Case Number: BC713936 Hearing Date: September 10, 2019 Dept: 24

Defendants Ray B. Bowen, Jr. and Richard C. Jones’s demurrer to the Second Amended Complaint is OVERRULED as to the first, third, and fourth causes of action; and SUSTAINED with leave to amend as to the second cause of action. Defendants’ motion to strike is GRANTED without leave as to punitive damages and as to striking Defendant Jones, and DENIED as to the remainder.

This suit arises out of allegations of fraud and wrongful foreclosure by Plaintiff Marvell Lenox Tell, Jr. against Defendants Ray B. Bowen, Jr. (“Bowen”); Construction Loan Company, Inc. (“CLC”); and Richard C. Jones (“Jones”). Plaintiff alleges that he was the occupant and owner of the property located at 1836 Kenneth Way, Pasadena, California (“Property”).

On February 2, 2008, Plaintiff obtained a construction loan from CLC in the amount of $102,626.07 (“Loan”) and signed a Promissory Note (“Note”) that provided for Loan payments of $1,261.45 to commence on April 15, 2008, with a 10-day grace period, until February 20, 2009 when the balance would be due in full. The Loan was secured by a Deed of Trust that named Plaintiff as the trustor, and CLC as both the lender and beneficiary, instead of Rubin (“DT”). On February 21, 2008, Plaintiff and CLC entered into a Construction Loan Agreement that provides that the loaned amount would be placed in a trust account, solely under the control of CLC, from which CLC will draw upon to pay the invoices presented to it by Plaintiff for the construction of the Property (“Loan Agreement”). Also on February 21, 2008, Plaintiff and CLC entered into a Funds Control Agreement describing how the loaned funds would be handled. Among other things, the agreement provides that the money in trust was controlled solely by CLC and that any funds not used would be released back to CLC (“Funds Agreement”).

From February 21, 2008 until March 31, 2008, Plaintiff presented invoices to CLC and CLC paid those invoices. In or about early April 2008, before the first payment was due, CLC stopped paying the invoices submitted by Plaintiff. After repeated demands for CLC to honor the terms of the agreements, Plaintiff was forced to obtain financing from another source in order to complete the renovations to the Property. At the time CLC stopped paying the invoices Plaintiff had received the benefit of only $41,880.21 of the $102,626.07 that had been held in trust for Plaintiff’s project, leaving a balance of $60,745.86 that was under the sole control of CLC.

Unbeknownst to Plaintiff, on May 19, 2009, CLC purportedly assigned all of its beneficial interest in the DT to its attorney Bowen, notwithstanding that CLC had no beneficial interest in the DT, and that all beneficial interest was vested with an alleged Trust. Also, on May 19, 2009, CLC served a Notice of Default claiming Plaintiff was in default in the amount of $102,626.07, notwithstanding that CLC remained in possession of $60,745.86.

Plaintiff was unaware of the legal ramifications of CLC’s actions and so requested an extension of time to pay the indebtedness. On August 18, 2009, Jones, on behalf of CLC, and Plaintiff entered into a Modification Agreement extending the maturity date to February 23, 2009.

On August 28, 2009, CLC, as the purported beneficiary of the DT, caused to be recorded a Rescission of the May 26, 2009 Notice of Default.

On October 6, 2011, CLC began foreclosure proceedings and on January 13, 2012, recorded a Notice of Trustee Sale. Plaintiff immediately filed Chapter 13 bankruptcy. On June 7, 2012, CLC filed a Proof of Claim stating that it was a creditor of the secured Loan and that the amount of the secured claim was $103,552.61. Bowen signed the Proof of Claim as “the attorney and authorized representative” of CLC. Plaintiff filed an opposition asserting that any indebtedness should be about $41,880.21. The bankruptcy was dismissed on September 26, 2012, without prejudice.

On October 4, 2012, Plaintiff filed a second bankruptcy. On October 22, 2012, CLC filed a Proof of Claim stating that it was a creditor of the secured Loan and that the amount of the secured claim was $120,333.42. Bowen signed the Proof of Claim as “the creditor’s authorized agent.” Plaintiff filed an opposition asserting that any indebtedness should be about $41,880.21. On November 16, 2012, while the bankruptcy was pending, CLC forfeited its corporate status. Nevertheless, CLC continued to assert a claim against Plaintiff. The second bankruptcy was dismissed on January 11, 2013 without prejudice.

In the meantime, in an unrelated action (John Williams, et al v. CLC), the petitioners therein sought to confirm an arbitration award against CLC in the amount of $15,137,898.28 plus interest. The award, confirmed on January 18, 2013, ordered CLC to transfer all interest in all assets held by CLC to the petitioners. Attached to the arbitration award is an accounting of the assets held by CLC, which included the Property denoted as “Kenneth” which CLC pledged to petitioners, effectively assigning all beneficial interest that CLC claimed it had in the Note and DT to the petitioners.

On January 22, 2013, Plaintiff filed a third bankruptcy. On June 3, 2013, CLC filed a Proof of Claim stating that it was a creditor of the secured Loan and that the amount of the secured claim was $103,552.61. Bowen signed the Proof of Claim as “the creditor’s authorized agent.” On September 3, 2013, while the bankruptcy was pending, CLC forfeited its corporate status. Nevertheless, CLC continued to assert a claim against Plaintiff. The third bankruptcy was dismissed on September 26, 2013 without prejudice.

On July 25, 2017, Bowen caused to be recorded a Notice of Default of the Loan identifying Bowen as the beneficiary. On November 10, 2017, Bowen caused to be recorded a Notice of Trustee Sale setting the sale date for December 15, 2017, stating the indebtedness of $162,711,27.

On December 6, 2017, Plaintiff filed a fourth bankruptcy. On December 29, 2017, CLC filed a Proof of Claim stating that it was a creditor of the unsecured Loan and that the amount of the unsecured claim was $211,003.05. This was the first-time Bowen asserted that he was the assignee of the DT, notwithstanding that CLC claimed to be the beneficiary of the DT and acted as the creditor of the debt from February 21, 2008 until December 29, 2017. On May 30, 2018, Bowen filed a motion to dismiss the bankruptcy which was granted and the petition was dismissed with a 180-day restriction against refiling.

On June 20, 2018, Bowen caused to be recorded a Notice of Trustee Sale, setting a sale date of July 20, 2018. Plaintiff then commenced this action believing he had exhausted all of his remedies to save his Property.

On July 19, 2018, Plaintiff Marvell Lenox Tell, Jr. (“Plaintiff”) commenced this action against Defendants Ray B. Bowen, Jr. (“Bowen”); Construction Loan Company, Inc. (“CLC”); and Richard C. Jones (“Jones”). The complaint alleged the five causes of action: (1) anticipatory breach of contract; (2) wrongful foreclosure count 1; (3) wrongful foreclosure count 2; (4) fraud; and (5) declaratory relief and injunction. Each cause of action was alleged against all defendants, except the first cause of action which is alleged against CLC and Jones.

On that date granted Plaintiff’s ex parte request for a temporary restraining order restraining Defendants from foreclosing on the deed of trust to the Property and issued an order to show cause re: preliminary injunction. On August 15, 2018, at the hearing on the OSC, the Court denied Plaintiff’s request for a preliminary injunction and dissolved the temporary restraining order. On August 30, 2018, Plaintiff recorded a Notice of Pendency of Action, document No. 20180878193 (“lis pendens”), with the Los Angeles County Recorder’s Office, on the real property at issue in this action. The lis pendens was filed with the Court the following day. The proof of service indicates that it was served on Defendants by first-class mail on August 23, 2018.

On December 12, 2018, the Court overruled in part and sustained in part the demurrers by Jones and Bowen (“Defendants”). Jones and Bowen’s demurrers were sustained with leave to amend as to the fourth cause of action, Jones’s demurrer was sustained without leave as to the first cause of action, and the demurrers were overruled as to the remainder.

On May 9, 2019, the Court ruled on Defendants demurrer to the First Amended Complaint (“FAC”), and sustained with leave to amend the first cause of action for wrongful foreclosure, fourth cause of action to set aside trustee sale, and fifth causes of action for cancellation of deed, sustained without leave to amend as to the second cause of action for conspiracy to defraud, and overruled the demurrer to the third cause of action to quiet title.

On May 28, 2019, Plaintiff filed the operative Second Amended Complaint (“SAC”), which alleges the following four causes of action:

wrongful foreclosure;

quiet title;

set aside trustee sale; and

cancellation of deed.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal citations omitted].)

A special demurrer for uncertainty, CCP section 430.10(f), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

CCP section 430.10(d) allows a special demurrer where there is a defect or misjoinder of parties. This refers to either an absent necessary or indispensable third party, or that plaintiffs lack sufficient unity of interest (CCP § 378) or that there is no common question of law or fact as to the defendants (CCP § 379). A demurrer on ground of misjoinder does not lie to challenge allegations that plaintiff is uncertain which defendant caused his or her injuries. (Landau v. Salam (1971) 4 Cal.3d 901, 908.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

Meet and Confer

Before filing a demurrer or motion to strike, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading. (CCP §§ 430.41, 435.5.) Counsel’s declaration satisfies the meet and confer requirement. (Bowen Decl. ¶ 10.)

Request for Judicial Notice

Defendants request that the Court take judicial notice of various court documents. These requests are GRANTED. (Evid. Code § 452(d).)

Demurrer: First Cause of Action – Wrongful Foreclosure

“A wrongful foreclosure is a common law tort claim. It is an equitable action to set aside a foreclosure sale, or an action for damages resulting from the sale, on the basis that the foreclosure was improper. [Citation.]” (Sciarratta v. U.S. Bank Nat’l Assn. (2016) 247 Cal.App.4th 552, 561.) “The basic elements of a tort cause of action for wrongful foreclosure track the elements of an equitable cause of action to set aside a foreclosure sale.” (Miles v. Deutsche Bank Nat’l Trust Co. (2015) 236 Cal.App.4th 394, 408.) The plaintiff must allege that: “(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. [Citations.]” (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 104.) “[M]ere technical violations of the foreclosure process will not give rise to a tort claim; the foreclosure must have been entirely unauthorized on the facts of the case.” (Miles, supra, 236 Cal.App.4th at p. 409.)

“[A] mortgage assignment is void, not merely voidable, where the assignor “had nothing to assign” or “no interest to assign”. (See Sciarratta v. US Bank National Assn. (2016) 247 Cal. App. 4th 552.) Only the true owner or beneficial holder of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law. (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919.)

Defendants contend that Plaintiff has cited no new facts or evidence to support the cause of action for wrongful foreclosure which was sustained by this Court in its prior ruling on Defendants’ demurrer to the FAC. This Court previously held that Plaintiff’s theory that Bowen lacked authority to foreclose because of the assignment to the Trust was a failing argument because “[t]he FAC explicitly states that CLC did not actually assign the DT to the Trust until 2010, after the assignment to Bowen. Therefore, the new allegations establish that CLC properly assigned Bowen the interest in the DT and gave no interest to the Trust, as it had none in 2010.” (5/9/2019 ruling on Demurrer to FAC).
The SAC now alleges that the assignment did not convey any interest to Bowen because at the time of assignment, no assignee was named in the document. (SAC ¶ 26).). The Assignment reads that it grants, assigns, and transfers the Deed of Trust to “See Attached Exhibit ‘A’.” (Exh. A). The SAC alleges that Jones executed the Assignment in May 2009, but intentionally withheld naming an assignee at the time. (Id. ¶ 27). Plaintiff points out that the notary’s jurat declares that she notarized only one (1) page. Plaintiff alleges that Jones and Bowen conspired to wrongfully foreclose on the property by “creating an Exhibit naming Defendant Bowen as the assignee and attaching the exhibit to the original Assignment.” (Id. ¶ 71). Plaintiff contends that since no interest was assigned to Bowen in May 2009, Bowen’s foreclosure on the property was void. (Id. ¶ 73).

Such argument also addresses Defendant’s contention that Plaintiff was required to comply with the rule of tender before bringing the present claim. Defendants contend that this Court previously held that “Plaintiff failed to comply with the rule of tender and the allegations of Plaintiff require tender.” (Demurrer 7:20-21). Although in principle correct, such argument is slightly disingenuous. Specifically, this Court held that

[i]ndeed, Plaintiff’s theory as to these causes of action is that the assignment to Bowen was void ab initio, and he therefore lacked authority to foreclosure. However, as discussed above, the plead allegations require the opposite conclusion. Thus, these causes are also not well pled and would additionally require tender.

5/9/2019 Ruling, p. 8.

Plaintiff’s amended the SAC to allege that there was no 2009 Assignment to Bowen. Such amendment allows Plaintiff to allege that the foreclosure itself was void because Bowen was never assigned the Deed of Trust. “Tender is not required where the foreclosure sale is void, rather than voidable, such as when a plaintiff proves that the entity lacked the authority to foreclose on the property.” (Glaski v. Bank of America, National Association (2013) 218 Cal.App.4th 1079, 1100). Pursuant to Plaintiff’s allegations, Plaintiff would not be required to comply with the rule of tender because Plaintiff alleges that the foreclosure was void.

Defendants also contend that the 1st cause of action is improper because Plaintiff has named Jones as a defendant without seeking leave of court. The FAC’s only cause of action against Jones was the 2nd cause of action for conspiracy to defraud, which this Court sustained without leave to amend. Defendants contend that Jones should have been removed from the SAC and dismissed from this action altogether. However, in the SAC, Plaintiff named Jones as a defendant under the 1st cause of action.

Plaintiff opposes this argument in the grounds that Plaintiff was not required to seek leave because Jones was already a defendant in this action. Additionally, Defendants provide no authority for the proposition that wrongfully including or failing to include Jones in a cause of action invalidates the cause of action altogether.

When addressing the issue of whether “the granting of leave to amend a complaint upon the sustaining of a demurrer to the complaint entitles the plaintiff to add new party defendants,” the Clausen court held that a specific “granting of leave to amend must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained.” (People By and Through Dept. of Public Works v. Clausen (1967) 248 Cal.pp.2d 770, 785). The Clausen court held that “such leave to amend did not entitle [Defendant] to add new parties as cross-defendants.” (Id.).

Here, Plaintiff was granted leave to amend the pleadings, not to add additional defendants to a cause of action. However, Defendants indeed provide no authority to support the argument that the wrongful inclusion of Jones within the 1st cause of action warrants sustaining the demurrer rather than simply striking Jones from the 1st cause of action.

Thus, Plaintiff has amended his complaint within the scope of the defects identified by the 5/9/2019 Ruling. The demurrer to the 1st cause of action is OVERRULED.

Demurrer: Second Cause of Action – Quiet Title

Defendants previously demurred to the Quiet Title cause of action solely on the ground that Plaintiff failed to file a lis pendens. This Court overruled Defendants’ demurrer to the FAC’s 3rd cause of action on the ground that “Defendants cite no authority that failure to file a lis pendens is grounds for demurrer.” (5/9/2019 Ruling, p. 8).

Defendants demur again on the same grounds, arguing that “Defendants recognize that this Court in its 5/9/19 [sic] needed case law to support defendants’ argument that a lis pendens must be filed with a quiet title cause of action.” Defendants proceed to cite various cases holding that “761.010 requires recordation of lis pendens in an action to quiet title,” and “[w]hen a plaintiff files an action to quiet title, the plaintiff is required to “immediately record a lis pendens (Code Civ. Proc., § 761.010, subd. (b).” (Wardley Development Inc. v. Superior Court (1989) 213 Cal.App.3d 391, 398; Deutsch Bank National Trust Co. v. McGurk (2012) 206 Cal.App.4th 201, 210).

This Court does not dispute that a lis pendens is to be filed after a cause of action is brought in court. However, for the second time, Defendants cite no authority that failure to file a lis pendens is grounds for demurrer.

To state a claim for quiet title, the Plaintiff must allege: 1) a description of the property, 2) Plaintiff’s title and the basis of that title, 3) the adverse claims, 4) the date from which the determination is sought and 5) a prayer for the determination of the title against the adverse claims. (CCP § 761.020; Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 292.) To prevail in an action to quiet title, the plaintiff must prove title superior to that of defendant. (Gerhard v. Stephens (1968) 68 Cal.2d 864, 918.)

“[A]s a general matter an action to quiet title cannot be maintained by the owner of equitable title as against the holder of legal title.” (Warren v. Merrill (2006) 143 Cal. App. 4th 96, 113. However, Defendants and Plaintiff cite to Leeper v. Beltgrami for the exception to the above-mentioned rule when the plaintiff alleges that the defendant’s title was secured by fraud. ((1959) 53 Cal.2d195, 214).

“[T]he general rule that fraud must be specifically pleaded [citation] applies particularly to quiet title actions.” (Strong v. Strong (1943) 22 Cal. 2d 540, 545–46).

Defendants argue that Plaintiff cannot argue fraud because this Court sustained without leave to amend the demurrer to the fraud allegations of the FAC. This Court indeed sustained without leave to amend the demurrer to the FAC’s 2nd cause of action for “Conspiracy to Defraud” of the FAC. However, such ruling, based on the FAC and the parties’ moving and opposition papers, addressed the allegedly fraudulent representation by Bowen to the Bankruptcy Court that Bowen was the lawful beneficiary of the Deed of Trust. (FAC ¶ 52, 56, 61; Opp to Dem. To FAC 12:24-13:10). This Court sustained without leave to amend the demurrer to the 2nd cause of action of the FAC because “Plaintiff [brought] this action based on privileged conduct, which was previously raised by Defendants in demurrer.” (5/9/2019 Ruling). The demurrer to the FAC was not sustained without leave to amend as to the 1st cause of action based on the allegations of fraud directed to the creation of the Assignment itself.

In a wrongful foreclosure action, a plaintiff must allege that: “(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 . . .” (Lona v. Citibank, supra at 104.) Since the 1st cause of action remains in the SAC, Plaintiff may naturally plead a wrongful foreclosure based on an “illegal, fraudulent, or willfully oppressive sale of real property.” (Id.).

However, Plaintiff has not pled with specificity that Defendant’s title was secured by fraud. Plaintiff alleges that the May 2009 Assignment was ineffective because at the time of assigning, no assignee was named in the document, and because Jones and Bowen conspired to wrongfully foreclose on the property by “creating an Exhibit naming Defendant Bowen as the assignee and attaching the exhibit to the original Assignment.” (SAC ¶¶ 26, 71). Pleading fraud would require Plaintiff to allege (1) misrepresentation of a material fact; (2) knowledge of falsity or lack of a reasonable ground for belief in the truth of the representation; (3) intent to induce reliance; (4) actual and justifiable reliance by the plaintiff; and (5). Such specificity is absent from the SAC. The SAC does not allege “fraud” for purposes of benefiting from the Leeper v. Beltrami exception to the principle that an action for quiet title cannot be maintained by the owner of equitable title against the holder of legal title.

Plaintiff’s argument that “[a] wrongful foreclosure cause of action contains an element of fraud,” is unavailing when “the general rule that fraud must be specifically pleaded [citation] applies particularly to quiet title actions.” (Strong v. Strong, supra, at 545–46).

The demurrer to the 2nd cause of action is SUSTAINED with leave to amend only to allow Plaintiff to plead with specificity that legal title was secured by fraud. Consistent with the 5/9/2019 ruling on the demurrer to the FAC, no allegations shall be pled as to use of the Deed of Trust in the prior Bankruptcy proceedings.

Demurrer: Third Cause of Action – Set Aside Trustee Sale

Defendants demur to the 3rd cause of action on the grounds that Plaintiff failed to comply with the rule of tender. As previously discussed, Plaintiff’s pleadings allege an ineffective assignment and that the foreclosure sale was void. Thus, the rule of tender would not apply.

The demurrer to the 3rd cause of action is OVERRULED.

Demurrer: Fourth Cause of Action – Cancellation of Trustee’s Deed

The Court previously sustained the demurrer to the 3rd and 4th causes of action on the grounds that Plaintiff failed to plead that the assignment to Bowen was void. Defendants demur again to the 4th cause of action on the ground that Plaintiff has not pled his cause of action with specificity “either to instrument or invalidity.” (Demurrer 14:6). Defendants argue that “Plaintiff has not attached any document to the SAC he seeks to cancel so that the Defendants and the Court may know what specific documents the Plaintiff is referring to and seeks to cancel.” (Demurrer 14:5-8).

It appears from the name of Plaintiff’s 4th cause of action for cancellation of Trustee’s Deed that Plaintiff is seeking to cancel the subject Trustee’s Deed. Defendants’ argument turns a blind eye to the entirety of the SAC in which Plaintiff pleads that the assignment of the Deed of Trust was ineffective, and that resulting foreclosure were improper.

The demurrer to the 4th cause of action is OVERRULED.

Motion to Strike – Entire Causes of Action

Defendants’ motion to strike is duplicative in that it seeks to strike entire causes of action on the grounds that they are improperly pled. As such arguments are identical to those raised in the demurrer, and are properly disposed of thereby, Defendants’ arguments as to the 1st, 2nd, 3rd, and 4th causes of action in their entirety are redundant.

Motion to Strike – Defendant Jones

Defendants move to strike Defendant Jones from the SAC on the ground that he was improperly added as a defendant to the 1st cause of action following the 5/9/2019 Ruling. As discussed above, Plaintiff improperly added Jones to the 1st cause of action as Plaintiff exceeded the scope of permissible amendment to the FAC following the Court’s 5/9/2019 Ruling, and Plaintiff sought no leave to add Jones as a defendant.

Defendants’ motion to strike Jones from the SAC is GRANTED.

Motion to Strike – Paragraphs 70-71

Defendants move to strike ¶¶ 70-71 because they are lifted directly from the FAC’s 2nd cause of action to which the demurrer was sustained without leave to amend. Paragraphs 70 and 71 refer to Jones and Bowen’s presentation of the allegedly ineffective Assignment to the bankruptcy court, facts on which the relevant 2nd cause of action relied, and the demurrer to which was sustained without leave. However. Defendants do not explain why this would render the facts irrelevant to the instant dispute. These are relevant background facts to the dispute. Defendants’ motion as to these paragraphs is DENIED.

Motion to Strike- Punitive Damages

Civ. Code section 3294 states in an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.

Defendants’ move to strike punitive damages on the grounds that this Court previously granted Defendants’ motion to strike punitive damages. Such grant was premised on the failure of Plaintiff’s 2nd cause of action for fraud arising from the bankruptcy proceedings.

Plaintiff opposes the motion by arguing that Plaintiff’s request for punitive damages is now premised on the first cause of action for wrongful foreclosure based on a fraudulent assignment. Plaintiff has sufficiently pled an ineffective assignment. However, despite pleading that Defendants did not have the authority to foreclose on the property, Plaintiff has not pled with specificity that such sale of property was founded in fraud.

Defendants’ motion to strike punitive damages is GRANTED.

Motion to Strike – Exhibits not Referenced in the SAC

Defendants offer no authority for their motion to strike references to Exhibits which are referenced in the SAC but are not attached thereto. The motion to strike on said basis is DENIED.

Moving party is ordered to give notice.