Case Name:   Nancy E. Hill v. Wells Fargo Bank, N.A., et al.            

Case No.:       1-14-CV-262934

Demurrer by Defendants Wells Fargo Bank, N.A. and Wells Fargo Financial to the Complaint of Plaintiff Nancy E. Hill         

Request for Judicial Notice

Defendants’ request for judicial notice is GRANTED.  (See Evid. Code § 452, subds. (d), (h); see Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4^th 256, 264 [courts may take judicial notice of the existence and recordation of real property records].)

Demurrer to the First Amended Complaint

Defendants’ demurrer to the first cause of action for unfair business practices is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim.  Plaintiff’s UCL claim is based on misrepresentations that took place when the loan was originated in 2006.  (See First Amended Complaint [“FAC”] at ¶ 13 and 18.)  The statute of limitations for a claim under the UCL is four years pursuant to Business and Professions Code section 17208.  Since Plaintiff did not file this action until 2014, the claim is time-barred.  In opposition, Plaintiff seeks to apply the delayed discovery rule and doctrine of equitable tolling to make her claim timely.  (See Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4^th 797, 808 [in order to rely on the delayed discovery rule, a plaintiff must plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence]; see also Stalberg v. Western Title Ins. Co. (1994) 27 Cal.App.4^th 925, 932 [elements for equitable tolling].)  However, Plaintiff has not alleged facts in her pleading to support application of delayed discovery or equitable tolling.

Defendants’ demurrer to the second cause of action for violation of the covenant of good faith and fair dealing is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim.  The covenant of good faith and fair dealing is implied in every contract and, in most situations, prevents one party from unfairly frustrating the other party’s right to receive the benefits of the contract.  (See Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4^th 317, 349.)  If there exists a contractual relationship between the parties, the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract.  (Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4^th 1026, 1032.)

Here, the contract which is the subject of this claim includes the Deed of Trust and Promissory Note.  (See FAC at ¶ 28.)  However, Plaintiff fails to identify any specific contractual provision that was frustrated in support of her claim for breach of the implied covenant of good faith and fair dealing.  Instead, her claim seems to be based on a promise by Defendants for loan modification as an alternative to foreclosure.  (See FAC at ¶¶ 31-32.)  That might form the basis for some cause of action, but not breach of the implied covenant of good faith and fair dealing.

Defendants’ demurrer to the third cause of action for negligence is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim.  Plaintiff’s negligence claim arises from conduct that took place when the loan was originated in 2006.  (See FAC at ¶¶ 13, 37, and 41.)  A claim for professional negligence in this case has a two-year statute of limitations.  (See Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4^th 1145, 1154.)  Since the initial complaint was not filed until 2014, the claim is time-barred.  Furthermore, 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.  (Nymark Heart Fed. Sav. & Loan Assoc. (1991) 231 Cal.App.3d 1089, 1096.)  To the extent that this claim is based on a denial of Plaintiff’s loan modification, the Court of Appeal has determined that “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.”  (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4^th 49, 67.)

Finally, even though the Notice of Motion refers to the fourth cause of action, no such claim appears in the FAC.  Therefore, Defendants’ demurrer to the fourth cause of action is MOOT.