Opinion
G053997
02-20-2018
ROBERTA J. LACKEN, Plaintiff and Appellant, v. SELECT PORTFOLIO SERVICING, INC., Defendant and Respondent.
CDLG, Tony Cara, Jesse J. Thaler; Nisson & Nisson and Peter L. Nisson for Plaintiff and Appellant. Wright Finlay & Zak and James J. Ramos for 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00740132) OPINION Appeal from a judgment of the Superior Court of Orange County, William D. Claster and Theodore R. Howard, Judges. Affirmed. Motion to dismiss. Denied. CDLG, Tony Cara, Jesse J. Thaler; Nisson & Nisson and Peter L. Nisson for Plaintiff and Appellant. Wright Finlay & Zak and James J. Ramos for Defendant and Respondent.
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INTRODUCTION
Roberta J. Lacken was denied a modification of her first lien mortgage loan by Select Portfolio Servicing, Inc. (Select Portfolio). She sued Select Portfolio and Wells Fargo Bank seeking damages and other remedies for violation of the Homeowner Bill of Rights (HBOR), negligence, and violations of the California Unfair Competition Law, Business and Professions Code section 17200 et seq. (UCL). After she had four tries at pleading negligence, the trial court sustained without leave to amend Select Portfolio and Wells Fargo's demurrer to that cause of action. The trial court later granted Select Portfolio's motion for summary judgment. Lacken appealed from the judgment.
We use the short form Wells Fargo to refer to Wells Fargo Bank, N.A. Successor by Merger to Wells Fargo Bank Minnesota, N.A., F/K/A Norwest Bank Minnesota, N.A., Solely as Trustee for Structured Asset Mortgage Investments II Trust 2007-AR4, Mortgage Pass-Through Certificates, Series 2007-AR-4.
The HBOR is codified at Civil Code sections 2920.5, 2923.4-2923.7, 2924, 2924.9-2924.12, 2924.15, and 2924.17-2924.20. (See Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272 (Valbuena).)
We affirm. The undisputed facts established Lacken was limited to injunctive relief as a remedy under the HBOR because a trustee's deed upon sale had not been recorded. Indeed, the evidence established that Select Portfolio had rescinded the notice of trustee's sale, a foreclosure sale has not been conducted, and Lacken has remained in her home despite not having made a mortgage payment since May 2011. The undisputed facts also established that Select Portfolio had not committed or threatened to commit a material violation of the HBOR that could be enjoined. The same reasons justified adjudicating against Lacken her cause of action for violation of the UCL. In addition, Lacken did not identify anything she has paid or lost that could be the subject of a restitution award under the UCL. For the reasons we shall explain, Lacken cannot state a cause of action for negligence.
PROCEDURAL HISTORY
Lacken initiated this lawsuit by filing a complaint in August 2014. After several rounds of demurrers, Lacken filed a third amended complaint asserting causes of action for violations of the HBOR, negligent misrepresentation, negligence and negligence per se, and violations of the UCL. Select Portfolio and Wells Fargo demurred to the third amended complaint. The trial court sustained without leave to amend the demurrer to the causes of action for negligent misrepresentation and negligence and negligence per se, and overruled the demurrer to the other two causes of action. On appeal, Lacken does not challenge the ruling on the demurrer to her negligent misrepresentation cause of action.
Select Portfolio answered the third amended complaint and moved for summary judgment. The trial court granted the motion, and judgment was entered in favor of Select Portfolio. In July 2016, Lacken filed a notice of appeal from "[j]udgment after order granting a summary judgment motion."
MOTION TO DISMISS APPEAL
Wells Fargo filed a motion to dismiss the appeal on the ground that Lacken's notice of appeal was untimely. The notice of appeal is only from the judgment entered after the court granted Select Portfolio's motion for summary judgment. Wells Fargo was not a party to the motion for summary judgment and is not named in the judgment because the trial court's prior ruling on the demurrers to the third amended complaint resolved all claims between Lacken and Wells Fargo. No judgment of dismissal in favor of Wells Fargo appears in the appellant's appendix, and the judgment resulting from the order granting summary judgment is in favor of Select Portfolio only. The unsigned minute order sustaining Wells Fargo's demurrer without leave to amend is not effective as an appealable judgment. (Powell v. County of Orange (2011) 197 Cal.App.4th 1573, 1577-1578.)
Under Code of Civil Procedure section 902, "[a]ny party aggrieved" may appeal from a judgment. As Wells Fargo is not a party to the judgment, and no judgment or signed order of dismissal has been entered against Wells Fargo, it is not a "party aggrieved" and is not a party to this appeal. Because Wells Fargo is not a party to this appeal, the appeal cannot be dismissed as to Wells Fargo, and therefore its motion to dismiss is denied.
FACTS
The facts are based on the evidence submitted in connection with Select Portfolio's motion for summary judgment.
In June 2007, Lacken obtained a loan in the amount of $555,000 from American Home Mortgage Acceptance, Inc. The loan was evidenced by a promissory note and secured by a deed of trust recorded against Lacken's home. In 2012, the loan was transferred to Wells Fargo.
On May 17, 2011, Lacken made a payment toward the balance of the loan. She has made no more payments on the loan. As a result, a notice of default was recorded against Lacken's home in July 2012.
Select Portfolio began servicing the loan on Wells Fargo's behalf in August 2013. At that time, Select Portfolio sent Lacken notice advising that it had appointed a "Relationship Manager" to assist Lacken with the loan resolution process. The relationship manager advised Lacken that Select Portfolio was considering her for a "loan resolution option" and that "any of our trained servicing representatives can assist you with answers to your questions about the status or history of your account, document requirements, or any of our available loan resolution options." Shortly thereafter, Select Portfolio received from Lacken a "Making Home Affordable" request for mortgage assistance application (essentially a loan modification application).
In November 2013, Select Portfolio sent Lacken a notice advising her that it had appointed a new relationship manager. That same month, Lacken submitted a revised request for mortgage assistance. A few weeks later, she received an "Incomplete Information Notice" from Select Portfolio informing her that additional documents were required to complete the loan modification review. She faxed documents to Select Portfolio. In December 2013, Select Portfolio sent Lacken correspondence labelled "Urgent - Final Notice" stating that it had not received all of the documents requested. A few days later, Lacken sent more documents to Select Portfolio.
By letter dated January 2014, Select Portfolio notified Lacken that she did not qualify for a loan modification under the Home Affordable Modification Program (HAMP) because she had not provided requested documents. The letter informed Lacken she had 30 days to contact Select Portfolio to discuss the reason for the "non-approval" but no foreclosure sale would be conducted during the 30-day period. Several weeks later, Select Portfolio received another request for mortgage assistance from Lacken. In February 2014, Select Portfolio informed Lacken in writing that it needed additional documents in order to review her eligibility for a loan modification.
On March 7, 2014, a notice of trustee's sale was recorded against Lacken's home. A few days later, Select Portfolio advised Lacken in writing that it still needed additional documents to review her eligibility for a loan modification. Lacken submitted a revised request for mortgage assistance and, throughout 2014, she or her authorized agent provided corrected information and additional material to Select Portfolio. Lacken filed suit in August 2014.
By letter dated January 27, 2015, Select Portfolio informed Lacken that it had received a complete assistance review application, "including all required information and documentation required to evaluate your account for loss mitigation assistance." The letter states, "If a foreclosure sale has already been scheduled we will instruct our attorney to file a motion to postpone such sale." By letter dated February 10, 2015, Select Portfolio denied Lacken's request for mortgage assistance because "we find there are no loss mitigation options for which you are approved."
In March 2015, Select Portfolio received a letter sent on Lacken's behalf that claimed Lacken's request for mortgage assistance application had been denied in error. The letter challenged the total income and property value used by Select Portfolio in reviewing the application. Select Portfolio responded by confirming its determination was accurate. In June 2015, Select Portfolio received another request for mortgage assistance from Lacken.
In November 2015, Select Portfolio rescinded the notice of trustee's sale. As of January 2016, the loan balance was $751,815.03. There is no evidence a foreclosure sale has ever been conducted.
DISCUSSION
I.
The Trial Court Did Not Err by Granting Summary Judgment.
A. Standard of Review
A trial court properly grants summary judgment if there is no triable issue of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) "We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.]" (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.)
"Under '[t]he historic paradigm for our de novo review of a motion for summary judgment . . . [w]e first identify the issues framed by the pleadings since it is these allegations to which the motion must respond. We then determine if the moving party has established a prima facie entitlement to judgment in its behalf. Only if the moving party has satisfied this burden do we consider whether the opposing party has produced evidence demonstrating there is a triable issue of fact with respect to any aspect of the moving party's prima facie case.' [Citation.]" (Lachtman v. Regents of University of California (2007) 158 Cal.App.4th 187, 197.) B. Alleged Violations of the HBOR (First Cause of Action)
We start by identifying the issues as framed by the pleadings. In the third amended complaint, Lacken alleged that Select Portfolio violated the HBOR in these ways: (1) Select Portfolio never "fairly evaluated" Lacken for a loan modification or any other foreclosure prevention alternative; (2) Select Portfolio engaged in "dual-tracking" by recording a notice of trustee's sale while her loan modification application was under review; and (3) Select Portfolio never assigned Lacken a single point of contact and "shuttled" her from one agent to another.
The HBOR, which became effective January 1, 2013, was enacted "'to ensure that, as part of the nonjudicial foreclosure process, borrowers are considered for, and have a meaningful opportunity to obtain, available loss mitigation options, if any, offered by or through the borrower's mortgage servicer, such as loan modifications or other alternatives to foreclosure.' ([Civ. Code,] § 2923.4, subd. (a).)" (Valbuena, supra, 237 Cal.App.4th at p. 1272.)
"[The] HBOR prohibits 'dual tracking,' which occurs when a bank forecloses on a loan while negotiating with the borrower to avoid foreclosure." (Valbuena, supra, 237 Cal.App.4th at p. 1272.) If the borrower submits a "completed application" for a first lien loan modification, then "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." (Civ. Code, former § 2923.6, subd. (c), added by Stats. 2012, ch. 86, § 7, ch. 87, § 7 and repealed by Stats. 2012, ch. 86, § 7, ch. 87, § 7, eff. Jan. 1, 2018.) The HBOR requires a mortgage servicer to establish "a single point of contact" on request from a borrower who requests "a foreclosure prevention alternative." (Civ. Code, § 2923.7, subd. (a).) The single point of contact's responsibilities include communicating to the borrower the process and deadlines for applying for a foreclosure prevention alternative and coordinating receipt of documents associated with those alternatives. (Id., § 2923.7, subd. (b)(1) & (2).)
Civil Code former section 2923.6 was, by its own terms, repealed effective January 1, 2018. (Civ. Code, former § 2923.6, subd. (k), added by Stats. 2012, ch. 86, § 7, ch. 87, § 7 and repealed by Stats. 2012, ch. 86, § 7, ch. 87, § 7, eff. Jan. 1, 2018.) In subsequent citations to Civil Code former section 2923.6, we omit the legislative history of its enactment and repeal.
The relief available under the HBOR depends on whether a foreclosure sale has been conducted. If a trustee's deed upon sale has not been recorded, then the borrower may bring an action for injunctive relief to enjoin a material statutory violation. (Civ. Code, § 2924.12, subd. (a)(1); see Valbuena, supra, 237 Cal.App.4th at p. 1272.) After a trustee's deed upon sale has been recorded, the borrower may seek monetary damages resulting from statutory violations. (Civ. Code, § 2924.12, subd. (b); see Valbuena, supra, 237 Cal.App.4th at p. 1272.) "A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not be liable for any violation that it has corrected and remedied prior to the recordation of the trustee's deed upon sale." (Civ. Code, § 2924.12, subd. (c).)
Here, although a notice of trustee's sale was recorded, it was rescinded, and it is undisputed that a trustee's deed upon sale has not been recorded and no foreclosure sale has been conducted. Lacken is therefore limited to injunctive relief as a remedy for alleged violations of the HBOR. But there are no statutory violations to enjoin. Lacken does not dispute that Select Portfolio rescinded the notice of trustee's sale. The notice of default was recorded in July 2012, before the effective date of the HBOR and long before Lacken submitted an application for mortgage assistance to Select Portfolio. Her claim of dual tracking in violation of Civil Code section 2924, subdivision (c) therefore provides no basis for relief.
Lacken failed to raise a triable issue of material fact regarding appointment of a single point of contact under Civil Code section 2923.7, subdivision (a). Select Portfolio submitted evidence that a single point of contact was appointed in August 2013 and that a new single point of contact was appointed in November 2013. Lacken did not submit evidence to contradict those facts, and she acknowledged having received a letter telling her that a relationship manager had been assigned.
Lacken did not raise a triable issue of material fact to support her claim that Select Portfolio never "fairly evaluated" her for a loan modification or any other foreclosure prevention alternative. Lacken alleged that by not fairly evaluating her request for loan modification, Select Portfolio violated Civil Code former section 2923.6, subdivision (g), which stated: "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."
Thus, if a borrower has been evaluated or been afforded a "fair opportunity" to be evaluated for a first lien loan modification consistent with the HBOR, then the mortgage servicer is not obligated to evaluate a subsequent application from the same borrower unless there has been a material (and documented) change in the borrower's circumstances since the previous application.
Under Civil Code former section 2923.6, subdivision (g) a mortgage servicer would be obligated to evaluate a subsequent application from a borrower if (1) the mortgage servicer did not evaluate a previous application from the borrower for a first loan modification; (2) the mortgage servicer did not previously afford the borrower a fair opportunity to be evaluated for a loan modification; or (3) there has been a material and documented change in the borrower's financial circumstances since the date of the borrower's previous application.
Lacken alleged in the third amended complaint that in July 2013, the original mortgage servicer (Chase Bank) denied her application for a loan modification under HAMP. In opposition to the summary judgment motion, Lacken submitted no evidence to support that allegation or to support a claim that Chase Bank did not evaluate her or offer her a fair opportunity to be evaluated. The undisputed evidence established that Select Portfolio did evaluate her subsequent applications for a loan modification and thereby satisfied whatever obligation it might have had under Civil Code former section 2923.6, subdivision (g). The HBOR did not dictate that Select Portfolio grant Lacken a loan modification. (See Civ. Code, § 2923.4, subd. (a) ["Nothing in the act that added this section . . . shall be interpreted to require a particular result of [the loan modification] process"].)
Civil Code former section 2923.6, subdivision (b) stated, and current Civil Code section 2923.6, subdivision (b) states: "It is the intent of the Legislature that the mortgage servicer offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority." In support of its motion for summary judgment, Select Portfolio submitted evidence that Lacken submitted a "Making Home Affordable" request for mortgage assistance application in August 2013, a revised application in November 2013, and another application in January 2014. Select Portfolio requested additional documents and information from Lacken, and she supplied them. In January 2015, Select Portfolio informed Lacken it had received a completed application from her. In February 2015, Select Portfolio denied Lacken's request for mortgage assistance because "we find there are no loss mitigation options for which you are approved." In opposition to the motion for summary judgment, Lacken presented no evidence that would raise a triable issue as to whether her requested loan modification was or would have been consistent with Select Portfolio's "contractual or other authority." (Ibid.)
Lacken asserts she is entitled to a mandatory injunction compelling Select Portfolio to "compl[y] with the California H[BOR] in reviewing [her] in good faith for a loan modification" and "reset" the loan status "to the status it was on 8/8/2013." The HBOR does not authorize such broad injunctive relief. Instead, it authorizes an action for injunctive relief to enjoin "a material violation of section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17." (Civ. Code, § 2924.12, subd. (a)(1).) Injunctive relief under the HBOR is limited to material violations of the listed statutory provisions. (Lucioni v. Bank of America, N.A. (2016) 3 Cal.App.5th 150, 158-159.) Under the undisputed facts, Lacken has not established any statutory violation to be enjoined. C. Alleged Violations of the UCL (Fourth Cause of Action)
In the third amended complaint, Lacken alleged that Select Portfolio violated the UCL by: (1) failing to promptly appoint a single point of contact as required by Civil Code section 2923.7; (2) instituting "improper or premature foreclosure proceedings to generate unwarranted fees"; (3) misrepresenting to her that it was diligently reviewing her loan modification application while recording the notice of trustee's sale; (4) "dragging the loan modification" process to cause her to incur unnecessary fees, charges, and penalties; (5) failing to communicate with her "regarding the financial distress regarding mortgage loan repayment"; (6) violating Civil Code former section 2923.6 and Civil Code section 2923.7; and (7) misrepresenting to her that it would process her loan modification application in accordance with the HBOR.
The UCL permits civil recovery for "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising." (Bus. & Prof. Code, § 17200.) "'Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.'" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)
Select Portfolio argues Lacken does not have standing to sue under the UCL, which requires a private plaintiff to allege he or she "has suffered injury in fact and has lost money or property." (Bus. & Prof. Code, § 17204.) We do not address the issue of standing because Lacken did not submit evidence creating a triable issue of material fact as to liability under the UCL. It was undisputed that Select Portfolio appointed a single point of contact in compliance with Civil Code section 2923.7. Lacken produced no evidence that the foreclosure proceedings instituted by Select Portfolio were improper or premature. She never disputed that she made her last loan payment in May 2011. Select Portfolio did record a notice of trustee's sale, but then rescinded it, so there is nothing to enjoin in that regard. Lacken does not identify or quantify the fees, charges, and penalties she incurred due to Select Portfolio allegedly "dragging the loan modification" process. Her allegation that Select Portfolio failed to communicate with her "regarding the financial distress regarding mortgage loan repayment" is incomprehensible. Lacken submitted no evidence that Select Portfolio violated Civil Code former section 2923.6 and Civil Code section 2923.7 or that it did not process her loan modification application in accordance with the HBOR.
The UCL permits only two remedies—injunctive relief and restitution. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 371.) "The object of restitution is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest." (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149.) "The 'notion of restoring something to a victim of unfair competition includes two separate components. The offending party must have obtained something to which it was not entitled and the victim must have given up something which he or she was entitled to keep.'" (Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1012.) Lacken submitted no evidence that she had paid money to or was owed anything from Select Portfolio that could be the object of a restitution award. As we explained with respect to the HBOR, there is nothing to enjoin. She therefore has no remedy under the UCL.
II.
The Trial Court Did Not Err by Sustaining Without
Leave to Amend the Demurrer to the Negligence Cause of
Action of the Third Amended Complaint.
A. Standard of Review
We independently review a ruling on a demurrer and determine de novo whether the pleading alleges facts sufficient to state a cause of action. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.) Construing the allegations in a reasonable manner, we assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded, and matters of which judicial notice can and has been taken. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) B. Allegations of the Negligence Cause of Action
In the negligence cause of action of the third amended complaint, Lacken alleged that Select Portfolio "voluntarily assumed a duty to exercise due care in handling [her] financial situation when [it] agreed to review [her] for a loan modification." Select Portfolio assumed that duty by having Lacken submit a new loan application when Select Portfolio became the mortgage servicer.
Select Portfolio allegedly breached its duty of care by engaging in the following "unreasonable conduct": (1) "[Select Portfolio] failed to contact [Lacken] at any time in order to keep her informed as to the loan modification review"; (2) "[Select Portfolio] failed to provide [Lacken] an overview at the time they accepted [her] loan modification applications, of the loan modification process, any deadlines, expiration dates of documents, and/or any deficiencies"; (3) "[Select Portfolio] failed to explore other options to keep [Lacken] in her home" as required by the HBOR and did not contact her "to assess the foreclosure alternatives available"; (4) "[Select Portfolio] prematurely recorded a notice of sale while [Lacken] was under loan modification review"; and (5) "[Select Portfolio] negligently failed to provide [Lacken] with a single point of contact [who] was readily familiar with her file and circumstances and instead, require[ed] [her] to communicate with numerous different agents [of Select Portfolio], none of [whom] w[as] familiar with her file and who gave her inconsistent, erroneous information."
By not assigning Lacken a single point of contact, Select Portfolio allegedly "interfered with [her] rights in receiving true assistance." Lacken alleged that Select Portfolio was negligent per se because it violated Civil Code former section 2923.6 and Civil Code section 2923.7. As to causation and damages, she alleged that Select Portfolio's breaches of duty were "the actual and proximate cause of Plaintiff's damages because, but for [those] breaches, [her] loan would have been modified, her arrearages would not have been capitalized, the loan would have become current, and [her] monthly payments would have been decreased, thereby avoiding default." C. Lacken Cannot State a Cause of Action for Negligence.
"To state a cause of action for negligence, a plaintiff must allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff's damages or injuries. [Citation.] Whether a duty of care exists is a question of law to be determined on a case-by-case basis." (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62 (Lueras).)
In Lueras, supra, 221 Cal.App.4th at pages 62 through 68, the court considered whether a lender owes a borrower a duty of care in handling an application for a loan modification. The court concluded a lender does not owe a common law duty of care to a borrower to "offer, consider, or approve a loan modification" or to offer "alternatives to foreclosure" because "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." (Id. at pp. 67-68; accord Anderson v. Deutsche Bank Nat. Trust Co. Americas (9th Cir. 2016) 649 Fed.Appx. 550, 552; Deschaine v. IndyMac Mortgage Services (9th Cir. 2015) 617 F.Appx. 690, 693; Willis v. JPMorgan Chase Bank, N.A. (E.D. Cal. 2017) 250 F.Supp.3d 628, 633.) Based on Lueras, Select Portfolio argues it did not owe Lacken a duty of care in handling her loan modification application.
Although Lueras was a majority opinion with a dissent, the dissent agreed with the majority that a lender does not owe a borrower a duty of care in handling a loan modification application. (Lueras, supra, 221 Cal.App.4th at p. 94 (dis. opn. of Thompson, J.).) The dissent disagreed with the majority's conclusion that a lender owes a duty of care to the borrower to not make material representations about the status of a loan modification application. (Id. at pp. 95-96 (dis. opn. of Thompson, J.).)
We recognize there is a split of authority, and other courts have concluded the lender owes a duty of care to a borrower seeking a loan modification. (Rossetta v. CitiMortgage, Inc. (2017) 18 Cal.App.5th 628, 640-642; Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1180-1182; Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941, 948-950 (Alvarez).) In this case, the trial court found Lueras to be more persuasive than Alvarez and concluded that Select Portfolio did not owe Lacken a duty of care. We follow Lueras and reach the same conclusion. As we shall explain, even if Select Portfolio owed Lacken a duty of care, she has not alleged breach, causation, or damages.
Lacken argues the trial court did not take into consideration how the HBOR might affect the duty of care analysis. Lueras did not foreclose the possibility that a lender might owe a borrower a duty of care in handling a loan modification, it just declined to judicially create one: "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." (Lueras, supra, 221 Cal.App.4th at p. 67.)
Lueras concerned a lender's conduct before the effective date of the HBOR, which is a statute creating certain obligations on the lender to "offer, consider, or approve loan modifications and to explore foreclosure alternatives." (See Lueras, supra, 221 Cal.App.4th at pp. 67, 86, fn. 14.) In Alvarez, supra, 228 Cal.App.4th at pages 950 through 951, the court considered the HBOR as setting forth policy considerations affecting the determination whether a lender owes a duty of care to the borrower.
But finding a duty of care in this case based on the HBOR would be inconsistent with the remedies it affords. Before a trustee's deed upon sale is recorded, a borrower is limited to injunctive relief to remedy a material violation of the HBOR. (Civ. Code, § 2924.12, subd. (a)(1).) Only after a deed upon sale is recorded may a borrower seek damages. (Id., § 2924.12, subd. (b).) Here, no trustee's sale has been held and no deed upon sale has been recorded. The HBOR unequivocally states that a mortgage servicer "shall not be liable for any violation that it has corrected and remedied prior to the recordation of the trustee's deed upon sale." (Id., § 2924.12, subd. (c).) Thus, finding a duty of care in favor of Lacken, and permitting her to recover damages from Select Portfolio under a theory of negligence for violations of the HBOR, would be contrary to the Legislature's decision to limit remedies.
Lacken's claim for negligence per se fails for the same reason. Negligence per se is an evidentiary presumption of negligence when there is a violation of a statute, ordinance, or regulation proximately causing death or injury to someone within the class of person for whose protection the statute, ordinance, or regulation was enacted. (Johnson v. Honeywell Internat. Inc. (2009) 179 Cal.App.4th 549, 555.) Negligence per se is not a separate cause of action and does not create a private right of action for violation of a statute. (Id. at pp. 555-556.) Lacken alleged that Select Portfolio's violations of various provisions of the HBOR constituted negligence per se, but she could not recover damages under the HBOR, and the doctrine of negligence per se cannot be used to create a private right of action allowing her such remedy.
Moreover, even if Lacken could allege a duty of care, she has not alleged, and cannot allege, viable theories of breach, causation, and damages. In this appeal, Lacken does not attempt to defend her allegations of breach, causation, and damages in the third amended complaint. Instead she posits a new theory of liability. She argues in her appellate briefs that discovery has revealed the recordation of the notice of trustee's sale in March 2014 made her ineligible for the Keep Your Home California mortgage reinstatement program, that recording the notice of trustee's sale violated the dual-tracking prohibition of the HBOR, and that "but for" this violation, her mortgage would have been reinstated. Lacken made this argument in opposition to the motion for summary judgment, but not in opposition to the demurrer to the third amended complaint. She has not asked us for leave to amend.
In addition, the allegations of the third amended complaint are inconsistent with the theory of liability presented in Lacken's appellate briefs. In the third amended complaint, Lacken alleged that in January 2014 her agent sent Select Portfolio a loan modification packet, and in February 2014 Select Portfolio sent her a letter "acknowledging the complete loan modification packet." The February 2014 letter, which was attached as an exhibit to the complaint, acknowledged receipt of the loan modification application and stated "it is incomplete" and "[b]efore we can begin our evaluation process, you are required to submit a complete application."
Civil Code former section 2923.6, subdivision (c) stated, "[i]f a borrower submits a complete application for a first lien loan modification" then the lender or mortgage servicer "shall not record a notice of default or notice of sale, or conduct a trustee's sale" while the "complete" loan modification application "is pending." (Italics added.) The third amended complaint did not allege that Lacken had submitted a complete loan modification application as of the date Select Portfolio recorded the notice of trustee's sale. An amended complaint alleging Lacken had submitted a complete application would have been a sham pleading. (See Womack v. Lovell (2015) 237 Cal.App.4th 772, 787; Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383.)
DISPOSITION
The judgment is affirmed. Respondent is entitled to costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. MOORE, J.