Filed 7/8/14 Rivera v. JPMorgan Chase CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

SIXTH APPELLATE DISTRICT

EFRAIN RIVERA,

Plaintiff and Appellant,

v.

JPMORGAN CHASE BANK, N.A., et al.,

Defendants and Respondents.

 H038546

 (Santa Clara County

 Super. Ct. No. 1-11-CV198993)

Plaintiff Efrain Rivera brought this action for breach of contract and specific 

performance after his home was sold in a nonjudicial foreclosure sale. The superior court 

sustained the demurrer of defendants JPMorgan Chase Bank, N.A. (Chase) and Deutsche 

Bank National Trust Company (Deutsche Bank) to plaintiff's second amended complaint 

without leave to amend and entered a judgment of dismissal. Plaintiff appeals, 

contending that he stated viable contract causes of action arising from a loan modification 

agreement between him and Chase. He alternatively argues that the court abused its 

discretion by giving him no opportunity to amend his pleading to allege that his own 

performance was excused or waived. We find no error in the superior court's conclusion 

that plaintiff cannot state a legally sufficient contract claim even with his proposed 

amendment. We must therefore affirm the judgment of dismissal. 
2

Background

Because this appeal arises from the sustaining of a demurrer, we summarize the 

underlying facts as they are stated in the operative pleading, the second amended 

complaint. Toward this end "we accept as true the properly pleaded material factual 

allegations of the complaint, together with facts that may properly be judicially noticed." 

(Crowley v. Katleman (1994) 8 Cal.4th 666, 672; Moore v. Regents of University of 

California (1990) 51 Cal.3d 120, 125.) 

Plaintiff asserted two causes of action, for specific performance and for breach of 

contract. Both were based on a loan modification agreement (LMA or Agreement) he 

had executed with Chase Home Finance LLC, which was the current lender on the 

mortgage applicable to his San Jose home.

1

 Plaintiff alleged that he fell behind in his 

mortgage payments on his original 2006 loan, due to the "downturn in the economy and 

the triggering of higher monthly payments" on his subprime loan. A notice of default 

was recorded on February 9, 2009. The LMA, executed in December 2009, called for a 

waiver of all late charges and suspension of any foreclosure activities, and it set forth a 

new schedule of interest rate adjustments beginning February 1, 2010. The first five 

years called for a monthly interest-only payment of $1,524.54, due on the first of each 

month. Except as modified in the Agreement, the terms of the original loan documents 

were expressly reaffirmed. 

Plaintiff then began paying varying amounts to Chase by cashier's check: $2,200 

on February 2, 2010; $1,800 on March 8; $2,200 on both April 12 and May 21; $3,000 on 

 

1 Chase Home Finance LLC was apparently succeeded by merger by JPMorgan Chase 

Bank, N.A. (collectively, Chase). In 2006 Deutsche Bank National Trust Company was 

assigned the deed of trust and California Reconveyance Company (CRC) was substituted 

as trustee. All but CRC are defendants and respondents in plaintiff's action.
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August 26; $2,200 on September 21; and $2,200 on November 1.2 The last check was 

returned, however, with a letter stating that Chase could not accept the payment because 

it was "insufficient to cure default." At some point Cesar Cadena, who had assisted 

plaintiff in the loan modification, contacted Chase on plaintiff's behalf and was told that 

Chase representatives "were looking into the return of the November payment."

On November 22, 2010, a Notice of Trustee's Sale was recorded, warning plaintiff 

that the property would be sold on December 14, 2010. Upon further communication

through Cadena, however, Chase agreed to postpone the sale until the following January 

pending its investigation. On January 14, 2011, Cadena was told that plaintiff should 

make a payment while the investigation was ongoing. Plaintiff mailed a cashier's check 

that day, paying Chase $2,200. The check was never returned. Nevertheless, that very 

day plaintiff's residence was sold. The Trustee's Deed Upon Sale was recorded on 

January 28, 2011. 

The course of events did not end there. In response to a telephone call on January 

28, 2011, Chase assured plaintiff that the "foreclosure issue" was being reviewed, and it 

identified Rosette McKithen as the Chase representative assigned to the "issue." 

Sometime after February 4, 2011 McKithen informed plaintiff that "there was no 

modification in place because Plaintiff had missed a payment in September 2009." On 

March 10, 2011, plaintiff sent McKithen a copy of an endorsed $3,100 check he had sent 

Chase on October 29, 2009, which he represented to be proof of the September 2009 

payment.

 

2 He further represented in the complaint that he paid $1,550 on June 15, 2010, and on 

July 9, 2010, but the exhibits referred to his complaint disclose that these checks had 

been paid in 2009, not 2010. 
4

McKithen, however, continued to state incorrectly that "the modification was 

never in effect." On March 29, 2011, plaintiff received a three-day notice to vacate the 

premises, followed on April 9 by an unlawful detainer action.

Plaintiff filed this action against Chase and the trustee, Deutsche Bank, on April 

15, 2011, requesting specific performance of the LMA, quiet title, injunctive relief, and 

damages for breach of contract. On June 9, 2011, he obtained a preliminary injunction 

staying the transfer of title to the property. Upon defendants' notice of demurrer, plaintiff 

filed a first amended complaint, which sought only specific performance and damages for 

defendants' alleged breach of the LMA. The superior court, however, sustained 

defendants' next demurrer with leave to amend, ruling that plaintiff's attachments showed 

that he himself had not performed under the Agreement, having apparently missed the 

October 2010 payment. 

Plaintiff filed his second amended complaint on January 18, 2012, again asserting 

specific performance and breach of contract. As he had in his prior pleadings, he alleged 

that he had "performed each and every term under the loan modification agreement." 

This statement was predicated on the further assertion that the LMA did not contain a 

"time is of the essence" clause and that the original promissory note and deed of trust had 

contained a grace period and late-payment provision which had not been modified by the 

LMA.

Defendants again demurred, contending that it was plaintiff who was in breach, 

not defendants, because he had failed to make the monthly payments on the dates they 

were due. The grace period was of no concern, defendants argued, because the LMA 

"did expressly provide the specific payment amounts and due dates for each modified 

monthly payment." The superior court agreed, and this time it sustained the demurrer 

without leave to amend. From the ensuing judgment of dismissal, plaintiff brought this 

timely appeal.
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Discussion

1. Standard and Scope of Review

"On appeal from a dismissal following the sustaining of a demurrer, this court 

reviews the complaint de novo to determine whether it alleges facts stating a cause of 

action under any legal theory. . . . [¶] Because the function of a demurrer is not to test 

the truth or accuracy of the facts alleged in the complaint, we assume the truth of all 

properly pleaded factual allegations. [Citation.] Whether the plaintiff will be able to 

prove these allegations is not relevant; our focus is on the legal sufficiency of the 

complaint." (Los Altos Golf and Country Club v. County of Santa Clara (2008) 165 

Cal.App.4th 198, 203; see also Debrunner v. Deutsche Nat. Trust Co. (2012) 204 

Cal.App.4th 433, 438-439.) "Further, we give the complaint a reasonable interpretation, 

reading it as a whole and its parts in their context." (Blank v. Kirwan (1985) 39 Cal.3d 

311, 318.) We do not, however, assume the truth of "mere contentions or assertions 

contradicted by judicially noticeable facts." (Evans v. City of Berkeley (2006) 38 Cal.4th 

1, 20; see also Blatty v. New York Times Co. (1986) 42 Cal.3d 1033, 1040 ["when the 

allegations of the complaint contradict or are inconsistent with such facts, we accept the 

latter and reject the former"].) Nor do we assume the truth of "contentions, deductions or 

conclusions of law." (City of Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865.) 

Finally, when the demurrer is sustained without leave to amend, "we decide whether 

there is a reasonable possibility that the defect can be cured by amendment: if it can be, 

the trial court has abused its discretion and we reverse." (Ibid.; Aubry v. Tri-City 

Hospital Dist. (1992) 2 Cal.4th 962, 967; Sandhu v. Lockheed Missiles & Space Co.

(1994) 26 Cal.App.4th 846, 850.)

2. Contract Causes of Action 

As noted earlier, plaintiff's second amended complaint asserted only two causes of 

action: specific performance and breach of contract, both pertaining to the LMA. In his 

effort to defend his pleading, plaintiff emphasizes that the original provisions of the note 
6

and deed of trust were retained to the extent that the LMA did not alter them. Thus, he 

argues, he still had a 15-day grace period before the lender could initiate foreclosure.

Plaintiff unfortunately continues to characterize his action as one rooted in 

contract. But whether viewed as breach of contract or specific performance, plaintiff's 

pleading cannot be sustained under either contract theory. Both breach of contract and 

specific performance require the plaintiff to have performed or be excused from 

nonperformance. In order to state a cause of action for breach of contract, a plaintiff 

must allege not only the existence of a contract and the defendant's breach, but also the 

plaintiff's own performance or excuse for nonperformance, as well as resulting damages. 

(Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921.) And by 

statute, specific performance "cannot be enforced in favor of a party who has not fully 

and fairly performed all the conditions precedent on his part to the obligation of the other 

party, except where his failure to perform is only partial, and either entirely immaterial, 

or capable of being fully compensated, in which case specific performance may be 

compelled, upon full compensation being made for the default." (Civ. Code, § 3392.) Of 

the seven payments plaintiff made to Chase, only one was on the first of the month; three 

were beyond the grace period provided in the Note, and one was omitted altogether. 

Thus, we agree with the superior court that plaintiff's allegation that he "performed each 

and every term under the loan modification agreement" cannot be sustained.

Plaintiff maintains, however, that Chase's contractual right to foreclose was 

precluded by its failure to comply with Civil Code section 2924 et seq., by filing a new 

notice of default. Even assuming a second notice of default is required by implication in 

the foreclosure statutes, plaintiff does not demonstrate how this obligation excuses his 

earlier nonperformance of his contractual obligation. This is not, as plaintiff suggests, a 

matter of ambiguous terms that are subject to competing interpretations. Plaintiff's 

complaint and the attached copies of his checks establish that plaintiff simply did not 

comply with the conditions of the LMA, including the terms incorporated into that 
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document from the note and deed of trust. Plaintiff's failure to pay the amounts due 

under the Agreement were not excused by any acts of Chase; Chase did not invite his 

nonperformance; nor did it prevent, interfere with, or delay his compliance with his 

monthly payment obligation until its rejection of the November 2010 check, when he was 

already in breach. Thus, plaintiff's reliance on Civil Code section 1511 to excuse his 

nonperformance is misplaced.3 Plaintiff's understanding of his existing deficiency and 

his effort to cure his default were arguably impeded by McKithen's misstatements and 

misleading explanations of the problem; but plaintiff's nonperformance had already 

occurred when Chase issued the notice of trustee's sale. 

Plaintiff further contends that it was an abuse of discretion not to allow him to 

amend his complaint again. His objective is not to state a new theory (such as wrongful 

foreclosure) pertaining to defects in the foreclosure process itself, but only to provide "an 

adequate pleading of the element of performance or excuse/waiver." Like the superior 

court, we are unable to discern how plaintiff will be able to establish this element. As 

discussed, the failure to file a new notice of default, even if required under the 

foreclosure statutes, did not excuse plaintiff's earlier failure to perform his payment 

 

3 Civil Code section 1511 states: "The want of performance of an obligation, or of an 

offer of performance, in whole or in part, or any delay therein, is excused by the 

following causes, to the extent to which they operate: [¶] 1. When such performance or 

offer is prevented or delayed by the act of the creditor, or by the operation of law, even 

though there may have been a stipulation that this shall not be an excuse; however, the 

parties may expressly require in a contract that the party relying on the provisions of this 

paragraph give written notice to the other party or parties, within a reasonable time after 

the occurrence of the event excusing performance, of an intention to claim an extension 

of time or of an intention to bring suit or of any other similar or related intent, provided 

the requirement of such notice is reasonable and just; [¶] 2. When it is prevented or 

delayed by an irresistible, superhuman cause, or by the act of public enemies of this state 

or of the United States, unless the parties have expressly agreed to the contrary; or, [¶] 3. 

When the debtor is induced not to make it, by any act of the creditor intended or naturally 

tending to have that effect, done at or before the time at which such performance or offer 

may be made, and not rescinded before that time."
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obligation under the LMA. Waiver is also not available to excuse plaintiff's 

nonperformance, because both the note and deed of trust provided that the lender's 

forbearance, extensions of time, or acceptance of late payment would not create a waiver 

of its rights. The note itself clearly stated, "Even if, at a time when I am in default, the

Note Holder does not require me to pay immediately in full as described above, the Note 

Holder will still have the right to do so if I am in default at a later time."

It is plaintiff's burden to show "in what manner he can amend his complaint and 

how that amendment will change the legal effect of his pleading." (Goodman v. Kennedy

(1976) 18 Cal.3d 335, 349; Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 

1081.) Plaintiff may make this showing for the first time on appeal. (Align Technology, 

Inc. v. Tran (2009) 179 Cal.App.4th 949, 971; Schultz v. Harney (1994) 27 Cal.App.4th 

1611, 1623; Performance Plastering v. Richmond American Homes of California, Inc.

(2007) 153 Cal.App.4th 659, 668.) In this case, however, plaintiff has failed to do so. 

Disposition

The judgment is affirmed.
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_____________________________

ELIA, J.

WE CONCUR:

______________________________

RUSHING, P. J.

______________________________

PREMO, J.