Judge Matthew C. Braner, Case 37-2023-00010048-CU-OR-CTL 2023-08-03 Tentative Ruling

Judge: Matthew C. Braner, Case: 37-2023-00010048-CU-OR-CTL, Date: 2023-08-03 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - July 06, 2023

07/07/2023 09:00:00 AM C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited Other Real Property Motion Hearing (Civil) 37-2023-00010048-CU-OR-CTL MATUSZEWSKI VS SN SERVICING CORPORATION [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant SN Servicing Corporation's demurrer is OVERRULED.

Defendant's request for judicial notice is granted.

'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 42; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The elements of promissory estoppel are: 1) a promise; 2) the promisor should reasonably expect the promise to induce action or forbearance on the part of the promisee or a third person; 3) the promise induces action or forbearance on the part of the promisee; and 4) injustice can be avoided only by enforcement of the promise. Defendant argues it made a promise to grant Plaintiff a loan modification but that promise was conditioned on Plaintiff making an initial payment of $9,700.00. Thus, when Plaintiff cancelled the check, Defendant was thereby 'relieved of [its] obligation to give Plaintiff a loan modification. The rest of the purported facts simply do not matter.' The Court disagrees. In her complaint, Plaintiff alleges she received a letter dated February 23, 2023, congratulating her on receiving a loan modification and instructing her that 'in the following weeks, you will receive a formal offer or agreement, which will provided additional terms and conditions of the assistance program for which you have been approved. You must accept or reject the formal loss mitigation agreement within 14 days of receipt.' Defendant does not contradict Plaintiff's averments that she never received the written formal offer, nor Plaintiff's description of the conversations she had with Defendant's representatives wherein she was told to send Defendant $9700.00, to make monthly payments of $6,700.00 for the first six months, and that she would be subject to a possible payment increase. Plaintiff alleges she was assured Defendant would halt foreclosure proceedings while it was processing her loan modification. Plaintiff also alleges she spent a month waiting for the formal loan modification terms, which never arrived, and as a result she cancelled the check she had sent for $9,700.00.

Therefore, the factual allegations are that not only did Defendant promise Plaintiff a loan modification, it promised she would receive the terms of the agreement in writing. Indeed, under the statute of frauds, any loan modification would be invalid unless it was memorialized in writing. (Civ. Code, § 1624, subd.

(6).) Moreover, Civil Code section 2922 states: 'A mortgage can be created, renewed, or extended, only by writing, executed with the formalities required in the case of a grant of real property.' It has also expressly been held that a loan modification comes within the statute of frauds. (See Secrest v. Security Calendar No.: Event ID: TENTATIVE RULINGS

2992406 6 CASE NUMBER: CASE TITLE: MATUSZEWSKI VS SN SERVICING CORPORATION [IMAGED] 37-2023-00010048-CU-OR-CTL National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 552.) Pursuant not only to the letter she received but more importantly the letter of the law, Plaintiff had a right to expect Defendant would deliver a written agreement for her to sign or any agreement would be invalid. Instead, Defendant regarded Plaintiff's cancelling the check as relieving it of its obligation to give Plaintiff a loan modification, rather than a reflection of Defendant's failure to live up to its statutorily mandated part of the bargain, and then continued to move forward with the foreclosure.

The Court rejects Defendant's argument that sending the check was a condition precedent to the loan modification. This first 'good faith' payment was clearly part of the loan modification agreement since requiring an upfront payment as a condition to obtaining a loan modification would itself violate the statute of frauds. By failing to provide a written agreement, Defendant failed to offer Plaintiff the valid loan modification it promised. By cancelling the check, Plaintiff simply protected herself from being a party to an invalid agreement and potentially having the money she sent regarded as a delinquent payment that had no legal effect on the impending foreclosure sale. Defendant did not otherwise interrupt foreclosure proceedings until the eve of the sale date, when they voluntarily extended the sale date for 90 days, possibly in recognition of the defects in their foreclosure process.

Accordingly, Defendant's demurrer as to Plaintiff's second and third cause of action requesting declaratory and injunctive relief and attorneys' fees under California Civil Code sections 2923.6 and 2923.7, is overruled.

Defendant's demurrer as to Plaintiff's Fourth cause of action is also overruled. Although Defendant argues it violated no statutes that would support an unfair competition claim, Plaintiff's complaint alleges sufficient facts to support violations of Civil Code sections 2923.6 and 2923.7, as well as Plaintiff's estoppel claim predicated on Defendant reneging on its promise to provide a valid written loan modification agreement. This is sufficient at this stage to survive demurrer on the unfair competition claim.

Calendar No.: Event ID: TENTATIVE RULINGS

2992406 6