1 UNITED STATES BANKRUPTCY COURT 2 EASTERN DISTRICT OF CALIFORNIA 3 In re: ) Case No. 24-23489-B-11 4 ) SUKHRAJ S. PAMMA dba SUKHRAJ S. ) Adversary No. 25-2015 5 PAMMA FARMS, ) ) DC No. DJN-3 6 ) 7 Debtor(s). ) ________________________________) 8 ) BALRAJ DHILLON, INDERJIT ) 9 DHILLON, MANDIP DHILLON, and ) JASPREET DHILLON, ) 10 ) ) 11 Plaintiff(s), ) ) 12 v. ) ) 13 U.S. BANK NATIONAL ASSOCIATION, ) as Custodian/Trustee for ) 14 Federal Agricultural Mortgage ) Corporation Programs; CITIZENS ) 15 BUSINESS BANK, as Successor to ) Suncrest Bank; SUKHRAJ SINGH ) 16 PAMMA; and JAISMIN KAUR PAMMA, ) ) 17 ) 18 Defendant(s). ) ________________________________) 19 MEMORANDUM DECISION GRANTING IN PART 20 AND DENYING IN PART CITIZENS BANK’S MOTION TO DISMISS 21 I. Introduction 22 On January 28, 2025, plaintiffs Balraj Dhillon, Inderjit 23 Dhillon, Mandip Dhillon and Jaspreet Dhillon (“Plaintiffs”) filed 24 a Complaint against defendants U.S. Bank National Association, as 25 Custodian/Trustee for Federal Agricultural Mortgage Corporation 26 Programs; Citizens Business Bank, as Successor to Suncrest Bank; 27 Sukhraj Singh Pamma; and Jaismin Kaur Pamma (“Defendants”) 28 1 initiating this adversary proceeding. Docket 1. On March 27, 2 2025, defendant Citizens Business Bank, as successor by merger to 3 Suncrest Bank (“Citizens Bank”), filed a Motion to Dismiss the 4 Third Through Fifth Causes of Action from the Adversary Complaint 5 Pursuant to Federal Rules of Civil Procedure, Rule 12(b)(6). 6 Docket 30. On May 27, 2025, the court issued its ruling orally 7 on the record, granting the motion to dismiss without prejudice 8 and allowing Plaintiffs an opportunity to amend their complaint 9 by June 17, 2025. Order, Docket 69; Court Audio, Docket 60. 10 On June 17, 2025, Plaintiffs filed a First Amended Complaint 11 (“FAC”) and supporting Exhibits. FAC, Docket 73; Exs., Docket 12 74. Citizens Bank thereafter filed a Motion to Dismiss First 13 Amended Complaint Pursuant to Federal Rules of Civil Procedure 14 Rule 12(b)(6) (“Motion”). Citizens Bank moves to dismiss Counts 15 4 through 7. Mot. 3:2-5, Docket 88. Plaintiffs filed an 16 opposition. Citizens Bank filed a reply. For the reasons below, 17 18 the Motion will be granted in part and denied in part.1 The 19 Motion will be granted as to Count 4 which will be dismissed with 20 prejudice. The Motion will be denied as to Counts 5, 6, and 7. 21 22 II. Relevant Facts 23 A. Facts Alleged in the First Amended Complaint 24 The subject of this adversary proceeding stems from 25 26 27 1The court has reviewed and considered the Motion, opposition, and reply. The court has also reviewed and takes 28 judicial notice of the docket. See Fed. Evid. 201(c)(1). Oral argument is not necessary and will not assist in the decision- making process. See Local Bankr. R. 1001-1(f), 9014-1(h). 1 Plaintiffs’ purchase of real property identified as Sutter County 2 APN 10-210-023 (“Parcel 23”) on September 30, 2022. FAC 2:18-21, 3 Docket 73. Plaintiffs purchased Parcel 23 from defendant-debtor 4 Sukhraj S. Pamma (“Pamma”) for $3,024,035.00. Id. at 2:22-24. 5 Pamma and his wife, defendant Jaismin Kaur Pamma, are the 6 borrowers on an outstanding loan made by Suncrest Bank on or 7 about August 3, 2016, in the original principal amount of 8 $4,050,000 (“2016 Suncrest Loan”). Id. at 3:7-9. The 2016 9 Suncrest Loan was cross-collateralized with other parcels of real 10 property the Pammas owned. Id. at 3:9-22. 11 Plaintiffs engaged the title company, Old Republic Title 12 Company (“ORTC”), to hold escrow for the transaction. ORTC 13 issued written preliminary reports for Parcel 23 on or about 14 April 2022 and September 2022, in each case listing as exceptions 15 on title two deeds of trust in favor of Suncrest Bank as 16 “Beneficiary/ Lender:” (a) the first lien Sutter County deed of 17 18 trust securing the 2016 Suncrest Loan; and (b) a third lien deed 19 of trust securing a $4,630,000 loan made to the Pammas on or 20 about March 4, 2020 (“2020 Suncrest Loan”). ORTC, as escrow 21 agent for Plaintiffs, submitted to Citizens Bank two separate 22 written requests for payoff demand statements, one seeking a 23 statement of the amount of the unpaid balance on the 2016 24 Suncrest Loan and one seeking a statement of the amount of the 25 unpaid balance on the 2020 Suncrest Loan. Id. at 4:4-12. 26 In response to these requests, Citizens Bank submitted to 27 ORTC two written payoff demand statements demanding one payment 28 totaling $1,197,730.82 for the 2016 Suncrest Loan and the other payment totaling $408,000.00 for the 2020 Suncrest Loan. Id. at 1 4:13-17. Plaintiffs believed at the close of escrow and after 2 paying these two demands in full that they had purchased Parcel 3 23 in fee title absolute without any encumbrances. Id. at 4:17- 4 23. 5 Citizens Bank never informed ORTC that it had previously 6 assigned its interest in the 2016 Suncrest Loan, or that Citizens 7 Bank did not have the authority to demand and accept payoff of 8 that obligation from Plaintiffs’ purchase escrow, or that 9 Citizens Bank did not have authority to release and reconvey the 10 2016 Sutter County deed of trust. Id. at 4:24-5:3. 11 At the close of escrow, ORTC disbursed a portion of 12 Plaintiffs’ purchase funds to satisfy in full Citizens Bank’s two 13 payoff demand statements. Id. at 5:4-7. Plaintiffs believed 14 that the deeds of trust associated with the 2016 Suncrest Loan 15 and 2020 Suncrest Loan were paid off in full and extinguished. 16 Id. at 2:7-12. 17 18 Following the close of escrow, Citizens Bank caused the deed 19 of trust associated with the 2020 Suncrest Loan to be reconveyed 20 as against Parcel 23, but Citizens Bank did not reconvey the deed 21 of trust associated with the 2016 Suncrest Loan. Id. at 5:13-16. 22 ORTC then made repeated emails requesting Citizens Bank reconvey 23 the deed of trust associated with the 2016 Suncrest Loan, 24 including on February 2023, March 2023, April 2023, July 2023, 25 August 2023, September 2023, October 2023, November 2023, 26 December 2023, January 2024, February 2024, March 2024, and April 27 2024. Id. at 5:16-20. Citizens Bank never advised it lacked 28 authority to reconvey the 2016 Sutter County deed of trust or that it had assigned the 2016 Suncrest Loan. 1 However, on April 29, 2024, Citizens Bank recorded a 2 Substitution of Trustee and a Partial Reconveyance of Parcel 23 3 under the Sutter Deed of Trust, as Document No. 2024-0003484 in 4 the Official Records of Sutter County (“Parcel 23 Reconveyance”). 5 Id. at 6:1-3. Then, on October 1, 2024, Citizens Bank recorded a 6 Rescission of Reconveyance as Document No. 2024-0008602 in the 7 Official Records of Sutter County, purporting to rescind the 8 Parcel 23 Reconveyance of the Sutter Deed of Trust as against 9 Plaintiffs’ Parcel 23 (“Recision”). Id. at 6:13-16. Defendant 10 U.S. Bank National Association, as Custodian/ Trustee for Federal 11 Agricultural Mortgage Corporation Programs (“FAMC”), now contends 12 it had been assigned the 2016 Suncrest Loan and associated deeds 13 of trust in Sutter and Butte Counties. Id. at 6:9-13. 14 Plaintiffs assert that Citizens Bank actively and 15 affirmatively misrepresented through the payoff demand statements 16 submitted to Plaintiffs’ escrow agent, ORTC, which Citizens Bank 17 18 intended and reasonably expected would be communicated to and 19 relied upon by Plaintiffs as buyers in the subject escrow, that 20 Citizens Bank was the beneficiary of the 2016 Sutter County deed 21 of trust at the time it demanded and accepted the $1,197,730.82 22 payoff for Parcel 23. Id. at 6:4-9. 23 Plaintiffs assert that with the exception of Parcel 23 now 24 owned by Plaintiffs, at the time of the bankruptcy petition, 25 title to the real property secured by the 2016 deeds of trust 26 remained in the Pammas, either jointly or singly, as the 27 borrowers on the 2016 Loan. Id. at 6:20-23. 28 FAMC has caused to be recorded a Notice of Default and Election to Sell Parcel 23 (“NOD”). Id. at 6:20-23. FAMC intends 1 to notice a non-judicial foreclosure sale of only Parcel 23 under 2 the 2016 Sutter County deed of trust, the only parcel among its 3 real property security for the 2016 Suncrest Loan that its 4 borrowers, the Pammas, no longer own. Id. at 7:1-3. 5 Plaintiffs allege they learned for the first time on 6 September 26, 2024, that FAMC claimed it was the holder of the 7 2016 Sutter County deed of trust, notwithstanding payoff to 8 Citizens Bank and Citizens Bank reconveying Parcel 23 to 9 Plaintiffs. Id. at 7:8-16. Plaintiffs assert the statute of 10 limitations has been tolled by Citizens Bank’s conduct, including 11 affirmative acts and omissions, and that the statute of 12 limitations only began to run when Plaintiffs learned that FAMC 13 claimed to be holder of the 2016 Sutter County deed of trust on 14 September 26, 2024. Id. at 8:8-17. 15 Plaintiffs filed seven claims for relief in the FAC based on 16 these factual allegations. Citizens Bank only seeks dismissal of 17 18 Counts 4 through 7, so the court only addresses those Counts. 19 The specifics of Counts 4 through 7 are discussed in 20 Section IV., infra. 21 22 III. Legal Standard 23 A complaint may be dismissed for “failure to state a claim 24 upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6); 25 Fed. R. Bankr. P. 7012(b). “A Rule 12(b)(6) dismissal may be 26 based on either a lack of a cognizable legal theory or the 27 absence of sufficient facts alleged under a cognizable legal 28 theory.” Johnson v. Riverside Healthcare System, LP, 534 F.3d 1 1116, 1121 (9th Cir. 2008). 2 “To survive a motion to dismiss, a complaint must contain 3 sufficient factual matter, accepted as true, to ‘state a claim to 4 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 5 U.S. 662, 678 (2009) (quoting Bell Atlantic Corporation v. 6 Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial 7 plausibility when the plaintiff pleads factual content that 8 allows the court to draw the reasonable inference that defendant 9 is liable for the misconduct alleged.” Id. (citing Twombly, 550 10 U.S. at 556). 11 In ruling on a Rule 12(b)(6) motion to dismiss, the court 12 accepts all factual allegations as true and construes them, and 13 reasonable inferences drawn from them, in a light most favorable 14 to the non-moving party. Arizona Students’ Association v. 15 Arizona Board of Regents, 824 F.3d 858, 864 (9th Cir. 2016). 16 Legal conclusions are not accepted as true. Iqbal, 556 U.S. at 17 18 678. 19 The court may also consider limited materials outside the 20 pleadings. These include documents attached to the complaint, 21 documents incorporated by reference in the complaint, and matters 22 subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 23 763 (9th Cir. 2007) (per curium). The latter includes the 24 court’s own records. Kelly v. Johnston, 111 F.2d 613, 615 (9th 25 Cir. 1940). 26 If the court takes judicial notice of particular materials, 27 the court must “consider—and identify—which fact or facts it is 28 noticing[.] Just because the document itself is susceptible to judicial notice does not mean that every assertion of fact within 1 that document is judicially noticeable for its truth.” Khoja v. 2 Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018). 3 Regarding incorporation by reference, “a defendant may seek 4 to incorporate a document into the complaint if the plaintiff 5 refers extensively to the document or the document forms the 6 basis of the plaintiff's claim.” Id. at 1002 (internal 7 quotations omitted). The court is tasked with engaging in a 8 factual determination regarding how extensively a complaint 9 relies on a certain document that a defendant seeks to have 10 incorporated into the record by reference. Importantly, “if the 11 document merely creates a defense to the well-pled allegations in 12 the complaint, then that document did not necessarily form the 13 basis of the complaint. Otherwise, defendants could use the 14 doctrine to insert their own version of events into the complaint 15 to defeat otherwise cognizable claims. . . Although the 16 incorporation- by-reference doctrine is designed to prevent 17 18 artful pleading by plaintiffs, the doctrine is not a tool for 19 defendants to short-circuit the resolution of a well-pleaded 20 claim.” Id. at 1002-03. 21 22 IV. Analysis 23 As an initial matter, the court denies the request made by 24 Citizens Bank to incorporate by reference various documents filed 25 as Exhibits at Docket 90. The court should only consider 26 incorporating documents by reference when the complaint refers so 27 extensively to the documents that the documents form the basis of 28 the plaintiff’s claim. In this case, the FAC makes reference to 1 various communications between Plaintiffs, ORTC, and Citizens 2 Bank that form the basis of the claims. It is true that the 3 payoff demand statements are referenced and partially form the 4 basis of Count 4; however, the basis of Count 4 also alleges 5 misrepresentations made outside the contents of the payoff 6 demands. See FAC 12:13-22, Docket 73. 7 The court only considers well-pleaded factual allegations 8 within the four corners of the FAC for purposes of the Motion. 9 Otherwise, the court risks considering an incomplete record by 10 allowing in certain documents through incorporation by reference, 11 thereby improperly treating a Rule 12(b)(6) motion as a Rule 56 12 summary judgment motion. 13 However, the court does take judicial notice of Exhibit 3, 14 the recorded assignment of the 2016 Sutter County deed of trust 15 as Instrument Nos. 2016-0028481 and 2016-0028481. Ex. 3, Docket 16 90. This document is public information from the county 17 18 recorder’s office. Exhibit 3 is generally known or can be 19 accurately and readily determined from sources whose accuracy 20 cannot be reasonably questioned. Fed. R. Evid. 201. 21 A. Count 4 - Negligent Misrepresentation Against Citizens Bank 22 Plaintiffs allege in Count 4 a claim for negligent 23 misrepresentation based on Citizens Bank making affirmative 24 misrepresentations throughout the sale and purchase process of 25 Parcel 23. The FAC states in Count 4 that these affirmative 26 misrepresentations include Citizens Bank stating it has already 27 reconveyed the 2016 Sutter County deed of trust when it had not. 28 FAC 12:17-18, Docket 73. The FAC also alleges Citizens Bank 1 engaged in an affirmative misrepresentation when it actually 2 eventually reconveyed Parcel 23. Id. at 12:18. Citizens Bank 3 also never disclosed the fact it lacked authority to release the 4 2016 Sutter County deed of trust or that it lacked authority to 5 accept payment for any outstanding amounts owed on the 2016 6 Sutter County deed of trust. The latter factual allegation is an 7 omission while the former allegations are affirmative statements. 8 In California, a cause of action for negligent 9 misrepresentation contains five elements: “(1) the 10 misrepresentation of a past or existing material fact, (2) 11 without reasonable ground for believing it to be true, (3) with 12 intent to induce another's reliance on the fact misrepresented, 13 (4) justifiable reliance on the misrepresentation, and (5) 14 resulting damage.” Apollo Capital Fund, LLC v. Roth Capital 15 Partners, LLC, 70 Cal. Rptr. 3d 199, 213 (Cal. Ct. App. 2007) 16 (citing Shamsian v. Atlantic Richfield Co., 132 Cal.Rptr.2d 635 17 18 (2003)). Importantly, “a positive assertion is required; an 19 omission or an implied assertion or representation is not 20 sufficient.” Id. Negligent misrepresentation does not require 21 actual knowledge of falsity or the intent to deceive. Id. 22 The statute of limitations to bring a negligent 23 misrepresentation claim is two years. Cal. Code Civ. P. § 339; 24 Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d 1049, 1054 25 (9th Cir. 2008). The date from which the statute of limitations 26 begins to run is when the injury accrues. A cause of action 27 “accrues when the claim is complete with all of its elements.” 28 Id. (internal citations omitted). The date would ordinarily start on the date of injury, but there are factors that can 1 postpone accrual. Accrual is postponed until the plaintiff 2 “either discovers or has reason to discover the existence of a 3 claim. . . [However,] so long as there is a reasonable ground for 4 suspicion, the plaintiff must go out and find the facts; she 5 cannot wait for the facts to find her.” Id. (internal citations 6 omitted). 7 (i). Statute of Limitations 8 In this case, the cause of action for negligent 9 misrepresentation in Count 4 still sounds in negligence which 10 means it is time-barred by the applicable two-year statute of 11 limitations.2 The injury in question accrued at the close of 12 escrow when Citizens Bank did not reconvey the 2016 Sutter County 13 deed of trust on September 30, 2022. FAC 5:5, Docket 73. At 14 that point in time, surely Plaintiffs were on inquiry notice that 15 harm had occurred, and Plaintiffs were under the obligation to 16 conduct a reasonable inquiry to discover the extent of the harm, 17 18 and to ultimately bring a timely action. The two-year statute of 19 2The negligent misrepresentation claim alleged in the 20 initial Complaint was based on an express allegation of a duty 21 and, thence, a standard of care making it a claim sounding more in negligence than fraud. Docket 1, Compl., at 8:18-22. The 22 negligent misrepresentation claim in Count 4 of the FAC continues to implicate a duty. It alleges that Citizens Bank knew its 23 representations made in connection with the payoff demands were false, incomplete, or inaccurate and had no reasonable ground for 24 believing them to be true and complete because the payoff demands 25 were submitted pursuant to or in accordance with California Civil Code § 2943. California Civil Code § 2943 imposes a statutory 26 duty to submit payoff demands that are true, correct, and complete. See Cal. Civ. Code § 2943(b)(1), (c); see also 27 Milestone Financial, LLC v. Moon (In re Moon), 648 B.R. 73, 90 n.8 (9th Cir. BAP 2023). The point here is that the allegations 28 made in support of the negligent misrepresentation claim continue to implicate a duty, and thence a standard of care, which is the hallmark of a negligence claim. 1 limitations would therefore expire on September 30, 2024, unless 2 some mitigating factors delayed discovery. 3 Plaintiffs argue that the injury accrued on September 26, 4 2024, when FAMC first informed Plaintiffs that it was the holder 5 of the 2016 Sutter County deed of trust, and so any applicable 6 statute of limitations had been tolled. FAC 7:8-27, Docket 73. 7 The court disagrees. When Citizens Bank did not reconvey the 8 2016 Sutter County deed of trust at close of escrow on September 9 30, 2022, Plaintiffs had reason to investigate the facts and 10 discover the extent of the harm for purposes of accrual. 11 Plaintiffs further argue the statute of limitations had been 12 tolled because Citizens Bank’s conduct, its acts and omissions, 13 prevented Plaintiff from discovering the cause of action at close 14 of escrow on September 30, 2022. FAC 8:8-17, Docket 73. The 15 court again disagrees. Plaintiffs attempt to invoke here the 16 common law principle of delayed discovery. The standard for 17 18 pleading delayed discovery is that “the plaintiff must 19 specifically plead facts which show (1) the time and manner of 20 discovery and (2) the inability to have made earlier discovery 21 despite reasonable diligence.” Yumul v. Smart Balance, Inc., 733 22 F.Supp. 1134, 1141 (C.D. Cal. 2010) (quoting In re Conseco 23 Insurance Co. Annuity Marketing & Sales Practices Litigation, 24 2008 WL 4544441, *8 (N.D. Cal., Sept. 30, 2008). 25 The court concludes that the doctrine of delayed discovery 26 is not in effect. The case Javier v. Assurance IQ, LLC, 649 27 F.Supp.3d 891 (N.D. Cal. 2023), is instructive on this point. In 28 Javier, the plaintiff, Javier, brought a complaint against defendant Assurance IQ, LLC et al. (“Assurance”) alleging 1 Assurance improperly collected data relating to Javier’s online 2 visit to Assurance’s website, including “keystrokes, mouse 3 clicks, and other electronic communications.” Id. at 894. 4 Javier visited the website in January of 2019 but argued delayed 5 discovery prevented accrual until Javier discovered the injury in 6 April of 2020 when the data collection was actually produced to 7 him. Id. at 901. The district court did not find this argument 8 persuasive. The district court held, “under the delayed 9 discovery doctrine, knowledge of injury, not knowledge of a 10 particular defendant's role in the injury, triggers inquiry 11 notice.” Id. Javier had pleaded facts in his complaint 12 indicating he had assumed Assurance was collecting his 13 information in January 2019, so Javier was on inquiry notice on 14 that date. Id. at 902. 15 In this case, Plaintiffs plead that Citizens Bank did not 16 reconvey the 2016 Sutter County deed of trust at close of escrow 17 18 on September 30, 2022. ORTC, Plaintiffs agent, clearly knew of 19 the harm, which was evidenced by ORTC’s multiple demands to 20 Citizens Bank to reconvey the 2016 Sutter County deed of trust. 21 Moreover, Plaintiffs affirmatively plead that while the deed of 22 trust for the 2020 Suncrest Loan recorded against Parcel 23 was 23 reconveyed when escrow closed on September 30, 2022, the deed of 24 trust for the 2016 Suncrest Loan was not similarly (and 25 simultaneously) conveyed at the close of escrow. Compl., at 26 5:13-16. Certainly, the conveyance of one deed of trust and not 27 the other is enough to trigger suspicion of, and therefore the 28 need to inquire about, a potential problem. Like in Javier, Plaintiffs’ own allegations in the FAC belie the argument that 1 discovery was delayed. 2 The court concludes the cause of action had fully accrued on 3 September 30, 2022, at the close of escrow. All facts giving 4 rise to the cause of action had occurred on that day, thereby 5 creating a duty on Plaintiffs to conduct a reasonable inquiry 6 into the facts surrounding the cause of action. Plaintiffs 7 failed to timely conduct a reasonable inquiry into the facts. 8 Moreover, Plaintiffs fail to plead there was an inability to have 9 made earlier discovery despite reasonable diligence. In fact, 10 Plaintiffs allege that at the close of escrow, the facts are that 11 Citizens Bank did not reconvey the 2016 Sutter County deed of 12 trust. FAC 5:13-16, Docket 73. At that very moment surely 13 Plaintiffs were implored to conduct reasonable diligence into the 14 facts of the injury. Any affirmative misrepresentations made 15 after close of escrow by Citizens Bank do not alleviate this 16 reasonable diligence requirement; instead, later affirmative 17 18 misrepresentations would only further compound Plaintiffs’ duty 19 to inquire into the facts of the injury given Citizens Bank 20 failure to reconvey the 2016 Sutter County deed of trust at close 21 of escrow on September 30, 2022. 22 It is true that on April 29, 2024, Citizens Bank recorded 23 the Parcel 23 Reconveyance, purportedly reconveying the 2016 24 Sutter County deed of trust to Plaintiffs at the behest of ORTC’s 25 repeated demands. However, this purported reconveyance does not 26 change the fact that Plaintiffs were still on notice of the 27 injury on September 30, 2022, and therefore had a duty to conduct 28 a reasonable inquiry. The statute of limitations for a negligent misrepresentation 1 claim is two years, and it began to run on September 30, 2022. 2 Delayed discovery was not in effect under the facts as pleaded in 3 the FAC. Therefore, the final day that this action could have 4 been brought was on September 30, 2024. The action was brought 5 on January 28, 2025, outside the statute of limitations period. 6 Therefore, the court concludes that the cause of action for 7 negligent misrepresentation, Count 4, is not timely and must be 8 dismissed. 9 (ii). Elements of Negligent Misrepresentation 10 There is an additional or alternative basis to dismiss Count 11 4 from the FAC: the FAC fails to allege a cause of action for 12 negligent misrepresentation because the FAC fails to show 13 reasonable reliance on any affirmative misrepresentations. 14 Citizens Bank urges the court to consider the fact that the 15 assignment of the 2016 Sutter County deed of trust was recorded 16 years before the sale ever took place, and Plaintiffs, or at 17 18 least ORTC as their agent, had constructive knowledge that 19 Citizens Bank was not beneficiary of the 2016 Sutter County deed 20 of trust. Id. at 14:27-15:18. Therefore, there was no 21 justifiable reliance on any misrepresentations. The court 22 agrees. 23 It is true in California that “constructive notice of an 24 interest in real property is imparted by the recording and proper 25 indexing of an instrument in the public records.” First Bank v. 26 East West Bank, 132 Cal. Rptr. 3d 267, 271 (Cal. Ct. App. 2011). 27 The assignment of the 2016 Sutter County deed of trust was public 28 information. It was properly recorded and indexed on August 4, 2016. Therefore, ORTC had constructive knowledge of the 1 assignment, and this knowledge was imputed to Plaintiffs as 2 principal in the agency relationship. It was not justifiable to 3 rely on misrepresentations made by Citizens Bank when ORTC and 4 Plaintiffs had constructive knowledge that Citizens Bank no 5 longer was beneficiary of the 2016 Sutter County deed of trust. 6 Therefore, the court concludes that Plaintiffs have not 7 adequately pleaded justifiable reliance on the alleged 8 misrepresentations, and so Count 4 must be dismissed for failure 9 to state a claim on this alternative and independent basis. 10 B. Count 5 - Breach of Contract and the Implied Covenant 11 of Good Faith and Fair Dealing Against Citizens Bank 12 Plaintiffs allege in Count 5 that Plaintiffs on the one 13 hand, through their escrow agent ORTC, and Citizens Bank on the 14 other hand, entered into a contract whereby Citizens Bank would 15 release the 2016 Sutter County deed of trust upon receipt of the 16 $1,197,730.82 in full satisfaction of its payoff demand (“Payoff 17 Agreement”). FAC 14:9-13, Docket 73. Plaintiffs allege: 18 If it is determined that Plaintiffs’ fee title to 19 Parcel 23 is subject to any right, title, estate, lien or interest of defendants, including the Sutter Deed of 20 Trust, which Plaintiffs deny, Plaintiffs are informed and believe that CBB is in breach of the Payoff 21 Agreement and the implied covenant of good faith and fair dealing therein by purporting to rescind the 22 Parcel 23 Reconveyance and by failing to release, extinguish and/or reconvey the Sutter Deed of Trust as 23 to Parcel 23. 24 Id. at 15:1-5. Plaintiffs allege that they have performed each 25 term of the contract required on their part, and that as a direct 26 and proximate cause of Citizens Bank’s breach of the Payoff 27 Agreement, Plaintiffs have suffered damages in an amount to be 28 proven at trial. Id. at 15:9-12. In California, to plead a breach of contract claim a 1 “plaintiff must allege (1) a contract existed, (2) plaintiff 2 performed or is excused for nonperformance, (3) defendant 3 breached, and (4) plaintiff was damaged.” Satvati v. Allstate 4 Northbrook Indemnity Company, 634 F.Supp.3d 792, 797 (C.D. Cal. 5 2022) (quoting Walsh v. W. Valley Mission Cmty. Coll. Dist., 78 6 Cal.Rptr.2d 725 (Cal. Ct. App. 1998). “A written contract may be 7 pleaded either by its terms—set out verbatim in the complaint or 8 a copy of the contract attached to the complaint and incorporated 9 therein by reference—or by its legal effect.” Heritage Pac. Fin., 10 LLC v. Monroy, 215 Cal.App.4th 972, 993 (2013)(citing McKell v. 11 Washington Mutual, Inc. 142 Cal.App.4th 1457, 1489 (2006)). “In 12 order to plead a contract by its legal effect, plaintiff must 13 allege the substance of its relevant terms.” Id. “This is more 14 difficult, for it requires a careful analysis of the instrument, 15 comprehensiveness in statement, and avoidance of legal 16 conclusions.” Id. 17 18 The implied covenant of good faith is “implied as a 19 supplement to express contractual covenants to prevent a 20 contracting party from engaging in conduct that frustrates the 21 other party's rights to the benefits of the agreement.” Thompson 22 Pacific Construction, Inc. V. City of Sunnyvale, 66 Cal.Rptr.3d 23 175, 188 (Cal. Ct. App. 2007) (quoting Charpentier v. Los Angeles 24 Rams Football Co., 89 Cal.Rptr.2d 115 (Cal. Ct. App. 1999)). If 25 the breach of the implied covenant of good faith and fair dealing 26 does not sound in tort, then only garden-variety contractual 27 damages are recoverable. Id. 28 Citizens Bank’s first argument is that the court should read the payoff demands included as Exhibits 1 and 2 to the Motion and 1 find that the payoff demands are not contracts between Plaintiffs 2 and Citizens Bank. Mem. 17:23-18:10, Docket 92. As addressed in 3 Section IV., supra, the court is declining to consider these 4 additional documents at this stage, and so this argument is 5 without merit. 6 Citizens Bank’s second argument is that, contrary to 7 Plaintiffs’ allegations, Citizens Bank did not promise to 8 reconvey the 2016 Sutter County deed of trust upon receipt of 9 payment. Mem. 18:17-18, Docket 92. This second argument fails 10 for two reasons. First, Citizens Bank is again referring to 11 Exhibits 1 and 2 that the court is not considering. 12 Second, the court accepts all factual allegations as true 13 and construes them, and reasonable inferences drawn from them, in 14 a light most favorable to the Plaintiffs as the non-moving party. 15 Therefore, the court accepts as true that Plaintiffs, through 16 their authorized escrow agent ORTC, on the one hand, and 17 18 defendant Citizens Bank, on the other hand, entered into an 19 agreement whereby Citizens Bank agreed that upon receipt of 20 $1,197,730.82 in full satisfaction of its payoff demand, Citizens 21 Bank would release, extinguish and/or reconvey the 2016 Sutter 22 County deed of trust as a lien against Parcel 23. FAC 14:9-13, 23 Docket 73. The court, therefore, does not consider Citizens 24 Bank’s contrary allegation that it did not promise to reconvey 25 the 2016 Sutter County Deed of Trust upon receipt of payment. 26 See Mem. 18:17-18, Docket 92. 27 Citizens Bank’s third argument is that Plaintiffs have not 28 alleged an actual breach of contract because Plaintiffs have only alleged a potential future breach that is contingent upon events 1 that may or may not occur. Id. at 18:24-28. Citizens Bank cites 2 Clinton v. Acequia, Inc., 94 F.3d 568 (9th Cir. 1996), in support 3 of this argument. 4 In Clinton, plaintiff Clinton brought a breach of contract 5 claim as Count 4. Id. at 572. Count 4 of the complaint alleged 6 defendant Acequia failed to timely liquidate a corporation by the 7 agreed upon deadline of the year 1997. Id. However, the action 8 was considered in 1996, one year before the final deadline for 9 Acequia to liquidate. The court was tasked with deciding whether 10 Count 4 was ripe for consideration. The Ninth Circuit held: 11 Clinton’s breach of contract claim presents no live 12 case or controversy. The parties agree that, if an agreement to liquidate the corporation even exists, 13 Acequia has until 1997 to perform its obligation. We have no way of knowing whether Acequia will actually do 14 so, but a case is not ripe where the existence of the dispute itself hangs on future contingencies that may 15 or may not occur. 16 Id. 17 Unlike the facts in Clinton, Count 5 in this case has fully 18 accrued and was ripe for consideration on or around September 30, 19 2022, when the 2016 Sutter County deed of trust was not 20 reconveyed at close of escrow. See Thomas v. Anchorage Equal 21 Rights Com’n., 220 F.3d 1134, 1139 (9th Cir. 2000) (discussing 22 ripeness and the idea that a cause of action is ripe when the 23 alleged injury is “real and concrete rather than speculative and 24 hypothetical.”). It is true Plaintiffs appear to plead that 25 there will only have been a breach of contract if it is later 26 determined that fee title to Parcel 23 is subject to any 27 defendants’ rights. See FAC 15:1-5, Docket 73. However, it is 28 also true that Plaintiffs have alleged in the FAC facts to 1 support there being a contract and the contract was breached when 2 Citizens Bank indicated it would, and then did not, reconvey the 3 2016 Sutter County deed of trust. See Id. at 6:4-19. The court 4 is able to draw reasonable inferences that the breach had 5 occurred, despite language in Count 5 suggesting the breach is 6 contingent upon a further determination. 7 Finally, Citizens Bank’s fourth argument is that Plaintiffs 8 fail to adequately plead a contract because Plaintiffs did not 9 attach the alleged contract to the FAC, allege the contract 10 verbatim, or allege the legal effect of the contract, as is 11 required when pleading a breach of contract claim. Mem. 19:3-14, 12 Docket 92. Citizens Bank cites the court to Heritage Pac. Fin., 13 LLC v. Monroy, 215 Cal.App.4th 972, 993 (2013); Parrish v. Nat'l 14 Football League Players Ass'n, 534 F.Supp.2d 1081, 1094 (N.D. 15 Cal. 2007); and Gilmore v. Lycoming Fire Ins. Co. 55 Cal. 123, 16 124 (1880), in support of this argument. 17 18 In Heritage, the appellate court cited the same standard for 19 pleading a contract that Citizens Bank cites. Specifically, the 20 standard for pleading a breach of contract claim is: 21 A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of 22 the contract attached to the complaint and incorporated therein by reference—or by its legal effect. In order 23 to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms. This is 24 more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and 25 avoidance of legal conclusions. 26 Heritage, 215 Cal.App.4th at 993 (citing McKell v. Washington 27 Mutual, Inc. 142 Cal.App.4th 1457, 1489 (2006)). 28 The appellate court in Heritage found a contract had not been properly alleged because “the allegations in Heritage’s 1 pleadings did not set forth with specificity any assignment of 2 the tort claims.” Id. Moreover, due to the lack of specific 3 allegations supporting an assignment, the trial court ordered 4 Heritage to “attach the written agreement that evinced an intent 5 to assign the tort claims,” and Heritage failed to do so. Id. 6 For these reasons, the appellate court decided the trial court 7 did not err. 8 In this case, contrary to the facts in Heritage, Plaintiffs 9 have specifically alleged that there was a contract between ORTC, 10 as Plaintiffs agent, on the one hand, and Citizens Bank on the 11 other hand. FAC 14:9-19, Docket 73. The alleged contract is not 12 some far-fetched agreement; the contract as alleged clearly 13 exists for the purpose of purchasing Parcel 23 free and clear. 14 Heritage is readily distinguishable from this case. 15 In Parrish, the district court considered whether a group of 16 former National Football League players had actually entered into 17 18 contracts identified as group licensing agreements (“GLAs”) with 19 defendants. The court cited the standard that, when the contract 20 is not actually attached to the complaint, a heightened standard 21 is applicable to determine whether a contract has been alleged. 22 Parrish, 534 F.Supp.2d at 1094. The district court concluded 23 that the plaintiffs failed to meet this pleading threshold for 24 various reasons. 25 The district court engaged in a discussion in Parrish 26 listing reasons why the plaintiffs had failed to adequately 27 allege the legal effect of any purported contracts when those 28 contracts were not attached to the complaint. Id. at 1095. One such reason was that plaintiffs alleged “under the GLAs, all 1 players who signed them, including plaintiffs, were entitled to 2 payments from the licenses, regardless of whether any particular 3 former player's name or likeness was actually used by a third 4 party. . . [there has been no adequate explanation provided to] 5 support the allegation that all players who signed GLAs were 6 automatically entitled to at least some licensing revenues 7 whether or not their images were used.” Id. 8 Parrish is again readily distinguishable from this case. A 9 fatal flaw for the complaint in Parrish was that Plaintiffs 10 failed to plead the legal effect of a contract when facts were 11 not pleaded to support the claim that all plaintiffs entered into 12 a contract, even in cases where a particular plaintiff’s likeness 13 was not used. 14 In this case, Plaintiffs have alleged the legal effect of 15 the contract. Plaintiffs have alleged the parties of the 16 contract, the essential terms of the contract, the breach, and 17 18 the related damages. Plaintiffs pleaded that they entered into a 19 contract with Citizens Bank, through their agent ORTC, whereby 20 Citizens Bank agreed to reconvey the 2016 Sutter County deed of 21 trust after receiving $1,197,730.82 from escrow. The FAC alleges 22 Plaintiffs performed their contractual duties. The FAC alleges 23 that Citizens Bank originally failed to reconvey the 2016 Sutter 24 County deed of trust at close of escrow, eventually reconveyed 25 it, and then ultimately rescinded the reconveyance, all in breach 26 of the contract. This case is distinguishable from Parrish for 27 these reasons. 28 The final case Citizens Bank cites is the old case Gilmore v. Lycoming Fire Ins. Co., 55 Cal. 123, 124 (1880). In Gilmore, 1 the Supreme Court of California decided the rule that “[w]here a 2 party relies upon a contract in writing, and it affirmatively 3 appears that all the terms of the contract are not set forth in 4 hæc verba, nor stated in their legal effect, but that a portion 5 which may be material has been omitted, the complaint is 6 insufficient.” Id. at 124. The court in Gilmore considered 7 whether a contract of insurance was pleaded sufficiently to 8 survive defendant’s demurrer. A crucial piece of the contract 9 was an “application, survey, plan, or description of the property 10 insured.” Id. at 125. Gilmore submitted the insurance contract 11 with the complaint but failed to include the application, survey, 12 plan, or description of the property insured in the complaint. 13 The court found that the “application of the assured is not set 14 forth in the complaint, nor are its contents alleged. . . The 15 plaintiff avers that she has ‘duly performed all the conditions’ 16 of the contract on her part, but the averment fails to make the 17 18 complaint complete in the absence of a portion of the policy 19 which is necessary to explain the agreement as a whole, and which 20 in connection with the policy proper may determine what the 21 conditions are.” Id. 22 Gilmore is again readily distinguishable. Here, there has 23 been no omission of an essential element of the alleged contract. 24 The contract’s legal effect has been sufficiently alleged without 25 any piece being omitted. What is in contest is not that there 26 are missing pieces of the alleged contract, but that the actual 27 language and terms of the contract are not as alleged. The terms 28 of the contract and their legal effect are not now decided because the court is to accept all factual allegations as true 1 and construe these facts in favor of the nonmoving party for 2 purposes of deciding this Rule 12(b)(6) Motion. 3 The court further concludes that Plaintiffs have alleged a 4 cause of action for breach of implied covenant of good faith and 5 fair dealing. The implied covenant of good faith and fair 6 dealing is “implied as a supplement to express contractual 7 covenants to prevent a contracting party from engaging in conduct 8 that frustrates the other party's rights to the benefits of the 9 agreement.” Thompson, 66 Cal. Rptr. at 188. Citizens Bank 10 claims that “[i]n order for the Bank to evaluate a claim for 11 breach of an implied covenant, all terms of the express agreement 12 must be alleged.” Mem. 19:19-20, Docket 92. However, no law is 13 provided to support this assertion. 14 On the contrary, turning to the case Citizens Bank cites, 15 Storek & Storek, Inc. v. Citicorp Real Estate, Inc., 100 16 Cal.App.4th 44 (2002), Storek does not maintain that all terms of 17 18 the express agreement must be alleged. Storek states the 19 “implied covenant of good faith and fair dealing cannot 20 contradict the express terms of a contract.” Id. at 55. 21 In the case before the court, Plaintiffs do not allege that 22 the implied covenant of good faith and fair dealing contradicts 23 any express terms of the contract; rather, Plaintiffs allege the 24 implied covenant was breached when “[Citizens Bank] actively and 25 affirmatively misrepresented through the payoff demand statements 26 submitted to Plaintiffs’ escrow agent Old Republic Title Company, 27 which [Citizens Bank] intended and reasonably expected would be 28 communicated to and relied upon by Plaintiffs as buyers in the subject escrow, that [Citizens Bank] was the beneficiary of the 1 Sutter Deed of Trust at the time it demanded and accepted the 2 $1,197,730.82 payoff for Parcel 23 from Plaintiffs’ purchase 3 funds as alleged herein.” FAC 6:4-9, Docket 73. The court is 4 able to infer from this allegation that the implied covenant of 5 good faith and fair dealing has been breached, which breach is 6 consistent with the express terms of the alleged contract. 7 The court also notes that an issue with the original 8 complaint was that the alleged contract was not clearly pleaded 9 to be between Plaintiffs and Citizens Bank. However, in the FAC, 10 ORTC is repeatedly referred to as Plaintiffs’ escrow agent, which 11 bridges this gap, allowing the court to reasonably infer 12 Plaintiffs were parties to the alleged contract through an agency 13 relationship with ORTC. See FAC 14:1-21, Docket 73. 14 In conclusion, Plaintiffs have adequately pleaded a cause of 15 action for breach of contract and the implied covenant of good 16 faith and fair dealing to survive the Motion. The court reaches 17 18 this conclusion because the court does not now read the payoff 19 requests and demands included as Exhibits 1 and 2 to the Motion, 20 and many of Citizens Bank’s arguments rely on the text of the 21 payoff requests and payoff demands. The court also reaches its 22 decision because the court concludes Plaintiffs have adequately 23 alleged the legal effect of the contract and have not omitted 24 material pieces of the contract that would be detrimental to the 25 cause of action. The court further concludes that facts have 26 been alleged to support the cause of action for a breach of the 27 implied covenant of good faith and fair dealing, the breach of 28 the implied covenant being consistent with express terms of the alleged contract. Therefore, the Motion is denied as to Count 5. 1 C. Count 6 - Unjust Enrichment Against Citizens Bank 2 Plaintiffs allege in Count 6 that Citizens Bank’s acceptance 3 of approximately $1,197,730.82 in satisfaction of its demand from 4 Plaintiffs’ purchase funds, and Citizens Bank’s subsequent 5 purported Rescission of the Parcel 23 Reconveyance, Citizens Bank 6 has been unjustly enriched in the amount of at least 7 $1,197,730.82. FAC 15:17-22. Importantly, Count 6 existed in 8 the original complaint. Compl. at 10, Docket 1. Citizens Bank 9 did not move to dismiss the cause of action for unjust enrichment 10 in its original motion to dismiss. See Mot. to Dismiss, Docket 11 30. Therefore, Fed. R. Civ. P. 12(g)(2) is now implicated. Fed. 12 R. Civ. P. 12(g)(2) states: 13 Limitation on Further Motions. Except as provided in 14 Rule 12(h)(2) or (3), a party that makes a motion under this rule must not make another motion under this rule 15 raising a defense or objection that was available to the party but omitted from its earlier motion. 16 Moore’s Federal Practice Treatise states regarding Rule 17 18 12(g)(2): 19 Mandatory consolidation applies only to defenses and objections that are “available” to the moving party at 20 the time of the motion. If, for example, the defendant moves for and obtains a more definite statement and 21 that statement reveals a ground for a motion to dismiss, the defendant may then advance such a motion 22 instead of answering (see § 12.36[6]). But, amending a complaint does not revive omitted defenses or 23 objections that the defendant could have raised in response to the original complaint. Exceptions to the 24 Rule 12(g) consolidation requirement appear in Rule 12(h)(2) and may be raised in any Rule 7(a) pleading. 25 2 James Wm. Moore et al., Moore’s Federal Practice – Civil § 26 12.21 (2024) (footnote omitted). 27 In its Reply, Citizens Bank argues the court should now 28 consider dismissal of the unjust enrichment claim, Count 6, under 1 principles discussed in In re Apple iPhone Antitrust Litig., 846 2 F.3d 313, 317 (9th Cir. 2019). Reply at 17:1-11, Docket 103. 3 However, In re Apple does not assist Citizens Bank’s position. 4 In re Apple states the rule that “Rule 12(g)(2) provides that a 5 defendant who fails to assert a failure-to-state-a-claim defense 6 in a pre-answer Rule 12 motion cannot assert that defense in a 7 later pre-answer motion under Rule 12(b)(6), but the defense may 8 be asserted in other ways.” Id. at 318. Here, Citizens Bank is 9 attempting to assert the defense to the unjust enrichment claim 10 under Rule 12(b)(6) when the same defense was available to it 11 when it filed the original motion to dismiss.3 The law does not 12 permit Citizens Bank’s attempt to now assert the defense or 13 objection it had available earlier. 14 Citizens Bank argues that new information has become part of 15 the record justifying now raising the objection to Count 6, 16 claiming its own Exhibits “are now incorporated into the FAC by 17 18 way of the Motion [to Dismiss] and the incorporation-by- 19 reference doctrine.” Id. at 17:7-8. However, the court has 20 declined to include Exhibits 1 and 2 to the Motion in the record 21 by incorporation by reference or through judicial notice. This 22 argument is without merit. 23 The court concludes that Citizens Bank could have moved to 24 25 3The defense was fully available to Citizens Bank on March 26 27, 2025, when Citizens Bank brought the original motion to dismiss. The defense is essentially that Citizens Bank was not 27 unjustly enriched because it accepted payments from escrow based on a valid debt. Mem. 20:11-19, Docket 92. Indeed, all factual 28 events supporting this defense occurred well before March 27, 2025, and were known to Citizens Bank on or before close of escrow on September 30, 2022. 1 dismiss Count 6 for unjust enrichment in its original motion to 2 dismiss, the defense or objection being available at that time, 3 and so Fed. R. Civ. P. 12(g)(2) bars Citizens Bank from now 4 moving to dismiss Count 6 under Rule 12(b)(6). Therefore, the 5 Motion is denied as to Count 6. 6 D. Count 7 - Declaratory and Injunctive Relief 7 Against Citizens Bank 8 Plaintiffs request declaratory and injunctive relief in 9 Count 7 of the FAC. Plaintiffs request that if it is determined 10 that the 2016 Sutter County deed of trust remains a valid and 11 enforceable lien against Plaintiffs’ fee interest in Parcel 23, 12 the payment of $1,197,730.82 to Citizens Bank from Plaintiffs’ 13 purchase funds should be found to have been made by mutual 14 mistake. FAC 16:5-9, Docket 73. Plaintiffs request Citizens 15 Bank restore to Plaintiffs the payment of $1,197,730.82, with 16 applicable interest, that was tendered due to the mutual mistake. 17 Id. at 16:14-18. Furthermore, Plaintiffs request the court 18 determine the respective rights and duties of Plaintiffs and all 19 defendants with respect to the payment of $1,197,730.82 to 20 Citizens Bank, or else the parties risk facing a multiplicity of 21 litigation in deciding rights and interests. Id. at 16:19-17:1. 22 Declaratory judgment is a remedy created by statute, the 23 Declaratory Judgment Act (“DJA”), authorizing courts of the 24 United States to “declare the rights and other legal relations of 25 any interested party seeking such declaration, whether or not 26 further relief is or could be sought.” 28 U.S.C. § 2201(a). 27 Importantly, the DJA “does not create new substantive rights.” 28 Republic of Marsh. Is. v. United States, 865 F.3d 1187, 1199 n.10 1 (9th Cir. 2017). “Instead, the DJA is a purely remedial statute 2 that provides an affirmative remedy only when a cause of action 3 otherwise exists.” Siino v. Foresters Life Insurance and Annuity 4 Company, 133 F.4th 936, 945 (9th Cir. 2025) (internal quotations 5 omitted). When a breach of contract claim accompanies the 6 declaratory judgment request, as is the case here, “the 7 declaratory judgment may be used to affirm the existence of a 8 breach of contract or to clarify any attending contractual 9 obligations.” Id. 10 Citizens Bank moves to dismiss Count 7 not for the substance 11 of the claim, but on procedural grounds, arguing adding Count 7 12 in the FAC is beyond the scope of the court’s order granting 13 leave to amend the complaint. Mem. 21:4-15, Docket 92. Citizens 14 Bank specifically argues that the court only granted leave to 15 amend Counts 3 through 5 and nothing more in its order granting 16 the motion to dismiss the original complaint. See Order, Docket 17 18 69. Citizens Bank cites the court to Strifling v. Twitter Inc., 19 2024 WL 54976, at *1 (N.D. Cal., Jan. 4, 2024), in support of 20 this argument. 21 The district court in Strifling granted defendant Twitter, 22 Inc.’s initial motion to dismiss the original complaint with 23 leave to amend “solely to cure the deficiencies identified by 24 th[at] order.” Id. Plaintiff Strifling filed an amended 25 complaint that added new causes of action, and so the district 26 court ruled the “amended complaint plainly exceeds the scope of 27 this Court's dismissal order,” and it granted the motion to 28 dismiss the amended complaint on that basis. Id. The district court made a comprehensive list of cases that followed the rule 1 that leave to amend must be within the limits provided by the 2 order granting leave to amend. Id. Importantly, the cases cited 3 in Strifling all contained orders with specific limitations on 4 amending complaints. 5 In this case, leave to amend was not limited to only those 6 original counts. The text of this court’s Order granting 7 Citizens Bank’s initial motion to dismiss contained no specific 8 limiting language.4 The court authorized Plaintiffs to file an 9 amended complaint by June 17, 2025. Leave to amend was not 10 limited to only Counts 3 through 5 in the text of the court’s 11 Order. Therefore, the Motion is denied as to Count 7. 12 13 V. 14 Conclusion 15 Based on the foregoing, the Motion is GRANTED IN PART AND 16 DENIED IN PART. The Motion is GRANTED as to Count 4 of the FAC 17 which is DISMISSED WITH PREJUDICE AND WITHOUT LEAVE TO AMEND. 18 The Motion is DENIED as to Counts 5, 6, and 7 of the FAC. 19 20 21 4The text of the court’s order dismissing the original complaint stated: 22 IT IS ORDERED that the motion is GRANTED. As it 23 pertains to Defendant Citizens Bank, the third, fourth and fifth claims of relief of the adversary complaint 24 are DISMISSED WITHOUT PREJUDICE with leave to amend. 25 Plaintiffs shall have until June 17, 2025 to file and serve an amended complaint. If an amended complaint is 26 not timely filed or a dismissed claim not amended, the dismissal without prejudice will become a dismissal 27 with prejudice. The defendant will then have until July 1, 2025 to file and serve an answer or other 28 response. Order, Docket 69. 1 Citizens Bank must file an answer by December 9, 2025. 2 A separate order and judgment will issue. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 INSTRUCTIONS TO CLERK OF COURT SERVICE LIST 2 The Clerk of Court is instructed to send the attached 3 document, via the BNC, to the following parties: 4 Edward Egan Smith 235 Pine Street, 15th Floor 5 San Francisco, California 94104 6 Dustin J. Nirschl 7 2855 E. Guasti Road Suite 400 8 Ontario, California 91761 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28