THERE IS NO MISSING NOTE THEORY IN CALIFORNIA!

California law requires that an action to quiet title include: (1) a description of the property in question; (2) the basis for plaintiff's title; and (3) the adverse claims to plaintiff's title. Cal.Code Civ. Proc. § 761.020; Kelley v. Mortgage Electronic Registration Systems, Inc., 642 F.Supp.2d 1048, 1057 (N.D.Cal.2009). However, “[u]nder California law, a borrower may not quiet title without first paying the outstanding debt on the property.” Roberts v. JP Morgan Chase Bank, N.A., Nos. 09–CV–01855–LHK, 09–CV–01879, 2011 WL 864949, at *7 (N.D.Cal. Mar.11, 2011) (citing Miller v. Provost, 26 Cal.App.4th 1703, 1707, 33 Cal.Rptr.2d 288 (1994) (“a mortgagor of real property cannot, without paying his debt, quiet his title against the mortgagee”)). Here, Murphy does not allege that she has tendered the outstanding debt or has the ability to do so.

Moreover, Murphy's action to quiet title is premised upon the theory that Wells Fargo had no beneficial interest in the Properties at the time of foreclosure. However, the judicially-noticed facts outlined above contradict this allegation. World Savings Bank, FSB, and its successors and/or assigns are identified as the “lender” and “beneficiary” in both deeds of trust. RJN Exs. F, L. Wells Fargo is a successor to World Savings Bank, FSB, and thus is a beneficiary.⁴ It is clear from the notices of default that Cal–Western Reconveyance and NDEX West were acting on behalf of Wells Fargo through Wells Fargo's predecessor World Savings Bank.⁵ Nothing in the FAC establishes that Wells Fargo as the legal beneficiary lacked authority to commence foreclosure proceedings through its agents Cal–Western Reconveyance and NDEX West. Cf. Gomes v. Countrywide Home Loans, Inc., No. D057005, 2011 WL 566737, at *5 (Cal.App. 4 Dist. Feb.18, 2011) (“MERS is the owner and holder of the note as nominee for the lender, and thus MERS can enforce the note on the lender's behalf.”) (citation omitted). Instead, Murphy's argument is contradicted by the deeds of trust, which grant the express power of sale to the beneficiary in the event of default, stating that the beneficiary may “take action to have the Property sold under applicable law ...” RJN Exs. F, L.

A recent decision from the California Court of Appeal has addressed this very issue and in turn has solidified the so-called “tender rule” even further, holding that a beneficiary is authorized “to initiate foreclosure proceedings and invoke the tender rule against a defaulting borrower, even when the beneficiary is not the holder of the original promissory note.” Ferguson v. Avelo Mortgage, LLC, No. B223447, 2011 WL 2139143, at *5 (Cal.App. 2 Dist. June 1, 2011) (citations omitted). Ferguson made clear that “California law ‘does not require possession of the note as a precondition to [nonjudicial] foreclosure under a Deed of Trust.’ “ Id. (citing Jensen v. Quality Loan Service Corp., 702 F.Supp.2d 1183, 1189 (E.D.Cal.2010); Odinma v. Aurora Loan Services, No. C–09–4674 EDL, 2010 WL 1199886, at *4 (N.D.Cal. Mar.23, 2010); Morgera v. Countrywide Home Loans, Inc., No. 2:09–cv–01476–MCE–GGH, 2010 WL 160348, at *8 (E.D.Cal. Jan.11, 2010).); See also Gandrup v. GMAC Mortg., No. 11–CV–0659–LHK, 2011 WL 703753, at *2 (N.D.Cal. Feb.18, 2011) (“[U]nder California law, there is no requirement that the trustee have possession of the physical note before initiating foreclosure proceedings.”).

Murphy v. Wells Fargo Bank, N.A., 5:10-CV-05837-JF PSG, 2011 WL 2893069 (N.D. Cal. July 19, 2011)