EDWARD A.

TREDER
State Bar No. 116307
MASUMI J. PATEL
State Bar No. 233921
BARRETT DAFFIN FRAPPIER
TREDER & WEISS, LLP
20955 Pathfinder Road, Suite 300
Diamond Bar, California 91765
(626) 915-5714 — Phone
(626) 915-0289 — Fax
edwardt(a)dftw.com
File No. 20090159908346
Attorneys for Defendants

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF RIVERSIDE, LARSEN JUSTICE CENTER

BRIAN W DAVIES,
CASE NO. INC090697
UNLIMITED CIVIL
Plaintiff,
ASSIGNED FOR ALL PURPOSES TO:
VS.
HON. RANDALL D. WHITE, DEPT. 2H
NDEX WEST LLC, DEUTSCHE BANK
NATIONAL TRUST COMPANY, AS TRUSTEE
OF THE RESIDENTIAL ASSET MORTGAGE ELECTRONIC
SECURITIZATION TRUST 2007-A5, REGISTRATION SYSTEMS, INC.'S
MORTGAGE PASS THROUGH REPLY TO PLAINTIFF'S OPPOSITION
CERTIFICATES, SERIES 2007-E UNDER THE TO ITS DEMURRER TO THE SECOND
POOLING AND SERVICING AGREEMENT AMENDED COMPLAINT
DATED 3-1-07: INDYMAC MORTGAGE
SERVICING, A DIVISION OF ONEWEST
BANK; OPTEUM; UNIVERSAL AMERICAN Complaint Filed: October 23, 2009
MORTGAGE COMPANY OF CALIFORNIA; Trial Date: Not yet set.
MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC; UAMC LLC; DOES 1-20,

Defendants.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION

TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:
COMES NOW Defendant MORTGAGE ELECTRONIC REGISTRATION SYSTEMS,
INC. ("MERS") and submits the following Reply to Plaintiff BRIAN W DAVIES' ("Plaintiff')

Opposition to MERS' Demurrer to Plaintiffs Second Amended Complaint.

I. INTRODUCTION
Plaintiffs Opposition to MERS' Demurrer is drafted more like a Complaint than an

Opposition to a Demurrer, presumably in an attempt to cure the numerous defects in the Second

Amended Complaint. However, instead of ameliorating the defects, Plaintiffs Opposition is weak,

further confuses the issues, and misleads the Court. Rather than address the points and merits raised

in MERS' Demurrer, Plaintiff espouses new and additional facts and theories most, if not all, are

inarticulate and are too convoluted to decipher. This is wholly insufficient to satisfy Plaintiffs

burden of demonstrating in what manner he can amend his Second Amended Complaint and how that

amendment will change the legal effect of the pleading in order to survive MERS' Demurrer. 1Since

Plaintiff fails to address the merits of MERS' Demurrer and has not met his burden, Plaintiff

implicitly concedes his claims have no merit. Thus, this Court must sustain MERS' Demurrer

without leave to amend especially since this is Plaintiffs third attempt at correcting the shortcomings

in his operative Complaint without success.

II. LEGAL ARGUMENT

A. The Use Of A Nominee In Real Estate Transactions Is A Legitimate Practice And
Does Not Involve A Separation Of The Note And Deed Of Trust
MERS status as "nominee" is a common occurrence in public land records and "has long been

sanctioned as a legitimate practice." 2Individuals frequently confer rights on a "nominee," "agent,"

or "trustee" for a variety of purposes, including to execute or hold mortgage instruments. 3 In fact,

1
2
Goodman v. Kennedy (1976) 18 Ca1.3d 335, 349.
In re Cushman Bakery (1975) 526 F.2d 23, 30, cert. denied, (1976) 425 U.S. 93.
3 th
Id; Milton R. Friedman, Friedman on Contracts & Conveyances of Real Property, § 6:1.3 (James Charles Smith ed., 7
ed. 2007); In re Childs Co., (1947) 163 F.2d 379,382; Barkhausen v. Continental Ill, Nat'l Bank Trust Co. of Chicago
(1954) 120 N.E.2d 649, 655, cert. denied, 348 U.S. 897.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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there are a number of other situations where the mortgagee or beneficiary and the beneficial owner

are not the same party.

Deeds of Trust involving MERS clearly disclose MERS serves as the beneficiary, as nominee,

for the lender, its successors, and assigns. As detailed in length in MERS' Demurrer to the Second

Amended Complaint, Plaintiff accepted MERS' role in his mortgage transaction with his lender. The

concept of a nominee does not limit either the powers granted to MERS or its ability to exercise those

powers. Rather, it makes clear that MERS' actions are for the benefit of the MERS members who are

the lenders, successor, or assigns. Accordingly, MERS held the legal interest granted by Plaintiff in

his mortgage while other parties had the beneficial interest in his loan.

Nevertheless, Plaintiffs Opposition argues the Note and Deed of Trust were separated

because each is held by a party. 4However, Plaintiff's unsupported and illogical argument is

incorrect. Under California law, a secured promissory note traded on the secondary mortgage market

remains secured because the mortgage always follows the note. 5This is why the California

Legislature requires recordation of whoever holds the power of sale: either the mortgagee or the

trustee. 6Thus, MERS' role as a nominee does not serve to separate the Note and the Deed of Trust.

B. MERS Was Authorized To Commence The Foreclosure Process

Under California Civil Code section 2924(a)(1), a "trustee, mortgagee or beneficiary or any of

their authorized agents" may conduct the foreclosure process. Under California Civil Code section

2924b(4), a "person authorized to record the notice of default or the notice of sale" includes "an agent

for the mortgagee or beneficiary, an agent of the named trustee, any person designated in an executed

substitution of trustee, or an agent of that substituted trustee." "Upon default by the trustor, the

beneficiary may declare a default and proceed with a nonjudicial foreclosure sale." 7 There is no

stated requirement in California's non-judicial foreclosure scheme that requires a beneficial interest

4
Opposition, page 8, lines4 — 5.
5
Cal. Civ. Code § 2936; In re Vargas, 396 B.R. 511, 516 (Bkrtcy.C.D.Cal., 2008.)
6
Stockwell v. Barnum (1908) 7 Cal.App. 413 (construing predecessor statute; distinguishing mortgage and deed of trust);
Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868 (foreclosure sale valid only if conducted by trustee of record.)
7
Moeller vs. Lien, (1994) 25 Cal.App.4th 822, 830.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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in the Note to foreclose. Rather, the statute broadly allows a trustee, mortgagee, beneficiary, or any

of their agents to initiate non-judicial foreclosure. Accordingly, the statute does not require a

beneficial interest in both the Note and the Deed of Trust to commence a non-judicial foreclosure.

This interpretation is consistent with prior rulings of this court, along with many others, that

MERS has standing to foreclose as the nominee for the lender and beneficiary of the Deed of Trust
8
and may assign its beneficial interest to another party. While Plaintiff attempts to confuse the Court

over what is MERS' role, the Nebraska Supreme Court succinctly paraphrased MERS' role by

stating, "... lenders retain the promissory notes and servicing rights to the mortgage, while MERS

acquires legal title to the mortgage for recordation purposes" 9and "MERS serves as legal title holder
10
in a nominee capacity ...

In his Opposition, Plaintiff cites to various cases for the proposition that as the beneficiary

and nominee for the lender and its successors and assigns, MERS is unable to transfer any interest in

a Deed of Trust and cannot foreclose upon real property secured by a Deed of Trust. Once again,

Plaintiff is incorrect.

Plaintiff's misunderstanding is based upon his misconstruction of the holdings of the cases to

which he cites, none of which are applicable in the instant matter. Specifically, in the In re

Foreclosure Cases, each of these cases involved a judicial foreclosure where MERS was not the
11
foreclosing party. The present case differs from the In re Foreclosure Cases because this case

concerns a non-judicial foreclosure where MERS had an interest in the Deed of Trust and legally

commenced Plaintiff's foreclosure.

The In re Vargas and the Lamy cases involved a motion for relief from stay and a judicial

foreclosure respectively, which again, are inapplicable to this case which involves a non-judicial

8
See, e.g., Morgera v. Countrywide Home Loans, Inc., No. Civ. 2:09-01476 MCE GGH, 2010 WL 160348, at *8 (E.D.
Cal. Jan. 11, 2010) (collecting cases); Pantoja v. Countrywide Home Loans, Inc., 640 F. Supp. 2d 177 (N.D. Cal. 2009);
Castaneda v. Saxon Mortg. Servs., Inc., --- F. Supp. 2d ----, No. Civ. 2:09-01124 WBS DAD, 2009 WL 4640673, at *4
(E.D. Cal. Dec. 3, 2009); Bentham v. Aurora Loan Servs., No. C-09-2059 SC, 2009 WL 2880232, at *3 (N.D. Cal. Sept.
1, 2009); Kachlon v. Markowitz, 186 Cal. App. 4th 316, 334-35 (2008).
9
10
MERS v. Nebraska Department of Banking and Finance (2005) 704 N.W.2d 784, 788.
Id.
11
In re Foreclosure Cases (2007) 521 F. Supp.2d 650.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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foreclosure. 12 In In re Vargas, evidence of MERS interest in the note was not presented to the court

and therefore the motion for relief from stay was denied. In Lamy, as in In re Foreclosure Cases,

MERS was not the foreclosing party. The foreclosing party in Lamy failed to provide the court with

evidence of its interest in the note and mortgage at the time the foreclosure was commenced, and

therefore the judgment of foreclosure was denied. However, the Lamy case's deficiencies were later

rectified, and a foreclosure judgment was obtained in 2008. Contrary to Plaintiff's assertions, these

cases are inapplicable to the present matter. MERS was the beneficiary under Plaintiff's Deed of

Trust and properly transferred its interest in the Deed of Trust.

Since MERS can transfer its interest in the Deed of Trust and is authorized to commence a

non-judicial foreclosure sale of real property, Plaintiff's theories have no merit.

C. Plaintiff Must Allege Tender To Survive A Demurrer

Plaintiff's Opposition to MERS' tender argument is premised upon the recent decision in

Mabry v. Superior Court. 13Mabry contains a discussion of the well established law requiring a

defendant who wishes to challenge a completed foreclosure sale to tender the full amount due within

the context of Civil Code §2923.5. As a result, Plaintiff alleges he does not have to tender.

However, Plaintiff is incorrect, and his argument fails.

First and foremost, this action does not concern a completed foreclosure sale; it concerns a

pending foreclosure sale. As evidenced by the documents attached to the Request for Judicial Notice
and as Plaintiff readily admits, there has been no Notice of Trustee's Sale recorded against the

Property.

Second, Plaintiff alleges numerous statutory violations and legal theories in his Second

Amended Complaint, only one of which is an alleged violation of Civil Code §2923.5. Thus, even if

In re Vargas, 396 B.R. 511 (Bkrtcy.C.D.Cal., 2008); LaSalle Bank Nat. Ass'n v. Lamy (2006) 824 N.Y.S.2d 769.
12
13
2010 WL 2180530 (Cal.App. 4 Dist.).
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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this action concerned a completed foreclosure, Plaintiff is required to allege tender in order to

proceed on his other theories of recovery.14

Third, the trial court in Mabry did obligate the borrower to tender the amount in arrears

which was not overturned by the Court of Appeal. Thus, Plaintiff is still required to tender, at the

minimum, the amount in arrears.

Furthermore, even if Plaintiff alleges it would be inequitable for him to tender, he is mistaken;

it would be inequitable for him not to tender because he has been residing in the property since

December 2008 without paying his recurring monthly installments, real property taxes, or hazard

insurance premiums Furthermore, he completely fails to allege he would be able to make a full and

complete tender as a condition of judgment. Thus, this Court must sustain MERS' Demurrer in its

entirety without leave to amend.

D. Plaintiff's Claims Of Statutory Violations Fails

1. California Civil Code §§2923.5 and 2924

For the first time, Plaintiff alleges MERS violated Civil Code §§2923.5 and 2924 by
15
"prematurely executing the assigned power of sale clause in Plaintiff's Deed of Trust."

Unfortunately, Plaintiff's claims is too conclusory. This statement is completely devoid of any facts,

specifics, or any information whatsoever as to put MERS on notice of which of the numerous

provisions of Civil Code §§2923.5 and 2924 it allegedly violated. Furthermore, Plaintiff even fails to

allege how "prematurely executing the assigned power of sale clause in Plaintiff's Deed of Trust"

violates these code sections.

Based on Plaintiff's convoluted Opposition, it also appears Plaintiff is alleging MERS

violated Civil Code §2923.5 because it "willfully and knowingly invoked the power of sale clause in

14
Shimpones v. Stickeney (1934) 219 Cal. 637, 649; Abdallah v. United Savings Bank (1996) 43 Cal.App.4th 1101, 1109;
MCA, Inc. v. Universal Diversified Enterprises Corp. (1972) 27 Cal.App.3d 170, 177; Karlsen v. American Savings and
Loan Assoc. (1971) 15 Cal.App.3d 112, 117.
15
Opposition, page 10, lines 25 — 26.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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 16
Plaintiff's deed of trust without the proper assignment." Unfortunately, Plaintiff is once again
incorrect.

First and foremost, Plaintiff's allegation makes no sense. As set out in detail in MERS'

Demurrer to Plaintiff's Second Amended Complaint, MERS already possessed the authority to

commence foreclosure pursuant to the terms of Plaintiff's Deed of Trust. Despite Plaintiff's contrary

assertions, MERS was the entity that actually invoked the power of sale clause not Deutsche Bank.

This is plainly stated on the second page of the Notice of Default. Accordingly, there is no need for

MERS to possess an Assignment in order to foreclosure because it already had the power pursuant to

the Deed of Trust. Thus, Plaintiff's illogical allegation that there must be an assignment utterly fails.

Further an assignment does not even have to be recorded pursuant to Civil Code §2934. This

section provides: "Any assignment of a mortgage and any assignment of the beneficial interest under

a deed of trust may be recorded, and from the time the same is filed for record operates as

constructive notice of the contents thereof to all persons. . ." 17Further, under Civil Code §2936, the

transfer of a Promissory Note carries with it the assignment of the Deed of Trust regardless of
18
whether it is recorded. Thus, the Assignment of the Deed of Trust is not required to be recorded,

and if it is recorded, the only purpose of the recording is to put others on constructive notice of the

Assignment.

Since MERS had the power to invoke the power of sale clause pursuant to the Deed of Trust

and an Assignment does not even have to be recorded, and MERS did not and could not have violate

Civil Code §§2923.5 and 2924.

2. California Civil Code §2934

Once again, Plaintiff alleges new confusing and convoluted facts. In support of his violation

of Civil Code §2934 claim, it appears Plaintiff is now claiming Deutsche (not MERS) violated this

16
Opposition, page 11, line 11 — 12.
17
Civ. Code, §2934. (Emphasis added.)
18
Civ. Code, §2936.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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section because it could not validly substitute Defendant NDEX WEST, LLC ("NDEx") as the
19
Trustee as it was not assigned the Deed of Trust. Once again, Plaintiff is incorrect.

First and foremost, this claim is too conclusory as Plaintiff has not allege how this violates

Civil Code §2934. Furthermore, Plaintiff is unable to amend his Complaint to cure this defect

because Civil Code §2934 has nothing to do with the recordation of a Substitution of Trustee.

Instead, Civil Code §2934 pertain to Assignments and states an Assignment may be recorded, and if

recorded, it operates as constructive notice.

Second, at the time the Substitution of Trustee was executed, Deutsche was assigned the Deed

of Trust. The Assignment to Deutsche was executed in August of 2009 and the Substitution of

Trustee was executed in October 2009. Thus, Plaintiff's claim fails, and this Court must sustain

MERS' Demurrer without leave to amend.

3. California Civil Code §2943

Second, at the time the Substitution of Trustee was executed, Deutsche was the beneficiary

under the Deed of Trust with the authority to substitute the trustee pursuant to Civil Code §2943a.

The Assignment to Deutsche was executed in August of 2009 and the Substitution of Trustee was

executed in October 2009. Thus, Plaintiff's claim fails, and this Court must sustain MERS'

Demurrer without leave to amend.

E. Plaintiff's Third Cause Of Action For Slander Of Title Fails

Despite the new allegations contained in Plaintiff's Opposition, Plaintiff still fails to satisfy all

the required elements to prevail on his Slander of Title claim. Namely, Plaintiff is unable to allege

the alleged slander disparaged the conduct of a third party purchaser or any potential lessee of the

Property, the alleged slander was published by MERS, the statements were false, and Plaintiff

sustained monetary damages. In fact, Plaintiff is unable to demonstrate he sustained any monetary

damages as he has been living in the Property without paying his recurring obligations and the

alleged disparaging statements have resulted in a windfall to Plaintiff. Since Plaintiff did not and

19
Opposition, page 11, lines 20 — 27.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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cannot establish all of the requisite elements, MERS' Demurrer to the Slander of Title Cause of
Action must be sustained without leave to amend.
F. Violation Of Business And Professions Code §17200, Et Seq.

Plaintiff's Fourth cause of action for Violation of Business and Professions Code §17200, et
seq. is only alleged against Defendant "UAMCC." According to Plaintiff's Second Amended
Complaint, he has not alleged this claim against any other defendant including MERS. Thus, MERS
will not address the issues raised in Plaintiff's Opposition.
G. Plaintiff's Intentional Deceit Claim Fails

Plaintiff's entire Opposition seems to based on Plaintiff's allegation the Assignment is

20
invalid, and as a result, MERS has perpetrated a deceit upon Plaintiff. This claim is also too
conclusory to survive MERS' Demurrer because Plaintiff does not satisfy the seven essential
elements. 21 Furthermore, as demonstrated supra, the Assignment is not invalid nor is the Notice of
Default. Thus, this Court must sustain MERS' Demurrer to the Sixth cause of action without leave to
amend.
III. CONCLUSION

This is now Plaintiff's third "bite at the apple," and yet Plaintiffs Second Amended
Complaint is still completely deficient, devoid of any specificity to properly apprise Deutsche of the
claims against it, and none of the deficiencies can be cured with an amended pleading. As such,
Defendant MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. respectfully requests
this Court grant its Demurrer as to the entirety of Plaintiffs verified Second Amended Complaint
///
///
///
///

20
Opposition, page 13, line 27 to page 14, line 5.
th
21
Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4 1486, 1498; Engalla v. Permanente Medical Group, Inc.
(1997) 15 Ca1.4th 951, 974.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC 'S REPLY TO PLAINTIFF'S OPPOSITION
TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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without leave to amend.

BARRETT DAFFIN FRAPPIER TREDER &

WEISS, LLP

Dated: July 23, 2010 By:

MASUM J. PATEL, Attorneys for
Defenda = s INDYMAC MORTGAGE
SERVICING, A DIVISION OF ONEWEST
BANK, FSB; NDEX WEST, LLC; MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
INC.; and DEUTSCHE BANK NATIONAL
TRUST COMPANY, AS TRUSTEE OF THE
RESIDENTIAL ASSET SECURITIZATION
TRUST 2007-A5, MORTGAGE PASS-
THROUGH CERTIFICATE, SERIES 2007-E
UNDER THE POOLING AND SERVICING
AGREEMENT DATED MARCH 1, 2007

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION

TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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 PROOF OF SERVICE BY MAIL (C.C.P. 1013a, 2015.5)

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

I, J.C. Lewis, Jr., declare as follows:

I am employed in Los Angeles County, I am over the age of eighteen years and am not a party
to the within entitled action; my business address is 20955 Pathfinder Road, Suite 300, Diamond Bar,
California 91765.

On July 22 2010, I served the following:

,

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO

PLAINTIFF'S OPPOSITION TO ITS DEMURRER TO THE SECOND AMENDED
COMPLAINT

on the interested parties in said action by Federal Express/Overnight Mail, as follows:

SEE ATTACHED SERVICE LIST

I am "readily familiar" with the firm's practice of collection and processing of

correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service
on that same day with postage thereon fully prepaid at Diamond Bar, California, in the ordinary
course of business. I am aware that on motion of the party served, service is presumed invalid if
postal cancellation date or postage meter date is more than one day after the date of deposit for
mailing affidavit/declaration.

I declare under penalty of perjury and the laws of tate of California that the foregoing is
true and correct.
1-t
Executed on Jul 2010, at D ar, California.

LEWIS. JR.

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.'S REPLY TO PLAINTIFF'S OPPOSITION

TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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 SERVICE LIST

BRIAN W. DAVIES PLAINTIFF IN PRO SE

43277 SENTIERO DRIVE
INDIO, CA 92203
PH: 760-904-4928
FAX: 760-406-9865
760-673-7097

ROBERT E. FEYDER
KEVIN ASFOR DEFENDANTS
K & L GATES UNIVERSAL AMERICAN MORTGAGE OF
10100 SANTA MONICA BLVD CALIFORNIA and UAMC LLC
7th FLOOR
LOS ANGELES, CA 90057
PH: 310-552-5000
FAX: 552-5001

JAMES J. SCARELLA DEFENDANT

78-925 ZENITH WAY
LA QUINTA, CA 92253

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS. INC.'S REPLY TO PLAINTIFF'S OPPOSITION

TO ITS DEMURRER TO THE SECOND AMENDED COMPLAINT
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