Attili v. ETrade Bank
Filed 6/19/13 Attili v. E*Trade Bank CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.
IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE
DISTRICT
DIVISION SIX
JAD ATTILI,
Plaintiff and
Appellant,
v.
E*TRADE BANK et al.,
Defendants and
Respondents.
2d Civil No.
B242534
(Super. Ct. No.
56-2010-00373496-CU-OR-SIM)
(Ventura
County)
Appellant Jad Attili
borrowed $1 million to purchase a home, secured by a deed of trust on the
property. When Attili stopped making his
monthly payments, the loan servicer, respondent OneWest Bank, FSB (OneWest),
appointed a successor trustee to institute nonjudicial
trustee sold the property at a foreclosure sale. Attili's fourth amended complaint seeks
damages against OneWest and respondent E*Trade Bank (E*Trade) for, inter alia,
wrongful foreclosure, intentional infliction of emotional distress and
promissory estoppel.
The trial court
dismissed Attili's claim for intentional infliction of emotional distress and
granted respondents' motion for summary judgment as to the remaining
claims. Attili contends triable issues
of fact exist that preclude the grant of summary judgment. We disagree and affirm.
FACTS AND PROCEDURAL BACKGROUND
In June 2006,
MortgageIt, Inc. (MortgageIt) loaned Attili $1 million to purchase a $1,265,980
single-family residence located at 4244 Copperstone
Avenue in Simi Valley
(Property). To secure repayment of the
loan, Attili signed a promissory note and deed of trust. The deed of trust gave the lender, its
nominee and its successors and assigns the power to sell the Property upon
default, and provided that the note "can be sold one or more times without
prior notice" to the borrower. It
also provided that a successor trustee could be appointed, and that "the
successor trustee shall succeed to all the title, powers and duties conferred
upon the [original] Trustee . . . ."
MortgageIt reportedly
sold the note to IndyMac Bank, FSB (IndyMac) which retained the servicing
rights to the loan, but sold the note to UBS Real Estate Securities Inc. (UBS)
under a master loan purchasing and servicing agreement. UBS subsequently assigned the note to
E*Trade. After IndyMac failed, OneWest
acquired the servicing rights to the loan.
Attili disputes whether MortgageIt effectively transferred ownership of
the note, but admits that OneWest serviced his loan between March 2009 and May
2010.
Citing a decrease in
income, Attili sought a loan modification from OneWest. Attili claims that he spoke with
approximately 20 OneWest servicing representatives between June and September
2009, and that "one or two" of the representatives told him he would
not be considered for a loan modification unless he first defaulted on his loan
payments. Based on this
"advice," Attili stopped making payments in June 2009.
OneWest purportedly sent
at least two letters to Attili advising him of the default and outlining
options to avoid foreclosure. In October
2009, OneWest substituted Quality Loan Service Company (Quality) as trustee
under the deed of trust. After Quality
recorded a notice of default against the Property, OneWest advised Attili that
he did not qualify for a loan modification due to its contractual obligations
with the owner of the loan. Attili made
no attempt to cure the default, and Quality recorded a notice of trustee's
sale. Following a series of delays,
primarily due to Attili's bankruptcy proceedings, a third party purchased the
Property at the sale in May 2010.
Attili subsequently sued
E*Trade, OneWest, Quality and others for wrongful foreclosure. After a number of successful demurrers,
Attili filed a fourth amended complaint against E*Trade and OneWest alleging
causes of action for (1) declaratory relief, (2) wrongful foreclosure, (3)
intentional infliction of emotional distress, (4) promissory estoppel, and (5)
breach of the implied covenant of good faith and fair dealing. The first two causes of action allege that
respondents lacked authority to foreclose because they "did not in fact
own the note secured by the deed of trust," and did not comply with
certain obligations under Civil Code section 2923.5.
alleges that Attili relied to his detriment on IndyMac's promise to offer him a
loan modification if he defaulted on his loan.
The final cause of action for breach of the covenant of good faith and
fair dealing reiterates the prior allegations and further alleges that
respondents improperly recorded certain documents in connection with the
foreclosure. The complaint seeks
does not seek to set aside the sale.
The trial court
sustained, with leave to amend, respondents' demurrer to the third cause of
action for intentional infliction of
emotional distress. It also
sustained E*Trade's demurrer to the claims for promissory estoppel and breach
of the implied covenant of good faith and fair dealing. Attili elected not to amend his pleading, and
the trial court dismissed those causes of action with prejudice.
The trial court granted
respondents' subsequent motion for summary judgment as to the remaining
claims. The court determined that even
though respondents did not establish some of the alleged material facts,
including E*Trade's ownership of the note, "[t]here are no triable issues
of fact as to any wrongdoing in the foreclosure process, as to promissory
estoppel, or as to breach of the implied covenant of good faith and fair
dealing." The court further noted,
"[t]he declaratory relief cause of action simply restates the theories of
liability covered by the other causes of action." Attili appeals.
DISCUSSION
Standard
of Review
Attili's notice of
appeal references both the summary judgment and the prior order of dismissal,
but his opening brief clarifies that "[t]he issue in this case is whether
the trial court erred in granting summary judgment in favor of the Defendants
. . . ."
The brief does not raise any issues concerning the dismissal of his
claim for intentional infliction of emotional distress as to both respondents
and his claims for promissory estoppel and breach of the covenant of good faith
and fair dealing as to E*Trade. We
therefore limit our discussion to the propriety of the summary judgment ruling. (See Reyes
v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6 ["Issues not raised in
an appellant's brief are deemed waived or abandoned"].)
A motion for summary
judgment "shall be granted if all the papers submitted show that there is
no triable issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law."
(Code Civ. Proc., § 437c, subd. (c).)
We review the record de novo to determine whether triable issues of
material fact exist and whether respondents were entitled to judgment as a
matter of law. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th
1138, 1142.)
Declaratory
Relief and Wrongful Foreclosure
Attili's causes of
action for declaratory relief and
wrongful foreclosure allege that respondents lacked authority to foreclose
because neither party was the owner of the note secured by the deed of
trust. Attili concedes the law does not
require a foreclosing party to actually produce the original note, but asserts
that the party, at a minimum, must prove an enforceable interest in the
note. He is incorrect.
As we recently stated in
Shuster v. BAC Home Loans Servicing, LP
(2012) 211 Cal.App.4th 505, 511 (Shuster),
"California's statutory nonjudicial foreclosure scheme (§§ 2924-2924k) does
not require that the foreclosing party have a beneficial interest in or
physical possession of the note."
(Accord, Jenkins v. JP Morgan
Chase Bank, N.A. (2013) 216 Cal.App.4th 497; Debrunner v. Deutsche Bank Nat. Trust Co. (2012) 204 Cal.App.4th
433, 440-441 (Debrunner);
(2011) 192 Cal.App.4th 1149, 1154; Lane
v. Vitek Real Estate Industries Group (E.D. Cal. 2010) 713 F.Supp.2d 1092,
1099.) "Section 2924, subdivision
(a)(1) specifically permits the 'trustee, mortgagee, or beneficiary, or any of
their authorized agents' to institute foreclosure by recording a notice of
default." (Shuster, at p. 512.) It does
not require "a judicial action to determine whether the person initiating
the foreclosure process is indeed authorized." (Gomes,
at p. 1155.)
Respondents failed to
establish that E*Trade was the lawful owner of Attili's note, but they did
establish that OneWest was the designated loan servicer under the deed of
trust. As the lender's authorized agent,
OneWest had authority to appoint a successor trustee to institute nonjudicial
foreclosure proceedings. As the
successor trustee, Quality had authority to record the notice of default and
notice of trustee's sale. (
["A 'person authorized to record the notice of default or the notice of
sale' shall include an agent for the mortgagee or beneficiary, an agent of the
named trustee, any person designated in an executed substitution of trustee, or
an agent of that substituted trustee"].)
The note holder's involvement in the foreclosure is
inconsequential. (§ 2924, subd. (a)(1);
Moreover, Attili has not
shown that he was prejudiced by respondents' actions. (Debrunner,
supra, 204 Cal.App.4th at p. 443.)
Attili admits he borrowed $1 million from MortgageIt, pledged the
Property as security for the loan and failed to make the required
payments. If, as Attili claims, OneWest
lacked authority to foreclose, "the true victim was not [Attili] but the
original lender, which would have suffered the unauthorized loss of a $1
million promissory note." (
(2011) 198 Cal.App.4th 256, 272.) The
purported assignments of the note merely substituted one creditor for another
without changing Attili's obligations, such that the foreclosure would have
occurred regardless of the validity of the assignments. (Herrera
v. Federal National Mortgage Assn. (2012) 205 Cal.App.4th 1495,
1507-1508.)
Attili's complaint also
alleges that respondents violated section 2923.5, which bars mortgagees,
trustees, beneficiaries or authorized agents from filing a notice of default
until 30 days after "initial contact" with the borrower or 30 days
after satisfying certain due diligence requirements. Attili did not address that allegation in his
opposition to the summary judgment motion.
Nor does he cite or refer to section 2923.5 in his opening brief. Accordingly, we deem the issue waived on
appeal. (See Reyes v. Kosha, supra, 65 Cal.App.4th at p. 466, fn. 6.) The trial court properly concluded that no
triable issues of material fact exist as to Attili's claims for declaratory
relief and wrongful foreclosure.
Dealing
"'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." [Citation.]'" (Advanced
Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th
1661, 1672.) Attili bases his promissory
estoppel claim on the allegation that IndyMac promised to "offer him a
[loan] modification" if he stopped making payments on his loan. The undisputed evidence does not support this
allegation.
In his separate
statement of undisputed and disputed facts, Attili admitted that "[t]he
one or two [IndyMac] representatives [he] spoke with did not tell him that his
loan would be modified if he defaulted.
They only told him that he would not be considered for a modification
unless he defaulted." After Attili
defaulted, OneWest did exactly what the representatives said it would do: it considered his request for a loan
modification. In the absence of a
"clear and unambiguous" promise to modify his loan, Attili's
promissory estoppel theory fails as a matter of law. (See, e.g., Rumbaua v. Wells Fargo Bank, N.A. (N.D. Cal., Aug. 25, 2011, No.
11-1998SC) 2011 WL 3740828, *5 [rejecting promissory estoppel claim where
plaintiff failed to "allege that Defendant promised that if she defaulted
on her loan, she would necessarily qualify for a modification"];
Cal., Apr. 13, 2011, No. 1:10-cv-01709-OWW-SKO) 2011 WL 1403059, *2
["Defendants['] purported promise that Plaintiff's application would be
'processed and reviewed' was not an unambiguous promise that the application
would be approved, the loan modified, or that foreclosure would not
occur"].) By choosing to default,
Attili accepted the risk that OneWest would deny his request for a
modification. The foreclosure resulted
not from OneWest's denial of his request, but from his inability to cure the
default after the denial.
Lastly, Attili contends
that OneWest breached the implied covenant of good faith and fair dealing by
failing to honor its promise to modify his loan and by wrongfully foreclosing
under the deed of trust. As discussed
above, the undisputed evidence establishes that OneWest never promised Attili a
loan modification and that it had authority to initiate foreclosure
proceedings. The trial court
appropriately granted summary judgment for respondents.
DISPOSITION
The judgment is
affirmed. Respondents shall recover
their costs on appeal.
NOT TO BE PUBLISHED.
PERREN,
J.
We concur:
GILBERT, P. J.
YEGAN, J.
>
Tari
L. Cody, Judge
Superior
Court County of Ventura
______________________________
Aidan W. Butler for
Plaintiff and Appellant.
Allen Matkins Leck
Gamble Mallory & Natsis, Andrew E. Miller and Rebecca G. Gundzik for
Defendants and Respondents.
All further statutory references are to the
Civil Code unless otherwise stated.
appendix does not include the order of dismissal or the trial court's minute
order granting the motion for summary judgment.
We have taken judicial notice of these documents in the court's file in
Ct. Ventura County, 2012, No. 56-2010-00373496-CU-OR-SIM). (Evid. Code, §§ 452, subd. (d), 459.)
