Orcilla v. Big Sur, Inc.

Majority - Premo, J.

Yes, the complaint adequately states an equitable cause of action to set aside a nonjudicial foreclosure sale. The court found that the Orcillas sufficiently alleged that the original loan and the 2008 loan modification were unconscionable and unenforceable. These allegations satisfied the first element (illegal, fraudulent, or willfully oppressive sale) of an equitable cause of action to set aside a foreclosure. The court concluded the Orcillas also sufficiently alleged the second element (prejudice/harm from losing their home) and the third element (excuse from tender because the debt itself was invalid due to unconscionability). The court further held that the conclusive presumption in favor of a bona fide purchaser under Civil Code section 2924 applies only to challenges regarding statutory compliance with default and sales notices, not to claims based on the unconscionability of the loan agreements themselves, thus not barring this cause of action. Yes, the complaint adequately states a cause of action under the Unfair Competition Law (UCL) against the Bank Defendants. The court reasoned that enforcing unconscionable loan agreements could constitute an unlawful or unfair business practice under the UCL. Given the allegations that the loan and loan modification were unconscionable and the reasonable inference that the Orcillas would not have lost their property if the agreements had not been enforced via foreclosure, the court found the Orcillas satisfied the UCL's economic injury and causation prongs for standing. No, the complaint did not adequately state causes of action for violations of Civil Code sections 2924, 2924b, 2924c, 2924f, 2932.5, breach of contract (Deed of Trust or oral agreement), fraud, quiet title, or declaratory relief. For Sections 2924 and 2924c (Notice of Default), the court found the Orcillas did not adequately allege the default was cured or that a new notice of default was required, as the loan modification letter conditioned 'bringing the loan current' on making subsequent payments, which the Orcillas did not allege doing. For Sections 2924b and 2924f (Notice of Sale), the Orcillas failed to plead actual prejudice resulting from an incorrect sale date in the notice, such as being able to cure the default or demonstrating a lower sale price due to the defect. For Section 2932.5 (Assignment of Mortgage), the court affirmed that this section applies only to mortgages, not deeds of trust, which was used in this case. It reiterated that the non-judicial foreclosure scheme does not require the note and deed of trust to be held by the same party. For Breach of Deed of Trust and Breach of Oral Agreement, the Orcillas failed to allege causation. For the Deed of Trust, they did not show how the alleged breaches (lack of notice, incorrect sale date) caused their damages (loss of home), as they did not claim they could or would have cured the default. For the oral agreement to postpone the sale, the court found a lack of consideration because the Orcillas submitted their HAMP application before BofA's promise to postpone, indicating no bargained-for exchange. For Promissory Estoppel, the Orcillas failed to allege specific facts showing actual reliance on BofA's promise to postpone the sale or how that reliance caused injury (e.g., abandoning plans to cure default). For Fraud, the Orcillas failed to allege specific facts of actual and justifiable reliance and resulting damages for alleged misrepresentations (incorrect sale date, robo-signed notice, promise to postpone, loan ownership). They did not show how these specific misrepresentations caused the loss of their home, given their default. For Quiet Title, the claim against the Bank Defendants failed because they no longer held an adverse claim to title after the sale to Big Sur. The claim against Big Sur was barred by the prior unlawful detainer judgment, as issues of regularity in the trustee's sale are necessarily determined in such actions under Code of Civil Procedure section 1161a, even if the unlawful detainer was a limited civil case, as the superior court has fundamental jurisdiction. For Declaratory Relief, the Orcillas sought a remedy for a past wrong (the 2010 foreclosure sale) rather than to shape future conduct, and thus failed to allege an actual, present controversy.