Case Number: NC060358??? Hearing Date: June 14, 2016??? Dept: S27
INTRODUCTION
Defendant Wells Fargo Bank, N.A. demurs to each Cause of Action in Plaintiff?s complaint:
1. Violation of Homeowner?s Bill of Rights (?HOBR?);
2. Promissory Estoppel;
3. Unfair Business Practices;
4. Negligence; and
5. Declaratory and Injunctive Relief.
Defendant also moves to strike the claim for punitive damages and for monetary damages under the Third Cause of Action.
REQUEST FOR JUDICIAL NOTICE
Defendant?s request for judicial notice is granted.
SUMMARY OF FACTS
Plaintiff borrowed $300,000 form World Savings Bank FSB in 2006. The note was secured by a Deed of Trust on the property at 1360 N. Fries Ave, Wilmington, California.
Wells Fargo is the successor to World Savings after merger.
Plaintiff defaulted on her loan in 2014. She applied for a loan modification which was denied.
She applied a second time but the property was sold at foreclosure sale on September 15, 2015 while the second application was pending.
ANALYSIS AND RULING
The First Cause of Action alleges the HOBR was violated by dual tracking ? that foreclosure occurred while a modification application was pending.
Because a prior application had been evaluated and rejected by written decision, Plaintiff was required to establish a material change in her financial condition. CC section 2923.6 states:
?In order to minimize the risk of borrowers submitting multiple applications for first lien loan modifications for the purpose of delay, the mortgage servicer shall not be obligated to evaluate applications from borrowers who have already been evaluated or afforded a fair opportunity to be evaluated for a first lien loan modification prior to January 1, 2013, or who have been evaluated or afforded a fair opportunity to be evaluated consistent with the requirements of this section, unless there has been a material change in the borrower?s financial circumstances since the date of the borrower?s previous application and that change is documented by the borrower and submitted to the mortgage servicer.?
There is no allegation that Plaintiff had a material change in her financial condition when she applied for a modification a second time.
The demurrer is sustained without leave to amend.
The Second Cause of Action for Promissory Estoppel requires an allegation of a clear and unambiguous promise and reasonable reliance. Laks v. Coast Fed. Savings & Loan Ass?n (1976) 60 Cal. App. 3d 885, 890. The only promise alleged is that Defendant ?promised to review Plaintiff for a loan modification.? This is neither clear nor unambiguous. Who made this promise and how? A ?review? does not promise a modification. Plaintiff?s allegation of reliance is insufficient because she relies on the dual tracking prohibition in the HOBR for that element. The prohibition did not apply under the facts alleged.
The demurrer is sustained without leave to amend.
The Third Cause of Action is for Unfair Business Practices. Defendant argues that there are no facts establishing a practice which is unfair or fraudulent or unlawful. Defendant also challenges Plaintiff?s standing on the basis that she has not suffered loss of property through any business practice ? she lost the property through her default.
The Court agrees with both points. The dual tracking allegations fail, and that is the unfair practice alleged for this Cause of Action. The Court also agrees that the loss of property was due to default on the loan and not due to failure to review a second application.
The demurrer is sustained without leave to amend.
The Fourth Cause of Action for Negligence fails for absence of duty:
?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.?
Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal. App. 4th 49, 67
The demurrer is sustained without leave to amend.
The Fifth Cause of Action is for Declaratory Relief. The Court first notes that no present controversy is stated. Declaratory Relief is prospective. Plaintiff alleges the dual tracking and seeks an order ?restoring Plaintiff?s title to the property.? Such a remedy is beyond the scope of declaratory relief. Plaintiff alleges a declaration is appropriate so she can ?determine her rights and duties to the property.? This is not a present controversy. Given that the other substantive claims arising from the allegation of dual tracking fails, the Court declines to exercise its declaratory powers.
CCP section 1061:
?The court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.?
The demurrer is sustained without leave to amend.
MOTION TO STRIKE
The motion is strike is placed off-calendar as moot.
ORDER
Defendant is ordered to lodge and serve a proposed judgment of dismissal.