Crossroads Investors, L.P. v. Fed. Nat'l Mortg. Ass'n
| Citation | 222 Cal.Rptr.3d 1,13 Cal.App.5th 757 |
| Decision Date | 26 July 2017 |
| Docket Number | C072585 |
| Court | California Court of Appeals |
| Parties | CROSSROADS INVESTORS, L.P., Plaintiff and Respondent, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendant and Appellant. |
Buchalter Nemer, Buchalter, Jeffrey S. Wruble, Efrat M. Cogan, and Oren Bitan, Los Angeles, for Defendant and Appellant.
Law Offices of Melinda Jane Steuer and Melinda Jane Steuer, Sacramento, for Plaintiff and Respondent.
This appeal challenges the trial court's denial of defendant's special motion to strike the complaint under Code of Civil Procedure section 425.16, otherwise known as the anti-SLAPP statute.1 Defendant Federal National Mortgage Association (Fannie Mae) initiated nonjudicial foreclosure proceedings against property owned by plaintiff Crossroads Investors, L.P. (Crossroads), but Crossroads filed for bankruptcy protection, staying the proceedings. Its proposed reorganization plan called for selling the property to a third party, who would reinstate the loan but on different material terms less favorable to Fannie Mae. Fannie Mae would not be paid what it was owed in full. The bankruptcy court called the plan "dubious," and Crossroads' counsel agreed they were "trying to have our cake and eat it too."
Crossroads alleges while the bankruptcy stay was in effect and afterwards, it requested accountings from Fannie Mae under Civil Code section 2924c to learn the amount required to reinstate or pay off the defaulted loan. It also tendered performance both to reinstate and pay off the loan as authorized under Civil Code section 2924c. Fannie Mae did not respond to the requests for accountings except in response to an interrogatory served on it as part of the bankruptcy action. It also refused to accept the tenders.
Crossroads failed to obtain confirmation of a reorganization plan, and the bankruptcy court granted Fannie Mae relief from the stay. Crossroads alleges Fannie Mae promised in a telephone conversation with Crossroads' counsel to notify Crossroads of the date it intended to sell the property. Fannie Mae shortly thereafter sold the property, and it did so without providing prior notice to Crossroads.
Crossroads filed this action against Fannie Mae for wrongful foreclosure, breach of contract, fraud, and other tort and contract causes of action. Fannie Mae filed an anti-SLAPP motion, contending the actions on which Crossroads based its complaint arose from the exercise of its constitutional rights of speech and petition; specifically, statements and omissions made in, or concerning issues under review in, the bankruptcy action. It also argued Crossroads could not establish a prima facie case in support of its claims. The trial court disagreed and denied the motion. In an earlier opinion, we affirmed the trial court's order.
The California Supreme Court granted Fannie Mae's petition for review, depublished our original opinion, and transferred the matter to us to reconsider the appeal in light of Baral v. Schnitt (2016) 1 Cal.5th 376, 205 Cal.Rptr.3d 475, 376 P.3d 604 ( Baral ). The parties have filed supplemental briefs which we have considered.
We now reverse the trial court's ruling and direct it to grant the anti-SLAPP motion. Except for claims based on one of Fannie Mae's actions discussed below, all of Crossroads' claims arose from Fannie Mae's constitutionally protected actions that were taken as part of, or related to, the bankruptcy action. Further, Crossroads did not establish a prima facie case in support of those claims, as all of its tort claims based on protected activity attacked statements privileged under Civil Code section 47, and its contract claims arising from protected activity were barred as a matter of law.
In 2005, Crossroads borrowed $9 million subject to a promissory note. The note was secured by a deed of trust recorded against an apartment building Crossroads owned in Woodland. Fannie Mae became the beneficiary of the deed.
The note imposed on Crossroads a prepayment premium (sometimes referred to as yield maintenance or a prepayment penalty) should Crossroads pay the unpaid principal before the note's maturity date or should Crossroads default and Fannie Mae accelerate the loan.
Crossroads defaulted on the note in late 2010. Fannie Mae served Crossroads with a notice of default, and it accelerated the loan. On February 1, 2011, Fannie Mae initiated nonjudicial foreclosure proceedings by recording the notice of default against the property. The notice stated Crossroads could reinstate the loan by paying all past due payments plus costs and expenses permitted by statute. It informed Crossroads that as of December 30, 2010, that amount was $286,900.10.
As required by Civil Code section 2924c ( section 2924c ), the notice of default informed Crossroads it could reinstate the loan by tendering the amount it owed to bring its payments current no later than five business days before the date Fannie Mae intended to sell the property. It informed Crossroads that after the expiration of that time period, the only way to stop the foreclosure was to pay off the loan before the sale occurred. It also informed Crossroads it could learn how much it owed either by submitting a written request for a written itemization or by contacting Fannie Mae's trustee. It provided the trustee's address and phone number.
In addition to recording the notice of default, Fannie Mae instituted state court litigation against Crossroads and secured a receiver to take control of the property.
On April 15, 2011, Crossroads entered into a contract to sell the property to Ezralow Company, LLC (Ezralow) for $10.95 million. On May 9, 2011, Crossroads and Ezralow proposed to Fannie Mae that Ezralow would assume Crossroads' obligations and pay off the loan on condition Fannie Mae agreed to waive the prepayment premium. Fannie Mae refused to waive the premium, and it rejected the proposal.
Fannie Mae recorded a notice of trustee's sale against the property on June 24, 2011. The notice stated the property would be sold on July 19, 2011. It also stated the total unpaid amount of Crossroads' obligations and reasonable estimated costs, expenses and advances as of the notice's date was estimated to be $10,525,126.40. The notice stated prepayment premiums, accrued interest and advances "will increase this figure" prior to the sale, and it provided a Web site address and telephone number for Crossroads to use to obtain updated sale information.
On July 18, 2011, the day before the property was scheduled to be sold, Crossroads filed for Chapter 11 bankruptcy protection. It did so in part "to restructure the Loan so that it can consummate the sale of the Property to [Ezralow] and assumption of the Loan by [Ezralow]." In its petition, Crossroads asserted it owed Fannie Mae approximately $8.7 million. When Crossroads declared bankruptcy, the state court action was stayed but not dismissed. ( 11 U.S.C. § 362.)
On the following day, July 19, Crossroads entered into an amended and restated contract to sell the property to Ezralow for $10.95 million. This agreement conditioned the sale on the filing by Crossroads of a Chapter 11 bankruptcy proceeding, which it had, and on Crossroads seeking, and the bankruptcy court approving, a reorganization plan under which Ezralow would assume and reinstate the loan, and the loan's terms would be restructured to eliminate the prepayment premium and vary the interest rate and the maturity date. The agreement required Ezralow to approve the proposed reorganization plan before Crossroads submitted it to the court. If Ezralow disapproved the proposed plan, the agreement was automatically terminated. Also, Ezralow could terminate the agreement and cancel escrow if the bankruptcy court did not approve eliminating the prepayment premium as part of the reorganization plan.
Crossroads filed its first disclosure statement and proposed reorganization plan with the bankruptcy court, and it based its plan on the terms of the July 19, 2011 sale agreement with Ezralow.2 Crossroads' proposed plan asked the court to approve the sale to Ezralow for $10.95 million, but it also proposed eliminating the prepayment premium. The bankruptcy court rejected Crossroads' first disclosure statement in part because it failed to acknowledge Fannie Mae's full claim.
Fannie Mae filed a proof of claim in the bankruptcy action for $10,447,090.43. The claim included $1,590,616.61 for the prepayment premium. Crossroads objected to the claim, contending, among other things, the prepayment premium was an unreasonable liquidated damages provision unenforceable under Civil Code section 1671.3 At a hearing on February 6, 2012, the bankruptcy court disagreed and overruled Crossroads' objection. It ruled the prepayment premium was enforceable under California law, and Fannie Mae could claim it in the bankruptcy proceeding.4
On the same day it ruled Fannie Mae was entitled to claim the prepayment premium, the bankruptcy court conditionally granted Fannie Mae relief from the bankruptcy stay. The court had disapproved Crossroads' first disclosure statement, and Crossroads had made no effort to prosecute plan confirmation until only recently when it filed a second statement. The court granted Fannie Mae relief from the stay to be effective three months later on May 15, 2012, provided Crossroads had not obtained confirmation of its reorganization plan by that date.
After the bankruptcy court rejected Crossroads' objection to the prepayment premium, Crossroads served an interrogatory in the bankruptcy action on Fannie Mae that asked for the amount required "under state law" to cure the loan as of June 1, 2012. Fannie Mae responded by stating it could not provide an accurate response because the interrogatory sought an amount that was contingent upon future events; it would provide a response on June 1, 2012.
At the bankruptcy hearing on its second disclosure statement, Crossroads...
To continue reading
Request your trial
-
People v. Heard
...§ 1.5.)9 Because this opinion was vacated, it has no effect as law of the case. (See Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 773, 222 Cal.Rptr.3d 1.)10 On our own motion, we take judicial notice of the trial court's order, which appears on th......
-
Bonni v. St. Joseph Health Sys.
...While the litigation privilege does not generally apply to breach of contract claims ( Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 787, 222 Cal.Rptr.3d 1 ),4 the same is untrue for tort claims. Courts have consistently emphasized the privilege, w......
-
Timothy W. v. Julie W.
...defense a plaintiff must overcome to demonstrate a probability of prevailing." ’ " ( Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 785-786, 222 Cal.Rptr.3d 1.) The purpose of the litigation privilege " ‘is to afford litigants and witnesses [citatio......
-
Waterwood Enters., LLC v. City of Long Beach
...Plaza Marina Commercial Corp. (1971) 21 Cal.App.3d 378, 385, 98 Cal.Rptr. 414 ; see also Crossroads Investors, L.P. v. Federal National Mortgage Assn. (2017) 13 Cal.App.5th 757, 783, 222 Cal.Rptr.3d 1.) When properly made, a tender puts the other party in default if he or she refuses to acc......