Baldwin v. JPMorgan Chase Bank CA2/2 ( 2014 )

Filed 10/9/14 Baldwin v. JPMorgan Chase Bank CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO
JUDITH L. BALDWIN et al., B247882
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. EC058619)
v.
JPMORGAN CHASE BANK, N.A.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County.
Laura A. Matz, Judge. Affirmed.
Judith L. Baldwin, in pro. per., and Prince Song Cambilargiu, in pro. per., for
Plaintiffs and Appellants.
Bryan Cave, Christopher L. Dueringer, and Richard P. Steelman for Defendant
and Respondent.
Can the tender of a check drawn on an individual and postdated 50 years pay off a
home loan? The trial court ruled it could not, and we agree.
FACTS AND PROCEDURAL HISTORY
Plaintiff Judith L. Baldwin (Baldwin) borrowed $664,000 in a 40-year loan from
Washington Mutual (WaMu). WaMu took out a deed of trust secured by Baldwin’s
home in Valley Village, California, naming itself as beneficiary and California
Reconveyance Company (CRC) as trustee. Beneficial ownership of the deed of trust later
passed to defendant JPMorgan Chase Bank, N.A. (Chase), and then to Bank of America.
Baldwin eventually fell behind in her mortgage payments, and CRC filed a notice
of default, followed by four notices of trustee’s sale.
Before a nonjudicial foreclosure sale took place, Baldwin quitclaimed 20 percent
of her interest in the home to plaintiff Prince Song Cambilargiu (Cambilargiu).
Cambilargiu then mailed Chase an untitled check purporting to pay off the entire balance
of the mortgage, except that the check was drawn on Cambilargiu himself (not a bank)
and was postdated 50 years.
When Chase refused to accept the check in satisfaction of the loan or to reconvey
the deed of trust to plaintiffs, they sued Chase, in pertinent part, for breach of contract,
for violations of Civil Code sections 2924, subdivision (a)(1) and 2941, and to quiet title.
The trial court sustained Chase’s demurrer without leave to amend.
DISCUSSION
Our task in reviewing an order sustaining a demurrer without leave to amend is
twofold: We ask “whether the complaint states facts sufficient to constitute a cause of
action,” and “whether there is a reasonable possibility that the defect can be cured by
amendment.” (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) “[W]e accept as true both
facts alleged in the text of the [pertinent] complaint and facts appearing in exhibits
attached to it. If the facts appearing in the attached exhibit contradict those expressly
pleaded, those in the exhibit are given precedence.” (Mead v. Sanwa Bank California
(1998) 61 Cal. App. 4th 561, 567-568.)
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Validity of Cambilargiu’s Check
The viability of plaintiffs’ four claims turns on the validity of the check
Cambilargiu tendered. Plaintiffs’ first three claims depend on whether the check is
“good”: Chase is alleged to have breached the deed of trust by refusing to reconvey it
after full payment; to have violated then existing Civil Code section 2924c, subdivision
(a)(1), by not acknowledging that the “entire amount due” had been “pa[id]”; and to have
violated Civil Code section 2941 by not acknowledging that “the obligation . . . ha[d]
been satisfied” (Civ. Code, § 2941, subd. (b)(1)). Moreover, a valid tender of full
payment is a prerequisite to plaintiffs’ quiet title claim, even if brought before a
foreclosure sale. (Yvanova v. New Century Mortgage Corp. (2014) 226 Cal. App. 4th 495,
500; Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal. App. 4th 49, 87.)
Payment, satisfaction, or tender of a debt is valid only if it is “of the full debt, in
good faith, unconditional, and [made] with the ability to perform.” (Intengan v. BAC
Home Loans Servicing LP (2013) 214 Cal. App. 4th 1047, 1053, citing Civ. Code,
§§ 1486, 1493, 1494, 1495.) “[A] mere indication of a willingness to perform in the
future” will not suffice. (Waller v. Brooks (1968) 267 Cal. App. 2d 389, 394.)
Cambilargiu’s check is not a valid payment, satisfaction, or tender. It is drawn on
him (not a bank), and it is postdated by five decades—nearly two decades after the
underlying loan becomes due and payable. (Accord, McElroy v. Chase Manhattan
Mortgage Corp. (2005) 134 Cal. App. 4th 388, 391-394 [homeowner’s tender of “the Bill”
“worthless on its face”; no tender].)
Plaintiffs carefully construct an argument from various provisions of the
Commercial Code as to why Cambilargiu’s check is a valid “negotiable instrument.”
Their argument does not displace the definition of valid payment, satisfaction, or tender
set forth above. Nor could it, for plaintiffs’ argument would mean defaulting
homeowners would be entitled to immediate reconveyance of their deeds of trust once
they execute a check drawn on themselves and postdate it decades in the future. This
would spell the end of the mortgage industry.
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Because Cambilargiu’s check is not a valid payment, the trial court properly
sustained the demurrer without leave to amend.
Other Issues
Plaintiffs raise three other grounds in defense of their complaint.
First, they argue that the trial court’s ruling violates due process and equal
protection because it is legally incorrect. We disagree, and accordingly no constitutional
violation arises.
Second, plaintiffs assert that Chase did not properly acquire title to the deed of
trust from WaMu. They cite Glaski v. Bank of America (2013) 218 Cal. App. 4th 1079
(Glaski). Glaski held that a homeowner could challenge whether his loan was properly
placed into one of WaMu’s securitization trusts under New York law. Many courts have
rejected Glaski as inconsistent with longstanding precedent proclaiming that “‘[t]he
securitization of a loan does not . . . alter or affect the legal beneficiary’s standing to
enforce the deed of trust.’” (Mendoza v. JPMorgan Chase Bank, N.A. (2014) 228
Cal. App. 4th 1020, 1029; id. at p. 1034 [listing federal decisions rejecting Glaski];
Keshtgar v. U.S. Bank, N.A. (2014) 226 Cal. App. 4th 1201, 1206-1207 [same]; Fontenot
v. Wells Fargo Bank, N.A. (2011) 198 Cal. App. 4th 256, 272 [errors in transferring
beneficial interest in deed of trust do not prejudice homeowner, and thus do not provide
defense to foreclosure]; Arabia v. BAC Home Loans Servicing, L.P. (2012) 208
Cal. App. 4th 462, 473-474 [same].) We agree with this greater weight of authority, and
reject plaintiffs’ claim.
Third, plaintiffs contend that the notice of default was invalid because Chase’s
transfer of its beneficial interest in the deed of trust to Bank of America rendered Chase
incapable of filing the notice. But the notice was filed by CRC, which a trustee may do
under Civil Code section 2924, subdivision (a)(1). Plaintiffs also argue that the notice
was defective because it listed the incorrect beneficiary (Chase rather than Bank of
America), but Civil Code section 2924 does not require the beneficiary to be named in
the notice. (Id., § 2924, subd. (a)(1).)
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DISPOSITION
For these reasons, we affirm the judgment. Chase is entitled to its costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
HOFFSTADT, J.
We concur:
BOREN, P. J.
CHAVEZ, J.
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