Filed 9/30/19 Tran v. Martingale Investments, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

TERRY TRAN et al.,

Plaintiffs and Appellants,

v.

MARTINGALE INVESTMENTS, LLC et al.,

Defendants and Respondents.

G055571

(Super. Ct. No. 30-2013-00649434)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Theodore R. Howard, Judge. Affirmed.

Law Office of David Seal and David Seal for Plaintiffs and Appellants.

TroyGould, Russell I. Glazer and Arvin Tseng for Defendant and Respondent Martingale Investments, LLC.

Blank Rome, Howard M. Knee, Cheryl S. Chang, and Jessica A. McElroy, for Defendant and Respondent PennyMac Corp.

Terry Tran and Jacqueline Tran appeal from a judgment for PennyMac Corp. (PennyMac) and Martingale Investments, LLC (Martingale). The Trans argue the trial court erred by granting nonsuit on their wrongful foreclosure action and entering judgment on their promissory estoppel action. We disagree and affirm the judgment.

FACTS

I. Substantive Facts

In late 2001, the Trans purchased residential property in Fullerton (the Property). Later, the Trans obtained a loan (Loan) from Wells Fargo Home Mortgage, Inc. (Wells Fargo) for $520,000. The Loan was secured by a deed of trust (Deed of Trust) on the Property.

In 2010, the Trans defaulted on the Loan, but reinstated it. The following year, the Trans defaulted again. The Trans did not make a mortgage payment for

22 months. In December 2012, PennyMac was assigned the Deed of Trust.

Trustee Corps, the trustee under the Deed of Trust, recorded a notice of default on the Property. On April 1, 2013, Trustee Corps recorded a notice of trustee’s sale (NOTS) setting the foreclosure sale for Monday, May 6, 2013, at 9:00 a.m.

In April 2013, after receiving the NOTS, Terry contacted PennyMac to request the reinstatement amount. Trustee Corps, on behalf of PennyMac, notified the Trans they had to pay the reinstatement amount of $78,147.76 by April 19, 2013, at

3:00 p.m. The Trans did not do so.

In early May, Terry tried to short sale the Property. On Friday, May 3, 2013, at about 2:30 p.m., Terry learned his attempt to short sale the Property failed.

Less than one hour later, Terry called PennyMac to request the reinstatement amount and to postpone the sale of the Property. Terry spoke with customer service representative W.B. for approximately 40 minutes. As W.B. spoke with Terry, W.B. also spoke with someone to get the reinstatement amount. After Terry repeated he wanted to postpone the sale, W.B. stated the following: “Based on the information that I received, we won’t be able to put a postponement on the sale date. The only thing available or the only option you’ll have is to reinstate the account.” After a discussion about the short sale, W.B. stated, “you waited until the last minute to address this and it’s too late.” W.B. repeated the only thing Terry could do was pay the reinstatement amount.

As W.B. waited for the reinstatement amount, he told Terry that he would have to go to the bank and wire the money. Terry asked if Saturday was okay. W.B. replied, “Today.” After W.B. asked someone whether Terry could wire the money on Saturday, W.B. told Terry, “the best thing would be to do it Monday morning.” W.B. told Terry that he needed to wire the money before 9:00 a.m. on Monday morning. When Terry asked for the account number to wire the money, W.B. said he could immediately go and wire the money or “Monday morning before [10:00 a.m.].” When asked, W.B. repeated the sale was at “[10] o’clock.” W.B. told Terry he was “cutting it very, very close.” W.B. gave Terry the Bank of America (Bank) account number and name where he could wire the money. W.B. told Terry he had to include his loan number, full name, and telephone number. W.B. asked Terry if he could wire the money that day. Terry answered he would try to wire the money before 6:00 p.m. or Monday before 10:00 a.m. W.B. advised Terry to call PennyMac immediately after he wired the money to ensure it received the funds.

After a brief delay, W.B. told Terry the reinstatement amount was $81,936.33 and the Property would be sold at 10:00 a.m. on Monday. W.B. added, “If you do it today, that would be better.” Terry responded, “Okay. All right. I [sic] do it.” W.B. repeated he was “waiting until the last minute to get this done” and the Property would be sold Monday at 10:00 a.m. W.B. repeated it would be better if he wired the money that day.

The next day, Saturday, Terry went to the Bank to wire the reinstatement amount to PennyMac. A Bank employee told Terry that the Bank did not wire funds on weekends and it would wire the funds on Monday.

The Bank wired $81,936.33 to PennyMac at 9:22 a.m. on Monday, May 6, 2013—Terry did not include the loan information W.B. instructed him to include. At 9:37 a.m. that morning, the Trans called PennyMac to inquire about the status of the funds and spoke with J.G. Sometime between 9:37 a.m. and 10:06 a.m., J.G. confirmed PennyMac received the funds. At 10:06 a.m., PennyMac contacted Trustee Corps to request a postponement of the sale to allow the funds to be posted to the Loan. At

10:15 a.m., Trustee Corps responded the sale had already occurred; Martingale purchased the Property. PennyMac returned the full amount to the Trans within a week of the foreclosure sale.

II. Procedural Facts

The Trans filed a complaint and a first amended complaint (FAC), which alleged wrongful foreclosure and promissory estoppel against PennyMac and quiet title against Martingale.

With respect to the wrongful foreclosure claim, the FAC alleged the trustee sale was void because the Trans reinstated the Loan by 9:30 a.m. on Monday, May 6, 2013. As to the promissory estoppel claim, paragraph 30 of the FAC alleged the Trans reasonably relied on PennyMac’s promises because they intended to file for bankruptcy to stop the sale and would have done so if not for PennyMac’s promises to reinstate the Loan and cancel the sale. The Trans sought economic and punitive damages.

Trial proceeded on the Trans’ claims against PennyMac. The trial court bifurcated the trial against Martingale.

At trial, during Terry’s testimony, an audio recording of his conversation with W.B. was played for the jury. Terry testified he received the NOTS and “glance[d] through it.” When the Trans’ counsel asked Terry whether he was aware bankruptcy was an option to prevent foreclosure, Terry responded, “I’m not aware until today.” When his counsel asked him whether he sought out a bankruptcy attorney after he spoke with W.B., he said, “No, sir.”

On cross-examination, Terry admitted W.B. told him that he had to include the loan number on the wire transfer request. He also admitted the loan number was not on the wire transfer request. When counsel asked him whether he “pretended to want to do a short sale in order to get PennyMac to stop the foreclosure sale[,]” Terry answered, “Yes[.]”

The Trans also offered testimony from Jacqueline, their former attorney, W.B., whose testimony was presented via his deposition, a Trustee Corps employee, and three PennyMac employees. One of the PennyMac employees, M.M., testified pursuant to Evidence Code section 776. M.M. testified PennyMac had to have the loan number, borrower’s name, and transaction amount to match the funds to an account, ensure the funds were in the full amount and available, and apply the funds to the account. He stated that if there was missing information, such as a loan number, “additional research is then completed to obtain the loan number.”

Near the end of the Trans’ case-in-chief, PennyMac filed a motion for nonsuit on both claims and on the issue of punitive damages (Code Civ. Proc., § 581c). The trial court took the matter under submission. At the close of evidence, as authority for nonsuit on the promissory estoppel claim, PennyMac’s attorney orally amended its motion to rely on Code of Civil Procedure section 631.8, motion for judgment. The trial court gave the Trans the opportunity to offer any rebuttal testimony, but they declined to do so. The trial court responded, “Oh.” The Trans’ attorney indicated he would not file written opposition to the nonsuit motion but would oppose it orally, which he did.

The Trans moved to amend the FAC to conform to proof on the promissory estoppel claim. The Trans’ counsel requested leave to amend paragraph 30 to state, “[The Trans] did, in fact, reasonably rely upon the representations and promises made by PennyMac in that [the Trans] were fully prepared to make deposit of funds directly into PennyMac’s account at Bank . . . on Saturday, May 5, 2013, to reinstate the [L]oan and obtain a cancellation of the foreclosure sale scheduled for May 6, 2013.” PennyMac objected. The trial court denied the motion.

Later, the trial court granted PennyMac’s nonsuit motion on the wrongful foreclosure claim pursuant to Code of Civil Procedure section 581c, subdivision (b). With respect to the promissory estoppel claim, it explained that if it was legal in nature it granted the motion pursuant to Code of Civil Procedure section 581c, subdivision (b), but if it was equitable in nature pursuant to Code of Civil Procedure section 631.8, subdivision (b).

The Trans filed an ex parte motion arguing inter alia the trial court erred by applying the wrong standard for nonsuit on the wrongful foreclosure claim and the court erred by denying their motion to conform to proof based on untimeliness.

On the day set for jury trial on the Trans’ claim against Martingale, the court denied the Trans’ ex parte motion. After hearing argument from counsel on the Trans’ quiet title claim against Martingale, the court entered judgment for Martingale pursuant to Code of Civil Procedure section 581c. The court entered judgment for PennyMac and Martingale the following month.

DISCUSSION

I. PennyMac

A. Wrongful Foreclosure

The Trans argue the trial court erred by granting nonsuit on their wrongful foreclosure cause of action because PennyMac agreed to cure the default and reinstate the Loan. We disagree.

“We review a grant of nonsuit de novo, applying the same standard governing the trial court. [Citation.] As the Supreme Court has explained, ‘A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor. [Citation.] “In determining whether plaintiff’s evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded.”’ [Citation.] Consequently, the reviewing court ‘will not sustain the judgment “‘unless interpreting the evidence most favorably to plaintiff’s case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff, a judgment for the defendant is required as a matter of law.’” [Citation.]’ [Citation.]” (Brand v. Hyundai Motor America (2014) 226 Cal.App.4th 1538, 1544-1545.)

“The basic elements of a tort cause of action for wrongful foreclosure track the elements of an equitable cause of action to set aside a foreclosure sale. They are:

‘(1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale . . . was prejudiced or harmed; and (3) . . . the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.’ [Citations.]” (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 408.)

Civil Code 2924c, subdivision (e), provides as follows: “Reinstatement of a monetary default under the terms of an obligation secured by a deed of trust, or mortgage may be made at any time within the period commencing with the date of recordation of the notice of default until five business days prior to the date of sale set forth in the initial recorded notice of sale. [¶] . . . [¶] Nothing contained herein shall give rise to a right of reinstatement during the period of five business days prior to the date of sale, whether the date of sale is noticed in a notice of sale or declared at a postponement of sale. [¶] Pursuant to the terms of this subdivision, no beneficiary, trustee, mortgagee, or their agents or successors shall be liable in any manner to a trustor, mortgagor, their agents or successors or any beneficiary under a subordinate deed of trust or mortgage or any other person having a subordinate lien or encumbrance of record thereon for the failure to allow a reinstatement of the obligation secured by a deed of trust or mortgage during the period of five business days prior to the sale of the security property, and no such right of reinstatement during this period is created by this section. Any right of reinstatement created by this section is terminated five business days prior to the date of sale set forth in the initial date of sale, and is revived only as prescribed herein and only as of the date set forth herein.”

Here, PennyMac was entitled to nonsuit because the Trans’s evidence, as a matter of law, was insufficient to establish PennyMac caused an illegal, fraudulent, or willfully oppressive sale of the Property. The evidence demonstrated that on April 1, 2013, Trustee Corps recorded a NOTS setting the foreclosure sale for Monday, May 6, 2013, at 9:00 a.m. At trial, Terry admitted he received and reviewed the NOTS. Even assuming Terry tendered the reinstatement amount on Saturday, May 4, 2013, the day he attempted to wire the money, this was after the five-day reinstatement period had expired (Civ. Code, § 2924c, subd. (e) [five business days]). There was no statutory basis for the Trans to reinstate the Loan because the statutory reinstatement period expired on Monday, April 29, 2013, before Terry tendered the reinstatement amount. The Trans concede this point, stating “perhaps [it was] true” they did not comply with Civil Code section 2924c.

The Trans’ real complaint though is that during Terry’s conversation with PennyMac on Friday, May 3, 2013, he and W.B. entered into an agreement to cure the default and the foreclosure sale was invalid. As support for their claim, the Trans rely on Bank of America v. La Jolla Group II (2005) 129 Cal.App.4th 706 (Bank of America).

In Bank of America, supra, 129 Cal.App.4th at page 709, the homeowners defaulted on their loan, and the bank, which was the beneficiary under the deed of trust, instructed the trustee to issue a notice of default, election to sell, and notice of trustee’s sale. The trustee’s sale was scheduled for November 12, 2002. (Ibid.) Four days before the scheduled sale, the homeowners went to the bank and tendered payment. (Ibid.) A bank employee accepted the payment and reinstated the loan. (Ibid.) However, the bank never informed the trustee that it reinstated the loan, and the trustee sold the property to buyer. (Ibid.) The bank sued the buyer to cancel the deed of trust, and the bank prevailed on summary adjudication. (Id. at p. 710.)

The Bank of America court stated Civil Code section 2924c, subdivision (e), did not prohibit the parties’ cure of the default, even though the five-day time limit expired, because the court could not conclude the Legislature intended to eliminate the parties’ ability to voluntarily agree to adjust delinquencies by mutual consent. (Bank of America, supra, 129 Cal.App.4th at p. 712.) The court stated the following: “If, after a default, the trustor and beneficiary enter into an agreement to cure the default and reinstate the loan, no contractual basis remains for exercising the power of sale.

[¶] In this case, it is undisputed that the trustor and beneficiary entered into an agreement to cure the default. It follows that the beneficiary had no right to sell afterward.” (Ibid.) The Bank of America court concluded the foreclosure sale was invalid. (Ibid.)

Here, assuming for purposes of argument there was a modified agreement to pay the delinquent amount by 10:00 a.m., the Trans did not perform the material terms necessary to cure the default and reinstate the Loan. The evidence demonstrated W.B. told Terry he had to include his loan number on the wire transfer request. At trial, Terry admitted W.B. told him this and he failed to do so. The evidence also demonstrated W.B. advised Terry to call immediately after he wired the money to ensure PennyMac received the funds. He did not call immediately but instead waited until 37 minutes after the bank opened. M.M. testified PennyMac needed the loan number, borrower’s name, and transaction amount to apply the funds to an account and missing information required additional research. By not including the loan number on the wire transfer request and not immediately calling PennyMac to ensure it received payment, Terry did not follow the material terms of the modified agreement, which resulted in a delay in processing the payment.

Unlike in Bank of America, where the homeowners tendered payment four days before the sale, here the Trans failed to perform the conditions necessary to cure the default and reinstate the Loan. The Trans suggest an unidentified PennyMac employee told them it would rescind the sale, but the record before us includes no evidence of that conversation. Even interpreting the evidence most favorably to the Trans and resolving all presumptions, inferences and doubts in their favor, there was no illegal, fraudulent, or willfully oppressive sale of the Property.

Finally, the Trans claim PennyMac did not dispute at trial there was a modified agreement. The Trans are mistaken. In PennyMac’s brief and during argument on the nonsuit motion, PennyMac’s counsel cited to Tydings-Monsour v. EMC Mortg. Co. (C.D. Cal. 2006) 2006 Bankr. LEXIS 2455, a case that discussed Bank of America, supra, 129 Cal.App.4th 706. In Tydings-Monsour v. EMC Mortg. Co. (C.D. Cal. 2006)

2006 Bankr. LEXIS 2455, the court opined that for the Bank of America “exception to apply, there must be (1) a tender (2) of a payment sufficient to cure a default,

(3) acceptance of that payment, and (4) reinstatement of the loan.” Below, and on appeal PennyMac acknowledged there was evidence the Trans submitted sufficient funds to cure the default (the first two elements), but it disputed there was evidence satisfying the latter two elements. By disputing the latter two elements, PennyMac did argue there was a lack of performance of a modified agreement. Nonsuit was proper on the Trans’s wrongful foreclosure cause of action.

B. Promissory Estoppel

The Trans contend the trial court erred by granting judgment on their promissory estoppel cause of action. Not so.

Under Code of Civil Procedure section 631.8, “‘“a court acting as trier of fact may enter judgment in favor of the defendant if the court concludes that the plaintiff failed to sustain its burden of proof. [Citation.] In making the ruling, the trial court assesses witness credibility and resolves conflicts in the evidence.”’ [Citation.] ‘“Because the trial court evaluates the evidence as a trier of fact, it may refuse to believe some witnesses while crediting the testimony of others.”’ [Citations.]” (Orange County Water Dist. v. MAG Aerospace Industries, Inc. (2017) 12 Cal.App.5th 229, 239 (Orange County Water Dist.).) “‘“The standard of review after a trial court issues judgment pursuant to Code of Civil Procedure section 631.8 is the same as if the court had rendered judgment after a completed trial—that is, in reviewing the questions of fact decided by the trial court, the substantial evidence rule applies.”’ [Citation.]” (Orange County Water Dist., supra, 12 Cal.App.5th at p. 239.)

“‘“‘The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made;

(3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.”’”’ [Citation.]” (Wells Fargo Bank, N.A. v. FSI, Financial Solutions, Inc. (2011) 196 Cal.App.4th 1559, 1573.)

Here, assuming for purposes of argument there was a clear and unambiguous promise, there was no evidence the Trans reasonably and foreseeably relied on it. “‘“Promissory estoppel applies whenever a ‘promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance’ would result in an ‘injustice’ if the promise were not enforced . . . .”’ [Citation.]” (Aceves, supra, 192 Cal.App.4th at p. 227.) In the FAC, the Trans alleged there was reasonable reliance because but for W.B.’s promise PennyMac would reinstate the Loan and cancel the sale if the Trans tendered payment, they would have filed for bankruptcy. But Terry testified he was not aware bankruptcy was an option until his counsel questioned him at trial. In their opening brief, the Trans refer to “other alternatives” without specifying what those alternatives were. The record includes no evidence the Trans reasonably relied on W.B.’s statements.

The Trans rely on West v. JPMorgan Chase Bank, N.A. (2013)

214 Cal.App.4th 780 (West), to support their claim of reasonable reliance. West is inapposite.

In West, supra, 214 Cal.App.4th at page 804, the court concluded plaintiff’s complaint sufficiently alleged justifiable reliance on a promise. The court held the complaint could “be reasonably interpreted to allege that [plaintiff’s] reliance on [defendant’s] alleged misrepresentations caused [her] not to take legal action to stop the trustee’s sale.” (Id. at p. 804.) In her brief on appeal, plaintiff further stated “‘she would have pursued other options, including possibly selling her home, retaining counsel earlier, and/or finding a co-signer to save her home.’” (Id. at p. 805.)

Again, the record includes no evidence the Trans considered filing for bankruptcy, until the day of trial, and on appeal the Trans only mention vague alternatives. Judgment pursuant to Code of Civil Procedure section 631.8 was proper on the Trans’ promissory estoppel cause of action. It would be the same result pursuant to a motion for nonsuit. (National Farm Workers Service Center, Inc. v. M. Caratan, Inc. (1983) 146 Cal.App.3d 796, 807 [§ 631.8 motion serves same purpose as § 581c motion].)

C. Amend to Conform to Proof

The Trans assert the trial court erred by denying their motion to amend to conform to proof. Again, we disagree.

“A trial court may allow the amendment of a pleading at any time up to and including trial. [Citations.] Leave to amend to conform to proof at trial ordinarily is liberally granted unless the opposing party would be prejudiced by the amendment. [Citation.] Leave to amend a pleading at trial is properly denied, however, if the proposed amendment raises new issues that the opposing party has had no opportunity to defend. [Citation.] The decision whether to grant leave to amend a pleading at trial is committed to the sound discretion of the trial court. [Citations.]” (Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 354-355.)

Here, the record did not include proof of the facts the Trans sought to amend to include in the FAC. Additionally, the proposed amendment would have introduced an issue distinct from the issue presented at trial and which PennyMac did not have an opportunity to defend against. The trial court did not abuse its discretion by denying the Trans’ motion to amend the FAC to conform to proof.

II. Martingale

The Trans sued Martingale for quiet title. At the second phase of the trial, the trial court entered judgment for Martingale. On appeal, the Trans do not raise any issues concerning Martingale, a point Martingale notes in its brief. Because the Trans do not assert any error, they abandon their appeal as to Martingale. (In re Sade C. (1996)

13 Cal.4th 952, 994 [judgment presumed correct and appellant must raise claims of reversible error or appeal abandoned].)

As an alternative basis for affirming, Martingale contends the appeal is moot. In support of this claim, Martingale filed a request for judicial notice of three documents establishing it no longer held title to the Property as of March 2018. Because the Trans abandon their appeal as to Martingale, we need not address its claim the appeal is moot. Martingale’s request for judicial notice is denied.

DISPOSITION

The judgment is affirmed. Respondents are awarded their costs on appeal.

O’LEARY, P. J.

WE CONCUR:

ARONSON, J.

GOETHALS, J.