Opinion
A148073
12-20-2017
SABA ALI, Plaintiff and Appellant, v. NATIONSTAR, 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Contra Costa County Super. Ct. No. MSC1500102)
Saba Ali appeals from a judgment entered after the court sustained a demurrer to her first amended complaint without leave to amend. Ali contends (1) she alleged facts establishing causes of action under the California Homeowner Bill of Rights (e.g., Civ. Code, § 2923.5); (2) the court erred in requiring her to allege a tender of the outstanding amount due under her loan; (3) she has standing to challenge the court's ruling on her cause of action under the Unfair Competition Law (Bus. & Prof. Code, § 17200); (4) the court abused its discretion in denying her leave to amend her claims for quiet title, promissory estoppel, negligence, and violation of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.); and (5) respondent failed to timely file and serve the judgment of dismissal and notice of entry of judgment, the court should not have entered judgment while her motion for reconsideration was pending, and her due process rights were infringed. We will affirm the judgment.
I. FACTS AND PROCEDURAL HISTORY
In essence, Ali contends that respondent proceeded with a foreclosure and sale of her residence while her application for a second modification of her mortgage was pending. More specifically, the following facts have been asserted based on the allegations of the operable first amended complaint and the material subject to respondent's request for judicial notice. (See Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1052 (Intengan).)
A. Loan
In May 2007, Ali and her husband, Tariq Mojaddidi (attorney for Ali in this appeal), borrowed $796,000 from American Brokers Conduit, signing a promissory note and a deed of trust on property located in San Ramon, California. The loan bore an adjustable interest rate with an initial five-year negative amortization period expiring on June 1, 2012.
B. Ali's First Default and Loan Modification
Ali and Mojaddidi defaulted on the loan before the negative amortization period expired, and they were more than $15,000 in arrears by mid-2011. A notice of default was recorded in July 2011; a notice of trustee's sale was recorded in November 2011.
Ali and Mojaddidi avoided the foreclosure by obtaining a loan modification. The notice of default was rescinded in December 2011, and a loan modification agreement was recorded in March 2012.
The modified loan was more favorable to Ali and Mojaddidi than their 2007 loan. Although their principal balance had risen to $979,320.68, nearly $400,000 of that principal was deferred for 30 years and bore no interest during the deferral period. The loan modification required a monthly payment of $2,180.48 for the first five years at a fixed rate of 3 percent, and a monthly payment of $2,508.67 for the remainder of the 30-year term at a fixed rate of 4 percent. A balloon payment was due at the end of the 30-year period.
C. Ali's Second Default and Application for Another Modification
Ali and Mojaddidi defaulted almost immediately after agreeing to make the payments under the modified loan. As Ali concedes, during 2012 - the year the modification was recorded - they were making payments only sporadically. By this point, respondent Nationstar Mortgage LLC (Nationstar) had become the servicer of the modified loan.
Ali and Mojaddidi submitted documents to Nationstar to apply for another loan modification. In "late 2013," Ali "provided a complete package to Nationstar for commencing the loan modification process, including a 45 page File full of forms and letters." She also engaged in a "two hour phone conversation which discussed a full financial profile." In February 2014, however, this application was "cancelled."
In March 2014, Ali and Mojaddidi were told to submit a new modification "packet." They "then completed a second packet," but Nationstar did not communicate its denial or acceptance. In October 2014, Ali inquired of the status of the modification application and was told to submit a "new packet."
In October 2014, Ali alleges, she "fully completed a third application packet and continued communication through email with Polly Schumacher from Defendants['] customer service department." In December 2014, Ali "complied with all the requests from [Nationstar] and received communication that the loan packet was received, and [Ali] understood the review process was finally taking place."
Meanwhile, Ali and Mojaddidi had fallen further behind on the modified loan. A notice of default was recorded in July 2014, indicating they were $96,871.01 in arrears.
On December 1, 2014, a new notice of trustee's sale was recorded. By this time, the beneficial interest in the deed of trust was assigned to U.S. Bank National Association, as Trustee for Lehman XS Trust Mortgage Pass-through Certificates, Series 2007-15N (U.S. Bank).
On December 24, 2014, Nationstar sent Ali and Mojaddidi a letter (the Past Due Letter) listing their recent account history and stating they were $114,756.28 in arrears. A box at the top of the Past Due Letter stated, "Your loan is currently in the Foreclosure process," and "Your loan is currently 1056 days past due." The body of the Past Due Letter stated that "Failure to bring your loan current may result in fees, possibly even foreclosure and the loss of your home." The letter included the generic language, "If you've already reached out for help, don't worry, that process is still proceeding and no further action is required," but it did not refer to any specific application submitted by Ali or Mojaddidi.
D. Foreclosure Sale
Ali and Mojaddidi did not cure their default. On December 29, 2014, U.S. Bank purchased the property at the trustee's sale for $855,568.40. Respondent's brief represents that Ali and Mojaddidi have continued to live in the property without U.S. Bank's permission.
E. Ali's Ensuing Litigation
In January 2015, Ali filed a complaint against Nationstar and others. In February 2015, she filed a first amended complaint, which listed 12 causes of action: six claims under the Homeowner Bill of Rights (Civ. Code, § 2923.5, et seq.; HBOR), as well as claims for violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200), violation of the Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.), and negligence, quiet title, promissory estoppel, and declaratory relief.
Nationstar and U.S. Bank filed a demurrer to the first amended complaint. Ali opposed the demurrer. Around the same time, Mojaddidi substituted in as counsel for Ali.
The demurrer to Ali's first amended complaint was initially set for hearing in May 2015, but by several postponements the hearing was not completed until November 13, 2015. Adopting its tentative ruling, the court sustained the demurrer without leave to amend.
On December 1, 2015, Ali filed a motion for reconsideration, seeking "a new order overruling defendants' demurrer or at least a new order sustaining WITH leave to amend." Nationstar opposed the motion.
On December 15, 2015, the court signed a written order sustaining the demurrer to the first amended complaint without leave to amend and the judgment. The order and judgment were entered on December 21, 2015.
Ali's motion for reconsideration came on for hearing on February 26, 2016, but the court ordered additional briefing on the issue of the service of the judgment. On February 29, 2016, Nationstar and U.S. Bank served and filed notices of entry of the order and judgment.
On March 1, 2016, Ali filed a motion seeking to vacate the judgment. The hearing on Ali's motion for reconsideration was continued to the date of the hearing on Ali's motion to vacate the judgment.
On April 11, 2016, before Ali's motion to vacate the judgment and motion for reconsideration were heard, Ali filed a notice of appeal. Due to Ali's notice of appeal, the trial court "dropped" Ali's motions without issuing a substantive ruling, because the court no longer had jurisdiction.
II. DISCUSSION
"In our de novo review of an order sustaining a demurrer, we assume the truth of all facts properly pleaded in the complaint or reasonably inferred from the pleading, but not mere contentions, deductions, or conclusions of law. [Citation.] We then determine if those facts are sufficient, as a matter of law, to state a cause of action under any legal theory." (Intengan, supra, 214 Cal.App.4th at p. 1052.) "In making this determination, we also consider facts of which the trial court properly took judicial notice," and a "demurrer may be sustained where judicially noticeable facts render the pleading defective." (Ibid.)
To prevail on appeal, the appellant must show that the pleaded facts are sufficient to establish every element of a cause of action and overcome all legal grounds on which the trial court sustained the demurrer; we will therefore affirm the ruling if there is any ground on which the demurrer could have been properly sustained. (Intengan, supra, 214 Cal.App.4th at p. 1052.)
A. HBOR Claims
Ali's first amended complaint purported to allege causes of action under six sections of the HBOR, and the trial court sustained Nationstar's demurrer as to all six. Ali's opening brief does not address four of those claims (those brought under Civil Code sections 2923.7, 2924, 2924.17, and 2924.11). She therefore waives any error in regard to them. (Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1282; Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1504 [appellants waived their challenge to an order sustaining a demurrer because they did not provide a reasoned argument to support the challenge].) Although Ali requests in her appellate reply brief that we nonetheless exercise our discretion to consider the allegations relating to these claims, she fails to provide any specific or satisfactory explanation why the allegations contain facts sufficient to state a cause of action under the code sections.
Except where otherwise indicated, all statutory references are to the Civil Code.
We therefore turn to the arguments Ali made in her opening brief with respect to her HBOR claims under section 2923.5 and section 2923.6.
Ali's first purported cause of action alleges that defendants, including Nationstar, violated section 2923.5. Section 2923.5 provides that - at least 30 days before a notice of default is recorded - a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent must either contact the borrower "in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure" or else satisfy specified due diligence requirements. (§ 2923.5, subd. (a)(2) & (e).) The statute "does not actually require that a lender modify a defaulting borrower's loan," but merely "contemplates contact and some analysis of the borrower's financial situation." (Davenport v. Litton Loan Servicing (N.D. Cal. 2010) 725 F.Supp.2d 862, 877; see Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 214 (Mabry).)
Ali alleged that Nationstar violated section 2923.5 because it "never in good faith explored options to avoid foreclosure to assess Plaintiff's financial condition," "never visited Plaintiff to assist her financial condition," "never called Plaintiff in order to explore options to foreclosure," "never in good faith attempted to contact Plaintiff by sending a First Class letter that included a toll free telephone number made available by HUD," and "never attempted to contact Plaintiff by telephone at least 3 times at different hours on different days."
Respondents contend, however, that other allegations in the first amended complaint show that defendants did comply with their obligations under section 2923.5. Ali's pleading alleges that, in late 2013, she called regarding a loan modification and she and Nationstar participated in a "two hour phone conversation which discussed a full financial profile." The parties debate the significance of this allegation. (See generally Mabry, supra, 185 Cal.App.4th at p. 232 [obligation under § 2923.5 is satisfied by asking the borrower "why can't you make your payments?" and "telling the borrower the traditional ways that foreclosure can be avoided (e.g., deeds 'in lieu,' workouts, or short sales)"].)
Whether or not Ali's allegations state a violation of section 2923.5, she cannot obtain relief under that statute as a matter of law for another reason. As the trial court recognized, "[t]he only remedy for noncompliance with [section 2923.5] is the postponement of the foreclosure sale." (Skov v. U.S. Bank National Assn. (2012) 207 Cal.App.4th 690, 696; see Mabry, supra, 185 Cal.App.4th at p. 214.) Once the foreclosure sale has been held, a borrower cannot obtain relief. (Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526.) Here, the foreclosure sale had occurred by the time Ali filed her complaint, so she was not entitled to relief under section 2923.5. The court did not err in sustaining the demurrer.
Ali's second purported cause of action asserted that defendants violated section 2923.6, subdivision (c) by "dual-tracking" Ali - essentially, processing the loan modification and pursuing foreclosure at the same time.
Section 2923.6, subdivision (c) provides in relevant part: "If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower's mortgage servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale, or conduct a trustee's sale, while the complete first lien loan modification application is pending." (Italics added.)
Ali's claim faced two pleading hurdles. First, Ali had to allege a "complete" application for a loan modification - as defined in the statute - that was pending when the notice of default or notice of sale was recorded, or when the trustee's sale was conducted. Second, since Ali had obtained a loan modification before, she also had to allege facts from which it could be inferred that her new application documented a material change in her financial circumstances. (§ 2923.6, subd. (g).)
a. Requirement of Complete Application
"[W]hether a loan modification application is 'complete' is a legal determination that must be made by considering the mandates of section 2923.6(h)." (Woodring v. Ocwen Loan Servicing, LLC et al. (C.D. Cal. July 18, 2014, No. CV 14-03416 BRO (Ex)), 2014 WL 3558716, at *7 (Woodring).) Section 2923.6, subdivision (h) provides: "For purposes of this section, an application shall be deemed 'complete' when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer." (Italics added.)
A conclusory allegation of having submitted a "complete" application has been held insufficient. The borrower must also allege, consistent with the statute, that all documents requested by the defendant were provided within the defendant's reasonable timeframes, along with factual support such as the date of the application, the documents submitted, and when they were submitted. (See Villacis v. Ocwen Loan Servicing, LLC, et al. (N.D. Cal. May 12, 2015 No. 14-CV-03279-JD) 2015 WL 2227913, at *2; Garcia v. PNC Mortgage, (N.D. Cal. Feb. 9, 2015) No. C 14-3543 PJH, 2015 WL 534395, at *7; Stokes v. CitiMortgage, Inc. (C.D. Cal. Sept. 3, 2014) No. CV 14-00278 BRO (SHx), 2014 WL 4359193, at *7; Woodring, supra, 2014 WL 3558716, at *7.)
As shown next, Ali did not allege facts showing she submitted a "complete" loan modification application that was pending when the notice of default was recorded, when the notice of trustee's sale was recorded, or when the foreclosure sale was held.
(i) When Notice of Default Was Recorded (July 2014)
The first amended complaint alleges that Ali submitted a loan modification application in "late 2013," but that Nationstar "cancelled" that application in February 2014. Ali's conclusory allegation that this application was "complete" is insufficient. In any event, since the "late 2013" application was cancelled in February 2014, it was not pending when the notice of default was recorded in July 2014.
The first amended complaint also alleges that Ali "completed a second [loan modification] packet" in March 2014. However, Ali does not allege that she submitted this packet to Nationstar in March 2014, stating instead that Nationstar "did not communicate any correspondence or denial or acceptance of the packet." Moreover, Ali did not allege that she "supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer." (§ 2923.6, subd. (h).) Ali therefore failed to allege a "complete" loan modification application submitted and pending when the notice of default was recorded in July 2014.
The date alleged in the first amended complaint is "March 2013," but other allegations indicate that March 2014 was intended. The "March 2013" reference appears in a chronological recitation of events and falls between an event in late 2013 and an event in October 2014. Also, the first amended complaint alleges that the March application was Ali's "second," which suggests it followed her application in "late 2013."
(ii) When Notice of Sale Was Recorded (December 1, 2014)
According to the first amended complaint, Ali "completed" a third application packet in October 2014, communicated with Nationstar about it, and "[i]n December 2014" allegedly "complied with all the requests from [Nationstar] and received communication that the loan packet was received." Ali then "understood the review process was finally taking place."
The first amended complaint does not show that the application was complete for statutory purposes by the time the notice of trustee's sale was recorded on December 1, 2014, but only that Ali complied with Nationstar's requests by an unspecified date at some point during the month. Ali did not allege a complete loan application was pending when the notice of trustee's sale was recorded.
(iii) When Trustee's Sale Was Held (December 29, 2014)
Although Ali alleges that at some point in December 2014 she "complied with all the requests from" Nationstar and "received communication that the loan packet was received," she does not allege that she complied with those requests "within the reasonable timeframes specified by the mortgage servicer." (§ 2923.6, subd. (h). Nor does she allege specific dates on which she submitted any supplemental materials or that she was told the application was complete. In the absence of any of these allegations, Ali failed to allege facts sufficient to show that a "complete" loan modification was pending at the time of the trustee's sale on December 29, 2014.
In her reply brief, Ali refers us to Clinton v. Select Portfolio Servicing, Inc. (E.D. Cal. 2016) 225 F. Supp. 3d 1168 (Clinton). Clinton ruled that a borrower stated a section 2923.6 claim based on the allegation that he submitted a "complete application," whether or not the defendant's records said the application was complete as of the date of its initial submission. Clinton is inapposite, because it did not consider the issue presented here: whether a complete application was alleged under California pleading principles even without an allegation that the borrower complied with requests "within the reasonable timeframes specified by the mortgage servicer" (§ 2923.6, subd. (h)) or facts to that effect. Moreover, Clinton is distinguishable. There, the borrower alleged that he repeatedly responded to requests for updated materials and requested acknowledgement of the completeness of his application, without response. And both parties in Clinton agreed that the borrower's application was complete as of the day the notice of trustee's sale was recorded. (Id. at p. 1176, fn. 4.)
Ali attacks Nationstar for failing to cite Clinton and Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150 (Daniels) in its respondent's brief. However, Daniels and Clinton were both issued in 2016, and Ali does not explain why she did not cite those cases in her opening brief filed in January 2017. We address Daniels, and another aspect of Clinton, in our discussion of Ali's negligence claim, post.
Because Ali did not allege facts showing a completed application was pending when the notice of default or notice of sale were recorded, or when the trustee's sale was held, she fails to allege a violation of section 2923.6.
b. Requirement of Material Change to Financial Condition
"[T]o 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, . . . 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." (§ 2923.6, subd. (g).)
Here, Ali was evaluated for a loan modification before January 2013, since she was granted a loan modification in March 2012. To state a cause of action under section 2923.6, therefore, she had to allege a material change in her financial circumstances and the submission of her documentation of that change to Nationstar.
To allege a material change in financial circumstances for purposes of section 2923.6, subdivision (g), Ali had to allege specific facts, not just a barebones assertion. (E.g., Gilmore v. Wells Fargo Bank N.A. (N.D. Cal. 2014) 75 F.Supp. 3d 1255, 1264-1265; Ivey v. JP Morgan Chase Bank, N.A. (N.D. Cal. Aug. 29, 2016) No. 16-CV-00610-HSG, 2016 WL 4502587 at *4.) The first amended complaint contained only the following allegation regarding material change: "By October of 2014, Plaintiff experienced a material change in financial circumstances since their [sic] previous application for a loan modification in Jan 2014." This conclusory, barebones allegation is inadequate. It does not state what the change was or why it was material to considering Ali for a new loan modification. It refers not to a change in financial circumstances since her application in 2011 or before January 2013, as required by the statute, but to a purported change since January 2014. In fact, the allegation does not even appear in Ali's claim for violation of section 2923.6, but in her claim for violation of section 2924.
Furthermore, the first amended complaint does not allege that Ali documented any change in her financial circumstances since her pre-2013 application or submitted this documentation to Nationstar. For these reasons as well, her allegations are inadequate to state a cause of action under section 2923.6. (§ 2923.6, subd. (g).)
As Ali notes in her opening brief, Nationstar's counsel agreed at the demurrer hearing that Ali had alleged a material change in her financial circumstances. Nationstar's counsel did not, however, agree that this conclusory allegation was sufficient. To the contrary, Nationstar's counsel pointed out to the court that Ali's pleading did not contain factual allegations supporting the assertion of a material change, or allegations supporting the assertion that Ali had submitted an application that was complete within the meaning of the statute.
c. Materials Later Submitted in Ali's Reconsideration Motion
In her reply brief, Ali points us to certain documents in the record and argues that her application included a signed and completed uniform borrower assistance form, banking statements, a government monitoring data form, a Dodd-Frank certification, tax returns, and other documents, which were attached to Ali's email to Nationstar on September 3, 2014. She further argues that her September 2014 submission (sent by email) was the same as the alleged October 2014 application (sent by mail). Although these documents include emails forwarding some material in September 2014, at least some of the documents to which Ali refers indicate they were prepared in November 2014. But essentially, Ali is asserting that she provided all of the documentation to Nationstar and that her application was therefore complete by the time the notice of sale was recorded and the sale was conducted in December 2014. (Nationstar counters that these documents show that Ali did not submit all the requested documents within the timeframes Nationstar had reasonably set.)
Also in her reply brief, with respect to a material change in her financial circumstances, Ali refers us to the foregoing documents as well as a letter dated August 2, 2014, entitled "Nationstar Hardship Letter." In this letter, Ali and Mojaddidi asserted that they could not pay the "3400" monthly mortgage due to a reduction in their income as a result of unemployment, and that their "income ranges between 3-4K a month." The letter is written "To Whom It May Concern" and does not show Nationstar's address. Nor does it indicate whether or when it was sent.
The documentation to which Ali refers is unavailing. It was not included in the allegations of the first amended complaint, but submitted in connection with her motion for reconsideration of the demurrer ruling. It therefore fails to show that the court erred in sustaining the demurrer to the first amended complaint.
Nor does the documentation lead us to conclude the court abused its discretion in denying leave to amend, since Ali fails to explain how the documents demonstrate her completion of the application by December 2014 and timely submission to Nationstar of documentation indicating a material change in her financial circumstances. She also does not explain how the material would constitute "new or different facts, circumstances, or law" required for a motion for reconsideration. (Code Civ. Proc., § 1008.)
B. Tender
Ali next contends the trial court erred because it is unnecessary for a borrower to plead a willingness and ability to tender the full indebtedness of the loan in order to state a claim under section 2923.6. However, it does not appear that the lack of a tender allegation was a basis for the trial court's ruling on Ali's section 2923.6 claim. And whether or not it was, the demurrer was nonetheless properly sustained to the section 2923.6 claim for the reasons we have stated ante.
C. UCL Claim
Ali's sixth purported cause of action alleged that defendants violated the UCL by committing "wrongful, unlawful and illegal conduct" in their "violations of the [HBOR] alleged herein."
The trial court sustained the demurrer as to the UCL claim for failure to plead standing under the UCL, namely economic injury caused by the unfair business practice. (See Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.) Nationstar contends that it was Ali's nonpayment of the mortgage, not any HBOR violation, that caused the foreclosure sale. Furthermore, Nationstar argues, there was no HBOR violation, so there is nothing on which to base the UCL claim. (Citing In re Vaccine Cases (2005) 134 Cal.App.4th 438, 459.)
In her opening brief, Ali does not set forth any facts showing standing under the UCL. She argues that she has standing to appeal from the dismissal of the UCL claim, but that is an entirely different question. She fails to establish error in the trial court's dismissal of the UCL claim.
In her reply brief, Ali contends that the facts alleged in the first amended complaint establish standing for the UCL claim. Points raised for the first time in an appellant's reply brief will not be considered without a showing of good cause, because the respondent has not been given a chance to respond. (REO Broadcasting Consultants v. Martin (1999) 69 Cal.App.4th 489, 500 (REO Broadcasting).) In any event, since Ali has not demonstrated error in the trial court's sustaining of the demurrer to her HBOR claims, she fails to demonstrate any predicate wrongdoing on which the UCL claim could be based.
D. Denial of Leave to Amend
Ali contends the trial court should have granted leave to amend her claims for quiet title, promissory estoppel, negligence, and violation of the Rosenthal Fair Debt Collection Practices Act (RFDCPA). She fails to show a reasonable possibility that the defects in her allegations can be cured by amendment. (Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 992.)
1. Quiet Title
The trial court ruled that the first amended complaint did not allege a quiet title claim for a number of reasons, including that quiet title "do[es] not apply after a foreclosure sale has been completed without a tender of the amounts owing." Ali does not contend she could amend to allege a tender. Instead, she contends amendment should have been allowed under the theory of promissory estoppel. Because she has not properly stated a promissory estoppel claim (see post), she fails to show that the court should have allowed leave to amend her quiet title claim. Furthermore, Ali states no basis for the remedy of quiet title, since the HBOR only provides post-foreclosure relief in the form of damages. (§ 2924.12, subd. (b).)
2. Promissory Estoppel
The trial court sustained the demurrer to Ali's promissory estoppel claim because the first amended complaint failed to "allege [] a promise clear and unambiguous in its terms." (See Thomson v. International Alliance of Theatrical Stage Employees & Moving Picture Machine Operators (1965) 232 Cal.App.2d 446, 454; Daniels, supra, 246 Cal.App.4th at p. 1178.)
Ali does not state any facts that she could allege in good faith to indicate a clear and unambiguous promise by Nationstar. Instead, she tells us that "an opportunity to amend the FAC would undoubtedly cure any pleading defect with this cause of action." This conclusory statement is patently insufficient. (Cf. Aceves v. U.S. Bank National Association (2011) 192 Cal.App.4th 218, 223 [allegations sufficient where borrower alleged a specific promise and detrimental reliance].)
3. Negligence
The trial court sustained defendants' demurrer to Ali's negligence claim because Ali had not alleged facts establishing either that defendants owed her a duty of care or that the defendants had breached any duty they owed.
In her opening brief, Ali urges that she alleged a duty of care during the loan modification process based on Alvarez v. BAC Home Loans Servicing, LP (2014) 228 Cal.App.4th 941, 948, which she says the court should have relied on rather than Lueras v. BAC Home Loans Servicing LP (2013) 221 Cal.App.4th 49, 68. Whether or not she is correct on this point, however, she does not explain how her allegations indicate a breach of that duty, or that she could allege any additional facts to establish that breach. She fails to demonstrate error in denying leave to amend.
In her reply brief, Ali refers us to Daniels, supra, 246 Cal.App.4th 1150 and Clinton, supra, 2016 225 F.Supp.3d 1168. Daniels held that a loan servicer may owe a duty of care to a borrower under the factors set forth in Biakanja v. Irving (1958) 49 Cal.2d 647, 650 (Biakanja), and that the loan servicer in the facts of that case had a duty. (Daniels, supra, 246 Cal.App.4th at p. 1183.) Clinton pointed out that the California Supreme Court has yet to decide whether a loan servicer has a duty of care when handling a loan modification, and lower courts are split on the issue. The federal judge in Clinton opted to follow Alvarez rather than Lueras and applied the Biakanja factors to conclude that the loan servicer in that case had a duty of care not to materially misrepresent the status of an application for a loan modification. (Clinton, 225 F.3d at p. 1174.) However, Ali did not explain in her opening brief why the Biakanja factors supported the conclusion that Nationstar had a duty under the facts of this case.
In her reply brief, Ali argues that "Defendants" breached the duty of care "under the applicable California law" by mishandling Ali's applications and being unresponsive and evasive in communication. We do not consider these arguments made for the first time in her reply brief. (REO Broadcasting, supra, 69 Cal.App.4th at p. 500.)
4. RFDCPA Claim
As relevant here, the RFDCPA prohibits "debt collectors" from engaging in abusive, deceptive, and unfair practices in the collection of consumer debts. (§ 1788.1, subd. (a)(2).) Under section 1788.2, subdivision (c), "[t]he term 'debt collector' means any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection [defined as any act or practice in connection with the collection of consumer debts]."
The trial court sustained the demurrer to Ali's RFDCPA claim on the ground that the first amended complaint did not allege facts showing the defendants were "debt collectors" or engaged in "debt collection" with respect to Ali's loan.
Ali does not show that the court erred in this analysis or that she could cure the defects in her pleading by amendment. Her first amended complaint alleged that Nationstar acted as a "servicer" of her mortgage. In her opening brief, she cites no legal authority holding that a loan servicer is necessarily a debt collector under the RFDCPA. Nor does she propose any additional facts that could be alleged. Instead, she states that Nationstar "is by definition, a Debt Collector and admits in its own letters they [sic] are collecting debt." She then states: " 'This Circuit has affirmed that collecting on defaulted residential mortgages is collection of a debt subjecting a loan servicer to liability as a debt collector.' " (Citing Corvello v. Wells Fargo Bank, NA (9th Cir. 2013) 728 F.3d 878.) But Corvello does not say that. In Corvello, a bank had agreed it was a debt collector under the circumstances of that case, and the court held that offering a trial payment plan "with its concomitant demand for trial payments" constituted debt collection. (Id. at p. 885.) Nationstar is not alleged to have offered Ali a trial payment plan, and Ali does not explain how Corvello assists her.
Some courts have held that a mortgage servicer is not a debt collector under the RFDCPA. (See, e.g., Lal v. American Home Servicing, Inc. (E.D. Cal. 2010) 680 F.Supp.2d 1218, 1224.) Others have held that, even if a mortgage servicer is a debt collector, acts within the scope of the foreclosure process do not constitute "debt collection," while acts beyond the scope of the ordinary foreclosure process might. (See, e.g., Reyes v. Wells Fargo Bank, N.A. (N.D. Cal., Jan. 3, 2011) 2011 U.S. Dist. Lexis 2235 ** 60-64; see also Vien-Phuong Thi Ho v. Recontrust Co., NA (2017) 858 F.3d 568, 573 [trustee of deed of trust was not a debt collector under the federal debt collection practices statute; trustee's activities fell under the umbrella of enforcement of a security interest].) Ali does not demonstrate, with citation to legal authority or substantial argument, why Nationstar's conduct as a mortgage servicer in this particular case constitutes debt collection. She therefore fails to demonstrate error in the trial court's analysis or any basis for granting leave to amend.
E. Delay Between Entry and Notice of Entry of Judgment; Due Process
Ali complains that Nationstar filed the order sustaining the demurrer and the judgment of dismissal in December 2015, but did not file a notice of their entry until February 29, 2016. She contends Nationstar's delay in filing and serving the notice of entry was designed to "sabotage" her. She further argues that her motion for reconsideration was denied because the judgment had already been entered, the court should not have entered the judgment while the motion for reconsideration was pending (Safeco Ins. Co. v. Architectural Facades Unlimited, Inc. (2005) 134 Cal.App.4th 1477, 1483), and entering the judgment was therefore in excess of its jurisdiction and void. Ali urges that the court and Nationstar thus deprived her of due process.
Ali's arguments are unavailing. As relevant here, we reverse an order or judgment only if the appellant has demonstrated a miscarriage of justice, meaning that " 'it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.' " (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.) Ali fails to meet this standard.
First, Ali has not demonstrated that she was prejudiced by Nationstar's delay in filing or serving notice of the order sustaining the demurrer, since she was able to file a motion for reconsideration in a timely manner, and she does not show how earlier service by Nationstar would have made her arguments better or the outcome different.
Second, Ali has not demonstrated any prejudice from Nationstar's delay in serving notice of the judgment, since she has not shown how earlier service would have allowed her to mount any better argument than the meritless ones she asserts in this appeal.
Third, Ali has not shown she suffered prejudice from the court's entry of judgment while her motion for reconsideration was pending, since she has not shown that her motion for reconsideration had any merit. A motion for reconsideration will be granted only upon a showing of "new or different facts, circumstances, or law" that were not raised - and could not have reasonably been raised - at the time of the hearing and before the order was issued. (Code Civ. Proc., § 1008, subd. (a); New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212-213.) Furthermore, the reason she lost her motion for reconsideration was not because the judgment was entered, but because she filed a notice of appeal - which divested the trial court of jurisdiction to decide the motion - even though the time to appeal was extended by the delay in serving the notice of judgment and the filing of the motion for reconsideration (see Cal. Rules of Court, rule 8.108(e)).
Fourth, even if the judgment were void because it was entered while the motion for reconsideration was pending, the result in this case would be merely to remand the matter to the trial court to address the motion for reconsideration and enter judgment. Given the lack of merit to the arguments Ali presents here, there is every reason to believe the trial court would deny the motion for reconsideration and enter the same judgment anew, which would lead to a new appeal on Ali's same meritless grounds. Remanding the matter to the trial court, therefore, would be an idle act.
Based on the foregoing, Ali also fails to establish any due process violation.
In her reply brief, Ali argues that she lost "valuable time that she would have had to address the issue of Defendants' non-service of the Order as well as the Judgment of Dismissal," but does not show what difference that would have made to the merit of her arguments. She also insists there was "an additional undue financial burden on Ali since she had to appeal the court's decision, which could have been decided on reconsideration." Again, however, this argument is unavailing because there is no indication her motion for reconsideration had any merit or would have obviated an appeal.
III. DISPOSITION
The judgment is affirmed.
/s/_________
NEEDHAM, J. We concur. /s/_________
JONES, P.J. /s/_________
BRUINIERS, J.