Filed 10 / 1 / 20 Kamal v. Deutsche Bank National Trust Co. CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 SIX

MAJID KAMAL et al.,

Plaintiff s and Appellant s ,

v

. DEUTSCHE BAN K NATIONAL TRUST COMPANY etc. et al.

, Defendants and Responden ts
, 2d Civil No. B 301673 (Super. Ct. No. 56

- 201 9

- 00528212

- CU

- OR

- VTA ) (Ventura County)

Here, a verified complaint for wrongful foreclosure incorporates the deed of trust t hat authorize d the loan assignment and nonjudicial foreclosure that appellants complain
about. Majid Kamal and Sheri Kamal appeal from a dismissal
entered after the trial court sustained , without leave to amend, a
demurrer to their First Ame nded Comp l aint for wrongful
for ec losure and cancellation of instruments. Judgment was entered for defendants, Deutsche Bank National Trust Company as trustee for IndyMac INDX Mortgage Loan Trust 2006

- AR5, Mortgage Pass

- Through Certificates Series 2006

- AR5, and O cwen Lo an Service, LLC. (herein Deutsche Bank). We affirm.2 Facts and Procedural History Appellants filed this action on May 9, 2019 after their
home was sold at a nonjudicial foreclosure based on their $600,000+ default on an IndyMac Bank F.S.B. (IndyMac) loan secured by a deed of trust

. Appellants originally purchased the property in 2006 with a $520,000 IndyMac loan secured by a deed
of trust

. The deed of trust stated that Mortgage Electronic Regist r ation Syst e ms, Inc. (MERS) was the loan ben e ficia ry and

“ i s acting solely as a nominee for Lender and Lender’ s successors and assigns .” It provided that MERS c ould exercise any right belong ing to the original l ender (IndyMac) and its assigns and

succe s sors, and that MERS could sell the prom issory note or a parti al interest in the note without notice to appellan ts

.

I n 2009
, after IndyMac failed and was placed in a Federal Deposit I nsurance Corp oration (FDIC) receivership

, MERS assigned the Deed of Trust to OneWest Bank, FS B (OneWest). 1 O n June 25, 2012, OneW e s t assigned the deed of

1 A detailed description of the FDIC takeover of IndyMac and sale of its assets to OneWest Bank is described in Deutsche Bank Nat. Trust Co. v. F.D.I.C. (9th Cir. 2014) 744 F.3d 1124, 1127 : “ On July 11, 2008, th e Office of Thrift Supervision closed IndyMac, appointed the FDIC as receiver, created a new savings bank, IndyMac Federal, and appointed the FDIC as conservator (FDIC

– C) of IndyMac Federal. Another federal savings bank, OneWest Bank, was formed as a thri ft holding comp any to purchase IndyMac Federal’ s assets and liabilities. As receiver and conservator, the FDIC ‘ succeeded to all rights, titles, powers, and privileges of IndyMac Federal, including those arising under the Governing Agreements or otherwise related to the Trusts. ’ As IndyMac Federal’ s conservator, the FDIC administered the Trusts and serviced the mortgages based on servicing rights established by the Governing Agreements. In that capacity, the3

trust to D e utsche Bank. Ap pellants had already defaulted on the loan, and a notice of defaul t and n otice of t rustee ’ s s ale were recorded for $613,768 .89 due and owing on the loan. Appellants remained in possession until the nonj udicial foreclosure was conducted on A pril 23, 2019

. Deut s che Bank was the highest
bidder and t he Trustee’ s Deed Upon Sale was recorded April 30,
2019. The Complaint

Appellants filed a verified complaint for $2.5 million damages nine days later and att ached the deed of trust as an
exhibit to the complaint

. The complaint stated that the deed of trust named MERS “as the nominee for IndyMac a nd its successors and assignees. A true and correct copy of the [deed of trust] is attached as Exhibit 1 and is in corporated in fu ll herein by this reference.” 2

Thereafter, appellants filed a First Amend ed Complaint witho ut the deed of trust attached. It stated that IndyMac assigned the note and deed of trust to IndyMac, M.B.S. on March 30, 2006. Appellants clai med that IndyMac M.B.S. was

FDIC sold certain assets and rights of IndyMac Federal to OneWest for approximately $13.9 billion.”

2 If the complaint incorporates an instrument by reference, the latter documen t’ s contents prevail over any inconsistent allegations contained in the pleading. ( Dodd v. Citizens Bank of Costa Mesa (19 90) 222 Cal.App.3d 1624, 1626

- 1627 .) These admissions are binding on the pleader without further evidentiary proof

. (

Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 871; Patane v. Kiddoo (1985) 167 Cal.App.3d 1207, 1213 .)4

“a similarly named, but wholly separate and distinct entity” and that it “could at least be reasonably inferred (based on law) that . . . IndyMac ha [ s ] dispos [ e ] d itself of any interest in or to the
Note and/or [ deed of trust ]. ” When IndyMac failed in 2008, the Federal Depo si t Insurance Com m ission had MERS transfer IndyMac’ s interest in the n ote and deed of trust to IndyMac Federal Bank, F.S.B.

, and then to OneWest. Appellant s claimed
it was too late to do that. The First Ame n d ment Complaint alleged that the MERS assignment to OneWe s t in 2009 and the
One West assignment to Deutsche Bank in 2012 were void
b ecause IndyMac divested itself of all interest in the note and
deed of trust in 2006

. Stated a n other way, MERS had nothing t o assign and nothing was assigned to Deutsche Bank before the
foreclosure. The F irst A mended C omplaint prayed for $2.5
million damages and c ancellation of the deed of trust assignments and foreclosure documents recorded after Janua ry 1,
2007.
The Demurr er

Deutsch e Bank filed a d emurrer and request ed that
the trial court take judicial notice of the recorded d eed of t rust and foreclosure documents. Deutsch e Bank argue d that the deed
of trust named MERS as the beneficiary and the nominee of IndyMac and i ts successors or assigns. Appellants did not

contest the authenticity of the recorded documents but argued
that the recitals in the deed of trust (i.e., that MERS was the loan beneficiary and IndyMac’ s nominee ) was hearsay and not the proper subjec t of ju dici a l notice. The trial court overruled the objec tion and sustained the demurrer without leave to amend.5 De Novo Review
The function of a demurrer is to test whether, as a matter of law, the facts alleged in the first amended complaint

state a cause of action under any legal theory. ( Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1052 ( Intengan ) .) In our de novo review of the order, we assume the truth of all facts properly pleaded, but not contentions, deductions, or conclusio ns of law. ( Ibid. ) We determine whether the alleged facts are sufficient, as a matter of law, to state a cause of action under any legal theory. ( Ibid. ) In making this determination, we consider any facts of which the trial court properly took judicial notice. ( Ibid. ) Hearsay

- a Non

- Issue Appellants co ntends that the trial court erred in treating the recitals in the deed of trust ( i.e., th at MERS was the beneficiary and I ndyMac’ s nominee ) as true. (See Poseidon Development

, Inc. v. Woodland Lane Es tates , LLC (2007) 152 Cal.App.4th 110 6 , 1117 [trial court may not accept as true statements contained in documents that are subject to judicial notice].) But “evidentiary facts found in recitals of exhibits attached to a complaint or superseded complaint

. . . can be
considered on demurrer. [Citations.] ” ( Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) Appellants adopted, admitted

, and
inc or porated the terms of the deed of trust in to the verified complaint. It was a judicial ad m ission that mooted t he hearsay objection. On review, we must accept as true the contents
of exhibits attached to the original complaint. (See Barnett v.
Fireman’

s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 .) “Under the doctrine of truthful pleading, the courts ‘will not close their6

eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed.’ [Citation.] ‘ False allegations of fact, inconsistent with annexed document ary exhibits [citation] or contrary to facts judicially noticed [c itation], may be disregarded . . . .’ [Citation s .]” ( Hoffman v. Smithwoods RV
Park

, LLC (2009) 179 Cal.App.4th 390, 400 .) The Deed of Trust
The deed of t rust state s that MERS was the lo an beneficiary and could assign the se curity interest at any time without appellant s ’ consent. I f an assignment was made, it had to be done by MERS. ( See

, e.g., Intengan

, supra , 214 Cal.App.4th at pp. 1054

- 1055.) The allegation that IndyMac assigned the
deed of trust in 2006 to a new entity , rendering the MERS assignments to One West and Deutsche Bank void, lacks any
factual basis

. Because only factual allegations are considered on demurrer, we disregard any contentions, deductions or
conclusions of fact or law alleged in the First Amended Complaint. ( McBride v. Smith (2018) 18 Cal.App.5th 1160, 1173.) Appellant s claim that MERS ’ s agency relationship
with IndyMac terminated when IndyMac f ailed and was taken over by the FDIC

. But MERS was more than just an agent . It
was the deed of trust benefic iary and IndyMac’ s nominee , and the nominee of IndyMac’ s successors and assigns

. (See

, e.g., Calvo v. HSBC Bank USA, N.A. (2011) 199 Cal.App.4th 118, 125 .) “California courts have held that a trustor who agreed under the
terms of the deed of trust that MERS, as the lender’ s nominee, has the authority to exercise all of the rights and interests of the lender, including the right to foreclose, is precluded from7

maintaining a cause of action based on the allegation that MERS has no authority to exercise those rights. [Citations.] The deed of trust itself, attached to [appellants’ verified complaint], establishes as a factual matter that MERS has the authority to exercise all of the rights and interests of the lende r. [Citations.] The authority to exercise all of the rights and interests of the lender necessarily includes the authority to assign the deed of

trust. [ Citation .]” ( Siliga v. Mortgage Electronic Registration Systems

, Inc. (2013) 219 Cal.App.4th 75, 83

- 84, disapproved on other grounds in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939, fn. 13.)

The recitals in the deed of trust are inc or porated into and part of the verified complaint. Appellants cannot do an end
run around the ir plead ing by filing the First Amendment Complaint sans the deed of trust. “ The ratio nale for this rule is
obvious. ‘ A pleader may not attempt to breathe life into a complaint by omitting relevant facts which made his previ ous complaint defective.’ [Citation.] Moreover, any inconsistencies with prior pleadings must be explained; if the pleader fails to do so, the court may disregard the inconsistent allegations. [Citation.]

. . . [¶] Furthermore, as a matter of law, allegations in a complaint must yield to c ontrary allegations contained in exhibits to a complaint. [Citation.]” ( Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 946.) Granting appellants leave to amend the First Amended Complaint would serve no useful purpose, given the fact that the actions of Deutsche Bank, as set forth in the verified original complaint,
does not give rise to a cause of action. ( Mercury Casualty Co. v. Superior Court (1986) 179 Cal.App.3d 1027, 1035.)8 Tender
The demurrer was sustained on the al ternate ground
that the F irst A mended C omplaint does not allege a tender of the
loan amount , a necessary element of wrongful foreclosur e

. ( Lona
v. Citibank

, N.A. (2011) 202 Cal.App.4th 89, 104 .) Appellants argue that no tender w as required because the de ed of trust assignment was void. A s disc ussed

, a ppellant s are estopped by
the deed of trust which is attached , in corporated into

, and part of the verified complaint. The deed of trust stated that MERS could

s ell or assign the deed of trust at any time. This court cannot torture the straightforward and ordinary provisions of the deed of trust to fasten upon Deutsche Bank a liability it never assumed. ( Nichols v. Great American Ins. Co s. (1985) 169 Cal.App.3d 766, 778.) Statute of Limita tion s Bar

A n ac tion to cancel an inst rument is subjec t to the
four

- year statute of limita t ions found in Code of Civil Procedure
section 343. ( Moss v. Moss (1942) 20 Cal.2d 640, 645; Salaz a r v. Thomas (2015) 236 Cal.App.4th 467, 477, fn. 8 .) The F irst
A mended C om plaint states that the 2009 and 2012 deed of trust
assi gn ment s are v oid and should be canceled. Appellants did not
file s uit until May 9, 2019

. It is an obvious time bar.

Appellants argue that the statute of lim it ations was
tolled until May 2017 when they lea rn ed that the assignments

w ere void

. No facts are alleged concerning lack of knowledge,
lack of means of o b taining knowledge in the exercise of

rea s onable diligence, and how and when appella nts d iscovered the assignments were void

. (See Fox v. Ethicon En do

- Surgery

, Inc. (2005) 35 Cal.4th 797, 808

- 809 [pleading requirements for9

delayed discovery].) Conclusory allegations do not withstand demurrer. ( Id . at p. 808.)

Delayed discovery is defeated by presumed or
constructive notice where the foreclosure d ocuments are mailed and recorded. ( Bank of New York Mellon v. Citibank

, N.A. ( 2017) 8 Cal.App.5th 936, 956.) A ppel lants were presumptively aware of
the assignments : (1) before May 2015

, when the mortgage servicer (Ocwen Loan Servicing, LLC) contacted ap pellants on behalf of Deutsche Bank to explore options to avoid foreclosure as required by Civil Code section 2923.55 ; (2) in May 2015, when
Deutsche Bank recorded a substitution of trustee stating it was
the “ present beneficiary ” under the deed of trust a nd that is was substituting Western Progressive, LLC as the new trustee ; ( 3 ) in
June 2015

, when Deutsche Bank recorded and served the notice
of default and election to sell under the deed of trust , and
identified itself as the beneficiary of the deed of t rust ; (4) and in December 2015, when the notice of sale was recorded, published, mailed, and posted on appellant’ s door

. ( Civ. Code, § § 2924, subd. (a); 2924f, subd. (b)(1)

- (4) .)

In the alternative , a ppellants claim that C ode of Civil
Procedure section 319 provides for a five

- year statute of
limitations. But t hat statute governs act ion s to determine title of

re a l property

. ( Robertson v. Superior Court (2001) 90 Cal.App.4th 1319, 1327.) T he First Amended C o mplaint challenges assi gnments of the deed of trust and goes to the validity of the real proper t y lien, not title to the property. Appellants finally argue that the statute of lim it a tions did not
commence to run until the last overt act (see W yatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 786), bu t that applies to civil

con spiracies

. ( Id . at p. 787, fn. 4.) No conspiracy is alleged here.10 Disposition The judgment (order sustaining demurrer ) is
affirmed . Deutsche Bank is awarded costs on appeal.

NOT TO BE PUBLISHED.

YEGAN, J.

We concur:

GILBERT, P. J.

PERREN , J.Jeffrey G. Bennett, Judge

Superior Court County of Ventura

______________________________ Tovar & Cohen, René Tovar and David J. Cohen, for Plaintiffs and Appellants.

Houser, Emilie K. Edling and Robert W. Norman, for Defendants and Respondents.