Case Name: Alan N. Slater v. JP Morgan Chase Bank N.A., et al.

Case No.: 18CV334389

Demurrer of Defendant JP Morgan Chase Bank N.A. to Plaintiff’s Complaint

Plaintiff Alan N. Slater (“Slater”) alleges on or about July 30, 2018, a written agreement was made by defendant JP Morgan Chase Bank N.A. (“Bank”). (Complaint, ¶BC-1 and Exh. A.) On or about August 8, 2018, defendant Bank breached the agreement when “defendant Bank employee or agent refused or fraud [sic] failed to pickup payoff check on agreed date ‘08/07/2018’ and location ‘2197 Wynfair Ridge Way, San Jose, CA’ pursuant to the terms and conditions of a Credit Agreement Security #00001673.” (Complaint, ¶BC-2 and Exh. B.) On or about August 8, 2018, defendant “trespass upon Credit Agreement Payoff Security Instrument NOTE and Release of Lien Security Contract Property with the intentions of fraud in the factum by intentionally avoiding the TERMS AND CONDITIONS after signed Acceptance and agreement of said property.” (Complaint, ¶BC-2 and Exh. B.) On or about August 8, 2018, defendant “trespass upon Credit Agreement Payoff Security Instrument NOTE and Release of Lien Security Contract Property with the intention of RICO Racketeering by intentionally avoiding the TERMS AND CONDITIONS after signed Acceptance and agreement of said property.” (Complaint, ¶BC-2 and Exh. B.)

On September 13, 2018, plaintiff Slater filed a Judicial Council form complaint against defendant Bank asserting causes of action for: (1) Breach of Contract; (2) Fraud; and (3) RICO.

On December 19, 2018, defendant Bank filed the instant demurrer to plaintiff Slater’s complaint.

I. Defendant Bank’s demurrer to the complaint is SUSTAINED.

A. Res judicata.

“As generally understood, ‘[t]he doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy.’ [Citation.] The doctrine ‘has a double aspect.’ [Citation.] ‘In its primary aspect,’ commonly known as claim preclusion, it ‘operates as a bar to the maintenance of a second suit between the same parties on the same cause of action. [Citation.]’ [Citation.] ‘In its secondary aspect,’ commonly known as collateral estoppel, ‘[t]he prior judgment … “operates” ’ in ‘a second suit … based on a different cause of action … “as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.” [Citation.]’ [Citation.] ‘The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. [Citations.]’ ” (People v. Barragan (2004) 32 Cal.4th 236, 252–253, 9 Cal.Rptr.3d 76, 83 P.3d 480.)

(Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797.)

Defendant Bank initially demurs to the entire complaint on the ground that it is barred by the doctrine of res judicata. According to defendant Bank, plaintiff Slater filed an action on April 6, 2017 in Santa Clara County Superior Court, case number 17CV308241 against defendant Bank’s predecessor-in-interest asserting the same claim (“Prior Action”) he now asserts in this action. Defendant Bank asks the court to take judicial notice of a minute order sustaining a demurrer to plaintiff Slater’s first amended complaint in the Prior Action and also requests judicial notice of the judgment in the Prior Action. Even if the court were to take judicial notice of these records from the Prior Action, defendant Bank has not adequately demonstrated that the Prior Action involves the same claim or that they are in privity with the defendant in the Prior Action.

B. Redemption theory.

Defendant Bank understands each cause of action asserted in plaintiff Slater’s complaint to be based upon a “redemption theory,” which defendant Bank contends has not been recognized as valid in California. Defendant Bank apparently understands plaintiff Slater’s complaint better than this court. The court does not recognize any valid cause of action based on the allegations and exhibits contained in plaintiff’s complaint. Rather than address defendant Bank’s argument regarding the “redemption theory,” the court will address the adequacy of the complaint, infra.

C. Indispensable party.

Defendant Bank also demurs to the entire complaint on the ground that there is a defect of parties. (Code Civ. Proc., §430.10, subd. (d).) A demurrer for this ground lies when “some third person is a ‘necessary’ or ‘indispensable’ party to the action; and hence must be joined before the action may proceed.” (Weil & Brown, CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2012) ¶7:80, p. 7(I)-38.) A “[p]laintiff must join as parties to the action all persons whose interests are so directly involved that the court cannot render a fair adjudication in their absence.” (Id. at ¶2:151, p. 2-44.)

A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.

(Code Civ. Proc. §389, subd. (a).)

Defendant Bank understands the plaintiff’s complaint to concern a loan for which plaintiff Slater’s wife is a co-borrower and argues a judgment cannot be issued without her participation. Again, defendant Bank apparently understands plaintiff Slater’s complaint better than this court. While there is some reference to a mortgage (Complaint, ¶10), a “threat of foreclosure” (Complaint, ¶BC-4), an “Original Note and Mortgage Lien” (Complaint, Exh. A), the court did not identify any allegation which definitively concerns the loan that defendant Bank contends is the subject of plaintiff’s complaint and of which plaintiff Slater’s wife is an indispensable party.

D. Uncertainty.

Defendant Bank also demurs on the basis of uncertainty. (See Code Civ. Proc., §430.10, subd. (f).) “As used in this subdivision, ‘uncertain’ includes ambiguous and unintelligible.” (Id.) “Doubt in the complaint may be resolved against plaintiff and facts not alleged are presumed not to exist.” (Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 578.) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616 (Khoury).) A “demurrer for uncertainty will be sustained only where the complaint is so bad that the defendant cannot reasonably respond; i.e. he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶7:85, pp. 7(I)-41 to 7(I)-42 citing Khoury, supra, 14 Cal.App.4th at p. 616.)

Here, the court agrees with defendant Bank that plaintiff Slater’s complaint is uncertain. Plaintiff Slater’s first cause of action alleges the existence of an agreement by defendant Bank which is purportedly attached to the complaint as Exhibit A. Exhibit A consists of five pages, but nothing in the five pages is indicative of an agreement by defendant Bank. Simply put, plaintiff Slater’s complaint and the attachments are unintelligible.

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar).) “Fraud actions are subject to strict requirements of particularity in pleading. … Accordingly, the rule is everywhere followed that fraud must be specifically pleaded.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Commonwealth Mortgage Assurance Co. v. Superior Court (1989) 211 Cal.App.3d 508, 518.) The Lazar court did not comment on how these particular allegations met the requirement of pleading with specificity in a fraud action, but the court did say that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar, supra, 12 Cal.4th at p. 645.)

Here, plaintiff’s second cause of action is labeled fraud, but it appears plaintiff is using the same Judicial Council form for breach of contract. There are no allegations of misrepresentation whatsoever and a lack of any specificity that is required to plead fraud.

“The RICO statutes require that a plaintiff plead and prove: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. [Citation.]” (McMartin v. Children’s Institute International (1989) 212 Cal.App.3d 1393, 1406.) Here, plaintiff Slater again appears to use the same Judicial Council form for breach of contract. With regard to RICO, plaintiff Slater alleges, “Defendant trespass [sic] upon Credit Agreement Payoff Security Instrument NOTE and Release of Lien Security Contract Property with the intention of RICO Racketeering by intentionally avoiding the TERMS AND CONDITIONS after signed Acceptance and agreement of said property; (See Exhibit ‘B’)” As with most of plaintiff Slater’s complaint, the court finds this allegation to be unintelligible and insufficient to state a cause of action for violation of the federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §1961, et seq.

Accordingly, defendant Bank’s demurrer to plaintiff Slater’s complaint on the ground that it is uncertain [Code Civ. Proc., §430.10, subd. (f)] and on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] is SUSTAINED with 10 days’ leave to amend.