Filed 11/25/02

CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

SUSAN WANGER,

Plaintiff and Appellant,

EMC MORTGAGE CORPORATION,

Defendant and Respondent.

F037422

(Super. Ct. No. 604565-2)

OPINION

APPEAL from a judgment of the Superior Court of Fresno County. Stephen J.

Kane and Edward Sarkisian, Jr., Judges.

John L. Flowers for Plaintiff and Appellant.

Rosenthal, Withem & Zeff, Michael L. Withem and Matthew D. Reinstein for

Defendant and Respondent.

-ooOoo-

Appellant Susan Wanger appeals from the grant of summary judgment in favor of

the mortgage company that foreclosed upon real estate that secured her loan. Wanger

contends triable issues of material fact exist concerning her claims for breach of contract,

negligence, violation of statutory duties, and interference with prospective economic

advantage. We agree and reverse judgment.

*Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified

for publication with the exception of parts I., II., III., V., VI., and VII. of DISCUSSION.

PROCEDURAL BACKGROUND

Wanger filed a complaint on January 28, 1998, to set aside the trustee’s sale of a

single family residential real estate located on West Alluvial Avenue in Fresno,

California (the Property). After a series of demurrers, on November 22, 1999, Wanger

filed her fifth amended complaint against respondent EMC Mortgage Corporation (EMC)

and others. The fifth amended complaint alleges claims for breach of contract,

negligence, violation of statutory duties, and interference with prospective economic

advantage.

On August 21, 2000, EMC filed a motion for summary judgment or in the

alternative summary adjudication, a separate statement of undisputed facts, and

supporting declarations. On September 8, 2000, Wanger filed an opposition to the

motion for summary judgment, a response to EMC’s separate statement, and supporting

declarations. On September 15, 2000, EMC filed evidentiary objections to the

declaration of Wanger and to exhibits A through Q attached to the declaration of her

attorney.

The court issued a written tentative ruling granting the motion for summary

judgment. Wanger did not request oral argument. On September 21, 2000, the superior

court adopted its tentative ruling as the order of the court and sustained EMC’s

evidentiary objections to five documents attached as exhibits D, G, K, M and Q to the

declaration of Wanger’s attorney. Wanger filed a timely notice of appeal.

FACTUAL BACKGROUND

In 1991, Wanger obtained a loan from First California Mortgage Company (First

California)1 and signed a promissory note and a deed of trust on the Property. In October

1993, Wanger and First California discussed a loan modification reducing the interest

1For purposes of this opinion, we refer to First California Mortgage Company and

Mortgage Service America Co., a company with which it appears to have merged, as First

California.

rate and the monthly payments. A modification document was sent to Wanger, which

she signed and returned to First California. Wanger thought that the modification had

become effective, but uncertainty arose as to whether the modification was effective.

Part of this uncertainty appears to have been caused when First California was unable to

locate the loan file.

First California eventually took the position that the modification was not

effective. Wanger had not been making monthly payments under the loan and, based on

the original loan terms, First California claimed $26,616.96 was owed. Wanger paid

$24,999.35 by cashier check on February 3, 1995, but continued to dispute the amount

owed and claimed violations of the Real Estate Settlement Procedures Act of 1974

(RESPA), as amended, 12 United States Code section 2601 et seq. Also, in February

1995, Wanger leased the Property to a husband and wife and, presumably, she had

moved from the Property before renting it.

In April 1995, Wanger asserts she reached an agreement with First California to

resolve her claims. Under the agreement, First California was to credit the sum of

$7,352.75 against her loan and Wanger was to commence regular monthly payments of

$1,470.55 on June 1, 1995. From July through November of 1995, Wanger claims she

sent her monthly mortgage payments to First California.

In the meantime, First California sold Wanger’s loan to EMC. The transfer was

effective on April 17, 1995. Both First California and EMC sent notice of the transfer to

Wanger at the Property address. However, Wanger had moved to Washington and did

not receive these notices. In an April 14, 1995, letter, Wanger had notified First

California of her new mailing address in Seattle.

In September 1995, Wanger deeded the Property to her daughter, Lisa Marie

Keller. In her deposition testimony, Wanger testified Keller was the executor of her

estate and she transferred title to the Property to Keller for estate planning purposes.

In December 1995, EMC caused the law firm acting as trustee under the deed of

trust to file a notice of default. Wanger states she first learned of EMC and its rights as

assignee of the note and deed of trust on December 9, 1995, when she received a notice

of trustee’s sale from the trustee. As a result of Wanger’s communications with the

trustee, this notice of trustee’s sale was rescinded. Also in December, Wanger obtained

the eviction of the tenants who had stopped paying rent, and she listed the Property for

sale with a real estate broker.

During 1996 and 1997, Wanger and EMC were not able to settle their dispute.

EMC resumed nonjudicial foreclosure proceedings. A notice of default was recorded on

September 16, 1997. EMC purchased the Property with a credit bid at the January 13,

1998, trustee’s sale. Two weeks later, Wanger began her lawsuit against EMC and the

trustee. The law firm that acted as trustee under the deed of trust settled with Wanger in

June 1999 and is no longer involved in this lawsuit.

DISCUSSION

I. Wanger Did Not Waive the Right to Appeal*

EMC contends that “Wanger waived the right to appeal the Summary Judgment

when she accepted the trial court’s tentative ruling without oral argument.” We reject

this argument because, among other things, it would not advance the economical use of

judicial resources. As to the legal issue, we will not create a new bright line rule that

waiver of the right to appeal must be implied when a party does not pursue oral argument

after a trial court has issued its tentative ruling. As to the factual issues of intent and

authorization raised under the general principles of law governing waiver of the right to

appeal, there is an insufficient basis for implying that counsel for Wanger intended to

relinquish that right and Wanger authorized its relinquishment. (Cf. Linsk v. Linsk (1969)

70 Cal.2d 272, 278; 1 Witkin, Cal. Procedure (4th ed. 1997) Attorneys, § 283, pp. 351-

352 [an express waiver by counsel made without consideration or benefit to appellant

must be authorized by appellant].)

*See footnote, ante, page 1.

II. Standard of Review for Summary Judgment*

The standards of review applicable to a motion for summary judgment are well

known and we do not undertake to reiterate all of the rules here. (See Code Civ. Proc.,

§ 437c (hereafter section 437c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826

(Aguilar); Brantley v. Pisaro (1996) 42 Cal.App.4th 1591.) Nevertheless, we set forth

some of the general principles governing motions for summary judgment or summary

adjudication as background for the more specific principles that are significant in this

case.

A. General Principles

We independently review whether a triable issue of material fact exists and

whether the moving party is entitled to summary judgment as a matter of law. (Merrill v.

Navegar, Inc. (2001) 26 Cal.4th 465, 476.) Notwithstanding the rule of independent

appellate review of the existence of a triable issue of material fact, an abuse of discretion

standard is applied to the superior court’s rulings on (1) evidentiary objections (Walker v.

Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169) and (2) matters

committed to its discretion by the express language of section 437c. (See id., subds. (b),

(e).)

A triable issue of fact exists when the evidence reasonably permits the trier of

fact, under the applicable standard of proof, to find the purportedly contested fact in favor

of the party opposing the motion. (Aguilar, supra, 25 Cal.4th at p. 850.)

A defendant moving for summary judgment bears the burden of persuasion

throughout the legal analysis of the motion and bears the initial burden of producing

evidence “to make a prima facie showing of the nonexistence of any triable issue of

material fact .…” (Aguilar, supra, 25 Cal.4th at p. 850.) If the moving party carries the

*See footnote, ante, page 1.

burden of production, then it shifts to the opposing party to make a prima facie showing

of the existence of a triable issue of fact. (Ibid.)

Before analyzing either the showing made by the moving party (step two) or the

showing made the opposing party (step three), the first step for a court analyzing a

motion for summary judgment is to “identify the issues framed by the pleadings” because

the motion is directed to the opponent’s allegations and “showing there is no factual basis

for relief on any theory reasonably contemplated by the opponent’s pleading.” (AARTS

Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1064; see

Brantley v. Pisaro, supra, 42 Cal.App.4th at p. 1602 [describing the three-step analysis].)

B. Specific Principles

This appeal raises questions that require the application of specific principles

regarding the identification of issues framed by the pleadings, the identification of

undisputed facts, and the review of evidence and the inferences drawn from that

evidence.

1. Issue Identification

The moving party’s contribution to the first step of identifying the issues framed

by the pleadings is set forth in the documents supporting its motion, which include: “(1)

Notice of motion by [moving party] for summary judgment or summary adjudication or

both; [¶] (2) Separate statement of undisputed material facts in support of [moving

party’s] motion for summary judgment or summary adjudication or both; [and] [¶] (3)

Memorandum of points and authorities in support of [moving party’s] motion for

summary judgment or summary adjudication or both .…” (Cal. Rules of Court, rule

342(c).)2

When a moving party seeks summary adjudication, “whether separately or as an

alternative to the motion for summary judgment, the specific cause of action, affirmative

2All further rule references are to rule 342 of California Rules of Court.

defense, claims for damages, or issues of duty must be stated specifically in the notice of

motion and be repeated, verbatim, in the separate statement of undisputed material facts.”

(Rule 342(b).) Similarly, Rule 342(d) provides, “The Separate Statement of Undisputed

Material Facts in support of a motion must separately identify each cause of action,

claim, issue of duty or affirmative defense, and each supporting material fact claimed to

be without dispute with respect to the cause of action, claim, issue of duty, or affirmative

defense.”

When a case, like this one, is poorly pled, the first step of identifying the issues

framed by the pleadings requires more effort and has increased importance. In this case,

the fifth amended complaint may be regarded as poorly pled because it contains four sets

of paragraphs grouped together that are labeled as causes of action, but those paragraph

groups contain more than one theory of liability.3 For instance, the third count for breach

of statutory duties refers to violations of the provisions of RESPA and violations of “the

provisions of Civil Code Sections 2924(b), (f) and (h) [sic].” Thus, what Wanger refers

to as her third cause of action actually contains multiple causes of action, i.e., theories of

liability.

Both EMC’s separate statement and notice of motion state EMC is seeking

summary adjudication of the following issue:

“ISSUE – Each of [Wanger’s] Causes of Action must fail as a matter

of law because there is no evidence to support her claims that EMC …

either breached a written agreement with her or violated an applicable

statute in its handling of her loan, through and beyond foreclosure.”

The catchall manner in which EMC chose to frame the issues to be summarily

adjudicated creates two problems. First, as argued by Wanger, EMC failed to comply

3For purposes of this opinion, (1) each of the four sets of paragraphs grouped together in

the fifth amended complaint and labeled by Wanger as a “cause of action” shall be referred to as

a “count” (see 6 Witkin, Cal. Procedure (4th ed. 1997) Proceedings Without Trial, § 242, p. 657)

and (2) the term “cause of action,” consistent with its meaning in section 437c, subdivision (f),

shall mean a separate theory of liability. (See Lilienthal & Fowler v. Superior Court (1993) 12

Cal.App.4th 1848, 1853.)

with the requirements of Rule 342(d). Second, it is difficult to determine if EMC has

addressed all of the theories of liability reasonably contemplated by the fifth amended

complaint.

a. Compliance with Rule 342

Wanger argues EMC violated Rule 342(d) by not separately identifying each

cause of action in its separate statement and then separately identifying each material fact

without dispute with respect to the cause of action. EMC’s single, catchall statement of

the issues does not comply with Rule 342(d) as it applies to motions for summary

adjudication. A single, catchall statement covering four counts containing several causes

of action wrongly creates the impression that each of the facts following the statement of

the issue is material to each cause of action and, therefore, a dispute as to any one of

those facts precludes summary adjudication as to each cause of action. One consequence

of the single, catchall statement of the issues is that the review of the motion by the

superior court and this court is more burdensome because the courts must identify (1) the

specific theories of liability challenged by the motion and (2) the facts that are material to

each of the challenged theories of liability.

Nevertheless, Wanger had adequate notice of the ground on which EMC sought to

eliminate some of Wanger’s theories of liability and, thus, the superior court did not

abuse its discretion by failing to deny EMC’s motion as procedurally defective. (See

Frazee v. Seely (2002) 95 Cal.App.4th 627, 636 [moving party’s failure to comply with

Rule 342 is, in court’s discretion, proper grounds to deny motion].)

However, the preferred course is to enforce the requirement that a moving party

must identify the undisputed facts that relate to a particular cause of action or other issue

to be summarily adjudicated by setting forth the issue and immediately following it with

the facts material to that issue in one column and the supporting evidence in another

column. (See Rule 342(h).) After the statement of the first issue to be adjudicated and

the material facts and supporting evidence, the second issue to be adjudicated should be

set forth, followed by the material facts and supporting evidence. In this case, it would

not have been erroneous to summarily deny the motion without prejudice to EMC

refiling it with a more specific,4 properly organized separate statement that separately

stated the issues to be summarily adjudicated and identified which facts were material to

which causes of action, i.e., theories of liability.

b. Identification of theories of liability pled

The identification of the issue to be adjudicated is important because a motion for

summary adjudication may be granted only if it completely disposed of “a cause of

action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ.

Proc., § 437c, subd. (f)(1).) In this case, some or all of the counts in the fifth amended

complaint contain more than one cause of action for purposes of summary adjudication.

In such a situation, a defendant may choose to move for summary adjudication of

each cause of action even if it is combined with other causes of action in a single count in

the complaint. (6 Witkin, Cal. Procedure, supra, Proceedings Without Trial, § 242, p.

657.) Conversely, a defendant, like EMC, may choose to challenge an entire count

containing more than one cause of action, rather than challenging each cause of action

separately. The latter choice has its risks, especially when the moving party’s separate

statement fails to comply with Rule 342. One risk is that a moving party may fail to

identify a theory of liability reasonably contemplated by the opponent’s pleadings and

that theory may survive the motion for summary adjudication and defeat the motion for

summary judgment. In addition, a dispute over a fact material to one cause of action, but

not material to other causes of action in the same count, will save the entire count. Once

we have determined that a fact material to one theory of liability in a count is in dispute,

we will end our analysis as to the entire count because of the broad way in which EMC

framed the issue to be adjudicated. Concerns for procedural due process preclude

4For illustrative purposes, a more specific statement of an issue to be summarily

adjudicated would have been: “ISSUE No. [] — The cause of action for violation of RESPA

fails because EMC complied with the provisions requiring notice of a servicing transfer.” (See

Rule 342(h).)

10.

consideration of whether other causes of action pled in the count could have been

summarily adjudicated on the record before us. In particular, the party opposing the

request was not put on notice of a narrower request. (See 3 Weil & Brown, Cal. Practice

Guide: Civil Procedure Before Trial (The Rutter Group 2002) ¶¶ 10:88-10:89, p. 10-31

(rev. #1, 2002) [the rationale for not deciding more narrow issues is that the opposing

party may have limited the triable issues of fact it raised to defeat the motion without

intending to concede other issues].)

The application of these principles to the counts pled in this case will be addressed

in the parts of the Discussion dealing with particular counts.

2. Identification of Undisputed Material Facts

Section 437c, subdivision (b) requires the parties to identify all the material facts

upon which they rely. This requirement is stated with more particularity in Rule 342(d)

which provides: “The Separate Statement of Undisputed Material Facts in support of a

motion must separately identify … each supporting material fact claimed to be without

dispute with respect to the cause of action, claim, issue of duty, or affirmative defense.”

Consequently, the parties must include in their respective separate statements all the facts

upon which the motion or the opposition is founded; the superior court is not required to

search for the presence of a relevant fact elsewhere in the record.

Whether a superior court is subject to an absolute prohibition on consideration of

facts and evidence not referenced in the separate statements is an issue that we do not

reach in this case because the decision of the superior court did not rely on facts or

evidence not referenced in the separate statements. A conflict over this question exists

between the Second District, which has adopted the “Golden Rule of Summary

Adjudication” prohibiting consideration of a fact not set forth in the separate statements

(United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337; see Roger H.

Proulx & Co. v. Crest-Liners, Inc. (2002) 98 Cal.App.4th 182, 198) and the Fourth

District, which disagrees with this rule. (See San Diego Watercrafts, Inc. v. Wells Fargo

Bank, N.A. (2002) 102 Cal.App.4th 308, 311.)

11.

In the present case, EMC’s separate statement sets forth 17 separately numbered

facts that it contended were undisputed. Wanger conceded six of these; the matters

disputed by Wanger will be addressed in the part of the Discussion to which the facts are

relevant.

3. Evidence and Inferences

The connection between a material fact and the evidence that establishes whether

or not it is disputed is made by the parties in their separate statements. Each of the

material facts stated in the moving party’s separate statement “shall be followed by a

reference to the supporting evidence.” (Code Civ. Proc., § 437c, subd. (b).) Similarly,

each material fact an opposing party contends is disputed shall be included in the

opposing party’s separate statement and “shall be followed by a reference to the

supporting evidence.” (Ibid.) The evidence supporting each party’s position concerning

a particular material fact must be set forth in the second column of its separate statement

along with a citation, including reference to the exhibit, title, page and line numbers, to

where the evidence can be found. (Rule 342(d), (f).)

A material fact can be established or controverted by direct evidence or by an

inference reasonably drawn from the evidence. Therefore, in analyzing whether or not

the material facts are in dispute, we must consider all of the evidence and all of the

inferences reasonably drawn therefrom, and must view such evidence in the light most

favorable to the opposing party. (Aguilar, supra, 25 Cal.4th at p. 843.)

An issue of material fact may not be resolved based on inferences, if contradicted

by other inferences or evidence. (Code Civ. Proc., § 437c, subd. (c); Aguilar, supra, 25

Cal.4th at p. 856.) “[T]he court may not weigh the plaintiff’s evidence or inferences

against the defendants’ as though it were sitting as the trier of fact,” but must determine

the question of law of “what any evidence or inference could show or imply to a

reasonable trier of fact.” (Aguilar, at p. 856.) Where the evidence and inferences would

allow a reasonable trier of fact to find the underlying fact in favor of a plaintiff in

12.

accordance with the applicable standard of proof, then a defendant’s motion for summary

judgment must be denied. (Id. at p. 850.)

A reviewing court must consider all the evidence properly identified in the papers

submitted, “except that to which objections have been made and sustained by the

court ….” (Code Civ. Proc., § 437c, subd. (c); Barber v. Marina Sailing, Inc. (1995) 36

Cal.App.4th 558, 561, fn. 2.) Where a plaintiff does not challenge the superior court’s

ruling sustaining a moving defendant’s objections to evidence offered in opposition to the

summary judgment motion, “any issues concerning the correctness of the trial court’s

evidentiary rulings have been waived. [Citations.] We therefore consider all such

evidence to have been ‘properly excluded.’ [Citation.]” (Lopez v. Baca (2002) 98

Cal.App.4th 1008, 1014-1015.)

In this case, the trial court sustained EMC’s objections to certain documents

attached as exhibits D, G, K, M and Q to the declaration of counsel for Wanger. Wanger

has challenged those rulings in her appeal.

III. Breach of Contract*

EMC contends Wanger’s breach of contract claim must fail because (1) the

purported 1993 loan modification never became a binding and enforceable contract or, if

it did, Wanger breached the modification document by failing to pay property taxes; (2)

the reinstatement provisions in the deed of trust required Wanger to pay the entire loan

arrearage, which she did not do; and (3) Wanger’s failure to perform her obligations to

pay principal and interest and to pay property taxes and insurance precludes her claim of

breach.

A. 1993 Loan Modification Agreement

1. Undisputed Facts from EMC’s Separate Statement

EMC’s separate statement establishes as undisputed the facts set forth in the

following two paragraphs.

*See footnote, ante, page 1.

13.

Wanger claims to have signed a two-page loan modification agreement in 1993,

but admits that she never saw any exhibits to it. Wanger claims the 1993 loan

modification agreement reduced her monthly principal and interest payment, which had

been $1,470.55, by approximately $300. In a April 14, 1995, letter to First California,

Wanger stated she was confirming an agreement to settle damages on her loan and

“[r]egular loan payments will commence on June 1, 1995 in the amount of $1470.55.”

Wanger admits (1) she never received any letters written by First California confirming

that her loan was actually modified in 1993, and (2) she did not have the purported 1993

loan modification document notarized or recorded. For loans guaranteed by the Federal

National Mortgage Association (Fannie Mae), a Fannie Mae approval may be a

prerequisite for a modification, but it in no way obligates either the lender or the

borrower to actually enter into the loan agreement.

Wanger made no property tax payments directly to the taxing authority after 1992.

2. EMC’s Inferences and Legal Contentions

Based on the foregoing facts, EMC infers (1) First California did not sign the 1993

loan modification agreement; (2) the parties did not intend the 1993 modification to be a

binding contract unless it was signed on behalf of First California, notarized, and

recorded; and (3) assuming the 1993 modification was binding, Wanger breached its

terms by not paying property taxes as required by paragraph 4 of the loan modification

agreement.

EMC contends Wanger’s contract claim based on the 1993 modification must fail

because there is no signed writing that satisfies the statute of frauds contained in Civil

Code section 1624 and because Wanger is unable to establish an essential element of her

contract claim, i.e., that she performed her obligations under the contract. (See BAJI

No. 10.85.)

3. Wanger’s Inferences and Legal Contentions

In response, Wanger advocates the competing inferences that (1) First California

signed and then lost the fully executed 1993 modification or, alternatively, the 1993

14.

modification became binding when she signed it and (2) she was not required to pay the

Property taxes directly to the taxing authority. Wanger infers First California signed the

1993 modification based on the following evidence.

Wanger testified in deposition that she learned First California signed the

document by talking with Donna Mazzone of First California. Wanger’s declaration says

that she was told in a telephone conversation with First California that the modification

of her loan was effective as of November 1993. In addition, First California prepared the

1993 modification by filling in blanks on a form agreement and sending the modification

to Wanger. It also sent her a copy of Fannie Mae’s October 7, 1993, letter approving the

modification. From these statements and acts by First California, Wanger infers First

California signed the modification or, alternatively, intended to be bound by its written

offer once Wanger expressed her acceptance by signing it. Wanger argues these

inferences are reasonable because, among other things, First California would not have

forwarded her the Fannie Mae approval letter if it intended to reject the very terms it had

considered and placed in the form used for the 1993 modification.

As to the payment of property taxes, Wanger claims the payment was to be made

by the lender from an impound account established from part of the monthly payment

and, therefore, she was not contractually obliged to pay property taxes directly to the

taxing authority.

4. Analysis of Inferences and Legal Contentions

a. Signature on the 1993 modification

The issue of whether or not First California signed the 1993 modification is a

question of fact. Because of the conflicting inferences that may be drawn from the

evidence, the issue is triable. (Code Civ. Proc., § 437c, subd. (c).) The inability to locate

a signed copy of the 1993 modification does not preclude a claim that it was breached. In

Robinson v. Thornton (1969) 271 Cal.App.2d 605, the plaintiff was able to prove the

existence and terms of an enforceable contract to repurchase land using an unsigned

photocopy of the document and other parol evidence.

15.

In addition, EMC has not established the 1993 modification is subject to the

statute of frauds set forth in Civil Code section 1624. EMC does not identify, nor is it

apparent, which of that statute’s seven provisions may apply. First, subdivision (a)(1) of

Civil Code section 16245 does not apply because the 1993 modification might have been

performed in a year. (See Lacy v. Bennett (1962) 207 Cal.App.2d 796, 800-801

[performance within a year of oral agreement for “a long-term loan” was possible though

not probable; statute of frauds in Civ. Code, § 1624 did not apply].) Second, Civil Code

section 1624, subdivision (a)(6)6 does not apply because Wanger is not a real property

purchaser who assumed indebtedness secured by a deed of trust. Third, Civil Code

section 1624, subdivision (a)(7) does not apply to contracts to extend credit secured only

by a single-family residential property.

If, on remand, EMC does not show that a statute of frauds requires the 1993

modification to be signed on behalf of First California, then Wanger may be able to

establish the 1993 modification is a binding contract without a signature. “Whether it

was the parties’ mutual intention that their oral agreement to the terms contained in a

proposed written agreement should be binding immediately [or upon offeree’s signature]

is to be determined from the surrounding facts and circumstances of a particular case and

is a question of fact for the trial court. (Schwartz v. Shapiro (1964) 229 Cal.App.2d 238,

248 …; Columbia Pictures Corp. v. DeToth [(1948)] 87 Cal.App.2d [620,] 629.)

Evidence as to the parties’ understanding and intent in taking what actions they did take

is admissible to ascertain when or whether a binding agreement was ever reached.”

(Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 358.)

5Civil Code section 1624, subdivision (a)(1) requires a writing subscribed by the party to

be charged when the agreement “by its terms is not to be performed within a year from the

making thereof.”

6Civil Code section 1624, subdivision (a)(6) requires a writing subscribed by the party to

be charged when a purchaser of real property agrees “to pay an indebtedness secured by a

mortgage or deed of trust upon the property purchased .…”

16.

Furthermore, the terms of the 1993 modification, as well as the terms of the note

and deed of trust, do not prevent Wanger from proving the modification was binding

without a signature on behalf of First California because those documents do not

explicitly state that the proposed modification “would become operative only when

signed by the parties” (Banner Entertainment, Inc. v. Superior Court, supra, 62

Cal.App.4th at p. 358) or, at least, signed by the party sought to be bound.

b. Payment of property taxes

EMC’s separate statement omits a material fact essential to its alternative position

that Wanger failed to perform her obligation under the 1993 modification to pay property

taxes. Specifically, EMC made no statement that (1) the 1993 modification imposed such

an obligation on Wanger or (2) the parties otherwise agreed that Wanger would pay

property taxes directly to the taxing authority.

Paragraph 4 of the 1993 modification simply states that “Borrower also will

comply with all other covenants, agreements, and requirements of the [deed of trust],

including without limitation, the Borrower’s covenants and agreements to make all

payments of taxes, insurance premiums ….” This provision does not create any new

obligations but incorporates the covenants and agreements contained in the deed of trust.

Under paragraph 4 of the deed of trust, the borrower shall pay all taxes attributable to the

Property and “Borrower shall pay these obligations in the manner provided in paragraph

2, or if not paid in that manner, Borrower shall pay them on time directly to the person

owed payment.” Paragraph 2 of the deed of trust sets forth the obligations of the

borrower and the lender when funds for taxes, rent, and insurance premiums are included

in the monthly payments made by the borrower to the lender. Thus, paragraph 4 of the

deed of trust does not definitively state how payments of property taxes will be made. It

only identifies two alternatives: (1) inclusion of a portion of the taxes in each monthly

payment made by the borrower to the lender and the lender paying the taxing authority

17.

from an escrow account where the funds accumulated7 or (2) payment by the borrower

directly to the taxing authority.

If EMC’s separate statement had quoted or accurately paraphrased the provisions

of the documents concerning the payment of taxes, it would have been clear to EMC that

a court reading the separate statement could not possibly determine which alternative the

parties chose to implement during a particular period of time. Upon recognizing this

shortcoming, EMC could either have presented indisputable evidence as to which

alternative was in effect for a particular time frame or recognized the existence of a

triable issue of fact and not pursued its motion on those grounds. If the method for

payment was put into effect by an oral agreement of the parties, then Wanger’s version of

that agreement differs from the version implicit in EMC’s position and presents a factual

dispute. Further, if EMC had assumed for purposes of summary judgment that it was to

pay the Property taxes from amounts included in Wanger’s monthly payment or

otherwise tendered to the loan servicer, it could have addressed whether payments from

Wanger, including the $24,999.35 payment made in February 1995 and the $7,352.75

credit referenced in the April 14, 1995, letter written by Wanger, had any impact on the

amount owed to it for property taxes. Once this impact, if any, was established, then

EMC could attempt to establish that Wanger did not make an appropriate tender.

In summary, EMC has failed to carry its burden of production with respect to its

theory concerning the payment of property taxes and, thus, is not entitled to summary

adjudication of Wanger’s contract claim arising from the purported breach of the 1993

modification agreement.

7In the event the parties agreed to implement this alternative, the claim that Wanger did

not pay the property taxes to the loan servicer is the functional equivalent of EMC’s theory that

she failed to perform her contractual obligation to make monthly payments. That theory is

addressed in part III.B, post.

18.

B. Arrearages and Tender

In paragraph 18 of the fifth amended complaint, Wanger alleges she “timely

offered to tender to [EMC] all amounts due and owing so that the claimed default could

be cured and [she] be reinstated to all her former rights and privileges under the 1991

Promissory Note and 1991 Trust Deed as modified. [Wanger] was, at all relevant times,

ready, willing and able to tender those sums, if any.”

1. Facts from EMC’s Separate Statement

EMC’s separate statement asserts that (1) by September 4, 1997, Wanger’s total

loan arrearage had grown to more that $63,000, (2) Wanger never tendered full payment

of the total loan arrearage to EMC, and (3) Wanger never tendered to EMC the $20,000

installment contemplated in a draft loan modification agreement and release of claims.

2. Disputes Raised by Wanger

Wanger disputes each of these purported facts. Because of the factual dispute over

whether the 1993 modification became effective, there is a factual dispute over whether

or not the loan arrearage had grown to more than $63,000. The undisputed facts show

that Wanger never tendered $63,000 to EMC, but because of the dispute over the amount

owed, the failure to tender $63,000 does not preclude the breach of contract claim.

As to the $20,000 payment, Wanger contends she did tender that amount but was

not willing to accept the provisions contained in the draft loan modification agreement

releasing the trustee. Wanger also contends EMC has failed to show the lack of a tender,

because the declaration of Annette Andersen does not establish how she, an employee

located in Texas, would have personal knowledge of Wanger’s dealings with the trustee

so that she could competently testify what Wanger did and did not do.

We conclude (1) a factual dispute exists over whether the amount owed was at

least $63,000 and (2) Andersen’s declaration is insufficient to establish that Wanger did

not tender a lesser amount. Consequently, EMC’s separate statement does not establish

19.

sufficient undisputed facts to eliminate Wanger’s breach of contract claim on the grounds

that Wanger failed to make a tender.

In summary, the breach of contract cause or causes of action set forth in the “First

Cause of Action” of the fifth amended complaint survives the motion for summary

adjudication because of issues of fact concerning the 1993 modification. EMC’s notice

of motion and separate statement are too general to permit summary adjudication of the

more narrow question of whether, assuming the 1993 modification was not effective,

Wanger’s failure to perform under the original note and the deed of trust preclude her

breach of contract claim. (See part II.B.1., ante.)

IV. Violation of the Notice of Transfer Requirements of RESPA

A. Statutory and Regulatory Background

RESPA8 originally was enacted to (1) produce more effective advance disclosure

of settlement costs to home buyers and sellers; (2) eliminate kickbacks and referral fees

that tended to increase the cost of real estate settlement services; (3) reduce the sums

homeowners were required by lenders to place in escrow accounts to ensure payment of

real estate taxes and insurance; and (4) reform and modernize local recordkeeping of land

title information. (§ 2601(b)(1)-(4); Annot., Construction and Application of Real Estate

Settlement Procedures Act of 1974 (1997) 142 A.L.R.Fed. 511.) Regulation X (24

C.F.R. § 3500.1 et seq. (2002)) was promulgated by the Secretary of the United States

Department of Housing and Urban Development (HUD) as the implementing regulation

for RESPA.

In 1989, “the United States General Accounting Office … conducted a major

study of mortgage loan servicing practices … and uncovered a substantial number of

consumer complaints on abusive lender practices. These complaints involved such wideranging

concerns as mistakes in calculating escrow account payments, unresponsiveness

8All further undesignated statutory references are to title 12 of the United States Code

unless otherwise indicated.

20.

to inquiries, failure to make timely property tax and hazard insurance premium payments,

and failure to provide adequate notice of a mortgage loan servicing transfer. The

complaints also pointed out that these errors can potentially result in the imposition of

late payment charges and payments to the wrong parties.” (Lee & Mancuso, Housing

Finance: Major Developments in 1989 (1990) 45 Bus. Law. 1863, 1870-1871, fn.

omitted.)

As a result, section 941 of the voluminous Cranston-Gonzalez National Affordable

Housing Act of 1990 (Pub.L. No. 101-625 (Nov. 28, 1990) 104 Stat. 4079, 4405)

amended RESPA by adding a new section 2605 requiring the servicer9 of certain real

estate loans10 to (1) notify the borrower when the loan is transferred to another servicer

and (2) respond to written inquiries11 from the borrower. (Maurer, Using RESPA to

Remedy Erroneous ARM Adjustments (1995) 49 Consumer Fin. L.Q. Rep. 115.)

The notification provision in section 2605(b)(1) states “[e]ach servicer of any

federally related mortgage loan shall notify the borrower in writing of any assignment,

sale, or transfer of the servicing of the loan to any other person.” (Italics added.)

Regulation X provides that “each transferor servicer and transferee servicer of any

mortgage servicing loan shall deliver to the borrower a written Notice of Transfer,

containing” the required information about the servicer and the transfer. (24 C.F.R.

§ 3500.21(d)(1)(i) (2002), italics added.)

In this case, the specific issue presented is whether the notice of transfer

requirements contained in RESPA and Regulation X (§ 2605; 24 C.F.R. § 3500.21

(2002)) were violated when EMC mailed the notice of transfer to the address shown on

9“Servicer” is defined as the person responsible for servicing the loan and may include

the person who made or holds the loan if that person also services the loan. (§ 2605(i)(2).)

10RESPA covers “federally related mortgage loans,” a very broad concept defined in

section 2602(1).

11A servicer’s duty to respond is triggered by receipt of a “qualified written request,” a

term defined in section 2605(e)(1)(B).

21.

the note and the deed of trust. The briefs filed by the parties did not cite any published

case, regulation or treatise construing section 2605(b)(1) to determine what is adequate

delivery of a notice of servicing transfer. Pursuant to Government Code section 68081,

we requested supplemental letter briefs from the parties addressing whether the language

of RESPA and Regulation X governing notice of servicing transfers requires “(a) actual

receipt by the borrower, (b) delivery based on the servicer’s constructive knowledge of

borrower’s address, (c) delivery based on the servicer’s actual knowledge of borrower’s

address or (d) some other standard.” After receipt of the supplemental letter briefs, it still

appears we are faced with an issue of first impression.12

B. Facts

1. Undisputed Facts from EMC’s Separate Statement

On March 22, 1995, First California mailed a letter addressed to Wanger at the

Property address advising her that the servicing of her loan would be transferred to EMC.

Effective April 17, 1995, EMC acquired Wanger’s loan from First California and began

servicing the loan. On May 2, 1995, EMC mailed a letter to Wanger at the Property

address stating that the servicing of the loan had been transferred to EMC.

EMC’s separate statement refers to a letter dated April 14, 1995, that Wanger sent

to First California. In the letter, Wanger confirmed her purported agreement with Bill

Berrong of First California to settle her damages claim and stated she would commence

regular loan payments on June 1, 1995, in the amount of $1,470.55. The body of the

letter also contains Wanger’s new mailing address in Seattle, Washington.

The promissory note and the deed of trust executed by Wanger on December 24,

1991, are included in the exhibits referenced as supporting evidence in EMC’s separate

statement. Paragraph 7 of the December 24, 1991, promissory note provides:

12Our letter requesting supplemental briefs suggested counsel might find it helpful to

discuss the legal questions with RESPA attorneys at the Office of General Counsel of HUD.

This suggestion did not lead to the identification of controlling legal authority.

22.

“Unless applicable law requires a different method, any notice that

must be given to me under this Note will be given by delivering it or by

mailing it by first class mail to me at the Property Address above or at a

different address if I give the Note Holder a notice of my different address.

“Any notice that must be given to the Note Holder under this Note

will be given by mailing it by first class mail to the Note Holder at the

address stated in Section 3(A) above or at a different address if I am given

notice of that different address.”

Similarly, paragraph 14 of the deed of trust provides:

“Any notice to Borrower provided for in this Security Instrument shall be

given by delivering it or by mailing it by first class mail unless applicable

law requires use of another method. The notice shall be directed to the

Property Address or any other address Borrower designates by notice to

Lender. Any notice to Lender shall be given by first class mail to Lender’s

address stated herein or any other address Lender designates by notice to

Borrower.”

2. Undisputed Facts From Wanger’s Separate Statement

Wanger did not receive the notice of transfer letter from First California or the

notice of transfer letter from EMC.

Wanger contends EMC knew its notice of transfer was not delivered because the

United States Postal Service returned the envelope containing the notice. However, the

superior court sustained EMC’s evidentiary objection to a photocopy of that envelope,

exhibit G to the declaration of Wanger’s former attorney.13 The envelope bore the

notation “forwarding order expired” and a return postmark of May 8, 1995.

C. Legal Contentions of Wanger and EMC

Wanger’s supplemental letter brief contends her letter dated April 14, 1995,

provided First California with a “revised address” as that term is used in section

13Because our analysis is not dependent upon whether or not the envelope containing the

notice of transfer was returned to EMC, we do not address whether the superior court abused its

discretion in sustaining the objection. The declaration of Wanger’s former attorney did not

explain how he obtained a copy of the envelope.

23.

3500.1114 of Regulation X and that EMC, as First California’s successor-in-interest,

either had actual knowledge of the revised address or, at least, had constructive

knowledge of the revised address. As a result of this actual or constructive knowledge,

Wanger asserts EMC was required to use her revised address in Washington when

mailing the notice of transfer.

In contrast, EMC’s supplemental letter brief contends mailing the notice to the

Property’s address was adequate delivery because (1) it was in accordance with the

procedures for giving notice set forth in the written agreement of the parties, (2) the

notice of servicing transfer in this instance is of no importance because Wanger deeded

away the Property four months later, and (3) Wanger had ample notice of the foreclosure

sale conducted in January of 1998. EMC asserts the provisions of the written agreements

regarding notice are consistent with the notice requirements of Civil Code section 2937

concerning transfers of loan servicing that states that notices “shall be sent by first-class

mail, postage prepaid, to the borrower’s or subsequent obligor’s address designated for

loan payment billings .…” (Id., subd. (d).)

D. Determination of the Legal Rule

Statutes should be construed in accordance with the plain meaning of the statutory

language. The phrase “shall notify” does not have a plain meaning. The provisions of

RESPA do not make its meaning plain by defining notify or notice. Nor are those terms

defined by the provisions of Regulation X that address mortgage servicing transfers. (24

C.F.R. § 3500.21 (2002).)

14Section 3500.11 of Regulation X relates to mailing and provides: “The provisions of

this part requiring or permitting mailing of documents shall be deemed to be satisfied by placing

the document in the mail (whether or not received by the addressee) addressed to the addresses

stated in the loan application or in other information submitted to or obtained by the lender at the

time of loan application or submitted or obtained by the lender or settlement agent, except that a

revised address shall be used where the lender or settlement agent has been expressly informed

in writing of a change in address.” (24 C.F.R. § 3500.11 (2002).)

24.

Notwithstanding the lack of definitions for these terms, the language that a

servicer “shall notify the borrower in writing” does exclude the statutory construction

requiring actual receipt by the borrower. Had Congress intended actual receipt by the

borrower, it would have said so. For example, under section 2605(e)(1)(A), a servicer’s

duty to respond to a borrower inquiry arises when the servicer “receives a qualified

written request.” Similarly, under the Truth in Lending Act (TILA), 15 United States

Code section 1601 et seq., a credit card company’s obligation to respond to a customer’s

written inquiry about a billing error is triggered if it receives the inquiry within 60 days

after transmitting the account statement to the customer. (15 U.S.C. § 1666(a).) Thus,

when Congress intends to require receipt, it uses language that plainly expresses that

intent.

In Regulation X, HUD has interpreted the statutory notification provision to mean

that a servicer “shall deliver to the borrower a written Notice of Transfer.” (24 C.F.R.

§ 3500.21(d)(1)(i) (2002).) Neither RESPA nor section 3500.21 of Regulation X defines

deliver or delivery. (24 C.F.R. § 3500.21 (2002).) Also, section 3500.11 of Regulation

X concerning mailing did not become effective until April 25, 1996. (61 Fed.Reg.

13232, 13239 (Mar. 26, 1996).) However, HUD has defined “delivery” in the regulation

concerning the requirements RESPA places on escrow accounts established or controlled

by a servicer. In that context, delivery means “the placing of a document in the United

States mail, first-class postage paid, addressed to the last known address of the recipient”

or hand delivery. (24 C.F.R. § 3500.17(b) (2002).) Under Regulation X, a servicer that

maintains an escrow account in connection with a federally related mortgage must deliver

initial and annual escrow account disclosure statements to the borrower. (See 24 C.F.R.

§ 3500.17(m)(1) (2002).)

In the absence of direct authority, we interpret the requirement for delivery of a

notice of the transfer of mortgage servicing by analogy to the delivery requirements in

section 3500.17 of Regulation X. (24 C.F.R. § 3500.17 (2002).) The regulations

governing escrow account disclosure statements provides some insight into what HUD

25.

regards as adequate notice in a related area. Thus, we conclude the notice of transfer

requirements of section 2605 and Regulation X (24 C.F.R. § 3500.21(d)(1)(i) (2002))

required EMC to place the notice “in the United States mail, first-class postage paid,

addressed to the last known address of” Wanger. (Id., § 3500.17(b).)

This construction of the statute and regulation does not end our inquiry because

Regulation X does not define the concept of a “last known address” or otherwise indicate

whether the determination of the address is limited to the actual knowledge of the loan

servicer or includes constructive knowledge.15 To answer this question, we look to the

purposes underlying RESPA generally and the notice of transfer provisions of section

2605.

If RESPA and section 2605 are remedial consumer protection statutes, they should

be construed liberally to best serve Congress’s intent. (Ellis v. General Motors

Acceptance Corp. (11th Cir. 1998) 160 F.3d 703, 707 [liberally construing TILA, a

remedial consumer protection statute]; Jackson v. Grant (9th Cir. 1989) 890 F.2d 118,

120 [9th Cir. liberally construes TILA].)

As to RESPA generally, we conclude it is a remedial consumer protection statute.

The analysis of the district court in Rawlings v. Dovenmuehle Mortg., Inc. (M.D.Ala.

1999) 64 F.Supp.2d 1156 is convincing. The district court concluded RESPA was

remedial and protective based on (1) the language of the statute, (2) the legislative history

and (3) the decisions of other courts construing RESPA as a consumer protection statute.

(Rawlings, at pp. 1165-1166; see Patton v. Triad Guar. Ins. Corp. (11th Cir. 2002) 277

F.3d 1294, 1299.) An additional basis for this conclusion is that HUD, the agency

responsible for implementing RESPA, often refers to RESPA as a consumer protection

statute. (E.g., 61 Fed.Reg. 69055, 69056 (Dec. 31, 1996) [disclosures required should be

15Some statutes specifically address whether the concept of last known address includes

actual or constructive knowledge. For instance, Civil Code section 2924b, subdivision (b)(3)

states “‘last known address’ … means the last business or residence address actually known by

the … person authorized to record the notice of default.”

26.

designed to meet consumer protection goals of RESPA]; 61 Fed.Reg. 29238, 29241

(June 7, 1996) [refers to “RESPA’s core objective of consumer protection”].)

As to section 2605, we agree with those courts that conclude it is a remedial

consumer protection statute. (Cf. Ploog v. HomeSide Lending, Inc. (N.D.Ill. 2002) 209

F.Supp.2d 863, 870 [“actual damages” under § 2605(f)(1) include recovery for emotional

distress]; Johnstone v. Bank of America, N.A. (N.D.Ill. 2001) 173 F.Supp.2d 809, 815

[same]; Rawlings v. Dovenmuehle Mortg., Inc., supra, 64 F.Supp.2d 1156 [same] with

Katz v. Dime Sav. Bank, FSB (W.D.N.Y. 1997) 992 F.Supp. 250, 255-256 [§ 2605 not a

consumer protection statute and, therefore, emotional distress not recoverable as actual

damages].)16

The concept of consumer protection has many facets. Consumers may be

protected by receipt of information that allows them to make decisions that are better

informed. (See § 2601(a), (b)(1).) Consumers also are protected by measures that reduce

the cost of credit. (See § 2601(a), (b)(2).) We recognize there is some tension between

providing information to facilitate consumer decisionmaking and reducing the cost of

credit because construing section 2605 in a manner that increases the burden on loan

servicers may result in that burden being passed on to consumers in the form of higher

credit costs.

The level of responsibility imposed upon a servicer to provide notice of a transfer

must reflect these general, sometimes conflicting, consumer protection purposes of

RESPA as well as address the particular evils the notice of transfer provisions of section

2605 were designed to ameliorate, i.e., late charges being incurred and loan payments

being made to the wrong party because the borrower is unaware the servicing of the loan

has been transferred. Requiring the servicer to determine the last address of the borrower

based on the servicer’s actual knowledge would minimize cost. However, requiring a

16We express no view on the underlying question of whether emotional distress is

included in actual damages recoverable by a borrower under section 2605(f)(1)(A).

27.

servicer to exercise reasonable care and diligence in determining the correct address of

the borrower would decrease the number of notices of transfer sent to the wrong address.

In balancing these considerations, we conclude the last known address of the borrower

shall be determined with reference to the servicer’s actual and constructive knowledge.

In other words, a servicer must exercise reasonable care and diligence in determining the

correct address of the borrower when mailing a notice of transfer.

This view of the concept of a last known address is not unique. Other courts, in

different contexts, have ruled a last known address may be determined based on

constructive knowledge. (E.g., In re Smith (3d Cir. 1989) 866 F.2d 576, 586 [Pa.

foreclosure statute requires notice to last known address which courts construe as

requiring a good faith effort to ascertain the current address of the mortgage debtor]; U.S.

West Properties, Inc. v. AOI Compwise Worker’s Compensation Program (1998) 156

Or.App. 411 [965 P.2d 467] [statute requires notice of cancellation of insurance to be

sent to last known address of employer-insured; notice could be sent to address listed in

policy unless insurer “knew or had constructive knowledge of [insured’s] new address”].)

E. Application of Legal Rule to the Undisputed Facts

EMC has failed to establish that it had no actual knowledge of Wanger’s Seattle,

Washington address and that it would not have obtained this knowledge through the

exercise of reasonable care and diligence. The letter dated April 14, 1995, which

contains the new address, is among the evidence referenced by EMC in its separate

statement, but we cannot determine when EMC knew or should have known the contents

of the letter.

First, with respect to actual knowledge, an issue of fact exists as to the contents of

the loan file in EMC’s physical possession. The undisputed facts do not establish

whether or not Wanger’s Washington address was in the file in EMC’s physical

possession before it mailed the notice of transfer. (See In re Smith, supra, 866 F.2d at p.

586 [Pa. foreclosure statute required notice to last known address; lender’s files definitely

contained information that borrower was not residing at the property].)

28.

Second, with respect to the constructive knowledge, underlying factual issues exist

as to (1) the scope of what EMC should have searched and (2) the information that would

have been learned by conducting a search within that scope. As to the scope of the

inquiry required by reasonable care and diligence, a reasonable trier of fact might find the

scope of inquiry is limited to a search for a written notice of change of address because of

the notice provisions in the deed of trust. However, a broader scope of inquiry might be

warranted by the surrounding facts and circumstances. For example, a servicer might be

found to have knowledge of a new address received by e-mail or orally in a telephone

conversation, particularly if the servicer caused the borrower to believe such a notice was

adequate.

Furthermore, even if the scope of a reasonable inquiry was limited to a search for a

written change of address notice, the undisputed facts do not show that EMC would not

have found Wanger’s new address. Wanger may be able to show that, in light of the risk

that a change in address notice received by a servicer transferring a loan around the time

of the transfer might not be included in materials physically transferred to a servicer

acquiring the loan, reasonable care and diligence requires a servicer acquiring the loan to

implement a procedure to cause such a notice of change in address to reach it. If Wanger

is able to show reasonable care and diligence would have led to EMC reviewing First

California’s files for such a notice, then she may also be able to show EMC would have

discovered her new address contained in the April 14, 1995, letter.

In light of the foregoing, the undisputed facts do not support finding as a matter of

law that the last address of Wanger actually known by EMC, or that should have been

known by EMC through the exercise of reasonable care and diligence, was the Property

address. Accordingly, EMC’s attempt to provide Wanger with the notice of transfer may

have failed to comply with RESPA. Thus, Wanger’s RESPA cause of action survives the

motion for summary adjudication.

29.

F. Actual Damages Recoverable Under RESPA Are Not Limited to the

Foreclosure

EMC presents three straw man arguments in an attempt to convince us it has

knocked down Wanger’s RESPA cause of action. The straw man, i.e., erroneous

premise, is that the RESPA cause of action is solely a claim for wrongful foreclosure.

First, EMC argues that the RESPA cause of action cannot survive unless the foreclosure

was wrongful. Second, EMC argues any failure to give notice of transfer of servicing is

of no importance because Wanger deeded the Property away four months later. Third,

EMC argues it is not liable under RESPA because Wanger had ample notice of the

foreclosure sale conducted in January of 1998.

We reject these arguments because one reason the alleged violation of RESPA is a

separate cause of action is that it is based upon separate and distinct wrongful acts, i.e.,

the alleged failure give the statutorily required notice of transfer. (See 6 Witkin, Cal.

Procedure, supra, Proceedings Without Trial, § 242, p. 657.) Wanger’s recovery of

actual damages under section 2605(f)(1) and attorney fees under section 2605(f)(3) are

not dependent upon proving the foreclosure was wrongful, although the foreclosure

might be among the actual damages.

Actual damages may include, but are not limited to, (1) out-of-pocket expenses

incurred dealing with the RESPA violation, (2) lost time and inconvenience to the extent

it resulted in actual pecuniary loss, and (3) late fees. (See Johnstone v. Bank of America,

N.A., supra, 173 F.Supp.2d at pp. 813-814, 816; Rawlings v. Dovenmuehle Mortg., Inc.,

supra, 64 F.Supp.2d at p. 1164 [$115 spent on photocopies, secretarial work, and travel

to post office recoverable under § 2605(f)(1)].) Also, Wanger might be able to show the

monthly payments made to First California after the effective date of the transfer are

actual damages.

The issue of whether or not the foreclosure is included in the actual damages

suffered by Wanger will depend upon her showing that the foreclosure occurred “as a

result of the failure” (§ 2605(f)(1)(A)) to deliver the notice of transfer. (See Johnstone v.

30.

Bank of America, N.A., supra, 173 F.Supp.2d at pp. 813-814 [complaint alleged

sufficient causal connection between RESPA violation and foreclosure to withstand a

motion to dismiss].) The issue of causation was never addressed in EMC’s separate

statement and, therefore, cannot provide an undisputed factual basis for eliminating

Wanger’s RESPA theory of liability.

Lastly, we reject EMC’s argument that the remedy envisioned by section 2605 for

a failure to provide a notice of transfer is sending the servicer a qualified written request

under section 2605(e) because it is contrary to the plain language of the statute. Section

2605(f) provides that “[w]hoever fails to comply with any provision of this section shall

be liable to the borrower” for actual damages. The phrase “any provision of this section”

plainly includes the provisions contained in section 2605(c) concerning notices by

transferees of loan servicing.

V. Breach of Statutory Duties Concerning Nonjudicial Foreclosure*

In paragraph 28 of the fifth amended complaint, Wanger alleges EMC “violated

the provisions of Civil Code Sections 2924(b), (f) and (h) [sic].” EMC’s reply brief sets

forth two reasons why Wanger’s claims under Civil Code sections 2924b, 2924f, and

2924h must fail. First, EMC relies on the recital in the trustee’s deed regarding

compliance with applicable procedures and the prima facie presumption arising from

such a recital under Civil Code section 2924.17 EMC asserts Wanger has not presented

any evidence to defeat the prima facie presumption. Second, EMC asserts that “[t]o the

*See footnote, ante, page 1.

17Civil Code section 2924 provides in part: “A recital in the deed executed pursuant to

the power of sale of compliance with all requirements of law regarding the mailing of copies of

notices or the publication of a copy of the notice of default or the personal delivery of the copy

of the notice of default or the posting of copies of the notice of sale or the publication of a copy

thereof shall constitute prima facie evidence of compliance with these requirements and

conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and

without notice.” (Italics added.)

31.

extent [Wanger’s] claim is based on the alleged 1993 modification changing the amount

of her arrearage, that argument has already been addressed.”

EMC’s separate statement establishes the following facts are undisputed. At the

January 13, 1998, foreclosure sale, EMC purchased the subject property with a credit bid

and was given a trustee’s deed upon sale. The trustee’s deed upon sale contained the

standard recital that the sale process complied with the statutory requirements. EMC’s

separate statement does not address whether it acted to restrain bidding at the foreclosure

sale in violation of Civil Code section 2924h, subdivision (g).18

We conclude EMC’s motion fails in its effort to eliminate Wanger’s claim based

on California’s nonjudicial foreclosure statutes. First, EMC’s attempt is premised on

prevailing in its arguments concerning the 1993 modification agreement. Because EMC

did not prevail in that argument, it follows that “[t]o the extent [Wanger’s] claim is based

on the alleged 1993 modification changing the amount of her arrearage,” the claim

survives.

Second, Wanger’s claim based on restraint of bidding survives because the

presumption created by Civil Code section 2924 is not relevant to such a claim. Bidding

may be restrained even though all procedural requirements concerning notice, the matter

addressed by the presumption, have been fulfilled.

Either reason defeats the request for an adjudication that Wanger’s claim based on

California’s nonjudicial foreclosure statutes does not have merit. (See part II.B.1., ante.)

We do not consider whether a more narrow issue could have been summarily adjudicated

on the record before us because the party opposing the request was not put on notice of a

narrower request.

18Civil Code section 2924h, subdivision (g) provides in part: “It shall be unlawful for

any person, acting alone or in concert with others, … to fix or restrain bidding in any manner, at

a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage.…”

32.

VI. Negligence Cause of Action*

EMC argues that the rights and responsibilities of the parties were governed by

their contract and the applicable statutes and, accordingly, this is not a tort action and

Wanger’s count for negligence must fail.

Given the all or nothing way in which EMC framed the issue to be adjudicated

with respect to each count in the fifth amended complaint, if there is one triable issue of

on any theory of negligence, the entire negligence count will survive the motion for

summary adjudication.

We conclude EMC owed a duty to Wanger and a triable issue of fact exists with

respect to whether EMC negligently performed that duty. The legal duty is imposed

upon EMC by section 2605. (See Rawlings v. Dovenmuehle Mortg., Inc., supra, 64

F.Supp.2d at p. 1167 [summary judgment on negligence claim denied; loan servicer

owed borrower a legal duty under § 2605].) Whether EMC violated that duty presents

triable issues of fact. (See part IV.E., ante.)

VII. Interference With Prospective Economic Advantage*

In paragraph 32 of the fifth amended complaint, Wanger alleges,

“After September 1, 1995, when [Wanger] conveyed title to the …

[P]roperty to Lisa Marie Keller, and notwithstanding any language or

inference to the contrary in the instrument of conveyance, [Wanger]

continued to and did in fact retain all legal and beneficial rights and uses of

and to the … [P]roperty, including, but not limited to, the rights to: lease,

sell, encumber, occupy, maintain, manage, repair and enjoy and retain any

and all rents, sales proceeds and profits resulting therefrom. … [EMC] …

knew that [Wanger] owned and retained such beneficial rights and uses of

and to the … [P]roperty and [EMC’s] conduct alleged herein was

undertaken and carried out with said knowledge.”

Fact No. 12 in EMC’s separate statement provides: “EMC … did nothing to

interfere with [Wanger’s] efforts to sell or lease the property prior to the foreclosure sale.

*See footnote, ante, page 1.

33.

After September 15, 1995, [Wanger] did not even own the property, having deeded it to

her daughter, Lisa Marie Keller.” The superior court ruled that Wanger “has failed to

show how she was damaged by any action of [EMC] when she no longer owned the

property after September 1, 1995.”

Wanger’s argument against the position of the superior court and EMC can be

stated in two ways. First, Wanger asserts, in effect, that EMC’s motion does not survive

the first step in the three-step analysis set forth in Brantley v. Pisaro, supra, 42

Cal.App.4th at page 1602 because it does not respond to the allegations of the complaint.

In particular, the motion for summary judgment did not address Wanger’s allegations of

her beneficial interest in the Property and her right to sell the Property and retain all sale

proceeds.

Second, Wanger asserts EMC has failed to carry its burden under the second step

of the three-step analysis. In particular, EMC’s separate statement is inadequate because

it omits a material fact, namely, that Wanger did not retain any interest in the Property

after she deeded it to her daughter. (See Code Civ. Proc., § 437c, subd. (b).)

Furthermore, even if one could go beyond the material facts set forth in the moving

party’s separate statement in order to uphold a summary judgment, one cannot view the

record in the light most favorable to Wanger and indisputably infer the essential fact that

she does not hold any right to sue for interferences with the sale or lease of the Property

from the fact that she deeded the Property to her daughter.

Accordingly, we hold that EMC has failed to carry its burden of showing that

Wanger is unable to establish an essential element of her cause of action, i.e., that

Wanger owned no interest that would be damaged by interferences with her attempts to

sell the Property. Because EMC failed to meet its burden, we do not reach the third step

34.

of the analysis and examine whether Wanger presented evidence sufficient to create a

dispute over a material fact.19

DISPOSITION

The judgment is reversed and the matter is remanded to the trial court with

directions to vacate its order granting summary judgment in favor of EMC. Wanger shall

recover her costs on appeal.

________________________

GOMES, J.

WE CONCUR:

__________________________

ARDAIZ, P.J.

__________________________

CORNELL, J.

19Wanger had attempted to meet her burden, in part, by stating she got an assignment of

all claims from her daughter and citing to the November 1, 1999, order of the superior court

overruling and sustaining demurrers to her fourth amended complaint. In overruling a demurrer

to Wanger’s causes of action for breach of contract, negligence, and breach of statutory duties,

the superior court stated: “The transfer of the real property described in the Fourth Amended

Complaint does not automatically transfer [Wanger]’s personal causes of action (Cf. Vaughn v.

Dame Construction Co. (1990) 223 Cal.App.3d 144, 148-149).” To support its ruling, the

superior court took judicial notice of the recorded assignment of rights.