Judge Lynne M. Hobbs, Case Number: 23STCV23542, Date: 2025-02-19 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV23542, Date: 2025-02-19 Tentative Ruling

Case Number: 23STCV23542 Hearing Date: February 19, 2025 Dept: 61

ROGER ESTRADA vs SELECT PORTFOLIO SERVICING INC., A UTAH CORP, et al.

TENTATIVE

Defendant Select Portfolio Servicing, Inc.’s Demurrer to the First Amended Complaint is SUSTAINED without leave to amend.

Moving Party to give notice.

ANALYSIS

I. DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) In particular, as is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”) “In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Defendant Select Portfolio Servicing, Inc. (SPS) demurrers to the First Amended Complaint (FAC) of Plaintiff Roger Estrada (Plaintiff) on the grounds that Plaintiff’s claims arise from a purported duty on the part of SPS to inform Plaintiff of a second position loan that SPS did not service. (Demurrer at pp. 7–11.) The claims alleged against SPS are for fraud, negligent misrepresentation, wrongful foreclosure, and unfair competition.

The elements of fraud are: (1) a false representation or concealment, (2) knowledge of its falsity, (3) intent to defraud, (4) justifiable reliance and (5) resulting damage. (Gil v. Bank of America, Nat. Ass'n (2006) 138 Cal. App. 4th 1371, 1381; Barbara A. v. John G. (1983) 145 C.A.3d 369, 376.)

“‘The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact. [Citation.]’ [Citation.]” (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)

There are “four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.” (Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651.) Fraud causes of action must be pleaded with particularity, meaning that the plaintiff must allege “how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Plaintiff’s claim of fraud against SPS relies on the allegation that SPS entered into a forbearance agreement with Plaintiff without disclosing that foreclosure proceedings would continue on a second mortgage of which Plaintiff was unaware. (FAC ¶¶ 37, 57.) But Plaintiff alleges no facts to show that SPS had a duty to disclose this information, whether by exclusive knowledge or partial representations. As SPS notes in the demurrer, SPS would have little reason to suspect Plaintiff’s lack of knowledge, since Plaintiff’s signature appears on both deeds of trust at issue in this litigation — both that serviced by SPS and that which was ultimately foreclosed upon. (RJN Exhs. 1, 2.) Plaintiff has filed no opposition challenging these arguments.

Plaintiff’s allegations of negligent misrepresentation mirror those supporting his first cause of action for fraud, in that they rest upon SPS’s failure to disclose the existence of a second mortgage on the property that could form the basis for a foreclosure. (FAC ¶¶ 93–102.) Once again, Plaintiff’s allegations do not support the existence of a duty to disclose, given the existence of judicially noticeable documents showing his signature on the second mortgage at issue.

SPS next targets Plaintiff’s wrongful foreclosure claim. “The elements of a wrongful foreclosure cause of action are: “ ‘(1) [T]he trustee or mortgagee caused an illegal, fraudulent, *562 or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.’” (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 561–562.) Defendant here presents judicially noticeable documents showing that the mortgage foreclosed upon was different from the mortgage for which Plaintiff obtained forbearance with SPS. (RJN Exhs. 3, 4 [notices of default and trustee’s sale on instrument ending in 7070]; Exhs. 5, 6 [showing rescission of notice of default and reconveyance for instrument ending in 7069].) Although Plaintiff alleges he was unaware of the second mortgage, his signature appears on the deed of trust. (RJN Exh. 2.) Again, Plaintiff has filed no opposition challenging Defendant’s arguments.

Plaintiff’s claim under Business and Professions Code § 17200 is derivative of the allegations assessed above, and falls with them. (See Krantz v. BT Visual Images, L.L.C. (2001) 89 Cal.App.4th 164, 178.)

The demurrer is therefore SUSTAINED without leave to amend.