Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

Plaintiff Edgar Meinhardt alleges Defendants1 misrepresented the terms of a home loan, including the amount of the loan, and then wrongfully foreclosed on his home.  The property at issue is located at 10936 Pacific View Drive, Malibu, California in Ventura County (the “Property”).     

Plaintiff is the sole managing member of Corp. Realty USA, LLC (“CRU”), the trustee and borrower identified on the Deed of Trust and Note for the Property.  (First Amended Complaint (“FAC”) ¶2.) 

Plaintiff sought to refinance an existing loan known as the “Cardenas Loan,” while maintaining his first lien loan with Axos Bank.  (Id. ¶¶14-16, 20.)  Defendants requested that Plaintiff refinance both loans in order for Defendants’ loan to take the first lien position.  (Id. ¶¶ 20-22.)  Defendants’ loan was for five million dollars.  (Id. ¶20.)  The loan was to be used to payoff both of the existing loans, to remodel the Property, and for service payment on the new loan for the first six months while the Property was undergoing remodeling.  (Id. ¶34.) 

As a condition of the loan, Defendants required Plaintiff to resolve the Cardenas Loan which was in litigation.  To comply with Defendants’ demand, Plaintiff negotiated a settlement which required a payoff of the Cardenas Loan by August 31, 2019.  (Id. ¶¶ 18, 34.)  Failure to comply with the deadline would increase the amounts due.   

Defendants said the loan would be split between two separate amounts, one for $3.5 million and a second for $1.5 million, assuring Plaintiff the second loan would be done quickly.  This was critical and essential to Plaintiff as the second loan included the funds to service the monthly payments while the Property was being remodeled.  (Id. ¶ 40.)   

Defendants, however, never funded the second loan.  (Id. ¶¶ 55-58, 70-72.)  Plaintiff had to secure new financing for the Property, and Plaintiff and CRU issued a letter of rescission and included an offer of tender.  Defendants ignored the recission and the tender.  (Id. ¶¶ 75-78.) 

Defendants started foreclosure proceedings, and Plaintiff filed this lawsuit.  A second offer of tender was made, which would have paid off the loan.  Mr. Hsu (owner of Tsasu and servicing agent for Sunny Acre) asked for proof of tender, and Plaintiff sent proof on August 12, 2020, further stating that he would connect Hsu with the lender for proof of funds.  Hsu stated he would discuss the matter with his attorney and get back to Plaintiff that afternoon.  Hsu sent a second series of emails stating the attorney was unavailable until the next day, but Sunny Acre/TSASU would work with Plaintiff moving forward with the tender.  Defendants, however, completed the trustee sale, instead of working with Plaintiff on the tender.  (Id. ¶¶ 75-78.) 

The operative complaint alleges sixteen claims for (1) violation of Civil Code section 2923.5, (2) wrongful foreclosure, (3) to set aside foreclosure sale, (4) violation of Civil Code section 2924.12, (5) violation of the Real Estate Settlement Procedures Act (RESPA), (6) rescission and damages under the Truth in Lending Act (TILA); (7) violation of the Home Ownership and Equity Protection Act (HOEPA), (8) fraud and deceit, (9) negligent misrepresentation, (10) negligence, (11) breach of contract, (12) quiet title, (13) cancellation of instruments, (14) accounting, (15) unfair competition in violation of Bus. & Prof. Code section 17200, and (16) declaratory relief. 

The complaint was originally filed by Plaintiff and CRU.  Plaintiff appeared in pro per, and CRU had no counsel.  The Court dismissed CRU as it was not represented by counsel.   

This hearing is on Moving Defendants’ motion for judgment on the pleadings.  Moving Defendants argue that the only “real party in interest” with legal standing to assert any claims is the borrower and owner of the Property, CRU, but CRU has been dismissed from the case, and Plaintiff Meinhardt does not have standing to prosecute CRU’s claims.       

LEGAL STANDARD 

A defendant may move for judgment on the pleadings when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.”  (Code Civ. Proc. §438(b)(1) and (c)(1)(B)(ii).)  “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself. [Citation.]”  (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 877.)  

 “A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.  Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.”  (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999 (citations omitted).)   

The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law.  (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322 (citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216).)   

Like a demurrer, a motion for judgment on the pleadings may be addressed to the pleading as a whole or to separate counts.  If addressed to the pleading as a whole, the motion must be denied if even one count is good.  (Lora v. Garland (1946) 27 Cal.2d 840, 850; Heredia v. Farmers Ins. Exch. (1991) 228 Cal.App.3d 1345, 1358.)  If addressed to separate counts, the motion may be granted as to some counts and denied as to others.  (Steiner v. Rowley (1950) 35 Cal.2d 713, 720; Heredia, 228 Cal.App.3d at 1358.) 

MEET AND CONFER 

A party moving for¿judgment on the pleadings must¿meet and confer in person or telephonically with the party who filed the pleading that is subject to the motion to determine if an agreement can be reached regarding the claims raised in the motion. (Code Civ. Proc., § 439, subd. (a).) The moving party must file a declaration detailing the¿meet and confer efforts.  (Code Civ. Proc. § 439, subd. (a)(3).)  Defendants have failed to file the required declaration.  Notwithstanding, “[a] determination by the court that the meet and confer process was insufficient shall not be grounds to grant¿or deny the motion for judgment on the pleadings.”  (Code Civ. Proc. § 439, subd. (a)(4).) 

REQUEST FOR JUDICIAL NOTICE 

Plaintiff asks the Court to take judicial notice of (1) the federal court order remanding the federal claims to state court, (2) the Court’s September 2023 Order dismissing CRU, (3) Plaintiff’s motion for joinder scheduled to be heard concurrently with the motion for judgment on the pleadings, and (4) Plaintiff’s declaration in support of the motion to join.  The Court grants the request pursuant to Cal. Evid. Code §§ 452(d) and 453.   

DISCUSSION  

Defendants’ motion for judgment on the pleadings does not specify any causes of action that are the basis for the motion, and therefore, it is directed to the entire complaint.  Thus, the motion must be denied if there is any valid claim in the complaint.  (Heredia, 228 Cal.App.3d at 1358.) 

The Court concludes that Plaintiff has standing to assert his fraud claim.  The alleged fraud was directed at Meinhardt, who as a result of the purported misrepresentations regarding the “second loan”, did not seek alternative financing for the Property.     

The Court also concludes Plaintiff has standing to assert derivative claims on behalf of CRU.  California law allows for derivative and direct claims by members of an LLC.  (Schrage v. Schrage (2021) 69 Cal.App.5th 126, 150-151.)  It is well settled law that one who has suffered injury both as the owner of the corporate entity and in an individual capacity is entitled to pursue remedies in both capacities.  (Denevi v. LGCC, LLC (2004) 121 Cal.App.4th 1211, 1221.)  Here, Plaintiff may maintain a derivative suit alleging harms to CRU.  However, to assert a derivative claim, Plaintiff must join CRU as an indispensable party (which is the subject of a separate motion and order).  (Schrage, 69 Cal.App.5th at 149.)   

In sum, because at least some of Plaintiff’s claims are valid, Defendants’ motion for judgment on the pleadings to the entire complaint is denied.   

CONCLUSION 

For the foregoing reasons, the Court DENIES Defendants’ motion for judgment on the pleadings.   

DATED: March 19, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court