Filed 9/23/16 Arco v. OneWest Bank FSB CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.


              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE


CHRISTOPHER ARCO,

     Plaintiff and Appellant,                                          G052110

         v.                                                            (Super. Ct. No. 30-2014-00738695)

ONEWEST BANK FSB,                                                      OPINION

     Defendant and Respondent.



                   Appeal from a judgment of the Superior Court of Orange County, Andrew
P. Banks, Judge. Affirmed.
                   Law Offices of Rick L. Raynsford and Rick L. Raynsford for Plaintiff and
Appellant.
                   Allen Matkins Leck Gamble Mallory & Natsis, David R. Zaro, Joshua A.
Del Castillo, and Tim C. Hsu for Defendant and Respondent.
              Christopher Arco appeals from a judgment after the trial court sustained
OneWest Bank FSB’s (OneWest) demurrer without leave to amend Arco’s first amended
complaint. Arco argues the trial court erred by sustaining OneWest’s demurrer because
the various statutes of limitations had not run and the doctrine of judicial admission was
inapplicable. Neither of Arco’s contentions has merit, and we affirm the judgment.
                                          FACTS
              On August 7, 2014, Arco filed a complaint (Original Complaint) against
OneWest alleging the following causes of action: (1) libel; (2) intentional interference
with prospective economic relations; (3) negligent interference with prospective
economic relations; (4) intentional interference with contractual relationships; and
(5) negligent interference with contractual relationships. The facts, as alleged by Arco,
can be succinctly stated as follows: In 2010, OneWest, in retaliation for Arco’s attempt
to save his home from foreclosure, erroneously reported to credit agencies that Arco had
suffered four foreclosures, which damaged his personal and business credit, hamstrung
his business, and forced him to relinquish his majority ownership stake in his business.1
              OneWest filed a demurrer, arguing the federal Fair Credit Reporting Act
(FCRA; 15 U.S.C. § 1681 et seq.), preempted Arco’s claims and the statutes of
limitations had run. Arco filed opposition to the demurrer. OneWest filed a reply to the
opposition. The trial court sustained the demurrer with leave to amend based on
applicable statutes of limitations, declining to address the federal preemption argument
based on the uncertainty of the law.
              In December 2014, Arco filed a first amended complaint (FAC) alleging
the same five causes of action and adding a sixth—violations of Civil Code sections

1              OneWest requests we take judicial notice of documents concerning Arco’s
prior litigation (OneWest and IndyMac Federal Bank in 2009 concerning breach of
contract for advanced payments, and Quality Loan Service Corp., IndyMac Bank,
Deutsche Bank National Trust Company, and OneWest in 2011 regarding a trustee’s
sale), and his real property records. We deny that request.

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1785.25, subdivisions (a) and (g), and 1785.31. In the FAC, Arco alleged substantially
the same harm but asserted the false credit reporting occurred from 2010 to 2013. He
stated that in January 2013, OneWest falsely reported four foreclosures to three major
credit reporting agencies. He asserted that in September 2013, OneWest’s failure to
correct its false reporting of four foreclosures prevented his reinstatement at his company.
              OneWest filed a demurrer. In its demurrer, OneWest contended the statutes
of limitations had run and FCRA preempted the first five causes of action. Arco filed
opposition to the demurrer. OneWest filed a reply to the opposition. The trial court
sustained the demurrer without leave to amend based on statute of limitations and judicial
admissions grounds. The court entered judgment in OneWest’s favor.
                                       DISCUSSION
              “We perform an independent review of a ruling on a demurrer and decide
de novo whether the challenged pleading states facts sufficient to constitute a cause of
action. [Citations.] ‘In reviewing the sufficiency of a complaint against a general
demurrer, we are guided by long-settled rules. “We treat the demurrer as admitting all
material facts properly pleaded, but not contentions, deductions or conclusions of fact or
law. [Citation.] We also consider matters which may be judicially noticed.” [Citation.]
Further, we give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context. [Citation.] When a demurrer is sustained, we determine whether
the complaint states facts sufficient to constitute a cause of action. [Citation.]’
[Citations.] [¶] ‘It is not the ordinary function of a demurrer to test the truth of the
plaintiff’s allegations or the accuracy with which he [or she] describes the defendant’s
conduct. A demurrer tests only the legal sufficiency of the pleading.’ [Citation.] . . . [¶]
On appeal, we will affirm a ‘trial court’s decision to sustain the demurrer [if it] was
correct on any theory. [Citation.]’ [Citation.] Thus, ‘we do not review the validity of the
trial court’s reasoning but only the propriety of the ruling itself. [Citations.]’ [Citation.]”
(Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 50.)

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Statutes of Limitations
              “Judicial admissions may be made in a pleading, by stipulation during trial,
or by response to request for admission. [Citations.] Facts established by pleadings as
judicial admissions ‘“are conclusive concessions of the truth of those matters, are
effectively removed as issues from the litigation, and may not be contradicted, by the
party whose pleadings are used against him or her.” [Citations.] “‘[A] pleader cannot
blow hot and cold as to the facts positively stated.’” [Citation]’ [Citation.] [¶] Not
every document filed by a party constitutes a pleading from which a judicial admission
may be extracted. Code of Civil Procedure section 420 explains that pleadings serve the
function of setting forth ‘the formal allegations by the parties of their respective claims
and defenses, for the judgment of the Court.’ [Citation.] ‘The pleadings allowed in civil
actions are complaints, demurrers, answers, and cross-complaints.’ [Citation.] When
these pleadings contain allegations of fact in support of a claim or defense, the opposing
party may rely on the factual statements as judicial admissions. [Citation.]” (Myers v.
Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746.) “[T]he trial court may not
ignore a judicial admission in a pleading, but must conclusively deem it true as against
the pleader.” (Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th
1112, 1155 (Thurman).)
              Here, Arco’s Original Complaint stated the harm occurred in 2010. He
asserted OneWest erroneously reported his foreclosures to credit agencies in 2010,
lenders began cutting his personal and business credit limits in 2010, business partners
stopped doing business with him in 2010, and these circumstances led to his ouster as a
majority owner in his company in 2010. Based on the doctrine of judicial admissions, it
was established and the trial court was required to conclusively deem as true, the harm
Arco suffered occurred in 2010. Although Arco in his FAC stated the harm occurred as
late as 2013, he has not provided sufficient evidentiary evidence excusing the omissions.



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               “The California Supreme Court held that ‘“[a]s a general rule a party will
not be allowed to file an amendment contradicting an admission made in his original
pleadings. If it be proper in any case, it must be upon very satisfactory evidence that the
party has been deceived or misled, or that his pleading was put in under a clear mistake
as to the facts.”’ [Citation.]” (Thurman, supra, 203 Cal.App.4th at p. 1158.) Arco’s
assertion there were no contradictions or inconsistencies between the Original Complaint
and the FAC, and the FAC was simply an elaboration does not carry the day. Arco has
not provided any evidence the omissions were caused by deception or mistake.
Additionally, an “elaboration” that merely added new kinds of harm to the complaint
would not change the fact Arco admits he knew of harm in 2010, which was enough to
trigger the statutes of limitations.
               With respect to the statutes of limitations on Arco’s six causes of action,
they have run. The statute of limitations for libel is one year. (Code Civ. Proc., § 340,
subd. (c).) The statute of limitations for intentional and negligent interference with
prospective economic relations is two years. (Code Civ. Proc., § 339; Augusta v. United
Service Automobile Assn. (1993) 13 Cal.App.4th 4, 10.) The statute of limitations for
intentional and negligent interference with contractual relationships is two years. (Code
Civ. Proc., § 339; Trembath v. Digardi (1974) 43 Cal.App.3d 834, 836.) The statute of
limitations for a violation of Civil Code sections 1785.25, subdivisions (a) and (g), and
1785.31 is two years. (Civ. Code, § 1785.33.)
               Based on the doctrine of judicial admissions, the injuries Arco complains of
occurred in 2010. Arco filed his complaint on August 7, 2014. This was well past the
one- and two-year statutes of limitations for Arco’s six causes of action. Thus, the
limitation periods have run, and Arco’s claims are time barred. (Staniforth v. Judges’
Retirement System (2016) 245 Cal.App.4th 1442, 1449 [demurrer proper where matters
such as statute of limitations appear on face of complaint].)



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Federal Preemption
              In Sanai v. Saltz (2009) 170 Cal.App.4th 746, 773 (Sanai), the Court of
Appeal held the FCRA preempted plaintiff’s common law tort claims, which were based
on the defendants’ acts of furnishing information to consumer reporting agencies. In that
case, plaintiff’s landlord hired defendants to report to consumer credit reporting agencies
a debt plaintiff allegedly owed the landlord. Upon learning of the negative information
on his credit reports, plaintiff sued defendants, furnishers of information, alleging causes
of action for slander, libel, intentional and negligent interference with prospective
economic advantage, intentional and negligent infliction of emotional distress, violations
of the Consumer Credit Reporting Agencies Act (Civ. Code, § 1785.1 et seq.), and
violations of the FCRA. (Sanai, supra, 170 Cal.App.4th at pp. 752-753.) The court
affirmed the trial court’s order granting judgment on the pleadings as to plaintiff’s state
common law claims. The court held 15 United States Code section 1681t(b)(1)(F)
“totally preempts all state common law tort claims against furnishers of credit
information arising from conduct regulated by 15 United States Code section 1681s–2,
including [plaintiff’s] common law tort claims against [defendants].” (Sanai, supra,
170 Cal.App.4th at p. 773.)
              In Brown v. Mortensen (2011) 51 Cal.4th 1052, 1064 (Brown), the Supreme
Court adopted a narrower reading of 15 United States Code section 1681t(b)(1)(F)’s
preemption clause and concluded it preempted only “state laws relating to furnisher
accuracy or dispute resolution.” The Brown court acknowledged Sanai adopted a broad
reading of 15 United States code section 1681t(b)(1)(F)’s preemption clause but
expressed no opinion on its correctness. (Brown, supra, 51 Cal.4th at p. 1065, fn. 9.)
              Neither the Supreme Court of the United States nor the Ninth Circuit Court
of Appeals has weighed in on whether the total preemption, statutory, or temporal
approach is appropriate. However, the majority of district courts in the Ninth Circuit
favor the total preemption approach. (Buraye v. Equifax (C.D.Cal. 2008) 625 F.Supp.2d

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894, 899.) Here, based on Sanai, the FCRA preempts Arco’s first five causes of action,
claims all based in tort.
Leave to Amend
              Arco asks this court, if we affirm the trial court’s judgment, to grant him
leave to amend his FAC. Arco has not carried his burden of establishing how he can
amend his complaint to state a cause of action. (Fuller v. First Franklin Financial Corp.
(2013) 216 Cal.App.4th 955, 962 [presume complaint states allegations as favorably as
possible unless plaintiff demonstrates how complaint can be amended to cure
complaint].) Thus, the trial court properly sustained OneWest’s demurrer without leave
to amend.
                                      DISPOSITION
              The judgment is affirmed. Respondent’s request for judicial notice, filed
January 13, 2016, is denied. Respondent is awarded its costs on appeal.




                                                 O’LEARY, P. J.

WE CONCUR:



BEDSWORTH, J.



THOMPSON, J.




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