Filed 11/24/20 Grant v. Bank of America CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
GAVIN LESTER GRANT,
Plaintiff and Appellant, G058111
v. (Super. Ct. No. 30-2018-00993609)
BANK OF AMERICA, N.A., OPINION
Defendant and Respondent.
Appeal from a judgment of the Superior Court of Orange County, Charles
Margines, Judge. Affirmed.
Gavin Lester Grant, in pro. per., for Plaintiff and Appellant.
McGuire Woods, Leslie M. Werlin and Adam F. Summerfield for
Defendant and Respondent.
* * *
Describing the operative complaint as “garbled, highly repetitive, full of
citations to irrelevant laws and doctrines, and overlaid with a layer of ‘sovereign citizen’
references,” the court sustained a demurrer to plaintiff Gavin Lester Grant’s complaint
arising from an attempted nonjudicial foreclosure of his residence. It sifted through the
chaff to discern three causes of action against defendant Bank of America, N.A. (Bank of
America): trespass, breach of contract, and fraud. It held none were properly pleaded
and dismissed the complaint with prejudice. The court did not err.
The complaint revolves around plaintiff’s gimmicky ploy to avoid paying
his mortgage. When plaintiff defaulted, he concocted a “Banker’s Promissory Note,”
which, according to plaintiff, extinguished the note and deed of trust on his residence in
exchange for an unsecured debt. Obviously, Bank of America would never agree to that,
so he slipped in the following term: The note was automatically accepted if Bank of
America did not return it within two days of receiving it. Bank of America did not
respond. The gist of plaintiff’s claim is that all subsequent steps taken to enforce the
original note were illegal because it and the deed of trust had been extinguished.
Nonsense. The “Banker’s Promissory Note” is obviously an unacceptable
tender of the debt plaintiff owed and the complaint does not otherwise allege any
wrongful conduct. We affirm the judgment.
ALLEGATIONS
Plaintiff owns a residence in the City of Orange. In November 2007,
plaintiff took out a secured loan on the residence, which included an adjustable rate note
and deed of trust. Plaintiff defaulted on the loan. In December 2015, Clear Recon Corp.
(Clear Recon), the trustee on the deed of trust, recorded a notice of default. In March
2016, Clear Recon recorded a notice of trustee sale. That same day, Clear Recon posted
a notice of trustee sale on plaintiff’s garage door (which is the basis for the trespass
2
claim). For reasons that are unclear in the complaint, the foreclosure did not proceed at
1
that time.
Meanwhile, plaintiff came up with a plan.
First, on September 6, 2016, he acquired 10 shares of an entity called
“Private Banker National Banking Association,” a self-described “Common Law
National Banking Association.”
A couple of weeks later, apparently empowered by his membership in the
alleged private banking association, he drafted a $1.5 million “Banker’s Promissory
Note” (the Banker’s Note). The role of the “Private Banker National Banking
Association” is not clear from our reading of the complaint, except to note that the
Banker’s Note is payable by “Gavin Lester Grant, Private Banker, I.D. Number:
000870338037,” which in turn raises the question whether plaintiff intended the
“Private Banker National Banking Association,” instead of himself personally, to be
obligated on the Banker’s Note. In any event, the note, by its terms, was deemed
accepted if not returned within two banking days. It required plaintiff to pay $10,000 per
month on the seventh day of each month. Except there was a catch: The holder was
required to come to plaintiff’s personal residence to pick up the payment.
That same day, plaintiff wrote a letter to the chief financial officer (CFO) of
Bank of America, which stated, “Find enclosed negotiable security instrument, full
satisfaction of the claimed loan and final settlements to, BANK OF AMERICA, N.A.,
2
BEARER or HOLDER as Final payoff, Discharge of debt, CASE NO. 000870338037”
One week later, on September 28, 2016, plaintiff visited a Bank of America
branch office in the City of Orange and handed the Banker’s Note and correspondence to
1
Somewhere in this process plaintiff filed for bankruptcy, twice, to prevent
the sale of the residence. The complaint is unclear on the exact timeline.
2
The case number referenced in the letter is nearly illegible but appears to be
the same number associated with plaintiff in the Banker’s Note.
3
a middle manager (specifically, the “Financial Center Manager” for the branch). The
3
middle manager wrote “received and accepted” on both of the documents.
The due date of the first scheduled payment on the Banker’s Note came and
went, and, to no one’s surprise, Bank of America did not send a representative to
plaintiff’s residence to pick up the first payment. The following day, plaintiff wrote Bank
of America’s CFO to inform him that since no one had come to pick up the payment, his
debts were discharged.
Bank of America never adjusted his original loan balance to reflect the
alleged payment in full by the Banker’s Note.
PROCEDURAL POSTURE
Plaintiff filed the present suit in May 2018. The operative second amended
complaint asserts causes of action for trespass, breach of contract, and fraud. In a
thorough and detailed ruling, the court sustained Bank of America’s demurrer without
leave to amend. Plaintiff timely appealed from the ensuing dismissal.
3
Plaintiff also alleges that he handed the middle manager a form entitled
“UCC Financing Statement.” “The purpose of filing a financing statement . . . is to give
an existing or prospective creditor the opportunity to inform himself of whether, and of
the extent to which, an existing or prospective debtor has encumbered his assets and to
govern himself accordingly in dealing with the debtor.” (Borg-Warner Acceptance Corp.
v. Bank of Marin (1973) 36 Cal.App.3d 286, 288-289.) It does not itself create a security
interest. Here, the complaint does not allege the existence of a security agreement
between plaintiff and Bank of America. (Needle v. Lasco Industries, Inc. (1970) 10
Cal.App.3d 1105, 1108 [“a financing statement filed with respect to a security agreement
which never comes into existence is a nullity”].) Moreover, the form lists the Banker’s
Note as the collateral for the obligation it secures. Obviously, the collateral for the
Banker’s Note cannot be the Banker’s Note itself. Thus, even if a security agreement
with Bank of America existed, the security is illusory where the collateral is described as
the debt it purportedly secures.
4
DISCUSSION
Rather than attempt to respond to each of the assertions in plaintiff’s
sprawling opening brief, we will confine our analysis to the merits of the causes of
4
action. We review the court’s ruling on the demurrer de novo. (Tamas v. Safeway, Inc.
(2015) 235 Cal.App.4th 294, 298.)
Most of plaintiff’s complaint is focused on the supposed discharge of his
note and deed of trust by the unsecured Banker’s Note. The gist of his claim is that since
the original note and deed of trust were extinguished, any attempt to enforce the original
note was unlawful.
The Banker’s Note, however, is nothing more than an unenforceable
attempt at a scam. Why would a bank swap a secured note for an unsecured note from a
debtor who was already in default? Answer: It would not. The whole point of the
security is to mitigate the default. Plaintiff seems to have realized that. So rather than
overcome the insurmountable obstacle of reaching an actual meeting of the minds,
plaintiff concocted various ploys to try to defraud the bank of its security interest, such as
a requirement that Bank of America return the Banker’s Note within two days or be
deemed to have accepted it. But that contractual term suffers a fatal flaw: It is only
enforceable if accepted. And “[s]ilence in the face of an offer is not an acceptance,
unless there is a relationship between the parties or a previous course of dealing pursuant
to which silence would be understood as acceptance. [Citations.] No such relationship or
4
Plaintiff’s brief lists 11 issues on appeal, most of which are totally
irrelevant to his claims. For example, issue seven: “Did the Trial Court practice law
from the bench?” Indeed, much of plaintiff’s brief is consumed with allegations of
ethical and procedural improprieties by the trial judge. In light of our de novo review of
the merits, however, none of those alleged improprieties are prejudicial since, as we
conclude below, his complaint does not state a claim.
5
course of dealing is alleged.” (Southern Cal. Acoustics Co. v. C. V. Holder, Inc. (1969)
71 Cal.2d 719, 722, italics added.) Thus, the Banker’s Note was never accepted.
This is true notwithstanding the allegation that a middle manager at a
branch office signed the Banker’s Note as “received and accepted by.” We do not
interpret that language as an acceptance of the terms of a contract. And even if we did,
there is no allegation in the complaint that the middle manager had authority to modify
the note and deed of trust on behalf of Bank of America. (See Snukal v. Flightways
Manufactoring, Inc. (2000) 23 Cal.4th 754, 779 ([“the party seeking to enforce a contract
with a corporation generally has the burden of establishing the contracting officer’s
5
authority to bind the corporation”].) It is common knowledge that large banks have an
entire unit of the company dedicated to mortgages, and a lengthy review process for any
mortgage modifications. The middle manager is described in the complaint as the
“Financial Center Manager” of a branch office—a title that does not suggest any
authority over home loan modifications.
Finally, even if the Banker’s Note had been accepted in the contractual
sense, it says nothing about a deed of trust. It is simply an unfettered obligation of
plaintiff to pay Bank of America $1.5 million. The only tie-in of the Banker’s Note to
the deed of trust is the letter plaintiff wrote to Bank of America’s CFO claiming to tender
the Banker’s Note in discharge of the mortgage. But the CFO never responded to that
letter.
Plaintiff claims Bank of America has waived the right to object to
plaintiff’s tender of the Banker’s Note, citing Code of Civil Procedure section 2076,
5
This common law rule has been modified by Corporations Code section
313 which provides a conclusive presumption of corporate authority “when [the contract
is] signed by the chairperson of the board, the president or any vice president and the
secretary, any assistant secretary, the chief financial officer or any assistant treasurer of
such corporation.” Since the middle manager was not one of the listed officers of Bank
of America, the common law rule applies.
6
which provides, “The person to whom a tender is made must, at the time, specify any
objection he may have to the money, instrument, or property, or he must be deemed to
have waived it; and if the objection be to the amount of money, the terms of the
instrument, or the amount or kind of property, he must specify the amount, terms, or kind
which he requires, or be precluded from objecting afterwards.” However, the purpose of
that section is simply “to allow a debtor who is willing and able to pay his debt to know
what his creditor demands, so that the debtor may, if he wishes, make a conforming
tender.” (Sanguansak v. Myers (1986) 178 Cal.App.3d 110, 115.) The cases applying
Code of Civil Procedure section 2076 generally rely on estoppel and “arise either where a
creditor has refused a tender without specifying his reasons for the refusal or where he
has accepted a tender without informing the debtor that the tender is nonconforming.”
(Sanguansak, at p. 115.)
We find no basis for an estoppel here. The Banker’s Note was not a good
faith tender of payment under the original loan. It was a gimmick. Plaintiff knew exactly
what to tender under the original loan: the amount of his default in a traditional payment
form. Nothing about Bank of America’s conduct gave rise to an estoppel and thus Code
of Civil Procedure section 2076 does not aid plaintiff.
Accordingly, to the extent plaintiff’s claims for breach of contract, trespass,
and fraud rely on the Banker’s Note discharging the original note and deed of trust, they
fail to state a cause of action. Plaintiff alleged that Bank of America breached a contract
by failing to reduce his original loan balance to zero. Plaintiff alleged that Bank of
America committed fraud by representing that Clear Recon had authority under the deed
of trust to exercise the power of sale. And he alleged that Clear Recon committed
trespass (in conspiracy with Bank of America) by entering his property to post a notice of
7
trustee sale on his garage without legal justification since the deed of trust was void. All
6
of those claims depend on the Banker’s Note and thus fail.
Aside from the Banker’s Note, the complaint includes a blunderbuss of
generic allegations about Bank of America’s failure to disclose the securitization of the
mortgage (which occurred after the mortgage was created), Bank of America’s failure to
respond to various document requests by plaintiff, and allegedly inconsistent statements
about who legally owned the loan (as opposed to the servicer). None of those allegations,
however, amount to a breach of contract or fraud, nor does plaintiff allege any cognizable
damages from them, much less any basis for rendering the original note and deed of trust
void. Accordingly, the court correctly sustained the demurrer. Plaintiff has not
suggested any way he could amend the complaint to state a cause of action, and thus the
court acted within its discretion in denying leave to amend.
DISPOSITION
The judgment is affirmed. Bank of America shall recover its costs incurred
on appeal.
IKOLA, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
GOETHALS, J.
6
Another reason the trespass claim fails is because Clear Recon posted the
notice of trustee’s sale on plaintiff’s garage months before plaintiff implemented his
Banker’s Note scheme. Thus, even by plaintiff’s flawed reasoning, the entry on his
property occurred well before the loan was discharged.
8