Judge: Theresa M. Traber, Case: 21STCV40920, Date: 2023-04-11 Tentative Ruling
Case Number: 21STCV40920 Hearing Date: April 11, 2023 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department
47
HEARING DATE: April 11, 2023 TRIAL DATE: August 1,
2023
CASE: Alberto Juarez Jr., et al. v. Ocwen Loan Servicing, LLC, et al.
CASE NO.: 21STCV40920
DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
MOVING PARTY: Defendants,
Ocwen Loan Servicing, LLC, PHH Mortgage Corporation, Deutsche Bank National
Trust Company, Mortgage Pass-Through Certificates, Series 2006-NC1
RESPONDING PARTY(S): Plaintiff Maria Dolores Juarez
STATEMENT OF
MATERIAL FACTS AND/OR PROCEEDINGS:
In her complaint filed on November
5, 2021, Plaintiff alleges she entered into a loan agreement with Century
Mortgage secured by the Property through a Deed of Trust. In 2019, Plaintiff
began having trouble making her mortgage payments and applied for a loan
modification with PHH. Plaintiff continued to follow up with attempts for a
loan modification, but PHH could not provide Plaintiff with any consistent
information. Soon after this, Defendant Western Progressive recorded a Notice
of Default and Election to Sell Under Deed of Trust. Plaintiff asserts the
following causes of action: (1) wrongful foreclosure; (2) violation of
Homeowner Bill of Rights; and (3) California Business & Professional Code §
17200.
On August 16, 2022, Plaintiff
Alberto Juarez dismissed the complaint without prejudice as to himself. Therefore,
Maria Dolores Juarez is the sole remaining Plaintiff.
Defendants bring this motion for summary judgment
or, in the alternative, summary adjudication on the grounds that Plaintiff
fails to raise a triable issue of material fact, as no foreclosure sale has
occurred. Because no sale has occurred, Plaintiff’s only remedy under the
Homeowner Bill of Rights statutes is injunctive relief, and Defendants have
complied with all their statutory obligations or remedied any violation through
multiple subsequent loan modification offers made to Plaintiff.
TENTATIVE
RULING:
Defendant’s Motion for Summary Judgment is GRANTED.
DISCUSSION:
Plaintiff’s Evidentiary Objections
Plaintiff’s
evidentiary objections are overruled.
Motion for Summary Judgment
1.
Relevant
Undisputed Facts
Plaintiff owns the subject real property located at 6120
Monterey Road, Los Angeles, CA 90042 (“Property”). (UMF No. 1)
On or about September 15, 2005, Plaintiff obtained a
refinance loan from New Century Mortgage Corporation in the original principal
amount of $465,600 (“Loan”), which was secured by a deed of trust (“Deed of
Trust”) recorded against the Property. (UMF No. 2) On June 12, 2013, an
Assignment of Deed of Trust was recorded assigning the Deed of Trust from New
Century Mortgage Corporation to Deutsche Bank, as Trustee. (UMF No. 3) On March
11, 2020, a Substitution of Trustee was recorded by PHH as servicer for
Deutsche Bank, as Trustee substituting Western Progressive, LLC (“Western
Progressive”) as trustee under the Deed of Trust. (UMF No. 4)
In late 2019, Plaintiff suffered financial difficulties and
fell into default on the Loan. (UMF No. 5.) On January 13, 2020, PHH contacted
Plaintiff by phone to assess Plaintiff’s financial situation and explore
options for her to avoid foreclosure relating to the Loan. (UMF No. 6.) On
March 13, 2020, a Notice of Default and Election to Sell Under Deed of Trust
(“NOD”) was recorded by Western Progressive relating to the Loan because the
Loan was in default and due for the September 1, 2018 payment. (UMF No. 8.)
Plaintiff did not have a complete application for a first lien loan
modification pending with PHH when the NOD was recorded. (UMF No. 9.)
Thereafter, on or about March 27, 2020, Plaintiff applied
for a loan modification relating to the Loan. (UMF No. 10.) On or about March
30, 2020, PHH sent Plaintiffs a letter dated March 30, 2020 advising them that
PHH had reviewed Plaintiffs’ application and documents submitted for a
potential loan modification and determined that the application was complete as
of March 27, 2020. (UMF No. 11.)
On or about April 6, 2020, PHH sent Plaintiff a letter dated
April 6, 2020, advising Plaintiff that she was approved for a Trial Period Plan
(“TPP”) and requiring that Plaintiff accept the TPP by signing and returning a
Mortgage Assistance Acceptance Form attached to the TPP by 05/01/2020 and
making a first TPP payment of $2,954.36 by 05/01/2020. (UMF No. 12.) On or
about June 19, 2020, PHH sent Plaintiff a letter dated June 19, 2020 entitled
Trial Period Plan Extension Agreement, which extended the TPP to 10/31/2020.
(UMF No. 13.)
On or about July 22, 2020, PHH sent Plaintiffs a letter
dated July 22, 2020, entitled Approval for Permanent Modification, which
required Plaintiffs to sign and return the enclosed Loan Modification Agreement
(the “July 2020 Modification”) by 08/09/2020. (UMF No. 14.) Plaintiff did not
accept the July 2020 Modification or perform under the terms of that agreement.
(UMF No. 15.) On or about March 16, 2021, PHH sent Plaintiff a letter dated
March 16, 2021 entitled Decision On Your Request For Mortgage Assistance
notifying Plaintiff that she was no longer eligible for the loan modification
offer that was sent to her because she failed to return the final modification
agreement within the required timeframe. (UMF No. 16.) Plaintiff did not appeal
the March 16, 2021 denial. (UMF No. 17.)
On or about April 12, 2021, PHH sent Plaintiffs a letter
dated April 12, 2021 advising Plaintiff that she was approved for a TPP and
requiring that Plaintiff accept the TPP by signing and returning a Mortgage
Assistance Acceptance Form attached to the TPP by 05/01/2021 and making a first
TPP payment of $2,934.67 by 05/01/2021. (UMF No. 18.) Plaintiff did not accept
the April 12, 2021 TPP offer or perform under the terms of that offer. (UMF No.
19.)
On or about September 3, 2021, PHH sent Plaintiff a letter
dated September 3, 2021 advising Plaintiff that she was approved for a TPP and
requiring that Plaintiff accept the TPP by signing and returning a Mortgage
Assistance Acceptance Form attached to the TPP by 10/01/2021 and making a first
TPP payment of $3,271.89 by 1001/2021. (UMF No. 20.) Plaintiff did not accept
the September 3, 2021 TPP offer or perform under the terms of that offer. (UMF
No. 21.)
Since February 7, 2022, Plaintiff has not applied for any further
loan modification or other foreclosure avoidance options. (UMF No. 26.) The
Loan remains in default. (UMF No. 27.) No foreclosure sale has taken place to
date. (UMF No. 28.)
2.
Legal
Standard
The purpose of a motion for summary judgment or summary adjudication
“is to provide courts with a mechanism to cut through the parties’ pleadings in
order to determine whether, despite their allegations, trial is in fact
necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section
437c, subdivision (c), requires the trial judge to grant summary judgment if
all the evidence submitted, and ‘all inferences reasonably deducible from the
evidence’ and uncontradicted by other inferences or evidence, show that there
is no triable issue as to any material fact and that the moving party is
entitled to judgment as a matter of law.” (Adler v. Manor Healthcare
Corp. (1992) 7 Cal.App.4th 1110, 1119.)
“On a motion for summary judgment, the initial burden is
always on the moving party to make a prima facie showing that there are no
triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005)
128 Cal.App.4th 1510, 1519.) A defendant or cross-defendant moving for
summary judgment or summary adjudication “has met his or her burden of showing
that a cause of action has no merit if the party has shown that one or more
elements of the cause of action . . . cannot be established, or that there is a
complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd.
(p)(2).) “Once the defendant or cross-defendant has met that burden, the
burden shifts to the plaintiff or cross-complainant to show that a triable
issue of one or more material facts exists as to the cause of action or a
defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).) “If the
plaintiff cannot do so, summary judgment should be granted.” (Avivi v.
Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463,
467.) “When deciding whether to grant summary judgment, the court must
consider all of the evidence set forth in the papers (except evidence to which
the court has sustained an objection), as well as all reasonable inferences
that may be drawn from that evidence, in the light most favorable to the party
opposing summary judgment.” (Id. at p. 467; Code Civ. Proc., §
437c, subd. (c).)
3.
First Cause
of Action for Wrongful Foreclosure
Plaintiffs concede that the first cause of action for
wrongful foreclosure cannot be established. Plaintiff states that she will file
a request for dismissal for this cause of action. However, as this request for
dismissal has not yet been filed, the Court grants the motion for summary
judgment as to this cause of action.
4.
Second Cause
of Action for Violation of Homeowner Bill of Rights
As framed by the pleadings, Plaintiffs allege that
Defendants violated the Homeowner Bill of Rights by dual tracking the loan
modification review and non-judicial foreclosure proceedings. In addition,
Plaintiffs allege that Defendants did not provide Plaintiffs with requisite
notices prior to recording the Notice of Default on Plaintiff’s property.
(Complaint ¶ 33.)
A.
Dual
Tracking
Civil Code section 2923.6, subdivision (c) prohibits “dual
tracking” by lenders. If a borrower submits a complete application for a first
lien loan modification, a lender shall not record a notice of default while the
complete first lien loan modification is pending. (Civil Code § 2923.6, subd.
(c).)
Defendants put forward evidence that the Notice of Default
was recorded on March 13, 2020, and, at the time it was recorded, Plaintiff did
not have a complete application for a first lien loan modification pending with
PHH. (UMF Nos. 8-9; Handville Decl. ¶¶ 9-10, Ex. 3; RJN Ex. 4.) On March 27,
2020, Plaintiff applied for a loan modification. (UMF No. 10; RFAs No. 7,
Handville Decl. ¶ 11.)
This evidence sufficiently meets Defendant’s burden of
showing that no dual tracking occurred because Plaintiff had not yet submitted
a complete application for a loan modification at the time that the Notice of
Default was recorded. Thus, section 2923.6 does not apply. These dates are
undisputed, and Plaintiff does not put forward any evidence to create a triable
dispute of material fact as to the dual tracking allegations.
Plaintiff attempts to argue in the opposition that
Defendants failed to confirm that the application was complete before filing
the Notice of Default. Defendants put
forward evidence, however, that the loan modification application was not
complete at the time. There is no requirement that loaners ensure that
borrowers complete their application before they file a Notice of
Default, only that they do not record the default while the modification
application is pending.
As such, Defendants have shown there is no triable issue of
material fact as to whether Defendants engaged in dual tracking.
B.
Proper
Notice
Civil Code section 2923.5 states that a mortgage servicer
shall not record a Notice of Default until 30 days after either: (a) initial
contact is made by telephone or in person to assess the borrower’s financial
situation and explore options for the borrower to avoid foreclosure; or (b) 30
days after satisfying the due diligence requirements in Civil Code section 2923.5.
Defendants put forward evidence that PHH contacted Plaintiff
by phone on January 13, 2020 to assess Plaintiffs’ financial situation and
explore options for her to avoid foreclosure. (UMF Nos. 6-7; Handville Decl. ¶
7, Ex. 2; Juarez Decl. ¶ 4.) This is undisputed by Plaintiff.
The only disputed fact appears to be whether Defendants provided
the toll-free number for HUD in this initial contact, as required by section
2923.5. Defendants state that Plaintiff was provided the toll-free telephone
number for HUD and provide evidence of the call-log that seems to indicate that
the HUD number was advanced to Plaintiff. (UMF Nos. 6-7; Handville Decl. ¶ 7,
Ex. 2; Juarez Depo. P. 27:1-22.) However, this fact is disputed by Plaintiff,
who states that she was not provided with the HUD number in this initial phone
call. (Juarez Decl. ¶ 5.)
Defendant argues that, even if this phone number was not
provided, any of the alleged violations are immaterial because Defendant subsequently
remedied any violations because Plaintiff was later approved for multiple loan
modifications by PHH. (UMF Nos. 14, 22; RFAs Nos. 16-17, 28; Handville Decl. ¶
16, 24, Ex. 7, 11.) It is undisputed by Plaintiff that Defendants subsequently
approved Plaintiff for loan modifications.
Neither the HBOR nor California case law expressly defines
the term ‘material’ for purposes of section 2924.12. However, federal district
courts applying California law have held that a violation is material if it
affected the borrower’s loan obligations, disrupted the loan-modification
process, or otherwise harmed the borrower. (Cardenas v. Caliber Home Loans,
Inc. (2017) 281 F.Supp.3d 862, 870.) Various cases have held that the
notice requirement was properly met when lenders have reviewed loan
modification applications. (See Schmidt v. Citibank, N.A. (2018)
28 Cal.App.5th 1109, 1121 [discussing cases that have held that the notice
requirement was properly met].) Particularly, in a recent case, Billesbach
v. Specialized Loan Servicing LLC (2021) 63 Cal.App.5th 830, the borrower
filed an action under the HBOR, and the lender subsequently reviewed the
borrower’s application for a loan modification and offered him a trial-period
modification plan. (Id. at 836-837.) The borrower did not accept the modification,
but the court concluded that the servicer had complied with the HBOR by
considering the borrower’s loan modification, finding that this measure
“satisfied HBOR’s purpose to ensure that borrowers have meaningful opportunity
to obtain loss-mitigation options.” (Id. at 846.)
Defendants’
evidence of the offers of the subsequent loan modification offers meets
Defendants’ burden of showing that the failure to provide the toll-free number
for HUD was immaterial, as they subsequently gave Plaintiff a meaningful
opportunity to obtain a loan modification.
Plaintiff
does not address this argument and has not put forward any evidence showing a
dispute over a material fact.
Thus,
summary judgment is granted as to the second cause of action.
5.
Third Cause
of Action for Violation of the Unfair Competition Law (UCL)
As framed by the pleadings, Plaintiff alleges that Defendants
have violated the California Predatory Lending statutes of California Financial
Code § 4970 et seq because the loan terms were not adequately disclosed and
were not financially feasible for the borrower. (Complaint ¶ 48.) Plaintiff also alleges that this cause of
action is based upon the violations of Civil Code § 2923.5. (Complaint ¶ 49.)
Defendants argue that Plaintiff does not have standing to
assert this cause of action because if the alleged injury is caused by a
borrower’s own default, the borrower lacks standing to assert a cause of action
under the UCL. (See Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216
Cal.App.4th 497, 523.) Although Defendants have put forward evidence that
Plaintiff had defaulted on her loan prior to the alleged misconduct of
Defendants, this cause of action also alleges predatory lending practices that
caused Plaintiff to default.
Defendants argue that the predatory lending claim is
time-barred, that the loan is not covered under the Financial Code, and the
claim is inapplicable to Defendants because they did not originate the loan.
The loan was indisputably provided to Plaintiff in 2005.
(UMF No. 2.) Under Code of Civil Procedure section 338(a), an action “upon a
liability created by statute, other than a penalty or forfeiture” that does not
provide its own statute of limitations must be commenced within 3 years. This
action originated in 2021. Thus, the action is time-barred.
A covered loan under this provision means “a consumer loan
in which the original principal balance of the loan does not exceed the most
conforming loan limit for a single-family first mortgage loan established by
the Federal National Mortgage Association in the case of a
mortgage or deed of trust…” (Fin. Code § 4970.) Defendants put forward evidence
that the Loan at issue had an original principal balance of $465,600. (UMF No.
2.) However, at the time of the Loan’s origination in 2005, the Federal
National Mortgage Association’s conventional loan limit for a single-unit
residence was $359,650. (UMF No. 29; RJN Ex. 5.) This evidence meets
Defendant’s burden that the loan provided to Plaintiff was not subject to
section 4970.
Further, a cause of action for failure to ensure that the
borrower will be able to make the scheduled payments falls against the “person
who originates covered loans.” Indisputably, New Century Mortgage Corporation
originated this loan. (UMF No. 2.) They
are not a party to this action.
Plaintiff does not dispute any of these facts. Plaintiff
does not address this argument in her opposition, but instead argues that the
cause of action under the UCL is predicated on violation of the HBOR.
A cause of action for
violation of UCL fails where it is predicated on a violation of another law
that also fails. (Wolski v. Fremont Investment & Loan (2005) 127
Cal.App.4th 347, 357.) As discussed above, Plaintiff’s claims for violation of
HBOR fail. Thus, the UCL claim, as based on the violation of the HBOR also
fails. Thus, the third cause of action also fails.
Accordingly,
Defendants’ motion for summary judgment is granted.
Moving party to give notice, unless waived.
IT IS SO ORDERED.
Dated: April 11, 2023 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by
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right to be present at the hearing, and you should be aware that the court may
not adopt the tentative, and may issue an order which modifies the tentative
ruling in whole or in part.