*1 Dist., Oct. Fourth Div. Three. 2013.] G046799. [No. LUERAS, Plaintiff and
RICHARD Appellant, al., SERVICING, LP, Defendants and Respondents. et BAC HOME LOANS *6 Counsel
Law Offices of Lenore Albert and Lenore L. Albert for Plaintiff and Appellant. Smith, Reed David J. de Jesus and Adam M. Forest for Defendants and Respondents.
Opinion
FYBEL, P. Acting J.
Introduction the trial court entered after from a judgment Richard appeals first amended to his verified amend a demurrer without leave to sustained of his the foreclosure sale After (the Amended Complaint). First complaint America, N.A., to BAC home, by merger successor Bank of Lueras sued N.A. America), ReconTrust (Bank Company, LP Home Loans Servicing, Association, called commonly Mortgage and Federal National (ReconTrust), asserted The First Amended Complaint as “Fannie Mae.” and referred to contract, Perata violation for breach negligence, causes of action Code, unfair 2923.5), (Civ. fraud/misrepresentation, Act Relief Mortgage § Code, title. 17200), and to (Bus. & Prof. quiet and unlawful § practices directed specifically included no allegations The First Amended Complaint As Mae, in its favor. therefore affirm the judgment to Fannie and we ReconTrust, of action as to causes we affirm judgment of America but, title, in all other and to Code section quiet for violation of Civil 2923.5 Amended to amend the First and remand to reverse respects, permit Complaint. a mere 13 is that in the First Amended Complaint fact key home, America Bank of America foreclosed on Lueras’s before Bank of
days sale would occur to Lueras that no foreclosure writing falsely represented foreclosure avoidance pro- considered for “other while Lueras was being informed writing and in Bank of America doing, expressly so grams.” A Bank of review period.” home this during Lueras he “will not lose [his] sale informed Lueras the pending America also representative Nevertheless, later, on Bank of America foreclosed days be would postponed. Lueras’s home. leave to a demurrer without the trial court sustained
Another key point filed two only Lueras had Amended amend to the First Complaint—i.e., law before dismissal. facing area of evolving in a complaints complicated in granting of liberality and California’s Given the standard of review policy the First amendments, to amend be an given opportunity Lueras should Amended Complaint.
Allegations demurrer, factual we accept the order sustaining In reviewing Green (Committee Amended true. as Complaint of the First allegations *7 56 County Santa Clara Bd. 32, v. Supervisors
Foothills (2010) 48 Cal.4th 42 181, 920].) 224 P.3d Cal.Rptr.3d We also as true facts accept [105 appearing (Sarale v. Gas & Electric Co. in exhibits attached to the complaint. Pacific 225, (2010) 24]; Dodd v. 189 245 Cal.App.4th Cal.Rptr.3d Citizens [117 Costa Mesa 1624, 222 623].) 1626-1627 Cal.App.3d Cal.Rptr. exhibit, If the facts in the conflict expressly alleged with an the complaint Co., (Sarale contents Gas & Electric of the exhibit take v. precedence. Pacific at n 2007, In March refinanced his home loan in the amount of $385,000. $1,965.10. The monthly on the loan was To payment 30-year loan, secure the a trust deed Lueras’s home was recorded. against Lueras made due until he and every monthly payment his wife suffered financial In hardship. loan modification from the requested lender, America, Bank of under the Home Affordable Modification Program (HAMP).1 Fannie Mae instituted the HomeSaver Forbearance program,
which was available to those who did not for HAMP loan modifica- qualify tions. the First Amended According Complaint, program “[t]he to lead to that the so borrower could ‘save’ their supposed permanent plan home and the interim offer the owner a 6 month plan reducing [sic] 30% to 50% less than the current monthly payment by mortgage payment.” 09-05R,2 Fannie Mae’s Announcement issued in “Home- stated: April Saver Forbearance is a new loss available to borrowers mitigation option either are in default or for whom default is imminent and who do not [who] for the HAMP. A servicer should offer a HomeSaver Forbearance if qualify such borrowers have a willingness and to make reduced ability monthly of at least one-half of their contractual payments monthly payment. plan afford, should reduce borrower’s to an amount the can payments borrower but no than contractual less borrower’s percent monthly payment, time at the taxes insurance other escrow items including forbearance, forbearance is the six month implemented. During period Treasury Department implemented United States of the the Home Affordable “[T]he (HAMP) Program during housing help homeowners avoid foreclosure [Modification] goal have defaulted provide market crisis of 2008. ‘The of HAMP is to relief to borrowers who by reducing mortgage mortgage payments likely payments on their or who are to default (West levels, discharging any underlying debt.’ sustainable without [Citation.]” Bank, (West).) JPMorgan Chase N.A. 285] 09-05R, Treasury, Department United States Announcement Reissuance of Forbearance, Program, Modification Introduction of Home Affordable HomeSaver 21, 2009) Hierarchy <https://www.fanniemae.com/content/ (Apr. New Workout available (Announcement 09-05R). (as 2013) announcement/0905.pdf> of Oct. *8 of, with the borrower identify feasibility
servicer should work a alternative. The servicer more foreclosure implement, permanent prevention a the first three during should evaluate and solution identify permanent months of the forbearance and should the alternative by period implement 09-05R, 31-32 (Announcement end of the sixth month.” pp. of Oct. <https://www.fanniemae.com/content/announcement/0905.pdf> [as 31, 2013].) modification, a HAMP loan “Bank of America
Although requested offered the Forbearance instead of the HAMP apparently program [him] 17, 2009, In a letter dated Bank of America notified Lueras August program.” that the Fannie Forbearance™ for Mae HomeSaver “you qualify program” and, as a a he was for reduced for consequence, eligible mortgage payments to six months. The letter stated: “Under the HomeSaver period up Mae, Forbearance we are with Fannie a working government- program, to reduce for sponsored your mortgage 50% enterprise, payment by up up to 6 months while we work with to find a solution.” you long-term Bank of America’s offer for reduced accepted monthly payments under the HomeSaver Forbearance into a forbearance by entering program (the Forbearance an agreement which was attached as exhibit to Agreement), the First Amended The Forbearance reduced the Agreement Complaint. $1,101.16 months, monthly on Lueras’s home loan to for six payments on 2009. The Forbearance stated commencing September Agreement 16, 2009, “Deferral ended Period commenced on on Payment” September Servicer”; (1) (2) earliest of six months from “the execution date by “execution of an with Servicer for another resolution of default agreement my .”; under (3) loan Documents . . default under the terms of this my “my The Forbearance stated: “The Servicer will Agreement.” Agreement suspend sale, scheduled foreclosure I continue to meet the obligations provided under this Agreement.” Period,
The Forbearance the Deferral Agreement “During also stated: Servicer will review Loan to determine whether additional default my resolution can be offered me. At the end the Deferral Period assistance (1) either I will be to recommence scheduled required my regularly payments Servicer, and to make on to be determined by additional terms payment(s), until all due amounts owed under the Loan documents have been past paid full, full, (3) I will be to reinstate Loan in Servicer will offer my required Loan[,] (4) Servicer will offer me some other form of modify my payment foreclosure, assistance or alternative to on terms to be determined solely by , identified, Servicer . . . or if no feasible alternative can be Servicer may commence or continue foreclosure or exercise other proceedings rights remedies Servicer under the Loan Documents.” provided $1,101.16 Lueras made of 10 months. monthly payment period time, did Bank of America not work with Lueras to During identify of, much feasibility less more implement, permanent prevention alternative; Bank of America did evaluate and identify permanent *9 solution first three months of the deferral and Bank of during period; America did not a the end the sixth- by solution of permanent implement month period.
Meanwhile, to all Lueras submitted Bank of America information required determine he for a HAMP loan In October to whether modification. qualified 2010, determination, while Lueras waited for Bank of America’s he was trustee, of by served with notice of default ReconTrust. The notice $64,424.98 19, default amount October stated total arrears was as of not of 2010. It was until this notice of default was recorded that Bank America with alternatives to At that began Lueras foreclosure. explore Office, aid of the point, Attorney Lueras enlisted the California General’s to monitor and assist with the loan modification on agreed which process behalf of Lueras. 2010, from
In December Lueras a loan modification requested package 2011, In Lueras Fannie Mae. returned January completed package Mae, which of it of Fannie sent a to Bank America. The copy completed included of from over 100 documents Lueras. package pages 2011, Lueras was served with a notice trustee’s sale with February 22, date scheduled sale 2011. Bank America rescheduled February times, the sale for 2011. ultimately May sale date total four setting Bank of alleged eventually The First Amended America Complaint an Lueras for a loan modification and made determined was HAMP eligible First the loan. offer. But oral offer modify accepted that, Bank of May also in a letter dated Amended Complaint America not a HAMP modification. informed Lueras he was for loan eligible letter, an to the First which was attached as exhibit The May finan- Bank of America was Lueras’s reviewing Amended stated Complaint, “to if there available to you” cial information determine are other options what to let know days “will contact within 10 you you that Bank America The need to take.” you are available to the next you steps other options currently home is your letter also stated: “If a foreclosure sale 5May hold, you and remain in effect while and on that hold will continue pending advising While programs.” considered other foreclosure avoidance are notices, stated, letter will “you ignore Lueras not to home this review during period.” lose your America, contacted of Bank of Nancy Whitaker who immediately
told him the 2011 letter was sent “a third ‘home retention’ May party vendor” and was an error. Whitaker told Lueras that he had been in an placed in which the interest rate on his loan would be reduced for approved program him that to obtain Fannie four She advised Bank of America needed years. Mae’s approval. Lueras, 6, 2011,
In a letter it dated Bank of America informed him May determine his financial documents to whether he was reviewing eligible letter, for a HAMP loan modification. which was attached as an May exhibit to the First Amended stated Lueras would receive one of Complaint, three notification he had been for a trial possible responses: approved HAMP, (2) under notification he was not a HAMP period plan eligible for *10 modification, loan more information was needed to make a decision. Lueras contacted Bank of America about the letter. immediately He May was informed the letter sent in was error as his had “been application already sale, Bank of America. approved” by Whitaker told Lueras the trustee’s reset, which had been rescheduled for would be May pending Fannie Mae. On approval by Lueras’s of 2011 letter is this copy May handwritten note: Nancy ‘sent error’ . . . 5/18 reset . . . “per [][] [f] [f] already approved.” Mae,
During May Lueras made contacts with Fannie Bank of many America, Office, and the California General’s but Attorney response “[n]o was ever received stating why foreclosure was never Lueras proceeding.” America, received further or written—from Bank of advis- response—oral he ing whether was or was not for a loan modification He eligible program. likewise never received notice from Fannie Mae that it had denied him a loan modification. to the First Amended
According Home Affordable Complaint, Making Program guidelines the loan servicer wait require from the date of days denial of a HAMP loan modification before can so borrower foreclosing the decision. appeal 18, 2011,
On Lueras was informed May California by Attorney General’s Office that the foreclosure sale be conducted on that date. would later, Minutes Lueras’s home was sold at the foreclosure sale to H and K LLC, LLC. H and K Acquisitions, was named as a defendant Acquisitions, the First Amended but is not a to this Complaint party appeal. History
Procedural Lueras filed this lawsuit in June The 2011. asserted causes of complaint contract, (third action for breach negligence, breach of contract party and and unfair unlawful beneficiary), fraud/misrepresentation, practices, sustained, amend, The trial demurrer Bank title. court with leave quiet ReconTrust, America, and Fannie Mae.3 filed the causes of action Lueras First Amended which asserted Complaint, ReconTrust, America, Mae), Fannie (against for Bank and negligence Mae), contract Bank of and Fannie violation of breach of America (against ReconTrust), Code section Bank of America and (against Civil 2923.5 Mae), Bank and of America Fannie unfair (against fraud/misrepresentation Mae), Bank and unlawful of America Fannie practices (against quiet America, ReconTrust, Mae). Fannie trial title court (against America, ReconTrust, and sustained without leave to amend Bank of Fannie demurrer to Amended and ordered it dismissed Mae’s the First Complaint entered judg- with from timely appealed subsequently prejudice. ment of dismissal. Reply
Motion Lueras’s Brief to Strike Portions America, ReconTrust, and Mae to strike several Bank of Fannie move letter, December of Lueras’s brief to a referring portions reply on take notice. The motion is made judicial which we requested and, therefore, notice those *11 ground request judicial improper brief, 19, reference the December 2007 of Lueras’s which portions reply letter, be We grant should stricken. motion. Court, brief 8.204(a)(1)(C) rule states an appellate
California Rules of to the to a matter in the record a citation must reference “[sjupport We and of the record where matter appears.” may volume number page this rule. of a brief that do with decline to consider comply passages 182, (2012) Assn. 209 195 [147 v. U.S. Bank National (Ragland court, matters that 41].) As we consider reviewing usually only Cal.Rptr.3d (Ibid) was entered. were of the record when judgment part order, for judicial denied Lueras’s we request By separate previously notice; Lueras’s brief reply therefore decline to consider those portions we 19, Those the December 2007 letter. portions are solely by which supported 19, 4, “On 2007 full December (1) beginning are on the first paragraph page 19, letters”; (2) paragraph from fourth full received page Congress 19, the third full 2007” through “In the letter dated December beginning 20, not lose their dividends.” “investors would ending on page paragraph 3 Lueras, Mary as plaintiff to amend the demurrer without leave The trial court sustained challenged. ruling has not been that
61 Standard of Review We independently review on a demurrer to ruling determine whether the (McCall facts sufficient pleading alleges state a cause of action. v. Cal., Inc. 412, (2001) 25 Cal.4th Cal.Rptr.2d [106 PacifiCare of 1189].) 21 P.3d In so doing, must be construed and complaint liberally “[t]he states, survives a general demurrer insofar as it however facts inartfully, some (Longshore v. County Ventura disclosing to relief.” right Cal.3d P.2d Cal.Rptr. 866].) “On from a appeal an judgment action after dismissing sustaining amend, demurrer without leave to . . . give a reasonable complaint [w]e it as a interpretation, reading whole and its in their context. parts [Citation.] Further, we treat the demurrer as all material admitting facts properly but pleaded, contentions, do not assume the truth of deductions conclu- sions of law. sustained, When a demurrer we determine [Citations.] whether the states facts complaint sufficient to constitute a cause of action. And amend, when it is sustained without [Citation.] leave to we decide whether there is a reasonable possibility defect can be cured by be, amendment: if it can the trial court has abused its discretion and we reverse. (City Dinuba v. Tulare County [Citation.]” 41 Cal.4th 1168].) 161 P.3d outset,
At the and as of our review, discussion of the part standard of we address the argument that some or all of Lueras’s claims are not viable because the foreclosure sale has been rescinded and “any equity might have in the remains.” In property to the opposition demurrer to the First Amended Complaint, “the acknowledged, trustee was able to rescind and, brief, foreclosure sale” in his reply argues, rescission of the “[t]he trustee’s deed does not upon moot Mr. claims.” [sale] Lueras’[s] reviewing we are limited judgment, to the facts of the well-pleaded complaint matters subject notice. (Zelig County Los judicial *12 Angeles (2002) 1112, 27 Cal.4th 1171]; 1126 45 P.3d Cal.Rptr.2d [119 Walgreen Co. v. City and County San Francisco (2010) 185 Cal.App.4th of 424, 433 498].) The Cal.Rptr.3d First Amended [110 did not Complaint allege rescission of the foreclosure sale. No has party we take requested judicial notice of such anything establishing rescission. No has what party explained context, “rescission” means in this briefed the of a legal consequences foreclose, rescission on future to possible or informed attempts us of the status of current any foreclosure No has that proceedings. party argued of statements Lueras’s counsel constitute judicial admissions. short, in the record nothing us to consider permits the foreclosure sale to
have been rescinded or the legal of such in significance any rescission and the reviewing sufficiency the First Amended judgment Complaint. of the legal Whether a rescission the foreclosure sale occurred and signifi- court, a trial cance of rescission is better resolved in the after Lueras has and, to as and concrete necessary permitted, upon opportunity replead Further, sale, there was a “rescission” of the foreclosure evidence. assuming cannot as a of law at that Lueras cannot stage we matter this say plead cause of action.
Discussion
L Negligence Amended for of negligence, In the first cause action of First Complaint, of and breached a of care duty Bank America ReconTrust a and in his handling foreclosing of his for loan modification application failed to and Bank of America and ReconTrust argue allege, property. a care. allege, duty cannot the existence of of the Law and Relevant Negligence Allegations
A. Overview of First Complaint Amended (1) must a allege To state a cause of action negligence, plaintiff care, (2) defendant a breached plaintiff duty the defendant owed (3) damages caused the and breach duty, proximately plaintiff’s (Thomas (2012) 206 v. injuries. Stenberg Cal.App.4th [142 a of law to be 24].) Whether a of care exists is duty question Cal.Rptr.3d (Parsons (1997) Crown Co. Disposal basis. case-by-case determined on 70].) 936 P.2d Cal.4th Cal.Rptr.2d conduct the allegedly negligent We start by identifying to “the our limited analysis specific America and ReconTrust because to undertake duty claims had action plaintiff particular [defendant] Investments, (2004) 118 Inc. case.” v. Residential in the particular (Vasquez action, cause 846].) In the first him duty ReconTrust owed that Bank of America and Lueras alleged (1) “in such a way prevent handle his loan care explore “determine modification approvals, forfeiture of his property”; default”; (3) Mr. Lueras alternatives with prior and offer foreclosure and accurately responding care skill timely “exercise reasonable records”; (5) land “record proper customer requests inquiries”; *13 loan”; foreclosing”; of title to (6) “ensure chain prior service “properly that are unlawful.” (7) all foreclosure sales and “stop
63 Lueras Bank of alleged America and ReconTrust breached that of care duty in several Most ways. Bank importantly, alleged of America and ReconTrust had a to offer Lueras a loan duty modification and breached that duty by to do so. He refusing also Bank of America and ReconTrust breached their of care duty to and by “failing timely to accurately respond customer requests to inquiries,” by “failing with state consumer comply laws, loan, protection service the and use properly consistent methods to determine modification approvals,” by . . . record “failing land proper records . . . and ensure chain of title and to all prior foreclosing stop foreclosure sales that are unlawful.”4 (Oaks
Lenders and borrowers
Management
at
arm’s
operate
length.
Corporation
Court
Superior
(2006)
453,
145
466
[51
561]; Union Bank
v. Superior
Court
Cal.Rptr.3d
573,
(1995)
31 Cal.App.4th
Price v.
Wells
Fargo
653];
579
Cal.Rptr.2d
(1989)
[37
213 Cal.App.3d
735],
476
grounds in Riverisland
Cal.Rptr.
[261
on other
disapproved
Cold
Inc.
Storage,
v. Fresno-Madera Production
Credit Assn.
(2013)
55
Cal.4th
1182
316].)
rule,
P.3d
a general
[151
“[A]s
a financial
institution owes no
of care to a
duty
borrower when the institu
tion’s involvement
in the loan transaction does not exceed the
of its
scope
(Nymark v. Heart
conventional role as a mere lender of
Fed. Savings
money.”
& Loan Assn. (1991)
Cal.App.3d
Cal.Rptr.
53]
(Nymark).)
Nymark,
supra,
at
Cal.App.3d
the court held a
page
lender
owed no
of care to a
duty
borrower
an
of the
preparing
real
appraisal
for the loan
property security
when the
of the
purpose
is to
appraisal
protect
the lender
it
that the collateral
satisfying
provided
adequate security
the loan. The court reached this holding by
the six factors
considering
identified in Biakanja
v. Irving
(Biakanja)
(1958)
The Nymark court stressed the purpose was to appraisal protect lender’s interest and was not intended to assure the borrower the collateral was sound or to induce him enter into the loan transaction. (Nymark, supra, brief, appellant’s In the opening argues that Bank of delay America’s “unreasonable the loan process” modification led to the allegation foreclosure of his home. No such appears in the Complaint. First Amended *14 1099.) at to the foreseeability harm borrower—who Cal.App.3d p. remote, would know value his own the connection property—was “tenuous,” between the lender’s conduct and the suffered was there injury in a was “no moral blame because position protect [the borrower] loss,” a himself from on strong public prevented policy imposing (Id. at lender a care in the of an duty appraisal. preparation 1099-1100.) pp. Assn., Ragland U.S. National at
In v. page 209 Cal.App.4th 207, a her to miss a loan payment borrower contended the lender misadvised in order to be considered for a loan modification. The borrower lender caused her emotional distress then negligently failing severe (Id. 205.) home a sale. at modify selling p. her loan and her in of a of action for infliction cause Affirming summary adjudication negligent distress, concluded, facts of emotional a of this court panel undisputed “[t]he established there was no between relationship [the borrower] [the lender] to a the breach of which would rise giving duty permit [the borrower] (Id. recover emotional distress based on damages negligence.” p. have a owes no Sonté federal district courts in California concluded lender Chevy Chase Armstrong a of care to borrower to a loan. v. duty modify Bank, 2012, FSB 3, EJD) (RD.Cal., Oct. No. 5:11-cv-05664 2012 U.S.Dist. modification, 144125, 12, Lexis *11-* the court loan pp. explained: “[A] loan, salvage core an a lender to a troubled by money which at its is attempt This is the more than a of loan terms. renegotiation renegotiation nothing originated; only the loan was first same that occurred when activity in of actually difference that the loan is existence. Outside being already the lending it the terms of lending negotiating is undebatable money, reason, this functions of a lender. For money is one of key relationship a a loan modification as traditional cases have characterized ‘[n]umerous ” Bank, JP Chase N.A. Diunugala Morgan v. (See money lending activity.’ 3, 2013, Lexis 12cv2106-WQH-NLS) 2013 U.S.Dist. (S.D.Cal., Oct. No. circumstances, 144326, there is no servicer duty *10 special p. [“Absent 11, v. Inc. Sanguinetti CitiMortgage, (ND.Cal., loan.”]; Sept. modify 130129, 2013, *17 modifi SC) 2013 U.S.Dist. Lexis p. 12-5424 [“Loan No. negotiating lending agreement’s lending cations are part process, Servicing, Bunce Ocwen Loan v. functions.”]; of a key terms is one bank’s 17, 2013, EFB) LLC WBS CIV. 2:13-00976 (E.D.Cal., No. July Chevy Chase Armstrong *15 with [agreeing Lexis p. U.S.Dist. Bank, activities]; FSB that lender modification does not owe loan duty America, v. Bank N.A. Kennedy (N.D.Cal., No. 12-CV-952 Apr. no owes borrower YGR) Lexis *21-*22 pp. U.S.Dist. [lender v. Federal Dooms modification]; loan of care duty process approving 31, 2011, Mortgage Corp. Home Loan F 11-0352 LJO No. CV (E.D.Cal., Mar. no duty owed DLB) Lexis *28 2011 U.S.Dist. [“The [lender] *15 default, foreclosure, care to and from her loan arising property [the borrower] Bank, DeLeon Wells N.A. (N.D.Cal., Fargo v. modification Oct. attempts.”]; 22, 112941, 2010, 10-CV-01390-LHK) No. 2010 U.S.Dist. *12 p. Lexis [the defendant lender did not have a “to the loan modification duty complete process”].)
Other United District have concluded a lender owe a might States Courts borrower a of care in a negotiating an for loan duty processing application Bank, Ansanelli Morgan v. JP Chase N.A. (See (N.D.Cal., modification. Mar. 28, 2011, 32350, WHA) No. C 10-03892 2011 U.S.Dist. Lexis *21-*22 pp. that lender offered a [allegation loan modification and plaintiffs “engage[d] with them the trial was to create concerning plan” sufficient period duty Bank, NA, care]; 2012, Becker v. Wells Inc. 30, Fargo (E.D.Cal., Nov. 170729, No. PS) LKK KJN 2012 U.S.Dist. Lexis 2:10-cv-02799 *34-*35 pp. stated claim [complaint against lender for the loan negligence during modifi America, Hawaii, Crilley v. Bank cation N.A. (D. process]; Apr. Civ. No. LEK-BMK) 12-00081 U.S.Dist. Lexis *29 p. [denying motion to dismiss because “have sufficient facts to plaintiffs pled support finding Defendant went its beyond conventional role as a loan servicer by Plaintiffs to loan soliciting for a modification and apply by with engaging modification]; them for several months” Garcia v. Ocwen Loan the regarding 10, 2010, Servicing, LLC (N.D.Cal., PVT) No. C May 10-0290 2010 U.S.Dist. Lexis *7-* 11 allegations of lender’s conduct pp. [plaintiff’s handling care].) loan modification application pleaded duty After oral we invited argument, to submit parties briefs supplemental Finance, on three recent Jolley Chase Home LLC opinions, including (Jolley), Cal.App.4th which addressed 546] whether a construction lender owed a care to the borrower. In Jolley, duty and plaintiff Washington (WaMu) Mutual Bank into a entered construc- tion $2,156,000 loan which agreement by borrowed renovate a plaintiff (Id. house for use as rental at 878.) Problems property. pp. arose due to WaMu’s failure to disburse loan and WaMu properly proceeds, agreed (Id. the loan based on modify an of the construction at expansion project. 878.) disbursement, Several months after p. the last was WaMu closed Office of Thrift under the Supervision Federal placed receivership (Id. assets, Insurance at Deposit 879.) Certain of WaMu’s Corporation. p. loan, (Ibid.) including construction were the defendant bank. acquired by thereafter, loan, Soon the plaintiff ceased on the making payments claiming he had been forced default by negligence WaMu’s breaches and in the (Jolley, funding 880.) construction loan. at p. The tried to obtain a plaintiff loan modification from the defendant and ” told “there was a ‘high defendant would probability’ modify loan to could over avoid foreclosure and it was the construction loan be rolled likely assured, 880-881.) at So (Id. conventional loan. fully into amortized pp. from money family construction completed by borrowing plaintiff modification, (Id. Instead a loan the defendant offering friends. demanded of the loan in full and refused the plaintiff’s request payment (Ibid.) foreclosure sale. planned postpone action, including the defendant for various causes of sued plaintiff contract, fraud, (Jolley, supra, breach
negligence, promissory estoppel. *16 881.) granted summary at The trial court judgment, Cal.App.4th p. (Id. 877-878.) the cause the Court of reversed. at On negligence Appeal pp. action, the the rule a financial of Court of that Appeal recognized general the acts does not owe a of care to a borrower when institution duty institution 898.) (Id. role as a lender of at The Court money. within its traditional p. however, concluded, to the the rule did not the facts of general apply Appeal context, court in the cases show case. The “When considered full explained: easily not analysis—and the is not to black-and-white subject question here, rule.’ where there an ongoing decided on We conclude was ‘general contract, about of the construction loan where WaMu’s performance dispute have Insurance Corpora dispute appears bridged Deposit [Federal loan, and and Chase’s construction acquisition receivership tion]’s a as to where were made Chase specific representative representations modification, been negligence of a a cause of action for has likelihood loan (Ibid.) based on alone.” duty that cannot be resolved lack stated properly next did end its there. The court The Court of not analysis Appeal 647, for Biakanja, identified in 49 Cal.2d considered six factors a of care. duty (Jolley, supra, Cal.App.4th whether to determining impose they and concluded 899-901.) The court assessed those factors at pp. a to review owed the duty conclusion defendant plaintiff compelled 899-901.) (Id. at for modification in faith. good pp. his a loan request loan, not with a construction Jolley acknowledged dealing it court issues, the “where, loan servicing residential home loan save possible a at the loan funded.” (Jolley, supra, Cal.App.4th ends when is relationship lender contrast, between 901.) relationship in a loan the construction “By p. are working together in that the the sense ongoing, parties and borrower is time, construction throughout made a with disbursements over period We see no completion. the state of towards progress depending upon period, loan, delays or negligent a construction failure to fund reason why negligent (Ibid., fn. so, of care.” be to the same standard subject doing would loans, the court Jolley to construction its omitted.) limiting holding Despite dictum, rule is only general “no-duty to explain to great lengths, went handling in its be liable for negligence that a lender may rule” and suggest of a loan (Id. transaction within its traditional role as a lender of at money. 901-902, 19, 2011, (N.D.Cal., Ottolini v. Bank America pp. citing Aug. No. EMC) *16-*17.) C-11-0477 2011 U.S.Dist. Lexis pp. The Jolley court reviewed recent federal and state directed at legislation foreclosure, resident aiding homeowners at risk of their losing homes through that, and concluded while the new did not legislation directly apply loans, construction it “sets forth considerations that should affect the policy assessment whether a duty care was owed to at that time.” plaintiff] [the (Jolley, supra, If the new legislation supports lender, of a of care on a imposition duty construction then it would support of such a of care on imposition duty a lender of home loans.
We with disagree to the extent it Jolley a residential lender suggests owes a offer, consider, common law modification, of care to duty a loan approve or to and offer explore foreclosure alternatives. As the court Jolley recog nized, “there no on a express duty lender’s grant modification part *17 under state or federal loan modification statutes.” (Jolley, supra, Bank, 903.) In Cal.App.4th Aspiras v. Wells N.A. Fargo 948, 952, 230], 963-964 the court Cal.Rptr.3d distinguished and Jolley declined to a of impose care on an institutional duty lender in handling loan modification. The Aspiras court with the agreed federal “ held, district courts that had loan ‘offering modifications is sufficiently entwined with so as to be money lending considered within the of scope ” Bank, typical N.A., money lending activities.’ (Aspiras v. WellsFargo at p.
We conclude a terms, loan modification of loan renegotiation which falls within the of a squarely institution’s conventional scope lending role as a offer, consider, lender of A money. lender’s obligations to or approve loan modifications and to foreclosure alternatives are created explore solely documents, statutes, by loan and regulations, relevant directives and announcements from the United States of the Fannie Department Treasury, Mae, and other or governmental quasi-govemmental agencies. Biakanja factors do not of a support common law to offer imposition duty or approve loan modification. If the modification was due to the necessary borrower’s loan, harm, to inability repay borrower’s suffered from denial of a modification, loan would not be connected to the closely lender’s conduct. If the lender did not the borrower in a a need place creating for loan position modification, then no moral blame would be attached to the lender’s conduct. the First Amended Do Not State a Allegations Complaint B. the Why of Action Negligence Cause of for case, and not this Bank of America ReconTrust did Accordingly, offer, consider, a loan have a of care to or duty approve common law Likewise, modification, to of or to Lueras alternatives foreclosure. Bank offer care to loan duty America and ReconTrust did have a of handle Lueras’s and Their “in such a to forfeiture his way prevent property.” duties, in those were set forth in note regards rights, obligations trust, statutes and deed the Forbearance federal state Agreement, announcements the United States and the directives and regulations, (Cf. Countrywide and Fannie Mae. Gomes v. Treasury Department Loans, Home Inc. 192 Cal.App.4th 819] scheme, of the exhaustive nature of nonjudicial foreclosure] ‘Because [the [“ courts have refused read additional requirements California appellate ”].) into foreclosure statute.’ non-judicial did anything Bank America and ReconTrust
Lueras did not allege unable make the loan monthly payments. that made him wrongful original or and ReconTrust caused exacerbated allege Lueras did not Bank America he loan. To the servicing contrary, his default negligently initial by by caused financial hardship his to make inability payments contracting of his due to decreased . . . demand of his services the “drastically that Bank his loss of Lueras’s allegations business” and wife’s employment. duties “follow on their own through and ReconTrust owed him America laws, and to foreclo- stop with consumer protection agreements,” comply state a cause of action negligence that were unlawful fail to sure sales duties, and the are the loan documents if any, imposed because such statutes, If of America and regulations. Forbearance Agreement, *18 then Lueras’s on those agreements, failed “follow through” ReconTrust to contract, negligence. in breach of not remedy lies law, not, a matter of Thus, did and cannot as First Amended Complaint failure to Bank of America’s a for based on state claim negligence a loan modification. offer Lueras Leave to Amend Granting
C. Basis for however, to conclude, to a borrower a lender does owe duty that We for a status an about the application not make material misrepresentations time, date, of a foreclosure sale. status or about loan modification (Civ. of fact. to make negligent misrepresentations law duty imposes assertion, fact, as a Code, 1710, “deceit” include [defining subd. 2 “[t]he § true, believing no ground one has reasonable that is not who by which Small true”]; it to be v. Inc. Companies, (2003) 30 Cal.4th 172-174 Fritz context, 1255].) 65 P.3d In a Cal.Rptr.2d [132 different courts have held a bank can state a claim for depositor on a negligent based misrepresentation, (Wells bank incorrect employee’s statements about the settlement of a check. Bank, FSI, Solutions, Fargo N.A. Financial Inc. 196 Cal.App.4th Bank, 589]; 1572-1573 Holcomb v. Wells Fargo N.A. Cal.Rptr.3d (2007) 142].) 498-500 It is foreseeable that a borrower be harmed might an inaccurate or communica- untimely tion about a foreclosure sale or about the status of a loan modification and the application, connection between the and the misrepresentation injury suffered could be very close.5
Leave to amend must be if “there granted reasonable possibility that the defect can be cured by amendment. . . .” (City v. County of Dinuba Tulare, Cal.4th at The First Amended Complaint generally alleged Bank of America skill failed to exercise “reasonable care and in timely accurately responding customer Based requests inquiries.” on the record before detail, us and on the grounds we have it is explained reasonably Lueras could possible amend the First Amended Complaint to state a cause of action for negligent We therefore misrepresentation. reverse the judgment as the negligence cause of action and remand to the trial court with directions to allow to amend opportunity the First Amended a cause of Complaint plead action for negligent misrepresentation.
II. Breach of Contract In the second cause of action of the First Amended for breach Complaint, contract, asserted two theories: Bank of America breached the deed of trust by to tender him failing the difference between amount of the indebtedness and the auction of his home at the price foreclosure sale and (2) Bank of America breached the Forbearance Agreement.6
Bank of America argues the first no theory is viable longer because foreclosure sale has been rescinded. As we have explained, reviewing judgment, we are limited to the facts of the well-pleaded complaint *19 matters to (Zelig County Los Angeles, subject notice. judicial of Cal.4th at 1126.) The First p. Amended did not rescission of Complaint allege 5 Nothing say we rights, obligations, is intended to alter the by and duties created the Truth Act, Lending 15 United States Code seq. section 1601 et or other statutes. 6 ReconTrust was not named as a defendant in the breach of contract cause of action. sale, take of the foreclosure no has we notice party requested judicial rescission, and no has that statements anything establishing such party argued of counsel admissions. judicial Lueras’s constitute
Under the second Lueras Bank of America breached the theory, alleged the Forbearance ‘Deferral Period’ the Agreement “by terminating although (i) (ii) never executed the never offered another resolu- Agreement, Servicer modification, of such or deed in lieu tion default as sale pre-foreclosure foreclosure, (iii) Mr. of or found default under the program.”7 [in] essence, of the Agree- Bank America breached Forbearance some ment to offer him loan modification or other resolution by failing of his commencing would avoid foreclosure before or resuming to to home. Because the trial court sustained without leave amend demurrer action, contract of we as true the allegations the breach of cause accept to First breach of contract cause of action and exhibits attached Co., Amended (Sarale v. Gas & Electric supra, 189 Complaint. Pacific 245.) at Cal.App.4th Principles A. Relevant Contract Interpretation of us of Forbear to arguments presented require interpret parts to give ance “The of contract is to effect Agreement. goal interpretation basic at the of When a contracting. mutual intent time parties’ [Citations.] reduced intention determined from writing, contract is parties’ alone, if ‘The words of a contract are to be writing possible. [Citation.] (Founding understood in their and sense.’ ordinary popular [Citations.]” Beach Country Beach Club v. Country Newport Members the Newport Club, 505].) Civil Inc. states, its govern a contract is language Code section 1638 “[t]he and an if the is clear and does involve language explicit, interpretation, absurdity.” lawful, as make it must such an will interpretation
“A contract receive effect, reasonable, definite, if it carried into being capable operative, Code, (Civ. intention of the violating parties.” can be without done give as to effect together, whole a contract is to be taken so “The § clause if each reasonably practicable, helping interpret to every part, [(1)] Mr. another resolution of alleged: Lueras’[s] “Bank of America never offered Lueras also default; (2) requested as he he was or denied a loan modification approved Mr. Lueras if informed month; month was in arrears on 6th disclosed the amount his loan the end of the 6th ; (4) by . . forthcoming from of America . was no other form relief when setting an Default commencing resuming filing a Notice of process the foreclosure required resolution Bank America providing date the HomeSaver auction without identify and provide.”
71 (Id., other.” “To the extent of a contract meaning practicable, § contract, must be derived from the whole of the with individual reading provisions order to effect to all and to interpreted together, give provisions (Zalkind Ceradyne, v. Inc. avoid some rendering (2011) meaningless.” 194 1010, 105].) 1027 Cal.App.4th Cal.Rptr.3d [124 Whether Forbearance Agreement B. Binding Was brief, In a footnote in the Bank of America states it respondents’ “does not concede that the forbearance constituted a agreement binding contract, since Lueras admitted that Bank of America did not execute agreement.” We decline to may address made arguments perfunctorily Turner 137, 214, in a (People v. exclusively (1994) footnote. 8 Cal.4th fn. 19 762, 878 P.2d court Cal.Rptr.2d [reviewing [32 claims may disregard 521] asserted perfunctorily without and without a clear indication development are Placer Ranch v. County they contentions]; intended to be discrete Partners Placer 1336, (2001) 577]; fn. Cal.App.4th Cal.Rptr.2d [111 v. Opdyk Horse Bd. Racing Cal.App.4th California 1830-1831, 4fn. 263].) Cal.Rptr.2d [41 First, We nonetheless this on the reject argument merits for two reasons. Bank of America accepted deferral and was payments during period entitled $200 to receive a incentive fee successful to Fannie “upon reporting Mae of the initiation of a HomeSaver Forbearance and the collection of plan one 09-05R, under the payment (Announcement forbearance plan.” <https://www.fanniemae.com/content/announcement/0905.pdf> [as circumstances, Oct. 2013].) Under those Bank of America’s failure to (Barroso sign Forbearance did v. Agreement not render it unenforceable. Ocwen Loan Servicing, LLC 1012-1013 Cal.App.4th Cal.Rptr.3d failure to sign return loan modification 90] [lender’s contract not condition precedent precluding contract].) formation of a binding
Second, while a forbearance that modifies a agreement note deed of (Secrest trust is National subject the statute of frauds Security Mortgage Loan Trust 2002-2 (2008) 167 552-554 here, contrast, states: “No Modification. 275]), the Forbearance Agreement I understand that the is not a Agreement forgiveness my on payments Loan or a modification of the Loan Documents.” boldface.) The (Original statute of frauds was not raised in the demurrer First Amended Complaint. the deferral argues under Forbearance period Agreement has
ended and Bank of America continues to have an under obligation Forbearance Agreement foreclosure and offer him suspend assistance. *21 Forbearance states the deferral under which made Agreement period, note, “on reduced on the commences the date of this Agreement” payments date (1) ends on the earliest of six months from “the execution by Servicer,” (2) with another resolution “execution an Servicer for agreement default,” or under the of this my “my Agreement.” default terms Lueras, none has Since Bank of these events occurred. According the from agreement, argues America never that six months the signed date has not elapsed. execution Agree-
We the the deferral under the Forbearance argument reject period ment not ended. 2 of the Forbearance sets forth a Agreement has Section table amount for six Period Payments],” the and due dates “Deferral showing with due and the final due payment the first on payment September table, on the Forbearance sets forth March 2010. this Following Agreement the the “Deferral Period.” ending of provision regarding beginning table, Agreement Other than the six set forth in the Forbearance payments deferral 9Since the Forbearance Agree- identifies no other payments.8 period America, ment be first binding by was not to until signed 16, 2009, a due on reasonable September deferral was period payment and intended Bank of America would inference is the parties anticipated 2 of that date. section Agreement Viewing the Forbearance sign whole, we conclude of the as agreement Forbearance Agreement light to end no than six months from intended deferral later parties period of the first deferral due date period payment. Agreement C. Bank America’s Under Forbearance Obligations and Announcement 09-05R 1. The Forbearance Agreement on section of action is based breach of contract cause primarily Lueras’s (boldface “Additional Assistance” Agreement, 2.C Forbearance labeled the Deferral “[djuring 2.C states that omitted). The first sentence of section Servicer[9] Period, to determine whether additional will review Loan my 2.C of the be offered me.” Section resolution assistance can default that, the end the deferral one period, then Forbearance states Agreement to resume (1) the borrower will be required of five will things happen: make until and to additional payments scheduled making regularly payments full; (3) (2) the loan be reinstated have been will all due amounts past paid; Loan”; (4) will offer me the “Servicer offer to modify my “Servicer will eligible the HomeSaver notifying Lueras he for of America The letter from Bank stated, up to six “[y]ou eligible mortgage payment for a reduced are program Forbearance omitted, added.) (Boldface italics months.” LP, Servicing, subsidiary “the Agreement Home as BAG Loans Defined in the Forbearance your mortgage.” that services of Bank of America foreclosure, other or alternative to on terms
some form of assistance payment .”; alternative can to be determined Servicer . . “if no feasible solely by identified, be Servicer commence or continue foreclosure may proceedings or exercise other and remedies Servicer under the Loan rights provided Documents.” *22 2.C, face,
Section on America to its thus expressly required Bank “review” loan to determine Lueras’s “whether additional default resolution can assistance be offered.” The Forbearance did not Agreement expressly Bank of America to offer Lueras a loan modification or an alternative require to foreclosure.
However,
2009,
Announcement
“addi-
09-05R was issued
provide
tional
clarification and
on HAMP and the
instruction”
HomeSaver
policy
09-05R,
1,
(Announcement
Forbearance
supra,
at
boldface
program.
p.
omitted
[as
<https://www.fanniemae.com/content/annquncement/0905.pdf>
31, 2013].)
Oct.
As to the HomeSaver Forbearance
Announcement
program,
forbearance,
states:
09-05R
the six month
the servicer
“During
period
should work with the borrower to
of,
a
identify
feasibility
implement,
should
more permanent
alternative. The servicer
prevention
evaluate and
identify
a
solution
the first three months of the
permanent
during
and should
forbearance
implement
the end of the
period
alternative by
09-05R,
(Announcement
sixth month.”
supra,
added.)
at
italics
p.
We conclude these
of Announcement
must be read into
provisions
09-05R
West,
HomeSaver Forbearance
supra,
is
agreements.
Cal.App.4th
West,
instructive.
of this court addressed whether a residential
panel
borrower stated a cause of action
a residential
lender for breach of a
against
(West,
(TPP)
796-799.)
trial
under
supra,
HAMP.
at
period plan
pp.
borrower
the lender had breached
TPP
to offer her a
by failing
loan modification after she had
with all of the terms of
permanent
complied
(Ibid.)
the TPP.
The United States
of the
HAMP
Treasury,
Department
6, 2009)
directive 09-01
that if the borrower
supplemental
(Apr.
provides
conditions,
with all of the
complies
TPP’s terms and
loan modification
becomes
effective on
first
of the month
the trial
day
following
period.
Bank,
(West,
supra,
v. Wells
N.A.
797.)
(7th
at
Following Wigod
Fargo
Cir.
p.
(Wigod),
2012)
West reason, For under HomeSaver Forbearance that agreement program. While argues of America in its brief West supplemental inapplicable. differ, and the Forbearance HAMP HomeSaver program guiding principle *23 West—i.e., that a HAMP be include United TPP under must interpreted here. Announce- Treasury States of the directives—is Department applicable HAMP ment is similar to United States Treasury, 09-05R Department and instruc- directive and sets forth clarification “policy 09-01 supplemental (Announcement tion” HomeSaver Forbearance regarding program. 09-05R, 1, at boldface omitted supra, p. <https://www.fanniemae.com/ 31, 2013].) Bank of America Oct. content/announcement/0905.pdf> [as Thus, it to follow Announcement does not assert was not 09-05R. required one Agreement—and “the reasonable interpretation [Forbearance] Forbear- to make it and in with HomeSaver compliance lawful necessary [the is the obligations ance that the Forbearance includes Agreement program]” 798.) (West, 214 at Announcement supra, p. 09-05R. imposed by Cal.App.4th 09-05R 2. The “Should” Announcement Meaning of above, states lender “should work As Announcement 09-05R quoted and a the borrower” to identify permanent with implement alternative, loan identify” evaluate and a permanent “should prevention solution, the end of the six-month alternative by “should implement 09-05R, added at italics (Announcement p. deferral period. of Oct. [as <https://www.fanniemae.com/content/announcement/0905.pdf> rather America “should” is 2013].) Bank of word argues permissive and, therefore, no obligation Announcement 09-05R imposed than mandatory In his or other alternative foreclosure. to offer a loan modification on it brief, “should” must be interpreted word argues supplemental a to evaluate obligated identify permanent Bank of America “was mean solution.” start by consulting “should” in this context mean? We
What does Dictionary, Third New International to Webster’s dictionary.10 According condition”; (2) “to (1) can be used “to express “should” in function auxiliary (3) “to or obligation, necessity, expediency”; express express duty, propriety, (4) in or “could” “might” from a of view in the futurity past”; place point ex is or omitted) (archaic); (5) “to what probable (capitalization express in a or (6) unemphatic or “to a desire or request polite pected”; express 2-3.) (2002) Diet. cols. (Webster’s manner.” 3d New Internal. p. tense of defines to mean: past Black’s Law “should” Dictionary “[T]he ‘shall,’ command, ‘should’ used in present which but ordinarily implies tense, than can ‘may,’ with and more forceful synonymous or future while not (Boam v. Trident recommendation.” only strong moral convey obligation 738, 745, 177], Financial fn. 6 (1992) Corp. Cal.Rptr.2d Cal.App.4th (6th 1990) Black’s Law Dict. ed. citing p. the words Rules of Court between distinguish California Court, “must,” not,” “will,” rule (Cal. and “should.” Rules of “may,” “may “ Court, 1.5(b).) prefer Under the California Rules expresses ‘[s]hould’ “ recommendation,” while is mandatory,”
ence or a nonbinding ‘[m]ust’ “ “ (Id., a future contingency.” ‘[m]ay’ permissive,” expresses ‘[w]ilT 1.5(b)(5), (1), (4).) & has defined “should” generally rule Case law Kucera v. (See a moral or recommendation. obligation mean Lizza words and ‘should’ ‘may’ Cal.App.4th 582] [“The Trident Financial Corp., supra, .”]; Boam v. . . are ordinarily permissive 6; Cuevas v. Court (1976) 58 Superior fn. Cal.App.3d *24 406, Code, 1538.5, (b), word Pen. subd. 409 Cal.Rptr. “[t]he [130 238] [in § recommendation, sense, not as ‘should’ is used in a as a regular, persuasive mandate”].) Announcement America the word “should” in
We with Bank of agree however, the notion the word “should” is not we mandatory; reject 09-05R or and no that announcement is entirely permissive imposes responsibilities definitions Under variety whatsoever on loan servicers. obligations offered, a strong a moral or obligation “should” in the least very imposes recommendation, “should” as and can mean a or duty necessity. Interpreting on the loan servicer is in with keeping purpose some imposing obligation 09-05R, clarification Announcement which was issued to provide policy of the HomeSaver and to loan servicers for implementation instruction recommendation, The sense of moral obligation, strong Forbearance program. good “should” with word by equates preference, propriety imparted faith; is, to offer duty of America had no contractual that although 10 (Wasatch meaning. ordinary, usual may as sources of a word’s A court refer to dictionaries 262, 1111, Management Degrate (2005) Cal.Rptr.3d Property 35 Cal.4th 1121-1122 [29 v. 647].) 112 P.3d 76 foreclosure, it had a contrac- or an alternative to
Lueras a loan modification of, him identify feasibility implement, tual to work with duty alternative, faith. and to do so in good foreclosure prevention with a borrower is working imposed to act in faith in duty good Announcement 09-05R Agreement through in the Forbearance expressly contract Every faith and fair dealing. covenant good implied and fair in contract dealing on each faith duty good imposes party do such that neither may anything and enforcement party performance (Carma Developers of the contract. the other of the benefits deprive party 342, Inc. Inc. Marathon (1992) 2 Cal.4th (Cal.), Development California, Pestana, Ernest Inc. Kendall v. 710]; P.2d Cal.Rptr.2d [6 Storek, Inc. v. Storek & 837]; P.2d 40 Cal.3d Cal.Rptr. Estate, Real Inc. 100 Cal.App.4th Citicorp each 267].) contracting party not only upon ‘This covenant imposes which would render performance to refrain from doing anything duty own, to do everything act of but also the duty contract his by any impossible ” (1 he do to its accomplish purpose.’ contract that will that the presupposes Contracts, 892.) Witkin, 2005) (10th ed. p. of Cal. Law Summary § in situations where faith finds application “The covenant of good particular affecting rights a discretionary is invested with power one party (Carma Developers faith.” must be exercised in good another. Such power Inc., 2 Cal.4th at California, (Cal.), Development Inc. v. Marathon used in Announcement the word “should” as while Accordingly, identify with a borrower to discretion to work a loan servicer gives 09-05R alternative, and to evaluate of a foreclosure prevention the feasibility solution, must be exercised discretionary power a permanent implement faith. good “never Bank of America stands, the First Amended Complaint As it modification, pre- as a default such another resolution offered the Forbearance Although deed in lieu of foreclosure.” sale or offer obligation on Bank of America did not Agreement impose *25 foreclosure, Lueras we conclude or an alternative a loan modification contract in light for breach of to state a claim leave to amend should be given Agreement. of the Forbearance our of interpretation D. Damages breach of from damages to allege Lueras failed of America argues Lueras alleged First Amended Complaint, In the Agreement.
the Forbearance contract, he sustained breach of that, of America’s a result of Bank as collected Defendants $25,000, by “representing of at least damages moni[e]s the amount and on the sale plus time period forbearance’ during ‘special of Defendants’ loan as a result incurred on the late fees and charges not do the deferral during period made by breach.” The payments under the have been owed because would damages they contractual constitute Agreement. in absence of the Forbearance note and deed of trust Agree- under the Forbearance and obligations In this the rights opinion, the first time. a definitive way and described in ment are identified being theory and allege to formulate Lueras has not had opportunity We Agreement. construction of the Forbearance based on our damages as a matter of law that Lueras is unable cannot at this say stage certainly (City there is “a reasonable possibility” of contract As damages. breach allege Tulare, 865) that Lueras could Dinuba v. County 41 Cal.4th at p. supra, be leave to amend must damages, granted. amend to recoverable allege HI. 2923.5
Violation of Civil Code Section Amended In his third cause of action of the First Complaint, Civil Code section 2923.5 Bank of America and ReconTrust violated alleged of foreclosure alternatives with because “did not initiate they exploration of Default was recorded on the property placing until after a Notice [him] v. Court Mabry Superior in imminent foreclosure.” [him] 201], this court held: “Civil Code 213-214 filed, default be that a lender may section before a notice of 2923.5 requires, to ‘assess’ the borrower’s contact the borrower person by phone foreclosure.” The only financial situation and ‘explore’ options prevent is, however, a one-time afforded section 2923.5 remedy postponement Court, (Mabry Superior the foreclosure sale before it happens. 214, 225, 235.) pp. the foreclo- did not seek
The First Amended Complaint postponement The third cause of action had been conducted. sure sale sale of law state a claim for did state and cannot as a matter therefore of Civil Code section violation 2923.5.
IV. Fraud/Misrepresentation the First Amended Complaint, cause of action of In the fourth believe fraud and “led Bank of America committed Lueras alleged [him] *26 that home would not be in sold 2011 and that it wanted to May help [his] maintain home.” The (1) elements of fraud are ownership [him] [his] fact; defendant made a false as to a material representation existing past (2) made; the defendant knew the was false at the time it was representation (3) in the defendant intended making to deceive the representation, (4) the relied on the plaintiff; plaintiff justifiably representation; (Lazar Court suffered Superior plaintiff resulting damages.
Cal.4th 981].) P.2d The First Amended Bank of America made the follow- Complaint alleged false ing representations:
1. “Bank of America it wanted to maintain represented help plaintiffs of their home ownership through language Agree- [Forbearance ment which ‘Under the states HomeSaver Forbearance we are program, Mae, with Fannie to reduce working government your sponsored enterprise, while to to mortgage 50% for 6 months we work with payment up up you reduction, find to solution. This is not a but it long-term permanent payment ” will allow in to home as we work to find a solution.’ you stay your together reinforced 2. “The Agreement representation [Forbearance] of America and Fannie Mae would work with Mr. Lueras to find ‘a term long solution’ on the second where it stated the Deferral Period would page continue until ‘execution of an with Servicer for another resolution agreement default ....’” my
3. “Bank of America led to believe that defendants were going plaintiff in made the work with so could home so as stay long [him] [he] [he] [his] payments.” requested 5, 2011[,] it
4. Bank of America sent another letter May stating “[0]n would contact Mr. Lueras in 10 alternatives to foreclosure.” days explore
5. “Bank of America concealed the fact that it was not going identify term solution in order to ‘save’ Mr. home from foreclosure.” long Lueras’[s] The First Amended did not allege any misrepresentations Complaint Fannie attributed to Mae. led believe “a
The First Amended Lueras was alleged Complaint worked on” and being solution to home was long-term keep [him] [his] be 2011.” The First Amended May that his “home would not sold did the in reliance on following alleged Complaint misrepresentations:
79 on the loan. to make payments” “continued 1. Lueras burden and expense the extra on the time 2. He t[ook] “[took] a right had which [he] the information requested [in] and providing compiling time money, valuable have not spent and he “would [his] to privacy” to Bank of America prior with loan modify to efforts in attempting [his] had default, genuine opportunity not have known that would if had [he] [he] modify.” to to make Continuing detrimental reliance. not allege do allegations
These not does Agreement) under the Forbearance (reduced on the loan payments to obligation had the already reliance because detrimental constitute 74 Auerbach v. Great Western In those payments. make that a bank’s 718], asserted the plaintiffs 1172 [88 caused the a loan to modify faith negotiations engage good promise undervalued by a note secured on making to continue payments plaintiffs had a contrac- because plaintiffs that theory The court rejected property. note, the bank’s notwithstanding on to make obligation payments tual (Id. 1185-1187.) its terms. pp. to renegotiate promise an for application materials assembling and effort spent Time minimis maxim de to the damage subject is the sort of nominal loan modify (Black’s Law trifles. lex—i.e., itself with the law does not concern curat non Code, 2; law 496, 3533 col. see Civ. (9th 2009) § [“The Dict. ed. 494, (1883) 63 Cal. 497 trifles.”]; v. Hurlburt [“Consider Merrill disregards affirm the we ought cannot say in the action we the amount involved ing minimis, (1888) 75 etc.”]; v. Clement McAllister the maxim de judgment upon de under maxim recoverable 182, damages P. Cal. 184 775] [nominal [16 219, P. 220 (1887) 73 Cal. lex]; 852] v. Prosser non curat minimis Wolff Time, $10]; Harris v. damages lex minimis non curat applies de [maxim action present Cal.Rptr. 458 584] [“the Inc. 191 Cal.App.3d extreme”].) ‘de minimis’ in Complaint— the First Amended Nevertheless, attached to the exhibits letter, the May May Agreement, the Forbearance including in the the defects is a reasonable possibility there letter—demonstrate letter, May can be cured amendment. of action fraud cause would be “on sale foreclosure Lueras any pending America informed Bank of avoidance pro- for other considered being while he was hold” 5 letter him the Whitaker, May told America representative, a Bank of grams. In the modification. loan had been in error and he approved was sent his reviewing it was letter, America informed Bank of May HAMP loan for a eligible he was determine whether documents to financial 6 May America about Bank of contacted When Lueras modification. letter, sale, Whitaker told him the trustee’s which had been rescheduled for 18, 2011, reset, would May be Fannie Mae pending approval by of his loan modification. Despite in the express 5 letter that representation May no *28 foreclosure sale would and Whitaker’s oral proceed, that the representation reset, sale would be the foreclosure sale was conducted on May 18.11 above, As Bank explained of America the trustee’s sale argues conducted rescinded, and, on therefore, 2011 was May Lueras suffered no damages. rescinded, Even if we were to assume the trustee’s sale was we could not say aas matter of law that Lueras suffered no as a result damages of Bank of America’s actions.
V. Unfair and Unlawful Practices In the fifth cause of action of the First Amended Complaint, alleged Bank of America in engaged business in violation “deceptive practices” California’s unfair (UCL), law competition Business and Professions Code section 17200 et He Bank of seq. alleged America engaged deceptive “with practices loan respect mortgage foreclosure of residential servicing, and related properties matters” in violation of the UCL.
Bank of America unlawful, Lueras failed to it argues allege engaged any unfair, or fraudulent Bank of America practices. also trial court argues was correct in Lueras lacked concluding to sue under Business and standing Professions Code (section 17204). section 17204
A. The UCL unlawful,
The UCL civil permits recovery unfair or fraudu “any unfair, lent business act or untrue or practice deceptive, misleading “ Code, (Bus. . . . .” advertising 17200.) & Prof. ‘Because Business and § Professions Code section 17200 is written in the it establishes disjunctive, unlawful, three varieties of unfair or are competition—acts which or practices 11 America, Rossberg v. N.A. (2013) Cal.App.4th Cal.Rptr.3d 219 1481 is [162 525] distinguishable change and does not our conclusion that Lueras should have leave to amend the exhibits, including fraud cause of action. The First Amended Complaint, the attached modification, that Bank misrepresented only of America that it had approved loan but pending also that the postponed. say foreclosure sale had been We cannot as a matter of law damages misrepresentations. Lueras suffered no as a result of such Unlike the situation in “ ” America, N.A., here, Rossberg, (Rossberg v. Bank of right more than ‘an abstract to amend’ supra, at p. 1504) has been shown. ” Communications,
unfair, (Cel-Tech Angeles Inc. v. Los or fraudulent. . . .’ Cellular Co. Telephone 20 Cal.4th Cal.Rptr.2d 527].) P2d “unfair to include unlawful act or
By defining competition” practice, the UCL violations of other laws to be treated as permits independently Communications, (Cel-Tech Inc. v. Los actionable as unfair competition. “ Co., Cellular Angeles Telephone supra, 20 Cal.4th at “unfair” ‘[A]n business occurs when that an “offends established practice practice public immoral, unethical, or when the policy practice oppressive, unscrupulous (Smith to consumers.” substantially injurious [Citation.]’ [Citation.]” State Farm Mutual Automobile Ins. Co. “ 399].) An unfair business also means ‘the practice public policy *29 constitutional, which is a to action must be “tethered” to predicate specific ” Clinic v. Court statutory (2003) or regulatory provisions.’ (Scripps Superior 917, 108 101].) 940 A fraudulent under Cal.App.4th Cal.Rptr.2d practice [134 the UCL a “require[s] only showing that members of are to public likely be deceived” and “can be shown even without of actual allegations deception, Co., v. American Honda Motor reasonable reliance and damage.” (Daugherty Inc. (2006) 144 118].) 838 Cal.App.4th Cal.Rptr.3d [51 B. Standing unlawful, unfair,
Before Lueras’s of or addressing allegation specific fraudulent we practices, address the threshold issue whether Lueras has to assert a UCL claim. To standing have to sue under the standing UCL, a must private he or she “has suffered in fact and plaintiff allege injury has lost money Corp. Kwikset Court (§ 17204.) or Superior property.” (2011) (Kwikset), 51 Cal.4th 246 P.3d Cal.Rptr.3d 877] the California Court held to Supreme that of satisfy standing requirement section a “(1) must establish a loss or of plaintiff deprivation money fact, i.e., economic or sufficient injury, (2) as property qualify injury of, i.e., caused show that that economic by, was the result the unfair injury business or false that is the of the claim.” A practice advertising gravamen UCL claim will survive a demurrer based on if the can standing plaintiff “ factual of from the plead ‘general allegations resulting defendant’s injury ” (Kwikset, conduct.’ supra, 327.) at p.
The Kwikset court held a can the economic plaintiff satisfy injury prong in “innumerable but that standing requirement listed four ways” injuries (1) would under section 17204: surrendered more or qualify plaintiff have; (2) less in a transaction than the acquired otherwise would plaintiff interest; (3) suffered the diminishment of a or future plaintiff present property was had a plaintiff or which the deprived money property plaintiff claim; transaction, or into a cognizable enter plaintiff required that would been costing unnecessary. otherwise have money property, (Kwikset, 323.) 51 Cal.4th at supra, p. America Lueras cannot the threshold argues allege standing because he had been in default for before and his years
requirement suing under the Forbearance was less than his monthly payment Agreement under the note deed of trust.12 The First Amended monthly payment allege failed to lost as Complaint any out-of-pocket money result of Bank of acts of for America’s alleged deceptive practices, except costs incurred in materials for his assembling application preparing minimis, have be are loan modification. We deemed such costs to de and they sufficient as in fact under section 17204. to qualify injury But the that Lueras’s home was sold at a foreclosure sale allegation sufficient to the economic satisfy injury standing is prong requirement Bank, (See of section 17204. Jenkins v. Chase N.A. JPMorgan (Jenkins) [allegation impend 912] Sale foreclosure and loss home satisfies economic ing injury requirement].) of a home a foreclosure sale through certainly deprivation property Kwikset, cognizable (See which a has a claim. Cal.4th plaintiff must also the “caused of the section 17204 by” prong satisfy *30 economic ‘as a show standing requirement—i.e., “plaintiff’s injury [occurred] 326.) (Kwikset, of’ the . . . .” at The First supra, result unfair competition p. “ ” (ibid.) did ‘causal connection’ allege any Amended such Complaint unlawful, unfair, Bank of or fraudulent conduct allegedly between America’s Lueras’s economic injury. to to try is whether Lueras should be leave amend to granted The question there is a reasonable the “caused We believe satisfy by” prong. possibility As we Lueras can cure the defect in First Amended Complaint. that action, cause of Bank of America informed addressing fraud explained he “on hold” while was being Lueras foreclosure sale would be any pending of Bank of foreclosure avoidance Whitaker considered for other programs. and he been told letter was sent in error had May America him the to Lueras told the foreclosure sale was for a loan modification. was approved Mae’s his loan modification. rescheduled Fannie approval be pending cause of action to can amend his UCL allegations suggest Those Lueras Lueras that Bank of America rescinded Bank of America also asserts that “conceded above, Complaint did not the First Amended May explained sale.” As we 2011 foreclosure sale, judicial party requested and no has we take notice allege the foreclosure rescission of are reviewing judgment, we limited to establishing In anything such rescission. (Zelig County Los judicial notice. complaint subject and matters to well-pleaded facts of 1126.) Angeles, supra, p. at 27 Cal.4th Bank of America’s caused him to lose his home
allege misrepresentations addition, In able to Bank of through foreclosure. be might allege America did not work with him in faith to evaluate and good try identify solution, he as a of which lost his implement permanent consequence home foreclosure. through Jenkins, 519-521, at pages plaintiff alleged unlawful, unfair,
the defendants’ and fraudulent caused her business practices home to be to foreclosure. The Court of held the subject Appeal plaintiff failed to admitted the “caused because she in her satisfy by” prong complaint loan, that she defaulted on her of sale clause in thereby triggering power (Id. the deed of trust that made her home to foreclosure. at subject 522-523.) The court “As home pp. explained: plaintiff]’s subject [the loan, nonjudicial foreclosure because of default on her which plaintiff]’s [the acts, occurred before Defendants’ alleged wrongful cannot plaintiff] [the assert (i.e., foreclosure of her home her economic impending Thus, injury) was caused Defendants’ actions. even if we assume wrongful third plaintiff]’s cause of action facts alleges indicating Defendants’ [the actions violated at one of least the UCL’s three unfair competition prongs unfair, (unlawful, fraudulent), cannot show plaintiff’s complaint] [the of the alleged violations have a causal link to her economic (Id. injury.” loan,
This case is similar to Jenkins in that Lueras’s default on the not any America, conduct on the part triggered foreclosure proceedings. Jenkins is distinguishable, however, because, case, in this be might able to allege Bank of America’s about his alleged misrepresentations sale, loan modification and the status of the foreclosure or Bank of America’s failure to work with him in faith to good identify try implement solution, permanent caused him to lose his home a foreclosure sale. through *31 C. Whether Lueras Alleged Unlawful, Unfair, or Fraudulent Practices UCL Violations
1. Allegations of Since, conclude, we Lueras should be leave to amend to given allege we address he standing, whether has in the First Amended alleged Complaint unlawful, unfair, or fraudulent on the of Bank of America. practice part Bank of America violated the in UCL these nine ways:
1. to offer a ‘resolution’ of the default after “Refusing to leading [Lueras] believe that the ‘HomeSaver’ would lead to another that agreement agreement would (which amount) never . . . .” Arrearages they disclosed [c]ure 84 30 writ- days receiving at foreclosure within
2. the home “Selling Affordable Home Making in violation ten denial of modification Guidelines.” Mae and Bank of when Fannie to the foreclosure process
3. “Failing stop loan in May Mr. to modify America agreed permanently Lueras[’s] dual tracking.” federal that regulations prohibit violation of to with Mr. prior foreclosure alternatives 4. to “Failing explore and the Code of Default in violation §2923.5 the Notice filing Civ[il] .” . . . guidelines HomeSaver plan such using phrases in the forbearance plan deceitful “Inserting language
5. leading óf default’ my and ‘resolution term ‘long as ‘HomeSaver’ solution!’] to be offered some that were they going . Lueras to believe and . . public home if they signed that could save their they solution so of permanent type and made all of the information requested the agreement, supplied on time.” payments that solution so or identify make a determination permanent
6. “Failing month of the third by could save their like . . . Lueras home[s] the public in breach above the HomeSaver Guidelines quoted in violation of plan Code 1639a.” set States by section] standards industry [United HAMP . . . Lueras did qualify 7. “Falsely representing modification in when, for a HAMP Lueras did qualify in fact. . . modification Code 1639a.” States by section] standards set industry breach of [United owed, refusing yet than the amount the home for less off “Auctioning 8. [(net NPV in a have resulted positive which would reduce the principal States Code standards set value)] by in breach of industry [United present 1639a.” section] 2011[13] of America letter in the May
9. “Representing information, we will reviewing your we have finished Lueras that ‘once Mr. are available other know what options to let days you within 10 contact you within 10 the home selling take’ then need to the next steps you you other Lueras and providing Mr. contacting without foreclosure auction days Code States section] set by standards industry [United in breach options 1639a.” Violations UCL Allegations
2. Sufficiency unfair, unlawful, fraudulent 4, 5, 6, do not constitute and 8 Nos. *32 did not 1, 5, require Agreement the Forbearance As to Nos. practices. as an exhibit. include this letter Complaint does not Amended The First Bank America to Lueras a loan or to offer modification other alternative nothing foreclosure. We find the Forbearance or the Agreement HomeSaver Forbearance would a borrower into believing “they which mislead program, were to be some solution” going by signing offered type merely permanent agreement deferral Bank of America’s making payments. period 2009 letter informed Lueras the bank was with Fannie Mae August working to reduce his to “for months.” mortgage by percent to 6 payment up up that, The Forbearance at the end deferral Agreement explicitly stated of the could of America resume foreclosure. The period, Agree- Forbearance stated, ment understand explicitly “I that the is not a Agreement forgiveness of payments on Loan or a my modification Loan Documents.” (Boldface omitted.) in the Nothing Forbearance a Agreement would mislead borrower into Bank of believing America would determine or always identify “save” the solution to home. permanent borrower’s
Although Forbearance did not Agreement Bank of America require modification, Lueras a offer loan we above concluded that the Forbearance did on Bank of Agreement America the act in faith to impose duty good evaluate try identify solution the first three months permanent during forbearance and to an identified period, implement alternative end of the sixth In light month. of this interpretation of Forbearance be Agreement, Lueras should his given leave to amend UCL cause of action. As to No. 4—failure explore foreclosure alternatives—we concluded that above to state failed a cause of action for Code violation of Civil section 2923.5. No. for 8—selling Lueras’s home less than the amount owed—does not UCL state a claim because Lueras in the breach contract cause of action Bank of sold America his home for more than the amount of the indebtedness and failed to tender him the difference. breach of contract were into the cause of allegations UCL incorporated action. 2, 3, 7, which, true,
Nos. do and 9 facts if would constitute allege fraudulent and/or unfair It or is fraudulent unfair for a lender to practices. with foreclosure after -he proceed a borrower or she has been informing modification, for a loan the borrower he or she will be approved telling about contacted other and the home will borrower’s not be foreclosed options meantime, on in the as in the 5 letter. It is or unfair May fraudulent represented case, a lender to for status or this date of foreclosure sale. In misrepresent letter, Lueras alleged he contacted Bank of about the America May modification, informed he had been a loan and was already approved sale, 18, had told trustee’s which been rescheduled for would be May Fannie pending reset Mae of the loan modification. approval by *33 86 (known
Bank of America that recent as “California argues legislation Homeowner Bill of that of “dual Rights”) tracking” prohibits practice effective to be retroactively.14 argues in 2011 is not applied Bank of the California Homeowner Bill of demonstrates that America’s Rights conduct, time, unfair not unlawful at the “was and/or fraudulent.” We though Bank of alleged do not address either because Lueras that America argument to fraudulent of the conduct amounted engaged practices, independent Bill California Homeowner of Rights.
VI.
Quiet Title In the sixth cause of action the First Amended Complaint, title to the claims defendants sought quiet property alleged, “[t]he or without and such defendants have no interest right are whatever any right not, however, title in the A borrower Subject Property.” may quiet against debt on outstanding secured lender without first which paying (Miller Provost (1994) or 26 deed of trust is based. mortgage cannot, 1703, 1707 of real without [“mortgagor property [33 288] v. Bocci debt, (1974) mortgagee”]; Aguilar his his title against paying quiet 475, title 477 cannot Cal.Rptr. quiet Cal.App.3d 91] [borrower remains debt].) The title until the debt is without cloud on discharging 617, (Burns 196].) v. Hiatt (1906) Cal. 620-622 P. paid. debt. He of the validity underlying
Lueras does not challenge $385,000 in he a deed of trust his home for 2007 and executed he refinanced Instead, of the is not he tender indebtedness argues to secure the loan. the Forbearance title under making because quiet payments required debt, would not have a tender of the tender constituted Agreement sale. to halt or set aside a foreclosure been required the monthly As the first argument, making payments required would not constitute full Agreement payment under Forbearance 11, 2012, known Home July approved legislation as “California On the Governor (2011-2012 Sess.); (Sen. Reg. Bill No. 278 Assem. Rights” Bill of Bill No. 900 owner Sess.)). (Governor message Assem. Bill No. 278 (2011-2012 signing Brown’s on Reg. 11, Sess.) Rights (2011-2012 July prohibits, Homeowner Bill of Reg. California foreclosures, occur when a servicer continues among things, other “dual track” which modification; reviewing application for a loan proceedings while a homeowner’s modification; and negotiating a loan single contact homeowners who are point requires action on a loan given the lender can take to be to the borrower before expands required notice 2012, (Governor message; Stats. ch. signing see foreclosure. Brown’s pursue modification 87, 1-25; 1-25.) Rights Bill of became ch. The California Homeowner §§ Stats. §§ Const., IV, (Cal. (c)(1) of new art. subd. date January § [effective on 2013. effective enactment].) following days after is Jan. statutes
outstanding loan. As to the second full tender argument, of the indebtedness must be made to set aside foreclosure sale based on in the irregularities Citibank, (Lona v. N.A. foreclosure procedure. 202 Cal.App.4th 103-104 622].) Full Cal.Rptr.3d tender of the indebtedness is not (Id. if the required borrower attacks the of the validity debt. at underlying 112-113.) pp. sale, Lueras is not seeking set aside the foreclosure nor is he challenging validity debt. underlying brief, In his supplemental Home Countrywide Lueras argues Pfeifer Loans, Inc. his supports 673] contention that tender of the indebtedness was to maintain the unnecessary Pfeifer, the Court of title action. In quiet held that the Appeal borrowers stated a claim for wrongful relief, foreclosure and declaratory injunctive based on allegations the lenders failed to with certain face-to-face comply interview requirements imposed by Federal Housing Administration deed of trust before an conducting otherwise valid nonjudicial {Id. foreclosure. at p. The face-to-face interview and other im servicing requirements posed by federal regulations were conditions to acceleration of the precedent (Ibid.) debt and foreclosure. The Court of concluded the borrowers Appeal were not to tender the required indebtedness before seeking to enjoin foreclosure sale because “to permit foreclosure when the lender has not with the complied requirements may have prevented need for a any foreclosure would defeat a salient regulations.” (Id. of the . . . purpose addition, 1280.) In tender of the indebtedness is required only set aside a sale, and is completed not in an action to required a foreclosure prevent sale. (Ibid) Loans, v. Countrywide Home Inc. and the other tender cases are Pfeifer inapplicable here because Lueras has not sued to set aside or prevent action, sale. In the sixth cause of he title to the sought quiet which property, he cannot do without paying indebtedness. outstanding
Disposition The judgment in favor of Fannie Mae is affirmed. The as to the judgment causes of action for violation of Civil Code section 2923.5 title is quiet affirmed. In all other respects, judgment in favor of Bank of America and ReconTrust is reversed and the matter is remanded to the trial court with directions to grant leave to file an amended Lueras shall complaint. recover costs incurred on appeal.
Ikola, L, concurred. THOMPSON, J., Concurring Dissenting. I concurin those portions the majority which conclude opinion the trial court sustained the correctly did state any amended because Lueras complaint, demurrers to first I from those portions viable cause of action. dissent respectfully denied leave to incorrectly conclude the trial court which majority opinion amend, he can Lueras did not demonstrate a reasonable possibility because Therefore, abuse its the trial court did not state viable cause of action. be and the should affirmed all judgment respects. discretion
INTRODUCTION *35 and views the disagreement my
There are three core areas of between in the by my colleagues majority opinion. views expressed First, what the themselves do refuses to acknowledge parties the majority wrongful no foreclosure which this upon not is dispute—there before the trustee’s sale was rescinded action can be based. Lueras admitted recorded, and Lueras he never alleged deprived the trustee’s deed was considered home. The trial court properly or his possession ownership the to do same on the demurrers and we are required these facts when ruling of the The rulings. of those reviewing consequence when propriety a death action to wrongful to allowing refusal to do so is akin majority’s victim did die. when proceed a lender
Second, rule that residential long-standing recognizing despite borrower, stretches create to a majority does not owe care any duty a of care to lender does owe duty and a residential an concludes exception, for a loan of an application about status not make misrepresentations time, is date, of a foreclosure sale. There or status modification or about Furthermore, fails to whether analyze the majority no such exception. sufficient he can facts possibility plead demonstrated reasonable or pleaded of action cause of a negligent misrepresentation the elements to establish such facts. did not and cannot plead Bank of America. Lueras against of action is of contract cause Third, concedes the breach the majority Mae Announcement deficient, of Fannie asserts the provisions but hopelessly agree- “read the forbearance 09-05R) must be into” (Announcement 09-05R cites no case which has The majority those deficiencies. ment to circumvent right has contractual or found a borrower private this followed approach with based alleged noncompliance money damages upon a lender for sue Moreover, this violates basic principles 09-05R. approach Announcement lending. into California residential and uncertainty contract law injects
FACTS A. Factual Allegations Lueras’s summarizes some of the majority factual and fails to note allegations,
many glaring factual omissions in the verified first amended complaint. All of allegations factual I find omissions material are out set below. Of necessity there some but repetition, only keep everything proper context. owned it property as his (Property) occupied primary times,
residence at all relevant the date through on which the including first amended was filed. Lueras did not he complaint ever was allege deprived ownership possession Property.
In March Lueras refinanced the with a Property 30-year adjustable $385,000 (Loan) rate loan originated by Gateway Business Bank (Gateway). Gateway, potentially was not named as a defendant indispensable party, the first amended and is complaint *36 not a to this party appeal.
The Loan was aby evidenced promissory (Note) note and secured aby (Deed deed of trust Trust) of which encumbered the The Deed Property. of Trust was to attached the amended first complaint. did
Lueras not allege Gateway retained or sold the Note subsequently the Thus, beneficial interest under the Deed of Trust. the of identity the current lender under the Note and Deed Trust Loan Docu- (collectively ments) is uncertain. (as
Bank of America successor to Countrywide Home Loans Servicing) was the servicer the Loan. Lueras did not Bank of America was a allege the to party Loan Documents. did
Lueras not allege Fannie Mae the was Loan Documents. party Moreover, did Lueras not the allege Loan was owned or by insured Fannie Mae. $1,965.10.
Lueras’s Loan regular monthly on the was Lueras payment has not made a full monthly the since regular payment on Loan December 2008.
In August more eight than months after Lueras making stopped Loan, regular monthly on Bank of America payments offered him a (Forbearance forbearance agreement and Lueras Agreement) accepted. Mae not a the Forbearance Agreement. Fannie party to make reduced Agreement monthly The required Forbearance $1,101.16 during the deferral period. on the Loan in amount payments to the these reduced agreed monthly payments Bank of America apply full on Loan. delinquent regular monthly payments “The will any Servicer Agreement suspend Forbearance provides, sale, I continue meet the monthly foreclosure provided scheduled [reduced under this obligations Agreement.” payment] [Forbearance] terminates, Agreement “If this Agreement The Forbearance also provides, however, immediately action . . . be may then any pending . . and no new notice . at which it suspended, resumed from point action, all to such notices rights to continue the foreclosure will be necessary . . . .” being hereby waived Iif Agreement, termination of this
Lueras agreed, “Upon [Forbearance] cure or otherwise with Servicer to have not entered into another agreement Loan in my Document or reinstated under Loan my resolve default [sic] full, all and remedies provided Servicer will have rights . . . .” Loan Documents that the Servicer is “I further understand and agree acknowledged, Documents or Loan bound to make modification any obligated Loan default under the resolution my other alternative
provide Documents.” *37 the deferral on the Loan six-month during made
Lueras reduced payments and beginning September under the Forbearance Agreement period for four more months.” “beyond and ending in March 2010. July on the Loan since has made any payment Lueras not making Lueras stopped than three months after more October after he stopped 22 months and more than payments, reduced monthly (ReconTrust) re- Company ReconTrust monthly payments, making regular (the Default) on Lueras. Notice of of Default and served Notice corded Loan under the of his rights Lueras The of Default advised Notice Loan to avoid and reinstate the default to cure the Documents payment the right pay he exercised his did not allege Lueras acceleration and sale. default, Loan. amount, and the the reinstate cure delinquent Lueras, Notice Default also advised the fact that “Notwithstanding foreclosure, sale, is in offer your property you may your for property sale is concluded conclusion of foreclosure.” provided prior Lueras did not he tried to sell the to the trustee’s sale. allege Property prior
In February more than six after months Lueras stopped making reduced and more monthly than months after Lueras payments, stopped making regular monthly ReconTrust recorded and a Notice payments, served Sale). (Notice of Trustee’s Sale 22, 2011,
The trustee’s was sale set for and was originally February “3/2/11, 4/1/11, three times subsequently postponed 5/4/11.” 5, 2011, On May Bank of America sent a letter he stating did not modification under Home Affordable qualify Program Modification (HAMP). letter, after
Immediately contacted receiving May Nancy “[Lueras] Whitaker at Bank of America who advised that that letter was plaintiffs [sz'c] sent a third ‘home retention’ an party vendor was error. Ms. Whitaker further advised that were into a plaintiffs that was put program already . .. needed approved just Fannie Mae’s approval.” [and s]he 6, 2011, On May Bank of America sent Lueras another letter stating his financial were documents reviewed to being determine if he for a qualified HAMP modification. letter,
Immediately after receiving Lueras contacted Bank of May America and was “informed this letter was sent in error as had plaintiffs [sic] already ‘been the bank. Whitaker approved’ by Nancy of Bank of America advised reset, scheduled Trustee’s Sale of would May be pending of FANNIE MAE.” approval did but not implied allege there was an “actual sale” on May
2011. Lueras also did he allege deprived ownership possession as a result of that sale. Property
Lueras did allege he retained ownership possession Property all relevant times to and the date the first up including amended complaint was filed.
B. Lueras’s Factual Admissions Lueras admitted the repeatedly trustee’s sale was rescinded before trustee’s deed was recorded. These in admissions were made his written court, briefs and oral both in the trial and all arguments court in this as described below. Lueras to the demurrers to original complaint, his opposition to rescind” the “after this lawsuit was filed the trustee was able
admitted trustee’s sale. counsel for original
At the on the demurrers hearing complaint, rescinded, admitted, so we “I the court that the sale was Lueras should inform ” at are now status. pre-foreclosure com- the demurrers to the first amended in his Similarly, opposition admitted, lawsuit was filed the trustee was “after this again plaint, rescind” the sale. able to trustee’s
And, to the first amended complaint, at the on demurrers hearing admitted, the tentative the court noted in properly for Lueras “as counsel a in this case.” there was rescission ruling, admitted, filed, “after this lawsuit
In his brief on opening appeal, sale; “the court focused on able to rescind” the trustee’s trustee was [trial] ensued”; “as the and litigation the sale that was rescinded after [trial noted, been rescinded.” the sale had c]ourt
Likewise, and argued, his brief on Lueras admitted appeal, “[t]he reply claims”; Mr. Lueras’ deed does not moot rescission of the trustee’s upon [sic] filed, the trustee’s rescinded BAÑA “after lawsuit [Bank America] . . .” sale”; was not recorded . trustee’s deed sale deed “the upon upon court, there is counsel for Lueras admitted this argument oral Finally, recorded, sale, deed was never the trustee’s no record the trustee’s Property. Lueras still has title and possession
DISCUSSION Burden on Appeal and Lueras’s A. Standard Review sustained, states complaint we determine whether is “When demurrer it And when of action. cause facts sufficient constitute [Citation.] amend, there is a reasonable we decide whether leave to sustained without be, trial if can amendment: it defect can be cured by that the possibility reverse; not, been no abuse if there has and we court has abused its discretion such reason- burden of proving and we affirm. of discretion [Citations.] (Blank v. Kirwan on the plaintiff. [Citation.]” is squarely able possibility 58].) 703 P.2d Cal.Rptr. Cal.3d “ manner in what “must show on plaintiff that burden satisfy appeal, ‘To the legal will change how that amendment he can amend his complaint
93 effect of his . . The pleading.” clearly . must plaintiff [Citation.] set forth the specifically law” “applicable legal substantive [citation] amendment, i.e., basis elements of cause of action and authority Further, for it. must set plaintiff allegations forth factual that sufficiently ” (Rossberg v. state all elements of that cause of action. required [Citations.]’ America, N.A. 1481, (2013) 219 Cal.App.4th 1491 Cal.Rptr.3d [162 525].)
No commands authority or even these do suggests pleading requirements unless the apply has been more than two bites at the plaintiff given apple. We are to affirm the there if is on which the required ruling any ground Bank, (Scott JPMorgan Chase demurrer could have been sustained. v. properly N.A. 743, (2013) 214 Also, 752 394].) leave to Cal.Rptr.3d [154 (Newell amend should not be where an granted amendment would be futile. v. State Farm General Ins. Co. 1094, (2004) 118 Cal.App.4th 1100 [13 axiomatic, 343].) Cal.Rptr.3d It is “The law neither does nor idle requires Code, (Civ. acts.” 3532.) § Allegations, Factual Judicial Notice and Factual Admissions
B. We the factual accept allegations the verified first amended as complaint “ (Serrano true. ‘We also consider matters which bemay noticed.’ judicially v. Priest 584, 1241].)” (Blank 5 (1971) Cal.3d 487 P.2d Cal.Rptr. [96 Kirwan, 318.) end, Cal.3d at (Evid. To take p. that I notice judicial Code, (d)) subd. the trial § court’s final minute on order ruling demurrers relied the fact expressly upon admits “plaintiff Opposi- tion that the foreclosure sale was rescinded.”
We also take into account briefs and which are arguments, “reliable indications law, on the party’s position facts as well as the and a reviewing court use may statements in as them admissions against party. Witkin, (9 Cal. (5th 2008) Procedure ed. 386.) [Citations.]” Appeal, p. § Likewise, express concession or assertion in brief treated frequently “[a]n an as admission of a legal factual controlling in the point, disposition (Id., the case. § [Citations.]”
One court Witkin held an citing admission in the brief “the opening concession,” which, aof equivalent taken with the failure together allege (Federer element, v. County of necessary “controls the disposition case.” Sacramento (1983) 187].) Another Cal.App.3d Cal.Rptr. [190 court also citing Witkin relied on concessions made counsel plaintiff’s during argument oral to show there was no basis for a cause of action. (DeRose v. Carswell 1011, 1019, fn. 3 Cal.App.3d Cal.Rptr. 368], Ramona v. Superior statute on superseded by another as stated in ground Court 107, 112-113, 57 Cal.App.4th 766].) fn. 6 *40 94
In Brandwein Butler (2013) v. 218 1485 Cal.App.4th CaI.Rptr.3d [161 728] amend, and a demurrer without leave to affirmed an order sustaining the court in the complaint, relied on the factual and omissions allegations expressly (Id. and briefs. in the trial court in appellant’s with factual admissions together v. Housing Construction Co. Fassberg 19, alia, 1515, fn. inter citing, at p. 720, Los City Angeles Authority (2007) 725 152 Cal.App.4th [60 of action binding judicial counsel same is statement Cal.Rptr.3d by [oral 375] Hot Mineral Spa Co. v. Supplies Distributing Imperial Electric & admission] in brief [stipulations 134 (1981) 122 Cal.App.3d Cal.Rptr. 644] [175 admissions].) binding judicial constitute & Co. v. I. Pont de Nemours E. Du Setlijf
Similarly, sustaining affirmed an order the court Cal.Rptr.2d 763] Cal.App.4th stated, in opposi- amend and “Plaintiff’s papers a demurrer without leave to may on and we use these are indications of his the facts tion reliable position (Id. Likewise, 1536.) at as him. p. statements admissions against [Citation.]” 439], in Rodas v. the Spiegel shall, declared, of admissions in “We take notice judicial also may, court (Id. Code, (Evid. (d).)” subd. at to demurrer. § plaintiff’s opposition 518.) p. sum, to a to Lueras’s admissions eye we turn blind are not permitted These the trustee’s deed was recorded. before
trustee’s sale was rescinded he was allegations with his verified affirmative admissions are consistent These admissions or of the Property. possession never deprived ownership demurrers, on the ruling court when considered trial by were properly do the same when We are Lueras. required any objection without rulings. those reviewing propriety Negligent Misrepresentation Negligence
C. not any duty lender does owe a residential rule that long-standing I in the majority opinion. well and summarized to a borrower is settled care no a lender owes such residential why that all of the reasons add only would servicer, even though force a greater even to a borrower with apply duty of lenders the duties to differentiate between careful always courts are Bank, FSB Federal (Somera IndyMac (E.D.Cal., duties of servicers. *5.) 2:09-cv-01947-FCD-DAD) p. 2010 WL No. Mar. claim, recognizes the majority rule to the no-duty negligence Applying consider, offer, or a approve duty did not owe Bank of America alternatives, or to modification, and offer foreclosure to explore loan I These agree. foreclosure. so as to way prevent the Loan in other handle the conventional role of scope well within all core functions are rule no-duty lender and the applies. residential rule, recognizing the stretches to create an
Despite no-duty majority and concludes Bank of “does owe a exception, duty America to borrower not make material about the status an for a misrepresentations application date, time, loan modification or about or status of a foreclosure sale.” ante, (Maj. I There is no No opn., disagree. duty such exception. *41 for v. owed negligence. (Aspiras or purposes negligent misrepresentation Bank, Wells N.A. 948, Fargo (2013) 219 Cal.App.4th 963-964 [162 230].) Cal.Rptr.3d
“As is true of negligence, for responsibility negligent misrepresentation rests the existence a . upon . . owed a to the legal duty by defendant The injured person. determination whether a exists is duty [Citation.] v. a (Eddy primarily question (1988) law. Sharp 199 Cal.App.3d [Citation.]” 211].) 864 test Cal.Rptr. for whether a determining financial [245 “[T]he ‘ institution owes a duty of care to a borrower-client the “involves balancing of various factors ....”’ (Nymark Heart Fed. & Loan v. Savings [Citations.]” Assn. (1991) 231 53].) 1098 Cal.App.3d Cal.Rptr. [283
Without the Nymark, balancing various factors discussed in majority discovers a which duty has never before been there But is no recognized. reasoned basis for distinction making any between these residential lender- borrower communications and other residential lender-borrower communica- tions. Communications about a status of modification application trustee’s sale are also core well within the functions conven- scope Hence, of a tional role residential lender. rule no-duty equally applies and negligence negligent claims in this misrepresentation situation. Furthermore, the rights and duties and of lenders borrowers these regarding law, communications are set forth the Loan Documents and applicable including (15 federal Truth in Act Lending U.S.C. 1601 et and seq.) § Code, (Civ. California statutory nonjudicial statutes 2924 §§ 2924k.). through It is inconsistent with these and exhaustive comprehensive statutory schemes to common law negligent incorporate misrepresentation Loans, Gomes v. Inc. (Cf. claims in this context. Countrywide Home (2011) Residential 819]; Capital 192 1154 Cal.App.4th Cal.Rptr.3d [121 Cal-Western Reconveyance (2003) Corp. 824—829 Cal.App.4th 162].) Cal.Rptr.2d aside the
Leaving duty Lueras did not leave to question, request plead had, negligent cause of action. if he also misrepresentation But even “ did demonstrate reasonable can “(1) he possibility plead misrep fact, of a or existing (2) resentation material without past reasonable ground true, believing (3) it to be with intent to induce another’s reliance on (4) fact reliance on the misrepresented, justifiable misrepresentation, ’ FSI, Bank, (Wells N.A. v. Financial Fargo resulting damage.” [Citation.]” Solutions, 589].) Inc. 196 by both oral and written alleged misrepresentations about the status of the loan modification application America trustee’s sale. in early all made Whitaker oral were misrepresentations First, told Lueras the as follows. Whitaker may be summarized
May Second, she told him the loan had been in error. 5 and letters sent May May America, subject Bank of had been approved by modification application reset, Third, be the trustee’s sale would Mae she told him Fannie approval. Mae Fannie again pending approval. error, *42 5 and 6 letters had been sent the statements the
Regarding May untrue or that and these statements were allege allege did not cannot Lueras Obviously, for them be true. believing Whitaker had no reasonable ground on truth of these his reliance alleged case is upon his entire predicated statements. the loan modifica- America had approved the statement Bank of
Regarding did not again allege Mae Lueras Fannie subject approval, tion application, believing no reasonable ground untrue or Whitaker had this statement was conditional, he that Besides, allege is did not this it to be true. statement was condition satisfied. reset, did be while Lueras sale would the statement the trustee’s
Regarding had untrue, the trustee’s sale he Whitaker said allege this did not allege was this be reset. So statement he she said it would alleged been reset. Instead event, a about a past a not about future misrepresentation really prediction or fact. existing he relied on facts any showing justifiably also did not allege
Lueras allege Lueras did not reset. In sale would be particular, statement trustee’s (on made was after this statement from doing anything he did or refrained 18, 2011). All of (on occurred 2011) May before the trustee’s sale May statement was before this took well or inactions place actions alleged made. statements, allege and cannot allege Lueras did not all these
Regarding so Lueras sale was rescinded the trustee’s damage. Again resulting of the or possession Property. of ownership never deprived 5 and in the May written alleged misrepresentations Regarding of those the contents letters, he relied on reasonably cannot allege letters, and at the same time he relied on the allege statements those letters had been He sent error. cannot have it both But even if he ways. could, did again Lueras and cannot he suffered allege allege any resulting because the sale damage, trustee’s was rescinded. conclusion, Lueras did not or demonstrate a reasonable plead possibility
he can sufficient facts plead to establish the elements of negligent misrepre- sentation cause of action against of America based communica- upon tions concerning status loan modification or the application Hence, trustee’s sale. there is no basis for Lueras’s leave to granting allege negligent cause of action. misrepresentation
D. Breach Contract Bank of America breached the Forbearance Agreement by terminating the deferral to offer him a modifica- period, by failing loan tion or some other resolution before commencing resuming But process. Lueras did not sufficient facts to establish the plead elements this claim.
1. Breach Lueras did not plead any facts Bank of showing America breached the Forbearance Agreement “by the ‘Deferral Period’ . terminating . . .” Actually, *43 did not facts Bank plead any of America terminated the showing deferral at all. period On this I the point, agree with majority opinion. Examining the first amended as a whole reveals the complaint parties intended the deferral to terminate and it did period terminate its own terms by no later than March 2010.
Lueras also did not facts plead showing Bank of America breached the Forbearance Agreement to him by failing offer a loan modification or some other resolution before or the commencing resuming The process. Forbearance did Agreement not Bank of simply require America do or abstain from Thus, doing any the things Bank of complained of. America did not breach the Forbearance failing to offer Lueras Agreement by a loan or modification some other resolution before commencing or resuming the foreclosure process. conclusion, the
Recognizing this inevitability asserts majority “provisions Announcement 09-05R must-be read into” the [Fannie Mae] ante, Forbearance to circumvent Agreement these deficiencies. (Maj. opn., 73.) The has not cited which majority any case has followed this approach or found has borrower private right contractual to sue lender for money with Announcement 09-05R. damages alleged noncompliance based upon America, (Cf. Bank N.A. Roberts Cal.App.4th and like HAMP con- consistently programs Cal.Rptr.3d 345] [HAMP borrowers].) of action for to create no or causes rights private strued private easily why. One can see Lueras, with, is as
To a contract between Agreement Forbearance begin America, Documents, as the under the Loan the borrower of the lender under the Loan Documents. agent servicer and the ostensible did and Lueras not Fannie Mae is not a to the Forbearance party Agreement short, it appears or insured Fannie Mae. In by the Loan is owned allege Forbearance with no Agreement Fannie Mae is a complete stranger vis-á-vis the Loan. contractual or thereunder rights obligations Next, Agreement Announcement into the Forbearance 09-05R reading Announce- basic of contract formation interpretation. violates principles of the Forbearance offer Agreement acceptance. ment was part 09-05R fact, Announcement Forbearance there no reference to 09-05R is which Agreement there no Forbearance ambiguity is Agreement, this extrinsic evidence for interpretation. or even resort requires permits Agree- terms of Forbearance express so contradicts some Doing ment, meaningless. other terms express and renders from this radical departure
The cited only majority support case Bank, Chase N.A. JPMorgan is Westv. law established West is legally and factually inapposite. 285]. HAMP, under at issue in West (TPP) a trial The period plan contract Indeed, Forbear- here not. at issue the Forbearance Agreement while under to a TPP in form or function bears no resemblance ance Agreement A TPP different which serve purposes. are different creatures They HAMP. solution. an identified and agreed upon long-term tests the viability long-term a viable time to see if merely provides Forbearance Agreement *44 and upon. can be identified agreed solution effect, a addition, the borrower tendered the TPP in West was still in and sale. before the trustee’s days two just
timely monthly payment reduced Bank, N.A., 790.) at p. 214 Cal.App.4th (West supra, Chase JPMorgan v. 2010, 16, and Here, than March ended no later Forbearance Agreement the 1, 2010, more on July monthly payments reduced making Lueras stopped sale. the trustee’s than months before nine and fair faith covenant good the the suggests implied
Lastly, majority Not so. these deficiencies. “[A]n be used circumvent also dealing may
99 covenant faith and fair cannot contradict the implied good dealing express a (Barroso terms of (2012) contract.” v. Loan Servicing, Ocwen LLC 208 90].) 1014 the cov- Cal.App.4th Cal.Rptr.3d Similarly, implied [146 contract, enant be cannot used to create additional not obligations present and be cannot used to the vary (21st terms an contract. unambiguous Ins. Co. v. Century Court 47 Cal.4th Superior Cal.Rptr.3d P.3d 972].) 2. Damages
Lueras did not facts he plead any showing was Bank of damaged America’s termination of the deferral or failure offer him period loan modification or other some resolution before commencing resuming the Loan, process. always the and obligated repay the reduced made and monthly payments allegedly during after deferral period, together with late fees charges resulting from his payment default, Documents, were owed always under the Loan separate apart from the Forbearance Agreement.
3. Leave to Amend Lueras did not Lastly, demonstrate a reasonable he can possibility plead sufficient facts to establish the elements of a breach contract cause of against action Bank of America. It is sufficient for Lueras to assert “an right (Rakestraw abstract to amend.” v. Physicians’ Service California Cal.App.4th 354].) he must set forth the Again, claim, legal authority claim, for the the elements of the specific factual allegations that would establish each of those elements. v. (Rossberg America, 1491.) at Cal.App.4th Lueras made no p. Therefore, to meet this burden. attempt the demurrers to breach contract cause of action based the Forbearance were upon Agreement prop- sustained erly without leave to amend. On this point majority opinion’s reliance upon liberal policy amendments to regarding justify contrary result (Id., at 1503.) misplaced. p.
E. Fraud majority states elements of a fraud cause of action. are the They same as the of a elements of action negligent misrepresentation cause above, discussed with exception knowledge (Aspiras element. Bank, N.A., WellsFargo supra, 219 fn. Since the same, elements are essentially all of the deficiencies in the negligent claim discussed misrepresentation above are also deficiencies in fraud *45 claim. There are additional as deficiencies well.
100
Lueras based the Forbearance America alleged, upon Agreement, led to was to work with him he could in his him believe it so going stay (i.e., he but reduced) home as as made the long requested monthly payments, was to identify instead Bank of America concealed the fact it not going Yet, did of the Forbearance any solution. Lueras not long-term allege part And, Agreement false. in the Forbearance Agreement again, nothing was once or identify Bank of America to offer Lueras a loan modification required another resolution. contact
Lueras the 5 letter stated Bank of America would alleged May also alternatives, was Lueras in foreclosure but this statement days 10 explore false, had the trustee’s sale occurred before the 10 days elapsed. because relied the he told the 5 letter May Then Lueras he on fact was again, alleged error, letter had sent in so reliance on the contents alleged been any Plus, more, he it both his ways. was unreasonable. Once cannot have in ended in more July reliance the reduced making monthly payments 5 was than 10 months before the letter sent. May reasons, to the with the the demurrers agree majority For all of these I hand, On other I do fraud cause were sustained. the of action properly First Amended Com- “the exhibits attached the agree majority, with the the in fraud . there a reasonable defects the possibility . . demonstrate plaint ante, 79.) The at (Maj. p. of action can be cured amendment.” opn., cause letters. May exhibits at issue are the 6 But as Lueras.1 logic this relies on same faulty
On point, majority 6 letters unreasonable on was any alleged May patently reliance had been those letters representation he relied on oral because pled sent error. rate, damages” not and cannot allege any at Lueras did “specific
And v. Bank (Rossberg suffered, was rescinded. he because the trustee’s sale America, 1499.) at the demurrers Consequently, p. to amend. sustained without leave of action were properly fraud cause Section 17200 Code F. Business Professions statement, that Lueras’s allegation “the I with the Finally, disagree majority injury the economic satisfy sale is sufficient at home sold letter, May Bank of America informed “In the majority states: example, For May 5 . him Whitaker .. told be ‘on hold’.... any pending foreclosure sale would no May 5 letter that express representation Despite was sent in error .... letter (Maj. May on 18.” . sale was conducted . . the foreclosure proceed, foreclosure sale would ante, opn., *46 ante, prong standing of section 17204.” requirement (Maj. opn., And, There is no such first amended allegation complaint. event, the exact any true. Lueras has not suffered opposite any legally Rather, harm. he cognizable has an incredible windfall. Lueras experienced has avoided foreclosure on the even he not made Property though has Hence, on the payment Loan since July 2010. Lueras has no standing demurrers to the unfair claim were competition sustained without properly leave to amend.
CONCLUSION The trial court correctly sustained the demurrers to the first amended and did not abuse its complaint discretion leave amend. by denying The contrary decision majority from represents settled law and departure creates which uncertainty may California residential disrupt lending. judgment should be affirmed.