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1 INSERT NAME
INSERT STREET AD,
2
INSERT CITY, CA INSERT ZIP
3 Phone (951) 801-9526
Defendant In Pro Se
4
5
SUPERIOR COURT OF THE STATE OF CALIFORNIA
6
IN AND FOR THE COUNTY OF SAN BERNARDINO
7
8 INSERT LENDER.
Case No.:
9 Plaintiff,
Judge:
10
V. MEMORANDUM OF POINTS AND
11 AUTHORITIES IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT
12 INSERT NAME BY DEFENDANT
and Does 1-6 Inclusive. [Filed concurrently with Notice of Motion
13
and Motion for Summary Judgment,
14 Defendant’s Separate Statement of
Defendant.
Undisputed Facts and Supporting
15
Evidence on Motion for Summary
16 Judgment, Declarations of INSERT
NAME in Support of Motion for
17 Summary Judgment by Defendant,
[Proposed] Order/Judgment]
18
19 Date of Hearing:________
Time of Hearing: ________
20 Department: ____________
21
22
23 Defendant and Movant herein, INSERT NAME ("Defendant”), submits the following
24 Memorandum of Points and Authorities in Support of her Motion for Summary Judgment
25 against Plaintiff " INSERT LENDER. (hereinafter “Deutsche”) ("Plaintiff").
26 POINTS AND AUTHORITIES
I
27 FACTUAL BACKGROUND OF THIS LITIGATION
28
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Points and Authorities
1 On or about September 21, 2005 INSERT BORROWER , financed the property at
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issue for Plaintiff through New Century Mortgage, at the time Plaintiff was a known
3
and disclosed third party beneficiary of the loan, after the loan was funded and on or
4
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about December 12, 2005 INSERT BORROWER immediately deeded the property to
6 Plaintiff who now has and claims a beneficial and possessory interest in this property.
7 A true and correct copy of the Note executed by INSERT BORROWER is attached
8
to the Declaration of INSERT NAME and incorporated herein as Exhibit (1) and a true
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and correct copy of the Deed of Trust as executed by Defendant INSERT NAME is
10
11 attached to her Declaration and incorporated herein as Exhibit (2). Neither Defendant
12 or INSERT BORROWER has any relationship and was not in privity with INSERT
13
LENDERand they were not parties to the Note or financing transaction nor a disclosed
14
beneficiary by virtue of a Recorded assignment.
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INSERT LENDERDOES NOT HAVE STANDING
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TO BRING THE INSTANT ACTION.
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INSERT LENDERlacks standing to bring the instant action for possession of the
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subject property. (1) INSERT LENDERis not a proper party to this action, and as such
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20 the court is without jurisdiction to grant possession of the subject property to plaintiff.
21 Further, (2) plaintiff or plaintiff’s predecessor failed to perform (2) conditions precedent (i)
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mandated by the original Deed of Trust, Section (20) which requires a separate Notice
23
and opportunity to cure in addition to the procedure established by Cal. Civ. Code Sec
24
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2924 thereby cancelling the performance of defendant, and (ii) they failed to record the
26 assignment of the deed of Trust a condition precedent to conducting a foreclosure sale,
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(3) Plaintiff can not prove that the non-judicial foreclosure which occurred, strictly
28
complied with the tenets of California Civil Code section 2924 in order to maintain an
2
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Points and Authorities
1 action for possession pursuant to California Code of Civil Procedure section 1161.
2
1. Plaintiff failed to perform a condition precedent contained in the
3
Deed of Trust prior to bringing this action pursuant to California Code of
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Civil Procedure section 1161, which mandates that the trustee attempting in
6 writing prior to the institution of a non-judicial foreclosure to allow defendant
7 to cure the default;
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2. Plaintiff failed to record the assignment of the Note and Deed of
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Trust prior to initiating the foreclosure therefore the foreclosure was invalid
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11 under 2924
12 3. The original promissory note executed by Defendant is invalid due to
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the ineffective method of assignment utilized by the parties; assignment of
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the promissory note was not contained on the body of the page of the note,
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but rather was effectuated on a different paper, notwithstanding the fact that
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17 there was sufficient room to draft the assignment on the face of the note;
18 4. The Trustee that conducted the nonjudicial foreclosure sale was not
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a holder in due course of the original note, because the note was rendered
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non-negotiable by (i) the manner in which the assignment was attempted,
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and (ii) the failure of Bank Of New York to record the assignment,
23 invalidating the note, and resulting Trustee’s Deed Upon Sale, which denies
24 plaintiff standing to seek possession under California Code of Civil
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Procedure section 1161a.
26
27
28 LEGAL ANALYSIS
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Points and Authorities
1 In this matter before the Bench, it becomes pellucidly clear that several fatal errors
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occurred throughout the assignment of the note and ineffective nonjudicial foreclosure
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sale, which when weighed together have the effect of denying plaintiff the necessary
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standing to seek possession.
6 1. Plaintiff failed to perform a condition precedent contained in the
7 Deed of Trust prior to bringing this action pursuant to California Code
8
of Civil Procedure section 1161.
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This party is charged with the duty to perform and condition precedent prior to
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11 bringing the instant action and failed to do so. Paragraph (20) of the Deed of Trust
12 provides in pertinent part:
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Neither borrow or lender may commence, join, or be joined to any judicial
14 action (as either an individual litigant, or the member of a class, that arises from
the other party’s actions pursuant to this security instrument or alleges that the
15 other party has breached any provision of, or any duty by reason of, this Security
Instrument, until such borrower or lender has notified the other party (with
16
such notice given in compliance with the requirements of section 15) of
17 such alleged breach and afforded the other party hereto a reasonable period
after giving of such notice to take corrective action. If applicable law provides
18 a time period which must elapse before certain action can be taken, that time
period will be deemed to be reasonable for the purposes of this paragraph. The
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notice of acceleration and notice to cure given to borrower pursuant to Section 22
20 and the notice of acceleration given to borrower pursuant to Section 18 shall be
deemed to satisfy the notice and opportunity to take corrective action provisions of
21 this Section 20. (Emphasis added.)
22
23 When there is an agreement between the Beneficiary and Trustor, such as the
24 Condition Precedent expressed in Paragraph 20 of the Deed of Trust a Foreclosure can
25 not take place before the condition is satisfied. If the Beneficiary fails to carry out its
26 obligation a subsequent foreclosure is invalid. Haywood Lumber & Investment Co. V.
27 Corbett (1934) 138 CA 644, 650, 33 P2d 41;
28 The Deed of Trust was drafted solely by the original beneficiary, defendant had no
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Points and Authorities
1 part in drafting this document, only the execution thereof. Defendant contends that the
2
aforementioned language contained in the Deed of Trust creates a condition precedent
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prior to either plaintiff or defendant bringing any action, without first giving written notice
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to perform a covenant.
6 By virtue of the fact that an unlawful detainer involves a forfeiture of the tenant's
7 right to possession, the courts strictly construe the statutory proceedings which regulate
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it. Kwok v. Bergren, (1982) 130 Cal.App.3d 596, 600,181 Cal.Rptr. 795. The failure of
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plaintiff to perform a condition precedent, to wit, failure to give defendant notice and a
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11 reasonable period to cure a breach of the terms and conditions, cancels the performance
12 of defendant, until the condition precedent is performed according to the terms of the
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Deed of Trust.
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In the absence of proof that plaintiff timely performed the condition precedent
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giving defendant a chance to cure his breach of the terms and conditions of the Deed of
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17 Trust, plaintiff can not proceed with the present action. The plaintiff is a stranger who is
18 not in privity with the tenant/owner, and he must prove that he is authorized by the statute
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to prosecute an unlawful detainer proceeding pursuant to a properly conducted
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foreclosure sale. Therefore, the tenant can raise the limited defense that the foreclosure
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sale is invalid because it was not processed ,in compliance .with the statutes regarding
23 foreclosures, and the plaintiff has the burden of proof that the foreclosure statutes were
24 satisfied by performance of all of the notices and procedures required.
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2. Plaintiff failed to record the assignment of the Note and Deed of Trust
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prior to initiating the foreclosure therefore the foreclosure was invalid
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28 under 2924
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Points and Authorities
1 There is also a condition precedent to enforcing the note by an assignee, see Cal.
2 Civ. Code Section 2932.5 which states:
3
2932.5. Where a power to sell real property is given to a
4 mortgagee, or other encumbrancer, in an instrument intended to secure
the payment of money, the power is part of the security and vests in
5 any person who by assignment becomes entitled to payment of the
money secured by the instrument. The power of sale may be exercised
6
by the assignee if the assignment is duly acknowledged and recorded.
7 (emphasis added)
8 “The assignment was not Recorded”
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The assignment was not recorded. Since INSERT LENDERfailed to record the
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assignment they were not entitled to enforce the Note or to foreclose on Defendants
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Property therefore the Title was not perfected under 2924 by a foreclosure sale and was
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not duly carried out under 2924 and was wholly defective and this plaintiff has no
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standing in this Unlawful Detainer action.
14
In addition to recording the assignment, the Beneficiary must also deliver the
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Original Note to the Trustee in order for the Trustee to conduct the foreclosure sale.
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Haskell V. Matranga (1979) CA 3d. 471, 479-480, 160 CR 177;
17
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In the Case of a Mortgage with a power of Sale An assignee can only enforce the
19 power of sale if the assignment is recorded, since the assignee’s authority to conduct the
20 sale must appear in the public records, New York Life Insurance Co. V. Doane (1936) 13
21 CA 2d. 233, 235-237, 56 P2d. 984, 56 ALR 224;
22 3. Plaintiff is not a holder in due course of the original promissory note
23 executed by Defendant, because the method of assignment utilized by
24
the parties to indorse the assignment rendered the note non-
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negotiable as a matter of law.
26
27 The assignment of the original promissory note was invalidated by the manner in
28 which the assignment was attempted. It has long been settled that the assignment of a
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Points and Authorities
1 note must be reflected on the body of the note, as long as there is room available. If
2
room to draft the assignment is available, but the party making the assignment drafts the
3
assignment on a separate piece of paper, the note is no longer negotiable. The public
4
5
policy is to avoid one party from making multiple assignments of the same property, at
6 the same time, and defrauding each assignee of their consideration for the assignment.
7 In Privus vs. Bush, (1981) 118 Cal.App.3d 1003, the court held that a promissory note
8
executed as security for a deed of trust was rendered non-negotiable because the
9
indorsement by the assignor was not contained on the face of the note, notwithstanding
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11 the fact that there was sufficient space on the note to effectuate the assignment.
12 The Privus, supra., court held at pages 106-107, in pertinent part: California
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Uniform Commercial Code section 3302, subdivision (1) provides, "A holder in due
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course is a holder who takes the instrument (a) For value; and (b) In good faith; and (c)
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without notice that it is overdue or has been dishonored or of any defense against or
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17 claim to it on the part of any person." In the present case, the trial court did not question
18 defendant's status as a holder in due course because of any failure to satisfy the value,
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good faith, or no notice requirements. Rather, the court concluded that defendant is not a
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holder in due course because he is not a holder at all, an essential prerequisite to
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qualifying as a holder in due course. A holder is "a person who is in possession of ... an
23 instrument ..., issued or indorsed to him ...." (§ 1201(20).) The trial court ruled that the
24 Williams' signature on the paper attached to the promissory note did not qualify as an
25
indorsement because there was adequate space for the indorsement on the note itself.”
26
(Emphasis added.)
27
28 “Section 3202(2) states, "An indorsement must be written by or on behalf of the
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Points and Authorities
1 holder and on the instrument or on a paper so firmly affixed thereto as to become a part
2
thereof." Thus, the code does not say whether or not such a paper, called an "allonge,"
3
may be used when there is still room for an indorsement on the instrument itself. Nor has
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any reported California case dealt with this issue under the code. The code does,
6 however, instruct us as to where to look for the law with which to resolve the issue.
7 Section 1103 states that "(u)nless displaced by the particular provisions of this code, the
8
principles of law and equity, including the law merchant ... shall supplement its
9
provisions," and that section's Uniform Commercial Code Comment notes "the continued
10
11 applicability to commercial contracts of all supplemental bodies of law except insofar as
12 they are explicitly displaced by this Act." Therefore, since the Commercial Code has not
13
addressed the issue, we decide the present case according to the rules on allonges of
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the law merchant.” Privus vs. Bush, (1981) 118 Cal.App.3d 1003,1007.
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“Although the cases are not unanimous, the majority view is that the law merchant
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17 permits the use of an allonge only when there is no longer room on the negotiable
18 instrument itself to write an indorsement. (See generally Annot., Indorsement of
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Negotiable Instrument By Writing Not On Instrument Itself (1968) 19 A.L.R.3d 1297,
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1301-1304; Annot., Indorsement of Bill or Note by Writing Not On Instrument Itself (1928)
21
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56 A.L.R. 921, 924-926.) Typical of the majority position is Bishop v. Chase (1900) 156
23 Mo. 158, 56 S.W. 1080. There it was held that the general rule is that an instrument could
24 be indorsed only by writing on the instrument itself, but that an exception to the rule
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allows the use of an attached paper "when the back of the instrument is so covered as to
26
make it necessary." (Id., 156 Mo. 158, 56 S.W. at p. 1083.) Thus, the court invalidated an
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28 attempted indorsement by allonge when "there was plenty of room upon the back of the
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Points and Authorities
1 note to have made the indorsement, and the only excuse for not doing so was that it was
2
more convenient to assign it on a separate paper." (Id., 156 Mo. 158, 56 S.W. at p.
3
1084.)” Privus vs. Bush, (1981) 118 Cal.App.3d 1003, 1007.
4
5
Here, the original note executed had sufficient space for an indorsement, however, the
6 note does not contain an indorsement, and defendant has never seen a document which
7 purports to assign the note to a third party. As such, plaintiff is not a holder in due
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course, nor was the Trustee who conducted the nonjudicial foreclosure a holder in due
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course. Such failures on the part of the Trustee who conducted the nonjudicial
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11 foreclosure clearly demonstrates that the sale was not conducted pursuant to the strict
12 mandates of California Civil Code section 2924.
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A nonjudicial foreclosure sale under the power-of-sale in a deed of trust or
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mortgage, on the other hand, must be conducted in strict compliance with its provisions
15
and applicable statutory law. A trustee's powers and rights are limited to those set forth in
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17 the deed of trust and laws applicable thereto. (See, e.g., Fleisher v. Continental
18 Auxiliary Co., (1963) 215 Cal.App.2d 136, 139, 30 Cal.Rptr. 137; Woodworth v.
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Redwood Empire Sav. & Loan Assn., (1971) 22 Cal.App.3d 347, 366, 99 Cal.Rptr.
20
373.) No court order authorizing or approving the sale is involved. A sale under the power
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22
of sale in a deed of trust or mortgage is a "private sale." Walker v. Community Bank,
23 (1974) 10 Cal.3d at p. 736, 111 Cal.Rptr. 897. (Emphasis added.)
24 The statutory procedures governing the conduct of such sales are found in Civil
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Code sections 2924, 2924a-2924h, which set forth the time periods in which to comply
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with certain requirements, the persons authorized to conduct the sale, the requirements
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28 of notice of default and election to sell and for cure of default and reinstatement, inter
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Points and Authorities
1 alia. The sale is concluded when the trustee accepts the last and highest bid. (Civ.Code,
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§ 2924h, subd. (c).) Coppola vs. Superior Court, (1989) 211 Cal.App.3d 848, 868.
3
Here, plaintiff’s predecessor rendered the note non-negotiable by failing to list the
4
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assignment on the fact of the note, notwithstanding the fact that sufficient space existed.
6 Thus, the note could not be the security interest utilized for execution of the nonjudicial
7 foreclosure pursuant to California Civil Code section 2924. Plaintiff can not prove that the
8
foreclosure strictly complied with section 2924 as mandated. Thus, the Trustee’s Deed
9
Upon Sale is invalid, and does not confer upon plaintiff a right to seek possession of the
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11 subject premises pursuant to California Code of Civil Procedure section 1161a.
12 Therefore, plaintiff does not have standing to prosecute the instant action, and the matter
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must be dismissed or in the alternative Plaintiff is entitled to Summary Judgment.
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As a General Rule a defendant in an Unlawful Detainer cannot test the strength or
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validity of Plaintiff’s Title Vella V. Hudgins (1977) 20 C3d 251, 255, 142 CR 414, 572 P2d
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28; Old National Financial Services, Inc. V Seibert (1987) 194 CA 3d 460, 465, 289 CR
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728; However, a different rule applies in an Unlawful Detainer which is brought by a
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purchaser after a foreclosure sale. His right to obtain possession is based on the fact that
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the property has been “Duly Sold” by foreclosure proceedings C.C.P. 1161a, and
21 therefore it is necessary that the Plaintiff “Prove” that each of the statutory procedures
22 have been complied with as a condition for obtaining possession of the property Vella V.
23 Hudgins Supra; Stephens, Pertain and Cunningham V. Hollis (1987) 196 CA3d 948, 953,
24 242 CR 251
25 4. Plaintiff “Deutsche Bank” is not registered to conduct business in the
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State of California pursuant to California Corporations Code section
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2101, et seq., further invalidating the note and deed of trust, and
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resulting Trustee’s Deed Upon Sale.
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Points and Authorities
1 In the first instance, it appears that plaintiff is not even the real party in interest.
2
Plaintiff has the burden of proving that it is the proper plaintiff and that the Trustee’s Deed
3
Upon Sale resulted from a properly conducted nonjudicial foreclosure sale.
4
5
Again as stated in In Privus vs. Bush, (1981) 118 Cal.App.3d 1003, the court
6 held that a promissory note executed as security for a deed of trust was rendered non-
7 negotiable because the indorsement by the assignor was not contained on the face of the
8
note, notwithstanding the fact that there was sufficient space on the note to effectuate the
9
assignment and thus the plaintiff was not a holder in due course, notwithstanding their
10
11 title as a “Holders”.
12 California Code of Civil Procedure section 1161(3) mandates that in order to seek
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possession after a sale pursuant to Civil Code section 2924, the plaintiff’s interest must
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be “duly perfected”.
15
California Code of Civil Procedure section 1161 provides in pertinent part:
16
17 (b) In any of the following cases, a person who holds over and continues in
possession of a manufactured home, mobilehome, floating home, or real property
18 after a three-day written notice to quit the property has been served upon the
person, or if there is a subtenant in actual occupation of the premises, also upon
19
such subtenant, as prescribed in Section 1162, may be removed therefrom as
20 prescribed in this chapter:
21 (3) Where the property has been sold in accordance with Section 2924 of the Civil
22
Code, under a power of sale contained in a deed of trust executed by such person,
or a person under whom such person claims, and the title under the sale has been
23 duly perfected.
24 Here, it has been shown that plaintiff, INSERT LENDERdid not perfect its interest
25
because the original assignment rendered the note non-negotiable, and secondarily they
26
failed to record the assignment prior to commencing the foreclosure, thus, the nonjudicial
27
28 foreclosure could not lawfully proceed, and the trustee did not strictly comply with the
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Points and Authorities
1 mandates of section 2924.
2
A nonjudicial foreclosure sale under the power-of-sale in a deed of trust or
3
mortgage, on the other hand, must be conducted in strict compliance with its provisions
4
5
and applicable statutory law. A trustee's powers and rights are limited to those set forth in
6 the deed of trust and laws applicable thereto. (See, e.g., Fleisher v. Continental
7 Auxiliary Co., (1963) 215 Cal.App.2d 136, 139, 30 Cal.Rptr. 137. Therefore, the court
8
would properly exercise its discretion pursuant to California Code of Civil Procedure
9
section 631.8, by granting the motion to dismiss for lack of standing on the part of plaintiff
10
11 or under California Code of Civil Procedure section 437C and Granting Summary
12 Judgment in Favor of Defendant
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LEGAL STANDARD
14
The standard for granting summary judgment
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16 Summary judgment shall be granted if all the papers submitted show there is no triable
17 issue of material fact and that the moving party is entitled to a judgment as a matter of
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law. Code Civ. Proc. §437c(c). A defendant is entitled to summary judgment if the record
19
establishes that none of the plaintiff's asserted causes of actions can prevail as a matter
20
21
of law. Molko v. Holy Spirit Ass'n (1988) 46 CAl.3d 1092, 1107. A defendant moving for
22 summary judgment must conclusively negate a necessary element of the plaintiff's case
23 and show there is no material issue of fact that requires a trial. Ibid.
24
25 The moving defendant has the burden of introducing evidence that the plaintiff's action is
26 without merit on any legal theory. Hulett v. Farmers Insurance Exchange (1992) 10
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Cal.App.4th 1051, 1064. Once the defendant has met that burden, the burden shifts to
28
the plaintiff to show that a triable issue of material fact exists. Code Civ. Proc.
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Points and Authorities
1 §437c(o)(1). But if the defendant fails to meet that burden, the adverse party has no
2
burden to demonstrate the claim's validity, and the court must deny the motion. Hulett,
3
supra, 10 Cal.App.4th at 1064.
4
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Instead of introducing evidence that would negate the plaintiff's action, a moving
6
defendant may introduce the plaintiff's own factually devoid discovery responses to
7
demonstrate that it has no case. Union Bank v. Superior Court (1995) 31 Cal.App.4th
8
9 573, 589-593. The burden of proof would then be on the plaintiff to introduce evidence
10 that would show a triable issue of material fact. Id., at 593. But the defendant does not
11
meet its burden merely by asserting that the plaintiff has no evidence. Hagen v.
12
Hickenbottom (1995) 41 Cal.App.4th 168, 186. Instead, the defendant must submit
13
discovery responses that would conclusively foreclose any cause of action. Id. at 186-
14
15 187.
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When no or insufficient affidavits or other evidence is submitted to demonstrate the
17
18
absence of an issue of material fact, the court may treat the motion as in legal effect one
19 for judgment on the pleadings. White v. County of Orange (1985) 166 Cal.App.3d 566,
20 569. In that case, the motion performs the same function as a general demurrer. Ibid. A
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general demurrer will not test whether a complaint is ambiguous or uncertain or states
22
essential facts only inferentially or conclusionary. Johnson v. Mead (1987) 191
23
24 Cal.App.3d 156, 160. The defendants' failure to challenge those defects by way of
25 special demurrer waives them. Hooper v. Deukmejian (1981) 122 Cal.App.3d 987, 994.
26
CONCLUSION
27
Defendant respectfully submits his Motion to Summary Judgment and requests
28
that the court grant the motion as framed herein.
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Points and Authorities
1 Dated: ________
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3 INSERT NAME
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