A A A 
Loading
Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

Terence Mix et al vs Ing Bank fsb

Case No: 1397068
Hearing Date: Tue Dec 17, 2013 9:30

Nature of Proceedings: Demurrer to Second Amended Complaint; Motion Relief from Waiver; Motion Compel Prod. of Docs.

(1) Motion of Defendant for Relief from Waiver (2) Motion of Plaintiff to Compel Further Responses to Requests for Production of Documents (3) Demurrer of Defendant to Second Amended Complaint Rulings: For the reasons set forth herein: (1) The motion of defendant Capital One, N.A., for relief from waiver by untimely response to discovery is granted. (2) The motion of plaintiffs to compel further responses to plaintiffs’ second set of document production requests is denied. (3) The demurrer of defendant to the second amended complaint is sustained without leave to amend as to the second, third and fifth causes of action without leave to amend, and is otherwise overruled. Defendant shall file and serve its answer to the remainder of the second amended complaint on or before January 2, 2014. Background: In this action arising out of a loan and a trustee’s sale of real property, there are two discovery motions and a demurrer now before the court. Declarations and other papers cited herein are the documents filed in support of or in opposition to the motion to which the documents refer. (1) Motion of Defendant for Relief from Waiver On June 29, 2013, plaintiffs Terrence J. Mix and Janet L. Mix served on defendant Capital One, N.A. (“Capital One”) by mail their second set of special interrogatories. (Mix decl., ¶¶ 3, 4 & exhibit 1.) Based upon the service date, responses these interrogatories would have been due on August 5. On July 6, 2013, plaintiffs served on Capital One by mail their second set of requests for production of documents. Both the second set of interrogatories and the second set of requests for document production requests were served on Capital One’s prior counsel. Based upon the service date, responses to these requests would have been due on August 12. Capital One’s present counsel was retained during the second week of July 2013. Capital One’s former counsel transferred the file to present counsel on or around July 10. In transferring the file, former counsel advised that plaintiffs had served two sets of discovery, responses to the first of which were due on July 15, and responses to the second of which were due on July 26. (Note: As will be made clear below, the discovery that is the subject of this motion is not part of either the first or the second rounds of discovery initially discussed by the parties.) This “transfer” of the file did not yet include a transfer of former counsel’s litigation files. On July 11, Capital One’s counsel, Connie Y. Tcheng, telephoned plaintiff Terrence Mix (who, as an attorney, represents both himself and plaintiff Janet Mix) and explained the substitution of counsel for Capital One. Tcheng requested, and Mix granted, an extension of time to respond to the first round of discovery from July 15 to July 22; Mix also agreed to consider an extension of time for the second round of discovery, which was then due on July 26. Tcheng’s confirming email refers to the discovery only as a first round and a second round. Later on July 11, Mix granted the extension of time as to the second round of discovery to August 9. Mix’s email references a second set of requests for admissions and a second set of form interrogatories, but makes no mention of a second set of special interrogatories or document production requests. Mix confirmed by email on July 18, stating in part: “Per our agreement, I have granted you an extension until August 9, 2013, to respond to the following discovery: (1) second set of request for admissions; (2) second set of form interrogatories; (3) first set of special interrogatories; and (4) first set of requests for production.” Not included in this list are the second sets of special interrogatories or requests for production of documents. Mix considered these two discovery requests (which are the subject of this discovery) to be a third round of discovery based upon their due dates. Capital One’s present counsel received former counsel’s litigation files on July 19. Responses to the first set of requests for admission and the first set of form interrogatories, i.e., the first round of discovery from plaintiffs, was served on plaintiffs on July 22, 2013. These responses were the subject of meet and confer letters from Mix, but are not at issue in this motion. After receiving the litigation files from former counsel, Capital One’s present counsel was in possession of a second set of requests for production of documents, but not a second set of special interrogatories. Tcheng believed, and referred to, the second round of discovery as comprising the first sets of special interrogatories and requests for production of documents and the second sets of requests for admission, form interrogatories, and requests for production of documents. On August 6, 2013, Tcheng called Mix and left a voicemail requesting a further extension of time, until August 23, to respond to plaintiffs’ outstanding discovery responses. (Note: Mix disputes the language used by Tcheng in the voicemail. Mix responded later that day by email stating in part: “I am thus in agreement with your [proposal], namely that you will supply further responses to Plaintiffs’ first set of request for admissions and first set of form interrogatories, giving due consideration to my meet and confer letters, which will be served on or before August 23, 2013. I will also give you an extension until the same date to serve Plaintiffs with your responses to Plaintiffs’: (1) second set of request for admissions; (2) second set of form interrogatories; (3) first set of special interrogatories; and (4) first set of requests for production. Please confirm that this will meet your needs.” Tcheng replied by email stating, “I very much appreciate the extension for the second round of discovery responses and supplemental responses to August 23, 2013.” At this point, Tcheng believed that she had received an extension to respond to all outstanding discovery to August 23. Mix, on the other hand, believed that the two discovery requests that are the subject of this motion were not covered by the extension. On August 16, 2013, Mix emailed Tcheng inquiring as to when he should expect service of the responses to the second set of special interrogatories and second set of requests for production of documents. Tcheng responded by stating that (1) there is an apparent misunderstanding based upon Tcheng’s previous request for a blanket extension of time as to all outstanding discovery, (2) defendant had not received a second set of special interrogatories, and (3) the relevant client contact at Capital One was unavailable requiring additional time to provide responses. Tcheng’s email also notes that Mix’s position was that Capital One had by that time waived its right to object as to this discovery. Mix emailed a copy of the second set of special interrogatories to Tcheng on August 17. Mix also sent an email on August 17 explaining his position that Capital One had waived its right to object. At no time since June 29, 2013, have plaintiffs received by return mail the envelope containing the second set of special interrogatories. At no time was the second set of special interrogatories received by mail by Capital One. On August 21, 2013, Tcheng sent an email to Mix to meet and confer regarding Capital One’s right to object to the discovery. Mix responded by email on August 22 explaining his characterization of events and his position that Capital One’s counsel’s mistake is not excusable so as to permit relief from the waiver. On September 6, 2013, Capital One served responses to the discovery here at issue. On November 8, Capital One served supplemental responses to the second set of requests for production of documents. On November 15, Capital One served supplemental responses to the second set of special interrogatories. On November 21, 2013, Capital One filed this motion for relief from waiver based upon the timing of Capital One’s responses to these two sets of discovery. Plaintiffs oppose the motion, arguing that Capital One has not stated sufficient grounds for relief. (2) Motion to Compel Further Responses to Document Production Requests On November 25, 2013, plaintiffs filed their motion to compel further responses to the second set of document production requests. (Note: The motion was served on November 14, 2013, but filing was delayed.) Plaintiffs did not concurrently file a separate statement. Capital One opposes the motion. The motion is further discussed below. (3) Demurrer to Second Amended Complaint On or about May 3, 2007, plaintiffs Terrence J. Mix and Janet L. Mix executed a series of documents with ING Bank to refinance an existing mortgage loan on their home. (Note: ING Bank, FSB, appears here by its successor by merger, defendant Capital One, N.A.) Among these documents were an interest only adjustable rate note (the “Note”), a deed of trust (“DOT1”), and an Adjustable Rate Rider (“Rider1”). The DOT1 did not contain a legal description of the property it secured at the time it was executed. Contemporaneous with the execution of the Note, DOT1, and Rider1 ING Bank through its employees and agents delivered to plaintiffs, and plaintiffs executed, a Notice of Right of Rescission (“NRR”). The NRR contained neither a commencement date nor an expiration date. When plaintiffs executed the loan documents, ING Bank understood and intended that the loan would not be assumable at least through June 1, 2012, that ING Bank consented to the loan on the condition that it would not be assumable at least through June 1, 2012, and manifested its intent of its conditional consent by delivering on or about May 3, 2007, a Truth-In-Lending Disclosure Statement (“Disclosure1”) and Adjustable Rate Mortgage Program Disclosure (“Disclosure2”) that the loan was not assumable. At all relevant times, including May 3, 2007, the terms and conditions of the Note and Rider1 on the issue of assumability of the loan were in conflict with Disclosure1 and Disclosure2. At all relevant times, including the period from May 3, 2007, through June 2010, plaintiffs never read, review or considered Disclosure1 or Disclosure 2. Plaintiffs did not know or understand that the disclosure documents prohibited assumption of the loan and that ING Bank did not intend and was not in agreement with the conditions of the Note and Rider1 on assumability. On or about May 3, 2007, ING Bank mistakenly and inadvertently delivered to plaintiffs for their signature the Note and Rider1, which included terms that the loan would be assumable throughout its entire term. Plaintiffs reviewed the Note and Rider 1 on May 3, 2007, and understood that the loan would be assumable throughout its entire term and intended and consented to the loan only on the condition that it was assumable under the terms stated in the loan documents. ING Bank discovered its mistake in delivering the wrong Note and Rider to plaintiffs on a date between May 3, 2007, and February 20, 2008, after ING Bank had funded the loan. On or before February 20, 2008, ING Bank determined that it would seek plaintiffs’ signatures on another deed of trust and adjustable rate rider that excluded assumability of the loan through June 1, 2012. On or about February 20, 2008, ING Bank forwarded to plaintiffs a second deed of trust (“DOT2”) which contained a legal description of the subject property. On or about March 24, 2008, ING Bank forwarded to plaintiffs an Initial Interest Adjustable Rate Rider (“Rider2”) which eliminated the assumability of the loan through June 1, 2012. When DOT2 and Rider2 were forwarded, it was ING Bank’s intent that the documents would replace DOT1 and Rider1. On or about March 25, 2008, plaintiffs received Rider2 along with a planned unit development rider (“PUD Rider”). Plaintiffs believed that Rider2 was identical to Rider1 and did not read Rider2 prior to June 2010. ING Bank did not at any time inform plaintiffs that the documents contained a change in the assumability terms or provide plaintiffs with a disclosure statement regarding the change in the terms. In June 2010, plaintiffs reviewed Rider2 for the first time and, believing it to be identical to Rider1, understood for the first time that the loan was not assumable during the first five years of its term. On December 3, 2010, ING Bank recorded a notice default and election to sell in the Santa Barbara County real estate records. On or about January 17, 2011, plaintiffs rescinded the refinance mortgage in the manner and as specified in the NRR. Plaintiffs requested in writing that ING Bank return any and all funds paid by plaintiffs to ING Bank, including interest payments from July 1, 2007, through May 2010. Plaintiffs also offered to tender title to the real property in exchange for the funds, at which time the property had a fair market value significantly above the principal owed by plaintiffs to ING Bank arising out of the mortgage loan. Since on or about February 7, 2011, ING Bank did not return to plaintiffs the money demanded by them and did not take possession of the real property offered by plaintiffs. On October 6, 2011, ING Bank acquired title to the real property at a foreclosure sale. The trustee’s deed conveying title was recorded on October 10, 2011. On November 16, 2012, defendant conveyed title to the property to defendants Angus Potter and Ma. Catherine Reyes Potter. On April 24, 2012, plaintiffs filed this action. The operative complaint is the SAC, filed on October 17, 2013, which asserts seven causes of action: (1) quiet title; (2) violation of the Truth in Lending Act (15 U.S.C. § 1635(a)); (3) fraud and deceit—denial of right to rescind; (4) fraud and deceit—Rider2; (5) fraudulent representations—misrepresentations in NRR; and (6) violation of Civil Code section 2924h, subdivision (g). Defendant Capital One now demurs to each of the causes of action of the SAC. Capital One argues that each cause of action is barred by the applicable statute of limitations, that the notice of rescission was untimely, that the fraud causes of action are not sufficiently alleged, and that the claim for violation of section 2924h fails as a matter of law. Plaintiffs oppose the demurrer asserting that each cause of action is adequately alleged and not barred by the statute of limitations. Analysis: (1) Motion of Defendant for Relief from Waiver “If a party to whom interrogatories are directed fails to serve a timely response, the following rules apply: “(a) The party to whom the interrogatories are directed waives any right to exercise the option to produce writings under Section 2030.230, as well as any objection to the interrogatories, including one based on privilege or on the protection for work product under Chapter 4 (commencing with Section 2018.010). The court, on motion, may relieve that party from this waiver on its determination that both of the following conditions are satisfied: “(1) The party has subsequently served a response that is in substantial compliance with Sections 2030.210, 2030.220, 2030.230, and 2030.240. “(2) The party’s failure to serve a timely response was the result of mistake, inadvertence, or excusable neglect.” (Code Civ. Proc., § 2030.290, subd. (a); accord, § 2031.300, subd. (a).) Capital One has subsequently served a response that is in substantial compliance with the Code of Civil Procedures. (Note: The court does not here evaluate the merits of the objections asserted by Capital One.) Plaintiffs dispute that the failure to serve timely responses were the result of mistake, inadvertence or excusable neglect. Code of Civil Procedure section 473 is not directly applicable to this motion because of the express statutory provision for relief set forth in sections 2030.290 and 2031.300. (Zellerino v. Brown (1991) 235 Cal.App.3d 1097, 1107.) However, the general principles applicable to section 473 may be applied in connection with the exercise of the court’s discretion under the Discovery Act. (Scottsdale Ins. Co. v. Superior Court (1997) 59 Cal.App.4th 263, 275.) As an initial matter, plaintiffs argue that defendant’s motion is untimely because it was not brought within a reasonable time. The court disagrees. The timing of the filing of this motion was the result of the time necessary to determine whether the motion would be required, especially given the parties’ efforts to resolve the matter informally. The two different discovery requests present different issues with respect to the “mistake, inadvertence or excusable neglect.” The principle question with respect to the second set of interrogatories is whether the response was untimely because of a lack of receipt of the second set of interrogatories. “The party propounding interrogatories shall serve a copy of them on the party to whom the interrogatories are directed.” (Code Civ. Proc., § 2030.080, subd. (a).) “Within 30 days after service of interrogatories, the party to whom the interrogatories are propounded shall serve the original of the response to them on the propounding party, unless on motion of the propounding party the court has shortened the time for response, or unless on motion of the responding party the court has extended the time for response.” (Code Civ. Proc., § 2030.260, subd. (a).) “Service is complete at the time of the deposit ….” (Code Civ. Proc., §§ 1013, subd. (a), 2016.050.) “[T]he addressee incurs the risk of the failure of the mail ….” (McKeon v. Sambrano (1927) 200 Cal. 739, 741-742.) In the absence of evidence that the second set of special interrogatories was not mailed as stated in its proof of service, deposit in the mail of the interrogatories is sufficient by itself to require the response set forth in Code of Civil Procedure section 2030.260, subdivision (a), even if the interrogatories were never received by Capital One in the mail. Even if service is effective by deposit, nonreceipt of the interrogatories in the mail by Capital One’s counsel is per se excusable. Here, Capital One had no reason to know of the existence, let alone service, of the second set of special interrogatories until after the time to respond had passed. Plaintiffs argue that Capital One’s declarations do not demonstrate that the interrogatories were not received because the interrogatories could have been received and mishandled by clerical staff at the offices of Capital One’s former counsel. Even so, this too would constitute excusable neglect warranting the grant of relief from waiver. (See Carli v. Superior Court (1984) 152 Cal.App.3d 1095, 1099.) Capital One’s motion will be granted as to the second set of special interrogatories. The situation is somewhat different as to the second set of document production requests. Capital One’s counsel, both former and present, had possession of the requests and knew of its original deadline. There was, nevertheless a misunderstanding between counsel as to whether the deadline had been extended as to this request. Tcheng believed that the second set of document production requests were within the “second round” of discovery for which she sought extensions. Mix believed that it was not. Mix was specific in listing the discovery to which the extensions applied. Tcheng overlooked the fact that Mix’s list included four items but omitted the second set of document production requests. The mistake was the result of both parties assuming too much. More fault, perhaps, lies with Tcheng for not making certain of the completeness of the coverage of the extension either by listing the particular discovery items to which it applied or by being more careful in reviewing the list provided by Mix. Still, Mix could have been more forthcoming in identifying the discovery not covered by the extension. “In determining whether the attorney’s mistake or inadvertence was excusable, ‘the court inquires whether “a reasonably prudent person under the same or similar circumstances” might have made the same error.’ [Citation.]” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 258, italics omitted.) Tcheng thought she had requested and received an extension that included the second set of document production requests. The fact that Mix had excluded this discovery from the extension that was granted was overlooked. Under the circumstances here, this is a type of mistake “anyone could have made” and constitutes excusable neglect. Capital One’s motion for relief from waiver will be granted as to the second set of document production requests. (2) Plaintiffs’ Motion to Compel Further Responses “Any motion involving the content of a discovery request or the responses to such a request must be accompanied by a separate statement. The motions that require a separate statement include a motion: [¶] … [¶] (3) To compel further responses to a demand for inspection of documents or tangible things.” (Rules of Court, rule 3.1345(a)(3).) Plaintiffs have not filed a separate statement to accompany this motion. The failure of the moving party to file a separate statement complying with the Rules of Court is a sufficient basis to deny the motion. (Mills v. U.S. Bank (2008) 166 Cal.App.4th 871, 893.) The court notes that plaintiffs’ motion is in large part based upon the assertion of objections by Capital One which plaintiffs argue have been waived. The disposition of Capital One’s motion for relief from waiver, discussed above, resolves that issue. Capital One is not deemed to have waived its right to assert objections by its untimely responses. The remainder of plaintiffs’ motion addresses the merits of Capital One’s objections to plaintiffs’ document production requests. “A separate statement is a separate document filed and served with the discovery motion that provides all the information necessary to understand each discovery request and all the responses to it that are at issue. The separate statement must be full and complete so that no person is required to review any other document in order to determine the full request and the full response.” (Rules of Court, rule 3.1345(c).) The purpose of this rule is to avoid the problem presented here by plaintiffs, namely, that the court must search through various exhibits and arguments in order to determine first what is at issue as to each particular objection and then what is the appropriate resolution of the dispute. Presentation in the present form places a significant and improper burden on the court in direct violation of the Rules of Court. Plaintiffs filed an untimely reply on December 11, 2013 (although reply was timely served on December 9). The reply includes, from page 7 to page 24, a section labeled “Separate Statement in Support of Motion to Compel.” The document does not comply with the Rules of Court. Most obviously, this document did not accompany the motion (Rules of Court, rule 3.1345(a)) and is not even a “separate” statement (rule 3.1345(c)). Again, the purpose of these rules is to put all of the information needed to rule on the motion into one convenient place. Plaintiffs have not done so. The court therefore will deny plaintiffs’ motion on the grounds of plaintiffs’ failure to file a separate statement. In so doing, the court expresses no opinion as to the merits of the objections to the extent they are placed at issue in the motion. (3) Demurrer to Second Amended Complaint “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed. [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]” (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6, internal quotation marks omitted.) (A) Request for Judicial Notice Defendant requests that the court take judicial notice of: (exhibit A) the DOT1; (exhibit B) the notice of default, recorded on December 3, 2010; and (exhibit C) the summons and complaint in Mix, et al., v. ING Bank, FSB, et al., Santa Barbara County Superior Court case number 1380142, filed on March 30, 2011. Exhibits A and B are recorded documents. The court will grant judicial notice as to the contents and recording of these documents. (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.) Exhibit C is court record to which judicial notice will be granted. (Evid. Code, § 452, subd. (d)(1).) (B) Violation of Truth in Lending Act Plaintiffs’ second cause of action is for violation of the federal Truth in Lending Act, title 15 United States Code section 1635(a). “Except as otherwise provided in this section, in the case of any consumer credit transaction (including opening or increasing the credit limit for an open end credit plan) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this title [15 U.S.C. §§ 1601 et seq.], whichever is later, by notifying the creditor, in accordance with regulations of the Bureau, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Bureau, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Bureau, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.” (15 U.S.C. § 1635(a).) Plaintiffs allege that they effectively rescinded their loan in January 2011. (SAC, ¶ 40.) Defendant argues that this claim is barred by the limitations period provided by section 1635. “An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first, notwithstanding the fact that the information and forms required under this section or any other disclosures required under this chapter [15 U.S.C. §§ 1631 et seq.] have not been delivered to the obligor ….” (15 U.S.C. § 1635(f).) “Consummation means the time that a consumer becomes contractually obligated on a credit transaction.” (12 C.F.R. § 226.2(a)(13) (2013).) Defendant argues that the date plaintiffs became contractually obligated on the loan was May 3, 2007. Even assuming that the documents were noncompliant, plaintiffs’ right of rescission expired on May 3, 2010. Plaintiffs allege that they rescinded the loan on January 17, 2011. (SAC, ¶ 40.) Thus, argues defendant, plaintiffs’ claims based upon this rescission are ineffective. Plaintiffs respond that the consummation of the transaction did not take place until June 2010. Plaintiffs argue that there was no mutual consent to the contract because there was no mutual consent on the assumability of the loan and hence no agreement at the time the loan documents were signed and the loan funded. Consequently no contract was actually formed in 2007. Plaintiffs argue a subtle distinction regarding mistake in the formation of contracts. If both parties have a different understanding as to the identity of the subject matter or if the subject matter or something essential to performance ceases to exist before the agreement is reached, there is no contract. (French v. Construction Laborers Pension Trust (1975) 44 Cal.App.3d 479, 488.) For example, in Balistreri v. Nevada Livestock Production Credit Association (1989) 214 Cal.App.3d 635, the plaintiffs signed a deed of trust in favor of the defendant in order to help their son get a loan. The plaintiffs believed that the deed of trust covered a house in Sebastopol, which they owned with their son and where he resided. In fact, the deed of trust encumbered the plaintiffs’ house in Petaluma where they resided. The Court of Appeal held that the deed of trust was made under a mutual mistake of the parties, each believing that that the deed of trust encumbered different property. In the absence of agreement as to the property to be encumbered, there was no “consensus ad idem” and “therefore no binding contract.” (at p. 642, internal quotation marks and citation omitted.) “Mutual assent is necessary for contract formation. [Citations.] ‘Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.’ [Citation.]” (Chicago Title Insurance Co. v. AMZ Insurance Services, Inc. (2010) 188 Cal.App.4th 401, 422.) Thus, “uncommunicated subjective intent is irrelevant. [Citations.]” (Reigelsperger v. Siller (2007) 40 Cal.4th 574, 579.) “Under the objective test, a ‘meeting of the minds’ is unnecessary, and a party may be bound though he misunderstood the terms of a proposed contract and actually had a different undisclosed intention.” (Myers v. Carter (1963) 215 Cal.App.2d 238, 241.) “Nevertheless, … ‘There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and [¶] (a) neither party knows or has reason to know the meaning attached by the other; or [¶] (b) each party knows or each party has reason to know the meaning attached by the other.’ Under these rules no contract is formed if neither party is at fault or if both parties are equally at fault. [Citation.]” (Merced County Sheriff’s Employees’ Assn. v. County of Merced (1987) 188 Cal.App.3d 662, 670.) In ruling on defendant’s demurrer to the FAC, the court determined that plaintiffs did not there allege mutual mistake: “As of May 3, 2007, the written agreements (the Note and the DOT1, as modified by Rider1) contained the terms of agreement that plaintiffs allege they understood as the agreement, in particular, that the loan was assumable from its inception. Plaintiffs further allege that Rider2 “contained a material amendment” to DOT2 “that eliminated assumability of the loan during the first 5 years of its term.” Under these allegations, the undisclosed intention of ING Bank that the loan would not be assumable is irrelevant because the objective manifestation of agreement, namely, acceptance and funding of the loan following plaintiffs’ execution of the Note and DOT1, provides the objective manifestation of mutual assent necessary to form the contract. The allegation that Rider2 amended the agreement necessarily implies that that the agreement contained the terms set forth in the Note and DOT1 both as written and as understood and intended by plaintiffs. Consequently, plaintiffs have not alleged facts sufficient to show that no contract was formed when the parties executed the original loan documents and funded the loan on May 3, 2007.” (Minute Order, Oct. 8, 2013, p. 22.) Plaintiffs argue that in the SAC plaintiffs have alleged that ING Bank objectively manifested a different intent by Disclosure1 and Disclosure2 which state that the loan is not assumable. Plaintiffs did not read or consider Disclosure1 or Disclosure2 at the time the Note and DOT1 were executed, but focused on the terms set forth in the Note, DOT1 and Rider1. (SAC, ¶ 12.) Plaintiffs have not alleged mutual mistake so that no contract was formed on May 3, 2007. Plaintiffs have alleged that they made no mistake: plaintiffs subjectively intended and objectively manifested an agreement with the terms of the Note, DOT1 and Rider1 as they existed on May 3, 2007, and were executed by them. (SAC, ¶ 13.) The mistake alleged by plaintiffs is the unilateral mistake of ING Bank in presenting the Note, DOT1 and Rider1 with terms that were different than the terms ING Bank intended. Plaintiffs cannot assert the mistake of the other contracting party as grounds for finding that no contract existed on May 3, 2007. (See Wood v. Metzenbaum (1951) 107 Cal.App.2d 727, 731 [mistake must be of the complaining party].) As a result, the allegations of plaintiffs’ SAC show that plaintiffs were contractually obligated under the terms of the loan as of May 3, 2007. It is worthwhile to point out that plaintiffs argue that the contract was finally formed in June 2010 when plaintiffs’ reviewed Rider2. (Opposition, at p. 10; SAC, ¶ 21.) As discussed above, contract formation is a matter of objective manifestation of consent, not of unexpressed understandings. Plaintiffs’ argument that a contract was finally formed only when plaintiffs reviewed Rider2 must necessarily be based upon a change only in their unexpressed subjective understandings. The parties’ objective manifestations, i.e., the written documents, were unchanged in June 2010. By so arguing, plaintiffs imply that the manifestations of consent (i.e., the documents) were sufficient to establish, objectively, both parties’ consent. Because plaintiffs were contractually obligated as of May 3, 2007, plaintiffs’ right to rescind under title 15 United States Code section 1635(a) expired on May 3, 2010, prior to when plaintiffs allege having rescinded the loan agreement. Accordingly, plaintiffs have failed to state facts sufficient to state a cause of action for violation of section 1635(a) and defendant’s demurrer to the second cause of action will be sustained. (C) Fraud Claims Plaintiffs’ third, fourth and fifth causes of action all assert claims of fraud. “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Id. at p. 645.) (i) Fraud Based on the NRR Plaintiffs’ third cause of action alleges concealment of the alteration of the NRR. Plaintiffs allege that the NRR, as executed by them, contained neither a commencement date nor an expiration date. At some time subsequent to plaintiffs’ execution of the NRR, ING Bank employees or agents altered the NRR to include a commencement date and an expiration date (May 3, 2007, and May 7, 2007, respectively). Defendant concealed this alteration from plaintiffs. The purpose of the concealment was to deny the existence of a defective NRR and to deny plaintiffs the three-year rescission period. Defendant argues that plaintiffs have not alleged a misrepresentation or reasonable reliance because plaintiffs did not learn of the alteration until after the three-year right of rescission had expired. Plaintiffs respond by pointing out their allegation that if plaintiffs had known that defendant had entered the dates on or after May 4, 2007, they would have rescinded the loan and abandoned any refinance of the property. “Reliance exists when the misrepresentation or nondisclosure was an immediate cause of the plaintiff’s conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction. [Citations.] ‘Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff’s reliance is reasonable is a question of fact.’ [Citations.] ‘However, whether a party’s reliance was justified may be decided as a matter of law if reasonable minds can come to only one conclusion based on the facts.’ [Citation.]” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) It is important to distinguish between the nondisclosure of the commencement and expiration dates for rescission and the nondisclosure of the fact of the subsequent addition of those dates to the NRR. Plaintiffs adequately allege that the commencement and expiration dates were improperly omitted from the NRR plaintiffs signed on May 3, 2007. As of May 3, 2007, plaintiffs allege that they believed that the loan documents accurately set forth the terms of the loan. Therefore, had the NRR been correctly completed (based upon plaintiffs’ own understanding of what was correct) prior to their execution of the NRR, the NRR would have set forth the two dates that were subsequently added, the same dates that were then required by the Truth in Lending Act. (See 15 U.S.C. § 1635(a).) Plaintiffs do not base their third cause of action on the nondisclosure of the commencement and expiration, but upon the nondisclosure of the fact that these dates were subsequently written onto the NRR. Thus, plaintiffs do not contend that they would not have entered into the loan transaction had they known the true facts (i.e., the commencement and expiration dates). Plaintiffs instead base their third cause of action on the nondisclosure of the alteration. Plaintiffs allege that had they known of the subsequent alteration, plaintiffs would have behaved differently, that is, they would have immediately rescinded. (SAC, ¶ 51.) Plaintiffs allege that they would no longer have had any trust in ING Bank and would not have proceeded with the loan. (Ibid.) The reliance alleged by plaintiffs is ultimately reliance upon the NRR remaining immaculate from the time plaintiffs signed it and forevermore afterwards. Such reliance upon the absence of subsequent marks on the NRR is unreasonable as a matter of law. The alternation alleged is merely to add to the document the dates that, under plaintiffs’ construction of the loan documents, should have been there at the time of its execution. Additional, unconsented markings on the NRR would have no legal effect on plaintiffs. A claim of fraud cannot be stated based upon the concealment of the fact that marks were later made that should have been found on the documents when signed and which have no legal effect on plaintiffs. Accordingly, defendant’s demurrer to the third cause of action will be sustained. (ii) Fraud based on Rider2 Plaintiffs’ fourth cause of action is based upon the difference between Rider1 and Rider2. Plaintiffs allege that ING Bank concealed the difference between Rider1 and Rider2 by explaining, through their agent, that DOT1 erroneously failed to include the PUD Rider and that identical documents, with the addition of the PUD Rider, needed to be executed and re- recorded. Instead, a material change was made in the terms of the loan in the change in assumability by Rider2. Defendant argues that plaintiffs’ claim is barred by the statute of limitations, that plaintiffs have not alleged claims of actions by ING Bank, plaintiffs have not alleged reasonable reliance, and plaintiffs have not alleged damages. Plaintiffs allege that the documents presented to them in 2008 were represented to be identical to the documents signed in 2007 except for the addition of the PUD Rider. (SAC, ¶ 62.) The statute of limitations for an action based on fraud is three years. (Code Civ. Proc., § 338, subd. (d).) “The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Ibid.) Plaintiffs allege that they did not discover, and should not reasonably have discovered, the falsity of the representation that the documents were identical until June 2010 when plaintiffs were attempting to sell their home. The relation-back rule for the statute of limitations is that “the amended complaint will be deemed filed as of the date of the original complaint provided recovery is sought in both pleadings on the same general set of facts.’ [Citation.]” (Wilson v. Bittick (1965) 63 Cal.2d 30, 37-38.) In both the original complaint and in the SAC, plaintiffs seek recovery upon the original loan transaction in May 2007 and the follow-up revisions to those documents. The fourth cause of action arises out of the same general set of facts as the original complaint. Thus, the fourth cause of action relates back to the filing of the original complaint on April 24, 2012. As alleged, plaintiffs were told that the 2008 documents, including Rider2, were identical to the 2007 documents, including Rider1. Based upon this alleged representation together with the representation of the purpose for the new documents, plaintiffs could reasonably rely upon truth of the representation that the documents were identical. These circumstances, at least for purposes of demurrer, do not give rise to a duty for plaintiffs to inquire further. (See Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 438.) Plaintiffs have adequately alleged discovery in 2010, within the three year limitations period. Defendant also argues that plaintiffs have not adequately alleged misrepresentations by ING Bank, only by the escrow company. Plaintiffs have alleged that escrow company was acting as ING Bank’s agent. Agency may be alleged generally. (Kiseskey v. Carpenters’ Trust for So. California (1983) 144 Cal.App.3d 222, 230.) A principal is liable for misrepresentations by the agent within the scope of his agency. (Garton v. Title Ins. & Trust Co. (1980) 106 Cal.App.3d 365, 375-376.) Plaintiffs have adequately alleged that ING Bank is responsible for the alleged misrepresentations by the escrow company acting as ING’s agent. As noted above, plaintiffs have alleged reasonable reliance upon the representations that the documents were identical. Plaintiffs also have alleged the fact of damages by plaintiffs’ inability to sell their home. (SAC, ¶ 66.) Defendant points out that this theory of damage is unlikely. (Demurrer, at p. 12, fn. 3.) On demurrer, the court does not consider whether or not a plaintiff can prove his allegations. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) Consequently, defendant’s demurrer to the fourth cause of action will be overruled. (iii) Fraud based on Rescission Promises Plaintiffs’ fifth cause of action is for fraudulent misrepresentations regarding plaintiffs’ ability to rescind as stated in the NRR. As discussed above, plaintiffs’ claim for breach of defendant’s obligation to accept rescission, explained by the NRR, fails because the rescission rights were not exercised within the longest of the time periods permitted by law. Thus, even if as alleged by plaintiffs that ING Bank had no intention to perform according to the terms of the NRR, plaintiffs allege no damages resulting from those fraudulent misrepresentations. Accordingly, the demurrer to the fifth cause of action will be sustained. (D) Violation of Civil Code Section 2924h The court previously overruled defendant’s demurrer to this cause of action (formerly denominated the seventh cause of action) on the grounds that plaintiffs had alleged that defendant bid $1.9 million at the auction to discourage other bidders and yet, for all other purposes, the auction bid was treated as $1.4 million. While the court recognizes that plaintiffs also include within this claim allegations regarding tax misreporting, defendant’s arguments have previously been rejected. Whether or not the tax reporting allegations constitute an independent basis for recovery, a demurrer cannot be sustained as to part of a cause of action. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047.) Defendant’s demurrer to the sixth cause of action will be overruled. (E) Leave to Amend The court will sustain the demurrers to the second, third and fifth causes of action as discussed above. The clarifications to these actions made by the amendments set forth in the SAC demonstrate that plaintiffs cannot state claims based upon the Truth in Lending Act or the NRR. Further amendment would not make these causes of action viable. These demurrers will be sustained without leave to amend. (F) Defendant’s Motion to Strike Plaintiffs’ Opposition In reply, defendant moves to strike pages 16 through 25 of the opposition as exceeding the page limit set forth in Rules of Court, rule 3.1113(d): “Except in a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 15 pages.” Plaintiffs’ opposition is 25 pages long. “A memorandum that exceeds the page limits of these rules must be filed and considered in the same manner as a late-filed paper.” (Rules of Court, rule 3.1113(g).) Defendant has made a thorough reply to the opposition on the merits. The court will consider the oversized opposition and will deny defendant’s request for further briefing. This is the second time that plaintiffs have filed an oversized brief in clear violation of the Rules of Court. The court cautions plaintiffs of the necessity of following the Rules of Court. Failure to follow the Rules of Court, particularly where the failure is intentional, is a basis for the award of sanctions regardless of the merits of the underlying motion. (Rules of Court, rule 2.30(b).) The court expects compliance with the Rules of Court in the future.