Demurrer to 3rd Amended Complaint

Defendant Bank of America, N.A. (“BANA”) demurs to the 10th, 11th and 12th causes of action. BANA initially demurred to the 7th c/a but Plaintiffs’ opposition acknowledged that the 7th c/a was not alleged against BANA (BANA is not included in the complaint as a defendant on the 7th c/a), so the demurrer was withdrawn.

BANA demurs to Plaintiffs’ 10th cause of action for Quiet Title and 12th cause of action for Cancellation of Instruments on the ground that Plaintiffs failed to allege tender. Citing Yvanova v. New Century Mortgage Corp. (2016) 82 Cal.4th 919, Plaintiffs claim they are excused from the necessary prerequisite of tender because they are suing on an assignment which is void. Yvanova does not support Plaintiffs’ position. Rather, Yvanova suggests that the assignment is voidable at most. See also Saterbak v. JPMorgan Chase Bank, N.A. (2106) 245 Cal.App.4th 808, 815 (untimely assignment is “merely voidable.”); Rajamin v. Deutsche Bank Nat’l Trust Co. (2d Cir. 2014) 757 F.3d 79, 88-89; Yhudai v. Impac Funding Corporation (2016) 1 Cal.App.5th 1259 (untimely assignment is voidable, not void). Voidable assignments do not excuse tender.

As the Court explained in Yvanova: “When an assignment is merely voidable, the power to ratify or avoid the transaction lies solely with the parties to the assignment; the transaction is not void unless and until one of the parties take steps to make it so. A borrower who challenges a foreclosure on the ground that an assignment to the foreclosing party bore defects rendering it voidable could thus be said to assert an interest belonging solely to the parties to the assignment rather than to herself.” Yvanova, 62 Cal.4th at 936.

Because the assignment is, at most, voidable, and Plaintiffs fail to allege tender, they may not proceed on their 10th and 12th causes of action. Gomes v. Countrywide Home Loans (2011) 192 Cal.App.4th 1149; Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707; Aguilar v. Bocci (1974) 39 Cal.App.3d 475, 477.

BANA demurs to Plaintiffs’ 11th cause of action for Wrongful Foreclosure on the ground that BANA did not initiate the foreclosure which is the basis of Plaintiffs’ suit. Plaintiffs allege that Defendant Nationstar initiated foreclosure proceedings by recording a Notice of Default. Third Amended Complaint, ¶ 35. A wrongful foreclosure cause of action arises when a person or entity initiates a nonjudicial foreclosure but has no authority to do so. Yvanova, 62 Cal.4th at 929 and 935. See also Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062 (“To obtain the equitable set-aside of a trustee’s sale or maintain a wrongful foreclosure claim, a plaintiff must allege that (1) the defendants caused an illegal, fraudulent, or willfully oppressive sale of the property pursuant to a power of sale in a mortgage or deed of trust; (2) the plaintiff suffered prejudice or harm; and (3) the plaintiff tendered the amount of the secured indebtedness or was excused from tendering.”, citing Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112). Because BANA did not initiate the foreclosure which is the basis of Plaintiffs’ claim, Plaintiff cannot establish a necessary element of a wrongful foreclosure claim against BANA.

Plaintiffs have had several opportunities to allege claims of quiet title, wrongful foreclosure and cancellation of instruments against BANA but have not been able to successfully allege those claims. Plaintiffs offer no additional amendment which might cure the defects. Accordingly, BANA’s demurrers to Plaintiffs’ 10th, 11th and 12th causes of action are SUSTAINED WITHOUT LEAVE TO AMEND.

BANA to give notice.