Notice of Demurrer And Demurrer of Defendants To Plaintiffs Complaint Memorandum of Points And AuthoritiesDemurrerCal. Super. - 4th Dist.August 22, 2018Oo 0 3 O N Un kA W N DN N D N N N N N N O N H e e m b m b m p e a a p m p e © 3 A N R A W R O Y N N N D R A W N -~ o o ELECTRONICALLY FILED Superior Court of California, County of Orange WRIGHT, FINLAY & ZAK, LLP 10/02/2018 at 04:17:00 PM : Clerk of the Superior Court Eooe NE Gr Dae. (SA 509238) By Jeanette Torres-M Shit 53, 0 ERT Clerk 4665 MacArthur Court, Suite 200 Newport Beach, CA 92660 Tel: (949) 477-5050 Fax: (949) 608-9142 Attorneys for Defendants Fay Servicing, LLC, Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not Individually but as Trustee for Hilldale Trust SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE ARTHUR M. MCGUIRE and SHELLY Case No.: 30-2018-01014045-CU-OR-CJC MCGUIRE The Honorable Richard Y. Lee NOTICE OF DEMURRER AND DEMURRER OF DEFENDANTS TO PLAINTIFFS’ COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Plaintiffs, Vs. BSI FINANCIAL SERVICES, a business entity of unknown form , FAY SERVICING, LLC, a business entity of unknown form; . WILMINGTON SAVINGS FUND SOCIETY, Hearing: FSB, d/b/a CHRISTIANA TRUST, NOT Date: December 6, 2018 INDIVIDUALLY BUT AS TRUSTEE FOR Time: 1:30PM HILLDALE TRUST, a business entity of Dept: C-32 unknown form; ZIEVE BROADNAX & Reservation No. 72901787 STEELE, LLP, a business entity of unknown from; and DOES 1-100, inclusive Complaint filed: August 22, 2018 [Filed Concurrently with Request for Judicial Defendants. | Norice and Declaration of Demurring Party Re Meet and Confer] TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD, IF ANY: PLEASE TAKE NOTICE that on December 6, 2018 at 1:30PM or as soon thereafter as the matter may be heard in Department C18 of the above-entitled Court, located at 700 W. Civic Center Drive, Santa Ana, California 92701 the Demurrer of Defendants Fay Servicing, LLC, and Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not Individually but as Trustee for Hilldale Trust (“Defendants”) to the Complaint of Plaintiffs ARTHUR M. MCGUIRE and SHELLY MCGUIRE (“Plaintiffs”) will come on regularly for hearing. 1 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT - _ The Demurrer is made pursuant to California Code of Civil Procedure Section 430.10(e) on the basis that Plaintiffs’ Complaint fails to state facts sufficient to support the alleged causes of action against Defendant. | The Demurrer will be based on Plaintiffs’ Complaint, this Notice of Demurrer and Demurrer, the accompanying Memorandum of Points and Authorities, the records of this Court, the concurrently filed Request for Judicial Notice, the oral argument of counsel, and such other and further matters as the O O 0 3 O N wn B w BR RN DN N R RN N N R ) a k a b a p a p a a a a p a © NN A hh B W R R O VO N Y DRA W R N mm o o Court may consider at the hearing. Dated: October 2, 2018 WRIGHT, FINLAY & ZAK, LLP By: ( TU ps hr | Kdllee M. Gifford, Esq.” ~ / J Respectfully Submitted, Attorney for Defendants Fay Servicing, LLC, and Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not Individually but as Trustee for Hilldale Trust 2 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT Oo RX 9 Oo hn ph 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRER Defendants hereby generally and specially demur to the below enumerated causes of action contained in the Complaint (“Complaint”) of Plaintiffs on the following grounds: First Cause of Action Plaintiffs’ First Cause of Action for Violation of Cal. Civ. Code §2924.11 fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as there has been no violation of this section, given that no foreclosure sale has occurred Code Civ. Proc. §430.10(e). Second Cause of Action Plaintiffs’ Second Cause of Action for Violation of Cal. Civ. Code §2923.55 fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as this code section has been repealed Code Civ. Proc. §430.10(e). Third Cause of Action Plaintiffs’ Third Cause of Action for Violation of Cal. Civ. Code §2923.6 fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as this civil code section has been repealed Code Civ. Proc. §430.10(e). Fourth Cause of Action Plaintiffs’ Fourth Cause of Action for Violation of Cal. Civ. Code §2924.17 fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as this civil code section has been repealed Code Civ. Proc. §430.10(e). Fifth Cause of Action Plaintiffs’ Fourth Cause of Action for Negligence fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as Plaintiffs fail to establish they were owed a legal duty, or that Defendants caused Plaintiffs harm Code Civ. Proc. §430.10(e). // // 3 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT Oo 00 9 O N wn RA W N N N N N N N N O N N N H H p m a p a mm p m e m e m 0 J A N n h WLW N R , O O N N N R W R O Sixth Cause of Action Plaintiffs’ Sixth Cause of Action for Violation of Business and Professions Code §17200 fails because Plaintiffs do not allege facts sufficient to constitute a cause of action against Defendants as this cause of action is based entirely on their prior defective claims. Code Civ. Proc. §430.10(e). Respectfully Submitted, AY & ZAK, LLP Dated October 2,2018 By:; 7 / ! | Kaflee M. Gifford, Eg." | / Attorney for Defendants Fay Servicing, LLC, and Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not Individually but as Trustee for Hilldale Trust | 4 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT LO 0 3 O&O wn pb W N N N N N N N N N N s m a a e m p a p s a e a p m WW N N L i A W N H O O W Y R W =, MEMORANDUM OF POINTS AND AUTHORITIES L INTRODUCTION Plaintiffs’ complaint is replete with inconsistencies and misapplication of the law. The crux of Plaintiffs’ argument is that they submitted a loss mitigation application at some unspecified time in 2017 and that Defendants proceeded with initiating the foreclosure process anyway. However, for purposes of the Demurrer, even if Plaintiffs’ allegations are true, the claims as pled still do not amount to a viable cause of action under the current version of the Homeowner’s Bill of Rights (“HBOR™). Accordingly, as all of Plaintiffs’ allegations are based on contradictions and non-existent statutes, Defendants’ Demurrer should be sustained without leave to amend. IL. STATEMENT OF FACTS On or around September 8, 2005, Plaintiffs borrowed $763,000.00 and executed a promissory note evidencing this loan. Repayment of the loan was secured by a Deed of Trust to the subject real property located at 39 Cambridge Court Coto De Caza CA 92679 (the “Property”) (RIN, Exh. 1). The Deed of Trust named Horizon Mortgage Bankers as lender, and Chicago Title Company as trustee (RIN, Exh. 1). On September 21, 2016, an Assignment of Deed of Trust was recorded reflecting that the beneficial interest under the Deed of Trust was assigned to Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, Not Individually but as Trustee for Hilldale Trust (“Hilldale”) (RIN, Exh. 2). On July 12, 2017 a Substitution of Trustee was recorded whereby Hilldale substituted in Zieve, Broagaz & Steele, LLP as foreclosure trustee (RIN, Exh. 3). Plaintiffs defaulted under the terms of their loan, and A Notice of Default and Election to Sell was recorded on July 12, 2017 (RIN, Exh. 4). Plaintiffs’ default went uncured, and as a result, a Notice of Trustee’s Sale was recorded on July 3, 2018 (RIN, Exh. 5). No foreclosure sale has occurred to date. 111. DISCUSSION The standards applied to ruling on a demurrer are as follows: “Material facts alleged in the complaint are treated as true for the purpose of ruling on the demurrer. [Citation.] Also taken as true are facts that may be implied or inferred from those expressly alleged. [Citation.] However, contentions, deductions or conclusions of fact or law alleged in the complaint are not considered in judging its sufficiency.” State ex rel. Bowen v. Bank of America Corp. (2005) 126 Cal. App.4™ 225, 239-240. 5 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT O O 0 9 A n n R W N O N O N N N N N N N e a e m e a em a p a ea a p a WwW J Y Wn RA W D = O O D E W N R o Further, Code of Civil Procedure §430.30(a) states that a demurrer may be based on matters that are judicially noticeable. California Evidence Code § 452 provides that a court can take judicial notice of recorded documents, such as those attached to the Request for Judicial Notice filed concurrently herewith, when ruling on a demurrer. A. Plaintiffs’ Section 2924.11 Claim Fails Plaintiffs claim that Defendants violated Civil Code §2924.11 because Plaintiffs were “actively in the loan modification review process” (Complaint 49). Yet, Plaintiffs misread the statute. Section 2924.11(a) provides: If a borrower submits a complete application for a foreclosure prevention alternative offered by, or through, the borrower's mortgage servicer, a mortgage servicer, trustee, mortgagee, beneficiary, or authorized agent shall not record a notice of sale or conduct a trustee's sale while the complete foreclosure prevention alternative application is pending, and until the borrower has been provided with a written determination by the mortgage servicer regarding that borrower's eligibility for the requested foreclosure prevention alternative. (emphasis added). As an initial matter, any obligation to submit a written determination on the application for a foreclosure prevention alternative lies with the mortgage servicer, not the beneficiary. Therefore, this statute does not apply to Hilldale. Moreover, while Plaintiffs’ claimed in a conclusory manner that the application they submitted to Fay Servicing, LLC, (“Fay”) was “complete,” they fail to allege any facts in support of this claim, including when the application was submitted, what documents were submitted in connection with the application, and whether Fay actually acknowledged that the application was complete. Moreover, Plaintiffs base this violation on the claim that “Defendant is also pursuing the foreclosure sale date of September 7, 2018.” (Complaint 949) However, despite this allegation, it is undisputed that to date, no foreclosure has occurred. Thus, Plaintiffs have not properly pled that a violation this statute, and Defendants’ Demurer should be sustained. B. Plaintiffs’ Section 2923.55 Claim Fails 1. This Claim was Repealed as of January 1, 2018 As an initial matter, Civil Code Section 2923.55 was repealed, and is no longer in effect. See § 2923.55. Repealed by Stats.2013, c. 76 (A.B.383), § 15, operative Jan. 1, 2018. In fact, paragraphs 18- 6 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT OO 0 NN O N Wn A W N = N N N ND N N N =m mm mm mm e a em e d e d p d KR N Y nn RAR W N = O O N YN RA E W N m o 21 of Plaintiffs’ complaint are largely irrelevant, considering Plaintiffs cite to statutes that are no longer applicable. On that basis alone, Plaintiffs’ complaint fails. The repeal of a statute abates all causes of action based on that statute that have not been merged into a final judgment. Southern Service Co. v. County of Los Angeles, (1940) 15 Cal.2d 1, 11-12; Governing Board v. Mann, (1977) 18 Cal.3d 819, 829, 135 Cal.Rptr. 526, 558 P.2d 1 (Mann ); Younger v. Superior Court (1978) 21 Cal.3d 102, 109 (“[A]n action wholly dependent on statute abates if the statute is repealed without a saving clause before the judgment is final.”); see also Lemon v. Los Angeles Terminal Ry. Co., (1940) 38 Cal.App.2d 659, 671. Plaintiffs cannot state a claim for violation of Section 2923.55 now when the statute was repealed on January 1, 2018. Thus, the Demurrer should be sustained on that basis alone. 2. Plaintiffs’ Allegations Are Contradictory To the extent that this Court wishes to construe Plaintiffs’ cause of action as one for Civil Code Section 2923.5, such a claim fares no better. Plaintiffs claim that Fay violated the statute by failing to make sufficient contact with the Plaintiffs to discuss foreclosure alternative cannot succeed under this section, given their admission that they previously were in contact with Fay regarding the loan modification process (Complaint 428). Quite simply, discussions with the loan servicer regarding a loan modification satisfy the statutory requirements under Section 2923.5. McNeil v. Wells Fargo Bank, N.A.,2014 U.S. Dist. LEXIS 89610, at ¥10-11 (N.D. Cal. July 1, 2014), citing Rossberg v. Bank of Am., N.A., 219 Cal. App.4th 1481, 1494-95 (Cal. Ct. App. 2013) (multiple letters sent to the borrower referring to foreclosure alternatives, and requesting the borrower contact the servicer to discuss these options, satisfies the contact requirements of Section 2923.5). Here, Plaintiffs’ claim cannot succeed due to the fact that their complaint admits the law has been complied with. Specifically, where the borrower had several contacts with the servicer regarding a loan modification, the borrower cannot state a claim for a violation of Section 2923.5, even if the borrower was not satisfied with the result of the discussions, because the statute only “contemplates contact and some analysis of the borrower's financial situation.” Avnieli v. Residential Credit Sols., Inc., 2015 U.S. Dist. LEXIS 138683, at *11-12 (C.D. Cal. Oct. 9, 2015); Davenport v. Litton Loan Servicing, LP, 725 F.Supp.2d 862, 877 (N.D. Cal. 2010); see also Brown v. U.S. Bancorp, 2012 U.S. Dist. LEXIS 26226, 2012 WL 665900, at *7 (C.D. Cal. Feb. 27, 2012) (“Because plaintiffs admit that they discussed 7 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT © RX 9 4 Un bh W O N = N N N N R N N N N = o m b m e m e m p m e m p d p d RX JI A N Un BA W N R D O O X N Y R W R, Oo loan modifications with [defendant] well before the notice of default was recorded, their allegation that defendant failed to comply with § 2923.5 fails.”). The law presumes that the servicer’s obligations under Section 2923.5 have been complied with if the servicer establishes that the type of written, telephonic, and in-person contacts detailed above have been achieved between the borrower and the loan servicer. Here, Plaintiffs readily admit these conversations took place. Specifically, Plaintiffs admit that they spoke with Fay after servicing transferred from the prior servicer, and Plaintiffs admit that they submitted their loss mitigation application to Fay allegedly before the subject NOD was recorded (Complaint 928-29). Thus, as Plaintiffs have admitted Defendants’ compliance with the statute, this cause of action cannot succeed. Lastly, to be actionable, a violation of §2923.5 must have prejudiced Plaintiff. Knapp v. Doherty, | (2004) 123 Cal. App.4th 76, 96. Here, Plaintiffs fail to allege any facts to show that they were prejudiced by the claimed violation of § 2923.5. While a complaint may include allegations based on information and belief, it "is insufficient if it merely assert[s] the facts so alleged without alleging such information that leads [the plaintiff] to believe that the allegations are true.” Gomes, supra. Here, Plaintiffs have enjoyed nearly three years of occupancy in the Property without making a payment. Thus, they have clearly not suffered prejudice, and Defendants’ Demurrer should be sustained. C. Plaintiffs’ Cause of Action for Violations of Civil Code § 2923.6 Fails 1. This Section is No Longer in Effect As an initial matter, Civil Code § 2923.6 is no longer applicable as it was repealed effective January 1, 2018." See, Civil Code § 2923.6. Under the statutory repeal rule: “a cause of action or remedy dependent on a statute falls with a repeal of the statute, even after the action thereon is pending, in the absence of a saving clause in the repealing statute. [Citations.]” Callet v. Alioto (1930) 210 Cal. 65, 67- 68. The repeal of a statute abates all causes of action based on that statute that have not been merged into a final judgment. Southern Service Co. v. County of Los Angeles (1940) 15 Cal.2d 1, 11-12; Governing Board v. Mann (1977) 18 Cal.3d 819, 829; Younger v. Superior Court (1978) 21 Cal.3d 102, 109, [“an action wholly dependent on statute abates if the statute is repealed without a saving clause !' Some of its provisions, but not all, became part of the amended Civil Code § 2924.11, effective January 1, 2018. Notably, recording a Notice of Default no longer constitutes “dual tracking.” 8 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT O© 0 3 O Y Un BA WwW ND N N N N N N N N N N / m e m p m p m p m e m e m p m a RX ~~ O N nn BA W N = D O O O R W = Oo before the judgment is final]; see, Lemon v. Los Angeles Terminal Ry. Co. (1940) 38 Cal. App.2d 659, 671, 102 P.2d 387. The justification for the statutory repeal rule is that ““all statutory remedies are pursued with full realization that the legislature may abolish the right to recover at any time.”[Citation.]” Younger, supra. “Because it is a creature of statute, the right of action exists only so far and in favor of such person as the legislative [or initiative] power may declare.” Graczyk v. WCAB (1986) 184 Cal. App.3d 997. The statutory repeal rule is implicit in Government Code § 9606 which states: “Any statute may be repealed at any time, except when vested rights would be impaired. Persons acting under any statute Cee act in contemplation of this power of repeal.” Unlike a common law right, a “‘statutory remedy does not vest until final judgment’ [citation]; a judgment does not become final so long as the action in which it is entered remains pending [citation] and an action remains pending until final determination on appeal [citation].” County of San Bernardino v. Ranger Ins. Co. (1995) 34 Cal. App.4th 1140, 1149.Pursuant to this rule, Plaintiffs’ cause of action under § 2923.6 is now moot. | 2. Plaintiffs have Not Pled Sufficient Facts in Support of this Cause of Action Despite the statutory repeal of this code section, out of an abundance of caution Defendants will address the merits of the § 2923.6 as it existed prior to January 1, 2018. In their Complaint, Plaintiffs allege that “Plaintiffs were consistently assured that their file was “in review” and that no foreclosure activity would initiate when Defendants recorded the Notice of Default” (Complaint 72). However, Plaintiffs fail to provide any specific reasons how Defendants violated Civil Code § 2923.6, including a specific date surrounding when their loss mitigation application was submitted, what documents were submitted in connection with the application, or any other factual allegations which would support Plaintiffs’ complaint that they submitted a “complete” application. Finally, even if Defendants violated Civil Code § 2923.6, the only remedy for violations of § 2923.6 prior to the recording of a Trustee’s Deed Upon Sale, as the case is here, is to delay foreclosure until the statute has been complied with. See, Civil Code §2924.12(a). Here, no foreclosure sale has occurred. Accordingly, Defendants’ Demurrer should be sustained. D. Plaintiffs’ Section 2924.17 Claim Fails Plaintiffs’ cause of action for violation of Civil Code §2924.17 fails for the same reasons as their 9 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT NO 0 9 O N wn RA W N ND N N N N N N N O N s a e m e a e a e m p a e m p a XX N A kA W N D R O 0 RE W N Rk, o o claim for violation of Civil Code §2923.55. Specifically, Plaintiffs cannot establish that the Declaration attached to the NOD was not based on competent and reliable evidence pursuant to §2924.17, considering that Plaintiffs have not established a predicate violation. Plaintiffs base this cause of action on an underlying violation of Civil Code §2923.55, however as discussed above, this claim is contradicted by Plaintiffs’ own admission that they were in contact with their servicer (Complaint §28- 29), and due to the fact this cause of action is also based upon a non-existent statute. The current version of Civil Code §2924.17 directly indicates as much: “A declaration recorded pursuant to Section 2923.5 or, until January 1, 2018, pursuant to Section 2923.55, a notice of default, notice of sale, assignment of a deed of trust, or substitution of trustee recorded by or on behalf of a mortgage servicer in connection with a foreclosure subject to the requirements of Section 2924, or a declaration or affidavit filed in any court relative to a foreclosure proceeding shall be accurate and complete and supported by competent and reliable evidence” §2924.17(a)(emphasis added). Here, Plaintiffs have not alleged a valid violation of Civil Code §2923.5. Thus, as there is nothing on which to base this cause of action, this claim has no merit. Moreover, Plaintiffs’ claim for violation of this section is not based on any actual facts. Plaintiffs merely assert, without sufficient factual allegations, that they were not contacted, despite readily admitting that they were in contact with Fay to discuss foreclosure prevention alternatives prior to the recordation of the Notice of Default (Complaint 428). Therefore, this claim cannot succeed, and Defendants’ Demurrer should be sustained. E. Plaintiffs’ Cause of Action for Negligence Fails. To maintain a cause of action for Negligence, a plaintiff must establish: (1) duty (2) breach (3) causation, and (4) damages. Ladd v. County of San Mateo, (1996) 12 Cal. 4th 913, 917. Here, Plaintiffs are unable to allege the requisite elements. a. No Legal Duty Owed The existence of a legal duty to use reasonable care in a particular factual situation is a question of law for the court to decide. Vasquez v. Residential Inv, Inc., (2004) 118 Cal. App.4™ 269, 278. It is well-established that a lender does not owe any fiduciary duty to its borrower. “[A] financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not 10 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT O© 0 9 OO " Wn A W N ee BN N N N N N N N N = m k m m p m e d b m e a e m p e PX N A A W N = O C P N N O " RA N W N = oo exceed the...conventional role as a mere lender of money...” Wagner v. Benson (1980) 101 Cal.App.3d27, 34-35; Nymark v. Heart Federal Savings & Loan Assn. (1991) 231 Cal. App.3d 1089. Thus, “[i]t has long been regarded as 'axiomatic that the relationship between a bank and its depositor arising out of a general deposit is that of a debtor and creditor'...'A debt is not a trust and there is not a fiduciary relation between debtor and creditor as such.'....The same principle should apply with even greater clarity to the relationship between a bank and its loan customers.” Price v. Wells Fargo Bank (1989) 213 Cal.App.3d 465, 476, quoting Morse v. Crocker National Bank (1983) 142 Cal.App.3d 228, 232 and Downey v. Humphreys (1951) 102 Cal. App.2d 323, 332, respectively. Here, Plaintiffs fail to plead any facts that show how Defendants went outside their conventional role as a mere money lender. Admittedly, the Court in Alvarez v. BAC Home Loans Servicing (2014) 228 Cal. App. 4™ 941 recognized an exception to the general rule may apply. The court in Alvarez analyzed the factors set forth in Biakanja v. Irving (1958) 49 Cal. 2d 647 to determine on a case-by-case basis whether a lender owes a duty of care to Borrower. The Court recognized the problematic nature of injecting tort remedies into a breach of contract action, and thus held that where the parties are in contractual privity, Biakanja does not apply. Here, the parties are clearly in contractual privity, given the Note and Deed of Trust. Thus, as Biakanja has no applicability to the instant case, there is no legal duty owed to Plaintiffs, and this claim fails at the outset. b. This Claim Fails as Plaintiffs do not Allege Breach Plaintiffs claim that Defendants breached their duty of care by supposedly failing to process Plaintiffs’ request for Joss mitigation in violation of HBOR (Complaint 194). However, as discussed above, no provisions of HBOR were actually violated, as the recordation of the Notice of Default is no longer considered “dual-tracking” under the current version of HBOR. Further, Plaintiffs’ own admissions prove that Defendants’ complied with Civil Code section 2923.5, as they readily admit to having communications regarding loss mitigation with their servicer prior to the recordation of the Notice of Default. As this cause of action is based exclusively on Defendants’ alleged violation of HBOR, this claim cannot succeed. Accordingly, Defendants’ Demurrer should be sustained. F. Plaintiffs’ Cause of Action for Violation of Cal. B&P Code §17200 Fails. In order to allege a violation of Cal. Bus. & Prof Code §17200, a plaintiff must state with 11 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT Oo 0 NN OO wn BA W N N S N N N N N N N N Mm km a e a e a e m p m m m R N A Y nN B A W = O Y N N N R W m o reasonable particularity the facts supporting the statutory elements of the violation. Khoury v. Maly's of California, (1993) 14 Cal. App. 4th 612, 619. In order to have standing to allege such a claim, the plaintiff must have been injured as a result of the allegedly fraudulent, unfair, or unlawful activity in question. Troyk v. Farmers Group, Inc., (2009) 171 Cal.App.4th 1305, 1346. An “unfair practices claim under section 17200 cannot be predicated on vicarious liability.” Emery v. Visa International Service Association, (2002) 95 Cal. App.4th 952, 960. Here, Plaintiffs clearly do not meet the elements for this cause of action. 1. No Unlawful, Fraudulent, or Unfair Conduct Alleged by Plaintiffs Plaintiffs’ cause of action fails because they do not allege particular facts demonstrating any conduct by Defendants that could be classified as an unlawful, fraudulent, or unfair business act or practice. Plaintiffs simply offer conclusory allegations, speculation, and misapplied law, including non- existent statutes. Accordingly, this claim fails as Plaintiffs’ section 17200 claim cannot stand independently due to the fact that it is predicated on their prior defective claims. The Court in Puentes v. Wells Fargo Home Mortg., Inc. held that “section 17200 ‘borrows’ violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable...” 160 Cal.App.4th 638, 643-644 (2008). As discussed above, Plaintiffs have not alleged a single viable cause of action under HBOR, nor can they, due to their own admissions. Thus, as this cause of action is based entirely on Plaintiffs’ prior allegations, all of which fail, this cause of action for Section 17200 fails as well. 2. No Injury In Fact “A plaintiff must have suffered an ‘injury in fact’ and ‘lost money or property as a result of the unfair competition’ to have standing to pursue either an individual or a representative claim under the California unfair competition law.” Hall v. Time, Inc., (2008) 158 Cal. App.4™ 847, 849. “[TThe phrase “as a result of” in the UCL imposes a causation requirement; that is, the alleged unfair competition must have caused the plaintiff to lose money or property.” Id. There are no facts in this case to suggest that the supposedly-illegal loan agreements actually resulted in Plaintiffs suffering a loss of money or property. For this reason alone, Plaintiffs’ claim fails. 12 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT OO RX 9 OA nh BA W O N N O N N N N N NN N O N = = e a e m p a e m e a p m RX 3 A N n n BR W N = D Y O N D D E W N N R o Notwithstanding the above, in California, a plaintiff has failed to state a viable Cause of Action under the UCL if the purported injury-in-fact predates the alleged unfair/unlawful/fraudulent conduct. Jenkins v. JP Morgan Chase Bank, N.A., (2013) 216 Cal. App.4™ 497, 522-523. With specific respect to a non-judicial foreclosure, if a borrower-plaintiff faced the threat of foreclosure before the wrongful acts are alleged to have taken place, he cannot state a valid claim under the UCL. Id. In this case, Plaintiffs were facing foreclosure long before Defendants are alleged to have done anything wrong (Complaint 923-24). Accordingly, Plaintiffs’ cause of action fails and Defendants’ Demurrer should be sustained. IV. CONCLUSION Based upon the foregoing, Defendants respectfully request that the Court sustain this Demurrer in its entirety without leave to amend. Respectfully Submitted, WRIGHT, FINLAY & ZAK, LLP Dated: October 2, 2018 By: AN 7a Yaglee M. Gifford, Esq. Attorney for Defendants Fay Servicing, LLC, and Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not Individually but as Trustee for Hilldale Trust 13 NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT Oo 0 a 10 11 12 13 14 15 16 17 18 19 20 2] 22 23 24 25 26 27 28 PROOF OF SERVICE I, Marilee Johnson, declare as follows: I am employed in the County of Orange, State of California. I am over the age of eighteen (18) and not a party to the within action. My business address is 4665 MacArthur Court, Suite 200, Newport Beach, California 92660. Iam readily familiar with the practices of Wright, Finlay & Zak, LLP, for collection and processing of correspondence for mailing with the United States Postal Service. Such correspondence is deposited with the United States Postal Service the 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. On October 2, 2018, I served the within NOTICE OF DEMURRER AND DEMURRER OF DEFENDANTS TO PLAINTIFFS’ COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF on all interested parties in this action as follows: [1] by placing [ ] the original [X] a true copy thereof enclosed in sealed envelope(s) addressed as follows: SEE ATTACHED MAILING LIST [X] (BY MAIL SERVICE) I placed such envelope(s) for collection to be mailed on this date following ordinary business practices. [] (BY PERSONAL SERVICE) I caused personal delivery by ATTORNEY SERVICE of said document(s) to the offices of the addressee(s) as set forth on the attached service list. [] (BY FEDERAL EXPRESS OVERNIGHT- NEXT DAY DELIVERY) I placed true and correct copies thereof enclosed in a package designated by Federal Express Overnight with the delivery fees provided for. [X] (CMJ/ECF Electronic Filing) I caused the above document(s) to be transmitted to the office(s) of the addressee(s) listed by electronic mail at the e-mail address(es) set forth above pursuant to Fed.R.Civ.P.5(b)(2)(E). “A Notice of Electronic Filing (NEF) is generated automatically by the ECF system upon completion of an electronic filing. The NEF, when e-mailed to the e-mail address of record in the case, shall constitute the proof of service as required by Fed .R.Civ.P.5(b)(2)(E). A copy of the NEF shall be attached to any document served in the traditional manner upon any party appearing pro se.” [X] (State) Ideclare under penalty of perjury under the law of the State of California that the foregoing is true and correct. Executed on October 2, 2018, at Newport Beach, California. - WW ay des /: Colyer Marilee V. Johnson 1 PROOF OF SERVICE wh RA W N N O Y 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 ATTACHED MAILING LIST Joseph R. Manning, Jr., Esq. THE LAW OFFICES OF JOSEPH R. MANNING, JR. A PROFESSIONAL CORPORATION 4667 MacArthur Blvd., Suite 150 Newport Beach, CA 92660 (949) 200-8755; FAX (866) 843-8308 Attorneys for Plaintiffs ARTHUR M. MCGUIRE and SHELLY MCGUIRE ZIEVE, BRODNAX & STEELE, LLP 30 Corporate Park #450, Irvine, CA 92606 (206) 866-5345 Defendant 2 PROOF OF SERVICE Marilee Johnson From: Sent: To: Subject: donotreply@occourts.org Tuesday, October 02, 2018 10:13 AM Marilee Johnson Superior Court of Orange County - Motion Reservation Request - CONFIRMATION Tg Ey AG Your reservation request has been CONFIRMED by the Superior Court. The hearing date and time below has been reserved. You will be asked to provide your reservation number to the court at a later date, MOVING PAPERS MUST BE E-FILED WITHIN 24 HOURS AFTER COMPLETING THE ON-LINE RESERVATION. Failure to submit your moving papers within 24 hours will result in the automatic CANCELLATION of the reservation. NOTE: To EXPEDITE your MOTION filing place the appropriate Court Reservation number (e.g. TXXXXXXX) on each Motion being submitted. Please do not reply to this email. Raservation Number: 72801787 Hoaring Date: December 6, 2018 Moaring Time: 1:30 PM Departments €32 Motion Type Demurrer to Complaint Case Number: 30-20018-01014045-CU-OR-CIC Case Title: McGuire vs. BST Financial Services Judicial Officer: Hon, Richard Lee Email mjohnson@wrightlegal.net Dic of Reguast: October 2, 2018 Time of Beguesh: 10:11 AM Transaction Number S0194383
