In Jones v. Wachovia Bank, a California Appellate Court recently affirmed a judgment permitting a foreclosure sale where the homeowners were unable to prove the ability to pay the amount owed to the lender. In Jones, plaintiffs received notice that their home mortgage payments had fallen in arrears. They failed to bring the loan current. Subsequently, a notice of trustee sale was recorded. The lender postponed the sale three (3) times at the homeowners’ request. According to plaintiffs, the lender told them by phone, that the sale would be postponed a fourth time, until June 18, 2009. However, the auctioneer announced postponement of the sale to June 8, 2009, not June 18, 2009 and memorialized that date in writing. Plaintiffs were not present at the hearing and did not hear the auctioneer’s announcement. Plaintiffs claim that they relied upon the lender’s assurances that the new date would be June 18, 2009. They allegedly contacted a family friend and arranged to borrow the funds to cure the default. They planned to contact the lender a few days before the sale and request a further extension. The agreement with the friend was not in writing.
On June 8, 2009, the home was sold at a foreclosure sale. Plaintiffs sued the lender for breach of contract alleging that they relied upon the lender’s assurances that the sale would be postponed until June 18.
The trial court granted summary judgment in favor of the lender concluding that no written agreement was breached and that the alleged oral agreement was barred by the Statute of Frauds and for failure of lack of consideration. The appellate court affirmed holding that the plaintiffs failed to show detrimental reliance upon the alleged conversation with the lender. Further, the court found that the plaintiffs could not have cured the default even if the sale had been delayed to June 18, 2009.
Shannon B. Jones, Partner, firstname.lastname@example.org