Fontes v. U.S. Bank National Assn. CA6 ( 2014 )

Filed 6/19/14 Fontes v. U.S. Bank National Assn. CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
CYNTHIA FONTES, et al., H038870
(Monterey County
Plaintiffs and Appellants, Super. Ct. No. M113661)
v.
U.S. BANK NATIONAL ASSOCIATION,
et al.,
Defendants and Respondents.
Plaintiffs Cynthia Fontes and Mike Maunu brought this action against JP Morgan
Chase Bank, N.A. (Chase), U.S. Bank National Association (U.S. Bank), and California
Reconveyance Company (CRC) to challenge the non-judicial foreclosure of their
residence in Salinas. The superior court sustained defendants' demurrer to plaintiffs' first
amended complaint without leave to amend. Plaintiffs appeal, contending that their
pleading was sufficient to assert wrongful foreclosure and related causes of action. We
will affirm the judgment of dismissal.
Background
Because this appeal arises from the sustaining of a demurrer, our summary of the
factual history is drawn primarily from the operative pleading, plaintiffs' first amended
complaint. Toward this end "we accept as true the properly pleaded material factual
allegations of the complaint, together with facts that may properly be judicially noticed."
(Crowley v. Katleman (1994) 8 Cal. 4th 666, 672; Moore v. Regents of University of
California (1990) 51 Cal. 3d 120, 125.)
On October 19, 2004, Fontes financed her Salinas residence through a loan from
Washington Mutual F.A., secured by a recorded deed of trust conveying title to CRC as
trustee. Washington Mutual was identified as both lender and beneficiary in the
document. The deed of trust included a provision that it could, along with the
accompanying promissory note, be "sold one or more times without prior notice to the
Borrower. A sale might result in a change in the entity (known as the 'Loan Servicer') that
collects Periodic Payments due under the Note and this Security Instrument and performs
other mortgage loan servicing obligations under the Note, this Security Instrument, and
Applicable Law."
Shortly thereafter the loan was securitized and assigned to the MLMI 2005-A2
Trust, effective February 1, 2005, pursuant to a Pooling and Servicing Agreement, which
was not submitted with the complaint or with the appellate record. As alleged in the
complaint, Washington Mutual thereafter "acted solely as a servicer of the loan, and was
neither Lender nor Beneficiary after [Washington Mutual's] sale of the mortgage."
On September 25, 2008, Washington Mutual was deemed a "Failed Bank" and its
assets and liabilities were transferred by the Federal Deposit Insurance Corporation
(FDIC), as receiver, to Chase, pursuant to a Purchase and Assumption Agreement.
Among the assets purchased by Chase were "all mortgage servicing rights and
obligations of the Failed Bank [i.e., Washington Mutual]."
On January 7, 2010, CRC recorded a notice of default stating that Fontes was
behind in her payments as of September 1, 2009, totaling $13,875.83. The document
identified CRC as trustee, Washington Mutual as beneficiary as of November 16, 2004,
and Chase as the entity to contact in order to stop the foreclosure.
On April 8, 2010, CRC recorded a Notice of Trustee's Sale, announcing a sale of
the property three weeks later. On this document, however, "KMUTUAL BANK, FA"
2
was incorrectly named as the beneficiary. On May 11, 2010, Fontes wrote Washington
Mutual and Chase a 20-page letter she deemed a Qualified Written Request under the
Real Estate Settlement and Procedures Act (12 U.S.C. §§ 2601, et seq.). In the letter
Fontes suggested "deceptive and fraudulent servicing practices" by Washington Mutual,
and she demanded evidence of the validity of the debt, including the "chain of transfer" to
"wherever the security is now." Without such evidence, Fontes asserted, she had "no
choice but to dispute the validity" of the debt and its ownership. Chase replied two
weeks later, promising an investigation of the issues and a complete response.
On September 28, 2010, Fontes executed a quitclaim deed granting Maunu a 25%
undivided interest in the property as a tenant in common.1 On December 9, 2010, Chase
executed an Assignment of Deed of Trust granting "all beneficial interest" under Fontes's
deed of trust to U.S. Bank. At the same time CRC executed a Trustee’s Deed Upon Sale
granting the Property to U.S. Bank. Both documents identified U.S. Bank "as Trustee,
successor in interest to Wachovia Bank, N.A., as Trustee, for MLMI 2005-A2." The
Trustee's Deed Upon Sale also stated that the "Grantee" was the "foreclosing
beneficiary."
Plaintiffs filed this action in pro per on August 16, 2011, against U.S. Bank,
Chase, and CRC. On March 1, 2012, after defendants' demurrer was sustained with leave
to amend, plaintiffs filed their first amended complaint. In this pleading, plaintiffs
alleged wrongful foreclosure and sought to set aside the trustee's sale, cancel the recorded
documents associated with the foreclosure (notice of default, notice of trustee's sale,
assignment of deed of trust, and trustee's deed upon sale), and quiet title to the property.
1 As defendants point out, a due-on-sale clause in the deed of trust was triggered by the
transfer of the partial interest from Fontes to Maunu. Under this provision, if the
borrower did not obtain the lender's consent before the transfer, the lender was entitled to
require payment in full "of all sums secured" by the deed of trust, to the extent permitted
by law.
3
Plaintiffs further alleged slander of title and unfair business practices under Business and
Professions Code section 17200, and they demanded restitution and an accounting.
In essence, plaintiffs claimed that defendants had sold plaintiffs' home "without a
lawful claim to the Property." Neither Chase (which was "nothing more than a servicer")
nor U.S. bank was a proper assignee, plaintiffs alleged, and therefore neither had any
authority to foreclose. The Purchase and Assumption Agreement was "a complete
impossibility" because plaintiffs' note had previously been securitized. In addition to the
improper assignment, the notice of default was itself defective, thereby voiding the entire
sale. And foreclosure was improper in any event "due to the failed delivery, endorsement
and conveyance to the MLMI Trust by the Closing Date and lack of a perfected secured
interest."
Plaintiffs further alleged irregularities in the foreclosure procedure that made both
the Assignment of Deed of Trust and the Trustee's Deed Upon Sale void. The former
was void, according to plaintiffs, because it was signed by Karime Arias who was falsely
represented to be an officer of Chase; furthermore, the notary's journal entry incorrectly
stated that the assignment took place on December 9 rather than December 10, 2010.
The Trustee's Deed Upon Sale was alleged to be void because the notary's journal entry
misspelled the first name of Dalila Ochoa, the assistant secretary who signed the
document on behalf of CRC.2 Plaintiffs also called attention to the erroneous
identification of KMutual Bank as beneficiary.
A key question that arose at the first demurrer hearing was whether either of the
plaintiffs had actually made the required payments on the loan. Plaintiffs had alleged in
their original complaint that Fontes's note was "not in default and Defendant[s] knew that
it wasn't." But Maunu, representing both himself and Fontes, was not able to state
2 The journal entry lists the signer of the document as "Dalilah Ochoa."
4
affirmatively that the complaint contained an allegation that he or Fontes had made the
payments; he nonetheless insisted that the loan was not in default.3 In their first amended
complaint, plaintiffs again claimed that the note "was not in default and Defendants knew
that it wasn't," again without stating that they had in fact made the required payments.
Defendants' demurrer to the first amended complaint asserted primarily the
lawfulness of the foreclosure process. Plaintiffs, however, argued that "only the true
lender and the true creditor can start the foreclosure process." Chase was not the true
lender or creditor, but only the servicer with "no right to collect payments." It was
therefore "not a true party in interest." Plaintiffs maintained that the Fontes note and
deed of trust could not have been acquired by Chase and then assigned to U.S. Bank
because the note had already been sold in 2005 as one of 1,614 securitized loans in the
MLMI 2005 A-2 Trust. Because the "Deed of Trust follows the Note not the other way
around," Chase had no interest on which the notice of default could be based and thus no
interest to transfer.
In response to defendants' repeated observation that plaintiffs had not tendered the
amount due, plaintiffs asserted that they had "no debt obligation on the property" and
therefore "there is of course nothing to tender." At the second demurrer hearing Maunu
represented that the loan, following securitization, was "currently current" with the
Securities & Exchange Commission.
3 At that hearing, defense counsel acknowledged that if all the payments were in fact
made as required, then "clearly there is an issue here" as to the validity of the foreclosure.
He sought clarification of this fact, and the court asked Maunu, "Are the[re] specific
paragraphs that you have notations of where you alleged in the complaint that you made
all payments timely and to the correct party? [¶] PLAINTIFF MAUNU: I didn’t say that
we made them. If my aunt made them or somebody else made them – but they’re not in
default. In other words, we’ll be able to provide expert witnesses and—" The court
interrupted and asked the question again, but Maunu did not direct the court to any
specific allegation in the complaint.
5
The superior court, however, found the lack of tender dispositive and sustained the
demurrer as to each cause of action without leave to amend. Plaintiffs thereafter opposed
a motion by defendants for judgment of dismissal. They insisted that the "alleged Note is
not in default," none of the defendants was a "real party in interest" with the right to
collect payments, and tender was not required. Nevertheless, on June 22, 2012, the court
granted the motion and entered judgment for defendants. This appeal followed.
Discussion
1. Standard and Scope of Review
A demurrer is properly sustained when the complaint "does not state facts
sufficient to constitute a cause of action." (Code Civ. Proc., § 430.10, subd. (e).) "On
appeal from a dismissal following the sustaining of a demurrer, this court reviews the
complaint de novo to determine whether it alleges facts stating a cause of action under
any legal theory. . . . [¶] Because the function of a demurrer is not to test the truth or
accuracy of the facts alleged in the complaint, we assume the truth of all properly pleaded
factual allegations. [Citation.] Whether the plaintiff will be able to prove these
allegations is not relevant; our focus is on the legal sufficiency of the complaint." (Los
Altos Golf and Country Club v. County of Santa Clara (2008) 165 Cal. App. 4th 198, 203;
see also Leyte-Vidal v. Semel (2013) 220 Cal. App. 4th 1001.)
We also examine the exhibits attached to the complaint. "If the facts appearing in
the attached exhibit contradict those expressly pleaded, [the facts] in the exhibit are given
precedence." (Mead v. Sanwa Bank California (1998) 61 Cal. App. 4th 561, 567-568;
Freeny v. City of San Buenaventura (2013) 216 Cal. App. 4th 1333, 1337.) "We do not,
however, assume the truth of 'mere contentions or assertions contradicted by judicially
noticeable facts.' " (Debrunner v. Deutsche Bank Nat. Trust Co. (2012) 204 Cal. App. 4th
433, 438-39, quoting Evans v. City of Berkeley (2006) 38 Cal. 4th 1, 20; see also Blatty v.
New York Times Co. (1986) 42 Cal. 3d 1033, 1040 [“when the allegations of the
complaint contradict or are inconsistent with such facts, we accept the latter and reject the
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former"].) Plaintiffs attached numerous documents to their pleading, including the deed
of trust and the Purchase and Assumption Agreement.
Both parties asked the superior court to take judicial notice of the "Notice of
Default and Election to Sell under Deed of Trust," the "Notice of Trustee's Sale," the
"Assignment of Deed of Trust," and the "Trustee's Deed Upon Sale." In addition,
defendants requested judicial notice of the quitclaim deed executed by Fontes in Maunu's
favor on September 28, 2010. The trial court properly took judicial notice of the
existence and legal effect of these documents. (Poseidon Development, Inc. v. Woodland
Lane Estates, LLC (2007) 152 Cal. App. 4th 1106, 1118; Fontenot v. Wells Fargo Bank,
N.A. (2011) 198 Cal. App. 4th 256, 265.) "The official act of recordation and the common
use of a notary public in the execution of such documents assure their reliability, and the
maintenance of the documents in the recorder's office makes their existence and text
capable of ready confirmation, thereby placing such documents beyond reasonable
dispute." (Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th at pp. 264-265.)
Accordingly, it is not improper to take judicial notice of "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."
(Id. at p. 265.) Plaintiffs do not contest this principle, and they acknowledge that "the
facts of which the trial court here took judicial notice arose from the legal effect of the
documents, rather than any statements of fact within them."
It is indeed the legal effect of these documents that plaintiffs are challenging.4
The gravamen of their position on appeal is twofold: (1) "There was no default in the
4 Plaintiffs emphasize that they are no longer relying on "irregularities" or clerical errors
as the basis of their complaint; hence, the allegations on this ground in the third cause of
action (cancellation of instruments) and seventh cause of action (unfair business
7
obligation" and (2) Chase was only a servicer, "not the beneficiary or creditor" of the note
and deed of trust, and it therefore had no legal authority to declare a default. Plaintiffs
also repeat the assertion in their complaint that once the note was sold to the MLMI 2005
A-2 trust, Washington Mutual was no longer the beneficiary and could not transfer its
interest to Chase as anything but a servicer. In other words, plaintiffs claimed, it is only
the creditor, the entity that is "entitled to payment on the Note," that can be a beneficiary
with the power of sale; without that "pecuniary interest in the Note," Chase had no
authority to sell the property.
In making these arguments, however, plaintiffs err in a fundamental respect by
misperceiving the difference between facts and legal assertions. They insist that they
alleged "facts, not conclusions, that the trustee's deed upon sale was void on its face, that
the power of sale clause was invoked without authority, and that tender did not apply."
They maintain that the court was required to accept plaintiffs' allegations "that Chase
could not enforce the debt as a beneficiary, that the strict provisions of the deed of trust
were not followed and that only the 'lender' can invoke non-judicial foreclosure and
subsequently instruct the trustee to foreclose." These are all legal assertions that depend
on specific facts. It is not enough to allege that they met all the elements of each cause of
action if the underlying facts are not stated. The superior court properly undertook to
determine, based on the facts that were pleaded, whether plaintiffs' complaint stated
viable causes of action under applicable statutory and judicial authority.
2. The Effect of Securitization
In their complaint plaintiffs hedged their position by asserting two divergent
approaches to the consequences of the securitization. If the note and deed of trust were
conveyed to the MLMI 2005 A-2 trust, then plaintiffs were "a party to and in privity
practices) are considered abandoned. It is therefore unnecessary to address defendants'
argument that those errors did not result in prejudice to plaintiffs.
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with" that trust. Because "an obligation paid is an obligation extinguished," plaintiffs
alleged, "[Fontes's] mortgage obligation has been paid and there is no default." If, on the
other hand, the note and deed of trust "were never properly and legally delivered to that
Trust," as plaintiffs separately alleged, then plaintiffs "assume[d]" that they were "in
privity with the true creditor, whomsoever [sic] that may be."
Thus, while simultaneously denying the legal effectiveness of the securitization
process, plaintiffs alleged that the securitization terminated their obligation to make
payments on Fontes's loan. On appeal plaintiffs continue to claim that the MLMI 2005-
A2 trust "failed to perfect its security interest in the note and underlying deed of trust,"
because the securitizing parties failed to comply with New York trust law and the
conditions of the trust documents. Plaintiffs, however, lack standing to assert defects in
the securitization procedure. (See, e.g., Jenkins v. JPMorgan Chase Bank, N.A. (2013)
216 Cal. App. 4th 497, 515 (Jenkins) [plaintiff lacked standing to assert invalidity of
foreclosure based on noncompliance with investment trust's pooling and servicing
agreement]; see also Almutarreb v. Bank of New York Trust Co., N.A. (N.D. Cal., Sept.
24, 2012, C-12-3061 EMC) 2012 WL 4371410 [joining numerous other federal district
courts in holding that "because Plaintiffs were not parties to the PSA [Pooling and
Servicing Agreement], they lack standing to challenge the validity of the securitization
process, including whether the loan transfer occurred outside the temporal bounds
prescribed by the PSA"]; see also In re Sandri (2013) 501 B.R. 369, 374-375 [explicitly
rejecting contrary holding of Glaski v. Bank of America, National Association (2013) 218
Cal. App. 4th 1079, 1098 on the standing issue]; Haddad v. Bank of America, N.A. (S.D.
Ca. 2014) 2014 WL 67646 at p. 4 [citing numerous decisions rejecting Glaski].)
Even if plaintiffs have such standing, any infirmity in the securitization process
would not have relieved Fontes of her obligation to make the payments required under
the deed of trust. As the Fourth District, Division Three, explained in Jenkins, supra, 216
Cal.App.4th at pp. 514-515, "even if the asserted improper securitization . . . occurred,
9
the relevant parties to such a transaction were the holders (transferors) of the promissory
note and the third party acquirers (transferees) of the note. 'Because a promissory note is
a negotiable instrument, a borrower must anticipate [that] 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.' " (Id. at pp. 514-515, quoting
Herrera v. Federal National Mortgage Assn. (2012) 205 Cal. App. 4th 1495, 1507 [no
prejudice from allegedly void assignment].)
Moreover, as the Second District, Division Three, observed in Siliga v. Mortgage
Electronic Registration Systems, Inc. (2013) 219 Cal. App. 4th 75, 85, plaintiffs "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. [Plaintiffs] do not dispute that they
are in default under the note. The assignment of the deed of trust and the note did not
change [plaintiffs'] obligations under the note, and there is no reason to believe that . . .
the original lender would have refrained from foreclosure in these circumstances. Absent
any prejudice, [plaintiffs] have no standing to complain about any alleged lack of
authority or defective assignment." (See also Fontenot v. Wells Fargo Bank, N.A. (2011)
198 Cal. App. 4th 256, 272 [plaintiff in wrongful foreclosure suit must show that "the
alleged imperfection in the foreclosure process was prejudicial to the plaintiff's
interests"].)
Consequently, even if the transfers made in 2008 and 2010 were invalid, Fontes
"was not the victim of such invalid transfers because her obligations under the note
remained unchanged." (Jenkins, supra, 216 Cal.App.4th at p. 515.) Finally, if plaintiffs
are correct that the securitization was ineffective, then they cannot support their
alternative argument, that the securitization precluded the 2008 Purchase and Assumption
Agreement between the FDIC and Chase and the 2010 assignment from Chase to U.S.
Bank. Plaintiffs' argument that the securitization somehow nullified their obligation to
make loan payments is simply not well taken.
10
2. Chase's Authority to Foreclose
Although they continue to argue that the loan was not in default, plaintiffs have
never claimed that they made all of the required payments under the note, nor have they
alleged an effort to tender the delinquent amount. Instead, they maintain that tender was
unnecessary because Chase had no authority to foreclose, as it was not the beneficiary.
Neither their first premise, that Chase was not the beneficiary, nor the second, that Chase
had no authority to foreclose, permits the conclusion that the foreclosure was invalid.
Civil Code section 2924, subdivision (a)(1),5 is part of a comprehensive legislative
scheme which is designed " '(1) to provide the creditor/beneficiary with a quick,
inexpensive and efficient remedy against a defaulting debtor/trustor; (2) to protect the
debtor/trustor from wrongful loss of the property; and (3) to ensure that a properly
conducted sale is final between the parties and conclusive as to a bona fide purchaser.'
[Citation.]" (Debrunner v. Deutsche Bank Nat. Trust Co., supra, 204 Cal.App.4th at p.
440.) " 'Because of the exhaustive nature of this scheme, California appellate courts have
refused to read any additional requirements into the non-judicial foreclosure statute.' "
(Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal. App. 4th 75, 82.)
Section 2924, subdivision (a)(1), sets forth the required elements of the notice of
default, including a statement of the beneficiary’s election to "sell or cause to be sold the
property to satisfy that obligation and any other obligation secured by the deed of trust or
mortgage that is in default." (Civ. Code § 2924, subd. (a)(1)(C).) Plaintiffs concede that
section 2924, subdivision (a)(1), authorizes a "trustee, mortgagee, or beneficiary, or any
of their authorized agents" to record the notice of default.6 Clearly the statute does not
5 All further statutory references are to the Civil Code except as otherwise indicated.
6 The statute specifies the conditions of filing a notice of default as follows: "(1) The
trustee, mortgagee, or beneficiary, or any of their authorized agents shall first file for
record, in the office of the recorder of each county wherein the mortgaged or trust
property or some part or parcel thereof is situated, a notice of default. That notice of
11
limit the power of sale to the beneficiary, as plaintiffs contend. Accordingly, as trustee
CRC was entitled to record a notice of default and proceed with the sale. This conclusion
is consistent with our holding in Debrunner v. Deutsche Bank Nat. Trust Co. (2012) 204
Cal. App. 4th 433, where we rejected the theory that only the entity in possession of the
note may foreclose. In that case we observed that " '[t]here is no stated requirement in
California's non-judicial foreclosure scheme that requires a beneficial interest in the Note
to foreclose. Rather, the statute broadly allows a trustee, mortgagee, beneficiary, or any
of their agents to initiate non-judicial foreclosure. Accordingly, the statute does not
require a beneficial interest in both the Note and the Deed of Trust to commence a non-
judicial foreclosure sale.' " (Id. at p. 441, quoting Lane v. Vitek Real Estate Indus. Group
(E.D.Cal.2010) 713 F. Supp. 2d 1092, 1099; see also Jenkins, supra, 216 Cal.App.4th at p.
515-516 [notice of default proper where recorded by agent of beneficiary]; Siliga v.
Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal. App. 4th 75, 85 [same];
Perlas v. Mortgage Elec. Registration Systems, Inc. (N.D.Cal.2010) 2010 WL 3079262
["There is no requirement in California that the foreclosure be initiated by the lender
itself"].)7
default shall include all of the following: [¶] (A) A statement identifying the mortgage or
deed of trust by stating the name or names of the trustor or trustors and giving the book
and page, or instrument number, if applicable, where the mortgage or deed of trust is
recorded or a description of the mortgaged or trust property. [¶] (B) A statement that a
breach of the obligation for which the mortgage or transfer in trust is security has
occurred. [¶] (C) A statement setting forth the nature of each breach actually known to
the beneficiary and of his or her election to sell or cause to be sold the property to satisfy
that obligation and any other obligation secured by the deed of trust or mortgage that is in
default. [¶] (D) If the default is curable pursuant to Section 2924c, the statement
specified in paragraph (1) of subdivision (b) of Section 2924c." (Civ. Code § 2924.)
7 Plaintiffs do not identify the "actual beneficiary," but only fault Chase for exercising
the power of sale reserved for that entity. At the final demurrer hearing Maunu repeated
that Chase was not the "real party in interest," followed by the rhetorical question, "So if
that's the case, who initiated the acceleration of the loan note and caused the trustee to file
the notice of default? . . .[W]ho's the real party in interest here . . . ?"
12
The deed of trust bearing Fontes's notarized signature is consistent with section
2924, subdivision (a)(1), by stating that "Borrower irrevocably grants and conveys to
Trustee, in trust, with power of sale, the . . . property . . . " The trustee in this case was
CRC, which did record the notice of default. That fact alone reveals a further
unsupported premise in plaintiffs' argument that Chase lacked the power of sale. It was
CRC that conducted the foreclosure, in accordance with the applicable statutory
provisions and with the deed of trust. (Cf. Gomes v. Countrywide Home Loans, Inc.
(2011) 192 Cal. App. 4th 1149, 1157 [deed of trust reflected plaintiffs' agreement that
MERS could initiate foreclosure, thus precluding suit disputing that authority]; accord,
Robinson v. Countrywide Home Loans, Inc. (2011) 199 Cal. App. 4th 42, 46-47.)
Plaintiffs' assertion that the loan was not in default is based solely on a declaration
of their witness, Joseph R. Esquivel, Jr., who had conducted research on MLMI 2005-A2.
Plaintiffs attached Esquivel's declaration but did not ask the court to take judicial notice
of it; and even if they had, the court would not have judicially noticed the fact asserted
within it, that the securitized loan was "[c]urrent in its status as a performing asset in this
pool of mortgage backed securities." It was clear to the superior court-- and plaintiffs
have not represented otherwise-- that Fontes fell behind in her monthly payments and did
not tender the amount due when the notice of default was issued.
Plaintiffs protest, however, that tender was not required because 1) defendants
were not entitled to enforce the obligation, 2) the trustee's sale was "knowingly wrongful
and without right," and 3) full tender would have "unjustly enriched U.S. Bank as it was
not expecting payment in full for another 23 or more years. As we have already
determined, these purported justifications are merely legal conclusions that are
unsupported either by statutory or judicial authority. Plaintiffs offered no facts obviating
or excusing tender, such as allegations that Fontes had actually made the payments, that
irregularity in the notice and sale procedures caused prejudice to plaintiffs, or that
Fontes's tender was improperly rejected. Plaintiffs' further suggestion that tender was
13
excused on equitable grounds is likewise without merit, as none of the recognized
equitable exceptions is applicable here. Plaintiffs do not, for example, complain that the
underlying loan and deed of trust were void for unconscionability or any other reason;
they do not claim an offset that exceeds the amount due; and they do not allege voidness
of the trustee's deed on its face. This is not a situation comparable to Lona v. Citibank,
N.A. (2011) 202 Cal. App. 4th 89, 111, where defendants failed to present evidence
responding to the allegations that the debtor's English was limited, that no one explained
the documents to him, that he did not understand what he was signing, and that the loan
broker ignored his inability to repay the loan. Thus, in this case the superior court
properly concluded that the foreclosure and trustee's sale were justified by Fontes's
default.
The conclusion that the foreclosure was proper is dispositive of all of plaintiffs'
causes of action, as each one is predicated on the alleged lack of authority to declare
plaintiffs' default and sell the property. Plaintiffs do not complain that the superior court
should have granted leave to amend, because they believe they adequately pleaded all
elements of each cause of action. In other words, they "did not need to suggest how the
[first amended complaint] could be amended because it did not need to be amended."
Because none of plaintiffs' causes of action was sustainable on the facts alleged, the court
properly entered the judgment of dismissal without granting any further leave to amend.
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Disposition
The judgment is affirmed.
______________________________
ELIA, J.
WE CONCUR:
_____________________________
RUSHING, P. J.
_____________________________
PREMO, J.
15