Procedural Posture

Appellant borrowers sought review of a judgment from the Superior Court of Ventura County (California), which sustained respondent foreclosure sale purchaser’s demurrer without leave to amend and dismissed the borrowers’ complaint alleging claims for cancellation of instruments, wrongful foreclosure, and breach of contract.

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Overview

The original deed of trust did not name a trustee. After the borrowers defaulted, the beneficiary substituted a trustee and assigned its beneficial interest in the deed of trust. The trustee recorded a notice of default and, after the borrowers failed to cure the default, recorded a notice of trustee’s sale. The trial court concluded that the omission of a trustee from the original deed of trust was not an impediment to its enforcement. Noting that equity would not allow a trust to fail for lack of a trustee, the court held that a failure to name an original trustee did not render a deed of trust unenforceable or prevent the subsequent appointment of a substitute trustee to commence foreclosure. Moreover, because the trustee had statutory authority under Civ. Code, § 2924, subd. (a)(1), to commence a nonjudicial foreclosure, there was no requirement for a beneficial interest in or physical possession of the note. The borrowers’ claims also failed because the borrowers did not allege tender of the amounts due and owing under the loan. Their complaint did not allege facts implicating any of the recognized exceptions to the tender rule.

Outcome

The court affirmed the judgment.

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