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Michael anderson et al v. Select Portfolio Servicing

November 8, 2012

MICHAEL ANDERSON ET AL., PLAINTIFFS AND APPELLANTS,
v.
SELECT PORTFOLIO SERVICING, INC., ET AL., DEFENDANTS AND RESPONDENTS.



(Super. Ct. No. SCV0027034)

The opinion of the court was delivered by: Raye , P. J.

Anderson v. Select Portfolio Servicing

CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Homeowners and plaintiffs Michael Anderson and Karen Anderson (Anderson) sought to refinance their loan and entered into a mortgage loan with defendant Accredited Home Lenders, Inc. (Accredited), secured by a deed of trust. Anderson later filed a complaint against Accredited and the loan servicer, Select Portfolio Servicing, Inc. (Select), alleging numerous causes of action, including fraud and violations of Business and Professions Code sections 17200 and 17500. Subsequently, Anderson filed an amended complaint against Accredited, Select, and various other defendants alleging deceit, civil conspiracy, negligence, breach of fiduciary duty, and violations of Business and Professions Code section 17200. Select and defendants other than Accredited filed a demurrer, which the trial court sustained without leave to amend. Anderson appeals, arguing the trial court erred in not granting leave to amend. We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

In April 2006 Anderson entered into a mortgage loan in the principal amount of $236,500 with lender Home Funds Direct, the fictitious business name for Accredited. A deed of trust secured the loan encumbering the Anderson property.

Prior to taking out the loan, a mortgage broker, Robert Siniscalchi, contacted Anderson. According to Anderson, Siniscalchi made several oral representations that differed from the written terms in the loan documentation. Anderson was not given the opportunity to read the loan documents at the time of the closing of the loan.

The deed of trust states, in part: "Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower. A sale might result in a change in the entity (known as the 'Loan Servicer') that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. There also might be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change . . . ." Select is the current servicer of the loan.

In 2010 Anderson filed a complaint against Accredited and Select alleging deceit, fraud, breach of fiduciary duty, and violations of Business and Professions Code sections 17200 and 17500, and seeking restitution and declaratory relief. The complaint alleged Select was liable under a theory of successor liability. The complaint did not name defendant Mortgage Electronic Registration Systems, Inc. (Mortgage Electronic) or defendant Deutsche Bank National Trust Company (Deutsche Bank). At the time the complaint was filed, Anderson did not know the loan had been sold to Deutsche Bank.

Select filed a demurrer to Anderson's complaint. Select's demurrer argued Anderson's claims were barred by the applicable statute of limitations and were uncertain and ambiguous. Prior to a hearing on the demurrer, Anderson filed an amended complaint.

In the amended complaint, Anderson added Mortgage Electronic and Deutsche Bank as defendants and alleged causes of action for deceit, civil conspiracy, negligence, breach of fiduciary duty, and violations of Business and Professions Code section 17200, and sought declaratory and injunctive relief. The amended complaint also challenged Deutsche Bank's claim to the beneficial interest under the deed of trust and Mortgage Electronic's authority to assign that interest.

In the amended complaint, Anderson alleged Siniscalchi stated he was a loan broker for Accredited. Anderson was presented with a " 'stack' " of loan documents and was rushed into signing them without reading or reviewing them. The complaint alleges several misrepresentations: Michael Anderson would be the sole borrower, the loan was an FHA loan at 6.9 percent, and there would not be a prepayment penalty prior to closing. In fact, both Michael and Karen Anderson are listed as borrowers, the loan was a conventional loan at 6.999 percent, and the loan had a substantial prepayment penalty.

According to the amended complaint, a determination as to whether Anderson would be able to make the payments "was never truly made." The amended complaint also alleges Siniscalchi misrepresented that Anderson could refinance "if they became unable to make their monthly mortgage payments."

Select, Deutsche Bank, and Mortgage Electronic (defendants) filed a demurrer to the amended complaint on the grounds of the statute of limitations and equitable tolling, the failure to allege successor liability of defendants, the requirement of specificity in fraud claims, the lack of a duty owed by a lender to a ...


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