Van Horst v. JP Morgan Chase Bank CA2/6 ( 2013 )

Filed 7/22/13 Van Horst v. JP Morgan Chase Bank CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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 SIX
EZIO AUGUSTO VAN HORST, et al., 2d Civil No. B241982
(Super. Ct. No. 56-2009-
Plaintiffs and Appellants, 00360919-CU-OR-SIM)
(Ventura County)
v.
JP MORGAN CHASE BANK, N.A., et al.,
Defendants and Respondents.
Ezio and Vergie Van Horst appeal from the judgment entered after the trial
court sustained, without leave to amend, a demurrer to their fourth amended complaint.
Appellants filed this action against the beneficiary and trustee of the deed of trust
securing their home loan, alleging respondents breached a contract to modify the terms of
the loan. Alternatively, appellants alleged, respondents' refusal to modify the loan
created a cause of action for promissory estoppel. The trial court found no "reasonable
probability" appellants could amend their complaint to state a cause of action on either
theory because they had not identified the terms of any executed contract and because
they had previously asked the court to take judicial notice of a letter in which appellants
acknowledged that respondents had not promised to renegotiate or modify the loan.
Appellants now contend the trial court erred in concluding they had not alleged a cause of
action for promissory estoppel, in relying on the letter and in using "reasonable
probability" rather than "reasonable possibility" as the standard for determining whether
to grant leave to amend. We affirm.
Facts
Appellants financed the purchase of their house in Simi Valley with a loan
secured by a deed of trust on the property. Respondents are the beneficiary and trustee of
the deed of trust. As relevant here, appellants' fourth amended complaint alleges that
they filed for bankruptcy protection in August 2009. In September 2009, appellants filed
an adversarial complaint against respondents in the bankruptcy action. Appellants allege
that counsel for respondents assured them respondents would renegotiate the terms of
their loan if appellants dismissed the adversarial complaint. They did so, but the loan has
still not been renegotiated and respondents are threatening to initiate a foreclosure
proceeding.
In opposing respondents' demurrer to their second amended complaint,
appellants requested that the trial court take judicial notice of correspondence between
the parties. One of the letters included in the request for judicial notice was written by
appellant Ezio Van Horst and was sent to an attorney representing respondent Chase
Home Finance LLC. It states: "Based on our conversation you stated to me that if I
voluntarily dismiss the Adversary Complaint that you and/or attorney Chris Yoo would
send me the Loan Modification documents to begin and/or to pursue negotiations of a
loan modification/workout of our secured property 25 Humboldt St., Simi Valley, CA
93065 with your client Chase again. [¶] I understand that there is no guarantee that a
loan modification will be granted that it is dependent on your client Chase to review the
information provided and to accept or grant a Loan Modification/Workout. However
what assurances do I have that we will be provided the necessary time to actually try and
work on a Loan Modification/Workout with your client Chase before any foreclosure sale
is scheduled?"
Appellants' fourth amended complaint attempts to allege a cause of action
for promissory estoppel, based on respondents' breach of a promise to renegotiate or
modify the terms of the loan. Relying on the letter quoted above, the trial court sustained
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respondents' demurrer to the promissory estoppel claim without leave to amend. It
reasoned the letter "reflects that [appellants] knew that there was no guarantee that the
loan would be worked out."
Standard of Review
A demurrer tests the legal sufficiency of the complaint and should be
sustained if the facts alleged in the complaint fail to state a cause of action as a matter of
law. (Balikov v. Southern California Gas Co. (2001) 94 Cal.App.4th 816, 819.) On
appeal, we review de novo the trial court's order sustaining the demurrer. We assume the
truth of all material facts properly pleaded, as well as facts that may reasonably be
inferred or implied from those expressly alleged. We also consider any facts that have
properly been the subject of judicial notice. (Evans v. City of Berkeley (2006) 38 Cal.4th
1, 5; Yun Hee So v. Sook Ja Shin (2013) 212 Cal.App.4th 652, 662.) We disregard any
contentions, deduction or conclusion of fact or law that have been alleged in the
complaint. (People ex rel. Gallegos v. Pacific Lumber Co. (2008) 158 Cal.App.4th 950,
957.) We also "give the complaint a reasonable interpretation, and read it in context."
(Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)
"Two separate standards are employed to review the ruling on a demurrer
that has been sustained without leave to amend. (G.L. Mezzetta, Inc. v. City of American
Canyon (2000) 78 Cal.App.4th 1087, 1091.) First, we review the complaint de novo to
determine whether it alleges sufficient facts to state a cause of action. We then apply an
abuse of discretion standard to determine whether there is a reasonable possibility that the
complaint could be cured by amendment. (Zelig v. County of Los Angeles (2002) 27
Cal.4th 1112, 1126.) If the complaint could be cured by amendment, 'the trial court has
abused its discretion and we reverse; if not, there has been no abuse of discretion and we
affirm. [ Citations.] The burden of proving such reasonable possibility is squarely on the
plaintiff. [Citation.]' (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657,
1662.)" (Heritage Oaks Partners v. First American Title Ins. Co. (2007) 155
Cal.App.4th 339, 344.)
3.
Discussion
The elements of a cause of action for promissory estoppel are: "(1) a
promise, (2) the promisor should reasonably expect the promise to induce action or
forbearance on the part of the promisee or a third person, (3) the promise induces action
or forbearance by the promisee or a third person (which we refer to as detrimental
reliance), and (4) injustice can be avoided only by enforcement of the promise." (West v.
JP Morgan Chase Bank, NA (2013) 214 Cal.App.4th 780, 803.) The doctrine does not
apply " ' in the absence of a showing that a promise had been made upon which the
complaining party relied to his prejudice . . . .' [Citation.] The promise must, in addition,
be 'clear and unambiguous in its terms.' " (Garcia v. World Savings, FSB (2010) 183
Cal.App.4th 1031, 1044.)
Appellants' fourth amended complaint alleges that employees of
respondents promised appellants that respondent would modify their loan if they
dismissed the adversarial complaint in their bankruptcy action. Appellants allege that
they dismissed their adversarial complaint in reliance on that promise. Respondents
breached the promise because they have refused to modify the loan.
Contrary to these allegations, appellants' letter to respondent's counsel
states that, if appellants dismissed their adversarial complaint, respondents would send
them loan modification documents "to begin and/or to pursue negotiations of a loan
modification/workout[.]" The letter further states that appellants "understand that there is
no guarantee that a loan modification will be granted that it is dependent on your client
Chase to review the information provided and to accept or grant a Loan Modification/
Workout." The trial court relied on this letter in sustaining respondents' demurrer without
leave to amend, reasoning that appellants' letter "reflects that [appellants] knew that there
was no guarantee that the loan would be worked out."
Appellants contend the trial court erred because the complaint could be
amended to allege that respondents breached a promise to negotiate with appellants in
good faith to modify their loan. But appellants' fourth amended complaint does not
allege the breach of a promise to negotiate in good faith. It alleges the breach of a
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promise to modify a loan. Appellants' letter demonstrates that, contrary to this allegation,
appellants knew the loan modification had not been promised or approved. As the trial
court correctly concluded, the admission in appellants' letter prevents them from alleging
a cause of action for promissory estoppel because it shows both that respondents did not
make a clear promise to approve a loan modification and that appellants did not dismiss
their adversarial complaint in reliance on any promise.
Appellants contend the trial court erred in taking judicial notice of the letter
and in relying on it to sustain the demurrer. Any error in this regard was, of course,
invited by appellants because they made the request for judicial notice themselves.
(Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403.) "If the appellant offers inadmissible
matter in evidence, he or she cannot complaint of its admission." (9 Witkin, Cal.
Procedure (5th ed. 2008) Appeal, § 390 , p. 448.)
The trial court also correctly denied appellants leave to amend their
complaint. Appellants propose to amend their complaint to allege breach of a promise to
negotiate in good faith for a loan modification. That allegation, however, directly
contradicts the allegations in their previous complaints that respondent promised a loan
modification. California's pleading rules, while liberal, do not permit amendments that
"omit harmful allegations, without explanation, from previous complaints to avoid
attacks raised in demurrers or motions for summary judgment." (Deveny v. Entropin,
Inc.(2006) 139 Cal.App.4th 408, 425.) Factual statements made in a pleading "are not
merely evidence of the matter stated, but operate as 'a conclusive concession of the truth
of [that] matter,' thereby 'removing it from the issues.' . . . In other words, a pleaded fact
is conclusively deemed true as against the pleader." (Dang v. Smith (2010) 190
Cal.App.4th 646, 657, quoting 1 Witkin, Cal. Evidence (4th ed. 2000) Hearsay, § 97, p.
799, emphasis omitted.) Thus, a pleading may not be amended so as to contradict factual
allegations made in prior pleadings. "Because the original allegation is conclusively
deemed true, the pleader is not permitted to assert its logical opposite." (Dang v. Smith,
supra, 190 Cal.App.4th at p. 658, emphasis omitted.)
5.
Here, appellants pleaded the existence of a promise to modify their loan.
They now seek to amend the pleading to allege a promise to negotiate in good faith for a
loan modification. Because that allegation would directly contradict their previous
allegations, the trial court correctly denied leave to amend.
In its minute order, the trial court sated it found "no reasonable probability"
appellants could amend their pleading to state a cause of action. Appellants contend the
trial court erred because the proper standard is a "reasonable possibility" the defect could
be cured by amendment. For the reasons stated above, however, appellants were not
prejudiced by any error in this regard because their proposed amendment directly
contradicts their prior pleadings.
Conclusion
The judgment is affirmed. Costs to respondents.
NOT TO BE PUBLISHED.
YEGAN, J.
We concur:
GILBERT, P.J.
PERREN, J.
6.
Barbara A Lane, Judge
Superior Court County of Ventura
______________________________
Ezio A. Van Horst and Virgie E Van Horst, in pro per, Appellants.
S. Christopher Yoo and Marvin B. Adviento, for Respondents.
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