Filed 10/22/19 Henard v. Ralph Partners II, LLC CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SIXTH APPELLATE DISTRICT

JOSEPH HENARD et al.,

Plaintiffs and Appellants,

v.

RALPH PARTNERS II, LLC,

Defendant and Respondent.

H046195

(Santa Cruz County

Super. Ct. No. 17CV01327)

Appellants Neidin and Joseph Henard defaulted on a loan secured by a deed of trust on their Santa Cruz residence. Nonjudicial foreclosure proceedings ensued and respondent Ralph Partners II, LLC (Ralph) purchased the property at a trustee’s sale in May 2017. The Henards sued Ralph and various entities involved in the foreclosure proceedings. Ralph successfully moved for judgment on the pleadings. The trial court entered judgment in its favor, from which the Henards now appeal. We affirm.

I. BACKGROUND

A. Factual Summary

In December 2005, the Henards obtained a loan in the amount of $712,500 secured by a deed of trust on their property in Santa Cruz (the Deed of Trust). Argent Mortgage Company, LLC (Argent) was the lender and beneficiary under the Deed of Trust. The Deed of Trust named Town and Country Title Services, Inc. (Town and Country) as the trustee. Ocwen Loan Servicing, LLC (Ocwen) serviced the loan.

In January 2009, Argent assigned its interest in the Deed of Trust to Deutsche Bank National Trust Company (Deutsche Bank) as trustee for the registered holders of Argent Securities Inc., Asset-Backed Pass-Through Certificates, Series 2006-W5. The Henards allege that the assignment was void because Argent was “defunct” as to 2007 and “had no interest . . . to transfer.”

On January 15, 2009, a Notice of Default was recorded, which indicated that the Henards were $39,993.22 in default. On May 26, 2009, Deutsche Bank substituted AHMSI Default Services, Inc. for Town and Country as trustee under the Deed of Trust. That same day, AHMSI Default Services, Inc. recorded a Notice of Trustee’s Sale. On March 23, 2010, a Trustee’s Deed Upon Sale was recorded stating that AHMSI Default Services, Inc., as trustee, had sold the property at public auction on March 11, 2010 to Deutsche Bank for $721,650.

Deutsche Bank substituted Power Default Services, Inc. for AHMSI Default Services, Inc. as trustee under the Deed of Trust on April 6, 2010. Another Trustee’s Deed Upon Sale was recorded on January 12, 2011, which stated that Power Default Services, Inc., as trustee, had sold the property at public auction on January 6, 2011 to Deutsche Bank for $633,250.

Despite these supposed sales of the property, the Henards’ loan servicer, Ocwen, encouraged them to apply for mortgage assistance, including by letter dated June 3, 2016.

Deutsche Bank substituted Western Progressive, LLC (Western Progressive) for Power Default Services, Inc. as trustee under the Deed of Trust on October 11, 2016. Western Progressive recorded a Notice of Default on October 20, 2016, which indicated that the Henards were $68,666.19 in default. On April 4, 2017, Western Progressive recorded a Notice of Trustee’s Sale notifying the Henards that their property would be sold at public sale on May 16, 2017.

Counsel for Ocwen and Deutsche Bank represented to the Henards’ counsel on May 16, 2017 that the sale was being postponed. In fact, it went forward on that day. The Henards allege that the foreclosure trustee informed their counsel that Wedgewood, LLC (Wedgewood) and Margaret Price had purchased the property at the trustee’s sale. “[U]pon giving notice to this entity and individual they declined to record a notice of trustee sale in their names and instead recorded it in the name of Ralph Partners, II, LLC.” Western Progressive recorded a Trustee’s Deed Upon Sale on May 26, 2017 granting title to the property to Ralph. The Trustee’s Deed Upon Sale stated that Western Progressive, as trustee, sold the property at public auction to Ralph for $734,008.07. Wedgewood and Ralph have the same address and telephone number and are represented by the same attorney.

B. Procedural History

The Henards filed the instant action against Deutsche Bank, Ocwen, Town and Country, Wedgewood, and Price on May 18, 2017, two days after the trustee’s sale of the property. The first amended complaint added Ralph as a defendant.

In January 2018, the Henards filed a second amended complaint asserting claims for wrongful foreclosure; violations of the Homeowner Bill of Rights (HBOR) (Civ. Code, §§ 2924.17 and 2923.6) ; unfair competition in violation of Business and Professions Code section 17200 et seq. (UCL); and promissory estoppel. Ralph moved for judgment on the pleadings as to the second amended complaint. The trial court granted Ralph’s motion without leave to amend as to the causes of action alleging violations of the HBOR and with leave to amend as to the wrongful foreclosure, UCL, and promissory estoppel claims.

The Henards filed a third amended complaint in May 2018. It asserts fraud (§1572); HBOR (§§ 2924.17 and 2923.6); UCL; and promissory estoppel claims against Ralph. Ralph moved to strike the HBOR causes of action based on the court’s prior order granting Ralph judgment on the pleadings without leave to amend as to those claims. Ralph also moved for judgment on the pleadings. In an order filed on July 9, 2018, the trial court granted both motions and denied leave to amend.

On July 12, 2018, the court entered a judgment of dismissal against the Henards and in favor of Ralph. The Henards timely appealed.

II. DISCUSSION

A. General Rules of Appellate Review

“[A] fundamental principle of appellate procedure [is] that a trial court judgment is ordinarily presumed to be correct and the burden is on an appellant to demonstrate, on the basis of the record presented to the appellate court, that the trial court committed an error that justifies reversal of the judgment. [Citations.] ‘This is not only a general principle of appellate practice but an ingredient of the constitutional doctrine of reversible error.’ [Citations.] ‘In the absence of a contrary showing in the record, all presumptions in favor of the trial court’s action will be made by the appellate court. . . .’ ‘ “A necessary corollary to this rule is that if the record is inadequate for meaningful review, the appellant defaults and the decision of the trial court should be affirmed.” ’ [Citation.] ‘Consequently, [the appellant] has the burden of providing an adequate record. [Citation.] Failure to provide an adequate record on an issue requires that the issue be resolved against [the appellant].’ [Citation.]” (Jameson v. Desta (2018) 5 Cal.5th 594, 608-609, fn. omitted.) Similarly, failure to include citations to the appellate record may result in waiver of a claim. (Villanueva v. Fidelity National Title Co. (2018) 26 Cal.App.5th 1092, 1110, fn. 8 [“When a brief fails to refer to the record in connection with the points raised on appeal, the appellate court may treat those points as having been waived”].)

B. Standard of Review

“The standard of review for a motion for judgment on the pleadings is the same as that for a general demurrer: We treat the pleadings as admitting all of the material facts properly pleaded, but not any contentions, deductions or conclusions of fact or law contained therein.” (Dunn v. County of Santa Barbara (2006) 135 Cal.App.4th 1281, 1298.) We likewise will not credit the allegations in the complaint where they are contradicted by facts that either are subject to judicial notice or are evident from exhibits attached to the pleading. (Hill v. Roll Internat. Corp. (2011) 195 Cal.App.4th 1295, 1300 (Hill).) We review de novo whether a cause of action has been stated as a matter of law. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) We do not review the validity of the trial court’s reasoning, and therefore will affirm its ruling if it was correct on any theory. (Hill, supra, at p. 1300.)

“[I]t is an abuse of discretion to grant a motion for judgment on the pleadings without leave to amend ‘ “if there is any reasonable possibility that the plaintiff can state a good cause of action.” ’ ” (Dudley v. Department of Transportation (2001) 90 Cal.App.4th 255, 260.) The appellant bears the burden of showing abuse of discretion and carries that burden by showing how the complaint can be amended to state a cause of action. (Ibid.)

C. Waiver Resulting from Deficiencies in Appellants’ Brief

The record produced by the Henards is manifestly inadequate to permit meaningful review of the challenged trial court decisions. The Henards appeal from a judgment of dismissal entered following the grant of two motions for judgment on the pleadings. Yet, astonishingly, they did not designate the relevant pleadings (the second and third amended complaints), the dispositive motions, or the associated briefing for inclusion in the record. Their failure to present an adequate record for review is grounds for affirmance. (See Oliveira v. Kiesler (2012) 206 Cal.App.4th 1349, 1362.) However, because we have granted Ralph’s motion to augment the record to include the second and third amended complaints and Ralph’s motions, we will not affirm on that basis.

The appeal is procedurally deficient for another reason: the Henards’ only brief on appeal is nearly devoid of record citations. Indeed, there is not a single citation to the record in their factual summary of the case or in their argument, in violation of rule 8.204(a)(1)(C) of the California Rules of Court. Therefore, all claims of error have been waived. (See City of Lincoln v. Barringer (2002) 102 Cal.App.4th 1211, 1239 [declining to consider arguments unsupported by any citations to the record]; Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1246 [“ ‘[i]f a party fails to support an argument with the necessary citations to the record, . . . the argument [will be] deemed to have been waived.’ ”].)

D. The Trial Court Did Not Err in Granting Judgment on the Pleadings to Ralph

Had the Henards not waived their appellate claims, we would affirm on the merits.

1. The Henards Failed to State a Claim Against Ralph For Violating Section 2923.6

The Henards contend the trial court erred in granting judgment on the pleadings to Ralph on the third cause of action in the second amended complaint, which alleged that Ralph violated section 2923.6. We are not persuaded.

At the time of the trustee’s sale, section 2923.6, subdivision (c) provided: “If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower’s mortgage servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized 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.” (Stats. 2012, ch. 87 § 7.) That provision was designed to “prohibit[] ‘dual tracking,’ which occurs when a bank forecloses on a loan while negotiating with the borrower to avoid foreclosure. [Citation.]” (Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272.) “After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to [s]ection 3281, resulting from a material violation of [s]ection . . . 2923.6 . . . by that mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent where the violation was not corrected and remedied prior to the recordation of the trustee’s deed upon sale.” (§ 2924.12, subd. (b).)

The second amended complaint alleged that, on the day of the trustee’s sale, the Henards submitted “to the agent for Defendants” a complete loan modification application, including documentation of a “material financial change since the last time [they] had been reviewed for a modification.”

The Henards fail to allege that Ralph violated section 2923.6 because they do not allege that Ralph was a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent or that Ralph conduced the trustee’s sale. The Henards do not even attempt to show that they could amend the complaint to state a cause of action for violating section 2923.6. Accordingly, the trial court did not err in denying the Henards leave to amend.

2. The Henards Failed to State a Claim Against Ralph For Violating Section 2924.17

Section 2924.17, subdivision (a) requires that certain foreclosure-related documents, including notices of sale, be “accurate and complete and supported by competent and reliable evidence.” Section 2924.17, subdivision (b) requires a mortgage servicer to “ensure that it has reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose, including the borrower’s loan status and loan information,” before recording or filing such foreclosure-related documents. “After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to [s]ection 3281, resulting from a material violation of [s]ection . . . 2924.17 by that mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent where the violation was not corrected and remedied prior to the recordation of the trustee’s deed upon sale.” (§ 2924.12, subd. (b).)

The second amended complaint alleged that the defendants failed to review the Henards’ “file competently with reliable evidence before” recording a 2010 Notice of Trustee’s Sale and the Trustees Deed Upon Sale recorded on January 12, 2011.

The Henards fail to allege that Ralph violated section 2924.17 because they do not allege that Ralph was a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent or that Ralph had any involvement in the foreclosure proceedings. The Henards’ claim for violation of section 2924.17 also fails because that provision was not in effect until 2013, years after the documents at issue were recorded. (Stats. 2012, ch. 87 § 20 [adding section 2924.17]; Rockridge Trust v. Wells Fargo, N.A. (N.D.Cal. 2013) 985 F.Supp.2d 1110, 1152 [HBOR is not retroactive].) Again, the Henards do not attempt to show the complaint could be amended to state a cause of action for violating section 2924.17. Accordingly, the trial court did not err in denying the Henards leave to amend.

3. The Henards Failed to State a UCL Claim Against Ralph

“The UCL prohibits, and provides civil remedies for, unfair competition, which it defines as ‘any unlawful, unfair or fraudulent business act or practice.’ ” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320.)

The thrust of the UCL claim, as alleged in the third amended complaint, is that the loan agreement was unlawful and predatory. Ralph did not market, fund, service, or otherwise have any involvement with the loan, such that allegations about the unlawful and predatory nature of the loan agreement do not state a claim against Ralph.

Statutory violations are independently actionable as unlawful business practices under the UCL’s unlawful prong. (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1196.) And the third amended complaint alleges Ralph violated section 1572 (second cause of action), section 2924.17 (third cause of action), and section 2923.6 (fourth cause of action). To the extent the Henards’ UCL cause of action is predicated on those alleged statutory violations, it fails because the trial court concluded that the Henards failed to allege violations of those statutes by Ralph, we have affirmed as to sections 2924.17 and 2923.6, and the Henards have not appealed as to section 1572.

On appeal, the Henards argue that Ralph violated the UCL by purchasing the property despite being “aware that there was an ongoing litigation regarding title . . . .” But that assertion lacks record support. There is no allegation that any litigation regarding title to the property was pending at the time of the May 16, 2017 sale. This lawsuit was filed on May 18, 2017. Nor is there any allegation that Ralph had notice of the Henards’ asserted rights in the property prior to the May 16, 2017 sale. Rather, the third amended complaint alleges that the Henards’ counsel gave notice to Wedgewood and Price after the sale was conducted on May 16, 2017. Even if Wedgewood and Ralph may be treated as a single entity, as the Henards suggest, the allegations in the complaint establish that notice was given after the sale took place.

For the foregoing reasons, the third amended complaint failed to state a UCL claim against Ralph. Because the Henards do not attempt to show that the complaint could be amended to state a UCL claim against Ralph, the trial court did not err in denying them leave to amend.

III. DISPOSITION

The judgment is affirmed. Respondent shall recover its costs on appeal.

_________________________________

ELIA, ACTING P. J.

WE CONCUR:

_______________________________

BAMATTRE-MANOUKIAN, J.

_______________________________

MIHARA, J.

Henard et al. v. Ralph Partners II, LLC

H046195