GREGORY J. WITHERS VS THE ALLIANCE PORTFOLIO

Case Number: EC062647    Hearing Date: October 31, 2014    Dept: B

Demurrer

The Complaint alleges that the Defendants have engaged in a campaign to deprive the Plaintiffs of the Plaintiffs’ real property by slandering the title, through dual tracking, through making false promises not to foreclose, by failing to exercise due diligence in contacting the Plaintiffs by telephone, by failing to suspend the foreclosure process while considering the loan modification, by failing to exercise due care in considering the loan modification, by failing to post payments, by making improper charges, by failing to identify a point of contact, and by denying the Plaintiff’s request for a loan modification.

The Defendants are the following:

1) Alliance Portfolio, Alliance Portfolio Mortgage Fund Group, and Alliance Portfolio Private Equity Finance, which are lenders and beneficiaries on the deed of trust;
2) Lawrence Coffman, Martin Glassman, Edit Chow, Terrence Cooney, Robert Cleaves, who are lenders and beneficiaries on the deed of trust;
3) Arbinger Fund, LLC, which is a lender and beneficiary on the deed of trust;
4) REMAX/Rainbow Dental Care, which is a lender and beneficiary on the deed of trust; and
5) CAP California Fund II, LLC, which is a lender and beneficiary on the deed of trust.

The Causes of Action in the First Amended Complaint are for:
1) Wrongful Foreclosure – Civil Code section 2924(b)(6)
2) Dual Tracking – Violation of Civil Code sections 2923.6 and 2924.11
3) Quiet Title
4) Declaratory Relief
5) Promissory Estoppel
6) Violation of Business and Professions Code section 17200
7) Failure to Exercise Due Diligence Prior to Recording Notice of Default
8) Negligence

This hearing concerns the demurrer of Defendant Lawrence E. Coffman, Trustee of the Lawrence E.Coffman Trust, to each cause of action in the First Amended Complaint. The Defendant argues that the pleadings fail to state a cause of action against the Defendant because the exhibits attached to the pleadings demonstrate that the Defendant had assigned all of his interest in the property at issue in an assignment of deed of trust dated February 27, 2008.

The Plaintiffs allege in paragraph 5 that the Defendant, Lawrence Coffman, the trustee of the Lawrence E. Coffman Trust, is a lender and beneficiary under the deed of trust. Exhibit 2 to the First Amended Complaint is the deed of trust and it indicates in exhibit B to the deed of trust that Lawrence Coffman, was one of the three original beneficiaries on the deed of trust. However, exhibit 8 to the First Amended Complaint is an assignment of trust dated March 5, 2008 in which Lawrence Coffman assigned his interest in the deed of trust to the Defendant, Alliance Portfolio.

Facts appearing in exhibits attached to the complaint are given precedence over inconsistent allegations in the complaint. Dodd v. Citizens Bank (1990) 222 Cal.App.3d 1624, 1627. Since the facts in the assignment of trust attached in exhibit 8 to the First Amended Complaint indicate that the Defendant, Lawrence Coffman, had no interest in the deed of trust, these facts are given precedence over the inconsistent allegations that the Defendant is a beneficiary on the deed of trust. These facts in the exhibit indicate that Lawrence Coffman has no beneficial interest in the note or deed of trust.

A review of the pleadings in the eight causes of action reveal that the Plaintiffs’ claims are based on a lack of standing to commence the foreclosure, dual tracking, false promises not to foreclose, unlawful business practices in the foreclosure proceedings, failure to exercise diligence before recording the notice of default, and negligence in the handling of the Plaintiffs’ request for a loan modification. The Plaintiffs seek to quiet title on the property in their name and declaratory relief of the rights and duties of the parties.

None of these causes of action plead any facts particular to Lawrence Coffman or any other Defendant. There are no facts demonstrating that Lawrence Coffman had any duty under Civil Code sections 2924, 2923.5, 2923.6, or 2924.11 or that he violated any of these statutes. There are no facts demonstrating that Lawrence Coffman has any adverse interest in the property for the purposes of seeking quiet title relief. There are no facts demonstrating that Lawrence Coffman has any right in the property for which declaratory relief is appropriate. There are no allegations demonstrating that Lawrence Coffman was involved in the loan modification process or that he made any promises that the Defendants would not foreclose on the property. There are no allegations demonstrating that Lawrence Coffman violated Business and Professions Code section 17200 by initiating foreclosure proceedings or filing a notice of trustee’s sale. There are no allegations demonstrating that Lawrence Coffman had any duty to review the Plaintiffs’ application for a loan modification.

The time period at issue in the pleadings begins in 2012, when the Plaintiffs allege in paragraph 61 that they began to seek modification of their note and deed of trust and when they allege in paragraph 43 that a notice of default was recorded on their property. As noted above, the facts in exhibit 8 to the First Amended Complaint demonstrate that Lawrence Coffman assigned his interest in the deed of trust to Alliance Portfolio in 2008. There are no allegations that Lawrence Coffman had any involvement with the note, deed of trust, loan modification, or foreclosure proceedings after 2008 or in the time period at issue, which is from 2012 to the commencement of this action.

The Plaintiffs’ opposition does not address this issue at all. Instead, the Plaintiffs argue that each cause of action pleads sufficient facts to state a cause of action. None of the arguments identify any allegations that demonstrate Lawrence Coffman was involved with the foreclosure proceedings or the loan modification. None of the arguments address the fact that Lawrence Coffman assigned away his interest in the property in 2008. Accordingly, the Plaintiffs do not offer any basis to find that their causes of action based on the foreclosure proceedings initiated in 2012 or their attempts to obtain a loan modification in 2012 can be directed against Lawrence Coffman when the facts in their exhibits demonstrate that Lawrence Coffman has not held an interest in the property since 2008.

Accordingly, the Court sustains the demurrer of the Defendant, Lawrence Coffman, to each cause of action because the facts in the exhibits attached to the First Amended Complaint demonstrate that the Defendant assigned his interest in the deed of trust to Alliance Portfolio in 2008 and there are no allegations there offer any basis to find that he is involved in the foreclosure on the property or that he is liable for the acts of the other Defendants.

It does not appear reasonably possible to correct these defects by amendment because Lawrence Coffman assigned his interest in the property to Alliance Portfolio in 2008. Further, California law imposes the burden on the Plaintiffs to demonstrate the manner in which the Plaintiffs can amend the pleadings to state the claims against the Defendant. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiffs did not meet this burden and do not offer any basis to find that Lawrence Coffman is liable for their foreclosure claims after he assigned his interest in the property to Alliance Portfolio in 2008.

Accordingly, the Court does not grant leave to amend.

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