Opinion
D058062 Super. Ct. No. 37-2008-00073679-CU-OR-SC
09-22-2011
RAYMUNDO MELERO et al., Plaintiffs and Appellants, v. WELLS FARGO BANK, N.A., Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
APPEAL from a judgment of the Superior Court of San Diego County, William S. Cannon, Judge. Affirmed.
I.
INTRODUCTION
Raymundo Melero and his wife, Rosa Melero (collectively the Meleros), filed a complaint in which they alleged that Wells Fargo Bank, N.A. (Wells Fargo) fraudulently induced them to enter into mortgage loans that they could not afford. The Meleros brought claims for fraudulent misrepresentation, negligence, and unfair competition (Bus. & Prof. Code, § 17200), among other causes of action.
All statutory references are to the Business and Professions Code, unless otherwise specified.
Wells Fargo filed a motion for judgment on the pleadings. The trial court granted the motion and entered a judgment of dismissal. On appeal, the Meleros contend that they adequately stated a fraud claim based on alleged misrepresentations by Wells Fargo that the loans had "consistent low monthly payments amortized over thirty years," and that the loans "would be affordable" and "would benefit" them. With respect to their negligence cause of action, the Meleros claim that they adequately alleged that Wells Fargo breached a duty to truthfully assess the affordability of the loans. Finally, the Meleros maintain that they adequately stated a claim for unfair competition based on Wells Fargo's fraudulent and unfair conduct. We reject each of the Meleros' claims and affirm the judgment.
II.
FACTUAL AND PROCEDURAL BACKGROUND
A. The first amended complaint
In December 2008, the Meleros filed a first amended complaint (complaint) against Wells Fargo alleging causes of action for fraudulent misrepresentation, negligence, unfair competition (§ 17200), failure to provide a translation of an agreement (Civ. Code, § 1632), quiet title, and injunctive relief.
In their complaint, the Meleros stated that they are "hard-working immigrants who do not read English, and speak little English." The Meleros alleged that from August 2004 through November 2007, Michelle Limon, a loan officer at a Wells Fargo branch in Chula Vista, solicited them to refinance mortgages that they had on several properties. The Meleros alleged that they had no reason to suspect any wrongdoing because Wells Fargo was a "respected, national banking institution," and the Meleros had been "banking at Wells Fargo for many years without suspicion of any problems."
The Meleros also alleged that they provided Limon with accurate income and expense documentation. The Meleros alleged that despite the fact that they had provided accurate information, on "each of 5 loan transactions, Wells Fargo falsely inflated plaintiff[s'] income, created false tax returns in the plaintiff[s'] names, and falsified loan documents in order to qualify plaintiffs for a higher loan amount than plaintiffs would normally qualify for in order to reap huge profits from commissions, fees, and costs associated with each mortgage . . . ." The Meleros claimed that as to each loan transaction, "Wells Fargo placed plaintiff[s] into mortgages that Wells Fargo knew plaintiffs could not afford." The Meleros further alleged, "On each new loan transaction, defendant Wells Fargo falsely promised either low interest fixed-rate loans, or low interest rates for [five] year periods, and due to their great credit, guaranteed refinancing within [five] years at lower payments."
In their complaint, the Meleros detailed the allegedly false statements made by "Wells Fargo" to qualify the Meleros for such loans. However, the Meleros did not allege that these misrepresentations constituted the basis of their fraud claim.
In their brief on appeal, the Meleros state that "Limon falsely prepared the loan application and fabricated substantiating documents" in order to qualify the Meleros for the loans. The Meleros also acknowledge in their brief on appeal that such statements "were not the specific misrepresentations enumerated in the Meleros' cause of action for fraud."
The Meleros claimed that Wells Fargo had "failed to explain key terms of the mortgages other than the monthly payment, or provide interpreters." The Meleros also alleged that "at the signing of each mortgage," they had asked a notary questions concerning the terms of the loans The Meleros claimed that the notary was unable to answer their questions, other than to say, " 'Whatever the loan officer told you is what is there.' " The Meleros stated that they did not learn of Wells Fargo's fraud until the interest rates on their loans began to adjust, and they asked a relative of theirs to review the loan documents. According to the Meleros, at that point, "Plaintiffs discovered the true facts and fraudulent statements in the loan documents."
In a cause of action for fraud, the Meleros alleged that Wells Fargo had falsely promised them as to each loan that the loan would have "consistent low monthly payments," would be affordable, and would be beneficial to the Meleros. The Meleros also claimed that Wells Fargo had falsely stated to them that two of the loans had 30-year terms, when the loans in fact had 40-year terms. In a negligence claim, the Meleros alleged that Wells Fargo owed them a duty of care to "take reasonable actions and be truthful in the origination of financial matters as important as mortgage loans." The Meleros claimed that Wells Fargo had breached that duty by failing to "provide truthful facts to the underwriters."
In their unfair competition claim, the Meleros reincorporated the prior allegations of their complaint, and alleged that Wells Fargo had acted unfairly and in an "unethical[] and [] oppressive manner when it misled plaintiffs into believing they were obtaining affordable loans." The Meleros claimed that Wells Fargo's actions were "likely to deceive the public" in that "information communicated in the beginning and throughout the loan process by a mortgage lender is relied upon." B. Wells Fargo's motion for judgment on the pleadings
Wells Fargo filed a motion for judgment on the pleadings. In its motion, Wells Fargo contended that the Meleros failed to state a fraud claim, for several reasons. Wells Fargo argued that the misrepresentations that Limon allegedly made to the bank's underwriters in order to qualify the Meleros for their loans were not actionable because the representations were not made to the Meleros. Wells Fargo also maintained that the Meleros could not state a cause of action for fraud based on alleged misrepresentations that were contrary to the terms of written loan documents that the Meleros had signed. In addition, Wells Fargo contended that the Meleros could not state a fraud claim based on alleged statements that the Meleros could "afford" the loans, because such statements did not constitute actionable misrepresentations of fact. Wells Fargo claimed that the Meleros' negligence cause of action failed as a matter of law because a lender does not owe a borrower a duty to assess the affordability of a loan. Finally, Wells Fargo contended that the Meleros failed to state a cause of action for unfair competition, for reasons similar to those stated in connection with the Meleros' other claims.
In their opposition to the motion for judgment on the pleadings, with respect to their fraud claim, the Meleros argued that they "were not only promised affordable loans, but loans with fixed interest rates," and that they would not have accepted the loans if they had "been told the truth . . . that the loans contained explosive adjustable rate increases." The Meleros also claimed that Limon told them that Wells Fargo had approved each of their loans based on the information that the Meleros had supplied. The Meleros further contended that they would not have accepted the loans if they had known that Wells Fargo had approved the loans based on documents that had been fabricated by Limon.
The Meleros argued that they were justified in believing Limon because she was an employee of Wells Fargo, and claimed that they had "no way to learn that Limon had lied to them and created false documents until the interest rates adjusted and this lawsuit was initiated." The Meleros also maintained that Limon's statements concerning the affordability of the loans constituted misrepresentations of fact rather than opinion because the affordability of a loan is a factual question to be determined by underwriters through the application of mathematical principles to income and expense data.
With respect to their negligence claim, the Meleros claimed that case law holding that a lender does not owe a borrower a duty to assess the affordability of a loan was distinguishable in light of Wells Fargo's fraudulent actions in this case. The Meleros also argued that they had sufficiently stated an unfair competition claim (§ 17200) because Wells Fargo's practices were unfair, unlawful and fraudulent.
In July 2010, the trial court held a hearing on Wells Fargo's motion for judgment on the pleadings. At the conclusion of the hearing, the trial court confirmed a tentative order granting the motion without leave to amend. With respect to the Meleros' fraud claim, the trial court reasoned in part: "The allegations do not support a claim for fraud. . . . Plaintiffs could not have been defrauded by the falsified loan documents because they were not aware of the documents, which were submitted to defendant's underwriters rather than to the plaintiffs. Moreover, inasmuch as plaintiffs were aware of their own financial condition, they were in the best position to determine whether they could 'afford' the loans."
The trial court also concluded that the Meleros failed to properly state a negligence cause of action. Citing Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1092 (Nymark), the trial court noted that a lender does not ordinarily owe a borrower a duty of care in determining the affordability of a loan. The trial court reasoned in part: "Similarly [to Nymark], defendant here did not exceed the scope of its conventional role as a mere lender of money. There is no allegation, for example, that defendant actively supervised construction of the property. Although preparing false income statements and tax returns is morally blameworthy, plaintiffs were not aware of such conduct and the falsified information was provided to the underwriters for the benefit of the underwriters. Plaintiffs were aware of their own financial condition and were in the best position to know whether they would be able to afford the mortgages."
Finally, the trial court concluded that the Meleros had failed to state an unfair competition claim (§ 17200), because they had not identified an unlawful, unfair, or fraudulent business practice, as required. The trial court noted that the complaint did not allege any predicate violations of law sufficient to support a claim that Wells Fargo had acted unlawfully. With respect to the unfairness prong of the Unfair Competition Law (UCL) (§ 17200 et seq.), the trial court concluded that the Meleros had not alleged that Wells Fargo had violated a public policy tethered to a constitutional, statutory or regulatory provision, as required. Finally, the trial court concluded that the Meleros had not sufficiently stated a claim under the fraudulent prong of the UCL because they were not aware of the allegedly falsified loan application information given to the underwriters.
The trial court also noted that the Meleros had withdrawn their fourth cause of action for a violation of Civil Code section 1632. In addition, the trial court determined that the Meleros' ancillary claims for quiet title and injunctive relief failed in light of the Meleros' failure to state another viable cause of action that would justify such relief.
The trial court entered a judgment of dismissal in favor of Wells Fargo. The Meleros timely appeal from the judgment.
III.
DISCUSSION
The trial court properly granted Wells Fargo's motion for judgment on the pleadings
The Meleros claim that the trial court erred in granting Wells Fargo's motion for judgment on the pleadings. The Meleros contend that their complaint properly states causes of action for fraudulent misrepresentation, negligence, and unfair competition. A. The law governing a motion for judgment on the pleadings
A motion for judgment on the pleadings may be granted on the ground "[t]he complaint does not state facts sufficient to constitute a cause of action against that defendant." (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).)
The trial court's judgment on an order granting a motion for judgment on the pleadings is reviewed independently under the de novo standard of review. (International Assn. of Firefighters, Local 230 v. City of San Jose (2011) 195 Cal.App.4th 1179, 1196.) Generally speaking, "[o]n review of a judgment on the pleadings, we must accept the plaintiff's factual allegations as true, giving them a liberal construction and determine whether those allegations are sufficient to constitute a cause of action. [Citation.]" (Fenn v. Sherriff (2003) 109 Cal.App.4th 1466, 1491.)
We discuss an exception to the policy of liberal construction of the pleadings applicable to our consideration of the Meleros' fraud claim in part III.B.1, post.
" 'The standard of appellate review of a judgment on the pleadings is . . . identical to that on a judgment following the sustaining of a demurrer. [Citation.]' [Citation.] [¶] 'In the case of either a demurrer or a motion for judgment on the pleadings, leave to amend should be granted if there is any reasonable possibility that the plaintiff can state a good cause of action.' [Citation.]" (Gami v. Mullikin Medical Center (1993) 18 Cal.App.4th 870, 876-877.) "Leave to amend may be granted on appeal even in the absence of a request by the plaintiff to amend the complaint. [Citations.] We determine whether the plaintiff has shown 'in what manner he [or she] can amend [the] complaint and how that amendment will change the legal effect of [the] pleading.' [Citations.] '[L]eave to amend should not be granted where . . . amendment would be futile.' [Citation.]" (Long v. Century Indemnity Co. (2008) 163 Cal.App.4th 1460, 1467-1468.) B. The complaint does not state facts sufficient to constitute a cause of action for fraudulent misrepresentation
The Meleros state that the following allegations—which the Meleros summarized in their brief, based on the complaint—properly support a cause of action for fraud:
"[T]he Meleros specifically alleged that Wells Fargo misrepresented the subject loans would: (1) have consistent low monthly payments amortized over thirty years; (2) would be affordable; and (3) would benefit the Meleros."The Meleros argue that these misrepresentations were intended to "induce them into accepting the subject loans."
1. Governing law
"The well-established common law elements of fraud which give rise to the tort action for deceit are: (1) misrepresentation of a material fact (consisting of false representation, concealment or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to deceive and induce reliance; (4) justifiable reliance on the misrepresentation; and (5) resulting damage. [Citations.] . . . It is essential . . . that the person complaining of fraud actually have relied on the alleged fraud, and suffered damages as a result. [Citations.] [Citation.]" (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1557.)
With respect to the first element, "The law is quite clear that expressions of opinion are not generally treated as representations of fact, and thus are not grounds for a misrepresentation cause of action." (Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 308; see also ibid. citing Rest.2d Torts, § 538A.) The Restatement Second of Torts, section 538A provides, "A representation is one of opinion if it expresses only (a) the belief of the maker, without certainty, as to the existence of a fact; or (b) his judgment as to quality, value, authenticity, or other matters of judgment."
With respect to the element of justifiable reliance, "California law . . . requires that the plaintiff, in failing to acquaint himself or herself with the contents of a written agreement before signing it, not have acted in an objectively unreasonable manner." (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 423 (Rosenthal);see Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 394 [concluding party failed to present sufficient evidence of justifiable reliance to support fraud claim based on alleged promise of long term employment where party signed letter stating employment was at will and terminable at any time].)
" ' " '[F]raud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] "Thus ' "the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect." ' [Citation.] [¶] This particularity requirement necessitates pleading facts which "show how, when, where, to whom, and by what means the representations were tendered." ' " ' " (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1261-1262, citations omitted.)
2. Application
We consider in turn each of the three allegations that the Meleros contend support their fraud cause of action. With respect to the Meleros' claim that Wells Fargo falsely told them that the loans would "have consistent low monthly payments amortized over thirty years," the terms of the loans are set out in the loan documents that the Meleros signed. The Meleros do not claim that the loan documents do not clearly or accurately reflect the material terms of the loans. (Compare with Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230 [2011 Cal.App. Lexis 1042 at *2] ["Plaintiffs, individual borrowers who entered into Option ARMs with defendant, allege defendant's loan documents failed to adequately and accurately disclose the essential terms of the loans"].) The Meleros have not alleged, and have not argued, that they read the loan documents or had the documents translated to them before signing them. Thus, the Meleros have failed to sufficiently allege that they acted in an objectively reasonable manner in failing to read, or have translated to them, the loan documents. (See Rosenthal, supra, 14 Cal.4th at p. 423.) For this reason, the Meleros' allegations that they were promised loans with material terms different from the written terms of the loans do not provide a sufficient basis for stating a fraud cause of action. (See Dore v. Arnold Worldwide, Inc., supra, 39 Cal.4th at p. 394.)
We reject the Meleros' contention that they have adequately pled the element of justifiable reliance pursuant to California Trust Co. v. Cohn (1932) 214 Cal. 619 (Cohn), notwithstanding their failure to read, or have translated to them, the loan documents. In Cohn, the Supreme Court held that a fraudulently induced written contract could be reformed to state the terms of a prior oral agreement that manifested the true intent of the parties. (Id. at p. 628.) Although the complaint does state that the Meleros are seeking "reformation of the Notes," it does not adequately allege the terms of any separate agreements that the parties purportedly entered into prior to the Meleros' signing the written loan agreements. In contrast to the specific allegations of the prior oral agreement at issue in Cohn, in this case, the Meleros allege, with respect to each loan, merely that Wells Fargo misrepresented that the loans would have "consistent low monthly payments." Even assuming that the Meleros alleged that the parties had reached a prior agreement with respect to each loan, it is clear that such "general and conclusory allegations" (Morgan v. AT&T Wireless Services, Inc., supra, 177 Cal.App.4th at p. 1261), do not sufficiently allege the terms of the prior agreements so as to permit a court to reform the written notes to conform to such prior agreements.
In Rosenthal, the Supreme Court stated, "whatever validity" the rule stated in Cohn may have "when the plaintiff seeks equitable relief for fraud in the inducement of the contract" (Rosenthal, supra, 14 Cal.4th at p. 423, italics added), Cohn does not stand for the proposition that "a party who had reasonable opportunity to learn the terms of a contract before executing it but failed to do so, could, because of another party's misrepresentations, obtain a judgment the contract was completely void . . . . " (Rosenthal, supra, at p. 422.)
In Cohn, the cross-complainants alleged that the parties had reached an oral agreement based on the following specific representations:
"Plaintiff [cross-defendant] stated and represented to the defendants (cross-complainants) that if they would pay plaintiff $7,500 it would hold title to said lot as trustee for the use and benefit of itself and the defendants, and would resell the same on or before May 15, 1927, for $40,000, which sum was represented to be its reasonable value, retaining $22,500 thereof, and paying to the defendants the remaining $17,500; that plaintiff also represented that it would immediately organize a large sales force to sell the entire tract; that it would improve the tract by grading and paving streets and sidewalks and by installing electric, telephone, water and gas service to each lot; that it would form a corporation consisting of all the lot owners in the tract; that it would deed an ocean frontage to the corporation for the benefit of the members, and that it would thereafter reduce the foregoing oral statements and representations to writing . . . ." (Cohn, supra, 214 Cal.4th at p. 623.)
The Meleros do specifically allege that Wells Fargo misrepresented that some of the loans were for a term of 30 years, rather for 40 years, as stated in the loan documents. However, permitting the Meleros to amend their complaint to adequately allege that the loan documents should be reformed to provide for a 30-year term rather than a 40-year term would shorten the repayment period, and would therefore increase the Meleros' monthly payments. Since the Meleros alleged elsewhere in their complaint that they are "not able to make minimum monthly payments based on [the Meleros'] actual income," amending the complaint to include this allegation would be futile, and for this reason, is not to be permitted. (See Long v. Century Indemnity Co., supra, 163 Cal.App.4th at pp. 1467-1468.)
With respect to Wells Fargo's alleged statements that the loans would be "affordable" and would "benefit[]" the Meleros, neither statement constitutes a misrepresentation of fact. Whether a loan is "affordable" is a "matter[] of judgment" (Rest.2d Torts, § 538A), and thus, is not actionable. (Accord Perlas v. GMAC Mortgage, LLC (2010) 187 Cal.App.4th 429, 434 (Perlas)[appellants could not state a cause of action for fraudulent misrepresentation based on allegation that lender "knew or should have known . . . that it was not possible for appellants to make the payments called for in the loans based upon the income information actually provided to [lender]"].) Similarly, Wells Fargo's alleged statement that the loans would "benefit" the Meleros is clearly a nonactionable statement of opinion. (Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells, supra, 86 Cal.App.4th at p. 308.)
Accordingly, we conclude that the trial court properly granted Wells Fargo's motion for judgment on the pleadings with respect to the Meleros' fraud claim. C. The complaint does not adequately allege a negligence claim against Wells Fargo
The Meleros contend that the trial court erred in concluding that the complaint failed to state a negligence cause of action. Specifically, the Meleros contend that the trial court erred in concluding that Wells Fargo did not owe them a duty of care in determining whether they could afford the loans.
1. Governing law
"The existence of a duty of care owed by a defendant to a plaintiff is a prerequisite to establishing a claim for negligence. [Citation.] 'Whether a legal duty exists in a given case is primarily a question of law.' [Citation.]" (Nymark, supra, 231 Cal.App.3d at p. 1095.)
In Nymark, the plaintiff filed an action seeking to recover damages caused by the defendant's alleged negligence in appraising plaintiff's property in connection with a loan application. (Nymark, supra, 231 Cal.App.3d at p. 1092.) The Nymark court concluded that the plaintiff's negligence claim failed as a matter of law because, "[A] financial institution acting within the scope of its conventional activities as a lender of money owes no duty of care to a borrower in preparing an appraisal of the security for a loan when the purpose of the appraisal simply is to protect the lender by satisfying it that the collateral provides adequate security for the loan." (Ibid.) The Nymark court reasoned:
"[A]s a general rule, 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. [Citations.] Thus, for example, a lender has no duty to disclose its knowledge that the borrower's intended use of the loan proceeds represents an unsafe investment. [Citation.] 'The success of the [borrower's] investment is not a benefit of the loan agreement which the [lender] is under a duty to protect [citation].' [Citation.] 'Liability to a borrower for negligence arises only when the lender "actively participates" in the financed enterprise "beyond the domain of the usual money lender." ' [Citation.]" (Id. at p. 1096, fn. omitted.)
Similarly, in Perlas, supra, 187 Cal.App.4th at page 436, in rejecting the appellants' argument that "they were entitled to rely upon [lender's] determination that they qualified for the loans in order to decide if they could afford the loans," the court cited several cases in which courts have concluded that that a lender does not owe a borrower a duty to determine the affordability of a loan:
"A commercial lender pursues its own economic interests in lending money. [Citation.] A lender 'owes no duty of care to the [borrowers] in approving their loan.' [Citation.] A lender is under no duty 'to determine the borrower's ability to repay the loan. . . . The lender's efforts to determine the creditworthiness and ability to repay by a borrower are for the lender's protection, not the borrower's.' [Citations.]" (Ibid.)
2. Application
The Meleros contend that "[h]aving provided Wells Fargo with accurate and truthful tax returns, paystubs, and bank statements, it was reasonable for the Meleros to rely upon Wells Fargo regarding the affordability of the financing provided." However, it is clear that under California law a conventional lender of money owes no duty to a borrower to determine the affordability of a loan. (Perlas, supra, 187 Cal.App.4th at p. 436; see also Nymark, supra, 231 Cal.App.3d at p. 1096.)
We reject the Meleros' contention that Perlas and Nymark are distinguishable on the ground that Wells Fargo knew that the Meleros could not afford the loans, but nevertheless encouraged the Meleros to obtain the loans. Absent a duty of care, such knowledge is irrelevant. We also reject the Meleros' suggestion, raised in their reply brief, that Limon's alleged actions in falsifying the Meleros' loan application materials caused Wells Fargo to exceed its "conventional role as a mere lender of money" as that phrase is used in Nymark, supra, 231 Cal.App.3d at page 1096. A lender exceeds its "conventional role" when it " 'actively participates' in the financed enterprise beyond the domain of the usual money lender." (Ibid.)Limon's alleged misrepresentations to the underwriters did not alter Wells Fargo's role as a lender of money to the Meleros, and the Meleros' complaint does not allege any other such active participation.
It is undisputed that Limon's alleged misrepresentations to the underwriters cannot support the Meleros' fraud claim because, as the Meleros acknowledge in their brief, "the misrepresentations never reached the Meleros." Thus, while we agree with the trial court that Wells Fargo's alleged conduct in "preparing false income statements is morally blameworthy," such conduct does not provide a basis for liability in this case.
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Finally, Osei v. Countrywide Home Loans (E.D. Cal. 2010) 692 F.Supp.2d 1240, 1250 (Osei), which the Meleros cite, is not to the contrary, and does not support the conclusion that the Meleros have adequately alleged a duty sufficient to support their negligence cause of action in this case. In Osei, the federal district court held that a plaintiff had adequately alleged that a lender owed the plaintiff/borrower a duty to make certain disclosures that are statutorily required by the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. §2601 et seq.). There are no allegations pursuant to RESPA in the Meleros' complaint. (See also Osei, supra, at p. 1250, fn. 2 ["the court is mindful of fact that plaintiff has not provided a single example of a case in which a lender was found to owe a duty of care sounding in negligence to a borrower, nor has the court discovered any such authority under California law"].)
Accordingly, we conclude that the trial court properly granted Wells Fargo's motion for judgment on the pleadings on the Meleros' negligence claim. D. The trial court properly granted Wells Fargo's motion for judgment on the pleadings on the Meleros' unfair competition claim
The Meleros contend that the trial court erred in granting Wells Fargo's motion for judgment on the pleadings as to their unfair competition claim (§ 17200).
In order to state a claim for a violation of the UCL (§ 17200 et seq.), a plaintiff must sufficiently allege that the defendant committed a business act that is fraudulent, unlawful, or unfair. (See Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986.) In their opening brief, the Meleros contend that they have sufficiently alleged that Wells Fargo committed a business practice that is both fraudulent and unfair.
The Meleros contend that Wells Fargo's alleged misrepresentations of the terms of their loans constitute a sufficient basis to support their claim that Wells Fargo committed a fraudulent business practice under the UCL. "The term 'fraudulent' as used in section 17200 . . . 'requires a showing members of the public " 'are likely to be deceived.' " ' " (Puentes v. Wells Fargo Home Mortg., Inc. (2008) 160 Cal.App.4th 638, 645, citations omitted.) We concluded in part III.B., ante, that the Meleros failed to sufficiently allege that they acted in an objectively reasonable manner in failing to read the loan documents, or to have the documents translated to them before signing them, so that they could determine the terms of the loans as stated in the loan documents. For the same reason, we conclude that the Meleros have not sufficiently alleged that members of the public are likely to be deceived by alleged misrepresentations that materially differ from the written terms of the loan agreements. (See Rosenfeld v. JPMorgan Chase Bank, N.A. (N.D. Cal. 2010) 732 F.Supp.2d 952, 973 [concluding plaintiff who alleged that lender "misrepresented and concealed the terms of his loans," failed to allege fraudulent conduct sufficient to support a UCL claim where the "Adjustable Rate Rider attached to the [deed of trust], which Plaintiff executed, clearly explains the terms of the loan and repayment"].)
Finally, the Meleros' complaint fails to state a claim under the unfairness prong of the UCL because the Meleros have not alleged that Wells Fargo's "conduct is tethered to any underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of an antitrust law." (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1366.) This court has held that such an allegation is required in order to state a claim under the unfairness prong of the UCL. (Ibid.; see also Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1137.)
Accordingly, we conclude that the trial court properly granted Wells Fargo's motion for judgment of the pleadings on the Meleros' unfair competition claim.
IV.
DISPOSITION
The judgment is affirmed. Wells Fargo is entitled to costs on appeal.
AARON, J. WE CONCUR:
BENKE, Acting P. J.
NARES, J.