Case Number: VC063812    Hearing Date: July 17, 2014    Dept: SEC

CHUA v. CITIMORTGAGE, INC.
CASE NO.: VC063812
HEARING: 07/17/14

#4
TENTATIVE ORDER

Defendant MORTGAGEIT, INC.’s demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND. C.C.P. § 430.10(e), (f).

Plaintiffs ZITA SHING CHUA and RITA DINSMORE (trustee) filed the subject wrongful foreclosure complaint in February 2014. Defendants filed a Notice of Removal to federal court in May 2014. On June 12, 2014, the Central District Court issued an order of remand. Defendants gave plaintiff notice of the remand on July 1, 2014.

The subject demurrer was served and filed on May 5, 2014 (the same day the removal was filed by co-defendants) and set for hearing July 17, 2014. The hearing date was reinstated at the time of remand. Plaintiffs’ objection for lack of proper notice is overruled. Plaintiffs were able to file an opposition addressing the merits of the demurrer.

As alleged in the verified complaint, plaintiff purchased the property in December 2006. She contends that she fell behind on her mortgage and tried “on numerous occasions to modify her agreement.” Comp., ¶11. There is no allegation as to when she defaulted or sufficient details regarding her request for modification of the loan. See ¶¶35-36, 38-39. A Notice of Default was recorded in January 2011. ¶12, Exh. 4. Plaintiff contends that the notice was wrongfully recorded because (among other things) she was not in default with her payment obligations. ¶15.

Plaintiff received notice of a trustee sale in October 2013. Comp., ¶19. She alleges that the trustee’s sale was scheduled for December 17, 2013 and postponed to January 2014. ¶¶22, 37. The status is unclear, although it appears the sale has occurred. ¶96.

California has a comprehensive foreclosure scheme set forth in Civil Code sections 2924 through 2924k. Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149,1154. Plaintiff’s claims that defendant violated the procedures should be alleged with citation to the various statutory duties. The allegations should also be specific to each defendant, rather than asserting the claims against defendants collectively.

With respect to the claims based on the Homeowners Bill of Rights, plaintiff may only state a claim with respect to alleged wrongful conduct occurred after the 2013 passage of the relevant statutes. The Homeowner Bill of Rights has not been given retroactive effect. See Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872.

Plaintiff’s allegations pertaining to her request for a loan modification are not sufficiently specific to state a claim. Defendants do not have a duty to offer a loan modification, but they are held to certain statutory requirements when a valid request is made. See C.C. § 2923.5. Damages for their failure to comply are limited, particularly after the property has been sold.

The allegations that certain agents of defendants did not have authority to assign their rights or to commence foreclosure proceedings are not actionable, a s a borrower cannot properly challenge the authority of the entity initiating foreclosure. See Gomes, supra. A foreclosing party need not have an actual beneficial interest in both the promissory note and deed in order to commence foreclosure proceedings because the statute allows an authorized agent of the trustee or beneficiary to do so. See e.g. Debrunner v. Deutsche Bank Nat’l Trust Co. (2012) 204 Cal.App.4th 433; Calvo v. HSBC Bank USA, N.A. (2011) 199 Cal.App.4th 118.

Plaintiffs’ reliance on Glaski v. Bank of America as providing legal support for their claims is misplaced. See Yvanova v. New Century Mort. Corp. (April 25, 2014) 2014 Cal.App.LEXIS 448; Keshtgar v. U.S. Bank, N.A (June 9, 2014) 2014 Cal.App.LEXIS 498.

Plaintiffs also assert several common law claims. Because the underlying facts are not sufficiently set forth, the Court cannot ascertain the viability of those claims. Plaintiffs should be mindful of the other arguments raised in the demurrer. Although the moving defendant did not participate in the loan servicing or modification efforts, the Court will allow plaintiff a chance to amend the pleading to state her claims against it with some certainty.

Finally, it is unclear why plaintiff Dinsmore is named as party to the action, as it does not appear that the Oro Real Estate Trust holds any interest in the subject property.