Case Name: Guillermina Garcia-Barrera, et al. v. Wells Fargo Bank, et al.

Case No: 17CV317925

I. Background
II.

This complaint alleges a single, statutory violation of the Homeowners’ Bill of Rights. Plaintiffs Guillermina Garcia-Barrera and Rogelio Barrera (collectively, “Plaintiffs”) bring this action against Wells Fargo Bank, N.A. (“Defendant”) and Clear Recon Corporation.

According to the allegations of the second amended complaint (“SAC”), Plaintiffs own real property in San Jose. (SAC, ¶ 3.) They purchased the home with financing from World Savings Bank. (Id. at ¶ 8.) A few years later, Plaintiffs obtained a loan modification. (Id. at ¶ 10.) However shortly thereafter, they fell into arrears due to an unexpected financial hardship and they eventually filed for bankruptcy. (Ibid.)

At some point, Defendant acquired the loan, and though Plaintiffs have made substantial payments, Clear Recon recorded a notice of default of the loan. (SAC, ¶ 15.) Defendant contends that $771,419 is owed on the mortgage, but that sum does not reflect the payments Plaintiffs have made, and it includes escrow amounts that were erroneously collected. (Id. at ¶¶ 13, 15.)

Plaintiffs filed the SAC alleging three causes of action for: (1) violation of Civil Code section 2924.17; (2) violation of Civil Code section 2924(a) ; and (3) declaratory relief.

On January 30, 2019, the Court sustained a demurrer to the second cause of action in the SAC, without leave to amend. Thus only the first and third causes of action remain.

Before the Court is Defendant’s motion for summary judgment or in the alternative, summary adjudication.

III. Request for Judicial Notice
IV.

In support of its motion for summary judgment, Defendant requests judicial notice of three recorded instruments and ten items from Plaintiffs’ two bankruptcy cases, case numbers 11-56877 and 16-51474.

A court may take judicial notice of instruments recorded in the official records of a county. (See Evid. Code, § 452, subd. (h); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 [disapproved on other grounds in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919] [court may take judicial notice of the existence and recordation of real property records]; Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 [court may take judicial notice of recorded deeds].)

Consequently, the Court takes judicial notice of the Deed of Trust recorded on May 23, 2006, the Notice of Default and Election to Sell Under Deed of Trust recorded on April 20, 2016, and the Notice of Trustee’s Sale, recorded on August 31, 2017.

A court may also take judicial notice of court orders, findings of facts and conclusions of law, and judgments within court records. (Evid. Code, § 452, subd. (d).) “However, while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.” (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.)

Thus, the Court will take judicial notice of the existence of court records filed in the two bankruptcy cases, Exhibits B, C, D, E, F, G, I, J, K and L. It will also take judicial notice of the orders of dismissal, as these are court orders. However, where Defendant seeks judicial notice of the truth of hearsay statements in any of the court documents, the Court will not take judicial notice of these. These include hearsay statements contained in the court records regarding escrow charges, proof of claim amounts, and arrearages.

As a result, the request for judicial notice is GRANTED in part and DENIED in part.

V. Evidentiary Objections
VI.

Plaintiffs lodge eight objections to Defendant’s evidence, specifically to statements in the declaration of Jacqueline Hunter.

However, the format of Plaintiffs’ evidentiary objections does not comply with California Rules of Court, rule 3.1354. In particular, they do not include a separate proposed order in conformity with the rule. (Cal. Rules of Court, rule 3.1354, subdivision (c).) Instead, they merely list the objections, along with the grounds for each, with blanks apparently for the Court to indicate its rulings, but with no place for the Court to sign. Such hybrid documents are improper. 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]; Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal App 4th 1 [trial court not required to rule on objections that do not comply with Rule of Court 3.1354 and not required to give objecting party a second chance at filing properly formatted papers].)

As a result, the Court does not rule on Plaintiffs’ objections to Defendant’s evidence.

VII. Motion for Summary Judgment/Summary Adjudication
VIII.

Defendant moves for summary judgment, or in the alternative summary adjudication pursuant to Code of Civil Procedure section 437c.

A. Legal Standard
B.

“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.’” (Hartline v. Kaiser Foundation Hospitals (2005) 132 Cal.App.4th 458, 464, internal citations omitted.) Summary adjudication is procedurally identical, except it acts on specific causes of action or affirmative defenses, rather than on the entire complaint. (Ibid.) 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. (Ibid.) Motions for summary adjudication proceed in all procedural respects as a motion for summary judgment. (Ibid.)

“The party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that it is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A defendant moving for summary judgment must make a prima facie showing either that the plaintiff cannot establish one or more elements of a cause of action or that there is a complete defense to the action. (Ibid.) The defendant may satisfy the initial burden of production by presenting evidence that conclusively negates an element of the plaintiff’s cause of action. (Id. at 854.) Once defendant meets its burden, the burden shifts to the plaintiff to present evidence showing there is a triable issue of material fact. (Id. at 850.)

The 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.)

C. First and Third Causes of Action
D.

Defendant moves for summary judgment on the basis there are no triable issues of material fact for the first cause of action because it met its statutory obligations pursuant to Civil Code section 2924.17. Thus, by extension, the declaratory relief cause of action also does not withstand summary judgment.

1. Defendant Meets its Initial Burden
2.
Defendant meets its initial burden to show that it met its statutory obligations under Civil Code section 2924.17.

Civil Code section 2924.17, a subdivision of the Homeowners Bill of Rights, requires that when filing a notice of default, a mortgage servicer must submit a declaration as described by section 2923.55, subdivision (c). (Civ. Code, § 2924.17.) The declaration must be “accurate and complete and supported by competent evidence.” (Civ. Code § 2924.17, subd. (a).) The declaration shall state that the mortgagor has contacted the borrower, tried with due diligence to contact the borrower, or that no contact was required because the property owner did not meet the definition of “borrower.” (Civ. Code, § 2923.55, subd. (c); Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 162.) Section 2924.17 also requires the mortgagor to “ensure that it has reviewed competent and reliable evidence to substantiate the borrower’s default, and the right to foreclose, including the borrower’s loan status and loan information.” (Civ. Code § 2924.17, subd. (b); Lucioni v. Bank of America, N.A., supra, 3 Cal.App.5th 150, 163.)

“These provisions do not create a burden on the foreclosing party to prove anything in court, other than that the declaration required by section 2923.55, subdivision (c) was filed, and that necessary steps were taken before filing it.” (Lucioni v. Bank of America, N.A., supra, 3 Cal.App.5th 150, 163.) Likewise, they “do not create a right to litigate, preforeclosure, whether the foreclosing party’s conclusion that it had a right to foreclose was correct.” (Ibid, emphasis in original.)

Defendant meets its burden of proof to establish its compliance with the statutory requirements of section 2924.17. Preliminarily, the Court takes judicial notice of the Notice of Default recorded against Plaintiffs’ property, which includes a “Declaration of Compliance” pursuant to Civil Code section 2923.55, subdivision (c), indicating an exercise of diligence in Defendant’s attempts to notify Plaintiffs of their default. Thus, it has met its burden to prove that the declaration was filed as required.

Defendant also meets its burden to show that the necessary steps were taken before the declaration was filed. Proof is provided through the declaration of Jacqueline Hunter (“Hunter Dec.”), a Vice President of Loan Documentation for Defendant. (Hunter Dec., ¶ 1.) She attests to Wells Fargo’s review of “competent and reliable information regarding Plaintiffs’ account.” (Id. at ¶ 13.) The declaration states her familiarity with Defendant’s procedures of record keeping for mortgage loans. (Id. at ¶ 2.) She also attests to a personal review of Defendant’s system relative to Plaintiffs’ loan. (Ibid.)

Hunter states her review of Defendant’s records indicate Plaintiffs defaulted on their mortgage on or about July 22, 2011. (Hunter Dec., ¶¶ 2, 6.) She also states that in response to Plaintiffs’ bankruptcy petition filed shortly thereafter in July 2011 (RJN, Exhibit B), Defendant initiated escrow reviews to insure that the scheduled escrow payments covered property taxes and insurance premiums. (Dec. in Supp. Of MSJ, ¶¶ 6, 7.) According to its records, Defendant then advised Plaintiffs that their monthly payment amount would increase. (Id. at ¶ 7.) Defendant also filed a Proof of Claim in the bankruptcy case setting forth Plaintiffs’ arrearages on the mortgage. (Ibid.) The bankruptcy case was dismissed in February 2016 (RJN, Exhibit F), but Defendant’s records reflect that Plaintiffs remained delinquent on the mortgage. (Id. at ¶ 11.) Finally, Hunter states that on April 20, 2016, Defendant caused the Notice of Default to be recorded against the property, along with the statutorily required declaration. (Dec. in Supp. Of MSJ, ¶ 13; RJN, Exhibit H.)

As a result, Defendant met its burden of proof to show that the declaration was filed as required by Civil Code section 2924.17, and that the necessary steps were taken prior to filing the Notice of Default, specifically a review of competent and reliable evidence regarding Plaintiffs’ loan status and loan information.

Additionally, because there is no underlying cause of action or controversy, Defendant also meets its burden as to the cause of action for declaratory relief. (See Artus v. Gramercy Towers Condominium Assn. (2018) 19 Cal.App.5th 923, 931.)

3. Plaintiffs Fail to Present a Triable Issue of Material Fact
4.

Plaintiffs do not establish a triable issue of material fact to show Defendant failed to meet its statutory obligations under Civil Code section 2924.17. Plaintiffs do not attempt to contradict the declaration attesting to diligent efforts to contact them, instead they focus on the competence of the evidence on which Defendant relied prior to filing the Notice of Default.

Plaintiffs’ argument rests on its contention that they were overcharged for the mortgage, and as a result the amount stated in the Notice of Default are inaccurate and do not reflect the amount due, thus there is a triable issue of material fact.

Plaintiffs’ evidence consists of two identical declarations, signed by each of them. In substance, the declarations attest to Plaintiffs’ belief and information that they have been overcharged for the loan, primarily due to incorrect overcharges from escrow holds for insurance premiums. (See Dec. of R. Barrera; G. Garcia-Barrera, at ¶¶ 11, 13, 14, 15, 16.) Likewise, they dispute the alleged arrearage, stating that they have made substantial payments that were not applied towards the loan. (Id. at ¶¶ 19, 21.)

This evidence does not raise a triable issue of material fact as to whether Defendant reviewed “competent and reliable evidence” prior to filing the Notice of Default, nor does it sufficiently contradict Defendant’s declaration as to the same.

Furthermore, Plaintiffs’ arguments in opposition to the motion misconstrue the requirements of the statute and infer an obligation to prove in court that “foreclosure documents contain accurate and complete information supported by competent and reliable evidence.” (Pl. Opp. to Def. MSJ, p. 10:13-14.) This is not the standard because Defendant does not have to prove anything other than that the declaration required by section 2923.55, subdivision (c) was filed, and that necessary steps were taken before filing it.” (Lucioni v. Bank of America, N.A., supra, 3 Cal.App.5th 150, 163.) Finally, their approach presumes Plaintiffs have an ability to litigate whether Defendant’s information upon which it relied was correct, which in the preforeclosure context they do not. (Ibid.)

As a result, Defendant’s motion for summary judgment is GRANTED.

After this signed order has been served and Defendants have complied with Rules of Court, Rule 3.1312, Defendants shall submit a proposed judgment.

The Court will prepare the order.