Judge: Anne Richardson, Case: 22STCV36674, Date: 2023-09-11 Tentative Ruling

Case Number: 22STCV36674    Hearing Date: September 11, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff Edith Ellis, as the administrator of the estate of Edna Kuffour and acting in pro per, sues Defendants Select Portfolio Servicing, Inc. (SPS) and Does 1 through 10 pursuant to a May 22, 2023 First Amended 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 (denied as untimely by SPS in October 2022) and requesting a loan modification (which SPS ignored), with SPS instead setting a foreclosure sale 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 was 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 original Complaint in this action.

On April 18, 2023, the Court sustained that demurrer—which had been opposed by Plaintiff Ellis—on the grounds that (1) Plaintiff had brought the Complaint in her individual capacity rather than as administrator of the estate of Edna Kuffour, thus undercutting standing, and (2) the Complaint did not sufficiently allege facts satisfying Probate Code section 9630, subdivision (a)(1) (requiring both co-administrators to sign on to exercise a power), Civil Code section 2923.6 (requiring that a borrower submit a complete loan modification application prior to seeking relief), and Business and Professions Code sections 17200 and 17500 (respectively requiring allegations of unlawful, unfair, or fraudulent practices, and untrue and misleading public statements).

On May 22, 2023, Plaintiff Ellis—acting again in pro per—filed a First Amended Complaint (FAC) alleging the same 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. A comparison of the November 21, 2022 Complaint and the May 22, 2023 FAC shows that their allegations are word-for-word identical but for two differences: (1) the “Come Now” introduction to the Complaint has been changed to specify that Plaintiff Ellis is bringing suit as the administrator of the estate of Edna Kuffour; and (2) the same modification was made to paragraph 7 of the FAC. The allegations are otherwise the same. The FAC also attaches a new Exhibit 1 but keeps the same Exhibits 2 to 4 from the original Complaint.

On June 22, 2023, SPS demurred to the FAC on similar grounds to those advanced against the original Complaint.

Plaintiff has failed to oppose the demurrer, which is now before the Court.

Request for Judicial Notice

The Court TAKES Judicial Notice of the deed documents advanced for notice by Defendant SPS. (Demurrer, RJN, p. 2; see Evid. Code, § 452, subd. (h), 453.)

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 (1985) 39 Cal.3d 311, 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.)

FAC, First Through Third Causes of Action: SUSTAINED, Without Leave to Amend.

The Court SUSTAINS SPS’s demurrer, Without Leave to Amend.

As to the first cause of action, the Court agrees with SPS that the FAC fails to allege or attach documents showing satisfaction of the requirements set out in Civil Code section 2923.6, which require that a borrower submit a complete loan modification application before seeking relief. As argued by SPS, “Plaintiff merely claims that she submitted an alternative foreclosure application in September of 2021, which SPS denied,” where SPS denied that application as untimely. (Demurrer, p. 7; see FAC, Ex. 2.) There is therefore no operative complete loan modification application to satisfy Civil Code section 2923.6’s requirements.

As to the second cause of action, other arguments aside, there can be no breach of the covenant of good faith and fair dealing where Plaintiff failed to submit a timely complete loan modification application, which prevented SPS from evaluating the account at issue. (See Demurrer, p. 8.)

As to the third cause of action, the allegations pleaded in support of that claim are identical to those supporting the same claim in the original Complaint. (Compare Complaint, ¶¶ 35-45, with FAC, ¶¶ 35-45.) Yet, the minutes for the April 18, 2023 hearing made clear that the original Complaint’s allegations did not satisfy “the requirements of Bus. & Prof. Code §§ 17200 and 17500, which provide[d] an additional basis to sustain the demurrer” against the original Complaint’s third cause of action, and that “Plaintiff … [was] admonished to take note and plead allegations, if she can, to avoid th[is] bar[] to … [the third cause of action] in the framing of her First Amended Complaint.” (See 4/18/23 Minutes, p. 3.) If the allegations supporting the third cause of action are identical between the original Complaint and the FAC, then Plaintiff did nothing to plead new facts supporting the third cause of action, for which reason the claim again fails on demurrer.

As to leave to amend, the Court finds that such leave is not proper where (1) Plaintiff did not file an opposition providing the basis for leave, and (2) it is not clear to the Court how Plaintiff can cure (a) the lack of a timely and complete loan modification application (basis for sustaining demurrer to first and second causes of action) or (b) the lack of allegations to support the third cause of action. 

Conclusion

Defendant Select Portfolio Servicing, Inc.’s Demurrer to First Amended Complaint is SUSTAINED, Without Leave to Amend.

Defendant Select Portfolio Servicing, Inc. is to submit a proposed judgment within 14 days of this ruling.