CEFERINO CAGANG, ET AL. VS. ALVERNAZ PARTNERS LLC, ET AL.

Defendant Clear Recon Corp. (“Defendant”)’s demurrer to Plaintiffs Cerefino Cagang’s and Erlinda Cagang (“Plaintiffs”)’s first amended complaint (“FAC”) filed October 1, 2025, is SUSTAINED WITHOUT LEAVE TO AMEND.

Defendant’s concurrently filed request for judicial notice of eight exhibits is GRANTED. (Evid. Code §§ 452, subdvs. (c) and (h), and 453; see also Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924, fn.1.)

Background

The Court treats the facts as alleged in the SAC a true for the purposes of these demurrers.

This matter regards a completed non-judicial foreclosure sale of the residential real property located at 54 Oceanside Drive, Daly City, California 94015 (hereinafter “subject property”) for which Defendant Clear Recon Corp. acted as substituted foreclosure trustee.

Plaintiffs’ FAC alleges in a conclusory fashion that defendant conducted the sale bidding unfairly which led to the foreclosure on the subject property and plaintiffs’ eviction. The only fact that Plaintiffs allege in support of that conclusion is that after “they learned that the property sold on February 28, 2024 during the auction bidding, Plaintiff’s sent an email to Defendant...[indicating an intent to] bid [the] amount of $877,632, which was higher than the [] purported bid price[,]” and a subsequent letter, which Defendant ignored. FAC ¶¶ 13, 16. Defendant generally demurs to the FAC on the grounds that it fails to state facts sufficient to constitute a cause of action against them pursuant to Code of Civil Procedure section 430.10 subdivision (e) and as fatally uncertain pursuant to subdivision (f). The Court agrees.

Legal Standard

A general demurrer under Section 430.10(e) of the Code of Civil Procedure for failure to state a cause of action challenges defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. Blank v. Kirwan (1985) 39 C3d 311, 318.

“It is not necessary that the cause of action be the one intended by plaintiff. The test is whether the complaint states any valid claim entitling plaintiff to relief. Thus, plaintiff may be mistaken as to the nature of the case, or the legal theory on which plaintiff can prevail. But if the essential facts of some valid cause of action are alleged, the complaint is good against a general demurrer.” Cal. Prac. Guide Civ. Pro. Before Trial Ch. 7(I)-A (citations omitted) MAY 18, 2026 LAW AND MOTION CALENDAR PAGE 8 JUDGE: HONORABLE DAVID A. SILBERMAN, DEPARTMENT 11 ________________________________________________________________________ “For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded (i.e., all ultimate facts alleged, but not contentions, deductions or conclusions of fact or law).” Cal. Prac. Guide Civ. Pro. Before Trial Ch. 7(I)-A (citations omitted).

A special demurrer for uncertainty pursuant to Code of Civil Procedure, section 430.10, subdivision (f), is disfavored and “will be sustained only where the complaint is so bad that defendant cannot reasonably respond— i.e., defendant cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against defendant.” Cal. Prac. Guide Civ. Pro. Before Trial Ch. 7(I)-A (citations omitted).

Discussion

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41, subd. (a).). The Court notes the parties met and conferred as required under the statute but were unable to reach a resolution.

The Court first notes Defendant’s overarching argument that as a foreclosure trustee, its actions were privileged thus Defendant has no liability to plaintiffs. There is a split of authority as to the immunity provided by section 2924, subdivision (d). (See Kaur v. Dual Arch Internat., Inc. (2024) 107 Cal.App.5th 359, 368.), which Defendant does not brief. Accordingly, the Court will address each cause of action separately

First Cause of Action: Violation of SB 1079 Plaintiffs’ first cause of action is for violation of SB 1079. Senate Bill 1079 codified Section 2724(m) of the Civil Code. to give certain persons additional rights in relation to certain trustee sales. Defendant asserts there is no private right of action under Section 2724(m). The Court agrees. As Defendant notes, the California Supreme Court explained in Crusader Ins. Co. v. Scottsdale Ins. Co. (1997) 54 Cal. App. 4th 121, 133, that when neither the language nor the history of a statute indicates an intent to create a new private right to sue, a party contending for judicial recognition of such a right bears a heavy, perhaps insurmountable, burden of persuasion. Plaintiff fails to identify anything in the statute or legislative history supporting such an intent. Further subsection (j) specifically vests authority to bring an action to enforce Section 2924m with public officials, not private citizens.

But the Court has found no case definitively addressing this issue, nor has Defendant cited one. Accordingly, the Court will not rely solely on this conclusion.

Regardless, as Defendant observes, even if a private right of action did exist, Plaintiffs have failed to allege a violation of Section 2924m. All they allege is that someone communicated to Defendant a desire to purchase the property. That allegation would not establish a violation of Section 2924m and, in fact, the allegations and Exhibits to the FAC make plain that Plaintiff did not satisfy the requirements of Section 2924m. See, e.g,, Applegate v. Carrington Foreclosure Servs., LLC (2025) 112 Cal. App. 5th 356, 366 (holding that plaintiff failed to establish compliance with Section 2924m).

Accordingly, the Court finds this cause of action lacks sufficient factual basis under Code of Civil Procedure 430.10, subdivision (e) and therefore the demurrer is SUSTAINED.

Second Cause of Action: Fraudulent and /or Negligent Misrepresentation “To establish a claim for fraudulent misrepresentation, the plaintiff must prove: “(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the MAY 18, 2026 LAW AND MOTION CALENDAR PAGE 9 JUDGE: HONORABLE DAVID A. SILBERMAN, DEPARTMENT 11 ________________________________________________________________________ plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and, (7) the plaintiff’s reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff.” Perlas v. GMAC Mortg., LLC (2010) 187 Cal. App. 4th 429, 434.

Upon review of the FAC, the Court does not find a sufficient factual basis for this cause of action apart from a somewhat confusing array of allegations in Paragraph 21 that do not appear to include any statements alleged to be false that plaintiffs relied upon to their detriment. Accordingly, the demurrer as to the second cause of action is SUSTAINED as lacking sufficient factual basis under Code of Civil Procedure 430.10, subdivision (e) and uncertain under subdivision (f).

Third Cause of Action: Declaratory Relief

“To qualify for declaratory relief under section 1060, plaintiffs were required to show their action (as refined on appeal) presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” Lee v. Silveira (2016) 6 Cal. App. 5th 527, 546. Plaintiff appears to seek a declaration Section 2924m provides a private right of action. Even assuming that is a proper use of Section 1060, the Court has already explained why it concludes Section 2924m does not provide such an action. More important, because Plaintiffs cannot allege that Defendant violated Section 2924m, there is no actual controversy with Defendant on this question. See also Applegate, 112 Cal. App 5th at370 (“Applegate's fourth cause of action for declaratory relief fails because the claim is based on his meritless allegation that CFS's failure to accept his bid was a violation of section 2924m.”). Accordingly, the demurrer to this cause of action is SUSTAINED pursuant to Code of Civil Procedure section 430.10, subdivision (e).

Fourth Cause of Action: Violation of Business & Professions Code section 17200 (Unfair Competition/Unfair Business Practices)

The FAC alleges that as result of Defendants’ violations in this cause of action, Plaintiff suffered substantial economic damages, aside from other special damages to include the loss of her bidding rights pursuant to SB 1079-and other laws. (FAC ¶ 36.) This cause of action is also foreclosed by Applegate. Id. at 369 (“[A]s we have explained above, his claim of violation of section 2924m fails as a matter of law. The trial court correctly found that Applegate’s claim under Business and Professions Code section 17200 fails because he cannot prove a violation of section 2924m.”). Accordingly, the demurrer as to this cause of action is SUSTAINED pursuant Code of Civil Procedure section 430.10, subdivision (e).

Fifth Cause of Action: Damages

As defendant points out, an allegation of damages does not present a legal cause of action. “Damages” is a remedy. Accordingly, the demurrer as to the Fifth Cause of Action is SUSTAINED for lack of sufficient factual basis under Code of Civil Procedure 430.10, subdivision (e).

Leave to Amend

“It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action... But the court should deny leave to amend where the facts are not in dispute and no liability exists under substantive law... It is not up to the judge to figure out how the complaint can be amended to state a cause of action. Rather, the burden is on plaintiff to show in what manner plaintiff can amend the complaint, and how that amendment will change the legal effect of the pleading.” Cal. Prac. Guide Civ. Pro. Before Trial Ch. 7(I)-A (citations omitted). MAY 18, 2026 LAW AND MOTION CALENDAR PAGE 10 JUDGE: HONORABLE DAVID A. SILBERMAN, DEPARTMENT 11 ________________________________________________________________________ Defendant argued in its memorandum that:” Plaintiff reallege in the FAC many of the same things that caused the Court to sustain the Demurrers to the original Complaint. Plaintiffs bear the burden of demonstrating how the FAC could be amended to cure the defects therein. But apparently no such possibility exists here.” (citation omitted). While opposing the demurrer and asking for leave to amend, Plaintiffs have failed to identify any facts that they contend they could allege and that would cure the legal defects in their First Amendment Complaint.

And as noted above, the exhibits to the FAC strongly suggest that Plaintiffs would be unable to allege a violation of Section 2924m. Accordingly, leave to amend is DENIED.