Judge: Melissa R. Mccormick, Case: "Randolph v. Bank of America, N.A.", Date: 2022-11-03 Tentative Ruling

Defendant Bank of America, N.A.’s Demurrer to Complaint

Defendant Bank of America, N.A. demurs to the eight causes of action in plaintiff Adrienne M. Randolph’s complaint.  The court exercises its discretion to consider plaintiff’s late-filed opposition.  For the following reasons, defendant’s demurrer is sustained.

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint.  Blank v. Kirwan (1985) 39 Cal.3d 311, 318.  A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations.  Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.  Questions of fact cannot be decided on demurrer.  Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.  Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice.  Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 n.7.

Plaintiff’s first cause of action alleges violation of Civil Code section 2923.5(a)(2).  Plaintiff’s second cause of action alleges violation of Civil Code section 2924.9.  Both of these causes of action allege defendant violated these statutes in connection with its foreclosure on the HELOC Deed of Trust.  Complaint ¶¶ 23, 25, 27, 30 & Ex. C.  These statutes apply, however, to “first lien” deeds of trusts, which section 2920.5(d) defines as “the most senior mortgage or deed of trust on the property that is the subject of the notice of default or notice of sale.”  Civil Code § 2924.15(a); see Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 921 (“By its plain terms, HBOR's provisions apply only to first lien mortgages.  [Citations.]  Because the loans at issue in this case were junior loans — the second and third loans that plaintiff secured using the Property as collateral — HBOR does not apply.”) (italics in original).  Defendant’s demurrers to the first and second causes of action are sustained.

Plaintiff’s third cause of action alleges “lack of standing” pursuant to Civil Code section 2924(a)(6).  Plaintiff alleges defendant lacked standing because (i) defendant never possessed the beneficial interest in the HELOC deed of trust and (ii) Trustee Corps was never substituted as the proper trustee of record.  Complaint ¶¶ 36-38.  The former contention contradicts plaintiff’s allegation that defendant originated the HELOC.  Complaint ¶ 10 & Ex. B.  The latter contention contracts the Substitution of Trustee that was recorded against the property on September 14, 2021.  Request for Judicial Notice Ex. 8.  Defendant’s demurrer to the third cause of action is sustained. 

Plaintiff’s fourth cause of action alleges negligence based on defendant’s handling of plaintiff’s alleged loan modification application.  The California Supreme Court held in Sheen v. Wells Fargo Bank, N.A. (2002) 12 Cal.5th 905, that a lender owes no duty to a borrower in its processing of a loan modification application.  Id. at 929.  Defendant’s demurrer to the fourth cause of action is sustained.

Plaintiff’s fifth cause of action alleges violation of Business & Professions Code section 17200 et seq.  Plaintiff premises her fifth cause of action on defendant’s alleged violations of the HBOR and plaintiff’s negligence claim.  Complaint ¶ 65, 68-69.  As discussed above, plaintiff’s first, second, third and fourth causes of action do not state claims.  Plaintiff’s fifth cause of action based on those claims also fails to state a claim.  Defendant’s demurrer to the fifth cause of action is sustained.

Plaintiff’s sixth cause of action alleges cancellation of written instruments pursuant to Civil Code section 3412.  Section 3412 states:  “A written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.” 

Plaintiff alleges she has a reasonable belief that the notice of default, notice of trustee’s sale, the trustee’s deed upon sale, and “either one” of two loan instruments “are voidable or void ab initio.”  Complaint ¶ 82 & Exs. A, B, C & D.  Plaintiff further alleges she has a reasonable apprehension that if the alleged “voidable or void ab initio recorded written instruments” are left outstanding, “they may cause serious injury to Plaintiff because of [defendant’s] violations of Civ[il] Code §§ 2923.5, 2924.9, and 2924(a)6).”  Complaint ¶ 83.

As an initial matter, plaintiff alleges no facts in support of her conclusory allegations that the documents are “voidable or void ab initio” and that, if left outstanding, the documents “may cause serious injury” to plaintiff.  In addition, plaintiff premises this cause of action on defendant’s alleged violation of the HBOR, but cancellation is not an available remedy for a violation of section 2923.5.  Huweih v. US Bank Trust, N.A. (N.D. Cal. 2017) 2017 WL 396143, at *4.  Defendant’s demurrer to the sixth cause of action is sustained.

Plaintiff’s seventh cause of action alleges seeks to quiet title to the property in plaintiff’s favor.  The elements of a cause of action for quiet title are:  (i) a description of the property including both its legal description and its street address or common designation; (ii) the plaintiff’s title and the basis upon which it is asserted; (iii) the adverse claims as against which a determination is sought; (iv) the date as of which a determination is sought and, if other than the date the complaint is filed, a statement why the determination is sought as of that date; and (v) a prayer for determination of plaintiff’s title against the adverse claims.  Cal. Civ. Proc. Code § 761.020.

Plaintiff’s complaint does not allege facts supporting each of the required elements to state a quiet title claim.  Cal. Civ. Proc. Code § 761.020.  Defendant’s demurrer to the seventh cause of action is sustained.

Plaintiff’s eighth cause of action alleges wrongful foreclosure based on plaintiff’s first cause of action for violation of section 2923.5(a)(2).  Complaint ¶ 93.  To state a wrongful foreclosure claim, a plaintiff must allege facts showing: (1) the trustee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a deed of trust; (2) the party attacking the sale suffered prejudice or harm; and (3) the trustor tenders the amount of the secured indebtedness or was excused from tendering.  Ram v. OneWest Bank (2015) 234 Cal.App.4th 1, 11.  The first element – wrongfulness – can be satisfied by a variety of procedural defects, such as noncompliance with the requirements for notice or the trustee's lack of authority to foreclose.  Id. 

Plaintiff’s eighth cause of action is based entirely on plaintiff’s first cause of action for violation of section 2923.5(a)(2).  As discussed above, plaintiff’s first cause of action does not state a claim.  Accordingly, plaintiff cannot state a wrongful foreclosure claim based on that claim.  Defendant’s demurrer to the eighth cause of action is sustained.

A demurrer should be sustained without leave to amend if there is no reasonable probability that the complaint can be cured by amendment.  Blank, 39 Cal.3d at 318.  The burden of proving such reasonable possibility “is squarely on the plaintiff.”  Id.  Plaintiff did not address her third, seventh or eighth causes of action in her opposition, and thus has not demonstrated any reasonable probability that those causes of action can be cured by amendment.  See also Opp. at 1:13-14 (stating plaintiff does not intend to pursue third and seventh causes of action).  Plaintiff also has not demonstrated that her first, second, fourth and fifth causes of action can be cured by amendment.  Defendant’s demurrers to the first, second, third, fourth, fifth, seventh and eighth causes of action are sustained without leave to amend.

Defendant’s demurrer to the sixth causes of action is sustained with leave to amend.  Should plaintiff desire to file an amended complaint addressing the issues in this ruling, plaintiff must file and serve it by November 14, 2022.

Defendant’s unopposed request for judicial notice of Exhibits 1 through 8 is granted.  Defendant’s request for judicial notice of Exhibit 9 is denied because there is no Exhibit 9 attached to the request for judicial notice.

Defendant to give notice.

Case Management Conference

The trial is scheduled for April 8, 2024 at 9:00 a.m. in Department C13.

Clerk to give notice.