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Andrea Skov v. U.S. Bank National Association

June 8, 2012

ANDREA SKOV, PLAINTIFF AND APPELLANT,
v.
U.S. BANK NATIONAL ASSOCIATION, DEFENDANT AND RESPONDENT.



(Santa Clara County Super. Ct. No. CV153635)

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

Certified for Partial Publication

Under California Rules of Court, rules 8.1105(c), 8.1110, 8.1120, only the Introduction, sections I, IIA, IID, and III are certified for publication.

Plaintiff Andrea Skov filed an action against defendant U.S. Bank National Association, as trustee for Credit Suisse First Boston CSFB 2004-AR3 (U.S. Bank), and others in which she alleged improprieties in the non-judicial foreclosure process involving her residence.*fn1 The trial court sustained U.S. Bank's demurrer to the second amended complaint and dismissed the action. Skov contends: (1) the trial court improperly took judicial notice of various recorded documents; and (2) the second amended complaint sufficiently pleaded her causes of action for wrongful foreclosure, unlawful business practices, and declaratory relief. We conclude that the second amended complaint sufficiently pleaded a violation of Civil Code section 2923.5.*fn2 Accordingly, we reverse the judgment.

I. Factual and Procedural Background

In December 2003, Skov obtained a loan of $1.5 million, which was secured by a deed of trust in her residential property in Saratoga. The deed of trust identified Skov as the "Borrower," Gateway as the "Lender," Financial Title Company as "Trustee," and MERS as "acting solely as a nominee for Lender and Lender's successors and assigns." MERS is also identified as "the beneficiary under this Security Instrument." The deed of trust further stated that "Borrower understands and agrees that MERS holds only legal title to the interests granted by the Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender's successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property."

After Skov stopped making payments pursuant to the terms of the promissory note, NDEx, which identified itself as an agent for MERS, served Skov with a notice of default on June 10, 2009. A declaration of compliance with section 2923.5 was recorded with the notice of default. On July 16, 2009, MERS assigned all beneficial interest in the deed of trust to U.S. Bank. On July 20, 2009, U.S. Bank substituted NDEx as trustee for Financial Title Company. On September 18, 2009, NDEx recorded a notice of trustee's sale, which had been sent to Skov.

On June 10, 2010, Skov filed her second amended complaint and alleged nine causes of action, only three of which are the subject of the present appeal. The first cause of action for wrongful disclosure alleged that there were several improprieties in the assignment, transfer and exercise of the power of sale in the deed of trust. More specifically, Skov alleged that since U.S. Bank and MERS were not assignees of the original note identified in the deed of trust, they did not have the right to exercise the power of sale contained in the deed of trust, and thus U.S. Bank was not entitled to any debt on the property. It was also alleged that U.S. Bank failed to comply with section 2923.5 "until on or about July 10, 2009." The eighth cause of action for unlawful business practices (Bus. & Prof. Code, § 17200 et seq.) alleged that U.S. Bank failed to comply with section 2923.5 because it did not contact or attempt to contact her to discuss her options to avoid foreclosure prior to filing the notice of default. The ninth cause of action for declaratory and injunctive relief sought a determination of the parties' legal rights and duties and that the foreclosure of the property be permanently enjoined. Skov also sought compensatory and punitive damages.

U.S. Bank filed a demurrer to the second amended complaint. In support of its demurrer, U.S. Bank requested judicial notice of the deed of trust, the notice of default, the notice of default declaration, the assignment of the deed of trust from MERS to U.S. Bank, the substitution of trustee, and the notice of trustee's sale. The trial court granted the request for judicial notice, sustained the demurrer without leave to amend, and dismissed the action with prejudice. Skov filed a timely appeal.

II. Discussion

A. Standard of Review

In reviewing an order sustaining a demurrer, " 'we examine the complaint de novo to determine whether it alleges facts sufficient to state a cause of action under any legal theory, such facts being assumed true for this purpose. [Citations.]' (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415 [(McCall)].) We may also consider matters that have been judicially noticed. [Citations.]" (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) "Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment. [Citation.]" (Cooper v. Leslie Salt Co. (1969) 70 Cal.2d 627, 636.)

B. Judicial Notice

Conceding that the trial court could properly take judicial notice of recorded documents, Skov contends it improperly took judicial notice of "the truth, validity and/or legal effect of [U.S. Bank's] foreclosure documents . . . ." (Capitalization & boldface omitted.)

This issue was recently considered in Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256 (Fontenot). In Fontenot, the complaint sought injunctive relief and damages for wrongful foreclosure, and alleged, among other things, the improper transfers of the promissory note and security. (Id. at p. 261.) In ruling on the defendant's demurrer to the complaint, the trial court took judicial notice of two deeds of trust, an ...


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