Filed 7/28/15 Rodriguez v. Bank of America CA4/1

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
 California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                   FOURTH APPELLATE DISTRICT

                                                 DIVISION TWO



PABLO RODRIGUEZ et al.,

         Plaintiffs and Appellants,                                      E059659

v.                                                                       (Super.Ct.No. RIC1214646)

BANK OF AMERICA, N.A. et al.,                                            OPINION

         Defendants and Respondents.



         APPEAL from the Superior Court of Riverside County. Richard J. Oberholzer,

Judge. (Retired Judge of the Kern Super. Ct. assigned by the Chief Justice pursuant to

art. VI, § 6 of the Cal. Const.) Affirmed.

         Pablo Rodriguez, Isabel Rodriguez and Juan Pablo Rodriguez, in pro. per.; Law

Offices of Skip Allen Feild and Skip Allen Feild, for Plaintiffs and Appellants.

         Bryan Cave, Stuart W. Price, Jesse E. M. Randolph and Allan P. Bareng, for

Defendants and Respondents.




                                                             1
       Plaintiffs and appellants Pablo and Isabel Rodriguez, along with their son, Juan

Pablo, appeal from the judgment of dismissal in favor of defendants Bank of America,

N.A. (BOA) and ReconTrust Company, N.A. (Recon), after the trial court sustained the

demurrers for failure to state facts sufficient to constitute a cause of action to their

complaints seeking damages and other relief for the allegedly wrongful foreclosure of

their real property at 3810 Juniper Lane, Perris, California (Property).1 Because plaintiffs

have neither stated a cause of action, nor shown they can amend to state a cause of action,

we shall affirm.

                    I. PROCEDURAL BACKGROUND AND FACTS

       We presume the facts alleged in the first amended complaint (FAC) and in the

opening brief state the strongest case for plaintiffs.2 (See Live Oak Publishing Co. v.

Cohagan (1991) 234 Cal.App.3d 1277, 1286.) Stripped of legal conclusions (see Blank

v. Kirwan (1985) 39 Cal.3d 311, 318), those facts are as follows: Plaintiffs took out a

loan to buy the Property and fell behind in their payments. Defendants purported to

consider alternatives to foreclosure, but abruptly foreclosed before informing plaintiffs of

any decision on whether to grant a loan modification or otherwise refrain from

foreclosing. Plaintiffs are Hispanic, and English is their second language, and defendants

failed to provide them with any translation of the lending documents. Plaintiffs initiated


       1Several other parties were identified as defendants; however, they were either
dismissed or not served.

       2 As defendants aptly note, the FAC “offered a blur of conclusory statements
lacking in factual specifics.”

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this action in September 2012, and by way of the FAC filed on May 10, 2013, they

asserted five causes of action: (1) wrongful foreclosure, (2) declaratory relief, (3) quiet

title, (4) fraud and deceit, and (5) accounting.

       According to the demurrer, plaintiffs’ loan from BOA was obtained in May 2008,

in the amount of $378,551, and secured by a deed of trust on the Property. Three years

later, on June 29, 2011, Recon recorded a Notice of Default. The Notice of Trustee’s

Sale was recorded on October 3, 2011, and the Property was sold at a public auction on

October 31, 2011.

                                     II. DISCUSSION

       Before reviewing plaintiffs’ claims, we first consider whether they have provided

a record sufficient to permit such review, and whether their opening brief, which fails to

specify the issues presented on review, prevents them from demonstrating error.

       The appellant bears the burden of providing an adequate record for review.

(Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295-1296.) Because the trial court’s

judgment is presumed to be correct, the appellant must overcome this presumption by

presenting a record that affirmatively demonstrates error and prejudice. (Gould v.

Corinthian Colleges, Inc. (2011) 192 Cal.App.4th 1176, 1181.) The appellant’s failure to

provide an adequate record on any issue requires that the issue be resolved against him.

(Hernandez v. California Hospital Medical Center (2000) 78 Cal.App.4th 498, 502

[appellant challenged the trial court’s order granting a motion to strike but failed to

include copies of the motion and opposition].)



                                              3
       In addition to an adequate record, appellant’s briefing also must state each claim

under a separate heading summarizing the point, support each claim with argument and,

if possible, with citation to authority. (Cal. Rules of Court, rule 8.204(a)(1)(B).) “Issues

do not have a life of their own: if they are not raised or supported by argument or citation

to authority, we consider the issues waived. [Citations.]” (Jones v. Superior Court

(1994) 26 Cal.App.4th 92, 99.) In some cases, a reviewing court chooses to pass on the

issue where the appellant has not carried his burden. In cases such as these, however,

where the unsubstantiated claim is coupled with an inadequate record, the reviewing

court cannot meaningfully evaluate the claim at all.

       We acknowledge that plaintiffs are representing themselves on appeal.3 Under the

law, one may act as his own attorney if he chooses; however, when a litigant appears in

propria persona, he is held to the same restrictive rules of procedure and evidence as an

attorney—no different, no better, no worse. (Doran v. Dreyer (1956) 143 Cal.App.2d

289, 290-291; Monastero v. Los Angeles Transit Co. (1955) 131 Cal.App.2d 156, 160.)

       Here, plaintiffs’ briefs are lacking both in content and organization. The opening

brief consists of various statements of the law concerning their five causes of action.

They argue that the FAC sufficiently states each claim; however, the arguments under

each claim are replete with bald assertions with minimal to no support from the facts or

the law. Similar claims were made to the trial court that rejected them. For the

remainder of this opinion, we will discuss only those claims plaintiffs have made some


       3   However, plaintiffs were represented by counsel at oral argument.

                                             4
effort to substantiate, even if not adequately, and which directly relate to their primary

causes of action for wrongful foreclosure and fraud.4

A. Standard of Review

       A demurrer should be sustained when “[t]he pleading does not state facts

sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).)

       “We independently review the superior court’s ruling on a demurrer and determine

de novo whether the complaint alleges facts sufficient to state a cause of action or

discloses a complete defense. [Citations.] We assume the truth of the properly pleaded

factual allegations, facts that reasonably can be inferred from those expressly pleaded and

matters of which judicial notice has been taken. [Citations.] We liberally construe the

pleading with a view to substantial justice between the parties. [Citations.]” (Regents of

University of California v. Superior Court (2013) 220 Cal.App.4th 549, 558.)

       “‘If we determine the facts as pleaded do not state a cause of action, we then

consider whether the court abused its discretion in denying leave to amend the complaint.

[Citation.] It is an abuse of discretion for the trial court to sustain a demurrer without

leave to amend if the plaintiff demonstrates a reasonable possibility that the defect can be

cured by amendment. [Citation.]’ [Citation.]” (Bank of America, N.A. v. Mitchell (2012)

204 Cal.App.4th 1199, 1204.) However, “‘[s]uch a showing can be made for the first

time to the reviewing court [citation] . . . .’ [Citation.]” (San Diego City Firefighters,

Local 145 v. Board of Administration etc. (2012) 206 Cal.App.4th 594, 606.) “Whether a

       4 Defendants assert that plaintiffs’ claims for declaratory relief, quiet title, and
accounting are remedies which fail with their substantive claims. We agree.

                                               5
plaintiff will be able to prove its allegations is not relevant. [Citation.]” (Chavez v.

Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1057.)

B. Wrongful Foreclosure

       The FAC alleges that defendants lack standing to foreclose because they sold

plaintiffs’ loan “to other financial entities, which ‘pooled’ large numbers of loans, put

them into trusts, and sold securities based on such loans,” without legally transferring the

right to be named as a trustee, mortgagee, beneficiary. Plaintiffs further assert that

foreclosure was wrongful because defendants did not comply with RESPA5 or Civil Code

sections 2923.5, 2923.52, 2024, and 2042;6 and because they orally agreed to modify

plaintiffs’ loan, but failed to do so. As best we can discern, in plaintiffs’ opening brief,

they again assert defendants’ lack of authority to foreclose in support of their argument

that they were not required to tender the full sum due on the loan because they were

alleging “the foreclosure sale is properly ‘alleged’ to be void . . . .” Thus, they argue that

they had standing to challenge the foreclosure, that they were not required to allege that


       5  Real Estate Settlement Procedures Act of 1974 (RESPA), 12 United States Code
section 2601 et seq., regulates the real estate settlement process (Hardy v. Regions
Mortgage, Inc. (11th Cir. 2006) 449 F.3d 1357, 1359), as well as the servicing of
federally regulated mortgage loans (MorEquity, Inc. v. Naeem (N.D. Ill. 2000) 118
F.Supp.2d 885, 900, overruled on other grounds as stated in Catalan v. GMAC Mortgage
Corp. (7th Cir. 2011) 629 F.3d 676, 686). RESPA is inapplicable because the FAC failed
to allege that plaintiffs made a qualified written request to BOA or ReconTrust for
information in accordance with RESPA.

       6  Civil Code sections 2923.52, 2024, and 2042 are inapplicable, because section
2923.52 was effective only until January 1, 2011, six months prior to recordation of
plaintiffs’ default; section 2024 does not exist; and section 2042 was repealed in 1937
(stats. 1937, ch. 368, p. 1002, § 10001).

                                              6
they had tendered the balance due to preserve their suit (and if they were, the FAC can be

amended to do so), and that the foreclosure sale was void because defendants lacked the

authority to foreclose.

       Plaintiffs raise an argument common to those plaintiffs who have lost their homes

in foreclosure. We agree with the majority view that even if plaintiffs’ claims have merit,

plaintiffs lack standing to challenge defendants’ standing because plaintiffs have no

interest in the loan and the deed of trust. “[T]he relevant parties to such a transaction

were the holders (transferors) of the promissory note and the third party acquirers

(transferees) of the note. . . . As an unrelated third party to the alleged securitization, and

any other subsequent transfers of the beneficial interest under the promissory note, [the

plaintiff] lacks standing to enforce any agreements, including the investment trust’s

pooling and servicing agreement, relating to such transactions.” (Jenkins v. JPMorgan

Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 515 (Jenkins).) To explain further:

“Because a promissory note is a negotiable instrument, a borrower must anticipate it can

and might be transferred to another creditor. As to plaintiff, an assignment merely

substituted one creditor for another, without changing her obligations under the note.”

(Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507

[Fourth Dist., Div. Two].)

       Plaintiffs were not the victims of any invalid transfers because their obligations to

pay the loan remained unchanged: “Instead, the true victim may be an individual or

entity that believes it has a present beneficial interest in the promissory note and may

suffer the unauthorized loss of its interest in the note. It is also possible to imagine one or

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many invalid transfers of the promissory note may cause a string of civil lawsuits

between transferors and transferees. . . . [The plaintiff], however, may not assume the

theoretical claims of hypothetical transferors and transferees . . . .” (Jenkins, supra, 216

Cal.App.4th at p. 515.)7

       Another fundamental obstacle to plaintiffs being able to state a claim for wrongful

foreclosure is that they have not complied with the rule requiring tender. “A full tender

must be made to set aside a foreclosure sale, based on equitable principles. [Citations.]

Mabry [v. Superior Court (2010) 185 Cal.App.4th 208, 225-226 (Mabry)] held tender

was not required to delay a sale [citation] but did not suggest a tender is not required

postsale. Nor do plaintiffs propose any facts showing it would be inequitable to require a

full tender. Allowing plaintiffs to recoup the property without full tender would give

them an inequitable windfall, allowing them to evade their lawful debt.” (Stebley v.

Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526-527 (Stebley) [demurrer

sustained when plaintiffs “merely alleged offers to tender.”].) The tender requirement

applies to any claim “implicitly integrated” with the foreclosure sale, not merely claims


       7 Plaintiffs claim that defendants have no beneficial interest in the Property under
Uniform Commercial Code section 3301, which governs the enforceability of negotiable
instruments. However, they are unable to state an actionable claim based on this statute.
Given the comprehensive nature of California’s nonjudicial foreclosure scheme, courts
have refused to apply Commercial Code section 3301 to nonjudicial foreclosure under
deeds of trust. (Debrunner v. Deutsche Bank National Trust Co. (2012) 204 Cal.App.4th
433, 441 [“we are not convinced that the cited sections of the California Uniform
Commercial Code (particularly § 3301) displace the detailed, specific, and
comprehensive set of legislative procedures the Legislature has established for
nonjudicial foreclosures”].)


                                              8
that challenge the sale, but also those that seek damages related to the sale. (Arnolds

Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 579 [sustaining demurrer

without leave to amend on wrongful foreclosure and fraud claims].)

       Moreover, plaintiffs’ attempt to invalidate the foreclosure by alleging various

statutory violations also fails.

       In 2008, the Legislature enacted Civil Code section 2923.5 in response to the

foreclosure crisis. (Stats. 2008, ch. 69, §§ 1, 2.) Initially, the statute applied to owner-

occupied residences that were secured by “mortgages or deeds of trust recorded from

January 1, 2003, to December 31, 2007 . . . .” (Civ. Code, former § 2923.5, subd. (i).)

Although Civil Code former section 2923.5 was originally set to expire on January 1,

2013 (Civ. Code, former § 2923.5, subd. (j)), the Legislature amended it to allow for its

continued application. (Stats. 2012, ch. 87, § 4.) Basically, this statute prohibits filing a

notice of default until 30 days after the lender contacts the borrower “to assess the

borrower’s financial situation and explore options for the borrower to avoid foreclosure”

(Civ. Code, § 2923.5, subds. (a)(1), (a)(2)) and the borrower submitted a “complete

application for a first lien loan modification . . . .” (Civ. Code, § 2924.18, subd. (a)(1).)

       “However, Civil Code section 2923.5 does not provide for damages, or for setting

aside a foreclosure sale, nor could it do so without running afoul of federal law, that is,

the Home Owners’ Loan Act (12 U.S.C. § 1461 et seq.; HOLA), and implementing

regulations (12 C.F.R. § 560.2(b) (2011). [Citations.] The statute was ‘carefully drafted

to avoid bumping into federal law’ regulating home loans. [Citation.] As a result, the

sole available remedy is ‘more time’ before a foreclosure sale occurs. [Citation.] After

                                               9
the sale, the statute provides no relief. [Citations.] Further, the statute does not—and

legally could not—require the lender to modify the loan. [Citation.]” (Stebley, supra,

202 Cal.App.4th at p. 526.) Therefore, as stated in Mabry and other cases, Civil Code

section 2923.5 does not provide relief after a sale takes place. (cf. Stebley, supra, at p.

526.)

        In short, defendants’ demurrer to plaintiffs’ wrongful foreclosure cause of action

was properly sustained.

C. Fraud

        Plaintiffs complain that defendants defrauded them during the loan origination

because they “were not given any translation of the lending documents;” they were

“without [Pablo Rodriguez’s] knowledge, consent, approval or verification that

[Rodriguez’s] income level was not sufficient as he stated on the loan application;” and

they “did not receive the required documents and disclosures, including, but not limited

to the TILA disclosures, and the required number of copies of the Notice of Right to

Cancel stating the date that the rescission period expires.” They further assert that

defendants “guaranteed” that plaintiffs would receive a loan modification and that the

Property would not be foreclosed upon. Defendants argue that the loan origination

claims are time-barred and that plaintiffs’ fraud allegations lacked factuality and

specificity. We agree with defendants: Plaintiffs’ claim is time-barred and they failed to

allege fraud with the requisite specificity to support a cause of action.

        Plaintiffs obtained their loan in May 2008 and this action was initiated in

September 2012, more than four years later. Claims for fraud are governed by the three-

                                              10
year statute of limitations. (Code Civ. Proc., § 338, subd. (d).) To the extent plaintiffs’

allegations in the FAC concern the origination of the loan, which closed in 2008, the

statue of limitations applies and bars this claim.

       Plaintiffs contend the limitations period should be tolled because the alleged fraud

was “purposefully hidden to prevent Plaintiff[s] from discovering the true nature of the

transaction . . . [and] continue[s] to be hidden from the Plaintiff[s] to this day.” We reject

this contention. “‘The burden is on the plaintiff to show diligence, and conclusory

allegations will not withstand demurrer.’ [Citations.]” (E-Fab, Inc. v. Accountants, Inc.

Services (2007) 153 Cal.App.4th 1308, 1324.) The above sentence from the FAC is a

conclusory allegation. According to plaintiffs, they did not discover the fraud until “the

illegal sale” of the Property which occurred less than a year prior to filing the action.

However, plaintiffs knew, or reasonably should have discovered at the time they signed

the loan documents or immediately thereafter, that they needed a translation of such

documents, that they were unable to afford the loan payments, and that they did not

receive the disclosure documents.

       Notwithstanding the above, plaintiffs argue that defendants misrepresented their

willingness to enter into a loan modification agreement. “The elements of fraud, which

give rise to the tort action for deceit, are (1) a misrepresentation, (2) with knowledge of

its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4)

justifiable reliance, and (5) resulting damage. [Citation.] The tort of negligent

misrepresentation, a species of the tort of deceit [citation], does not require intent to

defraud but only the assertion, as a fact, of that which is not true, by one who has no

                                              11
reasonable ground for believing it to be true. [Citation.]” (Conroy v. Regents of

University of California (2009) 45 Cal.4th 1244, 1255.)

       “In California, fraud must be pled specifically; general and conclusory allegations

do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) The normal

policy of liberally construing pleadings against a demurrer will not be invoked to sustain

a fraud cause of action that fails to set forth such specific allegations. (Ibid.) The

heightened pleading standard for fraud requires “‘pleading facts which “show how, when,

where, to whom, and by what means the representations were tendered.”’ [Citation.]”

(Ibid.) Thus, “every element of the cause of action for fraud must be alleged in full,

factually and specifically . . . .” (Wilhelm v. Pray, Price, Williams & Russell (1986) 186

Cal.App.3d 1324, 1331.) The specificity requirement serves two purposes: (1) to furnish

the defendant with certain definite charges that can be intelligently met; and (2) to ensure

the complaint is specific enough so that the court can “weed out nonmeritorious actions

on the basis of the pleadings.” (Committee on Children’s Television, Inc. v. General

Foods Corp. (1983) 35 Cal.3d 197, 216-217, superseded by statute on another issue as

stated in Sanchez v. Bear Stearns Residential Mortgage Corp., 2010 U.S. Dist. LEXIS

46043, at *18, fn. 4 (S.D. Cal. May 11, 2010).

       Here, plaintiffs failed to identify by name, title, or location, the person(s), along

with the defendant who employed such person(s), who allegedly promised a loan

modification. Plaintiffs also did not identify the terms of the alleged modification (such

as reduction in principal, monthly payment, interest rate, or forgiveness of debt), when

the modification would take effect, and whether it would be a temporary or permanent

                                              12
modification. The FAC’s lack of factual specificity supports the trial court’s conclusion

plaintiffs failed to state facts sufficient to constitute a cause of action for fraud.

D. Leave to Amend

       Plaintiffs contend that case law favors amendment, and thus, the trial court abused

its discretion in denying them leave to amend. We find no abuse of discretion. Plaintiffs

were presented with the opportunity to identify additional facts that could cure the defects

in their FAC; however, they failed to do so. Instead, they acknowledged that “Fraud

must be pleaded specifically,” and that such facts must “show how, when, where, to

whom, and by what means the representations were tendered.” (Original boldface.)

However, they failed to state such facts in opposition to the demurrer to the FAC.

Instead, they merely asserted that “IF the court believes more need be recited in the

complaint, plaintiffs stand ready to plead further information on point against these

demurring defendants.” They also failed to appear at the hearing on defendants’

demurrer. Moreover, on appeal, they again fail to show there is a reasonable possibility

they can amend their pleading to state a cause of action for fraud by identifying the

specific facts that could cure the defects in their FAC. Instead, during oral argument,

plaintiffs’ counsel asserted that BOA represented that it would “hold off” from

foreclosing, allegedly pending the loan modification process. Counsel argued that

plaintiffs should be granted leave to amend in order to subpoena records from BOA in

order to obtain the facts. Once again, plaintiffs have failed to demonstrate a reasonable

possibility that the defect in their FAC can be cured. (Bank of America N.A. v. Mitchell,

supra, 204 Cal.App.4th at p. 1204; San Diego City Firefighters, Local 145 v. Board of

                                               13
Administration etc., supra, 206 Cal.App.4th at p. 606.) Plaintiffs assume BOA’s records

will show that it misrepresented that it would “hold off” from foreclosure; however, the

length of time BOA was willing to stall the foreclosure is irrelevant. Plaintiffs must

provide specific facts supporting their claim that defendants misrepresented their

willingness to enter into a loan modification agreement. They continue to fail to do so.

       Thus, the trial court correctly denied plaintiffs leave to amend. (Rakestraw v.

California Physicians’ Service (2000) 81 Cal.App.4th 39, 44 [“Where the appellant offers

no allegations to support the possibility of amendment and no legal authority showing the

viability of new causes of action, there is no basis for finding the trial court abused its

discretion when it sustained the demurrer without leave to amend.”].)

                                       III. DISPOSITION

       The judgment of dismissal is affirmed. Defendants shall recover costs on appeal.

       NOT TO BE PUBLISHED IN OFFICIAL REPORTS



                                                                  HOLLENHORST
                                                                           Acting P. J.
We concur:

       KING
                                  J.

       CODRINGTON
                                  J.




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