Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (2011)121 Cal.Rptr.3d 819, 11 Cal. Daily Op. Serv. 2322, 2011 Daily Journal D.A.R. 2681

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KeyCite Yellow Flag - Negative TreatmentDistinguished by In re Salazar, Bankr.S.D.Cal., April 12, 2011

Synopsis

Background: Borrower brought action against lender,mortgage registry company, and registry company's agentfor wrongful foreclosure and declaratory relief. The SuperiorCourt, San Diego County, No. 37-2009-00090347-CU-OR-CTL, Steven R. Denton, J., sustained demurrer without leaveto amend. Borrower appealed.

Holdings: The Court of Appeal, Irion, J., held that:1 a borrower may not bring an action to determine whetherthe owner of a note has authorized nonjudicial foreclosure;2 mortgage registry company was authorized to initiateforeclosure under deed of trust; and3 borrower could not allege on information and belief thatpurported trustee lacked authorization to initiate foreclosure.

Affirmed.

West Headnotes (8)

1 Mortgages Under trust deed266 Mortgages266IX Foreclosure by Exercise of Power of Sale266k339 Persons Entitled to Execute Power266k341 Under trust deedThe statute authorizing the “trustee, mortgagee,or beneficiary, or any of their authorized agents”to initiate the nonjudicial foreclosure processunder a deed of trust does not authorize theborrower to bring a court action to determinewhether the owner of the note has authorized itsnominee to initiate the foreclosure process. West'sAnn.Cal.Civ.Code § 2924(a)(1).

See Greenwald & Asimov, Cal. Practice Guide:Real Property Transactions (The Rutter Group2010) ¶ 6:535.15 (CAPROP Ch. 6-I); 4 Miller &Starr, Cal. Real Estate (3d ed. 2001) §§ 10:179,10:210; 4 Witkin, Summary of Cal. Law (10th ed.2005) Security Transactions in Real Property, §§164, 165; Cal. Jur. 3d, Deeds of Trust, § 258.

3 Cases that cite this headnote

2 Courts Operation and effect in general106 Courts106II Establishment, Organization, and Procedure106II(K) Opinions106k107 Operation and effect in generalCourt of Appeal may not rely on unpublishedCalifornia cases.

3 Courts Operation and effect in general106 Courts106II Establishment, Organization, and Procedure106II(K) Opinions106k107 Operation and effect in generalThe California Rules of Court do not prohibitcitation to unpublished federal cases, which mayproperly be cited as persuasive, although notbinding, authority.

4 Mortgages Persons Entitled to ExecutePower266 Mortgages266IX Foreclosure by Exercise of Power of Sale266k339 Persons Entitled to Execute Power266k339.1 In generalUnder California law, a private corporation thatadministers a national electronic registry thattracks the transfer of ownership interests andservicing rights in mortgage loans may initiatea foreclosure as the nominee, or agent, of thenoteholder. West's Ann.Cal.Civ.Code § 2924(a)(1).

5 Mortgages Under trust deed266 Mortgages266IX Foreclosure by Exercise of Power of Sale

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266k339 Persons Entitled to Execute Power266k341 Under trust deedProvision in deed of trust stating that mortgageregistry company had the authority to initiate aforeclosure was valid, even if registry companydid not hold a beneficial interest in the deed oftrust, where registry company was designated asnominee for lender and lender's successors andassigns. West's Ann.Cal.Civ.Code § 2924.

2 Cases that cite this headnote

6 Mortgages Under trust deed266 Mortgages266IX Foreclosure by Exercise of Power of Sale266k339 Persons Entitled to Execute Power266k341 Under trust deedBorrower under deed of trust could not allege oninformation and belief that a trustee who initiateda foreclosure proceeding was not actually thetrustee at the time because assignments of thedeed of trust were improperly backdated, wherethe deed of trust designated a mortgage registrycompany as the beneficiary and the lender'snominee, and neither the registry company northe loan servicer had recorded any assignments orprovided any descriptions of assignments.

1 Cases that cite this headnote

7 Pleading Allegations on knowledge, or oninformation and belief302 Pleading302II Declaration, Complaint, Petition, orStatement302k68 Allegations on knowledge, or oninformation and beliefA plaintiff may allege on information and beliefany matters that are not within his personalknowledge, if he has information leading him tobelieve that the allegations are true.

8 Pleading Allegations on knowledge, or oninformation and belief302 Pleading302II Declaration, Complaint, Petition, orStatement

302k68 Allegations on knowledge, or oninformation and beliefA pleading made on information and belief isinsufficient if it merely asserts the facts so allegedwithout alleging such information that leads theplaintiff to believe that the allegations are true.

Attorneys and Law Firms

**821 Gersten Law Group and Ehud Gersten, San Diego,for Plaintiff and Appellant.Severson & Werson, Jan T. Chilton, Philip Barilovits and JonD. Ives, San Francisco, for Defendants and Respondents.

Opinion

IRION, J.

*1150 Jose Gomes appeals from a judgment enteredfollowing the trial court's order sustaining, without leave toamend, a demurrer filed by defendants Countrywide HomeLoans, Inc. (Countrywide); Mortgage Electronic RegistrationSystems, Inc. (MERS); and ReconTrust Company, N.A.(ReconTrust) (collectively “Defendants”).

As we will explain, we conclude that the trial court properlysustained the demurrer without leave to amend.

*1151 I

FACTUAL AND PROCEDURAL BACKGROUND

In February 2004 Gomes borrowed $331,000 from lenderKB Home Mortgage Company to finance the purchase ofreal estate. In connection with that transaction, he executeda promissory note (the Note), which was secured by a deedof trust. The deed of trust identifies KB Home MortgageCompany as the “Lender” and identifies MERS as “actingsolely as a nominee for Lender and Lender's successors andassigns,” and states that “MERS is the beneficiary under this

Security Instrument.” 1

1 Similarly, the deed of trust states: “The beneficiary ofthis Security Instrument is MERS (solely as nomineefor Lender and Lender's successor and assigns) and thesuccessors and assigns of MERS.”

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The role of MERS is central to the issues in this appeal.As case law explains, “MERS is a private corporation thatadministers the MERS System, a national electronic registrythat tracks the transfer of ownership interests and servicingrights in mortgage loans. Through the MERS System,MERS becomes the mortgagee of record for participatingmembers through assignment of the members' interests toMERS. MERS is listed as the grantee in the official recordsmaintained at county register of deeds offices. The lendersretain the promissory notes, as well as the servicing rightsto the mortgages. The lenders can then sell these intereststo investors without having to record the transaction in thepublic record. MERS is compensated for its services throughfees charged to participating MERS members.” (MortgageElec. Registration Sys. v. Nebraska Dept. of Banking and Fin.(2005) 270 Neb. 529, 530, 704 N.W.2d 784, 785.) “A sideeffect of the MERS system is that a transfer of an interest ina mortgage loan between two MERS members is unknown tothose outside the MERS system.” (Jackson v. Mortgage Elec.Registration Sys., Inc. (Minn.2009) 770 N.W.2d 487, 491.)

The deed of trust that Gomes signed states that “Borrower[i.e., Gomes] understands and agrees that MERS holds onlylegal title to the interests granted by Borrower in this SecurityInstrument, but, if necessary to comply with law or custom,MERS (as nominee for Lender and Lender's successors andassigns) has the right: to exercise any or all of those interests,including, but not limited to, the right to foreclose and sell theProperty....”

**822 Gomes defaulted on his loan payments, and he wasmailed a notice of default and election to sell—recorded onMarch 10, 2009—which initiated a nonjudicial foreclosureprocess. The notice of default was sent to Gomes byReconTrust, which identified itself as an agent for MERS.Accompanying the *1152 notice of default was a declarationsigned by an employee of Countrywide, which apparently

was acting as the loan servicer. 2

2 The deed of trust states that a loan servicer is the entitythat “collects Periodic Payments due under the Note andthis Security Instrument and performs other mortgageloan servicing obligations.”

In May 2009 Gomes filed a lawsuit against Countrywide,MERS and ReconTrust, alleging several causes of action andattaching as exhibits the deed of trust and the notice of default.

The only causes of action at issue in this appeal are the firstand second causes of action, which are asserted against all

Defendants. 3

3 The remaining causes of action were for (1) quiet titleagainst Defendants; (2) violation of the Rosenthal FairDebt Collection Practices Act (Civ.Code, § 1788.10 etseq.) against Countrywide; (3) violation of Civil Codesection 2943, subdivision (b)(1) against Countrywide;and (4) unfair competition against Countrywide andMERS (Bus.Prof.Code, § 17200). These causes ofaction were all disposed of in connection with thedemurrer.

The first cause of action is titled “Wrongful Initiation ofForeclosure.” In that cause of action, Gomes states that he“does not know the identity of the Note's beneficial owner”—as he believes that KB Home Mortgage Company sold it onthe secondary mortgage market. He alleges on informationand belief that “the person or entity who directed the initiationof the foreclosure process, whether through an agent ofMERS or otherwise, was neither the Note's rightful owner noracting with the rightful owner's authority.” In short, the firstcause of action alleges, on information and belief, that MERSdid not have authority to initiate the foreclosure because thecurrent owner of the Note did not authorize MERS to proceedwith the foreclosure. As a remedy, the first cause of actionstates that Gomes seeks damages in an amount “not less than

$25,000.” 4

4 The complaint's general prayer for relief also seeks anorder rescinding the notice of default, along with otherrelief, but it is not clear whether those remedies aresought for the first cause of action.

The second cause of action seeks declaratory relief on theissue of whether “[Civil Code section 2924, subdivision (a) ]allows a borrower, before his or her property is sold, to bringa civil action in order to test whether the person electing tosell the property is, or is duly authorized to so by, the ownerof a beneficial interest in it.” Although designated a causeof action for declaratory relief, the second cause of actionappears to serve simply as a legal argument in support of thefirst cause of action. Specifically, the second cause of actionalleges that section 2924, subdivision (a) provides the legalauthority for Gomes to assert the claim he has made in thefirst cause of action, namely that MERS lacks the authority toinitiate the foreclosure process because it was not authorizedto do so by the owner of the Note.

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*1153 Defendants filed a demurrer. Demurring to the firstcause of action, Defendants argued, among other things, that(1) to maintain a cause of action for wrongful foreclosure,Gomes must allege that he is able to tender the full amount dueunder the loan; (2) California's nonjudicial foreclosure statutesets forth an exhaustive framework that does not providefor the type of relief that Gomes seeks; (3) the terms of thedeed of trust authorize **823 MERS to initiate a foreclosureproceeding; and (4) if Gomes is arguing that “he is entitledto avoid foreclosure until a defendant has produced the note,”such a claim has been uniformly rejected. Demurring to thesecond cause of action for declaratory relief, Defendantsargued that it was “nothing more than a repeat of the legaltheory” asserted in the first cause of action and should berejected on the same basis.

The trial court sustained the demurrer, without leave toamend, and entered judgment in favor of Defendants.

II

DISCUSSION

A. Standard of Review

“ ‘On appeal from an order of dismissal after an ordersustaining a demurrer, our standard of review is de novo,i.e., we exercise our independent judgment about whetherthe complaint states a cause of action as a matter of law.’ ”(Los Altos El Granada Investors v. City of Capitola (2006)139 Cal.App.4th 629, 650, 43 Cal.Rptr.3d 434.) “A judgmentof dismissal after a demurrer has been sustained withoutleave to amend will be affirmed if proper on any groundsstated in the demurrer, whether or not the court acted on thatground.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324, 182Cal.Rptr. 506, 644 P.2d 192.) In reviewing the complaint,“we must assume the truth of all facts properly pleaded bythe plaintiffs, as well as those that are judicially noticeable.”(Howard Jarvis Taxpayers Assn. v. City of La Habra (2001)25 Cal.4th 809, 814, 107 Cal.Rptr.2d 369, 23 P.3d 601.)

Further, “[i]f the court sustained the demurrer without leaveto amend, as here, we must decide whether there is areasonable possibility the plaintiff could cure the defect withan amendment.... If we find that an amendment could cure thedefect, we conclude that the trial court abused its discretionand we reverse; if not, no abuse of discretion has occurred....The plaintiff has the burden of proving that an amendmentwould cure the defect.” (Schifando v. City of Los Angeles

(2003) 31 Cal.4th 1074, 1081, 6 Cal.Rptr.3d 457, 79 P.3d569, citations omitted (Schifando ).) “[S]uch a showing canbe *1154 made for the first time to the reviewing court....”(Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93Cal.App.4th 700, 711, 113 Cal.Rptr.2d 399, citation omitted.)

B. The Demurrer Was Properly Sustained

1. Gomes Has Not Identified a Legal Basis for an Actionto Determine Whether MERS Has Authority to Initiate aForeclosure Proceeding

California's nonjudicial foreclosure scheme is set forth inCivil Code sections 2924 through 2924k, which “provide acomprehensive framework for the regulation of a nonjudicialforeclosure sale pursuant to a power of sale contained ina deed of trust.” (Moeller v. Lien (1994) 25 Cal.App.4th822, 830, 30 Cal.Rptr.2d 777 (Moeller ).) “These provisionscover every aspect of exercise of the power of sale containedin a deed of trust.” (I.E. Associates v. Safeco Title Ins.Co. (1985) 39 Cal.3d 281, 285, 216 Cal.Rptr. 438, 702P.2d 596.) “The purposes of this comprehensive schemeare threefold: (1) to provide the creditor/beneficiary with aquick, inexpensive and efficient remedy against a defaultingdebtor/trustor; (2) to protect the debtor/trustor from wrongfulloss of the property; and (3) to ensure that a properlyconducted sale is final between the parties and conclusiveas to a bona fide purchaser.” (Moeller, at p. 830, 30Cal.Rptr.2d 777.) “Because of the exhaustive nature of thisscheme, California appellate **824 courts have refusedto read any additional requirements into the non-judicialforeclosure statute.” (Lane v. Vitek Real Estate IndustriesGroup (E.D.Cal.2010) 713 F.Supp.2d 1092, 1098; see alsoMoeller, at p. 834, 30 Cal.Rptr.2d 777 [“It would beinconsistent with the comprehensive and exhaustive statutoryscheme regulating nonjudicial foreclosures to incorporateanother unrelated cure provision into statutory nonjudicial

foreclosure proceedings.”].) 5

5 Although “California courts have repeatedly allowedparties to pursue additional remedies for misconductarising out of a nonjudicial foreclosure sale whennot inconsistent with the policies behind the statutes”(California Golf, L.L.C. v. Cooper (2008) 163Cal.App.4th 1053, 1070, 78 Cal.Rptr.3d 153), Gomesis not seeking a remedy for misconduct. He isseeking to impose the additional requirement thatMERS demonstrate in court that it is authorized toinitiate a foreclosure. As we will explain, such arequirement would be inconsistent with the policybehind nonjudicial foreclosure of providing a quick,

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inexpensive and efficient remedy. (See Moeller, supra,25 Cal.App.4th at p. 830, 30 Cal.Rptr.2d 777.)

By asserting a right to bring a court action to determinewhether the owner of the Note has authorized its nomineeto initiate the foreclosure process, Gomes is attemptingto interject the courts into this comprehensive nonjudicialscheme. As Defendants correctly point out, Gomes hasidentified no legal authority for such a lawsuit. Nothing in thestatutory provisions establishing the nonjudicial foreclosureprocess suggests that such a judicial proceeding is permittedor contemplated.

1 *1155 In his declaratory relief cause of action, Gomessets forth the purported legal authority for his first cause ofaction, alleging that Civil Code section 2924, subdivision(a), by “necessary implication,” allows for an action to testwhether the person initiating the foreclosure has the authorityto do so. We reject this argument. Section 2924, subdivision(a)(1) states that a “trustee, mortgagee, or beneficiary, orany of their authorized agents” may initiate the foreclosureprocess. However, nowhere does the statute provide for ajudicial action to determine whether the person initiatingthe foreclosure process is indeed authorized, and we see noground for implying such an action. (See Lu v. HawaiianGardens Casino, Inc. (2010) 50 Cal.4th 592, 596, 113Cal.Rptr.3d 498, 236 P.3d 346 [legislative intent, if any,to create a private cause of action is revealed throughthe language of the statute and its legislative history].)Significantly, “ [n]onjudicial foreclosure is less expensiveand more quickly concluded than judicial foreclosure, sincethere is no oversight by a court, ‘[n]either appraisal norjudicial determination of fair value is required,’ and the debtorhas no postsale right of redemption.” (Alliance Mortgage Co.v. Rothwell (1995) 10 Cal.4th 1226, 1236, 44 Cal.Rptr.2d 352,900 P.2d 601.) The recognition of the right to bring a lawsuitto determine a nominee's authorization to proceed withforeclosure on behalf of the noteholder would fundamentallyundermine the nonjudicial nature of the process and introducethe possibility of lawsuits filed solely for the purpose ofdelaying valid foreclosures.

2 3 4 Gomes cites three federal district court cases—twoof which are unpublished—which he says recognize a rightto bring a legal challenge to an entity's authority to initiate aforeclosure process. (Weingartner v. Chase Home Finance,LLC (D.Nev.2010) 702 F.Supp.2d 1276 (Weingartner );Castro v. Executive Trustee Services, LLC (D.Ariz.2009, Feb.23, 2009, No. CV–08–2156–PHX–LOA) 2009 WL 438683,2009 U.S. Dist. Lexis 14134 (Castro ); **825 Ohlendorf

v. Am. Home Mortgage Servicing (E.D. Cal.2010, Mar. 31,2010, No. CIV. S–09–2081 LKK/EFB) 2010 U.S. Dist. Lexis

31098 (Ohlendorf ).) 6 The cases are not controlling on usand, in any event, they are not on point, as none recognize acause of action requiring the noteholder's nominee to proveits authority to initiate a foreclosure proceeding. For instance,in Ohlendorf, the plaintiff alleged wrongful foreclosureon the ground that assignments of the deed of trust hadbeen improperly backdated, and thus the wrong party hadinitiated the foreclosure process. (Ohlendorf, supra, 2010U.S. Dist. Lexis at *22–23.) No such infirmity is alleged here.Moreover, the district court cases from outside of Californiaare *1156 inapposite because they do not apply Californianonjudicial foreclosure law. The court in Weingartner, supra,702 F.Supp.2d 1276, 1282–1283, allowed a plaintiff's claimfor injunctive relief to proceed when he produced evidencethat the trustee that initiated the foreclosure was not in factthe trustee at the time and thus could not proceed underNevada law. In Castro, supra, 2009 WL 438683, 2009 U.S.Dist. Lexis 14134, the court allowed a claim for declaratoryrelief to proceed to determine whether the defendants wereentitled to enforce a promissory note through nonjudicialforeclosure when the documents before the court indicatedthat the entities initiating the foreclosure process may nothave had the rights of the holder of the note as required byArizona law. (Id., 2009 WL 438683 at *5, 2009 U.S. Dist.Lexis 14134 at *15–16.) It is also significant that in eachof these cases, the plaintiff's complaint identified a specificfactual basis for alleging that the foreclosure was not initiatedby the correct party. Gomes has not asserted any factual basisto suspect that MERS lacks authority to proceed with theforeclosure. He simply seeks the right to bring a lawsuit tofind out whether MERS has such authority. No case law or

statute authorizes such a speculative suit. 7

6 “Although we may not rely on unpublished Californiacases, the California Rules of Court do not prohibitcitation to unpublished federal cases, which mayproperly be cited as persuasive, although not binding,authority.” (Landmark Screens, LLC v. Morgan, LewisBockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6,107 Cal.Rptr.3d 373, citing Cal. Rules of Court, rule8.1115.)

7 As we understand Gomes's first and second causesof action, he is alleging that MERS might not havebeen authorized by the current holder of the Noteto initiate foreclosure proceedings, and he is entitledto bring a lawsuit to determine whether MERS wasin fact authorized. Although we focus on this legaltheory in addressing whether the demurrer was properly

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sustained, we note that certain portions of Gomes'sappellate briefing suggest he may be arguing that evenif MERS was authorized by the noteholder to initiatea foreclosure, MERS would not have standing to doso. For example, Gomes cites a Kansas case holdingthat MERS did not have standing to intervene in ajudicial foreclosure case. (Landmark Nat'l Bank v.Kesler (2009) 289 Kan. 528, 216 P.3d 158, 166.) Gomesalso contends that other out-of-state cases have foundthat “MERS' limited role means it lacks independentstanding to foreclose, or independent power to conveystanding by transferring a note.” If, by citing thesecases, Gomes means to argue that MERS lacks standingin California to initiate a nonjudicial foreclosure, theargument is without merit because under Californialaw MERS may initiate a foreclosure as the nominee,or agent, of the noteholder. As we have explained,Civil Code section 2924, subdivision (a)(1) states thata “trustee, mortgagee, or beneficiary, or any of theirauthorized agents ” may initiate the foreclosure process.(Italics added.)

Gomes appears to acknowledge that California's nonjudicialforeclosure law does not provide for the filing of a lawsuit todetermine whether MERS has been authorized by the holderof the Note to initiate a foreclosure. He argues, however,that we should nevertheless interpret the statute to providefor such a right because the “Legislature may not have**826 contemplated or had time to fully respond to the

present situation.” That argument should be addressed inthe first instance to the Legislature, not the courts. BecauseCalifornia's nonjudicial foreclosure statute is unambiguouslysilent on any right to bring the type of action identified byGomes, there is no basis for the courts to create such a right.We therefore conclude that the trial court *1157 properlysustained Defendants' demurrer to the first and second causes

of action in Gomes's complaint. 8

8 As we sustain the demurrer on another ground, we neednot and do not consider whether, as the trial court ruled,the first cause of action fails on the ground that Gomeshas not pled that he is prepared to tender the amountowing on the Note. (See Arnolds Management Corp. v.Eischen (1984) 158 Cal.App.3d 575, 578, 205 Cal.Rptr.15 [“It is settled that an action to set aside a trustee's salefor irregularities in sale notice or procedure should beaccompanied by an offer to pay the full amount of thedebt for which the property was security.”].)

2. Gomes Agreed in the Deed of Trust That MERS IsAuthorized to Initiate a Foreclosure Proceeding

5 As an independent ground for affirming the ordersustaining the demurrer, we conclude that even if there wasa legal basis for an action to determine whether MERShas authority to initiate a foreclosure proceeding, the deedof trust—which Gomes has attached to his complaint—establishes as a factual matter that his claims lack merit.As stated in the deed of trust, Gomes agreed by executingthat document that MERS has the authority to initiate aforeclosure. Specifically, Gomes agreed that “MERS (asnominee for Lender and Lender's successors and assigns)has ... the right to foreclose and sell the Property.” The deedof trust contains no suggestion that the lender or its successorsand assigns must provide Gomes with assurances that MERSis authorized to proceed with a foreclosure at the time it is

initiated. 9 Gomes's agreement that MERS has the authorityto foreclose thus precludes him from pursuing a cause ofaction premised on the allegation that MERS does not havethe authority to do so.

9 The parties debate in their briefing whether MERSshould be considered a “beneficiary” of the deed of trustand thus authorized to initiate a foreclosure proceeding,regardless of whether it is authorized by the holderof the note, under the statutory provision stating thatthe beneficiary is entitled to initiate a foreclosure.(Civ.Code, § 2924, subd. (a)(1).) As the parties discuss,some federal district courts have observed that althoughidentified as a “beneficiary” in a deed of trust, therole of MERS is not acting as a beneficiary as thatterm is commonly used, and that MERS in fact actsas a nominee, and thus an agent of the beneficiary.(See, e.g., Roybal v. Countrywide Home Loans, Inc.(D.Nev., Dec. 9, 2010, No. 2:10–CV–750–ECR–PAL)2010 WL 5136013, *4, 2010 U.S. Dist. Lexis 131287,*11 [“there is a near consensus among district courtsin this circuit that while MERS does not have standingto foreclose as a beneficiary, because it is not one,it does have standing as an agent of the beneficiarywhere it is the nominee of the lender, who is thetrue beneficiary”]; Weingartner, supra, 702 F.Supp.2dat p. 1280 [“Calling MERS a ‘beneficiary’ is bothincorrect and unnecessary ...,” and “[c]ourts often holdthat MERS does not have standing as a beneficiarybecause it is not one, regardless of what a deed of trustsays, but that it does have standing as an agent of thebeneficiary where it is the nominee of the lender (whois the ‘true’ beneficiary).”].) However, because CivilCode section 2924, subdivision (a)(1) and the deed oftrust permit MERS to initiate foreclosure as a nominee(i.e., agent) of the noteholder, we need not, and donot, decide whether MERS is also a “beneficiary” as

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that term is used in California's nonjudicial foreclosurestatute.

Relying on the terms of the applicable deeds of trust, courtshave rejected similar challenges to MERS's authority toforeclose. In **827 Pantoja v. *1158 Countrywide HomeLoans, Inc. (N.D.Cal.2009) 640 F.Supp.2d 1177, the federaldistrict court pointed out that in the deed of trust, the plaintiff“distinctly granted MERS the right to foreclose through thepower of sale provision, giving MERS the right to conductthe foreclosure process under [Civil Code s]ection 2924,”and therefore “ [s]ince Plaintiff granted MERS the right toforeclose in his contract, his argument that MERS cannotinitiate foreclosure proceedings is meritless.” (Id. at pp. 1189,1190.) Similarly, another court pointed out that “[u]nder themortgage contract, MERS has the legal right to forecloseon the debtor's property.... MERS is the owner and holderof the note as nominee for the lender, and thus MERScan enforce the note on the lender's behalf.” (Morgera v.Countrywide Home Loans, Inc. (E.D.Cal., Jan. 11, 2010, No.2:09–cv–01476–MCE–GGH) 2010 WL 160348, *8, 2010U.S. Dist. Lexis 2037, *22, citation omitted.) Following thissame approach, we conclude that Gomes's first and secondcauses of action lack merit for the independent reason that byentering into the deed of trust, Gomes agreed that MERS hadthe authority to initiate a foreclosure.

3. Gomes Has Not Established That He Can Cure theDefects in His Complaint by Amending

We must also consider whether Gomes has shown that thereis a reasonable probability that he could cure the defectsthat we have identified in the first and second causes ofaction. (Schifando, supra, 31 Cal.4th at p. 1081, 6 Cal.Rptr.3d457, 79 P.3d 569.) Gomes contends that he could amend hiscomplaint to “plead more specific theories ... on informationand belief” such as those theories discussed in Ohlendorf,supra, 2010 U.S. Dist. Lexis 31098, and Weingartner, supra,702 F.Supp.2d 1276.

6 7 8 To attempt to state a claim as in Ohlendorf,Gomes would have to plead that the specific party whoinitiated the foreclosure process was not the proper partyto do so because assignments of the deed of trust wereimproperly backdated. (Ohlendorf, supra, 2010 U.S. Dist.Lexis 31098 at *22–23.) To conform to the theory pledin Weingartner, Gomes would have to plead that a trusteeinitiated the foreclosure proceeding but was not actually thetrustee at the time. (Weingartner, supra, 702 F.Supp.2d at p.1282.) However, Gomes has conceded that he cannot pleadfacts meeting those scenarios “because respondents havenot recorded any assignments” or provided any descriptionsof assignments. A “ ‘[p]laintiff may allege on informationand belief any matters that are not within his personalknowledge, if he has information leading him to believe thatthe allegations are true ’ ” (Doe v. City of Los Angeles(2007) 42 Cal.4th 531, 550, 67 Cal.Rptr.3d 330, 169 P.3d559, italics added), and thus a pleading made on informationand belief is insufficient if it “merely assert[s] the facts soalleged without alleging such information that ‘lead[s] [theplaintiff] to believe that the *1159 allegations are true.’ ” (Id.at p. 551, fn. 5, 67 Cal.Rptr.3d 330, 169 P.3d 559.) BecauseGomes has conceded that he has no specific informationabout assignments of the Note, he would not be able toplead on information and belief, based on facts leading himto believe they were true, the theories alleged in Ohlendorfand Weingartner. We therefore conclude that the trial courtproperly sustained the demurrer without leave to amend.

DISPOSITION

The judgment is affirmed.

WE CONCUR: NARES, Acting P.J., and McINTYRE, J.

Parallel Citations

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Filings (4)

Title PDF Court Date Type1. Appellant's Reply BriefJose GOMES, Plaintiff and Appellant, v. COUNTRYWIDE HOMELOANS, INC.; Mortgage Electronic Registration Systems, Inc.;and Recontrust, N.A., Defendants and Respondents.2010 WL 4075862

Cal.App. 4Dist.

Oct. 6, 2010 Brief

2. Respondents' Brief Jose GOMES, Plaintiff and Appellant, v. COUNTRYWIDE HOMELOANS, INC., etc., et al., Defendants and Respondents.2010 WL 3866885

Cal.App. 4Dist.

Sep. 17, 2010 Brief

3. Appellant's Opening BriefJose GOMES, Plaintiff and Appellant, v. COUNTRYWIDE HOMELOANS, INC.; Mortgage Electronic Registration Systems, Inc.;and Recontrust, N.A., Defendants and Respondents.2010 WL 2992522

Cal.App. 4Dist.

Jul. 2010 Brief

4. Docket D057005GOMES v. COUNTRYWIDE HOME LOANS, INC. ET AL.

— Cal.App. 4Dist.

Mar. 2, 2010 Docket

Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 9

Negative Treatment

Negative Direct HistoryThe KeyCited document has been negatively impacted in the following ways by events or decisions in the samelitigation or proceedings:There is no negative direct history.Negative Citing References (1)The KeyCited document has been negatively referenced by the following events or decisions in other litigation orproceedings:

Treatment Title Date Type Depth Headnote(s)Distinguishedby 1. In re Salazar

--- B.R. ---- , Bankr.S.D.Cal.BANKRUPTCY - Debtor Protections. “Cause” did notexist to lift stay to allow unlawful detainer action toproceed in state court.

Apr. 12 ,2011

Case 1 5 6

Cal.Rptr.3d

Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 10

Appellate History (1)

Direct History (1) 1. Gomes v. Countrywide Home Loans, Inc.

192 Cal.App.4th 1149 , Cal.App. 4 Dist. , Feb. 18, 2011 , review filed ( Mar 29, 2011 )

Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 11

AGomes v. Countrywide

Home Loans, Inc.121 Cal.Rptr.3d 819 | Feb 18, 2011

Cal.App. 4 Dist.review filed Mar 29, 2011

Inte

rmed

iate

Cou

rtTr

ial C

ourt

Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 12

Citing References (10)

Treatment Title Date Type Depth Headnote(s)Distinguishedby

1. In re Salazar 2011 WL 1398478, *6+ , Bankr.S.D.Cal.

BANKRUPTCY - Debtor Protections. “Cause” didnot exist to lift stay to allow unlawful detainer actionto proceed in state court.

Apr. 12, 2011 Case 1 5 6

Cal.Rptr.3d

Discussed by 2. In re Doble2011 WL 1465559, *7+ , Bankr.S.D.Cal.

Defendants One West Bank, F.S.B. (“One West”)and Deutsche Bank National Trust Company(“Deutsche Bank”), as Trustee of the HarborViewMortgage Loan Trust 2005–5, Mortgage Loan...

Apr. 14, 2011 Case 5

Cal.Rptr.3d

Discussed by 3. Respondents' BriefThomas J. FORBES, Plaintiff and Appellant, v.COUNTRYWIDE HOME LOANS, INC., et al.,Defendants and Respondents.2010 WL 6488162, *1+ , Cal.App. 4 Dist.

Mar. 09, 2010 Brief 1

Cal.Rptr.3d

Discussed by 4. Respondents' BriefThomas J. FORBES, Plaintiff and Appellant, v.COUNTRYWIDE HOME LOANS, INC., et al.,Defendants and Respondents.2010 WL 6488163, *1+ , Cal.App. 4 Dist.

Mar. 09, 2010 Brief 1

Cal.Rptr.3d

Cited by 5. Monet v. Countrywide Home Loans 2011 WL 1196461, *2 , N.D.Cal.

This action arises from a loan secured by theresidence of Plaintiff Chris Monet (“Monet”). Theresidence is located at 25111 Soquel San JoseRoad Los Gatos, California 95033 (“the...

Mar. 29, 2011 Case 1

Cal.Rptr.3d

Cited by 6. Stradling v. Sun American Mortg.2011 WL 1226102, *2 , D.Utah

Defendants Mortgage Electronic RegistrationSystems (MERS) and LXS 2006–ION, U.S. BankNational Association (U.S.Bank) move to dismissthis action for failure to state a claim...

Mar. 28, 2011 Case 1

Cal.Rptr.3d

Cited by 7. Appellant's Opening BriefDeborah RESTAINO, an individual, Plaintiffand Appellant, v. Robert P. Des JARDINS, anindividual; Robert P. Des Jardins, Inc., a corporationDes Jardins & Haapla, A.L.C., a corporation;Michael J. Haapla, an individual, Defendants andRespondents.2011 WL 1370854, *1+ , Cal.App. 4 Dist.

Mar. 14, 2011 Brief —

— 8. Precedential Effect of Unpublished Opinions,105 A.L.R.5th 499

This annotation collects and discusses the federaland state cases adjudicating the precedentialeffect of unpublished opinions in subsequent casesconcerning different parties and...

2003 ALR — —

— 9. 21 NO. 5 Miller & Starr, California Real EstateNewsalert 10, DEEDS OF TRUSTMiller & Starr, California Real Estate Newsalert

2011 OtherSecondarySource

— 1

Cal.Rptr.3d

Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149

© 2011 Thomson Reuters. No claim to original U.S. Government Works. 13

Treatment Title Date Type Depth Headnote(s)— 10. Borrower Cannot File Suit to Determine

Whether MERS Has Authority to CommenceForeclosure, and Trust Deed ExpresslyAuthorized MERS to Do So. (Gomes v.Countrywide Home Loans, Inc., (Cal.App.).),2011 COMFINNL 18, 18

A California appellate court has held that a borrowerquestioning the authority of MERS to commence anonjudicial foreclosure cannot file suit to determinewhether MERS has the...

2011 Law Review — —