Gallagher-Renta v. Superior Loan Servicing, LLC

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right, should be returned” (Rubinstein v. Fakheri (2020) 49 Cal.App.4th 797, 809-811.)

Common counts are “a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness...” (Korchemny v. Piterman (2021) 68 Cal.App.5th 1032, 1047.)

All that must be alleged to state a cause of action for a common count is (1) statement of indebtedness; (2) consideration (services rendered, money received, etc.); and (3) nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) Common Counts are generally not subject to demurrer. (Id.)

However, “[w]hen a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.” (Korchemny, supra. 68 Cal.App.5th at 1048.)

In sum, common counts may be pleaded entirely with legal conclusions, and thus are not appropriately challenged on demurrer except to the extent the common counts are derivative of an underlying claim that is found to be legally insufficient. Here, since the demurrer is OVERRULED as to the quantum meruit, implied contract, and UCL claims, the demurrer must also be OVERRULED as to each of the common counts.

The case management conference is continued to February 1, 2027 at 9:00 a.m. in Department C28.

Plaintiff shall provide notice of this ruling.

56. Gallagher- Defendant Superior Loan Servicing, LLC’s (“SLS”) Demurrer to Renta v. the Complaint is SUSTAINED. Superior Defendant’s Request for Judicial Notice is GRANTED as to Loan Exhibits 1-4. (Evid. Code § 452(c).) Servicing, LLC First Cause of Action – Violation of HBOR 2026- Plaintiffs allege violations of Sections 2923.5 and 2923.55 01569564 alleging SLS: (1) failed to comply with contact Plaintiffs in a “meaningful or legally complaint manner” to assess their financial circumstances; (2) failed to provide accurate information regarding how to make payments; and (3) because of the lack of meaningful contact prior to the notice of

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default the affidavit on the notice of default is deficient. (Complaint, ¶¶27-30).

Civil Code section 2923.5 precludes a trustee or mortgage servicer from recording a notice of default until 30 days after the loan servicer has made initial contact with the borrower to assess the borrower’s financial situation and explore options for avoiding foreclosures, or has satisfied the due diligence requirements of the statute. (Civ. Code § 2923.5(a)(1).) Due diligence requires sending a letter by first class mail, making three attempts to contact the borrower by telephone, and sending a certified letter if no response is received within two weeks of the telephone attempts. (Civ. Code § 2923.5(e).)

Civil Code section 2923.55 is similar but not identical to Section 2923.5. Application of Sections 2923.5 or 2923.55 depends on the entity’s number of foreclosures in a reporting period. (See Civ. Code §§ 2923.5(g); 2923.55(g).) Section 2923.5 applies to entities with more than 175 foreclosures in a reporting period while section 2923.55 applies to entities that had fewer than 175 foreclosures in a reporting period. (Civ. Code § 2924.18(c).)

Relief Afforded

Defendants assert that the only remedy afforded by Section 2923.5 is a one-time postponement of the foreclosure sale before it happens. (Mabry v. Superior Court (2010) 185 Cal.App.4th 208, 213-214.)

Here, the trustee’s sale occurred on May 21, 2026, and the Trustee’s Deed Upon Sale conveying the Property to the foreclosing beneficiary, Structured Capital 1 LLC, was recorded on June 9, 2026. (RJN, Exh. 4.) Plaintiffs filed this Complaint on May 14, 2026, one week before that sale; the sale has since closed, and title has passed to a third party.

Mabry, however, was decided pre-HBOR. Under the HBOR violations of Sections 2923.5 and 29.23.55 are governed by Civil Code sections 2924.12 and 2924.19, which provide two distinctive remedies. Before the trustee’s deed upon sale is recorded, a borrower may bring an action for injunctive relief to enjoin a material violation of section 2923.5. (Civ. Code. §§ 2924.12(a), 2924.19(a).) After a trustee’s deed upon sale has been recorded, a mortgage service is now liable to a borrower for actual economic damages resulting from a material violation of Sections 2923.5 and 2923.55 that was not corrected before the sale. (Civ. Code §§ 2924.12(b),

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2924.19(b).) Therefore, Plaintiffs may be entitled to economic damages even though the deed upon sale has been recorded.

Even if monetary damages are available, they are only available for a “material” violation. In this case, Plaintiffs have failed to plead a causal connection between their damages and a material violation of the statutes.

Accordingly the demurrer to the first cause of action is SUSTAINED on this ground as Plaintiffs have failed to adequately plead they are entitled to the relief sought.

Contact with Defendants

Defendant contend Plaintiffs have failed to allege a violation of Sections 2923.5 and 2923.55. Sections 2923.5 and 2923.55 are satisfied by contact or due diligence attempts, and the Complaint describes the repeated back and forth communications with Defendant. Plaintiffs merely allege Defendants did not contact them in a “meaningful or legally compliant manner.” (Complaint, ¶ 28.) But “meaningful” is not a requirement under the operative statutes.

The Complaint lacks sufficient allegations regarding how Defendant violated Sections 2923.5 and 2923.55. Although the Complaint states Defendant failed to provide accurate information regarding their loan, thereby undermining Plaintiffs’ ability to avoid default, there are no allegations regarding when Defendant provided this inaccurate information. Sections 2923.5 and 2923.55 only require a mortgage servicer to make contact or act with due diligence in attempting to contact the borrower prior to foreclosure. There is no mention of liability of the mortgage servicer for failure to provide accurate information to the borrower. The statutes’ primary obligation is procedural—ensuring contact occurs— rather than imposing a substantive duty regarding the accuracy of information provided during that contact.

Accordingly, the demurrer to the first cause of action is SUSTAINED on the grounds that Plaintiffs have failed to adequately allege Defendants non-compliance with Sections 2923.5 and 2923.55.

Sections 2923.5 and 2923.55 Cannot Both Apply

Sections 2923.5 and 2923.55 apply to different type of entities. Section 2923.5 applies only to entities described in § 2924.18(b). Section 2923.55 imposes parallel requirements for certain mortgage servicers, with the distinction between the statutes' applicability determined by reference to §

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2924.18(b). Sections 2923.5 and 2923.55 are mutually exclusive statutes that cannot both apply to the same servicer.

Plaintiffs must identify which statute applies to Defendant.

Accordingly, the demurrer to the first cause of action is SUSTAINED on this ground.

Application of HBOR

Sections 2923.5 and 2923.55 apply only to mortgages or deeds of trust described in Civil Code section 2924.15. Section 2924.15(b) defines "owner-occupied" to mean that "the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes." Plaintiffs have only pleaded the Property is a single family dwelling that is “owner occupied” but fail to plead the loan was made for consumer purposes. Therefore, Plaintiffs have failed to plead the HBOR applies.

Accordingly, the demurrer is SUSTAINED on this ground.

Second Cause of Action – Negligence

The Complaint alleges Defendant owed Plaintiffs a duty to exercise reasonable care in the servicing and administration of Plaintiffs’ mortgage loan. (Complaint, ¶ 35.)

To plead a cause of action for negligence a plaintiff must allege facts showing: “(1) a legal duty of care toward the plaintiff; (2) a breach of that duty; (3) legal causation; and (4) damages.” (Century Surety Co. v. Crosby Insurance, Inc. (2004) 124 Cal.App.4th 116, 127.)

Generally, a mortgage servicer does not owe a duty of care to a borrower in negligence. (See Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 927 [holding that.) “As a general rule, a financial institution owes no duty of care to a borrower when the institution’s involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 63 [cleaned-up].)

Moreover, the economic loss rule bars negligence claims against mortgage servicers when those claims arise from the contractual relationship between the parties and are not independent of the underlying mortgage agreement. (Sheen, supra, 924-925.)

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Here, there are no allegations in the Complaint that Defendant exceeded the scope of its role as a lender of money. Therefore, Plaintiffs have not plead the existence of a duty.

Additionally, Plaintiffs have not asserted a claim that is independent of the original mortgage agreement and its processing of the loan. Thus, their claims are barred by the economic loss rule.

Accordingly, the demurrer to the second cause of action is SUSTAINED.

Third Cause of Action – Breach of Contract

“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant's breach and resulting damage.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th 299, 307.) “If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Ibid.)

Defendant asserts that only plaintiff Alexis Lorie Gallagher- Renta executed the Deed to Trust and Note securing the Property. Plaintiff Gary Renta is not a borrower or signatory to any of the loan documents. (RJN, Exh. 1.) The Complaint does not allege any legal theory that gives Mr. Renta standing to sue for breach of contract.

Moreover, the Loan Documents identify the lender as Structured Capital 1 LLC and the borrower as Mrs. Galllagher- Renta. Defendant is identified as the “Trustee” and loan servicer. The Complaint fails to allege how there exists contractual privity between Plaintiffs and Defendant.

Plaintiffs also fail to identify the specific provisions of the loan that were breached by Defendant, and no copy of the Loan Agreement is attached to the Complaint.

For all the foregoing reasons, the demurrer to the third cause of action is SUSTAINED.

Fourth Cause of Action - Wrongful Foreclosure

“To obtain the equitable set aside of a trustee’s sale or maintain a wrongful foreclosure claim, a plaintiff must allege that (1) the defendants caused an illegal, fraudulent, or willfully oppressive sale of the property pursuant to a power of sale in a mortgage or deed of trust; (2) the plaintiff suffered

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prejudice or harm; and (3) the plaintiff tendered the amount of the secured indebtedness or was excused from tendering.” (Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062.)

“Because the action is in equity, a defaulted borrower who seeks to set aside a trustee's sale is required to do equity before the court will exercise its equitable powers. [Citation.] Consequently, as a condition precedent to an action by the borrower to set aside the trustee's sale on the ground that the sale is voidable because of irregularities in the sale notice or procedure, the borrower must offer to pay the full amount of the debt for which the property was security.” (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 112.)

Plaintiffs allege Defendant is liable to them for wrongful foreclosure for the same conduct alleged in their HBOR claim. Therefore, Plaintiffs claim for wrongful foreclosure fails on the same grounds as those stated above.

Additionally, Plaintiffs do not allege they tendered or attempted to tender the amount owed on the loan at any time.

Accordingly, the demurrer to the fourth cause of action is SUSTAINED.

Fifth Cause of Action – Unfair Business Practices

The Unfair Competition Law (UCL), Business and Professions Code section 17200 et seq., prohibits unfair competition, including unlawful, unfair or fraudulent business acts. (Cel- Tech Comm., Inc. v. Los Angeles Cellular Tele. Co. (1999) 20 Cal.4th 163, 180.)

By proscribing “any unlawful” business practice, section 17200 “borrows” violations of other laws and treats them as unlawful practices that the UCL makes independently actionable. “Virtually any law or regulation - federal or state, statutory or common law - can serve as predicate for a § 17200 ‘unlawful’ violation.” (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 681; see Hale v. Sharp Healthcare (2010) 183 Cal. App. 4th 1373, 1382-1383.)

“[A]n ‘unfair’ business practice occurs when it offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” [citations omitted.] In general the ‘unfairness' prong ‘has been used to enjoin deceptive or sharp

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practices....’” (South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 886-887.)

Plaintiffs UCL claim rests on the same allegations underlying their other causes of action. Given that the demurrer to the first cause of action has been sustained, the demurrer to this cause of action should also be sustained as Plaintiff has not alleged unlawful conduct for purposes of the UCL.

Plaintiff’s allegation that Defendant’s “failure to provide accurate payment information, misdirection of payments, imposition of unwarranted fees, and pursuit of foreclosure based on a default it created” was “immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers” is not supported by any factual allegations.

Accordingly, the demurrer to the fifth cause of action is SUSTAINED.

Sixth Cause of Action – Declaratory and Injunctive Relief

Injunctive and declaratory relief are equitable remedies, not causes of action. (Faunce v. Cate (2013) 222 Cal.App.4th 166, 173.) A demurrer to causes of action for injunctive and declaratory relief will be sustained where such causes of action are “wholly derivative of other nonviable causes of action.” (Ibid.)

Because the demurrer to the other causes of action has been sustained, Plaintiffs have not demonstrated they are entitled to such relief.

Accordingly, the demurer to the sixth cause of action is SUSTAINED.

The demurrer is SUSTAINED in its entirety with leave to amend.

Plaintiffs have 15 days leave to amend the Complaint.

Moving party shall give notice of this ruling.

57.

58. TALG, LTD. Plaintiffs TALG, Ltd. and Tenny C. Rostomian-Amin’s v. Ton unopposed Motion to Strike Certain Portions of Defendant Alessandria Jones Ton’s Second Answer is GRANTED. (C.C.P. 2026- § 436.) 01552440 Plaintiffs seek to strike the following the following portions from the Second Answer. (ROA 37.)