(Super. Ct. No. 56-2010-00366106- CU-OR-SIM) (Ventura County) David Worley, Judge Superior Court County of Ventura
The opinion of the court was delivered by: Gilbert, P.J.
CERTIFIED FOR PUBLICATION
Homeowners hope to enter into a loan modification agreement with their lender pursuant to the federal Home Affordable Mortgage Program (HAMP). Preliminary to a possible loan modification agreement, owners execute a "loan work-out plan" for the lender's review. During its review, lender accepts reduced mortgage payments from owners.
We conclude this plan, however unique, is no less subject to general principles of contract law. We also conclude that when a lender suspends foreclosure proceedings pursuant to such a plan, as it did here, it did not violate the so-called one-form-of-action rule.
Ruben and Dora Nungaray appeal a summary judgment entered in favor of defendants Litton Loan Servicing, LP (Litton) and Bank of America, National Association (Bank). We affirm.
FACTS AND PROCEDURAL HISTORY
On January 23, 2010, the Nungarays brought an action against Litton and the Bank, alleging causes of action for breach of contract, negligence, and quiet title. The lawsuit arose from the Nungarays' default on an obligation secured by a deed of trust against their Simi Valley home, and a subsequent non-judicial foreclosure. The Nungarays allege that the foreclosure sale and their subsequent eviction from the property were improper because they had entered into and fully performed a loan modification agreement with Litton and the Bank prior to the foreclosure sale. The alleged agreement was a HAMP loan workout pursuant to title 12 United States Code section 5201 et seq.*fn1 (Williams v. Geithner (D. Minn., Nov. 9, 2009, No. 09-1959) 2009 U.S. Dist. Lexis 104096 [detailed discussion of HAMP].)*fn2 Among other things, the Nungarays requested a court order canceling and expunging the trustee's deed in foreclosure and quieting title in their favor, compensatory damages, and attorney's fees.
Litton successfully demurred to the second cause of action alleging negligence, and the Nungarays did not amend the complaint. After answering the complaint, Litton and the Bank moved for summary judgment, asserting that the Nungarays could not establish every element of the remaining two causes of action, and that a complete defense to the lawsuit exists. (Code Civ. Proc., § 437c, subd. (p)(2).)*fn3
Declaratory and documentary evidence submitted by the parties, including recorded documents that were judicially noticed by the trial court, established this:
On March 3, 2006, the Nungarays refinanced their property and executed a promissory note for $500,000 and a deed of trust securing the obligation. The original beneficiary of the deed of trust was Mandalay Mortgage, LLC, but the Bank later acquired beneficial interest through an assignment recorded on March 5, 2009. Litton serviced the loan on behalf of the Bank.
By January 2009, the Nungarays were delinquent in their loan payments. On January 9, 2009, the trustee under the deed of trust recorded a notice of default and election to sell under deed of trust. Three months later, the trustee recorded a notice of trustee's sale set for April 29, 2009.
In May 2009, the Nungarays employed a business entity to negotiate and obtain a modification of their existing obligation with the Bank. Subsequently, the Nungarays executed a document entitled "Loan Workout Plan (Step One of Two-Step Documentation Process)" (Plan) on July 3, 2009. Neither Litton nor the Bank executed the Plan.
In part, the three-page Plan stated:
"If I am in compliance with this Loan Workout Plan (the "Plan") and my representations in Section 1 [regarding ownership of the property and documentation of financial hardship] continue to be true in all material respects, then the Lender will provide ...