Yvanova v. New Century Mortgage Corp. CA2/1
226 Cal.App.4th 495
Cal. Ct. App.2014Background
- In 2006, Yvanova executed a $483,000 promissory note secured by a deed of trust on her Woodland Hills residence; lender/beneficiary was New Century Mortgage; trustee was Stewart Title.
- The deed of trust authorized substitution of the trustee and assignment of the note without borrower notice, and permitted sale upon default.
- In August 2008, the trustee served notice of default; during New Century’s bankruptcy, the deed of trust was assigned to Deutsche Bank National Trust Company as trustee for a securitized trust (Morgan Stanley ABS Capital I Inc. Trust 2007-HE1).
- In January 2012, Deutsche Bank served a second notice of default; Western Progressive, LLC, was substituted as trustee in February 2013; a trustee’s sale was conducted in August 2012 and the property was sold to THR California, LLC.
- Yvanova filed suit on May 14, 2012 seeking to quiet title (and other relief); the second amended complaint alleged various defects in assignments and securitization and challenged the validity of the securitization chain.
- The trial court sustained a demurrer without leave to amend for lack of tender, and no judgment is included in the record on appeal; the Court of Appeal later considered whether the allegations could support a wrongful-foreclosure claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to quiet title given non-tender | Yvanova asserts Deutsche Bank lacked standing to foreclose due to defective chain of title. | Defendants contend tender is required to quiet title and plaintiff failed to tender the loan balance. | Demurrer upheld; no standing without tender. |
| Impact of alleged improper assignments on standing to seek relief | Transfer defects render Deutsche Bank’s interest void and authorize quiet title and related relief. | Transfer irregularities affect only the parties to the transaction; plaintiff cannot enforce rights of strangers. | No standing to quiet title; complaints fail as a matter of law. |
| California law on Glaski-like challenges to securitization | borrower may challenge foreclosures based on void transfers in the chain of title under Glaski. | CA courts do not follow Glaski; standing principles require direct injury and cannot be based on hypothetical claimants. | Reject Glaski; follow Jenkins; no basis to challenge securitization in this case. |
Key Cases Cited
- Aguilar v. Bocci, 39 Cal.App.3d 475 (Cal. Ct. App. 1974) (tender required to quiet title)
- Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal.App.4th 497 (Cal. Ct. App. 2013) (borrower lacks standing to enforce securitized-note transfers)
- Glaski v. Bank of America, 218 Cal.App.4th 1079 (Cal. Ct. App. 2013) (adopted by some jurisdictions; CA not followed here)
- Reinagel v. Deutsche Bank Nat’l Trust Co., 722 F.3d 700 (5th Cir. 2013) (noncompliance with pooling and servicing agreements may void an assignment)