INTRODUCTION

Plaintiff and appellant Marian C. Williams is a property owner who has defaulted 1 on a real estate loan. She appeals from a judgment of dismissal, entered after the court

sustained defendants’ demurrer without leave to amend.1 On appeal, Williams claims she

has standing to challenge flaws in the securitization of the mortgage loan and she was not

required to tender the balance due to preserve her suit.

Defendants counter that Williams lacks standing to challenge the process for

securitizing mortgages; she cannot show prejudice; she failed to make the required

tender; and she is barred from using preemptive judicial action. Defendants assert several

other dispositive defenses and argue Williams cannot demonstrate an abuse of discretion.

We agree with defendants’ positions and affirm the judgment.

II

FACTUAL AND PROCEDURAL BACKGROUND

We base our summary of the facts on the complaint and the attached exhibits.

Williams, an Arizona resident, owns real property located in Moreno Valley at 11396

Greyson Road. Williams is the borrower on a $456,000 note, secured by a trust deed

which was executed and recorded in May 2006. Bear Stearns was the lender; Investors

Title Company was the trustee; and MERS was named as the beneficiary and nominee of

Bear Stearns.

1 Defendants and respondents are JPMorgan Chase Bank, N.A., (Chase) a successor in interest to Bear Stearns Residential Mortgage Corporation (Bear Stearns); Wells Fargo National Association as Trustee for the Certificate Holders of Structured Asset Mortgage Investments II, Inc., Bear Stearns Mortgage Funding Trust 2006-AR1, Mortgage Pass-Through Certificates, Series 2006-AR1 (Wells Fargo); and Mortgage Electronic Registration Systems, Inc. (MERS).

2 Williams alleges that Bear Stearns sold the note on July 1, 2006. In particular,

Williams claims the note and deed of trust were never validly transferred, depriving

Wells Fargo of any title to the property. She further alleges the securitization of her note

by defendants did not comply with the applicable Pooling and Servicing Agreement

(PSA).

A corporate assignment of deed of trust, which is attached to the complaint, shows

that MERS, acting as a nominee for Bear Stearns, assigned the subject note and trust deed

to Wells Fargo, and recorded the assignment in 2011. Williams alleges the purported

assignment is fraudulent and neither Bear Stearns nor MERS had any legitimate interest

in the property to convey.

Williams also disputes the validity of the recorded substitution of trustee, by

Chase acting for Wells Fargo, replacing Quality Loan Servicing Corporation (Quality) as

trustee under the trust deed. In December 2011, Quality recorded a notice of default and

election to sell, stating that the loan was $54,869.59 in arrears. In March 2012, Quality

executed and recorded a notice of trustee’s sale, listing the unpaid balance and charges as

$607,311.86. The property has not been sold yet.

Williams’s principal claim is that Bear Stearns was fully paid and, as a result of

violations of the PSA, defendants cannot pursue nonjudicial foreclosure. The complaint

asserts four causes of action: quiet title; cancellation of instruments; constructive trust;

and slander of title. The trial court sustained defendants’ demurrer for failure to state a

cause of action.

3

III

DISCUSSION

A. Standard of Review

In reviewing an order sustaining a demurrer without leave to amend, we accept as

true the properly pleaded factual allegations of the complaint. (McCall v. PacifiCare of

Cal., Inc. (2001) 25 Cal.4th 412, 415.) Where the complaint references the terms of a

contract, we consider those terms as part of the pleading. (Dodd v. Citizens Bank of

Costa Mesa (1990) 222 Cal.App.3d 1624, 1627.) Furthermore, the allegations of the

complaint must be liberally construed with a view to attaining substantial justice among

the parties. (Code Civ. Proc., § 452; King v. Central Bank (1977) 18 Cal.3d 840, 843.)

We review the complaint de novo to determine whether the trial court abused its

discretion. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879.) Any legal

theory may be considered on appeal. (Gomes v. Countrywide Home Loans, Inc. (2011)

192 Cal.App.4th 1149, 1153.) We also must decide whether there is a reasonable

possibility that a defect can be cured by amendment. (Rossberg v. Bank of America, N.A.

(2013) 219 Cal.App.4th 1481, 1491.)

B. Standing

Williams alleges a purportedly deficient assignment and securitization deprived

Wells Fargo of any interest in the property. She argues the transfer of her promissory

note and deed of trust to Wells Fargo and the subsequent securitization of the note were

improper.

4 However, even if these claims had merit, Williams lacks standing because she has

no interest in the note and trust deed: “[T]he relevant parties to such a transaction were

the holders (transferors) of the promissory note and the third party acquirers (transferees)

of the note. . . . As an unrelated third party to the alleged securitization, and any other

subsequent transfers of the beneficial interest under the promissory note, [plaintiff] lacks

standing to enforce any agreements, including the investment trust’s pooling and

servicing agreement, relating to such transactions.” (Jenkins v. JPMorgan Chase Bank,

N.A. (2013) 216 Cal.App.4th 497, 515.) To explain further: “Because a promissory note

is a negotiable instrument, a borrower must anticipate it can and might be transferred to

another creditor. As to plaintiff, an assignment merely substituted one creditor for

another, without changing her obligations under the note.” (Herrera v. Federal National

Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1507.)

Williams was not the victim of such invalid transfers because her obligations to

pay the note remained unchanged: “Instead, the true victim may be an individual or

entity that believes it has a present beneficial interest in the promissory note and may

suffer the unauthorized loss of its interest in the note. It is also possible to imagine one or

many invalid transfers of the promissory note may cause a string of civil lawsuits

between transferors and transferees. . . .” but plaintiff “may not assume the theoretical

claims of hypothetical transferors and transferees . . . .” (Jenkins v. JP Morgan Chase

Bank, supra, 216 Cal.App.4th at p. 515.)

Plaintiff argues that Glaski v. Bank of America (2013) 218 Cal.App.4th 1079,

supports her argument that a borrower may challenge a nonjudicial foreclosure based on

5 allegations that transfers in the chain of title of a trust deed were void.2 There, after

concluding that noncompliance with the terms of a PSA would render an assignment

void, the Glaski court adopted the majority rule in Texas that an obligor may resist

foreclosure on any ground that renders an assignment in the chain of title void. (Reinagel

v. Deutsche Bank Nat’l Trust Co. (5th Cir. Tex. 2013) 722 F.3d 700, 705.)

The Glaski court also held that, under New York trust law, a transfer of a deed of

trust in contravention of the trust documents is “void, not merely voidable,” and, under

California law, “a borrower can challenge an assignment of his or her note and deed of

trust if the defect asserted would void the assignment.” (Glaski v. Bank of America,

supra, 218 Cal.App.4th at p. 1095.) Based upon this theory, the Glaski court held that the

plaintiff had standing for various causes of action. The court further held that under New

York law, a securitized mortgage trustee’s acceptance of a loan after the trust’s closing

date would be void in contravention of the trust document and would jeopardize the

trust’s special tax status.

California federal courts have rejected Glaski. (See Subramani v. Wells Fargo

Bank N.A., No. C 13-1605 SC, 2013 U.S. Dist. LEXIS 156556, (N.D.Cal. Oct. 31, 2013);

Dahnken v. Wells Fargo Bank, N.A., No. C 13-2838 PJH, 2013 U.S. Dist. LEXIS 160686

(N.D.Cal. Nov. 8, 2013); Maxwell v. Deutsche Bank Nat’l Trust Co., No. 13-cv-03957-

2 This issue is now before the California Supreme Court in the lead case, Yvanova v. New Century Mortgage Corp. (Aug. 27, 2014, No. S218973) ___ Cal.4th ___ [176 Cal.Rptr.3d 266, 331 P.3d 1275], framed as follows: “In an action for wrongful foreclosure on a deed of trust securing a home loan, does the borrower have standing to challenge an assignment of the note and deed of trust on the basis of defects allegedly rendering the assignment void?”

6 WHO, 2013 U.S. Dist. LEXIS 164707 (N.D.Cal. Nov. 18, 2013); Apostol v.

CitiMortgage, Inc., No. 13-cv-01983-WHO, 2013 U.S. Dist. LEXIS 167308 (N.D.Cal.

Nov. 21, 2013); Zapata v. Wells Fargo Bank, N.A. (N.D.Cal., Dec. 10, 2013, No. C 13-

04288 WHA) 2013 U.S. Dist. Lexis 173187; Haddad v. Bank of America, N.A. (S.D.Cal.,

Jan. 8, 2014, No. 12cv3010-WQH-JMA) 2014 U.S. Dist. Lexis 2205; Rivac v. Ndex West

LLC (N.D.Cal., Dec. 17, 2013, No. C 13-1417 PJH) 2013 U.S. Dist. Lexis 177073;

Sepehry-Fard v. Dept. Stores Nat. Bank (N.D.Cal., Dec. 13, 2013, No. 13-cv-03131-

WHO) 2013 U.S. Dist. Lexis 175320.)

No state cases support the Glaski analysis. We follow the federal lead in rejecting

this minority holding. Plaintiff alleges nothing unlawful except that an allegedly

deficient assignment and securitization deprived Wells Fargo of an interest in the

property. She has no standing to make such a claim.

C. Tender

Another fundamental obstacle to Williams being able to state a claim is that she

has not complied with the rule requiring tender. Williams disagrees that she must tender

the amount owing. Williams relies on Pfeifer v. Countrywide Home Loans, Inc. (2012)

211 Cal.App.4th 1250, and other cases involving wrongful foreclosure, but Williams has

not asserted a cause of action to enjoin a foreclosure. Instead, her causes of action are for

quiet title, slander of title, and cancellation of instruments. California law holds a

mortgagor cannot bring an action to quiet title without first paying the secured debt owed

on the property. (Shimpones v. Stickney (1934) 219 Cal. 637, 649 [“[A] mortgagor

7 cannot quiet his title against the mortgagee without paying the debt secured.”].) Williams

cannot allege a cause of action for quiet title.

D. Additional Claims

Williams concedes that her third cause of action for constructive trust is a remedy

not an independent claim for relief. The remaining second and fourth causes of action are

for cancellation of instruments and slander of title. On appeal, Williams only recites the

elements of her claims and offers the conclusory statement that her allegations are

sufficient to withstand demurrer. Williams does not provide pertinent legal argument nor

meet her burden of affirmatively showing error in the ruling appealed from. Therefore,

these claims also fail. (Fonteno v. Wells Fargo Bank, N.A. (2014) 228 Cal.App.4th 1358,

1378, citing Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th, 691, 699-

700 and Lennane v. Franchise Tax Bd. (1996) 51 Cal.App.4th 1180, 1189.)

IV

DISPOSITION

Williams lacks standing and failed to allege the required tender. Her complaint is

defective for other reasons. Williams does not propose, in what way in the trial court or

on appeal, she could amend her complaint. We reject her contention the trial court erred

in sustaining defendants’ demurrer without leave to amend.

8 We affirm the judgment. Defendants, as the prevailing parties, shall recover their

costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

CODRINGTON

J.

We concur:

RAMIREZ

P. J.

KING

J.

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