Court Opinion

ID: 4569523
Source: CourtListenerOpinion
Date Created: 2020-09-24 22:02:09.315592+00
Date Added: 2024-06-11T13:27:31.504980
License: Public Domain

Filed 9/24/20 Rogers v. Wells Fargo Bank, N.A. 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                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or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

 LAURA J. ROGERS,

           Plaintiff and Appellant,                           A156555
 v.
                                                              (Contra Costa County
 WELLS FARGO BANK, N.A.                                       Sup. Ct. No. MSC1702224)
 et al.,

      Defendants and
 Respondents.

         Plaintiff Laura J. Rogers (Rogers) appeals from the trial court’s
judgment dismissing her action against defendants Wells Fargo Bank, N.A.
(Wells Fargo), Northwest Trustee Services, Inc., and HSBC Bank U.S.A.,
N.A.’s (HSBC) after the court sustained defendants’ demurrer to her second
amended complaint without leave to amend. We affirm.
                            FACTUAL AND PROCEDURAL BACKGROUND
         Because this is an appeal from an order sustaining a demurrer, we set
forth as true the following facts as they are alleged in the second amended
complaint, together with properly judicially noticed facts. (Crowley v.
Katleman (1994) 8 Cal. 4th 666, 672.) In April 2007, Rogers obtained a
$1,982,500 loan (the Loan) to purchase a real property located in Walnut

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Creek, California (the Property).1 Shortly after the loan origination, Wells
Fargo began servicing the Loan and HSBC became the beneficiary of the
Loan by an assignment of the deed of trust.
      After Rogers failed to make her August 1, 2009 Loan payment, she
contacted Wells Fargo to seek a loan modification. She submitted numerous
documents to Wells Fargo with the understanding that Wells Fargo would
consider modifying the Loan. “Finally, in January of 2011, Wells Fargo sent
[her] a ‘Special Forbearance Agreement’ ” that provided that Wells Fargo
would review Rogers for a loan modification after she successfully made three
monthly payments. Rogers made the three payments and thereafter
submitted additional documents that Wells Fargo told her were necessary in
evaluating her loan modification application. During that time, Rogers
continued to make monthly payments on her Loan as required by the
forbearance agreement until she stopped making payments in August 2012.
      For the next four years, Rogers continued to submit documents to Wells
Fargo for her loan modification application. “Finally, in or around July
2016,” Wells Fargo informed Rogers that her application was denied because
the investor of her loan, HSBC, did not allow for loan modifications. Rogers
was “incensed that she had gone through the modification process for years
when Wells Fargo knew all along that she could never receive a modification
because the investor of the loan did not modify loans[.]” Wells Fargo
informed Rogers she had three options at that point: (1) foreclosure; (2) short

1     Rogers explained in her original complaint, which she later amended,
that the loan application was known as a “ ‘quick qualifier,’ meaning only
bank statements showing a significant balance were used for qualification
and then approval.” Rogers was unemployed and had no source of income at
the time she obtained the Loan. Her monthly payment on the Loan was over
$13,000.

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sale; or (3) executing a deed in lieu of foreclosure. Rogers chose the short sale
option and began searching for a buyer.
         Shortly thereafter, Wells Fargo conditionally approved a short sale at a
sales price of $1.4 million and a closing date of January 27, 2017. Rogers
received a $1.4 million offer but, “because of the condition of the property[,]
escrow took longer than expected.” Rogers therefore requested, and Wells
Fargo granted, an extension of time of about three months to close. However,
on the day before the extension was about to expire, Wells Fargo informed
Rogers that it was “ ‘unable to wait any longer on this file’ ” and needed to
move forward with the foreclosure process. The short sale purchase failed to
close.
         Rogers filed an internal complaint with Wells Fargo challenging its
“abrupt” decision to end the time extension. In response, Wells Fargo offered
Rogers another opportunity to apply for a loan modification. During the next
few months, Rogers submitted documents in support of a loan modification
but Wells Fargo denied her application on the basis that her income was
insufficient. Rogers informed Wells Fargo that her spouse, from whom she
was separated, could contribute towards the monthly mortgage payment. On
November 2, 2017, Rogers submitted additional documents relating to her
spouse’s contributions. The next day, Wells Fargo informed Rogers that the
spousal contribution was insufficient and that it would go forward with the
foreclosure sale the following Monday, November 6.
         On November 6, Rogers’ “authorized agent” attended the foreclosure
auction with the intent to bid on the Property. In her original complaint,
Rogers alleged it was her spouse who attended the foreclosure auction. In
her subsequent complaints, she alleged it was her agent—an individual
named David Nace (Nace) who “worked for [Rogers] in various capacities

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since 2010”—who attended the foreclosure auction. In her second amended
complaint, which is the operative complaint, Rogers alleged she and Nace had
a “verbal arrangement” that a limited liability corporation (LLC) of which
Nace was a member would bid on the Property on behalf of Rogers, up to
$1.4 million. At the November 6 foreclosure auction, it was announced that
the foreclosure sale of the Property had been postponed to the following
month and, therefore, Nace did not bid on the Property. Two days later, on
November 8, Rogers learned during a telephone call with Wells Fargo that
the Property actually had been sold at the November 6 foreclosure sale to
HSBC.
      Nine days later, on November 15, Rogers, in pro per, filed a verified
complaint against Wells Fargo alleging 16 causes of action. The trial court
sustained Wells Fargo’s demurrer to the complaint with leave to amend and
Rogers then retained an attorney who filed on her behalf a first amended
complaint against Wells Fargo, HSBC, and Northwest Trustee Services, Inc.,
the foreclosing trustee of the Loan (together, defendants). She alleged six
causes of action: (1) wrongful foreclosure; (2) intentional misrepresentation;
(3) negligent misrepresentation; (4) violation of Civil Code section 2923.6;
(5) violation of Civil Code section 2923.7; and (6) quiet title. She alleged she
was harmed because defendants prematurely conducted a foreclosure sale,
made false statements about postponing the foreclosure auction, did not sell
the Property to the highest bidder at a public auction, and gave her
unreasonable time frames to submit documents for loan modification review.
      Defendants demurred to the first amended complaint arguing, among
other things, that Rogers had failed to show harm. After defaulting on her
loan in August 2009, Rogers lived in the Property “for free for more than
eight years” and failed to cure her default. By the time defendants “were

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finally able to foreclose on the Property on November 6, 2017,” the Property
“sold for $1.08 million as against a debt of $3.348 million.” “Therefore,
Plaintiff lost nothing when, as a result of the foreclosure sale, title in the
property was transferred to the purchaser. To the contrary, Plaintiff
benefited from the sale because . . . her $3.3 million debt was extinguished.”
Defendants also argued Rogers’ quiet title claim failed because Rogers did not
allege she has “tendered any part of her debt” in violation of the tender rule,
i.e., that a “mortgagor may not maintain a quiet title action against the
mortgagee without first paying the outstanding debt on which the subject
mortgage is based.”
      The trial court sustained the demurrer to Rogers’ first amended
complaint with leave to amend, stating: “The primary defect in plaintiff’s
allegations is the failure to plead an intelligible theory of causation.” The
court noted that the willingness of both parties to allow a short sale “strongly
indicates that there was no equity in the [P]roperty.” Further, even a
$1.4 million short sale offer was not viable “ ‘because of the condition of the
[P]roperty.’ ” In addition, there were judicially noticed documents—the
accuracy of which Rogers did not dispute—that showed the Loan balance was
approximately $3.3 million as of the date of the trustee’s sale and that the
Property sold for a credit bid of approximately $1.1 million. The court
ordered Rogers to “clarify” the allegations regarding equity and affirmatively
allege the fair market value and the balance on her Loan at the time of the
trustee’s sale.
      The trial court also stated it “does not understand” the allegations
relating to the “ ‘authorized agent’ ” who attended the November 6 foreclosure
auction. “[P]laintiff shall allege whether the agent would be bidding with
plaintiff’s money or with the agent’s own money, the source of the money,”

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and “whether the agent showed up on November 6 with the certified funds
necessary to effectuate a bid, as is required at a nonjudicial foreclosure sale.”
The court asked, “if the agent had purchased the property through a
successful bid, what then? Would the agent have just deeded the property
over to plaintiff for free?”
      The trial court found that Wells Fargo gave Rogers many opportunities
over the course of many years including entering into a forbearance
agreement, refraining from initiating foreclosure for more than four years
thereafter, “not rush[ing] to conduct a trustee’s sale” after “finally record[ing]
a notice of default,” giving Rogers the opportunity to conduct a short sale,
granting her a three-month extension to close escrow, and considering her
loan modification application, including agreeing to “take into consideration
the possibility of an additional (and highly implausible) voluntary
contribution from plaintiff’s estranged spouse.” “In light of the lengthy period
of default, plaintiff’s multiple failed attempts to address her default, and
defendants’ full consideration and denial of plaintiff’s latest application for a
loan modification, plaintiff has failed to allege facts indicating that any
technical defect in the foreclosure process caused plaintiff harm. Rather, the
sole cause of plaintiff’s harm appears to have been her inability to pay her
mortgage loan on the terms she had originally agreed to.” As to the quiet
title cause of action, the court stated Rogers had failed to allege tender. The
court went through each cause of action and set forth “Conditions on Leave to
Amend” including instructions on how to cure the defects in her first
amended complaint. The court, for example, instructed Rogers to allege facts
to show Nace went to the foreclosure auction with certified funds necessary to
bid on the Property as required by law.

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      Rogers filed a second amended complaint (SAC) alleging the same six
causes of action. She provided additional information regarding Nace,
including stating that his LLC had $1.4 million “readily available” to bid on
the Property and that the plan was for the LLC to purchase the Property,
then transfer title back to Rogers and “secure a loan on the property payable
by [Rogers] for the purchase price.” Rogers alleged the fair market value of
the Property was $2.7 million in September 2017 and attached a copy of an
appraisal to the SAC. She alleged, “Since Plaintiff could have retained title
to the Property for $1,400,000.00 had Defendants held the property for sale
at a public auction as required, Plaintiff seeks damages from Defendants for
$1,300,000.00, which is the difference between the value that Plaintiff could
have purchased the property for at auction and the appraisal of the property
that they obtained in September 2017.”
      Defendants filed a demurrer to the SAC arguing Rogers still did not
plead facts supporting causation, given that she failed to take into account
the fact that the foreclosure sale extinguished her $3.3 million debt.
Defendants asserted they did not misrepresent the November 6 foreclosure
auction date and that, even assuming they did, Rogers failed to allege a
material fact—that Nace went to the auction with the certified funds
necessary to bid on the Property. Defendants asked the trial court to take
judicial notice of governmental records showing that Nace’s LLC was an out-
of-state “vehicle ownership” business, that Nace was a real estate salesperson
whose license had been revoked, and that Nace had filed for bankruptcy three
times, including on November 3, 2017—the business day before the
November 6 foreclosure sale—and that his assets were worth less than

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$50,000 as of that date.2 Defendants asserted Rogers also failed to plead
facts showing a material violation in connection with the loan modification or
foreclosure process and had still not complied with the tender rule.
      Before the trial court issued its ruling, Rogers filed an “amendment” to
the SAC in which she added several allegations, including a footnote
explaining the discrepancy between her original complaint—in which she
alleged her spouse attended the November 6 foreclosure sale—and her
subsequent complaints in which she alleged Nace did. She explained she
made a “mistake of fact” because her spouse attended an auction after the
November 6 sale “to attempt to discover the name of the auctioneer at the
November 6 . . . sale. Because Plaintiff did not attend any of the sales herself
and she had not been at the sale on November 6, 2017, she was confused as to
who attended which sale.” In her “amendment,” she also alleged the Loan
balance was likely less than the $3.3 million that defendants’ documents
showed because “there is a possibility that the interest added onto the total
balance was miscalculated” or that “some of the fees added onto the total
balance may have been overstated.” Rogers, however, acknowledged:
“[B]ecause Plaintiff is not an expert, Plaintiff would be purely speculating as
to what the total amount owed on the loan was at the time of the sale.”
      The trial court sustained defendants’ demurrer to the SAC without
leave to amend as the SAC still failed to allege facts supporting causation.
The court found Rogers violated the sham pleading doctrine by changing her
original allegation that her spouse attended the auction to an allegation that
Nace attended the auction. The court found it was “utterly implausible” that

2    It appears Rogers did not oppose—and the trial court granted—
defendants’ request for judicial notice of various documents, including
documents relating to Nace and the LLC.

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Rogers was confused about who attended the sale when she filed her original
complaint only nine days after the November 6 foreclosure sale. If Rogers
had an agreement with Nace that his LLC was going to purchase the
Property for $1.4 million, “how could [she] have possibly thought that her
husband was going to appear at the trustee’s sale and purchase plaintiff’s
residence. . .?” “It is apparent that plaintiff has changed the facts she is
alleging to fit a continually evolving legal theory, presumably because her
attorney advised her” that her original theory that an estranged husband was
going to buy the Property for her “would [not] fly. This is not acceptable.”
The court further found that Wells Fargo properly considered and denied
Rogers’ last application for a loan modification before the sale and that
Rogers failed to allege any material violation of any loan modification or
foreclosure statute. Finally, the court reiterated that Rogers’ failure to allege
a tender of the underlying debt barred her quiet title claim. On December 19,
2018, the court entered a judgment of dismissal with prejudice against
Rogers and in favor of defendants. Rogers appeals.
                                  DISCUSSION
      “In our de novo review of an order sustaining a demurrer, we assume
the truth of all facts properly pleaded in the complaint or reasonably inferred
from the pleading, but not mere contentions, deductions, or conclusions of
law. [Citation.] We then determine if those facts are sufficient, as a matter
of law, to state a cause of action under any legal theory.” (Intengan v. BAC
Home Loans Servicing LP (2013) 214 Cal. App. 4th 1047, 1052.) To prevail on
appeal from an order sustaining a demurrer, “the appellant must
affirmatively demonstrate error. Specifically, the appellant must show that
the facts pleaded are sufficient to establish every element of a cause of action
and overcome all legal grounds on which the trial court sustained the

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demurrer. [Citation.] We will affirm the ruling if there is any ground on
which the demurrer could have been properly sustained.” (Scott v. JPMorgan
Chase Bank, N.A. (2013) 214 Cal. App. 4th 743, 752.)
      “When a demurrer is sustained without leave to amend, this court
decides whether a reasonable possibility exists that amendment may cure the
defect; if it can we reverse, but if not we affirm. The plaintiff bears the
burden of proving there is a reasonable possibility of amendment. [Citation.]
The plaintiff may make this showing for the first time on appeal. [Citations.]
[¶] To satisfy that burden on appeal, a plaintiff ‘must show in what manner
he can amend his complaint and how that amendment will change the legal
effect of his pleading.’ [Citation.] . . . [Citation.] The plaintiff must clearly
and specifically set forth the ‘applicable substantive law’ [citation] and the
legal basis for amendment, i.e., the elements of the cause of action and
authority for it. Further, the plaintiff must set forth factual allegations that
sufficiently state all required elements of that cause of action. [Citations.]
Allegations must be factual and specific, not vague or conclusionary.”
(Rakestraw v. California Physicians’ Service (2000) 81 Cal. App. 4th 39, 43-44.)
The burden of showing that a reasonable possibility exists that amendment
can cure the defects remains with the plaintiff; neither the trial court nor this
court will rewrite a complaint. [Citation.] Where the appellant offers no
allegations to support the possibility of amendment and no legal authority
showing the viability of new causes of action, there is no basis for finding the
trial court abused its discretion when it sustained the demurrer without
leave to amend.” (Id. at p. 44.)
      Rogers’ primary contention is that the judgment must be reversed
because the attorney who prepared her first and second amended complaints
was incompetent. Rogers emphasizes that there is a “long-standing public

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policy” “to have every case tried on its merits wherever possible” and argues
that her attorney deprived her of this opportunity by failing to comply with
the trial court’s orders relating to what additional allegations she needed to
include to cure the defects in her first amended complaint. Rogers argues her
attorney not only “failed to incorporate the information requested by the
Court,” but also “compounded her mistakes” by not personally appearing at
the hearing and instead “phon[ing] in her appearance,” which precluded
counsel from demonstrating to the trial judge that “she was earnestly
working to do right by her Client.” Rogers argues that her attorney’s “lack of
experience in real estate and foreclosure matters” is apparent, as she alleged
facts in the second amended complaint that directly contradicted the
allegations in the first amended complaint.
      Rogers cites no relevant authority to support her position that an
attorney’s incompetence in a civil case can lead to reversal. While “[t]he right
to effective counsel in a criminal case is well established,” “we are aware of no
authority . . . which would permit a trial or appellate court to grant a retrial
to an unsuccessful litigant in a civil case . . . on the grounds of incompetency
of counsel.” (Chevalier v. Dubin (1980) 104 Cal. App. 3d 975, 978.) Moreover,
we note that other than making the conclusory statement that counsel was
incompetent, Rogers has failed to state what additional allegations counsel
could have made in order to comply with the trial court’s instructions on
amending—and curing the defects of—her first amended complaint. As
noted, an appellant has both the burden of affirmatively demonstrating error
(Scott v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at p. 752) and
the burden of showing with specificity how the complaint can be amended to
state a valid cause of action (Rakestraw v. California Physicians’ Service,
supra, 81 Cal.App.4th at pp. 43-44). Rogers has done neither.

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      Rogers also makes a cursory argument consisting of a few short
paragraphs, with no citation to the record or to any authority, that Wells
Fargo failed to “negotiate with [her] in good faith.” She asserts that Wells
Fargo employed a “delay and stall” tactic whereby it required her to “produce
reams of paperwork and be placed on a three-month payment plan to see if
[she] was creditworthy.” She states that under this payment plan, Wells
Fargo agreed to “take [the Loan] out of collection and refinance the property”
if Rogers was able to make two monthly payments of $10,291.28 and a
payment of $419,828.80 in the third month. Wells Fargo agreed to this
knowing Rogers “could not make the third monthly payment” so that it could
“proceed with the foreclosure.”
      This argument fails for several reasons. First, we generally do not
consider arguments made for the first time on appeal. (Dowling v. Farmers
Ins. Exch. (2012) 208 Cal. App. 4th 685, 696.) Second, “[w]e may disregard a
[party’s] statements of fact when those statements are unsupported by
citations to the record. [Citation.] And we will not scour the record on our
own in search of supporting evidence.” (Sharabianlou v. Karp (2010)
181 Cal. App. 4th 1133, 1149.) Third, we will treat as forfeited any issue that
is not supported by identifiable legal argument or proper citation of
authority. (Okorie v. Los Angeles Unified School Dist. (2017) 14 Cal. App. 5th
574, 600; Keyes v. Bowen (2010) 189 Cal. App. 4th 647, 655.) Here, Rogers
mentions this payment plan and refinance agreement for the first time on
appeal. She has not cited to anything in the record to support her factual
assertions. She has also failed to set forth any legal argument or explanation
as to how this alleged tactic or agreement violated any law, or how any of
these allegations supports any of her causes of action. We therefore
disregard these new allegations and treat this argument as forfeited.

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      In sum, Rogers has failed to advance any meritorious argument to show
the trial court erred and has also failed to show she can amend her complaint
to state a valid cause of action. Accordingly, we affirm the court’s judgment
dismissing her action with prejudice.
                                 DISPOSITION
      The trial court’s December 19, 2018, judgment of dismissal with
prejudice in favor of defendants and against Rogers is affirmed. Defendants
shall recover their costs on appeal.

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                                         _________________________
                                         Petrou, J.

WE CONCUR:

_________________________
Siggins, P.J.

_________________________
Jackson, J.

Rogers v. Wells Fargo Bank, N.A. et al./A156555

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