No.

F059476 IN THE COURT OF tPPEAL
I I

FOR THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT MARK J. DEMUCHA AND CHERYL M. DEMUCHA

UFe

,j?

(1 201C

Appellants and Plaintiffs
v,

WELLS FARGO HOME MO~TGAGE, INC.; WELLS FARGO BANK, NATIONAL ASSOCIATION a.k.a. W]ELLS FARGO BANK, N.A.; FIRST AMERICAN LOANSTAR TRUSTEE SERVICES; FIRST AMERICAN CORPORATION; AND DOES 1 TO 45 Respondents and Defendants Appeal from the Superior Court of the State of California, County of Kern Case No. S-1500-CV-267074 Honorable SIDNEY P. CHAPIN, Judge Department 4 Tele: 66l.868.7205 REPLY BRIEF OF APPELLANTS MARK J. DEMUCHA AND CHERYL M. DEMUCHA Michael D. Finley, Esq. Law Offices of Michael D. Finley 25375 Orchard Village Road, Suite 106 Valencia, CA 91355-3000 661.964.0444 Attorneys for Plaintiffs-Appellants, MARK J. DEMUCHA and CHERYL M. DEMUCHA

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:

No. F059476

IN THE COURT OF 1PPEAL FOR THE STATE OF CALIFORNIA FIFTH APPELLATE DISTRICT
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MARK 1. DEMUCHA AND CHERYL M. DEMUCHA ~ppellants and Plaintiffs

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·

v.

WELLS FARGO HOME MO~TGAGE,INC.; 'WELLS FARGO BANK, NATIONAL ASSOCIATION a.k.a. WiELLS FARGO BANK, N.A.; FIRST AMERICAN LOANSTAR TRUSTEE SER VICES; FIRST AMERICAN CORPORATION; AND DOES 1 TO 45
1

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Respondents and Defendants Appeal from the Superior Court of the State of California, County of Kern Case No. S-1500-CV-267074 Honorable SIDNEY P. CHAPIN, Judge Department 4 Tele: 661.868.7205 REPL Y BRIEF OF APPELLANTS MARK J. DEMUCHA AND CHERYL M. DEMUCHA Michael D. Finley, Esq. Law Offices of Michael D. Finley 25375 Orchard Village Road, Suite 106 Valencia, CA 91355-3000 661.964.0444 Attorneys for Plaintiffs-Appellants, MARK J. DEMUCHA and CHERYL M. DEMUCHA
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TABLE OF CONTENTS TABLE OF AUTHORITIES INTRODUCTION STATEMENT OF THE FACTS PROCEDURAL HISTORY STANDARD OF REVIEW ARGUMENT A. THE DEMURRER WAS NOT PROPERLY SUSTAINED B. THE COMPLAINT VERY PLAINL Y CONTAINS A TENDER, EVEN THOUGH IT IS NOT REQUIRED FOR A QUIET TITLE ACTION C. SUSTAINING OF THE DEMURRER WAS REVERSIBLE ERROR BECAUSE CALIFORNIA LAW REQUIRES WELLS FARGO TO POSSESS THE NOTE IN ORDER TO ENFORCE THE LOAN D. THE DEFENDANTS '/RESPONDENTS , ARGUMENTS REGARDING THE PROPRlETY OF SUSTAINING THE DEMURRER ON THE CLAIMS TO QUIET TITLE AND REMOVE CLOUD ARE BASED UPON THE DELIBERATE MISREPRESENTATION OF THE NATURE OF THE DEMUCHAS' COMPLAINT
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1 2 4

4
5 5

5

7

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E. THE DEFENDANTS' lRESPONDENTS' ARGUMENTS REGARDING THEIPROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR FRAUD AND MISREPRESENTAIfION ARE BASED UPON THE DELIBERATE MISREPRESENTATION OF THE CONTENT OF THE DEMUCHlt\S' COMPLAINT
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F. THE DEFENDAN1jS'/RESPONDENTS' ARGUMENTS REGARDING THEI PROPRlETY OF SUSTAINING THE DEMURRER ON ~HE CLAIM FOR INFLICTION OF EMOTIONAL DISTRESS ARE BASED UPON THE DELIBERATE MISREPRESENTATION OF THE CONTENT OF THE DEMUCHAS' COMPLAINT
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G. THE DEFENDANTS' lRESPONDENTS' ARGUMENTS REGARDING THE ~ROPRIETY OF SUSTAINING THE DEMURRER ON Tf1/ECLAIM FOR SLANDER OF ~~i~~~~~!ifo~Pg~ ;~E~~;i~~~ DErv1UCHAS' COMPLAINT ~FETHE
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H. THE DEFENDANTJ'/RESPONDENTS' ARGUMENTS REGARDING THE ~ROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR INFLICTION OF I EMOTIONAL DISTRESS ARE BASED UPON THE DELIBERATE MISREPRESENTATION OF THE CONTENT OF THE DEMUCHAS' COMPLAINT CONCLUSION

10 10

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TkLE
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OF AUTHORITIES CASES
Page

Caporale v. Saxon Mortgage, Baru4. North Dist. Cal., San Jose Case No. 07-54109. In re Foreclosure Cases, 2007 WL ~232430 (Bankr. N.D. Ohio 2007).
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Staff Mortgage v. Wilke (1980) 625 F.2d 281 Starr v. Bruce Farley Corp. (9th Cir. 1980), 612 F.2d 1197. Whitman v. Transtate Title Co. (1985) 165 Cal.App.3d 312,322-323.

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6

STATUTES
Commercial Code § 3301. 7,8,9,

111

INTRODUCTION Defendants/Respondents continue to mischaracterize the Plaintiffs' /Appellants'

complaint very deliberately, apPlarently because they realize that the Plaintiffs complaint as actually plead is beyond thefr ability to oppose it. Calling the Plaintiffs' Complaint "inartfully drafted" because it ldoes not state that it is a challenge to a non-judicial foreclosure is wishful thinking. The complaint is very artfully drafted as a Quiet Title action. The plaintiffs are not seeking to "stave off foreclosure of a mortgage," but seeking to remove a false claim against their title to the property. No non-judicial foreclosure has taken place. No foreclosure sale has occurred, so there is no foreclosure sale to challenge or undo, but the Defendants/Respondents insist on arguing the case at the demurrer level

and on this appeal as a complaint to challenge or set aside a non-judicial foreclosure and keep trying to apply those inapplicable pleading requirements to the complaint. The plaintiffs did seek a preliminary injunction against the foreclosure and obtained it because the Defendants/Respondents did not comply with the laws regarding non-judicial

foreclosure. However, that does not make their complaint a "central defense" to nonjudicial foreclosure as Defendants!Respondents argue throughout their brief. The

mischaracterization

of the case was a key element of the lower court's error and

continues to be a key element of the Defendants' !Respondents' false arguments. Further, Plaintiffs/Appellants never argued that producing the note was a have plead

preliminary requirement to non-judicial foreclosure, but Plaintiffs/Appellants

very specifically throughout the complaint that possessing the note is a requirement for the Defendants/Respondents been established California to have any right to enforce the note whatsoever, which has lrw (and in every state that has adopted the Uniform
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Commercial Code) for a very long time. The references to producing the note were merely offered as evidence demonstrating that the Defendants!Respondents do no possess

the note because they repeatedly fail and refuse to produce it. In fact, it is important to

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note that the Defendants/Respondents possession as required by law.

have never yet argued that the note

IS

in their

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STA~EMENT OF THE FACTS A. THE SUBJECT TRANSACTION.
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The Defendants '/Responrents , Statement of Facts has a very subtle attempt at subterfuge and misdirection in that it places a statement made about their finances during litigation after Plaintiffs/ Appellants incurred legal fees in a different context as though the statement were made prior

fO
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litigation during the time that the prior (and possibly

current) note holder CTX Mortgage had the loan and prior to the recording of the notice of default. DefendantslRespondents of context and have argued have gone to great lengths to take this statement out extensively that this constitutes However, proof that the

Plaintiffs/Appellants

were unable

to tender payment.

this requires the

assumption that only one conclusion may be drawn from the statement rather than a range of possibilities, including the fact that the Plaintiffs/Appellants fees by that time. B. THE DEMUCHAS' CONTENTIONS. As in the underlying Demurrer, the DefendantslRespondents continue to falsely had incurred attorney's

argue that there was no allegation of Tender in the Complaint. However, as demonstrated in the Appellants' Opening Brief, there is no requirement of tender to plead Quiet Title. Even so, the DefendantslRespondents quote the allegation of tender that is in the

Complaint even while arguing that there is no allegation of tender. This demonstrates the Defendants'lRespondents' motive in deliberately mischaracterizing the complaint: they

wish to apply a non-applicable standard to the complaint. Then when the non-applicable standard has been complied with anyway, they attempt to mislead the court by arguing that a plain allegation of tender is not an allegation of tender. However, as will be shown, the DefendantslRespondents have cited a case that states that tender can be offered in the

complaint, and need not have been offered prior to filing the complaint.

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C.

DEFENDANTS'IRESPOrDENTS' TENDER OF ALL AM9UNTS

ASSERTION OF NO ALLEGATION OF DUE IS BLATANTLY FALSE. have already demonstrated that tendering

As stated above, Plaintiffs/Appellants

payment is not a required elem,nt of a Quiet Title action, but that they have pleaded tender anyway. tendered The Defendanis' !Respondents' arguments that payments must be

"when due" misstates I the law, even for cases challenging which this case
IS

non-judicial below, the

foreclosures,

not.

As

will

be

shown

Defendants/Respondents

cited a case that indicates very clearly that even in non-judicial

foreclosure cases, a tender may be made in the complaint and need not have been made prior to filing the complaint. D. THE FORECLOSURE PROCEEDINGS AND THE DEMUCHAS'

ATTEMPTS TO DELAY OR HALT THEM. The Defendants!Respondents' focus on these extra proceedings within the case is

a red herring to distract the court's focus from the demurrer. The appeal is not about the ex-parte application for a preliminary injunction that was granted due to the fact that the Defendants!Respondents declaration to be did not comply with California signed under
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law requiring that was

a specific not. The

penalty

of

perjury

Defendants!Respondents

are going well outside the Complaint's four comers to abuse the

details of the ex-parte applicatio~ that was not about the Complaint nor the Demurrer that are the subjects of this appeal. And once again, they are trying to argue the issue of the Plaintiffs' /Appellants' they had already financial Isituation as stated during the ex-parte proceedings after incurred £jlttorney's fees
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for the

false

proposition

that

the

Plaintiffs/Appellants were allegedly incapable of tendering payment prior to incurring the additional attorney's fees of liti~ation when that is not the only conclusion that can be
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drawn from the separate ex-parte pleadings. Finally, they continue to shout endlessly about the issue of tender when

it is not
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a required part of pleading the elements of Quiet

Title and when pleading tender is required, an offer made in the complaint itself is deemed sufficient, as will be shown below.

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Eo

THE ARGUMENTS A RED HERRING

A~OUT FAILURE TO "PRODUCE

THE NOTE" ARE

T~ DISTRACT THE COURT FROM THE LEGAL

REQUIREMENT THAT THE DEFENDANTS "POSSESS THE NOTE." The DefendantslRespond~nts
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continue to make a big deal about the fact that in a

few places, the Complaint mentions that the defendants have failed to produce the original note. However, their own arguments on this point mention that the complaint further alleges their failure to hold or possess the original note, which is the more key portion of the pleadings.
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P~OCEDURAL

HISTORY

The parties' explanations of the case's procedural history are close enough that no further discussion is necessary. STANDARD OF REVIEW Some of the arguments contained in the Defendants' /Respondents' Standard of

Review section of their brief are specious, especially in the final paragraph arguing the subjects of tender and producing the note. The Defendants/Respondents have never

demonstrated that California law requires an allegation of tender for a Quiet Title action, but have only cited as authority for this position cases that are focused on undoing a foreclosure sale after it has been completed. However, even those cases state that tender does not have to be made before filing the complaint, but the tender itself can be made within the complaint, and there cannot be any question that an offer of tender is made within the complaint. The Plaintiffs'IAppcIlants' current attorney helped prepare

pleadings for them in the trial court case and even made special, limited scope appearances for them, even though they were officially in pro per, so they incurred considerable legal fees during the litigation, which certainly had an effect on their financial situation at the time that they filed their ex parte application for a preliminary
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injunction,

so the Defendantsvkespondents'
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argument

that

the ex parte

papers

demonstrate that the PlaintiffsfAppellants Defendants' IRespondents'
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could not tender payment is false. Further, the

argument that "the central premise of each cause of action of

the DeMuchas' First Amendent Complaint [is] that a lender must 'produce the note'

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while conducting a non-judiciall foreclosure" is a blatant misstatement of the Complaint's content. The Complaint is not labout non-judicial foreclosure, it is about quieting title. And the central premise is that fa lender must possess the note in order to have a right to enforce the note, which is the l~w in California and every other state that has adopted the Uniform Commercial Code. Nol non-judicial the subject property.
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foreclosure has yet taken place regarding

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A.

THE DEMURRER W
Defendants/Respondents

is NOT PROPERLY

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ARGUMENT

SUSTAINED.

are demonstrating to this court the same misdirection and if the pleadings that misled the trial court into committing

deliberate mischaracterization

reversible error by improperly sustaining a demurrer to a valid complaint. The Defendants/Respondents have never demonstrated that tender is a requirement for a Quiet

Title action. They have mischaracterized the case as a case to undo a non-judicial foreclosure when no non-judicial foreclosure has ever been completed regarding the

subject property. The cases that they cited to the trial court and to this court regarding the requirements of a tender allegation were cases in which the subject property had been sold at a non-judicial foreclosure sale, which was being challenged after the fact. They have mischaracterized the Complaint's allegations as though they state that "producing the note" is a requirement for non-judicial foreclosure, which is a blatant misstatement. The complaint states the true fact that the defendants have failed and refused to produce the note only as evidence of the fact that they do not possess the note and therefore have no right to enforce the note under California law. It is worth noting that the Defendants' /Respondents' 34-page Appellate Brief never claims that they are the holders of the note as required by law.

B.

THE COMPLAINT VERY PLAINLY CONTAINS A TENDER, EVEN THOUGH IT IS NOT REQUIRED FOR A QUIET TITLE ACTION.
Defendants/Respondents
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continue their same improper tactic used with the trial

court of citing irrelevant cases seeking to undo a foreclosure sale after the fact. Since no foreclosure sale has yet taken place regarding the subject property and this is a Quiet

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Title action, those cases are I all irrelevant and inapplicable
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to the First Amended

Complaint that is the subject of the Demurrer and this appeal. However, even under the Defendants' !Respondents' inapplicable cases, the Defendants/Respondents
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have swerved

into something that destroys their arguments completely: Citing Whitman v. Transtate Title Co. (1985) 165 Cal.App?d 312, 322-323, the Defendants!Respondents correctly

stated on page 11 of their brief, "therefore as a condition precedent to any action challenging a foreclosure, a plaintiff must payor offer to pay the secured debt before an action is commenced or in th:e complaint." (Emphasis added). This is not an action

challenging, a foreclosure, but even if those standards were inappropriately applied to this action, the tender or offer to pay can be made "in the complaint." The Verified First Amended Complaint ("VF AC") states, "Plaintiff offers to pay and mortgage payments on the property to the individual or entity that is the valid holder of the original note as required by California Commercial Code § 3301, et seq. and all property taxes to the appropriate government agency." (VFAC page 3, line 28 through page 4, line 7). This is a very clear tender, made "in the complaint," even though it is not required in a Quiet Title Action. Since tender is not
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a statutory

element

of

a Quiet

Title

action,

the

Defendants' !Respondents' arguments regarding the difficult financial times mentioned in the Plaintiffs'! Appellants' ex-parte application for a preliminary injunction are moot.

However, it should be noted that by the time the Plaintiffs! Appellants filed their ex-parte application, they had the addittonal financial burden of paying for attorney's fees to have the same attorney who now represents them on appeal prepare pleadings for them and make special, limited scope appearances
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for them on the trial court level, so the

conclusion that the Defendants~Resoondents are asking the court to make are inaccurate.
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Even the Defendants' /Respondents'

arguments regarding "implicit integration" of

foreclosure issues are irrelevant, because the cases that they cited specifically involved a non-judicial foreclosure in which the sale had been completed, but no non-judicial foreclosure sale has taken place regarding the subject property. The defendants'

argument that Plaintiffs'! Appellants' have failed to cite any authority for the fact that no

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allegation of tender is required is another false statement. Plaintiffs have directly quoted i Code of Civil Procedure § 7611.020, which fully sets forth the elements of a Quiet Title Action, and there is no requJement
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of tendeJ[. However, even if the court somehow

found that a tender allegation las required, the tender allegation has been made in the Complaint in accordance wit~ the Defedants' /Appellants' own citations as set forth

above. Further, the Defendantsf /Respondents' arguments that "a court of equity will not order a useless act perfonned"i (FPCI Re-Hab 01, etc. v. E&G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1022, and "equity will not interpose its remedial power in the accomplishment of what seemingly would be nothing but an idly and expensively futile act" (Leonard v. Bank of America Ass'n (1936) 16 Cal. App. 2d 341, 344) could and should just as easily be applied to the futile and useless acts that

Defendants' !Respondents'

are requesting to be required and plead when they do not

possess the original note and therefore have no right to expect payments, seek payments, nor threaten foreclosure because they did not receive payments that they had no right to receive in the first place, pursuant to Commercial Code § 3301. It can and should also be used to destroy their argument that plaintiff must be subjected to the requirements of case law regarding actions seeking to undo foreclosure irregularities before the foreclosure has even been completed, as though plaintiff should be able to foresee every foreclosure irregularity with a crystal ball before the process is even completed! C. SUSTAINING BECAUSE OF THE DEMURRER LAW WAS REVERSIBLE WELLS ERROR TO

CALIFORNIA

REQUIRES

FARGO

POSSESS THE NOTE IN ORDER TO ENFORCE THE LOAN. Plaintiffs/Appellants have cited a fully binding California Statute, Commercial

Code § 3301, which specifically states that in order to be a "person entitled to enforce an instrument," the Defendants/Respondents must have been the holder of the instrument, continue their

with very limited exceptions. In opposition, the Defendants!Respondents

same bad habit engaged in during the trial court proceedings of citing and relying upon federal trial court cases, which are not binding authority in any way, without disclosing to the court that they are citing non-binding authority. In addition, many of their citations do

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not even contain the full reference,
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so that it is difficult or impossible

to locate and read is that there

the case. As for the federal triat court cases, all that they have demonstrated is a need for a California regarding California's apPFllate
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court to clear up the confusion Commercial Code

that clearly exists Further, their

law,

and especially

§ 3301.

statement that every court that has considered the issue has ruled that possessing the note is not necessary for a foreclosure is false. For example, in the

u.s. Bankruptcy

Court for the Northern

District of California in San Jose, a federal trial court judge stopped a foreclosure because the bank could not produce the note in the case of Caporale v. Saxon Mortgage, Case No. 07-54109. Like the Defendants' /Responderits' authorities, this case is only persuasive authority, not

binding, but it was reported on by ABC News, and a copy of the news video is available to be viewed online at http://abclocal.~o.comlkgo/story?~;ection=newsl7 _on_your _side&id=6839404.

If the court is going to consider' the non-binding federal trial court decisions offered by the Defendants/Respondents, the court should also consider the non-binding persuasive authority of

In re Foreclosure Cases, 2007 WL 3232430 (Bankr. N.D. Ohio 2007), wherein U.S. Bankruptcy Court Judge Christopher Boyko dismissed without prejudice fourteen judicial foreclosure actions filed by the trustees of securitized trusts against borrowers who had defaulted on their residential mortgages that had been sold into securitized trusts, based upon the application of Uniform Commercial Code § 3-301 to the mortgages in question. As for their claim that the commercial secured by deed of trust, code does not apply to a mortgage or a note are willfully ignoring Staff

the Defendants/Respondents

Mortgage v. Wilke (1980) 625 F.2d 281,6 Bankr.Ct.Dec. 1385,29 UCC Rep.Serv. 639, cited in Plaintiffs' /Appellants' trust ... were 'instruments' Opening Brief, which clearly states that "notes secured by deeds of

under the California Commercial Code." This holding is repeated in have

Starr v. Bruce Farley Corp. (9th Cir. 1980), 612 F.2:d 1197. The Defendants/Respondents

offered nothing other than their own opinion for the proposition that the note secured by deed of trust in question is not a "negotiable instrument" within the meaning of Commercial Code § 3301, even though they claim to have purchased the note, which by definition makes it negotiable.

D.

THE DEFENDANTS'/RESPONDENTS'
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ARGUMENTS REGARDING THE

PROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIMS TO

8

QUIET

TITLE

ANQ

REMOVE

CLOUD

ARE

BASED

UPON

THE

DELIBERATE

MISR~PRESENTATION

OF THE NATURE

OF THE

DEMUCHAS' COMP~AINT. As always, the Defenda?-tslRespondents insist upon misrepresenting the nature of the First Amended Complaint. Every element of each of these causes of action was
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specifically plead, as has been [demonstrated. Pursuant to Commercial Code § 3301, the DefendantslRespondents Plaintiffs/Appellants have no right to enforce the note unless they possess the note.

rely upon the appellate court to read the First Amended Complaint

and comprehend it independently of the Defendants' lRespondents' misrepresentations. E. THE DEFENDANTS'IRESPONDENTS' ARGUMENTS REGARDING THE

PROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR FRAUD AND MISREPRESENTATION MISREPRESENTATION ARE BASED UPON THE

DELIBERATE

OF THE CONTENT

OF THE

DEMUCHAS' COMPLAINT. The content of the First Amended Complaint speaks for itself The

DefendantslRespondents

continue to look right at the paragraphs of the document that

contain the elements required by law for each cause of action and to falsely state that the required allegations are not there. Plaintiffs/Appellants read the First Amended Complaint and rely upon the appellate court to it independently of the

comprehend

Defendants' lRespondents' F.

misrepresentations. ARGUMENTS REGARDING THE

THE DEFENDANTS'IRESPONDENTS'

PROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR INFLICTION DELIBERATE OF EMOTIONAL DISTRESS ARE BASED UPON THE OF THE

MISREPRESENTATION

OF THE CONTENT

DE~v1UCHAS' COMPrAINT.
The content of the First Amended Complaint speaks for itself. The DefendantslRespondents contirue to look right at the paragraphs of the document that
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contain the elements required by law for each cause of action and to falsely state that the required allegations are not there. Plaintiffs/Appellants rely upon the appellate court to

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read

the

First

Amended

Cpmplaint

and

comprehend

it independently

of the

Defendants' !Respondents' misrfpresentations. G. THE DEFENDANTS'fESPONDENTS' ARGUMENTS REGARDING THE

PROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR SLANDER OF

CR~DIT

ARE

BASED

UPON

THE

DELIBERATE

MISREPRESENTATIfN COMPLAINT. The content of the

OF THE CONTENT

OF THE DEMUCHAS'

First

Amended

Complaint

speaks

for

itself.

The

Defendants!Respondents

continue to look right at the paragraphs of the document that

contain the elements required by law for each cause of action and to falsely state that the required allegations are not there. Plaintiffs/Appellants read the First Amended Complaint and rely upon the appellate court to it independently of the

comprehend

Defendants' !Respondents' misrepresentations. H. THE DEFENDANTS'IRESPONDENTS' ARGUMENTS REGARDING THE

PROPRIETY OF SUSTAINING THE DEMURRER ON THE CLAIM FOR INFLICTION DELIBERATE OF EMOTIONAL DISTRESS ARE BASED UPON THE OF THE

MISREPRESENTATION

OF THE CONTENT

DEMUCHAS' COMPLAINT. The content of the First Amended Complaint speaks for itself. The

Defendants!Respondents

continue to look right at the paragraphs of the document that

contain the elements required by law for each cause of action and to falsely state that the required allegations are not there. Plaintiffs/Appellants read the First Amended Complaint and rely upon the appellate court to it independently of the comprehend

Defendants' !Respondents' misrepresentations. CONCLUSION The trial court erred in sustaining the demurrer without leave to amend and entering a judgment of dismissal. The rules of a non-judicial foreclosure proceeding and litigation to set aside a non-judicial foreclosure do not apply to a quiet title action that is

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filed prior to a foreclosure sale. The Commercial Code's requirements that the entity enforcing a note must possess the original note (with limited exceptions) applies to a Note Secured by Deed of Trust. Even in the context of a non-judicial foreclosure, there is no "breach" unless the entity that did not receive the mortgage payments had a right to receive the mortgage payments through possession of the original note or compliance with another recognized excep10n under the Commercial Code. Any other result would cause an unnecessary conflict 1f laws and allow fraudulent "lenders" to engage in nonjudicial foreclosures and sales lof property so long as they complied with the technical requirements of a non-judicial foreclosure. All of the causes of action of the Verified First Amended Complaint are properly plead, with the exception that "punitive

damages" is not technically a cause of action, but that can be resolved by striking the label "Sixth Cause of Action" and just allowing the heading "Punitive Damages" to stand.

Dated: 23 December 2010

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CERTIFICATE OF COMPLIANCE Pursuant to rule 8.204(c) of the California Rules of Court, I hereby certify that this brief contains 3,914 words, including footnotes. In making this certification, I have relied on the word count of the compu~er program used to prepare the brief.

Dated: 23 December 201P

(~
Counsel for Plaintiffs/ Appe lants Mark J. DeMucha & Cheryl M. DeMucha

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PROOF OF SERVrCE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

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I am employed in the cojlmty of Los Angeles, State of California. I am over the age of 18 and not a party to the [Withinaction; my business address is: 25375 Orchard Village Road, Suite 106, Valencia, CA 91355-3000.
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On 23 December 2010 I Iserved the foregoing document described as: Appellant's Opening Brief on the interested parties in this action by placing a true copy thereof in sealed envelopes addressed as follows: (Attorneys for Wells Fargo Home Mortgage, Inc. & Wells Fargo Bank, N.A.): Kutak Rock LLP, 18201 Von Karman, Suite 1100, Irvine, CA 92612 (Attorneys for First American Loanstar Trustee Services & First American Corporation): Wright, Finlay & Zak, LLP, 4665 MacArthur Court, Suite 280, Newport Beach, CA 92660 Judge Sidney P. Chapin, Kern County Superior Court, Metropolitan Division, 1415 Truxtun Ave., Bakersfield, CA 93301 BY MAIL: I deposited such envelopes in the mail at Valencia, California. The envelopes were mailed with first class postage thereon fully prepaid. ALSO, BY ELECTRONIC FILING WITH THE SUPREME COURT: In addition, I filed an electronic copy of the Appellant's Opening Brief with the Supreme Court of California on 23 December 2010, through t!£Supreme Dated: 23 December 2010
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