Fleet v. Bank of America
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The Fleets applied to have their Bank of America (BofA) home loan modified in 2009 under the Making Homes Affordable Act. The result of multiple telephone calls and letters to various BofA-related personnel, the Fleets were either (a) assured the Fleets that everything was proceeding smoothly or (b) told BofA had no knowledge of any loan modification application. Finally, in November 2011, BofA informed the Fleets they had been approved for a trial period plan under a Fannie Mae modification program. All they had to do, was to make three monthly payments starting on December 1, 2011. If they made the payments, then they would move to the next step (verification of financial hardship); if they passed that test, their loan would be permanently modified. The Fleets made the first two payments, for December 2011 and January 2012, which BofA acknowledged receiving, and therefore foreclosure proceedings had been suspended. Toward the end of January 2012, their house was sold at a trustee’s sale. Two days after the sale, a representative of the buyer showed up at the house with a notice to quit. The Fleets informed him that the house had significant structural problems, and he said he was going to rescind the sale. The Fleets continued to try to communicate with BofA regarding the property. A BofA representative left voice mail messages to the effect that BofA wanted to discuss a solution to the dispute, but otherwise it appeared that productive conversation between the Fleets and BofA and between the Fleets and the buyer had ceased. In light of this silence (which they interpreted to mean the buyer was trying to rescind the sale), the Fleets spent $15,000 to repair a broken sewer main, which was leaking sewage onto the front lawn. They were evicted in August 2012. In June 2012, the Fleets sued BofA, the trustee under their deed of trust, BofA officers and some of the employees who had been involved in handling their loan modification, and the buyer of the property and its representative. BofA’s demurrer to the first amended complaint was sustained without leave to amend as to the remaining causes of action promissory estoppel, breach of contract, fraud, and accounting. All of the BofA defendants were dismissed. The Court of Appeal reversed: "Although the Fleets’ amended complaint spreads the fraud allegations over three causes of action and contains a great deal of extraneous information, it also alleges the requisite elements of promissory fraud. [. . .] This cause of action may or may not be provable; what it definitely is not is demurrable." The Court sustained the demurrer to the Fleets' action for promissory estoppel, and affirmed the trial court in all other respects. The case was remanded for further proceedings.
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