Case Name: Casey Tarokh v. Bayview Loan Servicing, LLC, et al.
Case No.: 18-CV-327044

Currently before the Court is the demurrer by defendant CitiMortgage, Inc. (“CitiMortgage”) to the complaint of plaintiff Casey Tarokh (“Plaintiff”).

Factual and Procedural Background

This action arises out of a denial of a request for a loan modification. On May 31, 2007, Plaintiff obtained a loan on his primary residence (the “Property”) “in the amount of [$828,000.00] (‘Note’) through [CitiMortgage] as the lender of the Note.” (Complaint, ¶¶ 1 and 22.) “The Note was secured by a Deed of Trust.” (Id. at ¶ 22 and Ex. A.)

In 2012, Plaintiff fell behind on his mortgage payments. (Complaint, ¶ 24.)

“Sometime thereafter, Plaintiff contacted [CitiMortgage] to inquire about his loss mitigation options and, sometime before 2014, he submitted a complete loan modification to [CitiMortgage].” (Complaint, ¶ 25.) Plaintiff then received a letter informing him that his loan modification application was denied. (Ibid.) He subsequently “sent in a letter of appeal.” (Ibid.) Plaintiff never received a response to his letter. (Ibid.)

“Starting on or about mid-2014 until the end of 2015, Plaintiff made payments, of at least $4250 per month …, which [CitiMortgage] claims were never made.” (Complaint, ¶ 26.) Plaintiff asked CitiMortgage for an accounting of the Note, showing a breakdown of the total amount owed, interest rate, charges, and fees. (Ibid.) However, Plaintiff never received the requested accounting. (Id. at ¶¶ 26 and 40.)

“On or around 2015, the servicing rights of the Note [were] transferred from [CitiMortgage] to [defendant Bayview Loan Servicing, LLC (‘Bayview’)].” (Complaint, ¶ 27.) Bayview “purports to be the current servicer/lender of the Note.” (Id. at ¶ 23.)

On November 21, 2016, Plaintiff received a letter from Bayview stating that his loan modification application was denied because his application was “incomplete.” (Complaint, ¶ 30.) “However, Plaintiff submitted every document asked of him and never received a response to his appeal … .” (Ibid.)

On December 2, 2016, Plaintiff received a letter from Bayview stating that his request for a short sale had been received. (Complaint, ¶ 28.) One week later, Plaintiff sent an email to Bayview “stating that he only asked for a loan modification and never asked for a short sale.” (Ibid.) That same day, “Plaintiff received a phone call from Robert Steigeman [(‘Steigeman’)] advising [him] to send a communication to [Bayview] conveying [his] intent to cancel the short sale application because [he] ha[d] been approved for a loan modification.” (Ibid.) Steigeman also told Plaintiff that he would be put on a payment plan. (Ibid.)
Plaintiff followed Steigeman’s instructions and sent an email to Bayview’s asset manager cancelling the short sale. (Complaint, ¶ 28.) Plaintiff also faxed a letter to Steigeman conveying his intent to cancel the short sale. (Ibid.) Thereafter, “Plaintiff never received further communications from [Bayview] concerning the short sale, the promised loan modification, or the promised payment plan.” (Ibid.)

On May 4, 2017, Bayview recorded a Notice of Default (“NOD”) against the Property. (Complaint, ¶ 32.) In the Declaration of Compliance attached to the NOD, Bayview stated that it “ ‘exercised due diligence to contact the borrower pursuant to
California Civil Code § 2923.550 to “assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure” ’ ” and “[t]hirty (30) days, or more, have passed since these due diligence efforts were satisfied.” (Id. at ¶ 33.) These statements were false because “Plaintiff was never informed of his right to request a meeting to discuss his financial situation” and “it was Plaintiff who contacted [Bayview] to ask for help, while [Bayview] stonewalled Plaintiff’s attempts to seek foreclosure alternatives, ignored his pleas for help, and purposefully prolonged Plaintiff’s loss mitigation requests to force him into default.” (Ibid.)

From approximately July 2017 until March 29, 2018, Plaintiff made monthly payments of at least $2,901 to Bayview. (Complaint, ¶ 34.) However, Bayview claims the payments were never made. (Ibid.) Plaintiff asked Bayview for an accounting of the Note, “including a breakdown of the total amount owed, interest rate, charges and fees, but Plaintiff … never received this accounting.” (Ibid.)

On October 17, 2017, Plaintiff received a letter from Bayview informing him that his loan modification application was denied. (Complaint, ¶ 35.) Plaintiff alleges that “the monthly income amount, mortgage payment amount, and other information on which [Bayview] based its denial was incorrect.” (Ibid.) Plaintiff further alleges that he “never received a response to his appeal.” (Ibid.)

Additionally, “Plaintiff was never assigned a Single Point of Contact (‘SPOC’) to help him with his loss mitigation requests.” (Complaint, ¶¶ 36 and 43.) Although he was assigned asset managers, “anytime Plaintiff called to ask questions, these representatives were not available and the [Bayview] representatives he spoke to gave him the runaround, as his calls were constantly transferred from one individual to another, which made it more difficult for Plaintiff to receive updates about his application or seek additional information.” (Id. at ¶ 36.)

On March 26, 2018, Plaintiff telephoned Bayview about its March 22 letter, which informed Plaintiff that his loss mitigation application was incomplete. (Complaint, ¶ 39.) “[T]he representative placed Plaintiff on hold before returning and informing
Plaintiff that his application was denied, [he needed to] pay $300,000, and [he would] receive a rejection letter in the mail.” (Ibid.) Plaintiff never received the rejection letter. (Ibid.)

Based on the foregoing allegations, Plaintiff filed a complaint against Bayview and CitiMortgage on April 24, 2018, alleging causes of action for: (1) violation of Civil Code section 2923.7; (2) violation of Civil Code section 2923.6; (3) violation of Civil Code section 2923.55; (4) breach of implied covenant of good faith and fair dealing; (5) accounting; (6) negligence; (7) intentional misrepresentation; (8) negligent misrepresentation; and (9) unfair business practices.

On June 5, 2018, CitiMortgage filed the instant demurrer to the complaint. Plaintiff filed papers in opposition to the demurrer on September 25, 2018.

Discussion

I. Request for Judicial Notice

CitiMortgage asks the Court to take judicial notice of: (1) a corporate assignment of deed of trust recorded with the Santa Clara County Recorder on March 3, 2015; (2) the docket in the case of In re Casey Kazem Tarokh (United States Bankruptcy Court, Northern District of California, Case No. 13-56394); and (3) various documents filed in In re Casey Kazem Tarokh (United States Bankruptcy Court, Northern District of California, Case No. 13-56394) and In re Casey Kazem Tarokh (United States Bankruptcy Court, Northern District of California, Case No. 17-51380).

As a preliminary matter, the docket and court records from Plaintiff’s bankruptcy cases are not proper subjects of judicial notice. A precondition to judicial notice is that the matter to be noticed must be relevant to a material issue before the reviewing court. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.) Here, the documents related to Plaintiff’s bankruptcy proceedings are not relevant to a material issue before the Court. CitiMortgage does not actually rely on the bankruptcy records to support any substantive argument; instead, it mentions the records as part of the background of this lawsuit.

The remaining document at issue—the corporate assignment of deed of trust—is a proper subject of judicial notice as it is a recorded real property document relevant to a material issue before the Court. (See Evid. Code, § 452, subd. (h); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265, disapproved on other grounds in Yvanova v. New Century Morg. Corp. (2016) 62 Cal.4th 919 [court may take judicial notice of the existence and recordation of real property records]; Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 [court may take judicial notice of recorded deeds].)

Accordingly, CitiMortgage’s request for judicial notice is DENIED IN PART and GRANTED IN PART. The request is DENIED as to the docket and court records from Plaintiff’s bankruptcy cases. The request is GRANTED as to the corporate assignment of deed of trust.

II. 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.” (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations and quotations omitted; 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. [ ] Thus, [ ] the facts alleged in the pleading are deemed to be true, however improbable they may be.” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) However, while “[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact.” (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.)

III. Merits of the Demurrer

CitiMortgage demurs to each and every cause of action of the complaint on the ground of failure to allege facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

A. Statute of Limitations

As an initial matter, CitiMortgage generally argues that the first cause of action for violation of Civil Code section 2923.7, the second cause of action for violation of Civil Code section 2923.6, the third cause of action for violation of Civil Code section 2923.55, the sixth cause of action for negligence, the seventh cause of action for intentional misrepresentation, and the eighth cause of action for negligent misrepresentation are time-barred by the applicable statutes of limitations.

CitiMortgage begins its argument by stating that “an action upon a liability created by statute, other than penalty or forfeiture[,] must be brought within three years” under Code of Civil Procedure section 338, subdivision (a); “[a] cause of action for intentional misrepresentation is also governed by a three-year statute of limitation[s]” under Code of Civil Procedure section 338, subdivision (d); and the claims “for negligent misrepresentation and negligence are both limited by a two-year statute of limitations.” (Dem., pp. 2:26-3:4.)

CitiMortgage then points out that the complaint contains the following allegations: Plaintiff submitted a loan modification application “sometime before 2014”; CitiMortgage never responded; CitiMortgage did not correctly credit payments to his account in 2014 and 2015; and CitiMortgage “transferred” the Note to Bayview in 2015. (Dem., p. 3:5-10.) CitiMortgage also asserts that the judicially noticeable documents show that the “assignment was recorded on March 3, 2015.” (Ibid.)

CitiMortgage concludes, “Given that this action was filed on April 24, 2018, more than three years after CitiMortage assigned the deed of trust to Bayview, and over four years after the allegations related to any loan modification application (or representations regarding that application) submitted ‘sometime before 2014,’ Plaintiff’s causes of action brought under Civil Code [s]ections 2923.6, 2923.33, and 2923.7, as well as his common law causes of action for intentional misrepresentation, negligent misrepresentation, and negligence are all barred … .” (Dem., p. 3:11-16.)

“ ‘The defense of statute of limitations may be asserted by general demurrer if the complaint shows on its face that the statute bars the action.’ [Citations.] There is an important qualification, however: ‘In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred.’ [Citations.]” (E-Fab., Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315-1316.) In assessing whether a claim is time-barred, two fundamental questions drive the analysis: (a) What statute of limitations governs the plaintiff’s cause of action? (b) When did the cause of action accrue? (Id. at p. 1316.)

Here, CitiMortgage fails to demonstrate that the first, second, third, sixth, seventh, and eighth causes of action are time-barred by the applicable statutes of limitations. Although CitiMortgage’s argument addresses what statutes of limitations govern Plaintiff’s causes of action, CitiMortgage does not adequately address when the causes of action accrued. CitiMortgage does not identify the date on which each individual cause of action accrued or provide reasoned argument explaining why the causes of action accrued on a particular date. Notably, the claims may have different accrual dates depending on their particular nature. (See e.g., Code Civ. Proc., § 338, subd. (d) [claims for fraud accrue once the aggrieved party discovers the facts constituting the fraud]; see also Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 979-80 [“With respect to torts, generally speaking, a claim accrues and the statute of limitations begins to run upon the occurrence of the last event essential to the cause of action.”].)

Furthermore, CitiMortgage does not explain why the claims are time-barred simply because the complaint was filed “more than three years after CitiMortgage assigned the deed of trust to Bayview, and over four years after the allegations related to any loan modification application (or representations regarding that application) submitted ‘sometime before 2014.’ ” CitiMortgage does not present any legal authority or reasoned argument indicating that the claims at issue must have accrued as of the date of execution of the corporate assignment of deed of trust or at the time Plaintiff’s loan modification application was submitted in 2014.

Consequently, CitiMortgage’s statute of limitations argument fails to dispose of the first, second, third, sixth, seventh, and eighth causes of action.

B. First Cause of Action

CitiMortgage argues, among other things, that the first cause of action for violation of Civil Code section 2923.7 fails to state facts sufficient to constitute a cause of action because the statute only requires a servicer to provide a borrower with a single point of contact upon an explicit request from the borrower and Plaintiff does not allege that he requested a single point of contact.

Civil Code section 2923.7 requires a mortgage servicer to provide a single point of contact for their communications regarding their loans. (Civ. Code, § 2923.7, subd. (a).) The statute 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).)

As stated above, CitiMortgage contends that the plain language of the statute provides that a borrower must expressly request a single point of contact. Conversely, Plaintiff contends that the statute does not require homeowners to expressly request a single point of contact. In his view, merely requesting a loan modification implicitly triggers the single point of contact requirement in the statute.

Although there do not appear to be any reported decisions of a California court on this issue, federal district courts in California have come to conflicting conclusions as to whether a borrower must make an affirmative request to trigger the single point of contact requirement. (See Green v. Cent. Mortg. Co. (N.D. Cal. 2015) 148 F.Supp.3d 852, 874 [collecting conflicting decisions by federal district courts].)

Upon review of the statute, the Court concludes that the plain meaning of the language employed by subdivision (a) of section 2923.7 is that borrowers must make an express request for a single point of contact to trigger the requirement. The Legislature requires the appointment of a single point of contact only “[u]pon request from a borrower.” (Civ. Code, § 2923.7, subd. (a).) If the single point of contact requirement were automatically triggered by the loan modification process, there would be no need to condition the requirement on a “request from the borrower.” Instead, the statute would more simply and concisely be written, “Whenever a borrower applies for a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact … .”

The federal cases cited by Plaintiff in opposition take the position that the language, “[u]pon request from a borrower” pertains to a request—not for a single point of contact—but for a loan modification or other foreclosure prevention alternative. The flaw in this argument is that it ignores the fact the language of subdivision (a) uses the word “requests” twice when it states: “Upon request from a borrower who requests a foreclosure prevention alternative … .” (Civ. Code, § 2923.7, subd. (a), italics added.) The second use of the term “requests” is to identify the borrower as a borrower who is pursuing a loan modification or other alternative to foreclosure. If the first use of the term “request” means the same thing by merely referring to a borrower who requests a foreclosure alternative, then the first use of the term “request” is redundant and constitutes mere surplusage. The Court declines to adopt a reading that renders part of subdivision (a) mere surplusage. (See Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1037 [“Interpretations that lead to absurd results or render words surplusage are to be avoided.”], quoting People v. Loeun (1997) 17 Cal.4th 1, 9.)

Given the Court’s interpretation of the statute, Plaintiff was required to allege that he made an express request for a single point of contact in order to state a claim under Civil Code section 2923.7. However, there are no allegations in the complaint that Plaintiff asked CitiMortgage to appoint a single point of contact. Instead, Plaintiff simply asserts that he “was never assigned a SPOC to help him with his loss mitigation requests … in direct violation of section 2923.7 of the California Civil Code.” (Complaint, ¶ 48.) Consequently, Plaintiff fails to allege sufficient facts to state a claim.

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

C. Second Cause of Action

CitiMortgage argues, among other things, that the second cause of action for violation of Civil Code section 2923.6 fails to state a claim because: (1) there are no allegations in the complaint that it recorded a notice of default, recorded a notice of trustee’s sale, or conducted a trustee’s sale; and (2) the alleged failure to respond to Plaintiff’s appeal of the denial of his loan modification application does not constitute a violation of Civil Code section 2923.6, subdivision (f).

As is relevant here, the version of Civil Code section 2923.6 in effect from January 1, 2013 to December 31, 3017 provided the following:

(c) If a borrower submits a complete application for a first lien loan modification …, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale, or conduct a trustee’s sale, while the complete first lien loan modification application is pending. A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale or conduct a trustee’s sale until any of the following occurs:

(1) The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification, and any appeal period pursuant to subdivision (d) has expired.

(2) The borrower does not accept an offered first lien loan modification within 14 days of the offer.

(3) The borrower accepts a written first lien loan modification, but defaults on, or otherwise breaches the borrower’s obligations under, the first lien loan modification.

(d) If the borrower’s application for a first lien loan modification is denied, the borrower shall have at least 30 days from the date of the written denial to appeal the denial and to provide evidence that the mortgage servicer’s determination was in error.

(e) If the borrower’s application for a first lien loan modification is denied, the mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or, if a notice of default has already been recorded, record a notice of sale or conduct a trustee’s sale until the later of:

(1) Thirty-one days after the borrower is notified in writing of the denial.

(2) If the borrower appeals the denial pursuant to subdivision (d), the later of 15 days after the denial of the appeal or 14 days after a first lien loan modification is offered after appeal but declined by the borrower, or, if a first lien loan modification is offered and accepted after appeal, the date on which the borrower fails to timely submit the first payment or otherwise breaches the terms of the offer.

(f) Following the denial of a first lien loan modification application, the mortgage servicer shall send a written notice to the borrower identifying the reasons for denial, including the following:

(1) The amount of time from the date of the denial letter in which the borrower may request an appeal of the denial of the first lien loan modification and instructions regarding how to appeal the denial.

(2) If the denial was based on investor disallowance, the specific reasons for the investor disallowance.
(3) If the denial is the result of a net present value calculation, the monthly gross income and property value used to calculate the net present value and a statement that the borrower may obtain all of the inputs used in the net present value calculation upon written request to the mortgage servicer.

(4) If applicable, a finding that the borrower was previously offered a first lien loan modification and failed to successfully make payments under the terms of the modified loan.

(5) If applicable, a description of other foreclosure prevention alternatives for which the borrower may be eligible, and a list of the steps the borrower must take in order to be considered for those options. If the mortgage servicer has already approved the borrower for another foreclosure prevention alternative, information necessary to complete the foreclosure prevention alternative.

(Civ. Code, § 2923.6.)

As currently pleaded, the second cause of action is based on the filing of the NOD and the alleged failure to respond to Plaintiff’s appeal of the denial of his loan modification application. The filing of the NOD cannot properly form the basis of a claim against CitiMortgage because Plaintiff alleges that Bayview, not CitiMortgage, filed the NOD. (Complaint, ¶ 32.) In addition, the alleged failure to respond to Plaintiff’s appeal of the denial of his loan modification application, in and of itself, cannot properly form the basis of a claim against CitiMortgage because the relevant provisions of Civil Code section 2923.6 do not require the issuance of a response to an appeal.

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

D. Third Cause of Action

CitiMortgage argues that the third cause of action for violation of Civil Code section 2923.55 fails because that statute was repealed; “[t]here is no savings clause written into the repealed section”; there is no “legislation deleting or extending the repeal date”; no final judgment has been entered in this action; the cause of action is based on the recordation of the NOD and “the accompanying declaration”; and it did not record the NOD or the accompanying declaration. (Dem., pp. 3:17-4:26, 5:17-26.)

CitiMortgage’s arguments are not well-taken. First, with respect to the issue of repeal, Civil Code section 2923.55 was repealed on January 1, 2018. Generally, where the plaintiff is pursuing a statutory cause of action and the statute is repealed to remove the right to pursue that cause of action while the cause is pending, the claim is no longer viable and the action must be dismissed. (Rankin v. Longs Drugs Stores California, Inc. (2009) 169 Cal.App.4th 1246, 1256; Governing Board v Mann (1977) 18 Cal.3d 819, 829; Younger v Super. Ct. (1978) 21 Cal.3d 102, 109; Dept. of Social Welfare v Wingo (1946) 77 Cal.App.2d 316, 320.)

Despite the default rule that repeal of a statute terminates all pending claims based on that statute, the legislature can “save” pending claims in one of two ways. (S. Coast Reg’l Comm’n v. Gordon (1978) 84 Cal.App.3d 612, 618-19 (Gordon); Chapman v. Farr (1982) 132 Cal.App.3d 1021, 1025.) First, it can include an express savings clause. (Bourquez v. Super. Ct. (2007) 156 Cal.App.4th 1275, 1284.) Second, it can make its intent to preserve rights under the former law “clearly apparent.” (Ibid.) “[I]f it can be gathered from any act on the same subject passed by the [L]egislature at the same session that it was the legislative intent that pending proceedings should be saved, it will be sufficient to effect that purpose.” (Ibid., citation and internal quotation marks omitted.) This second method is sometimes termed the rule of statutory continuity. (See e.g., Gordon, supra, 84 Cal.App.3d at pp. 618-19.) Under the rule of statutory continuity, “when a statute is repealed without a saving clause and as a part of the same act it is simultaneously re-enacted in substantially the same form and substance, all rights and liabilities which accrued under the former act will be preserved and enforced.” (Chambers v. Davis (1933) 131 Cal.App. 500, 506; Cort v. Steen (1950) 36 Cal.2d 437, 440.)

Here, former Civil Code section 2923.55 was reenacted as section 2923.5 (effective January 1, 2018), word-for-word, as to all provisions relevant to this case. (Civ. Code, § 2923.5; see Travis v. Nationstar Mortgage, LLC (9th Cir. 2018) 733 Fed.Appx. 371, 373; see also Chanell S. Watkins v. Ditech Financial LLC (E.D. Cal., Sept. 26, 2018, No. 217CV02247MCEEFB) 2018 WL 4611361, at p. *3.) Thus, under the rule of statutory continuity, Plaintiff may still pursue his claim under former section 2923.55.

Second, CitiMortgage’s remaining argument is predicated on the purported fact that the cause of action is based on the recordation of the NOD and “the accompanying declaration.” However, the third cause of action is not based solely on the recordation of the NOD and the accompanying declaration. The claim, as pleaded, is also based on CitiMortgage’s alleged failure to advise Plaintiff that he had the right to request a meeting to assess his financial situation and discuss options for him to avoid foreclosure. (Complaint, ¶¶ 70, 74, 76.) CitiMortgage’s argument does not address this additional basis for the claim. Consequently, CitiMortgage fails to dispose of the cause of action in its entirety and the demurrer is not sustainable. (See PHII, Inc. v. Super. Ct. (1995) 33 Cal.App.4th 1680, 1682 [a demurrer does not lie to only a portion of a claim].)

Accordingly, CitiMortgage’s demurrer to the third cause of action is OVERRULED.

E. Fourth Cause of Action

CitiMortgage argues that the fourth cause of action for breach of implied covenant of good faith and fair dealing fails to state a claim because Plaintiff does not identify the specific contractual obligation that gives rise to the duties allegedly imposed by the covenant of good faith and fair dealing; Plaintiff stopped making payments on the Note in 2012 and is in default; and Plaintiff cannot compel it to perform under the contract as he is in default.

In his opposition papers, Plaintiff does not address CitiMortgage’s arguments. As Plaintiff does not oppose the demurrer to the fourth cause of action, he implicitly concedes CitiMortgage’s arguments are well-taken.

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

F. Fifth Cause of Action

CitiMortgage argues, among other things, that the fifth cause of action for accounting fails to state a claim because Plaintiff does not allege that some balance is due to him.

This argument is well-taken. “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].) “An action for an accounting may be brought to compel the defendant to account to the plaintiff for money or property (1) where a fiduciary relationship exists between the parties, or (2) where, even though no fiduciary relationship exists, the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable. [Citation.]” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 910; 4 Witkin, Cal. Proc. (5th ed. 2008) § 819.)

Here, Plaintiff does not allege that some balance is due to him that can only be ascertained by an accounting. Rather, Plaintiff merely alleges that he demanded an accounting and CitiMortgage refused to provide an accounting. (Complaint, ¶¶.) Consequently, Plaintiff has not adequately pleaded a claim for an accounting.

In opposition, Plaintiff suggests that Civil Code section 2943 somehow creates a cause of action for an accounting that does not require a showing that there is some balance due to Plaintiff. Plaintiff does not cite any legal authority, and the Court is aware of none, supporting such a proposition. Absent legal authority providing otherwise, the Court declines to find that Civil Code section 2943 creates a cause of action for an accounting.

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

G. Sixth Cause of Action

CitiMortgage argues that the sixth cause of action for negligence fails to state a claim because Plaintiff cannot establish that it owed him a duty of care. CitiMortgage acknowledges that some California decisions have “found that a loan servicer did owe a duty of care to a borrower when reviewing the borrower for a loan modification in certain limited situations.” (Dem., p. 8:6-8.) However, CitiMortgage contends that those case are distinguishable because the plaintiffs in those cases “asserted specific allegations related to the mishandling of documents submitted by a borrower in support of a loan modification … .” (Id. at p. 8:10-19.) CitiMortgage also asserts that “Plaintiff seeks to establish the legal existence of a duty of care … solely on one allegation: that CitiMortgage did not respond to an appeal of his loan modification denial sometime in 2014.” (Id. at p. 8:23-25.) CitiMortgage further argues that Plaintiff cannot establish any injury caused by the alleged negligence.

These arguments lack merit. First, Plaintiff’s sixth cause of action and his allegations regarding legal duty are not based solely on the allegation that CitiMortgage did not respond to his appeal. The sixth cause of action alleges, in part, that CitiMortgage, acting as Plaintiff’s lender and/or servicer, undertook a review of Plaintiff’s loss mitigation requests; having done so, CitiMortgage owed Plaintiff a duty to exercise reasonable care in processing and reviewing his requests; CitiMortgage breached its duty by failing to properly process documents Plaintiff submitted in connection with his request for a loan modification; and CitiMortgage breached its duty by failing to provide Plaintiff with a good faith review of his loan modification application. (Complaint, ¶¶ 92-93.)

Second, Plaintiff’s allegations regarding duty are analogous to the allegations pleaded in cases where courts determined that a loan servicer owed a duty of care to a borrower when reviewing the borrower for a loan modification. (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1180 (Daniels) [finding that the plaintiffs alleged the existence of a legal duty of care when they alleged that the lender owed them a duty to act reasonably with respect to their loan modification application, accurately account for the documents they submitted, and provide them a fair loan modification evaluation]; see also Alvarez v. BAC Home Loans Servicing, L.P. (2014) 228 Cal.App.4th 941 [finding that mortgage lender entities owed the borrowers a duty to exercise reasonable care in the review of their loan modification applications when the borrowers alleged that the lenders had agreed to consider the applications].)

Third, Plaintiff adequately alleges that he was injured by CitiMortgage’s failure to properly process his documents and provide him with a good faith review of his loan modification application. Specifically, Plaintiff alleges that the improper review and processing of his loss mitigation requests and loan modification application deprived him of the possibility of obtaining loss mitigation assistance. (Complaint, ¶ 95.)

Accordingly, CitiMortgage’s demurrer to the sixth cause of action is OVERRULED.

H. Seventh and Eighth Causes of Action

CitiMortgage argues, among other things, that the seventh cause of action for intentional misrepresentation and eighth cause of action for negligent misrepresentation fail to state a claim because Plaintiff does not allege the elements of fraud with specificity.

The elements of a claim for intentional misrepresentation “are (1) the defendant made a false representation as to a past or existing material fact; (2) the defendant knew the representation was false at the time it was made; (3) in making the representation, the defendant intended to deceive the plaintiff; (4) the plaintiff justifiably relied on the representation; and (5) the plaintiff suffered resulting damages.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 (West), citation omitted.)

Similarly, “[t]he elements of negligent misrepresentation are (1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243.)

“Fraud must be pleaded with specificity rather than with general and conclusory allegations. The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West, supra, 214 Cal.App.4th at p. 793, citation and quotation marks omitted; Daniels, supra, 246 Cal.App.4th at p. 1166 [“Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity.”].)
In the complaint, Plaintiff generally asserts that CitiMortgage made various misrepresentations. (Complaint, ¶¶ 103 and 117.) However, for the vast majority of the alleged misrepresentations, Plaintiff does not plead sufficient facts showing how, when, where, to whom, and by what means the representations were made. Additionally, Plaintiff does not allege the names of the persons who made the representations on behalf of CitiMortgage, their authority to speak on behalf of the CitiMortgage, or to whom they spoke.

The only misrepresentations that are pleaded with any specificity are the statements allegedly made by Steigeman on or about December 7, 2016. However, the alleged misrepresentations made by Steigeman cannot properly form the basis of a claim for intentional or negligent misrepresentation against CitiMortgage because Plaintiff fails to allege facts demonstrating that Steigeman was CitiMortgage’s representative and had authority to make representations on CitiMortgage’s behalf.

Accordingly, CitiMortgage’s demurrer to the seventh and eighth causes of action is SUSTAINED, with 10 days’ leave to amend.

I. Ninth Cause of Action

CitiMortgage argues that the ninth cause of action for unfair business practices fails to state a claim because Plaintiff lacks standing. Specifically, CitiMortgage contends that Plaintiff has not alleged sufficient facts showing that he suffered an economic injury, such as lost money or property. CitiMortgage further argues that as all other causes of action of the complaint fail, the cause of action for unfair business practices must fail as well.

These arguments are not well-taken. First, with respect to the issue of standing, “[a] private party has standing to prosecute a UCL action unless he or she ‘has suffered injury in fact and has lost money or property as a result of the unfair competition.’ [Citations.]” (Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 555-556; Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 788.) “There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.” (Kwikset Corp. v. Super. Ct. (2011) 51 Cal.4th 310, 323.) Courts have determined that costs and expenses incurred related to litigation regarding the alleged unfair business practices are sufficient to constitute an injury in fact. (See e.g., Sacchi v. Mortgage Electronic Registration Systems, Inc. (C.D. Cal., June 24, 2011, No. CV 11-1658 AHM CWX) 2011 WL 2533029, at *9 [“Further, Plaintiffs specifically allege injury in fact, including ‘loss of equity in their home, costs and expenses related to protecting themselves, … fees and costs, including, without limitation, attorneys’ fees and costs.’ ”].) Here, Plaintiff alleges that he suffered “substantial irreparable harm, including but not limited to … back dues and interest that have accrued to date that would not have accrued but for Defendants’ action” and “the cost and expense of the instant pending litigation … .” (Complaint, ¶ 133.) Thus, Plaintiff alleges sufficient facts showing that he has standing to bring this claim.

Second, CitiMortgage’s remaining argument is predicated on the assumption that all of the preceding causes of action fail and may not form the basis of Plaintiff’s claim for unfair business practices. However, the third cause of action for violation of Civil Code section 2923.55 survives CitiMortgage’s demurrer. Thus, the alleged violation of Civil Code section 2923.55 may properly serve as the unlawful conduct underlying the cause of action for unfair business practices.

Accordingly, CitiMortgage’s demurrer to the ninth cause of action is OVERRULED