Opinion
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of Los Angeles County No. NC037074, Roy L. Paul, Judge.
Jadranka C. Bach, in propria persona, for Defendant and Appellant.
Arlas & Smithton, Ronald M. Arlas, and Edward R. Buell for Plaintiff and Respondent.
WILLHITE, Acting P. J.
Defendant and cross-complainant Jadranka Bach appeals from a judgment ordering her to take certain actions to complete the rescission of a home equity loan she obtained from plaintiff and cross-defendant Greenpoint Mortgage Funding, Inc. (Greenpoint), and ordering that she take nothing on her cross-complaint for slander of title. We affirm the judgment
BACKGROUND
On April 12, 2004, Bach obtained a home equity line of credit from Greenpoint, signing a promissory note in the amount of $80,900. The note disclosed loan fees of $1,704, and was secured by a deed of trust that established a secondary lien on her home. When the funds were disbursed on April 22, 2004, $2,210.95 was applied to loan fees, as disclosed on the final settlement statement.
On November 1, 2004, Greenpoint wrote to Bach to inform her that it had discovered that $506.95 in loan fees were inadvertently omitted from the fee schedule on the note. Greenpoint told Bach that it would be mailing her a check refunding the undisclosed fees (in fact Greenpoint mailed the check that same day), and that she had the right to cancel or keep the loan. It enclosed two copies of a Notice of Right to Cancel, which stated: “If you cancel the transaction, the mortgage/lien/security interest is also cancelled. Within 20 CALENDAR DAYS after we receive your notice, we must take the steps necessary to reflect the fact that the mortgage/lien/security interest on/in your home has been cancelled, and we must return to you any money or property you have given to us or to anyone else in connection with this transaction. [¶] You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property.” The notice stated that she could cancel the loan by signing a copy of the notice and returning it to Greenpoint.
Bach exercised her right to cancel the note on November 4, 2004 by mailing an executed copy of the Notice of Right to Cancel to Greenpoint. On November 9, 2004, Greenpoint sent Bach a check in the amount of $2,298.05, to refund all of the interest Bach had paid on the loan. Five weeks later, David R. Vickers, Assistant General Counsel of Greenpoint, sent another letter to Bach enclosing a modified payoff statement for her loan, explaining that Greenpoint credited her account with all of the closing costs she paid. He also explained that Greenpoint had closed her account and would “start the process to remove the security instrument as soon as we receive the payoff amount listed in the enclosed statement.”
Bach and her husband, Maxim N. Bach, wrote back to Vickers on December 21, 2004. The Bachs noted that Greenpoint had violated the federal Truth in Lending Act (TILA) and was liable for statutory damages of twice the finance charge of the loan. They also noted that the security interest became void as soon as Bach cancelled the loan and, as stated in the Notice of Right to Cancel, Greenpoint was required to remove the mortgage lien within 20 days and Bach was not required to return the loan proceeds until it did so. Finally, the Bachs challenged Greenpoint’s calculation of the amount of loan fees she paid and threatened litigation to recover those fees and other damages, including damages for Bach’s emotional and mental distress.
Greenpoint submitted evidence that Maxim Bach, an attorney, was disciplined by the California Supreme Court shortly before the Bachs sent this letter. He later was disbarred.
Greenpoint’s outside counsel responded to the Bachs’ letter on January 11, 2005. He suggested a process to handle the rescission of Bach’s loan: Greenpoint would open escrow at a title company near Bach’s home, at Greenpoint’s expense, and deposit a reconveyance of the deed of trust, along with escrow instructions telling the title company to record the reconveyance upon receipt from Bach of $79,196, i.e., the modified loan payoff amount. The Bachs responded by letter on January 24, 2005. They did not address counsel’s proposal. Instead, they noted again that Greenpoint did not remove the security instrument within 20 days, as required by TILA, and said that Greenpoint (and counsel) would be held liable for the damages the Bachs had suffered.
On February 4, 2005, Greenpoint prepared a reconveyance of the deed of trust and placed it in an escrow account with First American Title Company, with the above described escrow instructions. Greenpoint’s counsel wrote to Bach, informing her of the escrow account and explaining the process for completing the rescission. Bach wrote back to counsel, asking why Greenpoint had not yet removed the security instrument and disputing whether all of the fees she paid were properly credited.
Greenpoint filed the instant action on June 8, 2005. The operative complaint alleges a single cause of action for rescission, asking for a judgment ordering Bach to pay $79,196 into the escrow account at First American Title and ordering Greenpoint to instruct First American Title to record the reconveyance only upon receipt of $79,196 from Bach. Bach filed a cross-complaint against Greenpoint, Vickers, and Greenpoint’s outside counsel. She subsequently filed an amended cross-complaint against only Greenpoint alleging three causes of action. The first cause of action seeks damages resulting from Greenpoint’s TILA violations, including statutory damages and damages for slander of title. The second cause of action alleges that Bach is entitled to punitive damages for Greenpoint’s “intentional, deliberate, malicious and/or oppressive refusal to [remove] the security interest from [Bach’s] real property.” The third cause of action appears to allege a negligent infliction of emotional distress claim.
The matter was tried before the court on stipulated facts. The court found in favor of Greenpoint on its complaint, found against Bach on her cross-complaint, and ordered each side to bear their own costs. Bach timely appealed from the resulting judgment.
DISCUSSION
Bach raises seven arguments in her opening brief on appeal and an additional argument in her reply brief. Many are forfeited, either because Bach’s counsel stipulated to certain actions in the trial court, or did not raise them in the trial court, or because Bach does not support her argument on appeal with citation to authority. To the extent the arguments have not been forfeited, they are without merit. We begin, however, with an argument made by Greenpoint in its respondent’s brief.
A. Bach did not Waive her Right to Appeal
Greenpoint contends Bach waived her right to appeal by depositing the full amount of the unpaid loan proceeds into the escrow account after judgment was entered, thereby causing the reconveyance to be recorded, removing the security instrument that encumbered Bach’s property. Greenpoint argues that “a party who voluntarily complies with or satisfies the judgment impliedly waives the right to appeal.” (Citing Ryan v. California Interscholastic Federation (2001) 94 Cal.App.4th 1033, 1040, italics omitted.) But Bach’s compliance was hardly voluntary. The judgment ordered her to deposit the unpaid balance on the note, and if she failed to do so, Greenpoint would be entitled to immediately commence foreclosure proceedings. It is well settled that a waiver of the right to appeal is implied “‘only if the satisfaction or compliance is by way of compromise, or is coupled with an agreement not to appeal. Where it is compelled or coerced, e.g., by the threat of forfeiture or seizure of property under execution, there is no waiver.’” (Selby Constructors v. McCarthy (1979) 91 Cal.App.3d 517, 521.) Because there is no evidence that Bach’s compliance was by way of compromise or was coupled with an agreement not to appeal, she did not waive her right to appeal.
Greenpoint asks us to take judicial notice of the recorded reconveyance and a deed of trust securing a new loan that Bach obtained from a different lender after judgment was entered. We grant Greenpoint’s request.
We deny Greenpoint’s motion for sanctions, which was based primarily upon its argument that Bach waived her right to appeal by depositing the amount of the loan proceeds into the escrow account.
B. Bach was not Denied her Right to Jury Trial
Bach contends she requested a jury trial in her case management statement and did not subsequently waive her right to a jury trial, but that the matter was set for a court trial over her objection. She is incorrect.
At the case management conference held on February 16, 2006, the trial court asked both parties’ counsel for their trial estimates. Greenpoint’s counsel responded, “Really no more than a day, day-and-a-half max. This is a nonjury trial, technical remedy.” Bach’s counsel then said, “I agree as well.” At a later hearing, on May 18, 2006, in response to the court’s indication that the case was set for a court trial, Bach’s counsel questioned whether Bach had waived her right to a jury trial. The court offered to let counsel review the file and transcripts to verify that she had indeed waived. At the start of the trial the following month, the court again addressed the jury trial issue. It read from the February 16, 2006 transcript, showing that Bach’s counsel agreed to a nonjury trial. The court also noted that Bach waived a jury trial by failing to deposit the jury fees with the clerk. It then asked Bach’s counsel if he agreed that this was a nonjury trial, and counsel agreed.
In light of this record, Bach’s contention that she was denied her right to a jury trial has no merit.
C. Bach’s Argument that the Trial Court Erred by Finding Good Faith by Greenpoint has no Merit
Bach’s second argument on appeal is difficult to decipher. The heading for the argument states, “The Trial Court Grievously Erred In Finding Good Faith By [Greenpoint] In Its Actions of Failing to Comply With Truth In Lending Act (TILA).” She appears to argue that Greenpoint was required to show that its violations of TILA were the result of bona fide error as set forth in 15 United States Code section 1640(c) in order to prevail on its complaint, and that Greenpoint failed to do so. She also argues that Greenpoint was not entitled to judgment in its favor because it had unclean hands, and that because of those unclean hands, Bach should have been allowed to keep the loan proceeds and should have been awarded statutory penalties and damages under TILA. Bach is incorrect.
We note that the last argument in Bach’s opening brief seems to repeat many of her contentions in this argument.
TILA and the regulations that implement it provide that certain disclosures must be made in connection with, among other things, loans secured by the borrower’s home. The borrower has a right to rescind the transaction if the disclosures are not made, and the statutes and regulations set forth the procedure to be followed if the borrower elects to rescind. (See, e.g., 15 U.S.C. § 1635; 12 C.F.R. § 226.15.) The borrower rescinds the transaction by sending written notice to the creditor. (15 U.S.C. § 1635(a); 12 C.F.R. § 226.15(a)(2).) Upon exercising her right to rescind, any security interest given by the borrower becomes void. (15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(1).) Within 20 calendar days after receipt of the notice exercising the right to rescind, the creditor must return any money given as earnest money, down payment, interest, or finance charge, and must take any action necessary to reflect the termination of any security interest created under the transaction. (15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(2).) The borrower is allowed to retain any money or property given to her by the creditor until the creditor has met its obligations under the statute and regulations. (15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(3).) Once the creditor has performed all its obligations, the borrower must tender the money or property to the creditor. (15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(3).) This procedure governing rescission, however, may be modified by court order. (15 U.S.C. § 1635(b); 12 C.F.R. § 226.15(d)(4).)
In addition to granting the borrower the right to rescind the transaction under the procedure outlined above, TILA also grants the borrower the right to seek additional relief for violations of TILA, under 15 United States Code section 1640 (hereafter section 1640). (15 U.S.C. §§ 1635(g), 1640.) Section 1640 provides that a creditor who fails to comply with any requirement imposed by TILA is liable to the borrower for the borrower’s actual damages, statutory damages, and, in the case of any successful action to enforce the foregoing liability or in any action in which the borrower is determined to have the right of rescission, the costs of the action and reasonable attorney fees. (15 U.S.C. § 1640(a).) Section 1640 also provides that a creditor may not be held liable (1) if it discovers a disclosure error and notifies the borrower of the error within 60 days and makes whatever adjustments are necessary to assure that the borrower will not be required to pay an amount in excess of the amount that was disclosed (15 U.S.C. § 1640(b)); or (2) shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error (15 U.S.C. § 1640(c)).
As is clear from the above, Bach’s argument that Greenpoint was required to show that its violations of TILA were the result of bona fide error in order to prevail on its complaint for rescission is based upon a misreading of section 1640(c). That section applies only to an action by a borrower seeking to hold a creditor liable for violations of TILA. Thus, section 1640 is irrelevant to Greenpoint’s complaint.
The trial court’s finding that Greenpoint acted in good faith is, however, relevant to Bach’s unclean hands defense and to the court’s denial of statutory penalties and damages under TILA for Bach’s cross-complaint.
Whether the unclean hands doctrine applies is a question of fact. (Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76 Cal.App.4th 970, 978.) In determining whether to exercise its equitable powers to grant rescission, the court examined Greenpoint’s conduct. The court found that the initial violation of TILA was a trivial error, i.e., failing to disclose on the promissory note four fees that previously had been disclosed. It also noted that Greenpoint discovered the error, immediately notified Bach of the error and her right to rescind under TILA, and immediately sent her a refund of the undisclosed fees. Once Bach exercised her right to rescind, Greenpoint immediately returned to Bach all interest and credited her account for the disclosed closing costs she had paid. Although the court noted that Greenpoint did not immediately remove the security interest, it also noted that Greenpoint set up an escrow account to complete the rescission process and made no attempt to enforce the security interest in the interim. Based upon these findings, which were supported by the stipulated facts and the supporting documents admitted into evidence, the court concluded that Greenpoint acted in good faith. And by finding that Greenpoint acted in good faith, the court necessarily found that the unclean hands doctrine did not apply.
The court’s finding of good faith -- particularly its findings that the fees that were not listed on the promissory note were previously disclosed and that Greenpoint immediately notified Bach of the error and returned the unlisted fees -- also precludes any award of statutory penalties or damages under TILA for Greenpoint’s initial disclosure error, because TILA expressly exempts creditors from liability under those circumstances. (See 15 U.S.C. § 1640(c) [a creditor may not be held liable for an unintentional violation that resulted from a bona fide error]; 15 U.S.C. § 1640(b) [a creditor has no liability if it notifies borrower and makes necessary adjustments to borrower’s account].)
Although those express exemptions do not apply to Bach’s contention that she is entitled to statutory penalties and damages for Greenpoint’s failure to comply with TILA’s requirement that the creditor remove any security interest within 20 days after it receives notice of the borrower’s intent to rescind, the trial court’s finding of good faith nonetheless supports the court’s denial of those penalties or damages. As one court has explained, although the statute and regulation require that the creditor “take any action necessary or appropriate to reflect the termination of any security interest created under the transaction” (15 U.S.C. § 1635(b); see also 12 C.F.R. § 226.15(d)(2)), the creditor is not required to complete the process of terminating the security interest within 20 days; it must, however, see the process through to completion. (Velazquez v. HomeAmerican Credit, Inc. (N.D.Ill. 2003) 254 F.Supp.2d 1043, 1046.) In this case, the trial court found, supported by the evidence, that Greenpoint began the process by attempting to negotiate a procedure for completing the rescission and, when Bach refused to negotiate, Greenpoint brought the instant action to complete the rescission. The court also found that Greenpoint had good reason to require a modified procedure in light of Maxim Bach’s history, as discussed in section G., post. Although Bach is correct that under TILA she was under no obligation to tender the loan proceeds before Greenpoint removed the security interest, TILA permitted Greenpoint to seek a court order modifying the procedure imposed by TILA at any time during the rescission process. (Williams v. Homestake Mortg. Co. (11th Cir. 1992) 968 F.2d 1137, 1142 (“Congress, through its legislative history, has made it quite clear that ‘the courts, at any time during the rescission process, may impose equitable conditions to insure that the consumer meets his obligations after the creditor has performed his obligations as required by the act’”].) Greenpoint did so by bringing the instant action, and the trial court found that the balance of equities weighed in Greenpoint’s favor and granted Greenpoint its requested relief.
D. Bach Failed to Submit Evidence of any Damages on her Cross-Complaint
Bach contends that she was entitled to damages for emotional and mental distress caused by Greenpoint’s slander of title. Her contention fails, however, because she presented no evidence of damages at trial. The only evidence presented at trial was the Stipulation Of Undisputed Facts And Evidence and a document related to Maxim Bach’s disciplinary proceeding. Those documents did not include any evidence of damages. The only reference to Bach’s purported damages was made by Bach’s attorney during argument, when he stated that Bach testified at deposition that she had been unable to refinance her home because of Greenpoint’s security interest. Counsel’s statement was argument, not evidence. Therefore, the trial court correctly found that Bach failed to establish she suffered damages from Greenpoint’s delay in removing the security interest on her home.
Bach asserts in her opening brief that the trial court found liability on her slander of title claim. She is incorrect. In fact, the court found that Bach “failed to make out a prima facie case” of slander of title because she failed to establish that she had been damaged in any fashion.
E. Bach Forfeited her Contention that the Trial Court Erred in Striking her Punitive Damages Claim
The trial court, on its own motion, struck Bach’s punitive damages claim alleged in her amended cross-complaint. In her brief on appeal, Bach asserts the trial court erred because Greenpoint’s refusal to remove the security interest within 20 days was intentional. She provides no legal analysis and cites to no legal authority. As such, she has forfeited her contention. (Tilbury Constructors, Inc. v. State Comp. Ins. Fund (2006) 137 Cal.App.4th 466, 482.)
F. Bach Forfeited her Contention that she is Entitled to Amend her Cross-Complaint
Bach contends she should be allowed to amend her cross-complaint to allege a cause of action for unfair business practices. She forfeited that contention by failing to request leave to amend in the trial court. (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091.)
G. Bach’s Counsel Stipulated to the Admission of Maxim Bach’s Disciplinary Proceeding
At the start of trial, Greenpoint’s counsel informed the court that there was an additional item of evidence that the parties stipulated to that was not included in the Stipulation Of Undisputed Facts And Evidence. The court asked, “So it’s stipulated that the Supreme Court decision of the discipline against Maxim Bach be admitted as Plaintiff’s No. 1?” Bach’s counsel responded, “Correct.” Later, when Greenpoint’s counsel began to discuss the disciplinary proceedings, Bach’s counsel objected on the grounds of relevance. The court overruled the objection. Bach repeats her objection on appeal.
By stipulating to the admission of the Supreme Court decision, Bach waived this issue on appeal. (Sperber v. Robinson (1994) 26 Cal.App.4th 736, 742-743.) In any event, Greenpoint explained the relevancy of the disciplinary proceedings: the Supreme Court decision showed that Maxim Bach had a history of initiating bankruptcy proceedings to prevent former clients from recovering money he owed them, and Greenpoint was concerned that he would assist his wife in initiating bankruptcy proceedings once the security interest was removed to prevent Greenpoint from recovering the loan proceeds from her.
H. Bach Forfeited her Contention that the Judgment was Improperly Signed by a Judge Other than the Trial Judge
In her reply brief, Bach contends the judgment is void because it was signed by a judge other than the judge who presided over the trial. By raising this issue for the first time in her reply brief, she has forfeited it. (Heiner v. Kmart Corp. (2000) 84 Cal.App.4th 335, 351.) In any event, we note that Code of Civil Procedure section 635 allows a judge other than the judge who presided over the trial to sign a judgment that conforms to the minutes when the trial judge is unavailable, and the judgment in this case conforms to the minutes from the trial.
DISPOSITION
The judgment is affirmed. Greenpoint shall recover its costs on appeal.
We concur: MANELLA, J., SUZUKAWA, J.