John J. Giglio v. Carrington Mortgage Services, LLC

John J. Giglio v. Carrington Mortgage Services, LLC 25CV001170

[1] DEMURRER TO SECOND AMENDED COMPLAINT BY DEFENDANT CARRINGTON MORTGAGE SERVICES, LLC

TENTATIVE RULING: The demurrer is SUSTAINED. Plaintiff is granted 10 calendar days’ leave, from entry of the instant order, to amend the SAC. However, this leave is limited to stating a good claim for Breach of the Covenant of Good Faith and Fair Dealing unless Plaintiff requests oral argument, pursuant to Local Rule 2.9, and persuades the Court that there is a reasonable possibility that he can amend to state a good claim for Promissory Fraud and/or Intentional Misrepresentation.

A. PRELIMINARY MATTERS

Defendant Carrington Mortgage Services, LLC (Carrington) demurs, pursuant to Code of Civil Procedure 430.10, subdivision (e), to the Breach of Covenant of Good Faith and Fair Dealing (Second COA), Promissory Fraud, and Intentional Misrepresentation Causes of Action asserted by Plaintiff through the Second Amended Complaint (SAC).

Mr. Giglio filed the SAC following the Court’s April 21, 2026, Minute Order (4/21/26 M.O.) sustaining, in part, Carrington’s demurrer to the First Amended Complaint (FAC).

The instant action arises out of allegations of a declaration, by Carrington, of default, by Mr. Giglio, on a mortgage loan secured by his residence, and ensuing steps, by Carrington, towards foreclosure and trustee’s sale. Pursuant to the allegations in the FAC, such foreclosure and trustee’s sale were avoided, and the loan has been modified. (See id. at ¶¶ 36-37.) Mr. Giglio alleges that, nonetheless, “[a]s a . . . result of Carrington’s conduct, including its false claims about its willingness to review Plaintiff’s May 2025 loan modification application and provide him with one if the application showed he qualified, failure to provide Plaintifff for [sic] a loan modification until after filing his lawsuit and obtaining injunctive relief, failure to timely provide Plaintiff with a reinstatement quote until it was too late for him to reinstate, and threatening foreclosure and the loss of his primary residence when it was not allowed by law, Plaintiff suffered damages.” (Id. at ¶ 38.)

B. LEGAL BACKGROUND

A complaint must contain “facts constituting the cause of action.” (Code Civ. Proc., § 425.10, subd. (a)(1).) “The party against whom a complaint or cross-complaint has been filed may object, by demurrer . . . to the pleading on . . . grounds [that] . . . [t]he pleading does not state facts sufficient to constitute a cause of action . . ..” (Code Civ. Proc., § 430.10.) A demurrer on grounds that a plaintiff has failed to state a claim is treated as “admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Blank v.

Kirwan (1985) 39 Cal.3d 311, 318.) Such a demurrer “‘does not admit . . . facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.’ [Citation.]” (Kenneth Mebane Ranches v. Superior Court (1992) 10 Cal.App.4th 276, 291-292.) The Court must “construe the allegations of a complaint liberally in favor of the pleader.” (Skopp v. Weaver (1976) 16 Cal.3d 432, 438.) Court must also accept as true facts that may be inferred from those expressly alleged. (Cundiff v.

GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1405.) The Court may also consider as grounds for a demurrer any matter that is judicially noticeable under Evidence Code sections 451 or 452. (Code. Civ. Proc., § 430.30, subd. (a).) Because, “[a] demurrer tests only the legal sufficiency of the pleading...the question of plaintiff’s ability to prove the[] allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Comm. on Children’s Television, Inc. v. Gen. Foods Corp. (1983) 35 Cal.3d 197, 213-14.)

C. LEGAL ANALYSIS

1. Breach of the Covenant of Good Faith and Fair Dealing

“‘Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.’ [Citation.]” (Carma Devs. (Cal.), Inc. v. Marathon Dev. California, Inc. (1992) 2 Cal.4th 342, 371.) “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.” (Id. at 373.)

Carrington asserts that the SAC fails to allege facts sufficient to state a claim for Breach of the Implied Covenant of Good Faith and Fair Dealing “because Plaintiff still does not plead the specific contract terms allegedly breached, Defendant’s status as a contracting party to Plaintiff’s Note or Deed of Trust, Plaintiff’s own performance, any express contractual benefit frustrated by Defendant, or damages caused by any contractual interference rather than by Plaintiff’s admitted loan default.” (Notice of Demurrer at 3:4-8.)

Carrington’s first assertion – that the SAC fails to allege “specific contract terms allegedly breached” – is irrelevant to the instant claim. “[B]reach of a specific provision of the contract is not a necessary prerequisite” to a claim for Breach of the Covenant of Good Faith and Fair Dealing. (Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 373 (Carma).)

However, the Court finds merit in Carrington’s remaining arguments.

In sustaining Carrington’s demurrer to the FAC, the Court noted that it was “unable to find, in the FAC, allegations of a contract by and between Mr. Giglio and Carrington.” (4/21/26 M.O.) Mr. Giglio attempts to cure this defect by alleging that “In about March of 2007, Plaintiff executed a Note and a Deed of Trust to obtain a home loan (the ‘Loan’). The Deed of Trust for the Loan was recorded on title the Property [sic] on April 5, 2007. In 2021, Truman Capital Advisors, LP (‘Truman’) purchased a pool of mortgage loans from the Federal Housing Finance Agency (‘FHFA’) that included the Loan.

By purchasing the Loan, Truman gained all of the contractual rights to the Loan. . . . In 2024, Carrington acquired some of the rights to the Loan from Truman when it became the Loan’s servicer, including but not limited to the rights to collect payments and to enforce the power of sale clause.” (SAC at ¶¶ 11-14, 16.) In this context, Plaintiff alleges that “Carrington breached the implied covenant of good faith and fair dealing frustrating and preventing Plaintiff’s performance under the Note and Deed of Trust for the Loan.

Carrington engaged in conscious and deliberate acts that frustrated Plaintiff's right to benefit from the Note and Deed of Trust for the Loan.”

The Court agrees that the SAC fails to allege the contract giving rise to the Second COA. The definition for the term “Loan,” set forth in paragraph 11 of the SAC, cannot reasonably be construed as describing a contract. As such, the allegation that Carrington “acquired some of the rights to the Loan” is insufficient to allege a contractual relationship between Mr. Giglio and Carrington. Even if the term “Loan” could be read to refer to a contract, the abstract allegation that Carrington acquired some unspecified rights thereto is insufficient to create an obligation, on Carrington’s part, “to discharge contractual responsibilities.” (Careau, supra, 222 Cal.App.3d at 1395.)

Moreover, again assuming arguendo that the term “Loan” can be read as a contract, the Court finds the allegations of the SAC wholly insufficient to identify how any conduct by Carrington “unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of [Mr. Giglio] thereby depriving [him] of the benefits of [an] agreement.” (Careau, supra, 222 Cal.App.3d 1395.) This is due to the fact that the SAC fails to identify any “common purpose” of such contract, and further fails to identify any of Mr. Giglio’s expectations relating thereto.

Based on the foregoing, the demurrer is SUSTAINED as to the Second COA.

It is an abuse of discretion for a court to deny leave to amend where there is any reasonable possibility that a Plaintiff can state a good cause of action. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (Goodman).) The Court continues to find, from the allegations of the SAC a possibility that Mr. Giglio can amend to state a good claim for Breach of the Covenant of Good Faith and Fair Dealing.

In order to do so, however, Mr. Giglio must plead, not only the existence of a specific contract between himself and Carrington, but also “essential facts . . . sufficient to acquaint . . . defendant with the nature, source and extent of his cause of action.” ((Doheny Park Terrace Homeowners Association., Inc. v. Truck Insurance Exchange (2005) 132 Cal.App.4th 1076, 1098-1099 (Doheny Park).) To this end, the Court stresses that “[i]t 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, supra, 2 Cal.4th at 373. Italics added.) Thus, allegations of these purposes and express terms are required.

Moreover, “[A]llegations which assert such a claim must show that the conduct of the defendant, whether or not it also constitutes a breach of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement. Just what conduct will meet these criteria must be determined on a case by case basis and will depend on the contractual purposes and reasonably justified expectations of the parties. (Careau, supra, 222 Cal.App.3d at 1395.)

If Mr. Giglio unsuccessfully attempts to amend the SAC to allege a good claim for Breach of Covenant of Good Faith and Fair Dealing, the Court will be disinclined to grant him additional leave unless, through any opposition to any subsequent demurer, he is able to clearly articulate how he can further amend the operative pleading to state such claim.

2. Promissory Fraud and Intentional Misrepresentation Claims

As the Court noted in its 4/21/26 M.O., “In California, fraud must be pled specifically; general and conclusory allegations do not suffice. Thus, the policy of liberal construction of the pleadings will not ordinarily be invoked to sustain a pleading defective in any material respect. This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. A plaintiff’s burden in asserting a fraud claim against a corporate employer is even greater.” (Lazar v.

Super. Ct. (1996) 12 Cal.4th 631, 645 (Lazar). Internal quotes and citations omitted.) “The requirement of specificity in a fraud action against a corporation requires the plaintiff to 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. (1991) 2 Cal.App.4th 153, 157 (Tarmann), italics added; see also Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645 (Lazar).)

While “the requirement of specificity is relaxed when the allegations indicate that ‘the defendant must necessarily possess full information concerning the facts of the controversy,’ a demurrer for failure to allege these details is properly sustained where the allegations indicate that “[defendant] has no more reason to know who made the allegedly false representations to [plaintiff] than [plaintiff].” (Tarmann, supra, at p. 158.)

Mr. Giglio fails to allege fraudulent representations with the requisite specificity. Mr. Giglio fails to name the person who made the alleged representations. (See SAC at ¶¶ 21-24, 28, 29, 31, [“Carrington employee(s)”], and 63-65, 67-74, 77-78, and 80-85 [“authorized representative(s)”]. The Court further finds that Mr. Giglio’s allegations that the representations were made “in May of 2025” is insufficient as to when the representations were made. (Id. at ¶¶ 21-25, 28.) The Court does not find that the nature of the allegations indicates that Carrington “must necessarily possess full information concerning the facts of the controversy.” (Tarmann, supra, 2 Cal.App.4th at 157.)

Through his Opposition, Mr. Giglio contends that he has sufficiently alleged that such employees were authorized to make the alleged representations. (See id. at 6:7-16.) He does not, however, address the fact that the SAC does not name a single person who is alleged to have made any representations supporting the fraud claims, or provide the date on which any of the alleged representations were made.

Based on the foregoing, the demurrer is SUSTAINED as to the Promissory Fraud and Intentional Misrepresentation Claims.

Moreover, Mr. Giglio acknowledges, through his Opposition, that he “is not sure of the full names of the persons he spoke with over the telephone.”2 (Opposition at 7:8-9.) It appears, to the Court, that the foregoing acknowledgement eliminates any reasonable possibility that Mr. Giglio can amend the SAC to allege facts with the specificity required to support a claim for fraud against Carrington. (See Goodman, supra, 18 Cal.3d 335, 349 [held: while it is an abuse of discretion for a court to deny leave to amend where there is any reasonable possibility that a Plaintiff can state a good cause of action, the pleading party bears the burden of showing such reasonable possibility]; see also Tarmann, supra, 2 Cal.App.4th at 158 [held: where defendant “has no more reason to know who made the allegedly false representations to [plaintiff] than [plaintiff] . . . the court properly sustained the demurrer to the fraud claim without leave to amend”].)

Mr. Giglio fails, through the Opposition, to suggest any such amendment.

Based on the foregoing, the demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the Promissory Fraud and Intentional Misrepresentation Claims. If Mr. Giglio believes that he can amend to state good fraud claims, he may request oral argument, pursuant to Local Rule 2.9, and appear prepared to describe such proposed amendments for the Court.

[2] MOTION TO STRIKE PORTIONS OF PLAINTIFF’S SECOND AMENDED COMPLAINT

TENTATIVE RULING: The motion is GRANTED IN PART. The Court STRIKES Paragraph 4 of the Prayer for Relief section of the Second Amended Complaint (SAC). (See id. at 11:17.) The motion is DENIED in all other respects. Plaintiff John J. Giglio is granted 10 calendar days’ leave, from entry of the instant order, to amend the SAC to allege specific facts sufficient to support a finding that Defendant Carrington Mortgage Service, LLC’s acts, as alleged in the SAC, were undertaken with malice or oppression.

Defendant Carrington Mortgage Services, LLC (Carrington) moves, pursuant to Code of Civil Procedure sections 435 and 436, for an order striking portions of Plaintiff’s Second Amended Complaint (SAC). Specifically, Carrington asks the Court to strike: (1) the phrase “including mental anguish and emotional distress” from Paragraph 2 of the Prayer for Relief; (2) Paragraph 4 of the Prayer for Relief in its entirety; and (3) various allegations in Paragraphs 38 and 75 of the body of the SAC. (See Notice of Motion at 2:1-18.)

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code of Civ. Proc., § 436, subd. (a).) “The appropriate procedural device for challenging a portion of a cause of action seeking an improper remedy is a motion to strike.” (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 385.)

2 To be clear, it appears that Plaintiff is unable to provide any names for any of the “Carrington employees” and “authorized representatives” alleged to have made the subject representations.

The Court finds no good cause for striking the subject allegations of paragraphs 38 or 75 of the SAC. The Court does not find that these allegations introduce ambiguities into the pleading or render it uncertain. The motion is, therefore, DENIED as to these allegations.

Moreover, emotional distress is one possible component of the “actual damages” available through a claim under the Rosenthal Fair Debt Collections Practices Act (Act). (See Civil Code § 1788.30; see also Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 341, fn. 3 [“It is not disputed that . . . ‘actual damages’ recoverable under the Act (§ 1788.30) include those for the plaintiff’s emotional distress”].)

Mr. Giglio asserts a claim for violation of the Act through the SAC. (See id. at 6:1, et seq.)

For this reason, the Court does not find good cause for striking the phrase “including mental anguish and emotional distress” from Paragraph 2 of the Prayer for Relief.

Through the Reply, Carrington asserts that the instant motion “challenges Plaintiff’s global emotional-distress allegations in paragraph 38 and the prayer. Those allegations are incorporated into all causes of action and seek non-economic damages generally. To the extent the Court concludes emotional distress may be available as actual damages under the Rosenthal Act, the proper remedy is to limit any such damages to the First Cause of Action and strike or narrow the common and prayer language to prevent Plaintiff from seeking emotional-distress damages under the implied covenant and fraud-based claims.” (Reply at 4:17-22.)

Carrington cites to no authority in support of the assertion that this is the “proper remedy.” The Court is unconvinced that striking the subject allegations and prayer are an appropriate means for ensuring that Mr. Giglio is awarded only those damages permitted for each asserted claim.

To support a prayer for punitive damages, a complaint must contain allegations that the defendant has been guilty of oppression, fraud, or malice. (Civil Code § 3294, subd. (a); Turman v. Turning Point of Central Cal., Inc. (2010) 191 Cal.App.4th 53, 63.)

As discussed in the concurrent ruling on Carrington’s Demurrer to the SAC, the Court finds that Mr. Giglio has failed to allege facts sufficient to state a claim for fraud.

“Malice” includes “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civil Code § 3294, subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Id. at subd. (c)(2).) Allegations of these elements must be pled with exactitude. (G.D. Searle & Co. v. Super. Ct. (1975) 49 Cal.App.3d 22, 27 (G.D. Searle).) “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.” (Id. at 29.)

Moreover, mere conclusory allegations parroting the language of the statute will not suffice to support a prayer for punitive damages. (Smith v. Super. Court (1992) 10 Cal.App.4th 1033, 1042.

The Court finds no factual allegations in the SAC that Carrington acted with oppression or malice. Mr. Giglio asserts that he “alleges that Carrington engaged in various acts because Carrington was motivated by a desire to engineer a foreclosure of his home in order to recoup the late, foreclosure, and other fees from the foreclosure sale. Foreclosing and then evicting a person from their home without justification is despicable conduct.” (Opposition at 3:20-23.) He fails, however, to cite to any such allegations.

No such allegations are immediately apparent to the Court. Moreover, it is not the Court’s obligation to search for them. (See Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal. App. 4th 927, 934 [“Rules of Court rule 3.1113 rests on a policy-based allocation of resources, preventing the trial court from being cast as a tacit advocate for the moving party's theories by freeing it from any obligation to comb the record and the law for factual and legal support that a party has failed to identify or provide”].)

Based on the foregoing, the Court does not find that the factual allegations of the SAC are sufficient to support a prayer for punitive damages. The Court, therefore, finds good cause for striking that prayer from the SAC.

It is an abuse of discretion for a court to deny leave to amend where there is any reasonable possibility that a Plaintiff can state a good cause of action. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (Goodman).) The Court finds, from the allegations of the SAC, a possibility that Mr. Giglio can amend to allege facts that would support a finding of malice or oppression. Therefore, the Court grants Mr. Giglio leave to amend the SAC for this limited purpose.

Alexander Rowland et al v. Newco Capital Group LLC et al 25CV002471

MOTION TO BE RELIEVED AS COUNSEL

TENTATIVE RULING: The Motion is DENIED WITHOUT PREJUDICE.

The Court has never obtained Jurisdiction to hear the instant Motion. (See Diaz v. Prof. Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1204-05 [“The court lacks jurisdiction to rule on a motion that has not been properly noticed for hearing on the date in question”].)

The Court has given counsel three opportunities to properly serve Notice of the Motion and hearing. As noted in the Minute Order of May 5, 2026, the original service did not provide adequate notice of the original hearing. Despite the Court’s express order that Counsel provide adequate notice in advance of the June 2, 2026, hearing, there is no proof in the Court’s file that any notice of that hearing was provided.

Counsel’s latest effort at providing formal Notice of hearing fails as service was made by email with only 16 days’ notice (June 19, 2026, was a Court holiday), without providing two additional days as required by Code of Civil Procedure section 1010.6, subd. (a)(3)(B).).

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