Judge Linda S. Marks, Case 2022-01254892 2022-10-31 Tentative Ruling

Judge: Linda S. Marks, Case: 2022-01254892, Date: 2022-10-31 Tentative Ruling

1. Demurrer to Complaint
2. Motion to Strike Portions Of Complaint filed by Swan Creek Ventures, LLC on 6/28/22

Defendant Swan Creek Ventures, LLC (“Swan Creek”) demurs to the Complaint of Plaintiff Frank Stankowski (“Plaintiff”) on the grounds that the first, second, and fifth causes of action fail to state facts sufficient to constitute a cause of action and are uncertain. Swan Creek also moves to strike Plaintiff’s claim for punitive damages.

(1) Demurrer

Conspiracy

The elements of civil conspiracy are: (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages. (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212.)

The Complaint alleges that Plaintiff is the owner of real property located at 22731 La Vina Drive, Mission Viejo, California 92691. (Compl., ¶¶ 17-18.) In February 2020, Plaintiff contracted COVID-19 and fell delinquent on his mortgage. (Compl., ¶ 21.) Notices of default and trustee’s sale were recorded against the property. (Compl., ¶¶ 22-23.) A man named Marco Litzke from the HOAP Foundation contacted Plaintiff and represented that his company could take Plaintiff out of foreclosure via a bridge loan. (Compl., ¶¶ 26-28.) Plaintiff alleges he was never provided any disclosures of the loan he was receiving, was promised that the HOAP Foundation would seek out a loan modification which was never done, and that Litzke coached him to lie about using the property as rental property. (Compl., ¶¶ 30-34.) On October 23, 2020, a notary was sent to Plaintiff’s home and he signed some, but not all, of the loan documents. (Compl., ¶ 36.) On October 27, 2020, he requested a cancellation of the loan via text and his request went ignored. (Compl., ¶ 39.) The lender is Swan Creek, which now holds a loan for $525,000.00 and the executed promissory note and deed of trust. (Compl., ¶¶ 46, 85.)

Plaintiff alleges that “defendants are responsible for the harm caused by this fraudulent inducement because they were part of a conspiracy to induce plaintiff into the hard money loan.” (Compl., ¶ 53.) He further alleges that the conspiracy was implied by the conduct of the parties and, on information and belief, that the co-conspirators were aware that HOAP Foundation planned to fraudulently induce Plaintiff. (Compl., ¶¶ 54-55.)

There are no facts in support of the assertion that Swan Creek was part of any conspiracy with Litzke and HOAP Foundation. There are no concrete facts alleged against Swan Creek beyond the fact that it now holds the loan for $525,000.00. Plaintiff alleges no connection between Swan Creek and any other Defendants or alleged co-conspirators. Further, because Plaintiff simply alleges that “defendants” collectively are responsible for his harm, without further facts showing which defendant participated in which conduct, the allegations are uncertain and ambiguous.

Tentative Ruling: The first cause of action for Conspiracy is insufficient against Swan Creek and the Demurrer to the first cause of action for Conspiracy is SUSTAINED, with 20 days’ leave to amend.

Fraud

The “elements of a cause of action for fraud are: (1) a misrepresentation, which includes a concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation i.e., scienter; (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance; and (5) resulting damages.” (Cadlo v. Ownes-Illinois, Inc. (2005) 125 Cal.App.4th 513. “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Facts supporting each element must be pleaded with particularity sufficient to show how, when, where, to whom, and by what means the representations were tendered. (Ibid.)

In support of this cause of action, Plaintiff alleges that Swan Creek is liable for fraud via civil conspiracy to commit fraud. (Compl., ¶ 58.) As discussed above, Plaintiff’s allegations of any conspiracy are insufficient against Swan Creek. Thus, the cause of action for Fraud fails as well.

Tentative Ruling: The Demurrer to the second cause of action for Fraud, is SUSTAINED with 20 days’ leave to amend.

Slander of Title

“The elements of the tort [of slander of title] . . . have traditionally been held to be publication, falsity, absence of privilege, and disparagement of another’s land which is relied upon by a third party and which results in a pecuniary loss . . . . A privilege, either absolute or qualified, is a defense to a charge of slander of title . . . . [I]f the complaint discloses existence of a qualified privilege, it must allege malice to state a cause of action [citation] . . . . Finally, ‘Ordinarily privilege must be specially pleaded by the defendant, and the burden of proving it is on him. [Citations.] But where the complaint shows that the communication or publication is one within the classes qualifiedly privileged, it is necessary for the plaintiff to go further and plead and prove that the privilege is not available as a defense in the particular case, e.g., because of malice.’ (4 Witkin, Summary of Cal. Law (8th ed. 1974) Torts, § 302, p. 2573.)” (Smith v. Commonwealth Land Title Ins. Co. (1986) 177 Cal.App.3d 625, 630-31.)

In support of this cause of action, Plaintiff alleges that “defendants singularly or as a whole refused to take action and cancel the loan” after he requested cancellation. (Compl., ¶¶ 93-94.) On October 27, 2020, Defendant Utopia Lending, Inc. caused to be recorded the Deed of Trust, which was published on title to the subject property. (Compl., ¶ 96.)

The Complaint does not allege that any third party relied upon a false publication and that such reliance has caused Plaintiff any pecuniary loss, a requisite element of this cause of action. Further, “[t]he recording of a trustee’s deed upon sale is [] privileged.” (Schep v. Capital One, N.A. (2017) 12 Cal.App.5th 1331, 1336.) Plaintiff alleges no malice by Swan Creek to show that the privilege defense is not available here.

Tentative Ruling: Thus, the Court SUSTAINS the Demurrer to the fifth cause of action for Slander of Title, with 20 days’ leave to amend.

(2) Motion to Strike

To support exemplary damages, the complaint must allege facts of defendant’s oppression, fraud, or malice, as required by Civil Code section 3294. (Civil Code § 3294(a); College Hospital Inc. v. Superior Court (1994) 8 Cal. 4th 704, 721; Turman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.)

As discussed above, Plaintiff’s causes of action against Swan Creek fail to state sufficient facts. Further, Plaintiff has failed to allege any facts showing that Swan Creek is guilty of oppression, fraud, or malice. Again, the only substantive facts alleged against Swan Creek are that it holds a loan for $525,000.00 and the executed promissory note and deed of trust. (Compl., ¶¶ 46, 85.) These facts are insufficient to support a claim for punitive damages.

Tentative Ruling: The Motion to Strike is GRANTED with 20 days’ leave to amend.

Swan Creek to give notice