Order After Hearing POSCal. Super. - 6th Dist.August 16, 2019\OOONONUI-thr-d NNNNNNNNNr-‘r-‘v-‘HHr-tr-Ar-twp-n OONQLALMNi-‘OOOOVOUI-wai-‘O ILE OCT 26 2020 Clérk of e Court Superior O_my A ounty of Santa Clara l II DEPUTYBY FBMMJG SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA DIRK HARTOGS, ct a1., Case No. 19CV353062 Plaintiffs, ORDER RE: DEMURRER vs. CITIMORTGAGE, INC., et al., Defendants. The demurrer by Defendants US Bank, N.A., Bank ofNew York Mellon, and the successor to chen Loan Servicing came on for hearing before the Honorable Roberta S. Hayashi on October 20, 2020, at 9:00 am. (via CourtCall) in Department 6. The matter having been submitted, the Court finds and orders as follows: I. Background This is a wrongful foreclosure action brought by Plaintiffs Dirk Hartogs and Linda Keilers (collectively, “Plaintiffs”) against defendants CitiMortgage, Inc. (“Citi”), US Bank, N.A. (formerly First Trust National Association) (“US Bank”), Credit Based Asset Servicing and Securitization, LLC (“CBASS”), Bank ofNew York Mellon (formerly Bank ofNew York) (“Mellon”), and chen Loan Servicing (“chen”). 1 fl ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT KOOOQQUILUJNH NNNNNNNNNr-r-th‘r-tr-Ar-Iy-IHr-tr-t WNQM#WNHOWOOQO\m-PWNHO Plaintiffs owned a primary residence at 2220 Rolling Hills Drive in Morgan Hill, California (the “Property”). As alleged in the First Amended Complaint (“FAC”), in 1993, Plaintiffs mortgaged the Property to secure a loan from the Prudential Home Mortgage Company. (FAC, 1] 22 & Ex. 1 [Deed of Trust].) Following an initial assignment in 1997, in 2004, a second assignment was made. (FAC, 1] 23; see also Compl., Ex. 2 [“Second Assignment”].) According to the Second Assignment, Citi-acting with power of attorney on behalf ofUS Bank-sold Plaintiffs’ 1993 mortgage to CBASS. In 2007, the mortgage was transferred again. According to the Third Assignment, CBASS sold the mortgage to its trustee, namely Mellon’s predecessor. (FAC, 1] 24 & Ex. 2 [“Third Assignment”]; see also Compl., Ex. 3.) In August 2012, another assignment was made fiom Mellon’s predecessor, the Bank of’ New York, to Mellon, Which assignment appears to document the merger-and-acquisition activity through which Mellon’s predecessor became Mellon. (FAC, 11 27 & Ex. 3 [“Foufth Assignment"]; see also Compl., Ex. 4.) Subsequently, the Fifth Assignment was recorded on behalf ofCBASS for the stated purpose of correcting the Second Assignment by adding recording book and page information. (FAC, 1] 30 & Ex. 4 [“Fifth Assignment”]; see also Compl., Ex. 5.) In 2018, yet another assignment was made, which was described as a “gap assignment.” (FAC, Ex. 5 [“Sixth Assignment”].) The terms of the Sixth Assignment state Plaintiffs’ mortgage was transferred as follows: “For Value Received, US IBank National Association as Trustee, Successor in interest to First Trust National Association As Trustee for PHMSC hereby grants, assigns and transfers to U.S. Bank N.A. F/K/A FIRST TRUST NATIONAL ASSOCIATION, AS TRUSTEE at C/O OCWEN LOAN SERVICING, LLC, 1661 WORTHINGTON ROAD, STE 100, WEST PALM BEACH, FL 33409. . (FAC, 1] 33 & Ex. 5 [Sixth Assignment]; see also Compl. Ex. 6.) ‘ In October 2018, a notice of default was recorded. (FAC, 1m 36-37 & Ex. 6; see also Compl. Ex. 7.) Thereafter, Plaintiffs received a notice of trustee’s sale with a sale date ofAugust 21, 2019. (FAC, 1] 41 .) Plaintiffs dispute the validity and'propriety of the assignments described above as well as the foreclosure proceedings. Plaintiffs assert the following causes of action against Defendants: (1) declaratory and injunctive relief (against all defendants); (2) cancellation 2 fi/ ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOONOUI-PUJNH NNNNNNNNND-iv-dHr-t-p-nr-tr-Ar-tr-t OONQLh-PWNHooooflQUI-PWNF-‘O of instruments (against Citi, Mellon, US Bank, and chen); (3) violation of Civil Code section 2924 (against Mellon and chen); (4) violation of California’s unfair competition law (the “UCL”) (against all defendants); (5) violation of the California Homeowner Bill of Rights (“CHBOR”) (against Mellon, US Bank, and chen); (6) slander of title (against US Bank and chen); (7) quiet title (against Mellon and chen); (8) financial elder abuse (against Mellon, US Bank, and chen); and (9) breach of contract (against Mellon and US Bank).1 Currently before the Court is. a demurrer by US Bank, Mellon and chenz (collectively, “Defendants”) to the first, second, fourth, sixth, seventh, eighth, and ninth causes of action on thd ground of failure to state facts sufficient to constitute a cause of action. Plaintiffs oppose the demurrer. Both Plaintiffs and Defendants filed requests for judicial notice. x II. Requests for Judicial Notice Defendants request judicial notice of recorded instruments, many of which are attached to Plaintiffs’ original and amended complaints. The instruments encompassed by Defendants’ request consist of the assignments summarized above-including the very first assignment in 1997-as well as the notice of default and notice of trustee’s sale. A court may take judicial notice of the existence and facial contents of recorded instruments. (Yvanova v. New Century Mortgage Cbrp. (2016) 62 Cal.4th 919, 924, fn. 1, citing Evid. Code, § 452, subds. (c) & (h).) This includes the fact of the document’s recordation, the parties to the transaction, 'the date the parties executed and recorded the document, and legally operative language but not disputed statements. (Yvanova, supra, 62 Ca1.4th at p. 924, fil. 1, citing Fontenot v. Wells Fargo Bank, N.A. (201 1) 198 Cal.App.4th 256, 265.) A court may then rely upon the legal effect of the 1 Plaintiffs also purport to assert the third and fifih causes of action against “Western Progressive,” which is presumably a reference to Western Progressive, LLC, identified in the notice of default as a point of contact and the party who prepared the notice of default on behalf of CBASS as beneficiary and Mellon as trustee. But Western Progressive, LLC is not otherwise identified as a defendant in the caption or prefatory statement of facts in the pleading. And, there is no proof 0f service in the Court’s file for Western Progressive, LLC. Thus, the inclusion of Western Progressive in the title above these claims appears to be a clerical error. 2 As a result of a merger, the real party in interest demurring to the claims against chen is its successor in interest PHH Mortgage Corporation. With that said, the Conn refers to chen herein because the Court must discuss the allegations pleaded in ruling on the demurrer. The Court notes this change in corporate identity to ensure clarity in the record. 3 I a ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOOflQUI-BWNH NNNNNNNNNr-‘HHHHt-Ar-tr-AHH W fl C\ K11 -§ U) N P-‘.O \O 00 N C\ kl] g DJ N >-‘ O document as deduced from these facts. (See Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117-18.) While Plaintiffs purport to oppose Defendants’ request for judicial notice, they do not actually dispute the facial contents enumerated above that come within the proper scope ofjudicial notice. Plaintiffs state they “do not dispute that these documents were recorded in the Santa Clara County Recorder’s Office, the date they were recorded, that these documents were given the Instrument Numbers on their face and listed Within Defendant’s Request for Judicial Notice, or that they are exact replicas of What the County Recorder has in its records.” (P1. Opp. to RJN at p. 3:22-25.) In other words, Plaintiffs d0 not dispute that the documents say What they say; they dispute whether some statements are true and the interpretation of these statements. Accordingly, the undisputed facial contents of the recorded instruments, nearly all of which Plaintiffs have already placed in the record through their pleadings, are subj ect t0 judicial notice. The Court does not take judicial notice of disputed questions of fact or interpretation that go beyond the proper matters described above. Based on the foregoing, Defendants’ request for judicial notice is GRANTED. Plaintiffs request judicial notice of a 1982 quitclaim deed showing they owned the Property at that time, which deed appears to be the same as the deed appended to the original complaint that has now been superseded by the FAC. While the relevance and materiality of this quitclaim deed are not obvious, the Court may take judicial notice of the facial contents of this recorded instrument for the same reasons set forth above. Next, Plaintiffs also request judicial notice 0f a lien report. The origin and nature of the lien report are fundamentally unclear. Also, it is not apparent the report is a public record or document prepared by a public agency. And so, there is no obvious and proper basis for taking judicial notice of the lien report. Thus, the lien report is not subject to judicial notice. Plaintiffs’ request is therefore GRANTED IN PART and DENIED IN PART. III. Demurrer In general, “a complaint must contain ‘[a] statement of the facts constituting the cause of action, in ordinary and concise language.” (Davaloo v. State Farm Inlsurance C0. (2005) 135 Cal.App.4th 409, 415, quoting Code Civ. Proc., § 425.10, subd. (a)(l).) “This fact-pleading 4 ORDER RE: DEMURRER To FIRST AMENDED COMPLAINT fl \OOONQUI-PUJNt-I NNNNNNNNNt-It-HHr-tr-AHHHH WNQMAWNP-‘OGOONQM-PWNF-‘O requirement obligates the plaintiff to allege ultimate facts that as a whole apprise[ ] the adversary of the factual basis of the claim.” (Davaloo, supra, 135 Cal.App.4th at p.'415 [internal quotation marks and citations omitted].) A demurrer tests whether the plaintiff alleges each fact essential to the cause 0f action asserted. (CA. v. William S. Hart Union High School Dist. (2012) 53 Ca1.4th 86 1 , 873.) A. First Cause 0f Action-Declaratory and Injunctive Relief A party may seek declaratory relief “in cases of actual controversy relating to the legal rights and duties of the respective parties. . ..” (Code Civ. Proc., § 1060.) To state a claim for declaratory relief, the plaintiff must allege facts showing the existence of an actual controversy that is ripe for resolution. (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 562-63.) To state a claim for declaratory relief, a plaintiff must simply allege facts showing there is an actual controversy; he or she need not allege facts showing entitlement to a favorable declaration. (Centex Homes v. St. Paul Fire and Marine Insurance C0. (2015) 237 Cal.App.4th 23, 29.) “Strictly speaking, therefore, a demurrer is not the appropriate weapon with which to attack the merits of a claim for declaratory relief.” (Siciliano v. Fireman ’s Fund Insurance C0. (1976) 62 Cal.App.3d 745, 755.) As for injunctive relief, it is true that an injunction is a remedy, not a cause of action. (Allen v. City ofSacramento (2015) 234 Cal.App.4th 41, 65.) Nevertheless, irrespective ofhow a plaintiff artfully or inartfully labels a claim, a plaintiffmay obtain an injunction if he or she is otherwise entitled to such relief on thexmerits. (Ibid.) Despite acknowledging some of these principles, Defendants do not advance a clear argument establishing Plaintiffs fail to adequately plead entitlement to declaratory or injunctive relief. In Defendants’ supporting memorandum, they focus on whether Plaintiffs plead facts affirmatively establishing their liability for the underlying claims. discussed below. But Plaintiffs need not plead facts showing they will obtain a favorable declaratory judgment establishing their title to the property to state a claim for declaratory relief. Similarly, Defendants do not establish that Plaintiffs fail to plead any cognizable basis for injunctive relief. And, as set forth below, the Court does not sustain the demurrer as to each and every cause of action at issue. Also, é/ 5 ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOONQUIAWNr-t N N N N N N N N N r-- r-i t-I )-- >- >-t >-t r-t p-- y-t OO \l O\ U! L ' LN N H O W 00 \l O\ LII A DJ N P-‘ O Defendants demurrer is not directed to all of the causes of action pleaded. Thus, it cannot be said at this juncture that the FAC is devoid of any possible basis for injunctive relief. For these reasons, Defendants do not establish that the first cause of action in its entirety is subject to demurrer due to the absence of an alleged controversy over the parties’ rights and obligations and absence of a basis for injunctive relief. The demurrer to the first cause of action is, therefore, QVERRULED. B. Second Cause of Action-Cancellation of Instruments After providing a brief statement of broad legal principles, Defendants argue that “Plaintiffs still have not tendered or even alleged a capacity to tender, so their cancellation of instruments claim fails as a matter of law.” (Mem. of Pts. & Auth. at p. 5: 19-20.) Plaintiffs do not clearly and directly respond to this argument in opposition. Because a demurrer does not test the truth of the factual allegations (Nguyen v. Western Digital Corp. (2014) 229 Cal.App.4th 1522, 1536-37), Defendants’ contention that Plaintiffs have not, in fact, tendered their loan balance is immaterial. The implicit premise of Defendants’ argument is that a plaintiff must always allege tender of the loan balance to state a claim for cancellation of instruments. Defendants do not cite ahy authority to support this legal premise. The Court first clarifies that the elements of a claim “C for cancellation of instrument are: (1) the instrument is void or voidable due to, for example, fraud; and (2) there is a reasonable apprehension of serious injury including pecuniary loss or the prejudicial alteration of one’s position.’ [Citation.]” (Thompson v. Ioane (2017) 11 Cal.App.5th 1180, 1193-1 194.) Such a claim is considered to be equitable in nature. (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 819.) And, as a‘claim sounding in equity, courts have applied general equitable principles like those cited by Defendants in evaluating claims like the second cause of action here. (Ibid) Even so, courts have not applied these principles categorically. (Ibid.) This is to say that-contrary to the implicit premise of Defendants’ argument-a tender allegation is not always required. (Ibid.) As described by the Fourth District: “The tender rule is not absolute; tender is not required to cancel a written instrument that is void and not merely voidable.” (Ibid.) 6 a ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOONQUI-bLIJNp-t NNNNNNNNNr-Ir-tr-Ir-Ip-Ap-n-nr-Ap-nr-t WNO‘xUl-PUJNP-‘OWOONONUILWNHO Defendants do not address the tender rule as applied by modern courts in wrongful foreclosure actions. They d0 not acknowledge the distinction between void or voidable instruments and articulate why Plaintiffs’ allegations properly fall into one category or the other. And Defendants d0 not thereafter explain why Plaintiffs’ allégations are deficient in light of the nature and basis for Plaintiffs’ cancellation claim. Accordingly, Defendants fail to substantiate an argument based on the tender rule, and the demurrer is not sustainable on that basis. Defendants do not advance any other argument with respect to the second cause of action. Thus, the demurrer t0 the second cause of action is OVERRULED. C. Fourth Cause of Action-UCL Defendants argue Plaintiffs fail to state a UCL claim because they do not allege facts showing they have standing and that Defendants’ conduct caused their injuries as compared to their own default. In opposition, Plaintiffs focus on a number of points that are not directly responsive before abruptly concluding that they have pleaded an injury-in-fact that confers standing. The UCL “prohibits ‘unfair competition,’ which it defines as ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [Section 17500].” (Hansen v. Newegg.com Americas, Inc. (201 8) 25 Cal.App.5th 714, 722, quoting Bus. & Prof. Code, § 17200.) “‘The UCL’s purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.’” (Hansen, supra, 25 Cal.App.5th at p. 722, quoting Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) “A plaintiff alleging unfair business practices under [Section 17200] must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khouly v. Maly’s ofCalifornia, Inc. (1993) 14 Cal.App.4th 612, 619.) Standing is an essential prerequisite for asserting a UCL claim. (Hansen, supra, 25 Ca1.App.5th at p. 723, citing Kwikset, supra, 51 Cal.4th at pp. 320-21.) To properly plead standing, a plaintiff must allege he or she suffered an injury in fact, particularly a loss or deprivation ofmoney or property, as a result of the unlaWfiJl, unfair, or fraudulent conduct. (Hansen, supra, 25 Ca1.App.5th at pp. 724-25.) For example, a plaintiff suffers an economic 7 ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT “a H NNNNNNNNr-dr-Ir-tr-tHr-Ip-tr-Ay-nr-A gflOm-PWNv-‘OOOOQONUIkaNr-‘O \oooqovmbmm injury sufficient to confer standing when he or she pays more in the course 0f a transaction than he or she would have of when a present or future interest in property is diminished. (Kwikset, supra, 5 1 Cal.4th at pp. 323-24.) As another example, loss of customers and increased business costs may qualify as an injury in fact. (Law Offices ofMathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 560.) Here, Plaintiffs fail to plead sufficient facts to support their claim, including the element of standing. In paragraph 88 of the FAC, Plaintiffs vaguely allege they have “been harmed monetarily as described herein and to be proven at trial, for wrongful payments of principal and interest to parties not entitled, cloud placed on title to the Subj ect Property, legal fees, etc. in amounts detailed herein, to be proven at trial.” It is fundamentally unclear from the pleading what monetary harm “described herein” Plaintiffs are referring to. The prefatory allegations that precede each cause of action do not adequately disclose such harm. Otherwise, as Defendants articulate, there are insufficient allegations providing a causal link between an injury-in-fact that confers standing and the conduct that purportedly violates the UCL. Courts have held that the loss of a home due t0 a completed foreclosure sale is a loss of property sufficient to confer standing under the UCL. (Lueras v. BACHome Loans Servicing, LP (2013) 221 Ca1.App.4th 49, 82.) Still, where a plaintiffs allegations do not disclose a causal link between the loss-the foreclosure sale-and the alleged UCL violation, the allegations are deficient. (Ibid.) Here, in addition to the lack of clarity in Plaintiffs’ basic allegations of loss, it is not apparent how their alleged monetary losses correlate to each defendant’s allegedly unfair, unlawfill, and fraudulent business practices. For example, it is unclear in the pleadings to Whom Plaintiffs allegedly made mistaken payments and that these payments have a connection to their default or the allegedly improper foreclosure proceedings. Further, as Defendants point out, because there is no allegation of a completed foreclosure sale, Plaintiffs claim cannot be based on the loss of their home at this juncture. For these reasons, Plaintiffs must plead mlore facts-in a clear and reasonably particular manner-showing what each defendant did in violation of the UCL and that each violation caused an articulable loss ofmoney or property. For these reasons, the demurrer to the fourth cause of action is SUSTAINED with 20 days’ leave to amend. 8 ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT 'é/ OOOQQKJI-PWNp-A NNNNNNNNNp-nr-HHHr-AHHHr-t OONQM-bUJNF‘OWOONQLh-bWNHO D. Sixth Cause of Action-Slander of Title “The thrust of the tort of disparagement or slander of title is protection from injury to the salability of property.” (Truck Insurance Exchange v. Bennett (1977) 53 Cal.App.4th 75, 84.) “To state a claim for slander of title, a plaintiff must allege ‘(1) a publication, (2) which is without privilege or justification,’ (3) which is false, and (4) which ‘causes direct and immediate pecuniary loss.’ [Citation.]” (Schep v. Capital One, N.A. (2017) 12 Cal.App.5th 1331, 1336.) Defendants primarily argue Plaintiffs do not adequately plead these elements because their allegations as to the falsity or impropriety of the assignments are insufficient and, thus, do not render the notice of default or notice of trustee’s sale improper. Second, Defendants briefly assert that Plaintiffs do not allege they acted With malice. In opposition, Plaintiffs do not clearly and directly respond to each argument. While Defendants focus on the notice of default and notice of trustee’s sale, Plaintiffs’ claim appears to be based on the assignments. It is unclear why Defendants take this approach. While the Court located one federal case in Which a court held recorded assignments could give rise to a claim of slander of title, California courts have reasoned that it is the act of defaulting, not the recordation of an assignment, that arguably causes harm in the foreclosure context. (Compare Ghuman v. Wells Fargo Bank, N.A. (E.D. Cal. 2013) 989 F.Supp.2d 994, 1000, with Saterbak, supra, 245 Cal.App.4th at p. 819.) Based on this case authority and in thq absence of an explanation or citation from Defendants, it does not appear that Plaintiffs are categorically precluded from pleading slander of title based on recorded assignments such that it is appropriate to focus on the notice of default and notice of trustee’s sale. And, it is not apparent fiom the facts pleaded why Defendants focus on the foreclosure documents as compared t0 the preceding assignments referenced in the sixth cause of action. Ultimately, because the Court finds below that Plaintiffs do not adequately allege facts showing the assignments are false publications, the Court makes these points to ensure clarity going forward. The Court agrees Plaintiffs’ allegations of false publication are insufficient. Plaintiffs allege that they are disputing the various assignments and generically characterize the assignments as containing hearsay, but they never allege a factual basis showing or supporting an 9 aORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \DOOflQUI-PLNNr-n NNNNNNNNr-‘v-tr-AHHy-dr-Ap-ip-H ONONONM-hWNHOKOOOflONMhUJNr-Io inference that any of the recorded documents-from the assignments to the notice of trustee’s sale-contain false, injurious statements. In other words, Plaintiffs’ challenge to the chain of title is asserted as conclusion without pleading a factual foundation. In Games v. Countrywide Home Loans, Inc., (201 1) 192 Cal.App.4th 1149, the court addressed similarly vague allegations made without a factual foundation and based, instead, on unspecified “information and belief.” The Games court rejected as insufficient the allegations of impropriety in deeds of trust and lack of authority to foreclose that were improperly made on information and belief and, thus, devoid of a factual basis. (Ibid) Here too, Plaintiffs’ disputation of the chain of title upon which they base their claim of slander of title, is insufficient. In light of the foregoing and because of the conclusory nature in which it is presented, Defendants’ second argument as to this cause of action, about the absence of malice, is not material for purposes of this demurrer. It is true that a statutory privilege ordinarily applies to the’l recordation of foreclosure notices, which privilege may be overcome by a showing of malice. (Schep, supra, 12 Cal.App.5th at pp. 1336-37.) Also, appellate courts have affirmed orders sustaining demurrers Without leave to amend when a judicially-noticed, unbroken chain of title shows a plaintiff cannot reasonably cure a deficient pleading by alleging malice. (Id. at pp. 1137-38.) Nevertheless, for the reasons above, these principles do not provide additional justification for sustaining the demurrer at this time, particularly given the limited briefing presented here. As Plaintiffs do not adequately allege the false publications upon which their claim is based, the demurrer to the sixth cause of action is SUSTAINED With twenty days’ leave to amend. E. Seventh Cause of Action-Quiet Title Quiet title claims are governed by Code of Civil Procedure section 761 .020, which requires a plaintiff to plead the following: (a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall 10 a ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUl-bUJNH NNNNNNNNNHr-tr-lr-‘r-Ar-‘Hr-Ap-Ap-A OONONUI-waHOKDOONO\Ul-bml\)>-Ao include both its legal description and its street address or common designation, if any. (b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession. (c) The adverse claims to the title of the plaintiff against which a determination is sought. (d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought. (é) A prayer for the determination of the title of the plaintiff against the adverse claims. Defendants argue Plaintiffs fail to state a claim for quiet title because they do not allege tender or the ability to tender the balance of their loan. In opposition, Plaintiffs argue an allegation of tender is not required when an adverse claim of title is allegedly void. Neither Defendants nor Plaintiffs address this issue with sufficient precision and legal accuracy. Courts have held “[a] borrower may not. .. quiet title against a secured lender without first paying the outstanding debt on which the mortgage or deed 0f trust is based.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 86.) A contrary rule would allow for a party to obtain a greater, unencumbered interest in property than that which was acquired through the original transaction. With that said, as discussed above, the requirement of tender depends on the nature of the claim asserted. For example, in Lueras, the court discussed the distinct circumstances in which the tender rule might not apply, such as when a challenge is made to the validity of the underlying debt. (Lueras, supra, 221 Cal.App.4th at pp. 86-87.) As with Plaintiffs’ secbnd cause of action, Defendants’ argument regarding tender is conclusory and doés not rest 0n analysis of the theory of invalidity as to each of the Defendants. In reaching this conclusion, the Court notes that Plaintiffs’ opposition is also problematic. Whether an instrument is void or voidable is a determination of law, and the Court need not accept a plaintiff’ s conclusory allegation or characterization of an alleged defect as void. (See generally Sciarratta v. US Bank, N.A. (2016) 247 Ca1.App.4th 552, 564 [distinguishing legal “ aORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOOQONUIAUJNF- NNNNNNNNNr-tr-KHr-tr-Ar-nr-Ap-tr-tp-ax OOQONUI-PWNv-‘OKOOOQONUI-PWNr-‘O concepts of void and voidable].) Also, Plaintiffs do not appear to dispute the validity of the underlying debt. And so, although not especially clear, to the extent they take the position that they may extinguish any adverse claim by the true owner of their mortgage notwithstanding their failure to satisfy their debt, they are incorrect. (Lueras, supra, 221 Cal.App.4th at pp. ‘86-87.) Ultimately, despite the flaw in Plaintiffs’ approach, Defendants do not substantiate their application of the tender rule in the first instance. Consequently, the demurrer to the seventh cause of action is OVERRULED. F. Eighth Cause of Action-Financial Elder Abuse Plaintiffs’ eighth cause of action is based on the Elder Abuse and Dependent Adult Protection Act (the “Act”). (See Welf. & Inst. Code, § 15657.) The “Act makes certain enhanced remedies available t0 a plaintiffwho proves abuse of an elder, i.e., a ‘person residing in this state, 65 years of age or older.”’ (Carter v. Prime Healthcare Paradise Valley, LLC (201 1) 198 Cal.App.4th 396, 404, quoting Welf. & Inst. Code, § 15610.27.) “In particular, a plaintiffwho proves ‘by clear and convincing evidence’ both that a defendant is liable for physical abuse, neglect or financial abuse (as these terms are defined in the Act) and that the defendant is guilty of ‘recklessness, oppression, fiaud, or malice’ in the commission of such abuse may recover attorney[’s] fees and costs.” (Carter, supra, 198 Ca1.App.4th at p. 404, quoting Welf. & Inst. Code, § 15657.) To state a claim for financial elder abuse, a plaintiff must allege: (1) he or she was an elder at the time of his or her injury; (2) the defendant took, secreted, appropriated or retained, or assisted another in taking, secreting, appropriating or retaining, real or personal property; and (3) the defendant took the property for a wrongfiJl use or With intent to defraud the elder plaintiff. (Welf. & Inst. Code, § 15610.30, subd. (a).) Taking for a wrongful use occurs “if, among other things, the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or entity knew or should have known that this conduct is likely to be harrhful to the elder. . ..” (Welf. & Inst. Code, § 15610.30, subd. (b).) These facts must be pleaded With particularity. (Carter, supra, 198 Ca1.App.4th at p. 407.) 12 fi/ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT ©00fl0NKJI$UJNH NNNNNNNNNr-‘r-‘Hr-‘r-dr-Ar-‘p-y-AH mflam-bWNHomeQm-PWNHO Plaintiffs’ do not allege any taking or misappropriation of their property-no sale occurrjcd-and do not allege facts showing a taking occurred with the requisite intent. The facts alleged in the prefatory portion of the pleading as well as in the eighth cause of action itself fall far short 0f the pleading standard above. Plaintiffs do not plead facts with particularity establishing each of the named defendants acted With the requisite intent. Their allegations are conclusory. Additionally, Plaintiffs do not allege their home was taken and do not actually appear to be basing their claim on a taking, secreting, appropriation, or retention of property. (See Stebley v. Litton Loan Servicing, LLP (201 1) 202 Ca1.App.4th 522, 527 [plaintiffs subject to foreclosure failed to state claim for elder abuse].) Instead, Plaintiffs vaguely allege that the making of false representations and failure to offer a foreclosure alternative constituted elder abuse. (FAC, 1] 135.) Such allegations do not describe a takings or misappropriation of property even in broad terms. Plaintiffs do not cite authority for the proposition that such conduct comes within the statutory definition above. Accordingly, the demurrer to the eighth cause of action is SUSTAINED with 20 days’ leave to amend. G. Ninth Cause of Action-Breach 0f Contract “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (201 1) 51 Cal.4th 81 1, 821.) Defendants argue Plaintiffs fail to state a claim for br‘each of contract because they do not allege they performed by staying current on the loan. In the ninth cause of action, Plaintiffs assert that the choice of law and severability clause in paragraph 15 of the deed of trust (FAC, Ex. 1 at p. 4.) is either a material term or condition precedent. Plaintiffs then allege that because Defendants broke the law, they breached the agreement, particularly the choice-of-law clause. This assertion is untenable. A choice-of-law clause is plainly a clause whereby the 'parties to the agreement choose the law that will be used to interpret the agreement and/or resolve disputes over the agreement. (Airs Aromatics, LLC v. CBL Data Recovery Technologies Inc. (2020) 50 Ca1.App.5th 1009, 1014.) A choice-of-law clause 13 aORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT \OOOflQUl-hwwv-A NNNNNNNNI-tr-lb-tr-Ar-Ar-tp-Hr-‘r-t gflQLh-PWND-‘OOOOQQMAWNr-‘O does not incorporate every law of the chosen jurisdiction, into the agreement such that any alleged violation of the law also constitutes an alleged breach of the agreement. Further, Plaintiffs do not allege they performed their obligations of the agreement with Defendants under any theory of the Loan agreement, and thus fail t0 state a claim for breach 0f contract. The demurrer to the ninth cause of action is SUSTAINED with 20 days’ leave to amend. Date: 23 nggpgf , 2020 w ’, I «A. Roberta S. Hayagfii Judge of the Superior Court 1 4 ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA DOWNTOWN COURTHOUSE a Em] fl 191 NORTH FIRST STREET SAN JOSE, CALIFORNIA 95113 n CIVIL DIVISION OCT 2 6 235.3 ourt S erioCr|CErk Of thetycbl Santa Clara BYup DEPUI 2 RE: Dirk Hartogs et al vs CitiMortgage lnc'. et al FBMd' ‘ k Case Number: 1QCV353062 PROOF 0F SERVICE ORDER RE: DEMURRER was delivered to the parties listed below the above entitled case as set forth in the sworn declaration below. x lf 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 or the VoicefTDD California Relay Service (800) 735-2922. DECLARATION OF SERVICE BY MAIL: I declare that l 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 October 26, 2020. CLERK OF THE COURT, by Farris Bryant, Deputy. cc: Ronald H Freshman Law Offices of Ronald H Freshman 3040 Skycrest Drive FALLBROOK CA 92028 Christopher Lee Peterson Ducan Peterson LLP 9665 Chesapeake Dr Ste 305 SAN DIEGO CA 92123 Austin Benjamin Kenney Severson & Werson One Embarcadero Center #2600 San Francisco CA 94111 CW-9027 REV 12/08/16 PROOF OF SERVICE
