Order After Hearing POSCal. Super. - 6th Dist.August 1, 2019\DOO‘QQLIl-D-LQNH NNNNNNNMNHHHr-‘r-‘p-nr-aflwfl WQOM$WNHOOWQQM¥WNHO MAY 1-1 ZUZU Clerk of the Court Superior Coun C my o1 Santa Clara BY DEPUTY Mflamw SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA ANTHONY DEPHILLIPS et al., Case N0. 19CV352481 Plaintiffs, ORDER REGARDING DEFENDANT’S v. DEMURRER AND MOTION TO STRIKE JOHN GARDNER et 31., Defendants. In this wrongful foreclosure action, Defendant John Gardner files this demurrer and motion to strike. Plaintifis Anthony DePhillips and Renina Rebecca Gime DePhillips oppose both motions. I. BACKGROUND A. Factual According t0 the allegations 0f the verified complaint (“Complaint”), Anthony and Renina} individually and as trustees of a living trust, are the owners 0f real property located at 745 Harrison Street, Santa Clara, California (“Property”). (Complaint, 11 1.) Anthony and Renina are married to each other. 1 The Court Will use first names in this order on occasion for the sake 0f clarity. No disrespect is intended. ‘ \IQMADJN 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28 In 1981, Anthony and his sister, Donna Gardner (“Donna”) discussed the possibility 0f Donna purchasing the Property from Anthony with a buyback agreement in the amount 0f $175,000. (Complaint, 1] 7.) At that time, Anthony intended t0 reside in the Philippines for the foreseeable future with Renina, “so selling t0 [Donna] would save him from trying t0 manage the Property from abroad.” (Id. 1] 8.) Pursuant t0 their discussion, Anthony sent Donna a signed Deed of Trust on June 25, 1981, and Donna was t0 deposit the funds contemplated in the Deed ofl Trust into his bank account t0 complete the transaction. (Id. 1] 9.) Although Donna never paid Anthony the $ 1 75,000, Donna recorded the Deed 0f Trust on March 7, 1983. (Complaint, 1] 10 & Ex. A.) Donna and Renina are listed as beneficiaries on the Deed 0f Trust as joint tenants. (Id. at {I 11.) In November 201 8, Donna passed away. (Complaint, 1] 13.) Her son (Defendant John Gardner) took over her affairs. (Ibid) John purports t0 be the successor trustee and beneficiary 0f the Deed of Trust 0n the title for the Property. (Id. fl 3.) Despite the fact that Donna’s interest in the Deed of Trust passed to Renina, Defendant caused defendant The Foreclosure Company, Inc. (“Foreclosure Company”) t0 record a Notice 0f Default and Election t0 Sell Under Deed 0f Trust 0n May 10, 2019. (Id. 1] 14 & Ex. B.) Anthony and Renina reached out t0 the defendants 0n several occasions, notifying them that the $175,000 was never paid, and 0f other deficiencies, but the defendants largely ignored the requests by Anthony and Renina t0 cancel the foreclosure proceedings. (1d. 1] 15.) Based 0n the foregoing allegations, Anthony and Renina filed their complaint against John and Foreclosure Company, alleging causes of action for: (1) declaratory relief (against all defendants); (2) negligence (against Foreclosure Company); (3) cancellation 0f the Notice of Default (against all defendants); (4) injunctive relief (agains't all defendants); (5) quiet title (against all defendants); and (6) wrongful foreclosure (against all defendants). On November 14, 2019, John filed the instant demurrer and motion t0 strike. The Court held oral argument telephonically (due t0 coronavirus concerns) 0n March 17, 2020, and took the matter under submission. The Court now issues its final ruling. OKOOONONLJl-hww 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. DEMURRER Defendant demurs to the first, third, fourth, and sixth causes 0f action 0f the complaint 0n the ground of failure t0 allege facts sufficient t0 constitute a cause 0f action. (See Code Civ. Proc., § 430.10, subd. (3).) A. Legal Standard The function 0f a demurrer is t0 test the legal sufficiency 0f a pleading. (Trs. ofCapiral Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Ca1.App.3d 617, 621.) ‘5‘ Consequently, [a] demurrer reaches only t0 the contents 0f the pleading and such matters as may be considered under the doctrine ofjudicial notice’ [citation].” (Hilltop Properties, Inc. v. State (1965) 233 Cal.App2d 349, 353; Code Civ. Proc., § 430.30, subd. (a).) “ ‘It is not the ordinary function of a demurrer t0 test the truth 0f the allegations [in the challenged pleading] 0r the accuracy with which [the plaintiff] describes the defendant’s conduct. .’ [Citation] Thus, ‘the facts alleged in the pleading are deemed t0 be true, however improbable they may be. [Citati0n.]’ [Citations.]” (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958.) B. First Cause 0f Action Defendant argues the first cause 0f action for declaratory relief fails t0 state a claim because “[d]eclaratory relief is not a cause 0f action, but a form 0f relief.” (Opening Brief, at p. 4.) In support of his argument, Defendant cites the case of Bart v. City and County ofSan Francisco (2007) 155 Cal.App.4th 65 (Bart), disapproved 0n other grounds by MC Williams v. City ofLong Beach (2013) 56 Cal.4th 613, 619. Granted, the court in Butt stated, “[a] constructive trust is ‘not an independent cause of action but merely a type 0f remedy’ [citation], and an equitable remedy at that. [Citation] The same is true 0f declaratory relief (5 Witkin, supra, § 806, p. 262) ....” (Barr, supra, 155 Cal.App.4th at p. 82.) But Defendant cites n0 legal authority, and the Court is aware of none, providing that a cause 0f action for declaratory relief is subj ect t0 demurrer 0n the basis that declaratory relief may be more appropriately characterized as a remedy as opposed t0 an independent cause 0f action. (See Badie v. Bank ofAmerica (1998) 67 Ca1.App.4th 779, 784-785 (Badie) [“When [a O&OOONQ‘J‘I-bwtx) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 party] fails t0 raise a point, 0r asserts it but fails to support it with reasoned argument and citations t0 authority, we treat the point as waived.”]; see also Schaefi’er Land Trust v. San Jose City Council (1989) 215 Cal.App.3d 612, 619, fn. 2 (Schaeffer) [“[A] point Which is merely suggested by a party’s counsel, with n0 supporting argument 0r authority, is deemed t0 be without foundation and requires n0 discussion.”].) Furthermore, caselaw provides that a plaintiff can properly allege a claim for declaratory relief if the plaintiff sets forth facts showing the existence 0f an actual controversy relating to the legal rights and duties 0f the parties under a written instrument 0r with respect t0 property and requests that the rights and duties of the parties be adjudged by the court. (Cemex Homes v. Sr. Paul Fire & Marine Ins. C0. (2015) 237 Cal.App.4th 23, 28-29 [“A cause of action for declaratory relief may adjudicate future rights and liability between parties who have a relationship, either contractual or otherwise. [Citations.] The pleader need not establish it is also entitled to a favorable judgment. [Citation.] T0 assert a cause 0f action for declaratory relief, Code of Civil Procedure section 1060 requires that there be an ‘actual confroversy relating to the legal rights and duties 0f the respective parties,’ not an abstract 0r academic dispute. [Citation] ‘However, the courts will nevertheless evaluate in the context 0f a demurrer whether the factual allegations 0f the complaint for declaratory relief reveal that an actual controversy exists between the parties. [Citation] “Sustaining a demurrer when the complaint reveals such a controversy constitutes error. [Citations.]” ’ ”]; Ludgate Ins. C0. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606; Lee v. Silveira (2016) 6 Ca1.App.5th 527, 546.) Defendant does not argue, or otherwise demonstrate, that Plaintiff fails t0 allege such facts. Accordingly, Defendant’s demurrer to the first cause 0f action is OVERRULED. C. Third Cause 0f Action Defendant contends the third cause 0f action for cancellation of the Notice of Default is not a legally cognizable cause 0f action because there is no legal basis for asserting a claim for cancellation 0f loan documents. The Court disagrees with Defendant’s assertion. A claim for cancellation 0f instruments, such as a Notice 0f Default, is expressly authorized by Civil Code section 3412. “ ‘Under Civil ._. O \O 00 \J ON ()1 $ L») [\J NNNNNNNNfl-‘r-‘I-I-IHHHHn-A ‘QQMAUJNHOWOONJQM-bwwfl [\J 00 Code section 3412, “[a] written instrument, in respect t0 which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered t0 be delivered up 0r canceled.” T0 prevail 0n a claim to cancel an instrument, a plaintiff must prove (1) the instrument is void 0r voidable due t0, for example, fraud; and (2) there is a reasonable apprehension 0f serious injury including pecuniary loss 0r the prejudicial alteration of one’s position. [Citati0n.]’*[Citation.]” (Thompson v. loane (2017) 11 Cal.App.5th 1180, 1193-1 194 (Thompson).) Notably, Defendant does not argue, or otherwise demonstrate, that Plaintiffs fail t0 allege facts entitling them t0 cancellation of the Notice of Default. Defendant’s demurrer t0 the third cause of action therefore is OVERRULED. D. Fourth Cause 0f Action Defendant argues the fourth cause 0f action for injunctive relief fails t0 state a claim because injunctive relief is a remedy, not a cause of action. In support of his argument, Defendant cites the case ofAllen v. City ofSacramento (2015) 234 Cal.App.4th 41 (Allen). As is relevant here, the court in Allen stated, “Injunctive relief is a remedy, not a cause 0f action. [Citations] A cause 0f action must exist before a court may grant a request for injunctive relief. [Citations.]” (Allen, supra, 234 Cal.App.4th at pp. 65- 66.) In opposition, Plaintiffs concede that their request for inj unctive relief is more properly alleged in connection with their underlying causes of action as opposed t0 as a standalone cause 0f action. Accordingly, Defendant’s demurrer t0 the fourth cause 0f action is SUSTAINED WITHOUT LEAVE To AMEND? E. Sixth Cause 0f Action Defendant asserts the sixth cause 0f action for wrongful foreclosure fails to state a claim because a notice of sale has not yet been recorded and the Property has not been sold. 2 Notably, this ruling does not preclude Plaintiffs from seeking injunctive relief in connection with their other causes 0f action. (See Allen, supra, 234 Cal.App.4th at pp. 65-66 [“Although the order sustaining the demurrer was proper because an injunction is not a cause 0f action, plaintiffs may still obtain injunctive relief if they prevail 0n a cause of action. [Citations.]”].) OxoooF-JONUIAUJNH N [\J N N [\J N [\J N M r- u-I -- >-- r-a -- p-I p-a H H W \J a LII A b.) N b-l O \D W N O\ Lil b DJ N '-‘ The basic elements of a tort cause 0f action for wrongful foreclosure “are: ‘(1) the trustee or mortgagee caused an illegal, fraudulent, 0r willfully oppressive sale 0f real property pursuant to a power of sale in a mortgage 0r deed 0f trust; (2) the party attacking the sale (usually but not always the trustor 0r mortgagor) was prejudiced 0r harmed; and (3) in cases where the trustor 0r mortgagor challenges the sale, the trustor or mortgagor tendered the amount 0f the secured indebtedness 0r was excused from tendering.’ [Citation.]” (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 408.) Here, Plaintiffs do not allege facts showing that the Property has been sold at a foreclosure sale. And in their opposition, Plaintiffs acknowledge that the Property has not yet been sold at a foreclosure sale. Thus, they cannot plead a claim for wrongful foreclosure. (See Sciarratta v. US. Bank Narional Assn. (2016) 247 Cal.App.4th 552, 561 [“A wrongful foreclosure is a common law tort claim. It is an equitable action t0 set aside a foreclosure sale, 0r an action for damages resulting from the sale, on the basis that the foreclosure was improper.”].) Accordingly, the demurrer to the sixth cause of action is SUSTAINED WITH LEAVE TO AMEND if facts change (e.g., if the Property is, in the future, sold at a foreclosure sale). III. MOTION TO STRIKE Defendant moves t0 strike Plaintiffs’ request for punitive damages from the complaint. A. Legal Standard Under Code 0f Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading 0r strike out a1] 0r part 0f any pleading not drawn 0r filed in conformity with the laws 0f this state, a court rule, 0r an order 0f the court. (Code Civ. Proc., § 436.) A motion to strike is the proper procedural vehicle to challenge a punitive damages prayer. The grounds for a motion to strike must appear on the face 0f the challenged pleading 0r from matters 0f which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) In ruling on a motion t0 strike, the court reads the pleading as a whole, all parts in their context, and OKOOO‘JONU‘I-PUJNH NNNNNNNNNp-Ap-np-Ip-twr-Ava-at-t OO‘JGMALHNHOKOOOQQm-PWNH assuming the truth of all well-pleaded allegations. (See Turman v. Turning Point ofCentraI California, Inc. (2010) 191 Cal.App.4th 53, 63.) B. Discussion As an initial procedural matter, the Court notes that Plaintiffs’ opposition t0 the motion to strike is untimely. Under the Code 0f Civil Procedure, “[a]ll papers opposing a [demurrer] shall be filed with the court and a copy served 0n each party at least nine court days before the hearing.” (Code Civ. Proc., § 1005, subd. (b).) With a hearing date 0f March 17, 2020, Plaintiffs were required to file and serve their oppositiOn by March 4. However, it was not filed until March 11, seven days late and one day after Defendant’s reply papers were due. Here, not only was Defendant deprived of the statutorily-mandated number 0f days to which he was entitled t0 review the opposition, but he was prejudiced because he was unable to file a substantive reply addressing the arguments raise in the late-filed opposition. Because of these due process concerns, it would not be appropriate for the Court t0 consider Plaintiffs’ opposition. In light 0f the foregoing, Court will disregard Plaintiffs’ opposition when considering the merits of Defendants’ motion to strike. (See Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 765 [trial court has broad discretion under rule 3.1300(d) 0f the California Rules of Court t0 refuse to consider papers served and filed late].) In his motion, Defendant contends the Court should strike Plaintiffs‘ request for punitive damages sought in connection with the third cause 0f action for cancellation of the Notice of Default because: (1) the third cause 0f action is not a legally cognizable claim; (2) the third cause 0f action sounds in contract and thus punitive damages cannot be recovered; and (3) Plaintiffs d0 not plead facts showing that his alleged conduct constitutes malice, oppression, or fraud. Defendant’s first argument lacks merit because, as previously explained, a claim for cancellation of instruments, such as the Notice 0f Default, is expressly authorized by Civil Code section 3412. (See Thompson, supra, 11 Ca1.App.5th at pp. 1193-1 194.) Defendant’s second argument fails because this cause of action is not based 0n contract, but rather on a statute (section 3412). Moreover, this cause of action typically is based on fraud, and fraud supports a punitive damages prayer. \OOOK-JQKII-hU-JN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 As t0 Defendant’s third argument, the right t0 recover punitive damages requires proof of “oppression, fraud, 0r malice” 0n the part 0f the defendant by “clear and convincing evidence.” (Civ. Code, § 3294, subd. (a).) For pleading purposes, in order to support a prayer for punitive 0r exemplary damages, the complaint must allege “ultimate facts 0f the defendant’s oppression, fraud 0r malice.” (Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 316-317.) Simply pleading the statutory terms “oppression, fraud 0r malice” is insufficient to adequately allege punitive damages; rather, specific factual allegations demonstrating oppression, fraud, 0r malice are required. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) Here, malice, fraud, and oppression all serve as the foundation for Plaintiffs’ request for punitive damages. (See Complaint, 1W 26, 27.) As is relevant here, “malice” is defined as conduct which is intended by the defendant (o cause injw'y t0 the plaintifi’or despicable conduct which is carried on by the defendant with a willful and conscious disregard 0f the rights or safety 0f others.” (Civ. Code, § 3294, subd. (c)(l), italics added.) In the third cause 0f action, Plaintiffs allege an intentional wrong~that Defendant recorded the Notice 0f Default willfully and with the intent to harm them. (Complaint, fl 26.) “When the plaintiff alleges an intentional wrong, a prayer for exemplary damages may be supported by pleading that the wrong was committed willfully 0r with a design t0 injure.” (GD. Searle & C0. v. Super. Ct. (1975) 49 Cal.App.3d 22, 29.) And because intent is a fact, a general allegation in a complaint that a defendant acted with an intent t0 deceive the plaintiff is sufficient for pleading purposes. (Woodrufv. Howes (1881) 88 Cal. 184, 190; accord Wennerholm v. Stanford University School ofMedicine (1942) 20 Ca].2d 713, 716.) Plaintiff has satisfied the requirements of these cases to adequately plead facts supporting their punitive damages prayer. Accordingly, the motion to strike Plaintiffs’ request for punitive damages is DENIED. IT IS SO ORDERED. The Honorable Sunil R. Kulkami Judge 0fthe Superior Court Date: K (t 7’0 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA DOWNTOWN COURTHOUSE ' 191 NORTH FIRerTREET SAN JOSE, CMJFORNIA 95113 CIVIL DIVISION MAY I 1 ZUZU Clerk of the Court Superior Coun olfifyamy of Santa Clara RE: Anthony DePhillips et al vs John Gardner et al BY DEPUTY Case Number: 190V352481 M flw-fl/gf PROOF OF SERVICE Order Regarding Defendant's Demurrer and Motion to Strike was delivered to the parties listed below the above entitled case as set forth in the sworn declaration below. If you. a party represented by you, or a witness to be called on behalf of that party need an accommodation under the American with Disabilities Act. please contact the Court Administrator‘s office at (408) 882-2700, or use the Court's TDD line (408) 882-2690 0r the Voicefl'DD California Relay Service (800) 735‘2922. DECLARATION OF SERVICE BY MAIL: l declare that | served this notice by enclosing a true copy in a sealed envelope, addressed to each person whose name is shown below, and by depositing the envelope with postage fully prepaid. in the United States Mail at San Jose. CA on May 11, 2020. CLERK OF THE COURT. by Mark Rosales. Deputy. cc: Ashlee D Gonzales 2501 Park Blvd 2nd Floor Palo Alto CA 94306 Joseph M Sweeney SWEENEY MASON LLP 983 University Ave Suite 104C Los Gatos CA 95032-7637 cw-9027 REV 12/08/16 PROOF 0F SERVICE
