2011-00104315-CU-OR

Lilia Kryvoshey vs. American Brokers Conduit

Nature of Proceeding:    Hearing on Demurrer

Filed By:  Grewal, Gurinder S.

Defendants AHMSI Default Services, Inc. (“AHMSI Default”) and Deutsche Bank
National Trust Company as Trustee for American Home Mortgage Assets Trust 2006-5
Mortgage-Backed Pass-Through Certificates, Series 2006-5 (“Deutsche Bank”)
(collectively, “Defendants”) filed a demurrer to Plaintiff Lilia Kryvoshey’s (“Plaintiff”)
First Amended Complaint (“FAC”).  For the reasons that follow, Defendant’s demurrer
is SUSTAINED, with and without leave as described below.

Tentative Ruling Language

The notice of motion does not provide notice of the Court’s tentative ruling system as
required by with C.R.C., Rule 3.1308 and Local Rule 1.06(D). Local Rules for the
Sacramento Superior Court are available on the Court’s website.  Counsel for moving
party is ordered to notify opposing party immediately of the tentative ruling system and  to be available at the hearing, in person or by telephone, in the event opposing party
appears without following the procedures set forth in Local Rule 1.06(B).

Factual Allegations

Plaintiff alleges claims arising out of a default on her mortgage loan. The case was
removed to federal court and remanded to state court in November 2011. The
foreclosure sale occurred May 16, 2012.  Plaintiff filed a notice of entry of the District
Court’s order on January 22, 2014.

Plaintiff’s First Amended Complaint asserts various causes of action as itemized in
separate headings below.  Plaintiffs’ FAC includes several allegations pertaining to
AHMSI Default and Deutsche Bank specifically.  For example, the FAC alleges that as
of recordation of a Deed of Trust pertaining to Plaintiff’s real property on July 16, 2009,
AHMSI Default was listed as the “duly appointed Substituted Trustee” on (FAC ¶ 10;
Exh. 2 to FAC), that Deutsche Bank was listed as the “Beneficiary” on the “Assignment
of Deed of Trust” recorded on March 11, 2011 (FAC ¶ 14; Exh. 6 to FAC), that AHMSI
Default was listed as “Trustee” on “two separate Notice of Trustee’s Sales” recorded
on July 16, 2009, and July 10, 2009 (FAC ¶ 11; Exhs. 3-4 to FAC), that, as of
recordation on March 11, 2011, Deutsche Bank is listed on the Assignment of Deed of
Trust as the “Beneficiary” (FAC ¶ 14; Exh. 6 to FAC), and that following a Trustee’s
Sale, a Trustee’s Deed Upon Sale was issued in favor of Deutsche Bank (FAC ¶ 19;
Exh. 19 to FAC).

The FAC describes various recorded land documents, the dates of recordation and
entities named therein, and attaches copies of the documents.  (FAC ¶¶ 6-20.)  The
FAC then alleges these various recorded documents “were not executed in
accordance with the requirements of California Civil Code § 2924 et seq.” (FAC ¶ 32.)

Many of Plaintiff’s claims are premised upon her theory that “in ‘selling’ [Plaintiff’s]
mortgage note[] on the secondary market, Defendants failed to follow the simple legal
requirements for the transfer of a negotiable instrument and an interest in real
property” such that “[n]o interest in Plaintiff’s mortgage note, deed of trust[,] or property
were ever legally transferred to any of the Defendants” such that they cannot have
legally initiated foreclosure proceedings on the subject Property.  (FAC ¶¶ 25-26, 29.)

Request for Judicial Notice

Defendants filed a Request for Judicial Notice (“Def.’s RJN”), which attaches various
documents recorded by the Sacramento County Recorder.  (Def.’s RJN, Exhs. A-G.)
The RJN is unopposed and GRANTED.

However, in taking judicial notice of these documents, the Court accepts the fact of
their existence, not the truth of their contents.  (See Professional Engineers v. Dep’t of
Transp. (1997) 15 Cal.4th 543, 590 (judicial notice of findings of fact does not mean
that those findings of fact are true); Steed v. Department of Consumer Affairs (2012)
204 Cal.App.4th 112, 120-121.)  In taking judicial notice of recorded land documents,
the court accepts the fact of their existence, not the truth of their contents.  (Herrera v.  Deutsche Bank Nat’l Trust Co. (2011) 196 Cal.App.4th 1366, 1375 (“While courts take
judicial notice of public records, they do not take notice of the truth of matters stated
therein.”); see also Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256,
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
the recorded document, and the document’s legally operative language, assuming
there is no genuine dispute regarding the document’s authenticity.”).)

Demurrer

A demurrer challenges only the legal sufficiency of a complaint, not the truth or the
accuracy of its factual allegations or the plaintiff’s ability to prove those allegations.  (
Ball v. GTE Mobilnet of California (2000) 81 Cal.App.4th 529, 534-35.)

Wrongful Foreclosure (First Cause of Action)

“Notice of Default, Notice of Trustee’s Sale, Assignment of Deed of Trust.”

Plaintiff’s broad allegations (FAC ¶¶ 23-30) about scheming lenders, mortgage
brokers, and unsavory practices surrounding the securitization of mortgage notes do
not amount to factual allegations supporting Plaintiff’s particular claims in this particular
case.  These allegations constitute argument, not “facts.”  (See, e.g., FAC ¶¶ 29-30
(“[n]one of these alleged beneficiaries or representatives on the Notice of Default
and/or Notice of Trustee’s Sale have the authority to conduct the foreclosure.”).)

The Court agrees with Defendants that Plaintiff’s general allegations regarding
“improper securitization” do not adequately support a “wrongful foreclosure” cause of
action, because regardless of the validity of assignments/transfers during the
securitization process, Plaintiff’s obligation to pay her mortgage debts remained the
same.  (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 515
(“even if any subsequent transfers of the promissory note were invalid, Jenkins is not
the victim of such invalid transfers because her obligations under the note remained
unchanged[,]” and holding that the plaintiff “may not assume the theoretical claims of
hypothetical transferors and transferees for the purposes of showing a “‘controversy of
concrete actuality.’”).) See, also Yvanova v. New Century Mortgage Corp (2014) 226
Cal. App. 4th 495, 501.  [Plaintiff argues the transfer of her promissory note and deed
of trust from New Century Mortgage   to Deutsch Bank and the subsequent
securitization of the note were improper. But even if she is correct, “the relevant parties
to such a transaction were the holders (transferors) of the promissory note and the
third party acquirers (transferees) of the note.”] Procedurally, a promissory note is a
negotiable instrument, and a borrower must anticipate it can and might be transferred
to another creditor. As to plaintiff here, an assignment merely substituted one creditor
for another, without changing her obligations under the note; thus, any impropriety in
the transfer would only affect the parties to the transaction, and not the
plaintiff/borrower. As noted in Jenkins, supra, at p. 515, the borrower lacks standing to
enforce any agreements relating to such transactions.
The allegations underlying the heading for Plaintiff’s First Cause of Action make
reference to only one of the moving Defendants: Deutsche Bank. (FAC ¶ 36.)  The
FAC alleges that “Deutsche . . . instructed the trustee to issue and record the Notice of
Default and initiate non-judicial foreclosure but Deutsche [was] not a true beneficiary or
agent thereof.  Therefore, Defendants’ attempt to initiate foreclosure proceedings
against Plaintiffs [sic] was wrongful.”  (FAC ¶ 36.)  Plaintiff seeks to “void” and “set
aside” the Trustee’s Sale, assignments of the Deed of Trust, and related foreclosure
documents and proceedings.  (FAC ¶ 37.)

Further, as Defendants argue, “the elements of an equitable cause of action to set
aside a foreclosure sale are: (1) the trustee or mortgagee caused an illegal, fraudulent,
or willfully oppressive sale of real property pursuant to a power of sale in a mortgage
or deed of trust; (2) the party attacking the sale (usually but not always the trustor or
mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor
challenges the sale, the trustor or mortgagor tendered the amount of the secured
indebtedness or was excused from tendering.”  (Lona v. Citibank, N.A. (2011) 202 Cal.
App. 4th 89, 104 (emphasis added).)  Here, Plaintiff has not alleged facts supporting
“tender” or Plaintiff’s being “excused from tendering.”  (See id.)  Further, Plaintiff’s
Opposition failed to meaningfully address the “tender” requirement in connection with
her first cause of action, which the Court construes as Plaintiff’s concession to
Defendants’ argument (Def.’s Ps & As at 13 (citing cases)) in that regard.

The FAC also alleges that there was no “unbroken chain of title” for “the entity causing
the foreclosure process to be initiated by the recording of a Notice of Default.” (FAC ¶
35.)  The FAC also alleges that Plaintiff has “standing to challenge a void assignment
of [her] loan and [Deed of Trust] even though she is not a party to” the “Pooling and
Servicing Agreement” (“PSA”) that “created the Trust.”  (FAC ¶ 38.)  The FAC alleges
that the assignments of her deed of trust (and thus all of the foreclosure documents)
were void because according to the subject pooling and servicing agreement (“PSA”),
the deed of trust must have been transferred to the securitized trust within 90 days of
the closing date of the trust and it was not transferred until after that time.  (FAC ¶¶
39, 61-62.)  Plaintiff therefore alleges that “Defendants” do not have the power to
foreclose.  (FAC ¶¶ 42, 66.)  Not so.

As seen in opposition to plaintiff’s arguments, Defendants argue that Plaintiff has no
standing to assert any claim based upon a violation of the terms of the PSA.  While
Plaintiff relies upon Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079, to
argue that she does have standing to assert such a claim,  appellate courts have
recognized that “no California court has followed Glaski on this point, and many have
pointedly rejected it.”  (Yvanova v. New Century Mortgage Corp. (2014) 226 Cal. App.
4th 495, 502 (citing cases and following Jenkins v. JP Morgan Chase Bank, N.A.
(2013) 216 Cal.App.4th 497, 514-515)).  The position set forth in Glaski has been
rejected by several Courts of Appeal.    (Jenkins v. JP Morgan Chase Bank, N.A.
(2013) 216 Cal.App.4th 497, 514-515; Keshtgar v. U.S. Bank, N.A., 2014 Cal. App.
LEXIS 498  June 9, 2014 [not yet final]; Yvanova, supra.) This Court agrees with the
rationale articulated in Jenkins: “As an unrelated third party to the alleged
securitization, and any other subsequent transfers of the beneficial interest under the
promissory note, [Plaintiffs] lack[ ] standing to enforce any agreements, including the  investment trust’s pooling and servicing agreement, relating to such transactions.”  (Id.
) Further, federal courts in the Ninth Circuit have generally rejected Glaski and
embraced Jenkins noting that  Glaski represents a minority view.  (Lanini v. JP Morgan
Chase Bank (E.D. Cal. April 3, 2014) 2014 U.S.Dist.LEXIS 47348 at *13.) Of note,
“Every court in [the Northern] district that has evaluated Glaski has found it is
unpersuasive and not binding authority. See also: (to name but a few federal cases)
Subramani v. Wells Fargo Bank N.A., No. C 13-1605, 2013 U.S. Dist. LEXIS 156556,
2013 WL 5913789, at *3 (N.D. Cal. Oct. 31, 2013) (Judge Samuel Conti); Dahnken v.
Wells Fargo Bank, N.A., No. C 13-2838, 2013 U.S. Dist. LEXIS 160686, 2013 WL
5979356, at *2 (N.D. Cal. Nov. 8, 2013) (Judge Phyllis J. Hamilton); Maxwell v.
Deutsche Bank Nat’l Trust Co., No. C 13-3957, 2013 U.S. Dist.LEXIS 164707, 2013
WL 6072109, at *2 (N.D. Cal. Nov. 18, 2013) (Judge William H. Orrick Jr.); Apostol v.
Citimortgage, Inc., No. C 13-1983, 2013 U.S. Dist. LEXIS 167308, 2013 WL 6140528,
at 6 (N.D. Cal. Nov. 21, 2013) (Judge William H. Orrick Jr.).” (Zapata v. Wells Fargo
Bank, N.A. (N.D.Cal., Dec. 10, 2013, No. C 13-04288 WHA) 2013 U.S.Dist. Lexis
173187 at *5.)

Accordingly, this Court follows Jenkins and  Yvanova and finds that Plaintiff has not
alleged a violation of Civil Code § 2924 or a “wrongful foreclosure” based on
allegations that the terms of the PSA were violated such that one or more transfers in
the chain of title were void.

Accordingly, moving Defendants’ demurrer to the first cause of action is SUSTAINED
WITH LEAVE TO AMEND for failure to state facts sufficient to constitute a cause of
action

Wrongful Foreclosure (Second Cause of Action)

“Failure to Modify Loan Terms”

Plaintiff did not allege a specific promise to actually modify her loan; she alleged that
she was told that only loans in default were considered for modifications and that one
of her payments was unilaterally returned to her thereafter, and that her requested
modification was ultimately denied.  (FAC ¶¶ 78-79.)  Plaintiff’s Opposition fails to
distinguish Defendants’ cited authorities stating that “nothing . . . requires the lender to
rewrite or modify the loan.”  (Mabry v. Superior Court (2010) 185 Cal.App.4th 208,
214.)  Further, in her Opposition Plaintiff appears to attempt to argue that her Second
Cause of Action was actually intended as a “breach of contract” cause of action, but
her second cause of action neither frames it as such nor clearly alleges each element
required to support a cause of action for breach of contract.

Accordingly, Defendants’ demurrer is SUSTAINED with LEAVE TO AMEND as to the
Second Cause of Action.

Wrongful Foreclosure (Third Cause of Action)

“Failure to Modify Based on HAMP”

By way of context, in 2009, the Treasury Department initiated the Home Affordable
Modification Program (“HAMP”) “to incentivize banks to refinance mortgages of
distressed homeowners so they could stay in their homes.” Corvello v. Wells Fargo
Bank, N.A., 728 F.3d 878, 880 (9th Cir. 2013), as amended on reh’g in part (Sept. 23,
2013). As described in Corvello, the process for applying for a permanent loan
modification under the HAMP is as follows: First, borrowers supply information about
their finances and inability to pay their mortgage to their mortgage servicer, and the
servicer evaluates whether the borrower qualifies for a loan modification. Id. Second,
for those borrowers who qualify, the servicer prepares a trial period plan or “TPP,”
which “requires borrowers to submit documentation to confirm the accuracy of their
initial financial representations, and to make trial payments of the modified amount to
the servicer.” Id . at 880-81.

Plaintiff alleges that she was approved for a HAMP modification in October 2009.
(FAC ¶¶ 83, 100.)  Similar to its treatment of the Second Cause of Action for “Wrongful
Foreclosure” as one alleging breach of contract, Plaintiff’s Opposition also frames the
Third Cause of Action for “Wrongful Foreclosure” as one for “breach of contract.” The
elements of a cause of action for breach of contract are: (1) the existence of the
contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by
the defendant; and (4) damages. First Commercial Mortg. Co. v. Reece, (2001) 89 Cal.
App. 4th 731, 745. Thus, at the outset, a claim for breach of contract requires a valid
contract.

Plaintiff shall amend the headings in her pleading to accurately convey the actual
cause(s) of action she intends to allege.  Even if the Third Cause of Action is
construed as alleging a breach of contract, Plaintiff has not alleged facts supporting an
enforceable contract to provide her with a HAMP modification.  (FAC ¶¶ 99-103.)
Plaintiffs’ pleading alleges:  “Contract: Plaintiff and Defendants entered into a HAMP
loan modification process under which if Plaintiff’s financials qualified her for a
modification defendant would be required to modify the loan terms by reducing the
principal to the current value at the prevailing interest rate.”  (FAC ¶ 100.)  As
Defendants argue (Def.’s Ps & As at 4), for instance, Plaintiff has not alleged her own
performance with any such contract.  The Court finds that the Third Cause of Action
presumes a “contract” to provide a HAMP modification and does not clearly allege
facts supporting an offer, acceptance, and consideration supporting such contract, let
alone subsequent performance and breach of such contract.  Plaintiff’s Opposition
suggests that Plaintiff can amend her pleading to insert such facts.  (Pl.’s Oppo. at 9.)
Plaintiff shall have the opportunity to do so.

Plaintiff’s Opposition also suggests that Plaintiff can allege facts that would result in
Defendant being “estopped from invoking the statute of frauds defense” with respect to
alleged oral promises regarding modifications.  (Pl.’s Oppo. at 14.)  Plaintiff shall have
the opportunity to do so.

Accordingly, Defendants’ demurrer is SUSTAINED with LEAVE TO AMEND as to the
Third Cause of Action.

The Court notes that it is not persuaded by Defendant’s argument that Plaintiff’s Third
Cause of Action attempts to bring a cause of action for “violation of HAMP”, or that  Plaintiff needs to have standing to sue for a violation of HAMP.  Instead, Plaintiff’s
pleading attempts to allege that Defendants breached a contract between themselves
and Plaintiff to provide a HAMP modification.  Defendants have not shown that Plaintiff
must have standing to sue for a “HAMP violation” (Def.’s Ps & As at 4) in order to
allege the formation of such a contract. Regardless of whether there is a private right
of action under HAMP, Plaintiff has stated sufficient allegations based on Defendant’s
purported breach of contract, a state law claim . See, e.g.  West v. JPMorgan Chase
Bank, N.A., (2013) 214 Cal. App. 4th 780, 806; see also Barroso v. Ocwen Loan
Servicing, LLC (2012) 208 Cal.App.4th 1001, 1005-1006, 1013-1015 [appellate court
found, without resort to HAMP regulatory directives, that a TPP constituted an
enforceable contract under state law contract principles governing conditions
precedent.]

Rosenthal Act (Fourth Cause of Action)

Defendants argue that Plaintiff’s claim under the Rosenthal Act is deficient because
Plaintiff failed to allege that Defendants are “debt collectors” under that Act, and that
she cannot amend to do so because the term “debt collector” does not include
“creditors, a mortgage servicing company, or any assignee of the debt” and debt
collection does not apply to non-judicial foreclosure.  (Def.’s Ps & As at 5 (citing
cases).)  Numerous courts have held that the mere allegation that a defendant
foreclosed on a deed of trust does not implicate the Rosenthal Act and it appears clear
that foreclosing on a deed of trust does not invoke the statutory protections of the
[Rosenthal Act]”); Pittman v. Barclay Capital Real Estate, Inc., 2009 U.S. Dist. LEXIS
34885, 2009 WL 1108889 (S.D. Cal., April 24, 2009) ); Ines v. Countrywide Home
Loans, Inc., 2008 U.S. Dist. LEXIS 88739, 2008 WL 4791863 (S.D. Cal. Nov. 3, 2008)

Plaintiff’s Opposition did not address this argument or discuss the Fourth Cause of
Action, which the Court construes as a concession that the argument is meritorious.  (
See e.g. Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)

Accordingly, Defendants’ demurrer to the Fourth Cause of Action is SUSTAINED
WITHOUT LEAVE TO AMEND.

Negligence (Fifth Cause of Action) and Breach of Fiduciary Duty (Eighth Cause of
Action)

Defendants’ demurrer is SUSTAINED WITH LEAVE TO AMEND for failure to state
facts sufficient to constitute a cause of action with respect to the Fifth and Eighth
Causes of Action. Plaintiff alleges that Defendants breached a duty of care owed to
her in the context of processing her loan modification application. (FAC ¶¶ 108-112,
134-41.)  Plaintiff also alleges that all defendants were Plaintiffs’ agents and owed her
a fiduciary duty, a duty of loyalty, a duty of fair dealing, and that those duties were
breached “by obtaining a mortgage loan for her that had unfavorable terms.”  (Id. ¶¶
134-41.)

Plaintiff’s allegations are levied against all defendants, and do not specify which
defendant had a duty to Plaintiff and how such duty arose, let alone how such duty
was allegedly breached.  (Id. ¶¶ 110, 139, 134-41.)  Accordingly, Plaintiff’s pleading
does not put each defendant on notice as to whether and on what basis these duty-
based causes of action might target them.

Defendants also cite to the general rule that a financial institution generally owes no
duty of care to a borrower where the institution’s involvement does not exceed the
scope of a conventional lender of money.  (Nymark v. Heart Federal Sav. & Loan
Ass’n (1991) 231 Cal.App.3d 1089, 1096.) Further, “a loan modification is the
renegotiation of loan terms, which falls squarely within the scope of a lending
institution’s conventional role as a lender of money. A loan modification is a traditional
money lending activity, warranting application of the rule articulated in Nymark . See
e.g. Settle v. World Sav. Bank, F.S.B., 2012 U.S. Dist. LEXIS 4215. As noted in
Sullivan v. JP Morgan Chase Bank, NA, (2010) 725 F. Supp. 2d 1087, “Plaintiffs have
provided no authority to support their argument that lenders owe borrowers a duty of
care not to misinform them about the loan modification process. Therefore, Plaintiffs’
allegations that Defendant misrepresented to them that a permanent loan modification
would be put into place are insufficient to form the basis of a negligence claim.” Id. at
p. 1094.  A lender’s obligation to offer, consider, or approve loan modifications and to
explore foreclosure alternatives are created solely by the loan documents, statutes,
regulations, and relevant directives and announcements from the United States
Department of the Treasury.”  (Lueras v. BAC Home Loans Servicing, LP (2013) 221
Cal.App.4th 49, 67.)  Plaintiff attempts to rely upon dicta set forth in Jolley v. Chase
Home Finance, LLC (2013) 213 Cal.App.4th 872  901, a case involving a construction
loan which suggested that based upon an analysis of the Biakanja factors, a lender of
home loans may owe a duty even in its traditional role as a lender of money. The court
in Lueras expressly rejected Jolley’s suggestion: “We disagree 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 explore and offer foreclosure alternatives.”  (Id.)
Nonetheless, Lueras also recognized that a servicer can have a duty not to make
material misrepresentations regarding “the status of an application for a loan
modification” and/or regarding the status of a foreclosure.  (Id. at 68-69 [granting leave
to amend a negligence cause of action against a financial institution as it “is
foreseeable that a borrower might be harmed by an inaccurate or untimely
communication about a foreclosure sale or about the status of a loan modification, and
the connection between the misrepresentation and the injury suffered could be very
close”].)

Here, because Plaintiff’s Fifth and Eighth Cause of Action fail to name any particular
defendants or allege any particular conduct during the modification-negotiation and
mortgage loan process, those causes of action are deficient as currently alleged.
(FAC ¶¶ 108-112; 134-41.)  Broadly incorporating all foregoing allegations (e.g., id. ¶¶
108, 134) does not suffice to put each defendant on notice as to the claim(s) against
them, especially given the breadth of those foregoing allegations.

Accordingly, Defendants’ demurrer is SUSTAINED WITH LEAVE TO AMEND for  failure to state facts sufficient to constitute a cause of action with respect to the Fifth
and Eighth Causes of Action.

Fraud (Sixth Cause of Action)

Defendants demur to the Fraud cause of action in part on the grounds that Plaintiff has
not pled it with the requisite specificity.  “The requirement of specificity in a fraud action
against a corporation requires the plaintiff to allege the names of the persons who
made the allegedly fraudulent representations, their authority to speak, to whom they
spoke, what they said or wrote, and when it was said or written.”  ( Tarmann v. State
Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)  Plaintiff’s pleading lacks
such specificity.  (FAC ¶¶ 113-128.)  These allegations refer to all defendants,
collectively, and reference “representations” in general, failing to specify which
particular representations by which particular defendants serve as the bases for the
fraud cause of action.

Plaintiff’s Opposition clarifies that the Fraud cause of action arises from alleged denials
of a loan modification and alleged “wrongful foreclosure.”  (Pl.’s Oppo. at 8.)  But
Plaintiff’s Opposition fails to address Defendants’ argument that a Fraud cause of
action cannot stand with respect to recordation of a deed of trust in alleged violation of
Civil Code § 2932.5 (Def.’s Ps & As at 8), and fails to address Defendants’ argument
that a fraud cause of action cannot stand as against documented and recorded
assignees of the Lender (id. at 9-10).  The Court considers Plaintiff’s failure to respond
to these arguments as a concession as to their merits.  (See e.g. Herzberg v. County
of Plumas (2005) 133 Cal.App.4th 1, 20.)

Accordingly, Defendants’ demurrer is SUSTAINED with LEAVE TO AMEND.

Having sustained Defendants’ demurrer on these grounds, the Court need not address
Defendants’ remaining arguments to this cause of action.

Business & Professions Code § 17200 (Seventh Cause of Action)

Defendants demur to Plaintiff’s Seventh Cause of Action (“UCL claim”) on grounds that
because the claims underlying it are deficient, it is equally deficient.  (Def.’s Ps & As at
10.)  Because the Court gives Plaintiff leave to amend her underlying causes of action,
however, it would be premature to dismiss this cause of action without leave to amend.

However, the Court notes that Plaintiff’s Opposition in no way addressed Defendant’s
argument that Plaintiff has no standing to assert a UCL claim given that “any
misconduct that occurred after [Plaintiff’s] default” on the loan “did not cause” Plaintiff’s
claimed injury.  (Def.s’ Ps & As at 10.)  The Court considers Plaintiff’s failure to
respond to this argument as a concession as to its merits.  (See e.g. Herzberg v.
County of Plumas (2005) 133 Cal.App.4th 1, 20.)

Accordingly, the demurrer to the Seventh Cause of Action is SUSTAINED with LEAVE
TO AMEND.
Declaratory Relief (Ninth Cause of Action)

Defendants demur to the Ninth Cause of Action for Declaratory Relief on grounds that
it is not “an independently viable claim, but rather an equitable remedy that attaches to
other properly pled causes of action.”  (Def.’s Ps & As at 11.)

Plaintiff’s Opposition failed to address the Ninth Cause of Action or Defendant’s
argument in this regard.  Moreover, the Court notes that Plaintiff’s Prayer for Relief
seeks a “declaration of the rights and duties of the parties relative to Plaintiff’s home to
determine the actual status and viability of the loan, Deed of Trust, and Notice of
Default.”  (FAC at 29.)

The Court considers Plaintiff’s failure to respond to this argument as a concession as
to its merits.  (See e.g. Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)
Accordingly, the demurrer to the Ninth Cause of Action is SUSTAINED WITHOUT
LEAVE TO AMEND.

Set Aside and Void Note and Deed of Trust as Unconscionable (Tenth Cause of
Action)

Defendants demur to the Tenth Cause of Action in part on grounds that pleading and
the documents attached thereto reveal that the cause of action is time-barred: “Plaintiff
obtained the Loan in August 2006” but “did not file this lawsuit until [June 2,] 2011,”
which was after passage of the four-year statute of limitations for breach of contract.
(Def.’s Ps & As at 12 (citing Code Civ. Proc. § 337(1)).)  Plaintiff’s Opposition
addresses Defendants’ arguments regarding procedural and substantive
unconscionability in connection with the loan but wholly fails to address Defendants’
argument that Tenth Cause of Action is time-barred.  (Pl.’s Oppo. at 16-17.)

The Court considers Plaintiff’s failure to respond to this argument as a concession as
to its merits.  (See e.g. Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)
Accordingly, the demurrer to the Ninth Cause of Action on statute of limitations
grounds is SUSTAINED WITHOUT LEAVE TO AMEND.

In accordance with the foregoing, Plaintiff shall file and serve a Second Amended
Complaint (“SAC”) by no later than July 21, 2014.  Defendants’ response thereto to be
filed and served within 10 days thereafter, 15 days if the SAC is served by mail.
(Although not required by any statute or rule of court, Plaintiff is requested to attach a
copy of the instant minute order to the FAC to facilitate the filing of that pleading.)

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or other notice is required.