Opinion
A146984
02-01-2017
DANIEL STEA, Plaintiff and Appellant, v. JP MORGAN CHASE BANK et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Contra Costa County Super. Ct. No. MSC13-02527)
Plaintiff Daniel Stea appeals from the judgment of dismissal entered following the sustaining of a demurrer to his first amended complaint (FAC) without leave to amend, filed by defendants JPMorgan Chase Bank, N.A., and JPMorgan Chase Custody Services, Inc. (collectively, Chase). The trial court concluded the FAC failed to allege facts sufficient to state a cause of action against Chase in connection with its decision to rescind two deeds of reconveyance as to real property after plaintiff's ex-wife demanded that Chase record assignments instead. We affirm.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
We take the facts from plaintiff's FAC and the exhibits attached thereto, as well as judicially noticed documents contained in the record on appeal.
I. Background
In May 2005, plaintiff borrowed $1 million from Washington Mutual Bank (WaMu) (First Loan). WaMu took out a deed of trust secured by the home he purchased in Moraga (Property). Provision 20 of the deed of trust expressly states that "the Note . . . (together with this Security Instrument) can be sold one or more times without prior notice to Borrower." Plaintiff also obtained a $491,750 equity line of credit (Second Loan), which was also secured by a deed of trust recorded against the Property. Beneficial ownership of the deeds of trust subsequently passed to defendant Chase.
Plaintiff and his then wife Suzanah Juras together obtained third and fourth loans for $500,000 and $250,000, respectively, from defendant Feuille Real Estate Investors, LLC (Feuille), which were secured by third and fourth deeds of trust recorded against the Property.
On February 19, 2008, plaintiff executed an interspousal transfer deed transferring the Property's title to Juras as her sole and separate property. He also executed third-party authorizations giving his consent for WaMu to communicate directly with Juras concerning the encumbrances on the Property.
In December 2008, plaintiff and Juras entered into a judgment of dissolution, terminating their marriage (Dissolution Action). As part of that judgment, plaintiff and Juras executed a written stipulation and order regarding the distribution of property and the division of personal and business obligations (Stipulation). Pursuant to the Stipulation, Juras was awarded the Property and was obligated to satisfy all Property-related expenses, including the mortgage payments. She also was required to satisfy in full all four of the mortgage loans that encumbered the Property by December 31, 2009. Juras did not pay off any of the four loans by this deadline.
On March 23, 2010, Chase executed assignments of the deeds of trust for the First and Second Loans (Assignments), assigning both loans to Omni Financial Group, LLC (Omni). Omni is a limited liability company of which Juras is the sole member and one of its two managers. Omni was formed on March 24, 2010. At some point, Chase charged off all or a portion of the Second Loan.
On April 13, 2010, plaintiff executed a document that he transmitted to WaMu entitled: "NOBODY HAS ACCESS TO MY LOAN INFORMATION BUT ME, THE SOLE BORROWER." The document includes his then current mailing address, and states that "[a]nybody who tells you that they have access is committing FRAUD and you are directed to contact the police immediately."
On May 5, 2010, Chase recorded a notice of default (NOD) as to the First Loan, in response to Juras's failure to pay mortgage payments when they became due. The notice of default showed that the First Loan had been past due in the amount of $24,280.
On July 27, 2010, the February 19, 2008 interspousal transfer of deed was recorded.
On August 5, 2010, Chase recorded a substitution of trustee and deed of reconveyance of the First Loan. Chase recorded a second such reconveyance on August 19, 2010, with respect to the Second Loan.
"A reconveyance is the instrument that clears title to property subject to a recorded deed of trust. The lender/beneficiary initiates the process of reconveying title to the debtor/trustor by delivering to the trustee the original note, the deed of trust and a request for a full reconveyance." (Ricketts v. McCormack (2009) 177 Cal.App.4th 1324, 1327, fn. 1 (Ricketts).)
In March 2012, Juras allegedly discovered that the two deeds of reconveyance had been issued in " 'error' " because they were recorded instead of the two March 2010 Assignments that had transferred both loans to Omni. Palmer Riedel, Juras's attorney, insisted that Chase correct its error, threatening litigation.
On March 27, 2012, Chase recorded rescissions of the deeds of reconveyance for both loans. In addition to cancelling, voiding, and rescinding both reconveyances, the rescissions state that "[s]aid Trustee declares that the Reconveyance was executed in error, and that said Trustee was never lawfully empowered to cause the execution and recordation of said Reconveyance."
On April 20, 2012, Chase recorded both of the assignments.
Plaintiff alleged he did not receive any notice of either the default, the Omni assignments, the charge-off of the Second Loan, the reconveyances, or the rescissions of the reconveyances.
On August 14, 2012, plaintiff executed a declaration in conjunction with a motion for enforcement of judgment in the Dissolution Action, in which he stated: "Although [Juras] paid off the [WaMu] loan in full approximately one and a half years ago, the two loans to [Feuille] in the total sum of $750,000.00 remain unpaid and my credit rating is adversely affected by that fact. I must have the [Feuille] obligations cleared in order to repair my poor credit standing to enable me to operate my real estate brokerage and assist me in getting back on my feet, on a personal financial level." In the FAC, he alleges that credit reporting agencies indicate he still owes approximately $2,250,000 in connection with all four mortgages. As a result, he claims he has been unable to borrow money to acquire real estate investments. II. Initiation of This Lawsuit
On December 2, 2013, plaintiff commenced this lawsuit by filing a complaint against Chase, Riedel, Juras, Omni, and Feuille.
On February 6, 2014, Chase filed an answer to the complaint.
On March 13, 2014, Juras, on behalf of Omni, recorded an "Assumption and Release of Debtor Liability" for the First and Second Loans, stating that plaintiff had been "released" from liability, and that Juras had assumed all "obligations of the borrower" as of April 30, 2013.
On August 13, 2014, Chase filed a motion for judgment on the pleadings. Plaintiff chose not to oppose the motion, instead offering his FAC.
On November 4, 2014, Chase filed its reply in support of its motion for judgment on the pleadings, asking the trial court to deem plaintiff's opposition as untimely, and to find the FAC improper because Chase had already served an answer to the complaint. Chase also asserted the FAC did not cure the complaint's substantive deficiencies.
That same day, plaintiff made a peremptory challenge to Judge Judith Craddik. Judge Jill C. Fannin was assigned to the case and ruled on Chase's motion.
On March 5, 2015, the trial court granted Chase's motion for judgment on the pleadings with leave to amend. In its written order filed on March 30, 2015, the court indicated: "The Court is not convinced that the proposed [FAC] will all [sic] address the concerns raised in [Chase's] motion and suggests that [plaintiff] review the motion again before filing his amended complaint."
On April 17, 2015, plaintiff filed the FAC. The FAC alleges causes of action against Chase for (1) violation of Civil Code section 2941, (2) negligent interference with prospective economic advantage, (3) intentional interference with prospective economic advantage, and (4) breach of contract.
On May 11, 2015, Chase filed a demurrer to the FAC, asserting that plaintiff had failed to state facts sufficient to constitute any of the four causes of action alleged against it.
On September 10, 2015, the trial court filed its order sustaining Chase's demurrer to the FAC without leave to amend.
On September 22, 2015, the trial court filed a judgment of dismissal against plaintiff and in favor of Chase.
On October 5, 2015, plaintiff filed a motion for new trial, asserting there were irregularities in the proceedings, and claiming the trial court had abused its discretion and committed errors in law.
On November 20, 2015, the trial court denied plaintiff's motion for new trial. This appeal followed.
DISCUSSION
I. Standard of Review
"A demurrer tests the legal sufficiency of the complaint . . . ." (Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497.) In determining whether the plaintiff has properly stated a claim for relief, "our standard of review is clear: ' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.' " (Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.) Our review is de novo. (Ibid.) II. Civil Code Section 2941
Rather than directly addressing the sufficiency of the allegations contained in the FAC, plaintiff spends the vast majority of his opening brief complaining that the trial court failed to understand the facts of the case. Because we review the sufficiency of the FAC de novo, the understanding (or lack thereof) of the trial court is not material to our analysis. Additionally, when an appeal involves the scope and applicability of a statute, we are not bound by the trial court's determinations. (Southern California Edison Co. v. State Board of Equalization (1972) 7 Cal.3d 652, 659, fn. 8.)
"Financing or refinancing of real property is generally accomplished in California through a deed of trust. The borrower (trustor) executes a promissory note and deed of trust, thereby transferring an interest in the property to the lender (beneficiary) as security for repayment of the loan. The deed of trust is recorded to give notice to future lenders and purchasers that the property is encumbered by an outstanding loan. Legal title to the property is held by a trustee until the loan is repaid in full. When the beneficiary receives full repayment, it is obligated to execute a request for reconveyance and deliver it to the trustee, who is then obligated to record a full reconveyance . . ., thereby delivering clear title back to the property owner." (Bartold v. Glendale Federal Bank (2000) 81 Cal.App.4th 816, 821.)
Civil Code section 2941 (section 2941) regulates the process for preparing and recording a reconveyance of a deed of trust after a borrower repays a secured loan. Section 2941, subdivision (b)(1) provides that "[w]ithin 30 calendar days after the obligation secured by any deed of trust has been satisfied, the beneficiary or the assignee of the beneficiary shall execute and deliver to the trustee the original note, deed of trust, request for a full reconveyance, and other documents as may be necessary to reconvey, or cause to be reconveyed, the deed of trust." Subdivision (d) of this section states: "The violation of this section shall make the violator liable to the person affected by the violation for all damages which that person may sustain by reason of the violation, and shall require that the violator forfeit to that person the sum of five hundred dollars ($500)."
In the FAC, plaintiff alleges: "By its act of causing the recordation of the two Rescissions of Deeds of Reconveyance on March 27, 2012, expressly stating that the Rescissions have retroactive effect to the date of the recording of the Reconveyance of the Deeds of Trust, and thereafter recording Assignments to Omni, [Chase] . . . violated those provisions of [section 2941] which call for deeds of reconveyance to be recorded after loans are satisfied." Plaintiff further asserts he was damaged by Chase's alleged violation "by suffering reduced credit capacity, increased out-of-pocket expenses and loss of credit expectancy because of [Chase's] . . . actions that caused negative information to appear on Plaintiff's credit report, injury to Plaintiff's financial reputation and resulting inability to borrow investment capital."
On appeal, plaintiff concedes that Chase "initially did what it was obligated to do by the terms of [section 2941] and the Deeds of Trust contracts: it executed and recorded Deeds of Reconveyance on August 5, 2010, by which the loans were 'cleared off the property." He states that he learned about the alleged satisfaction of the loans "by doing an independent search of the Public Record, justifiably believing therefrom that he need not worry about the First and Second [Loans] anymore." He claims his credit standing has been damaged because the public record indicates that the First and Second Loans "have been kept intact," as they have been assigned to a third party (Omni) instead of being cleared. Plaintiff asserts Chase's act of rescinding the reconveyances and recording the Omni assignments in their place violated section 2941.
We first observe that the statute itself does not address, much less prohibit, rescissions of reconveyances. In faulting Chase for rescinding the reconveyances, plaintiff posits that a violation of section 2419 can be stated if a lender rescinds a reconveyance that was previously recorded in compliance with that section. He cites to no legal authority so holding and our research has not uncovered any case supporting this theory of liability. Courts have explained that "the Legislature amended section 2941 in 1988 largely in response to problems consumers faced in securing new loans when reconveyances of security interests from prior loans had not been timely executed and recorded. [Citation.] The 1988 amendments imposed deadlines for executing and recording reconveyances when loans on real estate have been paid in full and subjected lenders and trustees to both civil and criminal penalties for failing to comply with the statutory deadlines for effecting reconveyances." (Ricketts, supra, 177 Cal.App.4th at p. 1335, fn. omitted.) Thus, the statute is focused on securing the timely recording of reconveyances. It does not address the legality of the reconveyances themselves. III. The Allegations in the FAC Are Inconsistent
We are guided by well-established principles of statutory construction. Our fundamental task is to ascertain the Legislature's intent and thereby effectuate the purpose of the statute. (Olson v. Automobile Club of Southern California (2008) 42 Cal.4th 1142, 1147; Smith v. Superior Court (2006) 39 Cal.4th 77, 83 (Smith).) "We begin with the statutory language because it is generally the most reliable indication of legislative intent." (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 888.) "If there is no ambiguity, then we presume the lawmakers meant what they said, and the plain meaning of the language governs." (Day v. City of Fontana (2001) 25 Cal.4th 268, 272 (Day); see Smith, at p. 83.) "If, however, the statutory terms are ambiguous, then we may resort to extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.] In such circumstances, we ' "select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute, and avoid an interpretation that would lead to absurd consequences." ' " (Day, at p. 272.)
Reading the deeds of trust consistent with section 2941, we understand that the holder of the promissory note and deed of trust—whether the original lender or a successor—has a duty to reconvey the security interest in the property created by the deed of trust only after the promissory note has been satisfied—that is, when the borrower or someone acting on the borrower's behalf has paid off the loan. On appeal, plaintiff has attempted to convince this court that the Chase loans were paid off, as opposed to having been assigned to Omni.
Chase's obligation to comply with section 2941 arises only "after any mortgage has been satisfied." (§ 2941, subd. (a).) This core requirement for triggering the statute has been a part of this provision since 1872. The underlying premise of section 2941 is to "set[] forth the state's regulations concerning the reconveyance of a deed of trust. Subsection (a) requires the beneficiary/lender . . . to execute a certificate of discharge . . . when the deed of trust is satisfied, i.e., paid in full." (Ciampa, Federal Preemption of State Law Regulating Deed of Trust Reconveyance Fees (1992) 32 Santa Clara L.Rev. 199, 205.) The word "satisfied" as used in this statute means no more than "paid" or "discharged." (Windt v. Covert (1907) 152 Cal. 350, 354.) As courts have observed: "A mortgagor of real property cannot, without paying his debt, quiet his title against the mortgagee." (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707.) Also, a "valid tender of performance must be of the full debt, in good faith, unconditional, and with the ability to perform." (Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1053.) Furthermore, "if it be shown that the discharge or acknowledgement of satisfaction was . . . made by reason of some mistake of fact, it will be inoperative, and the mortgage may still be foreclosed." (White v. Stevenson (1904) 144 Cal. 104, 109.) In the present case, it cannot be said that the assignments to Omni support a conclusion the loans have been satisfied, i.e., paid in full. The content of plaintiff's pleadings permits this observation.
Plaintiff's opening brief itself contains inconsistent representations. While plaintiff claims he justifiably relied on the reconveyances that Chase later rescinded, he also affirmatively states that the Chase loans were assigned to Omni. For example, in connection with his breach of contract claim, he contests the trial court's determination that Chase had a contractual right to sell the loans by stating: "There is no allegation that the First Mortgage was sold; Stea alleges only that it was assigned to Omni. The Trial Court was obligated to accept that allegation as true." (Italics added.) Because section 2941 is not triggered by assignments, it would not appear that Chase's act of rescinding the reconveyances violated that statute.
The FAC also contains inconsistent allegations as to whether the loans were "paid off" or "assigned." For example, paragraph 15 states, in part: "In accordance with the Stipulations and Judgment, Plaintiff delivered an executed Grant Deed in recordable form, granting fee title to Juras, to Juras' divorce attorney to hold unrecorded in trust until Juras satisfied the four existing loans by paying them off in full. Notwithstanding the fact that Juras did not pay off the four loans, a Grant Deed granting title from Plaintiff to Juras was recorded on July 27, 2010. . . ." (Italics added.) As discussed above, if the loans were not satisfied, then Chase's duty to reconvey did not arise.
At oral argument, plaintiff's attorney attempted to gloss over this sentence, claiming it means that Juras had not paid off all four of the loans, leaving open the possibility that she had paid off the Chase loans. This interpretation appears to be self-serving.
Other pleadings filed by plaintiff, and contained in the record on appeal, allege that an assignment occurred, not that the Chase loans were satisfied. For example, in plaintiff's memorandum of points and authorities in opposition a special motion to strike filed by Reidel, plaintiff stated: "Juras, Riedel and the unidentified benefactor (DOE 6) are guilty of conspiring to defraud Plaintiff by orchestrating the Assignments to Omni." (Italics added.) And, in opposition to Chase's motion for judgment on the pleadings, plaintiff stated: "Chase also executed an Assignment of each of the two loans to [Omni], a company owned by Juras and formed for the sole purpose of receiving the Assignments of the loans." (Italics added.) Also, after declaring that "[t]he obvious motivation for the Rescissions and the Assignments was to allow Juras to preserve the first and second priority positions of the Chase loans for the benefit of an unidentified benefactor who paid $1 million to Chase on the first loan," he states: "[T]here never has been a refinance of any of the loans as contemplated by the Judgment of Dissolution; rather, the first two loans remain intact in all respects, simply assigned to Omni. The Assignments have exactly the same legal ramifications as those that occurred when Washington Mutual assigned the loans to Chase, to wit, the borrower remains indebted and the Property remains secured by those loans in the same position of priority prior to the Assignments." (Italics added.) Simply put, plaintiff cannot have it both ways.
As Chase's counsel emphasized at oral argument, inconsistent factual allegations are frowned on: "A judicial admission is a party's unequivocal concession of the truth of a matter, and removes the matter as an issue in the case." (Gelfo v. Lockheed Martin Corp. (2006) 140 Cal.App.4th 34, 48.) "Judicial admissions may be made in a pleading . . . . [Citations.] Facts established by pleadings as judicial admissions ' "are conclusive concessions of the truth of those matters, are effectively removed as issues from the litigation, and may not be contradicted, by the party whose pleadings are used against him or her." [Citations.] " '[A] pleader cannot blow hot and cold as to the facts positively stated.' " ' " (Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.)
In trying to salvage the section 2941 claim at oral argument, plaintiff's counsel argued that Chase did not give plaintiff notice of the NOD. This point is also alleged in the FAC, wherein plaintiff states in his section 2941 claim that failure to inform him of the NOD and the "impending foreclosure" breached the covenant of good faith and fair dealing and adversely affected his credit rating. But section 2941 does not have anything to do with notices of default, foreclosures, or breaches of covenants. So, even if it is true that Chase did not give him notice that it was going to record the NOD, this allegation is not relevant to a cause of action brought under section 2941.
In sum, rather than having accepted a payoff from Juras, the FAC itself indicates that, from Chase's perspective, it instead sold or otherwise assigned its rights to Omni. Importantly, there is nothing in the FAC to suggest that Chase knew Omni was Juras's company. Nor does plaintiff allege that Omni is a sham entity lacking its own legal status.
To the extent the FAC alleges that the loans were "paid off" by Juras, the allegations are inconsistent with the record. The record is unequivocal that Chase executed assignments of the loans in favor of Omni, because the record contains the actual assignments themselves. The inconsistent allegations likely arise because Juras apparently engaged in some creative maneuvering by creating Omni to act as the assignee. As plaintiff's counsel noted at oral argument, Chase acknowledged in its motion for judgment on the pleadings that Juras had "paid off the first mortgage loan" through her company, Omni. However, as a legal matter, the loan obligation was transferred from Chase to Omni by way of an assignment, a scenario that does not suggest the loans have been satisfied.
The assignment of the right to receive payments due under a promissory note does not result in the satisfaction of the obligation to make those payments—it simply changes who is entitled to performance of the obligation. Further, as to the Second Loan, a charge-off cannot reasonably be construed as a satisfaction of an obligation. Plaintiff cites to no authority supporting a contrary conclusion. Thus, the FAC fails to allege the triggering of Chase's duty to reconvey a security interest in the property under section 2941. Additionally, plaintiff does not allege that Chase's recording of the Assignments independently violated any other statutory provision. IV. The FAC Does Not Assert the Rescissions Violated Any Other Law
We note the premise of plaintiff's FAC is that Juras breached the Stipulation by failing to satisfy the four loans.
As noted above, the FAC does not allege that Chase violated any foreclosure statutes. Plaintiff's attorney conceded the Bank assigned the loans prior to recording the NOD. Thus, the NOD had no legal effect. Counsel also argued that plaintiff would have done something to correct the default if he had known of it. However, it is undisputed that the loans had already been assigned to Omni when the NOD was recorded, so plaintiff would not have had the option of curing the default with Chase since Chase no longer held the loans.
At oral argument, plaintiff's counsel argued there cannot be a unilateral rescission of a grant of real property "as a matter of law." But that legal argument was not raised in his briefs. Even so, Juras did consent to having the reconveyances rescinded because she asked the Bank to do it and must have had the right to do so, as it was her alleged "pay off" through Omni that triggered the reconveyances in the first place. Thus, the rescissions were not undertaken solely at the Bank's initiative.
In ruling on a general demurrer, we must accept as true all the material factual allegations in the complaint. We are not, however, compelled to accept as sound the various legal conclusions set forth in the complaint. Nor are we prohibited from rationally reading the factual allegations.
Plaintiff's counsel also argued that the reconveyances could not be rescinded because Chase was no longer in the chain of title once it issued the reconveyances. This argument was not raised in his opening brief with respect to the cause of action under section 2941. Instead plaintiff raised it in connection with the cause of action for breach of contract: "Stea wishes to have the opportunity to prove at trial that after recordation of the Reconveyances in 2010, Chase had no right to sell the Notes and Deeds of Trust to anyone, as a matter of law, as alleged in the Seventh and Eighth Causes of action in the FAC . . ., because the Rescissions are void or voidable." The seventh and eighth causes of action do not name Chase as a defendant, and are only stated against Omni. Chase did not demurrer to those causes of action, thus the merits of those causes of action fall outside of this appeal.
Finally, plaintiff's damage theory is that the recordation of the NOD damaged his credit such that he was unable to borrow capital to purchase investment properties. However, it is undisputed that the default was caused by Juras's failure to make the mortgage payments, not by any action on the part of Chase. Had Juras not defaulted, the issue of whether subsequent assignments and/or reconveyances had been issued or not would be irrelevant as to plaintiff's credit rating. Plaintiff does not allege that rescinding the reconveyance documents caused him any additional damage beyond that which was incurred following Juras' defaults. Thus, he has failed to allege Chase's conduct was the proximate cause of his damages. V. Intentional and Negligent Interference with Prospective Economic Advantage
Plaintiff also asserts in the FAC that he sustained damages in the form of attorney fees and costs that he incurred in attempting to enforce the Stipulation in Dissolution Action. However, he claims the fees were incurred as the result of several acts surrounding Chase's involvement in plaintiff's loans, not just the rescissions of the reconveyances.
The elements of a cause of action for intentional interference with prospective economic advantage are (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) the defendant's intentional and wrongful conduct designed to interfere with or disrupt this relationship; (4) interference with or disruption of this relationship; and (5) economic harm to the plaintiff proximately caused by the defendant's wrongful conduct. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153 (Korea Supply).) The elements of a cause of action for negligent interference with prospective economic advantage are (1) an economic relationship existed between the plaintiff and a third party, which contained a reasonably probable future economic benefit or advantage to the plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship; (3) the defendant was negligent; and (4) such negligence caused damage to the plaintiff in that the relationship was actually interfered with or disrupted. (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786.)
To recover for intentional or negligent interference with prospective economic advantage, a plaintiff must plead and prove "the defendant's interference was wrongful 'by some measure beyond the fact of the interference itself.' " (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393; see National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 440.) An act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. (Korea Supply, supra, 29 Cal.4th at p. 1159.) Plaintiff has not met this requirement.
We have already concluded the FAC does not properly allege that Chase violated section 2941 because the pleading affirmatively states that the First Loan was assigned rather than satisfied. Plaintiff does not allege any other independently wrongful conduct on the part of Chase. Instead, he contends the wrongful acts of interference occurred on March 27, 2012, when, he alleges, Chase improperly rescinded the reconveyances.
Even if this conduct could be construed as independently wrongful, plaintiff does not allege that, at that time, there existed any economic relationship between him and a third party that could be the target of interference. Instead, he lists several properties that were purportedly on the market from 2012 through 2015 that he potentially could have purchased. However, he does not allege that he had any existing economic relationship with any of the properties' sellers at the time that Chase rescinded the reconveyances. In sum, plaintiff has failed to state claims for either negligent or intentional interference with prospective economic advantage. VI. Breach of Contract
The elements of breach of contract are: (1) existence of contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damage. (Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1391, fn. 6.)
In the FAC, plaintiff asserts that Chase breached the two loan agreements "on or about July 16, 2010 at the time that the loans were paid off and charged off, respectively, by agreeing to assign the loan to Omni and thereafter by assigning the loans to Omni, after rescinding the Deeds of Reconveyance." Chase asserted in its demurrer that plaintiff had failed to plead specific performance because he admitted he had defaulted under the two contracts. He also had not alleged breach of the deeds of trust, nor any resulting damage.
As to both loans, plaintiff has failed to allege that he, or anyone acting on his behalf, performed all of his obligations under the contract. The FAC alleges that the First Loan went into default and the Second Loan was charged off. Plaintiff now objects to the charge-off, asserting Chase breached the deed of trust by dealing with Juras. However, the record confirms that he executed third-party authorizations giving his consent for WaMu, Chase's predecessor in interest, to communicate directly with Juras concerning encumbrances on the property. Thus, he has failed to plead the element of specific performance. The demurrer was properly sustained to the cause of action for breach of contract. VII. Failure to Grant Leave to Amend
The trial court denied leave to amend, finding plaintiff did not meet his burden of showing how he could amend the FAC to change the legal effect of his pleading. On appeal, he again does not offer any proposed amendments to the FAC.
An appellant bears the burden of establishing that the trial court's denial of leave to file a second amended complaint constituted an abuse of discretion. (Herrera v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495, 1501, disapproved on another point in Yvanora v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939-941.) " 'To meet this burden, a plaintiff must submit a proposed amended complaint or, on appeal, enumerate the facts and demonstrate how those facts establish a cause of action.' " (Total Call Internat., Inc. v. Peerless Ins. Co. (2010) 181 Cal.App.4th 161, 166.) Because plaintiff has not provided us with any information as to how he would amend the FAC to properly state a cause of action against Chase, we conclude the trial court did not abuse its discretion in failing to grant leave to amend.
DISPOSITON
The judgment of the trial court is affirmed.
/s/_________
Dondero, J. We concur: /s/_________
Humes, P. J. /s/_________
Margulies, J.