Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. YC054823, Cary Nishimoto, Judge. Affirmed.
Bruce T. McIntosh for Plaintiff and Appellant.
Houser & Allison, Eric D. Houser, Christopher J. Donewald, Robert Wayne Norman, Jr., and Jeffrey Allison for Defendants and Respondents.
KRIEGLER, J.
Plaintiff and appellant Charles Hathaway appeals from the judgment of dismissal in favor of defendants and respondents LaSalle National Bank and Ocwen Loan Servicing, LLC (collectively defendants), in this action arising from foreclosure of his residence. Hathaway argues the trial court committed reversible error by sustaining defendants’ demurrers without leave to amend. We affirm.
Hathaway’s operative second amended complaint (SAC) alleged causes of action for (1) illegal, fraudulent, or willfully oppressive sale of real property under Civil Code section 1708, (2) unjust enrichment, (3) conversion, and (4) quiet title. The SAC was based on the following allegations.
Hathaway owned the real property located at 5123 Avenue B in Torrance. He borrowed $89,000 from California Federal Savings and Loan Association, secured by a promissory note and deed of trust. California Federal transferred or assigned the note and deed of trust to LaSalle, as trustee. Hathaway understood he was obligated to make monthly payments on the note to Ocwen.
In February 2006, Hathaway was delinquent in his payments. Ocwen sent him a notice of default under the deed of trust. Hathaway and Ocwen entered into a forbearance agreement.
Hathaway again fell behind in his payments and received a notice of default from Cal Western on May 22, 2006, which had been recorded on May 17, 2006. On August 4, 2006, Hathaway received a trustee’s notice of sale from Cal Western, setting September 7, 2006, as the date of the foreclosure sale. Hathaway and Ocwen again entered into a forbearance agreement, which Hathaway signed on August 29, 2006. Hathaway made a $5,000 payment in consideration of the agreement. As a result of the agreement, the trustee’s sale did not take place on September 7, 2006.
Cal Western was a named defendant but is not a party to this appeal.
Despite the agreement, on November 28, 2006, Ocwen and Cal Western caused Hathaway’s property to be sold, without prior notice to Hathaway. One day before the sale, a bankruptcy action was filed entitled In re Charles Hathaway, case No. BK 06 12222. Although he was named as the petitioner, Hathaway did not file the bankruptcy petition, nor had he given anyone permission to do so on his behalf. Hathaway’s property was listed as an asset in the bankruptcy action and was protected by the automatic bankruptcy stay. The address used in the bankruptcy filing was an uninhabited residence in the San Fernando Valley used as a mail drop for bankruptcy filings. Hathaway had no connection to the mailing address.
Hathaway learned of the wrongful sale of his property on the day of the sale. Stunned by the news and unaware of the bankruptcy filing, Hathaway requested Ocwen to reinstate his loan. A reinstatement quote was sent to Hathaway by e-mail on November 29, 2006. Hathaway did reinstate the loan by wiring $13,916.67 to Ocwen on December 14, 2006. Ocwen accepted the wire transfer on December 15, 2006.
The sale of the property on November 28, 2006, and the later agreement to wire transfer $13,916.67 were in violation of the automatic bankruptcy stay and per se unlawful. The receipt of the wire transfer acted to reinstate Hathaway’s original loan, he was no longer in default, and title to the property should remain with Hathaway. Defendants are estopped from claiming any rights to the property and have waived any rights to do so.
Defendants thereafter petitioned the bankruptcy court for relief from the stay, but did not give notice to Hathaway. All notices were served at the uninhabited residence used for the bankruptcy filing. Cal Western purported to transfer title to Foremost Investment Properties, LLC, pursuant to the trustee’s deed upon sale. Foremost filed a successful unlawful detainer action against Hathaway, obtaining possession of the property.
Foremost was a named defendant but is not a party to this appeal.
The first cause of action—for illegal, fraudulent, or willfully oppressive sale of real property—sought damages resulting from the sale of the property when there was a bankruptcy stay in effect. It alleged that Hathaway exercised his statutory right to cure his default. Tender of the $13,916.67 payment and Ocwen’s acceptance reinstated the loan and deprived the trustee of the power to foreclose. Defendants never intended to allow Hathaway to retain title to the property, but instead intended to take the property and extract as much money as possible. After obtaining relief from the bankruptcy stay, defendants completed their fraudulent plan by causing the trustee’s deed upon sale to be issued and recorded, and thereafter filing the unlawful detainer action.
The second cause of action for unjust enrichment and third cause of action for conversion alleged defendants’ acts were unlawful and caused damages of $13,916.67, as well as the loss of property with a fair market value of not less than $650,000. The fourth cause of action, for quiet title, sought a declaration that title to the property be vested only in Hathaway’s name, and that defendants be enjoined from asserting any title or right to the property.
Demurrer to the SAC
LaSalle and Ocwen demurred to the SAC, contending that all four causes of action were barred as a matter of law. The demurrer was supported by an order of the United States Bankruptcy Court granting an uncontested motion to retroactively annul the stay. The order permitted foreclosure upon and obtaining possession of the property.
The trial court sustained the demurrer without leave to amend. There is no indication Hathaway requested leave to amend, and he makes no such request on appeal.
DISCUSSION
Hathaway argues the SAC stated a cause of action because the property was in bankruptcy at the time of the foreclosure sale and during that time the loan was reinstated by agreement. Hathaway relies on Bank of America v. La Jolla Group II (2005) 129 Cal.App.4th 706 (La Jolla) and Munger v. Moore (1970) 11 Cal.App.3d 1 (Munger). Hathaway’s argument addresses only the fraud cause of action, and he makes no specific contention regarding the three other causes of action.
Standard of Review
“‘On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed “if any one of the several grounds of demurrer is well taken. [Citations.]” [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]’ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) The legal sufficiency of the complaint is reviewed de novo. (Montclair Parkowners Assn. v. City of Montclair (1999) 76 Cal.App.4th 784, 790.)” (Paragon Real Estate Group of San Francisco, Inc. v. Hansen (2009) 178 Cal.App.4th 177, 181-182.)
Effect of the Bankruptcy Stay and Order Annulling the Stay
“When a debtor files for bankruptcy, he is immediately protected by an automatic stay under 11 U.S.C. § 362(a), which provides that a bankruptcy petition, among other things, ‘operates as a stay, applicable to all entities, of the commencement or continuation... of a judicial, administrative, or other action or proceeding against the debtor...; the enforcement... of a judgment...; any act to obtain possession of property of the estate...; [and] any act to create, perfect, or enforce any lien....’” (Sternberg v. Johnston (9th Cir. 2010) __ F.3d ___, ___ [2010 WL 424811 (C.A.9 (Ariz.)).) Had no further action been taken by the bankruptcy court on the petition filed in Hathaway’s name, the trustee’s sale of the property would have been void. However, the stay was annulled by the bankruptcy court.
“The Bankruptcy Code empowers bankruptcy courts to take measures that grant relief from the automatic stay, including ‘terminating, annulling, modifying, or conditioning’ the stay, under certain circumstances. 11 U.S.C. § 362(d). These measures have different operation and effect. An order ‘terminating’ an automatic stay operates only from the date of entry of the order. See In re Albany Partners, Ltd., 749 F.2d 670, 675 (11th Cir.1984) (quoting 2 Collier’s Bankruptcy Manual ¶ 362.06 (3d ed. 1983)). Such an order thus permits a creditor to re-initiate its lawsuit (or start another one) after the termination order is entered but does not affect the status of actions taken between the filing of the bankruptcy petition and the entry of the termination order--such actions are void ab initio. By contrast, an order ‘annulling’ a stay does have retroactive effect, and thereby reaches back in time to validate proceedings or actions that would otherwise be deemed void ab initio. [Citations.]” (Eastern Refractories Co. v. Forty Eight Insulations (2d Cir. 1998) 157 F.3d 169, 172; In re Myers (3d Cir. 2007) 491 F.3d 120, 127; In re Siciliano (3d Cir. 1994) 13 F.3d 748, 751 [bankruptcy court has authority to annul the automatic stay and thereby ratify a sheriff’s sale of property held before the stay was annulled].)
As these authorities demonstrate, Hathaway erroneously relies on the existence of the bankruptcy stay as the premise for his contention that the foreclosure sale was void. The bankruptcy stay was annulled, meaning that what would have been a void trustee’s sale of the property was no longer subject to challenge based upon the automatic stay. (See In re Siciliano, supra, 13 F.3d at p. 752.) The remaining issue is whether Hathaway pleaded a fraud cause of action based upon his payment of the $13,916.67 to Ocwen.
Fraud
Hathaway’s fraud cause of action alleged that he relied on “Defendant’s representations” in making the payment of $13,916.67, as defendants always intended to obtain the property through the trustee’s sale. Defendants demurred to this cause of action, in part, on the basis that it was not pled with specificity. We agree.
California law requires that fraud be pled with specificity. This requirement necessitates that a plaintiff plead how, when, where, to whom, and by what means representations were made. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.) Hathaway’s pleading in the first cause of action contains none of the details required in pleading a fraud cause of action. He does not allege what misrepresentations were made, who made them, or when they were communicated. The demurrer to the fraud cause of action was properly sustained on this basis.
Nonetheless, Hathaway relies on La Jolla, supra, 129 Cal.App.4th 706 for the proposition that a trustee’s sale should be set aside where the trustor and beneficiary entered into an agreement to cure the default. Hathaway argues that Ocwen’s acceptance of the $13,916.37 payment falls within the reasoning of La Jolla. He is mistaken.
La Jolla involved “a nonjudicial foreclosure sale conducted by mistake after the homeowner and lender entered into an agreement to cure the homeowner’s default and reinstate the loan.” (La Jolla, supra, 129 Cal.App.4th at p. 709.) La Jolla correctly holds that acceptance of a delinquent payment prior to a foreclosure sale generally cures a default and the beneficiary has “no right to sell afterward.” (Id. at p. 712.) Here, Hathaway made his $13,916.67 payment after the trustee’s sale was complete. La Jolla does not stand for the proposition that a payment made after the sale is complete creates a right to set aside the sale.
Hathaway also relies on Munger, supra, 11 Cal.App.3d 1 for the proposition that a trustee is liable for damages where the trustee, acting as the beneficiary’s agent, illegally or fraudulently sells property under a power contained in a deed of trust. In Munger, the beneficiary of the trust wrongfully directed the trustee not to accept a payment which would have cured a default on a loan, but to instead proceed with a trustee’s sale. (Id. at pp. 5-6.) An award of damages against the beneficiary for the acts of the trustee was upheld in Munger. (Id. at p. 8.) Hathaway has not, however, successfully pled a cause of action alleging that the trustee acted illegally in the sale of his property. Hathaway does not allege he was current in his payments, and not in default, at the time of the trustee’s sale. Absent pleadings asserting that Hathaway was not in default at the time of the trustee’s sale, or an agreement between the parties not to foreclose on the property, Munger provides no support for the argument that Hathaway stated a fraud cause of action.
Quiet Title, Conversion, and Unjust Enrichment
Hathaway makes no specific argument on appeal regarding quiet title, unjust enrichment, or conversion. “‘An appellant abandons an issue by failing to raise it in the opening brief.’” (Padilla v. Rodas (2008) 160 Cal.App.4th 742, 753 fn. 2, citing H.N. & Frances C. Berger Foundation v. City of Escondido (2005) 127 Cal.App.4th 1, 15.) We therefore need not discuss the merits of those causes of action.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to Ocwen Loan Servicing, LLC and LaSalle Bank National Association.
We concur: MOSK, Acting P. J., WEISMAN, J.
Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.