Judge: Holly J. Fujie, Case: 23STCV24942, Date: 2024-02-13 Tentative Ruling

Case Number: 23STCV24942    Hearing Date: February 13, 2024    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant Wells Fargo Bank, N.A. (“Moving Defendant”)

RESPONDING PARTY: Plaintiffs Council of Housing Professionals (the “Union”), Billye Fairley (“Fairley”), Arturo Aguilar (“Aguilar”), and Karla Alas (“Alas”) (collectively, “Plaintiffs”)[1]

The Court has considered the moving, opposition and reply papers. 

BACKGROUND

Plaintiff’s complaint (the “Complaint”) alleges: (1) violation of the Unruh Act; (2) negligence; and (3) violation of Business and Professions Code section 17200. 

In relevant part, the Complaint alleges: In April 2022, Fairley and Alas visited one of Moving Defendant’s branches to open a new account for the Union.  (Complaint ¶ 12.)  Fairley and Alias were told that they needed to bring a copy of the Union’s lease agreement.  (Complaint ¶ 13.)  When Plaintiffs told Moving Defendant’s representative that they did not have a lease agreement for the Union’s physical address, Moving Defendant’s representative instructed them to use Fairley’s home address.  (See Complaint ¶¶ 14-19.)  On or about August 1, 2022, Plaintiffs learned that the Union’s accounts had been zeroed out because the Union’s physical address had not been confirmed.  (Complaint ¶¶ 20-22.)  Although Moving Defendant eventually refunded the Union’s money, it charged exorbitant fees.  (Complaint ¶ 32.)  Plaintiffs allege that Moving Defendant’s actions were discriminatory and based on the Individual Plaintiffs’ race.  (Complaint ¶ 33.)

Moving Defendant filed a demurrer (the “Demurrer”) on the grounds that the Complaint fails to state sufficient facts to constitute a cause of action.

DISCUSSION

Meet and Confer

The meet and confer requirement has been met.

Legal Standard

A demurrer tests the sufficiency of a complaint as a matter of law.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)  The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.  (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)  With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.  (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) 

Standing

Under California Code of Civil Procedure (“CCP”) section 371, every action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.  (CCP § 371.)  A party who is not the real party in interest lacks standing to sue.  (Redevelopment Agency of San Diego v. San Diego Gas & Electric Co. (2003) 111 Cal.App.4th 912, 920.)  A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law.  (Id. at 920-21.)  A complaint filed by someone other than the real party in interest is subject to general demurrer on the ground that it fails to state a cause of action.  (Id. at 921.) 

Moving Defendant argues that the Individual Plaintiffs lack standing because the wrongdoing alleged in the Complaint only affected the Union.  The Court notes that the Individual Plaintiffs only allege a violation of the Unruh Act.  Under the Unruh Act, standing extends not only to those directly injured but also to those who allege that they were indirectly impacted by the discriminatory practice.  (See Midpeninsula Citizens for Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377, 1388.)  The Court therefore declines to find that the allegations of the Complaint preclude the Individual Plaintiffs from pursuing the Unruh Act claim.

First Cause of Action

The Unruh Act provides: all persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever.  (Civ. Code § 51, subd. (b).)  Unless an Unruh Act claim is based on an Americans with Disabilities Act (“ADA”) violation, the Unruh Act requires a claimant to prove intentional discrimination.  (Martinez v. Cot'n Wash, Inc. (2022) 81 Cal.App.5th 1026, 1036.)  A claimant may not rely on the effects of a facially neutral policy on a particular group or infer solely from such effects a discriminatory intent.  (Id.)  Thus, absent an ADA violation, the Unruh Act requires allegations supporting willful, affirmative misconduct with the specific intent to accomplish discrimination on the basis of a protected trait.  (Id.)

            The Complaint summarily alleges that Moving Defendant’s actions were racially motivated.  The Complaint includes no factual details to support the conclusion that Moving Defendant’s actions were discriminatory.  The Court therefore SUSTAINS the Demurrer to the first cause of action with 20 days leave to amend. 

Second Cause of Action

            The elements of negligence are: (1) duty; (2) breach; (3) causation; and (4) damages. (Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 687.)  A bank has a duty to act with reasonable care in its transactions with its depositors.  (Kurtz-Ahlers, LLC v. Bank of America, N.A. (2020) 48 Cal.App.5th 952, 956.) 

In general, there is no recovery in tort for negligently inflicted “purely economic losses,” meaning financial harm unaccompanied by physical or property damage.  (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922.)  The primary exception to the general rule of no-recovery for negligently inflicted purely economic losses is where the plaintiff and the defendant have a “special relationship.”  (Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 400.)

The Court finds that the Complaint sufficiently alleges a source of Moving Defendant’s duty as the Union’s banking institution.  The Court agrees, however, that as alleged, the Union’s losses are purely economic and there is no special relationship alleged that would override the economic loss rule and allow the Union to recover tort damages.  (See Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922-25.)  The Court therefore SUSTAINS the Demurrer to the second cause of action with 20 days leave to amend.

Third Cause of Action

The UCL prohibits any unlawful, unfair or fraudulent business act or practice.  (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.)  To show a violation of the UCL, a plaintiff must establish: (1) a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury; and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.  (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.)  A business act or practice only needs to meet one of the requirements to be considered unfair competition under the UCL.  (Daro v. Superior Court (2007) 151 Cal.App.4th 1079, 1093.) Statutory causes of action must be alleged with particularity.  (Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795.) 

            The Complaint fails to specify the predicate unlawful, unfair or fraudulent business acts that form the basis of the UCL claim.  (See Complaint ¶¶ The Court therefore SUSTAINS the Demurrer to the third cause of action with 20 days leave to amend. 

Moving party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

  Dated this 13th day of February 2024