Judge: Anne Richardson, Case: 22STCV36674, Date: 2023-04-18 Tentative Ruling

Case Number: 22STCV36674    Hearing Date: April 18, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

On November 21, 2022, Plaintiff Edith Ellis—acting in pro per—brought this action as an individual to sue Defendants Select Portfolio Sevicing, Inc. (SPS) and Does 1 through 10 pursuant to a Complaint alleging claims of (1) Violation of California Civil Code § 2923.6, (2) Breach of the Covenant of Good Faith and Fair Dealing, and (3) Violation of California Business & Professions Code §§ 17200 and 17500. The claims arise from allegations that Ms. Edna Kuffour executed a deed of trust in favor of SPS for the real property located at 3733 Dalton Ave, Los Angeles, California 90018 (Subject Property) but later died, with SPS commencing foreclosure proceedings, which Plaintiff Ellis, as an administrator of Kuffour’s estate, attempted to halt by applying for an assumption loan and requesting a loan modification that SPS denied in October 2022, instead setting a foreclosure sales for November 23, 2022.

On November 22, 2022, Plaintiff Ellis made an ex parte application to halt the trustee sale scheduled for November 23, 2022.

The same day, the Court denied the ex parte, indicating that a probate case is pending as to Edna Kuffour and that the ex parte should have been heard in the Probate Department.

On January 25, 2023, Defendant SPS demurred to the Complaint’s three causes of action on the ground that the claims are insufficiently pleaded. The factual background for the demurrer indicates that the trustee sale occurred on November 23, 2022 but that the deed upon sale has not yet been recorded.

Plaintiff Ellis has failed to oppose the demurrer although a proof of service has been filed indicating seemingly valid service.

SPS’s demurrer is now before the Court.

Demurrer

Demurrer Sufficiency Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).) This device can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) “To survive a [general] demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence. (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447, superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521.)

Entire Complaint, Standing: SUSTAINED, With Leave to Amend.

The Complaint’s first cause of action is premised on the allegations—as of the date of the filing of the Complaint on November 1, 2022—Defendants SPS had scheduled a trustee sale of the Subject Property despite Plaintiff Ellis having applied for a loan modification from SPS. (Complaint, ¶¶ 20-26.)

The Complaint’s second cause of action alleges a breach of the covenant of good faith and fair dealing based on SPS commencing foreclosure proceedings by recording a Notice of Default, as well as false and misleading documents with the County Recorder. (Complaint, ¶¶ 30-34.)

The Complaint’s third cause of action alleges unfair business practices based on Defendant SPS unlawfully commencing foreclosure proceedings against the Subject Property without any legal standing or authority to do so and providing false, incorrect, and misleading information concerning the Subject Property. (Complaint, ¶¶ 41(a)-(b).)

In demurrer and relevant part, SPS argues that Plaintiff Ellis brings this action in her individual capacity and therefore has failed to properly plead standing to bring a claim on behalf of the estate of Edna Kuffour. (Demurrer, pp. 5-7.)

The Court agrees. Every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute. (Code Civ. Proc., § 367.) Here, Plaintiff Ellis brings the Complaint in her individual capacity, not as an administrator of the estate of Edna Kuffour. Therefore, Plaintiff Ellis, as an individual, is not a proper real party in interest capable of bringing the claims alleged in Complaint.

The Court also notes Defendant’s arguments, which Plaintiff has not opposed, as to Probate Code § 9630 subdivision (a)(1) requiring both co-administrators to sign on to exercise a power, as well as the requirement in Civil Code § 2923.6 for a borrower to submit a complete loan modification application and the requirements of Bus. & Prof. Code §§ 17200 and 17500, which provide an additional basis to sustain the demurrer. Since the Plaintiff is being provided leave to amend she is admonished to take note and plead allegations, if she can, to avoid those bars to her claims in the framing of her First Amended Complaint.

Defendant SPS’s demurrer is thus SUSTAINED, With Leave to Amend.

Conclusion

Defendant Select Portfolio Servicing, Inc.’s Demurrer to Plaintiff’s Complaint is SUSTAINED, With Leave to Amend.