Court Opinion

ID: 9393601
Source: CourtListenerOpinion
Date Created: 2023-05-10 19:02:43.253016+00
Date Added: 2024-06-11T17:18:54.166927
License: Public Domain

Filed 5/10/23 Barber v. Select Portfolio Servicing CA4/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

 WAYNE BARBER et al.,                                                 D080912

           Plaintiffs and Appellants,

           v.                                                         (Super. Ct. No. PSC1802458)

 SELECT PORTFOLIO SERVICING,
 INC. et al.,

           Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Riverside County,
Kira L. Klatchko, Judge. Affirmed.
         Law Offices of Ronald H. Freshman and Ronald H. Freshman, for
Plaintiffs and Appellants Wayne Barber and George White.
         Kutak Rock, Steven M. Dailey, and Jennifer L. Andrews, for
Defendants and Respondents Select Portfolio Servicing, Inc. and U.S.
Bank, N.A., successor trustee to Bank of America, N.A., successor in interest
to LaSalle Bank N.A., as trustee, on behalf of the holders of the WAMU
Mortgage Pass-Through Certificates, series 2007-OA1.
      Akerman, Parisa Jassim, and Alejandro Pacheco; Parker Ibrahim &
Berg, Bryant S. Delgadillo, and John M. Sorich, for Defendant and
Respondent JPMorgan Chase Bank, N.A.
                                INTRODUCTION
      California law generally does not allow a preemptive attack on a
nonjudicial foreclosure. (See Yvanova v. New Century Mortgage Corp. (2016)
62 Cal.4th 919, 924 (Yvanova); Saterbak v. JPMorgan Chase Bank, N.A.
(2016) 245 Cal.App.4th 808, 814 (Saterbak).) The instant matter underscores
the wisdom of that principle.
      Nearly 17 years ago, George and Rita White obtained a $800,000 home
loan, which was secured by a deed of trust recorded against the White’s

home.1 Shortly thereafter, the Whites sold their home to Wayne and Linda

Barber.2 Apparently, the money the Whites received from the sale of their
home was not used to pay off their $800,000 loan because, by early 2015, the
Whites were significantly in arrears on that loan.
      After a notice of default and notice of trustee’s sale were recorded based
on the Whites’ failure to make timely payments on their loan, the Barbers, in
June 2015, sued numerous entities seeking to prevent a foreclosure sale of
their home. However, they dismissed that suit after it was removed to
federal court.

1     Of the Whites, only George is a party in the instant action. However, to
avoid confusion, we will refer to George and Rita by their respective first
names when necessary in this opinion.

2     Of the Barbers, only Wayne is a party in the instant action. However,
to avoid confusion, we will refer to Wayne and Linda by their respective first
names when necessary in this opinion.
                                       2
      Almost a year later, George White and Wayne Barber (George and
Wayne, together Appellants) brought suit in Riverside Superior Court,
relating to the same loan and the same property as the Barbers’ previous
suit. They again tried to prevent a foreclosure sale of the Barbers’ home.
That case was removed to the federal district court, which ultimately granted
a motion to dismiss in favor of Select Portfolio Servicing, Inc. (SPS) and U.S.
Bank, N.A., successor trustee to Bank of America, N.A., successor in interest
to LaSalle Bank N.A., as trustee, on behalf of the holders of the WAMU
Mortgage Pass-Through Certificates, series 2007-OA1 (U.S. Bank). The
Ninth Circuit affirmed the order on appeal.
      Nevertheless, Appellants continued their litigation efforts to forestall
foreclosure. On April 27, 2018, Appellants filed suit in Riverside Superior
Court, naming SPS as the only defendant. Again, the suit concerned the
same property and same loan. However, the focus of the complaint was more
narrow than the previous lawsuits. No longer were Appellants challenging
SPS’s authority to foreclose or claiming that any recorded document was void.
Instead, Appellants asserted that SPS was improperly moving forward with
foreclosure while Appellants were in the process of negotiating a loan
modification. Appellants filed multiple amended complaints, with the fourth
amended complaint being the operative one here. In that complaint,
Appellants added U.S. Bank and JPMorgan Chase Bank, N.A. (Chase) as Doe
defendants. Further, in that fourth amendment, Appellants returned to their
original strategy of challenging the authority of the entities moving forward
with the foreclosure, but they offered a new theory: Chase never owned the
subject loan. Thus, a recorded assignment from Chase to U.S. Bank was
void, as were all recorded instruments that followed that assignment.

                                       3
      SPS, U.S. Bank, and Chase (collectively Respondents) each demurred
to the fourth amended complaint, which the court sustained, finding the
claims against SPS and U.S. Bank were barred by res judicata, and the
claims against Chase were time-barred.
      Appellants appeal the ensuing judgment, arguing that the court erred
in sustaining the demurrers because Appellants presented a new theory of
liability based on recently discovered facts that Chase allegedly both
concealed and misrepresented. Appellants acknowledge California law
generally does not allow plaintiffs to preemptively challenge nonjudicial
foreclosures. Nevertheless, they argue that the instant action presents a
novel theory that warrants a new rule. To this end, Appellants claim that
the subject deed of trust grants them the right to challenge the nonjudicial
foreclosure on the grounds presented here. We disagree. The claim advanced
here is neither novel nor does it underscore the need for a change in the law.
Instead, this case presents an unfortunate but all too common foreclosure
avoidance suit. Accordingly, we affirm the judgment.
               FACTUAL AND PROCEDURAL BACKGOUND
        The Origination of the Subject Loan and Failure of the Lender
      In December 2006, George and Rita White obtained an $800,000 loan
(White Loan) from lender Washington Mutual Bank, FA (Washington
Mutual), secured by a deed of trust recorded against certain real property
located in Palm Desert, California (Property). The deed of trust stated that
Washington Mutual was the beneficiary, and the trustee was California
Reconveyance Company.
      In May 2007, the Whites sold the Property to Wayne and Linda Barber
pursuant to a land contract- contract for deed. The purchase price for the
Property was $1,050,000 with the Barbers making a $25,000 down payment

                                       4
and agreeing to monthly payments of $3,750 at an interest rate of 4.39
percent from June 2007 to May 1, 2008. On May 1, 2008, the entire
remainder of the purchase price became due.
      Washington Mutual failed and has been in receivership with the
Federal Deposit Insurance Company (FDIC) since September 28, 2008. Soon
thereafter, Chase purchased Washington Mutual’s assets and liabilities.
      On May 1, 2012, a corporate assignment of deed of trust was recorded
reflecting the deed of trust relating to the White Loan was assigned by Chase
to U.S. Bank (2012 Assignment).
      On March 2, 2015, a substitution of trustee was recorded substituting
National Default Servicing Corporation (NDSC) as successor trustee under
the deed of trust. Also, on March 2, 2015, a notice of default was recorded.
The notice of default reflects that as of February 27, 2015, George and Rita
White were in default on their loan in the amount of $276,491.34. On June 3,
2015, a notice of trustee’s sale was recorded. On June 23, 2015, a grant deed
was recorded evidencing that George and Rita White transferred the
Property to Wayne and Linda Barber.
                              The First Lawsuit
      On June 29, 2015, Wayne and Linda Barber filed an action in Riverside
Superior Court, Case No. PSC1502966, against SPS and NDSC, relating to
the White Loan and the Property. The Barbers alleged, in part, that SPS and
NDSC did not have authority to foreclose due to an alleged issue in
assignment or securitization. They specifically alleged that Washington
Mutual failed, Chase “may have acquired assets of Washington Mutual,” and
they have “no information nor belief that [Chase] acquired the Whites’ Note
and its incident security instrument.” Thus, as early as this first suit, Wayne
questioned the validity of the 2012 Assignment.

                                       5
      The Barbers further alleged that George had filed for Chapter 7
bankruptcy and, as a result, the bankruptcy court discharged the note related
to the White Loan as unsecured debt. As such, they alleged the deed of trust
did not “ ‘survive’ ” George’s bankruptcy. The Barbers also averred that the
2012 Assignment was a legal nullity and that the White Loan was not put
into the subject securitized trust by the required deadline.
      In addition, the Barbers alleged they submitted a loan modification
application on June 25, 2015, but SPS and NDSC were proceeding with
foreclosure despite the application.
      The case was removed to federal court on July 30, 2015, and on
August 6, 2015, SPS and NDSC filed a motion to dismiss. The Barbers
dismissed the case on September 30, 2015.
                              The Second Lawsuit
      On March 7, 2016, Appellants filed a complaint in the Riverside County
Superior Court, Case No. PSC1601076, against U.S. Bank, SPS, and NDSC,
relating to the White Loan and the Property. The case was removed to
federal district court on April 13, 2016. U.S. Bank and SPS filed a motion to
dismiss on April 20, 2016.
      On May 10, 2016, Appellants filed a first amended complaint alleging

causes of action for wrongful foreclosure, violations of Civil Code3
sections 2924, subdivision (a)(6) and 2924.17, a breach of the covenant of good
faith and fair dealing, and a violation of the unfair competition law (UCL)
(Bus. & Prof. Code, § 17200, et seq.). They also sought rescission under the
Truth in Lending Act (TILA) (15 U.S.C. § 1635), declaratory relief, and
cancellation of written instruments. Through the first amended complaint,
Appellants attacked the authority of U.S. Bank and SPS to foreclose due to

3     Statutory references are to the Civil Code unless otherwise specified.
                                       6
alleged issues in the transfer of the White Loan to Chase. Appellants claimed
“relevant sections” of the pooling and servicing agreement for the loan
provide that, “prior to the Closing Date of the Trust, the Depositor agreed to
deliver to the Custodian . . . the original Mortgage Note bearing all
intervening endorsements.” They further alleged the deed of trust was not
“delivered to the Trust” before its closing, and thus it purportedly separated
from the subject loan note.
      Appellants also claimed U.S. Bank and SPS did not provide “accurate
material disclosures” at the origination of the White Loan. As such, they
claimed they had the right to rescind the loan under TILA and averred that
they sent a notice of rescission on April 6, 2015.
      On August 9, 2016, the federal district court granted SPS and U.S.
Bank’s motion to dismiss. The district court found Appellants’ claims for
wrongful foreclosure and violation of section 2924, subdivision (a)(6) were
premature because no foreclosure had yet occurred. The court determined
that Appellants’ claim for a violation of section 2924.17 failed as the attack on
the 2012 Assignment pre-dated the statute’s January 1, 2013 effective date.
The court also faulted Appellants for not pleading any facts to support this
claim as well as not alleging they had brought the subject loan current.
Additionally, the court concluded that Appellants’ claim for breach of the
covenant of good faith and fair dealing failed because Appellants had not
alleged that they performed all their duties on the subject contract. The
court found the cause of action for a violation of UCL failed to state a claim
because Appellants did not suffer any alleged injury. The court determined
that the rescission claim under TILA was time-barred, that the declaratory
relief claim was a remedy and could not stand untethered to a surviving

                                        7
cause of action, and that the cancellation of instruments claim failed because
Appellants did not tender the amount of the loan that was in default.
         On September 6, 2016, Appellants filed a notice of appeal of the district
court’s order granting the motion to dismiss. Some 13 months later, the
Ninth Circuit issued its Memorandum decision affirming the district court’s
order.
                                 The Instant Matter
         Because the Whites had fallen behind in their loan payments,
Appellants began discussion with SPS regarding the possibility of a loan
modification. In the meantime, notices of trustee’s sale were recorded on
October 20, 2017 and February 16, 2018. During the loan modification
application process, Appellants filed the complaint in the instant action,
naming SPS as the only defendant. The complaint, filed on April 27, 2018,
alleged three causes of action (violation of section 2923.6, breach of the
covenant of good faith and fair dealing, and violation of the UCL) relating to
the White Loan and the Property. Appellants’ loan modification application
was denied less than a month after the original complaint was filed.
         On July 2, 2018, Appellants filed a first amended complaint. In
addition to the three causes of action alleged in the original complaint,
Appellants included a claim for negligence. Again, SPS was the only named
defendant, and Appellants averred that SPS was improperly moving forward
with a foreclosure while Appellants’ loan modification application was under
review. There were no allegations regarding the invalidity of the
2012 Assignment.
         On September 12, 2018, the superior court sustained SPS’s demurrer to
the first amended complaint, with leave to amend. Appellants again applied
for a loan modification on September 17, 2018 and that application was

                                          8
subsequently denied. In addition, Appellants subsequently filed a second

amended complaint.4
      On January 8, 2019, Appellants filed a third amended complaint. On
April 8, 2019, the court sustained, without leave to amend, SPS’s demurrer to
the causes of action for a UCL violation and negligence. The court also
granted, without leave to amend, SPS’s motion to strike allegations regarding
damages and granted with leave to amend SPS’s motion to strike claims for
attorney fees. Appellants did not amend the complaint, and SPS filed an
answer.
      SPS subsequently filed a motion for summary judgment. Before the
hearing on this motion, Appellants sought leave to file a fourth amended
complaint, which the court granted.
      On September 10, 2020, Appellants filed a fourth amended complaint,
which is the operative complaint in this matter. They alleged causes of
action for fraudulent concealment, intentional misrepresentation,
cancellation of instruments, slander of title, violation of the UCL, and

4      Respondents represent that on December 11, 2018, the superior court
sustained, in part, and overruled, in part, SPS’s demurrer to the second
amended complaint. The court allegedly sustained the demurrer, with leave
to amend, as to the claims for negligence and a violation of the UCL. The
court allegedly overruled the demurrer to the cause of action for violation of
section 2923.6. Respondents do not cite to and we have not found a
December 11, 2018 order in the record. That said, neither the existence of
that order nor the fate of the second amended complaint have any bearing on
the issues before us.
                                       9
financial elder abuse.5 Appellants designated U.S. Bank as Doe 1 and Chase
as Doe 2, “based on newly discover[ed] facts,” and filed amendments to add
U.S. Bank and Chase as defendants in the instant matter.
      Appellants claimed that the 2012 Assignment was fraudulent because
Chase misrepresented that it was the “ ‘successor in interest by purchase
from the FDIC as receiver.’ ” Appellants contended that the FDIC confirmed
that the White Loan was never taken into receivership by the FDIC; thus,
Chase did not purchase it. As such, Appellants averred that “[a]ll documents
flowing from this assignment are void. This includes but is not limited to the
[n]otice of [d]efault, [s]ubstitution of [t]rustee, and any [n]otices of [t]rustee

[s]ale.”6
      Based upon Chase’s alleged lack of any interest in the White Loan,
Appellants alleged that Chase fraudulently concealed that the loan was not
received by the FDIC and thus not purchased by Chase. They further
averred that the assignment of the deed of trust to Chase constitutes an
intentional misrepresentation. Based on their allegation that Chase never
had any interest in the White Loan, Appellants argue none of the defendants
named in the fourth amended complaint had the authority to foreclose on the

5     The causes of action for fraudulent concealment and misrepresentation
were alleged against Chase only. The slander of title claim was alleged
against U.S. Bank and Chase. The causes of action for cancellation of
instruments, violation of the UCL, and financial elder abuse were alleged
against all Respondents.

6     Appellants also allege that as late as 2019 or 2020, the FDIC did not
have any record of what loans Washington Mutual retained a beneficial
interest at the time of its failure. However, now the FDIC has a database in
which it can search to identify if a specific loan was received by the FDIC.
That database was searched and did not indicate that the White Loan was
held by Washington Mutual at the time of its failure.
                                         10
subject deed of trust. However, Appellants admit that the trustee’s sale was
postponed indefinitely.
      Respondents filed separate demurrers to the fourth amended
complaint. They also requested that the court take judicial notice of several
recorded documents relating to the White Loan and Property as well as
pleadings in the previous lawsuits regarding that loan and property.
Appellants filed oppositions to the three demurrers. Respondents filed
replies.
      On March 5, 2021, in three separate orders, the court sustained
Respondents’ demurrers to the fourth amended complaint without leave to
amend. As to SPS, the court stated that the causes of action alleged against
it were barred under the doctrine of res judicata. Specifically, the court noted
that the causes of action for cancellation of instruments and violation of the
UCL “were actually raised and resolved on their merits by the federal district
court, or could have been raised in that action.” Although the cause of action
for financial elder abuse “was not specifically litigated in the federal action,
the allegations that appear to form the basis of the cause of action were
previously at issue.” Indeed, the court compared the allegations of
wrongdoing in the fourth amended complaint with the allegations in the
federal action:
           “[T]he only ‘wrong’ specific to the sixth cause of action
           stated at paragraph 132: ‘Plaintiffs allege that Chase, US
           Bank, and SPS have since 2008, wrongfully taken
           payments made by Plaintiffs on the mortgage, that none
           were entitled to take. Welf. & Inst. Code § 15657.03(b)(2)
           and (b)(3).’ In the federal action, Plaintiffs claimed that
           defendants, including [SPS] were unjustly enriched
           through collection efforts on payments not owed stating,
           among other things that ‘Defendants . . . engaged in
           deceptive business practices . . . by collecting on a
           debt/mortgage that they each knew or should have know[n]

                                        11
         was void due to the illegal nature of the contract that would
         inevitably cause default before completion of the loan term
         and was therefore unconscionable . . . .’ [Citation.] In other
         words, ‘financial elder abuse’ is merely a new theory of
         liability based on facts at issue in the federal suit, which
         was dismissed.”

The court also concluded that Appellants had not alleged facts sufficient to
assert any wrongful conduct by SPS to state a financial elder abuse claim.
      Regarding U.S. Bank, the court determined that U.S. Bank was not a
proper Doe defendant. The court emphasized that, under Code of Civil
Procedure section 474, designation of fictious defendants must be
accomplished when the true names of the defendants are discovered. To this
end, the court noted that the language referring to U.S. Bank in the fourth
amended complaint was “nearly identical to that alleged in the initial
Complaint filed in this matter, and to language in the federal actions.” Thus,
the court concluded that Appellants were “unquestionably aware of U.S.
Bank’s name and its alleged role in the foreclosure proceedings, and even
previously sued U.S. Bank in connection with the same property and
foreclosure.”
      In addition, the court concluded that all the causes of action against
U.S. Bank were barred by the doctrine of res judicata for almost the same
reasons it articulated in its order sustaining SPS’s demurrer.
      Concerning Chase, the court explained that Appellants only recently
added Chase as a Doe defendant in this action:
         “In spite of the fact they mentioned . . . Chase in the
         [original] Complaint [in this matter], and that they
         allege[d] the [FDIC] sold certain assets and liabilities as
         to . . . Chase in 2008, Plaintiffs did not include . . . Chase as
         a Defendant in this action. Plaintiffs now claim that they
         were unaware of . . . Chase’s potential liability in 2018
         when they filed the Complaint. Plaintiffs, in fact, did not

                                        12
         include . . . Chase as a defendant in this case until 2020
         when, after filing a Fourth Amended Complaint, they
         added . . . Chase to this action as a Doe defendant, at or
         about the same time they added Doe defendant U.S. Bank,
         an entity they had previously sued in relation to the
         foreclosure at issue in this case.”

      The court concluded that Chase was not a proper Doe defendant for the
same reasons it made that determination as to U.S. Bank. In addition, the
court explained, in detail, why the claims against Chase were time-barred
and why naming Chase as a Doe defendant did not preserve or otherwise
save those claims.
         “Here, Plaintiffs were unquestionably aware of . . . Chase’s
         name and its alleged role in the foreclosure proceedings,
         and even referred to this role in prior lawsuits and in the
         [original] Complaint, all in connection with this same
         property and foreclosure. . . . Chase is not a proper Doe
         defendant. To the extent that Plaintiffs assert that the
         allegations against . . . Chase arise out of some action
         unrelated to the servicing of the loan or the foreclosure on
         their home, the allegations would not ‘relate back’ and
         would, on their face be either the improper subject of a Doe
         amendment or barred by the applicable statute of
         limitations. In other words, although Plaintiffs now claim
         they only learned in 2020 through a newly created, or
         newly searchable, database about their specific claims
         against . . . Chase, these claims are wholly different from
         those alleged in the complaint and do not ‘relate back.’
         The[y] are also, on their face, barred by any applicable
         statute of limitations because Plaintiffs have not, and
         cannot, allege any basis for delayed discovery or other
         tolling of these claims. ‘Generally speaking, a cause of
         action accrues at the time when the cause of action is
         complete with all its elements.’ [Citations.] An important
         exception to the general rule of accrual is the ‘discovery
         rule,’ which postpones accrual of a cause of action until the
         plaintiff discovers, or has reason to discover the cause of
         action. [Citations.]’ (Fox v. Ethicon Endo-Surgery, Inc.
         (2005) 35 Cal.4th 797, 806-807.) ‘The discovery rule only
                                      13
         delays accrual until the plaintiff has, or should have,
         inquiry notice of the cause of action. The discovery rule
         does not encourage dilatory tactics because plaintiffs are
         charged with presumptive knowledge of an injury if they
         have ‘ “ ‘information of circumstances to put [them] on
         inquiry’ ” ’ or if they have ‘ “ ‘the opportunity to obtain
         knowledge from sources open to [their] investigation.’ ” ’
         [Citations.] In other words, plaintiffs are required to
         conduct a reasonable investigation after becoming aware of
         an injury, and are charged with knowledge of the
         information that would have been revealed by such an
         investigation.’ (Id. at pp. 807-808.)

         “Here, at the very least, Plaintiffs were on inquiry notice as
         to possible claims against . . . Chase, which recorded
         publicly available documents claiming an interest in the
         property in 2012. More specifically, the Fourth Amended
         Complaint alleges that assets held by Washington
         Mutual . . . at the time of its failure on September 28, 2008
         were taken into receivership by the [FDIC]. The FDIC sold
         those assets and liabilities to . . . Chase . . . in 2008. Then
         on April 12, 2012, . . . Chase assigned its purported interest
         in [the White Loan] to U.S. Bank. Now for the first time,
         Plaintiffs allege that prior to Washington Mutual’s failure
         the property was transferred to a third-party such that it
         could not have been transferred by the FDIC to . . . Chase.
         Aside from the fact that there is no recorded document
         evidencing this transfer, any claims Plaintiffs had
         against . . . Chase they knew, or should have known, about
         years before they filed the instant action.”

      On April 27, 2021, the court entered a judgment of dismissal in favor of
Respondents. Appellants timely filed a notice of appeal.
                                 DISCUSSION
                              A. Standard of Review
      We review a trial court’s order sustaining a demurrer de novo and
apply the abuse of discretion standard in reviewing the court’s denial of leave
to amend the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318;

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Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1250-1252.) “In
conducting our de novo review, we ‘must “give[ ] the complaint a reasonable
interpretation, and treat[ ] the demurrer as admitting all material facts
properly pleaded.” ’ ” (WA Southwest 2, LLC v. First American Title Ins. Co.
(2015) 240 Cal.App.4th 148, 151.) “[W]e accept the truth of material facts
properly pleaded in the operative complaint, but not contentions, deductions,
or conclusions of fact or law.” (Yvanova, supra, 62 Cal.4th at p. 924.) To
prevail, “the appellant must show that the facts pleaded are sufficient to
establish every element of a cause of action and overcome all legal grounds on
which the trial court sustained the demurrer. [Citation]. We will affirm the
ruling if there is any ground on which the demurrer could have been properly
sustained.” (Intengan v. BAC Home Loans Servicing LP (2013) 214
Cal.App.4th 1047, 1052.) If the pleading is insufficient on any ground
specified in a demurrer, we will uphold the order sustaining the demurrer,
even if it is not the ground relied upon by the trial court. (Irwin v.
Manhattan Beach (1966) 65 Cal.2d 13, 20; Intengan, at p. 1052; Debro v. Los
Angeles Raiders (2001) 92 Cal.App.4th 940, 946.)
      “The fact that we examine the complaint de novo does not mean that
plaintiffs need only tender the complaint and hope we can discern a cause of
action. It is plaintiffs’ burden to show either that the demurrer was
sustained erroneously or that the trial court’s denial of leave to amend was
an abuse of discretion.” (Keyes v. Bowen (2010) 189 Cal.App.4th 647, 655.)
Where the court sustains a demurrer without leave to amend, we decide if
“there is a reasonable possibility the plaintiff could cure the defect with an
amendment. [Citation.] . . . [Citation.] The plaintiff has the burden of
proving that an amendment would cure the defect.” (Schifando v. City of Los
Angeles (2003) 31 Cal.4th 1074, 1081.)

                                       15
    B. Appellants Cannot Preemptively Challenge a Nonjudicial Foreclosure
        “A nonjudicial foreclosure sale is a ‘quick, inexpensive[,] and efficient
remedy against a defaulting debtor/trustor.’ [Citation.] To preserve this
remedy for beneficiaries while protecting the rights of borrowers, ‘sections
2924 through 2924k provide a comprehensive framework for the regulation of
a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed
of trust.’ [Citation.] Under a deed of trust, the trustee holds title and has the
authority to sell the property in the event of a default on the mortgage.
[Citation.] To initiate a foreclosure, ‘[t]he trustee, mortgagee, or beneficiary,
or any of their authorized agents’ must first record a notice of default.”
(Brown v. Deutsche Bank National Trust Co. (2016) 247 Cal.App.4th 275,
280.)
        After a three-month waiting period, and at least 20 days before the
scheduled sale, the trustee may publish, post, and record a notice of sale.
(§§ 2924, subd. (a)(2), 2924f, subd. (b).) If the sale is not postponed and the
borrower does not exercise his or her rights of reinstatement or redemption,
the property is sold at auction to the highest bidder. (§ 2924g, subd. (a);
Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 509;
Moeller v. Lien (1994) 25 Cal.App.4th 822, 830-831.) Generally, the
foreclosure sale extinguishes the borrower’s debt; the lender may recover no
deficiency. (Code Civ. Proc. § 580d; Dreyfuss v. Union Bank of California
(2000) 24 Cal.4th 400, 411.)
        Based on the foregoing, it is apparent that nonjudicial foreclosure is a
creature of statute. (See Kachlon v. Markowitz (2008) 168 Cal.App.4th 316,
334 [“The Civil Code contains a comprehensive statutory scheme regulating
nonjudicial foreclosure”].) Here, there are no allegations that a foreclosure
has occurred. Indeed, the point of Appellants’ suit appears to be to stop the

                                         16
nonjudicial foreclosure process. However, California courts generally do not
allow a preemptive attack on a nonjudicial foreclosure. (See Yvanova, supra,
62 Cal.4th at p. 924; Saterbak, supra, 245 Cal.App.4th at p. 814.)
      In Saterbak, supra, 245 Cal.App.4th 808, the plaintiff argued “she may
bring a preemptive action to determine whether the [foreclosing entity] may
initiate a nonjudicial foreclosure” because “ ‘[i]f the alleged “Lender” is not
the true “Lender,’ ” it ‘has no right to order a foreclosure sale.’ ” (Id. at
p. 814.) This court rejected the claim, noting “California courts do not allow
such preemptive suits because they ‘would result in the impermissible
interjection of the courts into a nonjudicial scheme enacted by the California
Legislature.’ ” (Ibid.; see Gomes v. Countrywide Home Loans, Inc. (2011) 192
Cal.App.4th 1149, 1154 [this court holding that the plaintiff’s pre-foreclosure
challenge to MERS’s authority to initiate a nonjudicial foreclosure proceeding
was an impermissible “attempt[ ] to interject the courts into th[e]
comprehensive nonjudicial scheme”].)
      In Saterbak, we recognized that the California Supreme Court in
Yvanova, supra, 62 Cal.4th 919 had recently held that similar challenges
were permissible under certain circumstances. (Saterbak, supra, 245
Cal.App.4th at p. 815.) But those circumstances require that the challenge
be asserted post-foreclosure (rather than pre-foreclosure) and be based on a
claim that the assignment to the foreclosing entity is void (rather than
merely voidable). (Ibid.; see Perez v. Mortgage Electronic Registration
Systems, Inc. (9th Cir. 2020) 959 F.3d 334, 340 (Perez) [“[W]e follow the
decisions of the California appellate courts in holding that California law
does not permit preemptive actions to challenge a party’s authority to pursue
foreclosure before a foreclosure has taken place”].)

                                         17
       The courts have applied Saterbak’s reasoning to bar a variety of causes
of action typically asserted in preemptive pre-foreclosure lawsuits
challenging a foreclosing entity’s authority. (See Perez, supra, 959 F.3d at
p. 340 [cancellation of instruments]; Williams v. Bank of America, N.A. (9th
Cir. 2017) 701 Fed.Appx. 627, 628 [“A borrower cannot assert a California-
law claim for cancellation of instruments in a preemptive pre-foreclosure

action.”];7 Ruegsegger v. Caliber Home Loans, Inc. (C.D. Cal., Apr. 30, 2018,
No. SA CV 17-0907-DOC (KESx) 2018 U.S.Dist. LEXIS 226567, at *55 [“The
Court finds that Plaintiffs’ Slander of Title . . . [and other] claims are all
predicated on Plaintiffs’ argument that was rejected in Saterbak . . . .”];
Asare-Antwi v. Wells Fargo Bank, N.A. (9th Cir. 2021) 855 F.Appx. 370, 371
[“The district court did not err in dismissing [plaintiff]’s claims for
declaratory judgment and slander of title” because “California law does not
permit preemptive pre-foreclosure actions that challenge authority to
foreclose”].)
       Appellants acknowledge that California law generally does not allow
preemptive challenges to nonjudicial foreclosures, admitting “[t]he prevailing
case law” prevents a “pre-emptive challenge that impermissibly interjects the
court into the statutory scheme of [section] 2924.” Nonetheless, they claim
their case is different. To this end, they frame the issue before us as one of
first impression: “[W]hether rights granted in a contract prevail over a
statute.” In making this argument, Appellants advance two critical points.
First, they assert that paragraph 22 of the deed of trust gives them the right
to bring a suit to challenge the foreclosure before it occurs. Second,

7      We may cite and rely on unpublished federal court decisions as
persuasive authority. (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41,
64, fn. 4.)
                                        18
Appellants emphasize that they are claiming that Chase never had any
interest in the White Loan, and thus, it could not have executed a valid
assignment to U.S. Bank. Accordingly, U.S. Bank has no right to foreclose on
the deed of trust. We decline Appellants’ invitation to create new law. The
facts of this case do not warrant it.
      Appellants claim their rights under the contract are being infringed.
Specifically, they rely on paragraph 22 of the subject deed of trust. They
argue “[t]he contract specifically states the borrower may bring an action to
assert the non-existence of a default or any other defense to acceleration and
sale.” However, the deed of trust is attached as an exhibit to the fourth
amended complaint and paragraph 22 does not grant rights to the borrower.
Instead, it simply obliges the lender to inform the borrower of his or her
existing rights. The pertinent full sentence from that paragraph, which
Appellants have only quoted in part, reads: “The notice [of default] shall
further inform Borrower of the right to reinstate after acceleration and the
right to bring a court action to assert the non-existence of a default or any
other defense of Borrower to acceleration and sale.” Being informed of one’s
(existing) rights is not equivalent to being afforded new rights, and
paragraph 22 does only the former.
      Further, even if we were to read paragraph 22 as providing Appellants

with a contractual right, it would not be the panacea they seek here. 8
Appellants admit that they are not current on the White Loan. In addition,
they attach the notice of default to the operative complaint as an exhibit.
Although they claim the notice of default is void because it flows from the

8     There are no allegations that Barber is a party to the deed of trust,
corresponding note, or the White Loan in general. As he is not a party to
those agreements, it is elemental that he would have no rights under them.
                                        19
2012 Assignment, Appellants do not otherwise challenge the accuracy of that
recorded instrument. Relevant here, they do not claim the notice of default
lists the incorrect amount in arrears under the White Loan. Nor do they
claim that they brought the loan current after the notice of default was
recorded.
      The notice of default was recorded on March 2, 2015. It states that the
White Loan was in arrears in the amount of $276,491.34 as of February 27,
2015. Again, Appellants do not challenge that the White Loan is in default or
the amount the notice of default states is in arrears. Consequently,
Appellants tacitly admit that they are in default under the deed of trust.
Under standard contract principles, a party who has breached a contract
without justification or excuse may not enforce the contact. (See Otworth v.
Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.) Here,
Appellants offer no explanation, justification, or excuse for their breach. As
such, even if we were to find that paragraph 22 conveyed them certain
contractual rights to challenge the foreclosure, Appellants could not avail
themselves of those rights.
      Moreover, Appellants cite no authority for the proposition that a defect
in an assignment could amount to either “the non-existence of a default or
any defense . . . to acceleration and sale.” The validity or invalidity of any
assignment of the deed of trust or substitution of the trustee is wholly
independent of whether Appellants are in default on the White Loan.
      In addition, our analysis does not change if we consider Hacker v.
Homeward Residential, Inc. (2018) 26 Cal.App.5th 270 as Appellants urge.
There, the appellate court drew a distinction between challenging the
ownership of the debt and challenging terms of a pooling and servicing
agreement (PSA) with the former rendering the questioned document void

                                       20
while the latter making it voidable. (Id. at p. 278.) Yet, this distinction does
not advance Appellants’ argument in the instant action because Hacker
involved a post-foreclosure lawsuit. There is nothing in that case that
supports Appellants’ contention that by arguing the 2012 Assignment is void,
they can interject the courts into a nonjudicial foreclosure.
      There simply is no California authority to support Appellants’ position
here that they should be permitted to challenge the foreclosure before it
occurs. Indeed, as we discussed ante, our high court explicitly limited the
scope of its opinion in Yvanova to cases in which a nonjudicial foreclosure has
already taken place and where the alleged defects would render the
assignment void rather than voidable. (See Yvanova, supra, 62 Cal.4th at
pp. 934, 939.) Additionally, we are hesitant to create any new law based on
the allegations before us. Appellants admit they are in arrears under the
White Loan. They do not allege that they have been making payments to
some other third party only to be threatened by foreclosure by strangers.
There are no averments that multiple parties are claiming a right to foreclose
on the deed of trust. In other words, the instant matter does not present a
novel question of law as Appellants insist. Rather, this appears to be an
unfortunate and all too familiar foreclosure avoidance suit.
      In fact, Appellants, in one form or another, have been trying to prevent
the foreclosure for the past eight years. There have been three separate
lawsuits and eight different complaints. In all these suits, a common theme
emerged—the entities involved in the nonjudicial foreclosure process did not
have the authority to take such action. To this end, Appellants have claimed
the White Loan was discharged in bankruptcy, they had no reason to believe
that Chase actually acquired the White Loan, the White Loan was not
properly securitized and thus Chase did not acquire it, and finally, the White

                                       21
Loan was sold to some third party so Chase never acquired it. However,
among these allegations, we note that Appellants admit that they stopped
paying on the White Loan. Further, they do not dispute that, as of early
2015, they were in arrears in the amount of $276,491.34 as of February 27,
2015. Appellants do not allege that they made any payments since the notice
of default; thus, it logically follows that the amount in arrears has increased
substantially over the past eight years. Appellants do not claim they made
payments under the White Loan to some other third party and failed to
receive credit on their loan for those payments. And perhaps most telling,
shortly after obtaining the White Loan, the Whites purported to sell the
Property to the Barbers for well over the amount of the White Loan.
However, to the extent that the Whites actually received the Property’s
purchase price, it is clear they did not pay off the White Loan. And, it
appears, simply based on the allegations of the various complaints, that the
Barbers have lived in the Property for several years while the White Loan
remains in arrears and further payments have not been made.
      In short, based on the allegations in the operative complaint,
Appellants cannot maintain a suit against Respondents to prohibit the
foreclosure under the subject deed of trust. No California court has
countenanced such a suit, and the facts of this case do not warrant creating
new law. For this reason alone, we conclude the superior court did not err in

sustaining Respondents’ respective demurrers.9

9      Because we conclude Appellants do not have a legal basis to bring a
suit to prohibit a nonjudicial foreclosure, we do not reach the remaining
issues in their opening brief.
                                       22
                               DISPOSITION
      The judgment of dismissal is affirmed. Respondents are entitled to
their costs on appeal.

                                                    HUFFMAN, Acting P. J.

WE CONCUR:

IRION, J.

BUCHANAN, J.

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