Filed 2/8/21 Gonzalez v. Quality Loan Service Corp. CA5

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

GUSTAVO G. GONZALEZ, JR., 

Plaintiff and Appellant,

v.

QUALITY LOAN SERVICE CORPORATION,

Defendant and Respondent.

F080526

(Super. Ct. No. VCU278481)

OPINION

THE COURT*

APPEAL from a judgment of the Superior Court of Tulare County. Bret D. 

Hillman, Judge.

Gustavo G. Gonzalez, Jr., in pro. per., for Plaintiff and Appellant.

McCarthy & Holthus and Melissa Robbins Coutts for Defendant and Respondent.

-ooOooAppellant, a borrower and former homeowner, sued the corporation that acted as 

trustee under the deed of trust on his residence and conducted a nonjudicial foreclosure 

sale. Appellant attempted to state causes of action for wrongful foreclosure, slander of 

title, and recording false documents. The corporation filed a demurrer, contending 

appellant failed to allege facts sufficient to show the foreclosure was wrongful or he 

* Before Smith, Acting P.J., Meehan, J. and Snauffer, J.
2.

continued to own any interest in the residence after the nonjudicial foreclosure sale. The 

trial court sustained the demurrer and entered a judgment of dismissal. 

On appeal, appellant contends a mortgage statement shows his account was settled 

and the balance paid in full and a recorded full reconveyance shows ownership of the 

residence was returned to him. Our independent examination of the appellate record, 

which includes the documents attached to appellant’s complaint, shows a notice of 

default was recorded in September 2015; a notice of trustee’s sale was recorded in 

December 2015; the trustee’s sale was conducted on January 21, 2016; the husband and 

wife who purchased the property at the trustee’s sale paid $158,500; the sale proceeds 

were applied by the trustee to satisfy the debt secured by the deed of trust, and the full 

reconveyance (which was executed and recorded after the trustee’s sale) transferred 

nothing to appellant. On the last point, the wording of the full reconveyance stated the 

transfer was being made “to the person or persons legally entitled thereto.” As explained 

below, appellant’s successors in interest, the husband and wife who purchased the 

property at the foreclosure sale, are the persons “legally entitled” to the rights and 

interests (if any) transferred by the full reconveyance. (See Civ. Code, § 2941.) 

The mortgage statement sent by the lender to appellant after the trustee’s sale to 

notify appellant that the balance on his loan was zero does not support his claim that he 

still owns the residence. All his ownership interests were extinguished by the nonjudicial 

foreclosure sale. Also, appellant’s theory that the trustee was not authorized to conduct 

the trustee’s sale because the loan was paid off is contradicted by the exhibits to his 

complaint. Those documents show the loan was in default at the time of the foreclosure 

sale and the debt owed was satisfied with the proceeds from the foreclosure sale. 

Furthermore, we have identified no missteps in the foreclosure process or anything else 

that might have violated appellant’s statutory or contractual rights. Therefore, we 

conclude appellant has failed to allege, or demonstrate he could allege if given leave to 

amend, facts constituting a cause of action for wrongful foreclosure or slander of title. 
3.

We therefore affirm the judgment of dismissal. 

FACTS

In 2011, plaintiff Gustavo G. Gonzalez, Jr. (appellant) and Hortencia Mendez 

Molina purchased a residence located on Asa Gray Way in Dinuba (Property). A grant 

deed showing their ownership of the Property was recorded in the official records of 

Tulare County on June 30, 2011. To purchase the Property, appellant and Molina 

obtained a loan in the amount of $152,215 from First Mortgage Corporation, a California 

corporation. The loan was secured by a deed of trust dated June 23, 2011, and recorded 

on June 30, 2011 (Deed of Trust). The Deed of Trust named appellant and Molina as 

borrowers; First Mortgage Corporation as lender; Hacienda Service Corporation, a 

California corporation, as trustee; and Mortgage Electronic Registration Systems, Inc. 

(MERS), a Delaware corporation, as the beneficiary. The Deed of Trust also stated that 

“MERS is a separate corporation that is acting solely as nominee for Lender and Lenders’ 

successors and assigns.” The Deed of Trust irrevocably granted and conveyed the 

Property to the trustee, in trust, with the power of sale. Paragraphs 19 and 20 of the Deed 

of Trust stated: 

“19. Reconveyance. Upon payment of all sums secured by this Security 

Instrument, Lender shall request Trustee to reconvey the Property and shall 

surrender this Security Instrument and all notes evidencing debt secured by 

this Security Instrument to Trustee. Trustee shall reconvey the Property 

without warranty, to the person or persons legally entitled to it. Lender 

may charge such person or persons a reasonable fee for reconveying the 

Property, but only if the fee is paid to a third party (such as the Trustee) for 

services rendered and the charging of the fee is permitted under applicable 

law. If the fee charged does not exceed the fee set by applicable law, the 

fee is conclusively [p]resumed to be reasonable. 

“20. Substitute Trustee. Lender, at its option, may from time to time 

appoint a successor trustee to any Trustee appointed hereunder by an 

instrument executed and acknowledged by Lender and recorded in the 

office of the Recorder of the county in which the Property is located. The 

instrument shall contain the name of the original Lender, Trustee and 

Borrower, the book and page where this Security Instrument is recorded 
4.

and the name and address of the successor trustee. Without conveyance of 

the Property, the successor trustee shall succeed to all the title, powers and 

duties conferred upon the Trustee herein and by applicable law. This 

procedure for substitution of trustee shall govern to the exclusion of all 

other provisions for substitution.” (Italics added.) 

In April 2014, Molina signed a gift grant deed conveying her interest in the 

Property to appellant. In May 2014, the gift grant deed was recorded in the official 

records of Tulare County. 

On August 25, 2015, Monika Searcy, as Vice President of MERS, signed a 

substitution of trustee stating MERS substituted defendant Quality Loan Service 

Corporation as trustee under the Deed of Trust. On August 28, 2015, Monika Searcy, as 

Director of Operations of First Mortgage Corporation, executed an assignment of deed of 

trust stating that, for value received, MERS “hereby grants, assigns, and transfers to [¶] 

First Mortgage Corporation [¶] All beneficial interest under that certain Deed of Trust.” 

As a result, First Mortgage Corporation, the lender under the Deed of Trust, also became 

the beneficiary under the Deed of Trust. The assignment of deed of trust was recorded in 

the official records of Tulare County on August 31, 2015. The substitution of trustee was 

recorded on September 3, 2015. 

On September 15, 2015, Silver De Vera, Assistant Secretary of Quality Loan 

Service Corporation, signed a notice of default and election to sell under deed of trust. 

The notice stated (1) the Property was in foreclosure because appellant was behind in his 

payments, (2) the Property could be sold without any court action, (3) no sale date could 

be set until 90 days from the date the notice of default was recorded, (4) the loan could be 

brought into good standing by the payment of $8,465.24. The notice of default was 

recorded on September 17, 2015. 

In October 2015, First Mortgage Corporation, the lender and beneficiary, executed 

an assignment of deed of trust that transferred the Deed of Trust to Freedom Mortgage 

Corporation. The assignment was recorded on November 5, 2015. 
5.

On December 22, 2015, Quality Loan Service Corporation, in its capacity as 

trustee, recorded a notice of trustee’s sale stating the Property would be sold at a public 

sale conducted on January 21, 2016, at 2:00 p.m. on the steps of the City Hall in Tulare. 

The trustee’s sale was held as scheduled. The Property was sold to the highest bidder, a 

husband and wife who paid $158,500. The trustee’s deed upon sale stated the amount of 

the unpaid debt together with costs was $157,940.91. The trustee’s deed upon sale was 

executed by Quality Loan Service Corporation on January 28, 2016; was recorded on 

February 2, 2016; and stated Quality Loan Service Corporation, as trustee, granted and 

conveyed to the purchasers “all right, title and interest conveyed to and now held by it as 

Trustee under the Deed of Trust in and to the [P]roperty.” 

On February 17, 2016, almost four weeks after the trustee’s sale, a substitution of 

trustee was recorded in the official records of Tulare County as document number 2016-

0008559. It stated “the undersigned desires to substitute a different Trustee for the 

purpose of reconveying said Deed of Trust” and “the undersigned hereby substitutes 

Freedom Mortgage Corporation as Trustee under said Deed of Trust.” The undersigned 

was identified as MERS, “as Nominee for Freedom Mortgage Corporation, its Successors 

and Assigns.” The person signing on behalf of MERS was “Danielle Breining, Assistant 

Vice President.” 

Also on February 17, 2016, a “FULL RECONVEYANCE” was recorded in the 

official records of Tulare County as document number 2016-0008560. “Danielle 

Breining, Assistant Vice President” signed the full reconveyance on behalf of Freedom 

Mortgage Corporation. The full reconveyance stated “Freedom Mortgage Corporation as 

present Trustee for the Deed of Trust ... having been requested in writing, by the holder 

of the obligations secured by said Deed of Trust, to reconvey the estate granted to trustee 

under said Deed of Trust, does hereby reconvey to the person or persons legally entitled 

thereto, without warranty, all the estate, title and interest acquired by Trustee under said 
6.

Deed of Trust.” (Italics added.) It also referred to “Freedom Mortgage Corporation# 

0053089926,” which is the number assigned to appellant’s loan. 

Freedom Mortgage Corporation sent appellant a mortgage statement dated 

February 18, 2016, that listed the total amount due on his loan as $.00. The statement’s 

section listing transaction activity stated the payoff date was January 25, 2016. The 

statement’s “Past Payment Breakdown” section listed the total paid as $157,446.45, of 

which $143,536.39 was allocated to principal, $7,176.84 was allocated to interest, 

$5,550.90 was allocated to escrow (taxes and insurance), $672.90 was allocated to fees, 

and $509.52 was allocated to late charges.

PROCEEDINGS

In May 2019, appellant filed a complaint against Quality Loan Service 

Corporation for slander of title, deprivation of property without due process in violation 

of the Fourteenth Amendment, and submitting a false document for recording in a public 

office in violation of Penal Code section 115. In August 2019, appellant filed a first 

amended complaint, which is the operative pleading in this appeal. 

The first amended complaint listed the causes of action against Quality Loan 

Service Corporation as wrongful foreclosure, submitting a false document to be recorded 

in violation of Penal Code section 115, and slander of title. Appellant alleged “he is a 

victim of Wrongful Foreclosure ... because the home was sold for $158,500 [and he] 

never received any money.” He also alleged he possessed a full reconveyance from 

Freedom Mortgage Corporation and “[t]hat document alone shows by fact [he] did not 

default on his purchase of a home and the crimes that involve wrongful foreclosure were 

committed against [him] and his children.” Appellant alleged Quality Loan Service 

Corporation submitted false deeds to the County Recorder’s Office and “his full 

reconveyance shows his mortgage loan account was paid in full, making every document 

in favor of the defendant false.” Appellant supported his allegations in his first amended 
7.

complaint by attaching the 11 recorded documents described earlier in this opinion and 

the mortgage statement dated February 18, 2016.

Quality Loan Service Corporation filed a demurrer to the first amended complaint, 

contending appellant had failed to state facts sufficient to constitute a cause of action 

against it and appellant’s entire pleading was uncertain for purposes of Code of Civil 

Procedure section 430.10, subdivision (f). Quality Loan Service Corporation argued the 

documents submitted by appellant demonstrated (1) the public auction of the Property 

occurred on January 21, 2016, (2) the sale proceeds were used to pay the loan secured by 

the Deed of Trust, and (3) appellant no longer held any interest in the Property by the 

time the full reconveyance was recorded. Quality Loan Service Corporation argued all of 

appellant’s causes of action were based on the erroneous view that the 2016 

reconveyance proved he satisfied his loan obligations. Quality Loan Service Corporation 

supported its demurrer with a request for judicial notice of most of the recorded 

documents attached to the first amended complaint.

Appellant filed an opposition to the demurrer. Appellant referred to paragraphs 19 

and 20 of the Deed of Trust and stated he sought “the protection of The Security 

Agreement by clause completion wording and contractual deed definition.” 

At a hearing on October 22, 2019, the trial court adopted its tentative ruling to 

sustain the demurrer. The court’s minute order (1) noted appellant’s argument that the 

full reconveyance meant he no longer owed anything to the lender and the foreclosure 

was wrongful and (2) stated the reconveyance was recorded only after the nonjudicial 

foreclosure sale was completed. 

In November 2019, appellant filed a motion to vacate the order sustaining the 

demurrer. Quality Loan Service Corporation opposed the motion. At a hearing on 

December 3, 2019, the court adopted its tentative ruling to deny the motion. 
8.

On December 20, 2019, the trial court signed and filed a judgment of dismissal 

stating the entire case against Quality Loan Service Corporation was dismissed with 

prejudice. That same day, appellant filed a notice of appeal. 

DISCUSSION

I. DEMURRERS 

A. Pleading a Cause of Action

Under California law, a complaint must contain “[a] statement of the facts 

constituting the cause of action, in ordinary and concise language.” (Code Civ. Proc., 

§ 425.10.) For purposes of making the required statement of facts, the term “cause of 

action” refers to the “ ‘right to obtain redress for a harm suffered.’ ” (Hayes v. County of 

San Diego (2013) 57 Cal.4th 622, 631.) The facts that must be written down in a 

complaint to properly allege a cause of action are referred to as the essential elements of 

the cause of action. The essential elements are determined by the substantive law that 

defines the cause of action—that is, defines the circumstance in which a plaintiff has a 

right to relief from a harm suffered. (Weil & Brown, Cal. Practice Guide: Civil 

Procedure Before Trial (The Rutter Group 2020) ¶ 6:121, p. 6-36.) 

B. Elements of Wrongful Foreclosure Cause of Action

Appellant’s opening brief states he is challenging a wrongful foreclosure sale of 

his home and is seeking compensation for that wrongful sale in the amount of $158,500 

plus damages. Our Supreme Court has recognized that “[a] beneficiary or trustee under a 

deed of trust who conducts an illegal, fraudulent or willfully oppressive sale of property 

may be liable to the borrower for wrongful foreclosure.” (Yvanova v. New Century 

Mortgage Corp. (2016) 62 Cal.4th 919, 929 (Yvanova).) Therefore, California law 

recognizes a cause or causes of action for wrongful foreclosure. 

Here, we consider whether appellant has stated facts constituting a cause of action 

for wrongful foreclosure. Initially, we note the term “wrongful foreclosure” covers a 
9.

wide range of wrongs because there are many ways in which acts done in connection 

with the foreclosure process might violate rights created by statute, the common law, or 

the loan documents. (See Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1100, 

fn. 17 (Glaski) [claims a foreclosure is “wrongful” can be tort-based, statute-based and 

contract-based].) For instance, nonjudicial foreclosure “initiated by one with no authority 

to do so is wrongful for purposes of such an action.” (Yvanova, supra, 62 Cal.4th at 

p. 929.) Another category of wrongful foreclosures involves procedural irregularities in 

a foreclosure sale conducted by the rightful trustee at the direction of the rightful 

beneficiary. Foreclosures in this category are wrongful because the manner in which the 

foreclosure process was conducted did not comply with the process established by 

California’s statutory scheme or the agreement of the parties. (E.g., Knapp v. Doherty

(2004) 123 Cal.App.4th 76, 81, 92–94 [procedural irregularity alleged was the premature 

service of the notice of trustee’s sale] (Knapp).) We distinguish between these two 

categories of wrongful foreclosure because the essential elements of a cause of action 

alleging the foreclosure was conducted or initiated by an unauthorized person are 

different from the essential elements of a cause of action alleging procedural irregularities 

in the way the foreclosure was conducted.1

Here, appellant does not contend the foreclosing trustee failed to follow the 

nonjudicial foreclosure procedures specified in the contract (i.e., the loan documents, 

which include the Deed of Trust) or statute. Instead, he alleged a substantive wrong—

specifically, a foreclosure on the Property despite the fact that the full reconveyance and 

1 The essential elements of a cause of action for a wrongful nonjudicial 

foreclosure based on procedural irregularities are (1) procedural irregularities in the 

foreclosure process that caused the sale of real property pursuant to the power of sale in 

the deed of trust to be illegal, fraudulent or willfully oppressive; (2) prejudice or harm to 

the party attacking the foreclosure sale; and (3) in cases where the borrower challenges 

the sale, the borrower tendered the amount of the secured indebtedness or was excused 

from tendering. (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 

561-562 (Sciarratta); see Knapp, supra, 123 Cal.App.4th at p. 86, fn. 4.) 
10.

mortgage statement showed his loan account was paid in full. Appellant’s claim that the 

foreclosure was not authorized is the equivalent of a claim that Quality Loan Service 

Corporation failed to follow the terms of the Deed of Trust that defined the circumstances 

in which a foreclosure could be held by conducting a foreclosure sale even though his 

loan had been paid in full. Thus, appellant’s claim of lack of authority is based on a 

failure to follow the terms of contract—that is, breached the contract.

A plaintiff must plead the following elements to state a cause of action for breach 

of contract: (1) the existence of the contract, (2) the plaintiff’s performance or excuse for 

nonperformance, (3) the defendant’s breach of a contract term, and (4) resulting damages 

to the plaintiff. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821; see 

CACI No. 303 [breach of contract—essential elements].) The first element—the 

existence of a contract—requires: “1. Parties capable of contracting; [¶] 2. Their consent; 

[¶] 3. A lawful object; and, [¶] 4. A sufficient cause or consideration.” (Civ. Code, 

§ 1550; see CACI No. 302 [contract formation].) “The consent of the parties to a 

contract must be: [¶] 1. Free; [¶] 2. Mutual; and, [¶] 3. Communicated by each to the 

other.” (Civ. Code, § 1565.)

Here, plaintiff has properly alleged the existence of a contract—specifically, the 

Deed of Trust—and included a copy of that contract as an exhibit to his pleading. He 

also has alleged he was damaged by the loss of the Property. Consequently, we consider 

whether appellant has properly pleaded the other two elements—namely, that (1) he 

performed his obligations under the contract, or is excused from performing them, and 

(2) Quality Loan Service Corporation breached a term of the contract. Prior to discussing 

those two elements, we set forth the legal standards that govern general demurrers and 

the appellate review of an order sustaining a demurrer. 
11.

C. General Demurrers

1. Stating a Cause of Action under Any Legal Theory

When a complaint “does not state facts sufficient to constitute a cause of action,” a 

defendant may raise that objection by filing a demurrer. (Code Civ. Proc., § 430.10, 

subd. (e).) A court considering a demurrer ordinarily gives the complaint a reasonable 

interpretation, reading it as a whole and its parts in their context. (City of Dinuba v. 

County of Tulare (2007) 41 Cal.4th 859, 865 (Dinuba).) Determining whether a pleading 

alleges facts sufficient to constitute a cause of action is a question of law. (Neilson v. 

City of California City (2005) 133 Cal.App.4th 1296, 1305 (Neilson).) 

2. Standard of Appellate Review

Appellate courts independently review an order sustaining a general demurrer and 

make an independent determination of whether the pleading alleges facts sufficient to 

state a cause of action under any legal theory. (McCall v. PacifiCare of Cal., Inc. (2001) 

25 Cal.4th 412, 415.) The “appellate court assumes the truth of (1) all facts properly 

pleaded by the plaintiff, (2) all facts contained in exhibits to the complaint, (3) all facts 

that are properly the subject of judicial notice, and (4) all facts that reasonably may be 

inferred from the foregoing facts.” (Neilson, supra, 133 Cal.App.4th at p. 1305.) “The 

reviewing court does not assume the truth of contentions, deductions or conclusions of 

law.” (Ibid.)

Appellant has the burden of demonstrating the trial court committed error in 

sustaining the demurrer. (Smith v. County of Kern (1993) 20 Cal.App.4th 1826, 1829–

1830.) Appellate courts affirm a judgment of dismissal if it is correct on any ground 

stated in the demurrer, independent of the trial court’s stated reasons. (Aubry v. Tri-City 

Hospital Dist. (1992) 2 Cal.4th 962, 967.)

Besides addressing the sufficiency of the allegations stated in the complaint, an 

appellate court also considers whether the plaintiff has shown there is a reasonable 

possibility any defect identified by the defendant can be cured by amendment. (Blank v. 
12.

Kirwan (1985) 39 Cal.3d 311, 318.) The burden of demonstrating a reasonable 

possibility of cure is squarely on the plaintiff. (Ibid.) 

II. ALLEGATIONS DO NOT SHOW A WRONG WAS COMMITTED

A. Appellant’s Performance of His Contractual Obligations

Appellant signed the Deed of Trust to secure a loan obtained from First Mortgage 

Corporation. The Deed of Trust states it secures to the lender the repayment of the debt 

and the performance of the borrowers’ covenants and agreements under the Deed of Trust 

and the note. Appellant’s first amended complaint does not allege that (1) he performed 

his obligation to make the monthly payments due under the note, (2) the notice of default 

was inaccurate because his payments were up-to-date when the notice of default was 

recorded, or (3) he had cured the default under the note before the nonjudicial foreclosure 

sale was conducted. Furthermore, appellant has not demonstrated on appeal that he could 

amend his pleading to allege he performed his contractual obligations or was excused 

from performing them. 

Appellant’s claim that the loan was paid off is based on the allegations that (1) he 

obtained a full reconveyance and (2) the mortgage statement dated February 18, 2016, 

shows that his loan was paid off in the prior month and, as a result, he owes nothing 

under his loan. However, the deed upon trustee’s sale states $157,940.91 was the amount 

of the unpaid debt together with costs at the time of the nonjudicial foreclosure sale 

conducted on January 21, 2016. It also identifies the amount paid by the purchasers at 

the trustee’s sale as $158,500. The mortgage statement lists the loan’s payoff date as 

January 25, 2016. When the trustee’s deed upon sale and the mortgage statement are 

read together, the only reasonable interpretation is that the proceeds from the foreclosure 

sale were used to pay the debt secured by the Deed of Trust. 

Consequently, appellant has not shown he alleged (or could allege if granted 

leave) that he performed his obligations under the note and Deed of Trust. Thus, he has 
13.

not demonstrated he could allege an essential element of a wrongful foreclosure claim 

based on a breach of his contract with the lender and trustee. 

B. Defendant’s Breach of a Contractual or Statutory Obligation

The Deed of Trust gave the trustee (which includes Quality Loan Service 

Corporation as a substituted trustee) the power to sell the Property in a nonjudicial 

foreclosure sale if the loan was not repaid. The notice of default, the notice of trustee’s 

sale, and the deed upon trustee’s sale all show that the debt secured by the Deed of Trust 

had not been paid. Because the debt remained in default, Quality Loan Service 

Corporation had the right to conduct a nonjudicial foreclosure sale under the terms of the 

Deed of Trust and applicable California statute. 

The allegations made by appellant do not show how Quality Loan Service 

Corporation breached a contractual obligation or statutory requirement when it conducted 

the foreclosure sale on January 21, 2016. Therefore, appellant has not demonstrated he 

could allege an essential element of a wrongful foreclosure claim based on either a breach 

of his contract with the lender and trustee or a violation of statute.

C. Legal Effect of the Full Reconveyance

Many of appellant’s arguments refer to the full reconveyance recorded in the 

official records of Tulare County on February 17, 2016, as document number 2016-

0008560. Accordingly, we provide a brief overview of the law governing reconveyances.

1. Basic Legal Principles

Civil Code section 2941 establishes deadlines and procedures for the 

reconveyance of a lien after a mortgage has been “satisfied.” (Bank of New York 

Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 945.) It also provides for damages 

and a penalty when the statutory requirements are not met. (Ibid.) 

“Reconveyance defined. A reconveyance is a deed by the trustee of a deed 

of trust that reconveys the trustee’s title to the trustor or to another person 

legally entitled to it. [(Civ. Code, § 2941, subd. (b).)] Reconveyance is 
14.

accomplished by the beneficiary executing a request for reconveyance. 

When the trustee receives the request, the trustee executes and records a 

deed of reconveyance transferring the security interest to the current owner 

of the property. [(Civ. Code, § 2941.)] On recordation, the lien is 

extinguished. However, between the parties, and as to all subsequent 

purchasers or encumbrancers with notice, a reconveyance is only prima 

facie evidence that the lien has been discharged. Conversely, when the 

obligation secured by the deed of trust is satisfied, but it has not been 

reconveyed, the lien is extinguished as between the parties [(Civ. Code, 

§ 2941)], but the beneficiary has the legal obligation to reconvey in order to 

remove the cloud on title.

“[¶] ... [¶]

“Trustor’s right to receive reconveyance on payment of the debt. When 

a secured obligation has been paid and satisfied, the lien is discharged and 

the trustor or mortgagor has the right, on demand, to receive a 

reconveyance of the trust deed or a certificate of discharge of the mortgage 

and a return of the promissory note marked ‘paid.’

“[¶]

“Trustee’s duty to reconvey. On receipt of a request for reconveyance 

from the beneficiary, the trustee of the deed of trust has a duty to reconvey 

the lien of the deed of trust and has no duty to investigate the status of the 

secured debts or verify that they have been paid before reconveying the 

lien. The trustee must reconvey the lien of the deed of trust, and is not 

obligated (or permitted) to verify that the debt has in fact been paid.

“No duty to reconvey if the obligations are not fully satisfied. The

beneficiary only has a duty to deliver a request for reconveyance to the 

trustee when the secured obligation is fully satisfied. There is no duty to 

initiate procedures for reconveyance where the obligation secured by the 

deed of trust has only been partially satisfied.” (5 Miller & Starr, Cal. Real 

Estate (4th ed. 2019), Deeds of Trust and Mortgages, § 13:140, pp. 13-535 

to 13-537, footnotes omitted and italics added (Miller & Starr).) 

2. Interpreting the Full Reconveyance

The full reconveyance states that Freedom Mortgage Corporation, as the present 

trustee under the Deed of Trust, “does hereby reconvey to the person or persons legally 

entitled thereto, without warranty, all the estate, title and interest acquired by Trustee 

under said Deed of Trust.” This language presents two questions of interpretation. First, 
15.

who is the person “legally entitled” to reconveyance. Second, what “estate, title and 

interest [was] acquired by Trustee under said Deed of Trust” and, thus, was transferred by 

the full reconveyance. 

Appellant interprets the full reconveyance as transferring ownership interests in 

the Property to him, thus implying that he is the person “legally entitled” to the 

reconveyance. He supports his claim to the Property by referring to (1) the original grant 

deed that lists him as an owner, (2) the gift grant deed in which Molina transferred her 

interest in the Property to him, and (3) the mortgage statement from Freedom Mortgage 

Corporation indicating nothing is owed on his loan. 

The statute refers to the delivery of the reconveyance instrument to the “trustor or 

successor in interest” or “to the trustor or the successor in interest.” (Civ. Code, § 2941, 

subd. (b)(1)(B)(i), (ii).) The statute also identifies the persons authorized to request a 

reconveyance if the trustee fails to record one within 60 days of satisfaction of the 

obligation as the “trustor or trustor’s heirs, successor in interest, agent or assignee.” (Civ. 

Code, § 2941, subd. (b)(2).) These statutory references to the trustor or the successor in 

interest2 appear to have been interpreted in Miller & Starr’s description of the 

reconveyance as “transferring the security interest to the current owner of the property.” 

(Miller & Starr, supra, § 13:140, p. 13-535.) In other words, Miller & Starr have 

identified the trustor or the trustor’s successor in interest as the current owner of the 

property. Accordingly, we interpret the reconveyance’s reference to the person “legally 

entitled thereto” to mean the trustor’s successor in interest. If there is no successor in 

interest, then the trustor is the person legally entitled to the reconveyance. 

2 Black’s Law Dictionary (8th ed. 2004) contains the following definition of 

“successor in interest”: “One who follows another in ownership or control of property. 

A successor in interest retains the same rights as the original owner, with no change in 

substance.” (Id. at p. 1473.) 
16.

Our next step is to apply this interpretation to the facts of this case. That step 

requires a determination of whether the trustor (i.e., appellant) has a successor in interest. 

The answer to this question is straightforward because the documents recorded during the 

foreclosure process plainly show appellant had a successor in interest. In particular, the 

trustee’s deed upon sale shows the purchasers of the Property at the foreclosure sale were 

appellant’s successors in interest. Consequently, those purchasers or their successors in 

interest (not appellant) are the persons legally entitled to the reconveyance. 

The second question of interpretation is whether, assuming appellant was the 

person legally entitled to the reconveyance, that document transferred anything to him. 

Stated another way, what rights, title and interests in the Property were held by the trustee 

when it executed and recorded the full reconveyance? To answer this question, we refer 

to an opinion that describes the legal impact of a nonjudicial foreclosure sale and the 

transfer of rights put into effect by the trustee’s deed upon sale. 

“After a nonjudicial foreclosure sale, the foreclosing trustee issues a trustee’s deed 

upon sale. (See [Civ. Code,] §§ 2924g [conduct of sale], 2924 [finality of sale].) The 

trustee’s deed upon sale conveys to the purchaser the borrower-trustors’ interest as of the 

date the deed of trust granted by the borrower-trustor was recorded. [Citation.] Thus, the 

purchaser’s title is free and clear of all rights of the trustor or anyone claiming under or 

through the trustor ....” (Zieve, Brodnax & Steele, LLP v. Dhindsa (2020) 

49 Cal.App.5th 27, 36.) Thus, when a trustee under a deed of trust conducts a nonjudicial 

foreclosure, the foreclosure sale extinguishes all rights and interests to the real property 

of the borrower-trustors. (Ibid.) 

This conclusion is consistent with the wording of the trustee’s deed upon sale, 

which stated Quality Loan Service Corporation, as trustee, granted and conveyed to the 

purchasers “all right, title and interest conveyed to and now held by it as Trustee under 

the Deed of Trust in and to the [P]roperty.” This language unambiguously shows the 

trustee transferred every right or interest it held to the purchasers. 
17.

Consequently, when the full reconveyance was executed and recorded, the trustee 

no longer held any ownership interest in the Property to return to appellant. Instead, all 

the trustee’s rights to the Property had been transferred to the purchasers at the 

foreclosure sale. Thus, there was nothing left for appellant to receive under the full 

reconveyance. 

To summarize, we conclude (1) the full reconveyance does not establish appellant 

as the owner of any rights or interest in the Property and (2) the other documents in the 

record demonstrate the purchasers at the foreclosure sale own the Property. 

Accordingly, the full reconveyance does not support appellant’s arguments that 

the foreclosure was wrongful or unauthorized. Furthermore, it does not support his claim 

that he retains any title to the Property. Because appellant is not the owner, he may not 

maintain a cause of action against Quality Loan Service Corporation for slander of title. 

“The elements of a cause of action for slander of title are ‘(1) a publication, (2) which is 

without privilege or justification, (3) which is false, and (4) which causes direct and 

immediate pecuniary loss.’ ” (Alpha & Omega Development, LP v. Whillock 

Contracting, Inc. (2011) 200 Cal.App.4th 656, 664, italics omitted.) Here, appellant 

cannot allege Quality Loan Service Corporation published or recorded a document that 

was false or that he was damaged. 

Therefore, we conclude the trial court properly sustained the demurrer. 

Furthermore, it properly denied leave to amend because appellant has not demonstrated 

he could cure the defects in his allegations by amending. 

DISPOSITION

The judgment is affirmed. Respondent shall recover its costs on appeal.