Court Opinion

ID: 6496317
Source: CourtListenerOpinion
Date Created: 2022-06-29 18:01:40.862036+00
Date Added: 2024-06-11T08:48:55.621195
License: Public Domain

Filed 6/29/22 Khurana v. CitiMortgage CA1/3

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 ANITA KHURANA et al.,
           Plaintiffs and Appellants,
                                                                       A161003
 v.
 CITIMORTGAGE, INC.,                                                   (Contra Costa County
                                                                       Super. Ct. No. C17-00101)
           Defendant and Respondent.

         In January 2017, Anita and Mahesh Khurana (the Khuranas) sued
CitiMortgage, Inc. (Citi) for failing to appoint an adequate single point of
contact to handle their request for a modification of their home loan. The
Khuranas sought damages and an injunction preventing non-judicial
foreclosure pursuant to causes of action for negligence, unfair business
practices and violations of the Homeowner Bill of Rights, commonly referred
to as the HBOR. (Civ. Code, §§ 2920.5, 2923.4–2923.7, 2924, 2924.9–2924.12,
2924.15, 2924.17–2924.20; references to an undesignated statute are to the
Civil Code.) Almost three years later, in December 2019, the Khuranas
sought leave to file an amended complaint in order to allege a new claim for
fraud. The trial court denied the Khuranas leave to amend and granted Citi
summary judgment. We affirm.

                                                               1
              FACTUAL AND PROCEDURAL BACKGROUND
I. Undisputed Facts Pertaining to The Khuranas’ Loan
        In October 2006, the Khuranas obtained a $1,080,000 loan from Argent
Mortgage Company, which was evidenced by a promissory note and secured
by a deed of trust encumbering the Khuranas’ property in San Ramon (the
property). Citi became the mortgage servicer for the Khuranas’ loan in 2008
and continued in that role while the beneficial interest in the loan was
assigned several times. In January 2009, the Khuranas were granted a loan
modification, but they failed to make their modified loan payments after May
2009.
        In May 2015, a notice of default was recorded against the property,
which stated that the Khuranas’ loan was in arrears in the amount of
$546,287.94. At the time, the beneficiary of the deed of trust was U.S. Bank
National Association as trustee for Citigroup Mortgage Loan Trust Inc.
Asset-Backed Pass-Through certificates, Series 2007-AMC2 (Citigroup).
        In September 2015, the Khuranas filed a voluntary petition for Chapter
13 bankruptcy. With the assistance of counsel, they obtained relief from the
automatic bankruptcy stay and applied to Citi for another loan modification.
Citi denied that request in a letter dated April 26, 2016. The letter outlines
why the Khuranas did not qualify for the “Citi Supplemental Modification
Program” or the “Governments Home Affordable Modification Program,” and
notified them of their right to appeal within 30 days. Citi encouraged the
Khuranas to call Citi to discuss their options and secure assistance. In
October 2016, the bankruptcy court approved the Khuranas’ Chapter 13
Plan, which proposed surrendering their property to allow Citigroup and two
other secured creditors to exercise their rights against it as collateral.

                                        2
      In November 2016, Citigroup’s agent issued a notice of trustee’s sale,
which stated that the total unpaid balance due on the Khuranas’ loan was
$1,699,516.85, and that a sale of the property was scheduled for January 4,
2017. This notice was recorded on November 30, 2016.
      On December 23, 2016, Anita Khurana sent an email to Citi requesting
another loan modification. Citi employee John Blume sent an email response
that day, which included a list of documents the Khuranas were required to
submit to complete an application. Blume stated that unless the Khuranas’
“hardship” circumstances had changed, the outcome of another review would
be the same as the review that Citi completed in April. Blume also stated
that time was of the essence and the necessary documents had to be uploaded
and verified at least seven days before the pending foreclosure sale.
      On the afternoon of December 28, 2016, the Khuranas sent an email to
Citi, which attached documents the Khuranas submitted to support their
request for a loan modification. That day, Blume had two telephone
conversations with Anita Khurana. During the first conversation, Blume
confirmed receipt of the Khuranas’ documents and Anita stated that she
expected her income to increase in January. During the second conversation,
Blume advised Anita of additional information or corrections to the
documents that would need to be submitted by the Khuranas before a review
of their application could be completed. On December 30, Citi employee
Heather Smith called Anita Khurana and notified her that Citi was “unable”
to postpone the foreclosure sale because all documents required for a loan
modification review had not yet been submitted.
      On January 4, 2017, Anita Khurana filed a voluntary petition for
Chapter 7 bankruptcy. Anita completed the petition without an attorney and
filed it for the purpose of delaying a foreclosure sale. The trustee’s sale

                                        3
scheduled for January 4, 2017, did not take place. As best we can determine
from the record, the Khuranas have not cured the default of their loan and
they continue to reside at the property.
II. The Present Action
      A. The Complaint
      On January 11, 2017, the Khuranas filed a complaint against Citi,
which alleges the following facts: In August 2016, the Khuranas informed
their account representative at Citi, John Blume, that they wanted to “apply
for a foreclosure prevention alternative,” and that “they would be
experiencing increased income which they’d like considered as part of a loss
mitigation application.” In December, the Khuranas had not received an
application to fill out, so they contacted Blume again, who advised them that
their application materials had to be submitted and uploaded no later than
December 28.
      The Khuranas alleged that they “diligently obtained all applicable
items” and emailed them to Citi on the afternoon of December 28, 2016.
Later that day, Blume confirmed receipt of the application but also informed
the Khuranas that because the application was not received on December 27,
the foreclosure sale would not be postponed. During the call, Blume reviewed
the Khuranas’ “submission” with them and “[m]ost everything was correct,”
although they needed to make “very minimal amendments.” Then Blume
informed the Khuranas that he was leaving the office and would not look at
their materials. Nevertheless, the Khuranas corrected errors in their
documents and submitted them to Citi. They received emails from Citi on
December 30, 2016, and January 3, 2017, which “indicated” that the material
they had submitted was being reviewed. On January 3, they called and
emailed Blume but were unable to reach him. As the sale was not postponed,

                                       4
Anita Khurana “was forced to file bankruptcy to ensure her property was not
lost to foreclosure.”
      Purporting to state five distinct causes of action, the Khuranas alleged
that Citi: (1) violated the HBOR by failing to provide a single point of contact
to coordinate the Khuranas’ documents and assess them for a foreclosure
prevention alternative (§ 2923.7, subds. (b)(1)–(2)); (2) violated the HBOR by
failing to provide a single point of contact with the ability and authority to
stop foreclosure proceedings (§ 2923.7, subd. (b)(5)); (3) committed negligence
per se by failing to provide an adequate single point of contact as required by
the HBOR (§ 2923.7); (4) committed negligence per se by failing to maintain
policies and procedures reasonably designed to assist delinquent borrowers
and provide them with accurate information as required by 12 C.F.R. part
1024.40, a regulation promulgated under the Real Estate Settlement
Procedures Act (RESPA); and (5) violated the Unfair Competition Law by
violating the HBOR and RESPA (Bus. & Prof. Code, § 17200, et seq.).1
      B. Pertinent Trial Court Proceedings
      During the discovery phase of this action, Citi made two overtures
about potentially modifying the Khuranas’ loan. On May 10, 2018, Citi’s
counsel sent an email to the Khuranas’ counsel providing directions for
applying for a loan modification. Another email to counsel dated October 19,
2018, attached forms and provided additional information about
documentation that needed to be submitted to complete a loan modification

      1  The copy of the complaint that appears in the appellate record is
incomplete, providing us with only a partial description of the fourth cause of
action for negligence per se predicated on the RESPA, and no description of
the cause of action alleging a violation of Business & Professions Code section
17200. For our purposes, the trial court’s order granting Citi summary
judgment contains an adequate description of the fourth and fifth causes of
action.

                                        5
application. The Khuranas did not submit completed forms or any
documents in response to these offers.
      In August 2019, Citi filed a motion for summary judgment on the
grounds that there is no disputed issue of material fact in this case, each
cause of action alleged in the Khuranas’ complaint is without merit, and Citi
is entitled to judgment as a matter of law. The Khuranas filed their
opposition on November 21, and Citi filed its reply brief on November 27.
These filings were extensive, consuming several hundred pages of evidence
and argument.
      On December 2, 2019, the Khuranas filed a motion for leave to file a
first amended complaint. The Khuranas proposed to allege additional causes
of action for fraud and a violation of RESPA. They also sought permission to
allege new facts, “such as that [Citi] attempted to foreclose on [the
Khuranas’] property while [the Khuranas’] were in bankruptcy.” The
Khuranas argued that Citi would not suffer prejudice since the amended
complaint “would merely clarify allegations made in the original complaint
and address wrongdoing” that Citi admitted in its summary judgment
motion.
      Pursuant to the parties’ stipulation, the court agreed to hear the
pending motions for summary judgment and leave to file an amended
complaint on December 19, 2019. On December 18, the court issued tentative
rulings and, as neither ruling was contested, the court adopted them as
orders. With respect to the summary judgment motion, the court adopted its
tentative ruling to continue the matter, with instructions that the parties
submit supplemental briefing addressing the causes of action alleging
violations of the HBOR. With respect to the Khuranas’ motion for leave to
file an amended complaint, the court denied it “on two fully independent

                                         6
grounds.” First, the motion was untimely and prejudicial, as it was filed
without reasonable justification two weeks before the originally set trial date,
and second, the causes of action the Khuranas proposed to add lacked
substantive merit, the court found.
      The summary judgment hearing was continued to February 20, 2020.
At the conclusion of the hearing, the court adopted its tentative ruling
granting Citi’s motion. Findings were memorialized in an order filed on June
16, 2020, along with a judgment dismissing the action with prejudice.
      The court granted summary judgment as to the first two causes of
action alleging HBOR violations based on undisputed evidence that after the
Khuranas filed the present action, Citi afforded them another opportunity to
file a loan modification application and they failed to submit the required
paperwork. The court found that this evidence shows that the alleged HBOR
violations were cured or were no longer material, thus relieving the servicer
of potential liability. (Citing § 2924.12, subd. (c).)
      The court also found that the HBOR claims are barred by waiver or
estoppel, based on evidence of a fact pattern indicating that the Khuranas are
“simply drawing this litigation out so that they may stay in their home
indefinitely without making payments.” (Citing Gillies v. JPMorgan Chase
Bank, N.A. (2017) 7 Cal.App.5th 907, 909 [characterizing a delinquent
borrower’s “ ‘gaming [of] the system’ ” as an ”egregious abuse”].) As support
for this conclusion, the court found, among other things, that (1) the
Khuranas’ December 2016 submission did not include all the documents that
Blume requested from the Khuranas in his December 23, 2016 email,
(2) after this action was filed, the Khuranas refused to submit an updated
application despite two offers from Citi to consider such an application, and
(3) the Khuranas failed to dispute, on summary judgment, that their

                                         7
financial circumstances had not changed when they applied for another loan
modification in December 2016.
      The court granted summary judgment as to the third and fourth causes
of action for negligence per se, based on findings that (1) Citi did not owe the
Khuranas a duty of care in the foreclosure proceedings, and (2) a negligence
theory could not be used to make an “ ‘end run’ ” around HBOR’s safe harbor
provision, which allows lenders to avoid liability by curing violations prior to
foreclosure. (§ 2924.12, subd. (c).) The cause of action alleging negligence
based on the RESPA failed for the additional reason that the Khuranas
predicated their claim on a violation of 12 C.F.R. part 1024.40, which—unlike
some other RESPA regulations—does not give rise to a private right of action.
(Citing Moody v. PennyMac Loan Services, LLC (D.N.H. March 27, 2018)
2018 U.S.Dist. Lexis 55322, *26–*27 (Moody).) Finally, the court found that
the fifth cause of action for violating the unfair competition law failed
because it was derivative of other claims as to which summary judgment was
granted.
                                DISCUSSION
I. The Grant of Summary Judgment
      We begin with the Khuranas’ claim that the judgment must be reversed
because Citi is not entitled to summary adjudication of any cause of action
alleged in the complaint. Summary judgment may be granted “if all the
papers submitted show that there is no triable issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.”
(Code Civ. Proc., § 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25
Cal.4th 826, 850.) Our standard of review is de novo. (Ong v. Fire Ins.
Exchange (2015) 235 Cal.App.4th 901, 906.)

                                        8
      A. The HBOR Claims
      In their complaint, the Khuranas allege that Citi violated the HBOR by
appointing Blume as its single point of contact because he (1) failed to
properly evaluate their loan modification application, and (2) lacked the
ability and/or authority to “stop foreclosure proceedings when necessary.” On
appeal, the Khuranas contend there is a material factual dispute as to
whether Citi is liable for these alleged violations. We disagree.
            1. Statutory Overview
      The HBOR “was enacted ‘to ensure that, as part of the nonjudicial
foreclosure process, borrowers are considered for, and have a meaningful
opportunity to obtain, available loss mitigation options, if any, offered by or
through the borrower’s mortgage servicer, such as loan modifications or other
alternatives to foreclosure.’ (§ 2923.4, subd. (a).)” (Valbuena v. Ocwen Loan
Servicing, LLC (2015) 237 Cal.App.4th 1267, 1272; see also Schmidt v.
Citibank, N.A. (2018) 28 Cal.App.5th 1109, 1114–1115 (Schmidt).)
      “Among other things, the HBOR requires mortgage servicers to contact
(or diligently attempt to contact) the borrower in person or by phone before
recording a notice of default, in order to assess the borrower’s financial
situation and explore options to prevent foreclosure. (§ 2923.55, subds. (a),
(b)(2) & (f).) . . . . If a borrower requests a foreclosure-prevention alternative,
the servicer must promptly establish a single point of contact and provide the
borrower a direct means of communication with that point of contact.
(§ 2923.7, subd. (a).) The HBOR also prohibits mortgage servicers from
proceeding to the next step in the foreclosure process while a borrower’s
complete application for a loan modification is pending (§ 2923.6, subds. (c)
& (e)), a practice commonly known as ‘ “dual tracking.” ’ ” (Billesbach v.

                                         9
Specialized Loan Servicing LLC (2021) 63 Cal.App.5th 830, 844–845
(Billesbach).)
      However, when the borrower has submitted multiple loan modification
applications, the mortgagee’s obligation to re-evaluate a new application is
different. In this situation, section 2923.6, subdivision (g) states: “In order to
minimize the risk of borrowers submitting multiple applications for first lien
loan modifications for the purpose of delay, the mortgage servicer shall not be
obligated to evaluate applications from borrowers who have been evaluated
or afforded a fair opportunity to be evaluated consistent with the
requirements of this section, unless there has been a material change in the
borrower’s financial circumstances since the date of the borrower’s previous
application and that change is documented by the borrower and submitted to
the mortgage servicer.”
      The “ ‘HBOR provides for injunctive relief for statutory violations that
occur prior to foreclosure [citation], and monetary damages when the
borrower seeks relief for violations after the foreclosure sale has occurred.’ ”
(Schmidt, supra, 28 Cal.App.5th at p. 1115; see § 2924.12, subds. (a) & (b).)
Importantly, it also contains a safe harbor provision to encourage the curing
of violations. (Schmidt, at p. 1115; Billesbach, supra, 63 Cal.App.5th at
p. 845.) Under section 2924.12, subdivision (c), “a mortgage servicer . . . shall
not be liable for any violation that it has corrected and remedied prior to the
recordation of the trustee’s deed upon sale, or that has been corrected and
remedied by third parties working on its behalf prior to the recordation of the
trustee’s deed upon sale.”
            2. Analysis
      The Khuranas’ primary contention is that summary adjudication of the
HBOR claims is precluded because of an unresolved factual dispute regarding

                                       10
whether the December 2016 loan modification application was complete.
They argue further that there are other “serious” factual disputes, such as
whether or not their financial situation improved after their previous request
for a loan modification was denied. Citi counters that the Khuranas
produced no actual evidence to raise a triable issue as to these material facts.
Citi also contends that even if there is evidence to support the alleged HBOR
violations, the trial court correctly determined that the safe harbor provision
applies. We limit our discussion to this last point, which is dispositive.2
      The HBOR violations alleged in the Khuranas’ complaint are limited to
the period between December 2016 and January 2017. Even if the alleged
violations occurred, undisputed evidence establishes that Citi is not liable for
them. First, there is no dispute that a foreclosure sale has not been held,
which means that the Khuranas’ potential remedy is limited to “injunctive
relief to enjoin a material violation” of section 2923.7 (§ 2924.12, subd. (a)(1)),
with any such injunction to remain in place only until the “material violation
has been corrected and remedied” (id. at subd. (a)(2)). Second, the summary
judgment evidence establishes that Citi offered the Khuranas another
opportunity for a loan modification in 2018 and that the Khuranas rejected
that offer, failing to submit an application or any documents required to
support such an application. These facts demonstrate that Citi corrected
alleged violations pertaining to the December 2016 application. Under
section 2024.12, subdivision (c), a loan servicer “shall not be liable for any

      2  Citi makes the additional argument that the Khuranas were not
“ ‘borrowers’ ” within the meaning of the HBOR when they requested a loan
modification in December 2016 because, by that time, they had surrendered
the property in their Chapter 13 bankruptcy case. (Citing § 2920.5,
subd. (c)(2).) We offer no opinion about this theory, which the trial court
rejected.

                                        11
violation that it has corrected and remedied prior to the recordation of the
trustee’s deed upon sale.” Thus, there is no triable issue regarding Citi’s
nonliability for the alleged HBOR violations.
      In their opening brief, the Khuranas contend that Citi’s offer to
consider another loan modification does not constitute a remedial measure
within the meaning of section 2924.12, subdivision (c) because that offer was
made almost two years after the notice of trustee’s sale was recorded in
November 2016. We reject this argument, which is based on a misreading of
the HBOR’s safe harbor provision; to avoid liability, the loan servicer must
remedy and correct the alleged violation before “the trustee’s deed upon sale”
is recorded (§ 2924.12, subd. (c)), not before the notice of sale is recorded.
      In their reply brief, the Khuranas abandon their erroneous construction
of section 2924.12 and argue instead that there is a triable issue of fact as to
whether the safe harbor provision applies. According to this argument,
evidence that Citi offered to conduct another review is insufficient proof that
Citi actually remedied harm caused by HBOR violations that allegedly
occurred two years earlier. The Khuranas forfeited this new argument,
which was not raised in the trial court or in their opening brief on appeal.
(High Sierra Rural Alliance v. County of Plumas (2018) 29 Cal.App.5th 102,
111–112, fn. 2 [“ ‘ “ ‘points raised in the reply brief for the first time will not
be considered, unless good reason is shown for failure to present them
before’ ” ’ ”]; Canales v. Wells Fargo Bank, N.A. (2018) 23 Cal.App.5th 1262,
1270, fn. 11 [issue that was “not raised in the opening brief nor before the
trial court” was “waived and forfeited”].)
      Even on its merits, the Khuranas’ forfeited argument fails to persuade.
According to this new theory, “if” the Khuranas’ financial situation
diminished after the alleged HBOR violations, and that change in

                                         12
circumstance can be attributed to the fact that Citi failed to conduct a review
in 2016, then the offer of a review in 2018 would not remedy the harm caused
by the HBOR violations alleged in the complaint. The Khuranas cite no
evidence in the record to create a triable issue of fact as to this speculative
theory. Nor do they cite legal authority for their claim that a change in their
financial situation could vitiate the HBOR’s safe harbor provision. Because a
foreclosure sale never took place, the Khuranas’ only potential remedy under
the HBOR is an injunction of limited duration, for the time required to
correct the violation(s). (§ 2924.12, subd (a)(2).) The only violations alleged
are that Blume mishandled the 2016 loan modification application.
Undisputed evidence establishes that Citi remedied the alleged violations by
offering the Khuranas another opportunity to submit a loan modification
application in 2018.
      B. Negligence Per Se
      The Khuranas allege that Citi committed negligence per se by violating
the HBOR and a RESPA regulation. The grant of summary judgment as to
these claims is based on three findings: (1) Citi did not owe the Khuranas a
duty of care, (2) Citi is not liable for violating the HBOR, and (3) 12 C.F.R.
part 1240.40 does not give rise to a private right of action. The Khuranas
challenge these rulings but to no avail.
      A duty of care and breach of that duty are essential elements of a claim
for negligence. (Lueras v. BAC Home Loans Servicing, LP (2013) 221
Cal.App.4th 49, 62 [“To state a cause of action for negligence, a plaintiff must
allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant
breached that duty, and (3) the breach proximately caused the plaintiff's
damages or injuries”].) As a general rule, “ ‘a financial institution owes no
duty of care to a borrower when the institution’s involvement in the loan

                                        13
transaction does not exceed the scope of its conventional role as a mere lender
of money.’ ” (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 740.)
When the trial court granted summary judgment in this case, there was a
split of authority as to whether this general rule extends to a bank’s
evaluation of a loan modification application. (See Sheen v. Wells Fargo
Bank, N.A. (2022) 12 Cal.5th 905, 915, 919 (Sheen).) While the present
appeal was pending, our Supreme Court resolved this disagreement by
holding that “when a borrower requests a loan modification, a lender owes no
tort duty sounding in general negligence principles to ‘process, review and
respond carefully and completely to’ the borrower’s application.” (Sheen, at
p. 948.) Thus, the trial court did not err by rejecting the Khuranas’ argument
that Citi owed them a common law duty of care.
      In their complaint, the Khuranas predicated their negligence claims on
alleged statutory duties, invoking the doctrine of negligence per se. “ ‘Under
the doctrine of negligence per se, the plaintiff “borrows” statutes to prove
duty of care and standard of care.’ ” (David v. Hernandez (2014) 226
Cal.App.4th 578, 584.) The Sheen court found that neither the HBOR nor
any other federal statute or regulation imposes a general duty of care on
lenders with respect to the processing of a loan modification application.
(Sheen, supra, 12 Cal.5th at p. 921.) However, the court also made a point of
the fact that the borrower in Sheen had not alleged that his lender violated
any specific provision of the HBOR, or any other statute or regulation.
(Sheen, at p. 921.) Arguably, Sheen does not foreclose the Khuranas from
invoking the doctrine of negligence per se to establish that Citi had a duty of
care to provide a competent and qualified single point of contact to process
their loan application. However, the negligence per se doctrine does not
relieve a plaintiff of establishing the other elements of a claim for negligence.

                                       14
(David, at p. 584.) In this case, the trial court found that any HBOR violation
resulting from Blume’s processing of the 2016 loan modification application
(1) was not material and (2) did not give rise to liability because (3) the
alleged violations were corrected and remedied in 2018. As discussed, these
findings are supported by undisputed evidence produced during the summary
judgment proceedings. Thus, summary judgment was properly granted as to
the negligence per se cause of action that is premised on an alleged HBOR
violation.
      The trial court also provided a valid reason for granting summary
judgment as to the negligence per se claim premised on an alleged RESPA
violation. The Khuranas rely only and specifically on 12 C.F.R. part 1024.40,
which requires a loan servicer to maintain policies and procedures affording
continuity of contact with a delinquent borrower in order to ensure that the
borrower receives accurate information about available loss mitigation
options. The Khuranas cannot borrow this regulation to prove that Citi owed
them a duty of care because, as the trial court found, section 1024.40 does not
create a private right of action. (Moody, supra, 2018 U.S.Dist. Lexis 55322,
*26–*27 [collecting cases]; see also Muathe v. Wells Fargo Bank, N.A. (2020)
807 Fed.Appx. 855, 859–860.) Beyond that, the factual allegations in the
complaint appear wholly unrelated to the RESPA regulation that the
Khuranas purport to invoke. The Khuranas do not allege that Citi failed to
maintain proper policies and procedures, but rather that Blume mishandled
the specific loan modification application they submitted in December 2016.
      C. The Unfair Competition Law
      In their final cause of action, the Khuranas allege that Citi violated
Business and Professions Code section 17200, which prohibits “any unlawful,
unfair or fraudulent business act or practice . . .” On appeal, the Khuranas

                                       15
contend there are triable issues as to whether Citi violated the “unlawful”
prong of this unfair competition law. However, they also concede that their
section 17200 claim is derivative of other causes of action alleging violations
of the HBOR and RESPA. We have already explained why those predicate
claims fail. For the same reasons, we affirm the summary judgment ruling
as to the section 17200 claim.
II. Denial of Leave to Amend
      The Khuranas seek reversal of the judgment on the independent
ground that the trial court abused its discretion by denying them leave to
amend their complaint. This claim fails for many reasons.
      Code of Civil Procedure section 473 provides that the trial court may
“in its discretion, after notice to the adverse party, allow, upon any terms as
may be just, an amendment to any pleading . . .” (Code Civ. Proc., § 473,
subd. (a)(1).) Because this broad discretion is conferred on the trial court and
not the reviewing court, an order granting or denying leave to amend will not
be “ ‘ “disturbed on appeal absent a clear showing of abuse.” ’ ” (Branick v.
Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) Under this
standard, “ ‘ “even if the reviewing court might have ruled otherwise in the
first instance, the trial court’s order will yet not be reversed unless, as a
matter of law, it is not supported by the record.” ’ ” (Ibid.)
      In the present case, the Khuranas sought leave to amend their
complaint to add two new causes of action, one alleging that Citi violated 12
C.F.R. part 1024.40, and another alleging a tort claim for fraudulent
misrepresentation. As discussed, the Khuranas’ complaint does not allege
facts to prove that Citi violated 12 C.F.R. part 1024.40. When they sought
leave to amend, the Khuranas did not propose any additional facts alleging

                                        16
that part 1024.40 was violated in this case.3 And, in any event, this
regulation does not create a private right of action. (Moody, supra, 2018
U.S.Dist. Lexis 5532.) Thus, we focus our review on the denial of the
Khuranas’ request for leave to allege a claim for fraudulent
misrepresentation. The trial court gave two reasons for denying leave to
amend: (1) permitting the Khuranas to allege a new claim against Citi at
such a late stage in the proceeding would have prejudiced Citi, and the
Khuranas provided no valid explanation for their delay; and (2) the proposed
amendments do not state a new valid cause of action against Citi. Separately
or together, these reasons support the denial of leave to amend.
      First, “[u]nwarranted delay, without more can be a valid reason for
denying a motion to amend.” (Englert v. IVAC Corp. (1979) 92 Cal.App.3d
178, 190.) In the present case, a lawsuit that the Khuranas filed in order to
delay a foreclosure had been pending for almost three years when they
sought leave to allege a new cause of action for fraudulent misrepresentation.
At the time, discovery was complete, Citi’s motion for summary judgment had
been fully briefed, and the case was set for trial. Fraud was an entirely new
theory of liability and the Khuranas did not meet their burden of explaining
why they waited so long to allege it.4 A “long unexcused delay,” as well as the

      3  A motion to amend “must” include a copy of the proposed amendment
and a statement of allegations that are proposed to be added and/or deleted.
(Cal. Rules of Court, rule 3.1324(a).) Although it appears that the Khuranas
filed a proposed first amended complaint along with their motion, we do not
find that document in the appellate record. We do have a statement of the
factual allegations that the Khuranas proposed to add, which was included in
their motion papers.
      4  A motion to amend must be supported by a declaration specifying the
“effect” of the amendment, why the amendment is “necessary and proper,”
when “facts giving rise to the amended allegations were discovered,” and
“reasons why the request for amendment was not made earlier.” (Cal. Rules

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interjection of a new issue requiring further discovery are valid reasons for
denying leave to amend. (Green v. Rancho Santa Margarita Mortgage Co.
(1994) 28 Cal.App.4th 686, 692; Rainer v. Community Memorial Hosp. (1971)
18 Cal.App.3d 240, 258.) Indeed, when a court would have to continue a trial
date to avoid prejudicing the opposing party, “refusal of leave to amend
cannot be an abuse of discretion.” (Magpali v. Farmers Group, Inc. (1996) 48
Cal.App.4th 471, 488.)
      Second, denial of leave to amend is proper when the record shows that
the proposed new cause of action lacks merit. (Oakland Raiders v. National
Football League (2005) 131 Cal.App.4th 621, 652 [collecting cases].) In the
present case, the Khuranas proposed to allege that Citi is liable to them for
fraud because its employee (Blume) made a false representation that Citi
“could and would foreclose” on the Khuranas’ property despite the fact that
the Khuranas “were in bankruptcy and were, therefore, protected from
foreclosure.” Citi’s opposition to the motion to amend outlined numerous
defects in this proposed new cause of action, including that: the factual
allegations that the Khuranas proposed to allege are not sufficient to prove
all the elements of fraudulent misrepresentation; the proposed cause of action
was a sham, as it contradicted allegations in the original complaint
acknowledging that the court had granted relief from the automatic
bankruptcy stay in the Khuranas’ Chapter 13 case; a fraud claim was time
barred; and judicially noticeable facts establish that the alleged
representation is not false. The trial court credited all of these arguments. It
also found that the alleged misrepresentation is an opinion, not an actionable
representation of a material fact. (See Cansino v. Bank of America (2014)

of Court, rule 3.1324(b).) The Khuranas’ cursory declaration does not satisfy
these requirements.

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224 Cal.App.4th 1462, 1469–1470 [“Statements or predictions regarding
future events are deemed to be mere opinions which are not actionable”].)
      In their opening brief, the Khuranas fail to address in any meaningful
way the substantive reasons that the court gave for denying them leave to
amend. For example, the Khuranas’ brief states: “Appellants were denied
. . . leave to amend despite new facts to support a new cause of action.” This
assertion is not supported by any factual or legal argument. We are not
“required to consider alleged error where the appellant merely complains of it
without pertinent argument.” (Berger v. Godden (1985) 163 Cal.App.3d 1113,
1119.) Points that the Khuranas raise in their brief but fail to support with
argument or authority are “deemed to be without foundation,” requiring no
discussion. (Ibid.; Atchley v. City of Fresno (1984) 151 Cal.App.3d 635, 647.)
The Khuranas also posit that granting their motion would not have caused
Citi any prejudice, but their own arguments prove otherwise. They concede,
for example, that Citi’s summary judgment motion could have been “rendered
moot” if leave to amend had been granted.
      The Khuranas’ contend that the trial court “unjustifiably ignored” the
policy to liberally permit amendments. “Courts must apply a policy of
liberality in permitting amendments at any stage of the proceeding, including
during trial, when no prejudice to the opposing party is shown. [Citation.]
‘However, “ ‘even if a good amendment is proposed in proper form,
unwarranted delay in presenting it may—of itself—be a valid reason for
denial.’ ” ’ ” (P&D Consultants, Inc. v. City of Carlsbad (2010) 190
Cal.App.4th 1332, 1345.) Here, the Khuranas failed to provide any valid
explanation for the unwarranted delay in asserting a new theory of fraud so
late in the proceeding.

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         In their appellants’ reply brief, the Khuranas argue the trial court
abused its discretion by denying them leave to amend despite what they
assert was a proposed cause of action for negligent misrepresentation. The
proposed new cause of action, the Khuranas now argue, was ostensibly based
on summary judgment evidence establishing that Blume misrepresented “a
critical application submission deadline on the eve of a scheduled foreclosure
sale.” This new argument may not be properly raised in a reply brief.
(United Grand Corp. v. Malibu Hillbillies, LLC (2019) 36 Cal.App.5th 142,
158.) Further, the Khuranas’ trial court motion did not propose to add a
cause for negligent misrepresentation of a deadline; they sought leave to
amend to allege a claim for intentional misrepresentation of the right to
foreclose. Finally, and in any event, the Khuranas fail to show that they
have a valid claim for negligent misrepresentation, thus reinforcing our
conclusion that the trial court did not abuse its discretion by denying them
leave to amend.
                                          DISPOSITION
         The judgment is affirmed. Costs are awarded to respondent.

                                                   TUCHER, P.J.

WE CONCUR:

FUJISAKI, J.
PETROU, J.

Khurana v. CitiMortgage, Inc. (A161003)

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