LUERAS vs BAC HOME LOANS SERVICING, LP, et al., | CA 4th DCA - Unlawful, Unfair, or Fraudulent Practices .. UCL Violations

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LUERAS vs BAC HOME LOANS SERVICING, LP, et al., | CA 4th DCA – Unlawful, Unfair, or Fraudulent Practices .. UCL Violations

LUERAS vs BAC HOME LOANS SERVICING, LP, et al., | CA 4th DCA – Unlawful, Unfair, or Fraudulent Practices .. UCL Violations

Filed 10/31/13

CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE

RICHARD LUERAS,
Plaintiff and Appellant,

v.

BAC HOME LOANS SERVICING, LP, et al.,
Defendants and Respondents
INTRODUCTION

Richard Lueras appeals from a judgment entered after the trial court sustained without leave to amend a demurrer to his verified first amended complaint (the First Amended Complaint). After the foreclosure sale of his home, Lueras sued Bank of America, N.A., successor by merger to BAC Home Loans Servicing, LP (Bank of America), ReconTrust Company, N.A. (ReconTrust), and Federal National Mortgage Association, commonly called and referred to as “Fannie Mae.” The First Amended Complaint asserted causes of action for negligence, breach of contract, violation of the Perata Mortgage Relief Act (Civ. Code, § 2923.5), fraud/misrepresentation, unfair and unlawful practices (Bus. & Prof. Code, § 17200), and to quiet title.

The First Amended Complaint included no allegations directed specifically to Fannie Mae, and we therefore affirm the judgment in its favor. As to Bank of America and ReconTrust, we affirm the judgment as to the causes of action for violation of Civil Code section 2923.5 and to quiet title, but, in all other respects, reverse and remand to permit Lueras to amend the First Amended Complaint.

The key fact alleged in the First Amended Complaint is that a mere 13 days before Bank of America foreclosed on Lueras’s home, Bank of America falsely represented in writing to Lueras that no foreclosure sale would occur while Lueras was being considered for “other foreclosure avoidance programs.” In so doing, Bank of America expressly and in writing informed Lueras he “will not lose [his] home during this review period.” A Bank of America representative also informed Lueras the pending foreclosure sale would be postponed. Nevertheless, days later, Bank of America foreclosed on Lueras’s home.

Another key point is the trial court sustained a demurrer without leave to amend to the First Amended Complaint—i.e., Lueras had filed only two complaints in a complicated and evolving area of law before facing dismissal. Given the standard of review and California’s policy of liberality in granting of amendments, Lueras should be given an opportunity to amend the First Amended Complaint.

[…]

C. Whether Lueras Alleged Unlawful, Unfair, or Fraudulent Practices

1. Allegations of UCL Violations

Since, we conclude, Lueras should be given leave to amend to allege standing, we address whether he has alleged in the First Amended Complaint unlawful, unfair, or fraudulent practice on the part of Bank of America. Lueras alleged Bank of America violated the UCL in these nine ways:

1. “Refusing to offer a ‘resolution’ of the default after leading [Lueras] to believe that the ‘HomeSaver’ agreement would lead to another agreement that would [c]ure the Arrearages (which they never disclosed in amount) . . . .”

2. “Selling the home at foreclosure within 30 days of receiving the written denial of modification in violation of the Making Home Affordable Guidelines.”

3. “Failing to stop the foreclosure process when Fannie Mae and Bank of America agreed to permanently modify Mr. Lueras[’s] loan in May 2011 in violation of federal regulations that prohibit dual tracking.”

4. “Failing to explore foreclosure alternatives with Mr. Lueras prior to filing the Notice of Default in violation of Civ[il] Code §2923.5 and the HomeSaver plan guidelines . . . .”

5. “Inserting deceitful language in the forbearance plan using phrases such as ‘HomeSaver’ ‘long term solution[’] and ‘resolution of my default’ leading the public and . . . Lueras to believe that they were going to be offered some type of permanent solution so that they could save their home if they signed the agreement, supplied the information requested and made all of the payments on time.”

6. “Failing to make a determination or identify a permanent solution so that the public like . . . Lueras could save their home[s] by the third month of the plan in violation of the HomeSaver Guidelines quoted above in breach of industry standards set by 15 [United States Code section] 1639a.”

7. “Falsely representing that . . . Lueras did not qualify for HAMP modification when, in fact . . . Lueras did qualify for a HAMP modification in breach of industry standards set by 15 [United States Code section] 1639a.”

8. “Auctioning off the home for less than the amount owed, yet refusing to reduce the principal which would have resulted in a positive NPV [(net present value)] in breach of industry standards set by 15 [United States Code section] 1639a.”

9. “Representing in the May 16, 2011[13] letter by Bank of America to Mr. Lueras that ‘once we have finished reviewing your information, we will contact you within 10 days to let you know what other options are available to you and the next steps you need to take’ then selling the home within 10 days at foreclosure auction without contacting Mr. Lueras and providing other options in breach of industry standards set by 15 [United States Code section] 1639a.”

[…]

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