Filed 9/24/14 Willemsen v. Mitrosilis CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

RON WILLEMSEN, Plaintiff and Appellant,

v. ANDREW P. MITROSILIS et al., Defendants and Respondents. G050075 (Super. Ct. No. CIVRS912024)

O P I N I O N

Appeal from a judgment of the Superior Court of San Bernardino County, Ben T. Kayashima, Judge. Affirmed. Law Offices of Eric Michael Papp a nd Eric Michael Papp for Plaintiff and Appellant. Garrett & Tully, Ryan C. Squire and Scott B. Mahler for Defendants and Respondents.
* * *2 Plaintiff and appellant Ron Willemsen , a purchaser of vacant land, sued various parties involved in the sale of th e land, including defendant and respondent AppraisalPacific, Inc., the appraisal company hired by Willemsen’s lender. AppraisalPacific, Inc. and its individual appraisers, codefendants and respondents
Andrew P. Mitrosilis and Kr aig S. Takacs (collectively, the AppraisalPacific Defendants), filed a motion for summary j udgment, in which they asserted that Willemsen’s negligent misreprese ntation cause of action agains t them failed as a matter of law. The court granted the motion and Willemsen appeals. We affirm the summary judgment. W illemsen failed to raise a triable issue
of material fact to show th e AppraisalPacific Defendants intended to supply information to him to influence his decision whether to buy the property. We also hold the trial court did not abuse its discretion in denying Willems en’s request for leave to file an amended complaint to assert a cause of action for br each of third party beneficiary contract.

I
FACTS In his first amended complaint, Willems en alleged as follows: On February 27, 2007, he entered into a written contract to purchase 4.83 acres of vacant land in San Bernardino County from Avista Developmen t, LLC (Avista). Real estate broker Nicholas Quackenbos, his partner Richard Be ll, and their partnership, Quackenbos-Bell Commercial Real Estate (collectively, the Quackenbos-Bell Defendants), were the dual agents of Willemsen and Avista with respect to the sale. Willemsen asserted that the Quackenbos-Bell Defendants failed to properly draft the purchase ag reement so as to correctly articulate his contingencies, pa ssed along material misstatements without investigation, and made material misstatements of their own. In so doing, he said, they breached their fiduciary duties to him and commi tted negligence, with the result that he3 was left with a piece of property that was not suitable for his intended purpose. 1

In addition to the fore going, Willemsen asserted a cause of action for negligent misrepresentation agai nst the AppraisalPacific Defenda nts. He alleged that: (1) his lender had hired them to perform an appraisa l of the property; (2) they knew he, or the class of persons to which he belonged, would rely on the appraisal to determine the value of the property; and (3) they intended for him to rely on the valuation in obtaining financing from the bank. Willemsen further a lleged that the property value stated in the appraisal was in excess of the true value of the property, that the AppraisalPacific
Defendants had failed to account for either an earthquake fault line running across the property or the loss of land th at would be suffered when a local government entity ran a planned road over the property, and that hi s reliance on the appraisal was a substantial factor in causing him monetary harm. In response, the AppraisalPacific Defendants filed a motion for summary judgment. They asserted th at: (1) by June 2007, Willems en’s contingencies under the purchase agreement had expired; (2) on July 3, 2007, his lender, Farmers and Merchants Bank (the bank), retained the AppraisalPacific Defendants to perform an appraisal of the property in connection with its underwriting of the loan; (3) on July 25, 2007, the appraisal was issued; and (4) on Augu st 15, 2007, the escrow closed. The AppraisalPacific Defendants clai med Willemsen’s cause of action for negligent misrepresentation faile d as a matter of law because: (1) Willemsen was not the intended beneficiary of their appraisal; (2 ) Willemsen could not establish that he justifiably relied on the appraisal; and (3) neither they nor the lender intended the appraisal to influence Willemsen’s decision to buy the property.

1 Willemsen represents that he preva iled at trial as agai nst the QuackenbosBell Defendants, though no copy of a judgment is provided in the joint appendix. In any event, the liability of the Quackenbos-Be ll Defendants is not at issue on appeal.4 The trial court granted the motion. Th e court’s reasoning is reflected in the reporter’s transcript. The court stated th e evidence showed that the appraisal was prepared for the bank’s underwriting purposes and that Willemsen wa s only an incidental beneficiary with respect to the appraisal. It further stated Willemsen had offered no
evidence sufficient to raise a tria ble issue of material fact to the contrary. The court also acknowledged the AppraisalPaci fic Defendants’ argument that Willemsen could not have relied on the appraisal, though the court di d not specifically state whether it was basing its decision in any part on that argument.

II
DISCUSSION
A. SUMMARY JUDGMENT: (1) Introduction— “Under summary judgment law, any part y to an action, whether plaintiff or defendant, ‘may move’ the c ourt ‘for summary judgment’ in his [or her] favor on a cause of action . . . or defense (Code Civ. Proc., § 437c, subd. (a))—a plaintiff ‘contend[ing]. . . that there is no defense to the action,’ a de fendant ‘contend[ing] that the action has no merit’ ( ibid. ). The court must ‘grant []’ the ‘motion’ ‘if all the papers submitted show’
that ‘there is no triable issu e as to any material fact’ ( id. , § 437c, subd. (c))—that is, there is no issue requiring a trial as to any fact that is necessary under the pleadings and, ultimately, the law [citations]—and that the ‘moving party is entitled to a judgment as a matter of law’ (Code Civ. Pr oc., § 437c, subd. (c)).” ( Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 ( Aguilar ).) “[I]n moving for summary judgment, a ‘defendant . . . has met’ his [or her] ‘burden of showing that a caus e of action has no merit if’ he [or she] ‘has shown that one
or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action. On ce the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts5 exists as to that cause of action or a defense thereto. . . .’ (Code Civ. Proc., § 437c, subd. ( o )(2).)” 2 ( Aguilar , supra , 25 Cal.4th at p. 849.) On review of a summary judgment, we “examine the reco rd de novo and independently determine whether [the] decision is correct. [Citation.]” ( Colarossi v. Coty US Inc. (2002) 97 Cal.App.4th 1142, 1149.) (2) Background— (a) Contingency provisions Willemsen’s contingencies were set forth in sections 5 and 9 of the purchase agreement. They in cluded a financing contingenc y and various contingencies designed to enable Willemsen to determine th e suitability of the property for his intended purpose. He had the right, for example, to perform physical and soils inspections, to obtain a survey of the proper ty, to review title, and to review certain government approvals and other documentation. As stated in purchase agreement se ction 5.2, Willemsen had 60 days in which to obtain his financing. Section 9 provided contingenc y periods of varying lengths with respect to his inspection rights. For ex ample, section 9.1, subdivision (b) provided Willemsen with a physical inspection continge ncy expiring 10 days af ter the later of the date of the purchase agreement or the date of his receipt of a property information sheet. Section 9.1, subdivision (e) allotted Willems en 60 days to investigate applicable governmental approvals. Section 9.1, subdiv ision (d) provided a so ils inspection period. The copy of the purchase agreem ent found in the record cont ained a typed in figure that appeared to originally read “60” days, but was lined out by hand. The figure “90” was written in by hand and also lined out. The figure “60” was also written in hand. It appeared to have been initialed by only one part y. The initials appeared to be “RW.” At deposition, Willemsen testified, with respect to the lined out numbe rs, that the parties

2 See now Code of Civil Procedur e section 437c, subdivision (p)(2).6 ultimately settled on a 60-day soils inspection period. In all, se ctions 5.2 and section 9.1, subdivisions (d) and (e), provi ded the longest contingency periods, of 60 days. In support of their motion for su mmary judgment, the AppraisalPacific Defendants asserted that the contingency peri ods had expired no later than June 2007. Willemsen disputed this. In opposing the mo tion, he said that he had testified at deposition that the contingenc y periods and the closing da te had been extended many times. In support of this assertion, he cited three things. First, he cited a portion of his deposition testimony wherein he stated it was ve ry important that he obtain the approval of the City of San Bernardino to use the property as a re cycling facility and that he thought he had disapproved of the proper ty based on the governmental approvals contingency. He was uncertain whether he ha d put anything in writing, but believed he had communicated his disapproval to Bell, “be cause the closing date got extended several times[.]” Second, he cited a portion of the deposition transcript wherein he acknowledged signing amended escrow instruc tions that extended the date of close of escrow to August 10, 2007. Third, Willemsen cited th e amended escrow instructions themselves, which stated that the close of escrow was extended to August 10, 2007 to permit him to complete loan processing requirements. So, in his opposition, Willemsen showed that th e governmental approvals contingency period and the financing continge ncy period may have been extended. He did not, however, show that his right to reje ct the property on any ground other than his inability to satisfy himself as to governmental approvals or his inability to obtain satisfactory financing had been extended. (b) Appraisal documentation In support of their motion for su mmary judgment, the AppraisalPacific Defendants provided a copy of the bank’s July 3, 2007 request for appraisal services. On the first page, the request na med Willemsen on the subject lin e, and on the last page, it
identified the bank as the client and as the intended user of the appraisal.7 The AppraisalPacific Defendants also provided a copy of the appraisal report, which identified Willemsen as the bor rower. In the introduction, the appraisal report stated: “The function of this appraisa l report is to provide Farmers and Merchants Bank with a Summary Appraisal Report.” It further stated: “The intended use of this appraisal is to assist Farmers and Merchants Bank in analyzing a new loan for the subject property. The intended users of this apprai sal are Farmers and Merchants Bank and/or its designated representatives.” A nother portion of the report said: “The report may not be used for any purpose by any person other [tha n] the party to whom it is addressed without the written consent of the appraiser and the ap praiser specifically disclaims any liability to such unauthorized third pa rties.” The appraisal report was addressed to the bank. In addition, the appraisal report indica ted that the bank had provided a copy of the February 27, 2007 purc hase agreement. The appraisal report opined that the pending purchase price of $1, 600,000 was under market and that the property value was $1,780,000. (3) Analysis—
The court in the matter before us stated that it had considered three cases in making its decision— Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089 ( Nymark ), Soderberg v. McKinney (1996) 44 Cal.App.4th 1760 ( Soderberg ), and Mariani v. Price Waterhouse (1999) 70 Cal.App.4th 685 ( Mariani ). In Nymark , the court, in addressing a lender’s lia bility for negligence, held that a lender owed no duty of care to a borrower in apprai sing the borrower’s residence to determine
whether the residence would be ad equate security for a loan. ( Nymark , supra , 231 Cal.App.3d at pp. 1092-1093, 10 95-1096, 1100.) In so conc luding, the court applied the
factors set forth in Biakanja v. Irving (1958) 49 Cal.2d 647. ( Nymark , supra , 231 Cal.App.3d at pp. 1098-1100.) In applying th ose factors, the court stated, inter alia: “One who seeks financing to purchase real property has many means available to assess the property’s value and cond ition, including comparable sales, advice from a realtor,8 independent appraisal, contractors’ inspectio ns, personal observation and opinion, and the like. . . . Stated another way, the borrower s hould be expected to know that the appraisal
is intended for the lender’s benefit to assist it in determining whet her to make the loan, and not for the purpose of ensu ring that the borrower has made a good bargain, i.e., not to
insure the success of the i nvestment. [Citation.]” ( Id. at p. 1099; accord, Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 607 ( Graham ) [fraud or deceit context].) Here, Willemsen had the opportunity during the various contingency periods to make desired inspections and to examine documents in or der to determine the suitability of the property. Ho wever, for the most part, he ch ose not to avail himself of that opportunity. At his deposition he acknow ledged, for example, that while he had looked at the property before he signed the purchase ag reement, he did not perform any inspections afterwards, except for obtaining a survey. Furthermore, had Willemsen desired an appraisal for his own evaluation in making the decision to purchase, he could have negotiated an appraisal c ontingency and ordered an apprai sal for his own use. As it was, instead of doing investiga tions that would help him de termine whether the property suited his needs, he chose to rely on the ba nk’s willingness to make him a loan as a
sufficient indicator of the suita bility of the property. Howe ver, the bank’s determination that the collateral was of adequate value fo r its purpose was not a guarantee that the property was suitable fo r Willemsen’s needs.
Willemsen maintains that we should not rely on Nymark , supra , 231 Cal.App.3d 1089, because in that case, the plaintiff sued th e lender itself rather than a separate appraiser and because the case was decided prior to Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370 ( Bily ) and Soderberg , supra , 44 Cal.App.4th 1760. We find these reasons unpersuasive. Whether the lender cond ucts the appraisal in house or hires an outside appraiser, the considerations are the sa me. The appraisal is ordered by the lender is for its own protections and the borrower ha s his or her own means of ascertaining the9 desirability of the proper ty. We turn now to Bily and Soderberg

. In Bily , supra , 3 Cal.4th 370, the court addre ssed auditor liability to third parties. It held, inter alia , that “[a]n auditor may . . . be held liable for negligent misrepresentations in an au dit report to those persons w ho act in reliance upon those misrepresentations in a transaction which th e auditor intended to influence . . . .” ( Id. at p. 376.)
The Bily court expressed its approval of Restatement Second of Torts section 552, subdivision (b), having to do with the liability of suppliers of information. ( Bily , supra , 3 Cal.4th at p. 408.) The court stat ed: “As the authors of section 552 observe, liability should be confined to cases in which the supplier ‘ manifests an intent to supply the info rmation for the sort of use in which the plaintiff’s lo ss occurs.’ [Citation.]
This follows because the ‘risk of liability to which the supplier subjects himself by undertaking to give the information . . . is vitally affected by the number and character of the persons, and particularly the nature and extent of the proposed transaction. ’ [Citation.] [¶] The ‘intent to benefit’ language of the Restatement Second of Torts thus

creates an objective standard that looks to the specific ci rcumstances (e.g., supplier-client engagement and the supplier’s communications wi th the third party) to ascertain whether a supplier has undertaken to inform and guide a third party with respect to an identified transaction or type of transaction . If such a specific underta king has been made, liability is imposed on the supplier. If, on the other ha nd, the supplier ‘merely knows of the everpresent possibility of repetition to anyone, an d the possibility of action in reliance upon [the information] on the part of anyone to whom it may be repeated,’ the supplier bears no legal responsibility. [Citation.]” ( Bily , supra , 3 Cal.4th at pp. 409-410.)
Willemsen believes Bily , supra , 3 Cal.4th 370 supports his position. He emphasizes that the AppraisalPacific Defenda nts knew he was the borrower, inasmuch as the appraisal report referenced him by name a nd also referenced the purchase agreement, which contained a financing con tingency. Moreover, he says he paid for the appraisal10 and a copy of the appraisal is always given to the borrower. Be that as it may, while the Ap praisalPacific Defendants knew that Willemsen was the borrower and that, accord ing to the February 27, 2007 purchase agreement he had no obligation to complete th e purchase of the property unless the bank was willing to finance the transa ction, that does not mean th ey knew Willemsen would be relying on the appraisal in making a decision to purchase the property. Rather, a review of the February 27, 2007 purchase ag reement would have indicated to the AppraisalPacific Defendants that Willemsen’s contingencies base d on everything other than the bank’s willingness to finance the tran saction had expired before the appraisal was even requested by the bank. And where the financing cont ingency is concerned, just because Willemsen had a right to cancel the purchase if the bank was unwilling to provide satisfactory financing, that did not mean he had a right to cancel if he obtained a copy of the appraisal and did not like its contents . After all, as we have stated previously, he did not negotiate an ap praisal contingency. Furthermore, the AppraisalPacific Defe ndants did not manifest an intent to supply information for Willemsen’s use in de termining whether the property was suitable for his purposes. Rather, the appraisal report specifically limited its intended use to the use of the bank. Finally, the purpose of the appraisal report was to aid the bank in determining whether the proposed collatera l had a value sufficient to support the contemplated loan, not to a ssure Willemsen that it was su itable for use as a recycling facility or free from earthquake faults, or to disclose planned roadways to him. “If competent evidence does not pe rmit a reasonable inference that the [supplier of information] supplied its report w ith knowledge of the existence of a specific transaction or a well-defined type of tr ansaction which the report was intended to influence, the auditor is not pl aced on notice of the risks of th e . . . engagement. In such cases, summary adjudication will be appropriate because plaintiff will not, as a matter of law, fall within the class of intended beneficiaries.” ( Bily , supra , 3 Cal.4th at pp. 414-11 415.) Here, the appraisal report demonstrat es on its face that the AppraisalPacific Defendants were aware of the contemplated lo an transaction and that the appraisal report
was intended to influence that transaction. There is no indication, however, that the AppraisalPacific Defendants were aware that Willemsen hoped to us e the appraisal report as an investigational tool upon which to base his decision to approve or reject the property, inasmuch as the purc hase agreement did not include an appraisal contingency. Willemsen disagrees with this analysis. He claims that Soderberg , supra , 44 Cal.App.4th 1760 applied Bily , supra , 3 Cal.4th 370 to appraisers in a manner that supports his position. In Soderberg , a mortgage broker obtained an appraisal of certain real property in order to shop a loan to certain deed of trust investors. The trial court found the appraiser “‘knew that his appraisal was for the purpose of testing the equity for a potential loan’” but that th ere was no evidence the appr aiser was informed of the identity of any particular investor. ( Soderberg , supra , 44 Cal.App.4th at p. 1768.) The appellate court held it was error to grant su mmary adjudication in favor of the appraiser on the negligent misrepresentation cause of action brought by investors who relied on the appraisal. It stated: “[V]iewing the evidence most favorably to plain tiffs, [the appraiser] knew that a particular group or class of pe rsons to which plaintiffs belonged—potential investors contacted by [the mortgage broker who ordered the appraisal]—would rely on his report in the course of a specific type of transaction he cont emplated—investing in a deed of trust secured by the appr aised property. [Citation.]” ( Id. at p. 1771.) This was so even though th e appraisal itself said it was for the purpose of the mortgage broker in its decisionmaking. ( Id. at p. 1770.) While we agree with Wille msen that the court in Soderberg , supra , 44 Cal.App.4th 1760 applied Bily , supra , 3 Cal.4th 370 in the apprai ser context, we disagree with his argument that Soderberg , supra , 44 Cal.App.4th 1760 supports an outcome in
his favor. In Soderberg , the appraiser issued an appraisa l to a mortgage broker with the knowledge and intent that the mortgage brok er would distribute it to a class of potential12 investors who would rely there on in making their decision to invest or not invest. In the matter before us, however, there is no indica tion that the AppraisalPacific Defendants issued their appraisal report w ith the knowledge or intent th at Willemsen would rely upon it in deciding whether to buy or not to buy the property, or in ascertaining if earthquake fault lines crossed the property or the city intended to ru n roads across the property. Rather, they knew and intended that th e bank would use the appraisal report in determining whether the property had suffici ent value to serve as its collateral.

We turn next to Mariani , supra , 70 Cal.App.4th 685, the most recent of the cases upon which the trial court in th e case before us relied. In Mariani , the trial court granted summary adjudication in favor of the defendant auditor on a negligent misrepresentation cause of action. The pl aintiffs had guaranteed the debts of a corporation whose financial statemen ts the defendant had audited. ( Id. at pp. 689, 691, 709.) The appellate court applie d the principles enunciated in Bily, supra, 3 Cal.4th 370 and affirmed. ( Mariani , supra , 70 Cal.App.4th at pp. 705, 709.) It indicated that the trial court had correctly found a lack of cognizable reliance on the part of the plaintiffs. ( Id. at pp. 706-707.) It further stated: “The cour t properly granted summary adjudication on the negligent misrepresentation coun t of the third amended complaint because [the plaintiffs]
did not demonstrate a reasonable inference that [the defendant] intended to influence them in any identifiable transactio n or type of transaction.” ( Id. at p. 709.) Willemsen says Mariani , supra , 70 Cal.App.4th 685 is distinguishable from the case before us, because he “acted in relia nce on the valuation contained in the” appraisal report 3 and because the AppraisalPacific De fendants knew he was the borrower

3 We note it would be difficult for Willems en to show that he relied in certain other respects. For example, he complains th at the appraisal report failed to disclose the City of San Bernardino’s road plans with respect to the pr operty. However, Willemsen himself stated at deposition that he had lear ned about the future road in May or June 2007, initially in a design review meeting with city officials and thereafter from a city follow-up letter. The apprai sal was issued in July.13 and knew about the terms and conditions of the property purchase “of which their valuation was the single critical factor for th e financing cont ingency.” We have already discussed these points. The evidence shows that Willemsen only acted in reliance on the
valuation in the sense that he had a financ ing contingency that pe rmitted him to cancel
the deal if he could not obtain satisfactory financing. He did obtain the financing. True, the AppraisalPacific Defendants knew he wa s the borrower, but they did not intend to influence him in deciding whether to purchase or not purchase the property. The purpose of the appraisal report was to influence the bank in its decision whether to lend or not.

B. REQUEST FOR LEAVE TO AMEND: In the body of his opposition to the motion for summary judgment, Willemsen requested leave to am end his complaint to assert a breach of contract, third party beneficiary cause of action. In concluso ry fashion, he stated simply that he sought to assert the cause of action based on the facts already alleged and on Soderberg , supra , 44 Cal.App.4th 1760. As Willems en pointed out, leave to am end is liberally granted, even when a summary judgment motion is pending. ( Bostrom v. County of San
Bernardino (1995) 35 Cal.App.4t h 1654, 1663-1664.) In opposing the requ est for leave to amend, the AppraisalPacific
Defendants stated that Willems en had failed to follow prope r procedure in including his request in the body of his opposition to th e motion for summary judgment. They also said that his request was both untimely and a sham amendment, given that the lawsuit was filed on October 29, 2009, the request wa s made on December 14, 2011, the trial was set for January 30, 2011, and the new cause of action was not based on any new facts. At argument, the court denied the request for leave to amend because Willemsen had not made any pers uasive argument that he could successfully make a third party beneficiary breach of contract claim.14 In Soderberg , supra , 44 Cal.App.4th 1760, the pl aintiffs sought leave to amend their complaint to add a breach of cont ract claim based on th ird party beneficiary principles. They claimed that the appraiser had breached the contract by overstating the value of the property securing th eir deed of trust. They assert ed that they were third party beneficiaries of a contract between the mortga ge broker and the appraiser concerning the preparation of appraisal reports for prospective investors. ( Id. at p. 1772.) The court observed: “‘The prevailing American rule permits a third party beneficiary under a contract to enforce it. . . . The rule is codified in Civil Code section 1559, which provides: “A contract, made expr essly for the benefit of a third person, may be enforced by him [or her] at any time be fore the parties thereto rescind it.” The promise in such a situation is treated as having been made directly to the third party. . . . It is not necessary that an express beneficiar y be specifically identified in the contract; he or she may enforce it if he or she is a memb er of a class for whose benefit the contract was created.’ [Citations.]” ( Soderberg , supra , 44 Cal.App.4th at p. 1773.)
The Soderberg court observed that the plaintiffs provided evidence indicating they might be able to plead a viable third party beneficiary claim. ( Soderberg , supra , 44 Cal.App.4th at p. 1773.) That being the cas e, it held that the trial court erred in failing to rule on their request for leave to am end the complaint to st ate such a claim. ( Id. at p. 1774.) As Willemsen sees it, Soderberg , supra , 44 Cal.App.4th 1760 shows that he should have been granted l eave to amend for the same purpose. We disagree. In Soderberg , the appraisal was made knowing that the mortgage broker would use it to shop the loan to third party investors who wo uld rely on the appraisa l in deciding whether to invest or not. ( Id. at p. 1771.) Consequently, the pl aintiffs fell within the class of persons for whose benefit th e contract was made. ( Id. at pp. 1773-1774.) In contrast, in the case before us, as we have stated befo re, the person for whose benefit the appraisal was prepared was only the bank, so it could determine whether the co llateral satisfied its15 underwriting concerns. Although the iden tity of the borrower was known to the AppraisalPacific Defendants, they did not prep are the appraisal for the purpose of aiding Willemsen in deciding whether the property was suitable fo r his particular purposes. On another point, we no te Willemsen has alleged that while the property was appraised at $1,780,000, it was not in actu ality worth that much. However, he only paid $1,600,000. He has not stated eith er that the property was worth less than $1,600,000 or that the bank has complained th ere is inadequate security for its loan. Rather, Willemsen complains that the property is worth less than $1,780,000 because the appraisal report failed to take into account an earthquake fault line and the city’s plans to build a road. However, there is no indication either that the earthquake fault line and the roadway plans were of concern to the bank or that the AppraisalPacific Defendants intended to provide informa tion on those points to Wille msen for his decisionmaking

purposes. “‘If we see a reasonable possibility that the plaintiff could cure the defect by amendment, then we conclude that the tr ial court abused its discretion in denying leave to amend. If we determine otherwise, then we conclude it did not.’ [Citation.] ‘“The burden of proving such reasonable possi bility is squarely on the plaintiff.”’ [Citation.] To satisfy this bur den, ‘“a plaintiff ‘must show in what manner he can amend his complaint and how that ame ndment will change the legal e ffect of his pleading’”’ by clearly stating not only the le gal basis for the amendment, but also the factual allegations to sufficiently state a cause of action. [Citation.]” ( Graham , supra , 226 Cal.App.4th at p. 618.) Here, Willemsen failed to meet that bu rden. Consequently, we hold that the trial
court did not abuse its discretion in de nying his request for leave to amend.16 III
DISPOSITION The judgment is affirmed. The re spondents shall recover their costs on appeal.

MOORE, J.

WE CONCUR:

O’LEARY, P. J.

BEDSWORTH, J.