No. E064100.

RONALD FERGUSON, Plaintiff and Appellant, v. BANK OF AMERICA, N.A., Defendant and Respondent.

Court of Appeals of California, Fourth District, Division Two.

Attorney(s) appearing for the Case

Thomas Ogden for Plaintiff and Appellant.

Akerman, Karen Palladino Ciccone and Evan Forrest Anderson for Defendant and Respondent.


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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.




Plaintiff and appellant Ronald Ferguson purports in his notice of appeal to appeal from an order or judgment under Code of Civil Procedure section 904.1, subdivision (a)(3)-(13). No such judgment or order was ever entered. The notice of appeal was filed before the entry of a judgment of dismissal. However, we treat this appeal as timely filed and deem it to be an appeal from the judgment of dismissal following orders granting defendant and respondent Bank of America's (the Bank) motion to strike and sustaining its demurrer to the fourth amended complaint. Although the appellant's opening brief is unclear on this point, it appears that he is primarily attempting to obtain review of the order sustaining the Bank's demurrer to the first cause of action of the second amended complaint without leave to amend. The first cause of action is for breach of contract. We hold that he is entitled to review of that order, but that he has failed to state a cause of action. Accordingly, we affirm.

Facts and Procedure

As alleged in the second amended complaint, Ferguson owns a home in Big Bear City. In 2004, Ferguson took out a $650,000 first loan and a $50,000 second loan secured by his home. The trust deeds were by the Bank. In August 2009, Ferguson became unemployed and contacted the Bank by telephone to inquire about a loan modification. In 2011, after numerous contacts that are described in more detail post, the Bank denied a loan modification and began foreclosure proceedings after Ferguson defaulted on the first loan.

Ferguson filed a complaint alleging 13 causes of action. The Bank demurred, and before the hearing on the demurrer, Ferguson filed a first amended complaint. The Bank's demurrer to the first amended complaint was sustained. On November 27, 2013, Ferguson filed a second amended complaint. The Bank's demurrer to the second amended complaint was sustained with leave to amend the fifth and ninth causes of action and without leave to amend the first through fourth and sixth through eighth causes of action. The first cause of action was for breach of contract, the second was for fraud, the third was for negligent misrepresentation, and the fourth was for promissory estoppel. Ferguson filed a third amended complaint consisting of 16 causes of action. The Bank's demurrer to the third amended complaint was sustained as to the first cause of action (violation of Business and Professions Code section 17200) without leave to amend, and as to the second cause of action (breach of the covenant of good faith and fair dealing) with leave to amend. On the Bank's motion, the court struck the balance of the third amended complaint. Ferguson filed a fourth amended complaint alleging a first cause of action for breach of contract and a second cause of action for breach of the covenant of good faith and fair dealing. The Bank demurred and filed a motion to strike the first cause of action and the request for punitive damages. The court sustained the demurrer without leave to amend and granted the motion to strike. Ferguson filed his notice of appeal on July 20, 2015. The formal order and the judgment were filed July 22, 2015.


1. Scope of Review

The Bank contends that Ferguson's fourth amended complaint supersedes all previous complaints and that this court should consider only the allegations of that complaint in determining whether the trial court was correct in sustaining a demurrer thereto. Ferguson argues in his opening brief that he has adequately alleged causes of action for breach of contract, promissory estoppel, unfair competition, fraud and negligent misrepresentation. His citations to the record show that he is relying on the allegations of the second amended complaint to support his argument.

The Bank is generally correct. A plaintiff who amends a complaint pursuant to leave granted when a demurrer is sustained may not demand that the appellate court review the original pleading. However, when a demurrer to an earlier complaint is sustained without leave to amend, the appeal from a judgment of dismissal after a demurrer to a later complaint is sustained may review the earlier order as an "intermediate ruling . . . which involves the merits or necessarily affects the judgment or order appealed from. . . ." (Code Civ. Proc., § 906; see Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 774.) We therefore proceed to review the orders sustaining demurrers to the causes of action enumerated in Ferguson's opening brief.1

2. Standard of Review

Ferguson seeks review of the previous orders only to the extent they sustain demurrers, not in denying leave to amend. "`A demurrer tests the legal sufficiency of factual allegations in a complaint.' (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 42.) The standard of review on appeal from a dismissal after an order sustaining a demurrer is well established. `[W]e review the order de novo, exercising our independent judgment about whether the complaint states a cause of action as a matter of law. [Citations.]' (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1501.) We give the complaint a reasonable interpretation, and treat the demurrer as admitting all material facts properly pleaded. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) `We do not, however, assume the truth of contentions, deductions, or conclusions of fact or law. [Citation.]' (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.)" (Maral v. City of Live Oak (2013) 221 Cal.App.4th 975, 980.)

3. Breach of Contract

The elements of a breach of contract cause of action are: (1) the existence of a contract; (2) performance by the plaintiff; (3) breach by the defendant; and (4) damages. (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745.) Ferguson acknowledges that he must first plead the existence of a contract.

The essential elements of a contract include: (1) parties capable of contracting; (2) their consent; (3) a lawful object; and, (4) a sufficient cause or consideration. (Civ. Code, § 1550.) Ferguson contends that the terms of the contract are contained in the provisions of the Home Affordable Modification Program (HAMP). He alleges in substance that the Bank misinformed him in August 2009, that he could qualify for the program only if he missed a mortgage payment. After missing a payment, the Bank told him in September that he qualified for a "loan modification review," and that the Bank "would be sending a loan modification package to the Plaintiff in two weeks." Numerous delays and conflicting instructions from the Bank followed. Ferguson made some full and some reduced mortgage payments. Finally in March 2011, the Bank sent two loan modification packages to him, which he completed and returned. In April 2011, the Bank denied the loan modification requested by Ferguson. In August 2011, the Bank advised him to reapply for a loan modification. In September, the Bank advised Ferguson to resubmit additional information to start a loan modification program. The information had already been submitted numerous times. Finally, the Bank "did not place the Plaintiff in a permanent loan modification at the end of the three months trial modification program."

Nowhere does Ferguson allege that the Bank consented to enter into a contract with him; that is, he does not allege the Bank promised to modify his loan or to approve an application pursuant to HAMP. We determine, therefore, that he has failed to state a cause of action for breach of contract.

4. Promissory Estoppel

Ferguson alleges that the Bank "made a promise not to proceed with foreclosure proceedings and to provide Plaintiffs with a loan modification the Defendants knew that the Plaintiff would rely on their promise [sic]."

"The elements of promissory estoppel are (1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages `measured by the extent of the obligation assumed and not performed.'" (Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 692.)

The conclusion that the Bank promised not to proceed with foreclosure proceedings and to provide Ferguson with a loan modification is contradicted by the extensive recitation of facts common to all causes of action. We have reviewed the second amended complaint and cannot find a specific allegation that the Bank promised it would not proceed with foreclosure proceedings, or that it would provide Ferguson with a loan modification. In the absence of a clearly stated promise, the cause of action fails.

5. Unfair Competition

In the second amended complaint, Ferguson alleged violation of the unfair competition law (UCL). (Bus. & Prof. Code, § 17200.) However, Ferguson could not show a causal link between the purported violations and any economic injury he may have suffered. As such, Ferguson lacks standing to assert a claim under the UCL.

"Under the UCL, any person or entity that has engaged, is engaging or threatens to engage `in unfair competition may be enjoined in any court of competent jurisdiction.' [Citations.] `Unfair competition' includes `any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.'" (Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 520, overruled on other grounds as stated in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939, fn. 13.) However, private standing to bring a UCL action is restricted to "a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." (Bus. & Prof. Code, § 17204, italics added.) The loss of a home to foreclosure is sufficient economic injury to qualify under Business and Professions Code section 17204. (Majd v. Bank of America (2015) 243 Cal.App.4th 1293, 1304.)

Here, Ferguson did not plead the loss of his home. The economic injury that Ferguson argues he suffered was the payment of full or reduced installments on his loan from the Bank. However, he does not explain how the payment of an existing obligation, his mortgage, constitutes an economic injury. For this reason, we conclude that Ferguson does not have standing to bring an action under the UCL.

6. Fraud and Negligent Misrepresentation

Ferguson argues in his opening brief that the Bank fraudulently and negligently misrepresented "how the HAMP process worked." He was "told he qualified for HAMP, was put in a three month trial period, and was never given his permanent loan modification." However, the second amended complaint alleges generally only that the Bank made a promise to Ferguson to modify his loan, which the Bank never intended to perform.

"Negligent misrepresentation is a form of deceit, the elements of which consist of (1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed, and (5) damages. [Citation.]" (Fox v. Pollack (1986) 181 Cal.App.3d 954, 962.) Fraudulent misrepresentation requires knowledge of the falsity. (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) The Bank succinctly sets forth the additional requirement, fatal to Ferguson's complaint, that each element in these two causes of action must be pled with particularity, requiring facts to be pled that show "`"`how, when, where, to whom, and by what means'"'" the intentional or negligent representations were made. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184, citing Lazar v. Superior Ct. (1996) 12 Cal.4th 631, 645.)

Here, the complaint alleges specifically that the Bank misrepresented to Ferguson that he did not qualify for HAMP, and that after numerous delays the Bank sent him a loan modification application, which the Bank ultimately denied. The complaint does not allege specifically that the Bank promised a loan modification, as by specifying who made the promise, when they made it, and what exactly they said that constituted a promise. Ferguson fails to state a cause of action for fraud and negligent misrepresentation.


The judgment of dismissal is affirmed.

Respondent shall recover its costs on appeal.

McKINSTER, Acting P. J. and SLOUGH, J. concur.


* Retired judge of the Riverside Superior Court assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
1. Although Ferguson attempted to re-allege causes of action for breach of contract and breach of the covenant of good faith and fair dealing in his fourth amended complaint and the Bank's demurrers thereto were sustained, it is apparent that in granting the motion to strike, the trial court was declining to reconsider its earlier rulings on demurrers to the same causes of action in the second amended complaint. We therefore treat those earlier rulings as the operative trial court decisions.


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