Filed 11/20/19 Beutel v. Wells Fargo Bank, N.A. 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
SCOTT BEUTEL,
Plaintiff and Appellant,
v.
WELLS FARGO BANK, N.A.,
Defendant and Respondent.
H043427
(Monterey County
Super. Ct. No. M15153)
Appellant Scott Beutel appeals from a judgment dismissing his tort action against Wells Fargo Bank, N.A. (Wells Fargo). Beutel’s residence was subject to two deeds of trust. The first deed of trust secured a 2001 home loan, and the second deed of trust secured a 2003 equity line of credit (ELOC). Wells Fargo’s predecessors, World Bank and Wachovia Bank (referred to interchangeably as Wells Fargo) were the lenders for both the home loan and the ELOC. At some point, Wells Fargo deducted funds from Beutel’s impound account to pay for homeowner’s insurance even though Beutel had always maintained homeowner’s insurance on his residence. Beutel complained to Wells Fargo about these deductions and was told that his account would be credited for the improper deductions. In 2009, Beutel unsuccessfully attempted to pay off the ELOC. He complained to Wells Fargo about this too. In 2010, Beutel stopped making payments on the home loan, assertedly to make up for the insurance deductions from his impound account. Wells Fargo responded by notifying him that he was in default on the ELOC and beginning foreclosure proceedings, though it did not actually foreclose on his residence. It was at this point that Beutel sued Wells Fargo.
Beutel contends on appeal that the superior court erred in sustaining without leave to amend Wells Fargo’s demurrer to his intentional infliction of emotional distress (IIED) and negligent infliction of emotional distress (NIED) causes of action, which were based on Wells Fargo’s actions in refusing to accept his attempts to pay off the ELOC and subsequently beginning foreclosure proceedings on the ELOC deed of trust. Beutel also maintains that the superior court erred in summarily adjudicating his causes of action for breach of the implied covenant of good faith and fair dealing, conversion, and unfair business practices. The implied covenant cause of action was based on Wells Fargo’s attempt to foreclose after rejecting his attempts to pay off the ELOC. The conversion cause of action was based on the deductions for insurance. The unfair business practices cause of action was based on the terms of the 2001 home loan. The superior court found that these causes of action could not succeed because Beutel had no evidence of damages from the alleged breach of the implied covenant, could not identify any specific sum that had been converted, and had not filed his action within the limitations period for the unfair business practices cause of action.
We find no error in the sustaining of the demurrers without leave to amend or in the summary adjudication of the other three causes of action. Accordingly, we affirm the judgment of dismissal.
I. Allegations
Beutel purchased his Carmel residence in 1999. In 2001, he refinanced his existing mortgage by obtaining an adjustable rate home loan from Wells Fargo secured by a first deed of trust on Beutel’s residence. In 2003, Beutel obtained the ELOC from Wells Fargo; it was secured by a second deed of trust on his residence.
In 2004, Wells Fargo incorrectly notified Beutel that he had failed to keep his residence insured as required by his home loan. He responded with proof of insurance, and the cost of the insurance was returned to his impound account from which it had been taken. In 2006, Beutel learned that additional funds had been taken from his impound account for insurance despite the fact that he had continuously maintained insurance on his residence. Between 2006 and 2010, at least $15,000 was deducted from Beutel’s impound account for insurance.
In February 2009, Beutel attempted to pay off and close the ELOC by making a payment at a branch. His payment was returned with a statement that “it was more than he owed.” Around this time, Beutel also tried to open a checking account at a branch with an initial deposit of $40,000 with the intent to have his monthly payments on the home loan automatically deducted from that account. A series of events followed with the end result that Beutel’s money was returned to him in March 2009. During this unfortunate series of events, Beutel’s funds were unavailable to him, and he could not make payments on his home loan or his ELOC, resulting in the suspension of his ELOC.
Another series of events followed during which Beutel unsuccessfully attempted to pay off the ELOC, on which he owed less than $500, and Wells Fargo obstructed his attempts. On August 14, 2009, Wells Fargo sent Beutel a letter declining to accept his payment of $406.52 because “we need to first send you the payoff letter with the accurate amount that you must pay.” The letter stated that the payoff letter would be sent “as of 08/17/2009.” After he received it, he could pay off the ELOC at the branch. On August 23, Beutel received a letter dated August 17, which stated that he owed an additional $8.52 for finance charges through August 17, 2009. The total to pay off the ELOC was therefore $415.04.
In February 2010, Beutel stopped making monthly payments on his home loan “in the hopes that through that action, he could get someone employed by [Wells Fargo] to deal with him in a good faith manner.” Because he believed that $9,000 had been improperly deducted from his impound account, he skipped three $3,000 monthly payments and then tried to make the next monthly payment. Wells Fargo refused to accept his payment. Beutel began receiving calls from Wells Fargo’s collections department.
In May 2011, Beutel received a notice of default on the ELOC stating that he owed $864.03. His attempts to resolve the matter were unsuccessful. In July 2011, Beutel spoke to a representative of Wells Fargo who told him that there would not be any foreclosure activity against his home. A week later, Beutel received a call from a representative of Wells Fargo telling him that there would be a trustee’s sale of his residence on August 24, 2011. A notice of trustee’s sale on the second deed of trust (which secured the ELOC) was recorded on August 2, 2011. A few weeks followed during which Beutel was given a variety of information about reinstatement amounts. Ultimately, on August 15, 2011, a representative of Wells Fargo told him that there would be no foreclosure.
Beutel filed a prior action against Wells Fargo on August 17, 2011, and the court issued a temporary restraining order prohibiting Wells Fargo from proceeding with a foreclosure on August 24, 2011. Wells Fargo removed that action to federal court. Beutel told Wells Fargo that he would dismiss that action if it delayed the trustee sale, credited him for the improper deductions, and engaged with him in good faith regarding a loan modification. Wells Fargo sent him a “loan modification package” and “vacated” the trustee’s sale, so Beutel dismissed his action without prejudice. Wells Fargo subsequently advised Beutel that it was not willing to work with him on a loan modification unless he released his claims against it. Beutel believed he was entitled to a loan modification because his loan was a “pick-a-pay loan” that was subject to a settlement agreement between Wells Fargo and the Attorney General.
II. Discussion
A. Demurrer
Beutel contends that the superior court erred in sustaining without leave to amend Wells Fargo’s demurrer to the IIED and NIED causes of action.
“ ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
“A judgment of dismissal after a demurrer has been sustained without leave to amend will be affirmed if proper on any grounds stated in the demurrer, whether or not the court acted on that ground. [Citations.] A general demurrer searches the complaint for all defects going to the existence of a cause of action and places at issue the legal merits of the action on assumed facts.” (Carman v. Alvord (1982) 31 Cal.3d 318, 324.)
The superior court found Beutel’s allegations insufficient to support his IIED and NIED causes of action because his allegations that he was “stressed out and frustrated . . . doesn’t amount to severe emotional distress.” Wells Fargo’s demurrer did not assert expressly that these two causes of action were deficient in failing to allege severe emotional distress. For that reason, we will restrict our review to the grounds stated in Wells Fargo’s demurrer. “ ‘If the demurrer is well taken as to any of the grounds stated therein, then the order of the court sustaining the demurrer must be affirmed by the reviewing court.’ ” (Moxley v. Title Ins. & Trust Co. (1946) 27 Cal.2d 457, 462.)
1. IIED Cause of Action
Wells Fargo demurred to the IIED cause of action on the ground that the conduct alleged was “not outrageous as a matter of law.” It reasoned that its decision to pursue foreclosure could not be considered outrageous because Beutel “admits he intentionally defaulted . . . .”
“ ‘The elements of the tort of intentional infliction of emotional distress are: “ ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct . . . .’ Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” [Citation.] The defendant must have engaged in “conduct intended to inflict injury or engaged in with the realization that injury will result.” [Citation.]’ ” (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001 (Potter).)
Beutel asserts on appeal that he adequately alleged outrageous conduct by alleging that Wells Fargo had refused to allow him to pay off the ELOC and then had begun foreclosure proceedings on the ELOC deed of trust “all while lying to [him] repeatedly.” Beutel’s actual allegations in his complaint were essentially that Wells Fargo had given him “the runaround” on numerous occasions, provided inaccurate information, and generally frustrated his attempts to resolve his ELOC problems from February 2009 through August 2009. At no point during that period did Wells Fargo take any action to foreclose. The foreclosure proceedings on the ELOC deed of trust were initiated only after Beutel purposely stopped paying the payments on his home loan in February 2010. While Wells Fargo’s actions in 2009 were clearly frustrating for Beutel, none of those actions amounted to anything “so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Potter, supra, 6 Cal.4th at p. 1001.) Wells Fargo’s conduct was merely the type of bureaucratic intransigence that individuals may encounter in attempting to resolve disputes with large corporations. Wells Fargo’s actions in response to Beutel’s refusal to pay the payments due on his home loan were not unreasonable, let alone outrageous. Beutel’s breach of his obligations under the ELOC fully justified Wells Fargo’s actions in declaring a default and beginning foreclosure proceedings.
Beutel claims that it was irrelevant that the foreclosure arose from his failure to make payments on the home loan because Wells Fargo was not foreclosing on the home loan deed of trust and, by the time of the hearing on the demurrer, he had paid off the ELOC. Since the ELOC required Beutel to perform all of his obligations under the home loan, his failure to pay the payments on the home loan was a breach of the ELOC. Wells Fargo’s actions were not outrageous because a default on a loan secured by a first deed of trust threatened the security provided by the second deed of trust. As Beutel failed to allege outrageous conduct, his IIED cause of action could not succeed, and the superior court properly sustained Wells Fargo’s demurrer to it without leave to amend.
2. NIED Cause of Action
Wells Fargo demurred to the NIED cause of action on the ground that Beutel had failed to allege “a duty of care.”
“ ‘[T]he negligent causing of emotional distress is not an independent tort but the tort of negligence . . . .’ [Citation.] ‘The traditional elements of duty, breach of duty, causation, and damages apply. [¶] Whether a defendant owes a duty of care is a question of law.’ ” (Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48 Cal.3d 583, 588 (Marlene F.).) “Damages for severe emotional distress . . . are recoverable in a negligence action when they result from the breach of a duty owed the plaintiff that is assumed by the defendant or imposed on the defendant as a matter of law, or that arises out of a relationship between the two.” (Id. at p. 590.) “[U]nless the defendant has assumed a duty to plaintiff in which the emotional condition of the plaintiff is an object, recovery is available only if the emotional distress arises out of the defendant’s breach of some other legal duty and the emotional distress is proximately caused by that breach of duty. Even then, with rare exceptions, a breach of the duty must threaten physical injury, not simply damage to property or financial interests.” (Potter, supra, 6 Cal.4th at p. 985.)
Beutel contends on appeal that a lender “has a duty to the borrower to accept his payment, as opposed to refusing to accept it and foreclosing.” He makes no effort to establish that his allegations fall within the “rare exceptions” to the rule that, to establish an NIED cause of action, “a breach of the duty must threaten physical injury, not simply damage to property or financial interests.” (Potter, supra, 6 Cal.4th at p. 985.) Here, Wells Fargo’s alleged conduct did not threaten Beutel with physical injury but only with damage to his financial interests. While there may be situations where a lender has a duty to a borrower (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1182), it is incumbent upon the borrower to allege the existence of the circumstances that establish such a duty. Here, Beutel did not allege any such facts. The superior court properly sustained Wells Fargo’s demurrer to Beutel’s NIED cause of action.
B. Summary Judgment
Beutel contends that the superior court erred in summarily adjudicating his implied covenant, conversion, and unfair practices causes of action in his amended complaint.
“Appellate review of a ruling on a summary judgment or summary adjudication motion is de novo.” (Brassinga v. City of Mountain View (1998) 66 Cal.App.4th 195, 210.) The “initial burden of production [requires the defendant] to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Aguilar, at p. 851.) “[A]ll that the defendant need do is to show that the plaintiff cannot establish at least one element of the cause of action—for example, that the plaintiff cannot prove element X. Although he remains free to do so, the defendant need not himself conclusively negate any such element—for example, himself prove not X.” (Aguilar, at pp. 853-854, fn. omitted.)
A defendant may satisfy the initial burden of production “by showing that the plaintiff does not possess, and cannot reasonably obtain, needed evidence: The defendant must show that the plaintiff does not possess needed evidence, because otherwise the plaintiff might be able to establish the elements of the cause of action; the defendant must also show that the plaintiff cannot reasonably obtain needed evidence, because the plaintiff must be allowed a reasonable opportunity to oppose the motion . . . .” (Aguilar, supra, 25 Cal.4th at p. 854.) A defendant may make such a showing “through admissions by the plaintiff following extensive discovery to the effect that he has discovered nothing.” (Aguilar, at pp. 854-855.)
1. Implied Covenant Cause of Action
The superior court concluded that Wells Fargo was entitled to summary adjudication of the implied covenant cause of action because Beutel had admitted in his responses to discovery that he could not identify any monetary losses other than unrecoverable attorney’s fees and costs.
Beutel contends on appeal that the superior court erred because his declaration, submitted in opposition to Wells Fargo’s summary judgment motion, asserted that he had suffered $2,560.89 in damages because he was required to pay $2,967.41 to pay off the ELOC in December 2011 instead of the $406.52 that he owed when he first tried to pay off the ELOC in 2009. He also claims that his declaration established that he had incurred “costs and substantial attorney’s fees, to stop the foreclosure process” and had suffered emotional distress damages.
Beutel’s amended complaint alleged that he had suffered “general damages in the sum of $100,000” as a result of Wells Fargo’s alleged breach of the implied covenant. Beutel acknowledges on appeal that this cause of action was based solely on Wells Fargo’s refusal to let him pay off the ELOC followed by its commencement of foreclosure proceedings.
“An allegation of breach of the implied covenant of good faith and fair dealing is an allegation of breach of an ‘ex contractu’ obligation, namely one arising out of the contract itself. The covenant of good faith is read into contracts in order to protect the express covenants or promises of the contract, not to protect some general public policy interest not directly tied to the contract’s purposes.” (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 690.) “Outside of the insured-insurer relationship and others with similar qualities, breach of the implied covenant of good faith and fair dealing does not give rise to tort damages.” (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 206.) Since this case does not involve an insured-insurer relationship or a similar type of relationship, Beutel could not prevail unless he could show contract damages, rather than tort damages.
“ ‘Contract damages are generally limited to those within the contemplation of the parties when the contract was entered into or at least reasonably foreseeable by them at that time; consequential damages beyond the expectation of the parties are not recoverable. [Citations.] This limitation on available damages serves to encourage contractual relations and commercial activity by enabling parties to estimate in advance the financial risks of their enterprise.’ [Citation.] ‘In contrast, tort damages are awarded to [fully] compensate the victim for [all] injury suffered. [Citation.]’ [Citation.] [¶] ‘ “[T]he distinction between tort and contract is well grounded in common law, and divergent objectives underlie the remedies created in the two areas. Whereas contract actions are created to enforce the intentions of the parties to the agreement, tort law is primarily designed to vindicate ‘social policy.’ [Citation.]” ’ ” (Erlich v. Menezes (1999) 21 Cal.4th 543, 550-551.)
Wells Fargo supported its motion with Beutel’s responses to interrogatories and requests for production and his deposition testimony. Wells Fargo’s September 2013 form interrogatories asked Beutel to identify any breach of an agreement. Beutel responded that Wells Fargo had “repeatedly failed and refused to allow [him] to pay off” the ELOC and had refused to “process” his “loan modification requests.” Wells Fargo’s form interrogatories asked Beutel to identify “any physical, mental, or emotional injuries . . . .” Beutel responded that he “is suffering from mental, physical and emotional distress,” which was “chronic and continuing.” Wells Fargo also asked him if he had lost income or earning capacity and if he had any other damages. He replied that he had “suffered loss of earning capacity” because his “ability to focus on work had been greatly impacted, as has his income.” He claimed a loss of income “well in excess of $25,000.00.” Beutel also asserted that he had paid “attorneys’ fees and costs.” Wells Fargo’s requests for production sought documentation of “any damages” he had sustained. Beutel produced no documents in response to these requests, though he said he would do so in January 2014.
None of Beutel’s responses to Wells Fargo’s discovery disclosed that he had suffered any contract, rather than tort, damages. The only damages he identified were emotional distress, lost earning capacity, and attorney’s fees and costs. Such losses are indisputably not contract damages because they do not arise out of the contract itself, which was an ordinary home equity loan. Even in his declaration in opposition to Wells Fargo’s motion, Beutel did not identify any contract damages that he had suffered as a result of Wells Fargo’s alleged refusal to let him pay off the ELOC and subsequent foreclosure efforts.
Beutel claims that he did identify contract damages in his declaration in opposition to Wells Fargo’s motion when he asserted that he had suffered $2,560.89 in damages because he was required to pay $2,967.41 to pay off the ELOC in December 2011 instead of the $406.52 that he owed when he first tried to pay off the ELOC in 2009. “[S]ummary judgment cannot be denied on a ground not raised by the pleadings. [Citations.] [¶] If either party wishes the trial court to consider a previously unpleaded issue in connection with a motion for summary judgment, it may request leave to amend.” (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663-1664.) Here, Beutel did not allege in his amended complaint that he had suffered financial damages as a result of being required to pay more in December 2011 to pay off the ELOC than he would have had to pay if Wells Fargo had accepted his earlier attempts to pay off the ELOC. Although he paid off the ELOC after he filed the original complaint, his amended complaint, filed long after he paid off the ELOC, made no allegations in this regard. Beutel never sought to amend his amended complaint to make such allegations. He also failed to identify these alleged damages in any of his responses to Wells Fargo’s discovery, despite specific inquiries seeking to discover the nature of his damages. “[A] party cannot create an issue of fact by a declaration which contradicts his prior discovery responses.” (Shin v. Ahn (2007) 42 Cal.4th 482, 500, fn. 12.)
The superior court did not err in concluding that Wells Fargo was entitled to summary adjudication of Beutel’s implied covenant cause of action based on Beutel’s inability to show any recoverable damages.
2. Conversion Cause of Action
The superior court granted summary adjudication of the conversion cause of action on the ground that Beutel had admitted that he could not identify a specific sum of money that Wells Fargo had converted.
“ ‘A cause of action for conversion requires allegations of plaintiff’s ownership or right to possession of property; defendant’s wrongful act toward or disposition of the property, interfering with plaintiff’s possession; and damage to plaintiff. [Citation.] Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment. [Citation.]’ ” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395.) “[I]f money is the subject of the conversion action, a specific sum [must] be identified.” (Id. at p. 397.)
Beutel’s conversion cause of action was based on Wells Fargo deducting money from his impound account to pay for insurance. At his deposition, Beutel was asked if the insurance deductions had been “ultimately refunded to your account?” He responded: “I don’t know. I was told they were going to be, but I don’t know that they did it.” “I don’t know whether . . . they made a refund . . . but . . . I was told that I would get that credited back to my account.” He was asked “and as we sit here today, you don’t know whether [the crediting of his account for those charges] was done or not?” He responded: “Correct.” “I don’t know what [Wells Fargo’s] done as far as crediting anything back. I’ve been told, but I haven’t seen it. I have no idea.” Although he believed at least $15,000 had been charged to his impound account, and “Ron Lawrence” at Wells Fargo had told him in June 2011 that the deductions were “closer to 17,000,” Beutel testified that Ron Lawrence also had told him “we’re going to credit you back” for the insurance deductions. Beutel also testified that he did not know if those deductions actually had been refunded to him. He testified that he “was told that one of the amounts didn’t get credited back.”
Beutel’s deposition testimony established that he was unable to identify a specific sum of money that Wells Fargo had deducted from his impound account and not refunded to him. He could not even identify a total amount that had been deducted, and he admitted that he did not know whether or not Wells Fargo had refunded all of the deductions to him.
Beutel attempted to fill this gap by submitting a declaration in opposition to Wells Fargo’s motion in which he relied only on the total amount that he said Ron Lawrence had told him had been deducted from his impound account and omitted any mention of the assurance he had received from Ron Lawrence that he was being credited for all of those deductions. Beutel declared that Wells Fargo had “yet to notify me of their findings or show[] me where they have refunded any of the $17,004.20 that Ron Lawrence advised me had been deducted from my impound account.” As we have already pointed out, “a party cannot create an issue of fact by a declaration which contradicts his prior discovery responses.” (Shin v. Ahn, supra, 42 Cal.4th at p. 500, fn. 12.) Since Beutel had already admitted that he did not know if Wells Fargo had fully credited his account for all of the insurance deductions, his declaration to the contrary did not preclude summary adjudication of the conversion cause of action due to his inability to prove that a specific sum had been taken by Wells Fargo from his account and not credited back to his account.
The superior court did not err in summarily adjudicating the conversion cause of action.
3. Unfair Practices Cause of Action
Beutel’s amended complaint alleged that his 2001 home loan was a “predatory” “ ‘pick-a-pay’ ” adjustable rate mortgage because the borrower had a choice of three payment options each month, the least of which would result in negative amortization, making “default inevitable.” He alleged that offering these payment options was an unfair and deceptive business practice that was “intentionally designed to result in negative amortization and obligations to pay compound interest” and “to make amortizing payments unaffordable to plaintiff.” He alleged, on information and belief, that “over the past four years, said defendants accepted monthly payments from plaintiff under the pick-a-pay loan,” and “failed to disclose and omitted material information” about those payments. Beutel filed the original complaint in this action on November 23, 2011. He filed the amended complaint in this action on June 21, 2012.
The limitations period for an unfair practices cause of action is four years. (Bus. & Prof. Code, § 17208.) “While resolution of the statute of limitations issue is normally a question of fact, where the uncontradicted facts established through discovery are susceptible of only one legitimate inference, summary judgment is proper.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.) The superior court summarily adjudicated the unfair practices cause of action on the ground that it was indisputably time-barred because the home loan was made in 2001 and any disclosures or nondisclosures regarding the alleged “predatory” nature of the home loan also would have been made in 2001, a decade before Beutel filed his action, long after the four-year limitations period expired.
Beutel testified at his deposition that the disclosure that he was given in 2001 concerning the home loan informed him precisely how much his payments would be and how much they would increase over the years, and he did not consider the maximum payments to be unaffordable for him. The disclosure that he had received in 2001 explicitly stated that his payments on the adjustable rate home loan would increase over time from about $2,500 a month to about $4,272 a month. These payments would pay off the loan at the end of its term. Beutel’s declaration in opposition to Wells Fargo’s summary judgment motion confirmed that his unfair practices cause of action was based on the nature of the 2001 home loan, not any subsequent conduct. He confirmed his deposition testimony that he was aware of the nature of the loan in 2001.
However, Beutel’s declaration identified the nature of his claim as being based on the fact that his monthly mortgage statements gave him three options for payment each month. One option was a small minimum payment that would lead to negative amortization. The second option was a larger payment that would be interest only and create no equity. The third option was the largest payment, which included both interest and principal and would allow him to pay off the loan at the end of its term. He claimed that he was not aware of the negative amortization nature of the first option until “years later.” He attached to his declaration the front of a 2002 monthly mortgage statement. This document plainly disclosed the payment options and their nature and stated that further “explanations” regarding the payment options were “on reverse side . . . .” Beutel did not attach the “reverse side . . . .” The 2002 mortgage statement delineated precisely how much of a payment under each option would go to principal, how much would go to interest, and how much interest would be “deferred.”
The undisputed evidence showed that the nature of the 2001 home loan was disclosed to Beutel in 2001 and that the nature of the various “payment options” was disclosed to him no later than 2002. It follows that the superior court did not err in concluding that the four-year limitations period had expired long before Beutel filed this action in 2011.
III. Disposition
The judgment is affirmed.
_______________________________
Mihara, J.
WE CONCUR:
_____________________________
Bamattre-Manoukian, Acting P. J.
_____________________________
Danner, J.
Beutel v. Wells Fargo
H043427