Filed 6/25/20 Saatchi v. Ocwen Loan Servicing, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

MALAKEH SAATCHI,

Plaintiff and Appellant,

v.

OCWEN LOAN SERVICING, LLC, et al.,

Defendants and Respondents.

G057619

(Super. Ct. No. 30-2017-00911394)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Robert J. Moss, Judge. Affirmed.

LKP Global Law and Albert T. Liou for Plaintiff and Appellant.

Houser & Allison, Robert W. Norman, Jr., Emilie K. Edling and Neil J. Cooper for Defendants and Respondents.

* * *

In 2006, Malakeh Saatchi took out an $800,000 loan secured by her Newport Beach property. At the time, the lender was a predecessor of Deutsche Bank National Trust Company, and the loan servicer was Litton Loan Servicing, LP. In September 2011, Ocwen Loan Servicing, LLC, replaced Litton as the loan servicer. In 2010, Saatchi filed a lawsuit against Deutsche Bank based on its attempts to foreclose on the property, and in November 2011, she settled the lawsuit with Deutsche Bank, Litton, and Ocwen (collectively “Ocwen”). The settlement provided that Saatchi’s new monthly loan payment would be $2,902.76.

In 2012, Ocwen paid Saatchi’s delinquent property taxes and in 2013, it sought to recoup the tax payments by increasing Saatchi’s monthly loan amount. When Saatchi failed to pay the increased amount Ocwen rejected her monthly payments because it was only a partial payment of the amount Saatchi owed. After Saatchi sued, Ocwen moved for summary judgment, arguing its conduct complied with the modified loan agreement. Following arguments and evidence at the hearing, the trial court granted summary judgment.

Saatchi contends the trial court erred in not providing a statement of reasons, denied her due process by possibly relying on new evidence submitted with the reply or at the hearing, and erred in concluding Ocwen met its burden to show it is entitled to judgment as a matter of law. As explained further below we conclude the failure to provide a statement of reason, if error, is harmless. We also conclude Saatchi has not shown she was denied due process. Finally, on the merits, we conclude Ocwen is entitled to summary judgment because it complied with the terms of the settlement and loan modification agreements. Accordingly, we affirm.

 

I

FACTUAL AND PROCEDURAL BACKGROUND

A. Complaint and First Amended Complaint

On March 28, 2017, Saatchi filed a complaint against Ocwen, alleging causes of action for elder financial abuse, breach of contract, an accounting, intentional and negligent infliction of emotional distress, and declaratory and injunctive relief. Ocwen demurred to the complaint, arguing the claims were time-barred. The trial court agreed, and sustained the demurrer with leave to amend.

Saatchi later filed a First Amended Complaint (FAC), alleging the same causes of action. Ocwen demurred to the FAC on the ground the claims alleged were time-barred, and again, the trial court sustained the demurrer with leave to amend.

B. Second Amended Complaint

On May 17, 2018, Saatchi filed her Second Amended Complaint (SAC), alleging causes of action for elder financial abuse, breach of contract, intentional infliction of emotional distress, and declaratory relief. The SAC alleged that Saatchi, a 68-year-old woman who owned a Newport Beach residence, and she took out a loan secured by the property in 2006. In 2010, she sued to prevent foreclosure on her property. In November 2011, Saatchi and Ocwen agreed to settle the litigation, and they entered into a Settlement Agreement (SA) and a loan Modification Agreement (MA), attached as exhibits to the complaint.

The SA and MA set the new total monthly payment at $2,902.76 (which includes principal, interest, taxes and insurance) due on January 1, 2012, and continuing for the remainder of the loan. During 2010 and 2011, Ocwen had paid property taxes in the approximate amount of $17,000. The SAC alleged that based on certain provisions in the SA and MA, “Ms. Saatchi reasonably understood these paragraphs, along with Defendants[’] representations at the time of the execution of the Agreements, to mean that all of her liabilities related to the Property, including the 2010 and 2011 taxes, were current and not in default.”

The SAC alleged that on January 9, 2013, Ocwen informed Saatchi it would increase the monthly payment to $3,486.42 to cover for the 2010 and 2011 tax advances. Saatchi disagreed she owed the amounts, and continued to pay $2,902.76, the amount specified in the SA and MA. Although Ocwen accepted her payments, in September 2013, it rejected them as full and timely payments, and instead placed them in a “suspense account” and used them to satisfy late fees and penalties. In addition, beginning in March 2014, Ocwen reported her account to the credit bureau. Finally, in 2016, Ocwen threatened foreclosure based on Saatchi’s failure to pay the increased monthly payment.

In the elder financial abuse cause of action, the SAC alleged Saatchi was 65 years old in June 2013. It further alleged that after Saatchi turned 65 years old, Ocwen continuously misappropriated and retained Saatchi’s property by applying her monthly payments to a suspense account to satisfy late fees and other penalties.

In the breach of contract claim, the SAC alleged Saatchi performed all her obligations under the SA and MA, but Ocwen “breached the Agreements in September 2013 by rejecting Ms. Saatchi’s full payment amount under the Agreements.” The SAC alleged the contract claim was timely because Ocwen breached the agreements in September 2013, and Saatchi had four years from the breach to bring a claim.

In the declaratory relief cause of action, Saatchi sought a judicial determination to fix her monthly loan payment for the remaining term at $2,902.76, that Ocwen’s adjustment and retroactive tax advance payments were improper, and that Ocwen wrongfully rejected and misappropriated her monthly payments.

Ocwen filed an Answer to the SAC, generally denying the allegations and raising affirmative defenses, such as the statute of limitations.

 

C. Motion for Summary Judgment on SAC

Ocwen moved for summary judgment on the SAC, arguing Saatchi’s claims lacked merit because the loan documents expressly permitted increased monthly payments, the rejection of partial payments, and the pursuit of remedies on default. Ocwen asserted the following facts in the separate statement.

In 2006, Saatchi obtained an $800,000 loan secured by a Deed of Trust and Promissory Note. Saatchi defaulted on the loan in April 2009, and notice of trustee’s sale was recorded on the property in July 2009. In June 2010, Saatchi filed a lawsuit challenging the foreclosure, and in November 2011, the parties settled the lawsuit by entering into a settlement agreement and a loan modification agreement.

At the time of the loan modification, the 2011 property taxes were payable, but not past due. In November 2011, Saatchi received an overdue tax bill and tendered it to Ocwen. In January 2012, Ocwen paid the past due tax in the amount of $4,209.86, and later that year paid the 2012 property taxes. That same month, Ocwen’s escrow analysis showed higher estimated taxes and therefore increased the monthly payment from $2,902.76 to $2,904.53. Saatchi paid $2,902.76 for several months before increasing her monthly payment to the required $2904.53.

In January 2013, Ocwen performed another escrow analysis which revealed the escrow balance was negative due to the January 2012 tax payment. In January 2013, Ocwen sent a letter informing Saatchi it would increase her monthly payments to $3,486.42, effective March 1, 2013, to recoup the tax payment and provide for a federally mandated cushion. However, Saatchi only paid the monthly amount of $2,904.53. Ocwen accepted the “insufficient payments, held them in suspense, and, when [Saatchi] had paid enough to constitute a full payment, applied them.” When Saatchi attempted to make a $2,904.53 payment on September 26, 2013, Ocwen rejected the payment and all later payments.

Ocwen argued it was entitled to summary judgment because there was no triable issue of material fact on any of Saatchi’s claims since its conduct complied with the MA and Deed of Trust. According to Ocwen, before the 2011 settlement and loan modification agreements, the loan was nonescrowed: Saatchi was responsible for paying property taxes directly. The MA changed the loan to require placing a portion of the monthly loan payment into an escrow account to pay property taxes. In the event Saatchi failed to keep her loan current and pay her taxes, the MA also permitted Ocwen to advance the tax amounts and increase the monthly payments to compensate for the escrow shortage. Moreover, the MA expressly stated that except as specifically modified, the terms and conditions of the Deed of Trust and Promissory Note continued to remain in effect. The Deed of Trust permitted the lender to advance tax payments if Saatchi defaulted on her taxes, and it authorized the lender to recover the advances within 12 months. The Deed of Trust also permitted the lender to return any payment or to accept insufficient payments, hold them in suspense and when Saatchi paid enough to constitute the full payment, apply the amount to satisfy the payment.

In support of its motion, Ocwen submitted the Deed of Trust and Promissory Note. It also submitted excerpts from Saatchi’s deposition testimony admitting that until the time of the loan modification, she was responsible for paying property taxes.

D. Opposition to Summary Judgment Motion

Saatchi’s opposition to the summary judgment motion argued Ocwen failed to meet its burden to show there are no triable issue of facts on her claims. She contends “the declarations and evidence presented in this opposition, as well as Defendants’ own equivocal evidence, highlight the fact that numerous, disputed issues of material fact exist that preclude entry of summary judgment.” Specifically, she argued Ocwen “gloss[es] over the issue of whether Defendants’ payment of the subject property tax bill, owed on November 1, 2011, in the amount of $4,209, could be charged to Ms. Saatchi’s new escrow account or whether Defendants were obligated to pay that bill in accordance with the Modification Agreement and Settlement Agreement.”

Saatchi argued the MA required Ocwen to pay all property taxes due before the effective date of the agreement because it states as a condition of the loan modification that the property “‘is subject to clear title.’” She further argued Ocwen misappropriated her monthly payments for a wrongful use or with an intent to defraud, alleging that although Ocwen began charging Saatchi for the property tax advances, it did not notify Saatchi of its actions. Rather, “Defendants hid their actions despite Ms. Saatchi’s calls and reassured her there was no issue with payments [by accepting her payments], until they rejected Ms. Saatchi’s September 2013 payment.”

In a supporting declaration, Saatchi stated when she first purchased the Newport Beach property she began paying the property taxes, but in 2009 the lender formed an escrow account to pay the property taxes on her behalf. Saatchi also stated Ocwen stopped sending her loan statements in October 2012, and she first received notice in January 2013 that her account was negative due to the tax advances. She called Ocwen numerous times to object, and although Ocwen did not respond, it accepted her payments through August 2013. In addition, Saatchi stated “Defendants were contractually obligated to pay the November 1, 2011 property tax bill as a condition of the Modification Agreement and Settlement Agreement, in order to clear title and to resolve all pending claims relating to the loan.”

Saatchi also raised evidentiary objections to the declaration of Ocwen’s record custodian, Kevin Flannigan, submitted with the summary judgment. One of the statements she objected to was Flannagan’s assertion that before the November 2011 loan modification, Saatchi was responsible for paying the property taxes directly and there was no escrow account. Saatchi contended the statements lacked foundation or were conclusory, and that Flannigan lacked personal knowledge.

 

E. Reply

In reply, Ocwen pointed out that in sustaining the demurrers, the trial court had ruled that Saatchi’s claims based on Ocwen’s payments of taxes and efforts to recoup the tax advances were time-barred. Ocwen noted the taxes were paid in January 2012, Saatchi was notified her payments would increase in January 2013, and her payments began increasing in March 2013. In response to Saatchi’s argument that the MA required Ocwen to clear title, Ocwen noted Saatchi presented no evidence that the taxes, which were not late until December 2011, made the title unclear. In addition, Ocwen contended the MA did not place the obligation to clear title on Ocwen. Finally, even if Ocwen breached the MA by failing to clear title, the failure to pay occurred in November 2011 and the limitations period had run out.

Ocwen responded to Saatchi’s evidentiary objections, arguing Flannigan had personal knowledge because he stated in his declaration he reviewed the business records relating to Saatchi’s loans. It objected to Saatchi’s declaration that the lender began paying property taxes on her behalf in 2013, arguing the statement contradicted her deposition testimony.

F. Order Granting Summary Judgment

The trial court granted Ocwen’s summary judgment motion without stating its reasons. Saatchi filed a motion seeking a written ruling on the summary judgment stating the reasons for the court’s ruling on the motion and on the evidentiary objections. Ocwen opposed the motion, arguing the court’s order was sufficient, and even if insufficient, any error was harmless because summary judgment orders are reviewed de novo. Ocwen acknowledged that at the summary judgment hearing, it raised several new cases as well as factual issues recounted in the moving and reply papers.

The trial court issued a new order granting summary judgment without stating reasons, denying the opposed request for judicial notice, and declining to rule on the evidentiary objections to Flannigan’s statements Saatchi paid the property taxes prior to November 2011. The court entered a judgment dismissing with prejudice the entire complaint.

Saatchi timely appealed. In her designation of the appellate record, she elected to proceed on an appellant’s appendix, and without a record of the oral proceedings in the superior court.

II

DISCUSSION

A. Standard of Review

A motion for summary judgment is properly 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 judgment as a matter of law.’” (Biancalana v. T.D. Service Co. (2013) 56 Cal.4th 807, 813.) “The moving party bears the burden of showing the court that the plaintiff ‘has not established, and cannot reasonably expect to establish, a prima facie case. . . .’ [Citation.]” (Miller v. Department of Corrections (2005) 36 Cal.4th 446, 460.) “We review summary judgment appeals by applying the same three-step analysis applied by the trial court: First, we identify the issues raised by the pleadings. Second, we determine whether the movant established entitlement to summary judgment, that is, whether the movant showed the opponent could not prevail on any theory raised by the pleadings. Third, if the movant has met its burden, we consider whether the opposition raised triable issues of fact.” (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 939-940.) “‘Where the evidence presented by defendant does not support judgment in his favor, the motion must be denied without looking at the opposing evidence, if any, submitted by plaintiff.’ [Citation.]” (Id. at p. 940.)

“On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. [Citation.]” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) “Because a summary judgment denies the losing party its day in court, we liberally construe the evidence in support of that party and resolve doubts concerning the evidence in that party’s favor.” (Creekridge Townhome Owners Assn., Inc. v. C. Scott Whitten, Inc. (2009) 177 Cal.App.4th 251, 255.)

In reviewing de novo a trial court’s grant of a motion for summary judgment, we also review de novo the interpretation of a contract “where the interpretation does not turn on the credibility of extrinsic evidence.” (Morgan v. City of Los Angeles Bd. of Pension Comrs. (2000) 85 Cal.App.4th 836, 843.) A triable issue of fact does not arise if the language of a contract might reasonably support two different constructions nor is a triable issue of fact created by the introduction of extrinsic evidence to explain an ambiguity unless the proper interpretation of the contract depends on evaluating conflicting evidence. (Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th 370, 390 [“[e]ven where uncontroverted evidence allows for conflicting inferences to be drawn, our Supreme Court treats the interpretation of the written contract as solely a judicial function”]; ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1266-1267 [when extrinsic evidence is not in conflict, construction of an agreement is a question of law for the court “‘even if the evidence is susceptible to multiple interpretations’”]; see also Sprinkles v. Associated Indemnity Corp. (2010) 188 Cal.App.4th 69, 76 [“[w]hen the facts are undisputed . . . the interpretation of a contract, including the resolution of any ambiguity, is a question of law”].)

B. Ocwen Is Entitled to Summary Judgment

Before addressing the merits of Ocwen’s summary judgment motion, we first address Saatchi’s contention we must reverse the judgment because the trial court’s order granting summary judgment does not comply with Code of Civil Procedure section 437c, subdivision (g), which directs the court to provide a statement of reasons for the grant of summary judgment. Assuming the order at issue here fails to comply with Code of Civil Procedure section 437c, subdivision (g), the court’s failure to provide a sufficient statement of reasons is not automatic grounds for reversal, since “‘[i]t is the validity of the ruling which is reviewable and not the reasons therefor. [Citation.]’” (Ruoff v. Harbor Creek Community Assn. (1992) 10 Cal.App.4th 1624, 1628; see also Goldrich v. Natural Y Surgical Specialities, Inc. (1994) 25 Cal.App.4th 772, 782.) As explained further below, under our de novo review of the summary judgment motion, we conclude Ocwen is entitled to summary judgment. Saatchi’s reliance on Santa Barbara Pistachio Ranch v. Chowchilla Water Dist. (2001) 88 Cal.App.4th 439, is misplaced because in contrast to that case, resolution of the issue here does not require credibility determinations and the contractual interpretation is not particularly complex. Accordingly, “[t]he lack of a statement of reasons presents no harm where . . . our independent review establishes the validity of the judgment.” (Soto v. State of California (1997) 56 Cal.App.4th 196, 199; see also Conley v. Matthes (1997) 56 Cal.App.4th 1453, 1459-1460 [applying harmless error standard].)

Saatchi also complains her due process rights were violated because the trial court may have considered new arguments or evidence raised in the opposition and at the summary judgment hearing. Of course the moving party must have an opportunity to reply to an opposition, and arguably a reply would entail arguments and evidence directly responding to those raised in the opposition. But Saatchi has not met her burden to show the trial court committed prejudicial error. She failed to include a transcript of the summary judgment hearing, and therefore cannot demonstrate the court denied her an opportunity to respond to the arguments and evidence raised in the reply or at the hearing. (Garamendi v. Golden Eagle Ins. Co. (2004) 116 Cal.App.4th 694, 706 [“The key elements of procedural due process are notice and an opportunity to be heard.”].)

Turning to the merits, the gist of the SAC is that Ocwen violated the 2011 settlement and loan agreement by seeking to recoup its 2012 payment of a November 2011 property tax bill and rejecting Saatchi’s 2013 monthly loan payments as satisfying in full her obligation under the modified loan. Saatchi’s claims all arise from Ocwen’s purported misconduct.

In its summary judgment, Ocwen presented evidence the MA permitted it to pay Saatchi’s delinquent taxes and recoup the tax advance by increasing the monthly payment. Specifically, section 5 of the LMA states: “[W]hether the loan is escrowed or non-escrowed, in the event the borrowers fail to keep current and pay either their taxes or any type of insurance . . . then Investor may advance these amounts to protect its security interest and if necessary, increase the amount of the monthly mortgage payment in order to compensate for the escrow shortage which will occur by said advancement.”

Ocwen also produced evidence the Deed of Trust permits it to reject or accept partial payments. In the latter case, Ocwen could place the payment in a suspense account and apply the partial payments to satisfy the full monthly payment. Specifically, section 1 of the Deed of Trust states: “Lender may return any payment or partial payment if the payment or partial payments are insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payment in the future, but Lender is not obligated to apply such payments at the time such payments are accepted. . . . Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. . . . If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure.”

Saatchi does not dispute the MA allows Ocwen to advance payments on any post-2011 taxes and recoup the tax advances by increasing the monthly loan payment. Nor does she dispute the Deed of Trust allows Ocwen to reject or accept any partial payments or hold the payments in suspense. Rather, she argues those provisions in the MA and Deed of Trust do not apply because the 2011 settlement contemplated Ocwen would pay the 2011 tax bill. In support, she cites language in the SA and MA that the settlement made her loan current and resolved all claims between the parties. She notes the MA requires the property to have clear title. Finally, she argues the language in the MA and SA that her new “total” payment, inclusive of taxes, is $2,902.76, precludes charging her for prior tax advances.

Saatchi’s argument flounders on the undisputed fact that Ocwen paid the tax bill in January 2012, after the parties settled their case. Thus, the provisions of the MA and Deed of Trust apply to that 2012 tax advance. As to her contention the settlement resolved all claims between the parties, at the time of the November 2011 settlement, Ocwen did not have a claim against Saatchi for tax advances because the taxes were not yet delinquent.

As to the argument the MA required the subject property have clear title, Saatchi has not provided any authority the subject property would not have clear title merely because property taxes had been assessed but were not yet delinquent. Moreover, the specific provision states: “The Effective Date: This Modification is subject to clear title and will be effective November 18, 2011 on condition that a clear and marketable title policy can be issued.” The provision does not provide that Ocwen must clear title and, to the extent a clear title is a precondition of the MA and payment of an outstanding tax bill is a requirement to clear title, the failure to pay the 2011 tax bill would render the MA ineffective and thus unenforceable against Ocwen. We reject that interpretation as being inconsistent with the parties’ postsettlement conduct.

Finally, the fact the new “total” payment would be $2,902.76 does not preclude Ocwen from seeking to recoup tax advances. As noted, section 5 of the MA specifically contemplates that Ocwen may recoup tax advances. Moreover the $2,902.76 amount is not fixed for the life of the loan. Indeed, it is undisputed Ocwen increased the monthly loan payment from $2,902.76 to $2,904.53 in 2012 to account for increased taxes, and Saatchi paid that increased amount without complaint. It was Ocwen’s refusal to accept the $2,904.53 payments that led to this action.

Finally, Saatchi argues her declaration shows, or raises a triable issue of fact, that the lender was paying the property taxes on her behalf before the 2011 settlement, that the lender and Ocwen were aware of the November 2011 tax bill, and that they agreed to pay the 2011 tax bill as part of the settlement. Only the last factual assertion is material to the summary judgment. The fact the lender was collecting money from Saatchi and placing it into an escrow account to pay the tax bill does not suggest the lender would pay the tax bill for Saatchi without seeking recompense. Similarly, Ocwen’s knowledge of the outstanding tax bill does not raise a trial issue that Ocwen agreed to pay the tax bill without recompense.

“California recognizes the objective theory of contracts [citation], under which ‘[i]t is the objective intent, as evidenced by the words of the contract, rather than the subjective intent of one of the parties, that controls interpretation’ [citation]. The parties’ undisclosed intent or understanding is irrelevant to contract interpretation.” (Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 956.) Saatchi’s declaration only asserts in a conclusory manner that Ocwen is contractually obligated to pay the 2011 tax bill as part of the settlement. It does not state that Saatchi informed Ocwen of her understanding during settlement discussions that Ocwen would pay the outstanding 2011 tax bill without seeking recompense. Aside from the reference to taxes in the total payment provision, the SA and MA do not otherwise reference taxes, let alone who would pay any outstanding tax bills. We conclude Saatchi has not raised a triable issue on whether Ocwen agreed in the 2011 settlement to pay the 2011 tax bill and not seek to recover its tax payments from Saatchi.

In sum, Ocwen met its burden to show it is entitled to summary judgment on Saatchi’s claims. Those claims assume Ocwen’s conduct contravened the SA and MA. Our independent review of the agreements shows Ocwen’s conduct complied with the agreements. Saatchi has not shown a triable issue of material fact that would affect our interpretation of the agreements. Thus, Saatchi’s claims fail as a matter of law.

III

DISPOSITION

The judgment is affirmed. Respondents are entitled to their costs on appeal.

ARONSON, J.

WE CONCUR:

MOORE, ACTING P. J.

THOMPSON, J.