Judge: Upinder S. Kalra, Case: 22STCV38807, Date: 2023-04-18 Tentative Ruling
Case Number: 22STCV38807 Hearing Date: April 18, 2023 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: April
18, 2023
CASE NAME: Great Curtis v. Prestige Default
Services, LLC, et al.
CASE NO.: 22STCV38807
DEMURRER
WITH MOTION TO STRIKE
MOVING PARTY: Defendants Prestige Default Services,
LLC, Ghidotti Berger, LLP, Michelle Ghidotti, Thomas O’Connell, and Planet Home
Lending, LLC
RESPONDING PARTY(S): None as of April 13, 2023.
REQUESTED RELIEF:
1. An
order sustaining the demurrer to all causes of action.
2. An
order striking portions of the Complaint that seek punitive damages.
TENTATIVE RULING:
1. Demurrer
is SUSTAINED, without leave to amend, to all causes of action.
2. Motion
to Strike is MOOT.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On December 14, 2022, Plaintiff Greta Curtis, Trustee of the
Gregory T. Curtis Turst DTD 9/21/19 (“Plaintiff”) filed a complaint against
Prestige Default Services, LLC, Planet Home Lending, LLC, WFG National Default
Services, First American Title Insurance Company, and Thomas O’Connell
(“Defendants.”) The complaint alleged five causes of action: (1) To Enjoin
Foreclosure, (2) Injunctive Relief, (3) Quiet Title, (4) Violation of Business
and Professions Code § 17200, and (5) An Accounting. Plaintiff alleges that
plaintiff’s predecessor Gregory T Curtis, as borrower, executed a promissory
note to Defendant Planet Home Lending, LLC, as well as a Deed of Trust for the
subject property. On August 31, 2022, Defendant Planet and Prestige recorded a
notice of default and election to sell. Plaintiff alleges that Defendants
failed to contact borrow a month before recording the notice of default,
engaged in dual tracking, denied Plaintiff’s loan modification after initially
granting it. Plaintiff seeks a determination that Plaintiff did not breach her
obligations and that the scheduled sale fo the subject property is wrongful.
On December 19, 2022, Plaintif field an Amendment to Complaint,
substituting Doe 1 as Michelle Ghidotti and Doe 2 as Ghidotti Berger LLP.
On January 26, 2023, Defendants Prestige Default Services,
LLC, Ghidotti Berger, LLP, Michelle Ghidotti, Thomas O’Connell, and Planet Home
Lending, LLC, filed a Motion to Strike. No Opposition has been filed as of
April 13, 2023.
On January 27, 2023, Defendants Prestige Default Services,
LLC, Ghidotti Berger, LLP, Michelle Ghidotti, Thomas O’Connell, and Planet Home
Lending, LLC, filed a Demurrer. No Opposition has been filed as of April 13,
2023.
LEGAL STANDARD
Demurrer
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. 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. …. 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.)
Motion to Strike
The court may, upon a motion, or at
any time in its discretion, and upon terms it deems proper, strike any
irrelevant, false, or improper matter inserted in any pleading. (Code Civ.
Proc., § 436(a).) The court may also strike all or any part of any pleading not
drawn or filed in conformity with the laws of this state, a court rule, or an
order of the court. (Id., § 436(b).)
The grounds for moving to strike must appear on the face of the pleading or by
way of judicial notice. (Id. § 437.) “When
the defect which justifies striking a complaint is capable of cure, the court
should allow leave to amend.” (Vaccaro v.
Kaiman (1998) 63 Cal.App.4th 761, 768.)
Meet and Confer:
Prior to filing a demurrer, the
demurring party is required to satisfy their meet and confer obligations
pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied
their meet and confer obligation by submitting a declaration pursuant to Code
of Civ. Proc. §430.41(a)(2) & (3). The Declaration of
Rachel C Witcher filed in conjunction with the Demurrer and Motion to Strike
indicates that counsel contacted Manu Eli Gonzalez, counsel for Plaintiff. On
the same day, counsel received an email from whom counsel assumes to be Greta,
opposing the motion. The parties arranged for a teleconference with Plaintiff’s
attorney John Barriage. On January 13, 2023, Defense counsel emails Plaintiff’s
counsel if an amended complaint would be filed, and Mr. Barriage indicated that
he would know Monday. On Janaury 16, 2023, Defense counsel emailed Mr. Barriage
about an update and requested an extension while Plaintiff determined if an
amended complaint would be filed. Greta then emailed and stated that an
extension would be provided under certain condition, which were “unacceptable.”
(Dec. Witcher ¶ 2-6.)
JUDICIAL NOTICE
Denied.
ANALYSIS:
First and Second Cause of Action: Declaratory
Relief and Injunctive Relief
Defendant argues that this cause
of action fails for various reasons. First, Plaintiff is not the borrower as
Plaintiff is a trust, not a natural person, and cannot be granted relief under
the Homeowner Bill of Rights (“HBOR.”) Second, the named Defendants are not
mortgage services, and the obligations cited in the complaint are for mortgage
services. Lastly, Plaintiff does not allege any material violation of the HBOR.
One, while Plaintiff discusses dual tracking, the evidence shows that there was
no complete application when the Notice of Default was recorded in August 2022.
Two, despite Plaintiff’s allegations that they violated the HBOR by failing to
comply with Civil Code § 2923.55, the evidence indicates that the Borrower “was
reviewed for a modification” before the Notice of Default and Borrower’s own
actions “in not clearing title consistent with the terms of the Deed of Trust
resulted in the inability to complete any modification.” (Demurrer 8: 14-18.)
To qualify for declaratory relief
under section 1060, plaintiffs were required to show their action (as refined
on appeal) presented two essential elements: “(1) a proper subject of
declaratory relief, and (2) an actual controversy involving justiciable
questions relating to the rights or obligations of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th
527, 546) ““Declaratory relief operates prospectively to declare future rights,
rather than to redress past wrongs.” (County
of San Diego v. State of California (2008) 164 Cal.App.4th 580, 607).
“Injunctive relief is a remedy,
not a cause of action.” (Guessous v.
Chrome Hearts, LLC (2009) 179 Cal.App.4th 1177, 1187.)
After
a review of the Complaint, the Court finds that these two causes of action
fail. First, injunctive relief is not a cause of action. Second, as Defendant
correctly points out, Plaintiff was not a borrower. “A “borrower” is “any
natural person who is a mortgagor or trustor and who is potentially eligible
for any federal, state, or proprietary foreclosure prevention alternative
program offered by, or through, his or her mortgage servicer.” Cal. Civ. Code §
2920.5(c)(1). Plaintiff was not the mortgagor or trustor under the subject deed
of trust, so he lacks standing to assert claims for violation of HBOR.” (In re Aarons (Bankr. C.D. Cal. 2022) 643
B.R. 595, 611, reconsideration denied (Bankr. C.D. Cal., Sept. 15, 2022, No.
2:19-BK-18316-NB) 2022 WL 4286456.) Here, the complaint specifically states in
paragraph 6 that Gregory T. Curtis, “as borrower, executed and delivered to
Banc One…” Third, under Civil Code § 2920.5, a mortgage servicer is “person or
entity who directly services a loan, or who is responsible for interacting with
the borrower, managing the loan account on a daily basis including collecting
and crediting periodic loan payments, managing any escrow account, or enforcing
the note and security instrument, either as the current owner of the promissory
note or as the current owner's authorized agent.” Here, there are no allegations
that indicate that Defendants were
mortgage servicers or were parties to the Loan or Deed of Trust.
Demurrer
as to the First and Second Cause of Action is SUSTAINED.
Third Cause of Action: Quiet Title
To establish a quiet title action under CCP § 761.020, the verified complaint must include:
“(a) a description of the property
that is the subject of the action, (b) the title of the plaintiff as to which a
determination under this chapter is sought and the basis of the title, (c) the
adverse claims to the title of the plaintiff against which a determination is
sought, (d) the date as of which the determination is sought, and (e) a prayer
for the determination of the title of the plaintiff against the adverse
claims.”
Further,
In an action
to quiet title, the complaint should allege,¿inter alia,¿the interest of the plaintiff in the property at the
time the action is commenced. [Citation] If plaintiff owns the property in fee,
a general allegation of ownership of the described property is sufficient.
[Citation] However, a general allegation of ownership is treated as a
conclusion if the detailed facts upon which the claim of ownership is
predicated are also alleged, and in such case, the specific facts will control
rather than the general allegation in determining whether the complaint states
sufficient facts to constitute a cause of action. [Citations] Actually, in such
circumstances only one cause of action is stated. [Citation] Accordingly, if
the specifically pleaded facts affirmatively reveal the absence of an essential
element in a plaintiff's claim of title, no cause of action is stated.¿
(Stafford v.
Ballinger (1962) 199 Cal. App. 2d 289, 292.)
Defendant argues
that Plaintiff has failed to demonstrate that Defendants have any interest in
the Property. Additionally, Plaintiff as a non-borrower does not have standing
to make an allegation concerning fraud, and fails to demonstrate how this fraud
claim would not be barred by the statute of limitations.
After a review of
the complaint, Plaintiff has failed to allege crucial facts for a cause of
action for quiet title. There are no factual allegations to indicate that
Defendants have an interest in the property at the time the action is commenced.
As stated above, the third element for a quiet title claim is the adverse
claims to the title. Here, there are not allegations of any adverse claims, let
alone claims by Defendants.
Demurrer
as to the Third Cause of Action is SUSTAINED.
Fourth Cause of Action: Violations of
Business and Professions Code § 17200 et seq.
California
Business and Professions Code section 17200 prohibits “any unlawful, unfair or
fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50
Cal.4th 605, 610.) “An unlawful business practice or act is an act or
practice, committed pursuant to business activity, that is at the same time
forbidden by law.” (Klein v. Earth
Elements, Inc. (1997) 59 Cal.App.4th 965, 969.) A violation of other laws
is deemed independently actionable under the UCL. (See Law Offices of Mathew Higbee v. Expungement Assistance Services (2013)
214 Cal.App.4th 544, 554.) “‘Virtually any law—federal, state or local—can
serve as a predicate for a section 17200 action.’” (Id. (quoting Troyk v. Farmers
Group, Inc. (2009) 171 Cal.App.4th 1305, 1335).)
“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).
Defendant argues that
this cause of action fails for various reasons. First, this claim appears to be
a derivative of the other cause of action, but the complaint does not clearly
indicate “how a non-borrower trust could possibly incur such damages,” like
late fees, loss of reputation, severe emotional distress, loss of appetite,
fear, anger, etc. Second, Plaintiff is not a person, but is a trust and
therefore unable to recover under the UCL. Third, the references to Civil Code
§ 3237.15 is inapplicable because it a provision of the Covid-19 Small Landlord
and Homeowner Relief Act of 2020 and was not in effect as of December 21, 2021.
Here, the Court finds
that the Complaint fails to provide sufficient factual allegations to support a
cause of action for a § 17200 violation. As stated in Khoury, there must be reasonable particularity as to the facts
supporting the elements of this violation. While the Plaintiff alleges that
“Defendants’ conduct, as alleged above, constitutes unlawful, unfair, and/or
fraudulent business practices,” this is insufficient. What specific conduct?
Was the conduct unfair? Unlawful? Fraudulent? If it was fraudulent, California
courts require particularity in pleading, which was not done here. Thus, the
Complaint fails to sufficient allege a cause of action for Violation of
Business and Professions Code § 17200.
Demurrer as to
the Fourth Cause of Action is SUSTAINED.
Fifth Cause of Action:
Accounting
“An action for an accounting has
two elements: (1) “that a relationship exists between the plaintiff and
defendant that requires an accounting” and (2) “that some balance is due the
plaintiff that can only be ascertained by an accounting.” (Sass v. Cohen (2020) 10 Cal.5th 861, 869).
Defendant argues that
there is no fiduciary or special relationship between the parties that would
require an accounting. Specifically, Plaintiff is not the Borrower. Even so,
the allegations in the complaint do not contain any facts that an accounting is
necessary or that another remedy is not possible.
After a review of the
complaint, Plaintiff has failed to assert a cause of action for accounting. This
cause of action contains two paragraphs, one of which is an incorporation
statement. The other paragraph simply states “The amount of money defendants
Planet, O’Connell, Prestige, owes to Plaintiff is unknown to plaintiff and
cannot be determined without an accounting.” (Comp. ¶ 30.) The complaint fails
to allege any special relationship between Plaintiff and Defendants, which is
the first requirement for an accounting cause of action.
Demurrer as to
the Fifth Cause of Action is SUSTAINED.
Leave to Amend:
Leave to amend should
be liberally granted if there is a reasonable possibility an amendment could
cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.)
The Plaintiff has the
burden of demonstrating that leave to amend should be granted, and that the
defects can be cured by amendment. (“Plaintiff must show in what manner he can
amend his complaint and how that amendment will change the legal effect of his
pleading.” Goodman v. Kennedy (1976)
18 Cal.3d 335, 349). Here, it is unlikely that Plaintiff will be able to amend
the complaint to fix the defects. Specifically, Plaintiff is not the borrower,
and thus has not standing under the HBOR.
Leave to Amend is
DENIED.
Motion to Strike:
Defendants move to
strike portions of the Complaint which seek punitive damages. However, as the
Court has sustained the entire complaint without leave to amend, the Motion to
Strike is MOOT.
CONCLUSION:
For the foregoing reasons, the
Court decides the pending motion as follows:
Demurrer is SUSTAINED, without
leave to amend as to all causes of action. Pursuant to CCP § 581d, this written
order of dismissal constitutes a judgment and shall be effective for all
purposes. The Clerk shall note this judgment in the register of actions in this
case.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: April
18, 2023 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court