Court Opinion

ID: 7797168
Source: CourtListenerOpinion
Date Created: 2022-08-02 18:01:47.248162+00
Date Added: 2024-06-11T16:28:33.221455
License: Public Domain

Filed 8/2/22 1197 West 39th Street v. Seterus 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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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has not been certified for publication or ordered published for purposes of rule 8.1115.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

 1197 WEST 39TH STREET, LLC,                                      B299994

           Plaintiff and Appellant,                               (Los Angeles County
                                                                  Super. Ct. No. BC620025)
           v.

 SETERUS, INC. et al.,

           Defendants and Appellants.

      APPEALS from a judgment and postjudgment order of the
Superior Court of Los Angeles County, Rupert A. Byrdsong,
Judge. Judgment reversed. Postjudgment order denying
attorney fees affirmed.
      Leonard, Dicker & Schreiber, Richard C. Leonard and
Kevin S. Dicker for Plaintiff and Appellant.
      The Ryan Firm, Timothy M. Ryan, Andrew J. Mase and
Tadeusz McMahon for Defendants and Appellants Seterus, Inc.
and Federal National Mortgage Association.
                  ______________________________
       Plaintiff 1197 West 39th Street, LLC (the Company)
purchased from the trustee of Stanley Simmons’s bankruptcy
estate property encumbered by a deed of trust securing a loan to
Simmons. The Company sued Federal National Mortgage
Association (Fannie Mae)—the deed of trust’s successor
beneficiary—and Fannie Mae’s loan servicer, Seterus, Inc.
(collectively the Fannie Mae parties), for declaratory relief to
determine the amount required to pay off the loan. It also sued
Fannie Mae for damages for an alleged refusal to provide certain
information in violation of Civil Code section 2943.1
       After a bench trial the trial court entered judgment in favor
of the Company. On the declaratory relief cause of action, the
court determined the amount due to be $185,107.69. On the
cause of action for a violation of section 2943, the court awarded
the Company $88,850 in damages jointly and severally against
the Fannie Mae parties. Although the court found the Company
to be the prevailing party entitled to its costs of suit, including
attorney fees if applicable, it denied the Company’s motion for
attorney fees.
       The Fannie Mae parties appeal the judgment on a variety
of grounds, including the bankruptcy court had exclusive
jurisdiction over the Company’s action; the cause of action for
violation of Civil Code section 2943 was preempted by federal
law; and the Company failed to establish the elements required
by Code of Civil Procedure section 1060 for declaratory relief.2

1     Undesignated statutory references are to the Civil Code
except in section 4 of the Discussion.
2     The Fannie Mae parties, contending the Company failed to
establish the existence of an actual controversy necessary to
succeed on its declaratory relief cause of action, argued in the

                                 2
The Company appeals the trial court’s postjudgment order
denying attorney fees.3 We reverse the judgment and affirm the
postjudgment order denying attorney fees.
       FACTUAL AND PROCEDURAL BACKGROUND
      1. The Complaint and First Amended Complaint
      On May 11, 2016 the Company filed this action for
declaratory relief against the Fannie Mae parties to determine
the amount due on the secured loan that had been made to
Simmons. On July 13, 2016 the Fannie Mae parties demurred to
the complaint asserting that the Company, because it was not the
borrower and had neither personal liability under the loan nor a
contractual relationship with the Fannie Mae parties, lacked
standing to pursue the matter and also that they were prohibited
by law, including federal privacy laws, from sharing information
with the Company absent authorization from Simmons, the
borrower. The demurrer was noticed for hearing on February 17,
2017. On September 2, 2016 the Company filed a first amended
complaint that added a second cause of action against only
Fannie Mae for violation of section 2943.
      In its first amended complaint the Company alleged its
lawsuit involved a deed of trust recorded on August 4, 2005
against property located at 1197 West 39th Street in Los Angeles

trial court, and asserted at least inferentially on appeal, that the
Company lacked standing to seek a determination of the
outstanding amount due on the loan to Simmons, which was
secured by the deed of trust. At our request, the parties
submitted supplemental briefing on the issue of standing.
3    On March 11, 2020 we granted the Company’s unopposed
motion to consolidate the two appeals.

                                  3
that secured a loan to Simmons in the original sum of $285,000
at an interest rate of 5.625 percent. The deed of trust and
underlying loan changed hands several times but were eventually
assigned to Fannie Mae, which hired Seterus to service the loan.
Simmons filed for bankruptcy, and ownership of the property
passed to his bankruptcy estate. On November 23, 2015 the
Company purchased the property from the bankruptcy trustee
subject to the deed of trust. On or about December 2, 2015 the
Company began contacting the Fannie Mae parties to learn the
outstanding loan amount.
       The Fannie Mae parties provided a demand dated
January 8, 2016, addressed to Simmons and attached as an
exhibit to the first amended complaint, which stated the amount
required to reinstate the loan to a current status was $32,539.81
if received between January 8, 2016 and February 5, 2016. The
demand indicated that reinstatement amount was comprised of
$24,693.90 in past due principal and interest payments;
$7,449.39 in tax and insurance payments; actual charges through
February 5, 2016 (including one $411.92 entry with a due date in
May 2015 for “PSLGLPOSTINGCOST”); estimated charges
through February 5, 2016; and a subtraction (-$209.52) for
“Suspense Funds.” The January 8, 2016 demand stated the
unpaid principal balance was $212,101.76.
       The first amended complaint noted the January 8, 2016
demand did not further divide the $24,693.90 amount between
principal and interest, and the $7,449.39 amount between tax
and insurance. The Company alleged it had paid all property
taxes due from the date it took title and it had also purchased
insurance and an umbrella policy of $5 million. It questioned the
charges on the demand as unsupported and contended the May

                                4
2015 charge of more than $400 for posting costs violated an
automatic stay issued by the bankruptcy court.
        The Company alleged it wired $32,539.81 to Seterus on
February 4, 2016, and on February 26, 2016 sent another $5,000,
which Seterus accepted. Since February 26, 2016 Seterus either
refused to cash the Company’s checks or, when the Company paid
electronically, returned money to the Company’s account.
Although the Company submitted payments totaling $180,000
between April 1 and April 14, 2016, all of the payments were
returned or not cashed. The Company sent a replacement check
in the amount of $180,000.
        On March 30, 2016 Seterus sent a new demand, addressed
to Steven Schuman of Leonard, Dicker & Schreiber LLP and also
attached as an exhibit to the first amended complaint, that set
forth a payoff amount rather than a reinstatement amount. The
demand explained that “the amount required to pay your loan in
full is $213,429.17,” a “payoff figure” that was “good through
April 22, 2016,” with funds received after April 22, 2016
“requir[ing] an additional $32.18 interest per day.” The Company
alleged the March 30, 2016 demand contained unsupported
amounts that it disputed were owed. It also alleged the Fannie
Mae parties refused to provide any back-up or explanation for the
charges in either of the demands. It further contended interest
should stop running on the amounts tendered by the Company
from the dates of each payment even though the Fannie Mae
parties had refused to accept and/or returned the funds. The
Company sought a declaration of the amount due on the loan. It
alleged entitlement to attorney fees pursuant to a paragraph of
the deed of trust and section 1717.

                                5
       The second cause of action alleged section 2943 required
Fannie Mae to provide certain information to the Company
within 21 days of demand—including the balance owed on the
obligation; the amount of the monthly payment; the amount of
the impound or escrow account; the nature and amount of any
expense that Fannie Mae claimed had become a lien on the
property; and the total amount due—but Fannie Mae failed and
refused to provide the information in a timely manner, or at all.
Despite the Company’s continuing requests for an accounting
after filing of its action, the Fannie Mae parties’ counsel refused
to provide further information. The first amended complaint
attached exhibits described as “some of the relevant
correspondence.” On July 21, 2016 Seterus returned the sum of
$178,026.92 to the Company without an explanation. The
Company further alleged, for its second cause of action, it had
been damaged as a result of the rise in interest rates pending
resolution of the matter because it was unable to refinance the
property. It sought compensatory damages and a statutory
penalty.
      2. The Fannie Mae Parties’ Demurrer to the First Amended
         Complaint
      The Fannie Mae parties demurred to the first amended
complaint contending, among a host of other arguments, the
Company failed to allege facts sufficient to establish an actual
controversy because it lacked standing to pursue its action: As
asserted by the Fannie Mae parties, a lender had no duty to
accept a new owner of the collateral property as a borrower, as
shown by title 12 United States Code section 1701j-3’s

                                  6
authorization of “due-on-sale clause[s]”4; section 13 of the deed of
the trust in the case at bar provided in part, “[A]ny Successor in
Interest of Borrower who assumes Borrower’s obligations under
this Security Instrument in writing, and is approved by Lender,
shall obtain all of Borrower’s rights and benefits under this
Security Instrument. Borrower shall not be released from
Borrower’s obligations and liability under this Security
Instrument unless Lender agrees to such release in writing”; the
Company was not a party to, or named as an intended beneficiary
of, the loan secured by the deed of trust and had not assumed
personal liability for the loan, which only reflected a contractual
relationship between Simmons and the Fannie Mae parties; and
federal district courts have held that a nonborrower lacks
standing to challenge a deed of trust solely based on an
ownership interest in the collateral property. For the cause of
action for violation of Civil Code section 2943, the Fannie Mae
parties argued the first amended complaint failed to allege facts
sufficient to show when a written demand for information
required under that statute was made to Seterus or Fannie Mae.
They also contended the March 30, 2016 demand to Schuman
provided information complying with the statute.
       In its opposition the Company argued it did not claim to be
the borrower and neither wanted to assume, nor claimed to have

4     A “due-on-sale clause” is defined for purposes of title 12
United States Code section 1701j-3 as “a contract provision which
authorizes a lender, at its option, to declare due and payable
sums secured by the lender’s security instrument if all or any
part of the property, or an interest therein, securing the real
property loan is sold or transferred without the lender’s prior
written consent.”

                                 7
assumed, the loan. It argued it had standing to assert its
declaratory relief cause of action as owner of the property and
disagreed declaratory relief was available only for claims between
parties to a contract. It also contended its first amended
complaint provided dates and details regarding its attempts to
obtain information. As for the March 30, 2016 payoff demand
statement, the Company argued it was entitled to an accurate
payoff demand statement under section 2943 but the Fannie Mae
parties did not provide accurate information.
       The trial court overruled the demurrer to the declaratory
relief cause of action. The court determined the Company, as
owner of the property, had standing to seek a declaration as to
the amount owed on the lien.
       The court, however, sustained the demurrer to the cause of
action for violation of section 2943 with leave to amend. After
setting forth relevant provisions of that section—including the
statutory requirement a “beneficiary, or his or her authorized
agent,” deliver a beneficiary statement or a payoff demand
statement within 21 days of a written demand by an “[e]ntitled
person,” defined to include the trustor’s or mortgagor’s successor
in interest in the mortgaged or trust property—the trial court,
stating statutory causes of action must be pleaded with
particularity, determined the Company’s claim was unclear and
did not allege when any written demand was made for which the
Fannie Mae parties had allegedly failed timely to respond. The
court also granted the motion to strike attorney fee allegations
with leave to amend, on the ground the Company was not a party
to the loan or deed of trust and did not allege it had assumed, or
substituted in as a party to, either agreement.

                                8
      3. The Operative Second Amended Complaint and the
         Fannie Mae Parties’ Demurrer to the Second Amended
         Complaint and Motion To Strike
       On February 28, 2017 the Company filed the operative
second amended complaint. With two exceptions, the allegations
for the first cause of action for declaratory relief remained the
same, or substantially the same.5
       As for the second cause of action for violation of
section 2943, which the Company continued to assert only
against Fannie Mae, the second amended complaint added new
allegations describing emails to the Fannie Mae parties in May
and June 2016 requesting an accounting and other loan
information. The emails were from Schuman, whom the
Company identified as its counsel. The second cause of action
also contained a new allegation that the Fannie Mae parties’
actions and omissions also constituted “a violation of 12 U.S.C.
§ 2601, entitled Real Estate Settlement Procedures [Act]
(RESPA), the relevant terms of which are largely incorporated by
reference into the Deed of Trust.”6
       The Fannie Mae parties demurred to the second amended
complaint on several grounds. They again argued, with respect

5     The two exceptions were: (1) the addition of an allegation
that the monthly amounts comprising the $7,449.39 in tax and
insurance payments set forth in the January 8, 2016 demand
were impounds and not amounts the Fannie Mae parties had
paid to someone else; and (2) the deletion of the paragraph
regarding entitlement to attorney fees under section 1717 and
the deed of trust.
6     With regard to the prayer for relief for attorney fees,
although the first amended complaint stated entitlement to “costs

                                9
to the declaratory relief cause of action, the Company’s lack of
standing. The Fannie Mae parties also moved to strike the
references to a violation of RESPA and entitlement to attorney
fees. In support of their motion to strike the RESPA reference,
the Fannie Mae parties argued they had removed the action to
federal court based on the Company’s allegation they had
violated RESPA but the Company filed a motion to remand in
which it admitted it was not relying on that allegation as the
basis for any form of relief. The Company’s motion to remand,
which was attached as an exhibit to the Fannie Mae parties’
motion to strike, stated the Company “seeks no enforcement of
RESPA”; there was “no claim for damages under RESPA”; “[t]he
fact that the Deed of Trust happens to incorporate by reference
certain terms of RESPA does not mean that any issue arising
under the Deed of Trust must be—or can be—handled in Federal
Court”; “[a]ll of [the Company’s] claims fall under the Deed of
Trust and Civil Code § 2943”; and, because the case did not
involve a question of federal law, the matter should be remanded
to the state court.
       The Company filed an opposition to the Fannie Mae
parties’ demurrer and motion to strike. The Company asserted
the Fannie Mae parties’ challenges to the declaratory relief cause
of action were already rejected when the trial court overruled
their demurrer to the first amended complaint. In opposing the
motion to strike the RESPA allegation, the Company, attaching a
copy of the district court’s April 10, 2017 order remanding the
action, pointed out that court had determined a fleeting reference

of suit, including attorneys’ fees,” the second amended complaint
added the language “if applicable.”

                                10
to RESPA buried in a cause of action under section 2943 was
insufficient to confer federal question jurisdiction; federal law,
specifically RESPA, did not create the cause of action; and the
Company’s right to relief did not depend on a resolution of the
RESPA allegation. The Company acknowledged its “claims arise
under the deed of trust, not RESPA, as the Federal Court has
already decided,” but argued there was no reason to strike any
reference to RESPA from the second amended complaint.
       On March 5, 2018 the trial court overruled the Fannie Mae
parties’ demurrer to the second amended complaint, but,
granting their motion to strike without leave to amend, struck
the allegation relating to RESPA, as well as the allegation of
entitlement to attorney fees in the prayer for relief.
      4. The Fannie Mae Parties’ Motion for Summary Judgment
         or, in the Alternative, Summary Adjudication
      On April 19, 2018 the Fannie Mae parties moved for
summary judgment, or in the alternative, summary adjudication
on both causes of action. The notice of motion identified
two issues for summary judgment or adjudication: (1) The second
cause of action for a violation of section 2943 was without merit
because “the undisputed facts show that Plaintiff received a
payoff statement dated March 30, 2016, and a beneficiary
statement in July 2016 in response to its singular request for said
statement”; and (2) the first cause of action for declaratory relief
was without merit because “the undisputed facts show that all
charges, fees, and payments made by Plaintiff are accurately
accounted for, and no actual controversy exists as to the amount
required to satisfy the deed of trust.”
      On July 17, 2018 the trial court issued an order denying
the motion. Although the order stated “the refusal to accept

                                 11
partial payment does not provide a basis for declaratory relief”
and “the Reinstatement charge of $411.92,” “the accounting for
the $5,000 payment from February 26, 2016,” and “the escrow
account balance” similarly do “not provide a basis for declaratory
relief or set forth an inaccuracy in the statement,” the court
denied the motion for summary adjudication as to the first cause
of action due to a material factual dispute regarding the
requirement to pay for property insurance. Because of material
fact disputes as to whether the Fannie Mae parties timely
provided accurate payoff and beneficiary statements, the court
denied the motion for summary adjudication as to the second
cause of action.
      5. The Trial
       The bench trial commenced on February 7, 2019. The only
witness who testified in person was Schuman, who, along with
another attorney, also appeared as the Company’s counsel. The
court admitted many of the Company’s exhibits into evidence.
       On February 8, 2019 the Fannie Mae parties sought to
have Rene Burden, a Seterus employee, testify. The Company
objected on the ground another witness, Janisse Hall, had been
produced for deposition as Fannie Mae’s person most
knowledgeable about the loan but Fannie Mae refused to have
Hall appear at trial. (The Fannie Mae parties’ counsel had
explained Hall, as an out of state witness, could not be compelled
to attend the trial.) Counsel for the Fannie Mae parties told the
court Burden was on the witness list, the deposition that had
taken place was for Fannie Mae’s person most knowledgeable,
and the Company had voluntarily withdrawn its request to
depose Seterus’s person most knowledgeable. The Fannie Mae
parties’ counsel, as an offer of proof, stated Burden would testify

                                 12
about Seterus’s practices as a loan servicer and its accounting for
Fannie Mae. He explained Fannie Mae, although an owner of the
loan, was an investor who did not perform accounting for its own
loans; rather, it used servicers like Seterus for the sole purpose of
“keeping the books.”
       The court replied, “No, not going to do that.” The court
stated, “We don’t play fast and loose with, ‘Well, you didn’t ask
for the right name, didn’t ask for the right label.’” Although the
court stated the “obvious cure” was to provide the Company an
opportunity to depose Burden, the court explained, the “problem
is, we’re here in the middle of trial.” After further argument from
the parties’ counsel, the court asked the Fannie Mae parties’
attorney to identify the business records about which the Fannie
Mae parties sought testimony. Among the records identified by
the Fannie Mae parties’ attorney was trial exhibit 217, which was
comprised of account records that had been produced to the
Company. The Company’s attorney objected to the admissibility
of trial exhibit 217 for lack of foundation, and the Fannie Mae
parties’ attorney explained Burden could testify in depth about
the account history and its creation.
       The court told the Fannie Mae parties’ counsel, “I don’t
want the defense to be prejudiced in terms of putting on the case.
So if you deem to put Ms. Burden up for a deposition, after the
deposition we’ll resume the trial.” Asked by the court when he
wanted to take Burden’s deposition, the Company’s attorney
responded he did not wish to take her deposition. The court
stated, “[B]ut I can’t let her testify. Unless you’re not objecting to
her testifying and whatever happens happens.” The Company’s
attorney replied, “I move to exclude her. The court’s denied that

                                  13
and offered me the deposition, so now I’ve got a choice. I either
have to—right now it’s on me.” The court stated, “It is on you.” 7
       The court proposed the parties submit the balance of their
arguments in written briefing for the court to rule on and also
referred to an earlier discussion about the parties submitting
closing arguments in writing. It stated, “I’ll receive whatever and
the parties agree that my statement of decision will be based on
those briefs and the evidence I’ve received today.” The court
clarified the evidence received that day included trial exhibit 217,
which was admitted into evidence. The Company’s counsel
stated he agreed. The court and parties discussed the
admissibility of each of the defense’s additional exhibits, more of
which were admitted into evidence that day.
      6. The Proposed Statement of Decision, the Final Statement
         of Decision, the Fannie Mae Parties’ Objections and the
         Judgment
       The parties submitted their posttrial/closing argument
briefs on February 15, 2019. On April 26, 2019 the trial court
filed its “Proposed Statement of Decision” representing its
“Intended Statement of Decision,” which it explained it was

7      Based on the February 8, 2019 transcript of the court’s
discussion with the parties, the parties on appeal dispute
whether the trial court had excluded Burden from testifying. The
Fannie Mae parties contend the trial court abused its discretion
in prohibiting Burden from testifying. The Company asserts the
trial court had denied the Company’s motion to exclude Burden
and the Fannie Mae parties thus chose not to call Burden to the
stand. The Company also points out it had brought a motion in
limine to exclude evidence not produced in discovery, which it
contends includes Burden’s testimony, and the court never
formally ruled on that motion.

                                 14
submitting pursuant to California Rules of Court,
rule 3.1590(c)(4). The proposed statement of decision indicated
the only witness who testified was Schuman and the defense was
comprised solely of the cross-examination of that witness. The
court attached and incorporated by reference its minute orders
detailing the trial exhibits that had been marked, identified
and/or admitted in the case. The document also stated, “This
Intended Statement of Decision is submitted in an effort to
provide the parties with an understanding of the legal and
factual basis for the Court’s rulings.” Under the heading
“Factual Summary,”8 the court set forth what it described as
“[t]he material, significant facts.” In a separate section titled
“Legal Analysis—Plaintiff’s Cause of Action for Accounting under
Civil Code 2943,”9 the court stated in part, “Plaintiff bought the
property for $22,000 cash subject to a lien of $51,000 and
Defendants’ Deed of Trust. Plaintiff paid $39,512.89 and owes
another $185,107.69. This evidence was unchallenged.” The
court found the Company had sustained damages, discussed its
damages calculation and stated the Company was entitled to
$87,850. It declined to award any statutory penalties under
section 2943, subdivision (e)(4).

8     We have omitted all unnecessary capitalization of letters,
underling and bold-face type in the trial court’s orders, the
parties’ discovery requests and any other documents quoted.
9      Although the introductory paragraphs of the proposed
statement of decision referred to the Company’s two causes of
action as one for an “accounting (declaratory relief)” and another
for “violation of Civil Code Section 2943,” its legal analysis
section did not differentiate between the two causes of action.

                                15
      On April 26, 2019 a minute order was entered that stated,
“The Proposed Statement of Decision will become the final
Statement of Decision unless objections or proposals are received
pursuant to California Rules of Court[, rule] 3.1590(c)(1).” On
May 16, 2019 the trial court filed its “Final Statement of
Decision,” which was substantially the same as its proposed
statement of decision, except it stated the Company was entitled
to $88,850 in damages.10
      On May 20, 2019 the Fannie Mae parties filed objections to
the April 26, 2019 proposed statement of decision on a variety of
grounds. On May 23, 2019 the Fannie Mae parties filed renewed
objections on the same grounds, as well as objections to the
proposed judgment.
      On June 6, 2019 a minute order was entered stating the
Fannie Mae parties’ May 20, 2019 objections, which the trial
court found were “timely filed,”11 were overruled. The trial court
also overruled their May 23, 2019 renewed objections and
objections to the proposed judgment.
      The court entered judgment on June 12, 2019. In its
judgment the court stated, for the first cause of action, it “finds
and determines that the amount due on the First Deed of Trust is
$185,107.69.” For the second cause of action, the court stated it
“finds in favor of [the Company], and against [the Fannie Mae
parties], and awards damages in the sum of $88,850, jointly and

10     In its subsequently entered judgment the court explained
the difference in the amount of damages was due to a
mathematical error in the April 26, 2019 proposed statement of
decision.
11    The proposed statement of decision had been mailed to the
parties’ counsel on a date later than April 26, 2019.

                                16
severally.” (Internal footnote has been omitted.) The court found
the Company to be the prevailing party and entitled to its costs of
suit, “including if applicable attorneys’ fees,” against the Fannie
Mae parties.
                          DISCUSSION
      1. The Fannie Mae Parties Failed To Establish the
         Bankruptcy Court Had Exclusive Jurisdiction over the
         Action
         a. Background facts
       At trial Schuman testified he was one of two managers of
the Company, which was formed in late 2015 for the purpose of
buying a triplex from Simmons’s bankruptcy estate. The
Company bought the property pursuant to an asset purchase
agreement entered into on October 31, 2015 by three parties: the
Company; the trustee for Simmons’s bankruptcy estate; and
Peter Lively, a bankruptcy attorney who was Schuman’s friend
and had told Schuman about the bankruptcy trustee’s attempt to
sell the property. According to the asset purchase agreement’s
recitals, on November 26, 2013, Simmons had filed a voluntary
bankruptcy petition pursuant to chapter 7 of title 11 of the
United States Code; the property, which the bankruptcy trustee
had acquired by setting aside fraudulent transfers in an
adversary proceeding, was among the assets of the bankruptcy
estate; Lively had recorded an abstract of judgment with the
Los Angeles County Recorder’s Office and had a secured claim
against the estate in the approximate amount of $51,000; the
Company wished to purchase the property; and the bankruptcy
trustee wished to resolve Lively’s claim.
       The asset purchase agreement provided the bankruptcy
trustee was to pay $15,000 to Lively upon entry of a final order

                                17
approving that agreement, with the balance of Lively’s claim to
be the Company’s responsibility and Lively having no further
claim against the bankruptcy trustee or the bankruptcy estate.
Upon entry of that final approval order, the bankruptcy trustee
was to execute and deliver a quitclaim deed in favor of the
Company, with the Company purchasing the property on an “as
is” basis, without any representations or warranties. The
effectiveness of the asset purchase agreement was subject to the
approval of the court in which Simmons’s bankruptcy case was
pending. The bankruptcy court’s order was to specify title was
being transferred to the Company, “subject only to the existing
deed of trust recorded on August 4, 2005 as Inst. No. 05-
1860555”—that is, as shown by exhibits admitted at trial, the
deed of trust of which Fannie Mae was the successor
beneficiary—Lively’s abstract of judgment and real property
taxes, if any. The asset purchase agreement provided, “No other
liens shall attach to the Property.” It further provided, “The
parties hereto agree that the United States Bankruptcy Court for
the Central District of California shall have sole and exclusive
jurisdiction, sitting without a jury, to hear and determine and
[sic] disputes that arise under or on account of this Agreement.”
The asset purchase agreement contained signature blocks for the
bankruptcy trustee, Lively and Schuman as the Company’s
managing member.
       On November 23, 2015 the bankruptcy court issued an
order authorizing the bankruptcy trustee to sell the property to
the Company. In conformity with the asset purchase agreement,
the order provided the property was being sold “as is,” without
any representations or warranties, and free and clear of all liens
except for the August 4, 2005 deed of trust, Lively’s abstract of

                                18
judgment and any real property taxes. The bankruptcy trustee
was authorized and empowered to execute and deliver on behalf
of the estate any and all documents as reasonably may be
necessary to implement the terms of the proposed sale. The order
further stated, “The Court shall retain jurisdiction to adjudicate
any disputes that may arise in connection with the sale of the
Property.”
       Subsequently, Schuman was given a quitclaim deed dated
November 24, 2015 that provided the bankruptcy trustee
quitclaimed to the Company all of the bankruptcy estate’s right,
title and interest in the property. The quitclaim deed’s cover
page showed it was recorded December 2, 2015. Schuman
testified he never filed a complaint in the Bankruptcy Court for
the Central District of California to determine the amount of a
lien, nor did he submit any filing in the bankruptcy court to
determine the amount of Fannie Mae’s lien.
         b. The bankruptcy court did not have exclusive
            jurisdiction over the Company’s claims
      The Fannie Mae parties contend on appeal, as they did in
their February 15, 2019 closing brief in the trial court, the trial
court lacked jurisdiction over the Company’s claims because,
pursuant to the provisions of the asset purchase agreement and
the bankruptcy court’s subsequent order, the bankruptcy court
had exclusive jurisdiction over those claims. Specifically, the
Fannie Mae parties argue the Company by its action seeks a
determination of the amount due on Fannie Mae’s lien, which,
they assert, is a “dispute[] that [arose] under or on account of” the
asset purchase agreement and thus within the scope of that
agreement’s exclusive bankruptcy court jurisdiction provision, as
well as a “dispute[] that [has] arise[n] in connection with the sale

                                 19
of the Property” and thus within the scope of the bankruptcy
court’s November 23, 2015 order retaining jurisdiction. This
argument fails as a matter of law.12
       “[T]here is . . . a ‘presumption of concurrent jurisdiction’
between federal courts and state courts.” (Kingston Constructors,
Inc. v. Washington Metropolitan Area Transit Authority (1997)
14 Cal.4th 939, 948.) Although “‘[we] begin[] with the
presumption that state courts enjoy concurrent jurisdiction’”
(Cianci v. Superior Court (1985) 40 Cal.3d 903, 910), “‘Congress
. . . may confine jurisdiction to the federal courts either explicitly
or implicitly. Thus, the presumption of concurrent jurisdiction
can be rebutted by an explicit statutory directive, by
unmistakable implication from legislative history, or by a clear

12     “‘It is . . . solely a judicial function to interpret a written
instrument unless the interpretation turns upon the credibility of
extrinsic evidence.’ [Citation.] When there is no extrinsic
evidence or ‘no conflict’ in such extrinsic evidence as has been
introduced, ‘we must make an independent determination of the
meaning’ of a legal instrument.” (Faus v. City of Los Angeles
(1967) 67 Cal.2d 350, 360; see Garcia v. Truck Ins. Exchange
(1984) 36 Cal.3d 426, 439 [interpretation of a written contract is
“solely a judicial function . . . unless the interpretation turns
upon the credibility of extrinsic evidence, even when conflicting
inferences may be drawn from uncontroverted evidence”];
Gilkyson v. Disney Enterprises, Inc. (2021) 66 Cal.App.5th 900,
915 [“[a]bsent any conflict in extrinsic evidence, we review de
novo issues regarding the proper interpretation of a contract”].)
      The Fannie Mae parties, in asserting in the trial court their
argument the bankruptcy court had exclusive jurisdiction, did not
rely on any disputed extrinsic evidence for the interpretation of
the asset purchase agreement or the bankruptcy court’s
November 23, 2015 order.

                                  20
incompatibility between state-court jurisdiction and federal
interests.’ [Citation.] Put otherwise, ‘the presumption is that
jurisdiction is concurrent, and some strong showing of need for
exclusive jurisdiction is required to overcome that presumption.’”
(Ibid.; accord, Mims v. Arrow Financial Services, LLC (2012)
565 U.S. 368, 378.)
       Here, the Fannie Mae parties do not rely on a statutory
basis to assert the bankruptcy court has exclusive jurisdiction
over the Company’s claims. Indeed, they argue title 28 United
States Code section 1334(b)—which states, except as provided in
a subsection not relevant to this appeal, “notwithstanding any
Act of Congress that confers exclusive jurisdiction on a court or
courts other than the district courts, the district courts shall have
original but not exclusive jurisdiction of all civil proceedings
arising under title 11, or arising in or related to cases under
title 11”—should not control because the Company’s claims in
this action fall within the scope of the asset purchase agreement’s
and November 23, 2015 bankruptcy court order’s provisions
pertaining to jurisdiction.
       As the Company explains, however, the purpose of the
asset purchase agreement, as set forth in its recitals, was to
effectuate the Company’s desire to purchase the property and the
bankruptcy trustee’s desire to resolve Lively’s claim, with no
mention of resolution of any claim over the amount of Fannie
Mae’s lien. The Fannie Mae parties are not parties, the Company
argues, to the asset purchase agreement; and, notwithstanding a
reference to “the existing deed of trust recorded on August 4,
2005 as Inst. No. XX-XXXXXXX,” the Fannie Mae parties
themselves are not even mentioned in the agreement.

                                 21
       One who is not a party to or an intended third party
beneficiary of a contract ordinarily lacks standing to enforce the
contract’s terms. (Berclain America Latina, S.A. de C.V. v. Baan
Company N.V. (1999) 74 Cal.App.4th 401, 405; Eastern Aviation
Group, Inc. v. Airborne Express, Inc. (1992) 6 Cal.App.4th 1448,
1452; see § 1559 [intended third party beneficiary has standing to
enforce contract].) While there are exceptions to this general
principle—for example, a nonsignatory may be able to enforce a
contractual forum selection clause against a signatory if the
nonsignatory was “closely related” to the contractual
relationship, that is, the nonsignatory shared a “defined and
intertwining business relationship with a contracting party” (see,
e.g., Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th
1450, 1458-1462)—nothing in the asset purchase agreement
indicates the Fannie Mae parties had standing to enforce that
agreement. Indeed, the Fannie Mae parties never attempted to
establish they were parties, signatories or intended third party
beneficiaries of the asset purchase agreement, nor did they assert
or attempt to show they shared a defined and intertwining
business relationship with a contracting party or otherwise had
standing to enforce the asset purchase agreement’s terms.
       As for the bankruptcy court’s November 23, 2015 order
authorizing the sale of the property, which also provides the court
retains jurisdiction to adjudicate any disputes that may arise in
connection with the sale, the Fannie Mae parties never argued
they were parties to any proceeding over which the bankruptcy
court had “retained” jurisdiction. In sum, the trial court properly
exercised jurisdiction over the Company’s lawsuit. (See Ventura
v. ABM Industries Inc. (2012) 212 Cal.App.4th 258, 265 [“[t]he
trial court has jurisdiction ‘unless and until’ the defendant proves

                                 22
otherwise”]; People v. Crusilla (1999) 77 Cal.App.4th 141, 146 [“it
is well established that in state courts a claim that jurisdiction
lies elsewhere (i.e., in the federal government) over an offense
that is committed within the boundaries of the state, and that is
defined by state law, is a defensive matter, and the defendant is
required to allege and prove in the trial court ‘“any facts which he
now claims might have had the effect of vesting exclusive
jurisdiction in the federal courts”’”].)
      2. The Company’s Cause of Action for Violation of
         Section 2943 Is Preempted and Must Be Dismissed
       The Fannie Mae parties contend federal law—specifically,
the Home Owners’ Loan Act (12 U.S.C. § 1461 et seq.) (HOLA)
and regulations promulgated pursuant to HOLA by the Office of
Thrift Supervision (OTS)—preempts the Company’s second cause
of action for violation of Civil Code section 2943.13 We agree: The
undisputed facts and facts not reasonably subject to dispute
establish preemption under HOLA.14

13     As with the Fannie Mae parties’ bankruptcy jurisdiction
contention, neither the statement of decision, which purported to
provide the basis for the court’s rulings, nor anything else in the
record indicates the court ruled on the preemption argument,
even though the Fannie Mae parties had set forth that argument
in their closing brief and objected to the proposed statement of
decision for omitting the issue. Even if the trial court had ruled
there was no preemption, we would reverse.
14    Federal preemption presents “a pure question of law”
subject to de novo review. (Farm Raised Salmon Cases (2008)
42 Cal.4th 1077, 1089, fn. 10; accord, Herpel v. County of
Riverside (2020) 45 Cal.App.5th 96, 100; see Spielholz v. Superior
Court (2001) 86 Cal.App.4th 1366, 1371 [“[p]reemption is a legal
issue involving statutory construction and the ascertainment of

                                 23
       As discussed, the Company alleged Fannie Mae, as holder
of the deed of trust securing the loan to Simmons, was required
under section 2943 to provide certain information and disclosures
regarding the loan, such as the amount needed to pay off the
loan, within 21 days of the Company’s demand, but Fannie Mae
failed to respond timely or at all. The deed of trust, an exhibit
admitted at trial, is dated July 29, 2005; identifies the lender as
“IndyMac Bank, F.S.B., a federally chartered savings bank”;
provides, “Lender is a Federal Savings Bank organized and
existing under the laws of the United States of America”; defines
“Loan” as “the debt evidenced by the Note,” plus other amounts
such as interest and any late charges; and defines “Note” as “the
promissory note signed by Borrower and dated July 29, 2005.”
Similarly, the promissory note, also an admitted trial exhibit, is
dated July 29, 2005 and identifies the lender as “IndyMac Bank,
F.S.B., a federally chartered savings bank.” The Company did
not dispute IndyMac Bank was the original lender and was at the
time a federally chartered savings bank. IndyMac Bank’s
uncontested federal savings bank status necessarily means the
Company’s section 2943 cause of action against Fannie Mae was
preempted.

legislative intent, which we also review de novo”].) “However,
‘when conflicting inferences may be drawn from undisputed facts,
the reviewing court must accept the inference drawn by the trier
of fact so long as it is reasonable.’” (Herpel, at p. 100.) Here,
although the trial court made no ruling on the Fannie Mae
parties’ preemption argument, and notwithstanding the Fannie
Mae parties disputed they violated section 2943, the parties in
the trial court and on appeal did not, for purposes of the
preemption issue, identify any material underlying facts or
inferences that are disputed.

                                24
      “Whether state law is preempted by federal law depends on
whether Congress intended that federal law supersede state law.”
(Lopez v. World Savings & Loan Assn. (2003) 105 Cal.App.4th
729, 736 (Lopez); accord, Peatros v. Bank of America (2000)
22 Cal.4th 147, 157 [“[w]hether federal law preempts state law is
fundamentally a question whether Congress has intended such a
result”].) “‘[F]ederal regulations have no less pre-emptive effect
than federal statutes.’” (Lopez, at p. 736; accord, Jevne v.
Superior Court (2005) 35 Cal.4th 935, 950.)
      “Between 1933 and 1989, federal savings and loan
associations (also referred to as thrift institutions or thrifts) were
regulated under . . . HOLA by the Federal Home Loan Bank
Board [the Board],” which “was given ‘plenary authority to issue
regulations governing’ thrift institutions and superseding state
law.” (Akopyan v. Wells Fargo Home Mortgage, Inc. (2013)
215 Cal.App.4th 120, 138 (Akopyan); see Fidelity Federal Sav. &
Loan Assn. v. de la Cuesta (1982) 458 U.S. 141, 160, 162 [under
HOLA, “Congress gave the Board plenary authority to issue
regulations governing federal savings and loans”; HOLA’s
“statutory language suggests that Congress expressly
contemplated, and approved, the Board’s promulgation of
regulations superseding state law”].) The OTS replaced the
Board in 1989 and “was given the same plenary power to regulate
federal savings associations.” (Akopyan, at p. 138.)15

15     As also explained in Akopyan, supra, 215 Cal.App.4th at
page 140, “[t]o allow federal thrifts ‘greater flexibility in their
lending and investment operations,’ the OTS . . . directed the
thrifts to comply with the uniform interagency real estate lending
standards set forth at 12 Code of Federal Regulations
parts 560.100 and 560.101,” which “required that a savings
association ‘establish loan administration procedures for its real

                                  25
       The OTS in 1996 adopted 12 Code of Federal Regulations
part 560.2, in which, at paragraph (a), the OTS made clear it
“occupie[d] the entire field of lending regulation for federal
savings associations.” (61 Fed.Reg. 50951-50952, 50965-50966
(Sept. 30, 1996); 12 C.F.R. § 560.2(a).) “Federal savings
association” under HOLA includes a federally chartered savings
bank. (12 U.S.C. § 1462(3) [“[t]he term ‘Federal savings
association’ means a Federal savings association or a Federal
savings bank chartered under section 1464 of this title”]; see
Appling v. Wachovia Mortg., FSB (N.D.Cal. 2010) 745 F.Supp.2d
961, 970-971 [“Federal savings associations, including federal
savings banks, are subject to HOLA and regulated by the Office
of Thrift Supervision”].) In keeping with its “inten[t] to give
federal savings associations maximum flexibility to exercise their
lending powers in accordance with a uniform federal scheme of
regulation,” the OTS allowed federal savings associations to
“extend credit as authorized under federal law, including this
part, without regard to state laws purporting to regulate or
otherwise affect their credit activities,” subject to certain
exceptions. (12 C.F.R. § 560.2(a).) In paragraph (b) the OTS
provided a non-exhaustive list of examples illustrating “the types
of state laws preempted by paragraph (a),” such as, at
subparagraph (9), “[d]isclosure and advertising, including laws

estate portfolio,’ addressing such matters as . . . payment
processing; . . . loan payoffs; . . . and servicing and participation
agreements. (Appen. to 12 C.F.R. § 560.101.) The reference to
servicing agreements, a feature of third party loan servicing
arrangements, suggests that such arrangements fell within the
scope of the interagency real estate lending standards that
federal thrifts were directed to follow.” (Fn. omitted.)

                                  26
requiring specific statements, information, or other content to be
included in . . . billing statements . . . or other credit-related
documents” and, at subparagraph (10), “[p]rocessing, origination,
servicing, sale or purchase of, or investment or participation in,
mortgages.” (12 C.F.R. § 560.2(b)(9) & (10).) “Paragraph (c)
saved from preemption certain state laws, such as contract law,
‘to the extent that they only incidentally affect the lending
operations of Federal savings associations or are otherwise
consistent with the purposes of paragraph (a).’” (Akopyan, supra,
215 Cal.App.4th at p. 139; see 12 C.F.R. § 560.2(c).)
       The OTS supplied the following guidance on how to
construe its regulation: “In this regard, OTS wishes to make
clear that the purpose of paragraph (c) is to preserve the
traditional infrastructure of basic state laws that undergird
commercial transactions, not to open the door to state regulation
of lending by federal savings associations. When analyzing the
status of state laws under § 560.2, the first step will be to
determine whether the type of law in question is listed in
paragraph (b). If so, the analysis will end there; the law is
preempted. If the law is not covered by paragraph (b), the next
question is whether the law affects lending. If it does, then, in
accordance with paragraph (a), the presumption arises that the
law is preempted. This presumption can be reversed only if the
law can clearly be shown to fit within the confines of
paragraph (c). For these purposes, paragraph (c) is intended to
be interpreted narrowly. Any doubt should be resolved in favor of
preemption.” (61 Fed.Reg. 50951, 50966-50967 (Sept. 30, 1996);
see McShannock v. JP Morgan Chase Bank NA (9th Circ. 2020)
976 F.3d 881, 890 (McShannock); Silvas v. E*Trade Mortg. Corp.
(9th Cir. 2008) 514 F.3d 1001, 1005.) “In applying this

                                27
framework, we are ‘not limited to assessing whether the state law
on its face comes within paragraph (b) of the regulation.’
[Citation.] ‘Instead, we ask whether the state law, “as applied, is
a type of state law contemplated in the list under
paragraph (b) . . . . If it is, the preemption analysis ends.”’”
(McShannock, at p. 890.)
        Here, the Company’s cause of action alleging Fannie Mae
failed to provide, or timely to provide, certain information and
other disclosures about the loan, including the balance owed, in
violation of Civil Code section 2943 is preempted because it relies
on an application of that statute falling within the scope of
12 Code of Federal Regulations part 560.2(b)(9) (disclosure)
and/or (10) (processing or servicing of a mortgage). (See, e.g.,
Lopez, supra, 105 Cal.App.4th at pp. 732, 735, 739, 742 [“[w]e
hold that Civil Code section 2943 is within the scope of those
provisions that 12 C.F.R. part 560.2 is intended to preempt”;
concluding that plaintiff’s causes of action challenging the
practice of a federal savings association of charging a $10 fee for
the fax transmission of a payoff demand statement in violation of
Civil Code section 2943 were preempted by HOLA and the OTS’s
regulations in part because “[p]aragraph (b) . . . includ[es]
‘(5) Loan-related fees, including without limitation, . . . servicing
fees’” and “[p]roviding the payoff demand statement is a service
. . . and is a necessary step in paying off the loan”]; Becker v.
Wells Fargo Bank, N.A., Inc. (E.D.Cal. Mar. 21, 2011, No. 2:10-cv-
02799 LKK KJN PS) 2011 U.S.Dist. Lexis 29687, pp. *45-47
[plaintiff’s claims that defendants violated Civil Code
section 2943 “by improperly responding or failing to respond to
his written demands for information about his loan debts” were
preempted by HOLA because “[c]ourts analyzing Section 2943

                                 28
and HOLA preemption in similar cases have found preemption
and dismissed the claim”; quoting as an example a federal district
court case from the Southern District of California that concluded
a claim for alleged failures to respond to a demand letter was
preempted because Civil Code section 2943 “‘imposes a
requirement related to disclosure, 12 C.F.R. § 560.2(b)(9), or the
processing or servicing of mortgages,’” [12 C.F.R.]
§ 560.2(b)(10)’”]; see also Becker v. Wells Fargo Bank, N.A., Inc.
(E.D.Cal. Sept. 19, 2012, No. 2:10-cv-02799 LKK KJN PS) 2012
U.S.Dist. Lexis 134986, p. *14 [“district courts within this circuit
have rejected plaintiff’s argument that instruments and ‘notes’
are not ‘mortgages’ and are therefore outside the scope of
12 C.F.R. § 560.2(b)(10)”].)
       To be sure, “[u]nder the Dodd-Frank Wall Street Reform
and Consumer Protection Act (Dodd-Frank Act) (Pub.L. No. 111-
203 (July 21, 2010) 124 Stat. 1376), . . . 12 Code of Federal
Regulations . . . part 560.2 was superseded”; “the OTS was
merged into the Office of the Comptroller of the Currency (OCC),
which regulates national banks”; and “[f]ield preemption under
. . . HOLA was eliminated.” (Akopyan, supra, 215 Cal.App.4th at
pp. 136, 139, fns. 8, 10; see 76 Fed.Reg. 48950, 48952 (Aug. 9,
2011) [the “OTS regulations at 12 CFR parts 545, 550, 557 and
560 include certain ‘occupation of the field’ statements on Federal
preemption”; “these occupation of the field statements in the OTS
regulations have been removed from the Republished
Regulations”].) However, the Dodd-Frank Act’s amendments to
HOLA preemption are prospective and do not affect loans
originated under contracts entered into on or before July 21,
2010, as is the case here. (See, e.g., Akopyan, at p. 136, fn. 8 [the
Dodd-Frank Act’s “amendments to HOLA and [National Bank

                                 29
Act] preemption are prospective”]; Meyer v. One West Bank,
F.S.B. (C.D.Cal. 2015) 91 F.Supp.3d 1177, 1180-1181 [“The Dodd-
Frank Act is not, however, retroactive. Contracts formed before
the Act’s effective date [that is, on or before the July 21, 2010
date of enactment16] are, therefore, subject to the preemption
rules applicable at the time of formation”]; Brown v. Wells Fargo
Bank, N.A. (D.D.C. 2012) 869 F.Supp.2d 51, 56, fn. 5
[“[r]egulations, like statutes, cannot be applied retroactively
absent express direction from Congress”; “§ 560.2 governs in this
case because it was the regulation in effect when the parties
entered into the Pick-a-Pay mortgage loan transaction”]; 17 see
also Bowen v. Georgetown University Hosp. (1988) 488 U.S. 204,
208 [“congressional enactments and administrative rules will not
be construed to have retroactive effect unless their language
requires this result”]; 12 U.S.C. § 5553 [“This title . . . shall not be
construed to alter or affect the applicability of any regulation,
order, guidance, or interpretation prescribed, issued, and

16     The effective date of the Dodd-Frank Act was generally one
day after “the date of enactment.” (Dodd-Frank Act (Pub.L.
No. 111-203, § 4 (July 21, 2010) 124 Stat. 1376, 1390.) The Dodd-
Frank Act was enacted on July 21, 2010. (E.g., Charter Township
of Clinton Police & Fire Retirement System v. Martin (2013)
219 Cal.App.4th 924, 929, fn. 4; McShannock, supra, 976 F.3d at
p. 885, fn. 3.)
17     Although Brown v. Wells Fargo Bank, N.A., supra,
869 F.Supp.2d at page 56, footnote 5, states the Dodd-Frank Act
was passed on July 21, 2011, that statement apparently reflects a
typographical error: Brown cites Poindexter v. Wachovia Morg.
Corp. (D.D.C. 2012) 851 F.Supp.2d 121, but Poindexter makes
clear the Dodd-Frank Act was enacted on July 21, 2010.
(Poindexter, at p. 128, fn. 11.)

                                   30
established by the Comptroller of the Currency or the Director of
the Office of Thrift Supervision regarding the applicability of
State law under Federal banking law to any contract entered into
on or before the date of enactment of this Act [enacted July 21,
2010], by . . . Federal savings associations”]; Dodd-Frank Act
(Pub.L. No. 111-203, § 1043 (July 21, 2010) 124 Stat. 1376, 2014
[setting forth the language codified under title 12 United States
Code section 5553].)18

18     The Department of the Treasury in 2017 promulgated a
rule removing the OTS’s regulations, effective October 11, 2018.
(See 82 Fed.Reg. 47083-47084 (Oct. 11, 2017); McShannock,
supra, 976 F.3d at p. 885, fn. 3.) That action, which the
Department of the Treasury explained was taken because the
Dodd-Frank Act had abolished the OTS and transferred its
rulemaking authority and operative rules to other agencies that
had since issued superseding regulations (82 Fed.Reg. 47083
(Oct. 11, 2017), does not alter our conclusion HOLA preempts the
Company’s cause of action for violation of Civil Code section 2943.
As discussed, the Dodd-Frank Act’s amendments to HOLA
preemption are prospective and do not affect loans originated
pursuant to contracts entered into on or before July 21, 2010.
Moreover, the Department of the Treasury stated it issued the
rule without providing the public with notice and an opportunity
to comment as generally required under the Administrative
Procedure Act (5 U.S.C. § 553) because the rule “does not make
any substantive changes to the regulations currently applicable
to savings associations and savings and loan associations and
does not substantively affect these regulated entities or the
public. It simply removes obsolete provisions that are likely to be
a source of confusion.” (82 Fed.Reg. 47083-47084 (Oct. 11, 2017).)
It also characterized the rule as “not a significant regulatory
action” and stated “there is no Federal mandate imposed by this
rulemaking.” (Ibid.) Even after October 11, 2018 courts have
continued to rely on 12 Code of Federal Regulations part 560.2,

                                31
       Without seriously disputing its section 2943 cause of action
may have been preempted if asserted against IndyMac Bank, the
Company contends its cause of action against Fannie Mae, which
is not a federal savings association, was not preempted because
the loan had been assigned to Fannie Mae and the challenged
conduct violating a state statute occurred after that assignment.
We agree with the Fannie Mae parties that, because a federal
savings association originated the loan, HOLA preemption
applies even though Fannie Mae is not a thrift and regardless of
when the challenged conduct occurred. Simply put, HOLA
preemption “runs with the loan.”19 (Faught v. Wells Fargo Bank,

the OTS’s preemption regulation, to conclude state laws have
been preempted by HOLA when the OTS’s regulation was
effective at the time the loan was obtained. (See Asare-Antwi v.
Wells Fargo Bank, N.A. (9th Circ. 2021) 855 Fed.Appx. 370, 372,
fn. 2; McShannock, at p. 885, fn. 3.)
19     Appling v. Wachovia Mortgage, FSB, supra, 745 F.Supp.2d
961, a case on which the Company relies for its argument,
actually supports a preemption conclusion. (Appling, at p. 971
[“although Wells Fargo itself is not subject to HOLA and OTS
regulations, this action is nonetheless governed by HOLA
because Plaintiff’s loan originated with a federal savings bank
and was therefore subject to the requirements set forth in HOLA
and OTS regulations”].) Moreover, in 2020 the Ninth Circuit in
McShannock—after explaining, “Federal district courts that have
addressed the question have taken three different positions:
(1) HOLA preemption applies to all conduct connected to a loan
originating with a federal savings association; (2) HOLA
preemption necessarily does not apply to national banks; and
(3) whether HOLA preemption applies depends on whether the
claims arise from the conduct of the federal savings association or

                                32
N.A. (E.D.Cal. Feb. 26, 2018, No. 2:17-cv-01706-MCE-KJN) 2018
U.S.Dist. Lexis 31742, p. *13; see, e.g., McShannock, supra,
976 F.3d at p. 889 [“there is little doubt that Congress intended
HOLA to cover the sale of mortgages belonging to federal savings
associations”], p. 895 [“[w]e hold that HOLA field preemption
principles apply to Appellees’ claims against Chase, a national
bank, even though its conduct giving rise to the complaint
occurred after it acquired the loans in question from WaMu, a
federal savings association”]; OTS Opn. Letter No. P-2003-5
(July 22, 2003) 2003 OTS Lexis 6, pp. *2, *13 & fn. 18 [concluding
“the borrower’s ability to assert claims and defenses against
[purchasers or assignees of loans originated by federal savings
associations] is limited by federal preemption”; state law “might
interfere with the ability of federal savings associations to sell
mortgages that they originate under a uniform federal system”];
see also Fidelity Federal Sav. & Loan Assn. v. de la Cuesta,
supra, 458 U.S. at p. 155, fn. 10 [“[t]he marketability of a
mortgage in the secondary market is critical to a savings and
loan, for it thereby can sell mortgages to obtain funds to make
additional home loans”]; Akopyan, supra, 215 Cal.App.4th at
pp. 142-143 [relying in part on “[t]he federal thrifts’ participation
in the secondary market as buyers, sellers, or investors” and that
“their participation has been subject to federal regulation” to
“conclude that the OTS intended to occupy the field of lending
regulation as to both federal thrifts and their loans”], 148 [“the
rationale for applying preemption to the assignees of federal

of the national bank”—proceeded to adopt the first approach.
(McShannock, supra, 976 F.3d at pp. 887-889.)

                                 33
thrifts is to allow the thrifts themselves greater freedom from
state interference”].)
       Finally, in an argument it did not make in the trial court,
the Company asserts its cause of action for violation of
section 2943 is not preempted because the Fannie Mae parties
had unsuccessfully attempted to remove the case to federal court
on the ground the second amended complaint referred to a
violation of RESPA. It quotes language from the district court’s
order remanding the action for lack of subject matter jurisdiction
that “a fleeting reference to RESPA buried in a cause of action
under § 2943 is insufficient to confer federal question
jurisdiction,” and the court’s conclusion that “plaintiff could not
have originally brought this action in federal court, in that
plaintiff does not competently allege facts supplying federal
question jurisdiction, and therefore removal was improper.” The
Company, however, fails adequately to explain, with citation to
legal authority, why the district court’s remand order precludes
the Fannie Mae parties’ preemption defense to the Company’s
claim for a violation of section 2943. (See, e.g., Orange County
Water Dist. v. Sabic Innovative Plastics US, LLC (2017)
14 Cal.App.5th 343, 383 [“‘“[t]he absence of cogent legal
argument or citation to authority allows this court to treat the
contention as waived”’”]; Rojas v. Platinum Auto Group, Inc.
(2013) 212 Cal.App.4th 997, 1002, fn. 5 [“[w]e . . . disregard
[respondent’s] assertion as unsupported by citation to legal
authority and cogent argument”].)20

20   The Fannie Mae parties also contend the trial court erred
in awarding damages jointly and severally against both Fannie
Mae and Seterus on the second cause of action because, as they
had argued in their objections to the trial court’s then-proposed

                                 34
      3. The Company Lacked Standing To Assert Its Cause of
         Action for Declaratory Relief
       Code of Civil Procedure section 1060 provides in part, “Any
person interested under a written instrument, excluding a will or
a trust, or under a contract, or 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 to the legal rights and duties of the respective parties,
bring an original action or cross-complaint in the superior court
for a declaration of his or her rights and duties in the premises,
including a determination of any question of construction or
validity arising under the instrument or contract.” “‘While
section 1060’s language “appears to allow for an extremely broad
scope of an action for declaratory relief” [citation], “an actual
controversy that is currently active is required for such relief to
be issued and both standing and ripeness are appropriate criteria
in that determination. [Citation.]” [Citation.] “One cannot
analyze requested declaratory relief without evaluating the
nature of the rights and duties that the plaintiff is asserting,
which must follow some recognized or cognizable legal theories
that are related to subjects and requests for relief that are
properly before the court.”’” (Lee v. Silveira (2016) 6 Cal.App.5th
527, 546.)

judgment, the operative second amended complaint expressly
alleged that cause of action was not directed against Seterus.
The Company concedes the judgment reflects an apparent clerical
error. No correction is necessary, however, because the judgment
in favor of the Company on the second cause of action must be
reversed in its entirety.

                                 35
       Here, the Company consistently maintained in the trial
court, including in successfully moving to remand the action and
opposing the Fannie Mae parties’ demurrer to the second
amended complaint, that the Company’s claims all arose under
the deed of trust and section 2943 and that it had standing to
assert those claims as owner of the property.21 However,
although a successor in title, the Company was not a party to,
and had assumed no obligations under, the loan to Simmons or
the deed of trust that secured the loan. (The deed of trust
required a lender-approved, written assumption for Simmons’s
successor in interest to obtain his rights and benefits under the
deed of trust.) Accordingly, the Company had no rights or duties
under either instrument and, given the nature of the Company’s
contentions and setting aside for the moment any standing
arising from section 2943, lacked standing to seek a declaration
of the outstanding balance due on that loan.22 (See, e.g., Otay
Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556,
565-566 [lack of contractual privity between property owner and
prior owner’s liability insurer defeated claim for declaratory relief
regarding potential coverage under insurance policy of

21     The Company did not argue (and the deed of trust did not
indicate) the Company was an intended third party beneficiary
and, as such, had standing. Nor did the Company contend it had
a defined intertwined business relationship with a contracting
party.
22     “Lack of standing may be raised at any time in the
proceeding, including at trial or in an appeal. [Citations.] We
may decide a standing issue even if the trial court did not rule on
the issue.” (Blumhorst v. Jewish Family Services of Los Angeles
(2005) 126 Cal.App.4th 993, 1000.)

                                 36
contamination problems at property; “Code of Civil Procedure
section 1060 has never been interpreted as no longer requiring
appropriate standing to seek declaratory relief, or as allowing the
issuance of any advisory orders about whether there should be
potential insurance coverage for a policyholder’s potential tort
liability”]; Shetty v. ARLP Securitization Trust Series 2014-2
(C.D.Cal., Oct. 28, 2016, No. CV 16-05467-BRO) 2016 U.S.Dist.
Lexis 195822, pp. *15-18 [property owner lacked standing to
pursue causes of action, including for declaratory judgment,
“arising from the underlying mortgage” because “only a borrower
(or his assignee) may bring a claim as to the underlying
mortgage”]; see also Cornelison v. Kornbluth (1975) 15 Cal.3d
590, 596-597 [“Upon the transfer of real property covered by a
mortgage or deed of trust as security for an indebtedness, the
property remains subject to the secured indebtedness but the
grantee is not personally liable for the indebtedness or to perform
any of the obligations of the mortgage or trust deed unless his
agreement to pay the indebtedness, or some note or
memorandum thereof, is in writing and subscribed by him or his
agent or his assumption of the indebtedness is specifically
provided for in the conveyance”]; Gantman v. United Pacific Ins.
Co. (1991) 232 Cal.App.3d 1560, 1566 [“‘[s]omeone who is not a
party to [a] contract has no standing to enforce the contract’”].) 23
       To be sure, because the property it acquired was burdened
with the deed of trust, as a practical matter the Company, as the

23    As the Fannie Mae parties pointed out, the Company
asserted the provisions of the deed of trust were contractual in
nature. Indeed, it sought attorney fees under the provisions of
the deed of trust and section 1717, which provides in part for fees
in “any action on a contract.”

                                 37
successor in title, had an interest in an accurate determination of
the amount due to redeem the property from the lien—a topic it
certainly could have pursued with the bankruptcy trustee. But
for purposes of its action for declaratory relief against the Fannie
Mae parties, the Company’s indirect interest in the borrower’s
obligations is insufficient to confer standing with regard to the
underlying contractual dispute. Absent contractual privity—that
is, a right to enforce the terms of the note or the deed of trust—
the Company was not entitled to the declaratory relief it sought.
(See D. Cummins Corp. v. United States Fidelity & Guaranty Co.
(2016) 246 Cal.App.4th 1484, 1491 [in absence of contractual
privity, company’s “practical interest” in another’s legal rights
under insurance policies, “no matter how enthusiastic it may be,”
does not constitute “‘a legally cognizable theory of declaratory
relief’”]; Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th
594, 615-616 [secured borrower who was incidental beneficiary of
consent judgment lacked standing to enforce judgment and
therefore had no right to declaratory relief concerning judgment’s
effect on his loan].)
        Although the Company might, in theory, have had standing
to assert a declaratory relief cause of action to determine the
parties’ rights and duties under section 2943,24 including a
determination of the amount necessary to pay off the loan,
because the Company’s claim for violation of section 2943 was
preempted, the requirements of that statute could not form the

24    “The prerequisites for standing to assert statutorily based
causes of action are determined from the statutory language, as
well as the underlying legislative intent and the purpose of the
statute.” (Boorstein v. CBS Interactive, Inc. (2013)
222 Cal.App.4th 456, 466.)

                                 38
basis for an actual controversy. (See Lee v. Silveira, supra,
6 Cal.App.5th at p. 546; cf. Ball v. FleetBoston Financial Corp.
(2008) 164 Cal.App.4th 794, 800 [“Where a trial court has
concluded the plaintiff did not state sufficient facts to support a
statutory claim and therefore sustained a demurrer as to that
claim, a demurrer is also properly sustained as to a claim for
declaratory relief which is ‘wholly derivative’ of the statutory
claim”].) Accordingly, the declaratory judgment regarding the
amount due is reversed.
      4. The Order Denying Attorney Fees Is Affirmed
      After the trial court entered its judgment finding the
Company was the prevailing party entitled to costs of suit,
including attorney fees if applicable, the Company moved for
attorney fees on August 12, 2019, contending it had prevailed in
an action based on a deed of trust containing an attorney fees
clause and was entitled to attorney fees under Civil Code
section 1717.25 It also argued it was entitled to attorney fees
under Code of Civil Procedure section 2033.420 (section 2033.420)
on the ground Fannie Mae inappropriately denied several
requests for admission. The trial court denied the motion.

25     Civil Code section 1717, subdivision (a), provides in part,
“In any action on a contract, where the contract specifically
provides that attorney’s fees and costs, which are incurred to
enforce that contract, shall be awarded either to one of the
parties or to the prevailing party, then the party who is
determined to be the party prevailing on the contract, whether he
or she is the party specified in the contract or not, shall be
entitled to reasonable attorney’s fees in addition to other costs.”

                                 39
         a. Denial of attorney fees under Civil Code section 1717
       Civil Code section 1717 provides for attorney fees to be
awarded to the prevailing party under specified circumstances.
In light of our reversal of the judgment in favor of the Company,
the Company was not entitled to fees under the deed of trust and
Civil Code section 1717.
         b. Attorney fees under Code of Civil Procedure
            section 2033.420
      Section 2033.420, subdivision (a), provides, “If a party fails
to admit the genuineness of any document or the truth of any
matter when requested to do so under this chapter, and if the
party requesting that admission thereafter proves the
genuineness of that document or the truth of that matter, the
party requesting the admission may move the court for an order
requiring the party to whom the request was directed to pay the
reasonable expenses incurred in making that proof, including
reasonable attorney’s fees.”26 Subdivision (b) provides, “The court
shall make this order unless it finds any of the following: [¶]
(1) An objection to the request was sustained or a response to it
was waived under [Code of Civil Procedure] Section 2033.290. [¶]
(2) The admission sought was of no substantial importance. [¶]

26    Recovery of attorney fees under section 2033.420 does not
require the attorney fees claimant to be a prevailing party. (See
Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d 500,
509, fn. 5 [“[b]ecause a nonprevailing party may also recover
expenses pursuant to [the predecessor to section 2033.420], it is
important to recognize that the fact in question need not have
been one which would have altered determination of the ultimate
issues”]; see generally § 2033.420, subd. (a) [no mention of a
prevailing party requirement].)

                                 40
(3) The party failing to make the admission had reasonable
ground to believe that that party would prevail on the matter. [¶]
(4) There was other good reason for the failure to admit.” 27
       “‘The determination of whether “there were no good reasons
for the denial,” whether the requested admission was “of
substantial importance,” and the amount of expenses to be
awarded, if any, are all within the sound discretion of the trial
court.’” (Bloxham v. Saldinger (2014) 228 Cal.App.4th 729, 753;
see Brooks v. American Broadcasting Co. (1986) 179 Cal.App.3d
500, 508 [“[o]n appeal, the trial court’s decision [whether to
award expenses for failure to admit requests for admission] will
not be reversed unless the appellant demonstrates that the lower
court abused its discretion”].)
       In its motion for fees under section 2033.420 the Company
argued Fannie Mae had inappropriately failed to admit
nine requests for admission that it proved at trial, entitling it to
$231,950 in attorney fees, which it explained constituted

27      “‘An issue is of “substantial importance” if it has “at least
some direct relationship to one of the central issues in the case,
i.e., an issue which, if not proven, would have altered the results
in the case.”’” (Bloxham v. Saldinger (2014) 228 Cal.App.4th 729,
752, fn. 20.) An award of expenses under the statute “is designed
to reimburse reasonable expenses incurred by a party in proving
the truth of a requested admission where the admission sought
was ‘of substantial importance’ [citations] such that trial would
have been expedited or shortened if the request had been
admitted.” (Brooks v. American Broadcasting Co., supra,
179 Cal.App.3d at p. 509; accord, City of Glendale v. Marcus
Cable Associates, LLC (2015) 235 Cal.App.4th 344, 353; see Grace
v. Mansourian (2015) 240 Cal.App.4th 523, 530 [“[t]he purpose of
requests for admissions is to expedite trial”].)

                                 41
“essentially all the fees incurred in the case.”28 (The Company
now identifies only six requests for admission as a basis for
reversal.) The Fannie Mae parties opposed the Company’s
motion for fees under section 2033.420, arguing the Company had
not established the truth or the substantial importance of the
matters denied; Fannie Mae had a reasonable basis to deny the
requests; and the Company’s motion was defective for failing to
break down the specific amounts incurred in proving the truth of
the matters denied (Garcia v. Hyster Co. (1994) 28 Cal.App.4th
724, 736-737 [“the statute authorizes only those expenses
‘incurred in making that proof,’ i.e., proving the matters denied
by the opposing party”]). The Fannie Mae parties also contended
the requested amount of fees was unreasonable, including
because the Company improperly sought fees incurred prior to
the August 9, 2016 date of Fannie Mae’s responses and fees
unrelated to proving the truth of the matters sought to be
admitted.
      At the October 7, 2019 hearing on the Company’s motion,
the court requested supplemental briefing, explaining it required
greater specificity as to how the Company proved the truth of the
matters claimed to have been unreasonably denied, and
continued the hearing to December 2, 2019. After the parties

28    In its motion the Company did not differentiate the
attorney fees incurred in the case and those incurred in proving
the truth of the matters Fannie Mae had denied. The Company
did, however, explain it was seeking an additional $5,025.42 in
costs under section 2033.420 to which the Company would not
otherwise be entitled under other statutory provisions as a
prevailing party, for a total award under section 2033.420 of
$236,975.42.

                                42
filed supplemental briefs29 and the continued hearing, the court
denied the motion.30 The minute order with the court’s ruling
does not explain the denial of attorney fees under Code of Civil
Procedure section 2033.420 despite explaining the denial of Civil
Code section 1717 fees.
       Contending the trial court failed to rule on this aspect of its
fees motion, the Company argues the court abused its discretion
in failing to grant the fees requested and urges us to remand the
matter with directions to award reasonable fees and costs.
       The court unquestionably decided the Company’s motion
for fees under section 2033.420—the request was denied—even
though it did not articulate in a written ruling its reasons for the
denial. It was not required to do so. (See, e.g., Maria P. v. Riles
(1987) 43 Cal.3d 1281, 1294 [“[c]ases decided under [Code of Civil
Procedure] section 632 generally have held that a statement of
decision is not required upon decision of a motion”]; In re
Marriage of Falcone & Fyke (2012) 203 Cal.App.4th 964, 981 [“[a]
trial court is not required to issue a statement of decision for an
attorney fee award”].) And that ruling was well within the
court’s discretion.31

29     In its supplemental brief in the trial court the Company
stated it was reducing the amount of fees sought under
section 2033.420 to $215,542.11 because it no longer sought fees
incurred prior to Fannie Mae’s denials. The Company, however,
otherwise continued to argue it was entitled to all fees incurred
since the time of Fannie Mae’s August 9, 2016 denials.
30   The record contains no reporter’s transcript of the
December 2, 2019 proceedings or an agreed or settled statement.
31    Because the record, including the December 2, 2019 minute
order, is silent as to the reason(s) for the court’s denial of
section 2033.420 fees, we infer all findings necessary to support

                                  43
       For Request for Admission (RFA) No. 3 (“[t]here is a
dispute between Plaintiff and Fannie Mae regarding the amount
required to satisfy the lien”): Fannie Mae had reasonable ground
to deny the request. As the Fannie Mae parties explained in the
trial court, Fannie Mae believed the Company’s allegations were
insufficient to create an “actual controversy” for purposes of the
declaratory relief cause of action, which sought the amount
needed to release the lien.32 That belief was not only reasonable,
but also, as we hold, correct as a matter of law. 33

the court’s order. (See, e.g., Denham v. Superior Court (1970)
2 Cal.3d 557, 564 [“‘A judgment or order of the lower court is
presumed correct. All intendments and presumptions are
indulged to support it on matters as to which the record is silent,
and error must be affirmatively shown’”]; Ritter & Ritter, Inc.
Pension & Profit Plan v. The Churchill Condominium Assn.
(2008) 166 Cal.App.4th 103, 128.)
32     To the extent the Company, by “dispute,” was not referring
to an “actual controversy,” the Company failed to establish the
substantial importance of the admission, only arguing on appeal
in a conclusory fashion with respect to all six RFAs that
admissions would have obviated the need for a trial. As the
Fannie Mae parties argued in the trial court, the parties would
have still needed to proceed with trial to determine the amount
owed on the loan even if Fannie Mae had admitted the amount
was in dispute.
33     Moreover, Fannie Mae’s denial was reasonable given its
response preceded the filing of the Company’s first amended
complaint: Fannie Mae’s response explained the Company’s
“operative complaint does not state what amount [the Company]
believes is required to satisfy the lien.” (The allegation in the
first and second amended complaints that the Company did not
agree it owed the amounts stated in the Fannie Mae parties’
March 30, 2016 demand was not included in the original

                                 44
       For RFA No. 9 (“[o]f the $24,693.90 total interest and
principal due on or before February 5, 2016, $20,878.77 was
interest and the balance of $3,815.13 was principal”); RFA No. 11
(“Fannie Mae did not make any of the ‘tax and insurance
payments’ identified in Exhibit 2, i.e., any of those charges that
total $7,449.39”); RFA No. 12 (“[t]he ‘tax and insurance
payments’ identified in Exhibit 2 are impounds, not payment[s]
made by or on behalf of Fannie Mae to third parties”; and RFA
No. 18 (“Fannie Mae did not incur the PSLGLPOSTINGCOST of
$411 that is shown on Exhibit 2”): Fannie Mae was justified in
denying these requests. As discussed, the Fannie Mae parties
moved for summary adjudication on the issue whether the
undisputed facts showed they accurately accounted for all
charges, fees and payments. The sole basis for the court’s denial
of the motion was a material factual dispute as to the
requirement to pay for property insurance—an issue not covered
by these requests for admission. Thus, there was reasonable
ground for Fannie Mae to believe it would prevail on these issues.
       For RFA No. 24 (“[a]s of May 9, 2016, Fannie Mae refused
to accept any payments by Plaintiff on the grounds that Plaintiff
is allegedly ‘a third party with no interest in the property’”):
Fannie Mae also had reasonable ground to believe it would
prevail on this matter. Regardless of the parties’ dispute over the
Fannie Mae parties’ ability to reject partial payments from the
Company, the Company’s own evidence showed Fannie Mae had,

complaint.) In support of the fees motion the Company did not
identify any request that Fannie Mae update its response. (See
Burch v. Gombos (2000) 82 Cal.App.4th 352, 359 [“[n]othing in
the text of the statute creates any ongoing duty to update
responses”].)

                                45
sometime on or before May 9, 2016, been willing to accept
payment for the payoff amount in the March 30, 2016 demand
statement.
      In sum, the trial court did not abuse its discretion in
denying the Company’s motion for fees under section 2033.420.
                        DISPOSITION
      The judgment is reversed. The trial court’s postjudgment
order denying the Company’s motion for attorney fees is affirmed.
The Fannie Mae parties are to recover their costs on appeal.

                                    PERLUSS, P. J.

     We concur:

           SEGAL, J.

           WISE, J.*

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

                               46