Case Name: Stephen G. Debrunner v. Ocwen Loan Servicing, LLC, et al.
Case No.: 2014-1-CV-273607

Currently before the Court is the motion by defendants Ocwen Loan Servicing, LLC (“Ocwen”) and Deutsche Bank National Trust Company, as trustee for Morgan Stanley ABS Capital I Inc. Trust, Series 2007-SEA 1, erroneously sued as Deutsche Bank National Trust Company (“Deutsche”) for summary judgment or, in the alternative, summary adjudication.

Factual and Procedural Background

This action arises out of foreclosure proceedings against certain real property located in Los Altos, California (“Property”) that is partially owned by plaintiff Stephen G. Debrunner (“Plaintiff”). (See First Amended Complaint (“FAC”), ¶¶ 9-28.)

The Property was encumbered by two deeds of trust. (FAC, ¶¶ 10-11.) The first deed of trust was executed by Barbara Chiu (“Chiu”) on June 24, 2004, and secured a loan in the amount of $975,000 from Quick Loan Funding, Inc. (“Quick Loan”). (Id., at ¶ 10.) The second deed of trust was executed by Chiu on March 2, 2006, and secured a loan in the amount of $675,000 from a group of personal investors including Plaintiff (collectively, “Investors”). (Id., at ¶ 11.)

Chiu apparently fell behind on her loan payments and Investors, therefore, foreclosed on the second deed of trust on March 18, 2009. (FAC, ¶ 12.) At that time, the Investors “became … Chiu’s successor in interest” to the first deed of trust and “entitled persons” under Civil Code section 2943, subdivision (a)(4). (Ibid.) In addition, the Investors had the ability to pay and/or borrow sufficient sums of money to pay off the amount due under the first deed of trust. (Ibid.)

On September 15, 2009, a notice of default was recorded against the Property in connection with the first deed of trust, stating that Deutsche was the creditor to whom the debt was owed. (FAC, ¶ 14.)

Next, on October 16, 2009, Plaintiff wrote to Deutsche, “among others,” and requested a beneficiary statement and payoff demand pursuant to Civil Code section 2943. (FAC, ¶ 15.) Thereafter, “Plaintiff continued to make requests for a payoff amount, at approximately bi-monthly intervals ….” (Ibid.)

Because no offer of proof was forthcoming regarding the owner of the beneficial interest in the loan secured by the first deed of trust, Plaintiff filed a lawsuit against Deutsche (Santa Clara County Superior Court, Case No. 2009-1-CV-157852) alleging that Deutsche had not established any lawful right to enforce the promissory note and first deed of trust. (FAC, ¶ 16.) The trial court eventually entered judgment in Deutsche’s favor in that action, and the judgment was affirmed on appeal. (Id., ¶¶ 17-19.)
Subsequently, on February 20, 2014, defendant Western Progressive (“Western Progressive”) recorded a notice of default against the Property, which stated that $821,844 was owned to Deutsche and Ocwen. (FAC, ¶ 20.) Four days later, Plaintiff’s counsel wrote to Deutsche, Ocwen, and Western Progressive, requesting a payoff amount to satisfy the loan secured by the first deed of trust. (Id., at ¶ 21.)

Several months later, Western Progressive recorded a notice of trustee’s sale, which stated that the total amount owed was $1,589,255.75 and the trustee’s sale was set for October 27, 2014. (FAC, ¶ 22.) After being contacted by Plaintiff, Western Progressive agreed to postpone the trustee’s sale to late November 2014. (Id., at ¶ 23.)

On November 6, 2014, Ocwen sent Plaintiff a payoff demand in the amount of $1,607,100.80. (FAC, ¶¶ 15, 24.) The amount set forth in the payoff demand grossly overstates the amount owed on the promissory note secured by the first deed of trust. (Id., at ¶ 24.) Prior to November 6, 2014, Plaintiff had not received any payoff demand statement from Deutsche, Ocwen, or Western Progressive. (Id., at ¶ 26.) If Deutsche, Ocwen, or Western Progressive had provided Plaintiff, and the other Investors, with a payoff demand statement when he first requested one on October 16, 2009, he would have paid the amount due at that time. (Id., at ¶ 27.) “The failure to provide a payoff amount … blocked [Plaintiff’s] attempt to sell the Property.” (Id., at ¶ 26.) Furthermore, Plaintiff was unable to rent the Property at fair market value and, consequently, incurred damages in the form of lost rental income in the amount of $390,000. (Id., at ¶ 28.)

Based on the foregoing, Plaintiff filed a complaint against Deutsche, Ocwen, and Western Progressive on November 21, 2014. Almost two years later, Plaintiff filed the operative FAC against Deutsche, Ocwen, and Western Progressive, alleging causes of action for: (1) declaratory relief; (2) negligence; and (3) unfair business practices. Deutsche and Ocwen subsequently filed an answer to the FAC on July 5, 2016.

On October 21, 2016, Deutsche and Ocwen jointly filed the instant motion for summary judgment or, in the alternative, summary adjudication. Plaintiff filed papers in opposition to the motion on February 9, 2017. Deutsche and Ocwen filed a joint reply on March 1, 2017.

Thereafter, the Court requested supplemental briefing on the issue of whether Plaintiff may avoid the willfulness requirement and the limitation of liability to beneficiaries set forth in Civil Code section 2943, subdivision (e)(4) by recasting a claim for violation of Civil Code section 2943, subdivision (c) as a negligence claim. Subsequently, the parties submitted supplemental briefs and responses thereto.

Discussion

Deutsche and Ocwen (hereinafter collectively, “Defendants”) move for summary judgment of the FAC or, alternatively, summary adjudication of the first, second, and third causes of action of the FAC.

For the reasons articulated below, the motion for summary judgment is GRANTED with respect to Ocwen. The motion for summary judgment and the motion for summary adjudication of the second and third causes of action is DENIED as to Deutsche. The motion for summary adjudication of the first cause of action is GRANTED with respect to Deutsche.

I. Legal Standard on Motions for Summary Judgment and/or Adjudication

“A motion for summary judgment shall be granted when ‘all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ Summary adjudication works the same way, except it acts on specific causes of action or affirmative defenses, rather than on the entire complaint. A summary adjudication is properly granted only if a motion therefor completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. Motions for summary adjudication proceed in all procedural respects as a motion for summary judgment.” (Hartline v. Kaiser Foundation Hospitals (2005) 132 Cal.App.4th 458, 464 (“Hartline”), internal citations omitted.)

A defendant moving for summary judgment or adjudication bears the initial burden of showing that a necessary element of the plaintiff’s case cannot be established, or that the defendant has a complete defense to the action. (Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1132.) “If the defendant fails to make this initial showing, it is unnecessary to examine the plaintiff’s opposing evidence and the motion must be denied. However, if the moving papers establish a prima facie showing that justifies a judgment in the defendant’s favor, the burden then shifts to the plaintiff to make a prima facie showing of the existence of a triable material factual issue.” (Intrieri v. Super. Ct. (2004) 117 Cal.App.4th 72, 82.) “ ‘There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.’ ” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272.)

For purposes of establishing their respective burdens, the parties involved in a motion for summary judgment or adjudication must present admissible evidence, which is to say that motion is evidentiary in nature and cannot be based solely upon the allegations in a pleading. (College Hospital Inc. v. Super. Ct. (1994) 8 Cal.4th 704, 720, fn. 7; Buehler v. Alpha Beta Co. (1990) 224 Cal.App.3d 729, 733.) In ruling on the motion, a court cannot weigh the evidence presented or deny summary judgment or adjudication on the ground that any particular evidence lacks credibility. (See Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; see also Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.)

II. Evidentiary Objections

With their reply, Defendants filed evidentiary objections to portions of Plaintiff’s declaration, which was submitted in support of Plaintiff’s opposition to the motion.

However, the evidentiary objections do not comply with California Rules of Court, rule 3.1354. Rather than submit two separate documents as required by the rule—one document setting forth the objections and a separate proposed order—Defendants submitted a single packet of objections signed by counsel, with blanks apparently for the Court to indicate its rulings, but with no place for the Court to sign. (See Cal. Rules of Ct., rule 3.1354(b) [a party must provide written objections that comply with one of the formats described in the rule] (c) [a party must provide a proposed order that complies with one of the formats described in the rule].) This hybrid document does not comply with California Rule of Court, rule 3.1354.

Since Defendants’ evidentiary objections do not comply with the California Rules of Court, the Court declines to rule on the objections. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; see also Hodjat v. State Farm Mut. Auto. Ins. Co. (2012) 211 Cal.App.4th 1, 8 [trial court is not required to rule on objections that do not comply with California Rules of Court, rule 3.1354 and is not required to give objecting party a second chance at filing properly formatted papers].)

III. Second Cause of Action

In his second cause of action for negligence, Plaintiff alleges that Defendants “had a duty … as set forth in Civil Code section 2943(c) to provide him with a payoff demand within 21 days after written request for one”; he made a written request for a payoff demand to Deutsche on October 16, 2009; he made a written payoff demand on February 27, 2014; Defendants did not timely provide him with a payoff amount and, instead, caused to be recorded a notice of trustee’s sale; if Deutsche had complied with its obligation to provide him with a payoff amount in response to his October 16, 2009 request, he could and would have paid said amount; from October 2009 to the present, he has been unable to rent the Property at fair market value because of Defendant’s threat of foreclosure; due to his inability to rent the Property at fair market value, he incurred damages in the form of lost rental income in the amount of $390,000; he actively marketed the Property for sale from March 2014 to October 2014, and had offers to purchase the Property for more than $1,900,000 contingent upon him obtaining a payoff amount from Defendants; and he sustained damages as a result of Defendant’s breach of their statutory duty. (FAC, ¶¶ 26-28, 42-47.)

The elements of a claim for negligence are (1) a legal duty to use reasonable care, (2) breach of that duty, and (3) proximate cause between the breach and (4) the plaintiff’s injury. (Mendoza v. City of Los Angeles (1998) 66 Cal.App.4th 1333, 1339 (“Mendoza”); Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1250 (“Mendoza”).)

A. Preemption

Defendants contend that the second cause of action is preempted because Deutsche is a national banking trust association; Deutsche is listed by the Office of Comptroller of the Currency (“OCC”) as both a “national bank” and a national “trust bank”; Deutsche operates under the federal charter with the OCC; Deutsche is governed by federal regulations promulgated by the Office of Thrift Supervision (“OTS”); Ocwen was merely acting as Deutsche’s agent; and the federal regulations of the OTS “expressly occupy the entire field of loan regulation for national banking associations and preempt any state statute or law that would otherwise regulate their loan related functions.” (Ds’ Mtn. Summ. Jdgmt., pp. 11:1-28, 12:1-6.)

“Federal savings associations are organized under [HOLA], and the [OTS] supervises them. Appling v. Wachovia Mortgage, FSB, 745 F.Supp.2d 961, 970–71 (N.D.Cal.2010); 12 U.S.C. §§ 1462(3) (‘The term ‘Federal savings association’ means a Federal savings association or a Federal savings bank chartered under section 1464 of this title.’). In contrast, the [OCC] supervises national banks, also called national associations, under regulations codified under the National Banking Act (‘NBA’). See Appling, 745 F.Supp.2d at 970–71 (citing Bank of America v. City and County of San Francisco, 309 F.3d 551, 561–62 (9th Cir.2002)).” (McFarland v. JP Morgan Chase Bank (C.D. Cal., Apr. 28, 2014, No. EDCV 13-01838-JGB) 2014 WL 1705968 , at *6 (“McFarland”).)

“As the Ninth Circuit held in Aguayo v. U.S. Bank, ‘while the OTS [HOLA] and the OCC [NBA] regulations are similar in many ways, the OCC has explicitly avoided full field preemption in its rulemaking and has not been granted full field preemption by Congress.’ 653 F.3d at 921–22 (internal citations omitted). ‘Because of this difference in field preemption, courts have been cautious in applying OTS analysis to OCC regulations.’ Id. at 922 (internal citations omitted). HOLA’s strict field preemption analysis therefore bears little relation to the NBA’s more flexible conflict preemption analysis. See also Gerber v. Wells Fargo Bank, N.A., CV 11–01083–PHX–NVW, 2012 WL 413997 (D.Ariz. Feb. 9, 2012) (‘[T]he [NBA] rule only preempts the types and features of state laws pertaining to making loans and taking deposits that are specifically listed in the regulation.’) (quoting OCC Interpretive Letter No. 1005, 2004 WL 3465750 (June 10, 2004) (emphasis added); citing Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549, 555 (9th Cir.2010) (‘The [NBA] (and OCC regulations thereunder) does not ‘preempt the field’ of banking.’)). The distinction between HOLA’s field preemption, on the one hand, and NBA’s mere conflict preemption, on the other, renders cases construing HOLA preemption inapposite to the question of whether NBA preemption applies.” (Tamburri v. Suntrust Mortg., Inc. (N.D. Cal. 2012) 875 F.Supp.2d 1009, 1018 (“Tamburri”); see Galvan v. America’s Servicing Company (S.D. Cal., Jan. 30, 2013, No. 12CV2747 DMS (JMA)) 2013 WL 12096451, at *3 (“Galvan”) [“Plaintiff also claims Defendant failed to respond to his request for a beneficiary statement and other disclosures under California Civil Code Section 2943. Relying on Jelsing, Defendant argues the claim should be dismissed because [HOLA] preempts section 2943. Jelsing pre-dates the passage of the Dodd-Frank Act on July 21, 2010, which changed HOLA’s broad field preemption clause and mandated the more lenient conflict preemption standard. [Citation.] Because Plaintiff alleged Defendant’s violations occurred in August 2011 …, the claim is subject to the Dodd-Frank standard. [Citation.] Defendant does not argue section 2943 is preempted under Dodd-Frank’s conflict preemption standard. Accordingly, its motion to dismiss section 2943 claim is denied.”].)

Here, Defendants present evidence that Deutsche is listed as a “national bank” and a national “trust bank” on the OCC website, and Ocwen is its servicing agent and attorney-in-fact. (See Ds’ UMF Nos. 2-3.) Thus, Defendants’ evidence establishes that Deutsche is supervised by the OCC and governed by regulations codified under the NBA. (See McFarland, supra, 2014 WL 1705968, at *6.) This evidence does not demonstrate that Deutsche is a federal savings association supervised by the OTS or governed by regulations codified under HOLA. (See ibid.)

In their papers, Defendants argue that the second cause of action is preempted under HOLA’s broad field preemption standard. (See Ds’ Mtn. Summ. Jdgmt., p. 11:4-13 citing Lopez v. World Savings & Loan Assn. (2003) 105 Cal.App.4th 729, 745 [“[W]e conclude that OTS has been authorized by Congress to promulgate 12 C.F.R. part 560.2 (2002). Since we have also concluded that this regulation is intended to preempt state restrictions on loan-servicing fees such as payoff demand fees charged by federally chartered savings associations, we hold that, insofar as it applies to federal savings and loan associations, Civil Code section 2943 has been preempted by the federal regulation, as has any cause of action under the UCL that is predicated on a violation of section 2943.”] and 12 C.F.R. § 560.2 [The “OTS hereby occupies the entire field of lending regulation for federal savings associations” and “federal savings associations may extend credit as authorized under federal law, including this part, without regard to state laws purporting to regulate or otherwise affect their credit activities.”].) Defendants do not argue, or cite legal authority showing, that Civil Code section 2943 and claims predicated thereon are preempted under the NBA’s more lenient conflict preemption standard.

Because Defendants do not address the appropriate preemption standard, they fail to demonstrate that the second cause of action is preempted by federal law. (See Tamburri, supra, 875 F.Supp.2d at p. 1018; see also Galvan, supra, 2013 WL 12096451, at *3.)

B. Duty

As an initial matter, Defendants contend that they do not have a general common law duty to provide a payoff statement to Plaintiff because it is well-established that, “as a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1096.)

In opposition, Plaintiff contends that Defendants have a legal duty to timely provide him with a payoff statement under general common law principles and Civil Code section 2943, subdivision (c).

Civil Code section 2943, subdivision (c) is the only basis alleged by Plaintiff for Defendants’ legal duty to timely provide a payoff statement. (See FAC, ¶ 42 [“Defendants [Western Progressive, Deutsche, and Ocwen] had a duty to Plaintiff, as set forth in Civil Code section 2943(c) to provide him with a payoff demand within 21 days after written request for one.”].) Because the negligence claim, as pleaded, is predicated solely upon Civil Code section 2943, subdivision (c), Plaintiff may not avoid summary judgment, or adjudication, based on his argument that other general common law principles create a legal duty to provide a timely payoff statement. (See Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [the pleadings limit the issues presented for summary judgment]; see also Tsemetzin v. Coast Federal Savings & Loan Assn. (1997) 57 Cal.App.4th 1334, 1342 [stating that “[t]he [papers] filed in response to a defendant’s motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings”]; Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 648 [stating that “a plaintiff cannot bring up new, unpleaded issues in his or her opposing papers” and a plaintiff wishing “to rely upon unpleaded theories to defeat summary judgment must move to amend the complaint before the hearing”].)

Next, Defendants assert that even under Civil Code section 2943, subdivision (c) no duty is placed on Ocwen, in its individual capacity, to provide Plaintiff with a payoff statement. (See Ds’ Mtn. Summ. Jdgmt., p. 10:21-28.) As Defendants persuasively argue, Civil Code section 2943, subdivision (c) only imposes a legal duty to timely provide a payoff statement on beneficiaries or assignees within the meaning of the statute. (See Civ. Code, § 2943, subds. (a)(1) [“ ‘Beneficiary’ means a mortgagee or beneficiary of a mortgage or deed of trust, or his or her assignees.”] and (c) [“A beneficiary, or his or her authorized agent, shall, on the written demand of an entitled person, or his or her authorized agent, prepare and deliver a payoff demand statement to the person demanding it within 21 days of the receipt of the demand.”]; see also Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1079–80 [“As the holder of a deed of trust against Venhaus’s real property, Shultz was required by Civil Code section 2943, subdivision (b) to provide Venhaus with a beneficiary statement (as defined in section 2943, subdivision (a)(2)) within 21 days of the receipt of the written demand for the statement. … There is no question here whether Shultz owed a duty to Venhaus [citation], since the obligation to timely provide a correct beneficiary statement was imposed upon her by the statute.”]; Black v. Sullivan (1975) 48 Cal.App.3d 557, 56 [because the defendants were not beneficiaries or assignees within the meaning of section 2943, they had no statutory duty to supply the statement required by that section; mere allegations of an agency relationship does not impose any individual liability for failure to comply with demands for beneficiary statements as required by section 2943].)

Here, Defendants present undisputed evidence that Ocwen is merely Deutsche’s servicing agent and attorney-in-fact. (See Ds’ UMF No. 3.) This is sufficient to meet their initial burden to show that Ocwen, in its individual capacity, was not a beneficiary or assignee. Consequently, Ocwen had no legal duty to provide Plaintiff with a timely payoff statement under Civil Code section 2943, subdivision (c). In opposition, Plaintiff fails to raise a triable issue of material fact with respect to this issue. Therefore, Defendants are entitled to judgment on the second cause of action with respect to Ocwen.

With respect to Deutsche, Defendants concede that Deutsche is a beneficiary such that it generally has a duty under Civil Code section 2943, subdivision (c) to provide entitled persons timely payoff statements. However, Defendants assert that: (1) Deutsche’s duty to provide a payoff statement was not triggered by the October 16, 2009 letter from Plaintiff’s counsel because they never received that letter; (2) Deutsche’s duty to provide a payoff statement was never triggered because Plaintiff did not first deliver reasonable proof that he was an entitled person under the statute; and (3) Deutsche had no duty to provide a payoff statement after the January 2010 notice of sale.

In support of their first contention, Defendants offer UMF No. 4, which states that “Defendants have no record of a payoff request received from or on behalf of Plaintiff prior to February 26, 2014.” However, the evidence cited in support of this UMF does not demonstrate that Deutsche, or its authorized agents, have no records of the October 16, 2009 letter or that they never received the October 16, 2009 letter. Instead the evidence merely establishes that postal tracking slips were provided during discovery for letters sent in 2014 (see Allison Dec., ¶ 5, Ex. 12); Defendants’ counsel “checked the courier U.S. Postal Service website for the tracking numbers produced in discovery” and could not confirm that the 2014 letters were delivered to Defendants or the prior loan servicer, Saxon (see Allison Dec., ¶ 5); and Ocwen has no record of receipt of a payoff request from or on behalf of Plaintiff prior to or on February 24, 2014 (see Kearse Dec., ¶ 8). This evidence is wholly insufficient to show that Deutsche, or its authorized agent, do not have records of, or did not receive, the October 16, 2009 letter. The fact that Ocwen does not have any record of receiving the October 16, 2009 letter is inconsequential as it was not the loan servicer at the time the letter was sent. (See Kearse Dec., ¶ 4.) In addition, there is no indication that Ocwen’s records include all records from Deutsche and/or Saxon, the loan servicer in 2009, such that Ocwen’s records would reflect whether or not the October 16, 2009 letter was received by Deutsche or Saxon. Defendants do not present declarations from authorized representatives of Deutsche or Saxon establishing that records from those two entities indicate that the letter was never received by them. Moreover, the October 16, 2009 letter itself indicates that it was mailed to both Deutsche, Deutsche’s counsel, and Saxon. (See Allison Dec., Ex. 12.) This supports a reasonable inference that the letter was received by Deutsche and its authorized agents. Thus, Defendants fail to establish that the October 16, 2009 letter was not received by Deutsche or its authorized representatives.

Defendants’ second contention—that Deutsche’s duty to provide a payoff statement was not triggered because Plaintiff did not first deliver “reasonable proof” that he was an “entitled person” under Civil Code section 2943—also lacks merit. Civil
Code section 2943, subdivision (e)(3) merely states that “[t]he beneficiary may, before delivering a statement, require reasonable proof that the person making the demand is, in fact, an entitled person or an authorized agent of an entitled person, in which event the beneficiary shall not be subject to the penalties of this section until 21 days after receipt of the proof herein provided for.” It is only when a beneficiary makes a request for reasonable proof that the person seeking the payoff statement is required to provide evidence that they are an entitled person before the beneficiary has a duty to provide a timely payoff statement. Defendants do not proffer any UMF or evidence demonstrating that Deutsche, or its authorized representative, asked Plaintiff to provide reasonable proof that he was an entitled person within 21 days of receiving the October 16, 2009 letter. Absent such a request, Plaintiff was not obligated to provide Deutsche with any evidence that he was an entitled person and Deutsche’s duty to provide a timely payoff statement was triggered by the October 16, 2009 letter.

Finally, Defendants’ third contention also lacks merit. It is immaterial whether Deutsche a duty to provide a payoff statement after the January 2010 notice of sale because Defendants do not establish that the October 16, 2009 letter was insufficient to trigger Deutsche’s duty to provide a timely payoff statement.

C. Willfulness

Defendants assert that Plaintiff must establish that their failure to provide a timely payoff statement was willful in order to prevail on the second cause of action. In support of their contention, Defendants cite Civil Code section 2943, subdivision (e)(4). Defendants contend that Plaintiff cannot establish willfulness because (1) Ocwen attempted on multiple occasions to provide Plaintiff with an updated payoff statement in November 2014; (2) legal holds were placed on the account from approximately November 2009 until December 2012; (3) after Ocwen received an request for a payoff statement in February 2014, Ocwen attempted to send a payoff statement to Plaintiff; and (4) it was unclear whether Plaintiff was a person entitled to a payoff statement. (See Ds’ Mtn. Summ. Jdgmt., p. 15:6-16; see also Kearse Dec., ¶¶ 5, 8-12.)

As a threshold matter, Defendants do not establish that willfulness is a necessary element of Plaintiff’s claim for negligence. As articulated above, to prevail on a claim for negligence a plaintiff need only prove (1) a legal duty to use reasonable care, (2) breach of that duty, and (3) proximate cause between the breach and (4) the plaintiff’s injury. (Mendoza, supra, 66 Cal.App.4th at p. 1339; Conroy, supra, 45 Cal.4th at p. 1250.) As previously stated, Deutsche had a duty to timely provide Plaintiff with a payoff statement under Civil Code section 2943, subdivision (c). Deutsche allegedly breached that duty by failing to provide a payoff statement within 21 days of the October 16, 2009 letter. Under a theory of negligence, Plaintiff is not required to show that Deutsche’s alleged breach of its duty was willful.

Even if Plaintiff was required to prove willfulness to recover on the second cause of action, the Court finds that Defendants’ arguments regarding willfulness lack merit. The majority of Defendants’ arguments pertain to actions taken by Ocwen in 2014. These arguments have no bearing on whether Deutsche’s alleged failure to timely provide a payoff statement in response to the October 16, 2009 letter was willful. Defendants’ remaining argument is based on the general statement in the declaration of Crystal Kearse that a “legal hold” was place on the account sometime in November 2009. (Kearse Dec., ¶ 5.) This evidence is insufficient to show that Deutsche’s alleged failure to provide a timely payoff statement in response to the October 16, 2009 letter was not willful. Deutsche was required to provide Plaintiff with a timely payoff statement within 21 days of receipt of the October 16, 2009 letter. Since Kearse does not provide the Court with the exact date on which the “legal hold” was placed on the account, it is entirely possible that the “legal hold” was placed on the account in November 2009, but after the 21-day period elapsed. If this was the case, the placement of a “legal hold” on the account would not suggest that Deutsche’s failure to provide a timely payoff statement was not willful.

D. Damages

Defendants assert that Plaintiff cannot establish damages as a result of the alleged failure to timely provide a payoff statement in response to the October 16, 2009 letter because: (1) Plaintiff’s former attorney was a tenant at the Property from late 2010 to 2015, and the inability to rent the Property to someone else was due to the attorney’s presence; (2) Plaintiff failed to sell the Property because he believed the offer received was too low, not because he did not receive a timely payoff statement; and (3) Plaintiff’s calculation of the amount of damages owed is incorrect (See Ds’ Mtn. Summ. Jdgmt., pp. 15:17-23, 16:1-25, 17:1-15.)

Defendants’ arguments are not well-taken. Plaintiff alleges that he sustained damages in the form of lost rent beginning in late October 2009. (FAC, ¶¶ 28, 45.) Thus, the fact that Plaintiff’s former attorney was a tenant at the Property starting in late 2010 fails to address the claim for rent for the period of October 2009 to mid-2010. Given that Defendants have not challenged Plaintiff’s claim for damages based on lost rent from October 2009 to mid-2010, their argument regarding damages from the lost sale of the Property fails to dispose of the claim in its entirety. Moreover, the fact that Plaintiff’s calculation of the amount of damages may be incorrect does not demonstrate that Plaintiff cannot establish the element of damages.

III. Third Cause of Action

In his third cause of action for unfair business practices, Plaintiff alleges that Defendants’ violation of Civil Code section 2943, subdivision (c) constitutes unlawful acts in violation of Business and Professions Code section 17200, et seq. (“UCL”). (FAC, ¶¶ 48-52.) In connection with the third cause of action, Plaintiff seeks equitable relief, restitution, and disgorgement of profits. (FAC, ¶ 57.)

“[The UCL] prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Super. Ct. (2005) 129 Cal.App.4th 36, 48.)

As an initial matter, Defendants contend that they are entitled to summary adjudication of the third cause of action because it is predicated on the second cause of action and that claim fails. It is well-established that the viability of a UCL claim stands or falls with the antecedent substantive causes of action. (Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178.) Here, the second cause of action fails only as to Ocwen. Thus, Defendants’ have demonstrated that the third cause of action fails with respect to Ocwen, alone, as well.

Next, Defendants assert that the third cause of action must fail with respect to Deutsche because (1) UCL claims only apply to “ongoing conduct”; (2) “tracking does not confirm delivery” of the October 16, 2009 letter and the letter “is not included in Defendants’ records”; (3) to the extent the claim is based on the October 16, 2009 letter, it is time-barred by the applicable four-year statute of limitations; and (4) Plaintiff cannot recover damages in connection with his UCL claim.

In support of their first contention, Defendants cite to a single case where the court stated that an unfair “business practice” at a minimum requires ongoing conduct, and that relief under the unfair competition law is unavailable to remedy past misconduct. (Mangini v. Aerojet-General Corp. (1991) 230 Cal.App.3d 1125, 1156 (“Magini”).) Defendants’ reliance on that case is misplaced. When the decision in Mangini issued, a UCL claim was only actionable if it involved a “business practice,” which was interpreted to mean a pattern or course of conduct. (United Farm Workers of America v. Dutra Farms (2000) 83 Cal.App.4th 1146, 1163.) Subsequently, however, the UCL was amended to cover any wrongful “business act or practice,” which means that a single, isolated act may create liability. (Ibid.) Thus, under the current version of the law, a claim brought under the UCL can seek to remedy past misconduct.

With respect to their second contention, the Court finds that it lacks merit for the reasons previously stated above. Namely, that the evidence presented with respect to the tracking numbers only pertains to letters sent in 2014 and does not establish that the October 16, 2009 letter was not contained in Deutsche or Saxon’s records.

Next, the Court finds that Defendants’ third contention is not well-taken. The statute of limitations period for UCL claims is four years. (Bus. & Prof. Code, § 17208; County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 332.) “The general rule for defining the accrual of a cause of action sets the date as the time ‘when, under the substantive law, the wrongful act is done,’ or the wrongful result occurs, and the consequent ‘liability arises.’” (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397; see Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1196 [UCL claims are “governed by common law accrual rules to the same extent as any other statute …. The common law last element accrual rule is the default ….”].) Defendants contend that the third cause of action began to accrue 21 days after the October 16, 2009 letter was sent, i.e., November 6, 2009. However, the relevant date under Civil Code section 2943, subdivision (c) is not the date the letter is sent, but the date on which the letter is received by the beneficiary. (See Civ. Code, § 2943, subd. (c) [“A beneficiary, or his or her authorized agent, shall, on the written demand of an entitled person, or his or her authorized agent, prepare and deliver a payoff demand statement to the person demanding it within 21 days of the receipt of the demand.”].) Defendants do not provide any UMF or evidence establishing the specific date on which Deutsche received the October 16, 2009 letter. In fact they contend—though they fail to support their contention with sufficient evidence—that Deutsche never received the October 16, 2009 letter. Thus, Defendants fail establish the date on which the UCL claim began to accrue. Consequently, they cannot show that the claim is time-barred by the applicable four-year statute of limitations.
Finally, Defendants assert that Plaintiff improperly seeks to recover monetary damages in connection with the third cause of action, citing paragraph 56 of the FAC. This argument is not well-taken. Even if Plaintiff were attempting to recover monetary damages, which he disputes, he also seeks restitution, which may be recovered under the UCL. (See Clark v. Super. Ct. (2010) 50 Cal.4th 605, 610 [remedies under the UCL statute are limited to injunctive relief and restitution].)

Thus, Defendants are not entitled to summary adjudication of the third cause of action with respect to Deutsche.

IV. First Cause of Action

In his first cause of action for declaratory relief, Plaintiff alleges that there is a present and actual controversy regarding his legal rights under Civil Code section 2943 because Defendants claim that the is not an “entitled person” under subdivision (a)(4) and they “do not treat him as if he was.” (FAC, ¶¶ 31-33.) Plaintiff further alleges that “a judicial declaration is necessary and appropriate at this time so that [he] may know the payoff amount for the loan secured by the First Deed of Trust and receive an explanation as to how the payoff demand was calculated.” (Id., at ¶ 34.) Plaintiff also alleges that he “is under menace and endangerment of the named defendants holding a trustee’s sale of the Property.” (Id., at ¶ 35.) He, therefore, seeks an order restraining and enjoining Defendants from continuing non-judicial foreclosure proceedings against the Property. (Id., at ¶ 36.)

Defendants asserts that the first cause of action fails because (1) declaratory relief is an equitable remedy, not a cause of action, and a substantive cause of action must exist before injunctive relief can be granted; (2) the claim is based on past events and an action for declaratory relief cannot address past events or wrongs; (3) the request for an order requiring them to provide a payoff statement is moot because on was provided in November 2014; (4) “there is no foreclosure sale scheduled to proceed on an imminent date”; and (5) the remedies sought in connection with the second and third causes of action render the first cause of action unnecessary.

Defendants’ arguments are well-taken. First, to the extent the first cause of action is based on Defendants’ alleged failure to timely provide Plaintiff with a payoff statement, the claim improperly seeks to redress past wrongs. (See Sych v. Insurance Co. of North America (1985) 173 Cal.App.3d 321, 329, fn. 5 [“Declaratory relief operates prospectively, and not merely for redress of past wrongs.”]; Canova v. Trustees of Imperial Irr. Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497 [same].)

Second, to the extent the claim seeks an order directing Defendants to provide him with a payoff statement, the claim is moot because Plaintiff admits he was provided with a payoff statement in November 2014. (See FAC, ¶¶ 24, 26.)

Third, to the extent the first cause of action seeks a declaration of Plaintiff’s rights under Civil Code section 2943, it improperly seeks the determination of issues that can be determined in the second and third causes of action. (See California Ins. Guarantee Assn. v. Super. Ct. (1991) 231 Cal.App.3d 1617, 1623–24 [“[A]n action in declaratory relief will not lie to determine an issue which can be determined in the underlying tort action. ‘The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action. The object of the statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.’ ”].)

Fourth, the remaining requests for injunctive relief do not, in and of themselves, create a viable cause of action. (See Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168 [“Injunctive relief is a remedy and not, in itself, a cause of action, and a cause of action must exist before injunctive relief may be granted.”].)

For these reasons, Defendants are entitled to judgment on the first cause of action.

Conclusion

Accordingly, the motion for summary judgment is GRANTED with respect to Ocwen. The motion for summary judgment and the motion for summary adjudication of the second and third causes of action is DENIED as to Deutsche. The motion for summary adjudication of the first cause of action is GRANTED with respect to Deutsche.