Judge Donald F. Gaffney, Case Ross v. CIT Bank 2023-07-26 Tentative Ruling

Judge: Donald F. Gaffney, Case: Ross v. CIT Bank, Date: 2023-07-26 Tentative Ruling

TENTATIVE RULING:

Demurrer to First Amended Complaint.

For the reasons set forth below, Defendant CIT Bank, N.A.’s (“Defendant” or “CIT”) demurrer to the First Amended Complaint (“FAC”) is OVERRULED as to the 1^st cause of action and SUSTAINED, with 30-days leave to amend, as to the 2^nd cause of action.

Standards for Demurrer

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.) Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

Although courts should take a liberal view of inartfully drawn complaints, (see Civil Proc. Code, § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought, (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413). Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Civil Proc. Code, § 425.10, subd. (a).)

Whether Defendant Is Precluded from Demurring to the 1^st and 2^nd Causes of Action.

Plaintiff contends that Defendant is precluded from demurring to the 1^st and 2^nd causes of action for violation of the Rosenthal Fair Debt Collections Act (“RFDCPA”) and violation of Business and Professions Code Section 17200 because Defendant previously demurred to these causes of action on other grounds and the Court overruled same on February 8, 2022.

Here, although Defendant demurred to these causes of action as asserted in the original Complaint and the Court overruled same, Defendant is not precluded from demurring to these causes of action on grounds not previously asserted. “A party is within its rights to successively demur to a cause of action in an amended pleading notwithstanding a prior unsuccessful demurrer to that same cause of action.” (Carlton v. Dr. Pepper Snapple Grp., Inc. (2014) 228 Cal.App.4th 1200, 1211.) Accordingly, the Court finds Defendant’s demurrer is not barred. (See Id. [“Given the foregoing reasoning and rules from this court and others, the trial court could properly consider the demurrer to the entire SAC. When Carlton filed the SAC, he exposed himself to the possibility of a demurrer being filed and sustained to the entire SAC. Accordingly, we conclude the trial court did not err by sustaining the demurrer to the breach of contract cause of action.”])

First Cause of Action for Violation of the Rosenthal Fair Debt Collections Practices Act (“RFDCPA”).

Defendant contends Plaintiff’s RFDCPA cause of action is barred by the one-year statute of limitations applicable to such claims because Plaintiff’s allegations show that its claim is not timely. Specifically, Defendant contends that Plaintiff alleges that its January 15, 2019, check was rejected by OneWest (a division of CIT) and that allegations based on conduct that occurred in 2019 cannot support a RFDCPA claim due to the one-year statute of limitations; that the FAC also alleges that Plaintiff sent letters on February 14, 2020, and April 15, 2020, informing Defendant of their breach of the Plan but that these allegations are also outside the one-year statute of limitations; and that the allegations in paragraph 20 that Plaintiffs demanded a payoff statement and that Defendants provided an incorrect statement is not alleged against CIT specifically, but rather as to “LoanCare”; and that any alleged wrongdoing in 2020 is also barred by the one-year statute of limitations.

Civil Code section 1788.30(f) states: “Any action under this section may be brought in any appropriate court of competent jurisdiction in an individual capacity only, within one year from the date of the occurrence of the violation.”

The continuing violation doctrine, however, applies to RFDCPA causes of action and “permits recovery ‘for actions that take place outside the limitations period if these actions are sufficiently linked to unlawful conduct within the limitations period.’” (Komarova v. Nat'l Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 343.) “The key is whether the conduct complained of constitutes a continuing pattern and course of conduct as opposed to unrelated discrete acts. If there is a pattern, then the suit is timely if ‘the action is filed within one year of the most recent [violation]’ [citation], and the entire course of conduct is at issue.” (Id.)

Here, Plaintiff alleges Defendants violated the RFDCPA by: “(a) making false representations concerning the character, amount, or legal status of any debt in asserting the alleged debt to be owed by Plaintiffs; (b) making false representations or using deceptive means to collect or attempt to collect on any debt; and (c) using unfair or unconscionable means to collect or attempt to collect any debt, including collecting amounts which were not expressly authorized by the agreement creating the debt or permitted by law”; that Defendant failed to cash Plaintiff’s January 1, 2019, payment; that Defendant was informed of its breaches of the bankruptcy plan on February 14, 2020, and April 15, 2020; that Plaintiffs demanded a payoff statement from “Defendants” which was incorrect ; that “Defendants” never responded to the December 15, 2020, letter sent by Mr. Jones on Plaintiffs behalf; that “Defendants failure to do a proper accounting of the loan and respond with a corrected payoff statement had cost Plaintiffs several opportunities to refinance the loan”; that on August 24, 2021, Plaintiffs sent “Defendants” a letter informing them of their mistakes and identifying the missing payments which they failed to credit them and that “Defendants” never responded to Plaintiffs letter or provided an updated payoff statement; that “Defendants continued to mishandle their loan”; and that from 2019 to 2022, despite repeated communications from Plaintiffs and repeated proof of payments made, Defendants commenced default and foreclosure and that Plaintiffs continued to send letters and make phone calls to “Defendants to no avail.” (See FAC, ¶¶ 13-15, 19, 23, 25, 28, 33, 35, and 38.)

These allegations establish a continuing course of conduct starting in 2019 and through 2022. (See supra.) As such, the Court finds that Plaintiffs’ cause of action is not barred by the one-year statute of limitations.

Second Cause of Action for Violations of Business & Professions Code section 17200.

Defendant demurs to the violation of Business & Professions Code section 17200 cause of action on the grounds it fails because the underlying cause of action for violation of RFDCPA is time-barred. However, as set forth above, the 1^st cause of action is not bared by the one-year statute of limitations. As such, the Court overrules the demur as to these grounds.

Defendant further demurs on the grounds Plaintiff’s claim is improper because the request for injunctive relief is not being used to remedy a public wrong and Plaintiff has failed to allege any facts demonstrating that there is a threat of repeat injury in the absence of same.

Here, it is undisputed that Plaintiff’s unfair business practices cause of action is based on the same conduct as the RFDCPA claim. Plaintiff seeks an “injunction requiring Defendants to immediately cease such acts of unlawful, unfair and fraudulent business practices”. (See FAC, ¶ 50.) Plaintiff, however, does not allege any facts to support that Defendant’s alleged misconduct is ongoing or likely to reoccur.

“[T]he general rule is that an injunction may not issue unless the alleged misconduct is ongoing or likely to recur...‘Ordinarily, injunctive relief is available to prevent threatened injury and is not a remedy designed to right completed wrongs. [Citations.] ‘It should neither serve as punishment for past acts, nor be exercised in the absence of any evidence establishing the reasonable probability the acts will be repeated in the future.” (Madrid v. Perot Sys. Corp. (2005) 130 Cal.App.4th 440, 464-65.)

The “UCL has not altered the nature of injunctive relief, which requires a threat that the misconduct to be enjoined is likely to be repeated in the future.” (Id.)

Accordingly, the Court sustains the demurrer as to the 2^nd cause of action. Should Plaintiff wish to file an amended complaint addressing the deficiencies addressed in this ruling, Plaintiff shall file and serve an amended complaint no later than 30-days from service of the notice of ruling.

Defendant to give notice.