After full consideration of the evidence, the separate statements submitted by each party, and the authorities submitted by each party, the court makes the following rulings:

Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) request for judicial notice is GRANTED. (See Evid. Code § 452, subds. (c), (d), and (h); see also 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 Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 (stating that “[t]he court may in its discretion take judicial notice of any court record in the United States… includ[ing] any orders, findings of facts and conclusions of law, and judgments within court records”; see also Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

According to the allegations of the first amended complaint (“FAC”), on January 4, 2007, plaintiff Pedro Carbajal (“Plaintiff”) entered into two loan agreements for $1,000,000 and $255,000 respectively, from defendant lender Pacific Mutual Funding, Inc. dba Pacific Residential Financing (“Pacific”) through his broker, Golden State Financing (“GSF”). (See FAC, ¶¶ 2-3, 12, 18.) For the loan, GSF received a Yield Spread Premium (“YSP”) of $2,500. (See FAC, ¶ 29, exh. 2.) Contrary to the FAC’s allegations, the YSP was disclosed as opposed to “hidden” and Plaintiff signed an acknowledgement of the $2,500 YSP. (See FAC, exh. 2.) Nevertheless, Plaintiff contends that “[i]f GSF and/or PACIFIC had revealed to Plaintiff the hidden kickback payment in the form of a YSP, at any point prior to Plaintiff signing the loan documents, Plaintiff would have fired GSF and not originated the loan with PACIFIC.” (FAC, ¶ 32, subpara.(h).) Plaintiff also asserts that defendant Rogelio Ramirez (“Ramirez”), an agent for GSF, orally represented that the loan was a fixed rate loan at an interest rate of 8.25% as reflected on the note. (See FAC, ¶¶ 16, 46.) However, the note to which Plaintiff refers is the “Adjustable Rate Note” which clearly states in bold and capital letters “THIS NOTE PROVIDES FOR A CHANGE IN MY FIXED INTEREST RATE TO AN ADJUSTABLE INTEREST RATE.” (FAC, exh. 1.)

More importantly, the FAC now omits allegations of the initial complaint that demurring defendant Wells Fargo ever had any knowledge of those oral representations or is liable for any breach of good faith and fair dealing; rather, the sole allegations regarding Wells Fargo pertain to YSP. (See FAC, ¶ 38; compare with initial complaint, ¶¶ 52-55 (alleging Wells Fargo liable for negative amortization claims), 96-99, 114-130 (alleging Wells Fargo liable for misrepresentations made by broker regarding terms of agreement that were untrue), 150-154 (alleging Wells Fargo breached duty of good faith and fair dealing).)

On October 24, 2013, Plaintiff filed his initial complaint that asserted causes of action for: unfair business practices; fraud; negligent misrepresentation; contractual breach of good faith and fair dealing; fraud; negligent misrepresentation; and, contractual breach of good faith and fair dealing. Wells Fargo demurred to the initial complaint, Plaintiff did not oppose the demurrer, and, on January 9, 2014, the Court [Hon. Pierce] sustained the demurrer with 10 days leave to amend. Despite filing a notice with the Court that he would file the FAC prior to the January 9, 2014 hearing, Plaintiff belatedly filed the FAC on February 4, 2014. The FAC asserts causes of action for fraud; negligent misrepresentation; and, contractual breach of good faith and fair dealing. Wells Fargo again demurs to the FAC, asserting that: it is not liable for the acts of the other defendants; the claims are time-barred; and, the claims do not otherwise state facts sufficient to constitute a cause of action.

Plaintiff’s late filed opposition

Plaintiff did not timely file an opposition, and on March 13, 2014, five days before the hearing, Wells Fargo filed its reply brief. Despite being admonished on multiple occasions for his habit of filing late briefings, in violation of Code of Civil Procedure section 1005, subdivision (b), Plaintiff’s counsel, Nick Pacheco, nevertheless filed an opposition to the demurrer on March 17, 2014 at 3:15 p.m. Mr. Pacheco included a declaration regarding the tardiness of his reply, stating that “[i]t was my intention to prepare and file the Opposition on Monday, March 10, 2014… [u]nfortunately, due to [an index finger injury], I was unable to work on a computer and type on the keyboard.” (Pacheco decl., ¶ 3.) Mr. Pacheco did not notify the court or the opposing counsel of his purported fingernail injury prior to filing the belated opposition. Mr. Pacheco has not explained why his fingernail injury affected his ability to use a phone. From the submitted photo by Mr. Pacheco of his right index fingernail, it is not apparent that he has indeed suffered any injury. Even if Mr. Pacheco had actually filed his opposition on March 10 as he claims he intended, the opposition would nevertheless have been tardy in violation of section 1005. Accordingly, Mr. Pacheco is again admonished for his repeated violation of the Code of Civil Procedure’s filing requirements, and for risking adverse consequences to his client as a result of his violation. The Court will nonetheless consider the opposition.

Plaintiff’s claims are time barred

In opposition, Plaintiff acknowledges that the statute of limitations for his claims is three years. (See Pl.’s late filed opposition to demurrer (“Opposition”), p.8:15-20.) Again, Plaintiff has abandoned any claims premised on negative amortization or oral misrepresentations by Ramirez, as the FAC no longer implicates Wells Fargo for such fraud. (See FAC, ¶¶ 43-137; compare with initial complaint, ¶¶ 52-55 (alleging Wells Fargo liable for negative amortization claims), 96-99, 114-130, 150-154.) Thus, the question is whether Plaintiff’s claims are barred based on the alleged knowledge of the loan originators’ failure to inform Plaintiff of the $2,500 YSP paid to GSF.

According to the closing instructions attached as Exhibit 2 to the FAC, Plaintiff was notified of the YSP of $2,500 on January 5, 2007 as Plaintiff signed the document acknowledging receipt. Thus, the FAC shows on its face that, without the benefit of the discovery rule, any claim is barred by the three year statute of limitations. In opposition, Plaintiff cites to Fuller v. First Franklin Financial Corp. (2013) 216 Cal. App. 4th 955, however, that case in inapposite. Fuller involves the original lender’s nondisclosure of a hidden kickback; here, the YSP was disclosed, and Wells Fargo is not the initial lender.

Moreover, it should be pointed out that Wolski v. Fremont Investment & Loan (2005) 127 Cal.App.4th 347, the case to which Plaintiff cites in his complaint that the YSP was an “illegal kickback,” actually rejected such a characterization. (Id. at p.357 (stating that although “YSP’s are considered by some to be a predatory lending practice… section 4970 did not effect that regulation”); see also Bjustrom v. Trust One Mortg. Corp. (9th Cir. 2003) 322 F.3d 1201, 1206-1207 (stating that “yield spread premiums are not per se legal or illegal”; also discussing how YSPs conform to RESPA); see also Byars v. SCME Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134, 1143-1145; see also Lane v. Residential Funding Corp. (9th Cir. Cal. 2003) 323 F.3d 739, 743-744; see also 12 CFR § 560.2, subd. (b)(5).) Plaintiff fails to demonstrate the applicability of the discovery rule when the amount of YSP was clearly disclosed to him. (See Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (stating that “[t]he discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action”; also stating that “[t]he discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury”); see also Sahadi, supra, 155 Cal.App.4th at p.715 (stating that “the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her”; also stating that “[s]o long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her”); see also Jolly, supra, 44 Cal.3d at p.1109 (stating that “[a] plaintiff is held to her actual knowledge as well as knowledge that could reasonably be discovered through investigation of sources open to her”).) Plaintiff fails to specifically plead facts to demonstrate the applicability of the discovery rule and his claims are thus time-barred. See Fox, supra, 35 Cal.4th at p.808 (stating that “[i]n order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence”).) The demurrer to the FAC is SUSTAINED without leave to amend on this basis.

The claims also fail to state facts sufficient to constitute a claim because they do not allege resulting damages.

Additionally, the only allegations regarding Wells Fargo is that, on September 22, 2012, Wells Fargo knew about the fraud based on a review of Plaintiff’s loan documents and still profited from the loan. (See FAC, ¶ 38.) However, Wells Fargo’s knowledge of fraud in the origination of the loan from a review of Plaintiff’s loan documents would not justify liability as to Wells Fargo as there are no resulting damages from Wells Fargo’s review and acceptance of the loan. (See Lazar v. Super. Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal. 4th 631, 638 (requiring resulting damage as an element of a fraud claim); see also Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519 (requiring resulting damage as an element for a negligent misrepresentation claim.).) Accordingly, the demurrer to the FAC is also SUSTAINED without leave to amend on this ground as well.

The Court will prepare the order. Counsel for Wells Fargo shall prepare a judgment of dismissal after notice of entry of the order.