Amjad Al-asad v. Bank of America

Case Name:   Al-asad, et al. v. Bank of America, N.A., et al.

Case No.:       1-13-CV-251592

In March 2009, plaintiff Amjad Al-Asad (“Plaintiff”) contacted defendant Bank of America, N.A. (“BofA”) and spoke with a representative to see if he could receive a modification on the subject loan.  (See second amended complaint (“SAC”), ¶¶ 14, 54.)  The representative told him that he was required to miss three consecutive payments in order to even qualify for a modification or forebearance agreement.  (See SAC, ¶ 54.)  Plaintiff missed three consecutive payments.  (See SAC, ¶ 14.)  In July 2009, Plaintiff was laid off from his job as an engineer at Intel.  (See second amended complaint (“SAC”), ¶¶ 13, 16.)  After he was laid off, later that month, Plaintiff began contacting BofA to request a modification.  (See SAC, ¶ 17.)  Plaintiff was told to send in financial documents—which he did—but he did not receive a response.  (See SAC, ¶ 17.)  In September 2009, Plaintiff purchased a restaurant, using funds from his 401k.  (See SAC, ¶ 19.)  In early 2010, the restaurant began turning a small profit, so Plaintiff contacted BofA again to work on a modification.  (See SAC, ¶ 20.)  When Plaintiff thereafter attempted to make a payment for the first time since March 2009, he was told that his loan was closed and that he could not make another payment unless he paid arrearages of approximately $90,000 and $5,000 in fees to reopen his loan.  (See SAC, ¶ 22.)

 

In May 2012, Plaintiff was given a new job with Intel and again reached out to BofA regarding a modification.  (See SAC, ¶ 23.)  In late 2012 or early 2013, BofA employee Christina Villegas sent Plaintiff a HAMP package for Plaintiff to complete, and Plaintiff sent the requested documents, but did not hear from Ms. Villegas.  (See SAC, ¶ 25.)  After several new customer relations agents, in March 2013, Plaintiff spoke with BofA employee Henry Lau who told Plaintiff that he would receive a modification, although he was not sure what sort of modification Plaintiff would receive, and whether it would be a HAMP modification.  (See SAC, ¶¶ 28, 55.)  Moreover, Plaintiff asked whether he could take steps to improve the subject property, to which Lau told Plaintiff that “it is your house and you should keep it in the best condition” and that the modification was in front of the underwriter for final terms to be set.  (See SAC, ¶¶ 29, 55.)  On June 3, 2013, Lau wrote to Plaintiff that Plaintiff did not qualify for a HAMP loan because the subject loan’s investor, a sub-group of Wells Fargo Bank, N.A., did not give BofA the contractual authority to modify the loan.  (See SAC, ¶ 30.)  In October 2013, Plaintiff was informed that BofA assigned the servicing rights to Nationstar Mortgage, LLC.  (See SAC, ¶ 32.)

 

On March 28, 2014, Plaintiff filed the SAC, asserting claims for: intentional misrepresentation; negligent misrepresentation; promissory estoppel; unfair business practices; and, violation of Civil Code section 2923.7.

 

Defendants BofA and Wells Fargo Bank, N.A., as trustee for the certificateholders of Banc of America Mortgage Securities, Inc. Mortgage Pass-through Certificates, Series 2004-A (“Wells”) (collectively, “Defendants”) demur to each cause of action of the SAC on the ground that they do not state facts sufficient to constitute a cognizable cause of action.

 

Requests for judicial notice

 

Both Plaintiff and Defendants request judicial notice of the Court’s March 14, 2014 order regarding the demurrer to the first amended complaint.  The requests for judicial notice as to this order are GRANTED.  (Evid. Code § 452, subd. (d).)

 

Defendants additionally request judicial notice of the deed of trust, and the assignment of the deed of trust.  The request for judicial notice is GRANTED as to these documents.  (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382, quoting Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal. App. 4th 1106, 1117; see also Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549; see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 (stating that “a court may take judicial notice of the fact of a document’s recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document’s legally operative language… [and, f]rom this, the court may deduce and rely upon the legal effect of the recorded document”); see also Stormedia Inc. v. Super. Ct. (Werczberger) (1999) 20 Cal.4th 449, 457, fn.9; see also Evid. Code § 452, subds. (c), (d), (h).)

 

Finally, Defendants request judicial notice of an opinion in Boza v. US Bank, N.A. (Case No. 2:12-CV-06993-JAK-FMO).  The request for judicial notice is GRANTED as to its existence.  (Evid. Code §§ 451, subd. (a), 452, subd. (h).)

 

Fifth cause of action for violation of Civil Code section 2923.7

 

The fifth cause of action alleges violation of Civil Code section 2923.7.  The statute clearly requires that the borrower make a specific request for a single point of contact.  (See Civ. Code § 2923.7, subd. (a); see also Williams v. Wells Fargo Bank, NA (C.D.Cal. Jan. 27, 2014) 2014 U.S. Dist. LEXIS 17215 *1, *24.)  The SAC does not allege any such request.  Moreover, the SAC complains that Christina Villegas did not continue to be his point of contact, and due to Villegas’ departure from BofA’s department, Plaintiff’s modification would have been processed sooner and Villegas would not have assured a loan modification in the manner that Lau did.  As stated in the Court’s prior order, these facts again do not support causation and damages.

 

Finally, as Defendants argue, the SAC does not allege a breach of section 2923.7.  Although section 2923.7 states that “[t]he single point of contact shall remain assigned to the borrower’s account until the mortgage servicer determines that all loss mitigation options offered by, or through, the mortgage servicer have been exhausted or the borrower’s account becomes current,” (Civ. Code § 2923.7, subd. (c)), the statute clearly does not intend to prohibit an employee from leaving his/her employment, or require an employer to refuse an employee’s departure from employment, or in any other way force that employee to remain as a point of contact.

 

Such a construction of the statute would lead to an absurd result, and any such construction of a statute’s language must avoid absurd results.  (See Times Mirror Co. v. Super. Ct. (State of Cal.) (1991) 53 Cal.3d 1325, 1335, fn.7 (stating that “[t]he literal meaning of the words of a statute may be disregarded to avoid absurd results”); see also Lab. Code § 2922 (stating that “[a]n employment, having no specified term, may be terminated at the will of either party on notice to the other”); see also Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 677 (stating that “employer and employee are free to agree to a contract terminable at will or subject to limitations… [t]heir agreement will be enforced so long as it does not violate legal strictures external to the contract, such as… prohibitions on indentured servitude”).)

 

Plaintiff does not demonstrate that he can amend the fifth cause of action to allege facts sufficient to constitute any cause of action.  (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).)

 

The demurrer to the fifth cause of action is SUSTAINED without leave to amend.

 

Third cause of action for promissory estoppel

 

The third cause of action for promissory estoppel is premised on Lau’s promise that Plaintiff would receive a modification.  (See SAC, ¶ 72.)  However, the SAC plainly alleges that Lau stated that he “was not sure what sort of modification Plaintiff would receive.”  (SAC, ¶¶ 28, 55.)  “Estoppel cannot be established from such preliminary discussions and negotiations.”  (National Dollar Stores, Ltd. v. Wagnon (1950) 97 Cal.App.2d 915, 919.)  “A promise is an indispensable element of the doctrine of promissory estoppel… [and t]he promise must, in addition, be ‘clear and unambiguous in its terms.’”  (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.)  Here, the SAC clearly alleges that there were no terms.  It is entirely possible that the terms of any modification—considering that Plaintiff started earning more income in his job and additional income from the investment’s profits—would have been less favorable.

 

Here, as Defendants argue, the SAC cannot state a claim for promissory estoppel as it does not allege a promise.  Plaintiff does not demonstrate that he can amend the third cause of action to allege facts sufficient to constitute any cause of action.  (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).)

 

The demurrer to the third cause of action is SUSTAINED without leave to amend.

 

Fraud causes of action (first and second causes of action)

 

The first two causes of action are premised on three misrepresentations:  the March 2009 representation over the phone by an unknown person that Plaintiff was required to miss three payments to qualify for a modification; the March 2013 representations by Henry Lau that he did not have Plaintiff’s documents, and that if he reapplied for a modification, he would receive a modification, albeit one potentially worse than the existing loan; and, the June 2013 representation by Lau that Plaintiff would not receive a loan modification because a sub-group of Wells Fargo, the investor of Plaintiff’s loan, did not participate in HAMP.

 

The March 2009 representations (“Misrepresentation #1”) cannot be a basis for the fraud claims.

 

To the extent that the first two causes of action are premised on the March 2009 representation, Defendants are correct that those claims would be time-barred.  (Code Civ. Proc. § 338, subd. (d).)  In opposition, Plaintiffs do not contest that such claims premised on the March 2009 representation are time-barred, but instead note that the prior order stated that “this is not a proper basis for demurrer given that Plaintiff also alleges misrepresentations within the statutory period”, citing to Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, which itself stated that “a demurrer cannot rightfully be sustained to a part of a cause of action.”  (Id. at p.1047.)  The Court hereby corrects this statement from the March 14, 2014 order.  It is true that a demurrer cannot be sustained to a part of a cause of action.  However, where, as here, a fraud claim is based on multiple misrepresentations where some are time-barred and the remainder of the misrepresentations otherwise fail to state facts sufficient to constitute a fraud cause of action, the demurrer is properly sustained as to that cause of action on the ground that the entirety of the fraud cause of action fails to state facts sufficient to constitute a cause of action.  (See Code Civ. Proc. § 430.10, subd. (e).)

 

Moreover, the March 2009 representation does not allege facts constituting a misrepresentation.  (See Lazar v. Super. Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal.4th 631, 638 (requiring a false representation, concealment or nondisclosure as an element of a fraud claim).)  The March 2009 representation alleges that some unknown person told Plaintiff that he needed to miss three payments to qualify for a forbearance plan with BofA and that such representation was false because BofA did not intend to grant him a loan modification, and default is not a prerequisite for HAMP modification consideration.   (See SAC, ¶¶ 14 (stating that “Plaintiff… was told by an employee of BOFA that he must miss three consecutive monthly payments in order to qualify for any program related to a modification of his home loan… [s]pecifically… a forbearance plan”), 54.)  However, it does not follow that the purported requirement to miss three payments to qualify for a forbearance (or loan modification) with BofA is false because BofA allegedly did not intend to grant Plaintiff a loan modification.  Similarly, if default was not a requirement for a HAMP modification consideration, it does not preclude a servicer’s requirement to have a borrower miss three payments in order to qualify for a forbearance.  Plaintiff may not attempt to avoid the specific allegation pleaded by broadening the misrepresentation to include “a modification or forbearance agreement.”  (See Lazar, supra, 12 Cal.4th at p.645 (requiring specificity in the pleading of a fraud claim).)

 

Nevertheless, even if the “representation” were to concern the qualifications for a loan modification, this would be a representation of a future act.  (See Von Schrader v. Milton (1929) 96 Cal.App. 192, 200 (stating that “[a] mere promise to perform an act in the future is not, in a legal sense, a representation, nor does a failure to perform such promise convert it into a false representation”); see also Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158 (stating that “predictions as to future events, or statements as to future action by some third party, are deemed opinions, and not actionable fraud”).)  As stated above, this is not a promise without intent to perform, even though the SAC alleges that BofA did not intend to grant him a loan modification; the representation regarding the qualifications for a forbearance or loan modification agreement does not address the granting of a loan modification.  Moreover, unlike the allegations regarding the interaction with Ms. Villegas and the 2013 representations that specifically discuss application for a HAMP modification, there is no allegation that Plaintiff was pursuing a HAMP modification in 2009—just a modification.  The SAC references that BofA also offers “in-house modifications.”  Thus, it is entirely possible that BofA requires a borrower to be in default for three payment periods in order to qualify for an in-house modification and to the extent that it is based on an in-house modification, the claims are obviously without merit.

 

To the extent that the claim is based on a breach of the HAMP agreement that Plaintiff believes does not require default, Plaintiff lacks standing to assert such breach.  (See Warner v. Wells Fargo Bank, N.A. (C.D.Cal. 2011) 2011 U.S. Dist. LEXIS 66551 *1, *9-*10; see also Kilaita v. Wells Fargo Home Mortgage, et al. (N.D.Cal. 2011) 2011 U.S. Dist. LEXIS 142524 *1, *26-*27 (stating that “[t]he nature of HAMP does not provide Plaintiffs with a private right of action”; also stating that “[q]ualified borrowers under HAMP “‘would not be reasonable in relying on the Agreement as manifesting an intention to confer a right on him because the agreement does not require [a loan servicer to] modify eligible loans… [and t]hus, Plaintiffs lack standing to challenge HAMP compliance”); see also Cleveland v. Aurora Loan Servs., LLC (N.D.Cal. 2011) 2011 U.S. Dist. LEXIS 55168 (stating that “numerous courts have determined that individual borrowers do not have standing to sue under a HAMP SPA because they are not intended third-party beneficiaries of the SPA… [and] have ruled that there is no express or implied private right of action to sue lenders or loan servicers for violation of HAMP”; also stating that since “the alleged HAMP violations are not actionable, [they] thus cannot be used to support a claim under § 17200”).)

 

Plaintiff may not recast the claim as one for fraud to simply avoid the lack of standing to claim violation of the HAMP agreement.  (See Freeman Invs., L.P. v. Pac. Life Ins. Co. (9th Cir. Cal. 2013) 704 F.3d 1110, 1116 (stating that parties may not recast claims for breach of contract as ones for fraud claims); see also BFGC Architect Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 853 (stating that “[a] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations”); see also Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1041 (stating same).)  To the extent that the first two causes are based on the 2009 misrepresentation, they are without merit.

 

The March 2013 representations (“Misrepresentation #2) cannot be a basis for the fraud claims.

 

The SAC alleges that, in March 2013, Henry Lau told Plaintiff that: he did not have the documents Plaintiff had sent to Christina Villegas; Plaintiff would have to reapply for a HAMP modification; Lau was uncertain as to what type of modification he would receive, but if he applied, he would get a modification; and, when Plaintiff inquired as to whether he could make improvements, Lau responded that “it is your house and you should keep it in the best condition.”

 

As to the first alleged misrepresentation regarding the lack of receipt of the documents, there are no alleged damages based on this alleged misrepresentation.  (See Lazar, supra, 12 Cal.4th at p.638 (requiring damages as an element of a fraud claim).)  If Plaintiff was never to receive a loan modification whatsoever, he certainly could not have been damaged by any delay as there never would have been any modification.  To the extent that the claim based on this alleged misrepresentation is an attempt at alleging a promise without intent to perform, he did not suffer any damages, as explained in the prior order.  (See March 14, 2014 order re: demurrer to the FAC, p.5:20-24 (stating “[c]ontrary to Plaintiff’s argument in his opposition papers, his participation in the modification process is not in and of itself adequate to support a claim for damages”, citing Lueras v. BAC Home Loans Servicing, LP, supra, 221 Cal.App.4th at p.79 (itself stating that “[t]ime and effort assembling materials for an application to modify a loan is the sort of nominal damages subject to the maxim de minimis non curat lex—i.e., the law does not concern itself with trifles”); see also Lazar, supra, 12 Cal.4th at p.638 (requiring damages as an element of a fraud claim).)

 

As to the second alleged misrepresentation regarding the obtaining of a modification, there are no resulting damages or justifiable reliance because, as the SAC alleges, Lau was uncertain as to what type of modification Plaintiff would receive, and it was entirely possible that Plaintiff would receive a modification with terms detrimental to Plaintiff.  (See Lazar, supra, 12 Cal.4th at p.638 (requiring both as elements of a fraud claim); see also Blake v. Paramount Pictures, Inc. (D. Cal. 1938) 22 F.Supp. 249, 252 (stating that “[t]o be fraudulent as having been made without intention to perform, a promise must be specific, definite”).)

 

Moreover, Plaintiff cannot have justifiably relied on any promise without intent to perform because the SAC alleges that BofA specifically told him in 2010 that his loan was already closed and that Plaintiff could only reopen his loan if he paid arrearages of approximately $90,000 as well as approximately $5,000 in fees; thus, the servicer was already allowed to collect fees, penalties and foreclose on the subject property at any time at the time of the alleged misrepresentation—the alleged intent for the promise without intent to perform claim as to this particular misrepresentation.  (See SAC, ¶¶ 14, 22, 55, subpara. (e); see also Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 60 (stating that “no liability attaches if the damages sustained were otherwise inevitable or due to unrelated causes”); see also Bezaire v. Fidelity & Deposit Co. (1970) 12 Cal.App.3d 888, 893 (stating that “[a] fraudulent misrepresentation is not actionable unless plaintiff’s conduct on reliance thereon caused the loss for which plaintiff seeks damages”).)  There is no allegation that Plaintiff paid this amount to reopen his loan such that a loan modification could occur and the alleged intent regarding other misrepresentations are unrelated to the alleged promise without intent to provide a loan modification.  The SAC alleges that “his penalties and arrears could be forgiven” but it does not affirmatively allege that they would in fact be forgiven, again highlighting the uncertainty of the promise.  (See Blake, supra, 22 F. Supp. at p.252.)  To the extent that the claim is based on the second misrepresentation alleged regarding the March 2013 set of misrepresentations, it is without merit.

 

Finally, as to the third misrepresentation in March 2013 regarding Lau’s advice to “keep the subject property in the best condition,” it is defective for a number of reasons.  First, there is no misrepresentation alleged.  It is clear that a borrower should in fact keep his property in the best condition when seeking a loan modification in order to get the most favorable terms, particularly if, as alleged, the modification was in front of the underwriter to complete the terms of the modification offer.  In opposition, Plaintiff notes that the March 14, 2014 order stated that “[w]hile Plaintiff alleges that Mr. Lau was aware of his decision, he does not claim that Defendants encouraged or demanded that he take such action in connection with the loan modification process.”  (Pl.’s opposition to demurrer to SAC (“Opposition”), p.6:7-11, citing to the March 14, 2014 order at p.6:9-16 (also quoting the March 14, 2014 that stated “based on the allegations currently included in the FAC, it would be unreasonable to conclude that Defendants’ actions caused Plaintiff to make this decision… [to] remove[] funds from his 401k to make improvements]”; also stating that “Plaintiff does not allege causation based on this theory as currently pled”).)

 

Plaintiff asserts that he has rectified the Court’s stated defect by alleging that “Lau told Plaintiff that if he wanted to do home improvements, he could start now since the modification was now in front of the underwriter for final terms to be set… [as] it is your house and you should keep it in the best condition.”  (Opposition, p.6:12-14.)  Plaintiff also states that “Plaintiff added [in the SAC], ‘[h]owever, had Lau not represented to Plaintiff that the modification was now in the final stages and that Plaintiff could start making home improvements, Plaintiff would not have made said home improvements as his ability to retain ownership of the Subject Property would still be in doubt.”  (Id. at p.6:15-18.)  This new allegation is unhelpful as Plaintiff’s ownership of the subject property was in doubt already: the SAC alleges that Lau plainly told Plaintiff that he did not know what kind of modification he would receive and it is entirely possible—especially considering the enhanced income—that the modification’s terms would be detrimental to Plaintiff.  Moreover, as previously stated, Lau’s statement in the context of the representation was not a false statement.  Accordingly, each of the March 2013 misrepresentations alleged in the SAC do not state facts sufficient to constitute fraud claims.

 

Lastly, the June 2013 representation (“Misrepresentation #3”) cannot be a basis for the fraud claims.

 

The final allegations constituting a basis for the fraud claims are that “[i]n June 2013, Henry Lau informed Plaintiff that Plaintiff would not receive a HAMP loan modification because a ‘sub-group’ of Wells Fargo, which Mr. Lau stated was the investor [of] Plaintiff’s loan, did not participate in HAMP.”  (SAC, ¶ 56.)

 

Here, the SAC clearly alleges that the fact that Plaintiff would not receive a HAMP loan modification from BofA is true.  (See SAC, ¶ 56 (alleging that BofA never intended to grant him a loan modification).)  Instead, Plaintiff is asserting that BofA’s rationale for denying his loan is false.  (See ¶ 56, subpara. (b) (alleging that “any other rationale given for a denial of Plaintiff’s HAMP loan modification was false and misleading”; also stating Plaintiff’s beliefs as to how the HAMP SPA works and how the purported representation is false).)  However, as stated above, Plaintiff lacks standing to allege such a breach of the HAMP SPA and cannot state a claim based on such breach, or recast a claim for such breach as one for fraud.  (See Warner v. Wells Fargo Bank, N.A. (C.D.Cal. 2011) 2011 U.S. Dist. LEXIS 66551 *1, *9-*10; see also Kilaita v. Wells Fargo Home Mortgage, et al. (N.D.Cal. 2011) 2011 U.S. Dist. LEXIS 142524 *1, *26-*27 (stating that “[t]he nature of HAMP does not provide Plaintiffs with a private right of action”; also stating that “[q]ualified borrowers under HAMP “‘would not be reasonable in relying on the Agreement as manifesting an intention to confer a right on him because the agreement does not require [a loan servicer to] modify eligible loans… [and t]hus, Plaintiffs lack standing to challenge HAMP compliance”); see also Cleveland v. Aurora Loan Servs., LLC (N.D.Cal. 2011) 2011 U.S. Dist. LEXIS 55168 (stating that “numerous courts have determined that individual borrowers do not have standing to sue under a HAMP SPA because they are not intended third-party beneficiaries of the SPA… [and] have ruled that there is no express or implied private right of action to sue lenders or loan servicers for violation of HAMP”; also stating that since “the alleged HAMP violations are not actionable, [they] thus cannot be used to support a claim under § 17200”); see also Freeman Invs., L.P. v. Pac. Life Ins. Co. (9th Cir. Cal. 2013) 704 F.3d 1110, 1116 (stating that parties may not recast claims for breach of contract as ones for fraud claims); see also BFGC Architect Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 853 (stating that “[a] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations”); see also Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1041 (stating same).)  Moreover, here, there are no resulting damages.  (See Lazar, supra, 12 Cal.4th at p.638 (requiring resulting damages as an element of a fraud claim).)  Any damages for the denial of the loan modification flow from the actual denial of the loan modification, not the represented rationale for the denial.

 

In opposition, with regards to this misrepresentation, Plaintiff argues that “he would not have gone into default had he known BOFA had no intention of granting him a modification and would have begun withdrawing from his retirement funds.”  (Opposition, p.9:24-27.)  However, the SAC alleges that Plaintiff had already defaulted in 2009 and most certainly by the alleged June 2013 misrepresentation.  As previously stated, this cannot be the basis for damages resulting from the June 2013 misrepresentation.  It appears that Plaintiff believes that he can allege damages from a separate and distinct misrepresentation and have them attach to a future separate and distinct misrepresentation.  (See Opposition, pp.8:20-28, 9:1-22 (stating theory relating to damages; also stating that “[t]hat allegation links Defendants’ conduct to all of Plaintiff’s damages relating to fees, penalties and damages to credit”).)  However, a misrepresentation must directly cause damages; Plaintiff may not merely allege a hodgepodge of damages and misrepresentations without any connection to the damages and related misrepresentations.  (See Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 60 (stating that “no liability attaches if the damages sustained were otherwise inevitable or due to unrelated causes”); see also Bezaire v. Fidelity & Deposit Co. (1970) 12 Cal.App.3d 888, 893 (stating that “[a] fraudulent misrepresentation is not actionable unless plaintiff’s conduct on reliance thereon caused the loss for which plaintiff seeks damages”); see also Lazar, supra, 12 Cal.4th at p.638 (requiring resulting damages as an element of a fraud claim).)

 

Accordingly, as none of the misrepresentations allege facts supporting a viable fraud or negligence misrepresentation claim, and Plaintiff cannot plausibly amend the SAC to state such a claim (see Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”), the demurrer to the first and second causes of action is SUSTAINED without leave to amend.

 

The unfair business practices claim (fourth cause of action)

 

In light of the above ruling, Plaintiff cannot state facts sufficient to constitute the dependent claim for unfair business practices.  (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).)

 

Accordingly, the demurrer to the fourth cause of action is SUSTAINED without leave to amend.

 

The Court will prepare the order.  After Defendants have served notice of entry of the written order, Defendants shall prepare a judgment of dismissal.

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