Filed 11/3/23 CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

LORETO A. LAGRISOLA et al. , Plaintiffs and Appellants,

v.
NORTH AMERICAN FINANCIAL CORP ORATION , Defendant and Respondent. D080758

(Supe r. Ct. No. 37

- 2021

- 000 20798

- CU

- CO

- CTL)

APPEAL from a judgment of the Superior Court of San Diego County,
Joel R. Wohlfeil , Judge. Affirmed. James Swiderski for Plaintiffs and Appellants. Greeley Thompson, David M. Greeley ; Mitchell Sandler and Ariel le Stephenson for Defendant and Respondent. In 2017, Loreto and Mercedes Lagrisola (the Lagrisolas) applied for and obtained a loan from North American Financial Corporation (NAFC), secured by a mortgage on their residence. In 2021, the Lagrisolas sued NA FC, individually and on behalf of a class of similarly situated persons. In the operative First Amended Complaint (FAC), the Lagrisolas alleged that NAFC was not licensed to engage in lending in the state of California between 2014
and 2018 and asserted v iolations of Business and Professions Code section 17200 and Financial Code sections 22100 and 22751.2

The trial court sustained NAFC’s demurrer to the FAC without leave to amend, concluding that the allegations in the FAC were insufficient to
establish a n actual economic injury, necessary for standing under Business and Professions Code section 17200, and that there was no private right of action under Financial Code sections 22100 and 22751. The Lagrisolas assert the trial court erred in reaching each o f the foregoing conclusions. On our own de novo review, we reach the same conclusions as the trial court, and accordingly, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Because this case arises from a demurrer sustained without leave to amend, we set fo rth the relevant, well

- pleaded factual allegations from the FAC. (See Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 35 [“we deem all well

- pleaded factual allegations of the complaint to be true”].) NAFC is a Nevada based business entity with offices in California. In 2017, the Lagrisolas borrowed $550,000 from NAFC, secured by real property in San Diego. This was one of 319 loans NAFC originated to California consumers between July 1, 2014 and August 27, 2018. NAF C acted as both the loan broker and the lender on the loans, but was licensed in California only as a broker. NAFC was not licensed to lend money to consumers in California, as required by Financial Code section 22100, during the relevant time period.
NA FC did not inform any of its prospective borrowers that it was not licensed as a lender in California. And, according to the FAC, “NAFC’s dual role as both loan broker and lender prevented [ the Lagrisolas ] from learning
about its unlicensed status as lend er. Ordinarily, the loan broker would be tasked with ensuring that Plaintiff homeowners only borrowed from lenders3

with the proper license in the state.” The Deed of Trust securing the loan for the Lagrisolas identified NAFC as the “Loan originator” and included a Nationwide Multistate Licensing System and Registry (NMLS) number for NAFC but did not specify whether NAFC was licensed as a finance lender. 1 The Lagrisolas were unaware that NAFC was not licensed as a finance
lender and would “never have sig ned up to a loan with NAFC had they been informed that the company was not legally permitted to make loans to them or to any other California borrower.” They “would have gone elsewhere to obtain their loans had they been informed that NAFC” did not hold a lending license. NAFC resold the loans it issued , including the Lagrisolas ’ , into a secondary marketplace and received compensation from the resale of each
loan. In December 2020, California regulators entered into a settlement agreement with NAFC to a ddress its unlicensed lending activity. Pursuant to the settlement agreement, included as e xhibit B to the original complaint, NAFC was ordered to “refrain from violating Financial Code section 22100, subdivision (a), by engaging in the business of a fina nce lender without obtaining a license” and to pay an administrative penalty of $75,000. The parties acknowledged the settlement agreement was “intended to constitute a full, final, and complete resolution of the violations.” The settlement was the

1 The NMLS is a publicly available “ web

- based system that allows state

licensed non

- depository companies, branches, and individuals to apply for, amend, update, or renew licens es issued by state regulatory agencies.” (1 Res. Mort. Lend. State Reg. Man. West California Mortgage Lending § 4:2 ; see also NML S Consumer Access portal, available at
< https://www.nmlsconsumeraccess.org > [as of Nov. 3 , 2023] , archived at
< https://perma.cc/ LMM3

- Q8PV > .)4

“firs t public revelation of NAFC’s unlicensed lending activity,” and the impetus for the current litigation. The Lagrisolas assert three causes of action in the FAC. 2 In the first cause of action, they allege that NAFC violated Business and Professions Code section 17200 by engaging in unlicensed lending in violation of Financial Code sections 22100 and 22751. They contend that NAFC earned “illegal interest” by engaging in this unlawful lending, and that the retention of such profits “constitutes a loss of money or property” to them, and other similarly situated plaintiffs. In the second cause of action, the Lagrisolas assert violations of Business and Professions Code section 17200 based on the alleged deceptive act of failing to disclose that NAFC was not licensed to make loans in California. They allege that NAFC’s unlicensed status was a material fact that borrowers would want to be informed of prior to making a decision to enter into a loan transaction and, if they had known, they “never would have

agr eed to participate in NAFC’s violation of the law by paying illegal interest and finance charges to NAFC, rewarding them for non

- compliance with the licensing requirements of California law.” And, as in the first cause of action, they allege that NAFC ear ned “illegal interest which it is required to forfeit to the borrowers.”
I n the third cause of action, the Lagrisolas allege direct violations of Financial Code sections 22100 and 22751. As in the first and second causes of action, they assert that the “ law specifically commands that an unlicensed

2 The Lagrisolas asserted only the first cause of action in their original complaint. The trial court sustained a demurrer to the complaint with leave to amend, and the Lagrisolas filed the FAC. They restate d the first cause of action in t he FAC, “to preserve the matter for appeal,” and add ed the second and third causes of action.5

lender is to forfeit all interest and finance charges made on any unlicensed loan.” They acknowledge that NAFC has since sold the loans, and therefore is no longer collecting interest, but contend that NAFC mus t forfeit any profit it made through the sale of the unlicensed loans to the secondary market. NAFC filed a demurrer to the FAC. After briefing and argument, the trial court concluded that the allegations in the FAC did not adequately allege an injury in fact and therefore failed to establish standing to bring a claim under Business and Professions Code section 17200, and that there is no private right of action under Financial Code sections 22100 and 22751. Accordingly, the trial court sustained the d emurrer without leave to amend. The Lagrisolas timely appealed from the resulting judgment.

II. DISCUSSION The Lagrisolas challenge each of the trial court’s determinations on appeal and contend that the court erred in sustaining the demurrer to the FAC.

A. Standards of Review On appeal from a judgment of dismissal after a demurrer is sustained without leave to amend, “we review the operative complaint ‘de novo to determine whether the complaint alleges facts sufficient to state a cause of action under any l egal theory or to determine whether the trial court erroneously sustained the demurrer as a matter of law.’ ” ( Morris v. JPMorgan Chase Bank
, N.A. (2022) 78 Cal.App.5th 279, 292 ( Morris ).) “If the demurrer was sustained, as it was in this case, our functi on is to determine whether the complaint states sufficient facts to state a cause of action.” ( Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 2226

Cal.App.3d 1371, 1381, quoting Blank v. Kirwan (1985) 39 Cal.3d 311, 318 ( Blank ).) 3
“In review ing 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.’ ” ( Blank , supra , 39 Cal.3d at p. 318.) “Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” ( Ibid .) We may “take notice of exhibits attached to the complaints,” and “[i]f facts appearing in the exhibits cont radict those alleged, the facts in the exhibits take precedence.” ( Holland v. Morse Diesel Internat., Inc. (2001) 86 Cal.App.4th 1443, 1447.) We may also consider prior versions of the pleadings, particularly where previous allegations are altered
or omit ted without adequate explanation. (See Shoemaker v. Myers (1990)
52 Cal.3d 1, 12; Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1109.)

B. Plaintiffs Lack Standing to Assert Violations of Business and Professions Code Section 17200 As discussed above, the FAC al leges that NAFC was unlicensed to make loans, and that the “ making of the loan by NAFC without the proper license to do so is an unlawful business practice actionable by way of a suit under Business & Professions Code section 17200.” It then asserts two

s eparate causes of action under Business and Professions Code section 17200;

3 The Lagrisolas do not argue that they could cure any deficiencies in the FAC by amendment and do not ask for the court to find that the trial court erred in d enying leave to amend. Accordingly, we do not consider whether the trial court should have granted them leave to amend. (See Medina v. Safe

- G uard Products Int ernat. , Inc. (2008) 164 Cal.App.4th 105, 112, fn. 8; Hendy v. Losse (1991) 54 Cal.3d 723, 742 [ “The burden is on the plaintiff, however, to demonstrate the manner in which the complaint might be amended”].)7

one based on violations of Financial Code sections 22100 and 22751 , and one based on NAFC’s allegedly deceptive act of failing to disclose that it was not
licensed as a lender.
Bus iness and Professions Code section 17200 (commonly referred to as the Unfair Competition Law, or the “UCL”) defines unfair competition as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising a nd any act prohibited by Chapter 1 (commencing with Section 17500).” Section 17204 further provides, in relevant part, that “[a]ctions for relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by

. . . a
pers on who has suffered injury in fact and has lost money or property as a result of the unfair competition .” (Bus. & Prof. Code § 17204 , italics added.) The latter statute was amended in 2004 with the passage of Proposition 64. The purpose of Proposition 64 was to “materially curtail [ ] the universe of those who may enforce” the UCL in a private action by “confin[ing] standing to those actually injured by a defendant’s business practices,” and “to prohibit private attorneys from filing lawsuits for unfair competition where they have
no client who has been injured in fact under the standing requirements of the United States Constitution .” ( Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 320

– 322 ( Kwikset ).) “To satisfy the narrower standing requireme nts imposed by Proposition 64, a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury , and (2) show that that economic injury was the result of, i.e., caused by , the unfair b usiness practice or false advertising that is the gravamen of the claim.” ( Kwikset , at p. 322; accord California Medical Ass n. v. Aetna Health of Cal ifornia Inc. (2023) 14 Cal.5th 1075, 1086.)8

Here, NAFC contends, as it did in the trial court, that the FAC fails to adequately allege that the Lagrisolas suffered an injury in fact or lost money or property as a result of its licensing status. The trial court agreed. It explained that “a loan has no subjective or intangible value,” and that the Lagrisolas “cannot establish standing (injury in fact) by alleging that they now possess something they would not have similarly valued or selected had they been aware of the unlicensed status of the lender. The loan [the Lagrisolas] obtained was identical to the t erms and characteristics they desired.”
The court in Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583 ( Peterson ) considered the “injury in fact” requirement for standing imposed by Proposition 64 in a similar context

— the unlicensed sale of insu rance. The plaintiffs there argued that Cellco, a communications equipment vendor doing business as Verizon Wireless, improperly charged them an insurance premium for cellphones they had purchased. ( Peterson , at p. 1586 .) As here, Cellco did not have a license to sell insurance but was allegedly retaining a portion of the insurance premiums paid by the plaintiffs as a “fee.” ( Id . at pp.
1586

– 1587.) Also as here, the plaintiffs alleged violations of the UCL, but the trial court ultimately sustained a de murrer without leave to amend, finding that the plaintiffs “had ‘been repeatedly unable to state facts supporting the legal requirement of actual injury and pecuniary loss as required by Proposition 64. ’ ” ( Peterson , at pp. 1587

– 1588.) The appellate cou rt affirmed the trial court’s decision and, in doing so, rejected the plaintiff’s view that they were injured “because they paid the alleged unlawful commission that was illegally retained” by Cellco. ( Peterson , supra, 164 Cal.App.4th at p. 1591.) The co urt explained, “plaintiffs here do not allege they paid more for the insurance due to defendant’s9

collecting a commission [from the sale of the insurance]. They do not allege they could have bought the same insurance for a lower price either directly from the insurer or from a licensed agent. Absent such an allegation, plaintiffs have not shown they suffered actual economic injury. Rather, they received the benefit of their bargain, having obtained the bargained for insurance at the bargained for price.” ( I bid .) Moreover, the plaintiffs did

“ not allege they were dissatisfied with the insurance or were uninformed of its price.” ( Peterson , at p. 1592.) Rather, they acknowledged that Cellco had “disclosed to them ‘the price and extent of the insurance co verage.’ ” ( Ibid .) In addition, the court concluded that a person has not “lost money” as required for standing under the UCL simply because it is “ ‘no longer in their possession.’ ” ( Peterson , at p. 1592

. ) Likewise, in Medina v. Safe

- Guard Products, I nternat

. , Inc . (2008) 164 Cal.App.4th 105 ( Medina ), the court affirmed the sustaining of the demurrer as to a UCL action based on the alleged unlicensed sale of insurance. There, the plaintiff alleged that a vehicle service contract he had purchased was a n insurance contract, and that the vendor, Safe

- Guard, was not licensed to sell insurance in California. ( Medina , at. pp. 108, 113.) Like the reasoning in
Peterson , the Medina court noted that the plaintiff “has not alleged that he didn’t want wheel and tire coverage in the first place, or that he was given unsatisfactory service or has had a claim denied, or that he paid more for the coverage than what it was worth because of the unlicensed status of Safe

Guard. He hasn’t suffered any loss because of Sa fe

- Guard’s unlicensed status.” ( Medina, at p. 114.) As the court explained, further, “[t]he point of the Proposition 64 amendment was to impose additional requirements on plaintiffs beyond merely having suffered an ‘unlawful, unfair or fraudulent10

busines s act or practice,’ namely, having lost money or property as a result of that practice.” ( Medina, at p. 115 , fn. omitted .) Similarly here, the Lagrisolas do not allege that they did not want a loan in the first instance, that they paid any more for their loan than they otherwise would have, or that they could have obtained the loan at the same or lower price from another lender that was licensed . Nor do they allege that they suffered any particular harm because of NAFC’s unlicensed status.
Rather , they concede in the FAC that NAFC was licensed as a broker and, although they set forth the additional requirements that NAFC would have had to meet to be licensed as a lender as well, they do not contend that NAFC
would not have been able to meet those require ments. In fact , the settlement agreement attached as an exhibit to the original complaint suggests that NAFC did become licensed as a lender in August 2018. Thus, if anything, the allegations suggest that NAFC simply neglected to obtain a California
lend ing license prior to August 2018 and, like the plaintiff in Medina , the Lagrisolas have not alleged that they “suffered any loss because of [NAFC]’s unlicensed status.” ( Medina, supra, 164 Cal.App.4th at p. 114.) The Lagrisolas allege that they would not have agreed to the loan, or perhaps would have obtained a loan from another vendor if they had known that NAFC was not licensed as a lender. The Peterson court was not persuaded by a similar allegation that “ ‘ if defendant had not offered [and]
sold

. . . insurance when it was not

. . . licensed to do so, plaintiffs would not have purchased the

. . . insurance from defendant, ’ ” and neither are we. (See
Peterson , supra, 164 Cal.App.4th at p. 1587.) Again, the Lagrisolas do not assert that a comparable l oan was available from a licensed lender, or that NAFC’s unlicensed status harmed them in any way. Notably, the FAC does allege that NAFC resold the loans, but does not allege that the purchasers11

were not licensed. Thus, at the end of the day, the plaint iffs were left with a loan from a presumably licensed lender, at the bargained for rate. As in
Peterson , the plaintiffs here “received the benefit of the ir bargain, having obtained the bargained for [loan] at the bargained for price.” ( Id. at p. 1591.) The Lagrisolas contend that this case is akin to the Kwikset case, in which the California Supreme Court found that the plaintiffs had sufficient standing based on allegations that Kwikset mislabeled the locks the y bought as “Made in America.” (See Kwiks et, supra, 51 Cal.4th at p. 329.) As the

co urt in Kwikset explained: “According to the second amended complaint, (1) Kwikset labeled certain locksets with ‘ Made in U.S.A. ’ or a similar designation, (2) these representations were false, (3) plaintiffs

saw and relied on the labels for their truth in purchasing Kwikset’s locksets, and (4) plaintiffs would not have bought the locksets otherwise. On their face, these allegations satisfy all parts of the section 17204 standing requirement.” ( Kwikset, at pp. 3 27

– 328.) Here, the Lagrisolas argue that they similarly alleged that they would not have purchased the loan if they had realized that NAFC was unlicensed. However, unlike the plaintiffs in Kwikset , who allegedly “ saw and relied on ” the “ ‘Made in the U.S. A.’ ” labeling when purchasing the locksets (see ( Kwikset, supra, 51 Cal.4th at pp. 327

– 328) , the Lagrisolas do not point to any representation that NAFC made to them about its licensing status, nor do they allege that they relied on an actual belief or un derstanding that NAFC was licensed when obtaining their loan. Put more simply, the Lagrisolas do not allege that they saw or relied on a statement that NAFC

was “licensed as a lender in California.” They allege , now, that they would
not have obtained the loan from NAFC if they had known NAFC was not a licensed lender, but they do not allege that they did obtain the loan based12

upon a representation by NAFC that it was a licensed lender. (See Kwikset, at p. 326 [“a plaintiff ‘proceeding on a claim of misre presentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements’ ”].) 4
The Kwikset decision did not change Proposition 64’s requirement that standing under the UCL requires both (1) an economic injury and (2) that the injury be caused by “the unfair business practice or false advertising that is the gravamen of the claim.” (See Kwikset, supra, 51 Cal.4th at p. 322 .) Rather, Kwikset held that where the gravamen of the claim is that the seller affirmatively represented that a product had certain defined characteristics

— there, that it was “Made in the U.S.A.”

— and plaintiffs allege that they chose that product in reliance on that representation , the plaintiffs can establish that they did n ot receive the benefit of their bargain, and therefore they suffered an economic injury caused by the unfair business practice or false advertising sufficient to confer standing . ( I bi d .) A s the Kwikset c ourt put it, “[s]imply stated: labels matter,” and a consumer that affirmatively relies on a label in choosing one product over another suffers an economic injury when they pay money for a product with a label that turns out to be false. ( Kwikset , at p. 328.) The allegations set forth in the FAC at iss ue here do not similarly establish an economic injury caused by an unfair business practice under the
Kwikset framework for at least two related reasons.

4 Further, as the trial court explained here, loans are not the same as locks : “ U nlike a product or consumable good, a loan has no subjective or intangible value

. . . its value is whol ly dependent on its terms, such as the interest rate, principal amount and number of payments.” And, as we have explained here, the Lagrisolas ultimately got the loan they bargained for.13

First, the Lagrisolas do not allege that NAFC made an affirmative representation about the product

. As we have explained, the analysis of economic injury in Kwikset turned solely on plaintiffs’ allegations that the defendant falsely labeled the product, affirmatively misrepresenting its
characteristics , and that they had relied on that representation whe n purchasing the product . But the Kwikset c ourt took pains to distinguish cases in which the claims arose from the plaintiff’s reliance on false statements from those in which the plaintiffs did not rely on any such misrepresentation. (

Kwikset, supra, 51 Cal.4th at p. 327.) As the c ourt explained, the complaint at issue in Hale v. Sharp
Healthcare (2010) 183 Cal.App.4th 1373 was adequate because the plaintiff had alleged that “ ‘she was expecting to be charged “regular rates,” ’ ” as
stated in the contr act that the defendant presented , and from that, one could reasonably infer that she had relied on that affirmative representation when entering th at same contract

. ( Kwikset, supra, 51 Cal.4th at p. 327, citing
Hale , at pp. 1385

– 13 86.) T he Kwikset court distinguished Hale from other
cases like Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350 and Hall
v. Time Inc. (2008) 158 Cal.App.4th 847 , in which the courts had properly sustained demurrers where the plaintiffs did not “allege any reliance on

repr esentations about rates” and , similarly, “did not allege that misrepresentations caused him to pay money for ” the product at issue

. ( Kwikset , supra , 51 Cal.4th at p. 327.) In our view, the distinction is based on the presence of an affirmative representa tion that was material to the consumer’s decision to purchase a specific product or enter a specific contract. Here, the Lagrisolas do not allege that NAFC made an affirmative representation about its licensing status. The complaint alleges, “Financial Code section 22162 requires all lenders to disclose their license numbers on14

all advertisements for loans,” 5 and that NAFC “did not inform any of its prospective borrowers of its unlicensed status

. ” But, it does not allege that NAFC made any affirmative s tatements about its licensure status or, perhaps more importantly, that the Lagrisolas relied on any statements NAFC made about its licensure status when choosing to enter into the loan transaction with NAFC. The Lagrisolas later assert that NAFC’s licens ure status “was a material fact of which prospective borrowers would want to be informed prior to making a decision to enter into a loan transaction,” but again, they make no allegations indicating that they actually believed that NAFC was licensed when th ey entered into the loan at issue , or that NAFC
told them that it was

. In their reply brief, the Lagrisolas rely on a single Federal case, Hodson v. Mars, Inc. (2018) 891 F.3d 857, to assert that omissions may also be
actionable under the UCL , particular ly where the defendant does make a partial, deceptive disclosure. The court in Hodson did note, generally , that an omission theory of consumer fraud may be actionable under California’s consumer protection laws in some cases . ( Hodson at p. 861.) However , the

court went on to hold that plaintiffs ’ claims in that case were foreclosed because they had not established the defendants had a duty to disclose , as required to support a fraud theory, where the omission

— that the defendant

5 The FAC further alleg es that Business and Professions Code section 10235.5 requires disclosure of a Department of Real Estate license “ on all mortgage loans, ” but that section actually refers to advertisements as well

. (See Bus. & Prof. Code § 12035.5, subd. (a) [“A real esta te licensee or mortgage loan originator shall not place an advertisement disseminated primarily in this state for a loan unless there is disclosed within the printed text of that advertisement, or the oral text in the case of a radio or television advertis ement, the Department of Real Estate number and the unique identifier assigned to that licensee by the Nationwide Multistate Licensing System and Registry under which the loan would be made or arranged.”].)15

candy company sourced coco a beans from a region known to use child labor

— concerned neither a safety defect nor a “ physical product defect relating to the central function” of the product. ( Id . at p. 86 5 .) And, as relevant here, the court came to that conclusion despite assuming , without deciding , that the existence of slave labor in the product’s supply chain was in fact material to consumers. ( Id . at p. 864.) Likewise, here, the Lagrisolas have not established an actionable
omission. They assert that NAFC was statutorily requ ired to disclose its lending license number, that the statutory requirements to do so suggest materiality, and that, despite this, NAFC selectively disclosed only its broker
number on the loan documents

. They rely on the two statutes that are referenced i n the FAC but address only advertisements, and Financial Code section 22337, which is not referenced in the FAC, but does appear to require the disclosure of the “license number of the finance lender and broker, if any”
at the time a loan is made. 6 They a rgue that the Kwikset court relied on similar statutes to conclude that the Legislature had recognized the materiality of the mislabeling, but, as they acknowledge, the statutes at issue
in Kwikset “specifically outlaw[ed] deceptive and fraudulent ‘ Made in America ’ representations .” ( Kwikset, supra, 51 Cal.4 th at p. 329.) The

statutes that the Lagrisolas rely on here are not so specifically aimed at deceptive or fraudulent statements regarding a lender’s licensing status. Moreover, while the plaintiffs i n Kwikset alleged violations of the same fraudulent labeling statutes, the Lagrisolas only allege violations of Financial

6 Fin ancial Code section 22337 states, in relev ant part: “Each licensed finance lender shall: (a) Deliver or cause to be delivered to the borrower, or any one thereof, at the time the loan is made, a statement showing in clear and distinct terms the name, address, and license number of the finance le nder and the broker, if any.”16

Code sections 22100 and 22751, neither of which concern licensing disclosures. (See Kwikset at p. 317.)
Further still , even if we a ccept that NAFC was legally required to
disclose its lender license number , and failed to do so , there are no allegations in the complaint indicating the Lagrisolas relied on any belief or understanding that they may have had regarding NAFC’s licensure sta tus at the time they entered the loan. In fact, there are no allegations suggesting that the Lagrisolas had any belief at all regarding NAFC’s licensing status at the time they obtained the loan

. For example, there are no allegations indicating that the Lagrisolas knew that NAFC was supposed to be licensed in California, specifically, as both a broker and a lender ; that the Lagrisolas saw the NLMS number for NAFC that was displayed on the loan documents ;

or that the Lagrisolas understood the inclusion of that number to mean that NAFC was licensed in California as both a broker and a lender. Indeed, if they were concerned about NAFC ’s dual

- license status , they could have easily used the license number displayed on the documents to verify the same through a readily available public database. (See fn. 1, ante. )
Thus , even if an omission could fall into the Kwikset framework, as the Lagrisolas assert , the y still have not established causation, the second element required for standing under the UCL

. As we hav e explained, t he Lagrisolas do not allege that they relied on either a representation or an understanding created by an omission, and thus cannot allege that such a representation or omission caused an economic injury to them. Kwikset noted that “a plaint iff ‘proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements’ ” and show that “ ‘the misrepresentation was an immediate cause of the injury

- produc ing conduct

. ’ ” ( Kwikset, supra,17

51 Cal.4th at pp. 326

– 327.) Proposition 64’s requirement that the plaintiff’s economic injury be caused by the unfair competition “ ‘ requires a showing of a causal connection or reliance on the alleged misrepresentation. ’ ” ( Kwikset , at

p. 326.) The Lagrisolas nowhere allege that any injury to them was caused by a misrepresentation or omission, or that they relied on any such misrepresentation or omission . Put another way, the Lagrisolas cannot show that they suffered a ny economic injury because of , or resulting from , NAFC ’s failure to inform them that it did not have a lending license. 7 Instead, the Lagrisolas attempt to establish causation by alleging that they would not have purchased the loan had they known NAFC was unlicensed, a fact they only discovered three years later because of the public settlement. This subjective assertion of an intangible harm falls short of establishing the elements for standing under the UCL. As the Kwikset court pointed out, whereas fed eral standing may be based on “ intangible ” injury that does not involve lost money or property, UCL standing is more stringent. ( Kwikset, supra, 51 Cal.4th at p. 324.) We do not believe that the Kwikset court intended to expand Proposition 64 to include standing to plaintiffs like the Lagrisolas based on their intangible distaste for NAFC’s failure to complete the licensing process in California , a failure for which the state took appropriate action to remedy. The test for standing cannot turn on a

consu mer ’s post h o c belief about the seller’s status, particularly in the absence of an affirmative misrepresentation about that status at the time the

consumer entered the transaction

. Even where the consumer’s beliefs may be

7 By contrast, in Kwikset , the conduct of misrepresentation directly caused the economic injury, because it induced the plaintiffs to purchase a product based on the false statement on its label. ( Kwikset, supra, 51 Cal.4th at p. 327 [“plaintiffs saw and relied on the labels for their truth in purchasing Kwikset’s locksets”].)18

seen as reasonable, (e.g. that a business operating in California has the proper licensing, has sufficient insurance, is in full regulatory compliance, has laudable hiring practices, etc.), Proposition 64 did not intend to throw the doors open to UCL lawsuits arising only from a consumer’ s view of how the company does business. A n d, while we agree that Kwikset stands for the proposition that the subjective thoughts of a consumer may be material in some cases, the plaintiff must still establish that those subjective thoughts played some ro le in their decision to go through with the actual transaction. The Lagrisolas have not done so here. Rather, h ere, the Lagrisolas have conflated an actionable type of economic injury, as described in Kwikset , with conduct by the seller that
causes such injury. In Kwikset , the actionable conduct by the seller was the misrepresentation that the locks were “Made in America.” ( Kwikset, supra, 51 Cal.4th at p. 327.) The Kwikset plaintiffs relied on that misrepresentation in purchasing the locks, and such r eliance caused them to purchase a product that lacked a characteristic that they found desirable. Here, NAFC’s alleged actionable conduct was the lack of a license; but NAFC made no statements about its licensing status and the Lagrisolas do not allege th at they considered or relied on NAFC’s license status at the time they entered into
the loan . Moreover , the lack of a license did not impact the loan itself, and
the loan terms were and remained satisfactory to the Lagrisolas . Thus, they
have not establi shed that they suffered any economic injury because of NAFC’s unlicensed status

. Finally, the Lagrisolas assert that the court in Kwikset rejected the “benefit of the bargain” analysis employed in Peterson and Medina

. In our view, t he Kwikset court did no t reject that analysis; rather, the court stated , “Whether or not a party who actually received the benefit of his or her19

bargain may lack standing, in this case, under the allegations of the complaint, plaintiffs did not .” ( Kwisket, supra, 51 Cal.4th at p. 332, italics added.) As t he Kwikset then explained in detail , the plaintiffs in that case had very specifically bargained for a product that was “Made in the U.S.A.” but had unknowingly received one that was not. ( Ibid. ) Therefore, just like a

consum er that specifically bargains for organic milk but receives non

- organic
milk , they did not receive the benefit of their precise bargain. ( Id . at pp. 332

– 334.) The Lagrisolas also point to Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, in which the court noted that Peterson and
Medina were decided before Kwikset , under similar theories and by the same appellate court that was reversed in Kwikset . ( Hansen , at p. 731.) But that fact alone does not support a conclusion that Peterson and Medi na are no longer good law. Instead, t he Kwikset court cited Peterson and Medina favorably, and simply distinguished them from a different type of case in which the plaintiffs expressly relied on a material representation about the product. Here, even cons idering the Kwikset framework, for the reasons we have explained, the Lagrisolas have not established that they suffered an economic injury caused by an unfair or unlawful business practice of NAFC. Therefore, they lack standing to assert the UCL claims, and the trial court did not err in dismissing the first and second causes of action.

C. There Is No Private Right of Action Under Finance Code Sections 22100 and 22751 In the third cause of action in the FAC, the Lagrisolas assert violations of Finance Code sections 22100 and 22751, based on the allegation that “NAFC lacked a license to lend money to California borrowers.” They assert
that the “ law specifically commands that an unlicensed lender is to forfeit all interest and finance charges made on any unli censed loan.”20

Financial Code section 22100, subdivision (a) provides , “[ n ] o person shall engage in the business of a finance lender or broker without obtaining a license from the commissioner.” Section 22751, subdivision (a) provides, “[i]f any amount other than or in excess of the charges permitted by this division is charged or contracted for, or received, for any reason other than a willful act of the licensee, the licensee shall forfeit all interest and charges on the loan and may collect or receive only the principal amount of the loan.” And related section 22752, subdivision (a) likewise provides that the licensee shall forfeit all interest and charges on the loan “[i]f any provision of this division is violated in the making or collection of a lo an.” Here, the Lagrisolas acknowledge that NAFC sold the loans and is no longer collecting interest or charges, but assert that NAFC made a profit on the sale of the loans, in part because the third party buyers were able to charge interest on them. Acco rdingly, the Lagrisolas pray that the trial court order NAFC “to pay to Plaintiffs’ [ sic ] any amounts received from either borrowers or any third party on account of the inclusion of interest or finance charges on the amounts loaned to Plaintiffs in each o f the unlicensed loans made to them by NAFC.” The trial court sustained NAFC’s demurrer as to this cause of action as well, ruling that the statutory scheme does not contemplate a private right of action to pursue violations of the Financial Code. As not ed above, we review the trial court’s ruling on this issue de novo. (See Morris, supra, 78 Cal.App.5th at p. 292; Blank, supra, 39 Cal.3d at p. 318.) Like the trial court, we conclude that neither Financial Code section 22100 nor Financial Code
section 2 2751 provide a private right of action. A violation of a state statute does not automatically give rise to a right of recovery by a private individual. Courts will allow a private right of action21

only where a statute allows one. ( Mayron v. Google LLC ( 2020) 54 Cal.App.5th 566, 571.) The statute must contain “ ‘ “ ‘clear, understandable, unmistakable terms,’ ” which strongly and directly’ indicate a private right of action is allowed.” ( I

bi d ., citing Lu v. Hawaiian Gardens Casino, Inc . (2010) 50 Cal.4t h 592, 596

– 597.) If the statue “does not contain an unmistakable directive,” the court may consider the legislative history of the statute to
determine whether the Legislature intended to create a private right of action. ( Mayron, supra, at p. 571.) As r elevant here, Financial Code section 22713 specifically provides that the commissioner may bring an action or request that the Attorney General bring an action in the name of the people of the State of California. (Fin. Code § 227 13 , subd. (a).) The viol ator may then be liable for civil penalties, as NAFC was here. (Fin. Code § 227 13 , subd. (b).) Moreover, “[i]f the commissioner determines that it is in the public interest,” the
commissioner may include “a claim for restitution, disgorgement, or damages .” (Fin. Code § 227 13 , subds. (b) & (c).) Here, it is undisputed that
the commissioner resolved such an action against NAFC through a settlement in December 2020. Despite the final resolution of that matter, the Lagrisolas now seek to pursue damages for NAFC’s alleged Financial Code violations in addition to those recovered by the commissioner . But, when regulatory statutes, like the Financial Code, “ ‘ “provide a comprehensive scheme for enforcement by an administrative agency, the courts ordinarily

co nclude that the Legislature intended the administrative remedy to be exclusive unless the statutory language or legislative history clearly indicates an intent to create a private right of action.” ’ ” (See Noe v. Superior Court (2015) 237 Cal.App.4th 316 , 337.)22

The Lagrisolas point to Financial Code section 22752, subdivision (a), which provides that “the licensee shall forfeit all interest and charges on the loan” if the licensee violates a provision of the Financial Code. However, this language does n ot clearly indicate a private right of action, particularly when read in context with Financial Code section 22713. It merely provides that the licensee may not collect interest on the loan. This is far different from the type of statutory language held to support a private right of action. (See Lu, supra, 50 Cal.4th at p. 597 [listing examples of clear directives, including language “expressly stat[ing] that a person has or is liable for a cause of action for a particular violation”].) The Lagrisolas re ly on Goehring v. Chapman University (2004)
121 Cal.App.4th 353. There, the court found that the language of Business and Professions Code section 6061 conferred a private right of action on students who alleged that Chapman had not provided the disclosur es required by the statute. As relevant here, the statute provides, “ [ i ] f any school does not comply with these [disclosure] requirements, it shall make a full refund of all fees paid by students .” (Bus. & Prof. Code § 6061 , italics added.) The Goehring court concluded that the statutory requirement of a refund to students meant that the students had the right to pursue an action for the refund due to them. ( Goehring, supra, 121 Cal.App.4th at p. 377 [distinguishing cases in which the relevant statute “ did not expressly entitle individuals to a refund or any other type of payment for violation of the statute”].) Here, Financial Code section 22752, subdivision (a) provides for a forfeiture of fees and interest, not a refund. Unlike Goehring , in which the statute expressly identified both the party in violation, against whom the claim could be asserted (there, the University) and the party to whom23

payment should be made (there, the private

- party student claimants, through a refund to them), the Financial C ode does not identify a private party to whom the forfeited amounts would be repaid. Rather, it simply states that the lender can only collect on the principal and must forfeit any interest. And, as we have already noted, section 22713 specifically provi des for enforcement through action by the commissioner

. Finally , the courts can also look to a statute’s legislative history to
ascertain whether the Legislature intended to convey a private right of action. But, here, the Lagrisolas have not identified a ny legislative history, or other legal authority, to support a conclusion that the Legislature intended that violations of the Financial Code could be pursued by a private right of action. (See Singman v

. IMDB.com, Inc. (2021) 72 Cal.App.5th 1150, 1151 [ a ppellant bears the burden of establishing legal error through citations to the record and relevant legal authority].) Accordingly, we agree with the trial court’s reasoning that the provisions of the Financial Code “do not provide ‘clear, understandable,

u nmistakable terms’ for a private cause of action , ” but instead provide for enforcement of violations “via an action by the [c] ommissioner ” which “ is what occurred in this case.”24 III. DISPOSITION The judgment of the trial court is affirmed. Respondents are entitled to their costs on appeal.

KELETY, J.

I CONCUR:

O’ROURKE, Acting P. J.1

Dato, J., Concurring and Dissenting.

California law expressly requires a mortgage lender to be licensed before making home loans in this state. Between 2014 and 2018, defendant North American Financial Corporation (North American) made more than 300 home loans without any lender’s license. Predictably, it never disclosed to prospective borrowers that it lacked the required license. By making these unlicensed loans, a lmost by definition North American engaged in an unlawful and fraudulent business practice within the meaning of California’s Unfair Competition Law (UCL), Business and Professions Code section 17200
et seq. 1 The majority opinion endorses the trial cour t’s logic in sustaining North American’s demurrer without leave to amend based on a lack of standing. The trial court believed that because “a loan has no subjective or intangible value,” plaintiffs got what they paid for

— a loan of money on agreed

- upon
te rms

— and accordingly suffered no “economic injury” despite the unsurprising allegation in their complaint that they would not have entered into the loan transactions had they known North American was unlicensed. The trial court’s reasoning is strikingly si milar to an analysis rejected by the Supreme Court in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310,
320

– 322 (

Kwikset ). Narrowly construing the reach of that decision, the majority finds Kwikset distinguishable on its facts. In my view, however,
Kwikset stands for the general principle that where plaintiffs fairly allege they would not have entered into a consumer transaction had they known of an illegality, misrepresentation, or material omission by the defendant, they have adequately pleaded an economic injury for the purpose of establishing

1 Subsequent statutory references are to the Business and Professions Code unless otherwise indicated.2

standing to sue under the UCL. Because North American’s lack of a license would be material to a reasonable homeowner’s decision where to obtain a home loan, I believe Kwikset controls and I respectfully dis sent. 2

A The Supreme Court’s Kwikset decision provides the framework for analysis. In that case, the defendant sold locksets labeled “Made in U.S.A.” even though several component parts were made elsewhere, a violation of California law, specifically se ction 17533.7. ( Kwikset , supra , 51 Cal.4th at

p. 317.) Like the trial court in this case, the Court of Appeal in Kwikset concluded that plaintiffs lacked standing to bring a UCL claim because they failed to allege any loss of money or property within the meaning of section 17204. In that court’s view, the plaintiffs received just what they intended to purchase

— locksets that they did not allege were overpriced or defective. ( Kwikset , at pp. 319

– 320.) As a result, they lost nothing. The Supreme Court di sagreed. Reviewing the standing requirements established by the Proposition 64 initiative in 2004, Justice Werdegar’s opinion acknowledged the concerns of initiative proponents that prior law had permitted UCL suits by individuals “who have not used the d efendant’s product or service, viewed the defendant’s advertising, or had any other business dealing with the defendant.” ( Kwikset , supra , 51 Cal.4th

. at p. 321, internal quotations omitted.) She explained that just as the “intent of this

2 I concur in the majority opinion to the exte nt it concludes there is no private right of action under Financial Code sections 22100 and 22751. Of course, the absence of a direct private right of action is no bar to claiming a UCL violation based on an unlawful business practice. ( Stop Youth Addict ion, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 561

– 567; Committee On Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 210

– 211.)3

change was to c onfine standing to those actually injured by a defendant’s business practices,” it was equally clear that standing was preserved “ ‘for
those who had had business dealings with a defendant and had lost money or property as a result of the defendant’s unfai r business practices.’ ” ( Ibid. ) Noting that the plaintiffs’ case was “ ‘based on a fraud theory involving false advertising and misrepresentations to consumers’ ” ( Kwikset , supra , 51 Cal.4th at p. 326), the Supreme Court concluded the complaint properl y alleged standing by asserting that (1) the defendant made a representation about the product, (2) the representation was false, (3) plaintiffs relied on the truth of the representation, and (4) they would not have bought the product had they known the tr ue facts. ( Id. at pp. 327

– 328.) Summarizing its holding, the court stated, “A consumer who relies on a product label and challenges a misrepresentation contained therein can satisfy the standing requirement of section 17204 by alleging, as plaintiffs hav e here, that he or she would not have bought the product but for the misrepresentation.[ ] That assertion is sufficient to allege causation

— the purchase would not have been made but for the misrepresentation. It is also sufficient to allege economic inju ry .” (

Kwikset, at p. 330, italics added, fn. omitted.) Recognizing that plaintiffs here entered into loan transactions with North American and make a nearly identical allegation

— they would not have done so had they known it was an unlicensed lender

— the m ajority opinion effectively dismisses the Kwikset analysis by pointing out that this case does not involve an affirmative misrepresentation

. 3 (Maj. opn., ante , at p. 13 [“the

3 It is significant that the majority opinion relies primarily on two Court of Appeal decisions , Peterson v. Cellco (2008) 164 Cal.App.4th 1583 and Medina v. Safe

- Guard Products, Internat., Inc . (2008) 164 Cal.App.4th 105, both of which were decided before Kwikset . (Maj opn., ante , at pp. 8

– 10.) Medina, in turn, relied almost exclusively on a thir d case, Hall v. Time Inc.4

analysis of economic injury in Kwikset turned solely on plaintiffs’ allegations that the defendant falsely labeled the product, affirmatively misrepresenting its characteristics”].) But this is a distinction without a difference. It has
been well

- settled California law for decades that a UCL claim asserting a fraudulent business pra ctice is not limited to affirmative misrepresentations. It can also be based on a defendant’s failure to disclose material information if it can be fairly alleged there was an obligation to disclose the omitted fact. (E.g., Chern v. Bank of America (1976 ) 15 Cal.3d 866, 876; Paduano v. American Honda Motor Co., Inc. (2009) 169 Cal.App.4th 1453, 1469; Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255, 258

– 259; Patricia A. Murray Dental Corp. v. Dentsply Internat., Inc. (2018) 19 Cal.App.5th 258,
2 71; cf. Civ. Code, § 1710, subd. (3) [defining deceit as “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact”].) Here, as the majority opinion recognizes, there are statutes that require a lender to disclose its license number. (See Fin. Code, § 22337; see also id. , § 22162; Bus. & Prof. Code, §10235.5.) That the Supreme Court’s Kwikset opinion

(2008) 158 Cal.App.4th 847. All three cases are from the same division of the Court of Appeal that was reversed by the Supreme Court in Kwikset. As a more recent case explains, these cases “were decided before Kwikset , which hel d that the [typical] ‘benefit of the bargain’ theory has no relevance when the misrepresentation underlying the UCL claim is material in nature.” ( Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 731.) As Hansen explained, these earlier de cisions “appear[ ] to have been based on the same ‘benefit of the bargain’ reasoning” that was rejected by the Supreme Court in Kwikset

. ( Hansen, at p. 731, fn. 6.) While it is true that Kwikset cited both Peterson and Medina , they were cited for proposi tions unrelated to the reasoning on which the majority opinion relies.5

makes statements about the affirmative mi srepresentation involved in the case hardly means its reasoning only applies in that limited context. 4

B The majority opinion goes on to suggest that even if Kwikset is not limited to affirmative misrepresentations, such that North American should
have d isclosed its failure to obtain a lender’s license, plaintiffs have failed to allege they relied on any belief or understanding that North American was properly licensed. (Maj. opn., ante , at p. 16.) The problem with this suggestion is twofold. First , re liance is inherent in the plaintiffs’ allegation
that the failure to disclose the lack of a license was a material omission, 5 because it was information a reasonable borrower would consider important in deciding whether to do business with North American. ( Downey v. Public Storage, Inc. (2020) 44 Cal.App.5th 1103, 1116.) Alleging a material misrepresentation or omission gives rise to a presumption or inference of

4 Moreover, if North American included a license number in its loan materials, but referenced a broker’s license rather than a lender’s license (maj. opn., ante , at p. 15), plaintiffs could allege an affirmative representation that was deceptive and misleading because it failed to disclose additional information.
5 Paragraph 30 of plaintiffs’ amended complaint specifically alleges: “[North American] was not legally allowed to be enga ged in the business of lending money to California borrowers at the time it made the loans to the plaintiffs and to the proposed class of plaintiffs. This was a material fact of which prospective borrowers would want to be informed prior to making a decis ion to enter into a loan transaction secured by their home. Plaintiffs in this case would not have considered borrowing money on a home loan from a business that was operating illegally and without the proper licensure. Plaintiff would have gone to any le gal lender had they known that [North American] was operating illegally and without oversight from the regulatory authorities responsible for supervising the activities of licensed lenders.”6

reliance. ( Ibid., quoting In re Tobacco II Cases (2009) 46 Cal.4th 298, 327.) And materiali ty is a question of fact not generally subject to resolution on demurrer. (See, e.g., Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 977, citing Rest. 2d Torts, § 538, com. e, p. 82.) Second, even if reliance were not implicit in the al legation of a material omission, the plaintiffs here did allege they relied on North American’s failure to disclose its unlicensed lending status by pleading that they would not have entered into the loan transaction had they known North American was unlic ensed. 6 (Cf. Moore v. California State Bd. of Accountancy (1992) 2 Cal.4th 999, 1019 [the public reasonably assumes that individuals holding themselves out as “accountants” were licensed as such in the absence of a disclosure to the contrary].) C

Finall y, plaintiffs here allege more than simply a deceptive business practice within the meaning of section 17200. They also allege that apart from what it represented or failed to disclose, North American committed an

6 Reliance on a misrepresentation or material omission is typi cally pleaded as plaintiffs have done here

— through an allegation that they would not have acted in the way they did (i.e., would not have hired the defendant, would not have purchased the defendant’s product, would not have entered into a contract with the defendant, etc.)

— in the absence of the misrepresentation or material omission. (See, e.g., Torres v. Adventist Health System/West (2022) 77 Cal.App.5th 500, 513 [reliance properly alleged if the complaint asserts “plaintiff would not have acted as he or she did without the misrepresentation or the omission of fact”].) In fact, the reliance element of a claim for fraudulent concealment

— a claim of fraud when a party is obligated to disclose a fact but intentionally conceals or suppresses it

— has been stated in precisely the same way: “ the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact .” ( Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606, italics added.)7

unlawful business practice when it made a home loan without the proper license. (See Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 604, fn. 10 [approving allegation of unlawful business practice for “[t]ransacting insurance without a license”].) As the Supreme Court has repeatedly emphas ized, an “unlawful” business practice under section 17200 includes “anything that can properly be called a business practice and that at the same time is forbidden by law.” ( Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 113; Bank of the West v . Superior Court (1992) 2 Cal.4th 1254, 1266; Kwikset, supra, 50 Cal.4th at p. 320.) Here, making unlicensed loans is an unlawful business practice under this broad definition. And again, I read Kwikset as saying that UCL plaintiffs properly plead standi ng

— economic injury and causation

— if they allege they would not have entered into the challenged transaction but for the actionable business practice about which they complain. I would reverse the judgment with directions to overrule the demurrer
as to the first and second causes of action alleging violations of the UCL.

DATO, J.