Judge Elaine W. Mandel, Case SC125602 2022-09-07 Tentative Ruling

Judge: Elaine W. Mandel, Case: SC125602, Date: 2022-09-07 Tentative Ruling

Case Number: SC125602 Hearing Date: September 7, 2022 Dept: P

Tentative Ruling
Okonkwo et al. v. Bank of America, N.A., Case No. SC125602
Hearing Date September 7, 2022
Defendant The Bank of New York Mellon’s Motion for Summary Judgment

Plaintiffs assert breach of contract against defendant Bank of New York Mellon (“BoNYM.”) The Okonwkos allege Bank of America, N.A. (“BANA”) breached a loan modification agreement by failing to offer them a permanent modification and that BoNYM is liable as BANA’s successor-in-interest. BoNYM moves for summary judgment on the grounds that its pooling and service agreement with BANA provides it is not liable for “any action or failure to act” by BANA. Additionally, BoNYM argues the action must be dismissed because it has not been brought to trial within five years of the complaint being filed.

Okonkwo Objections: Objections 5 and 6 SUSTAINED (lack of foundation, legal conclusion, improper opinion,) objection 6 [SIC] OVERRULED.

BoNYM Objections: OVERRULED.

A court determining a summary judgment motion applies a three-step process: (1) identifying the issues framed by the complaint, (2) determining whether moving party made an adequate showing that negates opponent’s claim, and (3) determining whether the opposing party has raised a triable issue of fact. Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1662. A defendant moving for summary judgment has the initial burden to show that one or more elements of a plaintiff’s cause of action cannot be established, or that an affirmative defense exists. If defendant makes that showing, the burden shifts to plaintiff to show a triable issue of fact. Saelzler v. Advanced Group 400 (2001) 25 Cal. 4th 763, 768.

In California, a successor company generally does not assume its predecessor’s liabilities unless there is an “express or implied agreement of assumption.” Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28.

BoNYM submits its pooling and service agreement with BANA, which states BoNYM will not be liable for BANA’s debts. This demonstrates there was no express agreement of assumption under Ray, so BoNYM is not liable under its predecessor’s agreement with the Okonkwos. This is sufficient to shift the summary judgment burden.

Plaintiffs present interrogatory responses and deposition testimony of BoNYM’s person most knowledgeable that show BoNYM acquired the loan from Countrywide Home Loans, Inc. – not BANA -- in 2006. Thaler decl. ¶6, Exhibit 1, pgs. 17-19, Exhibit 4, pg. 41. The deposition testimony suggests BANA acted as BoNYM’s agent throughout its dealings with the Okonwkos. Thaler decl. ¶ 6, Exhibit 4, pg. 48. This could establish that BANA’s alleged agreement with the Okonkwos was made on BoNYM’s behalf, in BANA’s capacity as BoNYM’s agent. Therefore, the agreement between BANA and the Okonwkos would bind BoNYM as BANA’s principal, regardless of the terms of the pooling agreement.

Additionally, the pooling agreement is between BoNYM and Countrywide Home Loans, Inc., and BANA is not a party. Trinkley Declaration, Exhibit 1. BoNYM has not provided evidence establishing BANA is Countrywide’s successor and has not explained how an agreement with Countrywide could impact BoNYM’s liability or lack of liability for BANA’s debts.

In reply, BoNYM concedes BANA serviced the loan, while BoNYM was its owner at relevant times. They argue there can be no principal/agent liability because there is no evidence BoNYM controlled BANA’s activities when servicing the loan. As explained, the Okonwos presented evidence of principal/agent liability via the PMK deposition. The reply arguments fail.

Additionally, BoNYM states the MSJ must be granted because the Okonkwos failed to bring the action to trial within five years, as required under Cal. Code of Civ. Proc. §583.310. Under Cal. Code of Civ. Proc. §583.40, the time within which an action must be brought to trial will be extended if “[p]rosecution or trial of the action was stayed or enjoined,” or “[b]ringing the action to trial . . . was impossible, impracticable, or futile.” Due to the COVID 19 pandemic, and requests for continuance by BoNYM, trial was delayed or continued multiple times.

In reply, BoNYM argues the Judicial Council’s emergency COVID-19 rules only extended the time to bring this matter to trial to September 23, 2022. They also argue various motions filed should not delay the five-year limit since, per Gaines v. Fid. Nat’l. Title Ins. Co. (2016) 62 Cal. App. 4th 1081, 1093, motion hearings are intrinsic to litigation and do not justify extending the time limit. Nonetheless, multiple factors—including the COVID-19 delays and defendants’ motion to set aside an entry of default – made trial within the five-year period impossible or impracticable. An extension of the five-year limit is justified. DENIED.