Zimmer v. Nawabi

• Citation: 566 F.Supp.2d 1025
• Decision Date: 14 May 2008
• Docket Number: No. CIV. 07-16 WBS KJM.,CIV. 07-16 WBS KJM.
• Court: U.S. District Court — Eastern District of California
• Parties: Glenlyn A. ZIMMER, Plaintiff, v. Tim NAWABI, an individual; Matt Durani, an individual; Prime Funding Solution, an unknown entity; Faridoon Lodin, an individual; Golden State Financing Corporation, a California corporation; Sandra Bonner, an individual; First NLC Financial Services, L.L.C., a California limited liability company; and Wilshire Credit Corporation, a Nevada corporation, Defendants.

Page 1025

566 F.Supp.2d 1025

Glenlyn A. ZIMMER, Plaintiff, v. Tim NAWABI, an individual; Matt Durani, an individual; Prime Funding Solution, an unknown entity; Faridoon Lodin, an individual; Golden State Financing Corporation, a California corporation; Sandra Bonner, an individual; First NLC Financial Services, L.L.C., a California limited liability company; and Wilshire Credit Corporation, a Nevada corporation, Defendants.

No. CIV. 07-16 WBS KJM.

United States District Court, E.D. California.

May 14, 2008.

Matthew Corin Bradford, Paul Thomas Dolberg, Bradford Law Offices, Stockton, CA, for Plaintiff.

William Nicholas Hebert, Calvo and Clark LLP, Ramiz Issam Rafeedie, Kirkpatrick & Lockhart Preston Gates Ellis LLP, San Francisco, CA, Larry J. Cox, Law Offices of Larry J. Cox, Rocklin, CA, Stephen Thomas Cammack, Law Offices of Stephen T. Cammack, Sacramento, CA, Carlos. E. Sosa, Law Offices of Hausman and Sosa, LLP, Tarzana, CA, for Defendants.

MEMORANDUM AND ORDER RE: MOTION FOR SUMMARY JUDGMENT

WILLIAM B. SHUBB, District Judge.

Plaintiff Glenlyn A. Zimmer initiated this action after her refinance resulted in terms that were less advantageous than she was orally promised. Plaintiff now moves for summary judgment with respect to three of her state law claims against her broker, defendant Golden State Financing Corporation ("Golden State").

I. Factual & Procedural Background

In November 2005, a Golden State employee contacted plaintiff and discussed the possibility of plaintiff refinancing her home in Stockton. (Pl.'s Stmt, of Undisputed Facts ## 7-11.) Plaintiff, who was seventy-nine years old at the time, pursued the option and applied for a loan on January 18, 2006. (Id. at ## 11-12; Zimmer Decl. Ex. D (loan application indicating that plaintiffs date of birth is June 24, 1926).) Plaintiff was approved for a loan and Nawabi personally met with her on January 30, 2006 to execute the loan documents. (Pl.'s Stmt, of Undisputed Facts ## 13, 16.) At that meeting, Nawabi informed plaintiff that her refinance would result in a single loan with a monthly payment of $2,400.00 for the first month and $1,500.00 for each month thereafter and receipt of $29,000.00 in cash at the close of escrow.¹ (Zimmer Decl. at ¶¶ 14-15.) At the close of that meeting, Nawabi instructed plaintiff to sign the loan documents without reading them, which plaintiff did. (Id. at ¶ 16.)

Later that day, plaintiff discovered that not only were the terms and benefits of her refinance different from those Nawabi described, but what she believed would be one loan was actually two. (Id. at ¶¶ 17-18.) The following day, plaintiff contacted Nawabi to rescind the loans; however, Nawabi informed plaintiff that the terms he described "superseded" the terms in the written documents and persuaded plaintiff not to rescind. (Id. at ¶¶ 19-21.) Lodin brokered both loans, which closed on February 24, 2006. (Pl.'s Stmt, of Undisputed Facts ## 22-23.)

Contrary to Nawabi's representations, plaintiffs refinance resulted in a monthly payment of $3,316.26 ($3,542.93 with insurance and taxes) per month, with a rate increase in August 2007 and receipt of only $4,326.87² in cash at the close of escrow. (Zimmer Decl. ¶¶ 18, 27.) As a result of her refinance, plaintiff also had to pay a $18,782,50 prepayment penalty to her previous lender. (Id. at ¶ 26, Ex. E.) These loan terms were less advantageous to plaintiff than the mortgage she had prior to the refinance. (Id. Ex. G (Pl.'s Req. For Admis. & Golden State's Resp. # 17).)

After plaintiff hired counsel, Nawabi contacted plaintiff and offered to obtain a third loan that would reduce her monthly payments. (Id. at ¶¶ 32-35.) When plaintiff met with Nawabi about the potential loan, Nawabi, Matt Durani, another Golden State employee, and Lodin, via telephone, offered plaintiff $3,500.00 as a "courtesy check" to "help [plaintiff] with [her] loan payments." (Id. at ¶¶ 38-40.) Nawabi, Durani, and Lodin asked plaintiff to sign a receipt for the check. (Id. at ¶ 41.) After plaintiff signed what she believed was a receipt for the check, Nawabi, Durani, and Lodin attached her signature to a release of liability.³ (Id. at ¶¶ 42-43.) Golden State never provided a new loan for plaintiff, and she ultimately moved out of her home in June 2007 due to an impending foreclosure. (Id. at ¶¶ 46, 50-51.)

On November 7, 2006, plaintiff filed a complaint in state court alleging state law claims and a violation of 12 U.S.C, § 2607. Defendants subsequently removed the action to this court. After it filed a Chapter 11 bankruptcy, all claims against First NLC Financial Services, L.L.C. ("First NLC") were automatically stayed on January 22, 2008 pursuant to 11 U.S.C. § 362(a).

On December 5, 2007, plaintiff moved for summary judgment against Golden State, Nawabi, and Lodin with respect to her state law claims for breach of contract, breach of fiduciary duty, and financial elder abuse. Via a counter-motion and pursuant to Federal Rule of Civil Procedure 56(f), defendants requested the court to continue plaintiffs motion to permit defendants to obtain an affidavit from Nawabi. On February 14, 2008, the court granted defendants' Rule 56(f) request and the matter was continued to May 12, 2008. Zimmer, 2008 WL 435341, at *3. Despite the additional time, defendants failed to dispute plaintiffs statement of undisputed facts⁴ or file any affidavits, evidence, or pleadings in opposition to plaintiffs motion for summary judgment.⁵

At the close of the business day on May 9, 2008, plaintiff informed the court that Lodin had filed a Chapter 7 bankruptcy on April 16, 2008. As is the common practice among bankruptcy attorneys, Lodin's counsel could not extend the courtesy of informing the court that it had filed bankruptcy. Subsequently, one court day before the scheduled hearing on this motion, Nawabi also filed a Chapter 7 bankruptcy. Thus, this action is automatically stayed as to Lodin and Nawabi. 11 U.S.C. § 362(a).⁶

It is possible that Golden State has joined its co-defendants in bankruptcy with its counsel following the wasteful custom of keeping the district court and opposing counsel in the dark.⁷ But, because it is not feasible for this court to check the records of the ninety-four federal judicial districts to determine if Golden State did in fact file bankruptcy,⁸ the court must proceed with plaintiffs motion at the risk of wasting judicial resources if it is later revealed that Golden State has filed bankruptcy.⁹

II. Discussion

Summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A material fact is one that could affect the outcome of the suit, and a genuine issue is one that could permit a reasonable jury to enter a verdict in the non-moving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party moving for summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Alternatively, the movant can demonstrate that the non-moving party cannot provide evidence to support an essential element upon which it will bear the burden of proof at trial. Id.

Once the moving party meets its initial burden, the non-moving party "may not rely merely on allegations or denials in its own pleading," but must go beyond the pleadings and "by affidavits or as otherwise provided in [Rule 56,] set out specific facts showing a genuine issue for trial." Fed.R.Civ.P. 56(e)(2); Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548; Valandingham v. Bojorquez, 866 F.2d 1135, 1137 (9th Cir.1989). "If the opposing party does not so respond, summary judgment should, if appropriate, be entered against that party." Fed.R.Civ.P. 56(e)(2); see also Henry v. Gill Indus. Inc., 983 F.2d 943, (9th Cir.1993) (in the absence of a response by the non-moving party, entering summary judgment is not appropriate if "the movant's papers are insufficient to support that motion or on their face reveal a genuine issue of material fact"). In its inquiry, the court must view any inferences drawn from the underlying facts in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

A. Breach of Contract Claim

Plaintiff contends Golden State breached its contract with plaintiff because plaintiffs refinance resulted in a higher monthly payment and receipt of less cash at the close of escrow than plaintiff was promised. Instead of arguing that Golden State breached the written loan agreement, plaintiff contends that it breached the oral promises Nawabi made to plaintiff.

"The parol evidence rule, codified in Code of Civil Procedure section 1856, subdivision (a), prohibits a party from resorting to extrinsic evidence of a prior or contemporaneous oral agreement to contradict a plain and unambiguous term of a fully integrated agreement."¹⁰ Charnay v. Cobert, 145 Cal.App.4th 170, 186, 51 Cal.Rptr.3d 471 (2006). While section 1856 does not exclude the use of extrinsic evidence to establish fraud, Cal.Civ.Proc. Code § 1856(g), this exception does not extend to "promissory fraud claims premised on prior or contemporaneous statements at variance with the terms of a written integrated agreement." Casa Herrera, Inc. v. Beydoun, 32 Cal.4th 336, 346, 9 Cal.Rptr.3d 97, 83 P.3d 497 (2004) (citations omitted); see also Pac. State Bank v. Greene, 110 Cal.App.4th 375, 390, 1 Cal.Rptr.3d 739 (2003) ("`"Promissory fraud" is a promise made without any intention of performing it.'") (citations omitted)...