Opinion
E065811
06-04-2018
ALFREDO PERALTA SAVIN, Plaintiff and Appellant, v. CIT BANK, N.A., Defendant and Respondent.
Alfredo Peralta Savin, in pro. per.; The Law Offices of Joseph R. Manning, Jr. and Joseph R. Manning, Jr. for Plaintiff and Appellant. Allen Matkins Leck Gamble Mallory & Natsis, Timothy B. McGinity and Rachel M. Sanders for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC1403767) OPINION APPEAL from the Superior Court of Riverside County. John D. Molloy, Judge. Affirmed. Alfredo Peralta Savin, in pro. per.; The Law Offices of Joseph R. Manning, Jr. and Joseph R. Manning, Jr. for Plaintiff and Appellant. Allen Matkins Leck Gamble Mallory & Natsis, Timothy B. McGinity and Rachel M. Sanders for Defendant and Respondent.
I. INTRODUCTION
Plaintiff and appellant, Alfredo Peralta Savin, appeals from the judgment following the order granting summary judgment in favor of defendant and respondent, CIT Bank, N.A. (CITB), on Savin's first amended complaint (the FAC). The FAC alleges four causes of action against CITB: (1) Violations of the California Homeowner's Bill of Rights Act (HBOR) (Civ. Code, §§ 2924.17); (2) violations of the Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act) (Civ. Code, § 1788) and the Fair Debt Collection Practices Act (the FDCPA) (15 U.S.C. §§ 1692e, 1692f); (3) negligence (Civ. Code, § 1714); and (4) unfair business practices (Bus. & Prof. Code, § 17200).
CITB was erroneously sued in the FAC by its former name, Indymac Mortgage Services, a division of OneWest Bank, FSB.
All further statutory references are to the Civil Code unless otherwise indicated.
All of Savin's claims stem from CITB's nonjudicial foreclosure sale of a Riverside residence (the property) that Savin held as trustee of his deceased mother's irrevocable trust, and CITB's refusal to modify the secured loan that Savin's mother obtained against the property before she transferred the property to the trust. Savin's mother died shortly after she transferred the property to the trust, and Savin did not assume the loan, either personally or as trustee of the trust. Thus, the trial court concluded, and we agree, that Savin lacked standing to assert his first and second causes of action against CITB, and his other claims fail as a matter of law. Accordingly, we affirm the judgment.
II. FACTS AND PROCEDURAL HISTORY
A. Undisputed Facts
In May 2003, Savin's mother, Flora Peralta, as a widow and sole borrower, signed a promissory note in the principal amount of $340,000, together with a deed of trust securing the note on her personal residence, the property, in favor of First Federal Bank of California (FFBC), the lender. The deed of trust was recorded on May 22, 2003. Ms. Peralta's son, Savin, did not sign the note or deed of trust. We refer to the note and deed of trust collectively as the Loan.
Around December 1, 2005, Savin moved into the property with Ms. Peralta and the property became Savin's principal residence, as well as Ms. Peralta's. On May 1, 2008, Ms. Peralta, as trustor, created an irrevocable trust, the Flora Peralta Family Trust (the Trust). The Trust instrument states Ms. Peralta was transferring the property to the Trust along with four other real properties, all identified by their assessor's parcel numbers.
The Trust instrument names Savin as the sole trustee of the Trust, authorizes Elizabeth Avila to serve as trustee if Savin is unable to serve, and names seven beneficiaries of the Trust, including Savin and Ms. Avila. The Trust instrument states it is the trustor's intent to make the beneficiaries "an absolute gift" of the properties transferred to the Trust. On May 3, 2008, Savin, in his capacity as Ms. Peralta's attorney in fact, executed a grant deed transferring the property to himself as the trustee of the Trust. The grant deed transferring the property to the Trust was recorded on May 5, 2008, and on that date, Ms. Peralta died.
The parties agree that the grant deed transferring the property to the Trust was recorded on May 12, 2008, but the grant deed transferring the property to the Trust shows it was recorded on May 5, 2008.
In 2010, the Federal Deposit Insurance Corporation, as FFBC's receiver, assigned the Loan to CITB, and the assignment was recorded. In November 2013, a notice of default was recorded against the property, showing a total of $25,621.78 due on the Loan. B. Procedural History
In April 2014, Savin filed his original complaint in this action alleging breach of contract and other claims against CITB and seeking to enjoin the nonjudicial foreclosure sale of the property. Shortly thereafter, Savin applied for a temporary restraining order enjoining the nonjudicial foreclosure sale of the property. The application was denied on the ground Savin had not shown a reasonable probability he would prevail on his claims against CITB due to his lack of standing. The court subsequently dismissed Savin's cause of action for breach of contract, without leave to amend, pursuant to CITB's motion for judgment on the pleadings.
The unverified FAC was filed in November 2014, after Savin's breach of contract claim was dismissed. On June 22, 2015, Savin again applied for a temporary restraining order enjoining the nonjudicial foreclosure sale of the property, and this application was also denied. The next day, June 23, the property was sold to CITB at a nonjudicial foreclosure sale, and the trustee's deed upon sale was recorded on July 6, 2015. In December 2015, CITB moved for summary judgment, claiming Savin lacked standing to pursue his claims against CITB because he was not a "borrower" on the Loan. The court granted the motion and entered judgment in favor of CITB. Savin appealed. C. The FAC's Factual Allegations
In the FAC, Savin alleges the Loan was not in default because he made all principal and interest payments on the Loan when due, and paid all real property taxes on the property directly to Riverside County. In February 2011, Savin received a notice from the Riverside County Treasurer stating that the real property tax payment for November 2010 had not been paid. On information and belief, Savin alleged that the county had misplaced the November 2010 payment, and "checks had been sent" to pay the real property taxes on the property. In March and April 2011, Savin paid the real property taxes due in November 2010 and April 2011.
On April 26, 2011, CITB sent Savin a letter indicating that CITB was establishing an escrow account to pay the real property taxes on the property and stating that the monthly escrow payment on the Loan would be $217.21, in order to pay the real property taxes "for the next 12 months" totaling $2,606.50. In another letter dated April 26, 2011, CITB claimed "a shortage of $2,642.68," and in a letter dated May 3, 2011, treated the loan "as if it was in default." In a July 7, 2011, letter, CITB indicated it had "forced placed" an escrow account on the Loan for the payment of delinquent property taxes due in November 2010.
Later in July 2011, Savin sent two letters to CITB explaining that the property taxes had been paid and asking CITB to correct its records. Thereafter, Savin "received no further communications" from CITB and "assumed" that the property tax payments issue had been "resolved despite the fact that the mortgage statements continued to show an escrow balance." From July 2011 to February 2013, Savin paid the monthly principal and interest payments of $1,910.10, and CITB accepted these payments "without complaint." Savin also paid the property taxes due in November 2011, April 2012, November 2012, April 2013, and November 2013.
It is unclear whether Savin meant that the mortgage statements showed an escrow account balance due or showed funds on deposit in the escrow account.
Around February 15, 2013, CITB sent Savin a letter stating the Loan was $6,866.28 in arrears, returned Savin's principal and interest payment of $1,910.10, and "refused to accept further payment." In March 2013, Savin sent CITB a letter again explaining that all property taxes had been paid and providing proof of the property tax payments. In a March 25, 2013, letter, CITB responded that Savin should "reference the loan documents that were signed at closing for the proper mortgage payment." Savin then hired an attorney to assist him in dealing with CITB. In April 2013, after CITB informed Savin that he should apply for a loan modification, Savin submitted "a complete application for consideration under HAMP," that is, the federal Home Affordable Mortgage Program (HAMP), along with additional documents requested by CITB. CITB did not respond in writing to Savin's "April 1 and April 5 submissions," that is, to his loan modification application and supporting documentation.
Savin further alleges on information and belief that, in August 2013, CITB instructed the trustee under the deed of trust to record a notice of default, falsely stating that the December 1, 2012, principal and interest payment had not been made and that the Loan was $19,011.09 in arrears. Savin alleges "[t]he declaration pursuant to . . . section 2923.55 states that [CITB] attempted, with due diligence, to contact the borrower and more than thirty [days] had passed since these efforts were completed." Savin alleges "[i]t is unclear what 'borrower' the declaration refers to since Flora Peralta has been dead since May 5, 2008 and [CITB] failed to respond to . . . Savin's request for modification."
In an October 11, 2013, letter to Savin, CITB stated that, "'[u]pon receipt of a complete loan modification application we will . . . complete our review and send you a letter within 30 days inform[ing] you whether the loan [is] authorized for modification [and] if the loan is eligible for modification we will draft assumption agreement and allow you to assume the loan.'" Savin alleges on information and belief that, on November 8, 2013, CITB instructed the trustee under the deed of trust to record a second notice of default, identical to the August 29, 2013, notice of default, except that the second notice of default stated the amount due was $25,621.78, rather than $19,011.09. In response, Savin "again submitted a complete application for consideration under HAMP." In a December 24, 2013, letter, CITB informed Savin "for the first time" that he was ineligible for a loan modification because he was "not a surviving spouse" of the borrower.
In a March 4, 2014, letter, CITB inconsistently advised Savin he was ineligible for a loan modification because the property was held in an irrevocable trust "or otherwise not held by a natural person." In a separate March 4, 2014, letter, CITB indicated that persons were eligible to assume or modify a loan under HAMP only if the loan was held in a revocable inter vivos trust and the person was a trustee and a primary beneficiary of the revocable trust. This March 4 letter also stated the Loan was ineligible for an assumption because CITB's guidelines only permitted loans to be assumed by surviving spouses of deceased borrowers, and Savin was not Ms. Peralta's surviving spouse.
III. DISCUSSION
A. Standard of Review on Summary Judgment
A trial court properly grants summary judgment where no triable issues of material fact exist and the moving party has shown it is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.) A defendant moving for summary judgment bears the initial burden of showing that each of the plaintiff's causes of action has no merit. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) The defendant meets its initial burden by making a prima facie showing that (1) one or more elements of each cause of action cannot be established or (2) there is a complete defense to each cause of action. (Id. at p. 849; Code Civ. Proc., § 437c, subd. (o)(2).) If the defendant meets this burden, the burden shifts to the plaintiff to show there is a triable issue of material fact concerning the element or defense. (Aguilar v. Atlantic Richfield Co., supra, at pp. 849-850.) From commencement to conclusion on the motion, the moving defendant bears an overall "burden of persuasion" that there is no triable issue of fact and the defendant is entitled to judgment as a matter of law. (Id. at p. 850 & fn. 11.)
On appeal, we review an order granting summary judgment de novo, considering all of the evidence presented on the motion (except evidence the court properly excluded) and uncontradicted inferences the evidence reasonably supports. (Merrill v. Navegar, Inc., supra, 26 Cal.4th at p. 476.) We liberally construe the evidence in favor of the opposing party and resolve all doubts concerning the evidence in favor of that party. (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.)
In reviewing a summary judgment, we also apply the same three-step process required of the trial court: We first identify the issues framed by the pleadings, since the motion must respond to these allegations by establishing a complete defense or otherwise showing there is no factual basis for relief on any theory reasonably contemplated by the opponent's pleading; we then determine whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in the moving party's favor; lastly, we determine whether the opposition demonstrates the existence of a triable, material factual issue. (Eriksson v. Nunnink (2011) 191 Cal.App.4th 826, 848.) B. Savin's HBOR Claims Lack Merit Because He Was Not a "Borrower" on the Loan
In his first cause of action, which incorporates the undisputed facts and additional allegations of the FAC described above, Savin alleges CITB violated three provisions of the HBOR, namely, sections 2923.55, 2923.7, and 2924.17. We agree with the trial court's conclusion that Savin lacks standing to assert these claims because he was not a "borrower" on the Loan, as the term "borrower" is defined for purposes of these HBOR provisions: Savin was neither a "mortgagor" nor a "trustor" under the deed of trust. (§ 2920.5, subd. (c)(1).)
Between July and September 2012, the California Legislature enacted several bills which collectively became known as the California Homeowner's Bill of Rights or HBOR. (See Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 818; Lois M. Jacobs and Heather E. Stern, Rights in Foreclosure: To Protect Homeowners Facing Foreclosure, the National Mortgage Settlement and Homeowner's Bill of Rights Impose New Standards on Mortgage Servicers, 35 L.A. Law. 24, 25-26 (Jan. 2013).) These include Assembly Bill No. 278 and Senate Bill No. 900 (2011-2012 Reg. Sess.), which added sections 2923.55, 2923.7, and 2924.17 to the Civil Code, effective January 1, 2013. (Stats. 2012, ch. 86 (Assem. Bill No. 278), §§ 9 & 20, pp. 2305 & 2311-2312; Stats. 2012, ch. 87 (Sen. Bill No. 900), § 6, pp. 2319-2321.)
1. Savin's Three Alleged HBOR Claims
First, Savin alleges CITB violated section 2923.55 by recording the notice of default (in August 2013) without providing Savin with notice that he could request "certain information" from the mortgage servicer. Section 2923.55 prohibits the recording of a notice of default pursuant to section 2924 unless the mortgage servicer has sent "the borrower" a "statement" advising the borrower that he or she may request copies of certain documents concerning the mortgage loan: "[T]he borrower's" promissory note or other evidence of indebtedness; "the borrower's" deed of trust or mortgage; any assignment of "the borrower's" mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose; and "the borrower's" payment history since "the borrower" was less than 60 days past due. (§ 2923.55, subds. (a), (b)(1)(B)(i)-(iv).)
Second, Savin alleges CITB violated section 2923.7 by failing to "establish a single point of contact" for Savin's application for a home loan modification. Section 2923.7 provides: "Upon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact." (§ 2923.7, subd. (a), italics added.)
The single point of contact is responsible for "[c]ommunicating the process by which a borrower may apply for an available foreclosure prevention alternative . . ."; "[c]oordinating receipt of all documents associated with available foreclosure prevention alternatives and notifying the borrower of any missing documents necessary to complete the application"; and "[h]aving access to current information and personnel sufficient to timely, accurately, and adequately inform the borrower of the current status of the foreclosure prevention alternative." (§ 2923.7, subd. (b)(1)-(3).)
Third, Savin alleges CITB violated section 2924.17 by including a false statement in the August 29, 2013 notice of default to the effect that the December 1, 2012, principal and interest payment of $1,910.10 was not made. Section 2924.17 requires that certain foreclosure-related documents, including the notice of default, "shall be accurate and complete and supported by competent and reliable evidence." (§ 2924.17, subd. (a).) Section 2924.17 also requires the mortgage servicer 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" before it records or files the notice of default. (Id., subd. (b), italics added.)
2. Savin Lacks Standing to Sue CITB for These Alleged HBOR Violations
"'Standing is a threshold issue, because without it no justiciable controversy exists.' [Citation.] 'Standing goes to the existence of a cause of action . . . .' [Citation.] Pursuant to Code of Civil Procedure section 367, '[e]very action must be prosecuted in the name of the real party in interest . . . .'" (Saterbak v. JPMorgan Chase Bank, N.A., supra, 245 Cal.App.4th at p. 812.) The real party in interest "is the person who possesses the right to sue under the substantive law involved; anyone other than a real party in interest lacks standing [to sue] . . . ." (City of Brentwood v. Campbell (2015) 237 Cal.App.4th 488, 504.) Savin is not a real party in interest and thus lacks standing to sue for the alleged HBOR violations because he was not a "borrower" as the term is used in sections 2923.55, 2923.7, and 2924.17.
Section 2920.5, subdivision (c)(1), defines "borrower," for purposes of sections 2923.55 and 2923.7, as "any natural person who is a mortgagor or trustor and who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer." (§ 2920.5, subd. (c)(1), italics added.) The terms "mortgagor" and "trustor" commonly refer to the borrower or the person who owes the debt or other obligation secured by the mortgage or deed of trust. (See Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 926 [the trustor under a deed of trust is the borrower]; 5 Miller & Starr, Cal. Real Estate (4th ed. 2017) § 13:1, pp. 13-13 - 13-17 [using "trustor" to include "mortgagor"].)
Section 2920.5 does not define "borrower" for purposes of section 2924.17. Still, in the context of the entire HBOR, we discern no reason the Legislature would have intended "borrower" to have a different meaning as it is used in section 2924.17 than its statutory definition for purposes of sections 2923.55 and 2923.7. (§ 2920.5, subd. (c)(1); Ste. Marie v. Riverside County Regional Park & Open Space Dist. (2009) 46 Cal.4th 282, 288-289 [a word given a particular meaning in one part of a law should be given the same meaning in other parts of the law, unless the Legislature intended a different meaning for the other parts of the law].) The HBOR statutes as a whole indicate the Legislature intended "borrower" to have the same meaning in sections 2924.17, 2923.55, and 2923.7.
Indeed, section 2924.12, subdivision (a)(1), authorizes the "borrower" to bring an action for damages or injunctive relief for "a material violation" of several HBOR provisions, including sections 2923.55, 2923.7, and 2924.17. Additionally, because the "borrower," or trustor under a deed of trust, has the right (1) to be notified of the borrower's right to request certain loan-related documents from the mortgage servicer (§ 2923.55), and (2) to request that the mortgage servicer establish a single point of contact for communications concerning the borrower's foreclosure prevention alternatives (§ 2923.7), it stands to reason that the same borrower would have the right to an accurate and complete notice of default, supported by competent and reliable evidence (§ 2924.17). Thus, we conclude that "borrower" has the same meaning in section 2924.17 as it has in sections 2923.55 and 2923.7: It refers to the mortgagor or the trustor under the deed of trust—the person liable to the lender for the loan or other secured obligation.
CITB presented undisputed evidence that Savin was not a "borrower" for purposes of his HBOR claims and thus had no standing to assert those claims. Specifically, CITB showed Savin was not a trustor under the deed of trust, either in his personal capacity or as trustee of Ms. Peralta's Trust, because he never signed the note or the deed of trust and he never assumed the Loan. The note and deed of trust show that Ms. Peralta was the only borrower and the only trustor under the deed of trust. After Ms. Peralta obtained the Loan, Savin began living on the property with Ms. Peralta. Ms. Peralta then created the irrevocable Trust and transferred the property to the Trust shortly before she died. This showing was sufficient to show that Savin was not a borrower on the Loan, and shifted the burden to Savin to present evidence sufficient to raise a triable issue whether he was a "borrower"—that is, whether he had ever assumed the Loan. Savin did not meet this burden. Thus, his first cause of action alleging the three HBOR violations against CITB was properly adjudicated in favor of CITB.
3. Savin's 2014 Declaration and the FFBC's June 2008 Letter Do Not Show That Savin Assumed the Loan or Became a "Borrower"
Savin claims he presented evidence that the original lender, FFBC, allowed Savin to assume the Loan in 2008, before the Loan was transferred to CITB in 2010, and that CITB is bound by his 2008 assumption of the Loan. The record contains no evidence that Savin ever assumed the borrower's obligations on the Loan.
(a) Savin's 2014 Declaration
In opposing CITB's motion for summary judgment, Savin asked the court to take judicial notice of a declaration he signed on April 16, 2014, and filed on June 19, 2015, in support of his application for an order temporarily restraining the nonjudicial foreclosure sale of the property, which was denied. In the 2014 declaration, Savin averred that after Ms. Peralta died on May 5, 2008, he "immediately" notified FFBC of her passing "and the fact that the property had been transferred to the Trust." Savin also stated: "In response, [FFBC] sent [Savin] an acknowledgement letter dated June 2008, confirming that it had made the change of ownership in its records." (Italics added.)
CITB objected to Savin's request for judicial notice on the ground the facts contained in Savin's 2014 declaration were not judicially noticeable. The court overruled the objection and considered Savin's declaration. In this appeal, CITB claims the court erroneously overruled its objection to the declaration on the ground that its factual assertions or contents were not judicially noticeable. (See, e.g., Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 482 [court may take notice of court records but not the truth of matters asserted in such records].) We conclude that the court properly considered the contents of Savin's 2014 declaration as evidence in opposition to CITB's motion. We do the same.
Savin claims his 2014 declaration shows FFBC made Savin the new or substitute borrower on the Loan and the trustor under the deed of trust. We disagree. Although CITB did not object to the out-of-court statement attributed to FFBC, that it "confirmed" it made the change of ownership in its records (Evid. Code, § 1200), the statement does not indicate FFBC transferred the Loan to the Trust. At most, the statement indicates FFBC accepted Savin's request to transfer the property to the Trust. But the transfer of the property to the Trust did not transfer the Loan to Savin, or the borrower's rights and obligations under the Loan.
(b) FFBC's June 2008 Letter
Savin's appellant's appendix includes a letter dated June 10, 2008, from FFBC to Savin, which was not offered into evidence on CITB's motion for summary judgment. Savin claims for the first time in this appeal that this June 2008 letter shows FFBC accepted Savin's request to transfer the Loan to Savin. But as CITB points out, this court cannot consider the letter's contents because the letter was not offered into evidence on the motion. The letter was not attached to Savin's 2014 declaration nor was it authenticated as a true and correct copy of a letter Savin received from FFBC around June 2008. (Cohen v. Five Brooks Stable (2008) 159 Cal.App.4th 1476, 1483 [appellate review of summary judgment is limited to facts shown in supporting and opposing affidavits and those admitted and uncontested in the pleadings].) In any event, even if the letter had been authenticated and presented into evidence on CITB's motion, the letter does not indicate that FFBC transferred the Loan to Savin or accepted Savin either personally or as trustee of the Trust as a new or substitute "borrower" on the Loan.
Indeed, the letter states that FFBC "will change its computer records to reflect the transfer of title to a Trust on the above referenced loan" and that three "documents" were required to complete "the request" to transfer title of the property to the Trust: (1) "Completed Trust Certification form (enclosed)"; (2) "Copy of the recorded document showing the transfer of title to a Trust"; and (3) a $175 processing fee. The letter also states: "[T]his approval of transfer does not release the transferor of liability of the debt. All terms and conditions of the loan will remain in effect in accordance with the Note, Deed of Trust, and any and all Riders." (Italics added.)
Thus, the contents of the letter are completely inconsistent with Savin's claim that he ever assumed the Loan. At most, the letter indicates FFBC was willing to change its records to show the transfer of title to the property to the Trust, but was not, by that transfer, allowing Savin or the Trust to assume the Loan. The transfer of the property to the Trust, if it was ever completed, had nothing to do with assuming the borrower's obligations on the Loan. (See Green v. Cent. Mortg. Co. (N.D. Cal., Sept. 2, 2015, No. 14-cv-04281-LB) 2015 U.S.Dist. Lexis 117241 [p. *9] ["a successor in interest does not assume a borrower's obligations simply by obtaining title to property when the deed of trust requires an assumption be made in writing and approved by the lender."].)
Additionally, the record does not show Savin complied with FFBC's directions in the June 2008 letter for changing FFBC's records to show that title to the property had been transferred to the Trust. Savin's appellant's appendix also includes a form titled "Trust Certification—Loan," which appears to be the form referenced in FFBC's June 2008 letter. Like the June 2008 letter, the form is not authenticated and was not offered into evidence on CITB's motion. The form is addressed to FFBC, references Probate Code section 18100.5, and contains the June 1, 2008, notarized signatures of Savin and Ms. Avila. By signing the form, Savin and Ms. Avila certified that the Trust instrument was executed on May 1, 2008; that Savin and Ms. Peralta created the Trust; and that Ms. Avila and Savin were the Trust's "only currently acting trustees." Thus, the form does not show that Savin submitted the form to FFBC or complied with FFBC's directions for effecting the transfer of the property to the Trust in FFBC's records. But even if Savin had made this showing, it would not have been sufficient to show that FFBC ever transferred the Loan to Savin.
Probate Code section 18100.5, subdivision (a), authorizes a trustee to present a "certification of trust" to any person, in lieu of providing a copy of the trust instrument, in order to establish the existence or terms of the trust.
4. Savin Does Not "Stand in the Shoes" of Ms. Peralta
Savin claims he has standing to sue CITB for its alleged HBOR violations because he "stands in the shoes of [Ms. Peralta] the decedent." He argues he is "no different than an assignee" and should be treated as if he were suing CITB as Ms. Peralta's "personal representative." We disagree.
Regarding Savin's assignment claim, CITB showed Ms. Peralta was the sole borrower on the Loan, and Savin made no showing that he was the assignee of Ms. Peralta's rights and obligations under the Loan. Savin did not show that FFBC had ever agreed to allow him to assume the Loan, and Savin did not allege or claim that CITB had ever agreed to allow him to assume the Loan.
Savin also made no showing that he was acting as the personal representative of Ms. Peralta's estate—the obligor on the Loan—when he engaged in the communications with CITB concerning the Loan in 2011 to 2013, as alleged in the FAC. Additionally, all of the alleged HBOR violations occurred in 2013, after the HBOR went into effect on January 1, 2013, several years after Ms. Peralta died. Thus, Ms. Peralta did not have a survivor's claim to the alleged HBOR violations; at most, the alleged HBOR violations would have accrued to Ms. Peralta's estate, but not to Savin or to the Trust. (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1264 ["[A] survivor cause of action is not a new cause of action that vests in the heirs on the death of the decedent. It is instead a separate and distinct cause of action which belonged to the decedent before death. . . ." (Italics added.)].)
The property was not part of Ms. Peralta's estate when she died because she transferred it to the irrevocable Trust before she died, and made it a gift to the seven beneficiaries of the Trust. (Laycock v. Hammer (2006) 141 Cal.App.4th 25, 32 [life insurance policy transferred to irrevocable trust was the property of the trust and was not part of the settlor's estate].)
See footnote 5, ante.
Lastly, Savin relies on guidelines issued by the Fannie Mae, a bulletin issued by the Consumer Financial Protection Bureau, and guidelines promulgated by the United States Department of Treasury as part of HAMP, for the proposition that children who succeed to their parent's interest in a property are "borrowers" for purposes of the HBOR and the "assignment law" because such children or heirs may be eligible for foreclosure prevention alternatives or home loan modifications. Savin's reliance on these authorities is unavailing. As we have explained, even if Savin was potentially eligible for a foreclosure prevention alternative, or to modify the Loan, only "borrowers" have standing to sue under sections 2923.55, 2923.7, and 2924.17 of the HBOR. (See §§ 2924.12 [authorizing "borrower" to sue for violations of §§ 2923.55, 2923.7, & 2924.17], 2920.5, subd. (c)(1) [defining "borrower" as "any natural person who is a mortgagor or trustor and who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer."].) The undisputed evidence shows Savin was not a "borrower" because he did not assume the Loan, either for himself personally or as trustee of the Trust. C. Savin's Rosenthal Act and FDCPA Claims Lack Merit (Second Cause of Action)
In his second cause of action, Savin alleges CITB made false, deceptive, or misleading representations to him in connection with the Loan and used unfair or unconscionable means to collect the Loan in violation of the Rosenthal Act (§ 1788 et seq.) and the FDCPA (15 U.S.C. §§ 1692e, 1692f).
1. Savin is Not a "Debtor" Under the Rosenthal Act
To the extent Savin alleges that CITB violated the Rosenthal Act, his claim fails because the undisputed evidence shows he is not a "debtor" as the Rosenthal Act defines the term. The Rosenthal Act defines "debtor" as "a natural person from whom a debt collector seeks to collect a consumer debt which is due and owing or alleged to be due and owing from such person." (§ 1788.2, subd. (h), italics added.) Under the Rosenthal Act, only a "debtor" has a right to sue a "debt collector" for a violation of the Rosenthal Act. (See § 1788.30 [making "debt collector" liable to "debtor" in debtor's "individual capacity" for debt collector's violations].)
As discussed, CITB presented undisputed evidence that Ms. Peralta was the sole obligor on the Loan. In response, Savin presented no evidence that he had assumed Ms. Peralta's obligations under the Loan, either in his personal capacity or as trustee of the Trust. Thus, the undisputed evidence shows the Loan or "debt" was not due and owing from Savin, and Savin was therefore not a "debtor" on the Loan. (§ 1788.2, subd. (h).)
Additionally, the record contains no evidence that CITB ever alleged that the Loan was due and owing from Savin or that Savin was responsible for the Loan. (Ibid.) To the contrary, CITB never treated Savin as a borrower on the loan. All of CITB's correspondence to Savin, which was adduced in evidence either by CITB or Savin on CITB's motion for summary judgment, was either addressed to Ms. Peralta personally or referred to Ms. Peralta as the obligor on the Loan. In short, because Savin is not a "debtor" on the Loan within the meaning of the Rosenthal Act (§ 1788.2, subd. (h)), he has no standing to sue CITB for any violation of the Rosenthal Act in connection with the Loan (§ 1788.30).
2. Savin Has No Claim Under the FDCPA
Savin argues he is not required to be a "debtor" within the meaning of the Rosenthal Act (§§ 1788.2, subd. (h), 1788.30) in order to state a cause of action against a "debt collector" for violating the FDCPA. This is correct. The Rosenthal Act requires "debt collectors" to comply with specified provisions of the FDCPA, namely, sections 1692b through 1692j of title 15 of the United States Code, subject to exceptions not applicable here. (§ 1788.17.) Section 1788.17 provides that, "[n]otwithstanding any other provision of this title, every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in Section 1692k of [the FDCPA]." (Italics added.) Thus, although a person must be a "debtor" in order to recover damages for an FDCPA violation under the Rosenthal Act (see §§ 1788.2, subd. (h), 1788.30), the person may recover damages under section 1692k of the FDCPA if the person is not a "debtor" under the Rosenthal Act but shows the "debt collector" has violated sections 1692b through 1692f of the FDCPA.
The FAC alleges CITB violated two provisions of the FDCPA: Sections 1692e (false or misleading representations) and 1692f (unfair practices). Section 1692e prohibits "a debt collector" from using any false, deceptive, or misleading representations or means in connection with the collection of any debt[,]" and section 1692f prohibits "a debt collector" from using "unfair or unconscionable means to collect or attempt to collect any debt." (Italics added.) The FDCPA defines "debt" as "any obligation or alleged obligation of a consumer to pay money" (§ 15 U.S.C. § 1692a(5)) and defines "consumer" as "any natural person obligated or allegedly obligated to pay any debt" (15 U.S.C. § 1692a(3)).
The FAC alleges CITB violated section 1692e of the FDCPA by informing Savin that (1) CITB could establish an escrow account due to one untimely property tax payment on the Loan, (2) Savin was in arrears on the note and deed of trust for money not actually owed, (3) a trust could not qualify for a loan modification under HAMP because a trust is not a natural person, and (4) CITB would review Savin's home loan modification application in accordance with HAMP guidelines, while it continued to pursue the nonjudicial foreclosure sale. The FAC alleges CITB violated section 1692f of the FDCPA when it (1) "[f]orced an escrow account" on the Loan and (2) sent letters and treated the Loan as if it were in default when it was not.
The undisputed evidence shows that none of these allegations state a claim against CITB for violating sections 1692e or 1692f of the FDCPA. As discussed, all of CITB's correspondence concerning the Loan was addressed to Ms. Peralta or referenced Ms. Peralta as the sole obligor on the Loan. There is no evidence that CITB ever attempted to collect the Loan from Savin or alleged Savin was liable for the Loan. Rather, the undisputed evidence shows that CITB, by all of its alleged actions and communications with Savin, was collecting or attempting to collect the Loan from Ms. Peralta's estate, but not from Savin. Thus, CITB was not collecting or attempting to collect the Loan from a "consumer" that is, from "a natural person obligated or allegedly obligated to pay any debt." (15 U.S.C. §§ 1692a(3), 1692e, 1692f, italics added.) The undisputed evidence also shows that Savin, both personally and as trustee of the Trust, suffered no injury due to CITB's alleged attempts to collect the Loan from Ms. Peralta's estate, even if, as Savin alleges, CITB falsely stated the amount due on the Loan in its correspondence with Savin, in the alleged August 2013 notice of default, or in the November 2013 notice of default. Thus, Savin's FDCPA claims fail as a matter of law. D. Savin's Negligence Claim Lacks Merit (Third Cause of Action)
In the FAC's third cause of action for negligence (§ 1714), Savin alleges CITB owed him a duty to exercise reasonable care in considering his application for a home loan modification, and breached that duty in failing to properly consider the application. We conclude Savin's negligence claim fails because he was not a borrower on the Loan. Thus, CITB did not owe Savin a duty to consider Savin's application for a home loan modification.
"To state a cause of action for negligence, a plaintiff must allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff's damages or injuries. [Citation.] Whether a duty of care exists is a question of law to be determined on a case-by-case basis. [Citation.] [¶] We start by identifying the allegedly negligent conduct by [defendants] because our analysis is limited to 'the specific action the plaintiff claims the particular [defendant] had a duty to undertake in the particular case.'" (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62 (Lueras).)
As a general rule, a financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money. (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1095-1096 (Nymark).) But "'Nymark does not support the sweeping conclusion that a lender never owes a duty of care to a borrower. Rather, the Nymark court explained that the question of whether a lender owes such a duty requires "the balancing of [the 'Biakanja factors'] . . . ."'" (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 901.)
As the Nymark court recognized, the Biakanja factors, or "the test for determining whether a financial institution owes a duty of care to a borrower-client[,]" "'"involves the balancing of various factors, among which are [1] the extent to which the transaction was intended to affect the plaintiff, [2] the foreseeability of harm to him, [3] the degree of certainty that the plaintiff suffered injury, [4] the closeness of the connection between the defendant's conduct and the injury suffered, [5] the moral blame attached to the defendant's conduct, and [6] the policy of preventing future harm."'" (Nymark v. Heart Fed. Savings & Loan Assn., supra, 231 Cal.App.3d at p. 1098, quoting Conner v. Great Western Sav. & Loan Assn. (1968) 69 Cal.2d 850, 865 & Biakanja v. Irving, supra, 49 Cal.2d at p. 650.)
Biakanja v. Irving (1958) 49 Cal.2d 647.
The California Courts of Appeal are split on the question of whether a lender owes a borrower a duty "'to offer, consider, or approve a loan modification.'" In Lueras, a panel of Division Three of this court concluded that a lender owes no such duty. (Lueras, supra, 221 Cal.App.4th at p. 67.) The Lueras court explained: "We conclude a loan modification is the renegotiation of loan terms, which falls squarely within the scope of a lending institution's conventional role as a lender of money. A lender's obligations to offer, consider, or approve loan modifications and to explore foreclosure alternatives are created solely by the loan documents, statutes, regulations, and relevant directives and announcements from the United States Department of the Treasury, Fannie Mae, and other governmental or quasi-governmental agencies. The Biakanja factors do not support imposition of a common law duty to offer or approve a loan modification. If the modification was necessary due to the borrower's inability to repay the loan, the borrower's harm, suffered from denial of a loan modification, would not be closely connected to the lender's conduct. If the lender did not place the borrower in a position creating a need for a loan modification, then no moral blame would be attached to the lender's conduct." (Ibid.)
The Lueras court reached this conclusion after considering numerous federal district court opinions, some concluding that a lender owes no duty of care to a borrower to modify a loan, and others recognizing that a lender owes a borrower a duty of care in negotiating or processing an application for a loan modification. (Lueras, supra, 221 Cal.App.4th at pp. 64-65.)
After Lueras was decided, Division Three of the First District Court of Appeal in Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941 at pages 948 to 951 (Alvarez) reached the opposite conclusion and held that the Biakanja factors weighed in favor of imposing a duty of care on a lender to reasonably consider a borrower's home loan modification application. Relying heavily on the federal district court decision in Garcia v. Ocwen Loan Servicing, LLC (N.D. Cal. May 10, 2010, No. C 10-0290 PVT) 2010 U.S.Dist. Lexis 45375, Alvarez concluded that the plaintiff borrower had sufficiently alleged a cause of action for negligence against the defendant lender. (Alvarez, supra, at pp. 948-951.)
Savin concedes that a lender does not have a duty to offer a borrower a home loan modification. (Lueras, supra, 221 Cal.App.4th at p. 67.) But he argues this court should follow Alvarez because there, the lender allegedly agreed to consider modifying the plaintiff-borrower's loans (Alvarez, supra, 221 Cal.App.4th at p. 948) and this is an important distinction between Lueras and Alvarez: Once a lender solicits or invites a borrower to submit an application for a home loan modification, as Savin alleges CITB did, the lender then owes the borrower a duty of care to reasonably consider the application before pursuing foreclosure proceedings. (Alvarez, supra, at pp. 948-951.) But Savin's negligence claim is distinguishable from the negligence claims alleged by the plaintiff-borrowers in both Lueras and Alvarez, because Savin was not a borrower on the Loan. Savin overlooks this key distinction between himself and the plaintiff-borrowers in Lueras and Alvarez. In arguing that the Biakanja factors weigh in favor of imposing a duty of care on CITB to reasonably consider his home loan modification application, Savin equates himself with Ms. Peralta, the borrower on the Loan. But in our view, the Biakanja factors weigh against imposing a duty of care on a lender to reasonably consider the home loan modification application of a nonborrower, even if the lender solicited or invited the nonborrower to submit the application.
In this scenario, the transaction—the nonborrower's submission of the home loan modification application for the lender's consideration and at the lender's invitation or request—is unquestionably intended to affect the nonborrower (the first Biakanja factor). But the foreseeability of harm to the nonborrower from the lender's failure to consider the application (the second factor), the degree of certainty the nonborrower will suffer injury due to the lender's failure to consider the application (the third factor) and the closeness of the connection between the lender's conduct in failing to consider the application and the injury suffered by the nonborrower (the fourth factor) are nil, because the nonborrower is not liable on the underlying loan in the first place.
As CITB points out, the nonborrower will suffer no adverse credit reporting due to his or her inability to repay the underlying loan, because the nonborrower is not liable to pay that loan. Indeed, the nonborrower will be no worse off if the lender fails to consider the application than the nonborrower would have been had no application been solicited or submitted in the first place, because the nonborrower is a stranger to the underlying loan, and, unlike a borrower, is free to "walk away" from that loan with impunity.
Thus, the fifth factor—the moral blame attached to the defendant's conduct in failing to consider the application and the policy of preventing future harm—also does not favor the nonborrower. Because the lender had nothing to do with the nonborrower's need to modify the borrower's loan, no moral blame attaches to the lender's conduct in failing to consider the nonborrower's application. Lastly, the sixth factor—the policy of preventing future harm—does not weigh in favor of imposing a duty of care on the lender to consider the nonborrower's application. The HBOR was intended to "'foster[] more cooperative relations between lenders and borrowers who are at risk of foreclosure, so that homes will not be lost.'" (Alvarez, supra, 228 Cal.App.4th at p. 950, quoting Jolley v. Chase Finance, LLC, supra, 213 Cal.App.4th at p. 903.) But a nonborrower has no right to sue a lender for HBOR violations. (See § 2924.12.) The HBOR simply does not protect or recognize the rights of nonborrowers or nonparties to home mortgage loans. For these reasons, Savin's third cause of action for negligence was properly adjudicated in favor of CITB. E. Savin's Unfair Competition Claim Lacks Merit (Fourth Cause of Action)
In his fourth cause of action, Savin alleges CITB violated California's unfair competition law. (Bus. & Prof. Code, § 17200 et seq.) "The [unfair competition law] permits civil recovery for 'any unlawful, unfair or fraudulent business act or practice . . . .'" (Lueras, supra, 221 Cal.App.4th at p. 80.) Savin alleges CITB engaged in unlawful or unfair business practices by wrongfully (1) establishing the escrow account for the payment of the real property taxes on the property in violation of section 2954, (2) declaring the note in default, (3) failing to complete review of his home loan modification application before proceeding with the foreclosure sale, and (4) "routinely" making "false statements" concerning the Loan.
As CITB points out, Savin has no standing to assert a violation of section 2954. The statute provides that "[n]o impound, trust, or other type of account for payment of taxes on the property, insurance premiums, or other purposes relating to the property shall be required as a condition of a real property sale contract or a loan secured by a deed of trust or mortgage on real property," except under specified circumstances, including "upon a failure of the purchaser or borrower to pay two consecutive tax installments on the property prior to the delinquency date for such payments." (§ 2954, subd. (a)(1)(C).)
Section 2954 repeatedly refers to "purchaser" and "borrower," and thus indicates that only the purchaser of the property or the borrower under the secured loan has standing to sue a lender for violating the statute. As discussed, Savin is not a borrower on the Loan. Thus, Savin suffered no injury from CITB's alleged wrongful establishment of the escrow or impound account for the payment of real property taxes on the property, and has no standing to sue CITB for its alleged violation of section 2954. For the same reason, Savin has no standing to sue CITB for its other alleged unlawful or unfair business practices in declaring the note in default, failing to complete review of his home loan modification application before proceeding with the foreclosure sale and "routinely" making "false statements" concerning the Loan.
IV. DISPOSITION
The judgment is affirmed. The parties shall bear their respective costs on appeal. (Cal. Rules of Court, rule. 8.278.)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
FIELDS
J. We concur: McKINSTER
Acting P. J. SLOUGH
J.