Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, County Super. Ct. No. BC306983 Ernest George Williams, Judge.
Peter C. Ver Halen Law Corp. and Peter C. Ver Halen for Defendants and Appellants.
Law Offices of L’tanya M. Butler and L’tanya M. Butler for Plaintiff and Respondent.
Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
INTRODUCTION
Defendants Kenn Dudley and the company name under which Dudley did business, American First Financial, appeal from a judgment in favor of plaintiff Okwuni J. Odimbur with respect to a real estate loan which defendants brokered for plaintiff. We reverse.
FACTUAL AND PROCEDURAL BACKGROUND
The facts are largely taken from the trial court’s statement of decision, augmented with related facts from trial exhibits included in the record.
Plaintiff had previously purchased real property located in the city of Carson. In or about November 2001, after learning that plaintiff was dissatisfied with her current loan on the property with Washington Mutual (WAMU) and was looking for a new loan, Jacqui Dobens (Dobens) contacted plaintiff and made a series of written representations regarding a loan that she claimed she could obtain for plaintiff. Plaintiff’s specifications for the loan included that it be secured by a fixed rate mortgage, without a prepayment penalty and with $30,000 cash out to her.
In a letter to plaintiff dated November 15, 2001, Dobens represented that she could obtain a loan which would pay off the WAMU loan, have monthly payments in an amount comparable to the WAMU loan and give plaintiff “Liquid Cash in the amount of $30,000 minimum.” The letter stated that Dobens strongly suggested that plaintiff thereafter obtain a different loan in two years. Dobens knew plaintiff wanted a fixed-rate loan and represented orally to plaintiff that Dobens would get her a fixed-rate loan. Dobens also orally represented to plaintiff that there would be no prepayment penalty.
Dobens held herself out as a “Senior Loan Consultant” for defendant American First Financial (AFF). Defendant Kenn Dudley (Dudley) had been doing business as AFF for about 12 years. At the time defendants entered the agreement with plaintiff to obtain a refinance loan for her, Dobens was a relatively inexperienced, nonlicensed real estate loan salesperson engaged in a commission sharing arrangement with Dudley. Dudley was not a licensed real estate broker. Dudley and Dobens were not legally entitled to hold themselves out as loan brokers or sales persons. They did not possess the requisite skill and training to advise plaintiff properly regarding her loan transaction. Dudley did not exercise appropriate supervision and control over Dobens’ activities in connection with the loan agreement entered into between AFF and plaintiff.
Defendants requested that we take judicial notice of printouts dated May 21, 2007 from a California Department of Real Estate website. The printout for Dudley indicates he held a broker’s license on the printout date and that his “Original License Date” was “09/18/01 (Unofficial – taken from secondary records).” There is no indication that defendants offered any such record into evidence in the trial court proceedings. No sound reason appears for not providing it to the trial court. While we may grant the request for judicial notice (Evid. Code, § 459), we decline to accept the record as new evidence offered to prove Dudley’s license status at the time of the transaction at issue herein. (Estate of Schluttig (1950) 36 Cal.2d 416, 423.) Moreover, we may judicially notice the existence of a document, not its content. (Hurvitz v. Hoefflin (2000) 84 Cal.App.4th 1232, 1235, fn. l; see also Windham at Carmel Mountain Ranch Assn. v. Superior Court (2003) 109 Cal.App.4th 1162, 1173, fn. 11.) In any event, Dudley’s licensure status does not affect our decision in this case.
At the time defendants, through Dobens, entered into the agreement with plaintiff to obtain a loan for her, defendants knew that WAMU was demanding a payoff of $189,880.91 and not simply a $157,000 payoff of the then-current balance of plaintiff’s WAMU loan. The payoff demand included $31,684.58 for late fees and impound arrearages, and Dobens and defendants knew that plaintiff disputed that she owed the amount. The loan Dobens represented defendants could obtain for plaintiff, however, was for an estimated $200,000. Accordingly, defendants either knew or should have known that plaintiff would not be able to cash out any sums of money and would not be eligible for a fixed rate loan without a prepayment penalty.
Defendants did not provide accurate information to plaintiff about the loan they were arranging until the final loan documents were prepared and the loan was due to fund. The loan did not meet plaintiff’s specifications. It was an adjustable rate loan, with only the first two years at a fixed rate of interest. It did not yield any cash out to plaintiff, in that it required that proceeds be applied to pay off WAMU in the amount of $189,800.91, which included charges and fees disputed by plaintiff in excess of the $157,000 loan balance. It included a prepayment penalty if the loan was paid off any time within five years of the date of the loan. With the loan due to fund imminently, the loan was allowed to become effective and escrow closed on December 12, 2001.
Plaintiff testified that, at Dobens’ request as a matter of convenience, in or about November 2001, plaintiff signed blank loan documents, one for an adjustable rate and another for a fixed rate. She testified that she did not know the exact terms of the loan until after it was funded, in that defendants finalized arrangements for the loan and it was funded without prior notice to or authorization by her. Defendants claim that plaintiff’s testimony is not accurate, and that she saw the complete loan documents prior to signing them. The trial court made no express finding on the issue. We need not address it, in that it does not affect our decision in this case.
On December 2, 2003, plaintiff, in pro. per., filed suit against defendants and Dobens. After obtaining counsel, plaintiff filed the operative complaint herein, the First Amended Complaint filed June 7, 2005. The complaint alleged causes of action for breach of contract, misrepresentation and fraud arising out of the agreement for loan services between AFF and plaintiff for refinancing of her property.
Defendants represent that Dobens was never served and never appeared in the action.
After a court trial, the trial court issued a statement of decision, following the period for objections. The trial court ruled that defendants breached their agreement with plaintiff when they provided her with a loan that did not meet her specifications, which were for a fixed rate mortgage, without a prepayment penalty and with $30,000 cash out. Plaintiff was provided false information that she relied upon to her detriment; otherwise she would not have accepted the loan. She would not have incurred the sum of $14,280.28 in closing costs for the loan. She would not have incurred a prepayment penalty of approximately $5,000 when she subsequently refinanced her property. She would have had the opportunity to correct the $30,000 in overages paid to WAMU. Accordingly, plaintiff’s damages from these sources were $48,280.28.
On July 28, 2006, the trial court entered judgment for plaintiff and against defendants AFF and Dudley, jointly and severally, in the amount of $48,280.28 plus prejudgment interest, at the rate of 10 per cent from the date of filing of December 2, 2003, in the amount of $12,777.74, for a total of $61,058.02.
DISCUSSION
Defendants contend that the judgment is not supported by substantial evidence. Specifically, they claim there is no substantial evidence to support a ruling that the November 15, 2001 letter from Dobens to plaintiff constituted a contract or that they had any contract to provide plaintiff with a loan having the terms mentioned in the letter and, therefore, no recovery could properly be granted for plaintiff’s breach of contract cause of action. As to the judgment on plaintiff’s causes of action for misrepresentation and fraud, defendants contend that substantial evidence does not support a finding of the requisite misrepresentation or fraud, in that plaintiff did not reasonably rely on Dobens’ letter as constituting the terms of the loan she ultimately signed. For the reasons we discuss below, we reverse the judgment, and thus, we need not address the other contentions which defendants raise.
Defendants also claim that the trial court erred in awarding the $30,000 “cash out” as damages in view of the WAMU payoff at the closing of escrow; awarding the entire sum of plaintiff’s closing costs as damages; and awarding prejudgment interest.
In considering defendants’ contention that the judgment is not supported by the evidence, we review the record to determine whether there is any substantial evidence, contradicted or uncontradicted, to support the trial court’s findings. (Primm v. Primm (1956) 46 Cal.2d 690, 693.) Substantial evidence “is more than ‘a mere scintilla,’ and the term means ‘such relevant evidence as a reasonable man might accept as adequate to support a conclusion’ . . . . [¶] It must be reasonable in nature, credible, and of solid value; it must actually be ‘substantial’ proof of the essentials which the law requires in a particular case.” (Estate of Teed (1952) 112 Cal.App.2d 638, 644.)
The principle is well-settled that “‘[w]hen a finding of fact is attacked on the ground that there is not any substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether there is any substantial evidence contradicted or uncontradicted which will support the finding of fact.’ [Citations.]” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 881.) If, without regard to conflicts in evidence and considering the evidence in the light most favorable to the prevailing party, there is substantial evidence to support the findings at issue, the findings must be sustained and the conclusion is final. (Field v. Mollison (1942) 50 Cal.App.2d 585, 591.) If the evidence supports more than one inference, we may not substitute our inference for that of the trial court. (Veguez v. Governing Bd. of the Long Beach Unified School Dist. (2005) 127 Cal.App.4th 406, 422.) We may “‘“overturn the trial court’s factual findings only if the evidence before the trial court is insufficient as a matter of law to sustain those findings.”’” (Ibid.)
We first consider defendants’ contention that Dobens’ November 15, 2001 letter to plaintiff did not constitute a contract between them and plaintiff. By its express terms, the letter was an estimate only and, thus, it did not constitute a promise by Dobens or defendants to provide a loan having certain terms. In the introductory paragraph, the letter states: “Please do keep in mind, however, that this is only an estimate. The terms and conditions could change based on your qualifications, and an approval can never be guaranteed.” (Italics added.)
Furthermore, the letter did not meet the fundamental requirement of a contract that “there are mutual promises, a promise being given in consideration of another promise.” (1 Witkin, Summary of Cal. Law (10th ed. 2005) Contracts, § 105, p. 148.) There is no evidence that, under the terms of the November 15, 2001 letter, plaintiff agreed to accept a loan arranged by defendants with the terms set forth in the letter or any other loan defendants offered to her or that she promised to provide any consideration to defendants in connection with any such loan. Sufficient consideration is an essential element of a contract. (Civ. Code, § 1550.) Plaintiff became obligated to provide consideration to defendants only when plaintiff accepted defendants’ offer of the loan, as indicated by her execution of the loan documents, foregoing her right to rescind within the applicable time frame, and otherwise complying with the prerequisites for the loan to fund.
Plaintiff alleged that the statement of the loan terms in the letter constituted intentional misrepresentations and fraud in order to induce plaintiff to sign the loan documents she was ultimately provided by Dobens. “The elements of intentional misrepresentation, or actual fraud, are: ‘(1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage. [Citation.]’ [Citation.]” (Anderson v. Deloitte & Touche (1997) 56 Cal.App.4th 1468, 1474.) As discussed above, Dobens’ November 15, 2001 letter was an estimate only. As such, there is no evidence that it was intended as or identified as a factual statement of the loan terms that defendants would provide to plaintiff. Where there are no factual statements, there can be no intentional and knowingly false statements. Thus, the letter does not constitute substantial evidence of three of the essential elements required to establish intentional misrepresentation, that is, actual fraud. (Ibid.)
Additionally, defendants claim that plaintiff did not show that she justifiably relied on the letter as stating the loan terms. In her testimony, she acknowledged that Dobens only “promised to do her best to get a fixed loan.” Furthermore, plaintiff testified that she initialed and signed the loan documents. Thus, there is substantial evidence that prior to the loan being funded, plaintiff had an opportunity to read the loan documents and/or ask questions about the loan terms. Therefore, substantial evidence does not support a finding that plaintiff reasonably relied on any statement by Dobens in the November 15, 2001 letter or in any other communication.
A finding in the statement of decision, as originally proposed by plaintiff, also indicates that plaintiff was aware of the loan terms before the loan funded. It states that “[d]efendants failed to provide [plaintiff] with accurate information until the loan was due to fund. . . .” (Italics added.)
Although the question about whether a plaintiff’s reliance is reasonable is generally a question of fact, “‘“if reasonable minds can come to only one conclusion based on the facts,”’” it may be decided as a matter of law. (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498-1499.) With no substantial evidence that Dobens made any false representation of material facts about the loan or that plaintiff justifiably relied on any such representation by Dobens, there is no basis for a finding of actionable misrepresentation or fraud by Dobens or defendants. (Anderson v. Deloitte & Touche, supra, 56 Cal.App.4th at p. 1474.) “‘“If the conduct of the plaintiff in the light of h[er] own intelligence and information was manifestly unreasonable, . . . [s]he will be denied a recovery.” [Citations.]’” (Manderville, supra, at p. 1499.)
In conclusion, based upon our foregoing discussion, we determine that the judgment is not supported by substantial evidence. Therefore, it must be reversed. (Veguez v. Governing Bd. of the Long Beach Unified School Dist., supra, 127 Cal.App.4th at p. 422; Mid-Century Ins. Co. v. Gardner (1992) 9 Cal.App.4th 1205, 1220.)
DISPOSITION
The judgment is reversed and remanded to the trial court with directions to enter a new judgment in favor of defendants. Defendants are to recover costs on appeal.
We concur: VOGEL, Acting P. J., ROTHSCHILD, J.