Filed 8/27/15 Sorokko v. Bank of America CA1/5
                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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 FIVE


SERGE SOROKKO,
         Plaintiff and Appellant,
                                                                     A140544
v.
BANK OF AMERICA, N.A., et al.,                                       (Marin County
                                                                     Super. Ct. No. CIV 12 03368)
         Defendants and Respondents.


         In 2005, Serge Sorokko took out an adjustable rate mortgage on his home. Bank
of America, N.A. (BANA) serviced Sorokko’s loan. He defaulted in 2009. After
approximately three years of unsuccessful inquiries about modification of his loan’s
terms, Sorokko learned that BANA had set a foreclosure date and loan modification was
no longer an option. He brought this action to prevent foreclosure and obtain other forms
of relief. The trial court sustained BANA’s demurrers in their entirety and we affirm.
                                               I.       BACKGROUND
         “Because the function of a demurrer is not to test the truth or accuracy of the facts
alleged in the complaint, we assume the truth of all properly pleaded factual allegations.
[Citation.] Whether the plaintiff will be able to prove these allegations is not relevant;
our focus is on the legal sufficiency of the complaint.” (Los Altos Golf & Country Club
v. County of Santa Clara (2008) 165 Cal.App.4th 198, 203.)




                                                             1
A.     Loan Modification Negotiations
       In 2005, Sorokko closed on a mortgage loan (Loan) secured by his Mill Valley
home. The Loan was later acquired by BANA. Sorokko stopped making payments on
the Loan in about July 2009.
       1.     2009 Communications with BANA
       In October 2009, Sorokko received from BANA an “Important Message About
Your Loan,” which offered him an opportunity to “save your home” via alternatives to
foreclosure that included “Loan Modification, Repayment Arrangements, Deed-in-Lieu,
Short Sale/Payoff, [and] Full Reinstatement.” Sorokko called the telephone number
provided in the message several times and “was promised by [BANA’s] representatives
in departments variously titled ‘foreclosure avoidance,’ ‘modification department,’
‘customer assistance,’ ‘retention division,’ ‘loss mitigation,’ and four separate ‘single
point(s) of contact’ that he would receive advice of available options . . . offered by
BANA to enable [Sorokko] to avoid foreclosure.” Sorokko “clearly and repeatedly
informed [BANA representatives] that he could not make the full payment due from him
at that time. . . . [¶] . . . [He] was specifically advised by these same representatives that
BANA had, ‘for you [Sorokko],’ ‘many options besides paying your current loan
according to its current terms’ . . . . BANA’s representatives expressly promised
[Sorokko] that they would help him to obtain the benefits of these various alternatives[,]
. . . and that they had ‘no desire or intention of foreclosing,’ and [Sorokko] believed
them.” Similar representations were made to Sorokko’s counsel.
       Sorokko alleged in his second amended complaint, “In conversation with BANA’s
representatives [(apparently in 2009)], [Sorokko] clearly and repeatedly informed
[BANA representatives] that . . . he was faced with the terrible choice of letting his home
be foreclosed upon or filing for bankruptcy protection . . . . When [Sorokko] so much as
mentioned bankruptcy, BANA’s representatives on at least two different occasions told
him, in words surprisingly similar one to the other, . . . [paraphrasing]: ‘. . . Bankruptcy
should be your last resort. We do not want our borrowers to have to resort to bankruptcy
to save their homes. Before you take such a drastic step you should explore with us our


                                               2
alternatives for struggling homeowners such as yourself.’ ” These alternatives were
alleged to have “expressly includ[ed] . . . loan modification.”
       On appeal, Sorokko represents that his complaint can be amended to add the
following allegations: “Before I retained counsel in late 2009 I [told] a woman at BANA
. . . [I] was seeking ways to retain my home short of filing for bankruptcy, as had been
recommended to me as my only alternative. She said, in words simple, clear and close to
this paraphrase: ‘We [(BANA)] have multiple programs to help you save your home and
avoid foreclosure. You don’t have to go bankrupt to save your home.’ I said, in
paraphrase: ‘Are you sure you can find ways for me to avoid bankruptcy and save my
home? This is my life we are talking about.’ The woman said—and I believe I am
quoting her here: ‘Sir, forgive me for being blunt, but you are not the first, nor the last
customer I have dealt with under similar circumstances, and all but one were able to save
their property once loan modifications or refinancing was in place. The only one that
didn’t save it was the lady who filed for bankruptcy in the middle of the refi process,
against my advice.’ ”
       2.     2010–2011 Communications with BANA
       In January 2010, Sorokko received a “Notice of Intent to Accelerate” from BANA,
which specified full payment of the past due amount of $77,788.10 within 30 days as the
only means of avoiding foreclosure. In January and February 2010, and again in
June 2011, Sorokko and his attorney attempted to contact BANA to pursue other
alternatives to foreclosure. They were unable to reach “live human beings with
knowledge of the circumstances” of the Loan or authority to discuss the Loan, familiarity
with alternatives previously promised to Sorokko, or the ability or willingness to refer
them to others who could help. BANA allegedly “trained and charged its multiple single
points of contact so that any one of them would promise that BANA would help
[Sorokko], but the promised assistance was never intended by BANA to be provided by
any of its employees, and one never encountered the promising employees again to
confirm the promise or demand the performance. . . . The avenues BANA promised
[Sorokko] were dead ends leading nowhere.” In the second amended complaint, Sorokko


                                              3
further alleged that BANA’s failure to foreclose before 2012 confirmed his belief in the
“vitality” of BANA’s promises.
       3.     2012 Communications with BANA
       In March 2012, Sorokko received a “Notice of Default and Election to Sell Under
Deed of Trust” from BANA. The notice stated that Sorokko could avoid foreclosure by
contacting BANA’s foreclosure department. Sorokko and his counsel made several calls
to the designated telephone number, but reached people who had no record of Sorokko’s
previous inquiries. On June 27, Sorokko’s attorney contacted “Josh,” who said he was
Sorokko’s “single point of contact.” Josh reported that no foreclosure date had been set
and asked whether Sorokko would like to be considered for loan modification. When the
attorney expressed interest, Josh referred him to “foreclosure attorneys” at a different
telephone number, which turned out to be an automated line. The automated message
stated that no foreclosure sale date had been set for Sorokko’s home, but when the
attorney called the number again on July 5 he learned a sale had been scheduled for
July 27.
       On July 18, 2012, the attorney again called the number provided in the notice of
default and spoke to “Shalika,” who first said she was Sorokko’s single point of contact
but then said “Nadia,” the “customer relations manager” for the Loan, was Sorokko’s
single point of contact. Nadia said that, because of the close date of the foreclosure sale,
Sorokko’s only option to avoid foreclosure was to pay the full amount due. Upon further
inquiry, Nadia referred Sorokko’s attorney to “foreclosure attorneys,” again providing the
number for the automated line. Sorokko was never able to reach a live person at that
number.
       On July 24, 2012, Sorokko sued BANA, seeking to enjoin foreclosure of his
home, obtain an accounting and recover damages, among other forms of relief.
       4.     Reliance and Damages
       Sorokko allegedly lost or incurred the down payment, closing costs, brokerage
fees and mortgage payments he made on the Loan, the cost of homeowner’s insurance he
paid on an “underwater” house, his positive credit rating, prepayment penalties, excessive


                                              4
interest accumulation, attorney fees, pain and suffering, and emotional distress. Sorokko
alleged he paid legal counsel to assist him in negotiating a loan modification to no avail,
and he refrained from listing his house for a short sale, “thus losing three years of
opportunity to unload the property and salvage and/or restore his credit rating, which is
now in ruins . . . .”
       Sorokko also refrained from filing for bankruptcy after spending money on a
bankruptcy legal consultation, and he alleged that bankruptcy had since become
untenable. “In the time since thus foreswearing from filing for bankruptcy protection,
[Sorokko’s] circumstances have materially changed. His secured debt to BANA has
increased significantly by late fees as well as interest payments. His unsecured debt to
others (which would have been easily discharged in bankruptcy) has been paid down in
preparation for improving his chances to qualify for loan modification relief . . . .”
Sorokko also made “permanent long-term forward-looking repairs and improvements to
[his home] (including to the private road leading to it, to its foundation and to its
kitchen),” and he “made significant changes to his company’s business model for the
purpose of enabling him to demonstrate to BANA in loan modification negotiations that
he was qualified for a loan modification . . . .”
B.     Trial Court Proceedings
       Sorokko’s original causes of action included promissory estoppel, fraud and
deceit, negligent misrepresentation, breach of fiduciary duty, negligence, and violation of
the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.). As to all claims,
the trial court sustained BANA’s demurrer to the complaint with leave to amend. In his
first amended complaint, Sorokko replaced his breach of fiduciary duty claim with a
claim for breach of the implied covenant of good faith and fair dealing and otherwise
renewed his prior claims. The court sustained BANA’s demurrer to the first amended
complaint and granted leave to amend as to the promissory estoppel cause of action only.
Sorokko’s second amended complaint raised a sole promissory estoppel claim; the court
sustained BANA’s demurrer to that claim without leave to amend. The court then
entered judgment for BANA and this appeal followed.


                                               5
                                    II.     DISCUSSION
A.     Background
       Since 2007, California has experienced an “avalanche” of home foreclosures.
(Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 902 & fn. 17 (Jolley).)
In 2008, the California Legislature took initial steps to protect homeowners from
“skyrocketing residential property foreclosure rates” by passing the Perata Mortgage
Relief Act. (Stats. 2008, ch. 69, § 1, p. 224 [findings and declarations]; see Mabry v.
Superior Court (2010) 185 Cal.App.4th 208, 214.) Among other things, the legislation,
which became operative in relevant part in September 2008 (see Stats. 2008, ch. 69, § 10,
p. 230), required that, before a notice of default may be filed, a lender contact the
borrower in person or by phone to “assess” the borrower’s financial situation and
“explore options” to prevent foreclosure. (Civ. Code, former § 2923.5, subd. (a)(2),
added by Stats. 2008, ch. 69, § 2, p. 225.)1 The Legislature declared its intent that a
lender2 “offer the borrower a loan modification or workout plan if such a modification or
plan is consistent with its contractual or other authority.” (§ 2923.6, subd. (b).)
However, “nothing in section 2923.5 . . . require[d] the lender to rewrite or modify the
loan.” (Mabry, at p. 214.) Similarly, the federal Troubled Asset Relief Program
encouraged borrower-friendly loan servicing practices (the Home Affordable
Modification Program), but the federal program also provided financial incentives for


       1
         Undesignated statutory references are to the Civil Code. Sorokko’s mortgage
fell within the class of mortgages covered by former section 2923.5. (See former
§ 2923.5, subd. (i), added by Stats. 2008, ch. 69, § 2, p. 225 [“loans made from January 1,
2003, to December 31, 2007, inclusive, that are secured by residential real property and
are for owner-occupied residences”]; see §§ 2923.5, subd. (f), 2924.15.) Section 2923.5
was amended in immaterial ways in 2009. (§ 2923.5, as amended by Stats. 2009, ch. 43,
§ 1, No. 5 West’s Cal. Legis. Service, p. 2228.)
       2
         The 2008 enactment referred to “the mortgagee, beneficiary, or authorized agent”
and later amendments refer to “the mortgage loan servicer.” (See § 2923.5.) Because the
specific meaning of these terms is not directly at issue here and has not been briefed, we
assume for purposes of argument that BANA falls within the relevant categories. We use
the general term “lender” to refer to BANA and similar defendants.


                                              6
such practices and required lenders to offer loan modifications in certain circumstances.3
(See Bushell v. JPMorgan Chase Bank, N.A., supra, 220 Cal.App.4th at pp. 921–923.)
         A practice of “dual tracking” emerged: “ ‘When a borrower in default seeks a
loan modification, the institution often continues to pursue foreclosure at the same time.’
[Citations.] The result is that the borrower does not know where he or she stands, and by
the time foreclosure becomes the lender’s clear choice, it is too late for the borrower to
find options to avoid it.” (Jolley, supra, 213 Cal.App.4th at p. 904.) In the federal Home
Affordable Modification Program context, the Fourth District described a “well-
established and predictable pattern. A homeowner in distress because of the meltdown of
the financial markets applies to a lender for mortgage relief. The lender approves the
homeowner’s participation in a . . . program meant to lower mortgage payments and
avoid foreclosure. The homeowner tries to comply with the terms of the mortgage
modification program. He or she contacts the lender to make sure everything is
proceeding according to plan and either receives assurances that it is or is passed from
person to person, each of whom professes to know nothing about the loan in question or
its modification; sometimes both. Then the foreclosure notice is posted on the door, and
the house is sold.” (Fleet v. Bank of America, N.A. (2014) 229 Cal.App.4th 1403, 1405–
1406.)
         Partly in response to this practice, the California Legislature enacted the
Homeowner Bill of Rights (HBOR) in 2012, effective January 1, 2013.4 (Alvarez v. BAC


         3
         Unlike the precatory provisions of section 2923.6, the lender “ ‘must offer’ ” the
borrower a permanent loan modification under the Home Affordable Modification
Program if the borrower meets the statutory qualifications and has complied with all
requirements of a trial period plan. (Bushell v. JPMorgan Chase Bank, N.A. (2013)
220 Cal.App.4th 915, 924–925; cf. Mabry v. Superior Court, supra, 185 Cal.App.4th at
p. 222 [former § 2923.6 “merely expresses the hope that lenders will offer loan
modifications on certain terms”].) This is because “[w]hen [a lender] received public tax
dollars under the [federal] Troubled Asset Relief Program, it agreed to offer [trial period
plans] and loan modifications under [the Home Affordable Modification Program]
according to [regulations] . . . issued by the Department of the Treasury.” (West v.
JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 796–797.)


                                               7
Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941, 950 (Alvarez).) HBOR
regulates dual tracking by prohibiting lenders from recording a notice of default or sale or
conducting a trustee’s sale if the borrower’s loan modification application is still pending
(§§ 2923.5, subd. (a)(1)(B), 2924.18, subd. (a)(1)), and in certain cases for 30 days after
denial to allow the borrower time to appeal the denial. (§§ 2923.55, 2923.6, subds. (c)–
(h).) Lenders are also required to designate a “single point of contact” for borrowers who
request a foreclosure prevention alternative (§ 2923.7),5 and to comply with other notice
requirements when considering an application for a foreclosure prevention alternative
(§§ 2924.9–2924.11). HBOR provides a private right of action to seek injunctive relief
and damages or statutory penalties to enforce certain provisions (§§ 2924.12, 2924.19),
but parties covered by and in compliance with the National Mortgage Settlement are
shielded from liability for violations (§ 2924.12, subd. (g)).6 HBOR “only provides


       4
           The current HBOR provisions cited in this paragraph apply to “mortgages or
deeds of trust secured by residential real property not exceeding 4 dwelling units that is
owner-occupied . . . [and] those entities who conduct more than 175 foreclosure sales per
year . . . .” (Legis. Counsel’s Dig., Assem. Bill No. 278 (2011–2012 Reg. Sess.); Legis.
Counsel’s Dig., Sen. Bill No. 900 (2001–2012 Reg. Sess.).)
       5
         HBOR requires lenders to provide borrowers with a single point of contact
“responsible for doing all of the following: [¶] (1) Communicating the process by which
a borrower may apply for an available foreclosure prevention alternative and the deadline
for any required submissions to be considered for these options. [¶] (2) Coordinating
receipt of all documents associated with available foreclosure prevention alternatives and
notifying the borrower of any missing documents necessary to complete the application.
[¶] (3) Having access to current information and personnel sufficient to timely,
accurately, and adequately inform the borrower of the current status of the foreclosure
prevention alternative. [¶] (4) Ensuring that a borrower is considered for all foreclosure
prevention alternatives offered by, or through, the mortgage servicer, if any. [¶]
(5) Having access to individuals with the ability and authority to stop foreclosure
proceedings when necessary.” (§ 2923.7, subd. (b).) “The single point of contact
provision, like the dual-tracking provision, is intended to prevent borrowers from being
given the runaround, being told one thing by one bank employee while something
entirely different is being pursued by another.” (Jolley, supra, 213 Cal.App.4th at
pp. 904–905.)
       6
        On April 4, 2012, BANA entered into the National Mortgage Settlement with the
United States and attorneys general from several states including California. (See

                                             8
procedural protections to foster alternatives to foreclosure; it does not entitle a borrower
to a loan modification. [(§ 2923.4, subd. (a).)]” (Penermon v. Wells Fargo Bank, N.A.,
supra, 47 F.Supp.3d at p. 993.)
       Courts have not been consistent in their approach to borrowers’ civil claims
arising from requests for loan modification. A clear split of authority exists as to whether
lenders owe borrowers a duty of reasonable care in the loan modification context. Two
opinions out of the First District hold or state in dicta that, in light of the developing crisis
and legislative enactments such as HBOR, courts must recognize such a duty of care.
(Alvarez, supra, 228 Cal.App.4th at pp. 944–952; Jolley, supra, 213 Cal.App.4th at pp.
899–901.) In Lueras v. BAC Home Loans Servicing L.P. (2013) 221 Cal.App.4th 49, 68
(Lueras), Division Three of the Fourth District, however, disagreed. All three cases
begin their analysis with the “general rule” that lenders and borrowers operate at arms
length, and that “a financial institution owes no duty of care to a borrower when the
institution’s involvement in the loan transaction does not exceed the scope of its
conventional role as a mere lender of money.” (Alvarez, at p. 945; Jolley, at pp. 898,
901; Lueras, at p. 63.) The six factors set forth in Biakanja v. Irving (1958) 49 Cal.2d
647, 650 are then applied to guide the duty of care analysis. (Alvarez, at pp. 948–949;
Jolley, at pp. 899–901 [applying factors to construction loan modification], 901–906
[extending analysis to residential loan modification]; Lueras, at p. 67.) Different
conclusions are reached, albeit on somewhat different facts.
       No published California appellate case has since followed Alvarez, nor has any
published California authority adopted the rationale of Lueras. Federal courts have
similarly split on this issue. (See, e.g., Meixner v. Wells Fargo Bank, N.A. (E.D.Cal.,
Apr. 23, 2015, No. 2:14-cv-02143) 2015 U.S.Dist. Lexis 54206 [applying Alvarez to

Jurewitz v. Bank of America, N.A. (S.D.Cal. 2013) 938 F.Supp.2d 994, 997; Penermon v.
Wells Fargo Bank, N.A. (N.D.Cal. 2014) 47 F.Supp.3d 982, 992, fn. 2.) This consent
judgment requires BANA to comply with certain loan servicing standards including
prohibitions on dual tracking and requirements for a single point of contact, but it is
enforceable only by the parties to the judgment. (§ 2923.4, subd. (b); Jurewitz, at p. 998;
Penermon, at pp. 992, 993, fns. 2, 4.)


                                               9
conclude “that a lender owes a duty of care to the borrower when considering his loan
modification application”]; Carbajal v. Wells Fargo Bank, N.A. (C.D.Cal., Apr. 10, 2015,
No. CV 14-7851) 2015 U.S. Dist. Lexis 47918 [applying Lueras to conclude that “Wells
Fargo was acting as a conventional lender of money when it accepted and considered
applications seeking to modify Plaintiff’s loan terms; therefore, Wells Fargo did not owe
Plaintiff a duty of care when reviewing the applications”].) We need not, however,
weigh in on the debate in this particular case. Sorokko does not rely on Jolley, Alvarez or
a lender’s duty to a borrower to support his complaint, and the facts of Sorokko’s case are
distinguishable from most loan modification cases because he never reached the stage of
submitting a loan modification application.7 Sorokko consequently fails to state any
cognizable claim for relief.
B.     Demurrer Standard of Review
       We review an order sustaining a demurrer de novo, exercising our independent
judgment as to whether, as a matter of law, the complaint states a cause of action on any
available legal theory. (See Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.)
We “assume the truth of the complaint’s properly pleaded or implied factual allegations.
[Citation.] . . . In addition, we give the complaint a reasonable interpretation, and read it
in context. [Citation.] . . . If the court sustained the demurrer without leave to amend, as
here, we must decide whether there is a reasonable possibility the plaintiff could cure the
defect with an amendment. [Citation.] If we find that an amendment could cure the
defect, we conclude that the trial court abused its discretion and we reverse; if not, no
abuse of discretion has occurred.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th
1074, 1081.) The plaintiff may demonstrate in the appellate court that an amendment
would cure the defect even if he failed to do so in the trial court. (Ross v. Creel Printing
& Publishing Co. (2002) 100 Cal.App.4th 736, 748.)

       7
         Sorokko represents in his briefing, without citation to the record, that he
submitted “several loan modification applications” after he filed suit, without response or
acknowledgement from BANA. None of his causes of action are based on such
applications, assuming they were made.


                                              10
C.     Promissory Estoppel
       “ ‘ “The elements of a promissory estoppel claim are ‘(1) a promise clear and
unambiguous in its terms; (2) reliance by the party to whom the promise is made;
(3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the
estoppel must be injured by his reliance.’ ” ’ ” (Aceves v. U.S. Bank, N.A. (2011)
192 Cal.App.4th 218, 225 (Aceves).)
       Sorokko cites cases allowing borrowers’ promissory estoppel claims to go forward
based on allegations the borrowers were granted temporary loan modifications; they
made payments under the temporary arrangement; the lender denied or failed to act on a
permanent modification in bad faith; and the lender then foreclosed or pursued
foreclosure on their homes. (See Bushell v. JPMorgan Chase Bank, N.A., supra,
220 Cal.App.4th at pp. 919–921, 929–930; West v. JPMorgan Chase Bank, N.A., supra,
214 Cal.App.4th at pp. 803–805; see also Fleet v. Bank of America, N.A., supra,
229 Cal.App.4th at pp. 1406–1407, 1412–1413; Alimena v. Vericrest Financial, Inc.
(E.D.Cal. 2013) 964 F.Supp.2d 1200, 1205–1208, 1216–1220.) In Bushell, the borrowers
were told that if they complied with the temporary modification terms, “ ‘we will modify
your mortgage loan and you can avoid foreclosure.’ ” (Bushell, at pp. 919–920; see
Fleet, at p. 1409; Alimena, at p. 1216.) In West, the trial modification agreement was
construed to include a similar promise. (West, at pp. 797–798.)
       Sorokko was never granted a temporary loan modification nor was he promised a
permanent modification if he complied with specified conditions. In fact, Sorokko does
not allege any clear and unambiguous promise on which he could rely. He alleges he was
advised in 2009 that BANA had alternatives to foreclosure “for [Sorokko],” that BANA
would help Sorokko explore those alternatives, and that BANA had no intention of
foreclosing (presumably, while exploration of the alternatives took place). At best, these
statements amounted to a promise to “explore alternatives” with Sorokko and to forbear
from pursuing foreclosure while doing so. Sorokko has cited no case and we have found
no case holding that such a promise alone—unsupported by acceptance of a loan
modification application or at least clear instructions on how to apply for a


                                             11
modification—is sufficient to support a promissory estoppel claim. That is, no court has
held that an initial optimistic but generic conversation about vague alternatives to
foreclosure is a clear and unambiguous promise sufficient to trigger reasonable and
foreseeable reliance to the detriment of the borrower, particularly for a period of three
and one half years during which the lender takes no further action to carry through on the
alleged promise.
       Sorokko relies heavily on Aceves, supra, 192 Cal.App.4th 218, which in turn relies
in part on Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031. In the latter case,
the lender promised to postpone foreclosure if the borrowers needed more time to close
on a loan that the borrowers needed to cure their default. (Id. at pp. 1035–1036.)
Relying on the promise, the borrowers refinanced other property they owned at a high
interest rate. The lender, however, breached its promise and sold the property at a
foreclosure sale. (Id. at pp. 1041–1042.) The appellate court held the lender’s promise
was sufficiently clear and unambiguous to be enforceable (id. at pp. 1045–1046), and the
borrowers suffered detriment by “procuring a high cost, high interest loan” (id. at
p. 1041). Here, Sorokko does not allege a similarly unambiguous promise that would
foreseeably induce detrimental reliance by the borrower in the foreseeable short term.
       In Aceves, supra, 192 Cal.App.4th 218, the borrower defaulted on her mortgage,
filed for chapter 7 (11 U.S.C. §§ 701–784) bankruptcy, and planned to convert her case to
chapter 13 (11 U.S.C. §§ 1301–1330), which would have afforded her options to avoid
foreclosure. Her lender promised to work with her on a loan modification if she refrained
from further bankruptcy proceedings and allowed the bankruptcy stay to be lifted. She
agreed. The bank, however, double tracked, processing her loan for foreclosure at the
same time it invited her to submit documents for a possible loan modification. After the
bankruptcy stay was lifted, “the bank did not work with [the borrower] in an attempt to
reinstate and modify the loan” (id. at p. 221) and foreclosed on the home. (Id. at pp. 221–
224.) The court held that the lender’s promise was enforceable even though it promised
only to negotiate a possible loan modification, not to actually modify the loan. (Id. at
p. 226.) Moreover, the borrower’s reliance was reasonable and foreseeable because a


                                             12
loan modification “would have been more beneficial to [the borrower] than the relief she
could have obtained under chapter 13.” (Id. at p. 227.) The borrower nevertheless
suffered detriment because she lost rights that she would have had in a chapter 13
bankruptcy proceeding that would have been preferable to foreclosure, including the right
to cure the default and reinstate the loan to predefault conditions with up to five years to
pay the arrearages. (Id. at pp. 229–230.) The borrower had affirmatively alleged that she
could and would have taken advantage of these rights if she had gone through with the
chapter 13 filing. (Id. at p. 230.)
       The Aceves borrower’s circumstances are distinguishable from those of Sorokko.
Aceves, in our view, is more akin to a breach of contract case than promissory estoppel:
the lender conditioned its promise to consider a loan modification on a specific action by
the borrower—nonopposition to lifting the bankruptcy stay, without which a foreclosure
could not proceed. In other words, the borrower’s cooperation in releasing the stay was
bargained-for consideration for the promise to consider her for a loan modification—a
promise the lender failed to honor. Here, no such exchange of promises occurred.
Moreover, Sorokko does not allege that BANA promised to consider him for a loan
modification if he refrained from filing for bankruptcy. He alleges a BANA
representative told him “you should explore” other alternatives before filing for
bankruptcy or said that, in her experience, the only person who failed to save her home
was the one who filed for bankruptcy. Neither of these statements was a promise. (See
Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 413–414, 417–418
[statement that trustee’s sale was no longer scheduled was not a promise that it would not
be scheduled as long as the loan modification was under review].)
       We affirm the trial court’s dismissal of Sorokko’s promissory estoppel claim.
D.     Fraud
       On appeal, Sorokko clarifies that his fraud claim is based on a theory of
promissory fraud. “A cause of action for promissory fraud requires the plaintiff to allege
that the promissor did not intend to perform at the time the promise was made, that the
promise was intended to deceive and induce reliance, that it did induce reliance, and that


                                             13
this reliance resulted in damages.” (Fleet v. Bank of America, N.A., supra,
229 Cal.App.4th at p. 1411.) “Each element in a cause of action for fraud or negligent
misrepresentation must be factually and specifically alleged.” (Cadlo v. Owens-Illinois,
Inc. (2004) 125 Cal.App.4th 513, 519.)
         Assuming for purposes of argument that the alleged promise to “explore
alternatives” and forbear from pursuing foreclosure while doing so was sufficiently clear
to support a fraud claim, the claim nevertheless fails because Sorokko cannot establish
reasonable and foreseeable reliance on such a promise alone—unsupported by acceptance
of a loan modification application or even clear instructions on how to apply for a
modification—over a period of three and one-half years during which the lender took no
further action to carry through on the alleged promise.
         We thus affirm the trial court’s dismissal of Sorokko’s promissory fraud claim
based on BANA’s loan modification conduct.
E.       Negligent Misrepresentation
         Sorokko premises his negligent misrepresentation claim on the same promises that
underlie his promissory fraud claim. He argues, “if the cause of action for fraud and
deceit has been properly pled, . . . a cause of action for negligent misrepresentation can
be properly pled simply by omitting all allegations of intent to deceive . . . .” However,
there is no cognizable claim for negligent misrepresentation based on a promise.
(Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158–159.)
Therefore, we affirm the trial court’s dismissal of Sorokko’s negligent misrepresentation
claim.
F.       Negligence
         “ ‘To state a cause of action for negligence, a plaintiff must allege (1) the
defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and
(3) the breach proximately caused the plaintiff’s damages or injuries.’ ” (Alvarez, supra,
228 Cal.App.4th at p. 944.)
         Sorokko argues BANA owed him a duty of care because it acted as a loan servicer
rather than a lender. While the case authority is split regarding the existence of a duty of


                                               14
care in this context, the cases we have reviewed appear to agree that the duty of care
analysis for lenders and loan servicers is identical, i.e., where no duty of care exists for a
lender, no duty of care exists for the servicer. (See Lueras, supra, 221 Cal.App.4th at
pp. 64–65; Jolley, supra, 213 Cal.App.4th at p. 904; Alvarez, supra, 228 Cal.App.4th at
p. 951.)
       Sorokko does not address the split in authority about whether lenders (or loan
servicers) owe a duty of care to borrowers in the loan modification context, and he does
not argue that a duty arises from application of the Biakanja factors. Instead, Sorokko
suggests that BANA owed what amounts to a fiduciary duty toward him—a higher
standard of care—because of its “confidential relationship with [him] as a consequence of
filling the servicer’s role.” We are wholly unpersuaded by this argument. “ ‘ “The
essence of a fiduciary or confidential relationship is that the parties do not deal on equal
terms because the person in whom trust and confidence is reposed and who accepts that
trust and confidence is in a superior position to exert unique influence over the dependent
party.” ’ [Citation.] Fiduciary obligations ‘generally come into play when one party’s
vulnerability is so substantial as to give rise to equitable concerns . . . .’ ” (Brown v.
Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 960.) In Brown, a financial adviser
urged the plaintiffs to sign a brokerage agreement without explaining that it included an
arbitration clause, even though she knew the plaintiffs were elderly and had failing
vision. (Id. at pp. 946–950.) The court held there was substantial evidence the adviser
was in a fiduciary relationship with the plaintiffs and remanded for the trial court to
determine if the agreement was rendered unenforceable by constructive fraud in its
execution. (Id. at pp. 958–962.) As a borrower in default, Sorokko may well have been
financially vulnerable compared to BANA, but he did not repose trust and confidence in
BANA over his financial affairs; rather, he simply made inquires about loan
modification, an ordinary commercial transaction.
       We also conclude that, regardless of whether one agrees with the reasoning of
Alvarez or Lueras, BANA did not owe Sorokko a duty of reasonable care on the facts he
alleged: Sorokko was never promised a loan modification and did not even submit an


                                              15
application for loan modification. In Adams v. PNC Bank, N.A. (N.D.Cal., Dec. 29, 2014,
No. 5:14-cv-04330) 2014 U.S.Dist. Lexis 177887, the borrower “inquired into applying
for a loan modification on his second loan” and “Defendants advised him against making
any additional payments . . . until his loan modification was finalized. Ultimately, a
Notice of Trustee’s Sale was recorded . . . followed shortly thereafter by a Trustee’s
Sale.” (Ibid.) The court concluded that the Biakanja factors “weigh[ed] against finding
any duty, especially where as here . . . the application for loan modification never
progressed to a concrete stage.” (Ibid.) We are aware of no state or federal opinion
finding a duty on similar facts.
       Sorokko argues that his negligence claim is supported by allegations regarding
LIBOR (the average interbank interest rate at which a selection of banks on the London
money market are prepared to lend to one another). He relies on his general allegations
that BANA “knowingly manipulate[ed] and inflat[ed] the LIBOR index, from which
[Sorokko’s] adjustable interest rates were calculated” and “their use of LIBOR was
infected by fraud.” As these allegations expressly acknowledge, these are fraud
allegations, not negligence allegations. Sorokko, however, does not base his fraud claim
on these allegations, nor does he plead them with particularity.
       We affirm the trial court’s dismissal of Sorokko’s negligence claim.
G.     Breach of the Implied Covenant of Good Faith and Fair Dealing
       “The covenant of good faith and fair dealing is imposed upon each party to a
contract. [Citation.] This fundamental covenant prevents the contracting parties from
taking actions that will deprive another party of the benefits of the agreement. [Citation.]
. . . [¶] ‘[T]he scope of conduct prohibited by the covenant of good faith is circumscribed
by the purposes and express terms of the contract.’ [Citation.] . . . [¶] . . . ‘[Moreover, a]
prerequisite for any action for breach of the implied covenant of good faith and fair




                                              16
dealing is the existence of a contractual relationship between the parties . . . .’ ” (Jenkins
v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 524–525.)8
       Sorokko presented two theories of this cause of action in his complaints and
presents a third theory on appeal. None is persuasive.
       Sorokko first alleged that “the cont[r]act between [Sorokko] and [BANA] contains
an implied covenant of good faith and fair dealing” and that BANA acted in bad faith in
its interactions with him about possible alternatives to foreclosure. But Sorokko did not
expressly identify a contract he had with BANA that would support the claim. We agree
with the trial court that the implied covenant cannot create new obligations not
contemplated by an express contract, and Sorokko did not allege that the Loan documents
required BANA to discuss or offer a loan modification. (See Alvarez v. Wells Fargo
Bank, N.A. (N.D.Cal., Jan. 31, 2013, No. CV 12-09661) 2013 U.S.Dist. Lexis 14304.)
       Sorokko alleged in his first amended complaint that BANA “as servicer of [the
Loan] was a contract partner obliged by these duties to evaluate, explain and recommend
to [Sorokko] all appropriate options [BANA] could provide to assist [Sorokko] avoid
foreclosure.” Again, Sorokko did not identify the contract to which BANA was an
alleged partner. The trial court noted that Sorokko failed to allege he was a third party

       8
         As noted ante, Sorokko asserted a claim for breach of fiduciary duty in his
original complaint, but replaced it with a good faith and fair dealing claim in his first
amended complaint. On appeal, Sorokko contends that he can amend his complaint to
allege that BANA was in a confidential relationship with him with respect to the
servicing of his Loan. He argues that, with such allegations, “the duty of good faith and
fair dealing would be all the more meaningful.” However, Sorokko cites no authority
that the existence of a confidential relationship is relevant to a claim for breach of the
implied covenant and we are aware of no such authority. Nor does Sorokko directly
argue that he stated or can state a valid claim for breach of fiduciary duty. (See Cal.
Rules of Court, rule 8.204(a)(1)(B) [each argument must be presented under a separate
heading]; 300 DeHaro Street Investors v. Department of Housing & Community
Development (2008) 161 Cal.App.4th 1240, 1257 [argument forfeited if not set forth in
separate heading].) Therefore, we ignore these arguments. (See Rufini v. CitiMortgage
(2014) 227 Cal.App.4th 299, 312 [rejecting breach of fiduciary duty claim in foreclosure
context]; Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.App.4th 299,
313–314 [rejecting good faith and fair dealing tort claim in foreclosure context].)


                                              17
beneficiary of a contract between BANA and some other entity. In an analogous case,
another division of this district has held that a borrower was not a third party beneficiary
of a contract between the federal government and lenders that imposed loan servicing
standards. (Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250,
1282, fn. 17.) Courts have also rejected the theory that borrowers are third party
beneficiaries of the National Mortgage Settlement. (See, e.g., Jurewitz v. Bank of
America, N.A., supra, 938 F.Supp.2d at p. 997–998.) Thus, Sorokko’s “contract partner”
theory is unpersuasive. In any event, he does not pursue the theory on appeal.
       In his appellate briefs, Sorokko premises the claim on BANA’s promise to
consider Sorokko for a loan modification, which he argues was supported by the
consideration of Sorokko’s forbearing from filing for bankruptcy. However, Sorokko
cites no authority that forbearance from filing for bankruptcy—or any of the other forms
of reliance he has alleged—amounts to consideration sufficient to establish contract
formation, and we are unaware of any such authority. (Cf. West v. JPMorgan Chase
Bank, N.A., supra, 214 Cal.App.4th at pp. 796–797 [temporary loan modification contract
supported by consideration of modified payments].) Moreover, to support a contract
claim, Sorokko would have to overcome a statute of frauds bar, an issue he does not
address on appeal. (See id. at p. 798.)
       We therefore affirm the trial court’s dismissal of Sorokko’s claim for breach of the
covenant of good faith and fair dealing.
H.     Violations of Nonjudicial Foreclosure Statutes
       Sorokko represents on appeal that on remand he can assert statutory causes of
action under HBOR (§§ 2920–2944.7). HBOR, which now prohibits the practice of dual
tracking, was clearly intended to ensure that borrowers now be fairly “considered for, and
have a meaningful opportunity to obtain, available loss mitigation options” in order to
avoid foreclosure (§ 2923.4, subd. (a)), and to obviate the problem, exemplified by
Sorokko’s allegations, of “being given the runaround, being told one thing by one bank
employee while something entirely different is being pursued by another.” (Jolley,



                                             18
supra, 213 Cal.App.4th at p. 905.)9 However, HBOR did not become effective until
January 1, 2013, after Sorokko filed this action. HBOR does not have retroactive effect
(see Banks v. JPMorgan Chase Bank, N.A. (C.D.Cal., Nov. 19, 2014, No. CV14-06429)
2014 U.S. Dist. Lexis 164565) and applies to none of Sorokko’s first amended
complaint’s alleged facts.
I.      UCL
        “The UCL permits civil recovery for ‘any unlawful, unfair or fraudulent business
act or practice and unfair, deceptive, untrue or misleading advertising . . . .’ (Bus. &
Prof. Code, § 17200.) ‘ “Because Business and Professions Code section 17200 is
written in the disjunctive, it establishes three varieties of unfair competition—acts or
practices which are unlawful, or unfair, or fraudulent . . . .” ’ [Citation.] [¶] [T]he UCL
[also] permits violations of other laws to be treated as independently actionable as unfair
competition.” (West v. JPMorgan Chase Bank, N.A., supra, 214 Cal.App.4th at pp. 805–
806.)
        The trial court dismissed Sorokko’s UCL cause of action because it was premised
on his other causes of action, all of which had already been dismissed by the court.
Because we have affirmed the dismissal of all of Sorokko’s other causes of action, we
also affirm the trial court’s dismissal of the UCL claim.
                                    III.   DISPOSITION
        The judgment is affirmed.




        9
         “The kindest interpretation to place on this scenario is lender incompetence—the
left-hand loan modification department and the right-hand foreclosure department appear
to be operating in total ignorance of each other. This is the most likely explanation, given
the size of the institutions involved, but it is not the only one, and as the numbers of such
cases grow, other less benign explanations are coming to more and more minds.” (Fleet
v. Bank of America, N.A., supra, 229 Cal.App.4th at p. 1408.)


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                                 _________________________
                                 BRUINIERS, J.


WE CONCUR:


_________________________
JONES, P. J.


_________________________
NEEDHAM, J.




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A140544




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