Court Opinion

ID: 2764908
Source: CourtListenerOpinion
Date Created: 2014-12-26 20:02:12.94578+00
Date Added: 2024-06-11T11:27:21.371776
License: Public Domain

Filed 12/26/14 Tyshkevich v. Countrywide Home Loans CA3

                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                        (Placer)
                                                            ----

SVETLANA TYSHKEVICH,                                                                         C070764

                   Plaintiff and Appellant,                                      (Super. Ct. No. SCV26731)

         v.

COUNTRYWIDE HOME LOANS, INC. et al.,

                   Defendants and Respondents.

         In this action by a homeowner alleging fraud as a means to prevent a nonjudicial
foreclosure (Civ. Code, § 2924 et seq.; undesignated statutory references are to the Civil
Code), plaintiff Svetlana Tyshkevich, in propria persona, appeals from a judgment of
dismissal following the sustaining of a demurrer to her second amended complaint
without leave to amend, in favor of defendants Countrywide Home Loans, Inc.
(Countrywide), dba America’s Wholesale Lenders, Inc. (America’s Wholesale),
ReconTrust Company, N.A. (ReconTrust), and Mortgage Electronic Registration

                                                             1
Systems, Inc. (MERS). Plaintiff also challenges the trial court’s denial of her motion for
sanctions (Code Civ. Proc., § 128.7) against defense counsel for a false statement in a
demurrer and motion to strike a prior pleading.
       Plaintiff contends on appeal that (1) defendants lack standing to foreclose because
they assigned their interests to others, and purported assignments and substitutions of
trustees are void because the documents were false and forged, leaving a defect in the
chain of title; (2) the trial court abused its discretion in denying leave to amend; and (3)
the trial court misconstrued the sanctions statute.
       We conclude (1) any irregularities in assignments do not entitle plaintiff to stop
nonjudicial foreclosure or recover damages; (2) plaintiff fails to show how amendment
can cure the pleading’s defects; and (3) the trial court properly denied sanctions where
the false statement was made in superseded filings no longer at issue when plaintiff filed
the sanctions motion.
       We accordingly affirm the judgment of dismissal and the order denying sanctions.

                                 FACTS AND PROCEEDINGS

       “In our de novo review of an order sustaining a demurrer, we assume the truth of
all facts properly pleaded in the complaint or reasonably inferred from the pleading,” but
we do not assume the truth of contentions, deductions, or conclusions of law. (Intengan
v. BAC Home Loans Servicing LP (2013) 214 Cal. App. 4th 1047, 1052 (Intengan).) “We
then determine if those facts are sufficient, as a matter of law, to state a cause of action
under any legal theory. [Citation.]” (Ibid.) We also consider matters which have been or
may be judicially noticed. (Sacramento Brewing Co. v. Desmond, Miller & Desmond
(1999) 75 Cal. App. 4th 1082, 1085, fn. 3.) To the extent the factual allegations conflict
with the contents of attached exhibits, we accept as true the exhibits. (Barnett v.
Fireman’s Fund Ins. Co. (2001) 90 Cal. App. 4th 500, 504-505.) A plaintiff may not

                                               2
avoid a demurrer by filing an amended complaint suppressing facts which proved fatal in
the original complaint. (Cantu v. Resolution Trust Corp. (1992) 4 Cal. App. 4th 857, 877.)
        We accordingly consider the full exhibits (Deed of Trust, etc.) attached to the
original complaint and not merely the excerpts attached to the second amended
complaint.
        In January 2005, plaintiff, a Coldwell Banker licensed real estate broker, financed
the purchase of a residence on Lupine Lane in Auburn. In March 2006, she refinanced
the house with a $1.3 million loan from defendant Countrywide dba America’s
Wholesale. She signed a promissory note and Deed of Trust.
        The Deed of Trust stated:
        The Lender was America’s Wholesale Lender;
        The Trustee was ReconTrust Company, N.A. with an address in Thousand Oaks,
California;
        The Beneficiary was MERS, “a separate corporation that is acting solely as a
nominee for Lender and Lender’s successors and assigns. MERS is the beneficiary under
this Security Instrument. . . .” The Deed of Trust stated: “TRANSFER OF RIGHTS IN
THE PROPERTY [¶] The beneficiary of this Security Instrument is MERS (solely as
nominee for Lender and Lender’s successors and assigns) and the successors and assigns
of MERS . . . [¶] . . . [¶] Borrower irrevocably grants and conveys to Trustee, in trust,
with power of sale, the following described property . . . . Borrower understands and
agrees that MERS holds only legal title to the interests granted by Borrower in this
Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee
for Lender and Lender’s successors and assigns) has the right: to exercise any or all of
those interests, including but not limited to, the right to foreclose and sell the
Property . . . .”
        The promissory note, labeled “ADJUSTABLE RATE NOTE” began with the
caution: “THIS NOTE CONTAINS PROVISIONS THAT WILL CHANGE THE

                                               3
INTEREST RATE AND THE MONTHLY PAYMENT. . . .” The Note named
America’s Wholesale as Lender. A disclosure statement stated the lender had elected to
name MERS, which operates an electronic mortgage tracking system, and as the
mortgagee in a nominee capacity, but this did not affect plaintiff’s obligation to the
lender under the promissory note.
       In August 2007, Countrywide informed plaintiff her payments would soon triple.
Plaintiff claims she was shocked. She was unable to refinance, contacted Countrywide
about loan modification, and was told modification was for people already in default.
Plaintiff defaulted on the loan beginning in November 2007.
       In January 2008, plaintiff received a NOTICE OF DEFAULT from Countrywide,
stating it was servicing the loan on behalf of the noteholder.
       Plaintiff and Countrywide engaged in discussions about loan modification, but
was told she did not meet investor guidelines.
       In June 2008, plaintiff received a recorded Notice of Default and Election to Sell
under Deed of Trust, naming ReconTrust Company in Simi Valley (not ReconTrust
Company “N.A.” in Thousand Oaks as stated in the Deed of Trust), as agent for the
beneficiary MERS c/o Countrywide under the Deed of Trust. ReconTrust Company in
Simi Valley later registered as a domestic California entity.
       Plaintiff and Countrywide continued discussions about loan modification,
Countrywide offered payment plans, but no agreement was finalized.
       In September 2008, plaintiff received a Substitution of Trustee, substituting
ReconTrust Company (Simi Valley address) as Trustee. Plaintiff also received a Notice
of Trustee Sale, naming ReconTrust Company in Simi Valley as Trustee and “debt
collector.”
       Plaintiff continued seeking loan modification but received a letter from
Countrywide dated February 2, 2009, stating “Countrywide is not delegated by the
investor to perform modifications on the loan.”

                                             4
       In January 2010, plaintiff received a second Substitution of Trustee substituting
ReconTrust Company N.A. in Simi Valley as Trustee. Plaintiff also received a second
Notice of Trustee’s Sale naming ReconTrust Company N.A. as Trustee and “debt
collector” at the Simi Valley address.
       Plaintiff later received a third Notice of Trustee Sale and Substitution of Trustee
naming ReconTrust Company, N.A (Simi Valley address) as Trustee.
       In February 2010, plaintiff hired a forensic auditor.
       In March 2010, plaintiff received a letter from (nonparty) Bank of America Home
Loans, stating plaintiff did not qualify for modification.
       In April 2010, plaintiff sent defendants “Qualified Written Request.” A response
from Bank of America stated there was no obligation to respond to most of the inquiries,
but “the current owner of the Note is Wells Fargo Bank, as Trustee on Behalf of the
Harborview 2006-12 Trust Fund.”
       In February 2011, a Corporation Assignment of Deed of Trust was recorded,
assigning all beneficial interest in the Deed of Trust, together with the Note, to BAC
Home Loans Servicing, LP, fka [formerly known as] Countrywide Home Loans
Servicing, LP for the Harborview 2006-12 Trust Fund.
       Meanwhile, plaintiff filed her original complaint on March 3, 2010, for
“MONETARY DAMAGES, STATUTORY DAMAGES, PUNITIVE DAMAGES,
INJUNCTIVE RELIEF AND DECLARATORY RELIEF,” alleging (1) fraud, (2)
intentional misrepresentation, (3) violation of section 2923.6 (loan modification), (4)
violation of section 1572 (fraud), and (5) violation of Business and Professions Code
section 17200 (unfair business practices). The trial court sustained a demurrer with leave
to amend, stating the fraud and misrepresentation claims “failed to plead any facts
constituting fraud with sufficient particularity. [¶] The allegations focus on
enforceability, transfer and possession of the promissory note without alleging untrue
statements by any defendants. [¶] Additionally, the complaint fails to comply with the

                                              5
heightened pleading requirements required to allege fraud against any entity. It is a high
standard. [¶] The third cause of action for violation of Civil Code 2923.6 fails to state a
claim for relief. Nothing in 2923.6 creates a private right of action in the borrower to
force the lender to make a loan modification, particularly on terms unilaterally proposed
by the plaintiff. That is not allowed under that [C]ode. [¶] The fifth cause of action fails
to state a claim in that no underlying predicate violation of law is alleged. Insufficient
facts are stated to support claims of unfair or fraudulent practices.”
       In November 2010, plaintiff filed a first amended complaint, adding new
defendants, new factual allegations, and new claims about predatory lending using false
appraisals and securitization and sale of plaintiff’s loan on the secondary market.
       In April 2011, the trial court granted defendant’s motion to strike the first
amended complaint as exceeding the scope of leave to amend, gave plaintiff another
chance to amend, and dismissed the demurrer as moot. Plaintiff filed an ex parte
application to add new defendants, claims, and theories -- which the trial court denied.
       In May 2011, plaintiff filed the second verified amended complaint which is the
operative pleading in this appeal. The second amended complaint alleges five causes of
action: (1) fraud, (2) intentional misrepresentation, (3) violation of section 2926.2, (4)
violation of section 1572 (fraud), and (5) violation of Business and Professions Code
section 17200.
       The first cause of action for fraud alleges defendants intended to defraud plaintiff
and foreclose on her home without proper authority and necessary documents. Whereas
the Deed of Trust names ReconTrust Company, N.A. in Thousand Oaks, California, as
Trustee, the Notice of Default recorded June 16, 2008, was issued by a “totally different
company” -- ReconTrust Company in Simi Valley. There was no valid assignment to the
Simi Valley entity, because the various Substitutions of Trustees were unsigned, undated,
unrecorded, and/or included or omitted “N.A.” as if it did not matter. Although the full
Deed of Trust attached to the original complaint stated MERS had broad authority as

                                              6
nominee for the lender and lender’s assigns, the second amended complaint alleged the
Deed of Trust did not authorize MERS to substitute the trustee.
       The complaint alleges the Notices of Trustee Sale are null and void because they
are undated, unsigned by an authorized person, unrecorded, omit “N.A.” from some
references to ReconTrust, and/or misstate the amount owed.
       Plaintiff alleges the Corporation Assignment of Deed of Trust recorded on
February 4, 2011, is invalid because the notary public is located in California, but MERS
is not. The document states it transfers all beneficial interest together with the Note, but
the Note had already been sold to investors.
       Plaintiff alleges none of the defendants have standing to conduct a nonjudicial
foreclosure. Plaintiff also alleges defendants violated Penal Code sections 115 and 115.5,
which criminalize the recording of false documents.
       The second cause of action for intentional misrepresentation alleged defendants
conspired to defraud plaintiff, misrepresented Countrywide as the lender, concealed the
identity of the true lender, and lured her into default by promising her help with loan
modification.
       The third cause of action alleges the Bank defendants violated section 2923.6 by
failing to perform a comparative calculation between loan modification and net value
through foreclosure.
       The fourth cause of action alleges defendants violated section 1572 (actual fraud)
by (1) failing to disclose facts as to who were the real parties, (2) committing appraisal
fraud by using an inflated value when making the loan, and (3) by violating underwriting
standards by granting risky loans at the time plaintiff obtained her loan.
       The fifth cause of action alleges defendants committed unfair business practices
and unfair competition in violation of Business and Professions Code sections 17200 and
17500, by predatory lending practices, misleading advertising, processing money from

                                               7
unknown sources in violation of the Patriot Act, concealing material facts, recording false
documents, and luring plaintiff into default.
       The second amended complaint adds allegations apparently directed at an
unpleaded predatory lending claim. Plaintiff alleges Countrywide sold her loan in 2006
as a “mortgage backed security” to Wells Fargo Bank, N.A., as Trustee on Behalf of the
Harborview 2006-12 Trust Fund. Plaintiff alleges defendants lured her into a predatory
loan by false appraisals, violation of underwriting standards, and intent to sell mortgages,
including plaintiff’s mortgage, above their actual values to bilk investors, knowing the
scheme would result in a liquidity crisis. Plaintiff alleges Countrywide lacked power to
modify her loan, and defendants’ concealment of the true owner deprived her the
opportunity to negotiate loan modification with that owner. The pleading alleges none of
the defendants are holders of the Note or nonholders entitled to payment under
Commercial Code sections 3301 and 3309.
       Plaintiff also alleges Bank of America “being a servicer is trying now to recreate
the paperwork (false and sham docs and assignments with robo-signatures) attempting, at
the middle of litigation, to create standing for [defendants] . . . .” Plaintiff alleges “robo-
signers” are illegal, rendering documents void. Plaintiff alleges “there likely also exists
evidence that the Note already been [sic] paid off by credit default swaps purchased by
the mortgage pool,” which may give some insurance a subrogation claim, not these
defendants.
       The second amended complaint asks for declaratory relief, damages, and an order
enjoining defendants from proceeding with the foreclosure.
       Defendants moved to dismiss or strike the second amended complaint, on the
grounds it defied the court’s prior rulings by “burying” new claims and theories.
Defendants demurred to the second amended complaint on the grounds it does not state
facts sufficient to constitute a cause of action, and the entire complaint is uncertain,
ambiguous, and unintelligible.

                                                8
       Before the hearing on the demurrer and motion to strike the second amended
complaint, plaintiff in July 2011 filed a motion for sanctions (Code Civ. Proc., § 128.7)
against defense counsel, on the ground the demurrer and motion to strike the first
amended complaint falsely stated plaintiff’s loan was never sold on the secondary
market, contradicting plaintiff’s allegations of predatory lending. In opposition to the
sanctions motion, the defense did not dispute the statement was false but asserted defense
counsel “did not have sufficient information to know that these statements were not
accurate”; and it did not matter because that was not the basis for the trial court’s ruling.
Defendants noted the statute allows a party to avoid sanctions by correcting or
withdrawing the offending filing, but their false statement appeared only in superseded
filings that defendant could no longer correct or withdraw, since the court had already
stricken the first amended complaint.
       On October 24, 2011, the trial court sustained the demurrer to the second amended
complaint without leave to amend, ruled the motion to strike was moot, and denied
plaintiff’s motion for sanctions. The court took judicial notice of the existence and
recorded status of documents. The court denied plaintiff’s request for judicial notice of
federal consent orders. The court ruled (1) the fraud-based claims fail due to lack of
specificity, (2) the challenge to defendants’ standing fails as a matter of law, (3) section
2923.6 neither requires the lender to modify the loan nor affords plaintiff a private right
of action, (4) no facts of unfair competition are alleged, (5) the entire pleading is
uncertain, ambiguous, and unintelligible, and (6) plaintiff failed to allege tender. Though
the trial court faulted plaintiff for repeating new allegations in violation of prior rulings,
the trial court concluded the motion to strike was moot.
       The court denied plaintiff’s motion for sanctions, noting plaintiff did not file the
motion until it was too late for defendants to correct or withdraw the filings in which the
false statement appeared.

                                               9
       In November 2011, plaintiff filed an application for reconsideration of the rulings
or, in the alternative, leave to amend the complaint again. Plaintiff submitted three
documents: (1) A letter dated April 20, 2011, from a law firm stating the current owner of
the promissory note is BAC Home Loans Servicing, LP (BAC), (2) an undated letter
from Bank of America stating that effective July 1, 2011, servicing of home loans from
BAC transfers to Bank of America and the debt is owed to Wells Fargo (Harborview
2006-12), and (3) a settlement check and letter from a case entitled FTC v. Countrywide,
in which plaintiff received a settlement payment. The trial court denied the application.
       Plaintiff appeals from the ensuring judgment of dismissal entered in February
2012. In May 2013, we denied plaintiff’s request for judicial notice of a Notice of
Rescission of Declaration of Default.

                                         DISCUSSION

                                               I

                                        Preliminaries

       Plaintiff begins her appellate brief by asserting her “language for all business
transactions is Russian/Ukrainian,” and English places her at a disadvantage in
understanding documents. Yet her verified complaint states she is a real estate broker
and worked for Coldwell Banker for nine years, and she told the trial court she has a real
estate license which she would lose if she violated California law.
       Plaintiff next cites federal authorities for the proposition that a pro. per. plaintiff’s
pleading may not be held to the same standard as pleadings prepared by attorneys.
(Haines v. Kerner (1972) 404 U.S. 519, 520-521 [30 L. Ed. 2d 652]; Jenkins v. McKeithen
(1969) 395 U.S. 411, 421 [23 L. Ed. 2d 404]; Puckett v. Cox (6th Cir. 1972) 456 F.2d 233,
236; Picking v. Pennsylvania R. Co. (3d Cir. 1945) 151 F.2d 240, 244, overruled on other
grounds in Bauers v. Heisel (3d Cir. 1966) 361 F.2d 581.) However, most of the cited
cases involved prisoners who did not have access to counsel, and the United States

                                              10
Supreme Court has since explained: “While we have insisted that the pleadings prepared
by prisoners who do not have access to counsel be liberally construed [citations and fn.
omitted], and have held that some procedural rules must give way because of the unique
circumstance of incarceration [citation] . . . , we have never suggested that procedural
rules in ordinary civil litigation should be interpreted so as to excuse mistakes by those
who proceed without counsel. [Fn. omitted.] As we have noted before, ‘in the long run,
experience teaches that strict adherence to the procedural requirements specified by the
legislature is the best guarantee of evenhanded administration of the law.’ [Citation.]”
(McNeil v. United States (1993) 508 U.S. 106, 113 [124 L. Ed. 2d 21].) And Picking,
supra, 151 F.2d at p. 244, merely said it would disregard “technicalities” -- inept pleading
in 154 paragraphs difficult to follow and understand -- in a complaint raising
constitutional claims, prepared by a pro se litigant who was also an attorney. Federal
circuit court of appeal opinions are not binding on us. (Alicia T. v. County of Los Angeles
(1990) 222 Cal. App. 3d 869, 879 (Alicia T.).)
       The rule in California is that pro. per. litigants are held to the same standards as
lawyers. (Kobayashi v. Superior Court (2009) 175 Cal. App. 4th 536, 543.) “A doctrine
generally requiring or permitting exceptional treatment of parties who represent
themselves would lead to a quagmire in the trial courts, and would be unfair to the other
parties to litigation.” (Rappleyea v. Campbell (1994) 8 Cal. 4th 975, 984-985.)

                                              II

                                         Demurrer

                                   A. Standard of Review

       On review of a dismissal following demurrer, we independently review the ruling
on demurrer and determine de novo whether the complaint alleges facts sufficient to state
a cause of action. (Parthemore v. Col (2013) 221 Cal. App. 4th 1372, 1378.) In doing so,
we give the complaint a reasonable interpretation, reading it as a whole and its parts in

                                             11
their context. (Ibid.) We treat the demurrer as admitting all material facts properly
pleaded, but we do not assume the truth of contentions, deductions or conclusions of law.
(Ibid.)
          “In order to prevail on appeal from an order sustaining a demurrer, the appellant
must affirmatively demonstrate error. Specifically, the appellant must show that the facts
pleaded are sufficient to establish every element of a cause of action and overcome all
legal grounds on which the trial court sustained the demurrer. [Citation.]” (Intengan,
supra, 214 Cal.App.4th at p. 1052.) “We will affirm the ruling if there is any ground on
which the demurrer could have been properly sustained. [Citation.]” (Ibid.)
          If we find that an amendment could cure the pleading’s defects, we must find the
trial court abused its discretion in denying leave to amend, but the plaintiff bears the
burden of proving an amendment would cure the defect. (Gomes v. Countrywide Home
Loans, Inc. (2011) 192 Cal. App. 4th 1149, 1153 (Gomes).)

                                            B. Tender

          We first reject defendants’ contention that the lawsuit is barred by plaintiff’s
failure to tender the amount of the indebtedness.
          The sale of the property has not yet occurred. “While the tender requirement may
apply to causes of action to set aside a foreclosure sale, a number of California and
federal courts have held or suggested that it does not apply to actions seeking to enjoin a
foreclosure sale--at least where the lenders had allegedly not complied with a condition
precedent to foreclosure. . . .” (Intengan, supra, 214 Cal.App.4th at pp. 1053-1054.)
          Defendants cite only one case applying the tender rule where the plaintiffs sought
to prevent a foreclosure sale -- Arroyo v. Aurora Bank, FSB (C.D. Cal. 2012) 2012 WL
137854 (Arroyo). But it is an unpublished order of a federal district court judge, denying
a plaintiff’s request for preliminary injunction. The judge cited only a case involving an
action to set aside a foreclosure sale; the judge then simply stated, without analysis or

                                                12
supporting authority, that the same rule applies in actions to avoid foreclosure. The
unpublished case has no precedential value. Lower federal court opinions are not binding
on us. (Alicia T., supra, 222 Cal.App.3d at p. 879.) While we may consider unpublished
federal opinions if, despite their lack of precedential value, we find them persuasive (City
of Hawthorne ex. rel. Wohlner v. H&C Disposal Co. (2003) 109 Cal. App. 4th 1668, 1678,
fn. 5), the lack of analysis in Arroyo leaves it with no persuasive value at all.
       Lack of tender does not preclude this lawsuit.

                         C. Fraud and Misrepresentation Claims

       The elements of fraud and intentional misrepresentation are a false representation
of a material fact or concealment by a party under a duty to disclose, with intent to induce
reliance, justifiable reliance by the plaintiff, and resulting damage. (West v. JPMorgan
Chase Bank, N.A. (2013) 214 Cal. App. 4th 780, 792.) Each element must be pleaded with
specificity. (Ibid.)
       Section 2923.3 authorizes “a mortgagee, trustee, beneficiary, or authorized agent”
to provide the notice of default and notice of sale. Section 2924a provides: “If, by the
terms of any trust or deed of trust a power of sale is conferred upon the trustee, the
attorney for the trustee, or any duly authorized agent, may conduct the sale and act in the
sale as the auctioneer for the trustee.” Here the Deed of Trust -- on a page omitted from
the attachments to the second amended complaint but included as an attachment to the
original complaint -- confers the power of sale on the trustee. The Deed of Trust also
authorizes the Lender to change trustees and requires recording of the substitution.
       Plaintiff argues Countrywide concealed the identity of the real creditor, and none
of defendants had the right to foreclose because none is the lender, beneficiary with
power of sale, a legally appointed trustee, or authorized agent. According to plaintiff,
defendants lack standing because purported assignments and substitutions were void as
false, fabricated, and forged documents, leaving a defect in the chain of title.

                                              13
        However, we need not address the parties’ arguments on these points because, in
nonjudicial foreclosures, homeowners cannot prevent a sale of the property by a
preemptive court action challenging irregularities in the transfer of rights and obligations
under assignments and substitutions and seeking a judicial determination whether the
person initiating the foreclosure process is authorized to do so. (Siliga v. Mortgage
Electronic Registration Systems, Inc. (2013) 219 Cal. App. 4th 75, 82.) A preeemptive
suit is one that seeks to create an additional requirement for the foreclosing party, apart
from the comprehensive statutory requirements, by requiring the foreclosing party to
demonstrate in court that it is authorized to initiate a foreclosure. (Ibid.; see also, Jenkins
v. JPMorgan Chase Bank, N.A. (2013) 216 Cal. App. 4th 497, 511 (Jenkins) [defects in
transfer of a promissory note do not allow homeowners to challenge nonjudicial
foreclosure, because the homeowner’s obligation remains the same, even if subsequent
assignments were invalid]; Gomes, supra, 192 Cal.App.4th at p. 1155 [notice of default
may be recorded by trustee, mortgagee, beneficiary, or any of their authorized agents].)
The recognition of a right to sue to determine a nominee’s authorization would
fundamentally undermine the nonjudicial nature of the process and introduce the
possibility of lawsuits filed solely for purpose of delaying valid foreclosures. (Gomes,
supra, 192 Cal.App.4th at p. 1155.)
        Here plaintiff seeks not only to prevent foreclosure but also to recover damages
for fraud, including loss of equity in her house, loss of income, reduced credit scores,
costs related to protecting herself, as well as emotional distress and glaucoma attacks.
However, these alleged damages arose from adjustment of the interest rate, not from any
irregularities in assignments, and plaintiff fails adequately to allege justifiable reliance or
causation.
        Plaintiff also argues defendants misrepresented the true amount owed on the Note,
but since she does not allege tender, she fails to explain how this allegation states a claim
for relief.

                                              14
       Accordingly, plaintiff fails to show any basis for the fraud and misrepresentation
claims.

                                       D. Other Claims

       As to plaintiff’s claim that the bank defendants violated a supposed statutory duty
under section 2923.6 to modify the loan if it will yield a greater profit than foreclosure,
plaintiff fails to show a viable claim. Section 2923.6 merely states “any duty that
mortgage servicers may have to maximize net present value under their pooling and
servicing agreements is owed to all parties in a loan pool, or to all investors under a
pooling and servicing agreement, not to any particular party . . . and . . . a mortgage
servicer acts in the best interests of all parties to the loan pool or investors in the pooling
and servicing agreement if it agrees to or implements a loan modification or workout plan
for which” the loan is in default and anticipated recovery under a loan modification
exceeds anticipated recovery through foreclosure on a net present value basis. (§ 2923.6,
subd. (a).) A homeowner has no private right of action under this statute, which “merely
expresses the hope that lenders will offer loan modifications on certain terms.” (Mabry v.
Superior Court (2010) 185 Cal. App. 4th 208, 222, fn. omitted.) Nor has plaintiff shown
entitlement to pursue a section 2923.6 claim to demand proof that Countrywide submitted
her loan modification to Wells Fargo, as she asserts in her reply brief.
       At oral argument, plaintiff suggested Countrywide told her to stop payments so
she could obtain loan modification. The statement of facts in her appellate brief asserted
Countrywide “instructed” her (emphasis omitted) to stop paying in order to qualify for
loan modification, “luring” her into default. The complaint claimed defendants “lured”
her into default by promising modification if she stopped paying. However, the appellate
brief offers no analysis to develop this point, and we may therefore disregard it. (Badie v.
Bank of America (1998) 67 Cal. App. 4th 779, 784-785.) Moreover, plaintiff’s insinuation
of a promise by Countrywide is not borne out by the specific factual allegations of the

                                              15
complaint which merely asserted: “Plaintiff called on [August 23, 2007] and talked to
Heather, Countrywide’s representative, who clearly stated that the Lender cannot do
modification unless the Borrower is at least ‘three months behind on her payments.’ [¶]
. . . A few days later on August 27, 2007 Plaintiff called Countrywide again and spoke
with account manager Kathleen Kramer who confirmed that in order to apply for a loan
modification the applicant has to be 90 days behind on the payments. Given her
conversations with both Countrywide employees who told [plaintiff] that [she] must be
delinquent to qualify for modification, she had no other option but default on the
mortgage payments beginning in November of 2007.” There was no factual allegation in
the complaint and no analysis in the appellate brief supporting an actionable claim on this
point.
         As to the unfair competition claim, plaintiff admits on appeal that it is based on the
same facts as the other causes of action. The unfair competition claim fails, because it
must be based on violation of a specific underlying law (Cel-Tech Communications, Inc.
v. Los Angeles Cellular Telephone Co. (1999) 20 Cal. 4th 163, 180), and no such violation
is properly pleaded in this case.
         Plaintiff says the trial court violated her due process rights to property, by
depriving her of the opportunity for a fair hearing on the merits. However, she did have a
fair hearing on the demurrer. Moreover, we disregard the constitutional claim because
plaintiff has forfeited it by failing to provide supporting analysis or authority. (Kim v.
Sumitomo Bank (1993) 17 Cal. App. 4th 974, 979.)
         Plaintiff, by lack of supporting analysis or authority, similarly forfeits her claim
that she is entitled to declaratory relief to identify who owns the Note and Deed of Trust
and who has the right to proceed with nonjudicial foreclosure. Moreover, such relief
would undermine the nonjudicial nature of the process.
         Plaintiff fails to show grounds to reverse the order sustaining the demurrer.

                                               16
                                    E. Leave to Amend

       Plaintiff contends the trial court erred by denying her leave to amend the second
amended complaint. We conclude she fails to show grounds for reversal.
       If an amendment could cure the defect, then denial of leave to amend constitutes
an abuse of trial court discretion. (Gomes, supra, 192 Cal.App.4th at p. 1153.) In order
to obtain leave to amend on appeal, plaintiff has the burden of proving that an
amendment would cure the pleading’s defects. (Ibid.) Such a showing can be made for
the first time on appeal. (Id. at pp. 1153-1154.)
       In plaintiff’s opening brief on appeal, under the heading of leave to amend, it is
not clear what amendment plaintiff proposes to avoid dismissal. She rehashes points
already discussed. Under the separate heading that defendants lack standing, plaintiff
asserts the recorded assignments violate federal law, but she does not seek leave to add
any such claims, nor does she show she could plead facts sufficient to meet all elements
of such claims. In the Introduction to her appellate brief, she speaks of predatory lending,
mortgage backed securities, robo-signing, and federal authorities’ asserted censure of
such activities. Her second amended complaint alleges that in April 2011 -- after she
filed her original complaint in March 2010 -- federal agencies found deficiencies in the
mortgage and foreclosure practices of MERS and Bank of America and entered Consent
Cease and Desist Orders. She alleges her auditor informed her in May 2010 that she was
a victim of predatory lending in violation of federal and state law, and an October 2011
audit revealed fraud. She alleges she reported the fraud to the Secretary of State,
California’s Attorney General, and the county District Attorney in January 2011. In
February 2011, the assignment of the Deed of Trust executed by MERS to BAC Home
Loans, formerly known as Countrywide, for the Harborview Trust, was recorded. In her
reply brief, plaintiff argues the “new material fact” that the loan was sold on the
secondary market warrants amendment.

                                             17
       In her reply brief, plaintiff claims she fashioned her second amended complaint in
reliance on defendant’s falsehood, and the judgment was based on the falsehood.
Plaintiff believes defendants’ admission on appeal that the statement was “incorrect”
opens the door for her to amend. We disagree. The trial court struck the first amended
complaint because it exceeded the scope of leave to amend. The falsehood was
immaterial at the demurrer stage of proceedings, where the court assumes the truth of the
complaint’s allegations. (Intengan, supra, 214 Cal.App.4th at p. 1052.)
       If plaintiff seeks leave to amend to add a new claim for predatory lending, she fails
to meet her burden on appeal. When granted leave to amend after a demurrer, the
plaintiff may not add a new cause of action without having obtained permission to do so,
unless the new cause of action is within the scope of the order granting leave to amend.
(Harris v. Wachovia Mortgage, FSB (2010) 185 Cal. App. 4th 1018, 1023.) While there is
a policy of great liberality in permitting amendments to pleadings (Berman v. Bromberg
(1997) 56 Cal. App. 4th 936, 945 (Berman)), a plaintiff seeking reversal when amendment
is denied must make a reasonable showing of prejudice from the ruling. (Ibid.)
       Claims for predatory lending are authorized by Financial Code sections 4970 to
4979.8, which “comprehensively regulate[] predatory lending practices in home
mortgages.” (American Financial Services Assn. v. City of Oakland (2005) 34 Cal. 4th
1239, 1254 [state statutes preempt city ordinance].) However, on appeal plaintiff does
not address the legal requirements for such a claim and fails to show she can plead facts
sufficient to state a cause of action for predatory lending.
       Plaintiff fails to show how amendment of the complaint could survive demurrer.
       Plaintiff fails to show grounds to reverse the judgment of dismissal.

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                                             III

                              Denial of Motion for Sanctions

       Plaintiff claims the trial court erred in denying her motion for sanctions against
defense counsel for falsely stating that plaintiff’s loan had not been sold on the
secondary market. We disagree.
       We generally apply the abuse of discretion standard in reviewing a trial court’s
ruling on a motion for sanctions under Code of Civil Procedure section 128.7.
(Martorana v. Marlin & Saltzman (2009) 175 Cal. App. 4th 685, 698.) But the availability
of sanctions under the statute in connection with undisputed facts is a question of law
subject to de novo review. (Ibid; Li v. Majestic Industry Hills LLC (2009)
177 Cal. App. 4th 585, 591 (Li).)
       Code of Civil Procedure section 128.7, subdivision (c)(1) states that the notice of
motion shall be served “but shall not be filed with or presented to the court unless, within
21 days after service of the motion, or any other period as the court may prescribe, the
challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or
appropriately corrected. . . .” The purpose of the statute is remedial, not punitive. (Li,
supra, 177 Cal.App.4th at p. 591.) “By including the safe harbor in [Code of Civil
Procedure] section 128.7, the Legislature intended to foster compliance with its
provisions and to conserve judicial resources otherwise spent adjudicating a sanctions
motion by affording a prescribed period of time during which a party may correct or
withdraw a frivolous or improper pleading or motion without any penalty. [Citation.] If
the merits of the objectionable document are resolved by the court prior to the expiration
of the safe harbor period, there is nothing left to correct or withdraw, thereby
undermining the remedial purpose of the safe harbor provision. . . .” (Id. at pp. 593-594
[reversed sanctions award for frivolous motion to vacate, where motion to vacate was
heard and decided before expiration of the safe harbor period].)

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        Defense counsel made the false statement only in the demurrer and motion to
strike the first amended complaint. Plaintiff did not serve the sanction motion until after
the trial court had stricken the first amended complaint and plaintiff had filed the second
amended complaint. After an amended pleading is filed, courts generally disregard the
earlier pleading. (Berman, supra, 56 Cal.App.4th at p. 945.) There was no pending filing
that defendants could correct or withdraw.
        Plaintiff fails to show grounds for reversal of the order denying sanctions.

                                        DISPOSITION

        The judgment of dismissal and the order denying sanctions are affirmed.
Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1)-
(2).)

                                                         HULL                  , Acting P. J.

We concur:

        MURRAY               , J.

        DUARTE               , J.

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