Martinez
Filed 2/27/13 Martinez v. OneWest Bank CA4/2
NOT TO BE
PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
FOURTH
APPELLATE DISTRICT
DIVISION TWO
ALEX
Z. MARTINEZ et al.,
Plaintiffs and Appellants,
v.
ONEWEST
BANK, FSB, et al.,
Defendants and Respondents.
E055492
(Super.Ct.No. CIVRS910701)
OPINION
APPEAL
from the Superior Court of
Bernardino County.
Joseph R. Briscoe, Judge.
Affirmed.
Alex
Z. Martinez and Arminda B. Martinez, in pro. per., for Plaintiffs and
Appellants.
Allen
Matkins Leck Gamble Mallory & Natsis, Andrew E. Miller, and Joshua R.
Mandell for Defendants and Respondents.
This
is an action originating in defendants’ attempts to foreclose on a trust deed
secured by plaintiffs’ residence. On January 4, 2012, the trial
court granted defendants’ motion for summary judgment. Judgment was entered on the same day. Plaintiffs then filed their notice of
appeal.
I
STANDARD OF REVIEW
Our
standard of review is well established:
“‘Appellate review of a summary judgment is limited to the facts shown
in the supporting and opposing affidavits and those admitted and uncontested in
the pleadings. In deference to the
strong public policy favoring a trial on the merits, appellate courts are bound
by the same principles governing the trial court’s determination: i.e., the moving
party’s (respondent’s) papers are strictly construed and the opposing
party’s (appellant’s) papers are liberally construed. All doubts as to the propriety of granting
the motion (whether there is any issue of material fact [Code of Civil
Procedure] § 437c) are to be resolved in favor of the party opposing
the motion (i.e., a denial of summary judgment).’ [Citations.]
[¶] Summary
judgments are reviewed de novo.
[Citations.] ‘Because trial
judges no longer exercise discretion in considering a summary judgment
motion, application of the abuse of discretion standard is inappropriate. Under current law, summary judgment motions
raise only questions of law regarding the construction and effect of the
moving and opposing papers; and questions of law are subject to the independent
standard of review.’ [Citations.]
required of the trial court. ‘“‘First,
we identify the issues framed by the pleadings since it is these allegations to
which the motion must respond . . . .
[¶] Secondly, we determine
whether the moving party’s showing has established facts which negate the
opponent’s claim and justify a judgment in movant’s favor. . . . [¶]
When a summary judgment motion prima facie justifies a judgment, the
third and final step is to determine whether the opposition demonstrates the
existence of a triable, material factual issue.’†[Citations.]’
[Citation.]†(
Cal.App.4th 497, 502-503.)
II
THE COMPLAINT
Plaintiffs’
complaint was filed on September 22,
2009. After numerous demurrers and a removal to
federal court, the case was returned to state court. Demurrers were eventually sustained to three
causes of action in the fourth amended complaint without leave to amend. The fifth amended complaint, which asserted
two different causes of action, was filed on May
26, 2011.
The
fifth amended complaint contained causes of action for injunctive and
declaratory relief. The cause of action
for injunctive relief sought to prevent a foreclosure sale of plaintiffs’
residence. The cause of action for
declaratory relief alleged that “plaintiffs contend defendants did not have
grounds nor hold the legal right to initiate the non-judicial foreclosure.†Plaintiffs sought a declaration “as to who,
or what entity, is the true owner in due course of the mortgage loan,
promissory note, and trust deed executed by the Plaintiffs on the subject
property in 2005 . . . .â€
Both causes of action incorporated general allegations that primarily
concerned the chain of transactions that allegedly followed execution of the
documents. The general allegations also
stated that plaintiffs’ efforts at loan modification were rejected.
III
THE MOTION FOR SUMMARY JUDGMENT
On
October 11, 2011, defendants
OneWest Bank, FSB (OneWest) and U.S. Bank National Association (U.S. Bank)
there was no controversy justifying declaratory relief, citing
192 Cal.App.4th 1149; (2) possession of the original promissory note was not a
prerequisite to a nonjudicial procedure; and (3) in any event, they were in
possession of the original promissory note, through their agents.
A. Issues
Framed by the Pleadings
The
material facts are established by the defendants’ separate statement of
undisputed facts and plaintiffs’ response.
(Code Civ. Proc., § 437c (b)(1)(3).) These facts are as follows: In 2005, plaintiffs executed a
$520,000 from IndyMac Bank (IndyMac).
Plaintiffs had been in default under the note since July 2008.
As
security for the note, plaintiffs executed a deed of trust on their home. The deed of trust identified IndyMac as
lender, Fidelity National Title Company as trustee, and Mortgage Electronic
Registration System (MERS) as beneficiary and nominee for IndyMac and its
assigns.
Defendants
further state that, on May 7, 2009, MERS, as
nominee for IndyMac, assigned all beneficial interest under the deed of trust
to OneWest. Plaintiffs agree there was
an attempt to transfer beneficial interest but dispute whether OneWest had
capacity to transfer.
On
June 2, 2009, OneWest appointed
Quality Loan Service Corporation (Quality) as substitute trustee under the deed
of trust. Plaintiffs dispute whether
OneWest had the capacity to appoint Quality.
Quality, acting in its capacity as substitute trustee under the deed of
trust, issued a notice of default as “Agent for Beneficiary†dated June 2, 2009. Plaintiff does not dispute that a notice of
default was issued.
Quality,
acting in its capacity as substitute trustee under the deed of trust, executed
a notice of trustee’s sale, dated September 4,
2009. On January
4, 2010, OneWest assigned its beneficial interest in the deed of
trust to U.S. Bank. Plaintiffs have
failed to cure their ongoing default.
On
October 31, 2005, Deutsche Bank
National Trust Company (Deutsche Bank), in its capacity as document custodian,
received custody of the original note.
Plaintiff disagrees but provides no supporting evidence. From October
31, 2005, to January 10,
2011,
and from February 1 to May 9, 2011, Deutsche Bank
maintained custody of the note until it was sent to defense counsel to allow
the plaintiffs to inspect the note.
Plaintiffs respond: “Disagree as to the substantiation. Decl. is not of personal knowledge of the
declarant.†Finally, defendants state
that the note is endorsed in blank.
Plaintiffs disagree, stating that the cited declaration does not support
this fact.
Plaintiffs
raise disputed legal issues by challenging (1) the validity, under California law, of the
assignment of the trust deed from MERS to OneWest; (2) the validity of the
assignment from OneWest; and (3) whether U.S. Bank is the owner of the subject
note and trust deed. Instead, plaintiffs
contend that “[U.S. Bank] is trustee of a trust that [s]old mortgages placed
into the trust to other investors.â€
Finally, plaintiffs dispute that U.S. Bank holds the beneficial interest
in the trust deed, contending that the “[a]ssignment to it is not valid under California law and IRC
provisions [c]ontrolling the trust.â€
B. The
Trial Court’s Decision
In
granting the summary judgment motion, the trial court stated, “The court finds
the defendants have provided evidence to establish the owner and establish who
is the owner and possessor of the note, and that all the statutory procedures
for foreclosure have been followed.
[¶] Additionally, the plaintiffs
are admittedly in default on their loan, except for the payments made pursuant
to court order, which have continued through the pendency of this action.â€
C. Are
There Issues of Material Fact?
Plaintiffs’
first contention on appeal is that the trial court erred in concluding that
there were no triable issues of material fact to be determined. The contention is based on the assertion that
U.S. Bank did not have authorization to begin foreclosure proceedings. However, the record is quite clear that
OneWest appointed Quality Loan Service Corporation as substitute trustee under
the deed of trust and that Quality took the steps necessary to foreclose. While the foreclosure process was continuing,
OneWest assigned its beneficial interest in the deed of trust to U.S. Bank.
Plaintiffs
do not dispute the documents but rather allege that (1) U.S. Bank was trustee
of a mortgage-backed securities trust; (2) as such, it did not have “true
ownership†of the loan; and, therefore, (3) it did not have the power to direct
the mortgage servicer, IndyMac, to foreclose on the property. Plaintiffs further argue that the loan, but
not the trust deed, was placed in the trust in violation of California law and
that the trust closed in 2005 and was not allowed to accept an assignment of
the trust deed in 2010 under Internal Revenue Service regulations. But plaintiffs did not provide any supporting
evidence that raises material issues of fact.
Their arguments are legal arguments as to the validity of the
assignments and the ownership of the note and trust deed.
We
agree with the trial court that there are no triable issues of material
fact. The documents cited by defendants
in support of the motion are in the record and supported by declarations by their
custodians. They are regular on their
face, and plaintiffs attack only their legal effect. “The motion for summary judgment shall be
granted if all the papers submitted show that there is no triable issue as to
any material fact and that the moving party is entitled to a judgment as a
matter of law.†(Code Civ. Proc.
§ 437c (c).) Based on the showings
in the statements of undisputed facts and the supporting evidence cited, we
agree with defendants that the only issues are legal issues. The question thus presented is whether these
defendants are entitled to judgment as a matter of law.
D. Are
Defendants Entitled to Summary Judgment as a Matter of Law?
As
noted above, defendants rely on Gomes v.
Countrywide Home Loans, Inc., supra, 192 Cal.App.4th 1149. Plaintiffs focus their attack on
various grounds.
on residential property. Plaintiff
appealed from the granting of a demurrer without leave to amend, contending
that defendant MERS did not have authority to initiate the foreclosure because
the owner of the note did not authorize it to proceed with the
foreclosure. (Gomes v. Countrywide Home Loans, Inc., supra, 192 Cal.App.4th at p.
1152.) In a second cause of action for declaratory
relief, plaintiff alleged that Civil Code section 2924 (a)
declaratory relief action to assert the claim made in the first cause of
action. (Gomes, at p. 1152.)
The
Gomes court rejected these claims,
holding that “California’s nonjudicial foreclosure law does not provide for the
filing of a lawsuit to determine whether MERS has been authorized by the holder
of the Note to initiate a foreclosure.â€
(Gomes v. Countrywide Home Loans,
Inc., supra, 192 Cal.App.4th at
p. 1156.) The court also found that
Gomes had agreed, in the deed of trust, that MERS was authorized to bring a
foreclosure proceeding. (
challenges to MERS’s authority to foreclose.
(Id. at pp. 1157-1158.)
In
Fontenot v. Wells Fargo Bank, N.A.
(2011) 198 Cal.App.4th 256, plaintiff also alleged that a MERS assignment was
invalid. The trial court found that the
recorded documents in that case showed that the claims were without factual
foundation, and the Court of Appeal affirmed.
(Id. at p. 260.) The court discussed the MERS system in detail
and rejected various claims of plaintiff relating to the operation of the
system. (Id. at pp. 267, 269-273.)
In
the present case, plaintiffs seek to avoid application of the principles of
issues than those in this matter, with different legal capacities of those
defendants, as to their various ownership rights and duties.†They reiterate that they are not attacking
the authorization of the mortgage
servicer to foreclose, but rather they are focusing on the alleged lack of
ownership of the note by U.S. Bank. They
conclude that, if U.S. Bank was not the owner of the note, it could not
authorize foreclosure proceedings.
However,
it is clear from the documents presented in support of the summary judgment
motion that OneWest was the owner of the note when the foreclosure proceedings
were initiated by Quality. The note was
not assigned by OneWest to U.S. Bank until six months after the foreclosure
proceedings began. Thus, factually,
defendants have demonstrated that the plaintiffs’ legal argument has no merit
and that plaintiffs’ have failed to supply any factual support for their
claims.
Further,
it does not matter who owned the note when the loan servicer, Quality, began
foreclosure proceedings. A similar issue
was raised in Arabia v. BAC Home Loans
Servicing, L.P. (2012) 208 Cal.App.4th 462.
The court first found that the loan servicer could bring a foreclosure
action under section 725a. (
foreclose was founded in a contract, i.e., the promissory note and deed of
trust. (Id. at p. 472.)
In
discussing assignability of the right to judicially foreclose, the court
rejected plaintiff’s contention that allowing the servicing company to
foreclose would disadvantage him. (
supra, 208 Cal.App.4th at p.
474.) The court responded, “[Plaintiff]
does not explain how he is disadvantaged.
There is no dispute that BAC is the servicer of [plaintiff’s] loan. [Plaintiff] does not claim that the
foreclosure is unwarranted. To the
contrary, he concedes he borrowed a substantial sum of money and has not made
payments since October, 2007. He does
not contend that a second entity is seeking or will seek to foreclose on the
same deed of trust at issue here. Simply
put, other than his bald assertion, we conclude that there is no evidence that
[plaintiff] has been or will be disadvantaged if BAC is permitted to initiate a
judicial foreclosure in its name.†(
Similarly,
there is no disadvantage to plaintiffs shown in this case. There is no dispute that plaintiffs owe the
money as stated in the promissory note.
There is no dispute that OneWest named Quality as the substituted
trustee. There is no dispute that
Quality began foreclosure proceedings in 2009.
The promissory note provides that, in the event
of default, the noteholder may declare a default.
substitute trustee on June 2, 2009.
Quality filed the notice of default on the same day. The chain of assignment was complete, and
Quality had the power under the trust deed to foreclose for nonpayment.
We
therefore conclude that plaintiffs have not shown any legal or factual reason
why the nonjudicial foreclosure proceedings should be enjoined instead of
proceeding to a foreclosure sale. Nor
has plaintiff shown any factual or legal reason why a declaratory relief action
is proper in this situation.
There
is a more fundamental reason for rejecting plaintiffs’ contentions. In Gomes,
the court held that the comprehensive nonjudicial foreclosure procedure does
not allow a debtor to file a declaratory relief action in order to delay
foreclosure by turning a nonjudicial procedure into a judicial one. (Gomes
v. Countrywide Home Loans, supra, 192 Cal.App.4th at p. 1154.) The court explained, “By asserting a right to
bring a court action to determine whether the owner of the Note has authorized
its nominee to initiate the foreclosure process, Gomes is attempting to
interject the courts into this comprehensive nonjudicial scheme. As Defendants correctly point out, Gomes has
identified no legal authority for such a lawsuit. Nothing in the statutory provisions
establishing the nonjudicial foreclosure process suggests that such a judicial
proceeding is permitted or contemplated.
[¶] In his declaratory relief
cause of action, Gomes sets forth the purported legal authority for his first
cause of action, alleging that Civil Code section 2924, subdivision (a), by
‘necessary implication,’ allows for an action to test whether the person
initiating the foreclosure has the authority to do so. We reject this argument. Section 2924, subdivision (a)(1) states that
a ‘trustee, mortgagee, or beneficiary, or any of their authorized agents’ may
initiate the foreclosure process.
However, nowhere does the statute provide for a judicial action to determine
whether the person initiating the foreclosure process is indeed authorized, and
we see no ground for implying such an action.
[Citation.] Significantly,
‘[n]onjudicial foreclosure is less expensive and more quickly concluded than
judicial foreclosure, since there is no oversight by a court, “[n]either
appraisal nor judicial determination of fair value is required,†and the debtor
has no postsale right of redemption.’
[Citation] The recognition of the
right to bring a lawsuit to determine a nominee’s authorization to proceed with
foreclosure on behalf of the noteholder would fundamentally undermine the
nonjudicial nature of the process and introduce the possibility of lawsuits
filed solely for the purpose of delaying valid foreclosures.†(Id.
at p. 1155.)
We have resolved
similar issues in Robinson v. Countrywide
Home Loans, Inc. (2011) 199
Cal.App.4th 42. We held, “The issues
plaintiffs raise concerning MERS and the securitized mortgage market were
recently discussed in Gomes v.
Countrywide Home Loans, Inc.[citation].
There, the court concluded that the plaintiff failed to identify a legal
basis for an action to determine whether MERS had authority to initiate a
foreclosure proceeding. [Citation.] We agree with the Gomes court that the statutory scheme (§§ 2924–2924k) does not
provide for a preemptive suit challenging standing. Consequently, plaintiffs’ claims for damages
for wrongful initiation of foreclosure and for declaratory relief based on
plaintiffs’ interpretation of section 2924, subdivision (a), do not state a
cause of action as a matter of law.
[Citation.]†(
The
trial court did not err in granting defendants’ motion for summary judgment.
IV
DISPOSITION
The
judgment is affirmed. Respondents are
awarded their costs on appeal.
NOT
TO BE PUBLISHED IN OFFICIAL REPORTS
RICHLI
Acting
P. J.
We concur:
MILLER
J.
CODRINGTON
J.
name="_ftn1" title=""> [1]
Plaintiff
sued “IndyMac Mortgage Services†as a “mortgage servicing company, doing
business in California, and . . . a subsidiary of ONE WEST
BANK.†In the summary judgment motion,
OneWest alleges that IndyMac Mortgage Services is merely a division of OneWest.
name="_ftn2" title=""> [2]
In their response, plaintiffs disputed this fact, stating that they had
been making court-ordered payments while the action was pending. Plaintiffs failed to state supporting
evidence for this contention. Although
the trial court agreed that some payments were made pursuant to court order,
plaintiffs admitted they had stopped making payments and were in default.
