ALEXANDER LU VS RUSHMORE LOAN MANAGEMENT SERVICES, LLC

Tentative Rulings

Case Number: EC066657    Hearing Date: December 12, 2019    Dept: E

DEMURRER

[CCP §430.10 et. seq.]

Case: Alexander Lu v. Rushmore Loan Management Services, LLC (EC 066657)

Defendant Bank of America, N.A.’s (“BANA”) Demurrer to Plaintiff’s Second Amended Complaint (“SAC”) is SUSTAINED WITHOUT LEAVE TO AMEND.

The Court has reluctantly considered plaintiff’s late-filed “Supplemental Opposition,” which was filed without leave of Court and after the demurrer had been fully briefed. Indeed, plaintiff made the strategic decision simply to oppose the demurrer initially on the ground that BANA’s brief was over the page limit set forth in CRC Rule 3.1113(d). Ultimately acknowledging the folly of that position one day before the initially scheduled hearing on the demurrer (see 12/5/19 Coplan Decl.), plaintiff thereafter filed the Supplemental Opposition merely three days before the instant hearing, leaving virtually no time for BANA to submit a reply. Plaintiff is hereby warned that, in the future, the Court may decline to consider filings not made in accordance with the rules and statutes that govern this litigation.

On the merits, the Court finds that the new allegations of the SAC fail to sufficiently correct the deficiencies previously noted in this Court’s August 16, 2019 minute order sustaining the demurrer to the First Amended Complaint (“FAC”), including the bar of the statute of limitations, as well as the judicial estoppel and res judicata bars flowing from plaintiff’s bankruptcy, bankruptcy proceedings and filings, and bankruptcy discharge. The SAC’s new allegations concerning a scheme pursuant to which BANA is sought to be held responsible for Rushmore’s conduct from 2016 onward (after BANA is alleged to have transferred all interest in the Note, Deed of Trust and subject property to MTGLQ Investors LP, as is expressly permitted under the DOT), are insufficient to create BANA’s vicarious responsibility for those co-defendants’ alleged wrongdoing. In this regard, it is noteworthy that the purportedly conspiratorial act in which BANA is alleged to have engaged, namely, “with[olding] the terms of the Loan Modification Agreement from MTLGQ/RUSHMORE” (SAC ¶ 37) is flatly inconsistent with conspiring with or knowingly aiding and abetting those entities to harm plaintiff.

Because plaintiff has failed in the SAC to correct the deficiencies of the FAC, despite being permitted to do so, and because plaintiff has failed in his Supplemental Opposition to meet the burden of demonstrating how the SAC could be amended to cure it of the repeated defects, the demurrer is now sustained without leave to amend.

Defendant BANA’s Request for Judicial Notice is GRANTED in part. The Court has taken judicial notice of the existence of the subject documents in the Court file, but not the truth of hearsay allegations contained therein, except in connection with certain exceptions as enumerated in Day v. Sharp (1975) 50 Cal.App.3d 904, 914, including the effect of Court orders. The Court has considered the absence of material in the documents to the extent permissible in connection with arguments that inconsistent positions have been taken and judicial estoppel may apply.

Defendant BANA shall submit an appropriate proposed order of dismissal.