Opinion
B289099
08-21-2020
EDWIN IVAN GUARDIA, Plaintiff and Appellant, v. WELLS FARGO HOME MORTGAGE et al., Defendants and Respondents.
Law Offices of Larry R. Glazer, Nicolette Glazer for Plaintiff and Appellant. Anglin Flewelling Rasmussen Campbell & Trytten, Jeremy E. Shulman and Robert A. Bailey for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC611064) APPEAL from a judgment of the Superior Court of Los Angeles County. Gregory Keosian, Judge. Affirmed. Law Offices of Larry R. Glazer, Nicolette Glazer for Plaintiff and Appellant. Anglin Flewelling Rasmussen Campbell & Trytten, Jeremy E. Shulman and Robert A. Bailey for Defendants and Respondents.
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Edwin I. Guardia sued a lender and a loan servicer after they denied two applications to modify his loan, alleging they negligently processed the first application and violated the Civil Code by engaging in foreclosure activities while the second application was pending. The trial court granted defendants' motion for summary judgment and denied Guardia's motions for leave to amend and for new trial. On appeal, Guardia contends the court erred in permitting his attorney to withdraw on the eve of the summary judgment hearing, and in granting summary judgment and denying his motions. We affirm.
BACKGROUND
A. First Lawsuit
In 2005, Guardia obtained a $560,000 adjustable rate home loan from Wells Fargo, secured by a deed of trust on the house where he lived in Chatsworth (the property). He defaulted on the loan in 2008, but in 2010 he and Wells Fargo entered into a loan modification agreement. In January 2011, he again defaulted. Guardia submitted several loan modification applications to Wells Fargo, which were denied.
Guardia sued Wells Fargo in 2013, asserting causes of action for (1) breach of contract, (2) promissory estoppel, (3) violations of Civil Code section 2923.6 (the Homeowner Bill of Rights), (4) violations of California Business and Professions Code section 17200 (the Unfair Competition Law), and (5) negligence. He alleged Wells Fargo failed to afford him a full and fair review of his loan modification applications and, if it had, it would have granted him a loan modification.
The trial court sustained Wells Fargo's demurrer without leave to amend. In affirming the subsequent judgment of dismissal, we stated, "The record establishes Wells Fargo denied Guardia's application for a loan modification after determining Guardia did not qualify for a loan modification. When Wells Fargo made the applicable calculation, it found Guardia's income was too low and his loan amount too high to require that Wells Fargo modify his loan." (Guardia v. Wells Fargo Home Mortg. (Sept. 1, 2016, B261287) [nonpub. opn.].)
B. The Instant Lawsuit
In December 2014, while the prior litigation was pending, Guardia filed another application to modify his loan, asserting his income had increased. Wells Fargo denied the application on the ground that Guardia failed to qualify for a loan modification because he had already had two modifications, and his monthly payment under a third would have been approximately 59 percent of his monthly income.
On December 17, 2015, Wells Fargo recorded a notice of trustee's sale against the Chatsworth property.
Later that month, Guardia again applied for a loan modification, asserting his financial circumstances had changed due to increased income.
On January 17, 2016, Wells Fargo denied Guardia's application, explaining that "there ha[d] not been a sufficient enough change in [his] circumstances for [the bank] to conduct another review." Wells Fargo mailed the denial to Guardia on January 19, 2016.
On February 22, 2016, Guardia sued Wells Fargo, Bank of America, and NBS Default Services (collectively Wells Fargo). He alleged Wells Fargo violated Civil Code section 2923.6 by continuing to foreclose on the Chatsworth property while simultaneously reviewing his December 2015 application for a loan modification ("dual-tracking"), and was negligent and violated Business & Professions Code section 17200 (the Unfair Competition Law or UCL) by failing to review his December 2014 application in a timely fashion, failing to "respond" to it, and failing to calculate his income correctly.
On May 26, 2017, Wells Fargo moved for summary judgment. In support of the motion, Shae Smith, the bank's vice president of loan documentation, authenticated 14 exhibits of bank records pertaining to Guardia's applications; and Loren Coe, Wells Fargo's attorney, authenticated five exhibits containing Guardia's factually devoid discovery responses.
The bank records indicated that Wells Fargo evaluated Guardia's December 2014 application by considering his income, including disability payments, contributor income, and rental income, and denied it because the income was too low in relation to the outstanding loan balance. The records indicated that Wells Fargo informed Guardia on January 17, 2016 that his December 2015 application was denied because "there ha[d] not been a sufficient enough change in [his] circumstances for [the bank] to conduct another review."
Guardia's discovery responses indicated that he was unable to produce evidence supporting his claims.
The hearing on Wells Fargo's summary judgment motion was set for August 10, 2017.
On June 15, 2017, Guardia's counsel, Tiffany Travillion, moved to be relieved as counsel, citing (1) "conflicting opinions regarding the actions that should be pursued in this case, as well as settlement"; (2) Guardia's failure to pay attorney fees and costs as agreed; (3) deterioration of the attorney-client relationship, and (4) concerns about actions that "would require mandatory withdrawal" under the Rules of Professional Conduct, rule 3-700(B), which prevents an attorney from maintaining representation where to do so would violate rules of professional conduct.
Guardia did not oppose the motion, but filed a declaration confirming his dissatisfaction with Travillion's representation and requesting "90 to 180 days in which to obtain new counsel to represent him." The trial court granted the motion on July 10, 2017, without a hearing, and later twice denied Guardia's requests for long continuances, instead continuing the hearing on Wells Fargo's summary judgment motion only to August 31, 2017, and then to November 17, 2017.
Guardia filed more than 300 pages opposing summary judgment, and was represented by an attorney at the hearing. His opposition adduced no evidence to support his claims, and no argument directly rebutting Wells Fargo's evidence, but rather reasserted his allegations and complained at length about the bank's loan modification practices.
In October 2017, Guardia asserted that articles and court documents from 2012 and 2014, which he discovered only in 2017, showed that Bank of America had discriminated against Latinos. He requested leave to amend his complaint to allege that Wells Fargo discriminated against Latino borrowers, and requested that the hearing on the bank's summary judgment motion be continued further.
The court ultimately denied both requests. It found that "Defendants have carried their burden of showing that no dual-tracking occurred within the relevant 2015-2016 timeframe," and "Guardia has directed this court to no evidence or argument by way of response." The court granted Wells Fargo's motion for summary judgment and later denied Guardia's motion for a new trial.
DISCUSSION
Guardia contends the trial court erred in relieving his attorney, granting summary judgment, denying his requests for leave to amend, and denying his new trial motion.
A. Motion to be Relieved
Guardia argues Ms. Travillion's withdrawal violated due process by making it impossible for him to secure counsel in time to respond to Wells Fargo's summary judgment motion. The argument is without merit.
A trial court has the power to manage the attorneys who appear before it (Comden v. Superior Court (1978) 20 Cal.3d 906, 916, fn. 4) and is vested with the duty to maintain professionalism and ethics (Townsend v. Superior Court (1998) 61 Cal.App.4th 1431, 1438-1439). Under rule 3-700(B)(2) of the Rules of Professional Conduct, counsel must withdraw if he or she "knows or should know that continued employment will result in violation of these rules or of the State Bar Act." When presented with a motion to withdraw, the trial court must make a reasonable inquiry into the nature of the alleged conflict, and counsel must describe the general nature of the conflict as fully as the confines of attorney-client privilege permit. (Aceves v. Superior Court (1996) 51 Cal.App.4th 584, 592-593.)
We review for abuse of discretion both an order granting an attorney's motion to withdraw and an order granting or denying a continuance. (Mandfredi & Levine v. Superior Court (Earles) (1998) 66 Cal.App.4th 1128, 1133; Bank of America National Trust & Savings Assn. v. Harriscolor Films, Inc. (1934) 220 Cal. 383, 384.)
In her request to withdraw as Guardia's attorney, Ms. Travillion cited ethical concerns and a breakdown in the attorney-client relationship. The trial court was entitled to accept the good faith of these representations and to find they established a sufficient conflict between Guardia and his attorney to permit withdrawal.
Guardia does not disagree, but argues Travillion's withdrawal was permissive only, and gave him insufficient time to retain other counsel before the summary judgment hearing. (See People v. Prince (1968) 268 Cal.App.2d 398, 406 [withdrawal that might work an injustice should be denied].) He observes that the court granted Travillion's motion to withdraw on July 10, 2017, only a month before the scheduled summary judgment hearing, denied his request for a continuance of three to six months, and granted only two short continuances thereafter, for "a few weeks at a time," until the ultimate hearing date of November 16, 2017. He argues this created a circumstance where no attorney would be willing to take the case because there was no time to fully investigate the claims and prepare an opposition to summary judgment.
We need not determine whether Travillion's withdrawal was permissive or mandatory because either way, Guardia had ample time to secure other counsel. Travillion moved to withdraw on June 15, 2017, nearly two months before the scheduled August 10 hearing on Wells Fargo's summary judgment motion, and Guardia filed a declaration in which he admitted he was dissatisfied with Travillion's representation. He thus had at least two months to find another attorney. No good faith reason existed for him to wait—assuming he did wait—until the July 10 order before seeking new counsel. Even if Guardia did wait until July 10, nothing in the record suggests that an attorney would have been unwilling or unable to take on his case merely because the continuances granted after July 10 were of short duration. On the contrary, Guardia filed more than 300 pages opposing summary judgment, and was represented at the hearing by an attorney.
B. Summary Judgment was Properly Granted
"Summary judgment is appropriate only 'where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law.' " (Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618 (Regents).) "A defendant seeking summary judgment must show that the plaintiff cannot establish at least one element of the cause of action," or that there is a complete defense to the claim. (Ibid.; Code Civ. Proc., § 437c, subds. (c), (o)(1) & (o)(2).) If the defendant makes such a showing, the plaintiff must then demonstrate the existence of one or more disputed issues of material fact as to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)
On appeal, we independently review the entire record that was before the trial court when it granted summary judgment, except any evidence "to which objections have been made and sustained." (Regents, supra, 4 Cal.5th at p. 618.) We view the evidence in a light most favorable to the opposing party, and resolve evidentiary doubts and ambiguities in that party's favor. (Elk Hills Power, LLC v. Board of Equalization (2013) 57 Cal.4th 593, 606.)
Guardia alleged that Wells Fargo negligently processed his December 2014 application for a loan modification by failing to review the application in a timely fashion, failing to "respond" to it, and failing to calculate his income correctly. He alleged Wells Fargo violated Civil Code section 2924.18 in 2015 and 2016 by proceeding with foreclosure measures after having failed to notify him that his December 2015 application had been denied.
Civil Code section 2923.6 places certain obligations on a mortgage servicer when a defaulting borrower seeks loan modification. If modification is denied based on investor disallowance, subdivision (f)(2) of section 2923.6 obligates the servicer to notify the borrower of the "specific reasons for the investor disallowance." Until that notice is provided, a mortgage servicer may not record a notice of default or notice of sale, and may not conduct a trustee's sale. (Civ. Code, § 2924.18, subd. (a)(1).)
Here, Wells Fargo presented records indicating it processed Guardia's December 2014 application in a timely fashion by considering his income in relation to the loan balance. Further records indicated that the bank notified Guardia in January 2016 that his December 2015 application had been denied. Finally, Guardia's own discovery responses indicated he possessed no rebuttal evidence.
This evidence shifted the burden to Guardia to present evidence establishing a triable issue of material fact. He failed to do so, instead relying on his allegations and general arguments about Wells Fargo's practices.
The issue whether a bank owes tort duties when processing a borrower's loan modification application is currently before out Supreme Court. (Sheen v. Wells Fargo Bank, N.A. (2019) 38 Cal.App.5th 346, rev. granted Nov. 13, 2019, S258019.) We need not resolve the issue here because even if such a duty exists, there is no triable issue as to whether Wells Fargo breached it.
Because Guardia failed his burden, summary judgment was appropriate.
C. Guardia's Motions for Leave to Amend and New Trial Were Properly Denied
Guardia argues the trial court erred in denying his motion for leave to amend the complaint to allege racial discrimination, and in denying his motion for new trial. We disagree.
" ' "[T]he trial court has wide discretion in allowing the amendment of any pleading [citations], [and] as a matter of policy the ruling of the trial court in such matters will be upheld unless a manifest or gross abuse of discretion is shown." ' [Citation.] Nevertheless, it is also true that courts generally should permit amendment to the complaint at any stage of the proceedings, up to and including trial. [Citations.] But this policy applies ' "only '[w]here no prejudice is shown to the adverse party.' " ' [Citation.] Moreover, ' " 'even if a good amendment is proposed in proper form, unwarranted delay in presenting it may—of itself—be a valid reason for denial.' " ' [Citations.] Thus, appellate courts are less likely to find an abuse of discretion where, for example, the proposed amendment is ' "offered after long unexplained delay . . . or where there is a lack of diligence. . . ." ' " (Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 175.)
Similarly, a ruling on a motion for new trial " 'is so completely within th[e] court's discretion that a reviewing court will not disturb the ruling absent a manifest and unmistakable abuse of that discretion.' " (People v. Lewis (2001) 26 Cal.4th 334, 364.) A trial court abuses its discretion in ruling on a motion for new trial if it bases "its decision on impermissible factors [citation] or on an incorrect legal standard." (People v. Knoller (2007) 41 Cal.4th 139, 156.)
Here, nothing in the record suggests Bank of America or Wells Fargo discriminated against Guardia due to his race. On the contrary, undisputed evidence indicated that he defaulted on a loan, was granted several forebearances, and was ultimately denied modification because the ratio of his income to the loan balance was too low. Nothing in the documents that Guardia unearthed in 2017 pertained to him specifically. On the other hand, by the time Guardia sought leave to amend, the litigation had been pending for a year and a half, and Wells Fargo had directed all of its discovery efforts and its motion for summary judgment toward the complaint's actual allegations. To grant Guardia leave to amend under these circumstances would have negated all law and motion practice to date and required that the parties start over, to Wells Fargo's manifest prejudice. Therefore, we conclude the trial court acted within its discretion in denying leave to amend.
In his motion for new trial, Guardia adduced no evidence that could have defeated summary judgment, but merely challenged the trial court's prior rulings and contended the court had "prejudged" his case. For reasons discussed above, we conclude the court acted within its discretion in denying Guardia's motion for new trial.
DISPOSITION
The judgment is affirmed. Respondents are to recover their costs on appeal.
NOT TO BE PUBLISHED
CHANEY, J. We concur:
ROTHSCHILD, P. J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. --------