This case was last updated from Los Angeles County Superior Courts on 03/15/2022 at 22:14:35 (UTC).

WAYNE H. PLATT INDIVIDUALLY AND AS CO-TRUSTEES OF THE PLATT FAMILY TRUST DATED NOVEMBER 7, 2000,, ET AL. VS OAKHURST INCOME FUND I, LP, A DELAWARE LIMITED PARTNERSHIP, ET AL.

Case Summary

On 03/26/2020 WAYNE H PLATT INDIVIDUALLY AND AS CO-TRUSTEES OF THE PLATT FAMILY TRUST DATED NOVEMBER 7, 2000 filed a Property - Foreclosure lawsuit against OAKHURST INCOME FUND I, LP, A DELAWARE LIMITED PARTNERSHIP. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is RICHARD L. FRUIN. The case status is Other.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******2188

  • Filing Date:

    03/26/2020

  • Case Status:

    Other

  • Case Type:

    Property - Foreclosure

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

RICHARD L. FRUIN

 

Party Details

Plaintiffs

WAYNE H. PLATT AS CO-TRUSTEE

PLATT WAYNE H. INDIVIDUALLY

LISA F. PLATT AS CO-TRUSTEE

PLATT LISA F. INDIVIDUALLY

Defendants

PLATINUM LOAN SERVICING INC.

ALL PERSONS OF ENTITIES UNKNOWN CLAIMING

MARQUEE FUNDING GROUP INC.

LUXURY ASSET CAPITAL LLC

S.B.S. TRUST DEED NETWORK

ELDERLIFE FINANCIAL LENDING LLC

DOES 1 TO 25 INCLUSIVE

NATURAL INVESTMENTS INC. DBA STYLE CONSTRUCTION & DESIGN

OAKHURST INCOME FUND I LP FKA S & R INCOME FUND I LP A PARTNERSHIP;

OAKHURST INCOME FUND I REO LLC AKA OAKHURST IF I REO LLC A CALIFORNIA LIMITED LIABILITY COMPANY

Attorney/Law Firm Details

Plaintiff Attorneys

KRITZER DAVID M.

KRITZER DAVID MARC

Defendant Attorneys

WHITE ALAN I.

BROWER STEVEN

LANDAU LEWIS RAYMOND

WHITE ALAN I

 

Court Documents

Opposition - OPPOSITION PLAINTIFFS OPPOSITION TO MOTION TO STRIKE PORTIONS OF FIRST AMENDED COMPLAINT FILED BY DEFENDANT ELDERLIFE FINANCIAL LENDING, LLC

8/21/2020: Opposition - OPPOSITION PLAINTIFFS OPPOSITION TO MOTION TO STRIKE PORTIONS OF FIRST AMENDED COMPLAINT FILED BY DEFENDANT ELDERLIFE FINANCIAL LENDING, LLC

Request for Dismissal

7/30/2021: Request for Dismissal

Association of Attorney

4/5/2021: Association of Attorney

Notice of Related Case

11/30/2020: Notice of Related Case

Notice - NOTICE OF WITHDRAWAL OF MOTION TO RELATE AND CONSOLIDATE CASES

1/25/2021: Notice - NOTICE OF WITHDRAWAL OF MOTION TO RELATE AND CONSOLIDATE CASES

Request for Dismissal

12/31/2020: Request for Dismissal

Motion to Consolidate

12/23/2020: Motion to Consolidate

Reply - REPLY TO OPPOSITION TO NOTICE OF RELATED CASES

12/8/2020: Reply - REPLY TO OPPOSITION TO NOTICE OF RELATED CASES

Opposition - OPPOSITION TO NOTICE OF RELATED CASE

12/1/2020: Opposition - OPPOSITION TO NOTICE OF RELATED CASE

Notice of Ruling

11/19/2020: Notice of Ruling

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10); HEA...)

11/19/2020: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10); HEA...)

Notice of Ruling

11/19/2020: Notice of Ruling

Notice - NOTICE OF NON-OPPOSITION TO MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT

11/6/2020: Notice - NOTICE OF NON-OPPOSITION TO MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT

Opposition - OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

11/6/2020: Opposition - OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

Reply - REPLY IN SUPPORT OF MOTION TO COMPEL ARBITRATION AND STAY CASE

11/12/2020: Reply - REPLY IN SUPPORT OF MOTION TO COMPEL ARBITRATION AND STAY CASE

Reply - REPLY TO OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

11/12/2020: Reply - REPLY TO OPPOSITION TO DEMURRER TO SECOND AMENDED COMPLAINT

Opposition - OPPOSITION PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION TO COMPEL ARBITRATION AND STAY ACTION, DECLARATIONS OF WAYNE H. PLATT, DAVID M. KRITZER

10/20/2020: Opposition - OPPOSITION PLAINTIFFS OPPOSITION TO DEFENDANTS MOTION TO COMPEL ARBITRATION AND STAY ACTION, DECLARATIONS OF WAYNE H. PLATT, DAVID M. KRITZER

Order - ORDER ORDER GRANTING STIPULATION TO CONTINUE HEARING ON MOTION TO COMPEL ARBITRATION AND STAY CASE TO SAME 11/19/20 HEARING DATE AS ELDERLIFE DEMURRER

10/21/2020: Order - ORDER ORDER GRANTING STIPULATION TO CONTINUE HEARING ON MOTION TO COMPEL ARBITRATION AND STAY CASE TO SAME 11/19/20 HEARING DATE AS ELDERLIFE DEMURRER

55 More Documents Available

 

Docket Entries

  • 09/13/2021
  • Docketat 09:30 AM in Department 56; Jury Trial - Not Held - Advanced and Vacated

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  • 08/31/2021
  • Docketat 08:30 AM in Department 56; Final Status Conference - Not Held - Advanced and Vacated

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  • 08/19/2021
  • Docketat 08:30 AM in Department 56; Post-Arbitration Status Conference ((Report)) - Not Held - Vacated by Court

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  • 07/30/2021
  • DocketRequest for Dismissal (With prejudice, Entire Action); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff) et al.

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  • 04/05/2021
  • DocketAssociation of Attorney; Filed by Elderlife Financial Lending, LLC (Defendant)

    Read MoreRead Less
  • 02/10/2021
  • Docketat 08:30 AM in Department 56; Hearing on Motion to Consolidate - Not Held - Vacated by Court

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  • 01/25/2021
  • DocketNotice (of Withdrawal of Motion to Relate and Consolidate Cases); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 12/31/2020
  • DocketRequest for Dismissal; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

    Read MoreRead Less
  • 12/23/2020
  • DocketMotion to Consolidate; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 12/08/2020
  • DocketReply (to Opposition to Notice of Related Cases); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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63 More Docket Entries
  • 04/07/2020
  • DocketProof of Personal Service; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 04/07/2020
  • DocketProof of Service by Substituted Service; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 04/07/2020
  • DocketProof of Personal Service; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/30/2020
  • DocketChallenge To Judicial Officer - Peremptory (170.6); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/27/2020
  • DocketNotice of Lis Pendens; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/27/2020
  • DocketNotice (of Errata to Complaint); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/26/2020
  • DocketComplaint; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/26/2020
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 03/26/2020
  • DocketCivil Case Cover Sheet; Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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  • 03/26/2020
  • DocketSummons (on Complaint); Filed by Wayne H. Platt as Co-Trustee (Plaintiff); Lisa F. Platt, individually (Plaintiff); Wayne H. Platt, individually (Plaintiff) et al.

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Tentative Rulings

Case Number: *******2188    Hearing Date: September 03, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

WAYNE H. PLATT, etc., et al.,

Plaintiffs,

vs.

OAKHURST INCOME FUND I, LP, etc., et al.,

Defendants.

CASE NO.: *******2188

[TENTATIVE] ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT; MOTION TO STRIKE

Date: September 3, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant Elderlife Financial Lender, LLC (“Moving Defendant”)

RESPONDING PARTY: Plaintiffs Wayne H. Platt and Lisa F. Platt, individually and as co-trustees of the Platt Family Trust dated November 7, 2000

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

This action arises from an allegedly wrongful foreclosure sale. Plaintiffs filed the operative First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) wrongful foreclosure; (2) breach of written agreement; (3) breach of implied covenant of good faith and fair dealing; (4) intentional misrepresentation; (5) negligent misrepresentation; (6) promissory estoppel; (7) civil conspiracy; (8) quiet title; (9) judgment to cancel instruments; (10) intentional interference with contractual relations; (11) intentional interference with prospective economic relations; (12) declaratory relief; (13) preliminary and permanent injunction; and (14) unfair, unlawful fraudulent business practices.

Moving Defendant filed a demurrer to the fourth, fifth, seventh, tenth, eleventh, and fourteenth causes of action in the FAC[1]. Moving Defendant also filed a motion to strike portions of the FAC.

MEET AND CONFER

The meet and confer requirement has been met.

DEMURRER

“A demurrer tests the sufficiency of a complaint as a matter of law.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Id.) “The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.” (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer “[t]he complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.” (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) A court will sustain a demurrer without leave to amend if a plaintiff does not meet his or her burden in showing that “there is a reasonable possibility that the defect can be cured by amendment.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Issue No.1: Fourth Cause of Action

“The elements of a cause of action for intentional misrepresentation are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance, (4) actual and justifiable reliance, and (5) resulting damage.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) A cause of action for intentional misrepresentation must be pled with specificity. (Id.) Intentional misrepresentation is rooted in fraud and facts must be pled showing “how, when, where, to whom, and by what means the representations were tendered.” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

The Court finds that the fourth cause of action is not pled with the required specificity. Pursuant to the fourth cause of action, the FAC alleges various misrepresentations but does not indicate by what means such misrepresentations were made. Moreover, the FAC only pleads knowledge of falsity in a conclusory manner with respect to the fourth cause of action.

The demurrer of Moving Defendant to the fourth cause of action in the FAC is SUSTAINED with 20 days leave to amend.

Issue No.2: Fifth Cause of Action

“[N]egligent misrepresentation is a form of fraud and deceit.” (Continental Airlines, Inc. v. McDonnell Douglas Corp. (1989) 216 Cal.App.3d 388, 403.) To state a cause of action for negligent misrepresentation, a plaintiff must plead: (1) the misrepresentation of a past or existing material fact; (2) without reasonable grounds for believing it to be true; (3) with the intent to induce another’s reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance thereon by the party to whom the representation was directed; and (5) damages. (Fox v. Pollack (1986) 181 Cal.App.3d 954, 962.) “Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.)

Pursuant to the fifth cause of action in the FAC, Plaintiffs only plead the element of justifiable reliance in a conclusory manner. Moreover, the alleged misrepresentations are not pled with the required specificity pursuant to the fifth cause of action. The fifth cause of action is much too conclusory.

The demurrer of Moving Defendant to the fifth cause of action in the FAC is SUSTAINED with 20 days leave to amend.

Issue No.3: Seventh Cause of Action

“Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.)

Under Applied Equipment, civil conspiracy is not a cause of action in California. Plaintiffs’ opposition cites a federal appellate court opinion in support of their argument that the seventh cause of action is properly pled (Opposition at 8:4-13); however, such opinion is not binding on this Court. Applied Equipment is a case from the Supreme Court of California and is binding on this Court.

Therefore, the demurrer of Moving Defendant to the seventh cause of action in the FAC is SUSTAINED WITHOUT LEAVE TO AMEND.

Issue No.4: Tenth Cause of Action

To state a cause of action for intentional interference with a contract, a plaintiff must plead: (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)

The Court finds that the tenth cause of action in the FAC is insufficiently pled. In the tenth cause of action, Plaintiffs do not allege any intentional acts on behalf of Moving Defendant to induce a breach or disruption of a contractual relationship. (FAC at ¶¶ 148-154.) The FAC only alleges that Moving Defendant caused “[Style] to get uncomfortable.” (Id. at ¶ 153.)

Therefore, the Court SUSTAINS the demurrer of Moving Defendant to the tenth cause of action in the FAC with 20 days leave to amend.

Issue No.5: Eleventh Cause of Action

To state a cause of action for intentional interference with prospective contractual relations, a plaintiff must plead the following elements: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) A defendant’s intent is the only difference between a cause of action for intentional interference with prospective contractual relations and negligent interference with prospective contractual relations. (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 1006.)

The eleventh cause of action is insufficiently pled. (FAC at ¶¶ 156-163.) There are no facts pled indicating what Moving Defendant did to induce a disruption in the economic relationship.

Therefore, the Court SUSTAINS the demurrer of Moving Defendant to the eleventh cause of action in the FAC with 20 days leave to amend.

Issue No.6: Fourteenth Cause of Action

California Business and Professions Code, Section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” To have standing under Section 17200 to sue “Proposition 64 requires that a plaintiff have lost money or property to have standing to sue.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.) The economic injury must have been a result of the unfair competition. (Id.) “Section 17200 borrows violations from other laws by making them independently actionable as unfair competitive practices.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “Lost money or property—economic injury—is itself a classic form of injury in fact.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.) “A plaintiff alleging unfair business practices” is required to “state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.) “[W]here a claim of an unfair act or practice is predicated on public policy, . . . Celtech . . . requires that the public policy which is a predicate to the action must be tethered to specific constitutional, statutory, or regulatory provisions.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 848.) “The UCL’s purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) Statutory causes of action must be pled with particularity. (Hood v. Hacienda La Puente Unified School Dist. (1998) 65 Cal.App.4th 435, 439.)

The Court finds that the fourteenth cause of action in the FAC is set forth in a conclusory manner and not with the required particularity. (FAC at ¶¶ 179-196.) Statutory causes of action like the fourteenth cause of action must be pled with particularity.

The demurrer to the fourteenth cause of action in the FAC is SUSTAINED with 20 days leave to amend.

MOTION TO STRIKE

Moving Defendant filed a motion to strike portions of the FAC. Moving Defendant seeks to strike: (1) punitive damages allegations; and (2) general damages pursuant to the fourteenth cause of action.

Issue No.1: Punitive Damages

In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) California Civil Code, Section 3294 authorizes punitive damages upon a showing of malice, fraud, or oppression. Malice is defined as either “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 is conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal. App. 4th 306, 331.) Fraud under California Civil Code, Section 3294(c)(3) “means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” California Civil Code, Section 3294(2) defines oppression as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.”

Specific facts must be pled in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.) A “conclusory characterization of [a] defendant’s conduct as intentional, willful and fraudulent [is] [a] patently insufficient statement of oppression, fraud, or malice.” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 865.) Conduct that is merely negligent will not support a claim for punitive damages. (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1288.) Punitive damages “are not a favorite of the law and the granting of them should be done with the greatest of caution. They are allowed only in the clearest of cases.” (Gombos v. Ashe (1958) 158 Cal.App.2d 517, 526.)

“An employer shall not be liable for [punitive] damages . . . 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 or others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 572.) “When the defendant is a corporation, [a]n award of punitive damages against a corporation . . . must rest on the malice of the corporation’s employees.” (Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 164.) “[T]he oppression, fraud, or malice must be perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of the corporation.” (Id.) A managing agent is one who “exercise[s] substantial independent authority and judgment in their corporate decisionmaking so that their decisions ultimately determine corporate policy.” (Id.)

Here, the Court finds that the FAC does not plead specific facts that any fraud, malice, or oppression was ratified by an officer, director, or managing agent of Moving Defendant. Moving Defendant is a corporate entity and as such, malice must be based on the actions of its employees. With respect to punitive damages, the FAC also only makes conclusory allegations where entitlement to punitive damages are alleged in the FAC.

Therefore, the Court finds it appropriate to strike punitive damages allegations from the FAC.

Issue No.2: General Damages under California Business and Professions Code, Section 17200

Moving Defendant asserts that paragraph 195 in the FAC, which alleges general damages pursuant to the fourteenth cause of action, should be stricken. In their opposition to Moving Defendant’s motion to strike, Plaintiffs consent to striking such paragraph.

Thus, the Court GRANTS Moving Defendant’s motion to strike with 20 days leave to amend.

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 3rd day of September 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1]


Case Number: *******2188    Hearing Date: November 19, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

WAYNE H. PLATT, etc., et al.,

Plaintiffs,

vs.

OAKHURST INCOME FUND I, LP, etc., et al.,

Defendants.

CASE NO.: *******2188

[TENTATIVE] ORDER RE: DEMURRER TO SECOND AMENDED COMPLAINT; MOTION TO STRIKE; MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

Date: November 19, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant Elderlife Financial Lender, LLC (“Elderlife”); Defendants Marquee Funding Group, Inc. (“MFG”); Platinum Loan Servicing, Inc. (“Platinum”); Oakhurst Income Fund I, LP dba S&R Income Fund I, LP (“S&R”); and Oakhurst Income Fund I REO, aka Oakhurst IF I REO, LLC (the “Oakhurst Defendants”)

RESPONDING PARTY: Plaintiffs Wayne H. Platt and Lisa F. Platt, individually and as co-trustees of the Platt Family Trust dated November 7, 2000

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

This action arises from an alleged wrongful foreclosure sale. Plaintiffs filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) wrongful foreclosure; (2) breach of written agreement; (3) breach of implied covenant of good faith and fair dealing; (4) fraud based on misrepresentation and concealment; (5) negligent misrepresentation; (6) promissory estoppel; (7) quiet title; (8) judgment to cancel instruments; (9) intentional interference with contractual relations; (10) intentional interference with prospective economic relations; (11) declaratory relief; (12) preliminary and permanent injunction; and (13) unfair, unlawful fraudulent and deceptive business practices.

Elderlife filed a demurrer to the fourth, fifth, ninth, and tenth causes of action in the SAC. Elderlife also filed a motion to strike portions of the SAC. The Oakhurst Defendants filed a motion to compel arbitration and stay proceedings (the “Motion”). The Court will address the respective motions in this one ruling.

MEET AND CONFER

The meet and confer requirement has been met.

DEMURRER

A demurrer tests the sufficiency of a complaint as a matter of law. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts. (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) A court will sustain a demurrer without leave to amend if a plaintiff does not meet his or her burden in showing that there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Issue No.1: Fourth Cause of Action

A fraud cause of action requires a showing of the following elements: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity; (3) intent to defraud; (4) justifiable reliance; and (5) damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) To state a fraud-based cause of action, a plaintiff must plead facts which show how, when, where, to whom, and by what means the alleged fraudulent representations were tendered. (Id. at 645.) Fraud must be pled specifically, and general and conclusory allegations will not suffice in pleading a fraud cause of action (Id.) When a fraud cause of action is alleged against a corporate defendant, a plaintiff must state the authority of the person who made the misrepresentation, the name of the person who made such misrepresentation, and when such misrepresentation was made. (Archuleta v. Grand Lodge of Intern. Ass’n of Machinists and Aerospace Workers, AFL-CIO (1968) 262 Cal.App.2d 202, 208-209.)

The opposition acknowledges that the fourth cause of action is one for intentional misrepresentation. (Opposition at 3:20-21.) The Court finds that the fourth cause of action is not pled with the required specificity. Plaintiffs allege various misrepresentations but do not indicate where such misrepresentations occurred, when such misrepresentations were made, and by what means such misrepresentations were tendered.

The demurrer of Elderlife to the fourth cause of action in the SAC is SUSTAINED WITHOUT LEAVE TO AMEND under Blank, supra, 39 Cal.3d 311, 318. Plaintiffs have had multiple opportunities to state a sufficient cause of action for intentional misrepresentation; however, Plaintiffs have failed to do so even though this is the third iteration of their complaint. Plaintiffs have not met their burden in showing that there is a reasonable possibility that the fourth cause of action can be amended to state facts sufficient to constitute a cause of action.

Issue No.2: Fifth Cause of Action

To state a cause of action for negligent misrepresentation, a plaintiff must plead: (1) the misrepresentation of a past or existing material fact; (2) without reasonable grounds for believing it to be true; (3) with the intent to induce another’s reliance on the fact misrepresented; (4) ignorance of the truth and justifiable reliance thereon by the party to whom the representation was directed; and (5) damages. (Fox v. Pollack (1986) 181 Cal.App.3d 954, 962.) Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) Liability for negligent misrepresentation rests upon the existence of a legal duty, imposed by contract, statute, or otherwise, owed by a defendant to the injured person. (Eddy v. Sharp (1988) 199 Cal.App.3d 858, 864.) The determination of whether a duty exists is primarily a question of law. (Id.) Absent special circumstances, a loan transaction is at arms-length and there is no fiduciary relationship between the borrower and lender. (Oaks Management Corporation v. Superior Court (2006) 145 Cal.App.4th 453, 466.)

The same defects present in the fourth cause of action are also present in the fifth cause of action. The alleged misrepresentations are not pled with the required specificity. Also, given that the fifth cause of action is premised on actions connected to a loan transaction, Plaintiffs have not shown a duty owed by Elderlife.

The demurrer of Elderlife to the fifth cause of action in the SAC is SUSTAINED WITHOUT LEAVE TO AMEND under Blank, supra, 39 Cal.3d 311, 318.

Issue No.3: Ninth Cause of Action

To state a cause of action for intentional interference with a contract, a plaintiff must plead: (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)

The Court finds that the ninth cause of action in the SAC is sufficient as all the required elements set forth in Palram, supra, 235 Cal.App.4th 257, 289 are alleged.

Therefore, the Court OVERRULES the demurrer of Elderlife to the ninth cause of action.

Issue No.4: Tenth Cause of Action

To state a cause of action for intentional interference with prospective economic relations, a plaintiff must plead the following elements: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)

The eleventh cause of action is sufficiently pled under Korea Supply, supra, 29 Cal.4th at p.1153.

Therefore, the Court OVERRULES the demurrer of Elderlife to the tenth cause of action.

MOTION TO STRIKE

Elderlife filed a motion to strike punitive damages allegations from the SAC. Elderlife’s motion to strike is unopposed.

Thus, the Court GRANTS Elderlife’s motion to strike as it is unopposed. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

Elderlife is ordered to give notice of this ruling as to the demurrer and motion to strike.

The Court will now address the Motion filed by the Oakhurst Defendants.

MOTION TO COMPEL ARBITRATION

The Oakhurst Defendants filed the Motion on the grounds that: (1) the Agreement to Procure a Loan & Lender-Borrower Escrow Instructions (the “Loan Agreement”)[1] among the parties is a written agreement containing an agreement to arbitrate; (2) Plaintiffs filed an action within the scope of the parties’ Loan Agreement; (3) an integral basis of the complaint is the allegation that Defendants wrongfully serviced and enforced their loan to Plaintiffs by foreclosing on the property located at 205 North Tigertail Road, Los Angeles, CA 90049 (the “Property”); and (4) the gravamen of Plaintiffs’ claims are within the scope of the arbitration agreement contained in the Loan Agreement.

Plaintiffs oppose the Motion and assert that: (1) the Motion was not timely filed; (2) the subsequent Note and Deed of Trust supersede the Loan Agreement and control the parties’ rights; (3) the Oakhurst Defendants have waived the right to arbitrate by not making a prior demand for arbitration; and (4) the third-party exception set forth in California Code of Civil Procedure, Section 1281.2(c) applies because Elderlife did not sign the Loan Agreement and is not bound by it nor does Elderlife have any entitlement to enforce the Loan Agreement.

Elderlife also opposes the Motion and asserts that there is no basis to compel arbitration of the four causes of action alleged against Elderlife.

Initially, the Court finds that the Motion is timely. The Court will consider the Motion on its merits.

Judicial Notice

The Court GRANTS the Oakhurst Defendants’ request for judicial notice.

General Legal Standard

California Code of Civil Procedure, Section 1281 states that written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract. On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy unless grounds exist not to compel arbitration. (Code Civ. Proc. ; 1281.2.)

Issue No.1: Superseding Documents

A novation is the substitution of a new obligation for an existing one. (Wells Fargo Bank v. Bank of America (1995) 32 Cal.App.4th 424, 431.) The substitution is by agreement and with the intent to extinguish the prior obligation. (Id.) It must clearly appear that the parties intended to extinguish rather than merely modify the original agreement. (Id. at 432.) The burden of proof is on the party asserting that a novation has been consummated. (Howard v. County of Amador (1990) 220 Cal.App.3d 962, 977.)

The Court finds that Plaintiffs have not met their burden in establishing that the Loan Agreement was superseded by: (1) the Note; (2) the Deed of Trust; or (3) the Conditional Foreclosure Postponement Agreement[2]. The Loan Agreement, which contains the arbitration agreement, was not expressly superseded or extinguished by any subsequent document.

Therefore, the Court finds that the Loan Agreement is still a valid document and has not been superseded.

Issue No.2: Waiver

The fact that a party moving to compel arbitration has participated in litigation, short of a determination on the merits, does not by itself constitute a waiver. (Khalatian v. Prime Time Shuttle, Inc. (2015) 237 Cal.App.4th 651, 661.) The following factors are pertinent to a finding of waiver in connection with a motion to compel arbitration: (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps, such as taking advantage of judicial arbitration procedures not available in arbitration, have taken place; and (6) whether the delay affected, misled, or prejudiced the opposing party. (Id. at 661-662.)

Here, none of the Oakhurst Defendants have answered any iteration of the complaint. Besides the Motion, none of the Oakhurst Defendants have filed any dispositive motions in this action. This action is also not set for trial until September 13, 2021. The litigation machinery was not substantially invoked prior to the Motion being filed by the Oakhurst Defendants. Plaintiffs also have failed to make a showing of prejudice.

Therefore, the Court finds that the Oakhurst Defendants have not waived their right to compel arbitration.

Issue No.3: The Third-Party Exception

In their reply brief, the Oakhurst Defendants assert that the Federal Arbitration Act (“FAA”) controls and the Court is required to enforce arbitration agreements despite pending litigation with a third-party that might result in inconsistent or conflicting findings of fact or law. The Oakhurst Defendants did not raise this argument in their moving papers and the Motion is brought only under California law and not Federal law. The Motion also fails to mention the FAA at all. The Court will not consider such argument because neither Plaintiffs nor Elderlife had an opportunity to respond to such argument. (Contractors’ State License Bd. V. Superior Court (2018) 23 Cal.App.5th 125, 131, fn.3.)

If the court determines that a party to the arbitration is also a party to litigation in a pending court action with a third party, a court: (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action. (Code Civ. Proc. ; 1281.2.) A party to the arbitration agreement is also a party to a pending court action with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc. ; 1281.2(c).)

A court can rely on the allegations of a complaint to determine if there is a possibility that conflicting rulings could result were a motion to compel arbitration to be granted. (Abaya v. Spanish Ranch I, L.P. (2010) 189 Cal.App.4th 1490, 1499.) Contractual arbitration may have to yield if there is an issue of law or fact common to the arbitration and a pending action or proceeding with a third party and there is a possibility of conflicting rulings thereon. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 704-705.) Application of California Code of Civil Procedure, Section 1281.2(c) is within the trial court’s discretion. (Id.) Section 1281.2(c) addresses the peculiar situation that arises when a controversy also affects claims by or against other parties not bound by the arbitration agreement. (Id. at 704.)

Analysis

Elderlife is only named as a defendant with respect to the fourth, fifth, ninth, and tenth causes of action in the SAC. The demurrer of Elderlife to the fourth and fifth causes of action was sustained without leave to amend as stated above, and the demurrer of Elderlife to the ninth and tenth causes of action in the SAC were overruled. Elderlife was not a party to the Loan Agreement as only MFG, S&R, and Plaintiffs were parties thereto. The arbitration agreement set forth in the Loan Agreement only applies to disputes arising from or connected to: (1) the loan; (2) arrangement of the loan; or (3) the servicing of the loan. The remaining viable claims asserted against Elderlife do not arise from the Loan Agreement but instead are premised on Elderlife, S&R, MFG, and Platinum interfering with a contract for construction services on the Property.

The Court finds that there is a possibility of conflicting rulings if arbitration proceeds as to the Oakhurst Defendants while the action proceeds against Elderlife in the trial court[3]. The Court or a jury could find Elderlife liable as to the ninth and tenth causes of action; however, the arbitrator may find Elderlife not liable as to such causes of action but may expand Elderlife’s liability as to other causes of action not asserted against Elderlife. Thus, the Court finds that California Code of Civil Procedure, Section 1281.2(c) is applicable.

To avoid inconsistent rulings, the Court orders arbitration: (1) only as to the Oakhurst Defendants and Plaintiffs; and (2) as to all claims except the ninth, and tenth causes of action in the SAC since such causes of action have been asserted and remain as against Elderlife. The Court STAYS the action pending the outcome of arbitration under Abaya, supra, 189 Cal.App.4th 1490, 1499. (Code Civ. Proc. ; 1281.4.) Thus, the claims asserted against Elderlife will remain before this Court; however, such claims will be stayed and will not proceed to arbitration.

The Motion is GRANTED IN PART consistent with the conditions set forth above. The Court sets a status conference for Thursday, August 19, 2021 at 8:30 a.m. in this department. The parties are ordered to file a joint status report at least seven days prior to the status conference.

The Oakhurst Defendants are ordered to give notice of this ruling with respect to the Motion.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 19th day of November 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] The Loan Agreement is attached as Exhibit 2 to the declaration of Scot Fine in support of the Motion.

[2] These documents are attached to the declaration of Wayne H. Platt in opposition to the Motion at Exhibits 1-3, respectively.

[3] The issue to be addressed under section 1281.2(c) is not whether inconsistent rulings are inevitable but whether they are possible if arbitration is ordered. (Lindemann v. Hume (2012) 204 Cal.App.4th 556, 567.)


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