LITTLE VS ROCKET TITLE INSURANCE

Katleman (1994) 8 Cal.4th 666, 672.) However, a demurrer does not admit contentions, deductions or conclusions of fact or law. (Daar v. Yellow Cab Company (1967) 67 Cal.2d 695, 713.) If the complaint fails to state a cause of action, the court must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

In the oppositions to the demurrers and motion to strike, Plaintiff has submitted documents and declarations to support her arguments. This is improper and these declarations and documents shall not be considered. A demurrer can only be used to challenge the defects on the face of the pleading or matters that are judicially noticed. (Donabedian v. Mercery Ins. Co. (2004) 116 Cal.App.4th 968, 994.) Extrinsic evidence cannot be considered. (Id.)

First Cause of Action for Breach of Contract: A breach of contract cause of action requires: (1) a contract, (2) plaintiff’s performance under the contract or excuse from performance, (3) breach of the agreement by the defendant, and an injury to plaintiff due to said breach. (Abdelhamid, supra, 182 Cal.App.4th at 999.) Oaktree argues that this cause of action fails because Plaintiff is not a party to the agreement at issue. However, as discussed in the demurrer by Rocket Defendants as to the first cause of action, Plaintiff has sufficiently alleged that she is a third-party beneficiary.

As such, this argument fails. Oaktree asserts that there is an issue with the escrow instructions because the copy attached to the complaint is not signed by Plaintiff (no copy is attached to the SAC). However, Plaintiff alleges in her SAC that she signed this document. (SAC, ¶ 29.) Oaktree fails to cite to any authority that indicates such a failing would have any impact on the third-party beneficiary allegations. Oaktree also argues that this cause of action fails because it is attempting to impose a duty on Oaktree that it did not owe Plaintiff and the Court cannot interfere with its underwriting policies.

However, this cause of action specifically alleges that under the escrow instructions, Oaktree had the obligation to perform a final “QC” (this according to Oaktree is the way the lender chooses to underwrite a loan), which included verifying the lien position. (SAC ¶ 31.A.) Based on these allegations, Oaktree contractually agreed to perform the “QC” verifying the lien position before funding was authorized. Oaktree provides no authority that it could not contractually agree to do this verification.

Fourth Cause of Action for Negligence: A negligence claim requires a duty, breach of duty, causation, and damages. (Kesner, supra, 1 Cal.5th at 1142.) Oaktree contends this cause of action fails because it owes no duty of care. “[A]s 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.) This cause of action is based on Oaktree’s conduct in underwriting a loan. (SAC, ¶ 51.) This conduct is within Oaktree’s conventional role as a lender of money. Based on Nymark, this cause of action fails.

Sixth Cause of Action for Rescission: Oaktree contends this cause of action fails because rescission is not a cause of action, but is a remedy. This assertion is correct. (Nakash v. Superior Court (1987) 196 Cal.App.3d 59, 70.)

Seventh Cause of Action for Unfair Competition: The UCL defines unfair competition as including “any unlawful, unfair or fraudulent business act or practice.” An act is unlawful if it violates rules set out in other laws. (Graham, supra, 226 Cal.App.4th at 610.) “An unfair business practice occurs when the practice offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Podolsky, supra, 50 Cal. App. 4th, at 647.)

Fraud under UCL only requires a showing that members of the public are likely to be deceived by the business practice. (Olsen, supra, 48 Cal.App.4th at 618.) To have standing to bring a cause of action under Business & Professions Code § 17200, the plaintiff must have suffered injury and lost money or property. (Daro, supra, 151 Cal.App.4th at 1098-1099.) The economic injury must be caused by the defendant’s wrongful conduct. (Kwikset Corp., supra, 51 Cal.4th at 321-322.) Oaktree contends that this cause of action fails because it has not engaged in any wrongful conduct.

This cause of action is based on the closing of escrow contrary to the written conditions, by refusing to pause mortgage payments, and withholding closing documents after notice. (SAC, ¶ 71.) Oaktree was not the escrow agent. As such, the allegations regarding failing to comply with escrow instructions regarding disbursements do not pertain to it. Additionally, requiring payment when funds have been disbursed does not constitute unfair conduct. It is also unclear how Plaintiff has suffered loss of money due to Defendants’ failure to provide closing documents or to do a “QC” review.

Eighth Cause of Action for Wrongful Post-Notice Enforcement: It is unclear what this cause of action is for. Oaktree is also uncertain as to what this claim is. Plaintiff identifies no legal theory or statutes to base this cause of action in her opposition.

Ninth Cause of Action for Breach of Implied Covenant: Implied in every contract is a duty on each party to act in good faith and fair dealing when performing and enforcing the agreement. (Careau & Co., supra, 222 Cal.App.3d at 1393.) “Simply stated, the burden imposed is ‘that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’” (Id.) It is a claim that can be used when a party to a contract unfairly frustrates the agreed upon purpose and disappoints the reasonable expectations of the other party. (Id. at 1394.) Oaktree argues that this cause of action is duplicative of the breach of contract cause of action. However, this cause of action is based on the loan agreement. The first cause of action for breach of contract is based on the escrow instructions. As such, it is not duplicative.

Tenth Cause of Action for Intentional Infliction of Emotional Distress: Intentional infliction of emotional distress requires: (1) outrageous conduct, (2) intent to cause or reckless disregard of the probability of causing emotional distress, (3) severe emotional distress, and (4) accrual and proximate causation. (Stoiber v. Honey (1980) 101 Cal.App.3d 903, 921.) Behavior is outrageous if it exceeds all bounds typically tolerated by decent society. (Id.) There is no liability under a claim for intentional infliction of emotional distress for insults, threats, annoyances, indignities, petty oppressions, or other trivial behavior. (Pilotrik v.

Melhaus (2012) 208 Cal.App.4th 1590, 1610.) This cause of action is based on Oaktree’s alleged refusal of allowing Plaintiff to stop making mortgage payments while the parties addressed Plaintiff’s allegations. (SAC, ¶ 80A.) This conduct is not outrageous. It does not exceed all bounds typically tolerated by decent society. Oaktree is attempting to collect on a loan where funds were distributed on Plaintiff’s behalf that she does not allege were paid back.

Eleventh Cause of Action for Rosenthal Act: The Rosenthal Act is the statutory equivalent of the Federal Fair Debt Collection Practices Act. The purpose is “to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring such debts.” (Civil Code § 1788.1(b).) This cause of action fails to identify what provision of the Rosenthal Act has been violated. Statutory causes of action must be alleged with particularity. (Gates v. Superior Court (1995) 32 Cal.App.4th 481, 493-494.)

Twelfth Cause of Action for Cancellation of Instrument: Civil Code § 3412 provides, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.” Plaintiff alleges that the deed of trust and note are void because the closing instructions were not complied with. An instrument can be void due to fraud. (Lauckhart v.

El Macero Homeowners Assn. (2023) 92 Cal.App.5th 889, 900.) A forged instrument is void. (Wutzke v. Bill Reid Painting Serv. (1984) 151 Cal.App.3d 36, 43.) Plaintiff fails to cite to any authority that a deed of trust and note are void because there was a failure to comply with all escrow instructions. At best, it appears that the instruments might be voidable. To set aside a voidable instrument, Plaintiff is required to allege tender. (Saterbak v. JPMorgan Chase Bank, N.A. (2016) 245 Cal.App.4th 808, 819.)

She has failed to do so. Plaintiff contends that she is not required to allege tender. However, the cases she relies on do not discuss tender. (Sharabianlou v. Karp (2010) 181 Cal.App.4th 1133, 1145; Fleming v. Kagan (1961) 189 Cal.App.2d 791, 796-797.)

Demurrer as to the 1st and 9th Cause of Action OVERRULED. Demurrer as to the 4th, 7th, 8th, 10th, 11th and 12th Cause of Action SUSTAINED with leave to amend. Demurrer as to the 6th Cause of Action SUSTAINED without leave to amend. Plaintiff to file amended complaint by June 19th. The motion for leave to file an amended complaint on 6.12.26 is confirmed. The court notes that several documents were untimely filed by Plaintiff in support of her opposition to this motion, including the Supplemental Organizational Charts and Declaration of Audrey B. Little. This document was not considered due to its untimeliness.

5. CASE # CASE NAME HEARING NAME HEARING RE: MOTION TO STRIKE COMPLAINT ON 2ND AMENDED COMPLAINT FOR BREACH OF LITTLE VS ROCKET CVPS2508295 CONTRACT/WARRANTY (OVER TITLE INSURANCE $35,000) OF AUDREY LITTLE BY OAKTREE FUNDING CORPORATION

Tentative Ruling: A party can bring a motion to strike any irrelevant, false, or improper matters inserted in a pleading. (CCP §436(a).) A motion to strike can also be used to strike any part of a pleading that is not drawn or filed in conformity with the laws of the state, a court rule, or an order of the court. (CCP §436(b).) Oaktree seeks to strike Plaintiff’s request for punitive damages.

A motion to strike is the proper vehicle to attack a punitive damage claim where facts alleged may not rise to the level of fraud, malice or oppression. (CCP §§ 435-436; Truman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.) “Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim.” (Grieves v. Superior Court (1984) 157 Cal. App. 3d 159, 166.) “[A] conclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice, express or implied,’ within the meaning of section 3294.” (Brousseau v.

Jarrett (1977) 73 Cal. App. 3d 864, 872.) The pleading must contain factual allegations of wrongful motive, intent, or purpose. (Cyrus v. Haveson (1976) 65 Cal. App. 3d 306, 317.) Malice is defined as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civil Code §3294(c)(1).) Despicable conduct has been defined as bile, base or contemptible conduct. (College Hospital, Inc. v.

Superior Court (1994) 8 Cal.4th 704, 725.) Oppression is despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (Civil Code §3294(c)(2).) Fraud includes intentional misrepresentations, deceit and concealment of material facts. (Id. at (c)(3).) Under Civil Code § 3294(b), An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.

With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.

Oaktree contends that Plaintiff has failed to allege malice, oppression, or fraud. The wrongful conduct that is predominately at issue in Plaintiff’s SAC pertains to the improper funding of the loan before all required conditions were met. This was not Oaktree’s responsibility. Oaktree was not the escrow agent. Plaintiff does assert that Oaktree failed to perform a “QC” review or adequate “QC” review. However it is unclear what a “QC” review is and what was required under it. There are no factual allegations that indicate that this failure constitutes malice, oppression, or fraud.

Oaktree also argues that the request for punitive damages fails due to Civil Code § 3294(b). This assertion is correct. Oaktree is a corporation. “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice [oppression, or fraud] of the corporation’s employees.” (Cruz v. Homebase (2000) 83 Cal.App.4th 160, 167.) “[T]he law does not impute every employee’s malice to the corporation.

Instead, the punitive damage statute requires proof of malice [oppression, and fraud] among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Id., citing Civil Code § 3294(b).)

There are no allegations in the SAC to support that Oaktree’s officers, directors or managing agents directly acted, had knowledge of the unfitness of the employee that acted, authorized or ratified the wrongful conduct. Motion to Strike 2nd Amended Complaint GRANTED as to allegations and prayer for punitive damages. Plaintiff to file amended complaint by June 19th. The motion for leave to file an amended complaint on 6.12.26 is confirmed.

6. CASE # CASE NAME HEARING NAME HEARING RE: DEMURRER ON 2ND AMENDED COMPLAINT FOR BREACH LITTLE VS ROCKET TITLE OF CONTRACT/WARRANTY (OVER INSURANCE $35,000) OF AUDREY LITTLE BY ROCKET CLOSE, LLC AND ROCKET COMPANIES, INC.

Tentative Ruling: A general demurrer lies where the pleading does not state facts sufficient to constitute a cause of action. (CCP § 430.10(e).) In evaluating a demurrer, the court gives the pleading a reasonable interpretation by reading it as a whole and all of its parts in their context. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) The court assumes the truth of all material facts which have been properly pleaded, of facts which may be inferred from those expressly alleged, and of any material facts of which judicial notice has been requested and may be taken. (Crowley v.

Katleman (1994) 8 Cal.4th 666, 672.) However, a demurrer does not admit contentions, deductions or conclusions of fact or law. (Daar v. Yellow Cab Company (1967) 67 Cal.2d 695, 713.) If the complaint fails to state a cause of action, the court must grant the plaintiff leave to amend if there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In the oppositions to the demurrers and motion to strike, Plaintiff has submitted documents and declarations to support her arguments.

This is improper and these declarations and documents shall not be considered. A demurrer can only be used to challenge the defects on the face of the pleading or matters that are judicially noticed. (Donabedian v. Mercery Ins. Co. (2004) 116 Cal.App.4th 968, 994.) Extrinsic evidence cannot be considered. (Id.)

First Cause of Action for Breach of Contract: A breach of contract cause of action requires: (1) a contract, (2) plaintiff’s performance under the contract or excuse from performance, (3) breach of the agreement by the defendant, and (4) an injury to plaintiff due to said breach. (Abdelhamid v. Fire Ins. Exchange (2010) 182 Cal.App.4th 990, 999.) This cause of action admits that Plaintiff was not a party to the closing instructions. Plaintiff alleges in this cause of action that she was a third-party beneficiary to the actual agreement. (SAC, ¶ 29.)

A third-party beneficiary can enforce the terms of a contract. (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1023.) An individual is only a third-party beneficiary of a contract, if the contract was made for the benefit of the third party. (Id.) To determine whether someone is a third party beneficiary, the court looks at the language of the agreement to determine “not only (1) whether the third party would in fact benefit from the contract, but also (2) whether a motivating purpose of the contracting parties was to provide a benefit to the third party, and (3) whether permitting a third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Goonewardene v.

ADP, LLC (2019) 6 Cal.5th 817, 830.) A third party that is only incidentally benefited from the contract is not a thirdparty beneficiary. (Lucas v. Hamm (1961) 56 Cal.2d 583, 590.) Rocket Defendants argue this cause of action fails because Oaktree and Rocket Defendants were parties to the closing instructions, not Plaintiff. It asserts a borrower cannot be a third-party beneficiary to escrow/closing instructions. Rocket Defendants cite to no binding authority to support this assertion. The contract at issue is the closing instructions for a loan that Plaintiff was a party to.

The closing instructions directly pertained to and benefited Plaintiff – determining to whom and how proceeds from her loan would be issued. In part, the purpose of the closing instructions was to determine how Plaintiff’s proceeds from the loan would be distributed. Allowing Plaintiff to pursue this claim is not inconsistent to the objective of the contract or expectations of the contracting parties. As such, for pleading purposes Plaintiff has sufficiently alleged she is a third-party beneficiary.

Second Cause of Action for Breach of Escrow Instructions: “If the escrow holder fails to carry out an instruction it has contracted to perform, the injured party has a cause of action for breach of contract.” (Summit Financial Holdings, Ltd. v. Continental Lawyers Title Co. (2002) 27 Cal.4th 705, 711.) “Upon the escrow holder’s breach of an instruction that it has contracted to perform or of an implied promise arising out of the agreement with the buyer or seller, the injured party acquires a cause of action for breach of contract.” (Amen v.

Merced County Title Co. (1962) 58 Cal.2d 528, 532.) Rocket Defendants contend this cause of action fails because the alleged breaches complained about in the second cause of action are not required under the escrow instructions. Rocket Defendants argue that the requirement that the loan be recorded in the 2nd lien position on or prior to the distribution date was not a condition Rocket Defendants were required to fulfill in their role as escrow agents but as title agents. As such, they contend that this conduct cannot form the basis of a breach of escrow instruction cause of action.

The requirement regarding the 2 nd lien position is discussed in a provision of the escrow instructions titled “Title Insurance Requirements.” (Complaint, Exhibit A.) Under this title, it states: “You [Rocket Defendants] are authorized to use funds for the account of the Borrowers and to record all instruments when you comply with the following: THIS LOAN MUST RECORD IN 2ND LIEN POSITION ON OR PRIOR TO THE DISBURSEMENT DATE.” “‘An escrow involves the deposit of documents and/or money with a third party to be delivered on the occurrence of some conditions.’” (Summit Financial Holdings, Ltd., supra, 27 Cal.App.4th at 711.)

This provision specifically discusses the distribution of funds, which is part of an escrow agent’s job function. It specifically states that the loan must be recorded in the 2 nd position on or before the distribution date. When a complaint is based on a written instrument, “a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible.” (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.)

Rocket Defendants also contend this cause of action fails because Plaintiff is not a party to the escrow instructions. “Upon the escrow holder’s breach of an instruction that it has contracted to perform or of an implied promise arising out of the agreement with the buyer or seller, the injured party acquires a cause of action for breach of contract.” (Amen, supra, 58 Cal.2d t 532.) Based on this language Plaintiff may pursue a claim. Additionally, as discussed above, Plaintiff has alleged that she is a third-party beneficiary to said agreement.

Rocket Defendants’ last argument is that Plaintiff has sustained no damages. Their agreement that Plaintiff has sustained no damages from the release of funds a day before the deed of trust had been recorded or the failure to produce documents appears correct. Plaintiff got the loan she sought to obtain. However, Plaintiff also alleges that she sustained damages because the Rocket Defendants failed to meet the requirement that the loan had to be recorded in second position. It appears that a family loan secured by a deed of trust was either missed or ignored. (SAC, ¶¶ 1P, 15B, 15C, 15D.)

Plaintiff alleges that when she sought the loan, she intended to obtain a loan in the 2 nd position. (SAC, ¶¶ 1Q, 15B.) This was important to her because she wanted to refinance the loan. (SAC, ¶¶ 1Q, 15B, 15B-1, and 15B-2.) She alleges her inability to refinance the loan has cost her damages. (SAC, ¶¶ 21A, 25.) Rocket Defendants fail to address these facts or these alleged damages.

Third Cause of Action for Breach of Fiduciary Duty: The required elements for a breach of fiduciary duty cause of action are: (1) a fiduciary duty, (2) a breach of said duty, and (3) damages proximately caused by the breach.” (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1534.) “A fiduciary relationship is ‘any relationship existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other.’” (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 29.) “An escrow holder is an agent and fiduciary of the parties to the escrow. (Citations Omitted.)

The agency created by the escrow is limited – limited to the obligation of the escrow holder to carry out the instructions of each of the parties to the escrow.” (Summit Financial Holders, Ltd., supra, 27 Cal.4th at 711.) “The holder only assumes this duty by agreeing to execute the escrow.” (Kangarlou v. Progressive Title Co., Inc. (2005) 128 Cal.App.4th 1174, 1179.) Rocket Defendants contend that this cause of action fails because it owed Plaintiff no fiduciary duty because it was Oaktree who retained Rocket Defendants. “[A]n escrow holder is an agent for all parties who are exchanging instruments and payments through an escrow until the agency is ended by performance of the required acts.” (Claussen v.

First Am. Title Guar. Co. (1986) 186 Cal.App.3d 429, 435.)

Fourth Cause of Action for Negligence: A negligence claim requires a duty, breach of duty, causation, and damages. (Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1142.) Rocket Defendants argue that this cause of action fails because they did not owe Plaintiff a duty of care because she was not a party to the escrow instructions or a third-party beneficiary. As discussed above, this argument fails. Defendants also contend this cause of action fails because it requires Rocket Defendants to act outside their role as escrow holder and actively investigate what position the lien would be recorded in.

However, the escrow instructions indicate that Rocket Defendants could not use funds in the account until the loan was recorded in the 2nd position. Rocket Defendants’ last argument is that this cause of action is barred by the economic loss rule. The economic loss rule requires a plaintiff to recover in contract for solely economic losses that are caused by disappointment in contractual expectation unless they can show harm above and beyond a broken contractual promise. (Robinson Helicopter Co. v.

Dana Corp. (2004) 34 Cal.4th 979, 988. “Economic losses” are damages for costs of repair, inadequate value, replacement, or loss profits, without any personal injury or property damages. (Id.) “‘A person may not recover in tort for the breach of duties that merely restate contractual obligations. Instead. “[c]ourts will generally enforce the breach of a contractual promise through contract law, except when the actions that constitute the breach violate a social policy that merits the imposition of tort remedies.”’” (Stop Loss Ins.

Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1042, citing Aas v. Superior Court (2000) 24 Cal.4th 627, 643.) The economic loss rule applies to negligence claims. (Sheen v. Wells Fargo Bank, N.S. (2022) 12 Cal.5th 905, 923-924.) This cause of action is based on the same conduct at issue in the breach of contract claims. There are no allegations of personal injury. As such, this claim is barred by the economic loss rule.

Fifth Cause of Action for Fraudulent Inducement by Concealment: Fraud and deceit may consist of the suppression of a fact by someone who is bound to disclose it. (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal. 858, 868.) Fraud based on concealment requires: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Marketing West, Inc. v.

Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.) Fraud claims require a heightened pleading standard, which is relaxed in fraudulent concealment claims because it is not practical to allege facts showing how, when and by what means something did not happen. (Alfaro v. Community Housing Improvement System & Planning Assn. (2009) 171 Cal.App.4th 1356, 1384.) However, if the concealment is based on providing false or incomplete statements, the pleadings must at least set forth the substance of the statements at issue. (Ibid.)

For fraudulent concealment to be actionable, defendant must have been under a duty to disclose the facts to plaintiff. (People ex rel. Sepulveda v. Highland Fed. Sav. & Loan (1993) 14 Cal.App.4th 1692, 1718; Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 608-610.) A duty to disclose may arise (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; or (4) when the defendant makes partial representations but also suppresses some material facts. (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1186.)

Where material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts. (Id. at 1187.)

A relationship between the parties is present if there is “some sort of transaction between the parties,” i.e., between a seller and buyer, employer and prospective employee, doctor and patient, and parties to a contract. (Id.) This cause of action alleges that Defendants concealed information that was in their exclusive control and their agents made affirmative misrepresentations. The fraudulent concealment claim fails because the fourth element has not been met. The fourth element requires the plaintiff to be unaware of the fact and would not have acted as she did if she had known of the concealed or suppressed fact. (Marketing West, Inc., supra, 6 Cal.App.4th at 612-613.)

There are no allegations that Plaintiff had any interactions with Rocket Defendants prior to the close of escrow. It is unclear how Plaintiff changed her position based on anything done by Rocket Defendants. Additionally, the allegations regarding misrepresentations fail to indicate who made the statements, when they were made, or how they were made. The SAC refers to documents but none of those documents are attached to the SAC or FAC and the documents attached to the complaint pertain to communications that occurred after escrow closed.

The necessary elements of a fraud cause of action based on fraudulent misrepresentation are: (1) misrepresentation, (2) knowledge that the misrepresentation is false by defendant, (3) intent to defraud, (4) justifiable reliance by the plaintiff, and (5) resulting damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) To successfully allege a false misrepresentation cause of action, the false misrepresentations must have induced Plaintiff to change her position. (Id.) This is not alleged in this cause of action.

Sixth Cause of Action for Rescission: A party to a contract may rescind the contract under the following circumstances: (1) the consent of the rescinding party was obtained by mistake, through duress, menace, fraud, or undue influence, by another party to the contract; (2) if consideration for the obligation of the rescinding party fails; (3) if consideration for the obligation of the rescinding party becomes void; (4) if consideration for the obligation of the rescinding party, before it is rendered to him or her, fails in a material way; (5) if the contract is unlawful; (6) if the public will be prejudiced; and (7) under circumstances proscribed for under the Corporations Code and Insurance Code. (Civil Code § 1689.)

This cause of action pertains to the loan agreement. Rocket Defendants are not parties to the loan agreement. This claim does mention the related closing instruments and alleges that these instruments were induced by Defendants’ concealment. This cause of action does not sufficiently allege the necessary requirements for fraudulent concealment.

Seventh Cause of Action for Unfair Competition Law: The California Unfair Competition Law (Bus. & Prof. Code § 17200) (“UCL”) prohibits unfair competition and defines unfair competition as including “any unlawful, unfair or fraudulent business act or practice.” An act is unlawful if it violates rules set out in other laws. (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 610.) “An unfair business practice occurs when the practice offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Podolsky v.

First Healthcare Corp. (1996) 50 Cal. App. 4th, 632, 647.) Fraud under the statute is not the same as common law fraud. (Olsen v. Breeze, Inc. (1996) 48 Cal.App.4th 608, 618.) Fraud under UCL only requires a showing that members of the public are likely to be deceived by the business practice. (Id.) The UCL is sweeping, embracing anything that can properly be called a business practice and that at the same time is forbidden by law. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “The UCL was enacted ‘to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.’” (Linear Technology Corp. v.

Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 135, citing Kasky v. Nike, Inc. (2002), 27 Cal.4th 939, 949.) To have standing to bring a cause of action under Business & Professions Code § 17200, the plaintiff must have suffered injury and lost money or property. (Daro v. Superior Court (2007)151 Cal.App.4th 1079, 1098-1099.) The economic injury must be caused by the defendant’s wrongful conduct. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 321-322.) Rocket Defendants contends this cause of action fails because the wrongful conduct alleged is not fraudulent.

However, as discussed above, unfair conduct can support a claim under Business & Professions Code § 17200. This occurs when “the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Podolsky, supra, 50 Cal. App. 4th at 647.) Rocket Defendants alleged conduct of failing to comply with escrow instructions for pleading purposes is sufficient. Rocket Defendants also assert that this cause of action fails because Plaintiff lacks standing. Plaintiff must have suffered injury and lost money or property.

This cause of action indicates that she has incurred escrow, premium, and settlement charges. Escrow, premium, and settlement charges all are charges Plaintiff would have incurred had Rocket Defendants complied with the escrow instructions as interpreted by Plaintiff. As such, these expenses were not incurred due to Rocket Defendants’ allegedly wrongful conduct. A cause of action asserted under Business & Professions Code § 17200 must be alleged with reasonable particularity. (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

Eighth Cause of Action for Wrongful Post-Notice Enforcement and Collection: It is unclear what this cause of action is for. It alleges that Plaintiff asked for a temporary pause in the collection on her mortgage payments and Defendants failed to comply with said request. It alleges that Defendants owed a duty to exercise reasonable care and refrain from reckless and/or intentional collection and enforcement pressure while investigating her argument. This cause of action does not apply to Rocket Defendants because they were the escrow agents. Plaintiff alleges that Oaktree was her lender. As such, it is unclear how Rocket Defendants had any control over collection matters.

Ninth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing: Implied in every contract is a duty on each party to act in good faith and fair dealing when performing and enforcing the agreement. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1393.) “Simply stated, the burden imposed is ‘that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’” (Id.) It is a claim that can be used when a party to a contract unfairly frustrates the agreed upon purpose and disappoints the reasonable expectations of the other party. (Id. at 1394.)

A cause of action for breach of covenant of good faith and fair dealing requires something beyond a breach of the contractual duty. (Aljabban v. Fontana Indoor Swap Meet, Inc. (2020) 54 Cal.App.5th 482, 509.) “The covenant of good faith finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith.” (Carma Developers, Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 37.)

This cause of action is based on the loan agreement. (SAC, ¶ 77B.) There are no allegations that Rocket Defendants are parties to said agreement.

Twelfth Cause of Action for Cancellation of Instrument: Civil Code § 3412 provides, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may upon his application, but so adjudged, and ordered to delivered up or canceled.” This cause of action pertains to the note and deed of trust recorded regarding Plaintiff’s loan with Oaktree. Rocket Defendants correctly assert that they are not parties to the loan agreement, and the note and deed of trust do not pertain to them because they are alleged to only be escrow agents.

Demurrer as to the 1st, 2nd, and 3rd Cause of Action OVERRULED. Demurrer as to the 4th, 5th, 6th, 7th, Cause of Action SUSTAINED with leave to amend. Demurrer as to the 8th, 9th and 12th Cause of Action SUSTAINED without leave to amend. Plaintiff to file amended complaint by June 19th. The motion for leave to file an amended complaint on 6.12.26 is confirmed.

7. CASE # CASE NAME HEARING NAME HEARING RE: MOTION FOR LITTLE VS ROCKET TITLE CVPS2508295 PRELIMINARY INJUNCTION BY INSURANCE AUDREY LITTLE

Tentative Ruling: The purpose of a preliminary injunction is to preserve the status quo pending trial on the merits. In order to issue a preliminary injunction, the Court must balance the parties’ interests. In balancing the parties’ interests, the Court must exercise discretion “in favor of the party most likely to be injured . . . .” (Robbins v. Superior Court (1985) 38 Cal.3d 199, 205.) The Court is to consider two interrelated factors: (1) the injury to plaintiff in absence of the injunction verses the injury the defendant is likely to suffer if an injunction is issued; and (2) is there a reasonable probability that plaintiffs will prevail on the merits at trial. (Shoemaker v.

County of Los Angeles (1995) 37 Cal.App.4th 618, 633; Robbins, supra, 38 Cal.3d at 206.) “The trial court’s determination must be guided by a ‘mix’ of the potential-merit and interim-harm factors; the greater the plaintiff’s showing on one, the less must be shown on the other to support an injunction.” (Butt v. State of California (1992) 4 Cal.4th 668, 678.) It is the plaintiff’s burden to “show all elements necessary to support issuance of a preliminary injunction.” (O’Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.) “An injunction properly issues only where the right to be protected is clear, injury is impending and so immediately likely as only to be avoided by issuance of the injunction.” (E.

Bay Mun. Util. Dist. v. Cali. Dep’t of Forestry & Fire Prot. (1996) 43 Cal.App.4th 1113, 1126.) “[I]n order to obtain injunctive relief the plaintiff must ordinarily show that the defendant’s wrongful acts threaten to cause irreparable injuries, ones that cannot be adequately compensated in damages.” (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342, 1352.)

Plaintiff has filed numerous documents on different dates that make up her moving papers for her request for preliminary injunction. The documents filed on 5/6/26 and 5/7/26 are not timely filed and do not provide adequate notice to Oaktree under CCP § 1005(b) and were filed the day before or the day of Oaktree’s filing of its opposition. These documents will not be considered by the Court. As such, this tentative ruling will only address the moving documents filed by Plaintiff on 4/20/26 and 4/21/26.

Oaktree’s Assertion this is a Motion for Reconsideration: Oaktree argues that this motion should be treated as a motion for reconsideration. A motion for reconsideration under CCP § 1008 is the exclusive means to modify, amend, or revoke a court order. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1499.) A motion for reconsideration must be filed within 10 days after service of the written notice of ruling on the order at issue. (CCP § 1008(a).) A party’s motion for reconsideration must be based on new or different facts or circumstances of law. (CCP §1008(a).)

A motion for reconsideration must be accompanied by an affidavit stating what application was made before, what judge heard the matter, what orders were made, and what new or different facts, circumstances, or law are claimed to be shown. (CCP § 1008(a).) Oaktree contends that this motion should be treated as a motion for reconsideration based on two ex parte applications for temporary restraining orders filed when this matter was removed to federal court and three ex parte applications filed with this court – one for temporary restraining order, one for status quo and expediated limited discovery, and one to change the motion for reconsideration into a motion for preliminary injunction.

Ex parte motions are not the same as noticed motions. An ex parte application can be denied because it does not meet the special requirements for an expediated ex parte, even though it might be successful if brought as a normal noticed motion. (See Newsom v. Superior Court (2020) 51 Cal.App.5th 1093, 1097.) Due to this and Oaktree’s failure to provide the Court with the moving papers for these ex parte applications, this motion will not be treated as a motion for reconsideration. Since this motion is not treated as a motion for reconsideration, Oaktree’s request for sanctions under CCP § 1008(d) (which allows for sanctions for violation of CCP § 1008) is be denied.

This request for sanctions is also denied because such a request is to be brought under CCP § 128.7, which requires a separate motion for sanctions. (CCP § 1008(d); CCP § 128.7(a).) As correctly pointed out by Oaktree, Plaintiff has failed to properly authenticate any of the documents she has attached to her moving or reply papers. As such, these documents are not considered. Based on this, Plaintiff’s evidence consists solely of her declarations. Plaintiff does provide a declaration in her reply that appears to authenticate Exhibits I, J, K, M, N, and O.

However, these exhibits are not attached to her declaration, and were not in the evidence submitted in reply. Plaintiff’s declarations do not help establish a probability of prevailing on her claims.

First Cause of Action for Breach of Contract: Plaintiff’s first cause of action is for breach of contract and alleges that the escrow instructions required that before funds could be distributed, Oaktree would perform its final “QC” and the deed of trust would be recorded in second lien position prior to the disbursement date. (SAC, ¶ 29.) It is alleged that the escrow instructions were breached because distribution occurred without the satisfaction of these conditions. (SAC, ¶ 31.) As discussed above, a breach of contract cause of action requires (1) a contract, (2) plaintiff’s performance under the contract or excuse from performance, (3) breach of the agreement by the defendant, and (4) an injury to plaintiff due to said breach. (Abdelhamid, supra, 182 Cal.App.4th at 999.)

Plaintiff has failed to authenticate her documents, this includes the escrow instructions. She fails to provide any evidence that establishes she is a party to the escrow instruction contract or a third-party beneficiary. Plaintiff provides a declaration which states: “[t]he escrow instructions for this transaction expressly required that the lender’s deed of trust be recorded in second position prior to funding. Despite this requirement, funding occurred without confirmation of lien position based on a current title report.” (Preliminary Injunction Merits Exhibit Binder, Declaration 2, Supplemental Declaration of Audrey Little in Support of Motion for Leave to File Second Amended Complaint, ¶ 6.)

The only other evidence is a declaration which states that the closing instructions required the deed of trust to be recorded in second lien position before the date of disbursement; Rocket Close, LLC was required to follow those instructions exactly before the loan proceeds could be disbursed; Rocket Close, LLC failed to follow the instructions; and had Rocket Close, LLC complied with the closing instructions the escrow would not have closed and the proceeds would not have been disbursed. (Preliminary Injunction Merits Exhibit Binder, Declaration 2, Declaration of Audrey Little in Support of Plaintiff’s Supplemental Ex Parte Application for Temporary Restraining Order, ¶¶ 9-13.)

None of this evidence establishes that Oaktree breached the escrow instructions. It indicates that Rocket Close, LLC was the escrow and closing agent and it was required to withhold disbursements under the closing instructions until certain conditions were met. No evidence has been provided regarding the “QC” review or any breach by Oaktree. Additionally, as discussed above, Plaintiff alleges in this cause of action that it is not a party to the agreement but a third-party beneficiary. Plaintiff has provided no evidence to support any of the requirements to establish third-party beneficiary.

Due to this, Plaintiff has failed to establish a reasonable probability of prevailing on this cause of action.

Fourth Cause of Action for Negligence: This cause of action pertains to Oaktree’s “QC” review prior to funding. Plaintiff provides no evidence regarding what a “QC” review is, what was required under it, or how Oaktree failed to comply with said requirements. As discussed above, a negligence cause of action requires a duty, breach of duty, causation, and damages. (Kesner, supra, 1 Cal.5th at 1142.) Plaintiff has failed to provide any evidence to establish a duty or breach of said duty.

Sixth Cause of Action for Rescission: As discussed previously, this is not a cause of action but a remedy. As such, Plaintiff does not have a reasonable probability of prevailing on this cause of action.

Seventh Cause of Action for Unfair Competition Law: The UCL defines unfair competition as including “any unlawful, unfair or fraudulent business act or practice.” An act is unlawful if it violates rules set out in other laws. (Graham, supra, 226 Cal.App.4th at 610.) “An unfair business practice occurs when the practice offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Podolsky, supra, 50 Cal. App. 4th at 647.)

Fraud under UCL only requires a showing that members of the public are likely to be deceived by the business practice. (Olsen, supra, 48 Cal.App.4th at 618.) This cause of action is based on the closing of escrow without complying with the escrow instructions and enforcement of the loan. As discussed above, the closing of escrow does not appear to pertain to Oaktree. Plaintiff has failed to provide any evidence that Oaktree acted improperly in connection with the closing of escrow. As for Plaintiff’s assertion that Oaktree has been improperly enforcing the loan, it fails to cite any statutes that Oaktree has violated.

Additionally, Plaintiff does not dispute that funds under the loan were disbursed and she does not provide any evidence that she attempted to return these funds. Enforcement of the loan on the part of Oaktree under these conductions is not unfair.

Eighth Cause of Action for Wrongful Post-Notice Enforcement and Collection: As discussed above, it is unclear what this is. Plaintiff has failed to identify any statutory authority to support this claim. As such, she has failed to establish a reasonable probability that she will prevail on this cause of action.

Ninth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing: This cause of action is based on Oaktree’s refusal to pause collection under the loan agreement. Implied in every contract is a duty on each party to act in good faith and fair dealing when performing and enforcing the agreement. (Careau & Co., supra, 222 Cal.App.3d at 1393.) “Simply stated, the burden imposed is ‘that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.’” (Id.) It is unclear how Oaktree’s enforcement of the loan agreement constitutes a interference with Plaintif’s right to receive the benefits of the loan agreement. It is not disputed that funds were disbursed under the loan agreement. Plaintiff fails to provide any evidence that the loan agreement required that the loan be placed in the second lien position.

Tenth Cause of Action for Intentional Infliction of Emotional Distress: Intentional infliction of emotional distress requires: (1) outrageous conduct, (2) intent to cause or reckless disregard of the probability of causing emotional distress, (3) severe emotional distress, and (4) accrual and proximate causation. (Stoiber, supra, 101 Cal.App.3d at 921.) Behavior is outrageous if it exceeds all bounds typically tolerated by decent society. (Id.) There is no liability under a claim for intentional infliction of emotional distress for insults, threats, annoyances, indignities, petty oppressions, or other trivial behavior. (Pilotrik, supra, 208 Cal.App.4th at 1610.)

This cause of action is based on Oaktree’s alleged refusal of allowing Plaintiff to stop making mortgage payments while the parties addressed Plaintiff’s allegations. (SAC, ¶ 80A.) This conduct is not outrageous. It does not exceed all bounds typically tolerated by decedent society.

Eleventh Cause of Action for Rosenthal Act: The Rosenthal Act is the statutory equivalent of the Federal Fair Debt Collection Practices Act. The purpose is “to prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring such debts.” (Civil Code § 1788.1(b).) Plaintiff fails to identify in her SAC or her moving papers what provision of the Rosenthal Act has been violated. She does not discuss this cause of action in her moving papers.

Twelfth Cause of Action for Cancellation of Instrument: Civil Code § 3412 provides, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may upon his application, but so adjudged, and ordered to delivered up or canceled.” Plaintiff alleges that the deed of trust and note are void because the closing instructions were not complied with. An instrument can be void due to fraud. (Lauckhart, supra, 92 Cal.App.5th at 900.)

A forged instrument is void. (Wutzke, supra, 151 Cal.App.3d at 43.) Plaintiff fails to cite to any authority that a deed of trust and note are void because there was a failure to comply with all escrow instructions. As such, the instruments do not appear void. To set aside a voidable instrument, a plaintiff is required to allege tender. (Saterbak, supra, 245 Cal.App.4th at 819.) Plaintiff has failed to allege tender and provides no evidence in her moving papers that she could tender the amount due.

Since Plaintiff has failed to establish a reasonable probability of prevailing on any of her claims, it is not necessary to address the issue of irreparable harm.

Motion for Preliminary Injunction DENIED.

Request for Sanctions by Oaktree DENIED.