Court Opinion

ID: 4464720
Source: CourtListenerOpinion
Date Created: 2019-12-16 22:02:20.318672+00
Date Added: 2024-06-11T14:28:05.209270
License: Public Domain

Filed 12/16/19; On rehearing
                               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,                A152827

 v.                                                   (San Mateo County
 RESTORATION HOMES LLC,                               Super. Ct. No. CIV525919)
            Defendant and Respondent.

        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 2924c1 allows the borrower to cure the default, reinstate the loan, and avoid
foreclosure by paying the amount in default, plus specified fees and expenses. Under
section 2953, the right of reinstatement cannot be waived in “[a]ny 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.”
        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
borrowers argue that under sections 2924c and 2953, they can reinstate the modified loan
by paying the four missed payments, plus fees and expenses. The lender argues that
section 2953 does not apply to the modified loan, and that under section 2924c the

        1
            Statutory references are to the Civil Code unless otherwise stated.

                                                1
borrowers have the right to reinstate the original loan by paying 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.
       We conclude that the borrowers have the better argument, and therefore we vacate
the trial court judgment and remand for further proceedings.
                 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. The deed of trust stated that the loan would
be paid “in regular Periodic Payments,” with the debt to be paid in full by 2036. By early
2008 the Taniguchis were having difficulty making the required loan payments, and in
2009 they agreed to a “Balloon Loan Modification Agreement” (Modification) that
adjusted the principal amount, eliminated an adjustable interest rate rider, 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. Under the Modification, the Taniguchis’ loan
matured in 10 years, at which point the Taniguchis would need to refinance or make a
balloon payment of about $531,000, plus any additional charges.
       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 immediate payment by a defaulting borrower of
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

                                             2
account 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 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 and they 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 of Business and Professions Code
section 17200 et seq. (the UCL). Restoration Homes sought summary judgment, or in the
alternative summary adjudication. The 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 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

                                             3
law.” (Intel Corp. v. Hamidi (2003) 30 Cal. 4th 1342, 1348; Code Civ. Proc. § 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.
A.     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 the loan by
paying the amount of the default, including fees and costs resulting from the default,
rather than the entire accelerated balance. The mortgage lender must inform the borrower

       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).)

                                              4
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. A Court of Appeal in 1949 observed: “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 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.)
       Section 2953 limits the ability of a borrower to waive the right of reinstatement:
“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 privileges conferred upon him by Sections 2924, 2924b,
2924c of the Civil Code or by Sections 580a or 726 of the Code of Civil Procedure shall
be void and of no effect.”3 (§ 2953.)
       The public policy behind section 2953 has not been as directly or consistently
recognized as the policy behind section 2924c. In the years since section 2953 was
enacted, our Supreme Court has expressed somewhat contradictory views about the
breadth of the policy rationale underlying the prohibition of waivers. In Salter v. Ulrich
(1943) 22 Cal. 2d 263 (Salter), a case that arose from transactions entered before section

       3
         Section 2953 was originally enacted in 1937, in a slightly different form. (Stats.
1937, ch. 564, § 1, p. 1605.) Sections 2924 and 2924a concern the exercise of the power
of sale. Code of Civil Procedure section 580a concerns deficiency judgments. Code of
Civil Procedure section 726 is the one-form-of-action rule. (See Bank of America, N.A. v.
Roberts (2013) 217 Cal. App. 4th 1386, 1396-1398 [discussing the context and purpose of
the rule].)

                                             5
2953 took effect and that did not apply section 2953, our Supreme Court suggested in
often-cited dictum that because section 2953 prohibits contemporaneous waivers of
certain code sections, specifically Code of Civil Procedure section 726, it implicitly
permitted such waivers after a loan is made. (Id. at p. 267.) In discussing the policy
underlying the prohibition against advance or contemporaneous waivers, the Supreme
Court observed, “Since necessity often drives debtors to make ruinous concessions when
a loan is needed, section 726 should be applied to protect them and to prevent a waiver in
advance. This reasoning, however, does not apply after the loan is made, when all rights
have been established and there remains only the enforcement of those rights.” (Ibid.)
More than 50 years later, our Supreme Court distanced itself from part of that policy
rationale in DeBerard Properties, Ltd. v. Lim (1999) 20 Cal. 4th 659 (DeBerard), a case
that concerned whether the protection against deficiency judgments established by Code
of Civil Procedure section 580b could be waived by contract in exchange for new
consideration after the original purchase money sale. (Id. at pp. 661-662.) In the
circumstances of DeBerard, our Supreme Court held that the statutory protection could
not be waived. (Id. at p. 662.) And in discussing the “policy reasoning” of an appellate
case that had held otherwise, our Supreme Court acknowledged, in a paraphrase of Salter,
that “ ‘ “[r]uinous concessions” are, if anything, easier to obtain when the debtor is in
default. Then, the temptation to “press the bet” is likely to be stronger than the poor
decision to purchase the property in the first instance.’ ”4 (Id. at pp. 670-671, italics
added.)
B.     Analysis
       The Taniguchis contend that under section 2924c, they have the right to avoid
foreclosure and reinstate their modified loan by making up the missed modified

       4
         Like Salter, DeBerard did not involve the application of section 2953. Code of
Civil Procedure section 580b is not one of the statutes mentioned in section 2953, and our
Supreme Court noted in DeBerard that the “interplay” between those statutes “is
complicated and susceptible of differing interpretations.” (DeBerard, supra, 20 Cal.4th
at p. 670.)

                                              6
payments, plus costs and fees. They argue that the Modification is an agreement made
“at the time of or in connection with the making of or renewing of any loan secured by a
deed of trust,” and therefore cannot include any waiver of the right of reinstatement.
(§ 2953.) In their view, the Modification is the “making” of a loan because it capitalized
new sums that were due (that is, the deferred amounts). They further contend that as a
general matter, any loan modification is a “renewal” of a loan because it is a replacement
of the former loan by “an entirely new contract, with fundamentally new contract terms.”
       Restoration Homes maintains that the 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 (before modification), the deferred amounts were due and owing, those
amounts could properly be required as a condition of reinstating the original loan and
avoiding foreclosure under section 2924c.5 Restoration Homes’ position is supported by
an amicus curiae brief filed by the California Mortgage Association, the California
Mortgage Bankers Association, and the United Trustees Association (collectively,
Amici).
       1.     Lack of Precedent
       This appears to be a case of first impression.6 The Legislature did not define the
phrase “at the time of or in connection with the making of or renewing of any loan
secured by a deed of trust” for purposes of section 2953, and there is no clear definition
in the case law.

       5
         Restoration Homes emphasizes that the Taniguchis “were always permitted to
reinstate their [original] loan by paying the entire amount of their defaults, as required by
[section] 2924c.”
       6
          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 was decided in a legal and factual
context that differs from this case (id. at pp. 169, 172, 177), and we do not discuss it
further. The Taniguchis 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.)

                                              7
       As one widely-used treatise observes, “Whether a loan that has been modified by
the parties as part of a workout agreement is considered ‘made’ or ‘renewed’ is unclear.”
(1 Bernhardt et al., Cal. Mortgages, Deeds of Trust, and Foreclosure Litigation
(Cont.Ed.Bar 4th ed. 2019) § 4.64, p. 4-47.7) This observation is followed by a “Practice
Tip”: “Drafting and labeling the workout agreement as a forbearance of the original
loan—rather than as an extension or renegotiation of it—may increase the validity of
waivers accompanying it. If more is involved, however (i.e., changes in amounts, rates of
interest, or deadlines[8]), the forbearance label may not help. The new terms may be
enforceable, but the debtor’s waivers may be unenforceable.” (Id. at p. 4-48.)
       Another treatise observes, “There is only weak authority that the [borrower] can
waive or diminish its rights of reinstatement, although the parties may be able to waive or
modify the rights of reinstatement by a subsequent agreement where there is additional
consideration to the [borrower].” (5 Miller & Starr, supra, § 13.238, pp. 13-981.) The
observation is followed by a footnote explaining that “[t]here is no direct judicial
authority permitting a subsequent waiver of [section] 2924c, but other provisions of the
code which are made non-waivable by [section] 2953 can be waived by a subsequent
agreement bound by separate consideration to the debtor.” (Id. at fn. 3.) The footnote in
Miller & Starr provides a “[s]ee, e.g.” citation to Hamud v. Hawthorne (1959) 52 Cal. 2d
78, which did not involve a subsequent agreement (id. at p. 84), and Morello v.
Metzenbaum (1944) 25 Cal. 2d 494 (Morello), the only case we know of in which our
Supreme Court addressed the applicability of section 2953 to a subsequent agreement.
       Morello, however, provides little guidance: indeed, although Restoration Homes
and Amici mention it, they do not discuss it in any depth. In Morello, the Supreme Court

       7
        “[T]he term ‘workout’ is used to refer broadly to any predefault or postdefault
negotiations or consensual actions that are undertaken by the parties to the loan to avoid
an imminent default or to resolve a default or other problem between the parties without
the borrower instituting bankruptcy proceedings.” (2 Bernhardt et al., Cal. Mortgages,
Deeds of Trust, and Foreclosure Litigation (Cont.Ed.Bar 4th ed. 2019) § 10.1, p. 10-5.)
       8
           As is the case with the Modification here.

                                               8
determined that section 2953 did not prevent the waiver of section 2924 (a notice
provision) in an agreement that was executed three months after the making of an
unsecured loan and that did not itself constitute a loan, but instead provided security for
the earlier loan. (Morello, supra, 25 Cal.2d at pp. 496-497.) The Supreme Court
determined that the subsequent agreement in Morello was not executed at the time of or
in connection with the making of the loan, and it was not a renewal for purposes of
section 2953, but rather an extension, because it left the original loan in existence with
only the time of payment extended. (Id. at p. 500.) Thus Morello does not involve the
right of reinstatement under section 2924c and its unusual facts are unlike those before
us. Further, it quotes with approval language from Salter which the Supreme Court itself
has since questioned in DeBerard. (Morello, supra 25 Cal.2d at p. 499.) The equities are
different, too. The lender in Morello sought to benefit himself by purporting to invoke
section 2953 to void an agreement he had entered with the borrower. (Id. at pp. 498-
499.) Here the borrowers seek to enforce their own rights under section 2953.
       2.     Application of Section 2953
       We agree with the Taniguchis that the Modification can be understood as being
“in connection with the making of . . . [a] loan secured by a deed of trust” (§ 2953),
because amounts were added to the existing loan, specifically the accrued and unpaid
interest. Amici argue that the Modification simply altered the terms under which the
original loan was made. This argument would have more force if the Modification did
not involve the deferral of accrued and unpaid interest. Nor are we persuaded by Amici’s
claim that a loan modification like the Taniguchis’ is not treated as a new loan under
federal law for the purposes of disclosures required by the Truth in Lending Act (15
U.S.C. § 1601 et seq.), in the absence of any explanation of how the federal requirements
for loan disclosures apply to the California statutory scheme giving borrowers the
opportunity to cure defaults.
       We also conclude that the Modification can be understood as the “renewing of [a]
loan secured by a deed of trust” for purposes of section 2953.

                                              9
       As a leading treatise explains, as a general matter extensions of loans and renewals
alike are “contractual revision[s] of the terms of the obligation, the effect of which is to
alter the time and terms of payments becoming due. After the extension or renewal, the
debtor is not in breach or default so long as the amended or renewed terms of the
indebtedness are performed.” (5 Miller & Starr, supra, § 13:110, p. 13-426.) The
Modification here can be regarded as an extension or renewal because it amended and
supplemented the Taniguchis’ original obligation, changing the time and terms by which
payments were due. And upon signing the Modification, the Taniguchis were no longer
in default. The Modification provides that “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].)9
       As a general matter, a prototypical renewal differs from an extension in that “[a]n
extension gives the same instrument effect for an additional period, whereas a renewal
substitutes a new obligation and generally requires the execution of a new instrument.”
(5 Miller & Starr, supra, § 13:110, p. 13-426 [citing Morello, supra, 25 Cal.2d at pp. 499-
500]]; cf. Torrey Pines Bank v. Hoffman (1991) 231 Cal. App. 3d 308, 324 [where
forbearance agreement by its terms does not amend or modify note or deed of trust, “it
does not appear the agreement may be considered a renewal of the loan” for purposes of
section 2953].) If a renewal for purposes of section 2953 must be distinguished from an
extension, as Morello suggests (Morello, supra, 25 Cal.2d at pp. 499-500), then the
Modification is a renewal and not a mere extension because it does not simply make the

       9
        We do not credit Restoration Homes’ argument that the Taniguchis’ loan was
never brought current, and that the amounts deferred in the loan modification have been
due and owing since the Taniguchi’s original, pre-modification default. If the deferred
amounts had actually been due and owing even after the loan was modified, then the
Taniguchis would have been in default throughout the term of the modified loan even if
they timely made every required payment. This is inconsistent with the provision in the
Modification that it brings the loan due.

                                              10
original loan effective for an additional period. Although the original note continues to
exist, its terms have been amended considerably by the Modification.
       Restoration Homes takes the position that section 2953 does not apply to any loan
modifications, including the Modification here, arguing that if the Legislature had
intended section 2953 to apply to loan modifications it could have written the statute to
include them, and that mortgage loan modifications are separately regulated in sections
2944.6, 2944.7, 2944.8, and 2944.10, which were enacted in and after 2009. (Stats. 2009,
ch. 630, §§ 9-10; Stat. 2014, ch. 457, §§ 2-3.) These arguments are weak. Restoration
Homes provides nothing to suggest that the term “loan modification” was in general use
in 1941, when section 2953 was last amended. (See Stats. 1941, ch. 599, § 1, p. 1983.)
And the recently-enacted statutes regarding mortgage loan modification are not
comprehensive: their focus is the imposition of requirements on those who charge
borrowers fees to perform mortgage loan modifications.
       Restoration Homes also contends that a “renewal” for purposes of section 2953 is
a subsequent agreement that does not change the terms of a loan’s repayment (except the
time of payment), and that a loan modification that changes more than the time of
payment is therefore not a renewal. This argument rests primarily on Secrest v. Security
National Mortgage Loan Trust 2002-2 (2008) 167 Cal. App. 4th 544 (Secrest), a case that
makes no reference to section 2953.
       In Secrest, the issue before the Court of Appeal was whether a written forbearance
agreement, apparently reached when borrowers were in default on their mortgage, was
enforceable where the lender had failed to sign it. (Secrest, supra, 167 Cal.App.4th at p.
552.) The court concluded that the forbearance agreement, which modified the note and
deed of trust, was subject to the statute of frauds, and not enforceable. (Id. at pp. 547,
553.) The court reasoned that because an agreement for the sale of real property comes
within the statute of frauds under section 1624, subdivision (a)(3), a mortgage or deed of
trust also comes within the statute of frauds under section 2922, which provides that “[a]
mortgage can be created, renewed, or extended, only by writing, executed with the
formalities required in the case of a grant of real property,” and therefore the

                                             11
modification of a mortgage or deed of trust comes within the statute of frauds under
section 1698, subdivision (a), which provides that “[a] contract in writing may be
modified by a contract in writing.” (Secrest, supra, 167 Cal.App.4th at p. 553.) Of note
here, the Secrest court concluded that as a general matter a forbearance agreement does
not create, renew or extend a deed of trust, while observing that the forbearance
agreement at issue “though not creating, renewing, or extending the note and deed of
trust, did modify them” by substituting a new monthly payment for the monthly payment
required under the note and altering the lender’s ability to exercise its right to foreclose.
(Ibid.) From Secrest, Restoration Homes concludes that a modification (whether or not it
is a forbearance) is not a renewal. Amici also rely on Secrest, but in a different way,
arguing that a loan modification is “more akin” to a forbearance agreement than to the
making of a loan. But this is all in the context of section 2922: Secrest says nothing
about section 2953. In any event, neither the Taniguchis nor Restoration Homes
characterize the Modification as a forbearance agreement in this appeal. To the contrary,
Restoration Homes implicitly distinguishes a modification from a forbearance, by
including as an undisputed fact in support of its motion for summary judgment that its
predecessors entered into a “loan modification” with the Taniguchis in January 2008 and
a “forbearance agreement” in April 2008, before the Modification at issue in this case.
       Finally, Restoration Homes and Amici contend that applying section 2953 to post-
default modifications of mortgages would likely have a chilling effect on the willingness
of lenders and servicers to modify loans, or at least would mean that the modifications
offered by lenders would be less favorable to borrowers. Restoration Homes further
contends that “[l]enders who are willing to provide borrowers with one final opportunity
to save their property want to incentivize the borrower not to default again, particularly
those with large arrearages at the time of the modification agreement. Lenders will be
disinclined to do so, however, to the event [sic] that upon further default they cannot be
[sic] readily collect the arrearages.” These contentions are not supported by any
evidence, and we do not find them convincing. In any event, nothing in the record
suggests that Restoration Homes would be disadvantaged by providing the Taniguchis

                                              12
the opportunity to reinstate their modified loan before taking steps to foreclose on the
note and deed of trust.
       In sum, we conclude that for purposes of section 2953, the Taniguchis’
Modification is appropriately viewed as the making or renewal of a loan secured by a
deed of trust. It is thus subject to the anti-waiver provisions of section 2953. Section
2924c gives the Taniguchis the opportunity to cure their precipitating default (that is, the
missed modified monthly payments) by making up those missed payments and paying the
associated late charges and fees, and in that way to avoid the consequences of default on
the modified loan.
       Thus, 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.
       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,
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.

                                               13
                                     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.

                                            14
                                              _________________________
                                              Miller, J.

We concur:

_________________________
Kline, P.J.

_________________________
Richman, J.

A152827, Taniguchi v. Restoration Homes LLC

                                       15
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

Wright, Finlay & Zak, LLP, Jonathan D. Fink, T. Robert Finlay for Amici California
Mortgage Association, California Mortgage Bankers Association and United Trustees
Association in support of Respondent

A152827, Taniguchi v. Restoration Homes, LLC

                                         16