Both the trial court and defendants interpreted Munger narrowly, with defendants going so far as to say that “[t]he rule in Munger is an application of the benefit of the bargain rule.” It would be strange, however, to apply a contract measure of damages to a tort. We read Munger more broadly. It announced the rule that wrongful foreclosure is a tort (Munger, supra, 11 Cal.App.3d at p. 7, 89 Cal.Rptr. 323), and the measure of damages is the familiar measure of tort damages: all proximately caused damages. In Munger, the only damages at issue were the lost equity in the property, and certainly that is a recoverable item of damages (id. at p. 11, 89 Cal.Rptr. 323). It is not, however, the only recoverable item of damages. Wrongfully foreclosing on someone’s home is likely to cause other sorts of damages, such as moving expenses, lost rental income (which plaintiff claims here), and damage to credit. It may also result in emotional distress (which plaintiff also claims here). As is the case in a wrongful eviction cause of action, “ ‘The recovery includes all consequential damages occasioned by the wrongful eviction (personal injury, including infliction of emotional distress, and property damage) … and upon a proper showing …, punitive damages.’ ” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1039, 90 Cal.Rptr.3d 453.)
The rule applied by the trial court and urged by defendants would create a significant moral hazard in that lenders could foreclose on underwater homes with impunity, even if the debtor was current on all debt obligations and there was no legal justification for the foreclosure whatsoever. So long as there was no equity, there would be no remedy for wrongful foreclosure. And since lenders can avoid the court system entirely through nonjudicial foreclosures, there would be no court oversight whatsoever. Surely that cannot be the law. The consequences of wrongfully evicting someone from their home are too severe to be left unchecked. For the reasons expressed above, a tort action lies for wrongful foreclosure, and all proximately caused damages may be recovered. Accordingly, the summary judgment is reversed.