Barnes

BACKGROUND

This action arises out of a $250,000 loan made in 2008 to borrowers and others by lender’s assignor, Dove Street Capital Lenders, secured by deeds of trust on two separate residential properties, one of which was owned by borrowers. Lender commenced this action against borrowers seeking initially to judicially foreclose on the deeds of trust. That action was later dismissed as time-barred. Before the dismissal of lender’s action, borrowers filed the cross-action that is the subject of this appeal, seeking to prevent foreclosure and to obtain declaratory relief as to the rights and obligations of the parties. Borrowers obtained a preliminary injunction in October 2018 barring foreclosure of the property during pendency of the action. In their operative fourth amended cross-complaint, borrowers asserted causes of action for declaratory relief, accounting, cancellation of the deed of trust, and quite title. Lender demurred, and the trial court sustained the demurrer, without leave to amend, on the ground that California law

2 prohibits a defaulting borrower from maintaining a preemptive lawsuit seeking to prevent a nonjudicial foreclosure. An order dissolving the…