good morning your honor may it please the court my name is carol pope and i represent mark wings yes and i would like to reserve five minutes for rebuttal and in this case we have three issues the first being whether the give due care and once they agreed to analyze our except a loan modification and the third issue is whether there was a breach of the covenant of good faith and fair dealing under the deed of trust and with respect to the first issue just a court found that the homeowners bill of rights did not apply because there was a notice of default back in two thousand and eight there is a footnote that the homeowners bill of rights only applies to those notices of default and october first beginning october first of two thousand and thirteen  default after two thousand and thirteen what i should say is that doesn't require that a notice of default actually have to be filed in order to trigger responsibilities under the homeowners default such as giving the homeowner information as to what the default is information as to the rights to obtain a loan modification or very or fish short sale or that type of a thing  however the opportunity to bring an injunction to stop the process is based upon any of the breaching any of these requirements and so therefore you should be able to bring and an action to enjoying moving forward such as even filing the notice of default if they've breached it and breached the homeowner bill of rights by far in this case for example failing to respond to the last appeal which was required in under an arrest one of seven point five three zero six the bank never responded to that appeal and that is actually a breach of the homeowner's bill of rights and therefore mr wang's i should be able to bring an action for that violation and should be able to enjoin any further filing of a notice of default because that would stop expenses that he would incur and and that is why we believe that the district court erred in finding a notice of default actually had to be applied or actually had to be recorded a second issue isn't this isn't the whole point of the statute to make sure that they took to to cover to create a  if there has been a notice of default entered that didn't comply with these protections i mean you could always say well i think they made note of default so i'm going to  e an action under the homeowners bill of rights and i don't think that would be an infinite number of claims doesn't this really relate to when there is a notice i do not believe so your honor because there are certain requirements before they can even file a notice of default and if they breach and they don't meet those requirements before but if if there is a breach of the requirement as in this case of responding to an appeal mr winks and should have the ability to bring an injunction otherwise the bank will sit there and not record a notice of default that is occurred and many instances where i bank will sit for years and yet lo modifications are actually submitted because they do start sending out information to homeowners and they are required to send that out before they even record a notice of default so that's why violations can occur before a notice of default is even recorded and as and if and as in this case actually where the bank really didn't record a new notice of default which in order to be moving it forward mr wang's this would be sitting there and there are other breaches that we bring up which is the negligence cause of action and the breach of the covenant of good faith he'd end up having to bring multiple causes of action because the timeframe for bringing the negligence action would have expired the council how do you get around the fact that the home on a bill of rights was not intended to be rational because you disagree with that you know it was know your honor and it was not intended to be retroactive however in this case the notice of default that is recorded was back in two thousand and eight since that time first of all mr wang's just brought his long current and then secondly entered into a loan modification so so while that's sitting on of record there it is no longer a notice of default that the bank can proceed under are you saying that wells fargo was being strategic about not bringing another notice of default so they wouldn't fall under the door i'm not sure what you're saying i'm not saying they're being they're being strategic and not bringing in mind that at some point they're going to have to bring they're going to have to record and you notice a default the other claim for failing to respond to the appeal and under the claim of negligence so i'm still not getting your argument if you agree that the homeowner bill of rights was not intended to apply  the missteps they took after passage of this act bring them within the purview of the yes you're ok that that is what i'm stating and therefore that is why he should have the right to be able to bring an action to require that they law comply with a line response to respond to the peel and prevent them from even going forward to actually record the new notice of default and basically get their attention to do what they're supposed to do so your argument is a matter of statutory interpretation correct your honor and you were not representing the petitioner at the trial level were i was your honor you were ok yes because i don't didn't see judge do reference that at all and her ruling this argument that for some reason she was not being understood she was focusing basically on the fact that there was a notice of default filed and recorded in two thousand and eight and i could not move her beyond that quite frankly strong willed person yes she had her view i met and so therefore that that is where we ended up and then that's as far as the negligent action or basically our position on that is that when there's a general there is a general rule that there is no duty however that doesn't preclude the fact from in certain instances such as here when there is a loan modification application that there is some duty that they actually use due care and evaluating that use care in the advice that they give the homeowners when they're trying to obtain that modification and so the case of it's in the vatican regarding due care doesn't have any facts that are similar to the one is your position that because there is a relationship between them there's a duty of care you're not arguing that if somebody off the street mills in a loan application that they have some duty to clear no i am not your honor and it is because there is a relationship already and actually the case that i think really explains it the best is alvarez case in california that really goes through the factors in the reasons why there should be some sort of a duty of due care that the bank has to th cases i would say that in general that that is the rule however it just says in general that's the role you've been in california they haven't gotten to a case where you have these kind of facts where it's really been brought under  outside the traditional relationship i don't think that's really what the case sign is as far as stepping outside of the traditional i think that in that context there is been found that there is some kind of a d of a case and you straighten me out on what was that issue in this they were proceeding can you straighten me out on what was what was litigated in the state court proceedings shirt it basically they filed a motion to dismiss for failure what were the claims that were brought in for closure mediation yeah that is strictly a petition for judicial review and a foreclosure mediation action it's a very very limited review what were the the issue was just whether there was good faith on the part of the bank in that foreclosure mediation which touched on whether they misquoted value of the house and income of your client right  we did go through those facts and yes that that that was discussed but that was really not what the purpose of that proceeding is really whether the bank comply in good faith or not whether it was the purpose or not that was litigated and decided good morning your honor may it please the court my name is kelly and i represent wells fargo in this deal i'll start with the homeowners bill of rights issue i believe it is clear from the legislative history and notes and the prospective effect of homeowners bill of rights this is that this if this law effects foreclosure actions that start on october first two thousand and thirteen and  forward and while i understand the point that opposing counsel is making i think it's based on a mistaken interpretation that the homeowner's bill of rights is some untethered free floating rights that homeowners might have to seek a lo modification when in contrast it lays out protections for homeowners procedures that must be followed in order for a lender to proceed with foreclosure so it is true that a lender is not supposed  to record a notice of default until it has given the homeowners certain notice thirty days in advance of that notice of default but that doesn't mean that there is a claim that can be brought any time even before a lender takes any action toward foreclosure as it's aimed at protecting against foreclosure which is the step after the notice of default is correct it's aimed at protecting against foreclosure where the proper steps haven't been taken right and so if  read the act as a whole it lays out steps that separate it goes through and what what the purposes are right it tries to give the homeowner notice thirty days in advance with certain information that has to be included and lender is not allowed to record a notice of default until it does that so for instance if a lender records a notice of default without providing that notice then the homeowner may be able to come forward and say hold on you recorded a notice of default without giving me foreclosure mediation program which decision came out in believe june two thousand and seventeen and later that same month he filed this litigation it has it has just been stayed for that for that duration so it has  so in two thousand and seventeen the petition for judicial review was denied as your honors are aware and then what progress those beyond the notice of default as they have to be assigned a single point of contact there is all these protections that issue but when you even look at how the remedies function in this act it makes sense that it has to be tethered to a foreclosure proceeding because if you bring an action before a sale you are you can bring an action injunctive relief to enjoin the foreclosure proceedings pending corrective action and then the proceedings can start anew in the injunction is dissolved once a correction is made if you bring if you bring suit after the sale then then you're entitled to damages if there was if there was incorrect action taken during the pendency of the foreclosure and none of that really makes sense in a sort of way that's not tethered to some sort of foreclosure proceedings we do agree that the only knows the default issue currently is two thousand and eight because of the lengthy loan modification followed by the lengthy litigation in this matter wells fargo has not yet restarted any kind of foreclosure proceedings so our position is just those haven't been triggered and when wells fargo or if wells fargo restarts that at the close of this litigation then the protections of the homeowners bill of rights would be triggered although we leave open right now what we want and what that would look like given the history of loan modifications in this case but you're not delaying it for strategic reasons you're absolutely not your honor i mean we're we're delaying it only because we were in a petition for judicial review process followed by litigation and it's often the practice of the lender not to go forward with foreclosure proceedings while these kinds of well these kinds of court proceeding quite unfortunately a hotbed of foreclosure and the housing crisis hit financial hit nevada very hard how many more are there are very few and i mean one of the things that i really thought about in preparing for this argument which candidly i don't have a great answer for is the overlap of the foreclosure mediation program and the homeowners bill of rights because they do sort of overlap in a way that doesn't dovetail perfectly but the best explanation i can come up with and light of the fact that there isn't really a set one out there in the case law or the literature is that the foreclosure mediation program has been sunset it it's still available for people who petition for it but it's not it's not running full course the way it was in the height of in the height of the housing crisis what your response to the prior proceedings the proceedings in the vatican and whether or not they have that we believe they have precludes the fact if you get past i think if you if you stop at the duty question on the negligence issue i don't think you have to get there but i do think they have heard of a fact because all of the same issues were raised about the income levels about the value of the property the history of the loan modifications that mr wang sought and the the court in this case in the second judicial district of nevada found as a matter of fact that wells fargo had participated in the me in good faith and that's a factual finding that the nevada supreme court has held as entitled to the same deference that any factual finding would get from a trial court that would be afforded from a trial court so that factual finding includes did wells fargo produce the documents it was required to produce and the foreclosure mediation did it offer a reasonable loan modification under the circumstances and in the record in our supplemental excerpts the record think approximately pages thirty six to forty two which include the petition for judicial review mr wing's this included all of those same denials challenges to his income challenges to the value of the property i believe that he included here so the issues very much overlap that was a good faith finding which arguably might not be the same exact as the negligence but i think you  just don't think you could consistently rule that wells fargo behaved in good faith in in how it offered a loan modification and went through the mediation and at the same time failed to do so in this context  care but there's a as is commonly the case unfortunately in nevada there's not there's a little bit of a dearth of authority on some of this but there are numerous united states district court decisions on this issue that uniformly find no duty of care including in the loan modification context so the banks traditionally remove the cases to federal court is that why there are so many more federal cases coming perhaps than some of these but the petitions for judicial review are not removable i think the only cases that get removed are that when a petition for judicial review has concluded and the bar where brings a separate action and then those are removed but i believe all the petition for judicial review review cases stay in state court  unpublished decision that was released in two thousand and fourteen where it cites with approval a district of nevada case finding no duty of care between a lender and bar or however this court in a series of several unpublished just positions from about two thousand sixteen maybe two thousand and fourteen to two thousand and seventeen actually sort of rejected the holding in alvarez and held that loan modification is renegotiation of loan terms it's arm's length there's no doesn't really represent or new laws that would correct your honor i don't think it really got traction and then the jolly case again is just an app is that in that it is a construction loan case which this court distinguished  case called benson v r one another unpublished disposition at five sixty two federal panics five sixty seven recognizing that these construction types of loans where the bank is actively involved in monitoring the construction and there were certain assurances made that were verging on promissory estoppel just weren't the same kind of weren't the same kind of loan modification issue and a traditional lender borrower contacts if another site or two would be helpful there's the j p morgan case that six forty one federal appendix seven zero seven that said no duty of care and a loan modification and there's a few of these unpublished cases and i know this this appeal is a little bit more yes well and as far as good faith and fair dealing goes i think there's just there's just no contract or even a law that wells fargo has not acted consistently in the spirit of especially in light of a state court decision between them was really just looking at what went on within that mediation purely whether they showed up the bank showed up or they had an appraisal whether they acted in good faith it wasn't overall looking at the entire history between the parties as to whether there was good but what was the basis of the good faith finding i think the basis of a good faith finding on the basis of the good faith finding it was the participation in the mediation that they show what they have a representative but they meet all of those requirements and that's what the petition for judicial review is all about if they did an appraisal that industry standards correct that they came in with an interest you know with an appraisal and that  appraisal one of the main complaints from the main complaint does have to do with the appraisal that came in but that was when the bank the bank at one point i had the property at eight hundred fifty thousand dollars when they denied the petition for excuse me the loan modification run but all of that was part of the good faith determination once and that no i would suggest that the good faith determination was strictly with what went on do not believe that information actually came into the mediation what is really talking about they came in with an appraisal of six hundred thousand and and the reason and which mr wang said still felt was too high and the reason for giving all of the other factual background is because the way the value of that property had gone in those appraisals didn't even begin to make sense and that was what kind of issue was exactly counsel thank you to both