Court Opinion

ID: 4122401
Source: CourtListenerOpinion
Date Created: 2017-02-01 20:02:34.899088+00
Date Added: 2024-06-11T07:46:22.122752
License: Public Domain

Filed 2/1/17
                        CERTIFIED FOR PARTIAL PUBLICATION*

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                               THIRD APPELLATE DISTRICT
                                         (Sacramento)
                                              ----

ANDREW KALNOKI et al.,                                                  C073207

                 Plaintiffs and Appellants,                       (Super. Ct. No.
                                                            34201100097598CUWEGDS)
        v.

FIRST AMERICAN TRUSTEE SERVICING
SOLUTIONS, LLC et al.,

                 Defendants and Respondents.

ANDREW G. KALNOKI et al.,                                               C075062
                                                                        C079144
                 Plaintiffs and Appellants,

        v.

WELLS FARGO BANK N.A. et al.,

                 Defendants and Respondents.

     APPEAL from judgments of the Superior Court of Sacramento County, David I.
Brown and Robert C. Hight, Judges. Affirmed in part and reversed in part.

        Andrew G. Kalnoki for plaintiffs and appellants.

* Pursuant to California Rules of Court, rules 8.1105 and 8.1110, this opinion is certified
for publication with the exception of parts I, II, III, IV, VI, VII, VIII, IX, X, XI, XII, XIII,
XIV, XV, XVI, and XVII of the Discussion.

                                               1
       Law Offices of Glenn H. Wechsler, Glenn H. Wechsler and Natalie Sperry
Mandelin for Defendants and Respondents First American Trustee Servicing Solutions
and First American Title Insurance Company;
       Dawe & Christopherson, Dean A. Christopherson, for Defendants and
Respondents Wells Fargo Bank, N.A. and U.S. Bank National Association.

       Plaintiffs Andrew and Kathi Kalnoki (the Kalnokis) appeal from a judgment
dismissing their second amended complaint for wrongful foreclosure-related causes of
action after the trial court sustained the defendants’ demurrers without leave to amend
(case No. C073207, or the foreclosure appeal). They separately appealed from an order
after judgment awarding attorney fees to defendants (case No. C075062, or the attorney
fees appeal), and also from an order disbursing funds the Kalnokis deposited with the
court under Code of Civil Procedure section 1170.5 to delay the trial in an unlawful
detainer action filed against them regarding the residential property at issue here (case
No. C079144, or the rental disbursement appeal). We consolidated all three appellate
cases for argument and decision.
       Finding that the Kalnokis failed to allege a cause of action on any theory, we shall
affirm the judgments dismissing the second amended complaint with prejudice. We also
conclude the trial court properly awarded attorney fees. We find, however, that the court
erred in disbursing to Wells Fargo the rental funds on deposit with the court. We
therefore reverse the rental disbursement order and order that the funds be returned to the
Kalnokis.

                               FACTS AND PROCEEDINGS

       A.     The Foreclosure Appeal (Case No. C073207)

       Because this case comes to us on demurrer, we accept the truth of material facts
properly pleaded in the operative second amended complaint--a 70-page document
containing 400 separate paragraphs and incorporating over 30 pages of attached exhibits-

                                             2
-but not contentions, deductions, or conclusions of fact or law in that pleading. (Yvanova
v. New Century Mortgage Corp. (2016) 62 Cal. 4th 919, 924 (Yvanova).) We may also
consider matters subject to judicial notice. (Ibid.) Although lengthy, convoluted, and rife
with conclusory allegations, the second amended complaint alleges as follows:
         In February 2004, the Kalnokis refinanced their home in Carmichael, California
(the home or the property), with Wells Fargo Home Mortgage, Inc., by obtaining a
$405,000 refinance loan (the loan), which they used for their home and to pay down
some existing consumer debt. They allege they were enticed to leave their previous
lender by false promises of later being able to easily modify the new adjustable rate loan.
         The loan was secured by a deed of trust on the home naming the Kalnokis as the
borrower, Wells Fargo Home Mortgage, Inc. as the lender and beneficiary, and Fidelity
National Title Ins. Co. as the trustee. The deed of trust was recorded with the
Sacramento County Recorder on February 17, 2004.
         Under the deed of trust, the Kalnokis “irrevocably grant[ed] and convey[ed] [the
property] to Trustee, in trust, with power of sale” in the event they defaulted on the loan.
The lender, at its option, had the ability to appoint a successor trustee by an instrument
executed and acknowledged by the lender and recorded in the recorder’s office in
Sacramento County. The lender also had the right to sell the note evidencing the loan or
a partial interest in the note together with the deed of trust one or more times without
prior notice to the borrower.
         In May 2004, Wells Fargo Home Mortgage, Inc. merged with defendant Wells
Fargo Bank, N.A. (Wells Fargo). Following the merger, Wells Fargo succeeded to the
assets and liabilities of Wells Fargo Home Mortgage, Inc. and the latter entity ceased to
exist.
         In December 2009, after suffering several personal hardships, the Kalnokis fell
behind on their loan payments. In March 2010, the Kalnokis forwarded a check to cover

                                              3
one month’s payment, but Wells Fargo declined the check as it was insufficient to bring
the account current. The Kalnokis did not make any further mortgage payments.
       After defaulting, the Kalnokis applied several times to Wells Fargo to modify their
loan. Wells Fargo either lost or failed to process their modification applications. During
the modification process, Wells Fargo employees repeatedly told the Kalnokis that their
mortgage was owned by EMC Mortgage Corporation and that Wells Fargo was merely
the loan servicer.
       On March 30, 2010, defendant First American Title Insurance Company (FATCO)
as “attorney-in-fact” for defendant First American LoanStar Trustee Services LLC
(Loanstar) executed a notice of default and election to sell (Notice of Default) for the
deed of trust. The Notice of Default identified Loanstar “as agent for the current
beneficiary” of the deed of trust. Loanstar later changed its name to First American
Trustee Servicing Solutions, LLC. For convenience, we shall refer to both entities as
Loanstar.
       Attached to the Notice of Default was a declaration stating that the requirements
of Civil Code section 2923.5 had been met. John Kennerty, identified as the Vice
President of Loan Documentation for Wells Fargo Home Mortgage, executed the
declaration on March 24, 2010. The Notice of Default was recorded in Sacramento
County on April 2, 2010.
       On April 1, 2010, Wells Fargo, through its attorney in fact FATCO, executed a
substitution of trustee (Substitution) substituting Loanstar as the new trustee on the deed
of trust. The first page of the Substitution identifies the original beneficiary as Wells
Fargo Home Mortgage, Inc. It also identifies Wells Fargo as the present beneficiary.
The signature block on the second page includes the following: “Wells Fargo Bank, NA
Successor by Merger to Wells Fargo Home Mortgage By First American Title Insurance
Company as Attorney in Fact.” Like the Notice of Default, the Substitution was recorded
in Sacramento County on April 2, 2010.

                                              4
        On June 16, 2010, without the Kalnokis knowledge, Wells Fargo assigned the
deed of trust and the note (the Assignment) to defendant U.S. Bank, N.A. (U.S. Bank), as
Trustee for the Bear Stearns ARM Grantor Trust, Series 2005-2, a common law trust
organized under New York trust Law (Bear Stearns securitized trust). The Bear Stearns
securitized trust was governed by a pooling and services agreement that had specific
requirements for transferring property into the trust.
        FATCO executed the Assignment as “attorney in fact” for Wells Fargo as the
“beneficiary” under the deed of trust. Wells Fargo is identified in the signature block as
“successor by merger to Wells Fargo Home Mortgage, Inc.” The Assignment was
recorded in Sacramento County on June 21, 2010.
        On July 3, 2010, Loanstar as trustee executed a notice of trustee’s sale (Notice of
Sale) for the Kalnokis’ home. The Notice of Sale set a trustee’s sale for July 26, 2010,
and listed the outstanding balance owed on the loan as $407,839.32. The Notice of Sale
was recorded in Sacramento County on July 6, 2010.
        Attached to the Notice of Sale was a declaration executed by Marsha Graham that
declared the mortgage loan servicer had obtained an exemption from certain statutory
time limits for giving notice of the sale. Ms. Graham signed the declaration on June 17,
2009, as an Assistant Vice President of Wells Fargo Home Mortgage, Inc.
        A nonjudicial foreclosure sale was held on February 22, 2011, and U.S. Bank was
the successful bidder. Loanstar as trustee issued a Trustee’s Deed Upon Sale to U.S.
Bank, which was recorded in the Sacramento County Recorder’s Office on March 1,
2011.
        The Kalnokis filed this action the day of the trustee’s sale to block the foreclosure
sale. Three days later, the Kalnokis filed an amended complaint alleging 15 causes of
action, including fraud, intentional and negligent infliction of emotional distress,
violations of various foreclosure statutes as well as the Uniform Commercial Code,
breach of the implied covenant of good faith and fair dealing, declaratory relief,

                                              5
conspiracy, violations of California’s Rosenthal Fair Debt Collection Practices Act
(Rosenthal Act) and Business and Professions Code section 17200, unjust enrichment and
rescission, and for a stay of proceedings. They later substituted U.S. Bank in as a “Doe”
defendant.
       Following the foreclosure sale, U.S. Bank filed a separate unlawful detainer action
against the Kalnokis. The Kalnokis moved to stay the unlawful detainer action or
otherwise consolidate it with their wrongful foreclosure case. The court granted the
motion to consolidate the two actions, with the wrongful foreclosure action designated as
the lead case, on the condition that the Kalnokis deposit damage payments with the court
pursuant to Code of Civil Procedure section 1170.5 to delay the trial on the unlawful
detainer action while the wrongful foreclosure case was pending. The Kalnokis
stipulated to deposit monthly payments of $1,950, which represented the fair market
rental value of the property.
       Loanstar and FATCO jointly demurred to the amended complaint. Wells Fargo
separately filed a demurrer in which U.S. Bank joined. The court first sustained the joint
demurrer of Wells Fargo and U.S. Bank with prejudice as to the causes of action based on
Civil Code sections 2923.5 and 2923.6 and UCC 3-104, stay of proceedings, and
violation of the Rosenthal Act. The Kalnokis were given leave to amend all remaining
causes of action. The court’s ruling on the joint demurrer of Loanstar and FATCO was
the same plus it also sustained the demurrer without leave to amend for the breach of the
implied covenant of good faith and fair dealing cause of action and allowed the Kalnokis
to allege a cause of action under the Federal Fair Debt Collection Practices Act.
       In October 2011, the Kalnokis filed their second amended complaint with the deed
of trust, Notice of Default, Substitution, Assignment, Notice of Sale, and Trustees’ Deed
Upon Sale attached as exhibits. The Kalnokis also attached a letter from Wells Fargo
rejecting their check for one month’s mortgage payment since it was insufficient to bring
the default current.

                                             6
        The second amended complaint alleged four fraud causes of action and causes of
action for conspiracy, declaratory relief, unjust enrichment, and for violating Business
and Professions Code section 17200, Civil Code section 2932.5, and the Federal Fair
Debt Collection Practices Act. We note that the cause of action for violating the federal
Fair Debt Collection Practices Act was removed to federal court, and we need not discuss
it further.
        The crux of the second amended complaint was that the nonjudicial foreclosure
sale was wrongful because the underlying documents such as the Assignment,
Substitution, Notice of Default, Notice of Sale, and Trustee’s Deed Upon Sale, were
allegedly fraudulent or otherwise invalid. The Kalnokis also claimed that irregularities in
the Assignment to the Bear Stearns securitized trust, which purportedly violated the
trust’s pooling and servicing agreement, meant that the deed of trust was never properly
assigned to U.S. Bank.
        Defendants demurred to the second amended complaint, arguing that the pleading
failed to state facts sufficient to state any cause of action. Defendants argued Loanstar’s
acts as trustee were subject to statutory privilege, the foreclosure documents were
properly prepared and that any alleged irregularities were not prejudicial, the Kalnokis
lacked standing to raise issues regarding the validity of the Assignment to the Bearn
Stearns securitized trust as they were neither parties to the Assignment nor beneficiaries
under the trust, and that the Kalnokis did not tender the delinquent amount owing on the
loan. FATCO and Loanstar asked the court to judicially notice the deed of trust,
Substitution, Notice of Default, Assignment, Notice of Sale, Trustee’s Deed Upon Sale,
and the court’s minute order sustaining their demurrer to the amended complaint. Wells
Fargo and U.S. Bank also asked the court to judicially notice the second amended
complaint, deed of trust, documents from the California Comptroller of Currency and
Secretary of State confirming the merger between Wells Fargo Home Mortgage, Inc. and
Wells Fargo, documents from the Texas Secretary of State showing Loanstar’s name

                                             7
change, the minute orders sustaining the demurrers to the amended complaint, the order
dismissing the Kalnokis’ federal claim, and a list of licensees that were exempt from
Civil Code section 2923.52, subdivision (a) from the California Secretary of State’s
website.
       After granting defendants’ respective requests for judicial notice, the court
sustained the demurrers without leave to amend. The Kalnokis moved for
reconsideration and for leave to file a proposed third amended complaint. The proposed
third amended complaint had ballooned to 116 pages, consisting of 752 separate
paragraphs and 13 causes of action. Because the Kalnokis failed to precisely identify the
allegations intended to be deleted and added to the proposed third amended complaint as
required by court rules, the court denied the motion.
       The court entered a judgment of dismissal with prejudice in favor of defendants
FATCO and Loanstar on January 25, 2013. A separate judgment of dismissal with
prejudice in favor of defendants Wells Fargo and U.S. Bank was entered on February 19,
2013. The Kalnokis appealed both judgments (the foreclosure appeal or case No.
C073207). They also filed two motions for sanctions against defendants’ counsel for
purportedly relying on “perjured” foreclosure documents and “fraudulent” arguments in
opposing the appeal.

       B.     The Attorney Fees Appeal (Case No. C075062)

       Following the entry of judgment, Wells Fargo and U.S. Bank moved for attorney
fees based on provisions in the deed of trust and the accompanying note. They sought
$31,570 in fees. The Kalnokis opposed the motion, generally rehashing the arguments on
the demurrers and also asserting that attorney fees were improper because there was no
privity of contract between themselves and defendants, they did not assert any contract
causes of action, and that the promissory note and deed of trust might not be true and

                                             8
correct copies of the originals. The court rejected their arguments and granted the
motion, but reduced the requested amount to $14,500.
       The Kalnokis appealed the order granting attorney fees (the attorney fees appeal or
case No. C075062). In that appeal, the Kalnokis filed a motion for sanctions against
defense counsel, which the court denied. (See Motion for Sanctions in the attorney fees
appeal, filed March 4, 2014; see also Order denying motion for sanctions dated
March 27, 2014.) The Kalnokis then filed another motion for sanctions contending that
because defendants’ underlying motion for attorney fees was purportedly frivolous their
brief on appeal was “fraudulent and criminal” thus warranting sanctions.

       C.     The Rental Disbursement Appeal (Case No. C079144)

       After the judgments of dismissals were entered, Wells Fargo and U.S. Bank
moved to sever the unlawful detainer action from the wrongful foreclosure action. Over
the Kalnokis’ objections, the court granted the motion. U.S. Bank then moved for
summary judgment in the unlawful detainer action. The court granted the motion and
awarded possession of the property to U.S. Bank. The unlawful detainer judgment
includes the following notation: “The plaintiff waives all monetary damages.”
       The Kalnokis appealed the unlawful detainer judgment in the appellate division of
the superior court. The judgment was affirmed. Following remittitur, the superior court
appellate decision was deemed final.
       The Kalnokis then filed a petition for writ of mandate in this court seeking to set
aside the unlawful detainer judgment and the order granting summary judgment in favor
of U.S. Bank. The petition was denied.
       In January 2015, Wells Fargo and U.S. Bank moved the trial court to disburse the
$40,950 the Kalnokis had deposited with the court under Code of Civil Procedure section
1170.5 to delay the pending unlawful detainer action. The Kalnokis opposed the motion,
generally reasserting their demurrer arguments and also claiming that U.S. Bank

                                             9
voluntarily waived any right to damages in the unlawful detainer judgment. They also
asked the court to distribute the $40,950 to them. The court granted Wells Fargo and
U.S. Bank’s motion to disburse, and ordered that the funds be immediately disbursed to
Wells Fargo through its counsel. The Kalnokis appealed (the rental disbursement appeal
or case No. C079144).
       All three appeals have been consolidated for argument and decision. The
Kalnokis’ three remaining sanction motions have also been consolidated for decision.

                                       DISCUSSION

                                              I

                                     General Principles

       “ ‘The financing or refinancing of real property in California is generally
accomplished by the use of a deed of trust.’ ” (Rossberg v. Bank of America, N.A. (2013)
219 Cal. App. 4th 1481, 1491 (Rossberg).) A deed of trust that secures a loan typically
has three parties: “the trustor (borrower), the beneficiary (lender), and the trustee.”
(Yvanova, supra, 62 Cal.4th at p. 926.) The deed of trust “ ‘conveys title to real property
from the trustor-debtor to a third party trustee to secure the payment of a debt owed to the
beneficiary-creditor under a promissory note.’ ” (Rossberg, supra, 219 Cal.App.4th at
p. 1491.)
       “ ‘The trustee holds a power of sale. If the debtor defaults on the loan, the
beneficiary may demand that the trustee conduct a nonjudicial foreclosure sale.’ ”
(Yvanova, supra, 62 Cal.4th at p. 926.) Thus, while a trustee initiates the nonjudicial
foreclosure sale, it may do so “only at the direction of the person or entity that currently
holds the note and the beneficial interest under the deed of trust--the original beneficiary
or its assignee--or that entity’s agent.” (Id. at p. 927; Civil Code, § 2924, subd. (a)(1)
[notice of default may be filed for record only by “[t]he trustee, mortgagee, or

                                              10
beneficiary, or any of their authorized agents”]; unless otherwise set forth, statutory
section references that follow are to the Civil Code.)
       California’s nonjudicial foreclosure scheme is set forth in Civil Code sections
2924 through 2924l, which “ ‘provide a comprehensive framework for the regulation of a
nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.’ ”
(Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal. App. 4th 1149, 1154 (Gomes).)
To commence a nonjudicial foreclosure, a trustee records a notice of default and election
to sell. (§ 2924, subd. (a)(1).) 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).)
       The statutory provisions for conducting a nonjudical foreclosure “ ‘cover every
aspect of exercise of the power of sale contained in a deed of trust.’ ” (Gomes, supra,
192 Cal.App.4th at p. 1154.) Given the “ ‘exhaustive nature’ ” of the statutory
framework, “ ‘California appellate courts have refused to read any additional
requirements into the non-judicial foreclosure statute.’ ” (Ibid.) We thus presume that a
nonjudicial foreclosure sale was conducted regularly. (Lona v. Citibank, N.A. (2011)
202 Cal. App. 4th 89, 105 (Lona).) The party challenging the nonjudicial foreclosure sale
must rebut the presumption of regularity by presenting substantial evidence of prejudicial
procedural irregularity. (Ibid.; Fontenot v. Wells Fargo Bank, N.A. (2011)
198 Cal. App. 4th 256, 270 (Fontenot), disapproved on other grounds by Yvanova, supra,
198 Cal.4th at p. 939, fn. 13.)

                                             II

                                      Judicial Notice

       The trial court’s rulings sustaining the demurrers were based on taking judicial
notice of recorded documents that, to an extent, contradicted the allegations in the second

                                             11
amended complaint. These documents included the deed of trust, Substitution, Notice of
Default, Assignment, Notice of Sale, and Trustee’s Deed Upon Sale, among others.
        The Kalnokis contend these documents are hearsay and that the court could not
accept the documents and any facts asserted in them for their truth. To support their
argument, they cite Herrera v. Deutsche Bank National Trust Co. (2011)
196 Cal. App. 4th 1366 (Herrera v. Deutsche Bank), in which this court reversed a grant of
summary judgment on the ground that the trial court improperly took judicial notice of
statements made within recorded documents in a challenge to a nonjudicial foreclosure
sale.
        “ ‘ “ ‘Judicial notice is the recognition and acceptance by the court, for use by the
trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an
issue in the action without requiring formal proof of the matter.’ ” ’ ” (Fontenot, supra,
198 Cal.App.4th at p. 264.) “We review the trial court’s ruling on the request for judicial
notice for abuse of discretion.” (Ibid.)
        At the outset, we note that Paragraph 203 of the second amended complaint
concedes these documents are “true and correct” copies of the originals, “join[s] in”
defendant’s request for judicial notice, and “agree[s]” that the court should “take Judicial
Notice of those documents.” In Paragraph 204, the Kalnokis “incorporated” the
documents “word for word” into the second amended complaint, and asked that the court
supply any missing facts from those documents. The Kalnokis’ claim that the court erred
in so doing is thus not well taken. (Transport Ins. Co. v. TIG Ins. Co. (2012)
202 Cal. App. 4th 984, 1000 [“ ‘Under the doctrine of invited error, when a party by its
own conduct induces the commission of error, it may not claim on appeal that the
judgment should be reversed because of that error’ ”].)
        In any event, it is well settled that courts may take judicial notice of recorded
deeds of trust, substitutions of trustees, and assignments of deed of trust as these
documents are generally considered reliable and easily confirmable. (Yvanova, supra,

                                               12
62 Cal.4th at p. 924, fn.1; Fontenot, supra, 198 Cal.App.4th at pp. 264-265.) “[T]he fact
of a document’s recordation, the date the document was recorded and executed, the
parties to the transaction reflected in a recorded document, and the document’s legally
operative language, assuming there is no genuine dispute regarding the document’s
authenticity” are all judicially noticeable. (Fontenot, at p. 265.) “From this, the court
may deduce and rely upon the legal effect of the recorded document, when that effect is
clear from its face.” (Ibid.)
       In Yvanova, for example, the Supreme Court took judicial notice of the existence
and facial contents of the recorded deed of trust, assignment of the deed of trust,
substitution of trustee, notices of default and of trustee’s sale, and trustee’s deed upon
sale. (Yvanova, supra, 62 Cal.4th at p. 924, fn. 1.) In Fontenot, the court took judicial
notice of the fact a party was beneficiary from a first deed of trust, explaining that the
party’s status as beneficiary was not a matter of fact existing apart from the document
itself; the party was beneficiary under the deed of trust because, as a legally operative
document, the deed of trust designated the party as beneficiary. (Fontenot, supra,
198 Cal.App.4th at p. 266.) In Scott v. JP Morgan Chase Bank, N.A. (2013)
214 Cal. App. 4th 743, 752 (Scott), the court took judicial notice of several documents
(and facts therein), including a federal government order appointing the Federal Deposit
Insurance Corporation (FDIC) as Washington Mutual’s receiver and a Purchase &
Assumption Agreement, which provided that the FDIC transferred to JPMorgan assets of
Washington Mutual but not certain liabilities of the defunct bank because that was the
legal effect of the documents.
       Herrera v. Deutsche Bank, which the Kalnokis cite, does not persuade us the court
erred. That case involved a challenge to a nonjudicial foreclosure sale where the
plaintiffs claimed the foreclosing bank and the trustee were not the beneficiary and
trustee under a 2003 deed of trust on the property. (Herrera v. Deutsche Bank, supra,
196 Cal.App.4th at p. 1368.) The 2003 deed of trust listed Long Beach Mortgage

                                              13
Company as trustee and beneficiary. (Id. at p. 1371.) To establish that the proper parties
had foreclosed, the trial court was asked to take judicial notice of an assignment of deed
of trust that assigned “all interest under the 2003 deed of trust to the [foreclosing] bank
by JPMorgan Chase Bank, as successor in interest to Washington Mutual Bank, successor
in interest to Long Beach Mortgage Company,” and a substitution of trustee executed by
the foreclosing bank, which showed the foreclosing bank, as beneficiary, had substituted
a new trustee. (Id. at p. 1374.)
          The trial court granted the request and took judicial notice of the fact that the
foreclosing bank was the beneficiary under the 2003 deed of trust based on statements
within the substitution of trustee form and the assignment of deed of trust. (Herrera v.
Deutsche Bank, supra, 196 Cal.App.4th at pp. 1373-1374.) We reversed, finding it was
improper to take judicial notice of the fact that the foreclosing bank was the beneficiary
based on the substitution of trustee form because the recital in the document that the bank
“is the present beneficiary” was hearsay and disputed. (Id. at p. 1375.) The substitution
of trustee form itself did not designate the beneficiary but only contained a recital about
the beneficiary. (Ibid.) It was improper to take judicial notice based on the assignment
of the deed of trust because, even though the document recited that the bank was assigned
all beneficial interest under the deed of trust by a predecessor bank, its recital that the
predecessor bank was successor to the original beneficiary was hearsay, so the overall
truthfulness of the assignment of the deed of trust remained subject to dispute as well.
(Ibid.) The foreclosing bank had offered “no evidence to establish that JPMorgan Chase
Bank had the beneficial interest under the 2003 deed of trust to assign to the Bank.”
(Ibid.)
          Unlike the Kalnokis contend, Herrera v. Deutsche Bank did not hold that judicial
notice cannot be taken of the legal effect of a legally operative document (like an
assignment of deed of trust or substitution of trustee); “it simply held that it could not be
done in that case, because the vitality of the assignment was reasonably subject to dispute

                                                14
without independent proof that the party assigning the interest had the authority to do so.”
(Scott, supra, 214 Cal.App.4th at p. 756 [distinguishing Herrera v. Deutsche Bank on this
ground]; see also Fontenot, supra, 198 Cal.App.4th at pp. 266-267 & fn. 7 [same].) In
this case, we conclude the court properly took judicial notice of the recorded deed of
trust, Substitution, Assignment, Notice of Default, Notice of Sale, and Trustee’s Deed
Upon Sale, as well as of facts derived from the legally operative effects of these
documents, which are discussed more fully below.
       Furthermore, because the Kalnokis attached the deed of trust, Notice of Default,
Substitution, Assignment, Notice of Sale, and the Trustee’s Deed Upon Sale as exhibits
to the second amended complaint, the court was also entitled to take notice of the
attached exhibits and the facts contained in those exhibits when ruling on the demurrers.
(Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal. App. 4th 1443, 1447 (Holland)
[“We may also take notice of exhibits attached to the complaint[]”].) The court was also
amply justified in accepting facts in those exhibits over contradictory allegations in the
second amended complaint. (Ibid. [“If facts appearing in the exhibits contradict those
alleged, the facts in the exhibits take precedence”]; SC Manufactured Homes, Inc. v.
Liebert (2008) 162 Cal. App. 4th 68, 83 [“If the allegations in the complaint conflict with
the exhibits, we rely on and accept as true the contents of the exhibits”]; Weitzenkorn v.
Lesser (1953) 40 Cal. 2d 778, 785-786 [“ ‘The general rule is that when a written
instrument which is the foundation of a cause of action or defense is attached to a
pleading as an exhibit and incorporated into it by proper reference, the court may, upon
demurrer, examine the exhibit and treat the pleader’s allegations of its legal effect as
surplusage.’ [Citation.]”].)
       We next turn to the Kalnokis’ multiple requests for judicial notice on appeal. In
their opening brief in the foreclosure appeal, the Kalnokis asked us to take judicial notice
of Collateral Term Sheets, Form 8-K on the website of the Securities and Exchange
Commission (SEC). After Wells Fargo and U.S. Bank opposed the request as improper

                                             15
under rules 8.54 and 8.252 of the California Rules of Court, the Kalnokis filed a motion
for judicial notice asking us to notice (1) a 1099A tax form, which they claim shows
Freddie Mac owned the property on the date of the foreclosure sale, and (2) the Collateral
Term Sheets, which they argue “conclusively establish[es]” that the Wells Fargo Trust
was the true beneficiary or owner of the Kalnokis’ deed of trust and not Wells Fargo or
U.S. Bank as trustee for the Bear Stearns securitized trust.
       We grant the Kalnokis’ request for judicial notice of the certified Collateral Term
Sheets. (Evid. Code, § 452, subds. (c) & (h).) Public disclosure documents required by
law to be filed, and actually filed, with the SEC are subject to judicial notice. (Bryant v.
Avado Brands, Inc. (11th Cir. 1999) 187 F.3d 1271, 1277-1278 & fn.10 (Bryant).)
       We deny their request to take judicial notice of the 1099A tax form, however. The
Kalnokis have failed to establish that this document is a proper subject for judicial notice.
(Evid. Code, § 452.) It is not clear from the request how the Kalnokis obtained a copy of
the document. Mr. Kalnokis’ declaration in support of the request states only, “I [Mr.
Kalnoki] know that the document attached hereto as Exhibit B, is a true and correct copy
of the 1099A Tax Form that Wells Fargo Bank, NA, prepared under oath and submitted
to the Internal Revenue Service . . . .” He provides no basis for such purported
knowledge, and the document bears no official certification from the Internal Revenue
Service.
       While the tax form is attached as Exhibit C to a proposed third amended complaint
the Kalnokis sought leave to file, which the court denied, nothing in the allegations sheds
light on the document’s origin or whether it was actually filed with the Internal Revenue
Service as the Kalnokis’ claim. The 1099A tax form was also attached to Mr. Kalnokis’
declaration filed in opposition to the motion to disburse the rental funds on deposit with
the court. His declaration, however, states only that he “believe[s] that the 1099A Tax
Form is conclusive proof that as of February 22, 2011, the owner of the Kalnokis’ home
was Freddie Mac, as is stated therein, and not U.S. Bank, NA, as was fraudulently

                                             16
claimed by it.” Without more, Mr. Kalnokis’ unsubstantiated assertions that he knows
Wells Fargo filed the 1099A tax form under penalty of perjury with the Internal Revenue
Service are insufficient.
       In any event, we do not agree that the documents establish what the Kalnokis
allege. As Herrera v. Deutsche Bank pointed out, “ ‘[t]aking judicial notice of a
document is not the same as accepting the truth of its contents or accepting a particular
interpretation of its meaning.’ ” (Herrera v. Deutsche Bank, supra, 196 Cal.App.4th at
p. 1375.) Unlike the documents discussed above, neither the Collateral Term Sheets nor
the 1099A tax form are legally operative documents for purposes of establishing the
beneficiary of the deed of trust. (Bryant, supra, 187 F.3d at pp. 1277-1278 & fn.10
[public disclosure documents filed with the SEC may be judicially noticed for the
purpose of determining what statements the documents contain but not to prove the truth
of the documents’ contents].) The documents, then, do not “conclusively establish” the
identity of the beneficiary at relevant times during the foreclosure proceedings like the
Kalnokis contend.
       We note that the Kalnokis originally moved to augment the record with the
Collateral Term Sheets. We initially denied the request on the grounds that the
documents had not been presented to the trial court. The Kalnokis then filed a motion to
set aside our order denying the motion to augment, claiming that a copy of the Collateral
Term Sheets printed from the Securities and Exchange Commission’s website were
attached as an exhibit to the Kalnokis’ supplemental opposition when challenging the
motion for attorneys’ fees after the demurrers had been sustained without leave to amend.
A decision on the motion to set aside our prior ruling was deferred. Because all of the
appeals have been consolidated and both the Collateral Term Sheets and the 1099A tax
form appear in the rental disbursement record, reconsideration of the motion to augment
is moot.

                                             17
       In the attorney fees appeal, the Kalnokis filed a request for judicial notice of
multiple documents, including an excerpt from the memorandum of points and authorities
filed by Wells Fargo and U.S. Bank on the first demurrer and declarations of counsel
filed in the attorney fees appeal and in the rental disbursement appeal, all of which
already appear in the records for those appellate cases, as well as a portion of the
Collateral Term Sheets and other various documents the Kalnokis may have obtained in
the mail or printed from the internet. Wells Fargo and U.S. Bank opposed the request.
We denied the request for judicial notice; the attached materials were disregarded.
       They filed a second request for judicial notice of a document entitled Supplement
to Emergency Motion to Reopen for Additional Evidence that was allegedly filed in an
unrelated New York bankruptcy case as well as an attached document that was purported
to be a Wells Fargo Foreclosure Attorney Procedures Manual. Wells Fargo and U.S.
Bank opposed the request, arguing the documents were not the proper subject of judicial
notice and that the foreclosure manual constituted a privileged communication. We
denied the Kalnokis’ request for judicial notice, and ordered that the materials be
disregarded. We do not consider any of these documents in analyzing any of the issues
on appeal.

                                             III

                                    Standard of Review

       The purpose of a demurrer is to test the sufficiency of the pleadings to state a
cause of action as a matter of law. (Gomes, supra, 192 Cal.App.4th at p. 1153.) On
appeal from a dismissal entered after an order sustaining a demurrer, we review the order
de novo, exercising our independent judgment about whether the complaint states a cause
of action. (City of Morgan Hill v. Bay Area Air Quality Management Dist. (2004)
118 Cal. App. 4th 861, 869-870 (City of Morgan Hill).)

                                             18
       We must assume the truth of all properly pleaded facts as well as those that are
judicially noticeable, but we do not accept contentions, deductions or conclusions of fact
or law. (Herrera v. Federal National Mortgage Assn. (2012) 205 Cal. App. 4th 1495,
1501 (Herrera v. Federal National); City of Morgan Hill, supra, 118 Cal.App.4th at
pp. 869-870.) “We may also take notice of exhibits attached to the complaint[].”
(Holland, supra, 86 Cal.App.4th at p. 1447.) “If the allegations in the complaint conflict
with the exhibits, we rely on and accept as true the contents of the exhibits.” (SC
Manufactured Homes, Inc. v. Liebert, supra, 162 Cal.App.4th at p. 83; accord, Holland,
supra, 86 Cal.App.4th at p. 1447 [“If facts appearing in the exhibits contradict those
alleged, the facts in the exhibits take precedence”].)
       Where, as here, the trial court sustains the demurrer without leave to amend, we
must decide whether there is a reasonable possibility the plaintiffs can cure the defect
with an amendment. (Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal. App. 4th
497, 506 (Jenkins).) If it is reasonably possible that amendment can cure the defect, the
trial court abuses its discretion by not allowing a plaintiff to amend. Plaintiffs bear the
burden of proving an amendment would cure the defect. (Gomes, supra, 192 Cal.App.4th
at p. 1153.)

                                             IV

                                  Unsupported Arguments

       Before addressing the causes of action alleged in the relevant pleadings, we note
that the Kalnokis assert several arguments that they claim are common to all defendants,
but which are not supported by any citation to the record or citation to any authority.
These include that defendants engaged in real estate title laundering, double pledged
assets, and that the claims pursued by Wells Fargo might be owned by some insurance
company or the Federal Reserve that may have subrogation rights against the owners of

                                             19
the delinquent assets that were purchased. They further allege that there is no proof an
unnamed bankruptcy trustee for Freddie Mac approved the foreclosure.
       “Appellate briefs must provide argument and legal authority for the positions
taken. ‘When an appellant fails to raise a point, or asserts it but fails to support it with
reasoned argument and citations to authority, we treat the point as waived. [Citations.]’ ”
(Nelson v. Avondale Homeowners Assn. (2009) 172 Cal. App. 4th 857, 862 (Nelson) [court
declined to address argument on issue that appellant had failed to provide more than a
brief recitation of the argument in his appellate brief without supporting authority]; Niko
v. Foreman (2006) 144 Cal. App. 4th 344, 368 [“One cannot simply say the court erred,
and leave it up to the appellate court to figure out why”].)
       It is also incumbent on an appellant to cite to relevant portions of the record to
support factual allegations or arguments in a brief. “If a party fails to support an
argument with the necessary citations to the record, that portion of the brief may be
stricken and the argument deemed to have been waived.” (Duarte v. Chino Community
Hospital (1999) 72 Cal. App. 4th 849, 856 (Duarte); Fox v. Erickson (1950)
99 Cal. App. 2d 740, 742 (Fox) [“It is the duty of counsel to refer the reviewing court to
the portion of the record to which he objects and to show that the appellant was
prejudiced thereby”]; Cal. Rules of Court, rule 8.204, subd. (a)(C) [appellate briefs must
“[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”].)
       Given the Kalnokis’ cursory discussion of these issues, without citation to any
authority or any reference to the record, the arguments are forfeited.

                                               V

                                            Fraud

       The Kalnokis’ second amended complaint alleges four separate fraud causes of
action, one against each defendant. To withstand demurrer, facts constituting every

                                              20
element of fraud must be alleged with particularity. The elements of fraud are a false
representation of a material fact, knowledge of the falsity, intent to induce another to rely
on the representation, reliance, and resulting damages. (West v. JP Morgan Chase Bank,
N.A. (2013) 214 Cal. App. 4th 780, 792 (West); Tarmann v. State Farm Mut. Auto. Ins. Co.
(1991) 2 Cal. App. 4th 153, 157.) To assert a cause of action for fraud against a
corporation, a plaintiff must allege the name of the person who allegedly made the
fraudulent representation, his or her authority to speak, to whom he or she spoke, what
was said and when it was said. (Tarmann, at p. 157.) General or conclusory allegations
will not suffice to plead a cause of action for fraud. (West, at p. 793.)
       On appeal, the Kalnokis characterize their fraud causes of action as predicated
upon “documentary fraud.” Although rife with inflammatory rhetoric and conclusory
allegations, the gist of the second amended complaint is that all of the documents related
to the foreclosure process are fraudulent and invalid.

       A.     The Substitution of Trustee

       The Kalnokis first allege the Substitution to Loanstar is invalid because Wells
Fargo was merely the loan servicer and not the true beneficiary of the deed of trust when
it executed the Substitution through FATCO as its attorney in fact. They contend that as
the loan servicer Wells Fargo had no authority to substitute Loanstar as trustee. And
because Loanstar was not properly substituted, all subsequent acts as the purported
trustee were tainted thereby rendering the foreclosure proceedings invalid.
       The Kalnokis’ second amended complaint appears to posit two theories for the
allegation that Wells Fargo was not the beneficiary of the deed of trust when it made the
Substitution. The Kalnokis first allege that telephone operators for Wells Fargo told them
that the deed of trust was owned by EMC Mortgage Corporation and that Wells Fargo
was merely the loan servicer. Notably, in the original version of the complaint, the
Kalnokis alleged that the telephone operators with whom they spoke had no knowledge

                                             21
of their case, nor any authority to discuss modification of their loan. The second
amended complaint contains similar allegations that the telephone operators were
unqualified to discuss information pertaining to their delinquent loan.
        Next, the Kalnokis contend Wells Fargo did not succeed to the rights and interests
of Wells Fargo Home Mortgage, Inc. as the initial beneficiary of the deed of trust
following the merger of the two companies.
        In their briefing, the Kalnokis now attempt to assert a third theory, not alleged in
the second amended complaint, that the true owner of the deed of trust is actually Wells
Fargo Asset Securities Corporation, Mortgage Pass-Through Certificates, Series 2005-
AR3 (Wells Fargo Asset Securities Trust), which was purportedly controlled by Freddie
Mac. They claim that the Collateral Term Sheets and the 1099A tax form “conclusively”
prove Wells Fargo Asset Securities Trust is the true owner of their property.
        Based on the publicly recorded documents, however, the trial court concluded
Wells Fargo was the beneficiary under the deed of trust when it executed the challenged
Substitution. The court found that the exhibits attached to the second amended complaint
contradicted the Kalnokis’ allegation that Wells Fargo was not the beneficiary of the deed
of trust.
        The deed of trust specifically identifies the original beneficiary as Wells Fargo
Home Mortgage Inc. As a legally operative document designating the beneficiary
(Fontenot, supra, 198 Cal.App.4th at p. 266 [court did not err in taking judicial notice of
fact that MERS was the beneficiary of the first deed of trust]), the identity of Wells Fargo
Home Mortgage, Inc. as the original beneficiary is not reasonably subject to dispute. The
Kalnokis also alleged Wells Fargo Home Mortgage Inc. was the beneficiary under the
deed of trust.
        The Substitution substitutes Loanstar as trustee in place of Fidelity. The text of
the Substitution identifies Wells Fargo Home Mortgage, Inc. as the original beneficiary
and Wells Fargo as the present beneficiary. The signature block on the Substitution,

                                              22
however, recites that Wells Fargo is the “successor by merger” to Wells Fargo Home
Mortgage, and not Wells Fargo Home Mortgage, Inc. While the Kalnokis claim the
omission of the word “Inc.” after the words “Wells Fargo Home Mortgage” from the
signature block invalidates the Substitution, we disagree.
       Under the circumstances, it appears omitting the word “Inc.” from the signature
block was obviously a mere inadvertence or typographical error that was not material and
did not affect the validity of the Substitution. (Domino v. Mobley (1956) 144 Cal. App. 2d
24, 29 (Domino) [uncertainty from obvious typographical error regarding amount of note
in an escrow instruction contract could be resolved by extrinsic evidence].) Notably, the
signature block on the Assignment, executed only two months later, states: “Wells Fargo
Bank, N.A., Successor by Merger to Wells Fargo Home Mortgage, Inc., By First
American Title Insurance Company, Its Attorney in Fact, as Beneficiary.”
       And the Kalnokis themselves concede Wells Fargo Home Mortgage is only a
fictitious name under which Wells Fargo conducted business, and that a “merger”
between Wells Fargo and its fictitious name is legally impossible. Moreover, the fact of
the merger between Wells Fargo and Wells Fargo Home Mortgage, Inc., and the legal
effect of that merger, were supplied by other documents of which the court properly took
judicial notice. (Evid. Code, § 452, subds. (c), (h); Domino, supra, 144 Cal.App.2d at
p. 29].)
       Official records from the comptroller of the currency and the California Secretary
of State established that Wells Fargo Home Mortgage, Inc. merged into defendant Wells
Fargo in May 2004 and that Wells Fargo succeeded to all of its interests. (Evid. Code,
§ 452, subds. (c), (h); Scott, supra, 214 Cal.App.4th at p. 755 [trial court properly took
judicial notice of legal effects of government order appointing a receiver for an insolvent
bank and a Purchase and Assumption Agreement transferring the insolvent bank’s assets
but not its liabilities to an acquiring bank].) Notably, Paragraph 157 of the second
amended complaint alleges Wells Fargo Home Mortgage, Inc. ceased to exist on or about

                                             23
May 8, 2004--the same date reflected in the merger documents which the court judicially
noticed.
       Under the National Bank Consolidation and Merger Act (12 U.S.C. 215 et seq.),
the comptroller of the currency may be requested to approve a merger agreement reached
between a national banking association or a state bank, and a national bank located within
the same state. (12 U.S.C. § 215a, subd. (a)(4).) If the comptroller of the currency
approves the merger agreement, as occurred here, the charter of the receiving association
controls, and the receiving association is responsible for the liabilities of the bank or
association that was merged into the receiving association. (12 U.S.C. § 215a, subd.
(a)(4).) The receiving association “shall be deemed to be the same corporation as each
bank or banking association participating in the merger. All rights, franchises, and
interests of the individual merging banks or banking associations in and to every type of
property (real, personal, and mixed) and chooses in action shall be transferred to and
vested in the receiving association by virtue of such merger without any deed or other
transfer. The receiving association, upon the merger and without any order or other
action on the part of any court or otherwise, shall hold and enjoy all rights of property,
franchises, and interests, . . . , and all other rights and interests . . . , in the same manner
and to the same extent as such rights, franchises, and interests were held or enjoyed by
any one of the merging banks or banking associations at the time of the merger. . . .” (12
U.S.C. § 215a, subd. (e).) The merger agreement itself contains similar language,
providing the legal effect of the merger was that “all the properties, rights, privileges,
powers and franchises of [Wells Fargo Home Mortgage, Inc.] shall vest in the Surviving
Corporation [Wells Fargo]…”
       In May 2004, then, the comptroller of the currency had approved the merger
between Wells Fargo Home Mortgage, Inc. and Wells Fargo, and the latter entity
succeeded to the status of beneficiary of the deed of trust by operation of law and the
approved merger agreement. (12 U.S.C. § 215a, subd. (e).) These legally operative

                                                24
documents provided the link found missing in Herrera v. Deutsche Bank. (Herrera v.
Deutsche Bank, supra, 196 Cal. App. 4th 1375 [noting that the foreclosing bank had
offered no evidence to establish that its predecessor bank had any interest in the deed of
trust to assign to it].)
        The Kalnokis’ allegations in the second amended complaint that a telephone
operator, who they also alleged had no “knowledge of the case” and were “unqualified,”
told them EMC Mortgage Corporation was the beneficiary or their belated contention that
Wells Fargo Asset Securities Trust was the beneficiary conflict with the legal effect of
the above judicially noticeable exhibits and documents in the public record. So, too, does
their allegation that Wells Fargo did not succeed Wells Fargo Home Mortgage, Inc. as
beneficiary following the merger of the two entities. In such circumstances, we may
disregard the Kalnokis’ conflicting allegations. (Holland, supra, 86 Cal.App.4th at
p. 1447 [facts appearing in attached exhibits control over contradictory factual allegations
in operative complaint].)
        As the beneficiary of the deed of trust, Wells Fargo was authorized to substitute
Loanstar as trustee in place of Fidelity. “By statute the Legislature has permitted the
beneficiary of a deed of trust to substitute, at any time, a new trustee for the existing
trustee.” (Dimock v. Emerald Properties (2000) 81 Cal. App. 4th 868, 871 (Dimock); see
also § 2934a, subd. (a)(1).)
        Paragraph 24 of the deed of trust, moreover, partly provides: “Lender, at its
option, may from time to time appoint a successor trustee to any Trustee appointed
hereunder by an instrument executed and acknowledged by Lender and recorded in the
office of the Recorder of the county in which the Property is located. The instrument
shall contain the name of the original Lender, Trustee, and Borrower, the book and page
where this Security Instrument [the deed of trust] is recorded and the name and address of
the successor trustee.” Upon such a substitution, the successor trustee “succeed[s] to all
the title, power and duties conferred upon the Trustee herein and by Applicable Law.”

                                              25
Paragraph 24 finally provides that the above-described procedure for substitution of
trustee “shall govern to the exclusion of all other provisions for substitution.”
       It is this latter sentence of Paragraph 24 that the Kalnokis cite as another basis for
challenging the Substitution’s validity. In their view, Wells Fargo did not comply with
the specific procedures set forth in Paragraph 24 for substituting a new trustee because
FATCO executed the Substitution as Wells Fargo’s attorney in fact. They claim, without
any citation to authority, that a power of attorney had to be attached to the Substitution
before FATCO could execute the instrument on Wells Fargo’s behalf.
       The Kalnokis’ urged interpretation of Paragraph 24 is too narrow and disregards
other provisions in the deed of trust, however. (People ex rel. Lockyer v. R.J. Reynolds
Tobacco Co. (2003) 107 Cal. App. 4th 516, 526 [“courts must give a ‘ “reasonable and
commonsense interpretation” ’ of a contract consistent with the parties’ apparent intent”];
§ 1641 [“The whole of a contract is to be taken together, so as to give effect to every part,
if reasonably practicable, each clause helping to interpret the other”].) Paragraph 16, for
example, provides that the deed of trust shall be governed by, among other things, the
“law of the jurisdiction in which the Property is located.” In California, any action that
may be done by a principal may also be done by the principal’s agent unless the act
specifically requires the principal’s personal attention. (§ 2304.)
       Here, Paragraph 24’s language neither prohibits the lender from acting through an
agent nor expressly requires the lender’s “personal attention” in executing the document.
We decline to imply such a provision into the language of the deed of trust. (The Ratcliff
Architects v. Vanir Construction Management, Inc. (2001) 88 Cal. App. 4th 595, 602
[courts will not add a term to a contract about which the agreement is silent].) We also
note that similar substitutions of trustee, executed by an agent on behalf of the
beneficiary, have been found valid. (See e.g., Dimock, supra, 81 Cal.App.4th at p. 872
[recognizing validity of a recorded substitution of trustee that was prepared by an agent

                                             26
acting on the beneficiary’s behalf].) Thus, the fact that FATCO executed the Substitution
on behalf of Wells Fargo is of no moment, and does not render the Substitution invalid.
       Nor is it invalid because it lacks an attached power of attorney. Nowhere in the
nonjudicial foreclosure statutes or the deed of trust does it require a beneficiary to
provide copies of any power of attorney to the borrower. “ ‘California appellate courts
have refused to read any additional requirements into the non-judicial foreclosure
statute’ ” due to its comprehensive nature. (Gomes, supra, 192 Cal.App.4th at p. 1154.)
       In Siliga v. Mortgage Electronic Registration Systems, Inc. (2013)
219 Cal. App. 4th 75, 83 (Siliga), disapproved on other grounds in Yvanova, supra,
62 Cal.4th at p. 939, fn.13, for example, the court rejected the borrower’s argument that
the lender’s nominee required written authorization to assign the deed of trust and note
and there was no evidence that the nominee had such written authorization. The court
found the argument amounted to “a preemptive claim seeking to require the foreclosing
party to demonstrate in court its authority to initiate a foreclosure,” which was invalid
and subject to demurrer. (Siliga, supra, 219 Cal.App.4th at pp. 84-85.) The Kalnokis’
similar claim that there is no evidence that the beneficiary’s agent had a written power of
attorney authorizing it to substitute a trustee fails for the same reason.
       Finally, the second amended complaint alleges the Substitution is invalid because
Loanstar had a conflict of interest that prevented it from accepting the Substitution. They
argue that because Loanstar may have been the agent for the beneficiary at one point, it
could not later become the trustee under the deed of trust. In a related argument, their
opening brief also asserts that Loanstar as trustee owed them certain fiduciary duties.
The trustee of a deed of trust, however, “is not a true trustee with fiduciary obligations,
but acts merely as an agent for the borrower-trustor and lender-beneficiary.” (Yvanova,
supra, 62 Cal.4th at p. 927.) Thus, no conflict of interest prevented Loanstar from
accepting the Substitution, and Loanstar did not have any fiduciary duties to the Kalnokis
during the foreclosure process.

                                              27
       B.     The Assignment

       The Kalnokis challenged the validity of the Assignment to U.S. Bank on several
grounds. First, as with the Substitution, they claim the Assignment was ineffective
because Wells Fargo was not the beneficiary of the deed of trust when the Assignment
was made. Second, they allege the Assignment was fraudulent because neither Wells
Fargo nor U.S. Bank ever held the promissory note the deed of trust secured. They also
alleged that the Bear Stearns securitized trust had already closed when Wells Fargo
assigned the deed of trust and note to U.S. Bank as trustee for the securitized trust. In
other words, they allege the securitization process failed. Finally, without any citation to
the record, they contend in their reply brief that the Assignment was executed by an
employee of Loanstar and not FATCO as the attorney in fact for Wells Fargo. We
disregard this last contention. (Lueras v. BAC Home Loans Servicing, LP (2013)
221 Cal. App. 4th 49, 60 (Lueras) [court may decline to consider passage of brief that fails
to comply with rule 8.204 of the Cal. Rules of Court, which requires citations to the
record to support arguments and factual assertions].)
       Having found that the first argument that Wells Fargo was not the beneficiary of
the deed of trust lacked merit, we turn to the Kalnokis’ second contention that the
promissory note was never endorsed or delivered and thus never properly assigned to
Wells Fargo or U.S. Bank. They cite Saxon Mortgage Services, Inc. v. Hillery (N.D. Cal.
2008) 2008 WL 5170180 at *5 (Saxon), an unpublished federal decision that found an
assignment of a deed of trust and note to a third party from the lender’s nominee in the
deed of trust did not give the party standing to assert a claim to enforce the note in the
bankruptcy court because no evidence showed the lender ever assigned the note to the
nominee or gave it authority to assign the note to another party.
       Saxon is distinguishable from the present case where the assets of the original
lender and beneficiary, Wells Fargo Home Mortgage, Inc., were acquired by Wells Fargo

                                             28
through the merger approved by the comptroller of the currency. (12 U.S.C. § 215a,
subd. (e) [“The receiving association, upon the merger and without any order or other
action on the part of any court or otherwise, shall hold and enjoy all rights of property,
franchises, and interests, . . . , and all other rights and interests . . . , in the same manner
and to the same extent as such rights, franchises, and interests were held or enjoyed by
any one of the merging banks or banking associations at the time of the merger. . . .”].)
Wells Fargo, in turn, transferred all its interest in both the deed of trust and the
promissory note to U.S. Bank. The Assignment provides in relevant part: Wells Fargo
“grants, assigns, and transfers to: [U.S. Bank] all beneficial interest under that certain
Deed of Trust dated: 02/10/2004 executed by ANDREW G. KALNOKI AND KATHI L.
KALNOKI . . . together with the Promissory Note secured by said Deed of Trust and also
all rights accrued or to accrue under said Deed of Trust.”
       To the extent the Kalnokis claim Wells Fargo and U.S. Bank had to physically
possess the note to foreclose, other courts have rejected such argument. (See e.g., Siliga,
supra, 219 Cal.App.4th at p.84, fn.5, disapproved on other grounds in Yvanova, supra,
62 Cal.4th at p. 939, fn.13 [there is no legal basis for the claim that the foreclosing party
must possess the original note]; Shuster v. BAC Home Loans Servicing, LP (2012)
211 Cal. App. 4th 505, 511 (Shuster) [rejecting claim that defendants had no right to
foreclose because they were not the “holder in due course” of the promissory note];
Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal. App. 4th 433, 441
(Debrunner) [provisions of Uniform Commercial Code pertaining to negotiable
instruments do not “displace the detailed, specific, and comprehensive set of legislative
procedures the Legislature has established for nonjudicial foreclosures”].) In Jenkins,
supra, 216 Cal.App.4th at pp. 510, 513, disapproved on other grounds in Yvanova, supra,
62 Cal.4th at p. 939, fn.13, for example, the plaintiff complained that the trustee did not
have actual physical possession of the note and deed of trust prior to the closing date of
the investment trust, but the appellate court held that the nonjudicial foreclosure

                                                29
provisions did not require the foreclosing party to have an actual beneficial interest in the
deed of trust and promissory note to commence and execute a nonjudicial foreclosure
sale.
        The Kalnokis’ next contention--that the Assignment is void due to a securitization
fail under New York law, which they allege governs the Bear Stearns securitized trust--is
likewise without merit. According to the Kalnokis, the Bear Stearns securitized trust
closed on February 28, 2005. Wells Fargo did not execute the Assignment to U.S. Bank
as trustee for the Bear Stearns securitized trust until June 16, 2010. By that time, the
Kalnokis’ mortgage was in default. Because the securitized trust had already closed
when it was assigned their delinquent mortgage, the Kalnokis allege that the Assignment
violated the terms of the Bear Stearns securitized trust’s pooling and servicing agreement,
did not convey any interest to U.S. Bank, and violated the REMIC guidelines under the
tax code. All of this, they claim, renders the Assignment void.
        The trial court found the Kalnokis lacked standing to raise this issue since they
were not parties to the securitized trust’s pooling and servicing agreement. The
California Supreme Court, however, recently held that a borrower has standing to sue for
wrongful foreclosure where an alleged defect in the assignment renders the assignment
void even if a borrower is not a party to the assignment. (Yvanova, supra, 62 Cal.4th at
pp. 942-943.) The Supreme Court expressed no opinion as to whether, under New York
law, an untimely assignment to a securitized trust made after the trust’s closing date is
void or merely voidable. (Id. at pp. 940-941.) We turn to that issue now.
        The Kalnokis rely on Glaski v. Bank of America (2013) 218 Cal. App. 4th 1079
(Glaski), for the proposition that an assignment of a deed of trust to a securitized trust
governed by New York law that is made after the trust’s closing date is void. (Glaski, at
pp. 1083, 1097.) Like in Glaski, they cite New York Estates, Powers and Trusts Law
section 7-2.4, which provides that “[i]f the trust is expressed in the instrument creating
the estate of the trustee, every sale, conveyance, or other act of the trustee in

                                              30
contravention of the trust, except as authorized by this article and by any other provision
of law, is void.” The Glaski court read literally the term “void” in Section 7-2.4, to hold
that the plaintiff had standing to challenge violations of the pooling and servicing
agreement. (Glaski, at pp. 1096-1097.)
       As Glaski noted, however, its holding was at odds with numerous decisions
finding that a plaintiff lacks standing to challenge the validity of the securitization
process because any alleged irregularities merely render such an assignment voidable not
void. (Glaski, supra, 218 Cal.App.4th at pp. 1096-1097.) The trial court decision upon
which Glaski relied has also since been overturned. (Wells Fargo Bank, N.A. v. Erobobo
(N.Y. App. Div. 2015) 127 A.D.3d 1176, 1178.)
       We decline to follow Glaski and instead conclude that an assignment to a
securitized trust made after the trust’s closing date is merely voidable. As a recent New
York appellate court concluded: “the weight of New York authority is contrary to
plaintiffs’ contention that any failure to comply with the terms of the PSAs [pooling and
services agreements] rendered defendants’ acquisition of plaintiffs’ loans and mortgages
void as a matter of trust law.” (Rajamin v. Deutsche Bank Nat’l Trust Co. (2d. Cir. 2014)
757 F.3d 79, 88-89 (Rajamin).) Instead, “an unauthorized act by the trustee is not void
but merely voidable by the beneficiary.” (Ibid.)
       Because any alleged irregularities in the securitization process are merely voidable
at the securitized trust beneficiary’s behest, and the Kalnokis are not beneficiaries of the
Bear Stearns securitized trust, they lack standing to challenge the Assignment on such
grounds. (Rajamin, supra, 757 F.3d at pp. 88-89.) Thus, even if we assume the truth of
the Kalnokis’ allegations regarding the purported securitization fail, such allegations are
insufficient to set aside the foreclosure. (See Saterbak v. JPMorgan Chase Bank, N.A.
(2016) 245 Cal. App. 4th 808, 815, fn. 5 (Saterbak) [declining to follow Glaski on similar
grounds].)

                                              31
       Finally, the Kalnokis’ contention in their reply brief that an employee of Loanstar,
rather than FATCO, executed the Assignment on Wells Fargo’s behalf is unavailing. The
Kalnokis’ cite no evidence in the record to support this argument. We therefore disregard
it. (Duarte, supra, 72 Cal.App.4th at p. 856 [“If a party fails to support an argument with
the necessary citations to the record, that portion of the brief may be stricken and the
argument deemed to have been waived”]; Fox, supra, 99 Cal.App.2d at p. 742 [counsel
has duty to refer reviewing court to portion of record to which he objects].) We briefly
note, however, that elsewhere the Kalnokis allege Loanstar was Wells Fargo’s agent.
Thus, we fail to see the harm of an employee of Wells Fargo’s admitted agent executing
the Assignment.

       C.     The Notice of Sale

       The Kalnokis contend the Notice of Sale was fraudulent because the Assignment
to U.S. Bank was invalid. In their view, U.S. Bank never received any interest in the
Kalnokis’ deed of trust or note, and, therefore, U.S. Bank had no authority to foreclose.
But, as discussed above, the Kalnokis have failed to allege any viable theory as to why
the Assignment to U.S. Bank is void. As the current beneficiary of record of the deed of
trust following the Assignment, U.S. Bank was authorized to demand the trustee
foreclose on the Kalnokis’ property. (Yvanova, supra, 62 Cal.4th at p. 926 [“ ‘If the
debtor defaults on the loan, the beneficiary may demand that the trustee conduct a
nonjudicial foreclosure sale’ ”].)
       They also challenge the validity of the declaration of Marsha Graham, which is
attached to the Notice of Sale. The declaration provides that Wells Fargo Home
Mortgage, Inc. had obtained an exemption under Civil Code section 2923.53 from
California’s required 90-day wait period between issuing the notice of default and the
notice of trustee’s sale under former Civil Code section 2923.52. (Former Cal. Civ.
Code, § 2923.52 [repealed by Stats. 2009-2010, 2nd Ex.Sess., ch. 5, § 3, operative Jan. 1,

                                             32
2011].) They contend that a defunct company like Wells Fargo Home Mortgage, Inc.
could not obtain such an exemption. Even if that is true, the record shows Wells Fargo
was similarly exempt.

       D.        The Trustee’s Deed Upon Sale

       The Kalnokis allege the Trustee’s Deed Upon Sale is invalid because U.S. Bank
was not the beneficiary under the Assignment, an argument we have already rejected, and
also because U.S. Bank did not pay anything for the property at the trustee’s sale. They
also allege, without elaboration, that the Trustee’s Deed Upon Sale falsely states that all
of the requirements of Civil Code section 2924 were fully met.
       “At a nonjudicial foreclosure sale, if the lender chooses to bid, it does so in the
capacity of a purchaser. [Citation.] The only distinction between the lender and any
other bidder is that the lender is not required to pay cash, but is entitled to make a credit
bid up to the amount of the outstanding indebtedness. [Citations.] The purpose of this
entitlement is to avoid the inefficiency of requiring the lender to tender cash which would
only be immediately returned to it.” (Alliance Mortgage Co. v. Rothwell (1995)
10 Cal. 4th 1226, 1238 (Alliance Mortgage).)
       “A ‘full credit bid’ is a bid ‘in an amount equal to the unpaid principal and interest
of the mortgage debt, together with the costs, fees, and other expenses of the
foreclosure.’ ” (Alliance Mortgage, supra, 10 Cal.4th at p. 1238.) “If the full credit bid
is successful, i.e., results in the acquisition of the property, the lender pays the full
outstanding balance of the debt and costs of foreclosure to itself and takes title to the
security property, releasing the borrower from further obligations under the defaulted
note.” (Ibid.)
       As the beneficiary of the deed of trust and the note following the Assignment, U.S.
Bank was entitled to make a credit bid at the trustee’s sale up to the amount of the debt
owed. (Alliance Mortgage, supra, 10 Cal.4th at p. 1238.) The total amount of the unpaid

                                               33
debt together with costs was $437,280.54. That was the amount of U.S. Bank’s credit
bid. There was nothing wrongful about U.S. Bank using a credit bid rather than paying
cash at the sale.
          The purchaser at a nonjudicial foreclosure sale generally “receives title under a
trustee’s deed free and clear of any right, title or interest of the trustor.” (Moeller v. Lien
(1994) 25 Cal. App. 4th 822, 831 (Moeller).) “If the trustee’s deed recites that all statutory
notice requirements and procedures required by law for the conduct of the foreclosure
have been satisfied, a rebuttable presumption arises that the sale has been conducted
regularly and properly; this presumption is conclusive as to a bona fide purchaser.”
(Ibid.)
          In this case, the Trustee’s Deed Upon Sale recites that the statutory requirements
under Civil Code section 2924 have been met. The deed specifically provides, “All
requirements of law and the applicable Deed of Trust including, but not limited to those
enumerated by Civil Code 2924 et. seq., regarding the mailing, publication, personal
delivery and posting of the Notice of Default and Notice of Sale, as respectively
appropriate, have been met.” Beyond their conclusory allegation that the recital in the
Trustee’s Deed Upon Sale is false, the Kalnokis cite nothing to rebut the ordinary
presumption that the sale was conducted regularly.

          E.     The Notice of Default

          The Kalnokis contend that the Notice of Default and its attached declaration are
void and fail to comply with Civil Code section 2924 because they were purportedly
robo-signed. According to the second amended complaint, the declaration attached to the
Notice of Default attesting that the statutory notice procedures under Civil Code section
2923.5 were followed was robosigned by John Kennarty, an employee of Wells Fargo,
without his having read the contents of the declaration. They also claim that his signature
was forged by someone claiming to be John Kennarty. The Kalnokis alleged in their

                                               34
complaint that Wells Fargo was fully aware of and affirmed Kennarty’s actions as a
robosigner.
       For purposes of the demurrers, we will accept as true the factual allegation that the
default declaration was “robosigned.” But the assumed facts that Kennarty signed the
default declaration without reading the document or that someone else signed it on his
behalf are not enough to set aside the foreclosure. (Sandri v. Capitol One, N.A.
(N.D. Cal. 2013) 501 B.R. 369, 373-374.) “ ‘As to the robo-signer allegations, there does
not appear to be anything about “robo-signing” the notice of default or the notice of
substitution that makes them invalid or ineffective. Even if true, “robo-signing” does not
have any bearing on the validity of the foreclosure process here.’ ” (Id. at p. 374.) That
is because the Kalnokis do not dispute the accuracy of any of the salient facts, such as the
amount owed or that their loan was in default.
       The Kalnokis, moreover, allege that Kennarty was acting on behalf of the
beneficiary--Wells Fargo--and that Wells Fargo was fully aware of its agent’s actions.
The Kalnokis even allege that Wells Fargo “affirmed them as proper.” Thus, by their
own allegations, the Kalnokis negate any inference that Wells Fargo did not authorize
Kennarty or someone else to robosign the Notice of Default’s supporting declaration.
       And, to the extent the default declaration was in fact robosigned, “it would be
voidable, not void, at the injured party’s option.” (See Maynard v. Wells Fargo Bank,
N.A., 2013 WL 4883202, at *8-9 (S.D. Cal. 2013).) Here, the injured party would have
been Wells Fargo, not the Kalnokis.
       Moreover, even assuming for sake of argument that Wells Fargo was not the
beneficiary at the time it initiated the foreclosure proceedings as the Kalnokis allege, they
nonetheless concede Wells Fargo was the loan servicer. As the loan servicer--the
beneficiary’s agent--Wells Fargo was empowered to proceed with foreclosure on the
beneficiary’s behalf by recording the Notice of Default. (§§ 2924, subd. (a)(1) [trustee,

                                             35
mortgagee, or beneficiary, or any of their authorized agents may file a notice of default to
initiate foreclosure]; 2304 [agent authorized to do any acts which principal may do].)

       F.     Tender

       In its ruling sustaining the joint demurrer of FATCO and Loanstar, the trial court
determined the Kalnokis were required to tender the amount owing on the debt to
maintain an action challenging the foreclosure sale. The Kalnokis contend this was error.
       Generally, “as a condition precedent to an action by the borrower to set aside the
trustee’s sale on the ground that the sale is voidable because of irregularities in the sale
notice or procedure, the borrower must offer to pay the full amount of the debt for which
the property was security.” (Lona, supra, 202 Cal.App.4th at p. 112.) “ ‘The rationale
behind the rule is that if [the borrower] could not have redeemed the property had the sale
procedures been proper, any irregularities in the sale did not result in damages to the
[borrower].’ ” (Ibid.)
       There are, however, recognized exceptions to the tender rule. (Lona, supra,
202 Cal.App.4th at p. 112.) Courts have found that tender is not required where the
borrower attacks the validity of the underlying debt (Stockton v. Newman (1957)
148 Cal. App. 2d 558, 564 [trustor sought rescission of the contract to purchase the
property and the promissory note on grounds of fraud]), where the borrower has a
counterclaim or set-off against the beneficiary (Hauger v. Gates (1954) 42 Cal. 2d 752,
755 [plaintiff claimed set-off in an amount exceeding the amount due on the note where
defendant had failed to deliver personal property under parties’ agreement that was
valued at an amount greater than installment payment owing on note]), where it would be
inequitable to impose the requirement (Humboldt Sav. Bank v. McCleverty (1911)
161 Cal.285, 291 [inequitable to require widow to tender full amount of debt for which
she was not liable in order to protect her homestead interest in property]), and where the
trustee’s deed is void on its face. (Dimock, supra, 81 Cal.App.4th at pp. 877-878.)

                                              36
       In this case, the Kalnokis admit in the second amended complaint that the
underlying debt is valid. They also do not allege any entitlement to a set-off. Unlike in
Humboldt, where the plaintiff did not owe the debt, we do not consider it “inequitable” to
apply the tender rule here as the Kalnokis concede they owed the debt. Finally, apart
from the Kalnokis’ conclusory allegations, there is nothing on the face of the Trustee’s
Deed of Sale showing that it is void. The recorded documents attached as exhibits to the
second amended complaint as well as the merger documents subject to judicial notice
establish an unbroken chain of ownership from Wells Fargo Home Mortgage, Inc., to
Wells Fargo by merger, to U.S. Bank as trustee for the Bear Stearns Securitized trust by
assignment.
       And, as discussed above, even assuming Wells Fargo assigned the deed of trust
and note to U.S. Bank after the Bear Stearns securitized trust closed, that fact makes the
Assignment voidable rather than void. (Rajamin, supra, 757 F.3d at pp. 88-89; Saterbak
v. JPMorgan Chase Bank, N.A., supra, 245 Cal.App.4th at p. 816, fn. 5.) Under such
circumstances, the Kalnokis acknowledge tender is required. ([Tender rule only applies
to cases where the foreclosure sale is voidable].)
       Because none of the exceptions to the tender rule apply, the trial court did not err
in determining that the Kalnokis were required to tender the full amount of the debt owed
before challenging the foreclosure sale. The allegations of the second amended
complaint concede they did not tender the full amount, nor could they.

       G.     Prejudice

       The Kalnokis’ challenge to the foreclosure sale also fails for a more fundamental
reason. They cannot establish prejudice.
       “ ‘[A] plaintiff in a suit for wrongful foreclosure has generally been required to
demonstrate the alleged imperfection in the foreclosure process was prejudicial to the
plaintiff’s interests.’ ” (Herrera v. Federal National, supra, 205 Cal.App.4th at p. 1507,

                                             37
disapproved on other grounds in Yvanova, supra, 62 Cal.4th at p. 939 & fns. 4, 13.) “A
nonjudicial foreclosure sale is presumed to have been conducted regularly and fairly; one
attacking the sale must overcome this common law presumption ‘by pleading and
proving an improper procedure and the resulting prejudice.’ ” (Knapp v. Doherty (2004)
123 Cal. App. 4th 76, 86, fn. 4, italics added.) “Prejudice is not presumed from ‘mere
irregularities’ in the process.” (Herrera v. Federal National, supra, 205 Cal.App.4th at
p. 1507.)
       Even if Wells Fargo lacked authority to assign the note and deed of trust to U.S.
Bank as trustee for the Bear Stearns securitized trust, it is difficult to conceive how the
Kalnokis were prejudiced by the Assignment. “Because a promissory note is a negotiable
instrument, a borrower must anticipate it can and might be transferred to another
creditor.” (Herrera v. Federal National, supra, 205 Cal.App.4th at p. 1507; Fontenot,
supra, 198 Cal.App.4th at p. 272.)
       An assignment merely substituted one creditor for another, without changing the
Kalnokis’ obligations under the note. The Kalnokis do not dispute that they defaulted on
their loan. They have pleaded no facts indicating that the foreclosure sale, which has
already occurred, would have been averted but for the alleged deficiencies in the
foreclosure process nor that the original lender would have refrained from foreclosure
under the circumstances presented. Indeed, they concede in their briefing that whenever
a loan is in default, like theirs, the trustee has only one duty--to foreclose on the deed of
trust. Similarly, the Kalnokis have not alleged that the transfer to U.S. Bank interfered in
any manner with their payment of the note. (Herrera v. Federal National, supra,
205 Cal.App.4th at p. 1507; Fontenot, supra, 198 Cal.App.4th at p. 272.) Again, they
concede they fell behind on their payments and did not have the ability to tender the full
amount owing before the Assignment to U.S. Bank.
       Although not entirely apparent from the briefs, it appears the Kalnokis’ attempt to
establish prejudice from the alleged irregularities in the foreclosure process by arguing

                                              38
they are exposed to double financial jeopardy. They claim Freddie Mac could sue them
at a later time to collect on the promissory note, which secured the deed of trust. In
support of their argument, they continue to contend that physical possession of the
promissory note was required to foreclose.
       “California has an elaborate and interrelated set of foreclosure and antideficiency
statutes relating to the enforcement of obligations secured by interests in real property.”
(Alliance Mortgage, supra, 10 Cal.4th at p. 1236.) Pursuant to this exhaustive statutory
scheme, “there is only ‘one form of action’ for the recovery of any debt or the
enforcement of any right secured by a mortgage or deed of trust.” (Ibid.) That action is
foreclosure. (Ibid.)
       A nonjudicial foreclosure sale constitutes a final adjudication of the rights of the
borrower and lender. (Moeller, supra, 25 Cal.App.4th at p. 831.) After the property is
sold at a nonjudicial foreclosure sale, the borrower is released from further obligations
under the defaulted note. (Alliance Mortgage, supra, 10 Cal.4th at p. 1238; Yvanaova,
supra, 62 Cal.4th at p. 927 [“Generally speaking, the foreclosure sale extinguishes the
borrower’s debt; the lender may recover no deficiency”].) Because the property has
already been sold at a nonjudicial foreclosure sale, there is no risk of double jeopardy for
the Kalnokis.
       We recognize that our colleagues in Division 1 of the Fourth Appellate District
recently held 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.” (Sciarratta v. U.S. Bank National Assoc.
247 Cal. App. 4th 552, 555 (Sciarratta).) Thus, contrary to Herrera National and
Fontenot, the homeowner need not allege that the wrongful foreclosure interfered with
his or her ability to pay on the debt or that the foreclosure otherwise would not have
occurred. (Id. at pp. 555, 562-564.)

                                             39
       The plaintiff in Sciarratta sued to challenge Bank of America’s foreclosure of her
home. The complaint alleged that Chase assigned the homeowner’s promissory note and
deed of trust to Deutsche Bank in April 2009. Six months later, in November 2009,
Chase recorded a purported assignment of the same trust deed and promissory note to
Bank of America. The homeowner alleged the second purported assignment from Chase
was void as it had nothing left to assign, and, thus, the foreclosure by Bank of America
was wrongful. Because the wrong entity foreclosed, she alleged she was prejudiced.
(Id., supra, 247 Cal.App.4th at p. 562.)
       The court in Sciarratta found that publicly recorded documents properly subject to
judicial notice were consistent with the complaint’s allegations. (Sciarratta, supra,
247 Cal.App.4th at p. 562.) Here, by contrast, the publicly recorded documents conflict
with the Kalnokis’ contention in their second amended complaint, not pressed on appeal,
that EMC Mortgage Corporation owned the promissory note and deed of trust, as well as
their new allegation, not alleged in the second amended complaint, that Wells Fargo
Asset Securities Corporation owned by the note and deed of trust. Thus, even assuming
for sake of argument that prejudice can be established simply by alleging facts showing
the wrong party foreclosed as found in Sciarratta, the judicially noticeable documents in
this case show the proper party foreclosed notwithstanding the Kalnokis’ conflicting
allegations.

                                            VI

                      Business and Professions Code Section 17200

       The Kalnokis’ second cause of action alleged defendants engaged in numerous
unlawful, unfair, and fraudulent business practices in violation of Business and
Professions Code section 17200. According to the second amended complaint, such acts
included instituting premature foreclosure proceedings to generate unwarranted fees,
executing and recording false and misleading documents without legal authority to do so,

                                            40
failing to disclose the principle for which documents were being executed and recorded
in violation of Civil Code section 2933, violating unspecified securities laws, tax laws,
and common law, acting as beneficiaries and trustees without the legal authority to do so,
failing to give proper notice of a trustee’s sale, failing to comply with Civil Code section
2923.5, failing to comply with the HAMP1 guidelines, misrepresenting the foreclosure
status of properties to borrowers, and other unidentified deceptive business practices.
       On appeal, the Kalnokis argue they have sufficiently pleaded a Business and
Professions Code section 17200 violation because “all the statutory elements are set forth
in the SAC, and there was major fraud involved in this foreclosure.” They claim U.S.
Bank was a stranger to the transaction and obtained their property through fraud. We
disagree.
       Sections 17200 through 17210 of the Business and Professions Code do not have a
specific statutory title, but have been referred to as the unfair competition law (UCL).
(Jenkins, supra, 216 Cal.App.4th at p. 520, disapproved on other grounds by Yvanova,
supra, 62 Cal.4th at p. 939, fn. 13.) The UCL “ ‘prohibits, and provides civil remedies
for, unfair competition.’ ” (Ibid.) The UCL creates “ ‘ “three varieties of unfair
competition--acts or practices which are unlawful, or unfair, or fraudulent.” ’ ” (Ibid.)
The UCL’s unlawful prong “ ‘ “ ‘borrows’ ” ’ ” violations of other laws and treats them
as unlawful practices that the UCL makes independently actionable. (Ibid.)
       In 2004, voters passed Proposition 64, which restricted private standing to bring a
UCL action to “ ‘a person who has suffered injury in fact and has lost money or property

1  “[T]he United States Department of the Treasury implemented the Home Affordable
Mortgage Program (HAMP) to help homeowners avoid foreclosure during the housing
market crisis of 2008. ‘The goal of HAMP is to provide relief to borrowers who have
defaulted on their mortgage payments or who are likely to default by reducing mortgage
payments to sustainable levels, without discharging any of the underlying debt.’ ” (West
v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at p. 785.)

                                             41
as a result of the unfair competition.’ ” (Jenkins, supra, 216 Cal.App.4th at p. 521; Bus.
& Prof. Code, § 17204, italics added, as amended by Prop. 64, § 3, as approved by voters,
Gen. Elec. (Nov. 2, 2004).) “ ‘To satisfy the narrower standing requirements imposed by
Proposition 64, a party must now (1) establish a loss or deprivation of money or property
sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that the
economic injury was the result of, i.e., caused by, the unfair business practice or false
advertising that is the gravamen of the claim.’ ” (Jenkins, at p. 521; Kwikset Corp. v.
Superior Court (2011) 51 Cal. 4th 310, 322.) “A UCL claim will survive a demurrer if
the plaintiff can plead ‘ “general factual allegations of injury resulting from the
defendant’s conduct.” ’ ” (Jenkins, at p. 521.)
       While losing one’s home in a nonjudicial foreclosure sale arguably qualifies as a
sufficient “economic injury” for purposes of Business and Professions Code section
17204 (Jenkins, supra, 216 Cal.App.4th at p. 522 [alleged diminishment of a future
property interest by impending foreclosure of plaintiff’s home sufficient to establish
minimal pleading requirements for economic injury prong of UCL claim]), the Kalnokis
cannot establish the second prong of the standing requirements--causation. They were
required to plead a causal link between their economic injury, the loss of their home at
the foreclosure sale, and the myriad unfair or unlawful acts allegedly committed by
defendants. (Bus. & Prof. Code, § 17204; Jenkins, at p. 523.) This they cannot do.
       The Kalnokis admit in their second amended complaint and opening brief that they
defaulted on their loan and were unable to make the monthly payments due to illness. It
is indisputable that the Kalnokis’ default triggered the lawful enforcement of the power
of sale clause in the deed of trust, and it was the triggering of the power of sale clause
that subjected the Kalnokis’ home to nonjudicial foreclosure. (Jenkins, supra,
216 Cal.App.4th at p. 523 [borrower in default could not establish causation prong for
standing under Business and Professions Code section 17204 because default on loan
triggered foreclosure and not the recording of any allegedly fraudulent foreclosure-related

                                              42
documents].) As the Kalnokis’ home was subject to nonjudicial foreclosure because of
their default on their loan, which occurred before defendants’ alleged wrongful acts, the
Kalnokis cannot assert the foreclosure (i.e., their alleged economic injury) was caused by
defendants’ wrongful actions. (Ibid.)
       Thus, even if we assume the Kalnokis’ second cause of action alleges facts
indicating defendants’ actions violated at least one of the UCL’s three unfair competition
prongs (unlawful, unfair, or fraudulent)--something the trial court declined to do, the
second amended complaint cannot show any of the alleged violations have a causal link
to their economic injury. The trial court, therefore, did not err in sustaining the demurrer
without leave to amend the UCL cause of action. (Martin v. Bridgeport Community
Assn., Inc. (2009) 173 Cal. App. 4th 1024, 1031 [appellate court “will affirm if there is any
ground on which the demurrer can properly be sustained, whether or not the trial court
relied on proper grounds or the defendant asserted a proper ground in the trial court
proceedings”].)

                                            VII

                                        Conspiracy

       The Kalnokis’ third cause of action alleged defendants engaged in a civil
conspiracy to commit fraud against them. They point to the allegedly fraudulent
Substitution and Assignment as establishing the conspiracy.
       To establish liability of a defendant for wrongs committed by another as part of a
conspiracy, a plaintiff must allege the formation and operation of the conspiracy, the
wrongful act done pursuant to the conspiracy, and resulting damage. (Kidron v. Movie
Acquisition Corp. (1995) 40 Cal. App. 4th 1571, 1581.) The conspiring defendant must
also have actual knowledge that a tort is planned and agree to the scheme with knowledge
of its unlawful purpose. (Wyatt v. Union Mortgage Co. (1979) 24 Cal. 3d 773, 784-785.)

                                             43
       No cause of action for conspiracy exists unless the plaintiff pleads facts to show
some wrongful act that would support a cause of action without conspiracy. (Jones v.
Wells Fargo Bank (2003) 112 Cal. App. 4th 1527, 1541 (Jones); Applied Equipment
Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal. 4th 503, 511.) Here, as the trial court
found and as discussed above, the Kalnokis’ conspiracy claim fails because they have not
adequately pleaded the predicate tort of fraud.

                                              VIII

                                      Declaratory Relief

       The Kalnokis’ fourth cause of action is for declaratory relief. They allege a
controversy regarding the ownership of the property arose because the foreclosure
documents were purportedly fraudulent. In cursory fashion, they argue on appeal that
they have sufficiently alleged a cause of action for declaratory relief because an actual
controversy exists as to whether they or U.S. Bank own the property and they cite the
unlawful detainer as evidence of the dispute.
       Code of Civil Procedure section 1060 authorizes “[a]ny person . . . who desires a
declaration of his or her rights or duties with respect to another . . . in cases of actual
controversy relating to the legal rights and duties of the respective parties, [to] bring an
original action . . . for a declaration of his or her rights and duties . . . .” (Code Civ. Proc.,
§ 1060.) However, “[t]he purpose of a judicial declaration of rights in advance of an
actual tortious incident is to enable the parties to shape their conduct so as to avoid a
breach. ‘[Declaratory] procedure operates prospectively, and not merely for the redress
of past wrongs. It serves to set controversies at rest before they lead to repudiation of
obligations, invasion of rights or commission of wrongs; in short, the remedy is to be
used in the interests of preventive justice, to declare rights rather than execute them.’
[Citations.]” (Babb v. Superior Court (1971) 3 Cal. 3d 841, 848 (Babb).)

                                               44
       In this case, plaintiffs seek a remedy for a past wrong, the sale of their home by
foreclosure. Declaratory relief is therefore inappropriate. (Babb, supra, 3 Cal.3d at
p. 848.) In the absence of factual allegations indicating an actual present controversy, as
opposed to the redress of a past wrong, plaintiffs have failed to state a cause of action for
declaratory relief.

                                             IX

                                 Civil Code Section 2932.5

       The Kalnokis’ fifth cause of action asserts defendants violated Civil Code section
2932.5. They argue that because the Assignment was purportedly “fraudulently
manufactured,” defendants did not comply with Civil Code section 2932.5.
       Section 2932.5 states, “Where a power to sell real property is given to a
mortgagee, or other encumbrancer, in an instrument intended to secure the payment of
money, the power is part of the security and vests in any person who by assignment
becomes entitled to payment of the money secured by the instrument. The power of sale
may be exercised by the assignee if the assignment is duly acknowledged and recorded.”
(Italics added.) “ ‘It has been established since 1908 that this statutory requirement that
an assignment of the beneficial interest in a debt secured by real property must be
recorded in order for the assignee to exercise the power of sale applies only to a mortgage
and not to a deed of trust.’ ” (Rossberg, supra, 219 Cal.App.4th at p. 1497; see also
Calvo v. HSBC Bank USA, N.A. (2011) 199 Cal. App. 4th 118, 122 (Calvo).) Accordingly,
nothing in section 2932.5 rendered the foreclosure invalid as the statute is inapplicable in
the present case.
       The Kalnokis cite one bankruptcy court decision, U.S. Bank N.A. v. Skelton (In re
Salazar) (U.S.B.C. S.D. Cal. 2011) 448 B.R. 814, 820, in support of their argument that
Civil Code section 2932.5 applies to deeds of trust. (Citing U.S. Bank N.A. v. Salazar,
10-17456-MM13 (S.D. Bankr. Ct 2011).) As Wells Fargo and U.S. Bank point out,

                                             45
however, that decision has since been overturned on appeal. (See U.S. Bank N.A. v.
Salazar (In re Salazar) (S.D. Cal. 2012) 470 B.R. 557, 560-561.) The appellate court
expressly found that Civil Code “[section] 2932.5 does not apply to deeds of trust.” (Id.
at p. 560.)
       Similarly, the Kalnokis’ reliance on Civil Code section 2924.10 is also misplaced.
That statute was enacted as part of the California Homeowner Bill of Rights, which took
effect on January 1, 2013. (Stats. 2012, ch. 86, § 13; see also Cal. Const., art. IV, § 8,
subd. (c)(1) [effective date of new statutes is January 1, following 90 days after
enactment]; Rockridge Trust v. Wells Fargo, N.A. (N.D. Cal. 2013) 985 F. Supp. 2d 1110,
1152 (Rockridge); Lueras, supra, 221 Cal.App.4th at p. 86, fn.14.) A statute operates
prospectively unless the Legislature expressly declares it is to be applied retroactively.
(Myers v. Philip Morris Companies, Inc. (2002) 28 Cal. 4th 828, 840.) There is no
express declaration of retroactivity in the Homeowner Bill of Rights. (Rockridge, at
p. 1152.) Because the Kalnokis’ home was sold at a nonjudicial foreclosure sale in 2011,
nearly two years before the Homeowner Bill of Rights took effect, Civil Code section
2924.10 does not apply.

                                              X

                                     Unjust Enrichment

       The Kalnokis’ eighth cause of action alleges U.S. Bank and the Bear Stearns
securitized trust were unjustly enriched by $437,000--the approximate value of the
property at the time of the foreclosure sale--because they did not pay anything for the
property at the foreclosure sale. Their opening brief does not elaborate on this claim
beyond the above summary.
       The elements for a claim of unjust enrichment are “ ‘receipt of a benefit and unjust
retention of the benefit at the expense of another.’ ” (Prakashpalan v. Engstrom,
Lipscomb & Lack (2014) 223 Cal. App. 4th 1105, 1132 (Prakashpalan).) “ ‘The theory of

                                             46
unjust enrichment requires one who acquires a benefit which may not justly be retained,
to return either the thing or its equivalent to the aggrieved party so as not to be unjustly
enriched.’ ” (Ibid.) Strictly speaking, it is not “a theory of recovery, ‘ “but an effect: the
result of a failure to make restitution under circumstances where it is equitable to do so.”
[Citation.] . . . It is synonymous with restitution.’ ” (Ibid.) Ordinarily, restitution is
required only if “ ‘ “the benefits were conferred by mistake, fraud, coercion or
request.” ’ ” (Ibid.)
       We have already concluded that the Kalnokis have failed to allege any basis for
setting the Assignment to U.S. Bank aside as void. And, as noted above, U.S. Bank, as
the beneficiary of the deed of trust and the note following the Assignment, was entitled to
make a credit bid at the trustee’s sale up to the amount of the debt owed. (Alliance
Mortgage, supra, 10 Cal.4th at p. 1238.) Thus, U.S. Bank was not unjustly enriched as a
result of the trustee’s sale.

                                              XI

                                  Civil Code Section 2923.5

       The amended complaint’s third cause of action alleged defendants violated Civil
Code section 2923.5 because the default declaration signed by John Kennarty in support
of the Notice of Default did not show he had personal knowledge of the conclusions
stated in the declaration. On appeal, the Kalnokis reassert their claim that Kennarty
robosigned the declaration as the basis of the court’s purported error in sustaining the
demurrer to this cause of action. Imbedded under a different heading in the opening
brief, the Kalnokis also assert that the Notice of Default failed to allow the time allotted
by Civil Code section 2923.5. They also argue that a cause of action for violation of
section 2923.5 can never be resolved through demurrer.
       “In 2008, the Legislature enacted Civil Code section 2923.5 in response to the
foreclosure crisis. (Stats. 2008, ch. 69, §§ 1, 2.) It prohibits filing a notice of default

                                               47
until 30 days after the lender contacts the borrower ‘to assess the borrower’s financial
situation and explore options for the borrower to avoid foreclosure.’ ” (Stebley v. Litton
Loan Servicing, LLP (2011) 202 Cal. App. 4th 522, 525-526 (Stebley).) Section 2923.5,
however, “does not provide for damages, or for setting aside a foreclosure sale. . . .”
(Ibid.) Instead, the sole available remedy is “more time” before a foreclosure sale occurs.
(Ibid.) After a nonjudicial foreclosure sale, the statute provides no relief. (Ibid.; see also
Mabry v. Superior Court (2010) 185 Cal. App. 4th 208, 235-236 (Mabry).)
       In this case, the Kalnokis concede the property was sold at a foreclosure sale on
February 22, 2011. Therefore, they cannot state a cause of action for violation of section
2923.5.
       The allegations that Kennarty did not have personal knowledge of the contents of
the declaration are also unavailing. The declaration required by section 2923.5 need not
be executed under penalty of perjury and the declaration’s language may simply track the
statutory language. (Mabry, supra, 185 Cal.App.4th at p. 214.) As the Mabry court
noted, “[t]he way section 2923.5 is set up, too many people are necessarily involved in
the process for any one person to likely be in the position where he or she could swear
that all three requirements of the declaration required by subdivision (b) were met.” (Id.
at p. 233.)
       Finally, their claim that a cause of action based on Civil Code section 2923.5
cannot be resolved on demurrer is incorrect. Courts often resolve similar claims on
demurrer or motions to dismiss for failure to state a claim. (See e.g. Rossberg, supra,
219 Cal.App.4th at pp. 1493-1494 [finding the trial court properly sustained a demurrer
to the plaintiffs’ first cause of action for violation of section 2923.5 where the plaintiffs
alleged they “had multiple telephone conversations with BofA regarding a possible loan
modification during July 2009, which was more than 30 days before [the trustee]
recorded the notice of default . . . .”]; Ortiz v. Accredited Home Lenders, Inc. (S.D.Cal.
2009) 639 F. Supp. 2d 1159, 1165-1166 [dismissing section 2923.5 claim where plaintiffs

                                              48
did not dispute contact was made and declaration of compliance indicated plaintiffs were
contacted as required by the statute].)
       Their reliance on Skov v. U.S. Bank, National Assn. (2012) 207 Cal. App. 4th 690
(Skov) and Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal. App. 4th 1047
(Intengan) is likewise misplaced. In Intengan, the court specifically noted that the
plaintiff’s remedy for violating Civil Code section 2923.5 was limited to a delay in
foreclosure. (Intengan, supra, 214 Cal.App.4th at p. 1058, fn.4.) The plaintiff did not
allege that a trustee’s sale had occurred and the respondent’s brief on appeal represented
that no sale had taken place. (Id. at p. 1050.) Since the foreclosure sale had not yet
occurred in Intengan, and the plaintiff and the defendant had not yet explored foreclosure
alternatives, the remedy under Civil Code section 2923.5 was still available. (Id. at
pp. 1049-1050.) That is not the case here, as the Kalnokis concede the property was sold
at a foreclosure sale in February 2011. Skov is distinguishable for the same reason.
(Skov, supra, 207 Cal.App.4th at pp. 694, 696-697 [no allegation that foreclosure sale had
taken place and plaintiff sought to permanently enjoin foreclosure of the property].)

                                            XII

                                Uniform Commercial Code

       The 11th cause of action in the amended complaint alleged a violation of Uniform
Commercial Code Article 3-104, which generally defines the term “negotiable
instrument.” Briefly summarized, the Kalnokis alleged that defendants had to physically
possess the promissory note before they could foreclose. The court dismissed the cause
of action with prejudice stating that there was no requirement to “produce the note” in a
nonjudicial foreclosure.
       The Kalnokis contend that the court erred in ruling the Uniform Commercial Code
does not apply to a nonjudicial foreclosure sale. In their opening brief, the Kalnokis
contend, without citation to any particular provision, that Article 3 of the Uniform

                                             49
Commercial Code governs the transfer of mortgages and notes to a securitized trust.
Because the “Note with wet ink was not delivered or transferred to U.S. Bank,” the
Assignment was void and the debt obligation was nullified.
       In asserting the 11th cause of action should not have been dismissed, the sum total
of the Kalnokis’ argument is as follows: “In the Eleventh Cause of Action of the
Amended Complaint [(]CT Vol.-I, P60-61) a violation of the applicable sections of the
Uniform Commercial Code was alleged in relation to the assignment of the Deed of Trust
of the Kalnokis’ Property. The dismissal of said cause of action with prejudice
constituted prejudicial, reversible, judicial error.”
       As noted above, the argument advanced by the Kalnokis has repeatedly been
rejected by numerous courts. In Siliga, the court held that there was no legal basis for the
claim that the foreclosing party must possess the original note. (Siliga, supra,
219 Cal.App.4th at p. 84, fn. 5, disapproved on other grounds in Yvanova, supra,
62 Cal.4th at p. 939, fn.13.) Similarly, in Shuster, the court rejected a claim that the
defendants had no right to foreclose because they were not the “ ‘holder in due course’ ”
of the promissory note. (Shuster, supra, 211 Cal.App.4th at pp. 511-512.)
       In Debrunner, the court concluded that provisions of the California Uniform
Commercial Code pertaining to negotiable instruments do not apply to nonjudicial
foreclosures. (Debrunner, supra, 204 Cal.App.4th at pp. 440-441.) Like the Kalnokis,
the plaintiff in Debrunner argued an assignee must physically receive the promissory
note and endorse it, or an assignment is “ ‘completely ineffective’ and ‘a legal nullity.’ ”
(Id. at p. 439.) In rejecting the argument, the Debrunner court found that the
“[p]laintiff’s reliance on the California Uniform Commercial Code provisions pertaining
to negotiable instruments is misplaced.” (Id. at p. 440.) Noting that “[t]he
comprehensive statutory framework established [in sections 2924 to 2924k] to govern
nonjudicial foreclosure sales is intended to be exhaustive[,]” the court was “not
convinced that the cited sections of the California Uniform Commercial Code

                                              50
(particularly [section] 3301) displace[d] the detailed, specific, and comprehensive set of
legislative procedures the Legislature has established for nonjudicial foreclosures.” (Id.
at pp. 440-441.)
       We agree with Debrunner and the numerous other courts that have held a
foreclosing party need not possess the note prior to foreclosing. (See e.g., Spence v.
Wells Fargo Bank, N.A. 2011 WL 1668320, at *2 (E.D. Cal. May 03, 2011) [Commercial
Code section 3301 has “no application in the instant context of real property financing”];
Blanco v. Am. Home Mortg. Servicing. 2010 WL 716311, at *2 (E.D. Cal. Feb. 26, 2010)
[rejecting application of California Commercial Code section 3301 in mortgage context];
Germon v. BAC Home Loans Servicing, L.P. 2011 WL 719591, at *2 (S.D. Cal. 2011)
[“the Commercial Code does not govern nonjudicial foreclosures under deeds of trust
under California law”].) Because Civil Code section 2924, subdivision (a)(1) permits a
notice of default to be filed by the “trustee, mortgagee, or beneficiary, or any of their
authorized agents,” and does not mandate physical possession of the underlying
promissory note in order for this initiation of foreclosure.

                                            XIII

                                       Rosenthal Act

       The Kalnokis contend the court erred in dismissing their 12th cause of action for
violating the California Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) as
alleged in the amended complaint. (Civ. Code, § 1788.) The totality of their argument
on appeal is as follows: “The dismissal of said cause of action with prejudice constituted
prejudicial, reversible, judicial error. All of the Respondents herein were debt collectors
and by their fraudulent and criminal acts while collecting a debt violated the mandate of
the above Act.”
       Because the Kalnokis have not provided sufficient argument or citation to any
legal authority for their contention that defendants violated the Rosenthal Act, we deem

                                             51
the issue forfeited. (Nelson, supra, 172 Cal.App.4th at p. 862 [court declined to address
argument on issue that appellant had failed to provide more than a brief recitation of the
argument in his brief without supporting authority].) Even if not forfeited, however, the
court did not err in sustaining the demurrers to the Kalnokis’ 12th cause of action based
on the Rosenthal Act.
       The Rosenthal Act is intended “to prohibit debt collectors from engaging in unfair
or deceptive acts or practices in the collection of consumer debts and to require debtors to
act fairly in entering into and honoring such debts.” (Civ. Code, § 1788.1.) Under the
act, a “debt collector” is defined as “any person who, in the ordinary course of business,
regularly, on behalf of himself or herself or others, engages in debt collection.” (Civ.
Code, § 1788.2, subd. (c).) “Debt” is defined as “money, property or their equivalent
which is due or owing or alleged to be due or owing from a natural person to another
person.” (Civ. Code, § 1788.2, subd. (d).)
       Numerous courts have held that the mere allegation that a defendant foreclosed on
a deed of trust does not implicate the Rosenthal Act. (See Izenberg v. ETS Services, LLC
(2008) 589 F. Supp. 2d 1193, 1199 (Izenberg) [“Because foreclosure does not constitute
debt collection under the [Rosenthal Act], it does not appear that plaintiff can cure this
deficiency”]; Rockridge, supra, 985 F.Supp.2d at pp. 1164-1165 [foreclosure allegation
without more does not implicate Rosenthal Act]; Reyes v. Wells Fargo Bank, N.A. 2011
WL 30759, at *19 (N.D. Cal. Jan. 3, 2011) [collecting cases].) The allegations in the
amended complaint focus on the defendants’ foreclosure of the Kalnokis’ home. Such
allegations are insufficient to raise a valid cause of action under the act.

                                             XIV

                     Motions for Reconsideration and Leave to Amend

       The Kalnokis contend the court abused its discretion in denying their motion for
reconsideration of the court’s ruling sustaining the demurrer to the second amended

                                              52
complaint filed by FATCO and Loanstar and their motion for leave to file a proposed
third amended complaint. The proposed third amended complaint, they argue, “cogently
sets forth numerous valid causes of action, which were also supported by the exhibits
attached thereto and incorporated therein, yet the lower court disallowed the filing of said
Complaint.” Other than summarily concluding that the court’s denial of the motions
constituted an abuse of discretion, defendants do not set forth in what manner their
pleading could be amended to state a viable cause of action, nor do they cite any new
facts or any authority supporting amendments to specific causes of action.
       FATCO and Loanstar argue that as a matter of law no appeal lies from an order
denying a motion for reconsideration. Subdivision (g) of Code of Civil Procedure section
1008, however, provides: “An order denying a motion for reconsideration made pursuant
to subdivision (a) is not separately appealable. However, if the order that was the subject
of a motion for reconsideration is appealable, the denial of the motion for reconsideration
is reviewable as part of an appeal from that order.” Because the orders sustaining the
demurrers without leave to amend were appealable following the entry of the dismissal
judgments (Code Civ. Proc., § 904.1, subd.(a)(1); Conley v. Roman Catholic Archbishop
(2000) 85 Cal. App. 4th 1126, 1130), an order denying reconsideration of that same
demurrer order may be reviewed as part of that appeal.
       Code of Civil Procedure section 1008, subdivision (a) requires that a motion for
reconsideration be based on new or different facts, circumstances, or law. (Code Civ.
Proc., § 1008, subd. (a).) A party seeking reconsideration, moreover, must provide a
satisfactory explanation for the failure to produce the evidence at an earlier time. (New
York Times Co. v. Superior Court (2005) 135 Cal. App. 4th 206, 212.) When a plaintiff
files a motion for reconsideration of a court’s decision sustaining a demurrer to a
complaint without leave to amend, the court must determine whether the plaintiff’s
proposed amended complaint corrects the deficiencies in the original complaint. (Careau
& Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal. App. 3d 1371, 1386-1387.)

                                            53
“A trial court’s ruling on a motion for reconsideration is reviewed under the abuse of
discretion standard.” (New York Times, supra, 135 Cal.App.4th at p. 212.)
       Similarly, once a court concludes a complaint fails on any grounds stated in a
demurrer, the court must consider whether there is a “ ‘ “reasonable possibility” ’ the
complaint’s defect(s) can be cured by an amendment.” (Jenkins, supra, 216 Cal.App.4th
at p. 506, disapproved on other grounds by Yvanova, supra, 62 Cal.4th at p. 939, fn. 13.)
“If it is apparent the complaint’s defects can be cured, the trial court has abused its
discretion and we will reverse the judgment. [Citation.] Alternatively, if it is apparent
the complaint’s defects cannot be cured, no abuse of discretion has occurred and we will
affirm the judgment.” (Id. at p. 507.) The plaintiff bears the burden of proving the
reasonable possibility of such a curative amendment. (Ibid.; Cooper v. Leslie Salt Co.
(1969) 70 Cal. 2d 627, 636-637 [“Plaintiff must show in what manner he can amend his
complaint and how that amendment will change the legal effect of his pleading”].)
“Absent an effective request for leave to amend the complaint in specified ways, an abuse
of discretion can be found ‘ “only if a potentially effective amendment were both
apparent and consistent with the plaintiff’s theory of the case.” [Citation.]’ ” (Jenkins, at
p. 507.)
       On this record, we cannot say the trial court abused its discretion in denying the
Kalnokis’ request to reconsider the FATCO/Loanstar demurrer ruling or in denying leave
to file the proposed third amended complaint. As proposed, the third amended complaint
was an unwieldy 116 pages long with 752 separate paragraphs and 13 causes of action.
Attached to the pleading were over 100 pages of exhibits. The proposed third amended
complaint had “nearly doubled in size” from the second amended complaint.
       In ruling on the motion for reconsideration, the trial court found the proposed third
amended complaint did not state new facts because “they were essentially set forth in the
opposition to the demurrer to the Second Amended Complaint” it also found that the
“new law” the Kalnokis claimed gave rise to additional causes of action--the Homeowner

                                              54
Bill of Rights--was not retroactive and did not become effective until January 1, 2013,
well after the foreclosure sale in this case took place.
       In denying the motion for leave to amend, the court found the Kalnokis again
failed to comply with rule 3.1324 of the California Rules of Court, which identifies the
required contents of a motion to amend a pleading and its supporting declaration. (Cal.
Rules of Court, rule 3.1324, subds. (a), (b).) Although the Kalnokis “conced[ed] that the
additions have ‘changed each and every and/or all of the paragraphs and information on
each, every and/or all lines on each, every and/or all pages in the Third Amended
Complaint’ and that ‘in most instances the changes are significant, since all the facts and
the legal theories were reformatted[,]’ ” the Kalnokis failed to state the particular
allegations they proposed to add or how the “significant” changes to the pleading stated
any viable cause of action.
       A review of the proposed third amended complaint reveals that the Kalnokis had
already raised the purportedly “new facts” in opposing the demurrers to the second
amended complaint. And, as the trial court properly concluded and discussed more fully
below, the Homeowner Bill of Rights is not retroactive. (Rockridge, supra, 985
F.Supp.2d at p. 1152.) Thus, the Kalnokis could not amend their complaint to allege
valid causes of action based on the changed law.
       We also find no abuse of discretion in requiring the Kalnokis to file a motion for
leave to amend that complied with the California Rules of Court, particularly rule 3.1324.
(Hataishi v. First American Home Buyers Protection Corp. (2014) 223 Cal. App. 4th
1454, 1469 [trial court did not abuse its discretion in requiring the plaintiff to bring a
motion to amend, compliant with the California Rules of Court, to which the defendant
would have an opportunity to respond].) This is especially so given the voluminous
nature of the proposed third amended complaint. At over 100 pages, the proposed
pleading was cumbersome to say the least, making it critical that the Kalnokis
specifically identify the proposed changes and the legal effect of the changes in order to

                                              55
allow the defendants an opportunity to adequately respond to the motion and to permit
the court to evaluate the pleading. The Kalnokis failed to do so.
       Apart from this, we also conclude that none of the causes of action alleged in the
second amended complaint could be amended to state viable causes of action. For the
multiple fraud causes of action, at a minimum, the Kalnokis cannot establish damages or
prejudice because none of the allegedly fraudulent documents caused them to default on
their loan or otherwise prevented them from bringing the loan current. (Herrera v.
Federal National, supra, 205 Cal.App.4th at p. 1507; Fontenot, supra, 198 Cal.App.4th
at p. 272), and the publicly recorded documents do not show the wrong party foreclosed.
(Sciarratta, supra, 247 Cal.App.4th at p. 562.) Likewise, in light of their previous
allegations that they did not tender the full amount due and that they could not tender the
amount because they lacked the financial resources to bring the amount current, it is
doubtful they can amend their complaint to comply with the applicable tender rule. (Berg
& Berg Enterprises, LLC v. Boyle (2009) 178 Cal. App. 4th 1020, 1034 [court “may
consider the factual allegations of prior complaints, which a plaintiff may not discard or
avoid by making ‘ “ ‘contradicatory averments, in a superseding, amended
pleading.’ ” ’ ”].) Given that the fraud causes of action fail, so, too, does the derivative
conspiracy cause of action. (Jones, supra, 112 Cal.App.4th at p. 1541.)
       Because the Kalnokis’ complaint largely rests on the allegedly fraudulent
documents recorded during the foreclosure process--admittedly after they had already
defaulted ([default in December 2009 due to health issues], [Notice of Default initiating
foreclosure recorded April 2010])--they cannot establish causation for purposes of a
Business and Professions Code section 17200 violation. (Jenkins, supra,
216 Cal.App.4th at p. 523 [borrower in default could not establish causation prong for
standing under Business and Professions Code section 17204 because default on loan
triggered foreclosure and not the recording of any allegedly fraudulent foreclosure-related
documents].) Case law, moreover, establishes that Civil Code section 2932.5 does not

                                              56
apply to deeds of trust (Rossberg, supra, 219 Cal.App.4th at p. 1497; Calvo, supra,
199 Cal.App.4th at p. 122), and that no remedy exists for any purported violation of Civil
Code section 2923.5 once a foreclosure sale has occurred. (Stebley, supra,
202 Cal.App.4th at pp. 525-526; Mabry, supra, 185 Cal.App.4th at pp. 235-236 [after a
nonjudicial foreclosure sale, section 2923.5 provides no relief].) Similarly, declaratory
relief is improper to remedy a past wrong like the completed foreclosure sale here.
(Babb, supra, 3 Cal.3d at p. 848.)
       And there is no requirement that a creditor-beneficiary pay cash at a nonjudicial
foreclosure sale to purchase the property secured by a deed of trust. (Alliance Mortgage,
supra, 10 Cal.4th at p. 1238.) Allowing the Kalnokis to plead more detailed allegations
regarding the bid would thus be unavailing.
       Finally, neither the provisions of the Uniform Commercial Code nor the Rosenthal
Act apply to a nonjudicial foreclosure of a deed of trust. (Debrunner, supra,
204 Cal.App.4th at pp. 440-441 [finding that provisions of the California Uniform
Commercial Code pertaining to negotiable instruments do not apply to nonjudicial
foreclosures]; Izenberg, supra, 589 F.Supp.2d at p. 1199 [“Because foreclosure does not
constitute debt collection under the [Rosenthal Act], it does not appear that plaintiff can
cure this deficiency”].)
       The Kalnokis’ attempt in the proposed third amended complaint to allege
violations of the California Homeowner Bill of Rights is equally without merit. The
“Homeowner Bill of Rights prohibits, among other things, ‘dual track’ foreclosures,
which occur when a servicer continues foreclosure proceedings while reviewing a
homeowner’s application for a loan modification; requires a single point of contact for
homeowners who are negotiating a loan modification; and expands notice required to be
given to the borrower before the lender can take action on a loan modification or pursue
foreclosure.” (Lueras, supra, 221 Cal.App.4th at p. 86, fn. 14.) The Governor approved
the legislation on July 11, 2012, and it became effective January 1, 2013. (Sen. Bill No.

                                              57
900 (2011-2012 Reg. Sess.); Assem. Bill No. 278 (2011-2012 Reg. Sess.; see Stats. 2012,
ch. 86, §§ 1-25; Stats. 2012, ch. 87, §§ 1-25.) Its statutory provisions are not retroactive,
however. (Rockridge, supra, 985 F.Supp.2d at p. 1152.) Because the Kalnokis’ home
was sold at a nonjudicial foreclosure sale in 2011, nearly two years before the
Homeowner Bill of Rights took effect, the legislation does not apply.
       Loanstar also points out that its acts of recording foreclosure documents and
conducting the trustee’s sale were protected by the privilege in Civil Code section 47,
which applies to foreclosure proceedings through Civil Code section 2924(d). (Civ.
Code, § 2924, subds. (d)(1)-(3) [“All of the following shall constitute privileged
communications pursuant to Section 47: [¶] (1) The mailing, publication, and delivery
of notices as required by this section. [and] [¶] (2) Performance of the procedures set
forth in this article. . . .”].) That privilege generally bars any tort action based on a
protected communication made without malice. (Kachlon v. Markowitz (2008)
168 Cal. App. 4th 316, 336, 341(Kachlon).) For purposes of the privilege, “malice is
defined as actual malice, meaning ‘ “that the publication was motivated by hatred or ill
will towards the plaintiff or by a showing that the defendant lacked reasonable grounds
for belief in the truth of the publication and therefore acted in reckless disregard of the
plaintiff’s rights.” ’ ” (Id. at p. 336.)
       The second amended complaint’s conclusory allegations that Loanstar knew the
Assignment violated the pooling and services agreement for the Bear Stearns securitized
trust because it occurred five years after the trust closed, that the Assignment violated
numerous state federal and contractual mandates, there was no monetary consideration
paid at the time of the Assignment, and that the note was not transferred are insufficient
to establish malice. The second amended complaint contains no allegations as to how
Loanstar purportedly knew this information.

                                               58
       Given the above, it is unlikely the Kalnokis could cure the deficiencies in any of
their causes of action. The court, then, did not abuse its discretion in refusing to
reconsider its ruling on the demurrer or denying them leave to amend a third time.

                                             XV

                      The Attorney Fees Appeal (Case No. C075062)

       In their second appeal, the Kalnokis challenge the trial court’s order awarding
defendants Wells Fargo and U.S. Bank $14,500 in attorney fees. The determination of
entitlement to attorney fees is a question of law subject to de novo review.
(Conservatorship of Whitley (2010) 50 Cal. 4th 1206, 1213-1214.)
       As Wells Fargo and U.S. Bank rightly note, the Kalnokis’ appellate briefs largely
rehash the same arguments discussed above on the demurrer rulings. We need not
readdress such issues, but instead proceed to arguments concerning the propriety of the
fee award.
       The deed of trust and promissory note both contain provisions allowing for
attorney fees under certain circumstances. Section 9 of the deed of trust, entitled
“Protection of Lender’s Interest in the Property and Rights Under this Security
Instrument,” provides in relevant part: “If (a) Borrower fails to perform the covenants
and agreements contained in this Security Instrument, [or] (b) there is a legal proceeding
that might significantly affect Lender’s interest in the Property and/or rights under this
Security Instrument (such as a proceeding . . . to enforce laws or regulations), . . . then
Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s
interest in the Property and rights under this Security Instrument. . . . Lender’s actions
can include, but are not limited to . . . (b) appearing in court; and (c) paying reasonable
attorneys’ fees to protect its interest in the Property and/or rights under this Security
Instrument, including its secured position in a bankruptcy proceeding.”

                                              59
       Section 7, subdivision (E) of the promissory note provides, “If the Note Holder
has required me to pay immediately in full as described above, the Note Holder will have
the right to be paid back by me for all of its costs and expenses in enforcing this Note to
the extent not prohibited by applicable law. Those expenses include, for example,
reasonable attorney’s fees.”
       Under these two unilateral clauses, the Kalnokis agreed to pay attorney fees in any
action instituted on the promissory note, and in any action affecting the security of the
deed of trust or the rights or powers of the lender. Civil Code section 1717 makes these
unilateral attorney fee clauses reciprocal (Civ. Code, § 1717, subd. (a)), and would have
entitled the Kalnokis to attorney fees if they prevailed in an action on the note or deed of
trust. (Kachlon, supra, 168 Cal.App.4th at p. 347.)
       In arguing the attorney fees award was improper under the above provisions, the
Kalnokis initially contend that neither Wells Fargo nor U.S. Bank are parties to the deed
of trust or note and thus neither have privity of contract or standing to obtain fees based
on the attorney fees provisions in those instruments. For reasons already discussed, we
find the Kalnokis’ “lack of privity” or “lack of standing” argument meritless.
       The argument rests on the notion that neither Wells Fargo nor U.S. Bank as trustee
for the Bear Stearns securitized trust obtained any interest in the promissory note or deed
of trust from Wells Fargo Home Mortgage, Inc., the original lender and beneficiary. But,
Wells Fargo succeeded to Wells Fargo Home Mortgage, Inc.’s interest in the note and
deed of trust following their merger in 2004 (12 U.S.C. § 215a, subd. (e)), and Wells
Fargo assigned the note and deed of trust to U.S. Bank as trustee for the Bear Stearns
securitized trust in June 2010.
       A successor in interest or assignee of a contract containing an attorney fees
provision is entitled to recover attorney fees precisely as his predecessor in interest or
assignor could have done. (See e.g., Adjustment Corp. v. Marco (1929)
100 Cal. App. 338, 343 [assignee entitled to recover attorney fees]; Exarhos v. Exarhos

                                              60
(2008) 159 Cal. App. 4th 898, 906 [successor in interest of decedent would have been
entitled to attorney fees had he prevailed in action against bank based on agreement;
because of mutuality of remedy principles under Civil Code section 1717, the successor
in interest was liable for attorney fees as bank was the prevailing party].) Thus, the fact
that Wells Fargo and U.S. Bank were not the original lender or beneficiary under the
deed of trust is irrelevant.
       Likewise, we find the Kalnokis next contention--that they did not assert any
contract causes of action in their pleadings--without merit. The fifth cause of action in
the amended complaint is for breach of the implied covenant of good faith and fair
dealing. Because the covenant of good faith and fair dealing is a contract term (Foley v.
Interactive Data Corp. (1988) 47 Cal. 3d 654, 683 (Foley) [“ ‘Every contract imposes
upon each party a duty of good faith and fair dealing in its performance and its
enforcement’ ”]), “compensation for its breach has almost always been limited to contract
rather than tort remedies.” (Id. at pp. 684, 692-693 [refusing to recognize tort action for
breach of implied covenant in context of employment contracts]; but compare Crisci v.
Security Ins. Co. (1967) 66 Cal. 2d 425 [exception recognized to permit an insured to
recover in tort for emotional damages caused by the insurer’s breach of the implied
covenant].)
       The 13th cause of action in the amended complaint sought to rescind the loan
contract. Other courts have found that an action for rescission is an “action on a
contract” for purposes of an award of attorney fees and other costs under Civil Code
section 1717. (See e.g., Hastings v. Matlock (1985) 171 Cal. App. 3d 826, 840-841[“In an
action to enforce the rescission of a written land sale agreement, containing a clause for
attorney’s fees which does not limit recovery of such fees to any particular form of action
involving the contract, the prevailing party is entitled to an award of such fees”];
Sharabianlou v. Karp (2010) 181 Cal. App. 4th 1133, 1146 [recognizing attorney fees may
be appropriate in cases involving rescission of real property purchase agreements].)

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       In the second amended complaint’s declaratory relief claim, the Kalnokis alleged
the defendants had violated their contractual duties, and had failed to prove they had the
right to foreclose as owners of the deed of trust or note. They sought a declaration that
the foreclosure sale was invalid and that they were the true owners of the property.
“ ‘Actions for a declaration of rights based upon an agreement are “on the contract”
within the meaning of Civil Code section 1717.’ ” (Kachlon, supra, 168 Cal.App.4th at
p. 348.)
       But even if the Kalnokis technically did not sue for breach of contract, the
expansive language in the deed of trust justifies the trial court’s fee order in this instance.
(See Lerner v. Ward (1993) 13 Cal. App. 4th 155, 159-161 [fee provision that permitted
attorney fees in any action arising out of the agreement was broad enough to encompass
tort causes of action]; see also Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal. App. 4th
1338, 1342-1343 [language providing for attorney fees to the prevailing party in any
“ ‘lawsuit or other legal proceeding’ to which ‘this Agreement gives rise’ ” was
sufficiently broad “to encompass both contract actions and actions in tort. . . .”].) Rather
than limiting fees specifically to “breach of contract” causes of action, the deed of trust
fee provision broadly applies to any “legal proceeding that might significantly affect
Lender’s interest in the Property and/or rights under this Security Instrument (such as a
proceeding . . . to enforce laws or regulations).” (Italics added.)
       Without question, the litigation below constituted a legal proceeding that might
have “significantly affect[ed]” defendants’ interest in the property or their rights under
the deed of trust. Had the Kalnokis’ prevailed and obtained the relief they sought, the
foreclosure sale would have been vacated, the Trustee’s Deed to U.S. Bank cancelled,
and the property returned to the Kalnokis.
       We also find persuasive the decisions cited by Wells Fargo and U.S. Bank that
have awarded attorney fees based on identical attorney fee language in a deed of trust and
promissory note. (See Whittle v. Wells Fargo 2010 WL 1444675, at *2-3 (E.D. Cal.

                                              62
2010) (Whittle); Lopez v. Wachovia Mortgage 2010 WL 3034167, at *3 (E.D. Cal. 2010)
(Lopez); Zimmerman v. Aurora Loan Services 2009 WL 81392, at *2 (N.D. Cal. 2009)
(Zimmerman).) In each of those cases, the courts found the broad scope of the language
permitted the recovery of attorney fees in foreclosure related actions like the one here.
(Whittle at *2-3 [complaint sought injunctive relief to halt foreclosure and collection and
contained allegations of fraud and commission of crimes and violations]; Lopez at *3
[finding complaint seeking injunctive relief to stop foreclosure and collection
significantly affected lender’s interest under deed of trust and note and that all claims
were inextricably intertwined thereby allowing recovery of fees for defending all claims];
Zimmerman at *1-2 [identical deed of trust fee provision entitled lender to attorney fees
for dismissing action based on foreclosure of plaintiffs’ home].)
       The Kalnokis’ attempt to distinguish Whittle, Lopez, and Zimmerman on the
ground that each involved the original lender is unavailing as nothing in the cases limits
their applicability to original lenders. Because Wells Fargo and U.S. Bank succeeded to
or were otherwise assigned their interests in the note and deed of trust, thus stepping into
the shoes of the original lender and beneficiary, and since the Kalnokis’ action
“significantly affected” their rights under the note and deed of trust, the cases and their
reasoning persuasively apply to the present matter.
       Like the trial court, we also reject the Kalnokis’ argument that the deed of trust
was not properly authenticated during the motion for attorney fees or that it was
otherwise unreliable. The deed of trust presented on the fee motion is the same as the
deed of trust attached to the Kalnokis’ second amended complaint, which they admitted
in the complaint was a true and correct copy of the document.
       The Kalnokis’ next argue that Wells Fargo and U.S. Bank should not be deemed
“prevailing parties” for purposes of a fee award. While they concede Wells Fargo and
U.S. Bank are “currently deemed to be the prevailing parties in the underlying action,”
they nevertheless contend that the trial court’s ruling in defendants’ favor is only

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temporary as it was allegedly obtained by fraud, which they believe will be overturned on
appeal.
       Wells Fargo and U.S. Bank obtained an order sustaining their demurrer to all
causes of action in the second amended complaint without leave to amend. The court
then entered a judgment of dismissal with prejudice in their favor and against the
Kalnokis; the judgment specifically recited that the Kalnokis take nothing by their second
amended complaint. The judgment of dismissal materially altered the legal relationship
of the parties because Wells Fargo and U.S. Bank do not remain subject to the risk that
the Kalnokis can re-file their action. This is especially so since, as discussed above, we
affirm the judgment on the successful demurrers. Wells Fargo and U.S. Bank, then,
undoubtedly constitute the prevailing parties in this action.
       In their reply, the Kalnokis also half-heartedly contend Wells Fargo was not a
“prevailing party” because it was never actually a defendant in the action. We find the
argument disingenuous. Among numerous other references, Paragraph 2 of the second
amended complaint specifically names Wells Fargo as a defendant. The paragraph partly
provides, “At all times herein mentioned, Defendants, WELLS FARGO BANK NA . . .”
The first cause of action for fraud is alleged against Wells Fargo alone.
       Based on the broad language of the deed of trust fee provision, the trial court did
not err in awarding defendants attorney fees for successfully defending this action.
Because the Kalnokis do not challenge the amount of the fee award, $14,500, we do not
consider the propriety of that amount on appeal. (Telish v. State Personnel Bd. (2015)
234 Cal. App. 4th 1479, 1487, fn.4 [“An appellant’s failure to raise an argument in the
opening brief waives the issue on appeal”].)

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                                            XVI

                  The Rental Disbursement Appeal (Case No. C079144)

       The Kalnokis’ third appeal challenges the trial court’s order disbursing the rental
payments they deposited with the court pursuant to Code of Civil Procedure section
1170.5. The Kalnokis again repeat at length, and often without any citation to the record
or to any authority, arguments concerning the allegedly erroneous demurrer rulings. We
do not readdress these issues.
       Turning to the propriety of the challenged disbursal order, the Kalnokis contend
the trial court erred in granting the joint motion of Wells Fargo and U.S. Bank to disburse
the funds because Wells Fargo was never a party to the unlawful detainer action and thus
had no standing or entitlement to the rental funds, and that even if U.S. Bank was entitled
to seek reimbursement, it waived any right to such money during the proceedings on the
motion for summary judgment in the unlawful detainer action. We find the latter
argument dispositive of the appeal.
       To support their waiver argument, the Kalnokis cite U.S. Bank’s summary
judgment motion, which they allege includes the following: “ ‘4. Waiver of Holdover
Damages [¶] For purposes of this Motion for Summary Judgment, Plaintiff (U.S. Bank,
NA) waives the rental holdover damages demanded in Plaintiff’s Complaint.’ ” The
Kalnokis also claim that during the hearing on the motion for summary judgment U.S.
Bank’s counsel confirmed that U.S. Bank was not seeking any monetary damages but
solely the immediate possession of the property.
       As far as we can tell, none of the three appellate records contain either the
summary judgment papers in the unlawful detainer action or a reporter’s transcript of the
hearing. Nevertheless, the record on the Kalnokis’ petition for writ of mandate contains
U.S. Bank’s summary judgment motion. (See Cal. Rules of Court, rule 8.147 [party may
incorporate by reference all or parts of a record in a prior appeal].) Section 4 of the

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moving papers states in full: “4. Waiver of Holdover Damages [¶] For purposes of this
Motion for Summary Judgment, Plaintiff waives the rental holdover damages demanded
in Plaintiff’s Complaint. If, for any reason, this Motion for Summary Judgment is not
granted, Plaintiff reserves the right to seek rental holdover damages.” Wells Fargo and
U.S. Bank, moreover, do not appear to dispute the characterization of the position
allegedly taken by counsel at the hearing regarding waiver, but rather merely the scope of
the purported waiver.
       The record in this case does contain the judgment entered in the unlawful detainer
action. That document includes the following notation: “The plaintiff waives all
monetary damages.”
       The trial court found the above-quoted language did not mean Wells Fargo and
U.S. Bank waived the rental payments deposited by the Kalnokis during the pendency of
the litigation. According to the court’s disbursement order, even if Wells Fargo, which
was defined collectively with U.S. Bank in the moving papers, waived monetary damages
in the unlawful detainer action, Wells Fargo was still entitled to the funds deposited with
the court because that money, in the court’s view, was “not considered UD monetary
damages, but rather damages caused by the extension of the UD case.” Thus, Wells
Fargo did not waive payment of the deposited funds.
       The funds were deposited with the court pursuant to Code of Civil Procedure
section 1170.5. Under that statute, an unlawful detainer trial must be held within 20 days
of the date that the request to set the time of trial is made. (Code Civ. Proc., § 1170.5,
subd. (a).) If a trial is not held within the specified time, and the trial court finds there is
a reasonable probability the plaintiff will prevail in the action, the court “shall determine
the amount of damages, if any, to be suffered by the plaintiff by reason of the extension,
and shall issue an order requiring the defendant to pay that amount into court as the rent
would have otherwise become due and payable or into an escrow designated by the court

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for so long as the defendant remains in possession pending the termination of the action.”
(Code Civ. Proc., § 1170.5, subd. (c).)
       “This statutory scheme allows the court to require a defendant, prior to trial, to
post a plaintiff’s potential damages under specified circumstances concerning the setting
of the trial date.” (Garcia v. Cruz (2013) 221 Cal.App.4th Supp. 1, 5-6 (Garcia); Cal.
Rules of Court, rule 8.1115, subd. (a) [opinions of the California Court of Appeal or
superior court appellate division that are certified for publication or ordered published
may be cited or relied on by a court or a party in another action].) “[S]ection 1170.5
limits the amount that the court can require to be deposited to prospective damages the
landlord may suffer as the result of granting a continuance of the trial date to a tenant in
possession . . . .” (Garcia, at p. 7.)
       In general, there are at least two types of damages available in an unlawful
detainer action. Back rent or other accrued damages that were owed prior to filing the
unlawful detainer complaint constitute one form of damages. (Medford v. Superior Court
(1983) 140 Cal. App. 3d 236, 239; Garcia, supra, 221 Cal.App.Supp. at p. 7.) Prospective
damages, which the landlord suffers when the tenant remains in possession of the
property after initiating an unlawful detainer action, are another form of damages.
(Medford, at pp. 240-241; Garcia, at p. 7.) Both are equally valid types of “damages” in
an unlawful detainer action.
       We are not persuaded by the argument of Wells Fargo and U.S. Bank that “the
amounts deposited are not ‘damages’ which were sought at the time the action was filed,
or which were contemplated then.” Paragraph 10 of the unlawful detainer complaint
alleges as follows: “The reasonable value of the use and occupancy of the Property is at
least $50.00 per day, and damages to Plaintiff caused by Defendant(s)’ unlawful
detention thereof has accrued at said rate since March 17, 2011, and will continue to
accrue at said rate so long as Defendant(s) remain in possession of the property.”
(Italics added.) Accordingly, U.S. Bank prayed “[f]or damages in the amount of at least

                                             67
$50.00 per day from March 17, 2011, through the date of entry of judgment.” (Italics
added.) The $1,950 rental rate stipulated to by the parties, which is “at least $50.00 per
day,” represented the fair rental rate for allowing the Kalnokis to remain in possession of
the property until the litigation was concluded and judgment was entered.
       The judgment expressly states that the “plaintiff waives all monetary damages.”
(Italics added.) The word “all” means “the whole amount, quantity, or extent of,” and
“every member or individual component of.” (Merriam-Webster’s Collegiate Dictionary
(11th ed. 2003) at p. 31.) The notation in the judgment thus makes clear that U.S. Bank
waived its right to recover any type of monetary damages in the action. This includes the
nearly $40,000 in prospective damages the Kalnokis deposited with the court pursuant to
Code of Civil Procedure section 1170.5.
       While the Kalnokis appealed the unlawful detainer judgment in the appellate
division of the superior court, it does not appear that either U.S. Bank or Wells Fargo
appealed the court’s finding in the judgment that U.S. Bank had waived all monetary
damages. In any event, the judgment was affirmed on appeal and has since become final.
The Kalnokis’ petition for writ of mandate to this court challenging the unlawful detainer
judgment has also been denied.
       Because the unlawful detainer judgment states all monetary damages were waived,
and the rental funds on deposit with the court constitute a form of monetary damages in
the unlawful detainer action, the trial court erred in awarding the funds to Wells Fargo.
We therefore reverse the disbursement order.

                                           XVII

                                  Motions for Sanctions

       The Kalnokis filed four sanction motions during the pendency of the present
appeals. One has been denied; the other three remain pending.

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       The motions essentially assert the same basis for sanctions: because the
foreclosure documents were allegedly fraudulent, counsel for defendants, who filed the
documents in court and argued their meaning and validity should be sanctioned. Given
that we have affirmed the judgments in the foreclosure appeal and the attorney appeal, we
deny the Kalnokis’ motions for sanctions.

                                      DISPOSITION
       The judgments in case No. C073207 are affirmed. The attorney fees order in case
No. C075062 is affirmed. The order in case No. C079144 disbursing the $40,950 plus
accrued interest to Wells Fargo, which the Kalnokis deposited with the trial court
pursuant to Code of Civil Procedure section 1170.5, is reversed; the court is directed to
enter a new order disbursing the money to the Kalnokis. Each party shall bear their own
costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3).)

                                                       HULL                  , J.

We concur:

      BLEASE                , Acting P. J.

      DUARTE                , J.

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