Court Opinion

ID: 2652718
Source: CourtListenerOpinion
Date Created: 2014-02-08 00:43:20.269182+00
Date Added: 2024-06-11T12:32:04.792641
License: Public Domain

Filed 2/7/14 Baldwin v. Bank of America CA2/4

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION FOUR

MARVIN BALDWIN,                                                      B243789

                     Plaintiff and Appellant,                        (Los Angeles County
                                                                     Super. Ct. No. BC452085)
         v.

BANK OF AMERICA, N.A.,

                     Defendant and Respondent.

         APPEAL from a judgment of the Superior Court of Los Angeles County,
Malcolm Mackey, Judge. Affirmed.
         Law Offices of Lenore Albert and Lenore L. Albert for Plaintiff and Appellant.
         Reed Smith, David J. de Jesus, Peter Kennedy, and Michael Gerst; Severson &
Werson, Mark Kenney and Robert Gandy for Defendant and Respondent.
       Marvin Baldwin appeals from the dismissal of this action stemming from the sale
of his home at a foreclosure auction. He contends the trial court erred in sustaining a
demurrer by defendant and respondent Bank of America, N.A. (the Bank) to his second
amended complaint without leave to amend. He argues that the cause of action for
breach of contract should be reinstated because the Bank lulled him into inaction. He
also argues that he adequately alleged causes of action for fraud and unfair business
practices under Business and Professions Code section 17200. Baldwin contends the trial
court should have given him leave to amend, and should not have stricken the third
amended complaint filed before the hearing on the demurrer to the second amended
complaint.
       Baldwin concedes that the trial court denied leave to file a third amended
complaint. We conclude that the trial court properly exercised its authority to correct the
order granting leave to file a third amended complaint nunc pro tunc so that it conformed
to the court’s oral ruling denying leave to amend. Baldwin cannot state a cause of action
on any theory advanced, and cannot amend to state a viable cause of action. We affirm
the judgment of dismissal.

                    FACTUAL AND PROCEDURAL SUMMARY
       We take our summary from the allegations of the second amended complaint, the
charging pleading. Baldwin purchased a triplex in Long Beach in July 2006, by grant
deed. In March 2007, he borrowed $584,000 from J & R Lending, secured by a note and
deed of trust to finance purchase of another triplex in Long Beach. Mortgage Electronic
Registration Systems, Inc. (MERS) was the beneficiary on the deed of trust. The Bank
identifies itself as successor by merger to BAC Home Loans Servicing, L.P.
       On August 3, 2009, Jill Balentine, Senior Vice President Home Retention Division
of BAC Home Loans Servicing, L.P.1, wrote to Baldwin and his wife. They were

       1
       The letter identifies this entity as a subsidiary of Bank of America that serviced
Baldwin’s mortgage.

                                             2
informed that their mortgage recently had been evaluated. The letter stated: “We are
pleased to confirm that you qualify for the Fannie Mae HomeSaver Forbearance
Program.” The letter explained that Baldwin was “eligible for a reduced mortgage
payment for up to six months. [¶] Under the HomeSaver Forbearance Program, we are
working with Fannie Mae, a government-sponsored enterprise, to reduce your mortgage
payment by up to 50% for up to 6 months while we work with you to find a long-term
solution. This is not a permanent payment reduction, but it will allow you to stay in your
home as we work together to find a solution.” (Italics added.) The Letter instructed
Baldwin on how to sign up for the forbearance program and to make the first monthly
payment. The letter concluded: “We want to help you.” Contact information for
questions was provided, and Baldwin was told that he might be contacted by a
representative of the Bank to discuss the program. The letter ended: “Please take
advantage of the opportunity to start a dialogue and get the help you need.”
      In 2009, Fannie Mae instituted the HomeSaver Forbearance Program, which was
available to those who did not qualify for [Home Affordable Mortgage Program] HAMP
loan modifications.”2 Baldwin’s second amended complaint alleged that the forbearance
program was available to investors on second homes, leading to loan modifications of

      2  “Fannie Mae’s Announcement 09–05R, issued in April 2009, stated:
“HomeSaver Forbearance is a new loss mitigation option available to borrowers [who]
are either in default or for whom default is imminent and who do not qualify for the
HAMP. A servicer should offer a HomeSaver Forbearance if such borrowers have a
willingness and ability to make reduced monthly payments of at least one-half of their
contractual monthly payment. The plan should reduce the borrower’s payments to an
amount the borrower can afford, but no less than 50 percent of the borrower’s contractual
monthly payment, including taxes and insurance and any other escrow items at the time
the forbearance is implemented. During the six month period of forbearance, the servicer
should work with the borrower to identify the feasibility of, and implement, a more
permanent foreclosure prevention alternative. The servicer should evaluate and identify a
permanent solution during the first three months of the forbearance period and should
implement the alternative by the end of the sixth month.” (Announcement 09–05R, supra,
at pp. 31–32  [as of Oct.
31, 2013], italics added.) We grant Baldwin’s request that we take judicial notice of this
announcement.

                                            3
30 percent to 50 percent less than the current mortgage payment for those who made their
payments under the program.
       Attached to the August 3 letter was the HomeSaver Payment Forbearance
Agreement (Forbearance Agreement), which Baldwin alleged he accepted. Under that
agreement, Baldwin represented that either his loan was in default, or that he believed he
would be in default in the near future, and that he did not have access to sufficient liquid
assets to make the scheduled monthly mortgage payments at present or in the near future.
He also was required to make representations about the veracity of information
concerning his financial status. Baldwin agreed to make reduced monthly payments of
$2,429.93, beginning on September 1, 2009 and ending on February 1, 2010. During this
six-month “deferral period” the Bank agreed to suspend any scheduled foreclosure sale,
provided Baldwin met his obligations under the Forbearance Agreement.
       Paragraph 2C of the Forbearance Agreement stated that the Bank would review
the loan during the deferral period to determine whether additional default resolution
assistance could be offered to Baldwin. Several possible courses were outlined. Under
one scenario, Baldwin would be required to recommence regularly scheduled payments
and make additional payment(s) on terms to be determined by the Bank until all past due
amounts owed under the loan documents were paid in full. Or Baldwin would be
required to reinstate the loan in full. Alternatively, the Bank would offer to modify the
loan or offer some other form of payment assistance or alternative to foreclosure.
Finally, “if no feasible alternative [could] be identified,” the Bank reserved its right to
commence or continue foreclosure proceedings or exercise other rights and remedies
provided under the loan documents.
       Baldwin and his wife executed the Forbearance Agreement on August 26, 2009.
The second amended complaint alleged that he made the monthly payments from
September through December 2009, until the HomeSaver Forbearance Program was
terminated by Fannie Mae in January 2010, and replaced with the Payment Reduction
Program. He alleged that at the end of the deferral period, he “was not offered one of the

                                              4
options placed in the [Forbearance Agreement in paragraph 2C] or transferred into the
new program.”
       On August 9, 2010, a notice of default was recorded against Baldwin’s property,
which was in arrears in the amount of $45,090.87 as of August 6, 2010. The notice
warned that if the property was in foreclosure, it might be sold without court action.
Baldwin alleged that this notice was not mailed to him as required by Code of Civil
Procedure section 2924, subdivisions (b)(1) and (4). The same day, MERS substituted
Recontrust Company as trustee under the deed of trust. All beneficial interest under the
deed of trust was conveyed to BAC Home Loans Servicing, LP, FKA Countrywide
Home Loans Servicing LP, which began servicing the loan. Baldwin alleged that he
offered to reinstate the terms of the previous financial agreement or similar terms so all
amounts due could be paid and the default cured.
       Baldwin alleged that in October 2010, the Bank issued a press release announcing
a moratorium on foreclosure sales while it investigated claims of irregularities in its
foreclosure procedures. It also alleged that the Bank had announced that it would
suspend foreclosures during the holidays in 2010. Baldwin alleged that he heard these
statements, believed them to be true, and in justifiable reliance did not seek bankruptcy
protection or other judicial relief to stop the sale of his home during this period of time.
Baldwin’s home was sold at a foreclosure auction on December 8, 2010.
       Baldwin filed his first complaint in propria persona against the Bank on December
28, 2010. He alleged breach of contract, fraud, conspiracy, cancellation of the trustee’s
deed upon sale, and declaratory/injunctive relief. After obtaining counsel, on April 19,
2011, Baldwin filed a first amended complaint alleging breach of contract, breach of
contract on a third party beneficiary theory, fraud/misrepresentation of a material fact,
and unfair practices under Business and Professions Code section 17200. The court
sustained defendants’ demurrer with leave to amend on November 29, 2011.
       The second amended complaint was filed December 19, 2011, alleging causes of
action for breach of contract (promissory estoppel), breach of contract (third party
beneficiary), fraud, and unlawful acts in violation of Business and Professions Code

                                              5
section 17200. In February 2012, the parties stipulated to continue the trial date, and
agreed Baldwin would have up to March 20, 2012 to amend the second amended
complaint. The Bank was to be allowed to respond to the newly amended (third
amended) complaint. The Bank and Baldwin brought a joint ex parte application to
continue the trial and all related dates pursuant to the stipulation. The proposed order
included language which would have granted Baldwin leave to amend the complaint, and
the Bank leave to respond. On February 9, 2012, the court granted the application, but its
minute order did not state that Baldwin was given leave to file a third amended
complaint. On June 8, 2012, the Bank demurred to the second amended complaint.
       On June 20, 2012, counsel for Baldwin filed an ex parte application for leave to
amend. She also asked the court to take the demurrer to the second amended complaint
off calendar. In her supporting declaration, counsel reminded the court that the parties
previously had stipulated to the amendment. She explained that the omission of leave to
amend from the February 9 order was discovered when she “went to amend the
complaint.” A copy of the proposed third amended class action complaint (mislabeled as
second amended class action complaint) was attached to the ex parte application. On
June 20, 2012, the trial court granted the ex parte application for leave to amend the
pleadings, but left the demurrer to the second amended complaint on calendar.
       On July 10, 2012, Baldwin filed a third amended class action complaint. At the
hearing on the demurrer to the second amended complaint on July 12, 2012, the court
indicated its tentative was to sustain it without leave to amend as to all causes of action.
Counsel for Baldwin informed the court that this ruling created a procedural irregularity
because the second amended complaint was superseded and rendered moot when the
third amended complaint was filed with leave of court. The court indicated that it was
unaware of the third amended class action complaint. The trial court addressed the merits
of the demurrer to the second amended complaint and sustained it without leave to
amend. It ordered the third amended complaint filed July 10, 2012 be stricken. The
action was dismissed with prejudice. Baldwin filed a timely appeal.

                                              6
                                      DISCUSSION
                                             I
       The trial court ruled on the demurrer to the second amended complaint after the
third amended complaint had been filed, and then struck the third amended complaint.
We sent counsel a letter pursuant to Government Code section 68081 asking that they
address whether the trial court was authorized to do so.3 The original deadline for
responses to our letter was October 28, 2013. On October 24, 2013, counsel for the Bank
requested three additional days to respond because he was engaged on another matter
out-of-state. We granted the request, giving each side until Thursday, October 31 to file
their responses.
       On Monday, October 28, the Bank filed an ex parte application in the trial court
seeking a nunc pro tunc order changing the June 20, 2012 ruling from one that granted
leave to amend to one that denied leave to amend. The June 20, 2012 hearing was not
reported. The application was accompanied by a declaration from counsel for the Bank
with an account of the June 20, 2012 hearing. The declaration states that while the court
initially indicated leave to amend would be granted, after argument it reversed its
thinking and denied leave to amend. The Bank characterizes the change as correcting a
clerical error and that the minute order of the June 20, 2012 hearing granting leave to
amend instead should have stated that leave to amend was denied. At oral argument, and
in her opening brief on appeal, counsel for Baldwin concedes that the trial court orally
denied leave to file the third amended complaint, and that the ensuing minute order
erroneously stated that leave to amend was granted.
       Under these circumstances, we conclude the court acted within its authority to
correct the minute order nunc pro tunc even though the Bank had not previously raised
the claim that leave to amend actually was denied at the June 20, 2012 hearing.

       3 We grant Bank’s motion to augment the record on appeal with the ex parte
application and nunc pro tunc order in order to fully examine the course taken by the
Bank.

                                             7
The established rule is that a court may correct a clerical error, as distinguished from a
judicial error, which appears on the face of a decree by a nunc pro tunc order. (In re
Marriage of Padgett (2009) 172 Cal.App.4th 830, 852 (Padgett), quoting Estate of
Eckstrom (1960) 54 Cal.2d 540, 544 (Eckstrom).) In Eckstrom the Supreme Court
emphasized that a court cannot change a final order, even though made in error, ‘““if in
fact the order made was that intended to be made.”’” (Ibid.) The Eckstrom court
identified the question before the court on a hearing for a motion for a nunc pro tunc
order as what order was in fact made at the original time by the trial judge. (Ibid.) “It is
only when the form of the judgment fails to coincide with the substance thereof, as
intended at the time of the rendition of the judgment, that it can be reached by a
corrective nunc pro tunc order” [Citations.]’ (Hamilton v. Laine [(1997)] 57
Cal.App.4th [885,] 890; accord, APRI Ins. Co. v. Superior Court (1999) 76 Cal.App.4th
176, 185.)” (Padgett, at p. 852.) Since both sides agree the court’s oral pronouncement
was to deny leave to amend, a clerical error in the minute order stating otherwise is
demonstrated.
       The trial court was authorized to correct the clerical error in the minute order of
June 20, 2012 to state that leave to file the third amended complaint was denied. The
demurrer to the second amended complaint was properly before the trial court and it did
not exceed its jurisdiction in striking the unauthorized third amended complaint. We turn
to the substantive issues raised by the demurrer.
                                             II
       “A demurrer tests the legal sufficiency of the factual allegations in a complaint.
We independently review the sustaining of a demurrer and determine de novo whether
the complaint alleges facts sufficient to state a cause of action or discloses a complete
defense. [Citation.] We assume the truth of the properly pleaded factual allegations,
facts that reasonably can be inferred from those expressly pleaded and matters of which
judicial notice has been taken. [Citation.] We construe the pleading in a reasonable
manner and read the allegations in context. [Citation.] We must affirm the judgment if
the sustaining of a general demurrer was proper on any of the grounds stated in the

                                              8
demurrer, regardless of the trial court’s stated reasons. [Citation.]” (Siliga v. Mortgage
Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 81.) “It is an abuse of
discretion to sustain a demurrer without leave to amend if there is a reasonable
probability that the defect can be cured by amendment. [Citation.] The burden is on the
plaintiff to demonstrate how the complaint can be amended to state a valid cause of
action. [Citation.] The plaintiff can make that showing for the first time on appeal.
[Citation.]” (Ibid.)
                                              III
       Baldwin argues the trial court erred in sustaining the demurrer to the breach of
contract cause of action. He also cites language in the Forbearance Agreement in which
the Bank promised that it “would work together” with Baldwin to find a “long term
solution.”
       The gravamen of the cause of action for breach of contract is that the Bank
breached its promise to review Baldwin’s loan to determine whether any additional
default assistance could be offered to him after the deferral period. Paragraph 2C of the
Forbearance Agreement states: “During the Deferral Period, Servicer will review my
Loan to determine whether additional default resolution assistance can be offered to me.
At the end of the Deferral Period either (1) I will be required to recommence my
regularly scheduled payments and to make additional payment(s), on terms to be
determined by Servicer, until all past due amounts owed under the Loan documents have
been paid in full, (2) I will be required to reinstate my Loan in full, (3) Servicer will offer
to modify my Loan[,] (4) Servicer will offer me some other form of payment assistance
or alternative to foreclosure, on terms to be determined solely by Servicer . . . , or (5) if
no feasible alternative can be identified, Servicer may commence or continue foreclosure
proceedings or exercise other rights and remedies provided Servicer under the Loan
Documents.”
       The charging pleading alleged that Baldwin relied on this promise by performing
under the Forbearance Agreement and making payments from September through
December 2009, until Fannie Mae discontinued the program in January 2010. But he

                                               9
alleged the Bank did not work with him to find a more permanent resolution. He also
alleged the Bank proceeded with the nonjudicial foreclosure sale in December 2010,
despite the Bank’s announcement that it had placed a moratorium on home foreclosures
for the 2010 holiday period.
       Baldwin also relies on the August 3, 2009 letter signed by Jill Ballantine, a senior
vice president of the home retention division of BAC Home Loans Servicing, LP, which
was mailed to Baldwin with the Forbearance Agreement. That letter, incorporated as an
exhibit to the second amended complaint, informed Baldwin that he qualified for the
Fannie Mae HomeSaver Forbearance Program. It stated: “This is not a permanent
payment reduction, but it will allow you to stay in your home as we work together to find
a solution.” The letter closed: “We want to help you. Remember, if you have any
questions, please contact us . . . . Additionally, you may receive a phone call from one of
our representatives to discuss the HomeSaver Forbearance Program. Please take
advantage of the opportunity to start a dialogue and get the help you need.”
       The Bank argues that the Forbearance Agreement did not guarantee Baldwin a
permanent alternative to foreclosure or a loan modification. It cites Paragraph 2A which
warned: “If this Agreement terminates, however, then any pending foreclosure action
will not be dismissed and may be immediately resumed from the point at which it was
suspended, and no new notice of default, notice of intent to accelerate, notice of
acceleration, or similar notice will be necessary to continue the foreclosure action, all
rights to such notices being hereby waived to the extent permitted by Applicable Law
. . . .” Paragraph 2B. provided that if the borrower had not entered into another
agreement with the servicer (the Bank) to cure or otherwise resolve the default, or
reinstated his loan in full, then “the Servicer will have all of the rights and remedies
provided by the Loan Documents . . . .”
       In addition, paragraph 2D warned that the Forbearance Agreement was not a
forgiveness of payments on the loan or a modification of loan documents: “I further
understand and agree that the Servicer is not obligated or bound to make any
modification of the Loan Documents or provide any other alternative resolution of my

                                              10
default under the Loan Documents.” Paragraph 2L expressly stated that the Bank was
not waiving any right or remedy, including foreclosure.
       The Bank argues that Baldwin cannot properly allege breach of contract in the
face of these provisions which warned that the Bank did not promise to permanently
modify his loan and that it retained its rights to foreclose in the event no permanent
solution was reached. The Bank contends that it was not obligated to modify the loan
and therefore was within its rights to foreclose after the deferral period ended. In other
words, it argues that it only promised not to foreclose during the six month deferral
period, and that Baldwin received the benefit of that bargain because the property was not
sold during that period.4
       We are satisfied that Baldwin adequately alleged that the Forbearance Agreement
constitutes an enforceable contract by which the Bank agreed to work with him to
determine whether additional default relief could be offered under paragraph 2C of the
agreement. Paragraph 2A provides that any foreclosure sale would be suspended if
Baldwin made the payments during the deferral period. But it expressly stated that if the
Agreement terminated, the Bank could resume foreclosure proceedings.
       The Forbearance Agreement was a contract to negotiate in good faith. (Cedar
Fair, L.P. v. City of Santa Clara (2011) 194 Cal.App.4th 1150, 1171, citing Copeland v.
Baskin Robbins, U.S.A. (2002) 96 Cal.App.4th 1251, 1253 [recognizing cause of action
for breach of agreement to negotiate in good faith].) “Failure to agree is not, itself, a
breach of the contract to negotiate.’ [Citation.]” (Ibid.) “Only when the parties are
under a contractual compulsion to negotiate does the covenant of good faith and fair
dealing attach, as it does in every contract. In the latter situation the implied covenant of
good faith and fair dealing has the salutary effect of creating a disincentive for acting in

       4 Bank argues that there was no binding contract because it did not sign the
agreement as required by the Forbearance Agreement. Nevertheless it contends we need
not reach this issue because there was no breach of contract even if it was binding. We
agree that we need not address the issue and proceed to the merits of the breach of
contract cause of action.

                                             11
bad faith in contract negotiations.” (Copeland v. Baskin Robbins U.S.A., at p. 1260, fn.
omitted.)
       Here, Baldwin alleged that although he made all requested payments “to the date
of termination of the program” he was “not offered one of the options placed in the
HOMESAVER plan or transferred into the new program.” He alleged that once he
learned a foreclosure auction was scheduled, “he offered to reinstate the terms of the
previous financial agreement or similar terms in order that all amounts due and owing to
defendants could be repaid and the default be cured.” This offer was allegedly rejected
and the house was sold at foreclosure. Baldwin did not allege that he would have
qualified for the other potential relief referenced in the Forbearance Agreement.
       Baldwin alleged that the Bank breached the Forbearance Agreement “by
terminating the ‘Deferral Period’ although the Servicer (i) never executed the Agreement,
(ii) never offered another resolution of any default such as a modification, pre-foreclosure
sale or deed in lieu of foreclosure, or (iii) found Mr. Baldwin under default under the
program.” The breach of contract cause of action alleged that the Bank did not offer
another resolution of his default, nor inform him whether he was approved or denied a
loan modification as he requested at the end of the sixth month of the deferral period, nor
did it disclose the amount his loan was in arrears in the sixth month when no other form
of relief was forthcoming from the Bank. Instead, the Bank pursued foreclosure without
providing the HomeSaver resolution the Bank was required to identify and provide.
Baldwin argues that, contrary to the promises made in the Forbearance Agreement, the
Bank did not work with him to find a long-term solution, and provide another resolution
during the deferral period. He alleged that the sale went forward despite the Bank’s
announcement that it was placing a moratorium on foreclosures for the 2010 holiday
period, an issue we discuss next.
       Baldwin alleged that had he known the sale was going forward in December 2010,
“he would have taken steps to protect his home, including filing a petition for Chapter 13
bankruptcy.” He alleged: “Because defendants broke their promise, Mr. Baldwin faced
the loss of his home, disruption of his life, worry, anxiety, financial loss, including

                                              12
damage to their credit, and other emotional distress.” He sought “compensatory damages
for [his] financial loss, the loss of [his] home, damages for emotional distress, an
injunction ordering defendants to cancel the foreclosure sale, return title to Mr. Baldwin,
and reinstate Mr. Baldwin’s home loan.” He also sought an award of attorney fees.
       “To allege a cause of action for damages for breach of contract, a plaintiff must
allege, ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3)
defendant’s breach, and (4) the resulting damages to plaintiff.’ [Citation.]” (Bushell v.
JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th at p. 921.) “‘[I]t is essential to
establish a causal connection between the breach and the damages sought.’ [Citation.]”
(Thompson Pacific Const., Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 541.)
“Compensatory damages for breach of contract are not measured by the gain to the
breaching party. Instead, general damages are to compensate the aggrieved party for loss
of the benefits he would have received by performance. (See 1 Witkin, Summary of Cal.
Law (10th ed. 2005) Contracts, § 869, p. 956.)” (County of Ventura v. Channel Islands
Marina, Inc. (2008) 159 Cal.App.4th 615, 627.)
       In a cause of action for breach of contract, the plaintiff must plead that the
defendant’s breach was a substantial factor in causing his or her damages. (See Douglas
E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211 Cal.App.4th 230, 247, fn. 3.)
“‘The test for causation in a breach of contract . . . action is whether the breach was a
substantial factor in causing the damages. [Citation.] “Causation of damages in contract
cases, as in tort cases, requires that the damages be proximately caused by the
defendant’s breach, and that their causal occurrence be at least reasonably certain.”
[Citation.] A proximate cause of loss or damage is something that is a substantial factor
in bringing about that loss or damage. [Citations.] The term “substantial factor” has no
precise definition, but “it seems to be something which is more than a slight, trivial,
negligible, or theoretical factor in producing a particular result.”’ (US Ecology, Inc. v.
State (2005) 129 Cal.App.4th 887, 909.)” (Haley v. Casa Del Rey Homeowners Assn.
(2007) 153 Cal.App.4th 863, 871–872)

                                             13
       Baldwin sufficiently alleged that the Bank breached the terms of the Forbearance
Agreement by failing to work with him in an effort to find a long-term solution to his
inability to pay his mortgage to take effect after the forbearance deferral period ended.
But Baldwin does not allege that his damages, including the foreclosure sale of his house,
were caused by that breach. As the Bank argues, under the terms of the Forbearance
Agreement, it was not obligated to provide a permanent loan modification or other
resolution. The Forbearance Agreement expressly provided that foreclosure proceedings
could resume or be initiated once the deferral period ended. The allegations of the
second amended complaint are that the Bank did not foreclose until more than nine
months after the end of the Forbearance Agreement, by which time it was entitled to
proceed with foreclosure unless some other arrangement had been made with Baldwin.
Under these circumstances, Baldwin did not establish his claim that the ultimate
foreclosure sale was a result of the Bank’s breach of the terminated Forbearance
Agreement.
       The parties cite many cases in the context of actions brought by borrowers where
efforts to modify loans did not stave off foreclosure despite negotiations or even
agreements with lenders or servicers to provide relief to the borrowers. For example, we
granted their joint request to brief the very recent opinion of the Fourth Appellate
District, Division 3 in Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th
49 (Lueras), a case involving an agreement under the same HomeSaver Forbearance
Program at issue here. But unlike our case, in Lueras the plaintiff alleged a pattern of
contradictory and misleading communications from defendant during the deferral period
under the Forbearance Agreement as to whether he would receive long-term or
permanent relief to avoid foreclosure.
       Here, Baldwin did not allege such a pattern. In fact, he alleged no direct
communications with the Bank until he was notified of the pending foreclosure sale. At
that point, he alleged that “he offered to reinstate the terms of the previous financial
agreement or similar terms in order that all amounts due and owing to defendants could
be repaid and the default be cured.” This offer allegedly was rejected and the house sold.

                                             14
       Instead of individual negotiations and communications with the Bank as to his
eligibility for another form of relief, Baldwin alleged that he relied on national media
reports that the Bank had placed a moratorium on foreclosure sales during the holiday
period in 2010. As we shall explain, those allegations cannot serve as the basis for a
valid cause of action under any theory.
       In sum, while we agree that Baldwin has pleaded the existence of a contract
between himself and the Bank by which the Bank would forbear from foreclosing for a
six month period if Baldwin made the prescribed payments, and that it would work with
him in an effort to find other options for relief, and that it failed to do so, he has not
adequately pleaded resulting damages. Nor has he demonstrated that he could plead such
damages if afforded a further opportunity to do so. The Bank promised to work with
Baldwin, it did not promise to resolve the problem. We do not know and cannot know
whether further efforts toward a resolution would have led to a solution or what that
solution might have been. Since those factors are unknown and unknowable, the amount
of damages, if any, is necessarily speculative.
       The absence of an obligation to modify the loan or to provide other permanent
relief distinguishes this case from West v. JPMorgan Chase Bank, N.A. (2013) 214
Cal.App.4th 780 (West) and Wigod v. Wells Fargo Bank, N.A. (7th Cir. 2012) 673 F.3d
547 (Wigod), which were brought under the separate Home Affordable Mortgage
Program (HAMP). HAMP was intended to “‘provide relief to borrowers who have
defaulted on their mortgage payment or who are likely to default by reducing mortgage
payments to sustainable levels, without discharging any of the underlying debt.’
[Citation.]” (West, supra, 214 Cal.App.4th at p. 785.) Based on a directive issued by the
United States Department of the Treasury, the courts in West and Wigod held “that when
a borrower complies with all the terms of a TTP [trial period plan], and the borrower’s
representations remain true and correct, the loan servicer must offer the borrower a
permanent loan modification. As a party to a TPP, a borrower may sue the lender of loan
servicer for its breach.” (West, supra, at pp. 736, 796–798; Wigod, supra, 673 F.3d at

                                               15
557, 559, fn. 4; see also Bushell v. JPMorgan Chase Bank, N.A., supra, 220 Cal.App.4th
at pp. 924–927 [same].)
       “‘“It is fundamental that [contract] damages which are speculative, remote,
imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.”
[Citation.]” (Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 473,
disapproved on another ground in Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317,
352, fn. 17.) We conclude that although a breach of the Forbearance Agreement is
alleged, Baldwin cannot allege that his damages were proximately caused by that breach
under the circumstances presented here. The trial court did not err in sustaining the
demurrer to this cause of action.
                                              IV
       Baldwin’s alternative breach of contract theory alleged that his home was sold
through a nonjudicial foreclosure auction sale in December 2010 even though the Bank
had announced a moratorium on home foreclosures for the 2010 holiday period. The
fraud cause of action is based on the same moratorium announcement. We reserve our
discussion of the Business and Professions Code section 17200 claim for the next part of
this opinion.
A. Breach of Contract
       In support of his breach of contract claim based on the moratorium announcement,
Baldwin relies on Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665
(Raedeke), in which the plaintiffs sued for wrongful foreclosure. After the plaintiffs’
loan became delinquent and a trustee’s sale was scheduled, Gibraltar orally agreed to
postpone the sale because negotiations were underway with prospective buyers for the
property. Despite the alleged oral agreement, and although a willing buyer had been
procured, Gibraltar proceeded with the trustee’s sale. Plaintiffs sued, alleging that they
had not taken other steps to cure the default in reliance on the agreement to postpone the
sale. A jury found that Gibraltar promised to postpone the sale and that plaintiffs had
satisfied the condition of procuring a willing buyer. Despite the jury verdict for
plaintiffs, the trial court treated the jury’s verdict as advisory only, and found that

                                              16
Gibraltar did not promise to postpone the sale and that plaintiffs were not misled or lulled
into inaction. (Id. at p. 669–670.)
       The issue in Raedeke was whether the case presented equitable issues for
resolution by the trial court, or legal issues for resolution by the jury. The Supreme Court
concluded that the plaintiffs had presented a viable legal theory based on breach of an
oral contract to postpone the sale, properly determined by the jury, not the trial court. It
directed the court to enter judgment for plaintiffs on the verdict. (Raedeke, supra, 10
Cal.3d at pp. 674–675.) Baldwin argues that, like the plaintiffs in Raedeke, he was lulled
into inaction and is entitled to recovery against the Bank on that theory. Raedeke is
distinguishable because in that case, the plaintiff alleged a postponement had been
offered and accepted, forming an oral contract to postpone the sale. Here, as we explain,
Baldwin cannot allege such an enforceable agreement.
       “An essential element of any contract is the consent of the parties, or mutual
assent. (Civ. Code, §§ 1550, subd. 2, 1565, subd. 2.) Mutual assent usually is manifested
by an offer communicated to the offeree and an acceptance communicated to the offeror.
(1 Witkin, Summary of Cal. Law (9th ed. 1987) Contracts, § 128, p. 153 (hereafter
Witkin).) ‘“‘An offer is the manifestation of willingness to enter into a bargain, so made
as to justify another person in understanding that his assent to that bargain is invited and
will conclude it.’” [Citations.]’ (City of Moorpark v. Moorpark Unified School Dist.
(1991) 54 Cal.3d 921, 930.) The determination of whether a particular communication
constitutes an operative offer, rather than an inoperative step in the preliminary
negotiation of a contract, depends upon all the surrounding circumstances. [Citation.]
The objective manifestation of the party’s assent ordinarily controls, and the pertinent
inquiry is whether the individual to whom the communication was made had reason to
believe that it was intended as an offer. (1 Witkin [9th ed. 1987] Contracts, § 119,
p. 144; 1 Farnsworth, Contracts (2d ed.1998) § 3.10, p. 237.)” (Donovan v. RRL Corp.
(2001) 26 Cal.4th 261, 270–271, italics added.)
       “If there is no evidence establishing a manifestation of assent to the “same thing”
by both parties, then there is no mutual consent to contract and no contract formation.’

                                             17
[Citation.]” (Douglas E. Barnhart, Inc. v. CMC Fabricators, Inc. (2012) 211
Cal.App.4th 230, 243.) “‘[U]nder the common law, “[s]ilence in the face of an offer is
not an acceptance, unless there is a relationship between the parties or a previous course
of dealing pursuant to which silence would be understood as acceptance.” [Citation.]’
[Citations.]” (C9 Ventures v. SVC-West, L.P. (2012) 202 Cal.App.4th 1483, 1500.) Here
there is no allegation that Baldwin contacted the Bank to accept the foreclosure
moratorium. No binding contract was formed to apply the moratorium to Baldwin’s
default.
       This conclusion is supported by the principles applicable in the analogous setting
of direct mail offers by vendors. In Harris v. Time, Inc. (1987) 191 Cal.App.3d 449,
Time, Inc. sent a direct mail advertisement which had a window revealing a statement
that the recipient would receive a new calculator watch free just for opening the envelope
by a designated deadline. The full text of the offer was revealed only on opening. It
required the recipient to purchase a magazine subscription to receive the free watch. The
Harris court concluded that “Time had no means of learning of the acceptance by
performance. Thus the recipients of the offer were required to provide Time with notice
of their performance within a reasonable period of time. Absent such notice, Time could
treat the offer as having lapsed before acceptance. [Citations.]” (Id. at pp. 456–457.)
       Baldwin has not and cannot allege a breach of contract theory based on the
moratorium announcement because he did not take any action to accept the alleged offer
to abstain from foreclosure in order to form a valid contract.
B. Fraud
       To state a fraud cause of action plaintiffs must allege “(1) a misrepresentation
(false representation, concealment or nondisclosure); (2) knowledge of its falsity (or
scienter); (3) intent to defraud, ie., to induce reliance; (4) justifiable reliance; and (5)
resulting damage. [Citation.] (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34
Cal.4th 979, 990.) “In California, fraud must be pled specifically; general and conclusory
allegations do not suffice. [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631,
645.) “‘This particularity requirement necessitates pleading facts which “show how,

                                               18
when, where, to whom, and by what means the representations were tendered.
[Citation.]”’ (Ibid.)
       A plaintiff must allege that his reliance on the fraudulent representation was
reasonable. “‘“[I]f the conduct of the plaintiff in the light of his own intelligence and
information was manifestly unreasonable, . . . he will be denied a recovery.”’ [Citation.]”
(Thrifty Payless, Inc. v. Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1240.)
In order to show justifiable reliance, the plaintiff must demonstrate that “‘circumstances
were such to make it reasonable for [the] plaintiff to accept [the] defendant’s statements
without an independent inquiry or investigation.’ [Citation.]” (OCM Principal
Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 864.)
“‘Even in case of a mere negligent misrepresentation, a plaintiff is not barred unless his
conduct, in the light of his own information and intelligence, is preposterous and
irrational. [Citation.]’ [Citation.]” (Id. at p. 865.) “‘Reliance can be proved in a
fraudulent omission case by establishing that “had the omitted information been
disclosed, [the plaintiff] would have been aware of it and behaved differently.”’
(Boschma v. Home Loan Center, Inc. [(2011)] 198 Cal.App.4th [230] 250–251.)” (West,
supra, 214 Cal.App.4th at p. 794.)
       We conclude that in this case, Baldwin’s reliance on media reports of a foreclosure
moratorium was not reasonable, particularly since he does not allege that he inquired
whether the moratorium applied to his loan, or otherwise communicated with the Bank
about the terms of the moratorium. By the time the moratorium was announced, the
Forbearance Agreement had ended, Baldwin’s loan was in default, and Baldwin was
aware that the Bank had the right to pursue nonjudicial foreclosure under the express
warnings stated in the Forbearance Agreement. Under these circumstances, it was
unreasonable for Baldwin to rely in silence on a national media report. Baldwin cannot
state a cause of action for fraud.

                                             19
                                             V
       Section 17200 et seq. “is commonly referred to as the Unfair Competition Law
(UCL). “‘“‘[T]he UCL creates “’three varieties of unfair competition—acts or practices
which are unlawful, or unfair, or fraudulent.’” [Citation.]’ [Citation.]” (Rossberg v.
Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1501.) Unfair or fraudulent
practices provide grounds for relief under section 17200. (Yanting Zhang v. Superior
Court (2013) 57 Cal.4th 364, 370.) “‘In order to state a cause of action under the fraud
prong of the UCL a plaintiff need not show that he or others were actually deceived or
confused by the conduct or business practice in question. “The ‘fraud’ prong of [the
UCL] is unlike common law fraud or deception. A violation can be shown even if no one
was actually deceived, relied upon the fraudulent practice, or sustained any damage.
Instead, it is only necessary to show that members of the public are likely to be
deceived.” [Citations.]’ (Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167.)”
(Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986.)
A. Allegations
       Baldwin’s cause of action for violation of section 17200 alleged that the Bank
“engaged in deceptive business practices with respect to mortgage loan servicing, and
foreclosure of residential properties and related matters. . . .” Several practices were
identified as deceptive. One such practice was “Calling the HOMESAVER forbearance
plan a ‘forbearance’ plan representing that the payments were made in consideration for
the forbearance of foreclosure, but instead were applied to the underlying mortgage.”
The complaint alleged that Baldwin and other members of the public were induced to
treat the program as part of a modification program or a “HOME SAVER” plan, or “to
interpret and enforce the plan as a forbearance plan thereby depriving Mr. Baldwin and
other California borrowers [of] their rights under the agreement.”
       Baldwin also alleged the Bank engaged in deceptive practices because it
nonjudicially foreclosed on a security instrument (deed of trust) in violation of Civil
Code section 2924. Baldwin claimed this caused a wrongful foreclosure of his home
“with no right to challenge standing prior to foreclosure on a stranger to the ‘deed of

                                             20
trust’.” He alleged the Bank used “robo signers” and that the trustee’s deed upon sale has
an attestation stating that the notary witnessed the execution of the document by the
signatory on December 14, 2010 but it was actually executed on December 20, 2010. He
also alleged that the notice of sale with which he was served differs from the recorded
version because the one he received did not list the name of the trustee and had different
language in violation of Civil Code section 2924c.
       Other alleged violations of the nonjudicial foreclosure statutes included omissions
in the notice of default and failure to serve it properly as well as failure to explore
foreclosure alternatives with him 30 days before recording the notice of default in
violation of Civil Code section 2923.5.5 As to the foreclosure moratorium, Baldwin
alleged that the Bank engaged in unlawful and unfair practices by publicizing the
moratorium through mass media as we have previously described.
       In a catchall allegation, Baldwin claimed that the Bank “engaged in ‘fraudulent,’
‘unfair’ or ‘unlawful’ acts by violating various state laws and federal regulations,
standards, and/or policies in making or causing to be made the land recordings in Los
Angeles County, California County Recorder’s office as particularly alleged above
without any personal knowledge whether in fact the statements made in the documents
were in fact true.”
B. Pleading Requirements
       We first dispose of the catchall allegations of the section 17200 claim which do
not allege, as required, that the Bank’s “conduct is tethered to an [ ] underlying
constitutional, statutory or regulatory provision, or that it threatens an incipient violation
of an antitrust law, or violates the policy or spirit of an antitrust law.” (Durell v. Sharp
Healthcare (2010) 183 Cal.App.4th 1350, 1365.) Baldwin attempts to satisfy this
requirement by citing the public policy that led to the enactment of the California

       5 The sole remedy available for a violation of Civil Code section 2923.5 is a one-
time postponement of nonjudicial foreclosure proceedings. (Mabry v. Superior Court
(2010) 185 Cal.App.4th 208, 235.) Since Baldwin alleges that the foreclosure sale has
already taken place, section 2923.5 cannot now provide him a remedy.

                                              21
Homeowners Bill of Rights on July 11, 2012. Without citation to supporting authority,
he claims the newly amended laws prohibit dual tracking (continuing to pursue
nonjudicial foreclosure while borrower is seeking loan modification). These provisions
do not go into effect until January 1, 2018 (Jolley v. Chase Home Finance, LLC (2013)
213 Cal.App.4th 872, 904) and thus have no application here.
       We also conclude that Baldwin has not, and cannot, allege the requisite causal
connection between the alleged wrongdoing by the Bank and his injury. “‘In 2004, the
electorate substantially revised the UCL’s standing requirement; where once private suits
could be brought by “any person acting for the interests of itself, its members or the
general public” (former § 17204, as amended by Stats. 1993, ch. 926, § 2, p. 5198), now
private standing is limited to any “person who has suffered injury in fact and has lost
money or property” as a result of unfair competition (§ 17204, as amended by Prop. 64,
as approved by voters, Gen. Elec. (Nov. 2, 2004) § 3; see Californians for Disability
Rights v. Mervyn’s LLC [(2006)] 39 Cal.4th [223, at pp.] 227–228.)” (Kwikset Corp. v.
Superior Court (2011) 51 Cal.4th 310, 320–321 (Kwikset).) Thus, a plaintiff must
demonstrate some form of economic injury. (Id. at p. 323.)
       “Proposition 64 requires that a plaintiff’s economic injury come ‘as a result of’ the
unfair competition . . . .” (Kwikset, supra, 51 Cal.4th at p. 326.) “‘The phrase “as a result
of” in its plain and ordinary sense means “caused by” and requires a showing of a causal
connection or reliance on the alleged misrepresentation.’ [Citations.]” (Ibid.) “[A]
plaintiff ‘proceeding on a claim of misrepresentation as the basis of his or her UCL action
must demonstrate actual reliance on the allegedly deceptive or misleading statements, in
accordance with well-settled principles regarding the element of reliance in ordinary
fraud actions’ [citation]. Consequently, ‘a plaintiff must show that the misrepresentation
was an immediate cause of the injury producing conduct. . . . ‘ [Citation.]” (Id. at pp.
326–327, fn. omitted.)
       The Bank argues that Baldwin cannot satisfy these requirements because the loss
of his home through nonjudicial foreclosure was caused by his default and not by any of
its practices. The requisite causal connection between the alleged unlawful business

                                             22
practice and the harm suffered by the plaintiff “is broken when a complaining party
would suffer the same harm whether or not a defendant complied with the law.” (Daro v.
Superior Court (2007) 151 Cal.App.4th 1079, 1099.) In that case, the court held that the
plaintiff tenants could not allege a cause of action under the UCL based on alleged
violation of the Subdivided Lands Act by the landlord because even if there had been full
compliance, the tenants would still face eviction. (Ibid.)
       In Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497 (Jenkins),
the plaintiff alleged that the defendants violated section 17200 by recording fraudulent
documents in violation of Penal Code section 115.5 and the nonjudicial foreclosure
statutes (Civ. Code, § 2924 et seq.). As a result of these unlawful, unfair, and fraudulent
business practices, the plaintiff alleged that her home was subject to foreclosure and that
she had suffered monetary damages. The Court of Appeal concluded that the plaintiff
could not satisfy the causation element which required her to plead a causal link between
her economic injury (the impending nonjudicial foreclosure) and the allegedly unfair or
unlawful acts. The plaintiff admitted that she had defaulted on her loan and that this
default triggered the lawful enforcement of the power of sale clause in the deed of trust,
which subjected the house to nonjudicial foreclosure. (Id. at p. 522–523.) The court
reasoned that the plaintiff could not assert that the impending foreclosure was caused by
the defendants’ wrongful actions, and therefore a demurrer to the cause of action was
proper. (Id. at p. 523.) The Jenkins court concluded that amendment could not cure the
standing defect because the purported wrongdoing by the defendants occurred after the
plaintiff defaulted on her loan. (Id. at pp. 523–524.)
       We conclude that our case is like Jenkins, supra, 216 Cal.App.4th 497. Baldwin
cannot satisfy the causation element because he defaulted on his loan which triggered the
nonjudicial foreclosure before any wrongdoing by the Bank.

                                             23
                                   DISPOSITION
     The judgment of dismissal is affirmed. The Bank is entitled to its costs on appeal.
     NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                                     EPSTEIN, P. J.
We concur:

     WILLHITE, J.

     SUZUKAWA, J.

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