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Attorneys for Defendants DLI Properties, LLC
and Nussbaum APC
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT CALIFORNIA – EASTERN DIVISION
ARTURO RAMOS
Plaintiff,
vs.
DLI PROPERTIES, LLC; NUSSBAUM APC;
RESIDENTIAL CREDIT SOLUTIONS, INC.;
QUALITY LOAN SERVICES CORP.,
Defendants.
CASE NO. 5:16-cv-01257-JGB-KK
NOTICE OF MOTION AND MOTION
TO DISMISS FIRST AMENDED
COMPLAINT; MEMORANDUM OF
POINTS AND AUTHORITIES AND
DECLARATION OF SANDRA L.
STEVENS IN SUPPORT THEREOF
[FILED CONCURRENTLY WITH
[PROPOSED] ORDER GRANTING
MOTION TO DISMISS FIRST AMENDED
COMPLAINT]
DATE: May 8, 2017
TIME: 9:00 a.m.
CTRM: 1
PLACE: 3470 12th Street, Riverside,
California 92501
TO THE COURT, ALL PARTIES, AND THEIR COUNSEL OF RECORD:
NOTICE IS HEREBY GIVEN that on May 8, 2017 at 9:00 a.m. in Courtroom 1 of the
United States District Court, located at 3470 12th Street, Riverside, California 92501, Defendants
DLI Properties, LLC and Nussbaum APC (collectively “Defendants”) will move this court for an
Lane M. Nussbaum, SBN 264200
Sandra L. Stevens, SBN 84727
NUSSBAUM APC
27489 AGOURA ROAD S T E 102
AGOURA HILLS, CALIFORNIA 91301
( 8 1 8 ) 6 6 0 - 1 9 1 9 F A X ( 8 1 8 ) 7 6 9 - 7 9 5 9
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order dismissing the First Amended Complaint filed by Plaintiff Arturo Ramos (“Plaintiff”),
without leave to amend, as against Defendants. This Motion is based on this Notice of Motion and
Motion, the memorandum of points and authorities and declaration of Sandra L. Stevens, the
matters to be judicially noticed in connection with this Motion, the Complaint and First Amended
Complaint filed by Plaintiff in this action, the pleadings on file herein and on such other and further
argument as the Court allows at the hearing on this Motion.
DATED: April 3, 2017 NUSSBAUM APC
By: _______________________
Sandra L. Stevens
Attorneys for Defendants
DLI Properties, LLC and
Nussbaum APC
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TABLE OF CONTENTS
I. INTRODUCTION…………………………………………………………………………..3
II. LEGAL STANDARD FOR MOTIONS TO DISMISS…………………………………….3
III. CLAIMS BASED ON VIOLATION OF AUTOMATIC STAY IN
BANKRUPTCY ARE MERITLESS……………………………………………………….4
IV. FACTS ALLEGED IN THE FIRST AMENDED COMPLAINT DO NOT JUSTIFY
AN ORDER SETTING ASIDE TRUSTEE’S SALE. ………………………………….....4
A. Plaintiff is Collaterally Estopped from Relitigating Issues of Title in This
Action. ……………………………………………………………………………...5
B. DLI’s Title is Conclusively Presumed to be Valid. ………………………………...7
C. Plaintiff Failed to Allege Tender and Cannot Prevail in Any Claim Seeking to Set
Aside Foreclosure Sale……………………………………………………………...8
V. CLAIMS BASED ON EVENTS OCCURRING WHEN THE LOAN WAS MADE
ARE BARRED BY THE APPLICABLE STATUTE OF LIMITATION……………..…...8
VI. PLAINTIFF CANNOT PREVAIL ON A QUIET TITLE CLAIM………………………...9
VII. PLAINTIFF’S SLANDER OF TITLE CLAIM IS FATALLY DEFECTIVE
AS AGAINST THESE DEFENDANTS…………………………………...……………...10
VIII. THE SEVENTH THROUGH TENTH CLAIMS FOR RELIEF FAIL TO
ADEQUATELY PLEAD FRAUD…………………………………………………………11
IX. ALL CONTRACT AND QUASI-CONTRACT CLAIMS ASSERTED AGAINST
THESE DEFENDANTS MUST BE DISMISSED ……………………………………….12
A. There is no Factual or Legal Basis for Promissory Estoppel……………………...12
B. Plaintiff Has Not Alleged Any Facts Establishing Impossibility of
Performance. ………………………………………………………………………13
C. The FAC Fails to Allege Any Facts Supporting a Claim of Unconscionability
against Defendants. ………………………………………………………………..13
D. Defendants Are Not Liable for Breach of Fiduciary Duty………………………...15
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E. There is No Viable Claim against These Defendants for Breach of Covenant
of Good Faith and Fair Dealing.……..……………………………………,……..15
X. PLAINTIFF FAILED TO ALLEGE A VIABLE CLAIM FOR UNFAIR BUSINESS
PRACTICES AGAINST THESE DEFENDANTS……………………………….……..16
XI. PLAINTIFF HAS NOT ALLEGED ANY FACTS ESTABLISHING A CLAIM FOR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS. ……………………….17
XII. THERE ARE NO GROUNDS FOR INJUNCTIVE OR DECLARATORY RELIEF
RELIEF…………………………………………………………………………………..18
A. The FAC Fails to State Facts Justifying Injunctive Relief………………………18
B. There Is No Actual Controversy Requiring Declaratory Relief………………...19
XIII. CONCLUSION………………………………………………………………………….19
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TABLE OF AUTHORITIES
CASES
Albillo v. Intermodal Container Services, Inc., 114 Cal.App.4th 190, 206, 8 Cal.Rptr.3d 350
(2003)……………………………………………………………………………………………..17
Allen v. McCurry, 449 U.S. 90, 94
(1980)………………………………………………………....5Argueta v. J.P. Morgan 787
F.Supp. 1099, 1106 (ED CA 2011). …………………………..…...14
Arnolds Management Corp., v. Eischen (1984) 158 Cal.App.3d 575, 578-79…………………….8
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)……………………………………………………….4
Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988)………………………….3-4
Bassett v. Ruggles, No. CV-F-09-528, 22 2009 U.S. Dist. LEXIS 83349, at * 62 (E.D. Cal.,
Sept. 14, 2009)……………………………………………………………………………….……11
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)…………………………………………......4
Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813……………………………………………….6
Bly–Magee v. California, 236 F.3d 1014, 1019 (9th Cir.2001)……………………………………11
Brown v. Investors Mortgage Co. 121 F.3d 472, 478 (9th Cir. 1997)……………………………...14
Butler v. Nepple, 54 Cal.2d 589, 599 (1960) ……………………………………………………...13
Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 889, 6 Cal.Rptr.2d 151………………9
Carma Developers, Inc. v. Marathon Development California, Inc., 2 Cal.4th 342, 372, 6
Cal.Rptr.2d 467, 826 P.2d 710 (1992)……………………………………………………………..16
Christensen v. Superior Court, 54 Cal.3d 868, 903, 2 Cal.Rptr.2d 79, 820 P.2d 181 (1991) …….17
City of Hope v. Genentech, Inc., 43 Cal.4th 375, 386, 181 P.2d 142, 75 Cal.Rptr 3d. 333
(2008)……………………………………………………………………………………………....15
Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 221, 197
Cal.Rptr. 783, 673 P.2d 660 (1983)………………………………………………………………..15
Daugherty v. American Honda Motor Co., Inc., 144 Cal.App.4th 824, 837, 51 Cal.Rptr.3d 118
(2006)………………………………………………………………………………………………16
Davidson v. City of Westminster 32 Cal.3d 197, 209, 185 Cal.Rptr. 252, 649 P.2d 894 (1982)….17
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Debrunner v. Deutsche Bank Nat. Trust Co., 204 Cal.App.4th 433, 440, 138 Cal.Rptr.3d 830,
835…………………………………………………………………………………………..…10, 11
Display Research Labs. v. Telegen Corp., 133 F.Supp.2d 1170, 1174 (N.D.Cal.2001)……….18-19
Discover Bank v. Super. Ct., 36 Cal.4th 148, 160, 30 Cal.Rptr.3d 76, 113 P.3d 1100 (2005)……14
Dymo Indus. v. Tapeprinter, Inc., 326 F.2d 141, 143 (9th Cir. 1964)…………………………….18
Ellison v. City of San Buenaventura, 48 Cal.App.3d 952, 962 (1975)……………………………13
Federal Deposit Ins. Corp. v. McSweeney 772 F.Supp. 1154, 1157 (S.D.Cal.1991)……………..15
Geren v. Deutsche Bank National (E.D.Cal.2011) 2011 WL 3568913………………………..10-11
Glass v. Gulf Oil Corp., 12 Cal.App.3d 412, 423, 96 Cal.Rptr. 902……………………….…10
Glendale Federal Savings & Loan Association v. Marina View Heights Dev. Co.,
66 Cal.App.3d 101, 153-154 (1977)……………………………………………………………….13
Gon v. First State Ins. Co., 871 F.2d 863 (9th Cir. 1989) ……………………………………..…18
Graham v. Bank of America, 226 Cal.App.4th 594, 618, 172 Cal.Rptr. 218 (2014)……………...14
Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 932, 125 Cal.Rptr.3d 210………………… …15
Guz v. Bechtel Nat. Inc., 24 Cal.4th 317, 349, 100 Cal.Rptr.2d 352, 8 P.3d 1089 (2000)………...16
Hague v. Wells Fargo Bank, N.A. (N.D.Cal.2011) 2011 WL 3360026, 3………………………...11
Impink v. Bank of America (S.D.Cal.2011) 2011 WL 3903197………………………….……..…11
Int'l Harvester Co. v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir.1980)…………………….…..18
Jones v. Wachovia Bank 230 Cal App. 4th 935, 943, 179 Cal.Rptr.3d 21 (2014) …………..……12
Kajima/Ray Wilson v. Los Angeles County Metro. Transp. Auth., 23 Cal.4th 305, 310, 96
Cal.Rptr.2d 747, 1 P.3d 63, 66 (2000)………………………………………………………….…12
Kennedy v. Reece 225 Cal.App.2d 717, 724-725, 226 (1964)……………………………….……13
Khoury v. Maly's of California, Inc. 14 Cal.App.4th 612, 619 (1993)…………………….16-17
Kolbe v. JP Morgan Chase Bank, N.A. (N.D.Cal.2011) 2011 WL 4965065……………………...11
Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982)…5
Lockwood v. Superior Court 160 Cal.App.3d 667, 673…………………………………………….5
Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, 795 P.2d 1223, 272 Cal.Rptr. 767………....5
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Malkoskie v. Option One Mortgage Corp. (2010) 188 Cal.App.4th 968………………………………..7
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126-127, 127 S.Ct. 764, 771,
166 L.Ed.2d 604 (2007)……………………………………………………………………………19
Melendrez v. D & I Invest., Inc. (2005) 127 Cal.App.4th 1238, 1249-1250………………….…..7-8
Migra v. Warren City School District Board of Education, 465 U.S. 75, 81 (1984)……………….5
Moeller v. Lien, supra, 25 Cal.App.4th 822, 831.)……………………………………………….…7
Moore v. City of Costa Mesa, 678 F. Supp. 1448, 1450 (C.D. Cal. 1987)………………………….5
Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)…………………………………………….…3
Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 444…………………………………………...7, 8
Nymark v. Heart Fed. Savings & Loan Assn., 231 Cal.App.3d 1089, 1092 (1991)……………….14
Pacific Mut. Life Ins. Co. v. McConnell (1955) 44 Cal.2d 715,724…………………………..…..5-6
Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 326……………………………………….…5
People v. Cooper (2007) 149 Cal. App. 4th 500, 518…………………………………………………...6
Pub. Serv. Com. v. Wycoff Co., 344 U.S. 237, 244, 73 S.Ct. 236, 97 L.Ed. 291 (1952)…………..19
Salahutdin v. Valley of California, Inc. 24 Cal.App.4th 555, 563, 29 Cal.Rptr.2d 463 (1994)…...15
Salazar v. Thomas (2015) 236 Cal.App.4th 467, 476-477, 186 Cal.Rptr.3d 689…………………..8
San Remo Hotel, L.P. v. City and County of San Francisco, 545 U.S. 323, 336 (2005)………...5, 6
Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976, 981 (9th Cir.2007)…………….…14
Sierra On-Line, Inc. v. Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984)……………18
Smith v. City and County of San Francisco, 225 Cal.App.3d 38, 49, 275 Cal.Rptr. 17
(1990)……………………………………………………………………………………….…16
Southcott v. Pioneer Title Co., 203 Cal.App.2d 673, 676, 21 Cal.Rptr. 917……………….…10
South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 740–741………………………….9
Starr v. Baca, 633 F.3d 1191, 1204 (9th Cir. 2011)………………………………………………..4
Stebley v. Litton Loan Servicing, LLP (2011) 202 Cal.App.4th 522, 526……………………….…8
Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009)…………………………………..18
Sumner Hill Homeowners' Association, Inc. v. Rio Mesa Holdings, LLC, 205 Cal.App.4th 999,
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1030, 141 Cal.Rptr.3d 109 (2012)……………………………………………………………..…..10
Swartz v. KPMG LLP, 476 F.3d 756, 764–65 (9th. Cir.2007)…………………………………….12
Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869, 878………………………………..6
Tarmann v. State Farm Mut. Auto. Ins. Co., 2 Cal.App.4th 153, 157, 2 Cal.Rptr.2d 861
(1991)…………………………………………………………………………………….………...12
Truck Ins. Exchange v. Bennett, 53 Cal.App.4th 75, 84, 61 Cal.Rptr.2d 497 (1997)……..……….10
United States v. Arnold, 678 F.Supp. 1463, 1465–66 (S.D.Cal.1988)………………………….…19
U.S. Cold Storage California v. Great W. Sav. & Loan Ass'n, (1985) 165 Cal.App.3d 1214
1214…………………………………………………………………………………………………8
U.S. Ecology, Inc. v. State of California 129 Cal.App.4th 887, 901, 28 Cal.Rptr.3d 89
(2005)………………………………………………………………………………………12-13
Vess v. Ciba-Geigy Corp., 317 F.3rd 1097, 1106 (9th Cir. 2003)…………………………………11
Vella v. Hudgins 20 Cal.3d 251, 256 (1977).……………………………………………………………7
STATUTES
California Bus. & Prof. Code § 17200…………………………………………………………….16
Civil Code Section 2924 ……………………………………………………………………………..…6
Code of Civil Procedure § 338 (a)………………………………………………………………..8-9
Code of Civil Procedure § 340 (3)……………………………………………………………….…9
Code Civ. Proc., § 761.020……………………………………………………………………..…..9
Code of Civil Procedure § 1161a(b)(3)…………………………………………………………………6
Federal Rule of Civil Procedure 9(b) ……………………………………………………………..11
Federal Rule of Civil Procedure 12(b)(6)…………………………………………………………..3
12 U.S.C. § 2614…………………………………………………………………………………....9
14 U.S.C. § 1640(e)…………………………………………………………………………………9
28 U.S.C. § 1738……………………………………………………………………………………5
SECONDARY
4 Miller & Starr, California Real Estate (2d ed. 1989) §9:154, at 507-508…………………….…8
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I. INTRODUCTION.
Defendant DLI Properties, LLC (“DLI”) is the owner of that certain real property located
at 23795 Lawson Road, Corona, California (“Property”), having purchased the Property at a duly
noticed nonjudicial foreclosure sale conducted on January 20, 2016. DLI paid the sum of
$520,000 for the Property and took title pursuant to a Trustee’s Deed Upon Sale (“Trustee’s
Deed”), recorded on February 2, 2016 as Document No. 2016-0042416 in the Riverside County
Recorder’s Office. A copy of the Trustee’s Deed is attached as Exhibit 5 to the Request for
Judicial Notice (“QLS RJN”) filed by Defendant Qualified Loan Servicing Corporation (“QLS”),
in support of QLS’s Motion to Dismiss the original complaint.
On February 24, 2016, DLI, through its attorneys, Defendant Nussbaum APC
("Nussbaum"), filed an Unlawful Detainer action (“UD Action”) under Code of Civil Procedure
section 1161a (b)(3). Nussbaum’s only connection to Plaintiff or the facts alleged in the First
Amended Complaint (“FAC”) is its role as counsel for DLI in the UD Action and in this action.
Aside from the averments regarding Nussbaum’s status as a professional corporation, Nussbaum
(erroneously sued herein as “Nussbaun”), the FAC does not mention Nussbaum.
On March 29, 2016, DLI obtained judgment for possession and damages against Plaintiff
Arturo Ramos ("Ramos"). The UD Judgment was entered pursuant to Code of Civil Procedure §
1161a(b)(3), and constitutes a final determination of the validity of DLI’s title, under California
law. A copy of the UD Judgment is attached as Exhibit 3 to the Request for Judicial Notice filed
by DLI in support of its Motion to Dismiss the original Complaint (Doc. No. 11-1).
On June 14, 2016, two and one half months after the UD Judgment has been entered,
Ramos filed the instant action, seeking to set aside the foreclosure sale on a variety of legal theories.
This Motion to Dismiss addresses the defects in the First Amended Complaint (“FAC”), and
contends that the FAC fails to allege any facts supporting the conclusory claims asserted therein.
II. LEGAL STANDARD FOR MOTIONS TO DISMISS.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) "tests the legal
sufficiency of a claim." Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). "Dismissal can be
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based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a
cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988).
"When there are well-pleaded factual allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief." Ashcroft v. Iqbal, 556 U.S.
662, 679 (2009). However, "the tenet that a court must accept as true all of the allegations
contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678 (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The allegations made in a complaint must
be both "sufficiently detailed to give fair notice to the opposing party of the nature of the claim so
that the party may effectively defend against it" and "sufficiently plausible" such that "it is not
unfair to require the opposing party to be subjected to the expense of discovery." Starr v. Baca,
633 F.3d 1191, 1204 (9th Cir. 2011)
III. CLAIMS BASED ON VIOLATION OF AUTOMATIC STAY IN
BANKRUPTCY ARE MERITLESS.
The First Amended Complaint continues to assert that the sale was void because it was
allegedly conducted in violation of the automatic stay in effect in In re: Ramos, USBC Case No.
6:16-bk-10441 - MJ. However, any issues pertaining to the legal effect of the bankruptcy stay
were resolved when the Bankruptcy court issued its order annulling the stay retroactively to the
date of the filing of Plaintiffs Chapter 13 Bankruptcy (See Order Granting Relief from Stay,
attached to Defendants’ Request for Judicial Notice, filed herein as Doc. 53 (“RJN #2”)).
Since the Order for relief from stay expressly annuls the stay to the date of the filing of
the Bankruptcy, there was no automatic stay in effect as of the date of the sale. Insofar as
Plaintiff claims that the sale was void based on violations of the automatic stay, those claims are
wholly lacking in merit.
IV. FACTS ALLEGED IN THE FIRST AMENDED COMPLAINT DO NOT
JUSTIFY AN ORDER SETTING ASIDE TRUSTEE’S SALE.
The First through Fifth Claims for relief each seek to set aside the foreclosure sale and
return title to the Property to Plaintiff. However, any cause of action seeking to set aside the
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foreclosure sale is barred for the reasons stated below.
A. Plaintiff is Collaterally Estopped from Relitigating Issues of Title in This
Action.
Under 28 U.S.C. § 1738, federal courts are required to give full faith and credit to state
court judgments. See San Remo Hotel, L.P. v. City and County of San Francisco, 545 U.S. 323,
336 (2005). That is, state court judgments have the same preclusive effect in federal court as they
would have in state's own court. Migra v. Warren City School District Board of Education, 465
U.S. 75, 81 (1984) ("It is now settled that a federal court must give to a state-court judgment the
same preclusive effect as would be given that judgment under the law of the State in which the
judgment was rendered.") "The fact that Plaintiff requests a different type of relief, or even
presents a different legal theory, does not negate or lessen the binding effect of the previous state
court judgment." Moore v. City of Costa Mesa, 678 F. Supp. 1448, 1450 (C.D. Cal. 1987) "Under
res judicata, a final judgment on the merits of an action precludes the parties or their privies from
re-litigating issues that were or could have been raised in that action." Allen v. McCurry, 449 U.S.
90, 94 (1980). Collateral estoppel, or issue preclusion, applies to issues that have already been
adjudged and lost in prior actions. Lucido v. Superior Court (1990) 51 Cal.3d 335, 341, 795 P.2d
1223, 272 Cal.Rptr. 767.
Pursuant to the full faith and credit statute (28 U.S.C. § 1738), federal courts must first
look to state law to determine the preclusive effect of a prior state court judgment. Kremer v.
Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). Issue
preclusion bars there-litigation of the issues adjudicated in the prior action. "The purposes of the
doctrine are to promote judicial economy by minimizing repetitive litigation, to prevent
inconsistent judgments that undermine the integrity of the judicial system, and to protect against
vexatious litigation." Lockwood v. Superior Court (1984) 160 Cal.App.3d 667, 673.
Collateral estoppel has "the dual purpose of protecting litigants from the burden of
relitigating an identical issue with the same party or his privy and of promoting judicial economy
by preventing needless litigation." Parklane Hosiery Co. v. Shore (1979) 439 U.S. 322, 326.
"[E]ven though the causes of action be different, the prior determination of an issue is conclusive
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in a subsequent suit between the same parties as to that issue and every matter which might have
been urged to sustain or defeat its determination." Pacific Mut. Life Ins. Co. v. McConnell (1955)
44 Cal.2d 715,724.
Five threshold requirements must be established for collateral estoppel to bar relitigation of
an issue: (1) the issue to be precluded must be identical to that decided in the prior proceeding, (2) the
issue must have been actually litigated at that time, (3) the issue must have been necessarily decided,
(4) the decision in the prior proceeding must be final and on the merits, and (5) the party against whom
preclusion is sought must be in privity with the party to the former proceeding. People v. Cooper
(2007) 149 Cal. App. 4th 500, 518. The requirements of collateral estoppel are each met here: (1) the
unlawful detainer action under Code of Civil Procedure § 1161a(b)(3) requires that Plaintiff establish
title to the subject property; (2) the judgment for possession determined issues of title in favor of
Defendant and against Plaintiff; (3) Defendant could not have obtained judgment for possession
unless it established its title in the UD Action; (4) the UD Judgment is final and was entered on the
merits and (5) the parties to the unlawful detainer action were the same as the parties to this action.
Where, as here, an unlawful detainer action is brought pursuant to Code of Civil Procedure
section 1161a (b)(3), title is an issue, since the action may be filed "[w]here the property has been
sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of
trust ... and the title under the sale has been duly perfected." (Civ.Code, § 1161a, subd. (b)(3).) Under
the doctrine of collateral estoppel. once a court has decided an issue of fact or law necessary to its
judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action
involving a party to the first case. San Remo Hotel, L.P. v. City & County of San Francisco (2005)
545 U.S. 323, 336. fn. 16; Bernhard v. Bank of America (1942) 19 Cal.2d 807, 813.)" 'The purposes
of the doctrine are said to be "to promote judicial economy by minimizing repetitive litigation, to
prevent inconsistent judgments which undermine the integrity of the judicial system, [and] to protect
against vexatious litigation."' Syufy Enterprises v. City of Oakland (2002) 104 Cal.App.4th 869, 878.)
The effect of an unlawful detainer judgment in collaterally estopping subsequent litigation
regarding title was recognized by the California Supreme Court in Vella v. Hudgins (1977) 20 Cal.3d
251, 256). Applying the traditional rule that a judgment rendered by a court of competent jurisdiction
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is conclusive as to any issues necessarily determined in that action, the courts have held that
subsequent fraud or quiet title suits founded upon allegations of irregularity in a trustee's sale are
barred by the prior unlawful detainer judgment. Malkoskie v. Option One Mortgage Corp. (2010) 188
Cal.App.4th 968.
Based upon the foregoing authorities, all issues regarding the validity of Defendant's title were
fully and finally adjudicated when judgment for possession was entered in the unlawful detainer
action. Malkoskie, supra, at 974. Plaintiff is thus collaterally estopped from relitigating issues of title
in this action. The UD Judgment thus bars all of the claims for relief in the FAC which seek to set
aside DLI’s title to the Property. The Motion to Dismiss must be granted, as the First through Sixth
Claims.
B. DLI’s Title is Conclusively Presumed to be Valid.
As stated in DLI’s Motion to Dismiss filed herein as Document 11, DLI was a bona fide
purchaser without notice whose title is conclusively presumed to be valid. “Our analysis
proceeds on the presumption of validity accorded the foreclosure sale.” (Nguyen v. Calhoun
105 Cal.App.4th 428, 444 (2003).) “ ‘If the trustee's deed recites that all statutory notice
requirements and procedures required by law for the conduct of the foreclosure have been
satisfied, a rebuttable presumption arises that the sale has been conducted regularly and
properly; this presumption is conclusive as to a bona fide purchaser. [Citations.]’ [Citations.]”
(Id. at p. 441.) “As to a bona fide purchaser, however, the presumption is conclusive.”
(Moeller v. Lien, supra, 25 Cal.App.4th 822, 831 (1994).) “ ‘The conclusive presumption
precludes an attack by the trustor on the trustee's sale to a bona fide purchaser even where the
trustee wrongfully rejected a proper tender of reinstatement by the trustor.’ [Citation.]”
(Nguyen, supra, at pp. 441–442.) However, where the trustor is precluded from suing to set
aside the foreclosure sale, the trustor may still recover damages from the trustee. (Moeller,
supra, at pp. 831–832.)
The Trustee’s Deed attached to the QLS RJN as Exhibit 5 contains the statutory language
set forth in Civil Code § 2924, and Plaintiff has not alleged any facts which would indicate that
DLI was not a bona fide purchaser. Accordingly, DLI’s title is conclusively presumed to be valid
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as against any claims based on defects in the notices preceding the foreclosure sale. (Melendrez
v. D & I Invest., Inc. (2005) 127 Cal.App.4th 1238, 1249-1250; Nguyen v. Calhoun, 105
Cal.App.4th 428, 441 (2003) .) The Motion to dismiss Plaintiff’s First through Sixth Claims for
Relief should be granted without leave to amend, as against Defendants.
C. Plaintiff Failed to Allege Tender and Cannot Prevail in Any Claim Seeking
to Set Aside Foreclosure Sale.
As was contended in DLI’s Motion to Dismiss the original Complaint, Plaintiff must have
tendered repayment of the loan prior to filing this action. If a defaulting borrower requests relief
in equity, i.e. setting aside challenging a foreclosure proceeding, the borrower must first do equity
by tendering the entire loan amount. (Stebley v. Litton Loan Servicing, LLP, (2011) 202
Cal.App.4th 522, 526 (2011); see, also, Arnolds Management Corp., v. Eischen, 158 Cal.App.3d
575, 578-79 (1984).) Before a borrower can maintain case challenging a foreclosure sale, the
borrower must actually tender the entire loan amount. (See 4 Miller & Starr, California Real
Estate (2d ed. 1989) §9:154, at 507-508; U.S. Cold Storage California v. Great W. Sav. & Loan
Ass'n, 165 Cal.App.3d 1214 1214 (1985).) Plaintiffs’ failure to allege tender bars Plaintiff’s
claims seeking to set aside the foreclosure sale.
V. CLAIMS BASED ON EVENTS OCCURRING WHEN THE LOAN WAS MADE
ARE BARRED BY THE APPLICABLE STATUTE OF LIMITATION.
The loan which forms the basis for the FAC was made in 2005 and any claim for relief
seeking rescission or an order setting aside the foreclosure sale are barred by the applicable statute
of limitations. For instance, a claim seeking to set aside the deed of trust executed by Plaintiff in
2005 are barred by the applicable statute of limitations. (Salazar v. Thomas 236 Cal.App.4th 467,
476-477, 186 Cal.Rptr.3d 689 (2015) [“Generally, the most likely time limits for a quiet title action
are the five-year limitations period for adverse possession, the four-year limitations period for the
cancellation of an instrument, or the three-year limitations period for claims based on fraud and
mistake”].) Violations of statutory provisions are generally governed by the three-year statute of
limitations found in Code of Civil Procedure § 338, subdivision (a)”] (applicable to “ ‘[a]n action
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upon a liability created by statute, other than a penalty or forfeiture’ ”) Claims based on fraud are
barred unless the claims are brought within three years (C.C.P. § 338(d)).
Plaintiff is attempting to assert claims under the Real Estate Settlement Practices Act
(“RESPA”) or the Truth in Lending Act (“TILA”). However, the limitations period for claims
under RESPA is three years (12 U.S.C. § 2614). A plaintiff's cause of action for damages under
TILA is subject to a one-year statute of limitations, 15 U.S.C. § 1640(e), which runs from the time
the loan transaction is consummated. King v. State of California, 784 F.2d 910, 915 (1986). A
debtor also has three days to rescind the transaction after it has been consummated, and up to three
years to rescind the transaction if the required notice or material disclosures are not delivered. 12
C.F.R. § 226.23(a)(3); see also 15 U.S.C. § 1635(f). These claims were barred more than ten years
ago.
An action for infliction of emotional distress is a personal injury action governed by the
one-year statute of limitations found in Code of Civil Procedure section 340, subdivision (3).
(Cantu v. Resolution Trust Corp., 4 Cal.App.4th 857, 889, 6 Cal.Rptr.2d 151 (1992).) Based on the
foregoing, the above described claims are all barred by the applicable statute of limitations and the
claims asserted in the First through Fifth Claims for Relief should be dismissed for this reason, as
well.
VI. PLAINTIFF CANNOT PREVAIL ON A QUIET TITLE CLAIM.
The Fifth Claim for Relief seeks an order quieting title in Plaintiff’s name. The elements
of an action to quiet title are: (1) “the plaintiff is the owner and in possession of the land,” and (2)
“the defendant claims an interest therein adverse to [the plaintiff].” (South Shore Land Co. v.
Petersen, 226 Cal.App.2d 725, 740–741 (1964); see also Code Civ. Proc., § 761.020.) In order to
allege a cause of action to quiet title, Plaintiff is obligated to plead facts which would justify an
order declaring the foreclosure sale a nullity, so that title would revert to Plaintiff. The validity of
DLI’ s title was established by the UD Judgment. For the reasons set forth above, Plaintiff cannot
allege facts justifying an order setting aside the foreclosure sale to a bona fide purchaser, like DLI.
As is argued below, the facts alleged in the FAC do not provide any valid grounds for setting aside
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a foreclosure sale. Absent such facts, there is no cause of action to quiet title in Plaintiff, and the
Motion to dismiss the Fifth Claim for Relief should be granted without leave to amend.
VII. PLAINTIFFS SLANDER OF TITLE CLAIM IS FATALLY DEFECTIVE
AS AGAINST THESE DEFENDANTS
The Sixth Claim for Relief in the FAC is based on slander of title. In that Claim for Relief
Plaintiff avers that Plaintiff’s “title” has been slandered as a result of the Defendants’ conduct.
However, Plaintiff’s claim for slander of title is insufficient, as a matter of law.
Slander of title is a “tortious injury to property resulting from unprivileged, false,
malicious publication of disparaging statements regarding the title to property owned by
plaintiff, to plaintiff's damage.” Southcott v. Pioneer Title Co., 203 Cal.App.2d 673, 676, 21
Cal.Rptr. 917 (1962). A disparaging statement is one intended to cast doubt on the existence
or extent of one's interest in the property. Glass v. Gulf Oil Corp., 12 Cal.App.3d 412, 423, 96
Cal.Rptr. 902 (1970). Slander of title occurs when a person, “without a privilege to do so,
publishes a false statement that disparages title to property and causes the owner thereof some
pecuniary loss or damage.” Sumner Hill Homeowners' Association, Inc. v. Rio Mesa Holdings,
LLC, 205 Cal.App.4th 999, 1030, 141 Cal.Rptr.3d 109 (2012). The elements for this tort are 1) a
publication 2) without privilege or justification, 3) direct pecuniary loss, and 4) falsity. Truck Ins.
Exchange v. Bennett, 53 Cal.App.4th 75, 84, 61 Cal.Rptr.2d 497 (1997).
Essentially, Plaintiff is claiming that his title was slandered when the beneficiary recorded
the Notice of Default because “none of the Defendants, including Doe Defendants, have proof that
they are holders of the note” secured by the deed of trust. (FAC, ¶¶ 20, 114.) This claim is
unsupported by applicable California law.
As an initial point, beneficiaries who direct their trustees to record notices of default and
election to sell do not need to prove that they are the holders of the note as a condition to proceeding
with foreclosure. If Plaintiff contends that the beneficiary or trustee lacked the authority to serve
and record the notice of default, Plaintiff bears the burden of establishing that lack of authorization.
Second, insofar as Plaintiff is claiming that the beneficiary cannot foreclose unless the
beneficiary has possession of the note secured by the deed of trust, State and Federal courts have
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uniformly rejected this argument. (Debrunner v. Deutsche Bank Nat. Trust Co., 204 Cal.App.4th
433, 440, 138 Cal.Rptr.3d 830, 835 (2012); citing Geren v. Deutsche Bank National
(E.D.Cal.2011) 2011 WL 3568913; Kolbe v. JP Morgan Chase Bank, N.A. (N.D.Cal.2011) 2011
WL 4965065; Hague v. Wells Fargo Bank, N.A. (N.D.Cal.2011) 2011 WL 3360026, 3; Impink v.
Bank of America (S.D.Cal.2011) 2011 WL 3903197). Accordingly, the fact that the beneficiary
does not have possession of the note had no effect whatsoever on the beneficiary’s right to direct
the trustee to initiate foreclosure proceedings by serving the Notice of Default. The Motion to
Dismiss the Sixth Claim for Relief should also be granted without leave to amend.
VIII. THE SEVENTH THROUGH TENTH CLAIMS FOR RELIEF FAIL TO
ADEQUATELY PLEAD FRAUD.
The Seventh through Tenth Claims for Relief are purportedly based on various forms of
fraud. However, Defendants are not specifically named in these causes of action, except insofar as
prior allegations are incorporated there in by reference. The only allegations made in the FAC are
that DLI attended a foreclosure sale, purchased the property and took title to the Property. The only
other action by DLI alleged in the FAC is that DLI may be getting ready to sell the property.
In the Ninth Circuit, the Rule 9(b) standard for pleading fraud is well settled – a plaintiff
must allege the "who, what, where, when, and how" of the fraudulent conduct. Vess v. Ciba-Geigy
Corp., 317 F.3rd 1097, 1106 (9th Cir. 2003). Fraud allegations must state "the time, place and
specific content of the false representations as well as the identities of the parties to the
misrepresentation." Bassett v. Ruggles, No. CV-F-09-528, 22 2009 U.S. Dist. LEXIS 83349, at *
62 (E.D. Cal., Sept. 14, 2009), citing Schreiber 23 Distrib. v. Serv-Well Furniture Co., 806 F.2d
1393, 1401 (9th Cir. 1986). Vague or conclusory allegations are insufficient to satisfy Rule 9(b)'s
“particularity” requirement. E.g., Moore v. Kayport Package Express, Inc., 885 F.2d 531, 540 (9th
Cir.1989). To comply with Rule 9(b), allegations of fraud must be specific enough to give
defendants notice of the particular misconduct that is alleged to constitute the fraud claim so that
they can defend against the claim and not just deny that they have done anything wrong. Bly–
Magee v. California, 236 F.3d 1014, 1019 (9th Cir.2001).
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Rule 9(b) requires plaintiffs to differentiate between the conduct of each defendant and
“inform each defendant separately of the allegations surrounding his alleged participation in the
fraud.” Swartz v. KPMG LLP, 476 F.3d 756, 764–65 (9th. Cir.2007). Furthermore, in a fraud action
against a corporation or other entity defendant, a plaintiff must “allege the names of the persons
who made the allegedly fraudulent representations, their authority to speak, to whom they spoke,
what they said or wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto. Ins.
Co., 2 Cal.App.4th 153, 157, 2 Cal.Rptr.2d 861 (1991).
As noted above, the FAC does not even mention of either of these Defendants in Seventh
through Tenth Causes of Action. There are no allegations describing any contact between DLI and
Plaintiff except in the context of litigation. Clearly, the FAC fails to satisfy this standard and the
motion to dismiss the Seventh and Eighth Claims for relief should be granted without leave to
amend.
IX. ALL CONTRACT-RELATED AND FIDUCIARY CLAIMS ASSERTED
AGAINST THESE DEFENDANTS MUST BE DISMISSED
A. There is No Factual or Legal Basis for Promissory Estoppel.
The Eleventh Cause of Action appears to be based on the doctrine of promissory estoppel.
California law provides that “[a] promise which the promisor should reasonably expect to
induce action or forbearance on the part of the promisee ... and which does induce such action
or forbearance is binding if injustice can be avoided only by enforcement of the
promise.” Kajima/Ray Wilson v. Los Angeles County Metro. Transp. Auth., 23 Cal.4th 305, 31096
Cal.Rptr.2d 747, 1 P.3d 63, 66 (2000).
The doctrine of promissory estoppel “ ‘employs equitable principles to satisfy the
requirement that consideration must be given in exchange for the promise sought to be enforced.’
” (Ibid.) Promissory estoppel binds a promissor “when he should reasonably expect a substantial
change of position, either by act or forbearance, in reliance on his promise, if injustice can be
avoided only by its enforcement.” Id., Jones v. Wachovia Bank, 230 Cal App. 4th 935, 943, 179
Cal.Rptr.3d 21 (2014).) “The elements of a promissory estoppel claim are ‘(1) a promise clear
and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3)
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[the] reliance must be both reasonable and foreseeable; and (4) the party asserting the
estoppel must be injured by his reliance.’ [Citation.]” (U.S. Ecology, Inc. v. State of
California 129 Cal.App.4th 887, 901, 28 Cal.Rptr.3d 89 (2005).)
The only allegations in the FAC which mention DLI in any capacity are those
averments which state that DLI purchased the Property at a nonjudicial foreclosure sale. No
promises of any kind were made by DLI to Plaintiff. In fact, the only relationship of any
kind between DLI and Plaintiff was the adversarial relationship in the UD Action and in this
action. There is no basis for a claim of promissory estoppel between DLI and Plaintiff. The
Motion to Dismiss the Eleventh Claim for Relief should be granted without leave to amend.
B. Plaintiff Has Not Alleged Any Facts Establishing Impossibility of
Performance.
The Twelfth Cause of Action asserts that the lenders and servicers should have known
that Plaintiff was unable to spay the loan and that Plaintiff should thus be entitled to set aside the
loan based on impossibility of performance.
The kind of impossibility that excuses performance under a contract must be in the nature
of the thing to be done and not in the inability of the promisor to do it. Mere unforeseen difficulty
or expense does not constitute impossibility and ordinarily will not excuse performance. (Kennedy
v. Reece, 225 Cal.App.2d 717, 724-725, 226 (1964) [plaintiff was not excused from completing
400-foot well simply because cost of drilling through brittle rock at 270 feet resulted in a moderate
increase in the cost]; Butler v. Nepple, 54 Cal.2d 589, 599 (1960) [increased price of supplies did
not constitute impossibility]; Ellison v. City of San Buenaventura, 48 Cal.App.3d 952, 962 (1975)
[court could not modify parties' agreement and limit port district's contractual obligation to
maintain a waterway where substantial economic hardship could reasonably have been
anticipated]; Glendale Federal Savings & Loan Association v. Marina View Heights Dev. Co. 66
Cal.App.3d 101, 153-154 (1977) [a party's mistaken assumption that there would be freeway access
to property to be developed did not constitute impossibility].)
///
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C. The FAC Fails to Allege Any Facts Supporting a Claim of Unconscionability
against Defendants.
The Thirteenth Claim for Relief seeks an order declaring that Plaintiffs original loan was
void based on Plaintiffs assertion that the loan was “’unconscionable.” There are, however, no
facts averred in the FAC that would establish that unconscionability.
Plaintiff alleges in the most conclusory terms that the loan was “unconscionable.” Plaintiff
claims that he was somehow “mislead” but fails to say how he was misled, who misled him, the
substance of statements which misled him or any other fact to support his claim that the loan was
“unconscionable.” (see, FAC, ¶¶ 54-55.) A contract is unenforceable only if it is both procedurally
and substantively unconscionable. Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976,
981 (9th Cir.2007). A contract is procedurally unconscionable when there is oppression or surprise
due to unequal bargaining power. Discover Bank v. Super. Ct., 36 Cal.4th 148, 160, 30 Cal.Rptr.3d
76, 113 P.3d 1100 (2005). A contract will be considered substantively oppressive where the results
are overly harsh or one-sided. Id. However, claims that a loan is unconscionable must be supported
by factual allegations. Argueta v. J.P. Morgan 787 F.Supp. 1099, 1106 (ED CA 2011). Home loans
are not substantively “unconscionable” solely on the basis that the loan is interest only or an
adjustable rate loan. (Graham v. Bank of America, 226 Cal.App.4th 594, 618, 172 Cal.Rptr. 218
(2014); see, also, Brown v. Investors Mortgage Co. 121 F.3d 472, 478 (9th Cir. 1997) [fact that
interest rate was high on loan made to high risk borrower did not render loan unconscionable].)
The FAC is devoid of any facts supporting Plaintiff’s conclusory claims of
“unconscionability.” (FAC, ¶¶ 35, 52-56.) Plaintiff claims that the lender on the original loan
should not have made the loan since Plaintiff was unable to make the payments. However, lenders
have no duty of care to borrowers when the institution's involvement in the loan transaction does
not exceed the scope of its conventional role as a mere lender of money. (Nymark v. Heart Fed.
Savings & Loan Assn., 231 Cal.App.3d 1089, 1092 (1991).) In any case, there was no contractual
relationship between Plaintiff and these Defendants, there is no claim for unconscionability against
these Defendants and the Motion to Dismiss the Thirteenth Cause of Action must be granted
without leave to amend as to these Defendants.
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D. Defendants Are Not Liable for Breach of Fiduciary Duty.
In the Fourteenth Cause of Action, Plaintiff attempts to allege a claim based on breach of
fiduciary duty. Based on the FAC and matters to be judicially noticed, it is obvious that no such
cause of action can be plead against Defendants. “ ‘The elements of a cause of action for breach of
fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3)
damage proximately caused by the breach.’ ” (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925,
932, 125 Cal.Rptr.3d 210.) The breach of fiduciary duty can be based upon either negligence or
fraud, depending on the circumstances. (See Salahutdin v. Valley of California, Inc. 24 Cal.App.4th
555, 563, 29 Cal.Rptr.2d 463 (1994); see also Federal Deposit Ins. Corp. v. McSweeney 772
F.Supp. 1154, 1157 (S.D.Cal.1991).) “[B]efore a person can be charged with a fiduciary obligation,
he must either knowingly undertake to act on behalf and for the benefit of another, or must enter
into a relationship which imposes that undertaking as a matter of law.” (Committee on Children's
Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 221, 197 Cal.Rptr. 783, 673 P.2d 660
(1983), cited in City of Hope v. Genentech, Inc., 43 Cal.4th 375, 386, 181 P.2d 142, 75 Cal.Rptr 3d.
333 (2008).)
The only relationship of any kind between Plaintiffs and DLI is the adversarial relationship
between DLI and Plaintiff in the UD Action and in this action. Nussbaum’s only connection with
Plaintiff is its representation of DLI in those actions. There is no other relationship between
Plaintiff and Defendants. Clearly, the Motion to Dismiss the Fourteenth Claim for Relief must be
granted without leave to amend.
E. There is No Viable Claim against These Defendants for Breach of Covenant of
Good Faith and Fair Dealing.
The Fifteenth Claim for relief seeks relief for breach of the implied covenant of good faith
and fair dealing. However, since there is no contract between Plaintiff and Defendants, there is no
claim for breach of the implied covenant of good faith and fair dealing.
The covenant of good faith and fair dealing, “implied by law in every contract, exists merely
to prevent one contracting party from unfairly frustrating the other party's right to receive the
benefits of the agreement actually made.” (Guz v. Bechtel Nat. Inc., 24 Cal.4th 317, 349, 100
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Cal.Rptr.2d 352, 8 P.3d 1089 (2000).) It is universally recognized the scope of conduct
prohibited by the covenant of good faith is circumscribed by the purposes and express terms
of the contract.” (Carma Developers, Inc. v. Marathon Development California, Inc., 2 Cal.4th
342, 372, 6 Cal.Rptr.2d 467, 826 P.2d 710 (1992).)
“The prerequisite for any action for breach of the implied covenant of good faith and
fair dealing is the existence of a contractual relationship between the parties, since the covenant
is an implied term in the contract.” (Smith v. City and County of San Francisco, 225 Cal.App.3d
38, 49, 275 Cal.Rptr. 17 (1990).) “Without a contractual relationship, [plaintiffs] cannot state
a cause of action for breach of the implied covenant.” (Smith v. City and County of San
Francisco, 225 Cal.App.3d at 49(1990).) Plaintiff does not allege any contractual relationship
because there is no contractual relationship between Plaintiff and these Defendants.
Accordingly, there is no basis for a cause of action for breach of the covenant of good faith and
fair dealing. The Motion to dismiss the Fifteenth Claim for Relief must also be granted without
leave to amend.
X. PLAINTIFF FAILED TO ALLEGE A VIABLE CLAIM FOR
UNFAIR BUSINESS PRACTICES AGAINST THESE DEFENDANTS.
The Sixteenth Claim for Relief purports to allege a claim for unfair business practices
under California Bus. & Prof. Code § 17200. In order to bring a claim for violation of Section
17200, “a plaintiff must show either an (1) ‘unlawful, unfair, or fraudulent business act or
practice,’ or (2) ‘unfair, deceptive, untrue or misleading advertising.’ ” See Lippitt v. Raymond
James Fin. Servs., 340 F.3d 1033, 1043 (9th Cir.2003) (quoting Cal. Bus. & Prof. Code § 17200).
Pursuant to Section 17200, “there are three varieties of unfair competition: practices which
are unlawful, unfair or fraudulent.” Daugherty v. American Honda Motor Co., Inc., 144
Cal.App.4th 824, 837, 51 Cal.Rptr.3d 118 (2006); see also Albillo v. Intermodal Container
Services, Inc., 114 Cal.App.4th 190, 206, 8 Cal.Rptr.3d 350 (2003) (to state a UCL claim, a
“plaintiff must establish that the practice is either unlawful (i.e., is forbidden by law), unfair (i.e.,
harm to victim outweighs any benefit) or fraudulent (i.e., is likely to deceive members of the
public)”). A plaintiff alleging an unfair business practice “must state with reasonable
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particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly's of
California, Inc. (1993) 14 Cal.App.4th 612, 619.) A demurrer is properly sustained where the
complaint “identifies no particular section of the statutory scheme which was violated and
fails to describe with any reasonable particularity the facts supporting violation.” (Ibid.)
The only action DLI is alleged to have taken is appearing at a nonjudicial foreclosure
sale and purchasing the Property (FAC, p. 5:11-13; ¶ 40; p.14:24-28), filing the UD Action
(FAC, ¶ 5:25-26) and purportedly preparing the Property for sale. (FAC, ¶ 6:2-5.) These
actions are neither unfair, illegal or fraudulent. The other averments relating to Defendants are
mere legal conclusions. The FAC fails to and, in fact, cannot aver a cause of action against
Defendants for unfair business practices and the Motion to Dismiss the Sixteenth Claim for
Relief must also be denied without leave to amend.
XI. PLAINTIFF HAS NOT ALLEGED ANY FACTS ESTABLISHING A CLAIM
FOR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS.
Plaintiff’s Seventeenth Claim for Relief seeks actual and punitive damages for intentional
infliction of emotional distress. However, the facts stated in the FAC are insufficient as a matter
of law to constitute a claim for intentional infliction of emotional distress.
To state a cause of action for intentional infliction of emotional distress, a plaintiff must
allege the following elements: “ ‘ “(1) extreme and outrageous conduct by the defendant with the
intention of causing, or reckless disregard of the probability of causing, emotional distress; (2)
the plaintiff's suffering severe or extreme emotional distress; and (3) actual and proximate
causation of the emotional distress by the defendant's outrageous conduct.” ’ ” (Christensen v.
Superior Court 54 Cal.3d 868, 903, 2 Cal.Rptr.2d 79, 820 P.2d 181 (1991).) For conduct to be
outrageous, it “ ‘must be so extreme as to exceed all bounds of that usually tolerated by a civilized
community.’ ” (Ibid., quoting Davidson v. City of Westminster 32 Cal.3d 197, 209, 185 Cal.Rptr.
252, 649 P.2d 894 (1982).)
None of the actions alleged to have been taken by these Defendants are “outrageous” or
so extreme as to “exceed all bounds of that usually tolerated by a civilized community.” The
facts averred in the FAC do not provide any basis for a claim for intentional infliction of emotional
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distress and the Seventeenth Claim for Relief should also be dismissed without leave to amend.
XII. THERE ARE NO GROUNDS FOR INJUNCTIVE OR DECLARATORY
RELIEF.
A. The FAC Fails to State Facts Justifying Injunctive Relief.
A preliminary injunction will not issue unless necessary to prevent threatened injury that
would impair the courts ability to grant effective relief in a pending action. Sierra On-Line, Inc. v.
Phoenix Software, Inc., 739 F.2d 1415, 1422 (9th Cir. 1984); Gon v. First State Ins. Co., 871 F.2d
863 (9th Cir. 1989). A preliminary injunction represents the exercise of a far-reaching power not
to be indulged except in a case clearly warranting it. Dymo Indus. v. Tapeprinter, Inc., 326 F.2d
141, 143 (9th Cir. 1964). To establish a right to preliminary injunctive relief, a party must
demonstrate “that he is likely to succeed on the merits, that he is likely to suffer irreparable harm
in the absence of preliminary relief, that the balance of equities tips in his favor, and that an
injunction is in the public interest.” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009).
The FAC clearly fails to allege any basis for injunctive relief under these standards.
The Eighteenth Claim for Relief contains a disconnected jumble of assertions, none of
which form a cohesive request for injunctive relief. In fact, it is impossible to determine exactly
what Plaintiff wants to enjoin or exactly actions or conduct are the subject of the request for
injunctive relief. In any case, the foreclosure sale was completed and DLI’s rights as owner have
been adjudicated and cannot be relitigated here. The Eighteenth Claims for Relief fails to allege
any grounds for injunctive relief and should be dismissed, without leave to amend.
B. There Is No Actual Controversy Requiring Declaratory Relief.
The complaint in a declaratory relief action must allege facts sufficient to establish an actual
controversy. Int'l Harvester Co. v. Deere & Co., 623 F.2d 1207, 1210 (7th Cir.1980). The
disagreement must not be nebulous or contingent, but must have taken on a fixed and final shape
so that a court can see what legal issues it is deciding and what effects its decision will have on the
adversaries. Pub. Serv. Com. v. Wycoff Co., 344 U.S. 237, 244, 73 S.Ct. 236, 97 L.Ed. 291 (1952);
United States v. Arnold, 678 F.Supp. 1463, 1465–66 (S.D.Cal.1988). The controversy must be real,
substantial, and capable of specific relief through a decree of conclusive character. Display
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Research Labs. v. Telegen Corp., 133 F.Supp.2d 1170, 1174 (N.D.Cal.2001). Basically, the
question in each case is whether the facts alleged, under all the circumstances, show that there is a
substantial controversy, between parties having adverse legal interests, of sufficient immediacy
and reality to warrant the issuance of a declaratory judgment. MedImmune, Inc. v. Genentech, Inc.,
549 U.S. 118, 126-127, 127 S.Ct. 764, 771, 166 L.Ed.2d 604 (2007). There are no facts averred
that establish an actual controversy requiring declaratory relief and insofar as the declaratory relief
claim seeks any relief, it is duplicative of the other claims for relief asserted in the FAC. The
Motion to Dismiss the Nineteenth Claim for Relief should also be granted, without leave to amend.
XIII. CONCLUSION.
For the reasons set forth above, an order granting leave to amend the FAC would be
futile, since the FAC does not allege any facts to support the claims averred therein and the filing
of the FAC will inevitably result in multiple additional motions to dismiss. The amendments
made in the FAC fail to address the fundamental defects which rendered the original complaint
defective and compel the conclusion that Plaintiff does not have any additional facts to allege.
The Motion to Dismiss the FAC should be granted as against these Defendants, without leave to
amend.
DATED: April 3, 2017 NUSSBAUM APC
By: _______________________
Sandra L. Stevens
Attorneys for Defendants
DLI Properties, LLC and
Nussbaum APC
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PROOF OF SERVICE
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PROOF OF SERVICE )
)
STATE OF CALIFORNIA ) ss.
)
COUNTY OF LOS ANGELES )
I am employed in the County of Los Angeles, State of California. I am over the age of 18 and
not a party to the within action. My business address is 27489 Agoura Road, Suite 102, Agoura
Hills, CA 91301.
On April 3, 2017, I served the foregoing document described as NOTICE OF MOTION AND
MOTION TO DISMISS FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS
AND AUTHORITIES AND DECLARATION OF SANDRA L. STEVENS IN SUPPORT
THEREOF on each interested party listed on the attached service list as follows:
[X] BY MAIL - I deposited such envelope in the mail at Agoura Hills, 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. Under that
practice it would be deposited with the U.S. Postal Service on that same day with postage
thereon fully prepaid at Agoura Hills, California in the ordinary course of business. I am
aware that on motion of the party served, service is presumed invalid if postal cancellation
date or postage meter date is more than one (1) day after date of deposit for mailing in the
affidavit.
[ ] BY PERSONAL SERVICE - I caused such envelope to be delivered by a registered
process server.
[ ] VIA FACSIMILE - I faxed said document, to the offices(s) of the addressee(s) shown
above, and the transmission was reported as complete and without error.
[ ] BY ELECTRONIC TRANSMISSION - I transmitted a PDF version of this document
by electronic mail to the party(s) identified on the attached service list using the e-mail
address(es) indicated.
[ ] BY OVERNIGHT DELIVERY - I deposited such envelope for collection and delivery
by (FED EX) with delivery fees paid or provided for in accordance with ordinary
business practices. I am "readily familiar" with the firm's practice of collection and
processing packages for overnight delivery by (FED EX). They are deposited with a
facility regularly maintained by (FED EX) for receipt on the same day in the ordinary
course of business.
[ ] (State) I declare under penalty of perjury under the laws of the State of
California that the above is true and correct.
[X] (Federal) I declare that I am employed in the office of a member of the bar of
this Court at whose direction the service was made.
I declare under penalty of perjury under the laws of the State of California that the foregoing is
true and correct. Executed on April 3, 2017 at Agoura Hills, CA.
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SERVICE LIST
Arturo Ramos
3659 Roselle Place
Riverside, CA 92509
Todd A Boock
Goodwin Procter LLP
601 S. Figueroa St., 41st Floor
Los Angeles, CA 90017
Melissa Robbins Coutts
McCarthy and Holthus LLP
1770 Fourth Avenue
San Diego, CA 92101
Seth M Harris
McCarthy & Holthus LLP
1770 4th Avenue
San Diego, CA 92101
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