Filed 8/10/15 Rodriguez v. Bank of America CA2/3
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                DIVISION THREE


NESTOR RODRIGUEZ,                                                        B258819

         Plaintiff and Appellant,                                        (Los Angeles County
                                                                         Super. Ct. No. YC068142)
         v.

BANK OF AMERICA, N.A., et al.,

         Defendants and Respondents.




         APPEAL from a judgment of the Superior Court of Los Angeles County,
Ramona G. See, Judge. Affirmed.

         De Novo Law Firm and Benjamin Yrungaray for Plaintiff and Appellant.

         Bryan Cave, Glenn J. Plattner, Christina A. Rea, and Monica A. Kohles, for
Defendant and Respondent, Bank of America.

         No appearance for Defendant and Respondent, The Bank of New York Mellon.




                                        _________________________
       Plaintiff Nestor Rodriguez (Rodriguez) appeals a judgment of dismissal in favor of
defendants Bank of America and The Bank of New York Mellon (collectively,
defendants) following an order sustaining a demurrer to the second amended complaint
without leave to amend. We affirm.
       The second amended complaint alleges that after Rodriguez fell behind in his
mortgage payments, defendants agreed not to foreclose on his property for 120 days so
Rodriguez could attempt to arrange a short sale.1 Notwithstanding this representation,
defendants foreclosed on the property before the expiration of the 120 days. As a result,
Rodriguez lost his home and was forced to file for bankruptcy.
       The second amended complaint asserts three causes of action, for intentional
misrepresentation, negligent misrepresentation, and unfair business practices. Each
suffers from the same defect: Rodriguez fails to allege a causal relationship between the
alleged misrepresentation (defendants’ promise not to foreclose to allow Rodriguez to
attempt to sell the property) and his alleged damages (the loss of his home and resulting
bankruptcy). That is, because Rodriguez does not allege that he could have avoided
foreclosure but for his reliance on defendants’ representations, he has not pled damages
resulting from the misrepresentations. Accordingly, the second amended complaint fails
to state a claim for relief, and the demurrer was properly sustained.
                  FACTUAL AND PROCEDURAL BACKGROUND
       Because this appeal follows the sustaining of a demurrer, the following recitation
is based on those facts pleaded in the complaint and those of which we may take judicial
notice. (Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091.)
                                             I.
                                         The Loan
       On about September 6, 2006, Rodriguez borrowed approximately $633,000 from
First Bank Mortgage to purchase a residential property in Torrance, California (the

1
      In a short sale, the lienholder agrees to extinguish its lien in exchange for sale
proceeds that are less than the lien amount.

                                              2
property). The loan was secured by a deed of trust recorded on September 18, 2006.
Rodriguez alleges that defendant Bank of America was the “servicer of the note secured
by deed of trust.”
       The loan agreement provided that Rodriguez would make interest-only payments
for the first ten years of the loan, and then would pay interest and principal for the
remaining 20 years. It also provided for a prepayment penalty equal to six months’
advance interest in some circumstances. Rodriguez’s initial payments were $3,555 per
month based on an interest rate of 6.750 percent, but after five years the interest rate was
subject to readjustment every six months, up to a rate cap of 11.750 percent.
       The loan documents were printed in English. However, Rodriguez primarily
speaks Spanish and has a limited ability to read and speak English. A representative of
First Bank Mortgage explained the terms of the loan to Rodriguez in Spanish, but
Rodriguez alleges he did so inaccurately, and “[i]t wasn’t until Plaintiff faced imminent
foreclosure that he understood that the loan terms did not accurately reflect the loan
explained to him by the broker.”
                                             II.
                               The Default and Foreclosure
       In 2008, Rodriguez stopped making monthly interest payments. A Notice of
Default was recorded on January 7, 2009, and a notice of trustee’s sale was recorded on
July 11, 2011.
       Rodriguez alleges that he contacted Bank of America to attempt to avoid
foreclosure. He was directed to work with account manager Michael Wolcott,
represented to be his exclusive Bank of America contact. Rodriguez alleges that Wolcott
requested significant information and agreed to allow Rodriguez to attempt to sell the
property. On October 20, 2011, Wolcott “allowed Plaintiff to list the property as a short
sale.” Wolcott represented that a 120-day marketing period was to begin on October 3,
2011, and told Rodriguez “that no foreclosure would take place during this time.”



                                              3
However, “[o]n December 19, 2011, before the expiration of the marketing period, Bank
of America foreclosed on the property without further notice or explanation.”
                                              III.
                      The Original and First Amended Complaints
       Rodriguez filed the present action against Bank of America and The Bank of New
York Mellon2 on November 14, 2012.
       Defendants demurred. Rodriguez did not oppose the demurrer, but instead filed a
first amended complaint, which alleged causes of action for predatory lending practices,
breach of contract, promissory estoppel, intentional misrepresentation, negligent
misrepresentation, unfair business practices, and breach of the implied covenant of good
faith and fair dealing. Defendants again demurred. The court sustained the demurrer
with leave to amend as to the causes of action for intentional misrepresentation, negligent
misrepresentation, and unfair business practices, and sustained the demurrer without
leave to amend as to the remainder of the complaint. The court explained that the
misrepresentation claims “are not stated with the requisite specificity” and plaintiff “does
not allege facts demonstrating Wolcott’s authority to act on behalf of defendants.” As to
the unfair business practices claim, the court said, plaintiff “fails to allege facts
demonstrating an injury in fact and lost money or property caused by the unfair
competition. [Citation.] Plaintiff also fails to plead particularized facts supporting any
unlawful, fraudulent, or unfair business practice. [Citation.] Further, Plaintiff[] ha[s] not
alleged sufficient facts of an underlying cause of action.”




2
       Rodriguez alleges that defendant The Bank of New York Mellon (“BONY”) was
“the investor of the Property secured by a deed of trust,” but there are no allegations in
the second amended complaint directed specifically against BONY. BONY has not
appeared in this appeal.

                                               4
                                             IV.
                            The Second Amended Complaint
       Rodriguez filed the operative second amended complaint on September 19, 2013.
The pleading alleged three causes of action: (1) intentional misrepresentation;
(2) negligent misrepresentation; and (3) unfair business practices.
       Defendants demurred and filed a request for judicial notice. Rodriguez opposed
the demurrer. After hearing argument, the trial court sustained the demurrer without
leave to amend, finding as follows: “(1) The First Cause of Action for Fraud and the
Second Cause of Action for Negligent Misrepresentation fail to allege the requisite
specific facts to support these claims. Plaintiff does not allege when, where, and by what
means the alleged misrepresentations were made. [Citation.] Plaintiff does not allege
facts demonstrating justifiable reliance on Wolcott’s representations. Plaintiff fails to
allege facts to show damages proximately caused by these representations. [Citation.]
(2) The Third Cause of Action for Unfair Business Practices fails to allege sufficient facts
to support this claim including an injury in fact and lost money or property caused by the
alleged unfair competition. [Citation.] Plaintiff fails to plead particularized facts
supporting any unlawful, fraudulent, or unfair business practice. [Citation.] Further
Plaintiffs have not alleged sufficient facts of any underlying cause of action. [Citation.]
Finally, to the extent that this claim is based on activities stemming from the loan
origination process, the cause of action is barred by the four-year statute of limitations.”
       A judgment of dismissal was entered July 3, 2014, and notice of entry of judgment
was served on July 10, 2014. Rodriguez timely appealed.
                                       DISCUSSION
                                              I.
                                    Standard of Review
       “On appeal from a judgment after a demurrer is sustained without leave to amend,
we review the order de novo and exercise our independent judgment on whether the
complaint states a cause of action as a matter of law. [Citation.] We assume the truth of

                                              5
all properly pleaded material facts, as well as facts inferred from the pleadings and those
of which judicial notice may be taken. [Citation.] However, we do not assume the truth
of contentions, deductions or conclusions of fact or law [citation] and we disregard
allegations contrary to the law or to a fact of which judicial notice may be taken
[citation].” (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 605
(Graham).)
                                             II.
                              The Misrepresentation Claims
       A.     Elements of Misrepresentation Claims
       The first and second causes of action are for intentional and negligent
misrepresentation. “The essential elements of a count for intentional misrepresentation
are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance,
(4) actual and justifiable reliance, and (5) resulting damage. (Lazar v. Superior Court
(1996) 12 Cal.4th 631, 638; Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088-1089 &
fn. 2.) The essential elements of a count for negligent misrepresentation are the same
except that [negligent misrepresentation] 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. (Civ. Code, § 1710, subd. 2; Gagne v. Bertran (1954) 43
Cal.2d 481, 488; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792.)
Each element of a fraud count must be pleaded with particularity so as to apprise the
defendant of the specific grounds for the charge and enable the court to determine
whether there is any basis for the cause of action, although less specificity is required if
the defendant would likely have greater knowledge of the facts than the plaintiff.
(Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
216-217.)” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.)




                                              6
       B.     The Requirement of Pleading a Causal Relationship Between the Alleged
              Misrepresentations and Damages
       “ ‘ “A plaintiff asserting fraud by misrepresentation is obliged to . . . ‘ “establish a
complete causal relationship” between the alleged misrepresentations and the harm
claimed to have resulted therefrom.’ ” [Citation.]’ [Citation.] This requires a plaintiff to
allege specific facts not only showing he or she actually and justifiably relied on the
defendant’s misrepresentations, but also how the actions he or she took in reliance on the
defendant’s misrepresentations caused the alleged damages. [Citation.] [¶]
‘ “ ‘ “Misrepresentation, even maliciously committed, does not support a cause of action
unless the plaintiff suffered consequential damages.” ’ ” [Citation.]’ [Citation.] Indeed,
‘ “ ‘[a]ssuming . . . a claimant’s reliance on the actionable misrepresentation, no liability
attaches if the damages sustained were otherwise inevitable or due to unrelated causes.’
[Citation.]” [Citation.] If the defrauded plaintiff would have suffered the alleged damage
even in the absence of the fraudulent inducement, causation cannot be alleged and a fraud
cause of action cannot be sustained.’ [Citation.]” (Rossberg v. Bank of America, N.A.
(2013) 219 Cal.App.4th 1481, 1499 (Rossberg).)
       The court applied these principles to hold that a plaintiff had not adequately pled a
misrepresentation claim in Graham, supra, 226 Cal.App.4th 594. There, the plaintiff
borrowed money to purchase a home. Several years later, he defaulted on the loan and
received a notice of sale. He sued to halt foreclosure proceedings, alleging among other
things that defendant’s lending personnel had made fraudulent misrepresentations to him
by stating that the home’s fair market value was increasing and the loan “was ‘good for
[him],’ while allegedly knowing the appraisal was ‘outrageously speculative.’ ” (Id. at
p. 599.) The trial court sustained defendant’s demurrer, and plaintiff appealed.
       The Court of Appeal affirmed, concluding that plaintiff did not adequately allege a
nexus between the alleged misrepresentations and his alleged economic harm. (Graham,
supra, 226 Cal.App.4th at p. 608.) It explained: “[Plaintiff] does not allege he could
have or would have obtained a better loan from a different lender absent the alleged

                                               7
representations regarding the appraisal. Nor does he allege he would not have entered the
market absent the alleged representations or omissions. . . . The risk of property loss
from foreclosure is the result of [plaintiff’s] default on the loan, not the alleged conduct
by defendants. Therefore, [plaintiff] has not sufficiently pleaded a causal connection
between any damages and any actionable conduct by defendants in entering into the loan
agreement.” (Id. at p. 609.)
       The court similarly concluded in Rossberg, supra, 219 Cal.App.4th at p. 1499.
There, plaintiffs received a home loan from defendant, but several years later fell behind
on their mortgage payments. They began discussions with defendant about modifying
their loans, and on several occasions they were told they had been granted a loan
modification. (Id. at p. 1487.) Ultimately, however, defendant recorded a notice of
default and initiated a foreclosure sale. Plaintiffs filed suit against the lender. (Id. at
pp. 1488-1489.)
       The trial court sustained defendant’s demurrer to plaintiffs’ complaint, and
plaintiffs appealed. The Court of Appeal affirmed. It noted that although plaintiffs had
alleged specific fraudulent promises by defendant’s employees, they did not allege that
their reliance on the promised loan modifications caused them to default on their loans or
prevented them from curing their existing defaults. Plaintiffs also did not allege that, but
for the fraudulent promises, they would have sold their home and avoided foreclosure.
(Rossberg, supra, 219 Cal.App.4th at pp. 1499-1500.) Accordingly, plaintiffs failed to
state a fraud claim because they “fail[ed] to specifically allege how [their] reliance on the
promised loan modifications caused them harm.” (Id. at p. 1499.)
       C.     The Demurrer Was Properly Sustained Because Rodriguez Failed to Allege
              that He Would Not Have Lost His Home and Would Have Filed for
              Bankruptcy but for the Alleged Misrepresentations
       In the present case, Rodriguez alleges that as a result of defendants’ intentional
and negligent misrepresentations, he “lost ownership of the property and his credit has
been irreparably damaged.” As we have said, this allegation is sufficient to state a

                                               8
misrepresentation claim only if plaintiff pleads the necessary causal link between the
alleged misrepresentations and the loss of the property—i.e., if he alleges “specific facts
not only showing he . . . actually and justifiably relied on the defendant’s
misrepresentations, but also how the actions he . . . took in reliance on the defendant’s
misrepresentations caused the alleged damages.” (Rossberg, supra, 219 Cal.App.4th at
p. 1499, italics added.)
       The second amended complaint alleges that in reliance on defendants’ alleged
misrepresentations, Rodriguez agreed to a short sale, marketed the property according to
defendants’ requirements, and allowed defendants to perform an inspection of the
property. Rodriguez does not allege that any of these actions caused his home to be
foreclosed upon or caused him any other harm, however. Accordingly, these alleged
actions do not create the necessary causal link between defendants’ alleged
misrepresentations and Rodriguez’s damages.
       The second amended complaint also alleges that in reliance on defendants’
misrepresentations, Rodriguez “was prevented from seeking alternative avenues to cure
the default on the property including a Chapter 13 bankruptcy, which Plaintiff tried to file
after learning that the sale was not cancelled.” Rodriguez does not allege how the
defendants’ alleged misrepresentations “prevented” him from seeking alternative avenues
to cure the default, nor does he allege that any such alternative avenues would have
allowed him to avoid foreclosure.3 For example, Rodriguez does not allege that but for
the alleged misrepresentations, he would have remained current on his loan—to the
contrary, he alleges that he was unable to make his loan payments “as a result of the high
costs of the home and the poor economy.” Similarly, he does not allege that but for the
alleged misrepresentations, he would have sought and obtained a loan from another

3
        Indeed, the documents in Bank of America’s request for judicial notice, filed in
support of the demurrer, reflect that Rodriguez did file a Chapter 13 bankruptcy
approximately two months before the alleged short sale marketing period allegedly began
and four months before the foreclosure sale. The bankruptcy action was dismissed “for
failure to file information.”

                                              9
lender that would have allowed him to avoid default and retain ownership of the
property—again, his allegations are to the contrary, asserting that the terms of
defendants’ loan “ma[de] it impossible for Plaintiff to get out of the loan.”
       For these reasons, therefore, Rodriguez has not sufficiently pled a causal
connection between defendants’ alleged misrepresentations and his damages. The trial
court did not err in sustaining the demurrer to the first and second causes of action.
                                            III.
                          The Unfair Business Practices Claim
       The third cause of action alleges unfair business practices under Business and
Professions Code sections 17200 and 17500.4 Section 17200 “prohibits, and provides
civil remedies for, unfair competition, which it defines as ‘any unlawful, unfair or
fraudulent business act or practice.’ [Citation.] Its purpose ‘is to protect both consumers
and competitors by promoting fair competition in commercial markets for goods and
services.’ [Citations.]” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320
(Kwikset).) Section 17500 makes it unlawful for a person, firm, corporation, association,
or any employee thereof “with intent directly or indirectly to dispose of real or personal
property or to perform services, professional or otherwise, or anything of any nature
whatsoever or to induce the public to enter into any obligation relating thereto” by means
of advertising that “is known, or which by the exercise of reasonable care should be
known, to be untrue or misleading. . . .”
       Like a cause of action for intentional or negligent misrepresentation, a cause of
action for unfair business practices must allege damages caused by the alleged wrongful
conduct. Section 17200 et seq. “requires that a plaintiff’s economic injury come ‘as a
result of’ the unfair competition or a violation of the false advertising law. (§§ 17204,
17535.) ‘The phrase “as a result of” in its plain and ordinary sense means “caused by”
and requires a showing of a causal connection or reliance on the alleged


4
       All subsequent statutory references are to the Business and Professions Code.

                                             10
misrepresentation.’ ” (Kwikset, supra, 51 Cal.4th at p. 326.) Section 17500 also requires
an individual suing under the statute “to have ‘ “suffered injury in fact” ’ and to have
‘ “lost money or property as a result of such unfair competition.” ’ [Citations.]” (Bower
v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1555.)
       The factual predicate of Rodriguez’s unfair business practices claim is identical to
the factual predicate of his intentional and negligent misrepresentation claims: Rodriguez
alleges that although “[d]efendants’ short sale agreement provided that foreclosure
activity would cease during the loan modification,” defendants “did not stop foreclosure
activity and foreclosed on the property on December 19, 2011.”5 As a result, “Plaintiff
has been damaged by losing his home and having his credit negatively impacted.”
       As we have already explained, Rodriguez has failed to plead the necessary causal
link between the alleged misrepresentations and the loss of his property. (See section
II(C), ante.) His failure to plead causation is fatal to his unfair business practices claims.
                                             IV.
                                      Leave to Amend
       “ ‘If it is reasonably possible the pleading can be cured by amendment, the trial
court abuses its discretion by not granting leave to amend. [Citation.] The plaintiff has
the burden of proving the possibility of cure by amendment.’ ” (Nolte, supra,
236 Cal.App.4th at p. 1406.)
       Rodriguez does not explain on appeal how he could amend his complaint to
withstand demurrer. Further, he did not propose any amendments in opposition to the
demurrer. As it is his burden to show how he could save his complaint by amendment,



5
       The third cause of action also alleges that defendants committed unfair business
practices by “marketing loans to Spanish-speaking borrowers and materially misleading
them about the terms and conditions of their written loan terms.” Rodriguez does not
contend on appeal that this allegation states a cause of action under sections 17200 or
17500, and thus we deem it forfeited. (See Nolte v. Cedars-Sinai Medical Center (2015)
236 Cal.App.4th 1401, 1409-1410 (Nolte).)

                                              11
the trial court did not abuse its discretion in sustaining the demurrer without leave to
amend. (See Nolte, supra, 236 Cal.App.4th at p. 1410.)
                                      DISPOSITION
       The judgment of dismissal is affirmed. Respondent Bank of America shall
recover its appellate costs.
       NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS




                                                  EDMON, P. J.

We concur:




                      KITCHING, J.




                      JONES, J.*




*
        Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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