ASHER ENTERPRISES LLC VS. FIRST AMERICAN TITLE INSURANCE

Tentative Rulings

Case Number: LC105657    Hearing Date: September 01, 2020    Dept: T

THERE ARE TWO TENTATIVE RULINGS FOR 9/1/20

[TENTATIVE] ORDER: The Demurrer to the Second Amended Cross-Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. The Request for Judicial Notice is GRANTED. The Motion to Strike is MOOT.

1. INTRODUCTION

Cross-Defendant Auction.com, Inc. (“Auction”) demurs to the Second Amended Cross-Complaint (“SAXC”) filed by Cross-Complainant Triloki Devjani (“Devjani”.) The demurrer places into issue the first cause of action (“COA”) for BPC §17200 violation, the second COA for fraud – intentional misrepresentation, the third COA for fraud – negligent misrepresentation, the fourth COA for fraud – false promise, the fifth COA for fraud – concealment, the sixth COA for negligence and the seventh COA for money had and received: unjust enrichment. Auction also moves to strike the claim for punitive damages in the SAXC.

1. DISCUSSION

A. Communications Decency Act Immunity

Auction argues immunity based upon the federal Communications Decency Act of 1996, 47 USC §230 (“CDA”). Section 230(c) affords immunity to Interactive Computer Service (“ICS”) providers against suits that seek to hold an ICS liable for third-party content. Zeran v. America Online, Inc. (1997) 129 F.3d 327, 330. There are three elements that a defendant must establish to claim CDA immunity: (1) the defendant is a provider or user of an interactive computer service; (2) the cause of action treats the defendant as a publisher or speaker of information; and (3) the information at issue is provided by another information content provider. Delfino v. Agilent Technologies Inc. (2006) 145 Cal.App.4th 790, 804-805 (“Delfino”) [quoting Gentry v. eBay Inc. (2002)99 Cl.App.4th 816, 830.

Devjani disputes Auction’s status as an ICS because Auction is dissimilar to eBay due to Auction’s reliance upon Gentry v eBay (2002) 99 Cal. App. 4^th, 816. However, Devjani reliance on the distinguishing factors between eBay and Auction misses the point. Courts have broadly interpreted ISP. Delfino @ 804-805. Of note, the Delfino court cites to a federal decision where craigslist.com is considered an ISP because craigslist provided information on sale or rental items on its website that came from third party users – sellers/renters of the item. See, Chicago Lawyers’ Committee for Civil Rights Under the Law, Inc. v Craigslist, Inc. (2006) 461 F.Supp 2d 681. Applying Devjani’s analysis to determine an ISP, Auction is seen to be more like Craigslist. Auction provides information on trustee sales on its website that comes from a third party - trustees. The fact that Devjani appeared at a physical sale/auction based upon Auction’s notice does not make any difference when comparing such activity to seller/purchasers or lessor/lessee that list on Craigslist. Craigslist, like Auction, as argued by Devjani, does not provide for online bidding. Further, Craigslist merely provides an ability for purchasers/lessees to contact the seller/lessor. Herein, the facts show that Devjani was notified of the trustee sale’s location and went to the auction to make his bid. This is not that dissimilar to transactions on craigslist. Therefore, the Court finds that Auction is an ISP.

Despite the titles to the COAs the primary right at issue is First American Title Insurance Company’s (“First American”) representation that they had authority to foreclose and that all requirements for the trustee sale were met. (SAXC ¿18.) This allegation shows that claims treat Auction as a speaker of information. Whether Auction is considered the agent of First American or an independent actor, the factual allegation remains that the claim seeks to impose liability upon Auction as a speaker of information because the representations at issue are the same. Devjani is seeking to hold Auction liable for their own representation that First American had the authority to foreclose and/or the statutory requirements for a trustee sale were met. The second element of the immunity is met.

Lastly, Devjani argues that there is no allegation that the information posted on Auction’s website or stated at the sale was provided by First American, a third party. However, this argument is belied by the statutory scheme controlling trustee sales. Trustee sales and the procedures leading up to it are regulated by statute. It is only the trustee or its representative that can notice a default, notice the trustee sale and conduct the sale. To argue that a party that is independent of the trustee and/or not a trustee controlled or placed the information on Auction’s website is unpersuasive. The trustee holds the information that supports the trustee sale and statute requires First American to provide the information for the trustee sale. Devjani’s argument as to the third element is unpersuasive.

In that Auction’s immunity argument is merited, the remaining arguments in the demurrer need not be considered. Auction is found to be immune based upon the CDA.

Further, the motion to strike is MOOT because the demurrer disposes of all COA alleged in the SAXC.

IT IS SO ORDERED, ____________________ TO GIVE NOTICE.

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[TENTATIVE] ORDER: The Demurrer to the Second Amended Cross-Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. The Request for Judicial Notice is GRANTED. The Motion to Strike is MOOT.

1. INTRODUCTION

Cross-Defendant First American Title Insurance. (“First American”) demurs to the Second Amended Cross-Complaint (“SAXC”) filed by Cross-Complainant Triloki Devjani (“Devjani”.) The demurrer places into issue the first cause of action (“COA”) for BPC §17200 violation, the second COA for fraud – intentional misrepresentation, the third COA for fraud – negligent misrepresentation, the fourth COA for fraud – false promise, the fifth COA for fraud – concealment, the sixth COA for negligence and the seventh COA for money had and received: unjust enrichment. First American also moves to strike the claim that Devjani never received a copy of Co-Cross-Defendant Auction.com’s “Trustee Sale Auction Terms and Conditions” and the claims for exemplary and punitive damages in the SAXC.

1. PROCEDURAL ISSUES

The Court notes that the opposition brief exceeds the page limitation and also failed to include a table of contents and authorities. CRC 3.113. On this defect, the Court has discretion to treat the opposition as a late-filed paper. However, the fact that the Reply addresses the substance of the opposition, the Court exercises its discretion to consider the opposition. However, the Court admonishes Counsel for Devjani to comply with the CRC requirements in future briefs or the Court will exercise discretion to not consider future briefs that violate the CRC requirements.

1. DISCUSSION

A. CC §2924(b) Immunity:

This argument/defense was previously raised at First American’s Demurrer to the First Amended Cross-Complaint (“FAXC”) heard on November 19, 2019. The Court found the defense not to be persuasive at this pleading stage. Whether First American is immune from the claims made herein require a review of facts beyond the four corners of the SAXC or facts found in the documents attached with the request for judicial notice.

B. CC §2924(d)/CC §47 Privilege:

At First American’s Demurrer to the FAXC, the Court granted leave to amend in order for Devjani to plead specific facts to show malice, specifically facts showing that First American had knowledge of Plaintiffs Asher Enterprises, LLC and Shahpoor Ashorzadeh (collectively “Plaintiffs”) claim disputing the validity of the trustee sale. The SAXC expressly alleges that Plaintiffs personally served the complaint disputing the validity of the trustee sale upon First American on May 12, 2017. (SAXC ¿12.) However, despite Plaintiffs’ claims, First American proceeded with and conducted the trustee sale on May 18, 2017 and further executed the Trustee Deed Upon Sale on May 30, 2017. (SAXC ¿¿13 & 18.) With this fact showing a disregard for Devjani’s rights, there is sufficient showing of malice and the defense of the qualified privilege is unpersuasive at this pleading stage.

C. Facts Found in the Exhibits:

In the SAXC, Devjani’s claim that he did not receive the Trustee Sale Auction Terms and Conditions. (SAXC ¿9.) This allegation is seen to be contradicted by the exhibits attached to the SAXC, as well as First American’s Request for Judicial Notice, Exh. 8. The attached exhibits show an acknowledgment of receipt of the document. Within the two documents, Devjani acknowledged that First American did not make any representations or warranties regarding the condition of the title to the property and waived/released First American from claims arising from “errors, omissions or other conditions affecting the properties.” A plain reading of the provision provides that Devjani released negligence-based claims related to the property (i.e.: the first, third and sixth COAs for BPC §17200 violations, negligent misrepresentation and negligence.) Devjani argues that First American’s agent, Auction.com, made oral representations at the trustee sale that contradicted the “as is, where is” basis of the sale and/or confused Devjani. However, nothing alleged in the SAXC shows the specific oral representations. The Court notes that the only factual allegations regarding an affirmative representation made by First American was a conclusory claim regarding notice and advertisements promoting the trustee sale. (SAXC ¿8.) Other than these notices/advertisements, there are no specific facts showing any affirmative representation made at the trustee sale/auction. Further, without specific facts regarding the advertisements, Devjani’s claim of “representations” appears to be claim for non-disclosure, as seen in SAXC ¿¿9-10. Thus, Devjani’s argument that oral representations were made at the auction are unfounded. Nothing in the release, however, provides a defense to the other claims for misrepresentations based upon affirmative statements. This issue was not raised and/or reviewed by the Court in the prior demurrer to the FAXC. At the least, this argument provides sufficient grounds to sustain the demurrer to the first COA for BPC §17200 violation, third COA for negligent misrepresentation and sixth COA for negligence.

D. Fraud Claims:

The second COA for intentional misrepresentation and the fourth COA for false promise are based upon “notices and advertisements,” as noted above. (SAXC ¿8.) As was the issue at the prior demurrer, the SAXC is again deficient as to specific facts regarding these “notices and advertisements.” There are no specific facts regarding these “notices and advertisements” showing names of the persons who made the allegedly fraudulent “notices and advertisements”, their authority to speak, to whom they spoke, what the “notices and advertisements” said or wrote, and when the “notices and advertisements” were said or written. As noted above, the only allegation regarding any alleged fraud occurring at the auction is grounded in a claim for non-disclosure. (SAXC ¿¿9-10.)

Specifically as to the fifth COA for concealment fraud, the Court notes that Devjani was provided leave from the prior demurrer to address the argument that no duty to disclose is alleged per CCP §2924h; Lo v Jensen (2001) 88 Cal. App. 4th 1093; Ostayan v Serrano Reconveyance Co (2000) 77 Cal. App. 4^th 1311, 1419-20. Under a trustee’s duty to conduct a fair trustee sale, Devjani alleges that First American had a duty to disclose their knowledge of Plaintiffs’ action disputing the trustee sale. However, a foreclosing trustee’s general common law duty to ensure that a trustee's sale is conducted fairly, according to proper procedures, and to achieve the highest possible price runs to the beneficiary and trustor, as well as to unsuccessful bidders who are unfairly prevented from participating in the sale. Devjani is not in any of these positions. Residential Capital, LLC v. Cal-Western Reconveyance Corp. (2003) 108 Cal. App. 4^th 807, 824-825. In that Devjani has not provided persuasive argument regarding a duty to disclose, the concealment fraud claim is defectively pled.

E. Seventh COA for Money Had and Received/Unjust Enrichment:

The seventh COA for money had and received/unjust enrichment was reviewed by the Court at the prior demurrer to the FAXC. As stated previously, unjust enrichment is not a cause of action but a remedy. The demurrer to the seventh COA is persuasive.

F. Leave to Amend:

Devjani’s request for leave to amend is unpersuasive in that Devjani fails to present argument or facts to show how the above defects can be cured. It is noted that Devjani has had three opportunities to sufficiently plead his claims.

G. Motion to Strike:

With the above ruling, the concurrent motion to strike is MOOT.

IT IS SO ORDERED, ____________________ TO GIVE NOTICE.

Case Number: LC105657    Hearing Date: August 10, 2020    Dept: T

THERE ARE TWO TENTATIVE RULINGS:  DEMURRER BY FIRST AMERICAN, DEMURRER BY AUCTIONS

[TENTATIVE] ORDER: The Demurrer against the Second Amended Cross-Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. The Request for Judicial Notice is GRANTED. The Motion to Strike is MOOT.

1. Introduction

   Cross-Defendant First American Title Insurance Company (“First American”) demurs against the Second Amended Cross-Complaint (“SAXC”) filed by Cross-Complainant Triloki Devjani (“Devjani”.) The demurrer places into issue the first cause of action (“COA”) for BPC §17200 violation, the second COA for fraud – intentional misrepresentation, the third COA for fraud – negligent misrepresentation, the fourth COA for fraud – false promise, the fifth COA for fraud – concealment, the sixth COA for negligence and the seventh COA for money had and received: unjust enrichment. First American also moves to strike the claim for exemplary and punitive damages in the SAXC.

2. Discussion

As to the fraud claims based upon an affirmative representation (i.e.: second COA for intentional misrepresentation, third COA for negligent misrepresentation and fourth COA for false promise,) the Court previously sustained First American’s demurrer against these claims in the First Amended Cross-Complaint (“FAXC”) and granted leave to amend so that Devjani could plead specific and particular facts to show how, when, where, to whom, and by what means the representations were tendered. Further, Devjani was to allege specific facts as to the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. Devjani alleges that the TDUS states First American’s power to convey; statutory and contractual requirements found in the Deed of Trust (“DOT”) for the sale were met; and Devjani paid the highest bid. (SAXC ¶18.) Preliminarily, it is noted that payment of the highest bid is not a written (or an oral) representation of fact. Devjani’s allegation of his payment is merely an action. Thus, it is insufficient to be the grounds for fraud. Devjani’s allegations for fraud grounded in the TDUS’s representation regarding First American’s authority to foreclose and that all requirements for the trustee sale were met are sufficient to show the how, when, where, to whom and by what means the representations were tendered. Further, it is sufficient to provide the person that wrote the representation, their authority to write the representation, to whom they wrote it and when it was written.

However, as seen in the Trustee Certificate of Sale/Receipt, the trustee sale was conducted subject to the terms, conditions and disclaimers in the “Auction Terms and Conditions.” (RJN Exh. 8.) In that the Auction Terms and Conditions is referenced within an attached exhibit, it is proper for the Court to take judicial notice of the referenced document. When facts appear in exhibits attached to a pleading contradict the facts alleged in the body of a pleading, the facts in the exhibit take precedence. Barnett v Fireman’s Fund Ins. Co. (2001) 90 Cal App 4^th 500, 505. Contradictions in fact pleading with an exhibit are proper issues at demurrer and not reserved for later in the litigation. Devjani expressly acknowledged and agreed to First American disclaimer as to representations of any kind and expressly released any claims relating to the property. (Auction Terms and Conditions ¶5.) The exhibit contradicts Devjani’s claim of lack of knowledge of the Auction Terms and Conditions prior to the sale.

The defense of contractual disclaimer and release were not raised at the prior demurrer. Disclaimer of express and implied representations and release of all claims related to the property is found to be sufficient to show a pleading defect that is not shown to be curable.

The affirmative representations as to authority to sell and compliance with requirements are also alleged to be made orally. (SAXC ¶19.) Preliminarily, the allegations regarding an oral representation are insufficiently plead because the claim fails to allege when, where and by what means the oral representations were made. Devjani’s opposition argues that the SAXC alleges facts showing that oral representations as to authority to sell and compliance with pre-sale requirements were made prior to the sale, however, no such facts are made in the SAXC. Devjani’s argument is not supported by any facts in the SAXC. It is seen that the oral representations alleged are the same as the written representations in the TDUS. Thus, the above analysis as to disclaimer and release are applicable to the claim of oral representations.

The demurrer based upon disclaimer and release is persuasive.

The demurrer arguments as to privilege under CC §2924(b) and immunity under CC §2924(d) & §47(b) were previously considered and resolved within the demurrer against the FAXC. These two arguments are not considered herein.

Specifically as to the claims of concealment fraud, negligent misrepresentation and negligence, these claims are grounded in the allegation that First American had a duty to disclose the Trustor’s dispute against the default/trustee sale. However, First American presents argument that there is no duty owed to a potential bidder at a trustee sale to disclose defects in the title and/or that there was no warranty given as to title. CC §2924h; Lo v Jensen (2001) 88 Cal App 4^th 1093; Ostayan v Serrano Reconveyance Co (2000) 77 Cal App 4^th 1311, 1419-20. As was the case at the demurrer to the FAXC, Devjani does not address this argument/legal authority. Devjani’s citation to the general rules for negligence and duty of care is insufficient to overcome the specific legal authority cited by First American. The SAXC failure to plead facts to show a duty to disclose is again persuasive. Devjani failed to provide facts to show that this defect can be cured.

As to the seventh COA for unjust enrichment/money had and received, Devjani now argues that this COA is actually for restitution. However, claims for restitution are covered under the disclaimer and release argument analyzed above.

As to the first COA for BPC §17200, the arguments as to disclaimer and release cover this claim as well. Even if not applicable, the allegation as to fraudulent misconduct under the statute is not found to be sufficiently plead.

[TENTATIVE] ORDER: The Demurrer to the Second Amended Cross-Complaint is SUSTAINED WITHOUT LEAVE TO AMEND. The Request for Judicial Notice is GRANTED. The Motion to Strike is MOOT.

1. Introduction

Cross-Defendant Auction.com, Inc. (“Auction”) demurs to the Second Amended Cross-Complaint (“SAXC”) filed by Cross-Complainant Triloki Devjani (“Devjani”.) The demurrer places into issue the first cause of action (“COA”) for BPC §17200 violation, the second COA for fraud – intentional misrepresentation, the third COA for fraud – negligent misrepresentation, the fourth COA for fraud – false promise, the fifth COA for fraud – concealment, the sixth COA for negligence and the seventh COA for money had and received: unjust enrichment. Auction also moves to strike the claim for punitive damages in the SAXC.

1. Discussion

Communications Decency Act Immunity

Auction argues immunity based upon the federal Communications Decency Act of 1996, 47 USC §230 (“CDA”). Section 230(c) affords immunity to Interactive Computer Service (“ICS”) providers against suits that seek to hold an ICS liable for third-party content. Zeran v. America Online, Inc. (1997) 129 F.3d 327, 330. There are three elements that a defendant must establish to claim CDA immunity: (1) the defendant is a provider or user of an interactive computer service; (2) the cause of action treats the defendant as a publisher or speaker of information; and (3) the information at issue is provided by another information content provider. Delfino v. Agilent Technologies Inc. (2006) 145 Cal.App.4th 790, 804-805 (“Delfino”) [quoting Gentry v. eBay Inc. (2002)99 Cl.App.4th 816, 830.

Devjani disputes Auction’s status as an ICS because Auction is dissimilar to eBay due to Auction’s reliance upon Gentry v eBay (2002) 99 Cal. App. 4^th, 816. However, Devjani reliance on the distinguishing factors between eBay and Auction misses the point. Courts have broadly interpreted ISP. Delfino @ 804-805. Of note, the Delfino court cites to a federal decision where craigslist.com is considered an ISP because craigslist provided information on sale or rental items on its website that came from third party users – sellers/renters of the item. See Chicago Lawyers’ Committee for Civil Rights Under the Law, Inc. v Craigslist, Inc. (2006) 461 F.Supp 2d 681. Applying Devjani’s analysis to determine an ISP, Auction is seen to be more like Craigslist. Auction provides information on trustee sales on its website that comes from a third party - trustees. The fact that Devjani appeared at a physical sale/auction based upon Auction’s notice does not make any difference when comparing such activity to seller/purchasers or lessor/lessee that list on Craigslist. Craigslist, like Auction, as argued by Devjani, does not provide for online bidding. Further, Craigslist merely provides an ability for purchasers/lessees to contact the seller/lessor. Herein, the facts show that Devjani was notified of the trustee sale’s location and went to the auction to make his bid. This is not that dissimilar to transactions on craigslist. Therefore, the Court finds that Auction is an ISP.

Despite the titles to the COAs the primary right at issue is First American Title Insurance Company’s (“First American”) representation that they had authority to foreclose and that all requirements for the trustee sale were met. (SAXC ¿18.) This allegation shows that claims treat Auction as a speaker of information. Whether Auction is considered the agent of First American or an independent actor, the factual allegation remains that the claim seeks to impose liability upon Auction as a speaker of information because the representations at issue are the same. Devjani is seeking to hold Auction liable for their own representation that First American had the authority to foreclose and/or the statutory requirements for a trustee sale were met. The second element of the immunity is met.

Lastly, Devjani argues that there is no allegation that the information posted on Auction’s website or stated at the sale was provided by First American, a third party. However, this argument is belied by the statutory scheme controlling trustee sales. Trustee sales and the procedures leading up to it are regulated by statute. It is only the trustee or it’s representative that can notice a default, notice the trustee sale and conduct the sale. To argue that a party that is independent of the trustee and/or not a trustee controlled or placed the information on Auction’s website is unpersuasive. The trustee holds the information that supports the trustee sale and statute requires First American to provide the information for the trustee sale. Devjani’s argument as to the third element is unpersuasive.

In that Auction’s immunity argument is merited, the remaining arguments in the demurrer need not be considered. Auction is found to be immune based upon the CDA.

Further, the motion to strike is MOOT because the demurrer disposes of all COA alleged in the SAXC.