Torres v. Flagstone Bank CA2/6

Filed 7/23/13 Torres v. Flagstone Bank CA2/6 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

JOHN HENRY TORRES, 2d Civil No. B240936 (Super. Ct. No. 56-2011-00390821-CU- Plaintiff and Appellant, OR-SIM) (Ventura County) v.

FLAGSTONE BANK FSB, FEDERAL NATIONAL MORTGAGE ASSOCIATION, et al.,

Defendants and Respondents.

John Henry Torres' house was sold at a foreclosure sale after he defaulted on a loan secured by a deed of trust on the house. After the foreclosure, Torres (appellant) filed this lawsuit against the lender, Flagstar Bank, FSB (Flagstar), its nominee, Mortgage Electronic Registration Systems, Inc. (MERS), and other entities involved in the foreclosure process. The trial court sustained without leave to amend respondents' demurrer to appellant's third amended complaint. He appeals from the resulting order dismissing the action, contending he alleged facts sufficient to state causes of action for negligence, fraud and wrongful foreclosure because the foreclosure occurred without a notice of default and because the lender concealed the participation of MERS and the Federal National Mortgage Association (Fannie Mae) in the loan and deed of trust. We affirm.

Facts In March 2007, appellant and his wife executed a deed of trust in favor of Mortgage Electronic Registration Systems, Inc. (MERS) as beneficiary and nominee for the lender, Flagstar Bank, FSB (Flagstar). The deed of trust secures a promissory note for $385,000 and covers a single family home in Simi Valley (the Property). In June 2012, MERS assigned its beneficial interest under the deed of trust to Flagstar, and Flagstar assigned its interest to Fannie Mae. At the same time, PLM Lender Services, Inc. (PLM) was substituted as the trustee under the deed of trust. The assignments were recorded in June 2010 and March 2011, respectively. The substitution of trustee was recorded in January 2011. A notice of default was recorded with respect to the property on June 22, 2010. A notice of trustee's sale was recorded on January 4, 2011. The property was sold to Fannie Mae at the trustee's sale on March 2, 2011. The trustee's deed upon sale was recorded on March 4, 2011. Appellant filed his original complaint in February 2011. After demurrers were sustained with leave to amend, appellant filed a second amended complaint in May 2011. The pleading alleges 16 causes of action related to what appellant believes was a wrongful foreclosure. He contends among other things that Fannie Mae's participation in the loan was concealed from him, that Flagstar Bank was a servicing agent and not the lender, that MERS lacked authority to transact business in the state of California, and that the foreclosure sale occurred without a valid notice of default, and that the substitutions of trustee were invalid. These factual allegations are contradicted by the documents attached as exhibits to the complaint which include the notice of default and recorded substitutions of trustee. The trial court sustained respondents' demurrers with leave to amend. Its lengthy minute order gave a detailed description of the defects in appellant's pleading and the allegations he would need to make to withstand a subsequent demurrer. Appellant filed his third amended complaint in November 2011, alleging causes of action for negligence, fraud and wrongful foreclosure based on the same facts alleged in his previous pleadings. Respondents once again demurred, on the ground that