Judge: Ashfaq G. Chowdhury, Case: 22GDCV00586, Date: 2023-09-29 Tentative Ruling
Case Number: 22GDCV00586 Hearing Date: January 19, 2024 Dept: E
Case No: 22GDCV00586
Hearing Date: 01/19/2024 – 8:30am
Trial Date: UNSET
Case Name: CJ PRIME INVESTMENT, LLC., a Limited Liability
Company; MARVIN C. HUR, an individual; CONNIE KIM HUR, an individual; JONATHAN
HUR, an individual; JENNIFER HUR, an individual; AA PREMIUM INC., a California
Corporation v. LOMA VISTA INVESTMENT, LLC., a Limited Liability Company; ALBERT
AHDOOT, an individual; SPECIAL DEFAULT SERVICES, INC., a California
Corporation; & DOES 2-100
[TENTATIVE RULING ON
DEMURRER & MOTION TO STRIKE TO THE THIRD AMENDED COMPLAINT]
Moving Party: Defendants, Loma Vista Investment LLC (LVI), a
Limited Liability Company and Albert Ahdoot (Ahdoot), an individual
(collectively Defendants)
Responding Party: Plaintiffs,
CJ Prime Investment, LLC; Marvin C. Hur; Connie Kim Hur; Jonathan Hur; Jennifer
Hur
Moving Papers: Notice/Demurrer;
Request for Judicial Notice
Opposition Papers: Opposition
Reply Papers: Reply
RELIEF REQUESTED
Defendants, LVI and Ahdoot, demur to the Third Amended Complaint (TAC) as
follows:
1.
The Plaintiffs lack standing to raise the claims asserted in the TAC therefore
do not have the legal capacity to sue. (Cal. Civ. Proc. Code § 430.10(c));
2.
The TAC fails to allege facts sufficient to state a cause of action against
these demurring Defendants (Cal. Civ. Proc. Code § 430.10(e));
3.
The TAC is uncertain, ambiguous, and unintelligible. (Cal. Civ. Proc. Code §
430.10(f));
4.
The First alleged Cause of Action for Negligent Misrepresentation is uncertain,
and fails to allege facts sufficient to state a cause of action against these
demurring Defendants (Cal. Code Civ. Proc. § 430.10(e));
5.
The Second alleged Cause of Action for Fraudulent Concealment is uncertain, and
fails to allege facts sufficient to state a cause of action against these
demurring Defendants (Cal. Code Civ. Proc. § 430.10(e));
6.
The Third alleged Cause of Action for Unfair Business Practices is uncertain,
and fails to allege facts sufficient to state a cause of action against this
demurring Defendant (Cal. Code Civ. Proc. § 430.10(e)) and Plaintiffs lack
standing and therefore do not have the legal capacity to assert this claim.
(Cal. Civ. Proc. Code § 430.10(c));
7.
The Fourth alleged Cause of Action for Cancellation of Written Instruments is
uncertain, and fails to allege facts sufficient to state a cause of action
against these demurring Defendants (Cal. Code Civ. Proc. § 430.10(e))
8.
The Fifth alleged Cause of Action for Breach of Implied Covenant is uncertain,
fails to allege facts sufficient to state a cause of action against these
demurring Defendants (Cal. Code Civ. Proc. § 430.10(e));
9.
The Sixth alleged Cause of Action for Wrongful Foreclosure is uncertain, fails
to allege facts sufficient to state a cause of action against these demurring
Defendants (Cal. Code Civ. Proc. § 430.10(e)) and Plaintiffs lack standing and
therefore do not have the legal capacity to assert this claim. (Cal. Civ. Proc.
Code § 430.10(c));
10.
The Seventh alleged Cause of Action for Breach of Contract is uncertain, and
fails to allege facts sufficient to state a cause of action against these
demurring Defendants (Cal. Code Civ. Proc. § 430.10(e);
11.
The Eighth alleged Cause of Action for Setting Aside the Foreclosure Sale is
uncertain, fails to allege facts sufficient to state a cause of action against
these demurring Defendants (Cal. Code Civ. Proc. § 430.10(e)) and Plaintiffs
lack standing and therefore do not have the legal capacity to assert this
claim. (Cal. Civ. Proc. Code § 430.10(c)); and
12.
The Ninth alleged Cause of Action for Quiet Title is uncertain, and fails to
allege facts sufficient to state a cause of action against these demurring
Defendants (Cal. Code Civ. Proc. § 430.10(e).
BACKGROUND
Plaintiffs in this TAC
are CJ Prime Investment LLC (CJ Prime), Marvin Hur, Connie Hur, Jonathan Hur,
Jennifer Hu, and AA Premium Inc. (AAP). A Complaint was filed on 09/07/2022.
The Amended Complaint (AC) was filed on 11/29/2022. On 02/24/2023, this Court
sustained Defendants’ demurrer to all six causes of action in the AC with leave
to amend. On 03/27/2023, Plaintiffs filed a SAC against LVI, Ahdoot, and
Special Default Services, Inc.
On
July 21, 2023, this Court heard Defendants’ demurrer to the SAC and sustained
the entire demurrer as to all seven causes of action with leave to amend
granted.
Plaintiffs
filed their Third Amended Complaint on 08/14/2023. The TAC alleges nine causes
of action: (1) Negligent Misrepresentation, (2) Fraudulent Concealment, (3)
Unfair Business Practices in Violation of CA Businesses & Professions Code
Section §17200 et seq, (4) Cancellation of Written Instruments, (5) Breach of
the Implied Covenant of Good Faith and Fair Dealing, (6) Wrongful Foreclosure,
(7) Breach of Contract, (8) Setting Aside the Trustee’s Sale, and (9) Quiet
Title.
PROCEDURAL ANALYSIS
Proof of Service Timely Filed (CRC Rule
3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address (CCP §1013, §1013a, §1013b): Ok
Meet and Confer
A party filing a
demurrer “shall meet and confer in person or by telephone with the party who
filed the pleading that is subject to demurrer for the purpose of determining
whether an agreement can be reached that would resolve the objections to be
raised in the demurrer.” (Code Civ.
Proc., §430.41, subd. (a).) “The parties
shall meet and confer at least five days before the date the responsive
pleading is due. If the parties are not able to meet and confer at least five
days prior to the date the responsive pleading is due, the demurring party
shall be granted an automatic 30-day extension of time within which to file a
responsive pleading, by filing and serving, on or before the date on which a
demurrer would be due, a declaration stating under penalty of perjury that a
good faith attempt to meet and confer was made and explaining the reasons why
the parties could not meet and confer.”
(Code Civ. Proc., §430.41, subd. (a)(2).)
Failure
to sufficiently meet and confer is not grounds to overrule or sustain a
demurrer. (Code Civ. Proc., §430.41(a)(4).)
Here,
moving party alleged it met and conferred. (Decl. Kritzer ¶¶3-8.)
LEGAL STANDARDS FOR DEMURRERS
Demurrer
– Sufficiency
A demurrer for
sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda, (2007) 147 Cal.App.4th
740, 747.) 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.) The court “treat[s]
the demurrer as admitting all material facts properly pleaded, but not
contentions, deductions or conclusions of fact or law ….” (Berkley v. Dowds (2007) 152
Cal.App.4th 518, 525.) 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 pleadings alone and
not the evidence or other extrinsic matters; therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) The only issue involved in a demurrer hearing
is whether the complaint, as it stands, unconnected with extraneous matters,
states a cause of action. (Hahn, supra, 147 Cal.App.4th at
747.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of
Los Angeles (2007) 42 Cal.4th 531, 550.)
“All that is required of a plaintiff, as a matter of pleading … is that
his complaint set forth the essential facts of the case with reasonable
precision and with sufficient particularity to acquaint the defendant with the
nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp.
(1945) 26 Cal.2d 149, 156-157.)
On
demurrer, a trial court has an independent duty to “determine whether or not
the … complaint alleges facts sufficient to state a cause of action under any
legal theory.” (Das v. Bank of
America, N.A. (2010) 186 Cal.App.4th 727, 734.) Demurrers do not lie as to only parts of
causes of action, where some valid claim is alleged but “must dispose of an
entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.) “Generally
it is an abuse of discretion to sustain a demurrer without leave to amend if
there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349.)
Demurrer – Uncertainty
A special demurrer for uncertainty, CCP section 430.10(f), is disfavored
and will only be sustained where the pleading is so bad that defendant cannot
reasonably respond—i.e., cannot reasonably determine what issues must be
admitted or denied, or what counts or claims are directed against
him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14
Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague,
“ambiguities can be clarified under modern discovery procedures.” (Ibid.)
GENERAL OBSERVATIONS
As a preliminary matter, a significant amount of
Defendants’ demurrer is nearly incomprehensible.
Defendants’ papers frequently ramble and fail to make
it clear how many of the statements they are making are legally relevant, both
in their moving and reply papers.
Defendants also frequently treat this demurrer as if
it were a motion for summary judgment and discuss issues that deal with degrees
of proof that are outside of the pleadings.
Further, the Court previously admonished demurring
Defendants for going over the page limit in the previous tentative ruling on
the demurrer to the SAC, and Defendants ignored the Court’s admonishment and
went over the page limit this time as well.
“Except in a summary judgment or summary adjudication
motion, no opening or responding memorandum may exceed 15 pages. In a summary
judgment or summary adjudication motion, no opening or responding memorandum
may exceed 20 pages. No reply or closing memorandum may exceed 10 pages. The
page limit does not include the caption page, the notice of motion and motion,
exhibits, declarations, attachments, the table of contents, the table of
authorities, or the proof of service.” (CRC, Rule 3.1113(d).)
“A party may apply to the court ex parte but with
written notice of the application to the other parties, at least 24 hours
before the memorandum is due, for permission to file a longer memorandum. The
application must state reasons why the argument cannot be made within the
stated limit.” (CRC, Rule 3.1113(e).)
Further, “A memorandum that exceeds the page limits of
these rules must be filed and considered in the same manner as a late-filed
paper.” (CRC 3.1113(g).) Additionally, “No paper may be rejected for filing on
the ground that it was untimely submitted for filing. If the court, in its
discretion, refuses to consider a late filed paper, the minutes or order must
so indicate.” (3.1300(d).)
The Court notes that the Opposition is rife with legal
conclusions that Plaintiffs do not provide legal authority for. The Opposition
frequently argues that the current complaint sufficiently alleges causes of
actions without providing legal arguments as to how the Plaintiffs sufficiently
alleged these causes of action.
For example, that Opposition will argue Plaintiffs alleged
a specific cause of action without any reference to a paragraph in the
Complaint or what element these supposed allegations would fall under to
explain how they are sufficiently alleging each element in the cause of action.
Further, the Opposition also goes over the page limit.
The Opposition acknowledges this issue and requests the Court to consider the
Opposition in its entirety.
ANALYSIS
First Cause of Action – Negligent
Misrepresentation
“The
elements of fraud, which give rise to the tort action for deceit, are (1) a
misrepresentation, (2) with knowledge of its falsity, (3)
with the intent to induce another's reliance on the misrepresentation, (4)
justifiable reliance, and (5) resulting damage. [Citation]” (Conroy v.
Regents of University of California (2009) 45 Cal.4th 1244, 1255.) “‘Every
element of the cause of action for fraud must be alleged in the proper manner
and the facts constituting the fraud must be alleged with sufficient specificity
to allow defendant to understand fully the nature of the charge made.’
[Citations] [¶] The requirement of specificity in a fraud action against a
corporation requires the plaintiff to allege the names of the persons who made
the allegedly fraudulent representations, their authority to speak, to whom
they spoke, what they said or wrote, and when it was said or written.
[Citations]” (Tarmann v. State Farm Mutual Automobile Insurance Company
(1991) 2 Cal.App.4th 153, 157.)
“To sufficiently plead the first requirement, that the
defendant made a promise, the complaint must state facts which show ‘how, when,
where, to whom, and by what means the representations were tendered.” (Beckwith
v. Dahl (2012) 205 Cal.App.4th 1039, 1060 citing Lazar v. Superior Court
(1996) 12 Cal.4th 631, 638.)
“The elements of negligent misrepresentation are
similar to intentional fraud except for the requirement of scienter; in a claim
for negligent misrepresentation, the plaintiff need not allege the defendant
made an intentionally false statement, but simply one as to which he or she
lacked any reasonable ground for believing the statement to be true.” (Charnay
v. Cobert (2006) 145 Cal.App.4th 170, 184 citing Bily v. Arthur Young
& Co. (1992) 2 Cal.4th 370, 407-408.)
Element 1 – Misrepresentation
The
requirement of specificity in a fraud action against a corporation requires the
plaintiff to allege the names of the persons who made the allegedly fraudulent
representations, their authority to speak, to whom they spoke, what they said
or wrote, and when it was said or written. [Citations]” (Tarmann v. State
Farm Mutual Automobile Insurance Company (1991) 2 Cal.App.4th 153, 157.)
“To sufficiently plead the first requirement, that the
defendant made a promise, the complaint must state facts which show ‘how, when,
where, to whom, and by what means the representations were tendered.” (Beckwith
v. Dahl (2012) 205 Cal.App.4th 1039, 1060 citing Lazar v. Superior Court
(1996) 12 Cal.4th 631, 638.)
In relevant part, ¶81 of the TAC alleges:
Defendant, Albert
Ahdoot, clearly made at the very least negligent misrepresentations to Plaintiffs.
He made negligent misrepresentations in June 2019 when he met with Connie and
Marvin at Starbucks located at 3680 Wilshire Blvd. LA, CA 90010 and promised
that he would not foreclose. Defendants went even further and encouraged
Plaintiffs to remodel the property with monetary funds that substantially
Plaintiffs did not have. Thus, Plaintiffs increased their financial debt
exposure and remodeled the property, after all Defendants promised that they
would not foreclose.
(TAC ¶81.)
This
misrepresentation pertains to Defendant, Albert Ahdoot, stating he would not
foreclose.
Defendants argue
that Plaintiffs don’t allege when or how the misrepresentation was made.
Plaintiffs appear to allege when the misrepresentation was made, it was in June
2019. However, Plaintiffs don’t allege how/by what means the misrepresentation
was tendered. The specificity of to whom it was made appears clear – the
misrepresentation was made to Plaintiffs Connie and Marvin. The “where” appears to be met because Plaintiffs
stated the location. While Plaintiffs don’t explicitly state Albert’s authority
to speak, ¶83 and ¶10 states Albert is the managing member of Loma Vista
Investment.
Plaintiff also
alleges:
82. This promise
was renewed multiple times in 2020, during the COVID-19 pandemic, when
Plaintiffs’ business was substantially reduced due to state and local
requirements, which impacted their income and ability to process mortgage
payments. As stated in the detailed statement of facts mentioned above.
83. Defendant
Albert Ahdoot, Managing Member of Loma Vista Investment LLC, explicitly
represented on multiple occasions to Plaintiffs that he would not foreclose on
the property. In particular, he would tell Plaintiffs that he was not
interested in the subject premises and that he did not want it. Every 7th day
of the month Defendant would take a check from Plaintiff. Defendant would come
to Plaintiff Connie Hur personal residence to obtain the checks and on such
occasions, Defendant would tell Plaintiffs that Defendant was not going to take
the subject property away. More facts and details can be referenced in the
above statement of facts.
(Compl. ¶82-83.)
The Court will hear further argument as to
whether the elements of this claim were sufficiently alleged—especially as to
the misrepresentation and damages.
Second Cause of Action - Fraudulent
Concealment
“’[T]he
elements of an action for fraud and deceit based on concealment are: (1) the
defendant must have concealed or suppressed a material fact, (2) the defendant
must have been under a duty to disclose the fact to the plaintiff, (3) the
defendant must have intentionally concealed or suppressed the fact with the
intent to defraud the plaintiff, (4) the plaintiff must have been unaware of
the fact and would not have acted as he did if he had known of the concealed or
suppressed fact, and (5) as a result of the concealment or suppression of the
fact, the plaintiff must have sustained damage.’” (Boschma v. Home Loan
Center, Inc. (2011) 198 Cal.App.4th 230, 248 citing Hahn v. Mirda (2007)
147 Cal.App.4th 740,748.) “Fraud must be pleaded with specificity rather than
with “’general and conclusory’” allegations.” (Boschma, supra, at 248
citing Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)
TENTATIVE RULING – SECOND CAUSE OF ACTION FRAUDULENT CONCEALMEANT
Defendants’ arguments as
to why the demurrer should be sustained as to this cause of action are
borderline incomprehensible. Defendants fail to make any arguments in a manner
that ties their arguments to a legal standard. The Court will not attempt to
decipher moving Defendants’ arguments as to why the demurrer should be
sustained as to this cause of action when Defendants’ arguments don’t make any
attempt to explain how their arguments are legally relevant.
Defendants’
Demurrer to the second cause of action is OVERRULED.
Third Cause of Action – Unfair Business Practices Violation of
B&P Code §17200 et
The
purpose of the UCL “is to protect both consumers and competitors by promoting
fair competition in commercial markets for goods and services.” (Drum v. San
Fernando Valley Bar Assn. (2010) 182 Cal.App.4th 247, 252 citing Kasky
v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) Business and Professions Code
section 17200 provides: “[a]s used in this chapter, unfair competition shall
mean and include any unlawful, unfair or fraudulent business act or practice
and unfair, deceptive, untrue or misleading advertising and any act prohibited
by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the
Business and Professions Code.” (Progressive West Ins. Co. v. Superior Court
(2005) 135 Cal.App.4th 263, 284.) Because
the UCL is written in the disjunctive, it establishes three varieties of
unfair competition – acts or practices which are unlawful, or unfair, or
fraudulent. (Adhav v. Midway Rent a Car, Inc. (2019) 37 Cal.App.5th 954,
970 citing Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone
Co. (1999) 20 Cal.4th 163, 180.)
Unlawful
“
‘The “unlawful” practices prohibited by … section 17200 are any practices
forbidden by law, be it civil or criminal, federal, state, or municipal,
statutory, regulatory, or court-made. [Citation.] It is not necessary that the
predicate law provide for private civil enforcement. [Citation.] As our Supreme
Court put it, section 17200 “borrows” violations of other laws and treats them
as unlawful practices independently actionable under section 17200 et seq.’” (South
Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861,
880 citing Hewlett v. Squaw Valley Ski Corp. (1997) 54 Cal.App.4th 499,
531-532.) “A plaintiff alleging unfair business practices under these statutes
must state with reasonable particularity the facts supporting the statutory
elements of the violation.” (Khoury v. Maly’s of California, Inc. (1993)
14 Cal.App.4th 612, 619; “Demurrer was properly sustained as to this cause of
action because the second amended complaint identifies no particular section of
the statutory scheme which was violated and fails to describe with any
reasonable particularity the facts supporting violation.”
Unfair
There
is authority that the test to determine whether a business practice is unfair
differs depending on whether the plaintiff in a UCL case is a competitor of the
defendant or a consumer. (Drum v. San Fernando Valley Bar Assn. (2010)
182 Cal.App.4th 247, 253.) In competitor cases, a business practice is “unfair”
only if it “threatens an incipient violation of an antitrust law, or violates
the policy or spirit of one of those laws because its effects are comparable to
or the same as a violation of the law, or otherwise significantly threatens of
harms competition.” (Id. citing Cel-Tech, supra, 20 Cal.4th at
187.)
In consumer cases, the Supreme Court has not
established a definitive test to determine whether a business practice is
unfair. (Drum v. San Fernando Valley Bar Assn., supra, 182
Cal.App.4th at 246 citing Cel-Tech,
supra, 20 Cal.4th at 187, fn. 12.)
Several definitions of “unfair” under the UCL have
been formulated, and they are:
1. “An
act or practice is unfair if the consumer injury is substantial, is not
outweighed by any countervailing benefits to consumers or to competition, and
is not an injury the consumers themselves could reasonably have avoided.” (Daugherty
v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 839.)
2. “’[A]n
“unfair business practice occurs when that practice “offends an established
public policy or when the practice is immoral, unethical, oppressive,
unscrupulous or substantially injurious to consumers.” [Citation.]’
[Citation.]” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93
Cal.App.4th 700, 719.)
3. An
unfair business practice means the “ ‘the public policy which is a predicate to
the action must be “tethered” to specific constitutional, statutory or
regulatory provisions.’” (Scripps Clinic v. Superior Court (2003) 108
Cal.App.4th 917, 940.)
(West v. JPMorgan Chase Bank, N.A. (2013) 214
Cal.App.4th 780, 806.)
“The balancing test required by the unfair business
practice prong of section 17200 is fact intensive and is not conducive to
resolution at the demurrer stage. ‘[U]nfairness’ is an equitable concept that
cannot be mechanistically determined under the relatively rigid legal rules
applicable to the sustaining or overruling of a demurrer.” (Progressive West
Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263, 287 citing Schnall
v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167.)
Fraudulent
“A
fraudulent business practice under section 17200 ‘is not based upon proof of
the common law tort of deceit or deception, but is instead premised on whether
the public is likely to be deceived.’” (Progressive West Ins. Co. v.
Superior Court (2005) 135 Cal.App.4th 263, 284 citing Pastoria v.
Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1498.) Stated another way, “In
order to state a cause of action under the fraud prong of [section 17200] a
plaintiff need not show that he or others were actually deceived or confused by
the conduct or business practice in question. ‘The “fraud” prong of [section
17200] is unlike common law fraud or deception. A violation can be shown even
if no one was actually deceived, relied upon the fraudulent practice, or sustained
any damage. Instead, it is only necessary to show that members of the public
are likely to be deceived.’ [Citations.]” (Progressive West Ins. Co., supra,
135 Cal.App.4th at 284 citing Schnall v. Hertz Corp. (2000) 78
Cal.App.4th 1144, 1167.)
TENTATIVE RULING THIRD CAUSE OF ACTION
The
vast majority of arguments in the moving and opposing papers are
incomprehensible.
Since moving Defendants made no attempt to explain how
Plaintiffs did not allege a cause of action, the Court will not attempt to
figure that out for Defendants by attempting to guess how Defendants believe
Plaintiffs did not allege a cause of action.
The most cognizable argument asserted in the demurrer
pertains to Defendants’ citation to Jenkins
v. JPMorgan Chase Bank, N.A., (2013) 216 Cal.App.4th 497. Defendants appear
to not be arguing about failing to allege sufficient facts but appear to be
making arguments about Plaintiffs not having standing for this cause of action.
The moving, opposing and reply papers seem to argue in
an incomprehensible manner about whether there is a causal link between the economic
injury and the impending foreclosure and whether or not there is standing.
As to these arguments, the Court will not attempt to
decipher who is correct, because neither side roots their arguments in legal
authority in any kind of understandable manner.
However, the Court notes the following below from Jenkins:
“To satisfy the narrower
standing requirements imposed by Proposition 64, a party must now(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 the economic
injury was the result of, i.e., caused by, the unfair business
practice or false advertising that is the gravamen of the claim.” (Ibid.)
A plaintiff must support each of the standing elements under Business and
Professions Code section 17204 “in the same way as any other matter on
which the plaintiff bears the burden of proof, i.e., with the manner and degree
of evidence required at the successive stages of the litigation. [Citations.]”
(Kwikset Corp., supra, 51 Cal.4th at p. 327, 120 Cal.Rptr.3d 741,
246 P.3d 877.) A UCL claim will survive a demurrer if the plaintiff can
plead “general factual allegations of injury resulting from the defendant's
conduct.” (I51 Cal.4th at p. 327, 120 Cal.Rptr.3d 741, 246 P.3d 877.)
The Kwikset
Corp. court held a plaintiff can satisfy the economic injury prong
of the standing requirements under **933 *522 Business
and Professions Code section 17204—i.e., show the plaintiff “personally
suffered” an economic injury—in “innumerable ways” because “[n]either the text
of Proposition 64 nor the ballot arguments in support of it purport to define
or limit the concept of ‘lost money or property....’ ” (Kwikset Corp.,
supra, 51 Cal.4th at p. 323, 120 Cal.Rptr.3d 741, 246 P.3d 877.) To
aid lower courts with determining whether a plaintiff has properly alleged an
economic injury under Business and Professions Code section 17204,
the Kwikset Corp. court listed four injuries that would
certainly qualify under the statute: (1) the plaintiff surrendering more or
acquiring less in a transaction than the plaintiff otherwise would have; (2)
the plaintiff suffering the diminishment of a present or future property
interest; (3) the plaintiff being deprived of money or property to which the
plaintiff has a cognizable claim; or (4) the plaintiff being required to enter
into a transaction, costing money or property, that would otherwise have been
unnecessary. (51 Cal.4th at p. 323, 120 Cal.Rptr.3d 741, 246 P.3d 877) These
four injuries are not “an exhaustive list” of the injuries a plaintiff may
allege to properly plead an economic injury under Business and Professions
Code section 17204, and “the quantum of lost money or property necessary to
show standing is only so much as would suffice to establish injury in fact.” (Kwikset
Corp., supra, 51 Cal.4th at pp. 323-324, 120 Cal.Rptr.3d 741, 246 P.3d
877.)
Additionally,
the Kwikset Corp. court held a plaintiff can satisfy the causation prong
of the standing requirements under Business and Professions Code section
17204—i.e., show the “plaintiff's economic injury [occurred] ‘as a result of’
the unfair competition”—by showing a “causal connection” between the economic
injury and the alleged unfair conduct. (Kwikset Corp., supra, 51
Cal.4th at p. 326, 120 Cal.Rptr.3d 741, 246 P.3d 877.) A plaintiff fails to
satisfy the causation prong of the statute if he or she would have suffered
“the same harm whether or not a defendant complied with the law.” (Daro v.
Superior Court (2007) 151 Cal.App.4th 1079,
1099, 61 Cal.Rptr.3d 716.)
(Jenkins v.
JPMorgan Chase Bank, N.A., (2013) 216 Cal.App.4th 497, 521-22.)
As to this cause
of action, the Court fails to see where Plaintiffs alleged economic injury in
the third cause of action. The Court will hear argument.
Fourth Cause of Action – Cancellation of
Written Instrument
As
stated in U.S. Bank National Assn. v. Naifeh:
Under Civil
Code section 3412, “[a] written instrument, in respect to which there is a
reasonable apprehension that if left outstanding it may cause serious injury to
a person against whom it is void or voidable, may, upon his application, be so
adjudged, and ordered to be delivered up or canceled.” To prevail on a claim to
cancel an instrument, a plaintiff must prove (1) the instrument is void or
voidable due to, for example, fraud; and (2) there is a reasonable apprehension
of serious injury including pecuniary loss or the prejudicial alteration of
one's position. (See Turner v. Turner (1959) 167 Cal.App.2d
636, 641, 334 P.2d 1011.)
(U.S. Bank
National Assn. v. Naifeh (2016) 1 Cal.App.5th 767, 778.)
As to this cause of action, Defendants continue to make
arguments as to why the demurrer should be sustained without providing legal
support for their arguments.
Defendants argue that Plaintiffs don’t allege facts
supporting why the forbearance agreement is void or voidable. However,
Plaintiffs alleged the forbearance agreements is void or voidable because they
signed it without legal assistance or representation, that it wasn’t translated
into the Plaintiffs’ native language, and Defendants pressured Plaintiffs into signing
it. Without any legal support, Defendants argue that Plaintiffs needed to
provide legal authority in their TAC that this is a proper basis for an
instrument to be void or voidable. The Court does not find this to be
convincing when the Defendants provided no legal authority for their own argument.
As to Defendants’ arguments on the cancellation of the
trustee’s deed upon sale, Defendants cite no legal support for whatever it is
they are trying to argue.
TENTATIVE RULING FOURTH CAUSE OF ACTION
Defendants
demurrer is OVERRULED as to the fourth cause of action. Defendants continue to
make arguments as to why the demurrer should be sustained without providing
legal support for their arguments. The Court does not find Defendants’
arguments convincing when they provide no legal authority for the assertions
they make.
Fifth Cause of Action – Breach of the
Implied Covenant of Good Faith and Fair Dealing
“Every contract imposes upon each party a
duty of good faith and fair dealing in its performance and its enforcement.” (Hicks
v. E.T. Legg & Associates (2001) 89 Cal.App.4th 496, 508.) “It is
universally recognized the scope of conduct prohibited by the covenant of good
faith is circumscribed by the purposes and express terms of the contract.” (Id.
at 509.)
“The covenant of good faith and fair
dealing, implied by law in every contract, exists merely to prevent one
contracting party from unfairly frustrating the other party’s right to receive
the benefits of the agreement actually made.” (Guz v. Bechtel (2000) 24
Cal.4th 317, 349.)
Under Merced Irr. Dist. v. County of
Mariposa :
Under California
law, to allege a claim for breach of the covenant of good faith and fair
dealing, a plaintiff must allege the following elements: (1) the plaintiff and
the defendant entered into a contract; (2) the plaintiff did all or
substantively all of the things that the contract required him to do or that he
was excused from having to do so; (3) all conditions required for the
defendant's performance had occurred; (4) the defendant unfairly interfered
with the plaintiff's right to receive the benefits of the contract; and (5) the
defendant's conduct harmed the plaintiff. See Judicial Counsel
of California Civil Jury Instructions § 325 (2013); see
also Reinhardt v. Gemini Motor Transport, 879 F.Supp.2d 1138,
1145 (E.D.Cal.2012).
(Merced Irr.
Dist. v. County of Mariposa (E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280,
discussing California law.)
‘[T]he implied covenant of good faith and fair dealing
is limited to assuring compliance with the express terms of the
contract, and cannot be extended to create obligations not contemplated by the
contract.’” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182,
206 (quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th
1089, 1094).)
A breach of the implied covenant of good faith and
fair dealing involves something beyond breach of the contractual duty itself
and it has been held that bad faith implies unfair dealing rather than mistaken
judgment. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990)
222 Cal.App.3d 1371, 1394.)
Here, the Court finds the allegations in the fifth
cause of action are vague, unintelligible, uncertain, and at times internally
inconsistent. It is unclear what contract the Plaintiffs are basing this cause
of action on. Plaintiffs refer to contracts such as the initial deed of trust,
a forbearance agreement, verbal agreements, and implied in fact contracts. It
is unclear which contracts they are referring to as to how they claim they did
all or substantively all of the things the contract required them to do or that
they were excused from having to do so. Plaintiffs’ Opposition does not help
the Court in any manner to understand their allegations.
TENTATIVE RULING FIFTH CAUSE OF ACTION
Defendants’
demurrer to the fifth cause of action is sustained.
Sixth Cause of Action – Wrongful
Foreclosure
“To
obtain the equitable set aside of a trustee’s sale or maintain a wrongful
foreclosure claim, a plaintiff must allege that (1) the defendants caused an
illegal, fraudulent, or willfully oppressive sale of the property pursuant to a
power of sale in a mortgage or deed of trust; (2) the plaintiff suffered
prejudice or harm; and (3) the plaintiff tendered the amount of the secured
indebtedness or was excused from tendering.” (Chavez v. Indymac Mortgage
Services (2013) 219 Cal.App.4th 1052, 1062 citing Lona v. Citibank, N.A.
(2011) 202 Cal.App.4th 89, 112.)
Defendants group the sixth, eighth, and
ninth causes of action together. After citing general case law on the issue of
wrongful foreclosure, Defendants make several arguments without explaining how
their arguments are legally relevant and make assertions outside the scope of
the pleadings.
The basis of Plaintiffs’ claim appears to
be that the foreclosure of the property was wrongful because Defendants did not
comply with Civil Code 2924b(b), 2923c, 2924f(b)(1) to (b)(7), 2924c.
Defendants argue, “ “[M]ere technical
violations of the foreclosure process will not give rise to a tort claim; the
foreclosure must have been entirely unauthorized on the facts of the case. This
is a sound addition.” Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th
394, 409.”
The problem with Defendants’ argument is
that the Miles case that Defendants cited doesn’t explain what “mere
technical violations” are considered to be. Further, that case does not address
Civil Code 2924.
TENTATIVE RULING SIXTH CAUSE OF ACTION
WRONGFUL FORECLOSURE
Since Defendants do not cite any case law
directly on point that this cause of action can be sustained on the grounds the
Defendants argued, the Court is inclined to overrule the demurrer as to this
cause of action. The Court will hear argument. Defendants’ arguments continued
to be largely incomprehensible.
TENTATIVE RULING EIGHTH CAUSE OF ACTION
Defendants
made the same exact arguments as to this cause of action as they did on the
sixth cause of action. The Court tentatively plans to adopt the same ruling.
However, the Plaintiffs need to address how it is not duplicative of the sixth
cause of action.
TENTATIVE RULING NINTH CAUSE OF ACTION
As
to this cause of action, the Defendants make the same exact arguments as they
made on the sixth cause of action. This is confusing, considering the fact that
the ninth cause of action is for quiet title which appears to have different
elements than a cause of action for wrongful foreclosure and setting aside a
trustee’s sale.
CCP §761.020 states as follows:
The
complaint shall be verified and shall include all of the following:
(a) A description of the
property that is the subject of the action. In the case of tangible personal
property, the description shall include its usual location. In the case of real
property, the description shall include both its legal description and its
street address or common designation, if any.
(c) The adverse claims to the
title of the plaintiff against which a determination is sought.
(d) The date as of which the
determination is sought. If the determination is sought as of a date other than
the date the complaint is filed, the complaint shall include a statement of the
reasons why a determination as of that date is sought.
(e) A prayer for the
determination of the title of the plaintiff against the adverse claims.
(CCP §761.020(a)-(e).)
Since Defendants made no attempt to
present arguments as to how the quiet title action is not alleged, the Court
will not attempt to make Defendants’ arguments for them. Defendants’ demurrer
is overruled.
TENTATIVE RULING Seventh Cause of Action –
Breach of Contract
To
state a cause of action for breach of contract, Plaintiff must allege “(1) the
existence of the contract, (2) plaintiff’s performance or excuse for
nonperformance, (3) defendant’s breach, and (4) resulting damages to the
plaintiff.” (Oasis West Realty, LLC
v. Goldman (2011) 51 Cal.4th 811, 821.)
A cause of action for breach of contract is subject to demurrer if “it
cannot be ascertained from the pleading whether the contract is written, is
oral, or is implied by conduct.” (Code
Civ. Proc., §430.10(g).) A written contract must be pled verbatim in the body
of the complaint, be attached to the complaint, and incorporated by reference,
or be pled according to its legal effect.
(Bowden v. Robinson (1977) 67 Cal.App.3d 705, 718.) An allegation of an oral agreement must
“set[] forth the substance of its relative terms.” (Gautier v. General Tel. Co. (1965)
234 Cal.App.2d 302, 305.)
Defendants’ argument that the Court is to
consider the veracity of certain allegations is not well-taken and entirely
outside the scope of demurrer. The
court “treat[s] the demurrer as admitting all material facts properly pleaded,
but not contentions, deductions or conclusions of fact or law ….” (Berkley v. Dowds (2007) 152
Cal.App.4th 518, 525.) 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.)
Here, Defendants’ arguments are largely incomprehensible. Defendants
continue to make it unclear how their arguments are legally relevant to the
demurrer that they are bringing. That being said, the Court is entirely unclear
what contract or contracts this breach of contract claim is based on. The Court
tentatively plans to sustain the demurrer to this cause of action based on
uncertainty.
OTHER ISSUES
Standing – Bankruptcy/Estoppel
Defendants argue that the Plaintiffs lack standing on all claims
due to bankruptcy law and estoppel. The arguments by Defendants are not
entirely clear. If Defendants believe that Plaintiffs lack standing, they need
to understandably explain what the California state law standard is on the
issue, how each individual Plaintiff lacks standing, which bankruptcies are
relevant, which foreclosures are relevant, and which dates are legally relevant
and when certain alleged events occurred and how those dates affect the legal
standard. Further, the Defendants need to explain it in a comprehensible manner
to each Plaintiff, and each cause of action.
Tender
Defendants argue that
Plaintiffs lack standing due to failure to comply with the tender rule. Defendants
argue that this is grounds to sustain the demurrer as to the sixth, eighth, and
ninth causes of action. The Court does not find this argument availing as to
the ninth cause of action because the Court fails to see how tender is required
in stating a quiet title cause of action.
As to the sixth and eighth causes of action, the Court could
potentially find Defendants’ arguments availing. It appears based on the law
that both parties cited, that alleging that one is excused from tender is
potentially sufficient.
Plaintiffs argue in opposition:
There are exceptions to the tender requirement.
Lona v. Citibank, NA. (2011) 202 Cal.App.4'" 89. First, if the borrower's
action attacks the validity of the
underlying debt, a tender is not required since it would constitute an affirmation of the debt. Stockton v. Newman
(1957) 148 Cal.App.2d at p. 564, 307 P.2d 56. Second, a tender may not be
required where it would be inequitable to impose such a condition on the party
challenging the sale. Humboldt Savings Bank v. McCleverty (1911) 161 Cal. 285,
20 291, 119 P. 82. Third, no tender will be required when the trustor is not
required to rely on equity to attack the deed because the trustee's deed is
void on its face. Dimock v. Emerald Properties LLC, 81 Cal.App.4th at p. 878.
(Pl. Oppo. p. 7.)
Here, the Court is entirely unclear based on Plaintiffs’
Opposition where they alleged those factual allegations that are allegedly
exceptions to the tender rule that they cited . Therefore, the Court could be
inclined to change course on the sixth and eight causes of action and sustain
the demurrers as to those causes of action. The Court will hear argument.
False Claims
Defendants have an
entire section titled “Plaintiffs’ TAC is based upon several obvious false
claims.” Defendants don’t make it clear in any fashion as to what causes of
action these arguments apply to. The Court will not attempt to decipher
Defendants’ incomprehensible arguments.
Reply
The Reply is a rambling
and jumbled. Overall, like Defendants’ moving papers, the Reply is immensely
confusing as Defendants ramble and make factual assertions without explaining
how they apply to a legal standard.
Standing – Again
The Court requests
Plaintiffs to address how they have standing for each cause of action.
Plaintiffs themselves admit that they transferred the property to AAP.
Therefore, the Court is confused how the other non-AAP Plaintiffs have standing
on several of these claims when many of the claims are based on AAP’s property
being wrongfully foreclosed. Further, Plaintiffs first two causes of action
deal with misrepresentation/fraud, and the Court is unclear if all the
Plaintiffs have standing on these claims if the misrepresentations were only
made to two Plaintiffs.
Leave to Amend
As
stated in Dalton v. East Bay Mun. Utility Dist. (1993) 18 Cal.App.4th
1566, 1570-71:
If the complaint, liberally construed, can state
a cause of action, or if it is reasonably possible that the plaintiffs can cure
the complaint by amendment, the trial court should not sustain a demurrer
without leave to amend. (Heckendorn v. City of San Marino (1986) 42
Cal.3d 481, 486 [229 Cal.Rptr. 324, 723 P.2d 64].) The burden is on
the plaintiffs to establish the reasonable possibility that the defect is
curable. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) A
demurrer is properly sustained without leave to amend if it appears that under
applicable substantive law there is no reasonable possibility that *1571 an
amendment could remedy the defects. (Heckendorn v. City of San Marino, supra,
42 Cal.3d at p. 486.)
(Dalton v. East Bay Mun. Utility Dist. (1993)
18 Cal.App.4th 1566, 1570-71.)
The Court will discuss leave to amend on any sustained
portions of the demurrer at the hearing.
Request for Judicial Notice
Judicial
notice may be taken of the following matters to the extent that they are not
embraced within Section 451:
(a) The decisional, constitutional, and statutory
law of any state of the United States and the resolutions and private acts of
the Congress of the United States and of the Legislature of this state.
(b) Regulations and legislative enactments issued
by or under the authority of the United States or any public entity in the
United States.
(c) Official acts of the legislative, executive,
and judicial departments of the United States and of any state of the United
States.
(d) Records of (1) any court of this state or (2)
any court of record of the United States or of any state of the United States.
(e) Rules of court of (1) any court of this state
or (2) any court of record of the United States or of any state of the United
States.
(f) The law of an organization of nations and of
foreign nations and public entities in foreign nations.
(g) Facts and propositions that are of such
common knowledge within the territorial jurisdiction of the court that they
cannot reasonably be the subject of dispute.
(h) Facts and propositions that are not
reasonably subject to dispute and are capable of immediate and accurate
determination by resort to sources of reasonably indisputable accuracy.
(Evidence Code §452.)
The trial court shall take judicial notice of any
matter specified in Section 452 if a party requests it and:
(a) Gives each adverse party sufficient notice of
the request, through the pleadings or otherwise, to enable such adverse party
to prepare to meet the request; and
(b) Furnishes the court with sufficient
information to enable it to take judicial notice of the matter.
(Evidence Code §453.)
Defendants request judicial notice of 9 documents. The
Court grants judicial notice of those documents.
Taking judicial
notice of a document is not the same as accepting the truth of its contents or
accepting a particular interpretation of its meaning. (Fremont Indem. Co. v.
Fremont General Corp. (2007)
148 Cal.App.4th 97, 113-14 (citations and internal quotations
omitted).) In addition, judges “consider matters shown in exhibits attached to
the complaint and incorporated by reference.” (Performance Plastering
v. Richmond American Homes of California, Inc. (2007)
153 Cal.App.4th 659, 665.) However, “[w]hen judicial notice is
taken of a document . . . the truthfulness and proper interpretation of the
document are disputable.” (Aquila, Inc. v. Sup. Ct. (2007)
148 Cal.App.4th 556, 569 (quoting StorMedia Inc. v. Sup.
Ct. (1999) 20 Cal.4th 449, 457 n. 9).)
MOTION
TO STRIKE
RELIEF REQUESTED
Defendants, move to strike ¶7 in the prayer for relief which is the request for
punitive or exemplary damages.
Proof of Service
Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)):Ok
Proper Address (CCP §1013, §1013a, §1013b): Ok
Moving Papers:
Notice/Motion
Opposition Papers:
Opposition
Reply Papers: Reply
Meet and Confer
Before filing a motion to strike pursuant to
this chapter, the moving party shall meet and confer in person or by telephone
with the party who filed the pleading that is subject to the motion to strike
for the purpose of determining if an agreement can be reached that resolves the
objections to be raised in the motion to strike. If an amended pleading is
filed, the responding party shall meet and confer again with the party who
filed the amended pleading before filing a motion to strike the amended pleading.
(CCP §435.5(a).)
Moving party makes no
allegation and submits no declaration that it met and conferred. However,
Opposition does not bring this issue up.
The Court notes as
follows, “A determination by the court that the meet and confer process was
insufficient shall not be grounds to grant or deny the motion to strike.” (CCP
§435.5(a)(4).)
Legal Standard – Motion to Strike
Any party, within the
time allowed to respond to a pleading may serve and file a notice of motion to
strike the whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court,
Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion
and upon terms it deems proper: (1) strike out any irrelevant, false, or
improper matter inserted in any pleading; or (2) strike out all or any part of
any pleading not drawn or filed in conformity with the laws of California, a
court rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz
(1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the
claim is surplusage; probative facts are surplusage and may be stricken out or
disregarded”].)
The
grounds for moving to strike must appear on the face of the pleading or by way
of judicial notice. (Code. Civ. Proc. § 437; Turman v. Turning
Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 [“judges
read allegations of a pleading subject to a motion to strike as a whole, all
parts in their context, and assume their truth”].)
TENTATIVE RULING MOTION TO STRIKE
Punitive
Damages
In an action for the
breach of an obligation not arising from contract, where it is proven by clear
and convincing evidence that the defendant has been guilty of oppression,
fraud, or malice, the plaintiff, in addition to the actual damages, may recover
damages for the sake of example by way of punishing the defendant. (Cal. Civ.
Code §3294(a).) “‘Malice’ means conduct which is intended by the defendant to
cause injury to the plaintiff or despicable conduct which is carried on by the
defendant with a willful and conscious disregard of the rights or safety of
others.” (CCP §3294(c)(1).) “‘Oppression’ means despicable conduct that subjects
a person to cruel and unjust hardship in conscious disregard of that person’s
rights. (CCP §3294(c)(2).) “‘Fraud’ means an intentional misrepresentation,
deceit, or concealment of a material fact known to the defendant with the
intention on the part of the defendant of thereby depriving a person of
property or legal rights or otherwise causing injury. (CCP §3294(c)(3).)
Plaintiffs’
successfully alleged a fraud claim in their second cause of action for
fraudulent concealment. Therefore, Plaintiffs can request punitive damages to
at least one of the causes of action in this TAC. CCP §3294(c)(3) states that
fraud claim is a proper basis to request punitive damages.
Defendants’ motion to strike is DENIED.