Court Opinion

ID: 4013526
Source: CourtListenerOpinion
Date Created: 2016-07-06 22:03:52.809769+00
Date Added: 2024-06-11T14:47:46.845452
License: Public Domain

Filed 7/6/16 Collins v. Deutsche Bank National Trust Co. CA2/2
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO

DAVID COLLINS et al.,                                                B260099

         Plaintiffs and Appellants,                                  (Los Angeles County
                                                                     Super. Ct. No. EC062385)
         v.

DEUTSCHE BANK NATIONAL TRUST
COMPANY, etc. et al.,

         Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los Angeles County.
Donna Fields Goldstein, Judge. Affirmed.

         Law Office of Michael D. Finley, Michael D. Finley for Plaintiffs and Appellants.

         Wright, Finlay & Zak, Jonathan D. Fink, Magdalena D. Kozinska for Defendants
and Respondents.

                  ___________________________________________________
       After plaintiffs defaulted on a note secured by real property, they filed this lawsuit
to forestall a trustee’s sale. The trial court dismissed the complaint after sustaining
demurrers without leave to amend. On appeal, plaintiffs fail to show a reasonable
possibility that they can state a viable claim, on any theory. We affirm.
                       FACTS AND PROCEDURAL HISTORY1
       In 1993, plaintiffs David Collins and Yvette Herrera became owners of real
property on Sunset Canyon Road in Burbank. In 2006, they borrowed $635,000 from
Paul Financial, secured by a trust deed (TD) on the property. The beneficiary of the TD
was Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the lender.
       Plaintiffs do not deny signing a promissory note or receiving $635,000. Instead,
they allege that the loan was obtained by fraud and is void, because the broker “ignored
the plaintiffs’ inability to repay the loan, knowing that their income did not allow them to
qualify for such loan, and never disclosed the real details of the transaction.”
       In July 2011, two months after plaintiffs defaulted, a deed was recorded, signed by
“Nicelette Collins,” claiming that all sums owed by plaintiffs and secured by the TD were
“no longer valid or have been satisfied,” and fully reconveying the Property to plaintiffs.
MERS recorded a rescission in January 2013, stating that “Nicelette Collins” was not
trustee of the TD and the reconveyance was fraudulent in that plaintiffs did not pay off or
satisfy the obligations secured by the TD.
       On March 19, 2013, MERS, as nominee for Paul Financial, assigned all interest in
the TD to defendant Deutsche Bank National Trust Company (the Bank), solely as trustee
for Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series
2007-4. Plaintiffs allege that the assignment was invalid.

1      The facts are derived from plaintiffs’ complaint and matters subject to judicial
notice. (Code Civ. Proc., § 430.30, subd. (a).)

                                              2
       A notice of default was recorded on March 26, 2014. Plaintiffs filed suit against
the Bank and OCWEN Loan Servicing, LLC, on April 3, 2014.2 In a 36-page minute
order, the trial court sustained defendants’ demurrers without leave to amend and
expunged the lis pendens. Plaintiffs’ action was dismissed with prejudice on
September 15, 2014. Plaintiffs appealed.
       In March 2015, four months after the appeal was taken, plaintiffs filed a motion to
set aside the dismissal of their lawsuit, based on their attorney’s mistake or neglect in
failing to propose amendments to the complaint. Plaintiffs offered a proposed first
amended complaint (PFAC). The trial court took the motion off calendar for lack of
jurisdiction, owing to the pending appeal.
                                       DISCUSSION
1. Appeal and Review
       Appeal lies from the judgment of dismissal after demurrers are sustained without
leave to amend. (Code Civ. Proc., §§ 581d, 904.1, subd. (a)(1); Serra Canyon Co. v.
California Coastal Com. (2004) 120 Cal. App. 4th 663, 667.) Review is de novo. (Desai
v. Farmers Ins. Exchange (1996) 47 Cal. App. 4th 1110, 1115.) We accept the truth of
properly pleaded material facts, but not contentions, deductions or conclusions of fact or
law; we may also consider matters subject to judicial notice. (Yvanova v. New Century
Mortgage Corp. (2016) 62 Cal. 4th 919, 924 (Yvanova).)
       Plaintiffs may request an amendment on appeal. (Code Civ. Proc., § 472c, subd.
(a); City of Stockton v. Superior Court (2007) 42 Cal. 4th 730, 746.) The burden of
demonstrating a reasonable possibility that defects can be cured “is squarely on the
plaintiff.” (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318; Reynolds v. Bement (2005) 36
Cal. 4th 1075, 1091.) Leave to amend should not be granted if it would be an exercise in
futility. (Long v. Century Indemnity Co. (2008) 163 Cal. App. 4th 1460, 1468.)

2      The complaint asserts 10 causes of action: to quiet title; cancel instruments;
violations of the trust-in-lending act; fraud; defamation of title; defamation of credit;
quasi-contract; accounting; constructive trust; and unfair business practices.

                                              3
2. The Yvanova Decision Does Not Mandate Reversal
       Plaintiffs argue that Yvanova mandates reversal, so that the trial court can consider
whether the assignment of their loan to the Bank was void. They are mistaken. This
court has held that a debtor cannot maintain a preforeclosure sale claim challenging the
securitization of the TD or the TD beneficiary’s authority to foreclose. (Kan v. Guild
Mortgage Co. (2014) 230 Cal. App. 4th 736.) Yvanova did not affect this holding: the
Supreme Court only resolved the “narrow question” of whether a borrower may make a
postforeclosure challenge to a void assignment of the TD. (Yvanova, supra, 62 Cal.4th at
pp. 934-935.)
       Other courts have rejected plaintiffs’ theory that a borrower may, on a mere hope
or hunch, preempt a nonjudicial foreclosure by challenging a debt assignment. The
reasoning is that “California courts do not allow such preemptive suits because they
‘would result in the impermissible interjection of the courts into a nonjudicial scheme
enacted by the California Legislature.’” (Saterbak v. JPMorgan Chase Bank, N.A. (2016)
245 Cal. App. 4th 808, 814; Rossberg v. Bank of America, N.A. (2013) 219 Cal. App. 4th
1481, 1493; Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal. App. 4th 1149,
1156; Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal. App. 4th 497, 513,
disapproved on another ground in Yvanova at p. 939, fn. 13. See also Brown v. Deutsche
Bank National Trust Co. (2016) 247 Cal. App. 4th 275, 281.)
       Yvanova is a wrongful foreclosure case in which a borrower sought damages for
an illegal, fraudulent or willfully oppressive sale of property securing a TD. (Yvanova,
supra, 62 Cal.4th at p. 929; Miles v. Deutsche Bank National Trust Co. (2015) 236
Cal. App. 4th 394, 408.) Here, plaintiffs admittedly seek “to stop a foreclosure and quiet
title prior to the foreclosure’s completion.” But they cannot maintain a preemptive action
“because it creates an additional requirement that a foreclosing entity first demonstrate in
court that it is entitled to foreclose,” impermissibly interjecting the courts into the
Legislature’s comprehensive and efficient nonjudicial foreclosure statutory scheme.
(Kan v. Guild Mortgage, supra, 230 Cal.App.4th at p. 743.)

                                               4
3. The Sufficiency of Plaintiffs’ Claims
       Plaintiffs acknowledge the standard of review. Rather than elucidate how
plaintiffs can state a claim against defendants, under any theory, their opening brief
assails the trial court’s reasoning, a topic that is not germane to our review. “Even if the
record demonstrates that the trial court misunderstood or misapplied the law, the ruling
must be affirmed if it is supported by any legal theory.” (Hoover v. American Income
Life Ins. Co. (2012) 206 Cal. App. 4th 1193, 1201.) There is no prejudice from incorrect
logic or reasoning, if the order is correct. (Ibid.)
       The complaint lists 10 causes of action; the PFAC has eight. The opening brief
nowhere recites the elements of each cause of action, or facts supporting each element.
Instead, it notes that plaintiffs filed a belated PFAC while this appeal was pending,
adding, without explanation, that the “proposed Amended Complaint demonstrated that
all of the Trial Court’s concerns could be resolved by amendment.”
       Plaintiffs’ cursory request to go forward—without explaining how the PFAC cures
the defects in the complaint—is not sufficient to carry their burden of showing that the
trial court abused its discretion by sustaining demurrers without leave to amend. It is not
enough to say that the judgment is wrong, and plaintiffs forfeit points unsupported by
reasoned argument, citations to the record, and pertinent legal authority. (Benach v.
County of Los Angeles (2007) 149 Cal. App. 4th 836, 852.) Plaintiffs’ incorporation by
reference of their points and authorities fails. (Parker v. Wolters Kluwer United States,
Inc. (2007) 149 Cal. App. 4th 285, 290-291 [a brief incorporating by reference arguments
made in the trial court violates the Rules of Court]; Soukup v. Law Offices of Herbert
Hafif (2006) 39 Cal. 4th 260, 294, fn. 20.)3

3      Alerted to these deficits by their adversaries, the reply brief has a laundry list of
authorities at pages 7-8, with no description of the cases or how they apply to the facts of
this appeal. The reply also lists the elements of some claims made in the PFAC.
Principles of fairness militate against consideration of points made for the first time in a
reply because it deprives an opponent of the right to counter with a written response.
(Prince v. United Nat. Ins. Co. (2006) 142 Cal. App. 4th 233, 238.)

                                               5
                                 DISPOSITION
     The judgment is affirmed.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

                                    BOREN, P.J.
We concur:

     ASHMANN-GERST, J.

     HOFFSTADT, J.

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