Judge Christopher K. Lui, Case 22STCV15940 2023-01-18 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the demurrer addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

Plaintiff allege that Defendants steered Plaintiff into a “hard money loan” mortgage used to evade the requirements of the Dodd-Frank Amendments to the Truth-in-Lending Act (“TILA”). Defendant lender allegedly deprived Plaintiff of use of loan funds needed to make necessary repairs to the property and caused the property to be sold a trustee’s sale.

Defendant Lil’ Wave Financial, Inc. dba Superior Loan Servicing demurs to the Second Amended Complaint.

Defendant Lil’ Wave Financial, Inc. dba Superior Loan Servicing’s demurrer to the second cause of action is SUSTAINED without leave to amend.

The Declaration of Kristi M. Wells reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in CCP § 430.41.

As an initial matter, the Court order the “Second” Amended Complaint filed on December 6, 2022 stricken, as it is actually a Third Amended Complaint which was filed without leave of court. The operative complaint is the Second Amended Complaint filed on December 5, 2022.

Defendant argues that this cause of action is not plead with the requisite specificity as against demurring Defendant Lil’ Wave Financial, Inc. dba Superior Loan Servicing.

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff. (Citations omitted.)” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498 [italics omitted].)

Fraud must be pleaded with specificity rather than with “ ‘general and conclusory allegations.’ ” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 [132 Cal. Rptr. 2d 490, 65 P.3d 1255].) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645.)

We enforce the specificity requirement in consideration of its two purposes. The first purpose is to give notice to the defendant with sufficiently definite charges that the defendant can meet them. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216 [197 Cal. Rptr. 783, 673 P.2d 660].) The second is to permit a court to weed out meritless fraud claims on the basis of the pleadings; thus, “the pleading should be sufficient ‘ “to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” ’ ” (Id. at pp. 216–217.)

Here, the second cause of action still does not include specific allegations against demurring Defendant Lil’ Wave Financial, Inc. dba Superior Loan Servicing as to exactly what was said, by whom to whom and why such was known to be false when made, and Plaintiff’s reliance causing damage. ¶ 68 mentions demurring defendant but only indicates that it failed to conduct servicing activities in accordance with the terms of the loan on numerous occasions. This is not fraud. Nor is the allegation that Superior commenced foreclosure proceedings after Plaintiff began making payments by cashier’s check in person. (¶ 71.) Likewise, Superior’s alleged refusal to accept tendered loan payments and refusal to extend the loan period (¶¶ 73, 74) is not fraud. Plaintiff also alleges that Superior misrepresented the loan balance with a false and inaccurate amount of $388,392.40 in the billings, statements, pay-off demands, recorded notice of default and notice of sale (¶¶ 77,79), but Plaintiff fails to allege that Plaintiff relied[1] on such statement in paying such amount out-of-pocket.

As such, fraud is not pled with the requisite specificity against Lil’ Wave Financial/Superior Loan Servicing. Plaintiff’s conspiracy allegations are insufficient as against Lil’ Wave Financial/Superior Loan Servicing.

Plaintiff expressly does not oppose this demurrer, having filed a notice of non-opposition. Plaintiff could simply have agreed to dismiss this cause of action against demurrer defendant during the meet and confer process.

[1]

Plaintiff's claims fail for an additional reason: she has not shown that she actually relied on the alleged misrepresentations, which is an essential element of both claims of deceit. (Citation omitted.) “Actual reliance occurs when a misrepresentation is ‘“an immediate cause of [a plaintiff's] conduct, which alters his legal relations,”’ and when, absent such representation, ‘“he would not, in all reasonable probability, have entered into the contract or other transaction.”’ [Citations.] ‘It is not … necessary that [a plaintiff's] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct. … It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision.’” (Citation omitted.)

(Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1256.)