Opinion
G055241
12-03-2018
JAY W. GARBUTT, Plaintiff and Appellant, v. NEW PENN FINANCIAL, LLC, et al., Defendants and Respondents.
Jay Garbutt, in pro. per., and Jeffrey Lewis for Plaintiff and Appellant. Yu | Mohandesi, B. Ben Mohandesi, Pavel Ekmekchyan and Sara Stratton for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00761109) OPINION Appeal from a judgment of the Superior Court of Orange County, Timothy L. Gibbs, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed. Jay Garbutt, in pro. per., and Jeffrey Lewis for Plaintiff and Appellant. Yu | Mohandesi, B. Ben Mohandesi, Pavel Ekmekchyan and Sara Stratton for Defendants and Respondents.
INTRODUCTION
Jay Garbutt, representing himself, appeals from a judgment in favor of respondents New Penn Financial, LLC, and the Bank of Mellon (formerly known as the Bank of New York (Mellon)), entered after the trial court granted respondents' motion for summary judgment. Garbutt and his wife, Deborah, sued respondents, among others, regarding a home mortgage. The Garbutts' complaint was eventually reduced to claims for breach of contract, the alleged breach being respondents' failure to offer the Garbutts a loan modification.
Deborah Garbutt was a plaintiff in the trial court. She is not, however, a party to this appeal.
We affirm the judgment. After respondents presented evidence that the Garbutts' causes of action for breach of contract had no merit, the Garbutts failed to present admissible evidence of a triable issue of material fact. The Garbutts, in fact, barely presented any evidence at all. Instead, they relied almost entirely on allegations of the unverified third amended complaint to oppose the summary judgment motion. Code of Civil Procedure section 437c, subdivision (p)(2), expressly forbids a plaintiff to rely on allegations or denials of its pleadings to show a triable issue of material fact. As the Garbutts relied on their pleadings and failed to present other admissible evidence of a triable issue of fact, the motion was correctly granted.
All further statutory references are to the Code of Civil Procedure.
FACTS
Garbutt and his wife borrowed $470,000 in 2004 to refinance their home in Anaheim. The loan was secured by a deed of trust in favor of Countrywide Home Loans, Inc.
Garbutt alleges he was unemployed in 2013. In May of that year, Bank of America, N.A. (BofA), Countrywide's successor as loan servicer, offered a six-month loan forbearance, effective between May 1 and November 1, 2013, under the federal Home Affordable Unemployment Program (HAUP). Unless certain conditions - spelled out in the offer letter dated May 2, 2013 - occurred during the forbearance period, the Garbutts would not have to make monthly payments of principal, interest and escrow amounts for six months. At the end of six months, they would be responsible for all past due payments, including those suspended during forbearance. If they could not pay this amount and resume their regular monthly payments, BofA would evaluate them for (1) a loan modification, (2) an additional forbearance plan, or (3) a short sale or deed in lieu of foreclosure. BofA also undertook to contact them 30 days before the forbearance period expired either asking for missing financial information or describing the next steps to determine whether their loan was eligible for modification under the Home Affordable Modification Program (HAMP).
As the forbearance period was expiring, BofA contacted the Garbutts, in September and October of 2013, urging them to apply for a HAMP modification and requesting the necessary documentation. The Garbutts did not respond. The forbearance period ended on November 1, 2013.
Effective December 1, 2013, Resurgent Capital Services, LP, took over servicing the Garbutts' loan from BofA. In March 2014, New Penn, d/b/a Shellpoint Mortgage Servicing (Shellpoint), became the loan servicer, as successor-in-interest to Resurgent. At some point, the Garbutts' loan was sold to a real estate trust, of which Mellon was the trustee.
The Garbutts were unwilling to modify their loan through HAMP. They alleged, however, that they were entitled under the terms of the May 2013 forbearance letter to be evaluated for some other kind of repayment plan, an evaluation that never occurred.
Shellpoint explained to the Garbutts in two letters, dated August 21 and September 18, 2014, that at the conclusion of the HAUP forbearance period, the next step was an application for loan modification under HAMP. The application process included submission of financial documentation, which BofA had never received, despite its requests as the forbearance period was about to expire. Accordingly, the payment terms of the original loan agreement were resumed. Shellpoint also explained, in the same letters, that the HAUP forbearance only suspended mortgage payments. At the end of the period, the entire past due balance, including suspended payments, had to be paid off.
Shellpoint recorded a notice of default and election to sell on December 4, 2014.
The Garbutts sued BofA, New Penn, Mellon, and a title insurance company. By the time the trial court had ruled on demurrers, the sole remaining causes of action in the third amended complaint were breaches of written and oral contracts stated against BofA, New Penn, and Mellon.
New Penn - on behalf of Resurgent and Shellpoint - and Mellon moved for summary judgment on the causes of action for breach of contract. The Garbutts submitted almost no evidence in opposition to the motion - not even a declaration. The vast majority of "evidence" cited in the opposition separate statement consisted of references to the allegations of the third amended complaint. The other category of evidence was excerpts from Garbutt's deposition transcript, parts of which respondents had submitted as an exhibit to the motion. The Garbutts did not provide a copy of one of the pages they repeatedly cited in the opposition separate statement, which was not a page included in respondents' exhibit. The other transcript citation was to two pages, supplied by respondents, only one of which conformed to the California Rule of Court regarding deposition testimony as an exhibit. (See Cal. Rules of Court, rule 3.1116(c).)
The correctly cited excerpt was a statement from Garbutt: "A million fifty thousand minus 420 is at least 600,000."
Finally, the Garbutts' opposition separate statement included extensive quotations from the HAMP handbook for loan servicers. Respondents submitted the handbook's table of contents, foreword, and chapter III, which deals with the HAUP, as part of their evidence. Yet most of the Garbutts' quotations from the handbook were from portions not included in these excerpts.
In their opposition brief to the motion for summary judgment, the Garbutts repeatedly told the trial court to "see generally, T[hird] [A]mended [C]omplaint" for evidence to support their contentions.
The Garbutts were at this point representing themselves.
The trial court granted summary judgment. The Garbutts had not submitted evidence to create a triable issue of fact as to an element of breach of contract. They had relied almost entirely on allegations of the third amended complaint. They could not rely on the handbook as evidence because the parties to the agreements underlying HAUP and HAMP were the United States government and the banks servicing the loans in the program. Many cases have held that individual borrowers have no standing to enforce the handbook.
New Penn and Mellon had met their initial evidentiary burden as to the elements of breach for both causes of action. The burden then shifted to the Garbutts to submit evidence of a triable issue of material fact. They failed to carry this burden.
DISCUSSION
Our review is hampered by Garbutt's failure to include citations to the record to support the factual assertions in his statement of facts, in violation of California Rules of Court, rule 8.204(a)(1)(C). The entire statement contains only three record citations. We are not obligated to search the record to find support for the Garbutt's assertions. (See Aguimatang v. California State Lottery (1991) 234 Cal.App.3d 769, 796 [reviewing court will not "ferret through 1,400 pages of summary judgment papers"].) Garbutt's failure to comply with court rules is reason enough to reject his arguments.
But they also fail on the merits. We review an order granting a motion for summary judgment de novo. "[W]e must decide independently whether the facts not subject to triable dispute warrant judgment for the moving party as a matter of law." (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348.) Section 437c "is a complicated, unforgiving statute with little flexibility and 'myriad requirements.' [Citation.]" (Haney v. Aramark Uniform Services, Inc. (2004) 121 Cal.App.4th 623, 632.) It is designed to determine whether scarce judicial and costly individual resources need to be expended on a full-dress trial, in which a trier of fact (court or jury) decides, as best it can, who is telling the truth and what really happened. (Eisenberg v. Alameda Newspapers, Inc. (1999) 74 Cal.App.4th 1359, 1375-1376.)
Although a summary judgment motion is not a trial, the evidence submitted to support or oppose the motion must meet trial standards. It must be admissible evidence. (§ 437c, subd. (d).) This means, for example, that hearsay is not allowed unless a statutory exception applies. (See DiCola v. White Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 680-681; Maltby v. Shook (1955) 131 Cal.App.2d 349, 352.) Documents must be properly authenticated. (Callahan v. Chatsworth Park, Inc. (1962) 204 Cal.App.2d 597, 606.) Testimony - declarations for summary judgment - must be based on personal knowledge. (§ 437c, subd. (d).)
Section 437c spells out in considerable detail what is required to make and oppose a summary judgment. For example, "Supporting and opposing affidavits or declarations shall be made by a person on personal knowledge, shall set forth admissible evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavits or declarations." (Id., subd. (d).) "The opposition papers shall include a separate statement that responds to each of the material facts contended by the moving party to be undisputed, indicating if the opposing party agrees or disagrees that those facts are undisputed. . . . Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence." (Id., subd. (b)(3), italics added.)
The statute explains what "supporting evidence" does not mean. "The plaintiff . . . shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto." (§ 437c, subd. (p)(2) (italics added).) It is also very clear on the subject of burden of proof. "A defendant . . . has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto." (Ibid.) "The materiality of a disputed fact is measured by the pleadings [citations], which 'set the boundaries of the issues to be resolved at summary judgment.' [Citation.]" (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1250.)
Garbutt makes the startling pronouncement on appeal that "there was never a written agreement signed by the Garbutts for forbearance. . . . No such agreement exists." The first cause of action and the motion for summary judgment were premised on the existence of the forbearance agreement and its breach. If there was no agreement, there could be no breach.
Garbutt has identified seven issues on appeal. We discuss them in turn.
I. Admissibility of the HAMP Handbook
The first cause of action is liberally sprinkled with allegations about the HAMP Handbook for Servicers of Non-GSE Mortgages, issued by the Treasury Department. On appeal, Garbutt argues that the provisions of this handbook are relevant and admissible to determine whether the contract was breached. According to him, the loan servicers' failure to comply with the handbook provisions "may be used to demonstrate a cause of action."
Non-GSE mortgages are mortgage loans not owned or guaranteed by Freddie Mac or Fannie Mae.
The trial court considered the handbook provisions that were properly before it, i.e., the table of contents, the foreword, and the chapter on the HAUP (chapter III). These documents were found in exhibits H-N (the declaration of a BofA servicing team manager supporting BofA's own motion for summary judgment). The court consulted sections 3 and 4 of the HAUP chapter.
The record does not support Garbutt's argument that the court ruled the handbook excerpts before it irrelevant and inadmissible. In fact, it overruled the Garbutts' objections to the moving parties' documentary evidence, which included excerpts from the handbook.
The issue before the court, however, was not whether Garbutt could "demonstrate" a cause of action. That was the issue in Garbutt's sole authority, Majd v. Bank of America, N.A. (2015) 243 Cal.App.4th 1293, in which the trial court had sustained a demurrer. (Id. at p. 1300.) There, our court held that the HAMP guidelines could bolster an allegation that dual tracking (processing a loan modification while pursuing foreclosure) was unfair. (Id. at pp. 1303-1304.) But the issue in the present case was not whether Garbutt could state a cause of action. It was whether he had presented admissible evidence of a triable issue of material fact. The handbook did not do that.
II. Violations of the Handbook as Breaches of Contract
On appeal, Garbutt identifies two acts that constituted breaches of contract: overbilling him after the forbearance period ended and not considering him for non-HAMP modifications. Each of these acts he characterizes as a violation of the handbook. He also claims the forbearance letter gave him the choice of "making a lump sum payment of the suspended payments, having each monthly payment increased or adding additional months of payments to the end of the mortgage." No admissible evidence supports this latter claim. The supporting citations to the record in the opening brief are citations to exhibits to the third amended complaint.
He also argues that these violations "give rise to" unfair competition claims. These claims were dismissed on demurrer, and Garbutt has appealed only from the order granting summary judgment, which was not based on unfair competition. --------
As the trial court pointed out, the parties to the HAMP and HAUP agreements are the federal government and the participating lenders and loan servicers. Garbutt has no standing to enforce these agreements. (See Wyatt v. Lehman Bros. Bank, FSB (C.D. Cal., Mar. 12, 2015) 2015 U.S.Dist. LEXIS 189546 at *15-16; Phipps v. Wells Fargo Bank, N.A. (E.D. Cal., Jan. 27, 2011) 2011 US.Dist. LEXIS 10550 *23-25; Ruvalcaba v. Citibank CitiMortgage, Inc. (C.D. Cal., Aug. 1, 2012) 2012 U.S.Dist. LEXIS 196595 *6-8 and cases cited.) There is no private right of action for violations of the handbook, even assuming they occurred.
The only possible contract to which Garbutt was a party was memorialized in the May 2, 2013, forbearance letter from BofA. The forbearance period ended on November 1, 2013. Neither Resurgent nor Shellpoint was servicing the loan at that time, and Mellon was merely the trustee of the trust holding the Garbutts' loan. The "next step" in the process was the Garbutts' application to BofA for a HAMP loan modification, a step they deliberately never took. The handbook provisions do not supply additional terms to the forbearance agreement.
III. Reapplication to HAMP
Garbutt misstates the minute order granting summary judgment. He claims the court found the Garbutts "had purportedly applied and been denied for HAMP previously" and were "required to re-apply for HAMP."
The court made no such finding. It was simply recapitulating the terms of the forbearance letter, one of which dealt with re-applying for HAMP if the borrower had already been turned down. This recapitulation did not affect the outcome of the summary judgment motion.
IV. Applying for HAMP Modification
It is undisputed that the Garbutts refused BofA's invitation to apply for a HAMP loan modification. Garbutt's position on appeal is that applying for a HAMP modification was a waste of time because he could not qualify since he was unemployed. He contends that BofA was obligated to skip HAMP and instead offer him a non-HAMP loan repayment plan.
The evidence supporting the summary judgment contradicts Garbutt's present position. He testified at deposition he thought he would have qualified if he had applied. He repeatedly stated he was not interested in HAMP, even though he was "probably eligible." He did not want a HAMP loan modification because he thought it would damage his credit.
Nothing in the May 2013 letter requires BofA to forego looking into a borrower's eligibility for HAMP relief. On the contrary, the May 2 letter stated that the first order of business as the forbearance period was coming to an end - the "next step" - would be to determine whether the Garbutt loan was eligible for HAMP. There is no dispute that the Garbutts never sent and BofA never received the HAMP paperwork.
The handbook is in accord. It provides, "At the expiration of an U[nemployment] P[rogram] forbearance plan, if a borrower is subsequently determined to be ineligible for HAMP, the servicer is required to consider the borrower for all other available loss mitigation options, including but not limited to non-HAMP modifications." (Italics added.) Implicit in this provision is the requirement that the borrower has applied for a HAMP loan modification and been rejected before he or she can be considered for other loss mitigation options.
V. Multiple Disputed Facts
Garbutt lists 10 facts that he claims are disputed and therefore preclude summary judgment. None of them has this effect.
The only causes of action still under consideration were breach of contract - written and oral. The elements of a cause of action for breach of contract are "(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) The elements are the same for both a written and an oral contract. (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.)
The only written contract alleged in the first cause of action to which Garbutt is arguably a party is the May 2, 2013, forbearance agreement. The agreement provided that once the forbearance period ended, BofA would determine whether the Garbutts qualified for a HAMP loan modification. But the Garbutts never applied for a HAMP loan modification and omitted to do so deliberately.
Most of the purportedly disputed "facts" listed in Garbutt's appellate brief have nothing to do with a breach of the forbearance agreement. For example, it is irrelevant whether Garbutt found employment during the forbearance period or whether the Garbutts were properly notified that their loan servicer had changed after the forbearance period had ended. Other "facts" are not facts at all, but matters of law - for example, whether successor loan servicers assume their predecessor's responsibilities or whether the HAMP handbook binds loan servicers.
Respondents presented admissible evidence that elements of the cause of action, breach and plaintiff's performance, could not be established. The burden then shifted to Garbutt to submit admissible evidence that would create a triable issue of material fact regarding breach and performance. But Garbutt submitted no evidence of any kind. The only properly submitted admissible evidence referred to in the opposition separate statement was a sentence from his deposition transcript and one section from the handbook, section 4.8 of chapter III, both of which were part of respondents' exhibits. None of this evidence established a triable issue of material fact regarding breach of contract.
Garbutt relied mainly on the allegations of the third amended complaint, in direct contravention of section 437c, subdivision (p)(2). (See Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181 [party opposing summary judgment may not "rely upon his own pleadings in lieu . . . of affidavits in opposition to a motion"].) The other category of opposition evidence - deposition testimony - was also not properly submitted. The Garbutts did not carry their evidentiary burden to demonstrate a triable issue of material fact.
VI. Defects in Separate Statement Cured
This is not actually an issue on appeal because Garbutt stated the trial court acted properly when it considered all the pleadings and exhibits. The trial court did not hold, however, that the defects in the Garbutts' opposition separate statement were cured. On the contrary, the trial court pointed out, as we have, that the Garbutts improperly relied on the unverified allegations of the third amended complaint as their "evidence." It also held that the Garbutts were not parties to the HAMP and HAUP agreements with the federal government and could not assert a private cause of action for any alleged breach of these agreements. Their reliance on handbook language as evidence of breach was likewise improper.
VII. Confused Judge
It is not clear whether Garbutt is objecting to the fact that the summary judgment motion was decided by a temporary judge instead of the one to whom the case had been assigned. If this is his complaint, it is futile. Garbutt stipulated to the temporary judge and cannot object now.
Garbutt's main argument on this point is that the court confused HAMP (Home Affordable Mortgage Program) and HAUP (Home Affordable, Unemployment Program.) He faults the court's numerous "references to HAMP and the Garbutts' failure to adhere to HAMP" in the minute order as error.
The trial court did not confuse the two programs. It was perfectly aware that HAUP required an evaluation for HAMP eligibility at the end of the forbearance period before any other kinds of relief could be contemplated and that BofA's forbearance letter and subsequent conduct accorded with this requirement. The references to HAMP in the minute order refer to the Garbutts' failure to apply for HAMP relief, which precluded them from being considered for other loan modifications. As the court stated, "[The Garbutts] cannot indefinitely defer non-judicial foreclosure by refusing to be evaluated for a HAMP loan modification."
VIII. Second Cause of Action - Breach of Oral Agreement
Garbutt has not presented any argument regarding breach of oral agreement. This issue is therefore abandoned. (See Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 865.)
The same failure to provide evidence to create a triable issue of fact for breach of a written contract applies equally to a cause of action for breach of an oral contract. Accordingly summary judgment was properly entered on this cause of action.
DISPOSITION
The judgment is affirmed. Respondents are to recover their costs on appeal.
BEDSWORTH, ACTING P. J. WE CONCUR: MOORE, J. ARONSON, J.