1

Filed 6/30/22 Peralta v. Shellpoint Mortgage CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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

FIRST APPELLATE DISTRICT

DIVISION FOUR

ROBERT PERALTA, as 

Trustee, etc.,

Plaintiff and Appellant,

v.

SHELLPOINT MORTGAGE, 

LLC, et al.,

Defendants and 

 Respondents.

 A161437

 (Contra Costa County

 Super. Ct. No. MSC19-

 00695)

Robert Peralta appeals from the judgment that followed the 

trial court’s order sustaining the demurrer of Shellpoint 

Mortgage, LLC and the Bank of New York Mellon (collectively, 

Shellpoint). He contends the trial court erred in sustaining 

Shellpoint’s demurrer without leave to amend. We conclude that 

Robert can amend his complaint to state valid causes of action 

against Shellpoint, so we will reverse the judgment.

BACKGROUND

Because this case comes after the trial court sustained 

Shellpoint’s demurrer, we draw the facts from the properly 

pleaded material facts in the second amended complaint. (Sheen 

v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 916.)
2

Beatriz Peralta took out a loan to buy a property in 

Hercules, and the loan was secured by a deed of trust on the 

property. By 2016, Shellpoint was the servicer on the loan. 

Beatriz was current on the loan until February 2018, when 

she became ill. She passed away in August 2018. Beatriz 

requested a loan modification with Shellpoint before her death, 

but Shellpoint failed to appoint a single point of contact to 

communicate with her about foreclosure alternatives. 

Sometime after Beatriz’s death, her son Robert Peralta 

notified Shellpoint that Beatriz had died and the property had 

been transferred to him, qualifying him as her successor in 

interest. Within three months of Beatriz’s death, Robert was able 

to start making payments on the loan, but Shellpoint refused to 

accept the payments due to the arrears on the loan. 

In December 2018, Shellpoint caused a notice of default to 

be recorded. Shellpoint attached a declaration to the notice of 

default stating that 30 days or more had passed since Shellpoint 

had initially contacted Beatriz to assess her financial situation 

and explore options for her to avoid foreclosure. However, 

Shellpoint had failed to contact Beatriz by phone or in person to 

explore options to avoid foreclosure before recording the notice of 

default. 

After Shellpoint caused a notice of trustee’s sale to be filed 

in March 2019, Robert filed a complaint to enjoin the sale. After 

several rounds of demurrers and amendments, in January 2020 

Robert filed the second amended complaint, in which he alleged 

one cause of action for violation of Civil Code section 2923.5 and 
3

former section 2923.7, subdivision (a) (Stats. 2012, ch. 87, § 9); 

one cause of action for violation of former Civil Code section 

2920.7; and one cause of action under the Unfair Competition 

Law (UCL), Business and Professions Code section 17200 et seq.1 

In July 2020 the trial court sustained Shellpoint’s demurrer to 

the second amended complaint without leave to amend.2 Robert 

appealed.3

DISCUSSION

I. Standard of Review and Statutory Overview

“ ‘In reviewing an order sustaining a demurrer, we examine 

the operative complaint de novo to determine whether it alleges 

facts sufficient to state a cause of action under any legal theory.’ 

[Citation.] ‘ “ ‘ “We treat the demurrer as admitting all material 

1 Undesignated statutory citations are to the Civil Code.

2 Because Robert concedes that the trial court properly 

sustained the demurrer to the claim for violation of former

section 2920.7, we do not discuss it further.

3 While the second amended complaint identifies the 

plaintiff as “Robert Peralta, as Trustee of the Beatriz Peralta 

Revocable Trust” (capitalization omitted), the notice of appeal 

identifies the appellant as simply “Robert Peralta.” At oral 

argument, Shellpoint argued for the first time that Robert’s 

failure to identify himself as the trustee deprived him of standing 

to appeal. We disagree. When an appellant identifies himself or 

herself as a trustee but has standing to appeal only as an 

individual, courts will disregard the trustee label as merely 

descriptive. (Graham v. Lenzi (1995) 37 Cal.App.4th 248, 254.) 

We apply the same principle here and hold that the absence of 

the descriptive label of trustee does not deprive Robert of 

standing to appeal. This is especially appropriate here, where 

the thrust of Robert’s appeal is that he can amend his complaint 

to change his capacity as plaintiff.
4

facts properly pleaded, but not contentions, deductions or 

conclusions of fact or law. . . . We also consider matters which 

may be judicially noticed.” . . . Further, we give the complaint a 

reasonable interpretation, reading it as a whole and its parts in 

their context.’ ” ’ ” (Mathews v. Becerra (2019) 8 Cal.5th 756, 

768.)

“ ‘ “When a demurrer is sustained without leave to amend, 

the reviewing court must determine whether there is a 

reasonable probability that the complaint could have been 

amended to cure the defect. . . .” [Citation.] The abuse of 

discretion standard governs our review of that question. 

[Citation.] “The plaintiff bears the burden of proving there is a 

reasonable possibility of amendment.” [Citation.] To satisfy that 

burden, the plaintiff “ ‘must show in what manner he can amend 

his complaint and how that amendment will change the legal 

effect of his pleading.’ ” ’ ” (Larson v. UHS of Rancho Springs, 

Inc. (2014) 230 Cal.App.4th 336, 342–343.)

In the first cause of action, the complaint alleged that 

Shellpoint violated two statutes, section 2923.5 and former 

section 2923.7, subdivision (a), that are part of the Homeowner 

Bill of Rights (Civ. Code, §§ 2920.5, 2923.4–2923.7, 2923.9–

2923.12, 2923.15, 2923.17–2923.20) (HBOR). “The [HBOR] 

[citations], effective January 1, 2013, was enacted ‘to ensure that, 

as part of the nonjudicial foreclosure process, borrowers are 

considered for, and have a meaningful opportunity to obtain, 

available loss mitigation options, if any, offered by or through the 

borrower’s mortgage servicer, such as loan modifications or other 
5

alternatives to foreclosure.’ ([Civ. Code, ]§ 2923.4, subd. (a).)” 

(Valbuena v. Ocwen Loan Servicing, LLC (2015) 237 Cal.App.4th 

1267, 1272.) The events relevant to this case transpired in 2018, 

so we apply the versions of the HBOR statutes in effect at that 

time. 

Section 2923.5, subdivision (a) prohibits a mortgage 

servicer, among others, from recording a notice of default until 30 

days after the servicer initially contacted the borrower either “in 

person or by telephone in order to assess the borrower’s financial 

situation and explore options for the borrower to avoid 

foreclosure.” (§ 2923.5, subd. (a)(1)(A), (2).) Subdivision (b) of the 

same statute obligates a servicer to include with a recorded 

notice of default “a declaration that the mortgage servicer has 

contacted the borrower” or that contact was excused. (§ 2923.5, 

subd. (b).) 

Former section 2923.7, subdivision (a), stated, “Upon 

request from a borrower who requests a foreclosure prevention 

alternative, the mortgage servicer shall promptly establish a 

single point of contact and provide to the borrower one or more 

direct means of communication with the single point of contact.” 

Section 2920.5, subdivision (c)(1) defines “borrower” for the 

purposes of section 2923.5 and former section 2923.7 as “any 

natural person who is a mortgagor or trustor and who is 

potentially eligible for any federal, state, or proprietary 

foreclosure prevention alternative program offered by, or 

through, his or her mortgage servicer.”
6

Section 2924.12, subdivision (a)(1) and section 2924.19,

subdivision (a)(1) provide that if “a trustee’s deed upon sale has 

not been recorded, a borrower may bring an action for injunctive 

relief to enjoin a material violation of” sections 2923.5 and 

2923.7, among other provisions.

II. Standing

The trial court ruled that Robert had not alleged facts 

supporting his standing to raise claims under section 2923.5 and 

former section 2923.7 because, as relevant here, he brought his 

claims as the trustee of the Beatriz Peralta Revocable Trust and 

he had not alleged that the trust was the “borrower” as defined in 

the HBOR. The court noted that the deed of trust recorded on 

the property, which the trial court judicially noticed, listed the 

borrower as “Beatriz Peralta, an unmarried woman.”4 The trial 

court also found the UCL claim failed because it relied on the 

alleged HBOR violations and because Robert had not alleged he 

personally suffered any damages from Shellpoint’s conduct. 

Robert does not disagree with the trial court’s ruling that 

he lacked standing as a trustee to raise the HBOR and UCL 

claims. Instead, he contends the trial court erred in denying 

leave to amend because he can amend the complaint to overcome 

the standing problems the trial court identified. Robert presents 

several alternative theories for how he might have standing. We 

need address only his theory that he can allege HBOR and UCL 

4 While Robert disagrees with other aspects of the trial 

court’s use of judicial notice, he does not argue that the trial court 

improperly noticed this document as evidence of the identity of 

the borrower. 
7

claims that belonged to Beatriz as her successor in interest, 

because that theory is viable. 

As the complaint alleged and as is reflected in the notice of 

default attached to the complaint, Beatriz obtained the loan and 

signed a deed of trust to secure it. Section 2924.12, subdivision 

(a)(1) and section 2924.19, subdivision (a)(1) allow the “borrower” 

to assert a claim for violations of section 2923.5 and section 

2923.7, and section 2920.5, subdivision (c)(1) defines the 

“borrower” as a natural person who is a mortgagor or trustor. 

Thus, Beatriz was the person who had standing to assert the 

claims alleged under section 2923.5 and former section 2923.7. 

As the borrower, she also would have suffered the late fees and 

interest that the complaint alleged followed from Shellpoint’s acts 

of unfair competition based on the HBOR violations, so she had 

standing to assert a UCL claim as well. 

Beatriz is deceased, but that is not necessarily the end of 

the matter. Section 377.20, subdivision (a) of the Code of Civil 

Procedure states, “(a) Except as otherwise provided by statute, a 

cause of action for or against a person is not lost by reason of the 

person’s death, but survives subject to the applicable limitations 

period.” Section 377.30 of the Code of Civil Procedure further 

provides, “A cause of action that survives the death of the person 

entitled to commence an action or proceeding passes to the 

decedent’s successor in interest, subject to Chapter 1 

(commencing with Section 7000) of Part 1 of Division 7 of the 

Probate Code, and an action may be commenced by the decedent’s 

personal representative or, if none, by the decedent’s successor in 
8

interest.” These two statutes create a presumption that Beatriz’s 

claims survived her death and allow Beatriz’s personal 

representative or, if none, her successor in interest to assert her 

claims on her behalf. Code of Civil Procedure section 377.11

defines a “decedent’s successor in interest” as “the beneficiary of 

the decedent’s estate or other successor in interest who succeeds 

to a cause of action or to a particular item of the property that is 

the subject of a cause of action.” Code of Civil Procedure section 

377.10 defines “beneficiary of the decedent’s estate” as the person 

or persons “who succeed to a cause of action, or to a particular 

item of property that is the subject of a cause of action” under the 

decedent’s will or, if none, the laws of intestate succession. 

Robert asserts here that he can amend his complaint to 

allege that he has standing under these statutes as Beatriz’s 

successor in interest because the second amended complaint 

alleged the property passed to him after his mother’s death. This 

satisfies the requirements of the statute that Robert be either the 

beneficiary of Beatriz’s estate or have succeeded to the 

“particular item of the property that is the subject” of the HBOR 

and UCL causes of action. (Code Civ. Proc., § 377.11.)

Section 377.32 establishes additional requirements for a 

litigant suing as a decedent’s successor in interest. The text of 

the statute is set forth in the margin,5 but briefly summarized, it 

5 Code of Civil Procedure section 377.32 states: “(a) The 

person who seeks to commence an action or proceeding or to 

continue a pending action or proceeding as the decedent's 

successor in interest under this article, shall execute and file an 

affidavit or a declaration under penalty of perjury under the laws 
9

requires anyone who seeks to file an action as a decedent’s 

successor to file a declaration under penalty of perjury describing 

details about the decedent’s death and the administration of the 

decedent’s estate, attesting that the declarant is the decedent’s 

successor in interest, and averring that no one else has a superior 

right to commence the proceeding. (Code Civ. Proc., § 377.32, 

subd. (a).) It is unclear whether such a declaration is a necessary 

condition for a suit to proceed. (Parsons v. Tickner (1995) 

31 Cal.App.4th 1513, 1523–1524 [“Literally, this provision does 

not require that the affidavit be filed as a condition precedent to 

of this state stating all of the following: [¶] (1) The decedent’s 

name. [¶] (2) The date and place of the decedent’s death. [¶] (3) 

‘No proceeding is now pending in California for administration of 

the decedent’s estate.’ [¶] (4) If the decedent’s estate was 

administered, a copy of the final order showing the distribution of 

the decedent's cause of action to the successor in interest. [¶] (5) 

Either of the following, as appropriate, with facts in support 

thereof: [¶] (A) ‘The affiant or declarant is the decedent's 

successor in interest (as defined in Section 377.11 of the 

California Code of Civil Procedure) and succeeds to the decedent's 

interest in the action or proceeding.’ [¶] (B) ‘The affiant or 

declarant is authorized to act on behalf of the decedent’s 

successor in interest (as defined in Section 377.11 of the 

California Code of Civil Procedure) with respect to the decedent's 

interest in the action or proceeding.’ [¶] (6) ‘No other person has a 

superior right to commence the action or proceeding or to be 

substituted for the decedent in the pending action or proceeding.’ 

[¶] (7) ‘The affiant or declarant affirms or declares under penalty 

of perjury under the laws of the State of California that the 

foregoing is true and correct.’ [¶] (b) Where more than one person 

executes the affidavit or declaration under this section, the 

statements required by subdivision (a) shall be modified as 

appropriate to reflect that fact. [¶] (c) A certified copy of the 

decedent’s death certificate shall be attached to the affidavit or 

declaration.”
10

commencing or continuing the action. However, failure to file the 

affidavit could possibly subject the action to a plea in

abatement”].) Even if the declaration is necessary, though, 

Robert asserts that he can provide it, so he can satisfy all 

relevant statutory requirements to assert a claim for Beatriz for 

violations of the HBOR and UCL. 

Shellpoint does not dispute that Robert qualifies as a 

successor in interest under Code of Civil Procedure section 

377.30. Instead, it raises several other arguments why Robert 

cannot allege that he has standing as Beatriz’s successor in 

interest, but none of them has merit.6 First, it argues that Robert 

forfeited this successor standing theory by failing to raise it in 

the trial court. But Shellpoint admits that a plaintiff can 

demonstrate in an appellate court for the first time that a 

complaint can be amended to state a valid cause of action, so this 

argument is baseless. (Smith v. State Farm Mutual Automobile 

Ins. Co. (2001) 93 Cal.App.4th 700, 711.)

Second, Shellpoint argues that Robert cannot be Beatriz’s 

successor in interest under Code of Civil Procedure section 377.30 

because Robert’s prior complaints allege that he took title to the 

property as the trustee for the Beatriz Peralta Revocable Trust, 

not as an individual, as he now contends. Shellpoint invokes the 

sham pleading doctrine that prevents plaintiffs “ ‘from amending 

complaints to omit harmful allegations, without explanation, 

from previous complaints to avoid attacks raised in demurrers or 

6 Shellpoint does not dispute that Beatriz’s HBOR and UCL 

claims survived her.
11

motions for summary judgment.’ ” (State of California ex rel. 

Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 

402, 412.)

The sham pleading doctrine does not bar Robert’s proposed 

amendment. “The sham pleading doctrine is not ‘ “intended to 

prevent honest complainants from correcting erroneous 

allegations . . . or to prevent correction of ambiguous facts.” ’ 

[Citation.] Instead, it is intended to enable courts “ ‘to prevent an 

abuse of process.” ’ ” (Deveny v. Entropin, Inc. (2006) 

139 Cal.App.4th 408, 426.) The Supreme Court has “ ‘made it 

clear that “a party should be allowed to correct a pleading by 

omitting an allegation which, it appears, was made as the result 

of mistake or inadvertence.” ’ ” (Hendy v. Losse (1991) 54 Cal.3d 

723, 743.) As Robert details in his brief, he named himself in a 

trustee capacity due to a mistake about whether the property was 

an asset of Beatriz’s trust and whether his status as trustee was 

the correct designation for the capacity in which he was alleging 

Beatriz’s claims. This is an acceptable explanation for why he 

has changed his position. (Deveny, at pp. 426–427 [accepting a 

plaintiff’s explanation for inconsistent allegations that he 

determined after consulting with experts that the earlier 

allegation was incorrect].) 

It is particularly appropriate to allow Robert to amend his 

pleading given that Robert’s new standing theory does not affect 

the substance of the HBOR and UCL claims against Shellpoint. 

This is unlike a situation where a plaintiff changes an allegation 

regarding a key fact that is an element of a cause of action to 
12

avoid a demurrer. (See, e.g., Hendy v. Losse, supra, 54 Cal.3d at 

p. 743 [plaintiff changed allegation that defendant was an 

employee to allege defendant was an independent contractor, 

without stating that he had a factual basis for the change].) 

Robert’s change from designating himself as a trustee to 

designating himself as an individual does not affect the core of 

the allegations about Shellpoint’s actions in relation to Beatriz or 

make his proposed amended complaint a sham designed only to 

avoid a demurrer.7 (Branick v. Downey Savings & Loan Assn.

(2006) 39 Cal.4th 235, 243 [“courts have permitted plaintiffs who 

have been determined to lack standing . . . to substitute as 

plaintiffs the true real parties in interest” for the same cause of 

action].)

Third, Shellpoint argues the deed of trust defines a 

successor in interest of the borrower as someone who has taken 

title to the property and gives the successor the benefits of the 

loan only if the successor is approved by the lender. Shellpoint’s 

reliance on the deed of trust’s definition of a successor in interest 

is misplaced. The question is whether Robert satisfies the 

7 Robert argues that his proposed amendment is not barred 

by the statute of limitations because it relates back to the 

original complaint. Shellpoint does not dispute this, which we 

treat as a concession. Even had Shellpoint not conceded the 

point, we would hold that the amendment relates back because it 

does not change the core allegations of the HBOR and UCL 

causes of action. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383,

408–409 [“The relation-back doctrine requires that the amended 

complaint must (1) rest on the same general set of facts, (2) 

involve the same injury, and (3) refer to the same instrumentality, 

as the original one”].)
13

statutory requirements of a successor in interest to assert 

Beatriz’s HBOR and UCL claims under Code of Civil Procedure 

sections 377.30 and 377.32, not whether he qualifies as a 

successor in interest under the terms of the deed of trust, loan, or 

some other document.

Fourth, Shellpoint objects that Robert has not filed or 

presented the declaration required by Code of Civil Procedure 

section 377.32, along with the requisite certified copy of Beatriz’s 

death certificate. (Code Civ. Proc., § 377.32, subds. (a), (c).) 

Robert did not present the declaration in the trial court because 

he did not raise the issue of standing under Code of Civil 

Procedure section 377.30 until this appeal. Robert’s 

representation in this court that he can and will file the 

necessary declaration if allowed leave to amend his complaint is 

sufficient. 

Finally, Shellpoint questions why Robert did not simply file 

a new action rather than amending his complaint when the trial 

court sustained the demurrer. Shellpoint cites no authority that 

would require Robert to file a new complaint rather than 

amending his existing complaint, and we are aware of none.

III. Shellpoint’s alternative arguments

A. Section 2923.5

Shellpoint argues that even if Robert properly alleges 

standing, the allegations in his complaint would still fail to state 

any valid causes of action. Robert’s claim that Shellpoint violated 

section 2923.5 relies on the allegations that Shellpoint recorded a 

notice of default without first contacting Beatriz in person or by 
14

phone to discuss alternatives to foreclosure and that its 

declaration that it did contact Beatriz was false because Beatriz 

had died before they claimed to have contacted her. Shellpoint 

argues that both of these allegations are insufficient. As to the 

declaration, Shellpoint notes that the declaration states only that 

“[t]hirty (30) days, or more,” had passed since Shellpoint 

contacted Beatriz and that Robert did not allege when he notified 

Shellpoint about Beatriz’s death. Thus, according to Shellpoint, 

nothing in the declaration or complaint shows that Shellpoint 

claimed to have contacted Beatriz after her death in August 2018. 

Because Shellpoint could have contacted Beatriz months earlier, 

prior to her death, it contends the declaration is not false. 

We agree with this reasoning, to a point. Robert’s position 

that Shellpoint claimed to have contacted Beatriz after she died 

is not substantiated by the declaration, which is an exhibit 

attached to the complaint. (Bank of New York Mellon v. 

Citibank, N.A. (2017) 8 Cal.App.5th 935, 943 [“Exhibits attached 

to the complaint take precedence to the extent they contradict 

allegations in the complaint”].) Logically, the declaration’s 

statement in December 2018 that 30 days or more had passed 

since Shellpoint contacted Beatriz could mean that it contacted 

before her death in August 2018.

However, while the August 2018 date of Beatriz’s death 

does not necessarily render Shellpoint’s declaration false, the 

declaration would be false if we accept the complaint’s separate 

allegation that Shellpoint failed to contact Beatriz in person or by 

phone before her death. Thus, our disagreement with Robert’s 
15

theory that the date of Beatriz’s death itself disproves 

Shellpoint’s declaration does not necessarily doom this cause of 

action. Robert’s section 2923.5 claim would survive if he 

sufficiently alleged that Shellpoint’s declaration was false in light 

of his allegation that Shellpoint failed to contact Beatriz in 

person or by phone to discuss foreclosure alternatives.

Shellpoint’s attack on Robert’s allegation that it failed to 

contact Beatriz before her death rests on a conflict Shellpoint 

perceives between two allegations in the complaint. After 

alleging that Shellpoint failed to contact Beatriz, the complaint 

alleged on information and belief that before her death Beatriz 

requested a loan modification with Shellpoint. Shellpoint argues 

that these allegations are inconsistent, since Beatriz could only 

have requested a loan modification if she had communicated with 

Shellpoint. 

Reading the complaint as a whole, the allegations are not 

inconsistent. Section 2923.5, subdivision (a)(2) requires a 

servicer to contact a borrower “in person or by telephone.” 

Consistent with the statute, the complaint alleged that Shellpoint 

did not contact Beatriz in person or by phone. The complaint 

does not allege that Beatriz requested a loan modification in 

person or by telephone, merely that she requested a loan 

modification. Beatriz could have requested a loan modification 

through some other means, such as writing a letter, sending a 

fax, or emailing Shellpoint. Thus, Beatriz’s alleged loan 

modification request does not necessarily contradict the 

complaint’s allegation that Shellpoint failed to contact her by 
16

telephone or in person, as required before the recording of a 

notice of default under section 2923.5.

Shellpoint cites several federal district court decisions 

holding that a mere assertion of a lack of contact like Robert’s is 

insufficient to state a claim that a servicer violated section 

2923.5’s contact requirements, and that gave conclusive effect to 

the servicer’s declaration of compliance for the purposes of a 

motion to dismiss. (Major v. Wells Fargo Bank, N.A. (S.D. Cal.,

Aug. 15, 2014, No. 14-CV-998-LAB-RBB) 2014 U.S. Dist. Lexis 

114977, at *6–*7 (Major); Maguca v. Aurora Loan Servs. (C.D. 

Cal., Oct. 28, 2009, No. SACV09-1086 JVS (Anx)) 2009 U.S. Dist. 

Lexis 104251, at *5–*6; Juarez v. Wells Fargo Bank, N.A. (C.D. 

Cal., Nov. 11, 2009, No. CV09-3104 AHM (AGRx)) 2009 U.S. Dist.

Lexis 110892, at * 5.) These decisions are inapposite because 

they rely on federal pleading standards, not the notice pleading 

standards applicable in California courts. (Morris v. JPMorgan 

Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 304, fn. 14 

(Morris).) Under California law, the decisions are not persuasive. 

Giving conclusive effect to a servicer’s declaration of compliance 

in the face of a simple claim of its falsity, like Maguca and Juarez

did, impermissibly raises the bar for alleging a failure to file a 

truthful declaration.8

8 In a related vein, Robert contends that the trial court 

erred by taking judicial notice of Shellpoint’s declaration attached 

to the notice of default. He argues it was improper to use judicial 

notice of the existence of a document like the declaration as 

conclusive evidence of the truth of statements contained within 

the declaration. It does not appear that the trial court noticed 

the declaration in the way Robert suggests; that is Shellpoint’s 
17

Major and a case it cited held the plaintiffs should have 

alleged something more than just lack of contact, such as 

whether the plaintiffs were purposefully avoiding contact with 

the defendants, whether they could have been contacted if the 

defendants had tried with due diligence, or whether the plaintiffs 

received any phone calls or personal messages from the 

defendants. (Major, supra, 2014 U.S. Dist. Lexis 114977, at *7; 

Newman v. Bank of New York Mellon (E.D. Cal., Apr. 11, 2013, 

No. 1:12-CV-1629 AWI GSA) 2013 U.S. Dist. Lexis 52487, at *31–

*32.) Allegations such as these are not necessary to state a claim 

under section 2923.5 in California court. The statute allows a 

servicer to record a notice of default without contacting a 

borrower if the servicer exercised due diligence in trying to 

contact the borrower. (§ 2923.5, subds. (a)(2), (e).) But where a 

servicer claims to have contacted a borrower, like Shellpoint did 

here in its declaration, the servicer’s diligence and specific steps 

it may have taken or the borrower’s attempts to avoid contact do 

not matter, at least at the pleadings stage. If the servicer 

believes such circumstances constitute a defense, it can explore 

these issues in discovery and raise them at summary judgment or 

trial.

B. Former section 2923.7, subdivision (a)

In 2018, former section 2923.7, subdivision (a) stated, 

“Upon request from a borrower who requests a foreclosure 

argument on appeal. In any event, there was no need to 

judicially notice the declaration because Robert attached it to the 

complaint. 
18

prevention alternative, the mortgage servicer shall promptly 

establish a single point of contact and provide to the borrower one 

or more direct means of communication with the single point of 

contact.” 

Shellpoint argues that Robert’s claim under former section 

2923.7, subdivision (a) that it failed to appoint a single point of 

contact fails because Robert does not allege that Beatriz was 

making efforts to pursue an alternative to foreclosure. But the 

second amended complaint explicitly alleged on information and 

belief that Beatriz “requested a loan modification with Shellpoint 

before her death.” Shellpoint does not explain why this is 

insufficient to allege a request for a foreclosure alternative. 

Shellpoint also argues the complaint is insufficient because 

it does not allege that Beatriz requested a single point of contact. 

Shellpoint appears to be relying on a line of federal cases that 

held that the phrase “[u]pon request” in former section 2923.7, 

subdivision (a) required a borrower to request a single point of 

contact before a servicer was obligated to provide one. (Green v. 

Cent. Mortg. Co. (N.D. Cal. 2015) 148 F.Supp.3d 852, 873–874 

[collecting cases].) This division recently rejected these cases’ 

approach and held that the “[u]pon request” phrase refers merely 

to the timing of when a servicer must appoint a single point of 

contact. (Morris, supra, 78 Cal.App.5th at pp. 300–303.) Robert 

was not required to allege that Beatriz requested a single point of 

contact, so the complaint is sufficient. (Ibid.)
19

C. Materiality

Shellpoint separately argues that the complaint fails to 

allege that either of the HBOR violations were material. When a 

trustee’s deed has not been recorded, as is apparently the case 

here, section 2924.12, subdivision (a)(1) and section 2924.19, 

subdivision (a)(1) establish that “a borrower may bring an action 

for injunctive relief to enjoin a material violation of” section 

2923.5 and 2923.7. (Italics added.) 

This division recently addressed the pleading standard for 

materiality under the HBOR in Morris, supra, 78 Cal.App.5th 

279. “ ‘A material violation is one that affected the borrower’s

loan obligations, disrupted the borrower’s loan modification 

process, or otherwise harmed the borrower.’ ” (Id. at p. 304.) 

“[W]e read the ‘otherwise harmed the borrower’ prong of this test 

to mean harm to the borrower in her efforts to be considered for a 

loss mitigation option (§ 2923.4).” (Id. at p. 304, fn. 14.) 

“Ultimately . . . , we ask whether the alleged violation 

undermined the overall purpose of the HBOR. [Citation.] In 

doing so, we need not recharacterize the purpose of the HBOR 

because the Legislature has stated it plainly: ‘The purpose of the 

act that added this section is to ensure that, as part of the 

nonjudicial foreclosure process, borrowers are considered for, and 

have a meaningful opportunity to obtain, available loss 

mitigation options, if any, offered by or through the borrower’s 

mortgage servicer, such as loan modifications or other 

alternatives to foreclosure.’ ” (Id. at pp. 304–305.)
20

The second amended complaint sufficiently alleges 

materiality. As to section 2923.5, subdivision (a), the complaint 

alleged that Shellpoint failed to contact Beatriz more than 30 

days in advance of filing the notice of default and falsely declared 

that it had done so. The point of such contact and the servicer’s 

obligation to document the contact in a declaration is to help a 

borrower explore foreclosure alternatives, consistent with the 

HBOR’s purpose of giving borrowers a meaningful opportunity to 

obtain any available loss mitigation options. (Morris, supra, 

78 Cal.App.5th at p. 304 & fn. 14.) Shellpoint’s failure to comply 

with this requirement logically undermined the purpose of the 

HBOR, and the complaint thus sufficiently alleges materiality.

Robert’s allegation that Shellpoint failed to appoint a single 

point of contact in violation of former section 2923.7, 

subdivision (a) is similarly material. Shellpoint faults the 

complaint for not alleging that Shellpoint gave Beatriz the “run 

around,” that Beatriz was pursuing a foreclosure alternative, or 

that the failure to appoint a single contact person resulted in the 

denial of a loan modification. We have already noted that the 

complaint does allege that Beatriz requested a foreclosure 

alternative in the form of a loan modification. The other 

allegations Shellpoint mentions are not necessary. The purpose 

of the single point of contact requirement is to give a single 

source of information to help borrowers seeking loss mitigation 

options. (Morris, supra, 78 Cal.App.5th at p. 305.) Shellpoint 

cannot credibly contend that this purpose was achieved despite 

its alleged complete failure to appoint a single point of contact. 
21

Because the HBOR’s purpose is to ensure that borrowers have a 

meaningful opportunity to obtain loss mitigations options, a 

servicer’s actions that prevent a borrower from learning of such 

options are material. As noted in Morris, it “would render the 

SPOC statute effectively unenforceable” if we accepted 

Shellpoint’s argument that a complete failure to comply with the 

statutory requirement could be immaterial. (Id. at p. 306.)

Shellpoint cites several decisions that have held a 

complaint failed to plead materiality. Cardenas v. Caliber Home 

Loans, Inc. (N.D. Cal. 2017) 281 F.Supp.3d 862, 870 held that 

allegations that the defendants violated section 2924.17 by 

recording, without standing, an inaccurate notice of substitution 

of trustee were not material because the lack of standing and 

inaccuracies did not affect the borrower’s obligations, disrupt a 

loan modification process, or cause the plaintiff harm. Schmidt v. 

Citibank, N.A. (2018) 28 Cal.App.5th 1109, 1124, fn. 7 held that a 

servicer’s alleged failure to initiate contact with a borrower was 

immaterial, to the extent that it violated the HBOR at all, 

because the borrower contacted the servicer and the statutory 

purpose of substantive discussions between the two was achieved. 

Cornejo v. Ocwen Loan Servicing, LLC (E.D. Cal. 2015) 

151 F.Supp.3d 1102, 1113 held that a servicer’s alleged failure to 

timely send an acknowledgment of a loan modification 

application was not material because the borrowers did not allege 

that the loan modification process was disrupted or that they 

were harmed. Finally, Galvez v. Wells Fargo Bank, N.A.

(N.D. Cal., Oct. 4, 2018, No. 17-CV-06003-JSC) 2018 U.S. Dist.
22

Lexis 172087, at *10–*11 held that a plaintiff’s allegation that 

the servicer improperly “dual tracked” a foreclosure and review of 

a loan modification application did not allege a material violation. 

The plaintiff had alleged that the dual tracking harmed her 

because she was never able to have her application reviewed, but 

the court held this was insufficient and the plaintiff needed to 

allege that she either was denied a modification to which she was 

entitled or had foregone other foreclosure alternatives. (Id. at 

*10–*14.)

Most of these decisions are not on point because “federal 

district judges have more latitude to dismiss claims at the 

pleading stage under Bell Atlantic Corp. v. Twombly [(2007) 

550 U.S. 544] than California trial judges have under our 

traditional notice pleading standards.” (Morris, supra, 

78 Cal.App.5th at p. 304, fn. 14.) All these decisions are also 

distinguishable. Only Schmidt concerned a violation like those 

Robert alleges here, involving a failure to contact a borrower. 

But unlike that case, where the servicer and borrower 

nonetheless were in contact with one another so that the servicer 

could provide the borrower the necessary information, Shellpoint 

and Beatriz were allegedly not in contact, so Beatriz did not 

receive a meaningful opportunity to obtain any loss mitigation 

options. 

D. UCL Claim

The second amended complaint alleged a cause of action 

under the UCL, relying on the HBOR cause of action. 

California’s UCL generally provides for equitable and 
23

restitutionary relief from unfair competition, which the UCL 

defines as any “unlawful, unfair or fraudulent business act or 

practice.” (Bus. & Prof. Code, §§ 17200, 17203; Cel-Tech 

Communications, Inc. v. Los Angeles Cellular Telephone Co.

(1999) 20 Cal.4th 163, 179.) “By proscribing ‘any unlawful’ 

business practice, ‘section 17200 “borrows” violations of other 

laws and treats them as unlawful practices’ that the unfair 

competition law makes independently actionable.” (Cel-Tech, at 

p. 180.)

The trial court sustained Shellpoint’s demurrer to the UCL 

claim, both because it had sustained the demurrer to the HBOR 

claim and because it believed Robert had not alleged that he 

personally lost money or property in a nontrivial amount. Our 

conclusions that Robert can adequately allege standing to pursue 

a HBOR claim on Beatriz’s behalf and has stated a claim for 

violation of the HBOR dictates that the trial court’s ruling on the 

UCL claim must also be reversed.

E. Implied covenant of good faith and fair dealing

Robert argues for the first time on appeal that he should be 

allowed to amend his complaint to state a claim on his own behalf 

that Shellpoint breached the implied covenant of good faith and 

fair dealing in the loan agreement. We have already concluded 

that Robert can amend his complaint to state viable claims under 

section 2923.5, former section 2923.7, subdivision (a), and the 

UCL, so it is unnecessary for us to address whether this 

additional theory of liability is also viable. Robert is free to raise 

it in the trial court, which can address it in the first instance.
24

DISPOSITION

The judgment is reversed as to the first and third causes of 

action. The judgment is affirmed as to the second cause of action. 

The trial court is directed to enter a new and different order 

overruling the demurrers with respect to the first and third 

causes of action. The cause is remanded for further proceedings 

consistent with this opinion. Robert Peralta shall recover his 

costs on appeal.

BROWN, J.

WE CONCUR:

POLLAK, P. J.

NADLER, J.9

Peralta v. Shellpoint, LLC, et al. (A161437)

9 Judge of the Superior Court of California, County of 

Sonoma, assigned by the Chief Justice pursuant to article VI, 

section 6 of the California Constitution.