Court Opinion

ID: 3204498
Source: CourtListenerOpinion
Date Created: 2016-05-18 17:02:35.25957+00
Date Added: 2024-06-11T14:28:34.498443
License: Public Domain

Filed 5/18/16

                            CERTIFIED FOR PUBLICATION

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                      DIVISION ONE

                                   STATE OF CALIFORNIA

MONICA SCIARRATTA,                                 D069439

        Plaintiff and Appellant,

        v.                                         (Super. Ct. No. RIC1301485)

U.S. BANK NATIONAL ASSOCIATION, as
trustee, etc., et al.,

        Defendants and Respondents.

        APPEAL from a judgment of the Superior Court of Riverside County, John

Vineyard, Judge. Reversed and remanded.

        Stephen F. Lopez Esq. and Stephen F. Lopez for Plaintiff and Appellant.

        Keesal, Young & Logan, David D. Piper, Michael T. West and Joshua B. Norton

for Defendants and Respondents.

        This is an action for wrongful foreclosure. The homeowner, Monica Sciarratta,

alleges that as a result of a void assignment of her promissory note and deed of trust, the

entity that conducted a nonjudicial foreclosure sale on her home had no interest in either

the underlying debt or the subject property. In Yvanova v. New Century Mortgage Corp.

(2016) 62 Cal. 4th 919 (Yvanova), the California Supreme Court held that in a case such
as this—where a homeowner alleges a nonjudicial foreclosure sale was wrongful because

of a void assignment—the homeowner has standing to sue for wrongful foreclosure. (Id.

at pp. 942–943.) However, Yvanova did not address "any of the substantive elements of

the wrongful foreclosure tort" (id. at p. 924), and in particular did not address "prejudice

. . . as an element of wrongful foreclosure." (Id. at p. 929, fn. 4.)

       This case presents the question of "prejudice" left open in Yvanova: Where a

homeowner alleges foreclosure by one with no right to do so, do such allegations alone

establish the requisite prejudice or harm necessary to state a cause of action for wrongful

foreclosure? Or instead, to adequately plead prejudice, does the plaintiff-homeowner

have to allege the wrongful foreclosure interfered with his or her ability to pay on the

debt, or lead to a foreclosure that would not have otherwise occurred?

       Although Yvanova did not address this precise issue, the policy considerations that

drove the standing analysis in Yvanova compel a similar result here. As the Supreme

Court stated in Yvanova, it would be an "'odd result' indeed" were a court to conclude a

homeowner had no recourse where anyone, even a stranger to the debt, had declared a

default and ordered a trustee's sale. (Yvanova, supra, 62 Cal.4th at p. 938.)

       Accordingly, we conclude that a homeowner who has been foreclosed on by one

with no right to do so—by those facts alone—sustains prejudice or harm sufficient to

constitute a cause of action for wrongful foreclosure. When a non-debtholder forecloses,

a homeowner is harmed by losing her home to an entity with no legal right to take it.

                                              2
Therefore under those circumstances, the void assignment is the proximate cause of

actual injury and all that is required to be alleged to satisfy the element of prejudice or

harm in a wrongful foreclosure cause of action.

       The opposite rule, urged by defendants in this case, would allow an entity to

foreclose with impunity on homes that were worth less than the amount of the debt, even

if there were no legal justification whatsoever for the foreclosure. The potential

consequences of wrongfully evicting homeowners are too severe to allow such a result.

(See Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal. App. 4th 394, 410

(Miles).)

       On the issue of standing, the Supreme Court stated, "'Banks are neither private

attorneys general nor bounty hunters, armed with a roving commission to seek out

defaulting homeowners and take away their homes in satisfaction of some other bank's

deed of trust.'" (Yvanova, supra, 62 Cal.4th at p. 938.) Yvanova's holding on standing

would be undermined unless the same considerations applied in determining what

prejudice must be alleged to constitute a wrongful foreclosure cause of action. (Ibid.)

Therefore, we reverse the judgment of dismissal entered after the trial court erroneously

sustained a demurrer to Sciarratta's first amended complaint without leave to amend, and

remand for further proceedings.

                   FACTUAL AND PROCEDURAL BACKGROUND

       In reciting the facts on review of a demurrer, "'we accept as true the well-pleaded

facts in [Sciarratta's first amended] complaint.'" (Beacon Residential Community Assn. v.

Skidmore, Owings & Merrill LLP (2014) 59 Cal. 4th 568, 571.) "We may also consider

                                              3
matters that have been judicially noticed." (Committee for Green Foothills v. Santa

Clara County Bd. of Supervisors (2010) 48 Cal. 4th 32, 42.)

       Because the facts in this case are convoluted, it is helpful to know before one starts

where one will end. As explained in detail post, Deutsche Bank was the owner of

Sciarratta's loan and beneficiary of the deed of trust according to the public record at the

time of this foreclosure. But Deutsche Bank did not foreclose. Bank of America did.1

       A. Washington Mutual Loan and Deed of Trust

       In June 2005 Sciarratta obtained a $620,000 loan secured by real property in

Riverside County, California (the property). She executed a promissory note secured by

a deed of trust identifying the lender as Washington Mutual Bank, F.A. (WaMu) and the

trustee as California Reconveyance Company (CRC).2 In January 2008 WaMu

substituted Quality Loan Service Corporation as successor trustee.

       B. The Assignment to Deutsche Bank

       On April 24, 2009, JPMorgan Chase Bank, N.A. (Chase), as successor in interest

to WaMu, assigned the Sciarratta deed of trust and promissory notes to Deutsche Bank

1       The rules of court require litigants to "[s]upport any reference to a matter in the
record by a citation to the volume and page number of the record where the matter
appears." (Cal. Rules of Court, rule 8.204(a)(1)(C).) "We may decline to consider
passages of a brief that do not comply with this rule." (Lueras v. BAC Home Loans
Servicing, LP (2013) 221 Cal. App. 4th 49, 60.) The statement of facts in Sciarratta's
opening brief contains no record citations. Therefore, we base our understanding of the
parties' dispute on the portions of the record cited by defendants' brief.

2     Apparently as part of the same transaction, Sciarratta also borrowed an additional
$77,500, which was secured by a second deed of trust naming WaMu as beneficiary.

                                              4
National Trust Company, as trustee for Long Beach Mortgage Loan Trust 2006-6

(Deutsche Bank). This assignment was recorded on April 27, 2009, as document No.

2009-0205476.3 Chase, acting on behalf of Deutsche Bank, also substituted CRC as

trustee.

       C. Sciarratta's Default and Notice of Sale

       By April 24, 2009, Sciarratta's loan was $15,362.99 in arrears. On April 27, 2009,

CRC recorded a "Notice of Default and Election to Sell Under Deed of Trust" (Notice of

Default). The Notice of Default stated in part: "To find out the amount you must pay, or

to arrange for payment to stop the foreclosure . . . contact: JPMorgan Chase Bank . . . at

[address], [telephone number]."

       In July 2009 CRC recorded a "Notice of Trustee's Sale," stating the property

would be sold at auction on August 18, 2009 and that the estimated unpaid balance and

other charges was $729,234.93.

       D. Purported Assignment to Bank of America

       On November 9, 2009, Chase, as successor in interest to WaMu, recorded a

document entitled "Assignment of Deed of Trust," purporting to assign the Sciarratta

deed of trust and promissory notes to Bank of America, National Association, as

3       This date and document number become relevant in December 2009 when Chase
recorded a "[c]orrective [a]ssignment," purporting to retroactively correct document
number 2009-0205476 to reflect an assignment of Sciarratta's loan to Bank of America
rather than to Deutsche Bank.
                                             5
successor by merger to LaSalle Bank NA as trustee for WaMu Mortgage Pass-Through

Certificates Series 2005-AR19 (Bank of America).4

       E. Trustee's Sale to Bank of America

       On the same day, November 9, 2009, CRC recorded a "Trustee's Deed upon Sale"

on behalf of Bank of America as "the foreclosing beneficiary" of the deed of trust. Bank

of America acquired the property in exchange for a credit bid.

       F. "Corrective" Assignment to Bank of America

       On December 28, 2009, Chase, as successor in interest to WaMu, recorded a

document entitled "Assignment of Deed of Trust" which states: "This assignment is

being recorded to correct the assignee reflected on the assignment recorded April 27,

2009 as instrument No. 2009-0205476. [¶] For value received, the undersigned hereby

grants, assigns, and transfers to Bank of America . . . all beneficial interest under that

certain Deed of Trust dated 06/17/2005, executed by Monica Sciarratta . . . ."

       G. Sciarratta's District Court Action

       On November 2, 2009—the day before the scheduled trustee's sale—Sciarratta

filed a 16-count complaint against Chase, Deutsche Bank, and CRC in United States

District Court. The complaint states in part, "This is an action to quiet title against parties

who have wrongfully foreclosed upon residential real property of the Plaintiff, but who in

reality have no standing whatsoever to exercise any rights under the subject deed of trust

that encumbers Plaintiff's realty."

4     Sciarratta alleges this purported assignment was void because Chase had
previously assigned the trust deed and promissory notes to Deutsche Bank.
                                               6
       The record provided by the parties does not inform us about any other aspects of

this litigation except that in May 2012 the district court entered a judgment of dismissal

with prejudice in favor of the defendants.

       H. Sciarratta's State Court Action

       In February 2013 Sciarratta filed a state court complaint for (1) wrongful

foreclosure, (2) quiet title, and (3) cancellation of instruments against U.S. Bank National

Association as trustee successor in interest to Bank of America, Deutsche Bank, and CRC

(collectively, Defendants).

       Sciarratta's complaint alleges the foreclosure "is wrongful in that the trustee that

held the sale was not the proper trustee at the time of the sale and therefore the sale of the

Subject Property is void as a matter of law . . . or in the alternative the party that held the

sale and acquired the Subject Property by way of a supposed credit bid was not the holder

of the Subject Note and was not the beneficiary of the Subject Deed of Trust and could

not have submitted a credit bid." Sciarratta's original complaint did not allege

particularized prejudice from the fact that Bank of America rather than Deutsche Bank

foreclosed.

       Defendants demurred to the complaint on the grounds (1) the action was barred by

the res judicata effect of the district court judgment of dismissal in Sciarratta's previous

action, and (2) Sciarratta had not alleged the essential element of prejudice. The court

overruled this demurrer.

                                               7
       After certain defaults were set aside that are not relevant to any issues in this

appeal, Defendants answered the complaint, and later Sciarratta dismissed Deutsche Bank

without prejudice.

       I. Motion for Judgment on the Pleadings

       In May 2014 Defendants filed a motion for judgment on the pleadings, primarily

asserting that Sciarratta's wrongful foreclosure claim fails as a matter of law because she

did not and cannot allege prejudice. Defendants asserted, "Plaintiff alleges that the

foreclosure sale was invalid because CRC foreclosed on behalf of Bank of America

instead of Deutsche Bank, who Plaintiff argues was the correct beneficiary. Prejudice is

an essential element of a wrongful foreclosure claim . . . ."

       Sciarratta opposed the motion for judgment on the pleadings on both procedural

and substantive grounds. Procedurally, she argued the motion was barred by Code of

Civil Procedure section 438, subdivision (g)(1), which provides that a motion for

judgment on the pleadings may be made after a demurrer has previously been overruled,

"provided that there has been a material change in applicable case law or statute since the

ruling on the demurrer." Sciarratta asserted there had been no such material change in

law, and therefore the judgment on the pleadings was improper because the court had

previously overruled a demurrer brought on the same grounds. Substantively, Sciarratta

                                              8
argued prejudice is not an element of wrongful foreclosure where, as she had alleged, the

foreclosure sale is void.5

       The court granted the motion for judgment on the pleadings, with leave to amend,

on the grounds that "[p]laintiff must adequately allege the element of 'prejudice.'"

       J. First Amended Complaint

       In August 2014 Sciarratta filed a first amended complaint for (1) wrongful

foreclosure, (2) quiet title, and (3) cancellation of instruments. In addition to facts

alleged in the original complaint, Sciarratta attempted to allege prejudice; i.e., that she

had suffered damages from the wrongful foreclosure, stating:

          "Plaintiff need not allege prejudice in this case . . . because the
          claims made by Plaintiff . . . show that the parties that held the sale,
          [Bank of America] and CRC had no right to do so. Regardless, as a
          result of the foreclosure sale of the Subject Property by [Bank of
          America] and CRC, Plaintiff has suffered prejudice. . . . Plaintiff has
          been prejudiced by the sale of the Subject Property by [Bank of
          America], an entity that has no right to hold a sale, because she was
          deprived of any right to prevent foreclosure, in that [Bank of
          America] has no reason to work with Plaintiff as mandated by
          California law before holding a foreclosure sale and no interest in
          providing Plaintiff with information mandated by [the California
          Homeowners Bill of Rights] before a foreclosure. As a result,
          Plaintiff has been deprived of her substantial rights related to the
          prevention of a foreclosure to her prejudice."6

5      On appeal, Sciarratta again argues the motion for judgment on the pleadings was
barred by Code of Civil Procedure section 438, subdivision (g)(1). However, because we
reverse on the merits, it is unnecessary to consider this contention.

6      By amending her complaint to allege prejudice after the court sustained the motion
for judgment on the pleadings with leave to amend, Sciarratta in effect conceded the
complaint was inadequate and she waived any error in the trial court's determination that
prejudice beyond the fact of foreclosure itself is an essential element of her wrongful
foreclosure cause of action. (See Aubry v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962,
                                              9
       K. Demurrer to the First Amended Complaint

       Defendants demurred to the first amended complaint on the grounds, among

others, that Sciarratta had failed to adequately allege the essential element of prejudice.

Unlike their demurrer to Sciarratta's original complaint, in this demurrer defendants did

not argue the action was barred by res judicata.7

       At the hearing, Sciarratta's counsel stated, "The facts are very clear and very

simple. Deutsche Bank was the owner of this loan according to the public record at the

time of this sale. And Deutsche Bank did not hold this sale. There was no dispute about

that. Bank of America did." Citing Glaski v. Bank of America (2013) 218 Cal. App. 4th
1079 (Glaski), Sciarratta's lawyer stated, "Prejudice is not an element in this particular

966, fn. 2; Sheehy v. Roman Catholic Archbishop of San Francisco (1942) 49 Cal. App. 2d
537, 540-541 ["When he amended his complaint after the general demurrer was sustained
he in effect admitted that the demurrer was good and that his complaint was insufficient
to state a cause of action."]; Leibert v. Transworld Systems, Inc. (1995) 32 Cal. App. 4th
1693, 1698-1699, abrogated on other grounds by Miklosy v. Regents of University of
California (2008) 44 Cal. 4th 876, as stated in Vasquez v. Franklin Management Real
Estate Fund, Inc. (2013) 222 Cal. App. 4th 819, 832-833.)
        However, defendants did not raise this waiver issue in their respondent's brief, and
after considering the parties' supplemental briefs on this issue, we conclude defendants
have forfeited the waiver issue by failing to assert it and no good cause to relieve
defendants of that forfeiture has been shown. (See American Drug Stores, Inc. v. Stroh
(1992) 10 Cal. App. 4th 1446, 1453.)

7       Despite not raising res judicata in their demurrer to Sciarratta's first amended
complaint, on appeal defendants contend we should affirm on res judicata grounds.
However, because the district court judgment became final before defendants demurred
to Sciarratta's first amended complaint, we will not consider the res judicata issue for the
first time on appeal. (See First N.B.S. Corp. v. Gabrielsen (1986) 179 Cal. App. 3d 1189,
1195 [res judicata effect of a prior judgment must be raised in the trial court, except when
the judgment becomes final during the pendency of an appeal in another action].)

                                             10
circumstance. The reason that is the case is because we have a sale by someone, without

question, [sic] had no right to hold a sale."

       The court asked Sciarratta's attorney, "[A]re there facts that can be pled that have

not been pled now that would make me reconsider the no leave to amend?" After

Sciarratta's attorney stated, "I don't think there are any new facts," the court sustained the

demurrer without leave to amend and subsequently entered a judgment dismissing her

first amended complaint with prejudice.

                                       DISCUSSION

                             I. THE STANDARD OF REVIEW

       "On appeal from a judgment of dismissal entered after a demurrer has been

sustained, this court reviews the complaint de novo to determine whether it states a cause

of action. [Citation.] We assume the truth of all material facts properly pleaded, but not

contentions, deductions or conclusions of fact or law." (Folgelstrom v. Lamps Plus, Inc.

(2011) 195 Cal. App. 4th 986, 989.) "'We may also consider matters that have been

judicially noticed. [Citations.]' [Citation.] '[W]hen the allegations of the complaint

contradict or are inconsistent with such facts, we accept the latter and reject the former.'"

(Tucker v. Pacific Bell Mobile Services (2012) 208 Cal. App. 4th 201, 210.)

II. A HOMEOWNER WHO HAS BEEN FORECLOSED ON BY ONE PURPORTING TO
     EXERCISE RIGHTS UNDER A VOID ASSIGNMENT SUFFERS SUFFICIENT
  PREJUDICE TO STATE A CAUSE OF ACTION FOR WRONGFUL FORECLOSURE
       A. Wrongful Foreclosure

       A wrongful foreclosure is a common law tort claim. It is an equitable action to set

aside a foreclosure sale, or an action for damages resulting from the sale, on the basis that

                                                11
the foreclosure was improper. (See Miles, supra, 236 Cal.App.4th at pp. 408-409.) The

elements of a wrongful foreclosure cause of action are: "'(1) [T]he trustee or mortgagee

caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a

power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but

not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where

the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount

of the secured indebtedness or was excused from tendering.'" (Id. at p. 408.) "[M]ere

technical violations of the foreclosure process will not give rise to a tort claim; the

foreclosure must have been entirely unauthorized on the facts of the case." (Id. at p.

409.) "[A]ll proximately caused damages may be recovered." (Id. at p. 410.)

       "[O]nly the entity currently entitled to enforce a debt may foreclose on the

mortgage or deed of trust securing that debt . . . ." (Yvanova, supra, 62 Cal.4th at p. 928.)

"It is no mere 'procedural nicety,' from a contractual point of view, to insist that only

those with authority to foreclose on a borrower be permitted to do so." (Id. at p. 938.)

       Here, implicitly invoking these principles, Sciarratta alleges that the entity entitled

to enforce the debt was Deutsche Bank, but the entity that foreclosed was Bank of

America. Specifically, she alleges that in April 2009 Deutsche Bank became the owner

of her promissory note and trust deed by assignment from Chase. Sciarratta alleges that

the subsequent purported assignments of the note and trust deed by Chase to Bank of

America in November 2009 and again in December 2009 were void because Chase had

previously assigned the note and trust deed to Deutsche Bank. Thus, Sciarratta alleges

Bank of America had no right to foreclose because it never became a beneficiary of her

deed of trust.

                                              12
       Based on these allegations, which are supported by the judicially noticeable

recorded documents, Sciarratta alleges the November 2009 nonjudicial foreclosure "was

held by an entity [other] than the owner of the Subject Note and holder of the Subject

Deed of [T]rust, [Bank of America], whom [sic] had no right to hold said sale or submit a

credit bid thereon and as a result the sale is void and of no effect." In more colloquial

terms, Sciarratta's appellate brief asserts, "There is no question that as of the date of the

sale Bank of America had no right to hold a foreclosure sale of the Subject Property as

the owner of the note and deed of trust was Deutsche [Bank] as of April 24, 2009."8

8       As an alternative and inconsistent theory of liability, Sciarratta's first amended
complaint also alleges that Deutsche Bank was not assigned the note and deed of trust,
and therefore its purported substitution of trustee (substituting CRC for Quality Loan
Service) was ineffective. On this alternative theory, foreclosure is alleged to be wrongful
because the trustee initiating the foreclosure, CRC, allegedly lacked authority to do so.
        However, in her brief, Sciarratta has elected to not address this alternative theory
in any meaningful way, limiting her discussion of this point to a single paragraph
containing no citation to the record and scant analysis. Instead, she focuses on the theory,
discussed in the text ante, that WaMu assigned her promissory note and trust deed to
Deutsche Bank, but Bank of America foreclosed.
        For example, Sciarratta's briefs state: (1) "The public record leaves no doubt that
the entity that held the sale was not the holder of the note or beneficiary of the deed of
trust" (italics added); (2) "This is a case where the public record leaves no doubt that the
foreclosure sale was held by an entity that was not the holder of the note or beneficiary of
the deed of trust at issue" (italics added); (3) "There is no question that as of the date of
the sale Bank of America had no right to hold a foreclosure sale of the Subject Property
as the owner of the note and deed of trust was Deutsche [Bank] as of April 24, 2009"
(italics added); (4) "[T]here is no question that as of the date of the sale the true holder of
the note was Deutsche [Bank]" (italics added); (5) "[A]t the time of the sale the holder of
the note and beneficiary of the deed of trust was Deutsche [Bank]."
        Similarly, in the trial court Sciarratta's lawyer stated, "The facts are very clear and
very simple. Deutsche Bank was the owner of this loan according to the public record at
the time of this sale. And Deutsche Bank did not hold this sale. There was no dispute
about that. Bank of America did."
        Given these unequivocal assertions and Sciarratta's failure to develop the
inconsistent alternative theory in her brief, we do not address whether the first amended
complaints states a viable cause of action on an alternative theory that the "wrong" trustee
                                              13
       B. Sciarratta Alleges a Void Assignment

       "A void contract is without legal effect." (Yvanova, supra, 62 Cal.4th at p. 929.)

"A voidable transaction, in contrast, 'is one where one or more parties have the power, by

a manifestation of election to do so, to avoid the legal relations created by the contract, or

by ratification of the contract to extinguish the power of avoidance.'" (Id. at p. 930.)

       Yvanova holds that a borrower has legal authority—standing—"to claim a

nonjudicial foreclosure was wrongful because an assignment by which the foreclosing

party purportedly took a beneficial interest in the deed of trust was not merely voidable

but void, depriving the foreclosing party of any legitimate authority to order a trustee's

sale." (Yvanova, supra, 62 Cal.4th at pp. 942-943.)

       Here, Sciarratta's first amended complaint alleges that in November 2009, when

Chase purported to assign Sciarratta's promissory note and deed of trust to Bank of

America, Chase had nothing to assign, having previously (in April 2009) assigned the

promissory notes and deed of trust to Deutsche Bank. The documents properly subject to

judicial notice are consistent with these allegations. On April 27, 2009, Chase executed a

document entitled "Assignment of Deed of Trust" where it "hereby grants assigns and

transfers to Deutsche Bank . . . all beneficial interest under that certain Deed of

Trust . . . executed by Monica Sciarratta . . . [¶] [t]ogether with the note or notes therein

described . . . ." Approximately six months later, on November 3, 2009, Chase purported

to assign the same trust deed and promissory notes to Bank of America.

initiated foreclosure. (See Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc./Obayashi
Corp. (2003) 111 Cal. App. 4th 1328, 1345, fn. 16 [declining to address an alternative
theory not developed in the party's appellate brief].)
                                              14
       Chase, having assigned "all beneficial interest" in Sciarratta's notes and deed of

trust to Deutsche Bank in April 2009, could not assign again the same interests to Bank

of America in November 2009. (See California Bank & Trust v. Piedmont Operating

Partnership (2013) 218 Cal. App. 4th 1322, 1347 [once a claim has been assigned, unless

a contrary intention is shown, the assignment "'"vests in the assignee the assigned

contract or chose and all rights and remedies incidental thereto"'"].)

       Thus, assuming Sciarratta's allegations are true, as we must on review of the

demurrer, the assignment to Bank of America is void, and not merely voidable.

(Yvanova, supra, 62 Cal.4th at p. 935; Glaski, supra, 218 Cal.App.4th at p. 1097

[assignment void, not voidable, where entity invoking the power of sale was not the

holder of the deed of trust]; see Culhane v. Aurora Loan Services of Nebraska (1st Cir.

2013) 708 F.3d 282, 291 (Culhane) [a mortgage assignment is void, not merely voidable,

where the assignor "had nothing to assign" or "no interest to assign"]; Wilson v. HSBC

Mortgage Services, Inc. (1st Cir. 2014) 744 F.3d 1, 9 (Wilson).)9 As the Supreme Court

in Yvanova explained: "'A homeowner . . . has standing to challenge that assignment as

void because success on the merits would prove the purported assignee is not, in fact, the

mortgagee and therefore lacks any right to foreclose on the mortgage." (Yvanova, supra,

62 Cal.4th at pp. 935-936.)

       Defendants' arguments to the contrary are not persuasive. Citing U.S. Hertz Inc. v.

Niobrara Farms (1974) 41 Cal. App. 3d 68, defendants contend the recording of an

assignment to Deutsche Bank "does not actually transfer an interest in property; it merely

9     In Yvanova, the Supreme Court cited Culhane and Wilson with approval.
(Yvanova, supra, 62 Cal.4th at pp. 935, 940.)
                                             15
serves as notice that a transfer has occurred." However, U.S. Hertz is materially

distinguishable because it involves a notice of substitution of trustee, not an assignment

of the deed of trust and promissory notes. It is in the context of a notice substituting a

trustee that the court states "such documents . . . grant no interest in real property. Their

main objective is notice . . . ." (Id. at p. 85.)

       Defendants also contend the "[c]orrective [a]ssignment" recorded in December

2009 "demonstrated that beneficial interest had been assigned to Bank of America, not

Deutsche Bank." However, defendants cite no authority suggesting that as a matter of

law, the "[c]orrective [a]ssignment" recorded in December 2009 has any relevant legal

effect on the nonjudicial foreclosure occurring one month prior, in November 2009.

       Defendants also argue that the "[c]orrective [a]ssignment" shows that "[a]t most"

Chase "made procedural errors on the documents regarding the identity of the

beneficiary, and that Chase later corrected these errors." However, this is an appeal from

a judgment of dismissal after a demurrer was sustained, where we are required to assume

the truth of the facts plaintiff has alleged. Defendants cannot hijack Sciarratta's first

amended complaint, delete allegations not to their liking, insert other contrary allegations

such as this one about a mere "procedural error[]", and contend the resulting pleading

they have cobbled together fails to state a cause of action. Sciarratta alleges that at the

time of the nonjudicial foreclosure sale, Deutsche Bank was the assignee and Bank of

America was not. The judicially noticeable documents do not contradict these

allegations.

       Defendants also contend that Sciarratta's complaint admits that Deutsche Bank

was not the assignee and never held a beneficial interest in the deed of trust. However,

                                                16
the allegation defendants highlight is not contained in Sciarratta's cause of action for

wrongful foreclosure, but rather in her cause of action to quiet title. In any event, an

allegation that Deutsche Bank never held a legal or equitable interest in the property is

not necessarily inconsistent with an allegation that Bank of America also did not.

         In sum, we hold that Sciarratta has alleged the nonjudicial foreclosure was

wrongful because an assignment by which the foreclosing party, Bank of America,

purportedly took a beneficial interest in the deed of trust was void. Therefore, under

Yvanova, Sciarratta has standing to assert such a claim.10

         C. Sciarratta Has Adequately Alleged Prejudice for Wrongful Foreclosure

         Sciarratta contends prejudice or harm, beyond the allegedly wrongful foreclosure

itself, should not be required to be alleged in order to state a cause of action for wrongful

foreclosure where, as here, it is alleged the foreclosing beneficiary's interest is void. We

agree.

         A homeowner experiences prejudice or harm when an entity with no interest in the

debt forecloses. When a non-debtholder forecloses, a homeowner is harmed because he

or she has lost her home to an entity with no legal right to take it. If not for the void

assignment, the incorrect entity would not have pursued a wrongful foreclosure.

Therefore, the void assignment is the cause-in-fact of the homeowner's injury and all he

or she is required to allege on the element of prejudice. The critical issue is not the

10     Because Sciarratta alleges a void as distinguished from a voidable assignment, she
is excused from having to allege tender as an element of her wrongful foreclosure cause
of action. (Yvanova, supra, 62 Cal.4th at p. 929, fn. 4 ["Tender has been excused
when . . . the plaintiff alleges the foreclosure deed is facially void, as arguably is the case
when the entity that initiated the sale lacked authority to do so."].)
                                              17
plaintiff's ability to pay, but rather whether the defendant's conduct resulted in the

plaintiff's harm; i.e., a foreclosure that was wrongful because it was initiated by a person

or entity having no legal right to do so; i.e. holding void title. As the Supreme Court

stated in Yvanova, "the bank or other entity that ordered the foreclosure would not have

done so absent the allegedly void assignment. Thus, '[t]he identified harm—the

foreclosure—can be traced directly to [the foreclosing entity's] exercise of the authority

purportedly delegated by the assignment.'" (Yvanova, supra, 62 Cal.4th at p. 937.)

       There are also strong policy reasons favoring this approach. A contrary rule

would lead to a legally untenable situation—i.e., that anyone can foreclose on a

homeowner because someone has the right to foreclose. "And since lenders can avoid the

court system entirely through nonjudicial foreclosures, there would be no court oversight

whatsoever." (Miles, supra, 236 Cal.App.4th at p. 410.) Moreover, giving

homeowners—who have the most at stake and the most to lose—the ability to challenge

improper loan assignments as being absolutely void will provide a proper incentive to

lending institutions to employ due diligence to properly document assignments and

confirm who currently holds a loan. "The consequences of wrongfully evicting someone

from their home are too severe to be left unchecked." (Ibid.)

       Cases cited by defendants that reach a contrary result did not have the benefit of

the Supreme Court's decision in Yvanova and as a result incorrectly and exclusively focus

on the plaintiff's ability to have avoided any foreclosure. For example, in Fontenot v.

Wells Fargo Bank, N.A. (2011) 198 Cal. App. 4th 256 (Fontenot) disapproved on other

grounds (standing) in Yvanova, supra, 62 Cal.4th at page 939, footnote 13, the court

found that plaintiff had failed to demonstrate prejudice resulting from an allegedly

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improper transfer of her debt because the plaintiff conceded she was in default, did not

allege the transfer interfered with her ability to pay her debt, and did not allege the

original lender would have refrained from foreclosure. (Fontenot, supra, at p. 272.)

       Similarly, in Herrera v. Federal National Mortgage Assn. (2012) 205 Cal. App. 4th
1495 (Herrera), disapproved on other grounds (standing) in Yvanova, supra, 62 Cal.4th

at page 939, footnote 13, the court found that the plaintiffs could not demonstrate

prejudice where they had defaulted on their loan and could not cure the default.

(Herrera, supra, 205 Cal.App.4th at p. 1508.)

       Thus, Fontenot and Herrera interpret prejudice narrowly to mean the plaintiff

must demonstrate that she could have avoided foreclosure. These cases are inconsistent

with the policies underlying the standing rule in Yvanova: "The borrower owes money

not to the world at large but to a particular person or institution, and only the person or

institution entitled to payment may enforce the debt by foreclosing on the security."

(Yvanova, supra, 62 Cal.4th at p. 938.) Fontenot and Herrera also ignore the fact that the

wrongful nature of the foreclosure alleged here would require the sale to be unwound, at

least where there are no intervening third-parties. (See Miles, supra, 236 Cal.App.4th at

p. 408 ["The basic elements of a tort cause of action for wrongful foreclosure track the

elements of an equitable cause of action to set aside a foreclosure sale."]) In her

wrongful foreclosure cause of action, Sciarratta seeks such a remedy, alleging an

entitlement not only to money damages, but also "a declaration that the sale of the

Subject Property by . . . [Bank of America] . . . was a void act of no legal effect."

       Fontenot and Herrera also fail to recognize that the measure of damages for

wrongful foreclosure is the familiar measure of tort damages: all proximately caused

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damages. "Wrongfully foreclosing on someone's home is likely to cause other sorts of

damages, such as moving expenses, lost rental income . . . and damage to credit. It may

also result in emotional distress . . . ." (Miles, supra, 236 Cal.App.4th at p. 409.) We are

not suggesting that any of these damages will be actually recoverable here. It may be that

Sciarratta has no such damages. It may be that any such damages are entirely offset by

the benefit of being free from a loan with unfavorable terms, the benefits of apparently

living rent-free during this litigation, or some other reason(s).11 These issues are not

before us and we express no opinion one way or the other. However, Sciarratta has

alleged she sustained compensatory damages in excess of $25,000 as a result of the

wrongful foreclosure. For purposes of overcoming a demurrer in this case on the issue of

prejudice, that allegation is sufficient. Therefore, the court erred in sustaining the

demurrer to Sciarratta's first cause of action for wrongful foreclosure.

             III. QUIET TITLE AND CANCELLATION OF INSTRUMENTS

       The trial court sustained defendants' demurrer to Sciarratta's cause of action for

quiet title on the grounds that "payment of the debt owed (tender) is a necessary element

for a quiet title cause of action." The court sustained the demurrer to Sciarratta's cause of

action for cancellation of instruments on the grounds that action "is dependent on the

[first] and [second] causes of action."

       The court erred in sustaining the demurrer to Sciarratta's causes of action for quiet

title and cancellation of instruments. Because Sciarratta properly alleged the foreclosure

was void and not merely voidable, tender was not required to state a cause of action for

11     In response to a question at oral argument, Sciarratta's lawyer stated Sciarratta still
resides in the home.
                                              20
quiet title or for cancellation of instruments. (Glaski, supra, 218 Cal.App.4th at p. 1100

[homeowner not required to allege tender in causes of action for wrongful foreclosure,

cancellation of instruments, and quiet title where the foreclosure sale is void rather than

voidable].)

       In her opening brief, Sciarratta addresses the issues in this case only as they relate

to her cause of action for wrongful foreclosure, not quiet title or cancellation of

instruments. There is no separate heading in her brief asserting the court erred in

sustaining the demurrer to her causes of action for quiet title or cancellation of

instruments.

       Ordinarily, therefore, any contentions regarding the correctness of the trial court's

ruling sustaining the demurrer to these two other causes of action would be abandoned.

(Ram v. OneWest Bank FSB (2015) 234 Cal. App. 4th 1, p. 21, fn. 2 [where demurrer

sustained without leave to amend, appellant's failure to raise arguments in connection

with one of several causes of action is deemed abandonment of that cause of action].)

       However, in addressing the tender issue in the context of wrongful foreclosure,

Sciarratta argued tender is not required because Bank of America's purported assignment

is void and not merely voidable. In her opening brief, Sciarratta cited, among other

authorities, Glaski, supra, 218 Cal.App.4th at page 1100, which, as noted ante, also

applies the rule excusing tender in void transactions to causes of action for quiet title and

cancellation of instruments.

       Therefore, Sciarratta addressed the determinative legal issue, and cited authority

for its application to quiet title and cancellation of instruments, albeit in the context of

wrongful foreclosure. As a result, Defendants were on notice that Sciarratta was arguing

                                              21
she was excused from alleging tender, and that she was relying on Glaski, supra, 218
Cal. App. 4th 1079 for that proposition. Indeed, Defendants argued the tender issue in

their respondents' brief.

       Because the issue of tender was fully examined by both Sciarratta and

Defendants, there is no sound reason to apply the ordinary rule of forfeiture for

Sciarratta's failure to separately address the trial court's rulings on these two causes of

action. Accordingly, the judgment of dismissal of those two causes of action must also

be reversed.

                                       DISPOSITION

       The judgment is reversed and the matter is remanded for further proceedings.

Monica Sciarratta shall recover her costs on appeal.

                                                                                   NARES, J.

WE CONCUR:

HUFFMAN, Acting P. J.

O'ROURKE, J.

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