Case Number: SC121189    Hearing Date: August 01, 2014    Dept: O

SC121189
MACKOVSKA v. B of A

Defendants Bank of America, Recontrust, Bony and Mers Demurrer as to the 2nd through 5th causes of action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND. Plaintiff challenges the foreclosure of her property as wrongful, but lacks standing to challenge the foreclosure sale absent pleading of tender of the full amount due on the loan.

ANALYSIS: Defendants demur to the 2nd through 5th causes of action in Plaintiff’s complaint pursuant to CCP §430.10(e) and (f). Defendant argues that Plaintiff lacks standing to challenge the foreclosure absent tender of the full amount of the loan. Specifically, as to the 2nd cause of action for violation of B&P§17200, Plaintiff fails to identify the prohibited practice or unfair competition. The allegations in the complaint fail to identify any law that has been violated other than the UCL. Further, The UCL limits the remedies available to restitution and injunctive relief, which Defendants claim is not available under the facts as pled. Defendants argue the 3rd cause of action for fraud fails to specify who made the representations and which defendant she is claiming is involved. The 4th cause of action for Declaratory Relief allegedly fails because it is an equitable claim and since Plaintiff has not tendered the amount due on the loan, she has not done equity herself. Finally, Defendants allege that the 5th cause of action for breach of the covenant of good faith is not available outside the insurance context.

Tender
“It is settled that an action to set aside a trustee’s sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security. (Citations omitted.) This rule is premised upon the equitable maxim that a court of equity will not order that a useless act be performed.” See Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 578-579. “It is apparent from the general tenor of the decisions that an action to set aside the sale, unaccompanied by an offer to redeem, would not state a cause of action which a court of equity would recognize.” See Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 117 (motion for judgment on the pleadings properly granted where complaint and record reflected no attempt or ability to tender full amount of indebtedness).

A complaint that attacks the validity of a foreclosure sale but does not allege a proper tender fails to state a cause of action. Karlsen, 15 Cal.App.3d. at 117 (judgment on the pleadings); MCA, Inc. v. Universal Diversified Enterprises Corp. (1972) 27 Cal.App.3d 170, 179 (summary judgment). “Equity will not interpose its remedial power in the accomplishment of that seemingly would be nothing but an idly and expensively futile act, nor will it purposely speculate in a field where there has been no proof as to what beneficial purpose may be subserved through its intervention.” Karlsen, 15 Cal.App.3d at 118 (citations omitted). Thus, the question presented is whether plaintiffs made a sufficient tender to invoke the equitable powers of the court. “The rules which govern tenders are strict and are strictly applied, and where the rules are prescribed by statute or rules of court, the tender must be in such form as to comply therewith. The tenderer must do and offer everything that is necessary on his part to complete the transaction, and must fairly make known his purpose without ambiguity, and the act of tender must be such that it needs only acceptance by the one to whom it is made to complete the transaction.” Gaffney v. Downey Savings & Loan Assn. (1988) 200 Cal.App.3d 1154, 1165. “[I]t is a debtor’s responsibility to make an unambiguous tender of the entire amount due or else suffer the consequence that the tender is of no effect. Simply put, a debtor must do equity by tendering the amount of the debt as a prerequisite to a demand to cancel a trustee’s sale.” MCA, 27 Cal.App.3d at 177.

A tender may not be required where it would be inequitable to do so. See Onofrio v. Rice (1997) 55 Cal.App.4th 413, 424; see also Dimock v. Emerald Properties (2000) 81 Cal.App.4th 868, 876–878 (when new trustee has been substituted, subsequent sale by former trustee is void, not merely voidable, and no tender needed to set aside sale). Specifically, if the plaintiff’s action “attacks the validity of the underlying debt, a tender is not required since it would constitute an affirmation of the debt.” Onofrio, supra, 55 Cal.App.4th at 592.

Plaintiff here has not alleged tender and therefore she lacks standing to challenge the foreclosure.

BP§17200
Defendants challenge to the 2nd cause of action for §17200 is correct. Plaintiff fails to identify any prohibited practice, unfair competition or any violation of any law.

Fraud
Fraud actions are subject to strict requirements of particularity in pleading. Here, plaintiff generally alleges that “Defendants” made certain representations upon which she relied and that her home was sold out from under her. However, she does not allege whether each Defendant purportedly made representations to her, so the complaint is uncertain.

Dec Relief and Breach of Covenant of Good Faith
Defendants challenge to each of these causes of action as summarized above is well-taken. Without tender, Plaintiff cannot seek the equity available in a Dec Relief claim. Breach of the Covenant is not a viable cause of action under the facts of this case as it is limited to only within the insurance context.