DEMURRER

Calendar: 11
Case No: EC061928
Date: 2/28/14

MP: Defendant, RAC Development, Inc.
RP: Plaintiff, Esmeralda Fernandez

ALLEGATIONS IN COMPLAINT:
The Plaintiff’s property was improperly sold at a foreclosure sale to the Defendant. The sale was improper because the Plaintiff’s note and deed of trust were wrongfully securitized and because the the seller was not the true holder of the original promissory note or deed of trust.

CAUSES OF ACTION IN COMPLAINT:
1) Violation of Civil Code section 2923.6
2) Violation of Business and Professions Code section 17200
3) Breach of Covenant of good Faith and Fair Dealing
4) Injunctive Relief
5) Violation of Civil code section 1572
6) Forgery & Fraud
7) Declaratory Relief
8) Intentional Misrepresentation
9) Set Aside Trustee Sale

RELIEF REQUESTED:
Demurrer to each cause of action.

DISCUSSION:
This hearing concerns the demurrer of Defendant, RAC Development, Inc., to each cause of action in the Complaint. The foundation of the claims in the Plaintiff’s Complaint is that her property was wrongfully sold in a foreclosure sale.
To plead any cause of action for irregularity in the foreclosure sale procedure, there must be allegations showing that the plaintiff tendered the amount of the secured indebtedness to the defendant. Abdallah v. United Sav. Bank (1996) 43 Cal. App. 4th 1101, 1109 (affirming an order sustaining a demurrer without leave to amend in a case claiming that the foreclosure and sale of a home was improper). A valid tender must be nothing short of the full amount due the creditor. Gaffney v. Downey Sav. & Loan Ass’n (1988) 200 Cal. App. 3d 1154, 1165. The Court of Appeal found that the following summary of the tender rule describes this requirement:

The rules which govern tenders are strict and are strictly applied, and where
the rules are prescribed by statute or rules of court, the tender must be in such
form as to comply therewith. The tenderer must do and offer everything that
is necessary on his part to complete the transaction, and must fairly make
known his purpose without ambiguity, and the act of tender must be such that
it needs only acceptance by the one to whom it is made to complete the transaction. Id.

The underlying principle for the tender rule is that “equity will not interpose its remedial power in the accomplishment of what seemingly would be nothing but an idle and expensively futile act, nor will it purposely speculate in a field where there has been no proof as to what beneficial purpose may be subserved through its intervention.” Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal. App. 3d 112, 118.
Further, this applies to any cause of action implicitly integrated with the voidable sale. Id. at 121. In Karlsen, the Court found that causes of action for breach of an oral agreement to delay the sale, for an accounting, and for a constructive trust failed because the plaintiff had not made a valid tender. In Arnolds Management Corp. v. Eischen (1984) 158 Cal. App. 3d 575, the Court found that causes of action for fraud and negligent misrepresentation based on the claim that the defendant had misrepresented the sale date failed because the plaintiff had not made a valid tender. The Court in Karlsen reasoned that absent an effective and valid tender, the foreclosure sale would become valid and proper. Karlsen, 15 Cal.App.3d at 121.

A review of the Plaintiff’s Complaint reveals that the Plaintiff seeks relief from the sale of her property and that each cause of action is implicitly integrated with the foreclosure proceeding and sale. Accordingly, the Plaintiff must plead that she satisfied the tender rule.

A review of the Plaintiff’s Complaint reveals that the Plaintiff did not plead that the Plaintiff tendered the amount due. Under California law, absent an effective and valid tender, the foreclosure sale to the Defendant is valid and proper.

Therefore, the Court will sustain the Defendant’s demurrers to each cause of action in the Complaint.

In addition, the Defendant argues that the Plaintiff lacks standing because she does not own an interest in the property. When any person other than a real party in interest brings an action, it is subject to general demurrer. Pillsbury v. Karmgard (1994) 22 Cal. App. 4th 743, 753.
The Defendant requests that the Court take judicial notice of the trustee’s deed upon sale. A copy of the trustee’s deed upon sale is attached as untabbed exhibit A to the Defendant’s request for judicial notice.
The Court may take judicial notice of the document because it is a recorded document. Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal. App. 4th 256, 265. Further, the Court may take judicial notice on a demurrer of the parties, dates, and legal effect of the recorded documents. Id. See also McElroy v. Chase Manhattan Mortgage Corp. (2005) 134 Cal.App.4th 388, 394 (taking judicial notice of the recordation of a notice of default under a deed of trust, the date of the notice’s recording, and the amount stated as owing in the notice for the purpose of demonstrating the plaintiffs had notice of the amount claimed to be owing and the opportunity to cure a defective tender).
The trustee’s deed upon sale states that the sale was made pursuant to powers conferred upon the trustee by the deed of trust executed by Jaqueline Badio. The Plaintiff is not identified in the trustee’s deed upon sale. This indicates that Jacqueline Badio has standing to bring this claim, not the Plaintiff, Esmeralda Fernandez.
Accordingly, the facts of which the Court may take judicial notice indicate that the Plaintiff is not the real party in interest. This is a further basis to sustain a demurrer to the Complaint.

Under California law, the Plaintiff must show in what manner the Plaintiff can amend his Complaint and how that amendment will change the legal effect of the pleading. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiff did not file any opposition papers or offer any basis for finding that she can correct the defect in her pleadings by amendment. Accordingly, the Court will not grant leave to amend.

RULING:
Sustain demurrers to each cause of action without leave to amend.