Filed 5 / 27 / 21 Adem v. America ’ s Wholesale Lender CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

SECOND APPELLATE DISTRICT

DIVISION SIX

ERIC ADEM

,

Plaintiff and Appellant,

v.

AMERICA’S WHOLESALE LENDER

, et al.,

Defendant s and R espondent s

. 2d Civ. No

. B304896 (Super. Ct. No. 5 6

- 2019

- 00523697

- CU

- OR

- VTA ) ( Ventura County )

Eric Adem brought this wrongful foreclosure action against defendants Countrywide Home L oans, Inc. (Countrywide), formerly doing business as America’s Wholesale Lender;
C ommunity Loan Servicing, LLC, formerly known as Bayview Loan Servicing, LLC (Bayview) ; Mortgage Electronic Registration Systems, Inc. (MERS) ; and The Bank of New York Mellon (Bank of New York) , formerly known as The Bank of New York as
Trustee for the Certificate H olders of CWMBS Inc., CHL Mortgage Pass

- Through Trust 2007

- 7 Mortgage Pass

- Through2

Certificates, Series 2007

- 07. The trial court sustained defendants’ demurrer s to the original complaint and first amended complaint (FAC) with leave to amend most causes of
action

. Adem filed a second amended complaint (SAC) , to which Bayview and Bank of New York demurred. The trial court again
sustained the ir demurrer with leave to amend. When Adem chose not to amend, the court dismissed the action with prejudice pursuant to Code of Civil Procedure section 581, subdivision (f)(2)

. Adem appeals portions of the dismissal. We affirm.
P ROCEDURAL AND FACTUAL BACKGROUND
In 2007
, Ad em obtained a $ 800 ,000 home loan from Countrywide, secured by a deed of trust on real property located

at 5209 Via Jacinto in Thousand Oaks. MERS, as beneficiary, later assigned the deed of trust to the Bank of New York. On August 3, 2018, Bayview, as the loan servicer, recorded
a notice of default and election t o sell under the deed of trust. No
notice of tru stee’s sale has been recorded.
The SAC alleges causes of action for (1) violation of Civil Code section 2924.11, (2) breach of the covenant of good faith and fair dealing, (3) violation of the unfair competition law (UCL),
Business and Professions Code section 17200 et se q. and (4) declaratory relief. Countrywide and MERS answered the SAC, generally denying the allegations

. T he trial court sust ained Bayview and Bank of New York’s demurrer to the SAC with leave to amend, but noted the allegations had not significantly changed from the earlier complaints

. When no amended pleading was filed, Countrywide and
MERS filed an ex parte application for involuntary dismissal of the action pursuant to Code of Civil Procedure section 581,3

subdivision (f)(2). 1 The trial court granted the application and
dismissed the action with prejudice as to all defendants

. DISCUSSION
Adem contends the trial court er red by sustaining , with leave to amend, his causes of action for violation of Civil Code section 2924.11, breach of the covenant of good faith and fair dealing and violation of the UCL (Bus. & Prof. Code, § 17200 et

seq. ). He also challenges the dismissal of his cause of action for
violation of TILA, 1 5 United States Code section 1641 (g). The court had previously sustained the demurrer s to that c ause of
action without leave to amend . (See Hudis v. Crawford (2005) 125 Cal.App.4th 1586, 1590, fn. 4 [ o rder sustaining a demurrer
without leave to amend is appealable upon dismissal of case ]

. ) Standard of Review
Whe re, as here, “a demurrer is sustained with leave to amend but [the] plaintiff elects not to amend, it is presumed on appeal that the complaint states as strong a case as is possible.” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2018) ¶ 8:136.3e, p. 8

- 109 .) “The judgment of dismissal must be affirmed if the unamended complaint is objectionable on any ground raised by the demurrer.” ( I bi d

. ; Holcomb v. Wells Fargo Bank, N.A. (2007) 155 Cal.App.4th 490,
495

- 496; Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 457.) “‘ [ W ] e do not consider the possibility that any defects in [the claims] co uld b e cured by amendment .

. . .’ ”

1 Code of Civil Procedure section 581 , subdivision (f)(2) allows the court to dismiss the complaint “after a demurrer to the complaint is sustained with leave to amend, [and] the plaintiff fails to amend it within the time allowed by the court and either party moves for dismissal.”4

( Ibarra v. California Coastal Com. (1986) 182 Cal.App.3d 687,
692 ; Holcomb

, at p. 496.) When a demurrer is sustained without leave to amend, w e “‘determine de novo whether the complaint alleges facts sufficient

to state a cause of action or discloses a complete defense.’” ( McBride v. Smith (2018) 18 Cal.App.5th 1160, 1172

- 1173.) If

“ there is a reasonable possibility that the defect can be cured by
amendment

. . . the trial court has abused its discretion and we reverse; i f not, there has been no abuse of discretion and we
affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” ( Blank v. Kirwan (1985) 39 Cal.3d 311, 318 .)

Violation of Civil Code Section 2924.11
Civil Code s ection 2924.11, subdivision (a) formerly provided: “ If a borrower submits a complete application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer, a mortgage servicer, trustee, mortgagee, beneficiary, or au thorized agent shall not record a notice of sale or conduct a trustee’s sale while the complete foreclosure prevention alternative application is pending .”
This section was repealed effective January 1, 2019

, and now states: “(a) If a foreclosure preven tion alternative is approved in writing prior to the recordation of a notice of default, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default under either of the following circumstances : [¶] (1) Th e borrower is in compliance with the terms of a written trial or permanent loan modification, forbearance, or repayment plan. [¶] (2) A foreclosure prevention alternative has been approved in writing by all parties, including, for example, the first lien investor, junior lienholder, and mortgage insurer, as applicable, and proof5

of funds or financing has been provided to the servicer.” (Civ. Code, § 2924.11, subd. (a)(1), (2).) The SAC alleges that Adem submitted a complete loan modification application on December 10, 2018 . Although it is
unclear which version of Civil Code section 29 24.11 would apply
in this case , we need not reach this issue because Adem is ineligible for relief under either version. The current version requires the actual approval of a fore closure prevention
alternative and there is no allegation that occurred. As for the pre

- January 1, 2019 version, Adem does not allege that a notice of sale was recorded or that a trustee’ s sale
was conducted while his loan modification a pplicati on was pending. To the contrary, the SAC acknowledges that “no Notice
of Trustee sale has been recorded in this matter.” 2 In addition

, Adem cites no authority suggesting that his allegation that “Bayview informed him that they were moving forward with a trustee sale despite his pending loan modification” is sufficient to
i nvoke the statute’s protections in the absence of either a
recorded notice of sale or an actual trustee’s sale.

Breach of the Implied Covenant of Good
Faith and Fair Dealing
The coven ant of good faith and fair dealing , which is implied in every contract

, “not only imposes upon each contracting party the duty to refrain from doing anything which would render performance of the contract impossible by any act of his own, but also the duty to do everything that the contract presupposes that he will do to accomplish its purpose.” ( Harm v. Frasher (1960) 181 Cal. App. 2d 405, 417 .) “It is universally recognized the scope of conduct prohibited by the covenant of

2 At oral argument, respondents’ counsel confir med that no notice of sale has been recorded to date.6

good faith is circumscribed b y the purposes and express terms of
the contract.” ( Carma Developers (Cal.) , Inc. v. Marathon
Dev elopment California, Inc. (1992) 2 Cal.4th 342, 373. ) The covenant “cannot impose substantive duties or limits on the contracting parties beyond those incorp orated in the specific terms of their agreement.” ( Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 349

- 50 .) The SAC fails to allege conduct by defendants that violated the terms of the parties’ agreement or prohibited the performance
of the contrac t

. As one court explained, “[t]he purpose of the note
and deed of trust is that [the borrower] shall have the use of the funds loaned on the terms and at the interest rate specified in the note, and that [the lender] shall have the security provided by th e deed of trust.” ( Milstein v. Security Pac

. Na t

. Bank (1972) 27 Cal.App.3d 482, 487 .)
The SAC does not allege that Adem failed to receive the
benefits of the loan proceeds or that the lender was not entitled to
the security interest authorized by the d eed of trust. The se obligations were contemplated by the loan agreement and , as Bayview and the Bank of New York point out, no foreclosure
instruments have been recorded since Adem submitted his loan modification applicatio n in December 2018

. Given these facts,
the demurrer to this claim was properly sustained

. UCL Violation The UCL “does not proscribe specific activities, but in relevant part broadly prohibits ‘any unlawful, unfair or fraudulent business act or practice.’ [Citation.]” ( Aleksick v. 7

- Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1184 ( Aleksick ) .) It identifies three varieties of unfair competition

-- acts or practices which are unlawful, or unfair or fraudulent. ( Ibid. ) “‘“By proscribing ‘any unlawful’ business practice, ‘section 172007

“borrows” violations of other laws and treats them as unlawful practices’ that the unfair competition law makes independently
actionable.”’ [Citation.] ‘Virtually any law

-- f ederal, state or
loca l

-- can serve as a predicate for a [UCL] action.’ [Cita tion.] When a statutory claim fails, a derivative UCL claim also fails.” ( Id

. at p. 1185.)
T he U CL claim is based upon the allegations in the causes of action for violation of Civil Code section 2924.11 and breach of the covenant of good faith and fair dealing. The SAC also “asserts the unsupported conclusion that defendants

. . . viol ated numerous other statutes.” As we have explained, Adem’s claims for violation of Civil
Code section 2924.11 and breach of the covenant of good faith and fair dealing fail as a matter of law . Consequently, the derivative
UCL cause of action arising from those claim s also fails. ( Aleksick

, supra , 205 Cal.App.4th at p. 1185 ; Plan Check Downtown III, LLC v. AmGuard Ins. Co. (C.D.Cal. 2020) 485 F.Supp.3d 1225, 1233 [Beca use plaintiff “ fails to state a claim for a breach of contract or the covenant of good faith and fair dealing

. . . [i] ts derivative claim for unfair business practices therefore
also fails ”]. )
Even if Adem did allege an actionable UCL violation, he
has not established standing to pursue that claim. To
d emonstrate standing, a private plaintiff must allege a financial or property loss as a result of the unlawful acts. ( Bus. & Prof. Code, § 17204 .) In other words, the plaintiff must show a “causal

conne ction” between the ec onomic injury and the defendant’ s allegedly unfair or unlawful conduct. ( Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522

, disapproved on another ground in Y vanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 91 9, 939 & fn. 13. ) “A plaintiff fails to satisfy8

[this requirement] if he or she would have suffered ‘the same harm whether or not a defendant complied with the law.’ [Citation.]” ( Ibid

. )
Adem contends he was willfully induced to change his financial po sition and, as a result, suffered the loss of his credit, equity in his home and the potential loss of mon ies spent on home improvement. But these bare allegations of economic loss are not sufficiently precise to meet the standing requirement. ( Saldate v

. Wilshire Credit Corp. (E.D .Cal. 2010) 686 F.Supp.2d 1051, 1066;
Hosseini v. Wells Fargo Bank, N.A. (N.D.Cal. Aug. 9, 2013, No.
13

- cv

- 02066 ) 2013 US Dist. Lexis 113583

, *8 [ plaintiff lacked standing under the UCL where no foreclosure sale had taken place and plaintiff only included conclusory allegation s of economic injury].)
T ILA Violation
A TILA claim for damages under 15 U nited States Code
section 1641 (g) is subject to a one

- year statute of limitation s

. ( I d., § 1640 (e) .) The period begins to run “a t the time the loan documents were signed.” ( Meyer v. Ameriquest Mortgage Co. (9th Cir. 2003) 342 F.3d 899, 902.)
TILA states that “ not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third p arty, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such
transfer .” (15 U.S.C. § 1641 (g)(1).) The FAC allege d that Bank of
New York violated this section by failing to disclose in writing the
2015 ass ignment of the deed of trust from Countrywide.
Adem acknowledges that more than one year had passed since his loan documents were signed but contends the limitations period was tolled because the Bank of New York did not provide the requisite written not ice of the assignment. ( See9

15 U.S.C. § 1641( g)(1).) TILA claims may be subject to equitable tolling

, but only “in situations where, despite all due diligence, the party invoking equitable tolling is unable to obtain vital information bearing on the exis tence of the claim.” ( Cervantes v. Countrywide Home Loans, Inc

. (9th Cir. 2011) 656 F.3d 1034,
1045 .) Adem contends he could not have discovered the transfer because he did not receive notice of the assignment as required by law and was not required to c heck the recorder’s office for such
notice. Courts have held, however, that a defendant’s failure to make the necessary TILA disclosures is not a sufficient basis for equitable tolling . Equitable tolling is the “exception

– not the general rule,” and “[ t]o allow tolling whenever a plaintiff alleges an improper disclosure would render the TILA limitations period completely meaningless.” ( Vargas v. JP Morgan Chase Bank,
N.A. (C.D.Cal. 2014) 30 F.Supp.3d 945, 949; Garcia v. Wachovia Mortgage Corp. (C.D.Cal . 2009) 676 F.Supp.2d 895, 906 [“[T]he
mere existence of TILA violations and lack of disclosure does not itself equitably toll the statute of limitations”].) As Vargas observed, “ [ i ] t is rather unclear how [ the plaintiff] can
characterize his conduct as r easonably diligent when he did not
check the recorder's office .” ( Vargas

, at p. 949; see Dela Cruz v. HSBC Bank USA, N.A., (D.Nev. Feb. 6 , 2013, No. 2:12

- cv

- 01283

- MMD

- PAL, 2013 US Dist. Lexis 15985, *13 [ “ [T] here is no basis to equitably toll the statute of limitations, as Plaintiffs request, since the recording of the Assignment provided Plaintiffs with constructive notice of the Assignment” ].) We agree with the trial court that the TILA cause of action is barred by the one

- year stat ute of limitations (15 U.S.C.10

§ 1640 (e) ) and that allowing further leave to amend would have
been futile. 3
D ISPOSITION
The judgment is affirmed in its entirety

. Respondents shall

recover their costs on appeal.
NOT TO BE PUBLISHED.

PERREN , J.

We concur :

GILBERT

, P. J.

TANGEMAN

, J.

3 C ountrywide and MERS contend that Adem has waived or forfeited any claims of error in the judgment of dismissal which they sought and obtained pursuant to Code of Civil Procedure section 581 , su bdivision (f)(2)

. Although Countrywide and MERS answered the SAC, they maintain they a re entitled to the benefit of that judgment. Adem’s briefs do not raise or respond to this issu e and we therefore deem it waived. ( Swain v. LaserAway Medical Group , In c. (2020) 57 Cal.App.5th 59, 72

- 73; Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1282.)11 Mark S. Borrell

, Judge Superior Court County of Ventura

______________________________

Rodri guez Law Group , Patricia Rodriguez and Eric
Rasmussen , for Plaintiff and Appellant.
McGuireWoods , Tanya L. Greene a nd E. Christine Hehr, for Defendants and Respondents Countrywide and MERS.
Akerman , Preston K. Ascherin, Parisa Jassim and Joseph Yoon, for Defendants and Respondents Community Loan Servicing, LLC, FKA Bayview Loan Servicing, LLC, and The
Bank of New Yo rk Mellon, FKA The Bank of New York as Trustee for the Certificate Holders of CWMBS Inc., CHL Mortgage Pass

- Through Trust 2007

- 7 Mortgage Pass

- Through Certificates, Series 2007

- 07.