Filed 12/15/15 Tylo v. JPMorgan Chase Bank CA2/3 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 THREE

DEBORAH HUNTER TYLO ,
Plaintiff and Appellant
,

v.

J PMORGAN CHASE BANK, N.A. et al

. ,
Defendant s and Respondent s

. B253969
(Los Angeles County Super. Ct. No. BC495018 )

APPEAL from a judgment of the Superior Court of Los Angeles County, Mark V. Mooney , Judge

. Affirmed

.

Rodriguez Law Group
, Patric ia Rodriguez; Law Offices of Herb Fox and Herb
Fox for Plaintiff and Appellant

.

Keesal, Young & Logan and David D. Piper for Defendant s and Respondent s

.

_____________________2 INTRODUCTION Plaintiff Deborah Hunter Tylo sued her mortgage loan servicer, JP Morgan Chase Bank, N.A. (Chase), and the trustee of the securitized trust holding her loan, Bank of America, N.A. (Bank of America ; collectively , Defendants ), to prevent Defendants from foreclosing on her property . Plaintiff principally contends that Defe ndants lack standing to foreclose because they failed to comply with certain requirements of the securitized

trust ’ s pooling and servicing agreement when they securitized her loan. Plaintiff also
claims that Defendants violated the federal Truth in Lendin g Act (TILA) by failing to give her timely notice that her loan had been transferred to the securitized trust

. Because
California ’ s nonjudicial foreclosure statutes provide no legal basis for a judicial action to preempt a foreclosure on the grounds asser ted by Plaintiff, and because the subject TILA notification provision was not in effect when Plaintiff ’ s original lender transferred her loan to the securitized trust, we conclude the trial court properly sustained Defendants ’
demurrer without leave to ame nd. We affirm.

FACT S AND PROCEDURAL BACKGROUND Because this matter comes to us on demurrer, our statement of facts is based upon the allegations of Plaintiff ’ s operative first amended complaint. ( Stevenson v. Superior
Court (1997) 16 Cal.4th 880, 885

. ) “[W]e treat as true all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” ( Freeman v. San Diego Assn. of Realtors (1999) 77 Cal.App.4th 171, 178, fn. 3.) On June 16, 2006, Plaintiff obtained a residential hom e loan from Washington Mutual in the principal amount of $1,188,750. In connection with the loan, Washington Mutual obtained a security interest in the subject property under a deed of trust.
Some time thereafter , Washington Mutual transferred Plaintiff ’ s mortgage loan to a

s ecuritized t rust, designated as “WAMU MORTGAGE PASS

- THROUG H
CERTIFICATES SERIES 2006

- AR11 ” (the Securitized Trust). The trustee of the
Securitized Trust received the loan pursuant to the terms of the trust ’ s Pooling and Servicing Agre ement (PSA ). Washington Mutual retained the right to service Plaintiff ’ s3

loan under the PSA

. Bank of America became trustee for the Securitized Trust after acquiring the original trustee, LaSalle Bank. In 2008, Chase purchased Washington Mutual out of re ceivership, acquiring, among other things, Washington Mutual ’ s servicing rights , but not a beneficial interest in
Plaintiff ’ s mortgage loan

. On June 13, 2012, National Default Servicing Corpora tion (NDSC) , acting as the authorized agent for Chase, recorded a notice of default against the subject property. 1
On October 9, 2012, NDSC recorded a notice of trustee sale. The operative first amended complaint, filed on August 9, 2013, alleges the property “is scheduled to be sold
at a Trustee ’ s Sale on November 2, 2012.” The complaint does not allege whether the trustee sale occurred, or if the sale was postponed or re

- noticed. However, in her reply brief filed in this appeal, Plaintiff confirms that she does “not allege[] that a foreclosure
sale has occurred.”
Plaintiff ’ s first amended complaint asserts causes of action for wrongful foreclosure and violation of TILA. With respect to the wrongful foreclosure claim, the complaint alleges Chase lacks standing to foreclose on the property because it “did not

prope rly comply with the terms of Defendants ’ own securitization requirements” or the
PSA

. U nder the PSA, the complaint alleges, “the only person [ sic ] who can lawfully commence foreclosure on [the] property are those certificate holders of the securitized

tru st.” The complaint adds that “in order for [Chase] to have had a valid and enforceable security interest against the Property, [Chase] must prove that [it] received an
endorsement of the Note ” from the Securitized Trust. “ A bsent such proof, ” the complain t states , “ CHASE does not have standing to initiate forecl os[ure].”

1 The first amended complaint alleges NDSC is “in the business of conducting non

judicial foreclosures in California and acted as a foreclosure trustee herein.” Although the complaint named NDSC as a defendant, there are no other plea dings related to the entity in the record, nor has Plaintiff supplied a legal argument challenging NDSC’s dismissal in her appellate briefs.4

As for the TILA violation, the complaint alleges Bank of America violated the statute (15 U.S.C. § 1641(g)) by failing to provide Plaintiff with timely written notice
after her mortgage lo an was transferred to the Securitized Trust

. Defendants Chase and Bank of America filed a joint demurrer to the first amended complaint. Among other things, Defendants argued Plaintiff could not maintain a claim for wrongful foreclosure because no foreclo sure had taken place and a prefor e closure judicial action challenging the foreclosing party ’ s standing is not au thorized under
California ’ s non

judicial foreclosure statutes. As for the TILA claim, Defendants argued
Bank of America could not be held liable because Plaintiff ’ s loan was transferre d to the
Securitized Trust some time in 2006, while the subjec t notice provision (15 U.S.C. § 1641(g)) did not become effect ive until May 20 , 2009

. The trial court sustained Defendants ’ demurrer without leave to amend

. DISCUSSION
1. Plaint iff ’ s Pref

oreclosure Lawsuit Challenging Defendants ’ Standing to
Foreclose Is Not Authorized by California ’ s Nonj udicial Foreclosure
Statutes On review of a judgment of dismissal after an order sustaining a demurrer, “we
examine the c omplaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory, such facts being assumed true for this purpose.” ( McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415 .) Although she styles her claim as a “ wrongful foreclosure ” action, Plaintiff admits
that no foreclosure sale has occurred

. Nevertheless, Plaintiff maintains “it is clear . . . that foreclosure has begun, and any attempted sale of the property is wrongful based on
the facts and al legations” pled in the complaint. The complaint itself states the wrongful foreclosure cause of action is asserted “to prevent a sale, ” rather than “ unwind” one. Accordingly, notwithstanding the label placed on the cause of action, we must determine
whet her the alleged facts are sufficient to preempt a foreclosure sale on any cognizable legal theory. (See Peterson v. Cellco Partnership (2008) 164 Cal.App. 4th 1583, 1595 [“ we look beyond the claim ’ s label, which is not dispositive when reviewing a trial5

co urt ’ s sustaining of a general demurrer ” and focus instead on the claim ’ s “ ‘ actual

gravame n ’ ” and the “ ‘

facts alleged

. ’ ” ] .) Notwithstanding her admitted execution of the deed of trust, the gravamen of
Plaintiff ’ s claim is that Defendants lack standing t o foreclose on the subject property
because they failed to comply with certain requirements set forth in the PSA when they
securitized her loan . In her appellate briefs, Plaintiff adds that unless Defendants can establish “a complete and unbroken chain of transfers and assignments” and prove that the trustee of the Securitized Trust had “actual physical possession” of the promissory

note before the trust ’ s closing date
, Defendants cannot demonstrate that the trust “perfected its security interest” in the s ubject property. Under these circumstances,
Plaintiff maintains Defendants should be “precluded from asserting any secured or unsecured claim” with respect to the property. Consistent with recent authorities rejecting similar claims , we conclude these al legations are insufficient to state a preemptive cause of action to stop or delay a nonjudicial foreclosure sale

.

“ The argument that a defendant lacks standing to foreclose because of an improper securitization process has recently become particularly popu lar. ” ( Kan v. Guild Mortgage Co

. (2014) 230 Cal.App. 4th 736, 741 ( Kan ) .) In Kan , the plaintiff sought to

ame nd his complaint to state a pre foreclosure quiet title claim based on the allegation that
his lender ’ s nominee transfer red his deed of trust to a securitized investment trust “ after
the trust closed. ” ( Id. at p. 741.) Based on this allegation, the plaintiff argued he could assert a viable claim to quiet title because the “attempted transfer to the investment trust
was therefore void
, ” and the succ essor beneficiary and trustee thus had “no right, title, or interest in the property” upon which to foreclose. ( Ibid .) The Court of Appeal rejected the proposed amendment, concluding “ California ’ s nonjudicial foreclosure statutes provide [d] [ the plaintif

f ] with no basis to [preemptively] challenge the authority of the entity initiating the foreclosure process .” ( Id. at p. 745.)6

In reaching this conclusion, the Kan court relied principally upon Jenkins v. JPMorgan Chase Bank, N.A

. (2013) 216 Cal.App. 4th 4 97 ( Jenkins ). Much like the plaintiff in Kan and Plaintiff in the instant case, the plaintiff in Jenkins asserted that the
defendants

— the successor beneficiary under the plaintiff ’ s deed of trust, the successor

trus tee, and the acting trustee of the secur itized investment trust

— lacked authority to initiate a nonjudicial foreclosure because they failed to comply with certain terms of the
investment trust ’ s pooling and servicing agreement when they securitized the plaintiff ’ s loan. 2 ( Id. at p. 510.) The Je nkins court rejected the plaintiff ’ s claim
, observing that it relied on the false premise that a trustor

- debtor has a “ right to bring a preemptive judicial
action to determine whether [the beneficiary, trustee or any other authorized agent under
a deed of trust] ha [s] the authority to initiate nonjudicial foreclosure on her home .” ( Id. at pp. 512

- 513.) In explaining why no such right exists, the Jenkins court emphasized that
California ’ s nonjudicial foreclosure statutes (Civ. Code, §§ 2924

- 2924k) provide a

“ ‘ comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sa le contained in a deed of trust ’ ” ( Jenkins, at p

. 508), and nothi ng within that framework imposes “ ‘ the additional requirement ’ th at the foreclosi ng entity must

‘ demonstrate in court that it is authorized to initiate a foreclosure ’ bef ore the foreclosure can proceed” ( id. at p. 512, quoting Gomes v. Countrywide Home Loans, Inc. (2011)
192 Cal.App. 4th 1149 , 1154, fn. 5 ( Gomes ) ). T he court held that t o imply such a requirement by permitting the pla intiff to pursue her judicial action would “r esult in the impermissible interjection of the courts into a nonjudicial scheme enacte d by the California Legislature ” and “ ‘ introduce the possibility of lawsuit s filed solely for the purpose of delaying valid foreclosures. ’ ” ( Jenkins, at p. 513 , italics added .)

2 The specific alleged violations in Jenkins largely mirrored those asserted by Plaintiff in the instant case. Li ke Plaintiff here, the plaintiff in Jenkins alleged “the terms of the pooling and servicing agreement were violated because (1) the promissory note was not transferred into the investment trust with a complete and unbroken chain of endorsements and transfe rs and (2) the trustee of the investment trust did not have actual physical possession of the note and deed of trust prior to the closing date of the investment trust.” ( Jenkins, supra, 216 Cal.App.4th at p. 510.)7

Importantly for our analysis, the Jenkins court distinguished a claim alleging

“ ‘ misconduct arising out of a nonjudicial foreclosure sale
, ’ ” which can give rise to a
valid post foreclosure judicial action, from the preemptive pre foreclosure action the plaintiff sought to assert. ( Jenkins, supra, 216 Cal.App.4th at p. 510, italics added.) The plaintiff ’ s preemptive action, the Jenkins court explained, “ d oes not seek a remedy for a foreclosing party ’ s misconduct with regards to the initiation and processing of the nonjudicial foreclosure ”; rather, it sought to stop or delay the foreclosure by incorporating an adjudicatory requirement into the nonjudicial f ramework. ( Id. at
p. 512.) T hat result , the court noted, “would unnecessarily ‘ interject the courts into [the]

c omprehensive nonjudicial scheme ’

. . . and ‘ would be inconsistent with the policy behind nonjudicial foreclosure of providing a quick, inexpen sive and efficient remedy. [Citation.] ’ ” ( Ibid

. , quoting Gomes, supra, 192 Cal.App.4th at p. 1154 & fn. 5. ) For these reasons, the Jenkins court observed, “California courts have refused to delay the nonjudicial foreclosure process by allowing trustor

- debtors to pursue preemptive judicial actions to challenge the right, power, and authority of a foreclosing ‘ beneficiary ’ or beneficiary ’ s ‘ agent ’ to initiate and pursue foreclosure.” ( Id . at p. 511.) Though Plaintiff does not address Jenkins in her brief s , she implicitly argues we should reject its reasoning and follow Glaski v. Bank of America (2013) 218 Cal.App. 4th
1079 ( Glaski ). The plaintiff in Glaski brought an action for wrongful foreclosure after his home was purchased by the purported successor t rustee at a nonjudicial foreclosure sale. In relevant part, the plaintiff alleged that the foreclosing entity

— the trustee acting
on behalf of a securitized trust formed under New York law

— was not the true owner of
his loan because its chain of title had b een broken by a defective transfer of the loan to
the securitized trust after the trust ’ s closing date , in violation of the trust ’ s pooling and servicing agreement . ( Id. at p. 1084.) The Glaski court held these allegations were
sufficient to state a wron gful foreclosure claim on the theory that the entity invoking the

power o f sale did not hold the plaintiff ’ s loan. The court reasoned that New York trust
law supplied a legal basis for the plaintiff ’ s theory of recovery because, under that body
of law
, th e securitized trust ’ s alleged attempt to accept the transfer of the loan after the8

closing date established by its pooling and servicing agreement “would be void as an act in contravention of the trust document.” ( Id. at p p. 1096

- 1097 .) We disagree with P laintiff ’ s assertion that Glaski establishes a cognizable theory for relief based on the facts alleged in her complaint. Critically, the plaintiff in Glaski sought relief for wrongful foreclosure based on alleged misconduct that culminated in a
foreclosur e sale . Here, although Plaintiff attaches the “wrongful foreclosure” label to her claim, she admits that no foreclosure sale has occurred. As explained in Jenkins (a case
not discussed in Glaski ), allowing Plaintiff to assert a preemptive action “would r esult in the impermissible interjection of the courts into a nonjudicial scheme enacted by the California Legislature.” ( Jenkins, supra, 216 Cal.App.4th at p. 513.) Further, it “ ‘ would be inconsistent with the policy behind nonjudicial foreclosure of pr oviding a quick, inexpensive and efficient remedy. ’ ” ( Id . at p. 512, quoting Gomes, supra,
192 Cal.App.4th at p. 1154, fn. 5 ; Kan, supra, 230 Cal.App.4th at p. 743 .) And n otably,
as the court observed in K an , “ Glaski did not take issue with Gomes ’ s hol ding that a preforeclosure
, preemptive action is not authorized by the nonjudicial foreclosure statutes because it creates an additional requirement that a foreclosing entity first demonstrate in
court that it is entitled to foreclose. ” ( Kan, at p. 743.) In view of the admitted fact that no foreclosure sale has occurred, Glaski is inapposite. 3

3 As Kan also notes, several courts have criticized Glaski ’s separate holding that the plaintiff had standing to challenge alleged violations of a pooling and servicing agreement to which he was neither a party nor third party beneficiary. ( Kan, supra, 230 Cal.App. 4th at p. 744 [listing cases]. ) One California appellate decision, since depublished by our Supreme Court’s grant of review, addressed Glaski in the context of a preforeclosure lawsuit and explicitly disagreed with that holding. (See Keshtgar v. U.S. Bank, N.A. (2014) 226 Cal.App.4th 1201, review granted Oct

. 1, 2014, S220012 ( Keshtgar ) .) As the Kan court explained, although Keshtgar distinguished Glaski on the ground that it was a postforeclosure action, the Keshtgar court “went further . . . and rejected Glaski ’ s holding that a bor rower has standing to challenge an assignment, finding that an assignment of a deed of trust and promissory note do not change the borrower ’ s obligations and therefore do not create prejudice. ” ( Kan , at p. 745.) Like the Kan court, we are content not to “ wade into the issue of whether Glaski was correctly decided, because the opinion has no direct applicability to this preforeclosure action. ” ( Kan , at p. 745.)9

We conclude the holdings in Jenkins and Kan rejecting a pre foreclosure lawsuit to stop or delay a nonjudicial foreclosure are directly on point and the reasoning of tho se cases, and the cases they relied upon, is sound. Because California ’ s nonjudicial
foreclosure statutes afford Plaintiff no basis to judicially challenge the authority of an entity initiating the foreclosure process, the trial court properly sustain ed Defendants ’
demurrer to the purported wrongful foreclosure cause of action.
2. The Transfer Occurred Before the TILA Notification Requirements Became Effective The complaint alleges that Bank of America violated the federal TILA

— specifically, title 15 o f the United States Code section 1641(g)

— by failing to “ provide
Plaintiff with written notice within 30 days after the date on which [Bank of America , as trustee of the Securitized Trust ] was allegedly assigned the mortgage.” Defendants
contend the trial court properly sustained their demurrer to the TILA claim without leave to amend because the complaint admits that Washington Mutual transferred Plaintiff ’ s mortgage loan to the Securitized Trust before section 1641(g) went into effect

. We agree.
Section 1641(g) of title 15 of the United States Code provides that “not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall
noti fy the borrower in writing of such transfer.” 4 Subsection (g) became effective on

4 Defendants also contend that Bank of America cannot be held liable under title 15 of the Uni ted States Code section 1641(g) because the notification provision applies to a “creditor” only, and the complaint’s allegations admit that Bank of America is not a creditor but rather the trustee of the Securitized Trust. While two federal district court cases, authored by the same district court judge, have concluded, without analysis, that “a trustee is not a creditor as defined by TILA” ( Morgan v. US Bank Nat ’ l Ass ’ n (N.D.Cal. Dec. 7, 2012) 2012 U.S. Dist. LEXIS 174010, *16; Wilson v. Wells Fargo Bank (N.D.Cal. Aug. 5, 2011) 2011 U.S. Dist. LEXIS 86611 , *5), several more district courts have rejected this holding. (See, e.g., Vargas v. JP Morgan Chase Bank, N.A. (C.D.Cal. 2014) 30 F.Supp. 3d 945, 950 ; Rodriguez v. Wells Fargo Bank, N.A. (C.D.Cal. May 6, 2013) 2013 U.S. Dist. LEXIS 186257 , *5

- *6; Dinh v. Citibank, N.A. (C.D.Cal. Jan. 7, 2013) 2013 U.S. Dist. LEXIS 2312 , *18; Vogan v. Wells Fargo Bank, N.A. (E.D.Cal. Nov. 1 7 , 2011) 2011 U.S. Dist. LEXIS 132944, *10

- *12.) As the court in Vogan10

May 20, 2009. (Pub. L. No. 111

- 22 (May 20, 2009) 123 Stat. 1632.) The provision does not apply retroactively. ( Diunugala v. JP Morgan Chase Bank, N.A

. (S.D.Cal. June 30, 2015) 2015 U.S. Dist. LEXIS 85128, *10; Bradford v. HSBC Mort

. Corp. (E.D.Va. 2011) 829 F.Supp.2d 340, 353 [ observing, “ [ n ] othing in TILA indicates that [section 1641(g)] should be applied retroactively, and retroactive application of the provision

. . . would undoubtedly and impermissibly ‘ attach[ ] new legal consequences to events completed before its enactment, ’ ” quoting Landgraf v. USI Film Products (1994) 511 U.S. 244,
269

- 2 70 ]. ) Accordingly, a creditor is not liable under TILA for an alleged failur e to notify a borrower of a loan transfer that occurred prior to May 20, 2009. (See Jara v.
Aurora Loan Serv ice s (N.D.Cal. 2012) 852 F. Supp.2d 1204 , 1208

- 1209; Bernardi v.
Deutsche Bank Nat ’ l Trust Co. Am. (N.D. Cal. Jan. 15, 2013) 2013 U.S. Dist. LEXIS
6 735, *18

- *19 ( Bernardi ) .) Plaintiff maintains she learned of the alleged TILA violation when she “obtained an audit on the property and discovered that the Loan had been assigned.” While this “audit” presumably disclosed the date of the assignment, Plaint iff ’ s complaint fails to allege when the assignment occurred. Notwithstanding this omission, Defendants argue we can infer that the assignment necessarily occurred at some time in 2006 when the Securitized Trust, designated as “WAMU MORTGAGE PASS

- THROUGH

explained, “ the Wilson court failed to note the distinction between a trustee of a deed of trust and the trustee of a mortgage backed security, as well as the basis for the rule exempting the trustee of a deed of trust from TILA .” ( Vogan, at p. *11.) “ Under Californ ia law, the trustee of a deed of trust has no beneficial interest in the mortgage associated with the deed of trust ,” and “has only two duties: (1) to foreclose the deed of trust upon default, or (2) when the secured debt is satisfied to convey the deed of trust to the borrower. ” ( Id. at pp. *9

- *10.) It is “[d] ue to the limited duties and lack of beneficial interest assigned to the trustee of a deed of trust [that] federal courts in California hold that TILA does not apply to the trustee of a deed of trus t. ” ( Id. at p. *10.) In holding that the trustee of a mortgaged backed security could be liable under section 1641(g), Vogan and the numerous cases that have followed it concluded, “ The trustee of a deed of trust is exempt from TILA because of its limite d role under California law, but there is no analogous reason to exempt other types of trustees from TILA ’ s provisions .” ( Id. at p. *11.)11

CERTIFICATES SERIES 2006

- AR11,” closed. (Italics added.) While we recognize
there is some appeal to this logic (see, e.g., Bernardi , supra, 2013 U.S. Dist. LEXIS 6735 at p. *18

- *19), we need not make this leap to conclude that the transfer occurred befor e section 1641(g) ’ s effe ctive date.
Bank of America ’ s alleged TILA violation occurred when it was assigned
Plaintiff ’ s loan as the trustee of the Securitized Trust

— that is, upon the loan ’ s securitization. A lthough the complaint does not specify when the s ecuritization occurred,
a reasonable construction of the complaint ’ s allegations confirm s that the securitization occurred, at the latest, sometime in or before 2008; in other words, before section 1641(g) ’ s effective date in May 2009. Plaintiff alleges th at, upon securitization, Washington Mutual retained only servicing rights with respect to her loan , while Bank of America ’ s predecessor, LaSalle Bank, received the beneficial interest as trustee on behalf of the Securitized Trust. The complaint further al leges that
, in 2008 , Chase acquired Washington Mutual ’ s servicing rights when it purchase d Washington Mutual out of receivership . The complaint emphasizes that Chase did not acquire the beneficial interest in Plaintiff ’ s loan , which
had been previously as signed to the Securitized Trust. 5 Thus, notwithstanding Plaintiff ’ s failure to specify when the securitization occurred , it is clear that she cannot amend her complaint to allege her loan was securitized and transferred to Bank of America as trustee
of th e Securitized Trust at any time after 2008. And, b ecause the securitization and
transfer to Bank of America necessarily occurred before section 1641(g) ’ s effective date in May 2009 , the trial court properly sustained Defendants ’ demurrer to the claim with out leave to amend.

5 Notably, it is the alleged fact that Chase did not acquire a beneficial interest in Plaintiff’s loan

— that interest being held by the “certificate holders of the securitized trust”

— which Plaintiff asserts as the basis for her wrongful foreclosure claim.12 DISPOSITION
The judgment is affirmed

. Defendant s JPMorgan Chase Bank, N.A. and Bank of America, N.A. are entitled to their costs on appeal

.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

JONES , J. *

We concur:

EDMON , P. J

.

LAVIN , J.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the Cal ifornia Constitution.