Brooksbank v. Private Capital Group, LLC et al
Filing
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Order by Magistrate Judge Howard R. Lloyd granting 92 Motion for Summary Judgment. (hrllc1, COURT STAFF) (Filed on 12/4/2015)
E-Filed 12/4/15
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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HEATHER BROOKSBANK,
Plaintiff,
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ORDER GRANTING MOTION FOR
SUMMARY JUDGMENT
v.
Re: Dkt. No. 92
PRIVATE CAPITAL GROUP, LLC,
Defendant.
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United States District Court
Northern District of California
Case No. 13-cv-02667-HRL
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Plaintiff Heather Brooksbank (“Brooksbank”) sues Defendant Private Capital Group, LLC
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(“PCG”) for breach of a written contract. Brooksbank argues that a letter she received from PCG
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in 2009 was a contractual offer to participate in a short-sale program, that she formed a contract by
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accepting the offer, and that PCG breached the contract by foreclosing on Brooksbank’s home.
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The parties have expressly consented to magistrate jurisdiction.
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judgment.
PCG moves for summary
Background
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Brooksbank raised claims for breach of contract and fraud in her first amended complaint.
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Dkt. No. 46. Brooksbank conceded in a brief opposing a motion to dismiss that an oral-contract
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theory is time-barred.
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Brooksbank had simply alleged that the acts which constituted a breach of contract were also
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fraudulent; under California law the mere breach of a contract, without more, cannot support a
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fraud claim. Dkt. No. 56 at 5-6. Brooksbank had been represented by counsel when these issues
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were resolved, but the court granted an unopposed motion for her counsel to withdraw due to
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material disagreements with Brooksbank about case strategy. Dkt. No. 68. In the following 18
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months Brooksbank did not seek leave to amend the first amended complaint. Brooksbank
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therefore proceeds with this case, pro se, solely on a claim that a written contract has been formed
Dkt. No. 50 at 10.
The court dismissed the fraud claim because
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and breached.
PCG filed its motion for summary judgment in September of 2015. PCG supports the
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motion with public records and with requests for admission to which Brooksbank did not respond.
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PCG raises several independent arguments: (1) PCG’s initial letter was an invitation to deal, not
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an offer; (2) Brooksbank has waived her oral-contract theory, but no signed writing satisfies the
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statute of frauds; (3) even if the court construes the letter as an offer, Brooksbank never qualified
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for conditional terms described in the letter; (4) even if the court concludes that a contract was
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formed, Brooksbank never performed according to the terms of the purported contract; and (5)
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Brooksbank may not bring any claims based on the foreclosure of her home because she must first
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tender the full amount that was due on her defaulted loan. Brooksbank, in violation of Civil Local
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United States District Court
Northern District of California
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Rule 7-3, failed to file either an opposition brief or a statement of non-opposition. Instead,
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Brooksbank filed an untimely letter that asked the court to “not rule on [PCG]’s Motion for
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Summary Judgment without first allowing [her] to be heard.” Dkt. No. 97 at 1.
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The court heard arguments from PCG and Brooksbank on October 27, 2015.
The
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undersigned asked Brooksbank why she did not respond to the requests for admission or the
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motion for summary judgment. Brooksbank answered that it had been difficult to understand the
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papers she had received. The undersigned asked Brooksbank whether she had consulted with the
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free, court-sponsored Federal Pro Se Program when she received those papers; Brooksbank
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answered that the program’s attorney has provided legal advice to her in the past, but that she had
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not asked him for advice since April or May of 2015 because personal problems had made it
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difficult for her to focus on the case.
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Brooksbank argued that, prior to the foreclosure PCG obtained in 2009, PCG had also
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judicially foreclosed on her home in 2008 through state-court proceedings in New York and
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without any notice to Brooksbank. She claimed that therefore PCG had committed fraud in 2009
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when it formed a contract with her that related to an ownership interest PCG had already secretly
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extinguished in 2008. Brooksbank focused throughout the hearing on her new factual claim about
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a judicial foreclosure in New York. Brooksbank offered to hand documentary evidence to the
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undersigned, which she said would prove her new factual claim. Brooksbank also asserted that
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she had put some money into an escrow account, that PCG fraudulently seized that money when it
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foreclosed on her home in 2009, and that the Roundpoint Mortgage Servicing Corp. had
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committed fraud while working with PCG.
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improper that PCG sent a lawyer she did not know to the oral argument.
Brooksbank also considered it suspicious and
The undersigned advised Brooksbank that her old fraud claim had already been dismissed,
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that it was improper to raise new allegations of fraud 18 months later during a hearing on a motion
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for summary judgment, and that the present hearing was about whether or not summary judgment
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should be entered against her on the remaining breach-of-contract claim. Brooksbank nevertheless
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remained focused on her new allegations of fraud throughout the hearing and spent little time
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discussing her breach-of-contract claim. The undersigned repeatedly asked Brooksbank to clarify
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United States District Court
Northern District of California
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why her new allegations of fraud might matter to the breach-of-contract claim; Brooksbank
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eventually responded that the breach-of-contract claim only makes sense to her as an extension of
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fraudulent acts committed by PCG, and that therefore one claim cannot exist without the other.
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PCG argued that Brooksbank’s new arguments and factual claims are not relevant to the
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motion for summary judgment, that Brooksbank had admitted to all of the material facts by failing
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to respond to PCG’s requests for admission, and that it would be procedurally improper and unfair
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if the court accepted untimely new evidence that Brooksbank had mentioned for the first time
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during the hearing. PCG offered, as conjecture, the possibility that Brooksbank had been confused
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by a transfer of ownership in her loan, which may have occurred during a third party’s bankruptcy
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proceedings in New York.
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The undersigned did not accept the unauthenticated and untimely documents offered by
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Brooksbank during the hearing. The court shall not, in this order on PCG’s motion, entertain new
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and procedurally improper allegations of fraud raised by Brooksbank during the hearing. The
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court now addresses whether to grant the motion for summary judgment.
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Legal Standard
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A motion for summary judgment should be granted if there is no genuine issue of material
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fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a);
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears the initial
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burden of showing the basis for the motion and identifying the portions of pleadings, depositions,
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answers to interrogatories, admissions, or affidavits which demonstrate the absence of a triable
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issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The moving party must
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“either produce evidence negating an essential element of the nonmoving party’s claim or defense
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or show that the nonmoving party does not have enough evidence of an essential element to carry
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its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc.,
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210 F.3d 1099, 1102 (9th Cir. 2000).
The burden then shifts to the non-moving party to produce evidence supporting its claims
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or defenses. Id. The non-moving party may not rest upon more allegations or denials of the
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adverse party’s evidence, but instead must produce admissible evidence that shows there is a
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United States District Court
Northern District of California
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genuine issue of material fact for trial. See id. A genuine issue of material fact is one that could
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reasonably be resolved in favor of either party. A dispute is “material” only if it could affect the
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outcome of the case under the governing law. Anderson, 477 U.S. at 248-49.
Discussion
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As a preliminary matter, the court addresses the argument that no claim related to a
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foreclosure may be raised by a borrower until she tenders all the money that was due on the loan.
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PCG relies upon cases that hold a court sitting in equity should not void a voidable trustee’s sale
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until the borrower tenders the money that was due. E.g., Karlsen v. American Sav. & Loan Assn.,
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15 Cal. App. 3d 112, 116 (1971). The court does not read these cases to deprive litigants of any
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other remedy in any other situation. For instance, Brooksbank seeks damages for a trustee’s sale
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that allegedly breached a related contract—she does not claim that the sale is voidable and should
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be voided. Dkt. No. 46 at 6. The court rejects the argument that a borrower must tender the full
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amount that was due on an underlying loan before she may raise any claims related to a
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foreclosure.
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The court next addresses whether PCG is entitled to summary judgment on Brooksbank’s
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breach-of-contract claim for lack of sufficient evidence to support the contract-formation element
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of that claim. “An essential element of any contract is the consent of the parties, or mutual
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assent.” Donovan v. RRL Corp., 26 Cal. 4th 261, 270-71 (2001) (citing Cal. Civ. Code §§
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1550(2), 1565(2)). “Mutual assent usually is manifested by an offer communicated to the offeree
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and an acceptance communicated to the offeror.” Id. at 270-71. “An offer is the manifestation of
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willingness to enter into a bargain, so made as to justify another person in understanding that his
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assent to the bargain is invited and will conclude it. The determination of whether a particular
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communication constitutes an operative offer, rather than an inoperative step in the preliminary
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negotiation of a contract, depends upon all the surrounding circumstances.
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manifestation of the party’s assent ordinarily controls, and the pertinent inquiry is whether the
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individual to whom the communication is made had reason to believe that it was intended as an
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offer.” Id. at 271.
The objective
The court previously ruled that the breach-of-contract claim would not be dismissed under
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United States District Court
Northern District of California
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Federal Rule of Civil Procedure 12(b)(6) because Brooksbank “had adequately alleged that it was
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objectively reasonable for her to believe that the letter constituted an offer[.]” Dkt. No. 56 at 4.
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The court also noted, however, that the letter was ambiguous and that “whether [the letter] was an
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offer or merely an invitation to discuss alternatives to foreclosure . . . will ultimately depend on
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the surrounding factual circumstances.” Id. Brooksbank has failed, however, to provide the court
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with evidence about the surrounding factual circumstances. The letter’s equivocal language—the
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recipient is “invite[d] to consider [a] short sale program” for which they “may qualify” and the
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recipient should contact PCG “to discuss the program” and “to explore alternatives”—cannot
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reasonably and objectively be interpreted as a contractual offer unless contextual facts modify the
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plain meaning of the letter. Dkt. No. 92-1 at 63. PCG has correctly called attention to the fact that
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Brooksbank cannot carry her burden of persuasion at trial on the material issue of whether the
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letter was a contractual offer, Dkt. No. 92 at 2, and therefore PCG’s motion for summary
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judgment is granted.
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Summary judgment is also appropriate for the independent reason that Brooksbank lacks a
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signed writing that might satisfy the statute of frauds. An agreement “authorizing . . . any . . .
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person to purchase or sell real estate” is invalid unless it is “in writing and subscribed by the party
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to be charged[.]” Cal. Civ. Code § 1624(a)(4). A party may be estopped from invoking the statute
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of frauds when another party detrimentally relies on an oral agreement by “seriously” changing
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her position. Whorton v. Dillingham, 202 Cal. App. 3d 447, 456 (1988). Brooksbank proceeds
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solely on the theory that a written contract authorized her to conduct a short sale of real estate in
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order to satisfy the debt owed to PCG, but the letter she relies upon is not signed by an agent of
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PCG, Dkt. No. 92-1 at 64, and she has not submitted any other writing that might be a signed
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contract or memorandum of contract. Brooksbank has also not submitted any evidence that might
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tend to show she “seriously” changed her position in response to PCG’s letter. Rather, on the
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record before this court, Brooksbank expected to receive certain benefits but did not seriously
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change her position on the basis of that expectation. PCG is therefore not estopped from invoking
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the statute of frauds. Brooksbank’s breach-of-contract claim fails as a matter of law for lack of
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any signed writing that might satisfy the statute of frauds and PCG is entitled to summary
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United States District Court
Northern District of California
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judgment against Brooksbank on that claim.
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The court’s conclusion is also supported by Brooksbank’s failure to answer the requests for
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admission she received in May of 2015. Dkt. No. 92-1 at 4, 123. The first page of the requests
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clearly states the related procedural rules and the deadline within which Brooksbank should
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respond, Dkt. No. 92-1 at 4, but Brooksbank did not seek advice from the Federal Pro Se
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Program’s attorney and did not respond to the requests for admission. Brooksbank therefore made
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the requested admissions and the court takes Brooksbank’s admissions to be true for the purposes
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of this case. Fed. R. Civ. P. 36(a)(3); Fed. R. Civ. P. 36(b). Brooksbank admits that her
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allegations were wrong as to virtually every material issue. Dkt. No. 92-1 at 6-14. For just a few
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examples: (1) no signed agreement exists regarding the short-sale of the property, Dkt. No. 92-1 at
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11; (2) she did not qualify for the program described in the letter because she could not pay
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property taxes or insurance premiums for the property, id. at 12; (3) she did not qualify for the
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program because the amount of the loan was not greater than the market value of the property, id.;
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(4) no signed agreement to permit a short sale exists, id. at 11; and (5) no other agreement “that
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would forbear” PCG’s foreclosure exists, id.
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Conclusion
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The motion for summary judgment is granted. The court rejects the argument that a
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borrower cannot raise any claims related to a foreclosure until the borrower tenders all of the
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money that was due on the loan. Nevertheless, there is no genuine issue of material fact on the
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question of whether a valid and enforceable contract was formed—no valid offer was made and no
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signed writing satisfies the statute of frauds, so PCG is entitled to judgment as a matter of law.
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IT IS SO ORDERED.
Dated: 12/4/15
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________________________
HOWARD R. LLOYD
United States Magistrate Judge
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United States District Court
Northern District of California
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