Judge: Stephen P. Pfahler, Case: 23CHCV01341, Date: 2023-11-22 Tentative Ruling
Case Number: 23CHCV01341 Hearing Date: November 22, 2023 Dept: F49
Dept.
F-49
Date:
11-22-23
Case
#23CHCV01341
DEMURRER TO THE COMPLAINT
MOVING
PARTY: Defendants, FCI Lender Services, Inc., et al.
RESPONDING
PARTY: Plaintiff, Wvistano Perez
RELIEF
REQUESTED
Demurrer
to the Complaint
·
1st
Cause of Acton: Violation of Civil Code section 2923.5
·
2nd
Cause of Action: Violation of Civil Code section 2923.7
·
3rd
Cause of Action: Declaratory Relief
·
4th
Cause of Action: Violation of Business and Profession Code section 17200
SUMMARY
OF ACTION
On
February 3, 2022, plaintiff Wvistano Perez took out a $2,000,000 mortgage as to
a residence located at 20708 W Bluebird Court, Porter Ranch. Plaintiff
subsequently fell into arrears with the payments, thereby leading to the
initiation of foreclosure by the lenders, deed of trust holders, etc.,
defendants FCI Lender Services, Inc., Puerto Loreto LLC, and California TD
Specialists. The property sold in a trustee sale. Plaintiff alleges Defendants
improperly proceeded with the sale rather than providing for sufficient
accommodation to work out potential alternatives to foreclosure such as loan
modification.
On
May 5, 2022, Plaintiff filed a complaint for Violations of Civil Code section
2923.5 and 2923.7, Declaratory Relief, and Violation of Business and Profession
Code section 17200. On May 12, 2023, the court denied the ex parte application
for TRO/Preliminary Injunction.
RULING: Sustained with Leave
to Amend.
Request
for Judicial Notice: Granted.
The
court takes judicial notice of the deeds and foreclosure related documents.
Defendants
FCI Lender Services, Inc., Puerto Loreto LLC, and California TD Specialists submit
a demurrer to the entire complaint on grounds of standing, inability to state a
violation under the Homeowner Bill of Rights, and lack of facts in support.
Plaintiff in opposition maintains standing, and sufficient facts, including the
propriety of the claims under the Homeowners Bill of Rights. Defendants in
reply reiterates the arguments on standing, lack of applicability of the HBOR,
and failure to state any statutory violations.
A
demurrer is an objection to a pleading, the grounds for which are apparent from
either the face of the complaint or a matter of which the court may take
judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311,
318.) The purpose of a demurrer is to challenge the sufficiency of a pleading
“by raising questions of law.” (Postley
v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a
pleading, for the purpose of determining its effect, its allegations must be
liberally construed, with a view to substantial justice between the parties.”
(Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or conclusions
of fact or law . . . .” ’ ” (Berkley v.
Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the
court liberally construes the complaint to determine whether a cause of action
has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th
726, 733.)
Standing
Defendants challenge the lack of
standing on grounds that Plaintiff never owned the property and the foreclosure
further precludes any claims based on current ownership. The February 17, 2022,
recorded quitclaim deed indicates the property was owned by Wvistano Perez as a
Trustee of the Lerma Family Trust dated September 8, 2021. [Req. Jud. Not., Ex.
3.] The deed of trust trust indicates the trust was the borrower. The trust is
therefore the proper party in in interest. Wvistano Perez therefore lacks standing to prosecute the complaint as
individual, and the operative complaint lacks any indication that the action is
being prosecuted as trustee. (Grappo v. McMills (2017) 11
Cal.App.5th 996, 1000; Estate of Bowles (2008) 169 Cal.App.4th 684,
691.)
Other than reliance on paragraph
13 of the unverified complaint alleging ownership of the property and Exhibit A
presented as evidence of the deed of trust on the property itself, establishing
Plaintiff was not the borrower, Plaintiff offers no legally supported argument
in opposition. The demurrer is sustained as to the entire complaint on this
basis.
Residence
Defendant challenges the complaint
on grounds that subject property constituted an investment property, not a
personal residence. The Homeowners Bill of Rights (HBOR) only applies to the
first lien mortgage and deed of trust secured by owner occupied residential
property containing no more than four units. (Civ. Code, § 2924.15,
subd. (a).) Paragraph one (1) of the complaint states the property constituted
a personal and primary residence. The court cannot rely on extrinsic evidence
in support of the demurrer. The argument is overruled.
1st
Cause of Acton: Violation of Civil Code section 2923.5
2nd
Cause of Action: Violation of Civil Code section 2923.7
Defendants again maintain a lack of application due to the
underlying business loan to secure an investment property. Again, the argument
relies on inadmissible extrinsic evidence and inference, and therefore will not
support the argument. The demurrer on this particular argument is overruled.
3rd
Cause of Action: Declaratory Relief
Defendants challenge the declaratory relief claim on grounds
of no ongoing actual controversy regarding the property given the successful
trustee deed upon sale. Plaintiff maintains a properly presented claim.
Declaratory relief arises under Code of Civil Procedure
section 1060, which states in part:
“Any person interested under a written instrument … or under
a contract, or who desires a declaration of his or her rights or duties with
respect to another, or in respect to, in, over or upon property … may, in cases
of actual controversy relating to the legal rights and duties of the respective
parties, bring an original action or cross-complaint in the superior
court for a declaration of his or her rights and duties in the premises,
including a determination of any question of construction or validity arising
under the instrument or contract. He or she may ask for a declaration of rights
or duties, either alone or with other relief; and the court may make a binding
declaration of these rights or duties, whether or not further relief is or
could be claimed at the time. The declaration may be either affirmative or
negative in form and effect, and the declaration shall have the force of a
final judgment. The declaration may be had before there has been any breach of
the obligation in respect to which said declaration is sought.”
“[U]nder California rules, an actual controversy that is
currently active is required for such relief to be issued, and both
standing and ripeness are appropriate criteria in that determination. (Citation.)
One cannot analyze requested declaratory relief without evaluating the nature
of the rights and duties that plaintiff is asserting, which must follow some
recognized or cognizable legal theories, that are related to subjects and
requests for relief that are properly before the court.”
(Otay Land Co.v. Royal
Indemn. Co. (2008) 169 Cal.App.4th 556, 563.)
“[Declaratory relief] serves to set controversies at rest
before they lead to repudiation of obligations, invasion of rights or
commission of wrongs; in short, the remedy is to be used in the interests of
preventive justice, to declare rights rather than execute them.” (Travers v. Louden (1967) 254
Cal.App.2d 926, 931.)
The third cause of action appears to the challenge the
propriety of the foreclosure sale itself. [Comp., ¶¶ 54-56.] To the extent
Plaintiff fails to establish a basis of standing, the court additionally finds
Plaintiff lacks support for a claim of a wrongful trustee sale. (See Knapp v. Doherty (2004) 123 Cal.App.4th 76, 96; Moeller v. Lien (1994) 25 Cal.App.4th 822, 831.) The
conclusion of the trustee sale renders any and all claims a matter of monetary
recovery. Nothing in the complaint otherwise alleges any irregularity in the
sale itself, including wrongful conduct by the bona fide purchaser for value.
[Req. Jud. Not., Ex. 5.] (Civ. Code, § 2924.12; Monterossa v. Superior Court of Sacramento County (2015) 237
Cal.App.4th 747, 753.)
To the extent Plaintiff challenges the foreclosure itself
without sufficient facts, the court finds no basis for the statement of a
declaratory relief cause of action. The court otherwise finds no basis for
declaratory relief based on a claim of monetary damages. The demurrer is
therefore sustained to this specific cause of action on this basis as well as
standing.
4th
Cause of Action: Violation of Business and Profession Code section 17200
Defendants challenge the subject cause of action on grounds
of failure to articulate any wrongful conduct. Plaintiff cites back to the
statutory sections as the basis of support for wrongful conduct.
“The UCL does not proscribe specific acts, but broadly
prohibits ‘any unlawful, unfair or fraudulent business act or practice and
unfair, deceptive, untrue or misleading advertising....’” [¶] “‘A private
plaintiff must make a twofold showing: he or she must demonstrate injury in
fact and a loss of money or property caused by unfair competition.’ (Citation.)” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1359.) Fact
specific pleading is not required in order to allege an unfair business
practice. (Quelimane Co. v. Stewart Title
Guaranty Co. (1998) 19 Cal.4th 26, 46–47.
An “unlawful” practice “means any
practices forbidden by law, be it civil or criminal, federal, state, or
municipal, statutory, regulatory, or court-made.… ‘Unfair’ simply means any
practice whose harm to the victim outweighs its benefits. (Citation.)
‘Fraudulent,’ as used in the statute, does not refer to the common law tort of
fraud but only requires a showing members of the public ‘“are likely to be
deceived.”’” (Saunders v. Superior
Court (1994) 27 Cal.App.4th 832, 838–839.) “[A]n unfair
business practice also means” the relied upon public policy provision is
“tethered” to a specific regulatory provisions. (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 81.)
Plaintiff can rely on the HBOR in support of the claim for
unfair business practices as a result of alleged, material violations. (Monterossa v. Superior Court of Sacramento
County, supra, 237 Cal.App.4th at p. 753.) The complaint
sufficiently alleges violations of the HBOR. [Comp., ¶¶ 60-62.] The demurrer is
overruled on this particular argument.
In summary, the demurrer is sustained with leave to amend on
the entire complaint on grounds of standing and lack of a declaratory relief
claim. Plaintiff is granted 30 days leave to amend.
Plaintiff may NOT add any new claims or causes of action. “Following an order sustaining a demurrer
or a motion for judgment on the pleadings with leave to amend, the plaintiff
may amend his or her complaint only as authorized by the court's
order. (Citation.) The plaintiff may not amend the complaint to add a new
cause of action without having obtained permission to do so, unless the new
cause of action is within the scope of the order granting leave to amend.” (Harris v. Wachovia Mortgage,
FSB (2010)
185 Cal.App.4th 1018, 1023.) Plaintiff may however substitute in the
trust and/or a trustee for purposes of prosecuting this action.
Any additional claims or new causes action will be subject
to a motion to strike. If Plaintiff fails to amend the complaint, Defendants
may move for an ex parte dismissal of the entire action upon the lapse of the
amendment deadline.
Case Management Conference also set for May 9, 2024.
Defendant to provide notice.