Fontenot v. Wells Fargo Bank, N.A.
198 Cal. App. 4th 256
| Cal. Ct. App. | 2011Background
- Fontenot sued Wells Fargo, MERS, HSBC and others after default and foreclosure on a $1 million note secured by a deed of trust.
- Fourth amended complaint alleged wrongful foreclosure due to Wells Fargo’s breach of a forbearance agreement and invalid MERS note/deed assignments.
- Trial court sustained demurrers, taking judicial notice of recorded instruments they relied on to defeat the claims.
- Key events included 2006 loan, 2007 default, 2007 MERS assignment to HSBC, 2008 forbearance with monthly payments, and 2008 foreclosure sale.
- Court previously required attaching the written forbearance agreement; plaintiff attached it and argued March letter amended the agreement.
- On appeal, the court affirmed demurrers, concluding no viable wrongful-foreclosure claim against MERS or Wells Fargo based on the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court properly took judicial notice of recorded documents | Fontenot contends notice of documents is improper for truth of statements. | MERS argues proper notice of documents and legal effects, not truth of assertions. | No abuse; proper to notice legal effects from documents. |
| Whether MERS could assign the note and deed of trust | MERS lacked authority to assign the note; HSBC never received a valid assignment. | MERS acted as lender’s nominee with authority via agency; assignment valid as to lender's interest. | Assignment valid; MERS could assign as nominee; plaintiff failed to plead invalidity. |
| Whether HSBC, not MERS, had authority to foreclose and the sale was valid | HSBC lacked valid assignment of debt, rendering foreclosure invalid. | Nonjudicial foreclosure presumes regularity; burden on plaintiff to show irregularity and prejudice. | Plaintiff failed to state a prejudicial irregularity; sale presumed regular. |
| Whether the forbearance agreement, as amended by the March letter, supports a claim for breach or promissory estoppel | March letter amended the forbearance; Wells Fargo breached or promissory estoppel applies. | Adherence to the forbearance requires attaching the March letter; leave to amend conditioning was proper. | No viable claim; absence of attached March letter to support amendment; promissory estoppel fails due to consideration. |
| Whether plaintiff should have been allowed to amend to cure defects | Should have been allowed to attach March letter to cure pleadings. | Trial court did not abuse discretion; March letter not provided, cure not shown. | No abuse; amendment not proven capable of curing defects. |
Key Cases Cited
- Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (Cal. Ct. App. 2011) (MERS authority to foreclose without owner’s express authorization)
- Ferguson v. Avelo Mortgage, LLC, 195 Cal.App.4th 1618 (Cal. Ct. App. 2011) (MERS authority; defects in notice of substitution; cure period analysis)
- Poseidon Development, Inc. v. Woodland Lane Estates, LLC, 152 Cal.App.4th 1106 (Cal. Ct. App. 2007) (judicial notice of recorded documents and legal effect of language)
- Mangini v. R. J. Reynolds Tobacco Co., 7 Cal.4th 1057 (Cal. 1994) (limitations on judicial notice of the truth of statements in documents)
- Herrera v. Deutsche Bank National Trust Co., 196 Cal.App.4th 1366 (Cal. Ct. App. 2011) (limitations on judicial notice of the truth of facts within documents)
- Melendrez v. D&I Investment, Inc., 127 Cal.App.4th 1238 (Cal. Ct. App. 2005) (presumption of regularity in nonjudicial foreclosure; burden to show prejudice)