Judge: Teresa A. Beaudet, Case: 20STCV18580, Date: 2023-08-21 Tentative Ruling

Case Number: 20STCV18580    Hearing Date: August 21, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff Rosy Rodriguez (“Plaintiff”) filed this action on May 15, 2020 against Defendant Newrez, LLC dba Shellpoint Mortgage Servicing, asserting causes of action for (1) breach of contract, (2) violation of Civil Code section 2924c, (3) violation of Civil Code section 2924.17, and (4) unfair business practices.

Newrez, LLC dba Shellpoint Mortgage Servicing LLC (“Defendant”) now moves for summary judgment against Plaintiff or, in the alternative, for summary adjudication of issues. Plaintiff opposes.

Request for Judicial Notice

The Court grants Defendant’s request for judicial notice.

Evidentiary Objections

The Court rules on Plaintiff’s evidentiary objections as follows:

Objection No. 1: overruled. The Court notes Ms. Knowles states in her declaration, “[i]n my position as Paralegal II, I have access to Shellpoint’s business records.” (Knowles Decl., ¶ 3.) Plaintiff asserts in Objection No. 1 that “there is no indication of who Jean Knowles is at all in relation to Shellpoint (ie, is she a paralegal at Shellpoint, a paralegal at Klinedinst, PC, or a paralegal for another company)…” (Plaintiff’s Evidentiary Objections at p. 1:26-2:1.)

In its response to Plaintiff’s evidentiary objections, Defendant asserts that “it is clear from the Declaration that Ms. Knowles is employed by Defendant Shellpoint. Even if the declaration were narrowly read and context is ignored, Ms. Knowles is a qualified witness.” (Defendant’s Response to Plaintiff’s Evidentiary Objections at p. 2:8-10.)

Defendant cites to Jazayeri v. Mao (2009) 174 Cal.App.4th 301, 324, where the Court of Appeal noted that “any ‘qualified witness’ who is knowledgeable about the documents may lay the foundation for introduction of business records—the witness need not be the custodian or the person who created the record. Although the trial court is accorded discretion in determining whether evidence sufficient to support the trustworthiness of a business record has been introduced, the court cannot ignore favorable evidence merely because the offering party did not follow the standard or preferred method of laying the foundation for admission.” (Internal citation omitted.) Defendant thus asserts that there is not “any requirement that Ms. Knowles be an employee of Shellpoint. As long as she has access to the records, has the requisite knowledge, and reviewed the same, she is a qualified witness.” (Defendant’s Response to Plaintiff’s Evidentiary Objections at p. 2:14:16.) Ms. Knowles states in her declaration that she is “familiar with the types of records maintained by Shellpoint in connection with the loan and the procedures for creating these types of records. In preparation for the statements contained in this declaration, I reviewed the loan file associated with Plaintiff Rosy Rodriguez and the property located at 236 North 4th Street, Montebello, CA 90640…The documents contained in the loan file are documents that were imaged at the time they were received or at the time they were received.” (Knowles Decl., ¶ 3.)

Defendant also contends that “the objection is disingenuous and made in bad faith. The hearing on the Motion was continued for Plaintiff to take the deposition of Ms. Knowles as the PMK for Shellpoint.” (Defendant’s Response to Plaintiff’s Evidentiary Objections at p. 4:27-5:3.) Defendant’s counsel states in a declaration that “[t]he hearing on the Motion was continued to July 25, 2023 to allow Plaintiff to depose Jean Knowles. Plaintiff deposed Ms. Knowles as the Person Most Knowledgeable of Shellpoint on June 26, 2023. Ms. Knowles was questioned on her employment at Shellpoint as a Paralegal II, and on Shellpoint’s business records.” (Reply Cahill Decl., ¶ 4.)

Objection No. 2: overruled

Objection No. 3: overruled

Objection No. 4: overruled

Lastly, as noted by Defendant, Plaintiff’s responses to certain material facts submitted by Defendant include evidentiary objections. (See Plaintiff’s Response to Undisputed Material Fact Nos. 11, 12, 13, 14, 15, 19, 21, 22, 23, 26, 27, 28.) Pursuant to California Rules of Court, rule 3.1354, subdivision (b), “[a]ll written objections to evidence must be served and filed separately from the other papers in support of or in opposition to the motion. Objections to specific evidence must be referenced by the objection number in the right column of a separate statement in opposition or reply to a motion, but the objections must not be restated or reargued in the separate statement.” Accordingly, the Court declines to rule on the objections contained within Plaintiff’s response to Defendant’s separate statement.

Legal Standard

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in¿Civil Code section 3294, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c(f)(1).)¿“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.)¿

The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

When a defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)

Discussion

A.    Allegations of the Complaint

In the Complaint, Plaintiff alleges that at all relevant times, she has owned the property

located at 236 North 4th St., Montebello, CA 90640 (the “Subject Property”). (Compl., ¶ 6.) Plaintiff purchased the Subject Property in 2004. (Compl., ¶ 7.)

In April 2011, Plaintiff obtained a “First Lien loan” from BAC Home Loans Servicing, LP in the amount of $462,206.86, which was subsequently transferred to Defendant, a debt collector, for servicing. (Compl., ¶ 7.) In addition, in April 2011, Plaintiff received a Loan Modification Agreement through BAC Home Loans Servicing, LP. (Compl., ¶ 8.) The loan modification stated that Plaintiff’s mortgage was permanently modified to a fixed loan, including terms and interest. (Compl., ¶ 8.) Thereafter, Defendant became the servicer of the modified mortgage. (Compl., ¶ 9.)

Plaintiff alleges that Defendant sent out monthly statements to Plaintiff wherein the “regular monthly payment” amount changed considerably over the course of several years. (Compl., ¶ 9.) Plaintiff alleges that “[f]or example, the mortgage statement dated September 17, 2017 shows a regular monthly payment amount of $2,285.31. The statement in October 18, 2017 shows a regular monthly payment amount of $1,399.68 and one in September 20, 2018 shows a regular monthly payment amount of $1,624.93. One of the most recent statements dated March 17, 2020 shows that the regular monthly payment is $2,205.23.” (Compl., ¶ 9.)

Plaintiff alleges that in April 2018, Plaintiff attempted to make a reinstatement payment and was told that she had to pay nearly four months of payments, instead of the two that were owed, “because of the overcharges of payments.” (Compl., ¶ 10.) When Plaintiff countered with the correct amount, Defendant refused to accept. (Compl., ¶ 10.) 

Plaintiff alleges that on December 6, 2018, Defendant recorded a Notice of Default against Plaintiff’s property wherein it failed to verify the default amount before recording the Notice of Default. (Compl., ¶ 11.)

B.    Asserted Failure to Join an Indispensable Party

Defendant first asserts that Plaintiff’s claims fail because she has not joined an indispensable party. Pursuant to Code of Civil Procedure section 389, subdivision (a), “[a] person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.”

Pursuant to Code of Civil Procedure section 389, subdivision (b), “[i]f a person as described in paragraph (1) or (2) of subdivision (a) cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.”

Defendant notes that here, Plaintiff seeks damages for breach of the loan modification, but asserts that “Plaintiff and James Rodriguez are both signatories to the Note, Deed of Trust, and Loan Modification.” (Mot. at p. 13:1-2.) Defendant provides evidence of a “Deed of Trust” with the date “01/22/07” indicating that the “Borrower” is “James Rodriguez and Rosy Rodriguez, Husband and Wife as Joint Tenants.” (Defendant’s RJN, Ex. 3.) Defendant also provides evidence of a “Loan Modification Agreement” which provides, inter alia, “[t]his Loan Modification Agreement (“Agreement”), made this 21st day of April 2011 between JAMES RODRIGUEZ, ROSY RODRIGUEZ and BAC Home Loans Servicing, LP (Lender), amends and supplements (1) the Mortgage, Deed of Trust, or Deed to Secure Debt (the Security Instrument), dated the 9th day of January 2007 and in the amount of $315,000.00 and recorded on 1/22/2007…and (2) the Note bearing the same date as, and secured by, the Security Instrument, which covers the real and personal property described in the Security Instrument and defined therein as in the ‘Property’, located at 236 NORTH 4TH STREET, MONTEBELLO CA 90640.” (Knowles Decl., ¶ 8, Ex. 4.)

Defendant cites to Williams v. Reed (1957) 48 Cal.2d 57, 65, where the California Supreme Court noted that “[i]t is true in most jurisdictions, including California, that joint obligors upon the same contract are indispensable parties. They may not be sued separately.  If judgment is obtained in a separate action against one, it bars an action against the others.” (Internal reference to [citations] omitted, emphasis in original.)

Defendant asserts that here, judgment rendered in the absence of James Rodriguez “might leave [Defendant] exposed to the risk of additional liability or inconsistence obligations. [Defendant] may be exposed to this additional risk should James Rodriguez, as co-borrower and co-owner of the Property and signatory to the applicable loan documents, choose at any future time to file a separate lawsuit for breach of contract. [Defendant] is potentially subject to separate, multiple, and potentially different judgments related to the Loan and Property.” (Mot. at p. 13:9-14.)

In the opposition, Plaintiff asserts that “Defendant argues that Mr. Rodriguez is indispensable because it exposes Defendant to the risk that Mr. Rodriguez will file his own lawsuit for breach of contract, thus, Defendant appears to argue that Mr. Rodriguez is an indispensable party to the breach of contract claim only.” (Opp’n at p. 5:5-8.) Plaintiff also asserts that even if James Rodriguez were an indispensable party to all of the claims, “the appropriate action would be for the court to order that Mr. Rodriguez be joined to the action, not to dismiss Plaintiff’s claims.” (Opp’n at p. 4:22-25.) Indeed, as set forth above, Code of Civil Procedure section 389, subdivision (b) provides that “[i]f a person as described in paragraph (1) or (2) of subdivision (a) cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable.” (Emphasis added.)

Defendant has not demonstrated in the motion that James Rodriguez cannot be made a party to this action. Based on the foregoing, the Court does not find that Defendant has met its burden of demonstrating that this action should be dismissed for Plaintiff’s failure to join an indispensable party.  

C.    Judicial Estoppel and Res Judicata and the Jurisdictional Arguments

Next, Defendant asserts that Plaintiff’s claims are barred by judicial estoppel and res judicata and on jurisdictional grounds. However, Defendant discusses only federal authorities in support of these arguments; Defendant does not discuss any California authorities on the issues raised to support the assertions made by Defendant. (See Mot. at p. 13:16-16:4.) Moreover, in light of the Court’s findings below, the issues raised are essentially moot.

D.    First Cause of Action for Breach of Contract

Next, Defendant asserts that Plaintiff’s cause of action for breach of contract fails because Defendant did not violate the contractual provision at issue. “The standard elements of a claim for breach of contract are (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178 [internal quotations omitted].)

As set forth above, Plaintiff alleges that “[i]n April 2011, Plaintiff received a Loan Modification Agreement through BAC Home Loans Servicing, LP,” and that Defendant “became the servicer of the modified mortgage.” (Compl., ¶¶ 8-9.) Plaintiff alleges that “[t]he loan modification stated that Plaintiff’s mortgage was permanently modified to a fixed loan, including terms and interest.” (Compl., ¶ 8.) Plaintiff further alleges that Defendant “sent out monthly statements to Plaintiff wherein the ‘regular monthly payment’ amount changed

considerably over the course of several years.” (Compl., ¶ 9.) In the first cause of action for breach of contract, Plaintiff alleges that “Defendant’s conduct, as alleged above, constitutes a breach contract under California law,” and that “[p]ursuant to the Loan Modification Agreement, the agreed upon terms were a fixed loan with a fixed interest rate. Defendant had an obligation to keep the monthly payments and interest constant.” (Compl., ¶ 14.)

            Defendant notes that its Special Interrogatory No. 6 to Plaintiff provides, “[s]tate, with particularity, each term of the MODIFICATION YOU contend was breached by SMS.” (Cahill Decl., ¶ 3, Ex. 29.) Plaintiff’s response to Defendant’s Special Interrogatory No. 6 provides, inter alia, as follows:

“Subject to and without waiving any of the aforementioned objections, Responding Party

responds as follows: The loan modification states, “The Borrower promises to pay the Unpaid Principal Balance, plus interest, to the order of the Lender. Interest will be charged on the Unpaid Principal Balance at the yearly rate of 2.000% from the 1st day of April 2011. The borrower promises to make monthly payments of principal and interest of U.S. $1,399.69 beginning on the 1st day of May 2011, and continuing thereafter on the same day of each succeeding month until principal interest are paid in full.” Defendant breached this provision.” (Cahill Decl., ¶ 3, Ex. 29.)

Defendant also provides the following testimony from Plaintiff’s deposition: “Q…So it looks like that’s paragraph 2 of the loan modification agreement, which is Exhibit 5. And it starts out, ‘The Borrower promises to pay the Unpaid Principal Balance, plus interest, to the order of the Lender.’…Q Okay. So this is the provision that you believe that Shellpoint violated. Is that correct? A Yes. Q Okay. And it violated that provision by fluctuating your payments. Is that correct? A Yes.” (Cahill Decl., ¶ 4, Ex. 30 (Flores Depo.[1]) at pp. 114:15-115:8.)

However, Defendant notes that Plaintiff also testified as follows: “Q…Do you recall any documents received from Shellpoint that had an interest rate above 2 percent? A I couldn’t remember.” (Cahill Decl., ¶ 4, Ex. 30 (Flores Depo.) at p. 115:15-17.) In addition, Defendant provides evidence that “per Shellpoint’s records, [Plaintiff and James Rodriguez] have been charged monthly principal and interest on the Loan of $1,399.69 since April 1, 2011.” (Knowles Decl., ¶ 43.) “Per Shellpoint’s records, it has not issued a monthly mortgage statement to Plaintiff that reflects a monthly payment with a principal and interest portion other than $1,399.69.” (Knowles Decl., ¶ 45.) In addition, “[p]er Shellpoint’s records, the Loan has had a fixed interest rate of 2.0% since April 1, 2011.” (Knowles Decl., ¶ 44.) Defendant indicates that “[t]he principal and interest portion of monthly payments on the Loan has not changed since April 1, 2011. Only the escrow portion of the monthly payment on the Loan has changed since April 1, 2011.” (Knowles Decl., ¶ 46.)

Defendant indicates that on April 21, 2011, BAC Home Loans Servicing, LP sent Plaintiff and James Rodriguez a letter, outlining the terms of the loan modification agreement. (Knowles Decl., ¶ 10, Ex. 5.) The letter lists a “breakdown of your new monthly payment” which includes a “P&I Payment” of $1,399.68 and “Escrow/Option ins” in the amount of $690.43, with a “New Monthly Payment” of “2,090.11.” (Ibid.)

Defendant asserts that Plaintiff agrees that inclusion of escrow in the monthly payment amount did not violate the loan modification agreement. Defendant cites to the following testimony from Plaintiff’s deposition: “Q Okay. Do you have any issue with the initial monthly payment of $2,090.11? A No. Q Okay. So, in other words, this payment amount is perfectly fine under the loan modification agreement. Correct? A Yes.” (Cahill Decl., ¶ 4, Ex. 30 (Flores Depo.) at p. 49:19-25.) Defendant also notes that the April 21, 2011 letter from BAC Home Loans Servicing, LP to Plaintiff states, inter alia, “[p]ayment subject to change. Review your agreement for more information.” (Knowles Decl., ¶ 10, Ex. 5, fn. 4.)

Defendant asserts that based on the foregoing, “the only portion of the monthly payment on the Loan that changed was escrow - which is not a violation of any contractual provision identified by Plaintiff.” (Mot. at p. 18:22-24.)

As noted by Defendant, in the opposition, Plaintiff does not contend that the interest rate or the principal and interest portion of the monthly payments changed. However, Plaintiff asserts that “Defendant argues that it did not breach the provisions of the loan modification. However, the loan modification did not require that payments be escrowed…Therefore, it was a breach of the loan modification to escrow Plaintiff’s payments without any justification…” (Opp’n at       p. 8:19-22.) But as noted by Defendant, Plaintiff does not allege in the Complaint that “it was a breach of the loan modification to escrow Plaintiff’s payments…” (Opp’n at p. 8:21.) Rather, as discussed, Plaintiff alleges that “[p]ursuant to the Loan Modification Agreement, the agreed upon terms were a fixed loan with a fixed interest rate. Defendant had an obligation to keep the monthly payments and interest constant.” (Compl., ¶ 14.)

As noted by Defendant, “[t]he pleadings delimit the issues to be considered on a motion for summary judgment. Thus, a defendant moving for summary judgment need address only the issues raised by the complaint; the plaintiff cannot bring up new, unpleaded issues in his or her opposing papers. To create a triable issue of material fact, the opposition evidence must be directed to issues raised by the pleadings.” (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1253 [internal quotations and citations omitted].)[2]

In light of the foregoing, the Court finds that Defendant has demonstrated that Plaintiff’s first cause of action is without merit, and that Plaintiff has failed to raise a triable issue of material fact as to this cause of action.

E.    Second Cause of Action for Violation of Civil Code section 2924c

Plaintiff’s second cause of action is for violation of Civil Code section 2924c. Civil Code section 2924c, subdivision (a)(1) provides in pertinent part as follows:

“Whenever all or a portion of the principal sum of any obligation secured by deed of trust or mortgage on real property or an estate for years therein hereafter executed has, prior to the maturity date fixed in that obligation, become due or been declared due by reason of default in payment of interest or of any installment of principal, or by reason of failure of trustor or mortgagor to pay, in accordance with the terms of that obligation or of the deed of trust or mortgage, taxes, assessments, premiums for insurance, or advances made by beneficiary or mortgagee in accordance with the terms of that obligation or of the deed of trust or mortgage, the trustor or mortgagor or their successor in interest in the mortgaged or trust property or any part thereof, or any beneficiary under a subordinate deed of trust or any other person having a subordinate lien or encumbrance of record thereon, at any time within the period specified in subdivision (e), if the power of sale therein is to be exercised, or, otherwise at any time prior to entry of the decree of foreclosure, may pay to the beneficiary or the mortgagee or their successors in interest, respectively, the entire amount due, at the time payment is tendered, with respect to (A) all amounts of principal, interest, taxes, assessments, insurance premiums, or advances actually known by the beneficiary to be, and that are, in default and shown in the notice of default, under the terms of the deed of trust or mortgage and the obligation secured thereby, (B) all amounts in default on recurring obligations not shown in the notice of default, and (C) all reasonable costs and expenses, subject to subdivision (c), that are actually incurred in enforcing the terms of the obligation, deed of trust, or mortgage, and trustee’s or attorney’s fees, subject to subdivision (d), other than the portion of principal as would not then be due had no default occurred, and thereby cure the default theretofore existing, and thereupon, all proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and deed of trust or mortgage shall be reinstated and shall be and remain in force and effect, the same as if the acceleration had not occurred.”

Pursuant to Civil Code section 2924c, subdivision (a)(2), “[i]f the trustor, mortgagor, or other person authorized to cure the default pursuant to this subdivision does cure the default, the beneficiary or mortgagee or the agent for the beneficiary or mortgagee shall, within 21 days following the reinstatement, execute and deliver to the trustee a notice of rescission that rescinds the declaration of default and demand for sale and advises the trustee of the date of reinstatement. The trustee shall cause the notice of rescission to be recorded within 30 days of receipt of the notice of rescission and of all allowable fees and costs.”

In the Complaint, Plaintiff alleges that “the Notice of Default indicates an amount due that was not verified by the Defendant prior to recording the Notice of Default. Specifically, on November 7, 2018, Defendants recorded a Notice of Default against Plaintiff’s property which provided that Plaintiff’s arrears were $27,092.56. This amount was incorrect and did not account

for the fixed rate modification that Plaintiff had received.” (Compl., ¶ 18.) Plaintiff alleges that “Defendant’s failure to provide accurate information regarding the amount due was an interference in the Plaintiff’s right to reinstate the loan and was a material violation of Civil Code § 2924c.” (Compl., ¶ 19.)

            In the motion, Defendant notes that Civil Code section 2924c, subdivision (e) provides that “[r]einstatement of a monetary default under the terms of an obligation secured by a deed of trust, or mortgage may be made at any time within the period commencing with the date of recordation of the notice of default until five business days prior to the date of sale set forth in the initial recorded notice of sale.” Defendant asserts that any reinstatement attempt here was made prior to the Notice of Default being recorded.

In the Complaint, Plaintiff alleges that “[o]n December 6, 2018, Defendant recorded a Notice of Default against Plaintiff’s property wherein they failed to verify the default amount before recording the Notice of Default.” (Compl., ¶ 11.) Defendant notes that Plaintiff also alleges that in April 2018, approximately eight months prior to the alleged recordation of the notice of default, Plaintiff attempted to make a reinstatement payment. (Compl., ¶ 10, emphasis added.) Defendant also provides evidence that on February 14, 2018, Plaintiff sent “an email to Shellpoint’s counsel, Mark Krause. In that email, Plaintiff made a repayment plan offer to Shellpoint…whereby Plaintiff offered to make a lump sum payment of $5,000, plus $1,500 per month until the arrears on the Loan were cured.” (Knowles Decl., ¶ 26, Ex. 20.) Plaintiff testified that, “Q Okay. So, in other words, you made an offer to Shellpoint for a payment plan to get this loan back on track. Right? A Yes. Q Okay. And you said Shellpoint did not accept it. A I did not receive a response, a neither ‘Yes’ or ‘No.’” (Cahill Decl., ¶ 4, Ex. 30 (Flores Depo.) at p. 73:17-24.)

            Defendant notes that February 14, 2018 is approximately ten months prior to December 6, 2018, the alleged date the notice of default was recorded. (Compl., ¶ 11.) Defendant asserts that “Plaintiff therefore cannot claim that any alleged inaccuracy in the Notice of Default was an ‘interference in the Plaintiff’s right to reinstate the loan’ as it was recorded ten months after her (inadequate) attempt to ‘reinstate.’” (Mot. at p. 21:7-19, emphasis omitted.)   

            Plaintiff does not respond to the foregoing arguments or address her second cause of action for violation of Civil Code section 2924c in the opposition. 

            Based on the foregoing, the Court finds that Defendant has demonstrated that Plaintiff’s second cause of action is without merit, and that Plaintiff has failed to raise a triable issue of material fact as to this cause of action.

F.     Third Cause of Action for Violation of Civil Code section 2924.17

Defendant asserts that Plaintiff’s cause of action for violation of Civil Code section 2924.17 fails because Plaintiff cannot show that Defendant violated this statute.

Civil Code section 2924.17, subdivision (a) provides that “[a] declaration recorded pursuant to Section 2923.5 or pursuant to Section 2923.55, a notice of default, notice of sale, assignment of a deed of trust, or substitution of trustee recorded by or on behalf of a mortgage servicer in connection with a foreclosure subject to the requirements of Section 2924, or a declaration or affidavit filed in any court relative to a foreclosure proceeding shall be accurate and complete and supported by competent and reliable evidence.” Civil Code section 2924.17, subdivision (b) provides that “[b]efore recording or filing any of the documents described in subdivision (a), a mortgage servicer shall ensure that it has reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose, including the borrower’s loan status and loan information.”

In support of the third cause of action, Plaintiff alleges that “[a]s evidenced by the Notice of Default, Defendant failed to review the evidence in this case prior to recording the Notice, in violation of Cal. Civ. Code § 2924.17. Plaintiff alleges that Defendant’s failure to review the evidence was a material violation of Civil Code § 2924.17 as Plaintiff has gotten varying and inaccurate information regarding the amount of the delinquency for months without any reliable assistance from Defendant. This amount was incorrect and did not account for the fixed rate modification that Plaintiff had received.” (Compl., ¶ 23.)

As set forth above, Defendant provides evidence that “[p]er Shellpoint’s records, the Loan has had a fixed interest rate of 2.0% since April 1, 2011.” (Knowles Decl., ¶ 44.) Defendant indicates that “[t]he principal and interest portion of monthly payments on the Loan has not changed since April 1, 2011. Only the escrow portion of the monthly payment on the Loan has changed since April 1, 2011.” (Knowles Decl., ¶ 46.)

Plaintiff further alleges in support of the third cause of action that “[o]n December 6, 2018, Defendant recorded a Notice of Default against Plaintiff’s property which provided that Plaintiff’s arrears were $27,092.56. However, this amount was not verified by Defendant prior to recording the Notice of Default.” (Compl., ¶ 24.) Defendant provides as Exhibit 22 its Request for Judicial Notice a “Notice of Default and Election to Sell Under Deed of Trust.” (Defendant’s RJN, Ex. 22.) The notice of default provides, inter alia, that “[t]his amount is $27,092.56 as of 12/3/2018, and will increase until your account becomes current.” (Ibid.) Defendant indicates that “[p]rior to recording the Notice of Default, Shellpoint verified that the Loan was in default.” (Knowles Decl., ¶ 34.) In addition, Defendant notes that the Notice of Default includes a “Declaration of Mortgage Servicer Pursuant to Civil Code § 2923.5,” which provides, inter alia, that “[t]he mortgage servicer has contacted the borrower pursuant to California Civil Code          § 2923.5(a)(2) to ‘assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure.’ Thirty (30) days, or more, have passed since the initial contact was made.” (Defendant’s RJN, Ex. 22.)

In the opposition, Plaintiff states in her declaration that “[o]n December 6, 2018, Defendant recorded a Notice of Default against my property wherein they stated that the amount owed on my monthly payments from February 1, 2018 to December 6, 2018 was $27,092.56.” (Flores Decl., ¶ 10.) Plaintiff also states that “[o]n December 17, 2018, Defendant sent a statement indicating that as of January 1, 2019, the ‘Reinstatement Amount’ was $23,672.55.” (Flores Decl., ¶ 11, Ex. F.) Plaintiff asserts that accordingly, “a triable issue of fact remains as to whether the Notice of Default was supported by competent and reliable evidence.” (Opp’n at     p. 9:14-15.) Defendant does not respond to this point in the reply.

Defendant also asserts in the motion that Plaintiff’s cause of action for violation of Civil Code section 2924.17 fails because it is premature. Defendant cites to Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 163, where the Court of Appeal noted that “[s]ections 2924.17 and 2923.55, then, place a burden on the foreclosing party to file a declaration with the notice of default, and provide requirements for the lender’s diligence prior to filing that declaration. Those provisions do not create a burden on the foreclosing party to prove anything in court, other than that the declaration required by section 2923.55, subdivision (c) was filed, and that necessary steps were taken before filing it. Lucioni does not argue that defendants failed in these duties. Here, in fact, at defendants’ request, the trial court took judicial notice of the declaration that section 2923.55, subdivision (c) required to be filed with the April 9, 2014, notice of default, as well as the deed and its assignments that defendants rely upon to substantiate RJB’s right to foreclose. The filing of the declaration and review of the assignments do not immunize RJB from a postforeclosure lawsuit, but, under the present statutory scheme, they preclude injunctive relief for a violation of the requirements of sections 2924.17 and 2923.55. Sections 2924.17 and 2923.55 do not create a right to litigate, preforeclosure, whether the foreclosing party’s conclusion that it had the right to foreclose was correct. If the Legislature wished to authorize as much, it could have authorized injunctive relief for a violation of section 2924(a)(6), but it did not.” (Emphasis in original.)

Defendant cites to the following testimony from Plaintiff’s deposition: “Q And I assume that the property has not been foreclosed upon. Correct? A Correct. Q And you are still living in the property, and no one’s tried to evict you. Correct? A Correct.” (Cahill Decl., ¶ 4, Ex. 30 (Flores Depo.) at p. 21:18-23.) Defendant thus asserts that the third cause of action is premature, per Lucioni.

In the opposition, Plaintiff asserts that “Defendant also argues that Plaintiff’s claim is premature, however, under § 2924.12, where a NOD has been improperly recorded, the only way to remedy this violation is to rescind the NOD, which has not been done in this case…Therefore, Plaintiff’s claim is not premature.” (Opp’n at p. 9:20-10:4.) But Plaintiff does not cite to any binding legal authority in support of this assertion. (Ibid.) Plaintiff does not address the Lucioni case, which provides that “[s]ections 2924.17 and 2923.55 do not create a right to litigate, preforeclosure, whether the foreclosing party’s conclusion that it had the right to foreclose was correct.” (Lucioni v. Bank of America, N.A., supra, 3 Cal.App.5th at p. 163 [emphasis omitted].) 

Based on the foregoing, the Court finds that Defendant has demonstrated that Plaintiff’s third cause of action is without merit, and that Plaintiff has failed to raise a triable issue of material fact as to this cause of action.

G.    Fourth Cause of Action for Unfair Business Practices

Lastly, Defendant asserts that Plaintiff’s fourth cause of action fails because it is predicated on a meritless breach of contract claim. In support of the fourth cause of action, Plaintiff alleges that “Defendant’s breach of contract constitutes unlawful business practices under California Business and Professions Code § 17200 et seq.” (Compl., ¶ 28) As set forth above, the Court finds that Defendant has demonstrated that Plaintiff’s first cause of action for breach of contract is without merit, and that Plaintiff has failed to raise a triable issue of material fact as to this cause of action. 

Plaintiff also alleges in support of the fourth cause of action that “Defendant’s negligence constitutes unlawful business practices under California Business and Professions Code § 17200 et seq.” (Compl., ¶ 29.) In the motion, Defendant notes that Plaintiff does not plead any negligence cause of action against Defendant. In addition, Defendant asserts that Plaintiff’s UCL cause of action based upon negligence is meritless. Defendant cites to Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 915, where the California Supreme Court “address[ed] the issue dividing the lower courts: Does a lender owe the borrower a tort duty sounding in general negligence principles to (in plaintiff’s words) ‘process, review and respond carefully and completely to [a borrower’s] loan modification application,’ such that upon a breach of this duty the lender may be liable for the borrower’s economic losses—i.e., pecuniary losses unaccompanied by property damage or personal injury?” The California Supreme Court “conclude[d] that there is no such duty, and thus Wells Fargo’s demurrer to plaintiff’s negligence claim was properly sustained.” (Ibid.)

Plaintiff does not address the foregoing points in the opposition.

Based on the foregoing, the Court finds that Defendant has demonstrated that Plaintiff’s fourth cause of action is without merit, and that Plaintiff has failed to raise a triable issue of material fact as to this cause of action.

Conclusion

Based on the foregoing, Defendant’s motion for summary judgment is granted. The Court orders Defendant to file and serve a proposed judgment within 10 days of the date of this Order.

Defendant is ordered to provide notice of this Order.

DATED:  August 21, 2023                            

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court