Case Name: Alton Purvis, Jr. v. Wells Fargo Bank, N.A., et al.

Case No.: 19-CV-343490

Currently before the Court are the demurrer and motion to strike by defendant Rushmore Loan Management Services, LLC (“Rushmore”).

Factual and Procedural Background

This is a foreclosure action. Plaintiff Alton Purvis, Jr. (“Purvis”) is the owner of residential real property located at 3421 Antonacci Court in San Jose, California (“Property”). (First Amended Complaint (“FAC”), ¶ 8.) In March 2006, Purvis obtained a loan in the amount of $695,000 secured by the Property, and executed a Deed of Trust (“DOT”) in favor of World Savings Bank, FSB (“World Savings”). (Id. at ¶ 10 & Ex. A.) Thereafter, the beneficial interest in the loan was transferred to Wells Fargo. (Id. at ¶ 10.)

In late 2008, Purvis sought a loan modification from Wells Fargo, but Wells Fargo refused to modify the loan because Purvis had made all of his monthly payments. (FAC, ¶ 11.) Wells Fargo advised Purvis that only borrowers who were at least two months behind in payments were considered for a loan modification and Purvis should stop making payments on the loan, as that was the only way Wells Fargo would help him. (Ibid.)

In early 2009, in reliance on Wells Fargo’s representations, Purvis stopped making monthly payments on the loan and, thereafter, submitted a loan modification application. (FAC, ¶ 11.) The request for a loan modification was ultimately denied. (Ibid.) Purvis re-applied for a loan modification on multiple occasions and continuously submitted complete loan applications. (Ibid.) However, Wells Fargo falsely claimed that it had not received documents, the documents it received were unsigned, and Purvis needed to re-apply and submit new application materials. (Ibid.)

Between 2011 and 2012, Purvis filed for bankruptcy and made regular payments on the loan for several years. (FAC, ¶ 11.)

In March 2017, Wells Fargo initiated foreclosure proceedings. (FAC, ¶ 11.) That month, a Notice of Default (“NOD”) executed by authorized representative Craig Zinda was recorded against the Property. (Id. at ¶ 10.) Purvis alleges that the Declaration of Compliance accompanying the NOD is false because Wells Fargo never contacted him to discuss loss mitigation options or advise him of his right to an in-person meeting within 14 days. (Ibid.) Purvis also alleges that the NOD falsely stated that he only had the right to stop the sale of the Property by paying the entire amount demanded. (Ibid.)

The next month, Purvis applied for a loan modification. (FAC, ¶ 11.) Purvis was also forced to file for Chapter 13 bankruptcy. (Ibid.) During this time, Purvis voluntarily increased his monthly payment amount. (Ibid.)

In March 2018, Wells Fargo eventually denied Purvis’s request for a loan modification. (FAC, ¶ 11.) Wells Fargo’s stated reasons for denying the application were false because Wells Fargo intentionally modified its criteria to ensure that Purvis would not qualify for a loan modification. (Ibid.)

Several months later, Purvis again applied for a loan modification, which was promptly denied by Wells Fargo without conducting a sufficient review. (FAC, ¶ 11.) Wells Fargo then gave Purvis conflicting information regarding the time to appeal the denial of his loan modification request. (Ibid.) Although a Home Preservation Specialist promised to mail Purvis the guidelines used to evaluate his application, Wells Fargo delayed providing Purvis with the criteria, information, and calculations used to evaluate his loan modification application, which interfered with the preparation of his appeal. (Id. at ¶¶ 11 & 59.)

From March 2018 to December 2018, Purvis made direct payments to Wells Fargo in the sum of $3,400, which Wells Fargo accepted. (FAC, ¶¶ 10 & 11.)

In January 2019, Wells Fargo returned Purvis’s loan payment for December 2018. (FAC, ¶ 11.) Additionally, a Notice of Trustee’s Sale (“NOTS”) executed by authorized representative Tommy Phi was recorded, scheduling a sale of the Property for March 11, 2019. (Id. at ¶ 10.)

The following month, Rushmore began servicing the loan. (FAC, ¶¶ 10 & 13.) Rushmore advised Purvis that the March 11, 2019 trustee sale would be postponed if he submitted a loan modification application by March 6, 2019. (Id. at ¶ 14.) Purvis submitted a complete loan modification application to Rushmore by March 6, 2019, and was informed by Rushmore that information regarding his loan had not been completely inputted into its system and the trustee’s sale was postponed. (Id. at ¶¶ 14 & 15.) However, when Purvis contacted the trustee, the trustee informed him that it had not received any request for postponement from Rushmore and the trustee’s sale would proceed as scheduled. (Id. at ¶¶ 27, 59, & 60.)

As of March 2019, Purvis had over $50,000 in a suspense account, which had not been applied to the loan due to errors by Wells Fargo and Rushmore (collectively, “Defendants”). (FAC, ¶¶ 12 & 15.)

Based on the foregoing allegations, Purvis filed the operative FAC against Defendants, alleging causes of action for: (1) violation of Civil Code sections 2923.5 and/or 2923.55; (2) violation of Civil Code section 2923.6; (3) violation of Civil Code section 2923.7; (4) violation of Civil Code section 2924.17; (5) violation of Civil Code sections 2924 and/or 2924b; (6) violation of Civil Code section 2924.11; (7) promissory estoppel; (8) negligence; (9) intentional misrepresentation; (10) negligent misrepresentation; (11) promise without intention to perform; (12) declaratory relief; (13) quiet title; (14) slander of title; (15) cancellation of instruments; (16) violation of Business and Professions Code section 17200 (the “UCL”); and (17) accounting.

On May 17, 2019, Rushmore filed the instant demurrer and motion to strike. Purvis filed papers in opposition to the demurrer and motion to strike on July 23, 2019. On August 5, 2019, Rushmore filed reply papers in support of its demurrer and motion to strike.

Discussion

I. Demurrer

Rushmore demurs to each and every cause of action of the FAC on the ground of failure to allege facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) Rushmore further demurs to the FAC, as a whole, on the ground of uncertainty. (See Code Civ. Proc., § 430.10, subd. (f).)

A. Request for Judicial Notice

Rushmore asks the Court to take judicial notice of four recorded documents pertaining to the Property.

The law is clear that recorded real property documents are generally proper subjects of judicial notice under Evidence Code section 452. (See Evid. Code, § 452, subds. (c), (h); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 (Fontenot) [a court may take judicial notice of certain facts in a recorded document, including “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, assuming there is no genuine dispute regarding the document’s authenticity”], disapproved on other grounds in Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919 [“[t]he official act of recordation and the common use of a notary public in the execution of such documents assure their reliability, and the maintenance of the documents in the recorder’s office makes their existence and text capable of ready confirmation, thereby placing such documents beyond reasonable dispute”].) While it would be improper to take judicial notice of the truth of statements of fact recited within such documents, a court is permitted to take judicial notice of the legal effect of the language therein when that effect is clear. (Fontenot, supra, 198 Cal.App.4th at p. 265.)

Here, there is no genuine dispute regarding the authenticity of the recorded documents. Thus, the Court may properly take judicial notice of existence and legal effect of the documents.

Accordingly, Rushmore’s request for judicial notice is GRANTED as to the existence and legal effect of the recorded documents.

B. Legal Standard

The function of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, “ ‘[a] demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice’ [citation].” (Hilltop Properties, Inc. v. State (1965) 233 Cal.App.2d 349, 353; see Code Civ. Proc., § 430.30, subd. (a).) “ ‘It is not the ordinary function of a demurrer to test the truth of the … allegations [in the challenged pleading] or the accuracy with which [the plaintiff] describes the defendant’s conduct. … .’ [Citation.] Thus, … ‘the facts alleged in the pleading are deemed to be true, however improbable they may be. [Citation.]’ [Citations.]” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958.)

C. Uncertainty

Preliminarily, Rushmore argues that the FAC is uncertain because “[t]he complaint lumps all both [sic] defendants together and makes allegations as to ‘Defendants’ generally without specifying any acts committed by Rushmore.” (Mem. Ps. & As., p. 11:19-18.)

“[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Reg. Authority (2012) 208 Cal.App.4th 1125, 1135; Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616 [“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.”].)

Here, it is clear from Rushmore’s other arguments on demurrer that Rushmore understands the nature of the claims that Purvis at least attempts to allege against it and that there is no true uncertainty.

Accordingly, Rushmore’s demurrer to the FAC on the ground of uncertainty is OVERRULED.

D. Failure to Allege Sufficient Facts to State A Claim

1. First Cause of Action

Rushmore argues that the first cause of action for violation of Civil Code sections 2923.5 and/or 2923.55 fails to state a claim against it because the cause of action is predicated on actions allegedly taken, or that should have been taken, by Wells Fargo prior to the recording of the NOD. Rushmore points out that it first began servicing the loan in February 2019, well after the alleged wrongful conduct took place. (FAC, ¶¶ 10 & 13.)

Rushmore’s argument is well-taken. In the first cause of action, Purvis alleges that Defendants violated Civil Code sections 2923.5 and/or 2923.55 by recording the NOD without first taking certain actions, such as contacting Purvis to assess his financial situation and explore options to avoid foreclosure. (FAC, ¶¶ 20 & 21.) However, Purvis expressly alleges that Rushmore did not begin servicing the loan until February 2019. (FAC, ¶¶ 10 & 13.) It is undisputed that Rushmore did not record the NOD and Rushmore was not servicing the loan at the time the NOD was recorded. Thus, Purvis fails to establish that Rushmore was required to take any action prior to the recordation of the NOD.

Accordingly, Rushmore’s demurrer to the first cause of action is SUSTAINED with 10 days’ leave to amend.

2. Second Cause of Action

Rushmore argues that the second cause of action for violation of Civil Code section 2923.6 fails because the claim is based on the recordation of foreclosure documents, such as the NOD, and it was not servicing the loan at the time those documents were recorded.

Rushmore’s argument is well-taken. In the second cause of action, Purvis alleges that Defendants violated Civil Code section 2923.6 by recording the NOD and NOTS while his application for a loan modification was under review. (FAC, ¶¶ 26 & 27.) But the NOD and NOTS were recorded before Rushmore started servicing the loan. (Id. at ¶¶ 10 & 13.) Purvis does not present any legal authority, and the Court is aware of none, providing that Rushmore can be held liable for the recordation of the NOD and NOTS even though it was not servicing the loan at the time those documents were recorded.

Purvis also appears to allege that Rushmore violated Civil Code section 2923.6 because the trustee sale remained scheduled for March 11, 2019, even though he submitted a loan modification application to Rushmore on March 6, 2019. (FAC, ¶¶ 26 & 27.) However, Purvis does not present any reasoned argument or legal authority showing that this alleged conduct constitutes a violation of Civil Code section 2923.6. That statute prohibits a lender and its agents from recording a notice of default or notice of trustee sale, or conducting a trustee sale, while a borrower’s loan modification application is still pending. (Civ. Code, § 2923.6.) There are no facts alleged in the FAC demonstrating that the trustee’s sale was actually conducted as scheduled on March 11, 2019. Furthermore, Purvis does not present reasoned argument or legal authority showing that the mere scheduling of a sale constitutes a violation of the statute.

Accordingly, Rushmore’s demurrer to the second cause of action is SUSTAINED with 10 days’ leave to amend.

3. Third Cause of Action

Rushmore argues that the third cause of action for violation of Civil Code section 2923.7 fails to allege sufficient facts to state a claim. Rushmore points out that the statute requires a loan servicer to promptly provide a single point of contact when a borrower requests a modification. Rushmore points out that Purvis first submitted a completed loan modification application to it on March 6, 2019, the day before the FAC was filed. Rushmore asserts that it did not violate the statute because the term “promptly” cannot reasonably mean that it was required to provide a single point of contact to Purvis on the same day that he submitted his loan modification application.

Civil Code section 2923.7 provides that “[u]pon request from a borrower who requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.” (Civ. Code, § 2923.7, subd. (a).)

Here, Rushmore’s argument is well-taken. According to the allegations of the FAC, Rushmore did not begin servicing the loan until February 2019. (FAC, ¶¶ 10 & 13.) Purvis first submitted a completed loan modification application to Rushmore on March 6, 2019. (Id. at ¶¶ 14 & 15.) Purvis filed its FAC against Rushmore the following day. Thus, Purvis appears to allege that Rushmore violated Civil Code section 2923.7 by not providing him with a single point of contact on the same day that his application for a loan modification was filed. However, Rushmore was only obligated to “promptly” provide Purvis with a single point of contact. The Court agrees with Rushmore that not providing a single point of contact on the same day that an application for a loan modification is filed does not constitute a failure to promptly provide a single point of contact.

Accordingly, Rushmore’s demurrer to the third cause of action is SUSTAINED with 10 days’ leave to amend.

4. Fourth Cause of Action

Rushmore argues that the fourth cause of action for violation of Civil Code section 2924.17 fails to allege sufficient facts to state a claim. Rushmore states that the cause of action is based on allegations that it failed to properly review Purvis’s loan information and verify whether it had the right to foreclose on the Property. Rushmore contends that the claim fails because it “was not servicing the loan when the NOD was filed.” (Mem. Ps. & As., p. 3:22-27.)

Civil Code section 2924.17, subdivision (a) states that “[a] declaration recorded pursuant to Section 2923.5 or, until January 1, 2018, pursuant to Section 2923.55, a notice of default, notice of sale, assignment of a deed of trust, or substitution of trustee recorded by or on behalf of a mortgage servicer in connection with a foreclosure subject to the requirements of Section 2924, or a declaration or affidavit filed in any court relative to a foreclosure proceeding shall be accurate and complete and supported by competent and reliable evidence.” Civil Code section 2924.17, subdivision (b) further requires a mortgage servicer to ensure it has “reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose” before filing any of the documents described in subdivision (a).

Here, Rushmore’s argument is well-taken. In the fourth cause of action, Purvis alleges that Defendants violated Civil Code section 2924.17 by recording the NOD without properly reviewing his loan information and verifying whether they had the right to foreclose pursuant to competent and reliable evidence. (FAC, ¶¶ 40 & 41.) However, Purvis expressly alleges that Rushmore did not begin servicing the loan until February 2019. (Id. at ¶¶ 10 & 13.) It is undisputed that Rushmore did not record the NOD and Rushmore was not servicing the loan at the time the NOD was recorded. Thus, Purvis fails to establish that Rushmore was required to take any action prior to the recordation of the NOD.

Purvis also appears to allege that Rushmore violated Civil Code section 2924.17 by failing to record a new NOD after he made payments to Wells Fargo, allowing the trustee’s sale to remain scheduled for March 11, 2019 after he submitted a loan modification application on March 6, 2019, and failing to apply $50,000 in a suspense account to his loan. (FAC, ¶¶ 40 & 41.) However, Purvis does not present any reasoned argument or legal authority showing that this alleged conduct constitutes a violation of Civil Code section 2924.17. That statute prohibits the recordation of certain documents without first reviewing competent and reliable evidence to substantiate the borrower’s default and the right to foreclose. (Civ. Code, § 2924.17.) Purvis does not present reasoned argument or legal authority showing that Defendants’ other alleged actions, that do not involve the recordation of documents, constitutes a violation of Civil Code section 2924.17.

Accordingly, Rushmore’s demurrer to the fourth cause of action is SUSTAINED with 10 days’ leave to amend.

5. Fifth Cause of Action

Rushmore argues that the fifth cause of action for violation of Civil Code sections 2924 and/or 2924b fails to allege sufficient facts to state a claim. Rushmore asserts that the cause of action is predicated solely on actions taken by Wells Fargo and there are no factual allegations specific to it. Rushmore also contends that to the extent the claim is based on the recording of the NOD and NOTS, those documents were recorded before it took over servicing of the loan.

Rushmore’s arguments are well-taken. Upon review of the allegations of the fifth cause of action, it appears that the claim is predicated upon actions taken, or that should have been taken, by Wells Fargo. Specifically, Purvis alleges that the recording the NOD and NOTS constituted a violation of Civil Code sections 2924 and/or 2924b. (FAC, ¶¶ 46-49.) Purvis also alleges that Defendants failed to mail him documents in connection with the recordation of the NOD and NOTS. (Ibid.) But the NOD and NOTS were recorded before Rushmore started servicing the loan. (Id. at ¶¶ 10 & 13.) Purvis does not present any legal authority, and the Court is aware of none, providing that Rushmore can be held liable for the recordation of the NOD and NOTS even though it was not servicing the loan at the time those documents were recorded. Similarly, Purvis fails to establish that Rushmore was required to take any action—such as mailing documents to him—when it was not servicing the loan. Finally, Purvis appears to allege that Rushmore violated Civil Code sections 2924 and/or 2924b by failing to record a new NOD after he made payments to Wells Fargo, but Purvis does not present any reasoned argument or legal authority showing that Rushmore was required to record a new NOD under Civil Code sections 2924 and/or 2924b.

Accordingly, Rushmore’s demurrer to the fifth cause of action is SUSTAINED with 10 days’ leave to amend.

6. Sixth Cause of Action

Rushmore argues that the sixth cause of action for violation of Civil Code section 2924.11 fails to allege sufficient facts to state a claim. Rushmore states that the cause of action is based on the scheduling of the trustee’s sale. Rushmore asserts that it cannot be held liable for the scheduling of the trustee’s sale because it was not servicing the loan when the NOTS was recorded.

Rushmore’s argument is well-taken. In the sixth cause of action, Purvis alleges that Defendants violated Civil Code section 2924.11 because they scheduled a trustee sale of the Property for March 11, 2019, even though his March 6, 2019 loan modification application was still under review. (FAC, ¶¶ 52-56.)

Purvis appears to be relying on the version Civil Code section 2924.11 that was in effect from January 1, 2018 to December 31, 2018. Subdivision (a) of that provision states, “If a borrower submits a complete application for a foreclosure prevention alternative offered by, or through, the borrower’s mortgage servicer, a mortgage servicer, trustee, mortgagee, beneficiary, or authorized agent shall not record a notice of sale or conduct a trustee’s sale while the complete foreclosure prevention alternative application is pending, and until the borrower has been provided with a written determination by the mortgage servicer regarding that borrower’s eligibility for the requested foreclosure prevention alternative.” (Civ. Code, § 2924.11, subd. (a).)

However, as Rushmore persuasively argues, it was not servicing the loan at the time the NOTS was recorded. Purvis does not present any legal authority, and the Court is aware of none, providing that Rushmore can be held liable for the recordation of the NOTS even though it was not servicing the loan at the time the NOTS was recorded. The Court further notes that Purvis does not allege any facts that trigger the dual tracking provision in Civil Code section 2924.11. For example, Purvis does not allege that he had submitted a complete loan modification application that was under review when the NOTS was recorded on January 31, 2019. Similarly, Purvis does not allege that the trustee’s sale proceeded as scheduled on March 11, 2019. Consequently, Purvis fails to establish that Rushmore violated Civil Code section 2924.11.

Accordingly, Rushmore’s demurrer to the sixth cause of action is SUSTAINED with 10 days’ leave to amend.

7. Seventh Cause of Action

Rushmore argues that the seventh cause of action for promissory estoppel fails to state a claim because Purvis does not allege sufficient facts showing that he detrimentally relied on its alleged promises, as opposed to promises allegedly made by Wells Fargo. Rushmore contends that Purvis cannot establish detrimental reliance because the trustee’s sale was eventually postponed.

“In California, under the doctrine of promissory estoppel, [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.” (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 779, internal quotation marks and citations omitted.) In essence, it is “a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.” (Id. at pp. 779–780, internal quotation marks and citations omitted.) “The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.’ ” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 943-945.)

In the seventh cause of action, Purvis alleges that Rushmore’s agent promised that the trustee’s sale scheduled for March 11, 2019, would be postponed if he submitted a complete application for a loan modification by March 6, 2019. (FAC, ¶¶ 59 &60.) Purvis further alleges that despite retaining counsel and submitting a complete loan modification application, he learned from the trustee that the trustee’s sale would proceed on March 11, 2019. (Ibid.) With respect to the issue of detrimental reliance, Purvis alleges that he retained counsel to prepare and submit the loan modification application properly and in time, and incurred fees and costs. (Id. at ¶¶ 61 & 63.) These allegations demonstrate that Purvis detrimentally relied on Rushmore’s alleged promise.

Rushmore’s argument on demurrer—that Purvis cannot establish detrimental reliance because the trustee’s sale was eventually postponed—lacks merit because there are no allegations in the FAC, or judicially noticeable material, establishing that the trustee’s sale did not proceed as scheduled.

Accordingly, Rushmore’s demurrer to the seventh cause of action is OVERRULED.

8. Eighth Cause of Action

Rushmore argues that the eighth cause of action for negligence fails to state a claim because Purvis does not allege sufficient facts demonstrating that it breached a duty of care owed to him. Rushmore asserts that the alleged breaches only pertain to conduct by Wells Fargo.

In the eighth cause of action, Purvis alleges that “[i]n taking the actions alleged in Paragraphs 10 and 11 above, Defendants breached their duty of care owed to Plaintiff in the servicing of the Subject Loan by, among other things, preparing and recording false documents, failing to record a proper NOD, and foreclosing upon the Subject Property without having the legal authority and/or proper documentation or rights to do so.” (FAC, ¶ 68.)

As Rushmore persuasively argues, Purvis fails to allege sufficient facts showing that Rushmore breach a duty of care owed to him. The specific conduct described in paragraphs 10 and 11 of the FAC, such as the recording of the NOD and NOTS and the acceptance of loan payments, is Wells Fargo’s conduct. (FAC, ¶¶ 10 & 11.) The eighth cause of action fails to adequately identify any specific conduct by Rushmore that allegedly constitutes a breach of duty.

Accordingly, Wells Fargo’s demurrer to the eighth cause of action is SUSTAINED with 10 days’ leave to amend.

9. Ninth, Tenth, and Eleventh Causes of Action

Rushmore argues, among other things, that the ninth, tenth, and eleventh causes of action for intentional misrepresentation, negligent misrepresentation, and promise without intention to perform, respectively, fail to state a cause of action against it because the claims are not based on an alleged misrepresentation regarding an existing and material fact. Rushmore also asserts that the ninth and eleventh causes of action are not pleaded with the requisite specificity.

“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. Super. Ct. (1996) 12 Cal.4th 631, 638.) “It is hornbook law that an actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed opinions.” (Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 309-310.) Furthermore, “[f]raud 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.)

Here, Rushmore’s arguments with respect to the ninth and tenth causes of action are well-taken. Upon review of the ninth and tenth causes of action, the only alleged misrepresentation made by Rushmore is the representation that the trustee’s sale would be postponed if Purvis submitted a loan modification application by March 6, 2019. (FAC, ¶¶ 76-88.) This is a representation regarding a future event and cannot properly form the basis of the claims for intentional and negligent misrepresentation.

However, Rushmore’s arguments are not well-taken as to the eleventh cause of action. Purvis pleads the alleged promise with particularity, a claim for promissory fraud may be based on a promise to perform in the future, and Purvis alleges that Rushmore did not intend to perform its alleged promise (i.e., postpone the trustee’s sale) at the time it was made. (See Tarmann v. State Farm Mutual Automobile Ins. Co. (1991) 2 Cal.App.4th 153, 159 [“To maintain an action for deceit based on a false promise, one must specifically allege and prove, among other things, that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing.”].)

Accordingly, Rushmore’s demurrer to the ninth and tenth causes of action is SUSTAINED with 10 days’ leave to amend. Rushmore’s demurrer to the eleventh cause of action is OVERRULED.

10. Twelfth Cause of Action

Rushmore argues that the twelfth cause of action for declaratory relief fails to state a claim because “declaratory relief is not warranted[ ] and no ‘actual controversy’ exists.” (Mem. Ps. & As., p. 8:3-4.) Rushmore concludes that the cause of action is fatally defective because “[t]here is no allegation that [it] has violated any statute of improperly denied Plaintiff’s application for loan modification.” (Id. at p. 8:4-7.)

An action for declaratory relief is codified in Code of Civil Procedure section 1060. A party must plead “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.’ [Citation.]” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.)

A “general demurrer is usually not an appropriate method for testing the merits of a declaratory relief action, because the plaintiff is entitled to a declaration of rights even if it is adverse to the plaintiff’s interest.’ [Citation.]” (Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734, 751 (Qualified); Centex Homes v St. Paul Fire & Marine Ins. Co. (2015) 237 Cal.App.4th 23, 29 (Centex); Western Homes, Inc. v. Herbert Ketell, Inc. (1965) 236 Cal.App.2d 142, 146.) It is an abuse of discretion for a trial court to sustain a demurrer to a legally sufficient complaint for declaratory relief even if the trial court concludes that the plaintiff is not entitled to a favorable declaration. (Qualified, supra, 187 Cal.App.4th at p. 756; Centex, supra, 237 CalApp.4th at p. 29.)

In the twelfth cause of action, Purvis alleges that a dispute has arisen among the parties as to their duties and obligations regarding the loan, the DOT, and the foreclosure. (FAC, ¶¶ 101 & 102.) Purvis further alleges that the disputes concern, but are not limited to, “the ownership rights and the validity of the commencement of the foreclosure process.” (Id. at ¶ 103.) Purvis asserts that “a declaration of rights and duties of the parties herein are essential to determine the actual status and validity of the loan, deed of trust, nominated beneficiaries, actual beneficiaries, loan servicers, trustees instituting foreclosure proceedings and related matter.” (Id. at ¶ 105.) These allegations are sufficient to plead the two elements required to state a claim for declaratory relief.

Accordingly, Rushmore’s demurrer to the twelfth cause of action is OVERRULED.

11. Thirteenth Cause of Action

Rushmore argues that the thirteenth cause of action for quiet title fails to state a claim because the mortgage debt is still outstanding. Rushmore asserts that this fact can be inferred from the fact that Purvis is seeking to modify the loan. In essence, Rushmore appears to contend that Purvis cannot state a claim for quiet title because he has not alleged that he has or can tender the outstanding debt.

Rushmore’s argument regarding tender is not well-taken. As a general rule, a debtor cannot set aside the foreclosure or quiet title against the lender or other purchaser without also alleging he or she paid the secured debt before the action is commenced. (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112 (Lona); Lueras, supra, 221 Cal.App.4th at pp. 86-87.) This is often referred to as the “tender rule.” (See Lona, supra, 202 Cal.App.4th at p. 115.) It is undisputed that Purvis does not allege that he tendered the amount due on his loan or made an offer to do so.

However, tender is not required “where it would be inequitable to impose such condition on the party challenging the sale” and where “the trustor is not required to rely on equity to attack the deed because the trustee’s deed is void on its face.” (Lona, supra, 202 Cal.App.4th at pp. 112-113.)

Here, Purvis alleges that the DOT is fraudulent and, therefore, void. (FAC, ¶¶ 108 & 109.) Tender is not required to attack a deed that is void. (See Lona, supra, 202 Cal.App.4th at pp. 112-113.) Thus, Purvis is not required to plead that he tendered the amount due.

Accordingly, Rushmore’s demurrer to the thirteenth cause of action is OVERRULED.

12. Fourteenth Cause of Action

Rushmore argues that the fourteenth cause of action for slander of title fails to state a claim because the cause of action is premised on allegations that the recorded foreclosure documents were false and the recordation of such documents is privileged under Civil Code sections 47 and 2924.

Slander of title occurs when there is an unprivileged publication of a false statement which disparages title to the property and causes pecuniary loss. (Stalberg v. Western Title Ins. Co. (1994) 27 Cal.App.4th 925, 929.) Elements of slander of title are: (1) a publication, (2) which is without privilege or justification, (3) which is false, and (4) which causes direct and immediate pecuniary loss. (Manhattan Loft, LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1051.)

Civil Code section 2924, subdivision (d) provides in pertinent part: “All of the following shall constitute privileged communications pursuant to Section 47: [¶] (1) The mailing, publication, and delivery of notices as required by this section. [¶] (2) Performance of the procedures set forth in this article.” The privilege afforded under Civil Code section 2924 is the qualified common interest privilege of Civil Code section 47, subdivision (c), and applies to “the statutorily required mailing, publication, and delivery of notices in nonjudicial foreclosure, and the performance of statutory nonjudicial foreclosure procedures … .” (Kachlon v. Markowitz (2008) 168 Cal.App.4th 316, 333.) The common interest privilege does not apply if the defendant acted with actual malice, i.e., motivated by hatred or ill will, or in reckless disregard of the plaintiff’s rights. (Id. at p. 336.) The privilege applies to all torts except malicious prosecution. (Ibid.)

Here, the slander of title claim is based on the recording of the allegedly fraudulent NOD and NOTS. (FAC, ¶¶ 114-116.) Such notices are subject to the common interest privilege unless Purvis can allege facts establishing actual malice. In the FAC, Purvis has alleged only conclusions, but not facts demonstrating actual malice as required to overcome the privilege.

Accordingly, Rushmore’s demurrer to the fourteenth cause of action is SUSTAINED with 10 days’ leave to amend.

13. Fifteenth Cause of Action

Rushmore argues that the fifteenth cause of action for cancellation of instruments fails to state a claim against it because Purvis does not allege specific facts showing that the NOD and/or NOTS are void or voidable. Rushmore further asserts that the claim fails because it did not record, or cause to be recorded, the documents that Purvis seeks to cancel (i.e., the NOD and NOTS).

“ ‘Under Civil Code section 3412, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.” To prevail on a claim to cancel an instrument, a plaintiff must prove (1) the instrument is void or voidable due to, for example, fraud; and (2) there is a reasonable apprehension of serious injury including pecuniary loss or the prejudicial alteration of one’s position. [Citation.]’ [Citation.]” (See Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1193–1194.)

In the fifteenth cause of action, Purvis alleges that the NOD and NOTS “were all executed and recorded fraudulently” and are, consequently, void or voidable. (FAC, ¶¶ 122-125.) Purvis then references paragraphs 10, 12, 14, 15, 114, 116, 117 and 119 of the FAC. In those paragraphs, Purvis alleges that the NOD is void because Wells Fargo accepted loan payments from Purvis from March 11, 2018 until December 2018; the Declaration of Compliance accompanying the NOD is “false and fraudulent” because “no individual contacted [Purvis] by any means to discuss loss mitigation options as required and advise [him] as to [his] right to an in person meeting within 14 days”; and the NOD is fraudulent because it stated that Purvis only had the legal right to stop the sale of the Property by paying the entire amount demanded by the creditor. (Id. at ¶¶ 10, 114, 116.) These allegations set forth specific facts describing why the NOD, and by extension the NOTS, are void or voidable. Rushmore does not address these specific allegations or explain why they are deficient.

Furthermore, Rushmore does not present any reasoned argument or legal authority establishing that Purvis cannot property state a claim for cancellation of the NOD and NOTS simply because Rushmore did not record the documents.

Accordingly, Rushmore’s demurrer to the fifteenth cause of action is OVERRULED.

14. Sixteenth Cause of Action

Rushmore argues that the sixteenth cause of action for violation of the UCL fails to state a claim because the cause of action merely incorporates Purvis’s other causes of action and “[t]here are virtually no charging allegations against [it].” (Mem. Ps. & As., p. 10:24-26.) Rushmore also argues that Purvis lacks standing to bring a UCL claim because the foreclosure proceedings were stayed and the Property was not sold.

The UCL “prohibits ‘unfair competition,’ which it defines as ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [Section 17500].” (Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 722, quoting Bus. & Prof. Code, § 17200.) “ ‘ “Because … section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. ‘In other words, a practice is prohibited as “unfair” or “deceptive” even if not “unlawful” and vice versa.’ ” ’ ” [Citation.]” (Puentes v. Wells Fargo Home Mortgage, Inc.(2008) 160 Cal.App.4th 638, 644.)

Rushmore’s initial argument is not well-taken. As the eleventh cause of action for promissory fraud survives Rushmore’s demurrer, that claim may properly form the basis of the sixteenth cause of action for violation of the UCL.

Rushmore’s remaining argument regarding standing also lacks merit. Rushmore’s standing argument is predicated on facts that cannot be considered on demurrer because the Court has not taken judicial notice of those facts and they are not alleged in the FAC.

Accordingly, Rushmore’s demurrer to the sixteenth cause of action is OVERRULED.

15. Seventeenth Cause of Action

Rushmore argues that the seventeenth cause of action for accounting fails to state a claim because Purvis does not allege that any balance is due to him.

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179; St. James Church of Christ Holiness v. Super. Ct. (1955) 135 Cal.App.2d 352, 359 [to state a cause of action for an accounting, only the simplest pleading is required: (1) the fiduciary relationship or other circumstances appropriate to the remedy; and (2) a balance due from the defendant to the plaintiff that can only be ascertained by an accounting].)

In the seventeenth cause of action, Purvis alleges that he paid money to Defendants, the money “was not accounted for properly and as such, money is due to [him] from [Defendants], including any unnecessary interest, fees and costs added to the Subject Loan.” (FAC, ¶¶ 136 & 137.)

Because Purvis alleges that Rushmore owes him money, Rushmore’s argument on demurrer is not well-taken.

Accordingly, Rushmore’s demurrer to the seventeenth cause of action is OVERRULED.

II. Motion to Strike

Rushmore moves to strike Purvis’s request for punitive damages under Civil Code section 3294 and his request for attorney fees and costs.

A. Legal Standard

Under Code of Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading or strike out all or 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. (Code Civ. Proc., § 436.) The grounds for a motion to strike must appear on the face of the challenged pleading or from matters of which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) In ruling on a motion to strike, the court reads the pleading as a whole, all parts in their context, and assuming the truth of all well-pleaded allegations. (See Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63, citing Clauson v. Super. Ct. (1998) 67 Cal.App.4th 1253, 1255.)

B. Punitive Damages

Rushmore argues that the request for punitive damages should be stricken because Purvis does not allege facts showing that any of its officers, directors, or managing agents committed, ratified, or authorized the alleged wrongful conduct.

A request for punitive damages against a corporation must allege that an officer, director, or managing agent of the corporation was either personally responsible for the allegedly despicable conduct or that an officer, director, or managing agent of the corporation: (1) had advance knowledge of the despicable conduct and consciously disregarded it; or (2) authorized or ratified the despicable conduct. (See Civ. Code, § 3294, subd. (b).)

Upon review of Purvis’s punitive damages allegations, it is readily apparent that Purvis fails to adequately allege that an officer, director, or managing agent of Rushmore: (1) had advance knowledge of the despicable conduct and consciously disregarded it; or (2) authorized or ratified the despicable conduct. (See Civ. Code, § 3294, subd. (b).) There are no facts alleged in the FAC addressing any conduct whatsoever by an officer, director, or managing agent of Rushmore. Thus, the allegations of the FAC are insufficient to support the request for punitive damages.

Accordingly, Rushmore’s motion to strike the request for punitive damages is GRANTED with 10 days’ leave to amend.

C. Attorney Fees and Costs

Rushmore argues, in a conclusory manner, that there is no basis for an award of attorney fees and costs against it under any cause of action alleged in the FAC.

However, Rushmore does not present any reasoned argument or legal authority supporting its position that attorney fees and costs cannot be recovered in connection with the claims alleged in the FAC. (See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 [“When [a party] fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived.”]; see also Schaeffer Land Trust v. San Jose City Council (1989) 215 Cal.App.3d 612, 619, fn. 2 [“[A] point which is merely suggested by a party’s counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion.”].)

Accordingly, Rushmore’s motion to strike the request for attorney fees and costs is DENIED.