Rochambeau v. Wells Fargo Bank CA1/1

Filed 8/21/14 Rochambeau v. Wells Fargo Bank CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

FIRST APPELLATE DISTRICT

DIVISION ONE

RODRIQUE ROCHAMBEAU et al.,
Plaintiffs and Appellants,
A139088
v.
WELLS FARGO BANK, N.A. et al., (Humboldt County
Super. Ct. No. DR120434)
Defendants and Respondents.

Plaintiffs Rodrique Rochambeau and Prince Song Cambilargiu appeal, in propria
persona, from a judgment of dismissal following the sustaining, without leave to amend,
of demurrers by defendants Wells Fargo Bank, N.A. (Wells Fargo) and HSBC Bank
USA, N.A. (HSBC). On appeal, plaintiffs contend they alleged sufficient facts in their
first amended complaint to support causes of action for breach of contract, wrongful
foreclosure, and quiet title. We conclude otherwise and affirm the judgment of dismissal.
BACKGROUND
In December 2005, plaintiff Rodrique Rochambeau obtained a $359,650 loan from
First Magnus Financial Corporation (First Magnus) secured by a deed of trust that named
Mortgage Electronic Registration Systems, Inc. (MERS) as beneficiary and sole nominee
for the lender, its successors, and assigns. In 2006, Wells Fargo became the servicer of
Rochambeau’s loan.
By the end of 2008, Rochambeau was behind in his payments by $24,348.29, and
NDex West, LLC (NDex), “as agent for Beneficiary,” recorded a notice of default in

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December of that year, despite not being formally substituted as trustee under the deed of
trust until January 2009.
Also in January 2009, MERS, as nominee for First Magnus, assigned the deed of
trust to HSBC, as “TRUSTEE FOR DBALT 2006-AFI.” According to plaintiffs, the
recordation of the deed of trust was irregular because it was done over three years after
the mortgage pool trust, DBALT 2006-AFI, allegedly closed in March of 2006.
In June 2011, the property was sold through a foreclosure sale. The balance then
due on Rochambeau’s loan was $452,880.08. Two months after the sale, Cambilargiu,
on behalf of Rochambeau, sent Wells Fargo a “draft” in the amount of $387,500.1 The
document, which plaintiffs attached to their operative pleading, did not identify an
account from which funds could be taken and required the bearer to process the draft
through the Department of Treasury.
In 2012—a year after the trustee’s sale and his interest in the property ended—
Rochambeau recorded a quitclaim deed, purportedly transferring a 5 percent interest in
the property to plaintiff Cambilargiu. Later that year, Rochambeau and Cambilargiu filed
a complaint against Wells Fargo, HSBC and First Magnus. Amongst various causes of
action, plaintiffs asserted three against Wells Fargo and HSBC: breach of contract, quiet
title, and wrongful foreclosure.
Wells Fargo and HSBC demurred to the initial complaint. As to the breach of
contract, quiet title, and wrongful foreclosure claims, Wells Fargo and HSBC primarily
argued plaintiffs had not alleged tender of the full loan obligation. The trial court
sustained the demurrers as to these three causes of action, but granted plaintiffs leave to
amend.
1
At defendants’ request, the trial court took judicial notice of the date of the
foreclosure sale. Taking judicial notice of the legal effect of recorded documents, on
demurrer, is appropriate, even if they contradict allegations of a complaint. (Fontenot v.
Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264–267 (Fontenot) [“a court may
take judicial notice of the fact of a document’s recordation, the date the document was
recorded and executed, the parties to the transaction reflected in a recorded document,
and the document’s legally operative language, assuming there is no genuine dispute
regarding the document’s authenticity”].)

2
 Plaintiffs filed a first amended complaint (FAC), reasserting against Wells Fargo
and HSBC the three claims. Defendants again demurred.
At the hearing, the trial court sustained the demurrers with prejudice, then filed a
written ruling. The trial court ruled plaintiffs had not properly alleged tender and this
was fatal to “any claims pled in the FAC based on the alleged tender of payment.”
Additionally, as to the wrongful foreclosure and quiet of title claims, the trial court
sustained the demurrers on the ground the FAC failed to allege facts demonstrating
plaintiffs suffered prejudice from any asserted irregularities in the foreclosure process
(such as NDex’s signing the notice of default before it was formally substituted as
trustee). Rather, plaintiffs were quibbling over formalities while not disputing their
delinquency and the appropriateness of foreclosure (had it been carried out with every
formality met). The court also ruled the alleged irregularities could not support the
breach of contract claim; just as there were no sufficient allegations of prejudice, there
were no sufficient allegations of damages.
Plaintiffs timely appealed.
DISCUSSION
Standard of Review
When the trial court dismisses a case after sustaining a demurrer without leave to
amend, we ordinarily “review the complaint de novo to determine whether it contains
facts sufficient to state a cause of action under any legal theory” and, if the complaint is
lacking, “we then consider whether the court abused its discretion in denying leave to
amend the complaint.” (Estate of Dito (2011) 198 Cal.App.4th 791, 800.) In doing so,
we decide whether there is a reasonable possibility any pleading defect can be cured by
amendment. (Whitemore v. Owens Healthcare-Retail Pharmacy, Inc. (2010)
185 Cal.App.4th 1194, 1199.) “The burden of proving such reasonable possibility is
squarely on the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “As a general
rule, if there is a reasonable possibility the defect in the complaint could be cured by
amendment, it is an abuse of discretion to sustain a demurrer without leave to amend.”
(City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th

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445, 459.) “Nevertheless, where the nature of the plaintiff’s claim is clear, and under
substantive law no liability exists, a court should deny leave to amend because no
amendment could change the result.” (Ibid.)2
Breach of Contract
In order to state a claim for breach of contract, plaintiffs had to allege the
existence of a contract, Rochambeau’s performance under the contract, breach by
defendants, and resultant damages. (See, e.g., First Commercial Mortgage Co. v. Reece
(2001) 89 Cal.App.4th 731, 745; McDonald v. John P. Scripps Newspaper (1989)
210 Cal.App.3d 100, 104; see also Brown v. Grimes (2011) 192 Cal.App.4th 265, 277 [A
breach is an unjustified failure or refusal to perform a contractual obligation.].)
According to plaintiffs, Wells Fargo and HSBC breached the deed of trust and
note by foreclosing on the property despite Rochambeau’s “payoff” of the home loan by
means of a “Draft Receipt.” This argument is meritless.
To begin with, the purported draft was proffered two months after the foreclosure
sale and thus was two months too late.3 A trustor may redeem property from foreclosure
at any time prior to the sale by exercising his equitable right of redemption. (Knapp v.

2
In their opening brief, plaintiffs request this court to consider three exhibits
purportedly attached to the brief—Exhibit A, a Grant Deed and Deed of Trust; Exhibit B,
the opinion Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079 (Glaski); and
Exhibit C, a document to suggest First Magnus was bankrupt and no longer existed at the
time of the execution of the note and deed of trust. However, these proffered exhibits
are, in fact, not attached to the brief. In any case, the grant deed and deed of trust were
attached as exhibits to the FAC, and therefore are already part of the record. (See Dodd
v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1626–1627 [“facts
appearing in exhibits attached to the complaint will . . . be accepted as true”].) California
case law, in turn, need simply be cited in the legal discussion of a brief. Finally, with
respect to the asserted bankruptcy of First Magnus, plaintiffs do not explain its supposed
relevance. We therefore do not “judicially notice” any of these items.
3
Since the purported draft was attached to the FAC, this court, as did the trial
court, can determine, as a matter of law, whether it constituted valid tender of payoff.
(See Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1447 [“We
may also take notice of exhibits attached to the complaints. If facts appearing in the
exhibits contradict those alleged, the facts in the exhibits take precedence.”].)

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Doherty (2004) 123 Cal.App.4th 76, 87 (Knapp).) “ ‘Once the trustee’s sale is
completed, the trustor has no rights of redemption.’ ” (Ibid.; Ballengee v. Sadlier (1986)
179 Cal.App.3d 1, 5; 4 Miller & Starr, Cal. Real Estate (3d ed. 2013) § 10:266, p. 10-
1073 [after a foreclosure sale, “[n]either the trustor nor any other person having an
interest in the property can redeem or otherwise recover the property regardless of any
willingness to pay the debt”].) Thus, the tardiness of the purported payoff was an
incurable legal impediment to the plaintiffs’ claim, and the demurrers were properly
sustained as to their breach of contract claim on this ground alone.
In addition, the purported draft was not for a sufficient amount. A tender is an
offer of performance made with the intent to extinguish an obligation. (Civ. Code,
§ 1485.) “As a general rule, the debtor in a nonjudicial foreclosure may avoid the loss of
the property by ‘pay[ing] all amounts due at any time prior to the sale . . . .’ ” (Multani v.
Witkin & Neal (2013) 215 Cal.App.4th 1428, 1444–1445, quoting Knapp, supra,
123 Cal.App.4th at pp. 86–87 italics added; Gaffney v. Downey Savings & Loan Assn.
(1988) 200 Cal.App.3d 1154, 1165 [a credible offer to tender the full amount of the
indebtedness by the borrower is necessary to set aside a foreclosure sale under a deed of
trust].) Here, the purported draft was for less than the amount owed—at the time of the
sale Rochambeau owed $452,880, yet the draft was only for $387,500.
Finally, the purported draft was not a form of payment legally sufficient to satisfy
Rochambeau’s payoff obligation. (See McElroy v. Chase Manhattan Mortgage Corp.
(2005) 134 Cal.App.4th 388, 392 (McElroy) [“court properly sustained Chase’s and
Finicle’s demurrers because the Bill is worthless on its face”].) Notably, the draft failed
to identify where the payee could obtain the supposedly-tendered funds—that is, there
was no account number identifying where the funds reside. Indeed, Cambilargiu has
tried this artifice before and met summary rejection in the United States Court of Appeals
for the Eighth Circuit. (See Cambilargiu v. Bank of America, N.A. (8th Cir. 2013)
549 Fed.Appx. 590, 591 [“The district court also properly concluded that Cambilargiu’s
draft instruments were invalid because they were not drawn on a bank, contained no
drawee, and conditioned payment upon the passage of 50 years.”]; cf. McElroy, supra,

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134 Cal.App.4th at p. 392 [a “Bill” purporting to pay off a loan “is not a check because it
is not drawn on a bank” and otherwise had no legitimacy].) In short, the purported draft
here was “a worthless piece of paper, consisting of nothing more than a string of words
. . . signifying nothing.” (McElroy, at p. 393.)
In sum, plaintiffs breach of contract claim necessarily fails for lack of valid tender
of the debt due at the time of foreclosure.
Quiet Title
“It is settled in California that a mortgagor cannot quiet his title against the
mortgagee without paying the debt secured.” (Shimpones v. Stickney (1934) 219 Cal.
637, 649.) “Allowing plaintiffs to recoup the property without full tender would give
them an inequitable windfall, allowing them to evade their lawful debt.” (Stebley v.
Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526; see also Gavina v. Smith
(1944) 25 Cal.2d 501, 506 [“One who violates his contract cannot have recourse to equity
to support that very violation.”].)
Since, as discussed above, plaintiffs failed to allege any legally adequate tender,
their quite title claim, like their breach of contract claim, necessarily fail.
Wrongful Foreclosure
Plaintiffs base their wrongful foreclosure claim on the assertion the transfer of
interest in the promissory note and deed of trust from MERS to HSBC was improper
because assignment of the deed of trust from MERS to HSBC, as trustee for DBALT
2006-AFI, was recorded three years after the mortgage pool trust allegedly closed in
2006.
However, under California law, “the relevant parties to such a transaction [are] the
holders (transferors) of the promissory note and the third party acquirers (transferees) of
the note,” not the person owing under the note. (Jenkins v. JPMorgan Chase Bank, N.A.
(2013) 216 Cal.App.4th 497, 515; Herrera v. Federal National Mortgage Assn. (2012)
205 Cal.App.4th 1495, 1507 (Herrera) [“ ‘Because a promissory note is a negotiable
instrument, a borrower must anticipate it can and might be transferred to another
creditor.’ ”].) “[W]here a deed of trust is involved, the trustee may initiate foreclosure

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irrespective of whether an assignment of the beneficial interest is recorded.” (Haynes v.
EMC Mortgage Corp. (2012) 205 Cal.App.4th 329, 336 (Haynes); see also Herrera, at
p. 1510 [“Nothing in the comprehensive statutory scheme governing nonjudicial
foreclosures [citations] contains a requirement that [the] assignment of the [deed of trust]
. . . must be acknowledged and recorded before the foreclosure sale . . . .”].)
“Accordingly, there was no requirement that the assignment from MERS to [HSBC] be
recorded prior to the institution of nonjudicial foreclosure.” (Haynes, at p. 337.)
Plaintiffs’ wrongful foreclosure theory therefore fails on this ground, alone.
In addition, “a plaintiff in a suit for wrongful foreclosure has generally been
required to demonstrate the alleged imperfection in the foreclosure process was
prejudicial to the plaintiff’s interests.” (Fontenot, supra, 198 Cal.App.4th at p. 272.)
“Prejudice is not presumed from ‘mere irregularities’ in the process.” (Ibid.) “[E]ven if
any subsequent transfers of the promissory note were invalid, [plaintiffs are] not the
victim[s] of such invalid transfers because [their] obligations under the note remained
unchanged. Instead, the true victim may be an individual or entity that believes it has a
present beneficial interest in the promissory note and may suffer the unauthorized loss of
its interest in the note.” (Jenkins, supra, 216 Cal.App.4th at p. 515.) Here, plaintiffs also
have not, and cannot, allege prejudice from any alleged delay in the recording of the
assignment. (See Herrera, supra, 205 Cal.App.4th at pp. 1498, 1507 [affirming order
sustaining demurrer to wrongful foreclosure action without leave to amend where
plaintiffs were not prejudiced].) Nor can they assert the original lender “would have
refrained from foreclosure under the circumstances presented.” (Fontenot, supra,
198 Cal.App.4th at p. 272.) Indeed, Rochambeau was severely in default, his balance
owing far exceeding the initial value of the loan.
Plaintiffs cite Glaski, supra, 218 Cal.App.4th 1079, in support of their assertion
they can plead a wrongful foreclosure claim if they allege specific facts showing the
foreclosure was not initiated by the correct entity. (Id. at p. 1094.) In that case, the Court
of Appeal held a borrower, whose loan had been securitized by being placed into a trust
formed under New York law, had standing to challenge an assignment of his note

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because the defendants failed to assign it before the trust’s closing date, creating a defect
in the chain of title. (Id. at pp. 1096–1097.) The court stated if the assignment was void,
the defendant could not initiate a lawful foreclosure proceeding because it did not have a
legal right to the property. (Id. at pp. 1095–1097.)
In Glaski, however, the securitized trust was formed under a New York trust
statute that, according to the court, rendered the assignment of the loan “void” because
the deed of trust was assigned late. (Glaski, supra, 218 Cal.App.4th at p. 1096.)
Accordingly, on the basis of that New York statute, the court held the borrower could
state a cause of action for wrongful foreclosure. (Id. at pp. 1096–1097.) Here, in
contrast, no comparable California statute has been cited. Furthermore, Glaski has been
criticized not only as inconsistent with California’s developing foreclosure jurisprudence,
but also for adopting an incorrect view of New York’s statute. (Keshtgar v. U.S. Bank,
N.A. (2014) 226 Cal.App.4th 1201, 1207 [rejecting Glaski, as “California cases hold . . .
that even in post-foreclosure actions a borrower lacks standing to challenge an
assignment absent a showing of prejudice”]; In re Sandri (Bankr. N.D.Cal. 2013)
501 B.R. 369, 374–375 [explaining how Glaski unpersuasively departs from California
jurisprudence]; Rajamin v. Deutsche Bank Nat. Trust Co. (2d Cir. June 30, 2014, No. 13-
1614) __F.3d __ [2014 WL 2922317] [rejecting Glaski as inconsistent with other courts’
interpretations of the New York statute]; see also Siliga v. Mortgage Electronic
Registration Systems, Inc. (2013) 219 Cal.App.4th 75 [borrower has no standing to
challenge assignment of deed of trust]; Jenkins, supra, 216 Cal.App.4th 497 [same];
Fontenot, supra, 198 Cal.App.4th at p. 272 [same].)
For all of the reasons we have discussed, the trial court properly sustained the
demurrers interposed by Wells Fargo and HSBC. Additionally, denial of leave to amend
was appropriate, as plaintiffs have not articulated facts that would overcome the
deficiencies in their FAC. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074,
1081.)
We also reject plaintiffs’ vague and unsupported due process and equal protection
claims. Plaintiffs’ allegations were appropriately heard in a California superior court

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without any irregularities that would raise questions about the legitimacy of the result.
(See Southern Cal. Underground Contractors, Inc. v. City of San Diego (2003)
108 Cal.App.4th 533, 543 [“Due process is the opportunity to be heard at a meaningful
time and in a meaningful manner.”].) Plaintiffs also have not identified any cognizable
discrimination that would support an equal protection claim.
DISPOSITION
The judgment of dismissal is affirmed.

_________________________
Banke, J.

We concur:

_________________________
Humes, P. J.

_________________________
Margulies, J.

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