Opinion
NOT TO BE PUBLISHED
Alameda County Super. Ct. No. 2002-046192
Lambden, J.
Plaintiff and appellant John Clifton Elstead has filed two appeals, which we have consolidated. In No. A117521, Elstead asserts a variety of reasons why we should reverse the trial court’s judgment, issued after the court granted the motion for summary judgment brought by defendants JP Morgan Chase Bank, Chase Manhattan Mortgage Corporation (Chase Manhattan), and Chase Mortgage Services, Inc. (collectively, Chase). In No. A119606, Elstead appeals from the court’s award of $610,530 attorney fees to Chase and against Elstead in an amended judgment.
Chase’s motion and the trial court’s order granting summary judgment were with regard to Chase Manhattan. However, Chase contended in its separate statement of facts that Chase Home Finance, LLC is the successor by merger to Chase Manhattan, the court’s initial judgment, Chase’s motion for attorney fees, and the court’s amended judgment awarding attorney fees referred to Chase Home Finance, LLC rather than Chase Manhattan, and Chase Home Finance, LLC, rather than Chase Manhattan, appears as respondent on appeal. To avoid further confusion we refer to either entity as “Chase Manhattan” throughout this opinion.
We affirm the trial court’s summary judgment regarding all but one of Elstead’s causes of action, that being for breach of contract. Given our reversal regarding this one cause of action, we vacate the trial court’s judgment, the award of attorney fees, and remand this matter to the trial court for further proceedings and orders consistent with this opinion. We dismiss Elstead’s appeal of the attorney fees award, No. A119606, without prejudice as moot and express no views regarding its merits.
BACKGROUND
On April 4, 2002, Elstead filed a complaint which, as amended in August 2005, alleged 11 causes of action against Chase related to a 1988 loan Elstead had obtained to purchase residential real property in Oakland, California. Elstead alleged breach of contract, rescission, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, actual fraud, fraud -intentional misrepresentation, fraud—negligent misrepresentation, false promise, defamation, violation of the Fair Debt and Collection Practices Act, and intentional infliction of emotional distress.
The following background facts are taken from the parties’ separate statements of facts. In October 1988, Elstead borrowed $429,000 from Sutter Mortgage Corporation to purchase residential real property on Woodrow Drive in Oakland, secured by a deed of trust and variable rate promissory note. Elstead contends that as a part of the loan transaction, Sutter waived the right to establish any escrow account, an issue of contention between the parties.
The lower court sustained all of Chase’s evidentiary objections to a declaration submitted by Elstead in opposition to the motion, which facts we therefore do not consider.
Chase Manhattan took over servicing Elstead’s loan, and in April 1995 sent Elstead a foreclosure notice because of his purported default on loan payments. Elstead and Chase Manhattan subsequently entered into a forbearance agreement in May 1995 that required Elstead to make certain payments.
Sometime later, Chase Manhattan notified Elstead that he was again in arrears under the note. Elstead filed for bankruptcy, filed a lawsuit against Chase for the purported “mismanagement” of his account, and removed the suit to the bankruptcy court. Elstead subsequently entered into a settlement agreement with Chase Manhattan. The parties initially reached a settlement on December 19, 1997, but then amended and restated it in the new agreement (Resolution Agreement). Among other things, the Resolution Agreement stated that the total principal balance due on the loan as of December 15, 1997 was $393,082.42, obligated Elstead to pay Chase Manhattan $48,563.21, “in equal monthly installments on the first day of each month for 36 months, at 10% per annum beginning February 1, 1998, until paid in full,” and obligated Chase Manhattan to tender a $15,000 check to Elstead.
The Resolution Agreement was dated January 23, 1998, for “reference” purposes. Chase asserted in its separate statement of facts that the Agreement went into effect on that date, which was when Elstead executed it. Elstead did not dispute this fact, although he “explained” that a Chase representative did not sign the agreement until February 12, 1998.
On February 19, 1998, Elstead wrote to Chase’s counsel that he had not yet received the $15,000 payment, and that he had received two weeks earlier a 1997 mortgage interest statement that gave him “concern” because it listed an ending escrow balance of $17,931.04. Elstead asked what this meant, and wrote, “If it means that Chase is continuing to create an escrow account for taxes and that I am going to get a mortgage statement in the near future that is in excess of my regular monthly payment of principal and interest, we will be right back where we started.” Elstead contends that Chase did not respond to his letter.
The parties do not dispute that on February 24, 1998, Elstead received a foreclosure notice about the property with a stated sale date of March 3, 1998. This foreclosure did not take place. On February 25, 1998, Elstead’s dismissal with prejudice of this first action was filed with the court.
Elstead asserted in his opposition brief below that Lonestar said it would postpone the sale pending an investigation, but did not contact him again despite promising to do so, but he did not cite to statements of facts that contained this evidence.
According to Elstead, about four years later, in March 2002, he wrote to Chase inquiring why his principal and interest checks were being returned to him as “ ‘insufficient to cure default.’ ” Elstead also contends that Chase subsequently wrote back that same month that he was in default and owed principal, interest, escrow, late charges, and fees of $94,570.79, and gave him 30 days to pay that amount or foreclosure action would begin. Elstead then filed this action in April 2002. A preliminary injunction was issued in May 2002 that prohibited Chase from instituting foreclosure proceedings in order to recover on the loan during the pendency of the action.
We take Elstead’s contentions in this paragraph from his separate statement of disputed facts, which refer to exhibits submitted as part of his opposition to Chase’s motion for summary judgment or summary adjudication that we are unable to locate in the record. Other copies of such documents appear to be elsewhere in the record and some are referred to by one or the other party in the appellate briefs.
In April 2006, Chase moved for summary judgment or summary adjudication on a variety of grounds, which Elstead opposed. The trial court granted summary judgment in favor of Chase on a variety of grounds. It found that the parties did not dispute that defendants JP Morgan Chase Bank and Chase Mortgage Services, Inc. were not responsible for the conduct alleged or were not liable for Elstead’s alleged damages; that Elstead’s claims for breach of contract, breach of implied covenant, rescission, and fraud were time-barred by expired statutes of limitations because Elstead was on inquiry notice of wrongdoing in February 1998, as evidenced by his February 19, 1998 letter; that Elstead’s rescission claim failed because the parties could not be returned to their original positions and because Elstead continued to accept the benefits of the Resolution Agreement; that his breach of fiduciary duty claim failed as a matter of law; that his claims for defamation and intentional infliction of emotional distress lacked merit; and that there was no triable issue of material fact regarding the claimed violation of the Fair Debt Collection Practices Act.
The court subsequently issued a judgment in February 2007 stating that Elstead recover nothing. Elstead filed a timely notice of appeal from this judgment.
Subsequently, Chase moved for an award of attorney fees against Elstead. The court issued an amended judgment that awarded $610,530 in attorney fees and $7,747.55 for costs, plus interest as provided by law, to Chase and against Elstead. The court further adjudged that Chase Manhattan was entitled to add $608,030 to the indebtedness owed by Elstead.
Elstead filed a timely notice of appeal from this amended judgment. We consolidated the two appeals by order dated November 8, 2007. After the parties submitted their briefs, we asked for, and received, supplemental briefing from them regarding the relevance of Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479 (Romano) to the trial court’s ruling regarding Elstead’s breach of contract cause of action.
DISCUSSION
I. Standard of Review
The court properly grants summary judgment if the record establishes no triable issue as to any material fact and the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.... A prima facie showing is one that is sufficient to support the position of the party in question.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851.) Although the burden of production shifts, the moving party always bears the burden of persuasion. (Id. at p. 850.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Ibid.) We review the record de novo. (Id. at p. 860.)
Also, if we find no issue of material fact, we affirm the summary judgment if it is correct on any legal ground applicable to the case, “ ‘ “whether that ground was the legal theory adopted by the trial court or not, and whether it was raised by defendant in the trial court or first addressed on appeal.” ’ ” (Moghadam v. Regents of University of California (2008) 169 Cal.App.4th 466, 474-475.)
II. Portions of the Judgment Not Disputed on Appeal
As Chase points out, Elstead does not challenge the trial court’s grant of the motion for summary judgment in favor of JP Morgan Chase Bank and Chase Mortgage Services, Inc. specifically, or regarding his cause of action for alleged violations of the Fair Debt Collection Practices Act. Accordingly, we affirm these parts of the trial court’s judgment, and do not address them further.
III. Elstead’s Acceptance of Benefits and Rescission
Elstead argues that we must reverse the trial court’s ruling that, because the parties cannot be returned to their original positions, his cause of action to rescind the Resolution Agreement fails as a matter of law. We disagree.
“[T]he very purpose of rescission is to restore the parties to the positions that they would have been in had they not entered the contract.” (Atkin v. Certain Underwriters at Lloyd’s London (2006) 140 Cal.App.4th 291, 298.) “Relief given in rescission cases... puts the rescinding party in the status quo ante, returning him to his economic position before he entered the contract.” (Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304, 316, fn. 15.) “ ‘[A] party to a contract who wishes to rescind cannot play fast and loose. He cannot conduct himself so as to derive all possible benefit from the transaction and then claim the right to rescind.’ ” (Saret-Cook v. Gilbert, Kelly, Crowley & Jennett (1999) 74 Cal.App.4th 1211,1226 (Saret-Cook).) Thus, in Saret-Cook, for example, the appellate court held that a plaintiff cannot prejudice a defendant by accepting the benefits of a settlement agreement for five months, and then declare the agreement rescinded. (Id. at pp. 1225-1228.)
In the second cause of action of his first amended complaint, Elstead alleged that there was “a material failure in the consideration received by [Elstead] under the Resolution Agreement. Chase failed to adhere to and perform the acts agreed to under the Resolution Agreement and continues to use an erroneous calculation of the amount [Elstead] agreed to pay under the Resolution Agreement to increase supposed arrearages under the Note.” Elstead offered to restore any benefits he received under the Resolution Agreement.
Elstead indisputably enjoyed the benefits of the 1998 Resolution Agreement before seeking to rescind it seven years later, in 2005. For example, Chase Manhattan did not proceed with its threatened foreclosure, allowing Elstead the continued use of the property. In addition, Chase Manhattan paid him $15,000 and paid certain property taxes. Elstead continued to enjoy these benefits even after learning that Chase Manhattan might not follow their agreement, which he learned of as early as February 1998 as indicated by his February 19, 1998 letter, and certainly after he received Chase Manhattan’s notice of default to him prior to his filing suit in 2002. Thus, the court had sufficient grounds to grant Chase summary judgment with regard to Elstead’s rescission claim. (See, e.g., Saret-Cook, supra, 74 Cal.App.4th at pp. 1226-1227.)
Elstead argues that he is not asking to vacate the dismissal of the first action, claiming this is not necessary to rescind the Resolution Agreement, that he is entitled to rescind the Resolution Agreement in part pursuant to Civil Code section 1692, that dismissal of the first action was a benefit that Chase, rather than he, received, and that he would return the purported only benefit he did receive, the money Chase Manhattan paid to him pursuant to the agreement. Elstead’s arguments are flawed in a number of ways. First, his pleading does not seek partial rescission of the Resolution Agreement. Second, whether or not he (as opposed to Chase) benefitted from the dismissal of his first lawsuit, the settlement allowed him to avoid a foreclosure fight. Third, whether or not he returns the money paid to him, he has had the use of it for a considerable period of time, which is a benefit by itself.
Elstead argues that the court’s determination that he ratified and accepted the benefits of the Resolution Agreement was based on the false premise that the agreement contained a provision preventing Chase from foreclosing on the loan, which was only prevented by a preliminary injunction, facts Elstead contends distinguish his case from Saret-Cook, supra, 74 Cal.App.4th 1211. Elstead’s point elevates form over substance. While the Resolution Agreement did not contain a specific provision barring foreclosure, it states that the agreement “is entered into with reference to,” among other facts, Chase Manhattan’s initiation of foreclosure proceedings. Plainly, Chase did not proceed with the foreclosure upon the settlement.
Thus, we affirm the trial court’s grant of summary judgment regarding Elstead’s rescission claim.
The trial court also ruled that Elstead’s rescission claim was time-barred for the same reasons as those discussed in part VII, post. We do not address this aspect of the court’s ruling in light of our conclusion here.
IV. Intentional Infliction of Emotional Distress
Elstead next argues that the trial court erred with regard to his intentional infliction of emotional distress claim, primarily because Chase offered facts that were insufficient for a grant of summary judgment. We disagree.
Elstead also contends that the court relied on the wrong facts in making its ruling because it cited Chase’s separate statement of facts, facts 62 through 72, regarding punitive damages, rather than facts 20 and 21, regarding his intentional infliction of emotional distress claim. As Chase points out, facts 62 and 63 are identical to facts 20 and 21, making this a distinction without a difference.
The trial court ruled in favor of Chase based upon its finding that “Chase has established that there is no triable issue with regard to the element of ‘outrageous’ conduct.” Elstead argues error because “Chase, having already forced Elstead to file bankruptcy to stop one wrongful foreclosure, manufactured another wrongful foreclosure by not applying his payments to the loan and refused to communicate with him because it continued to treat him as if he was in bankruptcy long after the bankruptcy was dismissed.” Elstead also contends that Chase did not offer sufficient facts to address the element of “outrageous conduct.” These arguments are unpersuasive.
“ ‘The elements of the tort of intentional infliction of emotional distress are:
“ ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct....’ Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” [Citation.] The defendant must have engaged in “conduct intended to inflict injury or engaged in with the realization that injury will result.” ’ ” (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001.)
In his first amended complaint, Elstead alleged Chase pursued an outrageous course of conduct that was intended to cause him severe emotional distress, and was in reckless disregard of the probability of causing him this distress. Specifically, Chase purportedly knew that the property was important to Elstead, and that Chase’s continued threats to foreclose without telling Elstead why would cause him severe emotional distress. Elstead alleged that as a result, he had suffered “anxiety, worry, mental, and emotional distress.”
In its motion for summary judgment, Chase correctly pointed out, among other things, that “[a]n assertion of legal rights in pursuit of one’s own economic interests does not qualify as ‘outrageous’ under the standard” required for an intentional infliction of emotional distress claim. (Yu v. Signet Bank/Virginia (1999) 69 Cal.App.4th 1377, 1398 (Yu).) In our own research, we have found the instruction of our colleagues in Division Five of this District that “[t]he assertion of an economic interest in good faith is privileged, even if it causes emotional distress. [Citation.] In debtor/creditor cases, the privilege is qualified, in that it can be vitiated where the creditor uses outrageous and unreasonable means in seeking payment.” (Ross v. Creel Printing & Publishing Co. (2002) 100 Cal.App.4th 736, 745, fn. 4.) Such a claim does not extend to conduct constituting “ ‘mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities.... [P]laintiffs must necessarily be expected and required to be hardened to a certain amount of rough language, and to occasional acts that are definitely inconsiderate and unkind.’ ” (Cochran v. Cochran (1998) 65 Cal.App.4th 488, 496.) Thus, the law allows a lender to pursue its own economic interests pursuant to its contractual rights, even if it does so callously, without being subject to a claim for intentional infliction of emotional distress.
Chase argued to the trial court that Elstead could not prove outrageous conduct under the circumstances because it was merely pursuing its own economic self-interest by exercising its contractual rights in the face of Elstead’s default on the loan. It contended that Elstead’s evidence was based on Chase’s notice to him of its intent to foreclose on his property, and comments allegedly made in a few internal Chase memoranda, such as that Elstead was a “delightful man,” and that Chase needed to “dot all the ‘I’s’ and cross all the ‘T’s’ because we are dealing with an attorney,” which evidence was insufficient to maintain his claim.
Elstead argued to the trial court that Chase “stretche[d] legal imagination” when it asserted that it was exercising its contractual rights because it “broke every agreement with [Elstead] and manufactured bogus foreclosures by escrowing the Loan for property taxes and not applying his payments to the Note,” and that this conduct was sufficiently outrageous to support his claim. He made numerous related contentions, in his opposition brief, accompanying declaration, and separate statement of facts, including that Chase sought to foreclose on his property although he was not actually in default of his required monthly payments, that he had paid the $48,563.21 called for by the Resolution Agreement in one February 1998 check payment, that Chase had failed to apply this payment to his loan and placed it in a suspense account instead, that Chase misconstrued the Resolution Agreement to mean he had to make a one-time payment and monthly payments, that Chase had mishandled his loan account, such as by escrowing his payments without authority or knowledge, that Chase made mistakes with his loan account that it discovered internally but did not correct, that Chase had treated him as if he were in bankruptcy when he was not, and that Chase improperly pursued foreclosure against him, while its employees and representatives repeatedly refused to discuss matters with him despite his repeated inquiries.
Chase also contended that Elstead admitted that he did not incur any physical injury. Elstead correctly pointed out that such evidence was not necessarily required for him to maintain his emotional distress claim. (See Potter v. Firestone Fire & Rubber Co., supra, 6 Cal.4th at pp. 985-988.) It is not necessary for us to further address this issue in order to resolve Elstead’s appeal.
Elstead also disputed Chase’s separate statement of facts regarding the evidence for his emotional distress claim by citing his own deposition testimony. This did nothing to help his cause. Asked in deposition for the evidence in support of his claim, Elstead, in addition to referring to unspecified internal Chase memoranda that are consistent with Chase’s characterizations, stated that internal documents reflected that Chase knew they had made a mistake and had failed to correct it, and that Chase did not send him monthly statements or talk to him while trying to take his house away. This deposition testimony was too vague and uncertain to raise an evidentiary dispute.
Thus, Elstead’s argument is largely factual—he essentially contends that he submitted sufficient disputed facts below to raise a triable issue of fact as to whether Chase, knowing it was in the wrong, deliberately pursued actions against him leading to its threatened foreclosure without communicating with Elstead in order to intentionally cause him severe emotional distress. Given his theory, if there are undisputed facts indicating that Chase acted in good faith based on its belief that he was in default and that it was entitled to foreclose on Elstead’s property, Chase’s conduct, while perhaps callous, such as purportedly not communicating with Elstead, was not outrageous, and Elstead’s appeal must be rejected. (Yu, supra,69 Cal.App.4th at p. 1398; Ross v. Creel Printing & Publishing Co., supra, 100 Cal.App.4th at p. 745, fn. 4; Cochran v. Cochran, supra, 65 Cal.App.4th at p. 496.)
Chase presented such undisputed facts to the trial court in light of the court’s sustaining of Chase’s evidentiary objections to certain statements in Elstead’s declaration and separate statement. Chief among the court’s ruling was its sustaining of Chase’s objection to Elstead’s claim that he paid $48,563.24 by check in February 1998. Elstead did not come forward with documentary evidence of this payment other than a handwritten letter, stating in his opposition brief that he could not find the computer-processed version because he had switched to a new computer and could not retrieve the letter. The court ruled that his statement that he had made the payment was inadmissible under the secondary evidence rule. It explained: “[Elstead] does not provide a sufficient explanation for his failure to produce a writing. The court notes that the handwritten cover letter produced by [Elstead], and allegedly sent with a check is inadmissible. This letter is equivalent to an oral representation that a writing once existed, and his explanation for the absence of a copy of the original writing is unconvincing and is insufficient to show a lack of fraudulent intent. In any event, [Elstead] offers no explanation for his inability to provide any written evidence of an actual check for $48,563.24 in favor of Chase. Evidence Code [section] 1523 [subdivisions] (a), (b).”
Elstead also insisted that Chase’s internal records indicated Chase had received his check, as indicated by a February 27, 1998 notation stating, “RCVD 149,620.71 CK, NOT SURE HOW TO APPLY CALLED STEVE COHEN.” There was no evidence that Elstead paid this check, and no further evidence regarding who made this payment, what it was for, or what occurred with this check. Chase Home Finance, LLC Vice President William Becker stated that “[b]ased on the amount, the remark appears unrelated to this matter. I have been unable to locate additional information regarding the system remark.” Given these circumstances, we fail to see how this notation was evidence of a payment by Elstead.
Elstead has waived any challenge to this ruling by his failure to raise it in his appellate opening brief. (Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125 [“an appellant’s failure to discuss an issue in its opening brief forfeits the issue on appeal”]; Mansell v. Board of Administration (1994) 30 Cal.App.4th 539, 545.) We disregard his reply brief arguments. “It is elementary that points raised for the first time in a reply brief are not considered by the court.” (Levin v. Ligon (2006) 140 Cal.App.4th 1456, 1486.) Therefore, there is no evidence before us that he made such a payment.
On the other hand, Chase submitted evidence to the trial court that, according to its records, Elstead did not make the payment. Specifically, Chase submitted the declaration of William I. Becker, a Chase Home Finance, LLC Vice President, who was “thoroughly familiar with the process by which Chase generates documents and maintains its records in relation to home loan borrowers.” Becker attached to his declaration a “payment history” related to the Elstead loan that “was prepared for the purposes of the instant litigation to be used as a reference of the detailed transactions affecting the Elstead Loan,” which information was extracted from Chase’s records without any “human interaction to introduce errors in the process.” He stated that the payment history did not “reflect any evidence of the payments of the $48,563.21 by Elstead to Chase” pursuant to the Resolution Agreement.
Thus, the undisputed evidence indicates Chase was pursuing its own economic interests as lender in good faith when it declared default and moved to foreclose on Elstead’s property in 2002. While Chase, to the extent its representatives might have failed to communicate with Elstead about his loan, may have acted callously, we conclude such conduct was not “outrageous” as a matter of law in light of the nature of Elstead’s allegations and the undisputed evidence of his default on the Resolution Agreement payment. (Yu, supra, 69 Cal.App.4th at pp. 1397-1398; Ross v. Creel Printing & Publishing Co., supra, 100 Cal.App.4th at p. 745, fn. 4; Cochran v. Cochran, supra, 65 Cal.App.4th at p. 496.) Therefore, Elstead’s argument that the trial court erred is unpersuasive.
It is unclear, but Elstead may contend that he has based part of his intentional infliction of emotional distress claim on events that occurred prior to the Resolution Agreement, however illogical that may be in light of the general release he acknowledges he made in that agreement. He did not raise such contentions in his opposition to Chase’s arguments about his intentional infliction claim and, therefore, we will not consider them further.
V. Defamation
In his opening appellate brief, Elstead argues that the trial court should not have granted summary judgment regarding his defamation claim because “[t]he record clearly shows a triable issue as to whether Elstead was in arrears and, therefore, whether he was also defamed.” We affirm the trial court’s ruling.
In his first amended complaint, Elstead alleged that Chase wrote to consumer reporting agencies that Elstead was in default of the loan and owed supposed arrearages, and that when the consumer reporting agencies published the supposed default and arrearages, the statements were false, and known by Chase to be false. He further contended that the written publications were defamatory on their face, and exposed him “to contempt, ridicule, and obloquy and have a tendency to injure him in his occupation” because they implied that he was not successful in his law practice and unable to pay his debts.
The trial court granted Chase’s motion regarding Elstead’s defamation cause of action on three independent grounds. Specifically, the court found that “[t]he communication that [Elstead] was in arrears... was true.... [Elstead’s] evidence of damages is too speculative to support an award of damages in his favor.... In addition, in light of the large tax lien filed by the IRS, it does not appear that [Elstead] could show that the communication by Chase caused any significant damage to his credit or reputation.”
In his opening brief, Elstead challenges only one of these three grounds, the ruling that the purportedly defamatory communication was true because Elstead was in arrears. His failure to address the trial court’s other two grounds for its ruling in his opening brief is fatal to his appellate claim. (Christoff v. Union Pacific Railroad Co., supra, 134 Cal.App.4th at p. 125; Mansell v. Board of Administration, supra, 30 Cal.App.4th at p. 545.) We disregard Elstead’s reply brief arguments regarding the other two grounds. (Levin v. Ligon, supra, 140 Cal.App.4th at p. 1486.)
VI. Breach of Fiduciary Duty
Elstead also argues that the trial court erred when it granted Chase’s motion regarding his breach of fiduciary duty claim. Elstead acknowledges the general rule that lenders do not owe fiduciary duties to borrowers, but nonetheless claims that the court overlooked that Chase “assumed control of Elstead’s payments and became a fiduciary when it set up the escrow account for tax purposes and diverted his payments into a suspense account.” According to Elstead, by taking these actions, Chase “effectively became his agent and fiduciary,” creating a triable issue of fact. As the trial court recognized, this is incorrect.
Generally, “[t]he relationship between a lending institution and its borrower-client is not fiduciary in nature. [Citation.] A commercial lender is entitled to pursue its own economic interests in a loan transaction. [Citation.] This right is inconsistent with the obligations of a fiduciary which require that the fiduciary knowingly agree to subordinate its interests to act on behalf of and for the benefit of another.” (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1093, fn. 1.) It is clear that “with respect to ordinary banking transactions, ‘the bank is in no sense a true fiduciary.’ ” (Peterson Development Co. v. Torrey Pines Bank (1991) 233 Cal.App.3d 103, 119.)
The trial court concluded that there was “nothing before the court to support the conclusion that Chase assumed a duty to put [Elstead’s] interests before its own.” We agree. Elstead does not provide any facts or relevant legal authority which establishes that Chase’s establishment of any escrow or suspense accounts somehow made it Elstead’s fiduciary.
Indeed, as Chase points out, one of the cases cited by Elstead actually supports Chase’s position. In Peterson Development Co. v. Torrey Pines Bank, supra,233 Cal.App.3d 103, the plaintiff obtained a construction loan from the defendant bank, which performed certain escrow activities related to the loan. (Id. at pp. 107-111.) The trial court, in granting summary judgment for the bank, rejected Peterson’s theory that these activities created a fiduciary relationship between the parties. (Id. at p. 107.) The appellate court affirmed, rejecting Peterson’s theory that the bank’s escrow activities created a fiduciary relationship, finding that the facts were “consistent with only one conclusion: at the time of the transaction, the relationship between borrower and lender fell into the usual category of an arm’s-length, adverse, ‘normal commercial banking transaction[ ].’ [Citation.] Despite the receipt of an ‘escrow statement’ from [the bank] and Peterson’s awareness [the bank] processed all loan papers, there are no triable issues as to whether Peterson reasonably reposed particular trust and confidence in [the bank] as a fiduciary, or whether [the bank] accepted such particular reliance. No third party was ever involved in this transaction, nor did [the bank] hold itself out to be a neutral, objective, disinterested conduit for the parties’ exchange of documents and money. There could have been no reasonable reliance on any such representations that were never made.” (Id. at p. 119.) Similarly, in the present case, Elstead does not point to anything which indicates that Chase ever held itself out as a neutral conduit or assumed fiduciary duties with regard to Elstead’s interests.
The other cases Elstead cites are inapposite. Amen v. Merced County Title Co. (1962) 58 Cal.2d 528, involved the failure of an acknowledged fiduciary, a title company that acted as escrow holder for a buyer of a tavern, to fulfill its obligations. (Id. at pp. 530-531.) In Vai v. Bank of America (1961) 56 Cal.2d 329, the court ruled in a dispute between the estate of a deceased husband and his wife over the distribution of community property, that the husband had assumed and maintained certain fiduciary obligations regarding the community property, despite the deterioration of the marriage. (Id. at pp. 333-338.) In Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1977) 67 Cal.App.3d 19, disapproved on other grounds in Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 407, the court determined that the validity of an arbitration clause between a stock brokerage and its client should be judicially determined in light of the client’s allegations that she, elderly and unschooled in financial matters, had relied upon the expertise of her stockbroker and had “reposed the greatest confidence and trust” in defendants, who had, with knowledge of her ignorance, made certain misrepresentations to her. (Main, at pp. 30-33.) None of these circumstances is relevant to the present case, which involves an ordinary, arm’s-length loan transaction and related activities.
VII. Causes of Action Subject to the Court’s Statute of Limitations Ruling
The trial court granted Chase’s motion for summary judgment regarding Elstead’s causes of action for breach of the covenant of good faith and fair dealing, four varieties of fraud (fraud, intentional misrepresentation, negligent misrepresentation, and false promise), and breach of contract, finding them to be time-barred. The court found that Elstead had inquiry notice of wrongdoing in February 1998, as indicated in his February 19, 1998 letter to Chase’s attorney, causing the statute of limitations to begin running, and to expire, before Elstead filed suit more than four years later, in April 2002. We review the court’s ruling for each of these causes of action.
The court included Elstead’s rescission claim in this analysis, but we do not discuss it further in light of our ruling in part III, ante.
A. Breach of the Covenant of Good Faith and Fair Dealing
Chase argues that the trial court ruled correctly that Elstead’s breach of the covenant of good faith and fair dealing cause of action was time-barred, and also that summary judgment was proper because, as it argued below, it had no such duty to Elstead as a matter of law. We affirm based on Chase’s lack of duty, although the trial court did not rely on this ground for its ruling. (Moghadam v. Regents of University of California, supra, 169 Cal.App.4th at pp. 474-475.)
In his first amended complaint, Elstead alleged that there was implied in the deed of trust, note, purported waiver, forbearance agreement, and Resolution Agreement “a covenant of good faith and fair dealing whereby Chase covenanted that it would act in good faith and deal fairly with [Elstead] with respect to these agreements and would do nothing to impair, interfere with, hinder, or potentially injure [Elstead’s] rights under those agreements.”
Chase has no such duty to Elstead, as indicated by Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, in which the plaintiffs had obtained several loans from a bank secured by their real property. (Id. at pp. 471-474.) When the plaintiffs had difficulty making loan payments, the bank agreed to a revised payment schedule and, when plaintiffs’ difficulties continued, initiated foreclosure proceedings; plaintiffs sued, including for breach of the covenant of good faith and fair dealing. (Id. at pp. 472-475.) The appellate court affirmed the trial court’s dismissal of this cause of action by summary judgment, finding that there was nothing special about their lender-borrower relationship that invoked the duty of good faith and fair dealing. (Id. at p. 478.) Similarly, in Mitsui Manufacturers Bank v. Superior Court (1989) 212 Cal.App.3d 726, the appellate court found an ordinary arm’s-length commercial lender-borrower relationship an insufficient basis for the tort. (Id. at p. 730.)
Here the undisputed facts indicate that the relationship between the parties was of the ordinary lender-borrower variety. Elstead interacted with Chase Manhattan, the lender’s agent, as borrower in an ordinary residential loan transaction, albeit one with some twists and turns along the way as the parties entered into further agreements to resolve disputes between them related to the loan. These agreements did nothing to alter the character of their relationship. Accordingly, we affirm the trial court’s ruling based on this lack of duty. In light of our holding, we do not address the trial court’s conclusion that the claim was time-barred.
B. Elstead’s Fraud-Based Claims
Regarding the trial court’s ruling that his fraud-based causes of action were time-barred, Elstead argues that there is at least a triable issue of fact as to whether these causes of action accrued within the statute of limitation periods. We disagree.
The parties do not disagree about the governing law. Both sides cite cases indicating that a cause of action accrues when the elements of the claim have been met, causing the commencement of the statute of limitations period unless a party is unaware of the wrongdoing, in which case the commencement is delayed until the party at least has inquiry notice that some wrongdoing may have occurred. In other words, “[t]he discovery rule provides that the accrual date of a cause of action is delayed until the plaintiff is aware of her injury and its... cause.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110 [cited by Chase; Code Civ. Proc., § 338, subd. (d) [an action for relief from fraud or mistake “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake”].) The discovery rule presumes that the action would otherwise accrue, meaning that an injury has already taken place, but has not been discovered. Thus, “[u]nder the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her.... A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Jolly, at pp. 1110-1111; see also Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, 873-875 [in another case cited by Chase, plaintiff’s fraud claims related to her relinquishment of stock were time-barred because she had not investigated the stock’s true value].)
Chase argues that the court’s ruling was correct because “a cause of action accrues if a plaintiff is apprised of facts that would put it on notice that something is wrong,” and that “[i]nquiry notice of potential wrongdoing is enough.” Chase characterizes Elstead’s argument as that the statute of limitations “should not begin to run until he had actual knowledge of the facts giving rise to his... claims,” relying heavily on Miller v. Bechtel Corp., supra, 33 Cal.3d 868, in doing so. Chase’s characterization fails to address Elstead’s arguments, however, they being that the fraud-based causes of action had not yet accrued in February 1998 for lack of damages, and that he had no reason to believe Chase was engaged in any ongoing wrongdoing at that time.
Regarding his “no accrual” argument, Elstead contends that the escrow balance he referred to in his February 19, 1998 letter was for the end of 1997 and, therefore, it reflected Chase’s escrowing activity before the parties entered into the Resolution Agreement. He contends that in his letter he simply asked about Chase’s possible escrowing in the future, i.e., if Chase was continuing to create an escrow account for taxes and if he was going to get a mortgage statement in the future that was in excess of his regular monthly payments for principal and interest. Therefore, argues Elstead, a claim for damages in February 1998 would have either been barred by the settlement or improperly premised on the mere threat of future harm, i.e., it would have not accrued. Elstead claims that “he had nothing from Chase indicating that it was going to escrow again and invite another lawsuit.” He further contends that the first time he had information of actual wrongdoing was in September 2001, well within the statute of limitations period, when Chase sent back a payment to him as insufficient although he had been making regular principal and interest payments.
Elstead’s arguments are unpersuasive regarding his fraud-based causes of action because in his first amended complaint, he alleged that Chase made intentional or negligent misrepresentations to him in order to induce him into entering into the original loan documents, the forbearance agreement, and the Resolution Agreement, all of which he entered into before he sent his February 19, 1998 letter. Elstead specifically alleged that, but for Chase’s false statements, “he would not have entered into these agreements and would have filed an action against Chase sooner than he has,” and made payments pursuant to these agreements. Thus, Elstead’s own theory is that he relied on misrepresentations to enter into the agreements themselves, and it logically follows that he was damaged by incurring these obligations, making payments, and foregoing his lawsuit. For example, the Resolution Agreement required that he pay $48,563.21 to Chase and dismiss his lawsuit; Elstead has contended that he paid $48,563.24 in one check on February 23, 1998, and his first lawsuit dismissal with prejudice was filed on February 25, 1998. Under Elstead’s theories, he certainly could have sued for damages as of these two dates. (See, e.g., McKeown v. First Interstate Bank (1987) 194 Cal.App.3d 1225, 1229-1231 [rejecting the argument that accrual did not take place until a tax court judgment became final, finding that paying attorney fees and receiving the government’s deficiency notice constituted harm sufficient to commence the statute of limitations period].) Therefore, his fraud-based causes of action accrued in February 1998.
Furthermore, Elstead had inquiry notice of wrongdoing at that time. Elstead makes much of the fact that a Chase representative did not execute the Resolution Agreement until February 12, 1998, after Elstead contends he received the 1997 statement. However, the Resolution Agreement itself states that the parties had reached an agreement on December 19, 1997. The Resolution Agreement is dated January 23, 1998, for reference purposes, the same date Elstead signed it. Furthermore, the Agreement states the parties’ agreement that the total principal balance due on the loan as of December 15, 1997 was $393,082.42. Yet in early February 1998, Elstead received a statement showing an end-of-year escrow balance for 1997—in other words, he received notice that Chase had continued to maintain an escrow balance after the parties’ initial December 1997 settlement, and also had sent him a statement that referred to an escrow balance after Elstead had executed the Resolution Agreement. Regardless of when Chase’s representative actually executed the Resolution Agreement, each of these circumstances by itself gave Elstead reason to believe that regardless of their settlement Chase was continuing to engage in the escrowing activity that he had so vigorously protested against. Thus, Elstead was on sufficient inquiry notice as of February 1998 for the three-year statute of limitations to begin running on his fraud-based causes of action.
See Civil Code section 338, subdivision (d).
In short, the court correctly concluded that the fraud-based claims were time-barred. Given Elstead’s pleadings, his claims had accrued and Elstead was on inquiry notice of possible wrongdoing in February 1998.
C. Elstead’s Breach of Contract Cause of Action
Elstead also argues that the trial court erred by ruling that his breach of contract claim was time-barred, for the same reasons as those he asserts regarding his fraud-based causes of action. We agree with Elstead to a point, but not necessarily for the reasons he states.
In our independent research, we have found a holding by our Supreme Court that is directly applicable here. The court stated in Romano, supra, 14 Cal.4th 479, “whether the breach is anticipatory or not, when there are ongoing contractual obligations the plaintiff may elect to rely on the contract despite a breach, and the statute of limitations does not begin to run until the plaintiff has elected to treat the breach as terminating the contract. [Citation.] In the context of successive breaches of a continuing contractual obligation, we have explained: ‘ “In such a contract, where the parties did not mutually abandon or rescind it upon a breach or successive breaches, the injured party could wait until the time arrived for a complete performance by the other party and then bring an action for damages for such breaches. [Citation.] Respondent was not bound to treat the contract as abandoned on the first breach of it, or on any particular breach, but had his election to still rely on it, and the statute of limitations could not begin to run until it had made its election.” ’ ” (Id. at pp. 489-490, italics added.)
Chase, in its supplemental briefing on Romano, supra, 14 Cal.4th 479, argues that Romano is not applicable here because Elstead alleged actual breaches, rather than anticipatory ones, and had notice of the alleged actual breaches. Chase also urges that “for public policy reasons, the holding in Romano should not be extended to the mortgage context.” These arguments are unpersuasive. First, the notice Elstead received in February 1998 related to the continuation of an escrow account. As our discussion below suggests, this did not necessarily give Elstead notice of the breaches that he claims later occurred. In any event, Romano’s holding is not limited to anticipatory breaches when parties have continuing contractual obligations, as is indicated by the very beginning of the passage that we quote directly above (“whether the breach is anticipatory or not”).
In his supplemental briefing, Elstead contends that, consistent with the Romano court’s preference to leave unpenalized a plaintiff who gives a defendant an opportunity to retract a contractual repudiation (Romano, supra, 14 Cal.4th at p. 489), “Chase... took the opportunity to retract any escrowing after the 1998 agreement suggested by the 1997 statement and continued to perform under the note and deed of trust.” Elstead bases this contention on the Becker declaration that Chase submitted in support of the summary judgment motion below. However, Elstead does not direct us to such a “retraction” contention in the parties’ separate statements, nor contend that he knew of this “retraction” at the time. Therefore, we do not consider it further in analyzing the trial court’s summary judgment ruling.
We also reject Chase’s public policy argument. Chase argues that we should not “extend” the holding in Romano to the mortgage context because it could result in “extraordinarily unmanageable results whereby borrowers could bring claims against lenders 30 to 40 years after the alleged breach, simply due to ongoing payment obligations.” However, our Supreme Court in Romano, supra, 14 Cal.4th 479, merely stated a longstanding principle in contracts law. Among other things, the court relied on Witkin’s general discussion of anticipatory breach of contract in his summary of California law and on the court’s previous decision in Taylor v. Johnston (1975) 15 Cal.3d 130 (Taylor) (Romano, at p. 489; 1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 806, p. 727), which involved a breach of contact regarding the breeding of horses (Taylor, supra, at pp. 132-134). Taylor in turn relied on an older Supreme Court case, Guerrieri v. Severini (1958) 51 Cal.2d 12, which involved a breach of contract for the sale of wine (id. at pp. 16-19). (Taylor, at p. 137.) Taylor also relied in part on Salot v. Wershow (1958)157 Cal.App.2d 352, which considered a claimed anticipatory repudiation of a promissory note and deed of trust (id. at pp. 353-358). (Taylor, at p. 138.) Thus, our survey of the law indicates that we have no basis for limiting the application of Romano as Chase suggests because Romano is based on legal principles that have long been applied in various contexts. Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, cited by Chase because of its reference to Romano in the wrongful termination context, does not limit these principles either. (Jordache, at pp. 756-757.) Therefore, we conclude that Romano fully applies to the present circumstances, as follows.
The trial court correctly found that Elstead was on inquiry notice of Chase’s purported wrongdoing as of his receipt of the end-of-year statement from Chase in February 1998. However, this notice did not commence the statute of limitations period for all of Elstead’s breach of contract claims. Specifically, regarding the deed of trust, note, and purported waiver, Elstead pled in his first amended complaint that he agreed to make monthly payments, and Chase agreed to accept these payments and apply them to principal and interest, but refused, creating unwarranted defaults under the note. Elstead’s opposition in the trial court included numerous contentions, and the record indicates, this ongoing contractual relationship continued after April 1998. Chase Home Finance, LLC Vice President Becker stated in his declaration that “as of February 12, 2002, the Elstead loan was paid to July 2000.” Chase does not establish that Elstead took any actions before April 1998 electing to treat these agreements as abandoned. Therefore, pursuant to Romano, supra, 14 Cal.4th 479, we conclude that the trial court erred when it ruled that Elstead’s breach of contract claims regarding the note, deed of trust, and purported waiver were time-barred.
As for the forbearance agreement, Elstead alleged in his first amended complaint, and submitted a separate statement of facts to the trial court contending that he had satisfied his obligations by December 1995, and that this was confirmed by the existing foreclosure agent at the time, who also confirmed that Elstead’s loan would be reinstated according to its original terms. Elstead further contended to the trial court that Chase subsequently failed to honor that agreement, as reflected by a May 1997 statement it sent to him, which led to Elstead’s first lawsuit, filed in August 1997, in which he sued Chase for, among other things, breach of the foreclosure agreement, contending that he had satisfied each and every covenant and condition required of him under that agreement, and sought damages in excess of $850,000. As we have already discussed, this action was dismissed with prejudice at Elstead’s request in February 1998, as part of the Resolution Agreement, which itself contained a general release. Given these contentions and facts, we conclude that the parties did not have any ongoing contractual duties towards each other regarding the foreclosure agreement as of April 1998. Therefore, the trial court correctly ruled that Elstead’s breach of contract claim regarding the foreclosure agreement was time-barred.
As for the Resolution Agreement, Elstead pled in his first amended complaint that Chase failed and refused, and continued to fail and refuse, to adhere to and perform the acts agreed to under the Resolution Agreement. He further pled that “Chase erroneously calculated the amount [Elstead] agreed to pay under the Resolution Agreement and has added that erroneous amount to supposed arrearages under the Note. Chase has also declared that [Elstead] is in default under the Note and has threatened, and continues to threaten, to institute foreclosure proceedings to sell the [property] and take it away from [Elstead].” Elsewhere in his first amended complaint, Elstead made plain that he was referring to Chase’s conduct after April 1998 in making these claims of breach of the Resolution Agreement. Chase did not contend otherwise, merely stating in its separate statement of facts that Elstead “testified at his deposition that [Chase] breached the [February 1998] Resolution Agreement ‘within weeks’ of entering into the Agreement.” This contention does not establish that Elstead and Chase had no contractual relationship beyond April 1998 pursuant to the Resolution Agreement and, in fact, the Agreement called for Elstead to make 36 months of payments to Chase. We conclude that the court erred when it ruled that Elstead’s breach of contract claims regarding the Resolution Agreement were time-barred. (Romano, supra, 14 Cal.4th 479.)
DISPOSITION
We affirm the trial court’s summary judgment regarding all but one of Elstead’s causes of action, that being for breach of contract. We vacate the trial court’s judgment, including as amended to award of attorney fees, and remand this matter to the trial court for further proceedings and orders consistent with this opinion. We dismiss Elstead’s appeal (A119606) of the attorney fees award without prejudice, as moot. The parties are to bear their own costs of appeal.
We concur: Kline, P.J., Richman, J.
Elstead also contends that other documents contained in the record show that he was not in arrears on his payment obligations, such as his monthly principal and interest checks to Chase, certain internal Chase documents, and certain monthly statements by Chase which called for only regular principal and interest payments, as well as documents indicating that Chase took so long to indicate that he was in default. Elstead’s record citations are not to exhibits submitted in opposition to the summary judgment motion, however. Putting that issue aside, these documents do not establish that he satisfied his payment obligation under the Resolution Agreement.