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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’ REPLY IN SUPPORT OF
Plaintiffs, DEMURRER TO FIRST AMENDED
15 COMPLAINT
16 vs.
17 SHARON DIZON; SELECT PORTFOLIO
SERVICING INC.; U.S. BANK NA, AS Hearing
18 TRUSTEE FOR WAMU PASS THROUGH Date: December 28, 2023
19 CERT.SERIES 2007-OA3; CLEAR Time: 2:00 p.m.
RECONVEYANCE CORPORATON; DOES 1- Dept.: 3
20 10, inclusive,
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Defendants. Complaint filed: February 21, 2023
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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’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 PLEASE TAKE NOTICE that Defendants SELECT PORTFOLIO SERVICING, INC (“SPS”)
2 and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS
3 THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the “Trust”) (collectively
4 “Defendants”) hereby submit this Memorandum of Points and Authorities in response to Opposition of
5 Plaintiffs CEFERINO CAGANG and ERLINDA CAGANG (“Plaintiffs”) to Demurrer to First
6 Amended Complaint as follows:
7 MEMORANDUM OF POINTS AND AUTHORITIES
8 I. INTRODUCTION
9 As an initial matter, while Plaintiffs filed an Opposition to the Demurrer, they failed to serve it.
10 Defendants only discovered that an Opposition had been filed by reviewing the Court docket and
11 retrieving a copy of the Opposition from the Court. It is requested that Plaintiffs be instructed to serve all
12 pleadings upon Defendants.
13 Almost seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject real
14 property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could obtain a loan
15 in the amount of $648,000 secured by a Deed of Trust on the property (the “DOT”). (FAC, 15). Dizon is
16 no longer a member of the family, as it appears she divorced their son. Plaintiffs appear to allege that
17 their children defrauded them, and that is why their children were initially named in the Complaint (FAC,
18 23), however, they have now “made amends” with their children as title to the property was conveyed
19 back to Plaintiffs. (FAC, 24). However, this does not change the fact that there is a mortgage loan in
20 Dizon’s name, which is secured by the Property. (See, RJN, 1). Nowhere on the DOT does it set forth
21 that Plaintiffs are co-borrowers or trustors of the mortgage loan or DOT. (Id). Moreover, Plaintiffs do
22 not allege that Dizon did not obtain the loan, secured by the Property. In fact, Plaintiffs admit that “Dizon
23 was “only a straw co-borrower from the start.” (Opposition, pg 4, lines 1-2). Thus, the only fraud
24 conducted in this instance was that of Plaintiffs and Dizon, in relation to mortgage fraud.
25 II. ARGUMENT
26 A. Plaintiff’s’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan Fails
27 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of Loan,”
28 wherein they allege that they, not Dizon, should be borrower(s) on the Loan. However, there is no such
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 cause of action, and therefore the Demurrer must be sustained without leave to amend. In fact, Plaintiffs
2 admit that Dizon was a straw borrower, and do not contest that Dizon should not have obtained the loan,
3 or was not authorized to obtain the loan secured by the DOT on the Property. (Opposition, pg 5, lines 1-
4 2). Accordingly, Plaintiffs have wholly failed to allege any conduct of Defendants that is actionable.
5 Furthermore, there is no legal cause of action for “Reversal of Deed of Trust and/or Assumption of Loan”
6 in California. Consequently, the demurrer to Plaintiffs’ first cause of action must be sustained without
7 leave to amend.
8 Moreover, the fact that title has been transferred back to Plaintiffs does not negate the existing
9 DOT on the Property. California courts have long held that a third party takes title subject to all liens and
10 encumbrances thereon, unless those liens are paid in full. Nguyen v. Calhoun (2003) 105 Cal.App.4th 428,
11 438-439. Moreover, the conveyance of title from Dizon to Plaintiffs, without Defendants’ consent, is a
12 breach of the DOT that allows acceleration. “If all or any part of the Property or any Interest in the
13 Property is sold or transferred without Lender's prior written consent, Lender may require immediate
14 payment in full of all sums secured by this Security Instrument." (RJN, 1).
15 Plaintiffs argue in their Opposition that Dizon was added onto the transaction “as an additional
16 borrower on the said deed of trust.” (Oppo, pg 4). However, as reflected in the DOT, the only borrower
17 identified is Dizon. (RJN, 1). Thus, Plaintiffs argument is nonsensical.
18 To the extent that Plaintiffs seek to assume the Loan, or a “novation,” their claim also fails. As
19 set forth in the Demurrr, to effect Plaintiffs’ assumption of the Loan, Defendants as lender, Dizon as
20 original borrower, and Plaintiffs as new borrowers must all consent to it. Poseidon Development v.
21 Woodland Lane Estates, 152 Cal. App 4th 1106. Here, Plaintiffs allude to Dizon no longer wanting to be
22 the borrower, but they do not allege (because they cannot) that Defendants have ever agreed to allow them
23 to assume the Loan. (See, FAC, 26). Therefore, any claim to assume the Loan fails.
24 B. Plaintiffs’ Second Claim for Cancellation of Foreclosure Action Fails
25 Plaintiffs’ second cause of action is for Cancellation of Foreclosure Activities. In their Opposition,
26 Plaintiffs allege:
27 “Plaintiffs request for Cancellation of Foreclosure may be temporary pending the
28 determination of the amount needed pay the arrears when Plaintiffs were not aware that
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 payments were no longer paid by their children, on behalf of SHARON DIZON, and also
2 pending valid responses on the Discovery propounded on [Defendants] SELECT PORTFOLIO
3 SERVICING INC and US BANK NA.” (Opposition, pg 7, lines 8-13).
4 Thus, Plaintiffs do not dispute that the loan is in arrears, or that there has been a default of the DOT. Thus,
5 there is a payment default of the DOT and acceleration of the debt is proper. Furthermore, as discussed
6 supra, the conveyance of title from borrower Dizon to Plaintiffs, without the lender’s consent, is a further
7 basis for accelerating the debt. Consequently, there is not a sufficient legal basis for “Cancellation of
8 Foreclosure”, and the demurrer to Plaintiffs’ second cause of action must be sustained without leave to
9 amend.
10 To the extent that Plaintiffs seek cancellation of the NOD, or foreclosure activity, they must allege
11 facts affecting the validity and invalidity of the instrument that is attacked. Kroeker v. Hurlbert (1940) 38
12 Cal.App.2d 261, 266; Little v. Smith (1920) 47 Cal.App. 8, 12, 15. A grantee takes title to the property
13 subject to all deeds of trust and other encumbrances, which means that the property may be sold on
14 foreclosure of that deed of trust if the debt is not paid, even though the property is no longer owned by the
15 original debtor. Nguyen, supra. Foreclosure of the Property pursuant to the DOT is proper even when it is
16 Plaintiffs who now hold the Property’s title. Thus, there is no basis to challenge the NOD. Accordingly,
17 Plaintiffs’ claim fails. It is noteworthy that, to the extent Plaintiffs want a payoff demand for the DOT to
18 determine the amounts owed thereunder, such a request does not require a lawsuit or discovery – nor is it
19 a proper basis for a “Cancellation of Foreclosure” action.
20 Similarly, the elements of a wrongful foreclosure cause of action are: (1) the trustee or mortgagee
21 caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in
22 a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or
23 mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the
24 sale, the trustor or mortgagor tendered the amount of the secured indebtedness. Sciarratta v. US Bank,
25 N.A. (2016) 247 Cal.App.4th 552, 561-562. There are no facts establishing any illegal, fraudulent or
26 willfully oppressive conduct of defendants in this action. Furthermore, there has been no tender of the
27 debt owed under the DOT. Accordingly, Plaintiffs’ claim for Cancellation of Sale fails.
28 ///
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 C. Plaintiffs’ Third Claim for Quiet Title Fails
2 Plaintiffs’ third cause of action is for Quiet Title, wherein they claim quiet title to the property free
3 and clear of any other interests of the Defendants. (See, FAC 37, 40). However, as discussed in the
4 Demurrer, plaintiffs seeking to quiet title must allege they paid any debt owed on the property. Aguilar v.
5 Bocci (1974) 39 Cal.App.3d 475, 477-478; Shimpones v. Stickney (1934) 219 Cal. 637, 649 (“It is settled
6 in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt
7 secured.”) See also, Santos v. Countrywide Home Loans (E.D. Cal., 2009) 2009 WL 3756337, at *4. The
8 rules of equity do not allow a plaintiff to quiet title in his/her name without repaying the loan secured by
9 a deed of trust thereon. Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at
10 *12; Abdallah v. United Sav. Bank (1996) 43 Cal.App.4th 1001, 1109 (affirming an order sustaining a
11 demurrer without leave to amend in a case claiming the foreclosure and sale of a home was improper);
12 see also, Karlsen v. Gibralter Sav. & Loan Assn. (1974) 15 Cal.App.3d 112, 117. "To hold otherwise
13 would permit plaintiffs to state a cause of action without the necessary element of damage." Arnolds Mgmt.
14 Corp. v. Eischen (1985) 158 Cal.App.3d 575, 580. The tender requirement applies to any claim "implicitly
15 integrated" with the foreclosure process. Id. at 579.
16 Here, Plaintiffs have not alleged, because they cannot, that the DOT has been extinguished or paid
17 in full. In their Opposition, Plaintiffs also concede that the debt remains unpaid, as they argue “it is to be
18 noted that Plaintiffs do not question that there are unpaid mortgage in paper by SHARON DIZON…” and,
19 “It is already established and acknowledged by Plaintiffs and no need to allege that the DOT has not been
20 paid in full.” (Oppo, pg 7). Accordingly, it is undisputed that the DOT has not been paid in full, and
21 therefore Plaintiffs are not entitled to quiet title free and clear of all liens and encumbrances.
22 Consequently, the demurrer to their third cause of action must be sustained without leave to amend.
23 D. Plaintiffs’ Fourth Claim for Declaratory Relief Fails
24 Plaintiffs’ fourth cause of action is for Declaratory Relief. Plaintiffs appear to allege that, prior to
25 the subject 2006 DOT with Dizon as borrower, Plaintiffs were grantors of a different deed of trust.
26 However, Plaintiffs do not establish that Defendants have any interest in a prior deed of trust. Thus, there
27 is no basis for a court to determine the rights and interests in a deed of trust to which Defendants are not
28 a party.
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 Rather, as set forth in the DOT attached as Exhibit 1 to the RJN, the subject DOT identifies Dizon
2 as the borrower. Plaintiffs have admitted that Dizon was used to obtain the loan, and in their own words,
3 have referred to Dizon as a “straw borrower.” Seventeen years later, Dizon appears to have divorced their
4 son, and now Plaintiffs bring this action for Declaratory Relief requesting that the Court determine the
5 rights and interests of the parties in relation to the subject DOT and Property. However, such a
6 determination is not appropriate or necessary. Plaintiffs contend that they currently hold title to the
7 Property, and as discussed supra, title is subject to the liens and encumbrances thereon – including the
8 DOT in Dizon’s name. Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438-439 (a party takes title
9 subject to all liens and encumbrances thereon, unless those liens are paid in full). Thus, while Plaintiffs
10 hold title to the Property, they take title subject to the DOT. This is not in dispute, as Plaintiffs admit that
11 the DOT remains on title and is unpaid. Accordingly, Plaintiffs’ claim for declaratory relief is not proper
12 and the demurrer thereto should be sustained.
13 Additionally, an action for declaratory relief will not lie to determine an issue which is already
14 the subject of an existing claim. California Ins. Guarantee Ass'n v. Sup. Ct. (1991) 231 Cal.App.3d
15 1617, 1623. “The declaratory relief statute should not be used for the purpose of anticipating and
16 determining issues which can be determined in the main action. The object of the statute is to afford a
17 new form of relief where needed and not to furnish a litigant with a second cause of action for the
18 determination of identical issues.” Id. at 1624; citing General of America Ins. Co. v. Lilly (1968) 258
19 Cal.App.2d 465, 470. Here, the declaratory relief claim is wholly derivative of the substantive law
20 claims already asserted elsewhere in the FAC. It adds nothing to the pleading and fails just as the rest of
21 the deficient substantive claims. Thus, a declaration of rights by this Court is neither necessary nor
22 proper. Accordingly, the Demurrer should be sustained without leave to amend for the declaratory relief
23 cause of action.
24 Albeit unclear, it appears that Plaintiffs may be challenging the Assignment of the DOT. However,
25 in the wrongful foreclosure context, a borrower only has standing to challenge an assignment that is void,
26 but lacks standing to challenge an assignment that is merely voidable. Yvanova v. New Century Mortgage
27 Corp., (2016) 62 Cal.4th 919, 939-940; see also, JPMorgan Chase Bank, NA, 245 Cal.App.4th 808 (2016).
28 In this case, Plaintiffs have not pled facts establishing that the Assignment is void, versus merely voidable.
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 Furthermore, Plaintiffs are not borrowers under the subject DOT. Thus, they do not have standing to
2 challenge the various assignments of the DOT, which are reflected on title to the Property. (RJN, 2-4).
3 E. Plaintiffs’ Fifth Claim for Accounting Fails
4 Plaintiffs do not argue in their Opposition that Defendants owe them money, instead they admit
5 that they stopped making payments on the subject mortgage loan in 2019. (Oppo, pg 10). Accodingly,
6 Plaintiffs’ accounting claim fails because they have not alleged that a balance is due from SPS or the Trust
7 to Plaintiffs. See, St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359.
8 In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal. 2009) 658 F.Supp.2d 1002, 1020, the Court stated:
9 In her counter-complaint, Ms. Hillery asserts a claim for accounting in order to
10 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
11 . . . 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.
12 3d 696 (2009) (emphasis added). Because Ms. Hillery's claim is not asking how
13 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.
14 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
16 how much money she owes defendant.")
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Thus, a requisite element of their Accounting claim is that Defendants owe them money, which they
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cannot allege. Accordingly, Defendants’ Demurrer should be sustained without leave to amend.
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F. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails
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Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein they seek
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injunction against Defendants’ foreclosure of the Property. An injunction is a type of equitable remedy
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that turns on there being a wrong, often in the form of irreparable injury, and a relief therefor. See
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generally Code Civ. Proc., § 526. The concept of irreparable injury authorizes the interposition of a
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court of equity by way of injunction. Wind v. Herbert (1960) 186 Cal.App.2d 276, 285. A grantee takes
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title to the property subject to all deeds of trust and other encumbrances, which means that the property
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may be sold on foreclosure of that deed of trust if the debt is not paid, even though the property is no
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longer owned by the original debtor. Nguyen, supra. Furthermore, request for injunctive relief fails
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because injunctive relief is not a viable, independent7cause of action in California but rather a remedy.
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
1 Guesses v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187; Shell Oil v. Richter, (1942) 52
2 Cal.App.2d 164. Accordingly, the Demurrer should be sustained without leave to amend for the
3 injunctive relief cause of action.
4 III. CONCLUSION
5 For the reasons set forth herein, Defendants respectfully request their Demurrer to the First
6 Amended Complaint be sustained in its entirety without leave to amend.
WRIGHT, FINLAY & ZAK, LLP
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Dated: December 19, 2023 By:
9 Cathy Robinson, Esq.
10 Attorneys for Defendants, SELECT PORTFOLIO
SERVICING, INC; and U.S. BANK, NATIONAL
11 ASSOCIATION AS TRUSTEE FOR WAMU
MORTGAGE PASS THROUGH CERTIFICATE
12
FOR WMALT SERIES 2007-OA3
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DEFENDANTS’ REPLY IN SUPPORT OF 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.
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On December 19, 2023, I served the within DEFENDANTS’ REPLY IN SUPPORT OF
8 DEMURRER TO FIRST AMENDED COMPLAINT
on all interested parties in this action as follows:
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[X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as
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follows:
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Ceferino Cagang
12 Erlinda Cagang
13 54 Oceanside Drive
Daly City, CA 94015
14 Tel; 650-892-9447
[Plaintiffs Pro Per]
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16 [X ] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date
following ordinary business practices.
17 [] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct
18 copies thereof enclosed in a package designated by Federal Express Overnight with the delivery
fees provided for.
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[ ] (BY ONE LEGAL FILE AND SERVE) I caused the above document(s) to be e-served through
21 One Legal File and Serve to the recipient(s) on the above-referenced address and/or attached
service list.
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[X] (State) I declare under penalty of perjury under the law of the State of California that the
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foregoing is true and correct. Executed on December 19, 2023, at Newport Beach, California.
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT
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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; 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’ REPLY IN SUPPORT OF Plaintiffs, DEMURRER TO FIRST AMENDED 15 COMPLAINT 16 vs. 17 SHARON DIZON; SELECT PORTFOLIO SERVICING INC.; U.S. BANK NA, AS Hearing 18 TRUSTEE FOR WAMU PASS THROUGH Date: December 28, 2023 19 CERT.SERIES 2007-OA3; CLEAR Time: 2:00 p.m. RECONVEYANCE CORPORATON; DOES 1- Dept.: 3 20 10, inclusive, 21 Defendants. Complaint filed: February 21, 2023 22 FAC filed: October 3, 2023 23 24 25 TO THE HONORABLE COURT ALL PARTIES AND THEIR ATTORNEYS OF 26 RECORD, IF ANY: 27 28 1 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 PLEASE TAKE NOTICE that Defendants SELECT PORTFOLIO SERVICING, INC (“SPS”) 2 and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS 3 THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the “Trust”) (collectively 4 “Defendants”) hereby submit this Memorandum of Points and Authorities in response to Opposition of 5 Plaintiffs CEFERINO CAGANG and ERLINDA CAGANG (“Plaintiffs”) to Demurrer to First 6 Amended Complaint as follows: 7 MEMORANDUM OF POINTS AND AUTHORITIES 8 I. INTRODUCTION 9 As an initial matter, while Plaintiffs filed an Opposition to the Demurrer, they failed to serve it. 10 Defendants only discovered that an Opposition had been filed by reviewing the Court docket and 11 retrieving a copy of the Opposition from the Court. It is requested that Plaintiffs be instructed to serve all 12 pleadings upon Defendants. 13 Almost seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject real 14 property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could obtain a loan 15 in the amount of $648,000 secured by a Deed of Trust on the property (the “DOT”). (FAC, 15). Dizon is 16 no longer a member of the family, as it appears she divorced their son. Plaintiffs appear to allege that 17 their children defrauded them, and that is why their children were initially named in the Complaint (FAC, 18 23), however, they have now “made amends” with their children as title to the property was conveyed 19 back to Plaintiffs. (FAC, 24). However, this does not change the fact that there is a mortgage loan in 20 Dizon’s name, which is secured by the Property. (See, RJN, 1). Nowhere on the DOT does it set forth 21 that Plaintiffs are co-borrowers or trustors of the mortgage loan or DOT. (Id). Moreover, Plaintiffs do 22 not allege that Dizon did not obtain the loan, secured by the Property. In fact, Plaintiffs admit that “Dizon 23 was “only a straw co-borrower from the start.” (Opposition, pg 4, lines 1-2). Thus, the only fraud 24 conducted in this instance was that of Plaintiffs and Dizon, in relation to mortgage fraud. 25 II. ARGUMENT 26 A. Plaintiff’s’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan Fails 27 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of Loan,” 28 wherein they allege that they, not Dizon, should be borrower(s) on the Loan. However, there is no such 2 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 cause of action, and therefore the Demurrer must be sustained without leave to amend. In fact, Plaintiffs 2 admit that Dizon was a straw borrower, and do not contest that Dizon should not have obtained the loan, 3 or was not authorized to obtain the loan secured by the DOT on the Property. (Opposition, pg 5, lines 1- 4 2). Accordingly, Plaintiffs have wholly failed to allege any conduct of Defendants that is actionable. 5 Furthermore, there is no legal cause of action for “Reversal of Deed of Trust and/or Assumption of Loan” 6 in California. Consequently, the demurrer to Plaintiffs’ first cause of action must be sustained without 7 leave to amend. 8 Moreover, the fact that title has been transferred back to Plaintiffs does not negate the existing 9 DOT on the Property. California courts have long held that a third party takes title subject to all liens and 10 encumbrances thereon, unless those liens are paid in full. Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 11 438-439. Moreover, the conveyance of title from Dizon to Plaintiffs, without Defendants’ consent, is a 12 breach of the DOT that allows acceleration. “If all or any part of the Property or any Interest in the 13 Property is sold or transferred without Lender's prior written consent, Lender may require immediate 14 payment in full of all sums secured by this Security Instrument." (RJN, 1). 15 Plaintiffs argue in their Opposition that Dizon was added onto the transaction “as an additional 16 borrower on the said deed of trust.” (Oppo, pg 4). However, as reflected in the DOT, the only borrower 17 identified is Dizon. (RJN, 1). Thus, Plaintiffs argument is nonsensical. 18 To the extent that Plaintiffs seek to assume the Loan, or a “novation,” their claim also fails. As 19 set forth in the Demurrr, to effect Plaintiffs’ assumption of the Loan, Defendants as lender, Dizon as 20 original borrower, and Plaintiffs as new borrowers must all consent to it. Poseidon Development v. 21 Woodland Lane Estates, 152 Cal. App 4th 1106. Here, Plaintiffs allude to Dizon no longer wanting to be 22 the borrower, but they do not allege (because they cannot) that Defendants have ever agreed to allow them 23 to assume the Loan. (See, FAC, 26). Therefore, any claim to assume the Loan fails. 24 B. Plaintiffs’ Second Claim for Cancellation of Foreclosure Action Fails 25 Plaintiffs’ second cause of action is for Cancellation of Foreclosure Activities. In their Opposition, 26 Plaintiffs allege: 27 “Plaintiffs request for Cancellation of Foreclosure may be temporary pending the 28 determination of the amount needed pay the arrears when Plaintiffs were not aware that 3 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 payments were no longer paid by their children, on behalf of SHARON DIZON, and also 2 pending valid responses on the Discovery propounded on [Defendants] SELECT PORTFOLIO 3 SERVICING INC and US BANK NA.” (Opposition, pg 7, lines 8-13). 4 Thus, Plaintiffs do not dispute that the loan is in arrears, or that there has been a default of the DOT. Thus, 5 there is a payment default of the DOT and acceleration of the debt is proper. Furthermore, as discussed 6 supra, the conveyance of title from borrower Dizon to Plaintiffs, without the lender’s consent, is a further 7 basis for accelerating the debt. Consequently, there is not a sufficient legal basis for “Cancellation of 8 Foreclosure”, and the demurrer to Plaintiffs’ second cause of action must be sustained without leave to 9 amend. 10 To the extent that Plaintiffs seek cancellation of the NOD, or foreclosure activity, they must allege 11 facts affecting the validity and invalidity of the instrument that is attacked. Kroeker v. Hurlbert (1940) 38 12 Cal.App.2d 261, 266; Little v. Smith (1920) 47 Cal.App. 8, 12, 15. A grantee takes title to the property 13 subject to all deeds of trust and other encumbrances, which means that the property may be sold on 14 foreclosure of that deed of trust if the debt is not paid, even though the property is no longer owned by the 15 original debtor. Nguyen, supra. Foreclosure of the Property pursuant to the DOT is proper even when it is 16 Plaintiffs who now hold the Property’s title. Thus, there is no basis to challenge the NOD. Accordingly, 17 Plaintiffs’ claim fails. It is noteworthy that, to the extent Plaintiffs want a payoff demand for the DOT to 18 determine the amounts owed thereunder, such a request does not require a lawsuit or discovery – nor is it 19 a proper basis for a “Cancellation of Foreclosure” action. 20 Similarly, the elements of a wrongful foreclosure cause of action are: (1) the trustee or mortgagee 21 caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in 22 a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or 23 mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the 24 sale, the trustor or mortgagor tendered the amount of the secured indebtedness. Sciarratta v. US Bank, 25 N.A. (2016) 247 Cal.App.4th 552, 561-562. There are no facts establishing any illegal, fraudulent or 26 willfully oppressive conduct of defendants in this action. Furthermore, there has been no tender of the 27 debt owed under the DOT. Accordingly, Plaintiffs’ claim for Cancellation of Sale fails. 28 /// 4 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 C. Plaintiffs’ Third Claim for Quiet Title Fails 2 Plaintiffs’ third cause of action is for Quiet Title, wherein they claim quiet title to the property free 3 and clear of any other interests of the Defendants. (See, FAC 37, 40). However, as discussed in the 4 Demurrer, plaintiffs seeking to quiet title must allege they paid any debt owed on the property. Aguilar v. 5 Bocci (1974) 39 Cal.App.3d 475, 477-478; Shimpones v. Stickney (1934) 219 Cal. 637, 649 (“It is settled 6 in California that a mortgagor cannot quiet his title against the mortgagee without paying the debt 7 secured.”) See also, Santos v. Countrywide Home Loans (E.D. Cal., 2009) 2009 WL 3756337, at *4. The 8 rules of equity do not allow a plaintiff to quiet title in his/her name without repaying the loan secured by 9 a deed of trust thereon. Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at 10 *12; Abdallah v. United Sav. Bank (1996) 43 Cal.App.4th 1001, 1109 (affirming an order sustaining a 11 demurrer without leave to amend in a case claiming the foreclosure and sale of a home was improper); 12 see also, Karlsen v. Gibralter Sav. & Loan Assn. (1974) 15 Cal.App.3d 112, 117. "To hold otherwise 13 would permit plaintiffs to state a cause of action without the necessary element of damage." Arnolds Mgmt. 14 Corp. v. Eischen (1985) 158 Cal.App.3d 575, 580. The tender requirement applies to any claim "implicitly 15 integrated" with the foreclosure process. Id. at 579. 16 Here, Plaintiffs have not alleged, because they cannot, that the DOT has been extinguished or paid 17 in full. In their Opposition, Plaintiffs also concede that the debt remains unpaid, as they argue “it is to be 18 noted that Plaintiffs do not question that there are unpaid mortgage in paper by SHARON DIZON…” and, 19 “It is already established and acknowledged by Plaintiffs and no need to allege that the DOT has not been 20 paid in full.” (Oppo, pg 7). Accordingly, it is undisputed that the DOT has not been paid in full, and 21 therefore Plaintiffs are not entitled to quiet title free and clear of all liens and encumbrances. 22 Consequently, the demurrer to their third cause of action must be sustained without leave to amend. 23 D. Plaintiffs’ Fourth Claim for Declaratory Relief Fails 24 Plaintiffs’ fourth cause of action is for Declaratory Relief. Plaintiffs appear to allege that, prior to 25 the subject 2006 DOT with Dizon as borrower, Plaintiffs were grantors of a different deed of trust. 26 However, Plaintiffs do not establish that Defendants have any interest in a prior deed of trust. Thus, there 27 is no basis for a court to determine the rights and interests in a deed of trust to which Defendants are not 28 a party. 5 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 Rather, as set forth in the DOT attached as Exhibit 1 to the RJN, the subject DOT identifies Dizon 2 as the borrower. Plaintiffs have admitted that Dizon was used to obtain the loan, and in their own words, 3 have referred to Dizon as a “straw borrower.” Seventeen years later, Dizon appears to have divorced their 4 son, and now Plaintiffs bring this action for Declaratory Relief requesting that the Court determine the 5 rights and interests of the parties in relation to the subject DOT and Property. However, such a 6 determination is not appropriate or necessary. Plaintiffs contend that they currently hold title to the 7 Property, and as discussed supra, title is subject to the liens and encumbrances thereon – including the 8 DOT in Dizon’s name. Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438-439 (a party takes title 9 subject to all liens and encumbrances thereon, unless those liens are paid in full). Thus, while Plaintiffs 10 hold title to the Property, they take title subject to the DOT. This is not in dispute, as Plaintiffs admit that 11 the DOT remains on title and is unpaid. Accordingly, Plaintiffs’ claim for declaratory relief is not proper 12 and the demurrer thereto should be sustained. 13 Additionally, an action for declaratory relief will not lie to determine an issue which is already 14 the subject of an existing claim. California Ins. Guarantee Ass'n v. Sup. Ct. (1991) 231 Cal.App.3d 15 1617, 1623. “The declaratory relief statute should not be used for the purpose of anticipating and 16 determining issues which can be determined in the main action. The object of the statute is to afford a 17 new form of relief where needed and not to furnish a litigant with a second cause of action for the 18 determination of identical issues.” Id. at 1624; citing General of America Ins. Co. v. Lilly (1968) 258 19 Cal.App.2d 465, 470. Here, the declaratory relief claim is wholly derivative of the substantive law 20 claims already asserted elsewhere in the FAC. It adds nothing to the pleading and fails just as the rest of 21 the deficient substantive claims. Thus, a declaration of rights by this Court is neither necessary nor 22 proper. Accordingly, the Demurrer should be sustained without leave to amend for the declaratory relief 23 cause of action. 24 Albeit unclear, it appears that Plaintiffs may be challenging the Assignment of the DOT. However, 25 in the wrongful foreclosure context, a borrower only has standing to challenge an assignment that is void, 26 but lacks standing to challenge an assignment that is merely voidable. Yvanova v. New Century Mortgage 27 Corp., (2016) 62 Cal.4th 919, 939-940; see also, JPMorgan Chase Bank, NA, 245 Cal.App.4th 808 (2016). 28 In this case, Plaintiffs have not pled facts establishing that the Assignment is void, versus merely voidable. 6 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 Furthermore, Plaintiffs are not borrowers under the subject DOT. Thus, they do not have standing to 2 challenge the various assignments of the DOT, which are reflected on title to the Property. (RJN, 2-4). 3 E. Plaintiffs’ Fifth Claim for Accounting Fails 4 Plaintiffs do not argue in their Opposition that Defendants owe them money, instead they admit 5 that they stopped making payments on the subject mortgage loan in 2019. (Oppo, pg 10). Accodingly, 6 Plaintiffs’ accounting claim fails because they have not alleged that a balance is due from SPS or the Trust 7 to Plaintiffs. See, St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359. 8 In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal. 2009) 658 F.Supp.2d 1002, 1020, the Court stated: 9 In her counter-complaint, Ms. Hillery asserts a claim for accounting in order to 10 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 11 . . . 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. 12 3d 696 (2009) (emphasis added). Because Ms. Hillery's claim is not asking how 13 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. 14 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 15 for the proposition that she can maintain a claim for an accounting to determine 16 how much money she owes defendant.") 17 Thus, a requisite element of their Accounting claim is that Defendants owe them money, which they 18 cannot allege. Accordingly, Defendants’ Demurrer should be sustained without leave to amend. 19 F. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails 20 Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein they seek 21 injunction against Defendants’ foreclosure of the Property. An injunction is a type of equitable remedy 22 that turns on there being a wrong, often in the form of irreparable injury, and a relief therefor. See 23 generally Code Civ. Proc., § 526. The concept of irreparable injury authorizes the interposition of a 24 court of equity by way of injunction. Wind v. Herbert (1960) 186 Cal.App.2d 276, 285. A grantee takes 25 title to the property subject to all deeds of trust and other encumbrances, which means that the property 26 may be sold on foreclosure of that deed of trust if the debt is not paid, even though the property is no 27 longer owned by the original debtor. Nguyen, supra. Furthermore, request for injunctive relief fails 28 because injunctive relief is not a viable, independent7cause of action in California but rather a remedy. _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT 1 Guesses v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187; Shell Oil v. Richter, (1942) 52 2 Cal.App.2d 164. Accordingly, the Demurrer should be sustained without leave to amend for the 3 injunctive relief cause of action. 4 III. CONCLUSION 5 For the reasons set forth herein, Defendants respectfully request their Demurrer to the First 6 Amended Complaint be sustained in its entirety without leave to amend. WRIGHT, FINLAY & ZAK, LLP 7 8 Dated: December 19, 2023 By: 9 Cathy Robinson, Esq. 10 Attorneys for Defendants, SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL 11 ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE 12 FOR WMALT SERIES 2007-OA3 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF 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 December 19, 2023, I served the within DEFENDANTS’ REPLY IN SUPPORT OF 8 DEMURRER TO FIRST AMENDED COMPLAINT on all interested parties in this action as follows: 9 [X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as 10 follows: 11 Ceferino Cagang 12 Erlinda Cagang 13 54 Oceanside Drive Daly City, CA 94015 14 Tel; 650-892-9447 [Plaintiffs Pro Per] 15 16 [X ] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date following ordinary business practices. 17 [] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct 18 copies thereof enclosed in a package designated by Federal Express Overnight with the delivery fees provided for. 19 20 [ ] (BY ONE LEGAL FILE AND SERVE) I caused the above document(s) to be e-served through 21 One Legal File and Serve to the recipient(s) on the above-referenced address and/or attached service list. 22 [X] (State) I declare under penalty of perjury under the law of the State of California that the 23 foregoing is true and correct. Executed on December 19, 2023, at Newport Beach, California. 24 25 26 27 28 9 _______________________________________________________________________________________________________________ DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO FIRST AMENDED COMPLAINT