Filed 4/30/19

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

CHARLES TANIGUCHI et al.,

Plaintiffs and Appellants,

v.

RESTORATION HOMES, LLC,

Defendant and Respondent.

 A152827

 (San Mateo County

 Super. Ct. No. CIV525919)

If all or part of the principal secured by a mortgage or deed of trust becomes due 

as the result of the borrower’s default in paying interest or installments of principal, Civil 

Code section 2924c1allows the borrower to pay the amount in default, plus specified fees 

and expenses, and thereby cure the default, reinstate the mortgage loan, and avoid 

foreclosure. The borrowers in this appeal missed four monthly payments on a mortgage 

loan that had been modified after an earlier default. The modification deferred certain 

amounts due on the original loan, including principal, and provided that any default

would allow the lender to void the modification and enforce the original loan terms. The 

question before us is this: to cure the default and reinstate the loan under section 2924c, 

must the borrowers pay the amount of the earlier default on the original loan, which had 

been deferred under the modification to the end of the loan term, as well as paying the 

missed modified monthly payments that caused the default on the modified loan? 

The trial court answered that question “yes,” and on that basis granted the lender’s 

motion for summary adjudication on the borrowers’ claim that the lender violated section 

2924c. This was error, and we reverse.

 

1 Statutory references are to the Civil Code unless otherwise stated.
FACTUAL AND PROCEDURAL BACKGROUND

In 2006, Charles and Marie Louise Taniguchi (the Taniguchis) obtained a home 

loan of $510,500, secured by a deed of trust. In 2009, they agreed to a loan modification 

that adjusted the principal amount, reduced the interest rate and monthly payments, and 

deferred until the maturity of the loan approximately $116,000 of indebtedness, including 

accrued and unpaid interest and principal, fees, and foreclosure expenses. The 

modification provided that failure to make modified payments as scheduled would be an 

event of default, and that in the event of a default the modification would be null and void

at the lender’s option, and the lender would have the right to enforce the loan and 

associated agreements according to the original terms. The modification left unchanged 

certain provisions of the original loan documents, including acceleration clauses 

authorizing the lender to require a defaulting borrower to immediately pay the full 

amount of principal not yet paid and all interest owed on that amount, and to invoke the 

power of sale.

The Taniguchis defaulted on the modified loan, which was eventually assigned to 

Restoration Homes, LLC (Restoration Homes). Restoration Homes caused a notice of 

default to be recorded in 2013. The Taniguchis were informed that to reinstate their loan 

and avoid foreclosure, they would be required to pay their four missed monthly payments 

and the associated late charges specified in the modified loan (totaling about $11,000) 

and $4,500 in foreclosure fees and costs, plus all the sums that had previously been 

deferred under the loan modification. By then, the deferred amount was over $120,000 in 

principal, interest and charges (deferred amounts). 

The Taniguchis took exception to the amount Restoration Homes required for 

reinstatement of the loan and filed suit in superior court. Shortly after that, Restoration 

Homes caused a notice of trustee’s sale to be recorded, which led the Taniguchis to file a 

second suit and seek a temporary restraining order to prevent the foreclosure sale. The 

temporary restraining order was granted; the two lawsuits were consolidated; and the 

consolidated matter was stayed for approximately a year as a result of Charles Taniguchi 
filing for bankruptcy. Eventually, the Taniguchis filed a third lawsuit, and all three 

superior court cases were consolidated. 

As relevant here, the Taniguchis alleged four causes of action against Restoration

Homes: violation of section 2924c by demanding excessive amounts to reinstate the 

loan, unfair competition, breach of contract, and breach of the covenant of good faith and 

fair dealing. The unfair competition cause of action alleged that Restoration Homes’ 

violation of section 2924c constitutes a violation Business and Professions Code section 

17200 et seq. (the UCL). Restoration Homes sought summary judgment, or in the 

alternative summary adjudication. Taniguchis filed a cross motion for summary 

adjudication on the causes of action for violation of section 2924c and the UCL.

The trial court denied the Taniguchis’ motion, granted Restoration Homes’ 

motions, and entered judgment for Restoration Homes. On appeal, the Taniguchis 

challenge the judgment only insofar as it rests on the trial court’s grant of summary 

adjudication to Restoration Homes on the Taniguchis’ causes of action for violation of 

section 2924c and the UCL. 

DISCUSSION

We review a grant of summary adjudication de novo to determine “whether the 

facts not subject to triable dispute warrant judgment for the moving party as a matter of 

law.” (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1348; § 437c, subd. (c).) There is 

no dispute as to the relevant facts we summarized above, and we exercise our 

independent judgment as to their legal effect.

Applicable Law

Like the Taniguchis’ loan documents, “[t]he typical form promissory note and 

deed of trust provide that upon any default in the trustor’s obligations, the beneficiary 

may elect to accelerate the payment of all sums of principal and interest and commence 

foreclosure proceedings.” (5 Miller & Starr, Cal. Real Estate (4th ed. 2018) § 13:230, p. 

13-938.) The statutory right of reinstatement, set forth in section 2924c, “effectively 

modifies the contract provision which permits acceleration upon default.” (Ibid.)
Section 2924c, subdivision (a)(1) provides that when a mortgage loan is 

accelerated as a result of a borrower’s default, the borrower can reinstate the loan by 

paying all amounts due, “other than the portion of principal as would not then be due had

no default occurred.”2 That is, the borrower can cure the default and reinstate his or her

loan by paying the amount of the default, including fees and costs resulting from the 

default, rather than the entire accelerated balance.3 The mortgage lender must inform the 

borrower of the correct amount due to reinstate the loan. (Anderson v. Heart Federal 

Sav. & Loan Assn. (1989) 208 Cal.App.3d 202, 217.) 

California courts have long recognized the public policy behind the right to 

reinstatement, as evidenced by this excerpt from a Court of Appeal opinion from 1949: 

“Section 2924c of the Civil Code was first enacted in 1933, during a time of financial 

stress and depression throughout the United States. The purpose of the legislation was to 

save equities in homes, in many instances built up through years of monthly 

payments. . . . [¶] While conditions are fortunately different than they were in 1933, the 

protection given by the section to borrowers is just as important now as it was then. The 

 

2

“Whenever all or a portion of the principal sum of any obligation secured by 

deed of trust or mortgage on real property . . . has, prior to the maturity date fixed in that 

obligation, become due or been declared due by reason of default in payment of interest 

or of any installment of principal . . . the trustor or mortgagor . . . may pay to the 

beneficiary or the mortgagee . . . the entire amount due, at the time payment is tendered, 

with respect to (A) all amounts of principal, interest, taxes, assessments, insurance 

premiums, or advances actually known by the beneficiary to be, and that are, in default 

and shown in the notice of default, under the terms of the deed of trust or mortgage and 

the obligation secured thereby, (B) all amounts in default on recurring obligations not 

shown in the notice of default, and (C) all reasonable costs and expenses, subject to 

subdivision (c), that are actually incurred in enforcing the terms of the obligation, deed of

trust, or mortgage, and trustee’s or attorney’s fees, subject to subdivision (d), other than 

the portion of principal as would not then be due had no default occurred, and thereby 

cure the default theretofore existing, and thereupon, all proceedings theretofore had or 

instituted shall be dismissed or discontinued and the obligation and deed of trust or 

mortgage shall be reinstated and shall be and remain in force and effect, the same as if the 

acceleration had not occurred.” (§ 2924c, subd. (a)(1).) 

3 Once a notice of default is recorded, the borrower can reinstate the loan until five 

business days before the date of sale set forth in the notice of sale. (§ 2924c, subd. (e).) 
right to make up payments in default and thus avoid calling the entire loan and sale under 

a trust deed is good public policy at any time.” (Magnus v. Morrison (1949) 93 

Cal.App.2d 1, 3.) 

The right to reinstate a loan under section 2924c cannot be waived: “Any express 

agreement made or entered into by a borrower at the time of or in connection with the 

making of or renewing of any loan secured by a deed of trust, mortgage or other 

instrument creating a lien on real property, whereby the borrower agrees to waive the 

rights, or privilege conferred upon him by Sections 2924, 2924b, 2924c of the Civil Code 

. . . shall be void and of no effect.” (§ 2953; see Torrey Pines Bank v. Hoffman (1991) 

231 Cal.App.3d 308, 324 [renewals of loans, to which section 2953 applies, include 

amendments and modifications of notes or deeds of trust; in contrast, a forbearance 

agreement that by its terms did not modify a note or deed of trust was not a renewal to 

which section 2953 would apply].) 

Analysis

The Taniguchis contend that under section 2924c, Restoration Homes could not 

lawfully condition reinstatement of their loan on the payment of amounts that were

deferred in the loan modification. They argue that requiring them to pay the deferred 

amounts, instead of just the missed modified payments plus costs, essentially requires

them to waive their right of reinstatement with respect to the modified loan, in 

contravention of section 2953. 

Restoration Homes takes the position that the loan modification gave it the option 

to enforce the original loan terms if the Taniguchis defaulted on the modified loan, and 

since under the original loan—pre-modification—the deferred amounts were due and 

owing, they could properly be required as a condition of reinstatement under section 

2924c. 
This appears to be a case of first impression.4

 We conclude that the Taniguchis 

have the better argument. When principal comes due as the result of a default, section 

2924c allows a borrower to cure that precipitating default and reinstate his or her loan by 

paying the amount of the default, plus fees and expenses. Here, the default is the failure 

to make payments on the modified loan. Accordingly, section 2924c gives the 

Taniguchis the opportunity to cure their precipitating default (that is, the missed modified 

payments) by making up those missed payments and paying the associated late charges 

and fees, and in that way to avoid the consequences of the default on the defaulted loan. 

Those consequences, of course, would include the demand for immediate payment of the 

deferred amounts. Restoration Homes’ position would have the effect of depriving the 

Taniguchis of any opportunity to cure the precipitating default and reinstate the modified 

loan. Restoration Homes points to nothing in the loan modification documents to suggest 

that the Taniguchis had forfeited such an opportunity, nor to anything in section 2924c to 

suggest that such a forfeiture would be enforceable even if it were reflected in the loan 

documents.

To counter the Taniguchis’ argument that they have been effectively denied a right 

to reinstate their loan, Restoration Homes contends that the deferred amounts have been 

due and owing since the Taniguchis’ original default, which preceded the loan 

modification. In that way, the deferred amounts (like the four missed modified 

payments) are simply part of what must be paid to reinstate the loan, rather than an 

impermissible acceleration of amounts then not due. This argument is not persuasive. If 

the deferred amounts had actually been due and owing even after the loan was modified, 

 

4

In their briefs, the parties debate the extent to which In re Lammy (Bankr. 

E.D.Pa. 2006) 356 B.R. 168 is persuasive authority here. In re Lammy arose under 11 

United States Code section 1322, subdivision (b)(5), which allows the bankruptcy plan 

for a Chapter 13 debtor to provide for the cure of a prepetition payment default. (356 

B.R. at p. 172.) The court ruled that under Pennsylvania law and the parties’ agreements, 

the debtor could cure a modified loan by paying the arrearage that accumulated under the 

modification, rather than by paying that arrearage as well as the arrearage that had 

accumulated under the original loan terms before modification. (Id. at pp. 169, 177.)
then the Taniguchis would have been in default throughout the term of the modified loan 

even if they timely made every required monthly payment. This is inconsistent with the 

modified loan agreement dated September 25, 2009, which states, “Lender will bring the 

loan due for the October 01, 2009 payment.” (See Orcilla v. Big Sur, Inc. (2016) 244 

Cal.App.4th 982, 1001 [in appropriate circumstances, a statement that an agreement 

“ ‘will bring your loan current’ ” can reasonably be interpreted to mean that the 

agreement cures a past default].) Further, the modified loan agreement is explicit that the 

deferred amounts are deferred “to the maturity date of the loan or the date the loan is paid 

in full, which ever comes first.”5 Had the Taniguchis made all of their monthly 

payments, Restoration Homes could not have claimed the deferred amounts until the end 

of the loan, further proof that the deferred amounts were not currently due and owing. 

In sum, on the undisputed facts, Restoration Homes failed to demonstrate that the 

Taniguchis could not prevail on their claim that Restoration Homes violated section 

2924c, and the trial court erred in granting summary adjudication to Restoration Homes 

on this cause of action. We need not reach the Taniguchis’ other arguments on this cause 

of action as to the existence of triable issues of fact.6

We turn briefly to the Taniguchis’ UCL cause of action, which rests on their claim 

that Restoration Homes violated section 2924c. The UCL is broad in scope. “[I]t defines 

‘unfair competition’ to include ‘any unlawful, unfair or fraudulent business act or 

practice.’ ([Bus. & Prof. Code,] § 17200.) . . . 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 

Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180, 

 

5 The modified loan defines the “maturity date” as September 1, 2019.

6 The Taniguchis also contend that an unpublished order in Charles Taniguchi’s

Chapter 13 bankruptcy proceeding is either persuasive authority or res judicata on the 

application of section 2924c. These arguments are not supported by meaningful analysis 

or citation to authority, and therefore we treat them as forfeited. (Allen v. City of 

Sacramento (2015) 234 Cal.App.4th 41, 52.) 
fn. omitted.) Restoration Homes argues that undisputed facts demonstrate that it did not 

violate section 2924c, but simply exercised its contractual rights under the loan 

modification, which as a matter of law cannot constitute an unfair business practice under 

the UCL. As we have discussed, however, Restoration Homes failed to show that its 

conduct was consistent with section 2924c and its rights under the loan modification; 

accordingly, Restoration Homes did not justify the dismissal of the UCL cause of action. 

Accordingly, just as it was error to grant summary adjudication on the statutory cause of 

action, it was error to grant summary adjudication on the UCL cause of action. 

DISPOSITION

The judgment is vacated. The trial court order granting Restoration Homes’ 

motion for summary adjudication on the Taniguchis’ causes of action for violation of 

Civil Code section 2924c and Business and Professions Code section 17200 et seq. is 

vacated, and the matter is remanded for further proceedings consistent with this opinion. 

The Taniguchis shall recover their costs on appeal.
_________________________

Miller, J.

We concur:

_________________________

Kline, P.J.

_________________________

Richman, J.

A152827, Taniguchi v. Restoration Homes LLC
10

Trial Court: Superior Court of San Mateo County

Trial Judge: Hon. Richard Dubois

Mellen Law Firm, Matthew Mellen, for Plaintiffs and Appellants

Law Offices of Glenn H. Wechsler, Glenn, H. Wechsler, for Defendant and Respondent

A152827, Taniguchi v. Restoration Homes, LLC