Court Opinion

ID: 4700207
Source: CourtListenerOpinion
Date Created: 2021-06-30 22:04:07.675098+00
Date Added: 2024-06-11T08:06:08.652945
License: Public Domain

Filed 6/30/21 Courtois v. Mortgage Electronic Registration Systems 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                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

 KRISTI COURTOIS,                                                     D078198

           Plaintiff and Appellant,

           v.
                                                                      (Super. Ct. No. 37-2017-
 MORTGAGE ELECTRONIC                                                  00010745-CU-OR-NC)
 REGISTRATION SYSTEMS, INC.,

           Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of San Diego County,
Jacqueline M. Stern, Judge. Affirmed.
         Law Offices of Ronald H. Freshman and Ronald H. Freshman for
Plaintiff and Appellant.
         Akerman LLP, Justin D. Balser and Lauren R. Lee for Defendant and
Respondent.

         Kristi Courtois sued several financial institutions, alleging they were
threatening to pursue a nonjudicial foreclosure proceeding they lacked
authority to pursue. The trial court granted judgment on the pleadings to
defendant Mortgage Electronic Registration Systems, Inc. (MERS) on the
grounds Courtois’s lawsuit was an impermissible preemptive challenge to a
nonjudicial foreclosure, and that she failed to allege facts establishing MERS
lacked assignment authority. Well-settled authority supports the trial court’s
rulings in these regards. In addition, our de novo review of Courtois’s
operative complaint further reveals her claims are time-barred. Accordingly,
we affirm the judgment.
            FACTUAL AND PROCEDURAL BACKGROUND
                                  The Loan
      In April 2006, Courtois borrowed $215,200 from Countrywide Home
Loans, Inc. (Countrywide) to purchase property in Carlsbad (the Property).
She secured the loan against the Property, as evidenced by a deed of trust
recorded with the county recorder’s office on April 20, 2006.
      The deed of trust identified MERS as the beneficiary under the
instrument.1 The deed of trust specified that MERS’s role as beneficiary is
“solely as nominee for Lender and Lender’s successors and assigns . . . and

1      The following description of MERS from caselaw is consistent with
Courtois’s description of MERS in her pleadings: “MERS is a private
corporation that administers a national registry of real estate debt interest
transactions. Members of the MERS System assign limited interests in the
real property to MERS, which is listed as a grantee in the official records of
local governments, but the members retain the promissory notes and
mortgage servicing rights. The notes may thereafter be transferred among
members without requiring recordation in the public records. [Citation.] [¶]
Ordinarily, the owner of a promissory note secured by a deed of trust is
designated as the beneficiary of the deed of trust. [Citation.] Under the
MERS System, however, MERS is designated as the beneficiary in deeds of
trust, acting as ‘nominee’ for the lender, and granted the authority to exercise
legal rights of the lender.” (Fontenot v. Wells Fargo Bank, N.A. (2011) 198
Cal.App.4th 256, 267.)

                                       2
the successors and assigns for MERS.” Courtois acknowledged in the deed of
trust that she “understands and agrees that MERS,” as “nominee for Lender
and Lender’s successors and assigns,” may “exercise . . . the right to foreclose
and sell the Property.”
      In September 2011, MERS publicly recorded an assignment of deed of
trust (the First Assignment) assigning all beneficial interest under the deed
of trust to Bank of America as “successor by merger” to Countrywide.
      In May 2012, Bank of America publicly recorded an assignment of deed
of trust (the Second Assignment) assigning all beneficial interest under the
deed of trust to Deutsche Bank National Trust Company (Deutsche Bank), as
trustee for holders of the GSAA Home Equity Trust 2006-11 Asset-backed
Certificates Series 2006-11.
      The same day the Second Assignment was recorded, on May 31, 2012,
Recontrust Company (Recontrust), as agent for “the present beneficiary” of
the deed of trust, publicly recorded a notice of default and election to sell
under deed of trust (First Default Notice). This notice stated Courtois was
nearly $40,000 in arrears on her loan, and advised her that the Property
could be sold at a foreclosure sale “without any court action” (capitalization
and bolding omitted) unless she brought the loan current. The notice
instructed Courtois to contact Deutsche Bank “[t]o find out the amount [she]
must pay . . . to stop the foreclosure.”
      In September 2012 and May 2013, Recontrust publicly recorded notices
of trustee’s sales.
      In December 2016, a second notice of default and election to sell under
deed of trust (Second Default Notice) was publicly recorded, indicating
Courtois was more than $100,000 in arrears on her loan. The notice
identified NBS Default Services, LLC (NBS) as trustee for “the present

                                           3
beneficiary,” and Nationstar Mortgage, LLC (Nationstar) as the “loan
servicer.”
      In March 2017, NBS, as trustee, publicly recorded a second notice of
trustee’s sale.
      In December 2018, a new trustee, Affinia Default Services, LLC,
publicly recorded a notice of recission of the Second Default Notice.
                                The Lawsuit
Original Complaint
      In March 2017, Courtois filed a verified complaint against Bank of
America (as “successor in interest” to Countrywide), Recontrust, Deutsche
Bank, Nationstar, and Goldman Sachs Mortgage Corporation (Goldman
Sachs Mortgage). The complaint did not name MERS.
      Courtois alleged that “parties without right or authority are
threatening nonjudicial foreclosure if she refuses to pay them, even though
[they] are not valid, legal owners of the debt.” She asserted they were not the
valid owners of the debt because the chain of title through which they all
claimed an interest in her deed of trust flowed through the First Assignment
from MERS to Bank of America, which she claimed was invalid.
      Specifically, Courtois alleged that before she took the loan,
Countrywide had already agreed with Goldman Sachs Mortgage that the loan
would be sold to a related Goldman Sachs entity (Goldman Sachs Mortgage
Securities) and securitized through a real estate mortgage investment trust.
The sale to Goldman Sachs Mortgage Securities allegedly occurred in June
2006. Courtois alleged that neither Goldman Sachs Mortgage Securities nor
the securitization trust had any membership relationship with MERS, such
that MERS “held no legal right to act as the ‘beneficiary solely as nominee’ in
executing the [First] [A]ssignment” to Bank of America in 2011.

                                       4
      By extension, Courtois alleged that because “the [Second Assignment]
relies upon the authority of [the First Assignment],” Bank of America lacked
authority to assign the deed of trust to Deutsche Bank in 2012, when the first
round of nonjudicial foreclosure proceedings began.
First Amended Complaint
      In January 2019, Courtois moved for leave to amend her complaint to
add MERS as a defendant. She explained in the motion that third-party
discovery obtained from MERS showed that MERS had no interest in the
deed of trust to assign in 2011 because the loan had already been sold to
Goldman Sachs Mortgage Securities, which was not a member of MERS;
thus, MERS “held [no] right to transfer interest in the deed of trust to any
entity.” Based on MERS’s alleged lack of any interest to assign, Courtois
argued MERS’s act of recording the First Assignment created “a cloud on
title” subject to cancelation, and giving rise to claims for slander of title and
violation of the unfair competition law (Bus. & Prof. Code, § 17200; the UCL).
The trial court granted Courtois leave to amend her complaint to add these
claims.
      In February 2019, Courtois filed her first amended complaint asserting
the aforementioned claims and seeking declaratory relief. In support, she
alleged Countrywide sold her loan to Goldman Sachs Mortgage Securities in
June 2006, and that “MERS held no agency agreement, termed as a
membership or otherwise, with [Goldman Sachs] Mortgage Securities,” such
that MERS “ceased being the beneficiary [of the deed of trust], solely as
nominee, upon transfer of the debt and Note.” Thus, “MERS was without
authority or legal right to execute and record the [First] [A]ssignment” five
years later in 2011.

                                         5
      Each of Courtois’s causes of actions against MERS was based on this
alleged lack of authority.
      Courtois alleged her claims against MERS—all based on MERS’s
conduct in 2011—were not time-barred because (1) the “delayed discovery
rule” tolled the statute of limitations until she learned through third-party
discovery that MERS held no interest in her loan in 2011 when MERS
purported to assign it, and (2) the lingering threat of foreclosure proceedings
constituted “an ongoing harm.”
             MERS’s Motion for Judgment on the Pleadings
      MERS moved for judgment on the pleadings on the following grounds:
(1) Courtois could not preemptively challenge a nonjudicial foreclosure;
(2) Courtois could not validly allege that MERS lacked assignment authority;
(3) Courtois’s claims were time-barred; and (4) each claim failed on its
individual merits.
      Courtois opposed MERS’s motion on each ground.
      The trial court granted MERS’s motion on the grounds Courtois’s
claims were an improper preemptive challenge to a nonjudicial foreclosure,
and that she failed to allege facts establishing MERS lacked assignment
authority. The court did not reach MERS’s statute of limitations defense, or
the merits of the individual claims. The court denied Courtois leave to
amend.
                                  Judgment
      After denying a motion for new trial in which Courtois essentially
reargued the motion for judgment on the pleadings, the trial court entered a
judgment of dismissal in MERS’s favor.

                                       6
                                 DISCUSSION
                            I. Standard of Review
      “ ‘A judgment on the pleadings in favor of the defendant is appropriate
when the complaint fails to allege facts sufficient to state a cause of action’ ”
(People ex rel. Harris v. Pac Anchor Transp., Inc. (2014) 59 Cal.4th 772, 777),
or shows “on its face [it] is barred by the statute of limitations” (Hunt v.
County of Shasta (1990) 225 Cal.App.3d 432, 440; see SLPR, L.L.C. v. San
Diego Unified Port District (2020) 49 Cal.App.5th 284, 316 (SLPR)). “ ‘A
motion for judgment on the pleadings is equivalent to a demurrer and is
governed by the same de novo standard of review.’ ” (Pac Anchor Transp.,
Inc., at p. 777.) “ ‘All properly pleaded, material facts are deemed true, but
not contentions, deductions, or conclusions of fact or law . . . .’ ” (Ibid.) We
may consider judicially noticeable matters. (Ibid.)
      “We review a court’s denial of leave to amend a complaint on sustaining
a demurrer for abuse of discretion.” (SLPR, supra, 49 Cal.App.5th at p. 317;
see Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) “The
plaintiff has the burden of proving that an amendment would cure the
defect.” (Schifando, at p. 1081; see SLPR, at p. 317.)
               II. Failure to State a Valid Claim for Relief
      All of Courtois’s claims against MERS arise from the allegation MERS
lacked authority to execute the First Assignment in 2011 because
Countrywide sold Courtois’s loan in 2006 to a Goldman Sachs entity that was
not a member of MERS’s network. The trial court properly granted MERS’s
motion for judgment on the pleadings because the courts have routinely
rejected preemptive preforeclosure challenges, and have specifically rejected
the challenge Courtois raises as to MERS’s assignment authority.

                                         7
      In Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808
(Saterbak), 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.) Our 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
[our court holding that the plaintiff’s preforeclosure 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”].)
      Our court in Saterbak recognized that the Supreme Court in Yvanova
v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova) 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 postforeclosure (rather than
preforeclosure), 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.”].)
      The courts have applied Saterbak’s reasoning to bar a variety of causes
of action typically asserted in preemptive preforeclosure lawsuits challenging

                                         8
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. 626, 628 [“A borrower cannot assert a California-law
claim for cancellation of instruments in a preemptive pre-foreclosure
action.”];2 Ruegsegger v. Caliber Home Loans, Inc. (C.D. Cal., Apr. 30, 2018,
No. SA CV 17-0907-DOC (KESx)) 2018 WL 5993857, at *20 [“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., May 14, 2021, No. 19-56383) 2021 WL
1944382, at *1 [“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.”].)
      Courtois alleged in the first substantive paragraph of her first amended
complaint that she is “bring[ing] this complaint . . . on the basis that parties
without right or authority are threatening nonjudicial foreclosure if she
refuses to pay them, even though [they] are not valid, legal owners of the
debt.” This brings her claims squarely within the scope of Saterbak’s
prohibition on preemptive preforeclosure challenges. Accordingly, the trial
court properly granted MERS’s motion for judgment on the pleadings on this
basis. Further, the court acted within its discretion in denying Courtois leave
to amend.
      Additionally, courts have repeatedly rejected preemptive preforeclosure
lawsuits specifically challenging MERS’s authority to assign deeds of trust.

2    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.)

                                         9
The California Court of Appeal rejected a similar challenge in Herrera
v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, explaining:
“Plaintiffs argue MERS lacked authority to assign the [deed of trust] to [a
third lender] because [the FDIC and an intervening second lender], the
successors and assigns of the original lender, . . . did not have an agency
agreement with MERS. But this does not necessarily defeat the foreclosure
sale because plaintiffs agreed in the [deed of trust] that MERS had the right
to exercise all rights of the lender, including foreclosing on and selling
plaintiffs’ property.” (Id. at p. 1505, disapproved of on another ground by
Yvanova, supra, 62 Cal.4th at p. 939, fn. 13.) The Herrera court relied on
language in the deed of trust that is virtually identical to the language in
Courtois’s deed of trust: that the borrower “agrees that MERS,” as “nominee
for Lender and Lender’s successors and assigns,” may “exercise . . . the right
to foreclose and sell the Property.” (Herrera, at pp. 1503, 1505.)
      The Ninth Circuit Court of Appeals reached a similar conclusion on
similar reasoning in Ancheta v. Mortgage Electronic Registration Systems,
Inc. (9th Cir. 2018) 730 Fed.Appx. 509. The Ninth Circuit concluded the
district court properly dismissed the plaintiff’s claim premised on “[MERS]’s
alleged lack of ‘agency relationship’ with the beneficiary.” (Ibid.) The district
court had specifically rejected the plaintiff’s theory that “MERS lost its
authority to make assignments during the course of [a] securitization process
because of the sale of the note from” one lender, who was a member of MERS,
to another lender, who was not a member of MERS. (Ancheta v. Mortgage
Electronic Registration Systems, Inc. (N.D. Cal., Mar. 29, 2017, No. 16-CV-
06520-TGR) 2017 WL 1164288, at p. *5; see also Miller-Swift v. Mortgage
Electronic Registration Systems, Inc. (9th Cir. 2019) 783 Fed.Appx. 750, 751

                                       10
[rejecting plaintiff’s theory that “MERS . . . ‘exited the chain of title’ as a
result of an assignment of the note to a non-MERS member”].)
      Likewise, federal district courts in California have repeatedly rejected
substantially similar challenges to MERS’s authority. For example, in Fung
v. BSI Financial Services (N.D. Cal., Nov. 7, 2017, No. 16-CV-07194-JSW)
2017 WL 8948335, the court rejected the plaintiffs’ “argu[ment] that MERS
could not act as nominee because the loan had been sold to [other lenders],
neither of which were MERS members.” (Id. at p. *4.) The court reasoned,
“This argument is . . . contrary to the plain language of the Deed of Trust,
which . . . provides that MERS has the authority to act for [the original
lender]’s successors and assigns. [Citation.] This authority was in no way
conditional on whether the successors and assigns were MERS members.”
(Ibid.; see also Avila v. Wells Fargo Bank, National Association (N.D. Cal.,
Dec. 23, 2016, No. C 16-05904 WHA) 2016 WL 7425925 at p. *3 [rejecting the
plaintiff’s “argu[ment] that MERS’[s] authority as nominee was vitiated
because Goldman Sachs Mortgage Company, the initial assignee of [the
lender], was not a member of the MERS registry”]; Ratliff v. JPMorgan Chase
Bank N.A. (N.D. Cal., July 6, 2017, No. 17-CV-02155-EMC) 2017 WL
2876141, at *8 & fn. 3 [dismissing postforeclosure challenge because “even if
the loan was transferred to [a] securitized trust” that was not a member of
MERS, MERS was still authorized to act because the deed of trust
“contemplates MERS acting as nominee ‘for Lender and Lender’s successors
and assigns’ ”].)
      Because Courtois’s deed of trust includes the same language that
countless courts have found fatal to similar challenges to MERS’s assignment
authority, we likewise find the language fatal to Courtois’s challenge.

                                         11
      Accordingly, the trial court properly granted MERS’s motion for
judgment on the pleadings without leave to amend.
                        III. Statute of Limitations
      Additionally, although the trial court did not reach the issue when
ruling on MERS’s motion, we further conclude MERS was entitled to
judgment on the pleadings because the face of Courtois’s first amended
complaint shows her claims against MERS are time-barred. (SLPR, supra,
49 Cal.App.5th at p. 317 [judgment on the pleadings “ ‘will be affirmed if
proper on any grounds stated in the [motion], whether or not the court acted
on that ground’ ”]; see Martinez v. San Diego County Credit Union (2020) 50
Cal.App.5th 1048, 1059.)
      The first amended complaint reveals on its face that all of Courtois’s
claims against MERS are based on MERS’s allegedly wrongful act of
recording the First Assignment in 2011. The longest statute of limitations
applicable to any of Courtois’s claims is four years.3 Thus, unless otherwise
extended, the limitations period lapsed in 2015. Courtois did not sue MERS
until 2019. Thus, on their face, her claims are time-barred.
      Courtois argues the limitations periods were extended under the
“delayed discovery rule,” and because the harm to her is “continuing” or
“ongoing.” We disagree.

3     The statute of limitations on a claim for slander of title is three years.
(Code Civ. Proc., § 338, subd. (g).) The statute of limitations on a claim for
cancellation of instruments is, at most, four years. (Robertson v. Superior
Court (2001) 90 Cal.App.4th 1319, 1326 [three years if fraud-based, otherwise
four years].) The statute of limitations on a UCL claim is four years. (Bus. &
Prof. Code, § 17208.) And the statute of limitations on a declaratory relief
claim is “the same limitations period as the underlying legal or equitable
claim.” (JPMorgan Chase Bank, N.A. v. Ward (2019) 33 Cal.App.5th 678,
686.)

                                      12
                           A. Delayed Discovery
                             1. Legal Principles
      The delayed discovery rule “postpones accrual of a cause of action until
the plaintiff discovers, or has reason to discover, the cause of action.” (Fox
v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox).) “A plaintiff
has reason to discover a cause of action when he or she ‘has reason at least to
suspect a factual basis for its elements.’ ” (Ibid.) “[W]e do not take a
hypertechnical approach to the application of the discovery rule. Rather than
examining whether the plaintiffs suspect facts supporting each specific legal
element of a particular cause of action, we look to whether the plaintiffs have
reason to at least suspect that a type of wrongdoing has injured them.”
(Ibid.)
      “The discovery rule only delays accrual until the plaintiff has, or should
have, inquiry notice of the cause of action. [P]laintiffs 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.” (Fox,
supra, 35 Cal.4th at pp. 807-808, italics and fn. omitted.) Put differently, a
plaintiff is on inquiry notice when “he at least suspects . . . that someone has
done something wrong to him, ‘wrong’ being used, not in any technical sense,
but rather in accordance with its ‘lay understanding.’ ” (State of California ex
rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 417.)
      “In order to rely on the discovery rule for delayed accrual of a cause of
action, ‘[a] plaintiff whose complaint shows on its face that his claim would be

                                       13
barred without the benefit of the discovery rule must specifically plead facts
to show (1) the time and manner of discovery and (2) the inability to have
made earlier discovery despite reasonable diligence.’ [Citation.] In assessing
the sufficiency of the allegations of delayed discovery, the court places the
burden on the plaintiff to ‘show diligence’; ‘conclusory allegations will not
withstand demurrer.’ ” (Fox, supra, 35 Cal.4th at p. 808.)
      “[B]elated discovery is usually a question of fact, but may be decided as
a matter of law when reasonable minds cannot differ.” (Blanks v. Seyfarth
Shaw LLP (2009) 171 Cal.App.4th 336, 375.)
                                 2. Analysis
      Courtois has not established she is entitled to the benefit of the delayed
discovery rule. The gravamen of all of her claims is that MERS lacked the
authority to record the First Assignment in 2011 because Countrywide had
previously sold her loan in 2006 to a Goldman Sachs entity that was not a
member of MERS. If the First Assignment was ever unauthorized, it was
unauthorized when MERS recorded it in 2011. (See Stalberg v. Western Title
Ins. Co. (1994) 27 Cal.App.4th 925, 929-930 [plaintiff’s claim for slander of
title accrued when the allegedly void document was recorded].)4 Reasonable
minds cannot differ that Courtois was on inquiry notice regarding alleged
irregularities in the chain of title for her deed of trust in 2012 when
“strangers” to her loan commenced nonjudicial foreclosure proceedings
against her by publicly recording the First Default Notice. Yet, Courtois did
not sue MERS until more than four years later.

4      Courtois acknowledged in her briefing to the trial court that, absent
tolling, “[a]rguably the date of recording an instrument (that is found to be
void) may trigger SOL for slander of title . . . .”

                                       14
      Courtois argues her delayed filing is justified by the fact she did not
learn until she obtained third-party discovery from MERS in this case that
the Goldman Sachs entities that acquired her loan in 2006 were not members
of MERS and, thus, MERS had no authority in 2011 to execute the First
Assignment. She claims she was unable to discover this information sooner
because it was concealed in MERS’s private records. Courtois’s own
allegations belie this claim.
      First, Courtois alleged in her first amended complaint that “public
records demonstrate the [First] Assignment . . . contains false statements
claiming the deed of trust was assigned to [Bank of America], by MERS.”
(Italics added.) She fails to explain, as required, which public records she is
referring to, or why she could not have discovered them sooner. (See Fox,
supra, 35 Cal.4th at p. 808.)
      Second, Courtois’s allegations in her original complaint demonstrate
she was aware before she obtained discovery from MERS that (1) her loan was
“sold to [Goldman Sachs Mortgage] in 2006,” (2) Goldman Sachs Mortgage
“holds no membership with MERSCorp,” and (3) “therefore, MERS Database
held no legal right to act as the ‘beneficiary solely as nominee’ in executing
the [First] [A]ssignment.” This is the crux of all of her claims against MERS
in the first amended complaint.
      The fact that Courtois did not substantiate her allegations regarding
MERS’s lack of authority until she obtained discovery from MERS is of no
moment. Her prior allegations reveal she harbored a suspicion, which is all
that is required to trigger the statute of limitations. (Jolly v. Eli Lilly & Co.
(1988) 44 Cal.3d 1103, 1111 [“A plaintiff need not be aware of the specific
‘facts’ necessary to establish the claim; that is a process contemplated by
pretrial discovery.”].)

                                        15
      Courtois argues in her appellate briefing that “she had no suspicion
anything untoward was happening with her title until she filed her initial

lawsuit against the parties for . . . unlawful dual tracking,”5 at which point
“her then attorney did an investigation into the loan” and first “formed a
belief that the assignment by MERS was void.” This argument fails to
identify the specific information uncovered by that investigation, or, more
importantly, explain why it could not have been uncovered sooner (e.g., when
the First Assignment was recorded in 2011, or when the Second Assignment
and First Default Notice were recorded in 2012).
      In short, Courtois’s allegations in her original complaint belie the
factual basis for her claim to the delayed discovery rule. Consequently,
traditional statute of limitations accrual principles apply, and Courtois’s
claims accrued, at the latest, in 2012. Thus, her assertion of claims against
MERS in 2019 was untimely under even the longest applicable limitations
period (four years).6
                           B. Continuing Harm
      Courtois also argues her claims are timely because “her harm is
continuing and has not stopped” inasmuch as she remains at risk of being
foreclosed upon based on void documents that originated with MERS’s
allegedly wrongful First Assignment. However, the recurring or ongoing

5     “Dual tracking” refers to a lender proceeding with a foreclosure sale
while simultaneously evaluating the defaulted borrower’s application for a
loan modification. (See Jolley v. Chase Home Finance, LLC (2013) 213
Cal.App.4th 872, 904.)

6      Even if Courtois’s claims against MERS related back to 2017 when she
filed her original complaint against the other defendants, her claims would
still be untimely—more than four years elapsed between the latest possible
accrual in 2012, and her filing suit in 2017.

                                       16
conduct at issue in the cases she cites to support her argument bear no
similarity to MERS’s isolated act here. (See Richards v. CH2M Hill, Inc.
(2001) 26 Cal.4th 798, 823 [disability discrimination in employment]; Wyatt
v. Union Mortgage Co. (1979) 24 Cal.3d 773, 786 [last overt act in a civil
conspiracy to commit an ongoing fraud]; Aryeh v. Canon Business Solutions,
Inc. (2013) 55 Cal.4th 1185, 1200-1201 [recurring imposition of fraudulent
charges for copier rental]; Gilkyson v. Disney Enterprises, Inc. (2016) 244
Cal.App.4th 1336, 1341 [recurring duty to pay music royalties].)
      By contrast, Courtois’s claims against MERS all arise from a single act
MERS undertook in 2011, of which Courtois was or should have been aware
by 2012 when she received the First Default Notice. (See Stalberg v. Western
Title Ins. Co. (1991) 230 Cal.App.3d 1223, 1230 [“A cause of action for slander
of title accrues, and the statute begins to run, when plaintiff could reasonably
be expected to discover the existence of the claim.”].)
      Accordingly, Courtois has not met her burden to establish that her
claims were subject to delayed accrual on a continuing harm theory. (See
Eghtesad v. State Farm General Ins. Co. (2020) 51 Cal.App.5th 406, 411
[appellant’s burden to show error, even on de novo review].)
                                DISPOSITION
      The judgment is affirmed. Courtois to bear MERS’s costs on appeal.

                                                                   HALLER, J.

WE CONCUR:

McCONNELL, P. J.

DO, J.

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