Jones v. Nationstar Mortgage CA4/1

Filed 7/25/16 Jones v. Nationstar Mortgage CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication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.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

ROBERT JONES et al., D067834

Plaintiffs and Appellants,

v. (Super. Ct. No. 37-2013-00049308-
CU-OR-CTL)
NATIONSTAR MORTGAGE, LLC et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of San Diego County, Randa

Trapp, Judge. Reversed.

The Welch Law Group and Eric M. Welch for Plaintiffs and Appellants.

Akerman, Justin D. Balser and Alicia Y. Hou for Defendants and Respondents.

In this case, the plaintiffs, Robert Jones and Gina Jones (the Joneses), allege a loan

servicer, Nationstar Mortgage, LLC (Nationstar), was subject to the requirements of the

Homeowner Bill of Rights (the HBOR) and Civil Code sections 2923.4-2913.7,1 and

1 All further statutory references are to the Civil Code unless otherwise indicated.
failed to provide them with the information required by section 2923.6. As we explain

more fully, the Joneses have stated a valid cause of action for violation of the HBOR.

In addition to claims under the HBOR, the Joneses alleged in the trial court

common law causes of action growing out of their contention Nationstar agreed to

provide them with a loan modification on the condition the Joneses provide Nationstar

with financial documentation and information. The Joneses allege they provided

documentation to Nationstar and were never advised that their submission was defective

or insufficient; they further allege Nationstar had no intention of offering them a loan

modification and that Nationstar's conduct gives rise to claims for fraud, negligent

misrepresentation, breach of contract, and breach of the covenant of good faith and fair

dealing. The facts alleged in the Joneses' second amended complaint (SAC) support

these common law claims.

In light of the foregoing, the trial court erred in sustaining in part defendants'

demurrer to the Joneses' SAC without leave to amend and thereafter granting defendants'

motion for summary judgment with respect to the balance of the Joneses' claims.

Accordingly, we reverse the judgment of dismissal entered by the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

A. 2006-2013

The Joneses purchased their home in 2006. SCME Mortgage Bankers, Inc.

provided the Joneses with purchase money financing, which was memorialized in a

$500,000 note executed by the Joneses and secured by a deed of trust. Mortgage

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Electronic Registration Systems, Inc. (MERS) was initially named as beneficiary of the

deed of trust. At some point after the Joneses purchased their home, defendant Aurora

Bank FSB (Aurora), took over responsibility for servicing the loan. According to the

Joneses, they made regular payments on the note; according to an employee of Aurora

who examined Aurora's records, the Joneses made inconsistent payments.

On March 28, 2012, MERS assigned its interest in the Joneses deed of trust to

Aurora. On June 6, 2012, Aurora caused the trustee under the deed of trust to record a

notice of default. The notice of default stated the Joneses were $14,730.03 in arrears on

the note.

On July 1, 2012, defendant Nationstar obtained the right to service the Joneses'

note and deed of trust. According to both the Joneses and Nationstar, in September 2012,

the Joneses spoke with a Nationstar employee about a loan modification. The record

shows that on September 4, 2012, Nationstar sent the Joneses electronic facsimile (fax)

correspondence, which included a loan modification application and asked that the

Joneses return a number of financial records and financial information within 48 hours.

The Joneses sent Nationstar a number of the documents Nationstar requested and,

according to their later complaint, heard nothing from Nationstar until April 30, 2013,

when Nationstar caused the trustee to record a notice of sale.

B. Trial Court Proceedings

On January 1, 2013, the HBOR became effective. In general, the HBOR imposes

on loan servicers, such as Nationstar, an obligation to offer homeowners loan

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modifications and other alternatives to foreclosure and to consider a homeowner's

application for such relief in good faith; more particularly, the HBOR requires that loan

servicers meet their loan modification and foreclosure alternatives obligation as a

condition to their right to record or cause to be recorded notices of default and notices of

sale under deeds of trust. (See §§ 2923.5, 2923.7, 2924.18.)

Shortly after Nationstar caused the trustee to record a notice of sale under the

Joneses' deed of trust in April 2013, Robert Jones filed a complaint against Nationstar

and Aurora. Later, in filing an amended complaint and in compliance with the trial

court's order, Robert Jones added Gina Jones as a plaintiff. The trial court granted Robert

Jones injunctive relief from the noticed sale and, following a demurrer sustained with

leave to amend, the Joneses filed the SAC.

The SAC alleged a number of claims based on asserted violations of the HBOR

and common law claims based on the Joneses' allegation that Nationstar had promised to

give them a loan modification if they provided Nationstar with financial documents and

financial information. Nationstar and Aurora demurred to the SAC. The trial court

sustained the demurrer without leave to amend with respect to claims based on violations

of the HBOR, which allegedly occurred before the effective date of the HBOR, January

1, 2013. The trial court overruled the demurrer with respect to (1) a claim based on an

alleged violation of a statute that was in effect before January 1, 2013 and (2) the HBOR

claims that were based on conduct that occurred after January 1, 2013.

The trial court also sustained without leave to amend common law claims based

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on Nationstar's alleged promise to provide the Joneses with a loan modification; the court

found those claims were barred by the fact the Joneses did not provide Nationstar with all

the documents Nationstar requested in its fax and because the alleged promise to provide

a loan modification was within the statute of frauds. The trial court overruled the

demurrer with respect to the remaining common law claims for injunctive relief and

declaratory relief.

With respect to the Joneses' remaining statutory and common law claims,

Nationstar and Aurora moved for summary judgment or, in the alternative, summary

adjudication. The trial court granted the motion for summary judgment, finding that the

defendants had met their statutory duties and that the remaining statutory claims and

related claims for equitable relief should therefore be dismissed. Accepting as admissible

Nationstar's evidence with respect to the Joneses' payment history, the trial court also

granted summary judgment with respect to a remaining breach of written contract claim.

Thereafter, the trial court entered judgment dismissing the Joneses' complaint. The

Joneses filed a timely notice of appeal.

DISCUSSION

I

In reviewing orders sustaining demurrers without leave to amend and orders

granting summary judgment, our role is limited and well defined.

We review de novo an order sustaining a demurrer without leave to amend.

(Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The issue is whether, assuming the truth of

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all well-pleaded facts and those subject to judicial notice, the complaint alleged facts

sufficient to state a cause of action. (Zelig v. County of Los Angeles (2002) 27 Cal.4th

1112, 1126.) We disregard contentions, deductions, or conclusions of fact or law. (Ibid.)

" 'Further, we give the complaint a reasonable interpretation, reading it as a whole and its

parts in their context. [Citation.] When a demurrer is sustained, we determine whether

the complaint states facts sufficient to constitute a cause of action. [Citation.] And when

it is sustained without leave to amend, we decide whether there is a reasonable possibility

that the defect can be cured by amendment: if it can be, the trial court has abused its

discretion and we reverse; if not, there has been no abuse of discretion and we affirm.

[Citations.] The burden of proving such reasonable possibility is squarely on the

plaintiff.' " (Ibid.) However, if any one of the several grounds of demurrer is well taken,

the judgment must be affirmed. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962,

967.)

In broadly outlining the law of summary judgment, the California Supreme Court

stated: "If a party moving for summary judgment in any action . . . would prevail at trial

without submission of any issue of material fact to a trier of fact for determination, then

he should prevail on summary judgment. In such a case . . . the 'court should grant' the

motion 'and avoid a . . . trial' rendered 'useless' by nonsuit or directed verdict or similar

device." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 855.) Importantly, we

review orders granting summary judgment de novo. (Alexander v. Codemasters Group

Limited (2002) 104 Cal.App.4th 129, 139.)

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 II

As we indicated, the HBOR imposes on loan servicers duties they must fulfill

before recording or causing to be recorded notices of default and notices of sale under

deeds of trust. In imposing these duties, the Legislature meant to prevent the abusive

practice of " 'dual tracking,' " by which loan servicers, while considering borrowers'

requests for loan modifications or other relief from foreclosure, simultaneously processed

foreclosure on their homes. (See Monterossa v. Superior Court (2015) 237 Cal.App.4th

747, 752 (Monterossa); Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872,

904 (Jolley).) "[O]n July 2, 2012, the California Legislature passed Assembly Bill No.

278 and Senate Bill No. 900 (2011-2012 Reg. Sess.), which have since been signed into

law by the Governor. These provisions address more pointedly the foreclosure crisis in

our state through even greater encouragement to lenders and loan servicers to engage in

good faith loan modification efforts. [¶] One of the targets of the legislation is a practice

that has come to be known as 'dual tracking.' 'Dual tracking refers to a common bank

tactic. When a borrower in default seeks a loan modification, the institution often

continues to pursue foreclosure at the same time.' (Lazo, Banks are foreclosing while

homeowners pursue loan modifications, L.A. Times (Apr. 14, 2011); see Sen. Floor

Analyses, Conf. Rep. on Assem. Bill No. 278, as amended June 27, 2012, p. 3.) The

result is that the borrower does not know where he or she stands, and by the time

foreclosure becomes the lender's clear choice, it is too late for the borrower to find

options to avoid it. 'Mortgage lenders call it "dual tracking," but for homeowners

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struggling to avoid foreclosure, it might go by another name: the double-cross.' (Lazo,

Banks are foreclosing.)" (Jolley, at p. 904, fn. omitted.)

Thus, in enacting the HBOR, the Legislature stated in section 2923.4, subdivision

(a): "The purpose of the act that added this section is to ensure that, as part of the

nonjudicial foreclosure process, borrowers are considered for, and have a meaningful

opportunity to obtain, available loss mitigation options, if any, offered by or through the

borrower's mortgage servicer, such as loan modifications or other alternatives to

foreclosure. Nothing in the act that added this section, however, shall be interpreted to

require a particular result of that process."

Under the HBOR a loan servicer may not record or cause to be recorded a notice

of default unless it has fully informed a homeowner of the opportunity to apply for a loan

modification or other relief and may not record or cause to be recorded a notice of sale if

a completed application for modification or other relief has been submitted and any

appeal from the denial of the application has either been denied or the time for such

appeal has expired. (See §§ 2923.5, 2923.6, 2924.18.)

Importantly, the HBOR requires, in section 2923.7, subdivisions (a) and (b)(1)

that, when a borrower requests a foreclosure prevention alternative, a loan servicer must

appoint a single point of contact for the borrower, who must communicate with the

borrower with respect to the availability of foreclosure alternatives and the process by

which the borrower must apply for available alternatives. Subdivision (b)(2) requires the

point of contact be responsible for "[c]oordinating receipt of all documents associated

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with available foreclosure prevention alternatives and notifying the borrower of any

missing documents necessary to complete the application." (Italics added.) Subdivision

(b)(3) further requires that a point of contact have access to information that permits the

point of contact to: "timely, accurately, and adequately inform the borrower of the

current status of the foreclosure prevention alternative."

Violation of the obligations imposed by the HBOR give rise to claims for

injunctive relief from foreclosure, damages, and attorney fees. (See Monterossa, supra,

237 Cal.App.4th at p. 753.)

We agree with the trial court's determination that the duties imposed by the HBOR

did not arise until the law became effective on January 1, 2013. Nothing on the face of

the statute indicates the Legislature intended that conduct which occurred before the

statute became effective would be subject to the requirements of the statute. Such a

retroactive application of the new duties created by the statute would be inherently unfair

to loan servicers, who in good faith recorded notices of default and notices of sale before

the HBOR was adopted by the Legislature, let alone became effective. Our conclusion

that the statute only operated prospectively is consistent with the general rule that, in the

absence of some clear expression by the Legislature, statutes do not have retroactive

effect. (See Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1209.)

III

Nonetheless, we disagree with the trial court's determination, in ruling on

Nationstar and Aurora's demurrer to the SAC, that the complaint did not state either a

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valid claim for violation of section 2923.7 or for breach of contract.

A. Section 2923.7

Paragraph Nos. 154 and 155 of the SAC allege that in September 2012, a

representative of Nationstar told Robert Jones that if Jones supplied Nationstar with

financial documentation and information Nationstar would modify the Joneses' loan and

their monthly payments would be reduced to between $1,800 and $2,000 a month.

Nationstar then sent the Joneses a fax with an application for a loan modification,

including a list of documentation the Joneses needed to provide to Nationstar. The SAC

alleges that Robert Jones promptly faxed bank account and pay stub information to

Nationstar and, the SAC alleges, thereby fulfilled the requirements of the loan

modification application. The SAC further alleges Nationstar did not advise the Joneses

that they needed to provide any further documentation to complete their application;

instead, Nationstar recorded the notice of sale on April 30, 2013.

These allegations are sufficient to state a claim under section 2923.7, which we

recognize did not become effective until January 1, 2013. However, as we read the SAC,

as of January 1, 2013, the Joneses' request for a loan modification had neither been

expressly approved or denied and the Joneses had not been advised of the status of their

application or that their application was missing any documents. Admittedly, by its terms

Nationstar's offer expired 48 hours after it was made because, although the Joneses

provided Nationstar with some of the financial information required by Nationstar's fax,

as Nationstar contends, the Joneses did not provide it with all the documentation it

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required within the designated 48-hour period.

We would be willing to adopt Nationstar's apparent view that its offer to consider

a loan modification had expired because the Joneses had not met the conditions of the

offer within the 48-hour period Nationstar allowed, but for Nationstar's undisputed failure

to communicate that important fact to the Joneses. In our view, Nationstar's failure to

communicate the status of the September 2012 application has a direct bearing on

Nationstar's obligations under section 2923.7, when those obligations arose on January 1,

2013.

On January 1, 2013, "[u]pon the request of a borrower," (id., subd. (a)), Nationstar

had a duty under subdivision (b)(1) to advise borrowers such as the Joneses of any

foreclosure alternatives available to them and the process by which they could obtain

such relief, and a duty under subdivision (b)(2) to thereafter keep the Joneses advised as

to the status of the application and the need to supply additional information. Had

Nationstar promptly communicated to the Joneses the status of their September 2012

application, on January 1, 2013, it clearly would have fallen on the Joneses to avail

themselves of the protections provided by the HBOR. However, according to the

allegations of the SAC, Nationstar did not advise the Joneses about the status of their loan

modification application and left the Joneses with the apparent impression their

application was still pending. Thus, as of January 1, 2013, Nationstar was aware both

that the Joneses had requested a foreclosure alternative and that it had not advised them

of the status of that request. Given the remedial nature of the HBOR, and the particular

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communications abuse it was enacted to address, we interpret these circumstances as

giving rise to a request by the Joneses, as of January 1, 2013, for a foreclosure alternative

within the meaning of section 2923.7 and a consequent duty on the part of Nationstar to

meet the requirements of the statute.

We are persuaded to treat the Joneses' September 2012 loan modification

application as a continuing request for relief, which gave rise to duties under section

2923.7 when it became effective on January 1, 2013, by a number of practical, as well as

theoretical, considerations. First and foremost, as of January 1, 2013, Nationstar was

plainly aware the Joneses were interested in a foreclosure alternative; thus, the Joneses

fell squarely within the class of borrowers—those interested in a foreclosure

alternative—entitled at that point to the protections of section 2923.7. Moreover, the

practical effect of Nationstar's failure to communicate with the Joneses as to the status of

their 2012 application arguably hindered the Joneses' ability to later employ the

protections of the HBOR and make a formal request for a foreclosure alternative or

otherwise act to protect their interest in their home. Requiring loan servicers to

communicate with borrowers as to their rights, options, and the status of their

applications for relief were of course the principal goals of the Legislature in enacting the

HBOR. (See § 2923.4.) Thus, where, as here, the foreclosure process was initiated

before the HBOR became effective, but was not yet complete on January 1, 2013, we

believe the Legislature intended that after that date any pending foreclosures be governed

by the new statute and its specific duties to communicate with borrowers interested in

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avoiding foreclosure.

The Legislature's expectation that pending foreclosures would be governed by the

terms of the HBOR, and that a loan servicer's prior conduct would be relevant in applying

the statute to them, was expressly manifested in section 2923.6, subdivision (g), which

states: "In order to minimize the risk of borrowers submitting multiple applications for

first lien loan modifications for the purpose of delay, the mortgage servicer shall not be

obligated to evaluate applications from borrowers who have already been evaluated or

afforded a fair opportunity to be evaluated for a first lien loan modification prior to

January 1, 2013, or who have been evaluated or afforded a fair opportunity to be

evaluated consistent with the requirements of this section, unless there has been a

material change in the borrower's financial circumstances since the date of the borrower's

previous application and that change is documented by the borrower and submitted to the

mortgage servicer." Thus, by its terms, section 2923.6 expressly contemplates providing

borrowers, such as the Joneses, against whom foreclosure proceedings were pending at

the time the HBOR became effective, with the benefits of the statute.

In sum then, because we have interpreted the Joneses' unanswered application for

a loan modification as a continuing request for a loan modification, the SAC alleges a

violation of section 2923.7 when that statute became effective on January 1, 2013.

B. Breach of Contract

The SAC alleges that the Joneses met the requirements of the loan modification

offered by Nationstar and that Nationstar breached its agreement by, instead of giving

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them the loan modification, recording a notice of sale. For its part, Nationstar contends

that the fax it sent the Joneses required more than the documents the SAC alleges the

Joneses provided within the 48-hour period permitted by the offer. Thus, Nationstar

contends that the SAC concedes that the conditions of its offer were not met.

This brings us to the covenant of good faith and fair dealing, which implies in

every contract an obligation that "neither party will do anything which will injure the

right of the other to receive the benefits of the agreement." (See Comunale v. Traders &

General Ins. Co. (1958) 50 Cal.2d 654, 658.) Importantly, the precise nature and extent

of the duty imposed by the implied promise of good faith and fair dealing in any

particular contract depends upon the expectations of the parties and the purposes of the

contract. (See Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 814; Austero v.

National Cas. Co. (1978) 84 Cal.App.3d 1, 28 (Austero).) Here, of course, the purpose of

the alleged contract was to prevent the loss of the Joneses' home to foreclosure. In

somewhat similar circumstances, the court in Lueras v. BAC Home Loans Servicing, LP

(2013) 221 Cal.App.4th 49, 75-76 (Lueras) found that allegations that a lender failed to

fully and accurately advise a borrower with respect to a loan modification application

supported a claim the lender had breached the covenant of good faith and fair dealing.

" 'The covenant of good faith finds particular application in situations where one party is

invested with a discretionary power affecting the rights of another. Such power must be

exercised in good faith.' " (Id. at p. 76.) Here, Nationstar had a great deal of

discretionary power over its processing of the Joneses' effort to obtain a loan

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modification; its failure to respond in any manner once the Joneses provided financial

information in support of a modification application plainly implicates the covenant of

good faith and fair dealing. (See id. at pp. 75-76.)

Of additional significance here, within months after the contract the Joneses allege

was made, the Legislature imposed on loan servicers considering identical applications

for loan modifications the duty to notify borrowers about missing documents, the status

of their modification applications, and a requirement that time frames be reasonable.

(See §§ 2923.6, subd. (h) & 2923.7, subd. (b)(2).) These legislative determinations as to

the conduct required of loan servicers in dealing with borrowers are relevant in

considering whether Nationstar was acting in good faith in giving the Joneses only 48

hours in which to produce documents and thereafter failing to advise them about

considering their application for a loan modification. (See Jolley, supra, 213 Cal.App.4th

at p. 905.)

In Jolley, as here, although the relevant conduct by a lender preceded the effective

date of the HBOR, the court found the requirements of the HBOR were relevant in

determining whether the lender had a duty to protect the borrowers' interests. "Of course,

[the] provisions [of the HBOR] do not apply to our case. The question for our purposes

is whether the new legislation sets forth policy considerations that should affect the

assessment whether a duty of care was owed to [the borrowers] at that time. We think it

does." (Jolley, supra, 213 Cal.App.4th at p. 905.) In reaching that conclusion, the court

in Jolley also relied on a number of district court cases that imposed on lenders a duty of

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care in dealing with borrowers who were seeking a loan modification. (Id. at pp. 905-

906; but see Lueras, supra, 221 Cal.App.4th at pp. 65-66 [enactment of the HBOR does

not support imposition of duty of care].)

In light of the holding in Lueras and the policy considerations manifest in the

HBOR, the lack of any response to the Joneses' application as alleged in the SAC is

sufficient to give rise to a claim that in handling the Joneses' application for a loan

modification, Nationstar breached the covenant of good faith and fair dealing.

Nationstar, of course, is free to demonstrate that, even if it did not meet the standards

that, under the HBOR, now expressly govern its conduct, in dealing with the Joneses, it

had good business reasons to insist on a 48-hour time limit and rely on the Joneses to

conclude that they had not met the requirements of its offer. (See, e.g., Austero, supra,

84 Cal.App.3d at pp. 35-36.) Nonetheless, contrary to Nationstar's argument, the face of

the SAC alleges a colorable claim that Nationstar breached the covenant of good faith

and fair dealing and is liable for breach of contract.

We also disagree with the trial court's determination that, as a matter of law, the

oral agreement the Joneses alleged was barred by the statute of frauds. We recognize that

the statute of frauds governs agreements to modify mortgages and deeds of trust. (See

Secrest v. Security National Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544,

552-553; §§ 2922, 1698, subd. (a).) Nonetheless, the SAC alleges complete performance

by the Joneses of their obligations under the oral agreement and their reliance on their

understanding they would be considered for a modification. It is well established that

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complete or even partial performance by a party may satisfy the requirements of the

statute of frauds, where a party may also be able to show detrimental reliance on the

agreement. (See Secrest, at pp. 555-556.) Thus, the allegations of the SAC, if proved,

could satisfy the statute of frauds.

C. Disposition of Demurrer

Because the SAC alleges a valid claim for violation of the HBOR, the trial court

erred in sustaining without leave to amend the first, second, third and fourth causes of

action that each seek relief for violations of the HBOR. Because the SAC alleges a valid

breach of contract and breach of the covenant of good faith and fair dealing, the trial

court also erred in sustaining defendants' demurrer with respect to the ninth, tenth and

eleventh causes of action.

The trial court sustained defendants' demurrer to the seventh and eighth causes of

action for fraud and negligent misrepresentation because it determined the Joneses had

failed to supply Nationstar with all the documents required by way of the alleged

contract. Because the Joneses' failure to provide more documentation may be excused by

virtue of Nationstar's conduct, the trial court erred in dismissing these claims as well.

Because the valid causes of action that are set forth in the SAC might support an

award of punitive damages, the trial court also erred in striking the Joneses' request for

punitive damages.

IV

The trial court's order sustaining in part defendants' demurrer to the SAC did not

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dispose of the Joneses' claims related to the notice of default recorded by Aurora in June

2012. With respect to the notice of default, the Joneses alleged that they were not in

default and that Aurora had refused to accept payments they had tendered on the loan.

The Joneses alleged this conduct gave rise to claims under the version of section 2923.5

in effect in 2012 and breach of the covenant of good faith and fair dealing.

Nationstar and Aurora moved for summary judgment with respect to these claims

and supported its motion by way of records from Aurora, which they argued established

that the Joneses were in default when the notice of default was recorded and that Aurora

had met its notice obligations under the prior version of section 2923.5 to contact the

Joneses before recording the notice of default. Admission of the records were supported

by way of a declaration from an employee of Nationstar.

The Joneses responded to the motion for summary judgment (1) by submitting

deposition testimony from the Joneses, which, in a very general manner, contradicted the

Aurora payment records and (2) by objecting to admission of the Aurora payment

records. The Joneses also submitted letters from Robert Jones to Aurora, which

conceded his payments were in arrears but objected to the fact that Aurora had returned

payments he had attempted to make. The letters contended that, with credit for the

returned payments, the balance due set forth in the notice of default was inaccurate.

At the very least, this record leaves a factual question with respect to whether, in

light of the Joneses' attempts to make payments, Aurora fulfilled its obligations under the

former version of section 2923.5, subdivision (a)(2), which required that before filing a

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notice of default, a "mortgagee, beneficiary, or authorized agent shall contact the

borrower in person or by telephone in order to assess the borrower's financial situation

and explore options for the borrower to avoid foreclosure."

In sum, the trial court also erred in granting defendants' motion for summary

judgment.

DISPOSITION

The judgment is reversed. The Joneses to recover their costs on appeal.

BENKE, Acting P. J.
I CONCUR:

McDONALD, J.

I CONCUR IN THE RESULT:

AARON, J.

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