Mejia v. Bank of Am. Corp.

• Decision Date: 26 May 2022
• Docket Number: B302602
• Parties: MARIA J. MEJIA, Plaintiff and Appellant, v. BANK OF AMERICA CORPORATION, et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

MARIA J. MEJIA, Plaintiff and Appellant,
v.
BANK OF AMERICA CORPORATION, et al., Defendants and Respondents.

B302602

California Court of Appeals, Second District, Third Division

May 26, 2022

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County No. BC503092 Robert B. Broadbelt, Judge. Affirmed.

Maria Mejia, in pro. per., for Plaintiff and Appellant.

McGuireWoods, Tanya L. Greene and E. Christine Hehir for Defendants and Respondents.

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EDMON, P. J.

Plaintiff Maria Mejia (Mejia) sued defendants Bank of America, N.A. (Bank of America) and ReconTrust Company, N.A. (ReconTrust) (collectively, defendants) for a variety of claims arising out of the foreclosure and sale of Mejia's residential property. The trial court granted summary judgment for defendants, concluding that Mejia's earlier chapter 7 bankruptcy proceeding transferred the claims from Mejia to her bankruptcy estate by operation of law, and thus Mejia lacked standing to pursue the claims. On appeal, Mejia contends she had standing to sue defendants, the trial court was precluded by our opinion in Mejia's prior appeal from granting summary judgment for defendants, and she should have been permitted to amend her complaint. We conclude summary judgment was properly granted and the trial court did not abuse its discretion in denying leave to amend the complaint. We therefore will affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

I. Background.

Mejia was the owner of residential real property located at 9951 Wheatland Avenue, Shadow Hills, California (the property). In September 2003, Mejia obtained a mortgage loan from HSBC Mortgage Corporation (HSBC) and executed a promissory note secured by a deed of trust on the property. Mejia obtained an additional loan from LaSalle Bank Midwest, N.A. (LaSalle), which also was secured by a deed of trust. LaSalle subsequently assigned its right in this loan to Bank of America.

Mejia became delinquent on the mortgage loans in March 2010, and ReconTrust recorded a notice of default on or about June 11, 2010.

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Mejia began the process of seeking a loan modification from Bank of America in August 2010. In December 2010, a Notice of Trustee's Sale was recorded on the property, and on or about December 20, 2010, a Substitution of Trustee and Assignment of Deed of Trust was recorded, reflecting an assignment of the deed of trust from HSBC to BAC Home Loans Servicing, LP. Bank of America purchased the property at a foreclosure sale in March 2011, and Mejia vacated the property sometime in April 2011.^[1]

II. Mejia's bankruptcy action.

Mejia filed a chapter 7 bankruptcy petition in June 2012. (11 U.S.C. § 701 et seq.) Mejia's bankruptcy schedules disclosed the mortgages and foreclosure of the property, but the schedules do not identify any disputes or contingent/unliquidated claims against Bank of America or ReconTrust. Mejia's Statement of Financial Affairs identifies five pending lawsuits, but none are claims against Bank of America or ReconTrust relating to the foreclosure.

Mejia was discharged from bankruptcy on February 4, 2013. Her bankruptcy case was closed on February 22, 2013.

III. The present action.

Mejia filed the present action in March 2013, and she filed the operative third amended complaint (TAC) in April 2017

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against Bank of America Corporation, Bank of America, BAC Home Loans Servicing, LP, and ReconTrust. The TAC alleged as follows:

Beginning in 2009, the City of Los Angeles (City) and the Los Angeles Department of Water and Power (LADWP) shut off water to the property at the direction of developers Patrick Wizmann (Wizmann) and California Home Development, LLC (CHD), who owned adjacent properties. Thereafter, Mejia was involved in litigation against the City, LADWP, Wizmann, and CHD.

In June 2010, Bank of America informed Mejia that she was in default on her loan, and on June 15, 2010, ReconTrust recorded a "Notice of Default and Election to Sell Under Deed of Trust." Mejia contacted Bank of America about the notice of default in August 2010, and in September 2010, a Bank of America employee told Mejia that her foreclosure had been put on hold and no foreclosure sale was pending. In December 2010, the same employee told Mejia that no foreclosure sale date had been set and a loan modification would be completed in three to four months. The same day, however, ReconTrust executed a notice of trustee's sale.

On January 10, 2011, a Bank of America employee told Mejia it was too late to apply for a loan modification, and on March 17, 2011, Bank of America proceeded with the foreclosure sale. Mejia moved out of the property in April 2011. In June 2012, Mejia saw Wizmann occupying the property and inquired whether Bank of America had sold the property to Wizmann, but she did not receive a response.

Mejia "relied on Bank of America's representations and promises . . . that there would be a loan modification in three to

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four months. . . . In reliance on Bank of America's promises, Mejia gave up the opportunity to obtain other alternatives such as selling [the property], seeking a buyer for the property, raising or borrowing funds from a third party, or taking other steps to secure the [property], among other things."

Based on the foregoing allegations, Mejia alleged four causes of action:

(1) Negligence (first cause of action): Defendants owed Mejia a duty to exercise reasonable care in reviewing and processing her loan modification application. Defendants breached that duty of care by advising her that her loan would be modified and her property would not be foreclosed on, but then proceeding to foreclose on the property. In breach of their duty of care, defendants either never reviewed Mejia's request for loan modification, foreclosed on the property while reviewing her request, or mishandled her request for a loan modification.

(2) Intentional fraud and negligent misrepresentation (second and third causes of action): Between August 2010 and January 2011, Bank of America made false and misleading representations to Mejia, including that defendants did not intend to foreclose on the property and would provide Mejia a loan modification within a few months. At the time these representations were made, defendants intended to foreclose on the property and did not intend to provide Mejia a loan modification. "In fact, Defendants had no intention to provide Mejia a loan modification or to refrain from foreclosure at the time they promised her otherwise between August 2010 and January 2011." Defendants subsequently foreclosed on the property, contrary to their representations in December 2010.

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(3) Unfair business practices (fourth cause of action):

The practices described above constitute unlawful, unfair, and fraudulent conduct.

IV. Bank of America's motion for summary judgment.

Bank of America and ReconTrust moved for summary judgment in June 2019.^[2] Among other things, defendants asserted that the commencement of a chapter 7 bankruptcy extinguishes a debtor's legal rights and interests in litigation and transfers those rights to the bankruptcy trustee. When a bankruptcy...