46559619 MERS ARGUMENTS in California Mers Reply to Oppositon to Demurrer to Sac[1]

8/8/2019 46559619 MERS ARGUMENTS in California Mers Reply to Oppositon to Demurrer to Sac[1]

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EDWARD A. TREDERState Bar No. 116307MASUMI J. PATELState Bar No. 233921

BARRETT DAFFIN FRAPPIER

TREDER & WEISS, LLP20955 Pathfinder Road, Suite 300Diamond Bar, California 91765

(626) 915-5714 Phone(626) 915-0289 Faxedwardt(a)dftw.com

File No. 20090159908346

Attorneys for Defendants

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF RIVERSIDE, LARSEN JUSTICE CENTER

CASE NO. INC090697

UNLIMITED CIVIL

ASSIGNED FOR ALL PURPOSES TO:HON. RANDALL D. WHITE, DEPT. 2H

MORTGAGE ELECTRONICREGISTRATION SYSTEMS, INC.'SREPLY TO PLAINTIFF'S OPPOSITIONTO ITS DEMURRER TO THE SECONDAMENDED COMPLAINT

Complaint Filed: October 23, 2009Trial Date: Not yet set.

BRIAN W DAVIES,

Plaintiff,

VS.

NDEX WEST LLC, DEUTSCHE BANK

NATIONAL TRUST COMPANY, AS TRUSTEEOF THE RESIDENTIAL ASSETSECURITIZATION TRUST 2007-A5,MORTGAGE PASS THROUGHCERTIFICATES, SERIES 2007-E UNDER THEPOOLING AND SERVICING AGREEMENTDATED 3-1-07: INDYMAC MORTGAGESERVICING, A DIVISION OF ONEWESTBANK; OPTEUM; UNIVERSAL AMERICANMORTGAGE COMPANY OF CALIFORNIA;MORTGAGE ELECTRONIC REGISTRATIONSYSTEMS, INC; UAMC LLC; DOES 1-20,

Defendants.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION

TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT


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TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:

COMES NOW Defendant MORTGAGE ELECTRONIC REGISTRATION SYSTEM

INC. ("MERS") and submits the following Reply to Plaintiff BRIAN W DAVIES' ("Plaintif

Opposition to MERS' Demurrer to Plaintiffs Second Amended Complaint.

I. INTRODUCTION

Plaintiffs Opposition to MERS' Demurrer is drafted more like a Complaint than a

Opposition to a Demurrer, presumably in an attempt to cure the numerous defects in the Secon

Amended Complaint. However, instead of ameliorating the defects, Plaintiffs Opposition is wea

further confuses the issues, and misleads the Court. Rather than address the points and merits raise

in MERS' Demurrer, Plaintiff espouses new and additional facts and theories most, if not all, ar

inarticulate and are too convoluted to decipher. This is wholly insufficient to satisfy Plaintif

burden of demonstrating in what manner he can amend his Second Amended Complaint and how th

amendment will change the legal effect of the pleading in order to survive MERS' Demurrer. 1Sinc

Plaintiff fails to address the merits of MERS' Demurrer and has not met his burden, Plainti

implicitly concedes his claims have no merit. Thus, this Court must sustain MERS' Demurre

without leave to amend especially since this is Plaintiffs third attempt at correcting the shortcoming

in his operative Complaint without success.

II. LEGAL ARGUMENT

A. The Use Of A Nominee In Real Estate Transactions Is A Legitimate Practice An

Does Not Involve A Separation Of The Note And Deed Of Trust

MERS status as "nominee" is a common occurrence in public land records and "has long bee

sanctioned as a legitimate practice."2Individuals frequently confer rights on a "nominee," "agent

or "trustee" for a variety of purposes, including to execute or hold mortgage instruments. 3In fac

1Goodman v. Kennedy (1976) 18 Ca1.3d 335, 349.2

In re Cushman Bakery (1975) 526 F.2d 23, 30, cert. denied, (1976) 425 U.S. 93.3Id; Milton R. Friedman, Friedman on Contracts & Conveyances of Real Property, 6:1.3 (James Charles Smith ed.,

ed. 2007);In re Childs Co., (1947) 163 F.2d 379,382;Barkhausen v. Continental Ill, Nat'l Bank Trust Co. of Chicag(1954) 120 N.E.2d 649, 655, cert. denied, 348 U.S. 897.



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there are a number of other situations where the mortgagee or beneficiary and the beneficial owne

are not the same party.

Deeds of Trust involving MERS clearly disclose MERS serves as the beneficiary, as nominee

for the lender, its successors, and assigns. As detailed in length in MERS' Demurrer to the Secon

Amended Complaint, Plaintiff accepted MERS' role in his mortgage transaction with his lender. Th

concept of a nominee does not limit either the powers granted to MERS or its ability to exercise thos

powers. Rather, it makes clear that MERS' actions are for the benefit of the MERS members who ar

the lenders, successor, or assigns. Accordingly, MERS held the legal interest granted by Plaintiff i

his mortgage while other parties had the beneficial interest in his loan.

Nevertheless, Plaintiffs Opposition argues the Note and Deed of Trust were separate

because each is held by a party. 4However, Plaintiff's unsupported and illogical argument

incorrect. Under California law, a secured promissory note traded on the secondary mortgage marke

remains secured because the mortgage always follows the note. 5This is why the Californi

Legislature requires recordation of whoever holds the power of sale: either the mortgagee or th

trustee. 6Thus, MERS' role as a nominee does not serve to separate the Note and the Deed of Trust

B. MERS Was Authorized To Commence The Foreclosure Process

Under California Civil Code section 2924(a)(1), a "trustee, mortgagee or beneficiary or any o

their authorized agents" may conduct the foreclosure process. Under California Civil Code sectio

2924b(4), a "person authorized to record the notice of default or the notice of sale" includes "an agen

for the mortgagee or beneficiary, an agent of the named trustee, any person designated in an execute

substitution of trustee, or an agent of that substituted trustee." "Upon default by the trustor, th

beneficiary may declare a default and proceed with a nonjudicial foreclosure sale." 7There is n

stated requirement in California's non-judicial foreclosure scheme that requires a beneficial intere

4 Opposition, page 8, lines4 5.5Cal. Civ. Code 2936;In re Vargas, 396 B.R. 511, 516 (Bkrtcy.C.D.Cal., 2008.)6Stockwell v. Barnum (1908) 7 Cal.App. 413 (construing predecessor statute; distinguishing mortgage and deed of trust

Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868 (foreclosure sale valid only if conducted by trustee of record.)7Moeller vs. Lien, (1994) 25 Cal.App.4th 822, 830.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION


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in the Note to foreclose. Rather, the statute broadly allows a trustee, mortgagee, beneficiary, or an

of their agents to initiate non-judicial foreclosure. Accordingly, the statute does not require

beneficial interest in both the Note and the Deed of Trust to commence a non-judicial foreclosure.

This interpretation is consistent with prior rulings of this court, along with many others, tha

MERS has standing to foreclose as the nominee for the lender and beneficiary of the Deed of Trus

and may assign its beneficial interest to another party.8

While Plaintiff attempts to confuse the Cou

over what is MERS' role, the Nebraska Supreme Court succinctly paraphrased MERS' role b

stating, "... lenders retain the promissory notes and servicing rights to the mortgage, while MER

acquires legal title to the mortgage for recordation purposes" 9and "MERS serves as legal title holde

in a nominee capacity ...10

In his Opposition, Plaintiff cites to various cases for the proposition that as the beneficiar

and nominee for the lender and its successors and assigns, MERS is unable to transfer any interest i

a Deed of Trust and cannot foreclose upon real property secured by a Deed of Trust. Once again

Plaintiff is incorrect.

Plaintiff's misunderstanding is based upon his misconstruction of the holdings of the cases t

which he cites, none of which are applicable in the instant matter. Specifically, in the In r

Foreclosure Cases, each of these cases involved a judicial foreclosure where MERS was not th

foreclosing party.11

The present case differs from theIn re Foreclosure Cases because this cas

concerns a non-judicial foreclosure where MERS had an interest in the Deed of Trust and legall

commenced Plaintiff's foreclosure.

TheIn re Vargas and theLamy cases involved a motion for relief from stay and a judicia

foreclosure respectively, which again, are inapplicable to this case which involves a non-judicia

8See, e.g.,Morgera v. Countrywide Home Loans, Inc., No. Civ. 2:09-01476 MCE GGH, 2010 WL 160348, at *8 (E.DCal. Jan. 11, 2010) (collecting cases); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 177 (N.D. Cal. 2009

Castaneda v. Saxon Mortg. Servs., Inc., --- F. Supp. 2d ----, No. Civ. 2:09-01124 WBS DAD, 2009 WL 4640673, at *

(E.D. Cal. Dec. 3, 2009);Bentham v. Aurora Loan Servs., No. C-09-2059 SC, 2009 WL 2880232, at *3 (N.D. Cal. Sep

1, 2009); Kachlon v. Markowitz, 186 Cal. App. 4th 316, 334-35 (2008).9MERS v. Nebraska Department of Banking and Finance(2005) 704 N.W.2d 784, 788.10

Id.11In re Foreclosure Cases (2007) 521 F. Supp.2d 650.



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foreclosure. 12InIn re Vargas, evidence of MERS interest in the note was not presented to the cour

and therefore the motion for relief from stay was denied. In Lamy, as in In re Foreclosure Case

MERS was not the foreclosing party. The foreclosing party inLamy failed to provide the court wit

evidence of its interest in the note and mortgage at the time the foreclosure was commenced, an

therefore the judgment of foreclosure was denied. However, theLamy case's deficiencies were late

rectified, and a foreclosure judgment was obtained in 2008. Contrary to Plaintiff's assertions, thes

cases are inapplicable to the present matter. MERS was the beneficiary under Plaintiff's Deed o

Trust and properly transferred its interest in the Deed of Trust.

Since MERS can transfer its interest in the Deed of Trust and is authorized to commence

non-judicial foreclosure sale of real property, Plaintiff's theories have no merit.

C. Plaintiff Must Allege Tender To Survive A Demurrer

Plaintiff's Opposition to MERS' tender argument is premised upon the recent decision i

Mabry v. Superior Court. 13Mabry contains a discussion of the well established law requiring

defendant who wishes to challenge acompletedforeclosure sale to tender the full amount due withi

the context of Civil Code 2923.5. As a result, Plaintiff alleges he does not have to tender

However, Plaintiff is incorrect, and his argument fails.

First and foremost, this actiondoes not concern a completed foreclosure sale; it concerns

pending foreclosure sale. As evidenced by the documents attached to the Request for Judicial Notic

and as Plaintiff readily admits, there has been no Notice of Trustee's Sale recorded against th

Property.

Second, Plaintiff alleges numerous statutory violations and legal theories in his Second

Amended Complaint, onlyone of which is an alleged violation of Civil Code 2923.5. Thus, even i

12In re Vargas, 396 B.R. 511 (Bkrtcy.C.D.Cal., 2008);LaSalle Bank Nat. Ass'n v. Lamy (2006) 824 N.Y.S.2d 769.13

2010 WL 2180530 (Cal.App. 4 Dist.).



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this action concerned a completed foreclosure, Plaintiff is required to allege tender in order t

proceed on his other theories of recovery.14

Third, the trial court inMabry did obligate the borrower to tender the amount in arrea

which was not overturned by the Court of Appeal. Thus, Plaintiff is still required to tender, at th

minimum, the amount in arrears.

Furthermore, even if Plaintiff alleges it would be inequitable for him to tender, he is mistaken

it would be inequitable for him not to tender because he has been residing in the property sinc

December 2008 without paying his recurring monthly installments, real property taxes, or hazar

insurance premiums Furthermore, he completely fails to allege he would be able to make a full an

complete tender as a condition of judgment. Thus, this Court must sustain MERS' Demurrer in i

entirety without leave to amend.

D. Plaintiff's Claims Of Statutory Violations Fails

1. California Civil Code 2923.5 and 2924

For the first time, Plaintiff alleges MERS violated Civil Code 2923.5 and 2924 b

"prematurely executing the assigned power of sale clause in Plaintiff's Deed of Trust."

Unfortunately, Plaintiff's claims is too conclusory. This statement is completely devoid of any fact

specifics, or any information whatsoever as to put MERS on notice of which of the numerou

provisions of Civil Code 2923.5 and 2924 it allegedly violated. Furthermore, Plaintiff even fails t

allege how "prematurely executing the assigned power of sale clause in Plaintiff's Deed of Trus

violates these code sections.

Based on Plaintiff's convoluted Opposition, it also appears Plaintiff is alleging MER

violated Civil Code 2923.5 because it "willfully and knowingly invoked the power of sale clause i

14Shimpones v. Stickeney (1934) 219 Cal. 637, 649;Abdallah v. United Savings Bank(1996) 43 Cal.App.4th 1101, 110

MCA, Inc. v. Universal Diversified Enterprises Corp. (1972) 27 Cal.App.3d 170, 177; Karlsen v. American Savings an

Loan Assoc. (1971) 15 Cal.App.3d 112, 117.15Opposition, page 10, lines 25 26.



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Plaintiff's deed of trust without the proper assignment." 16Unfortunately, Plaintiff is once aga

incorrect.

First and foremost, Plaintiff's allegation makes no sense. As set out in detail in MERS

Demurrer to Plaintiff's Second Amended Complaint, MERS already possessed the authority t

commence foreclosure pursuant to the terms of Plaintiff's Deed of Trust. Despite Plaintiff's contrar

assertions, MERS was the entity that actually invoked the power of sale clause not Deutsche Bank

This is plainly stated on the second page of the Notice of Default. Accordingly, there is no need fo

MERS to possess an Assignment in order to foreclosure because it already had the power pursuant t

the Deed of Trust. Thus, Plaintiff's illogical allegation that there must be an assignment utterly fails

Further an assignment does not even have to be recorded pursuant to Civil Code 2934. Th

section provides: "Any assignment of a mortgage and any assignment of the beneficial interest unde

a deed of trust may be recorded, and from the time the same is filed for record operates a

constructive notice of the contents thereof to all persons. . ."17

Further, under Civil Code 2936, th

transfer of a Promissory Note carries with it the assignment of the Deed of Trust regardless o

whether it is recorded. 18Thus, the Assignment of the Deed of Trust is not required to be recorded

and if it is recorded, the only purpose of the recording is to put others on constructive notice of th

Assignment.

Since MERS had the power to invoke the power of sale clause pursuant to the Deed of Trus

and an Assignment does not even have to be recorded, and MERS did not and could not have violat

Civil Code 2923.5 and 2924.

2. California Civil Code 2934

Once again, Plaintiff alleges new confusing and convoluted facts. In support of his violatio

of Civil Code 2934 claim, it appears Plaintiff is now claiming Deutsche (not MERS) violated thi

16Opposition, page 11, line 11 12.17Civ. Code, 2934. (Emphasis added.)18Civ. Code, 2936.



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section because it could not validly substitute Defendant NDEX WEST, LLC ("NDEx") as th

Trustee as it was not assigned the Deed of Trust. Once again, Plaintiff is incorrect. 19

First and foremost, this claim is too conclusory as Plaintiff has not allege how this violate

Civil Code 2934. Furthermore, Plaintiff is unable to amend his Complaint to cure this defe

because Civil Code 2934 has nothing to do with the recordation of a Substitution of Truste

Instead, Civil Code 2934 pertain to Assignments and states an Assignment may be recorded, and

recorded, it operates as constructive notice.

Second, at the time the Substitution of Trustee was executed, Deutsche was assigned the Dee

of Trust. The Assignment to Deutsche was executed in August of 2009 and the Substitution o

Trustee was executed in October 2009. Thus, Plaintiff's claim fails, and this Court must sustai

MERS' Demurrer without leave to amend.

3. California Civil Code 2943

Second, at the time the Substitution of Trustee was executed, Deutsche was the beneficiar

under the Deed of Trust with the authority to substitute the trustee pursuant to Civil Code 2943a

The Assignment to Deutsche was executed in August of 2009 and the Substitution of Trustee wa

executed in October 2009. Thus, Plaintiff's claim fails, and this Court must sustain MERS

Demurrer without leave to amend.

E. Plaintiff's Third Cause Of Action For Slander Of Title Fails

Despite the new allegations contained in Plaintiff's Opposition, Plaintiff still fails to satisfy a

the required elements to prevail on his Slander of Title claim. Namely, Plaintiff is unable to alleg

the alleged slander disparaged the conduct of a third party purchaser or any potential lessee of th

Property, the alleged slander was published by MERS, the statements were false, and Plainti

sustained monetary damages. In fact, Plaintiff is unable to demonstrate he sustained any monetar

damages as he has been living in the Property without paying his recurring obligations and th

alleged disparaging statements have resulted in a windfall to Plaintiff. Since Plaintiff did not an

19Opposition, page 11, lines 20 27.MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION


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cannot establish all of the requisite elements, MERS' Demurrer to the Slander of Title Cause o

Action must be sustained without leave to amend.

F. Violation Of Business And Professions Code 17200, Et Seq.

Plaintiff's Fourth cause of action for Violation of Business and Professions Code 17200,

seq. is only alleged against Defendant "UAMCC." According to Plaintiff's Second Amende

Complaint, he has not alleged this claim against any other defendant including MERS. Thus, MER

will not address the issues raised in Plaintiff's Opposition.

G. Plaintiff's Intentional Deceit Claim Fails

Plaintiff's entire Opposition seems to based on Plaintiff's allegation the Assignment

invalid, and as a result, MERS has perpetrated a deceit upon Plaintiff.20

This claim is also to

conclusory to survive MERS' Demurrer because Plaintiff does not satisfy the seven essentia

elements. 21 Furthermore, as demonstrated supra, the Assignment is not invalid nor is the Notice o

Default. Thus, this Court must sustain MERS' Demurrer to the Sixth cause of action without leave t

amend.

III. CONCLUSION

This is now Plaintiff's third "bite at the apple," and yet Plaintiffs Second Amende

Complaint is still completely deficient, devoid of any specificity to properly apprise Deutsche of th

claims against it, and none of the deficiencies can be cured with an amended pleading. As such

Defendant MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. respectfully reques

this Court grant its Demurrer as to the entirety of Plaintiffs verified Second Amended Complaint

/ / /

/ / /

/ / /

/ / /

20 Opposition, page 13, line 27 to page 14, line 5.21Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4

th 1486, 1498; Engalla v. Permanente Me dical Group, In

(1997) 15 Ca1.4th 951, 974.MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION


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BARRETT DAFFIN FRAPPIER TREDER &

WEISS, LLP

By:

without leave to amend.

Dated: July 23, 2010

MASUM J. PATEL, Attorneys forDefenda = s INDYMAC MORTGAGE

SERVICING, A DIVISION OF ONEWEST

BANK, FSB; NDEX WEST, LLC; MORTGA

ELECTRONIC REGISTRATION SYSTEMS

INC.; and DEUTSCHE BANK NATIONAL

TRUST COMPANY, AS TRUSTEE OF THE

RESIDENTIAL ASSET SECURITIZATION

TRUST 2007-A5, MORTGAGE PASS-

THROUGH CERTIFICATE, SERIES 2007-E

UNDER THE POOLING AND SERVICING

AGREEMENT DATED MARCH 1, 2007



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Executed on Jul1-t

2010, at D ar, California.

LEWIS. JR.

PROOF OF SERVICE BY MAIL (C.C.P. 1013a, 2015.5)

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

I, J.C. Lewis, Jr., declare as follows:

I am employed in Los Angeles County, I am over the age of eighteen years and am not a partto the within entitled action; my business address is 20955 Pathfinder Road, Suite 300, Diamond BaCalifornia 91765.

On July 22 , 2010, I served the following:

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TOPLAINTIFF'S OPPOSITION TO ITS DEMURRER TO THE SECOND AMENDED

COMPLAINT

on the interested parties in said action by Federal Express/Overnight Mail, as follows:

SEE ATTACHED SERVICE LIST

I am "readily familiar" with the firm's practice of collection and processing ocorrespondence for mailing. Under that practice, it would be deposited with the U.S. Postal Servic

on that same day with postage thereon fully prepaid at Diamond Bar, California, in the ordinarcourse of business. I am aware that on motion of the party served, service is presumed invalid ipostal cancellation date or postage meter date is more than one day after the date of deposit fomailing affidavit/declaration.

I declare under penalty of perjury and the laws of tate of California that the foregoing true and correct.



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SERVICE LIST

BRIAN W. DAVIES43277 SENTIERO DRIVE

INDIO, CA 92203

PH: 760-904-4928FAX: 760-406-9865

760-673-7097

PLAINTIFF IN PRO SE

ROBERT E. FEYDER

KEVIN ASFOR DEFENDANTSK & L GATES UNIVERSAL AMERICAN MORTGAGE OF10100 SANTA MONICA BLVD CALIFORNIA and UAMC LLC

7th FLOORLOS ANGELES, CA 90057PH: 310-552-5000FAX: 552-5001

JAMES J. SCARELLA78-925 ZENITH WAYLA QUINTA, CA 92253

DEFENDANT

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS. INC.'S REPLY TO PLAINTIFF'S OPPOSITION


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