Case Number: BC518544 Hearing Date: July 03, 2014 Dept: 46

Posted 7-1-2014 4:40 p.m.

Case Number: BC518544
JOSE S URIBE VS DEUTSCHE BANK NATIONAL TRUST COMPANY ET AL
Filing Date: 08/15/2013
Case Type: Contractual Fraud (General Jurisdiction)

July 3, 2014

Deutsche Bank National Trust Company, as TE of the Indymac Mortgage Loan Trust 2006-14, Mortgage Pass-Through Certificates, Series 2006-AR14 Under the Pooling and Servicing Agreement Dated October 1, 2006 and OneWest Bank, FSB (erroneously named as “IndyMac Mortgage Services, a Division of OneWest Bank”) DEMURRER TO FIRST AMENDED COMPLAINT

TENTATIVE RULING: Unopposed demurrer to 10/4/2013 First Amended Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. Moving parties to prepare Order Granting Demurrer and Dismissing moving defendants from the action. Case management conference is ordered off calendar. As the demurrer by Green Century was sustained without leave to amend and because the remaining defendant has filed a notice of non-monetary status, the action shall be dismissed in its entirety unless Plaintiff appears and shows good cause for that the action not be dismissed. OSC regarding dismissal of entire remaining action is set for 07/22/2104 at 8:30 a.m.

This is a wrongful foreclosure action regarding Plaintiff’s residential property located at 540 W. Alvarado Street in Pomona (hereinafter, the “subject property”).

Request for Judicial Notice (RJN): Deutsche’s and OneWest’s RJN: GRANTED as to Exhibit “A” (i.e., deed of trust recorded 7/28/06); GRANTED as to Exhibit “B” (i.e., “Notice ,of Default and Election to Sell Under Deed of Trust” recorded 4/8/13); GRANTED as to Exhibit ‘C” (i.e., “Substitution of Trustee” recorded 4/8/13); GRANTED as to Exhibit “D” (i.e., “Notice of Trustee’s Sale” recorded 7/9/13); GRANTED as to Exhibit “E” (i.e., “Trustee’s Deed Upon Sale” recorded 9/18/13) and GRANTED as to Exhibit “F” (i.e., List of Federal Savings Associations Active as of 1/31/14, published on the official website of the Department of the Treasury—Office of the Comptroller of the Currency). Fontenot v. Wells Fargo Bank, N.A. (2011) 198 C.A.4th 256, 265.

The judicially noticeable documents reflect the following: On 7/28/06, a deed of trust was recorded on the subject property, which identified Mortgageit, Inc. as the lender, Southland Title as the TE and MERS as beneficiary, as nominee for Morgageit, Inc. (RJN, Exhibit “A”). On 4/8/13, a “Notice of Default and Election to Sell Under Deed of Trust” was recorded by Meridian Foreclosure Service fka MTDS, Inc. dba Meridian Trust Deed Service (hereinafter, “Meridian”), as TE. (Id., Exhibit “B”). On 4/8/13, a “Substitution of Trustee” was recorded, in which Meridian was substituted in as trustee. (Id., Exhibit “C”). On 7/9/13, a “Notice of Trustee’s Sale” was recorded by Meridian. (Id., Exhibit “D”). On 9/18/13, a “Trustee’s Deed Upon Sale” was recorded. (Id., Exhibit “F”).

1st & 2nd COAs: Violation of CA Civil Code §§ 2924.18(A)(1) and 2923.6(C) Dual Tracking and Violation of CA Civil Code §§ 2923.6(E), 2923.6(D), 2923.6(E)(1), (2), and (F) (Respectively)

Plaintiff has failed to state facts that constitute a cause of action under any of the cited statutes.

CC § 2923.6(c) provides:

“(c) If a borrower submits a complete application for a first lien
loan modification offered by, or through, the borrower’s mortgage
servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or
authorized agent shall not record a notice of default or notice of sale,
or conduct a trustee’s sale, while the complete first lien loan
modification application is pending. A mortgage servicer, mortgagee,
trustee, beneficiary, or authorized agent shall not record a notice of
default or notice of sale or conduct a trustee’s sale until any of the
following occurs:
(1) The mortgage servicer makes a written determination that the
borrower is not eligible for a first lien loan modification, and any
appeal period pursuant to subdivision (d) has expired.
(2) The borrower does not accept an offered first lien loan modification
within 14 days of the offer.
(3) The borrower accepts a written first lien loan modification, but
defaults on, or otherwise breaches the borrower’s obligations under,
the first lien loan modification.” (emphasis added).

Section 2924.18(a)(1) similarly provides:

“If a borrower submits a complete application for a first lien loan
modification offered by, or through, the borrower’s mortgage servicer,
a mortgage servicer, trustee, mortgagee, beneficiary, or authorized
agent shall not record a notice of default, notice of sale, or conduct a
trustee’s sale while the complete first lien loan modification application
is pending, and until the borrower has been provided with a written
determination by the mortgage servicer regarding that borrower’s
eligibility for the requested loan modification.” (emphasis added).

Section 2923.6(h) advises that “an application shall be deemed ‘complete’ when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer.” Subsections (d)-(f) apply only after a borrower submits a “complete” application and the mortgage servicer makes a written determination that the borrower is not eligible for a modification, per subsection (c)(1). These sections concern identifying the reasons for the substantive denial (subsection (f)), allowing the borrower to appeal the denial (subsection (d)) and prohibiting foreclosure activity until after the 30-day appeal period expires or, if the borrower appeals, until 15 days after the denial of the appeal (subsection (e)).

Plaintiff has stated in the FAC that his request for a loan modification was rejected for his failure to submit a complete application for same before foreclosure proceedings were initiated, so none of the cited code sections provide him a basis for action. Additionally Plaintiff cannot assert a violation of HOBR based on the recording of the “Notice of Default,” because this was done before he even submitted a loan modification application.

Furthermore, the foregoing provisions are preempted under the Home Owners’ Loan Act, 12 U.S.C. §§1461 et seq. (hereinafter, “HOLA”) and its implementing regulations promulgated by the Office of Thrift Supervision (hereinafter, “OTS”), as they apply to Plaintiff’s loan. HOLA applies here because the mortgage-servicing-related conduct alleged in the FAC was performed by OneWest, a federal savings bank. (RJN, Exhibit “7”). “Federal savings associations, including federal savings banks, are subject to HOLA and regulated by the Office of Thrift Supervision (OTS). 12 U.S.C. § 1464; Silvas v. E*Trade Mortg. Corp. (9th Cir. 2008) 514 F.3d 1001, 1005. Plaintiff’s claims under CC §§ 2923.6 and 2924.18 are preempted by HOLA, because they purport to invoke state law to regulate a federal savings bank’s conduct in negotiating a loan modification. See Conference of Federal Savings & Loan Ass’ns. v. Stein (9th Cir. 1979) 604 F.2d 1256, 1258, summarily aff’d, 445 U.S. 921, citing T. Marvell, The Federal Home Loan Bank Board at 26 (1969).” Eureka Federal Sav. and Loan Ass’n v. Kidwell (N.D.Cal. 1987) 672 F.Supp. 436, 439; Fidelity Federal Savings & Loan Ass’n v. de la Cuesta (1982) 458 U.S. 141, 160-61; Meyers v. Beverly Hills Federal Savings & Loan Ass’n (9th Cir. 1974) 499 F.2d 1145, 1147, citing California v. Coast Federal Savings & Loan Ass’n (S.D.Cal.1951) 98 F.Supp. 311, 316.” Id. See also 12 C.F.R. § 560.2.

3rd COA: Cancellation of Instruments

Cancellation of an instrument is appropriate when there is “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable…” CC § 3412.

Plaintiff pleads no facts to suggest why the Substitution of Trustee (TE,) Notice of Default, Notice of TE’s Sale and the TE’s Deed Upon Sale are invalid. Again, both the Substitution of TE and Notice of Default were recorded prior to P’s application for a loan modification. Additionally, P never submitted a “complete” application, as noted above. Even if the aforesaid documents were recorded in violation of HOBR, it is preempted by HOLA. HOBR, at any rate, does not allow a borrower to unwind a sale by cancelling foreclosure documents after a trustee’s deed upon sale has been recorded; rather, CC § 2924.12(b) provides for “actual economic damages.” Subsection (e) specifically states that “[n]o violation of this article shall affect the validity of a sale in favor of a bona fide purchaser and any of its encumbrancers for value without notice.”

4th COA: Quiet Title

Plaintiff has failed to allege tender. Plaintiff cannot “quiet title without discharging his debt. The cloud upon his title persists until the debt is paid.” Aguilar v. Bocci (1974) 39 C.A.3d 475, 477.

Leave to Amend

Leave to amend is denied as there is no statement of facts submitted by the Plaintiff to show that any of the subject causes of action could be stated.

IT IS SO ORDERED:

_______________________________
Frederick C. Shaller, Judge