Cruz v. Bank of America
Michael S. Cruz and Rebecca J. Cruz appeal from an order enforcing a mediation settlement agreement to dismiss their fraud action against Bank of America, N.A., Bank of American Home Loans, BAC Home Loans Servicing, L.P., Reconstruct Company, N.A., Alternative Loan Trust 2005-J11 (erroneously sued as C. Walt, Inc.), and Bank of New York Mellon. (Code Civ. Proc., § 664.6.) Appellants contend that the trial court erred in not rescinding the settlement agreement based on fraud, mistake, or public policy grounds. We affirm.
On May 23, 2011, appellants sued respondents for contract and fraud damages after defaulting on a $486,000 deed of trust. The complaint alleged that Bank of America, N.A. (BoA) breached its agreement to suspend the foreclosure sale, accepted mortgage payments, and fraudulently represented that appellants' home loan would be modified. Appellants claimed the foreclosure was based on a "securitized" promissory note and that respondents "no longer hold legal title to the securitized property" and were conducting a fraudulent foreclosure.
On April 19, 2012, the parties entered into a mediated settlement agreement providing that appellants would be paid $10,000 and could remain on the property until August 31, 2012, at which time it would be sold at a trustee's sale. Pursuant to the settlement agreement, the trial court dismissed the action on June 7, 2012, and retained jurisdiction to enforce the settlement terms. (Code Civ. Proc., § 664.6.)
On December 27, 2012, respondents filed a motion to enforce the settlement agreement after appellants refused to vacate the property. Appellants filed a cross motion to set aside the settlement agreement on the ground that the mediator and their attorney told them that the trial court had already decided the case against them.[1] Appellants also claimed that respondents breached a duty to advise them that a mortgage modification fraud action (the Mackler Qui tam action) was pending against BoA in New York.
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