First Community Bank v. Bank of the West
First Community Bank’s (FCB) second amended complaint alleged a fraud claim against Bank of the West. The trial court sustained Bank of the West’s demurrer without leave to amend, concluding FCB failed to allege facts showing it justifiably relied on Bank of the West’s alleged misrepresentation or failure to disclose information. In reaching this conclusion, the court took judicial notice of several documents, including deposition testimony, a contract between the parties, property appraisals, and a credit authorization memorandum.
On appeal, FCB contends the court erred by: (1) taking judicial notice of and weighing extrinsic evidence proffered by Bank of the West; (2) concluding the second amended complaint did not state a cause of action for fraud; and (3) staying discovery pending Bank of the West’s demurrer to the operative complaint.
We reverse. We assume for the sake of argument the court properly took judicial notice of the documents proffered by Bank of the West and the facts asserted within them (and, where relevant, the legal effect of the documents). We conclude, however, that the judicially noticed documents do not negate the allegations of the operative complaint. Because the operative complaint stated a cause of action for fraud, the court erred by sustaining Bank of the West’s demurrer without leave to amend. We therefore reverse the judgment in favor of Bank of the West.
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