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Ivanoff v. Bank of America, N.A.

California Court of Appeals, Second District, Seventh Division

March 13, 2017

MARINA IVANOFF, Plaintiff and Appellant,
BANK OF AMERICA, N.A., Defendant and Respondent.

         APPEAL from an order of the Superior Court of Los Angeles County, BC591972 Holly E. Kendig, Judge. Affirmed.

          Marina Ivanoff, in pro. per., for Plaintiff and Appellant.

          Bryan Cave, Douglas E. Winter, Andrea M. Hicks, and Richard Steelman, Jr., for Defendant and Respondent.

          PERLUSS, P. J.

         Marina Ivanoff appeals the order dismissing with prejudice her complaint against the Bank of America after the trial court sustained without leave to amend the Bank's demurrer to Ivanoff's complaint for violations of the federal Truth In Lending Act (TILA) (15 U.S.C. § 1601 et seq.) and California's unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), fraudulent omission/concealment and injunctive relief. Ivanoff argues the trial court improperly applied the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion) based on her prior unsuccessful lawsuit against the Bank for breach of contract and contends she stated valid causes of action on the theories alleged in her complaint. Ivanoff also asserts the court erred in denying her an opportunity to amend her complaint. We affirm.


         1. Ivanoff's Initial Lawsuit for Breach of Contract

         Ivanoff originally sued Bank of America, N.A., successor to BAC Home Loans Servicing LP and Countrywide Bank, FSB, as well as ReconTrust Company, N.A., and Mortgage Electronic Registration Systems, Inc. (MERS), in July 2013, asserting causes of action for breach of contract, temporary restraining order and preliminary injunction, violation of the UCL, specific performance and equitable rescission.

         In her complaint Ivanoff alleged she was the owner of a condominium in West Los Angeles, which she had purchased in 2004 with a loan secured by a deed of trust in favor of Washington Mutual Bank. Ivanoff refinanced her loan in 2006-2007 with Countrywide; the refinancing closed in December 2007. Contrary to representations made to her by Countrywide representatives, a penalty and fees were added to the loan balance, increasing the amount she borrowed from $636, 000 to $711, 000. Those additional undisclosed amounts, included in breach of the parties' agreement, made the loan unaffordable; and Ivanoff defaulted.

         In October 2010 Ivanoff sought a modification of the loan with the Bank, which had acquired Countrywide. Ivanoff alleged the Bank agreed to modify the loan, following successful completion of a trial loan modification agreement, with a new principal balance of $847.989.90, a new interest rate of 2 percent, an effective date of February 1, 2011 and a maturity date of January 1, 2051. Monthly loan payments were to be $2, 567.93. However, according to Ivanoff, the Bank breached their loan modification agreement by adding an additional sum for required “escrow option insurance, ” which increased the monthly payment to $3, 328.65.

         The defendants demurred on numerous grounds. The trial court sustained the demurrer, in part, because Ivanoff had not alleged whether the agreements at issue were oral, written or implied, had not attached copies of any of the agreements and had not alleged the material terms of the agreements with the requisite detail. The court also found that certain of her claims, as pleaded, were barred by the statute of limitations or the statute of frauds.

         Given leave to amend, Ivanoff filed a first amended complaint that was virtually identical to the original complaint and that, once again, did not attach any of the alleged agreements or describe their terms in any greater detail. The trial court sustained the defendants' demurrer to the first amended complaint without leave to amend, observing, “the opposition fails to address about eighty percent of the issues raised (e.g., Statute of Limitations and Statute of Frauds), and fails to cite any governing law on point (e.g., tender, contract and injunction).” The court then explained that “‘[c]ontentions are waived when a party fails to support them with reasoned argument and citations to authority.'”

         The Court of Appeal affirmed. (Ivanoff v. Bank of America (May 13, 2015, B256462 [nonpub. opn.].) The court stated Ivanoff's brief was “blatantly deficient, ” containing no citation to the record and essentially no factual or legal analysis. The court then ruled, “Since Ivanoff has not demonstrated that the trial court erred, we are in no position to reverse its order.” (Ibid.) In addition, because Ivanoff had made no attempt to demonstrate how she could amend her complaint to plead a viable claim, the Court of Appeal concluded leave to amend was not warranted.

         2. The Current TILA/Fraud Lawsuit

         On August 20, 2015, four weeks after the Supreme Court denied Ivanoff's petition for review in the initial lawsuit, Ivanoff again sued the Bank, ReconTrust and MERS, as well as two of the Bank's employees, in a complaint for violation of TILA, the UCL, fraudulent omission/concealment and injunctive relief. The general allegations of the complaint were identical to those in the prior lawsuit relating to the December 2007 refinancing and February 1, 2011 loan modification agreements. (As in her prior lawsuit, Ivanoff did not attach copies of the refinancing or loan modification agreements.)

         Rather than alleging breach of contract, however, Ivanoff's new lawsuit alleged the Bank violated TILA by failing to make required disclosures with respect to the “escrow option insurance, ” which was surreptitiously added to Ivanoff's monthly loan payment obligation. Ivanoff additionally alleged the Bank's violation of TILA was an unlawful business practice within the meaning of the UCL and the failure of its employees to disclose the loan modification agreement would include an additional monthly sum of $760.72 for “escrow option insurance” constituted fraudulent concealment. Had she known the true facts, Ivanoff alleged, she would have considered other financing options. Ivanoff also sought injunctive relief preventing a sale at foreclosure of her condominium.

         The Bank demurred, contending Ivanoff's complaint was barred as a matter of law by the doctrines of claim preclusion and issue preclusion. The Bank argued Ivanoff was asserting the same primary right in both actions (claim preclusion) and the issues alleged had been actually litigated and decided against Ivanoff on the merits (issue preclusion). The Bank also argued in support of its demurrer that the claims for violation of TILA and fraud were time-barred; Ivanoff lacked standing to assert a UCL claim because she failed to allege she had lost money or property as a result of the Bank's actions; and the claim for an injunction against foreclosure was improper because injunctive relief is a remedy, not a cause of action. In her opposition to the demurrer Ivanoff emphasized she had not pleaded either violation of TILA or fraud in her prior lawsuit.

         The trial court sustained the demurrer without leave to amend. The court ruled Ivanoff's claims were barred by res judicata, explaining “[t]he ‘primary right' of Plaintiff in both actions-the right to be free from increased loan payments that were not agreed to-is the same, which means the present proceeding is on the same ‘cause of action' as the prior proceeding.” The court also ruled the claims were barred by collateral estoppel because her four causes of action “all involve the same underlying issue-the validity of the increased loan payments that Plaintiff allegedly did not agree to.” That issue, the trial court found, had already been litigated, decided and finalized in the prior litigation. Finally, the trial court agreed with the Bank that Ivanoff's claims independently fail: The TILA and fraud claims were barred by the governing statutes of limitation (one year and three years, respectively); Ivanoff lacked standing to bring a UCL claim; and the cause of action for injunctive relief was not a valid cause of action.

         The order sustaining the demurrer and judgment of dismissal was filed March 3, 2016. Notice of entry was served on March 10, ...

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