Jordan v. Wells Fargo Bank, N.A.

NONA JORDAN, Plaintiff and Appellant, v. WELLS FARGO BANK, N.A. et al., Defendants and Respondents.

B270966

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

March 6, 2017

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. LC101325)

APPEAL from a judgment of the Superior Court of Los Angeles County. Rick S. Brown, Judge. Affirmed.

Stephen R. Golden for Plaintiff and Appellant.

Severson & Werson, Kerry W. Franich and Jan T. Chilton for Defendants and Respondents.

* * * * * * After taking out a loan for a rental property, defaulting on the loan, obtaining a loan modification, and defaulting again, the borrower submitted five further loan modification applications, all of which were rejected by the lender. The borrower then sued the lender and its loan servicer, seeking compensatory, treble, and punitive damages. The trial court granted summary judgment and dismissed the borrower's case. The borrower appeals. We conclude the trial court's ruling was correct and affirm.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

A. The original loan and deed of trust

In November 2006, Nona Jordan (plaintiff) borrowed $604,000 from Sea Breeze Financial Services, Inc. (Sea Breeze). The loan was secured by a deed of trust on one of her rental properties, located at 5547-5551 Hazeltine Avenue in Sherman Oaks, California (the Property). The deed of trust listed Sea Breeze as the lender and the Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary. Paragraph 22 of the deed of trust provided, among other things, that the "Lender shall give notice to Borrower prior to acceleration following Borrower's breach" and that "notice shall," among other things, "inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale." Defendant Wells Fargo Bank, N.A. (Wells Fargo), while doing business as America's Servicing Company, acted as the loan's servicer.

B. Initial default and loan modification

In March 2009, Wells Fargo informed plaintiff that she was $13,959.83 behind in her payments and that her loan was in default. That letter informed plaintiff that "[i]f foreclosure is initiated, you will have the right to bring a court action . . . to assert the non-existence of a default or any other defense you may have to acceleration and sale." A few months later, in June 2009, MERS assigned its beneficial interest in the deed of trust to defendant HSBC Bank USA, N.A. (HSBC).¹ A few months after that, in late 2009, plaintiff entered into a loan modification agreement; the agreement itself was signed by plaintiff and Wells Fargo, which was designated as the "Lender."

C. Subsequent defaults and further loan modification applications

By December 2011, plaintiff was $8,441.47 behind in her payments and again in default. The letter notifying of the default informed her that "[i]f foreclosure is initiated, you have the right to argue that you did keep your promises and agreements under the Mortgage Note and Mortgage, and to present any other defenses that you may have," but did not mention doing so in "a court action."

Plaintiff made a second request to modify her loan. In February 2012, Wells Fargo sent her a letter specifying the documents it needed from her in order to consider her modification application. A few weeks later, Wells Fargo denied her application because it had "not been able to reach [her] to discuss [her] situation."

In May 2012, plaintiff made a third request to modify her loan. Over the phone and in a letter, Wells Fargo informedplaintiff of the documents she would need to submit as part of her modification application. In July 2012, Wells Fargo denied this application because she "did not provide . . . all of the information needed within the required time frame."

In October 2012, Wells Fargo informed plaintiff that her loan was still in default and that the amount of arrears had risen to $46,775.09. Like the December 2011 letter, the October 2012 letter informed plaintiff that "[i]f foreclosure is initiated, you have the right to argue that you did keep your promises and agreements under the Mortgage Note and Mortgage, and to present any other defenses that you may have," but did not mention doing so in "a court action."

In December 2012, HSBC substituted Cal-Western Reconveyance Corporation as the deed of trust's new trustee, and Cal-Western filed a notice of default on the Property.

In February 2013, plaintiff made a fourth request to modify her loan. In April 2013, Wells Fargo denied the application because plaintiff did "not meet the requirements" of the loan modification program because Wells Fargo was "unable to create an affordable payment" "[b]ased on [her] documented monthly income."

In the latter part of 2013, plaintiff made a fifth request to modify her loan. In November 2013, Wells Fargo sent her a letter specifying the documents it would need to consider this modification application. From November 2013 through January 2014, Wells Fargo also spoke on the telephone with a person representing plaintiff regarding which documents were needed. Also in November 2013, Cal-Western recorded a notice of trustee's sale. No sale ever occurred. In January 2014, Wells Fargo denied plaintiff's fifth loan modification applicationbecause she "did not provide . . . all the information needed within the required time frame."

In May 2014, plaintiff made a sixth request to modify her loan. In a June 2014 letter, Wells Fargo informed her which documents it would need to evaluate her application. In September 2014, Wells Fargo denied this application because it had "not yet received a complete application."

As of October 27, 2015, plaintiff was $196,174.12 in arrears on the loan and owed a total of $646,247.93. No foreclosure has occurred.

II. Procedural Background

In the operative third amended complaint, plaintiff has sued HSBC and Wells Fargo (collectively, defendants) for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, and (3) negligence in considering her loan applications.²

Defendants moved for summary judgment. Plaintiff opposed the motion. The trial court granted the motion. However, there is no written order, and a transcript of the hearing on the summary judgment motion was not prepared.

After the trial court entered judgment, plaintiff filed this timely appeal.

DISCUSSION

Plaintiff argues that the trial court erred in granting summary judgment on each of her claims.

Summary judgment is appropriate when a party can "show that there is no triable issue as to any material fact and that [it] is entitled to a judgment as a matter of law." (Code Civ. Proc.,§ 437c, subd. (c).) The party moving for summary judgment must show either that the opposing party cannot establish "[o]ne or more of the elements of [her] cause of action" or by showing a valid affirmative defense. (Id., subds. (o) & (p)(2).) If the moving party (usually the defendant) makes this initial showing, the burden shifts to the other party (usually the plaintiff) to present evidence showing that a triable issue of material fact exists. (Rodriguez v. E.M.E., Inc. (2016) 246 Cal.App.4th 1027, 1032.) "A triable issue of material fact exists if, and only if, the evidence reasonably permits the trier of fact to find the contested fact in favor of the plaintiff in accordance with the applicable standard of proof." (Rondon v. Hennessy Industries, Inc. (2016) 247 Cal.App.4th 1367, 1374.) W review a trial court's grant of summary judgment de novo. (Salas v. Sierra Chemical Co. (2014) 59 Cal.4th 407, 415.)

I. Breach of Contract Claim

To prove a breach of contract, a plaintiff must show (1) the existence of a contract, (2) her own performance under the contract or an excuse for her nonperformance, (3) breach of that contract by the defendant, and (4) resulting damages. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Plaintiff's breach of contract claim is premised on the argument that defendants did not comply with the requirement set forth in Paragraph 22 of the deed of trust because (1) the two letters Wells Fargo sent to her in December 2011, and October 2012, told her she could contest whether she was in default and could raise other defenses, but did not mention she could do so in "a court action"; and (2) plaintiff does "not recall" ever receivingthe March 2009 letter that did tell her she could contest her default and assert other defenses in "a court action."³

The undisputed evidence indicates that plaintiff cannot establish two elements of her breach of contract claim.

She cannot establish a breach of Paragraph 22 because Wells Fargo informed her, in the March 2009 letter, that she could contest her default and press other defenses in "a court action." This discharged defendants' obligation under Paragraph 22, which entitled plaintiff to "notice" upon her default—not notice every time she subsequently defaulted. The effect of this notice is not negated by plaintiff's assertion that she does "not recall" receiving the March 2009 letter. The presumption that letters dropped in the mail reach their destination applies in a summary judgment motion (Evid. Code, § 641; Colleen M. v. Fertility & Surgical Associates of Thousand Oaks (2005) 132 Cal.App.4th 1466, 1479-1480), and plaintiff's lack of recollection "is insufficient to create a triable issue of fact" (Joseph E. Di Loreto, Inc. v. O'Neill (1991) 1 Cal.App.4th 149, 160).

Plaintiff also cannot establish that defendants' failure to inform her of her right to challenge the...