U.S. Eagle Federal Credit Union vs GHORBANI, et al.

Plaintiff further alleges that Fremont recorded a loan to Advance after the bankruptcy filing and recorded financing statements. (Compl. ¶¶ 35-37.) Also in October 2023, IAW recorded a financing statement relating to a loan to Advance. (Compl. ¶ 38.) Fremont and IAW recorded a UCC financing statement as to Advance’s property in September 2024. (Compl. ¶ 40.)

Plaintiff alleges that Advance sought to transfer intellectual property to IAW, in violation of the loan documents. (Compl. ¶ 48.) Plaintiff further alleges that Fremont violated the subordination agreements by coordinating the assignment of its debt to IAW and by allowing the intellectual property transfer to IAW. (Compl. ¶ 49.) Plaintiff contends that Ghorbani orchestrated the transfer from Advance to IAW. (Compl. ¶ 50.)

Ghorbani and Barba (collectively, the “Individuals”) filed a Cross-Complaint in pro per on November 20, 2025. Ghorbani and Barba’s operative First Amended Cross-Complaint (“Individuals’ FACC”) filed on December 29, 2025 against Madison One Fund, LLC and Madison One Capital LLC (collectively, “Madison”) and USEFCU (collectively, Cross- Defendants”) alleges (1) Breach of Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3) Fraudulent Misrepresentation; (4) Negligent Misrepresentation; (5) Breach of Fiduciary Duty; (6) Violation of UCC Article 9; (7) Violation of SBA Lending Regulations; (8) Violation of Business & Professions Code § 17200; (9) Intentional Interference with Prospective Economic Advantage; (10) Negligence; (11) Declaratory Relief; (12) Intentional Infliction of Emotional Distress; and (13) Violation of Fair Credit Reporting Act.

Ghorbani and Barba generally allege Cross-Defendants knew or should have known that the loan was inadequate to fund a manufacturing project; refused to restructure the loan; abandoned the project; and ignored notices from Cross-Complainants. (Individuals’ FACC ¶¶ 9-14.)

On December 9, 2025, Advance, Fremont, and IAW (collectively, “the Entities”) filed a Cross- Complaint. Advance, Fremont, and IAW’s operative First Amended Cross-Complaint (“Entities’ FACC”) filed on January 5, 2026 against Madison and USEFCU alleges (1) Breach of Contract; (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3) Fraudulent Misrepresentation; (4) Negligent Misrepresentation; (5) Breach of Fiduciary Duty; (6) Violation of UCC Article 9; (7) Violation of SBA Lending Regulations; (8) Violation of Business & Professions Code § 17200; (9) Intentional Interference with Prospective Economic Advantage; and (10) Declaratory Relief.

Similar to the Individuals’ FACC, Advance, Fremont, and IAW generally allege that Cross- Defendants knew or should have known that the loan was inadequate to fund a manufacturing project; refused to restructure the loan; abandoned the project; and ignored notices from Cross- Complainants. (Entites’ FACC ¶¶ 4-13.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

USEFCU and Madison now separately demur to both the Individuals’ FACC and the Entities’ FACC, on the grounds of uncertainty and for failure to allege facts sufficient to constitute a cause of action. The demurrers are opposed.

LEGAL STANDARD

A demurrer tests the legal sufficiency of factual allegations in a complaint. (Title Ins. Co. v. Comerica Bank-California (1994) 27 Cal.App.4th 800, 807.) A plaintiff must plead facts as are necessary to acquaint a defendant with the nature, source and extent of her claims to provide defendant with notice of the issues sufficient to enable preparation of a defense. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 570.) A court should not sustain a general demurrer unless the complaint liberally construed fails to state a cause of action on any theory. (Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 578.)

On a demurrer, the court accepts the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law. (Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 276.) Facts alleged in the pleading are deemed to be true, however improbable they may be. (Id. at p. 280, citations omitted.)

DEMURRERS TO THE FIRST AMENDED CROSS-COMPLAINT OF ADVANCE, FREMONT, AND IAW

Procedural Issues

The Entities’ FACC fails to comply with California Rules of Court rule 2.112 such that Cross- Defendants and the Court are not adequately informed as to which claim is directed at which cross-defendant. The causes of action do not specify the cross-defendant(s) the cause of action is alleged against. Nor do the allegations following each cause of action identify specific crossdefendants. The general allegations collectively refer to the Cross-Defendants, without specifying which cross-defendant did what action or omission.

Advance, Fremont, and IAW must comply with the California Rules of Court as well as this Court’s Local Rules in all further filings with this Court. Documents that are not in compliance with the applicable rules of procedure may result in sanctions, including striking the nonconforming document from the record.

The demurrer to the Entities’ FACC on the grounds of uncertainty is SUSTAINED WITH LEAVE TO AMEND. Advance, Fremont, and IAW must identify which causes of action are directed at which cross-defendant(s).

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

Notwithstanding the foregoing, the Court will address the arguments of USEFCU and Madison regarding whether specific causes of action are adequately pleaded. The Entities’ opposition concedes that the FACC had issues and submits a proposed Second Amended Cross-Complaint with its opposition papers. The Entities’ opposition also includes additional facts regarding the claims against both USEFCU and Madison, but such facts are not alleged in the operative FACC.

Breach of Contract – First Cause of Action

The elements of a cause of action for breach of contract are: (1) the existence of the contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745.) Where the claim is based on breach of a written contract, the terms must be set out verbatim in the body of the complaint, or a copy of the document must be attached and incorporated by reference. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 459.)

The FACC fails to identify the contract or agreement at issue, nor does it allege the parties to the contract(s) at issue. The FAC further fails to allege the terms of the contract, or what terms were purportedly breached.

The FACC does not allege facts sufficient to state a claim for breach of contract. The demurrers to the First Cause of Action are therefore SUSTAINED.

Breach of the Implied Covenant of Good Faith and Fair Dealing – Second Cause of Action

“[T]he law implies in every contract a covenant of good faith and fair dealing.” (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818.) As the Entities’ FACC fails to allege the existence of a contract, the second cause of action or breach of the implied covenant is not sufficiently pleaded.

Moreover, if the plaintiff’s allegations of breach of the covenant of good faith ‘do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.’ ” (.”]; Bionghi v. Metropolitan Water Dist. of So. California (1999) 70 Cal.App.4th 1358, 1370, quoting Careau & Co., supra, 222 Cal.App.3d at p. 1395.) “Thus, the cause of action for breach of the implied covenant is duplicative of the cause of action for breach of contract, and may be disregarded.” Bionghi, supra 70 Cal.App.4th 1358, 1370.)

Here, the Entities’ FACC seek the same damages in both its First and Second Causes of Action.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 (Entities’ FACC ¶¶ 17, 21.) As such, it appears that the claims are duplicative and the Second Cause of Action should be disregarded as duplicative.

The demurrers to the Second Cause of Action are SUSTAINED.

Fraudulent and Negligent Misrepresentation – Third and Fourth Causes of Action

A claim for intentional misrepresentation requires (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) actual and justifiable reliance; and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.) “The essential elements of a court for negligent misrepresentation are the same except that it does not require knowledge of falsity but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true.” (Id. at p. 231, internal citations omitted.)

A cause of action for fraud “must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) To satisfy “ ‘[t]his particularity requirement,’ ” a plaintiff must plead “ ‘facts which “show how, when, where, to whom, and by what means the representations were tendered.” ’ ” (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645; e.g. Tenet Healthsystem Desert, Inc. v.

Blue Cross of California (2016) 245 Cal.App.4th 821, 838-39 [the pleadings must allege, how the statements were made, when the statements were made, where the statements were made, to whom the statements were made and the means by which they were made].) The specificity requirement applies to both affirmative misrepresentation and concealment claims. (Cansino v. Bank of Am. (2014) 224 Cal.App.4th 1462, 1472.)

Here, the Entities’ FACC fails to specifically plead what representation was made by which cross-defendant(s); to whom the representation was made; how/the means the representation was made; where the representations were made; an intent to induce the entities’ reliance; and/or the entities’ reliance.

The demurrers to the Third and Fourth Causes of Action are SUSTAINED.

Breach of Fiduciary Duty – Fifth Cause of Action

A breach of fiduciary duty requires a plaintiff to plead (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by that breach. (O’Neal v. Stanislaus County Employees’ Retirement Assn. (2017) 8 Cal.App.5th 1184, 1215.) Whether a fiduciary duty exists is a generally a question of law, while whether the fiduciary duty has been breached is a question of fact. (Id, internal citations omitted.) No fiduciary duty exists between a borrower and a lender in an arms’ length transaction. (Rufini v. CitiMortgage, Inc. (2014) 227 Cal.App.4th

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 299, 312.)

The Entities’ FACC alleges in a conclusory fashion that a “special relationship” existed between Cross-Complainants and Cross-Defendants such that Cross-Defendants owed Cross- Complainants fiduciary duties. (Entities’ FACC ¶ 29.) The FACC alleges that Cross-Defendants assumed duties beyond a conventional lender by commissioning feasibility studies, controlling liquidation decision, managing investor relations, and overseeing chain of custody of intellectual property. (Entities’ FACC ¶ 14.)

As noted above, the Entities’ FACC fails to specify which specific cross-defendant did what act or omission. As pleaded, the Entities’ FACC fails to allege facts to support the existence of a fiduciary duty. The Entities’ Opposition relies on its amended claims set forth in its proposed Second Amended Cross-Complaint, and does not contend that it has sufficiently alleged a claim for breach of fiduciary duty against any of the cross-defendants.

The demurrers to the Fifth Cause of Action are SUSTAINED.

Violations of UCC Article 9 and SBA Lending Regulations – Sixth and Seventh Causes of Action

Generally, statutory causes of action must be pleaded with particularity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

Here, the Entities’ FACC only alleges that Cross-Defendants’ abandonment of collateral and failure to reasonably dispose of the collateral violates UCC Article 9 and SBA lending regulations. (Entities’ FACC ¶¶ 32-37.) As discussed above, there are no allegations as to which cross-defendant did which action or omission. There are no specific provisions of either UCC Article 9 or the SBA cited in the FACC; as such, it is unclear which part(s) of the statutes were violated by which cross-defendant. As such, the Entities fail to allege with requisite specificity how any cross-defendant violated UCC Article 9 or SBA lending regulations.

The demurrers to the Sixth and Seventh Causes of Action are SUSTAINED.

Violation of Business & Professions Code § 17200 – Eighth Cause of Action

The Unfair Competition Law (“UCL”) codified in Business & Professions Code § 17200 prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising ....” (Cal. Bus. & Prof. Code § 17200.) Each of the three “prongs” under the UCL – (1) unlawful, (2) unfair, and (3) fraudulent – creates an independent theory of liability. (Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co. (1999) 20 Cal.4th 163,

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 180.) Causes of action under the UCL must be pled with “reasonable particularity.” (Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261.)

Here, the Entities appear to allege unlawful and unfair practices but fail to identify which crossdefendant did what action that was purportedly unlawful or unfair. To the extent the Eighth Cause of Action is derivative of any of the other causes of action, it is subject to demurrer for the reasons stated herein.

The demurrers to the Eighth Cause of Action are SUSTAINED.

Intentional Interference with Prospective Economic Advantage – Ninth Cause of Action

The elements of a claim for intentional interference with economic advantage include (1) existence of an economic relationship with the probability of future economic benefit to plaintiff, between plaintiff and a third party; (2) defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by defendant’s action. (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)

The Entities’ FACC alleges that “Cross Defendants intentional misrepresentations of underfunding the loan and abandoning the collateral disrupted the Cross Complainants profits by causing the contract to fail.” (FACC ¶ 42.) The FACC then refers to Paragraphs 5-10. (Id.)

It is unclear who the contracting parties are, what the contract is, and who the third-party is, as required for a claim for intentional interference with economic advantage. Nor do the Entities allege any cross-defendants’ knowledge of an economic relationship between the Entities and a third party.

The demurrers to the Ninth Cause of Action are SUSTAINED.

Declaratory Relief – Tenth Cause of Action

The elements for a claim of declaratory relief are (1) a proper subject of declaratory relief; and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations. (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

The Entities’ FACC fails to allege a justiciable controversy ripe for the Court’s determination; it requests release of liens on intellectual property including patents and trademarks. (Entities’ FACC ¶ 45.) However, there are no allegations regarding ownership of such intellectual property, or which cross-defendant has asserted a lien on such property.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

The demurrers to the Tenth Cause of Action are SUSTAINED.

Leave to Amend

Cross-Defendants contend that the Entities cannot cure the above-identified defects by amendment. However, on an original complaint, a trial court’s denial of leave to amend constitutes an abuse of discretion unless the complaint on its face shows that it is incapable of amendment. (Eghtesad v. State Farm General Insurance Company (2020) 51 Cal.App.5th 406, 411-412.) Although this is an amended cross-complaint, it is the first time the pleading has been at issue before the Court. As such, the Court grants the Entities LEAVE TO AMEND.

DEMURRERS TO THE FIRST AMENDED CROSS-COMPLAINT OF GHORBANI AND BARBA

Procedural Issues

The Individuals’ FACC largely refers to Cross-Defendants collectively without specifying which Cross-Defendant did what action or omission. All causes of action are brought against all Cross- Defendants. However, the allegations following each cause of action do not identify specific acts of any specific cross-defendant. As such, both the Cross-Defendants and the Court are not adequately on notice as claim against which party.

The Court further notes that the FACC contains 8 pages of allegations, with the remaining 494 pages containing several exhibits. The FACC cites various exhibits throughout, but fail to point to specific terms or provisions of these exhibits that are relevant to the claims asserted. The general references to entire, multi-page exhibits without additional specificity render the allegations vague, ambiguous, and uncertain.

The demurrer to the Individuals’ FACC on the grounds of uncertainty is SUSTAINED WITH LEAVE TO AMEND. The Individuals must allege specific acts and/or omissions by a specific Cross-Defendant. Any references to exhibits should provide supporting information to the claims alleged so as to properly provide Cross-Defendants with notice of the claims against them.

Notwithstanding the foregoing, the Court will address the arguments of USEFCU and Madison regarding whether specific causes of action are adequately pleaded. The Individuals’ opposition concedes that the FACC had issues and submits a proposed Second Amended Cross-Complaint with their opposition papers. The Individuals’ opposition also includes additional facts regarding the claims against both USEFCU and Madison, but such facts are not alleged in the operative FACC.

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

Breach of Contract – First Cause of Action

The elements of a cause of action for breach of contract are: (1) the existence of the contract; (2) performance by the plaintiff or excuse for nonperformance; (3) breach by the defendant; and (4) damages. (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745.) Where the claim is based on breach of a written contract, the terms must be set out verbatim in the body of the complaint, or a copy of the document must be attached and incorporated by reference. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 459.)

The FACC fails to identify the contract or agreement at issue, nor does it allege the parties to the contract(s) at issue. The FAC further fails to allege the terms of the contract, or what terms were purportedly breached.

The FACC does not allege facts sufficient to state a claim for breach of contract. The demurrers to the First Cause of Action are therefore SUSTAINED.

Breach of the Implied Covenant of Good Faith and Fair Dealing – Second Cause of Action

“[T]he law implies in every contract a covenant of good faith and fair dealing.” (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818.) As the Entities’ FACC fails to allege the existence of a contract, the second cause of action or breach of the implied covenant is not sufficiently pleaded.

Moreover, if the plaintiff’s allegations of breach of the covenant of good faith ‘do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.’ ” (.”]; Bionghi v. Metropolitan Water Dist. of So. California (1999) 70 Cal.App.4th 1358, 1370, quoting Careau & Co., supra, 222 Cal.App.3d at p. 1395.) “Thus, the cause of action for breach of the implied covenant is duplicative of the cause of action for breach of contract, and may be disregarded.” Bionghi, supra 70 Cal.App.4th 1358, 1370.)

Here, the Individuals’ FACC seek the same damages in both its First and Second Causes of Action. (Individuals’ FACC ¶¶ 19, 24.) As such, it appears that the claims are duplicative and the Second Cause of Action should be disregarded as duplicative.

The demurrers to the Second Cause of Action are SUSTAINED.

Fraudulent and Negligent Misrepresentation – Third and Fourth Causes of Action

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

A claim for intentional misrepresentation requires (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) actual and justifiable reliance; and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.) “The essential elements of a court for negligent misrepresentation are the same except that it does not require knowledge of falsity but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true.” (Id. at p. 231, internal citations omitted.)

A cause of action for fraud “must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) To satisfy “ ‘[t]his particularity requirement,’ ” a plaintiff must plead “ ‘facts which “show how, when, where, to whom, and by what means the representations were tendered.” ’ ” (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645; e.g. Tenet Healthsystem Desert, Inc. v.

Blue Cross of California (2016) 245 Cal.App.4th 821, 838-39 [the pleadings must allege, how the statements were made, when the statements were made, where the statements were made, to whom the statements were made and the means by which they were made].) The specificity requirement applies to both affirmative misrepresentation and concealment claims. (Cansino v. Bank of Am. (2014) 224 Cal.App.4th 1462, 1472.)

Here, the Individuals’ FACC fails to specifically plead, without resorting to general conclusions or vague citations to exhibits, what representation was made by which cross-defendant(s); to whom the representation was made; how/the means the representation was made; where the representations were made; an intent to induce the Individuals’ reliance; and/or the Individuals’ reliance.

The demurrers to the Third and Fourth Causes of Action are SUSTAINED.

Breach of Fiduciary Duty – Fifth Cause of Action

A breach of fiduciary duty requires a plaintiff to plead (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by that breach. (O’Neal v. Stanislaus County Employees’ Retirement Assn. (2017) 8 Cal.App.5th 1184, 1215.) Whether a fiduciary duty exists is a generally a question of law, while whether the fiduciary duty has been breached is a question of fact. (Id, internal citations omitted.) No fiduciary duty exists between a borrower and a lender in an arms’ length transaction. (Rufini v. CitiMortgage, Inc. (2014) 227 Cal.App.4th 299, 312.)

The Individuals’ FACC alleges in a conclusory fashion that “special circumstances” existed such that Cross-Defendants owed Cross-Complainants fiduciary duties. (Individuals’ FACC ¶ 32.) The FACC alleges that a breach occurred “by failing standards in liquidation.” (Id. ¶ 33.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517

As noted above, the Individuals’ FACC fails to specify which specific cross-defendant did what act or omission. As pleaded, the Individuals’ FACC fails to allege facts to support the existence of a fiduciary duty. The Individuals’ Opposition relies on its amended claims set forth in its proposed Second Amended Cross-Complaint, and does not contend that it has sufficiently alleged a claim for breach of fiduciary duty against any of the cross-defendants.

The demurrers to the Fifth Cause of Action are SUSTAINED.

Violations of UCC Article 9, SBA Lending Regulations, and the Fair Credit Reporting Act – Sixth, Seventh, and Thirteenth Causes of Action

Generally, statutory causes of action must be pleaded with particularity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

Here, the Individuals’ FACC alleges “failed reasonable disposition” and violation of “SOP 50 57.” (Individuals’ FACC ¶¶ 36, 38.) The FACC further alleges that Cross-Defendants violated the FCRA by inaccurately reporting the loan status to credit bureaus without noting their misconduct/abandonment, and by failing to investigate disputes. (Id. ¶ 57.)

As discussed above, there are no allegations as to which cross-defendant did which action or omission. There are no specific provisions of any of the statutes/regulations cited and it is unclear which part(s) of the statutes/regulations were purportedly violated by which crossdefendant. As such, the Individuals fail to allege requisite specificity their statutory causes of action.

The demurrers to the Sixth, Seventh, and Thirteenth Causes of Action are SUSTAINED.

Violation of Business & Professions Code § 17200 – Eighth Cause of Action

The Unfair Competition Law (“UCL”) codified in Business & Professions Code § 17200 prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising ....” (Cal. Bus. & Prof. Code § 17200.) Each of the three “prongs” under the UCL – (1) unlawful, (2) unfair, and (3) fraudulent – creates an independent theory of liability. (Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co. (1999) 20 Cal.4th 163, 180.) Causes of action under the UCL must be pled with “reasonable particularity.” (Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261.)

Here, the Individuals allege “[u]nlawful/unfair/fraudulent practices (UCC/SBA violations, misreps; Exhibit 12 fees).” (Individuals FACC ¶ 42.) The pleading fails to identify which cross-

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 defendant did what action that was purportedly unlawful or unfair. There is no particularity in the claims asserted under the Eighth Cause of Action. To the extent the Eighth Cause of Action is derivative of any of the other causes of action, it is subject to demurrer for the reasons stated herein.

The demurrers to the Eighth Cause of Action are SUSTAINED.

Intentional Interference with Prospective Economic Advantage – Ninth Cause of Action

The elements of a claim for intentional interference with economic advantage include (1) existence of an economic relationship with the probability of future economic benefit to plaintiff, between plaintiff and a third party; (2) defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by defendant’s action. (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)

The Individuals’ FACC alleges that “[d]isrupted relationships via wrongful acts (Exhibit 18, 19 conversions [sic].” There are no allegations as towho the contracting parties are, what the contract is, and who the third-party is, as required for a claim for intentional interference with economic advantage. Nor do the Individuals allege any cross-defendants’ knowledge of an economic relationship between the Individuals and a third party.

The demurrers to the Ninth Cause of Action are SUSTAINED.

Negligence – Tenth Cause of Action

The elements of a negligence claim are (1) defendant owed plaintiff a duty; (2) defendant breached that duty; (3) causation; and (4) damages. (Thomas v. Stenberg (2012) 206 Cal.App.4th 654, 662.)

The Individuals’ FACC does not allege that any cross-defendant owed the Individuals a duty, or that a breach of that duty caused Individuals damages. The FACC only alleges that a “[d]uty [was] breached by negligent liquidation (Exhibits 10, 13).” (Individuals’ FACC ¶ 48.)

USEFCU further contends that the negligence claim is barred by the economic loss doctrine.

The demurrers to the Tenth Cause of Action are SUSTAINED.

Declaratory Relief – Eleventh Cause of Action

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 The elements for a claim of declaratory relief are (1) a proper subject of declaratory relief; and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations. (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

The Individuals’ FACC fails to allege a justiciable controversy ripe for the Court’s determination. The FACC merely alleges that the controversy is a loan extinguishment due to violations, and that the Individuals seek a declaration of a loan balance of zero. (Individuals’ FACC ¶ 51.) However, there are no allegations showing that the Individuals or any of the crossdefendants are parties to a loan agreement, such that it is unclear if the Individuals have standing to seek declaratory relief, or if any cross-defendant is the proper party if the claim is brought against them.

The demurrers to the Eleventh Cause of Action are SUSTAINED.

Intentional Infliction of Emotional Distress – Twelfth Cause of Action

A cause of action for intentional infliction of emotional distress (“IIED”) requires proof of (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff suffered severe emotional distress; and (3) the defendant’s extreme and outrageous conduct was the actual and proximate cause of the severe emotional distress. (Crouch v. Trinity Christian Center of Santa Ana, Inc. (2019) 39 Cal.App.5th 995, 1007.) A defendant’s conduct is considered outrageous if it is so extreme as to exceed all bounds of that usually tolerated in a civilized society. (Id., internal citations omitted.)

The Individuals’ FACC alleges that Cross-Defendants “engaged in extreme and outrageous conduct by abandoning assets, ignoring notices, and forcing bankruptcy/conversion despite knowledge of inadequacy.” (Individuals’ FACC ¶ 53.) These facts alleged do not involve conduct that is so extreme as to exceed all bounds usually tolerated in a civilized society. Individuals’ opposition states that it has omitted this claim from its proposed amended pleading, but requests leave to amend regardless.

The demurrers to the Twelfth Cause of Action are SUSTAINED.

Leave to Amend

Cross-Defendants contend that the Individuals cannot cure the above-identified defects by amendment. However, on an original complaint, a trial court’s denial of leave to amend constitutes an abuse of discretion unless the complaint on its face shows that it is incapable of amendment. (Eghtesad v. State Farm General Insurance Company (2020) 51 Cal.App.5th 406,

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 411-412.) Although this is an amended cross-complaint, it is the first time the pleading has been at issue before the Court. As such, the Court grants the Individuals LEAVE TO AMEND.

CONCLUSION

U.S. Eagle Federal Credit Union’s Demurrer to First Amended Cross-Complaint of Advance International Inc., Fremont GMB, LLC and IAW Ever Holdings Co LLC is SUSTAINED WITH LEAVE TO AMEND.

Madison One Fund, LLC and Madison One Capital LLC’s Demurrer to First Amended Cross- Complaint of Advance International Inc., Fremont GMBA, LLC, and IAW Ever Holdings Co LLC is SUSTAINED WITH LEAVE TO AMEND.

U.S. Eagle Federal Credit Union’s Demurrer to First Amended Cross-Complaint of Shahmard M. Ghorbani and Gabriela Barba is SUSTAINED WITH LEAVE TO AMEND.

Madison One Fund, LLC and Madison One Capital LLC’s Demurrer to First Amended Cross- Complaint of Shahmard M. Ghorbani and Gabriela Barba is SUSTAINED WITH LEAVE TO AMEND.

If the Entities and Individuals can do so in good faith, they may amend their pleading pursuant to this Order. The amended cross-complaints shall be filed and served by June 22, 2026. (C.R.C. Rule 3.1320(g).) PLEASE NOTE that any proposed amended pleadings submitted with the opposition papers are NOT deemed filed or served, nor should this ruling be construed as a determination on the merits as to the sufficiency of the claims asserted in the proposed amended pleadings.

Cross-Complainants may not include in the amended cross-complaint any causes of action that are not asserted in their respective FACCs. (See Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) Cross-Complainants are further advised that, in the event they fails to timely file an amended pleading, the FACCs are subject to dismissal pursuant to C.C.P. § 581(f)(2) and Rules of Court, rule 3.1320(h).

HOW DO I CONTEST A TENTATIVE RULING?

THROUGH ECOURT

Notify the Court and all the other parties no later than 4:00 p.m. (but by Noon if possible) at least

SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 one (1) court day before the scheduled hearing, and briefly identify the issues you wish to argue through the following steps: 1. Log into eCourt Public Portal 2. Case Search 3. Enter the Case Number and select "Search" 4. Select the Case Name 5. Select the Tentative Rulings Tab 6. Select "Click to Contest this Ruling" 7. Enter your Name and Reason for Contesting 8. Select "Proceed"

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SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA

25CV146515: U.S. EAGLE FEDERAL CREDIT UNION vs GHORBANI, et al. 06/11/2026 Hearing on Demurrer NOTICE OF DEMURRER AND DEMURRER OF CROSS-DEFENDANTS MADISON ONE LENDER SERVICES, LLC, MADISON ONE FUND, LLC, AND MADISON ONE CAPITAL, LLC TO FIRST AMENDED CROSS COMPLAINT OF ADVANCE INTERNATIONAL, INC., FREMONT GHBA, LLC, AND IAW EVER HOLDINGS CO, LLC;... CRS# 275450524342 in Department 517 161.199.138.10 (US West) 161.199.136.10 (US East) Meeting ID: 161 8198 9812