Montenegro v. Bank of America CA2/8 ( 2015 )

Filed 4/22/15 Montenegro v. Bank of America CA2/8
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.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
SECOND APPELLATE DISTRICT
DIVISION EIGHT
ESTEBAN MONTENEGRO, B255460
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. EC060050)
v.
BANK OF AMERICA, N.A., et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los Angeles County,
John P. Doyle, Judge. Reversed.
Esteban Montenegro, in pro. per.; and Steven E. Smith for Plaintiff and
Appellant.
Bryan Cave, John W. Amberg and Sharon K. Brown for Defendants and
Respondents.
******
Plaintiff and appellant Esteban Montenegro sued Bank of America, N.A. and
Recontrust Company, N.A. (collectively respondents) after it foreclosed on his real
property. The trial court sustained a demurrer to Montenegro’s third amended
complaint, and Montenegro now challenges the ensuing judgment of dismissal.
Because we conclude he stated a cause of action for violation of Civil Code section
2924.171—which requires accurate and complete declarations in connection with a
foreclosure—we reverse the judgment of dismissal.
FACTS AND PROCEDURE
According to the third amended complaint, on December 1, 2006, Montenegro
entered an agreement to purchase property located at 9825 Sunland Boulevard in
Sunland, California (Property). Montenegro obtained an adjustable rate note and deed
of trust securing a loan on the property but, according to him, did not receive a signed
copy of the deed of trust and note. The recorded deed contains Montenegro’s
signature. According to the complaint, Recontrust Company was the trustee on the
deed of trust.
In 2009, there was a foreclosure sale. The trustee’s deed of sale was rescinded
on March 9, 2012. At that time, Montenegro attempted to negotiate a new loan with
Bank of America.
Montenegro was not permitted on the Property because of the foreclosure sale
and could not access his mail there. On October 2, 2012, Bank of America issued a
new notice of default. The declaration attached to the October 2, 2012 notice of
default was void because it was signed by a “robosigner” and was dated almost two
years earlier. On January 4, 2013, Bank of America recorded a notice of trustee’s sale.
The notice of trustee sale violated former section 2923.54 and was signed by a
“robosigner” not qualified to sign the document. (Former section 2923.54 was
repealed on January 1, 2011. The statute concerned loan modification programs.) A
1 All further statutory references are to the Civil Code unless otherwise indicated.
2
declaration of exemption pursuant to former section 2923.54 also was signed by a
robosigner and was dated December 15, 2010 (over two years earlier).
On January 28, 2013, a second foreclosure sale occurred. At that time,
Montenegro was attempting to modify his loan and was negotiating with Bank of
America.
In a lawsuit filed on January 4, 2012, Montenegro alleged violations of section
2924.17 and Business and Professions Code section 17200. The alleged violation of
section 2924.17 was based on the claim that the declaration in support of the notice of
default and the declaration in support of the notice of trustee sale were not accurate or
complete. The Business and Professions Code section 17200 claim was based on
allegations that the bank had no intention to honor Montengro’s modification requests,
delayed the modification, and misrepresented that they had authority to modify his
loan. Montenegro alleged that the bank represented foreclosure proceedings would not
be initiated while he was seeking to modify his loan and that the declaration
supporting the notice of trustee sale was invalid.
Respondents demurred to the third amended complaint on the grounds that
section 2924.17 was not operative until January 1, 2013. Respondents argued that the
notice of default, which Montenegro challenged as void, was recorded October 2,
2012, prior to the effective date of section 2924.17, the basis for Montenegro’s
challenge. Respondents also argued that Montenegro failed to allege the property was
owner occupied, which it claimed was necessary for Montenegro’s section 2924.17
claim.
The court sustained the demurrer to the third amended complaint and entered a
judgment of dismissal. Our record contains no information regarding Montenegro’s
complaints preceding the third amended complaint and no information describing the
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trial court’s rulings on any of respondents’ demurrers including the demurrer to the
third amended complaint.2
DISCUSSION
“‘“‘“On appeal from an order of dismissal after an order sustaining a demurrer,
our standard of review is de novo, i.e., we exercise our independent judgment about
whether the complaint states a cause of action as a matter of law.”’” [Citation.] In
reviewing the complaint, we must assume the truth of all facts properly pleaded by the
plaintiff and matters properly judicially noticed. [Citation.] However, we “do not
assume the truth of contentions, deductions, or conclusions of fact or law and may
disregard allegations that are contrary to the law or to a fact which may be judicially
noticed.”’” (Khodayari v. Mashburn (2011) 200 Cal. App. 4th 1184, 1189.) As the
appellant challenging the trial court’s sustaining of a demurrer, Montenegro had the
burden to “spell out in his brief the specific proposed amendments on appeal.”
(People ex rel. Brown v. Powerex Corp. (2007) 153 Cal. App. 4th 93, 112.)
1. Alleged Violation of Section 2924.17.
Section 2924.17 took effect January 1, 2013, as part of the Homeowner Bill of
Rights. (Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal. App. 4th 991,
950.) It provides “A declaration recorded pursuant to Section 2923.5 or . . . pursuant
to Section 2923.55, a notice of default, notice of sale, assignment of a deed of trust, or
substitution of trustee recorded by or on behalf of a mortgage servicer in connection
with a foreclosure subject to the requirements of Section 2924, or a declaration or
affidavit filed in any court relative to a foreclosure proceeding shall be accurate and
complete and supported by competent and reliable evidence.” (§ 2924.17, subd. (a).)
2 Both parties make statements without any citation to the record in violation of
California Rules of Court, rule 8.204(a)(1)(C). Both parties improperly rely on
information that is not included in our record. Although we have chosen to disregard
the noncompliant briefs pursuant to section 8.204(e)(2)(C), we do not condone the
practice of filing briefs without citation to the record.
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As Montenegro argues, the plain language of this statute requires that a mortgage
servicer provide accurate and complete declarations.
A. Declaration to Notice of Default
Montenegro challenges the declaration attached to the notice of default and the
declaration attached to the notice of sale. With respect to the declaration attached to
the notice of default, Montenegro fails to show section 2924.17 applies to the
declaration attached to the notice of default because that declaration was filed before
section 2924.17 became effective. (See Rockridge Trust v. Wells Fargo, N.A.
(N.D.Cal. 2013) 985 F. Supp. 2d 1110, 1152.)3
B. Declaration to Notice of Trustee Sale
With respect to the declaration attached to the notice of trustee sale,
Montenegro alleged that it was not accurate and complete. With respect to this
declaration, Montenegro has stated a violation of section 2924.17. The declaration
attached to a notice of trustee sale is not governed by section 2923.5 as respondents
argue. That statute applies only to notices of default. Therefore, respondents’
argument that the property must be owner occupied because section 2923.5 requires it
is not persuasive. Similarly, respondents fail to show that section 2923.55 applies to a
declaration attached to a notice of trustee sale.
Respondents also argue that section 2924.17, subdivision (c) does not provide a
private right of action for a single violation.4 We need not determine whether section
3 Citing sections 2923.5 and 2924.15, respondents argue that the property must
be owner occupied. We agree with respect to a notice of default. Section 2323.5
governs notices of default and applies only to mortgages pursuant to section 2924.15
(§ 2923.5, subd. (f)). Section 2924.15, subdivision (a) in turn limits its application to
owner occupied residential property that “is the principal residence of the borrower
and is security for a loan made for personal, family, or household purposes.” But in
addition to applying to notices of default and notices of sale, section 2924.17 also
applies to a declaration relative to a foreclosure proceeding.
4 Section 2924.17, subdivision (c) provides: “Until January 1, 2018, any
mortgage servicer that engages in multiple and repeated uncorrected violations of
subdivision (b) in recording documents or filing documents in any court relative to a
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2924.17 creates a private right of action because 2924.12 expressly creates such a
right. Section 2924.12, subdivision (b) provides: “After a trustee’s deed upon sale has
been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized
agent shall be liable to a borrower for actual economic damages pursuant to Section
3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9,
2924.10, 2924.11, or 2924.17 by that mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent where the violation was not corrected and remedied
prior to the recordation of the trustee’s deed upon sale. If the court finds that the
material violation was intentional or reckless, or resulted from willful misconduct by a
mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent, the court may
award the borrower the greater of treble actual damages or statutory damages of fifty
thousand dollars ($50,000).” (Italics added.) Other courts have held that this statute
creates a private right of action. (Alvarez v. BAC Home Loans Servicing, L.P., supra,
228 Cal.App.4th at p. 951; Rockridge Trust v. Wells Fargo, N.A., supra, 985
F.Supp.2d at p. 1148.)
2. Alleged Violation of Business and Professions Code Section 17200
Montenegro presents no argument concerning his Business and Professions
Code section 17200 claim and no discussion of how he has stated a cause of action.
Because Montenegro identifies no error with respect to sustaining his demurrer as to
the alleged violation of section 17200, we need not consider that cause of action.
(Galbiso v. Orosi Public Utility Dist. (2010) 182 Cal. App. 4th 652, 663 [burden of
showing a complaint can be amended to state a cause of action falls on the plaintiff];
Bagley v. International Harvester Co. (1949) 91 Cal. App. 2d 922, 924 [where demurrer
foreclosure proceeding shall be liable for a civil penalty of up to seven thousand five
hundred dollars ($7,500) per mortgage or deed of trust in an action brought by a
government entity identified in Section 17204 of the Business and Professions Code,
or in an administrative proceeding brought by the Department of Business Oversight
or the Bureau of Real Estate against a respective licensee, in addition to any other
remedies available to these entities. This subdivision shall be inoperative on January
1, 2018.”
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is sustained without leave to amend, appellant’s failure to raise any argument with
respect to one cause of action results in abandonment of that cause of action].)
DISPOSITION
The judgment of dismissal is reversed. The trial court is directed to vacate its
order sustaining the demurrer in its entirety and enter a new order overruling the
demurrer to the cause of action for violation of section 2924.17 and sustaining the
demurrer to the cause of action for violation of Business and Professions Code section
17200. Montenegro is entitled to costs on appeal.
FLIER, J.
WE CONCUR:
BIGELOW, P. J.
RUBIN, J.
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