GOODMAN, J.
Plaintiffs Amado and Myrna Valbuena sued Ocwen Loan Servicing, LLC (Ocwen), following their lender's purchase of their residence at a non-judicial foreclosure sale. They allege that Ocwen violated Civil Code section 2923.6, the prohibition on "dual tracking" contained in the Homeowner Bill of Rights, when it conducted a foreclosure sale of their property while their loan modification application was pending. The trial court sustained Ocwen's demurrer, ruling that plaintiffs' failure to allege tender of the loan balance defeated their claims. We disagree, and so reverse the judgment.
Plaintiffs purchased the real property located at 360 East 238th Place in Carson (the property) in 2004. In August 2006, plaintiffs obtained from American Brokers Conduit a $485,000 loan secured by the property; that loan
On September 26, 2011, T.D. Service Company, as trustee, recorded a notice of default and election to sell under deed of trust on the property. The notice of default stated that plaintiffs were $21,181.11 in arrears as of September 30, 2011. A notice of trustee's sale was recorded on December 22, 2011, setting a foreclosure sale for January 17, 2012. A second Notice of trustee's sale was recorded on February 15, 2013, setting the foreclosure sale date for March 14, 2013; the sale was later postponed until March 25, 2013. The lender acquired the property at the foreclosure sale on that date. A trustee's deed upon sale was recorded on October 15, 2013.
As of March 1, 2013, after the second notice of trustee's sale was recorded, Ocwen took over the servicing of plaintiffs' mortgage loan. Ocwen sent plaintiffs a letter dated March 13, 2013, which plaintiffs received on March 18, 2013, stating: "[A]s your loan servicer,
On March 21, 2013, plaintiffs responded to this letter by submitting paystubs, a W-2, and bank statements to Ocwen. On March 23, 2013, after speaking with an Ocwen representative, plaintiffs submitted additional financial documentation in support of their loan modification application. By letter dated March 25, 2013, the date of the foreclosure sale, Ocwen notified plaintiffs that they were not eligible for a loan modification because "[a]s of the date of this letter your loan has a confirmed sale date within 7 days."
Plaintiffs filed the instant lawsuit on May 7, 2013, and amended the complaint on August 19, 2013 alleging causes of action for breach of
Ocwen again demurred, contending that the second amended complaint failed to state a cause of action upon which relief could be granted. The trial court agreed, stating in its minute order that its grant of leave to amend did not authorize plaintiffs to allege the new causes of action for negligence and intentional infliction of emotional distress, and that the remaining causes of action were defective due to the absence of "pleading of tender or exception to tender requirement even though this is post-foreclosure." The court sustained the demurrer without leave to amend, and subsequently entered judgment in favor of Ocwen.
Plaintiffs timely appealed the judgment of dismissal.
"A demurrer tests the legal sufficiency ... in a complaint. We independently review the sustaining of a demurrer and determine de novo whether the complaint alleges facts sufficient to state a cause of action or discloses a complete defense. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415 [106 Cal.Rptr.2d 271, 21 P.3d 1189].) We assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 [6 Cal.Rptr.3d 457, 79 P.3d 569].) We construe the pleading in a reasonable manner and read the allegations in context. (Ibid.) We must affirm the judgment if the sustaining of a general demurrer was proper on any of the grounds stated in the demurrer, regardless of the trial court's stated reasons. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967 [9 Cal.Rptr.2d 92, 831 P.2d 317].)" (Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 81 [161 Cal.Rptr.3d 500].)
Section 2923.6, the "dual tracking" prohibition in HBOR which plaintiff maintains Ocwen violated, provides in pertinent part as follows:
"(b) It is the intent of the Legislature that the mortgage servicer offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority.
"(c) If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower's mortgage servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale, or conduct a trustee's sale, while the complete first lien loan modification application is pending. A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale or conduct a trustee's sale until any of the following occurs: [¶] (1) The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification, and any appeal period pursuant to subdivision (d) has expired. [¶] (2) The borrower does not accept an offered first lien loan modification within 14 days of the offer. [¶] (3) The borrower accepts a written first lien loan modification, but defaults on, or otherwise breaches the borrower's obligations under, the first lien loan modification.
"(e) If the borrower's application for a first lien loan modification is denied, the mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or, if a notice of default has already been recorded, record a notice of sale or conduct a trustee's sale until the later of: [¶] (1) Thirty-one days after the borrower is notified in writing of the denial. [¶] (2) If the borrower appeals the denial pursuant to subdivision (d), ... 15 days after the denial of the appeal....
"(f) Following the denial of a first lien loan modification application, the mortgage servicer shall send a written notice to the borrower identifying the reasons for denial, including the following: [¶] (1) The amount of time from the date of the denial letter in which the borrower may request an appeal of the denial of the first lien loan modification and instructions regarding how to appeal the denial. [¶] ... [¶]
"(h) For purposes of this section, an application shall be deemed `complete' when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer." (§ 2923.6.)
Ocwen also contends that the loan modification application submitted by plaintiffs was neither timely nor complete. It argues, "an application is only deemed `complete' `when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes specified by the mortgage servicer.' [Citation.] Here, [plaintiffs] admit that they did not supply servicer Ocwen with all the documents required per the timeframe specified in the March 13, 2013 Letter (`Offer Letter.')" Thus, Ocwen asserts that plaintiffs' allegation that they submitted a "complete" loan modification application is a conclusory allegation insufficient to survive a demurrer, and that the untimeliness of the application is established by the offer letter, exhibit C to the second amended complaint.
In their second amended complaint, plaintiffs alleged that, after receiving the offer letter on March 18, 2013, they responded by submitting the requested documentation to Ocwen on March 21, 2013. Also around this time, they received notice that the foreclosure sale previously scheduled for March 14, 2013, had been postponed until March 25, 2013. On March 23, 2013, plaintiffs spoke with Ocwen's representative by telephone, and were informed that they "just need to submit some more documents to make their loan modification application `complete.'" The Ocwen representative did not tell them that, due to the pending sale date, it was already too late to apply for a loan modification. Plaintiffs mailed the additional financial documents requested by Ocwen on that same day, and requested no further documents thereafter. Based on the forgoing facts, plaintiffs alleged that their loan modification application was "complete."
Ocwen relies on the statute's definition of a "complete" submission — that is, all documents required by the mortgage servicer within the reasonable timeframe specified by the mortgage servicer — to argue that the modification
The trial court sustained Ocwen's demurrer to plaintiffs' causes of action for negligence and intentional infliction of emotional distress because it did not grant plaintiffs leave to amend the complaint to add these new claims. Plaintiffs do not challenge that ruling on appeal. Each of plaintiffs' remaining causes of action (for breach of contract, breach of the implied covenant of good faith and fair dealing, promissory estoppel, fraud, negligent misrepresentation and violations of Bus. & Prof. Code, § 17200 et seq.) were dismissed based upon the improper application of the tender rule. Because the sufficiency of the factual allegations to support these causes were not considered below, we reverse the trial court's ruling on demurrer as to each of them.
The judgment is reversed.
Mosk, Acting P. J., and Kriegler, J., concurred.