Jensen v. Greenpoint Mortgage Funding
Filed 1/11/13 Jensen v.
Greenpoint Mortgage Funding CA1/5
NOT
TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits
courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
FIVE
LEE JENSEN,
Plaintiff
and Appellant,
v.
GREENPOINT
MORTGAGE
FUNDING INC. et al.,
Defendants and Respondents.
A133448
(
Super.
Plaintiff Lee Jensen sued his
mortgage lender and other entities,
Jensen’s purchase of real property and a 2010 nonjudicial foreclosure sale of
the property. The trial court sustained
defendants’ demurrers to Jensen’s first amended complaint (FAC), without leave
to amend, and dismissed the action. On
appeal, Jensen principally contends the trial
court should have permitted him to amend to assert causes of action based
on his allegation that the signature on the underlying 2005 deed of trust
encumbering the property is not his signature and is forged. We affirm.
FACTUAL
AND PROCEDURAL BACKGROUND
Facts
In January 2005, Jensen purchased
property at 15 Harbor View Drive in Richmond, California. In the FAC, Jensen alleges he “financed the
[property] on or about January 3, 2005 through [Greenpoint] by virtue of a
Trust Deed and Notes securing the Loan (See Exhibit ‘A’).†Exhibit A to the FAC is a deed of trust dated
January 3, 2005, which encumbers the property; the deed of trust states that it
secures a loan to Jensen for $575,200.
The deed of trust states that Marin
Conveyancing Corp. is the trustee; MERS is the beneficiary and is “nominee†for
lender Greenpoint. The deed of trust specifies
that Jensen conveys the property to the trustee “in trust, with power of
sale.†The signature line for the
borrower on the deed of trust has Jensen’s name printed under it, and a
signature above it. A notary’s
certification on the following page states that Jensen acknowledged signing the
document.
In February 2009, NDeX, as agent for
MERS, recorded a notice of default and election to sell under the deed of
trust. The notice of default stated that
Jensen was $19,132.48 in arrears in payments on the loan. The notice of default was accompanied by a
declaration under Civil Code section 2923.5 by ASC.
Effective March 20, 2009, MERS
assigned all beneficial interest in the deed of trust to Bank of New York. The assignment was recorded on March 31, 2009.
Wells Fargo, as attorney-in-fact for Bank of New York, recorded a substitution
of trustee designating NDeX as trustee under the deed of trust. In May 2009, NDeX recorded a notice of
trustee’s sale stating Jensen was in default under the 2005 deed of trust, and
stating an intent to sell the property at a public auction on June 16, 2009.
In December 2009, before the
property was sold, Jensen filed a petition seeking protection from creditors
under Chapter 13 of the Bankruptcy Code.
On March 2, 2010, Bank of New York filed a motion for relief from the
automatic stay.
name="_ftnref4" title="">[4] The bankruptcy court granted
the motion on April 11, 2010.
The property was sold on April 26,
2010, to Bank of New York. NDeX recorded
a trustee’s deed upon sale, conveying the property to the “foreclosing
beneficiary,†Bank of New York.
Proceedings
Jensen filed his original complaint
in September 2010, and the FAC in December 2010. The FAC names as defendants Greenpoint, MERS,
NDeX, ASC, Bank of New York, and Wells Fargo (collectively, defendants).
part II. below, the FAC challenges various aspects of the foreclosure process
and other alleged conduct by defendants.
Defendants demurred to the FAC.
a motion to expunge a notice of pendency of action filed by Jensen. After hearing argument on August 10, 2011,
the trial court adopted its tentative rulings sustaining both demurrers without
leave to amend and granting the motion to expunge. On August 24, 2011, the court entered a
judgment addressing the demurrer filed by the Bank of New York defendants. The judgment specified that the demurrer was
sustained without leave to amend, the action was dismissed with prejudice, and
judgment was in favor of defendants. The
court also entered a written order granting Bank of New York’s motion to
expunge. On September 6, 2011, the court
entered a separate order (September 6 order) sustaining the Greenpoint
defendants’ demurrer without leave to amend.
DISCUSSION
I. Standard
of Review
In
reviewing whether the trial court erred in
determine whether it alleges facts sufficient to state a cause of action under
any legal theory. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412,
415.) “ ‘ “We treat the
demurrer as admitting all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law.
[Citation.] We also consider
matters which may be judicially noticed.â€
[Citation.] Further, we give the
complaint a reasonable interpretation, reading it as a whole and its parts in
their context. [Citation.] When a demurrer is sustained, we determine
whether the complaint states facts sufficient to constitute a cause of
action. [Citation.] And when it is sustained without leave to
amend, we decide whether there is a reasonable possibility that the defect can
be cured by amendment: if it can be, the
trial court has abused its discretion and we reverse; if not, there has been no
abuse of discretion and we affirm.
[Citations.] The burden of
proving such reasonable possibility is squarely on the plaintiff.’ [Citations.]â€
(Zelig v. County of Los Angeles
(2002) 27 Cal.4th 1112, 1126 (Zelig).)
“ ‘Where
written documents are the foundation of an action and are attached to the
complaint and incorporated therein by reference, they become a part of the
complaint and may be considered on demurrer.’
[Citation.]†(
Lloyd’s, London (2008) 161 Cal.App.4th 184, 191.) To the extent a plaintiff’s factual
allegations conflict with the content of exhibits to the complaint, “we rely on
and accept as true the contents of the exhibits and treat as surplusage the
pleader’s allegations as to the legal effect of the exhibits.†(Barnett
v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.)
“[W]e
will affirm a ‘trial court’s decision to sustain a demurrer [if it] was correct
on any theory. [Citation.]’ [Citation.]
Accordingly, ‘we do not review the validity of the trial court’s
reasoning but only the propriety of the ruling itself. [Citations.]’
[Citation.]†(
(2009) 178 Cal.App.4th 1020, 1034-1035.)
“Because a demurrer
law, ‘ “an appellant challenging the sustaining of a general demurrer may
change his or her theory on appeal [citation], and an appellate court can
affirm or reverse the ruling on new grounds.
[Citation.]†’ †(
185 Cal.App.4th 1018, 1022.)
II. The
Ruling Sustaining the Demurrer
The FAC asserts 11 causes of
action: (1) violation of Civil Code
section 2923.6 (relating to loan modifications); (2) unfair business
practices in violation of Business and Professions Code section 17200;
(3) injunctive relief; (4) misrepresentation/nondisclosure in
violation of Civil Code section 1572; (5) fraud; (6) declaratory
relief; (7) intentional misrepresentation; (8) wrongful foreclosure
based on violations of Civil Code sections 2923.5 and 2924; (9) slander of
title; (10) intentional infliction of emotional distress; and
(11) quiet title.
The first 10 causes of action are
not based on the alleged forgery of Jensen’s signature on the underlying deed
of trust; they rely on other alleged conduct.
For example, these causes of action allege defendants made
misrepresentations and failed to disclose information in connection with the
2005 loan, the loan contract was unconscionable, and defendants are obligated
to modify the loan. These causes of
action also focus on defendants’ standing and the foreclosure process, alleging
that MERS was not a proper beneficiary, the assignments after the 2005 loan
were invalid, the notice of default was defective, defendants lacked standing
to foreclose because they did not hold the original note, and the foreclosure
sale did not comply with statutory requirements.
The final cause of action in the
FAC, the quiet title claim, appears to be based primarily on Jensen’s assertion
that defendants do not hold the original note; it states that, because
defendants “ha[ve] yet to produce the original note,†they have no interest in
the property. After stating this conclusion,
the quiet title cause of action includes the following one-sentence
allegation: “[Jensen] further alleges
that his signature on the Deed and other related documents is not his and [is]
the result of a blatant forgery orchestrated by the Defendants.†The FAC does not elaborate on this point—it
provides no specific factual allegations supporting the assertion that
defendants committed forgery and does not explain why this allegation entitles
Jensen to relief.
name="_ftnref9" title="">[9]
The trial court ruled that some of
the causes of action in the FAC were barred by applicable statutes of
limitations, and that others were not viable for other reasons. As to the quiet title cause of action, the
court ruled that (1) the FAC did not comply with Code of Civil Procedure
section 761.020, which requires that complaints seeking to quiet title be
verified, and (2) Jensen could not quiet title because he had not
discharged his debt.
In his appellate briefs, Jensen does
not contend the trial court’s ruling sustaining the demurrer as to the causes
of action in the FAC was erroneous,
underlying those claims (such as the allegations of defects in the assignments
or the foreclosure process) are viable.
that the trial court should have granted him leave to amend to state new causes
of action focusing specifically on the alleged forgery. Jensen thus has forfeited any challenge to
the trial court’s ruling sustaining the demurrer as to the causes of action in
the FAC. (See State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th
600, 610 [trial court’s judgment is presumed to be correct, and appellant has
burden to overcome presumption by demonstrating reversible error].) We next consider Jensen’s challenge to the
trial court’s denial of his request to amend his complaint.
III. The
Denial of Leave to Amend
Jensen argues the trial court should
have permitted him to file a second amended complaint to assert causes of
action based on the alleged forgery of his signature on the 2005 deed of trust
and promissory note. If permitted to amend, he would seek to
recover monetary damages, set aside the foreclosure sale, and obtain a
reconveyance of the property or quiet title to the property.
The plaintiff, not the court, has
the burden to show in what manner he or she can amend the complaint, and how
that amendment will change the legal effect of the pleading. (Medina
v. Safe-Guard Products, Internat., Inc. (2008) 164 Cal.App.4th 105,
112-113, fn. 8; Weil & Brown et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter
Group 2012) ¶ 7:130, pp. 7(I)-51 to 7(I)-52 (rev. #1 2011).) “While such a showing can be made for the
first time to the reviewing court [citation], it must be made.†(Smith
v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700,
711.) We conclude Jensen has not met
this burden.
Jensen has not articulated the
precise theory of recovery he seeks to pursue based on the alleged forgery of
his signature on the note and deed of trust, but he suggests the alleged
forgery establishes the 2010 foreclosure sale was invalid, and thus supports
causes of action for wrongful foreclosure and/or to quiet title.
trust deed “is void if the grantor’s signature is forged or if the grantor is
unaware of the nature of what he or she is signing. [Citation.]â€
(Schiavon v. Arnaudo Brothers
(2000) 84 Cal.App.4th 374, 378; Wutzke v.
Bill Reid Painting Service, Inc. (1984) 151 Cal.App.3d 36, 43-44 (
follows that any claim of title flowing from such a deed is void.†(Wutzke,
at p. 44.) One ground for setting
aside a trustee’s sale is that the underlying deed of trust is void. (Lona
v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 105 (Lona); Saterstrom v. Glick
Bros. Sash etc. Co. (1931) 118 Cal.App. 379, 383 [trustee’s sale set aside
where deed of trust was void because it failed to adequately describe
property]; see Stockton v. Newman
(1957) 148 Cal.App.2d 558, 563-564 [trustor sought rescission of promissory
note on grounds of fraud].) When a
trustor seeks to set aside a trustee’s sale on the ground that the sale is void
(rather than merely voidable), the trustor need not tender the amounts due
under the note. (Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 878;
Under the above principles, a
showing that a grantor’s signature on a deed of trust was forged could, in some
circumstances, establish that the trust deed, and a subsequent trustee’s sale,
were void. But in the circumstances of
this case, and in light of the other allegations in the FAC, Jensen has not
shown a reasonable possibility that he can amend the complaint to state a viable
cause of action. First, we note that
Jensen’s bare allegation that the signatures on the 2005 note and deed of trust
are not his does not establish the legal elements of forgery.
common law, is the false making or materially altering, with intent to defraud,
of any writing which, if genuine, might apparently be of legal efficacy, or the
foundation of a legal liability.†’
[Citation.]†(Lewis v.
Superior Court (1990) 217 Cal.App.3d 379, 387.) In Wutzke, the court noted that “the
act of forgery is not defined in the Commercial Code or otherwise for purposes
of civil actions,†and stated that, in the context of determining whether a
deed was void on grounds of forgery, “the term must be construed in accord with
the reasonable understanding of a layman.â€
(Wutzke,
supra, 151 Cal.App.3d at pp. 40-41.) The Wutzke
court stated that “in order to establish forgery three essential facts must be
proven: ‘(1) Intent to defraud,
(2) making a false instrument by signing another’s name without authority
or the name of a fictitious person . . . , and (3) the
instrument on its face be capable of defrauding someone who might act upon it
as genuine or the person in whose name it is forged.’ †(Id. at p. 41.) Jensen
has not shown that he can allege specific facts supporting the elements of
forgery, such as whether the unidentified person who signed the document lacked
authority to do so and had the intent to defraud.
Second,
Jensen has not shown a reasonable possibility that he can state a cause of
action based on his allegation about the signatures on the 2005 note and deed
of trust, because other allegations in the FAC establish that Jensen
property by giving Greenpoint a promissory note and deed of trust. When a plaintiff’s complaint contains
allegations that defeat his claim, the plaintiff cannot avoid those defects by
filing an amended complaint. (
(2005) 134 Cal.App.4th 1035, 1044; Mercury
Casualty Co. v. Superior Court (1986) 179 Cal.App.3d 1027, 1035 &
fn. 6.) In the FAC, Jensen alleges
that he executed a deed of trust and specifies its date and some of its terms,
all of which are consistent with the 2005 deed of trust attached to the
FAC. These allegations preclude Jensen
from amending to allege that he never took a loan or signed a deed of trust.
In paragraph 11 of the FAC, Jensen
alleges that he “financed the [property] on
or about January 3, 2005 through [Greenpoint] by virtue of a Trust Deed and Notes securing the Loan (
A to the FAC, is the January 3, 2005, deed of trust encumbering the property
and securing a loan to Jensen for $575,200.
Jensen expressly alleges that he signed a deed of trust—Jensen states that, “on
or about January 3, 2005,†he “executed a
‘Deed of Trust.’ †(Italics
added.) In that paragraph, Jensen also
describes the terms of the deed of trust he signed, and quotes from it. He states that the deed of trust listed
Greenpoint as the lender, and stated in the definitions section that: “ ‘(E) . . . MERS is a
separate corporation that is acting solely as a nominee for Lender and Lender’s
successors and assigns. MERS is the beneficiary
under this Security Instrument.’ â€
The January 3, 2005, deed of trust attached to the FAC includes these
terms. Similarly, in paragraph 2 of the
FAC, Jensen refers to the attached deed of trust and confirms that Greenpoint
loaned him money in connection with the purchase of the property. He notes that the deed of trust was “dated
January 3, 2005 and recorded January 11, 2005,†and that Greenpoint was “the
original Lender and Trustee for the [property] (See Exhibit ‘A’).†Again, Jensen’s description is consistent
with the deed of trust attached to the FAC.
Later in the FAC, Jensen confirms
that his loan was secured by a deed of trust.
For example, in paragraphs 55 and 56, Jensen states that he incurred a
debt when he obtained a loan on the property, and that “[t]he loan is
memorialized via a Deed of Trust and Promissory note.†He also alleges that each document includes
“an attorney fees provision for the lender should they prevail in the
enforcement of their contractual rights.â€
The 2005 deed of trust attached to the FAC includes such a provision.
In several of the causes of action
in the FAC, Jensen bases his entitlement to relief in part on his execution of
the deed of trust and his status as a party to it. In the third cause of action for injunctive
relief, Jensen states that he “seeks a determination as to the legal status of
the parties as to the Adjustable Rate Note and the Deed of Trust.†He again quotes from the note and the deed of
trust, contradicting his suggestion in his appellate brief that he is unaware
of the contents of the documents. In the
fourth and fifth causes of action alleging misrepresentations by defendants in
connection with the 2005 loan, Jensen alleges that defendants’ misrepresentations
harmed him by causing him to accept the loan.
Jensen alleges that he acquired the property by obtaining financing from
Greenpoint, and affirms repeatedly that he took the loan. In the eighth cause of action for wrongful
foreclosure, Jensen again refers to the deed of trust, stating that defendants
drafted it and that Jensen had no opportunity to negotiate its terms.
In sum, in the FAC, Jensen alleges
that he took a loan from Greenpoint and signed a deed of trust; he describes
the document, including specifying the date and some of the parties and terms,
which correspond to those in the 2005 deed of trust attached to the FAC; he
quotes some of its language, which also corresponds to the attached deed of
trust; and he asserts several theories of recovery that rely on his entry into
the deed of trust and/or his status as a party to it. In light of these allegations, we conclude
Jensen has not shown a reasonable possibility that he can amend to state a
cause of action based on his assertion that the signature on the 2005 deed of
trust is not his.
Because we conclude that Jensen has
not shown a reasonable possibility that he can amend to state a cause of
action, we need not address the parties’ arguments as to whether a cause of
action challenging the foreclosure sale would be barred on other grounds, such
as the statute of limitations, Jensen’s failure to tender the amounts due under
the loan, and the alleged subsequent sale of the property to third parties.
DISPOSITION
The
judgment is affirmed. Defendants shall
recover their costs on appeal.
SIMONS,
J.
We concur.
JONES, P.J.
NEEDHAM, J.
are: Greenpoint Mortgage Funding, Inc.
(Greenpoint); Mortgage Electronic Registration Systems, Inc. (MERS); America’s
Servicing Company (ASC); Wells Fargo Bank, N.A., erroneously sued as Wells
Fargo Mortgage, Inc. (Wells Fargo); Bank of New York Mellon, formerly known as
The Bank of New York, as successor in interest to JP Morgan Chase Bank N.A., as
Trustee for Structured Asset Mortgage Investments II Inc. Bear Stearns Alt-A
Trust 2005-7 (Bank of New York); and, NDeX West, LLC (NDeX).
based on the allegations in the FAC, the exhibits attached to the FAC, and
documents judicially noticed by the trial court. Jensen did not include most of these
documents in the record on appeal. On
May 14, 2012, we granted defendants’ motion to augment the appellate record to
include the FAC, the original complaint, and defendants’ demurrers and related
documents.
