Casco v. Bank of America, N.A.

Counsel for Plaintiffs shall give notice of this ruling.

10. Casco v. Bank of America, Before the Court are two motions. The first is a motion for summary N.A. judgment or alternatively for summary adjudication filed by Bank 23-1335287 America N.A. (BANA) as to the complaint filed by plaintiff Franklin Casco, Jr. As set forth herein, the motion is GRANTED, in part and DENIED, in part. The second motion is a motion to bifurcate filed by BANA. The motion to bifurcate is MOOT.

Motion For Summary Judgment/Adjudication

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A “party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact. . . .” (Ibid.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Id., at 851.) "A defendant moving for summary judgment satisfies his or her initial burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action." (Code Civ.

Proc., § 437c(p)(2).) "A cause of action cannot be established if the undisputed facts presented by the defendant prove the contrary of the plaintiff's allegations as a matter of law." (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1597.) If the defendant meets this initial burden, the burden shifts to the plaintiff to establish, by means of competent and admissible evidence that a triable issue of material fact still remains. (Code Civ. Proc., § 437c (p)(2); Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 850– 851.)

1st Cause of Action: Violation of Civ. Code § 2923.6

Civil Code §2923.6 provides that after a borrower submits a complete application for a first lien loan modification, the mortgage servicer shall not record a notice of default or notice of sale until the “The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification” and the appeal period has passed. The parties agree that plaintiff submitted an application in 2019 and that BANA determined plaintiff was not eligible.

In this cause of action plaintiff alleges he “submitted a package in July 2022” and then “re-submitted another application in September 2022” which should have been considered, thereby stalling the filing of the notice of default, notice of sale and trustee’s sale. (Complaint ¶58) However, the Legislature also enacted Civil Code §2923(g) which states:

In order to minimize the risk of borrowers submitting multiple applications for first lien loan modifications for the purpose of delay, the mortgage servicer shall not be obligated to evaluate applications from borrowers who have been evaluated or afforded a fair opportunity to be evaluated consistent with the

requirements of this section, unless there has been a material change in the borrower’s financial circumstances since the date of the borrower’s previous application and that change is documented by the borrower and submitted to the mortgage servicer.

In order to establish a “material change in the borrower’s financial circumstances,” the Court first looks to the 2019 application. In that application, plaintiff stated he had a monthly income of $20,000, monthly expenses of $14,017 and net assets of $184,900. (Plf’s Exh. 8) This means he had a net monthly income of $5,983. (Plaintiff’s Exh. 8) BANA’s denial letter states that plaintiff did not qualify for the modification program because “your gross monthly income of $24,421.38 is too low to support the monthly payment on the modification terms we’re able to offer you.” (Bernal Decl., Exh. J, page 4)

With regard to the purported July 2022 application, although the complaint alleges a new application was submitted in July 2022, the plaintiff did not submit evidence of such in opposition to the motion.

Plaintiff did, however, submit a copy of the September 21, 2022 application for modification. This application lists the property as being his primary residence and shows a gross monthly income of $27,500, total monthly expenses of $25,383, and assets of $21,500. (Plf’s Exh. 10) This means plaintiff had a net income of $2,117/mo. The application at Exh. 10 is accompanied by a “Profit and Loss Statement for plaintiff’s work as a paralegal from 5/1/22 to 9/16/22, presumably to support the income stated in the application. Although the application is under penalty of perjury, this additional P&L is not. Also, while the 2019 application was supported by a 1099, no similar tax documents are part of Exhibit 10.

When comparing the two applications, while plaintiff did have a change in his net monthly income from 2019 to 2022, it was actually for the worse. It is axiomatic that the Legislature only intended for an improvement in one’s circumstances to warrant a new application. Accordingly, this is not a material change which would support consideration of a new application.

The Court does note that along with the opposition, plaintiff also submitted a May 9, 2023, letter from a CPA regarding a “Statement of Revenue and Expenses” from The Jesus Coach Ministries, LLC for a three month period in 2023. (Plf’s Exh. 11) However, the cover letter explains that the figures were neither verified for accuracy or completeness and that management omitted “substantially all” information ordinarily provided. Accordingly, not only is the statement unverified, by the very terms of the document, it is not reliable.

Because plaintiff has not met his burden to show a question of fact as to there being a material change in circumstances, the motion is GRANTED as to the 1st cause of action.

2nd Cause of Action: Violation of California Civil Code Section 2923.7

Civil Code §2923.7(a) provides:

“When a borrower requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.”

BANA argues that because more than one year has passed since it filed the notice of trustee’s sale, the notice is stale and must be re-filed in order for a sale to take place, thus remedying the violation. However, the Court finds there is a question of fact as to whether the violation has been remedied. In other words, there is a question as to whether BANA appointed a single point of contact. There is also a question as to whether BANA determined that all loss mitigation options have been exhausted such that no single point of contact was necessary. (Section 2923.7(c).) The fact that BANA would have to republish its notice of sale is of no consequence because the issue is whether the violation was corrected or mitigation options exhausted.

Accordingly, the motion is DENIED as to the 2nd cause of action.

3rd Cause of Action: Violation of California Civil Code Section 2923.55(f)

Civil Code §2923(f) prohibits the filing of a notice of default until certain tasks have been completed by the mortgage servicer. Here, as evidence BANA satisfied the requirements of Section 2923.55(f), it submits the declaration of Amy Bernal. Ms. Bernal states in her declaration: “On May 24, 2022, BANA sent Plaintiff notice that it took steps to begin the foreclosure process, but he could still be evaluated for alternatives to foreclosure.” (Bernall Decl. ¶26; see also UMF 46) As the notice of default was filed on May 23, 2022, Ms. Bernal’s declaration is of no assistance and does not authenticate the 2019 letter attached as Exhibit Y.

In its reply, BANA asserts it made a mistake and submits evidence showing there had been multiple communications with plaintiff advising him as required. However, the Court declines to consider this new evidence to which plaintiff has not had an opportunity to respond. “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey (2013) 218 Cal. App. 4th 1522, 1537.)

Accordingly, as BANA has not met its burden, the motion is DENIED.

4th Cause of Action: Violation of California Civil Code Section 3273.11

Civil Code §3273.11(a) provides:

“A mortgage servicer shall comply with applicable federal guidance regarding borrower options following a COVID-19 related forbearance.”

The primary issue is whether there was any harm caused by “stating that the forbearance period would simply be applied to the back of the loan and Defendant would automatically place Plaintiff into a repayment plan.” Section 3273.15(a) provides that “a borrower who is harmed by a material violation of this title may bring an action to obtain injunctive relief, damages, restitution and any other remedy to redress the violation.”

BANA submits evidence of multiple written communication with plaintiff where he was told that under a forbearance agreement, payments were not placed at the end of the loan. (See UMFs 22-29) BANA also produced transcripts of the telephone communications where plaintiff was told how the payments would work and not that they would not be placed at the end of the loan. (See UMFs 31-34) BANA has met its burden to show plaintiff was not harmed by the alleged violation of Section 3273.11.

In opposition, plaintiff argues that because of BANA’s failure to provide guidance regarding borrower options, he was harmed because “By that time, Plaintiff had foregone his approved refinance, and the arrears on his loan had grown by hundreds of thousands of dollars. (Plaintiff’s AMF Nos. 34, 70.) These are material harms directly resulting from Defendant’s misrepresentations.” (Opp. at 16:9-16)

However, Plaintiff fails to submit evidence that he had “foregone his approved refinance.” The evidence cited at “Plaintiff’s AMF Nos. 34, 70” does not show plaintiff had been approved for a refinance. To the contrary, AMF 34 cites to Casco’s testimony at page 156 of his deposition where he testified he had not made any payments on his loan for seven years. (Exh. 6 to Galleta Decl.) At AMF 70, plaintiff cites to page 20 of a Loan Activity report which shows that as of 8/3/23, the reinstatement amount was $1,177,995.10. (Exh. 4 to Galleta decl.) This has nothing to do with a refinance.

Accordingly, because the plaintiff has not met his shifted burden, the motion is GRANTED as to the 4th cause of action.

5th Cause of Action: Promissory Estoppel and 6th Cause of Action: Negligent Misrepresentation

“The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734.

To state a Cause of Action for Negligent Misrepresentation, plaintiffs must plead the following elements: “(1) a false statement of a material

fact that the defendant honestly believes to be true, but made without reasonable grounds for such belief, (2) made with the intent to induce reliance, (3) reasonable reliance on the statement, and (4) damages.” (Century Sur. Co. v. Crosby Ins., Inc. (2004) 124 Cal.App.4th 116, 129.)

BANA submits evidence showing a history of communications with plaintiff wherein the process of the forbearance was explained to him on multiple occasions. (See, e.g., UMF nos. 20-34) These communications confirm that plaintiff knew the forbearance required repayment at the end of the forbearance period. BANA has met its burden of showing there was no promise or statement that it “would apply his forbearance period to the back of the loan.” (Complaint ¶76) Further, BANA has met its burden to show that, to the extent a contrary verbal statement was made to plaintiff, reliance thereon was not reasonable.

In opposition, plaintiff fails to meet his shifted burden. While plaintiff points to a select citation from plaintiff’s deposition, there was no declaration authenticating that deposition testimony.

When plaintiff filed his opposition to the instant motion on 7/31/26, the appendix of exhibits (ROA 147) was not supported by a declaration. On 8/18/26, the Court entered a Minute Order stating “there is no proof of service showing which documents plaintiff served on defendant. Accordingly, plaintiff is granted leave to file the same declaration that was served on defendant, as well as the proof of service showing service of all opposition documents. Plaintiff shall file these documents, if such exist, not later than 3:00 p.m. on August 19, 2026. No new documents may be filed other than those already served on defendant.”

On 8/19/26, plaintiff filed the declaration of Jessica Galletta which is dated 7/31/26 and which bears a computer printed signature. However, there is no proof of service showing this document was served on BANA on 7/31/26. Instead, the proof of service at ROA 161 lists several documents filed on 7/31/26 and does not include the Galletta declaration. Further, BANA submits the declaration of Molly White (ROA 172) who states “The Galletta Declaration is dated July 31, 2026, but it was not served on BANA until August 19, 2026.” (White Decl. ¶12) The Court declines to consider the late filed declaration at ROA 158. (Jay v. Mahaffey (2013) 218 Cal. App. 4th 1522, 1537.) The Court also declines to consider the late filed “offer of proof” at ROA 168 and Declaration of Jessica Galletta in Support of Written Offer of Proof” at ROA 174, both of which were filed on 8/24/26

Accordingly, the motion is GRANTED as to the 5th and 6th causes of action.

7th Cause of Action: Violation of Cal. Business & Professions Code §17200, et seq.

Private citizens have standing to bring an action under Business and Professions Code section 17200 if they have “suffered injury in fact and ha[ve] lost money or property” as a result of unfair competition. (Kwikset Corp v. Superior Court (2011) 51 Cal.4th 310, 320)

BANA submits evidence showing plaintiff did not suffer an injury in fact because no trustee’s sale took place and the notice of sale is now stale. (UMF 43) In fact, BANA submits evidence that plaintiff has continued to occupy the property without making payments since 2019 (UMF 37). BANA has met its burden to show plaintiff lacks standing.

In opposition, plaintiff fails to meet his shifted burden. While plaintiff cites to his own deposition testimony at AMFs 57 and 61, there is no declaration authenticating the evidence cited in support of those facts.

Accordingly, the motion is GRANTED as to the 7th cause of action.

BANA’s Objections in its Reply to Separate Statement

BANA asserts objections to several pieces of evidence in plaintiff’s separate statement. However, they are not separately stated as required by Rule 3.1354. Instead, they are stated in the separate statement as part of BANA’s response to plaintiff’s evidence. “If the moving party's statement rests on objectionable evidence, the opposing party's statement should state the objection by referring to the objection number of separately filed evidentiary objections.” (Rutter CPBT 10:196c, citing Rule 3.1354(b).)

Accordingly, the objections are OVERRULED.

MOTION TO BIFURCATE

In light of the above ruling on the motion for summary adjudication, the motion to bifurcate is MOOT.

BANA shall give notice of both rulings. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.