Siqueiros
v.
Fed. Nat'l Mortg. Ass'n Corp.

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIAJun 1, 2015
Case No. EDCV 13-01789-VAP (DTBx) (C.D. Cal. Jun. 1, 2015)

Case No. EDCV 13-01789-VAP (DTBx)

06-01-2015

NANCY SIQUEIROS, AN INDIVIDUAL, Plaintiff, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION AS SUCCESSOR-IN-INTEREST TO BANK OF AMERICA CORPORATION, etc., et al. Defendants.


ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

[Motion filed on April 17, 2015 (Doc. No. 44)]

This case addresses the limited question of whether Defendants Federal National Mortgage Association and Bank of America, N.A. (collectively, "BANA"), breached a contractual duty owed to Plaintiff Nancy Siqueiros ("Siqueiros") to: (1) give her notice that her loan was in arrears and her property subject to sale or (2) provide her with notice of the precise amount required to cure the default prior to sale. On April 17, 2015, BANA filed a Motion for Summary Judgment ("MSJ"). (Doc. No. 44.) The matter came before the Court for a hearing on May 18, 2015. After consideration of the papers filed in support of, and in opposition to, the MSJ, the Court GRANTS the MSJ, and enters judgment in favor of BANA as to all of Siqueiros's claims.

I. UNDISPUTED FACTS

To the extent certain facts, or conclusions, are not mentioned in this Order, the Court has not relied on them in reaching its decision. In addition to considering the evidentiary objections raised by the parties, the Court has independently considered the admissibility of the evidence underlying BANA's Statement of Undisputed Facts and Siqueiros's Statement of Genuine Issues, and has not considered facts that are irrelevant or based upon inadmissible evidence. The material facts described in I.B. below are supported adequately by admissible evidence and are uncontroverted. They are "admitted to exist without controversy" for the purposes of this Motion. See L.R. 56-3.

A. Evidentiary Objections

Before setting forth the uncontroverted facts in this action, the Court examines the admissibility of the evidence offered by both sides in support of, and opposition to, the MSJ. "A trial court can only consider admissible evidence in ruling on a motion for summary judgment." Orr v. Bank of America, 285 F.3d 764, 773 (9th Cir. 2002). At the summary judgment stage, district courts consider evidence with content that would be admissible at trial, even if the form of the evidence would not be admissible at trial. See Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2003); Block v. City of Los Angeles, 253 F.3d 410, 418-19 (9th Cir. 2001). Moreover, "objections to evidence on the ground that it is irrelevant, speculative, and/or argumentative, or that it constitutes an improper legal conclusion are all duplicative of the summary judgment standard itself" and thus need not be considered on a motion for summary judgment. Burch v. Regents of Univ. of California, 433 F. Supp. 2d 1110, 1120 (E.D. Cal. 2006).

Siqueiros does not dispute any of the facts in BANA's Statement of Undisputed Facts. (See Siqueiros's Statement of Genuine Issues ("SGI") (Doc. No. 54).) As to Siqueiros's Statement of Genuine Disputes, BANA objects to all of those facts on hearsay, foundational, and relevance grounds. (See BANA's Response to Siqueiros's SGI (Doc. No. 56); BANA's Objections to Siqueiros's SGI (Doc. No. 57).)

BANA's primary objection is that the statements in the SGI (and its single piece of accompanying evidence, Siqueiros's declaration) are not relevant to Siqueiros's remaining claims. In a previous Order, the Court dismissed many of the claims in Siqueiros's Seconded Amended Complaint ("SAC"). The only remaining claims are for breach of contract and breach of the covenant of good faith and fair dealing related to BANA's alleged failure to provide Siqueiros with certain required notices and its alleged refusal to provide her with a reinstatement calculation. (See Order Granting in Part and Denying in Part Defendants' Motion to Dismiss ("Dismissal Order") (Doc. No. 32) at 13-16.)

The Court SUSTAINS the objections to ¶¶ 2-10 of the SGI. Those statements relate to claims the Court has already dismissed, and thus are not relevant to the remaining claims in the case. The Court OVERRULES the objections to ¶¶ 1, 11-32 of the SGI. Those statements could be relevant to the remaining claims in this case, as they deal with her request for, and non-receipt of, the reinstatement calculation.

B. Facts

1. Siqueiros's Purchase of the Property

Siqueiros obtained a loan in the amount of $108,500 to finance property in Cathedral City, California on May 18, 2004. (SUF ¶ 1.) This was a rental property and was not Siqueiros's primary residence; her mailing address, i.e., the correct address where all notices should be sent, was in Torrance, California. (SUF ¶¶ 9-10.)

2. The Deed of Trust

The Deed of Trust ("DOT") that secured the Note identifies Siqueiros as the borrower, Bank of America, N.A. as the lender and beneficiary, and PRLAP, Inc., as trustee. (SUF ¶ 2.) Siqueiros signed the Note and the DOT. (SUF ¶ 3.) The DOT states that if Siqueiros defaults on her mortgage payments, the lender, and its successors and assigns, has the right to accelerate the loan and invoke the power of sale. (SUF ¶ 4.)

Specifically, Section 22 of the DOT states:

Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument . . . . The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property.

(SUF ¶ 5.) Section 22 further states:
If the lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and the Lender's election to cause the Property to be sold. Trustee shall cause this notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall mail copies of the notice by Applicable law.

(SUF ¶ 6.) Section 15 of the DOT also requires that
[a]ny notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means.

(SUF ¶ 7.) Section 19 provides that:
If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of

sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument.

(SUF ¶ 8.)

3. Siqueiros's Default and Foreclosure

Due to financial difficulties, Siqueiros sought to modify the terms of the loan securing the Torrance property; in order to do this, she intentionally defaulted on the loan securing the Cathedral City property in 2008. (SUF ¶ 12.) She stopped making payments altogether in 2010. (SUF ¶¶ 13-14.)

On or about December 20, 2010, BANA mailed a Notice of Intent to Accelerate, advising Siqueiros that the loan on the Cathedral City property was in default and that she had until January 19, 2011 to cure the default or foreclosure proceedings would be initiated. (SUF ¶ 15.) This Notice was mailed to the Torrance address. (SUF ¶ 16.) A further notice was mailed on February 28, 2011, advising Siqueiros that no payment had been received and the loan had been referred to the Foreclosure Review Committee. (SUF ¶ 18.) Siqueiros received this letter and understood that BANA had not received any payments on the loan. (SUF ¶ 19.)

On March 2, 2011, ReconTrust Company, N.A., which had been duly substituted as trustee under the DOT, recorded a Notice of Default due to the arrears owed on the loan in the amount of $3,415.49. (SUF ¶¶ 25-26.) On March 9, 2011, the Notice of Default was mailed by registered or certified mail and first class mail, with postage fully prepaid to Siqueiros at the Torrance address. (SUF ¶ 28.)

A Notice of Trustee's Sale was recorded on June 13, 2011, noticing a sale for July 7, 2011. (SUF ¶ 30.) On June 16, 2011, the Notice of Trustee's Sale was mailed by registered or certified mail and first class mail, with postage fully prepaid to Siqueiros at the Torrance address. (SUF ¶ 31.)

BANA's SUF states that it mailed a Notice of Default on that date, but the relevant exhibit shows that the Notice of Trustee's Sale was the actual document mailed.

In June 2011, Siqueiros requested a "reinstatement calculation," in order to cure the default. (SUF ¶ 32.) Specifically, on June 28, 2011, Siqueiros called BANA and told BANA's agent to fax the reinstatement calculation to a telephone number ending in 1251. (SUF ¶¶ 33, 35.) BANA faxed the reinstatement calculation to that number on June 28, 2011. (SUF ¶ 34.) Siqueiros did not remit payment to make current her payments on the loan. (SUF ¶ 36.) As a consequence, the Cathedral City property was sold at a public auction on July 7, 2011. (SUF ¶ 37.)

C. Procedural History

Siqueiros initially filed this action on October 2, 2013. The Court granted two motions brought by BANA to dismiss the Complaint with leave to amend. (Doc. Nos. 18, 25.) BANA also moved to have the SAC dismissed; the Court granted that motion in part and denied it in part. (Doc. No. 32.) The Court held that, to the extent Siqueiros alleged that BANA breached the terms of the DOT when it failed to provide her with notice of the default or of the foreclosure, or that it failed to provide her with a reinstatement figure timely in breach of the DOT and the covenant of good faith and fair dealing, the SAC could not be dismissed for failure to state a claim. As it related to any of her other claims, including her claims for fraud or negligence alleging that BANA induced her to default on her loan, the Court dismissed those claims without leave to amend.

BANA filed the MSJ on April 17, 2015. (Doc. No. 44.) Along with the MSJ, BANA filed:

• A Statement of Undisputed Facts (Doc. No. 49);

• the Declaration of Shama Ali (Doc. No. 45);

• the Declaration of Michael Gerst (Doc. No. 46);

• the Declaration of Tabi Habib (Doc. No. 47);

• the Declaration of Jamie Wells (Doc. No. 48);

• Exhibits 1-18 (Doc. No. 50-51).

On April 24, 2015, Siqueiros filed her Opposition to the MSJ. (Doc. No. 52). Along with her Opposition, Siqueiros filed:

The Opposition is three and a half pages long and contains virtually no legal substance or argument. Instead, it claims, without any analysis, that "[t]hese issues are in dispute and are sufficient to prove breach of contract and breach of the covenant of good faith and fair dealing, and support denying this Motion for Summary Judgment." (Opp'n at 3.)

• A Statement of Genuine Issues ("SGI") (Doc. No. 52);

• the Declaration of Nancy Siqueiros (Doc. No. 53).


On May 4, 2015, BANA filed its Reply. (Doc. No. 55.) Along with the Reply, BANA filed:

• BANA's Response to Siqueiros's Statement of Genuine Issues (Doc. No. 56);

• BANA's Objections to Evidence Submitted in Support of Siqueiros's Statement of Genuine Issues (Doc. No. 57).



II. LEGAL STANDARD

A motion for summary judgment or summary adjudication shall be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party must show that "under the governing law, there can be but one reasonable conclusion as to the verdict." Anderson, 477 U.S. at 250.

Generally, the burden is on the moving party to demonstrate that it is entitled to summary judgment. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998); Retail Clerks Union Local 648 v. Hub Pharmacy, Inc., 707 F.2d 1030, 1033 (9th Cir. 1983). The moving party bears the initial burden of identifying the elements of the claim or defense and evidence that it believes demonstrates the absence of an issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

Where the non-moving party has the burden at trial, however, the moving party need not produce evidence negating or disproving every essential element of the non-moving party's case. Celotex, 477 U.S. at 325. Instead, the moving party's burden is met by pointing out that there is an absence of evidence supporting the non-moving party's case. Id.

The burden then shifts to the non-moving party to show that there is a genuine issue of material fact that must be resolved at trial. Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 256. The non-moving party must make an affirmative showing on all matters placed in issue by the motion as to which it has the burden of proof at trial. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 252. See also William W. Schwarzer, A. Wallace Tashima & James M. Wagstaffe, Federal Civil Procedure Before Trial § 14:144. "This burden is not a light one. The non-moving party must show more than the mere existence of a scintilla of evidence." In re Oracle Corp. Securities Litigation, 627 F.3d 376, 387 (9th Cir. 2010) (citing Anderson, 477 U.S. at 252).

A genuine issue of material fact will exist "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson, 477 U.S. at 248. In ruling on a motion for summary judgment, a court construes the evidence in the light most favorable to the non-moving party. Barlow v. Ground, 943 F.2d 1132, 1135 (9th Cir. 1991); T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987).

III. DISCUSSION

As explained above, only two claims remain in this action: (1) breach of contract based on BANA's alleged failure to provide Siqueiros with notice of the default or notice of the trustee's and failure to provide her with the reinstatement amount in accordance with the terms of the DOT, and (2) breach of the covenant of good faith and fair dealing based on BANA's alleged failure to provide her with the reinstatement amount. (Dismissal Order at 13-16.) For the reasons explained below, Siqueiros has pointed to no genuine dispute of material fact to preclude a grant of summary judgment as to any of those claims. Accordingly, the Court finds that the undisputed facts show that none of Siqueiros's claims have merit.

A. Siqueiros's Breach of Contract Claims Fail

"A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff." Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1388 (1990) (citing Reichert v. General Ins. Co., 68 Cal. 2d 822, 830 (1968)).

1. BANA Did Not Breach the DOT by Failing to Mail the Notice of Default

With respect to Siqueiros's claim that BANA breached the terms of the DOT by failing to mail her the Notice of the Default, the undisputed evidence shows that she was, in fact, mailed that notice. As noted above, Section 22 of the DOT, which details the notice required to accelerate the loan in case of default, states that

notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means.

(SUF ¶ 7.) It is undisputed that the Notice of Default was mailed to Siqueiros's Torrance address, in accordance with the DOT. (SUF ¶ 28.) Thus, as it is undisputed that BANA mailed Siqueiros the Notice of Default in accordance with the terms of the DOT, Siqueiros cannot prevail on her claim that BANA breached the DOT, and Siqueiros fails to raise a triable issue of fact as to this claim. Accordingly, the Court enters judgment against Siqueiros on this claim.

2. BANA Did Not Breach the DOT by Failing to Mail the Notice of Trustee's Sale

After the Notice of Default was mailed to Siqueiros, she did not cure the default. (SUF ¶ 17, 27.) Thus, BANA was justified in exercising its power to sell the property, pursuant to the DOT. It is also undisputed that BANA mailed a copy of the Notice of Trustee's Sale to Siqueiros's Torrance address, in accordance with the DOT. (SUF ¶ 31.) Thus, as it is undisputed that BANA mailed Siqueiros the Notice of Trustee's Sale in accordance with the terms of the DOT, Siqueiros cannot prevail on her claim that BANA breached the DOT, and Siqueiros fails to raise a triable issue of fact as to this claim. Accordingly, the Court enters judgment against Siqueiros on this claim.

3. BANA Did Not Breach the DOT by Failing to Provide Siqueiros with a Reinstatement Calculation

Finally, it is undisputed that Siqueiros attempted to contact BANA in June 2011 in order to reinstate her loan. (SUF ¶ 32.) As noted above, Section 15 of the DOT provides the borrower with the right to bring the loan current, after paying a reinstatement amount, so long as the borrower does so "at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate . . . ." (SUF ¶ 8.)

BANA's business records indicate that on June 28, 2011, Siqueiros called and requested a reinstatement calculation. (SUF ¶ 33.) Siqueiros requested that BANA fax the reinstatement calculation to her telephone number ending in 1215. (SUF ¶¶ 32-33.) Siqueiros later confirmed that the telephone number ending in 1215 was indeed hers. (SUF ¶ 35.) BANA transmitted the reinstatement calculation to Siqueiros via facsimile to the telephone number ending in 1215 on June 28, 2011, at 10:35 a.m. (SUF ¶ 34.) Thus, it is undisputed that BANA sent Siqueiros a reinstatement calculation on June 28, 2011. Though Siqueiros claims that her efax was broken at the time BANA faxed her the reinstatement calculation (see SGI ¶ 13), this does not change the undisputed fact that the reinstatement calculation was indeed sent.

According to Siqueiros, however, she contacted BANA on June 30, 2011, to request again that BANA provide her with a reinstatement figure faxed to a different telephone number; BANA apparently never sent this fax. (SGI ¶¶ 14-17.) Even assuming this is true, however, BANA had no obligation to provide her a reinstatement calculation on that date.

First, as explained above, BANA already had sent Siqueiros a reinstatement calculation on June 28, 2011. More critically, under the DOT, BANA had no obligation to send her a reinstatement calculation on June 30, 2011 because she could no longer redeem the property by paying the arrears as of that date.

As explained by BANA in its Reply, the Trustee's Sale had been noticed for July 7, 2011. (Reply at 5-8; SUF ¶ 30.) The DOT allows a borrower to submit a payment to bring a loan current at the earliest of five days before the trustee's sale or any other such period as provided by law. Here, California law does so provide. California Civil Code § 2924c(e) states that the right to reinstate exists "until five business days prior to the date of sale set forth in the initial recorded notice of sale." Section 2924c(e) further reiterates that "[a]ny right of reinstatement created by this section is terminated five business days prior to the date of sale" and that "[n]othing contained herein shall give rise to a right of reinstatement during the period of five business days prior to the date of sale." Id.; Gonzalez v. Wells Fargo Bank, FSB, 2011 WL 1877219, at *2 (N.D. Cal. May 17, 2011) ("the statute clearly states that Gonzalez's right to reinstatement terminates five business days before the date of sale.").

As used in Section 2924c(e), the term "business day" has the same meaning as specified in California Civil Code § 9. Section 9, in turn, states that business days are every day other than Sundays and holidays as provided by the California Government Code. The California Government Code states that July 4th is a holiday. Cal. Gov't Code § 6700(a)(8).

June 30, 2011 was a Thursday, less than five business days before the Trustee's Sale on July 7, 2011. Even if she wanted to, Siqueiros could not have exercised her statutory right of reinstatement on that date; thus, BANA could not have breached the terms of DOT by failing to provide her with a reinstatement calculation that would have been of no use to her. To the extent Siqueiros claims that BANA breached the terms of the DOT by failing to provide her with reinstatement calculations on dates after June 30, 2011, those claims similarly fail because Siqueiros could not have exercised the option to pay the reinstatement calculation at any point after June 30, 2011.

There were four: Friday July 1, 2010, Saturday July 2, 2010, Tuesday July 5, and Wednesday July 6, 2010.

As BANA points out, to hold otherwise would lead to absurd results, namely that Siqueiros "could wait until a few days before the properly noticed foreclosure sale to request a reinstatement figure and then bring a claim for breach of contract years later because BANA allegedly failed to get the reinstatement figure to her quick enough." (Reply at 8.) Such a result would be contrary to statute and the terms of the DOT.

Accordingly, the Court finds that the undisputed evidence shows that Siqueiros cannot prevail on her claim that BANA breached the DOT by failing to provide her with a reinstatement calculation and Siqueiros fails to raise a triable issue of fact as to this claim. Accordingly, the Court enters judgment against Siqueiros on this claim.

B. Siqueiros's Claim for Breach of the Covenant of Good Faith and Fair Dealing Also Fails

The Court also allowed Siqueiros to proceed on her theory that BANA breached the covenant of good faith and fair dealing by refusing to provide her with a reinstatement figure. (Dismissal Order at 12-13.)

"There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement." Kransco v. American Empire Surplus Lines Ins. Co., 23 Cal. 4th 390 (2000) (quoting Comunale v. Traders & General Ins. Co., 50 Cal. 2d 654, 658 (1958)). "In essence, the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party's rights to the benefits of the contract." Racine & Laramie, Ltd. v. Dep't of Parks & Recreation, 11 Cal. App. 4th 1026, 1031-32 (1992) (quoting Love v. Fire Ins. Exchange, 221 Cal. App. 3d 1136, 1153 (1990)).

To state a claim for a breach of the covenant of good faith and fair dealing, the plaintiff must allege: "(1) the parties entered into a contract; (2) the plaintiff fulfilled [her] obligations under the contract; (3) any conditions precedent to the defendant's performance occurred; (4) the defendant unfairly interfered with the plaintiff's rights to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant's conduct." Rosenfeld v. JPMorgan Chase Bank, N.A., 732 F. Supp. 2d 952, 968 (N.D. Cal. 2010) (citing Judicial Council Of California Civil Jury Instruction 325).

In order for a breach of contract to be a breach of the covenant of good faith and fair dealing, there also must be "'something beyond breach of the contractual duty itself,' [such as] 'unfair dealing rather than mistaken judgment . . . .'" Congleton v. Nat'l Union Fire Ins. Co., 189 Cal. App. 3d 51, 59 (1987).

Here, as discussed above, there is no evidence that BANA interfered in any way with Siqueiros's rights to receive the benefits of the DOT. The undisputed evidence instead shows that BANA mailed Siqueiros the Notice of Default, the Notice of Trustee's Sale, and faxed her a reinstatement calculation on June 28, 2011, at her request. By the time Siqueiros made any subsequent attempts to obtain a reinstatement calculation, her contractual and statutory right to redeem had passed.

As pointed out by BANA in its Reply, many of the assertions Siqueiros made in her declaration in opposition to summary judgment contradict the allegations in the SAC or are entirely new. (Reply at 9-10.) The Court has not considered allegations that contradict the SAC (see Cline v. Indus. Maint. Eng'g & Contracting Co., 200 F.3d 1223, 1232 (9th Cir. 2000) (holding that a party could not contradict allegations in an earlier pleading in an effort to survive summary judgment), or allegations that were not part of the SAC (see Wasco Products, Inc. v. Southwall Technologies, Inc., 435 F.3d 989, 992 (9th Cir. 2006) ("[T]he necessary factual averments are required with respect to each material element of the underlying legal theory . . . . Simply put, summary judgment is not a procedural second chance to flesh out inadequate pleadings." (citation omitted)).
--------

Accordingly, the Court finds that the undisputed evidence shows that Siqueiros cannot prevail on her claim that BANA breached the implied covenant of good faith and fair dealing by failing to provide her with a reinstatement calculation. Thus, the Court enters judgment against Siqueiros on this claim.

IV. CONCLUSION

For the reasons stated above, the Court GRANTS the MSJ in its entirety and enters judgment in favor of BANA as to all claims. Dated: June 1, 2015

/s/_________


VIRGINIA A. PHILLIPS


United States District Judge