FILED
                            NOT FOR PUBLICATION
                                                                            SEP 14 2016
                   UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS


                           FOR THE NINTH CIRCUIT


CLARITA B. BARCARSE, individually                No.   14-55285
and as Trustee of the I.R. and C.B.
Barcarse Revocable Trust dated                   D.C. No.
8/4/1987; ISAIAS R. BARCARSE,                    2:13-cv-04386-JAK-FFM
individually and as Trustee of the I.R.
and C.B. Barcarse Revocable Trust
dated 8/4/1987,                                  MEMORANDUM*

              Plaintiffs - Appellants,

 v.

CENTRAL MORTGAGE COMPANY;
DEUTSCHE BANK NATIONAL
TRUST COMPANY, erroneously sued
as Deutsche Bank National Trust
Company, Trustee for the
Certificateholders of DSLA Mortgage
Loan Trust 2005-AR3, Mortgage Pass-
Through Certificates Series 2005-AR3;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
OLD REPUBLIC DEFAULT
MANAGEMENT SERVICES,

              Defendants - Appellees.




         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                                                                                   page 2
                    Appeal from the United States District Court
                       for the Central District of California
                    John A. Kronstadt, District Judge, Presiding

                       Argued and Submitted August 4, 2016
                               Pasadena, California

Before:       REINHARDT, KOZINSKI and WARDLAW, Circuit Judges.

      1.     Under Yvanova v. New Century Mortgage Corp., 365 P.3d 845,

851–60 (Cal. 2016), third parties may bring a wrongful foreclosure suit only if they

allege errors rendering an aspect of the assignment of their debt void, not just

voidable. Here, the defects raised by the Barcarses would, at most, make the

transfer of their debt voidable. The Barcarses alleged that defendants violated a

Pooling Services Agreement (PSA) when transferring their note and deed to a trust,

resulting in any later transfers also being invalidated. Under New York law, to

which the Barcarses claimed the PSA was subject, these alleged violations of the

trust agreement would make the transfers voidable, not void. See Rajamin v.

Deutsche Bank Nat’l Trust Co., 757 F.3d 79, 87–90 (2d Cir. 2014); Saterbak v.

JPMorgan Chase Bank, N.A., 199 Cal. Rptr. 3d 790, 796 (Ct. App. 2016). The

Barcarses also claimed that the transfer of their debt from Downey Savings and

Loan Association (DSLA) to defendant Mortgage Electronic Registration Systems

(MERS) was in error because the assignment was allegedly “robo-signed” by an
                                                                                 page 3
individual who was not an employee of DSLA. But this “robo-signature” wouldn’t

render the transfer of their debt void because a signature by an unauthorized party

on a negotiable instrument is subject to ratification. Cal. Com. Code § 3403(a).

Because the Barcarses lack standing under state law to challenge the defendants’

ability to foreclose, we conclude that the district court did not err in dismissing the

related declaratory relief, quiet title and fraudulent business practices causes of

action, all of which challenged the foreclosure proceeding.


      2.     The Barcarses claimed that defendant Old Republic isn’t a trustee

because there was no valid substitution. But, as discussed above, the alleged

defects in the previous note transfers were merely voidable; thus, the substitution

was valid. As a validly substituted trustee, Old Republic’s only responsibility was

to foreclose on the deed upon default or to reconvey the deed upon payment. See

Heritage Oaks Partners v. First Am. Title Ins. Co., 66 Cal. Rptr. 3d 510, 514 (Ct.

App. 2007). The Barcarses didn’t allege Old Republic failed in either of its duties.

They only alleged that Old Republic knew of purportedly fraudulent conduct by

the other defendants. But no factual allegations supported this claim. Therefore,

the district court properly dismissed all claims against Old Republic.
                                                                                 page 4
      3.     The Barcarses alleged that defendants CMC and Deutsche Bank were

negligent because they breached their duties by not following California law and

by engaging in fraudulent conduct. A lender owes no duty of care to a borrower

when the lender’s involvement in the transaction doesn’t exceed the scope of the

traditional lender’s responsibility. See Nymark v. Heart Fed. Savs. & Loan Ass’n,

283 Cal. Rptr. 53, 56–57 (Ct. App. 1991). Here, the Barcarses made only

conclusory allegations that CMC and Deutsche Bank exceeded the scope of the

traditional lender’s responsibility.

      Further, the Barcarses didn’t plead facts showing that any of the alleged

negligent conduct was the proximate cause of their pending foreclosure. The

Barcarses claimed costs of suit, attorney’s fees and the loss of marketable title as

injuries, but those injuries also weren’t caused by any alleged negligent conduct by

the defendants. Therefore, the district court properly dismissed the Barcarses’

negligence claim.


      4.     Restitution is appropriate “when the parties had an express contract,

but it was procured by fraud or is unenforceable or ineffective for some reason.”

McBride v. Boughton, 20 Cal. Rptr. 3d 115, 121 (Ct. App. 2004). Restitution is

also available for quasi-contract causes of action if there isn’t an express contract,
                                                                                  page 5
the plaintiff chooses not to sue in tort and the defendant obtains a benefit by

“fraud, duress, conversion, or similar conduct.” Id. at 121–22.

      The Barcarses alleged that CMC and Deutsche Bank were unjustly enriched

by collecting payments from the Barcarses without having any valid interest in the

note, thus putting the Barcarses at risk of “competing claims” for their mortgage

payments. But the Barcarses didn’t allege any facts showing that the defendants’

interests in the note were void, or that there were any competing claims to the

Barcarses’ payments. Without such facts, the Barcarses didn’t allege a viable

theory that the defendants were unjustly enriched by the Barcarses’ payments.

Therefore, the district court properly dismissed the Barcarses’ quasi-contract cause

of action.


AFFIRMED.