Case Number: BC504560    Hearing Date: October 06, 2014    Dept: 46

Case Number: BC504560
JUNE COOLEY VS WORLD SAVINGS BANK FSB ET AL
Filing Date: 04/02/2013
Case Type: Other Real Property Rights Case (General Jurisdiction)

This tentative ruling is posted at 4:30 p.m. on 10/3/2014. Sorry for the late posting.

(1) Demurrer to Second Amended Complaint

TENTATIVE RULING: Demurrer is sustained WITHOUT LEAVE TO AMEND as to the first and second causes of action. Plaintiff is given leave to amend the third cause of action for quiet title by providing a verification to the pleading. Amended pleading shall be filed within 5 days.

On 9/16/13, Plaintiff filed her First Amended Complaint alleging the same five causes of action. Defendants demurred to the First Amended Complaint, and on 3/7/14, the Court again sustained the demurrer with 20 days leave to amend.

On 3/25/14, Plaintiff filed her Second Amended Complaint alleging (1) Conspiracy (based on Breach of Fiduciary Duty); (2) Declaratory Relief; and (3) Quiet Title.

1st COA: Conspiracy (Based upon Breach of Fiduciary Duty) – The Demurrer is sustained without leave to amend

The elements of conspiracy are (1) Defendants’ agreement to the objective and course of action to injure; (2) wrongful act pursuant to such agreement; and (3) resulting damage. Berg & Berg Ent., LLC v. Sherwood Partners, Inc. (2005) 131 Cal. App. 4th 802, 823. “Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors.” Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511

Plaintiff’s first cause of action for Conspiracy is defective. Plaintiff bases her conspiracy claim upon alleged James’s breach of fiduciary duty; specifically, allegations of fraud and forgery of the allegedly invalid Power of Attorney.

Plaintiff only offer conclusory statements that James and Wells Fargo entered into a conspiracy to grant James “a loan without plaintiff’s knowledge or consent and to use plaintiff’s interest in the subject matter real property as security” and that they “knowingly and willfully conspired and agreed among themselves to use a forged Power of Attorney form to allow James M. Cooley to sign plaintiff’s name to loan documents.” (SAC ¶ 17.)

Plaintiff presents no specific facts as to the James and Well Fargo’s alleged agreement, or even when and how they entered into the alleged agreement.

Also, as addressed by the Court in its order sustaining the demurrer to the First Amended Complaint, Plaintiff has failed to establish that Wells Fargo owes Plaintiff a fiduciary duty.

Furthermore, Plaintiff has failed to show what damage she has suffered as a result of the alleged conspiracy. The settlement agreement between Plaintiff and James, which is attached as Exhibit 8 to the Second Amended Complaint, requires James to either pay off the Deed of Trust, transfer the loan to one of his other properties, or sell the remaining two properties to satisfy the Deed of Trust. “Facts appearing in exhibits attached to a complaint will also be accepted as true and will be given precedence over any contrary allegations in the pleadings.” Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044-1045.

Thus, Plaintiff has not adequately pleaded the third element of conspiracy, damages.

Therefore, the demurrer to the first cause of action for Conspiracy is SUSTAINED WITHOUT leave to amend. Leave to amend is not granted since the facts relating to the incidents giving rise to the claims in this action are not reasonably in dispute and no liability exists under the substantive law as to those facts even after the Plaintiff was given prior opportunity to amend. Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App. 4th 497, 535; Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436. Furthermore, Plaintiffs have not demonstrated how the SAC could be amended to state a viable cause of action.

2nd COA: Declaratory Relief– The Demurrer is sustained without leave to amend

The cause of action for Declaratory Relief requires Plaintiff to show: Person interested under a written instrument or a contract or a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property and an actual controversy. CCP §1060.

The second cause of action for Declaratory Relief is defective because it is derivative of Plaintiff’s other causes of action, and thus, it fails to state a claim against Wells Fargo. Declaratory relief is not available when the “when the rights of the complaining party have crystallized into a cause of action for past wrongs, all relationship between the parties has ceased to exist and there is no conduct of the parties subject to regulation by the court.” Osseous Technologies of America, Inc., supra, 191 Cal.App.4th 357, 367.)
Furthermore, the declaratory relief cause of action, which seeks to invalidate the Deed of Trust, contradicts Exhibit 8 attached to the Second Amended Complaint, in which Plaintiff and James acknowledge the Deed of Trust and agree that James will pay it off.
Plaintiff has not cured the fatal defects that were identified in the ruling on the demurrer to the First Amended Complaint. As such, the demurrer to the second cause of action for Declaratory Relief is SUSTAINED WITHOUT leave to amend. Leave to amend is not granted since the facts relating to the incidents giving rise to the claims in this action are not reasonably in dispute and no liability exists under the substantive law as to those facts even after the Plaintiff was given prior opportunity to amend. Jenkins v. JP Morgan Chase Bank, N.A. (2013) 216 Cal.App. 4th 497, 535; Lawrence v. Bank of America (1985) 163 Cal.App.3d 431, 436. Furthermore, Plaintiffs have not demonstrated how the SAC could be amended to state a viable cause of action.

3rd COA: Quiet Title – Plaintiff must supply a verification to this cause of action.

CCP §761.020 states:

The complaint [for quiet title] shall be verified and shall include all of the following:

(a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall include both its legal description and its street address or common designation, if any.

(b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.

(c) The adverse claims to the title of the plaintiff against which a determination is sought.

(d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.

(e) A prayer for the determination of the title of the plaintiff against the adverse claims.

Here, the third cause of action for Quiet Title fails because Plaintiff’s Second Amended Complaint is not verified as required by CCP §761.020.

Therefore, Plaintiff’s third cause of action for quiet title in the Second Amended Complaint is SUSTAINED with leave to amend.

(2) Motion for Leave to File Verified Third Amended Complaint.

TENTATIVE RULING: Motion is DENIED>

Plaintiff argues that new facts and law justify the filing of Plaintiff’s proposed Third Amended Complaint. Plaintiff only learned in April or May 2014 that the Power of Attorney form supplied by defense counsel was false, and this justifies joining Fidelity National Title Insurance Company. Furthermore, the Court of Appeal opinion in American Master Lease LLC v. Idanta Partners, Ltd. was only published on May 5, 2014, and this opinion justifies amendment because its supports holding that Wells Fargo and Fidelity may be held liable on an aiding and abetting cause of action regardless of whether those defendants owe Plaintiff a fiduciary duty. Furthermore, amendment permits Plaintiff to verify her pleadings.

Wells Fargo opposes Plaintiff’s motion on the grounds that Plaintiff’s counsel fails to provide a declaration specifying the reasons why the request for amendment was not made sooner. The action has been pending since April 2013, and a Third Amended Complaint would be Plaintiff’s fourth attempt at alleging claims against Wells Fargo for conduct of James Cooley. Paragraph four of Plaintiff’s counsel’s declaration submitted in support of the motion admits that Plaintiff’s counsel received a copy of the Power of Attorney in November 2012. Furthermore, Plaintiff should not be granted leave to amend at this late date. The trial date is only six weeks from the date of this hearing, and Wells Fargo will be prejudiced in having to defend against new causes of action at this late date.

Plaintiff June Cooley (“Plaintiff”) seeks leave to file a verified Third Amended Complaint. Plaintiff seeks to add causes of action for (1) Aiding and Abetting Breach of Fiduciary Duty and (2) Fraud. Plaintiff proposed Third Amended Complaint continues to allege causes of action for (3) Declaratory Relief and (4) Quiet Title. Plaintiff also seeks to add Fidelity National Title Insurance Company as a defendant. Defendant Wells Fargo Bank, N.A., is the successor-in-interest to World Savings Bank, FSB (hereinafter “Wells Fargo”) opposes Plaintiff’s motion.

The court may deny leave to amend sought on the eve of trial when the amendment would interject new issues into the case that may require further investigation or discovery. Nelson v. Specialty Records, Inc. (1970) 11 Cal.App.3d 126, 139; Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486–487.)

Plaintiff has failed to adequately state why neither she nor her counsel did failed to discover potential claims stemming from the Power of Attorney form and against Fidelity National Title Insurance Company until April 2014. This action was filed in April 2013, but Plaintiff’s counsel Casey Olson admits in his declaration in support Plaintiff’s motion that he received a copy of the Power of Attorney form in November 2012. (Olson Decl., ¶ 4.) Olson further states that he only realized that he “realized” the new claims in April of 2014. (Olson Decl., ¶ 6.)

California Rules of Court, rule 3.1324(b), requires that the declaration accompanying a motion for leave to file an amended complaint state “[t]he reasons why the request for amendment was not made earlier.” Plaintiff and her counsel have not provided sufficient detail as to why these new claims were suddenly discovered over a year and half after Plaintiff’s counsel received a copy of the Power of Attorney. Furthermore, Plaintiff’s counsel states that he discovered the new claims in April 2014, but did not contact Wells Fargo’s counsel until July 3, 2014, asking for a stipulation to allow Plaintiff to file a Third Amended Complaint. No explanation is provided as to why Plaintiff’s counsel waited approximately three months to approach Wells Fargo’s counsel with the new defendant and claims. Once contacted by Wells Fargo’s counsel on July 10 or 11 and told that Wells Fargo would not stipulate to the filing of a Third Amended Complaint, Plaintiff’s counsel then waited over one month to file this motion on August 15, 2014. Thus, Plaintiff has failed to specify why amendment was not made earlier.

Also, the trial date for this matter is November 19, 2014, which is approximately six weeks from the date of the hearing on Plaintiff’s motion for leave. The Court finds that Defendant will suffer prejudice if amendment is permitted on the eve of trial. Amendment here would interject new issues into this matter and would likely require further discovery and the continuance of the trial date. See Nelson v. Specialty Records, Inc. (1970) 11 Cal.App.3d 126, 139.

Therefore, the Motion of Plaintiff June Cooley for Leave to File Verified Third Amended Complaint with new causes of action is DENIED.