Berube v. Homesales CA6

Filed 9/29/15 Berube v. Homesales CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

SIXTH APPELLATE DISTRICT

MICHAEL R. BERUBE, H041422
(Monterey County
Plaintiff and Appellant, Super. Ct. No. M126484)

v.

HOMESALES, INC., et al.,

Defendants and Respondents.

I. INTRODUCTION
Appellant Michael R. Berube, a self-represented litigant, borrowed $1.5 million
when he refinanced the mortgage on his home in Carmel. After Berube defaulted on the
loan, nonjudicial foreclosure proceedings were initiated and in 2008 the Carmel property
was sold at a foreclosure sale.
In 2014, Berube filed the instant action against respondents Homesales, Inc.
(Homesales), JPMorgan Chase Bank, J.P. Morgan Mortgage Acquisition Corp., and
Mortgage Electronic Registration Systems, Inc. (MERS), in which he alleged that
defendants did not have the legal authority to foreclose.1

1
Defendants Cal-Western Reconveyance Corp. and First American Title
Company are not parties to this appeal.
 The trial court sustained defendants’ demurrers to all causes of action included in
the complaint without leave to amend and entered an order of dismissal. For the reasons
stated below, we conclude that the trial court did not err and that Berube has not shown
on appeal that the complaint may be amended to state a cause of action. We will
therefore affirm the order of dismissal.
II. FACTUAL BACKGROUND
Our summary of the facts is drawn from the allegations of the complaint and
defendants’ request for judicial notice, since in reviewing a ruling sustaining a demurrer
without leave to amend we assume the truth of the properly pleaded factual allegations
and the matters properly subject to judicial notice. (Blank v. Kirwan (1985) 39 Cal.3d
311, 318 (Blank); Gu v. BMW of North America, LLC (2005) 132 Cal.App.4th 195, 200.)
A. Foreclosure Proceedings
In 2006 Berube refinanced the mortgage on his home in Carmel by borrowing
$1.5 million from Alliance Bancorp. The new loan was secured by a deed of trust on the
Carmel property, which indicated that MERS was the nominee for Alliance Bancorp and
that MERS was also the beneficiary of the deed of trust.
A notice of default and election to sell under deed of trust was recorded by Cal-
Western Reconveyance Corp. in 2007. In January 2008 MERS recorded a substitution of
trustee that substituted Cal-Western Reconveyance Corp. as trustee under the deed of
trust. Cal-Western Reconveyance Corp. recorded a notice of trustee’s sale on January 24,
2008.
On June 23, 2008, an assignment of deed of trust was recorded in which MERS
assigned its interest in the deed of trust to Chase Home Finance. On the same day,
June 23, 2008, another assignment of deed of trust was recorded. The second assignment
of deed of trust indicated that Chase Home Finance had assigned its interest in the deed
of trust to Homesales. Berube’s Carmel property was immediately sold in a foreclosure
sale to Homesales and the trustee’s deed of sale was also recorded on June 23, 2008.

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 On July 9, 2012, a “Corporate Assignment of Deed of Trust” was recorded, which
states that Chase Home Finance assigned its interest in the deed of trust to J.P. Morgan
Mortgage Acquisition Corp.
B. Bankruptcy Proceedings
In January 2008 Berube filed a Chapter 7 voluntary petition in the United States
Bankruptcy Court, Northern District of California. The list of creditors in the petition’s
Schedule D included Chase Home Financial, which had a creditor’s claim of $1.5 million
secured by a lien on the Carmel property. MERS filed a motion for relief from stay that
was granted in March 2008. Berube’s motion to vacate the order granting the motion for
relief from stay was denied. An order discharging Berube as debtor was entered in
March 2009 and the bankruptcy case was closed.
In June 2009 Berube filed a Chapter 11 voluntary petition in the United States
Bankruptcy Court, Northern District of California. The petition’s Schedule A stated that
Berube had an “[e]quitable [i]nterest” in the amount of $2.5 million in the Carmel
property, which had been sold at the foreclosure sale in 2008.
In May 2011 Berube initiated an adversary proceeding in his bankruptcy case by
filing a “Complaint to Set Aside/Vacate Trustee Sale and Quiet Title” against Homesales.
The complaint in the adversary proceeding sought a declaration that the trustee’s deed of
sale recorded by Homesales was void because Homesales lacked authority to foreclose.
The complaint also sought to quiet title to the Carmel property in Berube.
Berube’s Chapter 11 bankruptcy petition was dismissed in October 2013. His
adversary proceeding was dismissed without prejudice in the amended order filed on
December 23, 2013. The amended order states that Homesales “agrees to waive any
statute of limitations defense solely with respect to the claims asserted in [Berube’s]
operative complaint . . . in the Adversary Proceeding, but only if [Berube], if he chooses
to re-file the claims, re-files in a different court by no later than January 31, 2014.
Should [Berube] fail to re-file the claims asserted in the Complaint in a different court by

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no later than January 31, 2014, [Homesales] agreement to waive any statute of limitations
defense will be voided and nullified; and [¶] . . . [Homesales] does not waive any
statute of limitations defense it may have as to claims not previously asserted in the
Complaint in the Adversary Proceeding.”
III. PROCEDURAL BACKGROUND
Berube filed his verified complaint against defendants Homesales, JPMorgan
Chase Bank, J.P. Morgan Mortgage Acquisition Corp., Cal-Western Reconveyance
Corp., MERS, and First American Title Company on January 31, 2014. The complaint
included causes of action for wrongful foreclosure, slander of title, quiet title,
cancellation of instruments, and declaratory relief.
Defendants Homesales, JPMorgan Chase Bank, J.P. Morgan Mortgage
Acquisition Corp., and MERS demurred to the complaint on the grounds that each cause
of action failed to state facts sufficient to constitute a cause of action and was also time-
barred, with the exception of the causes of action for quiet title and declaratory relief
asserted against Homesales.
On April 11, 2014, the trial court issued an order after submission sustaining the
demurrers to each cause of action without leave to amend. An “Order Re: Dismissal”
was filed on July 1, 2014, which “dismissed [the action] with prejudice in its entirety as
to each of the Chase Defendants.”2
IV. DISCUSSION
The order of dismissal is an appealable order. “[O]rders of dismissal ‘constitute
judgments . . . effective for all purposes’ ([Code Civ. Proc.,] § 581d)[3] and hence are

2
The July 1, 2014 order of dismissal indicates that the “Chase Defendants”
include Homesales, JPMorgan Chase Bank, J.P. Morgan Mortgage Acquisition Corp.,
and MERS.
3
All statutory references hereafter are to the Code of Civil Procedure unless
otherwise indicated.

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directly appealable. (§ 904.1, subd. (a); [citation].)” (Salas v. Sears, Roebuck & Co.
(1986) 42 Cal.3d 342, 345, fn. 3.)
On appeal, we understand Berube to generally contend that the trial court erred in
sustaining the demurrers to all causes of action in his complaint because none of the
defendants had authority to foreclose on his Carmel home and also because the complaint
was not time-barred. We will begin our evaluation of Berube’s contentions with the
applicable standard of review.
A. Standard of Review
On appeal from a judgment of dismissal after a demurrer is sustained without
leave to amend, our review is de novo. (Committee for Green Foothills v. Santa Clara
County Bd. of Supervisors (2010) 48 Cal.4th 32, 42 (Committee for Green Foothills).)
In performing our independent review of the complaint, we assume the truth of all facts
properly pleaded by the plaintiff. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6
(Evans).) “We also accept as true all facts that may be implied or reasonably inferred
from those expressly alleged. [Citation.]” (Rotolo v. San Jose Sports & Entertainment,
LLC (2007) 151 Cal.App.4th 307, 320-321, disapproved on another ground in Verdugo v.
Target Corp. (2014) 59 Cal.4th 312, 334.) Further, “we give the complaint a reasonable
interpretation, and read it in context.” (Schifando v. City of Los Angeles (2003) 31
Cal.4th 1074, 1081 (Schifando).) But we do not assume the truth of “ ‘ “contentions,
deductions or conclusions of fact or law.” ’ ” (Evans, supra, at p. 6.)
We also consider matters that may be judicially noticed and facts appearing in any
exhibits attached to the complaint. (§ 430.30, subd. (a); Schifando, supra, 31 Cal.4th at
p. 1081; Blank, supra, 39 Cal.3d at p. 318; Rutherford Holdings, LLC v. Plaza Del Rey
(2014) 223 Cal.App.4th 221, 225, fn. 1.) After reviewing the allegations of the
complaint, the complaint’s exhibits, and the matters properly subject to judicial notice,
we exercise our independent judgment as to whether the complaint states a cause of

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action as a matter of law. (See Moore v. Regents of University of California (1990) 51
Cal.3d 120, 125.)
B. Statute of Limitations
Defendants demurred on the ground that all causes of action in the complaint were
time-barred under the applicable statutes of limitation, with the exception of the causes of
action against defendant Homesales for quiet title and declaratory relief (since Homesales
had waived a statute of limitations defense to those causes of action during United States
Bankruptcy Court proceedings). We will begin our evaluation with an overview of the
affirmative defense of the statute of limitations.
1. General Principles
A statute of limitations prescribes the period “beyond which a plaintiff may not
bring a cause of action. [Citations.]” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35
Cal.4th 797, 806 (Fox).) “[It] strikes a balance among conflicting interests. If it is unfair
to bar a plaintiff from recovering on a meritorious claim, it is also unfair to require a
defendant to defend against possibly false allegations concerning long–forgotten events,
when important evidence may no longer be available.” (Pooshs v. Philip Morris USA,
Inc. (2011) 51 Cal.4th 788, 797 (Pooshs).)
“Critical to applying a statute of limitations is determining the point when the
limitations period begins to run. Generally, a plaintiff must file suit within a designated
period after the cause of action accrues. (. . . § 312.)” (Pooshs, supra, 51 Cal.4th at
p. 797.)
“ ‘ “A demurrer based on a statute of limitations will not lie where the action may
be, but is not necessarily, barred. [Citation.] In order for the bar . . . to be raised by
demurrer, the defect must clearly and affirmatively appear on the face of the complaint
[and matters subject to judicial notice]; it is not enough that the complaint shows that the
action may be barred. [Citation.]” [Citation.]’ [Citation.]” (Committee for Green
Foothills, supra, 48 Cal.4th at p. 42; see § 430.30, subd. (a).)

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 2. Analysis
In the present case, the face of the complaint and its exhibits show that all causes
of action arise from defendants’ allegedly wrongful foreclosure sale of Berube’s Carmel
home on June 23, 2008. “A cause of action accrues ‘when [it] is complete with all of its
elements’—those elements being wrongdoing, harm, and causation. [Citation.]”
(Pooshs, supra, 51 Cal.4th at p. 797.) Therefore, the causes of action accrued, and the
limitation periods for Berube’s claims began to run, on June 23, 2008, the day of the
foreclosure sale. The complaint was filed on January 31, 2014, more than five years after
the 2008 foreclosure sale.
Berube does not dispute defendants’ contention that all causes of action in his
complaint are subject to statutes of limitation that provide a limitations period of
five years or less. (See § 318 [five-year limitation on an action to recover real property
or possession thereof]; § 338, subd. (d) [three-year limitations period for claim based on
fraud or mistake]; § 339 [two-year limitation period for action upon a contract]; § 338,
subd. (g) [three-year limitations period for action for slander of title to real property];
Moss v. Moss (1942) 20 Cal.2d 640, 644-645 [action for cancellation of instrument
subject to four-year limitations period in catchall provision of section 343].)
We understand Berube to argue on appeal that his causes of action are not time-
barred pursuant to the discovery rule and the doctrine of equitable tolling. We will
address these two exceptions to the general rule of accrual in turn.
Discovery Rule
“An important exception to the general rule of accrual is the ‘discovery rule,’
which postpones accrual of a cause of action until the plaintiff discovers, or has reason to
discover, the cause of action. [Citations.]” (Fox, supra, 35 Cal.4th at pp. 806-807.)
“Discovery of the cause of action occurs when the plaintiff ‘has reason . . . to suspect a
factual basis’ for the action. [Citations.]” (Pooshs, supra, 51 Cal.4th at p. 797.)

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 “In order to rely on the discovery rule for delayed accrual of a cause of action,
‘[a] plaintiff whose complaint shows on its face that his [or her] claim would be barred
without the benefit of the discovery rule must specifically plead facts to show (1) the time
and manner of discovery and (2) the inability to have made earlier discovery despite
reasonable diligence.’ [Citation.]” (Fox, supra, 35 Cal.4th at p. 808.)
However, “failure to discover, or have reason to discover, the identity of the
defendant does not postpone the accrual of a cause of action, whereas a like failure
concerning the cause of action itself does. ‘. . . [T]he rationale for distinguishing between
ignorance’ of the defendant and ‘ignorance’ of the cause of action itself ‘appears to be
premised on the commonsense assumption that once the plaintiff is aware of’ the latter,
he [or she] ‘normally’ has ‘sufficient opportunity,’ within the ‘applicable limitations
period,’ ‘to discover the identity’ of the former. [Citation.]” (Norgart v. Upjohn Co.
(1999) 21 Cal.4th 383, 399 (Norgart).) Additionally, failure to discover the identity of a
defendant does not postpone accrual because the defendant’s identity is not an element of
a cause of action. (See Cypress Semiconductor Corp. v. Superior Court (2008) 163
Cal.App.4th 575, 587.)
Here, Berube has not alleged in his complaint that he failed to discover the
2008 foreclosure on his Carmel home within the applicable statutes of limitation despite
his reasonable diligence. Moreover, Berube does not dispute defendants’ assertion that
he was aware of the foreclosure no later than July 28, 2008, when he filed in United
States Bankruptcy Court a motion to vacate the order granting MERS’s motion for relief
from stay. The discovery rule therefore does not apply to delay accrual of his causes of
action against defendants. (See Fox, supra, 35 Cal.4th at p. 808.) Moreover, to the
extent Berube argues that he could not have timely discovered the identity of the
defendants, that argument is unavailing. As we have noted, failure to discover the
identity of a defendant does not postpone accrual. (Norgart, supra, 21 Cal.4th at p. 399.)

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 Equitable Tolling
We understand Berube to also argue on appeal that defendants fraudulently
concealed their identities and their lack of authority to foreclose, and therefore the
applicable statutes of limitation were tolled under the doctrine of equitable tolling.
In general, “[e]quitable tolling . . . may suspend or extend the statute of limitations
when a plaintiff has reasonably and in good faith chosen to pursue one among several
remedies and the statute of limitations’ notice function has been served. [Citation.]”
(Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1192.) “Thus, it may
apply where one action stands to lessen the harm that is the subject of a potential second
action; where administrative remedies must be exhausted before a second action can
proceed; or where a first action, embarked upon in good faith, is found to be defective for
some reason. [Citation.]” (McDonald v. Antelope Valley Community College Dist.
(2008) 45 Cal.4th 88, 100.) “Tolling eases the pressure on parties ‘concurrently to seek
redress in two separate forums with the attendant danger of conflicting decisions on the
same issue.’ [Citations.]” (Ibid.)
Having reviewed Berube’s complaint, we determine that he has not alleged any
facts to support the application of the doctrine of equitable tolling in this case. Moreover,
to the extent Berube argues that defendants are equitably estopped from asserting a
statute of limitations defense, we also find no supporting factual allegations in his
complaint.
“ ‘ “Equitable estoppel, . . . comes into play only after the limitations period has
run and addresses . . . the circumstances in which a party will be estopped from asserting
the statute of limitations as a defense to an admittedly untimely action because his [or
her] conduct has induced another into forbearing suit within the applicable limitations
period.” ’ ” (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383.) Thus, under the
doctrine of equitable estoppel an action filed after the limitations period has expired may
proceed “ ‘[w]here the plaintiff is unaware of the identity of the wrongdoer and this is

9
due to fraudulent concealment by the defendant.’ [Citation.]” (Prudential-LMI Com.
Insurance v. Superior Court (1990) 51 Cal.3d 674, 690.) Here, Berube has not alleged
that defendants either induced him to delay filing his complaint or fraudulently concealed
their identities until the limitations period provided by the applicable statutes of limitation
had expired; therefore, the doctrine of equitable estoppel does not apply in this case.
For these reasons, we determine that the face of the complaint shows that all
causes of action in the complaint are necessarily time-barred under the applicable statutes
of limitation and therefore the demurrers were properly sustained, with the exception of
the causes of action against defendant Homesales for quiet title and declaratory relief to
which Homesales has waived a statute of limitations defense. (See Committee for Green
Foothills, supra, 48 Cal.4th at p. 42.) We next address the causes of action that remain
against Homesales.
C. Homesales
1. Quiet Title
In the cause of action for quiet title, Berube alleges that Homesales has no right to
title or interest in the Carmel property because the foreclosure sale was invalid. He seeks
to quiet title as of October 16, 2007. We understand Berube to argue on appeal that the
trial court erred in sustaining Homesales’s demurrer to this cause of action because it
derives from the wrongful foreclosure.
Homesales contends that Berube has failed to state facts sufficient for a quiet title
cause of action because he cannot allege two required elements: that he holds title to the
property and he has paid the debt owed on the property.
We agree that Berube has not alleged facts sufficient for a quiet title cause of
action against Homesales. It has long been “settled in California that a mortgagor cannot
quiet his [or her] title against the mortgagee without paying the debt secured.”
(Shimpones v. Stickney (1934) 219 Cal. 637, 649; accord, Lueras v. BAC Home Loans

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Servicing, LP (2013) 221 Cal.App.4th 49, 86 [borrower cannot quiet title against a
secured lender without paying the outstanding debt on which the deed of trust is based].)
Berube has not alleged in his complaint that he has paid the outstanding debt on
which the deed of trust on the Carmel property was based. In the absence of any
allegations demonstrating this required element of a cause of action for quiet title, we
determine that Homesales’s demurrer was properly sustained.
2. Declaratory Relief
The cause of action for declaratory relief includes the allegations that an actual
dispute exists between Berube and Homesales as to the ownership of the Carmel property
and as to the validity of the liens on the property prior to foreclosure. Homesales argues
that Berube failed to state facts sufficient for a declaratory relief cause of action because
he has not alleged a present or future controversy. We agree.
“Code of Civil Procedure section 1060 authorizes ‘[a]ny person . . . who desires a
declaration of his or her rights or duties with respect to another . . . in cases of actual
controversy relating to the legal rights and duties of the respective parties, [to] bring an
original action . . . for a declaration of his or her rights and duties . . . .’ (. . . § 1060,
italics added.)” (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497,
513 (Jenkins); see also Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872,
909.)
Thus, “[t]he purpose of a judicial declaration of rights in advance of an actual
tortious incident is to enable the parties to shape their conduct so as to avoid a breach.”
(Babb v. Superior Court (1971) 3 Cal.3d 841, 848.) Declaratory relief is therefore a
remedy that “ ‘operates prospectively, and not merely for the redress of past wrongs. It
serves to set controversies at rest before they lead to repudiation of obligations, invasion
of rights or commission of wrongs; in short, the remedy is to be used in the interests of
preventive justice, to declare rights rather than execute them.’ ” (Ibid., italics added.)

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 In the present case, Berube alleges only that a controversy exists regarding
Homesales’s ownership of the Carmel property because the foreclosure sale was invalid.
He therefore seeks a remedy for a past wrong: the 2008 foreclosure sale. Consequently,
the complaint lacks any factual allegations indicating that an actual, present controversy
exists between the parties. We therefore determine that Berube has failed to state a cause
of action for declaratory relief and Homesales’s demurrer was properly sustained. (See
Jenkins, supra, 216 Cal.App.4th at pp. 513-514.)
D. Request for Leave to Amend
On appeal, Berube asks this court to consider whether any deficiencies in the
complaint may be remedied by amendment. As defendants point out, this request is
insufficient to meet Berube’s burden as an appellant seeking leave to amend.
The rules governing leave to amend the complaint are well established. “If the
court sustained the demurrer without leave to amend, as here, we must decide whether
there is a reasonable possibility the plaintiff could cure the defect with an amendment.
[Citation.] 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.
[Citation.] The plaintiff has the burden of proving that an amendment would cure the
defect. [Citation.]” (Schifando, supra, 31 Cal.4th at p. 1081.)
“To satisfy that burden on appeal, a plaintiff ‘must show in what manner he [or
she] can amend his [or her] complaint and how that amendment will change the legal
effect of his [or her] pleading.’ [Citation.] The assertion of an abstract right to amend
does not satisfy this burden. [Citation.] The plaintiff must clearly and specifically set
forth the ‘applicable substantive law’ [citation] and the legal basis for amendment, i.e.,
the elements of the cause of action and authority for it. Further, the plaintiff must set
forth factual allegations that sufficiently state all required elements of that cause of
action. [Citations.] Allegations must be factual and specific, not vague or conclusionary.

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[Citation].” (Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 43-
44 (Rakestraw).)
In the present case, we understand Berube to argue that he has a right to amend his
complaint and therefore this court should determine whether any deficiencies may be
cured by amendment. This general argument does not satisfy his burden on appeal. (See
Rakestraw, supra, 81 Cal.App.4th at pp. 43-44.) We therefore conclude that the trial
court did not abuse its discretion in denying leave to amend.
V. DISPOSITION
The judgment of dismissal is affirmed.

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 ___________________________________________
BAMATTRE-MANOUKIAN, ACTING P.J.

WE CONCUR:

__________________________
MIHARA, J.

__________________________
GROVER, J.