Judge Gary Y. Tanaka, Case YC073016 2023-03-14 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Tuesday, March 14, 2023

Department B Calendar No. 4

2. Coastline Recovery Services, Inc.’s Motion to Strike Portions of First Amended Complaint

Coastline Recovery Services, Inc.’s Demurrer to First Amended Complaint is sustained with 20 days leave to amend.

Coastline Recovery Services, Inc.’s Motion to Strike Portions of First Amended Complaint is moot.

Plaintiff filed his Complaint on July 17, 2018. Plaintiff alleges the following facts. In 2016, Plaintiff agreed to lease from Xchange Leasing, LLC (“Xchange”) a 2016 Volkswagen Jetta. Under the terms of the lease, Plaintiff made the lease payments on the vehicle through Defendant’s withdrawal of funds that Plaintiff earned, while driving the vehicle for Uber. In 2018, Xchange transferred their interest in the lease to a new entity, Defendant Fair Financial Corp. (“Fair”). In January 2018, Defendant Xchange notified Plaintiff that he failed to make the weekly lease installment payments and that his account for the lease of the vehicle was overdue. Upon receiving this notice, Plaintiff paid the overdue amount to bring his account to balance. Although Plaintiff paid the overdue balance, Defendant Fair hired Defendant Coastline Recovery Services, Inc. (“Coastline”) to repossess the vehicle. Plaintiff alleges that personal items belonging to Plaintiff were stolen from him. Plaintiff set forth the following causes of action: 1. Violation of Rosenthal Fair Debt Collection Practices Act; 2. Conversion; 3. Trespass to Chattels; 4. Violation of California Commercial Code Section 9609; 5. Violation of False Advertising Act (Cal. Business & Professions Code §§ 17500 et seq.); 6. Violation of Unfair Competition Law (Cal. Business & Professions Code §§ 17200 et seq.).

On January 14, 2019, Plaintiff filed a First Amended Complaint which alleged the above causes of action as well as a seventh cause of action: 7. Violation of the Consumer Legal Remedies Act (Cal. Civ. Code §§1770). Coastline Recovery Services, Inc. is named as a Defendant in the first through fourth and sixth causes of action.

Defendants Fair and Xchange (“settling Defendants”) proceeded to arbitration with Plaintiff. Coastline Recovery Services did not participate in arbitration. On or about June 18, 2021, Plaintiff and the settling Defendants entered into a settlement agreement.

Defendant filed meet and confer declarations in sufficient compliance with both CCP § 430.41 and CCP § 435.5. (Decls., Karen E. Edelman, Esq.).

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)

Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.) Under Code Civil Procedure § 430.10(f), a demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Defendant demurs to Plaintiff’s First Amended Complaint and the first through fourth and sixth causes of action pursuant to CCP § 430.10(e) on the grounds that the causes of action fail to state facts sufficient to constitute a cause of action. Defendant also demurs to pursuant to CCP § 430.10(f) on the grounds that the causes of action are uncertain.

First Cause of Action for Violation of Rosenthal Fair Debt Collection Practices Act

Defendant’s demurrer to the first cause of action is sustained with 20 days leave to amend. Plaintiff fails to state states facts sufficient to constitute the cause of action.

“[T]he FDCPA prohibits debt collectors from making false or misleading representations and from engaging in various abusive and unfair practices. The FDCPA is a strict liability statute that makes debt collectors liable for violations that are not knowing or intentional.” Donohue v. Quick Collect, Inc. (9th Cir. 2010) 592 F.3d 1027, 1030 (internal citations and quotations omitted). “In general, [t]here are four elements to an FDCPA cause of action: (1) the plaintiff is a ‘consumer’ under 15 U.S.C. § 1692a(3); (2) the debt arises out of a transaction entered into for personal purposes; (3) the defendant is a ‘debt collector’ under 15 U.S.C. § 1692a(6); and (4) the defendant violated one of the provisions contained in 15 U.S.C. §§ 1692a-1692o.” Brooks v. Leon's Quality Adjusters, Inc. (E.D. Cal., Aug. 30, 2016, No. 1:15-CV-000965-JLT) 2016 WL 4539967, at *10 (internal citations and quotations omitted).

Plaintiff alleges that “Defendant and each of their conduct violated the RFDCPA by repossessing Plaintiff’s Vehicle after committing a breach of the peace during the repossession. See (§ 1692(f)(6)).” 15 U.S.C.A. § 1692f(6) states: “A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if-- (A) there is no present right to possession of the property claimed as collateral through an enforceable security interest; (B) there is no present intention to take possession of the property; or (C) the property is exempt by law from such dispossession or disablement.”

First, “courts have determined repossession companies, such as [Defendant], are not generally “debt collectors” subject to liability under the FDCPA.” Brooks v. Leon's Quality Adjusters, Inc. (E.D. Cal., Aug. 30, 2016, No. 1:15-CV-000965-JLT) 2016 WL 4539967, at *11. Here, Plaintiff has failed to plead any facts to demonstrate that demurring Defendant, which is also a repossession company, qualifies as a “debt collector” for purposes of the RFDCPA. Second, Plaintiff’s own allegations state that demurring Defendant herein was only acting at the direct instruction of co-Defendants Fair Financial Corp. and Xchange Leasing, LLC.

Therefore, the demurrer to the first cause of action is sustained with 20 days leave to amend.

The demurrer to the second cause of action is sustained with 20 days leave to amend. Plaintiff fails to state facts sufficient facts to constitute a cause of action.

Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages....” Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551. Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved. PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395. To state a cause of action for conversion against a repossession company, Plaintiff must allege facts to demonstrate a breach of peace such as “force or threats of force” used to secure possession of the automobile. Henderson v. Security Nat. Bank (1977) 72 Cal.App.3d 764, 770.

Here, Plaintiff has failed to state facts that Defendant committed the repossession through breach of the peace or through acts of force or threats of force. Plaintiff has only set forth conclusions without the requisite supporting facts.

The demurrer to the second cause of action is sustained with 20 days leave to amend.

The demurrer to the third cause of action is sustained with 20 days leave to amend. Plaintiff fails to state facts sufficient to constitute a cause of action.

“[T]he tort of trespass to chattels allows recovery for interferences with possession of personal property not sufficiently important to be classed as conversion, and so to compel the defendant to pay the full value of the thing with which he has interfered. Though not amounting to conversion, the defendant's interference must, to be actionable, have caused some injury to the chattel or to the plaintiff's rights in it. Under California law, trespass to chattels lies where an intentional interference with the possession of personal property has proximately caused injury. In cases of interference with possession of personal property not amounting to conversion, the owner has a cause of action for trespass or case, and may recover only the actual damages suffered by reason of the impairment of the property or the loss of its use. In modern American law generally, [t]respass remains as an occasional remedy for minor interferences, resulting in some damage, but not sufficiently serious or sufficiently important to amount to the greater tort’ of conversion.” Jamgotchian v. Slender (2009) 170 Cal.App.4th 1384, 1400–1401 (internal citations and quotations omitted).

Here, as to the actual vehicle itself, Plaintiff has failed to allege facts demonstrating an intentional interference with possession of personal property and proximate causation of damages. Coastline is alleged to have acted to repossess the vehicle solely upon the instructions of co-Defendants Fair and Xchange. In addition, as to the alleged items within the vehicle, Plaintiff attempts to allege that Defendant has intentionally interfered with his possessory rights and that Defendant caused Plaintiff damages. However, the pertinent allegations directed against demurring Defendant are made on information and belief. “[P]laintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true and thus a pleading made on information and belief is insufficient if it merely assert[s] the facts so alleged without alleging such information that lead[s] [the plaintiff] to believe that the allegations are true.” Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 1158–1159 (internal citations and quotations are omitted; emphasis in original.) Here, Plaintiff has failed to allege the supporting facts by which he believes that the allegations made on information and belief are true.

The demurrer to the third cause of action is sustained with 20 days leave to amend.

Fourth Cause of Action for Violation of California Commercial Code Section 9609

The demurrer to the fourth cause of action is sustained with 20 days leave to amend. Plaintiff fails to state facts sufficient to constitute a cause of action.

“(a) After default, a secured party may do both of the following: (1) Take possession of the collateral. (2) Without removal, render equipment unusable and dispose of collateral on a debtor's premises under Section 9610.

(b) A secured party may proceed under subdivision (a) in either of the following ways: (1) Pursuant to judicial process. (2) Without judicial process, if it proceeds without breach of the peace.

(c) If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.”

By its very terms, Commercial Code § 9609 only applies against a “secured party.” Plaintiff has failed to allege facts to show that demurring Defendant, a towing company, is a “secured party,” for purposes of liability under Comm. Code § 9609.

The demurrer to the fourth cause of action is sustained with 20 days leave to amend.

Sixth Cause of Action for Violation of Unfair Competition Law (Cal. Business & Professions Code §§ 17200 et seq.)

Defendant’s demurrer to the sixth cause of action is sustained with 20 days leave to amend. Plaintiff fails to state facts sufficient to constitute a cause of action.

“California Business and Professions Code Sections 17000, et seq., and 17200, et seq., states [sic] that unfair competition shall mean and include unlawful, unfair or fraudulent business practices.” Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 618–19. “By proscribing ‘any unlawful’ business act or practice, the UCL “borrows” rules set out in other laws and makes violations of those rules independently actionable. [Citation.] However, a practice may violate the UCL even if it is not prohibited by another statute.” Los Angeles Memorial Coliseum Com. v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 835. “The unfair competition law is independent of the Unfair Practices Act and other laws. Its remedies are “cumulative ... to the remedies or penalties available under all other laws of this state” (§ 17205), but its sanctions are less severe than those of the Unfair Practices Act. Prevailing plaintiffs are generally limited to injunctive relief and restitution. (§ 17203; see ABC Internat. Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1268 [61 Cal.Rptr.2d 112, 931 P.2d 290].) Plaintiffs may not receive damages, much less treble damages, or attorney fees.” Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179.

Based on the underlying allegations noted above, Plaintiff has failed to allege sufficient facts to demonstrate unlawful, fraudulent, and/or unfair business practices on the part of demurring Defendant.

Defendant’s demurrer to the sixth cause of action is sustained with 20 days leave to amend.

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. CCP § 436(a). The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. CCP § 436(b). The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. CCP § 436. The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. CCP § 437.

Defendant’s motion to strike is deemed moot upon the sustaining of the demurrer to each cause of action directed against demurring/moving Defendant.