Rufini v. CitiMortgage CA1/3
227 Cal. App. 4th 299
Cal. Ct. App.2014Background
- Rufini purchased a Sonoma home in 2007 with a $600,000 loan secured by a deed of trust.
- He sought a loan modification; CitiMortgage approved a trial modification in 2009 with a promise of a permanent modification in October.
- He timely paid the trial payments through December 2009 and relied on CitiMortgage’s promise.
- CitiMortgage later denied modification, claiming non-occupancy; it began foreclosure proceedings in 2010.
- A notice of default was issued in Sept. 2010 and a trustee’s sale occurred on May 4, 2011 after loan was allegedly transferred to PennyMac.
- Rufini alleged multiple theories (breach of contract and covenant, wrongful foreclosure, fiduciary duties, negligence, negligent misrepresentation, and UCL) and sought equitable relief and damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract and related claims | Rufini alleges CitiMortgage breached its modification agreement after his compliance. | CitiMortgage contends no enforceable modification existed and thus no breach. | Remanded to allow amendment; court reverses on some related contract theories. |
| Negligent misrepresentation | CitiMortgage misrepresented permanent modification and deceived Rufini during modification negotiations. | Bank argues no duty or misrepresentation support. | Demurrer reversed; 사 sufficient at pleading stage to state misrepresentation claim. |
| Unfair competition under Bus. & Prof. Code §17200 | CitiMortgage’s actions were unlawful, unfair, and deceptive in pursuing foreclosure while pretending modification. | No predicate act shown and standing lacking. | 17200 claim viable; affirmed reversal on this theory. |
| Negligence and fiduciary duty | CitiMortgage owed duties in handling modification and foreclosure. | No fiduciary duty in arm’s-length loan transaction; negligence duplicative. | Affirmed for general negligence and fiduciary duty; reversed for amendment possibilities on remand. |
Key Cases Cited
- Ragland v. U.S. Bank Nat. Assn., 209 Cal.App.4th 182 (2012) (duty considerations in loan contexts; negligent misrepresentation analysis)
- Nungaray v. Litton Loan Servicing, LP, 200 Cal.App.4th 1499 (2011) (compliance with TPP; treatment for modification contracts)
- Barroso v. Ocwen Loan Servicing, LLC, 208 Cal.App.4th 1001 (2012) (duty and contract principles in loan modifications)
- Chavez v. Wells Fargo Bank, N.A., 219 Cal.App.4th 1052 (2013) (modification obligations and pleading standards)
- Bushell v. JPMorgan Chase Bank, N.A., 220 Cal.App.4th 915 (2013) (modification process under HAMP; remedies for breach of TPP)
- West v. JPMorgan Chase Bank, N.A., 214 Cal.App.4th 780 (2013) (HAMP-like modification procedures and enforceability)
- Small v. Fritz Companies, Inc., 30 Cal.4th 167 (2003) (statute of frauds and forbearance considerations in contract claims)