Judge: Melvin D. Sandvig, Case: 19CHCV00455, Date: 2022-07-25 Tentative Ruling

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Case Number: 19CHCV00455    Hearing Date: July 25, 2022    Dept: F47

Dept. F-47

Date: 7/25/22

Case #19CHCV00455

 

DEMURRER TO THE FIRST AMENDED COMPLAINT

 

Demurrer filed on 4/28/22.

 

MOVING PARTY: Defendant Ygrene Energy Fund California LLC

RESPONDING PARTY: Plaintiff Blanco Mohd

NOTICE: ok

 

Demurrer is to the 1st -5th and 7th -12th causes of action:

1.      Breach of Contract (Cedros)

2.      Negligence

3.      Breach of Contract (Sandra)

4.      Negligence

5.      Intentional Misrepresentation

6.      Wrongful Foreclosure (not alleged against Ygrene)

7.      Rescission (Cedros/Marentes)

8.      Rescission (Sandra/Marentes)

9.      Rescission (Sandra/Ygrene)

10.  Rescission (Sandra/County of LA)

11.  Unfair Business Practices (B&P 17200)

12.  Unfair Business Practices (B&P 17500)

 

RULING: The unopposed demurrer is sustained without leave to amend.   

 

This action arises out of home improvements contracts related to two properties owned by Plaintiff Blanco Mohd (Plaintiff) in Mission Hills, California.  Plaintiff alleges that in July 2016, she entered a home improvement contract with Defendants Luis Marentes dba Marentes Construction (Marentes) and Osmany Batte (Batte) for 10437 Cedros Avenue, Mission Hills, CA.  (FAC ¶17).  To pay for the work, Plaintiff applied and was approved for financing from the PACE program.  (FAC ¶¶20, 22, 37, 39, Ex.B).  Plaintiff alleges that Marentes and Batte failed to complete the work to install artificial turf and other improvements, but that the State of California PACE program still levied special property taxes against the Cedros Property.  (FAC ¶¶18-22, Ex.A).  In October 2016, Plaintiff entered a similar contract for 14915 Sandra Street, Mission Hills, CA.  (FAC ¶34, Ex.C, D).  Again, Plaintiff alleges that Marentes and Batte breached the contract, but special property taxes were still levied against the Sandra Property.  (FAC ¶¶35-39).

 

Ygrene Energy Fund California LLC (Ygrene) is the “Program Administrator” for the PACE financing program used by Plaintiff to obtain funds for the projects she contends were never completed.  The government entity that created the PACE Community Facilities District (CFD) at issue here is Golden State Financing Authority (GSFA).

 

The First Amended Complaint contains causes of action for: (1) Breach of Contract (Cedros);

(2) Negligence; (3) Breach of Contract (Sandra); (4) Negligence; (5) Intentional Misrepresentation; (6) Wrongful Foreclosure (not alleged against Ygrene); (7) Rescission (Cedros/Marentes); (8) Rescission (Sandra/Marentes); (9) Rescission (Sandra/Ygrene);

(10) Rescission (Sandra/County of LA); (11) Unfair Business Practices (B&P 17200); and (12) Unfair Business Practices (B&P 17500).   Ygrene now demurs to the 1st, 2nd, 3rd, 4th, 5th, 7th, 8th, 9th, 10th, 11th and 12th causes of action in the First Amended Complaint.  Plaintiff has not opposed the demurrer.

 

ALL CLAIMS AGAINST YGRENE

 

WAIVERS

 

On 10/15/16, Plaintiff executed two Unanimous Approval Agreements (UAAs) for the Cedros Property which contain waivers of all claims against Ygrene.  (FAC, Ex.B §15(a)).  The UAAs also include a California Civil Code section 1542 acknowledgement and waiver provision, which provided Plaintiff with the text of Civil Code 1542, and which Plaintiff initialed, thereby waiving the protections of Civil Code 1542.  (Id. §15(c)).  Plaintiff also executed a UAA for the Sandra Property on 11/11/16 which contains the same waivers.  (FAC, Ex. D).  

 

The foregoing releases bar all of Plaintiff’s claims against Ygrene in this action.  See Edwards (1988) 205 CA3d 1164, 1167; Winet (1992) 4 CA4th 1159, 1168; Jefferson (2002) 28 C4th 299, 306; Skrbina (1996) 45 CA4th 1353, 1366.

 

GOVERNMENT CODE 53328.1

 

To the extent that Plaintiff’s claims attempt to remove the GSFA PACE tax liens against her Properties, they challenge the validity of the special taxes.  All claims contesting the validity of a tax lien must be filed within 15 days of its recording and any such claims must be adjudicated under California’s Validation Statutes.  See Government Code 53328.1; Civil Code 860, 863; Golden Gate Hill Dev. Co. (2015) 242 CA4th 760, 766-767; McLeod (2008) 158 CA4th 1156, 1166, 1170; Embarcadero Mun. Improvement Dist. (2001) 88 CA4th 781, 792.

 

Here, Plaintiff failed to timely challenge GSFA’s PACE liens; therefore, they are conclusively valid and any claim challenging their validity is barred.  (See Bolan Decl., Ex.A, B, C).

 

FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES

 

To the extent Plaintiff’s claims seek a refund of taxes paid, they fail because Plaintiff has not exhausted her administrative remedies.  (See FAC Prayer ¶F (seeking refund of all payments)).  See Williams & Fickett (2017) 2 C5th 1258, 1266-1268.

 

Even if Plaintiff’s claims against Ygrene did not fail based on the foregoing, they fail for additional reasons.

 

 

CONTRACT CLAIMS (1ST, 3RD, 7TH, 8TH, 9TH & 10TH CAUSES OF ACTION)

 

The elements of a breach of contract cause of action are: (1) a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.  Hamilton (2011) 195 CA4th 1602, 1614 citing Reichert (1968) 68 C2d 822, 830.  Plaintiff also seeks to rescind four different agreements.  “A prerequisite to any claim for rescission is a contract between the parties.  [Citation.]  This is because rescission requires each party to the contract to restore to the other everything of value received under the contract.”  Viterbi (2011) 191 CA4th 927, 935; See also Civil Code 1691.   

 

The contract-based claims fail against Ygrene as they are not based on any contract between Plaintiff and Ygrene.  (See FAC ¶¶17, 34, 52, 76, 84, 92, 101, Ex.A, B, C, E, J).  Plaintiff alleges that Marentes, not Ygrene, “has failed and refused and continues to fail and refuse to complete its obligations pursuant” to the written documents attached to the First Amended Complaint.  (FAC ¶¶18, 35). 

 

The 7th and 8th causes of action for rescission concern contracts Plaintiff entered with Marentes.  (FAC ¶¶76, 82, 84, 90, Ex.A, C).  The 9th and 10th causes of action for rescission concern contracts between Plaintiff and GSFA and Plaintiff and the County of Los Angeles.  (FAC ¶¶92-98, 100-107, Ex.B, J).     

 

NEGLIGENCE (2ND & 4TH CAUSES OF ACTION)

 

Duty is an essential element of a negligence cause of action.  Castellon (2013) 220 CA4th 994, 998.  Plaintiff alleges that Ygrene was negligent in failing to protect her from her interactions with Marentes.  (See FAC ¶¶28-32, 45-49).  Plaintiff alleges that Ygrene owed her a duty of care “as a consequence” of Ygrene’s purported knowledge that Marentes was contracting with homeowners but failing to do the construction work for which it was paid.  (FAC, ¶¶ 28-30, 45-47).  However, Plaintiff does not identify any legal basis for this duty, nor does she allege any facts giving rise to a duty in negligence. 

 

Under California law, “a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.”  Nymark (1991) 231 CA3d 1089, 1092, 1096-1097; accord Lueras (2013)  221 CA4th 49, 63.  Here, there are no allegations which indicate that Ygrene participated in the financing which underlies this action in any capacity other than as a financing provider. 

 

INTENTIONAL MISREPRESENTATION/FRAUD (5TH CAUSE OF ACTION)

 

The elements of a cause of action for intentional misrepresentation are: (1) a misrepresentation, (2) with knowledge of its falsity, (3) made with the intent to induce another’s reliance on the misrepresentation, (4) actual and justifiable reliance, and (5) resulting damage.  Lazar (1996) 12 C4th 631, 638.  Fraud claims must be pleaded with specificity.  Id. at 645. 

 

The intentional misrepresentation cause of action is based on representations allegedly made by Marentes to Plaintiff.  (See FAC ¶¶51, 53-57, Ex.E).  Without any factual support, Plaintiff alleges, based on information and belief, that the misrepresentations allegedly made by Marentes were either made with the authorization of officers and directors of the other defendants or they were ratified thereafter.  (FAC ¶59).  Such allegations are insufficient to meet the strict pleading requirements for a fraud claim.  See Gomes (2011) 192 CA4th 1149, 1158-1159.

 

UNFAIR BUSINESS PRACTICES (11TH & 12TH CAUSES OF ACTION)

 

These claims fail because they are based on conclusions and the preceding defective causes of action.  Plaintiff has not alleged sufficient facts to establish that Ygrene engaged in unlawful, unfair and/or deceptive business practices.

 

NO LEAVE TO AMEND

 

Plaintiff has already had two opportunities to plead her claims.  Additionally, Plaintiff has not opposed the demurrer or given any indication that she can cure the defects in her pleading.  Therefore, the demurrer is sustained without leave to amend.