Aline Whitman v. Brent Roles, et al.

The FAC alleges Plaintiff obtained approval for a mortgage loan with Bank of America in August 2025 to buy the Property. (FAC, ¶ 18.) Plaintiff learned that a $300,000 deed of trust owed to Dutchints Development, LLC erroneously appeared as a lien on the Property. (FAC, ¶ 20.) Plaintiff informed Old Republic Title Company (Old Republic) that the loan had been paid off years earlier. (Id. at ¶ 21.) Old Republic issued a new preliminary title report removing the lien in late August 2025. (Id. at ¶ 22.) Defendant’s agent filed a fraud claim with Old Republic in early September 2025 based on the lien. (Id. at ¶ 23.) Old Republic cancelled its services, leaving Plaintiff been unable to secure title insurance or complete the transaction despite her diligence. (Id. at ¶ 24.)

Judgment was entered in Whitman I by ex parte order in late October 2025. (Exh. B to Defendant’s RJN.) The court in Whitman I later denied an ex parte application by Plaintiff to stay execution of a writ of possession for the Property. (Exh. F to Defendant’s RJN.)

At issue is Defendant’s demurrer and motion to strike, filed in the same document. Plaintiff filed a late opposition to this motion, and Defendant filed a late reply. The court will exercise its discretion to consider both untimely filings. (Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 765.) The parties and their counsel are admonished to comply with applicable filing deadlines in future filings.

REQUEST FOR JUDICIAL NOTICE 22

“Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code, § 450.) A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) (Silverado) 197 Cal.App.4th 282, 307.) Evidence Code section 453, subdivision (b), requires a party seeking notice to “[furnish] the court with sufficient information to enable it to take judicial notice of the matter.”

The court grants Defendant’s request for judicial notice of the following court filings from Whitman I:

Exhibit B: October 2025 Stipulated Judgment and Order for Possession of Premises (October 2025 Stipulated Judgment);

Exhibit D: Plaintiff’s Memorandum of Points and Authorities in Support of Ex Parte Application for Order Staying Execution of Writ of Possession (Ex Parte for Stay);

Exhibit F: November 2025 order denying Plaintiff’s ex parte application (November 2025 order).

As court records, they are proper subjects for judicial notice. (Evid. Code, § 452, subd. (d).) The court also takes judicial notice, on its own motion, of two facts related to Whitman I: (1) Defendant filed an ex parte application in Whitman I to enter the October 2025 Stipulated Judgment; and (2) Plaintiff did not oppose that application. (Ibid.) Defendant’s request for judicial notice of the remaining documents and facts is denied as not necessary or relevant. (Silverado, supra, 197 Cal.App.4th at p. 307.)

LEGAL STANDARDS FOR DEMURRER

In ruling on a demurrer, the court accepts as true all properly pleaded material factual allegations but does not accept as true contentions, deductions or conclusions of fact or law. (Valero v. Spread Your Wings, LLC (2023) 88 Cal.App.5th 243, 253 (Valero).) Code of Civil Procedure section 430.60 states that “[a] demurrer shall distinctly specify the grounds upon which any of the objections to the complaint, cross-complaint, or answer are taken. Unless it does so, it may be disregarded.” The California Rules of Court also require that the demurrer itself (distinct from a supporting memorandum) specify the target of any objection and the grounds. (Cal.

Rules of Court, rules 3.1103(c), 3.1112(a), 3.1320(a) [“Each ground of demurrer must be in a separate paragraph and must state whether it applies to the entire complaint, cross-complaint, or answer, or to specified causes of action or defenses.”].)

The court cannot consider extrinsic evidence when ruling on a demurrer. This includes declarations. The court has considered the declaration from defense counsel filed in support of the demurrer only to the extent it discusses the meet and confer efforts required by statute. Code of Civil Procedure section 430.41, subdivision (a), requires a demurring party to meet and confer “in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer.” Emails do not satisfy that standard. But a failure to meet and confer is not a basis to overrule a demurrer. (Code Civ. Proc., § 430.41, subd. (a)(4).)

DISCUSSION

Defendant demurs to the first cause of action for breach of the covenant of good faith and fair dealing on the ground of collateral estoppel. Defendant also demurs to the first and second causes of action on the ground that each fails to state facts sufficient to constitute a cause of action.

Collateral Estoppel

A general demurrer lies where the facts alleged in the complaint or matters judicially noticed show that a plaintiff’s claim is barred by collateral estoppel. (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 792.) Collateral estoppel bars relitigating issues that were argued and decided in a prior action. (DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 824.) Collateral estoppel applies “(1) after final adjudication (2) of an identical issue (3) actually litigated and necessarily decided in the first suit and (4) asserted against one who was a party in the first suit or one in privity with that party.” (Id. at p. 825.)

An issue is actually litigated when it is properly raised, by the pleadings or otherwise, and is submitted for determination and is determined. (Ayala v. Dawson (2017) 13 Cal.App.5th 1319, 1330.) “[C]ollateral estoppel should not be applied if there was no opportunity for a full presentation of the issue in the first proceeding.” (Wright v. Ripley (1998) 65 Cal.App.4th 1189, 1193 (Wright) [finding collateral estoppel did not bar a malicious prosecution action following a grant of summary judgment in an earlier action where the court refused to award sanctions without specifying the reasons for the refusal].)

The FAC raises the same argument and issue raised in Plaintiff’s Ex Parte for Stay in Whitman I. Plaintiff’s Ex Parte for Stay sought to stay execution of a writ of possession for the Property pending a hearing on a motion to vacate the October 2025 Stipulated Judgment. (RJN, Ex. D.) Plaintiff argued that Defendant directly interfered with her ability to perform the terms of the Settlement Agreement. (RJN, Ex. D at p. 1:14-16.) Plaintiff further argued that that interference was a pretense for Defendant to seek judgment for possession of the Property. (Ibid.)

Plaintiff contended that she would likely succeed on the merits of her claim that Defendant breached the Settlement Agreement. (Id. at p. 5:22-23.) The court in Whitman I (Judge Pennypacker) ultimately denied the ex parte application. (RJN, Ex. F.) The court’s four-sentence order stated, in relevant part, “The parties agreed to this process; [Plaintiff] is not likely to succeed in undoing it.” (Ibid.)

The Whitman I court’s November 2025 Order did not finally adjudicate an issue actually litigated by the parties. The ex parte procedure did not provide an “opportunity for a full presentation of the issue in the first proceeding.” (Wright, supra, 65 Cal.App.4th at p. 1193.) The November 2025 Order, at most, determined that Plaintiff was “not likely to succeed” in vacating the October 2025 Stipulated Judgment. It did not make any final determination on the issues raised in this action. (Barker v.

Hull (1987) 191 Cal.App.3d 221, 226 [“A mere showing that affidavits were submitted may not be sufficient to carry the burden of proving that the issue was actually litigated. Denial of a motion does not establish an estoppel if the basis for the denial cannot be determined.”].) Plaintiff’s failure to oppose Defendant’s ex parte application that led to entry of the October 2025 Stipulated Judgment also does not have a collateral estoppel effect. (See Murphy v. Murphy (2008) 164 Cal.App.4th 376, 401[“ ‘Clearly, a former judgment is not a collateral estoppel on issues which might have been raised but were not; just as clearly, it is a collateral estoppel on issues which were raised, 24

even though some factual matters or legal arguments which could have been presented were not.’”].)

Nor does the October 2025 Stipulated Judgment itself bar the current action. A stipulated judgment can have a preclusive effect only if the parties manifest an intent to be collaterally bound by its terms. (California State Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 664; Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 541.) Here, the language of the October 2025 Stipulated Judgment does not manifest such an intent. At most, it waives the right to appeal. (RJN, Ex. B, p. 3:16-17.)

The demurrer to the first cause of action on the ground of collateral estoppel is overruled.

Demurrer Based on Failure to State Sufficient Facts

First Cause of Action – Breach of the Implied Covenant of Good Faith and Fair Dealing

Defendant argues that the first cause of action fails to allege: (1) that all preconditions for Defendant’s performance of the Settlement Agreement occurred; (2) that Defendant prevented Plaintiff from benefitting from the Settlement Agreement; and (3) that Defendant acted in bad faith.

“There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658.) “In California, the factual elements necessary to establish a breach of the covenant of good faith and fair dealing are: (1) the parties entered into a contract; (2) the plaintiff fulfilled his obligations under the contract; (3) any conditions precedent to the defendant’s performance occurred; (4) the defendant unfairly interfered with the plaintiff’s rights to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant’s conduct.” (Rosenfeld v. JPMorgan Chase Bank, N.A. (N.D. Cal. 2010) 732 F. Supp.2d 952, 968.)

The FAC alleges Plaintiff and Defendant entered into the Settlement Agreement, and that Plaintiff fully performed. (FAC, ¶¶ 26, 29.) After learning about the erroneous $300,000 lien, Plaintiff informed Old Republic of the error. (Id. at ¶ 30.) Old Republic issued a new preliminary title report that removed the lien. (Ibid.) But Defendant’s agent filed a fraud claim with Old Republic shortly thereafter, causing Old Republic to cease its services. (Id. at ¶ 31.) The FAC alleges Defendant’s fraud claim was designed to prevent closing of escrow on the Property. (Id. at ¶ 32.) The FAC adequately alleges a cause of action for breach of the implied covenant of good faith and fair dealing.

Defendant argues the FAC fails to allege the preconditions for Defendant’s performance because the lien created a condition that prevented his ability to convey clear title. (Demurrer, p. 9:1-3.) Defendant also contends that he did not act in bad faith or prevent Plaintiff from benefitting from the Settlement Agreement. (Demurrer, p. 9:6-7, 9:23-24.) Defendant argues that because he contacted Old Republic as part of his contractual obligation to convey clear title, he acted to the benefit of both parties in good faith. These arguments overlook the allegations that a new preliminary title clearing the lien was issued in late August 25

2025, before Defendant initiated its fraud claim in early September 2025 and the deadline to close escrow in October 2025. (FAC, ¶¶ 16(a), 16(d), 30-31.) Defendant’s arguments would require the court to weigh evidence, which the court cannot do on demurrer.

The demurrer to the first cause of action for failure to state sufficient facts is overruled.

Second Cause of Action – Interference with Prospective Economic Advantage

Defendant argues the second cause of action fails to state sufficient facts because: (1) it fails to allege a future economic benefit; (2) Defendant cannot be liable for interference because he had a direct financial interest in the loan approval; and (3) the FAC does not allege an independently wrongful act designed to disrupt the relationship.

As an initial matter, the court notes that the demurrer provides a rule statement for intentional interference with prospective economic advantage, instead of the negligent interference with prospective economic advantage cause of action alleged in the FAC. (Compare Demurrer, p. 10:2-9 with FAC, ¶ 35.) The demurrer also discusses cases about the tort of intentional interference with contract, which is not relevant to the tort alleged in the FAC.

Negligent interference with prospective economic advantage has six elements: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) the defendant’s actual or constructive knowledge that the relationship would be disrupted if defendant failed to act with reasonable care; (4) defendant’s failure to act with reasonable care; (5) actual disruption of the relationship; and (6) economic harm proximately caused by the defendant’s action. (Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1078.)

The FAC alleges that Defendant negligently interfered with the economic relationship between Plaintiff and Bank of America as lender. (FAC, ¶¶ 35-36.) The relationship would have led to a future economic benefit—i.e., financing to purchase the Property. (Id. at ¶ 36.) Defendant knew of the relationship because Plaintiff’s agent informed him of Plaintiff’s loan approval. (Id. at ¶ 37.) Defendant failed to exercise reasonable care and interfered with the relationship by filing a fraud claim with Old Republic. (Id. at ¶ 44.) The fraud claim caused Old Republic to cancel its services. (Id. at ¶ 24.) Consequently, Plaintiff could not secure title insurance, which interfered with her agreement with Bank of America. (Id. at ¶ 45.) The foregoing adequately states a cause of action for negligent interference with prospective economic advantage.

Defendant argues the FAC does not allege facts establishing how a prospective debt could constitute a future economic benefit between Plaintiff and Bank of America. (Demurrer, p. 10:11-16.) But the FAC identifies the future economic benefit as secured financing for Plaintiff’s purchase of the Property. (FAC, ¶ 36.) The allegation is accepted as true for purposes of demurrer. (Valero, supra, 88 Cal.App.5th at p. 253.)

Defendant next argues that because it had an interest in the loan approval, it cannot be liable for interference with its execution. (Demurrer, p. 11:5-9.) Defendant cites Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514 for the proposition that 26

“the tort cause of action for interference with contract does not lie against a party to the contract.” That case is distinguishable because it involved a cause of action for intentional interference with contract. PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55, 65, is distinguishable for the same reason.

Defendant argues the FAC fails to identify the wrongful act that disrupted the economic relationship. (Demurrer, p. 12:7-8.) But the FAC identifies Defendant’s fraud claim as the wrongful act. The FAC alleges Defendant’s fraud claim with Old Republic prevented Plaintiff from securing title insurance, which prevented Plaintiff from proceeding with the agreement with Bank of America. (FAC, ¶¶ 24, 44-45.) The FAC alleges Defendant acted negligently in making the fraud claim. Defendant’s representation that the fraud claim was “legitimate” is inconsistent with the FAC’s allegations and would require the court to weigh evidence, which it cannot do on demurrer. The second cause of action’s allegations are adequate to survive demurrer.

The demurrer to the second cause of action on the ground of the failure to state sufficient facts is overruled.

LEGAL STANDARDS FOR MOTION TO STRIKE

Under Code of Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading, or strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. This includes pleadings that seek an improper remedy. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680.) The grounds for a motion to strike must appear on the face of the challenged pleading or from matters of which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) In ruling on a motion to strike, the court reads the challenged pleading as a whole and assumes the truth of all well-pleaded allegations. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.)

Here, Defendant seeks to strike the following:

1. Text on the caption page stating a third cause of action for “Intentional Interference with Contract”;

2. The entire paragraph 2 of the prayer for relief alleging: “For an order requiring Defendants to show cause, if they have any, why they should not be enjoined as set forth below, during the pendency of the action”;

3. The entire paragraph 3 of the prayer for relief alleging: “For a temporary restraining order, preliminary and permanent injunction preventing Defendants, or anyone acting in concert with them, from collecting on the subject loan until the amount of the loan is determined and from causing the Property to be sold, assigned, transferred to a third-party, or taken by anyone or any entity”; and

4. The demand for “disgorgement” and “injunctive relief” alleged in paragraph 4 of the prayer for relief.

Plaintiff acknowledges that items 1 and 3 must be stricken. Defendant’s motion to strike the Intentional Interference with Contract and the entirety of paragraph 3 of the prayer for relief is granted without leave to amend. Plaintiff asserts, however, that the remaining items are not subject to strike.

Paragraph 2 of the prayer for relief seeks a preliminary injunction. Code of Civil Procedure section 527, subdivision (a) provides in relevant part, “A preliminary injunction may be granted at any time before judgment upon a verified complaint, or upon affidavits if the complaint in the one case, or the affidavits in the other, show satisfactorily that sufficient grounds exist therefor.” The FAC is unverified. Plaintiff submits no affidavits showing sufficient grounds to grant a preliminary injunction. The same reasoning applies to the portion of paragraph 4 of the prayer for relief seeking “injunctive relief.” The challenged language must be stricken.

Defendant argues that the demand for “disgorgement” in paragraph 4 of the prayer for relief must be stricken because there is no factual or legal basis for Plaintiff’s request. The FAC does not allege Defendant took any money from Plaintiff. There is no basis for disgorgement.

Plaintiff’s opposition does not meet the burden to identify how an amendment could cure the defects identifies in the motion to strike. The court will nonetheless grant leave to amend because this is the first pleading challenge. (Price v. Dames & Moore (2001) 92 Cal.App.4th 355, 360.)

Defendant’s motion to strike the entirety of paragraph 2 of the prayer for relief and the demand for “disgorgement” and “injunctive relief” in paragraph 4 of the prayer for relief is granted with leave to amend.

CONCLUSION

The demurrer to the first cause of action on the ground of collateral estoppel is overruled.

The demurrer to the first and second causes of action on the ground of the failure to state sufficient facts is overruled.

The motion to strike “Intentional Interference with Contract” from the caption page and paragraph 3 of the prayer for relief in its entirety is granted without leave to amend.

The motion to strike paragraph 2 of the prayer for relief in its entirety and the demand for “disgorgement” and “injunctive relief” in paragraph 4 of the prayer for relief is granted with leave to amend. The court does not grant leave to add any new parties or causes of action. (Zakk v. Diesel (2019) 33 Cal.App.5th 431, 456.)

Any amended complaint must be filed and served no later than September 14, 2026. The deadline for a responsive pleading will be either 30 days after the amended complaint is filed and served, or 30 days after September 14, 2026 (if no amended complaint is filed).

The court will prepare the order. - oo0oo - 28