Court Opinion

ID: 2746071
Source: CourtListenerOpinion
Date Created: 2014-10-28 18:02:19.634087+00
Date Added: 2024-06-11T09:54:27.951889
License: Public Domain

Filed 10/28/14 Whitney v. Citibank CA2/7
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 SEVEN

JOHN WHITNEY,                                                        B250436

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC490426)
         v.

CITIBANK, N.A. ET AL.,

         Defendants and Respondents.

                   APPEAL from a judgment of the Superior Court of Los Angeles County,
Michael L. Stern, Judge. Affirmed.
                   Klapach & Klapach and Joseph S. Klapach; Kelley Semmel and Paul
Kelley for Plaintiff and Appellant.
                   Severson & Werson (San Francisco) and Jan T. Chilton; Severson &
Werson (Irvine) and Kerry W. Franich for Defendants and Respondents.

                                  ________________________________
       Appellant John Whitney appeals from the judgment entered upon the trial court’s
order sustaining respondents Citibank N.A. et al.’s demurrer without leave to amend.
Appellant’s second amended complaint (“SAC”) alleged claims for quiet title to his home
and declaratory relief. Here, appellant argues that his residential mortgage was not
properly securitized and he is entitled to know to whom he owes his debt. For the
reasons set forth below, the trial court’s order sustaining respondents’ demurrer without
leave to amend is affirmed.
                   FACTUAL AND PROCEDURAL BACKGROUND1
    I. Factual Background

       On January 25, 2007, John Whitney (“appellant”) executed a promissory note
(“the Note”) of $1 million in favor of Wells Fargo Bank (“Wells Fargo”) on his residence
in Los Angeles. The Note defined the note holder as Wells Fargo, “or anyone who takes
this Note by transfer and who is entitled to receive payments under this Note.” The Note
was secured by a deed of trust which served as a lien against appellant’s home. The deed
of trust was recorded in the Los Angeles County recorder’s office.
       On May 31, 2007, Wells Fargo securitized2 the Note. On June 4, 2007, the Bear
Stearns ARM Trust 2007-4 (“BSARM 2007-4”) Prospectus was filed with the Securities

1
       The facts are taken from appellant’s SAC. (See Howard Jarvis Taxpayers Assn. v.
City of La Habra (2001) 25 Cal. 4th 809, 814 [we assume the truth of the plaintiff’s
pleaded facts when reviewing a judgment of dismissal following a sustained demurrer].)
2
        “Although a mortgage securitization transaction is extremely complex and varies
somewhat depending on the type of entity undertaking the securitization, the core of the
transaction is relatively simple. [¶] First, a financial institution (the ‘sponsor’ or ‘seller’)
assembles a pool of mortgage loans. The loans were either made (‘originated’) by an
affiliate of the financial institution or purchased from unaffiliated third-party originators.
Second, the pool of loans is sold by the sponsor to a special-purpose subsidiary (the
‘depositor’) that has no other assets or liabilities. This is done to segregate the loans from
the sponsor’s assets and liabilities. Third, the depositor sells the loans to a passive,
specially created, single-purpose vehicle (‘SPV’), typically a trust in the case of
residential mortgages. The SPV issues certificated securities to raise the funds to pay the
                                                2
and Exchange Commission. The prospectus described how the Note would be
transferred. First, Wells Fargo would originate the Note and then transfer the Note and
all rights under the deed of trust to EMC Mortgage Corporation (“EMC”), the seller or
sponsor. “EMC would transfer the Note, and all rights under the Deed of Trust, to
Structured Assets Mortgage Investments II, Inc. (‘SAMI’), the depositor, through a
Mortgage Loan Purchase Agreement (MLPA)” (Loan Agreement). Finally, “SAMI
would transfer the Note, and all rights under the Deed of Trust, to Citibank, as Trustee
BSARM 2007-4, under the terms set forth in a Pooling and Servicing Agreement” (PSA).
On May 31, 2007, Citibank paid EMC and EMC paid Wells Fargo, in full, for the Note.
       In February 2009, appellant defaulted on the Note. Wells Fargo recorded a Notice
of Default. On August 3, 2009, appellant filed a voluntary Chapter 11 bankruptcy
petition.3 Respondent Wells Fargo, who purported to act as the “servicer” for
respondents EMC Mortgage Corporation submitted a proof of claim in the bankruptcy
proceedings seeking to recover on Note. No other entity submitted a proof of claim on
the Note. In September 2011, the creditors approved a plan of reorganization where “the
pre-petition . . . debt under the Note was discharged, and replaced with a new
indebtedness.” The amount owed did not change.
       Thereafter after the bankruptcy court confirmed appellant’s reorganization plan,
which included funds set aside to pay the Note, appellant asserts it discovered that Wells
Fargo’s claim under the Note was allegedly fraudulent. As a result appellant filed a
motion to modify the bankruptcy plan so that he could either bring an adversary action or

depositor for the loans . . . . The securities can be . . . issued directly to the depositor as
payment for the loans. The depositor then resells the securities . . . [and] uses the
proceeds of the securities sale (to the underwriter or the market) to pay the sponsor for
the loans.” (Levitin & Twomey, Mortgage Servicing (2011) 28 Yale J. on Reg. 1, 13-
14.)
3
       Pursuant to a request of appellant, this court has taken judicial notice of the
bankruptcy court transcript. (See Cal. Rules of Court, rule 8.252 [courts may take
judicial notice of “court records and official acts of state agencies[.]” (Arce v. Kaiser
Found. Health Plan, Inc. (2010) 181 Cal. App. 4th 471, 482].)
                                               3
assert an objection to respondents’ claim in bankruptcy.     At the hearing on the motion
the bankruptcy court indicated that in its view that appellant’s motion appeared to call for
“lawsuits” and that it would “be inappropriate for those things to be filed in this Court.
I’m not sure this Court could even rule on them after Stern v. Marshall [564 U.S. __, __,
131 S. Ct. 2594] So I’m assuming … they deal completely with state law issues, you
know California Business and Professions Code.” The court refused to refer the matter to
an adversary proceeding, ruling, “that’s not going to happen here because these are the
types of claims that I don’t think this Court has jurisdiction to rule on under Stern v.
Marshall…[¶] its all these state law issues, and you need to take it out to State Court
where it belongs.”4

4
        We do not agree with the bankruptcy court’s conclusion that it lacked jurisdiction
to refer appellant’s challenge to the validity of the respondents’ proof of claim to an
adversary proceeding in the Bankruptcy Court. Bankruptcy Courts routinely rule on the
validity of competing claims of interest in the assets and property in the bankruptcy estate
even where the determination involves the application of state law. (See e.g., Warnick v.
Yassian (In re Rodeo Canon Development Corporation (9th Cir. 2004) 362 F.3d 603,
605-606 [holding that bankruptcy court, applying the California partnership law, should
resolve competing claims to ownership of property in an adversary proceeding prior to
allowing the sale of the property]. ) In addition, in our view, Stern v. Marshall (2011)
564 U.S. __, ___, 131 S. Ct. 2594, did not deprive the bankruptcy court of jurisdiction
over these matters. The Supreme Court recently explained its holding in Stern, “even
though bankruptcy courts are statutorily authorized to enter final judgment on a class of
bankruptcy-related claims, Article III of the Constitution prohibits bankruptcy courts
from finally adjudicating certain of those claims. Stern did not, however, decide how
bankruptcy or district courts should proceed when a “Stern claim” is identified.”
(Executive Benefits Ins. Agency v. Arkison ___ U.S. ___, ___, 134 S. Ct. 2165, 2168. In
Executive Benefits, the Court held that “when, under Stern 's reasoning, the Constitution
does not permit a bankruptcy court to enter final judgment on a bankruptcy-related claim,
the relevant statute nevertheless permits a bankruptcy court to issue proposed findings of
fact and conclusions of law to be reviewed de novo by the district court.” (Ibid.)

       Moreover, in resolving this appeal, we have not determined the merits of
appellant’s objection to the validity of respondent’s proof of claim in the bankruptcy
proceedings.
                                              4
       In the motion, appellant also sought to suspend his mortgage payments. Without
opposition from Wells Fargo or the other creditors, the bankruptcy court granted motion
on the condition that appellant make the payments required by the reorganization plan
under the Note to the trust account of his bankruptcy counsel. Appellant has made all of
the required payments.
       Thereafter appellant filed this instant action, alleging that respondents violated the
PSA and thus, any transfers of the Note and Deed of Trust to Citibank as trustee of
BSARM 2007-4 were void. Appellant claimed that respondents violated the PSA
because “[e]ven if the Note was actually delivered to Citibank as trustee of BSARM
2007-4 on or about May 31, 2007 it is evident from [the attached exhibit] that it was
neither endorsed to Citibank or in blank, and that there were no endorsements to EMC, or
to SAMI, rendering the transfer void. [¶] The Deed of Trust was never assigned to
Citibank as trustee of BSARM 2007-4, and no assignment was recorded as required by
the PSA.”
       Appellant’s challenge primarily relies on an alleged defect in the chain of title for
the Note. Specifically, appellant points to an assignment recorded on June 19, 2009, in
the Los Angeles County Recorder’s Office. In this instrument, Wells Fargo assigned its
interest under the deed of trust to EMC. Appellant contends Wells Fargo had nothing to
assign to EMC “because whatever rights it had in the Note and Deed of Trust had been
extinguished by payment as part of the BSARM 2007-4 securitization process.”
   II. Procedural Background
       Based on these allegations, appellant filed a complaint alleging the following
causes of action: (1) quiet title, (2) declaratory relief, and (3) fraud/misrepresentation.
Respondents filed a demurrer to appellant’s first amended complaint. The trial court
sustained the demurrer as to the quiet title and declaratory relief causes of action with
leave to amend, but sustained the fraud/misrepresentation cause of action without leave to
amend.

                                               5
       Appellant then filed his SAC. Respondents filed a demurrer to appellant’s SAC.
In support of their demurrer, respondents argued that appellant: (1) failed to plead
sufficient facts to support the quiet title and declaratory relief causes of action; (2) has not
tendered the amounts due under the Note and Deed of Trust; and (3) lacked standing to
challenge the assignment of the Note. The trial court sustained the demurrer without
leave to amend. This appeal followed.
                                        DISCUSSION
   I. Standard of Review

       This court applies a de novo standard of review to a trial court’s order of dismissal
following an order sustaining a demurrer. (Comm. For Green Foothills v. Santa Clara
Cnty. Bd. of Supervisors (2010) 48 Cal. 4th 32, 42.) Under de novo review, this court
exercises its “independent judgment about whether the complaint states a cause of action
as a matter of law.” (Los Altos El Granada Investors v. City of Capitola (2006) 139
Cal. App. 4th 629, 650.) We assume all material facts in the complaint are properly
pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962, 966-967.) We may also
consider matters that have been judicially noticed. (Code Civ. Proc., § 430.30, subd. (a);
City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal. App. 4th
445, 459.) However, we do not consider “contentions, deductions or conclusions of fact
or law.” (Moore v. Conliffe (1994) 7 Cal. 4th 634, 638.) Nor do we consider “the
available evidence, the plaintiff’s ability to prove the allegations in the complaint or other
extrinsic matters.” (Perdue v. Crocker National Bank (1985) 38 Cal. 3d 913, 922.)
       When a trial court sustains a demurrer without leave to amend, this court applies
an abuse of discretion standard to determine whether there is a reasonable possibility the
defects in the complaint can be cured by amendment. (Aubry v. Tri-City Hospital Dist.,
supra, 2 Cal.4th at p. 966.) To show abuse of discretion, it is the plaintiff’s burden to
show he or she can amend the complaint. (Roman v. City of Los Angeles (2000) 85
Cal. App. 4th 316, 322.)

                                               6
   II. Appellant Failed to Plead Sufficient Facts to Support His Declaratory Relief
           Cause of Action Against Respondents
           A. Actual Controversy
       Appellant seeks a judicial declaration as to which party is entitled to receive the
funds set aside in bankruptcy for the payment of the Note. Appellant argues that
declaratory relief “will determine what the bankruptcy court should do with those funds.”
       Under Code of Civil Procedure section 1060, “[a]ny person . . . who desires a
declaration of his or her rights or duties with respect to another, or in respect to, in, over
or upon property . . . may, in cases of actual controversy relating the legal rights and
duties of the respective parties, bring an original action . . . for a declaration of his or her
rights. . . .” (Code Civ. Proc., § 1060.) The threshold requirement for declaratory relief
is an actual, present controversy between the parties. (Code Civ. Proc., § 1060; City of
Cotati v. Cashman (2002) 29 Cal. 4th 69, 79.) “Unless all the allegations of a complaint
show that an actual controversy does exist between the parties,” the complaint is subject
to general demurrer. (Amer. Mission Army v. City of Lynwood (1956) 138 Cal. App. 2d
817, 819.) Whether appellant’s claim presents an “actual controversy” is a question of
law this court reviews de novo. (County of San Diego v. State of California (2008) 164
Cal. App. 4th 580, 606.)
       Here, appellant attempts to construct a current controversy between himself and
respondents by arguing that he deserves the right to know to whom he owes money.
Appellant states that respondents asserted they own the Note and are entitled to receive
the money that has been set aside in bankruptcy. However, the alleged facts do not
indicate that appellant has suffered prejudice or will suffer prejudice in the future because
of the current assignments and transfers of the Note. Given that appellant has been
making his payments into the trust account of his bankruptcy counsel, he has not paid the
wrong entity. Nor is there any indication that the transfer of the Note has changed
appellant’s obligations to repay his debt.

                                                7
       With respect to a probable future controversy relating to the legal rights and duties
of the parties, the controversy must at least be “ripe” to be the subject of a declaratory
relief claim. (Environmental Defense Project of Sierra County v. County of Sierra (2008)
158 Cal. App. 4th 877, 885.) “The ripeness requirement, a branch of the doctrine of
justiciability, prevents courts from issuing purely advisory opinions.” (Pacific Legal
Foundation v. California Coastal Com. (1982) 33 Cal. 3d 158, 170.) A ripe “‘controversy
must be definite and concrete, touching the legal relations of parties having adverse legal
interests. . . . It must be a real and substantial controversy admitting of specific relief
through a decree of a conclusive character, as distinguished from an opinion advising
what the law would be upon a hypothetical state of facts.’” (Id. at p. 171.)
       Appellant does not dispute the existence of the secured home loan debt. Within
the deed of trust attached to the SAC, there is a specific provision that states the lender
may transfer the promissory note at any time without prior notice of the transfer to
appellant. Moreover, “[b]ecause a promissory note is a negotiable instrument, a borrower
must anticipate it can and might be transferred to another creditor.” (Herrera v. Federal
Nat. Mortg. Assn. (2012) 205 Cal. App. 4th 1495, 1507 [“As to plaintiff, an assignment
merely substituted one creditor for another, without changing her obligations under the
note.”].)   No other parties (other than respondents) have come forward seeking payment
on the Note. Nor has appellant been asked to pay more than what he owes. (See
Bernardi v. JPMorgan Chase Bank, N.A. (N.D.Cal. 2012) 2012 WL 33894 [holding the
plaintiffs’ claim was implausible because the plaintiff failed to allege that “any third
party has ever come forward attempting to enforce the debt”].)
       During oral argument on this matter, appellant stated that he was seeking a
declaratory relief so he could obtain a determination of whether respondents have the
right under state law to the payments on the secured note held in the bankruptcy trust
account. However, appellant also conceded that his obligation to pay remains.
Furthermore, appellant did not claim in his brief that he would be entitled to the proceeds
in the bankruptcy trust account, nor in our view, would such a claim be plausible given

                                               8
the status of the obligation on the note, even if respondents’ claims were to be found
invalid.
       If there are any adverse legal interests, it would be between the respondents, not
between appellant and respondents. Even if the securitization of the Note is defective,
appellant is not a victim of such invalid transfers because his obligations under the Note
remain unchanged. (Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal. App. 4th
497, 515.) The relevant parties to the alleged improper securitization would be the
“holders (transferors) of the promissory note and the third party acquirers (transferees) of
the note.” (Ibid.) In Jenkins, the plaintiff, like appellant, argued that the defendants’
alleged violations of the PSA resulted in an improper securitization of the promissory
note. (Id. at p. 510.) The California Court of Appeal for the Fourth Appellate District
held that plaintiff’s declaratory relief cause of action lacked merit because she could not
establish “the existence of an actual, present controversy between herself and
Defendants.” (Id. at p. 515.) The Jenkins court stated that “the true victim may be an
individual or entity that believes it has a present beneficial interest in the promissory note
and may suffer the unauthorized loss of its interest in the note. It is also possible to
imagine one or many invalid transfers of the promissory note may cause a string of civil
lawsuits between transferors and transferees. [The plaintiff], however, may not assume
the theoretical claims of hypothetical transferors and transferees for the purposes of
showing a ‘controversy of concrete actuality.’” (Ibid.) So long as appellant continues to
make payments on the debt he owes, he is not at risk of an “unauthorized loss of [his]
interest in the [N]ote.” (Ibid.)
       In sum, appellant has not alleged sufficient facts to establish the existence of an
actual, present controversy between him and respondents. As a result, he has not
established his entitlement to declaratory relief and the trial court properly sustained the
demurrer on this cause of action.

                                              9
           B. Standing
       Even if an actual controversy existed between the parties, appellant has not
demonstrated that he has standing. By asserting that respondents “do not own the debt
for which they are seeking payment[,]” appellant is essentially challenging the lender’s
chain of title to determine which parties are the true holders of the Note.
       However, California’s nonjudicial foreclosure scheme does not allow for such
preemptive actions. (Jenkins v. JP Morgan Chase Bank, N.A., supra, 216 Cal.App.4th at
p. 515 [“As an unrelated third party to the alleged securitization, and any other
subsequent transfers of the beneficial interest under the promissory note, [plaintiff] lacks
standing to enforce any agreements, including the investment trust’s pooling and
servicing agreement, relating to such transactions.”].) California’s nonjudicial
foreclosure scheme “provide[s] a comprehensive framework for the regulation of a
nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.”
(Moeller v. Lien (1994) 25 Cal. App. 4th 822, 830.) Because “‘[t]hese provisions cover
every aspect of exercise of the power of sale contained in a deed of trust[,]’ . . .
‘California appellate courts have refused to read any additional requirements into the
non-judicial foreclosure statute.’” (Gomes v. Countrywide Home Loans, Inc. (2011) 192
Cal. App. 4th 1149, 1154 [citing I.E. Associates v. Safeco Title Ins. Co. (1985) 39 Cal. 3d
281, 285, Lane v. Vitek Real Estate Industries Group (E.D.Cal. 2010) 713 F. Supp. 2d
1092, 1098].)
       The Gomes court stated, “nowhere does [Civil Code section 2924, subdivision (a)]
provide for a judicial action to determine whether the person initiating the foreclosure
process is indeed authorized, and we see no ground for implying such an action.”
(Gomes v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p. 1155.) As the
Gomes court reasoned, “[t]he recognition of the right to bring a lawsuit to determine a
nominee’s authorization to proceed with foreclosure on behalf of the noteholder 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.)

                                              10
       Here, appellant’s suit is essentially a preemptive action. As appellant
acknowledges, this is not a wrongful foreclosure action. There is no indication within the
SAC that foreclosure proceedings have been initiated. Much of the discussion in the
parties’ briefs concerns the applicability and merits of Glaski v. Bank of America,
National Association (2013) 218 Cal. App. 4th 1079. Appellant relies on Glaski to argue
that (1) he has standing to challenge the property’s chain of title and (2) the tender
requirement should not apply.
       In Glaski, the California Court of Appeal for the Fifth Appellate District found
that borrowers may challenge a securitized trust’s chain of title by arguing the attempts to
transfer the deed of trust caused the chain of title to become defective. (Glaski v. Bank of
America, National Association, supra, 218 Cal.App.4th at pp. 1094-1095, 1100.) Under
Glaski, “[t]ransfers that violate the terms of the trust instrument are void under New York
trust law, and borrowers have standing to challenge void assignments of their loans . . . .”
(Id. at p. 1083.)
       We are not persuaded by Glaski. In holding that a borrower does indeed have
standing to attack a void assignment to which it is not a party, Glaski attempts to
distinguish itself from Gomes. (Glaski v. Bank of America, National Association, supra,
218 Cal.App.4th at p. 1095.) In Gomes, the plaintiff sought a determination of a
nominee’s right to initiate foreclosure. (Id. at pp. 1098-1099.) In Glaski, the plaintiff
sought a determination that an attempted transfer to the party seeking foreclosure is void.
(Id. at p. 1095.) However, we find that Glaski reads Gomes too narrowly. Gomes holds
that there is no judicial action to challenge the authority of the person initiating the
foreclosure process. As Jenkins shows, that applies whether the challenge is to the
lender’s nominee, or as here, a transferee. This standing rule applies to appellant because
he is still a third party to the PSA.
       Moreover, Glaski acknowledges that under California law, “a third party’s ability
to challenge an assignment has been stated . . . as follows: [¶] ‘Where an assignment is
merely voidable at the election of the assignor, third parties, and particularly the obligor,

                                              11
cannot . . . successfully challenge the validity or effectiveness of the transfer.” (Glaski v.
Bank of America, National Association, supra, 218 Cal.App.4th at pp. 1094-1095 [citing
7 Cal.Jur.3d (2012) Assignments, § 43, p. 70].) Glaski premises its distinction on the
difference between void and voidable assignments. (Glaski v. Bank of America, National
Association, supra, 218 Cal.App.4th at p. 1100.)
       Glaski’s reasoning relies on two federal Court of Appeals cases interpreting the
law of other jurisdictions and an unpublished federal district court case. (See 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, 2013 WL 2318890)].)
Specifically, Glaski relies on New York state law for the proposition that “an assignment
violating the trust agreement or pooling service agreement is void under New York state
law and thus subject to challenge by non-parties.” (In re Sandri (Bkrtcy. N.D. Cal. 2013)
501 B.R. 369, 375.)
       However, even if this court accepted Glaski’s assertion that New York state law is
controlling and assumed that respondents violated the PSA, Glaski’s interpretation of
New York state law is still incorrect, and appellant still lacks standing. “New York
intermediate appellate courts have repeatedly and consistently found that an act in
violation of a trust agreement is voidable, not void.” (In re Sandri, supra, 501 B.R.. at
pp. 375-376.) Appellant questions whether the Note was actually delivered to Citibank
on or about the closing date. An “after-the-deadline transaction would merely be
voidable at the election of one or more of the parties—not void. Accordingly,
[p]laintiffs, who [a]re not parties to the PSA, do not have standing to challenge it. . . .
[E]ven if it is true that the Note was transferred to the Trust in violation of the PSA, that
transaction could be ratified by the beneficiaries of the Trust and is merely voidable.
(Calderon v. Bank of Am. N.A. (W.D. Tex. 2013) 941 F. Supp. 2d 753, 766, 767.)
       This court also declines to follow Glaski because it remains to be the minority
view for California courts. (See e.g., Mendoza v. JP Morgan Chase Bank N.A. (2014)

                                              12
228 Cal. App. 4th 1020, 1033.) “‘District courts in the Ninth Circuit have [also] generally
rejected Glaski, and sided with Jenkins, noting Glaski is a minority view.’” (Lanini v.
JPMorgan Chase Bank (E.D. Cal. 2014) 2014 WL 1347365; see also, Sanders v. Sutton
Funding, LLC (S.D. Cal. 2014) 2014 WL 2918590 [citing several federal cases to show
that “every other federal district court in California has also disavowed Glaski.”].)5 Until
the California Supreme Court adopts Glaski, this court will continue to follow the
majority rule.
       Finally, appellant also relies on the Homeowner Bill of Rights (HBR) to argue he
has standing despite the Gomes and Jenkins decisions. However, the HBR went into
effect on January 1, 2013. (See Civ. Code, § 2923.4.) According to appellant, Wells
Fargo recorded a notice of default on April 30, 2009. “California courts comply with the
legal principle that unless there is an ‘express retroactivity provision, a statute will not be
applied retroactively unless it is very clear from extrinsic sources that the Legislature . . .
must have intended a retroactive application’ [citation].” (Myers v. Philip Morris
Companies, Inc. (2002) 28 Cal. 4th 828, 841; italics in original.) Though appellant points
to sections in the HBR to argue that he has a right to identify the true holder of the Note,
he does not point to any provision of the HBR that suggests that the California
Legislature intended for the HBR to apply retroactively. Nor is there a section within the
HBR that states it applies retroactively. Thus, the HBR does not grant appellant new
rights upon appeal.

    III.   Appellant Failed to Plead Sufficient Facts to Support His Quiet Title Cause
           of Action Against Respondents

       Appellant also seeks to quiet title to his property against parties who are not true
holders of the Note. To state a quiet title claim, a plaintiff must plead: (1) a description

5
       The Ninth Circuit has only addressed Glaski in one case: In re Davies (9th Cir.
Mar. 24, 2014) 565 Fed.Appx. 630. The Ninth Circuit stated “the weight of authority
holds that debtors in [plaintiff’s] shoes—who are not parties to the pooling and servicing
agreements—cannot challenge them.” (Ibid.)
                                            13
of the property that is the subject of the action; (2) the title of the plaintiff as to which a
determination is sought and the basis of the title; (3) the adverse claims to the title of the
plaintiff against which a determination is sought; (4) the date as of which the
determination is sought; and (5) a prayer for the determination of the title of the plaintiff
against the adverse claims. (Code Civ. Proc., § 761.020.)
       In addition to these statutory requirements, “[u]nder California law, the ‘tender
rule’ requires that as a precondition to challenging a foreclosure sale, or any cause of
action implicitly integrated to the sale, the borrower must make a valid and viable tender
of payment of the secured debt.” (Montoya v. Countrywide Bank, F.S.B. (N.D. Cal.
2009) 2009 WL 1813973, *11-12 [citing Karlsen v. American Savings and Loan Assn.
(1971) 15 Cal. App. 3d 112, 117; Arnolds Management Corp. v. Eischen (1984) 158
Cal. App. 3d 575, 578.) “A quiet title action requires that a plaintiff allege tender or offer
of tender of the amounts admittedly borrowed.” (Montoya v. Countrywide Bank, F.S.B.,
supra, 2009 WL 1813973 at p. 11.; see also Shimpones v. Stickney (1934) 219 Cal. 637,
649 [“a mortgagor cannot quiet his title against the mortgagee without paying the debt
secured.”].) This tender requirement is “based upon the equitable principle that he who
seeks equity must do equity. . . . [A] court of equity will not aid a person in avoiding the
payment of his or her debts.” (Mix v. Sodd (1981) 126 Cal. App. 3d 386, 390.)
       Appellant asserts he satisfies the tender requirement because he has “paid all
amounts currently owed with respect to the Note under his confirmed bankruptcy plan.”
We disagree. Appellant relies on Winnett v. Roberts for this proposition. (Winnett v.
Roberts (1986) 179 Cal. App. 3d 909.) However, in Winnett, the plaintiffs tendered the
full principal amount of debt plus interest. (Id. at p. 921.) The Winnett court held that
this full payment of the underlying debt “discharged both the obligation and the security.”
(Id. at p. 922.) Appellant’s circumstances are different. He has not met the tender
requirement because he has not tendered full payment of his admitted debt. Under Civil
Code section 1486, a “tender must be one of full performance”; a tender of partial
performance is of no effect. (Arnolds Management Corp. v. Eischen, supra, 158

                                               14
Cal.App.3d at p. 580; Civ. Code, § 1486; see also Intengan v. BAC Home Loans
Servicing LP (2013) 214 Cal. App. 4th 1047, 1053 [“A valid tender of performance must
be of the full debt, in good faith, unconditional, and with the ability to perform.”].)
       We also recognize that this tender rule is not absolute and courts have discretion to
excuse the tender requirement when its application would be inequitable. (Onofrio v.
Rice (1997) 55 Cal. App. 4th 413, 424.) For example, “‘if the action attacks the validity of
the underlying debt, a tender is not required since it would constitute an affirmative of the
debt.’” (Ibid.)6 Here, appellant is not attacking the validity of his underlying debt.
Rather, appellant argues that tender is not required because (1) he “does not seek to set
aside a completed foreclosure sale;” and (2) he does not seek to quiet title against a
mortgagee but against “entities who are falsely claiming to be the mortgagee.”
       Appellant relies on Glaski to argue the tender requirement does not apply. We
find, however, that Glaski is not directly applicable to appellant’s circumstances. The
Glaski court held that “[t]ender is not required where the foreclosure sale is void, rather
than voidable, such as when a plaintiff proves the entity lacked the authority to foreclose
on the property.” (Glaski v. Bank of America, National Association, supra, 218
Cal.App.4th at p. 1100.) The court specifically stated it would not address other
exceptions to the tender requirement such as whether requiring tender would have been
inequitable. (Ibid.) As appellant repeatedly admits, his action does not involve a

6
        Courts have also excused the tender requirement (1) “when the person seeking to
set aside the sale has a counterclaim or set-off against the beneficiary; ([2]) where it
would be inequitable to impose the condition on the party challenging the sale; and ([3])
when the trustor is not required to rely on equity to attack the deed because the trustee’s
deed is void on its face. . . . Chavez v. Indymac Mortg. Services (2013) 219 [Cal.App.4th]
1052, 1063, 162 C.R.3d 382 [exception to tender requirement applied where plaintiff
sufficiently alleged that foreclosure sale was void because defendant lacked contractual
basis to exercise power of sale; original loan allegedly had been modified, and plaintiff
had fully performed under modification agreement until defendant breached agreement
by refusing to accept payment].)” (4 Witkin, Summary of Cal. Law (10th ed. 2014 supp.)
Security Transactions in Real Property, § 166, p. 199.)

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foreclosure sale—much less a sale that is void. (See e.g., Fathi v. J.P. Morgan Chase
Bank, N.A. (S.D. Cal. 2014) 2014 WL 3015040 [holding that the plaintiff was still
“bound by the tender rule” because his case did not involve a void underlying
foreclosure].)
       Finally, appellant asserts that it would be inequitable for him to pay his debt
without knowing to whom he owes his debt. We find this argument unpersuasive. As
observed elsewhere here, appellant has been making his payments into an account in the
bankruptcy proceeding. As a result any right he has in the secured asset at issue is
protected by his compliance with Bankruptcy Court’s orders and his timely payment on
the Note. As respondent points out, appellant can pay Wells Fargo, the loan servicer [or
into the bankruptcy account] and insist on receiving his canceled promissory note and
reconveyance of his deed of trust in return. (See Greer v. O’Dell (11th Cir. 2002) 305
F.3d 1297, 1302 [A loan servicer is a “real party in interest with the standing to conduct .
. . the legal affairs of the investor related to the debt it services.”].) It is Wells Fargo’s
responsibility or that of the bankruptcy court to ensure that appellant’s payments are
allocated to the true holder of the Note. Appellant’s only interest is in receiving full
credit for the payments he makes – an interest that is in no way jeopardized here. Thus,
appellant has not demonstrated that it is unfair or that he will be prejudiced because he
does not know to whom he owes his debt.
   IV. Trial Court Did Not Abuse Its Discretion in Sustaining the Demurrer Without
          Leave to Amend

       Finally, we review whether the trial court abused its discretion by sustaining the
demurrer without leave to amend. (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at p.
966.) To show abuse of discretion, the plaintiff must demonstrate how the complaint
could be amended and how the amendment would change the legal effect of the
complaint. (Roman v. City of Los Angeles, supra, 85 Cal.App.4th at p. 322.) In his briefs
and his memorandum of points and authorities in opposition to the SAC’s demurrers,
appellant does not explain how the complaint could be amended. Additionally, we also

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consider that a “demurrer may also be sustained without leave to amend where the nature
of the defects and previous unsuccessful attempts to plead render it probable plaintiff
cannot state a cause of action.” (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal. App. 4th
952, 958-959.) Appellant was already granted an opportunity to amend his complaint.
Given the defects discussed above for appellant’s declaratory relief and quiet title causes
of action, we find that it is not reasonably possible for these defects to be cured by
amendment. The trial court did not abuse its discretion by sustaining the demurrer
without leave to amend.
                                      DISPOSITION
       The judgment is affirmed. Respondents are entitled to costs on appeal.

                                                                               WOODS, J.
We concur:

              PERLUSS, P. J.

              SEGAL, J. *

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