Case Name:   Lawrence J. Hoffart, et al. v. U.S. Bank National Association, et al.

Case No.:       1-14-CV-264279

 

This action arises from foreclosure proceedings involving the home of plaintiffs Lawrence J. Hoffart and Sandra M. Hoffart (“Plaintiffs”).  Plaintiffs allege that defendants JPMorgan Chase Bank, National Association (“JPMorgan”), U.S. Bank National Association, as trustee, successor in interest to Bank of America, National Association, as trustee as successor by merger to LaSalle Bank, National Association, as trustee for WaMu Mortgage Pass-Through Certificates Series 2005-AR19 Trust (“US Bank”), and Albertelli Law Partners California, PA dba ALAW (“ALAW”) (collectively, “Defendants”) are attempting to sell Plaintiffs’ property at a trustee’s sale without a lawful claim to the property.  (Complaint, ¶ 10.)

 

According to Plaintiffs, the original lender of their loan was either Washington Mutual Bank, FA or Washington Mutual Bank, F.A a Federal Savings Bank (“WaMu”).  (See Complaint, ¶¶ 5, 8 and 12-18.)  However, before December 31, 2005, WaMu’s note was transferred to Washington Mutual Mortgage Securities Corporation or “WaMu Asset Acceptance Corporation” and was sold to an investment trust.  (See Complaint, ¶¶ 17 and 44.)  Thereafter, WaMu was neither the lender nor the beneficiary.  (Complaint, ¶ 17.)  In 2008, WaMu went into receivership and the Federal Deposit Insurance Corporation (“FDIC”) entered into a Purchase and Assumption Agreement (the “P&A Agreement”) with JPMorgan, by which certain assets and liabilities of WaMu were sold to JPMorgan.  (See Complaint, ¶¶ 22-29.)  Plaintiffs allege that the P&A Agreement did not transfer ownership of their loan to JPMorgan, since the loan was not held by WaMu on the date the P&A Agreement was executed.  (Complaint, ¶ 30.)  Consequently, the assignment of the deed of trust associated with Plaintiffs’ loan that was executed by JPMorgan on April 20, 2012 (the “Assignment”) and purportedly transferred the loan to US Bank was invalid.  (See, Complaint, ¶¶ 42-44.)  The Assignment was also invalid because Melissa Riley, who signed it, did not have the authority to do so and had no personal knowledge of the facts involved in the Assignment, the notary’s signature on the Assignment is a forgery, and no consideration was exchanged between JPMorgan and US Bank.  (See Complaint, ¶¶ 43 and 44.)  In addition, there is no recorded assignment of the deed of trust from the FDIC to JPMorgan and no valid declaration and demand for sale were executed and delivered to the trustee.  (See Complaint, ¶ 44.)

 

On April 24, 2014, Plaintiffs filed this action, asserting claims against each of the Defendants for: (1) cancellation of instruments pursuant to Civil Code section 3412; (2) violation of Business and Professions Code section 17200, et seq.; (3) violation of Civil Code section 2924, subdivisions (a)(6) and (f)(3); (4) declaratory relief; (5) negligence; (6) violation of Civil Code sections 2924.17; and (7) violation of Civil Code sections 2923.5 and 2923.55.

 

On June 17, 2014, JPMorgan and US Bank filed the instant demurrer, in which they contend that each cause of action in the complaint fails to state a claim.  (Code Civ. Proc., § 430.10, subd. (e).)

 

Request for Judicial Notice

 

JP Morgan and US Bank seek judicial notice of the following documents in support of their demurrer: (1) the deed of trust recorded in connection with Plaintiffs’ loan (Ex. A); (2) the P&A Agreement (Ex. B); (3) the Assignment (Ex. C); (4) the notice of default recorded with respect to Plaintiffs’ loan (Ex. D); (5) the notices of trustee’s sale recorded with respect to the subject property (Exs. E, F, H, I, and J); (6) the substitution of trustee appointing ALAW as trustee (Ex. G); and (7) a notice of pendency of action — lis pendens filed by Plaintiffs’ attorney concerning this action (Ex. K).  Plaintiffs oppose this request with respect to Exhibits B-J.

 

The request is GRANTED as to Exhibits A and K.  These documents are relevant to the factual background of this action, and their authenticity is not challenged.  (See Evid. Code § 452, subd. (h) [facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy are an appropriate subject of judicial notice]; People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters are subject to judicial notice]; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264 [“courts have taken judicial notice of the existence and recordation of real property records, including deeds of trust, when the authenticity of the documents is not challenged”].)

 

The request is also GRANTED as to Exhibit B, the copy of the P&A Agreement that was published to the FDIC’s web site.  (See Evid. Code 452, subd. (h); Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 753 [“As JPMorgan argues, the FDIC’s  official acts of seizing WaMu’s assets and publishing the P&A Agreement are judicially noticeable. Moreover, as explained post, the FDIC’s  official act of transferring certain WaMu assets (but not certain liabilities) to JPMorgan  as of September 25, 2008—as evinced by the P&A Agreement—is an official act subject to judicial notice under section 452, subdivision (c) under the circumstances of this case.”].)  While Plaintiffs contend in conclusory fashion that the content of the P&A Agreement is in dispute, they do not identify any specific area of dispute, and their evidentiary objections lack merit.  As discussed further below, however, the Court does not take notice of the asserted fact that the P&A Agreement transferred Plaintiffs’ particular loan to JP Morgan given that this is a disputed fact.  (See Mena v. JPMorgan Chase Bank, N.A. (N.D.Cal., Sept. 7, 2012, No. 12-1257 PSG) 2012 U.S. Dist. LEXIS 128585, *24-25 (“Mena”) [“although the court notices the September 2008 Purchase and Assumption Agreement between Chase and the FDIC Receiver of WaMu’s assets, the court may not notice, as undisputed fact, that the effect of this agreement was to transfer to Chase the beneficial interest in question”]; cf. Scott v. JPMorgan Chase Bank, N.A., supra, 214 Cal. App. 4th at p. 753, 758-759 [“Scott did not question with specificity the authenticity, completeness, or legal effect of the P&A Agreement posted on the official FDIC Web site”; distinguishing Mena on this basis].)

 

Finally, the request is GRANTED as to Exhibits C-J, but only with respect to the existence and recordation of these documents, given that their legal effect is unclear and in dispute as discussed below.  (See Fontenot v. Wells Fargo Bank, N.A., supra, 198 Cal.App.4th at p. 265 [“[A] court may take judicial notice of the fact of a document’s recordation, the date the document was recorded and executed, the parties to the transaction reflected in a recorded document, and the document’s legally operative language, assuming there is no genuine dispute regarding the document’s authenticity. From this, the court may deduce and rely upon the legal effect of the recorded document, when that effect is clear from its face.”].)

 

First Cause of Action for Cancellation of Instruments

 

JPMorgan and US Bank contend that the first cause of action fails because Plaintiffs’ argument that the Assignment was invalid depends upon their theory that WaMu’s interest in the loan and deed of trust at issue was destroyed by the securitization of the loan in 2005, and this theory is contrary to the law.  They also argue that Plaintiffs lack any legal standing to challenge the securitization because they were not parties to the securitization agreements.

 

Contrary to JPMorgan and US Bank’s characterization, the complaint does not clearly state that the 2005 transaction was a securitization (see Complaint, ¶ 17 [the note was “sold to an investment trust and became a part of, or was subject to, a Loan Pool, a Pooling and Servicing Agreement, a Collateralized Debt Obligation, a Mortgage-Baked [sic] Security, a Mortgage Pass-Through Certificate, a Credit Default Swap, an Investment Trust, and/or a Special Purpose Vehicle”]), and no judicially noticeable documents establish the nature of the transaction.  Thus, the Court must accept Plaintiffs’ allegations that following the 2005 transaction, WaMu “was neither Lender nor the Beneficiary” and “relinquished any rights to the Loan after selling it” for compensation.  (Complaint, ¶¶ 17 and 18.)  Further, the complaint alleges that prior to this transaction, WaMu transferred Plaintiffs’ loan to another entity, either “Washington Mutual Mortgage Securities Corporation” or “WaMu Asset Acceptance Corporation.”  (Complaint, ¶¶ 17 and 44.)  Plaintiffs allege that the P&A Agreement did not impact assets held by this other entity (Complaint, ¶ 44), an issue that JPMorgan and US Bank do not address in their opposition.  Consequently, their argument that Plaintiffs fail to allege that WaMu transferred its interest in their loan prior to the execution of the P&A Agreement fails.  (See Mena v. JP Morgan Chase Bank, N.A., supra, 2012 U.S. Dist. LEXIS 128585 at pp. *22-25 [“The court must take as true the alleged transfer of beneficial interest in April 2007 by WaMu to the WaMu Asset Acceptance Corp. and to the WaMu Trust, which Defendants do not appear to dispute.… neither may the court rely on Defendants’ assertions of [the] chain of title, which appears to be a factual matter that Plaintiffs dispute. And although the court notices the September 2008 Purchase and Assumption Agreement between Chase and the FDIC Receiver of WaMu’s assets, the court may not notice, as undisputed fact, that the effect of this agreement was to transfer to Chase the beneficial interest in question, that interest already having been ‘spun off’ according to the Complaint.”]; cf. Lomely v. JP Morgan Chase Bank, N.A. (N.D. Cal., Sept. 17, 2012, No. 5:12-CV-01194-EJD) 2012 U.S. Dist. LEXIS 132599, *2 [“Lomely alleges that in or around December 2005 his promissory note on the Loan was securitized and became part of various loan pools and investment trusts.”]; Nguyen v. Bank of Am. Nat’l Ass’n (N.D. Cal., Nov. 15, 2011, No. 11-CV-03318-LHK) 2011 U.S. Dist. LEXIS 131776, *9-10 [taking judicial notice of the document effectuating WaMu’s 2007 transfer of a note and deed of trust to a mortgage pass-through certificate trust]; Lane v. Vitek Real Estate Indus. Group (E.D. Cal. 2010) 713 F.Supp.2d 1092, 1099 [“plaintiffs contend that none of the defendants have the authority to foreclose because their loan was packaged and resold in the secondary market, where it was put into a trust pool and securitized”]; Benham v. Aurora Loan Servs. (N.D. Cal., Sept. 1, 2009, No. C-09-2059 SC) 2009 U.S. Dist. LEXIS 78384, *10 [“Plaintiff has not explained how the activity of assigning mortgage loans to a trust pool gives rise to a fraud claim”]; Hafiz v. Greenpoint Mortgage Funding, Inc. (N.D. Cal. 2009) 652 F.Supp.2d 1039, 1043 [“Hafiz’s request for declaratory relief is based on the erroneous theory that all defendants lost their power of sale pursuant to the deed of trust when the original promissory note was assigned to a trust pool.… Plaintiff entirely misstates the law in alleging that defendants must present a note in order to foreclose under the deed of trust.”]; Christiansen v. Wells Fargo Bank (N.D. Cal., Oct. 1, 2012, No. C 12-02526 DMR) 2012 U.S. Dist. LEXIS 142070, *8 [“Plaintiffs allege that in 2005, World Savings Bank securitized and sold Plaintiffs’ deed of trust to a Real Estate Mortgage Investment Conduit trust, and after this sale, World Savings Bank only retained the servicing rights to the loan”].)

 

Further, JPMorgan and US Bank’s argument that Plaintiffs do not have standing to challenge the security agreement lacks merit given that Plaintiffs challenge the Assignment and subsequently issued documents, not the asserted security agreement, and their challenge does not depend upon any alleged noncompliance with the security agreement as in the cases cited by JPMorgan and US Bank.  (See Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 505 [“The crux of Jenkins’s lawsuit is based on her theory her loan was pooled with other home loans in a securitized investment trust, which is purportedly now managed by B of A, as the acting trustee, without proper compliance with the investment trust’s pooling and servicing agreement.”]; Bascos v. Fed. Home Loan Mortg. Corp. (C.D. Cal., July 22, 2011, No. CV 11-3968-JFW (JCx)) 2011 U.S. Dist. LEXIS 86248, *18-19 [“[t]o the extent Plaintiff challenges the securitization of his loan because Freddie Mac  failed to comply with the terms of its securitization agreement, Plaintiff has no standing to challenge the validity of the securitization of the loan as he is not an investor of the loan trust”]; Pugh v. JPMorgan Chase Bank, N.A. (E.D. Cal., Oct. 22, 2013, No. 2:13-cv-01141-MCE-DAD) 2013 U.S. Dist. LEXIS 151873 [“Plaintiffs lack standing to challenge the process in which their mortgage was securitized because they are not [parties] to the [relevant agreements.”], internal citation omitted; Junger v. Bank of Am., N.A. (C.D. Cal., Feb. 24, 2012, No. CV 11-10419 CAS (VBKx)) 2012 U.S. Dist. LEXIS 23917, *2-3 [“According to plaintiff, defendants failed to adhere to the January 31, 2006 deadline for transferring  the note as required by the pool servicing agreement (‘PSA’) that governed the securitization of the note. [Citation.] Plaintiff alleges that this ‘fatal defect’ renders defendants as ‘third-party strangers’ to the underlying debt obligation without power or right to demand payment, declare default, negotiate his loan, or foreclose on his property.”].)

 

Finally, as described above, Plaintiffs allege that the Assignment was invalid based on a number of other theories, such as the signer’s lack of authority to execute the document.  JP Morgan and US Bank fail to address any of their theories in their demurrer, and it is improper to sustain a demurrer where a cause of action states a claim on any theory.  (See Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850 [“[I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory.”].)

 

The demurrer to the first cause of action is accordingly OVERRULED.

 

Third Cause of Action for Violation of Civil Code Section 2924, Subdivisions (a)(6) and (f)(3) and Fourth Cause of Action for Declaratory Relief

 

The demurrer to the third[1] and fourth causes of action is based on the same arguments discussed above with respect to the first cause of action.  These arguments fail for the reasons already discussed.

 

Consequently, the demurrer to the third and fourth causes of action is OVERRULED.

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Fifth Cause of Action for Negligence

 

In their fifth cause of action, Plaintiffs allege that the trustee, ALAW, breached its duty of care to Plaintiffs, which is established by Civil Code section 2924, et seq., “by fabricating documents, allowing their employees and/or agents to execute documents attesting to facts to which they knew they had no personal knowledge, and misrepresenting to Plaintiffs who the true owner of the underlying obligation was and therefore trying to exercise the power to sell authority under the Deed of Trust.”  (Complaint, ¶ 84.)  Plaintiffs allege that ALAW acted as an agent for JPMorgan and US Bank, and Defendants are thus all liable for these actions.  (Complaint, ¶¶ 79, 80, and 84.)  In addition, Plaintiffs allege that US Bank breached its duty of care to Plaintiffs as the purported beneficiary of the deed of trust at issue by failing to discharge its contractual duties under the deed of trust with reasonable care.  (Complaint, ¶ 85.)  JPMorgan and US Bank contend that neither they nor ALAW owed Plaintiffs a duty of care in connection with the events alleged, and Plaintiffs “attempt to impute an alleged breach of duty by Defendant ALAW on Defendants Chase and U.S. Bank without any legal basis for doing so.”  (Mot., p. 12.)

 

As a general rule, 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.  (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 898.)  As urged by Plaintiffs, there may be exceptions where an institution exceeded its conventional role or, possibly, where the factors set forth in Biakanja v. Irving (1958) 49 Cal.2d 647, 650 (hereinafter, “Biakanja”) support such a result.[2]  (See Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 899-902 [“Perhaps the Biakanja factors must be applied here too.”].)  Here, however, neither exception applies.  In initiating or directing the trustee to initiate foreclosure proceedings, a lender acts in its conventional role.  (See Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 740 [suggesting that a lender does not exceed its conventional role by foreclosing on collateral when a debt is not paid].)  Nor does Biakanja support the imposition of a duty under the circumstances presented, given that “trust deed nonjudicial foreclosure sales are comprehensively regulated by the detailed statutory scheme set forth in section 2924 et seq.,” and it would be inappropriate to “graft[] a tort remedy onto a comprehensive statutory scheme in the absence of a compelling justification for doing so.”  (Residential Capital v. Cal-Western Reconveyance Corp. (2003) 108 Cal.App.4th 807, 821, 827; cf. Jolley v. Chase Home Finance, LLC, supra, 213 Cal.App.4th at pp. 898, 901 [finding duty may exist where there was an ongoing dispute about performance of a construction loan contract and specific representations were made by the lender as to the likelihood of a loan modification; specifically noting that the loan at issue was “a construction loan, not a residential home loan where, save for possible loan servicing issues, the relationship ends when the loan is funded”].)

 

Furthermore, Plaintiffs do not identify any contractual duty owed by US Bank under the deed of trust that it failed to exercise with reasonable care, and the case cited in the complaint in support of this theory does not support the result they seek.  (See Das v. Bank of America, N.A., supra, 186 Cal.App.4th 727 [affirming dismissal of negligence claim where daughter alleged that bank failed to report financial abuse of her father that had been accomplished through real estate transactions and lottery scams].)  Consequently, Plaintiffs fail to allege a claim for negligence based on JP Morgan and/or US Bank’s actions.

 

Plaintiffs contend that they nevertheless state a claim against JP Morgan and US Bank based on ALAW’s actions, either on a theory of vicarious liability or on a theory of aiding and abetting.  (See Complaint, ¶¶ 79, 84, 85, and 86.)  However, Plaintiffs cite no authority for the proposition that JP Morgan and US Bank may be held liable for ALAW’s alleged breach of its independent duties as trustee or for aiding and abetting negligence, as opposed to an intentional tort, and these theories are inconsistent with the requirement that a claim for negligence allege a duty owed by the defendant itself.  (See Koehler v. Pulvers (S.D. Cal. 1985) 606 F. Supp. 164, 173, fn.10 [noting that an allegation of civil conspiracy appears inherently inconsistent with the allegation of an underlying act of negligence]; cf. Das v. Bank of America, N.A., supra, 186 Cal.App.4th at p. 744 [noting that California recognizes a cause of action for aiding and abetting an intentional tort].)

 

Accordingly, the demurrer to the fifth cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.
Sixth Cause of Action for Violation of Civil Code Section 2924.17

 

In their demurrer to the sixth cause of action, JP Morgan and US Bank correctly contend that Civil Code section 2924.17, which is part of the Homeowners Bill of Rights that went into effect on January 1, 2013, does not apply to documents recorded prior to that date.  (See Michael J. Weber Living Trust v. Wells Fargo Bank, N.A. (N.D. Cal., Mar. 25, 2013, Case No. 13-cv-00542-JST) 2013 U.S. Dist. LEXIS 41797, *10-11 [section 2924.17 does not apply to actions alleged to have occurred prior to January 1, 2013]; McGough v. Wells Fargo Bank, N.A. (N.D. Cal. Oct. 22, 2012) 2012 U.S. Dist. LEXIS 151737, *16-17, n.4 [noting that there is no indication that the Homeowners Bill of Rights was intended to be or will be applied retroactively].)  Plaintiffs do not address this argument in their opposition, and the sixth cause of action pertains to the notice of default recorded in 2012.  (Complaint, ¶¶ 93 and 94, Ex. C.)

 

Consequently, the demurrer to the sixth cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.
Seventh Cause of Action for Violation of Civil Code Sections 2923.5 and 2923.55

 

In their seventh cause of action, Plaintiffs allege that JPMorgan and US Bank violated Civil Code sections 2923.5 and 2923.55, which provide, respectively, that a notice of default may not be recorded unless the mortgage servicer has contacted the borrower to discuss options to avoid foreclosure and provided certain information to the borrower in writing.  JP Morgan and US Bank contend that because the notice of default at issue contains a declaration stating that JP Morgan attempted to contact Plaintiffs in compliance with section 2923.5, Plaintiffs’ conclusory allegations to the contrary should be disregarded.  They also argue that a claim under section 2923.5 is inappropriate here because the remedy provided by that section is postponement of the foreclosure sale, while the sale in this case has already been postponed several times.  JP Morgan and US Bank do not address the issue of their compliance with Civil Code section 2923.55.

 

The argument that JP Morgan’s declaration of compliance defeats Plaintiffs’ allegations that Defendants did not comply with Civil Code section 2923.5 (Complaint, ¶¶ 98 and 100) lacks merit.  (See Skov v. U.S. Bank National Assn. (2012) 207 Cal.App.4th 690, 696 [“whether U.S. Bank complied with section 2923.5 is the type of fact that is reasonably subject to dispute, and thus, not a proper subject of judicial notice” despite the recording of a declaration of compliance; demurrer was improperly sustained]; Intengan v. BAC Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1057 [“Civil Code section 2923.5 requires not only that a declaration of compliance be attached to the notice of default, but that the bank actually perform the underlying acts … that would constitute compliance. While judicial notice could be properly taken of the existence of Jones’s declaration, it could not be taken of the facts of compliance asserted in the declaration, at least where, as here, Intengan has alleged and argued that the declaration is false and the facts asserted in the declaration are reasonably subject to dispute”]; Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1494-1495 [recognizing that “[a] borrower may state a cause of action under section 2923.5 by alleging the lender did not actually contact the borrower or otherwise make the required efforts to contact the borrower despite a contrary declaration in the recorded notice of default,” although holding demurrer properly sustained where specific allegations of the complaint demonstrated the required contacts had been made].)  In addition, section 2923.5 provides for “a postponement of an impending foreclosure to permit the lender to comply with” that section (Mabry v. Super. Ct. (Aurora Loan Services) (2010) 185 Cal.App.4th 208, 214), not, as JP Morgan and US Bank suggest, to permit the borrower to initiate the process of exploring options to avoid foreclosure (see Mot., p. 14 [“this claim is a complete red herring because Plaintiffs have not been on notice of foreclosure proceedings for over 18 months and have had every opportunity to ‘explore options for the borrower to avoid foreclosure’”]).

 

Accordingly, the demurrer to the seventh cause of action is OVERRULED.

 

Second Cause of Action for Violation of Business and Professions Code Section 17200, et seq.

 

Finally, Plaintiffs assert a claim for violation of Business and Professions Code section 17200, et seq.  JP Morgan and US Bank contend that Plaintiffs lack standing to bring such a claim, and the claim also fails on substantive grounds.

 

As to the standing issue, JP Morgan and US Bank argue that Plaintiffs have not suffered a loss of money or property as required to support their claim, given that foreclosure on their home has not yet been completed.  This argument was rejected by the court in Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 522, which held that a plaintiff in the process of nonjudicial foreclosure adequately pleaded economic injury based on that status.  JP Morgan and US Bank also contend that Plaintiffs fail to allege their injury was caused by JP Morgan and US Bank’s conduct, as opposed to Plaintiffs’ own default.  However, the fact that Plaintiffs defaulted on their loan is not before the Court given that Plaintiffs do not actually allege that they defaulted.  Further, considering Plaintiffs’ theory that a third-party entity owns their loan, it cannot be said that this entity would necessarily have proceeded to foreclose as Defendants have elected to do and that the allegedly unlawful foreclosure is not the cause of the harm to Plaintiffs.  (Cf. Jenkins v. JPMorgan Chase Bank, N.A., supra, 216 Cal.App.4th at p. 523 [“Importantly, Jenkins admits in both her SAC and opening brief that she defaulted on her loan. It is also indisputable Jenkins’s default triggered the lawful enforcement of the power of sale clause in the deed of trust, and it was the triggering of the power of sale clause that subjected Jenkins’s home to nonjudicial foreclosure. Moreover, Jenkins’s SAC and opening brief acknowledge her default occurred prior to the six unlawful or unfair acts she alleges as the basis of her UCL action.”].)  Consequently, JP Morgan and US Bank’s standing argument lacks merit.

 

JP Morgan and US Bank also contend that Plaintiffs fail to allege unlawful conduct under section 17200, et seq. because their other claims fail.  However, as discussed above, Plaintiffs have adequately alleged violations of several laws.  Accordingly, JP Morgan and US Bank’s argument fails.

 

The demurrer to the second cause of action is thus OVERRULED.

 

The currently-scheduled case management conference (8-19-14) is CONTINUED to October 21, 2014 at 10:00 a.m. in Department 5.

 

[1] In their reply brief, JP Morgan and US Bank assert that Plaintiffs have abandoned their claims for violation of Civil Code sections 2924, subdivisions (a)(6) and (f)(3), 2924.17, and 2923.5 and 2923.55 by not addressing them in their opposition.  However, “[i]t is well established that the failure of a party to appear and argue against a demurrer to his pleading is not per se a waiver of the cause of action stated in the complaint or the defense stated in the answer.” (Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 797.)

[2] Biakanja held that “[t]he determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm.”  (Biakanja v. Irving, supra, 49 Cal.2d at p. 650.)