In a recent tentative ruling in the Fresno Superior Court, let us all congratulate Judge Simpson of starting to understand what is happening with the loan modification process. There is authority to uphold a partially performed loan modification agreement. Read the tentative ruling below.
Now of Mr. Whitener can argue that a BANKRUPTCY CHAPTER 13 PLAN could be deemed TENDER OF PAYMENT and find that a lender is not going to be damaged because the value of the home will not diminish anymore than it already has been diminished, and that the bank is not entitled to rental value during the time of the TRO, then this could be a successful way to pursue the return of a home wrongfully foreclosed upon!
CHECK OUT TENTATIVE RULING: NOTE this is not binding on any other court in any other case.
Re: Whitener v. Aurora Home Loan Services, et al
Superior Court Case No. 09CECG02521
Hearing Date: October 29, 2009 (Dept. 97C)
Motion: By plaintiff for preliminary injunction
Tentative Ruling:
To require defendant Aurora Home Loan Services to provide admissible
evidence on the issues described below, and to require both sides to further
address application of the bond requirement to this case.
Explanation:
In support of the request for preliminary injunction, plaintiff offered his own
declaration confirming under oath that he made all required payments on his loan
through January, 2008, except for the one payment of $771.62 that he failed to
send for August, 2008. He also states that he subsequently made payments that
exceeded the monthly minimum, and that after receiving the two “workout
agreements” attached to the complaint on file as exhibits B and C, he executed
those documents and returned them with the required payments.
While Aurora claims that there were several missed payments including
one for November, 2007, it offers no declarations to support its claims, relying
only on several unauthenticated documents attached to its request for judicial
notice, and on a “customer account activity statement” that only goes back to
April 4, 2008 and doesn’t adequately explain the various entries.
Defendant acknowledges that two “forbearance agreements” were entered
into following the original default. Plaintiff’s supporting declaration is evidence
that defendant represented that if plaintiff signed the documents and returned
them with required payments, he could avoid foreclosure. He claims he did that,
but was then told that the requests for loan modifications had been denied based
on his failure to provide additional information that he claims had never been
requested.
Plaintiff has arguably made a prima facie showing of negligence and bad
faith by defendant, and to the extent plaintiff can prove that he followed the
instructions he was given and made the payments directed in the workout
agreements, he may also be able to prove either promissory estoppel or partial
execution of oral loan modification agreements. See Raedeke v. Gibraltar Sav.
& Loan Assn. (1974) 10 Cal. 3d 665, 673.
Defendant has claimed that the various statements and notices it sent
plaintiff “established” that certain payments were missed and that as of March,
2008, plaintiff owed $4,290.24 (see exhibit C to Whitener’s supporting
declaration), as of July, 2008 he owed $6,530.99 (exhibit C to the complaint), and
as of December, 2008 he owed $8,688.01 (exhibit B to the complaint).
But these amounts aren’t fully explained in any of those documents. For
example if, as plaintiff stated in his declaration, the only payment he missed as of
2/08 was one payment of $771.62 in August of 2007, it’s not clear how he owed
$4,290.24 by March, 2008.
Then, in the workout agreement of July, 2008, Aurora was claiming that he
owed $5,456.87 in monthly payments as of July 3rd, but it’s not clear if Aurora
credited him for the payments plaintiff claims he made. Nor is it clear what
months the $5,456.87 represented (and defendant hasn’t offered any evidence of
any missed payments, including, for example, a declaration under penalty of
perjury from someone with personal knowledge of its business records).
The July 2008 document (exhibit C to the complaint) also includes a
charge of $1,301.14 for “corporate advances” without any evidence to support
that figure or any clear explanation of what it includes.
Similarly the December, 2008 document (exhibit B to the complaint)
claims $8,688.01 in missed monthly payments without identifying what months
were missed or offering any evidence of the alleged non-payments, making it
impossible for plaintiff to offer controverting evidence. Those documents
specifically include $50 in legal fees suggesting that the corporate advances
referred to in exhibit C did not include attorney’s fees. But again there is neither
an explanation of the listed fees nor any evidence to support that they were
actually incurred.
And while defendant claims that plaintiff defaulted under the two
forbearance agreements by failing to make the payments required for November,
2008 and February, 2009, those defaults aren’t clearly established by the
documentation offered to date. For example, defendants aren’t claiming that
plaintiff failed to make the October, 2008 payment, and yet there are no entries
for 10/08.
Before the court is willing to lift the TRO and allow the UD action to
proceed, it will require a full accounting from defendant (supported by admissible
evidence) of what the arrearages it is claiming represents, including how it
calculated the amounts due in the two “workout agreements.”
Aurora will also be required to explain (and produce supporting evidence
of) what documents or information plaintiff failed to provide that led Aurora to
deny the requested workouts. Again plaintiff has offered a declaration confirming
that he executed the two proposed agreements and sent them to Aurora with the
required payments.
His signature on those documents was part of the performance demanded
(i.e. an acknowledgment of disputed arrearages), and the payments he claim he
made were additional acts of performance under those agreements. Plaintiff
claims to have relied on the representations included in those agreements, and
unless defendant can show that he failed to perform some act that was a
condition to consummating the agreement, Raedeke v. Gibraltar Sav. & Loan
Assn., supra, 10 Cal. 3d at 673 appears to be authority for finding that the
partially performed agreements were binding on Aurora as well.
While plaintiff may not ultimately be able to prevail on the merits unless he
can show that he is in a position to tender payment of any confirmed past due
payments and all authorized penalties and fees, at this point Aurora hasn’t
established by admissible evidence what payments are actually due and what
fees are actually authorized. The court is also concerned about whether CC
§2923.5 has any application to this case and if so, whether it has been complied
with.
And while plaintiff hasn’t demonstrated an attempt to use procedures
authorized by the Discovery Act to obtain information he claims in his reply is
needed to support his case and to establish a likelihood that he can succeed on
the merits, it appears reasonable to provide additional time for formal discovery
to be conducted so that the court and the parties are fully informed before the UD
action is allowed to proceed.
The court will therefore issue a preliminary injunction enjoining the eviction
from proceeding pending a further hearing on this matter which will be set for
Thursday, April 29, 2010 at which time plaintiff will be required to submit further
evidence establishing the likelihood that he will succeed on the merits.
Issuance of the preliminary injunction will be conditioned on plaintiff
making regular monthly payments to defendants of $771.62, beginning on
November 2, 2009, and continuing on the first court day of each month until the
next hearing.
The court will also consider requiring an undertaking to cover any
damages defendants can prove at the 10/29/09 hearing they are likely to incur
during the period they are enjoined from proceeding with the eviction, but it will
also consider any proof offered by plaintiff concerning his financial condition and
whether he is in a position to post a bond or undertaking while continuing to
make his monthly payments to defendant. Both sides will be required to address
the bond issue at this hearing.
Pursuant to California Rules of Court, Rule 3.1312, subd. (a) and Code of
Civil Procedure section 1019.5, subd. (a), no further written order is necessary.
The minute order adopting this tentative ruling will serve as the order of the court
and service by the clerk will constitute notice of the order.
Tentative Ruling A.M. Simpson 10-28-2009
Issued By: on .
(Judge’s initials) (Date)
