Safora Nowrouzi v. Nationstar Mortgage LLC d/b/a Mr. Cooper, et al.

28, 2026 __________________________________ Hon. Karen Moskowitz Judge of the Superior Court

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES SAFORA NOWROUZI, as Successor Trustee of THE BANI REVOCABLE LIVING TRUST, as Successor in Interest to SOUSAN KHIBANI, Plaintiff, vs. NATIONSTAR MORTGAGE LLC d/b/a MR. COOPER, et al. Defendants. |))))))))))))))) | CASE NO: 24VECV05806 [TENTATIVE] ORDER RE: DEMURRER TO THE SECOND AMENDED COMPLAINT Dept. I HEARING DATE: August 28, 2026

TIME: 8:30 A.M. COMPLAINT FILED: November 21, 2024 TRIAL DATE: None set | I. BACKGROUND This is a fraud action arising out of Plaintiff Safora Nowrouzi, as Successor Trustee of the Bani Revocable Living Trust, as Successor in Interest to Sousan Khiabani's ("Plaintiff") mortgage loan modification for the real property located at 4868 Adele Court, Woodland Hills, CA 91364 (the "Subject Property"). On November 21, 2024, Plaintiff filed a Complaint against Defendants Nationstar Mortgage LLC d/b/a Mr.

Cooper ("Nationstar"); U.S. Bank National Association, as Trustee for the Adjustable Rate Mortgage Trust 2006-2, erroneously sued as U.S. Bancorp d/b/a U.S. Bank National Association, as Trustee for the Adjustable Rate Mortgage Trust 2006-2 ("USBNA"); and DOES 1 through 20. On January 26, 2026, Plaintiff filed a First Amended Complaint ("FAC") against Defendants, alleging causes of action for: (1) Negligent Misrepresentation; (2) Intentional Misrepresentation; (3) Violation of Civil Code Sec. 2923.7; and (4) Violation of California Business and Professions Code Sec. 17200.

On March 20, 2026, Defendants filed a Demurrer to the FAC. The matter was fully briefed and came for hearing on April 29, 2026; the demurrer was sustained in part with leave to amend as to the first, second, and fourth causes of action, and overruled in part as to the third cause of action. On May 19, 2026, Plaintiff filed the operative Second Amended Complaint ("SAC") against Defendants. On July 7, 2026, Defendants filed the instant Demurrer to the SAC. On August 17, 2026, Plaintiff filed an Opposition.

On August 21, 2026, Defendants filed a Reply. II. LEGAL STANDARD "The primary function of a pleading is to give the other party notice so that it may prepare its case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights." (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.)¿ "A¿demurrer¿tests the legal sufficiency of the factual allegations in a complaint." (Ivanoff v. Bank of America, N.A.¿ (2017) 9 Cal.App.5th 719, 725.)

The Court looks to whether "the complaint alleges facts sufficient to state a cause of action or discloses a complete defense." (Id.) The Court does not "read passages from a complaint in isolation; in reviewing a ruling on a demurrer, we read the complaint 'as a whole and its parts in their context.' [Citation.]" (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 804.) The Court

"assume[s] the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken." (Harris, supra, 56 Cal.4th p. 240.) "The court does not, however, assume the truth of contentions, deductions, or conclusions of law. [Citation.]" (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) A general demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted or under section 430.10, subdivision (a), where the court has no jurisdiction of the subject of the cause of action alleged in the pleading.

All other grounds listed in Section 430.10, including uncertainty under subdivision (f), are special demurrers. Special demurrers are not allowed in limited jurisdiction courts. (Code Civ. Proc., Sec. 92, subd. (c).) A demurrer for uncertainty means the pleading is ambiguous or unintelligible. (Code Civ. Proc., Sec. 430.10, subd. (f).) "A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures." (Khoury v.

Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.) ""'[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.'" (A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.)

III. DISCUSSION Meet and Confer Prior to filing a demurrer, the demurring party is required to meet and confer in person, by telephone, or by videoconference with the party who filed the pleading demurred to for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., Sec. 430.41.)¿¿ Defendants' counsel of record, Jillian A. Kaiser, attests to the following meet and confer efforts: "On July 1, 2026, I met and conferred with Plaintiff's counsel via telephone regarding the deficiencies identified by Defendants in the Second Amended Complaint." (Kaiser Decl., P.2.)

The parties were unable to informally resolve the issues not raised in the demurrer. (Id., P.3.) Thus, the Court finds that Defendants have fulfilled their meet and confer obligation. Request for Judicial Notice "[T]he fact a court may take judicial notice of a recorded deed, or similar document, does not mean it may take judicial notice of factual matters stated therein. [Citation.]" (Herrera v. Deutsche Bank Nat. Trust Co. (2011) 196

Cal.App.4th 1366, 1375 [addressing recorded assignment of deed and substitution of trustee, and reversing summary judgment where bank defendant failed to show it was a beneficiary under deed of trust.].) A trial court errs in taking judicial notice of facts contained in recorded documents, where they are in dispute. (Id.) Defendants' request for judicial notice of various deeds, assignments of deeds, notices of default, notice of trustee's sale, etc. are GRANTED except as to hearsay matters and facts in dispute per Evidence Code Sec.Sec. 452(c), (d), and (h).

Demurrer Defendants demur to the first, second, and fourth causes of action on the grounds that the SAC fails to state sufficient facts to support these causes of action against them. First Cause of Action for Negligent Misrepresentation "The elements of negligent misrepresentation are '(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.'" (National Union Fire Ins.

Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.) "While there is some conflict in the case law discussing the precise degree of particularity required in the pleading of a claim for negligent misrepresentation, there is a consensus that the causal elements, particularly the allegations of reliance, must be specifically pleaded." (Id.) "The tort of negligent misrepresentation does not require scienter or intent to defraud. [Citation.] It encompasses '[t]he assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true' [citation], and '[t]he positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true' [citations]." (OCM Principal Opportunities Fund, L.P. v.

CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845.) As such, "when the defendant purports to convey the 'whole truth' about a subject, 'misleading half-truths' about the subject may constitute positive assertions for the purpose of negligent misrepresentation." (Id. at 854.) The SAC alleges, inter alia, that Plaintiff acquired an ownership interest in the real property located at 4868 Adele Court, Woodland Hills, CA 91364 (the "Subject Property"). (SAC, P.1.) The Subject Property was used as the primary residence of Plaintiff. (Id.)

On or about February 27, 2006, Plaintiff obtained a mortgage loan from Countrywide Home Loans, Inc. ("Countrywide") in the amount of $860,000.00, which was assigned to USBNA as the lender and Nationstar as a servicer to USBNA. (Id., P.P.14-15, Ex. A.) On or about November 8, 2021, Plaintiff obtained a loan modification to prevent foreclosure of the Subject Property. (Id., P.16, Ex. B.) Soon after the loan modification, Plaintiff was diagnosed with stage IV cancer but continued to make payments on the loan until October 2023,

"when the financial burden of the [Plaintiff's] medical expenses and treatment made it enormously difficult to continue to afford the modified payment towards the LOAN." (Id., P.P.18-19.) On or about January 2, 2024, Plaintiff submitted a complete loss mitigation application to Nationstar for review with the intent to lower her monthly payments. (Id., P.20.) On January 8, 2024, Plaintiff was advised by Nationstar's agent Emmanuel that the current past due amount was $48,211.28, thus a contributor form would need to be submitted, as well as further explanation regarding hardship. (Id., P.22.)

On January 11, 2024, Plaintiff submitted the contributor form and provided further explanation regarding financial hardship to Nationstar. (Id., P.23.) Between February 26, 2024 and April 8, 2024, Plaintiff spoke with Nationstar agents Chris, Delphia, Wanda, and Ashley, all of which gave Plaintiff different and conflicting information regarding the status of the loan modification application being reviewed by the underwriter. (Id., P.P.24-27, 50.) On April 10, 2024, Nationstar requested additional documents including an updated hardship explanation, uniform borrower assistance form and expired household contributor form, which had already been submitted on January 11 and February 20, 2024 for the same loan modification application. (Id., P.28.)

Between April 23, 2024 and August 10, 2024, Plaintiff submitted an updated hardship explanation, contributor form, uniform borrower assistance form, rental receipts, and updated Profit & Loss statement. (Id., P.P.29-35.) On or around September 5, 2024, Plaintiff was approved for a proprietary modification starting October 1, 2024, which offered to increase Plaintiff's monthly principal and interest payments by nearly $10,000.00 per month, as well as doubling the interest rate from 3.000 percent to 6.875 percent for a total monthly payment of approximately $19,226.07. (SAC, P.P.37-38, Ex.

C.) On or around September 16, 2024, Plaintiff submitted an appeal letter to Nationstar, requesting an extension of the maturity date of the loan to a thirty (30) year term. (Id., P.40, Ex. D.) Plaintiff's appeal was denied. (Id., P.41, Ex. E.) Between March 2025 and July 2025, Plaintiff submitted a new loss mitigation application to Nationstar including updated contributor forms, bank statements, rental agreements, hardship letters, uniform borrower assistance forms, and profit and loss statements. (Id., P.P.42-44.)

On July 29, 2025, Nationstar denied the March loss mitigation application, which Plaintiff appealed on August 11, 2025. (Id., P.P.46-47.) On or around September 22, 2025, Plaintiff received a response to her appeal stating that her debt-to-income ratio was too high. (Id., P.48.) This was the result of the nine-month review process of the January 2024 loan modification application and four-month review process of the March 2025 application including extensive exchange with Nationstar agents making different statements concerning the status of the applications; whether additional documents were required; and the completeness of Plaintiff's submissions, causing a significant increase in the unpaid balance, which led to a denial of the loan modification options because the debt-to-income ratio exceeded the investor's established guidelines. (Id., P.P.49-50.)

In their demurrer, Defendants assert that they did not owe Plaintiff a duty of care in processing her loan modification applications. (Dem at 5:15-6:11.) "As is true of negligence, responsibility for negligent misrepresentation rests upon

the existence of a legal duty, imposed by contract, statute or otherwise, owed by a defendant to the injured person." (Eddy v. Sharp (1988) 199 Cal.App.3d 858, 864.) "However, 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." (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1096.) "[A] loan modification is the renegotiation of loan terms, which falls squarely within the scope of a lending institution's conventional role as a lender of money." (Lueras v.

BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 67.) As such, "[a] lender's obligations to offer, consider, or approve loan modifications and to explore foreclosure alternatives are created solely by the loan documents, statutes, regulations, and relevant directives and announcements from the United States Department of the Treasury, Fannie Mae, and other governmental or quasi-governmental agencies." (Id.) By contrast, "a lender does owe a duty to a borrower to not make material misrepresentations about the status of an application for a loan modification or about the date, time, or status of a foreclosure sale.

The law imposes a duty not to make negligent misrepresentations of fact." (Id. at 68.) Here, it is undisputed that Defendants are financial institutions. However, the SAC allegations merely show that Plaintiff sought modification of her mortgage loan in January 2024 and March 2025 due to purported financial hardship following her stage IV cancer diagnosis, which falls squarely into Defendants' conventional role as lenders and loan servicers, i.e., lending money. Furthermore, the SAC does not plead sufficient facts demonstrating that the alleged representations by Nationstar's agents on different dates were factually false rather than representations of delay in processing. (See e.g., SAC P.P.24-28.)

Thus, the SAC fails to allege sufficient facts showing that Defendants owed Plaintiff a duty of care as it pertains to her loan modification applications that was breached. Even assuming arguendo that Defendants did owe Plaintiff a duty of care, Defendants contend that Plaintiff still fails to plead sufficient facts constituting causation between Defendants' conduct and her purported damages, i.e., the increase in arrearages associated with her loan default. (Id. at 6:19-28.) The Court agrees. Here, the SAC is devoid of any allegations that Plaintiff's inability to pay the original mortgage loan starting in October 2023, i.e., Plaintiff's need for a loan modification, was the fault of these alleged representations made by Nationstar and/or its agents. (See Lueras v.

BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 67 ["If the modification was necessary due to the borrower's inability to repay the loan, the borrower's harm, suffered from denial of a loan modification, would not be closely connected to the lender's conduct. If the lender did not place the borrower in a position creating a need for a loan modification, then no moral blame would be attached to the lender's conduct."].) Moreover, the SAC fails to allege justifiable reliance as Plaintiff did receive an offer for loan modification, which she rejected and/or appealed. (SAC, P.P.37-41, Exs.

C-E.) Lastly, Plaintiff cannot recover the increased arrearages as misrepresentation damages because Plaintiff already had

an obligation under the original loan to make such payments. (See Lueras, supra, 221 Cal.App.4th 79.) Accordingly, the demurrer as to the negligent misrepresentation cause of action is SUSTAINED with leave to amend. Second Cause of Action for Intentional Misrepresentation The elements of intentional misrepresentation are the same as for general fraud. (See Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) "The essential elements of fraud, generally, are (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage." (City of Industry v.

City of Fillmore (2011) 198 Cal.App.4th 191, 211.) "Each element must be pleaded with particularity so as to apprise the defendant of the specific grounds for the charge and enable the court to determine whether there is any basis for the cause of action, although less specificity is required if the defendant would likely have greater knowledge of the facts than the plaintiff." (Id.) "This particularity requirement necessitates pleading facts

which show how, when, where, to whom, and by what means the representations were tendered." (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) As discussed above, the SAC fails to plead sufficient facts showing that representations by Nationstar's agents regarding the status of the loan modification applications were materially and factually false. (SAC, P.69.) Furthermore, the SAC merely alleges in a conclusory manner that Nationstar's agents made these statements with the intent to deceive Plaintiff and induce her to remain engaged in the loss mitigation process. (Id., P.P.71-73.)

Accordingly, the demurrer as to the intentional misrepresentation cause of action is SUSTAINED with leave to amend. Fourth Cause of Action for Violation of Business and Professions Code Sec. 17200 - Unfair Competition Law ("UCL") "To bring a UCL claim, a plaintiff must show either an (1) 'unlawful, unfair, or fraudulent business act or practice,' or (2) 'unfair, deceptive, untrue or misleading advertising.' " (Adhav v. Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970.) " 'Unlawful' conduct includes any business practice or act forbidden by local, state or federal statutes or by regulations or case law. [Citation]." (Id.) " 'a UCL fraud plaintiff must allege he or she was motivated to act or refrain from action based on the truth or falsity of a defendant's statement, not merely on the fact it was made.' [Citation]." (Id.)

A plaintiff alleging unfair business practices under these statutes must state with reasonable particularity the facts supporting the statutory elements of the violation." (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.) Additionally, a plaintiff must have suffered an injury in fact including expending money; loss of money or property; and/or being denied money to which plaintiff has a

cognizable claim due to the defendant's unfair, unlawful, or fraudulent acts. (See Cal. Bus. & Prof. Code, Sec. 17204; Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 854; Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310.) The SAC alleges, inter alia, that Defendants' and their agents engaged in unlawful and fraudulent business practices by violating California Civil Code Sec. 2923.7 by failing to provide a compliant single point of contact, providing false information about the status of Plaintiff's loss mitigation applications, and causing unnecessary delay in processing the loss mitigation applications. (SAC, P.P.92, 94-95, 97, 98-100.)

However, the SAC merely alleges that Plaintiff lost money in the form of the opportunity to pursue other remedies and paying an excess of $73,000.00 in attorney's fees to pursue loss mitigation assistance. (Id., P.P.101-102.) "Under the UCL, an individual may recover profits unfairly obtained to the extent that these profits represent monies given to the defendant or benefits in which the plaintiff has an ownership interest." (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1148.)

The SAC is devoid of any allegation that $73,000.00 or any other amount was paid directly to Defendants. Also, Plaintiff was offered a loan modification, which she rejected and/or appealed. (SAC, P.P.37-41, Exs. C-E.) Accordingly, the demurrer as to the UCL cause of action is SUSTAINED with leave to amend. IV. CONCLUSION Based on the foregoing, Defendants Nationstar Mortgage LLC and U.S. Bank National Association, as Trustee for the Adjustable Rate Mortgage Trust 2006-2's Demurrer to the Second Amended Complaint is SUSTAINED with 30 days leave to amend as to the first, second, and fourth causes of action.

Defendants Nationstar Mortgage LLC and U.S. Bank National Association, as Trustee for the Adjustable Rate Mortgage Trust 2006-2 to give notice. Dated: August 28, 2026 __________________________________ Hon. Karen Moskowitz Judge of the Superior Court | Home -->)" -->