Loan Pham vs. Wt Capital Lender Services IncDemurrer to Amended ComplaintCal. Super. - 4th Dist.November 25, 2015c o N N N n n B A W N o O o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREFARED ON RECYCLED PAPER FIDELITY NATIONAL LAW GROUP DONALD E. LEONHARDT (SBN 185350) 4 Executive Circle, Suite 270 Irvine, California 92614 Phone: (949) 255-9977 Fax: (949) 250-9798 Attorneys for Defendant CHICAGO TITLE COMPANY SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER LOAN PHAM, Plaintiff, \2 W T CAPITAL LENDER SERVICE INC, a California corporation, ANITA GALE, an individual; and DOES 1 THROUGH 50, Defendants. CASE NO. 30-2015-00822403 [Assigned for all purposes to the Hon. Theodore R. Howard, Department C18] DEFENDANT CHICAGO TITLE COMPANY’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF'S FIFTH AMENDED COMPLAINT; MEMORANDUM IN SUPPORT THEREOF; DECLARATION OF DONALD E. LEONHARDT IN COMPLIANCE WITH CAL. CIV. PROC. CODE § 430.41 [RESERVATION NO. 72821729] Date: July 12, 2018 Time: 1:30 p.m. Dept: C18 Action Filed: November 25, 2015 Trial Date: August 20, 2018 1 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT O o ® ~N N n n B 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER II. III. IV. TABLE OF CONTENTS INTRODUCTION ...oiiiiiiiiiiiiiiiiicniiiiienncissessssssassn ese bs esas esas 1 PLAINTIFF'S ALLEGATIONSLocomia2 LEGAL DISCUSSION .....cooririiriiniciiicisiie nisinnientesinensissansa sas saesns snes 3 A. Pham’s Third Cause of Action For Negligent Undertaking Fails to State A Cause of Action Against Chicago In the Absence ofDuty Owed by Chicago................... 3 B. Pham Cannot State A Valid Fourth Cause of Action For Intentional Intereference With Prospective Economic Advantage Against Chicago.........ccoceceininne. 6 C. Pham Cannot Plead Her Sixth Cause OfAction For Slander Of Title Against Chicago In The Absence OfAny Disparagements Published Or Any False Claims Of Interest AS TO The Property ...c..covcccirireiiieeinerecrcnincensesassass 7 D. Pham’s Seventh Cause of Action for UCL Affords No Threat of Continuing Harm by ChICAZO0 ....c.covrieiivirceriiiriierciecini ns9 1. Injunctive Relief Is Unavailable Because There Is No Threat Of Continuing Harm BY ChICAZO0.....ccvireieiiiceieeiniisieicrittersresearctseessere sens 9 2. Restitution Is Unavailable Because Chicago Took No Property Or Money From Pham ........cccovvvieiiiinniiiinencneecinerea 11 E. Any Cause of Action Asserted Against Chicago Is Barred By The Applicable Statute of Limitations ......c.c.cccvvvirieienieininininicnenns 14 F. Pham Is Not Entitled To Amend Her Pleading.........cccceoevirvinireneinneiniinncinenene 15 CONCLUSIONLoctiteseessss se sess esetsreesss sms sneer sane nne sess ess sana 15 1 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT © = D N O o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER TABLE OF AUTHORITIES CASES Bank ofthe West v. Superior Ct. (1992) 2 Cal.App.4th1254...8 Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500 ......c.ccoviiiiininininnniiineniin, 13 Blackburn v. McCoy (1934) 1 Cal.App.2d 648.......c.ooiivriiiiiiiiiiii 4 Burkett v. Griffith (1891) 90 Cal.532...8 Cal. Serv. Station & Auto. Repair Ass’n Union Oil Co. ofCal. (1991) 232 Cal.App.3d 44....9, 10 Cortez v. Purolator Air Filtration Prods., Inc. (2000) 23 Cal.4th 163... 11 Claussen v. FirstAmerican Title Guaranty Co. (1986) 186 Cal.App.3d 429.......ccooeieriivvcrinnnnns 4 Day v. AT&T Corp. (1998) 63 Cal.App.4th 325 ...covvviiiiiriciiieeec 11 Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.dth 37 .....ccoovinieirinneiiiienienen 12 Dean Witter Reynolds, Inc. v. Superior Ct. (1989) 211 Cal.App.3d 758....ccveriniiiiiiiean, 10 George v. Automobile Club ofSouthern Cal. (2011) 201 Cal.App.4th 1112 ...ooiiiiiiiininn. 13 Frantz v. Blackwell (1987) 189 CalLApp.3d 91oii13 Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134 ...occooiiiniiinniinns 2,12 Johnstone v. Panama Pac. Int. Exposition Co. (1921) 187 Cal.323...3 Means v. Southern Cal. Ry. Co. (1904) 144 Cal. 473...ans3 Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131... 13 Pappas Co. v. E. & J. Gallo Winery (ED Cal. 1985) 610 F.Supp. 662 ......ccocccenieiniiinricninnnn, 10 Pratav. Super. Ct. (2001) 91 Cal.App.4th1128...11 Rothschild v. Tyco Int'l (US), Inc. (2000) 83 Cal.App.4th 488.......cooviiiiiiiiiic 11 Schwartz v. Helms Bakery Ltd. (1967) 67 Cal.2d 232 ......ccoiiiiiiiiiiiiicicniincs 3 Southern Pac. Co. v. Dore (1917) 34 Cal.APP. 521 ..ccviviiiiniiiiiiiiiieeie s2 Shersher v. Superior Court (2007) 154 Cal.App.4th 1491coor12 Summit Financial Holding, Ltd v. Continental Lawyers Title Co. (2002) 27 Cal. 4th, 705 ........... 5 2 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT TABLE OF AUTHORITIES (Cont.) Sun Microsystems, Inc. v. Microsoft Corp. (9th Cir. 1999) 188 F.3d 1115... 10 Toomey v. Southern Pac. R. Co. (1890) 86 Cal.374...3 Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305 .....ccccvvivinivininniiicin 12 United States Liab. Ins. Co. v. Haidinger-Hayes (1970) 1 Cal.3d 586.........coccouvrieinicvicnccnnnnns 3 Vournas v. Fidelity Nat. Tit. Inc. Co. (1999) 73 Cal.App.4th 668........c.coccovrviiniiiiicnn, 4 STATUTES o e a O N Cal. Civ. Proc. Code § 337 mivmiieiiieieriiieireesienianianeense sae seess esas esee sae sae sae sss esses essesbessssssssnsnsssensons 14 10 Cal. Civ. Proc. €ode § 338(Z) .vvvvreerivrivimiiieiiniiiniree isinsnestsstains ass sb sbeebs nnn 15 11 Cal. Civ. Proc. €ode § 339...iircassissree sre sane sre senses seb beennasea 14 12 13 Cal. Civ. Proc. Code § 430.10 (£)..eiiriiiiiiiiieriniieiriniecinecasree 3 14 California Civil Code sections 2941 (B)(1) aNd (2)crevice5 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED 3 ON RECYCLED PAPER DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT G L B W N ~ N N 10 11 12 13 14 15 16 17 18 19 20 21 2 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER TO THE HONORABLE COURT, ALL PARTIES AND THEIR RESPECTIVE COUNSEL OF RECORD: PLEASE TAKE NOTICEthat, on July 12, 2018, at 1:30 p.m., in Department C18 of the above-captioned Court, located at 700 Civic Center Drive West, Santa Ana, CA 92701, before the Honorable Theodore R. Howard, Defendant CHICAGO TITLE COMPANY (“Chicago”) shall and hereby does demur to Plaintiff LOAN PHAM’s (“Pham”) Fifth Amended Complaint (“FAC”). Chicago’s Demurrer is made on the grounds that Pham’s FAC fails to state facts constituting the Third Cause of Action for Negligent Undertaking, Fourth Cause of Action for Interference with Prospective Economic Advantage, Sixth Cause of Action for Slander of Title, Seventh Cause of Action for Unfair Business Practices under Business and Professions Code section 17200 upon which relief can be granted, and is uncertain for failure to state required facts, pursuant to California Code of Civil Procedure section 430.10, subdivisions (e) and (f). This Demurrer is based upon this Notice ofDemurrer and attached Demurrer, Chicago’s accompanying Memorandum in support of the Demurrer and Declaration of Donald E. Leonhardt under California Code of Civil Procedure section 430.41, including Exhibits 1 and 2 thereto, Chicago’s concurrently-filed Request for Judicial Notice, the files and records in this action and such other evidence and documents as may be presented at the hearing on or prior to the Court’s determination of this Demurrer. Dated: May 31, 2018 FIDELITY NATIONAL LAW GROUP Donald E. Leonhardt Attorney for Defendant CHICAGO TITLE COMPANY 4 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT O O 0 N N n n B R W N e m R N N N N N N N N m m e m pe d pe ed pe d pe d pe d pe d pe a N N h h B R A W N = O N Y N N W N = O 28 DOCUMENT PREPARED ON RECYCLED PAPER DEMURRER Pursuant to the Code of Civil Procedure section 430.10 et seq., Defendant CHICAGO TITLE COMPANY (“Chicago”) shall and hereby does demur to Plaintiff LOAN PHAM’s (“Pham”) Third Cause of Action for Negligent Undertaking, Fourth Cause of Action for Interference with Prospective Economic Advantage, Sixth Cause of Action for Slander of Title and Seventh Cause of Action for Unfair Business Practices under Business and Professions Code section 17200 (“UCL”) in her Fifth Amended Complaint (“FAC”) as follows: DEMURRER TO THE THIRD CAUSE OF ACTION 1. The Third Cause of Action for Negligent Undertaking fails to state facts sufficient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10 (e). 2. The Third Cause of Action for Negligent Undertaking is uncertain in that facts giving rise to the cause of action cannot be ascertained. Cal. Civ. Proc. Code § 430.10 (f). DEMURRER TO THE FOURTH CAUSE OF ACTION 1. The Fourth Cause of Action for Interference with Prospective Economic Advantage fails to state facts sufficient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10 (e). 2. The Fourth Cause of Action for Interference with Prospective Economic Advantage is uncertain in that facts giving rise to the cause of action cannot be ascertained. Cal. Civ. Proc. Code § 430.10 (f). DEMURRER TO THE SIXTH CAUSE OF ACTION 1. The Seventh Cause of Action for Slander of Title fails to state facts sufficient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10 (e). 2. The Seventh Cause of Action for Slander of Title is uncertain in that facts giving rise to the cause of action cannot be ascertained. Cal. Civ. Proc. Code § 430.10 (f). DEMURRER TO THE SEVENTH CAUSE OF ACTION l. The Seventh Cause of Action for UCL fails to state facts sufficient to constitute a cause of action. Cal. Civ. Proc. Code § 430.10 (e). 2. The Seventh Cause of Action for UCL is uncertain in that facts giving rise to the cause of action cannot be ascertained. Cal. Civ. Proc. Code § 430.10 (f). 1 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT w n O e 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER Dated: May 31, 2018 By: 2 FIDELITY NATIONAL LAW GROUP D Donald E. Leonhardt Attorney for Defendant CHICAGO TITLE COMPANY DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT O R 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER MEMORANDUM L INTRODUCTION. In her Fifth Amended Complaint (“FAC”), Pham defies this Court’s prior rulings and pleads causes of action for which she has no probable cause. Pham seeks to hold Chicago liable as a title insurer for refinance lender SCME Mortgage Bankers, Inc.’s (“SCME”) August 2006 loan. Chicago acted as a sub-escrow for the limited purpose of paying off senior liens held by Greenpoint Mortgage Funding (“Greenpoint”) and Richard Edwards, recording a reconveyance of the Greenpoint deed of trust and recording SCME’s new deed oftrust for the new loan; the pleadings and judicially noticeable facts confirm fulfillment of these responsibilities. In the absence of any basis for a duty owed, Pham cannot plead a cause of action for negligence against Chicago. There are no escrow instructions alleged to support Chicago having any obligation to record a reconveyance of the Edward deed oftrust. In the absence of such instructions, it was Edwards’ statutory duty to do upon satisfaction of the debt, and not Chicago’s. Pham cannot plead a cause of action against Chicago for intentional interference with prospective economic advantage. She fails to plead any relationship with a specific third party, Chicago’s knowledge thereof, and Chicago interference with the relationship. Pham disregards the Court’s prior two rulings sustaining Chicago’s demurrers, with the Court ruling that “interference could only be pled, if at all, against those impeding plaintiff’s ability to sell the property .... Demurring parties [INCLUDING CHICAGO] have not engaged in any actionable interference.” (Chicago’s Request for Judicial Notice (“RIN”), Exh. B, 6/29/17 Minute Order; Exh. A. 4/6/17 Minute Order.) Pham conceded the deficiency of this claim by failing to amend this cause of action in her Third Amended Complaint and Fourth Amended Complaint. Pham cannot plead a cause of action for Chicago for slander of title because she cannot identify any false disparagement published by Chicago against hertitle interest. Indeed, she bases her action on the opposite premise - the alleged failure to record an instrument. Again, Pham disregards the Court's prior two rulings sustaining Chicago’s demurrerto this cause of action, with the Court ruling the second time that “slander of title can only run against those who ‘actually publish false statements about the property... but not the demurring parties.” (/d.) 1 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT [N S O o ~ ~ S N h h B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER Although Pham conceded the deficiency ofthis claim by failing to amend this cause of action in her Third Amended Complaint and Fourth Amended Complaint, she attempts to revive this dead cause of action in the present pleading. Pham further disregards the Court’s granting Judgment on the Pleadings as to the Third Amended Complaint and ruling sustaining Chicago’s demurrer to the Fourth Amended Complaint, both highlighting Pham’s defective Unfair Business Practices under Business and Professions Code section 17200 (“UCL”). The Court provided Pham the opportunity to “toeither specify monies paid (directly or indirectly) to Chicago to handle recordation or, if no monies paid, how Chicago came to be responsible for recordation in order to support a claim against Chicago for negligence or breach of contract.” (RIN, Exh. D, 12/7/17 Minute Order.) Like her defective pleadings, Pham fails to allege any “money or property that defendants took directly from plaintiff” or “money or property in which [plaintiff] has a vested interest.” Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1146-1147. There can be no restitution of $0.00 paid to Chicago. Pham fails to plead that she paid or that anyone on her behalf paid Chicago even $0.01 for the recording ofthe reconveyance of the Richard Edwards Deed of Trust. Alternatively, each of Pham’s causes ofaction are barred by the statutes of limitations. It is notable that Pham (a licensed broker, RIN, Exh. I),took title to the subject real property by way of a quitclaim deed (FAC, Exh. I), which “does not contain any implied covenant or warranty oftitle, freedom from encumbrances, or the grantor’s right of possession.” Miller & Starr, 3 Cal. Real Est. § 8:13 (4th Ed.); Southern Pac. Co. v. Dore (1917) 34 Cal.App. 521, 522-523. She could have obtained indemnity for this entire problem simply by purchasing title insurance when she purchased the property. Instead, Pham inappropriately seeks to have Chicago indemnify her after she voluntarily opted to not buy insurance. It is time for the Court to sustain Chicago’s Demurrer without leave to amend. IL PLAINTIFF'S ALLEGATIONS. The subject real property of this action is located at 22322 Wallingford Lane, Huntington Beach, California (the “Property”). (FAC, § 5.) In connection with purchasing the Property on or about July 7, 2003, Kenneth Fuller obtained two mortgages secured against the Property: (1) a 2 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT ~ ~ N o o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER $600,000.00 loan from Greenpoint secured by a first deed of trust; and (2) a $200,000.00 seller carry-back loan from Richard Edwards secured by a Deed of Trust and Assignment of Rents. (RIN, Exh. E; FAC, § 17 and Exhibit C.) In August 2006, Fuller refinanced the Property by obtaining a $1 million mortgage from SCME. (FAC, §22; RIN, Exh. F.) In connection with the refinance, both prior mortgages held by Greenpoint and Edwards were paid off in the respective amounts of $601,922.30 and $150,000.00. (FAC, 922 and Exh. F.) “As part ofthis refinancing, Edwards executed a ‘Substitution of Trustee and Full Reconveyance’ on August 18, 2006. It was never recorded, even though it was notarized.” (FAC, 423 and Exh. G.) SCME’s new deed oftrust recorded on August 26, 2006. (RIN, Exh. G.) On September 14, 2006, a Reconveyance of the Greenpoint deed oftrust was recorded in connection with the refinance. (RIN, Exh. H.) III. LEGAL DISCUSSION. A demurrer is appropriate when the plaintiff fails to state sufficient facts to constitute a cause of action and when given averments are uncertain. Cal. Civ. Proc. Code §430.10(e) and (f). A. Pham’s Third Cause Of Action For Negligent Undertaking Fails To State A Cause Of Action Against Chicago In The Absence Of Duty Owed By Chicago. Pham has not pleaded, and she cannot plead, the requisite elements of negligence against Chicago, especially in light of the utter absence of any duty owed to Pham by Chicago. Actionable negligence requires the following elements: (1) a legal duty to use due care; (2) a breach ofthat duty; and (3) the breach as the proximate or legal cause of the resulting injury. See Toomey v. Southern Pac. R. Co. (1890) 86 Cal. 374, 381; Means v. Southern Cal. Ry. Co. (1904) 144 Cal. 473, 478; Johnstone v. Panama Pac. Int. Exposition Co. (1921) 187 Cal. 323, 326; Schwartz v. Helms Bakery Ltd. (1967) 67 Cal.2d 232, 241 n. 9; United States Liab. Ins. Co. v. Haidinger-Hayes (1970) 1 Cal.3d 586, 594. Chicago was a title insurer in an August 2006 refinance transaction that did not include Pham as an insured or party. As title insurer, Chicago only owed contractual duties to indemnify its insured SCME under certain conditions specified in a title insurance policy. Pham was a complete stranger to this transaction and contractual relationship. To the extent that 3 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT © N N N n n B R W N O o 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER Chicago undertook duties as a sub-escrow, to pay off the existing mortgages secured against the Property, those duties would be defined by express escrow instructions, and would be limited to the parties to the escrow. Under ordinary circumstances, an escrow holder owes duties only to the parties to the escrow, not to third parties. Summit Financial Holding, Ltd v. Continental Lawyers Title Co. (2002) 27 Cal. 4th, 705, 711. There are no allegations in the FAC that Pham was a party to an escrow with Chicago. There are no oral or written escrow instructions alleged in the FAC creatinganyduties for Chicago to Pham. For over eighty years, California courts have held that the duty of an escrow holder is limited to complying strictly with the parties’ written instructions and exercising reasonable skill and diligence in carrying out those instructions. Blackburn v. McCoy (1934) 1 Cal.App.2d 648, 655; Vournas v. Fidelity Nat. Tit. Inc. Co. (1999) 73 Cal.App.4th 668, 674. In Summit Financial Holding, Ltd., supra, 27 Cal.4th at 711, the California Supreme Court reaffirmed these long- standing principles in discussing the duties of an escrow holder, and held that while “an escrow holder must comply strictly with the instructions of the parties.... an escrow holder’s obligations are ‘limited to faithful compliance with [the depositors’] instructions.”” See also, Claussen v. FirstAmerican Title Guaranty Co. (1986) 186 Cal.App.3d 429, 435-436. The escrow instructions to the escrow holder govern the rights and liabilities of the parties and the escrow holder. 3 Miller & Starr, Cal. Real Est. § 6:12 (3d Ed.) The parties are only entitled to the performance that is provided in their instructions and the escrow holderis only obligated to perform in accordance with instructions from the parties to the escrow. Summit Financial Holding, Ltd., supra, 27 Cal.4th at 711; Amen, supra, 58 Cal.2d at 531-532; Shreeves v. Pearson, 194 Cal. 699, 711-712, 230 P. 448 (1924); Markowitz v. Fidelity Nat. Title Co., 142 Cal.App.4th 508, 526. Pham has not pleaded and cannot plead any facts establishing the existence of a legal duty owed by Chicago. She fails to attach or recite verbatim any alleged escrow instruction that could have been breached and proximately caused her damage. In contrast, Pham attempts to muddy the waters by alleging a duty without any basis: “Chicago and Legends also undertook an {sic] assumed the responsibility to then record a FULL RECONVEYANCE of the Edwards/Gale deed of trust. See exhibit K. Chicago and Legends recklessly and negligently breached their duty and 4 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT H O W N D © 0 1 S y W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER failed to record the full reconveyance, causing damage and loss to plaintiff.” There are no allegations, however, supporting the creation ofthis purported duty owed by Chicago to record the reconveyance. Indeed, Exhibit K to the FAC is only a payoff demand issued by Legends Escrow to Richard Edwards, with some handwritten notes seemingly as to the payoff amount. There is nothing in this document reflecting an agreement by Chicago to undertake a duty to anyone (including Pham) to record a reconveyance. In contrast, California Civil Code sections 2941(b)(1) and (2) expressly enumerate that it is the duty of the trustee and (ultimately, if the trustee fails to do so) the beneficiary (and not the title insurer) to record a full reconveyance: “(b)(1) Within 30 calendar days after the obligation secured by any deed of trust has been satisfied, the beneficiary or the assignee of the beneficiary shall execute and deliver to the trustee the original note, deed oftrust, request for a full reconveyance, and other documents as may be necessary to reconvey, or cause to be reconveyed, the deed oftrust. (A) The trustee shall execute the full reconveyance and shall record or cause it to be recorded in the office of the county recorder in which the deed of trust is recorded within 21 calendar days after receipt by the trustee of the original note, deed of trust, request for a full reconveyance, . .. * kk (2) If the trustee has failed to execute and record, or cause to be recorded, the full reconveyance within 60 calendar days ofsatisfaction of the obligation, the beneficiary, upon receipt of a written request by the trustor or trustor’s heirs, successor in interest, agent, or assignee, shall execute and acknowledge a document pursuant to Section 2934a substituting itself or another as trustee and issue a full reconveyance.” Pham ignores that, in the absence of an escrow instruction, the legal duty of reconveying the Edwards deed oftrust lies with Edwards and his successor, and not Chicago. To the extent that Pham seeks liability for failure to record a reconveyance of the Greeenpoint deed of trust (FAC, 49 8 and 10), a reconveyance of the Greenpoint deed oftrust recorded on September 14, 2006 in the course ofthe refinance transaction. (RIN, Exh. H.) Pham has had six pleading attempts and discovery (including the deposition of Chicago’s PMK) to ascertain and assert facts supporting any duty Chicago owed her. The pleading, however,is devoid ofthe basis of any duty owed --- by statute, written instruction or oral 5 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT 5 ~ ~ O N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER instruction - wherein title insurer Chicago was obligated to then unknown party (Pham) to record a reconveyance of the Edwards deed of trust. In the absence of any express duty undertaken by Chicago to Pham, there can be no negligence as a matter of law. B. Pham Cannot State A Valid Fourth Cause Of Action For Intentional Interference With Prospective Economic Advantage Against Chicago. The elements of the tort of intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff; (2) knowledge by the defendant of the existence ofthe relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption ofthe relationship; and (5) damagesto the plaintiff proximately caused by the acts of the defendant. Blank, supra, 39 Cal. 3d at 330; Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 378; Youst v. Longo (1987) 43 Cal.3d 64, 71. Pham’s Fourth Cause of Action for Intentional Interference is fundamentally defective for several reasons. First, she fails to identify any then existing relationship with a specific third party when the supposed interference took place in 2006 - a necessary pleading element. She fails to identify an actual third party “buyer ready to purchase [the Property] at a minimum of $1.1 million.” (FAC, J 42.) Second, although Pham pleads that Chicago knew ofthis relationship, she fails to explain how Chicago new ofthis relationship between Pham and the unidentified third party in 2006, before Pham was ever involved in the Property. Third, Pham fails to plead that either Chicago intended to disrupt a known third-party relationship or that it should have known its actions would do so. Each ofthese elements is legally impossible because Chicago purportedly failed to record the reconveyance of the Edwards deed oftrust in August 2006, well-before Pham acquired her title interest in the subject real property in July 2013 and formed a business relationship to the unidentified buyer. It would be impossible for Chicago, in 2006, to know of a business relationship that did not yet exist for another seven years, and also for Chicago to intend or know that its actions would affect/disrupt a specific, then non-existent relationship. Indeed, Pham bases this cause of action on the wrongdoing of Gail, WT Capital and Placer and defendants serving a DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT ~ ~ Ww W E E ) \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER notice of default. Chicago is not one ofthese parties. Chicago is not identified anywhere in the Notice of Default. (FAC, Exh. J.) This is not the first time Pham has failed to assert a viable cause of action for intentional interference against Chicago. The Court twice ruled confirming Pham’s inability to plead this cause of action against Chicago. On April 6, 2017, the Court sustained Chicago’s demurrer to this cause of action in the First Amended Complaint. (RIN, Exh. A, 4/6/17 Minute Order.) On June 29, 2017, the Court again sustained Chicago’s demurer to the Second Amended Complaint, as follows: “The 4th and 5th causes of action for interference could only be pled,if at all, against those impeding plaintiff’s ability to sell the property - which are the same Anita Gale, Richard Edwards, Kenneth Fuller, WT Capital Lender Services and Placer Title Company. Demurring parties [including Chicago] have not engaged in any actionable interference.” (RJN, Exh. B, 6/19/17 Minute Order.) It is key to note that the Court’s June 29 ruling expressly stated that this was not a viable cause of action against Chicago. Pham did not attemptto re-assert this cause of action against Chicago in the Third Amended Complaint or Fourth Amended Complaint. Plaintiff’s refusal to amend is deemed an admission that she stated the case as strongly as she can and there are no more facts that could be alleged to cure the defect. See Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091. Despite having failed to plead this cause of action twice after the Court’s instruction that this is not a proper cause of action against Chicago, Pham now seeks to re-animate this dead cause of action with no new facts, Pham’s assertion of this cause of action lacks any basis in facts or law, and is frivolous. The cause ofaction is incapable of being pleaded. The Court should properly sustain Chicago’s Demurrer without leave to amend. C. Pham Cannot Plead Her Sixth Cause Of Action For Slander Of Title Against Chicago In The Absence Of Any Disparagements Published Or Any False Claims Of Interest As To The Property. The tort of slander oftitle consists of false and unprivileged disparagement ofthe title to real or personal property. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008). To plead a cause of action, a plaintiff must allege the following elements: (1) the plaintiff should allege ownership of 7 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT N o © O w 1 S N n n B W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER described property in the usual general terms; (2) the defendant’s false oral or written disparagement,or a false claim of an interest; and (3) the particular financial loss caused by the disparagement. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008); Burkett v. Griffith (1891) 90 Cal. 532, 537; see also Truck Ins. Exch. v. Bennett (1997) 53 Cal.App.4th 75, 84 Pham cannot, as a matter of law, state a cause of action against Chicago for slander oftitle because she cannot identify any false disparagement published by Chicago against hertitle interest. The sole disparaging publication identified by Pham’s FAC is a notice of default allegedly “filed” byall defendants (FAC, 53), but the actual Notice of Default and Election to Sell Under Deed of Trust attached as Exhibit J contradicts this very allegation. Thereis absolutely nothing in the Notice of Default and Election to Sell Under Deed of Trust reflecting that Chicago had anything to do with this instrument. Chicago is not identified as the beneficiary (Anita Gale) or trustee (WT Capital Lending Services) to the deed oftrust, or even the party requesting the recording (Placer Title Company). This is consistent with Pham’s failure to assert any adversetitle interest of Chicago’s against the Property. There is simply no allegation that Chicago made any disparagement or false claim of interest. In addition, Pham fails to assert any financial loss proximately caused by Chicago’s (unalleged) disparagementor false claim. Like Pham’s Fourth Cause of Action for Intentional Interference, The Court twice rejected Pham’s ability to plead slander oftitle against Chicago. On April 6, 2017, the Court sustained Chicago’s demurrerto this cause of action in the First Amended Complaint. (RIN, Exh. A, 4/6/17 Minute Order.) On June 29, 2017, the Court again sustained Chicago’s demurerto the Second Amended Complaint, as follows: “The 6th cause of action for slander oftitle can only run against those who actually publish false statements about the property... but not the demurring parties.” (RJN, Exh. B, 6/19/17 Minute Order.) After the Court expressly stated that slander oftitle was not a viable cause of action against Chicago, Pham did not attempt to re-assert slander oftitle against Chicago in the Third Amended Complaint or Fourth Amended Complaint. Plaintiffs refusal to amend is deemed an admission that she stated the case as strongly as she can and there are no more facts that could be alleged to cure the defect. See Reynolds, supra, 36 Cal.4th at 1091. 8 DEFENDANT'S DEMURRER TO FIFTH AMENDED COMPLAINT ~ ~ N h B e W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAFER Pham now seeks to resurrect this fundamentally defective cause of action with no new facts. Pham’s assertion ofthis cause of action lacks any basisin facts or law. The cause of action is incapable of being pleaded. Chicago’s Demurrer should be sustained without leave to amend. D. Pham’s Seventh Cause Of Action For UCL Affords No Relief Against Chicago. Two remedies are available to private litigants bringing claims under the UCL: injunction or restitution. William L. Stern, Bus. & Prof. Code Section 17200 Prac., § 8:2 (2017 West).! Section 17203 authorizes courts to make: “such orders or judgments ... as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person ... any money or property ... which may have been acquired by means of such unfair competition.” Both of these remedies are unavailable to Pham against Chicago. “[D]amages are not available under section 17203.” Rather, “[t]he only nonpunitive monetary relief available under the Unfair Business Practices Act is the disgorgement of money that has been wrongfully obtained or, in the language ofthe statute, an order ‘restor{ing] ... money ... which may have been acquired by means of... unfair competition.”” Bank ofthe West v. Superior Ct. (1992) 2 Cal.App.4th 1254, 1266. Any restitutionary disgorgementis limited to actual money or property a defendant took directly from the plaintiff (or to which plaintiff has a vested interest in), and not the defendant’s profits or the plaintiff’s damages (in the form of unrealized benefits or other consequential injury). 1. Injunctive Relief Is Unavailable Because There Is No Threat Of Continuing Harm By Chicago. “[In]junctive relief will be denied if at the time of the order or judgment, there is no reasonable probability that the past acts complained of will recur.” California Service Station & Auto. Repair Ass’nv. Union Oil Co. ofCal. (1991) 232 Cal.App.3d 44, 57. Injunctive relief is !' As reflected in paragraphs 60 and 61, Pham is under the mistaken assumption that she can recover Chicago’s profits and obtain reformation, declaratory relief and/or rescission, equitable indemnity, “defense and protection,” and full indemnity equitable or otherwise. These are all inappropriate and unavailable remedies under the UCL, forcing Chicago to concurrently file a Motion to Strike such matter. 9 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER generally denied absent some showing that the past wrongdoing may recur. See Sun Microsystems, Inc. v. Microsoft Corp. (9th Cir. 1999) 188 F.3d 1115, 1123; Pappas Co. v. E. & J. Gallo Winery (ED Cal. 1985) 610 F.Supp. 662, 672 (“plaintiff cannot receive an injunction for past conduct unless he showsthat the conduct will probably recur”; continuing activity is required in order for injunctive relief to be entered under § 17200); see Dean Witter Reynolds, Inc. v. Superior Ct. (1989) 211 Cal.App.3d 758, 774 (no injunction can issue if the offending business practice is discontinued and not likely to recur). The requested injunction must seek to enjoin an unfair trade practice and not some other wrong ancillary to the UCL violation. Stern, Bus. & Prof. Code Section 17200 Prac., § 8:32. In this case, injunctive relief is unavailable to Pham because there is no threat that the allegedly wrongful act - Chicago’s alleged failure to record a reconveyance of the Edwards deed of trust or failure to confirm that the deed oftrust was satisfied - will continue. See Cal. Serv. Station & Auto. Repair Ass'n Union Oil Co. ofCal. (1991) 232 Cal.App.3d 44, 57. For an injunction to issue, Pham must allege that Chicago has in its possession the original, executed reconveyance, but continuesto fail to record it or refuses to record it. There is no allegation anywhere in the FAC that Chicago even has in its possession the original, executed Reconveyance of the Edwards deed oftrust necessary for recording. (See generally FAC.) There is also no threat that Chicago can continueto fail to confirm that the Edwards deed of trust was satisfied. It is also impossible for a Court to issue a prohibitive injunction to prevent such a threat of alleged harm - for the Court to enjoin Chicago or other defendants to stop failing to record a reconveyance. The Court previously agreed with Chicago in ruling that Pham was notentitled to injunctiverelief in connection with her UCL cause ofaction: “Since title companies rarely take the lead on recording reconveyances, it seemsthat this was a one-time oversight. Moreover, an injunction cannot ordinarily be entered to prevent a breach of contract (see CCP §526(b)(5)), and here plaintiff alleges that Chicago agreed (i.e., contract) to handle the recordation even though it was notits job. Based on the allegations contained in the operative pleading, plaintiff would not be entitled to any injunctive relief.” (Chicago’s RIN, Exh. D, 12/7/17 Minute Order.) 10 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT = © 0 3 S N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER As discussed above, any such injunctive relief also contradicts the primary legal obligation of the trustee and ultimately the beneficiary to the Edwards deed of trust to record a reconveyance following the satisfaction or pay off of the loan secured by the deed of trust. Cal. Civ. Code § 2941(b)(1) and (2). 2. Restitution Is Unavailable Because Chicago Took No Property Or Money From Pham. In the absence of any new allegations that Chicago directly received Pham’s money or property or that to which Pham has a vested interest, Pham is not entitled to restitution as a matter of law. In Cortez v. Purolator Air Filtration Prods., Inc. (2000) 23 Cal.4th 163, the Supreme Court placed two limitations on a trial court’s power to fashion restitution: (1) “the trial court may not make an order for disgorgement of all benefits defendant may have received .... It may only orderrestitution to persons from whom money or property has been unfairly or unlawfully obtained”; and (2) restitution is not mandatory. Id. at 172, 180. The California Supreme Court in Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, construed the language of section 17203 of the UCL, focusing on the word “restore” set forth in the statutory language: “We think it significant that the Legislature chose to use the word ‘restore’ in labeling that which an offending defendant may be ordered to do. The verb, as defined by the Oxford English Dictionary, means ‘[t]o give back, to make return or restitution of (anything previously taken away or lost)’ .... Taken in the context of the statuory scheme, the definition suggests that section 17203 only operates to return to a person those measurable amounts which are wrongfully taken by means of an unfair business practice.” Id. at 338- 339. “[T]he notion of restoring something to a victim of unfair competition includes two separate components. The offending party must have obtained something to which it was not entitled and the victim must have given up something which he or she was entitled to keep.” Day, supra, 63 Cal.App.4th at 340. “Someone who did not pay the allegedly offensive charges may not be able to recover “restitution.” See Prata v. Superior Ct. (2001) 91 Cal.App.4th 1128, 1139; Rothschild v. Tyco Int’l (US), Inc. (2000) 83 Cal.App.4th 488, 494. Restitution is limited 11 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT © N a A N \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER to either “money or property that defendants took directly from plaintiff” or “money or property in which [plaintiff] has a vested interest.” Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1146-1147. In Korea Supply Co., plaintiff (a business representing manufacturers of military equipment) alleged that defendants illegally induced a foreign government to award a contract of sale to a company other than the one represented by plaintiff, and sought disgorgement of profits as a remedy. Although plaintiff described its requested remedy as restitution, that term did not accurately describe the relief sought, since plaintiff had neither an ownership interest nor a vested interest in the money it sought to recover. Since the recovery requested could not be traced to any particular funds in possession of one of the defendants, it was not the proper. The remedy sought by plaintiff closely resembled a claim for damages, which is not permitted under the UCL. Allowing such a remedy would have enabled plaintiff to obtain tort damages without proving the elements of liability under its traditional tort claim for intentional interference with prospective economic advantage, and would have exposed defendants to multiple suits and the risk of duplicative liability without the traditional limitations on standing, thereby raising due process concerns. Id. The Korea Supply Co. case is key in that restitution does not give backany money the defendant received, but only that amount which belonged to the plaintiff. In previously granting Chicago’s Motion for Judgment on the Pleadings and sustaining Chicago’s last Demurrer to the Fouth Amended Complaint, the Court specifically pointed out Pham’s failure to expressly allege that Chicago took money from her (or money to which she had a vested interest) to seek restitution under the UCL: If Chicago received funds to handle recordation of reconveyances, and failed to do the work, plaintiff is entitled to restitution in the amount paid to Chicago. See Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1340-1341; Shersher v. Superior Court (2007) 154 Cal.App.4th 1491, 1498. The problem here is that plaintiff has not expressly stated that Chicago was paid to do the recordation, or how it was that Chicago came to be involved at all in the process. (Chicago’s RIN, Exh. D, 12/7/17 Minute Order; Exh. E, 3/1/17 Minute Order.) Pham’s money or property cannot be restored by restitution unless she actually paid Chicago something in connection with the 2006 SCME loan transaction, when her allegations 12 DEFENDANTS DEMURRER TO FIFTH AMENDED COMPLAINT i = ~ ~ W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER show that she had nothing to do with the subject property or the loan. Pham tries to muddy the waters by making a vague allegation that she seeksrestitution of any money paid to Chicago, but fails to allege the existence of even a cent being paid to Chicago by her or on her behalf. One cannot seek restitution ofmoney taken when $0.00 was paid. This is the same problem the Court found with the Third Amended Complaint and Fourth Amended Complaint - no express allegation that Chicago was paid by Pham or on her behalfto do the recordings. The existence of any such payment by Pham is contradicted by Exhibit F to the FAC; the facts set forth in the Escrow Receipt and Disbursement Authorization for the loan show that no one paid Chicago any reconveyance or recording fee in connection with the payoff of the Edwards loan and Deed of Trust.? Facts appearing in exhibits attached to the complaint are given precedence over inconsistent allegations in the complaint. Moran v. Prime Healthcare Mgmt., Inc. (2016), 3 Cal.App.5th 1131, 1145-1146 (complaint's allegations re anticipated hospital charges contradicted by attached agreement, signed by plaintiff,listing hospital’s charges). Considering the “face of the complaint” for purposes of a Demurrer includes matters shown in exhibits attached to the complaint and incorporated by reference. Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 (“we rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegationsas to the legal effect of the exhibits”) ; George v. Automobile Club of Southern Cal. (2011) 201 Cal.App.4th 1112, 1130 (“trial court was not required to credit plaintiffs allegations that extrinsic evidence ‘renders the insurance contract at issue here ambiguous’where language of policy attached to complaint showed otherwise). Here, the Court must give precedence to facts shown in the Escrow Receipt and Disbursement Authorization (showing no money paid to Chicago for recording a reconveyance of the Richard Edward Deed of Trust) and treat Pham’s purposefully vague allegation (seeking restitution of any monies paid) as surplusage. 2 Moreover, Legends Escrow (and not Pham) paid Chicago’s fees in connection with Fuller’s 2006 loan refinance. 13 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER The Court granted Pham leave to amend to “specify monies paid (directly or indirectly to Chicago” (Id.), and Pham took the deposition of Chicago (prior to the filing of the FAC) but there are no additional allegations in the FAC which specify any monies (or property) directly received by Chicago or indirectly received by Chicago and to which Pham has a vested interest. Pham failed to amend the pleading as specifically directed by the Court to cure this defect. Absent money or property taken from Pham by Chicago (or to which Pham hasa vested interest), there is nothing to “restore” to Pham under section 17203, and restitution is unavailable as a matter of law. E. Any Cause Of Action Asserted Against Chicago Is Barred By The Applicable Statute Of Limitations. Assuming arguendo that Pham can facially plead the elements to these causes of action against Chicago, they are time barred. By Pham’s own allegations, Chicago as part of the collective “defendants” failed to act in August 2006: ° “defendant(s) and each ofthem had a duty to, and/or undertook the duty and responsibility of properly clearing title to the subject property,, including but not limited to proper inspection oftitle, chain oftitle, recordings and recording of the full reconveyance which occurred in August 2006. ... Defendants, including, but not limited to Escrow Legends were required but failed to record full reconveyance from Greenpoint and from Edwards, when the property was refinanced in August 2006.” (FAC, qY 8-10); and ® “In or about August 2006, Defendants and each of them, including Chicago Title and Escrow Legends, had a duty to, but improperly, recklessly, wrongfully, carelessly and/or negligently failed to discover and failed to record the full reconveyance, of the June 12, 2003 deed of trust(s).” (FAC, gy 10.) None ofthe applicable statutes of limitation for the causes of action asserted against Chicago exceed four years. If the basis for Pham’s negligence claim is a written escrow instruction,the statute of limitations is four years. Cal. Civ. Proc. § 339. If the basis for the cause of action is an oral instruction, the statute of limitations is two years. Cal. Civ. Proc. § 337. The statute of limitations for interference with prospective economic advantage is two years. Cal. 14 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT \ O © ~ ~ o N w n B A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER Code Civ. Proc. § 339(1); 3 Witkin, Cal. Proc., 5" Actions, §§ 649, 650. Thestatute of limitations for slander oftitle is three years. Cal. Code Civ. Proc. §338(g); 3 Witkin, Cal. Proc., 5% Actions, § 618. The statute of limitations for actions brought under California Business and Professions Code section 17200 is “four yearsafter the cause of action accrued.” Cal. Bus. & Prof. Code § 17208. Taking Pham’s pleadings as true, the applicable statute of limitations to every cause of action that Pham asserts against Chicago expired no later than four yearsafter the failure to record the reconveyance of the Edwards deed oftrust - or August 2010. Pham alleges no facts supporting any tolling of the statutes of limitations. The discovery rule is also inapplicable, because any party owed a duty to have a reconveyance of the Edward deed of trust recorded had reason to discovery the absence of a reconveyance following the close of the SCME loan in August 2006. Following the close of the transaction, the public records in the County Recorder were available to all parties to discover the existence or non-existence of any reconveyance of the Edwards deed oftrust. As such, the statute of limitations expired over six years ago as to each and every cause of action for which Pham seeks relief against Chicago. F. Pham Is Not Entitled To Amend Her Pleading. Pham has now had had SIX attempts at pleading a case. Additional pleading attempts are inappropriate and the Demurrer should be sustained without leave to amend. IV. CONCLUSION. Chicago respectfully requests that the Court sustain its Demurrer to Pham’s FAC without leave to amend, and enter judgmentin favor of Chicago. Dated: May 31, 2018 FIDELITY NATIONAL LAW GROUP By: Donald E. Leonhardt Attorney for Defendant CHICAGO TITLE COMPANY 15 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT O O 0 N N O N n b 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER DECLARATION OF DONALD E. LEONHARDT 1. I am a licensed member ofthe California State Bar and am admitted to practice before this Court, and a trial attorney with Fidelity National Law Group. I am the attorney of record for Defendant Chicago Title Company (“Chicago”) in the above-captioned action. The following facts are ofmy own personal knowledge and, except as stated otherwise,if called as a witness, I could and would testify competently thereto. 2. I makethis declaration in support Chicago’s Demurrer to Plaintiff Loan Pham’s (“Pham”) Fifth Amended Complaint (“FAC”) pursuant to California Code of Civil Procedure sections 430.41. 3. On May 10, 2018, Pham filed and electronically served her FAC. Prior to May 3, 2018, Pham’s counsel circulated a copy ofthe pleading. 4. On May 4, 2018,after reviewing the FAC, I promptly sent her attorneys Timothy Donahue and Timothy Lam an email requesting a telephonic meet and confer as to Chicago’s contemplated demurrer and motion to strike portions of Pham’s FAC, and included some points for discussion supporting Chicago’s request that Pham dismiss both her Third Cause of Action for Negligent Undertaking, Fourth Cause of Action for Intentional Interference with Prospective Economic Advantage, Sixth Cause of Action for Slander of Title and Seventh Cause of Action for Unfair Business Practices under Business and Professions Code section 17200 (“UCL”). A true and correct copy of my initial May 4, 2018 email to Messrs. Donahue and Lam is attached hereto as Exhibit 1. 4. On the morning ofMay 10, 2018, I conducted a telephone conference with Mr. Donahue pursuant to Code of Civil Procedure section 430.41. Mr. Donahue acknowledged receiving my May 4, 2018 email setting forth Chicago’s proposed demurrers and the groundsfor a motion to strike inappropriate material from the pleading. He refused to concede to any of Chicago’s issues. He agreed that the parties had sufficiently met and conferred and that Chicago could proceed with its demurrer and motion to strike. To memorialize our conference, I sent Mr. Donahue a confirming email on May 10, following our call. A true and correct copy of my May 10, 2018 email to Mr. Donahue is attached hereto as Exhibit 2. 16 DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT I declare under penalty of perjury under the laws ofthe State of California that the foregoing is true and correct. Executed on this 31% day of May, 2018,at Irvine, California. WLC DONALD E. LEONHARDT S O W N D ~ ~ Y W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED 17 ON RECYCLED PAPER DEFENDANT’S DEMURRER TO FIFTH AMENDED COMPLAINT EXHIBIT “17 Leonhardt, Donald From: Leonhardt, Donald Sent: Friday, May 4, 2018 11:09 AM To: Timothy Donahue; Timothy T. Lam; tdonahue374@gmail.com Cc: Jeffrey Kagan; Cristina Ramirez; Hyatt, Robert; Juan Dotson; Elizabeth C. Farrell; Elizabeth Treckler; John Upton; smh@hannafirm.com; Fickel, Ashley; Brandon Reif; Dias, Tom Subject: RE: Meet and confer re fifth amended complaint: Pham vs. WT Capital Importance: High Dear Messrs. Donahue and Lam, Please let me know when you are available to meet and confer concerning Chicago Title Company's anticipated Demurrer and Motion to Strike as to Pham’s Fifth Amended Complaint. We have not yet been served with the actual pleading but to the extent it follows the rejected Fifth Amended Complaint, we will be filing a Demurrer and Motion to Strike. In addition, we request that you stipulate to continue the currently set August 20, 2018 Trial and related dates {as noted in my oral argument yesterday) since the pleadings are still not set {and there is currently no operative complaint) and there is insufficient time for any party to have a motion for summary judgment/adjudication heard. To facilitate the meet and confer as to the Demurrer, | have outlined some issues to be discussed in our conference: DEMURRER Third Cause of Action for Negligent Undertaking/Negligence Plaintiff cannot plead a cause of action based upon negligence against Chicago for multiple reasons: lack of standing, failure to plead a duty owed and the statute of limitations. Actionable negligence is traditionally regarded as involving the following: (1) a legal duty to use due care; (2) a breach of that duty; and (3) the breach as the proximate or legal cause of the resulting injury. See Toomey v. Southern Pac. R. Co. (1890) 86 Cal. 374, 381; Means v. Southern Cal. Ry. Co. (1904) 144 Cal. 473, 478; Johnstone v. Panama Pac. Int. Exposition Co. {1921} 187 Cal. 323, 326; Schwartz v. Helms Bakery Ltd. (1967) 67 Cal.2d 232, 241 n. 9; United States Liab. Ins. Co. v. Haidinger-Hayes (1970) 1 Cal.3d 586, 594. For more than eighty years, California courts have held that the duty of an escrow holderis limited to complying strictly with the parties’ written instructions and exercising reasonable skill and diligence in carrying out those instructions. Blackburn v. McCoy (1934) 1 Cal.App.2d 648, 655; Vournas v. Fidelity Nat. Tit. Inc. Co. (1999) 73 Cal.App.4th 668, 674. The parties are only entitled to the performance that is provided in their instructions and the escrow holderis only obligated to perform in accordance with instructions from the parties to the escrow. Summit Financial Holding, Ltd., supra, 27 Cal.4th at 711; Amen, supra, 58 Cal.2d at 531-532; Shreeves v. Pearson, 194 Cal. 699, 711-712, 230 P. 448 (1924); Markowitz v. Fidelity Nat. Title Co., 142 Cal.App.4th 508, 526. Pham has no standing to assert a negligence cause of action against Chicago. Chicago never undertook any escrow relationship with Pham. Indeed, she was a stranger to the August 2006 refinance transaction, and Chicago’s underwriting of a title insurance policy to SCME. Pham has not pleaded and cannot plead any facts establishing a legal duty owed by Chicago. Under ordinary circumstances, an escrow holder owes duties only to the parties to the escrow, not to third parties. Summit Financial Holding, Ltd v. Continental Lawyers Title Co. (2002) 27 Cal. 4th, 705, 711. Pham was never a party to an escrow with Chicago. Plaintiff has not and cannot plead the basis of any duty owed in the form of oral or written escrow instructions. Indeed, Chicago was not the escrow holder in the August 2006 refinance transaction. In addition, any breach of duty (assuming one existed) occurred in August 2006. The statute of limitations long expired years before Pham filed her action in 2015. Finally, Pham is not authorized to assert a new cause of action for negligence. When a demurreris sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015. Fourth Cause of Action for Interference with Prospective Economic Advantage “The elements of the tort of intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff; (2) knowledge by the defendant ofthe existence of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) damages to the plaintiff proximately caused by the acts of the defendant. Blank v. Kirwan (1985) 39 Cal.3d 311, 330 (citing Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827); Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 378; Youst v. Longo (1987) 43 Cal.3d 64, 71. Pham is unable to plead a cause of action for interference for several reasons. First, Pham fails to identify any relationship with a specific third party - a necessary pleading element. Second, Pham fails to explain how Chicago new of this unalleged relationship before its existence. Third, Pham fails to plead that either Chicago intended to disrupt a known third-party relationship or that it should have known its actions would do so. Each of these elements is legally impossible because Chicago’s purportedly failure to record the reconveyance of the Edwards Deed of Trust in August 2006, well-before Pham acquired hertitle interest in the subject real property in July 2013 and formed a business relationship to the unidentified buyer thereafter. It would be impossible for Chicago, in 2006, knowing of a business relationship that did not yet exist for another seven years and also for Chicago to intend or know its actions would affect/disrupt a specific, then non-existent relationship. On 4/6/17, the Court sustained Chicago's prior demurrer to this cause of action in the First Amended Complaint. On 6/29/17, the Court again sustained Chicago’s demurer to the Second Amended Complaint, as follows: “The 4th and 5th causes of action for interference could only be pled, if at all, against those impeding plaintiff's ability to sell the property - which are the same Anita Gale, Richard Edwards, Kenneth Fuller, WT Capital Lender Services and Placer Title Company. Demurring parties [INCLUDING CHICAGO] have not engaged in any actionable interference.” The Court has already spoken as to Pham’s ability to plead this cause of action against Chicago in the negative. In addition, Pham did not attempt to re-assert this cause of action against Chicago in the Third or Fourth Amended Complaint. Plaintiffs' refusal to amend is deemed an admission that they have stated the case as strongly as they can and there are no more facts that could be alleged to cure the defect. Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091. Finally, Pham is not authorized to assert a new cause of action for interference. When a demurreris sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick, supra, 167 Cal.App.4th at 1015. Sixth Cause of Action for Slander of Title The tort of slander oftitle consists of false and unprivileged disparagement of the title to real or personal property. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008). To plead a cause of action, a plaintiff must allege the following elements: (1) the plaintiff should allege ownership of described property in the usual general terms; (2) the defendant'sfalse oral or written disparagement, or a false claim of an interest; and (3) the particular financial loss caused by the disparagement. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008); Burkett v. Griffith (1891) 90 Cal. 532, 537; see also Truck Ins. Exch. v. Bennett (1997) 53 Cal.App.4th 75, 84. Pham cannot, as a matter of law, state a cause of action against Chicago for slander of title because for at least three reasons. First, she cannot identify any false disparagement published by Chicago against hertitle interest. On 4/6/17, 2 the Court agreed in sustaining Chicago’s Demurrerto the First Amended Complaint. On 6/29/17, the Court again agreed in sustaining the Demurer to the Second Amended Complaint, stating, “The 6th cause of action for slander of title can only run against those who actually publish false statements about the property. That might include Anita Gale, Richard Edwards, Kenneth Fuller, WT Capital Services and Placer Title Company - but not the demurring parties.” Pham did not attempt to re-assert this cause of action against Chicago in the Third or Fourth Amended Complaint. Plaintiffs’ refusal to amend is deemed an admission that they have stated the case as strongly as they can and there are no more facts that could be alleged to cure the defect. Reynolds, supra, 36 Cal.4th at 1091. Second, Pham has not and cannot assert any financial loss proximately caused by Chicago's (unalleged) disparagement or false claim. Third, Pham is not authorized to assert a new cause of action for interference. When a demurrer is sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick, supra, 167 Cal.App.4th at 1015. Seventh Cause of Action for Unfair Business Practice (UCL) “Two remedies are available to private litigants bringing claims under [Business and Professions Code sections 17200 or 17500: injunction or restitution.” William L. Stern, Bus. & Prof. Code Section 17200 Prac., 9 8:2 (2017 West). Section 17203 authorizes courts to make: “such orders or judgments ... as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person ... any money or property ... which may have been acquired by means of such unfair competition.” Both of these remedies are unavailable to Pham against Chicago. In addition, neither damages nor civil penalties are available as relief to private litigants but only where the action is brought in the name of the people of the State of California as private attorney general action. Cal. Bus. & Prof. Code § 17206. “[D]amages are not available under section 17203.” Rather, “[t]he only nonpunitive monetary relief available under the Unfair Business Practices Act is the disgorgement of money that has been wrongfully obtained or, in the language of the statute, an order ‘restor[ing] ... money ... which may have been acquired by means of... unfair competition.” Bank of the West v. Superior Ct. (1992) 2 Cal.App.4th 1254, 1266. The Court agreed with Chicago in its 3/1/18 Minute Orderas to the Demurrer to the Fourth Amended Complaint. “[In}junctive relief will be denied if at the time of the order or judgment, there is no reasonable probability that the past acts complained of will recur.” California Service Station & Auto. Repair Ass'n v. Union Oil Co. of Cal. (1991) 232 Cal.App.3d 44, 57. Injunctive relief is generally denied absent some showing that the past wrongdoing may recur. See Sun Microsystems, Inc. v. Microsoft Corp. (9th Cir. 1999) 188 F.3d 1115, 1123; Pappas Co. v. E. & J. Gallo Winery (ED Cal. 1985) 610 F.Supp. 662, 672 (“plaintiff cannot receive an injunction for past conduct unless he shows that the conduct will probably recur”; continuing activity is required in order for injunctive relief to be entered under § 17200); see Dean Witter Reynolds, Inc. v. Superior Ct. (1989) 211 Cal.App.3d 758, 774 (no injunction can issue if the offending business practice is discontinued and not likely to recur). The California Supreme Court has held under section 17200, something more must be shown than simply the fact that defendant is still in business and is in a position to err again. State of Cal. v. Texaco, Inc. (1988) 46 Cal.3d 1147, 1169-1170. The requested injunction must seek to enjoin an unfair trade practice and not some other wrong ancillary to the UCL violation. Stern, Bus. & Prof. Code Section 17200 Prac., § 8:32. In this case, injunctive relief is unavailable to Pham because there is no threat that the allegedly wrongful act - Chicago's alleged failure to record a reconveyance of the Richard Edwards Deed of Trust or failure to confirm that the deed of trust was satisfied - will continue. See Cal. Serv. Station & Auto. Repair Ass'n Union Oil Co. of Cal. (1991) 232 Cal.App.3d 44,57. The Court agreed both in granting Chicago's Motion for Judgment on the Pleadings and in sustaining its demurrer as to the Fourth Amended Complaint. Likewise, restitution Is unavailable because Chicago took no property or money From Pham. In the absence of any new allegations that Chicago directly received Pham’s money or property or that to which Pham has a vested interest, Pham 3 is not entitled to restitution as a matter of law. In Cortez v. Purolator Air Filtration Prods., Inc. (2000) 23 Cal.4th 163, 96 CR2d 518, the Supreme Court placed two limitations on a trial court's power to fashion restitution: (1) “the trial court may not make an order for disgorgement of all benefits defendant may have received .... It may only order restitution to persons from whom money or property has been unfairly or unlawfully obtained”; and (2) restitution is not mandatory. Id. at 172, 180. Restitution is limited to either “money or property that defendants took directly from plaintiff” or “money or property in which [plaintiff] has a vested interest.” Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1146-1147. in previously granting Chicago’s Motion for Judgment on the Pleadings, the Court specifically pointed out Pham’s failure to expressly allege that Chicago took money from her (or money to which she had a vested interest) to seek restitution under the UCL. Likewise, the Court's 3/1/18 Minute Order on Chicago's Demurer to the Fourth Amended Complaint pointed out the identical defect. Pham’s counsel cannot adduce any evidence of any money or property taken by Chicago belonging to Pham or to which she has a vested interest in exchange for recording the Edwards Deed of Trust. To the contrary, there is no evidence that Chicago undertook such a task. The only new facts are the addition of Exhibit K to the Fifth Amended Complaint with Chicago notes in connection with the payoff the Edwards Deed of Trust; there is no evidence that Chicago ever undertook the responsibility to record a reconveyance of the Edwards Deed of Trust, as testified to by Howard Hayslett. MOTION TO STRIKE Pham plead multiple forms of inappropriate remedies against Chicago in paragraph 61 and Prayer paragraphs 1-6 of the Fifth Amended Complaint. As set forth above, there is no entitlement for Pham to seek damages of any type (general, special, punitive), for declaratory relief (in the absence of any such cause of action including Chicago), for quiet title (when no such cause of action is asserted against Chicago), for injunctive relief (where there is no threat of recurring harm by Chicago). Please promptly provide me with available dates and times so we can meet and confer during the next two weeks. In addition, please let me know if you are willing to stipulate to the continuance of the August 20, 2018 trial date. Obviously, the Court is receptive to continuing the case given the state of the pleadings not being at issue, the close proximity of the trial date and the inability of the parties to move for summary judgment under these circumstances. | would propose continuing the trial to an early December date, as | have multiple trials scheduled in October, and November. Regards, Donald E. Leonhardt, Esq. VP/ Trial Counsel, Southwest Region Fidelity National Law Group 4 Executive Circle, Suite 270 Irving, CA 92656 949-255-9977 donald.leonhardt@fnf.com The Law Division of Alamo Title Insurance Co., Chicago Title Insurance Co., Commonwealth Land Title Insurance Co., Fidelity National Title Insurance Co., Fidelity National Title Group, Inc. and National Title Insurance of New York, Inc. From: juandotson@gmail.com On Behalf Of Juan Dotson Sent: Tuesday, April 24, 2018 6:42 PM To: Elizabeth C. Farrell Cc: Jeffrey Kagan ; Timothy Donahue ; Leonhardt, Donald ; Timothy T. Lam ; Cristina Ramirez ; Hyatt, Robert ; Elizabeth Treckler ; John Upton ; smh@hannafirm.com; Fickel, Ashley ; Brandon Reif Subject: Meet and conferre fifth amended complaint: Pham vs. WT Capital IMPORTANTNOTICE - This message sourced froman external mail server outside oftheCompany. Dear Mr. Donahue, | called your office yesterday to meet and confer with you about the fifth amended complaint. | do not believe | received a return call. Please consider this as my attempt to meet and confer with you. We take issue with counts 3, 4, 6, 7 filed against Escrow Legends, Inc. In the third cause of action for negligent undertaking, Plaintiff alleges Chicago Title and Legends were involved in a joint venture. There is no information to support this allegation in the complaint. Does your client actually mean joint business transaction? In the fourth cause of action for interference for prospective economic advantage, your client alleges the defendants intentionally and independently committed wrongful acts and omissions. There is no mention how Escrow Legends intentionally did any act (or omission) that prevents the sale of the home. The sixth cause of action for slanderoftitle lacks any factual allegations on how Escrow Legends participated in publishing false publications or disparaged Plaintiff's property. The seventh cause of action for Unfair Business Practices is time barred and summarily alleges the defendant unlawfully and/or unfairly failed to “wipe out” the 2006 deed of trust without pleading that Escrow Legends had a duty to do so. Exhibit K only indicates that Escrow Legends demanded the return of the signed reconveyance. Please advise us on the action your client will take. Sincerely, Juan Dotson Attorney for Escrow Legends, Inc. Osuna & Dotson Law Firm 13333 Paramount Blvd. South Gate, CA 90280 Tel. 888-657-5648 Fax. 866-598-2429 On Wed, Nov 15, 2017 at 4:08 PM, Juan Dotson wrote: 5 | Please see attached answer by Escrow Legends, Inc. Osuna & Dotson LawFirm i 13333 Paramount Blvd. . South Gate, CA 90280 | Tel. 888-657-5648 | Fax. 866-598-2429 EXHIBIT “2” Leonhardt, Donald From: Leonhardt, Donald Sent: Thursday, May 10, 2018 9:28 AM To: ‘Timothy Donahue’; 'tdonahue374@gmail.com’ Cc: Jeffrey Kagan’; "Cristina Ramirez’; "Hyatt, Robert’; ‘Juan Dotson’; ‘Timothy T. Lam’; ‘Elizabeth C. Farrell’; ‘Elizabeth Treckler'; John Upton’; 'smh@hannafirm.com’; 'Fickel, Ashley; 'Brandon Reif’; Dias, Tom Subject: RE: Meet and conferre fifth amended complaint: Pham vs. WT Capital Dear Mr. Donahue, This morning we met and conferred concerning Chicago Title Company’s demurrer and motion to strike as to Pham'’s Fifth Amended Complaint. You acknowledged receiving my May 4, 2018 email below setting forth Chicago’s proposed demurrers and the grounds for a motion to strike inappropriate material from the pleading. When | asked whether you would concede to any of Chicago’s issues, you responded in the negative. You agreed when | asked whether the parties had sufficiently met and conferred and whether Chicago could proceed with its demurrer and motion. Regards, Donald E. Leonhardt, Esq. VP/ Trial Counsel, Southwest Region Fidelity National Law Group 4 Executive Circle, Suite 270 Irvine, CA 92656 949-255-9977 donald.leonhardt@fnf.com The Law Division of Alamo Title Insurance Co., Chicago Title insurance Co., Commonwealth Land Title Insurance Co., Fidelity National Title Insurance Co., Fidelity National Title Group, Inc. and National Title Insurance of New York, Inc. From: Leonhardt, Donald Sent: Friday, May 4, 2018 11:09 AM To: Timothy Donahue ; Timothy T. Lam ; tdonahue374@gmail.com Cc: Jeffrey Kagan ; Cristina Ramirez ; Hyatt, Robert ; Juan Dotson ; Elizabeth C. Farrell ; Elizabeth Treckler ; John Upton ; smh@hannafirm.com; Fickel, Ashley ; Brandon Reif ; Dias, Tom Subject: RE: Meet and confer re fifth amended complaint: Pham vs. WT Capital Importance: High Dear Messrs. Donahue and Lam, Please let me know when you are available to meet and confer concerning Chicago Title Company's anticipated Demurrer and Motion to Strike as to Pham’s Fifth Amended Complaint. We have not yet been served with the actual pleading but to the extent it follows the rejected Fifth Amended Complaint, we will be filing a Demurrer and Motion to 1 Strike. In addition, we request that you stipulate to continue the currently set August 20, 2018 Trial and related dates (as noted in my oral argument yesterday) since the pleadings arestill not set (and there is currently no operative complaint) and there is insufficient time for any party to have a motion for summary judgment/adjudication heard. To facilitate the meet and confer as to the Demurrer, | have outlined some issues to be discussed in our conference: DEMURRER Third Cause of Action for Negligent Undertaking/Negligence Plaintiff cannot plead a cause of action based upon negligence against Chicago for multiple reasons: lack of standing, failure to plead a duty owed and the statute of limitations. Actionable negligence is traditionally regarded as involving the following: {1) a legal duty to use due care; (2) a breach of that duty; and (3) the breach as the proximate or legal cause of the resulting injury. See Toomey v. Southern Pac. R. Co. (1890) 86 Cal. 374, 381; Means v. Southern Cal. Ry. Co. (1904) 144 Cal. 473, 478; Johnstone v. Panama Pac. Int. Exposition Co. (1921) 187 Cal. 323, 326; Schwartz v. Helms Bakery Ltd. (1967) 67 Cal.2d 232, 241 n. 9; United States Liab. Ins. Co. v. Haidinger-Hayes (1970) 1 Cal.3d 586, 594. For more than eighty years, California courts have held that the duty of an escrow holderis limited to complying strictly with the parties’ written instructions and exercising reasonable skill and diligence in carrying out those instructions. Blackburn v. McCoy (1934) 1 Cal.App.2d 648, 655; Vournas v. Fidelity Nat. Tit. Inc. Co. (1999) 73 Cal.App.4th 668, 674. The parties are only entitled to the performance that is provided in their instructions and the escrow holder is only obligated to perform in accordance with instructions from the parties to the escrow. Summit Financial Holding, Ltd., supra, 27 Cal.4th at 711; Amen, supra, 58 Cal.2d at 531-532; Shreeves v. Pearson, 194 Cal. 699, 711-712, 230 P. 448 (1924); Markowitz v. Fidelity Nat. Title Co., 142 Cal.App.4th 508, 526. Pham has no standing to assert a negligence cause of action against Chicago. Chicago never undertook any escrow relationship with Pham. Indeed, she was a stranger to the August 2006 refinance transaction, and Chicago’s underwriting of a title insurance policy to SCME. Pham has not pleaded and cannot plead any facts establishing a legal duty owed by Chicago. Under ordinary circumstances, an escrow holder owes duties only to the parties to the escrow, not to third parties. Summit Financial Holding, Lid v. Continental Lawyers Title Co. (2002) 27 Cal. 4th, 705, 711. Pham was never a party to an escrow with Chicago. Plaintiff has not and cannot plead the basis of any duty owed in the form of oral or written escrow instructions. Indeed, Chicago was not the escrow holder in the August 2006 refinance transaction. In addition, any breach of duty (assuming one existed) occurred in August 2006. The statute of limitations long expired years before Pham filed her action in 2015. Finally, Pham is not authorized to assert a new cause of action for negligence. When a demurreris sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015. Fourth Cause of Action for interference with Prospective Economic Advantage “The elements of the tort of intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and some third person containing the probability of future economic benefit to the plaintiff; (2) knowledge by the defendant of the existence of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; {4) actual disruption of the relationship; and (5) damages to the plaintiff proximately caused by the acts of the defendant. Blank v. Kirwan (1985) 39 Cal.3d 311, 330 (citing Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827); Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 378; Youst v. Longo (1987) 43 Cal.3d 64, 71. Pham is unable to plead a cause of action for interference for several reasons. First, Pham fails to identify any relationship with a specific third party - a necessary pleading element. Second, Pham fails to explain how Chicago new of this unalleged relationship before its existence. Third, Pham fails to plead that either Chicago intended to disrupt a known third-party relationship or that it should have known its actions would do so. Each of these elementsis legally impossible because Chicago’s purportedly failure to record the reconveyance of the Edwards Deed of Trust in August 2006, well-before Pham acquired her title interest in the subject real property in July 2013 and formed a business relationship to the unidentified buyer thereafter. It would be impossible for Chicago, in 2006, knowing of a business relationship that did not yet exist for another seven years and also for Chicago to intend or know its actions would affect/disrupt a specific, then non-existent relationship. On 4/6/17, the Court sustained Chicago’s prior demurrer to this cause of action in the First Amended Complaint. On 6/29/17, the Court again sustained Chicago's demurer to the Second Amended Complaint, as follows: “The 4th and 5th causes of action for interference could only be pled, if at all, against those impeding plaintiff's ability to sell the property - which are the same Anita Gale, Richard Edwards, Kenneth Fuller, WT Capital Lender Services and Placer Title Company. Demurring parties [INCLUDING CHICAGO] have not engaged in any actionable interference.” The Court has already spoken as to Pham'’s ability to plead this cause of action against Chicago in the negative. In addition, Pham did not attempt to re-assert this cause of action against Chicago in the Third or Fourth Amended Complaint. Plaintiffs’ refusal to amend is deemed an admission that they have stated the case as strongly as they can and there are no more facts that could be alleged to cure the defect. Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091. Finally, Pham is not authorized to assert a new cause of action for interference. When a demurreris sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick, supra, 167 Cal.App.4th at 1015. Sixth Cause of Action for Slander of Title The tort of slander oftitle consists of false and unprivileged disparagement of the title to real or personal property. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008). To plead a cause of action, a plaintiff must allege the following elements: (1) the plaintiff should allege ownership of described property in the usual general terms; (2) the defendant's false oral or written disparagement, or a false claim of an interest; and (3) the particular financial loss caused by the disparagement. 5 Witkin, Cal. Proc. 5th Plead § 749 (2008); Burkett v. Griffith (1891) 90 Cal. 532, 537; see also Truck Ins. Exch. v. Bennett {1997) 53 Cal.App.4th 75, 84. Pham cannot, as a matter of law, state a cause of action against Chicago for slander of title because for at least three reasons. First, she cannot identify any false disparagement published by Chicago against her title interest. On 4/6/17, the Court agreed in sustaining Chicago’s Demurrerto the First Amended Complaint. On 6/29/17, the Court again agreed in sustaining the Demurer to the Second Amended Complaint, stating, “The 6th cause of action for slanderof title can only run against those who actually publish false statements about the property. That might include Anita Gale, Richard Edwards, Kenneth Fuller, WT Capital Services and Placer Title Company - but not the demurring parties.” Pham did not attempt to re-assert this cause of action against Chicago in the Third or Fourth Amended Complaint. Plaintiffs’ refusal to amend is deemed an admission that they have stated the case as strongly as they can and there are no more facts that could be alleged to cure the defect. Reynolds, supra, 36 Cal.4th at 1091. Second, Pham has not and cannot assert any financial loss proximately caused by Chicago's {(unalleged) disparagement or false claim. Third, Pham is not authorized to assert a new cause of action for interference. When a demurreris sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. Patrick, supra, 167 Cal.App.4th at 1015. Seventh Cause of Action for Unfair Business Practice (UCL) “Two remedies are available to private litigants bringing claims under [Business and Professions Code sections 17200 or 17500: injunction or restitution.” William L. Stern, Bus. & Prof. Code Section 17200 Prac., 1} 8:2 (2017 West). Section 17203 authorizes courts to make: “such orders or judgments ... as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person ... any money or property ... which may have been acquired by means of such unfair competition.” Both of these remedies are unavailable to Pham against Chicago. In addition, neither damages nor civil penalties are available as relief to private litigants but only where the action is brought in the name of the people of the State of California as private attorney general action. Cal. Bus. & Prof. Code § 17206. “[D]amages are not available under section 17203.” Rather, “[t]he only nonpunitive monetary relief available under the Unfair Business Practices Act is the disgorgement of money that has been wrongfully obtained or, in the language of the statute, an order ‘restor[ing] ... money ... which may have been acquired by means of... unfair competition.” Bank of the West v. Superior Ct. (1992) 2 Cal.App.4th 1254, 1266. The Court agreed with Chicago in its 3/1/18 Minute Orderas to the Demurrer to the Fourth Amended Complaint. “[In]junctive relief will be denied if at the time of the order or judgment, there is no reasonable probability that the past acts complained of will recur.” California Service Station & Auto. Repair Ass'n v. Union Qil Co. of Cal. (1991) 232 Cal.App.3d 44, 57. Injunctive relief is generally denied absent some showing that the past wrongdoing may recur. See Sun Microsystems, Inc. v. Microsoft Corp. (9th Cir. 1999) 188 F.3d 1115, 1123; Pappas Co. v. E. & J. Gallo Winery (ED Cal. 1985) 610 F.Supp. 662, 672 (“plaintiff cannot receive an injunction for past conduct unless he shows that the conduct will probably recur”; continuing activity is required in order for injunctive relief to be entered under § 17200); see Dean Witter Reynolds, Inc. v. Superior Ct. (1989) 211 Cal.App.3d 758, 774 {no injunction can issue if the offending business practice is discontinued and notlikely to recur). The California Supreme Court has held under section 17200, something more must be shown than simply the fact that defendant is still in business and is in a position to err again. State of Cal. v. Texaco, Inc. {1988) 46 Cal.3d 1147, 1169-1170. The requested injunction must seek to enjoin an unfair trade practice and not some other wrong ancillary to the UCL violation. Stern, Bus. & Prof. Code Section 17200 Prac., 4 8:32. In this case, injunctive relief is unavailable to Pham because there is no threat that the allegedly wrongful act - Chicago's alleged failure to record a reconveyance of the Richard Edwards Deed of Trust or failure to confirm that the deed of trust was satisfied - will continue. See Cal. Serv. Station & Auto. Repair Ass'n Union Oil Co. of Cal. (1991) 232 Cal.App.3d 44,57. The Court agreed both in granting Chicago’s Motion for Judgment on the Pleadings and in sustaining its demurrer as to the Fourth Amended Complaint. Likewise, restitution Is unavailable because Chicago took no property or money From Pham. In the absence of any new allegations that Chicago directly received Pham’s money or property or that to which Pham has a vested interest, Pham is not entitled to restitution as a matter of law. In Cortez v. Purolator Air Filtration Prods., Inc. (2000) 23 Cal.4th 163, 96 CR2d 518, the Supreme Court placed two limitations on a trial court's power to fashion restitution: (1) “the trial court may not make an order for disgorgement of all benefits defendant may have received .... It may only order restitution to persons from whom money or property has been unfairly or unlawfully obtained”; and (2) restitution is not mandatory. Id. at 172, 180. Restitution is limited to either “money or property that defendants took directly from plaintiff’ or “money or property in which [plaintiff] has a vested interest.” Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1146-1147. In previously granting Chicago’s Motion for Judgment on the Pleadings, the Court specifically pointed out Pham’s failure to expressly allege that Chicago took money from her (or money to which she had a vested interest) to seek restitution under the UCL. Likewise, the Court's 3/1/18 Minute Order on Chicago's Demurer to the Fourth Amended Complaint pointed out the identical defect. Pham’s counsel cannot adduce any evidence of any money or property taken by Chicago belonging to Pham or to which she has a vested interest in exchange for recording the Edwards Deed of Trust. To the contrary, there is no evidence 4 that Chicago undertook such a task. The only new facts are the addition of Exhibit K to the Fifth Amended Complaint with Chicago notes in connection with the payoff the Edwards Deed of Trust; there is no evidence that Chicago ever undertook the responsibility to record a reconveyance of the Edwards Deed of Trust, as testified to by Howard Hayslett. MOTION TO STRIKE Pham plead multiple forms of inappropriate remedies against Chicago in paragraph 61 and Prayer paragraphs 1-6 of the Fifth Amended Complaint. As set forth above, there is no entitlement for Pham to seek damages of any type (general, special, punitive), for declaratory relief (in the absence of any such cause of action including Chicago), for quiet title (when no such cause of action is asserted against Chicago), for injunctive relief (where there is no threat of recurring harm by Chicago). Please promptly provide me with available dates and times so we can meet and confer during the next two weeks. In addition, please let me know if you are willing to stipulate to the continuance of the August 20, 2018trial date. Obviously, the Court is receptive to continuing the case given the state of the pleadings not being at issue, the close proximity of the trial date and the inability of the parties to move for summary judgment under these circumstances. 1 would propose continuing the trial to an early December date, as | have multiple trials scheduled in October, and November. Regards, Donald E. Leonhardt, Esq. VP/ Trial Counsel, Southwest Region Fidelity National Law Group 4 Executive Circle, Suite 270 Irvine, CA 92656 949-255-9977 donald.leonhardt@fnf.com The Law Division of Alamo Title Insurance Co., Chicago Title Insurance Co., Commonwealth Land Title Insurance Co., Fidelity National Title Insurance Co., Fidelity National Title Group, Inc. and National Title Insurance of New York, inc. From: juandotson@gmail.com On Behalf Of Juan Dotson Sent: Tuesday, April 24, 2018 6:42 PM To: Elizabeth C. Farrell Cc: Jeffrey Kagan ; Timothy Donahue ; Leonhardt, Donald ; Timothy T. Lam ; Cristina Ramirez ; Hyatt, Robert ; Elizabeth Treckler ; John Upton ; smh@hannafirm.com; Fickel, Ashley ; Brandon Reif Subject: Meet and conferre fifth amended complaint: Pham vs. WT Capital IMPORTANT NOTICE- This message sourced fromanexternal mail serveroutsideofthe Company. Dear Mr. Donahue, | called your office yesterday to meet and confer with you about the fifth amended complaint. Ido not believe | received a return call. Please consider this as my attempt to meet and confer with you. 5 We take issue with counts 3, 4, 6, 7 filed against Escrow Legends, Inc. In the third cause of action for negligent undertaking, Plaintiff alleges Chicago Title and Legends were involved in a joint venture. There is no information to support this allegation in the complaint. Does your client actually mean joint business transaction? In the fourth cause of action for interference for prospective economic advantage, your client alleges the defendants intentionally and independently committed wrongful acts and omissions. There is no mention how Escrow Legends intentionally did any act (or omission) that prevents the sale of the home. The sixth cause of action for slander oftitle lacks any factual allegations on how Escrow Legends participated in publishing false publications or disparaged Plaintiff's property. The seventh cause of action for Unfair Business Practices is time barred and summarily alleges the defendant unlawfully and/or unfairly failed to “wipe out” the 2006 deed of trust without pleading that Escrow Legends had a duty to do so. Exhibit K only indicates that Escrow Legends demanded the return of the signed reconveyance. Please advise us on the action your client will take. Sincerely, Juan Dotson Attorney for Escrow Legends,Inc. Osuna & Dotson Law Firm 13333 Paramount Blvd. South Gate, CA 90280 Tel. 888-657-5648 Fax. 866-598-2429 On Wed, Nov 15, 2017 at 4:08 PM, Juan Dotson wrote: . Please see attached answer by Escrow Legends, Inc. i Osuna & Dotson Law Firm | 13333 Paramount Blvd. © South Gate, CA 90280 Tel. 888-657-5648 i Fax. 866-598-2429 5 ~ ~ N W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I am employed in the County of Los Angeles, State of California. I am over the age of eighteen years and not a party to the within entitled action; my business address 4 Executive Circle, Suite 270, Irvine, California 92614. On May 31, 2018, I served the foregoing document(s) described as DEFENDANT CHICAGO TITLE COMPANY’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIFTH AMENDED COMPLAINT; MEMORANDUM IN SUPPORT THEREOF; DECLARATION OF DONALD E. LEONHARDT IN COMPLIANCE WITH CAL. CIV. PROC. CODE § 430.41 on the interested parties in said action: [X] By placing the original and/or a true copy thereof enclosed in a sealed envelope addressed as follows: PLEASE SEE ATTACHED SERVICE LIST [X] By placing the original and/or a true copy thereof enclosed in a sealed envelope addressed as follows: [ 1 (BY MAIL)I deposited such envelope in the mail at Los Angeles, California. The envelope was mailed with postage thereon fully prepaid. I am readily familiar with the firm's practice of collection and processing correspondence for mailing. It is deposited with the U.S. Postal Service on that same day in the ordinary course of business. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. (BY OVERNIGHT DELIVERY) I delivered to an authorized driver authorized by GSO or FedEx to receive documents, in an envelope or package designated by GSO or FedEx with delivery fees paid or provided for, addressed to the person on who it is to be served,at the office address as last given by that person on any documentfiled in the cause and served on the party making service; or at that party’s place of residence. [ 1 (BYPERSONAL SERVICE) I caused such envelope to be hand-delivered to the offices of the addressee. [ X ] (ELECTRONIC SERVICE) I served said document by electronic service via One Legal or electronic transmission,to the persons at the addresseslisted on the attached service list. I did notreceive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. [X] (STATE) I declare under penalty of perjury under the laws of the State of California, that the foregoing is true and correct. Executed on May 31, 2018, at Irvine, California. sid. Christine Hipp PROOF OF SERVICE w n s W N N O c e 3 O h 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOCUMENT PREPARED ON RECYCLED PAPER SERVICE Pham v. Chicago Title Company Orange County Superior Court Case No. 30-2015-00822403 Timothy J. Donahue, Esq. Law Offices ofTimothy J. Donahue 374 South Glassell Street Orange, CA 92866 Tel.: (714) 289-2445 Fax: (714) 289-2450 Attorneysfor PlaintiffLOANPHAM Email: tdonahue@attorneydonahue.com Steven M. Hanna, Esq. Law Offices of Steven Hanna 141 W. Wilshire Avenue, Suite B Fullerton, CA 92832 Tel.: (714) 441-1690 Fax: (714) 459-7377 Email: smh@hannafirm.com John Turpin 19142 Alexa Lane Huntington Beach, CA 92648 Tel.: (714) 968-2008 Claudia C. Osuna, Esq. Juan Dotson, Esq. Osuna & Dotson Law Firm 1333 Paramount Boulevard South Gate, CA 90280 Tel: (888) 657-5648 Email: attorney@osunadotsonlaw.com Attorneysfor Defendant ANITA GALE Defendant in Pro Per Attorneysfor Escrow Legends PROOF OF SERVICE
