Judge David A. Rosen, Case 22BBCV00006 2022-12-09 Tentative Ruling

Judge: David A. Rosen, Case: 22BBCV00006, Date: 2022-12-09 Tentative Ruling

Case Number: 22BBCV00006 Hearing Date: December 9, 2022 Dept: E

Case No: 22BBCV00006
Hearing Date: 12/09/2022 – 10:00am

Trial Date: UNSET

Case Name: TRACEY L BAUMERT v. BANK OF AMERICA, et al.

3 TENTATIVE RULINGS

MOTION 1

Moving Party: Defendants, HSBC Bank USA National Association, As Trustee for the Certificate Holders of Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA3 (“HSBC”); and National Default Servicing Corporation (“National”) [collectively “Loan Defendants”]

Responding Party: Plaintiff, Tracey Baumert

(Oppo and Reply Submitted)

Moving Papers: Memo Demurrer; Memo Motion to Strike; Decl. Steven M. Dailey; Request for Judicial Notice

Opposition Papers: Opposition to demurrer

Reply Papers: Notice of Non-Opposition to Motion to Strike; Reply to Demurrer

Proof of Service Timely Filed (CRC Rule 3.1300): ok
16/21 Court Days Lapsed (CCP 1005(b)): ok
Proper Address: ok

RELIEF REQUESTED
Loan Defendants demur to Plaintiffs’ SAC as follows:

1. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the Second Amended Complaint, and every cause of action contained therein, on the basis that judicial estoppel bars claims not raised in Plaintiffs’ bankruptcy cases.

2. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the First Cause of Action of the Second Amended Complaint, styled “Breach of Contract,” on the basis that Plaintiffs fail to state facts constituting a cause of action because A) this cause of action is time barred, B) Plaintiffs fail to allege a breached contractual provision by Loan Defendants, C) Plaintiffs cannot allege performance of all conditions of the agreement, and D) Plaintiffs fail to plead any resulting damage.

3. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the First Cause of Action of the Second Amended Complaint, styled “Wrongful Foreclosure,” on the basis that Plaintiffs fail to state facts constituting a cause of action because A) this cause of action is time barred to the extent it is based on the 2007 loan origination or the trial modification plans in 2008-2009, B) the October 4, 2019 trustee’s sale is presumed valid, C) Plaintiffs fail to allege tender, D) Plaintiffs fail to plead any statutory violation with reasonable particularity, E) Plaintiffs’ claim of a “predatory loan” cannot support this cause of action, F) this Court lacks jurisdiction to determine whether a violation of the automatic say occurred, G) the bankruptcy court found the stay was not violated by the trustee’s sale and relief was granted to proceed with obtaining possession, and H) Plaintiffs have not alleged substantial prejudice due to any alleged defect.

4. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the Third Cause of Action of the Second Amended Complaint, styled “Fraud,” on the basis that Plaintiffs fail to state facts constituting a cause of action because A) claims relating to origination or modification efforts are time barred, B) Plaintiffs fail to specifically allege a misrepresentation by Loan Defendants, C) Plaintiffs fail to allege facts indicating knowledge of falsity, D) Plaintiffs fail to allege specific facts indicating reliance, E) Plaintiffs fail to plead specific facts indicating injury.

5. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the Fourth Cause of Action of the Second Amended Complaint, styled “Cancellation/Rescission,” on the basis that Plaintiffs fail to state facts constituting a cause of action because Plaintiffs fail to allege a basis for cancellation or rescission, and the wrongful foreclosure cause of action fails.

6. Loan Defendants generally demur pursuant to California Code of Civil Procedure section 430.10(e) to the Fifth Cause of Action of the Second Amended Complaint, styled “Declaratory Relief,” on the basis that Plaintiffs fail to state facts constituting a cause of action because A) Plaintiffs fail to allege any actual controversy, and B) Plaintiffs cannot identify any valid substantive claim.

BACKGROUND
This action pertains to events surrounding an alleged 2006 loan, a May 2009 loan modification, and a 2019 foreclosure.

Plaintiffs’ FAC alleged six causes of action, and this Court sustained demurrers with leave to amend granted to the FAC at the hearing on July 1, 2022.

On August 3, 2022, Plaintiffs filed a Second Amended Verified Complaint alleging causes of action for: (1) Breach of Contract, (2) Wrongful Foreclosure, (3) Fraud by Misrepresentation, (4) Rescission/Cancellation, and (5) Declaratory Relief.

PROCEDURAL
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. (Id., §430.41(a)(4).)

Attorney for Loan Defendants alleged he met and conferred with Plaintiff. (Decl. Dailey ¶2.)

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.)

ANALYSIS

Preliminary Matter
The caption of the verified SAC indicates that the Plaintiffs are Tracey L. Baumert (“Tracey”) and Henry T. Baumert (“Henry”). However, starting with the first cause of action on page 13 through the fifth cause of action on page 19, the allegations in the verified SAC only make allegations with respect to Tracy Baumert. There are no allegations in any of the causes of action made by or with respect to Henry. Henry has also failed to respond to discovery and ignored Court orders to do so.

Further, footnote 1 on page 2 of the Reply submitted by Loan Defendants cites Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20. Loan Defendants argue that since Henry Baumert did not submit Opposition, he has in effect abandoned the issues raised and the demurrer should be sustained without leave to amend as to Henry. “Plaintiffs did not oppose the County’s demurrer to this portion of their seventh cause of action and have submitted no argument on the issue in their briefs on appeal. Accordingly, we deem plaintiffs to have abandoned the issue.” (Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)

First Cause of Action – Breach of Contract
Plaintiff alleges she entered into a written contract with Defendants in May of 2009 to allow for a loan modification. Plaintiff further alleges this contract was breached when Plaintiff was denied the loan modification.

Loan Defendants allege HSBC cannot be liable for breach of contract because the agreement was alleged to be between Plaintiff and BoA.

In relevant part, the SAC alleges, “Plaintiff Tracy L. Baumert entered into a valid and enforceable written contract with Bank of America in May of 2009.”

Here, the Court notes that Plaintiff did not allege HSBC nor National to be parties to the contract.

Plaintiff alleged as follows, “Plaintiff is informed and believes that Defendant HSBC is closely related to Countrywide and Bank of America and the other defendants herein and HSBC both had knowledge of their wrongful actions and also benefited therefrom and as a result is also responsible for the wrongful actions by Countrywide and BOA and Trustee National Default Servicing Corporation pertaining to loan origination and modification efforts because knowledge of these acts is imputed to Defendant HSBC by virtue of their close relationship to the other defendants. As a result and for other reasons described herein, the claims attacking loan origination are not time barred.” (SAC ¶10.)

Plaintiff’s allegations in Paragraph 10 are insufficient.

“With respect to successor in interest liability, as a general rule, “a corporation purchasing the principal assets of another corporation ... does not assume the seller's liabilities unless (1) there is an express or implied agreement of assumption, (2) the transaction amounts to a consolidation or merger of the two corporations, (3) the purchasing corporation is a mere continuation of the seller, or (4) the transfer of assets to the purchaser is for the fraudulent purpose of escaping liability for the seller's debts.”” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal..App.4th 1150, 1170 citing Ray v. Alad Corp. (1977) 19 Cal.3d 22, 28.)

Here, Plaintiff does not make allegations of successor in interest liability.

“The legal concept of assignment refers to the transferability of all types of property....” (Arabia v. BAC Home Loans Servicing, L.P. (2012) 208 Cal.App.4th 462, 472, 145 Cal.Rptr.3d 678.) “The general rule is that the mere assignment of rights under an executory contract does not cast upon the assignee the obligations imposed by the contract upon the assignor.... [However, a]ssumption of obligations may be implied from acceptance of benefits under the contract.” **410 (Enterprise Leasing Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 745, 282 Cal.Rptr. 620, citation omitted.)” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal..App.4th 1150, 1170.)

Here, Plaintiff does not allege liability of HSBC and National by means of assignment.

Plaintiffs’ allegations further do not allege liability based on agency.

Further, as explained in Motion 2 infra, the breach of contract cause of action would be barred by the Statute of Limitations and Plaintiffs’ failure to note this matter in the bankruptcy case.

TENTATIVE RULING – Breach of Contract
Loan Defendants’ demurrer as to the first cause of action for breach of contract is sustained without leave to amend as to both Plaintiffs.

Second Cause of Action – Wrongful Foreclosure
Plaintiff allege as follows, “Defendants HSBC and Trustee National Default Servicing caused the illegal and fraudulent sale of Plaintiff’s Property by: (1) also refusing to accept a tender of funds necessary to reinstate the loan within 5 days of the sale as required by 2924(c); (2) by failing to contact Plaintiff to discuss modification and/or foreclosure alternatives as required by California law before the foreclosure sale could be lawfully conducted and; (3) conducting the foreclosure sale when the Property was protected from sale by the automatic stay under the Bankruptcy Code.” (SAC ¶78.)

Loan Defendants argue that the cause of action is time barred to the extent it is based on the 2007 loan origination or the trial modification plans in 2008-2009. Loan Defendants also argue the October 4, 2019, trustee’s sale is presumed valid. Loan Defendants argue Plaintiffs have not pled tender and that Plaintiffs did not plead statutory violation with reasonable particularity. Further, Loan Defendants argue: Plaintiffs’ claim of a ‘predatory loan’ cannot support this cause of action; the Court lacks jurisdiction to determine whether a violation of the automatic stay occurred; the bankruptcy court found the stay was not violated by the trustee’s sale, and relief was granted to proceed with obtaining possession; and Plaintiffs have not alleged substantial prejudice due to any alleged defect.

“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.)

Here, it appears as if Plaintiff Tracy has pleaded elements 2 and 3 of wrongful foreclosure – harm and tender. However, Plaintiff’s pleading and Opposition to the demurrer do not fully substantiate whether violation of Civil Code 2924c by Loan Defendants constitute pleading the first element of a wrongful foreclosure cause of action. Further, as to number 3 in paragraph 78 being the basis for Plaintiff’s wrongful foreclosure cause of action, this allegation is factually incorrect because the foreclosure sale did not occur when the property was protected from the automatic stay, as the Bankruptcy Court has already ruled. This is indicated in Loan Defendants’ request for judicial notice.

As to Henry, Henry did not plead anything. The allegations in the complaint are only alleged as to Tracy.

SOL
Loan Defendants argue the statute of limitations for a breach of contract is 4 years, and since this is based on a contract from 2007 and modifications in 2009, the instant action is time barred. The Court does not find this argument persuasive as the wrongful foreclosure is alleged to have occurred based on conduct in 2019.

TENTATIVE RULING – Second Cause of Action – Wrongful Foreclosure
Loan Defendants’ demurrer as to Tracy’s wrongful foreclosure cause of action is sustained with 20 day’s leave to amend granted.

Loan Defendants’ demurrer as to Henry’s wrongful foreclosure cause of action is sustained without leave to amend.

Third Cause of Action – Fraud
Plaintiff alleges a cause of action for fraud by misrepresentation. Plaintiff alleges as follows, “Defendant HSBC made intentional and false representations to Plaintiff as follows: (1) that HSBC did not have to accept Plaintiff’s tender of money to reinstate the loan when the law required that HSBC accept the funds up to 5 days before the sale; (2) representing that the foreclosure could go forward despite the filling of Henry Baumert’s active bankruptcy when, in fact, federal law precluded the conducting of the foreclosure sale and; (3) These damages include approximately $133,232 which is the amount that the amount of the proceeds stated by the Defendant at the foreclosure sale exceeded the money actual money owing on the loan, including all costs, which effectively eliminated the possibility that competitive bidding by prospective buyers at the foreclosure sale would generate excess proceeds which Plaintiff would be entitled to receive.” (SAC ¶85.)

Further alleged is that “Plaintiff is not aware of the identity of the employees and agents of Defendants who made the aforementioned representations but the Defendants are aware of who these individuals are and cannot use Plaintiff’s lack of knowledge as a defense to the fraud claim.” (SAC ¶86.)

“‘The elements of fraud, which gives rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ “ (Small v. Fritz Companies, Inc. (2003) 30Cal.4th 167, 173 citing Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

Fraud must be pleaded with specificity rather than with “‘general and conclusory allegations.’” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) 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 (1996)12 Cal.4th 631, 645.)

Here, Plaintiff does not allege intent to defraud and justifiable reliance. Further, Plaintiff did not allege how, when, where, by what means the representations were made, and who made the representations and their authority to speak.

Further, no allegations are made as to any misrepresentations as to National.

Further, Plaintiff’s argument that she has sufficiently pled delayed discovery is incorrect. (See statute of limitations analysis in breach of contract cause of action in Motion 3.)

TENTATIVE RULING - Fraud
Loan Defendants’ demurrer as to the third cause of action for fraud is sustained without leave to amend as to both Plaintiffs. Plaintiffs were previously granted leave to amend this cause of action as a result of the same defects discussed hereinabove. Plaintiffs did not successfully do so, and do not appear to be able to cure the defects in this cause of action.

Fourth Cause of Action – Rescission/Cancellation
Plaintiff’s fourth cause of action alleges the same allegations for recission/cancellation as it does for wrongful foreclosure. Further, Plaintiff alleges that the elements for rescission/cancellation are the same for wrongful foreclosure. Therefore, for this cause of action, the Court adopts here its analysis and ruling as to the second cause of action in Motion 1.

TENTATIVE RULING – Rescission/Cancellation

Loan Defendants’ demurrer as to Tracy’s recission/cancellation cause of action is sustained with 20 day’s leave to amend granted.

Loan Defendants’ demurrer as to Henry’s recission/cancellation cause of action is sustained without leave to amend.

Fifth Cause of Action – Declaratory Relief
Declaratory Relief
To state a declaratory relief claim, the plaintiff must allege a proper subject of declaratory relief and an actual controversy involving justiciable questions relating to the party’s rights or obligations. (See Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.) The validity of a contract is a proper subject of declaratory relief. (See Code Civ. Proc., § 1060.)

While declaratory relief operates prospectively, a proper action for declaratory relief can redress past wrongs. (See Travers v. Louden (1967) 254 Cal.App.2d 926, 931.)

Under CCP §1060:

Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.

Under CCP §1061, “The court may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.”

Loan Defendants argue that the declaratory relief cause of action should be sustained without leave to amend because Plaintiffs cannot identify any valid substantive claims.

TENTATIVE RULING- Declaratory Relief
Loan Defendants’ demurrer to the declaratory relief cause of action is overruled as to Tracy since she was given leave to amend for her wrongful foreclosure/rescission causes of action.

Loan Defendants’ demurrer to the declaratory relief cause of action is sustained without leave to amend as to Henry.

REQUEST FOR JUDICIAL NOTICE
The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords 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,” and “[f]acts 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.” (Evid. Code § 452, subds. (c), (d), and (h).)

Evidence Code Section 452 provides that judicial notice may be taken for 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.” (Cal. Evid. Code § 452(h).) Further, “a court may take judicial notice of [recorded documents and] the fact of a document's recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document's legally operative language, assuming there is no genuine dispute regarding the document's authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 745-755.)

The Court GRANTS all Loan Defendants’ requests for judicial notice which are comprised of 25 Exhibits.

MOTION 2

Moving Party: Defendant, Bank of America (“BoA”)

Responding Party: Plaintiff, Tracey Baumert

(Oppo and Reply Submitted)

Moving Papers: Memo; Request for Judicial Notice

Opposition Papers: Opposition

Reply Papers: Reply Brief

Proof of Service Timely Filed (CRC Rule 3.1300): ok
16/21 Court Days Lapsed (CCP 1005(b)): ok
Proper Address: ok

RELIEF REQUESTED
Defendant, Bank of America, N.A. demurs as follows:

1. The First Cause of Action fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)).

2. The Second Cause of Action fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)).

3. The Third Cause of Action fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)).

4. The Fourth Cause of Action fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)).

5. The Fifth Cause of Action fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)).

PROCEDURAL

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. (Id., §430.41(a)(4).)

Counsel for BoA alleged he met and conferred with Plaintiff. (Campbell Decl. ¶3.)

ANALYSIS

Preliminary Matter
In BoA’s Reply, BoA notes that it propounded requests for admission to both Plaintiffs in May of 2022 and that eventually the requests for admissions were deemed admitted as to Henry Baumert. As to Tracey, she served responses the day before the hearing in which she admitted the requests for admissions. BoA submitted Exhibits 1-4 to support this in their Reply.

While BoA cites case law that the Court can take judicial notice of admissions contained in discovery responses, BoA does not cite case law that the Court can take notice of admissions based on evidence that is raised for the first time in Reply. Here, BoA submitted these judicial admissions for the first time in reply and these exhibits were not in the initial request for judicial notice in the moving papers. Of course, this Court ruled on the admissions at issue on a discovery motion after these moving papers were filed and prior to the Reply.

“Although, the inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case, the trial court’s consideration of such additional evidence is not an abuse of discretion so long as the party opposing the motion for summary judgment has notice and an opportunity to respond to the new material.” (Plenger v. Alza Corp. (1992) 11 Cal.App.4th 349, 363 ft. 8. Citing Weiss v. Chevron, U.S.A., Inc. (1988) 204 Cal.App.3d 1094, 1098.)

“Neither the Lawrences nor the attorneys cite any anti-SLAPP cases in which, for the first time in reply, the moving parties introduced entirely new evidence. They cite cases in which courts have considered evidence in reply, but such evidence was supplemental to evidence submitted in the moving papers, not brand new. In Wong v. Jing (2010) 189 Cal.App.4th 1354, 117 Cal.Rptr.3d 747 (cited by defendants for the first time in their reply briefs), the court, in dicta, suggested that a reply declaration was sufficient to establish a defendant's lack of liability. There was, however, no explicit evidentiary ruling in that case.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537.)

This Court previously ruled on the Plaintiffs’ admissions, deeming Henry’s admissions and accepting Tracey’s late admissions. Plaintiffs were obviously aware of their own admissions, the Court’s ruling, and that thes motions were pending.

First Cause of Action – Breach of Contract
Plaintiff alleges she entered into a written contract with Defendants in May of 2009 to allow for a loan modification. Plaintiffs further allege this contract was breached when Plaintiffs were denied the loan modification.

BoA argues that the breach of contract cause of action is barred as a matter of law based on the statute of limitations.

The periods prescribed for the commencement of actions other than for the recovery of real property, are as follows: Within four years: An action upon any contract, obligation or liability founded upon an instrument in writing, except as provided in Section 336a; provided, that the time within which any action for a money judgment for the balance due upon an obligation for the payment of which a deed of trust or mortgage with power of sale upon real property or any interest therein was given as security, following the exercise of the power of sale in such deed of trust or mortgage, may be brought shall not extend beyond three months after the time of sale under such deed of trust or mortgage. (CCP §335; 337(a).)

The general rule for defining the accrual of a cause of action sets the date as the time when, under the substantive law, the wrongful act is done, or the wrongful result occurs, and the consequent liability arises. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) An exception to the general rule for defining the accrual of a cause of action is the discovery rule. (Id.) It postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Id.) The plaintiff discovers the cause of action when he at least suspects a factual basis, as opposed to a legal theory, for its elements, even if he lacks knowledge thereof, when, simply put, he at least suspects that someone has done something wrong to him. (Id.) In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (Fox v. Ethicon EndoSurgery, Inc. (2005) 35 Cal.4th 797, 808.)

Here, Plaintiffs’ breach of contract cause of action is barred against BoA based on the statute of limitations. In Paragraph 70 of the verified SAC Plaintiff admits that in August of 2010 Plaintiff knew the facts giving rise to a cause of action for breach of contract, and the initial complaint in this cause of action was not filed until 01/05/2022. Although in Paragraphs 33 and 58 of the SAC Plaintiff alleges she did not become aware of the issues in this complaint until near the end of 2021 when speaking with an attorney, this is of no moment. “The statute of limitations is not tolled by belated discovery of legal theories, as distinguished from belated discovery of facts.” (McGee v. Weinberg (1979) 97 Cal.App.3d 798, 803.)

TENTATIVE RULING – Breach of Contract
BoA’s demurrer as to the first cause of action for breach of contract is sustained without leave to amend as to both Plaintiffs.

Second Cause of Action – Wrongful Foreclosure
Plaintiffs allege as follows, “The allegations herein meet each of the requisite elements as follows: Defendant Bank of America set in motion and caused an illegal and fraudulent sale of the Property by: (1) Refusing to issue Plaintiff the promised permanent loan modification as it was contractually obligate to do; (2) issuing to Plaintiff a predatory loan which was pre-destined for foreclosure from inception (as successor in interest to COUNTRYWIDE); and (3) by refusing Plaintiff’s tender to bring the loan current in violation of Civil Code §2924(c).” (SAC ¶77.)

In Opposition, Plaintiff, Tracey Baumert states, “Plaintiff acknowledges that the wrongful foreclosure and related breach of contract in wrongfully foreclosing were committed by the HSBC Defendants, not Bank of America.” (Tracey Baumert Opp. p.6.)

TENTATIVE RULING – Wrongful Foreclosure
BoA’s demurrer as to the second cause of action for wrongful foreclosure as to Tracy is sustained without leave to amend based on the Opposition submitted by Tracy.

BoA’s demurrer as to the second cause of action for wrongful foreclosure as to Henry is sustained without leave to amend.

Third Cause of Action – Fraud

Plaintiffs allege, “Defendant Bank of America made intentional false representations to Plaintiff regarding: (1) Bank of America’s promise to provide Plaintiff with a permanent loan modification when Bank of America had no intention of doing so; (2) representing to Plaintiff that it did not have to accept the tender of her money to bring the loan current when, in fact, the law required that the money be accepted up to 5 days before the sale.” (SAC ¶84.)

Here, Plaintiffs do not allege intent to defraud and justifiable reliance. Further, Plaintiffs did not allege how, when, by what means the representations were made, who made the representations and their authority to speak, and where.

Further, Plaintiff’s argument that she has sufficiently pled delayed discovery is unavailing. (See statute of limitations analysis in breach of contract cause of action in Motion 2.)

TENTATIVE RULING - Fraud
BoA’s demurrer as to the third cause of action for fraud is sustained without leave to amend as to both plaintiffs. Plaintiffs were previously granted leave to amend this cause of action because of the same defects and Plaintiffs failed to cure these defects, evincing that they are unable to do so.

Fourth Cause of Action – Rescission/Cancellation
Plaintiff’s fourth cause of action simply alleges, “In addition, Plaintiff made multiple attempts to tender the amount needed to reinstate her loan to both Bank of America and HSBC but both refused to accept the tender.” (SAC ¶92.)

Further, Plaintiff alleges that the elements for rescission/cancellation are the same for wrongful foreclosure. Therefore, for this cause of action, the Court adopts its analysis and ruling as to the second cause of action in Motion 2.

TENTATIVE RULING – Rescission/Cancellation

BoA’s demurrer as to the fourth cause of action for rescission/cancellation as to Tracy is sustained without leave to amend based on the Opposition submitted by Tracy.

BoA’s demurrer as to the fourth cause of action for wrongful foreclosure as to Henry is sustained without leave to amend.

Fifth Cause of Action – Declaratory Relief

Moving party correctly notes that the declaratory relief cause of action fails because it is wholly derivative of the other non-viable causes of action.

Tentative Ruling Declaratory Relief
BoA’s demurrer to the fifth cause of action is sustained without leave to amend as to both plaintiffs.

Request For Judicial Notice

BoA requests 11 Exhibits for judicial notice and each of those requests are GRANTED.

MOTION 3

Moving Party: Defendants, HSBC Bank USA National Association, as Trustee for the Certificate Holders of Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA3 (“HSBC”); and National Default Servicing Corporation (“National”) [collectively “Loan Defendants”]

Responding Party: No Opposition

Moving Papers: Memo; Dailey Declaration; Request for Judicial Notice

Opposition Papers: No Opposition

Reply Papers: Notice of Non-Opposition

Proof of Service Timely Filed (CRC Rule 3.1300): ok
16/21 Court Days Lapsed (CCP 1005(b)): ok
Proper Address: ok

RELIEF REQUESTED
Defendants, HSBC Bank USA National Association, as Trustee for the Certificate Holders of Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-OA3 (“HSBC”); and National Default Servicing Corporation (“National”) [collectively “Loan Defendants”] move to strike the following language from the SAC pursuant to CCP §435 and §436:

1. The entire First Cause of Action for “Breach of Contract,” appearing at page 14, line 1 to page 15, line 16.

2. The words “and punitive,” appearing at page 22, paragraph 1 of the Prayer for the Third Cause of Action.

3. The words “Punitive Damages in the amount the Court deems necessary to punish Defendants for fraudulent conduct,” appearing at page 22, paragraph 6 of the Prayer for the Third Cause of Action.

PROCEDURAL

Meet and Confer

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).)

Loan Defendants’ counsel, Dailey, alleged he met and conferred with plaintiffs. (Dailey Decl. ¶2.)

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”].)

ANLAYSIS

Striking the First Cause of Action for Breach of Contract
As a preliminary matter, Defendants note that they wish to strike the entire first cause of action for breach of contract appearing at page 14, line 1 to page 15, line 16. The Court notes that this citation is incorrect, because the breach of contract cause of action begins on the SAC on page 13, line 5, and ends on page 14 line 16. Although Defendants did not properly reference the page and lines, the Court finds that Defendants sufficiently identified what it intended to strike by stating it was striking “the entire first cause of action for breach of contract.”

Loan Defendants argue the entire first cause of action should be stricken because when the Court sustained Loan Defendants’ demurrer to the FAC on July 1, 2022, Plaintiffs did not request, nor did they receive permission to plead the new cause of action for breach of contract.

The Court finds this argument persuasive.

“It is the rule that when a trial court sustains a demurrer with leave to amend, the scope of the grant of leave is ordinarily a limited one. It gives the pleader an opportunity to cure the defects in the particular causes of action to which the demurrer was sustained, but that is all. [Citation omitted.] The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend. [Citation omitted.]” (Community Water Coalition v. Santa Cruz County Local Agency Formation Com. (2011) 200 Cal.App.4th 1317, 1329.)

TENTATIVE RULING
Motion to strike the entire first cause of action for breach of contract is GRANTED.

Punitive Damages
As a preliminary matter, Defendants note they wish to strike the words “and punitive” appearing at page 22, paragraph 1 of the Prayer for the Third Cause of action. The Court notes that “and punitive” in the prayer for the third cause of action is located at page 21, paragraph 1. Since Loan Defendants sufficiently identified what they wished to strike, the Court does not find this defect fatal.

Further, Defendants note they wish to strike the words, “Punitive Damages in the amount the Court deems necessary to punish Defendants for fraudulent conduct,” appearing at page 22, paragraph 6 of the Prayer for the third cause of action. The Court notes that “Punitive damages in the amount the Court deems necessary to punish Defendants for fraudulent conduct,” is located at page 21, paragraph 6, in the prayer of the third cause of action. Since Loan Defendants sufficiently identified what they wished to strike, the Court does not find this defect fatal.

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).)

Since the Court sustained the Defendants’ demurrers as to the third cause of action for fraud as to all Plaintiffs, the Court will strike the requested portions on punitive damages.

TENTATIVE RULING
Motion to strike “and punitive” appearing in the prayer for the third cause of action is GRANTED.

Motion to strike, “Punitive Damages in the amount the Court deems necessary to punish Defendants for fraudulent conduct,” appearing in the prayer for the third cause of action is GRANTED.

Request for Judicial Notice

The Court GRANTS all Loan Defendants’ requests for judicial notice which is comprised of 25 Exhibits.