Opinion
H041170
02-16-2017
LVNV FUNDING LLC, Plaintiff, Cross-Defendant and Respondent, v. FAREED SEPEHRY-FARD, Defendant, Cross-Complainant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 1-12-CV-238367)
Plaintiff and cross-defendant LVNV Funding LLC (LVNV) sued defendant and cross-complainant Fareed Sepehry-Fard to collect a debt owed by Sepehry-Fard. Sepehry-Fard cross-complained against LVNV and other cross-defendants. LVNV moved for judgment on the pleadings. The trial court entered judgment on the pleadings without leave to amend regarding Sepehry-Fard's first amended cross-complaint (Cross-Complaint), in favor of LVNV.
On appeal, Sepehry-Fard makes numerous arguments that are outside the scope of the judgment. Sepehry-Fard also argues that the trial court lacked jurisdiction over him and that the Cross-Complaint adequately stated causes of action for accounting; violations of the Unfair Competition Law (Bus. & Prof. Code, §§ 17200 et seq.); fraud; and declaratory relief. For the reasons stated here, we will affirm the judgment.
I. TRIAL COURT PROCEEDINGS
LVNV filed a complaint in December 2012, alleging that Sepehry-Fard owed $18,540.33. Sepehry-Fard, proceeding in propria persona, filed an initial cross-complaint against LVNV, Brachfeld Law Group, P.C. (the law firm that represented LVNV in the debt collection action), and Erica L. Brachfeld (the firm's principal). The trial court sustained a demurrer to the initial cross-complaint with leave to amend.
Sepehry-Fard filed the operative Cross-Complaint in September 2013, again naming LVNV, Brachfeld Law Group, P.C., and Erica Brachfeld as cross-defendants. The Cross-Complaint does not explicitly set forth any causes of action. It alleges that "BRACHFELD knowingly filed a frivolous law suit [sic]" because Sepehry-Fard does not actually owe a debt to any of the cross-defendants. The Cross-Complaint appears to allege that "BRACHFELD and her entire tribe of debt collectors" initiated a debt collection action against Sepehry-Fard even though they knew that the "alleged debt has been securitized and paid for 100s of times through credit default swaps (CDSs), tax write off, other insurance payouts, [and] TARP" and that the cross-defendants committed constructive fraud to deprive Sepehry-Fard "from life, liberty, pursuit of happiness ... and [his] right to his private property and assets." (Errors and emphasis in original.)
It is unclear whether the reference to "BRACHFELD" is to the firm, the individual attorney, or both.
The Cross-Complaint seeks an order requiring "Cross Defendants" to file an affidavit "attesting that Defendants are damaged party, party of interest and holder in due course with GAAP accounting and accounting general ledger incorporating all credits received by Cross Defendants such as but not limited to Credit Default Swaps (CDS), any other insurance payouts, tax write offs, TARP ... and that all the Indorsement for any and all transfers of the [alleged] security must be on the alleged security per article 3 ... if the alleged security is deemed to be a negotiable instrument or article 9 of the UCC if the alleged security is deemed to be a non negotiable instrument ... ." (Errors and brackets in original.) LVNV is mentioned as a specific cross-defendant only once in the Cross-Complaint, as follows: "Cross Complainant could not care less who pays for Cross Complainant's damages, whether it is LVNV, BRACHFELD or anyone else."
LVNV moved for judgment on the pleadings, arguing that the Cross-Complaint did not state facts sufficient to state a cause of action against LVNV. The trial court granted LVNV's motion, finding that the Cross-Complaint failed to state a cause of action against LVNV and that Sepehry-Fard had not demonstrated how the pleading could be amended to state a cause of action. The trial court entered judgment in favor of LVNV regarding the Cross-Complaint.
II. DISCUSSION
We begin by addressing Sepehry-Fard's argument that the trial court lacked personal and subject matter jurisdiction. By voluntarily filing a cross-complaint and appearing at hearings in the trial court, Sepehry-Fard consented to the trial court's personal jurisdiction. (See Rest.2d Conf. of Laws, § 32 ["A state has power to exercise judicial jurisdiction over an individual who has consented to the exercise of such jurisdiction."].) As for subject matter jurisdiction, "[t]he California Constitution confers broad subject matter jurisdiction on the superior court. (Cal. Const., art. VI, § 10.)" (Serrano v. Stefan Merli Plastering Co., Inc. (2008) 162 Cal.App.4th 1014, 1029.) While there are some limitations on the subject matter jurisdiction of the superior court (e.g., matters of exclusive federal jurisdiction), those limitations do not apply to any causes of action in the Cross-Complaint.
A. SCOPE OF APPEAL
The instant appeal is from the judgment entered in favor of LVNV regarding Sepehry-Fard's Cross-Complaint. As such, we will consider whether the Cross- Complaint states facts sufficient to constitute a cause of action against LVNV. (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) The record is silent regarding the status of LVNV's debt collection action as well as the status of Sepehry-Fard's Cross-Complaint as to the other cross-defendants.
As Sepehry-Fard did not include the judgment appealed from, we augmented the record on our own motion to add it as well as LVNV's original complaint and the order sustaining the demurrer to Sepehry-Fard's initial cross-complaint. Sepehry-Fard's motion to attach additional pages to his Reply Brief is denied because the additional pages exceed the page limit, are irrelevant, and are not part of the appellate record. (Cal. Rules of Court, rule 8.204(d).)
Unspecified statutory references are to the Code of Civil Procedure.
Sepehry-Fard devotes a large portion of his briefing to his repeated efforts in the trial court to disqualify trial court judges and his objections to the trial court's order setting aside a default judgment against LVNV in its debt collection action against Sepehry-Fard. "The determination of the question of the disqualification of a judge is not an appealable order and may be reviewed only by a writ of mandate from the appropriate court of appeal sought only by the parties to the proceeding." (§ 170.3, subd. (d); accord People v. Panah (2005) 35 Cal.4th 395, 444.) A pre-judgment order granting relief from default like the one entered in LVNV's favor is likewise not separately appealable. (Shapiro v. Clark (2008) 164 Cal.App.4th 1128, 1137.) As those issues are neither appealable nor related to the judgment Sepehry-Fard appeals from, we do not address his arguments related to them.
B. STANDARD OF REVIEW
Judgment on the pleadings is proper if a defendant (or cross-defendant) can show that the "complaint does not state facts sufficient to constitute a cause of action against that defendant." (§ 438, subd. (c)(1)(B)(ii).) " 'A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same de novo standard of review.' " (People ex rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 777.) " 'All properly pleaded, material facts are deemed true, but not contentions, deductions, or conclusions of fact or law,' " and the court may consider judicially noticeable matters. (Ibid.)
C. THE CROSS-COMPLAINT FAILS TO STATE A CAUSE OF ACTION
Though the Cross-Complaint does not explicitly set forth any causes of action, Sepehry-Fard argues on appeal that the Cross-Complaint alleges sufficient facts to support the following causes of action against LVNV: accounting; violations of the Unfair Competition Law; fraud; and declaratory relief.
1. Accounting
Accounting is an equitable cause of action requiring a showing of a relationship between the parties that requires an accounting (generally a fiduciary or partnership relationship) and a balance due that is not easily ascertainable by calculation. (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 910 (Jolley).)
The Cross-Complaint does not allege the existence of a relationship that requires an accounting, nor does it allege that LVNV owed any money to Sepehry-Fard under the contract on which LVNV's debt collection action was based. Sepehry-Fard also does not explain why any account at issue is "so complicated that an ordinary legal action demanding a fixed sum is impracticable." (Jolley, supra, 213 Cal.App.4th at p. 910.)
The Cross-Complaint does not state facts sufficient to support a cause of action for accounting.
2. Unfair Competition Law
The Unfair Competition Law prohibits business practices that are unlawful, unfair, or fraudulent. (Rose v. Bank of America, N.A. (2013) 57 Cal.4th 390, 394.)
The Cross-Complaint does not allege that LVNV undertook any business practice, much less an unlawful, unfair, or fraudulent business practice. The Cross-Complaint instead alleges that "BRACHFELD" (referring to the firm, its principal, or both) filed a frivolous lawsuit. Sepehry-Fard attempts to use his Opening Brief to add new allegations, for example suggesting that all "Respondents have allegedly acted in concert with one another to sell Appellant's security ... to unknown entities on numerous occasions without providing for any for value consideration and without recording these unlawful transactions, violating IRC codes while alleged respondents did not and do not pay taxes on those transactions and literally continue to violate these complex PSA rules ... ." But our review is confined to whether the facts alleged in the Cross-Complaint are sufficient to state a cause of action (cf. Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103 ["[W]e are not limited to plaintiffs' theory of recovery in testing the sufficiency of their complaint against a demurrer, but instead must determine if the factual allegations of the complaint are adequate to state a cause of action under any legal theory."] (Italics omitted.)), meaning that we do not consider allegations raised solely in a party's appellate briefing. (See Perez v. Grajales (2008) 169 Cal.App.4th 580, 591-592 ["arguments raised for the first time on appeal are generally deemed forfeited"].)
The Cross-Complaint does not state facts sufficient to support a cause of action for a violation of the Unfair Competition Law.
3. Fraud
To prove fraud, Sepehry-Fard must show: (1) LVNV made a false representation as to a past or existing material fact; (2) LVNV knew the representation was false at the time it was made; (3) in making the representation, LVNV intended to deceive Sepehry-Fard; (4) Sepehry-Fard justifiably relied on the representation; and (5) Sepehry-Fard suffered resulting damages. (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792.) Fraud causes of action are held to a higher pleading standard and require allegations "showing how, when, where, to whom, and by what means the [fraudulent] 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." (Id. at p. 793.)
As already discussed, the Cross-Complaint does not allege that LVNV undertook any action. The Cross-Complaint vaguely alleges that "Cross Defendants caused to report derogatory and adverse credit reporting to credit agencies" and that "Cross Defendants ... knew that this alleged debt" had already been paid. Such conclusory allegations are inadequate to satisfy the heightened specificity required for fraud causes of action.
The Cross-Complaint does not state facts sufficient to support a cause of action for fraud.
4. Declaratory Relief
"Any person interested under a written instrument ..., or under a contract, or who desires a declaration of his or her rights or duties with respect to another, ... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties ... ." (§ 1060.) But a trial court "may refuse to exercise the power granted by this chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances." (§ 1061.) "The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action." (General of America Ins. Co., v. Lilly (1968) 258 Cal.App.2d 465, 470-471 [affirming sustained demurrer in declaratory relief action filed by insurance company because coverage issue could be determined in earlier-filed personal injury action].) "The availability of another form of relief that is adequate will usually justify refusal to grant declaratory relief" and the refusal to exercise the power to grant declaratory relief "is within the court's legal discretion and will not be disturbed on appeal except for abuse of discretion." (Ibid.)
The Cross-Complaint alleges that Sepehry-Fard does not owe any of the cross-defendants a debt, either because no debt exists or because any debt was subsequently securitized and paid off by credit default swaps and other financial transactions. It also seeks an order requiring the cross-defendants to provide evidence that they are the genuine owners of the debt that they claim Sepehry-Fard owes.
On appeal, Sepehry-Fard claims those allegations state a cause of action for declaratory relief because the cross-defendants have demanded that Sepehry-Fard repay a debt and he alleges that the debt has been paid from other sources. But Sepehry-Fard does not explain how that controversy is any different from the controversy that gave rise to, and will be decided in, the main action (i.e., LVNV's debt collection action). Sepehry-Fard is free to raise his argument about alternative sources of funding for the debt as a defense in that main action. Because the debt collection action provides Sepehry-Fard an adequate alternative form of relief, the trial court did not abuse its discretion by granting LVNV's motion for judgment on the pleadings related to this issue.
D. NO LEAVE TO AMEND
Sepehry-Fard does not request leave to amend on appeal and has not demonstrated a reasonable possibility that an amendment would cure the defects in the Cross-Complaint. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081; Code Civ. Proc., § 472c, subd. (a).) We find no abuse of discretion in the trial court's decision to grant LVNV's motion for judgment on the pleadings without leave to amend.
III. DISPOSITION
The judgment is affirmed. LVNV is entitled to its costs on appeal.
/s/_________
Grover, J.
WE CONCUR:
/s/_________ Rushing, P.J. /s/_________ Premo, J.