Eric D. Bailey v. LoanCare LLC, et al.

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SAN BERNARDINO

ERIC D. BAILEY, Case No.: CIVVS2504856 Plaintiff, [TENTATIVE] ORDER (1) GRANTING IN PART AND v. DENYING IN PART PLAINTIFF’S MOTION TO STRIKE; AND LOANCARE LLC, et al., (2) DENYING PLAINTIFF’S MOTION FOR LEAVE TO Defendants. CONDUCT FINANCIAL CONDITION DISCOVERY

I. INTRODUCTION

Plaintiff Eric Bailey (“Plaintiff”) moves to strike portions of Defendants’ answer and for

leave to conduct financial condition discovery.

On July 17, 2025, Plaintiff filed his initial complaint. Plaintiff filed his first amended

complaint on August 18, 2025, and the operative second amended complaint (“SAC”) on May 8,

2026. The SAC brings ten causes of action against multiple defendants all related to their alleged

scheme to illegally remove Plaintiff from his property through an improper foreclosure.

On May 22, Plaintiff filed the current motion for leave to conduct discovery of the

financial conditions of Defendants LoanCare LLC, Lakeview Loan Servicing, LLC, and Barrett

Daffin Frappier Treder & Weiss, LLP (“Barrett Daffin”).

On May 26, Defendants LoanCare LLC and Lakeview Loan Servicing LLC (collectively,

“LoanCare”) filed a joint answer to the SAC. On June 3, Plaintiff filed his second current motion

to strike portions of LoanCare’s answer. On August 6, LoanCare filed oppositions to both of

Plaintiff’s motions. The same day, Barrett Daffin filed a separate opposition to Plaintiff’s motion

for leave to conduct financial discovery. After issuing a tentative ruling and holding a hearing on

the motions, the Court now issues its final ruling.1

II. MOTION TO STRIKE

A. Applicable Law

A motion to strike reaches defects unchallengeable by demurrer, including any

“irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, subd.

(a); Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528.) This “subdivision does not

authorize attacks on entire causes of action, let alone entire pleadings.” (Ferraro v. Camarlinghi,

supra, 161 Cal.App.4th at 528.) “Irrelevant matter” includes a demand for judgment requesting

relief not supported by the allegations or an allegation that is neither pertinent to nor supported

by an otherwise sufficient claim. (Code Civ. Proc., § 431.10, subd. (b)(2)-(3).)

Additionally, all or part of a pleading that is not drawn or filed in conformity with the

laws of this state, a court rule, or order of the court may be stricken. (Code Civ. Proc., § 436,

subd. (b).) “While this language might be broadly construed to reach any deficiency in a

pleading, including substantive ones, that is not its purpose or effect. Rather it authorizes the

1 The Court finds that the moving party has complied with its meet-and-confer obligation.

striking of a pleading due to improprieties in its form or in the procedures pursuant to which it

was filed. This provision is commonly invoked to challenge pleadings filed in violation of a

deadline, court order, or requirement of prior leave of court.” (Ferraro v. Camarlinghi, supra,

161 Cal.App.4th at 528 (emphasis in original).)

Like a demurrer, the grounds for a motion to strike must appear on the face of the

pleading or from any matter of which the court is required to take judicial notice. (Code Civ.

Proc., § 437.) Although a motion to strike can reach conclusory allegations, such language

cannot be stricken where the complaint contains sufficient facts to support such an allegation.

(Perkins v. Sup. Ct. (General Tel. Directory Co.) (1981) 117 Cal.App.3d 1, 6.) “The distinction

between conclusions of law and ultimate facts is not at all clear and involves at most a matter of

degree.” (Ibid.) “What is important is that the complaint as a whole contain sufficient facts to

apprise the defendant of the basis upon which the plaintiff is seeking relief.” (Ibid.) “If a motion

to strike is granted pursuant to Section 436, the court may order that an amendment or amended

pleading be filed upon terms it deems proper.” (Code Civ. Proc., § 472a, subd. (d).)

B. Explanation of the Court’s Ruling

Plaintiff seeks to strike several paragraphs in LoanCare’s answer that respond to certain

paragraphs by proffering objections. Plaintiff argues that such paragraphs do not comport with a

proper answer, but, as LoanCare points out, Plaintiff cites irrelevant case citations.

But Plaintiff’s argument has some merit. Pursuant to the Code of Civil Procedure, “[t]he

answer to a complaint shall contain,” either “[t]he general or specific denial of the material

allegations of the complaint controverted by the defendant,” and/or a “statement of any new

matter constituting a defense.” (Code Civ. Proc., § 431.30, subd. (b)(1)-(2).)

Although LoanCare’s argument that Plaintiff’s allegations are “compound,” and

“incomprehensible,” (Opp. at 4-5), as stated by the Court of Appeal, Fourth District, “[g]enerally

speaking, of course, the word ‘may’ is permissive—you can do it if you want, but you aren’t

being forced to—while the word ‘shall’ is mandatory.” (County of Orange v. Bezaire (2004) 117

Cal.App.4th 121, 129.) As such, section 431.30 mandates that an answer can either include a

denial, affirmation, or defense. LoanCare cannot include objections as part of its answer.

Despite its structural deficiencies, Plaintiff’s motion correctly asserts that LoanCare

inserted improper objections into its answer. A motion to strike can target any “improper matter

inserted in any pleading,” (Code Civ. Proc., § 436, subd. (a)), and LoanCare’s objections seem to

be just that. Further, as is required, “[t]he grounds for a motion to strike... appear on the face of

the challenged pleading.” (Code Civ. Proc., § 437, subd. (a).)

As such, the Court grants Plaintiff’s motion to strike paragraphs 13, 17-20, 29-37, 40-44,

46, 60, 68, and 76 of LoanCare’s answer, but allows leave to amend. (Vaccaro v. Kaiman (1998)

63 Cal.App.4th 761, 768 (holding that on a motion to strike, leave to amend should be granted as

it would be to a demurrer, where there is a reasonable possibility defect could be cured by

amendment).)

III. MOTION FOR FINANCIAL DISCOVERY A. Applicable Law

Civil Code section 3295 outlines the procedure for discovery related to the financial

condition of a defendant, stating that a court, for good cause, may “grant any defendant a

protective order requiring the plaintiff to produce evidence of a prima facie case of liability for

damages... prior to the introduction of evidence of...[t]he profits the defendant has gained by

virtue of the wrongful course of conduct of the nature and type shown by the evidence” as well

as the “financial condition of the defendant.” (Civ. Code § 3295, subd. (a)(1)-(2).)

Pretrial financial discovery is generally impermissible unless the plaintiff establishes by

affidavit a “substantial probability” of prevailing on a punitive damages claim. (Civ. Code,

§ 3295, subd. (c).) In this context, the trial court “interpret[s] the words ‘substantial probability’

to mean ‘very likely’ or ‘a strong likelihood’ just as their plain meaning suggests.” (Jabro v.

Superior Court (2002) 95 Cal.App.4th 754, 758.)

A motion for financial discovery may be brought at any time during the proceeding, and

the court may issue its order at any time, including after a finding of liability has been made.

(Soto v. BorgWarner Morse TEC Inc. (2015) 239 Cal.App.4th 165, 193.)

B. Explanation of Court’s Ruling

Plaintiff also seeks leave of Court to seek financial discovery from LoanCare and Barrett

Daffin (collectively, “Defendants”). Such a motion can be granted “if the court finds, on the

basis of the supporting and opposing affidavits presented, that the plaintiff has established that

there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section

3294.” (Civ. Code, § 3295, subd. (c).) Section 3294 addresses punitive damages.

As Defendants argue in their separate oppositions, Plaintiff has not given a basis for this

Court to evaluate whether a substantial probability of prevailing exists because he has not

provided the necessary underlying evidence. Although Plaintiff attaches his declaration and

exhibits, those exhibits relate to a non-existent requirement the parties meet and confer prior to

filing the underlying motion. Such a requirement does not exist for this motion, and the

California Rule of Court that Plaintiff cites to likewise does not exist.

Plaintiff provides neither foundational support for his SAC exhibits nor evidence

demonstrating a likelihood of recovering punitive damages. His subjective belief in his

allegations is legally insufficient under Civil Code section 3295.

IV. CONCLUSION

1. Plaintiff’s motion to strike paragraphs 13, 17-20, 29-37, 40-44, 46, 60, 68, and 76

from LoanCare’s answer is GRANTED WITH LEAVE TO AMEND. LoanCare shall file any

amended answer no later than September 16, 2026.

2. Plaintiff’s motion for pretrial discovery of financial information pursuant to Civil

Code section 3295 is DENIED.

IT IS SO ORDERED.

Dated: [TENTATIVE – NOT FINAL] Hon. Joseph B. Widman Judge of the Superior Court