Judge: Maurice A. Leiter, Case: 22STCV26395, Date: 2023-02-08 Tentative Ruling

Case Number: 22STCV26395    Hearing Date: February 8, 2023    Dept: 54

Hearing Date: February 8, 2023

Department 54, Judge Maurice A. Leiter

Demurrer to Complaint

Moving Party: Defendant Trinity Financial Services LLC

Responding Party: Plaintiff Nicole Shepherd

T/R:     TRINITY’S DEMURRER IS SUSTAINED WITH LEAVE TO AMEND.

PLAINTIFF TO FILE AND SERVE A FIRST AMENDED COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING. TRINITY TO FILE AND SERVE A RESPONSE WITHIN 30 DAYS THEREAFTER.

TRINITY TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at¿SMCdept54@lacourt.org¿with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing. 

The Court considers the moving papers, opposition, and reply.

BACKGROUND

                        On August 16, 2022, Plaintiff Nicole Shepherd sued Defendants Trinity Financial Services, LLC, et al., asserting causes of action for (1) injunction; (2) declaratory relief; (3) cancellation of deed of trust; (4) fraud and deceit; and (5) negligence. In 2006, Plaintiff executed two deeds of trust in favor of lender, Right-Away Mortgage. In 2009, Plaintiff received modification of the first loan. In 2013, Plaintiff again received a modification, believing both loans had been rolled into one. In 2020, Right-Away assigned the second loan to Trinity. After Plaintiff filed for chapter 13 bankruptcy, Trinity sought to foreclose on the second loan and collect 14 years of interest. Plaintiff asserts the second mortgage should have been extinguished under the Homeowner’s Affordable Modification Program (“HAMP”).

REQUEST FOR JUDICIAL NOTICE

            Trinity’s requests for judicial notice are GRANTED as to the existence of the documents, but not as to the truth of the matters asserted in them.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

A. Injunction, Declaratory Relief, and Cancellation of Instruments

            Trinity demurs to the first through third causes of action on the ground that Plaintiff has failed to allege sufficient facts.

Trinity asserts that Plaintiff cannot prevent Trinity from foreclosing under HAMP because the second lien mortgage program is available only if the first mortgage was modified under HAMP, and Plaintiff has failed to show the first loan was modified under HAMP. Trinity represents that there is no private right of action under HAMP. (See e.g. Vida v. OneWest Bank, F.S.B., 2010 WL 5148473 (D. Oregon 2010).)

Plaintiff does not address this issue in opposition, instead arguing that the allegations are sufficient. Plaintiff also asserts that the deed of trust is void because it was dormant for 14 years and that Trinity engaged, but did not follow through, on HAMP guidelines. These assertions are not in the complaint.

The first through third causes of action require clarification. The demurrer to the first through third causes of action is SUSTAINED.

B. Fraud

The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including negligent misrepresentation, must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

Trinity asserts that Plaintiff has failed to allege fraud with the requisite specificity. Plaintiff alleges, “On information and belief, Defendants actions are with the full knowledge of the falsity of the documents they have fraudulently prepared. They possess the intent and malice aforethought to unlawfully extract money from Plaintiff using the threat of loss of her property.” (Compl. ¶ 34.) This is insufficient to state a cause of action for fraud.

The demurrer to the fourth cause of action is SUSTAINED.

C. Negligence

To plead a cause of action for negligence, one must allege (1) a legal duty owed to plaintiffs to use due care; (2) breach of duty; (3) causation; and (4) damage to plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 318.) “In order to state a cause of action for negligence, the complaint must allege facts sufficient to show a legal duty on the part of the defendant to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.” (Bellah v. Greenson (1978) 81 Cal.App.3d 614, 619.) 

Trinity demurs to the fifth cause of action on the ground that it did owe Plaintiff a duty and did not breach any duty. Plaintiff alleges, “On information and belief, DEFENDANTS and each of them have acted in a manner without reasonable cause and either knew or should have known that they lacked the just cause to record a Notice of Default against Plaintiff's Real Property.” (Compl. ¶ 36.)

In opposition, Plaintiff represents Defendants were negligent because Trinity never responded to her loan modification application. Again, this is not alleged in the complaint.

The demurrer to the fifth cause of action is SUSTAINED.