Opinion
A153422
11-21-2018
ARTHUR GLEN KURRUS, Plaintiff and Appellant, v. SELECT PORTFOLIO SERVICING, INC., 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV-261001)
Plaintiff Arthur Kurrus sought an assumption and modification of the mortgage on his Healdsburg home after divorcing his ex-wife, the borrower, who had defaulted on the loan. Nonjudicial foreclosure proceedings were initiated, and defendant Select Portfolio Servicing, Inc. (SPS), the loan servicer, denied Kurrus's application for an assumption and modification. He then brought this lawsuit, asserting numerous causes of action against SPS based on its handling of the application. On appeal, he seeks to reverse a judgment entered after the trial court sustained SPS's demurrer without leave to amend. We affirm.
I.
FACTUAL AND PROCEDURAL
BACKGROUND
We begin by summarizing the facts, and in doing so we accept as true all factual allegations of the operative complaint and " ' "consider matters which may be judicially noticed." ' " (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) In March 2007, Kurrus and the woman he was married to at the time purchased a home in Healdsburg. The purchase was financed in part by a $620,000 loan from Washington Mutual Bank in the wife's name, secured by a deed of trust recorded against the property. The couple fell behind on the mortgage payments and obtained a loan modification in the wife's name, which was recorded in October 2011.
Four years later, Kurrus and his wife divorced, and they were each granted a half-interest in the Healdsburg property. In January 2016, a notice of default in the amount of $168,751.99 was recorded against the property. That April, Kurrus, who was living in the home, sought an assumption and modification of the loan from SPS. SPS advised him "that he could assume the loan and get a modification, but his former wife would first have to deed the home to him." Kurrus's ex-wife completed a transfer of the property to Kurrus in November 2016. In the meantime, three notices of trustee's sale of the property were recorded, one in May, one in June, and one in August.
In February 2017, after a fourth notice of trustee's sale of the property was recorded, SPS advised Kurrus that he did not qualify for an assumption and modification. Two months later, he provided SPS with his 2016 tax return, which showed his income had increased 35 percent from that which SPS had used to evaluate his eligibility for assumption and modification. SPS initiated a new review, and Kurrus submitted additional documentation, but SPS ultimately determined that his application was "incomplete" and "insufficient."
Meanwhile, the trustee's sale, which had been postponed numerous times, was rescheduled for July 2017. That month, Kurrus filed a complaint in which he asserted eight causes of action against SPS: negligent misrepresentation; negligent review of application for loan assumption/modification; violation of the California Homeowner Bill of Rights; breach of the implied covenant of good faith and fair dealing; unfair competition under Business and Professions Code section 17200 et seq.; negligent infliction of emotional distress; promissory estoppel; and injunctive relief.
Kurrus also sued other entities that are not parties to this appeal.
SPS demurred to the complaint. After briefing and argument, the trial court granted SPS's request for judicial notice, which covered various loan-related documents, and sustained the demurrer without leave to amend. The court concluded that most of the causes of action failed because Kurrus was not the borrower on the loan. Judgment was entered in favor of SPS in December 2017.
SPS represents that it "voluntarily postponed the foreclosure sale" after Kurrus filed this lawsuit and that to date the property has not been sold.
II.
DISCUSSION
A. The Standard of Review and Scope of the Appeal.
We review de novo an order sustaining a demurrer. (Brown v. Deutsche Bank National Trust Co. (2016) 247 Cal.App.4th 275, 279 (Brown).) In doing so, "[w]e accept as true all well-pleaded allegations in the operative complaint, and we will reverse the trial court's order of dismissal if the factual allegations state a cause of action on any available legal theory." (Ibid.) "Where, as here, 'the trial court sustains a demurrer without leave to amend, we review the determination that no amendment could cure the defect in the complaint for an abuse of discretion.' " (Ibid.) "Our review of the trial court's order is limited to issues that have been adequately raised and supported in the appellate briefs." (Ibid.)
Kurrus claims the trial court erred only in dismissing his claims for negligence in the handling of his application, negligent misrepresentation, and promissory estoppel, as well as in denying his request for leave to amend. Accordingly, we deem his other five causes of action abandoned and will not address them further. (Brown, supra, 247 Cal.App.4th at p. 279, fn. 2.) We also deny SPS's request for judicial notice of documents involving Kurrus's criminal record because they were not presented to the trial court and are unnecessary to our decision.
B. Kurrus Fails to Demonstrate Any Error in the Trial Court's Ruling.
1. Causes of action for negligence and negligent misrepresentation.
Kurrus claims that his negligence cause of action should survive because SPS owed him "a duty of care in processing his loan modification application." He also contends that he sufficiently alleged a claim for negligent misrepresentation because SPS "treated [him] like a borrower throughout simultaneous loan modification and assumption agreement negotiations" but denied his application "because he was a 'non-borrower,' in addition to other acts of negligence." The trial court concluded both claims failed because SPS did not owe him any duty.
The elements of a cause of action for negligence are " '(1) a legal duty to use reasonable care, (2) breach of that duty, and (3) proximate cause between the breach and (4) the plaintiff's injury.' " (Tribeca Companies, LLC v. First American Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1114.) And the elements of a cause of action for negligent misrepresentation are " '(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.' " (Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1252.) "[A]s in negligence, 'responsibility for negligent misrepresentation rests upon the existence of a legal duty, imposed by contract, statute[,] or otherwise, owed by a defendant to the injured person.' " (Bock v. Hansen (2014) 225 Cal.App.4th 215, 228.)
Kurrus argues that once SPS agreed to consider him for a loan modification, "it owe[d] a duty of care not to mishandle the application or negligently conduct the modification process." He relies on Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941, in which Division Three of this court recognized such a duty. (Id. at pp. 948-949; but see Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 67 [lender has no common law duty to offer, consider, or approve loan modifications].) As SPS points out, however, Alvarez recognized a duty owed to borrowers. (See Alvarez, at pp. 948-951.) Kurrus repeatedly characterizes himself as akin to a borrower because he was a successor in interest to the property and claims SPS treated him as such. But he provides no authority for the notion that his ex-wife's transfer of her interest in the property to him made him a successor in interest to the loan. He therefore fails to demonstrate that the trial court erred in dismissing his claims for negligence and negligent misrepresentation based on the lack of a duty.
2. Cause of action for promissory estoppel.
Kurrus also contends that he sufficiently alleged a claim for promissory estoppel because SPS "fail[ed] to perform the promises and representations that it made to [him]," which he had "relied upon . . . to his detriment." The trial court dismissed this claim because, among other reasons, Kurrus had "not allege[d] any clear and unambiguous promise on the part of SPS."
" 'The elements of a promissory estoppel claim are "(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance." ' " (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734.) Although Kurrus recites general standards governing a claim for promissory estoppel, he does not attempt to demonstrate that the trial court erred in determining that he had not alleged a sufficient promise by SPS. Rather, he makes the conclusory assertion that SPS "should be estopped to deny that [he] was entitled [to] a loan modification review" because it advised him to pay off a judgment against the property and have his ex-wife transfer the property to him "so that he would be entitled to a review for a simultaneous loan modification and assumption agreement." But according to the complaint's allegations, SPS did assess his eligibility for this relief, and he does not identify any other purported promise that was violated. We conclude that the court properly dismissed the cause of action for promissory estoppel.
3. Denial of leave to amend.
Finally, we reject Kurrus's claim that the trial court abused its discretion by denying leave to amend the complaint. Kurrus recites the standard for determining whether leave to amend should be granted and argues that he should be allowed to file an amended complaint, but he wholly fails to explain which additional facts he would allege and how they would support a valid cause of action. As a result, he has not met his "burden of demonstrating a reasonable possibility that the defects in [his] complaint can be cured by amendment." (Brown, supra, 247 Cal.App.4th at p. 282.)
III.
DISPOSITION
The judgment is affirmed. Respondent is awarded its costs on appeal.
/s/_________
Humes, P.J. We concur: /s/_________
Margulies, J. /s/_________
Banke, J.