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Jon Carson et al v. Wells Fargo Bank


December 15, 2011


(Super. Ct. No. PC20090078)

The opinion of the court was delivered by: Murray , J.

Carson v. Wells Fargo Bank



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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super. Ct. No. PC20090078)

Civil Code section 2923.5*fn1 requires that, before a non-judicial foreclosure for default on a mortgage, a lender must contact the borrower, "assess the borrower's financial situation," and "explore options for the borrower to avoid foreclosure." Plaintiffs Jon Carson and Jennifer Carson, alleging violation of section 2923.5 and other claims, sought injunctive and declaratory relief to prevent foreclosure by defendants.*fn2 In these consolidated appeals from the trial court's order partially denying plaintiffs' request for preliminary injunction and from a judgment of dismissal following demurrer, plaintiffs contend the trial court erred by: (1) requiring them to make cash payments, instead of allowing them to post a bond, to secure a preliminary injunction; (2) allowing defendants to cure a violation of section 2923.5 by republishing the notice of sale; and (3) sustaining defendants' demurrer without leave to amend.

We conclude that plaintiffs received the only potential remedy for a section 2923.5 violation -- postponement of the foreclosure sale while defendants corrected the defect. Plaintiffs do not allege or propose an amendment to allege any viable claim. Therefore, the trial court did not err in sustaining the demurrer without leave to amend and any error in connection with the preliminary injunction was harmless. Accordingly, we affirm the order and judgment.*fn3


Following a ruling on demurrer dismissing a complaint without leave to amend, we assume the truth of all factual allegations properly pleaded in the plaintiffs' operative complaint, as well as matters that may be judicially noticed. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081; Code Civ. Proc., § 430.30, subd. (a).)

The first amended complaint filed on June 10, 2009*fn4 alleges:

Plaintiffs bought their residence in El Dorado Hills, California, in May 2006, executing a $1,100,000 promissory note in favor of defendants.*fn5

In February 2008, defendants gave "notice of default" (§ 2924c) because of plaintiffs' failure to make their mortgage payments.*fn6

In September 2008, section 2923.5*fn7 became operative. As will be discussed in more detail, the statute imposed new requirements for lenders and new requirements for the contents of the required notice of default and notice of sale in California non-judicial foreclosure proceedings. (Stats. 2008, ch. 69, § 2, eff. July 8, 2008, operative Sept. 6, 2008.)

On December 1, 2008, defendants recorded a notice of sale, setting a sale date of December 31, 2008 (postponed first by defendants and later by order of the court). Plaintiffs allege their copy of the notice of sale did not contain the declaration mandated by section 2923.5, and defendants misrepresented in the recorded copy of the notice of sale that they had complied with section 2923.5.

The complaint alleges defendants failed and refused "adequately" to assess plaintiffs' financial condition "as defendants did not request, nor did defendants review any verbal or written data concerning plaintiffs' financial condition." Plaintiffs also alleged that defendants failed and refused "adequately" to explore options, "to wit: a) Defendants made a verbal agreement with plaintiffs to modify the note, but defendants negligently, intentionally and/or in bad faith, subsequently submitted loan modification documents which materially differed from the terms of the verbal agreement reached by [the parties] all in violation of . . . section 2923.5; and b) Defendants never responded in writing" to a February 2009 letter from plaintiffs' counsel suggesting options to avoid foreclosure.

The pleading also alleges defendants' lending practices and "handling, packaging, processing, closing and foreclosure practices" violated federal laws. With the exception of the Truth in Lending Act (TILA) claim, the complaint does not set forth what specific provisions of the laws had been violated or facts describing the manner in which these laws had been violated.

The pleading sought to stop the foreclosure.

In February 2009, plaintiffs obtained a temporary restraining order and sought a preliminary injunction to enjoin the sale. In his declaration in support of the application for preliminary injunction enjoining foreclosure sale, Mr. Carson stated that plaintiffs' copy of the notice of sale did not include the declaration required by section 2923.5. He also declared, "I am informed and believe that defendant(s) did not assess my financial situation as I was not asked for any financial statements, balance sheets, income statements, profit and loss statements, tax returns or any other documents regarding my financial situation. [¶] . . . Although there were discussions, and what I believed were proposed agreements or agreement(s) regarding forbearance, I am informed and believe that the defendant(s) did not properly or fully explore options for my wife and I to avoid foreclosure of the property including, realistically and reasonably affordable loan modification, short-sale and/or deed in lieu of foreclosure options."

Mr. Carson further declared that he believed he reached a forbearance agreement for a loan modification with defendants' agent, Vondoria Lindsey, in March 2008. Ms. Lindsey said new loan papers would be sent and he would receive them no later than July 2008. Plaintiffs made payments from March through June 2008 pursuant to their understanding of the new agreement. Ms. Lindsey said no further payments would be due until plaintiffs received the loan papers. When Mr. Carson finally received the new loan papers in October 2008, the terms differed from what he thought they were supposed to be. He contacted defendants, who said Ms. Lindsey was not available, there would be no changes, and he would have to sign the papers "or else." Plaintiffs did not sign or return the papers.*fn8

In opposing the preliminary injunction, defendants asserted that they had, in fact, attached the section 2923.5 declaration to the copy of the notice of sale recorded with the county recorder but had not attached it to the copies of the notice of sale mailed to plaintiffs and posted on the property.

After a May 2009 hearing on the preliminary injunction, the trial court issued a written order (dated June 29, 2009) concluding: (1) section 2923.5 does not require lenders to agree to modifications, and any such mandate requiring a lender to modify a duly executed contract would constitute an impairment of contract in violation of the federal Contracts Clause (U.S. Const., art. I, § 10, cl. 1); (2) the parties "did in fact have discussions sufficient to satisfy" section 2923.5; and (3) while the court was not requiring a new notice of sale, defendants could easily give a renewed notice of sale with a section 2923.5 declaration attached to each copy, "thereby curing the only remaining technical defect urged by [plaintiffs]." The trial court granted a preliminary injunction, to expire at midnight July 13, 2009, on the condition that plaintiffs pay defendants $33,468.66 by May 22, 2009, and $11,156.22 on June 1 and July 1, 2009. The court order specified that, while the injunction was pending, defendants "may generate a new notice of sale," attaching a section 2923.5 declaration to each copy (mailed, posted, published, and recorded) and "undertake whatever acts it deems appropriate short of actually conducting the trustee's sale . . . ."

Plaintiffs failed to make the payments required by the court order and instead filed a notice of appeal on August 6, 2009. The trial court denied plaintiffs' request for a stay of proceedings pending the appeal.

On August 3, 2009, defendants issued a new notice of sale, setting a sale date of August 19, 2009, and attaching a copy of the section 2923.5 declaration.

On August 19, 2009, Deutsche Bank bought the property at the foreclosure sale. The trustee's deed was recorded August 26, 2009.

Defendants demurred to the first amended complaint. The trial court sustained the demurrer without leave to amend. Plaintiffs fail to include in the record on appeal the demurrer, the trial court's written explanation of its ruling, or any indication that the statutory requirement for a statement of specific grounds was waived.*fn9 However, while a trial court's oral statement of reasons is not necessarily controlling (People v. Butcher (1986) 185 Cal.App.3d 929, 936-937), we observe the transcript of the hearing shows the trial court said, "the issues under [section] 2923.5 have been thoroughly addressed previously, and I don't believe there's any reason to go back to those. [¶] The statute requires that there be discussion. It doesn't require that there be some resolution, and I think that there is ample evidence that that [discussion] has taken place."

On November 17, 2009, the trial court entered a judgment of dismissal. Plaintiffs filed a timely notice of appeal. On motion of the parties, we consolidated the separate appeals concerning the trial court's ruling on the preliminary injunction and the trial court's ruling on the demurrer.

We note related court filings not at issue in these appeals. On October 26, 2009, plaintiffs filed a COMPLAINT TO SET ASIDE FORECLOSURE SALE, which they dismissed without prejudice in January 2010. Also in January 2010, a stipulated judgment was entered in an unlawful detainer case filed by the buyer at the foreclosure sale (Deutsche Bank), pursuant to which plaintiffs agreed to vacate the property by February 14, 2009. The judgment in the unlawful detainer action was "without prejudice to each party's respective claims, defenses, and/or remedies" in these appeals.


I. The Demurrer

We begin with the demurrer because it establishes the lack of a viable claim, which will also dispose of the appeal regarding the preliminary injunction. We conclude the pleading fails to state a viable claim.

A. Standard of Review

"'The function of a demurrer is to test the sufficiency of the [pleading] as a matter of law, and it raises only a question of law. [Citations.] On a question of law, we apply a de novo standard of review on appeal.' [Citation.]" (First Aid Services of San Diego, Inc. v. California Employment Development Dept. (2005) 133 Cal.App.4th 1470, 1476.) "On appeal from a judgment of dismissal after a demurrer has been sustained without leave to amend, the plaintiff has the burden of proving error." (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315.) The burden is on the plaintiffs to establish a reasonable possibility they could state a valid cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 ["Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading"]; Wilner v. Sunset Life Insurance Company (2000) 78 Cal.App.4th 952, 959.)

B. Section 2923.5

Before addressing plaintiffs' arguments, we shall discuss a contention by Wells Fargo that section 2923.5 does not give borrowers a private right of action against lenders.

In Mabry v. Superior Court (2010) 185 Cal.App.4th 208 (Mabry), Division Three of the Fourth Appellate District held that section 2923.5 provides a limited private right of action by which borrowers may seek court-ordered postponement of non-judicial foreclosures on their residences until their mortgage lenders comply with the statute. (Mabry, supra, at p. 214.) Mabry said section 2923.5 does not require the lender to modify the loan. Rather, the only remedy for a section 2923.5 violation is a postponement of the foreclosure sale. Any other interpretation would be preempted by federal banking laws.*fn10 (Mabry, supra, at pp. 214, 226-232.)

Some defendants rely on Mabry in their respondents' brief, arguing plaintiffs already received the postponement remedy authorized by Mabry.

Wells Fargo, in its separate respondent's brief, argues that Mabry, which relied in part on the Restatement of Torts to find a private right to enforce section 2923.5, was wrongly decided and is undermined by Lu v. Hawaiian Gardens Casino, Inc. (2010)50 Cal.4th 592 (Lu), published two months after Mabry. Lu rejected the Restatement of Torts approach for determining whether a statute provides a private right of action.*fn11 (Lu, supra, 50 Cal.4th at pp. 594-595, 602-603 [Labor Code statute, prohibiting employers from taking gratuities left by patrons for employees, did not confer private cause of action on employees].) Plaintiffs did not file a reply brief.*fn12

We need not address the issue of whether section 2923.5 creates a private right of action because, even assuming plaintiffs have a private right of action for section 2923.5 violations, and further assuming for the sake of argument that the first notice of sale violated section 2923.5, the only possible remedy is postponement of the foreclosure sale while the lender complies with the statute. (Mabry, supra, 185 Cal.App.4th at p. 214; Hamilton v. Greenwich Investors, XXVI, LLC (2011) 195 Cal.App.4th 1602, 1605, 1616 (Hamilton); See also Argueta v. J.P. Morgan Chase (E.D.Cal. Apr. 12, 2011, No. Civ. 2:11-441 WBS GGH) ___ F.Supp.2d ___ [2011 U.S.Dist. Lexis 41300 at pp. *18-*19.) Here, plaintiffs received that postponement remedy when defendants issued a new notice of sale complying with section 2923.5.

We make one other preliminary observation concerning section 2923.5 before addressing plaintiffs' specific arguments. "'There is nothing in section 2923.5 that even hints that noncompliance with the statute would cause any cloud on title after an otherwise properly conducted foreclosure sale.'" Davenport v. Litton Loan Servicing, L.P. (N.D.Cal. 2010) 725 F.Supp.2d 862, 877 (Davenport), quoting Mabry, supra, 185 Cal.App.4th at p. 235.) As the property was already sold at foreclosure, it does not appear that any remedy remains under section 2923.5.

Nevertheless, we will address plaintiffs' arguments on appeal.

Plaintiffs argue that the trial court erred by entering a judgment of dismissal because defendants violated section 2923.5*fn13 by failing to review financial documents and thereby assess their financial situation in good faith, and by failing to negotiate a modification of the mortgage in good faith before issuing the notice of sale.

Plaintiffs' claim that section 2923.5 requires the lender to obtain and review financial records from the homeowner is inconsistent with the text of section 2923.5, subdivision (a)(2), which states the lender "shall contact the borrower in person or by telephone" (italics added) and "[t]he assessment of the borrower's financial situation and discussion of options may occur during the first contact . . . ." Since the statute allows the assessment to occur by telephone and requires only one such contact, the statute obviously does not require the lender to obtain and review the borrower's financial documents.

As to plaintiffs' claim that section 2923.5 requires lenders to negotiate a modification of the mortgage, here defendants did offer a loan modification. Plaintiffs declined. That the terms were not as favorable as allegedly promised verbally by defendants' agent, Ms. Lindsey, does not constitute a section 2923.5 violation. This case is similar to Davenport. There, the borrower acknowledged in her complaint that she and her attorney engaged in loan modification discussions with the lender. Ultimately, the lender declined. The court held that these facts "actually negate a claim that section 2923.5 was violated." (Davenport, supra, 725 F.Supp.2d at p. 877.)

In any event, as we have noted, section 2923.5 does not require the lender to modify the loan. (Mabry, supra, 185 Cal.App.4th at pp. 214, 231; Hamilton, supra, 195 Cal.App.4th at p. 1617; see also Davenport, supra, 725 F.Supp.2d at p. 877; Ortiz v. Accredited Home Lenders, Inc. (S.D.Cal. 2009) 639 F.Supp.2d 1159, 1166.) The statute requires only discussion relating to assessment of the borrower's financial situation and an exploration of options to avoid foreclosure. An assessment can be something as simple as asking, "why can't you make your payments?" (Mabry, supra, 185 Cal.App.4th at p. 232.) An exploration of options need be nothing more than "merely telling the borrower the traditional ways that foreclosure can be avoided (e.g., deeds 'in lieu,' workouts, or short sales)." (Ibid.)

Plaintiffs make much of defendants' refusal to explore the four options set forth in plaintiffs' counsel's February 2009 letter. We note that plaintiffs did not list the proposed options in the operative complaint; nor did they attach a copy of the letter to the operative complaint. In any event, by the time plaintiffs' counsel sent the letter, defendants had already met their obligations under section 2923.5. The statute required nothing further from them. Defendants were not required to respond to the letter.

The statutory framework governing non-judicial foreclosure sales is intended to be comprehensive. (Moeller v. Lien (1994) 25 Cal.App.4th 822, 834.) Because of the exhaustive nature of the non-judicial foreclosure statutes, California appellate courts have generally refused to read any additional requirements into the statutory scheme. (Gomes v. Countrywide Home Loans (2011) 192 Cal.App.4th 1149, 1155 (Gomes) [rejecting contention that the court could read into section 2924 a private right for borrowers to challenge non-judicial foreclosure grounded on the claim that owner of the note had not authorized foreclosure].) We conclude section 2923.5 does not require lenders to agree to modification or otherwise negotiate a modification in good faith.

We reject, as lacking in precedential authority, plaintiffs' reliance on a Ventura County trial judge's ruling in an unrelated case, that section 2923.5 requires a good faith effort by lenders to avoid foreclosure, a factual issue that cannot be determined at the pleading stage. We also reject plaintiffs' reliance on a tentative ruling of a federal bankruptcy judge in a case unrelated to the one before us that an assignee had no standing to foreclose. Plaintiffs fail to support their assertion that the federal case would give them grounds to amend their complaint.

Plaintiffs also contend that defendants were required to start the entire foreclosure process anew by issuing a new notice of default after their deficient notice of sale. We disagree. Defendants issued the notice of default on February 1, 2008 -- several months before section 2923.5 took effect in September 2008. The Legislature accounted for this situation. If a notice of default was issued before the enactment of section 2923.5, a lender need not issue a new notice of default but must include as part of the notice of sale a declaration stating it contacted the borrower to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. (See § 2923.5, subd. (c)(1), quoted in fn. 13, ante.) While there was a dispute about whether the original notice of sale issued in December 2008 complied with the statutory requirements in section 2923.5, the holders cured any defect by mailing, recording and publishing another notice of sale in August 2009. It is undisputed that the new notice of sale included the declaration required under section 2923.5.

Plaintiffs claim that Mabry stands for the proposition that section 2923.5 violations require reissuance of the notice of default, not merely reissuance of the notice of sale. However, in Mabry, it was the notice of default itself that violated section 2923.5. (Mabry, supra, 185 Cal.App.4th at p. 216.) Plaintiffs cite no authority that a defective notice of sale under section 2923.5 requires the lender to start the foreclosure process from the beginning by issuing a new notice of default where, as here, the notice of default issued before section 2923.5 became operative. As indicated, California courts have generally refused to read any additional requirements into the statutory scheme. (Gomes, supra, 192 Cal.App.4th at p. 1155.)

We conclude plaintiffs have no viable claim under section 2923.5.

C. Other Claims

Plaintiffs contend they have a cause of action for defendants' failure to honor the oral agreement to modify the loan according to the terms Mr. Carson says he reached with the defendants' agent, Ms. Lindsey. Plaintiffs characterize this as a bad faith "bait & switch" in contravention of the policy underlying section 2923.5, to keep Californians in their homes. We reject the argument because the statute of frauds bars enforcement of an oral agreement to modify a real estate loan. "An agreement for the sale of real property or an interest in real property comes within the statute of frauds. (Civ. Code, § 1624, subd. (a)(3).)" (Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 552 (Secrest).) Secrest held the statute of frauds barred homeowners from relying on a written modification agreement unsigned by the lender. (Id. at pp. 547-549, 552.) That the homeowners had paid some money under the unsigned agreement was not sufficient part performance to take the oral agreement out of the statute of frauds, because a party paying money under an invalid contract would have an adequate remedy at law.*fn14 (Id. at p. 555.)

Additionally, plaintiffs insinuate fraud but have not alleged, and do not claim they can amend to allege, fraud with the requisite specificity. (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519.) Instead, in their appellate briefing, plaintiffs make the bald contention that defendants' failure to perform on the agreed loan modification "smacks of bad faith and/or fraud and/or mistake." (Italics added.)

Thus, plaintiffs have no viable claim to enforce the alleged oral agreement.

Plaintiffs' first amended complaint alleges the lenders violated the federal Real Estate Settlement and Procedures Act (12 U.S.C. §§ 2601-2616), the Truth in Lending Act (TILA) (15 U.S.C. § 1601), the Federal Trade Commission Act (15 U.S.C. § 41), the Equal Opportunity Act (15 U.S.C. § 1691) and the Fair Housing Act (42 U.S.C. § 1691). However, except for the alleged TILA violation, plaintiffs did not identify specific provisions of these statutes or any conduct by defendants that violated these federal laws.

On appeal, plaintiffs argue they could amend to allege that these federal laws were violated at the inception of their loan because their mortgage broker artificially inflated their income on the loan application, which was taken over the phone, and plaintiffs had no knowledge of the false information. Plaintiffs imply that they would not have been granted the loan had their true financial situation been disclosed on the mortgage documents by the mortgage broker. We reject this claim. Even aside from the fact that defendants appear to be successors in interest to the original lender and not involved in the alleged fraud, the claim of fraudulent misrepresentation must fail because "[a] lender 'owes no duty of care to the [borrowers] in approving their loan.' (Wagner v. Benson (1980) 101 Cal.App.3d 27, 35.) A lender is under no duty 'to determine the borrower's ability to repay the loan. . . . The lender's efforts to determine the creditworthiness and ability to repay by a borrower are for the lender's protection, not the borrower's.' (Renteria v. U.S. (D.Ariz. 2006) 452 F.Supp.2d 910, 922-923 [borrowers rely on their own judgment and risk assessment in deciding whether to accept the loan].)" (Perlas v. GMAC Mortgage, LLC (2010) 187 Cal.App.4th 429, 436.)

Plaintiffs claim they did not know of the alleged fraud because they did not sign the loan application until the closing, when they were "put into a conference room with a voluminous stack of documents" to sign. Although Mr. Carson is a real estate broker, plaintiffs contend the loan documents were not properly explained to them and they were not told they could rescind within three days, as required by TILA, and therefore TILA gave them three years to rescind. (15 U.S.C.A. § 1635(f); 12 C.F.R. § 226.23(a)(3) (2010) [three days to rescind, but if required notice or material disclosures are not delivered, the right to rescind expires three years after consummation].)

However, plaintiffs do not reply to defendants' argument that the transfer of property pursuant to the foreclosure sale terminated any right to rescind under TILA. No reply was forthcoming because plaintiffs' position is untenable. "'An obligor's right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this part have not been delivered to the obligor.' 15 U.S.C. § 1635(f) (emphasis added); see also 12 C.F.R. § 226.23(a)(3) (stating same)." (Mehta v. Wells Fargo Bank (S.D.Cal. 2010) 737 F.Supp.2d 1185, 1192.)

Accordingly, plaintiffs fail to state a viable cause of action and fail to demonstrate they can amend their complaint to state a cause of action.

We conclude the trial court did not err in sustaining the demurrer without leave to amend.

II. Preliminary Injunction

We review an order granting, denying, dissolving or refusing to dissolve a preliminary injunction under an abuse of discretion standard. (Salazar v. Eastin (1995) 9 Cal.4th 836, 849-850.) A preliminary injunction is an interim remedy designed to maintain the status quo pending a decision on the merits. (Gray v. Bybee (1943) 60 Cal.App.2d 564, 571.) It is not, in itself, a cause of action. Thus, a cause of action must exist before injunctive relief may be granted. (Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168.) Accordingly, where the complaint fails to state a cause of action, any order granting a preliminary injunction must be reversed. (MaJor v. Miraverde Homeowners Assn. (1992) 7 Cal.App.4th 618, 623-624.)

Since, as we have concluded, the complaint fails to state a viable claim, plaintiffs cannot show any possible prejudice in the trial court's ruling on the preliminary injunction. We therefore need not address plaintiffs' challenges to the order on the preliminary injunction, including their contention that the court should have allowed them to post a bond rather than make specified cash payments on their mortgage in order to secure a preliminary injunction staying the foreclosure.

We conclude plaintiffs fail to show grounds for reversal of the order on the preliminary injunction or the judgment of dismissal upon demurrer.


The order and judgment are affirmed. Defendants shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)

I concur: BUTZ , J.

I concur in the result because the case is moot.

The case involves an action by borrowers (the Carsons) to enjoin the non-judicial foreclosure sale of their residential property on the ground the trustee failed to comply with the notice and financial assessment provisions of Civil Code section 2923.5, subdivision (c).

Section 2923.5, subdivision (c) applies when, as here, the notice of default is filed prior to the enactment of the section. It provides that the trustee "shall, as part of the notice of sale filed pursuant to Section 2924f, include a declaration" that "[s]tates that the borrower was contacted to assess the borrower's financial situation and to explore options for the borrower to avoid foreclosure." Section 2924f, subdivision (b)(1) provides that "before any sale of property can be made under the power of sale contained in any deed of trust" the notice specified therein must be given. (Italics added.) Since the notice required by section 2923.5, subdivision (c) is made "part of" the notice required by section 2924f, subdivision (b)(1), which must be given "before any sale" of the property, a failure to comply with the notice provisions bars the sale of the property. (Italics added.) The appropriate remedy therefore is to enjoin the sale pending compliance with the provisions of section 2923.5, subdivision (c).

The borrowers seek review of an order sustaining a demurrer to their first amended complaint. The amended complaint sought to enjoin the defendants from selling their property pursuant to a non-judicial foreclosure. It sets forth a single cause of action based on a violation of section 2923.5, subdivision (c). It asserts that the notice of sale did not contain the language mandated by Civil Code section 2923.5, subdivision (c), that defendants failed to "adequately assess" the borrowers' financial situation, and failed to "adequately explore" options to avoid foreclosure.

A stay of the sale was granted by the trial court on conditions which the Carsons did not meet and a motion for preliminary injunction was denied. Thereafter a demurrer to the amended complaint was granted. Consequently, there are two appeals, one from sustaining of the demurrer, and the other from the denial of the injunction.

Subsequent to these events the subject property was sold and the Carsons do not here challenge the sale.*fn15 Accordingly, there is no relief which this court could provide and the case is moot.

BLEASE , Acting P. J.

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