1

Filed 10/28/22 Weimer v. Nationstar Mortgage CA3

NOT TO BE PUBLISHED

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 This opinion has not been certified for publication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

THIRD APPELLATE DISTRICT

(Placer)

----

ROBERT WEIMER, JR.,

Plaintiff and Appellant,

v.

NATIONSTAR MORTGAGE, LLC et al.,

Defendants and Respondents.

C080550

(Super. Ct. No. SCV0035286)

OPINION ON TRANSFER

This case returns to us from our Supreme Court.

Plaintiff Robert Weimer, Jr., purchased real property in Carnelian Bay in 1993. 

He refinanced the mortgage in 2006 with a loan from defendant Bank of America, N.A. 

(BANA). After defaulting, plaintiff entered into a loan modification process with 

BANA. Subsequently, loan servicing was transferred, successively, to defendants 

Specialized Loan Servicing, LLC (SLS) and Nationstar Mortgage, LLC (Nationstar). 

According to plaintiff, BANA, SLS, and Nationstar successively each engaged in 

deliberate and negligent misconduct in the loan modification process. In 2014, BANA 
2

transferred beneficial interest in the loan to defendant U.S. Bank, N.A. (U.S. Bank), as 

trustee for the certificate holders of Banc of America Funding Corporation Mortgage Pass 

Through Certificates Series 2007-7. Eventually, Nationstar, acting as U.S. Bank’s agent, 

recorded a notice of trustee’s sale and had an agent enter onto the property and change 

the locks.

After plaintiff commenced this action, BANA, U.S. Bank, and Nationstar 

demurred to the first amended complaint. The trial court sustained the demurrer without 

leave to amend as to BANA, concluding that the action against it was time-barred. As to 

the other demurring defendants, the court sustained the demurrer with leave to amend. 

Plaintiff filed a second amended complaint, asserting causes of action sounding in 

intentional and negligent misrepresentation, negligence, trespass to land, seeking 

declaratory relief, and asserting violations of the unfair competition law (Bus. & Prof. 

Code, § 17200 et seq.). U.S. Bank and Nationstar demurred, SLS separately demurred, 

and the trial court sustained the demurrers without leave to amend.

On appeal,1 plaintiff asserted that the trial court erred in concluding the action 

against BANA was time-barred because BANA’s actions were part of a civil conspiracy 

1

 Plaintiff separately appealed from two judgments. One judgment dismissed the action 

as asserted against SLS. The other judgment identified U.S. Bank, Nationstar, and, 

erroneously, BANA, as having successfully demurred to the second amended complaint,

and ordered “these Defendants . . . dismissed from this case with prejudice.” A judgment 

of dismissal following BANA’s successful demurrer to the first amended complaint does 

not appear in the record, and plaintiff has not appealed from any such judgment. 

“An order sustaining a demurrer is usually not immediately appealable, because it is not 

on its face a final judgment. [Citation.] However, it may be treated as a judgment for 

purposes of appeal when, like a formal judgment, it disposes of the action and precludes 

further proceedings.” (Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 

1098.) “[A]n appellate court may deem an order sustaining a demurrer to incorporate a 

judgment of dismissal.” (Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 

920, disapproved on another ground in Burgess v. Superior Court (1992) 2 Cal.4th 1064, 

1074.) Here, the order sustaining BANA’s demurrer to the first amended complaint 
3

with the other defendants, and the timeliness of plaintiff’s action against BANA must be 

measured from the last overt act. Plaintiff further asserted that the trial court erred in 

sustaining the demurrers to the second amended complaint because he sufficiently stated 

each cause of action. Plaintiff also asserted that the trial court should have granted him 

leave to amend, however, he largely maintained that his complaint required no 

amendment. 

In April 2020, a different panel of this court issued an opinion that was published 

in part. In the unpublished portion of the opinion, we concluded that the action as 

asserted against BANA was time-barred. We further concluded that plaintiff sufficiently 

stated causes of action sounding in intentional and negligent misrepresentation and 

violations of the unfair competition law against the remaining defendants--U.S. Bank, 

SLS, and Nationstar. In the published portion of the opinion, based on the test in 

Biakanja v. Irving (1958) 49 Cal.2d 647 and the analysis in Southern California Gas 

Leak Cases (2019) 7 Cal.5th 381 at page 397 (Gas Leak), we concluded that the 

remaining defendants had a duty of care, and that plaintiff sufficiently stated a cause of 

action for negligence against them.

Therefore, we reversed the judgments of dismissal as to U.S. Bank, SLS, and 

Nationstar and reversed the orders sustaining the demurrers as to the causes of action in 

the second amended complaint for intentional misrepresentation (first cause of action), 

negligent misrepresentation (second cause of action), negligence (third cause of action), 

and violations of the unfair competition law (sixth cause of action). In all other respects, 

we affirmed the judgments. In July 2020, our Supreme Court granted review and 

without leave to amend ended plaintiff’s ability to proceed further in the trial court with 

his case against BANA. The only step left to make that order appealable as to BANA 

was the formal entry of a dismissal order or judgment. BANA did not seek dismissal of 

the appeal. We therefore deemed the order on the demurrer to the first amended 

complaint to incorporate a judgment of dismissal as to BANA and reviewed the order. 

(See Sisemore v. Master Financial, Inc. (2007) 151 Cal.App.4th 1386, 1396.)
4

deferred further action pending consideration and disposition of a related issue in 

Sheen v. Wells Fargo, N.A., S258019, or further order of the court. 

In July 2022, the Supreme Court transferred the matter to this court with directions 

to vacate our prior opinion and reconsider the cause in light of Sheen v. Wells Fargo 

Bank, N.A. (2022) 12 Cal.5th 905 (Sheen). In that case, our high court addressed an issue 

that had divided the lower courts: “Does a lender owe the borrower a tort duty sounding 

in general negligence principles to . . . ‘process, review and respond carefully and 

completely to [a borrower’s] loan modification application,’ such that upon a breach of 

this duty the lender may be liable for the borrower’s economic losses—i.e., pecuniary 

losses unaccompanied by property damage or personal injury?” (Id. at p. 915.) The 

Sheen court concluded that there is “no such duty.” (Ibid.) 

In August 2022, we vacated our prior opinion and obtained supplemental briefs 

from the parties. The parties waived argument.

As we shall explain, we reach the same conclusions we reached in our prior 

opinion, with one exception. In light of Sheen, we now conclude that the second 

amended complaint does not state a negligence cause of action against U.S. Bank, SLS, 

or Nationstar. Thus, we will affirm the order on the demurrer to the first amended 

complaint that we deem to incorporate a judgment of dismissal as to BANA. We will 

reverse the judgments of dismissal in favor of U.S. Bank, SLS, and Nationstar. The 

orders sustaining the demurrers to the second amended complaint are affirmed in part and 

reversed in part. The orders are reversed as to the causes of action for intentional 

misrepresentation (first cause of action) and negligent misrepresentation (second cause of 

action) insofar as asserted against U.S. Bank and Nationstar, and as to the causes of 

action for violations of the unfair competition law (sixth cause of action) insofar as 

asserted against U.S. Bank, SLS, and Nationstar. In all other respects, we will affirm the 

judgments.
5

FACTUAL AND PROCEDURAL BACKGROUND

The following is taken from our prior opinion. (See Weimer v. Nationstar 

Mortgage LLC (2020) 47 Cal.App.5th 341, judg. vacated and cause remanded for further 

consideration in light of Sheen, supra, 12 Cal.5th 905.) 

Plaintiff purchased the subject property in Carnelian Bay in or about 1993 and 

alleged that he “maintained it as one of his principal residences.” He refinanced the 

mortgage on the property on or about May 25, 2006,2 with a loan from BANA. Plaintiff 

alleged that, in or about January 2008, BANA froze his bank accounts, and, as a result, he 

was not able to pay his mortgage payments for approximately three months. 

Additionally, BANA cancelled plaintiff’s line of credit for unknown reasons, which 

negatively affected his credit score. Plaintiff alleged that he never found out why BANA 

froze his accounts and cancelled his line of credit.

As a result of his delinquency, plaintiff entered into a loan modification process 

with BANA. In or about mid-2009, an agent, employee, or representative of BANA told 

plaintiff that he was approved for a loan modification that would reduce his monthly 

payments to $8,000 per month, reduce and fix his interest rate, and “reduce his principal” 

by $500,000. BANA required plaintiff to make a down payment of $50,000 to secure the 

loan modification, and, once it received that payment, it would halt the foreclosure sale. 

Plaintiff asserted that his wife sent BANA a check for $50,000.3 However, the 

2

 The complaint states that plaintiff refinanced with BANA in 2007. However, in his 

brief on appeal, plaintiff represented that this was error, and that he “would amend this 

allegation to include the correct year of 2006.” Whether plaintiff refinanced with BANA 

in 2006 or 2007 is immaterial to this appeal. 

3

 Defendants filed a request that we take judicial notice of a memorandum of authorities 

filed in federal district court by plaintiff in an unrelated case which, according to 

defendants, would be relevant to prove that it was someone other than plaintiff’s wife 

who tendered the $50,000 payment. We deny defendants’ request for judicial notice on 

the ground that the identity of the individual who tendered the $50,000 payment on 
6

foreclosure sale was not postponed, and plaintiff “was forced to file a chapter 11 

bankruptcy to stop the foreclosure sale.” BANA did not furnish the loan modification.

In or about early 2010, servicing of the loan was transferred from BANA to SLS. 

Plaintiff alleged that SLS notified him that it would take over for BANA in handling his 

loan modification application.4 From early 2010 through January 2014, plaintiff 

attempted to obtain a permanent loan modification from SLS. However, during this time 

period, SLS “refused to honor the terms of the loan modification promised by” BANA, 

notwithstanding the one-time $50,000 payment. Plaintiff repeatedly submitted identical 

and updated loan modification applications and documents to SLS. Often, plaintiff was 

told that the documents were not received despite plaintiff having sent them directly to 

the addresses and individuals specified by SLS. Plaintiff alleged that SLS mishandled or 

lost the applications and documents. SLS continued to represent to plaintiff that he 

would be approved for a loan modification with terms similar to those previously offered 

by BANA. Meanwhile, “[a]s a result,” plaintiff continued to accumulate arrears, 

penalties, and fees, and his credit continued to suffer. Additionally, plaintiff expended 

time, money, and effort in his attempts to obtain the loan modification. 

plaintiff’s behalf is not relevant to any of the issues we must resolve on appeal. (See 

Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063 [matter to be 

judicially noticed must be relevant to a material issue].)

4

 The complaint does not state whether SLS volunteered to plaintiff that it would take 

over the loan modification process or whether it so informed plaintiff in response to an 

inquiry by plaintiff. The complaint alleges: “In or about early 2010, the servicing rights 

of the Subject Loan were transferred from [BANA] to SLS. SLS informed Plaintiff that 

they would take over for [BANA] in handling Plaintiffs’ loan modification application. 

[¶] As a result, Plaintiff renewed his attempts to obtain a loan modification from SLS.” 

Reading the language of the complaint liberally (see Longshore v. County of Ventura

(1979) 25 Cal.3d 14, 22 (Longshore), we assume SLS voluntarily notified plaintiff that it 

would take over the modification process without an inquiry by plaintiff.
7

On or about April 1, 2014, servicing of the loan was transferred from SLS to 

Nationstar. Nationstar informed plaintiff that, as a result of the transfer, he would have to 

begin the loan modification application process anew.5 Nationstar refused to honor 

BANA’s “previous representation of a permanent loan modification.” Plaintiff once 

again had to submit the same applications and documents on multiple occasions, and was 

told to send them to locations in Arizona, Texas, and California. A named employee or 

agent of Nationstar told plaintiff that he was being evaluated for a Home Affordable 

Modification Program (HAMP) loan modification, sent him the application, and told him 

to complete it and submit it along with supporting documents.6 Thus, according to the 

complaint, Nationstar “represented and led Plaintiff to believe that he was eligible to 

apply for and receive a HAMP loan modification.” However, plaintiff could not qualify 

for a HAMP loan modification because his loan, at $2,000,000, was well above the 

applicable maximum of $729,750. Plaintiff alleged that Nationstar was aware of this. 

According to plaintiff, Nationstar had him apply for a HAMP loan modification “so 

Plaintiff would maintain his delinquency and Nationstar would retain its status as a 

5

 Similar to SLS, the complaint does not specify whether plaintiff was informed by 

Nationstar that it would take over the modification process because he inquired or 

whether SLS or Nationstar so informed plaintiff without an inquiry by plaintiff. The 

complaint alleged: “On or about April 1, 2014, the servicing rights of the Subject 

Property were transferred to Nationstar. [¶] At the time the transfer [from SLS to 

Nationstar] occurred Plaintiff was in the middle of applying for a loan modification with 

SLS. Nationstar informed Plaintiff that as a result of the transfer he would have to start 

the loan modification process over again.” (Capitalization omitted.)

6

 “ ‘[T]he United States Department of the Treasury implemented the Home Affordable 

[Modification] Program (HAMP) to help homeowners avoid foreclosure during the 

housing market crisis of 2008. “The goal of HAMP is to provide relief to borrowers who 

have defaulted on their mortgage payments or who are likely to default by reducing 

mortgage payments to sustainable levels, without discharging any of the underlying 

debt.” ’ ” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 56, fn. 

1 (Lueras).)
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‘special servicer’ for servicing a delinquent account and would enable it to collect 

additional fees for servicing a delinquent loan.” (Capitalization omitted.) In the 

alternative, plaintiff asserted that Nationstar acted unreasonably in evaluating him for a 

loan modification for which he was not qualified. Plaintiff asserted that, like the 

servicers before it, Nationstar lost or misplaced plaintiff’s applications and documents. 

According to plaintiff, “[o]n or about, June 23, 2014, an Assignment of Deed of 

Trust was effectuated whereby [BANA] transferred its purported beneficial interest under 

the Deed of Trust to the U.S. Bank securitized trust.”7

On or about August 15, 2014, Nationstar hired Cyprexx to enter the subject 

property and change the locks. Plaintiff learned of this development after a notice was 

placed on his door. Plaintiff contacted Cyprexx, and a named representative told him that 

Nationstar had hired Cyprexx to secure and winterize the premises. Plaintiff alleged that 

Nationstar and Cyprexx knew plaintiff was still occupying the home. Plaintiff reentered 

the property, installed new locks, and directed a caretaker to maintain the property while 

he was out of town on business. 

Plaintiff alleged that defendants’ actions constituted a continuing conspiracy to 

defraud and take advantage, and, therefore, the statute of limitations should be tolled until 

completion of the last overt act. Plaintiff further alleged that it was defendants’ plan to 

engage him in the loan modification process, with no intent to grant his loan modification 

applications, so that they could obtain additional compensation for servicing a delinquent 

mortgage account and collect additional fees for every loan modification application he 

submitted.8

7

 Plaintiff asserted that this assignment and transfer was void ab initio but has since 

abandoned that claim.

8

 Thus, contrary to the contention of defendants’ counsel at oral argument before this 

court, reading the language of the complaint liberally (see Longshore, supra, 25 Cal.3d at 
9

In a first amended complaint, plaintiff asserted eight causes of action against 

defendants: (1) intentional misrepresentation, (2) negligent misrepresentation, (3) 

promissory estoppel, (4) breach of contract, (5) negligence, (6) trespass to land, (7) 

declaratory relief, and (8) violation of Business and Professions Code section 17200. 

Defendants Nationstar, BANA, and U.S. Bank demurred to the first amended 

complaint. They asserted, among other things, that plaintiff’s claims against BANA were 

all time-barred, and that, as to U.S. Bank and Nationstar, plaintiff failed to adequately 

state claims as to each cause of action. Defendants also requested that the trial court take 

judicial notice of certain documents and instruments, including several documents related 

to plaintiff’s bankruptcy. Plaintiff filed his own request for judicial notice. 

The trial court granted the requests for judicial notice. The trial court then 

sustained defendants’ demurrer to the first amended complaint. The court stated that the 

“conclusory and overlapping allegations in the [first amended complaint] focus primarily 

upon the purported wrongful actions and conduct of defendant [BANA], which are 

followed by further conclusory allegations based primarily upon [BANA’s] actions that 

plaintiff purports are attributable to defendants Nationstar and SLS. It is this deficient 

pleading that subjects plaintiff’s [first amended complaint] to successful challenge by 

defendants in light of the prior bankruptcy. [Citations.] This same deficient pleading 

also subjects the [first amended complaint] to challenge based upon judicial estoppel. 

[Citation.] Even if the court were to accept the contentions made by plaintiff, which it 

does not, the eight causes of action are simply pled in too conclusory a manner to support 

the claims asserted against the moving defendants. Furthermore, the causes of action 

p. 22), it does allege that defendants sought to collect application fees for each loan 

modification application submitted, and it could be inferred that such fees were collected. 

Whether plaintiff could prove this allegation, or whether the collection of fees with each 

loan modification application is “prohibited by law” as asserted by defendants’ counsel at 

oral argument, is immaterial here.
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alleged against defendant [BANA] . . . are barred in light of the applicable statutes of 

limitations. It is for these reasons that the demurrer is sustained.” The court sustained 

the demurrer with leave to amend as to defendants U.S. Bank and Nationstar, finding 

that, although the allegations were conclusory and failed to support plaintiff’s claims, 

plaintiff presented a sufficient showing of his ability to cure the defects but sustained the 

demurrer without leave to amend as to BANA given that the time-barred nature of those 

causes of action could not be cured by amendment. 

Plaintiff then filed a second amended complaint, asserting six causes of action as 

to U.S. Bank, SLS, and Nationstar: (1) intentional misrepresentation, (2) negligent 

misrepresentation, (3) negligence, (4) trespass to land, (5) declaratory relief, and (6) 

violation of Business and Professions Code section 17200. Plaintiff abandoned his 

promissory estoppel and breach of contract causes of action. 

U.S. Bank and Nationstar demurred to the second amended complaint on the same 

grounds asserted in their first demurrer. Again, these defendants filed a request for 

judicial notice. The trial court granted the request for judicial notice and sustained the 

demurrer without leave to amend, concluding that plaintiff’s allegations were insufficient 

to state causes of action. The court entered judgment in favor of BANA, U.S. Bank, and 

Nationstar, dismissing the action insofar as asserted against them. 

SLS filed its own demurrer to the second amended complaint and a request for 

judicial notice. The trial court sustained the demurrer, dismissed the second amended 

complaint as asserted against SLS without leave to amend, and entered judgment.

DISCUSSION

I

Standard of Review

A demurrer tests the sufficiency of the complaint as a matter of law, and it raises 

only questions of law. (Code Civ. Proc., § 589, subd. (a).) “We review a trial court’s 

decision to sustain a demurrer for an abuse of discretion.” (Zipperer v. County of Santa 
11

Clara (2005) 133 Cal.App.4th 1014, 1019.) “ ‘ “ ‘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.” ’ ” (Finch Aerospace Corp. v. City of San Diego (2017) 8 

Cal.App.5th 1248, 1251-1252.) “[T]he complaint must be liberally construed and 

survives a general demurrer insofar as it states, however inartfully, facts disclosing some 

right to relief.” (Longshore, supra, 25 Cal.3d at p. 22; see also Daniels v. Select Portfolio 

Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1162 (Daniels) [we decide “whether a 

cause of action has been stated under any legal theory when the allegations are liberally 

construed”], disapproved of on another ground in Sheen, supra, 12 Cal.5th at p. 948, fn. 

12.) “In reviewing an order sustaining a demurrer, we examine the operative complaint 

de novo to determine whether it alleges facts sufficient to state a cause of action under 

any legal theory. [Citation.] Where the demurrer was sustained without leave to amend, 

we consider whether the plaintiff could cure the defect by an amendment. The plaintiff 

bears the burden of proving an amendment could cure the defect.” (T.H. v. Novartis 

Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 162.)

II

The Action Against BANA

A. Statutes of Limitations and Commencement of this Action

“The statute of limitations to be applied in a particular case is determined by the 

nature of the right sued upon or the principal purpose of the action, not by the form of the 

action or the relief requested.” (Barton v. New United Motor Manufacturing, Inc. (1996) 

43 Cal.App.4th 1200, 1207, citing Davies v. Krasna (1975) 14 Cal.3d 502, 515 & 

Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 718.) “What is significant for statute 

of limitations purposes is the primary interest invaded by defendant’s wrongful conduct.” 
12

(Barton, at p. 1207.) BANA acknowledges that the applicable limitations periods here 

were up to four years.9

The claims plaintiff asserted against BANA, all arising out of the handling and 

processing of plaintiff’s loan modification, were based on actions taken by BANA prior 

to “early 2010,” when “servicing rights of the Subject Loan were transferred from 

[BANA] to SLS,” at which time “SLS informed Plaintiff that they would take over for 

[BANA] in handling Plaintiff’s loan modification application.” Plaintiff commenced this 

action by filing the summons and complaint in October 2014. Thus, without resorting to 

a theory of civil conspiracy and the last overt act doctrine, plaintiff’s action asserted 

against BANA would be time-barred based on a four-year limitations period, the longest 

of the applicable statutes of limitations.10

9

 See Code of Civil Procedure section 337, subdivision (a), providing that the statute of 

limitations for an action on any contract founded on an instrument in writing is four years 

and Business and Professions Code section 17208, providing that the limitations period 

for unfair and unlawful business practices is four years. “The duration of the limitations 

period applicable to a declaratory relief action is determined by the nature of the 

underlying obligation sought to be adjudicated.” (Snyder v. California Ins. Guarantee 

Assn. (2014) 229 Cal.App.4th 1196, 1208; see also Code Civ. Proc., § 338, subd. (d) 

[limitations period for cause of action sounding in intentional misrepresentation is three 

years]; Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 

115 Cal.App.4th 1145, 1155, citing Code Civ. Proc., § 339 [cause of action for negligent 

misrepresentation governed by two-year statute of limitations where allegations amount 

to a claim of professional negligence]; Newport Harbor Ventures, LLC v. Morris Cerullo 

World Evangelism (2016) 6 Cal.App.5th 1207, 1224 and fn. 5, affirmed (2018) 4 Cal.5th 

637, citing Code Civ. Proc., § 339, subd. (1) [statute of limitations for promissory 

estoppel based on oral promises is two years]; Hydro-Mill, at p. 1154 [claim based on 

professional negligence governed by two-year statute of limitations set forth in Code Civ. 

Proc., § 339, subd. (1)].)

10

 The declaratory relief cause of action in the first amended complaint was the only 

cause of action arguably not premised on the handling of the loan modification process. 

However, as to BANA, plaintiff only alleged that it had no right to service or administer 

the loan because the transfer of the beneficial interest in the loan from BANA to U.S. 
13

B. Plaintiff’s Contentions, Civil Conspiracy, and the Last Overt Act Doctrine

Plaintiff alleged that the action against BANA was not time-barred because 

BANA was part of an ongoing civil conspiracy among defendants. Plaintiff asserts that, 

under a civil conspiracy theory, the statute of limitations does not begin to run until the 

last overt act. Plaintiff maintains that the recording of the Notice of Trustee’s Sale in 

August 2014 should be deemed the last overt act, and, therefore, this action insofar as 

asserted against BANA was not time-barred. 

“Proof of a civil conspiracy triggers the ‘last overt act’ doctrine.” (People ex rel. 

Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal.App.4th 102, 138.) “[W]hen a 

civil conspiracy is properly alleged and proved, the statute of limitations does not begin 

to run on any part of a plaintiff’s claims until the ‘last overt act’ pursuant to the 

conspiracy has been completed.” (Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 

786.) Thus, we must determine whether the complaint sufficiently alleged a conspiracy 

between defendants.

C. Analysis

In the first amended complaint, under the subheading, “Tolling of the Statute of 

Limitations,” plaintiff alleged, in pertinent part: “Plaintiff alleges that Defendants’ 

actions constitute a continuing conspiracy to defraud and take advantage of Defendants 

[sic] and as such, the statute of limitations should be tolled until the completion of the last 

overt act. Plaintiff alleges that none of the Defendants actually had the intent to grant 

him a loan modification and that it was Defendants’ plan to engage Plaintiff in the loan 

modification process because they were able to obtain additional compensation for 

servicing a delinquent mortgage account as well as collect additional fees for every loan 

modification application Plaintiff submitted.” 

Bank was void ab initio. As set forth ante, any contentions concerning BANA’s 

servicing of the loan, which ceased in early 2010, are time-barred.
14

Plaintiff further alleged that he was not knowledgeable in matters pertaining to the 

mortgage or banking industries, that the facts constituting defendants’ fraudulent and 

illegal activities were purposely hidden from him, and that he did not become aware of 

the extent of defendants’ fraudulent and illegal conduct until he retained counsel in 

August 2014. Plaintiff asserts that each subsequent cause of action incorporated these 

allegations. We agree with defendants that plaintiff has offered only conclusory 

assertions of a conspiracy, rather than alleging any facts that could establish the existence 

of a conspiracy. In Daniels, supra, 246 Cal.App.4th 1150, the plaintiffs purported to 

assert a cause of action for civil conspiracy “in which they allege respondents ‘conspired’ 

to ‘deceive and defraud’ them into participating in the loan modification process.” (Id. at 

p. 1172.) The Daniels court considered “whether appellants adequately allege[d] that 

[BANA’s] misrepresentations were made pursuant to an agreement among [BANA], U.S. 

Bank, SPS, and ReconTrust to defraud appellants” (id. at p. 1173), essentially the same 

question we must answer in relation to defendants in the instant action for purposes of 

making our determination as to whether the action against BANA is time-barred. As 

defendants emphasize, the Daniels court concluded: “Appellants’ conspiracy allegations 

are too conclusory. As to the first element, they allege respondents ‘agree[d] . . . to 

deceive [appellants] into participating in the loan modification processes.’ There are no 

factual allegations about the nature of that agreement. Critically, appellants do not allege 

that respondents agreed to defraud them before the alleged misrepresentations were made 

(between 2009 and June 2012). Nor can we reasonably infer from the facts alleged that 

respondents agreed to defraud appellants before the misrepresentations were made, since 

appellants allege SPS did not become their loan servicer until December 1, 2012 and 

ReconTrust did not become trustee until August 2012. For these reasons, we conclude 

the trial court did not err in sustaining SPS and U.S. Bank’s demurrer as to the civil 

conspiracy cause of action without leave to amend, nor in granting [BANA] and 
15

ReconTrust’s motion for judgment on the pleadings without leave to amend as to that 

claim.” (Ibid.)

Similarly, we conclude here that plaintiff’s allegations of a civil conspiracy are too 

conclusory. Like in Daniels, plaintiff merely asserted that defendants were involved in a 

conspiracy to defraud him and asserted that “it was Defendants’ plan to engage Plaintiff 

in the loan modification process because they were able to obtain additional 

compensation for servicing a delinquent mortgage account as well as collect additional 

fees for every loan modification application Plaintiff submitted.” As in Daniels, plaintiff 

offered no factual allegations about the nature of the alleged conspiracy. (Daniels, supra, 

246 Cal.App.4th at p. 1173.) Also like in Daniels, plaintiff does not, and it appears he 

cannot, allege that BANA and its codefendants agreed to defraud plaintiff before or at the 

time any of BANA’s misrepresentations were made, all prior to early 2010, during which 

time BANA remained the servicer of the loan. And, like in Daniels, we cannot infer that 

defendants, including BANA, agreed to defraud plaintiff before such alleged 

misrepresentations were made because SLS did not begin servicing the loan until 2010, 

and Nationstar did not begin servicing the loan until 2014. There are no allegations that 

SLS or Nationstar were involved in any way with plaintiff’s loan until those dates, and 

there are no factual allegations addressing a civil conspiracy during those times in 

question. SLS and Nationstar were not alleged to have any connection to plaintiff’s loan 

so as to be coconspirators with BANA at the relevant times. 

In his reply brief, plaintiff relies on AREI II Cases (2013) 216 Cal.App.4th 1004. 

In that case, the court stated: “It is well settled that ‘ “[b]are” allegations and “rank” 

conjecture do not suffice for a civil conspiracy.’ [Citation.] A party seeking to establish 

a civil conspiracy ‘must show that each member of the conspiracy acted in concert and 

came to a mutual understanding to accomplish a common and unlawful plan, and that one 

or more of them committed an overt act to further it. [Citation.] It is not enough that the 

[conspirators] knew of an intended wrongful act, they must agree—expressly or tacitly—
16

to achieve it.’ [Citation.] It must be recognized, however, that because of the very nature 

of a conspiracy, ‘its existence must often be inferentially and circumstantially derived 

from the character of the acts done, the relations of the parties and other facts and 

circumstances suggestive of concerted action.’ [Citation.] While a complaint must 

contain more than a bare allegation the defendants conspired, a complaint is sufficient if 

it apprises the defendant of the ‘character and type of facts and circumstances upon which 

she was relying to establish the conspiracy.’ ” (AREI II Cases, at p. 1022.) However, 

here plaintiff has not pleaded facts and circumstances supporting the existence of a 

conspiracy.

In his reply brief, plaintiff belatedly asserts that he does not rely only on the loan 

servicers as coconspirators, but also on U.S. Bank. He argues: “[T]he conduct of all 

servicers was directed by the purported owner of the Subject Loan,” U.S. Bank, and that 

“U.S. Bank controlled all of the loan servicers who serviced the Subject Loan.” Plaintiff 

asserts that “the conspiracy could reasonably [be] inferred as between each servicer and 

U.S. Bank, without the need for separate conspiracy analyses.” 

Where a plaintiff fails to show how the complaint can be amended in their opening 

brief, we may properly regard any belated proposed amendments offered in the plaintiff’s 

reply brief as forfeited. (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 52, 56 

[rejecting points raised for the first time in reply brief on appeal without good cause in 

reviewing trial court’s ruling sustaining a demurrer without leave to amend].) “ ‘Obvious 

considerations of fairness in argument demand that the appellant present all of [their] 

points in the opening brief. To withhold a point until the closing brief would deprive the 

respondent of [their] opportunity to answer it or require the effort and delay of an 

additional brief by permission. Hence the rule is that points raised in the reply brief for 

the first time will not be considered, unless good reason is shown for failure to present

them before.’ ” (Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764, quoting 

Neighbours v. Buzz Oates Enterprises (1990) 217 Cal.App.3d 325, 335, fn. 8; see also 
17

Simpson v. The Kroger Corp. (2013) 219 Cal.App.4th 1352, 1370 [“Raising a new theory 

in a reply brief is improper and unfair to defendants. We may decline to consider an 

argument raised for the first time in a reply brief if no good reason is demonstrated for 

the delay in raising the point”].) But even if we considered this argument, we would 

conclude that these allegations are insufficient.

In the paragraphs of the first amended complaint to which plaintiff cites for these 

propositions in his reply brief, he merely asserted that an agency agreement existed 

between U.S. Bank and the servicers; “U.S. BANK and Servicers regularly engaged in 

business with each other”; an agency relationship existed in which U.S. Bank directed 

Nationstar’s conduct; U.S. Bank’s control over Nationstar was pursuant to contract, was 

comprehensive, and U.S. Bank “directed the conduct of NATIONSTAR throughout the 

modification process”; and that “upon information and belief, Plaintiff alleges that 

because [BANA]/NATIONSTAR/SLS were acting as servicers and agents of U.S. 

BANK, U.S. BANK as principal is liable for all other acts complained of by Plaintiff.” 

These allegations remain insufficient to allow us to infer a civil conspiracy implicating 

BANA of the sort plaintiff advances here.

Further, according to plaintiff’s allegations, U.S. Bank did not acquire its 

beneficial interest in the loan until BANA’s assignment to U.S. Bank in June 2014. 

Plaintiff alleged that, “[o]n or about, June 23, 2014, an Assignment of Deed of Trust was 

effectuated whereby [BANA] transferred its purported beneficial interest under the Deed 

of Trust to the U.S. Bank securitized trust.” Assuming this factual allegation to be true, 

U.S. Bank could not have conspired with BANA or SLS with regard to the servicing of 

the loan, as those entities ceased servicing the loan prior to June 2014.11

11

 We note here that plaintiff does not offer any allegations involving an alleged 

conspiracy between BANA and U.S. Bank in connection with the transfer of the 

beneficial interest in the loan from BANA to U.S. Bank, but instead limits his conspiracy 
18

Plaintiff offers in a footnote in his reply brief: “Appellant now realizes that only 

Nationstar is singled out under some of the allegations in the agency section of the [first 

amended complaint]. This was inadvertent as the allegations apply to both BANA and 

SLS, as well.” It is not clear to us, however, that this allegation was, in fact, erroneous or 

inadvertent. According to plaintiff’s pleadings, U.S. Bank acquired its beneficial interest 

in the loan after Nationstar became the servicer of the loan, after BANA and SLS had 

long since ceased functioning in that role. Assuming that factual allegation to be true, 

plaintiff’s original allegations “singl[ing] out” Nationstar make sense; no entity other 

than Nationstar serviced the loan at the time of and following U.S. Bank’s acquisition of 

its beneficial interest in the loan. 

Also in his reply brief, plaintiff, in effect, offers to change his theory relative to 

BANA. For the first time, plaintiff asserts that BANA retained an ownership interest 

under the deed of trust until June 2014. He cites the allegation in his first amended 

complaint in which he alleged that, on June 23, 2014, BANA “transferred its purported 

beneficial interest under the Deed of Trust to the U.S. BANK securitized trust.” He 

asserts that the first amended complaint alleges that BANA still had an ownership interest 

in the loan as of mid-2014 and the first amended complaint “does not give rise to the 

inference that BANA’s role in the Subject Loan ended in or about early 2010, when SLS 

took over the servicing.” From this, plaintiff implies that any action against BANA is not 

time-barred. He also asserts he should have been granted leave to amend the first 

amended complaint insofar as asserted against BANA, and “requests that the trial court’s 

ruling on BANA’s demurrer to the [first amended complaint] be overruled as to his first 

cause of action for intentional misrepresentation.” Having raised these arguments for the 

allegations to the servicing of the loan and the loan modification process. Nor does 

plaintiff assert any factual allegations to the effect that BANA, as beneficial owner of the 

loan as opposed to loan servicer, directed the actions of SLS or Nationstar in servicing 

the loan in the furtherance of any conspiracy.
19

first time in his reply brief on appeal, plaintiff has forfeited these issues, as well as any 

new theories or proposed amendments. (Allen v. City of Sacramento, supra, 234 

Cal.App.4th at pp. 52, 56; Simpson v. The Kroger Corp., supra, 219 Cal.App.4th at p. 

1370.) We conclude the trial court properly sustained BANA’s demurrer to the first 

amended complaint without leave to amend because the action insofar as asserted against 

BANA was time-barred.

III

The Action Against U.S. Bank, SLS, and Nationstar12

A. Intentional and Negligent Misrepresentation--Nationstar and U.S. Bank13

1. Plaintiff’s Contentions

Plaintiff asserts that the trial court’s reasoning in sustaining the demurrers as to his 

misrepresentation claims “was misguided and [plaintiff] should have been given leave to 

amend his” second amended complaint. The thrust of his misrepresentation claims is that 

defendants never intended to grant him a loan modification, “and that nullified the 

possibility that they would ever review his modification application in good faith.” 

Plaintiff further asserts that defendants had their representatives make statements to him 

to imply that further action on his part was necessary to “get the modification process 

back on track” and had defendants notified him earlier that he could not qualify for a loan 

modification, he would have “pursued other options.” Plaintiff asserts that the fact that 

he “was solicited to apply for a loan modification program (HAMP) that he never could 

have qualified for is definitively a material misrepresentation.” Because his loan was too 

12

 Plaintiff does not challenge the trial court’s ruling as to his declaratory relief cause of 

action.

13

 The first and second causes of action in the second amended complaint are expressly 

asserted against Nationstar, U.S. Bank, and Does 1-50 only. These causes of action are 

not asserted against SLS. Plaintiff specifically alleges that Nationstar and its agents made 

the intentional and negligent misrepresentations alleged. Thus, we consider these two 

causes of action on appeal only as asserted against Nationstar and U.S. Bank.
20

large to qualify for HAMP, plaintiff asserts that he “was either fraudulently or negligently 

enticed into applying for a HAMP loan modification that he could not have, under any 

circumstances, qualified for. Accordingly, this misrepresentation was a material 

misrepresentation.” Plaintiff further asserts that he relied on defendants’ 

misrepresentations to his detriment. He asserts that he sustained damages in the form of 

damage to his credit, increased interest and arrears, lost opportunity for alternatives to 

foreclosure, and lost time, energy, and effort.

2. Elements and Pleading of Intentional and Negligent Misrepresentation

“The essential elements of . . . intentional misrepresentation are (1) a 

misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and 

justifiable reliance, and (5) resulting damage. [Citations.] The essential elements of . . . 

negligent misrepresentation are the same except that it does not require knowledge of 

falsity but instead requires a misrepresentation of fact by a person who has no reasonable 

grounds for believing it to be true.” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 

230-231.) 

“Causes of action for intentional and negligent misrepresentation sound in fraud 

and, therefore, each element must be pleaded with specificity. [Citations.] ‘The 

specificity requirement means a plaintiff must allege facts showing how, when, where, to 

whom, and by what means the representations were made, and, in the case of a corporate 

defendant, the plaintiff must allege the names of the persons who made the 

representations, their authority to speak on behalf of the corporation, to whom they 

spoke, what they said or wrote, and when the representation was made.’ [Citation.] 

However, ‘the requirement of specificity is relaxed when the allegations indicate that “the 

defendant must necessarily possess full information concerning the facts of the 

controversy” [citations] or “when the facts lie more in the knowledge of the” ’ defendant. 

[Citation.] The specificity requirement serves two purposes: ‘to apprise the defendant of 
21

the specific grounds for the charge and enable the court to determine whether there is any 

basis for the cause of action.’ ” (Daniels, supra, 246 Cal.App.4th at pp. 1166-1167.)

3. Analysis

a. Misrepresentations

Among the representations appearing in the first (intentional misrepresentation) 

and second (negligent misrepresentation) causes of action, plaintiff asserted that 

defendants’ agents repeatedly informed him that defendants were either not in receipt of 

all documents requested of him or that they “required more and more documentation, 

even though [he] diligently verified both delivery and receipt of said documents, and each 

time they were sent.” Plaintiff specifically alleged that Nationstar “represented that 

[p]laintiff was eligible to receive a HAMP loan modification despite the fact that the 

balance of [p]laintiff’s loan precluded him from HAMP eligibility.” Plaintiff further 

alleged that “Nationstar continued to send [p]laintiff HAMP loan modification 

applications and continually represented to him that he was eligible to apply for and 

receive a HAMP modification.”14

Additionally, plaintiff specifically alleged “ ‘facts showing how, when, where, to 

whom, and by what means the representations were made, and . . . the names of the 

persons who made the representations, their authority to speak on behalf of the 

corporation, to whom they spoke, what they said or wrote, and when the representation 

was made.’ ” (Daniels, supra, 246 Cal.App.4th at pp. 1166-1167.) He alleged that 

Nationstar, its agents, employees, and representatives, including a named individual, 

14

 Defendants assert that HAMP application forms are commonly used for other 

modification programs and thus simply sending plaintiff this form did not logically imply 

Nationstar thought him qualified for HAMP. We reject this argument in that it is based 

on facts not in the complaint or in documents that have been the subject of judicial notice. 

Moreover, even if the form could be used for other programs, plaintiff specifically 

alleged that Nationstar represented he was eligible to receive a HAMP modification.
22

made the representations. He also alleged that the other names and identities of the 

individuals who made the representations were within the possession of defendant. He 

represented how, where, and by what means the representations were made, verbally over 

the phone as well as in writing between Nationstar agents and plaintiff. He alleged the 

representations were made between January 2014 and May 2015, and that the individuals 

who made the representations had authority to speak for Nationstar. 

We conclude these alleged representations by Nationstar and its agents that 

plaintiff was eligible to apply for and receive a HAMP modification constitute sufficient 

misrepresentations as to support intentional and negligent misrepresentation causes of 

action against Nationstar.15 Additionally, in light of plaintiff’s allegation that Nationstar 

acted as an agent for U.S. Bank, the representations support the intentional and negligent 

misrepresentation causes of action against U.S. Bank.

b. Knowledge of Falsity

Plaintiff alleged that Nationstar and its agents “knew or should have known that 

Plaintiff would not qualify under the threshold HAMP guidelines. Nationstar regularly 

engages in loan modification activities including modifying loans under the HAMP 

program. The requirement that the loan amount be no greater than $729,750 is one of the 

15

 We note that a representation is generally not actionable unless it concerns “past or 

existing facts.” (Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells (2000) 86 

Cal.App.4th 303, 309, 310.) Although a false promise to perform in the future can 

support a cause of action for intentional misrepresentation, it does not support a cause of 

action for negligent misrepresentation. (Tarmann v. State Farm Mut. Auto. Ins. Co. 

(1991) 2 Cal.App.4th 153, 158, 159 [“Simply put, making a promise with an honest but 

unreasonable intent to perform is wholly different from making one with no intent to 

perform and, therefore, does not constitute a false promise. [W]e decline to establish a 

new type of actionable deceit: the negligent false promise”].) Thus, an alleged promise to 

grant a loan modification does not concern past or existing facts, and cannot be the basis 

for a negligent misrepresentation cause of action. However, here, the alleged 

misrepresentation is that plaintiff was eligible to apply for and receive a HAMP 

modification, which concerns existing facts. 
23

threshold requirements under the HAMP program, and Nationstar knew or should have 

known that there was no way Plaintiff could qualify for a HAMP modification because 

his loan balance was more than two times higher than the maximum loan amount for 

HAMP qualification. Yet, Nationstar continued to send Plaintiff HAMP loan 

modification applications and continually represented to him that he was eligible to apply 

for and receive a HAMP modification.” (Capitalization omitted.) 

This was sufficient to allege knowledge of falsity.

c. Intent to Induce Reliance

According to the second amended complaint, Nationstar “intended to induce 

Plaintiff[’s] reliance so that Nationstar could keep Plaintiff in the modification process, 

collect additional fees for servicing a delinquent mortgage, and ultimately foreclose upon 

the Subject Property. Further, Plaintiff alleges that Nationstar received additional 

compensation for every loan modification application they received from Plaintiff.” 

(Capitalization omitted.) Elsewhere, plaintiff alleged that the misrepresentations “were 

part of Defendants’ overall scheme to keep Plaintiff in a modification process it never 

intended to complete in order to accrue fees and penalties to which it would not have 

been entitled had Plaintiff never entered into the modification process in the first place. 

Most, if not all, of the misrepresentations were designed to provide Plaintiff with the false 

hope that a modification would be granted in order to induce him to continue with the 

process, even after Defendants had issued denials.” 

We conclude that these statements were sufficient to allege intent to induce 

reliance.

d. Actual and Justifiable Reliance

Plaintiff alleged in his second amended complaint that he was justified in relying 

on Nationstar’s misrepresentations “because Nationstar is the servicer of the Subject 

Loan and regularly engages in the process of offering HAMP loan modifications in 

accordance with HAMP guidelines and Nationstar sent HAMP applications to Plaintiff 
24

on multiple occasions.” (Capitalization omitted.) Elsewhere, plaintiff alleged that, “had 

Plaintiff known that Defendants never intended to grant him a modification, he would not 

have continued in the process and would have either sold the property or sought the aid of 

family instead of allowing Defendants to unjustifiably enrich themselves at his expense.” 

Plaintiff was already in default at the relevant times. According to the allegations 

of the second amended complaint, based on Nationstar’s misrepresentations about his 

application and eligibility for a HAMP loan modification, plaintiff forewent other means 

to become current on his loan or even sell his property. Plaintiff allegedly did so in 

reliance on the representations of Nationstar, a mortgage loan servicer which regularly 

worked with HAMP loan modifications. Thus, he adequately pleaded reliance.16

e. Damages and Conclusion

Plaintiff alleged: “As a proximate result of Defendants’ conduct in violating their 

promises and representations to Plaintiff, Plaintiff has suffered injury, damage to his 

credit, increased interest and arrears that he would not have otherwise incurred, faces the 

loss of the Subject Property through foreclosure, and forewent seeking other remedies to 

cure the default. Further, Defendants charged additional late fees and penalties to 

Plaintiff’s mortgage account. Plaintiff expended time, energy and effort into the loan 

modification process, granting Defendant access to his personal financial records, which 

they would not have been entitled to receive . . . . Plaintiff has had to retain an attorney, 

expend legal costs and have suffered further damages in an amount to be shown 

according to proof at the time of trial.” 

16

 Defendants assert that plaintiff easily could have discovered the qualifications for 

HAMP loan modifications through online and other research, and therefore he cannot 

establish justifiable reliance. We agree with plaintiff that defendants’ assertions are 

factual allegations outside of the pleadings and have no place in our determination as to 

whether plaintiff has stated a cause of action.
25

Plaintiff alleged that he was suffering harm to his credit following BANA’s 

freezing of his accounts in 2008, six years before any misrepresentations by Nationstar. 

However, construing the second amended complaint liberally (Longshore, supra, 25 

Cal.3d at p. 22; Daniels, supra, 246 Cal.App.4th at p. 1162), he also alleged that his 

credit continued to suffer ongoing damage. 

The complaint further alleges plaintiff might have pursued “other remedies” and 

“alternative remedies” had he not relied on Nationstar’s alleged misrepresentations. At 

one point, plaintiff referred to other remedies, “such as refinancing while there was 

equity in the property, a short sale of the property, borrowed money from family and 

friends, or organized investors to pay off the delinquent balance.”

Additionally, plaintiff claimed to have been damaged in the form of increased 

interest, arrears, penalties, and fees that he would not have otherwise incurred. 

Plaintiff further alleges that he expended time, energy and effort in the loan 

modification process. In Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 

915, another panel of this court recited that the plaintiffs alleged they sustained damages 

“by the considerable time they spent repeatedly contacting Chase and repeatedly 

preparing documents at Chase’s request; by discontinuing efforts to pursue a refinance 

from other financial institutions or to pursue other means of avoiding foreclosure (such as 

bankruptcy restructuring, or selling or renting their home); by having their credit reports 

further damaged; and by losing their home and making it unlikely they could purchase 

another one.” (Id. at p. 928.) The Bushell court concluded that the plaintiffs adequately 

alleged damages in connection with their fraud cause of action. (Id. at pp. 928, 930, 931; 

but see Lueras, supra, 221 Cal.App.4th at p. 79 [time and effort spent assembling 

materials for loan modification application amounts to a “sort of nominal damage subject 

to the maxim de minimis non curat lex—i.e., the law does not concern itself with 

trifles”].)
26

Liberally construing plaintiff’s allegations, as we must (Longshore, supra, 

25 Cal.3d at p. 22; Daniels, supra, 246 Cal.App.4th at p. 1162), we conclude that he has 

sufficiently pleaded damages resulting from Nationstar’s (and, by extension, U.S. 

Bank’s) alleged intentional and negligent misrepresentations.17 

Accordingly, because plaintiff sufficiently pled each element of the causes of 

action for intentional and negligent misrepresentations, the trial court erred in sustaining 

Nationstar and U.S. Bank’s demurrer to the first and second causes of action.

B. Negligence--SLS, Nationstar, and U.S. Bank

1. The Parties’ Contentions

In his supplemental brief following transfer, plaintiff contends that Sheen, supra, 

12 Cal.5th 905 is distinguishable from the facts of this case and therefore does not 

support a finding that the trial court properly sustained the demurrer as to his negligence 

cause of action. According to plaintiff, this court correctly determined in its prior opinion 

that the second amended complaint adequately pled a negligence claim. Defendants SLS, 

Nationstar, and U.S. Bank disagree, arguing that plaintiff’s negligence cause of action is 

foreclosed by Sheen. Defendants assert that, in light of Sheen, plaintiff has not stated a 

negligence cause of action, as they owed him no duty to use reasonable care in handling 

17

 Relevant to damages, plaintiff also alleged that he was forced to file a bankruptcy 

petition to stop the foreclosure sale on the property. However, this occurred while 

BANA was still the loan servicer, long before Nationstar, or its misrepresentations, 

would be implicated. Moreover, while plaintiff alleges that he “faces the loss of the 

Subject Property through foreclosure,” he does not allege that the subject property was 

indeed foreclosed upon. Facing the possibility of foreclosure, without more, does not 

amount to compensable damages. Finally, plaintiff’s reference to retaining an attorney 

and legal costs would not give rise to compensable damages. (Khajavi v. Feather River 

Anesthesia Medical Group (2000) 84 Cal.App.4th 32, 62 [“ ‘In the absence of a statute 

authorizing attorneys’ fees as an element of damages, or of a contract to pay such fees in 

event of the party’s recovery, attorneys’ fees paid by a successful party in an action are 

never recoverable against the unsuccessful party’ ”].)
27

his loan modification applications under general negligence principles. We agree with 

defendants. 

2. Elements of Negligence and the Negligence Allegations in the Second

Amended Complaint

To support a negligence cause of action, a plaintiff must plead and prove: (1) the 

defendant owed the plaintiff a legal duty, (2) the defendant breached the duty, and (3) the 

breach was a proximate or legal cause of the plaintiff’s injuries. (Merrill v. Navegar, Inc.

(2001) 26 Cal.4th 465, 477.) “We start by identifying the allegedly negligent conduct by 

[defendants] because our analysis is limited to ‘the specific action the plaintiff claims the 

particular [defendants] had a duty to undertake in the particular case.’ ” (Lueras, supra, 

221 Cal.App.4th at p. 62, quoting Vasquez v. Residential Investments, Inc. (2004) 118 

Cal.App.4th 269, 280.) 

The second amended complaint alleges that Nationstar, SLS, and U.S. Bank acted 

unreasonably throughout the loan modification process “by failing to accurately and 

reasonably evaluate Plaintiff for a loan modification”; by mishandling and losing [his] 

financial documents; by “misdirect[ing] Plaintiff”; by failing to inform plaintiff of the 

documents that were required for the loan modification; by forcing plaintiff to submit the 

same documents repeatedly; and by misrepresenting that plaintiff was eligible for a 

HAMP loan modification for which his loan was not qualified. Plaintiff asserted that, as 

a proximate cause of defendants’ negligence, he “suffered injury, damage to his credit, 

increased interest and arrears that he would not have otherwise incurred, forewent 

seeking other remedies and solutions, has incurred legal fees and costs, and now face[s] 

the possible foreclosure proceedings and the loss of the Subject Properties.”

3. Analysis 

Plaintiff’s negligence cause of action is predicated on the theory that defendants 

owed him a duty of care to exercise reasonable care in reviewing and processing his loan 

modification applications. The source of this duty is not grounded in any statute or 
28

regulation. Nor is it grounded in the specific language of his mortgage contract. Instead, 

plaintiff claims that the duty arises as a matter of law under general negligence 

principles--i.e., the common law. As we shall explain, plaintiff’s negligence cause of 

action is foreclosed by Sheen.

Recovery in a negligence action depends as a threshold matter on whether the 

defendant had ‘ “a duty to use due care toward an interest of [the plaintiff’s] that enjoys 

legal protection against unintentional invasion.” ’ ” (Gas Leak, supra, 7 Cal.5th at p.

397.) “Whether a duty of care exists is a question of law to be determined on a case-bycase basis.” (Lueras, supra, 221 Cal.App.4th at p. 62.)

“[A]s a general rule, a financial institution owes no duty of care to a borrower 

when the institution’s involvement in the loan transaction does not exceed the scope of its 

conventional role as a mere lender of money.” (Nymark v. Heart Fed. Savings & Loan 

Assn. (1991) 231 Cal.App.3d 1089, 1096.) Additionally, California law generally does 

not impose a duty of care to avoid causing purely economic losses in negligence cases. 

(Gas Leak, supra, 7 Cal.5th at pp. 398-400.)

“ ‘[T]he issue of whether a tort duty exists for mortgage modification has divided 

California courts for years.’ ” (Sheen, supra, 12 Cal.5th at p. 915.) In determining

whether such a duty existed, courts balanced the Biakanja factors, “among which are 

[(1)] the extent to which the transaction was intended to affect the plaintiff, [(2)] the 

foreseeability of harm to him, [(3)] the degree of certainty that the plaintiff suffered 

injury, [(4)] the closeness of the connection between the defendant's conduct and the 

injury suffered, [(5)] the moral blame attached to the defendant’s conduct, and [(6)] the 

policy of preventing future harm.” (Nymark v. Heart Fed. Savings & Loan Assn, supra, 

231 Cal.App.3d at p. 1098, citing Biakanja v. Irving, supra, 49 Cal.2d at p. 650.) 

As we have explained, our Supreme Court recently addressed the issue of whether 

a common law tort duty exists in the mortgage modification context. In Sheen, our high 

court concluded that a lender does not owe a borrower a tort duty of care sounding in 
29

general negligence principles to “process, review, and respond carefully and completely 

to” a loan modification application so as to avoid causing purely economic losses, that is, 

pecuniary losses unaccompanied by property damage or personal injury. (Sheen, supra, 

12 Cal.5th at p. 922.) Such a claim arises from the mortgage contract between a 

borrower and his or her lender and therefore falls within the ambit of the economic loss 

rule (id. at p. 915), which “functions to bar claims in negligence for pure economic losses 

in deference to a contract between litigating parties. ” (Id. at p. 922, see id. at p. 915 

[explaining that the economic loss rule “bars recovery in negligence for pure economic 

losses when such claims would disrupt the parties’ private ordering, render contracts less 

reliable as a means of organizing commercial relationships, and stifle the development of 

contract law”].)18 The economic loss rule precludes claims that arise from, or are not 

independent of, an underlying contract between the parties. (Id. at p. 923.)19 As part of 

its analysis regarding the application of the economic loss rule in the loan modification 

18

 The economic loss rule has been applied in various contexts, including in 

circumstances where the litigating parties have a contractual relationship. (Sheen, supra, 

12 Cal.5th at p. 922.) In this context, the rule “ ‘ “prevent[s] the law of contract and the 

law of tort from dissolving one into the other.” ’ ” (Ibid.) “The Restatement states this 

form of the economic loss rule thusly: ‘[T]here is no liability in tort for economic loss 

caused by negligence in the performance or negotiation of a contract between the 

parties.’ ” (Id. at p. 923.) This rule serves several purposes: “[I]t ‘protects the bargain 

the parties have made against disruption by a tort suit,’ ” and “ ‘allows parties to make 

dependable allocations of financial risk without fear that tort law will be used to undo 

them later.’ ” (Ibid.) “ ‘Viewed in the long run,’ therefore, ‘the rule prevents the erosion 

of contract doctrines by the use of tort law to work around them.’ ” (Ibid.) 

19

 As the Sheen court recognized, the economic loss rule does not bar all tort claims for 

monetary losses between contractual parties, including fraud and intentional 

misrepresentation claims, as such claims are independent of a defendant’s breach of 

contract. (Sheen, supra, 12 Cal.5th at pp. 923-924 [explaining that tort claims are

permitted in contract cases when “ ‘the duty that gives rise to tort liability is either 

completely independent of the contract or arises from conduct which is both intentional 

and intended to harm’ ”].)
30

context, the Sheen court cited, with approval, federal and state court decisions from 

outside of California holding that lenders and loan servicers do not have a common law 

tort duty requiring them to use reasonable care in reviewing and processing loan 

modification applications. (See id. at pp. 925-927 [explaining that application of the 

economic loss rule in the loan modification context is consistent with the general rule that

“ ‘a lender owes no duty of care to a borrower when the lender’s involvement in the loan 

transaction does not exceed its customary role in arms-length lending and servicing’ ”].) 

In finding that a lender owes no common law duty to a borrower to exercise 

reasonable care in reviewing and processing a loan modification application, the Sheen

court resolved a split of authority among the California Courts of Appeal and expressly 

disapproved of our prior opinion in this case to the extent it is inconsistent with the views 

expressed in Sheen. (Sheen, supra, 12 Cal.5th at pp. 919-920, 948, & fn. 12.) In doing 

so, the court explained that the multifactor approach articulated in Biakanja for 

ascertaining a duty of care (on which we relied in our prior opinion) does not apply in the 

loan modification context when, as here, “the litigants are in contractual privity and the 

plaintiff’s claim is not ‘independent of the contract arising from principles of tort law.’ ” 

(See Sheen, supra, 12 Cal.5th at pp. 922, 936-942 [explaining why the Biakanja factors 

do not apply in the loan modification context, noting that Biakanja does not displace the 

economic loss rule when that rule squarely applies].) 

Having reconsidered the cause in light of Sheen as directed by our Supreme Court, 

we conclude that plaintiff’s negligence cause of action is subject to dismissal. Plaintiff 

alleged no facts which would support the existence of a common law duty of care owed 

to him by U.S. Bank, SLS, or Nationstar. And plaintiff has not shown that he could 

amend his complaint to overcome this deficiency. 

We are unpersuaded by plaintiff’s contention that a contrary result is warranted 

because Sheen is factually distinguishable. In support of his negligence cause of action, 

plaintiff alleged that U.S. Bank, SLS, and Nationstar owed him a duty of care to act 
31

reasonably during the reviewing and processing of his loan modification applications 

based on the Biakanja factors. However, as we have explained, the Sheen court 

unequivocally rejected the notion that the Biakanja factors can support the conclusion 

that a lender (or loan servicer) owes a borrower a tort duty sounding in general 

negligence principles in the loan modification context. (Sheen, supra, 12 Cal.5th at pp. 

915, 922, 936-942.) In our view, Sheen makes clear that plaintiff has not stated a 

negligence cause of action. Any factual differences between this case and Sheen have no 

impact on this conclusion. As we have explained, the Sheen court held that the economic 

loss rule categorically precludes common law negligence claims against lenders (and loan 

servicers) which are predicated on the failure to exercise due care in reviewing and 

processing loan modification applications.

We note that plaintiff is not without a remedy for the purported mishandling of his 

loan modification applications. As we have discussed, he adequately pleaded causes of 

action against U.S. Bank and Nationstar for intentional and negligent misrepresentation, 

which are separate and distinct torts from negligence. (See Sheen, supra, 12 Cal.5th at p. 

943 & fn. 10 [noting that “there are causes of action other than a general claim of 

negligence (e.g., promissory estoppel, negligent and intentional misrepresentation) for 

failing to exercise reasonable care in processing, reviewing, and responding to a 

borrower’s loan modification application that may offer recourse to borrowers who suffer 

injury due to missteps by a lender (or loan servicer) in connection with the handling of a 

mortgage modification application”].) Nothing in Sheen precludes such claims in the 

mortgage modification context. (See id. at pp. 916, 923, 924, 943 & fn. 10.)

C. Trespass to Land--Nationstar

1. The Parties’ Contentions

Plaintiff asserts that the trial court erred in sustaining defendants’ demurrers as to 

his cause of action for trespass to land. According to plaintiff, the fact that he defaulted 

on his mortgage payments in 2009 and that a notice of trustee’s sale was recorded on 
32

August 4, 2014, “have no effect on [plaintiff’s] possession of the Subject Property in 

August 2014.” According to plaintiff, until the property sold, it was his. Plaintiff asserts 

that he properly pleaded that he owned and possessed the land when Cyprexx entered. 

Defendants respond that the trial court correctly concluded that plaintiff’s 

allegations were insufficient because they did not show that defendants were not 

authorized to enter the premises in light of plaintiff’s default. Defendants assert that 

section 9 of the deed of trust, which was the subject of their granted request for judicial 

notice, authorized entry when the borrower was in default. Defendants assert that 

consent is a complete defense to a trespass claim, and in section 9 of the deed of trust,

plaintiff consented to an entry such as that performed by Cyprexx. 

2. Elements of Trespass to Land

“ ‘Trespass is an unlawful interference with possession of property.’ [Citation.] 

The elements of trespass are: (1) the plaintiff’s ownership or control of the property; (2) 

the defendant’s intentional, reckless, or negligent entry onto the property; (3) lack of 

permission for the entry or acts in excess of permission; (4) harm; and (5) the defendant’s 

conduct was a substantial factor in causing the harm.” (Ralphs Grocery Co. v. Victory

Consultants, Inc. (2017) 17 Cal.App.5th 245, 261-262.) “ ‘Where there is a consensual 

entry, there is no tort, because lack of consent is an element of the wrong.’ ” (Spinks v. 

Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1043.)

3. Section 9 of the Deed of Trust

Section 9 provides, in pertinent part: “If (a) Borrower fails to perform the 

covenants and agreements contained in this Security Instrument, (b) there is a legal 

proceeding that might significantly affect Lender’s interest in the Property and/or rights 

under the Security Instrument (such as a proceeding in bankruptcy, probate, for 

condemnation or forfeiture, for enforcement of a lien which may attain priority over this 

Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the 

Property, then Lender may do and pay for whatever is reasonable or appropriate to 
33

protect Lender’s interest in the Property and rights under this Security Instrument, 

including protecting and/or assessing the value of the Property, and securing and/or 

repairing the Property. . . . Securing the Property includes, but is not limited to, entering 

the Property to make repairs, change locks, replace or board up doors and windows, drain 

water from pipes, eliminate building or other code violations or dangerous conditions, 

and have utilities turned on or off.” (Italics added.) 

4. Analysis

Plaintiff has alleged in the second amended complaint that, on or about August 15, 

2014, Nationstar hired Cyprexx to enter onto the property “and change the locks on his 

doors.” Plaintiff only learned that this occurred because a notice was placed on the door. 

Plaintiff called Cyprexx, and a representative told him that Nationstar had hired Cyprexx 

“to secure the premises and to ‘winterize’ it.” Plaintiff averred that he “was only recently 

able to gain access to the premises because of the locked doors.” He further alleged that 

all of his personal effects and furniture were still in the property when Cyprexx entered 

the premises and changed the locks. Plaintiff asserted that Cyprexx entered onto the 

property “and changed the locks without [plaintiff’s] knowledge or consent.” With 

regard to damages in connection with this cause of action, plaintiff asserted that he was 

unable to enter the premises, and he suffered emotional distress upon learning that 

strangers had entered his house “and changed the locks without his knowledge or 

consent. Further Plaintiff was forced to expend funds to hire a locksmith to enter the 

premises to change the locks again and now has a caretaker maintaining the property to 

ensure no one else trespasses onto the property when Plaintiff is not there.” 

That plaintiff was in default is not disputed. Thus, plaintiff “fail[ed] to perform 

the covenants and agreements contained in” the deed of trust. A notice of trustee’s sale 

was recorded on August 4, 2014. As a result of plaintiff’s failure to perform, under 

section 9 of the deed of trust, Nationstar, as loan servicer, was authorized to, among other 

things, enter the property and “change locks.” That is exactly what plaintiff alleges 
34

Cyprexx, as Nationstar’s agent, did, and no more. The action taken by Cyprexx, on 

behalf of Nationstar, was expressly authorized under section 9 of the deed of trust. 

Thus, plaintiff failed to allege a legally sufficient cause of action sounding in 

trespass to land because there are no allegations that Nationstar, or Cyprexx on its behalf, 

exceeded the scope of the action authorized under the deed of trust. As the trial court 

correctly concluded, the second amended complaint is silent as to how Nationstar lacked 

authority to enter onto the property and change the locks, particularly in light of the 

express provisions of the deed of trust authorizing such action. 

Plaintiff asserts that no amendment to the trespass to land cause of action is 

necessary. However, he further represents that he can amend the second amended 

complaint to address arguments concerning the deed of trust. In this regard, he asserts 

only: “[I]f this Court agrees with the trial court that [plaintiff] should have addressed 

Respondents[’] rights under the Deed of Trust and Notice of Default, [Plaintiff] can 

allege that unless and until the Subject Property was sold at a trustee’s sale, it constituted 

his property.”

We conclude that it is not reasonably possible that the defect in the second 

amended complaint could be cured by amendment. The only amendment proposed by 

plaintiff—that at the relevant time the property remained his property—could not change 

the result. (See generally Zipperer v. County of Santa Clara, supra, 133 Cal.App.4th at 

p. 1020 [where the nature of the claim is clear and under substantive law no liability 

exists, court should deny leave to amend because no amendment could change the result]; 

see also Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 [plaintiff bears 

burden of proving amendment would cure defect]; Blank v. Kirwan (1985) 39 Cal.3d 311, 

318 [same]; Mendoza v. JPMorgan Chase Bank, N.A. (2016) 6 Cal.App.5th 802, 809 

[same].) 

Accordingly, the trial court properly sustained Nationstar’s demurrer to the fourth 

cause of action without leave to amend.
35

D. Unfair Competition Law--SLS, Nationstar, and U.S. Bank

1. The Unfair Competition Law

The “unfair competition law’s scope is broad.” (Cel-Tech Communications, 

Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (Cel-Tech

Communications).) “[I]t defines ‘unfair competition’ to include ‘any unlawful, unfair or 

fraudulent business act or practice.’ ” (Ibid., quoting Bus. & Prof. Code, § 17200, fn. 

omitted.) “By proscribing ‘any unlawful’ business practice, ‘section 17200 “borrows” 

violations of other laws and treats them as unlawful practices’ that the unfair competition 

law makes independently actionable.” (Cel-Tech Communications, at p. 180.) 

“However, the law does more than just borrow. The statutory language referring to ‘any 

unlawful, unfair or fraudulent’ practice . . . makes clear that a practice may be deemed 

unfair even if not specifically proscribed by some other law.” (Ibid.) “ ‘Because 

Business and Professions Code section 17200 is written in the disjunctive, it establishes 

three varieties of unfair competition-acts or practices which are unlawful, or unfair, or 

fraudulent. “In other words, a practice is prohibited as ‘unfair’ or ‘deceptive’ even if not 

‘unlawful’ and vice versa.” ’ ” (Cel-Tech Communications, at p. 180.)

“A business practice is ‘fraudulent’ within the meaning of [Business and 

Professions Code] section 17200 if it is ‘likely to deceive the public. [Citations.] It may 

be based on representations to the public which are untrue, and “ ‘also those which may 

be accurate on some level, but will nonetheless tend to mislead or deceive. . . . A 

perfectly true statement couched in such a manner that is likely to mislead or deceive the 

consumer, such as by failure to disclose other relevant information, is actionable under’ ” 

the [unfair competition law]. [Citations.] The determination as to whether a business 

practice is deceptive is based on the likely effect such practice would have on a 

reasonable consumer.’ ” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 

1380.) “A ‘fraudulent’ activity includes any act or practice likely to deceive the public, 

even if no one is actually deceived.” (Jolley v. Chase Home Finance, LLCI (2013) 213 
36

Cal.App.4th 872, 907.) “ ‘Unlike common law fraud, a Business and Professions Code 

section 17200 violation can be shown even without allegations of actual deception, 

reasonable reliance and damage.’ ” (Brakke v. Economic Concepts, Inc. (2013) 213 

Cal.App.4th 761, 772.) 

“The standard for determining what business acts or practices are ‘unfair’ in 

consumer actions under the [unfair competition law] is currently unsettled.” (Zhang v. 

Superior Court (2013) 57 Cal.4th 364, 380, fn. 9.) Prior to the Supreme Court’s opinion 

in Cel-Tech Communications, courts applied a balancing test to determine whether a 

practice was “unfair” under the unfair competition law. (See, e.g., Klein v. Earth 

Elements, Inc. (1977) 59 Cal.App.4th 965, 969-970.) Specifically, courts would balance 

the impact of the practice on the alleged victim, against the reasons, justifications, and 

motives of the alleged wrongdoer. (Ibid.) The Supreme Court rejected this approach in 

Cel-Tech Communications, an anti-competitive practices case, holding that a cause of 

action for unfair business practices must “be tethered to some legislatively declared 

policy or proof of some actual or threatened impact on competition.” (Cel-Tech 

Communications, supra, 20 Cal.4th at pp. 186-187.) Although Cel-Tech 

Communications disapproved of applying the balancing test in consumer cases, the

Supreme Court expressly limited that holding to anti-competitive practices cases, stating: 

“Nothing we say relates to actions by consumers.” (Id. at p. 187, fn. 12.) 

Following Cel-Tech Communications, a split in authority has developed 

concerning the standard for consumer claims under the “unfair” prong of the unfair 

competition law. (Compare Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 

Cal.App.4th 700, 718-719 [adopting the pre-Cel-Tech Communications balancing test] 

with Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 854 [adopting the 

“tether[ing]” test]; see also Camacho v. Automobile Club of Southern California (2006) 

142 Cal.App.4th 1394,1403 [adopting the test for unfairness set forth in 15 U.S.C. § 

45(n)].) This court long ago adopted the balancing test (Progressive West Ins. Co. v. 
37

Superior Court (1999) 135 Cal.App.4th 263, 285-286) and, in the absence of any 

discussion of the appropriate standard by the parties, we continue to apply that test.

2. Plaintiff’s Contentions

Plaintiff asserts that the trial court erred in sustaining defendants’ demurrers to the 

sixth cause of action, which alleges a violation of the unfair competition law, as 

defendants’ actions “improperly reviewed him for a loan modification and, in fact, 

reviewed him for a program in HAMP that he could have never qualified for.” He argues 

promissory fraud is a form of deceit prohibited by subdivision (4) of Civil Code section 

1710, and that his allegations suffice to state a cause of action under the “unlawful” 

prong. He adds that whether conduct qualifies as “unfair” within the meaning of the 

unfair competition law is an issue of fact not appropriate for demurrer and that 

defendants’ practices were likely to deceive consumers. Plaintiff further asserts that, for 

largely the same reasons, defendants’ conduct is actionable under the “fraudulent” prong. 

3. Analysis

The complaint alleges defendants subjected plaintiff to a fraudulent application 

process, stringing him along with false assurances that a loan modification would be

forthcoming or that he was eligible for a HAMP modification, and then claiming, falsely 

and repeatedly, that plaintiff failed to supply requested documents. The complaint further 

alleges that defendants intentionally delayed the loan modification process by demanding 

that plaintiff submit the same documents over and over again, all in an attempt to increase 

arrears, penalties, and fees. These allegations adequately support a cause of action under 

the “fraudulent” and “unfair” prongs of the unfair competition law. (See Rufini v. 

CitiMortgage, Inc. (2014) 227 Cal.App.4th 299, 310 [allegation that lender “pretended to 

engage in loan modification efforts while actually intending to foreclose” stated unfair 

competition law cause of action under “fraudulent” and “unfair” prongs]; Majd v. Bank of 

America, N.A. (2015) 243 Cal.App.4th 1293, 1304 [borrower sufficiently alleged 
38

violation of the unfair competition law based, in part, on lender’s false assertion that he 

failed to provide required documentation].) 

The parties’ briefing also discusses the remedies available to plaintiff in 

connection with this cause of action and whether he is entitled to them. “While the scope 

of conduct covered by the [unfair competition law] is broad, its remedies are limited. 

[Citation.] A[n] [unfair competition law] action is equitable in nature; damages cannot be 

recovered. [Citation.] Civil penalties may be assessed in public unfair competition 

actions. . . . [Citation.] We have stated that under the [unfair competition law], 

‘[p]revailing plaintiffs are generally limited to injunctive relief and restitution.’ ” (Korea 

Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.) Plaintiff seeks both 

injunctive relief, enjoining the sale of the property, and disgorgement and restitution of 

late fees, penalties, and charges. Thus, plaintiff sought the appropriate remedies. (See 

ibid.) At this stage, reviewing the sustaining of defendants’ demurrers, we do not 

consider whether plaintiff will be able to prove his entitlement to these remedies or the 

scope of the appropriate remedies. We conclude the trial court erred in sustaining the 

demurrers to the unfair competition law cause of action. 

We are unpersuaded by defendants’ contention that Sheen compels a contrary 

conclusion as to SLS. Nothing in Sheen undermines our determination that the second 

amended complaint sufficiently states a cause of action against SLS under the 

“fraudulent” and “unfair” prongs of the unfair competition law. The fact that plaintiff has 

not stated a negligence cause of action does not, as defendants suggest, support dismissal 

of the unfair competition law claim as to SLS for failure to state a violation of the 

“unlawful” prong. To be considered unfair competition, a business act or practice need 

only meet one of the three criteria--unlawful, unfair, or fraudulent. (Buller v. Sutter 

Health (2008) 160 Cal.App.4th 981, 986.) In short, because we have found that plaintiff 

has alleged conduct that meets the definition of a “fraudulent” and “unfair” business 

practice, we need not and do not decide whether the conduct meets the definition of an 
39

“unlawful” business practice. (See Morgan v. AT&T Wireless Services, Inc. (2009) 177 

Cal.App.4th 1235, 1255 [declining to decide whether conduct met definition of “unfair” 

or “unlawful” business practice because the court found plaintiffs had adequately alleged 

a fraudulent business practice].) 

We decline to consider the arguments raised by defendants in their supplemental 

brief that are beyond the scope of the Supreme Court’s transfer order. These arguments, 

in essence, ask us to reconsider issues we reached in our prior opinion, the outcome of 

which are not dependent on the new rule of law stated in Sheen. (See Cal. Rules of 

Court, rule 8.200(b)(2) [following transfer from Supreme Court, “[s]upplemental briefs 

must be limited to matters arising after the previous Court of Appeal decision in the 

cause, unless the presiding justice permits briefing on other matters”]; Dahms v. 

Downtown Pomona Property & Business Improvement Dist. (2009) 174 Cal.App.4th 708, 

711, fn. 1 [only considering arguments that depended on the new rules of law stated by 

the Supreme Court].) 

DISPOSITION

The order on the demurrer to the first amended complaint that we deem to 

incorporate a judgment of dismissal as to BANA is affirmed. The judgments of dismissal 

in favor of U.S. Bank, SLS, and Nationstar are reversed. The orders sustaining the 

demurrers to the second amended complaint are affirmed in part and reversed in part. 

The orders are reversed as to the causes of action for intentional misrepresentation (first 

cause of action) and negligent misrepresentation (second cause of action) insofar as 
40

asserted against Nationstar and U.S. Bank, and as to the causes of action for violations of 

the unfair competition law (sixth cause of action) insofar as asserted against Nationstar, 

U.S. Bank, and SLS. In all other respects, the judgments are affirmed. The parties shall 

bear their own costs on appeal. (Cal. Rules of Court, rule 8.278(a)(3), (5).)

 /s/

Duarte, J.

We concur:

 /s/

Mauro, Acting P. J.

 /s/

Boulware Eurie, J.