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 232 Cal.App.4th 238 (2014) 181 Cal. Rptr. 3d 330 CHRISTINA I. PETERSEN et al., Plaintiffs and Appellants, v. BANK OF AMERICA CORPORATION et al., Defendants and Respondents. No. G048387. December 11, 201 4. Court of Appeals of California, Fourth District, Division Three. *240 Brookstone Law, Vito Torchia, Jr., Sasan Behnood, Carlos E. MacManus and Deron Colby for Plaintiffs and  Appell ants. 240 Bryan Cave, Stuart W. Price, Trevor Allen and Douglas E. Winter for Defendants and Respondents. OPINION BEDSWORTH, Acting P. J. — This appeal, after a successful demurrer for misjoinder, tests the limits of California's permissive joinder statute, section 378 of the Code of Civil Procedure. [1]  There are no less than 965  plaintiffs *241 listed in the caption of the third amended complaint. Strictly speaking, though, this is a "mass action," not a "class action." Had this case been filed prior to 2005, in all probability it would  have been filed as a class action. However, in 2005, Congress enacted the Class Action Fairness  Act of 200 5 (C AFA) codified at 28 United States Code section 1332 (d). (See genera lly Visendi v. Bank  o f  Ame rica (9th Cir. 2013) 733 F.3d 863, 866-867 ( Visendi ).) CAFA allows the removal to federal court of state court class actions when there is a class with 100 or more class members, with at least one class member from a different state than at least one defendant, and there is more than $5 million at stake. (2 Newberg on Class Actions (5th ed. 2012) § 6:14, pp. 542-646.) That is certainly this case — if  it had been filed as a class action. And perhaps even if it had not  been so pleaded.  241 We face two questions of state law: First, despite the rather staggering number of joined plaintiffs, does the third amended complaint allege, to track the statutory language of section 378, the "same ... series of transactions" that will entail litigation of at least one common question of law or fact? [2]  Focusing on the language of the statute and the applicable precedent construing it, we conclud e it does. Just a few years after section 378's amendment in 1927, our Supreme Court declared the statute's same-series-of-transactions language is to be construed broadly in favor of  join der. ( Joerger v. Pacific Gas & Electric Co.  (1929) 207 Cal. 8, 19 [276 P. 1017].) It has never retreated from that position. The third amended complaint alleges that in the mid-2000's, defendant Countrywide Financial Corporation developed a two-prong business strategy to increase its profits: First, Countrywide would use captive real estate appraisers to provide dishonest appraisals that would inflate home prices beyond levels that would otherwise prevail in an honest market; second, Country wide would i nduce its borrowers — these plain tif fs in particular — to take loans Countrywide knew they could not afford by misleading them as to their ability to repay their loans, including misrepresenting key terms of the loans themselves. Countrywide did this because it had no intention of keeping the loans on its books, but intended to bundle them into saleable tranches and sell them to investors. *242 The 965 plaintiff s are peo ple who borrowed money from Countrywide in the mid-2000's, t o their ultimate chagrin.  As we explai n b elow, there a re sufficien t common questions of la w a nd fact in this case to satisfy section 378, i ncludi ng whether a mortgage lender has a duty to its borrowers not to encourage "high ball," dishonest appraisals and whether  242

Petersen v. Bank of America Corp., 232 Cal. App. 4th 238 - Cal_ Court of Appeal, 4th Appellate Dist., 3rd Div

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  • 7/1/2015 Petersenv.BankofAmericaCorp.,232Cal.App.4th238Cal:CourtofAppeal,4thAppellateDist.,3rdDiv.2014GoogleScholar

    https://scholar.google.com/scholar_case?case=6418298636726377212&q=peterson+v+bank+of+america&hl=en&as_sdt=2006 1/24

    232Cal.App.4th238(2014)181Cal.Rptr.3d330

    CHRISTINAI.PETERSENetal.,PlaintiffsandAppellants,v.

    BANKOFAMERICACORPORATIONetal.,DefendantsandRespondents.

    No.G048387.

    December11,2014.

    CourtofAppealsofCalifornia,FourthDistrict,DivisionThree.

    *240BrookstoneLaw,VitoTorchia,Jr.,SasanBehnood,CarlosE.MacManusandDeronColbyforPlaintiffsandAppellants.

    240

    BryanCave,StuartW.Price,TrevorAllenandDouglasE.WinterforDefendantsandRespondents.

    OPINION

    BEDSWORTH,ActingP.J.

    Thisappeal,afterasuccessfuldemurrerformisjoinder,teststhelimitsofCalifornia'spermissivejoinderstatute,section378oftheCodeofCivilProcedure.[1]Therearenolessthan965plaintiffs*241listedinthecaptionofthethirdamendedcomplaint.Strictlyspeaking,though,thisisa"massaction,"nota"classaction."Hadthiscasebeenfiledpriorto2005,inallprobabilityitwouldhavebeenfiledasaclassaction.However,in2005,CongressenactedtheClassActionFairnessActof2005(CAFA)codifiedat28UnitedStatesCodesection1332(d).(SeegenerallyVisendiv.BankofAmerica(9thCir.2013)733F.3d863,866867(Visendi).)CAFAallowstheremovaltofederalcourtofstatecourtclassactionswhenthereisaclasswith100ormoreclassmembers,withatleastoneclassmemberfromadifferentstatethanatleastonedefendant,andthereismorethan$5millionatstake.(2NewbergonClassActions(5thed.2012)6:14,pp.542646.)Thatiscertainlythiscaseifithadbeenfiledasaclassaction.Andperhapsevenifithadnotbeensopleaded.

    241

    Wefacetwoquestionsofstatelaw:First,despitetheratherstaggeringnumberofjoinedplaintiffs,doesthethirdamendedcomplaintallege,totrackthestatutorylanguageofsection378,the"same...seriesoftransactions"thatwillentaillitigationofatleastonecommonquestionoflaworfact?[2]Focusingonthelanguageofthestatuteandtheapplicableprecedentconstruingit,weconcludeitdoes.Justafewyearsaftersection378'samendmentin1927,ourSupremeCourtdeclaredthestatute'ssameseriesoftransactionslanguageistobeconstruedbroadlyinfavorofjoinder.(Joergerv.PacificGas&ElectricCo.(1929)207Cal.8,19[276P.1017].)Ithasneverretreatedfromthatposition.

    Thethirdamendedcomplaintallegesthatinthemid2000's,defendantCountrywideFinancialCorporationdevelopedatwoprongbusinessstrategytoincreaseitsprofits:First,Countrywidewouldusecaptiverealestateappraiserstoprovidedishonestappraisalsthatwouldinflatehomepricesbeyondlevelsthatwouldotherwiseprevailinanhonestmarketsecond,CountrywidewouldinduceitsborrowerstheseplaintiffsinparticulartotakeloansCountrywideknewtheycouldnotaffordbymisleadingthemastotheirabilitytorepaytheirloans,includingmisrepresentingkeytermsoftheloansthemselves.Countrywidedidthisbecauseithadnointentionofkeepingtheloansonitsbooks,butintendedtobundlethemintosaleabletranchesandsellthemtoinvestors.

    *242The965plaintiffsarepeoplewhoborrowedmoneyfromCountrywideinthemid2000's,totheirultimatechagrin.Asweexplainbelow,therearesufficientcommonquestionsoflawandfactinthiscasetosatisfysection378,includingwhetheramortgagelenderhasadutytoitsborrowersnottoencourage"highball,"dishonestappraisalsandwhether

    242

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    Countrywidereallyhadadeliberatestrategyofplacingborrowersintoloansit"knew"andtheword"knew"isakeypartofplaintiffs'pleadingtheycouldnotafford?

    Itisimportanttonoteattheoutsetthatthisisaproceduralcase,soweexpressnoopiniononthelegalorfactualmeritsofplaintiffs'claimsvisvisCountrywide'sallegedtwoprongstrategy.Todrawaparalleltoclassactioncertificationprocedures,permissivejoinderisfundamentallyaproceduralmatterwherethefocusisnotonthemerits,butonwhetherthereissufficientcommonalitytosatisfytherequirementsoftherelevantstatute.(SeeBrinkerRestaurantCorp.v.SuperiorCourt(2012)53Cal.4th1004,10241025[139Cal.Rptr.3d315,273P.3d513](Brinker).)

    Theapplicabilityofsection378isthecomparativelyeasyquestion.Languageandprecedentdictatetheresult.TheharderquestioniswhetherCalifornia'sproceduresgoverningpermissivejoinderareuptothetaskofmanagingmassactionslikethisone.Again,weanswerintheaffirmative.Andagain,Brinkerprovidestherelevanttemplate.Whilewereversethejudgmentdismissingallbutoneplaintiffformisjoinder,weemphasizethatonremandthetrialcourtwillhavetoconsideravarietyofproceduraltoolswithwhichtoorganizethiscaseintoappropriateandmanageablesubclaimsandsubclasses.(Cf.Brinker,supra,53Cal.4thatp.1004[existenceofsubclassesmadeascertainmentofviabilityofdiscretetypesofwageandhoursclaimsmanageable].)Whiletheironyofrequiringthecasetobedividedintotrancheshasnotescapedus,weareconfidentthetrialcourtcanhandlethetask.

    I.FACTS

    A.TheThirdAmendedComplaint

    Form

    Theoperativecomplainthereisthethirdamendedone,filedJune2012.Itisover14inchestall.Thefirstpageisfoundonpage5412ofvolume19oftheclerk'stranscriptandcontinuesonuntiltheproofofserviceafterthelastexhibitonpage8554ofvolume29.Yes,thethirdamendedcomplaintis3,142pageslong.

    Butitsorganizationismoreintuitivethanthatwouldsuggest.Thecomplaintconsistsofamain,narrativebodyofallegationstotaling208pages,*243followedbyanappendixAthatreadslikeaseriesofminicomplaintsnarratingthe(rathersimilar)loanacquisitionexperiencesofvariousplaintiffs.Mostofthosenarrativesarevariationsonthesametheme:AcouplewentinforaloantheamountneededwasalreadyaninflatedfigurebecauseofCountrywide'spriorpricefixingoftherelevantrealestatemarket.ThecouplethenreliedonloanofficersatCountrywidetoplacetheminaloantheycouldafford,buttheloanofficershidcertainaspectsoftheloanfromthem,usuallytheexistenceofaballoonpayment,sometimesnegativeamortization,sometimesachangeinthetermsorcalculationofinterestrates.Andfinally,whentheGreatRecessionhitandthelocalrealestatebubbleburstdecreasingeverybody'shomevalues,theseplaintiffsdiscoveredtheycouldnotaffordtheirloans,couldnotaffordtorefinance,andsustainedvariouskindsofensuingfinancialdamage.

    243

    AppendixAextends1,771pagesfromtheendofvolume19ofthereporter'stranscriptthroughthemiddleofvolume25.Thenbegintheexhibits.ExhibitAconsistsofaseriesofemailsacquiredbyplaintiffs,theupshotofwhichseemstobethattherewereplentyofpeopleinCountrywidewhowereexpressingmisgivingsaboutthefirm'svariousloan"products"andloanstrategiesinthemid2000's.ExhibitBconsistsofafewpagesofCountrywide'sownpublisheddescriptionofitsvariousloanproducts.(ExhibitBlookslikeasalesbrochure.)FinallycomeexhibitsCthroughMMM,whichtakeupthebetterpartofaboutfourvolumesofclerk'stranscript,extendingatotalof1,106pages.Theseappeartobeaseriesoffilesconsistingofformforeclosuredocumentspertainingtoasubsetoftheplaintiffsnamely90orsowhoareallegingwrongfulforeclosure.Thesedocumentsmostlyincludenoticesofdefaultandnoticesofsaleinindividualcases.[3]

    B.Content

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    Whilethethirdamendedcomplaintlistssixentitiesasdefendants,[4]theyarenow,essentially,onedefendantCountrywideasabsorbedbyBankofAmericaCorporation.Thatis,allsixentitiesareeitherdirectlycontrolledbyBankofAmerica,whichhadearlierabsorbedCountrywide,orareownedbyoraffiliatedwitheitherCountrywideorBankofAmerica.[5]

    *244Summarizingthecomplainteventheabridgedversionconsistingofjustthe208pagesoftraditionalallegationspresentsachallenge.Rhetoricalflourishesabound,reminiscentofWilliamJenningsBryan'sfamouscrossofgoldspeechfromthelate19thcentury(whichcometothinkofit,wasalsoaboutbanking).[6]Thebasicnarrativehasbeenrecountedinseveralcourtdecisions,[7]butitcan,wethink,besummarizedinjustonesentence:Sometimeinthemid2000's,Countrywidechangedthenormalgameplanof*245anyhomemortgagelenderfrommakingaprofitableloanthatispaidbackovertimetoanewgameplanbywhichitwouldmakeitsprofitsbyoriginatingloans,thentranchingthem(choppingthemupintolittlebitsandpieces)andsellingthemonthesecondarymarkettounsuspectinginvestorswhowouldthemselvesassumetherisktheborrowerscouldnotrepay.[8]Atroot,everythinginthethirdamendedcomplaintisanelaborationonthatthemeinsofarasitdirectlyaffectedtheseplaintiffborrowersfromCountrywide.

    244

    245

    Inordertomakethenewgameplanwork,Countrywideallegedlyengagedinaninterrelatedseriesoftransactionstheneteffectofwhichwastosaddleplaintiffswithloanstheycouldnotafford.Thisseriesconsistedoftwoidentifiablephases:Phase1wastocreateanotherwiseartificialupwardspiralofappreciatingpropertyvalues.ThisupwardspiralwasallegedlyaccomplishedbyCountrywideusingitsowncaptiveappraisalcompany,defendantLandsafe,to"falsely"inflateallvaluations.TheinflatedvaluestookonalifeoftheirownwhichinflatedallpropertyvaluesinCalifornia.[9]

    *246Phase2wastoinduceborrowerstotakeimprovidentloans.Normallyaprudentlenderwouldwanttolendtoacreditworthyborrowerwhocouldpaybacktheloanatthestatedinterestrate.ButgivenCountrywide'snewmodelbusinessplaninwhichtheultimatepayeesoftheloansweregoingtobeoutsideinvestorswhowouldtakethehindmost,Countrywidewantedtosaddleborrowerswiththemaximumamountofdebtpossibleanyriskofdefaultwouldbebornebyinvestorsonthesecondarymarket.Meanwhile,Countrywidewouldpocketloanfees,commissionsandprofitsfromthesaleofloansafterthoseloansweretranchedandsecuritized.Thekeytothesecondprong,i.e.,toinducingborrowersintofinancialimprovidence,wastomisleadthemastoloanterms.

    246

    ThespecificmisleadingstatementsallegedlymadetotheseplaintiffsarescatteredthroughoutappendixA,soisolatingthemallintomanageablegroupsisachore.[10]Twobroadthemes,however,canbeidentified:First,Countrywideloanofficersandsalespeopleareallegedtohavemadebroadassurancestoeachoftheplaintiffsthattheycould"afford"theirloans.[11]Second,hereandthereinappendixAareallegationsthatloanrepresentativesfromCountrywidedidnotdiscloseinterestrateadjustmentsorloantermssuchaswhenaninitialfixedrateloansuddenlybecameanadjustableloan.

    Bythetimeofthethirdamendedcomplaint,ithadcrystallizedintofourcausesofaction:intentionalmisrepresentation,negligentmisrepresentation,unfaircompetition,andwrongfulforeclosure.Thefirstthreeapplytoallplaintiffs,theforeclosureclaimtoonly90ofthem.Thewrongfulforeclosureclaim,interestinglyenough,presentsaspristineacommonissueoflawasitispossibletoimagine:Itstheoryisthatthevariousindividualforeclosureswereallunlawfulbecausetheeventualtrusteeswhoforeclosedontheloanwerenottheoriginalagentsdesignatedintheloanpapers.Theclaimthuspresentsatidy,discretequestionoflawcommontoall90foreclosureplaintiffs.

    *247C.TrialCourtDisposition247

    Defendantsdemurredtothethirdamendedcomplaintonthegroundofmisjoinderofplaintiffsinviolationofsection378.[12]Thetrialcourtsustainedthedemurrerwithoutleavetoamendanddismissedalltheplaintiffs"withoutprejudicetotherightsoftheotherplaintiffstofiletheirowncomplaints,"exceptforfirstnamedplaintiff,Wright.Thejudgesaid:"TheCourtunderstandstheimportanceoftheseclaimstothehomeowners,buttheproblemappearstobethattheyhavebeenimproperlyjoinedinasinglecasebasedinthewaytheThirdAmendedComplainthasbeenwritten.While

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    certainlyplaintiffWrightisentitledtogoforwardwithhisclaims,thelanguageofthecomplaintdraftedbyhiscounselinitsfourthversionsetsforthseparatetransactions,loanapplicationsandapprovals,withmanyoftheloansoriginatingwiththirdparties.Underthecontrollinglaw,CCPsection378,thereappearstobeamisjoinderoftheplaintiffs.Theclaimsoftheotherhomeownerscanstillgoforward,buttheywillhavetofiletheirowncomplaints."

    InJanuary2013,ajudgmentofdismissalwasenteredinfavorofdefendantsagainstallplaintiffsexceptforWrighthencethetitleofthecasebeforeusderivesfromthesecondnamedplaintiffinthecaption,ChristinaI.Petersen.Thedismissalwas"withoutprejudicetotherightsofthedismissedPlaintiffstofiletheirowncomplaints."Plaintiffsfiledtwonoticesofappeal.Theythatis,about800oftheoriginal965filedanoticeofappealfromthejudgmentofdismissal.Itisthisappealwithwhichouropinionismainlyconcerned.

    Butbackinthesecondamendedcomplaint,therehadbeenacauseofactionforfraudulentconcealment.Thatfraudulentconcealmentclaimhadbeendismissedonthemerits,pursuanttoademurrer.Theorderdismissingthefraudulentconcealmentclaimisalsothesubjectofasecondappeal.Wedonotaddressthesubstanceofthissecondappeal.Becauseofourdispositionoftheappealfromtheorderdismissingallplaintiffs(butone)formisjoinder,thereisnofinaljudgmentinthiscase.Accordingly,wedismisstheappealfromthefraudulentconcealmentcauseofactionbecauseitwouldviolatetheonefinaljudgmentruleforustoconsideritsmeritsinthisproceeding.(SeeKurwav.Kislinger(2013)57Cal.4th1097,1107[162Cal.Rptr.3d516,309P.3d838][notingpolicyagainstpiecemealappeals]Morehartv.CountyofSantaBarbara(1994)7Cal.4th725,741,fn.9[29Cal.Rptr.2d804,872P.2d143][same].)Rather,ourfocusisonthepermissivejoinderofsuchalargenumberofplaintiffsinthis"massaction."

    *248II.DISCUSSION248

    A.PermissiveJoinderUnderSection378

    (1)Californiaprocedurallawisinfusedwithasolicitude,ifnotanaltogetheroutrightpreference,fortheeconomiesofscaleachievedbyconsolidatingrelatedcasesintoasingle,centrallymanagedproceeding.Classactionsthemselves,assetforthinsection382,constitutethemostobviousexample,sincetheyallowtheadjudicationofcommonissuesofliabilitybasedontheaggregationofclaimsinoneproceeding,usuallyinacontextwhereadjudicatingthoseclaimspiecemealwouldbeimpracticable.(SeeVasquezv.SuperiorCourt(1971)4Cal.3d800,816[94Cal.Rptr.796,484P.2d964]accord,CityofSanJosev.SuperiorCourt(1974)12Cal.3d447,457[115Cal.Rptr.797,525P.2d701][observinga"recognizedpolicyfavoring""appropriateclassactions"].)

    Theaffinityforeconomiesofscalemanifestsitselfinanumberofotherproceduralcontexts.Theseincludethestatutorypreferenceincriminallawthatfavorsconsolidationofchargesagainstmultipledefendantswherethereiscrossadmissibility[13]andrulesofcourtrequiringdesignationofrelatedcasestoavoid"substantialduplicationofjudicialresourcesifheardbydifferentjudges."[14]Itevenshowsupinthecommonlawdoctrineofresjudicataandtheappellatedoctrineoftheonefinaljudgmentrule.[15]

    Itisalsomanifestedbythestatutoryprovisionbeforeusnowtheonethatallowsforpermissivejoinderinsection378.AnimportantaspectoftheLegislature'sdraftingofthestatuteshouldnotgounremarked:Whilemanyproceduralstatutescommitdiscretiontothetrialjudge,thisstatutecommitsdiscretiontotheplaintiffs...totheplaintiffsthemselves.Ifthereisarighttoreliefarisingoutofthesameseriesoftransactions,itistheplaintiffswhogettodecidewhethertojointogetherinacommonaction.Considerthesyntaxoftheopeningtosection378thewaytheLegislaturewroteit:"Allpersonsmayjoininoneactionasplaintiffsif:[](1)Theyassertanyrighttoreliefjointly...."(Italicsadded.)Itistheplaintiffswhomaketheinitialdecisiontofilejointly.

    *249(2)Inthiscase,thekeywordsonwhichthatchoiceturnsare"same...seriesoftransactions."Asfarbackasthelate1920's,intheimmediatewakeofthe1927amendmentofsection378,ourSupremeCourtnotedthatthepermissivejoinderstatutereflectedtheLegislature'sdesirethatjoinderbeliberallyconstruedsoastopreventthediseconomyofa"multiplicity"ofcases.SaidthecourtinJoergerv.PacificGas&ElectricCo.,supra,207Cal.atpages1920:"Oneofthe

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    objectsofthereformedorcodeprocedureistosimplifythepleadingsandconductofactions,andtopermitthesettlementofallmattersofcontroversybetweenpartiesinoneaction,sofarasmaybepracticable....Topermitajoinderwherepossiblemakesmanifestlyfortheexpeditiousdispositionoflitigationwithoutworkinghardshiptoanypartydefendant,andforthisreasonstatutesrelatingtojoindershouldbeliberallyconstrued,unlessexpresslyforbidden,totheendthatamultiplicityofsuitsmaybeprevented."(Italicsadded.)

    Thehighcourtexpressedsimilarsentimentsagain,relativelysoonafterthestatute'samendmentinKraftv.Smith(1944)24Cal.2d124,129[148P.2d23].SodidtheCourtofAppeal.(SeeBussetv.CaliforniaBuildersCo.(1932)123Cal.App.657,666[12P.2d36][notingjoinderstatures"shouldbeliberallyconstruedinfurtheranceofadministrativeefficiency"]Morrisv.Duncan(1936)14Cal.App.2d635,639[58P.2d669]accord,Colemanv.TwinCoastNewspaper,Inc.(1959)175Cal.App.2d650,653[346P.2d488][thejoinderstatute"shouldbeliberallyconstruedsoastopermitjoinderwheneverpossibleinfurtheranceof[its]purpose"].)TheRutterGrouptreatiseoncivilprocedurebeforetrialhasaccordinglydrawntheobviousconclusion:"Therequirementthattherighttoreliefarisefromthe`sametransactionorseriesoftransactions'isconstruedbroadly.Itissufficientifthereisanyfactualrelationshipbetweentheclaimsjoined(andthistendstomergewiththe`commonquestion'requirement,below)."(Weil&Brown,Cal.PracticeGuide:CivilProcedureBeforeTrial(TheRutterGroup2014)2:211,p.260.1(rev.#1,2013),someitalicsadded(hereinafterRutterCaliforniaCivilProcedureTreatise).)

    Section378isbasedonrule20oftheFederalRulesofCivilProcedure(28U.S.C.)(seeRodriguezv.BethlehemSteelCorp.(1974)12Cal.3d382,407,fn.28[115Cal.Rptr.765,525P.2d669]),andthefederalrulehasbeeninterpretedtoincludethesameadjurationtoliberalapplication:"Requirementsliberallyconstrued:Therequirementsgoverningpermissivejoinderareconstruedliberallyinordertopromotetrialconvenienceandtoexpeditefinaldeterminationofdisputes:`UndertheRules,theimpulseistowardentertainingthebroadestpossiblescopeofactionconsistentwithfairnesstothepartiesjoinderofclaims,partiesandremediesisstronglyencouraged.'"(Schwarzeretal.,Cal.PracticeGuide:FederalCivilProcedureBeforeTrial*250(TheRutterGroup2014)7:138,p.757(rev.#1,2014),boldfaceomitted,quotingMineWorkersv.Gibbs(1966)383U.S.715,724[16L.Ed.2d218,86S.Ct.1130].)

    250

    (3)Broadconstructionofsection378hasbeenexemplifiedinaseriesofappellatedecisionsovertheyears.ThemostinstructiveisAnayav.SuperiorCourt(1984)160Cal.App.3d228[206Cal.Rptr.520].There,multiplejoinderwasupheldinacaseinvolvingwidespreadexposuretohazardouschemicals.Anayaallowedthejoinderof200plaintiffsonthebasisthatexposuretoaharmfulchemicalinvolved"thesameseriesoftransactions"eventhoughtheplaintiffswereexposedatdifferenttimesandindifferentways.(Id.atp.233.)InAnayatherewereasinthecaseathandlotsofdifferencesintheindividualdamagessustainedbytheplaintiffsfromthedefendants'conduct.ButtheAnayacourtpointedoutthatthekeyquestionwastheexistenceof"commonquestionsoflawandfact,"andnotwhether,asthedefendantshademphasized,therewere"differencesintheevidencetobepresentedandinthelegaltheoriestobeusedbythevariousplaintiffs."(Ibid.)The"point"ofsection378,saidthecourt,istoallowjoinderwhere"`anyquestionoflaworfactcommontoall'plaintiffswillarise."(160Cal.App.3datp.233.)AndAnayathought"any"means"any."Thewordwasemphasizedbythecourt.(Ibid.)

    BroadconstructionwasalsothewatchwordinStateFarmFire&CasualtyCo.v.SuperiorCourt(1996)45Cal.App.4th1093,1113[53Cal.Rptr.2d229].[16]InStateFarm,multiplejoinderwasallowedinNorthridgeearthquakelitigationbecausetherewasanallegedlyfraudulent"systematic"practiceofdeceivingpolicyholders.(45Cal.App.4thatp.1113.)StateFarmallowedthejoinderof165Northridgeearthquakeclaimantswhoassertedthattheywerethevictimsofacleverinsurancepolicyswitch:Theirearthquakeendorsementstoallriskpolicieshadbeenreplacedwithaseparateearthquakepolicynottetheredtotheallriskpolicy,resultinginlowertotalcoverage.(45Cal.App.4thatp.1099.)

    Significantlyforourpurposes,theplaintiffsinStateFarmfurtherallegedthataftertheearthquaketheysuffered"some15differenttypesof`improperclaimshandlingprocesses'"whichwere"`systematically,methodicallyandgenerally'"implementedbytheinsurer.(StateFarmFire&CasualtyCo.v.SuperiorCourt,supra,45Cal.App.4thatpp.10991100.)Thediversityof*251thoseclaims,however,didnotpreventjoinder,eventhoughtheynecessarilyentailedindividualizedfactsanalogoustotheindividualloantransactionsbeforeusnow.

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    InsomewaysStateFarmappliesafortioritocertainoftheallegationsbeforeusnow.Whiletheremightbeaplethoraofwaysto"lowball"propertyinsuranceclaims,therearecomparativelyfewwaysto"highball"appraisalsbasically,asthethirdamendedcomplaintalleges,youcansimplyusenoncomparablepropertiesascomparables,orrelyonpreviouslymadedishonestappraisalsofcomparables.And,whilebadfaithinsuranceadjustmentinvolvesavarietyofsmalltricksandsubjectivenegotiatingpressures,herethewaysinwhichdefendantsallegedlymisledborrowersconstituteadiscretesetofonlyafewitemsmainlyunexpectedballoonpaymentsandswitchesfromfixedtoadjustablerates.IfthejoinderofawidevarietyofclaimshandlingpracticeswasappropriateunderStateFarm,thejoinderofvariousformsofloanimproprietyhereseemsequallycorrect.

    Afurthermanifestationofthebroadconstructionrequiredundersection378isfoundinMoev.Anderson(2012)207Cal.App.4th826[143Cal.Rptr.3d841].InMoe,twopatientsallegedtheywerevictimsofseparatesexualassaultsallegedlycommittedbyaphysician.Tobesure,joinderwasnotappropriateastothephysician,sincetheassaultsinvolved"separateanddistinct"events"duringseparateanddistincttimeperiods."(Id.atp.833.)Buttheclaimsagainstthemedicalgroupforwhichthephysicianworkedwasadifferentstory.Joinderwasappropriateastothesingleemployersincethesamebasicissueofnegligentsupervisionandhiringwascommontoboth(otherwisedisparate)plaintiffs,andwouldinvolvethesameevidenceagainstasingledefendant.Thecourtsaid:"Thus,aswasthecaseinAnaya,plaintiffshaveassertedarighttoreliefarisingoutofthesameseriesoftransactions.Sotooaretherecommonissuesoflaworfact.ThesameevidencewithrespecttoHealthworks'shiringandsupervisionofAndersonwillneedtobeadducedinseparatelawsuitsifjoinderisnotallowed."(Id.atp.836,italicsadded.)Needlesstosay,inthecasebeforeusthereismuchinthewayofcommonevidenceandtheoriesofliabilityandmuchofthesameevidencewillhavetoberepeatedlyproducedifjoinderisnotallowed.Indeed,weshuddertothinkoftheduplicationofeffortifevenadozenofthe800orsoplaintiffswhohavebroughtthisappealhaveindividualtrialsonliabilityissues.

    Finally,Adamsv.Albany(1954)124Cal.App.2d639[269P.2d142]issimilarlyinstructive.There,joinderofnolessthan40setsofhomebuyers(recentwarveterans)washeldproper.Eventhoughthedefendantargueditsallegedfraudulentschemeinvolvedtortsthattookplaceatdifferenttimesandplaces,andeventhoughtheevidenceastoonehousewouldhavenoprobativevalueastoanyotherhouse,theappellatecourtinvokedthe"series*252oftransactions"languagefromsection378andsaiditwasenoughthatdefendantwasallegedtohaveengagedinaconspiracytodefraudtheveteransbysellingthemsubstandardhousing.Ashere,Adamsisacasewherethealleged"businessplan"ofthedefendantwascommontomultipledefendants,eveniftheirspecificdamagesmightvary.

    252

    InlightofStateFarm,Anaya,MoeandAdams,itwouldbeamajordeparturefromCaliforniacaselawconstruingsection378forustoupholdthetrialcourt'sdemurrerformisjoinderinthiscase.Thiscaseismerelyaquantitativelynotqualitativelylargerversionofthosefour,particularlyStateFarmandAdams.

    Here,wehavealreadyidentifiedthetwocoreaspectsofthecommonplanallegedinthethirdamendedcomplaintthatnecessarilywillentailcommonevidence(1)whetherCountrywidedeliberatelyencourageddishonestappraisalsand(2)whetherCountrywideencourageditsloanofficerstoconcealloanterms.Thesetwoaspectsdevolveintoseveralquestionsoflaworfactbearingonliability.Herearefourthatcomereadilytomind:(a)whetherCountrywidehadaconsciousbusinessplantopressureorotherwiseundulyinfluenceappraiserstodishonestlyinflateappraisals(b)ifitdid,whetherevensuchdishonestappraisalscouldhavethecumulativeeffectofinflatingrealestatemarketsinawaythatmighthavecausedbuyersand/orborrowersinthosemarketstopaymore,orborrowmore,thantheyotherwisemighthave(c)eveniftheydid,whethersuchmarginallyextraborrowedmoneyconstitutescognizabledamagesundersometheoryoflawand(d)whetherafailuretoexpresslywarnbuyersorborrowersaboutsuchkeytermsofawrittenloanagreement,suchaschangesfromfixedtoadjustablerates,ortheneedtomakeaballoonpaymentattheendareactionableundersometheoryoffraudorunfairbusinesspractice.

    Weemphasizeagainthatthiscaseinvolvesessentiallyonlyonelender,Countrywide,operatinginconjunctionwithitscaptiveappraisalagents.WhileCountrywidecitesanumberoffederalcasesthatconcludedtherehadbeenmisjoinder,thesefederalcasesmerelymakethepointthatgenuinelymultipledefendantsdonotfallwithinthefederalpermissivejoinderrule.[17]

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    (4)Wefurtheremphasizethatourconclusionjoinderispermissibleisbasedoncommonalityregardingliability,notdamages.Thereisadirect*253parallelhere(again)toclassactions.Whiletheindividualdamagesamongthese965plaintiffsofcoursevarywidely,thatisnotthesalientpoint.(SeeBrinker,supra,53Cal.4thatp.1022["`Asageneralruleifthedefendant'sliabilitycanbedeterminedbyfactscommontoallmembersoftheclass,aclasswillbecertifiedevenifthemembersmustindividuallyprovetheirdamages.'[Citations.]"].)Thesalientpointisthatliabilityisamenabletomassactiontreatment.

    253

    Finally,wemustobservethattwooverallpoliciesofthelawareservedbyjoinderinthisinstance.Oneisaccesstojustice.Torequiretheseplaintiffstofileseparatelynotonlyclogsupthecourts,butalsodeprivesthemofeconomiesofscaleotherwiseavailableundersection378,particularlyinregardtotheclearlycommonproofbearingonCountrywide'sallegedtwoprongedschemetobothfixpricesandmisleadborrowersastoloanterms.Asfaraswecantell,thesameexpertsandwhistleblowerswillbecommontoallcausesofactionbasedonvariationsofmisrepresentationorunfaircompetition.

    Thesecondistheconservationofjudicialresources.Thereisanobviousburdentothetrialcourtifjoinderisnotallowed.AppendixAshowsthattherearesome800orsopotentialindividualactionsoutthere(assumingthatthe165oftheoriginal965plaintiffswhodidnotjointhisappealnolongercare),waitingtocometroopinginassinglesnipers,notasonereadymade,manageablebattalion.Itwouldnottakemanysuchactionsbeforethetrialcourtwouldbefacedwiththeadministrivialtaskofsettingupagrandcoordinatedaction,whichinallprobabilitybecauseitwillinvolvedifferentplaintiffsanddifferentactionswillbehardertomanagethanthisone,singleaction.(Cf.404[authorizingcoordination]Stats.1992,ch.696,1(b)(1)(C),pp.30023003["TheLegislaturefurtherfindsanddeclaresthat:[]...[]...Scarcejudicialresourcesmustbeusedinanefficientmanner...."].)[18]Putanotherway,massjoinderhereholdsthepromiseof*254actuallydecreasingtrialcourtcasemanagementtime.Unlessweadoptthecynicalviewthatrequiringeachplaintifftoproceedagainstthecorporatedefendantswillmaketheircasesgoaway,wehavetoconsiderthisaspectofthecase.

    254

    B.Management

    Andinregardtoadministrativetasksahead,wemustofferwhatwecaninthewayofguidanceforthetrialcourtonremand.Wesay"wemust"becausewebelievesendingthis3,000pluspagethirdamendedcomplaintcasebacktothetrialcourtwithoutguidancewouldbenothinglessthanoppressive.IfwearegoingtosendMobyDickbacktothetrialcourt,weshouldatleastprovideaharpoonortwo.Countrywide'sargumentthatthesheerheftofthis965plaintiffactionisundulyburdensomedoescarrysomeforce.ButwethinkthelawofCaliforniaprocedurestrikesagoldenmeanhere.Ontheonehand,itisunfairtotheseplaintiffstodeprivethemofthecommonalitiesofproofandwitnessesinherentintheirbasictheoryagainstCountrywide.Asnoted,thesameexpertsandwhistleblowerscanbeanticipatedtoprovideevidenceforalltheseplaintiffs.Ontheotherhand,itisunfairtoCountrywidetosaddleitwiththeamorphous,inchoateheapofallegationsthatcurrentlyconstitutesthethirdamendedcomplaintasdraftedandstructured.Soletusbeplain:Onremandthetrialcourtwillhavethepowertorequireplaintiffs'counseltowhipthethirdamendedcomplaint'sdesultoryandscatteredallegationsagainstCountrywideintoatightlystructuredsetofmanageablesubclaimsandsubclasses.OurdecisiondoesnotrequireittocommencejuryselectionatAnaheimStadium.[19]

    (5)Injustice,saidAristotle,canconsistintreatingunequalsequallyoroftreatingequalsunequally.So,justasthereisaproceduralsolicitudeforconsolidationtoassureaccesstojusticethatfavorsjoinderandclassactions,thereiscorrespondingcontrapuntalrecognitioninprocedurallawthattrialcourtssometimesneedtocategorizeandsubdivideclaimsandclassestotreatthemeffectively.Wefinditinsuchproceduresasthediscretionoftrialcourtstoseverarbitralclaimsfromnonarbitralones(e.g.,Doanv.StateFarmGeneralIns.Co.(2011)195Cal.App.4th1082,10981099[125Cal.Rptr.3d793]),theauthoritytoorderseparatetrialsinordertoavoidprejudice(1048)andimportantforourpurposeheretheabilitytoorganizeclassactionsintoappropriatesubclasses.(SeegenerallyBrinker,supra,53Cal.4th1004[useofsubclassesallowedcourttoascertainvalidityofsomeclaims*255andinvalidityofothers]Aguiarv.CintasCorp.No.2(2006)144Cal.App.4th121,125[50Cal.Rptr.3d135]["Becausethecomplexitiesofthecaseonwhichthetrialcourtreliedtofindclasscertificationinappropriatecanbeaddressedbytheuseofsubclasses...we

    255

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    reversetheorderdenyingcertificationandremandthematterwithdirectionsforthetrialcourttocertifytwosubclassesofCintasemployees...."]CanonU.S.A.,Inc.v.SuperiorCourt(1998)68Cal.App.4th1,5[79Cal.Rptr.2d897][notingobligationoftrialcourttoconsiderpossiblecreationofsubclassesincontextofclasscertification].)

    Thetrialcourthastheauthoritytorequirethevariousclassesandclaimsfoundinthethirdamendedcomplaintbeproperlyanddigestiblyorganized.Thisiseasilya"complex"actionunderrule3.400(c)(5)[claimsinvolvingmasstorts]oftheCaliforniaRulesofCourt.Assuch,judicialadministrationstandardscontemplatethedesignationofonejudgewhowillhavethepowertoidentifyphasesforthelitigationandsettimelimitsonthosephases,andadjudicatelegalandevidentiarysubissuespretrial.[20]

    Asstatedearlier,today'sdecisionisalsowithoutprejudiceastowhetherCAFAapplies.(Cf.Bullardv.BurlingtonNorthernSantaFeRailwayCo.(7thCir.2008)535F.3d759[CAFAremovalupheld]Koralv.BoeingCo.(7thCir.2011)628F.3d945,947[CAFAremovalpremature,butnoting"amassactionisaformofclassaction"]Romov.TevaPharmaceuticalsUSA,Inc.(9thCir.2013)731F.3d918,924[noCAFAremovalofstatecourtcoordinatedproceedingsbecauseofabsenceofproposalforjointtrial].)Likewise,itiswithoutprejudicetoeithersidetobringaclasscertificationmotion.(SeeCal.RulesofCourt,rule3.764(a)(1)[anypartymaymovetocertifyaclass].)

    Finally,becauseweremandthecasebacktothetrialcourt,thereis,asyet,nofinaljudgment,sowearedismissingtheappealfromtheorderdismissingthecauseofactionforfraudulentconcealment.Obviouslyweexpressnoopiniononthemeritsofthatcauseofactionnow.

    *256III.DISPOSITION256

    Thejudgmentdismissingthoseplaintiffswhohavefilednoticesofappealinthisactionisreversed,andthecaseremandedwithdirectionstoconductfurtherproceedingsnotinconsistentwiththisopinion.Becausethisisaninterlocutoryappealwithoutfinaldispositionofthecause,wedonotawardappellatecostsnow.Rather,weauthorizethetrialjudge,attheconclusionofproceedings,toawardtheappellatecostsofthisappealasheorshebelievesservetheinterestsofjustice.

    Thompson,J.,concurred.

    FYBEL,J.,Dissenting.

    Irespectfullydissent.Iwouldaffirmthecorrectdecisionofthetrialcourt.Theresultofthemajority'sdecisiontoreversethetrialcourtwillbeasbreathtakingasitislegallyunsupported.Themajorityisapprovingthejoinderoftheclaimsofsome818plaintiffhomeloanborrowerswiththeclaimsofthefirstnamedplaintiff,JohnP.Wright,intoasinglemassivelawsuit.[1]Thisvastjoinderofborrowers'claimsisunprecedentedunderCaliforniaandfederallaw.

    Joiningtheclaimsofsomanyplaintiffsnotonlyisunprecedented,butalsoisnotjustifiedbytherelevantstandardsandprinciplesgoverningjoinder.CodeofCivilProceduresection378,subdivision(a)(1)(section378(a)(1))permitsjoinderonlyiftworequirementsaresatisfied:(1)theclaimsariseoutofthesametransactionoroccurrenceand(2)thereisacommonlegalorfactualquestion.Plaintiffs'thirdamendedcomplaint(theComplaint)doesnotcomeclosetosatisfyingthestandardsforjoinderundersection378(a)(1).

    Plaintiffs'claimsdidnotariseoutofthesametransactionoroccurrencerather,theyaroseoutofover1,000separateanddistinctloanandloanmodificationtransactionsinvolvingdifferentborrowers,andmanythirdpartyoriginatorsandlenders.Theloantransactionsweremadeatdifferenttimesoverasixyearperiodsomeloanswerepurchasemoneyloans,whileotherloansrefinancedexistingones.EachloantransactionwassecuredbyadifferentparcelofrealpropertyinCaliforniaandinvolvedadifferentappraisal.Theloanshadvarioustermsandwereatdifferentinterestratessomewerefixedrateloans,whileotherswerevariablerateloans.Notalllenderswerethesame.Eachloantransactioninvolveddifferentloanbrokersandagents,whomadedifferentrepresentationstoeachplaintiff.

    *257Themajorityopinionisinerrorforthefollowingfiveprincipalreasons:257

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    1.EachLoanTransactionIsDistinct.Themajorityopinion,ataminimum,oversimplifiestheComplaint'sallegationsinanattempttofindcommonalityamongstthediverseclaimsof818AppealingPlaintiffs.AlthoughtheComplaintallegedDefendantsengagedinaschemetodefraud,eachoftheseborrowersenteredintoadifferentloantransactionsecuredbyadifferentparcelofrealpropertyandsupportedbyadifferentappraisal.Themajorityismistakeninassertingthelenderwasthesameforeachloan,asmanylenderswerethirdpartieswhohavenotbeennamedasdefendants.FormanyoftheAppealingPlaintiffs,theComplaintanditsattachmentsdonotincludebasicinformationabouttheloantransaction.

    2.IssuesofLiabilityAreNotSubjecttoCommonProof.Themajorityopinionassertsthattheissuesofliabilityaresubjecttocommonproofandindividualquestionsofdamagescanbeaddressedthroughtrialcourtmanagement.TheComplaintitselfrevealsthoseassertionstobeincorrect.AsIwillexplainindetail,Plaintiffsdidnotallegethatacommon,uniformsetofmisrepresentationswasmadetoeachofthem.NorhaveAppealingPlaintiffsarguedinanyoftheirbriefsoratoralargumentthatuniformrepresentationsweremade.Thus,torecoveronthecauseofactionforintentionalmisrepresentationorthecauseofactionfornegligentmisrepresentation,eachandeveryplaintiffyes,eachoneofthemwillhavetosubmitevidencetoproveliabilityanddamages.Likewise,eachofthe90plaintiffsassertingwrongfulforeclosuremustindividuallyprovethefactsspecifictohimorherestablishingthatforeclosureprocedureswerenotfollowed.

    Resolvingtheclaimsofall818AppealingPlaintiffsinasinglelawsuit,therefore,definitelywouldnotpromotejudicialeconomyandfairnessasrequiredbylawquitethecontrary,the"megasuit"mandatedbythemajoritypromisestobeanunjustifiedadministrativenightmare.

    3.AnalogousCaseLawIsAgainstJoinder.Forgoodreason,courtswhichhaveaddressedtheissueofjoinderofborrowers'claimsinthesamecircumstancespresentedinthislawsuithaveconsistentlyheldsuchattemptsatjoindertobeimproper.InpartIII.,Idiscuss11opinionsdecidedbytheUnitedStatesCourtsofAppeals,includingtheNinthCircuit,andUnitedStatesDistrictCourts,includingtheCentralDistrictandNorthernDistrictofCalifornia.Allofthemconcludethatplaintiffborrowers,whomadethesameclaimsasAppealingPlaintiffs,weremisjoinedbecauseeachloanwasaseparatetransaction.FederallawonjoinderisthesameasCalifornialawonjoinder.Bothinitsanalysisandconclusion,themajorityopinionisinconflictwithallofthosecases.Instead,themajorityreliesontheprincipleofbroadconstructionandusesthatprincipletostretchsection378(a)(1)pastits*258breakingpoint.TheCaliforniaappellatecaseswhich,themajorityclaims,exemplifytheapplicationoftheprincipleofbroadconstructioninupholdingjoinder,aroseinverydifferentcontextsandhadfardifferentfactsfromthosepresentedinthiscase.Innoneofthosecasesdidjoinderactuallydependonbroadconstructionofsection378(a)(1).

    258

    4.ThisIsNotaClassAction.ThemajorityopinionessentiallyrecaststheComplaintasaclassaction.Letusbeplainupfront:PlaintiffsdidnotfiletheComplaintasaclassactionandtheComplaintincludesnoclassorsubclassallegations.Plaintiffsdidnotaskforclasscertification.Thequestionbeforethetrialcourtwhetherthe965(includingWright)plaintiffsweremisjoinedwasanallornothingproposition.AppealingPlaintiffsneverarguedhereorinthetrialcourtthatthislawsuitshouldbetreatedasaclassactionordividedintosubclassesorsubgroups.Indeed,indirectresponsetoquestionsaboutsubclassesposedatoralargumentbymycolleagues,AppealingPlaintiffs'counselflatlystatedtheonlyissuepresentedwaswhetherPlaintiffs'claimswereproperlyjoined,notwhethersubclassescouldorshouldbecreated.

    Themajorityopinion'streatmentoftheComplaintisreminiscentofthefamousstorytoldbyAbrahamLincoln.Aboywasaskedhowmanylegshiscalfwouldhaveifhecalleditstailaleg.Theboyreplied,"Five."Thecorrectanswer,ofcourse,isfour.Callingacalf'stailaleg"wouldnotmakeitaleg."(Rice,ReminiscencesofAbrahamLincolnbydistinguishedmenofhistime(rev.ed.1909)p.242.)Likewise,treatingalawsuitasaclassactiondoesnotmakeitone.Theissuepresentedtousiswhetherthe818AppealingPlaintiffswereproperlyjoinedundersection378(a)(1),notwhetherorunderwhatcircumstancesAppealingPlaintiffsshouldbetreatedasaclass.

    5.ThisCaseShouldNotBeTreatedasaClassAction.Themajorityadvisesthepartiestousesubclassesa

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    procedurepeculiartoclassactionsanddrawsa"directparallel"withclassactionsbasedonsupposedcommonalityonissuesofliability,withonlydamagestobeindividuallycalculated.(Maj.opn.,ante,atpp.252253.)ThemajoritystatesitsdecisioniswithoutprejudicetowhethertheClassActionFairnessActof2005,28UnitedStatesCodesection1332(d)(CAFA)applies.(Maj.opn.,ante,atp.255.)ThemajorityistellingthetrialcourtandAppealingPlaintiffsthislitigationreallyshouldbetreatedasaclassaction,whichcouldthenbedividedintothesubissuesandsubclassesrevealedbythemajority'sreadingoftheComplaint.Howcantherebesubclasseswithoutaclass?

    WhilecounselforDefendantswillbesurprisedbythemajority'sapproach,noonewillbemoresurprisedthancounselforAppealingPlaintiffs,whohavedisclaimedthepremiseonwhichthemajorityopinionrests.Whenaskedat*259oralargumentaboutthepossibilityofsubclasses,AppealingPlaintiffs'counselstatedtheissuepresentedwaswhetherthetrialcourterredbydenyingjoinder.Themajorityerroneouslycallsthislawsuita"`massaction'"(maj.opn.,ante,atp.241),butthatisatermfoundinCAFA,28UnitedStatesCodesection1332(d)(11)(B),andDefendantschosenottoremovethisactiontofederalcourt.[2]

    259

    Theplaintiffsinanycivillitigation,includingtheonesinthiscase,aredeemedtobethemastersoftheircomplaint(Aryehv.CanonBusinessSolutions,Inc.(2013)55Cal.4th1185,1202[151Cal.Rptr.3d827,292P.3d871])andarenolessthemastersoftheirlitigationstrategy.Oursystemis,afterall,anadversarialone.AppealingPlaintiffsarerepresentedbyablecounselwithyearsofcivillitigationexperiencewhomadethestrategicdecisionstodrafttheComplaintastheydidandtopursuePlaintiffs'claimsinaparticularway.Plaintiffschosenottobringaclassactionandchosenottoseparatethemselvesintosubclassesorsubgroups.ItisnotappropriateforustosecondguessthosedecisionsandgiveunsolicitedadvicepurportingtotellAppealingPlaintiffsthebestwayforthemtodrafttheirowncomplaintandpursuetheirownclaims.

    ItbearsrepeatingthattheonlyissuebeforeusontheappealfromthejudgmentofdismissaliswhetherthestatutoryrequirementsforjoinderaresatisfiedbasedontheallegationsoftheComplaint.Thetrialcourt,afterfullyconsideringtherelevantfactorsandissues,wascorrecttosustain,withoutleavetoamend,Defendants'demurrertotheComplaint.AnyAppealingPlaintiffisfreetofilehisorherownlawsuit,includingarepresentativeactionunderCalifornia'sunfaircompetitionlaw.

    I.

    ALLEGATIONS

    A.

    OverviewoftheComplaint

    TheComplaintis210pagesinlength,and,inaddition,hasa1,772pageappendixandattaches1,259pagesoftitleandloandocuments.AllegationsspecifictoeachplaintiffweremadeinappendixAtotheComplaint.

    TheComplaintassertedfourcausesofaction:(1)intentionalmisrepresentation,(2)negligentmisrepresentation,(3)unfaircompetitioninviolationof*260BusinessandProfessionsCodesection17200etseq.,and(4)wrongfulforeclosure.AllPlaintiffssoughtdamagesforintentionalmisrepresentationandnegligentmisrepresentation.Ofthe965Plaintiffs,90werepartiestothewrongfulforeclosurecauseofaction.

    260

    B.

    TheParties

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    1.Plaintiffs

    All965PlaintiffsareCaliforniaresidents.TheComplaintallegedeachplaintiff"borrowedmoneyfromoneormoreoftheDefendantsoritssubsidiariesoraffiliatesorsuccessorsandassignsbetweenJanuary1,2003,andDecember31,2008,securedbyadeedoftrustonhisorherCaliforniarealestate(s)"and"oneormoreoftheDefendantshaveactedasServicerorsomeothercontrolorcapacityoverprocessingtheloan."

    AppendixAandtheexhibitsshowPlaintiffs'claimsarosefromabout1,100loanandloanmodificationtransactionsoverthesixyearperiodfromJanuary1,2003,throughDecember31,2008.Asto154plaintiffs,appendixAtotheComplaintdidnotidentifybasicinformationsuchasthelender,thelocationofthesecuredrealproperty,theamountoftheloan,orthestatusoftheloan.

    2.Defendants

    Countrywideanditsfounderandchiefexecutiveofficer,AngeloMozilo,wereallegedtohavedevisedthemassivefraudulentschemethatisthesubjectoftheComplaint.CountrywideHomeLoanswasthemortgagebankingsubsidiaryofCountrywide.

    LandSafe,Inc.,wasawhollyownedsubsidiaryofCountrywide.TheComplaintalleged,"Land[S]afeAppraisalsisadivisionofLand[S]afe,whichconductedtheappraisalsofPlaintiffs."

    BofAacquiredCountrywidein2008.CountrywidewasmergedintoBofA,whichabsorbedandtookoverCountrywide'soperationsandemployees.TheComplaintallegedBofAconductedthebusinessformerlyconductedbyCountrywideand"ha[s]continuedtheunlawfulpracticesofCountrywidesinceOctober31,2007,including...writingfraudulentmortgages."

    ReconTrustCompany,N.A.,wasawhollyownedsubsidiaryofBofAandactedastrusteeunderthedeedsoftrustsecuringrealestateloansheldor*261servicedbyBofA.TheComplaintalleged,"BofA...andtheotherBankDefendants...haveregularlyusedReconTrusttoforeclose,astrusteewithpowerofsale,trustdeedsonCaliforniarealty."CTCRealEstateServiceswasallegedtohave"actedalongsideandinconcertwithBofAincarryingouttheconcealmentdescribedherein...."

    261

    C.

    GeneralAllegations

    TheunderlyingtheoryoftheComplaintisDefendantsceasedactingasconventionallendersandinstead"morphedintoanenterpriseengagedinsystematicfrauduponitsborrowers."TheComplaintallegedthatDefendantsengagedin"amassiveandcentrallydirectedfraud"bywhichtheyplacedhomeownersintoloanswhichDefendantsknewtheycouldnotafford(andonwhichthehomeownersinevitablywoulddefault),abandonedindustrystandardunderwritingguidelines,andengagedinamarketfixingschemebyusinginflatedappraisalstoartificiallyraisehomepricesthroughoutCalifornia.

    AccordingtotheComplaint,thereasonwhyDefendantswereabletocarryoutthisschemewasthattheysecuritizedtheloansandsoldtheminbulkto"unsuspecting"thirdpartyinvestorsataheftyprofit.SinceDefendantsintendedtoselltheloans,ratherthanholdthemandearnprofitfromtheinterestgenerated,theyallegedlynolongerhadanincentivetofollow,andintentionallyabandoned,soundunderwritingstandards.Defendantsallegedlyusedintentionallyinflatedappraisalstojustifythesizeoftheloans,andtheartificiallyinflatedrealestatevaluesinturnallowedDefendantstocontinuetogeneratemoreinflatedloansthatcouldbesecuritizedandsoldinbulktoinvestors.

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    NotallloanswereoriginatedbyDefendants,andtheComplaintalleged,withnofactualdetail,thatunnamedthirdpartybanksandlenders"actedatthebehestanddirectionoftheCountrywideDefendants,oragreedtoparticipateknowinglyorunknowinglyinthefraudulentscheme."

    D.

    CausesofActionoftheComplaint

    1.IntentionalMisrepresentation

    Inthefirstcauseofaction,forintentionalmisrepresentation,PlaintiffsallegedDefendants,"throughDefendants'securitiesfilings,speeches,advertisements,publicutterances,websites,brokers,loanconsultants,branches,*262andcommunicationswithclients,andothermedia,"madeaseriesofpartialmisrepresentationscreatingadutyto"speakthewholetruth"andtodisclosematerialfacts.Theseeightpartialmisrepresentationsincluded:

    262

    1.Theborrower'sloanpaymentwouldbeforaspecifiedsum,"wheninrealitysuchpaymentwasonlyavailableforalimitedundisclosedperiodoftimeandwouldthendrasticallyincrease."

    2.Theamountofpaymentsundertheloanwouldbe"constant"andtheborrowerwouldbeabletoaffordthosepayments,wheninrealitytheloanpaymentslaterwouldincreaseandtheborrowerwouldnotbeabletoaffordthosepayments.

    3.Theborrowerqualifiedfortheloan,wheninrealitytheborroweronlyqualifiedbecauseDefendantsfalsifiedincomeandassetdocumentation.

    4.Countrywideloanedmoneyinconformancewithitsunderwritingguidelines,andthatitslendingstandardsweresafe.

    5.Theborrower'sloanpaymentwouldcoverbothprincipalandinterest,wheninrealitythepaymentswouldnotcoverprincipalandwouldnotcovertheminimuminterestontheloanresultingindeferredinterest.

    6.Bymakingtheminimumpaymentonanadjustableratemortgageloan(ARM),theborrowermightdeferinterestwhen,inreality,makingtheminimumpaymentdefinitelywouldresultindeferredinterest.

    7.Paymentschedulescreatedthefalseimpressionthatbymakingtherecommendedpayments,borrowerswouldnotnegativelyamortizetheirloans.

    8.BymakingtheminimumpaymentduringtheinitialinterestrateperiodofanARM,borrowerswouldbepayingbothinterestandprincipal,wheninrealitytheywouldbepayingneither,resultinginnegativeamortization.

    Inadditiontothosepartialmisrepresentations,theComplaintallegedDefendantsmadeaseriesofaffirmativemisrepresentations"throughDefendants'securitiesfilings,speeches,advertisements,publicutterances,websites,brokers,loanconsultants,branches,andcommunicationswithclientsandothermedia."The13affirmativemisrepresentationsincluded:

    1.Theborrowerscouldaffordtheirloans.

    2.Defendants'calculationsconfirmedthattheborrowerscouldaffordtheirloansandcould"shouldertheadditionaldebtresultingfromDefendant[s']loans,inlightofPlaintiffs'otherdebtsandexpenses."

    *2633.Aborrower'squalificationforaloanwasthesameasbeingabletoaffordaloan.263

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    4.BymakingtheminimumpaymentonanARM,theborrowerwouldnotbedeferringinterestandwouldbepayingbothprincipalandinterest.

    5."[T]hevaluearrivedatbyDefendants'appraisalsofPlaintiffs'propertywasindeedthetruevalueofPlaintiffs'property."

    6."[T]hevaluearrivedatbyDefendants'appraisalsofPlaintiffs'propertywassufficienttojustifythesizeoftheloantheywerebeinggiven."

    7.Theactualtermsoftheloans,includingtheinterestrate,whethertheloanwasvariableorfixed,thedurationofanyfixedperiod,andtheinclusionofaprepaymentpenalty.

    8.Defendantsfollowedtheirownunderwritingguidelinesandmadeloansonlytoqualifiedborrowers.

    9.Defendantswerefinanciallysound.

    10."Defendantswereengagedinlendingofthehighestcaliber."

    11.TheloansofferedbyDefendantswere"safeandsecure."

    12.Theborrowerswouldbeabletorefinancetheirloansatalatertime.

    13.Defendantswouldmodifytheborrowers'loans.

    TheComplaintallegedthatinjustifiablerelianceonthesepartialandaffirmativemisrepresentations,Plaintiffsenteredintoloanandmortgagetransactionsintowhichtheyotherwisewouldnothaveentered,andwhichtheycouldnotaffordfromtheoutsetorcouldnotaffordoncethevariableratefeatureorballoonpaymenttookeffect.TheComplaintdidnotallegetheclaimed21misrepresentations,oranycombinationofthem,wereuniformlymadetoall965Plaintiffs.AsshownbyappendixAandtheexhibitstotheComplaint,eachoftheseloanandloanmodificationtransactionswasdistinct.

    2.NegligentMisrepresentation

    Thesecondcauseofaction,fornegligentmisrepresentation,wasbasedonthesamemisrepresentationsthatformedthebasisfortheintentionalmisrepresentationcauseofaction,butallegedthosemisrepresentationsweremadenegligently.

    *2643.UnfairCompetition264

    Thethirdcauseofactionassertedunfaircompetitioninviolationoftheunfaircompetitionlaw,BusinessandProfessionsCodesection17200etseq.TheunfaircompetitioncauseofactionallegedDefendants'allegedmassiveschemeoffraudandDefendants'fraudulentmisrepresentationstoPlaintiffswerefraudulent,unfair,andviolated"numerousfederalandstatestatutesandcommonlawprotectionsenactedforconsumerprotection,privacy,tradedisclosure,andfairtradeandcommerce."

    Intheunfaircompetitioncauseofaction,Plaintiffsallegedtheysufferedfinancialinjuryincluding"lossofequityintheirhouses,costsandexpensesrelatedtoprotectingthemselves,reducedcreditscores,unavailabilityofcredit,increasedcostsofcredit,reducedavailabilityofgoodsandservicestiedtocreditratings,increasedcostsofthoseservices,aswellasfeesandcosts,including...attorneys'feesandcosts."Asaremedyforunfaircompetition,Plaintiffssoughtinjunctivereliefandrestitution.

    4.WrongfulForeclosure

    NinetyplaintiffsassertedafourthcauseofactionforwrongfulforeclosureinviolationofCivilCodesection2924.The

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    Complaintsetforththebasisforthewrongfulforeclosureclaimforeachofthese90plaintiffs.

    II.

    LegalStandardsGoverningJoinder

    CodeofCivilProceduresection378providesthatpartiestoanactionmaybejoinedasplaintiffsiftheirrighttoreliefarisesfromthe"sametransaction,occurrence,orseriesoftransactionsoroccurrences"andthereis"anyquestionoflaworfactcommontoall."(378(a)(1).)[3]"Thus,inordertobejoinedtogetherasplaintiffsinalawsuit,plaintiffsmustsatisfytworequirements:(1)theymustallegethesametransactionoroccurrenceand(2)acommonlegalorfactualquestion."(StateFarmFire&CasualtyCo.v.SuperiorCourt(1996)45Cal.App.4th1093,11121113[53Cal.Rptr.2d229],*265italicsadded(StateFarm),disapprovedonanothergroundinCelTechCommunications,Inc.v.LosAngelesCellularTelephoneCo.(1999)20Cal.4th163,184185[83Cal.Rptr.2d548,973P.2d527].)

    265

    CodeofCivilProceduresection378isbasedonrule20oftheFederalRulesofCivilProcedure(28U.S.C.)(Rule20).(Rodriguezv.BethlehemSteelCorp.(1974)12Cal.3d382,407,fn.28[115Cal.Rptr.765,525P.2d669].)Rule20(a)(1)provides:"(1)Plaintiffs.Personsmayjoininoneactionasplaintiffsif:[](A)theyassertanyrighttoreliefjointly,severally,orinthealternativewithrespecttoorarisingoutofthesametransaction,occurrence,orseriesoftransactionsoroccurrencesand[](B)anyquestionoflaworfactcommontoallplaintiffswillariseintheaction."

    Indeterminingwhatconstitutesa"transaction"or"occurrence"underRule20(a)(1)(A),federalcourtshavelookedtorule13(a)oftheFederalRulesofCivilProcedure(28U.S.C.),whichgovernscompulsorycounterclaims.(Alexanderv.FultonCounty,Georgia(11thCir.2000)207F.3d1303,1323,overruledonanothergroundinMandersv.Lee(11thCir.2003)338F.3d1304,1328,fn.52.)"ForthepurposesofRule13(a),`"[t]ransaction"isawordofflexiblemeaning.Itmaycomprehendaseriesofmanyoccurrences,dependingnotsomuchupontheimmediatenessoftheirconnectionasupontheirlogicalrelationship.'"(Alexanderv.FultonCounty,Georgia,supra,atp.1323,quotingMoorev.N.Y.CottonExchange(1926)270U.S.593,610[70L.Ed.750,46S.Ct.367].)

    TheultimateconsiderationinassessingjoinderofplaintiffsunderRule20iswhethertheclaimsaresologicallyconnectedthatresolvingallissuesinonelawsuitwouldpromotejudicialeconomyandfairness.AsphrasedbytheUnitedStatesCourtofAppealsfortheSecondCircuit:"Indeterminingwhetheraclaim`arisesoutofthetransaction...thatisthesubjectmatteroftheopposingparty'sclaim',thisCircuitgenerallyhastakenabroadview,notrequiring`anabsoluteidentityoffactualbackgrounds...butonlyalogicalrelationshipbetweenthem.'[Citation.]Thisapproachlookstothelogicalrelationshipbetweentheclaimandthecounterclaim[citation]andattemptstodeterminewhetherthe`essentialfactsofthevariousclaimsaresologicallyconnectedthatconsiderationsofjudicialeconomyandfairnessdictatethatalltheissuesberesolvedinonelawsuit.'[Citation.]"(U.S.v.Aquavella(2dCir.1979)615F.2d12,22seeAbrahamv.AmericanHomeMortgageServicing,Inc.(E.D.N.Y.2013)947F.Supp.2d222,228229(Abraham)Petersonv.Regina(S.D.N.Y.2013)935F.Supp.2d628,637.)"[T]hecentralpurposeofRule20istopromotetrialconvenienceandexpeditetheresolutionofdisputes,therebyeliminatingunnecessarylawsuits."(Alexanderv.FultonCounty,Georgia,supra,207F.3datp.1323seeCoughlinv.Rogers(9thCir.1997)130F.3d1348,1351["Rule20isdesignedtopromotejudicialeconomy,andreduceinconvenience,delay,andaddedexpense."].)

    *266III.266

    Plaintiffs'ClaimsDidNotArisefromtheSameTransactionorOccurrenceorSeriesofTransactionsorOccurrences.

    AppealingPlaintiffsassertthatalloftheirclaimsforreliefarisefromthesametransactionoroccurrenceorseriesoftransactionsoroccurrencesbecause"thegravamen"oftheirlawsuitis"thefraudulentschemecommontoallPlaintiffs"

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    and"theharmsallegedbyPlaintiffshereinwerethecommonresultofDefendants[']practicesandpolicies."(Boldfaceomitted.)Ademurreristreatedasadmittingallmaterialfactsproperlypleaded(Moev.Anderson(2012)207Cal.App.4th826,830831[143Cal.Rptr.3d841](Moe)and,therefore,thefactsallegedofamassiveandsystematicfraudperpetratedbyDefendantsaredeemedtrue.

    But,onitsface,theComplaint,alongwiththeappendixandexhibits,showsPlaintiffs'claimsarosefromover1,000separateanddistinctloanandloanmodificationtransactions.Theappendixandtheexhibitsdisclosethetransactionsinvolveddifferentborrowers,anumberofthirdpartyoriginatorsandlenders,andmanydifferentloanbrokersandofficersindifferentlocations.

    Theloantransactionsweremadeatdifferenttimesoverasixyearperiodstretchingfrom2003,atimeofprosperity,through2008,atthepeakofthefinancialcrisis.Someloanswerepurchasemoneyloans,whileotherloansrefinancedexistingones.EachloantransactionwassecuredbyadifferentparcelofrealpropertyinCaliforniaandinvolvedadifferentappraisal.Theloanshadvarioustermsandweremadeatdifferentinterestratessomewerefixedrateloanswhileotherswerevariablerateloans.AsDefendantspointout,asto154plaintiffs,theComplaintdidnotidentifythelender,thelocationofthesecuredproperty,theloanamount,thetypeofloan,orthestatusoftheloan.

    Contrarytothemajority'sassertion,notallAppealingPlaintiffshadthesamelender.Manyhadthirdpartylenders,withnamessuchasMillenniumMortgageCorp.,BrooksAmericaMortgageCorporation,GlobalLending,Maverick,HilsboroughCorporation,PacificPanMortgage,J&RLending,Inc.,andDynamicMortgageFinancialCorporation.

    Theclaimsofeachplaintiffaroseoutofdiscretefactsandcircumstancesrelatedtothatplaintiff'sparticularloantransaction.Suchclaimsarenotconnectedtoeachotherandnotsusceptibletocommonproof.

    *267Plaintiffshaveallegedthreecausesofactionwhichseekdamages:intentionalmisrepresentation,negligentmisrepresentation,andwrongfulforeclosure.[4]Significantly,AppealingPlaintiffsdidnotallege,nordotheyargue,thatDefendantsuniformlymadethesamemisrepresentationstoeachplaintiffbythesameperson,oreventhroughthesamemedium.Instead,PlaintiffsbroadlyallegedDefendantsmademisrepresentationsthroughtheir"securitiesfilings,speeches,advertisements,publicutterances,websites,brokers,loanconsultants,branches,andcommunicationswithclients,andothermedia."

    267

    Whichmisrepresentations,ifany,weremadetoaparticularplaintiff,bywhom,andthroughwhichmedium,wouldhavetobeprovenindividually.Toestablishliabilityforintentionalmisrepresentationandnegligentmisrepresentation,eachofthemorethan818AppealingPlaintiffswouldhavetoprovethespecificrepresentationsmadetohimorher,provetherepresentationwasfalse,andproverelianceonthatrepresentation."[I]solating"(maj.opn.,ante,atp.246)thevariousrepresentationsintothematicsubgroupsordiscrete,manageablecategories,asthemajoritydirectsPlaintiffstodo,wouldnotsolvetheproofproblem.

    Forthosereasons,themajorityis,Ibelieve,mistakeninconcludingthisisacaseinwhichissuesofliabilityaresubjecttocommonproof,leavingonlydamagestobeindividuallyprovenandcalculated.EvenweretheallegationsthatDefendantsperpetratedamassiveandsystematicfraudproven,inordertorecoverdamages,eachPlaintiffwouldstillhavetoprovetheessentialfactsofhisorherowncase.Thatproofwouldneedtoincludeheorshereliedonfraudulentornegligentmisrepresentationstohisorherdetriment,theloanwasunsuitedtohimorher,thevalueofhisorherhomewasinflatedduetoDefendants'actionsandnotsomeothercause,theappraisalusedwasinfactinflated,andheorshesuffereddamagesfromtheinflatedvalue.Eachofthe90plaintiffsallegingwrongfulforeclosurewouldhavetoproveindividuallyhowandwhytheforeclosureofhisorherdeedoftrustwaswrongful.

    Federalcourtshaveaddressedjoinderoftheclaimsofmassivenumbersofplaintiffborrowersunderthesameorsimilarcircumstancesandtheoriesofrecovery.Thosecourtsconsistentlyhaveconcludedthatgroupsofplaintiffswhowerepursuingclaimsbasedonindividualmortgagetransactionsweremisjoined.InVisendiv.BankofAmerica,N.A.(9thCir.2013)733F.3d863,866(Visendi),theUnitedStatesCourtofAppealsfortheNinthCircuitaddressedwhether137plaintiffs,whohadsued25financialinstitutions,weremisjoined.Theplaintiffsallegedthedefendants'deceptivemortgagelendingandsecuritizationpracticesdiminishedthevalueoftheirhomes,impairedtheircreditscores,and

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    compromisedtheirprivacy.(Ibid.)Theplaintiffs*268assertedeightcausesofaction,includingrescission,fraud,andnegligentmisrepresentation.(Ibid.)TheNinthCircuitconcludedtheallegationslackedthefactualsimilarityrequiredforjoinderunderRule20(a)(1)(A):"Thiscaseinvolvesover100distinctloantransactionswithmanydifferentlenders.Theseloansweresecuredbyseparatepropertiesscatteredacrossthecountry,andsomeoftheproperties,butnotall,weresoldinforeclosure.WhilePlaintiffsallegeinconclusoryfashionthatDefendants'misconductwas`regularandsystematic,'theirinteractionswithDefendantswerenotuniform.Factualdisparitiesofthemagnitudeallegedaretoogreattosupportpermissivejoinder."(Visendi,supra,atp.870.)

    268

    InBarberv.America'sWholesaleLender(M.D.Fla.2013)289F.R.D.364,365(Barber),thecomplaintassertedclaimsbyatleast18differentborrowersagainstatleastninedifferentlendersarisingoutof15separatemortgagesenteredintowith10differentlenders.Theplaintiffsallegedtheymistakenlybelievedtheywereenteringintoa"traditionalborrower/lenderrelationshipwithDefendants"wheninfacttheloanswere"`conduit'loans"thatweretobepooledintomortgagebackedinvestmentvehicles.(Id.atp.366.)Theplaintiffsalsoallegedtheysufferedharmwhentheirloansweresoldtothirdpartyinvestorsaspartofthesecuritizationprocess.(Ibid.)Thedistrictcourtconcludedtheplaintiffsweremisjoined,eventhoughtheirclaimsraisedsimilarlegalissues,because"eachindividualloanmadebyaDefendanttoaPlaintiffwasaseparate`transaction'or`occurrence.'"(Id.atp.367.)

    InAbraham,supra,947F.Supp.2datpage226,theplaintiffswereseveralhundredcurrentandformerhomeownerswhosuedseveraldozenmortgageoriginatorsandservicers.Theplaintiffsallegedthedefendantsinducedthemtoenterintomortgagesbasedoninflatedappraisalsfailedtocomplywithunderwritingguidelinespurposefullyavoidedlocalrecordationstatutesbundled,packaged,andsoldtheirmortgagestoinvestors"whilesimultaneouslybettingagainstthosemortgages"andfailedtousefederalfundstohelptheplaintiffsasrequiredbylaw.(Id.atpp.226,227.)Asaresult,theplaintiffsclaimed,theylostequityintheirhomes,suffereddamagestotheircreditratings,andincurredunnecessarycostsandexpenses.(Ibid.)Theplaintiffsassertedvarioustortcausesofaction,includingfraud,deceit,fraudulentconcealment,andintentionalandnegligentmisrepresentation.(Id.atp.226.)

    Thedistrictcourtgrantedthedefendants'motiontodismissbasedonmisjoinderunderRule20.(Abraham,supra,947F.Supp.2datpp.226,228230.)Thecourtconcludedthe"`"essentialfactsofthevariousclaims"'"werenot"`"logicallyconnected"'"because"`[t]hefactssurroundingeachloantransactionareseparateanddistinct.'"(Id.atpp.228229.)Citingaseriesofotherdistrictcourtdecisions,theAbraham*269courtconcluded,"[i]tiswellestablishedthatseparateloantransactionsbydifferentlendersdonotconstituteasingletransactionoroccurrenceandclaimsbyplaintiffswhoengagedinthoseseparatetransactionsgenerallycannotbejoinedinasingleaction."(Id.atp.229.)"Here,"thecourtstated,"severalhundredPlaintiffshaveassertedclaimsagainstseveraldozenmortgageoriginatorsandservice[r]sregardingdifferentmortgagesissuedindifferentstatesoveranineyearperiod.[Citation.]...Plaintiffs'separatemortgagetransactionsdonotconstituteasingletransactionoroccurrenceunderRule20...."(Ibid.)Thecourtalsoconcludedtheplaintiffs'allegationsthedefendantswereinvolvedinacommonschemewereunsupportedandspeculative,andinsufficienttoestablisharelatedseriesoftransactionsoroccurrencessoastopermitjoinder.(Id.atpp.229230,233234.)

    269

    OnpointisPadronv.OneWestBank(C.D.Cal.,Apr.7,2014,No.2:14cv01340ODW(Ex))2014U.S.Dist.Lexis47947,page*7(Padron),a"massaction"whichhadbeenremovedunderCAFAtofederalcourt.InPadron,thefederaldistrictcourtaddressedtheissueofjoinderofplaintiffsinalawsuitallegingatheoryofasystematicschemetodefraudcarriedoutbythedefendantsthatissimilar,ifnotidentical,tothatallegedinthiscase.InPadron,121plaintiffs,whojoinedinaCAFAmassaction,alleged,asPlaintiffsdointhiscase,thatthedefendants,whichincludedthelender,mortgageservicers,theFederalDepositInsuranceCorporation,andarealestateappraiser,"`hadceasedactingasconventionalmoneylendersandinsteadmorphedintoanenterpriseengagedinsystematicfrauduponitsborrowers.'"(Padron,supra,2014U.S.Dist.Lexis47947atpp.*5*6.)Theplaintiffsallegedthedefendantsplacedthemintoloansthedefendantsknewtheplaintiffscouldnotafford,abandonedindustrystandardunderwritingguidelines,concealedormisrepresentedtheloantermstoinduceconsent,andintentionallyinflatedappraisalvaluesthroughacompliantappraisalcompany"`knowingthattheirschemewouldcausetheprecipitousdeclineinvaluesofallhomesthroughoutCalifornia.'"(Id.atp.*6.)Attachedtotheplaintiffs'complaintwasa264pageappendixprovidingafactualsummaryforeachplaintiff.(Id.atpp.*6*7.)

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    ThedistrictcourtdismissedalltheplaintiffsexceptforthefirstoneonthegroundtheyhadnotsatisfiedthejoinderrequirementsofRule20(a).(Padron,supra,2014U.S.Dist.Lexis47947atpp.*5,*8*9.)Thecourtfoundtheactiontobe"virtuallyidenticaltoVisendi"inthattheplaintiffsallegedthedefendantshadacommonscheme,conspiracy,orpolicytointentionallyplacethemintodangerousloans,misrepresentthemortgageterms,artificiallyinflateappraisalprices,andengageinshamloanmodifications.(Id.atpp.*12*13.)Thecourtagreedwiththedefendantsthat"`theevocationofthevaguestrategy,scheme,or"conspiracy"cannottranscendtherealitythateachPlaintiff'stransactionisdiscrete,unique,andbasedonPlaintiffspecific*270factsandcircumstances.'"(Id.atp.*13.)Thecourtfoundnocommonissuesoflaworfact,stating,"itappearstheonlyglueholdingPlaintiffs'disparateclaimstogetheristhefactthateachinvolvesamortgage,andtheCourtwillthereforehavetoaddresslegalquestionsrelatedtoeachmortgage."(Id.atp.*14.)

    270

    Visendi,Barber,Abraham,andPadronsupporttheconclusionthateachofthemortgagetransactionsthatarethesubjectoftheComplaintisaseparate,distincttransaction.ThedistrictcourtinPadronaddressedthematterofjoinderinacomplaintthatappearstobeavirtualcopyoftheonepleadedinthiscase.Granted,thosefederalcasesarenotcontrollingandcanbedistinguishedinsomerespects.Anydistinctionsdonotdetract,however,fromthecentralpointofdirectanalogy:Hundredsofmortgagetransactions,ofdifferenttypes,madebyhundredsofborrowers,withvariousoriginatorsandlenders,withdifferinginterestratesandterms,madeoverasixyearperiodstretchingfromtimesofeconomicprosperitytonearcollapseofthefinancialsystem,constituteseparateanddistincttransactionsthatdonotariseoutofthesametransactionoroccurrenceorseriesoftransactionsoroccurrences.

    Visendi,Barber,Abraham,andPadronarebutthetipoftheiceberg.Manyotherfederaldecisionsfromacrossthenationhavereachedtheconclusionthatsimilarclaimsmadebyhomeloanborrowersarenotsusceptibletojoinder,forexample:

    D'Angelisv.BankofAmerica,N.A.(E.D.N.Y.,Jan.16,2014,No.13CV5472(JS)(AKT))2014U.S.Dist.Lexis6087,page*7.("Here,Plaintiffs'claimsdonotariseoutofthesametransactionoroccurrence.Thiscaseinvolveseightdifferentlendersandover100discreteloanssecuredatdifferenttimesforseparatepropertiesacrosstwentyeightdifferentstates.")

    Martinv.BankofAmerica,N.A.(E.D.N.Y.,Mar.12,2014,No.13Civ.02350(ILG)(SMG))2014U.S.Dist.Lexis32231,pages*4,*10*13,*15*16.(Districtcourtgrantsmotiontoseverclaimsbroughtby119plaintiffborrowers.)

    Garnerv.BankofAmericaCorp.(D.Nev.,May13,2014,No.2:12CV02076PMPGWF)2014U.S.Dist.Lexis66203,page*10.("WhilePlaintiffshereallegeinsomedetailanoverarchingconspiracyandcoordinatedconduct,whichtheVisendiplaintiffsapparentlydidnotallegeorallegedonlyinconclusoryfashion,Plaintiffs'claimsneverthelesswillentailindividualizedinquiry,suchaswhatrepresentationsweremadetothembytheirrespectiveloanofficersandwhethereachPlaintiffjustifiablyreliedonthoseallegedmisrepresentations.")

    *271Kaliev.BankofAmericaCorp.(S.D.N.Y.2013)297F.R.D.552,555,557.(Districtcourtgrantedmotiontoseverclaimsbroughtby16plaintiffsbecauseeachofthem"enteredintoadifferentloantransactionatadifferenttime...relate[d]toadistinctproperty.")

    271

    Gonzalezv.BankofAmerica,N.A.(N.D.Cal.,Aug.24,2012,No.121007SC)2012U.S.Dist.Lexis120702,pages*4*5.(Thirtyplaintiffsimproperlyjoinedbecausetheirclaimsaroseoutofatleast26loantransactions.)

    Richardsv.DeutscheBankNationalTrustCo.(C.D.Cal.,Aug.15,2012,No.CV124786DSF(RZx))2012U.S.Dist.Lexis115302,page*2.("ThetestforpermissivejoinderisnotmetinthiscaseaseachPlaintiff'sclaiminvolvesadifferentloantransactionandforeclosure.Plaintiffs'whollyunsupportedandspeculativeallegationthatthevariousDefendantsconspiredtodefraudeachindividualPlaintiff...doesnotsatisfytherequirementthatPlaintiffs'claimsariseoutofthesametransaction,occurrence,orseriesofoccurrences,nordoesitobviatetheneedforseparateproofastoeachindividualclaim."(citation

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    omitted))

    Martinezv.EncoreCreditCorp.(C.D.Cal.,Sept.30,2009,No.CV095490AHM(AGRx))2009U.S.Dist.Lexis96662,pages*5*6.(Improperjoinderof19plaintiffswithclaimsarisingoutofdistinctfactsinvolvingmortgageson15separateproperties.)

    TheComplaintinthiscaseisnotdistinguishableinanymeaningfulwayfromthecomplaintsfoundbythesefederalcourtstobebasedonmisjoinderofplaintiffs,exceptinonerespectsize.TheComplaintinthiscase,with965plaintiffs,818ofwhomhaveappealed,dwarfseventhelargestofthefederallawsuits.

    IV.

    "BroadConstruction"ofCodeofCivilProcedureSection378DoesNotJustifyJoinderof818AppealingPlaintiffs.

    Inconcludingjoinderisproper,themajorityemphasizesthatCodeofCivilProceduresection378mustbebroadlyorliberallyconstrued.Whilethatisanundisputedproposition(StateFarm,supra,45Cal.App.4thatp.1113seeKraftv.Smith(1944)24Cal.2d124,129[148P.2d23]["`statutesrelatingtojoindershouldbeliberallyconstrued...'"]),broadconstructionisnotasubstituteforrigorousapplicationofthestatutorystandardstotheComplaint.Section378cannotbeconstruedbroadlyorliberallyenoughtojustifyjoinderoftheclaimsofthe818AppealingPlaintiffsinthiscase.Asapanelofthis*272courthassaid,albeitinadifferentcontext,"liberalconstructioncanonlygosofar."(Soriav.Soria(2010)185Cal.App.4th780,789[111Cal.Rptr.3d91].)

    272

    Accordingtothemajority,broadconstructionofCodeofCivilProceduresection378isexemplifiedbyfourCaliforniaappellatecourtopinionsupholdingjoinder.Iwillanalyzeeachofthemandexplainwhynoneofthosecasessupportsthemajority'sconclusion.InAnayav.SuperiorCourt(1984)160Cal.App.3d228,231[206Cal.Rptr.520](Anaya),some218employeesandtheirfamilymembersjoined,inasinglelawsuit,theirclaimstheysufferedinjuriesfromexposuretohazardouschemicalswhileworkingforthedefendantsoveraperiodof20to30years.TheCourtofAppealheldtheplaintiffswereproperlyjoined,stating:"Theemployeesaresaidtohavebeenexposedtoharmfulchemicalsatonelocationoveraperiodofmanyyearsbyinhalation,drinkingofwater,andphysicalcontact.Thus,theywereallinvolvedinthesameseriesoftransactionsoroccurrencesandassertrightstorelieftherefrom.Thefactthateachemployeewasnotexposedoneveryoccasionanyotheremployeewasexposeddoesnotdestroythecommunityofinterestlinkingthesepetitioners."(Id.atp.233.)

    ThemajorityfindsAnayainstructivebecauseinthatcaseissuesofliabilitywerecommonwhilethedifferencesbetweeneachplaintiff'sclaimwerelimitedtoindividualdamages.InAnaya,supra,160Cal.App.3datpage233,theemployeessufferedinjurybyexposuretothesameharmfulchemicalsatthesamelocationwhileworkingforthesameemployer.Inmarkedcontrast,inthiscase,theissuesofliabilityarenotcommon.AsIhaveexplained,evenifPlaintiffsprovedtheirallegationsDefendantsengagedinamassandsystematicfraud,eachofthehundredsofPlaintiffsnonethelesswouldhavetoproveliabilityastohimorher.Plaintiffs,whoarerelatedonlybythefacttheyliveinCalifornia,enteredintohundredsofdifferentloantransactions,eachsecuredbydifferentrealproperty,throughavarietyofbrokersandagents,whomadedifferingsetsofrepresentations,andtheloanswerefundedbymanylenders.Puttingasidethedifficultiesincomparingatoxictortactionwithabreachofcontract/securedrealproperty/businesstortaction,theanalogybetweenAnayaandthiscaseisinapt.

    ThemajorityalsopositsthatAnayasupportsjoinderinthiscasebecausetheAnayacourtemphasizedthatCodeofCivilProceduresection378permitsjoinderwhen"`anyquestionoflaworfactcommontoall'plaintiffswillarise."(Anaya,supra,160Cal.App.3datp.233.)Suchaninterpretationofsection378relatestothesecondrequirementofsection378(a)(1)andignoresthefirst.Ifjoindercouldbeaccomplishedwheneveranysinglecommonquestionoflaworfactarises,thenthescopeofsection378wouldbeboundlessanduntetheredtoarequirementofsection378(a)(1)thattheright*273needstobe"inrespectof"or"arisingoutofthesametransaction,occurrence,orseriesoftransactionsor273

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    occurrences."

    Asanotherexampleofbroadconstruction,themajorityoffersMoe,supra,207Cal.App.4thatpages827828,inwhichtwopatientsallegedtheywerevictimsofseparatesexualassaultscommittedbyaphysician.Thepatientsandtheirhusbandssuedthephysicianandhistwoemployersformedicalmalpractice,battery,andvariousothertorts.(Id.atp.828.)Thetrialcourtsustainedademurrerwithoutleavetoamendbasedonmisjoinderofplaintiffs,andtheCourtofAppealaffirmedastothephysician.(Ibid.)TheMoecourtconcludedtheeventsallegeddidnotconstituteasingletransactionbecausetwosetsofplaintiffsweresuingfor"separateanddistinctsexualassaultsduringseparateanddistincttimeperiods."(Id.atp.833.)"[T]hegravamenofplaintiffs'claimsagainst[thephysician]istheharmfulsexualtouchingthatwasperpetratedagainsteachvictimonseparateoccasions."(Id.atp.834.)Butastothedefendantemployers,thecourtheldtheplaintiffswereproperlyjoinedbecausetheclaimsagainsttheemployersarosefromthesamerelatedseriesoftransactionsthenegligenthiringandsupervisionofthephysician.(Id.atp.835.)

    Moeisapt,themajoritysays,because,here,asinthatcase,"thereismuchinthewayofcommonevidenceandtheoriesofliability...."(Maj.opn.,ante,atp.251.)ButMoebearsnosimilarityfactuallyorlegallytothiscaseandprovidesnoassistanceinidentifyingwhatthatcommonevidenceorthosecommontheoriesmightbe.

    Particularlyinstructive,accordingtothemajority,areStateFarm,supra,45Cal.App.4th1093,andAdamsv.Albany(1954)124Cal.App.2d639[269P.2d142](Adams).InStateFarm,supra,45Cal.App.4thatpages10981099,theCourtofAppealheldtheclaimsof165plaintiffsagainsttheirinsurerswereproperlyjoinedinasingleaction.Theplaintiffsallegedtheinsurershadengagedinasystematicpracticetodeceivetheirinsuredsregardingthepurchaseofearthquakeinsurance.(Id.atp.1113.)Theplaintiffsallegedtheinsurers,withoutadequatenoticeofareductioninthescopeofcoverage,issuedpoliciesofearthquakecoveragetoreplaceendorsementstocoveragewithoutachangeinpremium.(Ibid.)Inaddition,thecomplaintallegedsystematicclaimshandlingpractices.(Ibid.)TheCourtofAppealconcludedthoseallegationsestablished,atleastatthepleadingstage,properjoinderoftheplaintiffsunderCodeofCivilProceduresection378.(StateFarm,supra,atp.1114.)

    InStateFarm,supra,45Cal.App.4thatpage1113,eachplaintiffpurchasedthesamehomeownersinsurancepolicywithidenticalearthquakecoveragefromthesameinsurer,andwereallegedlydefraudedinpreciselythe*274sameway.Thatisnotthecasehere.ThemajoritynotesthattheplaintiffsinStateFarmallegedtheysuffered15differenttypesofimproperclaimshandlingprocesses,and"[i]fthejoinderofawidevarietyofclaimshandlingpracticeswasappropriateunderStateFarm,thejoinderofvariousformsofloanimproprietyhereseemsequallycorrect."(Maj.opn.,ante,atp.251.)

    274

    TheStateFarmcourtconcludedjoinderwasproper,however,bothbecausetheplaintiffsallegedtheinsurersengagedinsystematicclaimshandlingpracticesandbecausetheyissuedpoliciesreducingthescopeofcoveragewithoutadequatenotice.(StateFarm,supra,45Cal.App.4thatp.1113.)Theallegationsofthelatterpractice,thecourtstated,"clearlyreflectaclaimcontainingcommonfactscentraltotheallegeddeception."(Ibid.)Asfortheformerpractice,thecomplaintallegedthedefendantsengagedin15differentclaimshandlingpracticesastoalltheplaintiffs.(Id.atpp.10991100.)TheCourtofAppealnotedthat"[w]hilenoteveryplaintiffmayhavebeenvictimizedbythesameclaimshandlingpractice,thatisamatterwhichcanberesolvedindiscovery...."(Id.atp.1113.)Inotherwords,thecomplaintitselfallegedclaimshandlingpracticescommontoalltheplaintiffs.SincetheCourtofAppealwasaddressingthetrialcourt'sorderoverrulingademurrer,theallegationsofthecomplainthadtobeacceptedastrue,withtheprovisothattheclaimscouldbesortedoutindiscovery.Here,thedifferencesbetweentheclaimsofeachoftheAppealingPlaintiffsareapparentfromthefaceoftheComplaintanditsattachments,andPlaintiffshaveneitherallegednorarguedasystemicsetofmisrepresentationsmadeuniformlytoeachofthem.

    InAdams,supra,124Cal.App.2datpage640,eachplaintiffenteredintothesamecontractwiththesamedeveloper,whoallegedlyoverchargedthemandfailedtobuildtheirhomesinconformitywiththesamerequiredplansandspecifications.Allthehomeswerepartofthesamesubdivision,eachofthetransactionswas"exactlysimilarinkindandmannerofoperation,"andthesamemisrepresentationsweremadetoeachoftheplaintiffs.(Id.atp.647.)Theagreementsandinstrumentsinvolveddifferedonly"forincidentalvariationsindetails."(Ibid.)ThefactsofAdamsarenot

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    evenremotelysimilartotheallegationsoftheComplaintinthiscase.

    NoneofthesecasesAnaya,Moe,StateFarm,orAdamssupportsjoinderofthe818AppealingPlaintiffsintoasinglelawsuitunderabroadconstructionofCodeofCivilProceduresection378.InnoneofthesecaseswasbroadconstructionthedrivingforcebehindtheCourtofAppeal'sdecisiontoupholdjoinder.Ineachcase,theCourtofAppeal,thoughnotingtheprincipleofbroadconstruction,appliedthestandardsofsection378oritsstatutorypredecessortothefactsathandtoreachaconclusion.

    *275Themajorityarguesthiscaseismerelya"quantitatively"largerversionofAnaya,Moe,StateFarm,andAdams.(Maj.opn.,ante,atp.252.)But,asIhaveexplained,thefactsandallegationsofthosecasesarenotqualitativelysimilarintheremotestwaytotheallegationsoftheComplaint.Itmakesfarmoresensetoturnforguidancetoauthoritythatisqualitativelysimilartothislawsuit.Wehavesuchauthorityinabundance:Visendi,Barber,Abraham,Padron,andthehostofotherfederalcasesdealingwiththeveryissuespresentedbythisappeal.ThatauthoritysquarelydemonstratesthetrialcourtdidnoterrbyconcludingAppealingPlaintiffsweremisjoined.ThemajorityattemptstodistinguishVisendi,Barber,andAbrahaminafootnotebydescribingthemas"merelymak[ing]thepointthatgenuinelymultipledefendantsdonotfallwithinthefederalpermissivejoinderrule."(Maj.opn,ante,atp.252&fn.17.)Themajority'scharacterizationofthosecasesisinaccurateandundulydismissive.Indeed,asshown,thefederalpermissivejoinderruleisthesameasCalifornia's.

    275

    V.

    ProvidingLitigationStrategytoAppealingPlaintiffsIsNeitherAppropriatenorWarranted.

    Themajorityoffersadvicefordealingwithalawsuitofthe818AppealingPlaintiffs.ThemajorityadvisesAppealingPlaintiffs'counseltogobackandredraftthe"desultoryandscattered"allegationsoftheComplaintintosomethingbrieferandtoincludesubclassestomakethecasemoremanageable.(Maj.opn.,ante,atp.254.)TheComplaintdoesnotsufferfromlackoforganization,certainty,thoroughness,orclarity.TheComplaintisindeedlengthy,particularlywiththeattachments,butthelengthisdirectlyattributabletotheenormousnumberofplaintiffsjoined,thecausesofactionsasserted,andthenatureofthefraudulentschemealleged.

    Moreimportantly,AppealingPlaintiffsdidnotaskforouradviceindraftingtheComplaint,anditisnotourstogive.AppealingPlaintiffsarethemastersoftheComplaint,andwemustaccepttheComplaint'sallegations"atfacevalue"(Aryehv.CanonBusinessSolutions,Inc.,supra,55Cal.4thatp.1202),includingitsorganization,length,andtheoriesandmodesofrecoveryasserted.BasedontheComplaint,aspresentedtous,wemustdecideonlywhetherjoinderwasproper.

    Themajorityasserts,"theabilitytoorganizeclassactionsintoappropriatesubclasses"is"importantforourpurposehere."(Maj.opn.,ante,atp.254.)Subclassesareanimportanttoolformakingclassactionsmoreefficient(Vasquezv.SuperiorCourt(1971)4Cal.3d800,821[94Cal.Rptr.796,484P.2d964])but,asIemphasizedattheoutset,thisisnotaclassaction.*276Plaintiffschosenottobringaclassaction.Atoralargument,AppealingPlaintiffs'counselconfirmedthiswasnotaclassactionandthecreationofsubclasseswasnotanissueonappeal.Themajority'sspeculationastowhatPlaintiffsshouldhaveallegedis,inmyview,inappropriateandisanilladvisedadvisoryopinion.Themajority'ssuggestionthatAppealingPlaintiffsandthetrialcourtcomeupwithsubclassesservestoemphasizemypoint:Plaintiffsweremisjoinedinthefirstplace.

    276

    Themajoritycallsthiscaseamassactionratherthanaclassaction,andsaysitsdecisioniswithoutprejudiceastowhetherCAFAapplies.(Maj.opn,ante,atp.255.)AsIsaidatthebeginning,theterm"massaction"isfoundinCAFA,andmassactionsarenotrecognizedintheCodeofCivilProcedure.Amassactionisbydefinitionaclassactionmaderemovabletofederalcourt.(28U.S.C.1332(d)(11).)IfPlaintiffs'lawsuitisamassactionunderCAFA,thenDefendants,who,likePlaintiffs,arerepresentedbyskilledandexperiencedcounsel,havechosen,forwhateverreason,notto

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    removeit.Inanyevent,Plaintiffs'lawsuitmightnotbeamassactionbecausetheComplaintallegesthatalloftheclaimsintheactionarosefrom"aneventoroccurrence"withintheStateofCaliforniaandthatPlaintiffssufferedtheirinjuriesinthisstate.(28U.S.C.1332(d)(11)(B)(ii)(I).)

    Finally,themajorityseekstoofferthetrialcourthelpinmanagingthislitigationbehemothbyremindingthecourtofitsinherentpowertocontroltheorderofissuestobetried,tosuperviseandcontrollitigation,andtoconservejudicialresources.(Maj.opn.,ante,atpp.254255&fn.20.)Iamsurethetrialjudge,whoisanexcellentandrespectedjurist,waswellawareofthosepowersandtheneedtoconservejudicialresources,andconsideredthemwhensustainingthedemurrerformisjoinder.Inanyevent,theclaimshavebeenmisjoinedundersection378(a)(1)forallthereasonsIhavediscussedandthemajorityopinionisinconflictwithmanyopinionsfacingtheidenticalissues.

    AffirmingthejudgmentofdismissalwouldnotleavePlaintiffswithoutrecourseorrecompense.EachPlaintiffcanpursuehisorherownlawsuitforfraud,negligentmisrepresentation,and,asthecasemaybe,wrongfulforeclosure.Inaddition,theComplaintallegesacauseofactionforunfaircompetitioninviolationofCalifornia'sunfaircompetitionlaw,BusinessandProfessionsCodesection17200etseq.,basedontheallegationsthatDefendantsengagedinamassiveconspiracyandfraudulentschemetoplaceborrowersintoloansforwhichtheywereunsuited,tosecuritizeandsellthoseloansonthesecondarymarket,andtoartificiallyinflaterealestatepricesinCalifornia.BusinessandProfessionsCodesection17203permitsrecoveryof*277restitutionwithoutindividualizedproofofdeception,reliance,andinjury.(Peopleexrel.Harrisv.Sarpas(2014)225Cal.App.4th1539,1548[172Cal.Rptr.3d25].)

    277

    [1]AllundesignatedstatutoryreferencesinthisopinionaretotheCodeofCivilProcedure.

    [2]Hereisthecompletetextofsection378:

    "(a)Allpersonsmayjoininoneactionasplaintiffsif:

    "(1)Theyassertanyrighttoreliefjointly,severally,orinthealternative,inrespectoforarisingoutofthesametransaction,occurrence,orseriesoftransactionsoroccurrencesandifanyquestionoflaworfactcommontoallthesepersonswillariseintheactionor

    "(2)Theyhaveaclaim,right,orinterestadversetothedefendantinthepropertyorcontroversywhichisthesubjectoftheaction.

    "(b)Itisnotnecessarythateachplaintiffbeinterestedastoeverycauseofactionorastoallreliefprayedfor.Judgmentmaybegivenforoneormoreoftheplaintiffsaccordingtotheirrespectiverighttorelief."

    [3]TheexceptionisexhibitQ,which,forsomereason,wasleftblankforfutureuse.

    [4]BankofAmerica,N.A.,CountrywideFinancialCorporationandCountrywideHomeLoans(Countrywide),ReconTrustCompany,N.A.,CTCRealEstateServicesandLandsafe,Inc.(Landsafe).

    [5]BankofAmericatookoverCountrywideatthebeginningoftheGreatRecession.(SeegenerallyNote,Banktown:AssessingBlamefortheNearCollapseofCharlotte'sBiggestBanks(2011)15N.C.BankingInst.423.)Theacquisitionhasbeenaheadacheeversince.(Seeid.atp.453["TheCountrywideFinancialacquisitionhassubjectedBankofAmericatolargepenaltiesandlitigationcosts."].)

    Inthisopinionwemostlyreferto"Countrywide"asthedefendantbecause,insubstance,thiscomplaintprimarilytargetsCountrywide'sloanandappraisalpracticesbackinthemid2000's.

    [6]Thefamousspeechevenmadeaspecificreferencetoa"bankingconspiracy."Inthatvein,thethirdamendedcomplaintincludessuchexuberantallegationsas:

    "Withgreedastheirmotive,DefendantssetoutuponamassiveandcentrallydirectedfraudbywhichDefendantsplacedhomeownersintoloanswhichDefendantsknewPlaintiffscouldnotafford,abandonedindustrystandardunderwritingguidelines,andintentionallyinflatedtheappraisalvalueofhomesthroughoutCaliforniaforthesolepurposeofherdingasmanyborrowersastheycouldintothelargestloanspossiblewhichDefendantswouldthensellonthesecondarymarketatinflatedvaluesforunimaginable,illgottenprofit(wildlysurpassingtheprofittheywouldmakebyholdingtheloans),knowingthattheirschemewouldcausetheprecipitousdeclineinvaluesofallhomesthroughoutCalifornia,includingthoseofPlaintiffsherein."

    "Likecattle,PlaintiffborrowerswereledtotheslaughterbyDefendantsandtheirgreed."

    "Where,ashere,corporategreedexceedstheextantandimperativepublicneedforinformeddisclosure,thelawmustnotsanction."

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    [7]SeeVisendi,supra,733F.3d863,866("Plaintiffsalleged,amongotherthings,thattheinstitutions'deceptivemortgagelendingandsecuritizationpracticesdecreasedthevalueoftheirhomes,impairedtheircreditscores,andcompromisedtheirprivacy.")Grahamv.BankofAmerica,N.A.(2014)226Cal.App.4th594,599600[172Cal.Rptr.3d218]("Takingissuewithindustrywidemortgagebankingpractices,Grahamseekstoholddefendantsresponsibleforthedeclineinhispropertyvalueaswellasthecollapseoftherealestatemarket.").

    PerhapsthemostsuccinctstatementbyapublishedCaliforniacourtopinionofCountrywide'sroleintheGreatRecessioncanbefoundinBankofAmericaCorp.v.SuperiorCourt(2011)198Cal.App.4th862,865[130Cal.Rptr.3d504](BankofAmerica2011):"By2005,CountrywidewasthelargestmortgagelenderintheUnitedStates,originatingover$490billioninloansinthatyearalone.Countrywide'sfounderandCEO,AngeloMozilodeterminedthatCountrywidecouldnotsustainitsbusiness`unlessituseditssizeandlargemarketshareinCaliforniatosystematicallycreatefalseandinflatedpropertyappraisalsthroughoutCalifornia.CountrywidethenusedthesefalsepropertyvaluationstoinducePlaintiffsandotherborrowersintoeverlargerloansonincreasinglyriskyterms.'Moziloknew`theseloanswereunsustainableforCountrywideandtheborrowersandtoacertaintywouldresultinacrashthatwoulddestroytheequityinvestedbyPlaintiffsandotherCountrywideborrowers.'[]MoziloandothersatCountrywide`hatchedaplanto"pool"theforegoingmortgagesandsellthepoolsforinflatedvalue.Rapidly,thesetwointertwinedschemesgrewintoabrazenplantodisregardunderwritingstandardsandfraudulentlyinflatepropertyvalues...inordertotakebusinessfromlegitimatemortgageproviders,andmovedontomassivesecuritiesfraudhandinhandwithconcealmentfrom,anddeceptionof,Plaintiffsandothermortgageesonanunprecedentedscale.'"

    Inthecasebeforeus,thethirdamendedcomplaintlargelyechoestheallegationsmadeinBankofAmerica2011,exceptthestyleisbitmorerococo.

    [8]Whywereinvestorswillingtopartwiththeirmoneysoeasily?Basically,theanswerisinvestorsfeltconfidentthat"therisk"hadbeenprudentlydispersed.OurcolleaguesintheFifthDistricthaveprovidedthishelpfuldescriptionoftheprocess:"Insimplifiedterms,`securitization'istheprocesswhere(1)manyloansarebundledtogetherandtransferredtoapassiveentity,suchasatrust,and(2)thetrustholdstheloansandissuesinvestmentsecuritiesthatarerepaidfromthemortgagepaymentsmadeontheloans.[Citation.]Hence,thesecuritiesissuedbythetrustare`mortgagebacked.'"(Glaskiv.BankofAmerica(2013)218Cal.App.4th1079,1082,fn.1[160Cal.Rptr.3d449]seeAkopyanv.WellsFargoHomeMortgage,Inc.(2013)215Cal.App.4th120,142[155Cal.Rptr.3d245][notingthatbecauseofsecuritization,"`thinlycapitalizedmortgagebankersandfinancecompanies'"wereableto"`originateloansforsaleonthesecondarymarket.'[Citation.]"]Engel&McCoy,ATaleofThreeMarkets:TheLawandEconomicsofPredatoryLending(May2002)80Tex.L.Rev.1255,1275[quotedbyAkopyan].)

    Backtothethirdamendedcomplaint.Inadditiontotheasitturnedout,flawedriskspreadingtheoryofsecuritization,thedocumentallegesinvestorsthoughttheyhadinsuranceforloandefaultsbyusing"creditdefaultswaps,"whichareformsofinsuranceagainstloandefaults.Paragraphs142through146ofthethirdamendedcomplaintconstituteaphilippicagainstcreditdefaultswaps.(E.g.,par.146a.,"NobelprizewinningeconomistGeorgeAkerlofpredictedthatCDSwouldcausethenextmeltdown....")

    [9]Paragraph98ofthethirdamendedcomplaintencapsulatesthisallegation:"98.AtCountrywideandDefendants'behest,andattheirdirection,LandsafeAppraisalsbegansystematicallyinflatingthevaluationstheyrendereduponthesubjectpropertiesofeachloan,includingtheloansofPlaintiffsherein.Asiscommonknowledgeintherealestateindustry,appraisersarerequiredtocalculatethevalueofahomebasedalmostentirelyonthevalueofothernearbyhomes(calledcomparablesaka`comps').Defendants,includingCountrywideandBankofAmericaseizedonthisvulnerabilityinthesystem.ExercisingdominionoverLandsafe,CountrywidedirectedLandsafetobeginsystematicallyinflatingthevaluationstheyrendereduponthesubjectpropertiesofeachoftheirloans(includingloansofPlaintiffsherein),knowingthatbydoingsotheirfalselyinflatedvaluationswouldactascompsuponwhichnumerousotherappraisersbasedtheirvaluationsofotherhomes.LandSafe'sandDefendants'inflatedappraisalscausedotherhomestobevaluedformorethantheywereworth,whichinturnactedasthepredicateforevenhighappraisals,andwhich,inturn,causedevenmorehomestobevaluedformorethantheywereworth.Theresultwasaviciousselffeedingexponentialcycle,bothexpectedandintendedbyDefendantstheresultwastheintentional,systematic,artificialinflationofhomevaluesthroughoutCalifornia."(Italicsomitted.)

    [10]AswestressinpartII.B.ofthisopinion,thetrialcourtwillhavethepoweronremandtorequireplaintiffs'counseltoundertakethatchoreinthefirstinstance.

    [11]Inthatregardthereareironicallegationsoffraudulentconductinuringtotheostensiblebenefitofso


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