Defendant One West Bank, FSB (“Defendant”) demurs to the first amended complaint (“FAC”) filed by plaintiff Loree Jordan-Macias (“Plaintiff”).

Defendant’s request for judicial notice is GRANTED. (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1382 [a “court may take judicial notice of something that cannot reasonably be controverted [such as a recorded deed], even if it negates an express allegation of the pleading”]; see also Evid. Code, § 452, subd. (h).)

The demurrer to the first cause of action (joint venture liability) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. “‘A joint venture … is an undertaking by two or more persons jointly to carry out a single business enterprise for profit.’ [Citation.] ‘There are three basic elements of a joint venture: the members must have joint control over the venture (even though they may delegate it), they must share the profits of the undertaking, and the members must each have an ownership interest in the enterprise.’ [Citation.]” (Unruh-Haxton v. Regents of the University of California (2008) 162 Cal.App.4th 343, 370.) Defendant’s argument that none of these elements are pleaded is well-taken. Plaintiff alleges only that the defendants in this action are part of a joint venture; that as members of that joint venture, the defendants are liable to Plaintiff; and that as a result of the joint venture, Plaintiff has been damaged. (FAC, ¶ 106-109.) Because there are no allegations regarding joint control, sharing of profits, and an ownership interest, the allegations are insufficient to state a claim for joint venture liability.

The demurrer to the second cause of action (violation of California Civil Code section 2923.6) is SUSTAINED WITHOUT LEAVE TO AMEND. Plaintiff alleges that Civil Code section 2923.6 (“Section 2923.6”) requires that loan servicers accept loan modifications with borrowers. However, this is not the correct interpretation of the statute. Section 2923.6 does not grant a right to a loan modification, but merely states the findings of the Legislature regarding loan servicers and their pooling and service agreements. The statute provides: “It is the intent of the Legislature that the mortgagee, beneficiary, or authorized agent offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority.” (Civ. Code, § 2923.6, subd. (a).) As Defendant points out, this statute is merely a statement of legislative findings and declarations. There are no California decisions regarding the duties imposed, if any, by Section 2923.6 on lenders, but several federal decisions have held that this statute does not impose a duty on lenders to negotiate loan modifications. (See Connors v. Home Loan Corp. (S.D. Cal. 2009) 2009 U.S. Dist. LEXIS 48638, at *23 [holding Section 2923.6 “does not require an offer of a loan modification to the borrower or that the mortgagee, beneficiary, or authorized agent must accept a suggested modification proposed by the borrower. . . [and] does not suggest that there is a private right of action”]; Anaya v. Advisors Lending Group (E.D. Cal. 2009) 2009 U.S. Dist. LEXIS 68373, at *20 [Section 2923.6 “does not require an offer or an acceptance of a modification of a loan. . . . The statute does not require a lender to accept a loan modification. Further, there is no private right of action.”].)

The demurrer to the third cause of action (breach of implied covenant of good faith and fair dealing) is SUSTAINED WITHOUT LEAVE TO AMEND. “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.” (Love v. Fire Ins. Exch. (1990) 221 Cal.App.3d 1136, 1153.) Here, Plaintiff attempts to use the implied covenant of good faith and fair dealing to impose additional duties, including alleged statutory duties, on Defendant under the loan agreement. However, the implied covenant does not impose substantive duties or limits on the parties beyond those incorporated in the specific terms of the contract. (See McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 806.) Additionally, any disclosure-related statutory duties are beyond the scope of the implied covenant. (See Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49.) As Plaintiffs have not shown that they can cure the defects in the fourth cause of action, the demurrer is sustained without leave to amend. (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636.)

The demurrer to the fourth cause of action (quiet title) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. A quiet title action is commenced upon the filing of a verified complaint that sets forth a description of the subject property, the title of the plaintiff and the basis of the title, the adverse claims to the title of the plaintiff against which a determination is sought, and the date as of which the determination is sought. (Code Civ. Proc., § 761.020.) It is settled in California that a mortgagor cannot quiet title against the mortgagee without paying the debt secured. (See Shimpones v. Stickney (1934) 219 Cal. 637, 649; see also Aguilar v. Bocci (1974) 39 Cal.App.3d 477-478 [dismissing quiet title claim because borrower did not offer to reimburse the lender for the unpaid debt].) The Notice of Trustee’s Sale showing an unpaid balance of $503,356.42 as of December 17, 2010 is sufficient to show that the property at issue is secured by debt owed by Plaintiff. (Request for Judicial Notice in Support of Demurrer to Plaintiff’s Second Amended Complaint (“RJN”), Exh. 4.) There are no allegations stating that Plaintiff can pay or has paid the debt secured. Accordingly, Plaintiff was required to allege tender but failed to do so.

The demurrer to the fifth cause of action (violation of the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”)) is SUSTAINED WITHOUT LEAVE TO AMEND. “The [Rosenthal Fair Debt Collection Practices Act’s (“RFDCPA”)] purpose is to prohibit debt collectors from engaging in unfair or deceptive practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring such debts.” (Altman v. PNC Mortg. (2012) 850 F.Supp.2d 1057, 1071; Civil Code § 1788.1, subd. (b).) Foreclosing on a property is not the collection of a debt within the meaning of the RFDCPA. (See Altman, supra, 850 F.Supp.2d at pp. 1071-1072 [court dismissed RFDCPA claim because RFDCPA does not constitute debt collection].) Here, Plaintiff fails to allege specific facts regarding any improper debt collection efforts by Defendant. Instead, Plaintiff states in a conclusory fashion that the defendants “violated the Rosenthal Act by using false, deceptive, and misleading statements in connection with their collection of the Plaintiff’s mortgage debt….” (See FAC, ¶ 138.)

The demurrer to the sixth cause of action (unfair business practices) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. To satisfy the standing requirement under Business & Professions Code section 17200 (“Section 17200”), a party must “(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.) Here, Plaintiff alleges that Defendant committed acts of unlawful, unfair, or fraudulent acts by making a loan with unconscionable repayment terms, falsely representing to Plaintiff that she could not qualify for any other financing, and providing false testimony under the Notice of Default. (FAC, ¶ 147.) Plaintiff further alleges that she suffered economic injury because “Defendants received and continue to hold Plaintiff’s money….” (FAC, ¶ 147.) Although Plaintiff alleges economic injury, she fails to state any allegations establishing a causal connection between the alleged violations committed by Defendant and the payments, as Plaintiff owed money to Defendant under the loan’s own terms. Accordingly, Plaintiff fails to allege facts establishing standing.

The demurrer to the seventh cause of action (fraud/negligent misrepresentation) is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. Defendant argues that this cause of action is not pleaded with sufficient particularity. Fraud-based claims must be pleaded with specificity, i.e., the plaintiff must plead facts which show how, when, where, to whom, and by what means the misrepresentations were tendered. (Lazar, supra, 12 Cal.4th at 645.) Here, Plaintiff bases her cause of action upon alleged false representations made by Defendant regarding her loan and the modification process. (FAC, ¶¶ 151-155.) However, Plaintiff does not identify who made these representations, how they were made, and when they were made. Accordingly, this cause of action has not been pleaded with specificity.

The demurrer to the eighth cause of action (negligence) is SUSTAINED WITHOUT LEAVE TO AMEND. Defendant argues that it had no duty, as a matter of law, to modify Plaintiff’s loan. Defendant cites to Nymark v. Heart Fed. Sav. & Loan Ass’n (1991) 231 Cal.App.3d 1089, 1096, which holds that a financial institution has 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.

Plaintiff alleges that “Defendants owed a duty of care to avoid foreseeable injury to the Plaintiff’s person or property when they are acting as the mortgage broker, mortgage lender, loan servicers, and trustee under Plaintiff’s loan.” (FAC, ¶ 157.) Plaintiff further alleges that Defendant breached that duty “by colluding to lure the Plaintiff into believing that their [sic] loan modification application, upon submission, would put the foreclosure proceedings on hold, when it [sic] fact, [Defendant] proceeded with the foreclosure without giving proper notice to Plaintiff.” (Ibid.) In opposition, Plaintiff argues that such facts are sufficient to establish a duty of care to support negligence. In support, Plaintiffs rely on Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, which addresses the issue of whether a construction lender owed a duty of care to the borrower. There, the court recognized the general rule that a financial institution does not owe a duty of care to a borrower when the institution acts within its traditional role as a lender of money. (Id. at p. 898.) The court concluded, however, that the general rule did not apply to the facts of the case because for a construction loan, unlike a residential home loan, the relationship between the lender and borrower is ongoing over time, as disbursements are periodically made throughout the construction period. (Id. at p. 901.)

As a preliminary matter, Jolley is distinguishable on its facts as it addressed a duty of care in the context of a construction loan, not a residential home loan. Also, Jolley represents a minority view, as California appellate decisions since that case have declined to find that a duty of care exists between a lender and a borrower with respect to loan modification activities. (See Aspiras v. Wells Fargo Bank, N.A. (2013) 219 Cal.App.4th 948, 952, 963-964 [the court distinguished Jolley and declined to impose a duty of care on an institutional lender in handling a loan modification]; see also Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 67, [the court disagreed with Jolley to the extent it suggests a residential lender owes a common law duty of care to offer, consider, or approve a loan modification, or to offer foreclosure alternatives].) Because Plaintiff’s loan does not involve a construction loan, Plaintiff cannot establish that Defendant had a duty of care based on Jolley.

Plaintiff also argues that Section 2923.6 imposes a duty of care on Defendant. However, as discussed above, this statute is merely a statement of legislative findings and declarations and there is no California authority establishing such a duty. Accordingly, this argument fails.

The demurrer to the ninth cause of action (declaratory relief) is OVERRULED. Plaintiff seeks a declaration as to the duties and obligations of the parties regarding the loan and the foreclosure proceeding. (FAC, ¶ 161.) Plaintiff alleges that a declaration of the rights and duties of the parties is essential to determine the actual status and validity of the loan and deed of trust. (FAC, ¶ 164.) A complaint for declaratory relief is sufficient “if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a written instrument…and requests that the rights and duties of the parties be adjudged by the court.” (Wellenkamp v. Bank of America (1978) 21 Cal.3d 943, 947.) Defendant argues that Plaintiff fails to demonstrate the existence of an actual controversy. However, the Court finds that Plaintiff alleges sufficient facts establishing an actual controversy, as the allegations describe “a probable future controversy relating to the legal rights and duties of the parties.” (See Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 Cal. App. 4th 877, 855.)