Weimer v. Nationstar Mortg., LLC

• Citation: 47 Cal.App.5th 341,260 Cal.Rptr.3d 712
• Decision Date: 02 April 2020
• Docket Number: C080550
• Court: California Court of Appeals
• Parties: Robert WEIMER, Jr., Plaintiff and Appellant, v. NATIONSTAR MORTGAGE, LLC, et al., Defendants and Respondents.

47 Cal.App.5th 341

260 Cal.Rptr.3d 712

Robert WEIMER, Jr., Plaintiff and Appellant,

v.NATIONSTAR MORTGAGE, LLC, et al., Defendants and Respondents.

C080550

Court of Appeal, Third District, California.

Filed April 2, 2020

Certified for Partial Publication.^*

United Law Center, Danny A. Barak, Ronald W. Holland, Stephen J. Foondos and John S. Sargetis, Roseville, for Plaintiff and Appellant.

Severson & Werson, Jan T. Chilton, Elizabeth Holt Andrews, San Francisco, and Elizabeth C. Farrell, Irvine, for Defendants and Respondents.

MURRAY, J.

Plaintiff Robert Weimer, Jr., purchased real property in Carnelian Bay in 1993. He refinanced the mortgage in 2006 with a loan from defendant Bank of America, N.A. (BANA). After defaulting, plaintiff entered into a loan modification process with BANA. Subsequently, loan servicing was transferred, successively, to defendants Specialized Loan Servicing, LLC (SLS) and Nationstar Mortgage, LLC (Nationstar). According to plaintiff, BANA, SLS, and Nationstar successively each engaged in deliberate and negligent misconduct in the loan modification process. In 2014, BANA transferred beneficial interest in the loan to defendant U.S. Bank, N. A. (U.S. Bank), as trustee for the Certificateholders of Banc of America Funding Corporation Mortgage Pass Through Certificates Series 2007-7. Eventually, Nationstar, acting as U.S. Bank’s agent, recorded a notice of trustee’s sale and had an agent enter onto the property and change the locks.

After plaintiff commenced this action, BANA, U.S. Bank, and Nationstar demurred to a first amended complaint. The trial court sustained the demurrer without leave to amend as to BANA, concluding that the action against it was time-barred. As to the other demurring defendants, the court sustained the demurrer with leave to amend. Plaintiff filed a second amended complaint, asserting causes of action sounding in intentional and negligent misrepresentation, negligence, trespass to land, seeking declaratory relief, and asserting violations of the unfair competition law ( Bus. & Prof. Code, § 17200 et seq. ). U.S. Bank and Nationstar demurred, SLS separately demurred, and the trial court sustained the demurrers without leave to amend.

On appeal,¹ plaintiff asserts that the trial court erred in concluding that the action against BANA was time-barred because BANA’s actions were part of a civil conspiracy with the other defendants, and the timeliness of plaintiff’s action against BANA must be measured from the last overt act. Plaintiff further asserts that the trial court erred in sustaining the demurrers to the second amended complaint because he sufficiently stated each cause of action. Plaintiff also asserts that the trial court should have granted him leave to amend, however, he largely maintains that his complaint required no amendment.

In the unpublished portion of this opinion, we conclude that the action as asserted against BANA was time-barred. We further conclude that plaintiff sufficiently stated causes of action sounding in intentional and negligent misrepresentation and violations of the unfair competition law against the remaining defendants.

In the published portion of this opinion, based on the test in Biakanja v. Irving (1958) 49 Cal.2d 647, 320 P.2d 16 ( Biakanja ) and the analysis in Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 397, 247 Cal.Rptr.3d 632, 441 P.3d 881 ( Gas Leak ), we conclude the remaining defendants had a duty of care and that plaintiff sufficiently stated a cause of action for negligence against them.

Therefore, we will reverse the judgments of dismissal as to U.S. Bank, SLS, and Nationstar and reverse the orders sustaining the demurrers as to the causes of action in the second amended complaint for intentional misrepresentation (first cause of action), negligent misrepresentation (second cause of action), negligence (third cause of action), and violations of the unfair competition law (sixth cause of action). In all other respects, the judgments are affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff purchased the subject property in Carnelian Bay in or about 1993 and alleges he "maintained it as one of his principal residences." He refinanced the mortgage on the property on or about May 25, 2006,² with a loan from BANA. Plaintiff alleged that, in or about January 2008, BANA froze plaintiff’s bank accounts, and, as a result, he was not able to pay his mortgage payments for approximately three months. Additionally, BANA cancelled plaintiff’s line of credit for unknown reasons, which negatively affected plaintiff’s credit score. Plaintiff alleged that he never found out why BANA froze his accounts and cancelled his line of credit.

As a result of his delinquency, plaintiff entered into a loan modification process with BANA. In or about mid-2009, an agent, employee, or representative of BANA told plaintiff that he was approved for a loan modification that would reduce his monthly payments to $8,000 per month, reduce and fix his interest rate, and "reduce his principal" by $500,000. BANA required plaintiff to make a down payment of $50,000 to secure the loan modification, and, once it received that payment, it would halt the foreclosure sale. Plaintiff asserted that his wife sent BANA a check for $50,000.³ However, the foreclosure sale was not postponed, and plaintiff "was forced to file a chapter 11 bankruptcy to stop the foreclosure sale." BANA did not furnish the loan modification.

In or about early 2010, servicing of the loan was transferred from BANA to SLS. Plaintiff alleged that SLS notified him that it would take over for BANA in handling his loan modification application.⁴ From early 2010 through January 2014, plaintiff attempted to obtain a permanent loan modification from SLS. However, during this time period, SLS "refused to honor the terms of the loan modification promised by" BANA, notwithstanding the one-time $50,000 payment. Plaintiff repeatedly submitted identical and updated loan modification applications and documents to SLS. Often, plaintiff was told that the documents were not received despite plaintiff having sent them directly to the addresses and individuals specified by SLS. Plaintiff alleged that SLS mishandled or lost the applications and documents. SLS continued to represent to plaintiff that he would be approved for a loan modification with terms similar to those previously offered by BANA. Meanwhile, "[a]s a result," plaintiff continued to accumulate arrears, penalties, and fees, and his credit continued to suffer. Additionally, plaintiff expended time, money, and effort in his attempts to obtain the loan modification.

On or about April 1, 2014, servicing of the loan was transferred from SLS to Nationstar. Nationstar informed plaintiff that, as a result of the transfer, he would have to begin the loan modification application process anew.⁵ Nationstar refused to honor BANA’s "previous representation of a permanent loan modification." Plaintiff once again had to submit the same applications and documents on multiple occasions, and was told to send them to locations in Arizona, Texas, and California. A named employee or agent of Nationstar told plaintiff that he was being evaluated for a Home Affordable Modification Program (HAMP) loan modification, sent him the application, and told him to complete it and submit it along with supporting documents.⁶ Thus, according to the complaint, Nationstar "represented and led Plaintiff to believe that he was eligible to apply for and receive a HAMP loan modification." However, plaintiff could not qualify for a HAMP loan modification because his loan, at $2,000,000, was well above the applicable maximum of $729,750. Plaintiff alleged that Nationstar was aware of this. According to plaintiff, Nationstar had him apply for a HAMP loan modification "so Plaintiff would maintain his delinquency and Nationstar would retain its status as a ‘special servicer’ for servicing a delinquent account and would enable it to collect additional fees for servicing a delinquent loan." (Capitalization omitted.) In the alternative, plaintiff asserted that Nationstar acted unreasonably in evaluating him for a loan modification for which he was not qualified. Plaintiff asserted that, like the servicers before it, Nationstar lost or misplaced plaintiff’s applications and documents.

According to plaintiff, "[o]n or about, June 23, 2014, an Assignment of Deed of Trust was effectuated whereby [BANA] transferred its purported beneficial interest under the Deed of Trust to the U.S. Bank securitized trust."⁷

On or about August 15, 2014, Nationstar hired Cyprexx to enter the subject property and change the locks. Plaintiff learned of this development after a notice was placed on his door. Plaintiff contacted Cyprexx, and a named representative told him that Nationstar had hired Cyprexx to secure and winterize the premises. Plaintiff alleged that Nationstar and Cyprexx knew plaintiff was still occupying the home. Plaintiff reentered the property, installed new locks, and directed a caretaker to maintain the property while he was out of town on business.

Plaintiff alleged that defendants’ actions constituted a continuing conspiracy to defraud and take advantage, and, therefore, the statute of limitations should be tolled until completion of the last overt act. Plaintiff further alleged that it was defendants’ plan to engage him in the loan modification process, with no intent to grant his loan modification applications, so that they could obtain additional compensation for servicing a delinquent mortgage account and collect additional fees for every loan modification application he submitted.⁸

In a first amended complaint, plaintiff asserted eight causes of action against defendants: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) promissory estoppel, (4) breach of contract, (5) negligence, (6) trespass to land, (7) declaratory relief, and (8) violation of Business and...