Judge: Gary I. Micon, Case: 25CHCV00227, Date: 2025-03-14 Tentative Ruling
Case Number: 25CHCV00227 Hearing Date: March 14, 2025 Dept: F43
Dept. F43
Date: 03-14-25
Case # 25CHCV00227, Monterrosa v. Select
Portfolio Servicing, Inc., et al.
Trial Date: None set.
DEMURRER
MOVING PARTIES: Defendants Select Portfolio
Servicing, Inc. and Metropolitan Life Insurance Company
RESPONDING PARTY: Plaintiff Jessenia
Monterrosa
RELIEF REQUESTED
Order sustaining demurrer to the entire
complaint.
RULING: Demurrer
is sustained with leave to amend.
SUMMARY OF ACTION:
On April 21, 2008, Margarita Monterrosa
secured a $387,000.00 loan on real property in Arleta, CA. Between 2011 and 2022, the Note and Deed of
Trust were assigned to various entities.
On June 10, 2022, the Note and Deed of Trust was assigned to Metropolitan
Life Insurance Company (Metropolitan Life).
Select Portfolio Servicing, Inc. (SPS) serviced the mortgage for
Metropolitan life. Monterrosa passed
away on June 28, 2021.
The decedent’s daughter, plaintiff Jessenia
Monterrosa, gave SPS decedent’s death certificate, informed SPS she was her
mother’s successor in interest, and that she wanted to be deemed as such. SPS informed Plaintiff that the death
certificate was not enough to deem Plaintiff as successor in interest and did
not state which documents Plaintiff needed to present. Plaintiff set up an automatic payment account
and paid the mortgage payments directly to SPS for over three (3) years.
In early 2024, Plaintiff experienced
financial hardship and contacted SPS for modification assistance. SPS refused to communicate with Plaintiff
because Plaintiff was not named in the Deed on the Trust. A Notice of Default and Trustee Sale were
filed, the property was sold, and a deed to that effect was recorded. SPS never contacted Plaintiff before filing
the notices of default and trustee sale.
Plaintiff filed this action against
defendants SPS and Metropolitan Life on January 21, 2025. Plaintiff alleges various causes of action
including several violations of California Homeowner’s Bill of Rights,
Negligence, Wrongful Foreclosure, violation of Bus. & Prof. Code, §17200,
and Cancellation of Instruments. Plaintiff
alleges that Defendants never informed Plaintiff what additional documents were
needed to confirm Plaintiff as successor in interest making Plaintiff unable to
apply for loss mitigation or other foreclosure alternatives.
Defendants demurred to the complaint on
February 13, 2025 arguing that Plaintiff lacks standing to bring her claims
because she is not a borrower under the Homeowner’s Bill of Rights. Plaintiff filed an opposition on February 28,
2025. Defendants replied on March 4,
2025.
MEET AND CONFER
Before filing a demurrer, the parties must
meet and confer “in person, by telephone, or by video conference.” (Code Civ. Proc., § 430.41, subd. (a).) The moving party must file and serve a meet
and confer declaration stating either: (1) the means by which the parties met
and conferred, that the parties did not reach an agreement resolving the issues
raised in the demurrer; or (2) that the party who filed the pleading subject to
the demurrer failed to respond to the meet and confer request or failed to meet
and confer in good faith. (Code Civ.
Proc., §§ 430.41, subd. (a)(3).) Defense
counsel claims counsel met and conferred telephonically and did not reach an
agreement on the issues in the demurrer.
(Declaration of Demurring Party, ¶ 2.)
SUMMARY OF ARGUMENTS
Defendants demur to all causes of action for
failure to state facts sufficient to constitute causes of action. Because Plaintiff is not a borrowers, she
lacks standing to assert claims for violations of the Homeowner’s Bill of
Rights. Plaintiff’s claims under the
Federal Debt Collection Practices Act (FDCPA) also fail because neither
defendant is a “debt collector.” SPS is
a loan servicer and Metropolitan Life is an assignee who acquired the mortgage
before it was default. Additionally, because
Plaintiff admits she is not a borrower, she is not consumer under the
FDCPA. Finally, Plaintiff’s claims for
negligence, cancellation of instrument, and violations of the Unfair
Competition Law also fail because they are based on the failed Bill of Rights
and FDCPA claims.
Plaintiff opposes arguing that because SPS
acted as a direct agent for loan beneficiary Metropolitan Life, all SPS’s acts
were committed with Metropolitan Life’s knowledge and authority making Metropolitan
Life subject to liability for SPS’s acts.
Within the meaning of Civil Code section 2929.5, subdivision (e)(1),
Plaintiff is a borrower because the term includes successors in interest of the
trustor or mortgagor to real property security before the deed of trust or
mortgage has been discharged or foreclosed.
Under Civ. Code section 2920.7, subdivision (e)(1), survivors and heirs
have a right of action for violations of the Homeowner’s Bill of Rights by
beneficiary or loan servicers being notified of the death of the trustor to the
Deed of Trust. Plaintiff alleges that
she notified loan servicer SPS of her mother’s death and Plaintiff’s causes of
action have merit.
In reply, Defendants note Plaintiff’s failure
to address its substantive arguments under the Fair Debt Collection Practices
Act and that Plaintiff cites outdated law to state that she is a borrower.
ANALYSIS
A¿party may respond to a pleading against it
by demurrer based on any single or combination of eight enumerated grounds,
including¿that¿“the pleading does not state facts sufficient to constitute a
cause of action” and is uncertain, meaning “ambiguous and unintelligible.” (Code Civ. Proc., § 430.10, subds. (e),
(f).) The grounds for demurring must be
apparent from either the face of the complaint or a matter of which the court
may take judicial notice. (Code Civ.
Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d
311, 318.) The purpose of a demurrer is
to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153
Cal.App.3d 280, 286.) “In the
construction of a pleading, for the purpose of determining its effect, its
allegations must be liberally construed, with a view to substantial justice
between the parties.” (Code Civ. Proc.,
§ 452.) The court “treat[s] the demurrer
as admitting all material facts properly pleaded, but not contentions, deductions
or conclusions of fact or law[.]” (Berkley
v. Dowds (2007) 152 Cal.App.4th 518, 525.)
In applying these standards, the court liberally construes the complaint
to determine whether a cause of action has been stated. (Picton v. Anderson Union High School
Dist. (1996) 50 Cal.App.4th 726, 733.)
First
Cause of Action: Violation of Civ. Code, § 2923.5
Defendants demur to the first cause of action for failure
to allege sufficient facts to constitute a cause of action. Plaintiff fails to allege sufficient facts
showing that she is a “borrower” with standing to bring claims for violating
the Homeowner’s Bill of Rights (HBOR).
Defendants note that Plaintiff does not dispute her allegations that she
is not a party to the Deed of Trust and that she was not deemed the successor
in interest on the loan account.
To establish a violation of the HBOR, the complaint must
allege that (1) defendant violated provisions of the HBOR; (2) plaintiff is a
borrower who was harmed by the violations; and (3) defendant’s actions were a
substantial factor in causing plaintiff’s harm.
(CACI No. 4190.) The violation
must be “material.” (Ibid.) A servicer violates section 2923.5 if the
servicers recorded a notice of default and election to sell before contacting
the borrower in person or by telephone to assess the borrower’s financial
situation and to explore foreclosure prevention alternatives. (Civ. Code, § 2920.5, subd. (b).)
Plaintiff asserts that she sufficiently pleads that she
is her mother’s successor in interest under Civil Code section 2929.5,
subdivision (e)(1). Section 2929.5
defines a borrower to include successors-in-interest of “the trustor or
mortgagor to the real property security before the deed of trust or mortgage
has been discharged, reconveyed, or foreclosed upon.” (Civ. Code, § 2929.5, subd. (e)(1).) Defendants argue that this definition does
not include the “successor in interest” of the original borrower and that
Plaintiff provides not legal authority to support her argument.
Section 2929.5 applies when a foreclosure lender wants to
look for hazardous substances in the property and by its terms this definition
is limited to section 2929.5 only, while section 2920.5(c)(1) states that its
“borrower” definition applies to the entire article. (See Civ. Code, § 2920.5, subd. (c)(1) [listing
Civ. Code, §§ 2923.5 and 2924.9].)
Plaintiff also cites to Civil Code section 2920.7, subd.
(e)(1), to state that as her mother’s survivor and heir, she has a right to
bring an action for violations of the HBOR.
This provision was repealed in 2019.
Under the HBOR, a borrower is “any natural person who is
a mortgagor or trustor and who is potentially eligible for any federal, state,
or proprietary foreclosure prevention alternative program offered by, or
through, his or her mortgage servicer.”
(Civ. Code, § 2920.5, subd. (c)(1).)
Only a “borrower” has standing to assert claims for HBOR
violations. (In re Aarons (C.D.
Cal. 2022) 643 B.R. 595, 611.)
The “successor in interest” is the beneficiary of a
decedent’s estate and retains the same rights as the original owner, with no
change in substance. (Code Civ. Proc., § 377.11; Shetty v. HSBC Bank
USA, N.A. (2023) 91 Cal.App.5th 796, 801 [quoting Black’s Law Dict. (11th
ed. 2019) p. 1732].)
To establish that a person is a successor in interest to real
property, the person must present an affidavit to the holder of the property that
includes the successor in interest’s name, the decedent’s name, the date and
place of the decedent’s death, a description of the real property, a copy of
the death certificate, a statement of no other superior right to the interest, and
that either no proceeding is now being or has been conducted in California for
administration of the decedent’s estate or that the decedent’s personal
representative has consented in writing to transferring the property to the
affiant. (Prob. Code, § 13101, subds.
(a)(1)-(4), (7), (9), (d).) To transfer
an obligation secured by a lien on real property, the affidavit must also
include the recording reference of the instrument creating the lien and a
notary public’s certificate of acknowledgement. (Prob. Code, §§ 13101, subd. (c), 13103, 13106.5,
subd. (a).) The potential successor in interest
must also present proof of their identity to the holder of the property. (Prob. Code, § 13104, subds. (a)-(d).)
Plaintiff does not have standing as a “borrower” to bring
a claim for HBOR violations because the complaint fails to allege that Plaintiff
established she was the successor-in-interest to the Deed of Trust. The Deed of Trust states that “‘Successor in
Interest of Borrower’ means any party that has taken title to the Property,
whether or not that party has assumed Borrower’s obligation under the Note
and/or this Security Instrument.”
(Compl., ¶ Exh. A, p. 3 ¶ (R).)
Plaintiff alleges that she has “title” to the subject property but only
alleges that she presented SPS with a copy of her mother’s death certificate,
advised SPS that Plaintiff was her mother’s successor in interest, and stated
she wished to be deemed as such.
(Compl., ¶¶ 5, 20.) Plaintiff
mentions no other documentation. Plaintiff
does not allege that she took title to the property as her mother’s heir or by
any other means, and therefore fails to allege that she is on record as the
owner. Plaintiff also admits that SPS
informed her that the death certificate alone was insufficient to deem her
successor in interest. (Compl., ¶ 21.) Subsequently, Plaintiff made payments on the
mortgage for three years until her financial hardship began in 2024. (Compl., ¶¶ 22, 27.)
Because Plaintiff alleges facts stating that she is her
mother’s successor in interest but that she only presented her mother’s death
certificate to prove her status as a successor in interest, even after SPS
informed her this was insufficient, Plaintiff is not a borrower and lacks
standing to bring her claims under the Homeowner’s Bill of Rights.
Accordingly, Defendants’ demurrer to the First Cause of
Action is sustained with leave to amend.
Second
Cause of Action: Violation of Civ. Code, § 2924.9
Defendants demur to the Second Cause of Action for
failure to state facts sufficient to constitute a cause of action because
Plaintiff is not a “borrower.”
To establish a violation of the HBOR, the complaint must
allege that (1) defendant violated provisions of the HBOR; (2) plaintiff is a
borrower who was harmed by the violations; and (3) defendant’s actions were a
substantial factor in causing plaintiff’s harm.
(CACI No. 4190.) The violation
must be “material.” (Ibid.) A loan servicer violates section 2924.9 if,
within five days of recording a notice of default, the servicer fails to send
the borrower a written communication that (1) the borrower may be evaluated for
a foreclosure prevention alternative, (2) whether the application is required
to be submitted by the borrower in order to be considered for a foreclosure
prevention alternative, and (3) the means and process by which the borrower may
obtain an application for foreclosure prevention alternatives. (Civ. Proc., § 2924.9, subd. (a).)
As mentioned above, because Plaintiff fails to establish
that she is a borrower under HBOR, she lacks standing to plead this cause of
action.
Accordingly, Defendants’ demurrer to the Second Cause of
Action is sustained with leave to amend.
Third
Cause of Action: Wrongful Foreclosure
Defendants demur to the Third Cause of Action for failure
to state facts sufficient to constitute a cause of action. This claim is derivative of Plaintiff’s HBOR
claims, and Plaintiff fails to establish that Defendants are “debt collectors”
under the Fair Debt Collection Practices Act.
Plaintiff opposes Defendants’ HBOR arguments but does not address the
FDCPA arguments.
The elements of the tort of wrongful foreclosure 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; and (4) no breach of
condition or failure of performance existed on the mortgagor’s or trustor’s
part which would have authorized the foreclosure or exercise of the power of
sale.” (Majd v. Bank of America, N.A.
(2015) 243 Cal.App.4th 1293, 1306-07 [internal citation omitted].)
“To successfully challenge a foreclosure sale based on a
procedural irregularity, the plaintiff must show both that there was a failure
to comply with the procedural requirements for the foreclosure sale and that
the irregularity prejudiced the plaintiff.”
(Citrus El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal.App.5th
943, 950.)
Plaintiff asserts that Defendants’ foreclosure was
unlawful and violated the Fair Debt Collection Practices Act (12 C.F.R. §
1204.38 (b)(1)(vi)(B)) and HBOR. Because
the court sustained the demurrer to both HBOR causes the action, the court only
addresses the Fair Debt Collection Practices Act.
Under the Fair Debt Collection Practices Act (FDCPA), a
loan servicer must maintain policies and procedures designed to ensure that the
loan services can determine the existence or identity of a deceased borrower’s
successor in interest. (12 C.F.R. §
1204.38 (b)(1)(vi)(B).) “Upon receiving
notice of the existence of a potential successor in interest, [the loan
servicer must] promptly determine the documents the servicer reasonably
requires to confirm that person’s identity and ownership interest in the
property and promptly provide to the potential successor in interest a
description of those documents and how the person may submit a written request
under § 1024.36(i) (including the appropriate address).” (Ibid.)
Defendants contend that they are not bound by the FDCPA because
Plaintiff fails to allege that she is a consumer within the meaning of the
FDCPA. Plaintiff is a non-borrower that
is not obligated to pay any debt to Defendants.
Plaintiff does not address this argument. This argument lacks merit because the FDCPA
requires loan servicers to have procedures to assist them in determining whether
an individual is a confirmed successor in interest regardless of whether they
are a consumer.
The complaint sufficiently alleges that SPS did not
promptly provide Plaintiff with a description of the documents required to
confirm her identity or how to submit a written request. (Compl., ¶¶ 19-21.) Plaintiff alleges that when she informed SPS
that she is her mother’s successor-in-interest and provided SPS with her
mother’s death certificate, SPS merely informed Plaintiff that the death
certificate was insufficient to deem Plaintiff as a successor in interest
without providing any details about which other documentation was
required. (Compl., ¶¶ 19-21.) Plaintiff also alleges that over three years
later, when a Notice of Default and Election were recorded, SPS did not contact
Plaintiff and refused to work with her because Plaintiff was not listed on the
Deed of Trust. (Compl., ¶¶ 22, 29-30.)
Defendants next contends that SPS is not a “debt
collector” under the FDCPA because SPS acquired the mortgage before it was in
default, which Plaintiff acknowledges.
Plaintiff does not address this argument.
Under the FDCPA, “debt collector” includes persons and
entities that (1) engage in “any business the principal purpose of which is the
collection of any debts,” or (2) “who regularly collects or attempts to collect
. . . debts owed or due [to]
another.” (15 U.S.C. § 1692a(6).) This definition does not include a consumer’s
creditors, mortgage servicers, or assignee’s of debt unless the debt was in
default at the time the debt was acquired or assigned. (Davidson v. Seterus, Inc. (2018) 21
Cal.App.5th 283, 303; Heejoon Chung v. U.S. Bank, N.A. (2017) 250
F.Supp.3d 658, 683 [internal citation omitted]; 15 U.S.C. § 1692a(6)(F)(iii).)
Because Plaintiff admits that the loan did not go into
default until 2024, after Metropolitan Life was assigned the Deed of Trust in
2022 and SPS began servicing the loan in 2021 (Compl., ¶¶ 3, 17, 20, 27), the
complaint does not allege that SPS and Metropolitan Life are debt collectors
subject to the FDCPA.
Defendants contend that Plaintiff’s argument that
Defendants failed to request any information that would assist them in
determining whether Plaintiff was a successor in interest to the borrower does
not constitute a failure to maintain “internal” policies and procedures in
determining whether Plaintiff was her mother’s successor in interest.
As mentioned above, the complaint suggests that
Defendants lack internal polices and procedures for informing potential
successors in interest of documentation needed to identify and confirm
successors in interest. However, because
Defendants are not considered FDCPA “debt collectors,” Plaintiff cannot base
her wrongful foreclosure claim in violations of the FDCPA.
Plaintiff’s wrongful foreclosure claim also fails because
Plaintiff does not allege that she tendered the payoff amount for the mortgage
loan. Plaintiff merely alleges she is
excused from the tender requirement because SPS violated HBOR. However, the court sustained the demurrer to
both of Plaintiff’s HBOR causes of action.
Therefore, the complaint insufficiently establishes a
wrongful foreclosure claim because Plaintiff fails to allege Defendants are
debt collectors, Plaintiff fails to
allege she tendered the amount required to pay off the mortgage, and the claim
is derivative of Plaintiff’s failed HBOR causes of action.
Accordingly, Defendants’ demurrer to the Third Cause of
Action is sustained with leave to amend.
Fourth Cause of Action: Unfair Business
Practices, Violation of Bus. & Prof. Code, § 17200
Defendants demur to the Fourth Cause of Action for
failure to state facts sufficient to constitute a cause of action. Defendants argue that the claim fails because
it is derivative of Plaintiff’s failed first, second, and third causes of
action.
California’s Unfair Competition Law (UCL) prohibits
unlawful, unfair or fraudulent business practices. (Bus. & Prof. Code, § 17200, et
seq.) To assert a UCL claim, a plaintiff
must have suffered injury in fact and lost money or property as a result of the
unfair competition. (See Bus. &
Prof. Code, § 17204.) Unfair behavior
under the UCL is behavior that is “immoral, unethical, oppressive, unscrupulous
or substantially injurious to consumers.” (Bardin v. Daimlerchrysler Corp.
(2006) 136 Cal.App.4th 1255, 1260.) The complaint
alleges that SPS’s actions were unfair, unlawful, and fraudulent. (Compl., ¶ 51.) Plaintiff bases her UCL claim on SPS’s
alleged violation of the HBOR for failing to timely and fairly evaluate
Plaintiff for loan modification.
(Compl., ¶ 52.)
A plaintiff may plead a UCL violation under the
“unlawfulness” prong by pleading that a business practice violated a predicate
federal, state, or local law. (See Cel-Tech
Commc’ns, Inc. v. Los Angeles Cellular Telephone. Co. (1999) 20 Cal.4th
163, 180.) A business practice is
unlawful if it violates laws other than the UCL. (Farmers Ins. Exchange v. Superior Court
(1993) 2 Cal.4th 337, 383.) The
complaint must allege facts sufficient to show violation of the predicate law
and resulting harm. (People v. McKale
(1979) 25 Cal.3d 626, 635 [“Without supporting facts demonstrating the
illegality of a rule or regulation, an allegation that it is in violation of a
specific statute is purely conclusionary and insufficient to withstand
demurrer.”].)
Plaintiff bases her UCL claim on allegations that
Defendants violated the HBOR and violated FDCPA 12 C.F.R. §
1204.38(b)(1)(vi)(B), Defendants negligently made false representations
regarding Plaintiff’s ability to be deemed a successor in interest, and Defendants
failed to advise Plaintiff in writing that the Deed of Trust was assigned in
violation of 15 U.S.C. § 1641(g).
Plaintiff argues that she adequately pleads her UCL claim
because she alleges that she was wrongfully deprived of a proper and diligent
loan modification review and incurred late fees, penalties, and interest. Plaintiff asserts that she sufficiently pleads
fraudulent conduct because the complaint establishes that SPS committed “acts
of misrepresentation” that Plaintiff was reasonably under the impression that
she would be granted a good faith modification review of Plaintiff’s loan
modification application. Plaintiff
specifically alleges that SPS’s fraudulent misrepresentations included telling
Plaintiff they could not assist her because her name was not on the Deed of
Trust or mortgage even though Plaintiff told SPS she was her mother’s only
heir. (Compl., ¶ 53.) Plaintiff pleads unfair activity because SPS
negligently serviced the loan and blamed Plaintiff for actions that resulted in
prejudice to Plaintiff.
As an initial matter, Plaintiff cannot sustain a fraud
claim because she does not allege details required for bringing fraud claims
against a corporation. Fraud claims
against corporations must “allege the names of the persons who made the
allegedly fraudulent representations, their authority to speak, to whom they
spoke, what they said or wrote, and when it was said or written.” (Rattagan v. Uber Technologies, Inc. (2024)
17 Cal.5th 1, 40.)
Additionally, because the UCL claim is derivative of failed
causes of action, the complaint cannot maintain a UCL claim based on unfair,
unlawful, or fraudulent conduct.
Accordingly, Defendants’ demurrer to the Fourth Cause of
Action is sustained with leave to amend.
Fifth
Cause of Action: Negligence
Defendants demur to the Fifth Cause of Action for failure
to state facts sufficient to constitute a cause of action. Defendants argue that SPS does not owe
Plaintiff a duty of care in conducting foreclosure proceedings, which are
within its role as a secured lender. Furthermore, these provisions do not
impose a duty of care on the lender when dealing with a borrower, and Plaintiff
is not the borrower, making the alleged duty even more tenuous of a claim. Plaintiff’s negligence cause of action is
derivative of Plaintiff’s failed claims under the HBOR and the FDCPA.
To state a claim for negligence, the plaintiff must
establish that (1) defendant owed plaintiff a duty of care, (2) defendant
breached the duty, and (3) the breach proximately caused plaintiff’s damages or
injuries. (Lueras v. BAC Home Loans
Servicing, LP (2013) 221 Cal.App.4th 49, 62.)
Plaintiff alleges that SPS, who acted beyond a typical
lender, owed Plaintiff a duty of care to provide Plaintiff with adequate
procedures to allow Plaintiff to be deemed successors in interest and for
Plaintiff to avail himself of any potential foreclosure alternatives.
Defendants argue SPS did not owe Plaintiff a duty of care
in conducting foreclosure proceedings because foreclosure proceedings are
within SPS’s role as a secured lender when dealing with a borrower, and Plaintiff
is not a borrower.
“A financial institution does not owe a duty of care to a
borrower when the institution’s involvement in the loan transaction does not
exceed the scope of its conventional role as a mere lender of money.” (Nymark v. Heart Fed. Savings & Loan
Ass’n (1991) 231 Cal.App.3d 1089, 1096.)
However, liability arises when “the lender ‘actively participates’ in
the financed enterprise ‘beyond the domain of the usual money lender.’” (Id. at pp. 1096-98 [considering six
factors to determine the duty of care: “(1) the extent to which the transaction
was intended to affect the plaintiff, (2) the foreseeability of harm to the
plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4)
the closeness of the connection between the defendant's conduct and the injury
suffered, (5) the moral blame attached to the defendant’s conduct, and (6) the
policy of preventing future harm”].)
The court agrees that because Plaintiff fails to sufficiently
allege that she is a successor-in-interest, Plaintiff cannot establish she is a
“borrower” to whom SPS owed a duty.
Accordingly, Defendants’ demurrer to the Fifth Cause of
Action is sustained with leave to amend.
Sixth
Cause of Action: Cancellation of Written Instruments, Civ. Code, § 3412
Defendants demur to the Sixth Cause of Action for failure
to state facts sufficient to constitute a cause of action. Defendants argue that Plaintiff pleads
insufficient allegations to support the conclusory statement that the Notice of
Dead and Notice of Election is void.
Because this claim is derivative of Plaintiff’s other claims, it fails
for the same reasons.
Plaintiff opposes stating the complaint properly
establishes that Defendants were involved in the improper transfer of property
that took place in recording the Notice of Default and Notice of Sale. These recordings were intended to harm
Plaintiff, and Plaintiff suffered injuries because she lost her home. This harm was foreseeable and directly
violates California’s policy of preventing unnecessary and wrongful
foreclosures.
“To prevail on a claim to cancel an instrument, a
plaintiff must prove (1) the instrument is void or voidable due to, for
example, fraud; and (2) there is a reasonable apprehension of serious injury
including pecuniary loss or the prejudicial alteration of one’s position.” (Weeden
v. Hoffman (2021) 70 Cal.App.5th 269, 294 [internal quotation omitted];
Civ. Code, § 3412.) A “complaint must
state facts, not mere conclusions, showing the apparent validity of the
instrument designated, and point out the reason for assuring that it is
actually invalid.” (Ephraim v. Metro.
Trust Co. of Calif. (1946) 28 Cal.2d 824, 833.)
Plaintiff seeks cancellation of the Notice of Default recorded
on July 26, 2024 (Compl., ¶ 28.) and Notice of Trustee’s Sale recorded on October
29, 2024 (Compl., ¶ 30.). Plaintiff
argues that if these void instruments are left outstanding, they will cause
injury to Plaintiff because of Defendants’ violations under Civ. Code, §§
2923.5, 2924.9 and 12 C.F.R. § 1204.38.
Because Plaintiff bases the cancellation claim on Defendants’
alleged violations and Plaintiff’s failed causes of action, and Plaintiff fails
to sufficiently plead fraud based on misrepresentations, Plaintiff also fails
to establish a cancellation of a written instrument cause of action.
Accordingly, Defendants’ demurrer to the Sixth Cause of
Action is sustained with leave to amend.
CONCLUSION
Defendants’ demurrer to the complaint is sustained with
leave to amend.
Defendants Metropolitan Life Insurance Company and Select
Portfolio Servicing, Inc. to give notice.