Bare v. JPMorgan Chase

 

 

 

 

 

 

 

 

Filed 11/15/13  Bare v. JPMorgan Chase CA3

 

 

 

 

 

NOT TO BE PUBLISHED

 

 

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opinion has not been certified for publication or ordered published for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

THIRD APPELLATE
DISTRICT

(Tehama)

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>

JENNIFER BARE,                           Plaintiff and Appellant,               v.   JPMORGAN CHASE BANK, N.A.,                           Defendant and Respondent.

C068709   (Super. Ct. No. NCI16175)

 

 

 

 

            Defendant
JPMorgan Chase Bank, N.A. (Chase), repossessed a 2003 Chevrolet Silverado that
plaintiff Jennifer Bare purchased with Chase financing.  Bare brought a claim for href="http://www.fearnotlaw.com/">breach of oral and written contract and
fraud against Chase.  The trial court
sustained Chase’s demurrer to Bare’s second amended complaint without leave to
amend.  Bare, proceeding in pro. per.,
presents a barrage of challenges to the court’s decision.  We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

            Bare purchased a 2003 Chevrolet
Silverado from a dealership in September 2008. 
Chase provided the financing for the purchase.  The transaction was governed by a “Retail
Installment Sale Contract” (contract).

            The
contract provided for a sales price of $17,178.86, $12, 553.86 of which was to
be financed by a payment of $625.00 due on August 9, 2008, with 59 additional payments of $345.96 due
monthly thereafter.  The contract bears
Bare’s signature.

            The
contract states Chase possesses a security interest in the Chevrolet, noting
the vehicle “secures payment of all you owe on this contract” and “also secures
your other agreements in this contract as the law allows.”  In addition, the contract includes a section
on late payment and spells out the consequences for a late or missed
payment.  These include late charges, an
acceleration clause, and payment of collection costs.

            The
contract also states that if a payment is late or missed, “We may take the
vehicle from you.  If you default, we may
take (repossess) the vehicle from you if we do so peacefully and the law allows
it . . . .”  The contract defines
“default” to include a late payment.  The
borrower may recover the repossessed vehicle by paying all past-due payments and
any late charges.

            Finally,
the contract contains a provision regarding changes in the terms of the
contract.  The provision states:  â€œHow this contract can be changed.  This contract contains the entire agreement
between you and us relating to this contract. 
Any change to the contract must be in writing and both you and we must
sign it.  No oral changes are binding.”

            Chase
repossessed Bare’s vehicle in June 2010. 
In July 2010 Bare filed a complaint against Chase for breach of contract
stemming from Chase’s repossession of the Chevrolet.  Bare did not attach a written contract to the
complaint and did not specify the terms of the contract.  Instead, Bare attached an “Affidavit of
Jennifer Bare” detailing her claims. 
Chase filed a demurrer to the complaint.

            Prior to
the scheduled hearing on the demurrer, Bare filed a first amended complaint,
alleging breach of both written and oral contract.  Chase filed a demurrer to the first amended
complaint and a motion to strike.

            In December
2010 Bare filed a second amended complaint, without leave to amend from the
court, alleging breach of written and oral contract and fraud.  Bare attached a copy of the contract to the
second amended complaint.  Bare also
attached another “Affidavit of Jennifer Bare.” 
Bare’s second affidavit alleged numerous conversations between Bare and
Chase employees on the possibility of alternative payment arrangements stemming
from Bare’s inability to make her May 26, 2010, payment under the contract.

            According
to Bare, on May 28, 2010, she called Chase and told them her unemployment check
was going to be late, so the scheduled payment would not go through.  Bare states she spoke with a Chase employee
and set up another payment arrangement, by which Chase would take a payment
electronically on June 4, 2010, which was still within the 10-day grace
period.  Bare alleges she requested the
payment be taken out on June 4, although the employee wanted to set up the
withdrawal for June 3.  According to
Bare, “The payment hit my bank on June 3rd and it bounced, like I knew it
would, because it was supposed to be set-up for the 4th.”  Bare identifies this as breach of “verbal
contract number 1.”

            The payment
was not made on June 4, 2010, and on that day Bare alleges:  â€œI called the Sacramento Chase and spoke with
Cherie, which is the vice president.  She
stated that, ‘I need not to make a payment until the situation got handled’.  I told her that I needed to make a payment
because I believed I was already behind (within the 10-day grace period and did
not want to ruin my good credit standing with Chase and my credit history) and
did not want it to be any later.  She
told me not to make a payment and that it would not take her long until she
gets the situation handled.  By her
telling me not to make a payment on my loan, she entrapped me.  She knew by me not making my payment would
put me into default and this in turn would break my contract . . . .”

            Bare’s
payment was due on May 26, 2010.  Bare’s
affidavit alleges that on June 10, 2010:  â€œCherie called me and told me that she would
credit me the $43 late fee and the $15 bank fee and that I owed $691 and I
needed to pay it on June 17, 2010.  I
said ok without looking at the calendar but just wanted to get things
going.  I asked her if I could pay one
payment now and then another in a week because I get another check in a
week.  She stated that I had to make the
payment in full that partial payments would not be accepted.  I said ok then I will try to get it in the
bank by the 17th. . . .”

            Finally,
Bare’s affidavit alleges that on June 16, 2010:  â€œI called and talked to the call center and
informed them that my check was going to be late and that I needed to be
granted one more week to come up with the $691 or asked if I could pay one
month’s payment and then pay the other month’s payment in a week.  I was told that as long as I make the payment
in the branch by June 27th that I would be fine . . . .”  Bare labels this “verbal contract 2,” which
Chase breached by repossessing the Chevrolet on June 24, 2010.

            The
remainder of Bare’s affidavit describes the events following the
repossession.  Bare states she had
collected the funds the day of the repossession to “pay the entire default
amount.”  The following day, June 25,
2010, Bare attempted to work with Chase “on getting [her] vehicle up to date.”

            Bare
concludes:  â€œIn closing, Chase broke laws
to get ahead and breached 3 contracts; 2 verbal and 1 written.  They committed fraud, entrapment and
intentionally inflicted emotional distress; [citation]; upon me and my
family.  I need justice in resolving this
matter.”

            At a
December 2010 hearing on the demurrer to the first amended complaint, Chase
withdrew the demurrer to the first amended complaint and stipulated to the
filing of the second amended complaint. 
Chase filed a demurrer to the second amended complaint.  Chase contended the second amended complaint
failed to identify any provisions in the contract that Chase was alleged to
have breached.  In addition, Chase argued
the contract contained unambiguous provisions that contradict Bare’s
allegations.

            Bare filed
an “Answer” to the demurrer but failed to include any points and authorities
addressing the legal issues raised in the demurrer.  Instead, Bare attached a “Declaration”
alleging more facts to support her second amended complaint.

            Following
oral argument, the trial court sustained Chase’s demurrer to the second amended
complaint without leave to amend as to both the contract and fraud causes of
action.  The court found Bare failed to state
facts sufficient to constitute a cause of action for breach of written contract
and noted Bare admitted in her pleadings that she had not made her payments in
a timely manner as required by the contract. 
As for the oral contracts, the court found Bare did not allege that the
oral contracts were reduced to writing or otherwise executed by the parties.  As to Bare’s fraud claim, the court stated
Bare could not plead justifiable reliance on the alleged oral representations
because the contract provides modifications must be in writing.  Nor had Bare established the damage element
of her claim.

            Following
entry of judgment, Bare filed a timely notice of appeal.

DISCUSSION

I.

            The function of a demurrer is to
test the sufficiency of the complaint by raising questions of law.  We give the complaint a reasonable
interpretation and read it as a whole with its parts considered in their
context.  A general demurrer admits the
truth of all material factual allegations. 
We are not concerned with the plaintiff’s ability to prove the allegations
or with any possible difficulties in making such proof.  We are not bound by the construction placed
by the trial court on the pleadings; instead, we make our own independent
judgment.  (Herman v. Los
Angeles >County> Metropolitan Transportation Authority (1999)
71 Cal.App.4th 819, 824.)

            When the
trial court sustains the demurrer without leave to amend, we must decide
whether there is a reasonable possibility the plaintiff could cure the defect
with an amendment.  If we find that an
amendment could cure the defect, we must find the trial court abused its
discretion and reverse.  If not, the
court has not abused its discretion.  The
plaintiff bears the burden of proving an amendment would cure the defect.  (Gomes v.
Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th
1149, 1153.)

II.

            Bare alleges Chase breached the
contract in repossessing the Chevrolet. 
A cause of action for breach of contract requires the plaintiff to plead
a contract, the plaintiff’s performance or excuse for failure to perform, the defendant’s
breach, and the resulting damage.  (>Hale v. Sharp Healthcare (2010) 183 Cal.App.4th
1373, 1387.)

            Nowhere in
her pleadings does Bare identify the contract provision she alleges Chase
breached.  Indeed, Bare acknowledges she
failed to make the May 2010 payment required under the contract.  Moreover, the contract Bare entered into with
Chase unambiguously states Chase may repossess the vehicle if Bare fails to
make a scheduled payment.  Bare offers no
possible amendment that could cure these defects.  Therefore, the trial court correctly
sustained Chase’s demurrer without leave to amend on the breach of contract
claim.

III.

            Bare
alleges two oral contracts:  the first on
May 28, 2010, when she contacted Chase and set up a payment for June 4, 2010,
and the second on June 16, 2010, when she contacted Chase and set up a payment
by June 27, 2010.  Bare alleges Chase
breached these oral contracts when it repossessed the Chevrolet on June 24,
2010.

            The
elements of a cause of action for oral contract are the same as those required
for breach of a written contract.  (>Careau & Co. v. Security Pacific
Business Credit, Inc. (1990) 222 Cal.App.3d 1371,
1388.)  An oral contract that modifies a
previous contract must comply with Civil Code section 1698.  Section 1698, states, in part:  â€œ(b) A contract in writing may be modified by
an oral agreement to the extent that the oral agreement is executed by the
parties.  [¶]  (c) Unless the contract otherwise expressly
provides, a contract in writing may be modified by an oral agreement supported
by new consideration.  The statute of
frauds (Section 1624) is required to be satisfied if the contract as modified
is within its provisions.  [¶]  (d) Nothing in this section precludes in an
appropriate case the application of rules of law concerning estoppel, oral
novation and substitution of a new agreement, rescission of a written contract
by an oral agreement, waiver of a provision of a written contract, or oral
independent collateral contracts.”

            The
contract unambiguously states:  â€œThis
contract contains the entire agreement between you and us relating to this
contract.  Any change to the contract
must be in writing and both you and we must sign it.  No oral changes are binding.”

            Bare does
not allege the oral contracts were reduced to writing.  Nor does Bare allege any consideration
exchanged for the alleged oral contract. 
A commitment to perform a preexisting legal obligation cannot constitute
the consideration needed to support a binding contract.  (Auerbach
v. Great Western Bank (1999) 74 Cal.App.4th 1172, 1185 (>Auerbach).)  Bare provides no indication there exists a
reasonable possibility that these defects can be cured by amendment.  Therefore, the trial court did not err in
sustaining Chase’s demurrer without leave to amend as to the oral contract
causes of action.

IV.

            Bare also alleges Chase’s action
in repossessing her vehicle constituted fraud. 
To establish fraud, a plaintiff must show a misrepresentation (false
representation, concealment, or nondisclosure); knowledge of falsity; intent to
defraud; justifiable reliance; and resulting damage.  (Robinson
Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990.)

            Bare fails
to plead any facts to support her justifiable reliance on the alleged
misrepresentations by Chase employees.  Although
the issue of justifiable reliance ordinarily presents a question of fact, there
are cases in which it may be decided as a matter of law.  As noted, the contract unambiguously states
“No oral changes are binding.”  Given the
contract between the parties, which Bare signed, she could not reasonably rely upon
any subsequent alleged oral representations at odds with the written
contract.  (Hackethal v. National Casualty Co. (1987) 189 Cal.App.3d 1102,
1111.)

            Nor does
Bare plead facts to establish a claim of damages resulting from the alleged
fraud.  As the trial court noted, Bare
apparently alleges she was damaged by having to pay for the vehicle as required
under the contract.  However, a
borrower’s continuing to make payments under a contract in reliance on the lender’s
fraudulent promise to negotiate in good faith to modify the loan does not
constitute damages necessary to support an action for fraud.  (Auerbach,
supra, 74 Cal.App.4th at pp. 1184-1190.)

            Given these
deficiencies and Bare’s failure to set forth any facts to remedy them, the
trial court correctly sustained Chase’s demurrer to the fraud cause of action
without leave to amend.href="#_ftn1"
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DISPOSITION

            The judgment is affirmed.  Chase shall recover costs on appeal.

 

 

                                                                                                    RAYE                     , P. J.

We concur:

 

 

               HULL                      , J.

 

               MAURO                  , J.