Blankenchip et al v. CitiMortgage, Inc. et al
Filing
83
MEMORANDUM AND ORDER re 72 Defendant CitiMortgage's Motion for Summary Judgment signed by Senior Judge William B. Shubb on 8/26/2016: IT IS ORDERED that 72 Citi's Motion for Summary Judgment be, and the same hereby is, GRANTED on plaintiffs' intentional infliction of emotional distress claim and promissory estoppel claim as to any alleged oral promises, and DENIED in all other respects. (Kirksey Smith, K)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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RANDY BLANKENCHIP and SUSAN
BLANKENCHIP,
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Plaintiffs,
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CIV. NO. 2:14-02309 WBS AC
MEMORANDUM AND ORDER RE: MOTION
FOR SUMMARY JUDGMENT
v.
CITIMORTGAGE, INC.; CALWESTERN RECONVEYANCE, LLC;
and DOES 1-50, inclusive,
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Defendants.
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Plaintiffs Randy and Susan Blankenchip initiated this
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suit against defendants CitiMortgage, Inc. (“Citi”) and Cal-
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Western Reconveyance, LLC, alleging that defendants breached a
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loan modification agreement and wrongfully foreclosed on their
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home.
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judgment pursuant to Federal Rule of Civil Procedure 56.
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No. 72.)
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I.
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Presently before the court is Citi’s motion for summary
(Docket
Factual and Procedural History
Plaintiffs’ allegations concern a residential mortgage
loan they took out for their home in Suisun City, California.
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1
(Blankenchip Decl. ¶ 6 (Docket No. 74-2); Cohoon Decl. Exs. 1-4
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(Docket No. 72-3).)
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that decreased from 6.625% to 3% on June 1, 2011.
4
¶ 13, Exs. 1, 4.)
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struggled to maintain their monthly loan payments.
6
Decl. ¶¶ 10-11.)
7
(Cohoon Decl. ¶ 12.)
8
2011 and Citi initiated foreclosure proceedings.
9
Ex. 6.)
The loan had an adjustable interest rate
(Cohoon Decl.
Due to a reduction in their income, plaintiffs
(Blankenchip
In 2009, plaintiffs defaulted on their loan.
A notice of default was issued on May 3,
(Id. ¶¶ 16-17,
10
In April 2011, in response to plaintiffs’ request for a
11
loan modification, Citi sent plaintiffs a letter inviting them to
12
apply for a loan modification through the Home Affordable
13
Modification Program (“HAMP”) by submitting forms and income
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documentation.
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A.)
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check, the HAMP Hardship Affidavit, and a signed IRS Form 4506T.
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(Id. ¶¶ 15-16.)
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notifying them that they were approved to enter into a trial
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period plan (“TPP”) under HAMP.
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explained that in order to accept this offer, plaintiffs must
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make their first monthly trial period payment.
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explained that to qualify for a permanent modification,
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plaintiffs must make three trial period payments of $2,758.08 “in
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a timely manner.”
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2011, the second by August 1, 2011, and the third by September 1,
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2011.
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are timely made and you have submitted all the required
28
documents, your mortgage will be permanently modified.”
(Cohoon Decl. ¶ 14; Blankenchip Decl. ¶ 12, Ex.
Plaintiffs submitted bank statements, pay stubs, a bonus
(Id.)
On June 13, 2011, Citi sent plaintiffs a letter
(Id.)
(Id. ¶ 20, Ex. G.)
The letter
(Id.)
It further
The first payment was due by July 1,
The TPP stated, “After all trial period payments
2
(Id.)
1
Despite providing payment deadlines on the first of the
2
month, the same letter also provided that “[i]f each payment is
3
not received by CitiMortgage, Inc. in the month in which it is
4
due, this offer will end and your loan will not be modified under
5
the Making Home Affordable Program.”
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regarding plaintiffs’ August TPP payment similarly stated: “If
7
you fail to make a Trial Payment by the last day of the month in
8
which it is due, you will be considered to have failed the trial
9
period and will not be eligible for a HAMP modification.”
10
11
(Id.)
A reminder letter
(Cohoon Decl. Ex. 13.)
The additional information attached to the offer letter
12
stated that the “terms of your trial period plan below are
13
effective on the day you make your first trial period payment,
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provided you have paid it on or before 7/1/11.”
15
Decl. Ex. G.)
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foreclosure sale during the trial period, provided you are
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complying with the terms of the trial plan.”
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foreclosure action or proceeding that has been suspended may be
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resumed if you are notified in writing that you failed to comply
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with the terms of the trial period plan or do not qualify for a
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permanent modification.”
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(Blankenchip
The terms stated that Citi would “not proceed to
(Id.)
“Any pending
(Id.)
Plaintiffs paid their trial period payments on July 15,
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2011, August 11, 2011, and September 15, 2011.
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33; Cohoon Decl. ¶¶ 29, 37, 41, Ex. 11 at 29-30.)
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could not pay their TPP payments by the first of the month
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because the exact days of the month on which Mr. Blankenchip gets
27
paid as the Managing Partner of a Texas Roadhouse restaurant vary
28
3
(Id. ¶¶ 23, 27,
Plaintiffs
1
and he gets his bonus in the middle of the month.
2
Decl. ¶¶ 7-8, 21.)
3
(Blankenchip
On August 5, 2011, Citi issued and recorded a notice of
4
trustee’s sale.
(Cohoon Decl. ¶ 33, Ex. 14.)
Citi postponed the
5
sale several times while plaintiffs were under review for both
6
the HAMP modification and a traditional modification.
7
¶¶ 35-36, Ex. 3, Servicing Notes at 48, 53-56, 60-62.)
8
September 12, 2011, Citi sent plaintiffs a letter stating that,
9
“[b]ecause you have not kept the terms of the Forbearance Plan
(Id.
On
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with us, we have cancelled it.”
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Blankenchip states that he called their assigned Homeowner
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Support Specialist, Mahagony Burris, after receiving this letter
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and she “told me not to worry about the September 12, 2011
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letter, that CITI had received all three of my TPP payments and
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that she would be working with other departments at CITI to get
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the final modification documents together and sent out to me.”
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(Id. ¶ 37.)
18
(Blankenchip Decl. Ex. M.)
Mr.
On October 10, 2011, Citi contends it determined that
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plaintiffs were ineligible for a permanent HAMP modification
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because the interest rate on plaintiffs’ loan would have
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increased from 3% to 3.75% if their loan was modified.
22
Decl. ¶ 43, Ex. 3, Servicing Notes at 48.)
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that plaintiffs did not qualify for a traditional loan
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modification because of insufficient income.
25
Servicing Notes at 42.)
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of plaintiffs for a loan modification and requested updated
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paystubs and an updated Workable Solutions Packet from plaintiffs
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on October 14, 2011.
(Cohoon
Citi also determined
(Id. ¶ 44, Ex. 3,
Citi nonetheless initiated a re-review
(Id. ¶¶ 45-47, Ex. 16.)
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On November 3,
1
2011, Citi sent plaintiffs another letter stating that the
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“deadline for you to return the required documentation for the
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Home Affordable Modification Act has been extended” and
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requesting that plaintiffs submit their documents by December 5,
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2011.
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“at risk and will be removed from the program If [sic] we do not
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receive your documents by the deadline.”
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contends that this letter was issued and sent by Citi’s vendor in
9
error.
10
(Id. Ex. 17.)
The letter explained that plaintiffs were
(Id.)
Citi now
(Id. ¶ 49; Citi’s Mot. for Summ. J. (“Citi’s Mot.”) at 5
n.1 (Docket No. 72).)
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On November 10, 2011, before the documents deadline had
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passed, Citi conducted a nonjudicial foreclosure sale of
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plaintiffs’ home.
(Cohoon Decl. Ex. 18.)
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house that month.
(Blankenchip Decl. ¶¶ 54-55.)
Plaintiffs vacated the
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In their First Amended Complaint (“FAC”), plaintiffs
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allege seven causes of action against defendants: (1) wrongful
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foreclosure; (2) breach of contract; (3) promissory estoppel; (4)
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breach of the implied covenant of good faith and fair dealing;
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(5) fraud; (6) unlawful business practices in violation of
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California Business Professions Code section 17200; and (7)
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intentional infliction of emotional distress.
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11).)
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between Ms. Blankenchip and Citi dismissing with prejudice her
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claim for intentional infliction of emotional distress and
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agreeing that Citi will not be permitted to conduct any mental
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examination of Ms. Blankenchip.
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(FAC (Docket No.
On February 19, 2016, this court approved a stipulation
(Docket No. 49.)
Presently before the court is Citi’s motion for summary
judgment on each of plaintiffs’ claims.
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II.
Evidentiary Objections
2
On a motion for summary judgment, “[a] party may object
3
that the material cited to support or dispute a fact cannot be
4
presented in a form that would be admissible in evidence.”
5
R. Civ. P. 56(c)(2).
6
used to support or oppose a motion must be made on personal
7
knowledge, set out facts that would be admissible in evidence,
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and show that the affiant or declarant is competent to testify on
9
the matters stated.”
10
Fed.
Further, “[a]n affidavit or declaration
Id. R. 56(c)(4).
Citi raises forty-four evidentiary objections to
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plaintiffs’ evidence submitted in opposition to Citi’s motion for
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summary judgment.
13
Citi objects to portions of Mr. Blankenchip’s declaration on the
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grounds of hearsay, lack of personal knowledge, and the best
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evidence rule; to plaintiffs’ expert witness report and the
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expert’s deposition on the grounds that her opinion does not
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qualify as admissible expert opinion and constitutes extrinsic
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evidence that cannot modify the written TPP agreement under the
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parol evidence rule; and to the HAMP and Freddie Mac guidelines
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on the grounds that they are also extrinsic evidence that cannot
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modify the written TPP agreement under the parol evidence rule.
22
(Id.)
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(Citi’s Evidentiary Objs. (Docket No. 78).)
As this court explained at length in Burch v. Regents
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of the University of California, 433 F. Supp. 2d 1110 (E.D. Cal.
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2006), “[a]s a practical matter, the court finds this entire
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exercise of considering evidentiary objections on a motion for
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summary judgment to be futile and counter-productive.”
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1122.
Id. at
Not only does deciding excessive numbers of objections
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begin “to defeat the objectives of modern summary judgment
2
practice--namely, promoting judicial efficiency and avoiding
3
costly litigation,” it is often difficult to address even
4
seemingly appropriate objections based on hearsay or failure to
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authenticate “away from the dynamics of a trial,” where “the
6
opposing party will have an opportunity to present the evidence
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in an alternative and admissible form” or a question can be
8
rephrased if an objection is sustained.
9
Id.
Further, with respect to hearsay objections to evidence
10
submitted by the non-moving party, “the court cannot ignore the
11
fact that a non-movant in a summary judgment setting is not
12
attempting to prove its case, but instead seeks only to
13
demonstrate that a question of fact remains for trial.”
14
1121.
15
presented” by a non-moving party “are particularly misguided.”
16
Id. at 1119.
17
judgment, a party does not necessarily have to produce evidence
18
in a form that would be admissible at trial, as long as the party
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satisfies the requirements of Federal Rules of Civil Procedure
20
56.’”
21
1036-37 (9th Cir. 2003)).
22
presented in an admissible form in the context of a motion for
23
summary judgment, but it may be presented in an admissible form
24
at trial, a court may still consider that evidence.”
25
Id. at
“Objections to the form in which the evidence is
“As the Ninth Circuit has held, ‘to survive summary
Id. at 1120 (citing Fraser v. Goodale, 342 F.3d 1032,
“In other words, when evidence is not
Id.
Citi filed an unruly number of evidentiary objections
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with little explanation of the basis for each and, as the non-
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moving party, plaintiffs are arguably entitled to more leniency.
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Further, the record suggests that plaintiffs will be capable of
7
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presenting their evidence in an admissible form at trial.
2
example, Citi objects to several paragraphs of Mr. Blankenchip’s
3
declaration pursuant to the best evidence rule, arguing that his
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description is inadmissible to prove the contents of letters sent
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by Citi.
6
18, 22, 25, 27-28, 32-33.)
7
plaintiffs’ exhibits that they would be able to prove the
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contents with copies of the letters themselves and this
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evidentiary issue would be easily resolved at trial.
For
(See Citi’s Evidentiary Objs. ¶¶ 1-4, 6, 9, 11-12, 15,
It is clear, however, from
Similarly,
10
Citi objects to the portions of Mr. Blankenship’s declaration in
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which he describes statements made to him by Citi representatives
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as hearsay.
13
26, 29, 31, 34-35.)
14
admissible as admissions by a party-opponent under Federal Rule
15
of Evidence 801(d)(2).
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suggests plaintiffs would be able to cure any possible hearsay
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prior to trial by, for example, relying on Citi’s servicing notes
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where Citi representatives recorded what was communicated to
19
plaintiffs.
20
III. Discussion
21
22
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25
26
27
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(See id. ¶¶ 5, 8, 10, 13-14, 16, 17, 19-21, 23-24,
First, these statements would likely be
Second, as with the letters, the record
The court therefore overrules Citi’s objections.1
Summary judgment is proper “if the movant shows that
there is no genuine dispute as to any material fact and the
1
Citi also contends plaintiffs should not be permitted
to present any oral argument and that the court should deem
Citi’s material facts set forth in its separate statement as
undisputed because plaintiffs’ opposition was untimely. (Citi’s
Reply at 1 n.1 (Docket No. 77).) Plaintiffs were required to
file their opposition by midnight on August 8, 2016 and they
instead filed at 5:48 a.m. on August 9, 2016. The court will not
decide this motion for summary judgment based on such a
procedural technicality.
8
1
movant is entitled to judgment as a matter of law.”
2
P. 56(a).
3
of the suit, and a genuine issue is one that could permit a
4
reasonable jury to enter a verdict in the non-moving party’s
5
favor.
6
(1986).
7
burden of establishing the absence of a genuine issue of material
8
fact and can satisfy this burden by presenting evidence that
9
negates an essential element of the non-moving party’s case.
Fed. R. Civ.
A material fact is one that could affect the outcome
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
The party moving for summary judgment bears the initial
10
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
11
Alternatively, the moving party can demonstrate that the non-
12
moving party cannot produce evidence to support an essential
13
element upon which it will bear the burden of proof at trial.
14
Id.
15
Once the moving party meets its initial burden, the
16
burden shifts to the non-moving party to “designate ‘specific
17
facts showing that there is a genuine issue for trial.’”
18
324 (quoting then-Fed. R. Civ. P. 56(e)).
19
the non-moving party must “do more than simply show that there is
20
some metaphysical doubt as to the material facts.”
21
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
22
“The mere existence of a scintilla of evidence . . . will be
23
insufficient; there must be evidence on which the jury could
24
reasonably find for the [non-moving party].”
25
at 252.
Id. at
To carry this burden,
Matsushita
Anderson, 477 U.S.
26
In deciding a summary judgment motion, the court must
27
view the evidence in the light most favorable to the non-moving
28
party and draw all justifiable inferences in its favor.
9
Id. at
1
255.
2
and the drawing of legitimate inferences from the facts are jury
3
functions, not those of a judge . . . ruling on a motion for
4
summary judgment . . . .”
5
“Credibility determinations, the weighing of the evidence,
A.
Id.
Breach of Contract and of the Implied Covenant of Good
6
Faith and Fair Dealing
7
A claim for breach of contract requires (1) the
8
existence of a contract, (2) the plaintiff’s performance or
9
excuse for nonperformance, (3) the defendant’s breach, and (4)
10
resulting damages to the plaintiff.
11
Am., 68 Cal. 2d 822, 830 (1968).
12
contract is a covenant of good faith and fair dealing that
13
neither party will injure the right of the other to receive the
14
benefits of the agreement.”
15
Cal. App. 4th 154, 162 (2d Dist. 2003).
16
tortious breach of the covenant of good faith and fair dealing
17
requires the existence and breach of an enforceable contract as
18
well as an independent tort.”
19
Inland Cntys. Reg’l Ctr., Inc., 194 Cal. App. 4th 623, 631–32
20
(4th Dist. 2011).
21
Reichert v. Gen. Ins. Co. of
Further, “[i]mplied in every
Wolkowitz v. Redland Ins. Co., 112
“A cause of action for
Innovative Bus. P’ships, Inc. v.
The United States Department of the Treasury started
22
the HAMP program in 2009 in response to the financial crisis to
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incentivize banks to refinance mortgages of distressed homeowners
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so they could stay in their homes.
25
NA, 728 F.3d 878, 880 (9th Cir. 2013).
26
homeowners who have defaulted or are in imminent danger of
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defaulting on their home mortgages.
28
Inc., Civ. No. 1:10-1031 AWI GSA, 2010 WL 3516309, at *1 n.2
10
Corvello v. Wells Fargo Bank,
HAMP aims to assist
Inman v. Suntrust Mortg.,
1
(E.D. Cal. Sept. 3, 2010).
2
Eligible borrowers who wish to permanently modify their
3
loan through HAMP must first enter a TPP, which is a period of
4
three or more months during which the borrower must make timely
5
trial payments of the modified amount and provide required
6
documentation to the loan servicer.
7
81.
8
for HAMP after reviewing the documents submitted or the borrower
9
does not make the required trial payments, the servicer must
Corvello, 728 F.3d at 880-
If the servicer concludes that the borrower is not eligible
10
promptly communicate the ineligibility determination to the
11
borrower in writing.
12
the terms of the TPP, the servicer must offer the borrower a
13
permanent loan modification.
14
Id. at 881.
If the borrower complies with
Id.
Home loan servicers receive financial incentives from
15
the United States Department of the Treasury for completing a
16
HAMP loan modification: servicers are entitled to $1,000 for each
17
permanent modification they make.
18
same time, financial incentives for allowing a borrower to
19
participate in a TPP but then proceeding to foreclosure rather
20
than offering a permanent modification.
21
Jeanne Pezold explained, “each time a payment is made by the
22
borrower the servicer retains a servicing fee.”
23
Ex. B, Pezold Dep. at 106:18-20.)
24
stops making payments, the servicer cannot collect its servicing
25
fees until the foreclosure sale.
26
the servicer the total fees owed for servicing the loan after the
27
date of default.
28
offers a TPP before proceeding to foreclosure, it is able to
Id. at 880.
As Citi’s representative
(See Yap Decl.
Once a borrower defaults and
At that time, the lender pays
(Id. at 107:1-25, 108:2-10.)
11
There are, at the
If the servicer
1
extend the number of months between default and the foreclosure
2
sale, thereby increasing its own servicing fees.
3
“[A] trial loan modification under HAMP constitutes a
4
valid, enforceable contract under state law . . . .”
West v.
5
JPMorgan Chase Bank, N.A., 214 Cal. App. 4th 780, 799 (4th Dist.
6
2013) (citing Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 556-
7
57 (7th Cir. 2012)); see also Corvello, 728 F.3d at 883-84
8
(citing West with approval); Meixner v. Wells Fargo Bank, N.A.,
9
101 F. Supp. 3d 938, 947 (E.D. Cal. Apr. 24, 2015) (Nunley, J.)
10
(“The Ninth Circuit has recently held that, . . . a TPP Agreement
11
offered pursuant to HAMP is a contract, and a party to that
12
contract may sue for breach if the lender violates a term
13
contained within the four corners of the TPP.” (citing Corvello,
14
728 F.3d at 880) (internal quotation marks omitted)).
15
modification is not complete until all of the conditions are met,
16
banks are contractually obligated under the terms of the TPP to
17
offer a permanent modification to borrowers who comply with the
18
TPP by (1) timely making the required trial payments and (2)
19
submitting accurate documentation.
20
The Ninth Circuit has explained that this “interpretation of the
21
TPP avoids the injustice that would result were . . . [banks]
22
allowed to keep borrowers’ trial payments without fulfilling any
23
obligations in return.”
While the
Corvello, 728 F.3d at 883.
Id. at 884.
24
1.
Timely Trial Payments
25
The first question is therefore whether plaintiffs
26
timely made the required trial payments.
27
the following reasons that they did.
28
The court concludes for
“‘The interpretation of a written instrument, even
12
1
though it involves what might properly be called questions of
2
fact, is essentially a judicial function to be exercised
3
according to the generally accepted canons of interpretation so
4
that the purposes of the instrument may be given effect. . . . It
5
is therefore solely a judicial function to interpret a written
6
instrument unless the interpretation turns upon the credibility
7
of extrinsic evidence.’”
8
Lumber Co., 222 Cal. App. 3d 980, 989 (1st Dist. 1990) (quoting
9
Parsons v. Bristol Dev. Co., 62 Cal. 2d 861, 865 (1965)); see
Greater Middleton Ass’n v. Holmes
10
also Oceanside 84, Ltd., 56 Cal. App 4th at 1448 (“[T]he
11
interpretation of the contract is a question of law for the trial
12
court and for this court.”); Titan Grp., Inc. v. Sonoma Valley
13
Cnty. Sanitation Dist., 164 Cal. App. 3d 1122, 1127 (1st Dist.
14
1985) (“In the absence of conflicting extrinsic evidence, the
15
interpretation of a contract becomes a question of law and an
16
appellate court ‘must make an independent determination of the
17
meaning of the contract.’” (citation omitted)).
18
While the TPP required three timely payments by the
19
first of July, August, and September 2011 and plaintiffs did not
20
pay until July 15, August 11, and September 15, 2011,
21
respectively, the TPP also stated that “[i]f each payment is not
22
received by CitiMortgage, Inc. in the month in which it is due,
23
this offer will end and your loan will not be modified under the
24
Making Home Affordable Program.”
25
(emphasis added).)
26
(Blankenchip Decl. Ex. G
This end of month language was also emphasized in an
27
August 5, 2011 letter Citi sent plaintiffs to notify them that it
28
had not yet received their August 1, 2011 TPP payment.
13
(Cohoon
1
Decl. Ex. 13.)
2
Payment by the last day of the month in which it is due, you will
3
be considered to have failed the trial period and will not be
4
eligible for a HAMP modification.”
5
this language in a reminder sent on the fifth of August--after
6
the second payment was supposedly due--and sought payment despite
7
plaintiffs’ having made their first trial payment after the first
8
of July, all suggest that Citi intended to accept payment after
9
the first of the month and still considered plaintiffs to be
10
11
The letter stated, “If you fail to make a Trial
(Id.)
That Citi included
eligible for a HAMP loan modification.
At the August 22, 2016 hearing, Citi argued that the
12
TPP “could not be more clear” in stating that Citi was obligated
13
to suspend foreclosure proceedings only if plaintiffs made their
14
first payment by July 1, 2011, but if plaintiffs paid after the
15
first of the month, Citi had the option of offering plaintiffs a
16
permanent loan modification but no obligation to permanently
17
modify or suspend foreclosure.
18
Cohoon stated: “For them to be able to be considered for the
19
modification they were pursuing, they just had to make the
20
payment within the month it’s due.
21
protections regarding the foreclosure process, they had to make
22
their first payment by the first of July.”
23
Dep. Volume II at 151:16-22; see also id. Ex. D, Cohoon Dep.
24
Volume II at 95:5-22.)
25
Citi representative Jeanine
To get any additional
(Id. Ex. E, Cohoon
This distinction with regard to Citi’s obligations is
26
not at all clear from the face of the TPP or Citi’s conduct
27
throughout the loan modification process.
28
not explicitly state that if plaintiffs paid after the first of
14
The offer letter did
1
the month, their loan might be modified and no foreclosure
2
protection would be provided.
3
plaintiffs did not pay by the end of the month, their loan “will
4
not be modified under the Making Home Affordable Program.”
5
(Blankenchip Decl. Ex. G (emphasis added).)
6
claim that plaintiffs could still be participating in the loan
7
modification program under HAMP and yet have no protection
8
against foreclosure.
9
procedures for government sponsored enterprises (“GSE”) loans
10
stated that “Receipt of the first payment due under the trial
11
period plan on or before the last day of the month in which the
12
first payment is due is evidence of the borrower’s acceptance of
13
the trial period plan and its terms and conditions.”
14
Decl. Ex. C at 10 (emphasis added).)
15
Citi will not proceed to foreclosure sale during the trial
16
period.
17
Rather, it stated that if
It defies logic to
In fact, Citi’s own 2010 HAMP policies and
(Hymanson
One term of the TPP is that
Even assuming Citi’s interpretation could be reconciled
18
with the terms stated in the TPP, its interpretation would at
19
most render the TPP terms ambiguous.
20
of two different reasonable interpretations, the contract is
21
ambiguous.
22
ambiguities in a form contract are resolved against the drafter.”
23
Oceanside 84, Ltd. v. Fid. Fed. Bank, 56 Cal. App. 4th 1441, 1448
24
(2d Dist. 1997); see also Cal. Civ. Code § 1654 (“In cases of
25
uncertainty not removed by the preceding rules, the language of a
26
contract should be interpreted most strongly against the party
27
who caused the uncertainty to exist.”).
28
drafter of the agreement but also the more sophisticated party
“If a contract is capable
A well-settled maxim states the general rule that
15
Citi is not only the
1
and any ambiguity in the TPP agreement should be interpreted
2
against it.
3
interpreted, the TPP agreement provided plaintiffs a grace period
4
until the end of the month for their three trial payments.
5
Accordingly, the court will not grant Citi’s motion for summary
6
judgment based on the fact that plaintiffs paid their trial
7
payments after the first of the month but before the end of the
8
month.
9
10
The court therefore finds that, properly
2.
Required Documents
The next question is whether plaintiffs submitted all
11
the required documents under the TPP and, if not, if Citi
12
properly informed plaintiffs that it was cancelling the TPP due
13
to a failure to comply.
14
finds that there are triable issues of fact regarding both
15
plaintiffs’ submission of documents and Citi’s notice of
16
cancellation.
For the following reasons, the court
17
Citi’s representative, Sinner, stated in his deposition
18
that plaintiffs did not get a permanent loan modification because
19
“they were still missing documents from what the underwriter
20
requested.”
21
also admitted, however, that the Homeowner Support Specialist
22
assigned to work with plaintiffs, Burris, told plaintiffs
23
otherwise.
24
looks like Miss Burris may have missed asking for” the missing
25
documents “or may have misinformed the Blankenchips” that their
26
file was in order.
27
28
(Yap Decl. Ex. A, Sinner Dep. at 127:23-25.)
(Id. at 121:16-25, 128:1-10.)
Sinner
Sinner stated: “It
(Id. at 128:8-10.)
Citi’s servicing notes for plaintiffs’ loan indicate
that on September 21, 2011, Mr. Blankenchip called and reported
16
1
that he had just been told by Burris that their file was “in
2
order” but then received a letter stating the Forbearance Plan
3
was cancelled.
4
(“RANDY BLANKENCHIP called in std spoke with counselor this week
5
was adv file in order then rec letter date 9/12 stating [plan]
6
cancelled due to nonpymt . . . asked that counselor call using
7
cell number.”).)
8
Mr. Blankenchip back on September 22, 2011 and advised him that
9
he received the letter because his TPP was completed and Burris
(Cohoon Decl. Ex. 3, Servicing Notes at 58
The notes further indicate that Burris called
10
would be working with the closer to have the final permanent
11
modification documents sent out.
12
beena dvthat he rcvd the for term letter b/c his tpp has been
13
completed and that I will be working with the closer to have
14
final docs sent out.”).)
15
(Id. (“RANDY BLANKENCHIP had
Citi accepted plaintiffs’ three trial payments, even
16
the payment received two days after the cancellation letter was
17
mailed, and provided plaintiffs conflicting information about the
18
documents required to proceed.
19
established genuine issues of material fact as to whether they
20
submitted the required documents and whether Citi properly
21
notified them that they failed to comply with the terms of the
22
TPP.
23
Plaintiffs have therefore
Lastly, Citi argues that even if plaintiffs timely made
24
the TPP payments and submitted the required documents, Citi
25
determined on October 10, 2011 that they were no longer eligible
26
for a permanent modification because a permanent modification
27
would have increased their interest rate from 3% to 3.75%, which
28
Citi contends is not allowed under HAMP.
17
(Citi’s Mot. at 5, 7;
1
Cohoon Decl. Ex. 3, Servicing Notes at 48-49, Ex. 4, Apr. 20,
2
2011 Letter from Citi.)
3
however, plaintiffs’ eligibility did not depend on the interest
4
rate of their loan.
5
drafted and invited plaintiffs to accept, despite plaintiffs’
6
note making clear that the loan had an adjustable interest rate
7
that would change on June 1, 2011, (Cohoon Decl. Ex. 1), and
8
Citi’s knowledge that the rate would drop to 3% as early as April
9
20, 2011, when it sent plaintiffs a letter notifying them of the
According to the TPP offer letter,
This was not part of the contract Citi
10
new interest rate, (id. Ex. 4).
11
that plaintiffs were ineligible for a permanent modification
12
because of an interest rate adjustment that Citi was aware of
13
before it even mailed the TPP offer letter.
14
Accordingly, Citi cannot claim
In addition, plaintiffs’ expert witness, Tara Twomey,
15
explained that “there’s a provision in the . . . [HAMP]
16
guidelines that requires . . . at least a one-eighth of a percent
17
reduction in the interest rate” through a HAMP loan modification.
18
(Hymanson Decl. Ex. A, Twomey Dep. at 72:16-21 (Docket No. 74-
19
3).)
20
under the Freddie Mac guidelines, when you have an adjustable
21
rate loan,” if “the new interest rate, is not determined at the
22
time the TPP underwriting is done, then the servicer assumes
23
essentially a flat line, so the interest rate stays the same, and
24
they can issue the TPP on that basis.”
25
11.)
26
TPP based on their verified income and original interest rate of
27
6.625% and had no reason to conduct a “rereview at the end” of
28
the trial period.
Twomey stated, however, that “under the HAMP guidelines and
(Id. at 71:24-25, 72:1-
Twomey therefore believes that Citi offered plaintiffs a
(Id. at 74:9-25.)
18
1
This is corroborated by the United States Department of
2
the Treasury’s Supplemental Directive 09-07, which provides that
3
“[w]ith respect to adjustable rate loans where there is a rate
4
reset scheduled within 120 days after the date of the evaluation
5
. . . the monthly mortgage payment used to determine eligibility
6
will be the greater of (i) the borrower’s current scheduled
7
monthly mortgage payment or (ii) a fully amortizing monthly
8
mortgage payment based on the note reset rate using the index
9
value as of the date of the evaluation.”2
(Pls.’ Req. for
10
Judicial Notice (“RJN”) Ex. A (Docket No. 75-1).)
11
evidence in the light most favorable to the non-moving party,
12
plaintiffs have established a genuine issue of fact as to whether
13
they were eligible for a permanent HAMP modification despite
14
Citi’s realization four months after offering plaintiffs a TPP
15
that their interest rate would decrease to 3%.
16
Viewing the
For all the above reasons, the court will deny Citi’s
17
motion for summary judgment on plaintiffs’ breach of contract and
18
breach of good faith and fair dealing claims.
19
B.
20
Promissory Estoppel
The elements of promissory estoppel are: “(1) a promise
21
clear and unambiguous in its terms; (2) reliance by the party to
22
whom the promise is made; (3) [the] reliance must be both
23
reasonable and foreseeable; and (4) the party asserting the
24
estoppel must be injured by his reliance.”
25
State, 129 Cal. App. 4th 887, 901 (4th Dist. 2005) (citation and
26
27
28
2
U.S. Ecology, Inc. v.
Freddie Mac servicers are required to comply with the
Department of the Treasury’s Supplemental Directives. (See Pls.’
RJN Ex. D at 1.) Citi serviced plaintiffs’ loan on behalf of
Freddie Mac.
19
1
internal quotation marks omitted) (alteration in original); see
2
West, 214 Cal. App. 4th at 803.
3
an equitable doctrine to allow enforcement of a promise that
4
would otherwise be unenforceable, courts are given wide
5
discretion in its application.”
6
App. 4th at 902 (citing C & K Eng’g Contractors v. Amber Steel
7
Co., 23 Cal. 3d 1, 7–8 (1978)).
8
9
“Because promissory estoppel is
U.S. Ecology, Inc., 129 Cal.
“[A]llegations that the plaintiff undertook new
obligations or forewent other options can establish reliance for
10
purposes of a promissory estoppel claim.”
11
Tr. Servicing Sols., LLC, Civ. No. 11-5754 YGR, 2012 WL 3945491,
12
at *4 (N.D. Cal. Sept. 10, 2012); see also West, 214 Cal. App.
13
4th at 805 (finding the plaintiffs adequately alleged detrimental
14
reliance where the plaintiffs alleged they lost opportunities,
15
including selling their home or finding a co-signer).
16
in the rare case where the undisputed facts leave no room for a
17
reasonable difference of opinion, the question of whether a
18
plaintiff’s reliance is reasonable is a question of fact.’”
19
Mortgage Co. v. Rothwell, 10 Cal. 4th 1226, 1239 (1995) (quoting
20
Blankenheim v. E. F. Hutton & Co., 217 Call. App. 3d 1463, 1475
21
(6th Dist. 1990)).
22
justified may be decided as a matter of law if reasonable minds
23
can come to only one conclusion based on the facts.’”
24
(quoting Guido v. Koopman, 1 Cal. App. 4th 837, 843 (1st Dist.
25
1991)).
26
Meadows v. First Am.
“‘Except
All.
“‘However, whether a party’s reliance was
Id.
At the August 22, 2016 hearing, plaintiffs conceded
27
that their promissory estoppel claim is barred by the statute of
28
limitations to the extent it is based on oral promises.
20
1
Accordingly, the court will grant Citi’s motion for summary
2
judgment of plaintiffs’ promissory estoppel claim as to any
3
alleged oral promises.
4
With respect to plaintiffs’ promissory estoppel claim
5
based on the promises Citi made in the written TPP agreement,
6
Citi argues that plaintiffs fail to demonstrate that their
7
reliance on the TPP was reasonable or justifiable because (1) the
8
TPP stated that Citi would not proceed to foreclosure sale if
9
plaintiffs paid the first trial payment by July 1, 2011 and
10
plaintiffs failed to pay by July 1, 2011, and (2) the TPP
11
provided that any pending foreclosure action could be resumed if
12
plaintiffs were notified in writing that they failed to comply
13
with the TPP or did not qualify for a permanent modification and
14
Citi sent plaintiffs a letter on September 12, 2011 notifying
15
them the TPP had been cancelled.
16
(Citi’s Mot. at 13-14.)
As discussed above, the contract, properly interpreted,
17
provided plaintiffs a grace period for trial payments until the
18
end of the month.
19
participate in the HAMP loan modification process by making
20
payments in the middle of the month, they were entitled to
21
receive the same foreclosure protections regardless of whether
22
they paid on the first or fifteenth of the month.
23
therefore find that their reliance on the TPP foreclosure
24
protections was reasonable.
25
Given that plaintiffs thus continued to
A jury could
Though Citi sent a letter on September 12, 2011 stating
26
that plaintiffs’ “Forbearance Plan” had been cancelled, Mr.
27
Blankenchip claims he did not know what Citi meant by this letter
28
as Citi had never used the term “Forbearance Plan” before.
21
1
(Blankenchip Decl. ¶ 35.)
2
Burris did not explain that his TPP had been cancelled but rather
3
told him his file was in order and final permanent modification
4
documents would be sent out shortly.
5
dispute as to whether Citi properly communicated its
6
ineligibility determination to plaintiffs.
7
question of whether plaintiffs reasonably relied on the TPP is
8
one that must be decided by the factfinder at trial and cannot be
9
decided on a motion for summary judgment.
10
When he called Citi for clarification,
There is therefore a
Accordingly, the
Citi further argues that plaintiffs cannot establish
11
they reasonably relied on Citi’s November 3, 2011 correspondence
12
to plaintiffs.
13
informed plaintiffs that the “deadline for you to return the
14
required documentation for the Home Affordable Modification
15
Program has been extended” to December 5, 2011.
16
Ex. 17.)
17
being dropped from the program.
18
removed from the program If [sic] we do not receive your
19
documents by the deadline.”
20
with a foreclosure sale on November 10, 2011--prior to the
21
deadline set in this letter.
22
November 3, 2011 correspondence did not clearly or unambiguously
23
promise the foreclosure sale would be postponed and that it was
24
sent to plaintiffs in error, (Citi’s Mot. at 5 n.1, 14), Mr.
25
Blankenchip states that no one ever informed him it was sent in
26
error, (Blankenchip Decl. ¶ 45).
27
he believed he had already submitted all the required documents,
28
he was willing and ready to send any additional documents
(Citi’s Mot. at 14.)
The November 3, 2011 letter
(Cohoon Decl.
It further stated, “The deadline is real--don’t risk
You are at risk and will be
(Id.)
Citi nonetheless went ahead
While Citi argues both that its
22
He also represents that, while
1
necessary for a modification.
2
suggest that plaintiffs were still eligible for a modification
3
and participating in the “Home Affordable Modification Program.”
4
Plaintiffs have therefore sufficiently established a dispute as
5
to whether they reasonably relied on this letter.
6
(Id. ¶ 46.)
The letter seemed to
Accordingly, the court will deny Citi’s motion for
7
summary judgment on plaintiffs’ promissory estoppel claim based
8
on Citi’s written promises.
9
10
C.
Wrongful Foreclosure
The elements of wrongful foreclosure are: “(1) the
11
trustee or mortgagee caused an illegal, fraudulent, or willfully
12
oppressive sale of real property pursuant to a power of sale in a
13
mortgage or deed of trust; (2) the party attacking the sale
14
suffered prejudice or harm; and (3) the trustor or mortgagor
15
tenders the amount of the secured indebtedness or was excused
16
from tendering.”
17
West, 214 Cal. App. 4th at 800.
Citi first argues it is entitled to summary judgment
18
because plaintiffs failed to tender the full amount due under
19
their loan.
20
however, “where the foreclosure sale is void, rather than
21
voidable, such as when a plaintiff proves that the entity lacked
22
the authority to foreclose on the property.”
23
Am., Nat’l Ass’n, 218 Cal. App. 4th 1079, 1100 (2013); see also
24
McGarvey v. JP Morgan Chase Bank, N.A., Civ. No. 2:13-01099 KJM
25
EFB, 2013 WL 5597148, at *11 (E.D. Cal. Oct. 11, 2013) (“Tender
26
is required only when foreclosure has already occurred and the
27
plaintiff alleges irregularities in the foreclosure process
28
itself.”).
(Citi’s Mot. at 8.)
“Tender is not required,”
Glaski v. Bank of
As this court explained in its December 3, 2014 Order
23
1
denying Citi’s motion to dismiss plaintiffs’ wrongful foreclosure
2
claim on this same ground, “[h]ere, plaintiffs are not seeking to
3
set aside a foreclosure sale that was procedurally flawed” but
4
rather are seeking “damages based on the alleged invalidity of
5
the foreclosure sale in the first place.”
6
8.)
7
because it was void, the court once again finds that plaintiffs
8
need not have tendered.
(Dec. 3, 2014 Order at
Because plaintiffs contend the foreclosure was wrongful
9
Citi next argues that it is entitled to summary
10
judgment because plaintiffs cannot produce evidence to establish
11
prejudice because they defaulted on their loan, would not have
12
qualified for a permanent HAMP modification or traditional
13
modification under any circumstances, and the trustee’s sale was
14
therefore unavoidable.
15
genuine issue of fact as to whether plaintiffs qualified for a
16
permanent HAMP modification and the foreclosure was avoidable.
17
Accordingly, the court must deny Citi’s motion for summary
18
judgment on plaintiffs’ wrongful foreclosure claim.
19
20
D.
As discussed above, however, there is a
Fraud
“The elements of a cause of action for fraud in
21
California are: ‘(a) misrepresentation (false representation,
22
concealment, or nondisclosure); (b) knowledge of falsity (or
23
“scienter”); (c) intent to defraud, i.e., to induce reliance; (d)
24
justifiable reliance; and (e) resulting damage.’”
25
Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009) (citation and
26
emphasis omitted); see Stansfield v. Starkey, 220 Cal. App. 3d
27
59, 72–73 (2d Dist. 1990).
28
“based on a false promise, one must specifically allege and
Kearns v. Ford
To maintain an action for fraud
24
1
prove, among other things, that the promisor did not intend to
2
perform at the time he or she made the promise and that it was
3
intended to deceive or induce the promisee to do or not do a
4
particular thing.”
5
Cal. App. 4th 153, 159 (6th Dist. 1991).
6
with an honest but unreasonable intent to perform is wholly
7
different from making one with no intent to perform and,
8
therefore, does not constitute a false promise.”
9
Tarmann v. State Farm Mut. Auto. Ins. Co., 2
“[M]aking a promise
Id.
Plaintiffs argue Citi falsely promised to provide a
10
permanent loan modification and suspend foreclosure proceedings
11
during the TPP without ever intending to honor these promises.
12
(Pls.’ Opp’n at 21.)
13
its contradicting first of the month and end of the month
14
deadlines--is enough to call into question whether Citi ever
15
intended to fulfill its promises.
16
two deadlines meant Citi had an obligation to provide foreclosure
17
protection and a permanent loan modification only if plaintiffs
18
made their first payment by July 1, 2011 and discretion if they
19
paid within the month, (see Yap Decl. Ex. E, Cohoon Dep. Volume
20
II at 151:16-22), suggests that Citi wanted to be able to leave
21
both the pathway to foreclosure and the pathway to modification
22
open at all times.
23
been negligently drafted, a reasonable jury could also find that
24
Citi intentionally wrote its offer in such a fashion to best
25
position Citi to retract its promises if it so decided.
26
Citi suspended the foreclosure sale on multiple occasions and
27
made some efforts towards modifying plaintiffs’ loan, it was also
28
simultaneously exploring the possibility of foreclosure--always
The TPP offer letter in and of itself--with
Cohoon’s explanation that the
While the TPP offer letter may simply have
25
Even if
1
looking for whichever option better benefited it and never fully
2
committing to honoring its promises to plaintiffs.
3
above, a reasonable jury could also find that Citi had a
4
financial incentive to take plaintiffs through the loan
5
modification process rather than immediately foreclosing, even if
6
it never intended to offer them a permanent loan modification.
7
Though the trustee’s sale resulted in a deficiency of
8
$217,576.79, (Cohoon Decl. ¶ 59, Ex. 19), the investor--Freddie
9
Mac--bore this loss and still paid Citi $997.16 in servicing fees
As discussed
10
at the time of foreclosure, (id. ¶ 62, Ex. 21; Yap Decl. Ex. B,
11
Pezold Dep. at 106-110).
12
Further, as discussed above in the context of
13
plaintiffs’ promissory estoppel claim, plaintiffs have also
14
established the element of justifiable reliance.
15
the court must deny Citi’s motion for summary judgment on
16
plaintiffs’ fraud claim.
17
18
E.
Accordingly,
Intentional Infliction of Emotional Distress
The statute of limitations for a claim of intentional
19
infliction of emotional distress in California is two years.
20
Cal. Civ. Code § 335.1.
21
to run upon the occurrence of the last fact essential to the
22
cause of action.”
23
1444, 1452 (2d Dist. 2007).
24
plaintiffs conceded that their intentional infliction of
25
emotional distress claim is barred by the statute of limitations.
26
Accordingly, the court must find that plaintiffs’ intentional
27
infliction of emotional distress claim is time barred and grant
28
Citi’s motion for summary judgment on this claim.
“Generally, a limitations period begins
Pugliese v. Superior Ct., 146 Cal. App. 4th
At the August 22, 2016 hearing,
26
1
F.
2
Unfair Competition Law
California’s UCL prohibits “any unlawful, unfair or
3
fraudulent business act or practice.”
Cal. Bus. & Prof. Code
4
§ 17200.
5
competitors by promoting fair competition in commercial markets
6
for goods and services.”
7
949 (2002) (citing Barquis v. Merchs. Collection Ass’n, 7 Cal. 3d
8
94, 110 (1972)).
9
generally limited to injunctive relief and restitution of any
“The UCL’s purpose is to protect both consumers and
Kasky v. Nike, Inc., 27 Cal. 4th 939,
Under this statute, a prevailing plaintiff is
10
interest acquired by means of unfair competition.
11
& Prof. Code § 17203; Cel-Tech Commc’ns, Inc. v. L.A. Cellular
12
Tel. Co., 20 Cal. 4th 163, 179 (1999).
13
See Cal. Bus.
Citi first contends that plaintiffs do not have
14
standing to assert a UCL claim.
A private person has standing to
15
sue under the UCL if he can “(1) establish a loss or deprivation
16
of money or property sufficient to qualify as injury in fact,
17
i.e., economic injury, and (2) show that that economic injury was
18
the result of, i.e., caused by, the unfair business practice or
19
false advertising that is the gravamen of the claim.”
20
Corp. v. Superior Ct., 51 Cal. 4th 310, 322 (2011).
21
of the UCL standing requirement is to “eliminate standing for
22
those who have not engaged in any business dealings with would-be
23
defendants and thereby strip such unaffected parties of the
24
ability to file ‘shakedown lawsuits,’ while preserving for actual
25
victims of deception and other acts of unfair competition the
26
ability to sue and enjoin such practices.”
27
Plaintiffs clearly had a business relationship with Citi and
28
suffered injury due to a loss of real property through
27
Kwikset
The purpose
Id. at 317.
1
foreclosure and poor credit ratings.
2
To establish that the economic injury was the result of
3
an unfair business practice, a plaintiff must show a “causal
4
connection or reliance on the alleged misrepresentation.”
5
326 (citation and internal quotation marks omitted).
6
plaintiff fails to satisfy the causation prong of the statute if
7
he or she would have suffered ‘the same harm whether or not a
8
defendant complied with the law.’”
9
Bank, N.A., 216 Cal. App. 4th 497, 522 (4th Dist. 2013) (quoting
Id. at
“A
Jenkins v. JP Morgan Chase
10
Daro v. Superior Ct., 151 Cal. App. 4th 1079, 1099 (1st Dist.
11
2007)).
12
For example, in Jenkins, the court found the plaintiff
13
lacked standing under the UCL because she could not establish a
14
causal link between the foreclosure of her home and the
15
defendant’s six unlawful or unfair acts, all of which occurred
16
after the plaintiff defaulted on her loan.
17
the defendant had not acted unfairly, the plaintiff still would
18
have defaulted and suffered the same economic injury.
19
Id. at 523.
Even if
Unlike in Jenkins, plaintiffs entered into a TPP
20
agreement with Citi to cure their initial default and reinstate
21
the loan.
22
with respect to whether they qualified for a permanent HAMP
23
modification and, as a result, whether a trustee’s sale was
24
inevitable.
25
plaintiffs did not suffer injury due to their own inability to
26
pay but rather because of Citi’s unfair or unlawful conduct
27
despite plaintiffs having made the three trial period payments
28
within the month in which they were due.
Plaintiffs have established a genuine issue of fact
A reasonable jury could therefore find that
28
Accordingly, the court
1
must deny Citi’s motion for summary judgment of plaintiffs’ UCL
2
claim for lack of standing.
3
The UCL “establishes three varieties of unfair
4
competition--acts or practices which are unlawful, or unfair, or
5
fraudulent.”
6
prong of the UCL is a separate and distinct theory of liability”
7
and offers an “independent basis for relief.”
8
Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009) (citing S. Bay
9
Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861
10
Cel-Tech Commc’ns, Inc., 20 Cal. 4th at 180.
“Each
Kearns v. Ford
(4th Dist. 1999)).
11
As discussed above, a question of fact remains for
12
trial as to whether Citi made false promises with fraudulent
13
intent.
14
dispute of fact as to plaintiffs’ fraud claim under the UCL based
15
on this same allegation.
16
Accordingly, the court must also find there is a genuine
Plaintiffs also contend Citi engaged in unlawful
17
business practices by breaching its obligations under the TPP
18
agreement and selling plaintiffs’ home at a foreclosure auction.
19
“An action is unlawful under the UCL and independently actionable
20
if it constitutes a violation of another law, ‘be it civil or
21
criminal, federal, state, or municipal, statutory, regulatory, or
22
court-made.’”
23
No. 2:14-1237 KJM KJN, 2014 WL 4662015, at *7 (E.D. Cal. Sept.
24
18, 2014); see also McKell v. Wash. Mut., Inc., 142 Cal. App. 4th
25
1457, 1474-75 (2d Dist. 2006) (“By extending to business acts or
26
practices which are ‘unlawful,’ ‘the UCL permits violations of
27
other laws to be treated as unfair competition that is
28
independently actionable.’” (citation omitted)).
Cooksey v. Select Portfolio Servicing, Inc., Civ.
29
Given that
1
plaintiffs have established a genuine dispute of material fact
2
regarding Citi’s breach of contract, promissory estoppel, and
3
wrongful foreclosure, plaintiffs have also established a dispute
4
regarding Citi’s unlawful business acts or practices under the
5
UCL.
6
7
8
Accordingly, the court will deny Citi’s motion for
summary judgment on plaintiffs’ UCL claim.
G.
9
Punitive Damages
Plaintiffs seek punitive damages with respect to their
10
claims for fraud and unlawful business practices under the UCL.
11
(FAC at 19-20.)
12
that plaintiffs are not entitled to punitive damages as a matter
13
of law.
14
Citi moves for summary judgment on the ground
(Citi’s Mot. at 22.)
Pursuant to California Civil Code section 3294, a
15
plaintiff may recover punitive damages “[i]n an action for the
16
breach of an obligation not arising from contract, where it is
17
proven by clear and convincing evidence that the defendant has
18
been guilty of oppression, fraud, or malice.”
19
§ 3294(a).
20
way of punishing the defendant.”
21
fraud as “an intentional misrepresentation, deceit, or
22
concealment of a material fact known to the defendant with the
23
intention on the part of the defendant of thereby depriving a
24
person of property or legal rights or otherwise causing injury.”
25
Id. § 3294(c).
26
Cal. Civ. Code
Punitive damages are “for the sake of example and by
Id.
Subsection (c) defines
Given that the court has already found a genuine issue
27
of material fact regarding Citi’s fraudulent conduct, the court
28
must deny Citi’s motion for summary judgment on plaintiffs’
30
1
punitive damages request and leave it for a jury to determine
2
whether Citi’s actions reach the requisite level of intent.
3
IT IS THEREFORE ORDERED that Citi’s motion for summary
4
judgment (Docket No. 72) be, and the same hereby is, GRANTED on
5
plaintiffs’ intentional infliction of emotional distress claim
6
and promissory estoppel claim as to any alleged oral promises,
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and DENIED in all other respects.
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Dated:
August 26, 2016
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