Shetty v. HSBC Bank USA, Nat. Assn. CA4/1 ( 2020 )


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  • Filed 9/24/20 Shetty v. HSBC Bank USA, Nat. Assn. CA4/1
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
    COURT OF APPEAL, FOURTH APPELLATE DISTRICT
    DIVISION ONE
    STATE OF CALIFORNIA
    SATISH SHETTY,                                                       D075639
    Plaintiff and Appellant,
    v.
    Super. Ct. No.
    HSBC BANK USA, NATIONAL                                             37-2017-00041523-CU-OR-CTL)
    ASSOCIATION,
    Defendant and Respondent.
    APPEAL from a judgment of the Superior Court of San Diego County,
    Timothy B. Taylor, Judge. Affirmed.
    Law Office of Richard L. Antognini and Richard L. Antognini for Plaintiff and
    Appellant.
    Servson & Werson and Jan T. Chilton, Kerry W. Franich, Kenneth Sur
    Miller, John Brendan Sullivan for Defendant and Respondent.
    Plaintiff and appellant Satish Shetty and his company Tatonka
    Acquisitions, Inc. sued defendant and respondent HSBC Bank USA, National
    Association (Bank) and others1 alleging causes of action for quiet title and
    declaratory relief relating to a condominium Shetty had purchased from a
    homeowners’ association that foreclosed on an assessment lien for unpaid
    dues. The trial court sustained Bank’s demurrer without leave to amend.
    Shetty contends this ruling was error; we affirm the judgment.
    FACTUAL AND PROCEDURAL BACKGROUND
    We state the facts, even if improbable, from the properly pleaded
    allegations from the operative first amended complaint. (Century-National
    Ins. Co. v. Garcia (2011) 
    51 Cal. 4th 564
    , 566, fn. 1; Hacker v. Homeward
    Residential, Inc. (2018) 
    26 Cal. App. 4th 270
    , 280.) However, we disregard
    contentions, deductions or conclusions of fact or law. (Marsh v. Anesthesia
    Services Medical Group, Inc. (2011) 
    200 Cal. App. 4th 480
    , 491.)
    The operative first amended complaint is cursory. Shetty alleges he
    and his company are the owners of property located on Camino Huerta in San
    Diego County (the property). Shetty alleges he obtained title via a grant deed
    from a homeowners’ association, Genesee Highlands Association
    (HOA)recorded in October 2015, then conveyed title to himself and his
    company. He alleges that Bank, which is designated as “Trustee for
    Adjustable Rate Mortgage Trust 2004-5,” claims an interest in the property
    under a September 2004 deed of trust, and recorded a notice of default and
    1      The other defendants are GMAC Mortgage Corporation (GMAC),
    Law Offices of Les Zieve, and “all persons unknown claiming any legal or
    equitable right, title, estate, lien or interest in the property described in
    the complaint adverse to plaintiff’s title or any cloud on plaintiff’s title
    thereto . . . .” (Some capitalization omitted.) Zieve also demurred to Shetty’s
    first amended complaint but the sole respondent in this appeal is Bank.
    While Tatonka Acquisitions, Inc. was originally a named plaintiff, it filed for
    Chapter 11 bankruptcy in November 2017. Tatonka is not a party to this
    appeal.
    2
    notice of trustee’s sale respectively in April 2017 and October 2017. Shetty
    alleges the notice of default does not have a currently dated “California
    Declaration of Compliance” appended to it as required by subdivision (c) of
    Civil Code section 2923.55 (section 2923.55). He seeks to quiet title to the
    property in his favor as of October 2015 and further seeks a judicial
    declaration that the notice of default and notice of trustee’s sale are void.
    Shetty alleges generally that Bank’s notice of default and election to sell, and
    notice of trustee’s sale “creat[e] clouds upon and affect[] plaintiffs’ title to the
    real property” at issue. He expressly alleges the complaint “is not an action
    for wrongful foreclosure or a challenge to any securitization of any existing
    loan." Shetty seeks a judicial declaration that plaintiffs “own and hold
    unencumbered title to the . . . property in fee simple and that their title
    should be protected and taken into account before any foreclosure sale . . . be
    conducted by defendants . . . .”
    Bank demurred on grounds the first amended complaint failed to state
    facts sufficient to constitute a cause of action. Pointing out Shetty had
    initially filed suit over the property in Los Angeles County, which lawsuit
    was dismissed with prejudice in September 2017, Bank argued Shetty’s
    claims were barred by res judicata. It argued Shetty’s cause of action for
    quiet title failed because Shetty failed to allege the prerequisite of tender,
    namely that he had satisfied the loan secured by Bank’s deed of trust. It also
    argued Shetty took title to the property subject to the September 2004 deed of
    trust and could not establish superior title, thus he could not maintain a
    quiet title cause of action. Bank argued Shetty was not entitled to a
    declaratory judgment because (1) the notice of default did not violate section
    2923.55 of the Homeowners’ Bill of Rights; (2) Shetty was not protected by
    3
    that law as he was not the borrower on the loan; and (3) section 2923.55 had
    been repealed in any event, terminating all claims for its alleged violation.
    In connection with the demurrer, Bank asked the court to take judicial
    notice of documents including:
    • the September 2004 deed of trust securing a loan by GMAC to
    borrower Sotthinarith Kim on the property
    • a notice of delinquent assessments and lien in favor of the HOA
    against Kim recorded in June 2014;
    • a December 2014 corporate assignment of the September 2004 deed
    of trust to Bank from Mortgage Electronic Registration Systems, Inc. (MERS)
    as GMAC’s nominee;
    • a trustee’s deed upon sale recorded in 2015, conveying the property to
    the HOA for a credit bid of $7,879.70;
    • a grant deed from the HOA to Shetty recorded in October 2015 and
    September 2015 Residential Purchase Agreement between the HOA and
    Shetty, reflecting a purchase price of $3,000 and stating the property “is
    being acquired by Buyer subject to valid existing liens and encumbrances of
    record . . . .”;2
    2     The trial court properly took judicial notice of the existence and facial
    contents of the recorded deed of trust, assignment, notices of default and
    trustee’s sale, and trustee’s deed upon sale under Evidence Code sections 452,
    subdivisions (c) and (h), and 453. (Yvanova v. New Century Mortgage Corp.
    (2016) 
    62 Cal. 4th 919
    , 924, fn. 1 (Yvanova).) Bank also sought judicial notice
    of Shetty’s complaint filed in Los Angeles County, the order granting
    judgment on the pleadings in Bank’s favor and notice of entry of that
    judgment in the Los Angeles case, the order denying Shetty’s motion to set
    aside that judgment, and an order denying Shetty’s ensuing petition for writ
    of mandamus. Because we do not reach the res judicata question, we need
    not address the validity of judicial notice of these documents.
    4
    • notices of default and elections to sell under the deed of trust
    recorded in 2015 and 2017; and
    • notices of trustee’s sales recorded in 2015 and 2017.
    Bank sought an order sustaining the demurrer without leave to amend.
    In opposition, Shetty asserted the matter was not properly resolved at
    the pleading stage; that defendants sought to prove facts contrary to his
    allegations and a demurrer was not the proper procedure. He argued Bank
    sought to establish facts and statements contained in the various documents,
    a misuse of judicial notice. He argued he had standing to bring the action,
    the Los Angeles action was not a decision on the merits and thus res judicata
    was not a bar, tender was not required to plead quiet title, and he adequately
    pleaded a right to declaratory relief by allegations that one defendant was
    “ ‘not a duly appointed or qualified trustee with respect to the [deed of trust]
    and . . . the Notice of Default is defective and, thus, invalid’ ” or “ ‘void,
    unenforceable and of no legal effect and . . . does not constitute the
    commencement of a lawful foreclosure.’ ” Shetty asked for leave to amend in
    the event the court intended to sustain the demurrer so as to “allege
    additional facts, and to allege in further detail the facts and circumstances,
    upon which they base their causes of action and . . . their allegations that no
    defendant has a valid, subsisting or enforceable claim to title to the real
    property.” Shetty asked the trial court to judicially notice under Evidence
    Code section 452, subdivisions (g) and (h) as “common knowledge” or “not
    reasonably subject to dispute” the fact that “GMAC . . . was one of the largest
    residential lenders generating oppressive fraudulent loans in the early
    2000[’]s and it became one of the largest beneficiaries of the government
    5
    funded bailout of 2008 at a time when its immense loan portfolio was in utter
    disarray."3
    Granting Bank’s request for judicial notice and denying Shetty’s as to
    GMAC, the trial court sustained the demurrer without leave to amend.
    Observing the complaint sought to avoid Bank’s non-judicial foreclosure sale
    of the property, it ruled Shetty failed to plead standing under the
    Homeowners’ Bill of Rights to pursue a claim that Bank could not foreclose
    due to an alleged violation of section 2923.55 because that section applied
    only to “owner-occupied” properties, and the pleading did not include such an
    allegation, nor did it allege Shetty was the borrower. It ruled the judicially
    noticeable documents showed that Kim, a nonparty, was the borrower. The
    court noted section 2923.55 had been repealed and Shetty had not pleaded
    why he could pursue claims under a repealed statute or whether it was
    encompassed by another statute. The court further ruled Shetty failed to
    plead why he had not tendered the amount owing on the superior lien in
    favor of the Bank or why a tender was unwarranted. It ruled Shetty’s
    declaratory relief claim failed as derivative of the quiet title cause of action.
    Though Shetty requested leave to amend, the trial court ruled he
    “ma[d]e no effort” to meet his burden to show in what manner he could
    amend and how the amendment would change the legal effect of the
    pleadings, and thus could not state a valid claim.
    Shetty filed this appeal from the ensuing judgment.
    3     Shetty attached various online publications from Bloomberg and other
    sources to support his request. But he did not cite legal authority, and he has
    not persuaded us such magazine or online articles are properly the subject of
    judicial notice under the cited Evidence Code sections. (Accord, Truong v.
    Nguyen (2007) 
    156 Cal. App. 4th 865
    , 882; Starkman v. Mann Theatres Corp.
    (1991) 
    227 Cal. App. 3d 1491
    , 1501, fn. 5.)
    6
    DISCUSSION
    I. Standard of Review
    “We apply well-established rules of review. ‘A demurrer tests the legal
    sufficiency of the complaint. [Citation.] Therefore, we review the complaint
    de novo to determine whether it contains sufficient facts to state a cause of
    action. [Citation.] “We treat the demurrer as admitting all material facts
    properly pleaded, but not contentions, deductions or conclusions of fact or
    law.” ’ ” (Marsh v. Anesthesia Services Medical Group, 
    Inc., supra
    , 200
    Cal.App.4th at p. 491.) We give the complaint a reasonable interpretation,
    and reverse an order sustaining a demurrer if the plaintiff has stated a cause
    of action under any possible legal theory. (Minnick v. Automotive Creations,
    Inc. (2017) 
    13 Cal. App. 5th 1000
    , 1004.) We accept the material factual
    allegations of the complaint unless contrary to law or facts of which a court
    may take judicial notice. (SLPR, L.L.C. v. San Diego Unified Port District
    (2020) 
    49 Cal. App. 5th 284
    , 318; Sciarratta v. U.S. Bank National Assn.
    (2016) 
    247 Cal. App. 4th 552
    , 561 (Sciarratta); see Mathews v. Becerra (2019) 
    8 Cal. 5th 756
    , 768 [court may consider matters that may be judicially noticed].)
    This court will affirm an order sustaining a demurrer on any proper grounds,
    regardless of the basis for the trial court’s decision. (Cansino v. Bank of
    America (2014) 
    224 Cal. App. 4th 1462
    , 1468.)
    “In evaluating the court's refusal to permit an amendment, we are
    governed by an abuse-of-discretion review standard. [Citation.] The court
    abuses its discretion if there is a reasonable possibility an amendment would
    cure the defects. [Citation.] The appellant has the burden to identify specific
    facts showing the complaint can be amended to state a viable cause of action.
    [Citation.] An appellant can meet this burden by identifying new facts or
    theories on appeal.” (Minnick v. Automotive Creations, 
    Inc., supra
    , 13
    7
    Cal.App.5th at p. 1004; see T.H. v. Novartis Pharmaceuticals Corp. (2017) 
    4 Cal. 5th 145
    , 162.)
    II. Analysis
    Shetty’s operative complaint and the judicially noticeable documents
    set the context for this appeal. They reveal Shetty purchased the property
    from the HOA under a recorded grant deed and purchase agreement
    providing that he took the property subject to valid existing liens and
    encumbrances. He does not contest the legally operative language or
    authenticity of these underlying documents. The trial court properly deduced
    and relied on the legal effect of the recorded documents which are clear from
    their face. (See Linda Vista Village San Diego Homeowners Assn., Inc. v.
    Tecolote Investors LLC (2015) 
    234 Cal. App. 4th 166
    , 184 [court may 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’ ” and “ ‘may deduce and rely upon the legal effect of the
    recorded document, when that effect is clear from its face’ ”].)
    Shetty’s pleading does not seek to stop or set aside any foreclosure sale.
    Rather, Shetty’s quiet title cause of action seeks a judicial determination that
    he holds clear title to the property over Bank’s interest, in part by seeking to
    invalidate or void the underlying loan and its assignment to Bank. On
    appeal, he does not challenge the court’s ruling on the procedural defect
    alleged in his operative pleading: that Bank’s notice of default failed to
    comply with section 2923.55. He contends he can allege a void assignment to
    Bank, and thus he was not required to allege tender as a prerequisite to his
    quiet title claim. Citing 
    Yvanova, supra
    , 
    62 Cal. 4th 919
    , he argues “ ‘[t]ender
    8
    has been excused when . . . the plaintiff alleges the foreclosure deed is facially
    void, as arguably is the case when the entity that initiated the sale lacked
    authority to do so.’ ” Shetty maintains his pleading either alleges, or can be
    amended to allege, two grounds for finding the December 2014 assignment to
    Bank void.
    In this preforeclosure context, Yvanova’s principles are inapplicable.
    Yvanova’s ruling is expressly limited to post-foreclosure scenarios. (
    Yvanova, supra
    , 62 Cal.4th at p. 934 [“We do not address the distinct question of
    whether, or under what circumstances, a borrower may bring an action for
    injunctive or declaratory relief to prevent a foreclosure sale from going
    forward”]; Saterbak v. JPMorgan Chase Bank, N.A. (2016) 
    245 Cal. App. 4th 808
    , 815.) Yvanova involved a single aspect of a potential claim for wrongful
    foreclosure: standing. The Yvanova court expressly did not decide whether
    the plaintiffs in that case were required to allege tender, even in the situation
    where there had been a void assignment. Despite the footnoted statement on
    which Shetty relies, the Yvanova court stated its ruling was narrow, “limited
    to the standing question” and it “express[ed] no opinion as to whether
    plaintiff Yvanova must allege tender to state a cause of action for wrongful
    foreclosure under the circumstances of this case.” (
    Yvanova, supra
    , 62
    Cal.4th at pp. 924, 929, fn. 4.) With this clarification, we assess whether
    Shetty has demonstrated he can state causes of action for quiet title and
    declaratory relief.
    A. Quiet Title
    A quiet title action is intended to “ ‘finally settle and determine, as
    between the parties, all conflicting claims to the property in controversy, and
    to decree to each such interest or estate therein as he may be entitled to.’ ”
    (Yuba Inv. Co. v. Yuba Consolidated Gold Fields (1926) 199 Cal.203, 209;
    9
    Deutsche Bank National Trust Co. v. Pyle (2017) 
    13 Cal. App. 5th 513
    , 524.) A
    plaintiff seeking to state a cause of action for quiet title must verify his or her
    complaint, and include in it, among other things, the adverse claims to the
    plaintiff’s title, the date as of which the determination is sought, and a
    “prayer for the determination of the title of the plaintiff against the adverse
    claims.” (Code Civ. Proc., § 761.020; see Orcilla v. Big Sur, Inc. (2016) 
    244 Cal. App. 4th 982
    , 1010.) Further, a mortgagor may not quiet title against a
    secured lender without first paying, or tendering, the outstanding debt on
    which the mortgage or deed of trust is based. (Shimpones v. Stickney (1934)
    
    219 Cal. 637
    , 649 [“[i]t is settled in California that a mortgagor cannot quiet
    his title against the mortgagee without paying the debt secured”]; Lueras v.
    BAC Home Loans Servicing, LP (2013) 
    221 Cal. App. 4th 49
    , 86 (Lueras);
    accord, Pfeifer v. Countrywide Home Loans, Inc. (2012) 
    211 Cal. App. 4th 1250
    ,
    1280; Lona v. Citibank, N.A. (2011) 
    202 Cal. App. 4th 89
    , 112-113.)
    As Bank points out, Shetty’s first amended complaint was not verified
    as required by statute. Even if that defect were curable by amendment,
    Shetty did not allege he tendered repayment of the loan, offered to tender, or
    had a lawful excuse for not tendering so as to maintain a cause of action for
    quiet title. This deficiency is fatal to his quiet title action in the
    preforeclosure context. The tender requirement stems from the fact that a
    quiet title action is one in equity, thus a defaulted borrower is required to do
    equity before the court will exercise its equitable powers. (See Lona v.
    Citibank, 
    N.A., supra
    , 202 Cal.App.4th at p. 112; Mix v. Sodd (1981) 
    126 Cal. App. 3d 386
    , 390 [tender requirement is “based upon the equitable
    principle that he who seeks equity must do equity . . . . [A] court of equity
    will not aid a person in avoiding the payment of his or her debts”].) Where
    there is no credible dispute that Shetty purchased the property subject to the
    10
    existing debt, allowing Shetty to claim the property without paying anything
    “would give [him] an inequitable windfall, allowing [him] to evade [his] lawful
    debt” (see Stebley v. Litton Loan Servicing, LLP (2011) 
    202 Cal. App. 4th 522
    ,
    526) and take title to the property free and clear of the debt. Such a result
    would be inconsistent with the equitable quiet title claim. The circumstances
    are like those in Lueras, in which the Court of Appeal reviewing a judgment
    on a demurrer declined to exempt the plaintiff in a quiet title action from
    alleging payment of the outstanding indebtedness. 
    (Lueras, supra
    , 221
    Cal.App.4th at p. 87.)
    Even assuming an exception to tender requirements might apply,
    Shetty has not shown he can allege such an exception. “Full tender of the
    indebtedness is not required if the [plaintiff] attacks the validity of the
    underlying debt.” 
    (Lueras, supra
    , 221 Cal.App.4th at p. 87.)4 Nor is tender
    required where the trustee’s deed is void on its face (Kalnoki v. First
    American Trustee Servicing Solutions, LLC (2017) 
    8 Cal. App. 5th 23
    , 47), i.e.,
    “void and not merely voidable.” (Saterbak v. JP Morgan Chase Bank, 
    N.A., supra
    , 245 Cal.App.4th at p. 819.) No tender is required where it would be
    inequitable to impose such a condition on the party challenging the sale.
    (Lona v. Citibank, 
    N.A., supra
    , 202 Cal.App.4th at p. 113.)
    As stated, Shetty makes two arguments that he can plead around the
    tender requirement.
    4     Though Shetty claims his pleading was an attack on the validity of the
    underlying debt, the allegations and arguments on appeal seek to void the
    assignment of the deed of trust to Bank, not the underlying debt. Even if the
    challenge to the assignment was an attack on the validity of the underlying
    debt, we conclude Shetty’s attempt to circumvent tender requirements by
    pleading a void assignment is unavailing for the reasons discussed below.
    11
    1. GMAC’s Liquidation Theory
    According to Shetty, in opposition to the demurrer he showed the 2014
    assignment was void by evidence that GMAC had gone into bankruptcy and
    had been liquidated by 2013. He argues that by the time of the December
    2014 assignment to Bank, the loan “either was the property of the GMAC
    bankruptcy estate or, more likely, the property of the GMAC liquidating
    trust” but was “no longer GMAC’s asset.” Citing 
    Sciarratta, supra
    , 
    247 Cal. App. 4th 552
    , Shetty asserts GMAC had no interest to assign, thus MERS
    as its nominee had nothing to assign, and the assignment is void for that
    reason.
    Shetty did not establish the premise of his argument concerning
    GMAC’s liquidation and possession of the loan by the online publications and
    articles. The trial court correctly denied his request to judicially notice such
    items. (See footnote 3 ante.) No judicially noticeable fact establishes GMAC
    had been liquidated by 2014 or that the loan no longer belonged to GMAC.
    Even assuming Shetty could amend to allege GMAC’s liquidation and
    transfer of the loan, it would not establish that MERS had no interest to
    assign. The deed of trust states that MERS was the beneficiary under the
    deed of trust and the nominee for GMAC and its “successors and assigns.” It
    gave MERS the right “to exercise any or all of [GMAC’s] interests, including,
    but not limited to, the right to foreclose and sell the Property; and to take any
    action required of [GMAC] including, but not limited to, releasing and
    canceling this Security Instrument.” MERS was thus authorized to assign
    the note and deed of trust in 2014, notwithstanding any liquidation or
    bankruptcy of GMAC. (See Ghuman v. Wells Fargo Bank, N.A. (E.D. Cal.
    2013) 
    989 F. Supp. 2d 994
    , 1001 [“[T]he fact Lender became defunct did not
    strip MERS’[s] authority to act under the Deed of Trust”]; Newman v. Bank of
    12
    N.Y. Mellon (E.D.Cal. 2017) 
    2017 WL 4325772
    , at *6 [“That DOMC may have
    ceased doing business or become defunct does not affect MERS’s ability to
    assign the deed of trust as nominee, even if the successor is not identified in
    the assignment”]; Mortgage Electronic Registration Systems, Inc. v. Koeppel
    (N.D.Cal. 2020) 
    2020 WL 1233925
    , at *9 [quoting Newman].) The September
    2004 deed of trust prevents Shetty from pleading around this fact.
    Sciarratta does not compel a different result. There, this court
    reviewed a claim for wrongful foreclosure that the borrower alleged had not
    been conducted by the beneficiary of record. 
    (Sciarratta, supra
    , 247
    Cal.App.4th at p. 556 [“Deutsche Bank was the owner of Sciarratta’s loan and
    beneficiary of the deed of trust according to the public record at the time of
    this foreclosure. But Deutsche Bank did not foreclose. Bank of America
    did”].) The sole question was whether the plaintiff could allege prejudice or
    harm for purposes of wrongful foreclosure, not whether an assignment was
    valid. (Id. at pp. 555 [explaining the question was solely whether the
    allegations stated prejudice or harm for a claim of wrongful foreclosure].)
    The problem was that a successor of the original lender made two successive
    assignments of the same deed of trust and the second purported beneficiary
    foreclosed despite receiving nothing under the second assignment. (Id. at p.
    564 [“Chase, having assigned ‘all beneficial interest’ in Sciarratta’s notes and
    deed of trust to Deutsche Bank in April 2009, could not assign again the
    same interests to Bank of America in November 2009”].) The recorded chain
    of title did not contradict these allegations. (Id. at pp. 556-557.) Thus,
    assuming the truth of the plaintiff's allegations, this court held the element
    of harm was met because the second assignment would be void, not merely
    voidable, giving the borrower standing to challenge a purportedly void
    assignment. (Id. at pp. 563-564.) Shetty’s allegations and causes of action
    13
    are not the same as the plaintiff’s in Sciarratta, which were supported by the
    properly judicially noticed recorded documents. (Id. at p. 562.) And his
    allegations contradict the judicially noticeable recorded documents in the
    record.
    Finally, Shetty’s complaint does not allege facts showing it is
    inequitable to impose the tender requirement on him; as stated, the judicially
    noticeable facts demonstrate otherwise.
    2. Assignment’s Asserted Failure to Transfer the Promissory Note
    Shetty next argues he can allege the 2014 assignment of the deed of
    trust to Bank did not contain language transferring the promissory note for
    the loan, and thus the assignment is void or a “legal nullity.” As stated, the
    operative pleading and judicially noticeable documents do not show a
    foreclosure sale has occurred, and in this preforeclosure context where Shetty
    is seeking to invalidate the underlying documents for a threatened
    nonjudicial foreclosure, such a preemptive challenge is impermissible.
    “California courts do not allow such preemptive suits because they ‘would
    result in the impermissible interjection of the courts into the nonjudicial
    scheme enacted by the California legislature.’ ” (Saterbak v. JPMorgan
    Chase Bank, 
    N.A., supra
    , 245 Cal.App.4th at p. 814; see Perez v. Mortgage
    Electronic Registration Systems, Inc. (9th Cir. 2020) 
    959 F.3d 334
    , 339-340
    [“California law does not permit preemptive actions to challenge a party’s
    authority to pursue foreclosure before a foreclosure has taken place”].)
    Shetty misplaces reliance on Kelly v. Upshaw (1952) 
    39 Cal. 2d 179
    , which
    does not involve a nonjudicial foreclosure process. As in Orcilla v. Big Sur,
    
    Inc., supra
    , 
    244 Cal. App. 4th 982
    , “we decline to read additional requirements
    into the non-judicial foreclosure statute requiring the note and deed of trust
    to be held by the same party.” (Id. at p. 1004.)
    14
    B. Declaratory Relief
    To state a claim for declaratory relief, the plaintiff must allege facts
    showing there is a dispute between the parties concerning their legal rights,
    constituting an “actual controversy” within the meaning of the declaratory
    relief statute. (Code Civ. Proc., § 1060; Artus v Gramercy Towers
    Condominium Assn. (2018) 
    19 Cal. App. 5th 923
    , 930.) A claim for declaratory
    relief fails when it is “ ‘ “wholly derivative” of other failed claims.’ ” (Smyth v.
    Berman (2019) 
    31 Cal. App. 5th 183
    , 191-192 quoting Ball v. FleetBoston
    Financial Corp. (2008) 
    164 Cal. App. 4th 794
    , 800.) Shetty’s claim for
    declaratory relief fails as dependent on and derivative of his insufficient quiet
    title cause of action.
    Given our conclusions, we need not decide whether Shetty’s causes of
    action are barred by res judicata or whether there are other grounds for
    sustaining the demurrer.
    III. Leave to Amend
    Shetty does not describe any other facts he can allege to render his
    claims viable, and we hold the trial court did not abuse its discretion by
    sustaining the demurrer without leave to amend.
    15
    DISPOSITION
    The judgment is affirmed.
    O'ROURKE, J.
    WE CONCUR:
    HUFFMAN, Acting P. J.
    IRION, J.
    16
    

Document Info

Docket Number: D075639

Filed Date: 9/24/2020

Precedential Status: Non-Precedential

Modified Date: 9/24/2020