Judge Randolph M. Hammock, Case 20STCV47123 2023-04-14 Tentative Ruling

Judge: Randolph M. Hammock, Case: 20STCV47123, Date: 2023-04-14 Tentative Ruling

This action arises out of the sale of real property located at 5529 Vanalden Street in Tarzana, California. Plaintiff Vista Land (“Vista”) alleges it purchased the real property after being the highest bidder at a Trustee’s foreclosure sale on September 8, 2020, where it purchased the Second Deed of Trust on the property. Thereafter, Plaintiff alleges Defendants, who owned the First Deed of Trust on the property, engaged in a conspiracy to defraud Plaintiff. Plaintiff obtained a TRO on January 7, 2021, enjoining any non-judicial foreclosure action against the property.

It is further alleged that on October 6, 2021, Defendant AWBCO recorded a notice of Assignment of the Deed of Trust to R&R Real Properties, LLC (“R&R.”) Plaintiff alleges Defendant AWCBO’s attorney of record, Raymond Robinson (“Robinson”) is the Managing Member of R&R and incorporated the company. R&R allegedly conducted a nonjudicial foreclosure of the property on October 21, 2021, and then entered into a Purchase and Sale Agreement with Frank Sillman (“Sillman.”) Accordingly, Plaintiff filed a Supplemental Complaint on February 23, 2022, containing an eleventh cause of action for Embezzlement against EIJ, a twelfth cause of action for wrongful foreclosure against Robinson and eighteen other Defendants, and a thirteenth cause of action for Criminal extortion against Robinson and four other defendants.

On June 20, 2022, Plaintiff filed a “First Amended Complaint.” On September 29, 2022, Plaintiff filed the operative pleading, “Verified Second Amended Complaint and First Amended Supplemental Complaint.”

The Declaration of Attorney Raymond G. Robinson reflects that Plaintiff failed to respond to the request to meet and confer. Given that this is one of multiple demurrers to the SAC, this court will exercise its discretion to consider the demurrer absent the meet and confer. The parties are admonished to comply with all meet and confer obligations going forward.

Pursuant to Defendants’ request, the court takes judicial notice of Exhibits 1 through 9. The court takes judicial notice of the exhibits without assuming the truth of the assertions contained therein. (See Seelig v. Infinity Broad. Corp. (2002) 97 Cal. App. 4th 798, 808.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (CCP § 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Id.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, 147 Cal.App.4th at 747.)

Defendant first argues the entire SAC fails to comply with this court’s August 20, 2022, Order. In that minute order, this court on its own motion gave Plaintiff leave to file a Second Amended Complaint/First Amended Supplemental Complaint. (See August 30, 2022, Minute Order.) The order stated that “[i]f Plaintiff alleges new and additional causes of action against any defendant, the factual reason shall be explained in the pleading, as to when such facts were discovered, and a[n] explanation as to why such new causes of action or claims were not presented earlier.” (Id.)

As has been noted, this court’s reason for requiring that Plaintiff include these allegations in the amended pleading was to provide facts to demonstrate delayed discovery or some other equitable doctrine. By doing so, the parties would potentially avoid unnecessary motion-practice on issues that could arise from a statute of limitations challenge.

Defendants’ demurrer, however, does not raise any statute of limitations arguments. Indeed, the fact that Defendant does not point to any cause of action that is untimely would suggest that the pleading adequately complied with this court’s instruction. Had it not, it would be expected that Defendant raise that pleading deficiency in his demurrer on some legally recognized basis.

“The elements of a wrongful foreclosure cause of action are: (1) [T]he trustee or mortgagee caused an illegal, fraudulent, 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.” (Citrus El Dorado, LLC v. Chicago Title Co. (2019) 32 Cal. App. 5th 943, 948.)

Here, Plaintiff alleges the wrongful foreclosure occurred on October 21, 2021, “when Defendants Ray Robinson, R&R, and David Robinson, foreclosed on the first deed of trust to Cadena, this sale being illegal and void as it was in violation of this Court’s Order.” (SAC ¶ 73.) Plaintiff further alleges that “Defendant Royston switched trustees from SBS to TLS on March 26, 2021 after the debt had been satisfied,” and then “assigned the deed of trust to his former attorney Defendant Robinson so that he could order the foreclosure with the unsuspecting trustee.” (SAC ¶¶ 73, 74.) Thus, Vista Land has pled all elements for the cause of action against Defendants.

“To establish slander of title, a plaintiff must show: “(1) a publication, (2) which is without privilege or justification, (3) which is false, and (4) which causes direct and immediate pecuniary loss.” (Klem v. Access Ins. Co. (2015) 17 Cal. App. 5th 595, 612.)

Plaintiff alleges that Defendants knowingly violated Judge Chalfant’s February 10, 2021, Order expressly precluding a nonjudicial foreclosure sale by, among other things, “record[ing] an assignment of the deed of trust to Ray Robinson.” (SAC ¶¶ 38, 85.) Defendants allegedly slandered the title again when they “recorded a grant deed to Defendant Sillman who was an associate of Royston and on notice of the Court’s order enjoining foreclosure in an attempt to wash all this fraud by a grant deed to a purported BFP.” (Id. ¶ 86.) Plaintiff further alleges this act “cast doubt upon the existen[ce] of Plaintiff’s interest in Vanalden Street, disparaged his title, and caused him damage.” (Id. ¶ 87.)

Plaintiff has therefore alleged Defendants’ involvement in the publication, which is sufficient for pleadings purpose to maintain a cause of action against each. Defendants made an “unfounded claim of an interest in the property which thr[ew] doubt upon its ownership.” (M.F. Farming Co. v. Couch Distrib. Co. (2012) 207 Cal. App. 4th 180, 199 [disapproved of on other grounds by Baral v. Schnitt (2016) 1 Cal. 5th 376].) These allegations plead acts by Defendants constituting a false publication, without privilege, that caused Plaintiff harm. (Klem, supra, 17 Cal. App. 5th at 612.)

Even to the extent the cause of action does not plead facts against Defendant Robinson individually (it does), directors of a corporation such as R&R “are liable to third persons injured by their own tortious conduct regardless of whether they acted on behalf of the corporation and regardless of whether the corporation is also liable. [Citations.]” (PMC, Inc. v. Kadisha (2000) 78 Cal. App. 4th 1368, 1379–80 [emphasis added].)

Civil Code section 3412 provides: “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.”

(1) The Notice of Trustee’s Sale recorded by AWBCO on November 20, 2020 through trustee SBS demanding $1,649,762.14 which was pursuant to the fraud against Plaintiff which is Los Angeles County Recorder document number 20201492405;

(2) The Notice of Trustee’s Sale recorded by AWBCO on March 26, 2021 through trustee TLS demanding $550,410.62 which was also pursuant to the fraud against Plaintiff which is Los Angeles County Recorder document number 20210480906;

(4) The trustee’s deed upon sale from Robinson to R&R, recorded on November 23, 2021 which was also pursuant to the fraud against Plaintiff which is Los Angeles County Recorder document number 20211741966;

(5) The grant deed from Robinson to Sillman recorded on December 13, 2021 which was also pursuant to the fraud against Plaintiff which is Los Angeles County Recorder document number 20211847979. (Id. 93.)

To plead a claim for quiet title, a plaintiff must allege: (1) a legal description of the property and its street address or common designation; (2) the title of the plaintiff and the basis of the title; (3) the adverse claims to the title of the plaintiff; (4) the date as of which the determination is sought; and (5) a prayer for the determination of the title of the plaintiff against the adverse claims. (CCP § 761.020.)

“An element of a cause of action for quiet title is ‘[t]he adverse claims to the title of the plaintiff against which a determination is sought.’” (Orcilla v. Big Sur, Inc. (2016) 244 Cal. App. 4th 982, 1010.) The SAC concedes that it seeks quiet title only against Defendant Sillman, who “held himself out as a bona fide purchaser” of the property. (SAC ¶ 101.) The SAC therefore fails to allege that Defendants presently have any “adverse claims” to the property.

Accordingly, Defendants’ Demurrer to the Fourth Cause of Action is SUSTAINED without leave to amend. Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) It appears that Plaintiff cannot allege that Defendants presently have any adverse claims to the property. Thus, no leave to amend is given.

To plead fraud, a Plaintiff must allege “(1) a representation, (2) that is false, (3) made with knowledge of its falsity, and (4) with an intent to deceive, coupled with (5) actual detrimental reliance and (6) resulting damage.” (Lim v. The.TV Corp. Internat. (2002) 99 Cal. App. 4th 684, 694.) Fraud-based claims are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) To advance a cognizable fraud claim, “every element of the cause of action . . . must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a fraud claim deficient in any material respect.” (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331).

As this court has concluded when addressing the same arguments made in the previous demurrers, the SAC omits any allegation that Plaintiff relied on the alleged “overcharge.” (See 02/15/2023 Ruling.) Instead, the complaint actually would appear to suggest that Plaintiff did not rely on the “inflated” payoff amount, since the amount Plaintiff ultimately paid was prescribed by the Court and did not include the $412,000 “overcharge.” Thus, Plaintiff has not pled fraud against the moving Defendants with the requisite specificity.

Accordingly, Defendants’ Demurrer to the Fifth Cause of Action is SUSTAINED with leave to amend. When amending, Plaintiff must plead all elements of fraud, including detrimental reliance, with specificity.

“Civil conspiracy is not an independent tort. Instead, it is ‘a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.’” (City of Indus. v. City of Fillmore (2011) 198 Cal. App. 4th 191, 211–12.) Courts have disregarded a standalone cause of action for conspiracy to commit a tort, and instead construed the claim as a single cause of action together with the underlying tort. (Id.) This court will do the same.

Accordingly, Defendants’ Demurrer to the Sixth cause of action is SUSTAINED without leave to amend. However, as discussed immediately above, Plaintiff may incorporate the conspiracy allegations into the Fraud cause of action if given leave to amend.

“To succeed in a negligence action, the plaintiff must show that (1) the defendant owed the plaintiff a legal duty, (2) the defendant breached the duty, and (3) the breach proximately or legally caused (4) the plaintiff's damages or injuries.” (Thomas v. Stenberg (2012) 206 Cal. App. 4th 654, 662.)

Courts no longer require a fiduciary relationship for an accounting. “A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin, (2009) 173 Cal. App. 4th 156, 179.) “An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.” (Id.) “[T]he nature of a cause of action in accounting is unique in that it is a means of discovery. An accounting is a ‘species of disclosure, predicated upon the plaintiff's legal inability to determine how much money, if any, is due. [Citation.] Thus, the purpose of the accounting is, in part, to discover what, if any, sums are owed to the plaintiff, and an accounting may be used as a discovery device.” (Id. at 180.)

Plaintiff has sufficiently alleged a “relationship” between it and Defendants to maintain the cause of action, and at least at this stage, there appears to be some dispute as to whether the sum in dispute is certain or not.

Business and Professions Code section 17200 defines “unfair competition” to include “any unlawful, unfair or fraudulent business act or practice....” “The scope of section 17200 is broad, encompassing ‘anything that can properly be called a business practice and that at the same time is forbidden by law.’ ... It governs ‘anti-competitive business practices’ as well as injuries to consumers, and has as a major purpose ‘the preservation of fair business competition.’” [Citations.] (Linear Tech. Corp. v. Applied Materials, Inc., (2007) 152 Cal. App. 4th 115, 133). Whether a practice violates the section “is generally a question of fact which requires ‘consideration and weighing of evidence from both sides’ and which usually cannot be made on demurrer.” [Citation]. (Id.)

The SAC states that “Plaintiff seeks restitution of his title to Vanalden, subject to any remaining disputed debt to Defendant EIJ which was to be adjudicated in this action.” (SAC ¶ 137.) It does not, however, apparently seek any restitution from Robinson or R&R. The claim therefore fails against these Defendants.

Defendants first move to strike the entire Complaint based on Plaintiffs’ purported failure to comply with this court’s August 30, 2022, Order. This court rejects this argument for the same reasons it did when Defendants raised it in the Demurrer, above.

Civil Code 3294(a) provides that when a “defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”

When considering the SAC as a whole, it does plead facts, that if true and proven at trial, are sufficient to support a potential finding that Defendants acted with malice, oppression, or fraud. Additionally, given the findings of this Court at the contempt trial of Mssrs. Robinson and Royston, it would be improper to strike the punitive damage claim as being requested by means of this motion to strike. Indeed, it shows unmitigated chutzpah. [FN 2]

Defendants next argue that Plaintiff’s request for a specific amount of punitive or exemplary damages should be stricken. In the Prayer for Relief, Vista seeks damages of $10,000,000., which presumably must include exemplary damages.

Defendants also move to strike all references to attorney’s fees. Courts are given “broad discretion” when ruling on a motion to strike. (Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699). Courts need not strike a prayer for attorney’s fees before a party “has had a full opportunity to determine, through discovery, whether a basis for recovery exists.” (Id.) Thus, the court will not strike the claim for attorney’s fees at this stage.

Defendants also move to strike various portions of the SAC that they contend contain “false facts,” “evidentiary facts,” “extraneous materials,” and typos. Defendants also address issues already raised and rejected in their Demurrer.

This court has read and considered Defendant’s various arguments and concludes that Defendants have failed to articulate any valid or recognized grounds to strike those portions from the SAC.

Judge of the Superior Court

FN 1 - For ease, this court refers to the “Second Amended Complaint and First Amended Supplemental Complaint” as the “Second Amended Complaint” or “SAC” herein.

FN 2- However, as noted in the Ruling on the Demurrer by Defendants Royston and AWBCO, where Plaintiff seeks punitive damages purely based on Defendants’ negligence, those allegations are insufficient to support an award of punitive damages. (SAC § 121, Prayer for Relief; Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949, 958 [“Mere negligence, even gross negligence, is not sufficient to justify an award” for punitive damages.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.