Filed 8/28/18 Shiheiber v. JPMorgan Chase Bank CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

HANAN SHIHEIBER,

Cross-complainant and Appellant,

v.

JPMORGAN CHASE BANK, N.A.,

Cross-defendant and Respondent.

A147310

(San Mateo County

Super. Ct. No. CIV493254)

INTRODUCTION

Defendant and cross-complainant Hanan Shiheiber appeals from a judgment of dismissal of her cross-complaint against plaintiff and cross-defendant JPMorgan Chase Bank, N.A. (Chase), following the court’s grant of a nonsuit on all Shiheiber’s causes of action. (Code Civ. Proc., § 581c.) Shiheiber was a borrower, who had a real estate loan with Chase that was secured by residential real property. She sued Chase after it foreclosed on the property, asserting causes of action for fraud, negligent misrepresentation, breach of the covenant of good faith, money had and received and unfair business practices. She alleged Chase had entered an oral agreement with her to forbear from foreclosing on her loan in exchange for a payment. Prior to trial, the court held a hearing under Evidence Code section 402, found the evidence did not show Chase acted with fraudulent intent and barred Shiheiber from offering evidence of the oral forbearance agreement at trial. After her attorney presented opening statement without referring to the oral agreement, the court granted nonsuit to Chase on all causes of action.

Shiheiber contends the trial court erred in ruling that the statute of frauds (Civ. Code, § 1624) applied to preclude her from offering evidence of Chase’s oral promise to forbear from foreclosing and in granting Chase’s motion for nonsuit. We reject two of Shiheiber’s arguments: that the alleged oral forbearance agreement did not modify the note or deed of trust and fell outside the statute of frauds for that reason and that Chase was estopped from asserting the statute of frauds. However, we agree with Shiheiber that the trial court erred in excluding evidence of the oral promise under the fraud exception to the statute of frauds and granting nonsuit as a result. The trial court erred in making credibility determinations, weighing conflicting evidence, and making a factual finding that Chase lacked fraudulent intent. Instead, the court should have determined only whether Shiheiber’s evidence was sufficient for a jury to find by a preponderance of the evidence that Chase had such intent. We conclude her evidence was sufficient and that it was therefore error to exclude evidence of the oral agreement and, by granting nonsuit, preventing Shiheiber from presenting her evidence to the jury, at least in regard to the fraud claim. We therefore reverse.

BACKGROUND

I.

The Loan and Defaults

In August 2005, Shiheiber, a real estate broker, borrowed $3,050,000 from Washington Mutual Bank, securing the loan by a deed of trust encumbering an apartment building located at 789 El Camino Real, in Burlingame (the El Camino property). The deed of trust identified events that would constitute a default, including, but not limited to, the failure to make the required monthly loan payment and the failure to pay property taxes. In the event of default, the deed authorized the lender to cause the trustee under the note to exercise its power of sale. Following the failure of Washington Mutual, Chase acquired the servicing rights and became the owner of the loan.

In 2010, Shiheiber defaulted on her loan when she failed to make the January 2010 monthly loan payment of over $16,000. She also admitted she owed at least $25,000 in overdue property taxes, which constituted another event of default.

On January 22, 2010, Chase sent Shiheiber a delinquency notice advising her to bring the loan current before a notice of default was filed. The notice said it was “IMPERATIVE YOU CONTACT THE BANK TO VERIFY THE TOTAL DUE PRIOR TO REMITTING FUNDS. PAYMENT MUST BE MADE BY WIRE TRANSFER, CERTIFIED FUNDS OR CASH. THE BANK MAY REQUIRE SATISFACTORY PROOF THAT ALL PROPERTY TAXES AND INSURANCE ARE PAID AND CURRENT.” Shiheiber also failed to make the February payment. On February 26, 2010, Chase issued, but did not record, a second notice of default on the El Camino property.

II.

Evidence Code Section 402 Hearing

Shiheiber testified at an Evidence Code section 402 hearing (the 402 hearing) held to determine whether the statute of frauds applied to preclude evidence of oral promises she alleged were made by Chase on March 1, 2010. According to Shiheiber, Keith Cousens, a special assets officer at Chase, contacted her by phone in February 2010, concerning the delinquency. “Mr. Cousens told me that I needed to come in and pay him in person the payment or he was going to file” a notice of default. Shiheiber drove from Los Angeles to Cousens’ office in San Francisco and met with him at 9:30 a.m. on March 1, 2010, for about half an hour. She went there and made a payment to him in person “to make sure that my loan was reinstated properly.” Her attorney was included in the meeting telephonically and spoke to Cousens, also requesting some relief or forbearance on Shiheiber’s behalf. Shiheiber testified it was her understanding that by coming to San Francisco and personally making the payment, she would be able to reinstate her loan and late fees would be waived. According to Shiheiber, “I sat with Mr. Cousens and we went over the reinstatement numbers that he was showing me and I brought in a $20,000 cashier’s check and we calculated it together and I wrote him the difference with a check.” That personal check was for $12,483.30, for a total payment of $32,483.30. That was the amount she was instructed to pay to engage in the reinstatement.

That afternoon, Cousens sent an email to the trustee on the promissory note and deed of trust, stating he was responding to a client inquiry and asking if the request to enter default that had been filed previously could be stopped. When the trustee asked, “Do you want this foreclosure stopped?” Cousens responded, “No, please record.”

The trustee recorded a notice of default the next day on March 2, 2010. The notice informed Shiheiber she had a significant period of time to reinstate her loan. Also on March 2, Cousens sent a letter to Shiheiber stating that because she had made only a partial payment, this payment had been placed in a “suspense account,” and that a notice of default was being recorded. The letter also stated that acceptance of her partial payment did not “constitute a modification or extension of the Loan or an agreement to forbear.” The notice of default recorded on March 2, 2010, identified a loan payoff amount of $77,161.61 as of March 1, 2010. (Cousens testified this sum was comprised of interest on her January, February and March payments, plus penalties and fees.) Shiheiber acknowledged that the property taxes were still delinquent when the notice of default was recorded on March 2.

Shiheiber testified she did not receive the March 2 letter, which had been misaddressed to “Hurlington” rather than “Hurlingham” Avenue and did not learn a notice of default had been recorded until late March or early April. She was “totally shocked” to find out the notice of default was recorded after she had made the full payment on the January and February loans, as the letter “totally contradict[ed] what we had discussed or what . . . I did and the purpose of my meeting with him.” The fact that the notice of default was dated March 1, 2010, the same day she met with Cousens, indicated to her that Cousens intended to file the foreclosure even though “that wasn’t what we discussed.”

According to Shiheiber, recording of the notice of default ruined her credit. She was attempting to obtain a $4 million loan from Vista Funding and had received conditional approval, but when the notice was recorded the lender told her she no longer qualified. She had told Cousens when they spoke that she was “getting a brand new loan and paying off everything.”

Shiheiber admitted she was also delinquent on her property taxes as of March 2010.

Shiheiber also testified that a year later, after a mediation proceeding in March 2011, she received a telephone call from Janet Scott, who was Cousens’ supervisor. Scott encouraged Shiheiber to take a settlement and told Shiheiber “that Chase targeted many people and that I was one of them because of the value of my properties. She told me they were after more the value of your property and the property than really getting the payment and she said you were one customer they did not want to work with because you flaunt them for your rights and most people they don’t do that. [¶] And they figured that eventually, they give up because they can’t afford the mediation process . . . it’s going to cost a million dollars [to litigate the case].”

Cousens’ recollection of the March 1, 2010 meeting differed significantly from Shiheiber’s. According to him, Chase had previously contacted Shiheiber by telephone concerning the delinquency and had requested that she sign a pre-negotiation agreement, seeking “financial information on the borrower and the property.” Shiheiber refused to provide that information and did not sign any pre-negotiation agreement. Shiheiber had called the morning of March 1 about making a payment, so he invited her to the office. At some point, he told her Chase was starting the foreclosure process because she had not provided the information it needed before they could discuss modification or forbearance. He told Shiheiber during the meeting the two checks would not reinstate her loan and Chase was going to proceed with foreclosure because the loan was not fully reinstated and she still had delinquent property taxes and she had not cooperated in providing the information. She insisted on making the payments, despite being told the foreclosure proceeding would not be stopped because of these partial payments. For a full reinstatement, she would have had to “cure all the defaults” including monthly payments and property taxes. He told her the payments “would not satisfy a reinstatement” and she would be getting a letter stating that immediately. He does not know where she derived the amount of the checks; he did not recall discussing that amount of money with her. He made it clear that Chase was proceeding with foreclosure and that the payments she was making would be put in a suspense account. He told her certain documents she had declined to sign and information she had not provided were required before there could be a discussion of forbearance or modification. She told him she did not want Chase to “file anything.”

Asked if he knew why Shiheiber made the payments that day, Cousens stated, “I think she was hoping I would stop the foreclosure.” At the time he authorized the trustee to proceed with recording the notice of default, Cousens was unaware of an additional event of default—that Shiheiber had encumbered the property with a junior mortgage of approximately $2 million in favor of California Pacific Bank without receiving consent from Washington Mutual or from Chase.

The trustee nonjudicially foreclosed on the El Camino property, which was sold in June 2011, to junior lienholder California Pacific Bank for $3.8 million.

III.

This Litigation

In March 2010, Chase began an action for judicial foreclosure against Shiheiber. The complaint was dismissed in September 2011, after the nonjudicial foreclosure concluded.

In the meanwhile, Shiheiber filed her cross-complaint against Chase in September 2010, asserting 15 causes of action. After a series of demurrers the trial court ordered Chase to “file and serve its Answer [to the second amended cross-complaint] no later than September 7, 2011.” That operative cross-complaint contained five causes of action: fraud, negligent misrepresentation, breach of the covenant of good faith, unfair business practices and money had and received.

On September 7, 2011, Chase filed its original answer to the second amended cross-complaint. Chase served the answer on Shiheiber, who was representing herself at the time. Shiheiber failed to file a timely motion to strike the original answer, a motion for default or any similar response. On September 28, 2011, Chase filed an amended verified answer to the cross-complaint, serving it by mail. Shiheiber again failed to file any responsive motion to strike, for default or similar response.

At the outset of trial, in response to motions in limine filed by Chase seeking to exclude any evidence of certain oral agreements Shiheiber had alleged, the court conducted a 402 hearing to determine whether Shiheiber could establish a preliminary fact—Chase’s fraudulent intent—that would give rise to an exception to the statute of frauds under Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 (Tenzer). (Id. at pp. 28–30 [fraud claim not barred by statute of frauds if plaintiff can establish oral promise was made with fraudulent intent].) The court ruled, based on the above testimony and evidence, that Shiheiber “has not established a preliminary fact that the cross-defendant acted with a fraudulent intent at the time of this meeting on March 1st, 2010; so therefore, the cross-complainant is precluded from referencing and introducing the evidence concerning any oral agreement that she believes happened between her and Mr. Cousens.”

Shiheiber moved to strike Chase’s amended verified answer to the operative cross-complaint, arguing that it was never filed. Chase produced a file-stamped copy of the answer, a receipt showing service, and Chase’s counsel stated to the court that the answer was both filed and served. Chase also argued any motion to strike should have been filed in 2011 and that discovery propounded by Shiheiber established she had received the answer. The trial court denied the motion to strike, finding that there appeared to have been “a clerical error” by the clerk’s office, that the parties were familiar with the person who signed the pleading in the clerk’s office, and that it was erroneously not processed.

Chase moved for entry of judgment on the five remaining causes of action based on the court’s ruling at the 402 hearing that evidence of the oral agreement could not be presented. The court denied the motion. After Shiheiber’s counsel made his opening statement without referring to the oral promises the court had excluded from evidence, Chase moved for nonsuit on the four claims that were to be tried by the jury (fraud, negligent misrepresentation, breach of the covenant of good faith, and money had and received), arguing the evidence Shiheiber’s counsel described in his opening statement failed to demonstrate Chase’s fraudulent intent. The trial court granted the nonsuit motion as to causes of action to be tried to the jury. At the bench trial that followed on the unfair business practices cause of action, counsel for Shiheiber again made an opening statement, and Chase again moved for nonsuit on the same grounds. The trial court granted the motion for nonsuit on the unfair business practices cause of action.

Shiheiber moved for a new trial on the ground the nonsuit was improper. She also argued once again that Chase’s amended answer was never filed and should have been stricken. The court denied the new trial motion in its entirety.

This timely appeal followed.

DISCUSSION

I.

The Statute of Frauds Defense

Shiheiber contends the trial court erred in precluding her from offering evidence of Chase’s oral promise based on the statute of frauds. She contends the oral promise did not modify the written loan documents and thus was not barred by the statute of frauds, Chase was estopped by her performance and reliance on the promises and that the trial court erred in holding the evidence she presented at the 402 hearing was insufficient to entitle her to have the jury decide whether the Tenzer fraud exception to the statute applied.

“The statute of frauds requires any contract subject to its provisions to be memorialized in a writing subscribed by the party to be charged or by the party’s agent. ([Civ. Code,] § 1624; Secrest v. Security National Mortgage Loan Trust 2002–2 (2008) 167 Cal.App.4th 544, 552 [(Secrest)].) An agreement for the sale of real property or an interest in real property comes within the statute of frauds. That includes a promissory note and a deed of trust securing performance under the note. (Secrest, at p. 552.) ‘An agreement to modify a contract that is subject to the statute of frauds is also subject to the statute of frauds.’ (Id. at p. 553.)” (Rossberg v. Bank of America., N.A. (2013) 219 Cal.App.4th 1481, 1503.) In Secrest, the Court of Appeal held a forbearance agreement, in which a lender agreed not to foreclose on the borrowers’ home if the borrowers satisfied certain conditions, was subject to the statute of frauds because it modified the original promissory note and deed of trust executed by the borrowers. (Secrest, at p. 553; accord Rossberg, at p. 1503 [holding an oral loan modification agreement was subject to the statute of frauds].)

In Tenzer, our high court repudiated the rule articulated in a series of appellate court decisions that applied the statute of frauds to bar a cause of action for fraud based on an oral promise that was made without the intention of performing, opining it was “inconsistent with the general rule ‘that the statute of frauds, having been enacted for the purpose of preventing fraud, shall not be made the instrument of shielding, protecting or aiding the party who relies upon it in the perpetration of a fraud or in the consummation of a fraudulent scheme.’ ” (See Tenzer, supra, 39 Cal.3d at p. 30, overruling Kroger v. Bauer (1941) 46 Cal.App.2d 801 and other cases.) Rejecting the argument that allowing such claims to proceed would nullify the statute of frauds, the court observed it is not “that easy to reach a jury on a claim of fraud,” and “[t]o survive a motion for nonsuit (Code Civ. Proc., § 581c), plaintiff in an action on a fraudulent promise must produce evidence of the promisor’s intent to mislead him.” (Tenzer, at p. 30.) “ ‘[S]omething more than nonperformance is required to prove the defendant’s intent not to perform his promise.’ ” (Ibid.)

A. Modification of the Contract

Shiheiber first contends the alleged oral agreement was not within the statute of frauds because it did not modify the note or deed of trust, distinguishing Secrest, and citing Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 71 (Lueras).)

In Secrest, the court recognized that “[a] forbearance agreement does not create, renew, or extend a deed of trust.” (Secrest, supra, 167 Cal.App.4th at p. 553.) However, the forbearance agreement at issue there modified a contract subject to the statute of frauds and so was also subject to the statute of frauds. (Ibid.; Civ. Code, § 1698, subd. (a).) The forbearance agreement in Secrest attempted to modify the note and deed of trust by substituting a new monthly payment for the monthly payment required under the note and by altering the lender’s ability to exercise a right to foreclose under the note and deed of trust due to the borrower’s default. (Secrest, at p. 553.)

In Lueras, the bank argued the unsigned forbearance agreement was not binding. The court rejected that argument for several reasons, including that the argument was perfunctorily made in a footnote and that the bank had not raised the statute of frauds in its demurrer to the complaint. Lueras also distinguished Secrest, on the basis that the forbearance agreement itself stated: “ ‘No Modification. I understand that the Agreement is not a forgiveness of payments on my Loan or a modification of the Loan Documents.’ (Original boldface.)” (Lueras, supra, 221 Cal.App.4th at p. 71.) Shiheiber urges the March 2, 2010 letter sent by Chase, acknowledging her partial payment and notifying her it had been put in a suspense account, also stated that acceptance of her partial payment did not “constitute a modification or extension of the Loan or an agreement to forebear.” Therefore, she argues that the alleged oral agreement was not a “modification” of her contract and consequently fell outside the statute of frauds. We disagree.

The problem with Shiheiber’s argument is that the March 2, 2010 letter acknowledging her partial payment was not the oral agreement Shiheiber claims was erroneously excluded from evidence. Unlike the bank in Lueras, Chase never stated the alleged oral agreement would not constitute a modification. Rather, Chase contended there was no oral agreement at all. Moreover, the oral agreement that Shiheiber alleges—Chase’s agreement not to record a notice of default and to accept a partial payment as a full reinstatement of the loan—would constitute a modification of the note and deed of trust, as Chase would have been waiving its right to declare a default, altering its ability to foreclose under the note and deed of trust, and also waiving miscellaneous late fees and other miscellaneous fees to which it was entitled under the note and deed of trust. (See Secrest, supra, 167 Cal.App.4th at p. 553.)

B. Estoppel to Plead the Statute of Frauds

Shiheiber next contends the trial court should have found Chase was estopped to assert the statute of frauds. She contends her part performance and reliance on Chase’s promises took those promises outside the statute of frauds, where application of the statute would cause her unconscionable injury. (See Tenzer, supra, 39 Cal.3d at pp. 29–30; Secrest, supra, 167 Cal.App.4th at pp. 555–556.) However, she does not deny that she never raised the claim of estoppel in the trial court. Where the estoppel issue is not litigated at trial, we need not consider it on appeal. (Colony Ins. Co. v. Crusader Ins. Co. (2010) 188 Cal.App.4th 743, 751.) “ ‘It is a firmly entrenched principle of appellate practice that litigants must adhere to the theory on which a case was tried.’ ” (Ibid.; see Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2017) ¶ 8:229, at pp. 8-172 to 8-173.) “Finally, we note that in order to raise a claim of estoppel, [the party asserting the claim] was required to plead it. (Larue v. Swoap (1975) 51 Cal.App.3d 543, 551 [‘The burden of pleading facts which raise the issue of estoppel lies with the party who would estop the other party [citation], and for estoppel to be available it must be specially pleaded ’].” (Colony, at p. 751.) While in the exercise of our discretion, we may consider a new theory on appeal when it is purely a matter of applying the law to undisputed facts (ibid.), the facts regarding what took place at the March 1, 2010 meeting between Chase and Shiheiber were hotly disputed by the parties below. Although the Court of Appeal in Colony proceeded to address the merits of the estoppel claim, which had been belatedly raised in the plaintiff’s request for a statement of decision, it held the plaintiff had forfeited its claim. (Ibid.) We conclude Shiheiber’s claim of estoppel was forfeited.

C. The Fraud Exception to the Statute of Frauds

Shiheiber’s third argument that the trial court erred is that the fraud exception to the statute applies here and that at the 402 hearing she made a showing sufficient to sustain a jury finding that Cousens acted with fraudulent intent at the March 1 meeting. She relies on the Tenzer decision, observing that the court there recognized that “fraudulent intent must often be established by circumstantial evidence. Prosser, for example, cites cases in which fraudulent intent has been inferred from such circumstances as defendant’s insolvency, his hasty repudiation of the promise, his failure even to attempt performance, or his continued assurances after it was clear he would not perform.” (Tenzer, supra, 39 Cal.3d at p. 30.) The “crucial question for decision on appeal,” Shiheiber argues, “is whether there was in the record before the trial court sufficient evidence to justify under Tenzer the admission of Ms. Shiheiber’s testimony of the oral promises made by CHASE.” This question, she further argues, must be decided in the context of Evidence Code sections 402 and 403.

Evidence Code section 402 provides in relevant part:

“(a) When the existence of a preliminary fact is disputed, its existence or nonexistence shall be determined as provided in this article.

“(b) The court may hear and determine the question of the admissibility of evidence out of the presence or hearing of the jury . . . .

“(c) A ruling on the admissibility of evidence implies whatever finding of fact is prerequisite thereto; a separate or formal finding is unnecessary unless required by statute.”

Evidence Code section 403 provides in relevant part:

“(a) The proponent of the proffered evidence has the burden of producing evidence as to the existence of the preliminary fact, and the proffered evidence is inadmissible unless the court finds that there is evidence sufficient to sustain a finding of the existence of the preliminary fact, when:

“(1) The relevance of the proffered evidence depends on the existence of the preliminary fact . . . .”

Under Evidence Code section 403, the trial court does not weigh the evidence. “[U]nder Evidence Code section 403, ‘[t]he preliminary fact questions listed in subdivision (a) . . . are not finally decided by the judge because they have been traditionally regarded as jury questions. The questions involve the credibility of testimony or the probative value of evidence that is admitted on the ultimate issues. It is the jury’s function to determine the effect and value of the evidence addressed to it. . . . [T]he judge’s function on questions of this sort is merely to determine whether there is evidence sufficient to permit a jury to decide the question.” (People v. Lucas (1995) 12 Cal.4th 415, 466–467.)

We agree with Shiheiber that the trial court improperly engaged in assessing the credibility of the two witnesses and weighing the evidence. The court referred to the parties’ disagreement about the relevant facts: “So we have the testimony of Ms. Shiheiber and Mr. Cousens is really the bottom line here. And obviously, they disagree over a number of pertinent points.” The court, in considering what happened at the meeting, referred to various undisputed facts (that Shiheiber knew she was in default because of missed payments and outstanding property taxes). However, the court also described and obviously credited Cousens’ testimony that “he made up his mind to file the [notice of default] after the meeting” and not before the meeting. The court acknowledged that Shiheiber “came away with some understanding of what she thought happened at the meeting” that was “different” from Cousens’ view of it. However, the court did not mention, but plainly rejected Shiheiber’s testimony that at the meeting she and Cousens together calculated the amount as what she needed to pay in order to reinstate the loan. The court discussed Shiheiber’s knowledge of the other defaults and inferred that she “certainly had to know by reading the documents—and again, she’s a sophisticated person—that [the junior lien] was a violation of the terms of the agreement. So there are a couple of things there that don’t kind of get past. [¶] So the focus just on the missed payments, I think, is incorrect.” The court concluded, “So do I think that the—so it is my finding, rather—not what I think—that the oral promises were an inducement to get her to come to his office? No, I don’t think so. Do I think that the—that this was fraud? No, I don’t think so.”

The court’s assessment of the evidence and its various comments show that it made credibility determinations, found Cousens credible and Shiheiber less credible, and credited his version of what happened at the meeting and discounted hers. In discussing the evidence, the court also appears to have engaged in some weighing, and found Chase’s evidence about intent weightier than Shiheiber’s.

While the trial court erred by resolving disputed facts and making its own “findings,” rather than simply assessing the sufficiency of Shiheiber’s evidence, its ruling excluding evidence of the oral agreement would nonetheless be correct if, indeed, Shiheiber had failed to introduce sufficient evidence to establish as preliminary fact that Cousens acted with a fraudulent intent. In our view, however, she did proffer sufficient evidence, and though Chase’s evidence suggested a different version of the events, that is not pertinent to the inquiry. Again, the question is whether as a matter of law, Shiheiber’s evidence, including circumstantial evidence, was insufficient to support a finding that Chase acted with fraudulent intent.

Shiheiber points to her testimony that Cousens calculated the $32,483.30 amount required for her to reinstate the loan. She also refers to the following circumstantial evidence as sufficient to allow the question of Cousens’ alleged fraudulent intent to be submitted to the jury:

1. Cousens and Chase had already started preparing a notice of default before the March 1, 2010 meeting.
2.
3. Cousens accepted Shiheiber’s $32,483.30 payment, despite having already asked that a notice of default be recorded on the property.
4.
5. Chase filed the notice of default on March 2, 2010, less than one day after promising not to do so on condition that Shiheiber immediately pay the agreed upon amount.
6.
7. Cousens had the ability to stop the notice of default from being recorded, but failed to do so.
8.
9. Janet Scott’s admission that Chase specifically targeted Shiheiber because of the value of her properties.
10.
We will discuss each of these items in turn.

First, Shiheiber’s testimony, while less direct than it might have been, about her “understanding” of the meeting with Cousens, his calculating with her the amount of $32,483.30 and instructing her this was the amount required to reinstate the loan, and the inconsistency of the March 2, 2010 letter and the conversation she had with Cousens on March 1, together sufficed as a prima facie showing that Cousens promised to reinstate her loan. The March 2 letter, sent one day after their in-person meeting, provided some evidence that he lacked the intent to perform at the time he made the promise.

That Cousens and Chase had prepared and filed a notice of default before the March 1 meeting does not support the claim that Cousens acted with fraudulent intent. Under the terms of the note and deed of trust, Chase had the right to prepare a notice of default because Shiheiber was in default, and its doing so before the alleged oral promise was made does not suggest the subsequent promise was fraudulently made.

Cousens’ acceptance of the $32,000 payment would not alone show fraud or fraudulent intent. After all, the payment was due and owing under the note and deed of trust. (Cf. Carma Developers (Cal.) Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 374 [the implied covenant of good faith and fair dealing cannot contradict the express terms of a contract]; Storek & Storek, Inc. v. Citicorp Real Estate, Inc. (2002) 100 Cal.App.4th 44, 55 [same] (Storek & Storek).) However, coupled with the evidence that she made the payment after Cousens called her about the default, told her to come in and make payment, and calculated the amount of the payment as a means of avoiding foreclosure, the acceptance of the payment provides some support for her claim that he made and she relied on an oral promise to reinstate the loan. After all, if she had expected Chase to pursue the foreclosure, she would have had no reason to make the payment, in essence throwing good money after bad. True, Cousens testified that she did so hoping the bank would forbear and in the course of urging it to do so. But Chase’s counter-evidence is not relevant to whether Shiheiber made the required prima facie showing of fraud.

That Cousens did not stop the notice of default from being recorded after promising Shiheiber that he would not record the notice if she paid him the amount they calculated to be due for late payments and that the notice was recorded the day after the meeting furnish some evidence of fraudulent intent on his part. Although mere nonperformance of an alleged oral promise (in this case the promise not to record the notice of default, to reinstate the loan and to waive fees) is insufficient to show fraudulent intent (Tenzer, supra, 39 Cal.3d at pp. 30–31), here there are the added facts of Cousens’ ordering the recording of the notice of default the same day the promise was alleged to have been made in addition to defendant’s misaddressing the notice of default with the result that Shiheiber did not receive it until late in the month.

Finally, Shiheiber argues that Janet Scott’s “admission” that Chase specifically targeted her because of the value of her property is not evidence of a fraudulent intent by Chase. Chase argues in a footnote that this contention is akin to a “selective prosecution” argument, which is not a defense in the absence of invidious discrimination. (See Baluyut v. Superior Court (1996) 12 Cal.4th 826, 832.) Chase had the right to initiate foreclosure proceedings upon Shiheiber’s default. That it may have “targeted” her because of the value of her properties does not prevent Chase from foreclosing, as it had a right to do. (See Storek & Storek, supra, 100 Cal.App.4th at p. 56, fn. 10 [implied covenant of good faith and fair dealing does not impose an affirmative duty on a party to forbear from enforcing rights expressly given under a contract—even if that party takes a “hard line” in negotiations or in enforcing its rights].) Nor did Scott’s statement, as related by Shiheiber, indicate when Chase “targeted” Shiheiber. Thus, it does not shed light on whether Cousens made a false promise or whether, at the time he made the alleged oral promise, he intended to perform.

We conclude that Shiheiber produced sufficient evidence to allow the fraud cause of action to go to the jury, together with the evidence of the alleged oral promise by Cousens. The trial court therefore erred in excluding the evidence and in granting the nonsuit. Consequently, we must reverse the nonsuit granted after opening statement in its entirety, as it was infected by Shiheiber’s inability to present a critical part of her case. We do not address whether on remand a nonsuit may be properly granted on causes of action other than fraud, because the parties have not specifically addressed the issue of whether and to what extent Tenzer creates an exception to the statute of frauds for claims other than intentional misrepresentation.

II.

Denial of Shiheiber’s Motion to Strike Chase’s Amended Verified Answer

Shiheiber contends the court abused its discretion in denying her motion to strike Chase’s amended verified answer to her cross-complaint and to grant judgment in her favor. “ ‘An order striking a pleading [citation] is reviewed for abuse of discretion.’ (CLD Constr., Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145.)” (Santa Barbara Channelkeeper v. City of San Buenaventura (2018) 19 Cal.App.5th 1176, 1187.)

Chase filed an answer to Shiheiber’s operative cross-complaint on September 7, 2011. It filed an amended, verified answer on September 28, 2011. Shiheiber did not timely file a motion to strike the answer. (Code Civ. Proc., §§ 430.40, subd. (b), 435, subd. (b); Cal. Rules of Court, rule 3.1322.)

Chase served the original and amended answers on Shiheiber, who was at the time representing herself. Although she disputed she was served, Shiheiber propounded written discovery on Chase in both 2012 and 2013 concerning its denials to particular allegations in the cross-complaint. On August 5, 2015, over four years later, Shiheiber orally moved to strike Chase’s amended answer and the court denied the motion. Thereafter, Shiheiber repeatedly raised the issue and the court repeatedly rejected her claims regarding the answer. The court found, on ample evidence, that Chase’s answer was filed, but through a clerical error attributable to the court, it was not placed in the court file. Chase produced evidence that it had filed and served the amended answer on Shiheiber on September 28, 2011. Specifically, Chase produced a file-stamped copy of the amended answer along with the confirmation receipts and invoices it received from the third-party service it used to file the original and amended answers. The trial court reasonably found the amended answer had been filed and was simply missing from the clerk’s file due to a clerical error. Shiheiber has failed to prove that the trial court abused its discretion in refusing to strike the verified amended answer.

DISPOSITION

The judgment is reversed and the matter is remanded to the trial court for further proceedings in accordance with this opinion. Shiheiber is awarded her costs on this appeal.

STEWART, J.

We concur.

KLINE, P.J.

RICHMAN, J.