Stacey F Sutton, III v. Benjamin Mattew Heilig et al.

Stacey F Sutton, III vs. Benjamin Mattew Heilig et al. (26CV001986) Defendants’ Demurrer to Plaintiff’s Complaint: Defendants Benjamin Matthew Heilig and Mackillie Incorporated, dba HCS Equity (“Defendants”) challenge Plaintiff’s Complaint, arguing that causes of action 1-6, 10, 12-14, and 16-21 each fail to state facts sufficient to constitute a cause of action. (See Code of Civ. Proc. § 430.10.)

The Demurrer was initially set for hearing on August 14, 2026, and was continued by the Court to August 21, 2026. On August 14, 2026, Defendants provided information to the court representing that Plaintiff Stacey F. Sutton, III had filed for bankruptcy and that the Bankruptcy Court had granted Defendants relief from stay for the purpose of defending the present action by Plaintiff. Plaintiff field no opposition to the demurrer.

Defendants’ request for judicial notice is DENIED. While judicial notice may be properly taken of documents which are expressly identified, described, and relied on in the complaint (see StorMedia Inc. v. Superior Ct. (1999) 20 Cal.4th 449; Align Tech., Inc. v. Tran (2009) 179 Cal.App.4th 949; Ingram v. Flippo (1999) 74 Cal.App.4th 1280; and Salvaty v. Falcon Cable Television (1985) 165 Cal.App.3d 798), the documents Defendants seek to judicially notice here (including the Promissory Note, the Loan Purpose and Real Property Security Declaration, and the Certificate of Business Purpose of Loan) are not clearly those referenced by Plaintiff in the Complaint.

Moreover, even if the documents could be judicially noticed, the could not be admitted for the truth of their content which appears necessary for most of the Defendants’ arguments regarding these documents. (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374 [When judicial notice is taken of a document, the truthfulness and proper interpretation of the document are disputable].)

Defendants’ demurrer is SUSTAINED as to the second, fifth, sixth, fourteenth, sixteenth, eighteenth, nineteenth, and twenty-first caused of action; leave to amend is granted as to all of these causes of action and Plaintiff has 10 days from service of this order to file an amended complaint.

• As to the second cause of action for violation of California Civil Code section 2923.6, that section prohibits a lender from advancing a foreclosure while a first lien loan modification with the same lender is occurring. (Cal. Civ. Code, §2923.6(c).) Here the Complaint alleges that foreclosure activity began seven months after the loan modification was completed. Accordingly, the demurrer is sustained with leave to amend.

• As to the fifth cause of action for violation of California Civil Code section 2924f, that section provides that Notice of a Trustee’s Sale must be given and recorded, “at least 20 days before the date of sale.” (Cal. Civ. Code §2924f.) There is no requirement, as Plaintiff alleges, that the Notice must be posted before being recorded. Accordingly, the demurrer is sustained with leave to amend.

• As to the sixth cause of action for violation of California Civil Code section 2924.9, Plaintiff asserts that Defendants violated the statute by not providing written notice of rights following default. However, the statute does not require this notice if “a borrower has previously exhausted the first lien loan modification process.” (Civ. Code, §2924.9(a).) Plaintiff alleges that Plaintiff previously received a loan modification on the loan at issue. Accordingly, the demurrer is sustained with leave to amend.

• As to the fourteenth cause of action for fraudulent concealment, Plaintiff fails to allege a relationship that would create a duty to disclose on the part of Defendants. “A lender owes no duty of care to a borrower when the lender’s involvement in the loan transaction does not exceed its customary role in arms-length lending and servicing.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 927.) There are no allegations in the Complaint that Defendants went beyond their customary role in arms-length lending and servicing.

Plaintiff cites the doctrine of superior knowledge, claiming that Defendants’ superior knowledge of the lending industry created a duty to disclose materials facts including that underwriting constraints could render Plaintiff’s reverse mortgage financing plans infeasible and that alternative loan products may not be available for an owner-occupied property. However, the doctrine of superior knowledge does not apply to predictions about future events (alleged here), only existing, known facts. (Cansino v.

Bank of America (2014) 224 Cal.App.4th 1462, 1470.) Accordingly, the demurrer is sustained with leave to amend.

• As to the eighteenth cause of action for slander of title, Plaintiff alleges that Defendants engaged in slander of title through the recorded Notice of Default and recorded Notice of Trustee’s Sale. However, slander of title requires, among other elements, a publication, which is without privilege or justification. (Klem v. Access Ins. Co. (2017) 17 Cal.App.5th 595, 612.) California Civil Code section 2924(d)(1) explicitly identifies Notices of Default and Notices of Trustee’s Sale as privileged communications. Accordingly, the demurrer is sustained with leave to amend.

• As to the nineteenth cause of action for breach of fiduciary duty, as discussed above, “[a] lender owes no duty of care to a borrower when the lender’s involvement in the loan transaction does not exceed its customary role in arms-length lending and servicing.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 927.) Plaintiff’s allegations do not demonstrate conduct above that of a lender operating in its customary role. Accordingly, the demurrer is sustained with leave to amend.

• As to the twenty-first cause of action for financial elder abuse, Plaintiff alleges that Defendants engaged in financial elder abuse by attempting to wrongfully foreclose Plaintiff’s property. Financial elder abuse occurs when a person “[t]akes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with the intent to defraud, or both.” (Cal. Welfare and Institutions Code §15610.30(a).) Here, pursuant to Plaintiff’s allegations, no foreclosure occurred. Accordingly, the demurrer is sustained with leave to amend.

Defendants’ demurrer is OVERRULLED as to the first, third, fourth, tenth, twelfth, thirteenth, seventeenth, and twentieth causes of action.

• As to the first and third causes of action, these causes of action rely on Defendants’ Request for Judicial Notices which is denied. Accordingly, the Demurrer is overruled as to these causes of action.

• As to the tenth cause of action for promissory estoppel, the Complaint alleges that Defendants falsely promised that “Plaintiff would be able to retire the Subject Loan through refinancing.” (Complaint, ¶110.) Defendants argue that this alleged promise is contradicted by language in the Deed of Trust. While the two representations are at odds with one another, both representations could not have happened. Promissory estoppel still lies when a representation is made at one point even if at a later point a different representation is made. Accordingly, the Demurrer is overruled as to this cause of action.

• As to the seventeenth cause of action for quiet title, Defendants argue that the Complaint does not provide the required legal description of the property. (Cal. Code Civ. Proc., §761.020(a).) However, Exhibit A to the Deed of Trust, which is attached to the Complaint and incorporated into Plaintiff’s allegations at paragraph 14 of the Complaint, does provide a legal description of the property. Accordingly, the Demurrer is overruled as to this cause of action.

• As to the twentieth cause of action for accounting, Defendants argue that this claim fails because the Complaint does not allege a fiduciary relationship between Plaintiff and Defendant. Defendant’ arguments, however, rely on an incomplete statement of law. Brea v. McGlashan (1934) 3 Cal.App.2d 454, states that “[a] cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting. (Id. at 460.)

The Third District further held: “...[A] fiduciary relationship between the parties is not required to state a cause of action for accounting. All that is required is that some relationship exists that requires an accounting. (Kritzer v. Lancaster (1950) 96 Cal.App.2d 1, 7.) Plaintiff sufficiently alleges such a relationship in the Complaint with regards to the loan, its modification, and its default. The question of whether or not the loan at issue is so complicated so as to require an accounting is a question of fact that cannot be determined at demurrer.

Accordingly, the Demurrer is overruled as to this cause of action.

• As to the fourth and twelfth causes of action, although these causes of action were included in the demurrer, Defendants presented no argument regarding these causes of action. Accordingly, the Demurrer is overruled as to these causes of action.

Defendants are to prepare the court’s order consistent with the tentative ruling.

NOTE RE: TENTATIVE RULING This tentative ruling becomes the court’s order, and no hearing shall be held unless one of the parties contests it by complying with Rule 3.1308 of the California Rules of Court and Monterey County Local Rule 7.9.

Those parties wishing to present an oral argument must notify all other parties and the Court no later than 4:00 p.m. on the court day before the hearing; otherwise, NO ORAL ARGUMENT WILL BE PERMITTED, AND THE TENTATIVE RULING WILL BECOME THE ORDER OF THE COURT AND THE HEARING VACATED. You must notify the court by emailing TentativeRulings@monterey.courts.ca.gov or by telephoning the Calendar Department at (831) 647-5800, extension 3040, before 4:00 p.m. on the court day before the hearing.