Filed 9/30/19 Patterson v. Western Progressive, LLC CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

DEL PATTERSON et al.,

Plaintiffs and Appellants,

v.

WESTERN PROGRESSIVE, LLC et al.,

Defendants and Respondents.

G056220

(Super. Ct. No. 30-2016-00828575)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Peter J. Wilson, Judge. Affirmed.

Law Offices of Charles T. Marshall and Charles T. Marshall for Plaintiffs and Appellants.

Wright, Finlay & Zak, Jonathan D. Fink and Nicole S. Dunn for Defendants and Respondents.

* * *

Plaintiffs Del Patterson and Dottie Patterson (plaintiffs) appeal from a judgment entered after the court sustained without leave to amend a demurrer to the third amended complaint (TAC) and granted summary judgment in favor of defendants and respondents Ocwen Loan Servicing, LLC (Ocwen) and Western Progressive, LLC (Western; collectively defendants). In the TAC, plaintiffs sought to enjoin a foreclosure on the residence, where they continue to live, securing a loan on which they have made no payments since 2012. They argue the court erred in sustaining defendants’ demurrer to a cause of action for violation of Civil Code section 2924.17 (all further statutory references are to the Civil Code unless otherwise stated); and in granting summary judgment on a claim for violation of 2923.55 and seeking injunctive relief.

Plaintiffs have not shown any error and we affirm.

FACTS AND PROCEDURAL HISTORY

In 2006 plaintiffs obtained a $553,000 loan (Loan) from Barrington Capital Corporation (Barrington) evidenced by a note (Note) and trust deed (Trust Deed) and secured by plaintiffs’ residence (Property). The Trust Deed provided the “Note or a partial interest in the Note (together with this [Trust Deed] may be sold one or more times without prior notice to Borrower. A sale may result in a change in the entity (known as the ‘Loan Servicer’) that collects monthly payments.” It further stated, “The holder of the Note and this [Trust Deed] shall be deemed to be the Lender.”

In February 2007 pursuant to a recorded Assignment of Deed of Trust (First Assignment), Barrington assigned its beneficial interest in the Trust Deed to Option One Mortgage Corporation (Option One).

Plaintiffs began having financial difficulties in 2009 and applied for loan modifications at least six times during the period 2009 through 2013. In 2009 they received a loan modification. Plaintiffs made their last payment on the Loan in November 2012.

In March 2013 servicing of the Loan was transferred to Ocwen. Plaintiffs were given written notice of this transfer. The notice included some frequently asked questions, with information about how and where to make payments.

Shortly thereafter Ocwen sent a letter (Default Letter) to plaintiffs advising the Loan was in default and asking them to call “to discuss repayment options and foreclosure alternatives,” listing contact information. It also set out amounts due and payment methods. It further explained how Ocwen would work with plaintiffs to modify the Loan. The Default Letter also advised plaintiffs could request a copy of the Note, Trust Deed, assignments of the Trust Deed, and payment history. Plaintiffs admitted receiving the Default Letter.

In May 2013 pursuant to a recorded Assignment of Deed of Trust (Second Assignment), Option One assigned its beneficial interest in the Trust Deed to Wells Fargo Bank as Trustee for Option One Mortgage Loan Trust 2006-2, Asset-Backed Certificates, Series 2006-2 (Trust). The Second Assignment was executed on behalf of Option One by its attorney in fact, Ocwen Federal Bank FSB by its successor in interest, Ocwen, and signed by Leticia N. Arias, the contract manager. Trust is the current beneficiary and Ocwen is the current servicer of the Loan.

In December 2013 pursuant to a recorded substitution of trustee, Trust substituted Western as the trustee under the Trust Deed. In January 2014 Western recorded a notice of default (Notice of Default) showing plaintiffs’ default as of December 1, 2012 with just over $54,000 due. In May a notice of sale was recorded. Although a foreclosure sale was set for July, there has been no sale.

Between February and October 2015, plaintiffs were offered four loan modifications. They rejected each of them.

Plaintiffs continue to live in the Property, have not made a payment since November 2012, and have stated they will not make payments on the Loan. They admitted no one but Ocwen has made demand for payment on the Loan.

Plaintiffs filed this action in January 2016. The only version of the complaint in the record is the TAC, which contained alleged causes of action for intentional interference with contractual relations, violation of section 2924.17, intentional misrepresentation, wrongful foreclosure, violation of section 2923.55, and for injunctive relief under section 3422. Defendants filed demurrers to at least the first and second amended complaints.

The TAC alleged when plaintiffs borrowed money from Barrington, Barrington was acting as a broker for an unnamed third party, which they believe was Option One. Plaintiffs also alleged defendants are not “valid agents” of Trust or the “true beneficiary.” Plaintiffs challenged the validity of both assignments. They did not plead why the First Assignment was invalid but alleged the Second Assignment was void on its face, in part because there was no transfer to the Trust before the closing date. The TAC further alleged the substitution of trustee, Notice of Default, and notice of sale are void because they derive from the void assignments. Plaintiffs also pleaded they were not in default “under any valid agreement.”

In the cause of action for violation of section 2924.17, the TAC alleged assignees of the Loan are required to show the Note and Trust Deed were validly assigned by competent evidence. It further pleaded defendants violated section 2924.17 by failing to do so. In addition, it alleged Ocwen had no legal authority to direct Western to execute the Notice of Default.

The cause of action for violation of section 2923.55 alleged defendants failed to send plaintiffs a statement they could request a copy of the Note, Trust Deed and assignment. In the cause of action for a permanent injunction, plaintiffs sought to enjoin the foreclosure, alleging they could not determine to whom they should send Loan payments.

Defendants filed a demurrer to the causes of action for intentional interference with contractual relations, violation of section 2924.17, intentional misrepresentation, and wrongful foreclosure in the TAC, which the court sustained without leave to amend.

Defendants then filed a motion for summary judgment/motion for summary adjudication (motion for summary judgment) as to the causes of action for violation of section 2923.55 and for injunctive relief under section 3422. Plaintiffs filed an opposition and defendants filed a reply. The court granted the motion and entered judgment.

DISCUSSION

1. Summary Judgment Principles and Standard of Review

Code of Civil Procedure section 437c, subdivision (c), declares “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.” A defendant may bring a motion on the ground there is a complete defense to the action or the plaintiff cannot prove one of the required elements of the case. (Code Civ. Proc., § 437c, subds. (o)(2), (p).) If the defendant meets that burden, the burden shifts to the plaintiff to produce evidence there is a triable issue of material fact. (Code Civ. Proc., § 437c, subd. (o)(2).)

“There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. omitted.) “[A] party . . . ‘must produce admissible evidence raising a triable issue of fact.’” (Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1144-1145.)

“‘An issue of fact can only be created by a conflict of evidence. It is not created by “speculation, conjecture, imagination or guess work.” [Citation.] Further, an issue of fact is not raised by “cryptic, broadly phrased, and conclusory assertions” [citation], or mere possibilities [citation]. “Thus, while the court in determining a motion for summary judgment does not ‘try’ the case, the court is bound to consider the competency of the evidence presented.” [Citation.]’ [Citation.] Responsive evidence that ‘gives rise to no more than mere speculation’ is not sufficient to establish a triable issue of material fact. [Citation.]” (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 889-890.)

We review a summary judgment de novo. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 860.) “[W]e liberally construe plaintiff’s evidentiary submissions and strictly scrutinize defendant’s own evidence, in order to resolve any evidentiary doubts or ambiguities in plaintiff’s favor. [Citation.]” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64.)

2. Summary Judgment – Violation of Section 2923.55

Plaintiffs argue they “presented substantial evidence” defendants violated section 2923.55 by failing to send a written statement they, as borrowers, could request a copy of the Note, Trust Deed, assignments, and payment history before recording the Notice of Default (§ 2923.55, subd. (b)) and by failing to satisfy the due diligence requirements under subdivision (f). We disagree.

First, as the trial court noted in its ruling, plaintiffs failed to present any evidence to support their position. In opposing the motion plaintiffs did not file any declarations. Further, in their objection to defendants’ separate statement of undisputed facts, most of the “evidence” cited was allegations in the TAC. A party may not rely on its own pleadings as evidence to oppose a summary judgment. (Code of Civ. Proc., § 437c, subd. (p)(2); Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1054 [“Citation to [parties’] own pleading is meaningless”]; College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 720, fn. 7 [prohibition applies to verified pleading].) At the hearing on the motion the trial court advised plaintiffs’ counsel “one of the problems” with their case was that they had “provided zero evidence of any of their contentions.” When the judge asked where he could find any evidence, plaintiffs’ counsel did not direct him to any, merely arguing defendants had not met their initial burden.

In a few instances plaintiffs cited to evidence defendants submitted with the motion but none of this evidence supported plaintiffs’ position. In fact many of plaintiffs’ claims are merely their own arguments concerning defendants’ documentary evidence.

Plaintiffs’ contention deposition testimony and documents produced in discovery supported their arguments is without merit. They were not included in the opposition as required. (Wiz Technology, Inc. v. Coopers & Lybrand (2003) 106 Cal.App.4th 1, 10-11.) “To avoid summary judgment, admissible evidence presented to the trial court, not merely claims or theories, must reveal a triable, material factual issue. [Citation.] Moreover, the opposition to summary judgment will be deemed insufficient when it is essentially conclusionary, argumentative or based on conjecture and speculation.” (Id. at p. 11.) We will not consider any portion of the depositions not included as part of the motion, opposition, or reply.

Plaintiffs contend the Default Letter was “unsubstantiated” and “substantively deficient.” Although unclear, it appears the only basis for this argument is that the Default Letter did not state plaintiffs had previously asked for copies of the documentation pursuant to a qualified written request. But they fail to direct us to anywhere in the record where such a request was made. Nor does the TAC make any allegation about this purported failure. The pleadings frame the issues on summary judgment, and a motion may not be denied on issues not included in the pleadings. (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.) Further, nothing in section 2923.55 requires such an acknowledgement.

Moreover, the Default Letter was nowhere near the only evidence defendants had complied with the statute. In addition to the Default Letter itself, defendants submitted plaintiffs’ discovery responses where they admitted the Default Letter contained all of the required notices.

On appeal, plaintiffs also challenge the admissibility of the Notice of Default. They argue defendants failed to lay a proper foundation as a business record because “no appropriate witness was called.” But plaintiffs did not object to the Notice of Default in connection with the motion for summary judgment in the trial court as required and thus waived any objection. (Code Civ. Proc., § 437c, subd. (b)(5); Cal. Rules of Court, rule 3.1354.)

In addition, in their objection to defendants’ separate statement setting out recordation of the Notice of Default, plaintiffs admitted it was recorded and contained the date and amount of default. Their only dispute was based on the alleged lack of authority to record the Notice of Default, relying solely on the TAC as contrary evidence. Thus any objection based on lack of foundation was waived. (Code Civ. Proc., § 437c, subd. (b)(5).) Further, in reviewing a ruling on a summary judgment, we “must consider any evidence to which no objection . . . was made” in the trial court. (McCaskey v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 957.)

Plaintiffs also argue that although the Notice of Default stated defendants had contacted borrower to explore alternatives to foreclosure as required under section 2923.55, subdivision (b)(2), it was not admissible to show there had actually been contact. But again, defendants are not relying on the Notice of Default to show compliance.

Defendants filed the declaration of Ben Verdooren (Verdooren Declaration), which detailed a telephone conversation between an Ocwen representative and plaintiffs where plaintiffs told Ocwen they were represented by a lawyer. The lawyer told Ocwen not to speak to plaintiffs. Ocwen provided information, including the current outstanding balance, status of the loan modification, and instructions as to how to locate the Home Affordable Mortgage Program (HAMP) loan package on the Web site and the HAMP eligibility information received during the conversation. Mr. Patterson advised he would fax the modification documents within two weeks and an appointment was scheduled. This information was taken from a “comments log,” a copy of which was attached to the declaration. The comments log also showed the HAMP modification package was received, reviewed, and denied.

Additionally, in her deposition, Mrs. Patterson testified she applied for a loan modification in early 2013. Contrary to plaintiffs’ contention in their reply brief, this is evidence they were given a “meaningful opportunity” to apply for a loan modification in advance of the January 2014 Notice of Default. Thus, there was sufficient evidence showing the required contact with plaintiffs was made and the statutory condition to filing the Notice of Default was satisfied.

Plaintiffs assert the Verdooren Declaration was inadmissible hearsay and lacked foundation. They maintain Verdooren did not show personal knowledge of the facts stated or how he knew about Ocwen’s recordkeeping. But plaintiffs failed to object to the Verdooren Declaration and thus any objection is waived. (Code Civ. Proc., § 437c, subd. (b)(5).)

Even if we considered the argument on the merits it fails. The Verdooren Declaration set out a lengthy foundation. It stated Verdooren had custody and control over and access to Ocwen’s documents as to plaintiffs’ loans; was familiar with how Ocwen’s documents are prepared and maintained; had personally reviewed the documents referred to in the declaration, which were prepared and maintained in the ordinary course of business at or near the time of the events; and the sources and method of preparing the documents indicated their trustworthiness. It went on to describe how the Ocwen database was maintained and monitored and how information was entered into the database. In addition, it stated Ocwen relied on the documents in the database in conducting business. It further stated Verdooren had personal knowledge of the facts set out in the Verdooren Declaration.

This was more than sufficient to lay a foundation. Verdooren was not required to explain further “how” (italics omitted) he knew of Ocwen’s recordkeeping process. “[F]oundation requirements may be inferred from the circumstances. Indeed, it is presumed in the preparation of the records not only that the regular course of business is followed but that the books and papers of the business truly reflect the facts set forth in the records brought to court.” (People v. Dorsey (1974) 43 Cal.App.3d 953, 961.) Further, the court has broad discretion in determining whether sufficient foundation was laid for admitting business records. (Grail Semicondutor, Inc. v. Mitsubishi Electric & Electronics USA, Inc. (2014) 225 Cal.App.4th 786, 798.) Nothing suggests the court abused that discretion.

Plaintiffs also argue in one sentence the Verdooren Declaration should not have been admitted because it was filed only with defendants’ reply papers, not the original motion. But again, plaintiffs did not object to its filing. In fact, they argued about its contents at the hearing. Thus, any objection to the declaration was waived. (Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1426.)

Plaintiffs’ assertion defendants could not have legally modified the Loan based on discrepancies in recorded documents and other alleged violations of section 2924.17, subdivision (b) has no merit for two reasons. First, the demurrer to plaintiffs’ cause of action for violation of section 2924.17 was sustained without leave to amend and thus was not at issue in the motion for summary judgment. Second, plaintiffs did not raise this argument in the trial court and thus it was waived. (Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1065.)

Finally, there is additional evidence defendants satisfied section 2923.55. Plaintiffs were offered four loan modifications after the Notice of Default was recorded. Even if defendants had not complied with the statute prior to the Notice of Default, which we do not hold, the subsequent offers satisfied the requirements. The only remedy for a violation of section 2923.55 is delay of the foreclosure sale until the loan servicer complies. (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1058, fn. 4 [dealing with parallel section 2923.5]; Huweih v. U.S. Bank Trust, N.A. (N.D.Cal., Jan. 30, 2017, No. 16-cv-00421-MMC) 2017 WL 396143, *4.) Since defendants have complied with section 2923.55, the motion for summary judgment was properly granted.

3. Summary Judgment – Injunctive Relief

In granting summary judgment as to plaintiffs’ request to enjoin the foreclosure the court explained that, given the fact it had sustained the demurrers to all other causes of action, the only basis for an injunction was the alleged violation of section 2923.55. Because defendants did not violate that section, there was no basis to issue an injunction. We agree with that ruling. Summary judgment is “‘limited to the claims framed by the pleadings.’” (Jacobs v. Coldwell Banker Residential Brokerage Co. (2017) 14 Cal.App.5th 438, 444.) Plaintiffs do not present any argument to the contrary, instead focusing on collateral issues.

For example, in the motion for summary judgment defendants argued a borrower may not “bring a preemptive judicial action” to stop a foreclosure, citing Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1155. Plaintiffs argue the court erred in relying on Gomes because it has been “severely limited” by subsequent cases. But the trial court did not rely on this as a basis for its ruling and it is irrelevant to our decision.

Likewise, while conceding the court did not discuss whether the acts of Western, as trustee, were privileged, plaintiffs nonetheless argue there are genuine issues of fact as to whether Western was acting solely in that capacity. Plaintiffs are wrong. They again fail to cite to the record and we did not find any such argument in the motion for summary judgment. It is not at issue.

Because there is no substantive basis for an injunction, there is no issue of irreparable injury.

4. Summary Judgment – Tender

One of the grounds on which defendants based the motion for summary judgment was plaintiffs’ failure to tender amounts past due under the Note. As plaintiffs acknowledge, the court did not rely on this as a basis for granting the motion and neither do we.

5. Demurrer – Violation of Section 2924.17

We review a judgment after order sustaining a demurrer without leave to amend de novo. (Kahan v. City of Richmond (2019) 35 Cal.App.5th 721, 730.) “‘[W]e treat the demurrer as admitting all material facts properly pleaded, but do not assume the truth of contentions, deductions or conclusions of law’” (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 43) or speculative allegations (Rotolo v. San Jose Sports & Entertainment, LLC (2007) 151 Cal.App.4th 307, 318, disapproved on another ground in Verdugo v. Target Corp. (2014) 59 Cal.4th 312, 333, 334, fn. 15).

Section 2924.17, subdivision (a) required that a declaration recorded under section 2923.55, a notice of default, a notice of sale, an assignment of a trust deed, or a substitution of trustee “shall be accurate and complete and supported by competent and reliable evidence.” Under subdivision (b), before recording any of those documents, a mortgage servicer is required to review “competent and reliable evidence to substantiate the borrower’s default and the right to foreclose.”

In their section 2924.17 cause of action plaintiffs claimed the assignments of the Trust Deed were void because the transfer to the Trust was untimely and thus the Notice of Default and notice of sale were void. In sustaining defendants’ demurrer to this cause of action the court ruled plaintiffs had no standing to attack the assignments.

In their apparent challenge to this finding, in two unclear sentences, plaintiffs assert the court erred when it ignored an allegation the Second Assignment was void because it was made under a limited power of attorney “from an entirely separate principal, since defunct.” Therefore, they conclude the person signing had no authority. This argument is forfeited for lack of authority and reasoned legal argument. (City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 286-287.) “It is not our place to construct theories or arguments to undermine the judgment and defeat the presumption of correctness.” (Benach v. County of Los Angeles (2007) 149 Cal.App.4th 836, 852.)

6. Demurrer – Leave to Amend

Plaintiffs did not seek leave to amend in the trial court or in the opening brief. They make an abbreviated request to amend in the reply brief, presumably in response to defendants’ argument leave to amend should not be granted.

To be granted leave to amend, a plaintiff must demonstrate how the complaint could be pleaded to state a valid cause of action. (Schifando, supra, 31 Cal.4th at p. 1081.) “‘To satisfy that burden on appeal, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” [Citation.] . . . The plaintiff must clearly and specifically set forth the “applicable substantive law” [citation] and the legal basis for amendment, i.e., the elements of the cause of action and authority for it. Further, the plaintiff must set forth factual allegations that sufficiently state all required elements of that cause of action. [Citations.] Allegations must be factual and specific, not vague or conclusionary. [Citations]’” (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1491.)

Plaintiffs have not met any of these requirements. They merely assert the complaint “could be amended to flesh in more facts obtained in discovery after the last amendment.” Plaintiffs had four opportunities to plead a proper complaint. There is no basis to believe they could do so if given yet another chance.

 

DISPOSITION

The judgment is affirmed. Defendants are entitled to costs on appeal.

THOMPSON, J.

WE CONCUR:

O’LEARY, P. J.

BEDSWORTH, J.