Smith v. Bank of America CA5

Filed 2/11/14 Smith v. Bank of America CA5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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

FIFTH APPELLATE DISTRICT

CHARLES SMITH, et al.
F066194 & F066470
Plaintiffs and Appellants,
(Super. Ct. No. 10CECG04464)
v.

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

Defendants and Respondents.

OPINION
CHARLES SMITH, et al.

Plaintiffs and Appellants,

v.

DVP, LP,

Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Fresno County. Jeffrey Y.
Hamilton, Judge.
Charles Smith and Deborah M. Smith, in pro. per., for Plaintiffs and Appellants.
McCarthy & Holthus, Melissa Robbins Coutts and Matthew B. Learned for
Defendants and Respondents Bank of America, N.A., and Quality Loan Service
Corporation.
Williams, Jordan, Brodersen & Pritchett and Steven R. Williams for Defendant
and Respondent DVP, LP.
-ooOoo-
 Plaintiffs Charles Smith and Deborah M. Smith (the Smiths) obtained a home loan
from defendant Bank of America, N.A. (B of A) in the amount of $348,000. The loan
was secured by a deed of trust in favor of B of A against the Smiths’ real property on
Megan Avenue in Clovis, California (the property). When the Smiths defaulted on their
loan obligations, defendant Quality Loan Service Corporation (Quality), as agent for the
beneficiary of the deed of trust, initiated nonjudicial foreclosure proceedings. The Smiths
then filed the present lawsuit against B of A and Quality (together defendants), asserting
damage claims against defendants under several theories and also seeking to prevent the
foreclosure. The trustee’s sale went forward and the property was sold to a third party
(DVP, LP (DVP)), thereby foreclosing the Smiths’ ownership interest.1 As to the
proceedings in the trial court concerning the Smiths’ lawsuit, the trial court granted
defendants’ motion to have their default set aside under Code of Civil Procedure2
section 473 and also sustained defendants’ demurrers to the Smiths’ original complaint,
first amended complaint and second amended complaint. After the demurrer was
sustained to the second amended complaint, further leave to amend was denied. The
Smiths appealed (in case No. F066194), contending that the trial court erred in setting
aside defendants’ defaults and in sustaining the demurrers to the Smiths’ causes of action
without leave to amend. We disagree and affirm the orders and judgment of the trial
court.
Additionally, the Smiths separately appealed (in case No. F066470) from the trial
court’s postjudgment order granting DVP’s motion to expunge the lis pendens.3 Since

1 DVP intervened in this action to file a motion to expunge the lis pendens recorded
against the property by the Smiths.
2 Unless otherwise indicated, all further statutory references are to the Code of Civil
Procedure.
3 For purposes of this opinion, we ordered case Nos. F066194 and F066470
consolidated under case No. F066194 on December 2, 2013.

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the Smiths failed to state a viable real property claim, we affirm the trial court’s order
expunging the lis pendens.
FACTS AND PROCEDURAL HISTORY
Events Leading to Foreclosure
On February 8, 2008, as part of a loan refinance transaction, Charles Smith
executed a promissory note in the amount of $348,000, promising to repay that sum plus
interest to B of A in regular monthly installments. The promissory note was secured by a
deed of trust against the property. The deed of trust named B of A as the beneficiary, was
signed by the Smiths (as the borrowers/property owners), and was recorded by the Fresno
County Recorder as document No. 2008-0028738. Said deed of trust was in the first
position; that is, it was the senior deed of trust or mortgage on the property. Unless
otherwise indicated, when we refer herein to the deed of trust, we mean the above
described first deed of trust which secured the loan to the Smiths of $348,000.
On the same date, Charles Smith also executed a second promissory note,
promising to repay another loan obtained from B of A in the amount of $43,500, which
obligation was secured by a second deed of trust executed by the Smiths.
On February 17, 2010, after the Smiths were substantially in arrears on their loan
obligations, Quality recorded a notice of default and election to sell under deed of trust
(notice of default).4 The notice of default stated that, in regard to the deed of trust
recorded as document No. 2008-0028738, which secured the loan of $348,000 from
B of A, the Smiths were in default in the amount of “$17,013.50 as of 2/17/2010.” The
notice of default also gave the appropriate warnings of the consequences in the event the
Smiths failed to take action.

4 The notice of default reflects that Quality took this action as agent for the
beneficiary under the deed of trust.

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 On May 4, 2010, B of A substituted Quality as trustee in place of the former
trustee under the deed of trust. Since the Smiths had failed to take any steps to cure the
default, Quality recorded a notice of trustee’s sale on May 19, 2010. On June 9, 2011,
the property was sold to a third party, DVP, at a public foreclosure auction commonly
referred to as a trustee’s sale. A trustee’s deed upon sale was subsequently recorded on
June 21, 2011.
The Original Complaint
On December 27, 2010, the Smiths filed their original complaint in the trial court.
The complaint purported to state the following causes of action: (1) fraud, (2) rescission
and damages pursuant to section 1635 of title 15 of the United States Code, (3) damages
pursuant to section 2605 of title 12 of the United States Code, (4) damages pursuant to
section 1692 of title 15 of the United States Code, (5) infliction of emotional distress,
(6) damages pursuant to section 241 of title 18 of the United States Code, (7) unfair
business practices, (8) quiet title, (9) temporary restraining order and preliminary
injunction, and (10) damages for violation of section 2071 of title 18 of the United States
Code. As this enumeration makes clear, most of the causes of action were premised upon
alleged violations of federal law.
Removal to Federal Court and the Smiths’ Dismissal of Federal Claims
In January 2011, B of A removed the case to the United States District Court for
the Eastern District of California. In April 2011, the Smiths voluntarily dismissed all of
their federal claims (the 2d, 3d, 4th, 6th and 10th causes of action), whereupon the federal
district court remanded the case back to Fresno Superior Court to resolve the state law
claims.
Remand to the Superior Court and Section 473 Motion
Once the case returned to Fresno Superior Court, defendants filed a demurrer to
the Smiths’ complaint on May 20, 2011. However, the trial court granted a motion to
strike the demurrer due to the fact that defendants’ default had been entered the day

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before, on May 19, 2011. On June 14, 2011, defendants filed a motion to set aside
default on the ground that their default was a result of attorney neglect due to an internal
clerical error. On July 12, 2011, the trial court found defendants’ showing was sufficient
to warrant relief and it set aside defendants’ default under section 473.
Demurrer to Complaint
With their default set aside, defendants proceeded to re-file their demurrer to the
Smiths’ complaint. The Smiths filed opposition to the demurrer. The matter was heard
on October 27, 2011. The trial court struck the second, third, fourth, sixth and tenth
causes of action, since the Smiths previously dismissed those claims in the federal district
court. As to the remaining causes of action, the trial court sustained defendants’
demurrer as to all causes of action except the eighth and ninth, and it granted the Smiths
30 days’ leave to amend.
Demurrer to First Amended Complaint
A first amended complaint was filed by the Smiths on November 28, 2011. In it,
the Smiths attempted to state the following causes of action: (1) fraud, (2) infliction of
emotional distress, (3) unfair business practices, (4) quiet title, and (5) temporary
restraining order and injunctive relief. The first amended complaint alleged, among other
things, that the Smiths were damaged due to loan origination errors, nondisclosures and
failures to respond to the Smiths’ inquiries. The prayer for relief requested (in addition to
damages) that the deed of trust and all proceedings taken pursuant thereto be voided by
the trial court and that title to the property be quieted in favor of the Smiths.
On December 27, 2011, defendants filed their demurrer to the first amended
complaint. The grounds raised by defendants included that the Smiths’ pleading
(1) failed to state a cause of action to quiet title because they had not tendered or offered
to tender the balance due on the loan and (2) failed to state a cause of action for a
temporary restraining order or other injunctive relief because they no longer owned the
property and, thus, the prevention of foreclosure was moot. The Smiths filed opposition

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to the demurrer. At the hearing on April 12, 2012, the trial court agreed with defendants’
arguments that the first amended complaint failed to state any cause of action against
defendants. The trial court sustained the demurrer to the quiet title and injunctive relief
causes of action without leave to amend, and it sustained the demurrer to the remaining
causes of action with 20 days’ leave to amend.
Demurrer to Second Amended Complaint
On May 2, 2012, the Smiths filed their second amended complaint alleging that
defendants were liable for (1) fraud, (2) infliction of emotional distress, and (3) unfair
business practices. One remarkable new theory alleged in the second amended complaint
was that the Smiths were never loaned any money by B of A, but rather B of A issued the
loans to certain artificial, fictitious entities whose trade names were spelled in all capital
letters (i.e., CHARLES SMITH and DEBORAH M. SMITH), as opposed to the real,
living, breathing human beings whose names had to include both upper case and lower
case lettering (i.e., Charles Smith and Deborah M. Smith). Defendants demurred to the
second amended complaint, asserting that the Smiths still failed to state any cause of
action and that many of the claims asserted by the Smiths had already been rejected by
the trial court. The Smiths filed opposition to the demurrer.
On October 1, 2012, following oral argument, the trial court sustained defendants’
demurrer to the second amended complaint. Additionally, the trial court concluded that
further amendment could not cure the fatal defects in the pleading and, therefore, leave to
amend was denied. The Smiths timely filed their notice of appeal in case No. F066194
on October 16, 2012, checking the box on the notice of appeal form to indicate that the
appeal was taken from the “[j]udgment of dismissal after an order sustaining a
demurrer.”5 In their appeal therefrom, the Smiths contend the trial court erred in setting

5 Although the trial court neglected to enter a formal judgment of dismissal after it
sustained defendants’ demurrer to the second amended complaint without leave to
amend, it is clear the trial court intended to do so. Not only was leave to amend denied,

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aside defendants’ default and in sustaining the demurrers to the Smiths’ causes of action
without leave to amend.
Order Expunging Lis Pendens
Nearly two months after the trial court sustained the demurrer to the second
amended complaint without leave to amend, the trial court heard DVP’s motion to
expunge the notice of pendency of action (lis pendens) recorded on the property by the
Smiths. The trial court granted the motion, noting that the demurrer ruling established
the Smiths could not plead any cause of action, much less a real property claim. The trial
court also ordered the Smiths to pay the attorney fees incurred by DVP in seeking to
remove the lis pendens, in the sum of $1,625. In case No. F066470, the Smiths
separately appealed from the order granting the motion to expunge the lis pendens. As
noted above, we have ordered both appeals (case Nos. F066194 and F066470)
consolidated for purposes of this opinion.
DISCUSSION
I. The Trial Court Properly Set Aside Default
The Smiths argue the trial court abused its discretion in setting aside defendants’
default. We disagree.
A. Section 473 and Standard of Review
A motion for relief from a judgment, order or other proceeding may be made on
the ground that it was taken against the moving party as a result of mistake, inadvertence,
surprise or excusable neglect. (§ 473, subd. (b).) Whether to grant such relief under

but the trial court directed defendants to submit an ex parte request for dismissal within
seven days. Further, the register of action reflects that the court subsequently dismissed
defendants. Under the circumstances, we exercise our discretion to deem that the order
sustaining the demurrer without leave to amend is modified to include a formal judgment
of dismissal. (Estate of Dito (2011) 198 Cal.App.4th 791, 799-800.) We treat the appeal
as from the judgment. Therefore, we reject defendants’ argument that the appeal is from
nonappealable orders.

7.
section 473 lies within the sound discretion of the trial court, and the trial court’s decision
will not be overturned absent an abuse of discretion. (Elston v. City of Turlock (1985) 38
Cal.3d 227, 233 (Elston).) Section 473 is applied liberally where the party moves
promptly to seek relief and no prejudice will be suffered by the party opposing the
motion if relief is granted. In such instances, only very slight evidence is needed to
justify relief. (Elston, supra, at p. 233; Rogalski v. Nabers Cadillac (1992) 11
Cal.App.4th 816, 819-820.) Additionally, because the law favors trial on the merits,
doubts are to be resolved in favor of the party seeking relief. As a result, a trial court
order denying relief is more closely scrutinized on appeal than an order permitting trial
on the merits. (Elston, supra, at p. 233.)
In addition to the discretionary relief noted above, section 473, subdivision (b),
provides for mandatory relief based on an attorney affidavit of fault. The mandatory
relief provision of section 473, subdivision (b), provides that the court “shall, whenever
an application for relief is made no more than six months after entry of judgment, is in
proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her
mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the
clerk against his or her client, and which will result in entry of a default judgment, or
(2) resulting default judgment or dismissal entered against his or her client, unless the
court finds that the default or dismissal was not in fact caused by the attorney’s mistake,
inadvertence, surprise, or neglect.” (Italics added.) “Relief [under the attorney fault
provision of section 473] is mandatory when a complying affidavit is filed, even if the
attorney’s neglect was inexcusable.” (Rodrigues v. Superior Court (2005) 127
Cal.App.4th 1027, 1033.) Where the applicability of the mandatory relief provision does
not turn on disputed facts and presents a pure question of law, our review is de novo.
(SJP Limited Partnership v. City of Los Angeles (2006) 136 Cal.App.4th 511, 516.)

8.
 B. Application
In support of defendants’ application to set aside default, the declaration of
defendants’ attorney, Rachel Opatik, stated that she completed the drafting of the
demurrer to the complaint on May 9, 2011, sufficient for timely filing, and instructed her
legal assistant to obtain a hearing date and have the demurrer filed in the trial court by
May 10, 2011. Ms. Opatik stated that she “mistakenly believed the legal assistant had
filed” the matter and “removed the Demurrer from my personal task list.” Ms. Opatik
admitted this was an error of oversight on her part, explaining that she “should have kept
the Demurrer on my task list and followed up with the legal assistant [on] May 10, 2011,
to ensure … the task was completed.” When the mistake was discovered on May 19,
2011, Ms. Opatik took immediate action to have the demurrer filed, and it was filed the
next day. As the trial court correctly observed in its order granting the motion to set aside
default, “[t]he assistant’s failure to serve, file and obtain a date for the demurrer are
attributable to the attorney, because the attorney is the professional responsible for
supervising the work of his or her legal assistants.” Further, the trial court found that the
only prejudice to the Smiths was that they would “be litigating the case on the merits,
which is to say, no prejudice at all.”
The trial court properly granted the motion. Defendants’ attorney was responsible
to oversee the work of her assistant in regard to the timely filing of the demurrer and,
thus, her declaration of attorney fault was sufficient to require mandatory relief. (See Hu
v. Fang (2002) 104 Cal.App.4th 61, 64 [attorney responsible for supervising paralegal’s
work product, including his mistake in calendaring the order to show cause hearing;
therefore, mandatory relief was required based on attorney affidavit admitting to the
attorney’s failure of oversight]; cf. Zamora v. Clayborn Contracting Group, Inc. (2002)
28 Cal.4th 249, 259 [assuming error of legal assistant attributable to counsel].)
Additionally, even if the matter were deemed to fall under the discretionary provision of
section 473, no abuse of discretion has been shown. Where relief is promptly sought and

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no prejudice would result, as was the case here, only “‘very slight’” evidence is needed to
permit relief, which is to be liberally granted. (Elston, supra, 38 Cal.3d at p. 233.)
Defendants’ motion clearly met that threshold. For these reasons, no error or abuse of
discretion has been shown, and the Smiths’ challenge to the order setting aside default
fails.
II. The Trial Court Properly Sustained the Demurrers
The trial court sustained, without leave to amend, defendants’ demurrer to the
quiet title and injunctive relief causes of action set forth in the first amended complaint.
Thereafter, the trial court sustained, without leave to amend, defendants’ demurrer to the
remaining causes of action for fraud, infliction of emotional distress, and unfair business
practices set forth in the second amended complaint. In the present appeal, the Smiths
challenge the trial court’s ruling as to each of these causes of action. As will be seen, the
trial court got it right because the Smiths failed to state a cause of action or present any
basis for leave to amend.
A. Standard of Review
On review of an order sustaining a demurrer without leave to amend, our standard
of review is de novo; that is, we exercise our independent judgment about whether the
complaint states a cause of action as a matter of law. (Holcomb v. Wells Fargo Bank,
N.A. (2007) 155 Cal.App.4th 490, 495.) “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.] And when it is sustained without leave to amend, we decide whether there is a
reasonable possibility that the defect can be cured by amendment: if it can be, the trial

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court has abused its discretion and we reverse; if not, there has been no abuse of
discretion and we affirm. [Citations.] The burden of proving such reasonable possibility
is squarely on the plaintiff. [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
B. First Amended Complaint
We now consider whether the trial court properly eliminated the quiet title and
injunctive relief claims from the first amended complaint by sustaining demurrer to those
causes of action without leave to amend.
1) Quiet Title
In their quiet title cause of action, the Smiths sought to have their alleged right,
title and ownership in the property found superior to that of defendants and to have the
deed of trust released, reconveyed and/or voided. At the time these allegations were
made, the property had already been sold pursuant to the trustee’s sale, and thus the relief
sought by the Smiths’ allegations (if construed generously) was to have the foreclosure
set aside and the Smiths declared the rightful owners. As the trial court observed in its
order sustaining the demurrer: “[T]his is now purely a case to recover sold, formerly
mortgaged property. Tender must be pled. [Citation.] It has not and the demurrer to this
cause of action is sustained without leave to amend, as it appears that [the Smiths] cannot
truthfully allege that they tendered the full amount of the indebtedness.” (Italics added.)
The trial court was correct in holding that, under the circumstances, tender of the
remaining debt was a necessary element of the quiet title claim. “It is settled in
California that a mortgagor cannot quiet his title against the mortgagee without paying
the debt secured.” (Shimpones v. Stickney (1934) 219 Cal. 637, 649; see also Mix v. Sodd
(1981) 126 Cal.App.3d 386, 390 [in action to quiet title, court of equity will not aid a
person in avoiding payment of his or her debts]; Aguilar v. Bocci (1974) 39 Cal.App.3d
475, 477 [mortgagor cannot “quiet title without discharging his debt”].) Similarly, where
a borrower seeks to set aside a trustee’s sale based on alleged irregularities, a tender of
the indebtedness must be pled: “Because the action is in equity, a defaulted borrower

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who seeks to set aside a trustee’s sale is required to do equity before the court will
exercise its equitable powers. [Citation.] Consequently, as a condition precedent to an
action by the borrower to set aside the trustee’s sale on the ground that the sale is
voidable because of irregularities in the sale notice or procedure, the borrower must offer
to pay the full amount of the debt for which the property was security. [Citations.] ‘The
rationale behind the rule is that if [the borrower] could not have redeemed the property
had the sale procedures been proper, any irregularities in the sale did not result in
damages to the [borrower].’ [Citation.]” (Lona v. Citibank, N.A. (2011) 202 Cal.App.4th
89, 112.) Other cases are to the same effect. (See, e.g., Shuster v. BAC Home Loans
Servicing, LP (2012) 211 Cal.App.4th 505, 512; Abdallah v. United Savings Bank (1996)
43 Cal.App.4th 1101, 1109; Arnolds Management Corp. v. Eischen (1984) 158
Cal.App.3d 575, 578-579; Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d
112, 117.)6
Moreover, the Smiths had to allege a “full tender” of the indebtedness, not merely
vague “offers to tender” same. (Stebley v. Litton Loan Servicing, LLP (2011) 202
Cal.App.4th 522, 526.) With respect to tender, “‘it is a debtor’s responsibility to make an
unambiguous tender of the entire amount due .…’” (Nguyen v. Calhoun (2003) 105
Cal.App.4th 428, 439 [strict compliance required]; see also Karlsen v. American Sav. &
Loan Assn., supra, 15 Cal.App.3d at p. 118 [an offer of performance is of no effect if the
person making it is not able to perform].) In the first amended complaint, the Smiths
merely alleged that they were “prepared to discuss” the matter of a tender of the

6 Courts recognize certain rare exceptions to the rule requiring tender, such as when
the borrower demonstrates the deed of trust is void on its face (not merely voidable) or
that the underlying debt is invalid. (See Lona v. Citibank, N.A., supra, 202 Cal.App.4th
at p. 112; Shuster v. BAC Home Loans Servicing, LP, supra, 211 Cal.App.4th at pp. 512-
513; see also Chavez v. Indymac Mortgage Services (2013) 219 Cal.App.4th 1052, 1062
[listing exceptions].) The Smiths have not alleged or argued any cognizable legal basis
for such an exception here.

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obligation. Not only was that allegation completely insufficient, but it was made after the
necessity to allege tender had been earlier raised in the prior demurrer concerning the
original complaint. Moreover, the Smiths failed to offer any basis for further
amendment. The trial court did not abuse its discretion in concluding that the Smiths not
only failed to allege tender of the debt, but could not truthfully make such allegation. We
conclude that the general demurrer to the quiet title cause of action was properly
sustained without leave to amend.
2) Injunctive Relief
The Smiths’ injunctive relief cause of action sought to prevent the trustee’s sale
from going forward based on the Smiths’ assertion that title should be quieted in their
name and that the deed of trust should not be enforced. In sustaining the general
demurrer to this cause of action, the trial court noted the subject property had already
been foreclosed upon and, therefore, the requested injunctive relief was now moot.
In order to establish a basis for injunctive relief, a plaintiff must allege (1) the
elements of a cause of action involving a wrongful act sought to be enjoined and (2) the
grounds for equitable relief. (San Diego Unified Port Dist. v. Gallagher (1998) 62
Cal.App.4th 501, 503.) “Injunctive relief is a remedy and not, in itself, a cause of action,
and a cause of action must exist before injunctive relief may be granted.” (Shell Oil Co.
v. Richter (1942) 52 Cal.App.2d 164, 168.) Here, the Smiths sought the injunctive relief
on the same legal grounds as they sought to quiet title. Since the underlying cause of
action fails, so does the requested injunctive relief. Additionally, the trial court was
correct that the trustee’s sale, once permitted to go forward and completed, mooted the
Smiths’ effort to prevent foreclosure. At that point, the requested injunctive relief was
rendered unnecessary and improper. (MaJor v. Miraverde Homeowners Assn. (1992) 7
Cal.App.4th 618, 623; see also Giles v. Horn (2002) 100 Cal.App.4th 206, 227.) For
these reasons, we hold the trial court properly sustained the demurrer to the injunctive
relief cause of action without leave to amend.

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 B. Second Amended Complaint
We now turn to the remainder of the causes of action asserted by the Smiths,
which were presented in their second amended complaint. The trial court sustained the
demurrer to these claims without leave to amend. As will be seen, the trial court
correctly concluded that the Smiths failed to state any cause of action or any basis for
leave to amend.
1) Fraud
The elements of a fraud cause of action are: “‘(a) misrepresentation (false
representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”);
(c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting
damage.’ [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In
California, fraud must be pled specifically; general and conclusory allegations do not
suffice.” (Id. at p. 645; Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73-74.) This
means that “every element of the cause of action for fraud must be alleged in the proper
manner (i.e., factually and specifically), and the policy of liberal construction of the
pleadings [citation] will not ordinarily be invoked to sustain a pleading defective in any
material respect. [Citations.]” (5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 711,
pp. 126-127.) The pleading must be of sufficient particularity “‘to enable the court to
determine whether, on the facts pleaded, there is any foundation, prima facie at least, for
the charge of fraud.’” (Scafidi v. Western Loan & Bldg. Co. (1946) 72 Cal.App.2d 550,
553.)
The Smiths’ fraud cause of action was based on the theory that B of A did not
actually loan money to the Smiths. According to the allegations, B of A issued the loan
to fictional entities that had names spelled in all capital letters (i.e., CHARLES SMITH
and DEBORAH M. SMITH), as opposed to living, breathing, “real” people who spell
their names with both upper case and lower case letters (i.e., Charles Smith and
Deborah M. Smith). The trial court found this theory to be both factually baseless and

14.
irrational, explaining: “Spelling a natural person’s name in all capital letters does not
reference a new, different or artificial entity. Such a spelling still references the living
person. [The Smiths] have pled no facts to suggest that they did not obtain the benefits of
the loan they applied for, was funded and made payments on.” We quite agree.
On demurrer, the court does not accept as true a pleading’s legal contentions or
unsupported conclusions. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) Here, no facts
were alleged in the second amended complaint to permit a reasonable basis to conclude
that a false representation was made—that is, no facts were stated to indicate that the
Smiths did not in fact receive their loan. Spelling names in all capital letters does not, by
any stretch of the imagination, suggest that the loan was not made to the Smiths or
indicate an alien or artificial entity actually received the loans. To put it more bluntly, the
allegations are not only unsupported conclusions, they are nonsense. In light of this
glaring deficiency, along with the Smiths failure to provide any possible basis for leave to
amend, we conclude that the trial court correctly sustained the demurrer without leave to
amend.
Additionally, we observe that the Smiths’ original complaint admitted that they
actually received the loan from B of A.7 Accordingly, we disregard the allegations to the
contrary in the second amended complaint as sham pleading. “A plaintiff may not avoid
a demurrer by pleading facts or positions in an amended complaint that contradict the
facts pleaded in the original complaint or by suppressing facts which prove the pleaded
facts false.” (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877.) If a

7 For example, paragraph 46 of the original complaint stated that the Smiths’
mortgage was subject to a certain federal statute for several reasons, including: “Charles
Smith and Deborah M. Smith executed the Deed of Trust, are individuals … [who] used
the loan proceeds for personal, family, or household purposes, … the amount borrowed
was, and is subject to a finance charge, and is to be repaid in 5 or more installments, and
because the mortgage loan is secured by [the Smiths’] principal dwelling .…”

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plaintiff does so without offering an adequate explanation for the change, “the policy
against sham pleading” permits a trial court or an appellate court to “disregard the
inconsistent allegations and read into the amended complaint the allegations of the
superseded complaint.” (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-
384; accord, Lockton v. O’Rourke (2010) 184 Cal.App.4th 1051, 1061; Deveny v.
Entropin, Inc. (2006) 139 Cal.App.4th 408, 425-426, & fn. 3 [if a party files an amended
pleading and attempts to avoid defects of original complaint by either omitting facts that
rendered prior complaint defective or adding facts inconsistent with prior allegations,
court may take judicial notice of prior pleadings and disregard inconsistent allegations or
read into amended complaint the allegations of the superseded complaint]; Berg & Berg
Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1043, fn. 25 [same].)
Here, with no explanation for the change, the second amended complaint
contradicted the original complaint by alleging that the Smiths never received the loan
from B of A. Under the above authorities, we disregard these inconsistent allegations set
forth in the second amended complaint. In so doing, the entire fraud claim collapses as a
sham. Thus, the policy against sham pleading provides an additional basis for our
conclusion that the trial court correctly sustained the demurrer to the fraud cause of action
without leave to amend.
2) Intentional Infliction of Emotional Distress
The elements of the tort of intentional infliction of emotional distress are:
(1) extreme and outrageous conduct by the defendant with the intention of causing, or
reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s
suffering severe or extreme emotional distress; and (3) actual and proximate causation of
the emotional distress by the defendant’s outrageous conduct. (Christensen v. Superior
Court (1991) 54 Cal.3d 868, 903.) Conduct to be outrageous must be so extreme as to
exceed all bounds of that usually tolerated in a civilized community. (Ibid.) “‘Liability
has been found only where the conduct has been so outrageous in character, and so

16.
extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as
atrocious, and utterly intolerable in a civilized community.’ [Citation.]” (Cochran v.
Cochran (1998) 65 Cal.App.4th 488, 496.) And the defendant’s conduct must be
intended to inflict injury or engaged in with the realization that injury will result. (Potter
v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001.) Moreover, with respect to
the requirement that a plaintiff show severe emotional distress, the Supreme Court has
expressly set the bar high: “‘Severe emotional distress means “‘emotional distress of
such substantial quality or enduring quality that no reasonable [person] in civilized
society should be expected to endure it.’”’” (Hughes v. Pair (2009) 46 Cal.4th 1035,
1051, quoting Potter v. Firestone Tire & Rubber Co., supra, at p. 1004.)8
It is for the court to determine, in the first instance, whether a defendant’s conduct
can reasonably be regarded as so extreme and outrageous as to permit recovery. (Chang
v. Lederman (2009) 172 Cal.App.4th 67, 87; Fowler v. Varian Associates, Inc. (1987)
196 Cal.App.3d 34, 44.) If the court decides that reasonable persons may differ on the
issue, then it is for the jury to determine whether the conduct was, in fact, outrageous.
(Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534; Alcorn v. Anbro Engineering, Inc.
(1970) 2 Cal.3d 493, 499.)
In sustaining the demurrer, the trial court found that the conduct alleged in the
second amended complaint was insufficient as a matter of law to constitute extreme and
outrageous conduct and, secondly, that the degree of emotional distress was not of such a
severe nature that no one in a civilized society should be expected to endure it. We agree

8 The tort does not extend to mere insults, indignities, threats, annoyances, petty
oppressions, or other trivialities. (Hughes v. Pair, supra, 46 Cal.4th at p. 1051.)
“‘[P]laintiffs must necessarily be expected and required to be hardened to a certain
amount of rough language, and to occasional acts that are definitely inconsiderate and
unkind. There is no occasion for the law to intervene in every case where some one’s
feelings are hurt.’” (Cochran v. Cochran, supra, 65 Cal.App.4th at p. 496.)

17.
with the trial court on both points. The emotional distress claim was primarily founded
on the Smiths’ anxiety at the prospect of losing their home once steps were taken by
defendants to foreclose on the deed of trust after the Smiths stopped making mortgage
payments. However, notwithstanding the Smiths’ anxiety, foreclosure was simply an
exercise of a contractual and lawful remedy that arose as a result of the Smiths’ material
default on their trust deed and, therefore, defendants’ conduct was not extreme and
outrageous under the circumstances. Additionally, the Smiths’ natural feeling of stress or
anxiety concerning that same foreclosure was not the type of emotional distress that
would be considered so severe, substantial and enduring that no one in a civilized society
should be expected to endure it.
The only other conduct alleged as potential support for the intentional infliction of
emotional distress claim was that B of A made a number of phone calls to the Smiths.
Allegedly, many phone calls were made to the Smiths’ home by B of A, including
occasionally more than “10 phone calls” in a single day, and in a few instances, the time
of day was later than “the allowed call time established by law.” The trial court carefully
considered an attachment to the original complaint, referred to as exhibit No. 11, which
provided a record of the subject phone calls.9 The trial court concluded that the alleged
phone calls “[did] not establish a basis for severe emotional distress.” As to the phone
calls, the trial court likewise found that the conduct was insufficient as a matter of law,
explaining: “Exhibit 11 to the original complaint indicate[d] that the duration of the calls
was extremely brief, such that the[re] were messages left or missed calls, and [the
Smiths] … never made allegations that the tone of the calls was harassing, the language

9 In ruling on a demurrer, exhibits attached to the pleadings may be considered, and
if allegations in the pleading conflict with the exhibits, the trial court may rely on and
accept as true the contents and legal effects of the exhibits. (SC Manufactured Homes,
Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83; Del E. Webb Corp. v. Structural Materials
Co. (1981) 123 Cal.App.3d 593, 604.)

18.
was vulgar, or threats or improper communications [were] made. [The Smiths] were free
to, and apparently did, ignore the calls. Likewise, [the Smiths] have not pled facts
justifying being distressed at the one late night phone call. They have not established that
they were woken up by the call or that [the] content was unusual. The content of the calls
must be truly egregious before these calls will support a cause of action for intentional
infliction of emotional distress.”
We concur with the trial court’s conclusion. The phone calls were placed by
B of A during the time frame after the notice of trustee’s sale was recorded and served on
May 19, 2010. The trustee’s sale was originally set for June 9, 2010, but the Smiths were
apparently able to obtain postponements and they also sought information from B of A.
In the context of all that was happening, it is reasonable to assume that B of A would
have had good and important reasons to attempt to communicate with the Smiths in good
faith on a fairly frequent basis. In any event, no adequate allegations were presented
concerning the context, timing or circumstances of the phone calls, or the words used, to
suggest that the missed phone calls or messages were so egregious, so extreme and
outrageous, that they exceeded all bounds of decency and went beyond what is usually
tolerated in a civilized community. (Christensen v. Superior Court, supra, 54 Cal.3d at p.
903; Cochran v. Cochran, supra, 65 Cal.App.4th at p. 496.) The Smiths have failed to
state a cause of action for intentional infliction of emotional distress.
On the issue of leave to amend, the trial court had sustained the demurrer to the
identical cause of action in the first amended complaint with one last opportunity to cure
the defects. The second amended complaint did not do so, but merely reiterated, without
substantive change, the inadequate allegations. We conclude the trial court correctly
sustained the demurrer to the cause of action for intentional infliction of emotional
distress without leave to amend.

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 3) Unfair Business Practices
The final cause of action was for alleged violation of Business and Professions
Code section 17200. This section prohibits unfair competition, including unlawful,
unfair, and fraudulent business acts or practices. (Korea Supply Co. v. Lockheed Martin
Corp. (2003) 29 Cal.4th 1134, 1143.) Business and Professions Code section 17200
“‘“borrows”’” violations from other laws by making them independently actionable as
unfair competitive practices. (Cel-Tech Communications, Inc. v. Los Angeles Cellular
Telephone Co. (1999) 20 Cal.4th 163, 180.) Accordingly, if a predicate unlawful or
qualifying wrongful act is not alleged (i.e., the unlawful, unfair or fraudulent business act
or practice), the demurrer must be sustained. (See, e.g., Bardin v. DaimlerChrysler Corp.
(2006) 136 Cal.App.4th 1255, 1264-1275 [demurrer properly sustained where the
plaintiff failed to allege facts to support asserted claims of “unfair” or “fraudulent”
business act or practice]; Walker v. Countrywide Home Loans, Inc. (2002) 98
Cal.App.4th 1158, 1169.) Here, the second amended complaint asserted that the Smiths
fraud claim constituted the sole basis for their Business and Professions Code
section 17200 cause of action. Because, as previously explained above, the Smiths failed
to allege facts that the alleged representation was in fact false, their fraud claim failed.
Additionally, we have concluded the fraud claim was a sham. Consequently, no
deception of the consumer occurred and the Smiths cannot maintain a Business and
Professions Code section 17200 cause of action premised on the alleged fraud. Since the
Smiths failed to offer any possible basis for leave to amend, we conclude the trial court
rightly sustained the demurrer to this cause of action without leave to amend.
To summarize, we have held the trial court properly exercised its discretion in
granting defendants’ motion to set aside defaults, and that it correctly sustained
defendants’ demurrers to all of the causes of action in the first amended complaint and
second amended complaint, without leave to amend.

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III. Trial Court Correctly Ordered the Lis Pendens Expunged
We now briefly dispose of the appeal in case No. F066470, in which the Smiths
appealed from the trial court’s order granting DVP’s motion to expunge the lis pendens.
Under section 405.31, the trial court was required to expunge the lis pendens if it found
that “the pleading on which the [lis pendens] is based does not contain a real property
claim.” Additionally, under section 405.32, the court shall also order the lis pendens
expunged if “the claimant has not established by a preponderance of the evidence the
probable validity of the real property claim.” Here, the trial court determined that the
Smiths had failed to plead a real property claim and, accordingly, granted the motion to
expunge the lis pendens. Our review on appeal involves a demurrer-like analysis of the
pleading to ascertain whether a real property claim has been adequately pled by the
Smiths. (Kirkeby v. Superior Court (2004) 33 Cal.4th 642, 647-648.) Since we have
affirmed herein the trial court’s orders sustaining demurrers to all of the Smiths’ causes
of action without leave to amend, it is plain that the Smiths failed to successfully plead
any cause of action—including a real property claim. Therefore, we conclude the trial
court correctly granted DVP’s motion to expunge the lis pendens.
As to the award of attorney fees to DVP, section 405.38 provides that the trial
court “shall” make an award of attorney fees and costs to the party prevailing on the
motion “unless the court finds that the other party acted with substantial justification or
that other circumstances make the imposition of attorney’s fees and costs unjust.” The
record clearly supported the award of attorney fees to DVP, and no intelligible or
adequate argument to the contrary has been presented by the Smiths in their appeal. No
abuse of discretion has been shown in regard to the award of attorney fees and costs to
DVP, and we affirm that portion of the trial court’s order as well.
Finally, the Smiths failed to timely seek a writ of mandate, which was the only
basis for obtaining appellate review of the order expunging the lis pendens. (§ 405.39;
Amalgamated Bank v. Superior Court (2007) 149 Cal.App.4th 1003, 1016; Howard S.

21.
Wright Construction Co. v. Superior Court (2003) 106 Cal.App.4th 314, 318.) This
provides yet another reason to reject the Smiths’ appeal of the order expunging the lis
pendens—no appeal lies from such an order.
DISPOSITION
The orders and judgment of the trial court are affirmed. Costs on appeal are
awarded to defendants and DVP.

_____________________
Kane, Acting P.J.
WE CONCUR:

_____________________
Detjen, J.

_____________________
Franson, J.

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