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1 WRIGHT, FINLAY & ZAK, LLP
Cathy K. Robinson, Esq., SBN 226275
2 Sabaa Ghomashchi, Esq., SBN 352285
3 4665 MacArthur Court, Suite 200
Newport Beach, CA 92660
4 Tel: (949) 477-5050; Fax: (949) 608-9142
Email: crobinson@wrightlegal.net;
5
6 Attorneys for Defendants,
SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL ASSOCIATION
7
AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT
8 SERIES 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.
13
3
14
Plaintiffs, DEFENDANTS’ REPLY IN SUPPORT
15 OF DEMURRER TO SECOND
16 vs. AMENDED COMPLAINT
17 SHARON DIZON; SELECT PORTFOLIO
SERVICING INC.; U.S. BANK NA, AS
18 TRUSTEE FOR WAMU PASS THROUGH
19 CERT.SERIES 2007-OA3; CLEAR Hearing
RECONVEYANCE CORPORATON; DOES 1- Date: April 4, 2024
20 10, inclusive, Time: 2:00 pm
Dept.: 3
21
Defendants.
22
23 Complaint filed: February 21, 2023
FAC filed: October 3, 2023
24 SAC filed: January 18, 2024
25
26
27
TO THE HONORABLE COURT ALL PARTIES AND THEIR ATTORNEYS OF
28
RECORD, IF ANY:
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
PLEASE TAKE NOTICE that Defendants SELECT PORTFOLIO SERVICING, INC
1
(“SPS”) and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU
2
MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the
3
“Trust”) (collectively “Defendants”) hereby submit this Memorandum of Points and
4
Authorities in response to Opposition of Plaintiffs CEFERINO CAGANG and ERLINDA
5 CAGANG (“Plaintiffs”) to Demurrer to the Second Amended Complaint (“SAC”) as follows:
6 MEMORANDUM OF POINTS AND AUTHORITIES
7 I. INTRODUCTION
8 Over seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject
9 real property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could
10 obtain a loan in the amount of $648,000 secured by a Deed of Trust on the property. Thus,
Plaintiffs admit that Dizon was a straw-borrower for the loan. (SAC ¶15). In their Opposition,
11
Plaintiffs argue that “they were stripped of lien interest due to the fraudulent misrepresentations
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of their children and Sharon Dizon.” (Oppo, pg 2). Plaintiffs do not allege any fraud on behalf
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of SPS or the Trust.
14
Plaintiffs appear to contend, albeit vague, that they were original borrowers on the Loan.
15 (Oppo, pg 2). However, as set forth in the Deed of Trust, which is attached as Exhibit to the
16 RJN filed concurrently with the Demurrer, Dizon was the only borrower. (RJN, Exh 1). Thus,
17 Plaintiffs’ claims are nonsensical.
18 Simply put, Plaintiffs used Dizon to obtain financing for the Property, and Dizon (not
19 Plaintiffs) are Defendants’ borrower. It is of no consequence that Plaintiffs and Dizon’s
20 relationship turned sour, and Plaintiffs have no relationship with SPS or the Trust. Thus, there
claims against Defendants cannot survive demurrer.
21
II. ARGUMENT
22
A. Plaintiffs’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan
23 Fails
24 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of
25 Loan,” wherein they allege that they, not Dizon, should be borrower(s) on the Loan, and that the
26 DOT is void because Dizon acquired her interest through fraudulent means (See Opposition,
pg.3-5). However, Plaintiffs do not challenge the validity of the DOT or Loan, and in fact admit
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that they knew (over seventeen years ago) that Dizon was obtaining the Loan. (SAC ¶15.).
28
Moreover, as this Court ruled in sustaining the demurrer to the First Amended Complaint
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
(“FAC”), “the FAC alleges no basis to assume the loan. A transferee of encumbered real property
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‘takes title to the property subject to all deeds of trust and other encumbrances…this means that
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the property may be sold on foreclosure of that deed of trust if the debt is not paid, even though
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property is no longer owned by the original debtor.’ Nguyen v. Calhoun (2003) 105 Cal.App.4th
4
428, 438-439.”
5 Plaintiffs failed to set forth any facts establishing any basis to assume the loan, and
6 instead just concludes “Plaintiffs also now seeks a loan assumption of the corresponding Deed
7 of Trust…” (SAC, 31). Just as they did in their FAC, which this Court already found deficient,
8 Plaintiffs argue in their Opposition that Dizon was added onto the transaction “as an additional
9 borrower on the said deed of trust.” (Oppo, pg. 3). However, as reflected in the DOT, the only
10 borrower identified is Dizon. (RJN, 1). Thus, Plaintiffs argument is nonsensical and contradicted
by documents which this Court may take judicial notice of.
11
Plaintiffs claim in their Opposition to Defendants’ Demurrer (“Opposition”) that
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Defendants’ statute of limitations arguments against their claims of fraud and cancellation of
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instruments claims do not have “merit whatsoever” and “legal standing” because they are not
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named in the November 22, 2006 Deed of Trust (“DOT”) as parties to the DOT, and that the
15 DOT “pertains to lender Loan Center of America.” (Opposition, pg. 4) Plaintiffs’ claim is
16 nonsensical because, since SPS and the Trust are named as Defendants in this suit, Defendants
17 have legal standing to argue a statute of limitations defense. It appears that Plaintiffs are
18 misunderstanding the arguments raised in Demurrer, which is that any claims by Plaintiffs to
19 void the DOT are time-barred, as they should have been brought within 3 years. Ankoanda v.
20 Walker-Smith (1996) 44 Cal.App.4th 610, 615. Since the DOT was executed and recorded in
2006, Plaintiffs deadline to pursue this claim was November 2009. Thus, their claims are time
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barred.
22
Plaintiffs then challenge the validity of the recorded Assignments referenced in
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Defendants’ Request for Judicial Notice in support of Defendants’ Demurrer (“RJN”)
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(Opposition pg. 4-5). Plaintiffs claim that the Assignments, which led to Defendants interest in
25 the Subject Property, are subject “to proof.” (Id.). However, it is uncertain what Plaintiffs mean
26 by this, as it is vague and unintelligible. If Plaintiffs are claiming that Defendants need to prove
27 that they have come into lawful possession of their interest in the Subject Property, then the
28 Assignments referenced in the RJN are such proof, as they point to the existence of public records
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
indicating how Defendants came to hold their lien interest. If Plaintiffs are arguing that
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Defendants need to “prove” that the Assignments are valid, then that is the purpose of the notary
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public’s signature, the recording, and the signed declarations within each Assignment, all serving
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to authenticate the Assignments.
4
Plaintiffs cite to Love v. Wolf (1964) 226 Cal.App.2d 378, 382, and argues that the
5 Assignments do not prove that Defendants are the legal holders of the DOT, as courts can only
6 take judicial notice of the existence of a document, but not the truth of the matters therein stated
7 (Opposition pg. 4).
8 However, courts may still take judicial notice of the legal effect, dates, and parties of
9 recorded documents. (See Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007)
10 152 Cal.App.4th 1106, 1117). “A court may take judicial notice of something that cannot
reasonably be controverted, even if it negates an express allegation of the pleading. This includes
11
recorded deeds.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152
12
Cal.App.4th 1106, 1108 (finding that the effect of an assignment of deed of trust “could not be
13
clearer.”), “In Poseidon, for example, the court affirmed the trial court's taking judicial notice,
14
in sustaining a demurrer, of the parties, dates, and legal consequences of a series of recorded
15 documents relating to a real estate transaction.” (See Id.). Here, when reviewing the Assignments
16 referenced in the RJN, it is clear from their face what the legal effect is. As stated above, this
17 Court may take judicial notice of the dates and parties referenced in such assignments. The clear
18 legal effect from these Assignments is that the lienholder of the DOT has transferred from one
19 entity to another. Accordingly, the arguments raised by Plaintiffs’ in opposition to the demurrer
20 do not set forth a proper basis to overrule demurrer.
21 Next Plaintiffs, just as they did via their prior opposition to demurrer, attempt to argue
22 that “novation is very much a reasonable remedy….” (See Opposition, pg. 4). However, as
23 explained in the Demurrer, as well as this Court in its ruling on the Demurrer to the FAC, “the
24 FAC does not allege that the Cagangs agreed to assume the debt—an assumption agreement
25 must be in writing or contained in a deed signed by the Cagangs. (Cornelison v. Kornbluth (1975)
26 15 Cal.3d 590, 596–597.)” (Order on Defendants’ Demurrer to FAC, pg 3). The Court further
27 noted that: “And, furthermore, assumption of the loan would be unlikely to provide any practical
28 relief to the Cagangs. Even without assumption, there is no allegation that the Cagangs are
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 presently legally or equitably prohibited from tendering payment of the debt secured by Dizon’s
2 deed of trust and thereby preventing foreclosure. (See Nguyen v. Calhoun (2003) 105
3 Cal.App.4th 428, 439.)” (Order on Defendants’ Demurrer to FAC, pg 3-4).
4 Defendants are not obligated to provide a novation, an assumption, a loan modification,
5 or other foreclosure alternatives to Plaintiffs—merely to assess Plaintiffs’ financial situation and
6 to determine if such alternatives are available. As Plaintiffs mention in their Opposition, they
7 spoke to Defendants’ Counsel (Mr. Sabaa Ghomashchi) regarding potential foreclosure
8 alternatives. However, during this conversation, which took place during the Meet & Confer
9 conference, Mr. Ghomashchi advised Plaintiff CEFERINO CAGANG that he will discuss
10 potential alternatives with Plaintiffs to see if they qualify but that he can make no assurances. As
11 a result of such discussions with Defendants, Mr. Ghomashchi then advised Plaintiffs that, upon
12 review of Plaintiffs’ financial situation, it has been determined that Plaintiffs do not qualify for
13 an assumption or a novation. There was no indication nor promise made that Plaintiffs would
14 receive such alternatives—only that it would be assessed if they qualify for any. Moreover, for
15 purposes of demurrer, the Court only looks at the allegations in the SAC, and Plaintiffs fail to
16 allege any facts establishing that the parties entered into a written and signed assumption
17 agreement. Thus, their argument fails. Cornelison v. Kornbluth (1975) 15 Cal.3d 590, 596–597.
18 B. Plaintiffs’ Second Claim for Cancellation of Foreclosure Actions Fails
19 As stated earlier, Plaintiffs’ cause of action or “cancellation of foreclosure” fails as a
20 matter of law, as it is time-barred by the three-year statute of limitations imposed by Section
21 338(d), as Plaintiffs alleges the same facts in this cause of action as they do in their claims of
22 fraud.
23 Plaintiffs state in their Opposition that Defendants fail to state the grounds upon which
24 their Demurrer against Plaintiffs’ cause of action for Cancellation of Foreclosure should be
25 sustained (See Opposition pg. 6). However, contrary to Plaintiffs’ argument, the demurrer sets
26 forth that (1) Plaintiffs do not allege facts to support their claim of fraud in their attempt to void
27 the DOT; (2) Plaintiffs’ contributions to the mortgage payments were paid to Dizon, not to the
28 Defendants; and (3) Plaintiffs’ arguments contradict each other, as they cannot claim that the
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 DOT is void due to fraud, then argue that they made payments to this fraudulent DOT for
2 numerous years—the latter argument would validate the DOT. (See Demurrer, generally; See
3 SAC, generally).
4 Plaintiffs claim that Defendants mentioned that Plaintiffs were not actually in default, as
5 they had contributed to mortgage payments that “has to be accounted for.” (See Opposition, pg.
6 6). Plaintiffs then cite their First Amended Complaint, which has since been demurred to
7 successfully by Defendants (Id.). However, this Court already found said argument legally
8 deficient, when it sustained the demurrer to the FAC:
9 “The FAC does not allege that Dizon is not in default on the loan, however. Nor does it
10 allege that the Cagangs or Dizon have applied for a loan modification or engaged in any
11 other conduct triggering statutory foreclosure protections. And the allegation that the
12 Cagangs contributed to payments on the loan—payments that are admitted to be less than
13 the sum due—does not provide any basis in law or equity to preclude the Lenders from
14 exercising their rights given by the deed of trust, the validity of which is not challenged
15 by the FAC.”
16 (Order on Defendants’ Demurrer to FAC, pg 4). Despite the Court’s prior ruling, Plaintiffs repeat
17 these same claims in their SAC and Opposition to Demurrer to SAC.
18 To the extent that Plaintiffs seek cancellation of the NOD, or foreclosure activity, they
19 must allege facts affecting the validity and invalidity of the instrument that is attacked. (See
20 Kroeker v. Hurlbert (1940) 38 Cal.App.2d 261, 266; Little v. Smith (1920) 47 Cal.App. 8, 12,
21 15). A grantee takes title to the property subject to all deeds of trust and other encumbrances,
22 which means that the property may be sold on foreclosure of that deed of trust if the debt is not
23 paid, even though the original debtor no longer owns the property. (See Nguyen, supra).
24 Foreclosure of the Property pursuant to the DOT is proper even when it is Plaintiffs who now
25 hold the Property’s title. Thus, there is no basis to challenge the NOD. Accordingly, Plaintiffs’
26 claim fails. It is noteworthy that, to the extent Plaintiffs want a payoff demand for the DOT to
27 determine the amounts owed thereunder, such a request does not require a lawsuit or discovery
28 – nor is it a proper basis for a “Cancellation of Foreclosure” action.
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 Similarly, the elements of a wrongful foreclosure cause of action are: (1) the trustee or
2 mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to
3 a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not
4 always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or
5 mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured
6 indebtedness. (See Sciarratta v. US Bank, N.A. (2016) 247 Cal.App.4th 552, 561-562). There
7 are no facts establishing any illegal, fraudulent, or willfully oppressive conduct of defendants in
8 this action. Furthermore, there has been no tender of the debt owed under the DOT. Accordingly,
9 Plaintiffs’ claim for Cancellation of Sale fails.
10 Plaintiffs argue in their Opposition that Defendants, in response to Plaintiffs’ Requests
11 for Special Interrogatories and Requests for Admission, only responded with “boilerplate
12 objections” and no sufficient response (See Opposition, pg. 6). This argument is outside the
13 scope of the SAC, and should not be considered by the Court. Furthermore, such an argument
14 is irrelevant at the current stage of litigation. However, to address Plaintiffs’ contention regarding
15 objections to their discovery requests, Defendants could not respond to such requests as they
16 were vague, compound, unintelligible, requested information that would violate rights of privacy
17 as to financial information (i.e. no Notice of Consumer was provided to Dizon, the actual
18 borrower on the loan), and/or that Defendants did not have the requisite personal knowledge to
19 respond appropriately.
20 Lastly, Plaintiffs request for a temporary restraining order or preliminary injunction is
21 now moot, as the property was sold at a Trustee’s Sale on February 28, 2024. (See Opposition,
22 pg. 6).
23 C. Plaintiffs’ Third Claim for Quiet Title Fails
24 Plaintiffs’ third cause of action is for Quiet Title, wherein they request the Court to quiet
25 title to the Subject Property, free and clear of any other interests of the Defendants. (See SAC
26 ¶44).
27 A complaint to quiet title must be verified and include: (1) a description of the property;
28 (2) the title of the plaintiff and the basis of the title; (3) the adverse claims to the title; (4) the
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 date as of which the determination is sought; and (5) a prayer for the determination of the title
2 of the plaintiff. (Code Civ. Proc., § 761.020). The rules of equity do not allow a plaintiff to quiet
3 title in his/her name without repaying the borrowed money used to purchase the property. (See
4 Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at *12).
5 As stated in the Demurrer to the SAC, which Plaintiffs point out in their Opposition,
6 Defendants do not dispute that Plaintiffs are the legal title owners to the Property1 – but that it is
7 clearly subject to the DOT held by Defendants. Furthermore, Plaintiffs’ quiet title action is
8 improper, as the Court held previously, ““[a] court will not give equitable relief to a plaintiff
9 unless the plaintiff acknowledges, or provides for, the equitable claims of the adverse party
10 growing out of the controversy or connected with the same subject matter. Accordingly, a
11 plaintiff seeking to quiet title might have to plead an offer to pay taxes or a mortgage debt.” (5
12 Witkin, Cal. Procedure (6th ed. 2023) Pleading, § 669.) Whereas here the FAC admits the
13 existence of a lien on the Property and does not directly challenge its validity, the Cagangs are
14 required to allege an offer of equity—that is, that they tendered the outstanding debt. (See Lueras
15 v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86.) The FAC does not allege a
16 tender.” (Order on Demurrer to FAC, pg 5). Plaintiffs do not argue in their SAC or Opposition
17 that they have made any such tender. Accordingly, they cannot cure the defects to their claim,
18 and the instant demurrer should be sustained without leave to amend.
19 D. Plaintiffs’ Fourth Claim for Declaratory Relief Fails
20 Plaintiffs’ fourth cause of action is for Declaratory Relief. Plaintiffs appear to allege that,
21 prior to the subject 2006 DOT with Dizon as borrower, Plaintiffs were grantors of a different
22 deed of trust. (Opposition, pg 9). However, Plaintiffs do not establish that Defendants have any
23 interest in a prior deed of trust. Thus, there is no basis for a court to determine the rights and
24 interests in a deed of trust to which Defendants are not a party.
25 Plaintiffs claim that it is irrelevant for Defendants to have pointed out that Plaintiffs failed
26 to establish that the DOT is paid in full when determining if declaratory relief is proper (See
27
28 1
Plaintiffs argue that the property was sold to a third party on 2/28/24, therefore it appears they are no longer
legal title owner. (Opposition, pg 6).
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 Opposition, pg. 9). However, Plaintiffs are misconstruing Defendants’ arguments, as well as the
2 law stated in the Court’s ruling on Demurrer to FAC. Because Plaintiffs had failed to establish
3 that the Loan secured by the DOT had been paid in full, as well as that the Assignments of the
4 DOT and/or NOD were fraudulent or void, Plaintiffs fail to present the existence of a
5 controversy, as it then cannot be disputed that Defendants hold the DOT and that the DOT is an
6 encumbrance upon the Subject Property.
7 Rather, as set forth in the DOT attached as Exhibit 1 to the RJN, the subject DOT
8 identifies Dizon as the borrower. Plaintiffs have admitted that Dizon was used to obtain the loan,
9 and in their own words, have referred to Dizon as a “straw borrower.”(See Opposition, pg. 5)
10 Seventeen years later, Dizon appears to have divorced their son, and now Plaintiffs bring this
11 action for Declaratory Relief requesting that the Court determine the rights and interests of the
12 parties in relation to the subject DOT and Property. However, such a determination is not
13 appropriate or necessary. Plaintiffs contend that they currently hold title to the Property, and as
14 discussed supra, title is subject to the liens and encumbrances thereon – including the DOT in
15 Dizon’s name. (See Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438-439 (a party takes title
16 subject to all liens and encumbrances thereon, unless those liens are paid in full)). Thus, while
17 Plaintiffs hold title to the Property, they take title subject to the DOT. This is not in dispute, as
18 Plaintiffs admit that the DOT remains on title and is unpaid. Accordingly, Plaintiffs’ claim for
19 declaratory relief is not proper and the demurrer thereto should be sustained.
20 Additionally, an action for declaratory relief will not l determine an issue which is
21 already the subject of an existing claim. (See California Ins. Guarantee Ass'n v. Sup. Ct.
22 (1991) 231 Cal.App.3d 1617, 1623). “The declaratory relief statute should not be used for the
23 purpose of anticipating and determining issues which can be determined in the main
24 action. The object of the statute is to afford a new form of relief where needed and not to
25 furnish a litigant with a second cause of action for the determination of identical issues.” (Id. at
26 1624; citing General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 470). Here, the
27 declaratory relief claim is wholly derivative of the substantive law claims already asserted
28 elsewhere in the FAC. It adds nothing to the pleading and fails just as the rest of the deficient
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
1 substantive claims. Thus, a declaration of rights by this Court is neither necessary nor proper.
2 Accordingly, the Demurrer should be sustained without leave to amend for the declaratory
3 relief cause of action.
4 Albeit unclear, it appears that Plaintiffs may be challenging the Assignment of the DOT
5 (See Opposition, pg. 9). However, in the wrongful foreclosure context, a borrower only has
6 standing to challenge an assignment that is void, but lacks standing to challenge an assignment
7 that is merely voidable. (See Yvanova v. New Century Mortgage Corp., (2016) 62 Cal.4th 919,
8 939-940; see also, Morris v. JPMorgan Chase Bank, NA, (2016) 245 Cal.App.4th 808). In this
9 case, Plaintiffs have not pled facts establishing that the Assignment is void, versus merely
10 voidable. Furthermore, Plaintiffs are not borrowers under the subject DOT. Thus, they do not
11 have standing to challenge the various assignments of the DOT, which are reflected on title to
12 the Property. (RJN, 2-4).
13 E. Plaintiffs’ Fifth Claim for Accounting Fails
14 Plaintiffs do not argue in their Opposition that Defendants owe them money, instead they
15 admit that they stopped making payments on the subject mortgage loan in 2019. (See Oppo, pg.
16 10). Accordingly, Plaintiffs’ accounting claim fails because they have not alleged that a balance
17 is due from SPS or the Trust to Plaintiffs. (See, St. James Church of Christ Holiness v. Superior
18 Court (1955) 135 Cal.App.2d 352, 359). In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal.
19 2009) 658 F.Supp.2d 1002, 1020, the Court stated:
In her counter-complaint, Ms. Hillery asserts a claim for accounting
20
in order to establish what money, if any, she owes to Consumer
21 Solutions. The problem for Ms. Hillery is that "[a] cause of action for
an accounting requires a showing . . . that some balance is due the
22 plaintiff that can only be ascertained by an accounting." Teselle v.
McLoughlin, 173 Cal. App. 4th 156, 178, 92 Cal. Rptr. 3d 696 (2009)
23
(emphasis added). Because Ms. Hillery's claim is not asking how
24 much Consumer Solutions owes her, the claim must be dismissed with
prejudice. See Hafiz v. Aurora Loan Services, No. C 09-1963 SI, 2009
25 U.S. Dist. LEXIS 60003, 2009 WL 2029800, at *2 (N.D. Cal. Jul. 14,
26 2009) (dismissing claim for accounting because "[p]laintiff does not
cite any authority for the proposition that she can maintain a claim for
27 an accounting to determine how much money she owes defendant.")
28
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
Thus, a requisite element of their Accounting claim is that Defendants owe them money, which
1
they cannot allege. Accordingly, Defendants’ Demurrer should be sustained without leave to
2
amend.
3
F. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails
4
Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein
5 they seek injunction against Defendants’ foreclosure of the Property. An injunction is a type of
6 equitable remedy that turns on there being a wrong, often in the form of irreparable injury, and
7 a relief therefor. (See generally Code Civ. Proc., § 526). The concept of irreparable injury
8 authorizes the interposition of a court of equity by way of injunction. (See Wind v. Herbert
9 (1960) 186 Cal.App.2d 276, 285). A grantee takes title to the property subject to all deeds of
10 trust and other encumbrances, which means that the property may be sold on foreclosure of
that deed of trust if the debt is not paid, even though the property is no longer owned by the
11
original debtor. (See Nguyen, supra). Furthermore, request for injunctive relief fails because
12
injunctive relief is not a viable, independent cause of action in California but rather a remedy.
13
(See Guesses v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187; Shell Oil v. Richter,
14
(1942) 52 Cal.App.2d 164, 166). Accordingly, the Demurrer should be sustained without leave
15 to amend for the injunctive relief cause of action.
16
III. CONCLUSION
17
For the reasons set forth herein, Defendants respectfully request their Demurrer to the
18
First Amended Complaint be sustained in its entirety without leave to amend.
19 WRIGHT, FINLAY & ZAK, LLP
20
21
22 Dated: March 27, 2024 By:
23 Sabaa Ghomashchi, Esq
Cathy Robinson, Esq.
24 Attorneys for Defendants, SELECT
PORTFOLIO SERVICING, INC; and
25 U.S. BANK, NATIONAL
26 ASSOCIATION AS TRUSTEE FOR
WAMU MORTGAGE PASS THROUGH
27 CERTIFICATE FOR WMALT SERIES
2007-OA3
28
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
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
4 Court, Suite 200, Newport Beach, California 92660. I am readily familiar with the practices of
Wright, Finlay & Zak, LLP, for collection and processing of correspondence for mailing with
5 the United States Postal Service. Such correspondence is deposited with the United States
6 Postal Service the same day in the ordinary course of business. I am aware that on motion of
party served, service is presumed invalid if postal cancellation date or postage meter date is
7 more than one day after date of deposit for mailing in affidavit.
8 On March 27, 2024, I served the within DEFENDANTS’ REPLY IN SUPPORT
OF DEMURRER TO SECOND AMENDED COMPLAINT
9 on all interested parties in this action as follows:
10
[X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s)
11 addressed as follows:
12 Ceferino Cagang
13 Erlinda Cagang
54 Oceanside Drive
14 Daly City, CA 94015
Tel; 650-892-9447
15 Email: reginacagang@gmail.com
16 [Plaintiffs Pro Per]
17 [ ] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this
date following ordinary business practices.
18
[ ] (BY ELECTRONIC SERVICE) (CCP § 1010.6(a)(4)) , I caused the document(s) to
19 be transmitted electronically from ibrown@wrightlegal.net to the e-mail address(es)
indicated herein. To the best my knowledge, the transmission was reported as
20
complete, and no error was reported that the electronic transmission was not completed.
21 [X ] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true
22 and correct copies thereof enclosed in a package designated by Federal Express
Overnight with the delivery fees provided for.
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 March 27, 2024, at Newport Beach,
25 California.
26
27
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DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND
AMENDED COMPLAINT
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1 WRIGHT, FINLAY & ZAK, LLP Cathy K. Robinson, Esq., SBN 226275 2 Sabaa Ghomashchi, Esq., SBN 352285 3 4665 MacArthur Court, Suite 200 Newport Beach, CA 92660 4 Tel: (949) 477-5050; Fax: (949) 608-9142 Email: crobinson@wrightlegal.net; 5 6 Attorneys for Defendants, SELECT PORTFOLIO SERVICING, INC; and U.S. BANK, NATIONAL ASSOCIATION 7 AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT 8 SERIES 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. 13 3 14 Plaintiffs, DEFENDANTS’ REPLY IN SUPPORT 15 OF DEMURRER TO SECOND 16 vs. AMENDED COMPLAINT 17 SHARON DIZON; SELECT PORTFOLIO SERVICING INC.; U.S. BANK NA, AS 18 TRUSTEE FOR WAMU PASS THROUGH 19 CERT.SERIES 2007-OA3; CLEAR Hearing RECONVEYANCE CORPORATON; DOES 1- Date: April 4, 2024 20 10, inclusive, Time: 2:00 pm Dept.: 3 21 Defendants. 22 23 Complaint filed: February 21, 2023 FAC filed: October 3, 2023 24 SAC filed: January 18, 2024 25 26 27 TO THE HONORABLE COURT ALL PARTIES AND THEIR ATTORNEYS OF 28 RECORD, IF ANY: -1- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT PLEASE TAKE NOTICE that Defendants SELECT PORTFOLIO SERVICING, INC 1 (“SPS”) and U.S. BANK, NATIONAL ASSOCIATION AS TRUSTEE FOR WAMU 2 MORTGAGE PASS THROUGH CERTIFICATE FOR WMALT SERIES 2007-OA3 (the 3 “Trust”) (collectively “Defendants”) hereby submit this Memorandum of Points and 4 Authorities in response to Opposition of Plaintiffs CEFERINO CAGANG and ERLINDA 5 CAGANG (“Plaintiffs”) to Demurrer to the Second Amended Complaint (“SAC”) as follows: 6 MEMORANDUM OF POINTS AND AUTHORITIES 7 I. INTRODUCTION 8 Over seventeen (17) years ago, in November 2006, Plaintiffs conveyed title to the subject 9 real property to their daughter in-law, Defendant Sharon Dizon (“Dizon”), so that Dizon could 10 obtain a loan in the amount of $648,000 secured by a Deed of Trust on the property. Thus, Plaintiffs admit that Dizon was a straw-borrower for the loan. (SAC ¶15). In their Opposition, 11 Plaintiffs argue that “they were stripped of lien interest due to the fraudulent misrepresentations 12 of their children and Sharon Dizon.” (Oppo, pg 2). Plaintiffs do not allege any fraud on behalf 13 of SPS or the Trust. 14 Plaintiffs appear to contend, albeit vague, that they were original borrowers on the Loan. 15 (Oppo, pg 2). However, as set forth in the Deed of Trust, which is attached as Exhibit to the 16 RJN filed concurrently with the Demurrer, Dizon was the only borrower. (RJN, Exh 1). Thus, 17 Plaintiffs’ claims are nonsensical. 18 Simply put, Plaintiffs used Dizon to obtain financing for the Property, and Dizon (not 19 Plaintiffs) are Defendants’ borrower. It is of no consequence that Plaintiffs and Dizon’s 20 relationship turned sour, and Plaintiffs have no relationship with SPS or the Trust. Thus, there claims against Defendants cannot survive demurrer. 21 II. ARGUMENT 22 A. Plaintiffs’ First Claim for Reversal of Deed of Trust and/or Assumption of Loan 23 Fails 24 Plaintiffs’ first cause of action is for “Reversal of Deed of Trust and/or Assumption of 25 Loan,” wherein they allege that they, not Dizon, should be borrower(s) on the Loan, and that the 26 DOT is void because Dizon acquired her interest through fraudulent means (See Opposition, pg.3-5). However, Plaintiffs do not challenge the validity of the DOT or Loan, and in fact admit 27 that they knew (over seventeen years ago) that Dizon was obtaining the Loan. (SAC ¶15.). 28 Moreover, as this Court ruled in sustaining the demurrer to the First Amended Complaint -2- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT (“FAC”), “the FAC alleges no basis to assume the loan. A transferee of encumbered real property 1 ‘takes title to the property subject to all deeds of trust and other encumbrances…this means that 2 the property may be sold on foreclosure of that deed of trust if the debt is not paid, even though 3 property is no longer owned by the original debtor.’ Nguyen v. Calhoun (2003) 105 Cal.App.4th 4 428, 438-439.” 5 Plaintiffs failed to set forth any facts establishing any basis to assume the loan, and 6 instead just concludes “Plaintiffs also now seeks a loan assumption of the corresponding Deed 7 of Trust…” (SAC, 31). Just as they did in their FAC, which this Court already found deficient, 8 Plaintiffs argue in their Opposition that Dizon was added onto the transaction “as an additional 9 borrower on the said deed of trust.” (Oppo, pg. 3). However, as reflected in the DOT, the only 10 borrower identified is Dizon. (RJN, 1). Thus, Plaintiffs argument is nonsensical and contradicted by documents which this Court may take judicial notice of. 11 Plaintiffs claim in their Opposition to Defendants’ Demurrer (“Opposition”) that 12 Defendants’ statute of limitations arguments against their claims of fraud and cancellation of 13 instruments claims do not have “merit whatsoever” and “legal standing” because they are not 14 named in the November 22, 2006 Deed of Trust (“DOT”) as parties to the DOT, and that the 15 DOT “pertains to lender Loan Center of America.” (Opposition, pg. 4) Plaintiffs’ claim is 16 nonsensical because, since SPS and the Trust are named as Defendants in this suit, Defendants 17 have legal standing to argue a statute of limitations defense. It appears that Plaintiffs are 18 misunderstanding the arguments raised in Demurrer, which is that any claims by Plaintiffs to 19 void the DOT are time-barred, as they should have been brought within 3 years. Ankoanda v. 20 Walker-Smith (1996) 44 Cal.App.4th 610, 615. Since the DOT was executed and recorded in 2006, Plaintiffs deadline to pursue this claim was November 2009. Thus, their claims are time 21 barred. 22 Plaintiffs then challenge the validity of the recorded Assignments referenced in 23 Defendants’ Request for Judicial Notice in support of Defendants’ Demurrer (“RJN”) 24 (Opposition pg. 4-5). Plaintiffs claim that the Assignments, which led to Defendants interest in 25 the Subject Property, are subject “to proof.” (Id.). However, it is uncertain what Plaintiffs mean 26 by this, as it is vague and unintelligible. If Plaintiffs are claiming that Defendants need to prove 27 that they have come into lawful possession of their interest in the Subject Property, then the 28 Assignments referenced in the RJN are such proof, as they point to the existence of public records -3- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT indicating how Defendants came to hold their lien interest. If Plaintiffs are arguing that 1 Defendants need to “prove” that the Assignments are valid, then that is the purpose of the notary 2 public’s signature, the recording, and the signed declarations within each Assignment, all serving 3 to authenticate the Assignments. 4 Plaintiffs cite to Love v. Wolf (1964) 226 Cal.App.2d 378, 382, and argues that the 5 Assignments do not prove that Defendants are the legal holders of the DOT, as courts can only 6 take judicial notice of the existence of a document, but not the truth of the matters therein stated 7 (Opposition pg. 4). 8 However, courts may still take judicial notice of the legal effect, dates, and parties of 9 recorded documents. (See Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 10 152 Cal.App.4th 1106, 1117). “A court may take judicial notice of something that cannot reasonably be controverted, even if it negates an express allegation of the pleading. This includes 11 recorded deeds.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 12 Cal.App.4th 1106, 1108 (finding that the effect of an assignment of deed of trust “could not be 13 clearer.”), “In Poseidon, for example, the court affirmed the trial court's taking judicial notice, 14 in sustaining a demurrer, of the parties, dates, and legal consequences of a series of recorded 15 documents relating to a real estate transaction.” (See Id.). Here, when reviewing the Assignments 16 referenced in the RJN, it is clear from their face what the legal effect is. As stated above, this 17 Court may take judicial notice of the dates and parties referenced in such assignments. The clear 18 legal effect from these Assignments is that the lienholder of the DOT has transferred from one 19 entity to another. Accordingly, the arguments raised by Plaintiffs’ in opposition to the demurrer 20 do not set forth a proper basis to overrule demurrer. 21 Next Plaintiffs, just as they did via their prior opposition to demurrer, attempt to argue 22 that “novation is very much a reasonable remedy….” (See Opposition, pg. 4). However, as 23 explained in the Demurrer, as well as this Court in its ruling on the Demurrer to the FAC, “the 24 FAC does not allege that the Cagangs agreed to assume the debt—an assumption agreement 25 must be in writing or contained in a deed signed by the Cagangs. (Cornelison v. Kornbluth (1975) 26 15 Cal.3d 590, 596–597.)” (Order on Defendants’ Demurrer to FAC, pg 3). The Court further 27 noted that: “And, furthermore, assumption of the loan would be unlikely to provide any practical 28 relief to the Cagangs. Even without assumption, there is no allegation that the Cagangs are -4- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 presently legally or equitably prohibited from tendering payment of the debt secured by Dizon’s 2 deed of trust and thereby preventing foreclosure. (See Nguyen v. Calhoun (2003) 105 3 Cal.App.4th 428, 439.)” (Order on Defendants’ Demurrer to FAC, pg 3-4). 4 Defendants are not obligated to provide a novation, an assumption, a loan modification, 5 or other foreclosure alternatives to Plaintiffs—merely to assess Plaintiffs’ financial situation and 6 to determine if such alternatives are available. As Plaintiffs mention in their Opposition, they 7 spoke to Defendants’ Counsel (Mr. Sabaa Ghomashchi) regarding potential foreclosure 8 alternatives. However, during this conversation, which took place during the Meet & Confer 9 conference, Mr. Ghomashchi advised Plaintiff CEFERINO CAGANG that he will discuss 10 potential alternatives with Plaintiffs to see if they qualify but that he can make no assurances. As 11 a result of such discussions with Defendants, Mr. Ghomashchi then advised Plaintiffs that, upon 12 review of Plaintiffs’ financial situation, it has been determined that Plaintiffs do not qualify for 13 an assumption or a novation. There was no indication nor promise made that Plaintiffs would 14 receive such alternatives—only that it would be assessed if they qualify for any. Moreover, for 15 purposes of demurrer, the Court only looks at the allegations in the SAC, and Plaintiffs fail to 16 allege any facts establishing that the parties entered into a written and signed assumption 17 agreement. Thus, their argument fails. Cornelison v. Kornbluth (1975) 15 Cal.3d 590, 596–597. 18 B. Plaintiffs’ Second Claim for Cancellation of Foreclosure Actions Fails 19 As stated earlier, Plaintiffs’ cause of action or “cancellation of foreclosure” fails as a 20 matter of law, as it is time-barred by the three-year statute of limitations imposed by Section 21 338(d), as Plaintiffs alleges the same facts in this cause of action as they do in their claims of 22 fraud. 23 Plaintiffs state in their Opposition that Defendants fail to state the grounds upon which 24 their Demurrer against Plaintiffs’ cause of action for Cancellation of Foreclosure should be 25 sustained (See Opposition pg. 6). However, contrary to Plaintiffs’ argument, the demurrer sets 26 forth that (1) Plaintiffs do not allege facts to support their claim of fraud in their attempt to void 27 the DOT; (2) Plaintiffs’ contributions to the mortgage payments were paid to Dizon, not to the 28 Defendants; and (3) Plaintiffs’ arguments contradict each other, as they cannot claim that the -5- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 DOT is void due to fraud, then argue that they made payments to this fraudulent DOT for 2 numerous years—the latter argument would validate the DOT. (See Demurrer, generally; See 3 SAC, generally). 4 Plaintiffs claim that Defendants mentioned that Plaintiffs were not actually in default, as 5 they had contributed to mortgage payments that “has to be accounted for.” (See Opposition, pg. 6 6). Plaintiffs then cite their First Amended Complaint, which has since been demurred to 7 successfully by Defendants (Id.). However, this Court already found said argument legally 8 deficient, when it sustained the demurrer to the FAC: 9 “The FAC does not allege that Dizon is not in default on the loan, however. Nor does it 10 allege that the Cagangs or Dizon have applied for a loan modification or engaged in any 11 other conduct triggering statutory foreclosure protections. And the allegation that the 12 Cagangs contributed to payments on the loan—payments that are admitted to be less than 13 the sum due—does not provide any basis in law or equity to preclude the Lenders from 14 exercising their rights given by the deed of trust, the validity of which is not challenged 15 by the FAC.” 16 (Order on Defendants’ Demurrer to FAC, pg 4). Despite the Court’s prior ruling, Plaintiffs repeat 17 these same claims in their SAC and Opposition to Demurrer to SAC. 18 To the extent that Plaintiffs seek cancellation of the NOD, or foreclosure activity, they 19 must allege facts affecting the validity and invalidity of the instrument that is attacked. (See 20 Kroeker v. Hurlbert (1940) 38 Cal.App.2d 261, 266; Little v. Smith (1920) 47 Cal.App. 8, 12, 21 15). A grantee takes title to the property subject to all deeds of trust and other encumbrances, 22 which means that the property may be sold on foreclosure of that deed of trust if the debt is not 23 paid, even though the original debtor no longer owns the property. (See Nguyen, supra). 24 Foreclosure of the Property pursuant to the DOT is proper even when it is Plaintiffs who now 25 hold the Property’s title. Thus, there is no basis to challenge the NOD. Accordingly, Plaintiffs’ 26 claim fails. It is noteworthy that, to the extent Plaintiffs want a payoff demand for the DOT to 27 determine the amounts owed thereunder, such a request does not require a lawsuit or discovery 28 – nor is it a proper basis for a “Cancellation of Foreclosure” action. -6- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 Similarly, the elements of a wrongful foreclosure cause of action are: (1) the trustee or 2 mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to 3 a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not 4 always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or 5 mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured 6 indebtedness. (See Sciarratta v. US Bank, N.A. (2016) 247 Cal.App.4th 552, 561-562). There 7 are no facts establishing any illegal, fraudulent, or willfully oppressive conduct of defendants in 8 this action. Furthermore, there has been no tender of the debt owed under the DOT. Accordingly, 9 Plaintiffs’ claim for Cancellation of Sale fails. 10 Plaintiffs argue in their Opposition that Defendants, in response to Plaintiffs’ Requests 11 for Special Interrogatories and Requests for Admission, only responded with “boilerplate 12 objections” and no sufficient response (See Opposition, pg. 6). This argument is outside the 13 scope of the SAC, and should not be considered by the Court. Furthermore, such an argument 14 is irrelevant at the current stage of litigation. However, to address Plaintiffs’ contention regarding 15 objections to their discovery requests, Defendants could not respond to such requests as they 16 were vague, compound, unintelligible, requested information that would violate rights of privacy 17 as to financial information (i.e. no Notice of Consumer was provided to Dizon, the actual 18 borrower on the loan), and/or that Defendants did not have the requisite personal knowledge to 19 respond appropriately. 20 Lastly, Plaintiffs request for a temporary restraining order or preliminary injunction is 21 now moot, as the property was sold at a Trustee’s Sale on February 28, 2024. (See Opposition, 22 pg. 6). 23 C. Plaintiffs’ Third Claim for Quiet Title Fails 24 Plaintiffs’ third cause of action is for Quiet Title, wherein they request the Court to quiet 25 title to the Subject Property, free and clear of any other interests of the Defendants. (See SAC 26 ¶44). 27 A complaint to quiet title must be verified and include: (1) a description of the property; 28 (2) the title of the plaintiff and the basis of the title; (3) the adverse claims to the title; (4) the -7- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 date as of which the determination is sought; and (5) a prayer for the determination of the title 2 of the plaintiff. (Code Civ. Proc., § 761.020). The rules of equity do not allow a plaintiff to quiet 3 title in his/her name without repaying the borrowed money used to purchase the property. (See 4 Gaitan v. Mortgage Elec. Reg. Sys., Inc. (C.D. Cal., 2009) 2009 WL 3244729, at *12). 5 As stated in the Demurrer to the SAC, which Plaintiffs point out in their Opposition, 6 Defendants do not dispute that Plaintiffs are the legal title owners to the Property1 – but that it is 7 clearly subject to the DOT held by Defendants. Furthermore, Plaintiffs’ quiet title action is 8 improper, as the Court held previously, ““[a] court will not give equitable relief to a plaintiff 9 unless the plaintiff acknowledges, or provides for, the equitable claims of the adverse party 10 growing out of the controversy or connected with the same subject matter. Accordingly, a 11 plaintiff seeking to quiet title might have to plead an offer to pay taxes or a mortgage debt.” (5 12 Witkin, Cal. Procedure (6th ed. 2023) Pleading, § 669.) Whereas here the FAC admits the 13 existence of a lien on the Property and does not directly challenge its validity, the Cagangs are 14 required to allege an offer of equity—that is, that they tendered the outstanding debt. (See Lueras 15 v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86.) The FAC does not allege a 16 tender.” (Order on Demurrer to FAC, pg 5). Plaintiffs do not argue in their SAC or Opposition 17 that they have made any such tender. Accordingly, they cannot cure the defects to their claim, 18 and the instant demurrer should be sustained without leave to amend. 19 D. Plaintiffs’ Fourth Claim for Declaratory Relief Fails 20 Plaintiffs’ fourth cause of action is for Declaratory Relief. Plaintiffs appear to allege that, 21 prior to the subject 2006 DOT with Dizon as borrower, Plaintiffs were grantors of a different 22 deed of trust. (Opposition, pg 9). However, Plaintiffs do not establish that Defendants have any 23 interest in a prior deed of trust. Thus, there is no basis for a court to determine the rights and 24 interests in a deed of trust to which Defendants are not a party. 25 Plaintiffs claim that it is irrelevant for Defendants to have pointed out that Plaintiffs failed 26 to establish that the DOT is paid in full when determining if declaratory relief is proper (See 27 28 1 Plaintiffs argue that the property was sold to a third party on 2/28/24, therefore it appears they are no longer legal title owner. (Opposition, pg 6). -8- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 Opposition, pg. 9). However, Plaintiffs are misconstruing Defendants’ arguments, as well as the 2 law stated in the Court’s ruling on Demurrer to FAC. Because Plaintiffs had failed to establish 3 that the Loan secured by the DOT had been paid in full, as well as that the Assignments of the 4 DOT and/or NOD were fraudulent or void, Plaintiffs fail to present the existence of a 5 controversy, as it then cannot be disputed that Defendants hold the DOT and that the DOT is an 6 encumbrance upon the Subject Property. 7 Rather, as set forth in the DOT attached as Exhibit 1 to the RJN, the subject DOT 8 identifies Dizon as the borrower. Plaintiffs have admitted that Dizon was used to obtain the loan, 9 and in their own words, have referred to Dizon as a “straw borrower.”(See Opposition, pg. 5) 10 Seventeen years later, Dizon appears to have divorced their son, and now Plaintiffs bring this 11 action for Declaratory Relief requesting that the Court determine the rights and interests of the 12 parties in relation to the subject DOT and Property. However, such a determination is not 13 appropriate or necessary. Plaintiffs contend that they currently hold title to the Property, and as 14 discussed supra, title is subject to the liens and encumbrances thereon – including the DOT in 15 Dizon’s name. (See Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 438-439 (a party takes title 16 subject to all liens and encumbrances thereon, unless those liens are paid in full)). Thus, while 17 Plaintiffs hold title to the Property, they take title subject to the DOT. This is not in dispute, as 18 Plaintiffs admit that the DOT remains on title and is unpaid. Accordingly, Plaintiffs’ claim for 19 declaratory relief is not proper and the demurrer thereto should be sustained. 20 Additionally, an action for declaratory relief will not l determine an issue which is 21 already the subject of an existing claim. (See California Ins. Guarantee Ass'n v. Sup. Ct. 22 (1991) 231 Cal.App.3d 1617, 1623). “The declaratory relief statute should not be used for the 23 purpose of anticipating and determining issues which can be determined in the main 24 action. The object of the statute is to afford a new form of relief where needed and not to 25 furnish a litigant with a second cause of action for the determination of identical issues.” (Id. at 26 1624; citing General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 470). Here, the 27 declaratory relief claim is wholly derivative of the substantive law claims already asserted 28 elsewhere in the FAC. It adds nothing to the pleading and fails just as the rest of the deficient -9- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 1 substantive claims. Thus, a declaration of rights by this Court is neither necessary nor proper. 2 Accordingly, the Demurrer should be sustained without leave to amend for the declaratory 3 relief cause of action. 4 Albeit unclear, it appears that Plaintiffs may be challenging the Assignment of the DOT 5 (See Opposition, pg. 9). However, in the wrongful foreclosure context, a borrower only has 6 standing to challenge an assignment that is void, but lacks standing to challenge an assignment 7 that is merely voidable. (See Yvanova v. New Century Mortgage Corp., (2016) 62 Cal.4th 919, 8 939-940; see also, Morris v. JPMorgan Chase Bank, NA, (2016) 245 Cal.App.4th 808). In this 9 case, Plaintiffs have not pled facts establishing that the Assignment is void, versus merely 10 voidable. Furthermore, Plaintiffs are not borrowers under the subject DOT. Thus, they do not 11 have standing to challenge the various assignments of the DOT, which are reflected on title to 12 the Property. (RJN, 2-4). 13 E. Plaintiffs’ Fifth Claim for Accounting Fails 14 Plaintiffs do not argue in their Opposition that Defendants owe them money, instead they 15 admit that they stopped making payments on the subject mortgage loan in 2019. (See Oppo, pg. 16 10). Accordingly, Plaintiffs’ accounting claim fails because they have not alleged that a balance 17 is due from SPS or the Trust to Plaintiffs. (See, St. James Church of Christ Holiness v. Superior 18 Court (1955) 135 Cal.App.2d 352, 359). In Consumer Solutions Reo, LLC v. Hillery (N.D.Cal. 19 2009) 658 F.Supp.2d 1002, 1020, the Court stated: In her counter-complaint, Ms. Hillery asserts a claim for accounting 20 in order to establish what money, if any, she owes to Consumer 21 Solutions. The problem for Ms. Hillery is that "[a] cause of action for an accounting requires a showing . . . that some balance is due the 22 plaintiff that can only be ascertained by an accounting." Teselle v. McLoughlin, 173 Cal. App. 4th 156, 178, 92 Cal. Rptr. 3d 696 (2009) 23 (emphasis added). Because Ms. Hillery's claim is not asking how 24 much Consumer Solutions owes her, the claim must be dismissed with prejudice. See Hafiz v. Aurora Loan Services, No. C 09-1963 SI, 2009 25 U.S. Dist. LEXIS 60003, 2009 WL 2029800, at *2 (N.D. Cal. Jul. 14, 26 2009) (dismissing claim for accounting because "[p]laintiff does not cite any authority for the proposition that she can maintain a claim for 27 an accounting to determine how much money she owes defendant.") 28 -10- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT Thus, a requisite element of their Accounting claim is that Defendants owe them money, which 1 they cannot allege. Accordingly, Defendants’ Demurrer should be sustained without leave to 2 amend. 3 F. Plaintiffs’ Sixth Claim for Preliminary and Permanent Injunction Fails 4 Plaintiffs’ sixth cause of action is for Preliminary and Permanent Injunction, wherein 5 they seek injunction against Defendants’ foreclosure of the Property. An injunction is a type of 6 equitable remedy that turns on there being a wrong, often in the form of irreparable injury, and 7 a relief therefor. (See generally Code Civ. Proc., § 526). The concept of irreparable injury 8 authorizes the interposition of a court of equity by way of injunction. (See Wind v. Herbert 9 (1960) 186 Cal.App.2d 276, 285). A grantee takes title to the property subject to all deeds of 10 trust and other encumbrances, which means that the property may be sold on foreclosure of that deed of trust if the debt is not paid, even though the property is no longer owned by the 11 original debtor. (See Nguyen, supra). Furthermore, request for injunctive relief fails because 12 injunctive relief is not a viable, independent cause of action in California but rather a remedy. 13 (See Guesses v. Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187; Shell Oil v. Richter, 14 (1942) 52 Cal.App.2d 164, 166). Accordingly, the Demurrer should be sustained without leave 15 to amend for the injunctive relief cause of action. 16 III. CONCLUSION 17 For the reasons set forth herein, Defendants respectfully request their Demurrer to the 18 First Amended Complaint be sustained in its entirety without leave to amend. 19 WRIGHT, FINLAY & ZAK, LLP 20 21 22 Dated: March 27, 2024 By: 23 Sabaa Ghomashchi, Esq Cathy Robinson, Esq. 24 Attorneys for Defendants, SELECT PORTFOLIO SERVICING, INC; and 25 U.S. BANK, NATIONAL 26 ASSOCIATION AS TRUSTEE FOR WAMU MORTGAGE PASS THROUGH 27 CERTIFICATE FOR WMALT SERIES 2007-OA3 28 -11- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND 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 4 Court, Suite 200, Newport Beach, California 92660. I am readily familiar with the practices of Wright, Finlay & Zak, LLP, for collection and processing of correspondence for mailing with 5 the United States Postal Service. Such correspondence is deposited with the United States 6 Postal Service the same day in the ordinary course of business. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is 7 more than one day after date of deposit for mailing in affidavit. 8 On March 27, 2024, I served the within DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT 9 on all interested parties in this action as follows: 10 [X ] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) 11 addressed as follows: 12 Ceferino Cagang 13 Erlinda Cagang 54 Oceanside Drive 14 Daly City, CA 94015 Tel; 650-892-9447 15 Email: reginacagang@gmail.com 16 [Plaintiffs Pro Per] 17 [ ] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date following ordinary business practices. 18 [ ] (BY ELECTRONIC SERVICE) (CCP § 1010.6(a)(4)) , I caused the document(s) to 19 be transmitted electronically from ibrown@wrightlegal.net to the e-mail address(es) indicated herein. To the best my knowledge, the transmission was reported as 20 complete, and no error was reported that the electronic transmission was not completed. 21 [X ] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true 22 and correct copies thereof enclosed in a package designated by Federal Express Overnight with the delivery fees provided for. 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 March 27, 2024, at Newport Beach, 25 California. 26 27 28 -12- DEFENDANTS’ REPLY IN SUPPORT OF DEMURRER TO SECOND AMENDED COMPLAINT