Case Number: BC503199    Hearing Date: July 16, 2014    Dept: 34

Moving Party: Defendants Wells Fargo Bank, N.A., and Bank of America, N.A.

Resp. Party: Plaintiffs Nancy Olson and David Olson

Defendants’ demurrer is OVERRULED.

Defendants’ unopposed Request for Judicial Notice of Exh. A is GRANTED. In general, judicial notice of contracts is improper. (See Freemont Indem. Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114-115 [court ruling on demurrer cannot take judicial notice of contract allegedly ambiguous or unenforceable]; Aquila, Inc. v. Sup. Ct. (2007) 148 Cal.App.4th 556, 571.) However, when a contract relates to a complaint, the court may take judicial notice of the contract in ruling on a demurrer. (See, e.g., Ascherman v. General Reinsurance Corp. (1986) 183 Cal.App.3d 307, 310 [noting such facts, but only implying the rule].) Plaintiffs’ claims relate to this promissory note and as indicated above, the Request for Judicial Notice is not opposed.

Defendants’ unopposed Request for Judicial Notice of Exhs. B, C and F is GRANTED. Courts properly take judicial notice of legal operative documents (e.g., recorded deed of trust, recorded assignment, and notice of trustee sale), where the complainant alleges no facts inferring a contrary conclusion. (Intengan v. Bac Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1054.) However, the Court does not take judicial notice of the truth of the statements made in the declaration attached to the notice of default. Judicial notice of the contents of a declaration of compliance with Civil Code Section 2923.5 should not be taken where the facts asserted in the declaration are reasonably subject to dispute. (See Intengan v. Bac Home Loans Servicing LP (2013) 214 Cal.App.4th 1047, 1057; Compl., ¶¶ 36, 39.)

Defendants’ Request for Judicial Notice of Exhs. D and E is DENIED. Plaintiffs are correct that these agreements are not specifically referred to in the amended complaint.

PRELIMINARY COMMENTS:

Defendants demur to the entire complaint on the grounds that the causes of action fail to state a claim for relief.

The Court notes that defendants are demurring to causes of action for which their previous demurrer was overruled. In particular, the court previously overruled defendants’ demurrer to the following causes of action (the numbers of the causes of action follow the numbers in the First Amended Complaint:

· (1) breach of agreement;
· (4) promissory estoppel;
· (5) slander of title;
· (6) cancellation of instrument;
· (7) breach of agreement;
· (8) violation of Rosenthal Fair Debt Collection Act;
· (9) unfair competition; and
· (11) accounting

This court is “foreclosed from rendering a new determination on the viability of those claims unless some new facts or circumstances [are] were brought to [its] attention” absent a timely motion for reconsideration under CCP § 1008. (Bennett v. Suncloud (1997) 56 Cal.App.4th 91, 97.)

Therefore, the Court OVERRULES the demurrer as to these causes of actions.

BACKGROUND:

Plaintiffs commenced this action on 3/18/13 against defendants for: (1) breach of agreement; (2) intentional misrepresentation; (3) Negligent Misrepresentation; (4) promissory estoppel; (5) violation of Civ. Code, § 2923.5; (6) slander of title; (7) cancellation of instrument; (8) breach of agreement; (9) violation of Rosenthal Fair Debt Collection Act; (10) unfair competition; (11) intentional infliction of emotional distress; (12) negligent infliction of emotional distress; (13) unjust enrichment; and (14) accounting.

On 3/13/14, the Court sustained defendants’ demurrer to the second, third, fifth, eleventh, twelfth and thirteenth causes of action. The Court overruled defendants’ demurrer to the remaining causes of action.

Plaintiffs filed an amended complaint (“FAC”) on 4/25/14 against defendants for: (1) breach of agreement; (2) intentional misrepresentation; (3) negligent misrepresentation; (4) promissory estoppel; (5) slander of title; (6) cancellation of instrument; (7) breach of agreement; (8) violation of Rosenthal Fair Debt Collection Act; (9) unfair competition; (10) IIED; and (11) accounting.

Plaintiffs had a mortgage on their home and, starting in 2008, experienced financial hardships that affected their ability to pay this mortgage. (FAC ¶¶ 9-11.) In July 2011, plaintiffs decided to explore a loan modification. (Id., ¶ 11.) Plaintiffs allege that they entered into a trial loan modification agreement with the moving defendants pursuant to which defendants agreed to suspend foreclosure proceedings, provide plaintiffs with a permanent loan modification, withdraw the notice of default, and treat plaintiffs’ loans as current. (Id., ¶ 19.) Plaintiffs allege defendants breached this agreement by failing to provide a permanent loan modification, failing to withdraw the deed of trust, and failing to treat the loan as current. (Id., ¶ 21.) Plaintiffs allege that defendants’ promises regarding the loan modifications constitute intentional and/or negligent misrepresentations. (See id., ¶¶ 24-25, 30.) Plaintiffs also allege that defendants breached the mortgage agreement by failing to apply plaintiffs’ payments to interest, tracking excessive and unauthorized charges, and failing to treat the loan as current despite the modification. (Id., ¶ 54.)

ANALYSIS:

As indicated above in the “Preliminary Comments” section, the Court will only consider the demurrer as to causes of action to which it previously sustained defendants’ demurrer. These are analyzed below.

Second and Third Causes of Action for Intentional and Negligent Misrepresentations

The elements of a fraud claim are: (1) misrepresentation of a fact (or intent to conceal in a fraudulent concealment case); (2) knowledge of falsity; (3) intent to defraud (to induce reliance); (4) justifiable reliance; and (5) resulting damage. (Buckland v. Threshold Enters., Ltd. (2007) 155 Cal.App.4th 798, 806-807.) “The elements of negligent misrepresentation are (1) a misrepresentation of a past or existing material fact, (2) made without reasonable ground for believing it to be true, (3) made with the intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 196.)

Fraud and misrepresentation must be specifically pleaded. (Scafidi v. Western Loan & Bldg. Co. (1946) 72 Cal.App.2d 550, 553.) Since allegations of fraud involve a serious attack on character, fairness to the defendant demands that he should receive the fullest possible details of the charge in order to prepare his defense. Accordingly, fraud must be specifically pleaded, such that: “(a) General pleading of the legal conclusion of ‘fraud’ is insufficient; the facts constituting the fraud must be alleged. (b) Every element of the cause of action for fraud must be alleged in the proper manner (i.e., factually and specifically), and the policy of liberal construction of the pleadings will not ordinarily be invoked to sustain a pleading defective in any material respect.” (Hall v. Department of Adoptions (1975) 47 Cal.App.3d 898, 904.)

“Consistent with the rule requiring specificity in pleading fraud [citation], a complaint must state ultimate facts showing that the defendant intended or had reason to expect reliance by the plaintiff or the class of persons of which he is a member.” (Geernaert v. Mitchell (1995) 31 Cal.App.4th 601, 608.) A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant, under what authority to bind the corporation. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Plaintiffs do now allege these causes of action with the requisite specificity. (See FAC ¶¶ 27-30.)

defendants’ demurrer to the second and third causes of action is OVERRULED.

Tenth Cause of Action for IIED

The tort of intentional infliction of emotional distress is comprised of the following elements: (1) defendant’s extreme and outrageous conduct; (2) intention of causing emotional distress, or reckless disregard of the probability of causing emotional distress with knowledge of plaintiff’s presence when the conduct occurred; (3) the plaintiff suffered severe or extreme emotional distress; and (4) the conduct was the actual and proximate causation of the emotional distress. (CACI 1600; see also Christensen v. Superior Court (1991) 54 Cal.3d 868, 903.)

Outrageous conduct is not a bright-line determination but depends upon an intuitive appraisal of “values, sensitivity threshold, and standards of civility.” (KOVR-Tv, Inc. v. Superior Court (1994) 31 Cal.App.4th 1023, 1028.) “A defendant’s conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’ And the defendant’s conduct must be ‘intended to inflict injury or engaged in with the realization that injury will result.'” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.)

The fact that conduct might be termed outrageous is not itself sufficient. “The tort calls for intentional, or at least reckless conduct-conduct intended to inflict injury or engaged in with the realization that injury will result.” [Citation.] The conduct must be of a nature that is especially calculated to cause mental distress of a very serious kind. [Citation.]

(Ess v. Eskaton Properties, Inc. (2002) 97 Cal.App.4th 120, 130.) “It is not enough that the conduct be intentional and outrageous. It must be conduct directed at the plaintiff, or occur in the presence of a plaintiff of whom the defendant is aware.” (Christensen, 54 Cal.3d at p. 903.)

Although the issue is a close one, the Court finds that plaintiffs have sufficiently alleged the elements of a claim for IIED so as to withstand demurrer. Put another way, i a jury were to believe all of plaintiffs’ allegations, it would be within its rights to conclude that defendants were liable for IIED.

Defendants’ demurrer to the tenth cause of action is OVERRULED.

Defendants to answer within 10 days.