California Supreme Court Watch

#19-173 Sheen v. Wells Fargo Bank, N.A., S258019. (B289003; 38 Cal.App.5th 346; Los Angeles County Superior Court; BC631510.) Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issue: Does a mortgage servicer owe a borrower a duty of care to refrain from making material misrepresentations about the status of a foreclosure sale following the borrower’s submission of, and the servicer’s agreement to review, an application to modify a mortgage loan?

Review granted: 11/13/2019

Opinion filed: Judgment affirmed in full: 3/07/2022

See the Court of Appeal Opinion.

See the Petition for Review.

See the Oral Argument.

See the California Supreme Court Opinion.  (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905.)

“In this case, we address the issue dividing the lower courts: Does a lender owe the borrower a tort duty sounding in general negligence principles to (in plaintiff’s words) ‘process, review and respond carefully and completely to [a borrower’s] loan modification application,’ such that upon a breach of this duty the lender may be liable for the borrower’s economic losses — i.e., pecuniary losses unaccompanied by property damage or personal injury? (See, e.g., Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 398 (Gas Leak Cases).) We conclude that there is no such duty, and thus Wells Fargo’s demurrer to plaintiff’s negligence claim was properly sustained.”

Chief Justice Cantil-Sakauye authored the opinion of the Court, in which Justices Corrigan, Liu, Kruger, Groban, Jenkins, and McConnell concurred.

Justice Liu filed a concurring opinion.

Justice Jenkins filed a concurring opinion.