In Lueras v. BAC Home Loans Servicing, LP, ___ Cal.App.3d ___ (Oct. 31, 2013), the Court of Appeal reversed dismissal of the plaintiff's UCL and other claims stemming from an alleged wrongful foreclosure of his home.
The opinion's discussion of the UCL begins with standing, and holds that "[s]ale of a home through a foreclosure sale is certainly a deprivation of property to which a plaintiff has a cognizable claim." Slip op. at 37. Accordingly, the plaintiff had adequately alleged that he had "lost money or property" within the meaning of the UCL as construed in Kwikset. Id. The next question was whether the loss occurred "as a result of" something the bank had done wrong, rather than merely as a result of the plaintiff's own default on his loan repayment obligations. See id. at 37-38. The Court held that the plaintiff should be given an opportunity to amend the complaint to adequately allege causation:
We believe there is a reasonable possibility that Lueras can cure the defect in the First Amended Complaint. As we explained in addressing the fraud cause of action, Bank of America informed Lueras any pending foreclosure sale would be “on hold” while he was being considered for other foreclosure avoidance programs. Whitaker of Bank of America told him the May 5, 2011 letter was sent in error and he had been approved for a loan modification. Lueras was told the foreclosure sale was to be rescheduled pending Fannie Mae’s approval of his loan modification. Those allegations suggest Lueras can amend his UCL cause of action to allege Bank of America’s misrepresentations caused him to lose his home through foreclosure. In addition, Lueras might be able to allege Bank of America did not work with him in good faith to evaluate and try to identify and implement a permanent solution, as a consequence of which he lost his home through foreclosure.
Slip op. at 38:
Next, without attempting to resolve the split in authority on the definition of "unfair" conduct, the Court held that several of the plaintiff's allegations were adequate to state a UCL claim (assuming the standing allegations were properly amended on remand):
It is fraudulent or unfair for a lender to proceed with foreclosure after informing a borrower he or she has been approved for a loan modification, or telling the borrower he or she will be contacted about other options and the borrower’s home will not be foreclosed on in the meantime, as represented in the May 5 letter. It is fraudulent or unfair for a lender to misrepresent the status or date of a foreclosure sale. In this case, Lueras alleged he contacted Bank of America about the May 6, 2011 letter, was informed he had already been approved for a loan modification, and was told the trustee’s sale, which had been rescheduled for May 18, 2011, would be reset pending approval by Fannie Mae of the loan modification.
Id. at 41-42.