Adams v. Bank of America

Filed 6/30/20
CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION THREE

CONNIE CALDWELL ADAMS,
Plaintiff and Appellant, A156712
v.
BANK OF AMERICA, N.A., et al., (Solano County
Defendants and Respondents. Super. Ct. No. FCS050082)

Plaintiff Connie Caldwell Adams obtained a loan secured by a deed of
trust on certain residential property located in Vallejo. Subsequently, Adams
obtained a second loan from a different lender secured by a second deed of
trust on the same property. When Adams defaulted on the junior loan, the
junior lienholder foreclosed and sold the property. The sold property was still
subject to the senior loan. Almost 10 years later, Adams filed a complaint
alleging Bank of America (lender on the senior loan) and ReconTrust
Company (trustee on the senior loan) (collectively defendants) violated the
Homeowner Bill of Rights (HBOR). She alleged that after she applied for a
modification of the senior loan, defendants recorded a notice of default and
notice of trustee’s sale on the senior loan and failed to provide her with a
single point of contact, all while her application was pending. Defendants
moved for judgment on the pleadings, arguing Adams could not state a cause
of action under the HBOR. The trial court granted the motion without leave
to amend. Adams appeals. We conclude that the complaint failed to allege

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facts sufficient to state a cause of action under the HBOR but that the trial
court abused its discretion when it denied Adams leave to amend. We
reverse and remand.
FACTUAL AND PROCEDURAL BACKGROUND
In August 2006, Adams obtained a $422,750 loan secured by a deed of
trust against residential property located on Wilson Avenue in Vallejo. The
deed of trust names Adams as a “ ‘Borrower.’ ” The lender was America’s
Wholesale Lender, a fictitious name for Countrywide Home Loans, Inc.
(Countrywide); Countrywide was acquired by Bank of America during the
financial crisis. (See Petersen v. Bank of America Corp. (2014) 232
Cal.App.4th 238, 243, fn. 5.) ReconTrust Company, an affiliate of
Countrywide, was the trustee under the deed of trust. (See id. at p. 243 & fn.
4.)
Later in August 2006, Adams obtained a $28,000 loan from an
individual named Peter Gallegos, secured by a separate deed of trust
recorded against the same property. Adams subsequently defaulted on the
junior loan, resulting in foreclosure and a trustee’s sale of the property in
March 2008. Gallegos was the purchaser.1 The sold property was still
subject to the senior loan. Adams remained the “ ‘Borrower’ ” named on the
deed of trust securing the senior loan.
In March 2017, Adams filed for chapter 7 bankruptcy. The order for
discharge was filed in September 2017.
In December 2017, Adams filed a complaint against Bank of America
and ReconTrust Company alleging a single cause of action for “Violations of
the Homeowners’ Bill of Rights.” The complaint alleged that, in 2016 and
2017, Adams was “engaged in ongoing good faith negotiations with Bank of

1 Gallegos is not a party to this appeal.

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America toward the modification of a home loan [the senior loan] on his [sic]
property at 372 Wilson Avenue, Vallejo, California, within this County.” It
alleged that “[a]t the same time, defendant bank was actively moving toward
foreclosure of the home and took clear steps to satisfy this state’s
requirements toward a non-judicial foreclosure, including recording a notice
of default and notice of trustee’s sale. At present, and despite the ongoing
good faith negotiations, the trustee’s sale is schedule [sic] for January 3,
2018.”
The complaint also alleged that, during this loan modification
application process, “Bank of America did not provide [a] single point of
contact, and instead plaintiff was shuttled from representative to
representative, with the ultimate result being the home is facing foreclosure.”
In her prayer, Adams sought injunctive relief, declaratory relief, damages,
“judgment quieting plaintiff’s fee simple title to the real property and that
defendants have no right, title, or interest in or to the real property,”
“equitable accounting to the alleged indebtedness,” prejudgment interest,
attorney’s fees, and costs of suit.
Defendants moved for judgment on the pleadings, arguing the
complaint failed to state facts sufficient to constitute a cause of action under
the HBOR. Adams did not file an opposition. On December 19, 2018, the
trial court granted the motion for judgment on the pleadings without leave to
amend. On January 8, 2019, Adams attempted to file an amended complaint,
but the filing was rejected by the court clerk. Judgment was entered on
January 14, 2019. Plaintiff then filed a motion to reconsider, which was
denied. This appeal followed.

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 DISCUSSION
I. Standard of Review
A judgment on the pleadings in favor of the defendant is appropriate
when the complaint fails to allege facts sufficient to state a cause of action.
(Code Civ. Proc., § 438, subd. (c)(3)(B)(ii).) A motion for judgment on the
pleadings is equivalent to a demurrer and is governed by the same de novo
standard of review. (Kapsimallis v. Allstate Ins. Co. (2002) 104 Cal.App.4th
667, 672.) All properly pleaded, material facts are deemed true, but not
contentions, deductions, or conclusions of fact or law. (Ibid.) Courts may
consider judicially noticeable matters in the motion as well. (Ibid.; People ex
rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777.)
When a demurrer is sustained without leave to amend, we decide
whether there is a reasonable possibility that the defect can be cured by
amendment. (Sanchez v. Truck Ins. Exchange (1994) 21 Cal.App.4th 1778,
1781.) “ ‘[I]f 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.’ ” (Ibid.)
“This abuse of discretion is reviewable on appeal ‘even in the absence of a
request for leave to amend’ . . . .” (Aubry v. Tri-City Hospital Dist. (1992) 2
Cal.4th 962, 970–971); see Code Civ. Proc., § 472c, subd. (a).) Plaintiff has
the burden to show there is a reasonable possibility the complaint’s defects
can be cured by amendment. (Sanchez, at p. 1781.)
II. HBOR Cause of Action
Adams contends she has a valid cause of action under the provisions of
the HBOR that prohibit dual tracking and require a single point of contact.
The issue before us is whether the facts alleged in Adams’s complaint
together with matters that are subject to judicial notice are sufficient to state
a cause of action under that theory.

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 The HBOR was enacted “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.” (Civ. Code, § 2923.4.)2 Among other things, the
HBOR prohibits dual tracking, whereby a financial institution continues to
pursue foreclosure while evaluating a borrower’s loan modification
application. (§ 2923.6, subd. (c).) The HBOR also requires that a mortgage
servicer establish a single point of contact and provide a borrower who
requests a foreclosure prevention alternative with one or more direct means
of communication with the single point of contact. (§ 2923.7, subd. (a).) A
violation of either of these provisions can serve as the basis for a cause of
action under the HBOR. The HBOR provides for injunctive relief for
statutory violations that occur prior to foreclosure (§ 2924.12, subd. (a)) and
monetary damages when the borrower seeks relief for violations after the
foreclosure sale has occurred. (§ 2924.12, subd. (b); see Valbuena v. Ocwen
Loan Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272.)
The dual tracking and single point of contact provisions of the HBOR
do not apply to all mortgages and deeds of trust. Pursuant to section
2924.15, they apply only to “first lien mortgages or deeds of trust that are
secured by owner-occupied residential real property containing no more than
four dwelling units.” On appeal, defendants argue that Adams’s HBOR cause
of action fails as a matter of law because she cannot meet the statutory
definition of “owner-occupied.” Specifically, defendants argue that Adams

2Unless otherwise indicated, all further section references will be to
the Civil Code.

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fails to meet this definition because she does not currently own the property.
We turn to the statutory definition of “owner-occupied” first.
A. HBOR’s Definition of “Owner-occupied”
Section 2924.15 defines the term “owner-occupied” for the HBOR’s dual
tracking and single point of contact provisions. It states, “For these purposes,
‘owner-occupied’ means that the property is the principal residence of the
borrower and is security for a loan made for personal, family, or household
purposes.” (§ 2924.15.) “ ‘When a statute prescribes the meaning to be given
to particular terms used by it, that meaning is generally binding on the
courts.’ ” (Great Lakes Properties, Inc. v. City of El Segundo (1977) 19 Cal.3d
152, 156 (Great Lakes), quoting People v. Western Air Lines, Inc. (1954) 42
Cal.2d 621, 638.) The HBOR’s internal definition of “owner-occupied” is
controlling.
B. Defendants’ Arguments Regarding “Owner-occupied”
Despite this internal definition, defendants raise four arguments to
support the conclusion that the term “owner-occupied” includes an ownership
requirement. First, they argue that section 2924.15’s definition of “owner-
occupied” only applies to the word “occupied” and not to the full term. We
reject this argument as the HBOR clearly prescribes a definition for the full
“owner-occupied” term.
Second, defendants cite to legislative history of the HBOR, specifically
the Senate Rules Committee’s discussion of the “ ‘restriction to owner-
occupied residences’ ” as “ ‘on the whole already contained in existing law,
Civil Code Section 2923.5. . . .” (Sen. Rules Com., Off. of Sen. Floor Analyses,
conf. rep. No. 1 on Sen. Bill No. 900 (2011–2012 Reg. Sess.) as amended
June 27, 2012, p. 26.) But section 2923.5 does not contain any requirement

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that a borrower must also be an owner of the property. The same is true for
the definition of “owner-occupied” in section 2924.15.
Third, defendants cite to the HBOR’s provision of preforeclosure
injunctive relief to suggest that it must apply to property owners or otherwise
such relief would provide no benefit. This is unpersuasive because a
borrower could clearly benefit from an injunction delaying foreclosure of a
property if the property is his or her principal residence, regardless of
ownership.
Fourth, defendants argue that the HBOR contains an implicit
requirement of ownership because the term “borrower” is limited to those
who are also owners. The HBOR explicitly defines the term “borrower” for
the purposes of its dual tracking and single point of contact provisions.
“Borrower” means “any natural person who is a mortgagor or trustor and who
is potentially eligible for any federal, state, or proprietary foreclosure
prevention alternative program offered by, or through, his or her mortgage
servicer.” (§ 2920.5 subd. (c)(1).) Again, the HBOR’s prescribed definition of
the term “borrower” is controlling. (Great Lakes, supra, 19 Cal.3d at p. 156.)
The August 2006 deed of trust, submitted with the motion for judgment on
the pleadings, identifies Adams as a “borrower” on the senior loan.
Defendants do not offer any authority that the trustee’s sale of the property
following default on the junior loan stripped Adams of her designation as
borrower (or trustor) on the senior loan and associated deed of trust.

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 Accordingly, we follow the HBOR’s definition of “owner-occupied” to
mean what it says: that the property must be the “principal residence of the
borrower.”3
C. Adams’s Pleading of “Principal Residence of the Borrower”
Given section 2924.15’s definition of “owner-occupied,” we must next
decide whether facts alleged in the complaint or subject to judicial notice are
sufficient to satisfy the “principal residence of the borrower” requirement.
Nowhere in the complaint does Adams allege the property is her principal
residence. The complaint only references “his [sic] property at 372 Wilson
Avenue, Vallejo, California,” and “the home.”
The documents defendants submitted in support of their motion for
judgment on the pleadings similarly do not contain any judicially noticeable
matter that establishes the property as Adams’s principal residence. For
example, while a memorandum of points and authorities Adams submitted in
the bankruptcy proceedings stated she “continues in possession of his [sic]
estate and, in particular lives in her single family residence located at 372
Wilson Avenue, Vallejo, California,” the truth of these assertions is not
subject to judicial notice. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548,
1569–1570.) Even if they were judicially noticeable, the fact that Adams may
reside at a property does not mean it is her principal residence.
Adams tries to overcome this omission by arguing that the same
address is provided in documents she submitted to this court on appeal.4

3 To the extent that defendants ask us to depart from the statutory
definition and interpolate an ownership requirement, such a request is better
directed to the Legislature, not this court.
4 Adams filed a request for judicial notice with her opening brief and a
supplemental request for judicial notice with her reply brief. We deferred
ruling on the requests until the merits of the appeal. (See People v. Preslie
(1977) 70 Cal.App.3d 486, 493–494.) Having now considered the requests, we

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While the existence of those documents may be judicially noticed, the matters
asserted in those documents may not. (Sosinsky v. Grant, supra, 6
Cal.App.4th at pp. 1564, 1569–1570.) The documents do not contain any
judicially noticeable matter that shows the property is Adams’s principal
residence. The mere fact that Adams has a loan on the property or lists the
property as an address does not mean it is her “principal residence.”
In sum, we conclude the facts alleged in the complaint together with
matters that are subject to judicial notice do not establish that the Wilson
Avenue property is Adams’s principal residence. Therefore, Adams failed to
state a cause of action under section 2924.15.5

deny them in full. The requests ask us to take judicial notice of seven
documents, six of which were not presented to the trial court. “Reviewing
courts generally do not take judicial notice of evidence not presented to the
trial court.” (Vons Companies, Inc. v. Seabest Foods, Inc. (1996) 14 Cal.4th
434, 444, fn. 3.) In exceptional circumstances, an appellate court can, but is
not required to, take judicial notice of material that was not presented to the
trial court in the first instance. (Ibid.; see Brosterhous v. State Bar (1995) 12
Cal.4th 315, 325.) Adams has not presented any exceptional circumstances.
We follow the general rule and decline to exercise our discretion to take
judicial notice of these documents. The seventh document, a notice of
trustee’s sale recorded on December 19, 2016, was presented to the trial court
in defendants’ request for judicial notice in support of their motion for
judgment on the pleadings. Because this document is already in our record,
we deny the request for judicial notice as unnecessary to our decision. (See,
e.g., TransparentGov Novato v. City of Novato (2019) 34 Cal.App.5th 140,
146, fn. 3.)
5 In light of this conclusion, we need not address defendants’ arguments
that the judgment should be affirmed on two derivative alternative grounds:
(1) that Adams did not sufficiently allege that she had submitted a complete
loan modification application for violation of section 2924.6; and (2) that
Adams did not sufficiently allege that she had requested a single point of
contact for violation of section 2924.7. We also note that we do not find either
argument compelling. (See, e.g., Valbuena v. Ocwen Loan Servicing, LLC,
supra, 237 Cal.App.4th at p. 1275 [finding plaintiffs sufficiently alleged a
complete loan modification application where plaintiffs alleged they received

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 D. Other HBOR Claims
Beyond the dual tracking and single point of contact provisions
described above, Adams argues that her complaint also alleged violations of
sections 2923.5, 2924.11, 2924.17, and 2924.18 of the HBOR. Three of these
four sections trigger the same requirements of section 2924.15. (§ 2924.15
[including §§ 2923.5, 2924.11 & 2924.18].) Thus, even if the complaint
included such allegations, the “principal residence” requirement would also
be fatal to those claims.
The fourth, section 2924.17, requires that certain documents recorded
in connection with a foreclosure “be accurate and complete and supported by
competent and reliable evidence” and that a mortgage servicer review
“competent and reliable evidence” to substantiate the default and right to
foreclose before recording such documents. (§ 2924.17, subds. (a) & (b).)
Facts sufficient to state a section 2924.17 claim are not alleged in Adams’s
complaint. (See Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
III. Denial of Leave to Amend
Finally, we turn to the question of whether the trial court abused its
discretion when it granted the motion for judgment on the pleadings without
leave to amend. To make that determination, we consider whether on the
pleaded and noticeable facts there is a reasonable possibility of an
amendment that would cure the complaint’s legal defect or defects.
(Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
On appeal, Adams maintains that the Wilson Avenue property is her
residence. She points to the allegation that she “continued to reside on the

requests for documentation, responded to those requests, and their
application was “complete”]; Green v. Cent. Mortg. Co. (N.D.Cal. 2015) 148
F.Supp.3d 852, 875–876 [declining to interpret HBOR to require borrower to
specifically request a single point of contact].)

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property” asserted in the amended complaint she attempted to file after the
trial court granted the motion for judgment on the pleadings, as well as her
use of the Wilson Avenue address on various court filings. At oral argument
before this court, Adams’s counsel represented that Adams could plead and
prove that the Wilson Avenue property was her principal residence at all
relevant times. Defendants’ counsel agreed that leave to amend would be
appropriate if the court determined the HBOR’s definition of “owner-
occupied” to mean the “principal residence of the borrower.” We conclude
there is a reasonable possibility that amendment of the complaint to allege
that the Wilson Avenue property was Adams’s principal residence would cure
this defect.
DISPOSITION
The judgment is reversed and the matter is remanded to the trial court
with directions to grant Adams leave to file an amended complaint.

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 _________________________
Jackson, J.

WE CONCUR:

_________________________
Siggins, P. J.

_________________________
Fujisaki, J.

A156712/Adams v. Bank of America, N.A.

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A156712/Adams v. Bank of America, N.A.

Trial Court: Superior Court of the County of Solano

Trial Judge: D. Scott Daniels, J.

Counsel: Law Office of Peter H. Liederman and Peter H. Liederman
for Plaintiff and Appellant.

Severson & Werson, Jan T. Chilton and Elizabeth C. Farrell
for Defendants and Respondents.

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