Nia v. Amip Management CA2/5 ( 2020 )

Filed 12/29/20 Nia v. Amip Management CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
STEVEN NIA, B297472
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. LC107294)
v.
AMIP MANAGEMENT, LLC et
al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of Los
Angeles County, Virginia Keeny, Judge. Affirmed.
Lewis R. Landau, for Plaintiff and Appellant.
Ghidotti │Berger and Shannon C. Williams, for Defendants
and Respondents AMIP Management, LLC; Ron McMahan; and
FCI Lender Services, Inc.
I. INTRODUCTION
In a second amended complaint, plaintiff and appellant
Steven Nia asserted causes of action against defendants and
respondents AMIP Management, LLC (AMIP); Ron McMahan
(McMahan); and FCI Lender Services, Inc. (FCI) for wrongful
foreclosure, breach of contract, fraud, negligent
misrepresentation, and promissory estoppel.1 The trial court
sustained defendants’ demurrer to the second amended complaint
without leave to amend and plaintiff appeals. We affirm.
II. BACKGROUND
According to plaintiff’s second amended complaint and
attached documents, plaintiff owned and lived in a home on
Medley Drive in Encino (Property). On or about
September 10, 2007, plaintiff obtained a $1,225,250 loan from
Countrywide Bank, FSB. On September 17, 2017, a deed of trust
securing the loan was recorded.
1 Plaintiff asserted the same causes of action against PROF-
2013-S3 Legal Title Trust by U.S. Bank National Association as
Legal Title Trustee (U.S. Bank) (erroneously sued as U.S. Bank
National Association as Trustee for PROF-2013-S3 Remic Trust,
III); Recontrust Company, N.A.; and Barrett Daffin Frappier
Treder & Weiss, LLP (Barrett Daffin). Plaintiff also asserted a
single cause of action for constructive trust against Magnum
Property Investments, LLC (Magnum). None of these defendants
is a party to this appeal (pursuant to plaintiff’s, U.S. Bank’s, and
Magnum’s stipulations, we dismissed plaintiff’s appeal with
respect to U.S. Bank and Magnum).
2
On January 30, 2015, Barrett Daffin, the trustee for the
deed of trust, commenced foreclosure proceedings by recording a
notice of default and election to sell under deed of trust (default
notice). The default notice stated that the loan was in default as
of May 1, 2013, and the amount of the default was then
$124,751.49.
Defendants informed plaintiff of their intention to foreclose
on and sell the Property on Monday, May 7, 2018, at 11:00 a.m.
On Friday, May 4, 2018, plaintiff had discussions with McMahan,
AMIP’s founder and manager, about arranging for a financier to
purchase the promissory note and deed of trust from AMIP, the
promissory note and deed of trust’s then current holder.
McMahan agreed to a net price of $1,080,000. McMahan
represented that AMIP would postpone the foreclosure sale to
allow plaintiff to deliver to AMIP the terms of plaintiff’s offer in
writing.
On Sunday, May 6, 2018, real estate broker R. Joseph
Kerendian e-mailed a letter of intent to McMahan.2 The letter of
intent’s terms included a net purchase price of $1,080,000, a
seven-day due diligence period apparently for the buyer to
inspect loan documents, an agreement by AMIP to postpone the
foreclosure sale for 45 days, and a 15-day escrow period. The
letter of intent identified the buyer as “Shatar Holdings, LLC
and/or assignee.” The letter of intent concluded, in part, “If
accepted, the terms and conditions of this letter may be
incorporated into a mutually acceptable Purchase Contract or
Escrow Instructions.”
2 The letter of intent to which plaintiff’s second amended
complaint apparently referred was addressed to FCI and dated
May 4, 2018.
3
On Monday, May 7, 2018, at 8:19 a.m., McMahan sent an e-
mail to Kerendian stating that “[t]he net proceeds in [the] offer
[were] acceptable.” McMahan expressly represented that the
foreclosure sale scheduled for later that morning would be
postponed for one day to May 8, 2018, to allow plaintiff to provide
proof of funds.
Plaintiff attached McMahan’s May 7, 2018, e-mail to the
second amended complaint. The e-mail was sent to Kerendian,
plaintiff, and others, and bore the salutation “Hello Everyone.”
We set forth the e-mail’s entire terms:
“The net proceeds in your offer are acceptable, however
there are several items that require clarification.
“First, we require proof of funds necessary to purchase the
note. Please provide today.
“Second, we will not agree to postpone the sale for 45 days.
The sale will be postponed as required for timeframes necessary
to complete the transaction. Today, the sale will be postponed for
one day pending acceptable proof of funds in the amount of
$1,100,000.
“The buyer shall not have seven days to inspect the
collateral. The original collateral will be available for inspection
in our office in Seal Beach. This should be able to be completed
in a couple of hours.
“The seller will draft the form of Mortgage Loan Purchase
Agreement to be used for the transaction. Once the buyer has
accepted the final form of document, closing will occur within 48
hours.
“Collateral will be immediately deliverable to the buyer
upon closing.
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“The current borrowers will execute a global release of any
and all existing or future litigation related to the loan origination
or servicing.
“Thanks, let me know if this is acceptable.”
On May 7, 2018, the sale went forward and Magnum
purchased the Property for $1,406,000. At 5:11 p.m., that day,
Kerendian sent an e-mail to McMahan purportedly attaching
proof of funds for the purchase of the Property—a copy of the
proof of funds is not a part of the record on appeal.3 Kerendian
noted that earlier that afternoon McMahan had informed him the
Property was sold that morning. Kerendian requested that the
foreclosure deed not be recorded and the sale be undone. Within
minutes, McMahan responded that the proof of funds was
unacceptable because it was for “SEPARZADEH MAYER,” a
party other than the purchaser listed in the letter of intent.
McMahan stated that the sale would not be undone.
The second amended complaint alleged that had McMahan
not agreed to postpose the sale, plaintiff “intended to use the
funds available to him from the financier to pay[ ]off the
[p]romissory [n]ote prior to the sale date to prevent the sale of the
property or in the alternative to appear at the foreclosure sale as
[a] bidder.” Plaintiff did not exercise these options in reliance on
defendants’ false promises, that is, defendants’ promises to accept
3 The second amended complaint alleged that plaintiff
provided “proof of the availability of funds in excess of
$2,400,000,” and attached an exhibit that purported to
demonstrate such availability. The exhibit attached to the
complaint, however, did not include a proof of funds. Further, at
oral argument, counsel for plaintiff conceded that plaintiff had
not alleged that he had more than $1.1 million available to pay
off the promissory note or to bid at the sale.
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plaintiff’s offer and postpone the sale. The only substantive
allegation against FCI in the second amended complaint was that
it was acting on behalf of U.S. Bank, the holder of the promissory
note prior to and at the time of the foreclosure sale.
AMIP , McMahan, and FCI demurred to the second
amended complaint. The trial court sustained the demurrer
without leave to amend and entered judgment for defendants.
III. DISCUSSION
A. Standard of Review
“When reviewing a judgment of dismissal based on the
sustaining of a demurrer without leave to amend, an appellate
court first exercises its independent judgment to determine
‘whether the complaint states a cause of action as a matter of
law. [Citation.]’ [Citation.] ‘“We treat the demurrer as
admitting all material facts properly pleaded, but not
contentions, deductions or conclusions of fact or law. [Citation.]
We also consider matters which may be judicially noticed.”
[Citation.] Further, we give the complaint a reasonable
interpretation, reading it as a whole and its parts in their
context. [Citation.]’ [Citation.]” (Brakke v. Economic Concepts,
Inc. (2013) 213 Cal.App.4th 761, 766.) “While the ‘allegations [of
a complaint] must be accepted as true for purposes of demurrer,’
the ‘facts appearing in exhibits attached to the complaint will
also be accepted as true and, if contrary to the allegations in the
pleading, will be given precedence. [Citation.]’ [Citations.]” (Id.
at p. 767.)
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B. Analysis
1. Wrongful Foreclosure
In sustaining defendants’ demurrer to plaintiff’s wrongful
foreclosure cause of action, the trial court ruled that tender was
required. It explained that “[i]n this case, plaintiff alleges he
tendered the amount of his debt by bringing to defendants an
offer to purchase the deed of trust. A tender must be one of full
performance, and must be unconditional to be valid. [(Civ. Code,
§ 1486.)] In this case, based on a review of the allegations of the
complaint and the Notice of Trustee’s sale, plaintiff did not
tender the full amount of the debt but rather made an offer to
purchase the deed of trust for a portion of the amount of the debt.
This cannot qualify as tender. Further, as the court previously
observed in ruling on previous demurrers, plaintiff does not
explain what was illegal, fraudulent or oppressive about the sale.
It is undisputed that plaintiff was in default and through
bankruptcy and attempted 11th hour negotiations tried but failed
to avoid foreclosure.”
“To obtain the equitable set-aside of a trustee’s sale or
maintain a wrongful foreclosure claim, a plaintiff must allege
that (1) the defendants caused an illegal, fraudulent, or willfully
oppressive sale of the property pursuant to a power of sale in a
mortgage or deed of trust; (2) the plaintiff suffered prejudice or
harm; and (3) the plaintiff tendered the amount of the secured
indebtedness or was excused from tendering. [Citation.]
Recognized exceptions to the tender rule include when (1) the
underlying debt is void, (2) the foreclosure sale or trustee’s deed
is void on its face, (3) a counterclaim offsets the amount due, (4)
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specific circumstances make it inequitable to enforce the debt
against the party challenging the sale, or (5) the foreclosure sale
has not yet occurred. [Citations.].)” (Chavez v. Indymac
Mortgage Services (2013) 219 Cal.App.4th 1052, 1062 (Chavez).)
To survive a demurrer on a wrongful foreclosure claim, a
plaintiff must allege a full tender of the debt. (Stebley v. Litton
Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526.) At the
time of the foreclosure sale, the amount unpaid on the loan,
together with costs, was $1,670,399.77. Plaintiff alleged in his
second amended complaint that he offered to pay off the loan at
the discounted price of $1.1 million. Accordingly, he did not
allege a tender of the full indebtedness and the trial court
properly sustained defendants’ demurrer to the wrongful
foreclosure cause of action.
Citing Chavez, supra, 219 Cal.App.4th 1052, Blankenchip
v. CitiMortgage, Inc. (E.D.Cal. Dec. 3, 2014, No. 2:14-2309 WBS
AC) 2014 WL 6835688; and Menan v. U.S. Bank N.A. (E.D.Cal.
2013) 924 F.Supp.2d 1151, plaintiff contends that no tender was
required. These authorities do not support plaintiff’s contention.
2. Breach of Contract
The trial court ruled that the e-mails attached to the
second amended complaint showed that the parties never had an
enforceable written agreement. “Instead, the parties were still
negotiating terms of a contract that was acceptable to both. They
were unable to come to acceptable terms with an acceptable proof
of funds in order to stop the foreclosure.”
Plaintiff does not address his breach of contract cause of
action in his opening brief on appeal, and expressly disavows any
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claim of error based on a breach of contract theory in his reply
brief. We accept plaintiff’s waiver.
3. Fraud, Negligent Misrepresentation, and Promissory
Estoppel
The trial court addressed together defendants’ demurrer to
plaintiff’s fraud and promissory estoppel causes of action.4 It
ruled, in part, “Plaintiff’s claim is based on the alleged lie
defendant told in representing that the foreclosure would be
postponed one day. But in examining the e[-]mail exchange it is
clear that no such firm representation had been made. Instead,
the parties were negotiating an 11th hour sale of the deed of
trust. There is no statement made upon which plaintiff could
have reasonably relied. Instead, in his e[-]mail dated May 7 at
8:19 a.m., Mr. McMahon [sic] was making a [counteroffer] which
4 The trial court’s tentative ruling, which the court adopted
as its final order, did not expressly address plaintiff’s negligent
misrepresentation cause of action. Because the record on appeal
does not contain a reporter’s transcript of the demurrer hearing,
we cannot determine whether the court addressed plaintiff’s
negligent misrepresentation cause of action during oral
argument. Plaintiff does not address the court’s omission in his
briefs on appeal. Because we review a trial court’s ruling on a
demurer de novo, and, as we explain below, plaintiff’s negligent
misrepresentation cause of action, like his fraud and promissory
estoppel causes of action, required that McMahan’s alleged
promise to postpone the foreclosure sale for one day damaged
plaintiff—an element the sale deed and plaintiff’s counsel’s
representations at oral argument disprove—any trial court error
in failing to address expressly the negligent misrepresentation
cause of action was harmless.
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required further acceptance or negotiation. Plaintiff did not
respond prior to the sale to state that he accepted this offer or to
make a [counteroffer]. Accordingly, based on the alleged
contractual documents submitted by plaintiff, there was no
contract or firm promise prior to the sale.”
As an alternative ground for sustaining the demurrer, the
trial court concluded that plaintiff failed to allege detrimental
reliance sufficiently: “If plaintiff had known . . . defendant was
lying [about postponing the sale] what would or could he have
done differently? Plaintiff states he could have used the funds
available to him by the financier to pay off the promissory note
prior to the sale date or appear at the foreclosure sale as a bidder.
Significantly, plaintiff fails to allege that the financier (who was
to pay $1[.1 million] to buy the deed of trust) could make
available the amount owed under the loan $1,670,399.77.”
The elements of fraud, negligent misrepresentation, and
promissory estoppel share an element: the plaintiff must have
been damaged by the defendant’s alleged statement. (Golden
Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19
Cal.App.5th 399, 428, [“The elements of fraud [include] . . .
resulting damage”], internal quotation marks omitted; Apollo
Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158
Cal.App.4th 226, 243 [“The elements of negligent
misrepresentation [include] . . . resulting damage”]; Jones v.
Wachovia Bank (2014) 230 Cal.App.4th 935, 945 [“The elements
of a promissory estoppel claim [include] . . . the party asserting
the estoppel must be injured by his reliance”], internal quotation
marks omitted.) Each of plaintiff’s fraud, negligent
misrepresentation, and promissory estoppel causes of action
alleged that plaintiff was damaged as follows: in the absence of
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McMahan’s agreement to postpone the sale, he “intended to use
the funds available to him from the financier to pay[ ]off the
[p]romissory [n]ote prior to the sale date to prevent the sale of the
property or in the alternative to appear at the foreclosure sale as
[a] bidder. However, in reliance to the promises made by
[d]efendant[s], [p]laintiff did not pursue the said options and
changed his position in reliance upon the promise of acceptance of
his offer and postponement of the foreclosure sale by . . .
[d]efendants.”
The amount owed under the loan was $1,670,399.77 and
the property sold for $1,406,000. Because plaintiff had available
only $1.1 million, he could not have paid off the promissory note
or successfully bid on the property at the sale. Accordingly, he
did not suffer damage.
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IV. DISPOSITION
The judgment is affirmed. Defendants are awarded their
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
KIM, J.
We concur:
BAKER, Acting P. J.
MOOR, J.
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