Hoffman v. Deutsche Bank National Trust Co. CA4/2

[size=2][fullfont face="Times New Roman"]Filed 10/12/18 Hoffman v. Deutsche Bank National Trust Co. CA4/2[/size][/fullfont]

[b][size=4][fullfont face="Times New Roman"]NOT TO BE PUBLISHED IN OFFICIAL REPORTS[/size][/fullfont][/b]

[b][size=4][fullfont face="Times New Roman"]IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA[/size][/fullfont][/b]

[b][size=4][fullfont face="Times New Roman"]FOURTH APPELLATE DISTRICT[/size][/fullfont][/b]

[b][size=4][fullfont face="Times New Roman"]DIVISION TWO[/size][/fullfont][/b]

[size=4][fullfont face="Times New Roman"]APPEAL from the Superior Court of San Bernardino County. Bryan F. Foster, Judge. Affirmed.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Moore & Pico and Dennis Moore for Plaintiff and Appellant.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Bryan Cave, Christopher L. Dueringer, and Kazim A. Naqvi for Defendants and Respondents.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]According to her complaint, Robin L. Hoffman took out a home loan from IndyMac Bank, FSB (IndyMac). Under the deed of trust, the beneficiary was Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for IndyMac and its successors and assigns. IndyMac was taken over by the Federal Deposit Insurance Corporation (FDIC); most or all of its assets were sold. Thereafter, MERS purported to assign the loan to Deutsche Bank National Trust Company as Trustee for Residential Asset Securitization Trust 2005-A8CB Mortgage Pass-Through Certificates Series 2005-H (Trust). Finally, the Trust foreclosed.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Based on these facts, Hoffman asserted a cause of action against the Trust and others for wrongful foreclosure. The trial court sustained a demurrer, without leave to amend.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman now contends:[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]1. The assignment was void because MERS no longer had an interest in the note and trust deed. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]2. Hoffman was not required to allege either tender or prejudice because the assignment was void. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]3. Hoffman is entitled to leave to amend. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]We will affirm because Hoffman has not shown error.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]I[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]FACTUAL BACKGROUND[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The following facts are taken from the allegations of the operative (second amended) complaint.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman owned a piece of residential real property in Crestline. In 2005, she refinanced the existing loan on the property. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]As part of the refinancing, she signed a note and a deed of trust. The deed of trust defined the “Lender” as IndyMac. It defined the “beneficiary” as MERS, “solely as nominee for Lender and Lender’s successors and assigns . . . .” [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The deed of trust also provided: “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right to exercise any and all of those interests, including, but not limited to, the right to foreclose and sell the property . . . .” [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The Trust was formed in 2005 pursuant to New York law. It is governed by a pooling and service agreement. The pooling and service agreement provides that any and all assets of the Trust are to be transferred into the Trust by 2005. It also provides that, to transfer a loan into the Trust, the loan must first be transferred to an entity known as the “Depositor,” and then transferred by the Depositor to the Trust. Moreover, the original note must be endorsed and delivered to the Trust. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In 2009, IndyMac was taken over by the FDIC. Most of IndyMac’s assets were sold to OneWest Bank, FSB (OneWest). As of 2014, IndyMac no longer existed. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In April 2014, MERS purported to assign Hoffman’s note and deed of trust to the Trust.[/size][/fullfont][url=#_ftn1][b][sup][size=2][fullfont face="Times New Roman"][b][sup][size=2][fullfont face="Times New Roman"][1][/size][/size][/sup][/b][/fullfont][/fullfont][/sup][/b][/url][size=4][fullfont face="Times New Roman"] The assignment was signed by Noemi Morales, as Assistant Secretary of MERS. It stated that MERS was “acting solely as nominee for IndyMac, . . . its successors and assigns . . . .” (Capitalization altered.) [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The assignment was allegedly ineffective, however, because:[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]1. The loan was transferred to the Trust after 2005. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]2. The loan was not transferred to the Trust by the Depositor. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]3. The original note was not delivered to the Trust. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]4. IndyMac had been taken over by the FDIC, most of its assets had been sold to OneWest, and it did not exist anymore. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]5. Noemi Morales was not an officer, employee, or agent of MERS (and perhaps did not even exist). [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In September 2014, the Trust recorded a notice of default. In June 2015, it recorded a notice of trustee’s sale. In August 2015, it purchased the property at the trustee’s sale. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Ocwen Loan Servicing, LLC (Ocwen) is named as a defendant. However, other than the conclusory allegation that “[d]efendants engaged in a fraudulent and wrongful foreclosure,” there are no allegations of any wrongdoing by Ocwen. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]II[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]PROCEDURAL BACKGROUND[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman filed this action in 2015. Demurrers to her original and her first amended complaint were sustained, with leave to amend. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In 2016, she filed a second amended complaint (complaint), naming the Trust and Ocwen (defendants), among others, as defendants.[/size][/fullfont][url=#_ftn2][b][sup][size=2][fullfont face="Times New Roman"][b][sup][size=2][fullfont face="Times New Roman"][2][/size][/size][/sup][/b][/fullfont][/fullfont][/sup][/b][/url][size=4][fullfont face="Times New Roman"] It asserted a single cause of action, for wrongful foreclosure; it prayed for an order setting aside the foreclosure as well as for damages. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Defendants filed a demurrer. In it, they argued, among other things, that: (1) Hoffman lacked standing to assert noncompliance with the pooling and service agreement; (2) Hoffman failed to allege that she had tendered payment of the loan; and (3) Hoffman failed to allege that she had been prejudiced by the alleged defects in the foreclosure.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In her opposition, Hoffman argued that: (1) the thrust of her allegations was not that the pooling and service agreement was not complied with, but rather that the note and trust deed were never effectively assigned; and (2) tender and prejudice were not required because the foreclosure was void rather than merely voidable.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The trial court, without stating reasons, sustained the demurrer without leave to amend and ordered the action dismissed with prejudice.[/size][/fullfont][url=#_ftn3][b][sup][size=2][fullfont face="Times New Roman"][b][sup][size=2][fullfont face="Times New Roman"][3][/size][/size][/sup][/b][/fullfont][/fullfont][/sup][/b][/url][size=4][fullfont face="Times New Roman"] [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]III[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]ALLEGATIONS REGARDING DEFENDANTS’ RIGHT TO FORECLOSE[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman contends that she adequately alleged that defendants had no right to foreclose. [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]A demurrer should be sustained when “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) “‘In reviewing an order sustaining a demurrer, we examine the operative complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory.’ [Citation.]” (King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1050.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]“A beneficiary or trustee under a deed of trust who conducts an illegal, fraudulent or willfully oppressive sale of property may be liable to the borrower for wrongful foreclosure. [Citations.] A foreclosure initiated by one with no authority to do so is wrongful for purposes of such an action. [Citations.] . . . [O]nly the original beneficiary, its assignee or an agent of one of these has the authority to instruct the trustee to initiate and complete a nonjudicial foreclosure sale.” (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 929, fn. omitted.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The allegations of Hoffman’s complaint as to why defendants lacked such authority fall into two categories. First, she alleges that the purported assignment of the note and trust deed violated the pooling and service agreement. Second, she alleges that MERS lacked the power to assign the note and trust deed. In this appeal, however, she expressly disclaims any reliance on the pooling and service agreement; she relies exclusively on her second theory. Accordingly, we deem her first theory forfeited for purposes of this appeal, and we focus on her theory that MERS lacked the power to assign.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]MERS was the named beneficiary in the trust deed. Thus, ordinarily, it would have the authority to assign the trust deed. Hoffman does not argue that MERS lost this authority simply because IndyMac went out of existence. If she did, we would disagree, because MERS had the authority to act as nominee not only for IndyMac, but also, after IndyMac went out of existence, for IndyMac’s “successors and assigns.” [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman does argue, however, that the note and trust deed had been sold to OneWest, and OneWest was not IndyMac’s successor or assign. We disagree, for two reasons.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]First, the complaint alleged that “most of IndyMac’s assets . . . were sold to OneWest . . . .” (Italics added.) It did not allege that Hoffman’s note and trust deed were among them. For all we know, the FDIC sold them to the Trust.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]More importantly, however, the rightful owner of the note and trust deed in 2014 — no matter who that was — was a successor of IndyMac, as a matter of law. “Successor in interest” means “[s]omeone who follows another in ownership or control of property.” (Black’s Law Dict. (10th ed. 2014) p. 1660.) Initially, IndyMac held the note and trust deed, then the FDIC took over the note and trust deed,[/size][/fullfont][url=#_ftn4][b][sup][size=2][fullfont face="Times New Roman"][b][sup][size=2][fullfont face="Times New Roman"][4][/size][/size][/sup][/b][/fullfont][/fullfont][/sup][/b][/url][size=4][fullfont face="Times New Roman"] and then the FDIC sold the note and trust deed to OneWest (or sold them to whoever or did not sell them at all). In each instance, the original lender’s entire interest in the note and trust deed was conveyed. Thus, we reject Hoffman’s unsupported assertion in her brief that “OneWest was not a successor in interest to the Lender, IndyMac . . . .” [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman relies on Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552. There, the holder of the plaintiff’s note and trust deed purported to assign them twice — first to Deutsche Bank, and then to Bank of America. (Id. at p. 557.) The court held that the subsequent foreclosure by Bank of America was wrongful, because after the first assignment, the assignor had nothing left to assign. (Id. at pp. 561-565.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman argues that MERS, like the assignor in Sciarratta, no longer had anything to assign. Here, however, MERS had not made any previous assignment. Moreover, nothing else had occurred that would deprive MERS of the authority to assign.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The case most nearly on point is this court’s decision in Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, disapproved on other grounds in Yvanova v. New Century Mortgage Corp., supra, 62 Cal.4th at p. 939, fn. 13.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]There, as here, the plaintiffs’ original lender was IndyMac. (Herrera v. Federal National Mortgage Assn., supra, 205 Cal.App.4th at p. 1499.) The trust deed named MERS as beneficiary and provided that “‘ . . . MERS (as nominee for Lender and Lender's successors and assigns) has . . . the right to foreclose and sell the Property . . . .” (Ibid.) IndyMac was taken over by the FDIC, and the FDIC sold IndyMac’s assets to OneWest. MERS also assigned the plaintiffs’ note and trust deed to OneWest. OneWest then assigned the note and trust deed to Fannie Mae. (Ibid.) Finally, Fannie Mae foreclosed. (Id. at p. 1500.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]On appeal, the plaintiffs asserted that the assignment from MERS to OneWest was void because there was no agency agreement between the FDIC and OneWest. (Herrera v. Federal National Mortgage Assn., supra, 205 Cal.App.4th at pp. 1498, 1502-1503, 1505.) We held that this argument was barred by the plaintiffs’ agreement, in the trust deed itself, that MERS had the power to foreclose. (Id. at pp. 1503-1505.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Herrera[/size][/fullfont][size=4][fullfont face="Times New Roman"] is controlling here as a matter of stare decisis. We also note that, both there and here, all of the successors to IndyMac took the trust deed subject to its terms, which included its provision that MERS could act as nominee of IndyMac’s successors and assigns. Arguably, those successors could have affirmatively terminated MERS’s power to act as nominee, but because they did not, that power continued.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman’s only response to Herrera is that it is “distinguishable . . . since in her case, there are no allegations or evidence that demonstrate OneWest was the assignee or successor to IndyMac . . . .” (Capitalization altered.) As we have already held, however, there are. Indeed, on this point, the facts are the same as in Herrera.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]In this appeal, Hoffman does not argue that Noemi Morales was not duly authorized to execute the assignment. Hence, she has forfeited any such contention.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]We conclude that Hoffman has failed to allege that defendants lacked the right to foreclose. We therefore do not discuss her contentions that she did not need to allege either tender or prejudice.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]IV[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]POSSIBILITY OF AMENDMENT[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]Hoffman also contends that, even if the demurrer was properly sustained, she could amend her complaint by adding additional facts so as to state a cause of action. Apparently she would allege that she was never in default; rather, Ocwen, as loan servicer for the Trust, refused to accept her payments, demanding more than was really due.[/size][/fullfont][url=#_ftn5][b][sup][size=2][fullfont face="Times New Roman"][b][sup][size=2][fullfont face="Times New Roman"][5][/size][/size][/sup][/b][/fullfont][/fullfont][/sup][/b][/url][size=4][fullfont face="Times New Roman"] [/size][/fullfont]

[size=4][fullfont face="Times New Roman"]When a demurrer is sustained, “[i]t is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. [Citations.]” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2018) ¶ 7:129.1, p. 7(I)-59, italics omitted.) ‘The burden is on the plaintiff, however, to demonstrate the manner in which the complaint might be amended. [Citation.]’” (Hendy v. Losse (1991) 54 Cal.3d 723, 742.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]We deem this contention forfeited because Hoffman does not explain how her new allegations would state a cause of action. The only authority that she cites deals with the possibility of amending after a demurrer has been sustained. She provides no authority or analysis dealing with the elements of a wrongful foreclosure action. “‘“‘When an appellant [asserts a point] but fails to support it with reasoned argument and citations to authority, we treat the point as waived [or forfeited].’” [Citation.] . . . ’ [Citation.]” (Sviridov v. City of San Diego (2017) 14 Cal.App.5th 514, 521, fn. omitted.)[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]V[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]DISPOSITION[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]The judgment is affirmed. Defendants are awarded costs on appeal against Hoffman.[/size][/fullfont]

[size=4][fullfont face="Times New Roman"]NOT TO BE PUBLISHED IN OFFICIAL REPORTS[/size][/fullfont]

[u][size=4][fullfont face="Times New Roman"]RAMIREZ [/size][/fullfont][/u]

[size=4][fullfont face="Times New Roman"] [/size][/fullfont][fullfont face="Times New Roman"]P. J.[/fullfont]

[size=4][fullfont face="Times New Roman"]We concur:[/size][/fullfont]

[u][size=4][fullfont face="Times New Roman"]CODRINGTON [/size][/fullfont][/u]

[size=4][fullfont face="Times New Roman"] J.[/size][/fullfont]

[u][size=4][fullfont face="Times New Roman"]RAPHAEL [/size][/fullfont][/u]

[size=4][fullfont face="Times New Roman"] J.[/size][/fullfont]