Filed 6/9/14

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

SAEED KESHTGAR,

 Plaintiff and Appellant,

v.

U.S. BANK, N.A., as Trustee, etc.,

 Defendant and Respondent.

2d Civil No. B246193

(Super. Ct. No. CV120282A)

(San Luis Obispo County)

Plaintiff obtained a loan secured by a deed of trust on real property. The 

loan is in default. He brings this action against the bank, as trustee of a mortgage trust, to 

prevent the bank from initiating foreclosure proceedings.

An insuperable barrier stands in his way, California's nonjudicial 

foreclosure statutes. Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 

1149, explains why actions such as plaintiff's are subject to demurrer.

One would think, indeed hope, that Gomes would put an end to cases like 

the instant one. For some hopefuls, Glaski v. Bank of America, N.A. (2013) 218 

Cal.App.4th 1079, holds out the tantalizing prospect of a preemptive action to challenge a 

foreclosure. It does not. The yearning for a holding does not create one.

The trial court sustained the bank's demurrer to plaintiff's first amended 

complaint without leave to amend. We affirm the ensuing judgment.
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FACTS

In May 2005 plaintiff Keshtgar executed a note for $910,000 secured by a 

deed of trust on real property, recorded on June 10, 2005. The deed of trust named 

Resource Lenders, Inc., as the lender, Cuesta Title, as the trustee, and Mortgage 

Electronic Registration Systems, Inc. (MERS), as the beneficiary acting as nominee for 

the lender, its successors and assigns.

On October 19, 2011, the deed of trust was assigned to U.S. Bank National 

Association, as trustee for the certificate holders of Harborview Mortgage Loan Trust 

(U.S. Bank). The assignment was executed by Alice Rowe, a MERS assistant secretary, 

and recorded on November 4, 2011.

Keshtgar's first amended complaint alleges on information and belief that 

Rowe is not an assistant secretary, employee or agent of MERS; not an employee or 

agent of Resource Lenders; has no written authority to convey any real property that 

MERS or Resource Lenders may have; and neither the board of directors of MERS or 

Resource Lenders approved the conveyance.

The complaint also alleges U.S. Bank did not receive an assignment of the 

note, was never in possession of the note, never acquired the rights of nor is a successor 

to MERS or Resource Lenders.

The complaint further alleges on information and belief that the mortgage 

assets held in trust by U.S. Bank are governed by a pooling and service agreement (PSA); 

that the PSA requires the trust assets be treated as a Real Estate Investment Conduit 

(REMIC); that any mortgage transferred to a REMIC more than three months after its 

closing date would not be a qualified transaction, would be taxed at 100 percent and 

would violate the PSA; and that the note and deed of trust at issue here were transferred 

to the REMIC more than six years after its closing date.

The complaint requests that the assignment of the deed of trust be declared 

void ab initio and cancelled; that the trial court declare U.S. Bank may not exercise any 

rights under the deed of trust, including the power of sale; and the court quiet title in 

Keshtgar and declare U.S. Bank has no right, title or interest in the property.
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DISCUSSION

I.

The function of a demurrer is to test whether, as a matter of law, the facts 

alleged in the complaint state a cause of action under any legal theory. (Intengan v. BAC 

Home Loans Servicing, LP (2013) 214 Cal.App.4th 1047, 1052.) We assume the truth of 

all facts properly pleaded, as well as facts of which the trial court properly took judicial 

notice. (Ibid.) But we do not assume the truth of contentions, deductions or conclusions 

of law. (Ibid.) Our review of the court's decision is de novo. (Ibid.) Where there is no 

reasonable possibility that plaintiff can cure a defect in a complaint with an amendment, 

an order sustaining a demurrer without leave to amend is not an abuse of discretion. 

(Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 273, 274.)

II.

Stripped to its essence, Keshtgar's complaint alleges nothing more than the 

assignment between MERS and U.S. Bank did not occur or is void. The note1expressly 

allows the assignment. Significantly, neither MERS nor U.S. Bank, the parties to the 

assignment, are contesting its validity. Keshtgar admits in his opening brief that the loan 

has been "non-performing" since at least October 2011. Keshtgar fails to explain how he 

is aggrieved if U.S. Bank instead of MERS or the lender directs the trustee to foreclose.

In Gomes v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th 1149, 

borrower brought a preemptive action to forestall foreclosure. The borrower's complaint 

alleged that MERS had no authority to initiate foreclosure proceedings because the owner 

of the note did not authorize MERS to proceed. The loan servicer demurred to the 

complaint. The trial court sustained the demurrer without leave to amend and entered 

judgment for defendants.

The Court of Appeal affirmed. The court noted that California's nonjudicial 

foreclosure statutes (Civ. Code, §§ 2924-2924k) provide a comprehensive framework for 

the regulation of nonjudicial foreclosures. (Gomes v. Countrywide Home Loans, Inc., 

 

1 We grant U.S. Bank's request to take judicial notice of the note.
4

supra, 192 Cal.App.4th at p. 1154.) One purpose of this comprehensive scheme is to 

provide a beneficiary with a quick, inexpensive and efficient remedy against a defaulting 

borrower. (Ibid.) Nowhere does the scheme provide for a judicial action to determine

whether the person initiating the foreclosure process is authorized. (Id. at p. 1155.) 

There is no ground for implying such an action. (Ibid.) Recognition of such a right 

would "fundamentally undermine the nonjudicial nature of the process and introduce the 

possibility of lawsuits filed solely for the purpose of delaying valid foreclosures." (Ibid.)

Given that Keshtgar acknowledges he has been in default since 2011, there 

appears to be no other purpose to the instant action than to delay a valid foreclosure.

Keshtgar argues that in Gomes the plaintiff had no factual basis to allege

MERS lacked authority to initiate foreclosure. Keshtgar claims his complaint avoids this

defect by alleging "a factual basis" on information and belief. It is true that in 

distinguishing federal trial court cases Gomes states: "It is also significant that in each of

these cases, the plaintiff's complaint identified a specific factual basis for alleging that 

the foreclosure was not initiated by the correct party. Gomes has not asserted any factual 

basis to suspect that MERS lacks authority to proceed with the foreclosure." (Gomes v. 

Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p. 1156.) Gomes holds that 

the California statutory scheme allows no preemptive action to challenge the authority of 

the person initiating foreclosure. No allegation of fact, no matter how specific, is 

sufficient to overcome the absence of a cause of action.

The facts alleged in Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 

Cal.App.4th 497, are similar to those alleged here. Plaintiff alleged the trustee of a 

securitized investment trust had no authority to initiate foreclosure on a trust deed 

because "the promissory note was not transferred into the investment trust with a 

complete and unbroken chain of endorsements and transfers . . . ." (Id. at p. 510.) The 

trial court sustained the defendant's demurrer without leave to amend. The Court of 

Appeal affirmed, citing Gomes for the proposition that California's comprehensive 

nonjudicial foreclosure scheme does not provide for a preemptive action to challenge the 
5

authority of the party initiating foreclosure. (Id. at p. 513; see also Yvanova v. New 

Century Mortgage Corporation, 2014 WL 2149797(Cal.App. 2 Dist.).)

Keshtgar's reliance on Glaski is misplaced. There the complaint alleged a 

cause of action for damages for wrongful foreclosure. The theory of the complaint was 

that an attempted transfer of the loan into a securitized trust located in New York was 

void; thus, the foreclosing entity was not the true owner of the loan. The trial court 

sustained the trustee's demurrer without leave to amend. The Court of Appeal reversed.

In reversing, the Court of Appeal determined that a borrower has standing 

to attack a void assignment to which it is not a party. (Glaski v. Bank of America, N.A., 

supra, 218 Cal.App.4th at p. 1095.) Applying New York trust law, the court determined 

that Glaski alleged sufficient facts to support the conclusion that the attempted transfer 

into the trust was void. (Id. at p. 1097.) The court distinguished Gomes on the ground 

that there plaintiff was attacking the right of MERS to initiate foreclosure as the lender's 

nominee. (Id. at pp. 1098-1099.) Glaski stated that, unlike the plaintiff in Gomes, the 

plaintiff in Glaski is not seeking a determination of a nominee's right to initiate 

foreclosure; instead, he is claiming an attempted transfer to the party seeking foreclosure 

was void. (Ibid.)

Glaski can be distinguished from Gomes and the instant case in that it is a 

post-foreclosure action for damages, not an action to prevent foreclosure. In Gomes, as 

in the instant case, plaintiff sought to prevent or at least forestall foreclosure. Glaski does 

not implicate the statutory policy of providing a beneficiary with a quick, inexpensive 

and efficient method of foreclosure.

We believe Glaski reads Gomes too narrowly. Gomes holds that there is no 

judicial action to challenge the authority of the person initiating the foreclosure process. 

(Gomes v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p. 1155.) As 

Jenkins shows, that applies whether the challenge is to the lender's nominee, or as here, a 

transferee.

We also disagree with Glaski's determination that a borrower has standing 

to challenge an assignment. Glaski's reasoning relies on two federal Court of Appeals 
6

cases interpreting the law of other jurisdictions and an unpublished federal district court 

case. (Conlin v. Mortgage Electronic Registration Systems, Inc. (6th Cir. 2013) 714 F.3d 

355, 361; Culhane v. Aurora Loan Services of Nebraska (1st Cir. 2013) 708 F.3d 282, 

291; Gilbert v. Chase Home Finance, LLC (E.D. Cal. May 28, 2013, No. 1:13-CV-265 

AWI SKO [2013 WL 2318890].)

California cases hold, however, that even in post-foreclosure actions a 

borrower lacks standing to challenge an assignment absent a showing of prejudice. 

(Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 86; 

Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507;

Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th at p. 271.) Siliga states: 

"[T]he Siligas fail to allege any facts showing that they suffered prejudice as a result of 

any lack of authority of the parties participating in the foreclosure process. The Siligas 

do not dispute that they are in default under the note. The assignment of the deed of trust 

and the note did not change the Siligas' obligations under the note, and there is no reason 

to believe that Accredited as the original lender would have refrained from foreclose in 

these circumstances. Absent any prejudice, the Siligas have no standing to complain 

about any alleged lack of authority or defective assignment." (Siliga, supra, at p. 85.) 

The same can be said of Keshtgar's complaint. Even if there were a preforeclosure cause 

of action, Keshtgar would lack standing to challenge the assignment.

Keshtgar's reliance on Barroso v. Owen Loan Servicing, LLC (2012) 208 

Cal.App.4th 1001, 1016, is also misplaced. The complaint in Barroso was filed after 

foreclosure and did not challenge the authority of the loan servicer to initiate foreclosure 

proceedings. Moreover, it alleged full performance.

Keshtgar offers to amend his complaint to allege that noncompliance with 

the PSA is evidence that his loan was not transferred into the trust. That is a departure 

from his allegation that noncompliance with the PSA rendered the transfer void as a 

matter of law. Whether the transfer is alleged to be void or never made, there is no 

preforeclosure cause of action to challenge the authority of the person initiating 

foreclosure.
7

The judgment is affirmed. Costs are awarded to respondent.

CERTIFIED FOR PUBLICATION.

GILBERT, P. J.

We concur:

YEGAN, J.

PERREN, J.
Charles S. Crandall, Judge

Superior Court County of San Luis Obispo

______________________________

Dennis Howard Moore for Plaintiff and Appellant.

Reed Smith LLP, David S. Reidy, Matthew J. Brady for Defendant and 

Respondent.