17-CIV-04490 JOHN T. BOOTH, ET AL. VS. THE BANK OF NEW YORK MELLON, ET AL.

JOHN T. BOOTH THE BANK OF NEW YORK MELLON
SARAH SHAPERO JORDAN S. YU

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, MOTION FOR SUMMARY ADJUDICATION TENTATIVE RULING:

Defendants’ motion for summary judgment is DENIED. The motion fails to dispose of all causes of action. Defendants’ alternative motion for summary adjudication is DENIED as to all three causes of action.

A. Procedural Deficiencies. Defendants have submitted 19 exhibits, consuming approximately 400 pages. Plaintiffs have submitted 13 exhibits across more than 200 pages. Both parties failed to comply with the Rules of Court that require exhibits to be tabbed. (CRC Rule 3.1110(f)(3). Rules of Court have the force of law to the extent that they are not inconsistent with legislative enactments and constitutional provisions. (In re Richard S. (1991) 54 Cal. 3d 857, 863.) By failing to comply with Rule 3.1110(f)(2), Defendants and Plaintiffs have imposed an unnecessary burden on the Court’s efforts to located exhibits. Counsel for all parties are directed to comply with Rule 3.1110 fully in the future, in this case and all other cases.

B. Ruling on Objections.

1. Plaintiff’s Objections.

Objection No. 1 is sustained as to the quoted contents of the writing (beginning at line 6), but overruled as to the remainder.

Objection No. 2 and 3 are sustained for lack of foundation. (Declaration of Costello para. 21; Declaration of Guilliam para. 9.)

Objection No. 4 is sustained as to the contents of the email, but overruled as to the fact the email was received.

2. Defendant’s Objections.

Objection No. 1 is sustained for lack of foundation, lack of personal knowledge, improper opinion.

Objection No. 2 is sustained as to “without a true foreclosure sale,” for lack of foundation, and legal conclusion.

Objection No. 3 is sustained for lack of foundation (standard of care).

Objections No. 4, 5, 6, 7, and 10, are overruled.

Objection No. 8 is sustained for lack of foundation and improper opinion

Objections 9 and 11 are sustained for lack of foundation, lack of authentication, and hearsay.

C. First Cause of Action (Wrongful Foreclosure)

The motion is denied as to the first cause of action for wrongful foreclosure. The cause of action for wrongful foreclosure alleges four wrongful acts: (1) the sale did not occur at a public auction, (2) the sale price was insufficient, (3) the sale occurred despite a postponement, and (4) the sale occurred before Plaintiffs’ loan modification appeal had been denied. (SAC paras. 21-27.) The motion fails to establish that the first two claims lack merit, but demonstrates, for purpose of summary judgment/adjudication, that the third and fourth claims lack merit.

1. Triable Issues of Fact Exist About Whether a Public Auction Occurred.
Defendant cites UMFs 19, 20, and 21 for the contention that the property was sold at a public auction.

a. The Motion Fails to Establish UMF 19

UMF 19 states that “a public auction took place” at the Hall of Records in Redwood City, California, supported by only Costello Declaration paragraph 21 and Guilliam Declaration paragraph 9. UMF cites no other evidence. The Court sustains the objection to Ms. Costello’s declaration, which does not state that the sale was a public auction. Further, she previously testified that she was not there. (Costello Depo. at 57:22-23 & 59:17 (Exh. A to Decl. of Shapero.) Mr. Guilliam states that the auction occurred at the Hall of Justice, but the statement lacks foundation and is conclusory. The motion cites no other evidence in support of UMF 19. Defendants fail to establish Material Fact 19.

b. UMF 20 Is Disputed.

UMF 20 also states that the property “was sold at a public auction,” citing Guilliam Declaration para. 10 and Costello Declaration para. 21. As before, the Court sustains the objection to Costello paragraph 21. However, no objection has been made to Guilliam Declaration paragraph 10, which includes the Certificate of Sale (Exhibit 16). The Certificate of Title, however, does not state that a public auction occurred, and it does not identify where the auction occurred. Exhibit 16 does not support Defendant’s motion. The only supporting evidence is Mr. Guilliam’s statement, which lacks foundation.

Notwithstanding Mr. Guilliam’s testimony for UMF 20, a triable issue of fact exists because Plaintiff testified that Defendant’s representative told him the sale was a “desk sale.” (BOOTH Depo. at 55:5-9, 56:1-5, & 59:18-21.) Defendant told Plaintiff that BONY had simply transferred title back to itself “in the office.” (Oppos. to UMF 25; (BOOTH Depo at 57:10-14 (Plaintiff’s Exhibit B).) Finally, Defendant confirmed in a phone call on June 26, 2017, that “the desk sale was on June 6.” (Decl. of BOOTH, Exh. H, at p. 5). During the phone conversations, Shellpoint’s representative did not speak the words, “desk sale,” but when asked if the sale was a “desk sale,” the representative responded affirmatively.

A conflict in evidence exists between the above “desk sale” testimony and Mr. Guilliam’s statement that the sale was at a public auction. A triable issue of fact exists about whether the sale was a “desk sale” or a proper public auction.

c. UMF 21 Is Supported only by Inadmissible Evidence.

UMF 21 states that no other interested persons bid on the property and that four witnesses were present at the sale. The cited evidence, Exhibit 17, is an email dated June 6, 2017. However, the email is unauthenticated by the sender or any recipient of it. The email also does not state whether the sale was public.

2. The Motion Fails to Demonstrate that the Sale Price Was Insufficient.
Defendants’ argument is based on Plaintiff BOOTH’s statement in his appeal that he believed the property was worth $1.45 million, meaning that the $2.4 million purchase price was not insufficient. A homeowner may give opinion testimony about the value of his own property. (Evid. Code sect. 813, subd. (a)(2).)

However, the property owner is still bound by the same rules of admissibility of evidence as is any other witness. (City of Gilroy v. Filice (1963) 221 Cal.App.2d 259, 268.) Plaintiff admits that he has no qualifications to appraise property. (BOOTH Decl. para. 13.) By comparing the sale price with Plaintiff’s belief of what the property’s value was, without offering any basis for that belief, the motion fails to demonstrate that the sale price exceeded the fair market value of the property.

Finally, Plaintiff Booth asserts that BONY provided him with appraisals of $2.86 million and $3.2 million. These appraisals might support Defendants’ contention that the sale price was not insufficient, but the Court sustains Defendants’ objections to both appraisals. (Defendants’ objections 9 & 11.) If admitted, however, the appraisals would contradict Defendants’ argument (Moving P&A at 3:4-5) that the sale price exceeded the value of the property and create a triable question on that issue.

3. Plaintiffs’ Claim of Dual-Tracking Does Not Raise an Issue of Disputed
Fact

When a borrower has appealed the denial of his loan modification application, he may appeal the decision. The lender may not conduct a trustee’s sale until at least 15 days after the denial of the appeal. (Civ. Code sect. 2923.6, subd. (e)(2).) Plaintiff alleges that Defendant conducted the Trustee’s Sale before Plaintiff’s appeal had been denied (SAC para. 27), but the evidence does not raise an issue of disputed fact.

UMF 15 states that SHELLPOINT responded to Plaintiff’s appeal by letter dated May 9, 2017, informing Plaintiffs that their appeal is denied. (Exhibit 12 to Decl. of Costello).) Plaintiff argues that the letter does not state that the appeal was denied. (Oppos. to UMF 15.) The word “denied” does not appear in the letter, but the language of the letter expressly denies Plaintiff’s proposal of a modification. Further, Plaintiff admitted in deposition that the letter “is a response to your appeal” (BOOTH Deposition at 39:12 – 41:3 (Ex. 19 to Decl. of Guerami).) When asked if he understood the letter to be a denial of the terms Plaintiff requested in his appeal, Plaintiff responded “Yes.” (BOOTH Deposition at 39:12 – 41:3.)

The only evidence controverting the admissions in Plaintiff BOOTH’s deposition testimony is his Declaration in Opposition to MSJ, which states, “In early June 2017, I still had not heard back from SHELLPOINT regarding my appeal.” (Decl. of BOOTH para. 14.) The Court disregards this testimony as impermissible denial of a discovery admission. (See D’Amico v. Bd. of Med. Examiners (1974) 11 Cal. 3d 1, 21.) Plaintiff’s declaration is insufficient to create a triable issue of fact concerning whether the trustee’s sale occurred before 15 days of SHELLPOINT’s denying the loan mod appeal.

Plaintiff’s declaration also states that SHELLPOINT’s contact, Aracely Escmilla, told him that the appeal was still under review and that the sale had been postponed to August 2017. (Decl. of BOOTH para. 14.) Despite the statements by Ms. Escmilla, the undisputed facts are that Plaintiff’s appeal was denied before he phoned her, and the sale was not postponed. Plaintiff’s evidence merely shows that Ms. Escmilla’s information was incorrect, not that a postponement had occurred.

There is no support for Plaintiff’s claim that the Trustee’s Sale occurred less than 15 days after the denial of the appeal. (Civ. Code sect. 2923.6, subd. (e)(2)).) The appeal was denied by letter of May 9, 2017. The sale occurred on June 6, 2017, which was 27 days after denial of the appeal. The allegation that Defendants violated Civil Code section 2923.6 does not raise an issue of disputed fact.

4. There Are No Facts in Dispute that the June 6, 2107 Sale was not Postponed

Plaintiffs’ final contention is that the sale occurred despite being postponed from June 2017 to August 2017. (SAC para. 25.) A borrower must be given notice of any postponement of the trustee’s sale. (Civ. Code sect. 2924g, subd. (a)(5).) Plaintiffs offer no evidence of any Notice that the sale would be postponed a second time to August 2017. Under the undisputed facts, the Trustee’s Sale on June 6, 2017, did not occur during a time the sale had been postponed.

5. Conclusion.

The motion is denied as to the 1st Cause of Action (Wrongful Foreclosure). A triable issue of fact exists about whether the Trustee’s Sale occurred at a public auction, and the Motion fails to establish a prima facie case that the sale price was not insufficient.

D. Third Cause of Action (Elder Abuse)

The motion is denied as to the third cause of action. Defendant’s motion argues that the foreclosure sale is subject to a qualified privilege because “there were no procedural irregularities” in the sale, since “there was a public auction” where the property was sold to BONY. (Moving P&A at 11:7-11, citing UMF 19-21.) As set forth above, however, a triable issue of fact exists about whether the sale was a “public” sale or “desk sale” (see BOOTH Depo. at 55:5-9, 56:1-5, and 59:18-21.) Therefore, a triable issue exists about whether Defendant is entitled to the qualified privilege defense. Further, the motion does not demonstrate that the sale price was not insufficient compared with the property value (Defendants offer no admissible evidence of actual value). The motion is denied as to the 3rd cause of action, Financial Elder Abuse. E. Fourth Cause of Action (Unfair Business Practice)

The motion is denied as to the Fourth Cause of Action. As set forth above, the question of “public sale” versus “desk sale” is a factual dispute, as is the question of whether the sale price was fair. The motion fails to demonstrate the absence of an unlawful or unfair act.

F. Ruling.

Defendants’ motion for summary judgment is DENIED. Defendants’ alternative motion for summary adjudication is DENIED as to the first, third, and fourth causes of action.

Each party shall submit a written order ruling on their respective objections. (See CRC Rule 3.1354(c) (“party submitting written objections to evidence must submit with the objections a proposed order”).)

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Plaintiffs shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.