Gutierrez v. SN Servicing Corporation CA1/2

Filed 5/6/22 Gutierrez v. SN Servicing Corporation CA1/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

URIEL GUTIERREZ et al. Plaintiffs and Appellants, v. A162401 SN SERVICING CORPORATION et al., (Alameda County Super. Ct. Defendants and Respondents. No. RG20063610)

Appellants Uriel and Hortencia Gutierrez sued their lender Fremont Bank, as well as respondents SN Servicing Corporation (SN Servicing) and Zieve, Brodnax & Steele, LLC (ZBS), alleging Fremont Bank had refused to reconvey the deed of trust after appellants paid off their revolving line of credit. The trial court sustained respondents’ demurrer without leave to amend and dismissed the operative complaint as to respondents. Appellants now argue (1) the trial court erred because they pled sufficient facts to support their breach of contract and quiet title claims against respondents; or (2) in the alternative, the trial court abused its discretion in denying leave to amend. We affirm.

1

BACKGROUND In 2000, appellants purchased a property in Newark, California. In 2005, they obtained a revolving line of credit from Fremont Bank in the amount of $89,000 secured by a deed of trust. SN Servicing is the current servicer and ZBS is the current trustee of this deed of trust. In 2006, appellants signed a modification agreement to increase their credit limit to $110,000. At the same time, Fremont Bank recorded another deed of trust for $89,000. According to appellants, this second lien was used to “payoff” the first lien, but the first lien was not closed and continued to accrue fees. When appellants contacted Fremont Bank to ascertain why the first lien was not closed, Fremont Bank refused to reconvey the lien. Appellants allege that the bank now “seeks to foreclose” on this “extinguished” first lien. In June 2020, appellants filed suit against Fremont Bank.1 In July 2020, appellants filed a first amended complaint adding SN Servicing and ZBS as defendants. The trial court ordered appellants to amend again because they had included a quiet title claim but failed to verify the complaint. (Code Civ. Proc., § 761.020.) In December 2020, appellants filed their second amended complaint. It asserts claims for (1) breach of contract (against Fremont Bank and SN Servicing); (2) violation of Civil Code section 2941 (against Fremont Bank only); and (3) quiet title (against all). SN Servicing and ZBS filed a demurrer to the second amended complaint. The trial court issued a tentative ruling that was contested, and a hearing was held on the motion. After the hearing, the trial court sustained