Brooks v. Pinnacle Financial Corp. CA2/1

Filed 9/25/15 Brooks v. Pinnacle Financial Corp. CA2/1

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 ONE

PATRICK BROOKS, B252060

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC500541)
v.

PINNACLE FINANCIAL
CORPORATION et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County, Rolf M.
Treu, Judge. Affirmed.
Patrick C. Brooks, in pro per., for Plaintiff and Appellant.
Severson & Werson, Kerry W. Franich and Jan T. Chilton for Defendant and
Respondent Bank of New York Mellon Trust Company, N.A.
Kuzyk Law and Mark J. Leonardo for Defendant and Respondent DCB United,
LLC.
Starre & Cohn and Gary A. Starre for Defendants and Respondents Varougan
Karapetian and Vincent Karapetian.
 Plaintiff Patrick Brooks (Brooks) contends that the trial court erred by sustaining
the demurrers of defendants Bank of New York Mellon Trust Company, N.A (BONY),
DCB United, LLC (DCB), and Varougan Karapetian and Vincent Karapetian
(collectively, the Karapetians) as to all of his causes of action attacking the nonjudicial
foreclosure sale of his house. We conclude that Brooks’ claims against BONY were
properly dismissed as being barred by the doctrine of res judicata and that the claims
against DCB and the Karapetians were properly dismissed pursuant to Brooks’ failure to
comply with the so-called “tender rule.” We therefore affirm the judgment of dismissal.
FACTUAL AND PROCEDURAL BACKGROUND
I. Brooks’ Loan
In October 2005, Brooks obtained a loan from Pinnacle Financial Corporation
(Pinnacle) in the amount of $768,000. The loan was secured by a deed of trust recorded
against a house owned by Brooks in Glendale, California. The beneficiary under the
deed of trust was Mortgage Electronic Registration Systems, Inc. (MERS), who also
acted as the nominee for Pinnacle. The deed of trust, inter alia, authorized the lender to
appoint successor trustees.
In November 2007, a substitution of trustee was made with regard to the deed of
trust. MERS replaced the original trustee, First American Title Insurance Company, with
Executive Trustee Services, LLC (ETS). In December 2009, MERS assigned its
beneficial interest in the deed of trust to BONY.
II. Brooks’ Default, Bankruptcy Proceedings, and Eventual Foreclosure Sale of
His House
At some point in or around 2007 to 2008, Brooks stopped making payments on his
loan. In April 2008, ETS recorded a notice of trustee’s sale, which scheduled the
foreclosure sale for May 13, 2008. On May 12, 2008—one day before his house was to
be sold at auction—Brooks filed the first of what would be six separate bankruptcy
petitions, staying the trustee’s sale.

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 On September 29, 2009, Brooks filed his third bankruptcy petition. As with his
two prior petitions, the third petition was a voluntary petition for Chapter 13 protection.
In February 2010, the third bankruptcy petition was converted to a Chapter 7 proceeding.
In February 2010 and again in July 2010, the bankruptcy court issued orders granting
BONY relief from the automatic stay so that it could enforce its remedies to foreclose
and take possession of Brooks’ house. In August 2010, Brooks received a full discharge
of his debts. During the course of his third bankruptcy proceeding, Brooks did not
disclose any of his claims against BONY.
In July 2012, in connection with Brooks’ sixth bankruptcy petition, the bankruptcy
court granted BONY’s motion for relief from the automatic stay preventing it from
selling Brooks’ home at a foreclosure sale. In granting BONY’s motion, the bankruptcy
court, found that Brooks had acted to “delay, hinder or defraud” BONY “by abusive
bankruptcy filings.” In September 2012, the bankruptcy court barred Brooks from filing
another bankruptcy petition for a year.
In October 2012, BONY completed its foreclosure sale, selling the house to DCB.
Later that same month, DCB transferred the house to the Karapetians.
III. Brooks’ First Action Regarding the Loan
In February 2011, Brooks filed an action against BONY (and GMAC Mortgage
Servicing, LLC (GMAC)) in the Los Angeles Superior Court, asserting claims for
constructive fraud and negligent misrepresentation (the First Action). According to the
complaint, the defendants made various misrepresentations in connection with the
origination of the mortgage loan and then improperly recorded a notice of default and
“executed a foreclosure.” Brooks sought damages and an order rescinding the loan and
returning the Glendale house to him and an order compelling the defendants to
“negotiate . . . a Rent To Own, Lease To Own or, a buyback of the property with an
honest loan.”
In April 2011, BONY removed the First Action to federal court on diversity
grounds. In May 2011, the federal district court granted BONY’s motion to dismiss for
failure to state a claim, finding that Brooks had failed to plead either claim with the

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requisite particularity. In addition, the court identified an “additional ground for
dismissal”: Brooks’ failure to comply with the so-called “tender rule”:
“Under California law, a plaintiff must make ‘[a] valid and viable tender of
payment of the indebtedness owing’ in order to proceed with an action to set aside a
foreclosure sale. [Citation.] A plaintiff must likewise allege that he is ‘willing and able
to tender the proceeds of the loan at issue’ before he can proceed with a claim for
rescission of the loan. [Citation.] Because Plaintiff has not alleged that he has tendered
the amount due on the loan, or offered to tender that amount, he cannot proceed with his
claims to the extent that they seek rescission of the loan or an order setting aside the
foreclosure sale and returning the property to him.”
When Brooks failed to file a timely amended complaint, the federal court
dismissed the action. Brooks did not appeal.
IV. Brooks’ Second Action Regarding the Loan
In February 2013, Brooks filed a second action in Los Angeles Superior Court
regarding the mortgage loan on his house in Glendale, his default on that loan, and the
nonjudicial foreclosure proceedings occasioned by his default (the Second Action).
Specifically, Brooks asserted claims for cancellation of instruments, violation of the
Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), and declaratory relief,
arguing in the main that the foreclosure sale was void because, inter alia, the substitution
of trustee and assignment were “robo-signed” and MERS’s assignment of its beneficial
interest in the deed of trust to BONY violated the pooling and service agreement that
securitized his mortgage loan with other such loans. In addition to BONY, Brooks
named DCB and the Karapetians as defendants.
A. The Trial Court Sustains Defendants’ Demurrers to Brooks’ Original
Complaint
In March 2013, BONY demurred to the complaint on four grounds: (1) the First
Action acts as res judicata to bar the Second Action; (2) the doctrine of judicial estoppel
bars any claims against BONY due to Brooks’ failure to disclose any claims against
BONY in his third bankruptcy proceeding; (3) Brooks’ claims are barred under the tender

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rule; and (4) MERS had the authority to foreclose and, even if it did not, Brooks failed to
allege any prejudicial procedural irregularity with the foreclosure.
In April 2013, DCB demurred to Brooks’ complaint on two principal grounds:
(1) Brooks’ failure to comply with the tender rule; and (2) MERS’s authority to foreclose.
Later that same month, the Karapetians joined in the demurrers by BONY and DCB.
On May 17, 2013, the trial court sustained the defendants’ demurrers on all
grounds without leave to amend as to the claims asserted in the original complaint. The
court, however, did grant Brooks’ request for leave to amend so as to add “claims for
negligence arising out of his request for a loan modification and for voiding the
foreclosure sale due to the failure to obtain [Brooks’] express consent to transfer the
debt.” The court cautioned that in light of its res judicata and other rulings, it “expresses
no opinion as to the sufficiency or validity of [Brooks’] proposed additional claims.”
B. The Trial Court Sustains BONY’s Demurrer to Brooks’ Amended
Complaint
In June 2013, Brooks filed an amended complaint asserting two new causes of
action against BONY: “negligence in loan modification”; and “wrongful foreclosure.”
In August 2013, BONY demurred to the amended complaint, reasserting its prior
arguments about res judicata and judicial estoppel and raising a new argument, to wit,
collateral estoppel. BONY’s collateral estoppel argument was based on a successful
unlawful detainer action that the Karapetians pursued against Brooks in the spring and
summer of 2013.1 Because Brooks’ challenge to the validity of the trustee’s sale was
rejected in the unlawful detainer action, BONY argued that the unlawful detainer
judgment granting possession of the Glendale house to the Karapetians conclusively
determined that the foreclosure sale was held in accordance with the law.
In October 2013, the trial court sustained BONY’s demurrer and denied Brooks’
request for leave to amend: “Although [Brooks] has again[ ] requested leave to amend, it

1On October 24, 2014, the Los Angeles Superior Court Appellate Division
affirmed the unlawful detainer judgment.

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is clear that [he] cannot allege facts to overcome the application of res judicata, judicial
estoppel, and collateral estoppel. Therefore leave to amend is denied.”
DISCUSSION
I. Standard of Review
“‘We independently review the ruling on a demurrer and determine de novo
whether the pleading alleges facts sufficient to state a cause of action. (McCall v.
PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) We assume the truth of the properly
pleaded factual allegations, facts that reasonably can be inferred from those expressly
pleaded, and facts of which judicial notice can be taken. (Schifando v. City of Los
Angeles (2003) 31 Cal.4th 1074, 1081.)’ . . . [¶] If the allegations in the complaint
conflict with the exhibits, we rely on and accept as true the contents of the exhibits.
However, in doing so, if the exhibits are ambiguous and can be construed in the manner
suggested by plaintiff, then we must accept the construction offered by plaintiff.” (SC
Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83.)
If, as here, the trial court sustained the demurrer without leave to amend, we must
decide whether there is a reasonable possibility the plaintiff could cure the defect with an
amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) If we find that an amendment
could cure the defect, we conclude that the trial court abused its discretion and we
reverse; if not, no abuse of discretion has occurred. (Ibid.) The plaintiff has the burden
of proving that an amendment would cure the defect.

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II. Brook’s Claims Against BONY Are Barred by the Doctrine of Res Judicata2
Where an action is filed in a California state court and the defendant claims the
suit is barred by a final federal judgment, California law will determine the res judicata
effect of the prior federal court judgment on the basis of whether the federal and state
actions involve the same primary right. (Agarwal v. Johnson (1979) 25 Cal.3d 932, 954–
955, disapproved on other grounds by White v. Ultramar, Inc. (1999) 21 Cal.4th 563.)
Under California law, “‘“[t]he doctrine of res judicata gives certain conclusive
effect to a former judgment in subsequent litigation involving the same controversy.”
[Citation.]’” (Boeken v. Philip Morris USA, Inc. (2008) 48 Cal.4th 788, 797.) “Res
judicata precludes the relitigation of a cause of action only if (1) the decision in the prior
proceeding is final and on the merits; (2) the present action is on the same cause of action
as the prior proceeding; and (3) the parties in the present action or parties in privity with
them were parties to the prior proceeding.” (Zevnick v. Superior Court (2008) 159
Cal.App.4th 76, 82.) Res judicata bars the litigation not only of issues that were actually
litigated in the prior proceeding, but also issues that could have been litigated in that
proceeding. (Busick v. Workmen’s Comp. Appeals Bd. (1972) 7 Cal.3d 967, 974–975.)
“A predictable doctrine of res judicata benefits both the parties and the courts because it
‘seeks to curtail multiple litigation causing vexation and expense to the parties and
wasted effort and expense in judicial administration.’” (Mycogen Corp. v. Monsanto Co.
(2002) 28 Cal.4th 888, 897.)
For purposes of applying the doctrine of res judicata, the phrase “cause of action”
has a precise and particular meaning: The cause of action is the right to obtain redress for

2 For BONY, this appeal relates to the trial court’s orders sustaining its demurrers
to both the original complaint and to the amended complaint, because Brooks did not
reallege any causes of action against BONY from his original pleading in his amended
one. (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services
Group., Inc. (2009) 171 Cal.App.4th 35, 44.) Correspondingly, because, Brooks did not
assert any causes of action against either DCB or the Karapetians in his amended
complaint, this appeal only pertains to the trial court’s order sustaining their demurrers to
the original complaint.

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a harm suffered, regardless of the specific remedy sought or the legal theory (common
law or statutory) advanced. (See Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual
Ins. Co. (1993) 5 Cal.4th 854, 860.)
As explained by our Supreme Court, California’s res judicata doctrine and its
definition of “cause of action” is based upon the primary right theory:
“The primary right theory is a theory of code pleading that has long been followed
in California. It provides that a ‘cause of action’ is comprised of a ‘primary right’ of the
plaintiff, a corresponding ‘primary duty’ of the defendant, and a wrongful act by the
defendant constituting a breach of that duty. [Citation.] The most salient characteristic
of a primary right is that it is indivisible: the violation of a single primary right gives rise
to but a single cause of action. [Citation.]
“As far as its content is concerned, the primary right is simply the plaintiff’s right
to be free from the particular injury suffered. [Citation.] It must therefore be
distinguished from the legal theory on which liability for that injury is premised: ‘Even
where there are multiple legal theories upon which recovery might be predicated, one
injury gives rise to only one claim for relief.’ [Citation.] The primary right must also be
distinguished from the remedy sought: ‘The violation of one primary right constitutes a
single cause of action, though it may entitle the injured party to many forms of relief, and
the relief is not to be confounded with the cause of action, one not being determinative of
the other.’ [Citation.]
“The primary right theory . . . is invoked . . . when a plaintiff attempts to divide a
primary right and enforce it in two suits. The theory prevents this result by either of two
means: (1) if the first suit is still pending when the second is filed, the defendant in the
second suit may plead that fact in abatement [citations]; or (2) if the first suit has
terminated in a judgment on the merits adverse to the plaintiff, the defendant in the

8
second suit may set up that judgment as a bar under the principles of res judicata.”
(Crowley v. Katleman (1994) 8 Cal.4th 666, 681–682.)3
In short, under California law, the significant factor guiding the application of the
doctrine is whether the “cause of action” is for invasion of a single primary right; whether
the same facts are involved in both suits is not conclusive. (Agarwal v. Johnson, supra,
25 Cal.3d at pp. 954–955.)
A. The Decision in the First Action Was Final and on the Merits
“Full faith and credit must be given to a final order or judgment of a federal
court.” (Levy v. Cohen (1977) 19 Cal.3d 165, 172–173; Code Civ. Proc., § 1908.) A
dismissal under rule 41 of the Federal Rules of Civil Procedure (28 U.S.C.) operates as an
adjudication “on the merits” unless the dismissal is for lack of jurisdiction, improper
venue, or failure to join a necessary party. (Fed. Rules Civ.Proc., rule 41(b), 28 U.S.C.;
Stewart v. United States Bancorp (9th Cir. 2002) 297 F.3d 953, 956.) In particular, a
dismissal under rule 12(b)(6) of the Federal Rules of Civil Procedure (28 U.S.C.) for
failure to state a claim is regarded by federal courts as a judgment on the merits.
(Federated Dep't Stores v. Moitie (1981) 452 U.S. 394, 399, fn. 3 [101 S.Ct. 2424, 69
L.Ed.2d 103]; Stewart, at p. 957.) Here, the judgment in the First Action was not for lack
of jurisdiction, improper venue, or failure to join a necessary party. Rather, it was for
Brooks’ failure to state a claim and, as such it was a judgment on the merits.
B. The First and Second Actions Involved the Same Primary Right
The First and Second Actions involved the same property, the same mortgage
loan, the same default on that loan, and the same alleged misconduct by BONY. For
example, in the First Action, Brooks alleged that BONY had engaged in fraud by
“representing to Plaintiff and to third parties” that it was the owner of his promissory note

3 In contrast, the federal courts utilize a transactional analysis; i.e., two suits
constitute a single cause of action if they both arise from the same “‘transactional nucleus
of facts’” (Derish v. San Mateo–Burlingame Bd. of Realtors (9th Cir. 1983) 724 F.2d
1347, 1349, overruled on other grounds in Eichman v. Fotomat Corp. (9th Cir. 1985) 759
F.2d 1434, 1437) or a single “‘core of operative facts.’” (Shaver v. F. W. Woolworth Co.
(7th Cir. 1988) 840 F.2d 1361, 1365.)

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and deed of trust and had then initiated foreclosure proceedings without disclosing its
“true role.” In the Second Action, Brooks also alleged (in both his original and in his
amended complaint) that BONY had no beneficial interest in the deed of trust and no
legal authority to exercise the power to sell the property at a foreclosure sale. Most
critically for res judicata purposes, the First and Second Actions allege the same
fundamental harm to Brooks—the loss of his Glendale house through foreclosure. In
short, although Brooks advanced a number of different legal theories and sought a variety
of different remedies in the First and Second Actions, he alleged in both the violation of a
single primary right: the right to own the Glendale property.
C. The First and Second Actions Involved the Same Parties
With regard to the third prerequisite for application of the res judicata doctrine,
BONY was a named defendant in both of Brooks’ actions.
Brooks attempts to escape from the preclusive effect of the adverse judgment in
the First Action by making three principal arguments. First, he argues that the dismissal
in the First Action was voluntary and therefore not on the merits, because he elected not
to file an amended complaint. Under federal law, however, a voluntary dismissal occurs
only if the plaintiff either serves a notice of dismissal before a party answers or a secures
a stipulation of dismissal from all of the parties who have appeared. (Fed. Rules
Civ.Proc., rule 41(a), 28 U.S.C.) In the First Action, Brooks did not file a notice of
dismissal (either before or after the district court granted BONY’s motion to dismiss) or
secure the necessary stipulation. Moreover, Brooks’ argument completely neglects the
fact that a dismissal for failure to state a claim is regarded by federal courts as an
adjudication on the merits. (Federated Dep't Stores v. Moitie, supra, 452 U.S. at p. 399,
fn. 3.)
Second, Brooks argues that res judicata does not bar his claim against BONY
because the First and Second Action involve different claims and facts. For example, in
his amended complaint in the Second Action, Brooks asserts a claim regarding his
unsuccessful efforts to obtain an acceptable modification of his mortgage loan; this claim

10
and the facts supporting it are not discussed, at least not explicitly, in his complaint in the
First Action.4
Brooks’ argument misses the defining essence of California’s res judicata
doctrine. For purposes of applying the doctrine of res judicata, the phrase “cause of
action” has a precise and particular meaning: The cause of action is the right to obtain
redress for a harm suffered, regardless of the specific remedy sought or the legal theory
(common law or statutory) advanced. (See Bay Cities Paving & Grading, Inc. v.
Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 860.) “The significant factor,” for
application of res judicata in California, “is the harm suffered; that the same [or different]
facts are involved in both suits is not conclusive.” (Agarwal v. Johnson, supra, 25 Cal.3d
at p. 954, italics added; see Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668,
1684.) The harm for which Brooks seeks relief in both the First and Second Actions is
the loss of the Glendale property as a result of his default and BONY’s subsequent moves
to foreclose. Put a little differently, the center of gravity for the First and Second
Actions, the pivot point on which all other material allegations hinge in both actions is
Brooks’ default and BONY’s response thereto. Because the primary right at issue in the
First Action is identical to the primary right at issue in the Second Action, res judicata
applies.5

4The complaint in the First Action, while focused primarily on largely unspecified
misrepresentations in the loan origination process, does allude to certain unspecified
misrepresentations made “after the loan was produced and signed.”
5 It should be noted that the res judicata doctrine applies not only to claims that
were actually litigated in the prior proceeding, but also to claims that could have been
litigated in that proceeding. (Busick v. Workmen’s Comp. Appeals Bd., supra, 7 Cal.3d at
p. 975.) So, for example, with regard to his “new” loan modification claim, it appears
from Brooks’ own allegations in his amended complaint in the Second Action that such a
claim arguably could have been raised in the First Action: he sought a loan modification
in 2010 (before he filed the First Action) and received a modification which he rejected
as unacceptable in 2011. It is unclear from Brooks’ pleading whether his receipt of the
unacceptable modification occurred before or after the court-ordered date to file an
amended complaint passed.

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 Third, Brooks argues that he could not assert his wrongful foreclosure claim until
his amended complaint because such a theory was not “legally cognizable” until the
summer of 2013, when the Fifth Appellate District issued its opinion in Glaski v. Bank of
America (2013) 218 Cal.App.4th 1079 (Glaski). Whatever the merits of Glaski with
regard to a plaintiff’s standing to attack an agreement to which he is not a party,6 Brooks’

6 In Glaski, supra, 218 Cal.App.4th 1079, the plaintiff alleged a cause of action for
damages for wrongful foreclosure. The theory of the complaint in that case was that an
attempted transfer of the loan into a securitized trust located in New York was void; thus,
the foreclosing entity was not the true owner of the loan. The trial court sustained the
trustee’s demurrer without leave to amend. The court in Glaski reversed. In reversing,
the Glaski court determined that a borrower has standing to attack a void assignment to
which it is not a party. (Id. at p. 1095.)
Although some California federal courts have followed Glaski, supra, 218
Cal.App.4th 1079 (see Engler v. ReconTrust Co. (C.D.Cal., Dec. 20, 2013, No. CV12-
1165 CBM (SPx)) 2013 U.S.Dist. Lexis 179950) and Kling v. Bank of America, N.A.
(C.D.Cal., Sept. 4, 2013, No. CV 13-2648 DSF (CWx)) 2013 U.S.Dist. Lexis 184981,
most have found the decision unpersuasive. (See Haddad v. Bank of America, N.A.
(S.D.Cal., Jan. 8, 2014, No. 12cv3010-WQH-JMA) 2014 U.S.Dist. Lexis 2205;
Subramani v. Wells Fargo Bank N.A. (N.D.Cal., Oct. 31, 2013, No. C 13-1605 SC) 2013
U.S.Dist. Lexis 156556; Dahnken v. Wells Fargo Bank, N.A. (N.D.Cal., Nov. 8, 2013,
No. C 13-2838 PJH) 2013 U.S.Dist. Lexis 160686; Maxwell v. Deutsche Bank Nat. Trust
Co. (N.D.Cal., Nov. 18, 2013, No. 13-cv-03957-WHO) 2013 U.S.Dist. Lexis 164707;
Apostol v. CitiMortgage, Inc. (N.D.Cal., Nov. 21, 2013, No. 13-cv-01983-WHO) 2013
U.S.Dist. Lexis 167308; Zapata v. Wells Fargo Bank, N.A. (N.D.Cal., Dec. 10, 2013,
No. C 13-04288 WHA) 2013 U.S.Dist. Lexis 173187; Rivac v. Ndex West LLC
(N.D.Cal., Dec. 17, 2013, No. C 13-1417 PJH) 2013 U.S.Dist. Lexis 177073; Sepehry-
Fard v. Dept. Stores Nat. Bank (N.D.Cal., Dec. 13, 2013, No. 13-cv-03131-WHO) 2013
U.S.Dist. Lexis 175320.) Additionally, the Second Circuit Court of Appeals has rejected
Glaski’s view of New York law, and has concluded defective transfers of deeds of trust
are voidable, not void. (See Rajamin v. Deutsche Bank (2d. Cir. 2014) 757 F.3d 79, 90
(Rajamin).)
The decision in Glaski, supra, 218 Cal.App.4th 1079 has also come under
criticism from other California appellate courts, including the Second and Third Districts.
Our Supreme Court has granted review in three such cases. (Yvanova v. New Century
Mortg. Corp. (2014) 226 Cal.App.4th 495, review granted Aug. 27, 2014, S218973;
Keshtgar v. U.S. Bank, N.A. (2014) 226 Cal.App.4th 1201, review granted Oct. 1, 2014,
S220012; Mendoza v. JP Morgan Chase Bank, N.A. (2014) 228 Cal.App.4th 1020,
review granted Nov. 12, 2014 S220675.)

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argument with regard to Glaski and the applicability of the res judicata doctrine is
unavailing. It is well-established that a change in case law is not a sufficient reason for
denying the preclusive effect of a prior judgment between the parties:
“‘In every instance where a rule established by case law is changed by a later case
the earlier rule may be said to be “mistaken. . . .” Such “mistakes” or “injustices” are not
a ground for equity’s intervention. So to hold would be to emasculate, if not wipe out,
the doctrine of res judicata because the doctrine is most frequently applied to block
relitigation based upon contentions that a law has been changed. Our courts have
repeatedly refused to treat the self-evident hardship occasioned by a change in the law as
a reason to revive dead actions.’ [Citation.] . . . [W]here the only ‘mistake’ made in the
earlier proceedings was in assuming that the law would remain unchanged, there is no
discretion to reject the defense of res judicata.” (Slater v. Blackwood (1975) 15 Cal.3d
791, 796–797, quoting Zeppi v. State of California (1962) 203 Cal.App.2d 386, 388–389,
italics added.)
In sum, we find that Brooks’ claims against BONY in both the original complaint
and in the amended complaint are barred by the doctrine of res judicata. As a result, we
need not reach the issue of whether those claims are also barred by judicial estoppel
and/or collateral estoppel or the other arguments raised by BONY. In considering
whether the trial court abused its discretion in dismissing Brooks’ amended complaint
without leave to further amend, we find that it did not. Brooks has not met his burden of
establishing that there is a reasonable probability that he can allege facts to cure the
preclusive effect of res judicata. Accordingly, the orders of the trial court with respect to
BONY are affirmed.
III. Brook’s Claims Against DCB and the Karapetians Were Properly Dismissed
Without Leave to Amend Due to Operation of the Tender Rule
“To obtain the equitable set aside of a trustee’s sale or maintain a wrongful
foreclosure claim, a plaintiff must allege that (1) the defendants caused an illegal,
fraudulent, or willfully oppressive sale of the property pursuant to a power of sale in a
mortgage or deed of trust; (2) the plaintiff suffered prejudice or harm; and (3) the plaintiff

13
tendered the amount of the secured indebtedness or was excused from tendering.”
(Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062.)
California courts have recognized the tender rule for more than a century. “‘[O]ur
Supreme Court, in one of its earliest decisions on the subject, said: [¶] “‘ . . . It is
apparent from the general tenor of the decisions that an action to set aside the sale,
unaccompanied by an offer to redeem, would not state a cause of action which a court of
equity would recognize.’”’” (Leonard v. Bank of America etc. Assn. (1936) 16
Cal.App.2d 341, 344, quoting Copsey v. Sacramento Bank (1901) 133 Cal. 659, 662.)
Courts have routinely found the tender rule applicable in postforeclosures cases
(i.e., in actions challenging a completed foreclosure sale, as opposed to actions seeking to
prevent the sale in the first place). (See, e.g., United States Cold Storage v. Great
Western Savings & Loan Assn. (1985) 165 Cal.App.3d 1214, 1224–1226 (United States
Cold Storage) [affirming grant of nonsuit where plaintiff challenged irregularities in sale
notice or procedure after trustee sale was held but failed to tender the amount due];
Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 578 (Arnolds
Management); Abdallah v. United Savings Bank (1986) 43 Cal.App.4th 1101, 1109;
Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 (Karlsen).)
“This rule is premised upon the equitable maxim that a court of equity will not
order that a useless act be performed.” (Arnolds Management, supra, 158 Cal.App.3d at
pp. 578–579; see FPCI RE–HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d
1018, 1022.)
As a result, “[t]he rules which govern tenders are strict and are strictly applied.”
(Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 439.) “‘The tenderer must do and offer
everything that is necessary on his part to complete the transaction, and must fairly make
known his purpose without ambiguity, and the act of tender must be such that it needs
only acceptance by the one to whom it is made to complete the transaction.’” (Gaffney v.
Downey Savings & Loan Assn. (1988) 200 Cal.App.3d 1154, 1165.) The debtor bears
“responsibility to make an unambiguous tender of the entire amount due or else suffer the
consequence that the tender is of no effect.” (Ibid.)

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 Consequently, “an offer of performance is of no effect if the person making it is
not able to perform.” (Karlsen, supra, 15 Cal.App.3d at p. 118.) Simply put, if the
offeror “‘is without the money necessary to make the offer good and knows it’” the
tender is without legal force or effect. (Ibid.) “It would be futile to set aside a
foreclosure sale on the technical ground that notice was improper, if the party making the
challenge did not first make full tender and thereby establish his ability to purchase the
property.” (United States Cold Storage, supra, 165 Cal.App.3d at p. 1225.) “A cause of
action ‘implicitly integrated’ with the irregular sale fails unless the trustor can allege and
establish a valid tender.” (Arnolds Management, supra, 158 Cal.App.3d at p. 579.)
Courts have recognized four exceptions to the tender rule:
“First, if the borrower’s action attacks the validity of the underlying debt, a tender
is not required since it would constitute an affirmation of the debt. [Citations.]
“Second, a tender will not be required when the person who seeks to set aside the
trustee’s sale has a counter claim or set off against the beneficiary. In such cases, it is
deemed that the tender and the counter claim offset one another, and if the offset is equal
to or greater than the amount due, a tender is not required. [Citation.]
“Third, a tender may not be required where it would be inequitable to impose such
a condition on the party challenging the sale. [Citation.] . . . .
“Fourth, no tender will be required when the trustor is not required to rely on
equity to attack the deed because the trustee’s deed is void on its face.” (Lona v.
Citibank, N.A. (2011) 202 Cal.App.4th 89, 112–113.) With regard to the fourth
exception, Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868 is illustrative. In
that case, the original trustee completed trustee’s sale after being replaced by new trustee;
because the original trustee no longer had power to convey property, the deed of trust was
void on its face. (Id. at p. 878.)
In his original complaint in which he sought various forms of equitable relief,
Brooks did not allege that he had tendered the amount owing on his loan, or that he had
even attempted to tender. Nor did Brooks allege, notwithstanding his recent bankruptcy
filings, facts showing that he had the ability to tender.

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 Brooks, however, did attempt to allege facts in his original complaint that would
put his claims within one of the exceptions to the tender rule. Specifically, he alleged
that the assignment of Pinnacle’s interest in the mortgage loan to BONY as trustee for a
mortgage securitization trust, RAMP 2006RMS1 (the Trust), was invalid. According to
the original complaint, under the Trust’s pooling and servicing agreement (PSA), all
assets were to have been transferred to the Trust by 2005. Because Pinnacle’s interest in
Brook’s loan was not transferred to the Trust until 2009, BONY as the Trust’s trustee had
no authority to foreclose, because the loan would still belong to Pinnacle. In short,
Brooks attempted to put his claim squarely within the exception to the tender rule
discussed in Dimock v. Emerald Properties, supra, 81 Cal.App.4th 868, which he cited to
in his original complaint.
The problem with Brooks’ allegations and argument is that the PSA is governed
by New York law. Although New York Estate Powers and Trusts Law section 7–2.4
states that “every act in contravention of the Trust is void,” New York intermediate
appellate courts do not apply that code section literally. Instead, those courts treat acts in
contravention of a trust as merely voidable because a beneficiary can ratify a trustee’s
ultra vires act under state law. (See, e.g., Mooney v. Madden (1993) 193 A.D.2d 933,
933–934, 597 N.Y.S.2d 775, 776; Leasing Serv. Corp. v. Vita Italian Rest., Inc. (1991)
171 A.D.2d 926, 927, 566 N.Y.S.2d 796, 797; Hine v. Hine (1907) 118 A.D. 585, 592,
103 N.Y.S. 535, 540; Matter of Levy (2010) 69 A.D.3d 630, 632, 893 N.Y.S.2d 142, 144;
see also Bank of America N.A. v. Bassman FBT, LLC (Ill.App.Ct. 2012) 366 Ill.Dec. 936,
943–945, 981 N.E.2d 1, 8–10 [collecting New York cases finding that a trustee’s
unauthorized actions are voidable]; Rajamin, supra, 757 F.3d at p. 90 [“we conclude that
as unauthorized acts of a trustee may be ratified by the trust’s beneficiaries, such acts are
not void but voidable”].)
In rejecting claims similar to those asserted here and in Glaski, supra, 218
Cal.App.4th 1079, the court in Calderon v. Bank of America N.A. (W.D.Tex. Apr. 23,
2013) 941 F.Supp.2d 753, applied New York trust law:

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 “Even assuming, as Plaintiffs insist, that New York law governs interpretation of
the PSA, and assuming that the transfer of Plaintiffs’ loan to the Trust violated the terms
of the PSA, that after-the-deadline transaction would merely be voidable at the election of
one or more of the parties—not void. Accordingly, Plaintiffs, who were not parties to the
PSA, do not have standing to challenge it. [¶] . . . [¶] [E]ven if it is true that the Note
was transferred to the Trust in violation of the PSA, that transaction could be ratified by
the beneficiaries of the Trust and is merely voidable.” (Calderon v. Bank of Am. N.A.,
supra, 941 F.Supp.2d at pp. 766–767, italics added.)
The Glaski, supra, 218 Cal.App.4th 1079 court, in contrast, cited only two cases in
support of its determination that acts by a trustee in contravention of a trust were void.
The first, Wells Fargo Bank, N.A. v. Erobobo (N.Y.Sup.Ct. 2013) 39 Misc.3d 1220(A),
972 N.Y.S.2d 147 [2013 WL 1831799], was issued by a New York trial court and has
subsequently been reversed. (See Wells Fargo Bank, N.A. v. Erobobo (N.Y.A.D. 2015)
127 A.D.3d 1176, 9 N.Y.S.3d 312.) Moreover, even before being reversed Erobobo’s
reasoning and holding was called into doubt. (See Koufos v. U.S. Bank, N.A. (D.Mass.
2013) 939 F.Supp.2d 40, 56 fn. 2; Orellana v. Deutsche Bank Nat. Trust Co. (D.Mass.,
Aug. 30, 2013, No. 12-11982-NMG) 2013 WL 5348596, 5, fn. 13; see also Rajamin,
supra, 757 F.3d at p. 90 [“we are not aware of any New York appellate decision that has
endorsed [Erobobo’s] interpretation of section 7–2.4’”].) The second case relied upon by
Glaski is an unpublished opinion by the Bankruptcy Court for the Southern District of
Texas that relies on Erobobo and that is inconsistent with a district court decision from
that district issued just days earlier. (Compare In re Saldivar (Bankr.S.D.Tex., June 5,
2013, No. 11-10689) 2013 WL 2452699, 4 [transfer was void] with Sigaran v. U.S. Bank
Nat. Ass'n (S.D.Tex., May 29, 2013, No. H-12-3588) 2013 WL 2368336, 3) [holding that
“assignments made after the Trust’s closing date are voidable, rather than void”].) In re
Saldivar has subsequently been found to be “the clear minority [view] on the matter and
runs counter to the majority of decisions that have expressly rejected such assignment
challenges.” (U.S. Bank Nat. Ass’n v. Salvacion (Hawaii Ct. App. 2014) 134 Haw. 170,
175, 338 P.3d 1185, 1191.)

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 In sum, we find the Glaski, supra, 218 Cal.App.4th 1079 interpretation of New
York law unpersuasive. As a result, Brooks’ allegations regarding the purported
irregularities with the assignment of his loan merely establish that the assignment was
voidable, not void. Under California law, a voidable sale is not sufficient to relieve
Brooks of his obligations under the tender rule. (Karlsen, supra, 15 Cal.App.3d at
p. 117.)
Because Brooks did not allege that he had either tendered or attempted to tender,
the trial court properly sustained the demurrers of DCB and the Karapetians. Because
Brooks was aware of the tender rule since at least the dismissal of the First Action, and
because Brooks, rather than comply with the tender rule in the Second Action, attempted
to plead around it by trying but failing to establish an exception, thereby showing that he
could not comply, the trial court did not abuse its discretion in dismissing the claims
against DCB and the Karapetians without leave to amend.
To slightly paraphrase the court in Shuster v. BAC Home Loans Servicing, LP
(2012) 211 Cal.App.4th 505, “[w]e are mindful that foreclosures are a far too frequent
occurrence in today’s difficult financial times. But the hardship must not become a
haven for those who, as here, do not appear to make any good faith effort to resolve the
issue but, instead, seek shelter in [meritless legal theories concerning] acts that neither
misled nor prejudiced them.” (Id. at p. 513 [affirming dismissal without leave to amend
because borrowers failed to allege tender for claims alleging foreclosure irregularities].)

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 DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
NOT TO BE PUBLISHED.

JOHNSON, J.

We concur:

ROTHSCHILD, P. J.

CHANEY, J.

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