Hearing Date: Tuesday, February 21, 2017
Case Name: Fox v. JP Morgan Chase Bank, N.A., et al.
Case No.: BC602491
Motion: Demurrer to Second Amended Complaint
Moving Party: Defendants JP Morgan Chase Bank, N.A., California Reconveyance Company, and US Bank, N.A.
Responding Party: Plaintiff Harry M. Fox
Notice: OK
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Ruling: Defendants JP Morgan Chase Bank, N.A., California Reconveyance Company, and US Bank, N.A.?s demurrer to the First, Second, Third, Fifth, Ninth, Tenth, and Eleventh Causes of Action have already been overruled by the Court in a prior demurrer and the Court will not readdress such pleadings. See CCP ? 430.41(b) (?A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer.?).
Defendants JP Morgan Chase Bank, N.A., California Reconveyance Company, and US Bank, N.A.?s demurrer to the Fourth, Sixth, Seventh, and Eighth Causes of Action are SUSTAINED WITHOUT LEAVE TO AMEND.
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BACKGROUND
On November 25, 2015 the Complaint was filed. On May 09, 2016 Plaintiff Harry M. Fox (?Fox? or ?Plaintiff?)), individually and as trustee of the Fox Living Trust (?the Fox Trust?), filed the First Amended Complaint (?FAC?) against Defendants JP Morgan Chase Bank, N.A. (?Chase Bank? or ?Chase?), US Bank, N.A. (?US Bank?), Bank of America, N.A. (?Bank of America?), WaMu Mortgage Pass Through Certificates Series 2007-HY1 Trust (?the WaMu Trust?), California Reconveyance Company (?CRC?), and Doe Defendants for (1) declaratory relief, (2) cancellation of instruments, (3) slander of title, (4) tortious interference with contractual relations, (5) breach of contract, (6) fraud and deceit, (7) concealment, (8) violation of Business & Professions Code ? 17200 et seq., (9) accounting, (10) negligence, and (11) breach of good faith and fair dealing. Plaintiff alleges he and Joyce Fox are the true owners of the subject property pursuant to a quit claim deed recorded on December 22, 2004 and that on June 24, 2014 they transferred their interest to the Fox Trust. Plaintiff alleges the subject loan was funded by unfair and deceptive practices by Washington Mutual Bank.
On August 16, 2016 the Court overruled the demurrer of Chase Bank, U.S. Bank , CRC to the First, Second, Third, Fifth, Ninth, Tenth, and Eleventh causes of action and sustained the demurrer with leave to amend as to the Fourth, Sixth, Seventh, and Eighth Causes of Action. On September 06, 2016 Plaintiff filed the Second Amended Complaint (?SAC?).
Defendants Chase Bank, CRC, and US Bank as trustee, successor in interest to Bank of America as trustee as successor by merger to LaSalle Bank, N.A., as trustee for the WaMu Trust (collectively ?Defendants?) demur to the SAC and each cause of action within. As the Court already overruled the demurrer to the First, Second, Third, Fifth, Ninth, Tenth, and Eleventh Causes of Action it will not readdress such arguments and will only address the demurrer as to the Fourth, Sixth, Seventh, and Eighth Causes of Action. CCP ? 430.41(b) (?A party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer.?).
Plaintiff?s opposition argues that Defendants are improperly seeking to turn a demurrer into an evidentiary hearing and seek to use judicial notice to introduce evidence that Plaintiff does not concede. Plaintiff argues Defendants mischaracterize the pleadings in a self-serving manner and the action is that Defendants have and continue to refuse to correct accounting errors which harm and continue to harm Plaintiff.
ANALYSIS
I. Demurrer
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; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) ?7:8. ?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 (Code Civ. Proc., ?? 430.30, 430.70). The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.? Hahn 147 Cal.App.4th at 747.
A. Fourth Cause of Action for Tortious Interference with Contractual Relations
?The elements of an action for tortious interference are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.? ?It has been repeatedly held that a plaintiff, seeking to hold one liable for unjustifiably inducing another to breach a contract, must allege and prove that the contract would otherwise have been performed.? Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1196.
Here, Plaintiff again fails to plead the existence of any contractual relationship between Plaintiff and a third party. Plaintiff relies on ?undisclosed concealed 3rd parties?, but does not allege any such contracts were with Plaintiffs. And if they were Plaintiffs would not be able to claim they were undisclosed or concealed. Without any allegations of some contract between Plaintiff and a third party, the cause of action must fail.
Accordingly, Defendants? demurrer to the Fourth Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND.
B. Sixth Cause of Action for Fraud and Deceit
?The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ?scienter?); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.? Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060. ?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. The statute of limitations for intentional misrepresentation is three years. CCP ? 338(d) (the cause of action accrues upon the discovery by the aggrieved party of the facts constituting the fraud).
Here, Plaintiff fails to sufficiently allege fraud. Plaintiff does not allege any representations made by Defendants to Plaintiff with the intent to induce reliance. Plaintiff?s claim is that Defendants caused to be recorded in the official records of Los Angeles County instruments that contained false representations. SAC ?? 152, 160. But no false representation was made to Plaintiff.
Accordingly, Defendants’ demurrer to the Sixth Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND.
C. Seventh Cause of Action for Concealment
?The elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.? Lovejoy v. AT & T Corp. (2004) 119 Cal.App.4th 151, 157-58.
Here, similar to the fraud claim, Plaintiff fails to allege any duty to disclose the alleged false representations or securitization. Further, Plaintiff fails to sufficiently allege any damages from the alleged concealment.
Accordingly, the demurrer to the Seventh Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND.
D. Eighth Cause of Action for Violation of Business & Professions Code ? 17200 et seq.
Unfair competition is any unlawful, unfair, or fraudulent business practice or act and unfair, deceptive, untrue, or misleading advertising. Bus. & Prof. Code ? 17200. ?An unlawful business practice or act within the meaning of the UCL is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.? Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 351 (emphasis in original) (internal quotations omitted). A plaintiff needs to identify statutory, regulatory, or decisional law that the defendant has violated. Id. at 352. Unfair competition ?borrows? violations of other laws and authorizes a separate action pursuant to unfair competition. See Farmers Ins. Exch. V. Superior Court, (1992) 2 Cal.4th 377, 383. Unfair conduct in unfair competition actions must be violative of public policy and ?tethered to specific constitutional, statutory, or regulatory provisions.? Scripps Clinic v. Superior Court, (2003) 108 Cal.App.4th 917, 940. As a statutory cause of action, allegations of unfair business practices must state with reasonable particularity the facts supporting the statutory elements of the violation. Khoury v. Maly?s of California, Inc. (1993) 14 Cal.App.4th 612, 619. The statutory violations must be specifically delineated and said violations must relate to a business activity. Id. ?The only nonpunitive monetary relief available under the Unfair Business Practices Act is the disgorgement of money that has been wrongfully obtained or, in the language of the statute, an order ?restor[ing] … money … which may have been acquired by means of … unfair competition.?? Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1265-66 (damages are available for common law unfair competition, but are not available under Business and Professions Code ? 17203). Such a claim has a four-year statute of limitations. See Business and Professions Code ? 17208; Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1196-97 (discovery rule may toll statute of limitations for UCL claim).
As stated above, Plaintiff has failed to plead any fraudulent conduct to support a UCL claim. And Plaintiff has not alleged Defendants acquired any money by means of the allegedly unfair competition.
Accordingly, the demurrer to the Eighth Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND.
II. Judicial Notice
A. Defendants? Requests
Defendants? requests for judicial notice are GRANTED as to Exhibits 1 and 3 and DENIED as to Exhibit 2.
B. Plaintiff?s Request
Plaintiff?s request for judicial notice is GRANTED.