1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PAMELA MARIE SNYDER, Case No. 15-cv-04228-KAW

8 Plaintiff, ORDER DENYING DEFENDANT'S 9 v. MOTION FOR SUMMARY

JUDGMENT

10 BANK OF AMERICA, N.A., et al., Re: Dkt. No. 215 11 Defendants.

12 13 On September 17, 2015, Plaintiff Pamela Marie Snyder filed this case against Defendant 14 Bank of America, N.A., asserting that Defendant mishandled her loan. (See Third Amended 15 Compl. (“TAC”) ¶ 1, Dkt. No. 47.) On January 26, 2018, Judge Laporte granted in part and 16 denied in part Defendant’s motion for summary judgment, such that the only remaining claims are 17 for “intentional and negligent misrepresentation claims with respect to written representations that 18 the loan modification offers were in compliance with the National Mortgage Settlement.” (Summ. 19 J. Ord. at 29, Dkt. No. 151.)1 The case was subsequently reassigned to the undersigned. (Dkt. No. 20 176.) 21 On April 5, 2019, Defendant filed the instant motion for summary judgment. (Def.’s Mot. 22 for Summ. J., Dkt. No. 215.) The Court deemed this matter suitable for disposition without 23 hearing pursuant to Civil Local Rule 7-1(b). (Dkt. No. 250.) Having considered the parties’ 24 briefing and relevant legal authority, the Court DENIES Defendant’s motion for summary 25 judgment. 26 27 1 I. LEGAL STANDARD 2 “A party may move for summary judgment, identifying each claim or defense—or the part 3 of each claim or defense—on which summary judgment is sought.” Fed. R. Civ. P. 56(a). 4 Summary judgment is appropriate when, after adequate discovery, there is no genuine issue as to 5 material facts and the moving party is entitled to judgment as a matter of law. Id.; see Celotex 6 Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Material facts are those that might affect the 7 outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a 8 material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for 9 the nonmoving party. Id. 10 A party seeking summary judgment bears the initial burden of informing the court of the 11 basis for its motion and of identifying those portions of the pleadings and discovery responses that 12 demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Where the 13 moving party will have the burden of proof at trial, it must affirmatively demonstrate that no 14 reasonable trier of fact could find other than for the moving party. Southern Calif. Gas. Co. v. 15 City of Santa Ana, 336 F.3d 885, 888 (9th Cir. 2003). 16 On an issue where the nonmoving party will bear the burden of proof at trial, the moving 17 party may discharge its burden of production by either (1) “produc[ing] evidence negating an 18 essential element of the nonmoving party’s case” or (2) after suitable discovery, “show[ing] that 19 the nonmoving party does not have enough evidence of an essential element of its claim or defense 20 to discharge its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd., v. 21 Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir. 2000); see also Celotex, 477 U.S. at 324-25. 22 Once the moving party meets its initial burden, the opposing party must then set forth 23 specific facts showing that there is some genuine issue for trial in order to defeat the motion. See 24 Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 250. “A party opposing summary judgment may not 25 simply question the credibility of the movant to foreclose summary judgment.” Far Out Prods., 26 Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001). “Instead, the non-moving party must go beyond 27 the pleadings and by its own evidence set forth specific facts showing that there is a genuine issue 1 evidence, through affidavits or admissible discovery material, to show that the dispute exists.” 2 Bhan v. NMS Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). Conclusory or speculative 3 testimony in affidavits and moving papers is insufficient to raise a genuine issue of material fact to 4 defeat summary judgment. Thornhill Publ’g Co., Inc. v. Gen. Tel. & Electronics Corp., 594 F.2d 5 730, 738 (9th Cir. 1979). 6 In deciding a motion for summary judgment, a court must view the evidence in the light 7 most favorable to the nonmoving party and draw all justifiable inferences in its favor. Anderson, 8 477 U.S. at 255; Hunt v. City of Los Angeles, 638 F.3d 703, 709 (9th Cir. 2011). 9 II. DISCUSSION 10 Following Judge Laporte’s summary judgment ruling, the only remaining claims are 11 intentional and negligent misrepresentation claims related to two loan modification offers.2 12 (Summ. J. Ord. at 28-29.) On February 22, 2013, Defendant offered Plaintiff a Trial Payment 13 Plan (“TPP”), which required that Plaintiff make three payments of $7,640.23 beginning on April 14 1, 2013, and ending on June 1, 2013. (Id. at 3.) If Plaintiff successfully completed the TPP, 15 Plaintiff would have received a principal reduction on her loan of $1,003,478.57. (Id.) Plaintiff 16 did not make any payments under the February 22, 2013 TPP. (Id.) On May 15, 2013, Plaintiff 17 received a letter from Defendant, stating that Plaintiff’s loan had been removed from consideration 18 for a National Mortgage Settlement (“NMS”) loan modification. (Id.) 19 On May 28, 2013, Plaintiff appealed the denial of the NMS loan modification. (Summ. J. 20 Ord. at 3.) On June 4, 2013, Plaintiff was offered a second TPP, which required that Plaintiff 21 make three payments of $6,200 beginning on July 1, 2013, and ending on September 1, 2013. 22 (Id.) Successful completion of the TPP would have resulted in a principal reduction of 23 $1,003,475.57. (Id.) Again, Plaintiff did not make any payments under the June 4, 2013 TPP. 24 (Id.) Plaintiff appealed the second TPP, but was informed by letter on July 25, 2013 that her 25 appeal was closed because she had withdrawn her request for a loan modification by telephone on 26 July 11, 2013. (Id. at 3-4.) 27 1 Defendant now moves for summary judgment on these remaining two claims. Defendant 2 primarily offers new evidence to argue that both loan modifications were in compliance with the 3 NMS. (Def.’s Mot. for Summ. J. at 2-3, 5-6, 8.) Otherwise, as discussed below, many of 4 Defendant’s arguments were already raised and addressed by Judge Laporte’s summary judgment 5 order. (See Pl.’s Opp’n at 11, Dkt. No. 242.) 6 A. Standing 7 First, Defendant argues that Plaintiff’s claims must be dismissed because she does not have 8 standing to enforce the terms of the NMS. (Def.’s Mot. for Summ. J. at 11-12.) In the summary 9 judgment order, however, Judge Laporte already rejected this argument, explaining:

10 Plaintiff does not have standing to enforce the terms of the NMS. However, that is not dispositive of her claims in this case. As this 11 Court previously explained when rejecting this argument in Defendants’ first motion to dismiss, “while the complaint references 12 the NMS many times, it does so as part of the background and foundation for Plaintiff’s direct harms against Defendants based on 13 actions taken specific to Plaintiff.” Dkt. No. 29, at 7. Plaintiff has brought claims against Bank of America . . . under the common law 14 and state statutory law. Her standing to bring challenges under the NMS is irrelevant to the merits of those claims. 15 16 (Summ. J. Ord. at 9 (internal modifications omitted, bold added).) 17 In short, Judge Laporte already found that Plaintiff is not seeking to enforce the terms of 18 the NMS, and thus her standing is irrelevant to the misrepresentation claims. Plaintiff’s 19 misrepresentation claims are not based on her entitlement to an NMS-compliant loan modification, 20 but on whether Defendant misled Plaintiff about offering her an NMS-compliant loan 21 modification. Thus, this is not a grounds for granting summary judgment. 22 B. Misrepresentation 23 Second, Defendant contends that Plaintiff’s claims fail because there was no 24 misrepresentation, as Defendant did in fact comply with the NMS. (Def.’s Summ. J. Mot. at 12- 25 14.) In support, Defendant states that in accordance with the NMS, it “developed the Bank of 26 America Special Modification Program . . . .” (Littlejohn Decl. ¶ 14.) Under these guidelines, the 27 income of an applicant who received rental income for a non-owner occupied property was 1 Property x 0.03 / 12 (the “Minimum Rental Yield”), (2) the Appraised Value of the Property x 2 0.04 / 12 (the “Minimum Rental Yield with Appraisal”), or (3) the Verified Rent on the Property. 3 (Littlejohn Decl. ¶ 21.) All other income sources were disregarded. (Littlejohn Decl. ¶ 22.) 4 Because Defendant found that Plaintiff did not live on the Subject Property, and that Plaintiff 5 collected $8,000 in rent from the Subject Property, it calculated Plaintiff’s income as $20,000, or 6 2.5 x $8,000 in verified rent, as the Verified Rent was greater than the Minimum Rental Yield or 7 the Minimum Rental Yield with Appraisal.3 (Littlejohn Decl. ¶¶ 20, 23.) 8 After calculating an applicant’s income, Defendant would determine a debt to income ratio 9 (“DTI”) which would fall in the 25-42% range. (Littlejohn Decl. ¶ 15.) Based on Defendant’s 10 calculation of Plaintiff’s income, therefore, a monthly payment within this DTI range would be 11 between $5,000 and $8,400. Defendant argues that because both TPPs fell within this 25-42% 12 range, it had complied with the NMS and therefore summary judgment should be granted. (Def.’s 13 Summ. J. Mot. at 14.) 14 Defendant’s argument, however, assumes that compliance with the guidelines 15 automatically results in compliance with the NMS. Moreover, as with the prior motion for 16 summary judgment, Plaintiff presents evidence – specifically an expert declaration by Thomas A. 17 Tarter – that creates a question of fact as to whether the TPPs were in compliance with the NMS. 18 (See Summ. J. Ord. at 15.) For example, Mr. Tarter opines that Defendant miscalculated 19 Plaintiff’s Verified Income because she was only temporarily not living at the property. (Tarter 20 Decl. at 11, Dkt. No. 242-2.) He also opines that the 2.5 multiplier is arbitrary and not compliant 21 with the NMS. (Id. at 11-12.) Mr. Tarter further states that the DTI should have been between 25- 22 31%, per Exhibit I of the NMS. (Id. at 14-15.) Finally, Mr. Tarter opines that the NMS required 23 the use of the NPV calculator, also known as the Home Affordable Modification Program 24 (“HAMP”) Model v5.01. (Id. at 19.) Under this calculator, the monthly net income or loss on a 25 rental property would be calculated as 75% of the monthly gross rental income, reduced by the 26

27 3 The Minimum Rental Yield was $4,000 ($1.6 million original principal balance x 0.03 / 12), and 1 post-modification mortgage monthly mortgage payment. Net income and rental loss from other 2 sources would be added to the borrower’s monthly gross income. (Id.) Based on that, Mr. Tarter 3 found that Plaintiff’s gross income was $8,107, and that 31% of that gross income would be 4 $2,513. (Id. at 22.) Thus, the maximum monthly payment for a compliant TPP would be $2,513, 5 far below the $7,460 and $6,200 offered by Defendant.4 (Id.) 6 In opposing Mr. Tarter’s opinion, Defendant raises several arguments. First, Defendant 7 argues that Mr. Tarter incorrectly applies HAMP income calculations. (Def.’s Mot. for Summ. J. 8 at 15-17.) Defendant argues that the programs and requirements “are entirely different,” but does 9 not explain how they are different or make any showing that the NMS does not require the use of 10 the HAMP NPV calculator in this case. Thus, there remains a factual dispute as to whether using 11 the HAMP calculator is required to comply with the NMS in these particular circumstances. 12 Second, Defendant contends Mr. Tarter failed to consider the representations in Plaintiff’s 13 loan modification application, such as whether or not Plaintiff lived on the Subject Property. 14 (Def.’s Mot. for Summ. J. at 17.) In his current declaration, however, Mr. Tarter does explain his 15 analysis that Plaintiff was only temporarily not living at the Subject Property. (See Tarter Decl. at 16 11.) This goes to his analysis as to why Defendant miscalculated the TPP. 17 Third, Defendant argues that the Tarter declaration is inadmissible because it does not 18 comply with Local Rule 5-1(i)(3), which requires that when electronically filing documents with a 19 signatory who is not an ECF user, “the filer of the document shall attest that concurrence in the 20 filing of the document has been obtained from each of the other Signatories, which shall serve in 21 lieu of their signatures on the document.” (Def.’s Reply, at 4, Dkt. No. 248.) It is not clear Local 22 Rule 5-1(i)(3) applies to declarations, rather than documents such as stipulations or joint case 23 management conference statements that require the signatures of multiple attorneys or parties. 24 Further, to the extent Defendant suggests Mr. Tarter did not read his declaration before signing it, 25 4 The Court notes that Judge Laporte already found that Mr. Tarter’s “discussion of the NPV’s 26 application to Plaintiff’s case was well organized and systematic,” such that “his conclusion is not based on his personal opinions and speculation rather than on a systematic assessment on the 27 issue. It may be that Mr. Tarter’s conclusion is incorrect, but that would go to the weight that his 1 the declaration states that it was made and executed by Mr. Tarter on November 7, 2019 in 2 Northridge, California. (See Tarter Decl. at 1, 25.) This is sufficient, particularly at the summary 3 judgment stage. See Hughes v. United States, 953 F.2d 531, 543 (9th Cir. 1992) (“Rule 56 permits 4 the use of affidavits in evaluating a motion for summary judgment. While the facts underlying the 5 affidavit must be of a type that would be admissible as evidence, . . . the affidavit itself does not 6 have to be in a form that would be admissible at trial.”); Lomeli v. Midland Funding, LLC, Case 7 No. 19-cv-1141-LHK, 2019 U.S. Dist. LEXIS 166151, at *20 (N.D. Cal. Sept. 26, 2019) (“the 8 Court does not focus on the admissibility of the evidence’s form, so long as the contents are 9 capable of presentation in an admissible form at trial”) (internal quotations omitted). 10 Fourth, Defendant argues that the Tarter Declaration is inadmissible because it seeks to 11 authenticate documents drafted by other individuals or purported experts, contains inadmissible 12 legal conclusions and hearsay, does not help the understanding of the matter, and improperly 13 opines on Defendant’s state of mind. (Def.’s Reply at 5.) Defendant points to specific sections of 14 Mr. Tarter’s declaration. (Id.) Most of these sections do improperly opine as to Defendant’s state 15 of mind, concluding that Defendant’s deviations from the NMS requirements is so extreme that it 16 must be intentional fraud. (Tarter Decl. at 11:3-6, 13:8-13, 14:8-10, 14:15-17, 16:11-12, 18:18-19, 17 and 24:17-19.) Mr. Tarter is not an expert on this matter.5 Likewise, Mr. Tarter’s opinion that 18 Defendant’s actions caused Plaintiff’s damages is a matter outside his area of expertise, in addition 19 to being an inadmissible legal conclusion. (Tarter Decl. at 16:7-8.) Thus, these opinions were not 20 considered by the Court. These opinions, however, are irrelevant to Mr. Tarter’s opinion 21 regarding whether Defendant’s TPPs comply with the NMS. Such opinions are admissible. (See 22 Tarter Decl. at 12:26-28.) 23 Finally, Defendant objects to Mr. Tarter’s opinions on the valuation of the Subject 24 Property. (Def.’s Reply at 8-9.) Again, these opinions are not relevant to the Court’s evaluation 25 of Mr. Tarter’s opinion, as his calculations of a compliant TPP are based on Plaintiff’s rent 26 income, rather than the Subject Property’s value. (See Tarter Decl. at 22.) Thus, even if the Court 27 1 was not to consider these opinions, there would still be a dispute of material fact as to whether the 2 TPPs were in compliance with the NMS, which in turn goes to whether Defendant made a 3 misrepresentation when it stated that the TPPs were in compliance with the NMS. 4 C. Intent 5 Third, Defendant argues that Plaintiff has not produced any evidence that Defendant made 6 an intentional or negligent misrepresentation to Plaintiff, specifically that Defendant was aware 7 that the TPPs were not compliant with the NMS. (Def.’s Mot. for Summ. J. at 18.) In the 8 summary judgment order, however, Judge Laporte already found there was sufficient evidence to 9 create a triable issue on scienter based on Plaintiff’s submission of “a declaration attesting to 10 numerous conversations she had with [Defendant]’s agents in which they admitted that the TPP 11 offers were not in compliance with the NMS.” (Summ. J. Ord. at 17.) 12 With respect to intent specifically, Judge Laporte also found that:

13 The existence of a genuine dispute of material fact on the issue of intent is further supported by the fact that Bank of America revised 14 an earlier TPP offer to lower the monthly payment after Plaintiff complained that it was not in compliance with the NMS and, yet, 15 according to Plaintiff’s expert, the second TPP offer still was not in compliance with the NMS. The inference of intent that arises from 16 that sequence of facts is buttressed by Plaintiff’s expert evidence that the TPP offers were about three times higher than he opines 17 they should have been, which is a deviation that is so large as to be intentional or, at least, negligent. Even assuming that the burden on 18 the issue of intent shifted to Plaintiff, she has put forward enough evidence to establish a triable issue of fact. 19 20 (Summ. J. Ord. at 18.) Thus, Judge Laporte has already determined that there is a genuine dispute 21 of material fact as to intent based on the significant difference between Defendant’s TPP offers 22 and the amount Mr. Tarter opines would be compliant with the NMS. Defendant does not provide 23 any reason for the Court to reconsider Judge Laporte’s ruling – and, in fact, does not acknowledge 24 her findings at all. See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988) (“A 25 court has the power to revisit prior decisions of its own or of a coordinate court in any 26 circumstance, although as a rule courts should be loathe to do so in the absence of extraordinary 27 circumstance such as where the initial decision was clearly erroneous and would work a manifest 1 D. Reliance 2 Fourth, Defendant contends that Plaintiff cannot establish reliance because she declined 3 both TPPs. (Def.’s Mot. for Summ. J. at 20.) Further, Defendant argues that it had no obligation 4 to modify Plaintiff’s loan, so any alleged reliance on such a modification fails as a matter of law. 5 (Id.) Defendant also suggests that “Plaintiff’s rejection of the TPPs merely required her to comply 6 with her pre-existing Loan obligation, and Plaintiff’s ‘reliance’ cannot be detrimental, as a matter 7 of law.” (Id. at 21.) 8 Again, Judge Laporte already decided this issue, finding that “Plaintiff ha[d], albeit just 9 barely, put forward sufficient evidence establishing a triable issue of fact as to her reliance” by 10 providing evidence of sales receipts, progress payment receipts, and handwritten notes regarding 11 construction and the purchase of supplies for ongoing construction at the Subject Property. 12 (Summ. J. Ord. at 19.) Plaintiff had asserted that the construction was done in reliance on 13 Defendant’s misrepresentations. (Id. at 18-19.) Further, with respect to Defendant’s argument 14 that Plaintiff never accepted the TPP and thus could not have relied on Defendant to give her a 15 loan modification, Judge Laporte found:

16 Once again, this argument misconstrues Plaintiff’s allegations because she alleges that she knew that the TPPs would lead to the 17 permanent loan modification if accepted. Further, she alleges and demonstrates through Bank of America’s own documents that the 18 TPPs’ terms were substantially similar to what the terms of the permanent loan modification would have been, so she had a 19 reasonable expectation and relied on the understanding that terms of the TPPs should have been NMS-compliant as well but were not. 20 For these reasons, this is not a proper basis for granting summary judgment on the element of reliance. 21 22 (Summ. J. Ord. at 19.) Again, Defendant provides no reason for the Court to reconsider Judge 23 Laporte’s decision. Indeed, a reasonable juror could conclude that Plaintiff, believing that she was 24 being offered a compliant loan modification (which would eventually lead to reductions in her 25 monthly payments and a $1 million reduction in her principal), continued to invest in major 26 construction on the property. Doing so was arguably to her detriment. If Plaintiff did not believe 27 she would get a compliant loan modification, she may not have made such investments because it 1 E. Damages 2 Finally, Defendant argues that Plaintiff did not suffer any ascertainable damages because 3 || Plaintiff was already in default. (Def.’s Mot. for Summ. J. at 22.) Further, Defendant contends 4 || that Plaintiff was not entitled to any modification regardless. (/d.) 5 As with standing, intent, and reliance, Defendant fails to acknowledge Judge Laporte’s 6 || prior finding entirely. Judge Laporte found that there was sufficient evidence of damages based 7 on “Plaintiff's deposition testimony that she would have made payments on the loan if she had 8 || been given the correct NMS-compliant modification.” (Summ. J. Ord. at 20.) Further, to the 9 extent Plaintiff can establish that she relied on Defendant in moving forward with construction, 10 || Plaintiff could potentially seek damages for construction she would not have engaged in but for 11 the misrepresentations. 12 Hl. CONCLUSION 13 For the reasons stated above, the Court DENIES Defendant’s motion for summary 14 || judgment. The Court REFERS the parties to Judge Hixson for a settlement conference, to occur 3 15 before the January 15, 2020 pretrial conference. The Court VACATES the December 10, 2019 a 16 || case management conference.

IT IS SO ORDERED.

18 Dated: November 21, 2019 .

20 United States Magistrate Judge 21 22 23 24 25 26 27 28