Case Number: KC066303    Hearing Date: April 24, 2014    Dept: O

Melstrom, et al. v. Green Tree Servicing, LLC, et al. (KC066303)

Defendant Greentree Servicing LLC’s DEMURRER TO FIRST AMENDED COMPLAINT

Respondent: Plaintiffs M. and P. Melstrom

TENTATIVE RULING

Defendant Greentree Servicing LLC’s demurrer to first amended complaint is SUSTAINED as to the 1st – 7th and 9th causes of action, and MOOT as to the 8th and 10th causes of action. The court will hear from plaintiff regarding any further specific facts which can be pled to support leave to amend.

JUDICIAL NOTICE is taken of Exhibits A-N.

1st CAUSE OF ACTION: PROMISSORY ESTOPPEL:
The elements are: 1) promise; 2) which the promisor should reasonably expect to induce action or forbearance; 3) of a definite and substantial character; 4) on the part of the promisee; 5) induces such action or forbearance; and 5) injustice can be avoided only by enforcement of the promise. (Lange v. Tig Ins. Co. (1998) 68 Cal. App. 4th 1179, 1185; C&K Eng’g Contractors v. Amber Steel Co. (1978) 23 Cal. 3d 1, 6.)

Pars. 28 and 32 allege that Defendant and Plaintiffs were “involved in negotiations.” However, the FAC does not allege any promise or specific agreement to delay foreclosure. The complaint only alleges a unilateral belief by plaintiff that foreclosure would be delayed. Such is insufficient. Demurrer is SUSTAINED .

2nd CAUSE OF ACTION: NEGLIGENT MISREPRESENTATION:
The elements of a cause of action for negligent misrepresentation are: (1)The defendant must have made a representation as to a past or existing material fact; (2) the representation must have been untrue; (3) regardless of his actual belief the defendant must have made the representation without any reasonable ground for believing it to be true; (4) the representation must have been made with the intent to induce plaintiff to rely upon it; (5) the plaintiff must have been unaware of the falsity of the representation; he must have acted in reliance upon the truth of the representation and he must have been justified in relying upon the representation; (6) and, finally, as a result of his reliance upon the truth of the representation, the plaintiff must have sustained damage. (Continental Airlines, Inc. v. McDonnell Douglas Corp. (1989) 216 Cal. App. 3d 388, 402.) A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant, under what authority to bind the corporation. (See Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.)

Pars. 34-36 allege conduct only, not any specific representation made by Defendant. Par. 37 alleges that Defendant did represent that “in order to go forward with the Short Sale Plaintiff would either have to get a court order approving the sale, or come out of Bankruptcy.” Par. 38 alleges that the representation was not true because Defendant conducted a sale. However, the fact that a sale was conducted does not mean the representation in Par. 37 was in anyway untrue. Plaintiff does not allege that Defendant promised “not” to conduct a sale. Further, the claim fails for lack of specificity. Demurrer is SUSTAINED.

3rd – 7th CAUSES OF ACTION:
Tender applies to any cause of action that is based on allegations of wrongful foreclosure or that seeks redress from foreclosure. (Abdallah v. United Sav. Bank (1996) 43 Cal.App.4th 1101, 1109; Arnolds Mgmt. Corp., 158 Cal.App.3d 579; Karlsen v. Gibralter Sav. & Loan Assn. (1974) 15 Cal.App.3d 112, 117.)

The FAC does not allege that Plaintiffs tendered the debt. Further, Plaintiffs fail to present any law to overcome the tender requirement. Plaintiff’s reliance on Cedano v. Aurora Loan Services, LLC (9th Cir. BAP 2012) 470 B.R. 522, 530, Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079, and Lester v. J.P.Morgan Chase Bank, N.A. (N.D. Cal. Feb. 20, 2013) WL 633333, *8 is misplaced because Plaintiff’s Loan was not securitized. (See RJN, Ex. H and I, showing Fannie Mae as the beneficiary, not a securitized pool.)

Further, where a mortgagee or trustee makes an unauthorized sale under a power of sale he and his principal are liable to the mortgagor for the VALUE OF THE PROPERTY AT THE TIME OF THE SALE IN EXCESS OF THE MORTGAGES AND LIENS against said property. (Munger v. Moore (1970) 11 Cal. App. 3d 1, 11.) Here, Plaintiffs admit they in fact have no equity in the property because they were pursuing a short sale. Therefore, the 4th cause of action additionally fails to allege monetary damages.

Additionally, the 3rd cause of action for Quiet Title fails because Green Tree does not claim any interest, let alone an adverse interest in the property. (See CCP 761.020(c) – The adverse claims to the title of the plaintiff against which a determination is sought.)

Demurrer is SUSTAINED.

9th CAUSE OF ACTION: VIOLATION OF B&P 17200:
The Unfair Business Practices Act shall include “any unlawful, unfair, or fraudulent business act or practice.” (B&P Code 17200.) 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.)

“To satisfy the narrower STANDING requirements imposed by Proposition 64, a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that the economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.… A plaintiff fails to satisfy the causation prong of the statute if he or she would have suffered “the same harm whether or not a defendant complied with the law.” … Jenkins’s third cause of action must also satisfy the second prong of the standing requirements under Business and Professions Code section 17204 (i.e., causation), which REQUIRED HER TO PLEAD A CAUSAL LINK BETWEEN HER ECONOMIC INJURY, THE IMPENDING NONJUDICIAL FORECLOSURE OF HER HOME, and the six unfair or unlawful acts allegedly committed by Defendants. (Bus. & Prof. Code, § 17204.) Importantly, Jenkins admits in both her SAC and opening brief that she defaulted on her loan. IT IS ALSO INDISPUTABLE JENKINS’S DEFAULT TRIGGERED THE LAWFUL ENFORCEMENT OF THE POWER OF SALE CLAUSE in the deed of trust, and it was the triggering of the power of sale clause that subjected Jenkins’s home to nonjudicial foreclosure…. As Jenkins’s home was subject to nonjudicial foreclosure because of Jenkins’s default on her loan, which occurred before Defendants’ alleged wrongful acts, Jenkins cannot assert the impending foreclosure of her home (i.e., her alleged economic injury) was caused by Defendants’ wrongful actions. Thus, even if we assume Jenkins’s third cause of action alleges facts indicating Defendants’ actions violated at least one of the UCL’s three unfair competition prongs (unlawful, unfair, or fraudulent), Jenkins’s SAC cannot show any of the alleged violations have a causal link to her economic injury.” (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal. App. 4th 497, 521.)

By the same reasoning, here Plaintiffs lack standing to pursue a B&P 17200 claim because they admit they defaulted on their loan, which in turn triggered foreclosure proceedings. Any wrongful conduct on the part of Defendant occurred after the default. Thus, Plaintiffs cannot show the unfair business practice has a causal link to an economic injury to Plaintiff. Demurrer is SUSTAINED.

8th and 10th CAUSES OF ACTION:
Violation of CC 2924.11 and CC 2924(a)(5): On 4/21/14, the 8th and 10th causes of action were dismissed. Accordingly, demurrer is MOOT.