Filed 4/29/20
                     CERTIFIED FOR PUBLICATION

       IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        FIRST APPELLATE DISTRICT

                              DIVISION THREE


YING HUANG et al.,
       Plaintiffs and Appellants,
                                            A152074
v.
WELLS FARGO BANK, N.A.,                     (Contra Costa County
                                            Super. Ct. No. MSC14-01696)
       Defendant and Respondent.


       In September 2014, Ying Huang and Koon Huat Low (the Huangs) filed
an action against Wells Fargo Bank, N.A. (Wells Fargo) to quiet title to a
home the Huangs bought in February 2009. The trial court granted
summary judgment against the Huangs. The court ruled their complaint was
time-barred because in August 2009, more than three years before they filed
suit, they were aware of a recorded notice of trustee’s sale posted on the door
of their property scheduling its sale to satisfy a delinquent loan secured by a
deed of trust in favor of Wells Fargo as beneficiary.
       The Huangs contend the notice of sale did not disturb or otherwise
interfere with their possession sufficiently to start the running of the statute
of limitations. We agree. After receiving the notice of sale, the Huangs
immediately provided it to their title insurer to resolve any dispute with
Wells Fargo. The trustee’s sale did not take place as scheduled, and the
Huangs heard nothing substantive about the matter for several years
thereafter. All the while, the Huangs continuously lived in and possessed the



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home. Under these circumstances, we conclude the statute of limitations did
not run and the trial court improperly granted summary judgment for Wells
Fargo. We reverse.
                               BACKGROUND
      This case concerns a home in Lafayette, California (the Property). In
2000, the prior owners of the Property, the Fasslers1, obtained a home equity
line of credit from Wells Fargo in the amount of $100,000 (the First Wells
LOC) secured by a short form deed of trust recorded against the Property in
first position (First Wells DOT).
      In June 2003, the Fasslers secured a home loan from World Savings
Bank, FSB (World Savings) in the amount of $530,000. This loan was also
secured by a deed of trust (the World Savings DOT). When the loan was
made, Wells Fargo agreed to subordinate the First Wells DOT to the World
Savings DOT. As a result, the First Wells DOT became subject to and lower
priority than the World Savings DOT.
      In December 2003, the Fasslers obtained another home equity line of
credit with Wells Fargo in the amount of $72,000 (Second Wells LOC). This
line of credit was also secured by a short form deed of trust recorded against
the Property (Second Wells DOT).
      In 2004, the Fasslers refinanced all three loans with American
Wholesale Lender resulting in a single $682,500 loan secured by a deed of
trust (the Countrywide Loan).2
      While the parties dispute many details of the 2004 refinancing, there is
no dispute that the Countrywide Loan was used to pay off the 2003 World



1     Heinz Fassler and Bitten Hansen were the prior owners. They are not
parties to this action.
2     American Wholesale Lender is also known as Countrywide.

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Savings Loan and to fully pay down and eliminate the balances owed Wells
Fargo on both the lines of credit. Wells Fargo then closed the First Wells and
Second Wells LOCs in December 2004 but reopened them at the Fasslers’
request the following month. Wells Fargo never issued or recorded any
reconveyance of the First Wells or Second Wells DOTs.
      Between January 2005 and March 2008, the Fasslers drew upon both
lines of credit. As of February 2016, the outstanding balances on the First
Wells LOC and Second Wells LOC were $123,664.77 and $100,611.16,
respectively.
      In April 2007, the Fasslers refinanced the Countrywide Loan with a $1
million secured loan from Washington Mutual Bank, FA (Washington
Mutual). The Fasslers eventually defaulted on the loan, and Washington
Mutual foreclosed. In November 2008, LaSalle Bank NA (LaSalle) obtained
title to the Property at the auction conducted in Washington Mutual’s
nonjudicial foreclosure.
      The following month, Wells Fargo recorded a notice of default and
election to sell the Property under the power of sale in the First Wells DOT.
      The Huangs purchased the Property from Bank of America, NA, the
successor to LaSalle in February 2009. They were issued a policy of title
insurance from Fidelity National Title Company (Fidelity).
      On August 24, 2009, Wells Fargo recorded its notice of trustee’s sale.
The Huangs received the notice when it was posted on the door of the
Property that month. The notice stated that the trustee under the First
Wells DOT was to sell the Property “AT PUBLIC AUCTION TO THE
HIGHEST BIDDER FOR CASH” due to a default. It further stated,
“UNLESS YOU TAKE ACTION TO PROTECT YOUR PROPERTY, IT MAY




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BE SOLD AT A PUBLIC SALE.” The sale was scheduled for September 14,
2009. The Huangs immediately forwarded the document to Fidelity.
      Fidelity informed the Huangs it was going to conduct an investigation
and contacted Wells Fargo to resolve the issue. The trustee’s sale did not
proceed as scheduled. In the months following, Fidelity sent the Huangs
periodic updates to identify new points of contact and to state the
investigation was ongoing, but they never received any communication from
Fidelity telling them there was a resolution of the dispute with Wells Fargo.
Between July 2010 and May 2014, the Huangs heard nothing further and
assumed the matter had been resolved. In May 2014, nearly five years after
the Huangs gave Fidelity the notice of trustee’s sale, they were told that
Wells Fargo claimed it had two deeds of trust secured by the Property and
was again threatening to foreclose.
      In September 2014, the Huangs filed suit against Wells Fargo to quiet
title to the Property. The operative first amended complaint asserted causes
of action for quiet title, declaratory relief, and breach of duty to discharge a
secured obligation under Civil Code section 2941. In June 2017, the trial
court granted Wells Fargo’s motion for summary judgment, concluding all
three causes of action were time-barred.
      The Huangs now appeal the summary judgment. This court granted
their petition for a writ of supersedeas. Our order stayed enforcement of the
trial court’s summary judgment and any nonjudicial foreclosure sale of the
Property, including a sale that was scheduled for November 2018.3




3     We also required the Huangs to post a bond as a condition of the stay.
In January 2019, the Huangs informed us they had done so.

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                                 DISCUSSION
                             Standard of Review
      A motion for summary judgment “shall be granted if all the papers
submitted show that there is no triable issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law.” (Code Civ.
Proc., § 437c, subd. (c).) “A moving defendant has met its burden of showing
that a cause of action has no merit by establishing that one or more elements
of a cause of action cannot be established or that there is a complete defense.”
(Gundogdu v. King Mai, Inc. (2009) 171 Cal.App.4th 310, 313 (Gundogdu).)
Once the defendant has made such a showing, the burden shifts to the
plaintiff to show that a triable issue of one or more material facts exist as to
that cause of action or as to a defense to the cause of action. (Aguilar v.
Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.) “We independently review
an order granting summary judgment, viewing the evidence in the light most
favorable to the nonmoving party.” (Gundogdu, at p. 313.)
                    Statute of Limitations (Quiet Title)
      “It long has been the law that whether a statute of limitations bars an
action to quiet title may turn on whether the plaintiff is in undisturbed
possession of the land.” (Mayer v. L&B Real Estate (2008) 43 Cal.4th 1231,
1237 (Mayer).) In some cases, a specific statute requires that a complaint
seeking to quiet title be brought within a specified period of time. (See e.g.,
Sears v. County of Calaveras (1955) 45 Cal.2d 518, 521–522; Mayer, at
p. 1238 [challenge to sale for defaulted property taxes]; Kaufman v. Gross &
Co. (1979) 23 Cal.3d 750, 754 [challenge to sale for failure to pay
assessment].) But there is no statute of limitations that generally governs all
actions to quiet title. (Muktarian v. Barmby (1965) 63 Cal.2d 558, 560
(Muktarian).) Instead, courts look to the underlying theory of relief to



                                        5
determine the applicable period of limitations. (Ibid.) An inquiry into the
underlying theory requires the court to identify the nature (i.e., the
“gravamen”) of the cause of action. (Hensler v. City of Glendale (1994) 8
Cal.4th 1, 22–23.) We look to the nature of the right asserted, not the form of
action or relief sought. (Id. at p. 23.)
      The Huangs’ complaint seeks to remove a cloud on their title caused by
the status of the deeds of trust as encumbrances due to some kind of fraud or
mistake. Accordingly, the trial court applied the three-year statute of
limitations in Code of Civil Procedure section 338, subdivision (d) to the quiet
title claim. No party argues that a different limitations period should apply.
But the parties dispute when the Huangs’ cause of action for quiet title
accrued, and the statute of limitations began to run.
      Wells Fargo argues the limitations period began no later than August
2009 when the Huangs learned of the notice of sale posted on their door. It
says the notice constituted the assertion of a hostile claim against the
Huangs’ title, with the sale of their property just weeks away. But the sale
did not occur. In fact, nothing of moment appears to have happened for more
than four years.
      “[Q]uiet title actions have special rules for when the limitations period
begins to run.” (Salazar v. Thomas (2015) 236 Cal.App.4th 467, 477
(Salazar).) “ ‘ “[A]s a general rule, the statute of limitations [for a quiet title
action] does not run against one in possession of land.” ’ [Citation.] Part of
the rationale for this special rule for quiet title actions is an unwillingness to
convert a statute of limitations into a statute that works a forfeiture of
property rights on the person holding the most obvious and important
property right–namely, possession.” (Ibid.) Even when a party in possession
knows there is a potential adverse claim, “there is no reason to put him to the



                                           6
expense and inconvenience of litigation until such a claim is pressed against
him.” (Muktarian, supra, 63 Cal.2d at pp. 560–561.) “Thus, mere notice of
an adverse claim is not enough to commence the owner’s statute of
limitations.” (Salazar, at p. 478.)
      The cases are uniform in holding that more than a threat to one’s title
is required to commence the running of the limitations period against an
owner in possession. But the force and effect of possession “is not absolute.
It is subject to a qualification that the California Supreme Court has
described in different ways over the years. Recently, the court stated: ‘It has
long been the law that whether a statute of limitations bars an action to quiet
title may turn on whether the plaintiff is in undisturbed possession of the
land.’ ” (Salazar, supra, 236 Cal.App.4th at p. 477.) In determining whether
possession of land has been “disturbed,” courts have looked to: “(1) when were
plaintiffs no longer owners ‘in exclusive and undisputed possession’ of the
land [citation]; (2) when was defendants’ adverse ‘claim . . . pressed against’
plaintiffs [citation]; or (3) when was defendants' hostile claim ‘asserted in
some manner to jeopardize the superior title’ held by plaintiffs [citation].”
(Id. at p. 478.)
      Here, there seems to be no disagreement that the Huangs have been at
all times in exclusive possession of the Property. The Huangs also contend
their possession was always undisturbed. On this issue, Salazar, supra, 236
Cal.App.4th 467, is particularly instructive. The Salazars owned property
encumbered by a forged deed of trust used to secure a loan. (Id. at pp. 472–
473.) In March 2005, they received a notice of default and election to sell
under the deed of trust, alerting them payments were due to cure the default.
(Id. at p. 473.) Believing one of their sons forged the loan documents, the
Salazars made the payments and entered a forbearance agreement with the



                                        7
lender setting up a payment schedule. (Id. at p. 474.) They were making
payments when they filed suit in January 2012 to quiet title to their property
and invalidate the deed of trust. (Ibid.) The defendants argued the quiet
title action was time-barred based on the March 2005 notice of default. (Id.
at p. 479.) The Court of Appeal disagreed. (Id. at pp. 480–482.) Establishing
that “ ‘disputed possession’ is the equivalent of having the validity of one’s
occupancy, dominion or control over the property called into question,” the
court concluded the notice of default did not dispute the Salazars’ possession.
(Id. at p. 481.) The court observed that the notices of default would have
informed the Salazars of an adverse claim or cloud on their title to the
property, but that was not the same as disputing possession. (Ibid.) The
court further explained: “The notices of default simply stated that the
borrowers were in default on their payment obligations and, if the default
was not timely cured, their property may be sold. The notices of default did
not call into question the validity of [the Salazars’] control of the property by
claiming [their] possession was improper or illegal. Also, the notices of
default did not indirectly question [the Salazars’] control of the property by
asserting [the] defendants were entitled to possess [it]. Rather, the notices of
default presupposed that [the Salazars] were the rightful owners of the
[property] and their ownership interest gave them an incentive to pay the
amount of the indebtedness that was in default.” (Ibid.) The court therefore
concluded the notice of default did not sufficiently dispute the Salazars’
possession to trigger the limitations period. (Ibid.)
      As in Salazar, the notice of trustee’s sale posted on the Huangs’
property did not disturb their possession and start the running of the statute
of limitations. The undisputed facts show the Huangs took possession of the
Property in February 2009, and Wells Fargo recorded a notice of trustee’s



                                        8
sale against the Property in August 2009. The notice advised them,
“UNLESS YOU TAKE ACTION TO PROTECT YOUR PROPERTY, IT MAY
BE SOLD AT A PUBLIC SALE.” The sale of the property at that point was
not definite, and the Huangs could take action to prevent it. In this sense,
the threat to their title resembled the threat in Salazar. Like the notice of
default analyzed in Salazar, the notice of trustee’s sale did not call into
question the validity of the Huangs’ control or possession of the Property,
only that their ownership would require them to pay the amount in default.
(See Salazar, 236 Cal.App.4th at p. 481.)
      Per the instruction on the notice, the Huangs took action. They
immediately transmitted the document to Fidelity. Fidelity told them it
would investigate and handle the matter, and it contacted Wells Fargo to
resolve the issue. The trustee’s sale, scheduled for September 14, 2009, did
not go forward. In the months following, Fidelity sent the Huangs periodic
updates to identify new points of contact and to state the investigation was
ongoing. But for several years, from July 2010 through May 2014, the
Huangs heard nothing from Fidelity about Wells Fargo’s claims. Throughout
that time, they lived in the Property and their possession was undisturbed.
      In these circumstances, the notice of trustee’s sale was not sufficient to
commence the limitations period. Once the Huangs transmitted the notice to
Fidelity which led to the apparent postponement of the sale, no claim was
being “pressed against” them that “put [them] to the expense and
inconvenience of litigation.” (Muktarian, supra, 63 Cal.2d at pp. 560–561.)
The matter was in the hands of their title insurer, and the Huangs should not
be expected to independently sue to protect their title. Their continuous
residence in the house for several years without any indication in the record
that Wells Fargo rescheduled the trustee’s sale or took any adverse action



                                        9
against them only underscores their reasonable reliance that matters were
being addressed by Fidelity.
      Wells Fargo contends otherwise. It explains that unlike the notice of
default at issue in Salazar, a notice of sale “does much more. It notifies the
world of imminent action that will jeopardize the rights of those claiming an
interest in the real property,” which is “more than just a cloud on title.”4 We
do not question that in some cases, a notice of sale could reasonably challenge
a property owner’s “occupancy, dominion, or control” over property. (Salazar,
supra, 236 Cal.App.4th at p. 481.) But here any challenge to their dominion
was eliminated once the Huangs, pursuant to the advisement on the notice,
took action to prevent the sale and the sale was indefinitely postponed. In
fact, as of September 14, 2010, one year from the date of sale in the original
notice, Wells Fargo was required to issue a new notice if it wished to proceed
with a sale of the property. (California Civil Code section 2924g, subd. (c).)5
In light of the facts that the “imminent sale” never happened and the Huangs
remained in exclusive possession of the house for several years before Wells




4      Wells Fargo further contends that summary judgment warrants
affirmance for the independent reason that the Huangs have no basis to quiet
title to the First and Second Wells DOTs, which are senior to the Huangs’
interest in the Property. While Wells Fargo set forth an abbreviated version
of this argument in its summary judgment motion, the trial court did not rule
on these asserted grounds when granting summary judgment. It should be
for the trial court to consider these contentions in the first instance on
remand.
5     For this reason, it is also possible that the limitations period was
equitably tolled for the three years that Wells Fargo could not proceed
without issuance of a new notice of sale. (Cf. Bollinger v. National Fire Ins.
Company of Hartford, Connecticut (1944) 25 Cal.2d 399, 411.) As this
argument was not advanced in the briefs, we mention it but do not decide the
question.

                                       10
Fargo renewed its threat to foreclose, the notice of trustee’s sale did not
disturb their possession and commence the running of the limitations period.
      However, it’s worth observing that the doctrine of laches remains an
available defense to a complaint in situations where the statute of limitations
has not run and the defendant will suffer prejudice if the action goes forward.
(See Transwestern Pipeline Co. v. Monsanto Co. (1996) 46 Cal.App.4th 502,
520 [“Laches is an equitable safeguard which operates independently of the
statute of limitations.”]; [asserting laches as affirmative defense in answer].)
In a quiet title action, “the party in possession runs the risk that the doctrine
of laches will bar his action to quiet title if his delay in bringing action has
prejudiced the claimant.” (Muktarian, supra, 63 Cal.2d at p. 561.)
      In light of our conclusion that the Huangs’ complaint was timely filed,
we need not address their remaining arguments.
                                 DISPOSITION
       The stay of the trial court’s summary judgment filed October 25, 2018,
is dissolved, and the undertaking posted by appellants is exonerated. The
summary judgment is reversed and this case is remanded for further
proceedings consistent with this opinion.




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                                            ______________________________
                                            Siggins, P.J.




We concur:


______________________________
Petrou, J.




______________________________
Jackson, J.




Huang v. Wells Fargo Bank, N.A., A152074




                                       12
Superior Court of Contra Costa County, Honorable Edward George Weil.


J. Wesley Smith, Dominic V. Signorotti, Buchman Provine Brothers Smith
LLP for Appellant.


Robert Collings Little, Robert A. Bailey, Robin Carl Campbell, Benjamin
Gary Diehl, Anglin Flewelling Rasmussen Campbell & Trytten, LLP for
Respondent.




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