Opinion
NOT TO BE PUBLISHED
APPEAL from the Superior Court of San Bernardino County. Frank Gafkowski, Jr., Judge. (Retired judge of the former Mun. Ct. for the Southeast Jud. Dist. of L.A., assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) No. SCVSS141332
Law Offices of Robert B. Colosia and Robert B. Colosia for Plaintiffs and Appellants.
Luce, Forward, Hamilton & Scripps, Charles A. Bird, Antony D. Nash and John J. McNutt for Defendants and Respondents.
OPINION
McKinster J.
This is an appeal by Richard J. Maraziti and Signature Log Homes, LLC (hereafter referred to collectively as plaintiffs or individually by name) from the judgment of dismissal entered after the trial court sustained, without leave to amend, the demurrer of Fidelity National Title Company and Fidelity National Financial (hereafter defendants) to plaintiffs’ fourth amended complaint for unfair competition in violation of Business and Professions Code section 17200. Plaintiffs contend the trial court erred in sustaining defendants’ demurrer to the unfair competition cause of action because plaintiffs alleged facts sufficient to state a cause of action. In addition plaintiffs challenge the trial court’s order sustaining defendants’ demurrer without leave to amend to their cause of action under the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.) as alleged in their second and third amended complaints.
We conclude based on our de novo review of defendants’ showing in support of the demurrers, that at least one ground was well taken with respect to each plaintiff. Therefore, we will affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs filed their original complaint against defendants on August 30, 2006, and then filed an amended pleading on December 14, 2006. That “First Amended Complaint for Violation of the Consumer Legal Remedies Act Breach of §§ 17200, et seq, and Conspiracy” is the initial relevant pleading in this appeal. It sets out two purported causes of action against defendants, the first cause of action seeks relief under the Consumers Legal Remedies Act (referred to by the parties and hereafter as the CLRA), and the second cause of action seeks relief for alleged unfair competition in violation of Business and Professions Code section 17200 et seq., which plaintiffs refer to in their pleadings as the Unfair Competition Law (hereafter UCL).
Although the title also refers to conspiracy, the first amended complaint does not include any conspiracy allegations.
Defendants filed a demurrer in accordance with Code of Civil Procedure section 430.10 in which they asserted, first, that the first amended complaint fails to allege facts sufficient to constitute a cause of action because the UCL claims are based on the same conduct that was the subject of another lawsuit (Maraziti v. Gray’s Landing, Inc. (Super. Ct. San Bernardino County, 2006, No. SCVSS111935) (Gray’s Landing)), and Richard Maraziti (Maraziti) dismissed Gray’s Landing with prejudice after he reached a settlement with defendant Fidelity National Title. Defendants also asserted that the first amended complaint was devoid of any facts and as a result failed to allege any improper conduct, causation, or damages under either theory of recovery, and in any event the pleading was uncertain. Finally, defendants claimed that plaintiff Signature Log Homes, LLC (Signature) is not a “consumer” as defined in Civil Code section 1761, subdivision (d) of the CLRA, and as a result, lacked standing to pursue a CLRA claim as alleged in the first cause of action.
Civil Code section 1761, subdivision (d) of the CLRA defines “consumer” to mean “an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes.”
The trial court sustained defendants’ demurrer on the CLRA claim alleged in the first cause of action, with leave to amend as to Maraziti, and without leave to amend as to Signature because the trial court found as a matter of law that Signature is not a consumer within the meaning of the CLRA. The trial court also sustained the demurrer to the UCL claim alleged in the second cause of action but granted both plaintiffs leave to amend.
Plaintiffs filed a second amended complaint and when defendants again responded with a demurrer, plaintiffs did not file opposition but instead filed a third amended complaint. That pleading, which bears the designation “Class Action,” includes CLRA and UCL claims, and adds claims for breach of contract (including breach of the implied covenant of good faith and fair dealing), fraud, intentional misrepresentation, and negligent misrepresentation, apparently stemming from the alleged breach of a settlement agreement, a copy of which plaintiffs attached as an exhibit to the complaint, between Maraziti and defendant Fidelity National Title Company in the Gray’s Landing lawsuit. In their demurrer to the third amended complaint, defendants again asserted that the pleading failed to state a cause of action because Maraziti’s claims against Fidelity National Title were resolved in Gray’s Landing and therefore are res judicata. Defendants also asserted that the pleading failed to allege facts sufficient to constitute causes of action under any theory of liability alleged because, among other things, Maraziti’s CLRA claim is based on a transaction involving the purchase of real property and Civil Code section 1754 expressly exempts such transactions from the CLRA. Defendants also asserted that as with plaintiffs’ previous pleadings, the third amended complaint failed to allege facts showing causation and damages under the UCL. The trial court sustained defendants’ demurrer without leave to amend as to Maraziti on the CLRA cause of action, but with leave to amend on the UCL claim.
The footer incorrectly indentifies the pleading as the third amended complaint.
Plaintiffs’ Fourth Amended Complaint contains only one purported cause of action under the UCL and names not only defendants but also others not included in the previous pleadings. This fourth amended complaint alleges that Maraziti owned real property on North Shore Drive in Fawnskin (identified in the complaint as the Gray’s Landing Property), and both plaintiffs had “an interest” in real property located on Big Bear Boulevard in Big Bear Lake (the “Boulevard Property”); in the fall of 2003, Fidelity provided “foreclosure services” on the Gray’s Landing Property and the Boulevard Property, and in doing so, charged plaintiffs fees it should not have charged, or charged fees in an amount greater than that authorized by law. Plaintiffs also alleged in the complaint that two other cases between plaintiffs and defendants involved “claims different from those complained of herein.” Plaintiffs identified those two cases as the Gray’s Landing case, and Signature v. Draper (Super. Ct. San Bernardino County, 2007, No. SCVSS109553) (Draper).
Plaintiffs incorrectly identify Gray’s Landing as Case No. SCVSS141332. That is the case No. of this action.
In their demurrer to the fourth amended complaint, defendants again asserted that Maraziti’s UCL claims against Fidelity were barred by the settlement in Gray’s Landing, and therefore the fourth amended complaint fails to state a UCL claim by Maraziti. Defendants also asserted that Signature’s UCL claim is based on the same conduct alleged in Draper and as a result could not be prosecuted as a separate claim in a separate action. Defendants also asserted that the fourth amended complaint failed to allege facts showing damages and causation and consequently failed to state a UCL claim. The trial court sustained defendants’ demurrer to the fourth amended complaint without leave to amend. Plaintiffs appeal from the subsequently entered judgment of dismissal.
DISCUSSION
1.
STANDARD OF REVIEW
“On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citation.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed ‘if any one of the several grounds of demurrer is well taken. [Citations.]’ [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)
2.
ANALYSIS
Plaintiffs both contend that the “foreclosure services” alleged in their third amended complaint do not stem from the sale of real property. Therefore, those services are not excluded from the CLRA under Civil Code section 1754, and the trial court erred in finding otherwise. Signature also challenges the trial court’s finding that Signature is not a consumer, as defined by the CLRA, and on that ground sustaining defendants’ demurrer to the second amended complaint without leave to amend as to Signature. Although we do not share Signature’s view, we will not address this or any other claim Signature raises because its claims against defendants were resolved in Draper. As previously noted, defendants raised the pendency of that action in their demurrer to the Fourth Amended Complaint. In particular, defendants asserted that Signature’s UCL claim failed to state a cause of action because Signature’s claims against Fidelity Title were resolved in Draper and therefore are precluded under the primary right theory. We are persuaded from our review of the record, and for reasons we now explain, that defendants’ demurrer on that point was well taken.
A. Primary Right Theory
“‘The primary right theory is a theory of code pleading that has long been followed in California. It provides that a “cause of action” is comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation.] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. [Citation.]... ‘As far as its content is concerned, the primary right is simply the plaintiff’s right to be free from the particular injury suffered. [Citation.] It must therefore be distinguished from the legal theory on which liability for that injury is premised: “Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.” [Citation.] The primary right must also be distinguished from the remedy sought: “The violation of one primary right constitutes a single cause of action, though it may entitle the injured party to many forms of relief, and the relief is not to be confounded with the cause of action, one not being determinative of the other.” [Citation.]’” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904 (Mycogen), quoting Crowley v. Katleman (1994) 8 Cal.4th 666, 681-682, italics omitted.) “‘The primary right theory... is invoked... when a plaintiff attempts to divide a primary right and enforce it in two suits. The theory prevents this result by either of two means: (1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement [citations]; or (2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata.’” (Mycogen, at p. 904.) In short, the Draper lawsuit bars Signature’s claim in this action “if both suits seek to vindicate the same primary right.” (Mycogen, at p. 904.)
1. This Action and Draper Involve the Same Primary Right
As noted above in our recitation of the pertinent procedural details, plaintiffs alleged in their fourth amended complaint that they had two other actions pending against defendants, one of which was Draper. To refute plaintiffs’ allegation that those two other cases “related to claims different from those complained of herein,” and to support their assertion that Draper involved the same primary right at issue in the instant action, defendants asked the trial court to take judicial notice of various filings in Draper, including the first amended complaint, the statement of decision, and the final judgment entered following a court trial. Signature’s complaint in Draper names Fidelity Title Company as a defendant and alleges, in pertinent part, that Signature is the owner of the Boulevard Property; in June 2003, Fidelity Title, as trustee on the deed of trust given to secure Signature’s note for the purchase price of the property, recorded a notice of default on the Boulevard property; and Fidelity Title, along with other named defendants, engaged in various wrongful acts all of which resulted in a foreclosure sale of the Boulevard Property in October 2003. The trial court’s statement of decision in Draper resolves all factual issues with respect to the validity of the foreclosure sale on the Boulevard Property against Signature and in favor of the defendants, including Fidelity Title. In accordance with the statement of decision, the trial court entered judgment in Draper against Signature and in favor of the defendants on all claims asserted in that action. Defendants also asked the trial court in this case to take judicial notice of Signature’s proposed second amended complaint in Draper, a copy of which defendants lodged with the court as part of the filings in support of their demurrer. That proposed second amended pleading includes a cause of action against Fidelity Title and others for violation of Business and Professions Code section 17200, and is based on allegations of the same conduct set out in the fourth amended complaint in this action.
Defendants lodged copies of the pertinent documents and pleadings in the trial court.
The trial court denied Signature’s motion in Draper for leave to file the second amended complaint.
The above noted pleadings demonstrate that Signature’s claim in this action involves the same injury, or primary right, at issue in Draper, specifically, the alleged wrongful foreclosure in the fall of 2003 on the Boulevard Property in which Fidelity Title was the trustee on the deed of trust that secured Signature’s promissory note. Signature’s rights and Fidelity Title’s duties with respect to the Boulevard Property foreclosure were resolved in Draper. The judgment in Draper is res judicata and precludes any other claims by Signature against Fidelity Title based on that foreclosure. Signature’s claims against Fidelity Financial are also precluded by Draper because Fidelity Financial’s liability is at best vicarious and as such depends on Fidelity Title’s commission of wrongful acts. Accordingly, we conclude defendants’ general demurrer to Signature’s claims against defendants is well taken because those claims were based on the same primary right at issue and resolved in Draper. Therefore, the trial court properly sustained without leave to amend defendants’ demurrer not only to Signature’s UCL claim but also to the CLRA claim alleged in the second amended complaint.
Despite filing four separate pleadings in this action, plaintiffs failed to allege any facts to show the basis of liability of the various defendants. Instead, plaintiffs alleged the status of the defendants (e.g., Fidelity Title and Fidelity Financial are corporations, as alleged in the third amended complaint) and then referred to them collectively as Fidelity in the various causes of action. The complaint in Draper establishes that Fidelity Title committed the alleged acts upon which Fidelity Financial’s liability depends.
Draper also bars Maraziti’s claims regarding the Boulevard Property as alleged in the fourth amended complaint, in particular his allegation that he had “an interest” in the Boulevard Property. As previously noted, Maraziti based his UCL claim on defendants acts in connection with the foreclosures on both the Boulevard Property and the Gray’s Landing Property. According to the verified complaint in Draper, which as previously noted defendants lodged in the trial court in connection with their request for judicial notice, Signature alone was the obligor on the note secured by the deed of trust on the Boulevard Property. Maraziti did not allege any facts in the fourth amended complaint, or in any of the previous pleadings, to show the basis for or source of his claimed “interest” in the Boulevard Property. As a result, Maraziti cannot state a UCL claim in this action based on acts defendants allegedly committed in the course of the foreclosure on the Boulevard Property.
2. Maraziti’s UCL Claim in this Action was Resolved in Gray’s Landing
Defendants asserted in their general demurrer to the fourth amended complaint that Maraziti’s remaining claim was barred by a settlement in the Gray’s Landing case. Specifically, defendants asserted that Maraziti and Fidelity Title entered into a good faith settlement in Gray’s Landing in September of 2006, and that Maraziti then dismissed that action with prejudice. To support their assertion, defendants requested the trial court take judicial notice of the pertinent filings in Gray’s Landing, which defendants also lodged with the trial court. In opposition to defendant’s demurrer, Maraziti argued that the dismissal with prejudice in Gray’s Landing did not preclude his UCL claim against defendants in this action because the parties expressly excluded this action from the scope of the Gray’s Landing settlement. Maraziti’s contrary view notwithstanding, the record supports this basis for defendants’ demurrer to the fourth amended complaint, and therefore we must conclude the demurrer was well taken, for reasons we now explain.
We begin with the principle that, “[A] retraxit—modernly effected by a plaintiff’s filing of a dismissal of his or her action with prejudice—is deemed to be a judgment on the merits against that plaintiff. [Citations.]... A retraxit arising from a dismissal with prejudice... is given the same finality as if the matter were adjudicated and proceeded to a final judgment on the merits.” (Alpha Mechanical, Heating & Air Conditioning, Inc. v. Travelers Casualty & Surety Co. of America (2005) 133 Cal.App.4th 1319, 1330-1331.)
Maraziti, as noted above, initiated this action in August 2006 with a complaint that purported to allege a claim under the CLRA. In October, Maraziti settled Gray’s Landing and then dismissed that action with prejudice. After dismissing Gray’s Landing, Maraziti amended his complaint in this action to include a UCL claim against defendants based on the Gray’s Landing Property. Defendants demurred, raising the Gray’s Landing settlement as one basis for their general demurrer. Because Gray’s Landing included a UCL claim against Fidelity Title based on the same primary right at issue in this case, namely the alleged wrongful foreclosure on the Gray’s Landing Property, and Maraziti dismissed Gray’s Landing with prejudice, he is precluded from pursuing that UCL claim in this lawsuit.
B. CLRA CLAIM
At best, the agreement to exclude this action from the scope of the settlement in Gray’s Landing preserved Maraziti’s CLRA claim against defendants. The trial court, as previously noted, sustained without leave to amend defendants’ demurrer to the CLRA claim alleged in the third amended complaint. The CLRA prohibits use of specified “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” (Civ. Code, § 1770.) The CLRA defines “consumer”’ to mean “an individual who seeks or acquires, by purchase or lease, any goods or services for personal, family, or household purposes.” (Civ. Code, § 1761, subd. (d).) As defined in Civil Code section 1761, subdivision (a), “‘Goods’ means tangible chattels bought or leased for use primarily for personal, family, or household purposes, including certificates or coupons exchangeable for these goods, and including goods that, at the time of the sale or subsequently, are to be so affixed to real property as to become a part of real property, whether or not they are severable from the real property.” “‘Services’ means work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” (Civ. Code, § 1761, subd. (b).) As noted previously the CLRA does not apply to sale of real property. (Civ. Code, § 1754.)
Plaintiffs did not allege facts to show that the “services” defendants provided come within the CLRA because plaintiffs did not allege, and cannot allege, any facts to show “a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” (Civ. Code, § 1770.) Plaintiff did not allege facts to show defendants sold or sought to sell services to plaintiffs or that plaintiffs purchased services from defendants. According to the allegations of plaintiffs’ third amended complaint, Fidelity (a term plaintiffs used in all their pleadings to refer to both defendants) was the “trustee in foreclosures” on the Boulevard Property and the Gray’s Landing Property. Maraziti alleged that in its capacity as trustee, and in the course of foreclosing on the properties, Fidelity charged fees to plaintiffs that plaintiffs allegedly paid. Although Maraziti allegedly paid fees to Fidelity in connection with the foreclosure proceedings, those payments were not for services that defendants sold to him. Maraziti’s obligation to pay the fees resulted from the foreclosure on the deed of trust that secured his debt under the promissory note given for payment of the purchase price of the Gray’s Landing Property. Real property foreclosure proceedings are not transactions within the purview of the CLRA. To the extent plaintiffs contend otherwise, we must reject their claims.
The allegations in plaintiffs’ pleadings are so generic we cannot determine whether plaintiffs were the beneficiaries and in that capacity foreclosed on the properties or whether they were the obligors on notes secured by the real property and had their interests in the property foreclosed on. It is only from facts set out in other filings, including defendants’ demurrers and the pleadings in Gray’s Landing and Draper, that we are able to determine that plaintiffs are the obligors.
Hernandez v. Hilltop Financial Mortgage, Inc. (2007) 622 F.Supp.2d 842 (Hernandez), which plaintiffs rely on, is inapposite. The defendant in Hernandez provided financial services to the plaintiffs in the course of refinancing their home mortgage. Because the California Supreme Court had not addressed the issue, the federal court had to determine whether the California Supreme Court would conclude that a mortgage loan, and the activities involved in receiving and maintaining one, falls within the CLRA’s definition of a “good” or a “service.” (Hernandez, p. 849.) The district court in Hernandez held that the Supreme Court would conclude that the CLRA applied to the mortgage loans at issue in that case because the defendants did not just provide a loan to the plaintiffs, they also provided “services in developing an acceptable refinancing plan by which they could remain in possession of their home,” as alleged in the plaintiffs’ complaint. (Hernandez, at p. 851.) “[T]he situation... involves more than the mere extension of a credit line [and] [i]nstead... deal[s] not just with the mortgage loan itself, but also with the services involved in developing, securing and maintaining plaintiffs’ loan.” (Ibid.)
Although Hernandez, a United States District Court decision, is not published in the Federal Supplement, it is citable as persuasive, although not precedential, authority. Rule 8.1115 of the California Rules of Court only bars citation of unpublished California opinions and does not apply to unpublished decisions from other jurisdictions. (City of Hawthorne ex rel. Wohlner v. H&C Disposal Co. (2003) 109 Cal.App.4th 1668, 1678, fn. 5.)
Maraziti did not allege any facts to show that in the course of performing duties as the trustee in foreclosure defendants performed any “services” apart from those necessary to accomplish the foreclosure. In other words, Maraziti did not allege facts to show that the foreclosure was “a transaction intended to result or which results in the sale or lease of... services” to Maraziti.
Our conclusion that foreclosure proceedings are not transactions within the purview of the CLRA disposes of that cause of action as to both plaintiffs. Consequently, even if we had not concluded that Signature’s claims against defendants are barred as a result of the judgment in Draper, we would nevertheless conclude the trial court correctly sustained defendants’ demurrer on the CLRA cause of action as to both plaintiffs. Either conclusion renders moot the issue of whether Signature is a “consumer” within the meaning of the CLRA and thus has standing to bring such a claim. Although we conclude the trial court correctly resolved that issue, we will not address it because we conclude Signature’s claims against defendants are barred, and in any event the underlying foreclosure proceedings are not transactions that are subject to the CLRA.
DISPOSITION
The judgment of dismissal is affirmed. Defendants to recover costs on appeal.
We concur: Ramirez P.J., Miller J.