Court Opinion

ID: 5130685
Source: CourtListenerOpinion
Date Created: 2021-12-01 20:03:25.82235+00
Date Added: 2024-06-11T08:23:19.913129
License: Public Domain

Filed 12/1/21 Hill v. Fay Servicing CA2/3
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION THREE

JOHN HILL,                                                     B302672

         Plaintiff and Appellant,                              Los Angeles County
                                                               Super. Ct. No. 19TRCV00317
         v.

FAY SERVICING, LLC,

         Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of
Los Angeles County. Ramona G. See, Judge. Affirmed.

      John Hill, in pro. per.; Yesk Law and Michael Yesk for
Plaintiff and Appellant.

     Wright, Finlay & Zak and Jonathan D. Fink, for Defendant
and Respondent.
                     _________________________
       John Hill filed a complaint against Fay Servicing, LLC
(Fay), alleging it demanded repayment of a loan and initiated
foreclosure on his property without authority. The trial court
sustained Fay’s demurrer without leave to amend after finding
Hill failed to allege any facts showing Fay lacked the requisite
authority. Hill appealed, and we affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
       Consistent with the applicable standard of review, we draw
our statement of facts from the allegations in Hill’s complaint
and matters properly subject to judicial notice. (Schifando v.
City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) “[W]e treat
as true all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law.” (Freeman v. San Diego
Assn. of Realtors (1999) 77 Cal.App.4th 171, 178, fn. 3.)
       In 2006, Hill executed a promissory note (the Note) in
connection with a $920,000 loan. The Note was secured by
a deed of trust encumbering his property (the Deed of Trust).
Hill defaulted on the loan in 2008.
       In 2014, Bank of America executed an assignment of deed
of trust, purporting to “grant, sell, assign, transfer and convey
unto” Ventures Trust1 “all beneficial interest under [the 2006]
Deed of Trust . . . together with the note(s) and obligations
therein described and the money due and to become due thereon
with interest and all rights accrued or to accrue under said
Deed of Trust.”
       In August 2016, the Law Offices of Les Zieve recorded
a notice of default and election to sell under deed of trust.

1    Ventures Trust’s full name is Ventures Trust 2013-I-H-R
by MCM Capital Partners, LLC.

                                2
Fay became the servicer on Hill’s loan in March 2017. Sometime
later, Fay informed Hill he owed more than $800,000 in overdue
payments and attorney fees. In February 2019, the Law Offices
of Les Zieve recorded a notice of trustee’s sale.
       Hill filed a complaint against Fay in April 2019. In the
operative first amended complaint (FAC), Hill alleged the 2014
assignment of the Deed of Trust to Ventures Trust is void
because there was no corresponding assignment of the Note.
As a result, he alleged, Fay did not represent the true holder
of the Note and beneficiary under the Deed of Trust, meaning
it lacked authority to demand payment on the loan and initiate
foreclosure of his property.2
       Based on the above allegations, Hill asserted causes
of action for violations of the Rosenthal Fair Debt Collection
Practices Act (Civ. Code, § 1788 et seq.; the Rosenthal Act),
various provisions of the Homeowner Bill of Rights (Civ. Code,
§§ 2924.17, 2924, subd. (a)(6); HBOR), and the Unfair
Competition Law (Bus. & Prof. Code, § 17200; UCL). In relief,
he sought damages, an injunction requiring Fay to remove
any instrument that could cloud title, and a declaration that
Fay lacks any legally cognizable rights to the property or debt.
Hill attached the assignment of the Deed of Trust and several
other documents to the FAC.
       Fay filed a demurrer to the FAC on the basis that it failed
to state sufficient facts to support any cause of action. Among
other things, Fay argued the entire FAC constituted an improper

2     Hill alleged the Law Offices of Les Zieve was acting as
Fay’s agent when it recorded the notice of default and notice of
trustee’s sale.

                                 3
challenge to its authority to foreclose the property, and Hill
failed to allege sufficient facts showing the assignment of
the Deed of Trust is void. Fay alternatively argued it is not
a debt collector and its actions did not amount to debt collection
for purposes of the Rosenthal Act. In support of its demurrer,
Fay requested the court take judicial notice of the Deed of Trust,
the assignment of the Deed of Trust, and the two foreclosure
notices referenced in the FAC.
       In opposition to the demurrer, Hill maintained Fay
qualified as a debt collector under the Rosenthal Act, and the
nonjudicial foreclosure constituted an attempt to collect a debt.
Hill further asserted the assignment of the Deed of Trust is
void because it was executed by his former mortgage servicer
(Bank of America) rather than the beneficiary of his debt
obligation. Hill opposed Fay’s request for judicial notice on
the basis that the contents of the documents were disputed
and constituted inadmissible hearsay.
       The court granted Fay’s request for judicial notice and
sustained the demurrer without leave to amend. On the first
cause of action—for violations of the Rosenthal Act—the court
determined Fay, as a mortgage servicer, could qualify as a debt
collector. Nonetheless, it concluded Hill failed to allege “facts
demonstrating a violation under the [Rosenthal] Act. Instead,
the alleged violation simply consists of [Hill’s] conclusory and
unsupported opinion that [Fay] lacked authority to pursue
payment for the debt, and, then, lacked authority to ultimately
foreclose.”
       On the second cause of action—for violations of the HBOR
—the court found Hill’s claims were based on “the fundamentally
flawed conclusory allegations that Defendant lacked the

                                4
authority to foreclose, . . . and [Hill] is not entitled to injunctive
relief under Section 2924(a)(6).”
        Finally, on the third cause of action—for violations of
the UCL—the court found Hill failed to “allege facts . . . show[ing]
a causal link between his economic injury and [Fay’s] alleged
wrongful acts.” The court also noted that where the underlying
claims are deficient, an unfair competition claim also fails.
        The court entered judgment of dismissal. Hill appealed.
                             DISCUSSION
1.      Hill’s Notice of Appeal is Timely
        Fay urges us to dismiss the appeal because Hill failed
to file a timely notice of appeal. Generally, a party must file a
notice of appeal within 60 days after being served with the notice
of entry of judgment. (Cal. Rules of Court, rule 8.104(a)(1)(A).)
Failure to do so deprives the reviewing court of jurisdiction to
hear the appeal. (Ventura Coastal, LLC v. Occupational Safety
& Health Appeals Bd. (2020) 58 Cal.App.5th 1, 36.)
        Hill was served the notice of entry of judgment on
September 25, 2019, making November 25, 2019 the deadline
to file a notice of appeal. The notice of appeal in the record
indicates the superior court clerk filed it on November 26, 2019,
a day after the deadline. As such, it would appear to be untimely.
        However, according to a document entitled Notice of Court
Rejection of Electronic Filing, on November 22, 2019 (several
days before the deadline), Hill electronically submitted a notice
of appeal, a request to waive court fees, and an order on court fee
waiver.3 The superior court clerk rejected the documents for the

3     We requested the parties submit supplemental briefing
addressing the significance of the Notice of Court Rejection of
Electronic Filing.

                                  5
following reason: “You are submitting a Fee Waiver Request,
so you cannot select that you already have a Fee Waiver. Do not
check that box when re-submitting.” The notice of rejection was
generated on November 26, 2019. It appears Hill resubmitted
the notice of appeal later that day, which the clerk then filed.
        A clerk has a ministerial duty to file a document presented
to it, so long as the document is in a form that complies with the
rules of court. (Voit v. Superior Court (2011) 201 Cal.App.4th
1285, 1287; see Carlson v. Department of Fish & Game (1998)
68 Cal.App.4th 1268, 1270, 1276.) Even if the filing has a defect,
“the clerk’s office should file it and notify the party that the
defect should be corrected.” (Voit, at p. 1287.) Moreover,
under rule 8.100(b)(3) of the California Rules of Court (Rule
8.100(b)(3)), a clerk must file a notice of appeal “even if the
appellant does not present the filing fee, the deposit, or an
application for, or order granting, a waiver of fees and costs.”
        Here, the clerk rejected Hill’s notice of appeal because he
checked a wrong box when submitting his fee waiver request.
There is nothing in the Code of Civil Procedure, California Rules
of Court, or the Los Angeles County Superior Court Local Rules
that would permit the clerk to reject a notice of appeal for this
reason. The clerk, therefore, had a ministerial duty to file the
notice upon receipt. Further, by rejecting the notice essentially
because of a technical defect with the fee waiver request, the
clerk also violated Rule 8.100(b)(3).4

4     Fay contends the clerk did not violate Rule 8.100(b)(3)
because it rejected the filing due to a problem with Hill’s fee
waiver request, rather than his failure to present a fee waiver
request. This is a distinction without a difference. Indeed,
it would be nonsensical to conclude a clerk must file a notice

                                 6
       Because the clerk was required to file the notice of appeal
on November 22, 2019, we may deem it filed on that date. (See
Eliceche v. Federal Land Bank Assn. (2002) 103 Cal.App.4th
1349, 1361 [“A document is ‘filed’ when it is actually delivered
to the clerk of the court during office hours, even if the clerk
erroneously refuses to file it.”]; Lezama-Carino v. Miller (2007)
149 Cal.App.4th 55, 59 [deeming notice of appeal timely filed
where clerk refused to file it without an approved fee waiver];
Rapp v. Golden Eagle Ins. Co. (1994) 24 Cal.App.4th 1167, 1172
[deeming notice of appeal timely filed where clerk refused to file
it without the full filing fee]; Pangilinan v. Palisoc (2014) 227
Cal.App.4th 765, 770 [same].) The notice of appeal, therefore,
is timely.5
2.     Standard of Review
       “When the trial court sustains a demurrer, we review
the complaint de novo to determine whether it alleges facts
stating a cause of action on any possible legal theory. [Citation.]
‘ “ ‘We treat the demurrer as admitting all material facts properly
pleaded, but not contentions, deductions or conclusions of fact or
law.’ ” [Citations.]’ [Citation.] ‘Further, “we give the complaint
a reasonable interpretation, reading it as a whole and its parts in

of appeal without any fee waiver request, but may reject a notice
if accompanied by a fee waiver request that is defective.
5       The actual notice of appeal Hill submitted on November 22
is not in the record on appeal, so we cannot confirm its contents
or whether it identified the particular judgment being appealed.
Nonetheless, given the notice of appeal in the record is dated
November 19, we infer it is the same document Hill attempted
to file on November 22.

                                 7
their context.” [Citations.]’ ” (Rossberg v. Bank of America, N.A.
(2013) 219 Cal.App.4th 1481, 1490.)
       “When a demurrer is sustained without leave to amend,
we also must decide whether there is a reasonable possibility that
the defect can be cured by amendment.” (Koszdin v. State Comp.
Ins. Fund (2010) 186 Cal.App.4th 480, 487.) “The plaintiff
bears the burden of proving there is a reasonable possibility of
amendment. [Citation.] . . . [¶] To satisfy that burden on appeal,
a plaintiff ‘must show in what manner he can amend his
complaint and how that amendment will change the legal effect
of his pleading.’ [Citation.] The assertion of an abstract right
to amend does not satisfy this burden. [Citation.] The plaintiff
must clearly and specifically set forth the ‘applicable substantive
law’ [citation] and the legal basis for amendment, i.e., the
elements of the cause of action and authority for it.” (Rakestraw
v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 43–
44.)
       While we are mindful that Hill has represented himself
for most of this case,6 he “is to be treated like any other party
and is entitled to the same, but no greater consideration than
other litigants and attorneys.” (Barton v. New United Motor
Manufacturing, Inc. (1996) 43 Cal.App.4th 1200, 1210.) He
therefore is bound to follow the most fundamental rule of
appellate review: the judgment or order challenged on appeal
is presumed to be correct, and “it is the appellant’s burden to
affirmatively demonstrate error.” (People v. Sanghera (2006)

6     Hill represented himself in the trial court and during
the briefing on appeal. Counsel substituted into the case in
August 2021 in order to represent Hill at oral argument.

                                8
139 Cal.App.4th 1567, 1573.) “All intendments and
presumptions are indulged to support it on matters as to which
the record is silent, and error must be affirmatively shown.”
(Denham v. Superior Court (1970) 2 Cal.3d 557, 564 (Denham).)
“ ‘In order to demonstrate error, an appellant must supply
the reviewing court with some cogent argument supported by
legal analysis and citation to the record.’ ” (United Grand Corp.
v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142, 146.)
“We may and do ‘disregard conclusory arguments that are
not supported by pertinent legal authority or fail to disclose
the reasoning by which the appellant reached the conclusions
he wants us to adopt.’ ” (Id. at p. 153.)
       Even though the trial court’s order sustaining Fay’s
demurrer is subject to this court’s de novo review, the standard
of review does not relieve Hill of the burden to demonstrate
prejudicial error. (Bains v. Moores (2009) 172 Cal.App.4th 445,
455.)
3.     Fay’s Request For Judicial Notice
        Hill contends the trial court erroneously granted Fay’s
request to take judicial notice of several recorded documents,
including the Deed of Trust, the assignment of the Deed of Trust,
and two foreclosure notices. A court may take judicial notice
of the existence and contents of recorded documents, but not
disputed facts stated in them. (Yvanova v. New Century
Mortgage Corp. (2016) 62 Cal.4th 919, 924, fn. 1 (Yvanova).)
When there is no dispute about the authenticity of a recorded
document—and none exists here—a court also may take judicial
notice of the document’s legally operative language and “deduce
and rely upon the legal effect of the recorded document, when
that effect is clear from its face.” (Fontenot v. Wells Fargo Bank,

                                 9
N.A. (2011) 198 Cal.App.4th 256, 265 (Fontenot), disapproved
on other grounds in Yvanova, at p. 939, fn. 13.)
       Although far from clear, Hill seems to suggest the trial
court erred by accepting as true disputed facts contained within
the recorded documents. The record, however, does not support
this contention. The court did not cite or otherwise purport to
rely on any disputed information contained within the documents
in reaching its decision. Hill, therefore, has not met his burden
of showing prejudicial error. (Denham, supra, 2 Cal.3d at p. 564.)
4.     The FAC Does Not State A Viable Cause of Action
       Hill insists he stated causes of action under the Rosenthal
Act, HBOR, and UCL by alleging that Fay demanded repayment
of his loan and initiated foreclosure proceedings without the
authority to do so. Such allegations are legal conclusions,
which alone are not sufficient to overcome a demurrer. (Aubry
v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967 (Aubry).)
Instead, Hill must point to factual allegations in the FAC
demonstrating that Fay lacked the requisite authority. Hill
has made numerous attempts to do so, but his efforts fall short.
       In the FAC, for example, Hill alleged Fay lacked the
requisite authority because the assignment of the Deed of Trust
to Ventures Trust (Fay’s principal) was not accompanied by
a simultaneous assignment of the Note. According to Hill,
because a deed of trust is inseparable from the note it secures,
an assignment of a deed of trust without an assignment of
the corresponding note is necessarily ineffective and void. (See
Fontenot, supra, 198 Cal.App.4th at p. 271 [“the assignment of
an interest in the security for a debt is a nullity in the absence
of an assignment of the debt itself”]; see also Yvanova, supra,

                               10
62 Cal.4th at p. 927 [a deed of trust “is inseparable from the note
it secures”].)
        Even assuming that were true, Hill’s theory fails because
it is directly contradicted by the actual assignment of the Deed
of Trust, which Hill attached to the FAC.7 The assignment states
it “grant[s], sell[s], assign[s], transfer[s] and convey[s]” unto
Ventures Trust “all beneficial interest under [the 2006] Deed
of Trust . . . together with the note(s) and obligations therein
described . . . .” (Italics added.) This language was sufficient to
assign the Note to Ventures Trust. (See Debrunner v. Deutsche
Bank National Trust Co. (2012) 204 Cal.App.4th 433, 442;
Fontenot, supra, 198 Cal.App.4th at p. 271.) Where, as here,
“facts appearing in the exhibits [attached to a complaint]
contradict those alleged, the facts in the exhibits take
precedence.” (Holland v. Morse Diesel Internat., Inc. (2001)
86 Cal.App.4th 1443, 1447.)
        Perhaps aware of this problem, Hill advanced a different
theory in opposition to Fay’s demurrer. Specifically, he argued
the assignment of the Deed of Trust is void because it was
executed by the former servicer on his loan (Bank of America),
rather than the beneficiary of his debt obligation. Hill appears to
have abandoned this theory on appeal, so we consider it forfeited.
(See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–
785 [“When an appellant fails to raise a point, or asserts it but

7     We take judicial notice of the existence and legal effect of
the assignment. (See Fontenot, supra, 198 Cal.App.4th at p. 265;
Poseidon Development, Inc. v. Woodland Lane Estates, LLC
(2007) 152 Cal.App.4th 1106, 1118 [taking judicial notice that
an assignment of a deed of trust had the effect of transferring
a party’s beneficial interest in the deed of trust].)

                                11
fails to support it with reasoned argument and citations to
authority, we treat the point as waived.”].)
       Hill advances yet another theory in his appellate briefs.8
As we understand it, Hill contends the Note could not be
transferred to Ventures Trust in 2014 given he defaulted on
his loan in 2008. In support, Hill relies on section 3302 of the
California Uniform Commercial Code, which states a “holder in
due course” of a negotiable instrument must take the instrument
without notice that it is “overdue or has been dishonored.”9
(Cal. U. Com. Code, § 3302, subd. (a)(2).) Because Ventures
Trust could not be the holder in due course of the Note, Hill
argues, the 2014 assignment of the Deed of Trust is void and
Fay lacked authority to enforce the Note.
       Contrary to Hill’s contentions, a person need not receive
a note as a holder in due course in order to demand payment
on it. (See Cal. U. Com. Code, § 3301 [defining the persons
entitled to enforce a negotiable instrument].) California also
has a comprehensive statutory framework governing nonjudicial
foreclosures, which does not require the foreclosing entity be a
holder in due course of the note. (Shuster v. BAC Home Loans
Servicing, LP (2012) 211 Cal.App.4th 505, 511–512.) Hill,

8     We reject Fay’s contention that Hill is precluded from
asserting theories he failed to raise in the trial court. “[A]n
appellate court ‘may consider new theories on appeal from
the sustaining of a demurrer.’ ” (Gutierrez v. Carmax Auto
Superstores California (2018) 19 Cal.App.5th 1234, 1245.)
9     A holder in due course of a negotiable instrument, as
opposed to a mere “holder” of the instrument, is entitled to
additional protections from claims and defenses by the obligor.
(Cal. U. Com. Code, § 3305, subd. (b); Finalco, Inc. v. Roosevelt
(1991) 235 Cal.App.3d 1301, 1304.)

                                 12
moreover, fails to provide any authority to support his claim
that an assignment of a deed of trust is void unless the assignee
is a holder in due course of the corresponding note. Absent such
authority, the fact that Ventures Trust was not a holder in due
course of the Note is irrelevant.
       We also reject Hill’s passing suggestion that the FAC states
causes of action by alleging there is not a valid chain of title, Fay
created and recorded false assignments and notices, and Fay
made false, deceptive, and misleading representations. These
are factual and legal conclusions, which are not sufficient to
overcome a demurrer. (Aubry, supra, 2 Cal.4th at p. 967.)
       Hill alternatively suggests it is Fay’s burden to prove it had
the requisite authority to seek repayment of his loan and pursue
foreclosure. In support, he cites Cockerell v. Title & Ins. Co.
(1954) 42 Cal.2d 284, in which the California Supreme Court
noted the “burden of proving an assignment falls upon the party
asserting rights thereunder . . . .” (Id. at p. 292.)
       Hill’s reliance on Cockerell is misplaced. As multiple courts
have explained in response to similar arguments, Cockerell
merely stands for the proposition that “an assignee who files suit
to enforce an assigned right bears the burden of proving a valid
assignment.” (Saterbak v. JPMorgan Chase Bank, N.A. (2016)
245 Cal.App.4th 808, 814; see Yhudai v. IMPAC Funding Corp.
(2016) 1 Cal.App.5th 1252, 1260.) Here, Fay did not file a lawsuit
seeking to enforce its rights under the Deed of Trust or Note.
Rather, Hill sued Fay on the basis that it allegedly demanded
repayment on his loan and initiated foreclosure proceedings
without authority. Hill had the burden to prove those
allegations. (See Yhudai, at p. 1260 [holding a plaintiff
challenging a nonjudicial foreclosure had the burden to prove

                                 13
an assignment was void]; Saterbak, at p. 814 [same].) Because
he failed to allege sufficient facts that would do so, the trial court
properly sustained the demurrer.
5.     The Court Properly Denied Leave to Amend
       Hill contends the trial court abused its discretion
by refusing to grant him leave to amend to add a wrongful
foreclosure cause of action. According to Hill, amendment
is warranted because Fay proceeded with a foreclosure sale
of his property while the action was pending.
       As best we can tell, Hill’s proposed wrongful foreclosure
cause of action would be premised on the same defective theories
as his other claims. Hill, however, does not suggest any way
in which he could cure those defects. As a result, amendment
of the complaint to add a wrongful foreclosure cause of action
would be futile. Under these circumstances, the trial court did
not abuse its discretion by denying leave to amend. (See Vaillette
v. Fireman’s Fund Ins. Co. (1993) 18 Cal.App.4th 680, 685
[“leave to amend should not be granted where, in all probability,
amendment would be futile”].)

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                         DISPOSITION
       We affirm the judgment. Fay Servicing, LLC is to recover
its costs on appeal.

     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                    EGERTON, J.

We concur:

             LAVIN, Acting P. J.

             MATTHEWS, J.

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

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