court’s November 23, 2015 order retaining jurisdiction. This argument fails as a matter of law. 12 “[T]here is . . . a ‘presumption of concurrent jurisdiction’
between federal courts and state courts.” ( Kingston Constructors, Inc. v. Washington Metropolitan Area Transit Authority (1997)

14 Cal.4th 939, 948.) Although “‘[we] begin[] with the presumption that state courts enjoy concurrent jurisdiction’” ( Cianci v. Superior Court (1985) 40 Cal.3d 903, 910), “‘Congress

. . . may confine jurisdiction to the federal courts either explicitly or implicitly. Thus, the presumption of concurrent jurisdiction can be rebutted by an explicit statutory directive, by unmistakable implication from legisl ative history, or by a clear

12 “‘It is

. . . solely a judicial function to interpret a written instrument unless the interpretation turns upon the cred ibility of extrinsic evidence.’ [Citation.] When there is no extrinsic evidence or ‘no conflict’ in such extrinsic evidence as has been introduced, ‘we must make an independent determination of the meaning’ of a legal instrument .” ( Faus v. City of Los Angeles (1967) 67 Cal.2d 350, 360; see Garcia v. Truck Ins. Exchange (1984) 36 Cal.3d 426, 439 [ interpretation of a written contract is “solely a judicial function . . . unless the interpretation turns upon the credibility of extrinsic evidence , even when conflicting inferences may be drawn from uncontroverted evidence” ] ; Gilkyson v. Disney Enterprises, Inc. (2021) 66 C al.App.5th 900, 915 [“[a] bsent any conflict in extrinsic evidence, we review de novo issues regarding the proper interpreta tion of a contract”].) The Fannie Mae parties, in asserting in the trial court their argument the bankruptcy court had exclusive ju risdiction, did not rely on any disputed extrinsic evidence for the interpretation of the asset purchase agreement or the bankruptcy court’s November 23, 2015 order.21

incompatibility between state

- court jurisdiction and federal
interests. ’ [Citation.] Put otherwise, ‘the presumption is that jurisdiction is concurrent, and some strong showing of need for exclusive jurisdiction is required t o overcome that presumption.’” ( Ibid

. ; accord, Mims v. Arrow Financial Services, LLC (2012)
565 U.S. 368, 378

. ) Here, the Fannie Mae parties do not re ly on a statutory
basis to assert the bankruptcy court has exclusive jurisdiction over the Company’s cl aims. Indeed, they argue t itle 28 United States Code section 1334(b)

— which state s, except as provided in a subsection not relevant to this appeal, “notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or
courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under
title 11 ”

— should not control because the Company’s claims in
this action fall within the scope of the asset purchase agreement’s
and November 23, 2015 bankruptcy court order’s provisions pertaining to jurisdiction. As t he Company explains , however, the purpose of the asset purchase agreement, as set forth in its recitals, was to

e ffectuate the Company’s desire to purchase the property and the bankruptcy trustee’s desire to resolve Lively’s claim, with no mention of resolution of any claim over the amount of Fannie
Mae’s lien. T he Fannie Mae parties are not parties , the Company

argues, t o the asset purchase agreement; and, notwithstanding a reference to “the existing deed of trust recorded on August 4,
2005 as Inst. No. 05

- 1860555,” the Fannie Mae parties
themselves are not even mentioned in the agreement.22 One who is not a party to or an intended third party beneficiary of a contract ordinarily lacks standing to enforc e the
contract’ s terms. (

Berclain America Latina, S.A. de C.V. v. Baan Company N.V. (1999) 74 Cal.App.4th 401, 405 ; Eastern Aviation Group, Inc. v. Airb orne Express, Inc. (1992) 6 Cal.App.4th 1448,
1452 ; see § 1559 [intended third party beneficiary has standing to enforce contract].) While there are exceptions to this general principle

— for example, a nonsignatory may be able to enforce a
contractual foru m selection clause against a signatory if the nonsignatory was “closely related” to the contractual relationship, that is, the nonsignatory shared a “defined and intertwining business relationship with a contracting party” ( see,
e.g., Bancomer, S.A. v. Sup erior Court (1996) 44 Cal.App.4th 1450, 1458

- 1462 )

— n othing in the asset purchase agreement indicates the Fannie Mae parties had standing to enforce that agreement. Indeed, t he Fannie Mae parties ne ver attempt ed to establish they were parties, signatorie s or intended third party
beneficiaries of the asset purchase agreement, nor did they assert

or attempt to show they shared a defined and intertwining
business relati onship with a contracting party or otherwise had standing to enforce the asset p urchase agreement’s terms. A s for the bankruptcy court’s November 23, 2015 order authorizing the sale of the property , which also provides the court
retain s jurisdiction to adjudicate any disputes that may arise in connection with the sale, the Fannie Ma e parties never argued they were parties to any proceeding over which the bankruptcy court had “retained” jurisdiction

. In sum, the trial court properly exercised jurisdiction over the Company’s lawsuit. (See Ventura
v. ABM Industries Inc. (2012) 212 Cal.App.4th 258, 265 [“[t]he trial court has jurisdiction ‘unless and until’ the defendant proves23

otherwise”]; People v. Cru silla (1999) 77 Cal.App.4th 141, 146 [“it is well established that in state courts a claim that jurisdiction lies elsewhere (i.e., in the federal government) over an offense that is committed within the boundaries of the state, and that is defined by state law, is a defensive matter, and the defendant is required to allege and prove in the trial court ‘“any facts which he now claims might have had the effect of vesting exclusive jurisdiction in the federal courts”’” ]. )

2. The Company’s Cause of Action for Violation of Section 2943 Is Preempted and Must Be Dismissed The Fannie Mae parties contend federal law

— specifically, the Home Owners’ Loan Act (12 U.S.C. § 1461 et seq.) (HOLA) and regulations promulgated pursuant to HOLA by the Office of Thrift Supervis ion (OTS)

— preempts the Company’s second cause
of action for violation of Civil Code section 2943. 13 We agree: The undisputed facts and facts not reasonably subject to dispute establish preemption under HOLA. 14

13 As with the Fannie Mae parties’ bankruptcy jurisdiction contention, neither the statement of decision, which purported to provide the basis for the court’s rulings, nor anything else in the record indicates the court ruled on the preemption argument

, even though the Fannie Mae parties had set forth that argument in their closing brief and objected to the proposed statement of decision for omitting the issue. Even if the trial court had ruled there was no preemption, we would reverse.

14 Federal preemption presents “a pure question of law” subject to de novo review. ( Farm Raised Salmo n Cases (2008) 42 Cal.4th 1077, 1089, fn. 10; accord, Herpel v. County of Riverside (2020) 45 Cal.App.5th 96, 100; see Spielholz v. Superior Court (2001) 86 Cal.App.4th 1366, 1371 [“[p] reemption is a legal issue involving statutory construction and the asc ertainment of24 As discussed, the Company alleged Fannie M ae, as holder of the deed of trust securing the loan to Simmons

, was required under section 2943 to provide certain information and disclosures regarding the loan , such as the amount needed to pay off the
loan

, within 21 days of the Company’s demand , but Fannie Mae failed to respond timely or at all. T he de ed of trust, an exhibit
admitted at trial

, is dated July 29, 2005; identifies the lender as “IndyMac Bank, F.S.B., a federally chartered savings bank” ; provi des, “Lender is a Federal Savings Bank organized and existing under the laws of the United States of America”; defines “Loan” as “the debt evidenced by the Note

, ” plus other amounts such as interest and any late charges ; and defines “Note” as “the promisso ry note signed by Borrower and dated July 29, 2005.” Similarly, the promissory note, als o an admitted trial exhibit, is
da ted July 29, 2005 and identifies the lender as “IndyMac Bank, F.S.B., a federally chartered savings bank.” The Company did

not dispu te IndyMac Bank was the original lender and was at the
time a federally chartered savings bank. IndyMac Bank’s uncontested federal savings bank status necessarily means the Company’s section 2943 cause of action against Fannie Mae was preempted.

legislative intent, which we also review de novo ”].) “However,

‘ when conflicting inferences may be drawn from undisputed facts, the reviewing court must accept the inference drawn by the trier of fact so long as it is reasonable. ’ ” ( Herpel , at p. 100.) Here, although the trial court made no ruling on the Fannie Mae parties’ preemption argument, and notwithstanding the Fannie Mae parties disputed they violated section 2943, the parties in the trial court and on appeal did not, for pur poses of the preemption issue, identify any material underlying facts or inferences that are disputed.25 “Whether state law is preempted by federal law depends on whether Congress intended that federal law supersede state law.” ( Lopez v. World Savings & Loan Assn. (2003) 105 Cal.App.4th 729, 736 ( Lopez

) ; accord, Peatros v. Bank of America (2000)

22 Cal.4th 147, 157 [“[w]hether federal law preempts state law is fundamentally a question whether Congress has intended such a result”]. ) “‘[F]ederal regulations have no less pre

- emptive effect than federal statutes.’” ( Lopez , at p. 736; accord, Jevne v. Superior Court (20 05) 35 Cal.4th 935, 950.) “Between 1933 and 1989, federal savings and loan
associations (also referred to as thrift institutions or thrifts) were regulated under . . . HOLA by the Federal Home Loan Bank
Board [the Board] ,” which “was given ‘ plenary authori ty to issue regulations governing ’ thrift institutions and superseding state law.” ( Akopyan v. Wells Fargo Home Mortgage, Inc. (2013)
215 Cal.App.4th 120, 138 ( Akopyan ) ; see Fidelity Federal Sav. & Loan Assn. v. de la Cuesta ( 1982) 458 U.S. 141, 160, 162 [ under HOLA, “Congress gave the Board plenary authority to issue regulations governing federal savings and loans”; HOLA’s “statutory language suggests that Congress expressly contemplated, and approved, the Board’s promulgation of regulations supersedi ng state law”]. ) The OTS replaced the Board in 1989 and “was given the same plenary power to regulate federal savings associations.” ( Akopyan , at p. 138.) 15

15 As also explained in Akopyan

, supra , 215 Cal.App.4th at page 140, “[t]o allow federal thrifts ‘greater flexibility in their lending and investment ope rations,’ the OTS .

. . directed the thrifts to comply with the uniform interagency real estate lending standards set forth at 12 Code of Federal Regulations part s 56 0 .100 and 56 0 .101,” which “required that a savings association ‘establish loan administrat ion procedures for its real26 The OTS in 1996 adopted 12 Cod e of Federal Regulations part 560.2
, in which, at paragraph (a), the OTS made clear it “occupie[d] the entire field of lending regulation for federal savings associations.” (61 Fed.Reg. 50951

- 5095 2 , 50965

- 50966 (Sept. 30, 1996); 12 C.F.R. § 560.2(a).) “Federal savings association” under HOLA includes a federally chartered savings bank. (12 U.S.C. § 1462(3) [“[t]he term ‘Federal savings association’ means a Federal savings association or a Federal savings bank chartered under section 1464 of this title ” ]; see Appling v. Wachovia Mor t g., FSB (N .D.Cal. 2010) 745 F.Supp.2d 961, 970

- 971 [“Federal savings associations, including federal savings banks, are subject to HOLA and regulated by the Office of Thrift Supervision”].) In keeping with its “inten[t] to give federal savings associations maximum flexibility to exercise their lending powers in accordance with a uniform federal scheme of regulation,” the OTS allowed f ederal savings associations to

“ extend credit as authorized under federal law, including this part, without regard to state laws purpo rting to regulate or otherwise affect their credit activities

, ” subject to certain exceptions. (12 C.F.R. § 560.2(a).) In p ar agraph (b) the OTS provided a non

- exhaustive list of examples illustrating “the types of state laws preempted by paragraph (a),” such as, at subparagraph (9), “[d]isclosure and advertising, including laws

estate portfolio,’ addressing such matters as . . . payment processing; . . . loan payoffs; . . . and servicing and participation agreements. (Appen

. to 12 C.F.R. § 560.101.) The reference to servicing agreements, a feature of third party loan servicing arrangements, suggests that such arrangements fell within the scope of the interagency real estate lending standards that federal thrifts were directed to follow.” (Fn. omi tted. )27

requiring specific statements, information, or other content to be included in . . . billing statements . . . or other credit

- related documents” and, at subparagraph (10), “[p]roce ssing, origination, servicing, sale or purchase of, or investment or participation in, mortgages.” (12 C.F.R. § 560.2(b) (9) & (10).) “Paragraph (c) saved from preemption certain state laws, such as contract law, ‘to the extent that they only incidentally affect the lending operations of Federal savings associations or are otherwise consistent with the purposes of paragraph (a).’” ( Akopyan

, supra , 215 Cal.App.4th at p. 139; see 12 C.F.R. § 560.2(c). )
T he OTS supplied the following guidance on how to

c onstrue its regulation : “In this regard, OTS wishes to make clear that the purpose of paragraph (c) is to preserve the traditional infrastructure of basic state laws that undergird commercial transactions, not to open the door to state regulation of lending b y federal savings associations. When analyzing the status of state laws u nder § 560.2, the first step will be to determine whether the type of law in quest ion is listed in paragraph (b). If so, the analysis will e nd there; the law is preempted. If the law is not covered by paragraph (b), the next question is whether the law aff ects lending. If it does, then, in accordance with paragraph (a), the presumption ar ises that the law is preempted. This presumptio n can be reversed only if the law can clearly be shown to fit within the confines of paragraph (c). For these purposes, paragraph (c) is inten ded to be interpreted narrowly. Any doubt should be resolved in favor of preemption.” (61 Fed.Reg. 50951, 50966

- 50967 (Sept. 30, 1996) ;

see McShannock v. JP Morgan Chase Bank NA (9th Circ. 2020)
976 F.3d 881 , 890 (

McShannock ) ; Silvas v. E*Trade Mortg. Corp. (9th Cir. 2008) 514 F.3d 1001, 1005. ) “In applying this28

framework, we are ‘not limited to assessing whether the state law on its face comes within paragraph (b) of the regulation.’ [Citation.] ‘Instead, we ask whether the state law, “as applied, is a type of state law contemplated in the list under paragraph (b)

. . . . If it is, the preemption analysis ends.” ’ ” ( McShannock , at p. 890 .) Here, t he Company’s cause of action alleging Fannie Mae failed to provide , or timely to provide, certain information and
other disclosures about the loan, including the balance owed, in violation of Civil Code se ction 2943 is preempted because it relies on an application of that statute falling within the scope of

12 C ode of Federal Regulations part 560.2(b)(9) (disclosure)
and/or (10) (processing or servicing of a mortgage )

. (See , e.g., Lopez

, supra , 105 Cal.App.4th at pp. 732, 735, 739, 742 [ “[w]e
hold that Civil Code section 2943 is within the scope of those provisions that 12 C.F.R. part 560.2 is intended to preempt”; concluding that plaintiff’s causes of action challenging the practice of a feder al savings association of charging a $10 fee for the fax transmission of a payoff demand statement in violation of Civil Code section 2943 were preempted by HOLA and the OTS’s regulations in part because “[p]aragraph (b) . . . includ[es] ‘(5) Loan

- related fees, including without limitation, .

. . servicing fees’” and “[p]roviding the payoff demand statement is a service

. . . and is a necessary step in paying off the loan” ]; Becker v. Wells Fargo Bank, N.A., Inc. (E.D.Cal. Mar. 2 1 , 2011 , No. 2:10

- cv

02799 L KK KJN PS) 2011 U.S.Dist. Lexis 29687

, p p

. * 45

- 47 [plaintiff’s claims that defendants violated Civil Code
section 2943 “by improperly responding or failing to respond to
his written demands for infor mation about his loan debts” were preempted by HOLA because “[c]ourts analyzing Section 294329

and HOLA preemption in similar cases have found preemption and dismissed the claim”; quoting as an example a federal district
court case from the Southern District of California that concluded

a c laim for alleged failures to respond to a demand letter was preempted because Civil Code section 2943 “ ‘ imposes a requirement rel ated to disclosure, 12 C.F.R. § 560.2(b)(9), or the processing or servicing of mortgages, ’ ” [12 C.F.R.] § 560.2(b)(10) ’ ” ]; see also Becker v. Wells Fargo Bank, N.A., Inc. (E.D.Cal. Sept. 19, 2012, No. 2:10

- cv

- 02799 LKK KJN PS) 2012
U.S.Dist. Lexis 134986

, p. * 14 [“district courts within this circuit have rejected plaintiff’s argument that instruments and ‘notes’ are not ‘mortgages ’ and are therefore outside the scope of
12 C.F.R. § 560.2(b)(10)”]

. ) To be sure, “[u]nder the Dodd

- Frank Wall Street Reform and Consumer Protection Act (Dodd

- Frank Act) (Pub.L. No. 111

- 203 (July 21, 2010) 124 Stat. 1376),

. . . 12 Code of Federal Regulations . . . part 560.2 was superseded” ; “the OTS was merged into the Office of the Comptroller of the Currency (OCC), which regulates national banks” ; and “ [f]ield preemption under

. . . HOLA was eliminated.” ( Akopyan

, supra , 215 Cal .App.4th at

pp. 136, 139 , fns. 8, 10 ; see 76 Fed.Reg. 48950, 48952 (Aug. 9, 2011) [ the “ OTS regulations at 12 CFR parts 545, 550, 557 and 560 include certain ‘occupation of the field’ statements on Federal preemption”; “these occupation of the field statem ents in the OTS regulations have been removed from the Republished Regulations ”]. ) However, the Dodd

- Frank Act’s amendment s to HOLA preemption are prospective and do not affect loans originated under contracts entered into on or before July 21,
2010 , as is the case here

. ( See , e.g., Akopyan

, at p. 136, fn. 8 [the
Dodd

- Frank Act’s “amendments to HOLA and [National Bank30

Act] preemption are prospective”] ; Meyer v. One West Bank, F.S.B. (C.D.Cal. 2015) 91 F.Supp.3 d 1177, 1180

- 1181 [“ The Dodd

Frank Act is not, however, retr oactive. Contracts formed before the Act’ s effective date [that is, on or before the July 21, 2010
date of enactment 16 ] are, therefore, subject to the preemption rules applicable at the time of formation ”]; Brown v. Wells Fargo
Bank

, N.A. (D.D.C. 2012) 869 F.Supp.2d 51, 56, fn. 5 [“[r]egulations, like statutes, cannot be applied retroactively absent express direction from Congress” ; “§ 560.2 governs in this case because it was the regulation in e ffect when the parties
entered into the Pick

- a

- Pay mortgage loan transaction”]; 17 see also Bowen v. Georgetown University Hosp. (1988) 488 U.S. 204,
208 [“congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result”]; 12 U.S.C. § 5553 [“This title . . . shall not be construed to alter or affect the applicability of any regul ation, order, guidance, or interpretation prescribed, issued, and

16 The effective date of the Dodd

- Frank Act wa s generally one day after “the date of enactment.” (Dodd

- Frank Act (Pub.L. No. 111

- 203 , § 4 (July 21, 2010) 124 Stat. 1376, 1390.) The Dodd

Frank Act was enacted on July 21, 2010. (E.g., Charter Township of Clinton Police & Fire Retirement System v. Mar tin (2013) 219 Cal.App.4th 924 , 929, fn. 4 ; McShannock , supra, 976 F.3d at p. 885, fn. 3. )

17 Although Brown v. Wells Fargo Bank, N.A.

, supra , 869 F.Supp.2d at page 56, footnote 5 , states the Dodd

- Frank Act was passed on July 21, 2011, that statement apparently reflects a typographical error: Brown cites Poindexter v. Wachovia Morg. Corp. (D.D.C. 2012) 851 F.Supp.2d 121, but Poindexter makes clear the Dodd

- Frank Act was enacted on July 21, 2010. ( Poindexter , at p. 128, fn. 11.)31

established by the Comptroller of the Currency or the Director of the Office of Thrift Supervision regarding the applicability of State law under Federal banking law to any contract entered into on or before the date of enactment of this Act [enacted July 21, 2010], by . . . Federal savings associations”]; Dodd

- Frank Act (Pub.L. No. 111

- 203 , § 1043 (July 21, 2010) 124 Stat. 1376, 2014 [setting forth the language codified under titl e 12 United States Code section 5553]

. ) 18

18 T he Department of the Treasury in 2017 promulgated a rule removing the OTS’s regulations, effective October 11, 2018. (See 82 Fed.Reg. 47083

- 47084 (Oct. 11, 2017); McShannock,
supra, 976 F.3d at p. 885, fn. 3.) That action, which the Department of the Treasury explained was taken because the Dodd

- Frank Act had abolished the OTS and transferred its rulemaking authority and operative rules to other agencies that had since issued superseding regulations (8 2 Fed.Reg. 47083 (Oct. 11, 2017), does not alter our conclusion HOLA preempts the Company’s cause of action for violation of Civil Code section 2943. As discussed, the Dodd

- Frank Act’s amendments to HOLA preemption are prospective and do not affect loans originated pursuant to contracts entered into on or before July 21, 2010. Moreover, the Department of the Treasury stated it issued the rule without providing the public with notice and an opportunity to comment as generally required under the Administrat ive Procedure Act (5 U.S.C. § 553) because the rule “does not make any substantive changes to the regulations currently applicable to savings associations and savings and loan associations and does not substantively affect these regulated entities or the

p ublic. It simply removes obsolete provisions that are likely to be a source of confusion.” (82 Fed.Reg. 47083

- 47084 (Oct. 11, 2017).) It also characterized the rule as “not a significant regulatory action” and stated “there is no Federal mandate imposed by this rulemaking.” (

Ibid .) Even after October 11, 2018 courts have continued to rely on 12 Code of Federal Regulations part 560.2,32 Without seriously disputing its section 2943 cause of action may have been preempted if asserted against IndyMac Bank, t he Company contends its cause of action against Fannie Mae, which is not a federal savings association, was not preempted because
the loan had been assigned to Fannie Mae and the challenged
conduct violating a state statute occurr ed after that assignment

. We agree with t he Fannie Mae parties that , because a federal savings association originated the loan

, HO L A preemption applies even though Fannie Mae is not a thrift and regardless of
wh en the challenged conduct occurr ed . Simply put, HOLA preemption “runs with the loan

. ” 19 ( Faught v. Wells Fargo Bank,

the OTS’s preemption regulation, to conclude state laws have been preempted by HOLA when the OTS’s regulation was effect ive at the time the loan was obtained. (See Asare

- Antwi v. Wells Fargo Bank, N.A. (9th Circ. 2021) 855 Fed.Appx. 370, 372, fn. 2; McShannock , at p. 885, fn. 3.)

19 Appling v. Wachovia Mortgage, FSB

, supra , 745 F.Supp.2d 961, a case on which the Company relies for its argument, actually supports a preemption conclusion. ( Appling , at p. 971 [“ although Wells Fargo itself is not subject to HOLA and OTS regulations, this action is nonetheless gov erned by HOLA because Plaintiff’ s loan originated with a federal savings bank and was therefore subject to the requirements set forth in HOLA and OTS regulations ”].) Moreover, in 2020 the Ninth Circuit in McShannock

— after explaining, “F ederal district courts that have addressed the question have t aken three d ifferent positions: (1) HOLA preemption applies to all conduct connected to a loan originating with a federal savings association; (2) HOLA preemption necessarily does not a pply to national banks; and (3) whether HOLA preemption applies depends on whether the claims arise from the conduct of the federal savings asso ciation or33

N.A. (E.D.Cal. Feb. 26, 2018 , No

. 2:17

- cv

- 01706

- MCE

- KJN) 2018
U.S.Dist. Lexis 31742

, p. * 13 ; s ee , e.g., McShannock

, supra , 976 F.3d at p. 889 [“there is little doubt that Congress intended HOLA to cover the sale of mortgages belonging to federal savings associations”], p. 895 [“[w]e hold that HOLA field preemption principles apply to Appellees’ claims against Chase, a national
bank

, even though its conduct giving rise to the complaint occurred after it acquired the loans in question from WaMu, a federal savings association”] ; OTS Opn. Letter No. P

- 2003

- 5 (July 22, 2003) 2003 OTS Lexis 6 , p p. * 2, * 13 & fn. 18 [ concluding

“ the borrower’s ability to assert claims and defenses against [purchasers or assignees of loans originated by federal savings associations] is limited by federal preemption ” ; state law “ might interfere with the ability of federal savings associations to sell

mo rtgages that they originate under a uniform federal system” ] ; see also Fidelity Federal Sav. & Loan Assn. v. de la Cuesta

, supra , 458 U.S. at p

. 155, fn. 10 [“[t]he marketability of a mortgage in the secondary market is critical to a savings and loan, for it thereby can sell mortgages to obtain funds to make additional home loans”] ; Akopyan

, supra , 215 Cal.App.4th at

p p

. 142

- 143 [ relying in part on “[t]he federal thrifts’ participation in the secondary market as buyers, sellers, or investors” and that
“thei r participation has been subject to federal regulation” to “conclude that the OTS intended to occupy the field of lending regulation as to both federal thrifts and their loans” ]

, 148 [“the rationale for applying preemption to the assignees of federal

of the national bank”

— proceeded to adopt the first approach. ( McShannock

, supra , 976 F.3d at p p

. 887

- 889 .)34

thrif ts is to allow the thrifts themselves greater freedom from state interference”].) Finally, in an argument it did not make in the trial court, the Company asserts its cause of action for violation of
section 2943 is not preempted because the Fannie Mae parties
had unsuccessfully attempted to remove the case to federal court on the ground the second amended complaint referred to a violation of RESPA . It quotes language from the district court’s order remanding the action for lack of subject matter jurisdiction
that “a fleeting reference to RESPA buried in a cause of action under § 2943 is insufficient to confer federal question jurisdiction,” and the court’s conclusion that “ p laintiff could not have originally broug ht this action in federal court, in that plaintiff does not competently allege facts supp lying federal question jurisdiction, and therefore removal was improper.” The Company , however, fails adequately to explain , with citation to legal authority, why the district court’s remand order p recludes the Fannie Mae parties’ preemption defense to the Company’s
claim for a violation of section 2943 . (See , e.g., Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017)

14 Cal.App.5th 343, 383 [“‘“[t]he absence of cogent legal argument or citation to authority allows this court to treat the contention as waived”’”]; Rojas v. Platinum Auto Group, Inc. (2013) 212 Cal.App.4th 997 , 1002 , fn

. 5 [“ [w] e . . . disregard [respondent’ s] assertion as unsupported by citation to lega l authority and cogent argument” ]

. ) 20

20 The Fannie Mae parties also contend the trial court erred in awarding da mages joint ly and several ly against both Fannie Mae and Seterus on the second cause of action because, as they had argued in their objections to the trial court’s then

- proposed35 3. The Company Lacked Standing To Assert Its Cause of Action for Declaratory Relief Code of Civil Procedure section 1060 provides in part, “Any

person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, . . . may, in cases of actual controv ersy relating to the legal rights and duties of the respective parties, bring an original action or cross

- complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of constr uction or validity arising under the instrument or contract.” “ ‘While section 1060’s language “ appears to allow for an extremely broad scope of an action for declaratory relief” [citation], “ an actual controversy that is currently active is required for such relief to be issued and both standing and ripeness are appropriate criteria
in that determination. [Citation.]” [Citation.] “ One cannot analyze requested declaratory relief without evalu ating the nature of the rights and duties that the plaintiff is asserting, which must follow some recognized or cognizable legal theories that are related to subjects and requests for relief that are properly before the court. ”’ ” ( Lee v. Silveira (2016) 6 Cal.App.5th
527 , 546.)

judgment, the operative second amended complaint expressly alleged that cause o f action was not directed against Seterus. The Company concedes the judgment reflects an apparent clerical error. No correction is necessary, however, because the judgment in favor of the Company on the second cause of action must be reversed in its enti rety.36 Here, the Company consistently maintained in the trial court, including in successfully moving to remand the action and opposing the Fannie Mae parties’ demurrer to the second amended complaint, that the Company’s claims all arose under
the deed of trust and section 2943 and that it had standing to assert those claims as owner of the property. 21 However, although a successor in title, the Company was not a party to, and had assumed no obligations under, the loan to Simmons or
the deed of trust that secured the loan. (The deed of trust required a lender

- approved, written assumption for Simmons’s successor in interest to obtain his rights and benefits under the deed of trust.) Accordingly, the Company had no rights or duties
under either instrument and, given the nature of the Company’s contentions and setting aside for the moment any standing arising from section 2943, lacked standing to seek a declaration of the outstanding balance due on that loan. 22 (See, e.g., Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556,
565

- 566 [lack of contractual privity between property owner and prior owner’s liability insurer defeated claim for declaratory relief regarding potential coverage under insurance policy of

21 The Company did not argue ( and the deed of trust did not indicate ) the Company was an in tended third party beneficiary and, as such, had standing

. Nor did the Company contend it had a defined i ntertwin ed business relationship with a contracting

p arty

.

22 “ Lack of standing may be raised at any time in the proceeding, including at trial or in an appeal. [Citations.] We may decide a standing issue even if the trial court did not rule on the issue. ” (

Blumhorst v. Jewish Family Services of Los Angeles (2005) 126 Cal.App.4th 993 , 1000.)37

contamination prob lems at property; “Code of Civil Procedure section 1060 has never been interpreted as no longer requiring appropriate standing to seek declaratory relief, or as allowing the issuance of any advisory orders about whether there should be potential insurance coverage for a policyholder’s potential tort liability”]; Shetty v. ARLP Securitization Trust Series 2014

- 2 (C.D.Cal., Oct. 28, 2016, No. CV 16

- 05467

- BRO) 2016 U.S.Dist.
Lexis 195822

, pp. * 15

- 18 [property owner lacked standing to pursue causes of action, i ncluding for declaratory judgment, “arising from the underlying mortgage” because “only a borrower (or his assignee) may bring a claim as to the underlying mortgage”]; see also Cornelison v. Kornbluth (1975) 15 Cal.3d 590, 596

- 597 [“Upon the transfer of re al property covered by a mortgage or deed of trust as security for an indebtedness, the property remains subject to the secured indebtedness but the grantee is not personally liable for the indebtedness or to perform any of the obligations of the mortgage or trust deed unless his agreement to pay the indebtedness, or some note or memorandum thereof, is in writing and subscribed by him or his agent or his assumption of the indebtedness is specifically provided for in the conveyance”]; Gantman v. United Pacif ic Ins. Co. (1991) 232 Cal.App.3d 1560, 1566 [“‘[s]omeone who is not a party to [a] contract has no standing to enforce the contract’”].) 23 To be sure, because the property it acquired was burdened
with the deed of trust, as a practical matter the Company, as the

23 As the Fannie Mae parties pointed out, the Company asserted the provisions of the deed of trust were contractual in nature. Indeed, it sought attorney fees under the provisions of the deed of trust and section 1717, which provides in part for fees in “any action on a contract.”38

successor in title, had an interest in an accurate determination of the amount due to redeem the property from the lien

— a topic it certainly could have pursued with the bankruptcy trustee. But for purposes of its action for declaratory relief agai nst the Fannie Mae parties , the Company’s indirect interest in the borrower’s obligations is insufficient to confer standing with regard to the underlying contractual dispute . Absent contractual privity

— that is, a right to enforce the terms of the note or the deed of trust

— the Company was not entitled to the declaratory relief it sought. (See D. C u mmins Corp. v. United States Fidelity & Guaranty Co. (2016) 246 Cal.App.4th 1484, 1491 [in absence of contractual privity, company’s “practical interest” in another’s legal rights under insurance policies, “no matter how enthusiastic it may be,” does not constitute “‘a legally cognizable theory of declaratory relief’”]; Graham v. Bank of Ame rica, N.A. (2014) 226 Cal.App.4th 594, 615

- 616 [secured borrower who was incidental beneficiary of consent judgment lacked standing to enforce judgment and therefore had no right to declaratory relief concerning judgment’s effect on his loan].) Although the Company might, in theory, have had standing to assert a declaratory relief cause of action to determine the parties’ rights and duties under section 2943, 24 including a determination of the amount necessary to pay off the loan, because the Company’s c laim for violation of section 2943 was preempted, the requirements of that statute could not form the

24 “ The prerequisites for standing to assert statutorily based causes of action are determined from the statutory language, as well as the underlying legislative intent and the purpose of the
statute. ” (

Boorstein v. CBS Interactive, Inc. (2013) 222 Cal.App.4th 456, 466.)39

basis for an actual controversy. (See Lee v. Silveira

, supra , 6 Cal.App.5th at p. 546; cf. Ball v. FleetBoston Financial Corp. (2008) 164 Cal.App.4th 794 , 800 [“Where a trial court has concluded the plaintiff did not state sufficient facts to support a statutory claim and therefore sustained a demurrer as to that claim, a demurrer is also properly sustained as to a claim for declaratory relief which is ‘wh olly derivative’ of the statutory claim”].) Accordingly, the declaratory judgment regarding the
amount due is reversed.

4

. T he Order Denying Attorney Fees Is Affirmed After the trial court entered its judgment finding the Company was the prevailing party entitled to costs of suit, including attorney fees if applicable, the Company moved for attorney fees on August 12, 2019, contending it had prevailed in an action based on a deed of trust containing an attorney fees clause and was entitled to attorney fe es under Civil Code
section 1717. 25 It also argued it was entitled to attorney fees
under Code of Civil Procedure section 2033.420 (section 2033.420) on the ground Fannie Mae inappropriately denied several requests for admission. The trial court denied t he motion.

25 Civil Code section 1717, subdivision (a), provides in part,

“ In any action on a contract, where the contract spec ifically provides that attorney’ s fees and costs, w hich are incurred to enforce that contract, shall be awarded either to one of the parties or to the 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 n ot, shall be entitled to reasonable attorney’ s fees in addition to other costs. ”40 a. D enial of attorney fees under Civil Code section 1717
Civil Code section 1717 provides for attorney fees to be awarded to the prevailing party under specified circumstances. In light of our reversal of the judgment in favor of the Company

, the Company was not entitled to fees under the deed of trust and Civil Code section 1717.

b. Attorney fees under Code of Civil Procedure section 2033.420
S ection 2033.420, subdivision (a), provides, “If a party fails
to admit th e genuineness of any document or the truth of any matter when requested to do so under this chapter, and if the party requesting that admission thereafter proves the genuineness of that document or the truth of that matter, the party requesting the admissi on may move the court for an order requiring the party to whom the request was directed to pay the reasonable expenses incurred in making that proof, including reasonable attorney’s fees.” 26 Subdivision (b) provides, “The court
shall make this order unles s it finds any of the following: [¶] (1 ) An objection to the request was sustained or a response to it
was waived under [Code of Civil Procedure] Section 2033.290. [¶] (2) The admission sought was of no substantial importance. [¶]

26 Recovery of attorney fees under section 2033.420 does not require the attorney fees claimant to be a prevailing party. (See Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500, 509, fn. 5 [“[b] ecause a nonprevailing party may also recover expenses pursuant to [the predecessor to section 2033.420], it is important to recognize that the fact in question need not have been one which would have altered deter mination o f the ultimate issues”]; see generally § 2033.420, subd. (a) [no mention of a prevailing party requirement].)41

(3) The party failing to make the admission had reasonable ground to believe that that party would prevail on the matter. [¶] (4) There was other good reason for the failure to admit.” 27 “‘The determination of whether “there were no good reasons for the denial,” whether the reques ted admission was “of substantial importance,” and the amount of expenses to be awarded, if any, are all within the sound discretion of the trial court.’” (

Bloxham v. Saldinger (2014) 228 Cal.App.4th 729 , 753;

see Brooks v. American Broadcasting Co. (1986 ) 179 Cal.App.3d 500, 508 [“[o]n appeal, the trial court’s decision [whether to award expenses for failure to admit requests for admission] will not be reversed unless the appellant demonstrates that the lower court abused its discretion”]

. )
In its motion for fees under s ection 2033.420 the Company argued Fannie Mae had inappropriately failed to adm it
nine req uests for admission that it proved at trial, entitling it to $231,950 in attorney fees, which it explained constituted

27 “‘An issue is of “substantial importance” if it has “at least some direct relationship to one of the central issues in the case, i.e., an issue which, if not proven, would have altered the results in the case.”’” (

Bloxham v. Saldinger (2014) 228 Cal.App.4th 729

, 752, fn. 20.) An award of expenses under the statute “is designed to reimburse reasonable expenses incurred by a party in proving the truth of a requested admission where the admission sought was ‘of substantial importance’ [citations] such that trial would have been expedited or shortened if the request had been admitted.” (

Brooks v. American Broadcasting Co.

, supra , 179 Cal.App.3d at p. 509; accord, City of Glendale v. Marcus Cable Associates, LLC (2015) 235 Cal.App.4th 344 , 353; see Grace v. Mansourian (2015) 240 Cal.App.4th 523, 530 [“[t]he purpose of request s for admissions is to expedite trial ” ]. )42

“essentially all the fee s incurred in the case.” 28 ( T he Company

now identifies only six requests for admission as a basis for
reversal .) The Fannie Mae parties opposed the C ompany’s
motion for fees under s ection 2033.420

, arguing the Company had

not esta blished the truth or the substantial importance of the

matter s denied ; Fannie Mae had a reasonable basis to deny the request s ; and the Company’s motio n was defective for failing to
break down the specific amount s incurred in proving the truth of
the matter s denied ( Garcia v. Hyster Co. (1994) 28 Cal.App.4th 724, 736

- 737 [“the statute authorizes only those expenses ‘incurred in making that proof,’ i.e., proving the matters denied by the opposing party”]) . The Fann ie Mae parties also contended the requested amount of fees was unreasonable

, including
because the Company improperly sought fees incurred prior to
the August 9, 2016 date of Fannie Mae’s responses and fees unrelated to proving the truth of the matters sou ght to be
admitted

. At the October 7, 2019 hearing on the Company’s motion

, the court re quested supplemental briefing, explaining it required greater specificity as to how the Company proved the truth of the
matters claimed to have been unreasonably denied

, and
continued the hearing to December 2, 2019. After t he pa rties

28 In its motion the Company did not differentiate the attorney fees incurred in the case and those incurred in proving the truth of the matters Fannie Mae had denied. The Company did, however, explain it was seeking an additional $5,025.42 in costs under section 2033.420 to which the Company would not otherwise be entitled under other statutory provisions as a prevailing party, for a total award under section 2033.420 of $236,975.42.43

filed supplemental briefs 29 and the continued hearing, the court denied the motion. 30 T he minute order with the court’s ruling does not explain the denial of attorney f ees under Code of Civil
Procedure section 2033.420 despite explaining the denial of Civil
Code section 1717 fees

. Contending the trial court failed to rule on this aspect of its fees motion, the Company argues the court abused its discretion
in failing to grant the fees requested and urges us to remand the
matter with directions to award reasonable fees and costs

. The court unquestionably decided the Company’s motion for fees under section 2033.420

— the request was denied

— even though it did not articulate in a written ruling its reasons for the
denial . It was not required to do so. (S ee, e.g., Maria P

. v. Riles (1987) 43 Cal.3d 1281, 1294 [“[c]ases decided under [Code of Civil Procedure] section 632 generally have held that a statement of
decis ion is not required upon decision of a motion”]; In re Marriage of Falcone & Fyke (2012) 203 Cal.App.4th 964, 981 [“[a] trial court is not required to issue a statement of decision for an attorney fee award ”].) And that ruling was well within the court’s discretion. 31

29 In its supplemental brief in the trial court the Company stated it was reducing the am ou nt of fees sought under section 2033.420 to $215,542.11 because it no longer sought fees incurred prior to Fannie Mae’s denials. The Company, however, otherwise continued to argue it was entitled to all fees incurred since the time of Fannie Mae’s Augus t 9, 2016 denials.

30 The record contains no reporter’s transcript of the December 2, 2019 proceedings or an agreed or settled statement.

31 Because the record, including the December 2, 2019 minute order, is silent as to the reason(s) fo r the court’s d enial of section 2033.420 fees, we infer all findings necessary to support44 For Request for Admission ( RFA ) No. 3 (“[t]here is a dispute between Plaintiff and Fannie Mae regarding the amount required to satisfy the lien”): Fannie Mae had reasonable ground to deny the request

. As the Fannie Mae parties explained in the trial court, Fannie Mae believed the Company’s allegations were insufficient to create an “actual controversy” for purposes of the declaratory relief cause of action, which sought the amount
needed to release the lien

. 32 That belief was not only reasonable

, but also, as we hold, correct as a matter of law

. 33

the court’s order. (See, e.g., Denham v. Superior Court (1970) 2 Cal.3d 557, 564 [“‘A judgment or order of the lower court is presumed correct . All intendments and presumptions ar e indulged to support it on matters as to which the record is silent, and error must be affirmatively shown’”]; Ritter & Ritter, Inc. Pension & Profit Plan v. The Churchill Condominium Assn. (2008) 166 Cal.App.4th 103, 128.)

32 To the extent the Company, by “dispute,” was not referring to an “actual controversy,” the Company failed to establ ish the substantial importance of the admission, only arguing on appeal in a conclusory fashion with respect to all six RFAs that admission s would have obviated the ne ed for a trial. As the Fannie Mae parties argued in the trial court, the parties would have still needed to proceed with trial to determine the amount owed on the loan even if Fannie Mae had admitted the amount was in dispute.

33 Moreover, Fannie Mae’s d enial was reasonable given its response preceded the filing of the Company’s first amended complaint: Fannie Mae’s response explained the Company’s “operative complaint does not state what amount [the Company] believes is required to satisfy the lien.” ( The allegation in the first and second amended complaints that the Company did not agree it owed the amount s stated in the Fannie Mae parties’ March 30, 2016 demand was not included in the original45 For RFA No. 9 (“[o]f the $24,693.90 total interest and principal due on or before February 5, 2016, $20,878.77 was interest and the balance of $3,815.13 was principal” ) ; RFA No. 11 (“Fannie Mae did not make any of the ‘tax and insurance payments’ identified in Exhibit 2, i.e., any of those charges that total $7,449.39”); RFA No. 12 (“[t]he ‘tax and insurance payments’ identified in Exhibit 2 are impounds, not payment[s] made by or on behalf of Fannie Mae to third parties”; and RFA No. 18 (“Fannie Mae did not incur the PSLGLPOSTINGCOST of $411 that is sh own on Exhibit 2”): Fannie Mae was justified in deny ing these requests

. As discussed, t he Fannie Mae parties
moved for summary adjudication on the issue whether the undisputed facts show ed they accurately accounted for all charges, fees and payments . The sole basis for the court’s denial
of the motion was a material factual dispute as to the requirement to pay for property insurance

— an issue not covered by these requ ests for admission . Thus, there was reasonable ground for Fannie Mae to believe it would prevail on these issues. For RFA No. 24 (“[a] s of May 9, 2016, Fannie Mae refused to accept any payments by Plaintiff on the grounds that Plaintiff is allegedly ‘a t hird party with no interest in the property’”):
Fannie Mae also had reasonable ground to believe it would prevail on this matter . Regardless of the parties’ dispute over the Fannie Mae parties’ ability to reject partial payments from the Company, t he Com pany’s own evidence showed Fannie Mae had

,

complaint.) In support of the fees motion the Company did not identify any request that Fannie Mae update its response. (See Burch v. Gombos (2000) 82 Cal.App.4th 352, 359 [“[n]othing in the text of the statute creates any ongoing duty to update responses”].)46

sometime on or before May 9, 2016

, been willing to accept payment for the payoff amount in the March 30, 2016 demand

statement

. In sum, the trial court did not abuse its discretion in denying the Company’s motion for fees under s ection 2033.420.

DISPOSITION

The judgment is reversed. The trial court’s postjudgment order denying the Company’s motion for attorney fees is affirmed.
The Fannie Mae parties are to recover their costs on appeal.

PERLUSS, P. J.

We concur:

SEGAL , J.

WISE, J. *

* Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.