Opinion
E052902 Super.Ct.No. RIC10018855
04-11-2012
SHEA EAGLIN, Plaintiff and Appellant, v. WELLS FARGO BANK, N.A., Defendant and Respondent.
Shea Eaglin, in pro. per., for Plaintiff and Appellant. Wright, Finlay & Zak, T. Robert Finlay and Kathryn A. Moorer, for Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
OPINION
APPEAL from the Superior Court of Riverside County. Paulette Durand-Barkley, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.
Shea Eaglin, in pro. per., for Plaintiff and Appellant.
Wright, Finlay & Zak, T. Robert Finlay and Kathryn A. Moorer, for Defendant and Respondent.
Plaintiff and appellant Shea Eaglin appeals an order denying his application for a preliminary injunction enjoining foreclosure on his residence. He contends that Wells Fargo's notice of trustee's sale failed to comply with the requirements of Civil Code section 2923.5, which we discuss below. (All further statutory citations refer to the Civil Code.)
An order granting or denying a preliminary injunction is appealable. (Code Civ. Proc., § 904.1, subd. (a)(6).)
Finding no abuse of discretion or error in the trial court's interpretation of the statute, we affirm the order.
PROCEDURAL HISTORY
Representing himself, plaintiff Shea Eaglin filed a complaint for damages, injunctive relief, and declaratory relief against defendant Wells Fargo Bank (Wells Fargo) and others who are not parties to this appeal. The complaint alleged statutory violations in connection with a foreclosure on Eaglin's residence.
The application made other assertions as well, but on appeal Eaglin addresses only the alleged violation of section 2923.5.
Eaglin filed an application for a temporary restraining order (TRO) and a preliminary injunction. The court granted the TRO and issued an order to show cause concerning the preliminary injunction. After briefing and a hearing, the court denied the application for preliminary injunction and dissolved the TRO. Eaglin filed a timely notice of appeal.
LEGAL ANALYSIS
THE TRIAL COURT PROPERLY DENIED THE PRELIMINARY INJUNCTION
Background
The portion of section 2923.5 which is pertinent to this appeal provides:
"(a)(1) A mortgagee, trustee, beneficiary, or authorized agent may not file a notice of default pursuant to Section 2924 until 30 days after initial contact is made as required by paragraph (2) . . . .
"(2) A mortgagee, beneficiary, or authorized agent shall contact the borrower in person or by telephone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. During the initial contact, the mortgagee, beneficiary, or authorized agent shall advise the borrower that he or she has the right to request a subsequent meeting and, if requested, the mortgagee, beneficiary, or authorized agent shall schedule the meeting to occur within 14 days. The assessment of the borrower's financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency. Any meeting may occur telephonically.
"(b) A notice of default filed pursuant to Section 2924 shall include a declaration that the mortgagee, beneficiary, or authorized agent has contacted the borrower, has tried with due diligence to contact the borrower as required by this section, or that no contact was required pursuant to subdivision (h)."
Failure to comply with section 2923.5 may result in an injunction prohibiting a trustee's sale of the property until the lender has complied. Indeed, postponement of the trustee's sale is the only remedy provided by section 2923.5. (Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 214, 222-223, 226-232.)
Eaglin's application for the TRO and preliminary injunction asserted that the notice of default recorded by Wells Fargo failed to include the declaration mandated by section 2923.5, subdivision (b). He also stated that he had never been contacted "by anyone, either organization, person, or entity, whose primary business is advising people who have decided to leave their homes or on how to extend the foreclosure process as required by [section] 2923.5."
The application also asserted that the notice of default violated subdivision (c) of section 2923.5. That subdivision provides:
"If a mortgagee, trustee, beneficiary, or authorized agent had already filed the notice of default prior to the enactment of this section and did not subsequently file a notice of rescission, then the mortgagee, trustee, beneficiary, or authorized agent shall, as part of the notice of sale filed pursuant to Section 2924f, include a declaration that either:
"(1) States that the borrower was contacted to assess the borrower's financial situation and to explore options for the borrower to avoid foreclosure.
"(2) Lists the efforts made, if any, to contact the borrower in the event no contact was made." (Italics added.)
Section 2923.5 was enacted in 2008, and in its current form became effective on January 1, 2010. (Stats. 2008, ch. 69, § 2, eff. July 8, 2008, operative Sept. 6, 2008; Stats. 2009, ch. 43, § 1.) However, the notice of default was recorded on February 19, 2010. Accordingly, section 2923.5, subdivision (c) has no bearing on Eaglin's claims of statutory violations.
In opposition to the order to show cause, Wells Fargo provided evidence that before recording the notice of default, it sent Eaglin at least five letters, to the subject property address, regarding his loan delinquency and asking him to contact Wells Fargo and that it had placed "numerous phone calls" to the telephone number on file on different days and at different times but received no answer each time. It also pointed out that the notice of default does contain the statement of due diligence required by section 2923.5, subdivision (b).
Exhibit B to Wells Fargo's opposition is a letter dated July 27, 2009, addressed to Eaglin at the subject property address, stating that Eaglin had contacted Wells Fargo concerning his financial hardship and setting out the terms of a special forbearance agreement agreed upon by the parties. The forbearance agreement was attached to the letter and appears to have been signed by Eaglin on July 31, 2009. The last letter sent to Eaglin, on January 19, 2010, included a loan modification which Eaglin was to sign and return to Wells Fargo. Eaglin did not do so.
In his reply to Wells Fargo's opposition, Eaglin asserted that Wells Fargo had nevertheless violated section 2923.5 because it did not inform him, during the initial contact, that he had the right to request a meeting to have his financial situation assessed, and because it did not provide him with Department of Housing and Urban Development (HUD) contact information during the initial contact. He acknowledged that Wells Fargo did provide the HUD contact information "days after the initial contact . . . ." He stated that as of the date of his reply to Wells Fargo's opposition, however, Wells Fargo had still not informed him that he had the right to have his financial situation assessed. He stated that if he had been informed of his right to schedule a meeting, he would have requested a meeting at his home. In his declaration in support of his application for a TRO and preliminary and permanent injunction, Eaglin provided a chronology of his contacts with Wells Fargo concerning the delinquency and loan modification efforts.
Three days after the initial contact, to be precise. According to his own chronology, Eaglin first spoke to Wells Fargo about the delinquency on February 27, 2009, and was given the HUD contact information on March 2, 2009, during his next telephone conversation with Wells Fargo.
At the hearing on the application for a preliminary injunction, the trial court found that the requirements of section 2923.5 had been satisfied because Eaglin's papers established that Wells Fargo had assessed his financial situation; provided a trial loan modification; and then offered a longer-term modification which Eaglin rejected because he could not afford it. The court stated that pursuant to section 2923.5, the lender is required only to "explore options" and that once a borrower has rejected a proffered modification, the lender has no further obligation under section 2923.5. The court found that Wells Fargo had explored options with Eaglin. For those reasons, the court denied the preliminary injunction.
Standard of Review
In deciding a motion for preliminary injunction, the trial court determines only two issues: the likelihood that the plaintiff will prevail on the merits at trial and the interim harm the plaintiff is likely to suffer if the preliminary injunction were denied as compared to the harm the defendant is likely to suffer if the preliminary injunction were issued. (People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090, 1109.) We review the trial court's findings on those issues for abuse of discretion. (Ibid.) If, however, the appeal raises issues concerning statutory interpretation or the application of a statute to undisputed facts, we review those issues de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799; People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432.)
The Trial Court Correctly Concluded That Wells Fargo Fulfilled Its Obligations Under Section 2923.5.
On appeal, Eaglin reiterates his position that section 2923.5 requires the lender to initiate contact with the delinquent borrower and that during the initial contact, the lender must both inform the borrower of his or her right to a further meeting within 14 days to assess the borrower's financial situation and discuss options and provide the borrower with HUD contact information. He asserts that the statutory language is mandatory and must be strictly construed, and that any deviation from the requirements of the statute must result in an injunction prohibiting the trustee's sale.
Or so we understand Eaglin's argument.
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In Mabry v. Superior Court, supra, 185 Cal.App.4th 208 (Mabry), Division Three of this court exhaustively analyzed section 2923.5. Among other things, the court held that in order to avoid preemption by the federal Home Owners' Loan Act of 1933 (12 U.S.C. § 1461 et seq.), the words "assess" and "explore" as used in section 2923.5 must be narrowly construed. The lender's duty to assess the borrower's financial situation may be discharged by simply asking the borrower why he or she cannot make the scheduled mortgage payments, and the lender's duty to explore options means merely that the lender must tell the borrower "the traditional ways that foreclosure can be avoided (e.g., deeds 'in lieu,' workouts, or short sales)," and section 2923.5 does not impose on the lender "any duty to become a loan counselor." (Mabry, at p. 232.) The court also held that the "goal" of the statute (presumably meaning the legislative purpose underlying the statute) is to "forc[e] the parties to communicate . . . about a borrower's situation and the options to avoid foreclosure . . . ." (Id. at p. 224.)
We agree with Mabry. Consequently, we hold that the trial court correctly concluded that the undisputed evidence—that communication concerning Eaglin's financial situation took place, that Wells Fargo assessed his situation, that the parties agreed to a trial modification but were unable to agree on a permanent modification— showed that Wells Fargo discharged its obligations under section 2923.5.
The Trial Court Did Not Abuse Its Discretion.
A trial court's exercise of discretion must be viewed in the context of the particular law it is applying. If a court applies the correct legal principles in a manner which, in its reasoned judgment, best effectuates the purposes of that law, then it has not abused its discretion, even if a different court could have reached a different conclusion. (Horsford v. Board of Trustees of California State University (2005) 132 Cal.App.4th 359, 393-394; City of Sacramento v. Drew (1989) 207 Cal.App.3d 1287, 1297-1298.) Here, the evidence supports the trial court's conclusion that the purpose of section 2923.5 was satisfied by Wells Fargo's actions. Accordingly, it was not an abuse of discretion to deny the application for preliminary injunction.
Moreover, even if the court's decision were an abuse of discretion, Eaglin has not shown that it resulted in a miscarriage of justice. (Denham v. Superior Court (1970) 2 Cal.3d 557, 566 [reviewing court should not disturb the exercise of trial court's discretion unless there has been a miscarriage of justice]; Blank v. Kirwan (1985) 39 Cal.3d 311, 331 [burden is on party claiming abuse of discretion to show miscarriage of justice].) Eaglin did not show how he would have benefitted from being informed during his initial contact with Wells Fargo that he could request a subsequent meeting. Section 2923.5, subdivision (a) provides that any meeting may be conducted telephonically, and Eaglin's own declaration shows that he had numerous telephone contacts with Wells Fargo, which ultimately led to the trial modification. Similarly, Eaglin did not show that if Wells Fargo had provided him with HUD's contact information during the initial telephone conversation on February 27, 2009, rather than waiting three days to do so, he would have been able to reach an agreement with Wells Fargo which would have prevented the ultimate default on the loan.
DISPOSITION
The order denying Eaglin's application for preliminary injunction is affirmed. Wells Fargo is awarded costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MCKINSTER
J.
We concur:
HOLLENHORST
Acting P.J.
RICHLI
J.