Tashjian v. Invictus Residential Pooler - 2A

Background

The consolidated action involved two lawsuits by Vahe Tashjian concerning payments on a mortgage loan with a principal amount of $3,307,500. The operative complaint against Planet Home Lending, LLC asserted 10 claims: breach of written contract; breach of the implied covenant of good faith and fair dealing; violation of California’s Unfair Competition Law; violation of the Fair Credit Reporting Act; intentional misrepresentation; negligent misrepresentation; violations of the California Homeowner Bill of Rights under several provisions; wrongful foreclosure; and injunctive relief.

Planet Home became the loan servicer on November 8, 2019. A December 2019 loan statement listed monthly interest of $17,226.56 and escrow of $5,008.54. Planet Home later sent a default notice stating that $292,610.49 was required to cure the default. It recorded a notice of default and later a notice of trustee’s sale, but the property was not sold. The opinion states that Tashjian continued to reside there.

Tashjian had made seven payments in May 2019 under a December 2018 modification agreement, after which the opinion states that he made no other loan payments. Tashjian argued, among other things, that the modification agreement had been rescinded because of a mutual mistake and that Planet Home improperly treated him as being in default. The court found that his May 2019 payments ratified the modification agreement.

Motions

Planet Home moved for summary judgment on all 10 claims. Summary judgment is judgment without a trial when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law. Planet Home also moved under the evidence rules governing expert testimony to exclude the reports and testimony of Tashjian’s damages expert, Douglas A. Minor. Tashjian opposed both motions.

The court denied the expert-exclusion motion as moot because none of Tashjian’s claims survived summary judgment. The court also denied as moot Planet Home’s objections to a January 22, 2019 letter and Tashjian’s declaration because the court reached the same result even when considering that evidence.

Court’s Analysis

Contract Claims

For the breach-of-contract claim, the court found that none of the loan documents named Planet Home as a party. The documents and correspondence showed Planet Home’s role as loan servicer, not a contractual relationship with Tashjian. The court therefore found no genuine factual dispute that no contract existed between Tashjian and Planet Home and granted summary judgment on the breach-of-contract claim.

Because the court found no contract between the parties, it also granted summary judgment on the claim for breach of the implied covenant of good faith and fair dealing.

Unfair Competition Law

The court granted summary judgment on all three theories of Tashjian’s Unfair Competition Law claim. For the “unlawful” theory, the court found that Tashjian could not establish a violation of the underlying law, including the claimed Homeowner Bill of Rights violation. For the “unfair” theory, the court found no evidence that Planet Home failed to provide required notices, failed to allow a timely cure, improperly withheld foreclosure alternatives, wrongfully foreclosed, failed to record required documents, failed to notify Tashjian of acceleration, or falsely claimed authority to act. For the “fraudulent” theory, the court found no evidence of a specific false representation or that Planet Home’s conduct was likely to deceive the public.

The court also rejected Tashjian’s reliance on rescission of the modification agreement. It stated that the operative complaint did not allege mutual mistake as a theory supporting the Unfair Competition Law claim, and that Tashjian generally could not raise a new liability theory for the first time in opposition to summary judgment. The court further held that his later payments under the modification agreement ratified it, even assuming the January 22 letter had initially accomplished a valid rescission.

Fair Credit Reporting Act

The court granted summary judgment on the Fair Credit Reporting Act claim. It found that the undisputed evidence showed Tashjian made seven payments under the modification agreement and then made no further payments, did not cure the default, and was accurately reported as being in default. The court found no evidence of another statutory violation and did not address Planet Home’s separate argument that Tashjian’s alleged damages were legally unrecoverable.

Misrepresentation Claims

The court granted summary judgment on the intentional- and negligent-misrepresentation claims. It found no evidence creating a genuine factual dispute that Planet Home made a false representation. The court relied on its conclusions that Planet Home was the valid loan servicer and had followed proper procedures in notifying Tashjian of the default and attempting foreclosure.

Homeowner Bill of Rights Claims

The court granted summary judgment on both Homeowner Bill of Rights claims. It found that the undisputed evidence showed Planet Home was the valid servicer and complied with the applicable requirements. The court stated that Tashjian’s declaration did not create a factual dispute because it contained legal conclusions, contradicted his sworn testimony and documentary evidence, and lacked supporting documentation. The court did not reach Planet Home’s alternative argument that the claims were moot because of a statutory limit on using the September 2020 notice of default as the basis for foreclosure.

Wrongful Foreclosure

The court granted summary judgment on the wrongful-foreclosure claim because the claim was not yet ripe. Under the law applied by the court, a wrongful-foreclosure claim could not be brought before a completed trustee’s sale. The property had not been sold.

Injunctive Relief

The court concluded that the claim seeking preliminary and permanent injunctive relief could not proceed because California law does not recognize injunctive relief as a standalone cause of action. The court therefore granted summary judgment on that claim as part of Planet Home’s motion.

Disposition

The court ordered that Planet Home’s motion for summary judgment was granted in full. It ordered that Planet Home’s motion to exclude Douglas A. Minor’s expert reports and testimony was denied as moot, and that Planet Home’s evidentiary objections were denied as moot. The court also terminated as moot the April 4, 2024 status conference concerning trial scheduling for Tashjian’s case against Planet Home.