Opinion
D075637
09-21-2020
RICARDO PASCUA et al., Plaintiffs and Appellants, v. FCI LENDER SERVICES, INC. et. al., Defendants and Respondents.
Law Offices of Francisco Javier Aldana and Francisco J. Aldana for Plaintiffs and Appellants. Ghidotti | Berger, Shannon C. Williams and Cuong M. Nguyen 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 2018-00017732-CU-OR-CTL) APPEAL from a judgment of the Superior Court of San Diego County, Katherine A. Bacal, Judge. Affirmed. Law Offices of Francisco Javier Aldana and Francisco J. Aldana for Plaintiffs and Appellants. Ghidotti | Berger, Shannon C. Williams and Cuong M. Nguyen for Defendants and Respondents.
This case is the last in a series of attempts by plaintiffs, members of the Pascua family, to forestall, roll back or otherwise affect the foreclosure sale on their house, which was auctioned after they fell severely behind on their mortgage payments. Although there is a complex factual history to this case, we resolve it on simple grounds; the Pascuas have failed to carry their burden of showing they could amend their complaint to state a valid cause of action. Accordingly, we affirm the judgment of dismissal entered after the trial court sustained defendants' demurrer without leave to amend.
FACTUAL AND PROCEDURAL BACKGROUND
In 2007, Ricardo, Jesiefin, and Pamela Pascua purchased their house on Penny Lane with a mortgage loan secured by the property. After apparently defaulting, they obtained a loan modification in 2013. Sometime in 2015, they began to fall behind on payments again and sought another modification. The Pascuas allege they had to submit this application more than once. Regardless, an application they submitted in January 2017 was rejected by their loan servicer early the following month on two separate grounds—because their income was too high to demonstrate financial hardship, and because they failed to disclose additional information about their rental properties and associated income. The Pascuas appealed the decision without providing the missing information. The denial was affirmed on the same grounds in early March.
The Deed of Trust changed hands several times throughout the life of the Pascuas' loan. At this point, Wilmington Savings Fund Society, FSB, doing business as Christiana Trust as Owner Trustee of the Residential Credit Opportunities Trust III (collectively, Wilmington) held the Deed of Trust and FCI Lender Services, Inc. (FCI) was their loan servicer.
During roughly the same period in January 2017, the trustee recorded a Notice of Trustee's Sale for the property, setting the auction date for February 17, 2017. On February 16, Ricardo Pascua filed for bankruptcy, which had the effect of stopping the foreclosure sale. Due to this and several subsequent filings, the sale was delayed more than once. The Pascuas made one more attempt to obtain a modification of their loan terms in January 2018. They were notified on February 9 that their application was rejected due to proximity of the foreclosure sale, which occurred on February 27, 2018.
Defendants ask that we take judicial notice of a related order by the United States Bankruptcy Court for the Southern District of California, but we decline their request because it is unnecessary to resolve this appeal.
The Pascuas commenced several court actions throughout 2017 and 2018 to stop the foreclosure, including filing for bankruptcy no less than five times and petitioning the state court for a temporary restraining order.
This lawsuit followed. In their complaint, the Pascuas alleged that several entities involved with their mortgage loan violated their rights under the Homeowner's Bill of Rights, amounting to unlawful business practices under Business and Professions Code section 17200 and resulting in wrongful foreclosure. The defendants (including respondents in this appeal) demurred to the complaint. It was unopposed by appellants, and the trial court sustained the demurrer without leave to amend.
DISCUSSION
When the trial court sustains a demurrer to a complaint without leave to amend, we consider whether there is a "reasonable possibility that the defect can be cured by amendment" (Blank v. Kirwan (1985) 39 Cal.3d 311, 318) under any possible legal theory. (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 870; Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1242 (Gutierrez).) If not, the trial court properly exercised its discretion. (Kilgore v. Younger (1982) 30 Cal.3d 770, 781.) On appeal following the sustaining of a demurrer without leave to amend, the general rules of forfeiture do not apply. (See Bell v. American Title Ins. Co. (1991) 226 Cal.App.3d 1589, 1602.) Plaintiffs are entitled to raise new arguments for the first time on appeal, even absent a request in the trial court to amend the operative complaint. (Code Civ. Proc., § 472c, subd. (a); Mercury Ins. Co. v. Pearson (2008) 169 Cal.App.4th 1064, 1072.) Reviewing courts can also raise legal theories not contemplated by the appellant. (Gutierrez, supra, 19 Cal.App.5th at p. 1245.) But this does not shift the burden—which falls squarely on the plaintiffs—to show how they could amend the complaint to state a cause of action. (Blank, at p. 318.)
Quite simply, the Pascuas have failed to carry this burden. Their complaint alleges the defendants (1) violated the Homeowner's Bill of Rights, (2) engaged in unlawful business practices under Business and Professions Code section 17200, and (3) wrongfully foreclosed on the house. But in support of these three claims, the brief makes essentially one argument—that FCI's denial of the 2018 loan modification on the grounds that it was submitted too close to the foreclosure date violates Civil Code section 2923.6, subdivision (c). This code section obligates mortgage servicers to consider an application for a first lien loan modification on the merits before pursuing foreclosure, even if the application is submitted up to five days before a pending trustee's sale.
The Homeowner's Bill of Rights (HBOR) is shorthand for a series of statutes that now govern nonjudicial foreclosure processes in California. In addition to creating new obligations for loan servicers after the 2008 housing market crash, the HBOR also provides various private causes of action for borrowers who allege violations. (See generally Nakamura, Dwellings on California Foreclosure Law: The New Homeowner's Bill of Rights (Dec. 2013) Orange County Lawyer, 12.)
Further statutory references are to the Civil Code unless otherwise specified.
If that part of the Civil Code had been operative when the Pascuas' loan modification was denied, they might have been able to avail themselves of its procedural protections. But the statute did not become effective until January 2019, almost a year after the conduct the Pascuas complain of occurred. (§ 2923.6, subd. (c), amended by Stats. 2018, ch. 404, § 7, eff. Jan. 1, 2019.) Even assuming FCI's conduct would have violated the HBOR, its actions in 2018 were not governed by a law that did not exist at that time.
Generally, new laws do not operate retroactively absent express language to the contrary. (Quarry v. Doe I (2012) 53 Cal.4th 945, 955; Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 840.) By its own terms, it is clear that "no part of [the Civil Code] is retroactive, unless expressly so declared." (§ 3.) This default presumption aligns with basic principles of fairness, which "dictat[e] that individuals should have an opportunity to know what the law is and to conform their conduct accordingly," and that " 'the legal effect of conduct should ordinarily be assessed under the law that existed when the conduct took place.' " (Landgraf v. USI Film Products (1994) 511 U.S. 244, 265.) The Pascuas offer no basis to depart from the general rule here.
The fact that this law is inapplicable to their case is fatal to the Pascuas' entire appeal, because they tie their two remaining causes of action to its supposed violation. They do not cite any other legal authority to support their positions. Regarding the Business and Professions Code claim, the Pascuas argue that by alleging a statutory violation (of section 2923.6), they have necessarily alleged facts sufficient to support a claim for unlawful business practices. (See, e.g., Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 113 [defining unlawful business practice as " 'anything that can properly be called a business practice and that at the same time is forbidden by law' "].) Their wrongful foreclosure claim is given even shorter shrift, apparently meriting no more than two sentences—one of which perplexingly reads, "[t]he wrongful foreclosure sale must stand." The second merely states that the alleged violation of section 2923.6 renders the foreclosure sale wrongful. Beyond explaining why section 2923.6 does not apply, we need not entertain either of these otherwise unsupported assertions. (See Berger v. Godden (1985) 163 Cal.App.3d 1113, 1119 [an appellant's failure to provide legal argument is tantamount to abandoning the issue and justifies dismissal]; Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699 ["When an issue is unsupported by pertinent or cognizable legal argument it may be deemed abandoned and discussion by the reviewing court is unnecessary."]; Boehm & Associates v. Workers' Compensation Appeals Bd. (2003) 108 Cal.App.4th 137, 148.)
A smattering of other issues are mentioned in the appellants' brief, but they amount to no more than bare assertions. Although Ricardo Pascua claims he "will allege" that the denial of his loan modification was based on race, he supplies us with no additional facts he could include in an amended complaint. Similarly, the Pascuas' assertion that FCI "negligently" denied their 2017 loan modification by not stating a reason for the denial is both conclusory and appears to be contradicted by judicially noticeable documents citing FCI's reasons. Other brief references are also unsupported by argument and authority. We treat them as abandoned.
By relying entirely on an inapplicable section of the Civil Code and advancing no supplemental legal authority to support their claims, the Pascuas have failed to overcome their burden on appeal. Although they claim the trial court abused its discretion by denying them leave to amend, their brief "does not cite any authorities in support of its claim of error and does not make any argument beyond its assertion error occurred." (Jimmy Swaggart Ministries v. State Bd. of Equalization (1988) 204 Cal.App.3d 1269, 1294.)
DISPOSITION
The judgment is affirmed. Respondents are entitled to their costs on appeal.
DATO, J. WE CONCUR: BENKE, Acting P. J. AARON, J.