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Miles v. Deutsche Bank National Trust Co.

California Court of Appeals, Fourth District, Third Division

April 29, 2015

JOHN MILES, Plaintiff and Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY et al., Defendants and Respondents.

Appeal from a judgment of the Superior Court of Riverside County No. RIC541334, Paulette Durand-Barkley, Temporary Judge.[*]

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COUNSEL

Alessi & Koening, Ryan Kerbow and Thomas J. Bayard for Plaintiff and Appellant.

Houser & Allison, Eric D. Houser, Brian J. Wagner, and Eileen M. Horschel for Defendants and Respondents.

OPINION

IKOLA, J.

This case involves allegations of a wrongful foreclosure and related causes of action. Plaintiff John Miles appeals from a judgment dismissing his breach of contract, fraud, and negligent misrepresentation causes of action pursuant to a sustained demurrer, and a summary judgment in favor of defendants on the wrongful foreclosure cause of action.

With respect to the demurred causes of action, we reverse. In the record before us, the court did not offer any explanation for its ruling. Based on our independent review of the complaint, we conclude plaintiff adequately stated his claims.

With respect to the wrongful foreclosure cause of action, we also reverse. The court granted summary judgment on the sole basis tat plaintiff could not prove damages because he did not have any equity in the home when it was sold at a non-judicial foreclosure sale. Wrongful foreclosure is a tort, however, and thus plaintiff may recover any damages proximately caused by defendants’ wrongdoing. Plaintiff offered evidence that he lost rental income and suffered emotional distress as a result of the foreclosure. This is disputed, of course, but it is sufficient to survive a summary judgment motion.

I.

The Demurrer

FACTS ALLEGED IN THE FIRST AMENDED COMPLAINT

Plaintiff owned property in Riverside. In July 2005, plaintiff refinanced the loan on his property with a total loan amount of $815, 000. This was an adjustable rate mortgage. The loan was serviced by defendant HomEq Servicing (HomEq). For the first 21 months of the loan, plaintiff was current

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on his payments. During the period between June 2007 and September 2007, the monthly payment on the loan increased first to $5, 968 per month, and then to $6, 800 per month.

In August 2007, plaintiff applied for a loan modification to try making payments more affordable. In February 2008, HomEq informed plaintiff that he had to make “a lump sum $12, 000 payment as a ‘modification processing fee’ before Plaintiff could... see the terms of the proposed modification.” Plaintiff paid the fee. In March 2008, HomEq gave plaintiff a loan modification agreement, to which the parties agreed. Under the terms of that agreement, plaintiff’s loan balance was increased to $834, 051.86. The interest rate was fixed at 5.990 percent (the prior rate was 7.490 percent), and the monthly payment would be $6, 236.78. Plaintiff made a payment under that agreement, [1] but the next month HomEq stated they would no longer honor the terms of that agreement. Instead, HomEq sent a new agreement that increased the loan balance to $870, 767.34. It offered no explanation for the change.

Plaintiff believed the March 2008 agreement was valid, and thus he made payments to HomEq under that agreement for March, April, and June of 2008, totaling $18, 789. In June 2008, HomEq sent plaintiff yet another loan modification agreement, this time raising the balance to $895, 117.18, again without explanation.

In July 2008, HomEq sent correspondence to plaintiff demanding a payment of $35, 684 to process a new loan modification. HomEq then began refusing plaintiff’s payments under the March 2008 agreement, requiring that he pay $7, 600 per month instead. When plaintiff insisted on the terms of the March 2008 agreement, HomEq recorded a notice of default and election to sell the property. In October 2008, HomEq recorded a notice of trustee’s sale of the property with a sale date of November 20, 2008.

HomEq then informed plaintiff it would give him a new modification if he would send a payment of $14, 050. In light of the looming sale date, plaintiff complied. Instead of sending a loan modification agreement, however, HomEq sent a forebearance agreement and ...


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