Judge Mark V. Mooney, Case 20STCV07831 2022-10-10 Tentative Ruling

Judge: Mark V. Mooney, Case: 20STCV07831, Date: 2022-10-10 Tentative Ruling

Case Number: 20STCV07831 Hearing Date: October 10, 2022 Dept: 68

LAW & MOTION JUDGE STERN HRG. DATE: 10/10/22

MICHAEL KEITH WILLIAMS v. DRAKE BUCHANAN ET AL.

20STCV07831

DEFENDANT’S DEMURRER TO PLAINTIFF’S FOURTH AMENDED COMPLAINT

NOTICE: IMPROPER

BACKGROUND:

This is an action for damages arising from alleged forgery and broker and lender liability in connection with a property mortgage loan. Plaintiff, Michael Keith Williams (“Plaintiff”) brought this action against Defendants Drake Buchanan (“Buchanan”), Civic Financial Services, LLC (“Civic Financial”), Civic Securitization Trust II (“Civic Trust”), Entra Default Solutions (“Entra”), Fay Servicing LLC (“Fay”), Contempo Escrow (“Contempo”), Fast Action Mortgage, Inc. (“Fast Action”), Shanshan Xu (“Xu”), and Does 1 through 50 inclusive (collectively “Defendants”). Plaintiff alleges that Defendant Buchanan made material misrepresentations to Plaintiff, stole Plaintiff’s identity, and forged Plaintiff’s name to obtain mortgage loans. Plaintiff then alleges that Buchanan directed those loan proceeds to his personal bank account, depleting Plaintiff’s home equity value. Plaintiff believes that Buchanan perpetuated the fraud with the help of other Defendants.

Fast Action is the defendant filing this demurrer. Fast Action was previously known and mentioned in the complaint as AY Capital. The complaint also mentions Yanni, principal of Ay Capital. Defendant is also sometimes referred to as one of the “Mortgage Broker Defendants.”

Plaintiff filed the initial complaint on February 28, 2020. Plaintiff filed a First Amended Complaint (“FAC”) on August 5, 2020. The Court granted leave to amend the FAC on January 5, 2021, and Plaintiff filed a Second Amended Complaint (“SAC”) on May 3, 2021. On September 9, 2021, the Court granted leave to amend the SAC, and Plaintiff filed the Third Amended Complaint (“TAC”) on September 14, 2021. On May 23, 2022, Defendant Fast Action filed a demurrer and concurrent motion to strike which the court sustained with leave to amend. Plaintiff was ordered to file and serve a Fourth Amended Complaint, which was filed on June 6, 2022.

The operative Fourth Amended Complaint (“4AC”) asserts 17 causes of action: (1) fraud, (2) fraud, (3) aiding and abetting, (4) breach of fiduciary duty, (5) negligence, (6) notary fraud, (7) Penal Code § 496, (8) conversion, (9) predatory lending, (10) violation of Civil Code § 1785.20.3, (11) violation of California Civil Code § 2923 et seq., (12) violation of Homeowner Bill of Rights, (13) violation of TILA 15 U.S.C. § 1601 et al., (14) quiet title, (15) unfair business practices, (16) wrongful foreclosure, and (17) set aside trustee sale.

On September 16, 2022, Defendant Fast Action filed the instant demur and motion to strike as to all causes of action in the 4AC alleging that the complaint fails to state facts sufficient to

CONFIDENTIAL COURT DOCUMENT DEPT. 68

constitute any of the causes of action against Fast Action, and that the complaint is vague, ambiguous, and unintelligible.

Plaintiff opposes the demur and motion to strike. Fast Action replies to the opposition.

TIMELINE:

2/28/20 Complaint filed

8/5/20 First Amended Complaint filed

5/3/21 Second Amended Complaint filed

9/9/21 Third Amended Complaint filed

6/6/22 Fourth Amended Complaint filed

9/21/22 Order dismissing Defendant Fay Servicing, LLC

9/16/22 Defendant Fast Action files Motion to Demurrer w/ Motion to Strike

9/27/22 Plaintiff’s Opposition filed

10/4/22 Fast Action files Reply to Opposition

MOVING PARTY argues:

Defendant, Fast Action, demurs to the entire 4AC on the ground that the pleading fails to state facts sufficient to constitute a cause of action against Fast Action. Specifically, Defendant Fast Action demurs to the Second Cause of Action for Fraud because the 4AC does not show (i) what acts, representations, or omissions Fast Action took, (ii) who on behalf of Fast Action committed the alleged fraud, (iii) actual knowledge of Fast Action, (iv) reliance by Plaintiff, (v) that reliance was justifiable, and (vi) how Plaintiff was damaged.

Fast Action demurs to the Fourth Cause of Action for breach of fiduciary duty, stating that the complaint fails to state facts establishing a fiduciary duty or show that Plaintiff had ever spoken or done business with Fast Action. Fast Action also demurs to this cause of action on the ground that it is barred by the statute of limitations.

Fast Action demurs to the Fifth Cause of Action for Negligence because it fails to state facts to establish causation because Plaintiff did not hire or authorize Fast Action to work on his behalf.

Fast Action demurs to the Seventh Cause of Action for violation of Penal Code Section 496 because Fast Action did not receive any money from Plaintiff.

Fast Action demurs to the Ninth Cause of Action for Predatory Lending because it is barred by the statute of limitations and because Fast Action had no relationship to Plaintiff and did not act on his behalf.

Fast Action demurs to the Thirteenth Cause of Action for Violation of TILA 15 U.S.C. 1601 because Plaintiff failed to make any changes to his allegations in the TAC. This statute does not apply in commercial transactions or hard money loans.

Fast Action demurs to the Fifteenth Cause of Action of Business & Professions Code section 17200 because Plaintiff does not describe specific activities that violated the statute.

RESPONDING PARTY argues:

Plaintiff responds that the instant Demurrer and Motion to Strike were not timely filed pursuant to Code of Civil Procedure § 1005(b), which requires motions and supporting documents to be served at least sixteen court days before the hearing.

Here, the Demurrer was served on September 16, 2022 for the hearing date on October 10, 2022. Because the Court observed Native American Day on September 23, 2022, there were only fifteen court days between service of the motions and the hearing date.

IN REPLY, MOVING PARTY argues:

In its reply, Defendant acknowledges that the papers were served one day late. The Defendant states that it did not realize that September 23, 2022 was a court holiday.

Defendant requests that the Court continue the hearing until on or about November 4, 2022, allowing Plaintiff 34 days of additional notice. The Defendant makes this request pursuant to California Rules of Court Rule 5.15, providing that the Court may “(1) Make orders to help prevent an immediate danger or irreparable harm to a party…” The Defendant also makes this request pursuant to California Code of Civil Procedure § 473 which provides that: “The court may, in the furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding…The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars….”

Defendant accompanies the reply with two attorney declarations testifying that they failed to consult the Court Calendar when servicing and did not realize that there was a newly created holiday on September 23, 2022. (Allemand Decl. ¶ 9-10; Henein Decl. ¶ 3.)

TENTATIVE RULING: RE DEFENDANT’S DEMURRER TO PLAINTIFF’S FOURTH AMENDED COMPLAINT, THE COURT RULES AS FOLLOWS:

The Court continues the Matter to ________. The Court grants Plaintiff leave to amend the Oppositions to Fast Action’s Demurrer and Motion to Strike to respond to the merits.

Discussion

California Code of Civil Procedure § 1005(b) provides that “Unless otherwise ordered or specifically provided by law, all moving and supporting papers shall be served and filed at least 16 court days before the hearing…. The court, or a judge thereof, may prescribe a shorter time.”

Here, it is undisputed that Defendant, Fast Action, served the moving papers 15 days before the hearing. Defendant asserts that it was not aware of the court holiday on September 23, 2022, celebrating Native American Day.

California Rules of Court Rule 3.1320(d) states that “[d]emurrers must be set for hearing not more than 35 days following the filing of the demurrer or on the first date available to the court thereafter. For good cause shown, the court may order the hearing held on an earlier or later day on notice prescribed by the court.”

California Rules of Court Rule 5.151 allows a party to request a temporary emergency (ex parte) order in order to, among other things:

(1) Make orders to help prevent an immediate danger or irreparable harm to a party… (3) Make orders about procedural matters, including the following: (A) Setting a date for a hearing on the matter that is sooner than that of a regular hearing (granting an order shortening time for hearing); (B) Shortening or extending the time required for the moving party to serve the other party with the notice of the hearing and supporting papers (grant an order shortening time for service); and (C) Rescheduling a hearing or trial.

However, although Defendant cites to this Rule, Defendant has not complied with the requirements to request an ex-parte order under this Rule.

However, the Court believes that there is good cause to continue the hearing. Defendant files attorney declarations showing that it was not aware of the court holiday on September 23, 2022. This was the first year the court celebrated Native American Day, so the court views this to be a mistake made in good faith.

The Court notes that Defendant’s Demurrer to the TAC was sustained. After amending the complaint, Defendant again demurs to the same causes of action that it successfully demurred to in the TAC. By overruling Defendant’s Demurrer to the 4AC based on a procedural mistake, Defendant will be prejudiced in having to defend against causes of action that were previously dismissed.

Thus, the Court believes there is good cause to continue the hearing to allow proper notice to Plaintiff and the Court. The Court notes that Plaintiff’s Objections were solely based on the untimely notice. Thus, the Court grants Plaintiff leave to amend to respond on the merits.