Judge: Colin Leis, Case: 24STCV09003, Date: 2025-04-09 Tentative Ruling

Case Number: 24STCV09003    Hearing Date: April 9, 2025    Dept: 74

Papazian v. East West Bancorp, Inc.

Defendant East West Bancorp, Inc.’s Demurrer

BACKGROUND 

This motion arises from a foreclosure dispute.

Plaintiff Valentina Papazian (Plaintiff) filed a complaint against defendant East West Bancorp, Inc. (Defendant).  Plaintiff alleges eight causes of action (1) Violations of Cal. Civil Code § 2923.5; (2) Violations of Cal. Civil Code § 2924.11; (3) Breach of Implied Covenant of Good Faith and Fair Dealing; (4) Cancellation of Deed of Trust; (5) Unfair Business Practices; (6) Declaratory Relief; (7) Wrongful Foreclosure; and (8) Quiet Title.

Defendant demurs to entire complaint.

JUDICIAL NOTICE

Grant.

DISCUSSION

            Plaintiff took out a promissory note secured by a deed of trust (First Deed of Trust).  (Complaint ¶ 8; see RJN 1.)  Later, Plaintiff took out a line or credit with East West Bank which was secured by a second deed of trust (Second Deed of Trust).  (Complaint ¶ 7.)  A series of disputes arose between Plaintiff and East West Bank regarding the debt.  (Complaint ¶¶ 10-13.)  East West Bank then conducted a public auction and foreclosed upon the Deed of Trust.  (Complaint ¶ 14.)  All eight causes of action arise out of the promissory note, deed of trust, and subsequent foreclosure.

Defendant demurs to the complaint on the grounds that it fails to state a cause of action against Defendant because Defendant is not liable for the actions of its subsidiary.  The demurrer is unopposed.

Subsidiary Liability

            The Second Deed of Trust is between Plaintiff and East West Bank.  (RJN Ex. 5.)  East West Bank is a wholly-owned subsidiary of East West Bancorp, Inc.  (RJN Ex. 6.)  “A parent corporation is not liable on the contract or for the tortious acts of its subsidiary simply because it is a wholly owned subsidiary.”  (Northern Natural Gas Co. v. Superior Ct. (1976) 64 Cal.App.3d 983, 991.)  Liability must be established by some other theory, such as agency.  (Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5^th 840, 861.)  Plaintiff fails to plead any theory of liability, or recognize that East West Bank is a subsidiary of East West Bancorp, Inc.  Thus, the Court sustains Defendant’s demur.

            Although the standard for granting leave to amend is low, it requires Plaintiff to show that there is a possibility to amend the complaint to state a good cause of action.  Plaintiff did not oppose the Complaint.  Thus, the demurrer is sustained without leave to amend.

CONCLUSION

            The Court sustains Defendant’s Demurrer without leave to amend.

            Defendant to give notice.