Pedery-Edwards v.
JP Morgan Chase Bank
Filed 1/28/14 Pedery-Edwards v. JP Morgan Chase Bank CA4/1
NOT
TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been
certified for publication or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JUDITH
PEDERY-EDWARDS,
Plaintiff and Appellant,
v.
JP MORGAN CHASE
BANK, N.A. et al.,
Defendants and Respondents.
D063307
(Super. Ct. No.
37-2011-00056415-CU-OR-NC)
APPEAL
from a judgment of the Superior Court of
San Diego County, Jacqueline M. Stern, Judge. Affirmed.
Judith
Pedery-Edwards, in pro. per., for Plaintiff and Appellant.
Bryan Cave LLP,
Samantha M. Dillon and Sean D. Muntz for Defendants and Respondents.
I.
INTRODUCTION
Appellant Judith Pedery-Edwards
appeals from a judgment entered in favor of defendants JP Morgan Chase Bank,
N.A. (Chase) and the Federal National Mortgage
Association (Fannie Mae) after the trial court sustained the defendants' general
demurrer to her second amended complaint, without leave to amend.
On appeal,
Pedery-Edwards, appearing in propria persona,
asserts that the trial court erred in concluding that her second amended
complaint fails to state any cause of action.
After reviewing the operative complaint
and considering the parties' arguments on appeal, we conclude that the trial
court properly sustained the defendants' general demurrer to the second amended
complaint. We further conclude that the
trial court did not abuse its discretion in denying
dismissing the action in its entirety.
We therefore affirm the judgment.
II.
FACTUAL
AND PROCEDURAL BACKGROUND
Pedery-Edwards
obtained a loan in the amount of $417,000 from Washington Mutual Bank, F.A.
(Washington Mutual) in 2007.
The
loan was secured by a deed of trust encumbering property located in Encinitas, California. The
Washington Mutual as the beneficiary and California Reconveyance Company as
trustee.
Pedery-Edwards
defaulted on the loan, and Chase, which acquired Pedery-Edwards's mortgage from
Washington Mutual in September 2008, foreclosed on the property that secured
the loan in 2010.
title="">[1] A
trustee's sale of the property took place on December 22, 2010.
Pedery-Edwards
filed her initial complaint in July 2011, naming Chase, Washington Mutual,
and Fannie Mae as defendants. Three
months later, Pedery-Edwards amended the complaint to name only Chase and
Fannie Mae as defendants. The first amended
complaint (FAC) alleged 21 causes of action.
In
response to the FAC, Chase and Fannie Mae removed the case to a federal
district court and sought dismissal of the action for failure to state a
claim. The federal district court
dismissed with prejudice Pedery-Edwards's claims for violations of the Fair
Debt Collection Practices Act, the Fair Credit Reporting Act, and the
Gramm-Leach-Bliley Act, as well as her request for declaratory relief. The district court granted Pedery-Edwards
leave to amend with respect to the remaining causes of action.
Pedery-Edwards
filed a second amended complaint (SAC) in the federal district court, alleging 12
causes of action (see fn. 8, post). In that pleading, Pedery-Edwards alleged no federal
causes of action. As a result, the
federal district court remanded the matter to the superior court.
In
the superior court, the defendants demurred to the SAC. The trial court sustained the demurrer without
leave to amend and dismissed Pedery-Edwards's action. Pedery-Edwards filed a timely notice of
appeal.
III.
DISCUSSION
A.
We review de
novo an order sustaining a demurrer to determine whether the complaint alleges
facts sufficient to state a cause of action.
(CPF Agency Corp. v. Sevel's 24
Hour Towing Service (2005) 132 Cal.App.4th 1034, 1042.) We exercise our independent judgment as to
whether the complaint states a cause of action.
(Palestini v. General Dynamics
Corp. (2002) 99 Cal.App.4th 80, 86.)
" 'A judgment of dismissal after a demurrer has been sustained
without leave to amend will be affirmed if proper on any grounds stated in the
demurrer, whether or not the court acted on that ground.' [Citation.]" (Gomes
v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1153 (
When a demurrer
is sustained without leave to amend, "we decide whether there is a
reasonable possibility that the defect can be cured by amendment: if it can be,
the trial court has abused its discretion and we reverse; if not, there has
been no abuse of discretion and we affirm.
[Citations.] The burden of proving
such reasonable possibility is squarely on the plaintiff." (Blank
v. Kirwan (1985) 39 Cal.3d 311, 318.)
B. Analysis
1. First
cause of action for "injunctive relief"
Pedery-Edwards's
first cause of action is one for "injunctive relief." Although Pedery-Edwards appears to be
contending that a trustee's sale that occurred was "wrongful" and should
be "nullified and/or Voided," she does not identify a legal claim on
which her request for injunctive relief is based. "Injunctive relief is a remedy, not a
cause of action." (
Transportation (1994) 29 Cal.App.4th 1280, 1293.) Thus, absent an underlying cause of action, a
request for injunctive relief does not constitute a cause of action itself, and
cannot be the basis for relief. The
trial court properly sustained the defendants' demurrer to the first "cause
of action."
2. Second
cause of action for an "accounting"
Pedery-Edwards
attempts to assert a "Demand for an Accounting" as her second cause
of action. This "cause of action"
suffers from the same problem as the first: an accounting is not, itself, an
independent cause of action, but rather, is a remedy. (See Duggal
v. G.E. Capital Communications Services, Inc. (2000) 81 Cal.App.4th 81, 95
["The right to an accounting is derivative and depends on the validity of
a plaintiff's underlying claims"].)
For this reason, the trial court properly sustained the defendants'
demurrer to the second cause of action.
Further, to the extent that Pedery-Edwards's request for an accounting can
be construed to be based on a separate, underlying claim, such a request also
fails because the right to the remedy of an accounting requires a showing that
some "balance is due the plaintiff."
(Teselle v. McLoughlin (2009)
173 Cal.App.4th 156, 179.)
Pedery-Edwards does not allege that she is owed any money by the
defendants. Her request for an
accounting fails for this reason, as well.
3. Third
cause of action for "Lack of Standing/Wrongful Foreclosure"
In
her third cause of action, Pedery-Edwards alleges that the defendants lacked
standing to foreclose on the property.
She contends that "Defendant Federal National Mortgage Association
has never had a business relationship with Plaintiff(s), and Plaintiff did not
execute the Note or Deed in favor of any defendants." The gist of Pedery-Edwards's claim is that
the defendants failed to establish that either of them is a proper party
entitled to institute foreclosure proceedings on the property. More specifically, Pedery-Edwards contends
that neither of the defendants was entitled to foreclose on the property
because one of them held only a deed of trust on the property, and had not
demonstrated that it possessed the original promissory note secured by that
deed of trust, and the other had no "valid, legal interest in the
indebtedness, and upon information and belief . . . is not
the lender, servicer or assignee with rights to collect."
However,
California law does not require that a party instituting nonjudicial
foreclosure proceedings on real property possess the original promissory note
on which the foreclosure is based. (
(2012) 204 Cal.App.4th 433, 439.) Nor is
it of any consequence that an assignment of a promissory note has not been
recorded. (See Fontenot v. Wells Fargo Bank ,
N.A. (2011) 198 Cal.App.4th 256, 272 (Fontenot).) In addition, a plaintiff does not properly
allege a cause of action for lack of standing to foreclose by merely alleging
that his original promissory note has been sold in the secondary market. (Gomes,
supra, 192 Cal.App.4th at pp. 1152, 1155; Robinson v. Countrywide Home Loans, Inc. (2011) 199 Cal.App.4th 42,
45 (Robinson) [affirming order
sustaining demurrer without leave to amend for wrongful initiation of
foreclosure based on allegation that "promissory note was 'sold and resold'
on the secondary mortgage market, and that as a result, it had become difficult
or impossible to ascertain the actual owner of the beneficial interest in the
note"].) Although Pedery-Edwards's
promissory note was not sold in the secondary market as contemplated by
the P&A Agreement between the FDIC and Chase in which Chase purchased
substantially all of Washington Mutual's assets.
The
SAC also contains an allegation that there "does not exist a valid
assignment of the Deed of Trust from Judith Pedery-Edwards to any defendant
recorded with the San Diego County Recorder's Office. " "The theory that a foreclosure was
wrongful because it was initiated by a nonholder of the deed of trust has also
been phrased as (1) the foreclosing party lacking standing to foreclose or (2)
the chain of title relied upon by the foreclosing party containing breaks or
defects." (Glaski v. Bank of
Court have recognized the existence of a cause of action for wrongful
foreclosure where a party alleged not to be the true beneficiary of the deed of
trust instructs the trustee to initiate a nonjudicial foreclosure. (Id.
at p. 1094.) However, in order to
properly allege a cause of action under this theory of wrongful foreclosure, a
plaintiff must do more than "simply stat[e] that the defendant who invoked
the power of sale was not the true beneficiary under the deed of trust. Rather, a plaintiff asserting this theory
must allege facts that show the defendant who invoked the power of sale was not
the true beneficiary." (
1495, 1506 (Herrera) ["plaintiff
failed to plead specific facts demonstrating the transfer of the note and deed
of trust were invalid"].)
By
alleging only that she "did not execute the Note or Deed in favor of any
defendants" and further alleging, without factual specificity, that no
valid assignment of the deed of trust was recorded, Pedery-Edwards's
allegations in the SAC are insufficient to demonstrate that Chase is not the
true beneficiary of the deed of trust.
In addition, Pedery-Edwards concedes that in late September 2008,
Washington Mutual surrendered its interest in the property to the FDIC. Although Pedery-Edwards claims that the
property "was never properly transferred through the FDIC to any 3rd
party," the record demonstrates that Chase purchased virtually all of
Washington Mutual's assets from the FDIC in September 2008. In the
absence of any specific factual allegations that would demonstrate that Chase
is not the true beneficiary of the deed of trust, the SAC fails to properly
plead a cause of action for wrongful foreclosure under the theory that Chase
lacked standing to foreclose.
To
the extent that Pedery-Edwards attempts to undermine the nonjudicial
foreclosure based on allegations in the SAC questioning whether the "Substitution
of Trustee" document identifying Quality Loan Service Corporation as the
new trustee under the deed of trust was "robo-signed," this effort is
also fruitless. Specifically,
Pedery-Edwards fails to allege any facts showing that she suffered prejudice as
a result of any lack of authority on the part of the parties that participated in
the foreclosure process. Pedery-Edwards
does not claim that the foreclosure documents were fraudulent or contained
false information, but merely that they may have been "robo-signed,"
and she concedes that she was in default on the loan. Pedery-Edwards also does not deny that she
received notice of the default and notice of the foreclosure sale. Based on these concessions, any alleged
irregularities in the signing process regarding the "Substitution of
Trustee" form could not have prejudiced her: "Prejudice is not presumed from 'mere
irregularities' in the process. [Citation.]
Even if MERS lacked authority to transfer the note, it is difficult to
conceive how plaintiff was prejudiced by MERS's purported assignment, and there
is no allegation to this effect. Because
a promissory note is a negotiable instrument, a borrower must anticipate it can
and might be transferred to another creditor. As to plaintiff, an assignment merely substituted one creditor for another, without
changing her obligations under the note." (Fontenot,
supra, 198 Cal.App.4th at p. 272,
italics added; see also Herrera,
[plaintiff could not show prejudice, "even assuming there were procedural
defects in the assignment of the DOT from MERS to OneWest and the substitution
of trustee," and thus had failed to establish that amendment could cure
defects in pleading]; Siliga v. Mortgage
Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 85 [borrowers
lacked standing to complain about loan servicer's and assignee's alleged lack
of authority to foreclose on deed of trust where borrowers were in default
under the note, absent evidence that the original lender would have refrained
from foreclosure].)
The trial court's
sustaining of the defendants' demurrer to Pedery-Edwards's third alleged cause
of action for "lack of standing/wrongful foreclosure" was thus proper.
4. Fourth
cause of action for alleged violations of Civil Code
Pedery-Edwards's
fourth cause of action is titled "California Civil Code Section 2923.6 and
2932.5."
During
the relevant time period, section 2923.6 provided, inter alia: "It is the
intent of the Legislature that the mortgagee, beneficiary, or authorized agent
offer the borrower a loan modification or workout plan if such a modification
or plan is consistent with its contractual or other authority." (§ 2923.6, former subd. (b), amended by
Stats. 2012, ch. 86.)
name="_ftnref5" title="">[5] The statute also provided:
"The Legislature finds and
declares that any duty that mortgage servicers may have to maximize net present
value under their pooling and servicing agreements is owed to all parties in a
loan pool, or to all investors under a pooling and servicing agreement, not to
any particular party in the loan pool or investor under a pooling and servicing
agreement, and that a mortgage servicer acts in the best interests of all
parties to the loan pool or investors in the pooling and servicing agreement if
it agrees to or implements a loan modification or workout plan for which both
of the following apply:
"(1) The loan is in payment
default, or payment default is reasonably foreseeable.
"(2) Anticipated recovery under
the loan modification or workout plan exceeds the anticipated recovery through
foreclosure on a net present value basis."
(§ 2923.6, subd. (a).)
Pedery-Edwards
alleges in the SAC that her loan is "presently in default and/or default
is reasonably anticipated," and further alleges that "anticipated
recovery through a loan modification is [in] excess of the recovery through
foreclosure on a net present value." Pedery-Edwards also asserts that she is "ready
and willing to enter into a loan modification."
However,
at the relevant time, section 2923.6 did not create a private right of action and
did not require that loan servicers modify loans. (See Intengan
v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1056 ["But . . . section
2923.6 does not grant a right to a loan modification"]; see also
Cal.App.4th 208, 222 ["Section 2923.6 merely expresses the
modifications on certain terms"] and Hamilton
v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1617 ["There
is no 'duty' under . . . section 2923.6 to agree to a loan
modification"].) As a result,
Pedery-Edwards does not have a private right of action against the defendants
under section 2923.6.
Further,
section 2932.5, which requires the recording of the assignment of a beneficiary
interest in a mortgage, does not apply where the power of sale is conferred via
a deed of trust. (Calvo v. HSBC Bank
Pedery-Edwards's loan was secured by a deed of trust; thus, section
2932.5 simply does not apply. The trial
court therefore properly determined that Pedery-Edwards failed to state a cause
of action for a violation of this statutory provision, and its sustaining of
the defendants' demurrer to the fourth alleged cause of action was therefore proper.
5. Fifth cause of action
for alleged violation of section 1770 and Business and Professions Code section
17200
In her fifth cause of action,
Pedery-Edwards alleges violations of two separate statutes: section 1770,
otherwise known as the Consumer Legal Remedies Act (CLRA) (§ 1750 et seq.),
and Business and Professions Code section 17200, otherwise known as the Unfair
Competition Law (UCL).
a. The
CLRA claim
The CLRA
prohibits " 'unfair methods of competition and unfair or deceptive acts or
practices' in transactions for the sale or lease of goods to consumers." (Daugherty
v. Am. Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 833.) Section 1770, subdivision (a) begins, "The
following unfair methods of competition and unfair or deceptive acts or
practices undertaken by any person in a transaction intended to result or which
results in the sale or lease of goods or services are
unlawful . . . ."
The statute then enumerates the 25 specific "methods of competition"
and "acts or practices" that are made unlawful.
Pedery-Edwards's
SAC alleges, without any specific factual allegations, that the defendants
violated subdivision (a)(14) and (a)(16)-(a)(19) of section 1770.
By its terms,
the CLRA applies to transactions that result in the "sale or lease of
subd. (a), italics added.) The CLRA
defines "goods" as "tangible chattels bought or leased for use
primarily for personal, family, or household
purposes, . . . including goods which, at the time of the
sale or subsequently, are to be so affixed to real property as to become part
of real property, whether or not severable [therefrom]," and defines "services"
as "work, labor, and services for other than a commercial or business use,
including services furnished in connection with the sale or repair of goods."
(§ 1761, subds. (a), (b).) The CLRA does not apply to transactions
resulting in the sale or lease of real estate.
(McKell v. Washington Mutual, Inc.
(2006) 142 Cal.App.4th 1457, 1488.)
b. The
UCL claim
Pedery-Edwards's
only reference to the UCL in the SAC is the following, which she alleges
immediately after her recitation of subdivision (a)(14) and (a)(16)-(19) of
section 1770: "And the Defendants
and each of them thereby and by the violation of other regulations and rules
and statutes and by engaging in the above listed unfair practices violated: . . . Business
and Professions Code section 17200 et seq[.]" It thus appears from the complaint that
Pedery-Edwards is relying on the alleged violations of section 1770 as the
basis for the violations of the UCL that, pursuant to a broad reading of the
SAC, she may be independently alleging.
"The UCL
defines 'unfair competition' as 'any unlawful, unfair or fraudulent business
act or practice and unfair, deceptive, untrue or misleading advertising.' " (Zhang
v. Superior Court (2013) 57 Cal.4th 364, 370 (Zhang), quoting Bus. & Prof. Code, § 17200.) "By proscribing 'any unlawful' business
act or practice [citation], the UCL ' "borrows" ' rules set out
in other laws and makes violations of those rules independently actionable." (Zhang,
supra, at p. 370.) "However, a practice may violate the UCL
even if it is not prohibited by another statute. Unfair and fraudulent practices are alternate
grounds for relief. [Citation.] False advertising is included in the 'fraudulent'
category of prohibited practices."
(Ibid.)
Based on
Pedery-Edwards's SAC, it appears that she seeks to "borrow" the rules
set out in section 1770, subdivision (a) to assert additional, independent
violations of the UCL.
name="_ftnref7" title="">[7] However, as we have explained, Pedery-Edwards
has not stated a claim under the CLRA for the alleged violations because she is
alleging that the defendants' illegal conduct occurred with respect to a real
estate transaction, as opposed to the sale or lease of goods or services. As a result, the allegations of violations of
the UCL in the SAC that are based on the alleged violations of the CLRA are
insufficient to state a viable claim under the UCL.
The trial court
thus properly sustained the defendants' demurrer to Pedery-Edwards's fifth
cause of action.
6. Sixth
cause of action for deceptive practices/fraud
Pedery-Edwards's
sixth
Practices, Common Law Fraud," and in it she alleges that the defendants "have
engaged in a course of conduct that is deceptive and inappropriate." The elements of a fraud cause of action are
(1) misrepresentation, (2) knowledge of the falsity or scienter, (3) intent to
defraud, i.e., induce reliance, (4) justifiable reliance, and (5) resulting
damages. (Lazar v. Superior Court
(1996) 12 Cal.4th 631, 638.) These
elements may not be pled in a general or conclusory fashion, but, rather, must
be pled specifically—that is, a plaintiff must plead facts that show with
particularity the elements of the cause of action. (Id.
at p. 645.)
Pedery-Edwards's
SAC does not plead facts to support a claim for fraud. Specifically, she does not identify a single
false statement made, nor does she claim that she relied on any allegedly false
statements or that she was damaged by any such statements. There are simply insufficient pleaded facts
to make out a claim for fraud. The trial
court thus properly sustained the demurrer as to this cause of action.
7. Seventh
cause of action for defamation
Pedery-Edwards's seventh cause of action is for
defamation. She contends that the "filing
of the Notice of Default" was "libelous." Specifically, Pedery-Edwards alleges that the
notice "in effect called plaintiff too poor to pay her bills, dishonest, a
deadbeat," and therefore, that the statements in the notice were "per
se defamatory."
"The
tort of defamation 'involves (a) a publication that is (b) false, (c)
defamatory, and (d) unprivileged, and that (e) has a natural tendency to injure
or that causes special damage.'
[Citations.]" (
720.)
The
"mailing, publication and delivery of notices" required pursuant to
section 2924 constitute "privileged communications pursuant to section 47." (§ 2924, subd. (d)(1).) "The privileges
of . . . section 47, unlike evidentiary privileges which
function by the exclusion of evidence . . . , operate as
limitations upon liability . . . . The assertion of the privilege as a defense
is thus a direct challenge to liability."
(Block v. Sacramento Clinical
Labs, Inc. (1982) 131 Cal.App.3d 386, 389.)
"The privilege created by . . . section 47,
though part of the statutory law dealing with defamation, has evolved through
case law application into a rather broad protective device which attaches to
various classes of persons and applies to types of publications and in types of
actions not traditionally identified with the field of defamation." (Rosenthal
v. Irell & Manella (1982) 135 Cal.App.3d 121, 125.)
"[S]ection
2924 deems the statutorily required mailing, publication, and delivery of
notices in nonjudicial foreclosure, and the performance of statutory
nonjudicial foreclosure procedures, to be privileged communications under the
qualified common interest privilege of section 47, subdivision (c)(1)." (Kachlon
v. Markowitz (2008) 168 Cal.App.4th 316, 325.) Thus, a plaintiff must demonstrate that a
defendant acting pursuant to these provisions acted with malice. (Id.
at pp. 333-334, 343.)
The
notice of default at issue in this case was made in conformance with the
statutory nonjudicial foreclosure procedures pursuant to section 2924. As a result, Pedery-Edwards would have to
establish that the defendants acted maliciously in order to state a claim for
defamation. She has not alleged
sufficient facts to support this element of the claim. Further, Pedery-Edwards fails to demonstrate
that she had not, in fact, defaulted on her loan. In fact, in other allegations of the SAC,
Pedery-Edwards concedes that she was in default. Thus, Pedery-Edwards has not alleged that the
notice of default was false. The trial
court therefore properly sustained the defendants' demurrer with respect to
this cause of action.
8. Eighth
cause of action for negligent infliction of emotional distress
Pedery-Edwards's
eighth cause of action attempts to assert a claim for negligent infliction of
emotional distress. "Negligent
infliction of emotional distress is not an independent tort; it is the tort of
negligence to which the traditional elements of duty, breach of duty,
causation, and damages apply." (
97 Cal.App.4th 120, 126.) Generally, no
fiduciary duty exists between a borrower and lender in an arm's length
transaction. (Oaks Management Corporation v. Superior Court (2006) 145
Cal.App.4th 453, 466; Union Bank v.
Superior Court (1995) 31 Cal.App.4th 573, 579.) "[A]s a general rule, a financial
institution owes no duty of care to a borrower when the institution's involvement
in the loan transaction does not exceed the scope of its conventional role as a
mere lender of money." (
Assn. (1991) 231 Cal.App.3d 1089, 1096.)
Pedery-Edwards
has not pled facts to establish that the defendants owed her any particular
duty of care, or that such duty was breached.
The trial court thus properly sustained the demurrer as to this cause of
action.
9. Ninth
cause of action for intentional infliction of emotional distress
The
ninth cause of action that Pedery-Edwards attempts to assert is one for
intentional infliction of emotional distress.
The elements of a cause of action for intentional infliction of
emotional distress are "that (1) the defendant engaged in extreme and
outrageous conduct with the intention of causing, or reckless disregard of the
probability of causing, severe emotional distress to the plaintiff; (2) the
plaintiff actually suffered severe or extreme emotional distress; and (3) the
outrageous conduct was the actual and proximate cause of the emotional
distress." (Ross v. Creel Printing & Publishing Co., Inc. (2002) 100
Cal.App.4th 736, 744-745 (Ross).) "To be outrageous, conduct must be 'so
extreme as to exceed all bounds of that usually tolerated in a civilized
community.' [Citation.]" (Id.
at p. 745.)
Pedery-Edwards
has not pled any allegations of conduct by defendants that could be considered "outrageous"
under the applicable test.
Pedery-Edwards asserts that the "outrageous" conduct on the
part of defendants is the "wrongful threatening of and then taking of
plaintiffs' [sic] home," and that the "modification and collection
practices, representations and repetition were designed to force Plaintiff into
surrendering her rights due to inability to take the pressure from the defendants." However, the specific factual allegations of
the SAC as to the conduct of various of the defendants' employees demonstrate
that Pedery-Edwards stopped making payments on her loan, and that the defendants'
employees thereafter failed to assist her in modifying her loan. These facts, even if true, are not " 'so
extreme as to exceed all bound of that usually tolerated in a civilized
community.' [Citation.]" (Ross,
supra, 100 Cal.App.4th at p.
745.) This was a creditor/debtor
situation where the defendants ultimately exercised their rights under the loan
agreement. There are no allegations that
in conducting the nonjudicial foreclosure proceedings, or in dealing with
Pedery-Edwards generally, any of the defendants threatened, insulted, abused or
humiliated her. Pedery-Edwards thus failed
to state a claim for intentional infliction of emotional distress, and the
trial court properly sustained the demurrer as to this cause of action.
10.
estoppel
The
tenth cause of action in the SAC is one for promissory estoppel. Pedery-Edwards alleges: "Defendant Chase
made a promise to the Plaintiff which was calculated and reasonably expected to
induce Plaintiff to forbear from making payments and or seeking professional
assistance in rectifying her mortgage situation. Plaintiff in relying on the future and
contemporary good faith and fair dealing of the defendant and the
straightforward promise made by defendants did in fact forbear and in fact did
act to her detriment in completing questionnaires and providing numerous
private facts regarding Plaintiff."
In attempting to make out this cause of action, Pedery-Edwards references
two letters from Chase that she contends indicate that there was an agreement
between the Chase and Pedery-Edwards to the effect that "no further
collection/foreclosure action would take place," and that in spite of this
agreement, Chase moved forward with its foreclosure.
"In
California, under the doctrine of promissory estoppel, '[a] promise which the
promisor should reasonably expect to induce action or forbearance on the part
of the promisee or a third person and which does induce such action or
forbearance is binding if injustice can be avoided only by enforcement of the
promise. The remedy granted for breach
may be limited as justice requires.'
[Citations.] Promissory estoppel
is 'a doctrine which employs equitable principles to satisfy the requirement
that consideration must be given in exchange for the promise sought to be
enforced.' [Citation.]" (Kajima/Ray
Wilson v.
Transportation Authority (2000) 23 Cal.4th 305,
310.) " '[A] promise is an indispensable element of the doctrine of
promissory estoppel. The cases are
uniform in holding that this doctrine cannot be invoked and must be held
inapplicable in the absence of a showing that a promise had been made upon
which the complaining party relied to his prejudice . . . .' [Citation.]
The promise must, in addition, be 'clear and unambiguous in its terms.' [Citation.]" (Garcia
v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.)
Although
Pedery-Edwards alleges in this cause of action that one or both of the
defendants "made a promise to the Plaintiff . . . to
induce" her to stop paying her mortgage or not to seek "professional
assistance in rectifying her mortgage situation," she does not identify a
promise that was made to her by defendants in exchange for her nonpayment
and/or not seeking additional assistance.
At other points in the SAC, Pedery-Edwards alleges that she "was
repeatedly told that no modification process would be available until and
unless [she] was in default of [her] loan and stopped paying the mortgage." These statements, however, do not constitute
a promise that a loan modification would occur if Pedery-Edwards stopped paying
on her loan. Rather, these are statements
that she would not be eligible to be considered for a loan modification unless she
had already defaulted on a loan.
Pedery-Edwards's
references to the two letters attached to the SAC also fail to establish the
existence of a promise made by either of the defendants. The first letter is attached as Exhibit H to
the SAC, and begins, "WE ARE A DEBT COLLECTOR. THIS IS AN ATTEMPT TO COLLECT A DEBT, AND ANY
INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE." The letter is "signed" by "CUSTOMER
SERVICE [¶] Loss Mitigation Department [¶] Chase," and informs
Pedery-Edwards that she "ha[s] been approved for a Special Forbearance
Agreement, which provides temporary relief from [her] loan payments." The letter informs Pedery-Edwards that Chase
must receive a signed copy of the agreement from her by "05/01/10" in order to implement the agreement. The "Special Forbearance Agreement"
attached to the letter states, in relevant part:
"The period of forbearance will be
from 05/01/10 to 07/01/10. The period of forbearance
will be in effect once the signed Special [F]orbearance Agreement ('Agreement')
is received in our office, and must be received no later than 05/01/10.
"If you provide us with updated
financial information before this agreement expires, we will reevaluate your
application for assistance and determine if we are able to offer you a
permanent workout solution to bring your loan to a current status. If you do not send the updated financial
information by the expiration date of this agreement, we will release your loan
back into normal servicing (collections and/or foreclosure)."
The
"Special Forebearance Agreement" attached to the SAC is unsigned. Further, Pedery-Edwards does not allege in
the SAC that she complied with its terms.
However, even assuming that Pedery-Edwards signed and returned the
agreement and complied with the terms, the letter does not promise anything
other than that Chase would permit Pedery-Edwards to avoid payment on her loan
between May 1, 2010 and July 1, 2010, and that if she were to send additional
financial information, it would reevaluate her application for a loan
modification. Pedery-Edwards does not
allege that these promises caused her to forbear from doing something or to act
to her detriment, nor does she allege that Chase failed to follow through with the
"promises" in this letter.
Finally,
the SAC also refers to a letter from Chase seeking additional documents in
order for Pedery-Edwards to be considered for a "Trial Period Plan." The letter informs Pedery-Edwards that if
Chase does not receive the identified documents within 15 days of the date of
the letter, Chase will assume that she was withdrawing her request for a modification
and would cancel her application. In the
SAC, Pedery-Edwards alleges that this letter "explain[ed] that if the
private information was again supplied that no further collection/foreclosure
action would take place." However,
the letter itself contradicts this allegation since it does not make any
promises regarding what might occur with respect to the property.
Because
the SAC fails to identify any promise that was made by the defendants that
could support the relief that Pedery-Edwards requests based on her theory of
promissory estoppel, the trial court properly sustained the defendants'
demurrer to the tenth identified cause of action.
11. Eleventh
cause of action for breach of the implied covenant of good faith and fair
dealing
In
her eleventh cause of action, Pedery-Edwards alleges that there are three
relevant contracts at issue, which she identifies as: "The note. The deed.
The agreement to work toward a modification." She further alleges that each of these
contracts includes an implied covenant of good faith and fair dealing, and that
the defendants breached this implied covenant by their conduct as alleged in "paragraphs
6 through 74" of the SAC.
Paragraphs 6 through 74 of the SAC detail Pedery-Edwards's allegations concerning
the events that led up to the trustee's sale of her property.
"The
covenant of good faith and fair dealing is imposed upon each party to a
contract. [Citation.] This fundamental covenant prevents the
contracting parties from taking actions that will deprive another party of the
benefits of the agreement. [Citation.]
The covenant also requires each party to do everything the contract presupposes
the party will do to accomplish the agreement's purposes." (Jenkins
v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 524 (
" 'It is
universally recognized the scope of conduct prohibited by the covenant of good
faith is circumscribed by the purposes and express terms of the contract.' [Citation.]
'Because contracts differ, the nature and extent of the duties owed
under the implied covenant are also variable and "will depend on the
contractual purposes." [Citation.]' [Citation.] Thus, it is well settled the implied covenant
does not extend so far as to impose enforceable duties that are beyond the
scope of the contract, nor does the covenant prohibit actions that are
expressly authorized by the contract's terms." (Jenkins,
supra, 216 Cal.App.4th at pp.
524-525.)
"A
party's breach of the implied covenant of good faith and fair dealing gives
rise to a contract claim. " (
prerequisite for any action for breach of the implied covenant of good faith
and fair dealing is the existence of a contractual relationship between the
parties, since the covenant is an implied term in the contract.' [Citation.]
'Without a contractual underpinning, there is no independent claim for
breach of the implied covenant.' [Citation.]" (Ibid.)
Although
Pedery-Edwards purports to identify three "contracts" that form the
basis of her claim for breach of the implied covenant of good faith and fair
dealing, she fails to include a written copy of any of these contracts or even to
allege the terms of these contracts.
" 'the scope of conduct prohibited by the covenant of good faith is
circumscribed by the purposes and express
terms of the contract ' [citation]" (Jenkins, supra, 216
Cal.App.4th at p. 524, italics added), it is impossible to assess whether a
party has breached the implied covenant of good faith and fair dealing with
respect to a contract where the party alleging breach fails to allege the terms
of the underlying contract. Given the
absence of any allegations regarding the terms of the contracts on which
Pedery-Edwards relies, the SAC fails to state a claim for breach of the implied
covenant of good faith and fair dealing based on the identified contracts. The trial court thus properly sustained the
defendants' demurrer to the eleventh cause of action for breach of the implied
covenant of good faith and fair dealing.
12. Twelfth
cause of action for invasion of privacy
Pedery-Edwards's
final claim involves a cause of action for invasion of privacy. A plaintiff asserting such a claim must
allege that she possessed a protected privacy interest, that she had a
reasonable expectation of privacy in the circumstances, and that the defendant
engaged in conduct constituting a serious invasion of privacy. (Hill
v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, 39-40.) Invasions of privacy "must be
sufficiently serious in their nature, scope, and actual or potential impact to
constitute an egregious breach of the social norms underlying the privacy
right." (Id. at p. 37.)
Pedery-Edwards
alleges that the defendants invaded her privacy by requesting the names,
addresses, and social security numbers of her children, and that the defendants
falsely represented that if Pedery-Edwards provided this information, her
children would be considered in "determining eligibility for a
modification." Pedery-Edwards fails
to allege that she provided this information, and thus, that anyone's privacy
was invaded by the request. Further,
Pedery-Edwards does not allege that defendants improperly obtained any of her
Pedery-Edwards
also alleges that the defendants invaded her privacy by "enter[ing] upon
her property and post[ing] 'Please call notices' on her front door." Such allegations simply do not constitute an "egregious
breach of the social norms underlying the privacy right" (
The
trial court properly sustained the defendants' demurrer to Pedery-Edwards's
twelfth cause of action.
13. The
demurrer was properly sustained without leave to amend
Pedery-Edwards
has attempted to properly plead a cause of action three times, with no success. Despite having been provided with the
opportunity to explain how she could cure the flaws in her SAC on appeal,
Pedery-Edwards has yet to articulate how she may be able to state a valid cause
of action against the defendants. Pedery-Edwards
has thus failed to meet her burden to demonstrate that the defects in her SAC
could be cured (see Blank, supra, 39
Cal.3d at p. 318 [burden of proving reasonable possibility of curing defects is
on the plaintiff]). We conclude that the
trial court did not abuse its discretion in sustaining Chase's demurrer without
leave to amend.
IV.
DISPOSITION
The judgment is
affirmed.
AARON,
J.
WE CONCUR:
BENKE, Acting P. J.
IRION,
J.
Mutual through the Federal Deposit Insurance Corporation (FDIC) in September
2008. According to documents that Chase
submitted to the trial court pursuant to an unopposed request for judicial
notice, the FDIC became the receiver of Washington Mutual in September 2010. As set forth in a purchase and assumption
agreement (P&A Agreement) between the FDIC and Chase dated September 25,
2008, the FDIC then sold to Chase "all of the assets" of Washington Mutual
(with specified exceptions not applicable here). There is a document in the record entitled
"Order regarding request for judicial notice in support of demurrer to
plaintiff's second amended complaint."
The text of the order attached to the cover page states that the trial
court sustained the defendants' demurrer without leave to amend and dismissed
the second amended complaint with prejudice, but does not mention the trial
court's ruling with respect to the request for judicial notice. However, given that (1) the request for
judicial notice was unopposed; (2) there was a hearing at which the trial court
might have granted the request for judicial notice by way of oral ruling, but
Pedery-Edwards failed to include the reporter's transcript of that hearing in
the record on appeal; (3) there is authority pursuant to which the taking of
judicial notice of this document would be proper (see Evid. Code, § 452,
subd.(h); see also Scott v. JPMorgan
Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 753 (Scott) [recognizing this provision of the Evid. Code as supporting
court's grant of judicial notice of the same P&A Agreement]); (4) numerous
other courts have taken judicial notice on a similar basis (see
approving of taking judicial notice of this P&A Agreement]); (5) the court
ultimately sustained the defendants' demurrer as to all of Pedery-Edwards's
causes of action; and (6) Pedery-Edwards does not challenge the validity of the
document or its presence in the appellate record, we consider the document to
be validly included in the appellate record.
name="_ftn2" title="">[2] The SAC alleges that "once the DEED was 'assigned' to
various parties the DEED was detrimentally affected in a number of ways"
and that "no foreclosing party was in fact a holder of the note evidencing
the indebtedness." It further
alleges that "defendant Chase does not have [a] beneficial interest in the
subject Note, and, accordingly, lacks standing to foreclose."
