Rosen v. Bank of
Filed 12/28/12
Rosen v. Bank of America CA4/3
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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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
FOURTH APPELLATE DISTRICT
DIVISION THREE
GLENN M. ROSEN
et al.,
Plaintiffs and Appellants,
v.
BANK OF AMERICA,
N.A.,
Defendant and Respondent.
G046336
(Super. Ct. No. 30-2010-00364357 )
O P I N I O N
Appeal
from a judgment of dismissal of the Superior Court of
County, Charles Margines, Judge. Affirmed.
Law
Offices of Glenn M. Rosen and Glenn M. Rosen for Plaintiffs and Appellants.
Bryan Cave, Stuart
W. Price, Sean D. Muntz and John T. Madden for Defendant and Appellant.
INTRODUCTION
Rosen appeal from an order dismissing their third
amended complaint against Bank of America (BofA), based on the foreclosure
of their Laguna Niguel Home.
name="_ftnref1" title="">[1] The court sustained without
leave to amend BofA’s demurrer to the Rosens’ fourth attempt to state a cause
of action, having despaired of obtaining a comprehensible pleading. Glenn Rosen, it should be mentioned, is a
member of the California State Bar and is representing himself and his wife in
this appeal.
We
allude to Glenn Rosen’s status as an attorney because of the state of the
appellants’ opening brief. The statement
of facts section in the opening brief
is devoid of a single citation to the record.
(See Cal. Rules of Court, rule 8.204(a)(1)(C).) Numerous references to facts in the argument
portion also lack citations to the record.
The brief contains no headings summarizing each separate point. (See Cal. Rules of Court, rule
8.204(a)(1)(B).)
name="_ftnref2" title="">[2] The statement of relief
sought (see Cal. Rules of Court, rule 8.204(a)(2)(A)) is the
demurrer to the third amended complaint without leave to amend. There is no discussion of, or even reference
to, the standard of review of an appeal following the sustaining of a demurrer.
In
addition, appellants did not include the judgment of dismissal when they
designated the clerk’s transcript. (See
Cal. Rules of Court, rule 8.122(b)(1)(B).)
We had to issue our own order to appellants to get a copy of the
judgment.
Disregarding
the rules of appellate procedure even by an unrepresented layperson is always
problematic; when an attorney representing himself flouts them so pervasively,
it is simply incomprehensible. Were we
to take one of the steps permitted in response to such conduct – disregarding
the noncomplying portions – we would, in effect, toss out the entire opening
brief.
title="">[4] (See, e.g.,
(1995) 34 Cal.App.4th 1826, 1830-1831, fn. 4.)
Considering
all the circumstances, however, we conclude we should go ahead with the review
on the merits, at least in part. We do
so reluctantly, because we do not wish to encourage the view that attorneys can
get away with disregarding the rules at the price of a severe talking-to and
nothing more. But because the record in
this case is so abbreviated – too abbreviated, in fact – and the standard of
review is de novo, the rule violations do not burden our court as they would if
the proceedings below had been lengthier.
For example, we do not have to hunt through exhibits or jury
instructions or pages and pages of testimony.
complaint is so obviously defective that we need not spend a great deal of time
on the issues remaining in this appeal.
As appellants have conceded they cannot amend, we can put this entire
case to rest expeditiously.
FACTS
court, we have found appellants’ pleading difficult to sort out. Their two main complaints appear to be,
first, BofA foreclosed on appellants’ home after it said it would not do so
and, second, BofA did not give proper notice of the foreclosure. There are also subsidiary allegations of a
conspiracy between BofA and the FDIC whereby BofA transferred the property to
the FDIC so BofA could plausibly deny any possibility of negotiating a loan
modification with appellants.
Appellants
alleged several phone conversations with BofA representatives in which the
representative stated no foreclosure sale date had been set and no foreclosure
sale would take place. Specifically,
appellants alleged that Glenn Rosen spoke to Joseph Hall and “Rachel†by
telephone on June
23, 2010, both of whom told him there would
be no foreclosure sale. Nevertheless, a
foreclosure sale did take place on July 9, 2010.
complaint asserted causes of action for promissory
estoppel, violation of Civil Code section 2924(a)(d),
The trial court held oral argument on BofA’s
demurrer and motion to strike on November 16, 2011. It sustained BofA’s
demurrer and dismissed the motion to strike as moot. In a comprehensive minute order, the trial
court ruled that appellants had failed to state a cause of action for
promissory estoppel because, among other defects, appellants had not alleged
any promise on which they had relied to their detriment. Their causes of action for fraud suffered
from the same deficiencies. In light of
the three previous failed attempts to state a cause of action, the trial court
refused to allow any further amendment.
Judgment of dismissal with prejudice was entered on January 26, 2012.
DISCUSSION
As we
explained in Rosen, supra, “We review
Rosen’s complaint de novo to determine whether it alleged facts sufficient to
state a cause of action under any legal theory. [Citation.] In doing so, we look past the form of the pleading
to its substance and ignore any erroneous or confusing labels Rosen
attached. [Citation.] ‘“‘We treat the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or conclusions
of fact or law. [Citation.] . . .’ . . .
Further, we give the complaint a reasonable interpretation, reading it as a
whole and its parts in their context.
[Citation.]â€â€˜ [Citation.]†(Rosen,
supra, 193 Cal.App.4th at p. 458.)
Throughout
their briefs, appellants refer to the trial court’s abuse of its discretion in
sustaining BofA’s demurrer. They never
identify the correct standard of review – de novo – thereby derailing any legal
analysis of the trial court’s rulings they could offer. They have not supported their arguments for
reversal with applicable legal authority.
(See Estate of
Estoppel
“‘Promissory
estoppel applies whenever a “promise which the promissor 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†would result in an
“injustice†if the promise were not enforced.
[Citations.]’ ‘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.â€
[Citation.]’†(Advanced Choices,
Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661,
1671-1672 (Advanced Choices).) Promissory estoppel permits the substitution
of the promisee’s action or forbearance for consideration to create an
enforceable contract. (
Transportation Authority (2000) 23 Cal.4th 305,
310.) An action for promissory estoppel
is, in effect, an action on a contract.
(US Ecology, Inc. v. State of
Appellants
alleged that BofA promised not to foreclose on their home, a promise they
relied upon by not conducting a short sale and not filing for bankruptcy
protection to stave off foreclosure.
The
promise appellants allege is not sufficiently “clear and unambiguous in its
terms.†(Advanced Choices, supra, 182 Cal.App.4th at pp. 1671-1672.) Did appellants mean BofA promised
noticed date? Did BofA promise to
postpone foreclosure temporarily? If so,
for how long? Appellants alluded vaguely
to wanting to talk to Joseph Hall about a loan modification, but they alleged
nothing to indicate BofA had agreed to enter into loan modification
negotiations, let alone that BofA had promised to postpone foreclosure until
negotiations were complete.
“To be
enforceable, a promise must be definite enough that a court can determine the
scope of the duty[,] and the limits of performance must be sufficiently defined
to provide a rational basis for the assessment of damages.†(Ladas
v. California State
Appellants did not allege a sufficiently clear and unambiguous promise.
Appellants
also did not adequately allege reliance on the promise. They allege only that, relying on BofA’s
promise, they did not sell their home through a short sale or file for
bankruptcy protection.
A short
sale would have required BofA’s approval and its willingness to accept less
than the amount of the debt as payment for the house. (See Espinoza
v. Bank of America
represented it was willing to do this.
As appellants have pleaded this cause of action, a short sale was never
an option or an alternative to foreclosure.
As for not filing a bankruptcy petition, this allegation is far too
vague and conclusory to support the reliance element of promissory estoppel. Appellants did not allege that they took any
steps toward filing, which they then called off because of BofA’s promise or
representations. More importantly, a
bankruptcy does not obliterate the debt.
It provides a means for paying off arrearages over time (see
Cal.App.4th 218, 228-230 (Aceves)),
but it does not excuse them. Appellants
did not allege that they would have been able to find the funds to cure their
default and save their home.
A
comparison with some cases in which the debtors asserted promissory estoppel in
the context of foreclosure sales illustrates the insufficiency of appellants’
reliance allegations. In
in a Chapter 7 bankruptcy. She alleged
she refrained from converting her Chapter 7 to a Chapter 13 bankruptcy, which
would have allowed her time to cure her default, because U.S. Bank told her it
would enter into negotiations for a loan modification if she did not
convert. She also alleged she could have
used her husband’s financial assistance to cure the loan default through a
Chapter 13 bankruptcy. (
223, 227.) In Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, the
plaintiffs supported the detrimental reliance element by alleging (and proving)
that they had obtained a loan secured by another piece of property to pay off
the debt to World Savings. (
(1974) 10 Cal.3d 665, 673 [borrowers found purchaser for property].)
By
contrast, a number of recent foreclosure cases applying California law
have held that mere conclusory allegations about bankruptcy are not sufficient
to establish detrimental reliance for promissory estoppel purposes. (See, e.g., Anderson v. PHH Mortgage (C.D.Cal., Sept. 28, 2012, No. SACV 12-01192 CJC) 2012 U.S.Dist. Lexis 141780 *8-9;
(C.D.Cal., March
12, 2012, No. CV 11-7948 CAS) 2012
U.S.Dist. Lexis 39273 *18, fn.8; Clark v.
Wachovia Mortgage (C.D.Cal., June 9, 2011, No. SACV
11-00226-CJC) 2011 U.S.Dist. Lexis 63398 *14; Mehta v. Wells Fargo Bank, N.A. (S.D.Cal., Mar. 29, 2011, No. 10CV944JLS) 2011 U.S.Dist. Lexis 33407 *8.) Having alleged no more than this, appellants
have not alleged facts necessary to establish detrimental reliance.
B. Violation of Civil Code 2924
Appellants allege a failure by BofA to give proper notice of the
foreclosure sale, thereby violating “Civil Code 2429(a)(d) [
through 2924d, although only Civil Code section 2924b deals with the notice
required for a foreclosure sale. In any
event, the trial court observed that in order to state a cause of action to set
aside a foreclosure sale – which appellants acknowledged had already occurred –
a plaintiff had to allege “an unconditional ability and present readiness to
tender the indebtedness. . . .â€
Appellants had not made the requisite allegations.
this issue in their opening brief. In their reply brief, however, they throw in
the towel. They assert they are not
challenging a foreclosure and
concede they did not state facts sufficient to constitute a cause of action for
violation of Civil Code section 2924. We
do not need to occupy ourselves further with this issue.
Appellants
seem to have confused promissory fraud and promissory estoppel. Promissory estoppel is a component of a
contract action. It substitutes a
reliance induced by a promise for consideration. Promissory fraud is a tort. To state a cause of action for promissory
fraud, a plaintiff must allege a promise made without any intention of
performing it, intent to induce reliance, justifiable reliance, and resulting
damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; see also Civ.
Code, § 1710, subd. (4).) The presence
or absence of consideration is not an element of promissory fraud. An intent to induce reliance and the absence
of an intent to perform the promise are not elements of promissory
estoppel.
Promissory
estoppel and promissory fraud are similar in that both require reliance and
resulting damages. The damages that can
be recovered are, however, different.
Contract damages are limited to those reasonably foreseeable at the time
the contract was entered into, while tort damages encompass all the harm
inflicted, regardless of whether it could have been anticipated. (See Applied
Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515-516.)
Appellants’
complaint mentioned several alleged promises.
For example, appellants alleged that BofA promised not to sell their
home through foreclosure. They also
alleged a promise to inform appellants if there was going to be a foreclosure
sale and a promise to postpone the foreclosure sale, both of which promises
would be inconsistent with a promise not to foreclose. Still another allegation stated that
appellants were promised they could apply for a loan modification. Appellants also alleged a promise to
reinstate their loan. In their opening
brief, however, they confine the promises in question to (1) a promise not to
foreclose, (2) a promise to inform them before foreclosing, and (3) a promise
to postpone the foreclosure sale. We may
treat the other alleged promises as abandoned, as appellants did not include
them in their briefs on appeal. (See
Appellants
failed to state a claim for promissory fraud based on these three alleged
promises. In the first place, they did
not allege that BofA made these promises without any intention of performing
them.
title="">[8] It is well settled that a
mere failure to perform will not support a claim for promissory fraud; the
intent not to perform must be present when the promise is made. (See, e.g., Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th
1400, 1414.)
Although
this deficiency could be easily cured by simply alleging the necessary lack of
intent, other defects cannot be so easily mended. Obviously, BofA could not have promised both
to refrain entirely from foreclosing and to tell appellants when it was
foreclosing. Appellants could not
reasonably have relied on such contradictory promises. Likewise, appellants could not have
reasonably relied on a promise not to foreclose and a promise to postpone the
foreclosure sale.
Appellants’ failure to allege reliance on the
false promise appears in another way.
They allege that because of the promise (whatever it was), they
refrained from conducting a short sale or filing for bankruptcy. As stated above, these vague allegations are
insufficient. A short sale requires
lender approval, which appellants did not allege they had secured
America, N.A., supra, 823 F.Supp.2d at p. 1059), and bankruptcy does not
excuse performance of the loan contract; it merely postpones performance. Appellants did not allege access to
sufficient financial resources to satisfy their debt through a bankruptcy
workout. (Cf. Aceves, supra, 192 Cal.App.4th at p. 223 [plaintiff in bankruptcy
alleged financial resources to pay off loan].)
Something more concrete than a simple allusion to a possible bankruptcy
filing is necessary to allege reliance adequately.
Finally
appellants have not alleged damages from a false promise. A fraud cause of action requires “‘actual
monetary loss.’†(City of Vista v. Robert Thomas Securities, Inc. (2000) 84
Cal.App.4th 882, 888, quoting Alliance
Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240.) “Deception which does not cause loss is not a
fraud in the legal sense.†(
818, 825.)
The
only loss appellants alleged is the loss of their home through
foreclosure. Although they claim not to
have received proper notice, they did not dispute BofA’s fundamental right to
foreclose for nonpayment of debt. They
also did not allege that the property was worth more than the debt; they did
not allege that, had BofA held off foreclosing or told them foreclosure was
imminent, they could have sold the property for more than the debt, paid off
the debt, and had money left over. Their
damages would be the difference between the amount of the debt and the amount
in excess of the debt they realized from the sale of the property. They did not allege any such excess
amount. Consequently, they did not
sustain “an actual monetary loss.â€
or Concealment
Appellants
also alleged that BofA told them no foreclosure sale had taken place or that
the sale had been postponed when in fact it had already happened. This allegation can be viewed either as a
misrepresentation of fact (no sale had taken place) or concealment of the fact
of the sale.
To
state a cause of action for a fraudulent misrepresentation, the plaintiff must
allege a false statement of fact, intent to induce reliance, justifiable
reliance, and resulting damage. (
(1997) 15 Cal.4th 951, 974; Wishnick v.
Frye (1952) 111 Cal.App.2d 926, 930.)
A cause of action for concealment requires allegations of facts
establishing: (1) concealment of a
material fact; (2) the duty to disclose the concealed fact; (3) the intent to
defraud through concealment; (4) the plaintiff’s justifiable lack of awareness
of the fact; and (5) damage resulting from the concealment. (Jones
v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199; see also Civ.
Code, § 1710.)
Once
again, appellants have failed to allege reliance. If the sale had already taken place,
appellants could not have conducted a short sale – the property no longer
belonged to them. Likewise, filing for
bankruptcy protection in order to save the property would have been futile if
they no longer owned it. Appellants do
not suggest any other kind of reliance on an after-the-fact misrepresentation
that no sale had taken place.
As for
damages, appellants have again failed to allege monetary loss stemming from the
alleged fraud. True, they lost their
house, but they also lost a debt they evidently could not repay. If BofA acquired the property through
nonjudicial foreclosure, BofA cannot require appellants to make up any
deficiency between the amount of the debt and what BofA paid to acquire it.
1236.) They did not allege that the property’s
value exceeded the amount of the debt.
Misrepresentation
Negligent
misrepresentation is a form of deceit that does not require intent to deceive,
an indispensible element of other kinds of fraud. (Oakland
Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th
1175, 1184.) Negligent misrepresentation
is “[t]he assertion, as a fact, of that which is not true, by one who has no
reasonable ground for believing it to be true.â€
(Civ. Code, § 1710, subd. (2).)
To state a cause of action for negligent misrepresentation, a plaintiff
must still allege facts establishing the other elements of fraud: a false statement of fact, justifiable
reliance, and resulting damages. (
California (2007) 151 Cal.App.4th 168, 181.)
Appellants
based their cause of action for negligent misrepresentation on the same facts
they used for their other fraud claims.
Appellants’ failure to allege facts establishing reliance and damages
doomed this cause of action as it doomed their claims for misrepresentation,
concealment, and promissory fraud. The
trial court correctly sustained BofA’s demurrer to appellants’ fraud claims.
In
their reply brief, appellants specifically disclaim any desire to amend their
complaint. In fact, they concede,
“Allowing for further amendment would be futile.†We agree.
As appellants have abandoned their claim that the trial court abused its
discretion in refusing to allow further amendment, we need discuss this point
no further.
DISPOSITION
The
judgment of dismissal is affirmed.
Respondent is to recover its costs on appeal.
BEDSWORTH,
ACTING P. J.
WE CONCUR:
MOORE, J.
IKOLA, J.
name="_ftn1" title=""> [1] The third amended complaint also
named the Federal Deposit Insurance Corporation (FDIC) and Loanrider.com as
defendants. Appellants dismissed the
FDIC shortly after BofA demurred to the third amended complaint. No proof of service for Loanrider.com appears
in the record, and no allegations regarding this defendant appear in the third
amended complaint.
name="_ftn2" title=""> [2] The headings are merely the numbers
and the names of the causes of action.
