6 Cal. App. 5th 802
Cal. Ct. App.2016Background
- Maria Mendoza borrowed $540,600 in 2007; she defaulted and a nonjudicial foreclosure sale occurred in 2011, resulting in a Trustee’s Deed Upon Sale to Chase Home Finance LLC.
- Recorded chain: Chase assigned its beneficial interest to Chase Home Finance LLC; California Reconveyance Company was substituted as trustee and conducted the foreclosure sale.
- Mendoza alleged the assignment/substitution were fraudulent (robo-signing) and that her loan was improperly securitized (transferred into REMIC trusts after the trusts’ closing dates), so the foreclosing parties lacked authority.
- Mendoza sued for wrongful foreclosure, quiet title, and declaratory relief; the trial court sustained a demurrer without leave to amend and entered judgment for defendants.
- On remand after Yvanova, the appellate court reviewed whether Mendoza had standing to challenge the assignment as void (per Yvanova) versus voidable under governing law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge assignment and foreclosure | Mendoza: assignment was void because it was post‑closing into REMIC trusts and/or robo‑signed, so she may sue for wrongful foreclosure | Defendants: New York trust law (and PSA terms) make such defects voidable and only beneficiaries can ratify; Mendoza lacks standing | Held: Mendoza lacks standing — alleged defects render assignments at most voidable, not void, so borrower cannot challenge them |
| Effect of post‑closing transfer into REMIC trust | Mendoza: late transfers violate PSA and federal REMIC tax rules, making transfers void and unenforceable | Defendants: tax consequences do not make an otherwise unauthorized trustee act void; REMIC rules do not give third‑party borrowers enforcement rights | Held: Loss of favorable tax status does not render the transfer void; transfers are voidable under New York law |
| Robo‑signature allegation | Mendoza: robo‑signing rendered the assignment void ab initio, invalidating the foreclosure | Defendants: robo‑signing (if proven) creates a voidable defect that the trust/assignor could ratify; borrower is not the injured party with power to void | Held: Robo‑signing allegations, even if true, make assignments voidable, not void; borrower lacks standing |
| Declaratory relief and quiet title after sale | Mendoza: seeks declarations and quiet title based on alleged invalid assignment/foreclosure | Defendants: relief is derivative of wrongful foreclosure claim and fails if plaintiff lacks standing; quiet title also fails because plaintiff hasn't paid the secured debt or shown paramount title | Held: Declaratory relief and quiet title claims fail; no live controversy and plaintiff cannot show superior title |
Key Cases Cited
- Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (2016) (borrower has standing only to challenge an assignment that is void, not one that is merely voidable)
- Glaski v. Bank of America, 218 Cal.App.4th 1079 (2013) (held post‑closing transfers could be void under New York statute — minority view criticized and not followed here)
- Rajamin v. Deutsche Bank Nat’l Trust Co., 757 F.3d 79 (2d Cir. 2014) (post‑closing transfers to REMIC trusts are voidable; beneficiaries may ratify trustee acts; nonbeneficiaries lack standing)
- Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal.App.4th 808 (2016) (following Rajamin; borrower lacked standing to challenge alleged late transfer and robo‑signing)
- Yhudai v. IMPAC Funding Corp., 1 Cal.App.5th 1252 (2016) (post‑Yvanova decision holding postclosing assignments are voidable under New York law; borrower lacks standing)