Filed 3/16/20 Curl v. CitiMortgage, Inc. CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

CHANTELL CURL,

Plaintiff and Appellant,

v.

CITIMORTGAGE, INC., et al.,

Defendants and Respondents.

A155665

(Contra Costa County

Super. Ct. No. MSC16-02060)

Chantell Curl (Curl) filed this lawsuit against CitiMortgage, Inc. and its affiliates (Citi) to prevent a non-judicial foreclosure of her property and for damages. After sustaining a demurrer to Curl’s third amended complaint without leave to amend, the court entered judgment in favor of Citi. On appeal, Curl contends she stated causes of action for negligence, statutory violations of the Homeowner Bill of Rights, commonly referred to as the HBOR (Civil Code §§ 2920.5, 2923.4–7, 2924, 2924.9–12, 2924.15, 2924.17–20), and breach of contract. We reject Curl’s contentions and affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

I. The Loan

In 2008, Curl obtained a $393,820 loan from Stearns Lending, Inc., which was evidenced by a promissory note and secured by a deed of trust encumbering Curl’s property in Antioch (the property). The deed of trust was assigned to Citi in 2011.

II. The Federal Action

In March 2014, Curl filed a complaint against Citi in federal district court, seeking damages and equitable relief for Citi’s alleged mishandling of her application for a loan modification. (Curl v. CitiMortgage, Inc., No. 14-cv-01829-VC.) In her pleading, Curl alleged that she filed for Chapter 13 bankruptcy protection in 2011, fell behind on her mortgage loan payments in 2012, and submitted an application for a loan modification in June 2012. Citi accepted the application, but then gave Curl the “runaround” for the next several months.

Curl attempted to allege causes of action for misrepresentation, breach of the warranty of good faith and fair dealing, negligence, and unfair business practices. She alleged further that she was entitled to judicial declarations that she did not receive proper notice of the interest rate that would apply to her loan and that Citi should have granted her a loan modification. In her prayer, Curl sought an unspecified amount of general and punitive damages, a modification of her loan to a “reasonable amount,” and an order enjoining Citi from selling or encumbering her property.

On September 28, 2015, Curl’s federal case was dismissed with prejudice “on judicial estoppel grounds” after the court found she failed to list her mortgage fraud claim on her bankruptcy schedule.

On September 29, 2015, Curl’s attorney notified her by email that Citi had denied her request for a loan modification on September 25, 2015 and attached a copy of the denial letter. In his email, the attorney stated that Curl’s application was denied because her loan payments were more than 12 months overdue and because there was an “irreconcilable discrepancy” in her application. Regarding the discrepancy, Curl’s attorney reminded her that Citi had previously determined that Curl lied about rentals at her property. Curl’s attorney opined that “we have come to the end of the road,” but pointed out that “we have been able to at least keep you in your home without paying for a year and a half . . . .”

The September 29 email outlined possible next steps for Curl, including challenging the dismissal of her federal case, which was not advised, selling her property, or submitting more requests for a loan modification. On this last point, the attorney stated: “Technically you can do that but the law is that there must be a material change in your financial situation for the Bank to reconsider you for more loan mods. As you know there have been many loan mods filed on your behalf.”

III. The Notice of Default

On May 12, 2016, National Default Servicing Corporation, acting as trustee for Citi, issued a Notice of Default and Election to Sell under Deed of Trust, which was recorded the next day. The notice stated that Curl’s loan was in arrears in the amount of $145,381.48 and the amount due would continue to increase until her account became current.

A declaration attached to the default notice stated that Citi had contacted Curl to assess her “ ‘financial situation and explore options for [her] to avoid foreclosure,’ ” and 30 days or more had passed since “the initial contact was made.”

IV. The Present Action

A. The Complaint

Curl secured new counsel, and, in July 2016, she filed the present action in Sacramento superior court. The crux of her complaint was that Citi violated the law because it “recorded foreclosure documents while [Curl] was being reviewed and would have been approved for loss mitigation options that would have prevented the foreclosure recordings.”

According to the complaint allegations, in 2015, Curl “ran into financial troubles that ultimately led to her falling behind on [her] mortgage.” She contacted Citi to inquire about loan mitigation options and was invited to submit a loan modification application, which she completed on May 1, 2015. Over the next several months, Citi and Curl communicated about the application. However, on May 13, 2016, Citi’s agent recorded a notice of default against Curl’s property without contacting her 30 days before to discuss mitigation options. Thereafter, Citi continued to review Curl’s pending application while it simultaneously “tracked” the foreclosure.

With these allegations, Curl attempted to state causes of action for: (1) negligence; (2) a violation of section 2923.6, by “dual tracking” Curl’s loan; (3) a violation of section 2923.5, by failing to contact Curl before recording foreclosure documents; and (4) breach of contract.

In September 2016, Citi filed an unopposed motion to transfer Curl’s case to its proper venue in Contra Costa County, which was granted the following month. Then Citi filed a demurrer to the complaint on the ground that Curl failed to allege facts to state any cause of action.

B. The First Amended Complaint

In December 2016, Curl filed a first amended complaint instead of opposing Citi’s demurrer. Curl made the same legal claims but alleged different facts, as follows: In 2015, Curl “ran into financial troubles,” fell behind on her mortgage, and “was invited to submit a loan modification application.” This loan modification application was denied in “late 2015 with virtually no explanation of why,” but Curl was “invited” to submit another application, which she did in January 2016. Citi confirmed receipt of Curl’s completed application and never told her that the application would not be reviewed if she had been “ ‘denied’ ” in the past. Over the next several months, Citi requested additional information, which Curl provided. Then, on May 14, 2016, the notice of default was recorded against Curl’s property notwithstanding that her 2016 loan modification application was still pending.

Citi filed a demurrer to the first amended complaint, which Curl opposed. Prior to a hearing, the parties stipulated that Curl could file a second amended complaint.

C. The Second Amended Complaint

In her November 2017 second amended complaint, Curl attempted to allege the same four causes of action as her previous complaints. Again though, she changed the factual basis for her claims, this time drawing on events dating back to 2011.

In the factual background section of her complaint, Curl alleged the following facts, which she incorporated into every cause of action: In 2011, Curl filed a Chapter 13 bankruptcy, which did not include her mortgage loan. In 2012, Curl had financial trouble that led to her falling behind on her mortgage payments and was invited to submit a loan modification application. She submitted her application in October 2012, but never received a formal response. She contacted Citi and was invited to re-apply. That application was reviewed but denied “in late 2015” because Curl’s loan had “more than 12 months of arrearages and an irreconcilable difference was found in the application.” Curl contacted Citi again and was invited to submit another application, which she did in January 2016. Citi requested additional information, which Curl provided. This application was still pending when the notice of default was recorded against Curl’s property in May 2016. Curl “was never contacted at least 30 days before [the default notice was recorded] to discuss mitigation options or HUD counseling.”

Curl alleged that a decision was never made on her 2016 application, but she was invited to submit another application, which she completed in April 2017. The following month, that application was denied “again based on the ‘12-month rule’ and a contention that [Citi] was unable to verify the income though [Curl] provided everything [Citi] requested.” As “a result of” Citi’s conduct, Curl suffered severe stress and harassment by those who became aware that her property had been listed for foreclosure. Moreover, if she had been “given a fair opportunity,” she would have “been able to mitigate the foreclosure.”

In her first cause of action for negligence, Curl alleged Citi breached its duty to ensure that “appropriate safeguards” were in place prior to any foreclosure by violating statutes that protect homeowners from dual tracking and otherwise wrongful disclosures and “by failing to reasonably allow [Curl] a fair opportunity to be reviewed in accordance” with these statutory requirements.

As further support for her negligence claim, Curl alleged that Citi denied her “request for a loan modification” because her loan was more than 12 months behind when Citi was “the only reason the delinquency . . . lasted longer than 12 months,” and that Citi’s acts deprived her “of the possibility of reaching a resolution prior to the sale.” Curl admitted “there was no guarantee the modification would be granted had the loan been properly processed,” but she alleged that “the mishandling of the documents deprived [her] of the possibility of obtaining the requested relief.” And, “[a]s a direct and proximate result” of Citi’s actions, she sustained damages, including “excessive interest accumulation, negative amortization, loss of equity, destruction of credit standing, pain, suffering, and emotional distress.”

In her second cause of action, Curl alleged that Citi violated section 2923.6 by recording a notice of default against her property notwithstanding that her loan modification application was pending. Her third cause of action alleged that Citi violated section 2923.5 because it did not “even” contact her before the notice of default was recorded and it was threatening to sell her home. Curl’s final cause of action alleged that Citi breached a “verbal and implied contract” pursuant to which it “agreed to review [Curl’s] loan modification application in good faith before foreclosing on the home.” Notably, Curl did not allege that a foreclosure actually occurred, or that Citi took any step toward effectuating a non-judicial foreclosure after the 2016 notice of default was recorded.

In her prayer, Curl sought damages in excess of $25,000, punitive damages, attorney fees, restitution, declaratory relief and an injunction “barring the defendants from asserting any financial, possessory or other interest of any kind in the subject property.”

D. The Demurrer to the Second Amended Complaint

In December 2017, Citi filed a demurrer to the second amended complaint. A hearing was held on May 25, 2018. A tentative ruling to sustain the demurrer was not contested and became the court’s order.

In its order, the court made two preliminary rulings. First, it granted Citi’s request for judicial notice of recorded documents pertaining to Curl’s property as well as pleadings and orders filed in her federal action against Citi. Second, any claim that Citi mishandled Curl’s loan modification application between 2012 through 2014 was barred by res judicata. Thus, if Curl were to file another amended complaint, the court ordered her not to “base any of her claims on her allegations of mishandling during that time period.”

Then the court sustained the demurrer to Curl’s negligence claim with leave to amend, finding that she failed to allege facts to establish a clear duty was breached, causation or damages. The court explained that Curl’s theory of negligence was “not at all clearly identified” because she (1) failed to distinguish between conduct that occurred before 2014, which was barred by res judicata, and later conduct, (2) sometimes appeared to be alleging purely statutory duties, which would mean that her negligence claim added nothing to her statutory claims, and (3) may have been attempting to allege that Citi violated a distinct common law duty by mishandling her application(s).

Moreover, the court found, Curl would have to allege that the mishandling of her application(s) caused her damage by “spell[ing] out more clearly what she says were the negligent acts or omissions,” and “explain[ing] how those acts and omissions resulted in the harm of which she complains.” The court reasoned that “losing a ‘possibility’ is not cognizable harm if the ‘possibility’ would not have been fruitful—or unless harm would have occurred in some identifiable collateral manner, such as loss of an opportunity for relief elsewhere.”

Next, the court sustained the demurrer to Curl’s second cause of action for violating section 2923.6 without leave to amend. The court reasoned that former section 2923.6, which was in effect when Curl filed this action, was repealed by its own terms on January 1, 2018, and Curl’s rights under this statute had not vested prior to the effective date of its repeal.

The court also sustained the demurrer to Curl’s section 2923.5 claim, but it granted her leave to amend. It found that Curl did not state a valid claim by making general allegations that Citi had “ ‘recorded foreclosure documents without even contacting’ ” her, and that it was “threatening to sell the home.” Curl would need to allege facts to prove that the failure to contact her caused her harm or had some material consequence.

Finally, the demurrer to Curl’s breach of contract claim was sustained with leave to amend. The court identified two independent problems with this claim. First, Curl’s allegation that she had a “verbal and implied contract” ran afoul of the statute of frauds. (See §§ 1624, 2922.) Second, Curl had not alleged facts to prove she had a contract, such as when the agreement was reached or the agreed upon terms.

E. The Third Amended Complaint

In June 2018, Curl filed her operative third amended complaint, which omitted her cause of action for violating section 2923.6. She did not otherwise alter her theories of liability but did add a few allegations. Notwithstanding the court’s res judicata finding, Curl also continued to recite and apparently rely on pre-2014 conduct to support her claims.

In her background section, Curl added an allegation that if she had been “given a fair opportunity [for a review of her applications] she would have either qualified for a loan modification or have been able to mitigate the foreclosure.”

Curl amended her negligence claim by adding the qualifier that Citi violated its statutory duties “[s]ince 2014.” She also refined her allegations that Citi breached its duty to review Curl’s “requests for assistance in a timely manner,” adding that it was “[d]ue to [Citi’s] unreasonable delay from 2014 to present [that her] loan became more than 12 months behind.” According to this theory, Curl was denied a loan modification because she was 12 months or more behind in her payments, but the only reason she was behind in her payments was because of Citi’s unreasonable delay since 2014 in conducting its review. Regarding causation and damages, Curl added allegations that if Citi had handled her applications properly, she either would have received a loan modification, or she would have been able to “mitigate the foreclosure” another way, such as by pursuing a “short sale.”

Curl amended her section 2923.5 claim by adding allegations to the effect that if Citi had contacted her before the default notice was recorded, she “could have easily apprised” Citi that her loan modification was under review and that would have “prevented the publicly recorded and greatly credit-disparaging Notice of Default.” Curl continued to acknowledge that a loan modification was not guaranteed, but she added an allegation on information and belief that “she would have qualified for a loan modification” because of her “stable income and sufficient hardship.”

Finally, Curl amended her cause of action for breach of contract to allege the following facts: In “late 2015,” Curl and Citi entered into a “verbal agreement” that a foreclosure recording would not take place while she was under review for a loan modification, and an “implied contract” that Citi would review her application in good faith. Curl relied on Citi’s promises and forewent other loss mitigation options. Yet Citi “recorded foreclosure documents and threatened to sell the property while reviewing the loss mitigation options” in violation of the parties’ contract, causing Curl to sustain damages, which included “excessive interest accumulation, negative amortization, loss of equity, loss of property, and destruction of credit standing, in an amount to be shown at trial.”

F. The Demurrer to the Third Amended Complaint

In July 2018, Citi filed a demurrer to the third amended complaint and a hearing was set for August 24. The court issued a tentative ruling sustaining the demurrer without leave to amend, which was not contested and became the ruling of the court.

Again, the court took judicial notice of county recorded documents as well as pleadings and orders from Curl’s federal action. The court also observed that both parties had briefed this matter as if there had been no prior order and then stated: “In fact, . . . the Court’s ruling on the demurrer to plaintiff’s second amended complaint is quite sufficient to dispose of the present demurrer, because nothing material has changed.”

The court found that Curl failed to correct any deficiency the court identified in its prior order. Specifically, she did not allege that “violations were ‘material’, in the sense that but for the violations, plaintiff would have succeeded in avoiding foreclosure.” Nor did she make any new material allegation, either in her amended pleading or her opposition to the demurrer. Ultimately, the court concluded: “So what’s new and different in the [third amended complaint], that would lead to a different result on this demurrer? The answer is: Nothing. The [third amended complaint] is demurrable for all the same reasons that the demurrer to the second amended complaint was sustained.”

DISCUSSION

“We review an order sustaining a demurrer de novo to determine whether the complaint states facts sufficient to constitute a cause of action. [Citations.] We construe the complaint ‘liberally . . . with a view to substantial justice between the parties’ [citation] and treat it ‘ “ ‘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.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” ’ ” (Rufini v. CitiMortgage, Inc. (2014) 227 Cal.App.4th 299, 303–304.)

I. Negligence

“To state a cause of action for negligence, a plaintiff must allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff’s damages or injuries. [Citation.] Whether a duty of care exists is a question of law to be determined on a case-by-case basis.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62 (Lueras).) “ ‘We start by identifying the allegedly negligent conduct by [defendant] because our analysis is limited to “the specific action the plaintiff claims the particular [defendant] had a duty to undertake in the particular case.” ’ ” (Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941, 944 (Alvarez).)

Here, Curl alleges that Citi was negligent because it deprived her of a fair opportunity for a loan modification by failing to review her applications in a timely manner.

As a general rule, “ ‘a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.’ ” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1180.) There is a split of authority as to whether this general rule extends to a bank’s evaluation of a loan modification application. (Compare Alvarez, supra, 228 Cal.App.4th 941 with Lueras, supra, 221 Cal.App.4th at p. 67.) “Although lenders have no duty to offer or approve a loan modification [citations], courts are divided on the question of whether accepting documents for a loan modification is within the scope of a lender’s conventional role as a mere lender of money, or whether, and under what circumstances, it can give rise to a duty of care with respect to the processing of the loan modification application.’ ” (Rossetta v. CitiMortgage, Inc. (2017) 18 Cal.App.5th 628, 637–638.)

We will assume without deciding that Citi owed Curl a common law duty of care to process her loan modification applications in a timely manner. Despite numerous attempts, Curl has not alleged facts to show that Citi engaged in conduct that constituted a breach of this duty causing her harm.

We do not consider at all the allegations that Citi mishandled Curl’s October 2012 application. As noted, the trial court found that claims pertaining to that application are barred by res judicata and Curl does not dispute this ruling on appeal.

Turning to the 2015 application, we find few concrete facts in the third amended complaint. Curl alleges only that she experienced financial troubles in 2012 that caused her to fall behind on her loan payments and that one of her applications for a loan modification was denied “in late 2015” because her loan was more than 12 months past due and “an irreconcilable difference was found in the application.”

The following additional facts about Curl’s 2015 application were either admitted in a prior version of her complaint or established by judicially noticed evidence: Curl submitted this loan modification application on May 1, 2015. Citi communicated with Curl about her application, performed a substantive review, and denied her a loan modification. A denial letter sent to Curl on September 25, 2015 informed her that her application was denied because she was more than 12 months behind in her loan payments and also because of an irreconcilable discrepancy in the application, which led Citi to conclude that Curl had been dishonest about renting her property.

These facts, all admitted by Curl, demonstrate that Citi did not unreasonably delay its review of Curl’s 2015 application. These facts also establish that even if Citi had denied this application within 24 hours after Curl submitted it in May 2015, it would have been well more than 12 months after she fell behind on her payments in 2012.

This brings us to the January 2016 application, which Curl did not mention in her original complaint but became a focus of subsequent versions of her pleading. According to Curl, Citi never made a decision about this application but eventually invited her to submit another application, which it denied in 2017. Assuming without deciding that Citi unreasonably delayed in responding to the 2016 application, any such delay did not cause Curl’s loan to be more than 12 months delinquent. Curl has repeatedly acknowledged that she fell behind on her mortgage because of her own financial problems, and that this occurred in 2012, several years before she filed her 2016 application.

As to her 2017 application, Curl’s third amended complaint explicitly concedes that Citi reviewed it in a timely manner. Indeed, she alleges that if her “initial applications” had been reviewed in the same time-frame, then she would have either been approved or been able to explore other mitigation options. We find no factual allegations to prove this contention. Curl has conceded that Citi denied her 2015 application because her loan was already more than 12 months delinquent and her application contained an irreconcilable discrepancy. She fails to allege any fact that might have led Citi to reach a different conclusion as to the 2016 application. Nor does she explain how she was prevented from pursuing other mitigation options, or why such options are not currently available to her.

Finally, we have also considered Curl’s allegations that Citi caused the default notice to be recorded when Curl’s 2016 application was still pending, and when Citi had “never” contacted her to discuss “mitigation.” According to the third amended complaint, these pleaded facts show that Citi violated statutory duties “to ensure that appropriate safeguards are put into place prior to any foreclosure sale.”

These allegations hint at an alternative theory of liability; Curl may be attempting to prove Citi negligently engaged in wrongful foreclosure activities, as distinguished from mishandling her loan modification applications. But Curl has never alleged that a foreclosure sale occurred, or even that Citi took some other step toward effectuating a foreclosure after the notice of default was recorded in 2016. Thus, she has failed to allege facts to demonstrate that the statutory violations Citi allegedly committed when the notice of default was recorded caused her to suffer cognizable harm or incur actual damages.

II. Curl’s Statutory Claims

Curl contends that, putting aside her negligence theories, she alleged sufficient facts to prove that Citi is liable to her for violating her rights under the HBOR, first by subjecting her to dual tracking (§ 2923.6), and then by failing to contact her 30 days before the 2016 notice of default was recorded (§ 2923.5).

A. Background

The HBOR, “effective January 1, 2013, was enacted ‘to ensure that, as part of the nonjudicial foreclosure process, borrowers are considered for, and have a meaningful opportunity to obtain, available loss mitigation options, if any, offered by or through the borrower’s mortgage servicer, such as loan modifications or other alternatives to foreclosure.’ (§ 2923.4, subd. (a).)” (Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272; see also Schmidt v. Citibank, N.A. (2018) 28 Cal.App.5th 1109, 1114–1115 (Schmidt).)

Section 2923.6 of the HBOR restricts the practice of dual tracking. Subdivision (c) of this statute provides: “If a borrower submits a complete application for a first lien loan modification . . . at least five business days before a scheduled foreclosure sale,” the mortgagee or its agent “shall not record a notice of default or notice of sale, or conduct a trustee’s sale, while the complete first lien loan modification application is pending.” In this situation, foreclosure proceedings must cease until: (1) the modification application is denied in writing and the time for appeal expires; (2) the borrower rejects a loan modification offer; or (3) the borrower accepts a modification but then breaches it. (Ibid.)

However, when the borrower has submitted multiple loan modification applications, the mortgagee’s obligation to re-evaluate a new application is different. In this situation, section 2923.6, subdivision (g) states: “In order to minimize the risk of borrowers submitting multiple applications for first lien loan modifications for the purpose of delay, the mortgage servicer shall not be obligated to evaluate applications from borrowers who have been evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of this section, unless there has been a material change in the borrower’s financial circumstances since the date of the borrower’s previous application and that change is documented by the borrower and submitted to the mortgage servicer.”

Section 2923.5, the other HBOR provision that Curl invokes, contains a requirement that the mortgagee or its agent contact or attempt to contact a borrower to assess the borrower’s financial situation prior to recording a foreclosure document, such as a notice of default.

Section 2923.5, subdivision (a) precludes recording a notice of default until 30 days after the loan servicer has either (1) made initial contact with the borrower to assess the borrower’s financial situation and explore options for avoiding foreclosure, or (2) satisfied the “due diligence requirements” of this statute. “Due diligence requires sending a letter by first class mail, making three attempts to contact the borrower by telephone, and sending a certified letter if no response is received within two weeks of the telephone attempts.” (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1056; see § 2923.5, subd. (e).)

“ ‘[The] HBOR provides for injunctive relief for statutory violations that occur prior to foreclosure [citation], and monetary damages when the borrower seeks relief for violations after the foreclosure sale has occurred.’ ” (Schmidt, supra, 28 Cal.App.5th at p. 1115; see § 2924.12, subd. (a).) Importantly, it also contains a safe harbor provision to encourage the curing of violations. (Schmidt at p. 1115.) Under section 2924.12, subdivision (c), “a mortgage servicer . . . shall not be liable for any violation that it has corrected and remedied prior to the recordation of the trustee’s deed upon sale, or that has been corrected and remedied by third parties working on its behalf prior to the recordation of the trustee’s deed upon sale.”

B. Curl did not state a claim under section 2923.6

The version of section 2923.6 that was in effect when this action was filed was repealed effective January 1, 2018. (former § 2923.6, subd. (k).) As noted in our background summary, the trial court found that Curl had based her claim on a provision in former section 2923.6 that was not reenacted elsewhere and that Curl’s rights under that former provision had not vested. Therefore, it sustained Citi’s demurrer without leave to amend. Curl challenges this trial court ruling but we decline to review it in light of subsequent developments.

Effective January 1, 2019, the Legislature reenacted former section 2923.6, with some amendments that are not relevant to the issues in this appeal. (Stats. 2018, ch. 404, §§ 7, 14–15, eff. Jan. 1, 2019.) The Legislature’s reenactment included a savings clause stating that the Legislature intended that claims under pre-2018 provisions of the HBOR be allowed to proceed. (Stats. 2018., ch. 404, § 26.) In light of these developments, we limit our review to the dispositive question whether Curl has alleged facts to state a cause of action against Citi for violating the dual-tracking restriction, which appears in both the former and current versions of section 2923.6.

According to allegations in the second and third amended complaints, Curl’s 2016 loan modification application was pending on May 13, 2016, when the notice of default was recorded against her property. These allegations might be sufficient to prove dual tracking in violation of section 2923.6, subdivision (c) if not for undisputed facts pertaining to other loan modification applications Curl submitted to Citi.

As discussed, Curl’s 2015 application was reviewed by Citi and denied before any steps were taken to initiate foreclosure proceedings. Thus, under section 2923.6, subdivision (g), Curl would have to show there was a material change in her circumstances between the denial of her 2015 application in late September 2015 and the filing of her January 2016 application, and that she submitted documentation of this change to the mortgage servicer. Curl alleges no facts to make this requisite showing.

Even if Curl could state facts to prove that Citi violated the dual-tracking restriction when the notice of default was recorded in 2016, she has admitted other facts that defeat her claim. After the alleged violation occurred, Citi reviewed and denied another application from Curl in 2017, and thereby “corrected and remedied” the violation before any recordation of a “trustee’s deed upon sale.” (§ 2924.12, subd. (c).) Thus, her section 2923.6 claim fails under the HBOR’s safe harbor provision. (Ibid.)

Finally, Curl has never alleged that a foreclosure sale of her property actually took place. Thus, her potential remedy under the HBOR is injunctive relief. (Schmidt, supra, 28 Cal.App.5th at p. 1115.) However, Curl’s admission that her 2017 loan modification application was reviewed and denied shows that Citi was not dual tracking her loan after April 2017. Thus, Curl did not allege facts entitling her to relief for an alleged violation of this statute.

C. Curl Did Not State a Claim Under Section 2923.5

In her second and third amended complaints, Curl alleges that Citi violated section 2923.5 by “record[ing] foreclosure documents without even contacting [her],” and by “threatening to sell the home.” As the trial court found, these allegations do not state a valid claim.

Section 2923.5 requires that the mortgagee or its agent contact or attempt to contact the borrower to assess her financial situation prior to filing a notice of default. Curl makes conclusory allegations that she was “never” contacted by Citi, but she does not allege that Citi failed to make a legally sufficient attempt to contact her.

Moreover, Curl’s contention that she was never contacted by Citi is contradicted by factual allegations in her pleadings. For example, Curl admits that she fell behind in her loan payments in 2012, was “invited” to submit a loan modification application and discussed the matter with a Citi representative named Jason in August of that year. Curl also admits she had multiple subsequent conversations with unnamed Citi representatives about the status of her various applications before the notice of default was recorded.

Aside from these problems, Curl fails to state a claim for relief under section 2923.5 for an additional reason. The remedy for a violation of this statute is postponement of the foreclosure sale until the required contact has been made. (Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 221.) Here, there is no allegation that a foreclosure sale has ever been scheduled. Thus, even if a technical violation of this statute occurred in 2016, it was remedied when Citi accepted and reviewed Curl’s 2017 application. Curl did not allege any subsequent conduct by Citi that might arguably entitle her to relief under this statute.

III. Breach of Contract

“To allege a cause of action for breach of contract, a plaintiff must allege, ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.’ ” (Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921.)

According to the third amended complaint, the parties entered into an oral agreement that Citi would not record a foreclosure document while it was reviewing Curl for a loan modification, and an implied contract that Citi would conduct the review in good faith. These allegations are inadequate to establish the first element of a breach of contract claim, i.e. the existence of a contract.

For example, Curl does not allege facts to establish the material terms of a contract. To be enforceable as a contract, a promise must be sufficiently definite for the court to determine the scope of the promisor’s duty, and “ ‘the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.’ [Citations.] ‘Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable.’ ” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209.) Here, despite numerous opportunities, Curl does not allege any facts about what Citi allegedly agreed it would do in order to give Curl a “good faith” review before proceeding to foreclosure.

Also, Curl fails to identify any consideration for Citi’s alleged promise. “Sufficient, or good, consideration is an essential element to the existence of a contract. [Citation.] ‘[G]ood consideration’ is ‘[a]ny benefit conferred, or agreed to be conferred, upon the promisor’ or ‘prejudice suffered, or agreed to be suffered’ by the promisee.” (City of San Marcos v. Loma San Marcos, LLC (2015) 234 Cal.App.4th 1045, 1055 quoting § 1605; see also ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1268–1269.) Here, Curl alleges only that Citi made a promise to her. She does not allege any facts that might show a benefit conferred or agreed to be conferred upon Citi.

Even if these problems could be fixed, the oral promise alleged by Curl would not be enforceable due to the statute of frauds. Contrary to Curl’s appellate argument, a mortgage loan modification agreement is subject to the statute of frauds and must therefore be evidenced by a writing. (Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 547, 552–553; see also Dooms v. Federal Home Loan Mortgage Corp. (E.D.Cal. Mar. 30, 2011, No. CV F 11-0352 LJO DLB) 2011 U.S. Dist. LEXIS 38550 at *17 [“ ‘offer for a loan modification is subject to the statute of frauds since it seeks to modify a deed of trust, which is subject to the statute of frauds’ ”].)

Curl misconstrues Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, which explicitly confirms that “forbearance agreements altering a mortgage are covered by the statute of frauds.” (Id. at p. 1057.) Chavez also considers how and why a mortgagee might be equitably estopped to assert the statute of frauds against a borrower. (Id. at pp. 1057–1058.) Here, however, Curl has never alleged facts to support an estoppel theory.

Nor are we persuaded by Curl’s argument that the statute of frauds does not apply because she partially performed the contract. (Citing In re Marriage of Benson (2005) 36 Cal.4th 1096, 1108.) In Benson, the Supreme Court recognized that “where assertion of the statute of frauds would cause unconscionable injury, part performance allows specific enforcement of a contract that lacks the requisite writing.” (Ibid.) Here, however, Curl has not alleged that she performed any contractual obligation. Indeed, as discussed, she does not even allege that she agreed to do something in exchange for Citi’s alleged promise not to record foreclosure documents until a good faith review was completed.

DISPOSITION

The judgment is affirmed.

 

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TUCHER, J.

WE CONCUR:

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STREETER, Acting P. J.

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BROWN, J.

Curl v. CitiMortgage, Inc. (A155665)