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Lazo v. Summit Management Co.

United States District Court, E.D. California

July 9, 2014

MANUEL LAZO and ORALIA LAZO, Plaintiffs,
v.
SUMMIT MANAGEMENT COMPANY, LLC; CALIBER HOME LOANS, INC; and VERICREST OPPORTUNITY LOAN TRUST 2011-NPL1, Defendants.

FINDINGS AND RECOMMENDATIONS GRANTING IN PART DEFENDANTS' MOTION TO DISMISS (Doc. 14)

JENNIFER L. THURSTON, Magistrate Judge.

Summit Management Company, LLL; Caliber Home Loans, Inc.; and Vericrest Opportunity Loan Trust 2011-NPL1 (collectively, "Defendants") seek dismissal of the complaint filed by Plaintiffs Manuel Lazo and Oralia Lazo pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 14.) The matter was referred for the entry of Findings and Recommendations pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 72. ( See Doc. 16.) Because the Court determined the matter was suitable for decision without oral argument, the motion is deemed submitted pursuant to Local Rule 230(g). For the following reasons, the Court recommends Defendants' motion be GRANTED IN PART.

I. Factual and Procedural History

Plaintiffs initiated this action by filing a complaint against Defendants Caliber Home Loans, Inc. ("Caliber"); Summit Management Company, LLC ("Summit"); and Vericrest Opportunity Loan Trust 2011-NPL1 ("Vericrest") alleging twenty-one causes of action based upon the foreclosure of the mortgage on their primary residence. (Doc. 1.) Defendants filed a motion to dismiss on March 10, 2014, asserting Plaintiffs' complaint fails to state a claim upon which relief can be granted. (Doc. 14.) Defendants contend the complaint should be dismissed without leave to amend, because Plaintiffs cannot state facts sufficient to cure the defects of the complaint. ( Id. )

II. Background and Plaintiffs' Allegations

Plaintiffs allege they purchased real property identified as "Assessor's Parcel Number XXX-XXX-XX-XX-X, " commonly known as 4418 Serene Oak Drive in Bakersfield, California ("the Property") on May 20, 2004. (Doc. 1 at 3-5, ¶¶ 5, 15.) On November 1, 2005, Plaintiffs financed the Property with Ameriquest Mortgage Company, executing a note in the amount of $279, 000.00. ( Id. at 5, ¶ 16.) A Deed of Trust was recorded on the Property and assigned document number XXXXXXXXXX on November 1, 2005, "identifying Plaintiff as "Trustor, " identifying Ameriquest Mortgage Company as "Lender, " and identifying Town and Country Title Services, Inc. as the "Trustee." ( Id. at 5, ¶ 16.)

On April 12, 2007, S.A. Wileman, Sr., attorney for Ameriquest Mortgage Company, signed an Assignment Deed of Trust, which assigned the Property to Citifinancial Mortgage Company, Inc." (Doc. 1 at 6, ¶ 17.) The Assignment, Kern County Recorder document number XXXXXXXXXX, included "the described deed of trust, together with certain note(s) described with all interest, all liens, and any right due or to become due thereon..." ( Id. ) Plaintiffs allege the Assignment "described the deed of trust (document XXXXXXXXXX) but did not describe the note(s).'" ( Id. )

"Citifinancial Mortgage Company, Inc. merged out and became CitiMortgage, Inc." on July 1, 2006. (Doc. 1 at 6, ¶ 18.) Plaintiffs allege they were not notified of the merger, but received a letter dated June 11, 2008, which informed Plaintiffs the servicing of their loan would be transferred to CitiMortgage, effective July 1, 2008. ( Id. at 7, ¶ 19.) According to Plaintiffs, "The problem with this is that CitiFinancial Mortgage Corporation' does not exist." ( Id. ) Further, Plaintiffs report that "[t]here is no known record of any subsequent assignment by either Citifinancial Mortgage Company, Inc. or CitiMortgage, Inc." ( Id. at 7-8, ¶ 20.) Plaintiffs allege they later received notice that the servicing of their loan was being transferred from CitiMortgage to Defendant Vericrest effective October 20, 2010. ( Id. at 8, ¶ 21.)

Plaintiffs contend that CitiMortgage and Defendants Caliber and Vericrest agreed to provide home mortgage loan modifications through the Home Affordable Modification Program ("HAMP"). (Doc. 1 at 15-16, ¶¶ 33-41.) Plaintiffs allege that in January 2010, CitiMortgage provided Plaintiffs with a HAMP Trial Payment Plan ("TPP"), under which Plaintiffs were required to make three payments. ( Id. at 19, ¶ 48.) Plaintiffs allege they made the payments, but "CitiMortgage failed to provide a permanent loan modification and transferred the servicing rights to Defendant Caliber." ( Id., ¶ 49.) Plaintiffs assert that CitiMortgage informed them that Caliber was servicing their loan and "would honor the HAMP requirements since the TPP was completed." ( Id. at 18, ¶ 45.) However, Plaintiffs report that Caliber failed to honor the completed TPP. ( Id., ¶¶ 45, 49.)

According to Plaintiffs, they submitted "at least three separate and complete loan modification packages" to Caliber in late 2010 and 2011, each of which was denied. (Doc. 1 at 18, ¶ 46; id. at 20, ¶ 51.) Caliber sent Plaintiffs an approval letter dated February 21, 2011, stating that their request for modification would be approved if they made "a good faith' payment of $6, 120.20." ( Id. at 20, ¶ 52.) Plaintiffs allege this cannot be required under HAMP, and they did not make the payment. ( Id. )

Plaintiffs allege that "a Notice of Default and Election to Sell Under Deed of Trust was recorded on the Property by Summit Management Company, LLC, as Agent for Beneficiary'" on April 28, 2011. (Doc. 1 at 8, ¶ 22.) Plaintiffs assert that "there is no assigned beneficiary identified and Defendant Summit is not the beneficiary." ( Id. ) Further, Plaintiffs report that Summit is registered with California "as a foreign limited liability company from the State of Delaware, " but a search of the Delaware Division of Corporations reveals no such entity. ( Id. at 12, ¶¶ 29-30.) Summit recorded a second "Notice of Default and Election to Sell Under Deed of Trust" with the Kern County Recorder's Office on May 11, 2011. ( Id. at 9, ¶ 23.) Plaintiffs allege that the Notices of Default failed to identify the beneficiary, and the only differences were that the default amount increased and the second notice required document to be mailed to Vericrest, at the same address as Summit. ( Id., ¶¶ 24-25.)

Plaintiffs allege that a Substitution of Trustee was recorded on the Property on August 15, 2011, through which "Summit was substituted in place of Town and Country Title Services, Inc. as the Trustee." (Doc. 1 at 10, ¶ 26.) Plaintiffs contend the document "contains a number of fatal defects and its voidness can be determined on its face" because:

The Substitution of Trustee document states: "Whereas, the undersigned is the present Beneficiary under said Deed of Trust... the undersigned hereby substitutes Summit Management Company, LLC, as Trustee..." The Substitution is signed on April 26, 2011, by Nivin Youssef, AVP, for Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1, as Attorney in Fact. Neither on the execution date of April 26, 2011, or on the recording date of August 16, 2011, was the Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1 the executing person or entity the present Beneficiary' under the Deed of Trust or Note. There is no Attorney in Fact document attached setting forth any such authority to act for the unidentified present Beneficiary' and there is an internal contradiction with the notary, Carrie Anderson, attesting that Nivin Youssef, AVP, came before her on August 16, 2011, when the Substitution of Trust is, on its face, dated April 26, 2011. Most importantly, there is no record that Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1 had authority to sign for the last known beneficiary following the assignment to Citifinancial Mortgage Company, Inc. or that Citifinancial Mortgage Company, Inc. assigned or otherwise transferred the Deed of Trust and/or Note to Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1.

(Doc. 1 at 10, ¶ 27.)

Plaintiffs allege that Summit recorded a Notice of Trustee's Sale with the Kern County Recorder's Office on August 11, 2011, "seeking an unpaid balance of $293, 403.46." (Doc. 1 at 10-11, ¶ 28.) According to Plaintiffs, "Caliber owned, controlled, and otherwise directed the activities of Defendant Summit, ignoring independent legal entity status." ( Id. at 14, ¶ 34.) Plaintiffs assert that Caliber "sought to defraud and hide the true ownership, operation, control, and to prevent liability for Defendant Summit and to protect their own misdeeds." ( Id. ) Further, Plaintiffs report Summit filed paperwork "in other legal proceedings, " in which it was identified as a limited liability company formed in Delaware with Caliber is its sole member. ( Id., ¶ 35.)

Plaintiffs allege that on August 17, 2011, the Assignment of Deed of Trust was signed, and recorded on October 6, 2011, the same date as a Trustee's Deed Upon Sale was Recorded. (Doc. 1 at 11-12, ¶¶ 27, 30.) The Assignment of Deed of Trust assigned "the Deed of Trust and Note to Wells Fargo Delaware Trust Company, N.A., as Trustee for Vericrest Opportunity Loan Trust 2011-NPL1 stating "the undersigned corporation hereby grants, assigns, and transfers to... All beneficial interest under that certain Deed of Trust... together with the Promissory Note secured by said Deed of Trust..." ( Id., 30.)

Based upon the foregoing facts, Plaintiffs initiated this action by filing a complaint on December 10, 2013, asserting the following causes of action: (1) cancellation of instruments pursuant to Cal. Civ. Code § 3412, (2) quiet title, (3) wrongful foreclosure based on Cal. Comm. Code § 3301, (4) wrongful foreclosure based on Cal. Civ. Code § 2934a(a)(1), (5) wrongful foreclosure based on Cal. Civ. Code § 2932.5, (6) violation of the Racketeer Influenced and Corrupt Organizations ("RICO") Act, (7) breach of contract with servicer participation agreement or Making Home Affordable Plan, (8) violations of the federal and state Fair Debt Collections Acts, (9) breach of contract with the trial payment plan agreement, (10) promissory estoppel, (11) fraud based on false assignment, (12 and 13) intentional fraud based on Cal. Civ. Code § 2923.5(b), (14) to set aside trustee sale, (15) cancellation of trustee's deed, (16) slander of title, (17) civil conspiracy, (18) violations of Cal. Bus. & Prof. Code §17200, (19) imposition of constructive trust, (20) declaratory relief, and (21) accounting.

In response, Defendants filed the motion to dismiss now pending before the Court, seeking dismissal of all of Plaintiffs' claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 14.)

III. Legal Standards for a Motion to Dismiss

A Rule 12(b)(6) motion "tests the legal sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). Dismissal under Rule 12(b)(6) is appropriate when "the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). Thus, under Rule 12(b)(6), "review is limited to the complaint alone." Cervantes v. City of San Diego, 5 F.3d 1273, 1274 (9th Cir. 1993).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Supreme Court explained,

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief.'"

Iqbal, 556 U.S. at 678 (internal citations, quotation marks omitted). Further, allegations of a complaint must be accepted as true when the Court considers a motion to dismiss. Hospital Bldg. Co. v. Rex Hospital Trustees, 425 U.S. 738, 740 (1976).

A court must construe the pleading in the light most favorable to the plaintiff, and resolve all doubts in favor of the plaintiff. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). "The issue is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to officer evidence to support the claims. Indeed it may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). However, the Court "will dismiss any claim that, even when construed in the light most favorable to plaintiff, fails to plead sufficiently all required elements of a cause of action." Student Loan Marketing Assoc. v. Hanes, 181 F.R.D. 629, 634 (S.D. Cal. 1998). Leave to amend should not be granted if "it is clear that the complaint could not be saved by an amendment." Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005).

IV. Requests for Judicial Notice

Defendants filed a request for judicial notice in conjunction with the motion to dismiss on March 10, 2014. (Doc. 15.) Specifically, Defendants seek judicial notice of the following documents: (1) the Deed of Trust recorded in the official records of Kern County as Instrument No. 0205303251, (2) the Assignment of Deed of Trust recorded in the official records of Kern County as Instrument No. 02060997, (3) a letter to Plaintiffs dated June 11, 2008, (4) a letter to Plaintiffs dated October 20, 2010, (5) the Notice of Default recorded in the official records of Kern County as Instrument No. 0211055277, (6) the Notice of Default recorded in the official records of Kern County as Instrument No. 0211061330, (7) the Notice of Trustee's Sale recorded in the official records of Kern County as Instrument No. 0211104032, (8) the Trustee's Deed Upon Sale recorded in the official records of Kern County as Instrument No. 000211130634; (9) the Substitution of Trustee recorded in the official records of Kern County as Instrument No. 0211104031; and (10) the California Secretary of State Internet print-out regarding Summit Management Company, LLC. (Doc. 15 at 2.) Plaintiffs do not oppose the requests for judicial notice.

In considering a motion to dismiss, the Court may consider material outside the pleadings that is properly the subject of judicial notice. See Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001); MGIC Indemnity Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986). The Court may take judicial notice of a fact that "is not subject to reasonable dispute because it (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201. In addition, the Court also may take judicial notice of material incorporated by reference into the complaint without converting the motion to dismiss into a motion for summary judgment. Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th Cir. 2010); Intri-Plex Technologies, Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir. 2007). Documents are incorporated into the complaint by reference "in situations where the complaint necessarily relies upon a document or the contents of the document are alleged in a complaint, the document's authenticity is not in question and there are no disputed issues as to the document's relevance." Coto Settlement, 593 F.3d at 1038; see also United States v. Corinthian Colleges, 655 F.3d 984, 999 (9th Cir. 2011).

Here, each of the documents identified above are incorporated into Plaintiffs' complaint by reference, and several are attached as exhibits thereto. In addition, the recorded documents are matters of public record, certified and maintained by the Kern County Recorder's Office. Accordingly, Defendants' unopposed request for judicial notice is GRANTED.

V. Discussion and Analysis

As an initial matter, the parties disagree regarding which causes of action are subject to the heightened pleading requirements of Rule 9(b), which requires a plaintiff to state "with particularity the circumstances constituting fraud." Fed.R.Civ.P. 9(b). In other words, the plaintiff must articulate the "who, what, when, where, and how" of the fraud alleged. Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009). Defendants argue the entire complaint is subject to Rule 9(b), because "[t]he entire premise... is that Defendants and each of them fraudulently conveyed a beneficial interest in the subject Dead of Trust and then wrongfully foreclosed on and sold the property." (Doc. 14-1 at 11.) Defendants contend that "each cause of action is based on the alleged fraud" and "contain conclusions of law that fraudulent conduct occurred without alleging specific facts." ( Id. ) On the other hand, Plaintiffs assert that Rule 9(b) applies only to the eleventh, twelfth, and thirteenth causes of action for fraud. (Doc. 20 at 11.)

Importantly, when a plaintiff alleges that the defendants engaged in "a unified course of fraudulent conduct" and relies upon that conduct to support a claim, the plaintiff's claim is "grounded in fraud, " and must satisfy the particularity requirement of Rule 9. Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Thus, the heightened pleading standards may be applied to factual allegations of a complaint even where fraud is not an element of a claim. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1105 (9th Cir. 2003). Because Plaintiffs' claims for cancellation of instruments, quiet title, violation of RICO, civil conspiracy, the Rosenthal Act and violation Cal. Bus. & Prof. Code § 17200, are based upon alleged fraudulent conduct, the standards of Rule 9(b) are applicable. See e.g., Smith v. Bank of Am. Corp., 485 Fed.Appx. 749 (6th Cir. 2012) (applying Rule 9(b) to a claim for quiet title where the plaintiffs alleged the defendant "committed fraud, in one form or another, leading up to the foreclosure proceeding, and their quiet title claim flows from that conduct); Lanini v. JPMorgan Chase Bank, 2014 U.S. Dist. LEXIS 47348 at *33 (E.D. Cal. Apr. 4, 2014) (dismissing the plaintiffs' claim for a violation of Cal. Bus. & Prof. Code §17200 for failure to meet the Rule 9(b) pleading requirements); Boyter v. Wells Fargo Bank, N.A., 2012 WL 1144281 at *4 (N.D. Cal. Apr. 4, 2012) ("to the extent that plaintiff relies on fraud as a basis for his cancellation of instruments claim, the claim must be plead with sufficient particularity").

To avoid dismissal for failure to meet the heightened pleading standards under Rule 9(b), "[a] complaint would need to state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation." Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004). "For corporate defendants, a plaintiff must allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written." Flowers v. Wells Fargo Bank, N.A., 2011 WL 2748650, at *6 (N.D. Cal. July 13, 2011). If allegations of fraud do not meet the heightened pleading standard, the "averments... should be disregarded, or stripped from the claim for failure to satisfy Rule 9(b)." Kearns, 567 F.3d at 1124 (quotations omitted).

A. Tender and Standing

Defendants assert that Plaintiffs complaint fails because they do not allege tender. (Doc. 14-1 at 11.) "A tender is an offer of performance made with the intent to extinguish the obligation." Arnolds Mgmt. Corp. v. Eischen, 158 Cal.App.3d 575, 580 (1984) (internal citations and quotations omitted). "A tender must be one of full performance... and must be unconditional to be valid." Id.

Under California law, the "tender rule" requires that an action to set aside a sale "for irregularities in sale notice or procedure" must be "accompanied by an offer to pay the full amount of the debt for which the property was security." Arnolds Management Corp. v. Eischen, 158 Cal.App.3d 575, 578 (1984) (citing Karlsen v. American Savings and Loan Association, 15 Cal.App.3d 112, 117 (1971)). Thus, any "cause of action implicitly integrated' with the irregular sale fails unless the trustor can allege and establish a valid tender." Id. at 589. (citing Karlsen , 15 Cal.App.3d at 121.) The Third District Court of Appeal explained:

[G]enerally "an action to set aside a trustee's sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security.".... This rule... is based upon the equitable maxim that a court of equity will not order a useless act performed.... "A valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust."... The rationale behind the rule is that if plaintiffs could not have redeemed the property had the sale procedures been proper, any irregularities in the sale did not result in damages to the plaintiffs.

FPCI RE-HAB 01 v. E & G Investments, Ltd., 207 Cal.App.3d 1018, 1021(1989) (citations omitted). The "tender rule" is meant to prevent courts "from uselessly setting aside a foreclosure sale on a technical ground when the party making the challenge has not established his ability to purchase the property." Keen v. Am. Home Mortg. Servicing, Inc., 664 F.Supp.2d 1086, 1101 (E.D. Cal. 2009).

Defendants contend, "To have proper standing to pursue an action to set aside a foreclosure sale, i.e., to cancel a voidable sale under a deed of trust, and for related damages, Plaintiffs must have tendered the undisputed amount owed on the loan, and must show their ability to make said payment." (Doc. 14-1 at 11, citing Karlsen v. American Savings and Loan Assoc., 15 Cal.App.3d 112 (1971)). Defendants assert, "California Courts have expanded the application of the tender rule to any cause of action' that is based upon allegations of wrongful foreclosure or that seeks redress from foreclosure." ( Id. at 11, citing, e.g., Abdallah v. United Sav. Bank, 43 Cal.App.4th 1101, 1109 (1996); United States Cold Storage v. Great W. Sav. & Loan Ass'n, 165 Cal.App.3d 1214, 1225 (1985)). Because Plaintiffs do not "allege that they were reading, willing, and able to tender the entire amount due on the loan obligation, " Defendants conclude that "the Complaint fails as a matter of law." ( Id. at 12.)

In response, Plaintiffs assert that tender was not required because the trustee sale was void. (Doc. 20 at 12, citing Glaski v. Bank of Am., N.A., 218 Cal.App.4th 1078, 1100 (2013); Dimick v. Emerald Props., 81 Cal.App.4th 868, 877-78 (2000); Intengan v. Bank of Am., 214 Cal.App.4th 1047, 1053-54 (2013); Pfeifer v. Countrywide Home Loans, 211 Cal.App.4th 1250, 1281 (2012)). In Glaski, the Fifth District Court of Appeal "reject[ed] the view that a borrower's challenge to an assignment must fail once it is determined that the borrower was not a party to, or third party beneficiary of, the assignment agreement." Id., 218 Cal.App.4th at 1095. The court found that a borrower "may challenge the securitized trust's chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust's closing date." Glaski, 218 Cal.App.4th at 1083. Plaintiffs argue Court should follow Glaski and find wrongful securitization of the loan rendered the deed of trust invalid. (Doc. 20 at 13-14, citing Kling v. Bank of Am., N.A., 2013 WL 7141259 (C.D. Cal. Sept. 4, 2013).

Significantly, however, a majority of California courts have declined to follow Glaski, and have instead followed the Fourth District Court of Appeal's conclusion that a borrower is "an unrelated third party to the alleged securitization and any other subsequent transfers of the beneficial interest under [a] promissory note"and as such "lacks standing to enforce any agreements." Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal.App.4th 497, 515 (2013). In Jenkins, the court explained: "[E]ven if the asserted improper securitization (or any other invalid assignments or transfers of the promissory note subsequent to her execution of the note...) occurred, the relevant parties to such a transaction were the holders (transferors) of the promissory note and the third party acquirers (transferees) of the note." Id., 216 Cal.App.4th 497 at 515. This Court has consistently followed the reasoning of Jenkins, and rejected Glaski. See e.g., Lanini v. JPMorgan Chase Bank, 2014 WL 1347365, at *5 (E.D. Cal. Apr. 4, 2014); Flores v. EMC Mortg. Co., 2014 WL 641097, at *6 (E.D. Cal. Feb. 18, 2014). In Flores, the Court explained:

Glaski addressed neither federal pleading requirements nor a F.R.Civ.P. 12(b)(6) challenge. Glaski addressed New York trust law, which plaintiffs fail to demonstrate applies here. Of key importance, numerous courts disagree with and refuse to follow Glaski, including this Court. See Snell v. Deutsche Bank Nat. Trust Co., 2014 U.S. Dist. LEXIS 11122, 2014 WL 325147, at *5 (E.D. Cal. 2014) ("Until either the California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski or address the discrepancy between Glaski and Jenkins, this Court will continue to follow the Jenkins rule. Therefore, Plaintiff's claims based on alleged violation of the PSA [pooling and servicing agreement] are not viable"); Newman v. Bank of New York Mellon, 2013 U.S. Dist. LEXIS 147562, 2013 WL 5603316, at *3, n. 2 (E.D. Cal. 2013) "the court held that a borrower like Newman has standing to assert a violation of a PSA. However, no courts have yet followed Glaski and Glaski is in a clear minority on the issue. Until either the California Supreme Court, the Ninth Circuit, or other appellate courts follow Glaski, this Court will continue to follow the majority rule").

Flores, 2014 WL 641097, at *6.

"The rules which govern tenders are strict and are strictly applied." Nguyen v. Calhoun, 105 Cal.App.4th 428, 439 (2003). "The tenderer must do and offer everything that is necessary on his part to complete the transaction, and must fairly make known his purpose without ambiguity, and the act of tender must be such that it needs only acceptance by the one to whom it is made to complete the transaction." Gaffney v. Downey Savings & Loan Assoc., 200 Cal.App.3d 1154, 1165 (1988). Because Plaintiffs fail to allege tender, their claims for wrongful foreclosure, quiet title, to set aside the trustee sale, slander of title, and cancellation of title fail. See Karlsen, 15 Cal.App.3d at 117; United States Cold Storage v. Great Western Savings & Loan Assn., 165 Cal.App.3d 1214, 1224 (1985) ("It would be futile to set aside a foreclosure sale on the technical ground that notice was improper, if the party making the challenge did not first make full tender and thereby establish his ability to purchase the property").

Moreover, Plaintiffs lack standing because, as borrowers, they were not parties to the challenged assignments and the assignments were not made for their benefit. See Jenkins, 216 Cal.App.4th at 515; see also Fontenot v. Wells Fargo Bank., 198 Cal.App.4th 256, 272-73 (2011) (stating the borrower had no cause of action for irregularities in the assignment process); Gieseke v. Bank of Am., N.A., 2014 WL 718463, at *5 (N.D. Cal. Feb. 23, 2014) (holding the plaintiff's claims for wrongful disclosure, quiet title, slander of title, and cancellation of instruments could be dismissed for lack of standing because the plaintiff was a third-party borrower). Consequently, Plaintiffs lack standing to proceed on causes of action premised on irregularities in the assignment and securitization of their loan, and the Court recommends Defendants' motion, on these grounds, be GRANTED.

B. Wrongful Foreclosure Claims

Plaintiffs allege three causes of action for wrongful foreclosure, based upon Cal. Commercial Code § 3301, Cal. Civ. Code § 2934a(a)(1), and Cal. Civ. Code § 2932.5. ( See Doc. 1 at 26-31, ¶¶ 81-120.) Defendants argue the claims should be dismissed because "Plaintiffs make broad sweeping allegations that ...


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