Linares v. Bank of America CA4/2 ( 2014 )


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  • Filed 11/6/14 Linares v. Bank of America CA4/2
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO
    RODOLFO LINARES,
    Plaintiff and Appellant,                                        E057884
    v.                                                                       (Super.Ct.No. CIVVS1100899)
    BANK OF AMERICA CORPORATION                                              OPINION
    et al.,
    Defendants and Respondents.
    APPEAL from the Superior Court of San Bernardino County. Marsha Slough and
    Michael A. Sachs, Judges. Affirmed.
    Rodolfo Linares, in pro. per., for Plaintiff and Appellant.
    Reed Smith, David S. Reidy, Matthew J. Brady and John Cooper Green for
    Defendants and Respondents.
    Plaintiff and appellant Rodolfo Linares filed a first amended complaint seeking an
    injunction precluding the defendants from using the threat of foreclosure on his residence
    in Victorville “to coerce him to execute a blind one sided [sic]” loan modification
    1
    agreement which, Linares contends, fails to comply with the guidelines of the federal
    Home Affordable Modification Program (HAMP), and precluding them from foreclosing
    on the property. He also sought declaratory relief stating the parties’ respective rights
    and responsibilities under HAMP and the Keep Your Home California (KYHCA) loan
    modification program, and alleged promissory estoppel as a theory upon which the
    defendants could be compelled to comply with HAMP. He alleged that he had sustained
    monetary damages and damages resulting from emotional distress.
    Defendants and respondents1 collectively demurred. The trial court sustained the
    demurrer without leave to amend and entered a judgment of dismissal.2 Linares filed a
    timely notice of appeal.
    FACTUAL AND PROCEDURAL HISTORY
    Because this appeal is from a judgment entered after the trial court sustained a
    demurrer without leave to amend, we independently review the properly pleaded factual
    allegations of the complaint to determine whether the complaint states a cause of action
    under any theory. (Evans v. City of Berkeley (2006) 
    38 Cal. 4th 1
    , 6; Schifando v. City of
    1  The demurring defendants are Bank of America Corp.; Bank of America, N.A.,
    successor by merger to BAC Home Loans Servicing LP; ReconTrust Company, N.A.
    (erroneously referred to by Linares as “Reconstruct”); Mortgage Electronic Registration
    Systems, Inc.; The Bank of New York Mellon fka The Bank of New York, as Trustee for
    the Certificate Holders of CWALT 2004-24CB; and Countrywide Home Loans, Inc. dba
    America’s Wholesale Lenders. We will refer to them collectively as defendants and to
    individual defendants by name as necessary.
    2 The trial court had previously sustained a demurrer to Linares’s original
    complaint but granted leave to amend as to the three causes of action which appear in the
    first amended complaint. The court sustained the demurrer without leave to amend a
    fourth cause of action, for violation of Civil Code section 2923.6.
    2
    Los Angeles (2003) 
    31 Cal. 4th 1074
    , 1081.) If we find that an amendment could cure the
    defect, we conclude that the trial court abused its discretion and we reverse; if not, no
    abuse of discretion has occurred. (Schifando v. City of Los Angeles, at p. 1081) The
    plaintiff has the burden of demonstrating that an amendment would cure the defect.
    (Ibid.)
    The following is a summary of the facts alleged in the first amended complaint
    (hereafter referred to as the complaint). As noted, some factual allegations in the
    complaint are contradicted by exhibits attached to the complaint. Where such a
    conflict exists, we accept as true the unambiguous factual contents of the exhibits.
    (SC Manufactured Homes, Inc. v. Liebert (2008) 
    162 Cal. App. 4th 68
    , 83.)
    Linares owned a home located at 16340 Molino Drive in Victorville. He had
    obtained a home loan secured by a deed of trust. BAC Home Loans Servicing LP, an
    entity related in some manner to Bank of America, was the loan servicer. In or about
    January 2009, Linares fell behind on his payments under the note. In June 2009, he
    applied for a loan modification through the “Making Home Affordable” program.
    Linares alleged that on May 28, 2010, an underwriter for Bank of America informed him
    that his application had been approved. However, by a letter dated May 28, 2010,
    attached to the first amended complaint as exhibit D, Bank of America informed Linares
    that his financial documents had been received and that they would be reviewed to
    determine his eligibility for a loan modification under HAMP. The letter did not, as
    Linares alleged, provide assurance that Bank of America would not start foreclosure
    proceedings. Also on May 28, 2010, defendant ReconTrust Company, the agent for the
    3
    beneficiary of the deed of trust, recorded a notice of default. The notice of default
    directed Linares to contact BAC Home Loans Servicing.
    Linares continued negotiating with Bank of America. The bank repeatedly
    represented to him that it had approved a loan modification program for him. In reliance
    on those representations, Linares “provided financial loan modification proposals
    consistent with the guidelines” of HAMP and KYHCA.
    Despite continuing negotiations, Bank of America failed to provide a loan
    modification that complied with HAMP. Linares alleged that because Bank of America
    is required to adhere to the guidelines of the HAMP program, the final loan modification
    offer made by the bank was submitted in bad faith.
    Despite its failure to offer a complying loan modification, Bank of America
    continued to threaten Linares with foreclosure. Linares alleged that a resulting wrongful
    foreclosure would cause him irreparable harm and might result in a pecuniary award
    which would not afford adequate relief because his home is unique. Accordingly,
    Linares sought an injunction prohibiting foreclosure. He also sought a declaration as to
    the parties’ respective rights in relation to the Uniform Commercial Code pertaining to
    negotiable instruments, the “Uniform Electronic Transactions Act for Residential
    Mortgage-Backed Securities, Pooling and servicing agreement (PSA)” and the use of
    4
    HAMP and KYHCA guidelines in a loan modification program affecting Linares’s
    home.3
    Finally, Linares alleged that he accepted the offer made by unspecified
    “defendants” (presumably Bank of America) to enter into a loan modification agreement
    and that he provided all documents required by defendants as part of the loan
    modification process. He also alleged that he made repeated counteroffers which were
    rejected, and that defendants instead made proposals that do not comply with HAMP
    guidelines. He alleged, under a variety of theories combined under the heading of
    “Promissory Estoppel,” that defendants are either “contractually bound to accept the loan
    modification as provided above” or required to draft an agreement that complies with the
    requirements of a recent settlement between Bank of America and the federal Department
    of Justice.
    LEGAL ANALYSIS
    THE DEMURRER WAS PROPERLY SUSTAINED
    There Is No Private Cause of Action to Enforce HAMP.
    Linares begins his argument by asserting, “Whereas the Courts have traditionally
    ruled that [an appellant] has no standing to challenge violations of loan modification
    3 Although Linares asserts in his opening brief that the trial court erred in
    sustaining the demurrer with respect to his claim for declaratory relief, he does not
    provide any argument or analysis as to why the court erred. Accordingly, we need not
    address this contention: “‘Where a point is merely asserted by counsel without any
    argument of or authority for its proposition, it is deemed to be without foundation and
    requires no discussion.’ [Citations.]” (Colony Hill v. Ghamaty (2006) 
    143 Cal. App. 4th 1156
    , 1163.)
    5
    guidelines, recent Court decisions and legislative enactments have changed this legal
    posture.” In support of this contention, he cites Corvello v. Wells Fargo Bank, N.A. (9th
    Cir. 2013) 
    728 F.3d 878
    (Corvello).
    Neither Corvello nor Wigod v. Wells Fargo Bank, N.A. (Wigod) (7th Cir. 2012)
    
    673 F.3d 547
    , which Linares also cites, holds that there is a private right of action for
    violation of HAMP guidelines or for failure to offer a HAMP loan modification. Both
    cases do, however, hold that a cause of action arising under state law may be based on a
    violation of HAMP guidelines.4
    In Corvello, the court held that the plaintiffs in two consolidated cases could each
    state a cause of action for breach of contract. In both cases, Wells Fargo had offered the
    plaintiffs a trial period plan, which is one of the initial steps in a HAMP modification.
    Under HAMP, if the bank makes a preliminary determination that the customer may
    qualify for a loan modification, it must offer a trial period plan, or TPP. If the customer
    makes timely payments of the amount required under the TPP and submits
    documentation which establishes that the customer qualifies for modification under
    4  In Wigod, the court explained that courts have uniformly rejected claims that
    HAMP provides borrowers a private cause of action against lenders for failing to
    consider or to grant their applications for loan modification. 
    (Wigod, supra
    , 673 F.3d at
    p. 559, fn. 4.) The court also explained that since the United States Supreme Court’s
    decision in Astra USA, Inc. v. Santa Clara County (2011) ___ U.S. ___ [
    131 S. Ct. 1342
    ,
    
    179 L. Ed. 2d 457
    ], courts have also uniformly rejected the theory that a borrower is an
    intended third party beneficiary of their loan servicer’s Servicer Participation Agreements
    (SPA) with the federal government. (Wigod, at p. 559, fn. 4.) Accordingly, there is no
    basis for Linares’s contentions that the courts have held that a borrower has a private
    cause of action under HAMP or a cause of action as a third party beneficiary under an
    SPA.
    6
    HAMP, the bank must offer the customer a loan modification. 
    (Corvello, supra
    , 728
    F.3d at pp. 880-881.) The plaintiffs alleged5 that they had fully complied with their
    obligations under the TPP. The court held that a TPP is a contract which contains a
    promise that if the customer complies with his or her obligations under the TPP and
    establishes that he or she qualifies under HAMP guidelines, the bank will offer a loan
    modification which complies with HAMP guidelines. Accordingly, the court held, each
    complaint stated a cause of action for breach of contract under California law. (Corvello,
    at pp. 883-885.) In addition, one of the complaints also validly stated a claim for
    violation of California Civil Code section 1788.17, the state’s fair debt collection act.
    (Corvello, at p. 885.)
    Wigod is to the same effect. In that case, after discussing case law rejecting the
    claim that a borrower has a private cause of action under HAMP (see our fn. 4, ante), the
    court held that the plaintiffs had validly stated a claim for breach of contract under
    Illinois law. 
    (Wigod, supra
    , 673 F.3d at pp. 559 & fn. 4, 562-563.)
    Accordingly, Linares is incorrect that the current “legal posture” is that an
    independent private right of action for an alleged violation of HAMP exists.
    Linares next asserts that “cases arising from state law are permissibly based on
    violation of federal statute which do not provide a private right of action.” This is
    5  Both cases were before the court following dismissal under rule 12(b)(6) of the
    Federal Rules of Civil Procedure, which provides that the defense that a complaint fails
    to state a claim upon which relief can be granted may be asserted by motion rather than
    asserted in a responsive pleading. Accordingly, the Ninth Circuit relied on the
    allegations of the plaintiffs’ complaints to determine whether either complaint stated a
    cause of action. 
    (Corvello, supra
    , 728 F.3d. at pp. 881, 885.)
    7
    correct, as we have discussed. However, Linares neither explains how his complaint
    currently does state a claim under any California statute or legal theory nor how it could
    be amended to state such a claim. He merely asserts that there is a private right of action
    under Civil Code section 2923.5 and under California’s unfair competition law (Bus. &
    Prof. Code, §§ 17200, 17500).
    Although we determine independently whether a complaint states a cause of action
    under any legal theory, our obligation under de novo review is limited to addressing
    issues which are adequately briefed. (Reyes v. Kosha (1998) 
    65 Cal. App. 4th 451
    , 466,
    fn. 6.) An appellant bears the burden of demonstrating reversible error. (State Farm Fire
    & Casualty Co. v. Pietak (2001) 
    90 Cal. App. 4th 600
    , 610.) To meet that burden, an
    appellant must provide adequate briefing, containing argument, analysis and citations to
    pertinent authority. “‘Where a point is merely asserted by counsel without any argument
    of or authority for its proposition, it is deemed to be without foundation and requires no
    discussion.’ [Citations.]” (Colony Hill v. 
    Ghamaty, supra
    , 143 Cal.App.4th at p. 1163.)
    Similarly, the appellant has the burden of demonstrating how a complaint could be
    amended to state a cause of action. (Schifando v. City of Los 
    Angeles, supra
    , 31 Cal.4th
    at p. 1081.) Because Linares does not explain how his complaint does state a cause of
    action under either Civil Code section 2923.5 or Business and Professions Code sections
    17200 or 17500, or how it could be amended to do so, we decline to discuss those
    assertions further.
    The same is true of Linares’s next assertion, under a separate heading, that a
    borrower may be found to be a third party beneficiary of the SPA, “a contract signed by
    8
    each mortgage servicer formalizing their participation in the HAMP program.” As noted
    above, there is no support for the third party beneficiary theory. 
    (Wigod, supra
    , 673 F.3d
    at p. 559, fn. 4.) After making this assertion, which he does not amplify, Linares veers
    back to a discussion of Wigod and other cases holding that a HAMP violation may be the
    basis of a claim under a state law, again without explaining how his complaint does or
    could be amended to state such a claim. He then discusses the “2012 California
    Homeowner Bill of Rights” without relating it in any way either to the allegations of the
    current complaint or explaining how the complaint could be amended to state a cause of
    action under the Homeowner Bill of Rights. We decline to address issues Linares has not
    sufficiently briefed. (Colony Hill v. 
    Ghamaty, supra
    , 143 Cal.App.4th at p. 1163.)
    The Complaint Does Not Allege Wrongful Foreclosure.
    Linares contends that the complaint alleges a cause of action for wrongful
    foreclosure. It does not, for the simple reason that it does not allege that a foreclosure
    sale has taken place. (See Chavez v. Indymac Mortgage Services (2013) 
    219 Cal. App. 4th 1052
    , 1062 [to maintain a wrongful foreclosure claim, “plaintiff must allege that . . .
    defendants caused an illegal, fraudulent, or willfully oppressive sale of the property
    pursuant to a power of sale in a mortgage or deed of trust”].)
    The Complaint Does Not Allege a Basis for an Injunction.
    Next, Linares contends that he pleaded sufficient facts to support the allegations
    for injunctive relief. He states that he alleged in his complaint that the defendants should
    be enjoined from foreclosing pending resolution of his loan modification application
    which “BofA admits has already been approved.” He complains that Bank of America
    9
    “has been excessively dilatory in providing the final loan modification contractual
    documents.” That is not, however, what the complaint alleges. The complaint alleges
    that “any future foreclosure would be wrongful” based solely on his claim that “the
    defendants” violated HAMP by failing to offer him a conforming loan modification.
    Moreover, the complaint does not allege that a wrongful trustee’s sale is imminent and
    will take place unless restrained. The sole notice of trustee’s sale appended to the
    complaint states that the sale will take place on September 28, 2010. That sale did not
    occur, and the parties were continuing to negotiate a modification at least as of May 1,
    2012.
    In any event, there is no “cause of action” for injunction. An injunction is a
    remedy, not a cause of action. (Martin v. Aimco Venezia, LLC (2007) 
    154 Cal. App. 4th 154
    , 162.) “‘[A] “cause of action” is comprised of a “primary right” of the plaintiff, a
    corresponding “primary duty” of the defendant, and a wrongful act by the defendant
    constituting a breach of that duty.’ [Citation.] A ‘cause of action’ must be distinguished
    from the remedy sought: ‘“The violation of one primary right constitutes a single cause
    of action, though it may entitle the injured party to many forms of relief, and the relief is
    not to be confounded with the cause of action, one not being determinative of the other.”’
    [Citation.]” (Ibid.)
    The primary right Linares asserts is his “right” to a loan modification under
    HAMP. As we have discussed above, HAMP does not provide a borrower with a private
    cause of action based on a “right” to a loan modification. 
    (Wigod, supra
    , 673 F.3d at
    p. 559, fn. 4.) Even if a borrower did have the right to sue for failure to comply with
    10
    HAMP guidelines, moreover, Linares’s complaint does not sufficiently allege such a
    failure. It alleges that the final offer of a loan modification, which was conveyed by an
    email from Bank of America’s attorney, dated May 1, 2012, does not comply with
    HAMP guidelines, but it does not contain any factual allegations stating in what way the
    offer is deficient. As to the bank’s prior offer, for example, Linares alleges that it was
    deficient because it failed to state unequivocally that if he successfully completed the
    TPP, he would be offered a permanent loan modification. The May 1, 2012 offer states
    that a final modification “will” be granted if Linares makes all three of the trial payments.
    Presumably, that promise cures the defect which was allegedly present in the prior offer,
    but Linares does not explain in what other respect the final offer fails to comply with
    HAMP regulations.
    The Complaint Does Not Allege a Cause of Action Based on Equitable Estoppel.
    Finally, Linares argues that the court erred in dismissing his claim for equitable
    estoppel. Equitable estoppel is not a cause of action. Equitable estoppel is both a theory
    under which reasonable reliance on a promise can be a substitute for consideration, thus
    creating a contract (Kajima/Ray Wilson v. Los Angeles County Metropolitan
    Transportation Authority (2000) 
    23 Cal. 4th 305
    , 310), and a principle of evidence:
    “Whenever a party has, by his own statement or conduct, intentionally and deliberately
    led another to believe a particular thing true and to act upon such belief, he is not, in any
    litigation arising out of such statement or conduct, permitted to contradict it.” (Evid.
    Code, § 623.)
    11
    The promissory estoppel “cause of action” is a hodgepodge of unrelated factual
    allegations and legal theories. Even if we interpret the complaint liberally, “with a view
    to substantial justice between the parties,” as we are required to do (Civ. Code of Proc.,
    § 452), we are hard pressed to find factual allegations which will support a cause of
    action for breach of contract, with or without reliance on promissory estoppel, or on any
    other theory related to the estoppel claim. As we have noted elsewhere, the burden of
    demonstrating that the complaint could be amended to allege a viable cause of action
    rests with the plaintiff. (Schifando v. City of Los 
    Angeles, supra
    , 31 Cal.4th at p. 1081.)
    In the absence of any argument to that effect, we decline to speculate as to whether
    Linares could state a cause of action for breach of contract.
    DISPOSITION
    The judgment is affirmed. Defendants Bank of America Corporation et al. are
    awarded costs on appeal.
    NOT TO BE PUBLISHED IN OFFICIAL REPORTS
    McKINSTER
    Acting P. J.
    We concur:
    MILLER
    J.
    CODRINGTON
    J.
    12