Case Number: BC527736 Hearing Date: July 02, 2014 Dept: 34

Moving Party: Defendants OneWest Bank, FSB; Federal National Mortgage Association; and Mortgage Electronic Registration Systems, Inc. (“defendants”)

Resp. Party: Plaintiff Everett Cabrera (“plaintiff”)

Defendants’ demurrer to the complaint is SUSTAINED.

The Court GRANTS defendants’ Request for Judicial Notice of exhibits 1 and 2. (See Evid. Code, § 452(d), (h).)

The Court GRANTS plaintiff’s Request for Judicial Notice of exhibit 2. (See Evid. Code, § 452(c), (h).) The Court DENIES plaintiff’s Request for Judicial Notice of Exhs. 1 and 3; these documents are irrelevant to the demurrer and are not proper items for judicial notice. (See Big Valley Band of Pomo Indians v. Sup. Ct. (2005) 133 Cal.App.4th 1185, 1192; Kashian v. Harriman (2002) 98 Cal.App.4th 892, 901, fn.3.)

Defendants’ objection to plaintiff’s opposition is OVERRULED. Although the opposition was not served in conformance with CCP § 1005(c), defendants did receive a copy of the opposition in time to file a reply.

BACKGROUND:

Plaintiff commenced this action on 11/18/13 against defendants for: (1) cancellation of assignment; (2) quiet title; and (3) declaratory relief.

Plaintiff obtained a loan on the subject property in September 2007 in the principal amount of $447,000.00 from IndyMac Bank FSB. (Compl., ¶ 9, Exh. A.) Defendant MERS was named as nominee for IndyMac and was designated as the beneficiary in the deed of trust. (Id., ¶ 10, Exh. B.) Plaintiff received a notice of default in June 2009 alleging arrears of $21,127.86. (Id., ¶ 11, Exh. C.) In July 2009, MERS, as nominee for IndyMac, assigned the deed of trust to OneWest. (Id., ¶ 12.) Plaintiff alleges that the deed of trust was assigned without the note, rendering the assignment void. (Id., ¶¶ 12-14, Exh. D.) Plaintiff alleges that the signatory on the assignment was a known “robo-signer.” (Id., ¶ 14.) In August 2009, OneWest substituted the original trustee under the deed of trust out and substituted NDEx West LLC as trustee. (Id., ¶ 15.) Plaintiff alleges this assignment is also void because the assignment from MERS to OneWest was void. (Ibid.) In September 2009, NDEx West prepared a notice of trustee’s sale. (Id., ¶ 18.) In October 2009, OneWest assigned the deed of trust to defendant Federal National Mortgage Association (“Fannie Mae”). (Id., ¶ 19.) Plaintiff alleges this assignment was also void. (Id., ¶¶ 19-20.) In January 2011, NDEx West filed another notice of trustee’s sale. (Id., ¶ 21.) The property was sold on September 6, 2011 to Fannie Mae for $524,074.19. (Id., ¶ 22.)

Defendants’ demurrer to the complaint was originally set for hearing on April 21, 2014. The Court took that demurrer off-calendar because the parties had failed to file a Notice of Related Cases. The Court stated in its tentative decision at that time:

“The Court’s own research indicates that this is apparently the third case filed by plaintiff Everett Cabrera against the same defendants concerning the alleged wrongful foreclosure at 10633 S. Budlong Ave., Los Angeles, CA 90044.

· Case BC 469453, Cabrera v. OneWest Bank, a verified complaint alleging wrongful foreclosure 10633 S. Budlong Ave., Los Angeles, CA 90044, was filed on September 15, 2011 and assigned to Department 39. Plaintiff voluntarily dismissed this case on January 23, 2012.

· Case BC 504897, Cabrera v. Boucher et al, another verified complaint alleging wrongful foreclosure 10633 S. Budlong Ave., Los Angeles, CA 90044, was filed on April 4, 2013 and assigned to Department 54. Plaintiff voluntarily dismissed this case on November 8, 2013 while defendants’ demurrers were pending.

· Case BC527736, Cabrera v. FNMA, a third verified compliant alleging wrongful foreclosure at 10633 S. Budlong Ave., Los Angeles, CA 90044, was filed on November 18, 2013 and assigned to Department 34.”

It appears that none of the cases have been related.

ANALYSIS:

Defendants demur to the entire complaint and the three causes of action contained therein on the grounds that the complaint fails to state sufficient facts and is uncertain.

First Cause of Action for Cancellation of Assignment

Though labeled as a claim to cancel the assignments, in the first cause of action plaintiff is actually seeking to cancel several documents, including the assignments and the trustee’s deed upon sale. (See Comp., ¶¶ 33-34.) Plaintiff alleges these documents are void because the deed of trust was assigned without the note and the assignments were robo-signed. (See id., ¶¶ 24-34.) Defendant argues that plaintiff lacks standing to challenge the assignments. Plaintiff argues that he does have standing pursuant to Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079.

In Glaski, a trust (the Trust) was formed which consisted of a pool of residential mortgage notes. (Glaski, 218 Cal.App.4th at p. 1084.) The closing date for the Trust was in December 2005, and the plaintiff (Glaski) alleged that the attempt to assign his note and deed of trust to the Trust was made after the closing date and therefore was ineffective. (Ibid.) Glaski’s complaint contended that the defendants did not have the authority to foreclose. (Id. at p. 1088.) The court found that the plaintiff had standing to raise a defect in the assignment. (Id. at pp. 1094-1095.) It was relevant in Glaski that the plaintiff had alleged that the assignment was improper, that the Trust was formed under New York law, and that it was subject to requirements imposed on REMIC trusts. (Id. at p. 1096.) The court concluded that Glaski’s allegations were sufficient to support the claim that the transfers were void and, as a result, the entity commencing the sale was not the holder of the deed of trust. (Id. at p. 1097.) Glaski involved a post-sale challenge to the foreclosure. (See id. at p. 1087.)

Federal case law has noted that Glaski represents a “distinct minority view on the standing of third parties to enforce or assert claims based on alleged violations of a PSA” and that “other California Court of Appeal decisions have found to the contrary.” (Apostol v. CitiMortgage, Inc. (N.D. Cal. 2013) 2013 WL 6328256, *6 [citing Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App. 4th 497, 515].)

In Jenkins, which was decided just a few months before Glaski, the plaintiff brought a pre-sale action on the ground that her loan was pooled in a securitized investment trust without proper compliance with the trust’s PSA. (Jenkins, 216 Cal.App.4th at p. 505.) Specifically, the plaintiff alleged that “the terms of the pooling and serving agreement were violated because: (1) the promissory note was not transferred into the investment trust with a complete and unbroken chain of endorsements and transfers; and (2) the trustee of the investment trust did not have actual physical possession of the note and deed of trust prior to the closing date of the investment trust.” (Id. at p. 510.) The court noted that “California courts have refused to delay the nonjudicial foreclosure process by allowing trustor-debtors to pursue preemptive judicial actions to challenge the right, power, and authority of a foreclosing ‘beneficiary’ or beneficiary’s ‘agent’ to initiate and pursue foreclosure.” (Id. at p. 511.) The court rejected the plaintiff’s attempt to seek preemptive action because it would “result in the impermissible interjection of the courts in a nonjudicial scheme enacted by the California Legislature.” (Id. at p. 513.)

In the alternative, the court found that even if there were a proper legal basis for a preemptive suit, the plaintiff’s cause of action would still fail because the plaintiff did not have standing to challenge the transfer. (Jenkins, 216 Cal.App.4th at pp. 513-515.) The court noted that even if the improper securitization occurred, “the relevant parties to such a transaction were the holders (transferors) of the promissory note and the third party acquirers (transferees) of the note.” (Id. at pp. 514-515.) “As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [the plaintiff] lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transactions.” (Id. at p. 515.)

Furthermore, even if any subsequent transfers of the promissory note were invalid, [plaintiff] is not the victim of such invalid transfers because her obligations under the note remained unchanged. Instead, the true victim may be an entity or individual who believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of their interest in the note. It is also possible to imagine one or many invalid transfers of the promissory note may cause a string of civil lawsuits between transferors and transferees. [Plaintiff], however, may not assume the theoretical claims of hypothetical transferors and transferees for the purposes of showing a “controversy of concrete actuality.”

(Id. at p. 515.)

Even though Jenkins was a pre-sale action, whereas here plaintiff’s property has already been sold, (see Compl., ¶ 22), the Court finds Jenkins analysis to be applicable.

Further, Glaski’s reasoning has been explicitly rejected by at least two recent Court of Appeal decisions, Yvanova v. New Century Mortgage Corporation (2014) 226 Cal.App.4th 495 and Keshtgar v. U. S. Bank, N.A. (June 9, 2014) 2014 WL 2567927.

In Yvanova v. New Century Mortgage Corporation (2014) 226 Cal.App.4th 495, the court found that a plaintiff in a post-sale foreclosure action could not state an action for wrongful foreclosure based on an allegedly improper transfer of the deed because the plaintiff had no standing to challenge the bank’s claim to title. (Id. at p. 501.)

“Because a promissory note is a negotiable instrument, a borrower must anticipate it can and might be transferred to another creditor. As to plaintiff, an assignment merely substituted one creditor for another, without changing her obligations under the note.” [Citation.] An impropriety in the transfer of a promissory note would therefore affect only the parties to the transaction, not the borrower. The borrower thus lacks standing to enforce any agreements relating to such transactions. (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 515 (Jenkins ).)

Plaintiff argues the transfer of her promissory note and deed of trust from New Century Mortgage to Deutsch Bank and the subsequent securitization of the note were improper. But even if she is correct, “the relevant parties to such a transaction were the holders (transferors) of the promissory note and the third party acquirers (transferees) of the note.” “As an unrelated third party to the alleged securitization, and any other subsequent transfers of the beneficial interest under the promissory note, [plaintiff] lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transactions.” (Jenkins, supra, 216 Cal.App.4th at p. 515.) Plaintiff would not be the victim of such invalid transfers because her obligations under the note remained unchanged. “Instead, the true victim may be an individual or entity that believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of its interest in the note. It is also possible to imagine one or many invalid transfers of the promissory note may cause a string of civil lawsuits between transferors and transferees.” (Ibid.) But plaintiff “may not assume the theoretical claims of hypothetical transferors and transferees” to assert causes of action for declaratory relief or wrongful foreclosure. (Ibid.)

Plaintiff argues Glaski v. Bank of America (2013) 218 Cal.App.4th 1079 supports her argument that a borrower may challenge a nonjudicial foreclosure based on allegations that one or more transfers in the chain of title of a trust deed was void. She is correct. There, after concluding that noncompliance with the terms of a pooling and servicing agreement would render an assignment void, the court adopted without analysis the majority rule in Texas that an obligor may resist foreclosure on any ground that renders an assignment in the chain of title void. [Citation.]

But no California court has followed Glaski on this point, and many have pointedly rejected it. [Citations.] And as discussed above, Jenkins is directly to the contrary. We agree with the reasoning in Jenkins, and decline to follow Glaski.

(Yvanova, 226 Cal.App.4th at pp. 501-502.)

The second district recently issued a decision in Keshtgar v. U. S. Bank, N.A. (Cal. Ct. App., June 9, 2014, B246193) 2014 WL 2567927, which also rejected a plaintiff’s reliance on Glaski. The court noted: “For some hopefuls, [Glaski] holds out the tantalizing prospect of a preemptive action to challenge a foreclosure. It does not. The yearning for a holding does not create one.” (Id. at p. *1) In Keshtgar, the plaintiff (Keshtgar) was in default on his loan and brought the action to prevent the bank from initiating foreclosure proceedings. (Ibid.) The deed of trust had been assigned in 2011, and the plaintiff alleged (among other things) that the mortgage assets held in trust by the bank were governed by a PSA, and that the note and deed of trust were transferred too long after the closing date of the trust. (Ibid.) The plaintiff requested that the assignment of the deed of trust be declared void and cancelled, for a declaration that the bank could not exercise any rights under the deed of trust, and for quiet title. (Ibid.) “Stripped to its essence, Keshtgar’s complaint alleges nothing more than the assignment between MERS and U.S. Bank did not occur or is void.” (Id. at p. *2.)

The Keshtgar court looked to Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, which also involved a preemptive action to forestall foreclosure and allegations that the foreclosing entity had no authority to initiate foreclosure proceedings because it was not authorized to proceed. (Keshtgar, at p. *2.) In Gomes,

[t]he court noted that California’s nonjudicial foreclosure statutes (Civ.Code, §§ 2924–2924k) provide a comprehensive framework for the regulation of nonjudicial foreclosures. [Citation.] One purpose of this comprehensive scheme is to provide a beneficiary with a quick, inexpensive and efficient remedy against a defaulting borrower. [Citation.] Nowhere does the scheme provide for a judicial action to determine whether the person initiating the foreclosure process is authorized. [Citation.] There is no ground for implying such an action. [Citation.] Recognition of such a right would “fundamentally undermine the nonjudicial nature of the process and introduce the possibility of lawsuits filed solely for the purpose of delaying valid foreclosures.” [Citation.]

(Ibid.) The plaintiff in Keshtgar argued that Gomes was inapplicable because he had alleged a factual basis to support the claim that the bank lacked authority to initiate foreclosure. (Ibid.) “Gomes holds that the California statutory scheme allows no preemptive action to challenge the authority of the person initiating foreclosure. No allegation of fact, no matter how specific, is sufficient to overcome the absence of a cause of action.” (Ibid.)

The court found Keshtgar’s reliance on Glaski was misplaced. (Keshtgar, p. *3.)

Glaski can be distinguished from Gomes and the instant case in that it is a post-foreclosure action for damages, not an action to prevent foreclosure. In Gomes, as in the instant case, plaintiff sought to prevent or at least forestall foreclosure. Glaski does not implicate the statutory policy of providing a beneficiary with a quick, inexpensive and efficient method of foreclosure.

We believe Glaski reads Gomes too narrowly. Gomes holds that there is no judicial action to challenge the authority of the person initiating the foreclosure process. [Citation.] As Jenkins shows, that applies whether the challenge is to the lender’s nominee, or as here, a transferee.

We also disagree with Glaski’s determination that a borrower has standing to challenge an assignment. Glaski’s reasoning relies on two federal Court of Appeals cases interpreting the law of other jurisdictions and an unpublished federal district court case. [Citations.]

California cases hold, however, that even in post-foreclosure actions a borrower lacks standing to challenge an assignment absent a showing of prejudice. (Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 86, 161 Cal.Rptr.3d 500; Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507, 141 Cal.Rptr.3d 326; Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th at p. 271, 129 Cal.Rptr.3d 467.) Siliga states: “[T]he Siligas fail to allege any facts showing that they suffered prejudice as a result of any lack of authority of the parties participating in the foreclosure process. The Siligas do not dispute that they are in default under the note. The assignment of the deed of trust and the note did not change the Siligas’ obligations under the note, and there is no reason to believe that Accredited as the original lender would have refrained from foreclose in these circumstances. Absent any prejudice, the Siligas have no standing to complain about any alleged lack of authority or defective assignment.” (Siliga, supra, at p. 85, 161 Cal.Rptr.3d 500.) The same can be said of Keshtgar’s complaint. Even if there were a preforeclosure cause of action, Keshtgar would lack standing to challenge the assignment.

(Ibid.)

For the reasons discussed in Gomes, Jenkins, Yvanova, and Keshtgar, the Court plaintiff that plaintiff lacks standing to challenge the assignments.

Accordingly, defendants’ demurrer to the first cause of action is SUSTAINED.

Second Cause of Action for Quiet Title

Plaintiff’s quiet title claim is based on the allegations that the assignment was void. (See Compl., ¶¶ 36-38.) As stated above, plaintiff does not have standing to challenge the assignment.

Accordingly, defendants’ demurrer to the second cause of action is SUSTAINED.

Third Cause of Action for Declaratory Relief

As with the second cause of action, this cause of action for declaratory relief is based on the plaintiff’s allegations that the assignment was void and hence the foreclosure was improper.

Defendants’ challenge to this cause of action repeats the argument that plaintiff does not have standing to challenge the assignments. For reasons discussed above, this argument is well taken.

Accordingly, defendants’ demurrer to the third cause of action is SUSTAINED.

The Court understands plaintiff’s anger against the entities that foreclosed on his home, and his concerns about robo-signing and other similar abuses at various banks. Nonetheless, California court’s have repeatedly and (almost) uniformly rejected his arguments. This is the third case plaintiff has filed challenging the foreclosure of his house at 10633 S. Budlong Ave., Los Angeles, CA 90044. Plaintiff dismissed both of his previous complaints; one of these cases (Cabrera v. Boucher, BC 504897) was dismissed while a demurrer was pending.

The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND. The case is dismissed with prejudice.