SAN FRANCISCO — The California First Appellate District Court of Appeal recently decided to uphold the Solano County Superior Court's decision to drop Linda Vanpelt's case against HSBC Bank USA, National Association and Mortgage Electronic Registration Systems Inc.

In its April 13 decision, the appeals court said Vanpelt sued HSBC, National Association and Mortgage Electronic Registration Systems Inc. and accused the defendants of "wrongful foreclosure" and breaking California Civil Code Section 2924.17.

According to the appeals court decision, Vanpelt also sued Wells Fargo Bank N.A. and Quality Loan Service Corporation, but those companies weren't included in the appeal. The appeals court said "HSBC was sued as trustee for the Wells Fargo Mortgage Backed Securities 2007-10 Trust, Mortgage Pass-through Certificates, Series 2007-10."

The appeals court said "Vanpelt obtained a loan secured by a promissory note and a deed of trust recorded in 2007 against her property in Vacaville." According to the appeals court decision, Reunion Mortgage Inc. was to be the beneficiary of that promissory note. According to the appeals court, in January 2010, Wells Fargo Bank issued a notice of default against Vanpelt’s property. The appeals court also said that in May 2011, Mortgage Electronic Registration Systems "assigned the deed of trust to HSBC." 

"A notice of sale was recorded in September 2015, but the complaint does not allege that a sale has occurred," the appeals court decision said.

The appeals court said Vanpelt sued in October 2015 and she accused the defendants of alleged "wrongful foreclosure on the basis that the May 2011 assignment was void, and [the] defendants therefore lacked authority to initiate foreclosure proceedings."

The appeals court said the defendants issued a demurrer in February 2016 and asked for "judicial notice of various foreclosure-related documents." 

According to the appeals court, the defendants gave Vanpelt's lawyer the notice of demurrer, and Vanpelt didn't respond. The superior court upheld the demurrer on April 11, 2016, and Vanpelt didn't try to fight that ruling, the court said.

The appeals court ruled that the superior court decided against Vanpelt's accusation of "wrongful foreclosure" because she "had not alleged any defect in the assignment of the deed of trust to HSBC by Mortgage Electronic Registration Systems or any resulting prejudice." 

The appeals court cited the superior court decision when it wrote that the superior court decided against Vanpelt's accusation that the defendants did not follow section 2924.17 because the superior court held that that accusation relied on alleged wrongful foreclosure and there was no credible evidence supporting the accusation of nonjudicial disclosure. The appeals court explained that the superior court also held that Vanpelt had not shown that "she could cure the defects by amending the complaint."

The appeals court said Vanpelt's attorney received the decision on April 14, 2016 to dismiss the case with prejudice. The appeals court said another attorney who represented Vanpelt in the appeals process, appealed the order in June 2016.

The appeals court said it ruled against Vanpelt because

she "never explicitly [argued] that she can amend the complaint to state a claim under Section 2924.17. In particular, she does not address the trial court’s ruling that her complaint was deficient because she failed to allege that defendants had not sufficiently reviewed the evidence before filing foreclosure documents."

The appeals court also upheld the superior court's decision against Vanpelt's argument that the superior court should have allowed her "leave to amend" because she had a new attorney in the appeals process. The appeals court explained that the record didn't show why her lawyer didn't fight the demurrer or why she got a new attorney. 

"She never sought relief from the court based on counsel’s performance, and we agree with defendants that there is no support for her assertion that the court knew about counsel’s alleged abandonment of her," the appeals court said in its ruling.

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