Case Name: Gina M. Gray, et al. v. La Salle Bank, N.A., et al.
Case No.: 1-14-CV-263333
Demurrer by Defendants La Salle Bank, N.A., Chase Home Finance, LLC and California Reconveyance Company to the First Amended Complaint of Plaintiffs Gina M. Gray and David A. Zamora
Request for Judicial Notice
Defendants’ request for judicial notice is GRANTED. (See Evid. Code § 452, subds. (d), (h); see Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264 [courts may take judicial notice of the existence and recordation of real property records].)
Demurrer to the First Amended Complaint
Defendants’ demurrer to the First Amended Complaint (“FAC”) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. Plaintiffs lack standing to challenge the process by which their loan was securitized as they were not parties to the securitization agreements. (See Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 515 [a plaintiff lacks standing to enforce any agreements, including the investment trust’s pooling and servicing agreement, relating to such transaction]; see also Gilbert v. Chase Home Fin., LLC (E.D. Cal. 2013) 2013 U.S. Dist. LEXIS 74772 at p. *9 [district found that plaintiffs were not parties to a PSA and do not have standing to raise violations of a PSA or to otherwise bring claims on the basis that a PSA was violated].)
The court also sustains the demurrer to each individual cause of action as follows:
Defendants’ demurrer to the first cause of action for fraud and the second cause of action for negligent misrepresentation is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. A failure to tender the amount of indebtedness bars any claims “implicitly integrated” with foreclosure. (See Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575 [appellate court affirmed dismissal of fraud claim relating to foreclosure sale].) Also, these claims have not pled with the required specificity to state a cause of action. (See West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793 [fraud must be pleaded with specificity rather than with general and conclusory allegations]; see also Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)
Defendants’ demurrer to the third cause of action for wrongful foreclosure is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. “To obtain the equitable set-aside of a trustee’s sale or maintain a wrongful foreclosure claim, a plaintiff must allege that (1) the defendants caused an illegal, fraudulent, or willfully oppressive sale of the property pursuant to a power of sale in a mortgage or deed of trust; (2) the plaintiff suffered prejudice or harm; and (3) the plaintiff tendered the amount of the secured indebtedness or was excused from tendering.” (Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062.) Here, Plaintiffs have not alleged any offer to tender the full amount due or any facts supporting an exception to the tender rule. Plaintiffs also fail to allege how any procedural irregularities in the foreclosure process caused them to suffer prejudice. (See Knapp v. Doherty (2004) 123 Cal.App.4th 76, 86, fn. 4 [a nonjudicial foreclosure sale is presumed to have been conducted regularly and fairly; one attacking the sale must overcome this presumption by pleading and proving an improper procedure and the resulting prejudice].)
Defendants’ demurrer to the fourth cause of action for negligence is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. As a preliminary matter, a failure to tender the amount of indebtedness bars any claims “implicitly integrated” with foreclosure. (See Arnolds Management Corp. v. Eischen, supra, 158 Cal.App.3d at p. 575 [appellate court affirmed dismissal of negligence claim relating to foreclosure sale].) Also, Plaintiffs allege that Defendants owed a duty of care with respect to the handling of the loan. (See FAC at ¶ 135.) However, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money. (Nymark Heart Fed. Sav. & Loan Assoc. (1991) 231 Cal.App.3d 1089, 1096.)
Defendants’ demurrer to the fifth cause of action for violation of California Rosenthal Act (Civ. Code §§ 1788, et seq.) (“RFDCPA”) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. The conduct Plaintiffs complain of concern foreclosure related actions in connection with their residential mortgage. (See FAC at ¶ 141.) This conduct is not covered by the RFDCPA. (See Castaneda v. Saxon Mortg. Servs. (E.D. Cal. 2009) 687 F.Supp.2d 1191, 1197 [foreclosure pursuant to a deed of trust does not constitute debt collection under the RFDCPA]; Izenberg v. ETS Servs., LLC (C.D. Cal. 2008) 589 F.Supp.2d 1193, 1199.)
Defendants’ demurrer to the sixth cause of action for unfair business practices is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. “Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.” (Shvarts v. Budget Group, Inc. (2000) 81 Cal.App.4th 1153, 1157.) Here, the UCL cause of action is based on Plaintiffs’ prior claims in the FAC. (See FAC at ¶ 146.) Since the court has sustained the demurrer as to those claims, there is no cause of action for unfair business practices. (See Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178 [the viability of a UCL claim stands or falls with the antecedent substantive causes of action].)
Defendants’ demurrer to the seventh cause of action for quiet title and the eighth cause of action for cancellation of instruments is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. (See Arnolds Management Corp. v. Eischen, supra, 158 Cal.App.3d at p. 578 [in order to quiet title after a trustee’s sale, a plaintiff must allege and prove tender of the full amount of the debt for which the real property served as security]; see also Karlsen v. Am. Sav. & Loan Ass’n (1971) 15 Cal.App.3d 112, 117 [a valid and viable tender of payment of the indebtedness owing is essential to an action to cancel a voidable sale under a deed of trust].) Here, Plaintiffs have not alleged any offer to tender the full amount due or any facts supporting an exception to the tender rule.
Finally, even though the title page of the FAC identifies a claim for declaratory relief, no such cause of action appears in the body of the pleading. Therefore, Defendants’ demurrer to the ninth cause of action for declaratory relief is MOOT.
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