Facts: A homeowner obtains a mortgage on their property and later defaults. The lender records a notice of default (NOD) and, subsequently, a notice of trustee sale (NOTS). At the request of the homeowner, the lender postpones the trustee’s sale several times. Before a scheduled sale, the homeowner speaks with the lender over the phone and is verbally granted a postponement of the sale to a later date. However, on the previously scheduled auction date, the auctioneer announces and confirms in writing a different postponement date, setting the next auction date several days sooner than what the lender told the homeowner. The homeowner does not confirm the new postponement date as they had done for previous postponements. The lender proceeds with the trustee’s sale on the earlier date announced by the auctioneer and the property is sold at auction.
Claim: The homeowner seeks money losses from the lender, claiming the lender breached the agreement under promissory estoppel since the lender completed the trustee’s sale sooner than the date it provided to the homeowner verbally, preventing them from curing their default and causing them to lose their equity in the property.
Counter claim: The lender claims the oral agreement was not enforceable under promissory estoppel since the homeowner could not prove they were harmed by the lender’s representations as the homeowner failed to show they had the ability or intention to cure the default.
Holding: A California court of appeals held the homeowner was not entitled to money losses for breach of the agreement since the homeowner failed to prove detrimental reliance on the lender’s representations as the homeowner did not show they had the ability or intention to cure the default by the postponement date the lender provided verbally over the phone. [Jones v. Wachovia Bank (September 22, 2014)_CA4th_]