17-CIV-05657 MELE M. UPERESA VS. WORLD SAVINGS BANK, ET AL.

MELE M. UPERESA WORLD SAVINGS BANK
JONATHAN MATTHEWS

DEMURRER OF DEFENDANTS MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. (“MERS”), BANK OF NEW YORK MELLON (“BONYM”) AND BAYVIEW LOAN SERVICING LLC (“BAYVIEW”) (ALSO COLLECTIVELY “DEFENDANTS”) TO THE SECOND AMENDED COMPLAINT TENTATIVE RULING:

The Demurrer of Defendants Mortgage Electronic Registration Systems, Inc. (“MERS”), Bank of New York Mellon (“BONYM”) and Bayview Loan Servicing LLC (“Bayview”) (also collectively “Defendants”) to the Second Amended Complaint (“SAC”) of Plaintiff Mele M. Uperesa (“Plaintiff”) is ruled on as follows:

(1) Demurrer to the Second Cause of Action for Cancellation of Instruments is SUSTAINED WITHOUT LEAVE TO AMEND based on failure to allege facts sufficient to support this claim.

This claim is alleged against MERS and BONYM. Plaintiff seeks to cancel written instruments that purport to be Assignment of the Note and Deed of Trust executed by Defendants. (SAC ¶ 43.) Plaintiff alleges that such instruments are void because they were issued by World Savings Bank after Plaintiff’s note was sold or assigned without notice to Plaintiff by parties who were not owners of Plaintiff’s note. (SAC ¶ 44.) Plaintiff claims that Defendants fail to demonstrate that they hold or possess the Note and Deed of Trust. (SAC ¶ 45.) Further, Plaintiff alleges that Defendants executed documents through a renown robosigner, clouding the chain of title and rendering the Substitution of Trustee illegitimate. (SAC ¶ 46.)

First, to the extent that Plaintiff’s claim is based on the alleged securitization of her loan, Plaintiff fails to allege facts sufficient to support this claim. Plaintiff claims she does not dispute the right to securitize her mortgage, but claims that as a result of improper procedures the true owner is unclear and Plaintiff has been paying improper parties an excess amount. (SAC ¶ 32.) No facts are alleged to support these conclusory allegations.

Second, as the court previously ruled, Plaintiff’s allegations are contradicted by the Deed of Trust. The Deed of Trust signed by Plaintiff lists MERS as the beneficiary. (See Defendants’ Request for Judicial Notice, Exh. A, p.2.) The Deed of Trust includes that “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but if necessary to comply with law of customer, MERS…has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.” (See Defendants’ Request for Judicial Notice, Exh. A, p.3.) MERS assigned the Deed of Trust to BONYM as trustee for Defendant Cwalt Inc. Alternative Loan Trust. (See Defendants’ Request for Judicial Notice, Exh. B.) Thus, Plaintiff’s allegation that the Assignment by MERS to BONYM is void because of lack of authority, is contradicted by the express language in the deed of trust.

Third, Plaintiff also brings this claim on the ground that the Substitution of Trustee is void because it was executed purportedly on behalf of BONYM by Loryn Stone, who is a renown robosigner. (SAC ¶¶ 17, 46, 47.) Plaintiff fails to demonstrate any standing to challenge any alleged fraudulent transfer regarding the Substitution of Trustee though. (See Maynard v. Wells Fargo Bank N.A. (S.D. Cal. 2013) 2013 WL 4883202, *9 [plaintiffs’ allegations of robo-signing of an Assignment of the Deed of Trust failed because the plaintiffs lacked standing to challenge the alleged fraudulent transfers because they were not parties to the Assignment, nor were they the intended recipients of the Assignment].) Furthermore, even if robo-signed, it would be voidable, not void, at the injured party’s option, who were not the plaintiffs. (Id.) Similarly here, Plaintiff fails to demonstrate any standing to challenge the purported robo-signing of the Substitution of Trustee.

(2) Demurrer to the Third Cause of Action for Violation of Homeowner Bill of Rights (“HBOR”) is SUSTAINED WITH LEAVE TO AMEND for Plaintiff to allege facts sufficient to support this claim. This claim is alleged against Bayview, not MERS and BONYM.

Civil Code section 2924.11(a) provides that:

(a) If a borrower submits a complete application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer…shall not record a notice of sale or conduct a trustee’s sale while the complete foreclosure prevention alternative 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 foreclosure prevention alternative.

…

(Civ. Code, § 2924.11(a).)

Plaintiff’s allegations still fall short of alleging facts to support a violation of section 2924.11(a). Plaintiff now alleges that she submitted “multiple complete applications” to Bayview in 2017, including May 2, 2017. (SAC ¶ 21.) Plaintiff has not alleged facts to support though that a Notice of Trustee’s Sale was recorded or that the Trustee’s Sale was conducted while one of these complete applications was still pending or before she had been provided with a written determination.

Moreover, Plaintiff’s allegation that a loan modification request was still under review when Quality Loan recorded a Notice of Default on June 7, 2016 (see SAC ¶ 20) is insufficient to support this claim. Section 2924.11(a) precludes a Notice of Sale from being recorded, not a Notice of Default.

(3) Demurrer to the Fourth Cause of Action for Violation of Business and Professions Code Section 17200 is SUSTAINED WITHOUT LEAVE TO AMEND as to MERS and BONYM, and SUSTAINED WITH LEAVE TO AMEND as to Bayview. Plaintiff fails to allege facts to support an unfair, unlawful or fraudulent business act or practice by Defendants. This claim is based on the same allegations against Defendants in the other causes of action, and therefore fails for the reasons set forth above.

(4) Demurrer to the First Cause of Action for Declaratory Relief is SUSTAINED WITHOUT LEAVE TO AMEND based on failure to allege facts sufficient to support this claim.

Plaintiff alleges that an actual controversy exists over Defendants’ standing to foreclose based on the fabricated and invalid Assignments of Plaintiff’s Note and Deed of Trust, and asks that the Court declare that none of the Defendants have any legal title or interest in Plaintiff’s Note or mortgage. (SAC ¶¶ 33-35, 40.)

The purpose of the declaratory relief statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues. (General of America Ins. Co. v. Lilly (1968) 258 Cal.App.3d 465, 470.) The court may refuse to exercise to grant declaratory relief where such relief is not necessary or proper at the time under all of the circumstances. (Id. at 471.) This discretionary power of the court to deny declaratory relief may be invoked by general demurrer. (Id.) Defendants correctly point out that this claim is duplicative of both Plaintiff’s quiet title claim that has already been dismissed, as well as Plaintiff’s claim for cancellation of instruments.

(5) Defendants’ Request for Judicial Notice is GRANTED.

(6) Defendants MERS and BONYM are DISMISSED from this action.

(7) Plaintiff has 20 days from the date of the Order to file and serve a Third Amended Complaint against Bayview.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Plaintiff shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.