Rossetta v. CitiMortgage, Inc.
C078916
| Cal. Ct. App. | Dec 18, 2017Background
- Rossetta defaulted on a 2005 mortgage after job loss and illness; she pursued loan modifications with CitiMortgage from 2010–2012 and alleges repeated document requests, lost/mishandled files, misleading statements, and delays.
- She received a three‑payment repayment plan in Aug 2010 and an online status printout (Exhibit B); she never received a HAMP trial period plan (TPP) or a permanent modification.
- In April 2012 a CitiMortgage representative (Sincox) allegedly promised Rossetta she was approved for a trial modification and, upon successful completion, would receive a permanent modification with a 2% fixed rate and principal reduction; she submitted documents but received no TPP.
- MERS assigned the deed of trust to CitiMortgage in Oct 2012; Rossetta later challenged assignments and alleged conversion in earlier pleadings.
- Procedural posture: Trial court sustained demurrer to Rossetta’s second amended complaint without leave to amend; Court of Appeal affirmed in part, reversed in part, and directed limited leave to amend for certain claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Intentional misrepresentation (Aug 2010 & Apr 2012) | Statements and documents led Rossetta to believe she had a TPP and would get a permanent HAMP modification; defendants falsely promised relief. | Exhibits and repayment plan do not promise a TPP or permanent modification; plaintiff failed to plead specific misrepresentations, authority of speakers, reliance, and damages. | Aug 2010 claims fail (no specific false promise, time‑bar, lack of reliance); April 2012 allegation that Sincox promised a TPP survives as to intent to amend for damages (leave to amend). |
| Negligent misrepresentation | Misstatements and mishandling of documents constitute negligent misrepresentation. | False promises about future performance cannot support negligent misrepresentation; such claims require past or existing facts. | Sustained: negligent misrepresentation dismissed without leave (future promises not basis for negligent misrep). |
| Negligence (duty in loan‑modification context) | CitiMortgage negligently mishandled applications, losing documents and repeatedly requesting duplicates, causing economic harm. | Banks generally owe no tort duty for ordinary lending activity; processing mods is within lender role. | Reversed: court adopts Alvarez‑style Biakanja analysis; alleged conduct (conditioning consideration on default, mishandling, repeated requests) can create a duty; negligence claim survives demurrer. (Concurring judge would require more than mere receipt/review.) |
| Unfair Competition Law (UCL) standing and merits | Rossetta spent time and resources and incurred economic injury from mishandled/mod process; UCL claims based on fraudulent/unfair practices in modification handling. | Time/effort alone is not economic injury; no underlying unfair or fraudulent practice adequately pled. | Reversed: Rossetta alleges an identifiable economic injury (UPS invoices + resources) and fraudulent/unfair practices (delays, false document‑deficiency assertions); UCL claim on fraudulent/unfair prongs survives. |
| Breach of contract / Promissory estoppel | Exhibit B + repayment plan or oral promises created contractual or estoppel obligations to provide permanent modification. | Repayment plan and Exhibit B do not form a TPP or an agreement to provide a permanent modification; oral promise to provide a TPP is an agreement to agree and unenforceable. | Breach of contract and promissory estoppel dismissed: written contract/instrument not shown; agreement to provide a TPP (general promise) is too indefinite—promissory estoppel dismissal affirmed, but court allows limited leave to amend on an April 2012 oral promise to provide a HAMP TPP. |
| Conversion (challenge to assignment) | Assignment to CitiMortgage (and later transfers) was void; conversion claim challenged title/assignment. | Assignments in the record do not show transfer to the 2006‑1 Trust; no actionable facts supporting conversion. | Affirmed: demurrer sustained without leave; complaint did not allege a factual basis showing assignment to 2006‑1 Trust. |
Key Cases Cited
- Bushell v. JPMorgan Chase Bank, N.A., 220 Cal.App.4th 915 (Cal. Ct. App.) (HAMP TPP framework and remedies for failure to provide permanent modification)
- West v. JPMorgan Chase Bank, N.A., 214 Cal.App.4th 780 (Cal. Ct. App.) (overview of HAMP procedures and TPP/permanent modification two‑stage process)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir.) (HAMP requirements and federal perspective on lender obligations)
- Alvarez v. BAC Home Loans Servicing, L.P., 228 Cal.App.4th 941 (Cal. Ct. App.) (when servicer agrees to consider modification, Biakanja factors may support a duty of care)
- Lueras v. BAC Home Loans Servicing, LP, 221 Cal.App.4th 49 (Cal. Ct. App.) (lender generally has no duty for loan modification processing; damages de minimis discussion)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal.) (UCL standing: plaintiff must plead economic injury and causation; ‘‘identifiable trifle’’ suffices for standing)
- Cel‑Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (Cal.) (UCL: unlawful, unfair, fraudulent prongs; Cel‑Tech limits the ‘‘unfair’’ test in antitrust context)