Case Name: Julio Mendoza, et al. v. The Bank of New York Mellon, et al.
Case No.: 17-CV-312432

Currently before the Court is the demurrer by defendants Ocwen Loan Servicing, LLC (“Ocwen”) and The Bank of New York Mellon fka The Bank of New York as Successor Trustee to JPMorgan Chase Bank, as Trustee for the Holders of the Greenpoint Mortgage Securities, Inc., Greepoint Mortgage-Backed Pass-Through Certificates, Series 2003-1 (“BNYM”) (collectively, “Defendants”) to the first amended complaint (“FAC”) of plaintiffs Julio Mendoza (“Mendoza”) and Charise Cass (“Cass”) (collectively, “Plaintiffs”).

Factual and Procedural Background

This action arises out of the nonjudicial foreclosure sale of real property located at 21435 Madrone Drive, Los Gatos, CA 95033 (“Property”). Plaintiffs originally acquired the Property when they were married. (FAC, ¶¶ 1 and 7.) They allege that the Property is, consequently, community property. (Ibid.) Plaintiffs further allege that Cass “was taken off title for financing purposes, but … has an unrecorded community property interest in the Property.” (Id. at ¶ 7.)

On July 10, 2003, Mendoza entered into a loan agreement with Greenpoint Mortgage Funding, Inc. in the amount of $434,300. (FAC, ¶¶ 2 and 14.) The loan was secured by a Deed of Trust (“DOT”) recorded against the Property. (Ibid.) The DOT lists “Julio Mendoza, A Married Man,” as the borrower, Marin Conveyancing Corp. as the trustee, and MERS as the beneficiary. (Id. at ¶ 15 and Ex. A.)

Several years later, Mendoza filed for bankruptcy. (FAC, ¶ 18.) His Chapter 13 bankruptcy plan was confirmed on May 25, 2011. (Ibid.) Under the terms of the plan, Mendoza “would pay the [l]oan directly.” (Ibid.) Plaintiffs allege that Mendoza made all of the plan payments and eventually received a discharge. (Ibid.)

In December 2012, MERS executed and recorded an Assignment of Deed of Trust (“ADOT”) purporting to assign the beneficial interest in the DOT to BNYM. (FAC, ¶ 17.)

On November 30, 2016, a Notice of Default (“NOD”) was recorded with a declaration of compliance executed by Ocwen’s representative. (FAC, ¶ 19.) The NOD provided that the amount of default was $337,564.31, but the NOD allegedly “contained a substantial misstatement of the amount due.” (Id. at ¶¶ 5 and 20.) The declaration of compliance stated that Plaintiffs had been contacted regarding foreclosure alternatives. (Id. at ¶ 19.) However, Ocwen did not have any contact with Plaintiffs about foreclosure alternatives during the relevant time period. (Ibid.)

A few weeks later, defendant Western Progressive, LLC (“Western”), the successor trustee under the DOT, issued a Debt Validation Notice (“DVN”) to Plaintiffs. (FAC, ¶¶ 10 and 21.) The DVN stated that “the amount to pay the entire debt in full was $423,109.72, plus interest, late charges, negative escrow, and costs in the amount of $337,564.31.” (Id. at ¶ 21.)

Subsequently, a Notice of Trustee’s Sale (“NOTS”) was recorded on March 7, 2017. (FAC, ¶ 22.) The NOTS provided that the trustee’s sale would take place on April 20, 2017, and the total amount due was $595,459.25. (Id. at ¶ 22 and Ex. D.)

Shortly thereafter, “Ocwen confirmed receipt of Plaintiffs’ request for a short sale, complete with an offer for the Property.” (FAC, ¶ 23.) Plaintiffs allege that “[t]his foreclosure alternative would have allowed [Mendoza] to avoid a foreclosure on his credit report, further damaging his credit and causing him to be unable to obtain credit in the future or paying higher interest rates on loans he received. It also would have allowed him to stay in the Property until the sale closed. He also could have negotiated a rent back with the new buyer.” (Ibid.)

Ocwen allegedly accepted Plaintiffs’ short sale application and informed Plaintiffs that nothing else was required and the review would take approximately 30 days to complete. (FAC, ¶ 24.) Two weeks later, Ocwen denied the request for short sale. (Id. at ¶ 25.) Plaintiffs allege that “Ocwen did not complete the review” and instead rejected their application “because it was received too closed to the scheduled … sale date.” (Ibid.) Ocwen then continued the trustee’s sale to May 22, 2017. (Ibid.)

On May 9, 2017, Plaintiffs spoke to an Ocwen representative who informed them that Ocwen would re-open the short sale file and the trustee’s sale would not occur on May 22, 2017. (FAC, ¶ 26.) “However, Ocwen wanted a higher offer and an updated purchase agreement.” (Ibid.) A few days later, Plaintiffs submitted a new short sale application and purchase agreement with a higher offer to Ocwen. (Id. at ¶ 27.)

“Despite Ocwen’s assurances that the Trustee’s Sale would not go forward[ ] on May 22, 2017, a trustee’s sale was conducted and the Property reverted back to BNYM by a credit bid in the amount of $500,000.” (FAC, ¶ 28.) A Trustee’s Deed Upon Sale was recorded on June 1, 2017. (Id. at ¶¶ 4 and 28, and Ex. E.) The approximate fair market value of the Property was $700,000. (Ibid.)

Plaintiffs allege that the trustee’s sale on May 22, 2017, constitutes a wrongful foreclosure. (FAC, ¶ 3.) They allege that the sale was illegal, fraudulent, or willfully oppressive because Western, a non-existent entity, lacked the power to convey real property. (Id. at ¶ 32.) They further allege that the “[d]efendants misled, induced, and confounded [their] default and obstructed their ability to reinstate or seek alternatives to foreclosure.” (Id. at ¶ 32.) For example, the defendants asserted that Mendoza defaulted on his payment obligations beginning on June 1, 2009, when Mendoza was not in default as of that date. (Id. at ¶ 33.) In addition, Defendants allegedly “confused, confounded, and impeded [their] performance of the Loan by sending multiple misstatements of the amount needed to reinstate the Loan” (Id. at ¶¶ 5 and 34.) Plaintiffs were harmed as they “missed out on a sale of the Property, were prohibited from meaningful alternatives to foreclosure, and ultimately suffered a wrongful sale of the Property.” (Id. at ¶ 37.)

Based on the foregoing, Plaintiffs filed the operative FAC against Defendants, alleging causes of action for: (1) wrongful foreclosure; (2) cancellation of instruments under Civil Code section 3412; (3) unfair business practices; (4) declaratory relief; and (5) set aside trustee’s sale.

On October 11, 2017, Defendants filed the instant demurrer to the FAC. Plaintiffs filed papers in opposition to the demurrer on January 3, 2018. Most recently, on January 8, 2018, Defendants filed a reply.

Discussion

I. Request for Judicial Notice

In connection with their moving papers, Defendants ask the Court to take judicial notice of numerous recorded documents concerning the Property, court records filed in the case of In re Julio A. Mendoza (United States Bankruptcy Court for the Northern District of California, Case No. 09-bk-53766), a Limited Liability Company Application for Registration filed with the California Secretary of State, and a Certification made by the Delaware Secretary of State on December 18, 2008. In connection with their reply papers, Defendants ask the Court to take judicial notice of the Stipulation for Entry of Judgment filed in the unlawful detainer action of Steven Clifton v. Julio Mendoza, et al. (Santa Clara County Superior Court, Case No. 17-CV-314322).

As an initial matter, the Stipulation for Entry of Judgment filed in the unlawful detainer action of Steven Clifton v. Julio Mendoza, et al. (Santa Clara County Superior Court, Case No. 17-CV-314322) is not a proper subject of judicial notice. The Court declines to consider Defendants’ arguments based on the unlawful detainer judgment because they were improperly raised for the first time in reply. (See Reichardt, supra, 52 Cal.App.4th at p. 764 [points raised for first time in a reply brief will ordinarily be disregarded because other party is deprived of the opportunity to counter the argument]; see also In re Tiffany Y., supra, 223 Cal.App.3d at pp. 302-303; REO, supra, 69 Cal.App.4th at p. 500.) Consequently, the Stipulation for Entry of Judgment filed in the unlawful detainer action is not relevant to material issues before the Court. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [any matter to be judicially noticed must be relevant to a material issue].)

Next, the recorded property documents are generally proper subjects of judicial notice. Evidence Code section 452, subdivision (h) allows a court to take judicial notice of facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy. Courts have taken judicial notice of recorded property instruments, including deeds of trust, under this provision. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 (Fontenot), disapproved of on other grounds in Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919.) A court may take judicial notice of certain facts in a recorded document, including “the fact of a document’s recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document’s legally operative language, assuming there is no genuine dispute regarding the document’s authenticity.” (Fontenot, supra, 198 Cal.App.4th at p. 265.) The Court will take judicial notice of these facts as Plaintiffs do not dispute the documents’ authenticity.

In addition, the court records filed in Mendoza’s bankruptcy case are generally proper subjects of judicial notice under Evidence Code section 452, subdivision (d). Evidence Code section 452, subdivision (d) states that the court may take judicial notice of “[r]ecords of any court of this state.” That provision permits the trial court to “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.” (People v. Woodell (1998) 17 Cal.4th 448, 455.) Consequently, Court will take judicial notice of the existence of the court records filed in Mendoza’s bankruptcy case.

Finally, the Certification made by the Delaware Secretary of State, which is attached to the Limited Liability Company Application for Registration filed with the California Secretary of State, is a proper subject for judicial notice under Evidence Code section 452, subdivision (c). (See Evid. Code, § 452, subd. (c) [courts may take judicial notice of official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States]; see also Friends of Shingle Springs Interchange, Inc. v. County of El Dorado (2011) 200 Cal.App.4th 1470, 1496, fn. 6 [courts may properly take judicial notice of certificates issued by the Secretary of State].)

Accordingly, the request for judicial notice is DENIED IN PART and GRANTED IN PART. The request is DENIED as to the Stipulation for Entry of Judgment filed in the unlawful detainer action. The request is GRANTED as to the remaining items.

II. Meet and Confer

Though not raised by the parties, the Court notes that Defendants failed to file a meet and confer declaration as required by Code of Civil Procedure section 430.41. Code of Civil Procedure section 430.41 requires a demurring party to meet and confer with the party who filed the challenged pleading to seek informal resolution of the demurring party’s objections. (Code Civ. Proc., § 430.41, subd. (a) [“If an amended complaint, cross-complaint, or answer is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a demurrer to the amended pleading.”].) The meet and confer must be conducted in person or by telephone, and must address each cause of action or defense to be included in the demurrer. (Ibid.) If these efforts fail, the demurring party must file and serve a declaration regarding the meet and confer process with the demurrer. (Code Civ. Proc., § 430.41, subd. (a)(3).) While a court may not overrule a demurrer for insufficient meet and confer efforts (see Code Civ. Proc., § 430.41, subd. (a)(4)), it may continue the hearing and order the parties to meet and confer as required (see Assem. Com. on Judiciary, Rep. on Sen. Bill No. 383 (2015-2016 Reg. Sess.), p. 2). Here, in furtherance of judicial economy, the Court will overlook Defendants’ failure to comply with Code of Civil Procedure section 430.41 in this instance only. Defendants are admonished that all future filings should comply with the Code of Civil Procedure.

III. Legal Standard

The function of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, “[a] demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice.” (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations and quotations omitted; see also Code Civ. Proc., § 430.30, subd. (a).) “It is not the ordinary function of a demurrer to test the truth of the [ ] allegations [in the challenged pleading] or the accuracy with which [the plaintiff] describes the defendant’s conduct. [ ] Thus, [ ] the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) However, while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact.” (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.) Similarly, allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. (See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474 [rejecting allegation contradicted by judicially noticed facts].)

IV. Merits of the Demurrer

Defendants demur to each and every cause of action of the FAC on the ground of failure to allege facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

A. Demurrer as to Cass

As Defendants persuasively argues, Cass lacks standing to prosecute the claims as currently pleaded.

“Only a real party in interest has standing to prosecute an action, except as otherwise provided by statute. (Code Civ. Proc., § 367.) A party who is not the real party in interest lacks standing to sue. [Citation.] ‘A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law.’ [Citation.] A complaint filed by someone other than the real party in interest is subject to general demurrer on the ground that it fails to state a cause of action. [Citation.]” (Redevelopment Agency of San Diego v. San Diego Gas & Electric Co. (2003) 111 Cal.App.4th 912, 920-921.)

Plaintiffs allege that Mendoza alone was a party to the loan agreement and DOT. (FAC, ¶ 2 and Ex. A.) In addition, Plaintiffs allege that Cass was removed from the Property’s title. (Id. ¶ 7.) The judicially noticeable documents demonstrate that Cass conveyed her entire interest in the Property to Mendoza pursuant to the Interspousal Transfer Deed executed on July 18, 2003. (RJN, Ex. A.) The Interspousal Transfer Deed expressly states that Cass granted her interest in the Property to Mendoza, “a Married Man as his sole and separate property.” (Ibid.) In addition, the judicially noticeable documents show that Mendoza subsequently disclaimed that the Property was held as community property in his bankruptcy case. (RJN, Exs. B and C.) The foregoing demonstrates that Cass has no interest in the loan or the Property.

In opposition, Plaintiffs contend that Cass has standing to bring this action because she has an ownership interest in the Property. Specifically, Plaintiffs assert that she has an unrecorded community property interest in the Property. Plaintiffs acknowledge that under the form of title presumption, the description in a deed as to how title is held presumptively reflects the actual ownership status of the property. (In re Marriage of Fossum (2011) 192 Cal.App.4th 336, 344 [“Under the ‘form of title’ presumption, the description in a deed as to how title is held presumptively reflects the actual ownership status of the property.”].) Plaintiffs further contend that the allegations in the FAC are sufficient to overcome the form of title presumption because they allege that Cass was removed from the title for financing purposes.

However, the form of title presumption can be overcome only by evidence of an agreement or understanding between the parties that the title reflected in the deed is not what the parties intended. (In re Marriage of Fossum, supra, 192 Cal.App.4th at pp. 344-45 [“This common law presumption is codified in Evidence Code section 662, which states, ‘ “ ‘The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.’ ” ’ … As the court in Brooks observed, ‘[t]he presumption can be overcome only by evidence of an agreement or understanding between the parties that the title reflected in the Deed is not what the parties intended.’ [Citation.] ”].) There are no facts alleged in the FAC demonstrating that Mendoza and Cass had an agreement or understanding between them that Cass would remain an owner of legal title to the Property even though she executed the Interspousal Transfer Deed. Plaintiffs merely allege that “Cass was taken off title for financing purposes, but she has an unrecorded community property interest in the Property.” (FAC, ¶ 7.) The allegation that Cass was removed from the title for financing purposes does not, in and of itself, demonstrate that Mendoza and Cass had an agreement or understanding between them that Cass would remain an owner of legal title to the Property even though she executed the Interspousal Transfer Deed. Therefore, the FAC, as pleaded, does not establish that Cass had any interest in the Property.

Accordingly, the demurrer to the FAC on the ground of failure to allege facts sufficient to constitute a cause of action is SUSTAINED with 10 days’ leave to amend as to Cass.

B. Demurrer as to Mendoza

1. First and Fifth Causes of Action

The first cause of action is for wrongful foreclosure and the fifth cause of action is to set aside the trustee’s sale. “The elements of a cause of action to set aside a foreclosure sale are (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale or real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale suffered prejudice or harm; and (3) the trustor or mortgagor tenders the amount of the secured indebtedness or was excused from tendering.” (West v. JP Morgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, internal citations omitted.) “ ‘The basic elements of a tort cause of action for wrongful foreclosure track the elements of an equitable cause of action to set aside a foreclosure sale. They are: “(1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.” ’ [Citations.]” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1184–85.)

Defendants assert that the first and fifth causes of action fail because Mendoza had not alleged compliance with the tender rule. However, it is well-established that “no tender will be required when the trustor is not required to rely on equity to attack the deed because the trustee’s deed is void on its face.” (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 113 (Lona).) “A sale is rendered void … when the defects are substantial, such as when there has been a failure to give notice of sale to the trustor or to specify the correct default in the notice of default. [Citation.] Similarly, a sale is rendered void when the foreclosure sale is conducted by an entity that lacks authority to do so.” (Ram v. OneWest Bank, FSB (2015) 234 Cal.App.4th 1, 11.) In addition, a tender may not be required where it would be inequitable to impose such a condition on the party challenging the sale. (Lona, supra, 202 Cal.App.4th at p. 113.)
Here, Plaintiffs allege that they are not required to comply with the tender rule because the sale is void and it would be inequitable to impose tender as a condition under the circumstances presented. (FAC, ¶¶ 32 and 38.) Specifically, Plaintiffs allege that the sale is void because the trustee, Western, lacked authority to conduct the sale is it was a non-existent entity that lacked power to convey real property. (Id. at ¶ 32.) Plaintiffs also allege that it would be unjust to require tender because BNYM and Western: asserted Mendoza was in default when he was not; misstated and inflated the amount of the default; and proceeded with the trustee’s sale despite the submission of an updated short sale application. (Id. at ¶¶ 33-38.)

Notably, Defendants cite no legal authority providing that Plaintiffs’ allegations regarding inequity are insufficient to fall within that exception to the tender requirement as a matter of law. Furthermore, Defendants only argument regarding Plaintiffs’ allegations that the trustee’s sale is void is that the allegations are absurd. (Mem. Ps. & As., pp. 14-15.) Defendants assert that “Plaintiffs’ allegation that [Western] ‘is a non-existent legal entity’ that ‘is not organized in the State of Delaware’ and therefore ‘has no power to convey real property’ is both absurd and easily disproved” because (1) Western registered with the California Secretary of State to do business in California in December 2008, and (2) Western submitted a Certificate from the Delaware Secretary of State providing that, as of December 2008, it was duly formed under the laws of the state of Delaware and it had a legal existence so far as the records of that office showed. However, the judicially noticeable documents fail to demonstrate that at the time of the trustee’s sale, which occurred on May 22, 2017, Western had a legal existence and the capacity to convey the Property. Consequently, Defendants arguments regarding the first and fifth causes of action lack merit.

Accordingly, the demurrer to the first and fifth causes of action on the ground of failure to allege facts sufficient to constitute a cause of action is OVERRULED as to Mendoza.

2. Second Cause of Action

The second cause of action is for cancellation of instruments under Civil Code section 3412. Defendants argue that the second cause of action fails because (1) Plaintiffs do not allege facts demonstrating that the instruments were void or voidable and (2) Plaintiffs have not alleged tender.

As previously stated, Plaintiffs allege that the trustee’s sale was void because Western did not exist and lacked the capacity to convey real property. (FAC, ¶¶ 10, 32, 38.) They further allege that they are not required to comply with the tender rule because the sale is void. (Id. at ¶¶ 32 and 38.) Defendants only argument regarding Plaintiffs’ allegations that the trustee’s sale is void is that the allegations are absurd. For the reasons set forth above, Defendants’ contention is not well-taken. As Plaintiffs allege that the trustee’s sale is void, tender is not required to cancel the written instruments. (See Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 819 [“The tender rule is not absolute; tender is not required to cancel a written instrument that is void and not merely voidable.”].) Therefore, Defendants’ arguments regarding the second cause of action are not well-taken.

Accordingly, the demurrer to the second cause of action on the ground of failure to allege facts sufficient to constitute a cause of action is OVERRULED as to Mendoza.

3. Third Cause of Action
The third cause of action is for unfair business practices under Business and Professions Code section 17200.
The UCL, i.e., Business and Professions Code section 17200 et seq., “prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law.” (Blakemore v. Super. Ct. (2005) 129 Cal.App.4th 36, 48.) “Because Section 17200 is written in the disjunctive, a business act or practice need only meet one of the three criteria— unlawful, unfair, or fraudulent—to be considered unfair competition under the UCL.” (Daro v. Super. Ct. (2007) 151 Cal.App.4th 1079, 1093, emphasis in original.)
While the scope of conduct covered by the UCL is broad, its remedies are limited. (Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 Cal. 4th 163, 180.) “Prevailing plaintiffs are generally limited to injunctive relief and restitution.” (Id. at p. 179.) A challenge to a pleading may be granted where a plaintiff fails to allege facts demonstrating an entitlement to relief under the UCL. (See, e.g., Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 466; Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1022.)
Defendants persuasively argue that Plaintiff cannot obtain injunctive relief or recover restitution. First, “ ‘injunctive relief lies only to prevent threatened injury and has no application to wrongs that have been completed. [Citation.] It should neither serve as punishment for past acts, nor be exercised in the absence of any evidence establishing the reasonable probability the acts will be repeated in the future.’ [Citation.]” (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1266, italics in original.) Here, the foreclosure has already occurred and Plaintiffs do not allege any facts showing that there is a reasonable probability that the acts will be repeated again in the future. Therefore, Plaintiffs have not alleged an entitlement to injunctive relief.

Second, to be entitled to restitution, “[t]he offending party must have obtained something to which it was not entitled and the victim must have given up something which he or she was entitled to keep.” (Day v. AT & T Corp. (1998) 63 Cal.App.4th 325, 340, italics in original.) Plaintiffs do not sufficiently allege that Defendants obtained anything from them that they were entitled to keep as Plaintiffs do not allege that they performed their obligations under the loan to avoid default. (See Khan v. CitiMortgage, Inc. (E.D. Cal. 2013) 975 F.Supp.2d 1127, 1144 [“The complaint lacks facts of Ms. Khan’s money or property allegedly lost in that she was obligated to pay her loan and faced foreclosure if she failed to meet her obligations. Foreclosure of the property fails to support a UCL claim in the absence of allegations of the Ms. Khan’s performance to avoid default.”].)

Accordingly, the demurrer to the third cause of action on the ground of failure to allege facts sufficient to constitute a cause of action is SUSTAINED with 10 days’ leave to amend as to Mendoza.

4. Fourth Cause of Action
The fourth cause of action is for declaratory relief.

“ ‘Code of Civil Procedure section 1060 authorizes “[a]ny person … who desires a declaration of his or her rights or duties with respect to another … in cases of actual controversy relating to the legal rights and duties of the respective parties, [to] bring an original action … for a declaration of his or her rights and duties….” ’ [Citation.] ‘The purpose of a judicial declaration of rights in advance of an actual tortious incident is to enable the parties to shape their conduct so as to avoid a breach.’ [Citation.] Declaratory relief is therefore a remedy that ‘ “operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.” ’ [Citation.]” (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1014 (Orcilla), italics in original.)

Here, Plaintiffs seek a remedy for a past wrong—the foreclosure sale—and do not allege facts showing that there is an actual, present controversy between the parties. (Orcilla, supra, 244 Cal.App.4th at p. 1014 [alleged wrongful nonjudicial foreclosure sale was not a proper basis for declaratory relief against creditor under deed of trust, trustee, or mortgage registry operator, since the sale was a past wrong, absent evidence that an actual, present controversy existed between the parties].)

Accordingly, the demurrer to the fourth cause of action on the ground of failure to allege facts sufficient to constitute a cause of action is SUSTAINED with 10 days’ leave to amend as to Mendoza.