Judge: Theresa M. Traber, Case: 22STCV21462, Date: 2023-02-15 Tentative Ruling
Case Number: 22STCV21462 Hearing Date: February 15, 2023 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: February 15, 2023 TRIAL DATE:
TBD
CASE: Antaliah Thomas Vinnai et al. v.
AMB LLC, et al.
CASE NO.: 22STCV21462 
DEMURRER
TO COMPLAINT
MOVING PARTY: Defendants AMB
LLC dba American MortgageBanc (“AMB”); Lawrence Kopppelman & Co
(“Lawrence”); the 1996 McDonough Family Trust, R. Emmet McDonough Trustee
(“McDonough Trust”); The Anticouni Family Trust (“Anticouni Trust”), and Ralph
Schiavone (“Schiavone”) (collectively, “Demurring Parties”)
RESPONDING PARTY(S): Plaintiffs
Antaliah Thomas Vinnai, Antoinette Thomas Love, individually and as successors
in interest to the Estate of Carrie Thomas (collectively, “Plaintiffs”)
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
Plaintiffs initiated this action on July 1, 2022 against Defendants Total
Lender; AMB; Lawrence; McDonough Trust; Anticouni Trust,
and Schiavone. In the Complaint, it is alleged that Decedent Carrie Thomas
(“Decedent”) took out a loan secured by a Deed of Trust (Document No.
20071724212) against the subject property commonly known as 4120 South
Normandie Avenue, Los Angeles, CA 90037.
The Deed of Trust was recorded on June 11, 2007, with AMB is the
originating lender of the loan. Decedent passed away on March 9, 2019. Prior to
her death, the subject property burned down on February 17, 2017. AMB and
Schiavone received funds from the Hartford to rebuild the subject property, but
reconstruction of the property is still incomplete. Plaintiffs, as executors of
Decedent’s estate, have attempted to assume and modify the existing loan.
However, while negotiations regarding the modification of the loan were
pending, Defendants proceeded with foreclosure proceedings after recording a
Notice of Default on March 2, 2022 (Document No. 20220239519). Based on these
allegations, Plaintiffs assert Defendants did not intend to provide them with a
chance to modify the loan in good faith. It is further alleged that Defendants
converted $100,000 in fire insurance proceeds.
The Complaint alleges the following causes of action: (1) violation of
Civ. Code § 2923.5; (2) violation Civ. Code § 2923.7; (3) violation of Civ.
Code § 2924.11; (4) promissory estoppel; (5) violation of Civ. Code § 2924.17;
(6) unfair business practices; (7) breach of implied covenant of good faith and
fair dealing; (8) injunctive relief (Civ. Code § 2924.12); (9) breach of
fiduciary duty; (10) conversion; (11) fraud; (12) intentional infliction of
emotional distress; (13) breach of contract; (14) accounting; (15) negligence;
(16) elder abuse; and (17) constructive eviction.
On September 26, 2022, the
Demurring Parties filed the instant demurrer to the Complaint in its entirety
for failure to state facts sufficient to constitute a cause of action and for
uncertainty. (See Notice of Demurrer at pp. 2-5.)
TENTATIVE RULING:
Demurring Defendants’ demurrer to
the Complaint is SUSTAINED in part in as to the ninth, tenth, twelfth,
fifteenth, and sixteenth causes of action without leave to amend and
OVERRULED in part as to the remainder.
DISCUSSION:
Demurring
Defendants demur to the Complaint in its entirety on the grounds that the
Complaint fails to state facts sufficient to constitute a cause of action and that
the Complaint is uncertain.
As a preliminary matter, Plaintiffs
concede that the ninth, tenth and twelfth causes of action for breach of
fiduciary duty, conversion and intentional infliction of emotional distress,
respectively, lack merit and agree to dismiss them. (See Opposition at
pg. 6.) Based on this admission, the Court finds that Demurring Defendants’
demurrer is sustained without leave to amend as to the ninth,
tenth and twelfth causes of action.
Request for Judicial Notice
The
court may take judicial notice of “official acts of the legislative, executive,
and judicial departments of the United States and of any state of the United
States,” “[r]ecords of (1) any court of this state or (2) any court of
record of the United States or of any state of the United States,” and “[f]acts
and propositions that are not reasonably subject to dispute and are capable of
immediate and accurate determination by resort to sources of reasonably
indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).)
Demurring Defendants request the Court to take judicial
notice of the following documents: (1) Notice of Default recorded
against the subject property in the County of Los Angeles Recorder’s Office on
March 2, 2022, as Document No. 20220239519; and (2) Notice of Sale recorded
against the subject property on June 10, 2022 in the County of Los Angeles
Recorder’s Office as Document No. 20220617837. The Court grants judicial notice
of these documents pursuant to Evidence Code § 452(d) and (h). (See Ordlock
v. Franchise Tax Bd. (2006) 38 Cal.4th 897, 911 fn. 8.)
Legal Standard
A demurrer 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 via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004)
116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the
evidence or other extrinsic matters. Therefore, it lies only where the defects
appear on the face of the pleading or are judicially noticed.” (SKF Farms v.
Superior Court (1984) 153 Cal.App.3d 902, 905.) “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, supra, 147
Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be
deemed true, as well as all facts that may be implied or inferred from those
expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37
Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984)
155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be
true”].) “This rule of liberal construction means that the reviewing court
draws inferences favorable to the plaintiff, not the defendant.” (Perez v.
Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)
Meet and Confer
Before filing a demurrer, the demurring party shall meet and confer in
person or by telephone with the party who has filed the pleading subject to the
demurrer and file a declaration detailing their meet and confer efforts.¿ (Code
Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is
not grounds to¿overrule or sustain a demurrer.¿ (Code Civ. Proc., §
430.41(a)(4).)
Demurring Defendants filed a meet and confer
declaration pursuant to Code of Civil Procedure § 430.41. (Declaration
of Demurring or Moving Party Regarding Meet and Confer, filed on September 26,
2022.) Unfortunately, the declaration
references a different case number and parties not before the Court. Thus, the statutory requirements to meet and
confer as to the dispute in this case has not been satisfied. Nevertheless, Plaintiffs
raise no objection regarding the lack of a meet and confer. Consequently, the
Court will proceed to address the merits of the demurrer despite this
deficiency. (Code Civ. Proc. § 430.41(a)(4).) The Court cautions the parties to
comply with relevant statutes and court rules in future filing; otherwise, a failure to do
so may result in the matter being taken off-calendar.
///
First, Second, and Third Causes
of Action: Violations of Civ. Code §§ 2923.5, 2923.7, and 2927.11
Demurring
Parties first argue that the first cause of action (violation of Civ. Code §
2923.5), second cause of action (violation of Civ. Code § 2923.7), and third cause
of action (violation of Civ. Code § 2924.11) asserted against them are subject
to demurrer. (Demurrer at pp.7-8.)
Under Civil Code § 2923.5, “A
mortgagee, trustee, beneficiary, or authorized agent may not file a notice of
default pursuant to Section 2924 until 30 days after initial contact is made as
required by paragraph (2) or 30 days after satisfying the due diligence
requirements as described in subdivision (g).” (Id.at (a)(1).) Also, “When a
borrower requests a foreclosure prevention alternative, the mortgage
servicer shall promptly establish a single point of contact and provide to the
borrower one or more direct means of communication with the single point of
contact.” (Civ. Code § 2923.7.) Moreover, when a foreclosure prevention
alternative is approved, a notice of default shall generally not be recorded.
(Civ. Code § 2924.11.)
Demurring Defendants point out that
compliance with the California Homeowners Bill of Rights (“HBOR”) applies to
owner-occupied properties and assert that the Complaint fails to allege that
the subject property was owner-occupied at the time that the Notice of Default
was recorded or at any relevant time alleged in the Complaint. (Demurrer at pp.
7-8, relying on Cal. Code Regs. Tit. 23, § 370.)
In
opposition, Plaintiffs assert that Demurring Defendants are relying on an
inapplicable definition of “owner-occupant” and that the Complaint alleges that
the subject property has been owner-occupied. (Opposition at pg. 6; Compl. ¶
1.) The Court agrees. Under the HBOR, owner-occupied refers to “the property is
the principal residence of the borrower and is security for a loan.” (Civ. Code
§ 2924.15(a).) Demurring Defendants’ reliance on a definition from regulations
relating to the Department of Water Resources is inapplicable in this case.
Further, the Complaint clearly alleges that the subject property has been
owner-occupied. (Compl. ¶ 1.) While Demurring Defendants contend that the
Complaint possesses an inherent contradiction (Reply at pg. 2), the issue of
whether the subject property had burned down prevents it from being
owner-occupied is beyond the scope of this demurrer.
Accordingly,
the Court OVERRULES the Demurring Defendants’ demurrer as to the first, second,
and third causes of action.
Fourth
Cause of Action: Promissory Estoppel
Next, Demurring Defendants demurs
to the fourth cause of action for promissory estoppel on the ground that it has
been insufficiently pleaded. (Demurrer at pp. 8-9.)
The elements of a promissory
estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2)
reliance by the party to whom the promise is made; (3)[the] reliance must be
both reasonable and foreseeable; and (4) the party asserting the estoppel must
be injured by his reliance.’ [Citation.]” (US Ecology, Inc. v. State
(2005) 129 Cal.App.4th 887, 901.)
Demurring Defendants reason that
they were under no duty to review or consider Plaintiff’s application for a
loan modification. (Demurrer at pg. 9, relying on Nymark v. Hear Fed. Sav.
& Loan Ass’n (1991) 231 Cal. App. 3d 1089.) Further, they assert that
the Complaint lacks details regarding the alleged promise. (Demurrer at pg. 9.)
In opposition, Plaintiffs argue
that Defendants promised they would not foreclose on the subject property as
long as parties negotiated an alternative to foreclosure. (Opposition at pg. 7;
Compl. ¶ 79.) Regardless of any duty that may be owed, the Complaint clearly
alleges that a promise was made about the conditions for preventing foreclosure
on the subject property. In addition, to the extent that Demurring Defendants
assert that this cause of action is uncertain, the Court is not persuaded. Even
if the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993)
14 Cal.App.4th 612 at 616.)
Accordingly, because the claim
promissory estoppel has been sufficiently alleged against Demurring Defendants,
the Court OVERRULES the demurrer to the fourth cause of action.
Fifth
Cause of Action for Violation of Civil Code § 2924.17
Demurring Defendants also demur to
the fifth cause of action for Violation of Civil Code § 2924.17 on the ground
that it has been insufficiently alleged. (Demurrer at pp. 9-10.)
“A declaration recorded pursuant to
2923.5… in connection with a foreclosure subject to the requirements of §2924,
or a declaration or affidavit filed in any court relative to a foreclosure
proceeding shall be accurate and complete and supported by competent and
reliable evidence.” (Civ. Code § 2924.17.)
Demurring
Defendants argue that the judicially noticeable Notice of Default and Notice of
Trustee’s Sale definitively show that they complied with Civil Code § 2924.17.
(Demurrer at pg. 9; RJN, Exh. 1-2.)
In
opposition, Plaintiffs maintain that the fifth cause of action is sufficiently
alleged because Demurring Defendants “failed to contact Plaintiffs to assess
them for alternatives to foreclosure prior to filing the [Notice of Default].”
(Opposition at pg. 8; Compl. ¶ 88.)
While the recorded
Notice of Default and Notice of Trustee’s Sale includes the deficiency amount
and is certified, as required under Civil Code §§ 2924c(b)(1) and 2924.17,
respectively, the Complaint alleges that Plaintiffs were not contacted prior to
the filing of the Notice of Default, which is required under Civil Code §
2923.5. (Compl. ¶ 88.) Thus, this cause of action has been sufficiently
pleaded.
Accordingly,
the Court OVERRULES the demurrer to the fifth cause of action.
Sixth Cause of Action for Unfair
Business Practices
Demurring
Defendants also demurs to the sixth cause of action for unlawful business
practices on the ground that has been insufficiently alleged. (Demurrer at pp.
10-12.)
The Unfair
Competition Law prohibits “any unlawful or fraudulent business act or
practice.” (Bus. & Prof. Code § 17200.) “To state a cause of action based
on an unlawful business act or practice under the UCL, a plaintiff must allege
facts sufficient to show a violation of some underlying law.” (People v.
McKal (1979) 25 Cal.3d 626, 635.) “A
plaintiff alleging unfair business practices under these statutes must state
with reasonable particularity the facts supporting the statutory elements of
the violation.” (Khoury v. Maly’s of California, Inc. (1993) 14
Cal.App.4th 612, 619.)
Here, Demurring
Defendants assert that none of its conduct is unfair, fraudulent or unlawful.
(Demurrer at pp. 12-13.)
In
opposition, Plaintiffs argue that it has been deprived of loss mitigation
options due to Defendants’ conduct and relies on Defendants’ alleged
intentional avoidance of their obligations. (Opposition at pp. 8-9.) The Court
agrees. Plaintiffs’ UCL claim relies on the violations of the HBOR. Because the
demurrers to the claims arising from violations of the HBOR have been overruled,
it follows that Plaintiff’s unfair business practice claim has been
sufficiently pleaded.
Accordingly,
the Court OVERRULES the demurrer to the sixth cause of action because it has
been sufficiently alleged against Demurring Defendants.
Seventh and Thirteenth Causes of
Action: Breach of Implied Covenant of Good Faith and Fair Dealing and Breach of
Contract
Demurring Defendants also demur to the seventh
and thirteen causes of action for breach of implied covenant of good faith and
fair dealing and breach of contract, respectively. (Demurrer at pp. 12-13.)
“A cause of action for damages for breach of
contract is comprised of the following elements: (1) the contract, (2)
plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach,
and (4) the resulting damages to plaintiff.” (Durell v. Sharp Healthcare (2010) 183
Cal.App.4th 1350, 1367.) “Further, the complaint must indicate on its face
whether the contract is written, oral, or implied by conduct. If the action is
based on an alleged breach of a written contract, the terms must be set out
verbatim in the body of the complaint or a copy of the written instrument must
be attached and incorporated by reference.” (Otworth v. Southern Pac.
Transportation Co. (1985) 166 Cal.App.3d 452, 458-459 (internal
citations omitted); Miles v. Deutsche Bank National Trust Co. (2015) 236
Cal.App.4th 394, 402 [“The correct rule is that ‘a plaintiff may plead the
legal effect of the contract rather than its precise language.’”].) “[A]ll essential
elements of a breach of contract cause of action[] must be pleaded with
specificity.” (Levy v. State Farm Mutual Automobile Ins. Co. (2007)
150 Cal.App.4th 1, 5.)
Here, the
Demurring Defendants argue that the factual allegations are insufficient to
support Plaintiffs’ claimed promises. (Demurrer at pg. 13.) The Court disagrees.
The Complaint alleges that Defendants breached their contractual obligations by
proceeding with a non-judicial foreclosure while loan modification negotiations
were pending (Compl. ¶¶ 119-121), as well as by failing to complete the
reconstruction of the subject property and converting insurance funds (Compl. ¶
171). This alleged conduct is attributable to Demurring Defendants and is
sufficient to support Plaintiffs’ claims.
Accordingly,
because Plaintiffs’ contract claims have been sufficiently alleged, the Court OVERRULES
the demurs to the seventh and thirteenth causes of action.
Eighth Cause of Action:
Declaratory and Injunctive Relief pursuant to Civil Code § 2924.12
Demurring
Defendants argue that the eighth cause of action is subject to demurrer because
it is derivative of Plaintiffs’ other HBOR claims. (Demurrer at pg. 13.)
However, because Plaintiff’s HBOR claims have been sufficiently pleaded, it
follows that this cause of action survives as well.
Accordingly,
the Court OVERRULES the demurrer to the eighth cause of action.
Eleventh Cause of Action: Fraud
Demurring Defendants also demur to the
eleventh cause of action for fraud because it has been insufficiently alleged.
The essential elements of fraud are
“(1) a misrepresentation, (2) with knowledge of its falsity, (3) with the
intent to induce another's reliance on the misrepresentation, (4) justifiable
reliance, and (5) resulting damage.” (Conroy
v. Regents of Univ. of Cal. (2009) 45 Cal. 4th 1244, 1255.) Any action
sounding in fraud must be pleaded with particularity. (City of Pomona v. Sup. Ct. (2001) 89
Cal.App.4th 793, 803.) A plaintiff must
plead facts in the complaint showing “how, when, where, to whom, and by what
means the representations [amounting to fraud] were tendered.” (Stansfield v. Starkey (1990) 220
Cal.App.3d 59, 73.)
Here, Demurring Defendants argue
that the fraud claim fails because the it has not been pleaded with the
requisite specificity. Complaint does not allege that it made any
misrepresentation to Plaintiffs or had an intention to defraud. (Demurrer at
pg. 16.)
In opposition, Plaintiffs argue
that the Complaint clearly alleges that Defendants engaged in fraud by
misrepresenting that they would consider foreclosure alternative measures. Upon
review of the Complaint, it is clear that that alleged fraudulent conduct was
advanced by AMB. (Compl. ¶¶ 158-165.) Consequently, the fraud claim has been
sufficiently alleged.
Accordingly, the Court OVERRULES
the demurrer to the eleventh cause of action.
Fourteenth Cause of Action:
Accounting
Demurring Defendants argue that the
claim for accounting is subject to demurrer because it is derivative of
Plaintiffs’ HBOR claims. (Demurrer at pg. 16.) As stated above, however, Plaintiff’s
HBOR claims have been sufficiently pleaded, so this cause of action survives as
well.
Accordingly, the Court OVERRULES
the demurrer to the fourteenth cause of action.
Fifteenth Cause of Action:
Negligence
Demurring Defendants demur to the
fifteenth cause of action for negligence and argue that lenders do not owe a
borrower a duty of care when processing loan modification applications. (Demurrer
at pg. 17.)
To plead a cause of action for
negligence a plaintiff must allege facts showing:
“(1)¿a¿legal¿duty¿of¿care¿toward¿the¿plaintiff; (2)¿a¿breach¿of that¿duty;
(3)¿legal¿causation; and (4)¿damages.” (Century Surety Co. v. Crosby
Insurance, Inc.¿(2004) 124 Cal.App.4th 116, 127.)
While Plaintiffs contend that there
is a “recent growing trend of California Courts find[ing] that a lender and
servicer owe a duty of care to a borrower during the loan modification review
process when they agree to review the borrower for a loan modification”
(Opposition at pg. 10), the Court finds that Plaintiff’s reliance on Alvarez
v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941, 951 and McDonald
v. Wells Fargo Bank, 374 F. Supp. 3d 462, is misplaced. As Demurring
Defendants have shown, there is recent authority from the California Supreme
Court that announced that a lender does not owe a tort duty sounding in general
negligence principles. (Sheen v. Wells Fargo Bank, N.A., (2022) 12 Cal.
5th 905, 915, 505 P.3d 625, 627, reh'g denied (June 1, 2022).) Therefore,
Plaintiffs’ negligence claim fails as a matter of law.
Accordingly, the Court SUSTAINS the
demurrer to the fifteenth cause of action without leave to amend.
Sixteenth Cause of Action: Elder
Abuse
Demurring Defendants argue that the
sixteenth cause of action for elder abuse is subject to demurrer because it has
been insufficiently alleged (Demurrer at pp. 17-18.)
To establish financial elder abuse,
the plaintiff must allege that the defendant took or retained the plaintiff’s
property; that the plaintiff was 65 years of age or older at the time of the
conduct; that the defendant took or retained the property for a wrongful use or
with the intent to defraud; that the plaintiff was harmed; and that the
defendant’s conduct was a substantial factor in cause the plaintiff’s harm.
(See Welf. & Inst. Code § 15610.30.)
In opposition, Plaintiffs argue
that all the required elements have been alleged to support their claim for
elder abuse. (Opposition at pg. 11.) However, the Complaint concedes that the
Decedent passed away on March 9, 2019, and upon review of the allegations of
the elder abuse claim, they are premised on Demurring Defendants’ conduct with
regard to the subsequent loan modification negotiations and foreclosure.
(Compl. ¶¶ 16, 119-205.) Also, the work on rebuilding the subject property did
not stop until October 6, 2021. (Comp. ¶ 16.) Thus, the Complaint fails to allege
how Demurring Defendant’s conduct after Decadent’s death could
have caused harm to Decedent.
Accordingly, the Court SUSTAINS the
demurrer to the sixteenth cause of action without leave to amend.
Seventeenth Cause of Action:
Constructive Eviction
Lastly, Demurring
Defendants argue that the seventeenth cause of action for constructive eviction
is subject to demurrer because the Complaint fails to allege that they were the
landlord of the subject property. (Demurrer at pg. 18.)
“A
constructive eviction occurs when the acts or omissions . . . of a landlord, or
any disturbance or interference with the tenant's possession by the landlord,
renders the premises, or a substantial portion thereof, unfit for the purposes
for which they were leased, or has the effect of depriving the tenant for a
substantial period of time of the beneficial enjoyment or use of the premises.”
(Groh v. Kover's Bull Pen, Inc.
(1963) 221 Cal. App. 2d 611, 614.)
In
opposition, Plaintiffs assert that this cause of action has been sufficiently
alleged because intolerable conditions arose in the subject property because
Defendants withheld fire insurance proceeds and failed to comply with the HBOR,
thus forcing Plaintiffs to abandon the subject property. (Demurrer at pg. 12;
Compl. ¶ 207.) While Plaintiffs concede that the conversion claim fails as to the
Demurring Defendants, the claims for violations of the HBOR have survived the instant
demurrer. Consequently, the claim for constructive eviction has been
sufficiently alleged as to Demurring Defendants as well.
Accordingly,
the Court OVERRULES the demurer as to the seventeenth cause of action.
CONCLUSION:
For the reasons above, the Demurring
Defendants’ demurrer to the Complaint is SUSTAINED in part in as to the ninth,
tenth, twelfth, fifteenth, and sixteenth causes of action without leave
to amend and OVERRULED in part as to the remainder.
Moving
Party to give notice.
IT IS SO ORDERED.
Dated: February 15, 2023 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@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.