Judge: Andrew E. Cooper, Case: 24CHCV04662, Date: 2025-05-22 Tentative Ruling

Case Number: 24CHCV04662    Hearing Date: May 22, 2025    Dept: F51

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER

Demurrer filed: 2/24/25

MOVING PARTY: Defendants The Bank of New York Mellon f/k/a The Bank of New York as successor in interest to JPMorgan Chase Bank, N.A., as Trustee for DLJ Mortgage Acceptance Corp., Mortgage Pass Through Certificates 1994-3; and Nationstar Mortgage LLC d/b/a Mr. Cooper (collectively, “Defendants”)

RESPONDING PARTY: Plaintiff Castillo I Partnership (“Plaintiff”)

NOTICE: OK 

RELIEF REQUESTED: Defendants demur against Plaintiff’s entire complaint.

TENTATIVE RULING: The unopposed demurrer is sustained with 30 days leave to amend. Defendants’ request for judicial notice is granted as to Exhibit C, and granted as to the existence, but not the contents, of Exhibits A–B.

BACKGROUND 

This is a wrongful foreclosure action wherein Plaintiff, who owns certain real property located at 11733 Castillo Lane, Northridge, CA (the “Subject Property”), alleges that Defendants are wrongfully attempting to foreclose on the subject property because “the amounts which Defendants claim is necessary to cure the default or is due under the loan is excessive and incorrect.” (Compl. ¶¶ 1–22.)

On 12/28/24, Plaintiff filed its complaint against Defendants, alleging the following causes of action: (1) Breach of Contract; (2) Unfair Business Practices; (3) Declaratory Relief; and (4) Wrongful Foreclosure.

On 2/24/25, Defendants filed the instant demurrer. No opposition has been filed to date. On 5/19/25, Defendants filed a notice of non-opposition to its demurrer.

//

//

//

//

ANALYSIS

As a general matter, a party may respond to a pleading against it by demurrer on the basis of any single or combination of eight enumerated grounds, including that “the pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)

“A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Here, Defendants demur to Plaintiff’s entire complaint on the basis that Plaintiff fails¿to allege facts sufficient to state any of the causes of action therein.

A.    Meet-and-Confer

Defendants’ counsel declares that on 2/19/25, he met and conferred with Plaintiff’s counsel via email, but the parties were unable to resolve the dispute. (Decl. of Matthew B. Learned, ¶ 3.) Accordingly, the Court finds that counsel has satisfied the preliminary meet and confer requirements under Code of Civil Procedure section 430.41, subdivision (a).

B.     Breach of Contract

Plaintiff’s first cause of action alleges Breach of Contract against Defendants. To state a cause of action for breach of contract, a plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) A written contract may be pleaded either verbatim or generally “according to its legal intendment and effect.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198–199.)

Here, Plaintiff alleges that “a contract exists between Plaintiff and Defendants on the terms set forth in the Note and Deed of Trust, as modified by the Stipulation and the Order confirming Plaintiff’s Chapter 11 Plan and by virtue of Plaintiff’s ownership of the Property for almost 20 years.” (Compl. ¶ 25.) Plaintiff alleges that Defendants had a duty to “send monthly statements to Plaintiff after entering into the Stipulation and loan modification.” (Id. at ¶ 26.) “Additionally, Defendants, and each of them, are required to provide Plaintiff with an explanation of how Defendants calculated the amount owed, as demanded in the Notice of Default and the Notice of Sale which Defendants recorded against the Property.” (Id. at ¶ 27.)

Defendants argue that “although Plaintiff contends that Defendants ‘had a duty’ to send monthly statements to the Plaintiff (opposed to the borrower of the Loan), no such obligation can be found in the Stipulation.” (Dem. 7:22–24, citing Ex. A to RJN.) “As Defendants had no obligation under the Stipulation to send Plaintiff copies of the Kolodaros’ monthly mortgage statements, Defendants’ purported failure to do so cannot form the basis of Plaintiff’s breach of contract cause of action.” (Id. at 8:1–3.) Defendants further assert that “at best, Plaintiff’s purported damages appear to be the result of the Kolodaros’ failure to perform under the Loan, not by an action or inaction by Defendants.” (Id. at 8:13–15.)

The Court agrees with Defendants that the alleged contractual obligations they breached are not found in the subject agreement. The Court further notes that Plaintiff has failed to oppose the instant demurrer. Based on the foregoing, the Court finds that Plaintiff has failed to allege facts sufficient to constitute a cause of action for Breach of Contract. Accordingly, the demurrer is sustained as to Plaintiff’s first cause of action.

C.    Unfair Business Practices

Plaintiff’s second cause of action alleges Unfair Business Practices against Defendants. To succeed on a claim for unfair business practices in violation of the Unfair Competition Law (“UCL”), a plaintiff must establish that the defendant was engaged in an “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising” and certain specific acts. (Bus. & Prof. Code, § 17200.)

“In essence, an action based on Business and Professions Code section 17200 to redress an unlawful business practice ‘borrows’ violations of other laws and treats these violations, when committed pursuant to business activity, as unlawful practices independently actionable under section 17200 et seq. and subject to the distinct remedies provided thereunder.” (People ex rel. Bill Lockyer v. Fremont Life Ins. Co. (2002) 104 Cal.App.4th 508, 515.) A plaintiff alleging an “unfair” business practice under the UCL must show that the defendant’s conduct is “tethered to an underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law or violates the policy or spirit of an antitrust law.” (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 613.) “‘Fraudulent,’ as used in the statute, does not refer to the common law tort of fraud but only requires a showing members of the public ‘are likely to be deceived.’” (Olsen v. Breeze, Inc. (1996) 48 Cal.App.4th 608, 618.) In order to have standing under the UCL, a party must “(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.)

Here, Defendant argues that “Plaintiff has not identified any injury in fact that would be sufficient to confer standing under section 17200.” (Dem. 9:6–7.) “Because the foreclosure directly resulted from Kolodaros’ failure to make required payments on the loan, and because Plaintiff has not shown that Defendants failed to comply with the terms of the Stipulation, Plaintiff cannot show that its purported injury was actually caused by Defendant’s conduct.” (Id. at 9:13–17.) Defendants further argue that “although Plaintiff references the terms ‘unlawful,’ ‘unfair,’ and ‘fraudulent’ in its second cause of action, Plaintiff has not clearly pleaded its theory of liability and therefore fails to state a claim under section 17200.” (Id. at 9:26–28.)

The Court agrees with Defendants that Plaintiff has failed to allege facts to constitute a cause of action for Unfair Business Practices, as the complaint merely states that “by virtue of the foregoing, Defendants have engaged in unfair, unlawful and fraudulent business practices in violation of Business & Professions Code §§ 17200 et seq. and Plaintiff is entitled to restitution and injunctive relief.” (Compl. ¶ 38.) Accordingly, the demurrer is sustained as to Plaintiff’s second cause of action.

D.    Declaratory Relief

Plaintiff’s third cause of action alleges Declaratory Relief against Defendants. “To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

Here, Plaintiff alleges that “an actual controversy exists between the parties concerning their respective rights and obligations with respect to the Property.” (Compl. ¶ 42.) Specifically, “Plaintiff contends, inter alia, that Defendants have a duty of good faith and fair dealing to fully communicate and engage with Plaintiff concerning this loan and consider alternatives to foreclosure, including restructuring of the large balance Defendants allowed to accumulate and sale of the Note and Deed of Trust and that the foreclosure proceedings prosecuted by Defendants are void, voidable, unenforceable or otherwise invalid, whereas Defendants, Plaintiff is informed and believes and based thereon alleges, deny such contentions.” (Id. at ¶ 40.)

Defendants argue that “there is no present and actual controversy because the obligations Plaintiff alleges simply do not exist under the Stipulation.” (Dem. 10:19–20.) Defendants further argue that “Plaintiff’s cause of action for declaratory relief is duplicative, improper, and unnecessary” because “Plaintiff is merely reiterating the claims in its other causes of action for breach of contract, wrongful foreclosure and unfair business practices.” (Id. at 10:24–26.)

The Court agrees with Defendants that Plaintiff’s Declaratory Relief cause of action is duplicative of its causes of action for Breach of Contract and Wrongful Foreclosure. The Court again notes Plaintiff’s failure to oppose the instant demurrer. Accordingly, the demurrer is sustained as to Plaintiff’s third cause of action.

//

//

//

E.     Wrongful Foreclosure

Plaintiff’s fourth cause of action alleges Wrongful Foreclosure against Defendants. “The elements of a wrongful foreclosure cause of action are: (1) The trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.” (Citrus El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal.App.5th 943, 948, quotations omitted.)

Here, Plaintiff alleges that “Defendants have wrongfully and unlawfully prosecuted foreclosure proceedings with respect to the Property.” (Compl. ¶ 45.) Plaintiff further alleges that it “has sustained and will sustain compensatory damages in an amount not yet ascertained but which Plaintiff is informed and believes and based thereon alleges will exceed $100,000.00.” (Id. at ¶ 46.) Plaintiff alleges that “although the amount Defendants are entitled to is disputed, uncertain and not readily ascertainable, nonetheless, Plaintiff hereby tenders to Defendants all sums which may be due from Plaintiff to Defendants, if any, on the condition that Defendants cancel and/or rescind any Notices of Default and upon such other conditions as the court may require.” (Id. at ¶ 21.)

Defendants argue that Plaintiff’s allegation regarding tender “is insufficient to satisfy the tender requirement to have standing to pursue a wrongful foreclosure claim.” (Dem. 11:25–26.) The Court agrees, and therefore finds that Plaintiff has failed to allege facts sufficient to constitute a cause of action for Wrongful Foreclosure. Accordingly, the demurrer is sustained as to Plaintiff’s fourth cause of action.

F.     Leave to Amend

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).¿

Here, the Court notes that Plaintiff has failed to oppose the instant demurrer, and therefore has failed to meet its burden to show that it can successfully amend its complaint. However, the Court notes that this is the first demurrer brought against Plaintiff’s original complaint. Accordingly, under the Court’s liberal policy of granting leave to amend, Plaintiff is granted 30 days leave to amend the complaint to cure the defects set forth above.

Plaintiff is cautioned that “following an order sustaining a demurrer … with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court’s order. … The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.” (Zakk v. Diesel (2019) 33 Cal.App.5th 431, 456.)

CONCLUSION