Hamilton v. Greenwich Investors XXVI, LLC
195 Cal. App. 4th 1602
| Cal. Ct. App. | 2011Background
- Hamiltons sued Greenwich Investors XXVI, LLC and SPS over foreclosure and alleged lender misconduct; the trial court sustained a demurrer without leave to amend; the bankruptcy filing by Henry Hamilton involved nondisclosure of lender claims; the forbearance agreement required periodic payments and a potential stay of foreclosure; Greenwich Investors later processed payments and demanded arrearages; the alleged violations include failure to contact under Civil Code 2923.5 and related sections; the foreclosure sale had been scheduled and then postponed by court orders.
- The forbearance agreement cited a $42,453.51 cure amount over 10 months, with payments beginning Dec 14, 2007; only a few payments were made, and transfer of loan to Greenwich Investors occurred before March 2008; Greenwich Investors demanded full arrearages and correspondence ceased.
- Hamiltons listed Greenwich Investors as a secured claim in bankruptcy schedules but did not disclose the claim against Greenwich Investors.
- Bankruptcy stay was lifted; the confirmed Chapter 13 plan provided postpetition payments to Greenwich Investors and cured prepetition arrearages; the plan was confirmed Feb 2, 2009.
- The court relied on judicial/equitable estoppel to bar claims under Oneida Motor Freight and explained distinctions from Ryan Operations, Cloud, and Gottlieb; Mabry governs 2923.5/2923.6 remedies and private rights of action for foreclosure-limiting protections.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Oneida Motor Freight estoppel bars claims | Hamiltons argue no estoppel | Greenville Investors/Defendants contend estoppel applies | Yes, estoppel bars the claims |
| Whether breach of contract/fraud claims survive | Claims alleged breach of forbearance and fraudulent misrepresentation | No performance/excuse alleged; conclusory fraud not pled | Claims fail; demurrer affirmed |
| Whether 2923.5/2923.6 foreclose private action viability | Statutory remedies exist to postpone foreclosure | Remedies are limited to postponement; no duty to modify | Mabry controls; no viable private action beyond postponement |
| Whether amendment to pleadings was proper | Could amend to state 17200 claim | No loss or proper basis; already barred | Amendment not warranted; 17200 claim not viable |
Key Cases Cited
- Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414 (3d Cir. 1988) (equitable and judicial estoppel bar lender claims in bankruptcy context)
- Billmeyer v. Plaza Bank of Commerce, 42 Cal.App.4th 1086 (Cal. App. 1995) (debtors barred after bankruptcy plan confirmation for nondisclosure)
- Conrad v. Bank of America, 45 Cal.App.4th 133 (Cal. App. 1996) (bankruptcy nondisclosure bars claims where creditor status exists)
- Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355 (3d Cir. 1996) (bad faith not shown; explains distinguishers to estoppel analysis)
- Cloud v. Northrop Grumman Corp., 67 Cal.App.4th 995 (Cal. App. 1998) (noncreditor defendant; need for fact-finding beyond pleadings; standing concerns)
- Gottlieb v. Kest, 141 Cal.App.4th 110 (Cal. App. 2006) (bankruptcy dismissal without plan; limits estoppel applicability)
- Mabry v. Superior Court, 185 Cal.App.4th 208 (Cal. App. 2010) (private right of action under 2923.5; remedy limited to postponement of foreclosure)