Gardner
Bank USA
Filed 6/26/12 Gardner v. HSBC Bank USA CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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.
IN THE COURT OF APPEAL OF THE STATE OF
FOURTH APPELLATE DISTRICT
DIVISION TWO
MARCELLINE M. GARDNER,
Plaintiff and Appellant,
v.
HSBC BANK USA et al.,
Defendants and Respondents.
E053398
(Super.Ct.No. CIVVS908055)
OPINION
APPEAL from the Superior
Court of
Bernardino County.
Kirtland L. Mahlum, Temporary Judge (pursuant to Cal. Const.,
art. VI, § 21) and Steve Malone, Judge.
Marcelline M. Gardner, in
pro. per., for Plaintiff and Appellant.
Mark V. Asdourian, Mark V. Asdourian
and Jamie L. Ackerman for Defendants and Respondents HSBC Bank USA,
N.A., Litton Loan Servicing, LP, and Mortgage Electronic Registration Systems,
Inc.
Darling & Risbrough,
Ronald E. Darling and Nancy C. Eng for Defendant and Respondent Signature Group
Holdings, Inc.
According to Marcelline M. Gardner’s complaint,
in 2005, during the go-go era of the Southern California
housing market, she used 100 percent, adjustable-rate, interest-only financing
to buy a house in Hesperia. In
hindsight, this was not a good idea. In
2009, the house went into foreclosure (although it appears that, for the
moment, Gardner is still living
there).
Gardner
then filed this action against the lender, the lender’s successor in interest,
and other entities involved in the loan.
The trial court sustained demurrers to the original complaint and the
first amended complaint; finally, it sustained demurrers to the second amended
complaint without leave to amend.
Gardner
appeals. The only contentions that she
has properly asserted in her opening brief are:
1. The
three-year statute of limitations for
rescission under the Truth in Lending Act had not run.
2. The
lender’s successor in interest is as liable as the lender.
We find no reversible error. Hence, we will affirm.
I
PROCEDURAL BACKGROUND
Gardner
filed the original complaint in this action in December 2009. The trial court sustained a demurrer to the
original complaint with leave to amend.
Gardner
then filed a first amended complaint.
The trial court sustained demurrers to the first amended complaint
three causes of action but with leave
to amend with respect to the remaining two causes of action — for predatory
lending practices and for nondisclosure of required documents.
The operative complaint is the second amended
complaint (the complaint). The
defendants named in the complaint were:
1. Fremont
Reorganizing Corporation (Fremont);
name="_ftnref3" title="">[3]
2. HSBC
Bank USA, N.A.
(HSBC);
3. Litton
Loan Servicing, LP (Litton); and
4.
Mortgage Electronic Registration Systems, Inc. (MERS).
The complaint repleaded the two remaining causes
of action, for predatory lending practices and for nondisclosure of required
documents.
Signature filed a demurrer. HSBC, Litton, and MERS collectively filed a
separate demurrer. HSBC, Litton, and
MERS argued, among other things, that Gardner’s
nondisclosure cause of action, to the extent that it was based on an alleged
violation of the Truth in Lending Act, was barred by the applicable statutes of
limitations.
The trial court sustained both demurrers without
leave to amend. Accordingly, it
dismissed the complaint.
II
FACTUAL BACKGROUND
Consistent with the applicable standard of review
(see part III, post), the following
statement of facts is based on the allegations of the complaint, supplemented
by matters of which the trial court took judicial notice.
Gardner
is a real estate agent. In November
2005, she purchased a house in Hesperia for $448,000. To finance the purchase, she obtained a
$358,400 first mortgage and an $89,600 second mortgage, both from Fremont.
Initially, Gardner
did not want to accept the loans, because the interest rate was adjustable
after two years and the monthly payment was too high. However, her mortgage broker assured her that
Fremont would refinance the loan
and reduce the monthly payment before the interest rate became adjustable.
Fremont
knew that Gardner’s income was
inadequate to repay the loan. However, Fremont
“concealed” Gardner’s true income
so that it could approve the loan. (The
complaint does not explain from whom this was concealed.)
The first trust deed named MERS as beneficiary,
but it specified that MERS was “acting solely as a nominee” for Fremont.
In February 2009, HSBC purchased the first
mortgage from Fremont. Litton was the loan-servicing agent for HSBC.
In May 2009, nonjudicial proceedings to foreclose
the property were initiated.
In October 2009, a forensic loan audit revealed
that Fremont had failed to provide Gardner
with:
1. Loan
details, such as the loan amount, payment amount, annual percentage rate, due
dates, late charges, prepayment penalty, and service fees, allegedly in
violation of the Truth in Lending Act (15 U.S.C. §§ 1601-1667f) (TILA);
2. A
good-faith estimate of settlement costs and a booklet regarding real estate
settlement services, allegedly in violation of the Real Estate Settlement
Procedures Act (12 U.S.C. §§ 2601-2617) (RESPA);
3. A
consumer caution and a home ownership disclosure, allegedly in violation of
Finance Code sections 4970 and 4973;
4. A per
diem interest statement, allegedly in violation of Civil Code section 2948.5;
5. A
comparison of sample mortgage features, allegedly in violation of Finance Code
section 22171 and California Code of Regulations, title 10, section 1950.314.8;
and
6. A
signed and initialed copy of the loan application, allegedly in violation of:
a. The Equal Credit Opportunity
Act (15 U.S.C. §§ 1691-1691f) (ECOA);
b. Regulation B (12 C.F.R.
§§ 202.1-202.15);
c. The Home Mortgage Disclosure Act (12 U.S.C.
§§ 2801-2810) (HMDA); and
d. California Code of
Regulations, title 10, section 1950.204.
Gardner
does not allege that her house was actually foreclosed upon.
“dr[i]ve[n] . . . into bankruptcy” in order to “save [her]
home” and that her credit was “destroy[ed].”
III
STANDARD OF REVIEW
“On review from an order sustaining a demurrer,
‘we examine the complaint de novo to determine whether it alleges facts
sufficient to state a cause of action under any legal theory, such facts being
assumed true for this purpose.
[Citations.]’ [Citation.] We may also consider matters that have been
judicially noticed. [Citations.]” (Committee
for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48
Cal.4th 32, 42.)
IV
THE TILA STATUTE OF
LIMITATIONS
Gardner contends that the three-year statute of
limitations for rescission under TILA had not run.
Subject to exceptions not applicable here, the
right of rescission under TILA expires not later than “three years after the
date of consummation of the transaction . . . .” (15 U.S.C. § 1635(f).) Gardner argues that HSBC, not Fremont, was the
actual lender, and therefore the statute did not start to run until she
discovered that HSBC was the lender.
According to her own complaint, however, Fremont was the original
lender; later, HSBC purchased the loan from Fremont. Accordingly, the “transaction” was “consummat[ed]”
in 2005, and the three-year statute ran in 2008, before this action was filed
in 2009.
Gardner also argues that, under Code of Civil
Procedure section 339, a cause of action does not accrue until the aggrieved
party discovers the loss or damage. This
statute applies to certain causes of action under state law. It does not apply to a cause of action under
a federal statute such as TILA.
The limitations period for rescission under TILA,
by its terms, applies “notwithstanding the fact that the information and forms
required under this section or any other disclosures required under this part
have not been delivered to the obligor . . . .” (15 U.S.C. § 1635(f).) The statute sets “a fixed, statutory cutoff
date . . . independent of any variable such as the claimant’s
awareness of a violation, and not subject to equitable tolling. [Citation.]”
(Chabot v. Wash. Mut. Bank (
B.R. 1, 15; accord, Dixon v. Countrywide
Home Loans, Inc. (S.D. Fla. 2010) 710 F.Supp.2d 1325, 1333-1334;
2011) 810 F.Supp.2d 1125, 1136.)
Finally, even assuming that some sort of
discovery rule applied, the complaint does not actually allege that Gardner was
unaware of the factual basis of her TILA claim.
That alleged factual basis was that Fremont had not provided her with
certain required disclosures. It is hard
to see how she could allege, in good faith, that she did not know that she had not
received these. Admittedly, until the
forensic loan audit in 2009, she may not have realized that this was a TILA
violation. Under both state and federal
law, however, while ignorance of the facts may give rise to equitable tolling,
ignorance of the law does not. (E.g.
Reservation, Wyo. v. U.S. (Fed.Cir. 2012) ___ F.3d. ___, ___ [2012 U.S.App.
LEXIS 378, *21] Gutierrez v. Mofid
(1985) 39 Cal.3d 892, 897-898.)
V
HSBC’S LIABILITY
Gardner contends that HSBC is just as liable as
Fremont.
In its demurrer to the first amended complaint, HSBC argued that it could not be held
liable on the predatory lending and nondisclosure causes of action because —
unlike Fremont — it was not the original lender. The trial court, however, sustained that
demurrer to these causes of action with
leave to amend.
By contrast, in its demurrer to the
between it and Fremont. Rather, it
successor in interest. Gardner does not
address any of HSBC’s actual
arguments (aside from arguing that the TILA statute of limitations had not run;
see part IV, ante); she does not
argue that the trial court erred by sustaining Fremont’s demurrer.
Accordingly, she has not established that the trial court erred by
sustaining HSBC’s demurrer.
VI
REPLY BRIEF
Gardner raises several additional contentions in
her reply brief.
“We will not consider arguments raised for the
first time in a reply brief . . . . [Citations.]”
(Mansur v. Ford Motor Co.
(2011) 197 Cal.App.4th 1365, 1387-1388 [Fourth Dist., Div. Two].) “‘“Obvious considerations of fairness in
argument demand that the appellant present all of his points in the opening
brief. To withhold a point until the
closing brief would deprive the respondent of his opportunity to answer it or
require the effort and delay of an additional brief by permission. Hence the rule is that points raised in the
reply brief for the first time will not be considered, unless good reason is
shown for failure to present them before. . . .
[Citations.]”’ [Citation.]” (Doe v.
California Dept. of Justice (2009) 173 Cal.App.4th 1095, 1115.)
Separately and alternatively, we also reject each
of these contentions on the merits.
First, Gardner argues that the transfer to HSBC
was not disclosed to her. However, there
is no such allegation in the complaint.
Even if the complaint were amended to include such an allegation, it
does not appear that it would state a cause of action. Gardner provides no legal analysis to explain
how this alleged fact is relevant.
“‘[E]very brief should contain a legal argument with citation of
authorities on the points made. If none
is furnished on a particular point, the court may treat it as waived, and pass
it without consideration.
[Citations.]’ [Citations.]” (People
v. Stanley (1995) 10 Cal.4th 764, 793.)
Second, Gardner argues that Civil Code section
2948.5 was violated. She seems to think
it requires a lender to give the borrower a statement of per diem interest
home. Not so. In general, this statute provides that,
ordinarily, a lender cannot collect interest before close of escrow. (Civ. Code, § 2948.5, subd. (a).) However, if the borrower affirmatively
requests that escrow close on a Monday, then the lender can start collecting
interest on the previous Friday, provided the lender has already given the
borrower a written statement of specified matters, including the
subd. (b).)
Defendants demurred to this claim on the ground
that Gardner had not alleged sufficient facts.
They were correct. “[O]n demurrer
a court does not accept as true contentions, deductions or conclusions of law. [Citation.]”
(American States Ins. Co. v.
National Fire Ins. Co. of Hartford (2011) 202 Cal.App.4th 692, 703,
fn. 5.) Gardner does not allege
violated. She does not state that she
was charged any interest prior to close of escrow or that the escrow closed on
a Monday.
Third, Gardner complains about a payment of
$89,600 that she supposedly made to Fremont in February 2006 to pay off the
second mortgage. She claims that Fremont
promised that, if she paid off the second, it would refinance the first. She argues that this constituted a breach of
an oral contract, as well as fraud. The complaint itself, however, contains no
such allegation.
title="">[6]
Gardner has not shown that, even if given leave
to amend, she could state either cause of action. First, she has not shown that she could
allege fraud with the required specificity.
(See Lazar v. Superior Court
(1996) 12 Cal.4th 631, 645 [fraud claim against corporation must “‘allege the
names of the persons who made the allegedly fraudulent representations, their
authority to speak, to whom they spoke, what they said or wrote, and when it
was said or written’”].) Second, she has
not shown that a breach of contract cause of action is not time-barred. She admits that she was aware of the supposed
breach of contract by March 2007.
Accordingly, by the time she filed her original complaint, in December
2009, the two-year statute of limitations for actions on an oral contract had
run. (Code Civ. Proc., § 339, subd.
1.)
VII
DISPOSITION
The judgment is affirmed. In the interests of justice, each side shall
bear its own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RICHLI
J.
We
concur:
HOLLENHORST
Acting P.J.
MILLER
J.
the operative complaint, without leave to amend. Judge Malone entered the resulting judgments
of dismissal.
Affiliates (Quality) had filed a declaration asserting that it was sued solely
in its capacity as trustee under a deed of trust. (See Civ. Code., § 2924
the declaration. (See
participate further in the proceeding.
(See id., subd. (d).)
