Opp. Mot. Dism (Cal Cases)

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Melbourne B. Weddle, State Bar #34858 Patric H.R. Weddle, State Bar #201465 827 State St., #13 Santa Barbara, Ca. 93101 Telephone: (805) 966-1038 Facsimile: (805) 9669758 Attorneys for Plaintiff, James O. Albertson.

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN DIEGO

JAMES O. ALBERTSON

) )

Case No. 37-2010-00092727-CTL

Plaintiff, ) OPPOSITION TO DEMURRER ) ONEWEST BANK, INC. vs. ) ) INDYMAC BANK, INC. ONEWEST) ) BANK INC. INDYMAC MORTGAGE ) SERVICES, INC, MORTGAGE, REGI- ) STRATION SYSTEM, MTC FINANCI-,) IAL, INC. dba TRUSTEE CORPS and ) DOES 1-10, inclusive ) DATE: 9-17-2010 ) TIME: 10:00 a.m. ) DEPT: 60 Defendants. ) ) Jury Trial Demand Plaintiff James O. Albertson, (Albertson) respectfully submits his Opposition to the Demurrer filed by defendant ONEWEST BANK F.S.B. sued as OneWest Bank, Inc., /// ///

Opposition to Demurrer to Complaint -1-

I.

STATEMENT OF FACTS

Plaintiff Albertson obtained a loan on his Personal Residence as set forth in the Complaint. The loan is memorialized by a Deed of Trust and a Promissory Note. Defendants, individually and collectively, caused Albertson ("Plaintiff') to suffer damages as a result of being oversold a "no money down," adjustable rate, subprime loan which they knew or reasonably should have known he likely could not repay. After falsely representing to Plaintiff that he could refinance the loan in six months to obtain one with more favorable terms, Defendants then immediately sold and resold the loan in a whirlwind scheme of financial transactions that not only prevented Plaintiff from being able to refinance the loan, but from even being able to reasonably ascertain with whom he was supposed to be dealing with. Inevitably and predictably, Plaintiff lost his home through non-judicial foreclosure. As a consequence of the wrongful conduct and predatory lending practices of the Defendants, individually and acting in concert, Plaintiff was deprived of his ability to purchase a home that he could afford and obtain a loan that he could repay, in the process ruining his credit standing by way of a non-judicial foreclosure which will take him years to repair, thereby effectively preventing Plaintiff from being able to purchase a home of his own.
1.

a.

PLAINTIFF’S COMPLAINT ALLEGES STATUTORY VIOLATIONS. Legal Standards of a Demurrer.

A demurrer tests the pleading only. It tests neither the evidence nor matters extrinsic to the complaint. See Atascadero v. Merrill Lynch (1998) 68 C.A.4th 445, 459, 80 C.R.2d 329. Defendant cannot make allegations of fact contrary to the pleadings. Harboring Villas Homeowners Assn. v. Superior Court (1998) 63 C.A.4th 426, 429, 73 C.R.2d 646. b. Statutory violations. The Court accepts all of Plaintiff’s allegations as true, and draws all reasonable inferences in favor of the plaintiff. Plaintiff has pled sufficient facts to allege the nature and extent of the statutory violations of the Defendant. These factual allegations are incorporated by reference into each applicable Cause of Action. Each Cause of Action.

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c.

Factual and legal allegations by Defendant. “Holder in Due Course”

Defendant argues that it need not be a holder in due course. Defendant’s arguments are based upon an irrelevant conclusion of California Trust Co. v. Smead Inv. Co. (1935) 6 Cal. App. 2d 432, 435, 44 P.2d 624. The conclusion in the Smead case is based upon the fact that the trustor was not injured by the beneficiary’s failure to deliver both note and the trust deed to the trustee when executing the declaration of default. Thereafter, Defendant, using non-binding federal cases, plaintively argues that it need not have possession of the promissory note in order to foreclose. See In re Farm Raised Salmon Cases, 42 Cal. 4th 1077, 1096 n.18 (2008) (Federal cases may be cited if persuasive; they are not binding). Defendant cites Sicairos v. NDEX West , LLC, 2009 WL 35855 which follows California Trust Co. v. Smead Inv. Co. (1935) 6 Cal. App. 2d 432, 435, 44 P.2d 624 The district court federal cases are not guides; cannot become the law of the case and are not precedent for the facts in this case as they lack the persuasive quality necessary to be considered by a California court. . Sicairos presents a different set of facts than this case. The documents in Sicairos were referenced and were exhibits in the complaint. The documents’ authenticity was not in doubt. In this case, there is a break in the chain of the exhibits offered by the Defendant. Recent federal cases are contrary to the Defendant’s cases and follow the reasoning of the United States Supreme Court, viz., Carpenter v. Longan, 83 U.S. 271, 274, 21 L. Ed. 313 (1872. Better reasoned cases require the delivery of the note and the trust deed to the trustor in order to proceed in a non-judicial foreclosure action. Saxon Mortgage Services v. Hillery, 2008 U.S. Dist. LEXIS 100056, (N.D. Cal. 2008) "Under California law, only the holder of the promissory note is entitled to enforce it..." See also In re Vargas, 396 B.R. 511 (Bankr. C.D. Cal. 2008) “MERS must show that it is entitled to enforce the note. Only the holder of a negotiable promissory note (with minor exceptions not relevant in this case) is entitled to enforce the note. See CAL. COM. CODE § 3301. The holder enforces the note by making a demand for payment. See id. § 3501(a). The person making a demand shows its right to enforcement by showing the original of the promissory note. See id. § 3501(b)(2)” The Defendant has committed the fallacy of an “Irrelevant Conclusion.” The Defendant’s premise is based upon the erroneous premise that § 2932.5 applies only to

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mortgages and does not apply to deeds of trust. Cases holding otherwise are contrary to the terms of the statute. California Civil Code § 2932.5 reads as follows: “Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.” The cases cited by the Defendant ignore the term “encumbrancer.” An “encumbrancer” includes both a mortgagee and a deed of trust. An encumbrancer for value means a person who has taken or purchased a lien and who has parted with something of value in return. Triple A Management Co. v. Frisone (1999) 69 Cal.App.4th 520, 530 (Trust deed was an encumbrance within the meaning of § 2932.5.) The district court’s ruling in Roque v. Suntrust Mortgage, Inc. 2010 U.S. Dist. LEXIS 11546 is also based upon the erroneous premise that § 2932.5 applies only to mortgages. Under the maxim of statutory construction, expressio unius est exclusio alterius, a court may not add, subtract or imply additional terms to a statute. “Statutes must be interpreted, if possible, to give each word some operative effect.” Walters v. Metropolitan Educational Enterprises, Inc. (1997) 519 U.S. 202, 209. “We do not presume that the Legislature performs idle acts, nor do we construe statutory provisions so as to render them superfluous.” Shoemaker v. Myers (1990) 52 Cal.3d 1, 22. A trial court may not ignore the term “encumbrance” when it construes § 2932.5. Black's Law Dictionary 568 (8th ed. 2004), defines "encumbrancer" as "[o]ne having a legal claim, such as a lien or mortgage, against property." To limit the word “encumbrancer” to mortgages does violence to terms of the statute. The debt evidenced by the note is the principal thing; the trust deed is an accessory. The assignment of the note carries the trust deed with it; the assignment of the trust deed without the note is a nullity. In order to have a valid assignment, there must be more than just assignment of the trust deed alone; the note must also be assigned. See Carpenter v.
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Longan, 83 U.S. 271, 274, 21 L. Ed. 313 (1872); In re Leisure Time Sports, Inc. 194 B.R. 859, 861 (9th Cir. 1996) (stating that "[a] security interest cannot exist, much less be transferred, independent from the obligation which it secures" and that, "[i]f the debt is not transferred, neither is the security interest"); Kelley v. Upshaw, 39 Cal. 2d 179, 192, 246 P.2d 23 (1952) There can be no assignment of a security interest independent of the assignment of the underlying debt. Wolfe v. Leisure Time Sports, Inc. (In re Leisure Time Sports, Inc.), 194 B.R. 859, 861 (9th Cir. BAP 1996)(citing Union Supply Co. v. Morris, 220 Cal. 331, 338-39, 30 P.2d 394, 397 (1934)). This is not a mere technical legal requirement: To allow the assignee of a security interest to enforce the security agreement would expose the obligor to a double liability, since a holder in due course of the promissory note clearly is entitled to recover from the obligor. Furthermore, the definition of' security interest' in Section 1-201(37), Uniform Commercial Code--an interest in property which secures payment of an obligation-indicates that a security interest cannot exist without a debt. In re Leisure Time Sports, Inc., 194 B.R. at 861 (citations omitted). Consequently, IndyMac or FDIC 's attempt to assign its security interest without the note had no force or effect. IndyMac is currently in bankruptcy. The facts alleged by the Defendant are irrelevant and outside the complaint. 2. Plaintiff Has Properly Alleged Causes of Action Based on Defendant’s Violations of California Civil Code Sections 2923.5 Defendant’s argue that it has strictly complied with Cal. Civ. Code § 2935.5 and 2935.6. This is a disputed fact. It is apparent that Defendants have not complied with the terms of 2923.5(c); nor does the purported declaration comply with Section 2924f. “A demurrer is simply not the appropriate procedure for determining the truth of disputed facts, . . .” Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134, citing from Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879.” 3. This Court May Not Take Judicial Notice of the Truth of Disputed Facts The Court may not accept the truth of factual matters stated in a judicially-noticed document. This court is not permitted to take judicial notice of hearsay allegations in some statement that “the acquisition is a matter of public record.” There is a distinction between
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recognizing the existence of such matters as opposed to the truth asserted therein. Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879. “(Demurrer cannot address matters or introduce evidence extrinsic to the complaint. Childs v. State of California (1983) 144 Cal.App.3d 155, 163, citing from Cravens v. Coghlan (1957) 154 Cal.App.2d 215, 217 . While this Court may take judicial notice of the records and files in another action, it can only notice the existence of those documents, and not the truth of any disputed statements made therein.) Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1144. Meyer v. Graphic Arts International Union (1979) 88 Cal.App.3d 176, 179. Plaintiff respectfully submits that this Court cannot sustain a demurrer on the basis of the truthfulness of judicially-noticed disputed declarations. Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. (Demurrer overruled disputed declarations). This court is not permitted to take judicial notice of hearsay allegations in some statement that “the acquisition is a matter of public record.” There is a distinction between recognizing the existence of such matters as opposed to the truth asserted therein. Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879. “It is an elementary rule that the sole function of a demurrer is to test the sufficiency of the challenged proceeding. It cannot, properly, be addressed to or be based upon evidence or other extrinsic matters.” Childs v. State of California (1983) 144 Cal.App.3d 155, 163, citing from Cravens v. Coghlan (1957) 154 Cal.App.2d 215, 217. “The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374. 4. Defendant’s purported Declaration meets neither the requirements for judicial notice; nor the statutory requirements of a “Declaration.” Defendant’s Exhibit No. 3 does not meet the criteria for judicial notice; nor the legal requirements of a declaration. Exhibit No. 3 is wholly conclusory; based on hearsay, lacks a foundation and fails to comply with the plain statutory language contained in Civil Code § 2015.5.Delaney v. Superior Court (1990) 50 Cal.3d 785, 798 [268 Cal. Rptr. 753, 789 P.2d 934]
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A declaration under Civ. Code § 2015. 5 a is competent and admissible only if it contains (1) a certification or declaration that it is “true under penalty of perjury,” (2) the “subscri[ption]” of the declarant; (3) “date of execution,” and (4) certification or declaration under the laws of the State of California” and (5) place of execution of the declaration. The name of the purported Declarant is unclear and the place of execution is not identified. 5. Plaintiff Has Properly Alleged Causes of Action Based on Defendant’s Violations of California Civil Code Sections 2923.5 and 2923.6. Defendant’s Notice of Default did not include the declaration required by Section 2923.5(b) or (c). A court “may not take judicial notice of allegations in affidavits or declarations [that] ..are reasonably subject to dispute and therefore require formal proof. Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882. Plaintiff has clearly alleged that Defendants did not comply with either provision of Sections 2923.5 or 2923.6. That is, Defendants did not negotiate a loan modification in good faith and did not assess Plaintiff's financial situation and explore options to avoid foreclosure. See Plaintiff's Complaint, at paragraph ___. Therefore, as all of Plaintiff's claims for relief are based, in whole or in part, on proper allegations of Defendant’s violation of Section 2923.5 and 2923.6. Defendant’s' demurrer must be denied in its entirety as Plaintiff has properly alleged a violations of Section 2923.5 and 2923.6. Alternatively, Plaintiff respectfully requests leave of court to amend the complaint to further allege Defendant’s statutory violations. Defendants cite a federal district case for the proposition that no duties are owed, and no private cause of action is allowed, in connection with either Sections 2923.5 or 2923.6. even though there is a California appellate court ruling that is expressly contrary. Under California law, a private right of action exists under section 2923.5 which is not preempted by federal law. Mabry v. Superior Court, 185 Cal. App. 4th 208, 226 ( July 2010)

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Section 2923.6 was specifically created to address the foreclosure crisis and help borrowers. As noted in Sections 1 and 10 of the Legislative Intent behind the Statute, "SECTION 1. The Legislature finds and declares all of the following: "(a) California is facing an unprecedented threat to its state economy and local economies because of skyrocketing residential property foreclosure rates in California... (g) This act is necessary to avoid unnecessary foreclosures of residential properties and thereby provide stability to California's statewide and regional economies and housing market by requiring early contact and communications between mortgagees, beneficiaries, or authorized agents and specified borrowers to explore options that could avoid foreclosure and by facilitating the modification or restructuring of loans in appropriate circumstances." SECTION 10. (a) This act is an urgency statute necessary for the immediate II preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to stabilize and protect the state and local economies and housing market at the earliest possible time, it is necessary for this act to take effect immediately." SB 1137. Consequently, Section 2923.6, which was in effect at the time of the foreclosure at issue, provides that a duty is owed by lenders to effect a workout or modification is in the best interests of the parties if the loan is in default or default is reasonably foreseeable, and the recovery on the workout exceeds the anticipated recovery through a foreclosure based on the current value of the property. Thus, California Civil Code 2923.6(a) specifically creates a new duty not addressed in previous legislation. . Defendant is confused when it states that Section 2923.6 “does not require an offer

of a loan modification, “nor does any statute “create []a private right of action for borrowers.” loans to modify the terms of the loans or creates a private right of action for borrowers. '" Defendant’s Demurrer at P.8 para 2. Indeed, this is not the case. Defendant cite two federal district court cases, Farmer v. Countrywide Home Loans, 2009 WL 189025 (S.D.Cal., 2009), and Connors v. Home Loan Corp., 2009 WL 1615989 from San Diego. These two (non-binding) cases suffer flaws. Connor, in particular, is seriously

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flawed. Both Farner and Connors conclude that section 2923.6 does not create a private right of action for borrowers. The Connors court goes on to conclude that the Legislature did not intend to create such a private right because "[a] statute creates a private right of action only if the enacting body so intended." Connors, supra, 2009 WL 1615989. However, in this context, such an assertion by the Connors’ court effectively results in a judicial nullification of the statute. A private right of action is the only reasonable method of enforcement of the statute. It is difficult to imagine that the California Legislature did not intend a private right of action for borrowers. Such a judicial proclamation, without clear legislative intent to support it, renders the statute toothless. It cannot be what the legislature had intended See SB 1137, Section 1, subd. (g).and Mabry v. Superior Court, 185 Cal. App. 4th 208, 226 (July 2010) . Thus, a private right of action exists under Section 2923.6. Alternatively, as Plaintiffs claims for relief are only based on violations of Sections 2923.5 and 2923.6 and are not direct actions under either statute, the analysis is irrelevant. Accordingly, Plaintiffs allegations and claims for relief based on Defendant’s violations of Sections 2923.5 and 2923.6 are proper. Plaintiff Has Stated Causes of Action for Relief for Implied Covenant of Good Faith and Fair Dealing . Defendant essentially argues that they cannot be held liable for any acts of the other Defendants because it had no relationship with the Plaintiff. However, Defendant’s argument ignores the allegations of Plaintiffs complaint and governing law regarding civil conspiracy and joint ventures as set forth in the complaint. Contrary to Defendant’s assertion, a special relationship is not required because every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. Carma Developers, Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 371-372 5. The Tender Rule Is Inapplicable
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4.

Defendant cites several cases for the proposition that Plaintiff is required to tender the amount due on the loan that he allegedly had with Defendants. However, these cases are distinguishable as Plaintiff is not a junior lien holder but rather the trustor. Moreover, in Munger v. Moore (1970) 11 Cal App. 3d 1, 7, the court held that that "a trustee or mortgagee may be liable to the trustor or mortgagor for damages sustained where there has been an illegal, fraudulent or wilfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust." Similarly, Plaintiff alleges that the sale of his property was illegal and fraudulent. The court in Munger did not require a tender for the borrower to bring a claim against the trustor or mortgagor. Munger is directly on point; Defendant’s cases are factually distinguishable; consequently, the tender rule is inapplicable. 4. Plaintiff Has Properly Alleged Causes of Action Pursuant to California Business and Professions Code Section 17200 and 1750 No California appellate case has addressed the application of California Business and Professions ("B&P") Code Section 17200, et seq., to the business practices of subprime mortgage lenders and servicers at issue here. However, in Commonwealth v. Fremont Investment & Loan (2008) 452 Mass. 733 (2008) ("Fremont"), the Massachusetts Supreme Court recently undertook a thorough and persuasive analysis of its consumer protection statutes closely paralleling California's Section 17200 in the context of a mortgage lending `scheme virtually identical to that involved here. B&P § 17200 provides as follows: "As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive untrue or misleading advertising .." . The California state courts have repeatedly held that all that is necessary to establish a violation of B&P § 17200 et seq., is to show that the defendant is a business engaged in acts or practices that are unlawful, fraudulent or unfair. Thus, "there are three varieties of unfair competition: practices which are unlawful, unfair or fraudulent." Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal. App. 4th 824,837 (2006). The unlawful practices prohibited by the statute are any practices forbidden by law, be it civil or criminal,

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federal, state, or municipal, statutory, regulatory, or court made. Saunders v. Superior Court (1994) 27 Cal. App. 4th 832,838-39. It is not necessary that the predicate law provide for private civil enforcement. "Unfair," as used in the statute, simply means any practice whose harm to the victim outweighs its benefits. "Fraudulent," as used in the statute, does not refer to the common law tort of fraud but only requires a showing that members of the public are likely to be deceived. Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267. Here, Defendants engaged in a complicated scheme designed purely for their own financial benefit. As part of this scheme, and to induce Plaintiff to obtain the loan, Defendants proceeded by way of fraud, deceit, misrepresentation, civil conspiracy, and breaches of the general negligence duties of due care and due diligence, the fiduciary duty of trust and confidence existing between financial institutions and their customers, the duties of good faith and fair dealing that underlie all business dealings in the State of California, as well as violation of a number of statutory and duties imposed by the California Civil Code. Thus, by design, Defendant’s practices are highly "likely to deceive." The "unfair" prong of section 17200 intentionally provides courts with broad discretion to prohibit new schemes to defraud. Motors, Inc. v. Times-Mirror Co. (1980) 102 Cal. App. 3d 735, 740. An unlawful business practice or act is "unfair" when it "offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers. People v. Coso Blanca Convalescent Homes, Inc. (1984) 159 Cal. App. 3d 509, 530. "[T]he court must weigh the utility of the defendant's conduct against the gravity of the harm to the alleged victim." State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal. App. 4th 1093, 1104. Defendant’s business acts and practices, including: (1) inducing Plaintiff to obtain a risky high-interest rate, subprime loan they knew or should have known that he could not afford; (2) fraudulently misrepresenting to Plaintiff that he could refinance his loan within six months to secure a lower interest rate and affordable monthly payment; and (3) immediately buying, selling and reselling the loan in a whirlwind scheme of financial transactions offends established public policy and is immoral, unethical, oppressive, unscrupulous and substantially injurious to consumers. Plaintiff has properly alleged that Defendants engaged in deceptive, unfair and fraudulent conduct under both the "unlawful"
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and "unfairness" prongs of B&P § 17200. Also, when B&P § 17200 is applied to the complicated and convoluted subprime mortgage lending scheme by which Plaintiff was victimized, precisely the same determination of "unfairness" reached by the Massachusetts Supreme Court in applying its own corollary to B&P § 17200 to the nearly identical scheme at issue in Fremont, supra, should produce a parallel conclusion here. Beyond that, however, Plaintiff alleges a valid claim under the "unlawful" prong of § 17200 as well as the "unfairness" prong.

The Fremont court held in part: “…Fremont's subprime loan products offered a number of different features to cater to borrowers with low income. A large majority of Fremont's subprime loans were adjustable rate mortgage (ARM) loans, which bore a fixed interest rate for the first two or three years, and then adjusted every six months to a considerably higher variable rate for the remaining period of what was generally a thirty year loan. Thus, borrowers' monthly mortgage payments would start out lower and then increase substantially after the introductory two-year or three-year period. To determine loan qualification, Fremont generally required that borrowers have a debt-to-income ratio of less than or equal to fifty per cent -that is, that the borrowers' monthly debt obligations, including the applied for mortgage, not exceed one-half their income. However, in calculating the debt-to-income ratio, Fremont considered only the monthly payment required for the introductory rate period of the mortgage loan, not the payment that would ultimately be required at the substantially higher "fully indexed" interest rate. As an additional feature to attract subprime borrowers, who typically had little or no savings, Fremont offered loans with no down payment. Instead of a down payment, Fremont would finance the full value of the property, resulting in a "loan to-value ratio" approaching one hundred per cent. Most such financing was accomplished through the

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provision of a first mortgage providing eighty per cent financing and an additional "piggy-back loan" providing twenty per cent." Fremont, supra, at pp. 735-739. Under Massachusetts G.L. c. 93A § 2, the trial court found, and the Supreme Judicial Court confirmed that the business practices at hand were indeed "unfair." The court stated: "the record here suggests that Fremont made no effort to determine whether borrowers could 'make the scheduled payments under the terms of the loan.'" Fremont, supra, at pp. 745-746. Rather, as the judge determined, loans were made with the understanding that they would have to be refinanced before the end of the introductory period. Thus,

Fremont's actions were "unreasonable, and unfair to the borrower ..." The same is true here. Defendant’s scheme was, not only unlawful; it was unreasonable" and "unfair." It is in violation of the law, the harm to Plaintiff outweighs any benefit to Defendants, and it was likely to deceive. Defendants argue that they are immune from liability because they did not make the actual misrepresentations to Plaintiff. Defendants, however, cannot avoid liability under B&P 17200 because Plaintiff has properly alleged a scheme which includes all the defendants who made the representations and all of the entities that aided and abetted, profited, benefited and participated in the joint venture and conspiracy. See In re Countrywide Financial Corporation, 601 F. Supp. 2d 1201, 1220 (S.D. Cal. 2009). Thus, Defendants conduct constitutes a violation of B&P § 17200 pursuant to the unlawful, unfair, and fraudulent prongs, and they can be held liable for said conduct. Moreover, as set forth above, the violations of Sections 2923.5 and 2923.6 also provide a basis for a claim for relief based on violation of B&P § 17200. Accordingly, Defendant’s demurrer should be overruled. Plaintiff has Pled the Remedy of Injunctive Relief It is true that injunctive relief is a remedy. An injunction is an interim remedy designed to maintain the status quo pending a decision on the merits. It, however, is within
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the trial court's sound discretion to grant or deny an injunction (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69 [196 Cal.Rptr. 715, 672 P.2d 121].A trial court abuses its discretion by denying a preliminary injunction where the plaintiffs establish a "reasonable probability" of success on the merits and that they will suffer more harm from its denial than the defendant will from its grant. Friends of Westwood, Inc. v. City of Los Angeles (1987) 191 Cal.App.3d 259, 264 [235 Cal.Rptr. 788].) C. The Complaint Alleges Facts Sufficient to Maintain Plaintiff’s Cause of Action for Declaratory Relief In resolving a demurrer, a court should liberally construe the challenged pleading and overrule the demurrer where the Plaintiff has alleged facts sufficient to advance his claim. Colvig v. RKO General, Inc. (1965) 232 Cal.App.2d 56. The Complaint clearly states facts to showing that there is an actual dispute regarding the validity of Defendant’s foreclosure on the Subject Property. Defendant’s claim that they have legal authority to foreclose on Plaintiff’s home, that Plaintiff’s trust deed loan transaction and related documentation were entirely valid, and that Plaintiff remained obligated to under the terms thereof. The court has broad discretion to grant declaratory relief. See Schessler v. Keck (1954) 125 Cal.App.2d 827. Plaintiff seeks a declaratory determination from this court invalidating Defendant’s contentions herein and declaring their title to the Subject Property. See Washington Mutual Bank v. Blechman (2007) 157 Cal.App.4th 662, 668 [disputed claims to title after a foreclosure sale of property involved a controversy sufficient to maintain a claim for declaratory relief]. Thus, the Complaint alleges facts sufficient to seek declaratory relief and Defendant’s demurrer to Plaintiff’s cause of action for such relief should be overruled. D. The Complaint Alleges Facts Sufficient to Maintain Plaintiff’s Causes of Action for Fraud and Misrepresentation The means and mechanism by which this result was accomplished by the various Defendants proceeded by way of a complicated scheme involving fraud, misrepresentation,
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civil conspiracy, and breaches of the general negligence duties of due care and due diligence, the fiduciary duty of trust and confidence existing between financial institutions and their customers, the duties of good faith and fair dealing that underlie all contractual relationships in the State of California, as well as violation of a number of statutory and regulatory duties imposed by the California Civil and Business & Professions Codes. While the schemes of the Defendants, derived solely for their own financial benefit, were convoluted and complicated, the gravamen of Plaintiffs Complaint is simple. He contends that he was induced by the machinations and manipulation by Defendants to take out a loan which they knew or reasonably should have known, by exercising due diligence, he likely could not repay. When the inevitable and predictable result of that overreaching, unscrupulous conduct then came to pass, Defendants refused to deal with him fairly and in good faith, and, in the process, trampled upon a litany of duties imposed by statute, regulation, and well-established case law. In Defendant’s Demurrer, it attempts to establish that its foreclosure of the Subject Property was proper by extrinsic evidence. However, at the very least, Defendant’s own documents establish that there is a triable issue of fact as to whether it had the right to foreclose on the Subject Property. Defendant’s declaration fails to include all the elements required under the code or even meet the minimum requirements of a declaration. Defendant fails to attach a copy of the actual Note to its request for judicial notice. Instead, Defendants request judicial notice of the Deed of Trust Defendant references a note which apparently has not been assigned and is not in the possession of the Defendant. Accordingly, the foreclosure of the Subject Property was improper and in violation of applicable law. Plaintiff has lost his entire investment in the property. Moreover, as a result of his damaged credit, Plaintiff will not be able to purchase another home for a very long time. Plaintiff seeks to hold every member of the scheme liable for their conduct which has wreaked havoc on the United States economy in the last three years. CONCLUSION: Defendant has made improper allegations of fact contrary to the pleadings. Harboring Villas Homeowners Assn. v. Superior Court (1998) 63 C.A.4th 426, 429, 73
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C.R.2d 646. For all of the foregoing reasons, Plaintiff respectfully requests that this Court overrule Defendant’s Demurrer to Plaintiffs Third Amended Complaint in its entirety. Alternatively, if the Court finds that one or more of Plaintiffs causes olfaction have not been properly pled, Plaintiff respectfully requests leave of court to amend his complaint.

DATED: August 12, 2010

LAW OFFICES OF MELBOURNE B. WEDDLE Respectfully submitted, __________________ Melbourne B. Weddle Attorneys for Plaintiff, James Albertson

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