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1 WRIGHT, FINLAY & ZAK, LLP
Cathy K. Robinson, Esq., SBN 226275
2 Jier Dong, Esq., SBN 349490
3 4665 MacArthur Court, Suite 200
Newport Beach, CA 92660
4 Tel: (949) 477-5050; Fax: (949) 608-9142
crobinson@wrightlegal.net;
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6 Attorneys for Defendants,
SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL ASSOCIATION AS
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TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT SERIES
8 2007-OA3
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SUPERIOR COURT OF CALIFORNIA
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COUNTY OF SAN MATEO
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12 CEFERINO CAGANG; ERLINDA CAGANG Case No.: 23CIV00801
Assigned to Hon. Susan L. Greenberg; Dept. 3
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14 DEFENDANTS’ NOTICE OF DEMURRER
Plaintiffs, AND DEMURRER TO FIRST AMENDED
15 COMPLAINT; MEMORANDUM OF POINTS
16 vs. AND AUTHORITIES IN SUPPORT THEREOF
17 SHARON DIZON; SELECT PORTFOLIO
SERVICING INC.; U.S. BANK NA, AS [Request for Judicial Notice and Meet and Confer
18 TRUSTEE FOR WAMU PASS THROUGH Declaration filed concurrently herewith]
19 CERT.SERIES 2007-OA3; CLEAR
RECONVEYANCE CORPORATON; DOES 1- Hearing
20 10, inclusive, Date: December 28, 2023
Time: 2:00 p.m.
21 Dept.: 3
Defendants.
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Complaint filed: February 21, 2023
24 FAC filed: October 3, 2023
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TO THE HONORABLE COURT ALL PARTIES AND THEIR ATTORNEYS OF
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RECORD, IF ANY:
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 PLEASE TAKE NOTICE that on December 28, 2023 at 2:00 p.m. , in Department 3 of the
2 above captioned Court, located at 400 County Center, Redwood City, CA 94063, or as soon thereafter as
3 this matter may be heard, the Demurrer of Defendants SELECT PORTFOLIO SERVICING, INC
4 (“SPS”) and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE
5 PASS THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the “Trust”) (collectively
6 “Defendants”) to the Complaint (“Complaint”) of Plaintiffs CEFERINO CAGANG and ERLINDA
7 CAGANG (“Plaintiffs”) will come on regularly for hearing.
8 This Demurrer is made pursuant to Code of Civil Procedure Sections 430.10(b), (d), (e) and (f),
9 430.30(a) and 430.50(a), on the basis that Plaintiffs’ Complaint fails to state facts sufficient to support the
10 only alleged cause of action against Defendants.
11 This Demurrer is based on this Notice of Demurrer and Demurrer, the supporting Memorandum
12 of Points and Authorities set forth below, the Request for Judicial Notice filed concurrently herewith, all
13 pleadings, records, and files in this action, and upon such further oral and/or documentary evidence as
14 may be presented at the time of hearing on this Demurrer.
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16 Respectfully Submitted,
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WRIGHT, FINLAY & ZAK, LLP
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19 Dated: November 1, 2023 By:
20 Cathy Robinson, Esq.
Attorneys for Defendants,
21 SELECT PORTFOLIO SERVICING, INC; and
U.S. BANK, NATIONAL ASSOCIATION AS
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TRUSTEE FOR WAMU MORTGAGE PASS
23 THROUGH CERTIFICATE FOR WMALT
SERIES 2007-OA3
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 DEMURRER
2 Defendants SELECT PORTFOLIO SERVICING, INC (“SPS”) and U.S. BANK, NATIONAL
3 ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR
4 WMALT SERIES 2007-OA3 (the “Trust”) (collectively “Defendants”) hereby generally and specially
5 demurs to Plaintiffs’ Complaint on the following grounds:
6 DEMURRER TO THE FIRST CAUSE OF ACTION
7 1. Defendants demur generally and specially to Plaintiffs’ first cause of action for reversal of
8 deed of trust and/or assumption of loan on the grounds that it fails to state facts sufficient to constitute a
9 cause of action because the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and
10 430.50(a).
11 DEMURRER TO THE SECOND CAUSE OF ACTION
12 2. Defendants demur generally and specially to Plaintiffs’ second cause of action for
13 cancellation of foreclosure actions on the grounds that it fails to state facts sufficient to constitute a cause
14 of action because the claim is not pled with the required specificity. See, Code Civ. Proc. §§ 430.10(e), (f)
15 and 430.50(a).
16 DEMURRER TO THE THIRD CAUSE OF ACTION
17 3. Defendants demur generally and specially to Plaintiffs’ third cause of action for quiet title
18 on the grounds that it fails to state facts sufficient to constitute a cause of action because the claim is
19 insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a).
20 DEMURRER TO THE FOURTH CAUSE OF ACTION
21 4. Defendants demur generally and specially to Plaintiffs’ fourth cause of action for
22 declaratory relief on the grounds that it fails to state facts sufficient to constitute a cause of action because
23 the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a).
24 DEMURRER TO THE FIFTH CAUSE OF ACTION
25 5. Defendants demur generally and specially to Plaintiffs’ fifth cause of action for accounting
26 on the grounds that it fails to state facts sufficient to constitute a cause of action because the claim is
27 insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a).
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 DEMURRER TO THE SIXTH CAUSE OF ACTION
2 6. Defendants demur generally and specially to Plaintiffs’ sixth cause of action for
3 preliminary and/or permanent injunction on the grounds that it fails to state facts sufficient to constitute a
4 cause of action because the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and
5 430.50(a).
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7 Respectfully Submitted,
8 WRIGHT, FINLAY & ZAK, LLP
9
Dated: November 1, 2023 By:
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Cathy K. Robinson, Esq.
11 Attorneys for Defendant,
SELECT PORTFOLIO SERVICING, INC; and
12 U.S. BANK, NATIONAL ASSOCIATION AS
TRUSTEE FOR WAMU MORTGAGE PASS
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THROUGH CERTIFICATE FOR WMALT
14 SERIES 2007-OA3
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Almost seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject real
4 property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could obtain a loan
5 in the amount of $648,000 secured by a Deed of Trust on the property. Thus, Plaintiffs admit that Dizon
6 was a straw-borrower for the loan. (FAC, 15).
7 Via the initial Complaint filed in this action, Plaintiffs appeared to sue Dizon for quiet title, since
8 Dizon is no longer married to their son. There were no claims in the initial complaint adverse to
9 Defendants, nor challenging the validity of the loan or Deed of Trust. However, Plaintiffs have filed a
10 First Amended Complaint (“FAC”) wherein they allege that Dizon conveyed title back to them, and they
11 are now suing Defendants to assume the loan. However, just because Plaintiffs now hold title to the
12 Property, does not mean that Defendants have to accept Plaintiffs as their borrowers on the mortgage loan.
13 Rather, if Plaintiffs want to become borrowers on a loan secured by the Property, they need to refinance
14 the Property. There is no legal basis requiring Defendants to allow Plaintiffs to step into the shoes of
15 Dizon, the true consumer/borrower on the Loan, just because she is no longer with their son (or otherwise).
16 Since the FAC fails to state any cognizable cause of action against Defendants, Defendants’
17 Demurrer should be sustained without leave to amend.
18 II. STATEMENT OF FACTS
19 In early 2006, Plaintiffs purchased the piece of real property located at 54 Oceanside Drive, Daly
20 City, CA 94015 (the “Property”). (FAC, 1). Plaintiffs contend that Dizon was the wife of their son Joseph
21 Jenner Cagang (“Joseph”). (FAC, 17). Shortly after obtaining title to the Property, Plaintiffs conveyed
22 title to the Property to Dizon, Plaintiffs’ then daughter-in-law, based on a proposal by Plaintiffs’ children
23 that Dizon obtain a loan that would be secured by the Property. (FAC, 15). Based thereon, Dizon applied
24 for and obtained a loan for $648,000 (the “Loan”), which was secured by a Deed of Trust recorded on the
25 Property on November 22, 2006 (the “DOT”). (RJN, 1). As reflected in the DOT, Dizon is the only
26 borrower on the Loan, which she obtained over sixteen years ago. (Id). After a series of assignments, on
27 March 24, 2012, the Trust became the holder of the Deed of Trust. (RJN, 2-4).
28 Plaintiffs allege that “starting the year beginning of 2019 and thereafter, they [Plaintiffs’ four adult
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 children] will be the ones to continue the mortgage payments,” as Dizon “separated ways” with Joseph.
2 (FAC, 18). On January 18, 2019, a Grant Deed was recorded as Instrument No. 2019-003928 in the
3 Official Records of San Mateo County, conveying the Property’s title from Dizon to Christopher Cagang,
4 Joseph Rennier Cagang, Joseph Jerome Cagang and Herberth Cagang, who are Plaintiffs’ children
5 (collectively referred to herein as “Plaintiffs’ Children”). (FAC, 21; Exh. B).
6 The DOT provides that “[i]f all or any part of the Property or any Interest in the Property is sold
7 or transferred (or if borrower is not a natural person and a beneficial interest in Borrower is sold or
8 transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all
9 sums secured by this Security Instrument.” (RJN, 1). Plaintiffs do not contend that Dizon obtained the
10 lender’s prior written consent, or approval in any form, to convey title to Plaintiffs’ Children. (See, FAC,
11 generally). Accordingly, the conveyance of title from Dizon to Plaintiffs’ Children was an event of default
12 under the DOT. (RJN, 1).
13 On March 2, 2023, Plaintiffs filed this lawsuit against Plaintiffs’ Children and Dizon for their
14 purported interests in title to the Property. (See FAC, 23). In their initial Complaint, Plaintiffs alleged that
15 the Plaintiffs’ Children had listed the property for sale, and it was pending with a listing broker Zen Realty.
16 (Compl, 23).
17 On March 9, 2023, a Grant Deed was recorded as Instrument No. 2023-010559 in the Official
18 Records of San Mateo County, conveying the Property’s title from said Plaintiffs’ Children to Plaintiffs.
19 (FAC, 24; Exh. C). Thus, it appears that Plaintiffs’ Children conveyed title to Plaintiffs after receipt of
20 the lawsuit. (See also, FAC, 24). Similarly, Plaintiffs do not allege that the Lender consented to this
21 conveyance of title to the Property, which is an event of default under the DOT. (RJN, 1).
22 On September 21, 2023, a Notice of Default (the “NOD”) was recorded on the Property as
23 Instrument No. 2023-046119 in the Official Records of San Mateo County. (FAC, 26, Exh. D). As set
24 forth in the NOD, there is $149,764.30 (as of 9/18/23) past due on the Loan. (FAC, Exh D). Thus, nobody
25 has made a mortgage payment in some time, despite admittedly enjoying the benefits of the Property.
26 On October 6, 2023, Plaintiffs filed the First Amended Complaint (“FAC”) against Defendants,
27 seeking to assume the loan and stop foreclosure proceedings.
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 III. ARGUMENT
2 A. The Standards Applied to Ruling on a Demurrer
3 In ruling on a Demurrer, “[m]aterial facts alleged in the complaint are treated as true…[h]owever,
4 contentions, deductions or conclusions of fact or law alleged in the complaint are not considered in judging
5 its sufficiency.” State ex rel. Bowen v. Bank of America Corp. (2005) 126 Cal.App.4th 225, 239-240.
6 “Although [the Court] must accept the truth of [Plaintiff’s] factual allegations when reviewing a demurrer,
7 it is not required to accept the truth of Plaintiff’s legal conclusions. See, Yhudai v. IMPAC Funding Corp.
8 (2016) 1 Cal.App.5th 1252, 1257. Furthermore, if the exhibits to a complaint include contradictory facts,
9 the exhibits prevail. Id.
10 A Demurrer may be based upon, and the Complaint’s allegations contradicted by, matters that are
11 judicially noticeable. Code Civ. Proc. § 430.30, subd. (a); Evidence Code § 452. If any element of a cause
12 of action is negated, the Demurrer to that cause of action is properly sustained. Ross v. Creel Printing &
13 Publishing Company, Inc. (2002) 100 Cal.App.4th 736, 748. Once sustained, a plaintiff must show the
14 manner in which he can amend and how the proposed amendment will change the legal effect of the
15 pleading; otherwise, the Demurrer is properly sustained without leave to amend. Blank v. Kirwan (1985)
16 39 Cal.3d 311, 318; Palm Springs Tennis Club v. Rangel (1999) 73 Cal.App.4th 1, 8.
17 Where defects are evident on the face of the complaint, such as where the elements of a cause of
18 action are not properly alleged in the complaint, the cause of action is a proper subject of a demurrer.
19 Cantu v. Resolution Trust Corp., (1992) 4 Cal.App.4th 857. Further, Code of Civ. Proc. §430.30(a) states
20 that a demurrer may be based on matters that are judicially noticeable. Evid. Code §452 provides that a
21 court can take judicial notice of its own records as well as recorded documents. A demurrer may be
22 sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to
23 plead render it probable plaintiff cannot state a cause of action. Krawitz v. Rusch (1989) 209 Cal.App.3d
24 957, 967.
25 B. Plaintiff’s’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan Fails
26 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of Loan,”
27 wherein they allege that they, not Dizon, should be borrower(s) on the Loan. However, there is no such
28 cause of action, and therefore the Demurrer must be sustained without leave to amend.Simply put, there
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 is no enumerated legal theory or law that provides for Plaintiffs’ entitlement to ”reverse the DOT” or
2 assume the Loan. Moreover, Plaintiffs do not challenge the validity of the DOT or Loan, and in fact admit
3 that they knew (over sixteen years ago) that Dizon was obtaining the Loan. (FAC, 17.)
4 To the extent that Plaintiffs intend, by the term “Reverse the DOT,” to cancel the lien on the
5 Property, such a claim fails. California courts have long held that a third party takes title subject to all
6 liens and encumbrances thereon, unless those liens are paid in full. Nguyen v. Calhoun (2003) 105
7 Cal.App.4th 428, 438-439 [A grantee takes title to the property subject to all deeds of trust and other
8 encumbrances]. Plaintiffs do not contend that they have paid the sums owed on the Loan or secured by
9 the DOT in full. (See, FAC, generally). Consequently, the conveyance of title to the Property to Plaintiffs
10 has no effect on the DOT recorded thereon – but for such an act (conveying title without lender’s consent)
11 is an “event of default” as defined by the DOT: “If all or any part of the Property or any Interest in the
12 Property is sold or transferred without Lender's prior written consent, Lender may require immediate
13 payment in full of all sums secured by this Security Instrument." (RJN, 1).
14 To the extent that Plaintiffs seek to assume the Loan, or a “novation,” their claim also fails.
15 Assuming a mortgage creates a new promise which discharges another obligation by novation—a new
16 promise by a third party to pay for the debt of another and rendering the new promisor a debtor. Parrish
17 v. Greco (1953) 118 Cal.App.2d 556, 561; see Civ. Code, § 1530 [“Novation is the substitution of a new
18 obligation for an existing one.”]. “‘Novation is made by contract, and is subject to all the rules
19 concerning contracts in general.’ [Citation] A fundamental rule of contract formation and interpretation is
20 that the terms of a contract are determined by the parties' objective manifestations of consent.” Tufeld
21 Corp. v. Beverly Hills Gateway, L.P. (2022) 86 Cal.App.5th 12, 30; quoting Winograd v. American
22 Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.
23 Here, Plaintiffs recognize the same: “[a] loan assumption is an agreement between a lender,
24 original borrower, and a new narrower [sic] where the new borrower agree to assume responsibility for
25 the debt owed by original borrower.” (FAC, 28). In other words, to effect Plaintiffs’ assumption of the
26 Loan, Defendants as lender, Dizon as original borrower, and Plaintiffs as new borrowers must all consent
27 to it. Here, Plaintiffs allude to Dizon no longer wanting to be the borrower, but they do not allege (because
28 they cannot) that Defendants have ever agreed to allow them to assume the Loan. (See, FAC, 26).
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 Therefore, any claim to assume the Loan fails.
2 Finally, Plaintiffs appear to allege that “extraordinary circumstances” and “undue influence” that
3 were beyond their “control and innocence” exists,” but they do not set forth how that relates to their claims
4 against Defendants. (FAC, 30). Moreover, Plaintiffs admit that they knew that Dizon was obtaining a loan
5 secured by the Property, and that the parties had a common scheme to use Dizon as a straw-borrower,
6 over seventeen years ago. To the extent that Plaintiffs thought they were still co-owners (based on
7 Plaintiffs’ Children’s representations to them), this has nothing to do with Defendants. Nor does it
8 establish a basis for “Reversing the DOT” or “Assuming the Loan” against Defendants. Accordingly,
9 Plaintiffs’ first cause of action is defective and incurable as pled, and cannot survive demurrer.
10 C. Plaintiffs’ Second Claim for Cancellation of Foreclosure Actions Fails
11 Plaintiffs’ second cause of action is for Cancellation of Foreclosure Activities, wherein Plaintiffs
12 allege that (1) they are the borrowers on the Loan, and (2) they are not in default because they contributed
13 to payments toward the Loan. (FAC, 34). Notably, this cause of action contradicts their first claim, wherein
14 they admit that they were not borrowers on the Loan – and that Dizon is the borrower. Regardless, the
15 DOT is clear, Dizon is the only borrower identified therein. (RJN, 1). Thus, Plaintiffs cannot establish
16 that they have any relationship with Defendants, let alone that they are the borrowers on the Loan.
17 As alleged in the FAC, “Plaintiffs seeks cancellation of the foreclosure because of the prevailing
18 circumstances and background whereupon, Plaintiffs, the original borrowers were not actually in default,
19 as they have contributed to mortgage payments that has to be accounted for.” (FAC, 34). However,
20 Plaintiffs were never the original borrowers, as reflected by the DOT. (RJN, 1). Additionally, Plaintiffs
21 do not set forth that they actually made any payments directly to the Defendants, as they previously admit
22 that Dizon handled all communications with the bank, and that the Plaintiffs’ Children purportedly made
23 payments thereon, beginning in 2019. (FAC, 15-18). However, just because Plaintiffs’ Children told
24 them that they were making the payments, beginning in 2019, does not establish that Plaintiffs’ Children
25 actually remitted said payments to the Defendants. And even if Plaintiffs and/or Plaintiffs’ Children made
26 some payments, the DOT states that: “Lender's acceptance of payments from third persons, entities or
27 Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of
28 or preclude the exercise of any right or remedy." (RJN, 1). As reflected in the NOD, the loan is over
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 $149,000 in arrears, which establishes that nobody was actually making payments, or sufficient payments,
2 on the Loan. (FAC, Exh. D). And the NOD is a right and remedy specified in the DOT. (RJN, 1).
3 Plaintiffs were never a party to the DOT or Loan, and their title to the Property is subject to the
4 DOT. To the extent that Plaintiffs seek cancellation of the NOD, they must allege facts affecting the
5 validity and invalidity of the instrument that is attacked. Kroeker v. Hurlbert (1940) 38 Cal.App.2d 261,
6 266; Little v. Smith (1920) 47 Cal.App. 8, 12, 15. A plaintiff must allege all grounds which he claims
7 entitled him to the relief. Little, supra, 47 Cal.App. at 8. Civil Code Section 3412 provides that a written
8 instrument may be ordered to be canceled upon showing that there is reasonable apprehension that if left
9 outstanding it may cause serious injury to a person against whom it is void or voidable. A grantee takes
10 title to the property subject to all deeds of trust and other encumbrances, which means that the property
11 may be sold on foreclosure of that deed of trust if the debt is not paid, even though the property is no
12 longer owned by the original debtor. Nguyen, supra. As admitted by Plaintiffs, there is no dispute that
13 Dizon obtained the Loan which was secured by the DOT, and therefore the DOT is valid. Plaintiffs have
14 not affirmatively alleged that all payments have been made to the Defendants for the Loan, and it does not
15 appear that Plaintiffs have personal knowledge as to whether Dizon has made any such payments.
16 Foreclosure of the Property pursuant to the DOT is proper even when it is Plaintiffs who now hold the
17 Property’s title. Thus, there is no basis to challenge the NOD. Accordingly, Plaintiffs’ claim fails.
18 D. Plaintiffs’ Third Claim for Quiet Title Fails
19 Plaintiffs’ third cause of action is for Quiet Title, wherein they claim quiet title to the property free
20 and clear of any other interests of the Defendants. (See, FAC 37, 40).
21 A complaint to quiet title must be verified and include: (1) a description of the property; (2) the
22 title of the plaintiff and the basis of the title; (3) the adverse claims to the title; (4) the date as of which the
23 determination is sought; and (5) a prayer for the determination of the title of the plaintiff. Code Civ. Proc.,
24 § 761.020. “A quiet title claim is appropriate to establish an interest in real property as against all existing
25 adverse claims or clouds on title.” Paterra v. Hansen (2021) 64 Cal.App.5th 507, 532 [emphasis added].
26 Moreover, plaintiffs seeking to quiet title must allege they paid any debt owed on the property. Aguilar v.
27 Bocci (1974) 39 Cal.App.3d 475, 477-478; Shimpones v. Stickney (1934) 219 Cal. 637, 649 (“It is settled
28 in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 secured.”) “A basic requirement of an action to quiet title is an allegation that plaintiffs ‘are the rightful
2 owners of the property, i.e., that they have satisfied their obligations under the Deed of Trust.’” Santos v.
3 Countrywide Home Loans (E.D. Cal., 2009) 2009 WL 3756337, at *4. The rules of equity do not allow a
4 plaintiff to quiet title in his/her name without repaying the borrowed money used to purchase the property.
5 Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at *12.
6 Here, Plaintiffs admit that title has been conveyed back to them, thus there does not appear to be
7 any dispute as to who owns the Property. (See FAC, 24). Thus, Plaintiffs are the current title owners of
8 the Property per the March 19, 2023 Grant Deed. (FAC, 24, Exh C). However, Plaintiffs have not alleged,
9 because they cannot, that the DOT has been extinguished or paid in full. (See FAC, generally). In fact,
10 Plaintiffs are seeking to “assume the loan”, which is indicative of the fact that the DOT is unpaid, or there
11 would be nothing to assume. There is no basis to quiet title to Plaintiffs free and clear of the DOT, and
12 therefore their claim fails.
13 E. Plaintiffs’ Fourth Claim for Declaratory Relief Fails
14 Plaintiffs’ fourth cause of action is for Declaratory Relief, wherein they allege a controversy
15 regarding the respective rights, duties and obligation between Plaintiffs and Defendants. As an initial
16 matter, a claim for declaratory relief fails because it is not considered to be a viable cause of action in
17 California. Batt v. City and County of San Francisco (2007) 155 Cal.App.4th 65, 82. “Declaratory relief
18 is ultimately a request for relief… in order to weigh it, [the Court] must examine its underlying claims.”
19 Boeing Co. v. Cascade Corp. (9th Cir., 2000) 207 F.3d 1177, 1192. Here, Plaintiffs’ claim is based solely
20 upon the preceding defeated claims. However, a redundant claim for declaratory relief “may be denied
21 ‘where its declaration or determination is not necessary or proper at the time under all the circumstances.’”
22 Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909; citing Code Civ. Proc., § 1061.
23 As discussed, the contract at issue in this case is the DOT, to which Plaintiffs were never a party.
24 Moreover, Plaintiffs have failed to allege that the DOT has been paid in full, and therefore they took title
25 subject to the DOT. Ther is simply no actionable controversy in relation to these claims. Consequently,
26 Plaintiffs’ Declaratory Relief claim cannot survive demurrer.
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 F. Plaintiffs’ Fifth Claim for Accounting Fails
2 Plaintiffs’ fifth cause of action is for Accounting, wherein they allege that if there is a fiduciary
3 relationship between the parties, Defendants must provide them with an accounting. (FAC, 49-50). “A
4 cause of action for accounting requires a showing of a relationship between the plaintiff and the defendant,
5 such a fiduciary relationship, that requires an accounting or a showing that the accounts are so complicated
6 they cannot be determined through an ordinary action at law. Brea v. McGlashan (1934) 3 Cal.App.2d
7 454, 460; 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 819, p. 236.
8 Here, Plaintiffs are not “wronged fiduciaries.” In fact, Plaintiffs cannot allege that SPS or the Trust
9 owed them a duty because, generally, there is no fiduciary duty between a lender/beneficiary/servicer and
10 borrower. See, Sheen v. Wells Fargo, N.A., 2022 WL 664722 (Cal. Supreme Court, March 7, 2022);
11 Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 6 and Nymark v. Heart Fed.
12 Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1093 n.1. Moreover, in this case there is no
13 relationship between Plaintiffs and Defendants, let alone a fiduciary one, as Plaintiffs are not the borrowers
14 on the Loan. Accordingly, Plaintiffs’ Accounting claim fails as a matter of law.
15 Plaintiffs’ claim also fails because they have not alleged any facts showing that a balance is due
16 from SPS or the Trust to Plaintiffs. See, St. James Church of Christ Holiness v. Superior Court (1955)
17 135 Cal.App.2d 352, 359. In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal. 2009) 658 F.Supp.2d
18 1002, 1020, the Court stated:
19 In her counter-complaint, Ms. Hillery asserts a claim for accounting in order to
20 establish what money, if any, she owes to Consumer Solutions. The problem
for Ms. Hillery is that "[a] cause of action for an accounting requires a showing
21 . . . that some balance is due the plaintiff that can only be ascertained by an
accounting." Teselle v. McLoughlin, 173 Cal. App. 4th 156, 178, 92 Cal. Rptr.
22 3d 696 (2009) (emphasis added). Because Ms. Hillery's claim is not asking how
23 much Consumer Solutions owes her, the claim must be dismissed with
prejudice. See Hafiz v. Aurora Loan Services, No. C 09-1963 SI, 2009 U.S.
24 Dist. LEXIS 60003, 2009 WL 2029800, at *2 (N.D. Cal. Jul. 14, 2009)
(dismissing claim for accounting because "[p]laintiff does not cite any authority
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for the proposition that she can maintain a claim for an accounting to determine
26 how much money she owes defendant.")
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First, in this case Plaintiffs are not the borrowers, so clearly they are not owed any funds by Defendants –
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as they have no relationship with SPS or the Trust. Second, to the extent Plaintiffs are attempting to
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DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
1 determine what is due and owing on Dizon’s Loan, they are not entitled to such information per an
2 accounting claim. Accordingly, Defendants’ Demurrer should be sustained without leave to amend.
3 G. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails
4 Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein they seek
5 injunction against Defendants’ foreclosure of the Property. An injunction is a type of equitable remedy
6 that turns on there being a wrong, often in the form of irreparable injury, and a relief therefor. See generally
7 Code Civ. Proc., § 526. The concept of irreparable injury authorizes the interposition of a court of equity
8 by way of injunction. Wind v. Herbert (1960) 186 Cal.App.2d 276, 285. A grantee takes title to the
9 property subject to all deeds of trust and other encumbrances, which means that the property may be sold
10 on foreclosure of that deed of trust if the debt is not paid, even though the property is no longer owned by
11 the original debtor. Nguyen, supra.
12 Here, Plaintiffs allege suffering “irreparable injury,” which appears to be loss of the Property.
13 (FAC, 55-56). As set forth above, Plaintiffs’ title to and interest in the Property are subject to the DOT,
14 an encumbrance that Plaintiffs do not dispute. And the fact that they now hold the Property’s title, instead
15 of Dizon, does not have any effect on foreclosure pursuant to the DOT. As discussed supra, Plaintiffs have
16 not established that Dizon, or anyone else, have made all payments due on the Loan, or that the Lender
17 consented to the conveyance of title to the Plaintiffs or Plaintiffs’ children (which is another event of
18 default under the DOT, allowing acceleration of the debt). Thus, Plaintiffs have not established any basis
19 for this court to enjoin foreclosure, and the demurrer to their Injunction claim must be sustained.
20 IV. CONCLUSION
21 For the reasons set forth herein, Defendants respectfully request their Demurrer to the First
22 Amended Complaint be sustained in its entirety without leave to amend.
WRIGHT, FINLAY & ZAK, LLP
23
24
Dated: November 1, 2023 By:
25 Cathy Robinson, Esq.
26 Attorneys for Defendants, SELECT PORTFOLIO
SERVICING, INC; and U.S. BANK, NATIONAL
27 ASSOCIATION AS TRUSTEE FOR WAMU
MORTGAGE PASS THROUGH CERTIFICATE
28
FOR WMALT SERIES 2007-OA3
13
_______________________________________________________________________________________________________________
DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
PROOF OF SERVICE
1
2 I, Iryna Brown, declare as follows:
3 I am employed in the County of Orange, State of California. I am over the age of eighteen (18)
and not a party to the within action. My business address is 4665 MacArthur Court, Suite 200, Newport
4 Beach, California 92660. I am readily familiar with the practices of Wright, Finlay & Zak, LLP, for
collection and processing of correspondence for mailing with the United States Postal Service. Such
5 correspondence is deposited with the United States Postal Service the same day in the ordinary course of
6 business. I am aware that on motion of party served, service is presumed invalid if postal cancellation
date or postage meter date is more than one day after date of deposit for mailing in affidavit.
7
On November 1, 2023, I served the within DEFENDANTS’ NOTICE OF DEMURRER AND
8 DEMURRER TO FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT THEREOF
9
on all interested parties in this action as follows:
10
11 [X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as
follows:
12
13 Ceferino Cagang
Erlinda Cagang
14 54 Oceanside Drive
Daly City, CA 94015
15 Tel; 650-892-9447
16 [Plaintiffs Pro Per]
17 [ X] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date
following ordinary business practices.
18
[] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct
19 copies thereof enclosed in a package designated by Federal Express Overnight with the delivery
20 fees provided for.
21
[ ] (BY ONE LEGAL FILE AND SERVE) I caused the above document(s) to be e-served through
22 One Legal File and Serve to the recipient(s) on the above-referenced address and/or attached
service list.
23
24 [X] (State) I declare under penalty of perjury under the law of the State of California that the
foregoing is true and correct. Executed on November 1, 2023, at Newport Beach, California.
25
26
27
28
14
_______________________________________________________________________________________________________________
DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT
Preview
1 WRIGHT, FINLAY & ZAK, LLP Cathy K. Robinson, Esq., SBN 226275 2 Jier Dong, Esq., SBN 349490 3 4665 MacArthur Court, Suite 200 Newport Beach, CA 92660 4 Tel: (949) 477-5050; Fax: (949) 608-9142 crobinson@wrightlegal.net; 5 6 Attorneys for Defendants, SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL ASSOCIATION AS 7 TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT SERIES 8 2007-OA3 9 SUPERIOR COURT OF CALIFORNIA 10 COUNTY OF SAN MATEO 11 12 CEFERINO CAGANG; ERLINDA CAGANG Case No.: 23CIV00801 Assigned to Hon. Susan L. Greenberg; Dept. 3 13 14 DEFENDANTS’ NOTICE OF DEMURRER Plaintiffs, AND DEMURRER TO FIRST AMENDED 15 COMPLAINT; MEMORANDUM OF POINTS 16 vs. AND AUTHORITIES IN SUPPORT THEREOF 17 SHARON DIZON; SELECT PORTFOLIO SERVICING INC.; U.S. BANK NA, AS [Request for Judicial Notice and Meet and Confer 18 TRUSTEE FOR WAMU PASS THROUGH Declaration filed concurrently herewith] 19 CERT.SERIES 2007-OA3; CLEAR RECONVEYANCE CORPORATON; DOES 1- Hearing 20 10, inclusive, Date: December 28, 2023 Time: 2:00 p.m. 21 Dept.: 3 Defendants. 22 23 Complaint filed: February 21, 2023 24 FAC filed: October 3, 2023 25 26 27 TO THE HONORABLE COURT ALL PARTIES AND THEIR ATTORNEYS OF 28 RECORD, IF ANY: 1 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 PLEASE TAKE NOTICE that on December 28, 2023 at 2:00 p.m. , in Department 3 of the 2 above captioned Court, located at 400 County Center, Redwood City, CA 94063, or as soon thereafter as 3 this matter may be heard, the Demurrer of Defendants SELECT PORTFOLIO SERVICING, INC 4 (“SPS”) and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE 5 PASS THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the “Trust”) (collectively 6 “Defendants”) to the Complaint (“Complaint”) of Plaintiffs CEFERINO CAGANG and ERLINDA 7 CAGANG (“Plaintiffs”) will come on regularly for hearing. 8 This Demurrer is made pursuant to Code of Civil Procedure Sections 430.10(b), (d), (e) and (f), 9 430.30(a) and 430.50(a), on the basis that Plaintiffs’ Complaint fails to state facts sufficient to support the 10 only alleged cause of action against Defendants. 11 This Demurrer is based on this Notice of Demurrer and Demurrer, the supporting Memorandum 12 of Points and Authorities set forth below, the Request for Judicial Notice filed concurrently herewith, all 13 pleadings, records, and files in this action, and upon such further oral and/or documentary evidence as 14 may be presented at the time of hearing on this Demurrer. 15 16 Respectfully Submitted, 17 WRIGHT, FINLAY & ZAK, LLP 18 19 Dated: November 1, 2023 By: 20 Cathy Robinson, Esq. Attorneys for Defendants, 21 SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL ASSOCIATION AS 22 TRUSTEE FOR WAMU MORTGAGE PASS 23 THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 24 25 26 27 28 2 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 DEMURRER 2 Defendants SELECT PORTFOLIO SERVICING, INC (“SPS”) and U.S. BANK, NATIONAL 3 ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR 4 WMALT SERIES 2007-OA3 (the “Trust”) (collectively “Defendants”) hereby generally and specially 5 demurs to Plaintiffs’ Complaint on the following grounds: 6 DEMURRER TO THE FIRST CAUSE OF ACTION 7 1. Defendants demur generally and specially to Plaintiffs’ first cause of action for reversal of 8 deed of trust and/or assumption of loan on the grounds that it fails to state facts sufficient to constitute a 9 cause of action because the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 10 430.50(a). 11 DEMURRER TO THE SECOND CAUSE OF ACTION 12 2. Defendants demur generally and specially to Plaintiffs’ second cause of action for 13 cancellation of foreclosure actions on the grounds that it fails to state facts sufficient to constitute a cause 14 of action because the claim is not pled with the required specificity. See, Code Civ. Proc. §§ 430.10(e), (f) 15 and 430.50(a). 16 DEMURRER TO THE THIRD CAUSE OF ACTION 17 3. Defendants demur generally and specially to Plaintiffs’ third cause of action for quiet title 18 on the grounds that it fails to state facts sufficient to constitute a cause of action because the claim is 19 insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a). 20 DEMURRER TO THE FOURTH CAUSE OF ACTION 21 4. Defendants demur generally and specially to Plaintiffs’ fourth cause of action for 22 declaratory relief on the grounds that it fails to state facts sufficient to constitute a cause of action because 23 the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a). 24 DEMURRER TO THE FIFTH CAUSE OF ACTION 25 5. Defendants demur generally and specially to Plaintiffs’ fifth cause of action for accounting 26 on the grounds that it fails to state facts sufficient to constitute a cause of action because the claim is 27 insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 430.50(a). 28 /// 3 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 DEMURRER TO THE SIXTH CAUSE OF ACTION 2 6. Defendants demur generally and specially to Plaintiffs’ sixth cause of action for 3 preliminary and/or permanent injunction on the grounds that it fails to state facts sufficient to constitute a 4 cause of action because the claim is insufficiently pled. See, Code Civ. Proc. §§ 430.10(e), (f) and 5 430.50(a). 6 7 Respectfully Submitted, 8 WRIGHT, FINLAY & ZAK, LLP 9 Dated: November 1, 2023 By: 10 Cathy K. Robinson, Esq. 11 Attorneys for Defendant, SELECT PORTFOLIO SERVICING, INC; and 12 U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS 13 THROUGH CERTIFICATE FOR WMALT 14 SERIES 2007-OA3 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Almost seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject real 4 property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could obtain a loan 5 in the amount of $648,000 secured by a Deed of Trust on the property. Thus, Plaintiffs admit that Dizon 6 was a straw-borrower for the loan. (FAC, 15). 7 Via the initial Complaint filed in this action, Plaintiffs appeared to sue Dizon for quiet title, since 8 Dizon is no longer married to their son. There were no claims in the initial complaint adverse to 9 Defendants, nor challenging the validity of the loan or Deed of Trust. However, Plaintiffs have filed a 10 First Amended Complaint (“FAC”) wherein they allege that Dizon conveyed title back to them, and they 11 are now suing Defendants to assume the loan. However, just because Plaintiffs now hold title to the 12 Property, does not mean that Defendants have to accept Plaintiffs as their borrowers on the mortgage loan. 13 Rather, if Plaintiffs want to become borrowers on a loan secured by the Property, they need to refinance 14 the Property. There is no legal basis requiring Defendants to allow Plaintiffs to step into the shoes of 15 Dizon, the true consumer/borrower on the Loan, just because she is no longer with their son (or otherwise). 16 Since the FAC fails to state any cognizable cause of action against Defendants, Defendants’ 17 Demurrer should be sustained without leave to amend. 18 II. STATEMENT OF FACTS 19 In early 2006, Plaintiffs purchased the piece of real property located at 54 Oceanside Drive, Daly 20 City, CA 94015 (the “Property”). (FAC, 1). Plaintiffs contend that Dizon was the wife of their son Joseph 21 Jenner Cagang (“Joseph”). (FAC, 17). Shortly after obtaining title to the Property, Plaintiffs conveyed 22 title to the Property to Dizon, Plaintiffs’ then daughter-in-law, based on a proposal by Plaintiffs’ children 23 that Dizon obtain a loan that would be secured by the Property. (FAC, 15). Based thereon, Dizon applied 24 for and obtained a loan for $648,000 (the “Loan”), which was secured by a Deed of Trust recorded on the 25 Property on November 22, 2006 (the “DOT”). (RJN, 1). As reflected in the DOT, Dizon is the only 26 borrower on the Loan, which she obtained over sixteen years ago. (Id). After a series of assignments, on 27 March 24, 2012, the Trust became the holder of the Deed of Trust. (RJN, 2-4). 28 Plaintiffs allege that “starting the year beginning of 2019 and thereafter, they [Plaintiffs’ four adult 5 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 children] will be the ones to continue the mortgage payments,” as Dizon “separated ways” with Joseph. 2 (FAC, 18). On January 18, 2019, a Grant Deed was recorded as Instrument No. 2019-003928 in the 3 Official Records of San Mateo County, conveying the Property’s title from Dizon to Christopher Cagang, 4 Joseph Rennier Cagang, Joseph Jerome Cagang and Herberth Cagang, who are Plaintiffs’ children 5 (collectively referred to herein as “Plaintiffs’ Children”). (FAC, 21; Exh. B). 6 The DOT provides that “[i]f all or any part of the Property or any Interest in the Property is sold 7 or transferred (or if borrower is not a natural person and a beneficial interest in Borrower is sold or 8 transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all 9 sums secured by this Security Instrument.” (RJN, 1). Plaintiffs do not contend that Dizon obtained the 10 lender’s prior written consent, or approval in any form, to convey title to Plaintiffs’ Children. (See, FAC, 11 generally). Accordingly, the conveyance of title from Dizon to Plaintiffs’ Children was an event of default 12 under the DOT. (RJN, 1). 13 On March 2, 2023, Plaintiffs filed this lawsuit against Plaintiffs’ Children and Dizon for their 14 purported interests in title to the Property. (See FAC, 23). In their initial Complaint, Plaintiffs alleged that 15 the Plaintiffs’ Children had listed the property for sale, and it was pending with a listing broker Zen Realty. 16 (Compl, 23). 17 On March 9, 2023, a Grant Deed was recorded as Instrument No. 2023-010559 in the Official 18 Records of San Mateo County, conveying the Property’s title from said Plaintiffs’ Children to Plaintiffs. 19 (FAC, 24; Exh. C). Thus, it appears that Plaintiffs’ Children conveyed title to Plaintiffs after receipt of 20 the lawsuit. (See also, FAC, 24). Similarly, Plaintiffs do not allege that the Lender consented to this 21 conveyance of title to the Property, which is an event of default under the DOT. (RJN, 1). 22 On September 21, 2023, a Notice of Default (the “NOD”) was recorded on the Property as 23 Instrument No. 2023-046119 in the Official Records of San Mateo County. (FAC, 26, Exh. D). As set 24 forth in the NOD, there is $149,764.30 (as of 9/18/23) past due on the Loan. (FAC, Exh D). Thus, nobody 25 has made a mortgage payment in some time, despite admittedly enjoying the benefits of the Property. 26 On October 6, 2023, Plaintiffs filed the First Amended Complaint (“FAC”) against Defendants, 27 seeking to assume the loan and stop foreclosure proceedings. 28 /// 6 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 III. ARGUMENT 2 A. The Standards Applied to Ruling on a Demurrer 3 In ruling on a Demurrer, “[m]aterial facts alleged in the complaint are treated as true…[h]owever, 4 contentions, deductions or conclusions of fact or law alleged in the complaint are not considered in judging 5 its sufficiency.” State ex rel. Bowen v. Bank of America Corp. (2005) 126 Cal.App.4th 225, 239-240. 6 “Although [the Court] must accept the truth of [Plaintiff’s] factual allegations when reviewing a demurrer, 7 it is not required to accept the truth of Plaintiff’s legal conclusions. See, Yhudai v. IMPAC Funding Corp. 8 (2016) 1 Cal.App.5th 1252, 1257. Furthermore, if the exhibits to a complaint include contradictory facts, 9 the exhibits prevail. Id. 10 A Demurrer may be based upon, and the Complaint’s allegations contradicted by, matters that are 11 judicially noticeable. Code Civ. Proc. § 430.30, subd. (a); Evidence Code § 452. If any element of a cause 12 of action is negated, the Demurrer to that cause of action is properly sustained. Ross v. Creel Printing & 13 Publishing Company, Inc. (2002) 100 Cal.App.4th 736, 748. Once sustained, a plaintiff must show the 14 manner in which he can amend and how the proposed amendment will change the legal effect of the 15 pleading; otherwise, the Demurrer is properly sustained without leave to amend. Blank v. Kirwan (1985) 16 39 Cal.3d 311, 318; Palm Springs Tennis Club v. Rangel (1999) 73 Cal.App.4th 1, 8. 17 Where defects are evident on the face of the complaint, such as where the elements of a cause of 18 action are not properly alleged in the complaint, the cause of action is a proper subject of a demurrer. 19 Cantu v. Resolution Trust Corp., (1992) 4 Cal.App.4th 857. Further, Code of Civ. Proc. §430.30(a) states 20 that a demurrer may be based on matters that are judicially noticeable. Evid. Code §452 provides that a 21 court can take judicial notice of its own records as well as recorded documents. A demurrer may be 22 sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to 23 plead render it probable plaintiff cannot state a cause of action. Krawitz v. Rusch (1989) 209 Cal.App.3d 24 957, 967. 25 B. Plaintiff’s’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan Fails 26 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of Loan,” 27 wherein they allege that they, not Dizon, should be borrower(s) on the Loan. However, there is no such 28 cause of action, and therefore the Demurrer must be sustained without leave to amend.Simply put, there 7 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 is no enumerated legal theory or law that provides for Plaintiffs’ entitlement to ”reverse the DOT” or 2 assume the Loan. Moreover, Plaintiffs do not challenge the validity of the DOT or Loan, and in fact admit 3 that they knew (over sixteen years ago) that Dizon was obtaining the Loan. (FAC, 17.) 4 To the extent that Plaintiffs intend, by the term “Reverse the DOT,” to cancel the lien on the 5 Property, such a claim fails. California courts have long held that a third party takes title subject to all 6 liens and encumbrances thereon, unless those liens are paid in full. Nguyen v. Calhoun (2003) 105 7 Cal.App.4th 428, 438-439 [A grantee takes title to the property subject to all deeds of trust and other 8 encumbrances]. Plaintiffs do not contend that they have paid the sums owed on the Loan or secured by 9 the DOT in full. (See, FAC, generally). Consequently, the conveyance of title to the Property to Plaintiffs 10 has no effect on the DOT recorded thereon – but for such an act (conveying title without lender’s consent) 11 is an “event of default” as defined by the DOT: “If all or any part of the Property or any Interest in the 12 Property is sold or transferred without Lender's prior written consent, Lender may require immediate 13 payment in full of all sums secured by this Security Instrument." (RJN, 1). 14 To the extent that Plaintiffs seek to assume the Loan, or a “novation,” their claim also fails. 15 Assuming a mortgage creates a new promise which discharges another obligation by novation—a new 16 promise by a third party to pay for the debt of another and rendering the new promisor a debtor. Parrish 17 v. Greco (1953) 118 Cal.App.2d 556, 561; see Civ. Code, § 1530 [“Novation is the substitution of a new 18 obligation for an existing one.”]. “‘Novation is made by contract, and is subject to all the rules 19 concerning contracts in general.’ [Citation] A fundamental rule of contract formation and interpretation is 20 that the terms of a contract are determined by the parties' objective manifestations of consent.” Tufeld 21 Corp. v. Beverly Hills Gateway, L.P. (2022) 86 Cal.App.5th 12, 30; quoting Winograd v. American 22 Broadcasting Co. (1998) 68 Cal.App.4th 624, 632. 23 Here, Plaintiffs recognize the same: “[a] loan assumption is an agreement between a lender, 24 original borrower, and a new narrower [sic] where the new borrower agree to assume responsibility for 25 the debt owed by original borrower.” (FAC, 28). In other words, to effect Plaintiffs’ assumption of the 26 Loan, Defendants as lender, Dizon as original borrower, and Plaintiffs as new borrowers must all consent 27 to it. Here, Plaintiffs allude to Dizon no longer wanting to be the borrower, but they do not allege (because 28 they cannot) that Defendants have ever agreed to allow them to assume the Loan. (See, FAC, 26). 8 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 Therefore, any claim to assume the Loan fails. 2 Finally, Plaintiffs appear to allege that “extraordinary circumstances” and “undue influence” that 3 were beyond their “control and innocence” exists,” but they do not set forth how that relates to their claims 4 against Defendants. (FAC, 30). Moreover, Plaintiffs admit that they knew that Dizon was obtaining a loan 5 secured by the Property, and that the parties had a common scheme to use Dizon as a straw-borrower, 6 over seventeen years ago. To the extent that Plaintiffs thought they were still co-owners (based on 7 Plaintiffs’ Children’s representations to them), this has nothing to do with Defendants. Nor does it 8 establish a basis for “Reversing the DOT” or “Assuming the Loan” against Defendants. Accordingly, 9 Plaintiffs’ first cause of action is defective and incurable as pled, and cannot survive demurrer. 10 C. Plaintiffs’ Second Claim for Cancellation of Foreclosure Actions Fails 11 Plaintiffs’ second cause of action is for Cancellation of Foreclosure Activities, wherein Plaintiffs 12 allege that (1) they are the borrowers on the Loan, and (2) they are not in default because they contributed 13 to payments toward the Loan. (FAC, 34). Notably, this cause of action contradicts their first claim, wherein 14 they admit that they were not borrowers on the Loan – and that Dizon is the borrower. Regardless, the 15 DOT is clear, Dizon is the only borrower identified therein. (RJN, 1). Thus, Plaintiffs cannot establish 16 that they have any relationship with Defendants, let alone that they are the borrowers on the Loan. 17 As alleged in the FAC, “Plaintiffs seeks cancellation of the foreclosure because of the prevailing 18 circumstances and background whereupon, Plaintiffs, the original borrowers were not actually in default, 19 as they have contributed to mortgage payments that has to be accounted for.” (FAC, 34). However, 20 Plaintiffs were never the original borrowers, as reflected by the DOT. (RJN, 1). Additionally, Plaintiffs 21 do not set forth that they actually made any payments directly to the Defendants, as they previously admit 22 that Dizon handled all communications with the bank, and that the Plaintiffs’ Children purportedly made 23 payments thereon, beginning in 2019. (FAC, 15-18). However, just because Plaintiffs’ Children told 24 them that they were making the payments, beginning in 2019, does not establish that Plaintiffs’ Children 25 actually remitted said payments to the Defendants. And even if Plaintiffs and/or Plaintiffs’ Children made 26 some payments, the DOT states that: “Lender's acceptance of payments from third persons, entities or 27 Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of 28 or preclude the exercise of any right or remedy." (RJN, 1). As reflected in the NOD, the loan is over 9 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 $149,000 in arrears, which establishes that nobody was actually making payments, or sufficient payments, 2 on the Loan. (FAC, Exh. D). And the NOD is a right and remedy specified in the DOT. (RJN, 1). 3 Plaintiffs were never a party to the DOT or Loan, and their title to the Property is subject to the 4 DOT. To the extent that Plaintiffs seek cancellation of the NOD, they must allege facts affecting the 5 validity and invalidity of the instrument that is attacked. Kroeker v. Hurlbert (1940) 38 Cal.App.2d 261, 6 266; Little v. Smith (1920) 47 Cal.App. 8, 12, 15. A plaintiff must allege all grounds which he claims 7 entitled him to the relief. Little, supra, 47 Cal.App. at 8. Civil Code Section 3412 provides that a written 8 instrument may be ordered to be canceled upon showing that there is reasonable apprehension that if left 9 outstanding it may cause serious injury to a person against whom it is void or voidable. A grantee takes 10 title to the property subject to all deeds of trust and other encumbrances, which means that the property 11 may be sold on foreclosure of that deed of trust if the debt is not paid, even though the property is no 12 longer owned by the original debtor. Nguyen, supra. As admitted by Plaintiffs, there is no dispute that 13 Dizon obtained the Loan which was secured by the DOT, and therefore the DOT is valid. Plaintiffs have 14 not affirmatively alleged that all payments have been made to the Defendants for the Loan, and it does not 15 appear that Plaintiffs have personal knowledge as to whether Dizon has made any such payments. 16 Foreclosure of the Property pursuant to the DOT is proper even when it is Plaintiffs who now hold the 17 Property’s title. Thus, there is no basis to challenge the NOD. Accordingly, Plaintiffs’ claim fails. 18 D. Plaintiffs’ Third Claim for Quiet Title Fails 19 Plaintiffs’ third cause of action is for Quiet Title, wherein they claim quiet title to the property free 20 and clear of any other interests of the Defendants. (See, FAC 37, 40). 21 A complaint to quiet title must be verified and include: (1) a description of the property; (2) the 22 title of the plaintiff and the basis of the title; (3) the adverse claims to the title; (4) the date as of which the 23 determination is sought; and (5) a prayer for the determination of the title of the plaintiff. Code Civ. Proc., 24 § 761.020. “A quiet title claim is appropriate to establish an interest in real property as against all existing 25 adverse claims or clouds on title.” Paterra v. Hansen (2021) 64 Cal.App.5th 507, 532 [emphasis added]. 26 Moreover, plaintiffs seeking to quiet title must allege they paid any debt owed on the property. Aguilar v. 27 Bocci (1974) 39 Cal.App.3d 475, 477-478; Shimpones v. Stickney (1934) 219 Cal. 637, 649 (“It is settled 28 in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt 10 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 secured.”) “A basic requirement of an action to quiet title is an allegation that plaintiffs ‘are the rightful 2 owners of the property, i.e., that they have satisfied their obligations under the Deed of Trust.’” Santos v. 3 Countrywide Home Loans (E.D. Cal., 2009) 2009 WL 3756337, at *4. The rules of equity do not allow a 4 plaintiff to quiet title in his/her name without repaying the borrowed money used to purchase the property. 5 Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at *12. 6 Here, Plaintiffs admit that title has been conveyed back to them, thus there does not appear to be 7 any dispute as to who owns the Property. (See FAC, 24). Thus, Plaintiffs are the current title owners of 8 the Property per the March 19, 2023 Grant Deed. (FAC, 24, Exh C). However, Plaintiffs have not alleged, 9 because they cannot, that the DOT has been extinguished or paid in full. (See FAC, generally). In fact, 10 Plaintiffs are seeking to “assume the loan”, which is indicative of the fact that the DOT is unpaid, or there 11 would be nothing to assume. There is no basis to quiet title to Plaintiffs free and clear of the DOT, and 12 therefore their claim fails. 13 E. Plaintiffs’ Fourth Claim for Declaratory Relief Fails 14 Plaintiffs’ fourth cause of action is for Declaratory Relief, wherein they allege a controversy 15 regarding the respective rights, duties and obligation between Plaintiffs and Defendants. As an initial 16 matter, a claim for declaratory relief fails because it is not considered to be a viable cause of action in 17 California. Batt v. City and County of San Francisco (2007) 155 Cal.App.4th 65, 82. “Declaratory relief 18 is ultimately a request for relief… in order to weigh it, [the Court] must examine its underlying claims.” 19 Boeing Co. v. Cascade Corp. (9th Cir., 2000) 207 F.3d 1177, 1192. Here, Plaintiffs’ claim is based solely 20 upon the preceding defeated claims. However, a redundant claim for declaratory relief “may be denied 21 ‘where its declaration or determination is not necessary or proper at the time under all the circumstances.’” 22 Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909; citing Code Civ. Proc., § 1061. 23 As discussed, the contract at issue in this case is the DOT, to which Plaintiffs were never a party. 24 Moreover, Plaintiffs have failed to allege that the DOT has been paid in full, and therefore they took title 25 subject to the DOT. Ther is simply no actionable controversy in relation to these claims. Consequently, 26 Plaintiffs’ Declaratory Relief claim cannot survive demurrer. 27 /// 28 /// 11 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 F. Plaintiffs’ Fifth Claim for Accounting Fails 2 Plaintiffs’ fifth cause of action is for Accounting, wherein they allege that if there is a fiduciary 3 relationship between the parties, Defendants must provide them with an accounting. (FAC, 49-50). “A 4 cause of action for accounting requires a showing of a relationship between the plaintiff and the defendant, 5 such a fiduciary relationship, that requires an accounting or a showing that the accounts are so complicated 6 they cannot be determined through an ordinary action at law. Brea v. McGlashan (1934) 3 Cal.App.2d 7 454, 460; 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 819, p. 236. 8 Here, Plaintiffs are not “wronged fiduciaries.” In fact, Plaintiffs cannot allege that SPS or the Trust 9 owed them a duty because, generally, there is no fiduciary duty between a lender/beneficiary/servicer and 10 borrower. See, Sheen v. Wells Fargo, N.A., 2022 WL 664722 (Cal. Supreme Court, March 7, 2022); 11 Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 6 and Nymark v. Heart Fed. 12 Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1093 n.1. Moreover, in this case there is no 13 relationship between Plaintiffs and Defendants, let alone a fiduciary one, as Plaintiffs are not the borrowers 14 on the Loan. Accordingly, Plaintiffs’ Accounting claim fails as a matter of law. 15 Plaintiffs’ claim also fails because they have not alleged any facts showing that a balance is due 16 from SPS or the Trust to Plaintiffs. See, St. James Church of Christ Holiness v. Superior Court (1955) 17 135 Cal.App.2d 352, 359. In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal. 2009) 658 F.Supp.2d 18 1002, 1020, the Court stated: 19 In her counter-complaint, Ms. Hillery asserts a claim for accounting in order to 20 establish what money, if any, she owes to Consumer Solutions. The problem for Ms. Hillery is that "[a] cause of action for an accounting requires a showing 21 . . . that some balance is due the plaintiff that can only be ascertained by an accounting." Teselle v. McLoughlin, 173 Cal. App. 4th 156, 178, 92 Cal. Rptr. 22 3d 696 (2009) (emphasis added). Because Ms. Hillery's claim is not asking how 23 much Consumer Solutions owes her, the claim must be dismissed with prejudice. See Hafiz v. Aurora Loan Services, No. C 09-1963 SI, 2009 U.S. 24 Dist. LEXIS 60003, 2009 WL 2029800, at *2 (N.D. Cal. Jul. 14, 2009) (dismissing claim for accounting because "[p]laintiff does not cite any authority 25 for the proposition that she can maintain a claim for an accounting to determine 26 how much money she owes defendant.") 27 First, in this case Plaintiffs are not the borrowers, so clearly they are not owed any funds by Defendants – 28 as they have no relationship with SPS or the Trust. Second, to the extent Plaintiffs are attempting to 12 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT 1 determine what is due and owing on Dizon’s Loan, they are not entitled to such information per an 2 accounting claim. Accordingly, Defendants’ Demurrer should be sustained without leave to amend. 3 G. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails 4 Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein they seek 5 injunction against Defendants’ foreclosure of the Property. An injunction is a type of equitable remedy 6 that turns on there being a wrong, often in the form of irreparable injury, and a relief therefor. See generally 7 Code Civ. Proc., § 526. The concept of irreparable injury authorizes the interposition of a court of equity 8 by way of injunction. Wind v. Herbert (1960) 186 Cal.App.2d 276, 285. A grantee takes title to the 9 property subject to all deeds of trust and other encumbrances, which means that the property may be sold 10 on foreclosure of that deed of trust if the debt is not paid, even though the property is no longer owned by 11 the original debtor. Nguyen, supra. 12 Here, Plaintiffs allege suffering “irreparable injury,” which appears to be loss of the Property. 13 (FAC, 55-56). As set forth above, Plaintiffs’ title to and interest in the Property are subject to the DOT, 14 an encumbrance that Plaintiffs do not dispute. And the fact that they now hold the Property’s title, instead 15 of Dizon, does not have any effect on foreclosure pursuant to the DOT. As discussed supra, Plaintiffs have 16 not established that Dizon, or anyone else, have made all payments due on the Loan, or that the Lender 17 consented to the conveyance of title to the Plaintiffs or Plaintiffs’ children (which is another event of 18 default under the DOT, allowing acceleration of the debt). Thus, Plaintiffs have not established any basis 19 for this court to enjoin foreclosure, and the demurrer to their Injunction claim must be sustained. 20 IV. CONCLUSION 21 For the reasons set forth herein, Defendants respectfully request their Demurrer to the First 22 Amended Complaint be sustained in its entirety without leave to amend. WRIGHT, FINLAY & ZAK, LLP 23 24 Dated: November 1, 2023 By: 25 Cathy Robinson, Esq. 26 Attorneys for Defendants, SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL 27 ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE 28 FOR WMALT SERIES 2007-OA3 13 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT PROOF OF SERVICE 1 2 I, Iryna Brown, declare as follows: 3 I am employed in the County of Orange, State of California. I am over the age of eighteen (18) and not a party to the within action. My business address is 4665 MacArthur Court, Suite 200, Newport 4 Beach, California 92660. I am readily familiar with the practices of Wright, Finlay & Zak, LLP, for collection and processing of correspondence for mailing with the United States Postal Service. Such 5 correspondence is deposited with the United States Postal Service the same day in the ordinary course of 6 business. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. 7 On November 1, 2023, I served the within DEFENDANTS’ NOTICE OF DEMURRER AND 8 DEMURRER TO FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF 9 on all interested parties in this action as follows: 10 11 [X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as follows: 12 13 Ceferino Cagang Erlinda Cagang 14 54 Oceanside Drive Daly City, CA 94015 15 Tel; 650-892-9447 16 [Plaintiffs Pro Per] 17 [ X] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date following ordinary business practices. 18 [] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct 19 copies thereof enclosed in a package designated by Federal Express Overnight with the delivery 20 fees provided for. 21 [ ] (BY ONE LEGAL FILE AND SERVE) I caused the above document(s) to be e-served through 22 One Legal File and Serve to the recipient(s) on the above-referenced address and/or attached service list. 23 24 [X] (State) I declare under penalty of perjury under the law of the State of California that the foregoing is true and correct. Executed on November 1, 2023, at Newport Beach, California. 25 26 27 28 14 _______________________________________________________________________________________________________________ DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT