Plaintiff Brent Hutton sued defendant Fidelity National Title Company, the escrow company used in plaintiff's refinance of his home loan, for allegedly charging a notary fee in excess of the amount permitted by Government Code section 8211.
After conducting discovery but before class certification, defendant moved for summary judgment on two principal grounds: (1) The $75 fee was not a violation of section 8211 because that section only limited fees for certain services (e.g., taking acknowledgments) and the notary involved in this case performed many other services (i.e., traveling to location of signing, presenting multiple documents for signature, showing where to sign or initial each document, answering questions, etc.) and (2) the $75 fee was charged and retained by a third party independent contractor, not by defendant, even though defendant as escrow holder disbursed the funds for such services. The trial court granted defendant's motion for summary judgment on both grounds. Plaintiff appeals from the resulting judgment. We find the first ground noted above to be dispositive and conclude on that basis that the trial
On February 26, 2010, plaintiff filed his complaint against defendant to obtain remedies for alleged violation of the UCL and unjust enrichment. According to the complaint, section 8211 made it unlawful for defendant to charge in excess of $10 for each notarized signature on a deed or deed of trust. In providing escrow services in connection with plaintiff's loan refinance, defendant allegedly billed a predetermined notary charge that exceeded the amount prescribed in section 8211. That same practice by defendant allegedly resulted in other persons (class members) being overcharged by defendant for notary services in connection with other real estate or loan refinance transactions. The complaint explained further: "The law could not be simpler. California Government Code Section 8211 sets a cap on notarization fees. Under Section 8211[, subdivision](a), it is illegal to charge more than $10 per notarized signature on each deed or deed of trust used in a specific Real Estate Transaction. [¶] ... [Defendant] charged ... more than $10 per signature. Thus, [defendant] violated the law." Based on these core facts, plaintiff alleged a first cause of action labeled as unfair business practices (elsewhere more specifically identified by plaintiff as a UCL cause of action) and a second cause of action for unjust enrichment. Both causes of action were explicitly premised upon defendant's alleged overcharge for notary fees in violation of section 8211.
On December 23, 2010, defendant filed its motion for summary judgment. We have already summarized above the grounds upon which that motion was made. In support of the first ground for the motion (i.e., that § 8211 was not violated), defendant presented, among other evidence, the declaration of the individual notary who was involved in the document signing in this case — namely, Lauri E. Kilpatrick (Kilpatrick). In her declaration, Kilpatrick described a variety of services that she typically provided in connection with
In support of the second ground for the motion, defendant presented evidence that Kilpatrick was an independent contractor who charged and retained the entire fee, and that she was not an agent or employee of defendant.
Plaintiff filed opposition to the motion for summary judgment, arguing that the fees charged were unlawful under section 8211 even if other services were provided because, allegedly, the only essential notary function performed was the taking of two acknowledgments and the HUD-1 described the fee as "Notary to Lauri Kilpatrick, APN & CSA." Plaintiff's opposition further argued that even if the fees were not unlawful, they were potentially unfair or fraudulent under the UCL because (1) defendant did not itemize or disclose the various services being provided and (2) Kilpatrick's answering of questions would constitute the unauthorized practice of law. According to plaintiff, since defendant's motion did not negate these other potential theories, defendant did not meet its initial burden as the moving party. Additionally, plaintiff's opposition argued that there were triable issues of fact whether Kilpatrick was defendant's agent, based in part on defendant's guidelines regarding its approved notaries, which guidelines may, according to plaintiff, indicate a degree of control over the manner of performing services. For these and other reasons, plaintiff argued that the motion for summary judgment should be denied.
Defendant's reply in support of its motion responded that all of plaintiff's claims were premised on violation of section 8211 and that no other theories were alleged in the complaint. Since in summary judgment proceedings the material issues are framed and limited by the pleadings, defendant's reply insisted it was not necessary for defendant to negate theories that were not pled. Additionally, defendant argued that the material facts showing Kilpatrick to be an independent contractor were not in dispute and, sw;%fheight therefore, that issue could properly be decided as a matter of law.
The hearing of the motion for summary judgment was held on March 14, 2011. Following oral argument, the trial court took the matter under submission. On May 13, 2011, the trial court issued its written order granting the motion for summary judgment. The court granted the motion because "no overcharge occurred as ... [section] 8211 only sets a price for taking an acknowledgment," and it "does not limit what notaries can charge for services which are not listed in that statute." Secondly, the trial court concluded that Kilpatrick was a third party independent contractor and, therefore, defendant was not liable even if there was an overcharge. On June 17, 2011, the trial court entered judgment in favor of defendant. Plaintiff timely appealed from that judgment.
The judgment entered below made defendant the prevailing party in the action. On August 8, 2011, defendant moved for an award of attorney fees based on a provision in the escrow instructions. Defendant's motion requested $266,801 in attorney fees. Defendant argued that this sum, though large, was reasonable in light of the fact that plaintiff had aggressively litigated and engaged in extensive and wide-ranging discovery, which treated the case as a multiyear, statewide class action, even though there had been no class certification. Defendant substantiated the actual amount of time spent in defending the litigation by submitting declarations and copies of billing statements or invoices.
Plaintiff objected to the enforcement of the attorney fees provision, contending it was so oppressive and one sided that it was unconscionable. Plaintiff also objected that the amount of attorney fees requested was unreasonable. The motion was heard on September 1, 2011, and following oral argument the trial court took the matter under submission. On October 21, 2011, the trial court granted the motion and awarded defendant attorney fees in the sum of $266,801. Plaintiff then separately appealed from the order granting attorney fees, and the two appeals were consolidated by this court.
We begin with the summary judgment motion. Summary judgment is appropriate when all of the papers submitted show there is no triable issue of material fact and the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) "The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 [107 Cal.Rptr.2d 841, 24 P.3d 493].)
A defendant may move for summary judgment if it is contended that the action has no merit. (Code Civ. Proc., § 437c, subd. (a).) A defendant moving for summary judgment has the initial burden of showing a cause of action is without merit. A defendant meets that burden by showing that one or more elements of the cause of action cannot be established, or that there is a complete defense thereto. (Id., subd. (p)(2).) If the defendant makes such a showing, the burden shifts to the plaintiff to produce evidence demonstrating the existence of a triable issue of material fact. (Ibid.; Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 849.)
Furthermore, "`"`[t]he [papers] filed in response to a defendant's motion for summary judgment may not create issues outside the pleadings and are not a substitute for an amendment to the pleadings.'"' [Citation.]" (County of Santa Clara v. Atlantic Richfield Co., supra, 137 Cal.App.4th at p. 333.) An opposing party's separate statement is not a substitute for amendment of the complaint. (Lackner v. North (2006) 135 Cal.App.4th 1188, 1201-1202, fn. 5 [37 Cal.Rptr.3d 863].) Similarly, "`"[d]eclarations in opposition to a motion for summary judgment `are no substitute for amended pleadings.' ... If the motion for summary judgment presents evidence sufficient to disprove the plaintiff's claims, ... the plaintiff forfeits an opportunity to amend to state new claims by failing to request it."' [Citations.]" (Conroy, supra, 45 Cal.4th at p. 1254.)
On appeal from a summary judgment, our task is to independently determine whether an issue of material fact exists and whether the moving party is entitled to summary judgment as a matter of law. (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1601 [50 Cal.Rptr.2d 431].) "We independently review the parties' papers supporting and opposing the motion, using the same method of analysis as the trial court. Essentially, we assume the role of the trial court and apply the same rules and standards." (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373 [105 Cal.Rptr.2d 699].) We apply the same three-step analysis required of the trial court. First, we identify the issues framed by the pleadings since it is these allegations to which the motion must respond. Second, we determine whether the moving party's showing has established facts which negate the opponent's claim and justify a judgment in
In this case, the trial court acknowledged that plaintiff's narrowly framed causes of action limited the issues that had to be addressed by defendant's summary judgment motion. According to the trial court, the only theory of liability alleged in the complaint was that defendant overcharged plaintiff for notary services and retained the benefits thereof. That is, plaintiff's entire complaint was premised on the assumption that section 8211, subdivision (a), was violated in this case when plaintiff was charged $75 for Kilpatrick's services. When defendant's motion presented evidence showing that Kilpatrick provided many other services at the loan signing besides merely taking two acknowledgments, the trial court concluded that plaintiff's causes of action were without merit based on that showing and the clear language of the statute. According to the trial court, section 8211 does not limit what may be charged "for services which are not listed in that statute." We agree with that analysis.
In the discussion that follows, we shall break down defendant's (and the trial court's) reasoning into three logical steps: (1) the meaning of section 8211, (2) the limited scope of plaintiff's pleading, and (3) defendant's evidentiary showing as the moving party successfully defeating the causes of action as pled. When each step is considered, it will serve to highlight that defendant met its initial burden as the moving party. Afterwards, we will address the matters presented in plaintiff's opposition.
Throughout plaintiff's complaint, the sole basis for liability was the claim that defendant violated section 8211 and thus overcharged plaintiff. For example, in the introductory general allegations, plaintiff's complaint alleged that section 8211 "adopts a specific regulatory scheme which establishes specific limits on the amount of fees that can be charged for notarizing documents." Allegedly, plaintiff was charged a predetermined notary fee that was contrary to section 8211. As to plaintiff's loan transaction, defendant allegedly charged a predetermined fee of $125 "even though only [two] signature[s were] notarized in Plaintiff's Real Estate Transaction."
Further, as to the first cause of action (the UCL claim labeled as "Unfair Business Practices"), the complaint alleged that the basis for that claim was
We conclude from these allegations that plaintiff's entire complaint was founded on one, and only one, theory of liability: that defendant overcharged plaintiff for notary services under the provisions of section 8211, subdivision (a). As the trial court correctly held, "[b]ased on the causes of action alleged, Plaintiffs only make a claim that [defendant] overcharged them for the notary fees." (Italics added.) Since that was the exclusive theory of liability pled by plaintiff, it was all that had to be addressed by defendant's motion for summary judgment. (County of Santa Clara v. Atlantic Richfield Co., supra, 137 Cal.App.4th at pp. 332-333 [theories not pled by plaintiff need not be addressed in defendant's motion under Code Civ. Proc., § 437c].)
As noted above, in meeting the issue of the alleged overcharge under section 8211, defendant's motion demonstrated that Kilpatrick, who was both a notary and a CSA, provided a number of signing services in connection with plaintiff's loan refinance in addition to merely taking the two acknowledgements. Among other things, it was shown that Kilpatrick presented the various loan documents for signature, read the mandatory disclosures, explained the purpose of loan documents, indicated where the borrower must sign on each document, and answered questions. In short, she traveled to the place of the signing (which plaintiff recalled was his home) and facilitated the closing of the loan by obtaining the necessary signatures on all of the documents in a careful, step-by-step process, including answering questions. While the assistance and service provided by Kilpatrick included the taking of two acknowledgments (each with one notarized signature), her performance of that intrinsically notarial act was merely one part of the overall signing services she provided.
More than that, Kilpatrick's deposition testimony and her official notary journal evidenced that when she took the two acknowledgements in connection with plaintiff's loan refinance signing, she recorded in her notary journal
In conclusion, because section 8211 only limited fees for the services specifically listed therein and did not prohibit remuneration for other services rendered, defendant's evidentiary showing was sufficient to prima facie negate plaintiff's claim that defendant allegedly violated the statute by charging $75. Plaintiff's complaint assumed that the $75 charged was for taking two acknowledgments, but defendant showed that it was instead for a variety of loan signing services provided by Kilpatrick. We conclude that defendant met its burden as the moving party.
Plaintiff argued in his opposition to the motion, as he does on appeal, that even if defendant negated plaintiff's claim for violation of section 8211, defendant nevertheless failed to meet its burden as the moving party since there were other potential theories of liability available to plaintiff that defendant's motion did not address. Plaintiff also asserted that evidence referenced in his opposition was sufficient to create a triable issue of material fact. We now address these arguments.
In an effort to persuade us that these theories were somehow pled, plaintiff notes that the first cause of action included a statement that defendant's conduct was "unlawful, unfair or fraudulent." But that was a bare conclusion, not the factual basis of a cause of action. Moreover, we cannot ignore that the next sentence of the complaint made it unmistakably clear that the first cause of action was based solely on "unlawful" conduct. It stated, as we previously noted above, as follows: "Namely, [defendant] overcharged Plaintiff ... by assessing and collecting set Notary Fees in each Real Estate Transaction irrespective of the number of signatures actually notarized. Plaintiff ... [was] charged more than California law allowed, and thus lost money due to [defendant's] unlawful business practices." (Italics added.) Likewise, the second cause of action for unjust enrichment was premised exclusively on the identical unlawful conduct — that is, on the claim that defendant charged more than what section 8211 permitted, and "through violating [that] California law, unjustly enriched [itself] ...." Plainly then, the actionable wrongdoing for which relief was sought in the complaint was not a failure to disclose or itemize, nor a notary's unauthorized practice of law, but that of overcharging plaintiff by exceeding the amount permitted under section 8211.
Finally, plaintiff tries to make something of the fact that the concept of itemization was briefly mentioned in the complaint. That is, the complaint alleged that defendant did not compute notary fees based on an itemization of the total number of notarized signatures taken in a transaction, but instead defendant billed a predetermined "block" amount. But that allegation was simply a description of the process by which defendant allegedly overcharged plaintiff under section 8211, with the overcharge itself being the sole basis of the cause of action in the pleading. In conclusion, nothing in the allegations of the complaint indicated that insufficient disclosure or itemization, or unauthorized practice of law by a notary, constituted the actionable wrongdoing on defendant's part for which relief was sought. No such causes of action were alleged.
The trial court's order granting defendant's motion for attorney fees and costs is reversed. In all other respects, the judgment is affirmed. The parties shall bear their own costs.
Gomes, Acting P. J., and Franson, J., concurred.