Filed 1/30/14 Landau v. Wells Fargo Bank CA3
                                           NOT TO BE PUBLISHED
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 This opinion has not been certified for publication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
                                      THIRD APPELLATE DISTRICT
                                                        (Placer)
                                                            ----

JEAN-MARC LANDAU et al.,                                                                     C071834

                   Plaintiffs and Appellants,                                  (Super. Ct. No. SCV0030248)

         v.

WELLS FARGO BANK, N.A., et al.,

                   Defendants and Respondents.

         Plaintiffs Jean-Marc and Jennifer Landau sued several defendants involved in the
nonjudicial foreclosure sale of the Landaus’ property. The trial court sustained
defendants’ demurrers without leave to amend. On appeal from the resulting judgment,
we find no error and affirm.
                         FACTUAL AND PROCEDURAL BACKGROUND
         The following statement of facts takes as true “the properly pleaded factual
allegations, facts that reasonably can be inferred from those expressly pleaded, and
matters of which judicial notice has been taken” (Fremont Indemnity Co. v. Fremont
General Corp. (2007) 148 Cal.App.4th 97, 111) but ignores all “contentions, deductions
or conclusions of law” in the complaint (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th
962, 967).


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       In July 2005, the Landaus took out a loan from Gateway Bank, FSB (Gateway) to
either purchase or refinance an existing loan on what appears to be a Squaw Valley
condominium (the property). As part of the loan transaction, the Landaus signed a
promissory note for $570,000, and Gateway took a security interest in the property in the
form of a deed of trust that was recorded in August 2005. The deed of trust identified
Gateway as the lender, First American Title as the trustee, and defendant Mortgage
Electronic Registration Systems, Inc. (MERS) as the beneficiary “acting solely as a
nominee for Lender and Lender’s successors and assigns.”
       Shortly following the closing of the loan, Gateway represented that defendant
Aurora Loan Services, LLC (Aurora) would service the loan. Around the same time,
Gateway sold the note to an investment trust of which defendant Wells Fargo Bank, N.A.
(Wells Fargo) is the trustee.
       In January 2010, a notice of default and election to sell under the deed of trust was
recorded against the property. The notice of default asserted that $12,342.19 was owed
as of January 12, 2010. The notice advised the Landaus to contact Aurora care of
defendant Quality Loan Service Corp. (Quality) to arrange for payment to stop the
foreclosure. The notice was signed by an “Authorized Signor” for Quality, which was
acting “AS AGENT FOR BENEFICIARY.”
       In February 2010, a substitution of trustee signed by a vice president of MERS
was recorded on the property. This document substituted Quality in place of MERS as
the trustee under the deed of trust.
       In April 2010, Quality recorded a notice of trustee’s sale on the property, with the
sale set for May 4. Apparently this sale was later postponed.
       In November 2010, a corporate assignment of deed of trust signed by a vice
president of MERS was recorded on the property. This document transferred MERS’s
beneficial interest in the deed of trust to Aurora.



                                               2
       In March 2011, Quality recorded another notice of trustee’s sale on the property,
with the sale set for April 4. This sale was apparently postponed as well, but ultimately
the foreclosure sale was held in July 2011, with Aurora purchasing the property at the
sale. A trustee’s deed upon sale was recorded on July 20, 2011, showing Aurora
purchased the property for the unpaid debt and costs, which exceeded $655,000.1
       In November 2011, the Landaus commenced this action against Wells Fargo,
Aurora, Quality, and MERS. As relevant here, the first amended complaint, filed in
March 2012, alleged causes of action for “lack of standing” (which the trial court
construed as “an attempt to allege wrongful foreclosure”); unfair business practices;
intentional infliction of emotional distress; breach of contract; and declaratory relief.2
       The gist of the cause of action for wrongful foreclosure was that defendants could
not “establish possession and proper transfer and/or endorsement of the Promissory Note
and proper assignment of the Deed of Trust” and therefore defendants did not have the
right to foreclose on the property. The cause of action for unfair business practices
alleged that defendants had engaged in various “deceptive business practices with respect
to mortgage loan servicing, assignments of notes and deeds of trust, foreclosure of
residential properties and related matters” which caused the Landaus’ property to be sold
at a foreclosure sale. The cause of action for intentional infliction of emotional distress
was based on defendants’ conduct in “fraudulently attempting to foreclose on a property



1       All of the documents mentioned above were referenced in and attached to the
original complaint in the proceeding. The first amended complaint, which is the
operative pleading for our purposes, also referenced the same documents and stated that
they were attached and incorporated by reference, but apparently, by mistake, they were
not attached to the amended complaint.
2     The first amended complaint also included four other causes of action, but because
the Landaus did not attempt to show in their opening brief any error in the sustaining of
the demurrers to those causes of action, the Landaus have forfeited any such claims. (See
Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 241.)

                                              3
in which they have no right, title, or interest.” The breach of contract cause of action
alleged that the Landaus’ monthly payments under the loan were to be $2,731.25 until
2015, but when the Landaus missed a tax payment that was part of their obligation under
the loan agreement, defendants breached the agreement by increasing the monthly
payment to $4,700. The declaratory relief cause of action alleged there was a dispute
between the parties as to the ownership of the property and the validity and amount of
any liens on the property prior to foreclosure.
       In April 2012, Wells Fargo, Aurora, and MERS jointly demurred to the first
amended complaint. They argued that: (1) “California law does not allow [the Landaus]
to bring a cause of action in order to test [defendants’] standing” to foreclose on the
property; (2) the unfair business practices cause of action was “legally deficient as to
allegations of unlawful acts, unfair practices, and fraudulent acts”; (3) the intentional
infliction of emotional distress cause of action was “inadequately pled and precluded by
the economic loss doctrine”; (4) the breach of contract cause of action was “insufficiently
pled and not supported by the allegations”; and (5) the cause of action for declaratory
relief “fails for many of these same reasons.”
       In support of their demurrer, Wells Fargo, Aurora, and MERS asked the trial court
to take judicial notice of two additional deeds of trust on the property from May 2009.
They asserted that these documents showed that the Landaus had “leverag[ed] the
Property for an additional $415,000” before they defaulted on the loan from 2005.
       Days later, Quality also demurred to the first amended complaint. In support of its
demurrer, Quality asked the trial court to take judicial notice of all but one of the
documents that were referenced in the first amended complaint and that had been
attached to the original complaint.3



3      The one document Quality omitted from its request for judicial notice was the
notice of trustee’s sale recorded in April 2010.

                                              4
       The demurrer of Wells Fargo, Aurora, and MERS came on for hearing first. The
trial court granted defendants’ request for judicial notice and sustained the demurrer
without leave to amend. On the cause of action for wrongful foreclosure, the court
concluded that the Landaus had failed to allege that they tendered the amount of the
secured indebtedness and had failed to sufficiently allege any facts to support an
exception to the requirement of tender. The court also concluded there was a “lack of
factual allegations that would show prejudice to the [Landaus] from [the] alleged
imperfections in the foreclosure process.” On the cause of action for unfair business
practices, the court concluded the complaint “fail[ed] to allege sufficient facts showing
any unlawful, unfair, or fraudulent business activities conducted by the moving
defendant[s].” On the cause of action for intentional infliction of emotional distress, the
court concluded there was a dearth of “facts that demonstrate extreme or outrageous
conduct on the part of the moving defendant[s].” According to the court, allegations of
“inappropriate recordation of transfers of the deed of trust” were “insufficient to allege
the essential elements for intentional infliction of emotional distress.” On the breach of
contract cause of action, the court concluded that the Landaus had not sufficiently alleged
an excuse for their nonperformance under the loan agreement and while in default
themselves they could not compel defendants to perform under the agreement. On the
declaratory relief cause of action, the court concluded that “[t]he failure of [the Landaus]
to sufficiently allege a wrongful foreclosure action indicates a failure to state a cause of
action for declaratory relief.”
       With respect to Quality’s demurrer, the trial court first granted Quality’s request
for judicial notice, noting that “the documents [the Landaus] now object to were attached
to their original complaint and apparently supposed to be attached to their” first amended
complaint. The court then ruled on the various causes of action in the same manner that
it had ruled with respect to the demurrer by the other defendants.



                                              5
       The trial court entered judgment in favor of defendants in July 2012, and the
Landaus timely appealed.
                                       DISCUSSION
                                               I
                                    Standard Of Review
       “On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. The reviewing court gives
the complaint a reasonable interpretation, and treats the demurrer as admitting all
material facts properly pleaded. [Citations.] The court does not, however, assume the
truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be
affirmed ‘if any one of the several grounds of demurrer is well taken. [Citations.]’
[Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff
has stated a cause of action under any possible legal theory. [Citation.] And it is an
abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows
there is a reasonable possibility any defect identified by the defendant can be cured by
amendment.” (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at pp. 966-967.) “[T]he
burden is on the plaintiff to demonstrate that the trial court abused its discretion.
[Citations.] Plaintiff must show in what manner he can amend his complaint and how
that amendment will change the legal effect of his pleading.” (Cooper v. Leslie Salt Co.
(1969) 70 Cal.2d 627, 636.)
                                              II
                               Judicially Noticed Documents
       As a general matter, not related to any particular cause of action, the Landaus
contend that while the trial court could judicially notice the existence of “the recorded
foreclosure documents” as public records, the court nonetheless erred in “accept[ing] the
validity or truth of [those] documents” “simply because they were recorded.” The
Landaus further contend that “the court’s ruling must have been based on its erroneous

                                              6
acceptance of the contents of these recorded documents as true.” According to the
Landaus, “[t]he trial court’s reliance on the truth of these documents constitutes a
reversible error.”
       “The burden is on the appellant in every case affirmatively to show error and to
show further that the error is prejudicial . . . .” (Vaughn v. Jonas (1948) 31 Cal.2d 586,
601.) Accepting that a court may not take judicial notice of the truth of factual matters
stated in a recorded document (see, e.g., Herrera v. Deutsche Bank National Trust Co.
(2011) 196 Cal.App.4th 1366, 1375), the Landaus have nonetheless failed to carry their
burden of showing error -- let alone prejudicial error -- because they have not shown that
the trial court did, in fact, take judicial notice of the truth of factual matters stated in the
recorded documents of which it took judicial notice. The assertion that the court’s ruling
against them “must have been based on its erroneous acceptance of the contents of these
recorded documents as true” (italics added) is of no significance without an explanation
of why this is so, but the Landaus offer no such explanation. Absent a showing that the
trial court took judicial notice of the truth of factual matters contained in the recorded
documents, and that its action in doing so was integral to its sustaining of the demurrers,
the Landaus have failed to show any prejudicial error.
                                               III
                                     Wrongful Foreclosure
       The Landaus contend they adequately pled a claim for wrongful foreclosure, but
their argument consists of a number of seemingly contradictory points. First they assert
that “the securitization of their loan had caused the true beneficial ownership of that loan
to fall to certain certificate holders who purport to hold an interest against the Property.”
They then assert that the original lender, Gateway, “failed to record a transfer of the
beneficial interest to Defendants before the ‘closing date’ indicated on the Pooling and
Service Agreement,” and therefore their note and deed of trust were “not . . . part of the
Trust Res.” They then assert that their “Note was split apart from the deed and pooled

                                                7
into a Trust; however, proper endorsements were not made to vest the Trust with an
interest in the Property.” They claim that “[y]ears later, the entity which [they] believed
to be their servicer [Aurora] created a fraudulent lien claim by recording an assignment,”
but this assignment is void because “any assignment must be made prior to the closing
date of the trust” and “[t]his did not occur.” Finally, they assert that “any interest vested
in the original lender was sold at the time the loan was securitized, therefore, Defendants
and [the] alleged servicer had nothing to assign.”
       That is the entirety of the Landaus’ argument on their wrongful foreclosure cause
of action (with the exception of a single sentence related to leave to amend, which we
will discuss later). That argument is not sufficient to carry the day for the Landaus.
       “On appeal, a plaintiff bears the burden of demonstrating that the trial court
erroneously sustained the demurrer as a matter of law. . . . Because a demurrer tests the
legal sufficiency of a complaint, the plaintiff must show the complaint alleges facts
sufficient to establish every element of each cause of action.” (Rakestraw v. California
Physicians’ Service (2000) 81 Cal.App.4th 39, 43.) The Landaus’ argument does not
contain a single cite to legal authority or a single cite to the record on appeal -- in
particular, to the allegations in their first amended complaint. Thus, the Landaus fail to
show with appropriate cites to the record exactly what facts they pleaded in their
complaint, and they fail to show with appropriate citation to relevant legal authority how
those facts adequately stated a cause of action for wrongful foreclosure. Under these
circumstances, the Landaus have failed to carry their burden on appeal of showing error
in the sustaining of the demurrers to their cause of action for wrongful foreclosure.
       As for whether the trial court abused its discretion in denying leave to amend, the
Landaus’ entire argument on that point is that “[i]f [they] were granted leave to amend,
they would have alleged additional facts regarding Defendants’ involvement in the
improper securitization of their mortgage which ultimately led to the wrongful
foreclosure on their home.” As we have stated already, to show an abuse of discretion,

                                               8
the plaintiff “must show in what manner he can amend his complaint and how that
amendment will change the legal effect of his pleading.” (Cooper v. Leslie Salt Co.,
supra, 70 Cal.2d at p. 636.) The Landaus have not met this standard.
                                             IV
                                 Unfair Business Practices
       The Landaus contend they adequately alleged a cause of action for violation of
Business and Professions Code section 17200 et seq., which prohibits any unlawful,
unfair or fraudulent business act or practice. According to them, they alleged “multiple
unlawful and misleading practices, including making misrepresentations to [them]
regarding the ownership of their loan and recording false and misleading documents to
fabricate the missing gaps in the chain of title.” In support of this assertion, they
reference five pages of their first amended complaint. They then assert that their
complaint alleged “a violation of Civil Code §2932.5” (in the second cause of action,
which they have not attempted to separately defend on appeal) and “a violation of Civil
Code §2934a seq.” (in the third cause of action, which they also have not attempted to
separately defend on appeal). They also asserted that their complaint “incorporated as an
element thereof the [first amended complaint’s] allegations that [defendants] violated
Penal Code §115.5.” They then contend that “[b]ased on the foregoing facts, the trial
court should have overruled [the] demurrer to [their] cause of action alleging violations
of Business and Professions Code §17200.”
       We find the foregoing argument insufficient to carry the Landaus’ burden on
appeal of “demonstrating that the trial court erroneously sustained the demurrer as a
matter of law” and “show[ing] the complaint alleges facts sufficient to establish every
element of each cause of action.” (Rakestraw v. California Physicians’ Service, supra,
81 Cal.App.4th at p. 43.) The Landaus do not adequately cite to the specific allegations
of their operative complaint, instead citing only generally to the five pages that contained
their entire cause of action for unfair business practices. Furthermore, with respect to the

                                              9
specific code sections the Landaus cite, they offer nothing more than the bare citations,
i.e., they make no attempt to explain what those code sections require or prohibit and no
attempt to show how defendants’ actions contravened those requirements or prohibitions.
Accordingly, we conclude the Landaus have not shown error in the sustaining of the
demurrers to their cause of action for unfair business practices.
       As for the denial of leave to amend, the Landaus fail to adequately show “in what
manner [they] can amend [their] complaint and how that amendment will change the
legal effect of [their] pleading.” (Cooper v. Leslie Salt Co., supra, 70 Cal.2d at p. 636.)
Instead, they assert in only the broadest of terms that if allowed to amend, they could
allege additional “unlawful conduct includ[ing] but . . . not limited to the following:
(a) Instituting improper or premature foreclosure proceedings to generate unwarranted
fees; (b) Executing and recording false and misleading documents; (c) Executing and
recording documents without legal authority to do so; (d) Failing to disclose the principal
for which documents were being executed and recorded in violation of Civil Code §
1095; . . . (e) Acting as beneficiaries and trustees without the legal authority to do so; (f)
Failing to comply with Civil Code § 2932.5; and (g) Failing to notify the borrowers of
any assignment of their loan to a new creditor in violation of 15 U.S.C. § 1641(g).” We
find this insufficient to demonstrate any abuse of discretion in the denial of leave to
amend.
                                              V
                                     Breach Of Contract
       The Landaus contend they “properly alleged each and every element for a breach
of contract.” More specifically, they assert that they alleged defendants “did not comply
with the terms of the agreement they executed in the [Landaus’] loan application”
because defendants “increased the monthly required payments due on the . . . loan by
almost 75%,” and this increase “caused [the Landaus’] home to be foreclosed on.”



                                              10
       We perceive several fatal flaws in the Landaus’ argument. The contract on which
the cause of action is based appears to be the loan agreement, or related documents
executed at the outset of the loan, in which the Landaus agreed to make certain monthly
payments and the lender agreed to accept those payments. Their complaint, however,
specifically alleges that they entered into the loan transaction with Gateway, which is not
a defendant in this action. To the extent the Landaus seek to overcome this earlier,
inconsistent allegation by claiming that they and defendants “executed a written contract
stating the obligations of each party regarding the loan,” the Landaus had to set out the
terms of that written contract “verbatim in the body of the complaint” or attach a copy of
the contract to the complaint and incorporate it by reference. (Otworth v. Southern Pac.
Transportation Co. (1985) 166 Cal.App.3d 452, 459.) They did neither.
       As for leave to amend, the Landaus assert only that if given leave “they would
have alleged additional facts asserting their full performance under the terms of the
contract while Defendants breached material terms.” This is insufficient to show “in
what manner [they] can amend [their] complaint and how that amendment will change
the legal effect of [their] pleading.” (Cooper v. Leslie Salt Co., supra, 70 Cal.2d at
p. 636.)
                                             VI
                        Intentional Infliction Of Emotional Distress
       The gist of the Landaus’ cause of action for intentional infliction of emotional
distress is that defendants intentionally sold the Landaus’ property in a nonjudicial
foreclosure sale knowing “they [defendants] had no right, title, or interest” in the
property. According to the Landaus, this conduct “exceeded all bounds of decency.”
       In support of their argument, the Landaus do not cite a single legal authority.
“[E]very brief should contain a legal argument with citation of authorities on the points
made. If none is furnished on a particular point, the court may treat it as waived, and
pass it without consideration.” (9 Witkin, Cal. Proc. (5th ed. 2008) Appeal, § 701, p.

                                             11
769.) Absent any citation to relevant authority, we need not further consider this aspect
of the Landaus’ arguments on appeal.
                                               VII
                                      Declaratory Relief
       The Landaus contend they adequately stated a claim for declaratory relief because
“there is an actual dispute that exists as to the ownership of the Property and the validity,
if any, and amount, if any, of the liens.” We disagree. The Landaus’ case is based on a
nonjudicial foreclosure sale of their property that has already been completed. To the
extent the Landaus contest the validity of that sale, the dispute presented is one as to the
legal effect of past acts, not legal rights in an ongoing or future relationship.
“‘Declaratory relief operates prospectively, serving to set controversies at rest. If there is
a controversy which calls for a declaration of rights, it is no objection that past wrongs
are also to be redressed; but there is no basis for declaratory relief where only past
wrongs are involved. Hence, where there is an accrued cause of action for an actual
breach of contract or other wrongful act, declaratory relief may be denied.” (Baldwin v.
Marina City Properties, Inc. (1978) 79 Cal.App.3d 393, 407.)
       Here, any cause of action the Landaus might have had was for wrongful acts
defendants took in the past. In such a situation, there is no error in sustaining a demurrer
to a cause of action for declaratory relief.
                                       DISPOSITION
       The judgment is affirmed.

                                                           ROBIE                    , J.
We concur:


      BLEASE                 , Acting P. J.


      BUTZ                   , J.


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