CASE FILE California Wrongful Foreclosure, Slander of Title, Viol. 2923.5, and Viol. Cal. Bus. Prof. Code 17200 M-T-D Denied BARRIONUEVO v. CHASE BANK, ND, Calif

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
JOSE BARRIONUEVO, et al., Plaintiffs, v. CHASE BANK, N.A., et. al., Defendants. ___________________________________/ No. C-12-0572 EMC <excerpts>
ORDER DENYING DEFENDANTS JP MORGAN CHASE BANK, N.A. AND CALIFORNIA RECONVEYANCE CO.S MOTION TO DISMISS (Docket No. 23)
I. INTRODUCTION Plaintiffs Jose and Flor Barrionuevo (collectively the Barrionuevos) sued Defendants JP Morgan Chase Bank (Chase) and California Reconveyance Corporation (California Reconveyance) on February 3, 2012, after California Reconveyance attempted to foreclose on a Deed of Trust (DOT) that the Barrionuevos executed for the purchase of a home in California. . ... Having considered the papers filed in support of and in opposition to the instant Motion, the Court deems the matter appropriate for decision without oral argument. .. For the following reasons,
Defendants motion is DENIED.
...
C. Wrongful Foreclosure The Barrionuevos cause of action for wrongful foreclosure is based upon their belief that Cal Reconveyance cannot conduct a valid foreclosure sale on behalf of Defendant JP Morgan because it is not the true present beneficiary under Plaintiffs Deed of Trust.
...
Related to the allegation that Chase did not acquire Plaintiffs DOT from Washington Mutual, the Barrionuevos further base their wrongful foreclosure claim on the grounds that the Defendants have failed to comply with California Civil Code 2932.5, in that they have not recorded a document in the public chain of title reflecting from whom [they] acquired the beneficial interest . . . Deed of Trust, as required by the statute.
Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is acknowledged and recorded.
...
Thus, insofar as Plaintiffs contend that the Notice of Default is invalid due to a lack of authority to foreclose, their wrongful foreclosure claim is similar to those advanced in Sacchi, Javaheri, Ohlendorf, Skoba, and, of course, this Courts ruling in Tamburri. Accordingly, this Court finds that the Plaintiffs have sufficiently stated a claim for wrongful foreclosure. Regardless of whether 2932.5 applies, under California law a party may not foreclose without the legal power to do so. Plaintiff alleges that the wrong parties issued the Notice of Default. At the 12(b)(6) stage, given the factual uncertainties underlying the parties arguments, Plaintiffs claim is sufficient to withstand a motion to dismiss.
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D. Slander of Title The California Court of Appeals for the Fifth District recently outlined the elements required to successfully bring a cause of action for slander of title. In Sumner Hill Homeowners Assn., Inc. v. Rio Mesa Holdings, LLC ... Accordingly, to the extent Defendants Motion to Dismiss reaches Plaintiffs action for slander of title, Plaintiffs have met their burden to plead sufficient factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.
Justia > Dockets & Filings > California > California Northern District Court > Real Property > Foreclosure > Barrionuevo et al v. Chase Bank, N.A. et al
Barrionuevo et al v. Chase Bank, N.A. et al

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Plaintiffs: Defendants: Case Number: Filed: Court: Office: County: Presiding Judge: Nature of Suit: Cause: Jurisdiction: Jury Demanded By:
Jose Barrionuevo and Flor Barrionuevo Chase Bank, N.A., LaSalle Bank National Association, California Reconveyance Corporation and Mortgage Electronic Registration System 3:2012cv00572 February 3, 2012 California Northern District Court San Francisco Office Contra Costa Edward M. Chen Real Property - Foreclosure 28:1332 Diversity-Personal Property Diversity Plaintiff
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August 6, 2012 July 18, 2012 February 27, 2012
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ORDER by Judge Edward M. Chen Denying 23 Defendants' Motion to Dismiss. (emcsec, COURT STAFF) (Filed on 8/6/2012) ORDER RE OPPOSITION TO MOTION TO WITHDRAW AS COUNSEL. Signed by Judge Edward M. Chen on 7/18/12. (bpf, COURT STAFF) (Filed on 7/18/2012) STANDING ORDER. Signed by Judge Edward M. Chen on 2/27/12. (bpf, COURT STAFF) (Filed on 2/27/2012)
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Plaintiff: Jose Barrionuevo

Represented By: Michael James Yesk Search Dockets Search Blogs Search News Search Finance Search Web [ Dockets ] [ Justia BlawgSearch | Blawg.com | Bloglines | Google Blogsearch |Technorati ] [ Google News | Marketwatch | Wall Street Journal | Financial Times |New York Times ] [ Google Finance | Yahoo Finance | Hoovers | SEC Edgar Filings ] [ Legal Web | Google | Bing | Yahoo | Ask ]
Plaintiff: Flor Barrionuevo

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Defendant: Chase Bank, N.A.

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Defendant: LaSalle Bank National Association

Defendant: California Reconveyance Corporation

Defendant: Mortgage Electronic Registration System

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Justia > Dockets & Filings > California > Northern District Court > Real Property: Foreclosure > Barrionuevo et al v. Chase Bank, N.A. et al > Filing 41

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Case Information
Case: Barrionuevo et al v. Chase Bank, N.A. et al State: California Court: Northern District Court Judge: Edward M. Chen Type: Real Property: Foreclosure Filing: 41 Filed: August 6, 2012 Retrieved: August 7, 2012
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Case: Barrionuevo et al v. Chase Bank, N.A. et al State: California Court: Northern District Court Judge: Edward M. Chen Type: Real Property: Foreclosure Filing: 37 Filed: July 18, 2012 Retrieved: July 19, 2012
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Case: Barrionuevo et al v. Chase Bank, N.A. et al State: California Court: Northern District Court Judge: Edward M. Chen Type: Real Property: Foreclosure Filing: 9 Filed: February 27, 2012 Retrieved: February 28, 2012
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U.S. District Court California Northern District (San Francisco) CIVIL DOCKET FOR CASE #: 3:12-cv-00572-EMC
Barrionuevo et al v. Chase Bank, N.A. et al Assigned to: Hon. Edward M. Chen Cause: 28:1332 Diversity-Personal Property
Date Filed: 02/03/2012 Jury Demand: Plaintiff Nature of Suit: 220 Real Property: Foreclosure Jurisdiction: Diversity represented by Michael James Yesk Law Offices of Michael Yesk 70 Doray Dr., Suite 16 Pleasant Hill, CA 94523 510-909-9700 Fax: 925-887-6642 Email: yesklaw@gmail.com LEAD ATTORNEY ATTORNEY TO BE NOTICED represented by Michael James Yesk (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Plaintiff Jose Barrionuevo
Plaintiff Flor Barrionuevo
V. Defendant Chase Bank, N.A. Successor In Interest to Washington Mutual Bank, FA Defendant LaSalle Bank National Association as Trustee for Wmalt Series 2006-AR4 Trust Defendant California Reconveyance Corporation represented by John Charles Hedger Bryan Cave LLP 333 Market Street 25th Floor San Francisco, CA 94105 415-675-3400 Email: hedgerj@bryancave.com
ATTORNEY TO BE NOTICED Defendant Mortgage Electronic Registration System also known as "MERS" Defendant JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA Date Filed 02/03/2012 # Docket Text represented by John Charles Hedger (See above for address) ATTORNEY TO BE NOTICED
1 COMPLAINT FOR: 1. DECLARATORY RELIEF; 2. CONTRACTUAL BREACH OF GOOD FAITH FAIR DEALING; 3. VIOLATION OF TILA; 4. VIOLATIONS OF RESPA; 5. RECISSION; 6. FRAUD; 7. UNFAIR AND DECEPTIVE ACTS AND PRACTICES (UDAP); 8. BREACH OF FIDUCIARY DUTY; 9. UNCONSCIONABIITY; Unlimited Jurisdiction; JURY TRIAL DEMANDED; against California Reconveyance Corporation, Chase Bank, N.A., LaSalle Bank National Association, Mortgage Electronic Registration System ( Filing fee $ 350.00, receipt number 34611070150.). Filed byJose Barrionuevo, Flor Barrionuevo. (Attachments: # 1Civil Cover Sheet)(aaa, COURT STAFF) (Filed on 2/3/2012) (Entered: 02/03/2012) 2 ADR SCHEDULING ORDER: Case Management Statement due by 5/9/2012. Case Management Conference set for 5/16/2012 10:00 AM. Signed by Magistrate Judge Nathanael M. Cousins on 2/3/12. (aaa, COURT STAFF) (Filed on 2/3/2012) (Additional attachment(s) added on 2/3/2012: # 1 NC Standing Order, # 2 Standing Order) (aaa, COURT STAFF). (Entered: 02/03/2012) 3 NOTICE OF PENDENCY OF ACTION; by Flor Barrionuevo, Jose Barrionuevo (aaa, COURT STAFF) (Filed on 2/3/2012) (Entered: 02/03/2012) 4 Summons Issued as to California Reconveyance Corporation, Chase Bank, N.A., LaSalle Bank National Association, Mortgage Electronic Registration System. (aaa, COURT STAFF) (Filed on 2/3/2012) (Entered: 02/03/2012) 5 Ex Parte Application filed by Flor Barrionuevo, Jose Barrionuevo. (Attachments: # 1 Declaration, # 2 Proposed Order)(Yesk, Michael) (Filed on 2/23/2012) (Entered: 02/23/2012) 6 CLERK'S NOTICE of Impending Reassignment to U.S. District Judge. (lmh, COURT STAFF) (Filed on 2/24/2012) (Entered: 02/24/2012) 7 ORDER REASSIGNING CASE. Case reassigned to Judge Hon. Edward M. Chen for all further proceedings. Magistrate Judge Nathanael M. Cousins no longer assigned to the case.. Signed by Executive Committee on 2/27/12. (as, COURT STAFF) (Filed on 2/27/2012) (Entered: 02/27/2012)
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8 CASE MANAGEMENT SCHEDULING ORDER: Case Management Statement due by 5/11/2012. Case Management Conference set for 5/18/2012 09:00 AM in Courtroom 5, 17th Floor, San Francisco.. Signed by Judge Edward M. Chen on 2/27/12. (bpf, COURT STAFF) (Filed on 2/27/2012) (Entered: 02/27/2012) 9 STANDING ORDER. Signed by Judge Edward M. Chen on 2/27/12. (bpf, COURT STAFF) (Filed on 2/27/2012) (Entered: 02/27/2012) 10 CLERKS NOTICE setting TRO (bpf, COURT STAFF) (Filed on 2/27/2012) (Entered: 02/27/2012) Set/Reset Deadlines as to 5 Ex Parte Application . Responses due by 2/28/2012. Motion Hearing set for 2/29/2012 09:00 AM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. (bpf, COURT STAFF) (Filed on 2/27/2012) (Entered: 02/27/2012) 11 Declaration of Michael Yesk in Support of 5 Ex Parte Application filed byFlor Barrionuevo, Jose Barrionuevo. (Related document(s) 5 ) (Yesk, Michael) (Filed on 2/27/2012) (Entered: 02/27/2012) 12 Declaration of Michael Yesk in Support of 5 Ex Parte Application Supplemental filed byFlor Barrionuevo, Jose Barrionuevo. (Related document(s) 5 ) (Yesk, Michael) (Filed on 2/28/2012) (Entered: 02/28/2012) 13 Minute Entry: Motion Hearing held on 2/29/2012 before Edward M. Chen (Date Filed: 2/29/2012) re 5 Ex Parte Application filed by Flor Barrionuevo, Jose Barrionuevo. Court denied Plaintiffs TRO for the reasons stated on the record. Plaintiffs intend to file a motion for preliminary injunction. CMC has already been set for 5/18/12 at 9:00 a.m. (Court Reporter Kelly Shainline.) (bpf, COURT STAFF) (Date Filed: 2/29/2012) (Entered: 02/29/2012) 14 SUMMONS Returned Executed by Jose Barrionuevo, Flor Barrionuevo. Chase Bank, N.A. served on 2/24/2012, answer due 3/16/2012. (Yesk, Michael) (Filed on 3/18/2012) Modified on 3/20/2012 (slh, COURT STAFF). (Entered: 03/18/2012) 15 SUMMONS Returned Executed by Jose Barrionuevo, Flor Barrionuevo. Chase Bank, N.A. served on 2/24/2012, answer due 3/16/2012. (Yesk, Michael) (Filed on 3/19/2012) Modified on 3/20/2012 (slh, COURT STAFF). (Entered: 03/19/2012) 16 MOTION to Dismiss Notice of Motion and Motion to Dismiss Plaintiffs' Complaint Pursuant to Fed. R. Civ. P. 12(b)(6); Memorandum of Points and Authorities in Support filed by California Reconveyance Corporation, JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. Motion Hearing set for 5/18/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Responses due by 4/13/2012. Replies due by 4/20/2012. (Attachments: # 1 Request for Judicial Notice, # 2 Exhibit A- E, # 3 Proposed Order, # 4 Certificate/Proof of Service)
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(Hedger, John) (Filed on 3/30/2012) (Entered: 03/30/2012) 04/02/2012 17 CLERKS NOTICE Case Management Statement due by 6/15/2012. Case Management Conference set for 6/22/2012 09:00 AM in Courtroom 5, 17th Floor, San Francisco. This is a text only docket entry, there is no document associated with this notice.Plaintiff shall notify all defendants. (bpf, COURT STAFF) (Filed on 4/2/2012) (Entered: 04/02/2012) 18 CLERKS NOTICE resetting Motion Hearing, Set/Reset Deadlines as to 16 MOTION to Dismiss Notice of Motion and Motion to Dismiss Plaintiffs' Complaint Pursuant to Fed. R. Civ. P. 12(b)(6); Memorandum of Points and Authorities in Support. Responses due by 4/13/2012. Replies due by 4/20/2012. Motion Hearing set for 5/8/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. This is a text only docket entry, there is no document associated with this notice. (bpf, COURT STAFF) (Filed on 4/5/2012) (Entered: 04/05/2012) 19 NOTICE of Case Management Conference by Flor Barrionuevo, Jose Barrionuevo. (slh, COURT STAFF) (Filed on 4/5/2012) (Entered: 04/06/2012) 20 AMENDED COMPLAINT against Chase Bank, N.A., JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. Filed byJose Barrionuevo, Flor Barrionuevo. (Yesk, Michael) (Filed on 4/19/2012) (Entered: 04/19/2012) 21 CLERKS NOTICE VACATING 5/8/12 HEARING AND TERMINATING DEFENDANT'S MOTION TO DISMISS (Docket #16). PLAINTIFFS FILED AMENDED COMPLAINT AS A MATTER OF COURSE. This is a text only docket entry, there is no document associated with this notice. (bpf, COURT STAFF) (Filed on 4/20/2012) (Entered: 04/20/2012) 22 *** FILED IN ERROR. REFER TO DOCUMENT 23 . *** MOTION to Dismiss Plaintiffs' First Amended Complaint filed by California Reconveyance Corporation, JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. Motion Hearing set for 6/15/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Responses due by 5/21/2012. Replies due by 5/29/2012. (Attachments: # 1 Request for Judicial Notice, # 2 Exhibits to Request for Judicial Notice, # 3 Proposed Order, # 4 Certificate/Proof of Service)(Hedger, John) (Filed on 5/7/2012) Modified on 5/8/2012 (fff, COURT STAFF). (Entered: 05/07/2012) 23 MOTION to Dismiss Plaintiff's First Amended Complaint [CORRECTION OF DOCKET # 22 filed by California Reconveyance Corporation, JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. Motion Hearing set for 6/15/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Responses due by 5/22/2012. Replies due by 5/29/2012. (Attachments: # 1 Request for Judicial Notice, # 2 Request for Judicial Notice Exhibits A-E, # 3 Proposed Order, # 4Certificate/Proof of Service)(Hedger, John) (Filed on 5/8/2012) (Entered: 05/08/2012)
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24 CLERKS NOTICE Continuing Motion 23 MOTION to Dismiss Plaintiff's First Amended Complaint from 6/15/2012 to 6/22/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Case Management Conference reset from 6/22/2012 9:00 a.m. to 6/22/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco. This is a text only docket entry, there is no document associated with this notice. (bpf, COURT STAFF) (Filed on 5/9/2012) (Entered: 05/09/2012) 25 RESPONSE (re 23 MOTION to Dismiss Plaintiff's First Amended Complaint [CORRECTION OF DOCKET # 22 ) filed byFlor Barrionuevo, Jose Barrionuevo. (Attachments: # 1 Supplement Objection to Request for Judicial Notice)(Yesk, Michael) (Filed on 5/22/2012) (Entered: 05/22/2012) 26 REPLY (re 23 MOTION to Dismiss Plaintiff's First Amended Complaint [CORRECTION OF DOCKET # 22 ) In Support of Motion to Dismiss Plaintiffs' First Amended Complaint Pursuant to Fed. R. Civ. P 12(b)(6); Memorandum of Points and Authorities in Support filed byCalifornia Reconveyance Corporation, JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. (Attachments: # 1 Certificate/Proof of Service)(Hedger, John) (Filed on 6/5/2012) (Entered: 06/05/2012) 27 ADR Clerks Notice re: Non-Compliance with Court Order. (tjs, COURT STAFF) (Filed on 6/6/2012) (Entered: 06/06/2012) 28 NOTICE of need for ADR Phone Conference (ADR L.R. 3-5 d) (Attachments: # 1 Certificate/Proof of Service)(Hedger, John) (Filed on 6/6/2012) (Entered: 06/06/2012) 29 ADR Clerks Notice Setting ADR Phone Conference on 6/20/12 at 3:30 p.m. Pacific time. The attached document contains instructions for connecting to the call for parties to the case. (tjs, COURT STAFF) (Filed on 6/11/2012) (Entered: 06/11/2012) 30 *UPDATED* ADR Clerks Notice Setting ADR Phone Conference on 6/20/12 at 3:30 p.m. Pacific time. The date and time for the call remain the same; dialin information has been updated. (tjs, COURT STAFF) (Filed on 6/13/2012) (Entered: 06/13/2012) 31 MOTION to Substitute Attorney filed by Flor Barrionuevo, Jose Barrionuevo. (Yesk, Michael) (Filed on 6/15/2012) (Entered: 06/15/2012) 32 CASE MANAGEMENT STATEMENT filed by Flor Barrionuevo, Jose Barrionuevo, California Reconveyance Corporation, Chase Bank, N.A., JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. (Yesk, Michael) (Filed on 6/15/2012) (Entered: 06/15/2012) 33 CLERKS NOTICE RESETTING MOTION TO RELIEVE AS PLAINTIFFS' COUNSEL from 7/27/12 to 7/31/12 at 1:30 p.m. 31MOTION to Substitute Attorney . Responses due by 6/29/2012. Replies due by 7/6/2012. Motion Hearing set for 7/31/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Counsel to notify Plaintiffs immediately. This is
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a text only docket entry, there is no document associated with this notice. (bpf, COURT STAFF) (Filed on 6/15/2012) (Entered: 06/15/2012) 06/15/2012 34 Renotice motion hearing re 31 MOTION to Substitute Attorney Hearing Changed per Clerk filed byFlor Barrionuevo, Jose Barrionuevo. Motion Hearing set for 7/31/2013 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. (Related document(s) 31 ) (Yesk, Michael) (Filed on 6/15/2012) (Entered: 06/15/2012) Set/Reset Deadlines as to 31 MOTION to Substitute Attorney . Motion Hearing set for 7/31/2012 (not 2013) 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. (bpf, COURT STAFF) (Filed on 6/18/2012) (Entered: 06/18/2012) Set Deadlines/Hearings:, Set/Reset Deadlines as to 23 MOTION to Dismiss Plaintiff's First Amended Complaint [CORRECTION OF DOCKET # 22 , 31 MOTION to Substitute Attorney . Responses due by 5/22/2012. Replies due by 5/29/2012. Motion Hearing set for 6/22/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Motion to withdraw as counsel (Docket #31) is set for 7/31/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. (bpf, COURT STAFF) (Filed on 6/18/2012) (Entered: 06/18/2012) 35 CLERKS NOTICE VACATING 6/22/12 HEARING ON DEFENDANT'S MOTION TO DISMISS/CMC. Per Local Rules 7-1(b), Court to issue order on papers. CMC is reset from 6/22/12 to 7/31/12 at 1:30 p.m. (Same time as Plaintiff's motion to withdraw as counsel) Case Management Statement due by 7/24/2012. Case Management Conference set for 7/31/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco. This is a text only docket entry, there is no document associated with this notice. (bpf, COURT STAFF) (Filed on 6/20/2012) (Entered: 06/20/2012) ADR Remark: ADR Phone Conference held by GDB on 6/20/12. (sgd, COURT STAFF) (Filed on 6/22/2012) (Entered: 06/22/2012) 36 ORDER REFERRING CASE to Mediation.. Signed by Judge Edward M. Chen on 7/5/12. (bpf, COURT STAFF) (Filed on 7/5/2012) (Entered: 07/05/2012) 37 ORDER RE OPPOSITION TO MOTION TO WITHDRAW AS COUNSEL. Signed by Judge Edward M. Chen on 7/18/12. (bpf, COURT STAFF) (Filed on 7/18/2012) (Entered: 07/18/2012) 38 MOTION to Withdraw 31 MOTION to Substitute Attorney filed by Flor Barrionuevo, Jose Barrionuevo. Motion Hearing set for 7/31/2012 01:30 PM in Courtroom 5, 17th Floor, San Francisco before Hon. Edward M. Chen. Responses due by 7/26/2012. Replies due by 7/30/2012. (Yesk, Michael) (Filed on 7/25/2012) (Entered: 07/25/2012) ***Motions terminated 7/31/12 motion vacated. CMC reset from 7/31/12 to 8/31/12 - 38 MOTION to Withdraw 31 MOTION to Substitute Attorney filed by Flor Barrionuevo, Jose Barrionuevo, 31 MOTION to Substitute
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Attorney filed by Flor Barrionuevo, Jose Barrionuevo., MOTION to Withdraw 31 MOTION to Substitute Attorney Case Management Conference reset from 7/31/12 to 8/31/2012 09:00 AM in Courtroom 5, 17th Floor, San Francisco. THIS IS A TEXT ONLY DOCKET ENTRY; THERE IS NO DOCUMENT ASSOCIATED WITH THIS NOTICE.(bpf, COURT STAFF) (Filed on 7/25/2012) (Entered: 07/25/2012) 07/25/2012 39 Defendant's Initial Disclosures filed by JP Morgan Chase Bank, N.A. as acquirer of certain assets from Washington Mutual Bank, FA. (Attachments: # 1 Certificate/Proof of Service)(Hedger, John) (Filed on 7/25/2012) Modified on 7/26/2012 (slh, COURT STAFF). (Entered: 07/25/2012) 40 CASE MANAGEMENT STATEMENT Plaintiffs' Initial Disclosures filed by Flor Barrionuevo, Jose Barrionuevo. (Yesk, Michael) (Filed on 7/27/2012) (Entered: 07/27/2012) 41 ORDER by Judge Edward M. Chen Denying 23 Defendants' Motion to Dismiss. (emcsec, COURT STAFF) (Filed on 8/6/2012) (Entered: 08/06/2012) 42 ADR Clerk's Notice Appointing Daniel Bowling as Mediator. (cmf, COURT STAFF) (Filed on 8/7/2012) (Entered: 08/07/2012)
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Sumner Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC (2012) , Cal.App.4th
[No. F058617. Fifth Dist. May. 2, 2012.] SUMNER HILL HOMEOWNERS' ASSOCIATION, INC. et al., Plaintiffs and Appellants, v. RIO MESA HOLDINGS, LLC et al., Defendants and Appellants.
[Opinion Certified For Partial Publication.]
Sumner Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC, F058617, COURT OF APPEAL OF CALIFORNIA, FIFTH APPELLATE DISTRICT, 2012 Cal.
App. LEXIS 524 Shepardize , May 2, 2012, Opinion Filed, CERTIFIED FOR PARTIAL PUBLICATION** Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of parts II., III., IV. and VI.
<excerpt> V. The Slander of Title Claim At the time of the jury trial of the damage claims, plaintiffs' operative pleading was their third amended complaint. It alleged that defendant's gate across Killkelly Road was a private nuisance that damaged the individual plaintiffs by interfering with the use and enjoyment of their easement rights. The third amended complaint also alleged that {Slip Opn. Page 58} by recording the Notice of Permission, defendants slandered the title of plaintiffs' easement rights to use Killkelly Road without restriction and the right to maintain a private, gated subdivision. In the Notice of Permission, Rio Mesa Holdings, LLC, had asserted control over the use of Killkelly Road, restricted access to daytime hours (but included the general public in that permitted use), and did not allow vehicles. The trial court instructed the jury on the elements of nuisance and slander of title, and informed the jury of the findings on property rights made by the trial court, including the existence of plaintiffs' easement rights to use Killkelly Road. With respect to the slander of title cause of action, the jury was told that plaintiffs had to prove, among other things, that the publication "caused actual pecuniary damage in the form of expense for measures reasonably necessary to counteract the publication, including litigation expenses to remove the doubt cast upon [plaintiffs'] property rights." The trial court informed the jury that the only damages sought by plaintiffs for slander of title were attorney fees and costs. The jury was instructed that litigation costs and attorney fees were recoverable damages in a slander of title cause of action "if the other elements of a slander of title claim are met." The jury returned special verdicts in favor of plaintiffs and awarded compensatory damages to plaintiffs on the private nuisance and slander of title causes of action. The jury also found malice on the part of Rio Mesa Holdings, LLC, and awarded punitive damages to plaintiffs against that defendant. Plaintiffs' compensatory damages for slander of title consisted solely of their attorney fees and litigation costs. A comprehensive judgment was entered that included those damage awards. On appeal, defendants contend the judgment awarding damages for slander of title must be reversed because, as a matter of law, two elements of a valid slander of title cause of action were lacking in this case: (1) marketable title to the easement rights, and (2) pecuniary damage to the salability of the property. Further, defendants argue that even if plaintiffs were entitled to recover damages for slander of title, (3) the attorney fees and costs should have been allocated or apportioned. We will address each of these contentions in turn. {Slip Opn. Page 59} A. Plaintiffs' Title Sufficient
Defendants argue the property rights they slandered--plaintiffs' implied and equitable easement rights to use Killkelly Road to get to the river--were inadequate to constitute "title" to support a claim for slander of title. We disagree. Defendants' argument that title was inadequate to support the cause of action is premised on two cases,Howard v. Schaniel (1980) 113 Cal.App.3d 256 and Hill v. Allen (1968) 259 Cal.App.2d 470. Those cases are distinguishable because the alleged title involved was claimed by adverse possession or prescription where no court had yet adjudicated the existence of such property rights. As explained inHoward v. Schaniel: "A title acquired by adverse possession is not a marketable title until the title is established by judicial proceedings against the record owner." (Howard v. Schaniel, supra, at p. 264.) Because the thrust of a slander of title cause of action is "protection from injury to the salability of property," and an adverse possessor's claimed rights are not marketable until established by a court, the plaintiffs alleged property rights in that case were insufficient to support a slander of title action. (Id. at pp. 264-265; accord, Hill v. Allen, supra, at pp. 490-491 [right to a prescriptive easement not yet established in court action--no slander of title].) Here, no judicial action was necessary to perfect or establish plaintiffs' easement rights. Rather, plaintiffs' rights accrued and vested when they purchased their lots because (1) their deeds referenced a subdivision map with a system of roads, including Killkelly Road (see Danielson, supra, 157 Cal. 686), and (2) Sumner-Peck, Wells Fargo and their sales agents made promises of river access to plaintiffs or their predecessors during the marketing of the residential lots. (See Bradley, supra, "110 Cal.App.2d at pp. 442-443.) Moreover, for reasons we have explained earlier in this opinion, the vacation of the subdivision roads did not cause the extinguishment of plaintiffs' easement rights under Streets and Highways Code section 8353. We conclude that plaintiffs possessed marketable "title" to their easement rights, and therefore defendants' argument fails. B. Pecuniary Damage Element Satisfied {Slip Opn. Page 60} Next, defendants contend that plaintiffs failed to establish the pecuniary damage element of the slander of title cause of action. Specifically, defendants argue that this element is only satisfied by evidence of actual loss to salability of the property, and that expenditure of attorney fees and costs by themselvesare insufficient. Plaintiffs counter that attorney fees and litigation costs that are necessary to clear title of a disparaging document are sufficient to satisfy the pecuniary damage element, and that in any event there was some evidence of diminished value. fn. 46 Discussion of this issue will require an overview of the nature of the cause of action. Slander or disparagement of title occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property and causes the owner thereof "'some special pecuniary loss or damage.'" (Fearon v. Fodera (1915) 169 Cal. 370, 379-380.) The elements of the tort are (1) a publication, (2) without privilege or justification, (3) falsity, and (4) direct pecuniary loss. (Truck Ins. Exchange v. Bennett (1997) 53 Cal.App.4th 75, 84; Howard v. Schaniel, supra, 113 Cal.App.3d at pp. 263-264 & fn. 2.) If the publication is reasonably understood to cast doubt upon the existence or extent of another's interest in land, it is disparaging to the latter's title. (Hill v. Allen, supra, "259 Cal.App.2d at p. 489.) The main thrust of the cause of action is protection from injury to the salability of property (Howard v. Schaniel, supra, at p. 264; Smith v. Stuthman (1947) 79 Cal.App.2d 708, 709), which is ordinarily indicated by the loss of a particular sale, impaired marketability or depreciation in value (Hill v. Allen, supra, at p. 489; Davis v. Wood (1943) 61 Cal.App.2d 788, 797-798). {Slip Opn. Page 61} "'Pecuniary loss'" is an essential element of a slander of title cause of action. (Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1057; 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, 646, p. 953.) This element is described in the Restatement Second of Torts, section 633, subdivision (1), as follows: "The pecuniary loss for which a publisher of injurious falsehood is subject to liability is restricted to [] (a) the pecuniary loss that results directly and immediately from the effect of the conduct of third persons, including impairment of vendibility or value caused by disparagement, and [] (b) the expense of measures reasonably necessary to counteract the publication, including litigation to remove the doubt cast upon vendibility or value by disparagement." (Italics added.) California courts have adopted the Restatement definition of pecuniary damage for purposes of a slander of title cause of action. (See Appel v. Burman (1984) 159 Cal.App.3d 1209, 1215 (Appel);Howard v. Schaniel, supra, 113 Cal.App.3d at pp. 263-264 & fn. 2; Glass v. Gulf Oil Corp. (1970) 12 Cal.App.3d 412, 424; Davis v. Wood, supra, "61 Cal.App.2d at pp. 797-798; 5 Witkin, supra, Torts, 646, p. 953.) Accordingly, it is well-established that attorney fees and litigation costs are recoverable as pecuniary damages in slander of title causes of action when, as expressed in subdivision (1)(b) of section 633 of the
Restatement, litigation is necessary "to remove the doubt cast" upon the vendibility or value of plaintiff's property. (Seeley v. Seymour (1987) 190 Cal.App.3d 844, 865 [damages include "the expense of legal proceedings necessary to remove the doubt cast by the disparagement"]; Forte v. Nolfi (1972) 25 Cal.App.3d 656, 686; Glass v. Gulf Oil Corp., supra, at p. 437; Contra Costa County Title Co. v. Waloff (1960) 184 Cal.App.2d 59, 68 [attorney fees and costs in legal action to clear slandered title are "special damages"]; Wright v. Rogers (1959) 172 Cal.App.2d 349, 366 ["the plaintiff may recover as damages the expense of legal proceedings necessary to remove a cloud on the plaintiff's title"]; Davis v. Wood, supra, at p. 798 [damages include the plaintiff's cost in clearing the title].) Defendants do not dispute that attorney fees and litigation costs are a recoverable damage component in an otherwise valid slander of title cause of action. However, defendants contend that in order for attorney fees and costs to be recoverable as damages {Slip Opn. Page 62} in a slander of title cause of action, there must also be pecuniary damage to the salability of the property itself. In other words, attorney fees and costs by themselves are not enough. Their argument seeks to place decisive emphasis on the comment in some of the cases that the thrust of the cause of action is protection from injury to the salability of property. (Howard v. Schaniel, supra, 113 Cal.App.3d at p. 264; Smith v. Stuthman,supra, "79 Cal.App.2d at p. 709.) fn. 47 Defendants also rely on language in Appel, supra, 159 Cal.App.3d at page 1216, which, regarding the slander of title cause of action in that case stated that "since damages were properly awarded in this case, attorneys fees are also a proper element of the damages." Defendants argue the quoted sentence confirms that before attorney fees may be awarded as damages, there must first be a finding of pecuniary damage relating to the salability of the property. We do not believe the wording in Appel is adequate to support the weight of defendants' proposition, particularly when the issue was not raised in that case. Rather, we agree with plaintiffs that the excerpted sentence is mere dicta and does not provide a definite answer to the question at hand. (See, e.g., Styne v. Stevens (2001) 26 Cal.4th 42, 57 ["An opinion is not authority for a point not raised, considered, or resolved therein"].) Although the issue raised by defendants has not been directly or specifically addressed in any California case, the basic principles and concepts discernable in the case law lead us to reject defendants' contention. We do not agree that a plaintiff must always show specific harm to vendibility, such as through proof of a lost sale or diminished value. Rather, we hold that at least in cases such as this one where title was disparaged in a recorded instrument, attorney fees and costs necessary to clear title or remove the doubt cast on it by defendant's falsehood are, by themselves, sufficient pecuniary damages for purposes of a cause of action for slander of title. {Slip Opn. Page 63} While it is true that an essential element of a cause of action for slander of title is that the plaintiff suffered pecuniary damage as a result of the disparagement of title (Manhattan Loft, LLC v. Mercury Liquors, Inc., supra, 173 Cal.App.4th at p. 1057), the law is equally clear that the expense of legal proceedings necessary to remove the doubt cast by the disparagement and to clear title is a recognized form of pecuniary damage in such cases (Seeley v. Seymour, supra, 190 Cal.App.3d at p. 865; Wright v. Rogers, supra, "172 Cal.App.2d at pp. 366-367; Rest.2d Torts, 633, subd. (1)(b)). fn. 48 Since California law expressly recognizes that attorney fees and costs are a form of pecuniary damages in slander of title cases, it would seem that in the absence of legal authority to the contrary, such damages are presumptively sufficient to satisfy the pecuniary damage element of the cause of action. No cogent authority to the contrary has been brought to our attention. More than that, the rationale for allowing attorney fees as damages in slander of title cases supports the proposition that such damages are independently recoverable, and are not merely an add-on to other forms of pecuniary loss. That rationale may be articulated as follows: When a defendant's tortious conduct (i.e., the unprivileged publication of a falsehood constituting a slander of title) forces the plaintiff to litigate in order to clear his title, the plaintiff's attorney fees and costs necessary to accomplish that purpose constitute actual harm or injury to the plaintiff that was proximately caused by the tort and therefore should be compensated. (Wright v. Rogers, supra, "172 Cal.App.2d at p. 366;Contra Costa County Title Co. v. Waloff, supra, "184 Cal.App.2d at pp. 67-68.) In other words, allowing the recovery of attorney fees as damages in such cases is an application of the rule that a plaintiff is entitled to recover the amount of damages that will compensate for all the detriment proximately caused by the defendant's tortious conduct. (Civ. Code, 3333; Wright v. Rogers, supra, at p. 365;Forte v. Nolfi, supra, 25 {Slip Opn. Page 64} Cal.App.3d at p. 686; Contra Costa County Title Co. v. Waloff, supra, at pp. 67-68.) As aptly stated by the highest court of another state: "[A]ttorney fees are permissible as special damages in slander of title actions because 'the defendant ... by intentional and
calculated action leaves the plaintiff with only one course of action: that is, litigation.... Fairness requires the plaintiff to have some recourse against the intentional malicious acts of the defendant.'" (Horgan v. Felton (Nev. 2007) 170 P.3d 982, 987-988, fn. omitted, quoting Rorvig v. Douglas (Wash. 1994) 873 P.2d 492, 497.) In view of the above stated purposes for allowing recovery of fees as damages in slander of title causes of action, we see no reason to strictly limit the recovery of such damages to those cases in which the plaintiff has also proven some other pecuniary harm, such as a lost sale, property depreciation or impairment of marketability. In considering this issue, we believe it is helpful to note the analogy between a cause of action for slander of title and that of malicious prosecution. As one case put it, "[t]o clear a slandered title is akin to defending an unfounded lawsuit," since in both instances the defendant's tortious conduct was "calculated to result in litigation." (Contra Costa County Title Co. v. Waloff, supra, "184 Cal.App.2d at p. 68.) In both types of cases, the necessary attorney fees incurred are recoverable as special damages caused by the defendant's wrongful conduct. (Ibid.) Moreover, in malicious prosecution actions, the attorney fees and costs incurred in defending the frivolous suit may sometimes be the only special damages recovered by the plaintiff. (Peebler v. Olds (1945) 71 Cal.App.2d 382, 389.) Arguably the same should be true with respect to slander of title claims, since as the present appeal illustrates, the sole or primary damage sustained may be the fees incurred by the plaintiff to clear his title. As observed by another court: "In malicious prosecution, wrongful attachment, and slander of title, the defendants actually know their conduct forces the plaintiff to litigate," but aside from litigation expenses "actual damages are difficult to establish and often times are minimal in slander of title." (Rorvig v. Douglas, supra, 873 P.2d at p. 497.) Although there are differences between the two torts, we think the similarities are significant as they relate to this issue. Those similarities lend further support to the view we adopt herein. {Slip Opn. Page 65} Additionally, we note that courts in other jurisdictions have directly confronted this issue and have concluded that attorney fees incurred in removing the effects of slander of title are recoverable as special damages even in the absence of proof of an impairment of vendibility. For example, in Paidar v. Hughes (Minn. 2000) 615 N.W.2d 276, the only damages the plaintiff claimed were attorney fees incurred as a result of the defendant's slander of title. The Supreme Court of Minnesota held that the plaintiff could recover the fees as special damages: "Hughes does not claim a 'loss of sale' as his special damages; he claims attorney fees as his damages. The fact that Hughes ultimately was able to sell the property at issue here should not prevent him from recovering his attorney fees if he can show that he necessarily incurred them as a direct result of [the defendant's] tortious actions." (Id. at p. 281.) Likewise, in Colquhoun v. Webber (Me. 1996) 684 A.2d 405, the defendant argued that the plaintiffs' failure to allege and prove a specific lost sale as a result of the defendant's filing a frivolous deed was fatal to the plaintiffs' slander of title claim. The Supreme Court of Maine rejected that argument and held that "attorney fees incurred in removal of a cloud on a title caused by a spurious and vexatious deed do constitute proof of special damages in a slander of title action even in the absence of proof of an impairment of vendibility." (Id. at p. 411.) We concur with the reasoning of these courts. Defendants' main objection is that such a result would overthrow the American rule regarding recovery of attorney fees, as set forth in Code of Civil Procedure section 1021. We disagree with that assertion, since what we are dealing with here (as in the case of malicious prosecution) is a tort in which the case law has deemed such attorney fees and costs to be a form of special damages flowing from the defendant's tortious conduct. (Contra Costa County Title Co. v. Waloff, supra, "184 Cal.App.2d at p. 67.) An award of fees as damages is distinguishable from an award of fees as fees, and only the latter is directly covered by section 1021. (Brandt v. Superior Court (1985) 37 Cal.3d 813, 816-818 (Brandt);Prentice v. North Amer. Title Guar. Corp. (1963) 59 Cal.2d 618, 621 [such cases are "not dealing with 'the measure and mode of compensation of attorneys' but with damages wrongfully caused by [the] defendant's {Slip Opn. Page 66} improper actions"].) Allowing fees as the sole pecuniary damage in slander of title cases would not overthrow the American Rule, just as it has not done so in malicious prosecution cases. Finally, we observe that all the reasons elaborated above in support of allowing recovery in the present case are especially compelling when it is considered that the slander of title here was by a recordeddocument. Where a defendant slanders title by means of a recorded instrument, thereby publishing in the chain-of-title a false and disparaging view of the nature of the plaintiff's right or interest in the land, the plaintiff is obviously put in a position where his only viable recourse is to bring suit to clear his title of the recorded falsehood. And, as one court emphasized, a recorded slander of title has a continuing negative impact until corrected: "'[I]n the instant case the libel was recorded in the office of the county recorder where the land was situate and constituted a continuing, permanent notice to the world that a judgment lien ... rested upon respondent's real property. [The recorded libel] was
communicated to the entire purchasing public.'" (Coley v. Hecker (1928) 206 Cal. 22, 29, italics added.) The fact that the Notice of Permission was a recorded instrument in the chain of title decidedly weighs in favor of allowing recovery of fees alone as damages. Although we have made some comments of a general nature in our discussion of this matter, our decision relates only to the particular facts of this case. Applying the reasoning discussed at length above, we hold that at least in cases involving a recorded slander of title (as here), the expenses incurred by plaintiffs in the form of attorney fees and costs to clear title and remove the doubt cast upon their property rights by the recorded falsehood are sufficient special damages to support the cause of action; no other pecuniary damages need be shown. (See, e.g., Arthur v. Davis (1981) 126 Cal.App.3d 684, 690-691 [attorney fees to clear title were acknowledged as the sole pecuniary damage in slander of title cause of action based on a recorded false deed]). fn. 49 Therefore, {Slip Opn. Page 67} the trial court correctly allowed the jury to award those damages in the present case, even though no special damage to salability of the property was found. C. Apportionment of Fees Alternatively, defendants ask for a new trial on the damages that were awarded for slander of title, claiming that the trial court prejudicially erred in instructing the jury on the question of apportionment of fees and in allowing experts to testify on that issue. fn. 50 We disagree. At the time the case was tried, plaintiffs as well as defendants had pending causes of action for slander of title. The trial court instructed the jury on the law as it applied to both sides' claims for attorney fees as damages for slander of title. Specifically, the trial court informed the jury that attorney fees and litigation costs necessary to clear a slandered title were recoverable as to the slander of title cause of action, but added that attorney fees and costs were not recoverable regarding other causes of action. The trial court further instructed the jury: "However, attorney's fees and litigation costs need not be apportioned when incurred for representation on an issue common to both a cause of action for which attorney's fees and costs are awardable and for which they are not allowed. [] If you find that non-fee claims are inexplicably interrelated with fee claims, you may award attorney's fees and costs incurred in connection with those inextricably related claims." That instruction was based on the well-established general rules regarding apportionment of fees. As was stated in Reynolds Metal Co. v. Alperson (1979) 25 {Slip Opn. Page 68} Cal.3d 124 (Reynolds) at pages 129 to 130: "Attorney's fees need not be apportioned when incurred for representation on an issue common to both a cause of action in which fees are proper and one in which they are not allowed." (See also Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 687 [apportionment not required when claims for relief are "so intertwined that it would be impracticable, if not impossible, to separate the attorney's time into compensable and noncompensable units"]; Drouin v. Fleetwood Enterprises (1985) 163 Cal.App.3d 486, 493 ["Attorneys fees need not be apportioned between distinct causes of action where plaintiff's various claims involve a common core of facts or are based on related legal theories"].) On appeal, defendants argue it was error for the trial court to instruct the jury that fees need not be apportioned where the claims and issues were inextricably intertwined. Apparently, defendants' position is that the principles of apportionment set forth in cases such as Reynolds do not apply to this case. In support, defendants rely on Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 805-813 (Cassim) for the proposition that whenever attorney fees are awarded as damages, there must be an apportionment or allocation as a matter of law. But Cassim is not authority for such a broad proposition. That case involved an insured's action for tortious breach of good faith and fair dealing in which, pursuant to a prior decision of the Supreme Court, the recoverable amount of fees-as-damages could not exceed "'the amount attributable to the attorney's efforts to obtain the rejected payment due on the insurance contract'" such that "'[f]ees attributable to obtaining any portion of the plaintiff's award which exceeds the amount due under the policy are not recoverable.'" (Id. at p. 807, quotingBrandt, supra, 37 Cal.3d at p. 819, italics omitted.) Applying the narrow scope and purpose of Brandtfees, Cassim held that even when there was overlap between the tort and contract claims, apportionment was necessary. (Cassim, supra, at pp. 811-812.) The court then provided a method or formula for the calculation of such fees in instances where the attorney was retained on a contingency fee basis. (Id. at p. 812.) We believe that Cassim is distinguishable. It addressed the special setting of Brandt fees where the insurance policy rights being
vindicated--and concerning which {Slip Opn. Page 69} fees-as-damages were available--were inherently narrower than the entire scope of the litigation entailing both tort and contract claims. Therefore, to effectuate the limited purpose of Brandt fees, Cassim held that apportionment or allocation was required to ensure the plaintiff only received fees for a particular portion of the overall case. (Cassim, supra, 33 Cal.4th at pp. 807-813.) In slander of title cases, the nature of the property rights and interests at stake, and concerning which the plaintiff has been forced to litigate, may differ on a case-by-case basis. In some cases, the slander of title issues may be sufficiently broad that resolution of those issues would be inseparable from other issues and claims that arose in the same litigation. That appears to be the basis on which the issue was decided in the present case. We conclude Cassim is distinguishable and, therefore, the trial court correctly instructed the jury. Moreover, to the extent defendants are attempting to argue that the jury's results with respect to fees-as-damages and apportionment were not supported by the record in this case, defendants have failed to meet their burden of cogently explaining their position with specific citation to the record below. We disregard a claim of error made without meaningful analysis or citation to the record. (Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 534 ["It is not our place to comb the record seeking support for assertions parties fail to substantiate"].) During the trial, both sides had attorneys testify as expert witnesses on the issue of the portion of attorney fees attributable to slander of title, and the extent to which such fees should, or should not, be apportioned. The fees in question were those incurred by plaintiffs in the first phase of the case--that is, the court trial. Plaintiffs' expert, Jerry Mann, explained that segregation or allocation of fees between compensable and noncompensable claims is not required when the issues are inextricably interrelated and common questions exist, which make apportionment impracticable. Thus, plaintiffs' expert did not misstate the law to the jury. Mann went on to provide his opinion that the fees incurred need not be apportioned in this case, since in his assessment all of the fees were inextricably part of the same common issues of plaintiffs' right to river access and to maintain a private, gated subdivision. These two ultimate issues, which were integral {Slip Opn. Page 70} to the slander of title claim, permeated the entire phase one of the litigation. David Gilmore testified for defendants, and his opinion was that the fees were not inextricably interrelated, but rather could be segregated and apportioned and he concluded that plaintiffs should receive only 10 percent of the total fees they incurred. In closing arguments, defendants' attorneys acknowledged the concept of inextricably interrelated fees and referred to the conflicting testimony of the parties' expert attorneys. Defense counsel expressly invited the jury to award plaintiffs all of their fees if they accepted Mann's testimony. To summarize, the jury was correctly instructed by the trial court concerning the law, both sides had the opportunity of presenting expert attorney testimony on the fee issue, and both sides did so. Plaintiffs' expert did not misstate the law or mislead the jury. There was extensive cross-examination of the fee experts, and in closing argument the parties' attorneys again referred to the evidence and argued their respective positions. Defendants have failed to explain why, as a matter of law, the trier of fact could not conclude on this record that the claims and issues were so inextricably intertwined that apportionment was not feasible. On balance, we conclude that defendants have failed to show a prejudicial error in regard to this matter of attorney fees as damages.
BARRIONUEVO v. CHASE BANK, NA, Dist. Court, ND California 2012
BARRIONUEVO v. CHASE BANK, NA, Dist. Court, ND California 2012
JOSE BARRIONUEVO, et al., Plaintiffs, v. CHASE BANK, N.A., et. al., Defendants.
No. C-12-0572 EMC. United States District Court, N.D. California. August 6, 2012.
ORDER DENYING DEFENDANTS JP MORGAN CHASE BANK, N.A. AND CALIFORNIA RECONVEYANCE CO.'S MOTION TO DISMISS (Docket No. 23)
EDWARD M. CHEN, District Judge.
I. INTRODUCTION
Plaintiffs Jose and Flor Barrionuevo (collectively "the Barrionuevos") sued Defendants JP Morgan Chase Bank ("Chase") and California Reconveyance Corporation ("California Reconveyance") on February 3, 2012, after California Reconveyance attempted to foreclose on a Deed of Trust ("DOT") that the Barrionuevos executed for the purchase of a home in California. Pls.' Opp. to Mot. to Dismiss (Docket No. 25) at 1. Chase is the successor in interest to Washington Mutual Bank ("Washington Mutual"), who executed the DOT with the Barrionuevos and funded the loan for the purchase of the subject property. In their amended complaint, the Barrionuevos assert claims against Defendants for wrongful foreclosure, slander of title, violating California Civil Code 2923.5, and violating California's Unfair Business Practices Act (Cal. Bus. Prof. Code 17200). See Pls.' Am. Compl. (Docket No. 20). On February 23, 2012, the Barrionuevos moved ex parte for a temporary restraining order barring Defendants from completing California's nonjudicial foreclosure process, which this Court denied on February 29, 2012, after a hearing on the merits. See Pls.' Mot. for TRO (Docket No. 5); Min. Entry Den. TRO (Docket No. 13). California Reconveyance and Chase thereafter filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). See Defs.' Mot. to Dismiss (Docket No. 23). Having considered the papers filed in support of and in opposition to the instant Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local Rule. 7-6. For the following reasons, Defendants' motion is DENIED.
II. FACTUAL & PROCEDURAL BACKGROUND

On February 28, 2006, the Barrionuevos entered into a DOT with Washington Mutual and California Reconveyance for the purchase of a single family home in Dublin, California. Defs.' Mot. to Dismiss, Ex. A. The DOT was recorded in Alameda County on March 3, 2006, against the subject property (known as 5931 Annadele Way) to secure a promissory note in favor of Washington Mutual for a loan of $1,720,000. Pls.' Am. Compl. 9. The DOT conveys title and power of sale to California Reconveyance, and names Washington Mutual as both "Lender" and "Beneficiary." Defs.' Mot. to Dismiss, Ex. A at 1-3. In the event of default or breach by the borrower, and after first having been given an opportunity to cure, the DOT grants to the Lender the power "to require immediate payment in full of all sums secured by this security instrument without further demand," and "the power of sale and any other remedies permitted by Applicable law." Defs.' Mot. to Dismiss, Ex. A at 15. In May of 2006, the Barrionuevos allege that Washington Mutual "securitized and sold Plaintiffs' Deed of Trust to the WMALT Series 2006-AR4 Trust," naming La Salle Bank as Trustee. Pls.' Am. Compl. 10. In support of this allegation they point to a report prepared by Certified Forensic Loan Auditors, which apparently reaches the same conclusion. See Pls.' Am. Compl., Ex. A Property Securitization Analysis Report. In September of 2008, after the purported sale of the Barrionuevos' DOT, the U.S. Office of Thrift Supervision closed Washington Mutual and appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. See Pls.' Am. Compl. 11; Defs.' Mot. to Dismiss at 2. Shortly thereafter, Chase acquired certain assets of Washington Mutual from the FDIC. Id. Having been sold at an
earlier point to the WMALT Series 2006-AR4 Trust, the Barrionuevos allege that any beneficial interest under their DOT could not have been purchased or obtained by Chase during this acquisition. See Pls.' Opp. to Mot. to Dismiss at 3. About a year later, California Reconveyance initiated nonjudicial foreclosure proceedings against the Barrionuevos regarding the subject property by recording a "Notice of Default and Election to Sell Under Deed of Trust" with the County of Alameda on April 7, 2009. Pls.' Am. Compl., Ex. B Notice of Default. The Notice of Default identified Washington Mutual as the beneficiary of record, and included a statement that "the beneficiary or its designated agent declares that it has contacted the borrower" or has "tried with due diligence to contact the borrower as required by California Civil Code 2923.5." Id. at 2. The Barrionuevos allege, contrary to this statement, that neither of the Defendants contacted Plaintiffs "at least 30 days prior to recording the Notice of Default" in violation of 2923.5. [1] See Pls.' Am. Compl. 28, 32. Thereafter, California Reconveyance recorded three separate Notices of Trustee's Sales regarding the subject property with the County of Alameda, the most recent having been filed with the County on February 2, 2012. Pls.' Am. Compl. 13-14; see also Defs.' Mot. to Dismiss, Ex. C, D, and E. [2] The Barrionuevos initiated suit against Chase and California Reconveyance on February 3, 2012, with a complaint listing nine causes of action. Compl. (Docket No. 1). They have since filed an amended complaint listing only four causes of action, namely (1) Wrongful Foreclosure, (2) Slander of Title, (3) Violation of Cal. Civ. Code 2923.5, and (4) Violation of the California Unfair Business Practices Act (Cal. Bus. Prof. Code 17200). See Pls.' Am. Compl. Soon after Plaintiffs' amended their complaint, Defendants jointly moved to dismiss the amended complaint "pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, in its entirety, for failure to state a claim upon which relief can be granted." Defs.' Mot. to Dismiss at 1.
III. DISCUSSION A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss based on the failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. SeeParks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In considering such a motion, the Court may consider facts alleged in the complaint, materials incorporated into the complaint by reference, and matters of which the Court may take judicial notice. [3] Zucco Partners LLC v. Digimarc Corp., 552 F.3d 981, 989 (9th Cir. 2009). A court must also take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Thus, "a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). At issue in a 12(b)(6) analysis is "not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims" advanced in his or her complaint.Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). While "a complaint need not contain detailed factual allegations . . . it must plead `enough facts to state a claim to relief that is plausible on its face.'" Cousins, 568 F.3d at 1067 (9th Cir. 2009). "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." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009);see also Bell Atl. Corp. v. Twombly, 550 U.S. at 556. "The plausibility standard is not akin to a `probability requirement,' but it asks for more than sheer possibility that a defendant acted unlawfully." Id.
B. Tender Rule
Chase and California Reconveyance argue as a threshold matter that "this Motion should be granted and Plaintiffs' Complaint dismissed, in its entirety" because the Barrionuevos have failed to provide or allege a willingness to "tender the outstanding indebtedness owed under the promissory note and Deed of Trust." Defs.' Mot. to Dismiss at 8. They argue that, absent an offer to tender the obligation in full, California law deprives plaintiffs of standing to challenge nonjudicial foreclosure proceedings. See Id. at 7-8. As this Court explained in Tamburri v. Suntrust Mortgage, et. al., No. C-11-2899 EMC, 2011 WL 6294472 (N.D. Cal. Dec. 15, 2011), the exceptions and qualifications to California's `tender rule' counsel against such a mechanical application of the rule at the pleading stage. "The California Court of Appeal has held that the tender rule applies in an action to set aside a trustee's sale for irregularities in the sale notice or procedure and has stated that `[t]he 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.'" Cohn v. Bank of America, No. 2:10-cv-00865 MCE KJN PS, 2011 WL 98840, at *9
(E.D. Cal. Jan. 12, 2011) (quoting FPCI RE-HAB 01 v. E & G Invs., Ltd., 207 Cal. App.3d 1018, 1021 (1989)). As Defendants rightly point out, it is a general rule that "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 premised upon the equitable maxim that a court of equity will not order that a useless act be performed." Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 578-79 (1984). However, as this Court discussed at length in Tamburri, "the tender rule is not without exceptions." Tamburri, 2011 WL 6294472 at *3. Several court have recognized a general equitable exception to applying the tender rule where "it would be inequitable to do so." Onofrio v. Rice, 55 Cal. App. 4th 413, 424 (1997) (internal citations and quotations omitted); see e.g.Humboldt Sav. Bank v. McCleverty, 161 Cal. 285, 291 (1911) (recognizing that there are "cases holding that, where a party has the right to avoid a sale, he is not bound to tender any payment in redemption;" adding that, "[w]hatever may be the correct rule, viewing the question generally, it is certainly not the law that an offer to pay the debt must be made, where it would be inequitable to exact such offer of the party complaining of the sale"); Robinson v. Bank of Am., 12-CV-00494-RMW, 2012 WL 1932842, at *3 (N.D. Cal. May 29, 2012) (inequitable to apply tender rule in certain circumstances); Bowe v. Am. Mortg. Network, Inc., CV 11-08381 DDP SHX, 2012 WL 2071759, at *2 (C.D. Cal. June 8, 2012) (same); Giannini v. American Home Mortg. Servicing, Inc., No. 11-04489 TEH, 2012 WL 298254, at *3 (N.D. Cal. Feb.1, 2012) (same). In the instant case, the Barrionuevos have a fairly strong argument that tender or at least full tender should not be required because they are contesting not only irregularities in sale notice or procedure, but the validity of the foreclosure in the first place. Courts have declined to require tender in just such circumstances. See In re Salazar, 448 B.R. 814, 819 (S.D. Cal. 2011) ("If U.S. Bank was not authorized to foreclose the [Deed of Trust] under Civil Code section 2932.5, the foreclosure sale may be void, and Salazar would not need to tender the full amount of the Loan to set aside the sale."); Sacchi v. Mortgage Electronic Registration Systems, Inc., No. CV 11-1658 AHM (CWx), 2011 WL 2533029, at *9-10 (C.D. Cal. June 24, 2011) (declining to require tender in wrongful foreclosure action because it "would permit entities to foreclose on properties with impunity"). Further, a growing number of federal courts have explicitly held that the tender rule only applies in cases seeking to set aside a completed sale, rather than an action seeking to prevent a sale in the first place. See, e.g., Vissuet v. Indymac Mortg. Services, No. 09-CV2321-IEG (CAB), 2010 WL 1031013, at *2 (S.D. Cal. March 19, 2010) ("[T]he California `tender rule' applies only where the plaintiff is trying to set aside a foreclosure sale due to some irregularity."); Giannini v. American Home Mortg. Servicing, Inc., No. 11-04489 TEH, 2012 WL 298254, at *3 (N.D.Cal. Feb.1, 2012) ("While it is sensible to require tender following a flawed sale where irregularities in the sale are harmless unless the borrower has made full tender to do so prior to sale, where any harm may yet be preventable, is not."); Robinson v. Bank of Am., 12-CV-00494-RMW, 2012 WL 1932842 (N.D. Cal. May 29, 2012) (the court found it "inequitable to apply the tender rule to bar plaintiff's claims" in part because "there has been no sale of the subject property"). [4] The cases cited by Defendants in support of applying the tender rule are distinguishable in that each of them addresses challenges levied against completed trustees' sales, not pre-sale challenges as here. See U.S. Cold Storage of Calif. v. Great W. Savings & Loan Assn., 165 Cal. App. 3d 1214 (1985) (plaintiff challenged irregularities in sale notice or procedure after trustee sale was held); Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575 (Cal. Ct. App. 1984) (action by junior lienor to set aside a completed trustee sale); Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101 (1996) (action challenging validity of trustee sale after sale occurred); Karlsen v. Am. Sav. & Loan Assn., 15 Cal. App. 3d 112 (Cal. Ct. App. 1971)(action to cancel a completed trustee sale under a deed of trust). Finally, as this Court explained in length in Tamburri, "where a sale is void, rather than simply voidable, tender is not required." Tamburri, 2011 WL 6294472 at *4 (citing Miller & Starr California Real Estate 3d 10:212 ("When the sale is totally void, a tender usually is not required.")). A sale that is deemed "void" means, "in its strictest sense [] that [it] has no force and effect," whereas one that is deemed "voidable" can be "avoided" or set aside as a matter of equity. Little v. CFS Serv. Corp., 188 Cal. App. 3d 1354, 1358 (1987) (internal quotation marks omitted). In a voidable sale, tender is required "based on the theory that one who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract so that equity will not have been employed for an idle purpose." Dimock v. Emerald Properties LLC, 81 Cal. App. 4th 868, 878 (2000). That reasoning does not extend to a sale that is void ab initio, since the contract underlying such a transaction is a "nullity with no force or effect as opposed to one which may be set aside" in reliance on equity. Id. at 876. InDimock, the California Court of Appeal held that where an incorrect trustee had foreclosed on a property and conveyed it to a third party, and the conveyed deed was not merely voidable but void, tender was not required. Id. at 878 ("Because Dimock was not required to rely upon equity in attacking the deed, he was not required to meet any of the burdens imposed when, as a matter of equity, a party wishes to set aside a voidable deed . . . In particular, contrary to the defendants' argument, he was not required to tender any of the amounts due under the note."). For the purposes of the `tender rule,' the Court finds Dimock to be sufficiently analogous to the present case to counsel against its application here.
Moreover, the relevant documentation in this case supports the finding that the sale is void. Where a notice defect provides the basis for challenging a sale under a deed of trust, as is the case here with the Barrionuevos' allegation of noncompliance with Cal. Civ. Code 2923.5, California courts examine in detail the deed of trust's language to determine whether it contains "conclusive presumption language in the deed" regarding notice defects that would render the sale merely voidable as opposed to void. Little, at 1359. As was explained in Tamburri, when a notice defect is at issue, it is not the extent of the defect that is determinative. Rather, "what seems to be determinative" is whether the deed of trust contains a provision providing for a conclusive presumption of regularity of sale. Little, 188 Cal. App. 3d at 1359, 233 Cal. Rptr. 923. "Where there has been a notice defect and no conclusive presumption language in the deed, the sale has been held void." Id. (emphasis in original). In contrast, "[w]here there has been a notice defect and conclusive presumption language in a deed, courts have characterized the sales as `voidable.'" Id. (emphasis added). Tamburri, 2011 WL 6294472 at *5. In Little, the court considered a deed provision stating "[t]he recitals in such Deed of any matters, proceedings and facts shall be conclusive proof of the truthfulness and regularity thereof" to be conclusive presumption language. Little, at 1360. In this case, the Barrionuevos' deed of trust provides no such conclusive presumption language. Therefore, "the Court cannot conclude, at least at this juncture, that the sale is merely voidable wherein tender would be required." Ottolini v. Bank of America, No. C-110477 EMC, 2011 WL 3652501, at *4 (N.D.Cal. Aug.19, 2011); see also Tamburri, 2011 WL 6294472 at *5. These exceptions and qualifications to the tender rule raise significant doubts as to whether it should be mechanically applied at the pleading stage under the allegations of the complaint herein. Thus, as in Tamburri, the Court declines to dismiss the complaint on the basis of the Barrionuevos' failure to allege tender.
C. Wrongful Foreclosure
The Barrionuevos' cause of action for wrongful foreclosure is based upon their belief that "Cal Reconveyance cannot conduct a valid foreclosure sale on behalf of Defendant JP Morgan because it is not the true present beneficiary under Plaintiffs' Deed of Trust." Pls.' Am. Compl. 18. This belief is based upon the following chain of events: In May of 2006, shortly after Plaintiffs entered into the Deed of Trust, WaMu [Washington Mutual] securitized and sold the beneficial interest in the Deed of Trust to the Series 2006-AR4 Trust. From that point on, the Series 2006-AR4 Trust became the only true beneficiary under Plaintiffs' Deed of Trust. Thus, when JP Morgan [Chase] acceded to certain of WaMu's assets in 2008, it could not have included the beneficial interest in Plaintiffs' Deed of Trust as WaMu had already sold the beneficial interest two years prior, in 2006. Since WaMu no longer owned the beneficial interest in Plaintiffs' Deed of Trust, it had nothing to convey to Defendant JP Morgan in 2008 and Defendant JP Morgan is not the truebeneficiary. Id. Related to the allegation that Chase did not acquire Plaintiffs' DOT from Washington Mutual, the Barrionuevos further base their wrongful foreclosure claim on the grounds that the Defendants have failed to comply with California Civil Code 2932.5, in that they have not "recorded a document in the public chain of title reflecting from whom [they] acquired the beneficial interest in Plaintiffs' Deed of Trust," as required by the statute. Id. at 21. Section 2932.5 provides as follows: Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is acknowledged and recorded. Cal. Civ. Code 2932.5 (emphasis added). Chase and California Reconveyance question Plaintiffs' assertion that the DOT for the subject property was securitized into the Series 2006-AR4 Trust. See Defs.' Mot. to Dismiss at 5 ("A careful analysis of the information provided in the prospectus for which the "Property securitization Analysis Report"provides a website address demonstrates the Loan at issue is not part of the WMALT Series 2006-AR4 Trust."); see also Defs.' Reply Br. ISO Mot. to Dismiss (Docket 26) at p. 2 ("As shown in the analysis of Defendant's motion, there is no connection between the prospectus for the Series 2006-AR4 Trust and the Plaintiffs' mortgage loan. There was no securitization."). Neither the Defendants' Motion to Dismiss, the Plaintiff's Response Brief, nor the Defendant's Reply Brief address the 2932.5 element of the Barrionuevos' wrongful foreclosure cause of action. The Court will, therefore, confine its analysis of the wrongful foreclosure claim to the Plaintiff's argument that the Defendants are not the current beneficiaries under the DOT.
Plaintiffs properly assert that only the "true owner" or "beneficial holder" of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law. Pls.' Response Brief at 4. In California, a "deed of trust containing a power of sale . . . conveys nominal title to property to an intermediary, the "trustee," who holds that title as security for repayment of [a] loan to [a] lender, or "beneficiary." Kachlon v. Markowitz, 168 Cal. App. 4th 316, 334 (2008) (internal citations omitted). The "trustee in nonjudicial foreclosure is not a true trustee with fiduciary duties, but rather a common agent for the trustor[5] and beneficiary." Id. 335 (internal citations omitted). The trustee's duties "are twofold: (1) to "reconvey" the deed of trust to the trustor upon satisfaction of the debt owed to the beneficiary, resulting in a release of the lien created by the deed of trust, or (2) to initiate nonjudicial foreclosure on the property upon the trustor's default, resulting in a sale of the property." Id. at 334 (internal citations omitted). The beneficiary, ultimately, is the party that initiates nonjudicial foreclosure, since the trustee who records a Notice of Default pursuant to Cal. Civ. Code 2924 does so as the authorized agent of beneficiary. See Cal. Civ. Code 2924(a)(1); see also Kachlon, 168 Cal. App. 4th at 334("When the trustor defaults on the debt secured by the deed of trust, the beneficiary may declare a default and make a demand on the trustee to commence foreclosure.") (emphasis added). Several courts have recognized the existence of a valid cause of action for wrongful foreclosure where a party alleged not to be the true beneficiary instructs a trustee to file a Notice of Default and initiate nonjudicial foreclosure. For example, the court in Sacchi v. Mortgage Electronic Registration Systems, Inc., No. CV 11-1658 AHM (CWx), 2011 WL 2533029, at *9-10 (C.D. Cal. June 24, 2011), upheld a plaintiff's wrongful foreclosure claim against an entity alleged to have "no beneficial interest in the Deed of Trust when it acted to foreclose on Plaintiffs' home." There, the court expressed dismay when confronted with counsel's arguments suggesting that "someone . . . can seek and obtain foreclosure regardless of whether he has established the authority to do so." Id. at *7. The court asked, if defendants' argument that "the recording and execution date is inconsequential and in no way connotes that the DOT's beneficial interest was transferred at that precise time" was accepted, "how is one to determine whether (and when) the purported assignment was consummated? How could one ever confirm whether the entity seeking to throw a homeowner out of his residence had the legal authority to do so?" Id.at *6. Similarly, in Javaheri v. JPMorgan Chase Bank, N.A., CV10-08185 ODW FFMX, 2011 WL 2173786, at *5-6 (C.D. Cal. June 2, 2011), the court denied Defendant JPMorgan's motion to dismiss a very similar wrongful foreclosure claim to the one at issue here when the plaintiff alleged that Washington Mutual, plaintiff's original lender, had "transferred Plaintiff's Note to Washington Mutual Mortgage Securities Corporation" prior to its closure by the U.S. Office of Thrift Supervision and JPMorgan's subsequent acquisition of its assets. Id. at *5. The court took note of the fact that the plaintiff had produced specific "facts regarding the transfer of Plaintiff's Note" suggesting that Washington Mutual had indeed alienated its beneficial interest to plaintiff's deed of trust prior to JPMorgan's later acquisition of Washington Mutual's assets.Id. "Coupled with Plaintiff's allegation that JPMorgan never properly recorded its claim of ownership in the Subject Property," the court ruled that the "above mentioned facts regarding the transfer of Plaintiff's Note prior to JPMorgan's acquisition of [Washington Mutual]'s assets raise Plaintiff's right to relief above a speculative level," and held that plaintiff's allegation "that JPMorgan did not own his Note and therefore did not have the right to foreclose" was sufficient to withstand JPMorgan's motion to dismiss. Id. at *5-6. Likewise in Ohlendorf v. Am. Home Mortg. Servicing, 279 F.R.D. 575, 583 (E.D. Cal. 2010), the court recognized that, while "proof of possession of the note" is not necessary to "legally institute non-judicial foreclosure proceedings against plaintiff," the plaintiff still had a viable claim for wrongful foreclosure insofar as he argued that defendants "are not the proper parties to foreclose." Id. at 583. "Accordingly," the court denied "defendants motion to dismiss plaintiff's wrongful foreclosure [claim] . . . insofar as it is premised on defendants being proper beneficiaries." Id. Finally, in Castillo v. Skoba, No. 10cv1838 BTM, 2010 WL 3986953, at*2 (S.D. Cal. Oct. 8, 2010), the court granted a preliminary injunction in a foreclosure case where it concluded that "Plaintiff is likely to succeed on the merits of his claim that neither Aurora nor Cal-Western had authority to initiate the foreclosure sale at the time the Notice of Default was entered." There, the court ruled on the record before it that the applicable "[d]ocuments do not support a finding that either Cal-Western was the trustee or Aurora was the beneficiary on May 20, 2010 when the Notice of Default was recorded." Id. See also Robinson v. Countrywide Home Loans, Inc., 199 Cal.App.4th 42, 46 Fn. 5 (2011) ("a borrower who believes that the foreclosing entity lacks standing to do so" is not "without a remedy. The borrower can seek to enjoin the trustee's sale or to set the sale aside."); Gomes v. Countrywide Home Loans, Inc.,192 Cal. App. 4th 1149, 1156 (2011) (upholding the dismissal of plaintiff's wrongful foreclosure action, but noting as "significant" the fact that cases cited by plaintiff permitting wrongful foreclosure action "identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party. [plaintiff] has not asserted any factual basis to suspect that [defendant] lacks authority to proceed with the foreclosure.") (emphasis in original). In the present case, the Barrionuevos allege that Chase and California Reconveyance recorded their April 7, 2009, Notice of Default without the legal right to do so, given that the prior alienation of Plaintiff's DOT by Washington Mutual in 2006 precluded these Defendants from obtaining any beneficial interest in the DOT. See Am. Compl. 16-22; Pls.' Response
Brief at 3. In tandem to their 2935.2 claim, Plaintiffs allege that this prior alienation of the DOT renders Defendants' Notice of Default and subsequent Notices of Trustee's Sales invalid. The allegation challenging the validity of Washington Mutual's assignment of Plaintiffs' DOT to Chase suggests that the foreclosing parties did not have authority to issue the Notices. Despite Defendants' invitation to the contrary, further examination into the 2006 transaction would require a factual inquiry not suitable in a 12(b)(6) motion. Thus, insofar as Plaintiffs contend that the Notice of Default is invalid due to a lack of authority to foreclose, their wrongful foreclosure claim is similar to those advanced in Sacchi, Javaheri, Ohlendorf, Skoba, and, of course, this Court's ruling in Tamburri. Accordingly, this Court finds that the Plaintiffs have sufficiently stated a claim for wrongful foreclosure. Regardless of whether 2932.5 applies, under California law a party may not foreclose without the legal power to do so. Plaintiff alleges that the wrong parties issued the Notice of Default. At the 12(b)(6) stage, given the factual uncertainties underlying the parties' arguments, Plaintiffs' claim is sufficient to withstand a motion to dismiss.
D. Slander of Title
The Barrionuevos next advance a cause of action for slander of title. In their amended complaint, they allege that Chase "acted with malice and a reckless disregard for the truth by simply assuming it was the beneficiary under Plaintiffs' Deed of Trust" when it recorded a "Notice of Trustee's Sale . . . that cannot lead to a valid foreclosure." Am. Compl. 24. They further allege that "the recordation of the February 2, 2012 Notice of Trustee's Sale was therefore false, knowingly wrongful, without justification, in violation of statute, unprivileged, and caused doubt to be placed on Plaintiffs' title to the property," and that the "recordation of the foregoing documents directly impairs the vendibility of Plaintiffs' property on the open market in the amount of a sum to be proved at trial." Id. 25. Neither Plaintiffs nor Defendants address this cause of action in any of the papers accompanying Defendants' Motion to Dismiss. The California Court of Appeals for the Fifth District recently outlined the elements required to successfully bring a cause of action for slander of title. In Sumner Hill Homeowners' Assn., Inc. v. Rio Mesa Holdings, LLC, the court explained that "slander or disparagement of title occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property and causes the owner thereof some special pecuniary loss or damage." 205 Cal. App. 4th 999, 1030 (citing Fearon v. Fodera 169 Cal. 370 (1915)). The required elements of this tort are "(1) a publication, (2) without privilege or justification, (3) falsity, and (4) direct pecuniary loss." Id. (citing Truck Ins. Exchange v. Bennett, 53 Cal.App.4th 75, 84 (1997); Howard v. Schaniel,113 Cal.App.3d 256, 263-264 (1980)). The Barrionuevos' amended complaint is sufficient to "to state a claim to relief that is plausible on its face'"with regard to this tort. Cousins, 568 F.3d at 1067 (9th Cir. 2009). Plaintiffs allege, and Defendants do not appear to question, that they effected a publication regarding Plaintiffs title to the subject property (i.e. the Notice of Default and the three Notices of Trustee's Sales). Whether that publication was done "without privilege or justification" is somewhat harder to discern. In Gudger v. Manton, the California Supreme Court held that "a rival claimant of property is conditionally privileged to disparage or justified in disparaging another's property in land by an honest and good-faith assertion of an inconsistent legally protected interest in himself." 21 Cal. 2d 537, 545 (1943). The Gudger Court went on to say that an "express finding of lack of good faith, or of actual malice . . . would destroy the privilege or justification here discussed." Id. at 546. Plaintiffs allege quite clearly that Defendants published the February 2, 2012, Notice of Trustee's sale with "malice and a reckless disregard for the truth." Am. Compl. 24. Broadly construing their amended complaint, it would be fair to conclude that Plaintiffs view the remaining three Notices published by Chase and California Reconveyance in a similar light. Thus, on balance, Plaintiffs have alleged sufficient facts to satisfy this element of the tort at the 12(b)(6) stage. Likewise, Plaintiffs allege with some force the apparent falsity of Defendants' four publications. Finally, the Barrionuevos claim that Defendants' publications "directly impair[ed] the vendibility of Plaintiffs' property on the open market," and caused Plaintiffs to incur costs related to bringing "this action to cancel the instruments casting doubt on Plaintiffs' title," is sufficient to allege the "direct pecuniary loss" element to a slander of title action. Id. at 2526. See also Sumner Hill, 205 Cal. App. 4th at 1030 ("it is well-established that attorney fees and litigation costs are recoverable as pecuniary damages in slander of title causes of action."). Accordingly, to the extent Defendants' Motion to Dismiss reaches Plaintiffs' action for slander of title, Plaintiffs have met their burden to plead sufficient "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."Ashcroft v. Iqbal, 129 S. Ct. at 1949.
E. California Civil Code 2923.5

California Civil Code 2923.5(a)(1) provides that "[a] mortgagee, trustee, beneficiary, or authorized agent may not file a notice of default pursuant to Section 2924 until 30 days afterinitial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements as described in subdivision (g)." Cal. Civ. Code 2923.5(a)(1)
(emphasis added). Under paragraph (2), "[a] mortgagee, beneficiary, or authorized agent shall contact the borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure." Id. 2923.5(a)(2). Under subdivision (g), "[a] notice of default may be filed . . . when a mortgagee, beneficiary, or authorized agent has notcontacted a borrower as required by paragraph (2) of subdivision (a) provided that the failure to contact borrower occurred despite the due diligence of the mortgagee, beneficiary, or authorized agent." Id. 2923.5(g) (emphasis added). If a mortgagee, beneficiary, or authorized agent fails to comply with 2923.5, "then there is no valid notice of default and, without a valid notice of default, a foreclosure sale cannot proceed." Mabry v. Superior Court, 185 Cal. App. 4th 208, 223 (2010). The only remedy for a violation of this section is "to postpone the sale until there has been compliance with section 2923.5." Id. (citing Cal. Civ. Code 2924g, subdivision (c)(1)(A)). In the instant case, the Barrionuevos assert that Chase and California Reconveyance violated 2923.5(a)(1) because they failed to contact them prior to filing the notice of default on April 7, 2009. Am. Compl. 28, 32. Despite the fact that the Defendants' Notice of Default included a statement that "the beneficiary or its designated agent declares that it has contacted the borrower" or has "tried with due diligence to contact the borrower as required by California Civil Code 2923.5," Plaintiffs assert that they were, in fact, "never contacted." Am. Compl., Ex. B Notice of Default; Am. Compl. 28. Defendants initially argue that the Barrionuevos fail to state a claim under this cause of action because they offer "no specified factual support" for their allegations. Defs.' Mot. to Dismiss at 9. However, their Reply Brief offers a very different assessment: Plaintiffs could not be clearer; "Plaintiffs allege that the Declaration is false because Plaintiffs were in fact never contacted." (Plaintiffs' opposition, p. 6, ln 21-23). Plaintiffs therefore claim that Defendant never called, never left a voice message, and never knocked on their door to discuss their default on the loan before having the NOD [Notice of Default] recorded. Plaintiffs' allegation also means that Defendant never offered them a trial loan modification payment plan or even offered to evaluate them for a loan modification before recording the NOD. Defs.' Reply Brief at 3 (emphasis in original). Defendants nonetheless contends that "[w]hen the foreclosing entity declares that it tried to contact the borrower, the statutory requirements are satisfied. Id., Defendants are mistaken. A mortgagee, beneficiary, or authorized agent has satisfied the "due diligence" requirement of 2923.5: if it was not able to contact the borrower after (1) mailing a letter containing certain information; (2) then calling the borrower "by telephone at least three times at different hours and on different days"; (3) mailing a certified letter, with return receipt requested, if the borrower does not call back within two weeks; (4) providing a telephone number to a live representative during business hours; and (5) posting a link on the homepage of its Internet Web site with certain information. Argueta v. J.P. Morgan Chase, 787 F. Supp. 2d 1099, 1107 (E.D. Cal. 2011) (citing Cal. Civ. Code. 2923.5(g)). Defendants have given no indication that they exercised "due diligence" as defined in the statute in trying to contact the Barrionuevos prior to recording the Notice of Default, other than their declaration in the Notice itself that they complied with the statute. When a plaintiff's allegations dispute the validity of defendant's declaration of compliance in a Notice of Default as here, the plaintiff has "plead `enough facts to state a claim to relief that is plausible on its face.'" Cousins, 568 F.3d at 1067 (9th Cir. 2009). See Argueta, 787 F. Supp. 2d at 1107; Caravantes v. California Reconveyance Co., 10CV1407, 2010 WL 4055560 (S.D. Cal. Oct. 14, 2010). Accordingly, Plaintiff's allegations of non-compliance are sufficient to defeat a motion to dismiss.
F. Unfair Business Practices Act

California's Unfair Business Practices Act, codified as Cal. Bus. Prof. Code 17200, prohibits unfair competition, which is defined as, inter alia, "any unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code 17200. Plaintiffs asserts claims under 17200 for Chase and California Reconveyance's violation of Cal Civ. Code 2923.5, and openly acknowledge that their 17200 claim "is a derivative cause of action." Pls.' Response Brief at 7. They also acknowledge that "plaintiffs' ability to pursue this cause of action depends on the success or failure of their substantive causes of action." Id. Defendants challenge the 17200 claim on the basis that "a violation [of Cal Civ. Code 2923.5] does not impact plaintiffs with an actual loss of money or property to give standing under Cal. B&P 17200." Defs.' Reply Brief at 3. However, "[i]t is undisputed that foreclosure proceedings were initiated which put [the Barrionuevos] interest in the property in jeopardy; this fact is sufficient to establish standing as this Court has previously held." Clemens v. J.P. Morgan Chase Nat. Corporate Services, Inc., No. C-09-3365 EMC, 2009 WL 4507742, at *7 (N.D. Cal. Dec. 1, 2009) (citing Sullivan v. Washington Mut. Bank, FA, No. C-09-2161 EMC, 2009 U.S. Dist. LEXIS 104074, at *13 (N.D. Cal. Oct. 23, 2009). See also Sacchi, 2011 WL
2533029 at *8-9 (refusing to dismiss under FRCP 12(b)(6) plaintiff's section 17200 claim, in part, because plaintiff alleged a violation of Cal Civ. Code 2923.5). Second, Defendants repeat their argument that Plaintiffs have "failed to allege facts sufficient to demonstrate that defendants violated Section 2923.5" Defs.' Mot. to Dismiss at 9-10. "A plaintiff alleging unfair business practices under [17200] must state with reasonable particularity the facts supporting the statutory elements of the violation." Khoury v. Maly's of California, Inc., 14 Cal. App. 4th 612, 619 (1993). As a derivative claim based upon defendants' alleged failure to comply with Cal Civ. Code 2923.5, the Barrionuevos' 17200 claim rises and falls along with that underlying cause of action. Having already determined that Plaintiffs' 2923.5 claim was pled with enough specificity and factual support to withstand Defendant's motion to dismiss, the Court finds Plaintiffs' 17200 claim is likewise sufficiently pled under Rule 12(b)(6).
IV. CONCLUSION
For the foregoing reasons, the Court DENIES Defendants' motion to dismiss. This Order disposes of Docket No. 23. IT IS SO ORDERED.
[1] Plaintiffs' amended complaint refers to the Defendants' Notice of Default as having been recorded on both November 21, 2011, and April 7, 2009. It appears that the November 21st date in the complaint is actually an erroneous reference to the Notice of Default recorded on April 7th, since the rest of record before the Court points only to April 7th as the date when that notice was recorded, and only the April 7th Notice of Default appears as an exhibit to the parties' pleadings and motion papers. [2] These three later notices included the following statement: In compliance with California Civil Code 2923.5(c) the mortgagee, trustee, beneficiary, or authorized agent declares: that it has contacted the borrower(s) to assess their financial situation and to explore options to avoid foreclosure; or that it has made efforts to contact the borrower(s) to assess their financial situation and to explore options to avoid foreclosure by one of the following methods: by telephone; by United States mail; either 1st class or certified; by overnight delivery; or by personal delivery; by e-mail; by face to face meeting. See e.g. Defs.' Mot. to Dismiss, Ex. C at 1. [3] Defendants request judicial notice of: (1) the February 28, 2006, Deed of Trust, (2) the April 7, 2009, Notice of Default, (3) the July 14, 2009, Notice of Trustee's Sale, (4) the October 19, 2010, Notice of Trustee's Sale, and (5) the February 2, 2012, Notice of Trustee's Sale. Defs.' Request for Judicial Notice (Docket 23). The Notice of Default and February 2, 2012, Notice of Trustee's Sale were already introduced by Plaintiffs as part of the amended complaint. The remaining three documents are matters of public record and are properly subject to judicial notice under Fed. R. Evid. 201(b). [4] California courts have also declined to view the `tender rule' as a bar to bringing actions seeking to prevent a yet-to-be-completed foreclosure sale. In Mabry v. Superior Court, 185 Cal. App. 4th 208 (2010), the California Court of Appeal found that a pre-foreclosure right under state law requiring borrowers "to be contacted to "assess" and "explore" alternatives to foreclosure prior to a notice of default" could be enforced by a borrower who had not first tendered the full amount of indebtedness owed on his note. Id. at 225 (emphasis in original). The court reasoned that "it would defeat the purpose of the statute to require the borrower to tender the full amount of the indebtedness prior to any enforcement of the right to and that's the point the right to be contacted prior to the notice of default." Id. (emphasis in original). The tender rule, the court held, "arises out of a paradigm where, by definition, there is no way that a foreclosure sale can be avoided absent payment of all the indebtedness." Id. (emphasis in original). In such a situation, "[a]ny irregularities in the sale would necessarily be harmless to the borrower if there was no full tender." Id. That contrasts markedly with a situation like the case at bar, where a borrower challenges the very authority of a party to proceed with nonjudicial foreclosure. It would hardly be "harmless" to require borrowers to tender the full amount owed in order to challenge what could be a wrongful foreclosure, where they assert not simply a right of redemption but "the right to avoid a sale" in the first place. Humboldt Sav. Bank v. McCleverty, 161 Cal. 285, 291 (1911). [5] The "trustor" in this context is a borrower who executes a trust deed securing a promissory note in favor of a lender.
Case3:12-cv-00572-EMC Document42 Filed08/07/12 Page1 of 2
1 2 3 4 5 6 7 8 9 10 United States District Court

Northern District of California
UNITED STATES DISTRICT COURT

Northern District of California Barrionuevo, Plaintiff(s), v. Chase Bank, N.A., Defendant(s). TO COUNSEL OF RECORD: The court notifies the parties and counsel that the Mediator assigned to this case is: Daniel Bowling USDC ADR Program 450 Golden Gate Ave., 16th Fl. San Francisco, CA 94102 415-522-2022 daniel_bowling@cand.uscourts.gov Counsel shall familiarize themselves with the requirements of ADR L.R. 6 which 12-00572 EMC MED Notice of Appointment of Mediator
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governs the Mediation program. The mediator will schedule a joint phone conference 23 with counsel under ADR L.R. 6-6 and will set the date of the mediation session within 24 the deadlines set by ADR L.R. 6-4 or the court order referring this action to mediation. 25 The court permits the mediator to charge each party its pro rata share of the cost of the 26 phone conference. 27 28 Notice of Appointment of Mediator 12-00572 EMC MED
-1-
1 2 3 4 5 6 7 8 9 10 United States District Court

Northern District of California
Counsel are reminded that the written mediation statements required by the ADR L.R. 6-7 shall NOT be filed with the court.
Dated: August 7, 2012 RICHARD W. WIEKING Clerk by: Claudia M. Forehand /s/ ADR Case Administrator 415-522-2059 Claudia_Forehand@cand.uscourts.gov
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Notice of Appointment of Mediator 12-00572 EMC MED -2-
1 2 3 4 5 6 7 8 9 10 v. CHASE BANK, N.A., et. al., Defendants. ___________________________________/ JOSE BARRIONUEVO, et al., Plaintiffs, ORDER DENYING DEFENDANTS JP MORGAN CHASE BANK, N.A. AND CALIFORNIA RECONVEYANCE CO.S MOTION TO DISMISS (Docket No. 23) No. C-12-0572 EMC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
United States District Court
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For the Northern District of California
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I.
INTRODUCTION
Plaintiffs Jose and Flor Barrionuevo (collectively the Barrionuevos) sued Defendants JP Morgan Chase Bank (Chase) and California Reconveyance Corporation (California Reconveyance) on February 3, 2012, after California Reconveyance attempted to foreclose on a Deed of Trust (DOT) that the Barrionuevos executed for the purchase of a home in California. Pls. Opp. to Mot. to Dismiss (Docket No. 25) at 1. Chase is the successor in interest to Washington Mutual Bank (Washington Mutual), who executed the DOT with the Barrionuevos and funded the loan for the purchase of the subject property. In their amended complaint, the Barrionuevos assert claims against Defendants for wrongful foreclosure, slander of title, violating California Civil Code 2923.5, and violating Californias Unfair Business Practices Act (Cal. Bus. Prof. Code 17200). See Pls. Am. Compl. (Docket No. 20). On February 23, 2012, the Barrionuevos moved ex parte for a temporary restraining order barring Defendants from completing Californias nonjudicial foreclosure process, which this Court denied on February 29, 2012, after a hearing on the merits. See Pls. Mot. for TRO (Docket No. 5); Min. Entry Den. TRO (Docket No. 13).
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California Reconveyance and Chase thereafter filed a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). See Defs. Mot. to Dismiss (Docket No. 23). Having considered the papers filed in support of and in opposition to the instant Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local Rule. 7-6. For the following reasons, Defendants motion is DENIED. II. FACTUAL & PROCEDURAL BACKGROUND
On February 28, 2006, the Barrionuevos entered into a DOT with Washington Mutual and California Reconveyance for the purchase of a single family home in Dublin, California. Defs. Mot. to Dismiss, Ex. A. The DOT was recorded in Alameda County on March 3, 2006, against the subject property (known as 5931 Annadele Way) to secure a promissory note in favor of Washington Mutual for a loan of $1,720,000. Pls. Am. Compl. 9. The DOT conveys title and power of sale to California Reconveyance, and names Washington Mutual as both Lender and Beneficiary. Defs. Mot. to Dismiss, Ex. A at 1-3. In the event of default or breach by the borrower, and after first having been given an opportunity to cure, the DOT grants to the Lender the power to require immediate payment in full of all sums secured by this security instrument without further demand, and the power of sale and any other remedies permitted by Applicable law. Defs. Mot. to Dismiss, Ex. A at 15. In May of 2006, the Barrionuevos allege that Washington Mutual securitized and sold Plaintiffs Deed of Trust to the WMALT Series 2006-AR4 Trust, naming La Salle Bank as Trustee. Pls. Am. Compl. 10. In support of this allegation they point to a report prepared by Certified Forensic Loan Auditors, which apparently reaches the same conclusion. See Pls. Am. Compl., Ex. A - Property Securitization Analysis Report. In September of 2008, after the purported sale of the Barrionuevos DOT, the U.S. Office of Thrift Supervision closed Washington Mutual and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. See Pls. Am. Compl. 11; Defs. Mot. to Dismiss at 2. Shortly thereafter, Chase acquired certain assets of Washington Mutual from the FDIC. Id. Having been sold at an earlier point to the WMALT Series 2006-AR4 Trust, the Barrionuevos allege that any beneficial interest under their DOT could not have been purchased or obtained by Chase during this acquisition. See Pls. Opp. to Mot. to Dismiss at 3.
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About a year later, California Reconveyance initiated nonjudicial foreclosure proceedings against the Barrionuevos regarding the subject property by recording a Notice of Default and Election to Sell Under Deed of Trust with the County of Alameda on April 7, 2009. Pls. Am. Compl., Ex. B - Notice of Default. The Notice of Default identified Washington Mutual as the beneficiary of record, and included a statement that the beneficiary or its designated agent declares that it has contacted the borrower or has tried with due diligence to contact the borrower as required by California Civil Code 2923.5. Id. at 2. The Barrionuevos allege, contrary to this statement, that neither of the Defendants contacted Plaintiffs at least 30 days prior to recording the Notice of Default in violation of 2923.5.1 See Pls. Am. Compl. 28, 32. Thereafter, California Reconveyance recorded three separate Notices of Trustees Sales regarding the subject property with the County of Alameda, the most recent having been filed with the County on February 2, 2012. Pls. Am. Compl. 13-14; see also Defs. Mot. to Dismiss, Ex. C, D, and E.2 The Barrionuevos initiated suit against Chase and California Reconveyance on February 3, 2012, with a complaint listing nine causes of action. Compl. (Docket No. 1). They have since filed an amended complaint listing only four causes of action, namely (1) Wrongful Foreclosure, (2) Slander of Title, (3) Violation of Cal. Civ. Code 2923.5, and (4) Violation of the California Unfair Business Practices Act (Cal. Bus. Prof. Code 17200). See Pls. Am. Compl. Soon after
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Plaintiffs amended complaint refers to the Defendants Notice of Default as having been recorded on both November 21, 2011, and April 7, 2009. It appears that the November 21st date in the complaint is actually an erroneous reference to the Notice of Default recorded on April 7th, since the rest of record before the Court points only to April 7th as the date when that notice was recorded, and only the April 7th Notice of Default appears as an exhibit to the parties pleadings and motion papers.
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These three later notices included the following statement: In compliance with California Civil Code 2923.5(c) the mortgagee, trustee, beneficiary, or authorized agent declares: that it has contacted the borrower(s) to assess their financial situation and to explore options to avoid foreclosure; or that it has made efforts to contact the borrower(s) to assess their financial situation and to explore options to avoid foreclosure by one of the following methods: by telephone; by United States mail; either 1st class or certified; by overnight delivery; or by personal delivery; by e-mail; by face to face meeting.
See e.g. Defs. Mot. to Dismiss, Ex. C at 1.
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Plaintiffs amended their complaint, Defendants jointly moved to dismiss the amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, in its entirety, for failure to state a claim upon which relief can be granted. Defs. Mot. to Dismiss at 1. III. A. Legal Standard Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss based on the failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6). A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). In considering such a motion, the Court may consider facts alleged in the complaint, materials incorporated into the complaint by reference, and matters of which the Court may take judicial notice.3 Zucco Partners LLC v. Digimarc Corp., 552 F.3d 981, 989 (9th Cir. 2009). A court must also take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). Thus, a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). At issue in a 12(b)(6) analysis is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims advanced in his or her complaint. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). While a complaint need not contain detailed factual allegations . . . it must plead enough facts to state a claim to relief that is plausible on its face. Cousins, 568 F.3d at 1067 (9th Cir. 2009). A claim has facial plausibility when the plaintiff pleads DISCUSSION
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Defendants request judicial notice of: (1) the February 28, 2006, Deed of Trust, (2) the April 7, 2009, Notice of Default, (3) the July 14, 2009, Notice of Trustees Sale, (4) the October 19, 2010, Notice of Trustees Sale, and (5) the February 2, 2012, Notice of Trustees Sale. Defs. Request for Judicial Notice (Docket 23). The Notice of Default and February 2, 2012, Notice of Trustees Sale were already introduced by Plaintiffs as part of the amended complaint. The remaining three documents are matters of public record and are properly subject to judicial notice under Fed. R. Evid. 201(b).
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factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. at 556. The plausibility standard is not akin to a probability requirement, but it asks for more than sheer possibility that a defendant acted unlawfully. Id. B. Tender Rule Chase and California Reconveyance argue as a threshold matter that this Motion should be granted and Plaintiffs Complaint dismissed, in its entirety because the Barrionuevos have failed to provide or allege a willingness to tender the outstanding indebtedness owed under the promissory note and Deed of Trust. Defs. Mot. to Dismiss at 8. They argue that, absent an offer to tender the obligation in full, California law deprives plaintiffs of standing to challenge nonjudicial foreclosure proceedings. See Id. at 7-8. As this Court explained in Tamburri v. Suntrust Mortgage, et. al., No. C-11-2899 EMC, 2011 WL 6294472 (N.D. Cal. Dec. 15, 2011), the exceptions and qualifications to Californias tender rule counsel against such a mechanical application of the rule at the pleading stage. The California Court of Appeal has held that the tender rule applies in an action to set aside a trustees sale for irregularities in the sale notice or procedure and has stated that [t]he 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. Cohn v. Bank of America, No. 2:10-cv-00865 MCE KJN PS, 2011 WL 98840, at *9 (E.D. Cal. Jan. 12, 2011) (quoting FPCI RE-HAB 01 v. E & G Invs., Ltd., 207 Cal. App.3d 1018, 1021 (1989)). As Defendants rightly point out, it is a general rule that an action to set aside a trustees 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 premised upon the equitable maxim that a court of equity will not order that a useless act be performed. Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575, 578-79 (1984). However, as this Court discussed at length in Tamburri, the tender rule is not without exceptions. Tamburri, 2011 WL 6294472 at *3. Several court have recognized a general equitable exception to applying the tender rule where it would be inequitable to do so. Onofrio v. Rice, 55
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Cal. App. 4th 413, 424 (1997) (internal citations and quotations omitted); see e.g. Humboldt Sav. Bank v. McCleverty, 161 Cal. 285, 291 (1911) (recognizing that there are cases holding that, where a party has the right to avoid a sale, he is not bound to tender any payment in redemption; adding that, [w]hatever may be the correct rule, viewing the question generally, it is certainly not the law that an offer to pay the debt must be made, where it would be inequitable to exact such offer of the party complaining of the sale); Robinson v. Bank of Am., 12-CV-00494-RMW, 2012 WL 1932842, at *3 (N.D. Cal. May 29, 2012) (inequitable to apply tender rule in certain circumstances); Bowe v. Am. Mortg. Network, Inc., CV 11-08381 DDP SHX, 2012 WL 2071759, at *2 (C.D. Cal. June 8, 2012) (same); Giannini v. American Home Mortg. Servicing, Inc., No. 11-04489 TEH, 2012 WL 298254, at *3 (N.D. Cal. Feb.1, 2012) (same). In the instant case, the Barrionuevos have a fairly strong argument that tender or at least full tender should not be required because they are contesting not only irregularities in sale notice or procedure, but the validity of the foreclosure in the first place. Courts have declined to require tender in just such circumstances. See In re Salazar, 448 B.R. 814, 819 (S.D. Cal. 2011) (If U.S. Bank was not authorized to foreclose the [Deed of Trust] under Civil Code section 2932.5, the foreclosure sale may be void, and Salazar would not need to tender the full amount of the Loan to set aside the sale.); Sacchi v. Mortgage Electronic Registration Systems, Inc., No. CV 11-1658 AHM (CWx), 2011 WL 2533029, at *9-10 (C.D. Cal. June 24, 2011) (declining to require tender in wrongful foreclosure action because it would permit entities to foreclose on properties with impunity). Further, a growing number of federal courts have explicitly held that the tender rule only applies in cases seeking to set aside a completed sale, rather than an action seeking to prevent a sale in the first place. See, e.g., Vissuet v. Indymac Mortg. Services, No. 09-CV-2321-IEG (CAB), 2010 WL 1031013, at *2 (S.D. Cal. March 19, 2010) ([T]he California tender rule applies only where the plaintiff is trying to set aside a foreclosure sale due to some irregularity.); Giannini v. American Home Mortg. Servicing, Inc., No. 11-04489 TEH, 2012 WL 298254, at *3 (N.D.Cal. Feb.1, 2012) (While it is sensible to require tender following a flawed sale where irregularities in the sale are harmless unless the borrower has made full tender to do so prior to sale, where any harm may yet be preventable, is not.); Robinson v. Bank of Am., 12-CV-00494-RMW, 2012 WL 1932842 (N.D.
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Cal. May 29, 2012) (the court found it inequitable to apply the tender rule to bar plaintiffs claims in part because there has been no sale of the subject property).4 The cases cited by Defendants in support of applying the tender rule are distinguishable in that each of them addresses challenges levied against completed trustees sales, not pre-sale challenges as here. See U.S. Cold Storage of Calif. v. Great W. Savings & Loan Assn., 165 Cal. App. 3d 1214 (1985) (plaintiff challenged irregularities in sale notice or procedure after trustee sale was held); Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575 (Cal. Ct. App. 1984) (action by junior lienor to set aside a completed trustee sale); Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101 (1996) (action challenging validity of trustee sale after sale occurred); Karlsen v. Am. Sav. & Loan Assn., 15 Cal. App. 3d 112 (Cal. Ct. App. 1971) (action to cancel a completed trustee sale under a deed of trust). Finally, as this Court explained in length in Tamburri, where a sale is void, rather than simply voidable, tender is not required. Tamburri, 2011 WL 6294472 at *4 (citing Miller & Starr California Real Estate 3d 10:212 (When the sale is totally void, a tender usually is not required.)). A sale that is deemed void means, in its strictest sense [] that [it] has no force and effect, whereas one that is deemed voidable can be avoided or set aside as a matter of equity. Little v. CFS Serv. Corp., 188 Cal. App. 3d 1354, 1358 (1987) (internal quotation marks omitted). In a voidable sale, tender is required based on the theory that one who is relying upon equity in overcoming a voidable sale must show that he is able to perform his obligations under the contract
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California courts have also declined to view the tender rule as a bar to bringing actions seeking to prevent a yet-to-be-completed foreclosure sale. In Mabry v. Superior Court, 185 Cal. App. 4th 208 (2010), the California Court of Appeal found that a pre-foreclosure right under state law requiring borrowers to be contacted to assess and explore alternatives to foreclosure prior to a notice of default could be enforced by a borrower who had not first tendered the full amount of indebtedness owed on his note. Id. at 225 (emphasis in original). The court reasoned that it would defeat the purpose of the statute to require the borrower to tender the full amount of the indebtedness prior to any enforcement of the right to and thats the point the right to be contacted prior to the notice of default. Id. (emphasis in original). The tender rule, the court held, arises out of a paradigm where, by definition, there is no way that a foreclosure sale can be avoided absent payment of all the indebtedness. Id. (emphasis in original). In such a situation, [a]ny irregularities in the sale would necessarily be harmless to the borrower if there was no full tender. Id. That contrasts markedly with a situation like the case at bar, where a borrower challenges the very authority of a party to proceed with nonjudicial foreclosure. It would hardly be harmless to require borrowers to tender the full amount owed in order to challenge what could be a wrongful foreclosure, where they assert not simply a right of redemption but the right to avoid a sale in the first place. Humboldt Sav. Bank v. McCleverty, 161 Cal. 285, 291 (1911).
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so that equity will not have been employed for an idle purpose. Dimock v. Emerald Properties LLC, 81 Cal. App. 4th 868, 878 (2000). That reasoning does not extend to a sale that is void ab initio, since the contract underlying such a transaction is a nullity with no force or effect as opposed to one which may be set aside in reliance on equity. Id. at 876. In Dimock, the California Court of Appeal held that where an incorrect trustee had foreclosed on a property and conveyed it to a third party, and the conveyed deed was not merely voidable but void, tender was not required. Id. at 878 (Because Dimock was not required to rely upon equity in attacking the deed, he was not required to meet any of the burdens imposed when, as a matter of equity, a party wishes to set aside a voidable deed...In particular, contrary to the defendants argument, he was not required to tender any of the amounts due under the note.). For the purposes of the tender rule, the Court finds Dimock to be sufficiently analogous to the present case to counsel against its application here. Moreover, the relevant documentation in this case supports the finding that the sale is void. Where a notice defect provides the basis for challenging a sale under a deed of trust, as is the case here with the Barrionuevos allegation of noncompliance with Cal. Civ. Code 2923.5, California courts examine in detail the deed of trusts language to determine whether it contains conclusive presumption language in the deed regarding notice defects that would render the sale merely voidable as opposed to void. Little, at 1359. As was explained in Tamburri, when a notice defect is at issue, it is not the extent of the defect that is determinative. Rather, what seems to be determinative is whether the deed of trust contains a provision providing for a conclusive presumption of regularity of sale. Little, 188 Cal. App. 3d at 1359, 233 Cal. Rptr. 923. Where there has been a notice defect and no conclusive presumption language in the deed, the sale has been held void. Id. (emphasis in original). In contrast, [w]here there has been a notice defect and conclusive presumption language in a deed, courts have characterized the sales as voidable. Id. (emphasis added). Tamburri, 2011 WL 6294472 at *5. In Little, the court considered a deed provision stating [t]he recitals in such Deed of any matters, proceedings and facts shall be conclusive proof of the truthfulness and regularity thereof to be conclusive presumption language. Little, at 1360. In this case, the Barrionuevos deed of trust provides no such conclusive presumption language. Therefore, the Court cannot conclude, at least at this juncture, that the sale is merely voidable wherein tender
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would be required. Ottolini v. Bank of America, No. C-11-0477 EMC, 2011 WL 3652501, at *4 (N.D.Cal. Aug.19, 2011); see also Tamburri, 2011 WL 6294472 at *5. These exceptions and qualifications to the tender rule raise significant doubts as to whether it should be mechanically applied at the pleading stage under the allegations of the complaint herein. Thus, as in Tamburri, the Court declines to dismiss the complaint on the basis of the Barrionuevos failure to allege tender. C. Wrongful Foreclosure The Barrionuevos cause of action for wrongful foreclosure is based upon their belief that Cal Reconveyance cannot conduct a valid foreclosure sale on behalf of Defendant JP Morgan because it is not the true present beneficiary under Plaintiffs Deed of Trust. Pls. Am. Compl. 18. This belief is based upon the following chain of events: In May of 2006, shortly after Plaintiffs entered into the Deed of Trust, WaMu [Washington Mutual] securitized and sold the beneficial interest in the Deed of Trust to the Series 2006-AR4 Trust. From that point on, the Series 2006-AR4 Trust became the only true beneficiary under Plaintiffs Deed of Trust. Thus, when JP Morgan [Chase] acceded to certain of WaMus assets in 2008, it could not have included the beneficial interest in Plaintiffs Deed of Trust as WaMu had already sold the beneficial interest two years prior, in 2006. Since WaMu no longer owned the beneficial interest in Plaintiffs Deed of Trust, it had nothing to convey to Defendant JP Morgan in 2008 and Defendant JP Morgan is not the true beneficiary. Id. Related to the allegation that Chase did not acquire Plaintiffs DOT from Washington Mutual, the Barrionuevos further base their wrongful foreclosure claim on the grounds that the Defendants have failed to comply with California Civil Code 2932.5, in that they have not recorded a document in the public chain of title reflecting from whom [they] acquired the beneficial interest in Plaintiffs Deed of Trust, as required by the statute. Id. at 21. Section 2932.5 provides as follows: Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is acknowledged and recorded. Cal. Civ. Code 2932.5 (emphasis added).
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Chase and California Reconveyance question Plaintiffs assertion that the DOT for the subject property was securitized into the Series 2006-AR4 Trust. See Defs. Mot. to Dismiss at 5 (A careful analysis of the information provided in the prospectus for which the Property securitization Analysis Reportprovides a website address demonstrates the Loan at issue is not part of the WMALT Series 2006-AR4 Trust.); see also Defs. Reply Br. ISO Mot. to Dismiss (Docket 26) at p. 2 (As shown in the analysis of Defendants motion, there is no connection between the prospectus for the Series 2006-AR4 Trust and the Plaintiffs mortgage loan. There was no securitization.). Neither the Defendants Motion to Dismiss, the Plaintiffs Response Brief, nor the Defendants Reply Brief address the 2932.5 element of the Barrionuevos wrongful foreclosure cause of action. The Court will, therefore, confine its analysis of the wrongful foreclosure claim to the Plaintiffs argument that the Defendants are not the current beneficiaries under the DOT. Plaintiffs properly assert that only the true owner or beneficial holder of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law. Pls. Response Brief at 4. In California, a deed of trust containing a power of sale...conveys nominal title to property to an intermediary, the trustee, who holds that title as security for repayment of [a] loan to [a] lender, or beneficiary. Kachlon v. Markowitz, 168 Cal. App. 4th 316, 334 (2008) (internal citations omitted). The trustee in nonjudicial foreclosure is not a true trustee with fiduciary duties, but rather a common agent for the trustor5 and beneficiary. Id. 335 (internal citations omitted). The trustees duties are twofold: (1) to reconvey the deed of trust to the trustor upon satisfaction of the debt owed to the beneficiary, resulting in a release of the lien created by the deed of trust, or (2) to initiate nonjudicial foreclosure on the property upon the trustors default, resulting in a sale of the property. Id. at 334 (internal citations omitted). The beneficiary, ultimately, is the party that initiates nonjudicial foreclosure, since the trustee who records a Notice of Default pursuant to Cal. Civ. Code 2924 does so as the authorized agent of beneficiary. See Cal. Civ. Code 2924(a)(1); see also Kachlon, 168 Cal. App. 4th at 334 (When the trustor defaults on the debt secured by the deed of
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The trustor in this context is a borrower who executes a trust deed securing a promissory note in favor of a lender.
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trust, the beneficiary may declare a default and make a demand on the trustee to commence foreclosure.) (emphasis added). Several courts have recognized the existence of a valid cause of action for wrongful foreclosure where a party alleged not to be the true beneficiary instructs a trustee to file a Notice of Default and initiate nonjudicial foreclosure. For example, the court in Sacchi v. Mortgage Electronic Registration Systems, Inc., No. CV 11-1658 AHM (CWx), 2011 WL 2533029, at *9-10 (C.D. Cal. June 24, 2011), upheld a plaintiffs wrongful foreclosure claim against an entity alleged to have no beneficial interest in the Deed of Trust when it acted to foreclose on Plaintiffs home. There, the court expressed dismay when confronted with counsels arguments suggesting that someone . . . can seek and obtain foreclosure regardless of whether he has established the authority to do so. Id. at *7. The court asked, if defendants argument that the recording and execution date is inconsequential and in no way connotes that the DOTs beneficial interest was transferred at that precise time was accepted, how is one to determine whether (and when) the purported assignment was consummated? How could one ever confirm whether the entity seeking to throw a homeowner out of his residence had the legal authority to do so? Id. at *6. Similarly, in Javaheri v. JPMorgan Chase Bank, N.A., CV10-08185 ODW FFMX, 2011 WL 2173786, at *5-6 (C.D. Cal. June 2, 2011), the court denied Defendant JPMorgans motion to dismiss a very similar wrongful foreclosure claim to the one at issue here when the plaintiff alleged that Washington Mutual, plaintiffs original lender, had transferred Plaintiffs Note to Washington Mutual Mortgage Securities Corporation prior to its closure by the U.S. Office of Thrift Supervision and JPMorgans subsequent acquisition of its assets. Id. at *5. The court took note of the fact that the plaintiff had produced specific facts regarding the transfer of Plaintiffs Note suggesting that Washington Mutual had indeed alienated its beneficial interest to plaintiffs deed of trust prior to JPMorgans later acquisition of Washington Mutuals assets. Id. Coupled with Plaintiffs allegation that JPMorgan never properly recorded its claim of ownership in the Subject Property, the court ruled that the abovementioned facts regarding the transfer of Plaintiffs Note prior to JPMorgans acquisition of [Washington Mutual]s assets raise Plaintiffs right to relief above a speculative level, and held that plaintiffs allegation that JPMorgan did not own his Note
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and therefore did not have the right to foreclose was sufficient to withstand JPMorgans motion to dismiss. Id. at *5-6. Likewise in Ohlendorf v. Am. Home Mortg. Servicing, 279 F.R.D. 575, 583 (E.D. Cal. 2010), the court recognized that, while proof of possession of the note is not necessary to legally institute non-judicial foreclosure proceedings against plaintiff, the plaintiff still had a viable claim for wrongful foreclosure insofar as he argued that defendants are not the proper parties to foreclose. Id. at 583. Accordingly, the court denied defendants motion to dismiss plaintiffs wrongful foreclosure [claim]...insofar as it is premised on defendants being proper beneficiaries. Id. Finally, in Castillo v. Skoba, No. 10cv1838 BTM, 2010 WL 3986953, at*2 (S.D. Cal. Oct. 8, 2010), the court granted a preliminary injunction in a foreclosure case where it concluded that Plaintiff is likely to succeed on the merits of his claim that neither Aurora nor Cal-Western had authority to initiate the foreclosure sale at the time the Notice of Default was entered. There, the court ruled on the record before it that the applicable [d]ocuments do not support a finding that either Cal-Western was the trustee or Aurora was the beneficiary on May 20, 2010 when the Notice of Default was recorded. Id. See also Robinson v. Countrywide Home Loans, Inc., 199 Cal.App.4th 42, 46 Fn. 5 (2011) (a borrower who believes that the foreclosing entity lacks standing to do so is not without a remedy. The borrower can seek to enjoin the trustees sale or to set the sale aside.); Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149, 1156 (2011) (upholding the dismissal of plaintiffs wrongful foreclosure action, but noting as significant the fact that cases cited by plaintiff permitting wrongful foreclosure action identified a specific factual basis for alleging that the foreclosure was not initiated by the correct party. [plaintiff] has not asserted any factual basis to suspect that [defendant] lacks authority to proceed with the foreclosure.) (emphasis in original). In the present case, the Barrionuevos allege that Chase and California Reconveyance recorded their April 7, 2009, Notice of Default without the legal right to do so, given that the prior alienation of Plaintiffs DOT by Washington Mutual in 2006 precluded these Defendants from obtaining any beneficial interest in the DOT. See Am. Compl. 16-22; Pls. Response Brief at 3. In tandem to their 2935.2 claim, Plaintiffs allege that this prior alienation of the DOT renders
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Defendants Notice of Default and subsequent Notices of Trustees Sales invalid. The allegation challenging the validity of Washington Mutuals assignment of Plaintiffs DOT to Chase suggests that the foreclosing parties did not have authority to issue the Notices. Despite Defendants invitation to the contrary, further examination into the 2006 transaction would require a factual inquiry not suitable in a 12(b)(6) motion. Thus, insofar as Plaintiffs contend that the Notice of Default is invalid due to a lack of authority to foreclose, their wrongful foreclosure claim is similar to those advanced in Sacchi, Javaheri, Ohlendorf, Skoba, and, of course, this Courts ruling in Tamburri. Accordingly, this Court finds that the Plaintiffs have sufficiently stated a claim for wrongful foreclosure. Regardless of whether 2932.5 applies, under California law a party may not foreclose without the legal power to do so. Plaintiff alleges that the wrong parties issued the Notice of Default. At the 12(b)(6) stage, given the factual uncertainties underlying the parties arguments, Plaintiffs claim is sufficient to withstand a motion to dismiss. D. Slander of Title The Barrionuevos next advance a cause of action for slander of title. In their amended complaint, they allege that Chase acted with malice and a reckless disregard for the truth by simply assuming it was the beneficiary under Plaintiffs Deed of Trust when it recorded a Notice of Trustees Sale...that cannot lead to a valid foreclosure. Am. Compl. 24. They further allege that the recordation of the February 2, 2012 Notice of Trustees Sale was therefore false, knowingly wrongful, without justification, in violation of statute, unprivileged, and caused doubt to be placed on Plaintiffs title to the property, and that the recordation of the foregoing documents directly impairs the vendibility of Plaintiffs property on the open market in the amount of a sum to be proved at trial. Id. 25. Neither Plaintiffs nor Defendants address this cause of action in any of the papers accompanying Defendants Motion to Dismiss. The California Court of Appeals for the Fifth District recently outlined the elements required to successfully bring a cause of action for slander of title. In Sumner Hill Homeowners Assn., Inc. v. Rio Mesa Holdings, LLC, the court explained that slander or disparagement of title occurs when a person, without a privilege to do so, publishes a false statement that disparages title to property
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and causes the owner thereof some special pecuniary loss or damage. 205 Cal. App. 4th 999, 1030 (citing Fearon v. Fodera 169 Cal. 370 (1915)). The required elements of this tort are (1) a publication, (2) without privilege or justification, (3) falsity, and (4) direct pecuniary loss. Id. (citing Truck Ins. Exchange v. Bennett, 53 Cal.App.4th 75, 84 (1997); Howard v. Schaniel,113 Cal.App.3d 256, 263-264 (1980)). The Barrionuevos amended complaint is sufficient to to state a claim to relief that is plausible on its facewith regard to this tort. Cousins, 568 F.3d at 1067 (9th Cir. 2009). Plaintiffs allege, and Defendants do not appear to question, that they effected a publication regarding Plaintiffs title to the subject property (i.e. the Notice of Default and the three Notices of Trustees Sales). Whether that publication was done without privilege or justification is somewhat harder to discern. In Gudger v. Manton, the California Supreme Court held that a rival claimant of property is conditionally privileged to disparage or justified in disparaging anothers property in land by an honest and good-faith assertion of an inconsistent legally protected interest in himself. 21 Cal. 2d 537, 545 (1943). The Gudger Court went on to say that an express finding of lack of good faith, or of actual malice...would destroy the privilege or justification here discussed. Id. at 546. Plaintiffs allege quite clearly that Defendants published the February 2, 2012, Notice of Trustees sale with malice and a reckless disregard for the truth. Am. Compl. 24. Broadly construing their amended complaint, it would be fair to conclude that Plaintiffs view the remaining three Notices published by Chase and California Reconveyance in a similar light. Thus, on balance, Plaintiffs have alleged sufficient facts to satisfy this element of the tort at the 12(b)(6) stage. Likewise, Plaintiffs allege with some force the apparent falsity of Defendants four publications. Finally, the Barrionuevos claim that Defendants publications directly impair[ed] the vendibility of Plaintiffs property on the open market, and caused Plaintiffs to incur costs related to bringing this action to cancel the instruments casting doubt on Plaintiffs title, is sufficient to allege the direct pecuniary loss element to a slander of title action. Id. at 25-26. See also Sumner Hill, 205 Cal. App. 4th at 1030 (it is well-established that attorney fees and litigation costs are recoverable as pecuniary damages in slander of title causes of action.).
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Accordingly, to the extent Defendants Motion to Dismiss reaches Plaintiffs action for slander of title, Plaintiffs have met their burden to plead sufficient factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 129 S. Ct. at 1949. E. California Civil Code 2923.5 California Civil Code 2923.5(a)(1) provides that [a] mortgagee, trustee, beneficiary, or authorized agent may not file a notice of default pursuant to Section 2924 until 30 days after initial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements as described in subdivision (g). Cal. Civ. Code 2923.5(a)(1) (emphasis added). Under paragraph (2), [a] mortgagee, beneficiary, or authorized agent shall contact the borrower in person or by telephone in order to assess the borrowers financial situation and explore options for the borrower to avoid foreclosure. Id. 2923.5(a)(2). Under subdivision (g), [a] notice of default may be filed . . . when a mortgagee, beneficiary, or authorized agent has not contacted a borrower as required by paragraph (2) of subdivision (a) provided that the failure to contact borrower occurred despite the due diligence of the mortgagee, beneficiary, or authorized agent. Id. 2923.5(g) (emphasis added). If a mortgagee, beneficiary, or authorized agent fails to comply with 2923.5, then there is no valid notice of default and, without a valid notice of default, a foreclosure sale cannot proceed. Mabry v. Superior Court, 185 Cal. App. 4th 208, 223 (2010). The only remedy for a violation of this section is to postpone the sale until there has been compliance with section 2923.5. Id. (citing Cal. Civ. Code 2924g, subdivision (c)(1)(A)). In the instant case, the Barrionuevos assert that Chase and California Reconveyance violated 2923.5(a)(1) because they failed to contact them prior to filing the notice of default on April 7, 2009. Am. Compl. 28, 32. Despite the fact that the Defendants Notice of Default included a statement that the beneficiary or its designated agent declares that it has contacted the borrower or has tried with due diligence to contact the borrower as required by California Civil Code 2923.5, Plaintiffs assert that they were, in fact, never contacted. Am. Compl., Ex. B - Notice of Default; Am. Compl. 28. Defendants initially argue that the Barrionuevos fail to state a claim under this
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cause of action because they offer no specified factual support for their allegations. Defs. Mot. to Dismiss at 9. However, their Reply Brief offers a very different assessment: Plaintiffs could not be clearer; Plaintiffs allege that the Declaration is false because Plaintiffs were in fact never contacted. (Plaintiffs opposition, p. 6, ln 21-23). Plaintiffs therefore claim that Defendant never called, never left a voice message, and never knocked on their door to discuss their default on the loan before having the NOD [Notice of Default] recorded. Plaintiffs allegation also means that Defendant never offered them a trial loan modification payment plan or even offered to evaluate them for a loan modification before recording the NOD. Defs. Reply Brief at 3 (emphasis in original). Defendants nonetheless contends that [w]hen the foreclosing entity declares that it tried to contact the borrower, the statutory requirements are satisfied. Id.. Defendants are mistaken. A mortgagee, beneficiary, or authorized agent has satisfied the due diligence requirement of 2923.5: if it was not able to contact the borrower after (1) mailing a letter containing certain information; (2) then calling the borrower by telephone at least three times at different hours and on different days; (3) mailing a certified letter, with return receipt requested, if the borrower does not call back within two weeks; (4) providing a telephone number to a live representative during business hours; and (5) posting a link on the homepage of its Internet Web site with certain information. Argueta v. J.P. Morgan Chase, 787 F. Supp. 2d 1099, 1107 (E.D. Cal. 2011) (citing Cal. Civ. Code. 2923.5(g)). Defendants have given no indication that they exercised due diligence as defined in the statute in trying to contact the Barrionuevos prior to recording the Notice of Default, other than their declaration in the Notice itself that they complied with the statute. When a plaintiffs allegations dispute the validity of defendants declaration of compliance in a Notice of Default as here, the plaintiff has plead enough facts to state a claim to relief that is plausible on its face. Cousins, 568 F.3d at 1067 (9th Cir. 2009). See Argueta, 787 F. Supp. 2d at 1107; Caravantes v. California Reconveyance Co., 10CV1407, 2010 WL 4055560 (S.D. Cal. Oct. 14, 2010). Accordingly, Plaintiffs allegations of non-compliance are sufficient to defeat a motion to dismiss.
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F.
Unfair Business Practices Act Californias Unfair Business Practices Act, codified as Cal. Bus. Prof. Code 17200,
prohibits unfair competition, which is defined as, inter alia, any unlawful, unfair or fraudulent business act or practice. Cal. Bus. & Prof. Code 17200. Plaintiffs asserts claims under 17200 for Chase and California Reconveyances violation of Cal Civ. Code 2923.5, and openly acknowledge that their 17200 claim is a derivative cause of action. Pls. Response Brief at 7. They also acknowledge that plaintiffs ability to pursue this cause of action depends on the success or failure of their substantive causes of action. Id. Defendants challenge the 17200 claim on the basis that a violation [of Cal Civ. Code 2923.5] does not impact plaintiffs with an actual loss of money or property to give standing under Cal. B&P 17200. Defs. Reply Brief at 3. However, [i]t is undisputed that foreclosure proceedings were initiated which put [the Barrionuevos] interest in the property in jeopardy; this fact is sufficient to establish standing as this Court has previously held. Clemens v. J.P. Morgan Chase Nat. Corporate Services, Inc., No. C-09-3365 EMC, 2009 WL 4507742, at *7 (N.D. Cal. Dec. 1, 2009) (citing Sullivan v. Washington Mut. Bank, FA, No. C-09-2161 EMC, 2009 U.S. Dist. LEXIS 104074, at *13 (N.D. Cal. Oct. 23, 2009). See also Sacchi, 2011 WL 2533029 at *8-9 (refusing to dismiss under FRCP 12(b)(6) plaintiffs section 17200 claim, in part, because plaintiff alleged a violation of Cal Civ. Code 2923.5). Second, Defendants repeat their argument that Plaintiffs have failed to allege facts sufficient to demonstrate that defendants violated Section 2923.5 Defs. Mot. to Dismiss at 9-10. A plaintiff alleging unfair business practices under [17200] must state with reasonable particularity the facts supporting the statutory elements of the violation. Khoury v. Malys of California, Inc., 14 Cal. App. 4th 612, 619 (1993). As a derivative claim based upon defendants alleged failure to comply with Cal Civ. Code 2923.5, the Barrionuevos 17200 claim rises and falls along with that underlying cause of action. Having already determined that Plaintiffs 2923.5 claim was pled with enough specificity and factual support to withstand Defendants motion to dismiss, the Court finds Plaintiffs 17200 claim is likewise sufficiently pled under Rule 12(b)(6).
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1 2 3 4 5 6 7 8 9 10 Dated: August 6, 2012 IT IS SO ORDERED.
IV.
CONCLUSION
For the foregoing reasons, the Court DENIES Defendants motion to dismiss. This Order disposes of Docket No. 23.
_________________________ EDWARD M. CHEN United States District Judge
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1 2 3 4 5 6 7 8 9 Plaintiffs, 10 JOSE BARRIONUEVO and FLOR BARRIONUEVO, No. C-12-0572 EMC ORDER RE MOTION FOR MICHAEL YESK TO WITHDRAW AS COUNSEL FOR PLAINTIFFS UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
v. 11
CHASE BANK, N.A., et. al., 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: July 18, 2012 _________________________ EDWARD M. CHEN United States District Judge Having received the motion of counsel for Plaintiffs to withdraw as counsel, the Court hereby orders that Plaintiffs shall have until July 26, 2012, to oppose or otherwise respond to the motion to withdraw. Plaintiffs shall file the opposition with the Court by July 26, 2012 and shall also serve the opposition on their counsel by that day. Plaintiffs need not serve the opposition on counsel for Defendants. The motion will be heard on July 31, 2012, at 1:30 p.m. in this Court. Plaintiffs shall appear along with counsel. Plaintiffs are forewarned that, should the motion to withdraw be granted, Plaintiffs will need to obtain counsel to represent them or they will have to represent themselves. This order shall be served on all counsel and upon Plaintiffs. IT IS SO ORDERED. Defendants. ___________________________________/
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UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA JOSE BARRIONUEVO et al,
4 Plaintiff, 5 v. 6 CHASE BANK et al, 7 Defendant. 8 9 10 /
Case Number: CV12-00572 EMC CERTIFICATE OF SERVICE
I, the undersigned, hereby certify that I am an employee in the Office of the Clerk, U.S. District Court, Northern District of California. That on July 18, 2012, I SERVED a true and correct copy(ies) of the attached, by placing said copy(ies) in a postage paid envelope addressed to the person(s) hereinafter listed, by depositing said envelope in the U.S. Mail, or by placing said copy(ies) into an inter-office delivery receptacle located in the Clerk's office.
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Jose and Flor Barrionuevo 5931 Annadale Way Dublin, CA 94568 Dated: July 18, 2012 Richard W. Wieking, Clerk By: Betty Lee, Deputy Clerk
1 2 3 4 5 6 7 8 9 10 v. CHASE BANK, N.A., et al., Defendants. ___________________________________/ JOSE BARRIONUEVO, et al., Plaintiffs, ORDER REFERRING CASE TO ADR FOR MEDIATION No. C12-0572 EMC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
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IT IS HEREBY ORDERED that this case is referred to ADR for mediation. Mediation is to be completed within 60 days from the date of this order. Dated: July 5, 2012 _________________________ EDWARD M. CHEN United States District Judge
1 C. Scott Greene, California Bar No. 277445 Sean Muntz, California Bar No. 223549 2 John C. Hedger, California Bar No. 230814 BRYAN CAVE LLP th 3 333 Market Street, 25 Floor San Francisco, CA 94105 (415) 675-3400 4 Telephone: Facsimile: (415) 675-3434 scott.greene@bryancave.com 5 Email: sean.muntz@bryancave.com hedgerj@bryancave.com 6 7 Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of 8 certain assets from WASHINGTON MUTUAL BANK, FA); and CALIFORNIA RECONVEYANCE CO. 9 10
Bryan Cave LLP 333 Market Street, 25th Floor San Francisco, CA 94105
UNITED STATES DISTRICT COURT FOR NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Case No. CV12-0572 EMC REPLY BRIEF OF JP MORGAN CHASE BANK, N.A. IN SUPPORT OF MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Date: Time: Place: June 22, 2012 1:30 p.m. Courtroom 5, 17th Floor
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14 JOSE BARRIONUEVO AND FLOR BARRIONEUVO individuals, 15 Plaintiffs, 16 vs. 17 CHASE BANK, N.A. Successor In Interest to 18 WASHINGTON MUTUAL BANK, FA; and DOES 1 - 100, Inclusive, 19 Defendants 20 21 22 23 24 25 26 27 28
SF01DOCS86666.2
Complaint Filed: 12/06/2011 First Amended Complaint Filed: 4/19/2012 Trial Date: Not Assigned
Case No. CV12-0572 EMC REPLY BRIEF OF JPMORGAN CHASE BANK, N.A. IN SUPPORT OF MOTION TO DISMISS FAC
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I.
PLAINTIFFS EXHIBIT TO THE FIRST AMENDED COMPLAINT MUST BE CONSIDERED AS PART OF THE PLEADINGS AND IS THEREFORE SUBJECT TO CHALLENGE As part of the First Amended Complaint (FAC), Plaintiffs attached an exhibit, which is
titled, Property Securitization Analysis Report. The report purports to demonstrate how the Plaintiffs mortgage was securitized by Washington Mutual in 2006. Based on this report, Plaintiffs allege that JPMorgan Chase Bank , N.A. (Chase), could not have acceded to the beneficial interest when it acquired some of WaMus assets. (FAC, 10 and 16-18). As argued in the motion to dismiss, Defendant Chase contends that the report cited by Plaintiffs fails to evidence that the mortgage loan in question was ever securitized, thereby nullifying Plaintiffs argument that Chase has no beneficial interest in the subject loan. In response, Plaintiffs assert that the factual challenge by Defendant Chase is inappropriate because, Courts must take all of Plaintiffs factual allegations as true. (Plaintiffs Opposition, p. 3, ln. 3-10). However, this assertion is incorrect where, as here, Plaintiffs seek to bolster their claim with an exhibit that actually contradicts the basis of their claim. For a F.R.C.P. 12(b)(6) motion, a court generally cannot consider material outside the complaint. Nonetheless, a court may consider exhibits submitted with the complaint. (In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970,986 (9th Cir. 1999); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001)). In addition, a "court may consider evidence on which the complaint 'necessarily relies' if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion." (Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006)). A court may treat such a document as "part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." (United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003)). Such consideration prevents "plaintiffs from surviving a Rule 12(b)(6) motion by deliberately omitting reference to documents upon which their claims are based." (Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998)). A "court may disregard allegations in the complaint if contradicted by facts established by exhibits attached to the complaint." (Sumner
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1 Case No. CV12-0572 EMC REPLY BRIEF OF JPMORGAN CHASE BANK, N.A. IN SUPPORT OF MOTION TO DISMISS FAC
1 Peck Ranch v. Bureau of Reclamation, 823 F.Supp. 715, 720 (E.D. Cal. 1993) (citing Durning v. 2 First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987))). Moreover, "judicial notice may be 3 taken of a fact to show that a complaint does not state a cause of action." (Sears, Roebuck & Co. 4 v. Metropolitan Engravers, Ltd., 245 F.2d 67, 70 (9th Cir. 1956); see Estate of Blue v. County of 5 Los Angeles, 120 F.3d 982, 984 (9th Cir. 1997)). A court properly may take judicial notice of 6 matters of public record outside the pleadings'" and consider them for purposes of the motion to 7 dismiss. (Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 649 (9th Cir. 1988) (citation omitted)). 8 Unlike the Javaheri case cited in Plaintiffs response, the Plaintiffs in this matter have
9 provided a forensic report that fails to establish securitization of the mortgage loan. 10
Plaintiffs attached an exhibit to their FAC as evidence that their mortgage loan was
11 securitized. Plaintiffs refer to and rely on the exhibit in the complaint as the basis for claiming 12 that their loan was securitized. The report itself relies on documents filed with the SEC and are 13 referenced through direct quotes and hyperlinks. As shown in the analysis of Defendants motion, 14 there is no connection between the prospectus for the Series 2006-AR4 Trust and the Plaintiffs 15 mortgage loan. There was no securitization. Therefore, Plaintiffs claim that the loan was 16 securitized fails and their subsequent argument that Chase could not acquire a beneficial interest 17 through the P&A Agreement fails as well. 18 II. 19 20 PLAINTIFFS BASIS FOR CHALLENGING THE LEGAL POWER OF CHASE TO FORECLOSE IS VOID, THEREFORE THE TENDER RULE APPLIES It is true that there are exceptions to the tender rule when a plaintiff challenges the validity
21 of the foreclosure or the Notice of Default (NOD). However, as reviewed in the moving papers, 22 the Plaintiffs in this case argue that the Defendants cannot proceed with foreclosure based on 23 alleged securitization of the loan and that argument is now shown to be facially deficient. Thus, 24 with the basis of Plaintiffs theory of a defective NOD, or a lack of legal power on the part of 25 Chase to foreclose, debunked, the tender rule should be adhered to. 26 III. 27 In their response brief, Plaintiffs maintain that, the declaration [in the NOD] is false 28
SF01DOCS86666.2 2 Case No. CV12-0572 EMC REPLY BRIEF OF JP MORGAN CHASE BANK , N.A. IN SUPPORT OF DEFENDANTS MOTION TO DISMISS FAC
PLAINTIFFS ALLEGATION OF VIOLATION OF C.C.P. 2923.5 IS VERY NARROW AND IS GROUNDS FOR GIVING CAUTION
1 because [Plaintiffs] were not contacted prior to the recording of the notice of default. (Plaintiffs 2 opposition, p. 6, ln 12-14). Based upon this allegation of false hood, Plaintiffs assert that their 3 claim must be allowed to continue. 4 Defendant maintains that a court will dismiss a claim under 2923.5 when the allegations
5 are conclusory and contradicted by the notice of default. (Maguca v. Aurora Loan Services, No. 6 SACV 09-1086 JVS, 2009 WL 3467750, at *2 (C.D. Cal. Oct. 28, 2009)). 7 Moreover, Plaintiffs could not be clearer; Plaintiffs allege that the Declaration is false
8 because Plaintiffs were in fact never contacted. (Plaintiffs opposition, p. 6, ln 21-23). Plaintiffs 9 therefore claim that Defendant never called, never left a voice message, and never knocked on 10 their door to discuss their default on the loan before having the NOD recorded. Plaintiffs
11 allegation also means that Defendant never offered them a trial loan modification payment plan or 12 even offered to evaluate them for a loan modification before recording the NOD. 13 Plaintiffs own allegations demonstrate compliance with the statue. Subsection (b) of
14 2923.5 requires applicable notices of default to include a declaration that the mortgagee, 15 beneficiary, or authorized agent has contacted the borrower, has tried with due diligence to contact 16 the borrower as required by this section, or that no contact was required pursuant to subdivision 17 (h). Cal. Civ. Code 2923.5(b). When the foreclosing entity declares it tried to contact the 18 borrower, the statutory requirements are satisfied. (Mabry v. Superior Court, 185 Cal. App. 4th 19 208, 235 (2010) ([T]he notice requirement of section 2923.5, subdivision (b), [] require[s] only 20 that the notice track the language of the statute itself.)). Thus, Plaintiffs claim is without merit. 21 IV. 22 23 PLAINTIFFS CANNOT BASE A CALIFORNIA BUSINESS AND PROFESSIONS CODE 17200 CLAIM ONLY UPON AN ALLEGED VIOLATION OF C.C.P. 2923.5 In their response, Plaintiffs do not address the explicit language of the Mabry decision that
24 limits a private right of action under the statute to obtaining a postponement of an impending 25 foreclosure to permit the lender to comply with section 2923.5. (Mabry v. Superior Court, supra, 26 214). Moreover, a 17200 claim cannot be based on any alleged Civil Code 2923.5 violation 27 since, by its very nature, such a violation does not impact plaintiffs with an actual loss of money 28 or property to give standing under Cal. B&P 17200. (Hamilton v. Greenwich Investors XXVI,
1 LLC, 195 Cal.App.4th 1602, 1617 (2011)). 2 V. 3 CONCLUSION For the foregoing reasons, Defendants respectfully request that the FAC be dismissed
4 without leave to amend. 5 Dated: June 5, 2012 6 7 8 9 10

BRYAN CAVE LLP
By:
s/ John C. Hedger John C. Hedger Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from WASHINGTON MUTUAL BANK, FA); and CALIFORNIA RECONVEYANCE CO.
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
1 C. Scott Greene, California Bar No. 277445 Sean Muntz, California Bar No. 223549 2 John C. Hedger, California Bar No. 230814 BRYAN CAVE LLP th 3 333 Market Street, 25 Floor San Francisco, CA 94105 (415) 675-3400 4 Telephone: Facsimile: (415) 675-3434 scott.greene@bryancave.com 5 Email: sean.muntz@bryancave.com hedgerj@bryancave.com 6 7 Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of 8 certain assets from WASHINGTON MUTUAL BANK, FA); and CALIFORNIA RECONVEYANCE CO. 9 10
UNITED STATES DISTRICT COURT FOR NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Case No. CV12-0572 EMC NOTICE OF MOTION AND MOTION OF DEFENDANTS JP MORGAN CHASE BANK, N.A., AND CALIFORNIA RECONVEYANCE CO. TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT Date: Time: Place: June 15, 2012 1:30 p.m. Courtroom 5, 17th Floor
11 12 13
14 JOSE BARRIONUEVO AND FLOR BARRIONEUVO individuals, 15 Plaintiffs, 16 vs. 17 CHASE BANK, N.A. Successor In Interest to 18 WASHINGTON MUTUAL BANK, FA, LASALLE BANK NATIONAL 19 ASSOCIATION as Trustee for WMALT SERIES 2006-AR4 Trust; CALIFORNIA 20 RECONVEYANCE CORPORATION; MORTGAGE ELECTRONIC 21 REGISTRATION SYSTEM, aka MERS and DOES 1 THROUGH 100, INCLUSIVE 22 Defendants 23 24 25 26 27 28
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Case No. CV12-0572 EMC DEFENDANTS NOTICE OF MOTION & MOTION TO DISMISS
1 2
TO PLAINTIFFS AND THE CLERK OF THE ABOVE-ENTITLED COURT: PLEASE TAKE NOTICE that on Friday, June 15, 2012, at 1:30 p.m. or as soon
3 thereafter as the matter may be heard, in Courtroom 5, 17th Floor, in the San Francisco 4 Courthouse 450 Golden Gate Avenue, San Francisco, CA 94102, defendants JP MORGAN 5 CHASE BANK, N.A.; and CALIFORNIA RECONVEYANCE CO. (collectively, Defendants) 6 will, and hereby do, move this Court, the Honorable Edward M. Chen presiding, for an Order 7 dismissing the First Amended Complaint of Plaintiffs Jose and Flor Barrionuevo (Plaintiffs) 8 pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, in its entirety, for failure to state 9 a claim upon which relief can be granted. 10
The Motion is based on this Notice of Motion and Motion, the attached Memorandum of
11 Points and Authorities, Request for Judicial Notice, the files and records herein, and such further 12 evidence as may be received by the Court. 13 14 15 Dated: May 7, 2012 16 17 18 19 20 21 22 23 24 25 26 27 28
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BRYAN CAVE LLP
By:
s/ John C. Hedger John C. Hedger Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from WASHINGTON MUTUAL BANK, FA) and CALIFORNIA RECONVEYANCE CO.
1 2 3 I. 4 II. 5 III. 6 IV. 7 8 1. 9 2. 10

TABLE OF CONTENTS Page INTRODUCTION............................................................................................................... 1 FACTS ................................................................................................................................ 1 STANDARD FOR MOTION TO DISMISS ...................................................................... 3 LEGAL ARGUMENT ........................................................................................................ 4 A. Plaintiffs Causes of Action for Wrongful Foreclosure and Slander of Title Fail to Allege Facts Upon Which Relief May Be Granted. .................................... 5 Plaintiffs Allegations Of Securitization Are False And Fail. .................... 5 Plaintiffs Fail To Allege Tender And Thus Lack Standing To Challenge The Foreclosure Proceedings. .................................................... 7
11 12
B.
Plaintiffs Remaining Claims Based on Violation of California Civil Code Section 2923.5 Also Fail To State A Claim. ........................................................... 8 1. The Third Cause of Action for Violation of California Civil Code Section 2923.5 Fails To State A Claim Upon Which Relief Can Be Granted. ....................................................................................................... 8 The Fourth Cause of Action for Violation of California Business and Professions Code Section 17200 Fails To State A Valid Claim. ......... 9
13 14 2. 15 16 V. 17 18 19 20 21 22 23 24 25 26 27 28
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CONCLUSION ................................................................................................................. 10
1 2
TABLE OF AUTHORITIES Page
3 Cases Abdallah v. United Sav. Bank, 4 43 Cal. App. 4th 1101 (1996) ........................................................................................................ 8 5 Allen v. United Fin. Mortgage Corp., 660 F.Supp.2d 1089 (N.D.Cal. 2009)............................................................................................ 2 6 Arnolds Mgmt. Corp. v. Eischen, 158 Cal. App. 3d 575 (1984) ......................................................................................................... 8 7 Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009).................................................................................................................... 3 8 Bell Atlantic Corp. v. Twombly, 9 550 U.S. 544, 127 S. Ct. 1955 (2007)............................................................................................ 3 10 Branch v. Tunnell, 14 F.3d 449 (9th Cir. 1994) ........................................................................................................... 4 11 Bridge v. Aames Capital Corp., et al., 2010 WL 3834059 (Sept. 29, 2010) .............................................................................................. 7 12 Briosos v. Wells Fargo Bank, 737 F. Supp. 2d 1018 (N.D. Cal. 2010)......................................................................................... 4 13 Casey v. Lifespan Corp., 14 62 F.Supp.2d 471 (D.R.I. 1999) .................................................................................................... 6 15 Debrunner v. Deutsche Bank Nat'l Trust Co., 2012 WL 883128, 2012 Cal. App. LEXIS 318 (Cal. App. 6th Dist. Mar. 16, 2012).................... 7 16 Durning v. First Boston Corp., 815 F.2d 1265 (9th Cir. 1987) ....................................................................................................... 4 17 Edelkind v. Fairmont Funding, Ltd., 539 F.Supp.2d 449 (D. Mass. 2008).............................................................................................. 6 18 Employees and Restaurant Employees Local 2 v. Vista Inn Management Co., et al., 19 393 F. Supp. 2d 972 (N.D. Cal. 2005)........................................................................................... 4 20 Galbraith v. County of Santa Clara, 307 F.3d 1199 (9th Cir. 2002) ....................................................................................................... 4 21 Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (2011) ...................................................................................................... 1 22 Javaheri v. JPMorgan Chase Bank, N.A., 2011 WL 97684 (C.D. Cal. Jan. 11, 2011) .................................................................................... 2 23 Johnson v. Washington Mutual, 24 2010 WL 682456 (E.D. Cal. Feb. 24, 2010).................................................................................. 2 25 Karlsen v. Am. Sav. & Loan Assn, 15 Cal. App. 3d 112 (1971) ........................................................................................................... 8 26 Kelley v. Mortgage Electronic Registration Systems, Inc., 642 F. Supp. 2d 1048 (N.D. Cal. 2010)......................................................................................... 4 27 Mabry v. Superior Court, 185 Cal.App.4th 208 (2010) .......................................................................................................... 9 28
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ii
1 Maguca v. Aurora Loan Services, 2009 WL 3467750 (C.D. Cal. Oct. 28, 2009)................................................................................ 9 2 Navarro v. Block, 250 F.3d 729 (9th Cir. 2001) ......................................................................................................... 3 3 Partington v. Bugliosi, 56 F.3d 1147 (9th Cir. 1995) ......................................................................................................... 4 4 United States Cold Storage of California v. Great W. Savings & Loan Assn, 5 165 Cal. App. 3d 1214 (1985) ....................................................................................................... 8 6 Statutes Cal. Bus. & Prof. Code 17200.................................................................................................... 1, 9 7 Cal. Civ. Code 2923.5 ........................................................................................................... passim 8 Rules 9 Fed. R. Civ. P. 12(b)(6)..................................................................................................................... 3 Fed. R. Evid. 201............................................................................................................................... 2 10
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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iii
1 2 I. 3
MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION This matter arises out of a residential mortgage loan Plaintiffs obtained in February 2006
4 (the Loan). Plaintiffs bring this action to void the Loan and to enjoin the nonjudicial foreclosure 5 proceedings of property located in Dublin, California. 6 Plaintiffs allege four causes of action none of which are viable for: 1) Wrongful
7 Foreclosure; 2) Slander of Title; 3) Violation of California Civil Code Section 2923.5; and 4)
1 8 Violations of California Business and Professions Code Section 17200. Plaintiffs claims are
9 predicated on two main theories: First, that the Loan was securitized. Second, that Defendants 10 failed to comply with California Civil Code Section 2923.5.
11
As is evident on the face of the prospectus to which Plaintiffs First Amended Complaint
12 refers, and as detailed in the arguments presented herein, the subject loan was never securitized 13 into the Series 2006-AR4 Trust. Also, such securitization theories have been consistently 14 rejected by this and other courts throughout California, including the California Court of Appeal in 15 Gomes v. Countrywide Home Loans, Inc., 192 Cal. App. 4th 1149 (2011). With regard to the 16 alleged violation of Cal. Civ. Code Sec. 2923.5, Plaintiffs have not sufficiently pled a violation to 17 overcome the declared effort of Defendants to comply with the statute. 18 None of Plaintiffs theories provide any basis to challenge the nonjudicial foreclosure
19 proceedings, Defendants respectfully request that the Court dismiss Plaintiffs First Amended 20 Complaint for failure to state a claim upon which relief can be granted. 21 II. 22 FACTS In February 2006, Plaintiffs executed a promissory note to borrow $1,720,000 from
23 Washington Mutual Bank, F.A. (Request for Judicial Notice (RJN), Exh. A). The promissory 24 note was secured by a Deed of Trust for the real property commonly known as 5931 Annadele 25 Way in Dublin, California 94568 (the Property). The Deed of Trust identifies Plaintiffs, in their 26 individual capacity and as trustees for the Jose Barrionuevo and Flor Barrionuevo Living Trust 27 28
1
Although the caption of Plaintiffs First Amended Complaint lists a fifth cause of action for Injunctive Relief, Plaintiffs do not separately plead for it as a cause of action and instead only seek injunctive relief as a remedy.
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1 Dated 12/23/2004, as the Borrowers; Washington Mutual as the Lender and Beneficiary; 2 and California Reconveyance Company as the Trustee. (Id.). The Deed of Trust was recorded 3 on March 7, 2006 as Instrument Number 2006084331 in the Official Records of the County of 4 Alameda. (Id.). The Deed of Trust also expressly permits foreclosure in the event of default. (Id. 5 at pp. 2-3 and 14 of 17, 20). 6 On September 25, 2008, the Office of Thrift Supervision closed Washington Mutual and
7 appointed the FDIC as receiver. On the same date, Chase entered into a Purchase and Assumption 8 Agreement (P&A Agreement) with the FDIC acting in its corporate capacity and as receiver for 9 Washington Mutual. The P&A Agreement is a matter of public record, as the FDIC is a
2 10 governmental entity. Under Section 2.5 of the P&A Agreement, Chase did not assume liability Bryan Cave LLP 333 Market Street, 25th Floor San Francisco, CA 94105
11 for borrower claims related to loans or commitments to lend made by Washington Mutual prior to 12 the date of the P&A Agreement: 13 14 15 16 17 18 19 20 21 possession of the loan until it was transferred to Chase pursuant to the P & A Agreement. The 22 Loan was not securitized. Thus, no assignments or substitutions were required before proceeding 23 with the foreclosure process. 24 On April 6, 2009, the Trustee, California Reconveyance Company (CRC), issued a 25 26
The Court may take judicial notice of the P&A Agreement between the FDIC and Chase, which is published on the FDICs official website at http://www.fdic.gov/about/freedom/Washington_Mutual_P_and_A.pdf. Fed. R. Evid. 201; 27 Allen v. United Fin. Mortgage Corp., 660 F.Supp.2d 1089, 1093-94 (N.D.Cal. 2009) (taking judicial notice of the P & 28 A Agreement); Javaheri v. JPMorgan Chase Bank, N.A., 2011 WL 97684 at *2 (C.D. Cal. Jan. 11, 2011) (same); Johnson v. Washington Mutual, 2010 WL 682456 at *4 (E.D. Cal. Feb. 24, 2010) (same). SF01DOCS82367.1
2
2.5 Borrower Claims. Notwithstanding anything to the contrary in this Agreement, any liability associated with borrower claims for payment of or liability to any borrower for monetary relief, or that provide for any other form of relief to any borrower, whether or not such liability is reduced to judgment, liquidated or unliquidated, fixed or contingent, matured or unmatured, disputed or undisputed, legal or equitable, judicial or extra-judicial, secured or unsecured, whether asserted affirmatively or defensively, related in any way to any loan or commitment to lend made by the Failed Bank prior to failure, or to any loan made by a third party in connection with a loan which is or was held by the Failed Bank, or otherwise arising in connection with the Failed Banks lending or loan purchase activities are specifically not assumed by the Assuming Bank. The Loan has always been an asset loan, meaning that Washington Mutual retained
1 Notice of Default indicating that as of that date, Plaintiffs were $46,016.52 in arrears. (RJN, Exh. 2 B). That document was recorded as Instrument Number 2009101035 in the official records of the 3 County of Alameda. The Notice of Default states that Plaintiffs had not made a payment on their 4 mortgage since December 2008. (Id. at 2). The document also asserts that effort was made to 5 comply with Cal. Civ. Code Sec. 2923.5. (Id.). 6 On July 9, 2009, CRC executed a Notice of Trustees Sale, setting the trustees sale for
7 August 5, 2009, and listing the estimated unpaid balance and other charges related to the Loan as 8 $1,925,730.68. (RJN, Exh. C). The Notice of Trustees sale was recorded as instrument number 9 2009223286 with Alameda County on July 14, 2009. (Id.). On October 15, 2010, CRC recorded 10 a new Notice of Trustees Sale, setting the date of sale for November 10, 2010, and listing an
11 estimated unpaid balance of $2,062,850.20 (RJN, Exh. D). A subsequent Notice of Trustees Sale 12 was recorded on February 2, 2012, setting the trustees sale for February 23, 2012, and listing an 13 estimated unpaid balance of $2,243,973.95. (RJN, Exh. E). To date, the property has not been 14 sold. 15 Despite Plaintiffs request for an injunction and rescission, Plaintiffs do not allege that the
16 amounts showing on the Notice of Default and Notice of Trustees sale are in error or that they 17 have tendered or are willing to tender the full amount owing under the promissory note and Deed 18 of Trust they admit signing. 19 III. 20 STANDARD FOR MOTION TO DISMISS Motions to dismiss pursuant to Rule 12(b)(6) test the legal sufficiency of the complaint.
21 See Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). However, mere labels and conclusions 22 and/or formulaic recitation[s] of the elements of a cause of action will not suffice to overcome a 23 motion to dismiss. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1964-65 (2007) 24 (citations omitted). The Supreme Court has summarized the guiding principles in Ashcroft v. 25 Iqbal, 129 S.Ct. 1937, 1949-50 (2009): 26 27 28 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. 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
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1 2 3 4 5 6 7 8 9 10
alleged. . . . Where a complaint pleads facts that are merely consistent with a defendants liability, it stops short of the line between possibility and plausibility of entitlement to relief. [T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged but it has not show[n] that the pleader is entitled to relief. In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. Id. (internal citations omitted). When considering a motion to dismiss, the Court should also disregard allegations that are contradicted by exhibits to the complaint, or by documents referred to in the complaint and considered pursuant to judicial notice. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987). The Court may also take judicial notice of Plaintiffs Loan documents and their contents, because they are referenced, and thus deemed incorporated, in the Complaint. See Branch v. Tunnell, 14 F.3d 449, 453-54 (9th Cir. 1994), overruled on other grounds by Galbraith v. County of Santa Clara, 307 F.3d 1199 (9th Cir. 2002). They are also recorded in the Official Records for Santa Clara County and thus judicially noticeable. See Employees and Restaurant Employees Local 2 v. Vista Inn Management Co., et al., 393 F. Supp. 2d 972, 977-978 (N.D. Cal. 2005); see also Briosos v. Wells Fargo Bank, 737 F. Supp. 2d 1018, 1020 n.1 (N.D. Cal. 2010); Kelley v. Mortgage Electronic Registration Systems, Inc., 642 F. Supp. 2d 1048, 1052-53 (N.D. Cal. 2010). Defendants thus request that the Court take judicial notice of the Loan documents and foreclosure notices in evaluating the sufficiency of Plaintiffs claims. (See RJN.) Leave to amend may be denied where amendment would be futile. See Partington v. Bugliosi, 56 F.3d 1147, 1162 (9th Cir. 1995). IV. LEGAL ARGUMENT Plaintiffs four claims for relief are predicated on various wrongful foreclosure theories, which are not supported by the recorded documents subject to judicial notice or well-established California law. For the reasons set forth below, Plaintiffs Complaint and each of the causes of 4
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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1 action therein should be dismissed. 2 3 4 A. Plaintiffs Causes of Action for Wrongful Foreclosure and Slander of Title Fail to Allege Facts Upon Which Relief May Be Granted. As set forth below, these claims are predicated on faulty assumptions of fact and legal
5 theories that have repeatedly been rejected by the courts. These claims should be dismissed 6 without leave to amend. 7 8 1. Plaintiffs Allegations Of Securitization Are False And Fail.
As an initial matter, Plaintiffs contention that the Loan was securitized is facially
9 deficient. (First Amended Complaint (hereinafter FAC, 10). A careful analysis of the 10 information provided in the prospectus for which the Property securitization Analysis Report
11 provides a website address demonstrates the Loan at issue is not part of the WMALT Series 20063 12 AR4 Trust. The report refers to
13 http://www.sec.gov/Archives/edgar/data/1317069/000095011706002423/a42089.htm (See FAC, 14 p.16 of 32 as denoted by the ECF file-stamp). The linked document is a prospectus supplement to 15 a prospectus dated January 6, 2006. 16 17 18 19 20 21 22 As denoted on page S-38: As of May 1, 2006, some of the mortgage loans had original principal balances in excess of $1,000,000. You should consider the risk that the loss and delinquency experience on the higher balance mortgage loans may have a disproportionate effect on the mortgage loans as a whole. A loss of the entire principal balance of one of these mortgage loans may result in a substantial realized loss, which may be allocated to the offered certificates. See Appendix B to this prospectus supplement for a table showing the original principal balance ranges of the mortgage loans. (emphasis added). This passage is noted for the courts attention because as seen on the Deed of Trust, the
23 original balance of Plaintiffs Loan was $1.7 million. (RJN, Exhibit A). 24 Turning to Appendix B of the prospectus, which starts at S-153, it is quickly apparent that
25 of the five loan groups, the Loan in question could only by part of Group 4 or Group 5 because 26 there are no other loans with an original principal balance greater than $1 million. (See S-154, S27 28
3
Plaintiffs referenced an identically titled security in their original complaint, which also failed to list the Loan in its prospectus.
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1 157, and S-162, which reference the Range of Original Principal Balances ($) for Groups 1, 2 2 and 3, respectively). 3 Both Group 4 and Group 5 list two loans in each group with a original principal balance of
4 Over 1,500,000. (See S-167 and S-172). In order to determine whether the Plaintiffs Loan is 5 part of either Group 4 or Group 5, one can look at the list of Mortgage Interest Rate (%), 6 Interest Rate Floor (%), and Ceiling Rate (%) for a match to the terms of the Deed of Trust. 7 However, there is no match to be found under any category. 8 The terms of the Deed of Trust provide an initial interest rate of 7.389%. (RJN, Exhibit B).
9 The adjustable rider to the Deed of Trust provides for a floor interest rate of 3.638%. (Id.). The 10 rider also provides a ceiling rate of 10.737%. (Id.).
11
In Loan Group 4, there is no loan that matches the terms of the Deed of Trust. The closest
12 is a loan with an interest rate of 7.386%, but the aggregate principal balance is only $445,772.65. 13 (S-166). There is nothing close to a match in the Ceiling Rate category (S-168) or in the Interest 14 Rate Floor category (S-169). 15 In Loan Group 5, there is also no loan that matches the terms of the Deed of Trust. The
16 closest are a group of loans with an interest rate of 7.375%. (S-171). There is nothing close to a 17 match in the Ceiling Rate category (S-173) or in the Interest Rate Floor category (S-174). 18 Moreover, there is nothing in the report attached to the FAC that identifies the Property or
19 the Loan within the cited Prospectus. Therefore, this report is nothing but a red herring. 20 Even if the Loan had actually been securitized, it is irrelevant as to whether Defendants
21 could foreclose. Plaintiffs argue that with the note securitized, violations of a Pooling Services 22 Agreement render the NOD invalid. Plaintiffs do not have standing to dispute the authority of 23 CRC to execute the NOD because Plaintiffs are not parties to any Pooling Services Agreement, 24 they are not intended beneficiaries of that agreement, and they are not damaged by that agreement. 25 Where a plaintiff files an action which asserts the rights established by the contract, the
26 plaintiff has standing to sue only if he or she is a party to the contract or an intended third-party 27 beneficiary of the contract. Edelkind v. Fairmont Funding, Ltd., 539 F.Supp.2d 449, 453 (D. 28 Mass. 2008); Casey v. Lifespan Corp., 62 F.Supp.2d 471, 475-476 (D.R.I. 1999)). Plaintiffs were
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1 not involved with the Pooling Services Agreement they cite, nor is there any evidence on the face 2 of that agreement that Plaintiffs are an intended beneficiary. 3 Furthermore, Plaintiffs cannot demonstrate an injury by any alleged violation of a Pooling
4 Services Agreement when CRC executed the NOD . Plaintiffs were in default, remain in default, 5 and the holder of the mortgage has the right to foreclose. Plaintiffs do not allege otherwise. 6 Regardless of the outcome of litigation, when plaintiffs have defaulted and are subject to 7 foreclosure, they do not suffer any injury from an assignment since there is no likelihood that 8 relief will prevent injury. Bridge v. Aames Capital Corp., et al., 2010 WL 3834059 *5 (Sept. 29, 9 2010). 10
Finally, Plaintiffs assertions that splitting or separation of title nullifies the NOD are
11 incorrect, even if they were true. As recently held in Debrunner v. Deutsche Bank Nat'l Trust Co., 12 2012 WL 883128, 2012 Cal. App. LEXIS 318 (Cal. App. 6th Dist. Mar. 16, 2012) sections 2924 13 through 2924k of the Civil Code, "set forth a comprehensive framework for the regulation of a 14 nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust" and "nothing 15 in the applicable statutes...precludes foreclosure when the foreclosing party does not possess the 16 original promissory note....Notably, section 2924, subdivision (a)(1), permits a notice of default to 17 be filed by the 'trustee, mortgagee, or beneficiary, or any of their authorized agents.' The provision 18 does not mandate physical possession of the underlying promissory note in order for this initiation 19 of foreclosure to be valid." (Id. at *4). 20 Therefore, virtually all of Plaintiffs alleged facts concerning securitization are rendered
21 invalid or irrelevant. Since the alleged facts serve as the basis for half of Plaintiffs causes of 22 action, those causes of action are rendered inert and the Complaint should be dismissed. 23 24 25 2. Plaintiffs Fail To Allege Tender And Thus Lack Standing To Challenge The Foreclosure Proceedings. As a threshold matter, Plaintiffs lack standing to challenge the nonjudicial foreclosure
26 proceedings because they do not allege tender. It is settled that an action to set aside a trustees 27 sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full 28 amount of the debt for which the property was security. Arnolds Mgmt. Corp. v. Eischen, 158
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1 Cal. App. 3d 575, 578 (1984) (emphasis added); United States Cold Storage of California v. Great 2 W. Savings & Loan Assn, 165 Cal. App. 3d 1214, 1222 (1985) ([T]he law is long-established 3 that a trustor or his successor must tender the obligation in full as a prerequisite to challenge of the 4 foreclosure sale.) (emphasis added)). 5 The tender requirement applies to any cause of action for irregularity in the sale
6 procedure. Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101, 1109 (1996) (affirming the 7 sustaining of demurrer without leave to amend for lack of tender of amounts due and owing under 8 the loan)). The requirement also applies to any claim implicitly integrated with the foreclosure 9 sale, as well as where a borrower seeks equitable remedies. Arnolds Mgmt. Corp., supra, at 579 10 (sustaining of demurrer without leave to amend on claims of fraud and negligence relating to
11 nonjudicial foreclosure sale); see also Karlsen v. Am. Sav. & Loan Assn, 15 Cal. App. 3d 112, 12 118, 121 (1971) (holding plaintiffs claims for breach of oral agreement, accounting, and 13 constructive trust fail because plaintiff never made a valid tender and stating that the tender 14 requirement is based on the theory that one who is relying upon equity . . . is able to perform his 15 obligations under the contract so that equity will not have been employed for an idle purpose.). 16 Because the Complaint is devoid of an allegation that Plaintiffs have or are willing to
17 tender the outstanding indebtedness owed under the promissory note and Deed of Trust, this 18 Motion should be granted and Plaintiffs Complaint dismissed, in its entirety. 19 20 21 B. Plaintiffs Remaining Claims Based on Violation of California Civil Code Section 2923.5 Also Fail To State A Claim. In addition to the reasons set forth above that the alleged facts are facially defective,
22 Plaintiffs claims fail for the following independent reasons. 23 24 25 26 1. The Third Cause of Action for Violation of California Civil Code Section 2923.5 Fails To State A Claim Upon Which Relief Can Be Granted. Plaintiffs third cause of action for violation of Cal. Civ. Code Sec. 2923.5 claims that
27 Plaintiffs werenever contacted. (FAC, 28). Based on this alleged, conlusory, violation, 28 Plaintiffs seek declaratory relief that Defendants power of sale is void. It is a general rule that the
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1 court cannot take judicial notice of the content of recorded documents. However, a court will 2 dismiss a claim under 2923.5 when the allegations are conclusory and contradicted by the notice 3 of default. (Maguca v. Aurora Loan Services, No. SACV 09-1086 JVS, 2009 WL 3467750, at *2 4 (C.D. Cal. Oct. 28, 2009)). Here, Plaintiffs allegations are conclusory and not supported by facts. 5 Defendants have also demonstrated that Plaintiffs claim that the Loan was securitized is false. 6 Since Plaintiffs allegations concerning Cal. Civ. Code Sec. 2923.5 have no specified factual 7 support and are contradicted by the Notice of Default, this court may dismiss the claim. 8 9 10
2.
The Fourth Cause of Action for Violation of California Business and Professions Code Section 17200 Fails To State A Valid Claim.
Plaintiffs improperly seek to use an alleged violation of Cal. Civ. Code Sec. 2923.5 as a
11 means to trigger potential recovery of their attorneys fees, costs and expenses through Cal. Bus. 12 & Prof. Code Sec. 17200. Californias Appellate Court made it clear that the only reason Civil 13 Code 2923.5 is not pre-empted by the federal Home Owners Loan Act of 1933 (12 U.S.C. 14 17461 et seq.) is because a cause of action under Civil Code 2923.5 can result only in a limited 15 postponement of the foreclosure sale to allow compliance, and nothing more. (Mabry v. 16 Superior Court, 185 Cal.App.4th 208; 213-219 (2010). The court in Mabry stated: 17 18 19 20 We emphasize that we are able to come to our conclusion that section 2923.5 is not preempted by federal banking regulations because it is, or can be construed to be, very narrow. As mentioned above, there is no right, for example, under the statute, to a loan modification. (Id. at. 218.) Mabry, and the legislative history of Civil Code 2923.5, make clear that the statute was
21 not intended to provide any basis for monetary damages, and would violate federal law if 22 invoked as statutory authority for any relief other than a limited postponement of the foreclosure 23 sale to allow compliance. (Id. at 214). The statute provides a limited postponement and 24 nothing more, otherwise it would be pre-empted by federal law. (Id.). 25 Accordingly, the fourth cause of action should be dismissed without leave to amend
26 because, under Mabry, Plaintiffs cannot invoke an alleged violation of Civil Code 2923.5 to 27 obtain anything more than simple postponement of the foreclosure sale. 28 In any event, Plaintiffs have also failed to allege facts sufficient to demonstrate that
SF01DOCS82367.1
1 Defendants violated Section 2923.5. Plaintiffs also fail to demonstrate that they suffered an injury 2 in fact and have lost money or property from any wrongful conduct. 3 V. 4 CONCLUSION For the foregoing reasons, Defendants respectfully request that the FAC be dismissed
5 without leave to amend. 6 Dated: May 7, 2012 7 8 9 10

BRYAN CAVE LLP
By:
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SF01DOCS82367.1
s/ John C. Hedger John C. Hedger Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from WASHINGTON MUTUAL BANK, FA); and CALIFORNIA RECONVEYANCE CO.
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Case3:12-cv-00572-EMC Document23-1 Filed05/08/12 Page1 of 4
1 C. Scott Greene, California Bar No. 277445 Sean Muntz, California Bar No. 223549 2 John C. Hedger, California Bar No. 230814 BRYAN CAVE LLP th 3 333 Market Street, 25 Floor San Francisco, CA 94105 (415) 675-3400 4 Telephone: Facsimile: (415) 675-3434 scott.greene@bryancave.com 5 Email: sean.muntz@bryancave.com hedgerj@bryancave.com 6 7 Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from 8 WASHINGTON MUTUAL BANK, FA); and CALIFORNIA RECONVEYANCE CO. 9 10
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION Case No.: CV12-0572 EMC REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANTS MOTION TO DISMISS PLAINTIFFS FIRST AMENDED COMPLAINT [Filed concurrently with Notice of Motion and Motion to Dismiss; [Proposed] Order] Date: Time: Place: June 15, 2012 1:30 p.m. Courtroom 5, 17th Floor
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12 JOSE BARRIONUEVO AND FLOR BARRIONEUVO individuals, 13 Plaintiffs, 14 vs. 15 CHASE BANK, N.A. Successor In Interest to 16 WASHINGTON MUTUAL BANK, FA, LASALLE BANK NATIONAL 17 ASSOCIATION as Trustee for WMALT SERIES 2006-AR4 Trust; CALIFORNIA 18 RECONVEYANCE CORPORATION; MORTGAGE ELECTRONIC REGISTRATION 19 SYSTEM, aka MERS and DOES 1 THROUGH 100, INCLUSIVE 20 Defendants 21 22 23 24 25 26 27 28
C076651/0334282/82377.1
REQUEST FOR JUDICIAL NOTICE ISO MOTION TO DISMISS
TO PLAINTIFFS, ALL PARTIES, AND THE CLERK OF THE ABOVE-
2 ENTITLED COURT: 3 PLEASE TAKE NOTICE that on June 15, 2012 at 1:30 p.m. or as soon thereafter as the
th 4 matter may be heard, in Courtroom 5, 17 Floor, of the above-entitled Court, located at 450
5 Golden Gate Avenue, 15th Floor, San Francisco, California, Defendants JP MORGAN CHASE 6 BANK, N.A.; and CALIFORNIA RECONVEYANCE CO. (collectively Defendants) will, and 7 hereby do, request that this Court take judicial notice of the documents attached to this Request for 8 Judicial Notice (RJN) as Exhibits A through E. 9
Exhibit A: Deed of Trust, signed by Plaintiffs and dated February 28, 2006, recorded in
10 the official records of Alameda County on March 7, 2006 as document number 2006084331. 11 Exhibit B: Notice of Default and Election to Sell Under Deed of Trust, recorded in the
12 official records of Alameda County on April 7, 2009 as document number 2009101035. 13 Exhibit C: Notice of Trustees Sale, recorded in the official records of Alameda County on
14 July 14, 2009 as document number 2009223286. 15 Exhibit D: Notice of Trustees Sale, recorded in the official records of Alameda County on
16 October 19, 2010 as document number 2010304598. 17 Exhibit E: Notice of Trustees Sale, recorded in the official records of Alameda County on
18 February 2, 2012 as document number 2012040100. 19 20 21 22 23 24 25 26 27 28

C076651/0334282/82377.1
Dated: May 7, 2012
Respectfully submitted, BRYAN CAVE LLP
By: /s/John C. Hedger John C. Hedger Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from WASHINGTON MUTUAL BANK, FA) and CALIFORNIA RECONVEYANCE CO.
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1 2 3 I.
MEMORANDUM OF POINTS AND AUTHORITIES INTRODUCTION Defendants request that the Court take judicial notice, pursuant to Federal Rule of
4 Evidence 201, of the attached documents (Exhibits). Plaintiffs Jose and Flor Barrionuevo 5 (collectively Plaintiffs) reference these Exhibits throughout their Complaint. 6 In the Complaint, Plaintiffs seek various remedies, including damages, declaratory relief,
7 quiet title, and litigation costs, against Defendants for alleged improprieties in connection with 8 several loan transactions. 9 II. 10
JUDICIAL NOTICE IS PROPER Defendants request that the Court consider the attached Exhibits, because they are
11 referenced in Plaintiffs Complaint. Defendants also request that the Court take judicial notice of 12 the attached Exhibits on the basis that they are central to the resolution of Plaintiffs Complaint, 13 bear Plaintiffs signatures, and were recorded in the Alameda County Official Records. 14 Under Federal Rule of Evidence 201, a fact is judicially noticeable when it is not subject to
15 reasonable dispute and is capable of accurate and ready determination by resort to sources whose 16 accuracy cannot reasonably be questioned. Documents not physically attached to the Complaint 17 may be considered by the Court on a Rule 12(b)(6) Motion if the Complaint refers to the 18 documents, the documents are central to Plaintiffs claims, and there is no question concerning the 19 authenticity of the documents. See Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). The 20 Courts consideration of the attached mortgage and foreclosure-related documents does not 21 convert Defendants Rule 12(b)(6) Motion into a motion for summary judgment. Id.; Schwarzer, 22 Tashima & Wagstaffe, Federal Civil Procedure Before Trial 9:212.1b (2005). 23 The conditions for taking judicial notice of the Exhibits in connection with Defendants
24 Motion to Dismiss are met here: (1) they are referenced throughout the Complaint; (2) they are 25 central to Plaintiffs claims; (3) they are capable of accurate and ready determination by resort to 26 sources whose accuracy cannot reasonably be questioned; and (4) there is no material question 27 concerning their authenticity as to either Plaintiffs signature and their recordation in the Alameda 28 County Official Records.
C076651/0334282/82377.1
1
1 III. 2
CONCLUSION For the foregoing reasons, Defendants respectfully request the Court take judicial notice of
3 the attached Exhibits. 4 5 6 7 8 9 10

Dated: May 7, 2012
Respectfully submitted, BRYAN CAVE LLP
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C076651/0334282/82377.1
By: /s/John C. Hedger John C. Hedger Attorneys for Defendants JPMORGAN CHASE BANK, N.A (as acquirer of certain assets from WASHINGTON MUTUAL BANK, FA) and CALIFORNIA RECONVEYANCE CO.
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Michael Yesk (SB#130056) 4 Fairway Pl. Pleasant Hill, CA 94523 510-909-9700 yesklaw@gmail.com Attorney for Plaintiffs UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA ) ) ) ) Plaintiffs, ) ) vs. CHASE BANK, N.A. Successor In Interest to ) WASHINGTON MUTUAL BANK, FA; and ) ) DOES 1-100 Inclusive, ) ) Defendants ) ) ) ) ) ) ) ) JOSE BARRIONUEVO and FLOR BARRIONUEVO, Case No.: 12-CV-00572-EMC FIRST AMENDED COMPLAINT FOR WRONGFUL FORECLOSURE; SLANDER OF TITLE; VIOLATION OF CALIFORNIA CIVIL CODE SECTION 2923.5; VIOLATIONS OF CALIFORNIA BUSINESS AND PROFESSIONS CODE SECTION 17200; AND INJUNCTIVE RELIEF [28 U.S.C. 1332(a)(1)] JURY TRIAL DEMANDED
I. Introduction 1. This action arises of out the current economic crisis that has hit the nation and
continues to destroy homeowners ability to maintain their properties. The failure and unraveling of the real estate market has caused a rush of foreclosures on properties all over the country by banks and mortgage servicing companies, such as Defendants. As the foreclosure crisis continues, it has become clear that in their efforts to foreclose on as many properties as quickly as possible lenders and servicers have been taking action outside the law. The extent of the crisis and the clear need for action has once more been highlighted by the recent national mortgage settlement.
FIRST AMENDED COMPLAINT 12-CV-00572-EMC - 1
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2.
This case is yet another example of those in the mortgage and foreclosure industry
engaging in wrongful, illegal, and permanently damaging activities against homeowners. II. Parties 3. Plaintiffs Jose Barrionuevo and Flor Barrionuevo (collectively Plaintiffs) are
allegedly the Trustors/Borrowers on that certain Deed of Trust recorded No. 2006084331 in the Official Records of the Recorder of Alameda County California, purportedly putting a lien on the real property located at 59311 Annadale Way, Dublin, California 94568 (the Subject Property). 4. Plaintiffs are informed and believe and on that basis allege that Defendant
JPMorgan Chase Bank, N.A. (JP Morgan), as successor in interest to Washington Mutual Bank, F.A., is a National Banking Association organized under the laws of the United States with its main office in Columbus, Ohio. III. Venue and Jurisdiction 5. Plaintiffs are now, and were at all times mentioned below, domiciled in and a
resident of the State of California. 6. Defendant JP Morgan, as successor in interest to Washington Mutual Bank, F.A.,
is a National Banking Association organized under the laws of the United States with its main office in Columbus, Ohio. 7. This action is of a civil nature involving, exclusive of interest and costs, a sum in
excess of $75,000. Every issue of law and fact in this action is wholly between citizens of different states. Plaintiff is informed and believes that therefore this Court has jurisdiction over this case pursuant to 28 U.S.C. 1332(a)(1). 8. Venue is proper pursuant to 28 U.S.C. 1391(a)(2) because the unlawful conduct is
alleged to have occurred in Alameda County, California and Plaintiffs home which is the subject of this litigation is located in Alameda County, California.
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IV. Facts On March 3, 2006 Plaintiffs recorded a Deed of Trust in the Alameda County
Recorders Office against the Subject Property to secure a Note, in the amount of $1,720,000 in favor of Washington Mutual Bank, FA (WaMu) as original Lender. The Deed of Trust names California Reconveyance Company (Cal Reconveyance) as Trustee. See Recorded Documents Attached. 10. In May 2006, WaMu securitized and sold Plaintiffs Deed of Trust to the
WMALT Series 2006-AR4 TRUST (Series 2006-AR4 Trust), with La Salle Bank as Trustee. See Auditors Report at 3. 11. In 2008, WaMu entered into receivership with the Federal Deposit Insurance
Company and JP Morgan acquired certain assets of WaMus assets. 12. On April 4, 2009, Cal Recoveyance recorded a Notice of Default and Election to
Sell Under Deed of Trust in the Alameda County Recorders Office, thus initiating the foreclosure process of Plaintiffs home 13. On July 14, 2009, Cal Reconveyance recorded a Notice of Trustees Sale in the
Alameda County Recorders Office. Then, on October 19, 2010, Cal Reconveyance recorded a second Notice of Trustees Sale in the Alameda County Recorders Office. 14. Finally, on February 2, 2012, Cal Recoveyance recorded a third Notice of
Trustees Sale in the Alameda County Recorders Office. 15. Plaintiffs filed the instant action and now submit their First Amended Complaint.
A. First Cause of Action for Wrongful Foreclosure by Plaintiffs Against Defendant 16. Plaintiffs re-allege and incorporate by reference all prior paragraphs in this
complaint, as though fully set forth hereafter.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 19. 17.
i.
Defendant JP Morgan is Not the Current Beneficiary Under Plaintiffs Deed of Trust The Notice of Trustees Sale recorded on February 2, 2012 is invalid because a
foreclosure sale of Plaintiffs property on behalf of Defendant JP Morgan or Defendant La Salle Bank would be invalid and wrongful. 18. Cal Reconveyance cannot conduct a valid foreclosure sale on behalf of Defendant
JP Morgan because it is not the true present beneficiary under Plaintiffs Deed of Trust. Although WaMu was the original beneficial interest holder under Plaintiffs Deed of Trust, Defendant JP Morgan could not have acceded to the beneficial interest when it acquired some of WaMus assets. In May of 2006, shortly after Plaintiffs entered into the Deed of Trust, WaMu securitized and sold the beneficial interest in the Deed of Trust to the Series 2006-AR4 Trust. From that point on, the Series 2006-AR4 Trust became the only true beneficiary under Plaintiffs Deed of Trust. Thus, when JP Morgan acceded to certain of WaMus assets in 2008, it could not have included the beneficial interest in Plaintiffs Deed of Trust as WaMu had already sold the beneficial interest two years prior, in 2006. Since WaMu no longer owned the beneficial interest in Plaintiffs Deed of Trust, it had nothing to convey to Defendant JP Morgan in 2008 and Defendant JP Morgan is not the true beneficiary. Any attempted foreclosure sale of Plaintiffs home on behalf of Defendant JP Morgan would therefore be invalid and wrongful. i. Defendant JP Morgan Has Failed to Comply with California Civil Code Section 2932.5 The Notice of Trustees Sale recorded on February 2, 2012 also cannot lead to a
valid foreclosure of Plaintiffs home by Cal Reconveyance on behalf of Defendant JP Morgan because Defendant has failed to comply with California Civil Code Section 2932.5. 20. Section 2932.5 provides that where there is an instrument, such as a deed of trust,
which is intended to secure the payment of money the power of sale is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly
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acknowledged and recorded. Thus, under Section 2932.5, the power of sale can only be exercised by an assignee who has recorded the assignment by which they acceded to the original lenders interest in the property. As the court stated in In Re Salazar, 448 B.R. 814, 819-20 (Bankr. S.D. Cal. 2011): US Bank, as the foreclosing beneficiary and assignee of Accredited's interest in the Loan, had to meet both requirements of Civil Code section 2932.5 for the foreclosure to be valid. Under that statute, first, U.S. Bank had to be entitled to payment of the secured debt. Civ.Code 2932.5; see also Civ.Code 2936 (Deering 2010); Comm.Code 9203(a),(g) (Deering 2011); Carpenter v. Longan, 83 U.S. 271, 274, 16 Wall. 271, 21 L.Ed. 313 (1872) (the assignment of the note carries the mortgage with it); Polhemus v. Trainer, 30 Cal. 686, 688, 1866 WL 831 (1866) (the mortgage always abides with the debt). . . . . Second, Civil Code section 2932.5 also requires that U.S. Bank's status as foreclosing beneficiary appear before the sale in the public record title for the Property. Therefore, in order to comply with Section 2932.5 any entity attempting to foreclose on Plaintiffs property must have been entitled to payment under the Deed of Trust and must have been the recorded beneficiary in the public chain of title prior to the date of the foreclosure sale. In the instant case, however, Defendant JP Morgan has complied with Section 2932.5. 21. Here, as discussed above, Defendant JP Morgan could not have directly acceded
to the beneficial interest in Plaintiffs Deed of Trust because WaMu sold it to the Series 2006AR4 Trust in 2006. Thus, Defendant JP Morgan must comply with Section 2932.5 by recording a document in the public chain of title reflecting from whom it acquired the beneficial interest in Plaintiffs Deed of Trust. Since no document exists in the public chain of title that conveys the beneficial interest in Plaintiffs Deed of Trust to JP Morgan, Defendant JP Morgan has failed to comply with Section 2932.5 and lacks the power of sale. Any foreclosure sale of the Subject Property on its behalf would be in violation of California Civil Code Section 2932.5 and therefore wrongful. 22. For the reasons stated above, there is a likelihood that Plaintiffs will prevail on the
merits of their wrongful foreclosure claim. If Defendants are permitted to rely on the void and wrongful Notice of Trustees Sale to complete this foreclosure process by conducting a Trustees
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sale and issuing a Trustees Deed Upon Sale, Plaintiffs will wrongfully lose their home. Such injury is irreparable and cannot be adequately compensated by financial means. Moreover, real property is considered unique in California, and monetary damages are deemed inadequate to compensate Plaintiffs for the loss thereof. Stockton v. Newman, 148 Cal. App. 2d 558, 564 (1957). B. Second Action for Slander of Title by Plaintiffs Against Defendant 23. Plaintiffs re-allege and incorporate by reference all prior paragraphs in this
complaint, as though fully set forth hereafter. 24. As discussed above, the Notice of Trustees Sale recorded on February 2, 2012,
cannot lead to a valid foreclosure on behalf of Defendant JP Morgan because it neither could have acceded to the beneficial interest in Plaintiffs Deed of Trust from WaMu nor is there any other validly recorded document making it the beneficiary. Thus, the February 2, 2012 Notice of Trustee was invalid and false. Defendant JP Morgan acted with malice and a reckless disregard for the truth by simply assuming it was the beneficiary under Plaintiffs Deed of Trust and causing a false Notice of Trustees Sale to be recorded that cannot lead to a valid foreclosure. 25. Defendants JP Morgan causing the recordation of the February 2, 2012 Notice of
Trustees Sale was therefore false, knowingly wrongful, without justification, in violation of statute, unprivileged, and caused doubt to be placed on Plaintiffs title to the property. The false recordation of the foregoing documents directly impairs the vendibility of Plaintiffs property on the open market in the amount of a sum to be proved at trial. 26. The recording of the foregoing document made it necessary for Plaintiffs to retain
attorneys and to bring this action to cancel the instruments casting doubt on Plaintiffs title. Therefore, Plaintiffs are entitled to recover the attorneys fees and costs incurred in cancelling the instrument. The exact amount of such damages is not known to Plaintiffs at this time, and Plaintiffs will move to amend this complaint to state such amount when the same becomes known, or on proof at the time of trial.
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C. Third Cause of Action for Violation of California Civil Code Section 2923.5 by Plaintiffs Against Defendant 27. Plaintiffs re-allege and reincorporate by reference the allegations in all paragraphs
above as though fully set forth herein. 28. Defendant JP Morgan violated California Civil Code Section 2923.5 by failing to
contact Plaintiffs, in person or by telephone, at least 30 days prior to recording the Notice of Default on November 21, 2011. The statement in the April 7, 2009 Notice of Default, stating that someone tried with due diligence to contact the borrower as required under Section 2923.5 is false because although signed under oath, Defendant failed to exercise due diligence in attempting to contact Plaintiffs as required by Section 2923.5; and in fact Plaintiffs were never contacted. 29. Defendant JP Morgans failure to comply with the Notice and Contact
requirements of Section 2923.5 renders the Notice of Default and all subsequent proceedings based on said Notice, including the Notice of Trustees Sale recorded February 2, 2012, invalid and void. See Mabry v. Superior Court, 185 Cal. App. 4th 208, 236-37 (2010) (Notice of Default which fails to comply with Section 2923.5 is invalid and a non-judicial foreclosure may only proceed if a new, valid Notice of Default is recorded). D. Fourth Cause of Action for Violation of the Unfair Business Practices Act (California Business and Professions Code Section 17200) Against Defendant 30. Plaintiffs re-allege and incorporate by reference all prior paragraphs in this
complaint, as though fully set forth herein. 31. California Business and Professions Code Section 17200 prohibits unlawful,
unfair, or fraudulent business practice. Section 17200 is a derivative cause of action and Plaintiffs ability to pursue this cause of action depends on the success or failure of their substantive causes of action. 32. Defendant JP Morgan engaged in business practices which violate Section 17200
because it: 1) failed to contact the Plaintiffs at least 30 days prior to initiating foreclosure
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proceedings via the Notice of Default in violation of Section 2923.5 and 2) filed a Notice of Default which failed to comply with Section 2923.5. 33. Based on the violations of Civil Code Section 2923.5 Defendant violated Business
and Professions Code Section 17200. These violations caused Plaintiffs to suffer an injury in fact by placing their interest in the Subject Property in jeopardy by instituting foreclosure proceedings, and also by causing monetary damages in an amount to be proved at trial. 34. Pursuant to California Code of Civil Procedure Section 1021.5, Plaintiffs are
entitled to recover their reasonable attorney's fees, costs, and expenses incurred in bringing this action. Prayer for Relief WHEREFORE, Plaintiffs JOSE BARRIONUEVO and FLOR BARRIONUEVO pray for a judgment against the Defendant as follows: 1. For a judgment declaring that the February 2, 2012 Notice of Trustees Sale is false and void and any subsequent proceedings based on these documents would also be invalid; 2. For a temporary restraining order, a preliminary injunction, and a permanent injunction, all enjoining Defendant and its respective agents, servants, and employees, and all persons acting under, in concert with, or for them, from proceeding with a foreclosure sale of Plaintiffs Property or otherwise attempting in any manner to dispossess Plaintiffs from possession of the Subject Property; or taking any action to enforce any other remedy purportedly provided to them by the Deed of Trust; 3. For damages according to proof at trial; 4. For punitive damages according to proof at trial; 5. For costs of suit and attorneys fees herein incurred; and 6. For such other relief as the Court may deem just and proper. Demand for Jury Trial Plaintiffs hereby demand a trial by jury of each and every claim so triable.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 DATED: April 19, 2012 _________________________________________ Michael Yesk Attorney for Plaintiffs 4 Fairway Pl. Pleasant Hill, CA 94523 510-909-9700
Exhibit A
_____________________________________________
CERTIFIED FORENSIC LOAN AUDITORS, LLC

13101 West Washington Blvd., Suite 140, Los Angeles, CA 90066 Phone: 310-432-6304; Sales@CertifiedForensicLoanAuditors.com www.CertifiedForensicLoanAuditors.com
______________________________________________ PROPERTY SECURITIZATION ANALYSIS REPORT

This is a Securitization Analysis Report and not a Forensic Audit Report
Borrower:
JOSE BARRIONUEVO FLOR BARRIONUEVO

Property:
5931 ANNADALE WAY DUBLIN, CA 94568
I.
TRANSACTION DETAILS
BORROWER & CO-BORROWER:

BORROWER
JOSE BARRIONUEVO
CO-BORROWER
FLOR BARRIONUEVO
CURRENT ADDRESS
SUBJECT ADDRESS
TRANSACTION PARTICIPANTS
MORTGAGE BROKER MORTGAGE SERVICER MORTGAGE NOMINEE/BENEFICIARY
N/A
WASHINGTON MUTUAL BANK, FA
ORIGINAL MORTGAGE LENDER
MORTGAGE TRUSTEE
TITLE COMPANY
400 EAST MAIN STREET STOCKTON, CA 95290
CALIFORNIA RECONVEYANCE COMPANY
ALLIANCE TITLE COMPANY
II. SECURITIZATION
SECURITIZATION PARTICIPANTS
ORIGINATOR/ LENDER SPONSOR/SELLER DEPOSITOR
400 EAST MAIN STREET STOCKTON, CA 95290 Loan # 0706938776
WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
WAMU ASSET ACCEPTANCE CORP
ISSUING ENTITY
TRUSTEE
MASTER SERVICER/ SERVICER
WMALT SERIES 2006-AR4 TRUST
LASALLE BANK NATIONAL ASSOCIATION
WASHINGTON MUTUAL BANK
CUSTODIAN
CUT OFF DATE
CLOSING DATE
LASALLE BANK NATIONAL ASSOCIATION
MAY 1, 2006
MAY 30, 2006
Washington Mutual Mortgage Pass-Through Certificates, WMALT Series 2006-AR4 WaMu Asset Acceptance Corp. Depositor Washington Mutual Bank Countrywide Home Loans, Inc. Servicers Washington Mutual Mortgage Securities Corp. Sponsor $959,944,300 (Approximate) SUMMARY INFORMATION The following summary highlights selected information from this prospectus supplement. It does not contain all of the information that you need to consider in making your investment decision. To understand the terms of the offered certificates, read carefully this entire prospectus supplement and the accompanying prospectus. This summary provides an overview of certain calculations, cash flows and other information to aid your understanding. This summary is qualified by the full description of these calculations, cash flows and other information in this prospectus supplement and the accompanying prospectus. TRANSACTION PARTICIPANTS On May 30, 2006, which is the closing date, the mortgage loans that support the certificates will be sold by Washington Mutual Mortgage Securities Corp., the sponsor of the securitization transaction, to WaMu Asset Acceptance Corp., the depositor. On the closing date, the depositor will sell the mortgage loans and related assets to the Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2006-AR4 Trust. In exchange for the mortgage loans and related assets, the Trust will issue the certificates pursuant to the order of the depositor. The sponsor purchased the mortgage loans directly or indirectly from affiliated or unaffiliated third parties who either originated the mortgage loans or purchased the mortgage loans through correspondent or broker lending. Approximately 23.5%, 16.4% and 13.0% of the mortgage loans (by principal balance as of May 1, 2006) were originated by Countrywide Home Loans, Inc. (Countrywide Home Loans), GMAC Mortgage Corporation and First Magnus Financial Corporation, respectively.
Approximately 76.5% of the mortgage loans (by principal balance as of May 1, 2006) will be serviced by Washington Mutual Bank. Approximately 23.5% of the mortgage loans (by principal balance as of May 1, 2006) will be serviced by Countrywide Home Loans or an affiliate thereof. With respect to the mortgage loans serviced by Countrywide Home Loans, Washington Mutual Bank, as servicer, on behalf of the Trust, will take actions required or permitted to be taken by the Trust as assignee of the sponsor's rights under the Countrywide servicing agreement (including making requests or demands or giving consents to Countrywide Home Loans, and receiving notices from Countrywide Home Loans). Some servicing functions will be performed by Washington Mutual Mortgage Securities Corp., as administrative agent of Washington Mutual Bank. Some servicing functions will be outsourced to third party vendors. Some mortgage loans, other than mortgage loans serviced by Countrywide Home Loans, will be serviced by the respective originators of those mortgage loans on an interim basis until the servicing is transferred to Washington Mutual Bank. By July 1, 2006, the servicing of those mortgage loans is expected to have been transferred to Washington Mutual Bank. The trustee of the Trust will be LaSalle Bank National Association, and the Delaware trustee will be Christiana Bank & Trust Company. Assignment of Trust Assets At the time of issuance of any series of securities, the depositor will cause the pool of mortgage assets or Mortgage Securities to be transferred to the related trust, together with all principal and interest received on or with respect to the mortgage assets or Mortgage Securities after the related cut-off date, other than principal and interest due on or before the cut-off date and other than any retained interest. The trustee will, concurrently with the assignment of mortgage assets or Mortgage Securities, deliver the securities to the depositor in exchange for the trust assets. Each mortgage asset will be identified in a schedule appearing as an exhibit to the related agreement. The schedule of mortgage assets will include detailed information as to the mortgage assets held by the trust, including the outstanding principal balance of each mortgage asset after application of payments due on the cut-off date, information regarding the interest rate on the mortgage asset, the interest rate net of the sum of the rates at which the servicing fee and the retained interest, if any, are calculated, the retained interest, if any, the current scheduled monthly payment of principal and interest, the maturity of the mortgage note, the value of the mortgaged property and other information with respect to the mortgage assets. Each Mortgage Security will be identified in the related agreement, which will specify as to each Mortgage Security information regarding the original principal amount and outstanding principal balance of each Mortgage Security as of the cut-off date, as well as the annual pass-through rate or interest rate for each Mortgage Security sold to the trust. If so specified in the related prospectus supplement, and in accordance with the rules of membership of Merscorp, Inc. and/or Mortgage Electronic Registration Systems, Inc., or MERS, assignments of the mortgages for the mortgage loans held by the related trust will be registered
electronically through Mortgage Electronic Registration Systems, Inc., or MERS System. With respect to mortgage loans registered through the MERS System, MERS shall serve as mortgagee of record solely as a nominee in an administrative capacity on behalf of the trust and will not have any interest in any of those mortgage loans. The depositor will, with respect to each mortgage asset, deliver or cause to be delivered to the trustee, or to the custodian, a mortgage note endorsed to the trustee, the trust, or in blank, the original recorded mortgage with evidence of recording or filing indicated on it, and an assignment (except as to any mortgage loan registered on the MERS System) to the trustee, the trust, or in blank of the mortgage in a form for recording or filing as may be appropriate in the state where the mortgaged property is located; or, in the case of each cooperative loan, the related cooperative note endorsed to the trustee, the trust, or in blank, the original security agreement, the proprietary lease or occupancy agreement, the assignment of the proprietary lease to the originator of the cooperative loan, the recognition agreement, the related stock certificate and related blank stock powers, a copy of the original filed financing statement, and an assignment to the trustee or the trust of the security agreement, the assignment of proprietary lease and the financing statement; provided, however, that if so indicated in the applicable prospectus supplement, the depositor will not deliver to the trustee or to the custodian mortgage notes endorsed to the trustee, the trust or in blank, assignments of mortgage to the trustee, the trust, or in blank, or assignments to the trustee or the trust of the other documents relating to cooperative loans described above. With respect to any mortgage loan secured by a mortgaged property located in Puerto Rico, the mortgages with respect to these mortgage loans either (a) secure a specific obligation for the benefit of a specified person or (b) secure an instrument transferable by endorsement. Endorsable Puerto Rico Mortgages do not require an assignment to transfer the related lien. Rather, transfer of endorsable mortgages follows an effective endorsement of the related mortgage note and, therefore, delivery of the assignment referred to in the paragraph above would be inapplicable. Direct Puerto Rico Mortgages that secure a specific obligation for the benefit of a specified person, however, require an assignment to be recorded with respect to any transfer of the related lien and the assignment for that purpose would be delivered to the trustee 424B5: http://www.sec.gov/Archives/edgar/data/1317069/000095011706002423/a42089.htm
WaMu ASSET ACCEPTANCE CORP., as Depositor WASHINGTON MUTUAL BANK, as Servicer LASALLE BANK NATIONAL ASSOCIATION, as Trustee CHRISTIANA BANK & TRUST COMPANY, as Delaware Trustee POOLING AND SERVICING AGREEMENT $983,553,610.00 Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2006-AR4 Trust WaMu Asset Acceptance Corp. Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2006-AR4 Cut-Off Date: May 1, 2006
Section 2.04. Conveyance of Mortgage Pool Assets The Company does hereby irrevocably sell, transfer, assign, set over and otherwise convey to the Trust, without recourse, all the Companys right, title and interest in and to the Mortgage Pool Assets. In addition, the Company does hereby assign to the Trust, without recourse, the Companys rights (as assignee of the rights of Washington Mutual Mortgage Securities Corp.) under the Countrywide Agreement with respect to the servicing of the Countrywide Loans. The Trust, as payment of the purchase price of the Mortgage Pool Assets, shall, on the Closing Date, (i) issue the REMIC I Regular Interests and the Class R-1 Residual Interest to the Company and (ii) issue the Class PPP Certificates to the Company or the Companys designee in Authorized Denominations. The REMIC I Regular Interests, the Class PPP Certificates and the Class R-1 Residual Interest shall together be a separate series of beneficial interests in the assets of the Trust consisting of the Mortgage Pool Assets pursuant to Section 3806(b)(2) of the Statutory Trust Statute. It is the express intent of the parties hereto that the conveyance of the Mortgage Pool Assets to the Trust by the Company as provided in this Section 2.04 be, and be construed as, an absolute sale of the Mortgage Pool Assets. It is, further, not the intention of the parties that such conveyance be deemed the grant of a security interest in the Mortgage Pool Assets by the Company to the Trust to secure a debt or other obligation of the Company. However, in the event that, notwithstanding the intent of the parties, the Mortgage Pool Assets are held to be the property of the Company, or if for
any other reason this Agreement is held or deemed to create a security interest in the Mortgage Pool Assets, then (a) this Agreement shall constitute a security agreement; (b) the conveyance provided for in this Section 2.04 shall be deemed to be a grant by the Company to the Trust of, and the Company hereby grants to the Trust, to secure all of the Companys obligations hereunder, a security interest in all of the Companys right, title, and interest, whether now owned or hereafter acquired, in and to: (I) The Mortgage Pool Assets; (II) All accounts, chattel paper, deposit accounts, documents, general intangibles, goods, instruments, investment property, letter-of-credit rights, letters of credit, money, and oil, gas, and other minerals, consisting of, arising from, or relating to, any of the foregoing; and (III) All proceeds of the foregoing. The Company shall file such financing statements, and the Company, the Servicer and the Trustee acting on behalf of the Trust at the direction of the Company shall, to the extent consistent with this Agreement, take such other actions as may be necessary to ensure that, if this Agreement were found to create a security interest in the Mortgage Pool Assets, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Agreement. In connection herewith, the Trust shall have all of the rights and remedies of a secured party under the Uniform Commercial Code as in force in the relevant jurisdiction PSA:
http://www.sec.gov/Archives/edgar/data/1361533/000127727706000501/exh41to8kpsawmalt2006_ar4a.htm
THE CORRECT PROCESS OF SECURITIZATION

PARTY A ORIGINATOR/LENDER WASHINGTON MUTUAL BANK 1) 2) 3) 4) 5)
PARTY B SPONSOR/SELLER WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
TRUE SALE LEGAL OPINIONS ASSET PURCHASE / SALE AGREEMENTS DELIVERY & ACCEPTANCE RECEIPTS COMPENSATION / MONEY CAPACITY OF PARTIES TO BUY AND SELL
PARTY C DEPOSITOR PARTY D ISSUING ENTITY WMALT SERIES 2006-AR4 TRUST WAMU ASSET ACCEPTANCE CORP
HOW LENDERS SIDE-STEPPED THE PROCESS
PARTY A LENDER WASHINGTON MUTUAL BANK TRUE SALE 1) 2) 3) 4) 5) PARTY D ISSUING ENTITY WMALT SERIES 2006-AR4 TRUST LEGAL OPINIONS ASSET PURCHASE / SALE AGREEMENTS DELIVERY & ACCEPTANCE RECEIPTS COMPENSATION / MONEY CAPACITY OF PARTIES TO BUY AND SELL
PARTY B SPONSOR/SELLER WASHINGTON MUTUAL MORTGAGE SECURITIES CORP.
PARTY C DEPOSITOR WAMU ASSET ACCEPTANCE CORP
III. FORECLOSURE
Chain of Title and Chain of Note Recorded Events on the Loan Including Foreclosure Issues and Securitization
Recorded Chain of Deed Possession Date
MARCH 7, 2006 Instrument # 2006084331 Official Records, COUNTY OF ALAMEDA CALIFORNIA APRIL 7, 2009 Instrument # 2009101035 Official Records, COUNTY OF ALAMEDA CALIFORNIA OCTOBER 19, 2010 Instrument # 2010304598 Official Records, COUNTY OF ALAMEDA CALIFORNIA
Chain of Note Possession Date Note Holder

WASHINGTON MUTUAL BANK (Lender) Principal Amount: US $1,720,000.00 Loan # 0706938776
Original Deed of Trust

JOSE BARRIONUEVO AND FLOR BARRIONUEVO (Borrower)
FEBRUARY 28, 2006 WASHINGTON MUTUAL BANK (Lender) Loan # 0706938776
NOTICE OF DEFAULT CALIFORNIA RECONVETANCE COMPANY COLLEEN IRBY, ASSISTANT SECRETARY
MAY 1, 2006
WMALT SERIES 2006-AR4 TRUST
NOTICE OF TRUSTEES SALE CALIFORNIA RECONVEYANCE COMPANY DEBORAH BRIGNAC, VICE PRESIDENT
IV. REPORT SUMMARY

Deed of Trust: On FEBRUARY 28, 2006, Debtors JOSE BARRIONUEVO AND FLOR BARRIONUEVO executed a negotiable promissory note and a security interest in the form of a Deed of Trust in the amount of US $1,720,000.00. This document was filed as document number 2006084331 in the Official Records, COUNTY OF ALAMEDA, CALIFORNIA. This document identifies the loan number as 0706938776. The original lender of the promissory note is WASHINGTON MUTUAL BANK. The original trustee under this Deed of Trust is CALIFORNIA RECONVEYANCE COMPANY.
Notice of Default: On APRIL 7, 2009 Document number 2009101035 (Notice of Default and Election to Sell Under Deed of Trust) was filed in the Official Records COUNTY OF ALAMEDA, CALIFORNIA. This Document properly identifies the amount of the mortgage loan that debtors obtained on FEBRUARY 28, 2006, recorded MARCH 7, 2006.
Notice of Trustees Sale: On july 14, 2009 a Notice of Trustees Sale was filed as document number 2009223286 in the Official Records, COUNTY OF ALAMEDA, CALIFORNIA. On OCTOBER 19, 2010, another Notice of Trustees Sale was filed as document number 2010304598 in the Official Records, COUNTY OF ALAMEDA, CALIFORNIA. Securitization: The NOTE was sold, transferred and securitized into WMALT SERIES 2006-AR4 TRUST.
ORIGINAL LENDER WITH SURRENDER STATUS:
V:
CONCLUSION
CHAIN OF TITLE
JOSE BARRIONUEVO AND FLOR BARRIONUEVO BORROWER TRUSTOR MORTGAGOR/MORTGAGER GRANTOR
DEED OF TRUST
ALLIANCE TITLE COMPANY TITLE COMPANY/ ESCROW
COUNTY OF ALAMEDA CALIFORNIA MAINTAINS ASSIGNMENT HISTORY
PROMISSORY NOTE
MONTHLY PAYMENTS NOTE WAS SPLIT FROM THE DEED NOTE WAS SOLD & TRANSFERRED WASHINGTON MUTUAL MORTGAGE SECURITIES CORP. SELLER Purchases loans from originator; forms pool CERTIFICATES WAMU ASSET ACCEPTANCE CORP DEPOSITOR Creates Issuing Entity CERTIFICATES LENDER/ ORIGINATOR WASHINGTON MUTUAL BANK WASHINGTON MUTUAL BANK MASTER SERVICER Services individual loans; Aggregates Collection; Performs Duties Under Trusts Pooling & Servicing Agreement
UNDERWRITERS SELLS CERTIFICATES TO INVESTORS; COLLECTS OFFERING PROCEEDS CERTIFICATES
OFFERING PROCEEDS
WMALT SERIES 2006-AR4 TRUST TRUST FUND ISSUING ENTITY Holds pool of loans; issues certificates
LASALLE BANK NATIONAL ASSOCIATION TRUSTEE FOR THE TRUST& UNDERLYING CUSTODIAN Represents Investors Interests; Calculates Cash Flows; Remits Net Revenues RETURN ON INVESTMENTS
INVESTORS Purchase Mortgage Backed Securities as defined in Certificates
ARROW LEGEND PURPLE MORTGAGE DOCUMENTS BLUE SECURITIES CERTIFICATES RED INVESTOR FUNDS GREEN BORROWER FUNDS
For traditional lending prior to Securitization, the original Deed recording was usually the only recorded document in the Chain of Title. That is because banks kept the loans, and did not sell the loan, hence, only the original recording being present in the banks name. The advent of Securitization, especially through Private Investors and not Fannie Mae or Freddie Mac, involved an entirely new process in mortgage lending. With Securitization, the Notes and Deeds were sold once, twice, three times or more. Using the traditional model would involve recording new Assignments of the Deed and Note as each transfer of the Note or Deed of Trust occurred. Obviously, this required time and money for each recording. (The selling or transferring of the Note is not to be confused with the selling of Servicing Rights, which is simply the right to collect payment on the Note, and keep a small portion of the payment for Servicing Fees. Usually, when a homeowner states that their loan was sold, they are referring to Servicing Rights) Securitizing a Loan Securitizing a loan is the process of selling a loan to Wall Street and private investors. it is a method with many issues to be considered. The methodology of securitizing a loan generally followed these steps: A Wall Street firm would approach other entities about issuing a Series of Bonds for sale to investors and would come to an agreement. In other words, the Wall Street firm pre-sold the bonds. The Wall Street firm would approach a lender and usually offer them a Warehouse Line of Credit. The Warehouse Credit Line would be used to fund the loan. The Warehouse Line would be covered by restrictions resulting from the initial Pooling & Servicing Agreement Guidelines and the Mortgage Loan Purchase Agreement. These documents outlined the procedures for the creation of the loans and the administering of the loans prior to, and after, the sale of the loans to Wall Street. The Lender, with the guidelines, essentially went out and found buyers for the loans, people who fit the general characteristics of the Purchase Agreement. (Guidelines were very general and most people could qualify. The Lender would execute the loan and fund it, collecting payments until there were enough loans funded to sell to the Wall Street firm who could then issue the bonds. Once the necessary loans were funded, the lender would then sell the loans to the Sponsor, usually either a subsidiary of the Wall Street firm, of a specially created Corporation of the lender. At this point, the loans are separated into tranches of loans, where they will be eventually turned into bonds.
Next, the loans were sold to the Depositor. This was a Special Purpose Vehicle designed with one purpose in mind. That was to create a bankruptcy remote vehicle where the lender or other entities are protected from what might happen to the loans, and/or the loans are protected from the lender. The Depositor would have once again created by the Wall Street firm or the Lender. Then, the Depositor places the loans into the Issuing Entity, which is another created entity solely used for the purpose of selling the bonds. Finally, the bonds would be sold, with a Trustee appointed to ensure that the bondholders received their monthly payments.
WASHINGTON MUTUAL BANK was a correspondent lender that originated mortgage loans which in turn, was sold and transferred into a federally-approved securitization trust named WMALT SERIES 2006-AR4 TRUST. The Note and Deed have taken two distinctly different paths. WMALT SERIES 2006-AR4 TRUST. The Note was securitized into
The written agreement that created the WMALT SERIES 2006-AR4 TRUST is a Pooling and Servicing Agreement (PSA), and is a matter of public record, available on the website of the Securities Exchange Commission. The Trust is also described in a Prospectus Supplement, also available on the SEC website. The Trust by its terms set a CLOSING DATE of MAY 30, 2006. The promissory note in this case became trust property in compliance with the requirement set forth in the PSA. The Trust agreement is filed under oath with the Securities and Exchange Commission. The acquisition of the assets of the subject Trust and the PSA are governed under the law. In view of the foregoing, all Assignment of Deed of Trust executed after the Trusts Closing Date would be a void act for the reason that it violated the express terms of the Trust instrument.
The loan was originally made to WASHINGTON MUTUAL BANK and was sold and transferred to WMALT SERIES 2006-AR4 TRUST. There is no record of Assignments to either the Sponsor or Depositor as required by the Pooling and Servicing Agreement. In Carpenter v. Longan 16 Wall. 271,83 U.S. 271, 274, 21 L.Ed. 313 (1872), the U.S. Supreme Court stated The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while assignment of the latter alone is a nullity. An obligation can exist with or without security. With no security, the obligation is unsecured but still valid. A security interest, however, cannot exist without an underlying existing obligation. It is impossible to define security apart from its relationship to the promise or obligation it secures. (Civil Code 2872, 2909, 2920; California Mortgages and Deeds of Trust, and Foreclosure Litigation, by Roger Bernhardt, Fourth Edition, 1.11)
The obligation and the security are commonly drafted as separate documents typically a promissory note and a deed of trust. If the creditor transfers the note but not the deed of trust, the transferee receives a secured note; the security follows the note, legally if not physically. If the transferee is given the deed of trust without the note accompanying it, the transferee has no meaningful rights except the possibility of legal action to compel the transferor to transfer the note as well, if such was the agreement. (Kelley v. Upshaw 91952) 39 C.2d 179, 246 P.2d 23; Polhemus v. Trainer (1866) 30C 685) Where the mortgagee has transferred only the mortgage, the transaction is a nullity and his assignee having received no interest in the underlying debt or obligation, has a worthless piece of paper (4 Richard R. Powell), Powell on Real Property, 37.27 [2] (2000) By statute, assignment of the mortgage carries with it the assignment of the debt. . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust. ANY ATTEMPT TO TRANSFER THE BENEFICIAL INTEREST OF A TRUST DEED WITHOUT OWNERSHIP OF THE UNDERLYING NOTE IS VOID UNDER CALIFORNIA LAW
This report was based exclusively on the documentation provided. It also required that we make reasonable assumptions respecting disclosures and certain loan terms that, if erroneous, may result in material differences between our findings and the loans actual compliance with applicable regulatory requirements. While we believe that our assumptions provide a reasonable basis for the review results, we make no representations or warranties respecting the appropriateness of our assumptions, the completeness of the information considered, or the accuracy of the findings. The contents of this report are being provided with the understanding that we are not providing legal advice, nor do we have any relationship, contractual or otherwise, with anyone other than the recipient. We do not, in providing this report, accept or assume responsibility for any other purpose. Sincerely,
Certified Mortgage Securitization Auditor CERTIFIED FORENSIC LOAN AUDITORS 13101 West Washington Blvd., Suite 140 Los Angeles CA 90066 310-432-6304
Exhibit B
Exhibit C
Case3:12-cv-00572-EMC Document13 Filed02/29/12 Page1 of 1 In the United States District Court for the Northern District of California District Judge Edward M. Chen CIVIL MINUTES
Date:
February 29, 2012
Time: 9:05-9:36 Court Reporter: Kelly Shainline 510-828-9404
Case No. and Name: Attorneys:
C12-0572 EMC Barrionuevo et al. v. Chase Bank, et al. Michael Yesk for Plaintiffs Defendants did not appear Betty Lee
Deputy Clerk:
PROCEEDINGS: - TRO #5
SUMMARY: - Court denied Plaintiffs TRO for the reasons stated on the record. Plaintiffs intend to file a motion for preliminary injunction. CMC has already been set for 5/18/12 at 9:00 a.m.
CIVIL STANDING ORDER GENERAL U.S. DISTRICT JUDGE EDWARD M. CHEN 1. Conformity to Rules. Parties shall follow the Federal Rules of Civil Procedure, the Civil Local Rules, and the General Orders of the Northern District of California, except as superseded by these Standing Orders. Any failure to comply with any of the rules and orders may be deemed sufficient grounds for monetary sanctions, dismissal, entry of default judgment, or other appropriate sanctions. 2. Communication with the Court. Parties shall not attempt to make ex parte contact with the Judge or his chambers staff by telephone, facsimile, or any other means but may contact the Courtroom Deputy Clerk, Betty Lee, at (415) 522-2034 with appropriate inquiries (e.g., scheduling inquiries). All counsel listed on the parties briefing must be fully apprised of the status of the pending matter and must be authorized to respond to calendar settings by the Court. With the exception of discovery disputes (see the Civil Standing Orders on Discovery), or unless expressly permitted by the Court, parties shall not submit letters to the Court, and any communication with the Court must be in pleading form, including but not limited to status reports, requests for continuances, and requests for telephonic appearances. 3. a. Scheduling Days. Civil law-and-motion calendar is conducted on Fridays at 1:30 p.m. Order of call is to be determined by the Court. Parties may jointly ask for a motion to be considered on the papers, but such requests are not automatically granted. The Court may, in its discretion, vacate a hearing on a motion and rule on the papers. Initial case management conferences are conducted on Fridays at 9:00 a.m. Further status conferences are conducted on Fridays at 10:30 a.m. Pretrial conferences are conducted on Tuesdays at 2:30 p.m.
b. c. d.
4. Changes to the Court Calendar. No changes to the Courts schedule shall be made except by order of the Court. Parties seeking to continue hearings, request special status conferences, modify briefing schedules, or make any other procedural changes shall submit a signed stipulation and proposed order or, if stipulation is not possible, a motion for administrative relief. See Civ. L.R. 7-11. Parties seeking to enlarge a filing deadline by way of a motion for administrative relief are admonished to file such a motion in advance of the filing deadline rather than on the day a brief or other matter is due. Continuances will be granted only upon a showing of good cause, with a particular focus on diligence by the party seeking the continuance and prejudice that may result if the continuance is denied.
5. Chambers Copy. A copy of all documents filed, whether electronically or manually, shall be submitted to the Clerks Office in an envelope clearly marked with the case number and EMC Chambers Copy no later than noon on the next business day after the document is filed. The chambers copy must be three-hole punched on the left-hand side. Exhibits to declarations must be tabbed. 6. Case Management Conference Statement. The joint case management statement must be filed one week in advance of the case management conference date. The statement must include all elements requested in the Standing Order for All Judges of the Northern District of California Contents of Joint Case Management Statement. See Civ. L.R. 16-9. In cases involving pro se litigants, parties shall attempt to file a joint statement; if after due diligence, an agreement cannot be reached, the parties may file separate case management statements, with each statement not to exceed seven (7) pages. Unless proceeding pro se, each party shall be represented at the case management conference by counsel with full and complete authority to address all of the matters referred to in (a) Federal Rules of Civil Procedure 16(c) and 26(f) and (b) the Standing Order for All Judges of the Northern District of California Contents of Joint Case Management Statement. Counsel must also have full and complete authority to enter stipulations and made admissions. 7. Motions. All declarations shall be filed as separate documents. Tabs must be used for exhibits attached to declarations, including chambers copies. 8. Discovery. Discovery and Discovery Motions. See the Civil Standing Orders on
9. Motions for Summary Judgment. Each party or side is limited to filing one summary judgment motion. Any party wishing to exceed this limit must request leave of the Court. Briefing shall comply with Civil Local Rules 7-2 through 7-5. Separate statements of undisputed facts will not be considered by the Court. Joint statements of undisputed facts are not required, but are helpful if agreed upon. 10. Proposed Orders Required. Each party filing or opposing a motion shall also serve a proposed order that sets forth the relief or action sought and a short statement of the rationale of decision. The proposed order should be filed at the same time as the motion or opposition. 11. Grounds for Recusal. Parties are directed to inform the Court of any and all reasonable bases for recusal at the earliest possible date.
12. Service of Standing Orders. Plaintiff (or in the case of removed cases, any removing defendant) is directed to serve copies of: (1) this standing order, (2) this Courts Civil Standing Order on Discovery, and (3) the Standing Order for All Judges of the Northern District of California Contents of Joint Case Management Statement at once upon all parties to the action, and upon those subsequently joined, in accordance with the provisions of Federal Rules of Civil Procedure 4 and 5. The plaintiff (or in the case of removed cases, any removing defendant) shall also file with the Clerk of the Court a certificate reflecting such service, in accordance with Civil Local Rule 5-6(a). IT IS SO ORDERED.
EDWARD M. CHEN United States District Judge
CIVIL STANDING ORDER ON DISCOVERY U.S. DISTRICT JUDGE EDWARD M. CHEN These Standing Orders on Discovery are a supplement to this Courts Civil Standing Orders General. These Standing Orders apply only to cases in which discovery is supervised by this Court rather than the magistrate judge. The Court, at its discretion, may elect to transfer discovery matters to a magistrate judge or a special master. 1. Conformity to Rules. Parties shall follow the Federal Rules of Civil Procedure, the Civil Local Rules, and the General Orders of the Northern District of California, except as superseded by these Standing Orders. Any failure to comply with any of the rules and orders may be deemed sufficient grounds for monetary sanctions, dismissal, entry of default judgment, or other appropriate sanctions. 2. Production of Documents.
a. Responses. In responding to requests for production of documents, see Fed. R. Civ. P. 34, a party shall affirmatively state in a written response the full extent to which the party will produce materials. In addition, the party shall, promptly after the production, confirm in writing that the party has produced all such materials so described that have been located after a diligent search of all locations where such materials might plausibly be found. 3. Depositions.
a. Scheduling. The parties shall comply with Civ. L.R. 30-1. Generally, the party seeking the deposition may notice it at least ten (10) days in advance. b. Documents. Witnesses subpoenaed or requested to produce documents should ordinarily be served at least 30 days before the scheduled deposition unless otherwise stipulated, and arrangements should be made to permit inspection of the documents before the deposition commences. Extra copies of documents used during the deposition should ordinarily be provided to opposing counsel and the deponent. c. Conduct. During the deposition, parties are expected to cooperate with and be courteous to each other and deponents. Each party should designate one attorney to conduct the examination of the deponent. Parties should cooperate in the allocation of time to comply with any time limit set by the Court. d. Marking of Exhibits. Counsel shall comply with Civil Local Rule 30-2.
e. Objections. Parties shall comply with Federal Rule of Civil Procedure 30(c)(2). Deposition objections shall be preserved except as to privilege or as to form. Speaking objections or those calculated to coach the deponent are prohibited. A person may not instruct a deponent not to answer a question except when necessary to preserve a privilege, to enforce a limitation directed by the Court, or to present a motion under Federal Rule of Civil Procedure 30(d)(3). When a privilege is claimed, the witness should nevertheless answer questions relevant to the existence, extent, or waiver of the privilege, such as the date of the communication, who made the statement, to whom and in whose presence the statement was made, other persons to whom the contents of the statement have been disclosed, and the general subject matter of the statement, unless such information itself is privileged. A party may be subject to sanctions if the party consistently impedes, or otherwise unreasonably delays, the fair examination of the deponent. f. Private Consultation. Private conferences between deponents and their attorneys in the course of deposition are improper and prohibited except for the sole purpose of determining whether a privilege should be asserted. g. Requests for Intervention by the Court. If a dispute arises during a deposition and involves a persistent obstruction of the deposition or a refusal to answer a question in violation of this Standing Order, parties may arrange a telephonic conference with the Court through the Courtroom Deputy, Betty Lee, at (415) 522-2034. 4. Discovery Motions.
Except as specifically set forth below, no motions regarding discovery disputes may be filed without prior leave of the Court. If there is an emergency discovery dispute, parties may request a telephonic conference with the Court through the Courtroom Deputy. If possible, the parties shall provide a short (one paragraph) description of the dispute prior to any conference call. An emergency discovery dispute is a discovery dispute that is in need of immediate attention by the Court. This process should not be abused. All other requests for discovery relief (including requests for discovery-related sanctions) must be made by the parties in a joint letter brief no longer than four pages. Discovery letter briefs must be e-filed under the Civil Events category of Motions and Related Filings > Motions General > Discovery Letter Brief. The joint letter brief: a. Must attest that, prior to filing the request for relief, counsel with full and complete authority on discovery matters met and conferred in person. A telephone meet and confer is permitted only where there is good cause (e.g., plaintiffs counsel is located on the West coast while defense counsel is located on the East coast). The letters must certify that lead trial counsel have concluded
b. c. d. e. f.
no agreement can be reached. Must concisely summarize those remaining issues that the parties were unable to resolve and state each partys last offer of compromise. May cite to limited and specific legal authority. May not be accompanied by declarations, unless a party declaration is needed to support a specific claim of undue burden. May include as an attachment the specific excerpt of disputed discovery material. No other attachments are permitted absent authorization by the Court.
The Court will advise the parties if additional briefing or a telephonic conference will be necessary. The Court may order the parties to further meet and confer at the federal courthouse with lead trial counsel in attendance. 5. Service of Standing Orders. Plaintiff (or in the case of removed cases, any removing defendant) is directed (a) to serve copies of this standing order at once upon all parties to the action, and upon those subsequently joined, in accordance with the provisions of Federal Rules of Civil Procedure 4 and 5 and (b) to file with the Clerk of the Court a certificate reflecting such service, in accordance with Civil Local Rule 5-6(a). IT IS SO ORDERED.
EDWARD M. CHEN United States District Judge

CASE FILE California Wrongful Foreclosure, Slander of Title, Viol. 2923.5, and Viol. Cal. Bus. Prof. Code 17200 M-T-D Denied BARRIONUEVO v. CHASE BANK, ND, Calif

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CASE FILE California Wrongful Foreclosure, Slander of Title, Viol. 2923.5, and Viol. Cal. Bus. Prof. Code 17200 M-T-D Denied BARRIONUEVO v. CHASE BANK, ND, Calif

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_______________________________________________________________

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

Defendants motion is DENIED.

Barrionuevo et al v. Chase Bank, N.A. et al

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Plaintiff: Jose Barrionuevo

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Plaintiff Jose Barrionuevo

Plaintiff Flor Barrionuevo

02/27/2012 02/27/2012 02/27/2012

06/22/2012 07/05/2012 07/18/2012

[Opinion Certified For Partial Publication.]

BARRIONUEVO v. CHASE BANK, NA, Dist. Court, ND California 2012

BARRIONUEVO v. CHASE BANK, NA, Dist. Court, ND California 2012

II. FACTUAL & PROCEDURAL BACKGROUND

III. DISCUSSION A. Legal Standard

E. California Civil Code 2923.5

F. Unfair Business Practices Act

Case3:12-cv-00572-EMC Document42 Filed08/07/12 Page1 of 2

1 2 3 4 5 6 7 8 9 10 United States District Court