Case Name:   Robert E. Word v. California Bureau of Real Estate, et al. 

 

Case No.:       1-14-CV-259573

 

Demurrer by Defendant State of California, acting by and through the California Bureau of Real Estate, to First Amended Complaint of Plaintiff Robert E. Word      

 

From 2004 to 2011, Plaintiff invested approximately $1,625,000 in real estate secured loans through Amarjit S. Ahluwalia (“Amar”) of Saratoga Bancorp, Inc. (“SBI”), a mortgage loan broker.  (First Amended Complaint (“FAC”), ¶¶5, 7, 10, 11.)  In or about February 2012, Plaintiff discovered that SBI closed and his loans were unsecured or otherwise kept by SBI without repayment to Plaintiff.  (FAC, ¶12 – 15.)

 

The California Bureau of Real Estate (formerly known as the California Department of Real Estate) (“BRE”), is the state entity in charge of licensing, regulating, monitoring, investigating, and disciplining real estate brokers, real estate salespersons, mortgage loan brokers, and mortgage loan originators.  (FAC, ¶16.)  According to Plaintiff, the BRE breached its statutory obligations by, among other things, failing to investigate Amar and SBI.  (FAC, ¶¶17 – 24.)

 

On January 24, 2014, Plaintiff filed a complaint against Wayne Bell, in his official capacity as Commissioner of the BRE.  The complaint asserted claims for (1) negligence; and (2) negligent supervision.  On April 17, 2014, the court sustained Bell’s demurrer to the complaint.

 

On May 7, 2014, Plaintiff filed an amendment naming the BRE as a Doe defendant.  That same date, Plaintiff filed a FAC against the BRE asserting claims for (1) negligence and (2) negligent oversight.  On May 14, 2014, Plaintiff dismissed Bell without prejudice.

 

On June 23, 2014, defendant State of California, acting by and through the California Bureau of Real Estate (“State”), filed the motion now before the court: a demurrer to the FAC.

 

On July 18, 2014, Plaintiff filed an opposition to the State’s demurrer.

 

Discussion

 

The State’s request for judicial notice in support of demurrer to first amended complaint is GRANTED.  (See Evid. Code, §451, subd. (a); see also County of Lassen v. The State of California (1992) 4 Cal.App.4th 1151, 1154 – 1155; California Dental Assn. v. California Dental Hygienists’ Assn. (1990) 222 Cal.App.3d 49, 54, fn. 3.).)  The court may “also judicially notice matters underlying such law.”  (Estate of Joseph (1998) 17 Cal.4th 203, 210, fn. 1.)  Where the issues being adjudicated deal with the interpretation of a statute and legislative intent, “legislative history and statutory amendments are both relevant and appropriate for judicial notice.”  (Hughes Electronics Corp. v. Citibank Delaware (2004) 120 Cal.App.4th 251, 266, fn. 13.)

 

“Ordinarily, negligence may be pleaded in general terms and the plaintiff need not specify the precise act or omission alleged to constitute the breach of duty.  [Citation.]  However, because under the Tort Claims Act all governmental tort liability is based on statute, the general rule that statutory causes of action must be pleaded with particularity is applicable.  Thus, ‘to state a cause of action against a public entity, every fact material to the existence of its statutory liability must be pleaded with particularity.’  [Citations.]”  (Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795.)

 

“Except as otherwise provided by statute[,] [a] public entity is not liable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person.”  (Gov. Code, §815, subd. (a).)  “One of the provisions ‘otherwise’ creating an exception to the general rule of immunity is Government Code section 815.6, which provides: ‘Where a public entity is under a mandatory duty imposed by an enactment that is designed to protect against the risk of a particular kind of injury, the public entity is liable for an injury of that kind proximately caused by its failure to discharge the duty unless the public entity establishes that it exercised reasonable diligence to discharge the duty.’”  (State of California v. Superior Court (Perry) (1984) 150 Cal.App.3d 848, 854 (Perry).)

 

“Government Code section 815.6 contains a three-pronged test for determining whether liability may be imposed on a public entity: (1) an enactment must impose a mandatory, not discretionary, duty; (2) the enactment must intend to protect against the kind of risk of injury suffered by the party asserting section 815.6 as a basis for liability; and (3) breach of the mandatory duty must be a proximate cause of the injury suffered.”  (Perry, supra, 150 Cal.App.3d at p. 854; citations omitted.)

 

On demurrer, the court must take as true Plaintiff’s allegation that the BRE failed to investigate a verified complaint against Amar and SBI.  (FAC, ¶¶23-24.)  The duty to investigate a verified complaint is mandatory.  (Business & Professions Code section 10176.)  A defendant cannot demur to part of a cause of action.  (Kong v. City of Hawaiian Gardens Redevelopment Agency (2003) 108 Cal.App.4^th 1028, 1046.)

 

Accordingly the demurrer is OVERRULED.