Demurrer to Complaint (Judge Deborah C. Servino)


Defendants Shahin Motamed Hashemi and Zeynep Motamed Hashemi’s demurrer to Plaintiff Carolina Ordonez’s Complaint, is overruled.

Requests for Judicial Notice

Defendants request judicial notice, as an “official act” of an executive department, of the results of a “Public License Information” search for “Carolina Ordonez” or “Orquidea Carolina Ordonez” on the California Department of Real Estate’s online database and the Department of Real Estate’s published Mortgage Loan Broker Compliance Evaluation Manual. Assuming these exhibits are subject to judicial notice, the Court declines to take judicial notice because they are not relevant to the disposition of the Demurrer. (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194 [noting that the court may take judicial notice of a recorded deed, but declining to do so where deed was not relevant].)

Merits

Plaintiff brings claims for breach of contract and unjust enrichment.  Plaintiff alleges she “worked diligently” as a “Mortgage Loan Officer” to secure a loan to facilitate defendant Shahin’s purchase of the real property commonly known as 28002 Golden Ridge Lane, San Juan Capistrano, California 92675. Plaintiff and Defendant Shahin Hashemi entered into a written agreement whereby Plaintiff would be paid $80,000 for her services. (Compl., at ¶¶ 4, 10, 15; Exh. A.) However, after “Defendants obtained title to the Property using the loan that was arranged by Plaintiff,” the check previously provided to her by Defendant Shahin Hashemi was “rejected due to insufficient funds. (Compl., at ¶¶ 13-14.)

Defendants contend that both claims fail as a matter of law, because Plaintiff was not properly licensed under Business and Professions Code section 10166.02, and that the functions she performed required a real estate broker license. Neither contention has merit.

The first step in statutory interpretation “is to scrutinize the actual words of the statute, giving them a plain and commonsense meaning.” (California Teachers Assn. v. Governing Bd. of Rialto Unified School Dist. (1997) 14 Cal.4th 627, 633.) Here, section 10166.02 plainly states that the conditions under subdivision (b) apply only to individuals engaged in business “as a mortgage loan originator under this article.” Article 2 pertains to licensing for real estate brokers and real estate salespersons. Thus, the statute is construed to mean that a “real estate broker,” or a “salesperson who acts in a similar capacity under the supervision of that broker,” cannot “engage in business as a mortgage loan originator, ” without first obtaining and maintaining both a real estate license and an endorsement identifying that individual as a licensed mortgage loan originator.

Defendants rely on Business and Professions Code sections 10130 and 10131 for the proposition that a “California real estate license is required to perform mortgage loan activities in California.” (Dem., at p. 5.)  Section 10130 states: “It is unlawful for any person to engage in the business of, act in the capacity of, advertise as, or assume to act as a real estate broker or a real estate salesperson within this state without first obtaining a real estate license from the department, or to engage in the business of, act in the capacity of, advertise as, or assume to act as a mortgage loan originator within this state without having obtained a license endorsement.” (Bus. & Prof. Code, § 10130.) Section 10131, entitled, “Real estate broker,” describes the functions of a broker to include one who “[s]olicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity.” (Bus. & Prof. Code, § 10131, subd. (d).)

However, section 10131, subdivision (d) is expressly made “inapplicable” to certain persons under section 10133.1, including, “[a]ny person licensed as a finance lender when acting under the authority of that license,” (Bus. & Prof. Code, § 10133.1, subd. (a)(6)), and “[a]ny person licensed as a residential mortgage lender or servicer when acting under the authority of that license,” (Bus. & Prof. Code, § 10133.1, subd. (a)(1)).

The Finance Code further confirms that “[e]very licensee engaging in the business of making, servicing, or making and servicing residential mortgage loans” shall be required to obtain and maintain a “mortgage loan originator license from the commissioner under this division [20] or Division 9 (commencing with Section 22000), or [] first obtained a license endorsement from the commissioner of Real Estate pursuant to Article 2.1 (commencing with Section 10166.01) of Chapter 3 of Part 1 of Division 4 of the Business and Professions Code.” (Fin. Code, § 50002.5, subd. (a), emphasis added.)

Defendants have not established as a matter of law, that Plaintiff cannot recover for breach of contract or unjust enrichment, unless Plaintiff alleges she is qualified to act as a mortgage loan originator under Business and Professions Code section 10166.02. As explained, above, section 10166.02 sets forth the requirements for a real estate broker or salesperson who also seeks to “engage in business as a mortgage loan originator.” But, the functions of a real estate broker described under section 10133.1, subdivision (a)(6), (i.e., soliciting borrowers or lenders for or negotiating loans or collecting payments or performing services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity), can be performed by persons licensed or regulated under other laws, including by a person licensed under the Finance Code.  Accordingly, the demurrer is overruled.

Within 15 days, Defendants shall file an answer to the Complaint.

Plaintiff shall give notice of the ruling.