Filed 6/23/16 Torres v. U.S. Bank Nat. Assn. CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE


JULIO C. TORRES et al.,

     Plaintiffs and Appellants,                                        G051406

         v.                                                            (Super. Ct. No. 30-2013-00681084)

U.S. BANK NATIONAL ASSOCIATION,                                        OPINION
as Trustee, etc., et al.,

     Defendants and Respondents.



                   Appeal from a judgment of the Superior Court of Orange County, Linda S.
Marks, Judge. Affirmed.
                   Law Office of Ronald H. Freshman and Ronald H. Freshman for Plaintiffs
and Appellants.
                   Houser & Allison, Robert W. Norman and Emile K. Edling for Defendants
and Respondents.
                                          *                  *                  *
              In borrowing $1 million to purchase their home, plaintiffs and appellants
Julio C. Torres and Norma Giselle Torres (collectively, Torreses) executed a promissory
note and deed of trust granting their lender a security interest in their residence. The
Torreses later declared bankruptcy and fell behind in their loan payments, but continued
to reside in their home under two security retention agreements in which the loan servicer
agreed not to foreclose if the Torreses timely made the loan payments specified in the
agreements. The Torreses alleged they are current on their payments, they continue to
reside in their home, and no foreclosure proceedings are pending against their home.
              The Torreses nonetheless filed this action seeking to cancel the note, the
deed of trust, and all documents recorded against their home based on those instruments.
They also seek to recover the payments they have made on the loan and approximately
$13 million in compensatory and punitive damages. The Torreses base their causes of
action on the claim the note, the deed of trust, and an assignment of the deed of trust to a
securitized mortgage investment trust were void, and therefore the defendants1 had no
rights or interests in the loan or the Torreses’ home.
              According to the Torreses, Defendants damaged them and clouded their
title by recording numerous documents against the Torreses’ home without authority to
do so, including two notices of default and election to sell, which the Torreses
acknowledge have been rescinded. The Torreses alleged the note and deed of trust were
void because they misidentified the lender that provided the funds for the Torreses’ loan,
although the Torreses do not claim they have been subjected to competing demands for
loan payments or that they did not know who to pay. The Torreses alleged the


       1
               Defendants and respondents are (1) U.S. Bank National Association, as
trustee for Mastr Adjustable Rate Mortgages Trust 2007-1, Mortgage Pass-Through
Certificates, Series 2007-1, (2) Power Default Services, Inc., (3) Homeward Residential,
Inc., (4) Mortgage Electronic Registration Systems, Inc., and (4) Ocwen Loan Servicing,
LLC (collectively, Defendants).


                                              2
assignment of the trust deed was void because it was made after the investment trust had
closed, and therefore the trustee exceeded its authority by accepting the assignment.
              The trial court dismissed the Torreses’ complaint after sustaining
Defendants’ demurrer without leave to amend. We affirm. The Torreses forfeited their
claim the note and the trust deed were void based on the purported misidentification of
the lender because they failed to raise that theory in their opening brief. Regardless, the
statutory authority to which the Torreses make passing reference in their reply does not
establish the alleged misidentification rendered the note and trust deed void.
              We also conclude the Torreses lacked standing to challenge the assignment
of the trust deed because the defect they asserted merely would render the assignment
voidable. Under the New York law that governs the investment trust, a trust beneficiary
may ratify any act of a trustee that exceeds the trustee’s authority, and thereby validate an
allegedly unenforceable act or agreement, such as the assignment. Moreover, even if the
alleged defect rendered the assignment void and incapable of being ratified, the Torreses
still would lack standing because there has been no foreclosure on their home. Borrowers
such as the Torreses may challenge the authority of an entity foreclosing on their home
only after a foreclosure has occurred because allowing a preforeclosure challenge
conflicts with the nonjudicial foreclosure statutory scheme the Legislature established as
a quick and efficient means of enforcing real property security interests. Case law
establishes that a homeowner may not compel an entity to establish its authority in court
before it conducts a nonjudicial foreclosure.

                                                I

                                   LEGAL BACKGROUND

A.     Trust Deeds, Nonjudicial Foreclosures, and the Mortgage Securitization Process
              “A deed of trust to real property acting as security for a loan typically has
three parties: the trustor (borrower), the beneficiary (lender), and the trustee. ‘The


                                                3
trustee holds a power of sale. If the debtor defaults on the loan, the beneficiary may
demand that the trustee conduct a nonjudicial foreclosure sale.’ [Citation.] The
nonjudicial foreclosure system is designed to provide the lender-beneficiary with an
inexpensive and efficient remedy against a defaulting borrower, while protecting the
borrower from wrongful loss of the property and ensuring that a properly conducted sale
is final between the parties and conclusive as to a bona fide purchaser.” (Yvanova v.
New Century Mortgage Corp. (2016) 62 Cal.4th 919, 926 (Yvanova).)
              “The trustee starts the nonjudicial foreclosure process by recording a notice
of default and election to sell. [Citation.] After a three-month waiting period, and at
least 20 days before the scheduled sale, the trustee may publish, post, and record a notice
of sale. [Citations.] If the sale is not postponed and the borrower does not exercise his or
her rights of reinstatement or redemption, the property is sold at auction to the highest
bidder. [Citations.] Generally speaking, the foreclosure sale extinguishes the borrower’s
debt; the lender may recover no deficiency.” (Yvanova, supra, 62 Cal.4th at p. 927.)
              “The trustee of a deed of trust is not a true trustee with fiduciary
obligations, but acts merely as an agent for the borrower-trustor and lender-beneficiary.
[Citations.] While it is the trustee who formally initiates the nonjudicial foreclosure, by
recording first a notice of default and then a notice of sale, the trustee may take these
steps only at the direction of the person or entity that currently holds the note and the
beneficial interest under the deed of trust—the original beneficiary or its assignee—or
that entity’s agent.” (Yvanova, supra, 62 Cal.4th at p. 927.)
              “[A] borrower can generally raise no objection to assignment of the note
and deed of trust. A promissory note is a negotiable instrument the lender may sell
without notice to the borrower. [Citation.] The deed of trust, moreover, is inseparable
from the note it secures, and follows it even without a separate assignment. [Citations.]
. . . [¶] A deed of trust may thus be assigned one or multiple times over the life of the
loan it secures. But if the borrower defaults on the loan, only the current beneficiary may

                                              4
direct the trustee to undertake the nonjudicial foreclosure process. ‘[O]nly the “true
owner” or “beneficial holder” of a Deed of Trust can bring to completion a nonjudicial
foreclosure under California law.’” (Yvanova, supra, 62 Cal.4th at pp. 927-928.)
              “A beneficiary or trustee under a deed of trust who conducts an illegal,
fraudulent or willfully oppressive sale of property may be liable to the borrower for
wrongful foreclosure. [Citations.] A foreclosure initiated by one with no authority to do
so is wrongful for purposes of such an action.” (Yvanova, supra, 62 Cal.4th at p. 929.)
              The ready transferability of promissory notes and deeds of trusts led banks
to create securitized mortgage investment trusts to raise funds for making new mortgages.
Through the securitization process “‘a mortgage lender sells pools of mortgages into
trusts created to receive the stream of interest and principal payments from the mortgage
borrowers. The right to receive trust income is parceled into certificates and sold to
investors, called certificateholders. The trustee hires a mortgage servicer to administer
the mortgages by enforcing the mortgage terms and administering the payments. The
terms of the securitization trusts as well as the rights, duties, and obligations of the
trustee, seller, and servicer are set forth in a Pooling and Servicing Agreement.’”
(Yvanova, supra, 62 Cal.4th at p. 930, fn. 5; see Glaski v. Bank of America (2013)
218 Cal.App.4th 1079, 1082 & fn. 1 (Glaski).)
              Mortgage Electronic Registration Systems, Inc. (MERS) “was formed by a
consortium of residential mortgage lenders and investors to streamline the transfer of
mortgage loans and thereby facilitate their securitization.” (Yvanova, supra, 62 Cal.4th at
p. 931, fn. 7.) “‘[It] administers a national registry of real estate debt interest
transactions. Members of the MERS System assign limited interests in the real property
to MERS, which is listed as a grantee in the official records of local governments, but the
members retain the promissory notes and mortgage servicing rights. The notes may
thereafter be transferred among members without requiring recordation in the public
records. [Citation.] [¶] Ordinarily, the owner of a promissory note secured by a deed of

                                               5
trust is designated as the beneficiary of the deed of trust. [Citation.] Under the MERS
System, however, MERS is designated as the beneficiary in deeds of trust, acting as
“nominee” for the lender, and granted the authority to exercise legal rights of the
lender.’” (Saterbak v. JPMorgan Chase Bank (2016) 245 Cal.App.4th 808, 816, fn. 6
(Saterbak).) “When a loan is assigned to another MERS member, MERS can execute the
transfer by amending its electronic database. When the loan is assigned to a nonmember,
MERS executes the assignment and ends its involvement.” (Yvanova, at p. 931, fn. 7.)

                                             II

                           FACTS AND PROCEDURAL HISTORY2

              In 2006, Julio C. Torres executed an adjustable rate note and deed of trust
to borrow more than $1,030,000 toward the purchase of a home in Laguna Niguel,
California (Property).3 The trust deed identified the Torreses as the borrowers and
       2
               The Torreses’ opening brief is “seriously defective” because it failed to
provide an adequate “summary of the significant facts” as required by California Rules of
Court, rule 8.204(a)(2)(4). (Lafayette Morehouse, Inc. v. Chronicle Publishing Co.
(1995) 37 Cal.App.4th 855, 868-869.) The brief included a section entitled “Summary of
Significant Facts of Matters on the Record,” but that section did not summarize the
allegations of the Torreses’ complaint, explain each party’s role, identify the loan’s or
property’s status, or otherwise provide any details necessary to understand the basis for
the Torreses’ claims or the trial court’s ruling. Instead, the Torreses provided a litany of
conclusions on why the court allegedly erred without providing any of the facts or
allegations needed to support those conclusions. We are left to determine the essential
facts and allegations from our independent review of the 56-page complaint and its
approximately 850 pages of exhibits. The Torreses therefore waived any objection that
we have overlooked any specific allegations required to understand or support their
claims. (William Jefferson & Co., Inc. v. Orange County Assessment Appeals Bd. No. 2
(2014) 228 Cal.App.4th 1, 6, fn. 2.)
       3
              Julio C. Torres is a married man who purchased the Property as his sole and
separate property, but one month later he conveyed the Property to Julio C. Torres and
Norma Giselle Torres, as trustees of the 2006 La Esmeralda Revocable Family Trust,
dated November 10, 2006. The Torreses jointly filed this action and make no effort to
distinguish their interests in the Property. We therefore refer to both of the Torreses as
the borrowers on the loan.

                                             6
trustors, California Title Company as the trustee, and American Home Mortgage, “a
[c]orporation organized and existing under the laws of the State of New York,” as the
“Lender.” It stated, “MERS is a separate corporation that is acting solely as a nominee
for Lender and Lender’s successors and assigns. MERS is the beneficiary under this
Security Instrument.” (Boldface omitted.) The trust deed granted the trustee the power
to sell the Property if the Torreses defaulted on the loan, and also provided the note and
trust deed could be sold “one or more times without prior notice to [the Torreses].”
American Home Mortgage Servicing, Inc. (AHM Servicing) served as the original loan
servicer and later became known as Homeward Residential, Inc. (Homeward).
              Sometime after they purchased the Property, the Torreses filed for
bankruptcy, and in July 2008, they received an order discharging their debts under
Chapter 7 of the United States Bankruptcy Code. A few months later, they executed a
security retention agreement acknowledging their bankruptcy discharge prevented
AHM Servicing from enforcing the loan against them individually, but did not prevent
AHM Servicing from exercising its right to foreclose on the Property under the trust
deed. Under this agreement, AHM Servicing agreed not to foreclose on the Property if
the Torreses remained current on their loan payments as designated in the agreement.
              In November 2010, Power Default Services, Inc. (Power Default), through
its agent T.D. Service Company, recorded a notice of default and election to sell,
informing the Torreses they were in default under the loan and Power Default would
conduct a nonjudicial foreclosure sale if they did not timely cure the default. The notice
explained Power Default was “either the original Trustee, the duly appointed substituted
Trustee, or acting as agent for the Trustee or Beneficiary under the . . . Deed of Trust.” In
January 2011, Power Default recorded a rescission notice, cancelling the default notice.
              In late June 2011, MERS recorded a notice that it had assigned the
Torreses’ trust deed to U.S. Bank National Association (US Bank), as trustee for a
New York securitized mortgage investment trust entitled “Mastr Adjustable Rate

                                             7
Mortgages Trust 2007-1, Mortgage Pass-Through Certificates, Series 2007-1” (Trust). In
late June, Power Default filed a new notice of default and election to sell, notifying the
Torreses they again were in default and the Property would be sold at a nonjudicial
foreclosure sale if they did not timely cure the default. In July 2011, U.S. Bank recorded
a document substituting Power Default for California Title Company as the trustee under
the deed of trust. This substitution stated its effective date was June 15, 2011.
              In October 2011, Power Default recorded a rescission notice, canceling the
second default notice. One month later, the Torreses executed a second security retention
agreement, again acknowledging AHM Servicing’s right to foreclose on the Property
based on the deed of trust, and also acknowledging their failure to make several payments
on the loan during 2011. Under this agreement, AHM Servicing agreed to forebear
foreclosing on the Property if the Torreses made the modified loan payments described in
the agreement. In February 2013, Homeward sent a letter notifying the Torreses Ocwen
Loan Servicing, LLC (Ocwen) was taking over as the servicer on their loan.
              Although the Torreses alleged they are current on all payments, they
continue to live on the Property, and no foreclosure proceedings are pending, they filed
this action for damages and to clear their title to the Property. The operative second
amended complaint named US Bank, Power Default, Homeward, MERS, and Ocwen as
defendants, and alleged claims for (1) negligent misrepresentation; (2) quasi-contract;
(3) unfair business practices (Bus. & Prof. Code, § 17200, et seq.); (4) declaratory relief
to cancel instruments (Code Civ. Proc, § 1060; Civ. Code, § 3412); and (5) quiet title.
The Torreses’ complaint sought $320,000 as restitution for the payments they made to
Homeward and Ocwen as the loan’s servicers, more than $4 million in damages for the
diminution in the Property’s value caused by the various documents Defendants recorded
against the Property, punitive damages of nearly $9 million, an order quieting title to the
Property in the Torreses and against all Defendants, and a judgment cancelling the
adjustable rate note, the deed of trust, both default notices, the assignment of the trust

                                              8
deed, the substitution of trustee, and “all instrument(s) or documents recorded and
unrecorded, which could be construed as constituting a break in or cloud on [the
Torreses’] title to the . . . Property.”
               The Torreses base their causes of action on the allegations the note, the
deed of trust, and the assignment of the deed of trust were void ab initio, and therefore
Defendants had no right to receive loan payments, no security interest in the Property,
and no authority to commence nonjudicial foreclosure proceedings or record any
document against the Property. According to the Torreses, the note and deed of trust
were void because they identified American Home Mortgage as the “Lender,” but
American Home Mortgage was a fictitious entity that did not exist and was not the entity
that advanced the money used to fund the Torreses’ loan. Because the note and deed of
trust were void ab initio, the Torreses alleged the loan they received to purchase the
Property was an unsecured obligation discharged in their bankruptcy, and the documents
Defendants recorded against the Property based on the note and the trust deed were
unauthorized clouds the Torreses have the right to remove from their title.
               The Torreses also alleged MERS’s assignment of the trust deed to
US Bank, and the documents recorded against the Property based on that assignment,
were void because the Trust was governed by New York law, which declares void any
action by a trustee that contravenes a trust’s express terms. According to the Torreses,
the Trust’s terms stated that the Trust closed in January 2007, and no further notes, deeds
of trust, or other assets could be transferred into the Trust after that date, but US Bank, as
the Trust’s trustee, accepted MERS’s assignment of the deed of trust in mid-2011.
               Defendants demurred to the second amended complaint, contending the
entire complaint and each individual cause of action failed to allege facts sufficient to
state a claim. The trial court agreed and sustained the demurrer without leave to amend.
The court concluded the Torreses lacked standing to challenge MERS’s assignment to
US Bank because the Torreses were not parties to the Trust, and therefore could not

                                              9
challenge any alleged violation of the Trust’s terms. Because the Torreses based their
entire case on the invalid assignment, the court determined all causes of action failed to
state a claim. The court’s ruling did not expressly address the Torreses’ theory the note
and deed of trust were void.
              The court also concluded (1) the negligent misrepresentation claim failed
because the Torreses did not allege facts showing Defendants owed a duty to disclose any
additional information or that the alleged misrepresentations harmed the Torreses; (2) the
unjust enrichment claim failed because the Torreses did not allege facts showing the
underlying obligation was invalid and therefore none of the payments the Torreses made
unjustly enriched Defendants; (3) the unfair competition claim failed because the
Torreses did not allege Defendants violated any statute providing a private right of
action; (4) the declaratory relief cause of action failed because it had “crystallized” into
the other four causes of action; and (5) the quiet title claim failed because the Torreses
did not allege they tendered the amount needed to reinstate or pay off the loan.
              After the court entered judgment, this appeal followed.

                                              III

                                        DISCUSSION

A.     Standard of Review and the Torreses’ Burden on Appeal
              “We review the ruling sustaining the demurrer de novo, exercising
independent judgment as to whether the complaint states a cause of action as a matter of
law.” (Kan v. Guild Mortgage Co. (2014) 230 Cal.App.4th 736, 740 (Kan).) “‘[W]e give
the complaint a reasonable interpretation, reading it as a whole and its parts in their
context. [Citation.] Further, we treat the demurrer as admitting all material facts
properly pleaded, but do not assume the truth of contentions, deductions or conclusions
of law.’” (Glaski, supra, 218 Cal.App.4th at p. 1090.)



                                              10
              “The allegations that we accept as true necessarily include the contents of
any exhibits attached to the complaint, and in the event of a conflict between the pleading
and an exhibit, the facts contained in the exhibit take precedence over and supersede any
inconsistent or contrary allegations in the pleading.” (Jibilian v. Franchise Tax Bd.
(2006) 136 Cal.App.4th 862, 864 & fn. 1; see Glaski, supra, 218 Cal.App.4th at p. 1090.)
We also consider facts that are properly subject to judicial notice, and give those facts
precedence over inconsistent or contradictory facts alleged in the complaint.4 (Hill v.
Roll International Corp. (2011) 195 Cal.App.4th 1295, 1300.)
              Although we review the complaint de novo, “‘[t]he plaintiff has the burden
of showing that the facts pleaded are sufficient to establish every element of the cause of
action and overcoming all of the legal grounds on which the trial court sustained the
demurrer, and if the defendant negates any essential element, we will affirm the order
sustaining the demurrer as to the cause of action. [Citation.] We will affirm if there is
any ground on which the demurrer can properly be sustained, whether or not the trial
court relied on proper grounds or the defendant asserted a proper ground in the trial court
proceedings.’” (Rossberg v. Bank of America (2013) 219 Cal.App.4th 1481, 1490-1491.)
Indeed, it is the trial court’s ruling we review, not its reasons or rationale. (Kan, supra,
230 Cal.App.4th at p. 740.)


       4
                The Torreses contend the trial court erred in taking judicial notice of the
deed of trust, the assignment of the deed of trust, and the substitution of trustee. They
acknowledge a court may judicially notice these recorded documents, but contend the
trial court erred by judicially noticing certain disputed facts in the documents, such as
who was the beneficiary under the deed of trust and whether the assignment and
substitution conferred any legal rights on the parties identified therein. We do not decide
whether the trial court could take judicial notice of these documents. The Torreses
attached these same recorded documents as exhibits to their second amended complaint
and incorporated them into that pleading by reference. It therefore is irrelevant whether
the trial court could judicially notice these documents because the documents already
were before the court, and any limits on judicially noticing the documents did not apply.


                                              11
B.     The Torreses Failed to Allege Facts Stating Any Cause of Action Against
       Defendants
              As stated above, the Torreses based their causes of action on their claim the
note, the deed of trust, and the assignment of the deed of trust were void ab initio. The
Torreses relied on two separate theories to show these instruments were void, but they
failed to allege sufficient facts to support either theory.5

       1.     The Torreses Failed to Establish Any Alleged Error in Identifying the
              “Lender” Rendered the Note and Deed of Trust Void
              The Torreses first alleged the note and deed of trust were void because
those documents identified American Home Mortgage as the “Lender,” but the Torreses
were unable to locate any governmental filings, registrations, or other documents
showing an entity with that exact name existed and was capable of receiving a security

       5
               In both their opening and reply briefs, the Torreses improperly cite
unpublished Court of Appeal decisions and unrelated trial court decisions. (Cal. Rules of
Ct., rule 8.1115; People v. Williams (2009) 176 Cal.App.4th 1521, 1529 (Williams)
[citations to unpublished Court of Appeal decisions “absolutely prohibited,” absent
exceptions not applicable here]; San Diego County Employees Retirement Assn. v.
County of San Diego (2007) 151 Cal.App.4th 1163, 1184 [“A trial court judgment cannot
properly be cited in support of a legal argument, absent exceptions not applicable here”].)
The Torreses contend their citations to unpublished Court of Appeal decisions were
appropriate under California Rules of Court, rule 8.1115(b)(1), which allows citation to
an unpublished decision “[w]hen the opinion is relevant under the doctrines of law of the
case, res judicata, or collateral estoppel.” Not so. The Torreses offer no explanation how
any of those doctrines apply in this case, and we can conceive of no colorable argument
for their application. Moreover, the Torreses make no attempt to justify their citation to
unpublished trial court decisions.

       We caution the Torreses’ counsel that citation to unpublished decisions may
support an award of sanctions, and counsel should refrain from doing so in the future.
(See Williams, supra, 176 Cal.App.4th at p. 1529; Alicia T. v. County of Los Angeles
(1990) 222 Cal.App.3d 869, 885.) Indeed, “Counsel would be well served to heed this
advice by a leading treatise writer: ‘Do not, under any circumstances, cite to an
unpublished or depublished opinion (or any unpublished part of a published opinion) . . .
unless . . . one of the narrow exceptions to the noncitation rule applies.’” (Williams, at
p. 1529, italics omitted.)


                                               12
interest in the Property. The Torreses further alleged the note and the deed of trust were
void and vested no rights or interest in any of Defendants because the wire transfer
receipt for the Torreses’ loan showed DB Trust Company Americas funded the loan, not
American Home Mortgage. Although their complaint alleged this theory as a basis for
each cause of action, the Torreses’ opening brief did not rely on this theory as a basis for
overturning the trial court’s judgment, and thereby forfeited it.
              “A ruling by a trial court is presumed correct, and ambiguities are resolved
in favor of affirmance. [Citations.] The burden of demonstrating error rests on the
appellant.” (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624,
631-632.) Although our review of the trial court’s order sustaining the demurer is de
novo, that review is limited to issues the Torreses adequately raised and supported in
their opening brief. (Mendoza v. Town of Ross (2005) 128 Cal.App.4th 625, 630.)
“‘“When an appellant fails to raise a point, or asserts it but fails to support it with
reasoned argument and citations to authority, we treat the point as waived.”’ [Citation.]
‘We are not bound to develop appellants’ argument for them. [Citation.] The absence of
cogent legal argument or citation to authority allows this court to treat the contention as
waived.’” (Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956;
see Nelson v. Avondale Homeowners Assn. (2009) 172 Cal.App.4th 857, 862; In re
Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830.)
              In their reply brief, the Torreses made passing reference to their allegations
the note and the deed of trust were void for these reasons and they cited Civil Code
section 1558 to support that conclusion. The Torreses, however, forfeited this argument
because they (1) waited until the reply brief to raise it (In re Marriage of Brandes (2015)
239 Cal.App.4th 1461, 1484, fn. 10; Larson v. UHS of Rancho Springs, Inc. (2014)
230 Cal.App.4th 336, 353), and (2) raised the argument in a perfunctory fashion with no
supporting analysis or authority showing Civil Code section 1558 voided the note and the
deed of trust (Cal. Rules of Court, rule 8.204(a)(1)(B); Bullis Charter School v. Los Altos

                                              13
School Dist. (2011) 200 Cal.App.4th 1022, 1032, fn. 4; People v. Harper (2000)
82 Cal.App.4th 1413, 1419, fn. 4).
              Nonetheless, the Torreses’ citation to Civil Code section 1558 does not
establish the note and deed of trust were void. That code section provides, “It is essential
to the validity of a contract, not only that the parties should exist, but that it should be
possible to identify them.” (Civ. Code, § 1558.) In applying that section, however,
“[t]here is an important distinction . . . between a description of a party that is inherently
uncertain and indeterminate and one that is merely imperfect and capable of different
applications. The former cannot be corrected, but in the latter case there may be a resort
to extraneous facts to ascertain the individuals to whom the description was intended to
apply; and a greater or lesser probability of ascertaining such identification does not
affect the validity of the instrument.” (14 Cal.Jur.3d (2016) Contracts, § 105, p. 320;
Woodward v. McAdam (1894) 101 Cal. 438, 440 [“‘resort to extraneous facts and
circumstances may become necessary, in order to ascertain the individual to whom the
description was intended to apply; but it is not perceived that the greater or less
probability of this should, in either case, affect the validity of the deed’”].)
              In their complaint, the Torreses acknowledged they identified four entities
registered in New York that had American Home Mortgage in their name and used the
same address the note and deed of trust identified as the address for American Home
Mortgage. Moreover, the Torreses twice signed security retention agreements
acknowledging they executed the note and the deed of trust granting a valid security
interest in the Property despite the Torreses’ bankruptcy, and AHM Servicing had the
right to nonjudicially foreclose on the Property based on the note and deed of trust.
(See Evid. Code, § 622 [“The facts recited in a written instrument are conclusively
presumed to be true as between the parties thereto, or their successors in interest”].)
Thus, the Torreses’ allegations and the authority they cited do not support their
contention the note and deed of trust are void and unenforceable because they could not

                                               14
identify an entity with the exact same name as the entity identified as the “Lender” in the
note and deed of trust. Moreover, the Torreses did not allege they were subjected to
competing claims for payment on the loan or that they did not know who to pay.
              Similarly, the Torreses cited no authority and provided no argument that
establishes the note and the deed of trust were void because the wire transfer receipt for
the money used to fund the loan identified an entity other than American Home Mortgage
as the “originator.” Accordingly, not only did the Torreses forfeit this theory by failing
to timely raise it, but the Torreses also failed to show how this theory stated a cause of
action against Defendants.

       2.     The Torreses Lacked Standing to Challenge the Assignment of the Deed of
              Trust to US Bank
              The Torreses also alleged MERS’s assignment of the deed of trust to
US Bank as the Trust’s trustee was void because the assignment occurred more than four
years after the Trust closed. The trial court concluded the Torreses lacked standing to
contest the assignment because they were not parties to the Trust, and therefore could not
enforce its terms. The Torreses contend the trial court erred because they had standing to
assert any defect that rendered the assignment void, the Trust was governed by New York
law, New York trust law declares void any act by a trustee that contravenes a trust’s
terms, and US Bank acted in contravention of the Trust’s terms by accepting the
assignment from MERS after the Trust had closed. The Torreses contention fails because
it is based on a misinterpretation of New York law.
              Standing is a threshold issue necessary to maintain the existence of a cause
of action, and the burden to allege and establish standing lies with the plaintiff.
(Saterbak, supra, 245 Cal.App.4th at pp. 813-814.) The Torreses therefore bore the
burden to allege facts showing they had standing to challenge MERS’s assignment of the
trust deed to US Bank. To do so, they had to allege facts showing they had a “‘beneficial



                                              15
interest [in the assignment] that is concrete and actual, and not conjectural or
hypothetical.’” (Ibid.)
              The Supreme Court recently clarified that a borrower suing to set aside or
recover damages for a wrongful foreclosure has standing to assert defects in an
assignment of the borrower’s note and deed of trust to the foreclosing entity when the
defects render the assignment void, rather than merely voidable. (Yvanova, supra,
62 Cal.4th at p. 939.) Yvanova explained a void contract has no legal force or effect and
never can be ratified or validated by the parties to it, but a voidable contract is one that
the contracting parties either may ratify and thereby give legal force and effect, or
extinguish at their election. (Id. at pp. 929-930.) Consequently, allowing a borrower to
challenge an assignment based on a defect that merely renders it voidable would allow
the borrower to exercise rights belonging exclusively to the parties to the assignment.
The result would be to give the borrower, a nonparty to the assignment, the power to
decide whether the assignment should be extinguished rather than ratified. In contrast,
allowing a borrower to challenge an assignment based on a defect that renders it void
simply allows the borrower to assert the unavoidable legal consequence of the void
assignment. A borrower challenging a void assignment is not asserting the rights of the
parties to the assignment, but rather his or her own right to have a foreclosure conducted
solely at the direction of the current holder of the note and deed of trust. (Id. at
pp. 935-937.) Because the parties to a void assignment can do nothing to validate it, the
borrower is not asserting any rights belonging to those parties when he or she seeks to
invalidate the assignment. (Id. at p. 936.)
              Unfortunately for the Torreses, Yvanova does not support their contention
they have standing to challenge MERS’s assignment to US Bank. The Supreme Court
emphasized its decision was a “narrow one” that only applied to borrowers who already
have suffered a nonjudicial foreclosure, not to borrowers who seek to prevent a
foreclosure from occurring. (Yvanova, supra, 62 Cal.4th at p. 924 [“We do not hold or

                                              16
suggest that a borrower may attempt to preempt a threatened nonjudicial foreclosure by a
suit questioning the foreclosing party’s right to proceed”].)
              In Saterbak, the Court of Appeal concluded Yvanova only applies in the
postforeclosure context and does not provide a borrower with standing to challenge the
assignment of a note and deed of trust before a foreclosure occurs. As Saterbak
explained, the Legislature established the nonjudicial foreclosure statutory scheme as an
inexpensive and efficient means to enforce real property security interests. Allowing a
borrower to challenge a foreclosing entity’s authority before a foreclosure occurs would
impermissibly inject the courts into the nonjudicial foreclosure process by requiring the
foreclosing entity to establish its authority in court before the foreclosure may be
conducted. Neither the statutory scheme nor the policy behind it supports that result.
(Saterbak, supra, 245 Cal.App.4th at pp. 814-815; see Kan, supra, 230 Cal.App.4th at
p. 743.)
              Here, the Torreses impermissibly challenged the assignment before any
nonjudicial foreclosure occurred. Indeed, their complaint acknowledged both notices of
default Defendants recorded against the Property were rescinded, no foreclosure had
occurred, and no foreclosure proceedings were pending against the Property. The
Torreses therefore currently lack standing to challenge the assignment regardless of
whether the defect they alleged rendered the assignment void or voidable.
              Moreover, even if we ignore the timing of their challenge, the Torreses
lacked standing to challenge MERS’s assignment to US Bank because they failed to
allege facts showing the assignment was void rather than merely voidable. The allegation
the assignment was void is a legal conclusion that we disregard, and instead we examine
the basis for the Torreses’ allegation. (Yvanova, supra, 62 Cal.4th at p. 925.) They
asserted the assignment was void because US Bank’s acceptance of the assignment after
the Trust closed contravened the Trust’s terms, and New York law declares void any act
by a trustee in contravention of a trust’s terms.

                                              17
              To support their contention, the Torreses cite New York Estates, Powers
and Trusts Law section 7-2.4 (Section 7-2.4) and Glaski. Section 7-2.4 states, “If the
trust is expressed in the instrument creating the estate of the trustee, every sale,
conveyance or other act of the trustee in contravention of the trust, except as authorized
by this article and by any other provision of law, is void.” Based on Section 7-2.4 and an
unpublished New York trial court decision—Wells Fargo Bank, N.A. v. Erobobo
(N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A), [2013 WL 1831799, slip opn. p. 8]—Glaksi
concluded allegations an assignment occurred after a securitized mortgage investment
trust closed sufficed to support an allegation the assignment was void, and thereby defeat
a demurrer attacking a borrower’s standing to challenge the assignment. (Glaski, supra,
218 Cal.App.4th at p. 1097.) This aspect of Glaski, however, has been criticized as based
on a misinterpretation of Section 7-2.4.
              Although Section 7-2.4 states a trustee’s act contravening the terms of a
trust is void, the “weight of New York authority” is that “unauthorized acts by trustees
are generally subject to ratification by the trust beneficiaries,” and therefore merely are
voidable at the beneficiary’s election. (Rajamin v. Deutsche Bank Nat’l Trust Co.
(2nd Cir. 2014) 757 F.3d 79, 88.) Indeed, Rajamin expressly rejected Glaski’s contrary
interpretation of the statute, explaining “we are not aware of any New York appellate
decision that has endorsed this interpretation of § 7-2.4.” (Rajamin, at p. 90.) Moreover,
the unpublished trial court opinion Glaski cited to support its interpretation of
Section 7-2.4 has been reversed. (Wells Fargo Bank, N.A. v. Erobobo (N.Y.App.Div.
2015) 127 A.D.3d 1176, 1178.) Based on these authorities, Saterbak recently declined to
follow this aspect of Glaski and “conclude[d] the alleged defects[—the assignment of a
deed of trust to a securitized mortgage investment trust after it closed—]merely render
the assignment voidable.” (Saterbak, supra, 245 Cal.App.4th at p. 815 & fn. 5.)
              We join Saterbak in declining to follow this aspect of Glaski and conclude
the timing of MERS’s assignment to US Bank at most rendered the assignment voidable

                                              18
at the election of the Trust’s beneficiary. Consequently, the Torreses lacked standing to
challenge the alleged defect in the assignment and cannot state a cause of action based on
it.6

                                              IV
                                         DISPOSITION

              The judgment is affirmed. Defendants shall recover their costs on appeal.



                                                   ARONSON, J.

WE CONCUR:



BEDSWORTH, ACTING P. J.



THOMPSON, J.




       6
              As noted, the Torreses based all their causes of action on the claim the note,
the deed of trust, and the assignment of the deed of trust were void. Because the Torreses
failed to adequately allege facts to support that claim, we need not address the additional
reasons for the trial court’s conclusion the Torreses failed to allege sufficient facts to state
each individual cause of action.


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