NOT TO BE PUBLISHED IN OFFICIAL REPORTS
Arden and Bonnie Kirkpatrick (the Kickpatricks) sued Wells Fargo Bank, N.A. (Wells Fargo), for wrongful foreclosure, breach of the covenant of good faith and fair dealing, and violation of Business & Professions Code section 17200 pertaining to a loan on their residential property. The trial court sustained Wells Fargo's demurrer to the Kickpatricks' third amended complaint without leave to amend. The Kirkpatricks appeal contending the court erred by sustaining the demurrer on the grounds they did not sufficiently allege their causes of action for wrongful foreclosure and violation of the covenant of good faith and fair dealing. The Kirkpatricks also claim the court erred by accepting the truth of Wells Fargo's foreclosure documents on judicial notice and by denying them the right to further amend their pleading. Finding no errors, we affirm the judgment.
In May 2007, the Kirkpatricks obtained a loan from World Savings Bank, FSB (Loan). The Loan was secured by a deed of trust recorded against the Kirkpatricks' property. Wells Fargo is the current servicer of the Loan. A notice of default was recorded in May 2013, although the Kirkpatricks do not allege they actually defaulted. The Kirkpatricks submitted a loan modification application, but this request was denied. Despite the Kirkpatricks' default and the denial of their loan modification request, the Kirkpatricks do not allege there has been a foreclosure on their property.
The operative complaint for purposes of this appeal is the Kirkpatricks' third amended complaint (TAC). The TAC alleged three causes of action against Wells Fargo: wrongful foreclosure, breach of the covenant of good faith and fair dealing, and violation of Business & Professions Code section 17200. In the TAC they allege, on information and belief, the original trustee of the deed of trust failed to properly substitute a new trustee, rendering the substitution of trustee void.
Wells Fargo demurred to the TAC. The trial court sustained Wells Fargo's demurrer without leave to amend.
We review a trial court's order sustaining a demurrer de novo and apply the abuse of discretion standard in reviewing the court's denial of leave to amend the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1250-1252.) When the court sustained the demurrer without leave to amend, we decide if "there is a reasonable possibility the plaintiff could cure the defect with an amendment. [Citation.] . . . [Citation.] The plaintiff has the burden of proving that an amendment would cure the defect." (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) "In conducting our de novo review, we `must "give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded." [Citation.] Because only factual allegations are considered on demurrer, we must disregard any "contentions, deductions or conclusions of fact or law alleged. . . ."'" (WA Southwest 2, LLC v. First American Title Ins. Co. (2015) 240 Cal.App.4th 148, 151.)
Adequacy of the Record
Wells Fargo first argues the judgment should be affirmed on the ground the Kirkpatricks failed to provide an adequate record to assess error. "A fundamental principle of appellate law is the judgment or order of the lower court is presumed correct and the appellant must affirmatively show error by an adequate record." (Parker v. Harbert (2012) 212 Cal.App.4th 1172, 1178.) We indulge all presumptions to support the lower court's order on all matters on which the record is silent. (Oliveira v. Kiesler (2012) 206 Cal.App.4th 1349, 1362.) "It is the burden of appellant to provide an accurate record on appeal to demonstrate error. Failure to do so precludes an adequate review and results in affirmance of the trial court's determination." (Estrada v. Ramirez (1999) 71 Cal.App.4th 618, 620, fn. 1.)
The Kirkpatricks challenged the court's decision to take judicial notice of certain information in its decision on the demurrer, but do not cite a single record reference in support of this argument in their opening brief. Indeed, the record is devoid of the court's minute order, notice of ruling on the demurrer, or the request for judicial notice itself. We have no way of determining whether the court actually took judicial notice at all. We find no error with the court's purported taking of judicial notice.
The Kirkpatricks did not attach the deed of trust to their TAC and also failed to include Wells Fargo's demurrer or reply in the record. They neglected to include the court's minutes from the hearing on the demurrer, even though the record reflects Wells Fargo filed a notice of ruling. There was no reporter's transcript available. While these deficiencies are substantial, in light of our de novo review, we turn to the TAC's allegations to determine if, given a reasonable interpretation, they state a cause of action.
The Demurrer Was Properly Sustained on the Wrongful Foreclosure Cause of Action
The Kirkpatricks' claim for wrongful foreclosure fails for a simple fact — they do not allege a foreclosure sale took place. An element of a wrongful foreclosure claim is an actual foreclosure, "`the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust.'" (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 408.)
The Kirkpatricks' TAC does not allege there was a sale of their property. They are unable to state a claim for wrongful foreclosure because they have never claimed one took place. In their briefing on appeal, the Kirkpatricks do not claim a foreclosure has now taken place or that they would amend their pleading to allege such facts.
The Kirkpatricks also contend there was a wrongful foreclosure because Wells Fargo acquired the loan via a botched securitization and did not have lawful standing to initiate foreclosure on the Kirkpatricks' residence. However, the Kirkpatricks failed to allege any specific facts supporting the conclusion that their loan was improperly securitized or invalidly assigned.
The Kirkpatricks' reliance on Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919 (Yvanova), does not help their case. Yvanova reversed the Court of Appeal's affirmance of an order sustaining a demurrer without leave to amend. (Id. at p. 943.) The Supreme Court held that the borrower had standing to sue for wrongful foreclosure because the assignment of the note and deed of trust was void. (Id. at pp. 942-943.) The decision was purposefully narrowed to this issue, and the opinion specifically stated it did "not hold or suggest that a borrower may attempt to preempt a threatened nonjudicial foreclosure by a suit questioning the foreclosing party's right to proceed." (Id. at p. 924.)
Yvanova is inapplicable for several reasons. First, the Kirkpatricks did not allege facts supporting the conclusion of a void assignment. (Yvanova, supra, 62 Cal.4th at pp. 929-930.) Second, Yvanova involved a situation where a foreclosure had actually taken place, and is factually distinguished from pre-foreclosure cases like this one. (Id. at pp. 925, 941.) Third, Yvanova involved a situation where the plaintiffs alleged a specific set of facts sufficient to state a claim for wrongful foreclosure because they claimed the deed of trust was assigned to a securitized trust several years after the trust's closing date and the lender's liquidation in bankruptcy. (Id. at p. 942.) Here, by contrast, the Kirkpatricks do not provide any factual allegations supporting the improper securitization, and only plead vague allegations on "information and belief" about the assignment of the Loan. Fourth and finally, the Kirkpatricks specifically allege Wells Fargo was the servicer on their Loan. Nothing in Yvanova prevents a servicer from proceeding with a foreclosure. Indeed, Civil Code section 2920.5, subdivision (a), specifically defines a "`Mortgage servicer'" as one capable of "enforcing the note or security instrument." Because the Kirkpatricks failed to properly allege a claim for wrongful foreclosure, the trial court properly sustained the demurrer on this cause of action without leave to amend.
The Demurrer Was Properly Sustained on the Breach of the Covenant of Good Faith and Fair Dealing Cause of Action
The Kirkpatricks' assertion in the TAC that a failure to comply with Civil Code section 2924.17 constitutes a breach of the covenant is unsupported by law. The Kirkpatricks point us to no authority for the proposition that a court may infer a breach of the covenant from a statutory violation. "[T]he covenant of good faith and fair dealing is, by definition, an implied contract term. It has no relation to any statutory duties which may exist." (Smith v. City & County of San Francisco (1990) 225 Cal.App.3d 38, 49.) Because the Kirkpatricks fail to allege a breach of the implied covenant of good faith and fair dealing based upon a contractual term, they cannot demonstrate the trial court erred in sustaining the demurrer on this claim.
Abuse of Discretion
The Kirkpatricks' claim they should have been given leave to amend their complaint for a fourth time. They bear "the burden of demonstrating that sustaining the demurrer without leave to amend was an abuse of discretion." (Brenner v. City of El Cajon (2003) 113 Cal.App.4th 434, 444.) This means they must show a reasonable possibility that an amendment will cure the defects in the operative pleading. (Ibid.) The Kirkpatricks did not provide a proposed amendment to cure the flaws in their pleading or suggest on appeal how they might cure those defects if given an opportunity to amend. Because the Kirkpatricks have not demonstrated a reasonable possibility that a further amendment will cure their defects, they have not carried their burden of showing the court abused its discretion in denying leave to amend.
The judgment is affirmed. Wells Fargo shall recover its costs on appeal.
O'LEARY, P. J. and BEDSWORTH, J., concurs.