Case Name:   Antonio Mandujano, et al. v. JP Morgan Chase, et al.

 

Case No.:       1-13-CV-256918

 

Demurrer of Defendant JPMorgan Chase Bank, N.A. to Plaintiffs’ First Amended Complaint

 

Defendant JP Morgan Chase Bank, N.A.’s request for judicial notice in support of demurrer to plaintiffs’ first amended complaint is GRANTED.  “[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, assuming there is no genuine dispute regarding the document’s authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.” (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265.)

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the first cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of contract is SUSTAINED with 10 days’ leave to amend. “The plaintiff cannot enforce the defendant’s obligation unless the plaintiff has performed the conditions precedent imposed on the plaintiff. Accordingly, the allegation of performance is an essential part of the plaintiff’s cause of action.” (4 Witkin, California Procedure (5th ed. 2010) Pleading, §530; citations omitted; see also Civil Code section 1439—“Before any party to an obligation can require another party to perform any act under it, he must fulfill all conditions precedent thereto imposed upon himself.”)

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the second cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of implied covenant of good faith and fair dealing is SUSTAINED with 10 days’ leave to amend. “The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made. [Citation.] The covenant thus cannot ‘be endowed with an existence independent of its contractual underpinnings.’ [Citations.] It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349 – 350.) “The implied covenant of good faith and fair dealing rests upon the existence of some specific contractual obligation. [Citation.] ‘The covenant of good faith is read into contracts in order to protect the express covenants or promises of the contract, not to protect some general public policy interest not directly tied to the contract’s purpose.’ [Citation.] … ‘In essence, the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party’s rights to the benefits of the contract.’” (Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031 – 1032.) Since plaintiffs have not sufficiently stated a claim for breach of contract, plaintiffs cannot maintain an independent cause of action for breach of the implied covenant of good faith and fair dealing.

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the third cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for fraud is SUSTAINED with 10 days’ leave to amend. “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 v. Superior Court (1996) 12 Cal.4th 631, 645.) Plaintiffs have not stated a claim for fraud with the requisite specificity.

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the fourth cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for promissory estoppel is OVERRULED. (Cf. Aceves v. U.S. Bank, N.A. (2011) 192 Cal.App.4th 218, 226—“U.S. Bank agreed to “work with [Aceves] on a mortgage reinstatement and loan modification” if she no longer pursued relief in the bankruptcy court. This is a clear and unambiguous promise. It indicates that U.S. Bank would not foreclose on Aceves’s home without first engaging in negotiations with her to reinstate and modify the loan on mutually agreeable terms.”) “Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff’s reliance is reasonable is a question of fact.”  (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) “A demurrer tests only the legal sufficiency of the pleading.  It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.”  (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 – 214.)

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the fifth cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for wrongful foreclosure is SUSTAINED with 10 days’ leave to amend.  (See Lueras v. BAC Home Loan Servicing, LP (2014) 221 Cal.App.4th 49, 86—“full tender of the indebtedness must be made to set aside a foreclosure sale based on irregularities in the foreclosure procedure.”) Plaintiffs have not stated any facts which would exempt or exclude them from application of the tender rule. In addition, plaintiffs are not afforded any protection by Civil Code section 2923.6 based on their own allegation that they filed for bankruptcy in January 2013. (See FAC, ¶15; see also Civ. Code, ¶2920.5, subd. (c)(2)(C).) In opposition, Plaintiffs contend this section does not apply because the bankruptcy court dismissed their bankruptcy case. However, no such allegation is found in the FAC.

 

Based upon the lack of any opposition to Chase’s demurrer to this sixth cause of action, defendant JPMorgan Chase Bank, N.A.’s demurrer to the sixth cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for wrongful foreclosure is SUSTAINED with 10 days’ leave to amend.

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the seventh cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for violation of Business & Professions Code section 17200 et seq. is SUSTAINED with 10 days’ leave to amend. A claim for “relief under the unfair competition law (Bus. & Prof. Code, §17200 et seq.) stand[s] or fall[s] depending on the fate of the antecedent substantive causes of action.” (Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178.)

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the eighth cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for violation of the California Rosenthal Fair Debt Collection Practices Act is SUSTAINED with 10 days’ leave to amend.  Foreclosure pursuant to a deed of trust does not constitute debt collection under the Rosenthal Act provisions. (See Zakar v. CHL Mortgage Pass-Through Trust 2006 (S.D.Cal. Oct. 13, 2011) 2011 U.S.Dist. Lexis 118763, *12-*13; Castaneda v. Saxon Mortg. Servs., Inc. (E.D.Cal. 2009) 687 F.Supp.2d 1191, 1197; Izenberg v. ETS Servs., LLC (C.D.Cal. 2008) 589 F.Supp.2d 1193, 1199.) The “ ‘law is clear that foreclosing on a deed of trust does not invoke the statutory protections of the RFDCPA.’ [Citation.] ‘[F]oreclosure pursuant to a deed of trust does not constitute debt collection under the RFDCPA.’ [Citations.]. The conduct Plaintiff complains of concerns foreclosure related actions in connection with his residential mortgage. This conduct is not covered by the RFDCPA.” (Sipe v. Countrywide Bank (E.D.Cal. 2010) 690 F.Supp.2d 1141, 1151.) Plaintiffs’ reliance on Ohlendorf v. American Home Mortgage Servicing (E.D. Cal. 2010) 279 F.R.D. 575, 582 (Ohlendorf) is distinguishable. In Ohlendorf, the court noted, “plaintiff’s allegations with respect to this cause of action do not mention foreclosure, instead alleging violations related to payment collection efforts.” (Ibid.) Here, however, plaintiffs allege false statements made in connection with plaintiffs’ application for a loan modification after defendant JPMorgan Chase Bank, N.A. commenced foreclosure.

 

Defendant JPMorgan Chase Bank, N.A.’s demurrer to the ninth cause of action in plaintiffs Antonio Mandujano and Christina Mandujano’s first amended complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for quiet title is SUSTAINED with 10 days’ leave to amend. There has been a long-standing equitable rule that “a mortgagor of real property cannot, without paying his debt, quiet his [or her] title against the mortgagee.” (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707; Ferguson v. Avelo Mortgage, LLC (2011) 195 Cal.App.4th 1618, 1623 (“To bring an action to quiet title a plaintiff must allege he or she has paid any debt owed on the property.”); McElroy v. Chase Manhattan Mortg. Corp. (2005) 134 Cal.App.4th 388, 394; Mix v. Sodd (1981) 126 Cal.App.3d 386, 390; Shimpones v. Stickney (1934) 219 Cal. 637, 649.) Plaintiffs have not stated any facts which would exempt or exclude them from application of the tender rule. Furthermore, “the purpose of a quiet title action is to determine the interest of any adverse claim to the land in controversy by a defendant and that the court must declare and define the interest of a defendant. …it only pertains to a defendant who asserts an adverse claim.” (Friends of the Trails v. Blasius (2000) 78 Cal.App.4th 810, 831.) Defendant JPMorgan Chase Bank, N.A. does not have an adverse claim to title to the Subject Property since it was sold to the Federal Home Loan Mortgage Corporation. (See RJN, Exh. 11.)

 

The Demurrer is sustained with 10 days leave to amend except for the Fourth Cause of Action which is overruled.  The Request for Judicial Notice is Granted.