Rossberg v. Bank of America CA4/3
219 Cal. App. 4th 1481
| Cal. Ct. App. | 2013Background
- Shaun and Brenda Rossberg borrowed over $600,000 in 2007 from Bank of America (BofA) secured by a First Deed of Trust on their Irvine home; they later borrowed $58,000 more with a Second Deed of Trust.
- Poolings and Servicing Agreement transferred interests to U.S. Bank as trustee, though the Rossbergs allege various transfers of the notes/deeds under the trust structure.
- Beginning in 2009, the Rossbergs engaged in lengthy loan modification attempts with BofA, including multiple representations by BofA employees that modifications had been granted with specific terms.
- BofA substituted Cal-Western Reconveyance Corporation as trustee and recorded a Notice of Default in September 2009, followed by a Notice of Trustee’s Sale in 2010, amid ongoing modification discussions.
- Rossbergs filed suit in 2011 seeking to halt foreclosure, asserting statutory violations, lack of authority for the trustee, and fraud from promised loan mods; later amended to include several claims and exhibits.
- Trial court sustained demurrers to all causes of action without leave to amend; the court later dismissed the action and the appeal (and related writ petition) followed, with mootness given the sale and possession proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 2923.5 claims were adequately pleaded | Rossbergs alleged lack of proper contact before default and false declaration. | Declaration complied with 2923.5 and Rossbergs failed to plead improper contact more than 30 days before default. | Demurrer sustained; no valid 2923.5 claim. |
| Whether 2924 et seq. foreclosure was legally defective | Notice of Default recorded before proper authority; process void. | Cal-Western acted as trustee/agent with proper authority; notices were valid. | Demurrer sustained; no valid 2924-based challenge. |
| Whether promissory fraud was adequately pleaded | BofA/US Bank promised loan modifications with reliance and damages. | Complaints failed to allege specific damages or causal link between reliance and damages. | Demurrer sustained; insufficient damages/reliance pleaded. |
| Whether the statute of frauds bars the contract-based claim | Oral modification could be enforced; loan modification terms varied. | Modification must be in a signed writing; no signed modification alleged. | Demurrer sustained; no enforceable contract modification pleaded. |
Key Cases Cited
- Jenkins v. JPMorgan Chase Bank, N.A., 216 Cal.App.4th 497 (Cal. Ct. App. 2013) (deed-of-trust foreclosure framework and trustee duties)
- Debrunner v. Deutsche Bank National Trust Co., 204 Cal.App.4th 433 (Cal. Ct. App. 2012) (reading nonjudicial foreclosure statutes as a comprehensive scheme)
- Fontenot v. Wells Fargo Bank, N.A., 198 Cal.App.4th 256 (Cal. Ct. App. 2011) (presumption of regularity in nonjudicial foreclosures; burden to plead lack of authority)
- Secrest v. Security National Mortgage Loan Trust 2002-2, 167 Cal.App.4th 544 (Cal. Ct. App. 2008) (statute of frauds and modification within mortgage context)
- Haynes v. EMC Mortgage Corp., 205 Cal.App.4th 329 (Cal. Ct. App. 2012) (section 2932.5/applicability to deeds of trust vs mortgages)
- Gomes v. Countrywide Home Loans, Inc., 192 Cal.App.4th 1149 (Cal. Ct. App. 2011) (foreclosure authority and lack of alleged authority standards)
- Auerbach v. Great Western Bank, 74 Cal.App.4th 1172 (Cal. Ct. App. 1999) (damages under promissory fraud; reliance considerations)
- Mabry v. Superior Court, 185 Cal.App.4th 208 (Cal. Ct. App. 2010) (statutory compliance and pleadings in section 2923.5 context)
- Hensler v. City of Glendale, 8 Cal.4th 1 (Cal. 1994) (restricting consideration of extra-pleading evidence in demurrer review)