Judge: Andrew E. Cooper, Case: 24CHCV00888, Date: 2025-03-05 Tentative Ruling

Case Number: 24CHCV00888    Hearing Date: March 5, 2025    Dept: F51

Dept. F-51¿ 

Date: 3/5/25

Case #24CHCV00888

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER WITH MOTION TO STRIKE

Demurrer with Motion to Strike Filed: 11/5/24 

MOVING PARTY: Defendants Pinnacle Estate Properties, Inc.; Steven Goodman; and Meredith Pope (collectively, “Moving Defendants”)

RESPONDING PARTY: Plaintiffs George H. Lyddane; Nancy R. Lyddane; Mollie M. Lyddane; and Christopher S. Lyddane (collectively, “Plaintiffs”)

NOTICE: OK 

RELIEF REQUESTED: Moving Defendants demur against the first through sixth causes of action in Plaintiffs’ first amended complaint (“FAC”) and seek an order striking Plaintiffs’ references to punitive damages.

TENTATIVE RULING: The demurrer is overruled. The motion to strike is granted as to paragraph 119, and as to the prayer for punitive damages with respect to Plaintiffs’ seventh cause of action, without leave to amend. The remainder of the motion to strike is denied. Moving Defendants to file their answer to the FAC within 30 days.

BACKGROUND

This is an action involving certain real property located at 6252 Placerita Canyon Road, Newhall, California. (FAC 1:24–25.) Plaintiffs allege that they purchased the subject property from nonmoving defendants Scott and Rhonda Alexander on 3/16/21. (Id. at ¶¶ 10, 30.) Moving Defendants are the real estate brokerage and agents representing Plaintiffs in the sale of the subject property. (Id. at ¶¶ 5–7.) In connection with the purchase agreement, the sellers executed certain disclosures about the subject property. (Id. at ¶ 26.) Plaintiffs allege that Defendants failed to disclose the true square footage of the property, and that the property’s guesthouse was not permitted or suitable for occupancy. (Id. at ¶¶ 15–40.)

On 3/15/24, Plaintiffs filed their original complaint, alleging against Defendants the following causes of action: (1) Breach of Fiduciary Duty; (2) Fraud (Two Counts); (3) Intentional Misrepresentation (Two Counts); (4) Negligent Misrepresentation; and (5) Negligence. On 10/30/24, Plaintiffs filed their FAC, alleging the following causes of action: (1) Breach of Fiduciary Duty; (2) Fraud – Concealment; (3) Fraud – Concealment; (4) Fraud – Concealment; (5) Intentional Misrepresentation; (6) Intentional Misrepresentation; (7) Negligent Misrepresentation; and (8) Negligence.

On 11/5/24, Moving Defendants filed the instant demurrer and motion to strike. On 2/20/25, Plaintiffs filed their opposition. On 2/21/25, Moving Defendants filed their reply.

DEMURRER

As a general matter, a party may respond to a pleading against it by demurrer on the basis of any single or combination of eight enumerated grounds, including that “the pleading does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿

“A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) 

Here, Moving Defendants demur to Plaintiffs’ first through sixth causes of action on the basis that they are factually deficient.

A.    Meet and Confer

Before filing its demurrer, “the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc. § 430.41, subd. (a).) The demurring party must file and serve a meet and confer declaration stating either: “(A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer;” or “(B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith.” (Id. at subd. (a)(3).)

Here, Moving Defendants’ counsel declares that on 10/30/24, she sent Plaintiffs’ counsel a meet and confer letter discussing the issues raised in the instant demurrer. (Decl. of Alana Anaya ¶ 2.) On 11/4/24, Plaintiffs’ counsel responded, but the parties were unable to come to a resolution. (Id. at ¶¶ 3–4.) Therefore, the Court finds that counsel has satisfied the preliminary meet and confer requirements of Code of Civil Procedure section 430.41, subdivision (a).

B.     Statute of Limitations

As a preliminary matter, Moving Defendants argue that Plaintiffs’ first, fourth, and fifth causes of action are time-barred. The Court notes that the first, fourth, and fifth causes of action respectively allege Breach of Fiduciary Duty, Fraud (Count Three), and Intentional Misrepresentation (Count One.) To the extent that Moving Defendants argue against Plaintiffs’ seventh and eighth causes of action for Negligent Misrepresentation and Negligence, Moving Defendants have not stated as such in their Notice of Demurrer, therefore the Court is unclear as to any arguments against those causes of action. (Cal. Rules of Court, rule 3.1110(a).)

Moving Defendants argue that Plaintiffs’ first, fourth, and fifth causes of action are time-barred under the two-year statute of limitations for professional negligence claims. (Dem. 3:9–15, citing Code Civ. Proc. § 339.) A statute of limitations begins to run when a cause of action accrues, and “a cause of action accrues at the time when the cause of action is complete with all of its elements.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806–807 [quotations and citations omitted].) Here, Cross-Defendants argue that the two-year statute of limitations began to run in June 2021, the date when Plaintiffs allege that they “discovered that only some permits existed for the” guesthouse. (Dem. 6:1–2, citing FAC ¶ 34.)

The statute of limitations for an action for fraud is three years. (Code Civ. Proc. § 338, subd. (d).) To the extent that Moving Defendants argue that a two-year statute of limitations applies to Plaintiffs’ first cause of action for Breach of Fiduciary Duty, the Court notes that this cause of action is distinct from a professional negligence claim. (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 605 [“[a] breach of fiduciary duty is a species of tort distinct from a cause of action for professional negligence.”].) In Thomson, the Court of Appeal found that while “a cause of action for professional negligence is generally governed by the two-year statute of limitations under Code of Civil Procedure section 339, subdivision (1),” a cause of action for breach of fiduciary duty is “governed by the residual four-year statute of limitations in Code of Civil Procedure section 343.” (Id. at 606.)

In opposition, Plaintiffs argue that their claims did not accrue until January and February 2024. Specifically, Plaintiffs assert that “the FAC also states that Plaintiffs did not discover that the original permits for the Guesthouse were for a barn/garage only until they applied for permits to renovate the Guesthouse in January 2024. … Plaintiffs also did not discover that the total square footage for the Property represented by Defendants was inaccurate until February 2024.” (Pls.’ Opp. 6:19–23, citing FAC ¶¶ 37, 39–40.)

The Court agrees with Plaintiffs that they have sufficiently alleged that their causes of action did not accrue until they discovered the nature of Defendants’ misrepresentations in January and February 2024. Therefore, the Court finds that Plaintiffs’ claims fall within the four-year statute of limitations for breach of fiduciary duty claims, the three-year statute of limitations for fraud claims, and, to the extent Moving Defendants challenge Plaintiffs’ negligence claims, the two-year statute of limitations for those causes of action. Accordingly, the demurrer is overruled as to Plaintiffs’ first, fourth, and fifth causes of action.

C.    Fraud Causes of Action

Plaintiff’s second through fourth causes of action allege Fraud – Concealment against Defendants. Plaintiff’s fifth and sixth causes of action allege Intentional Misrepresentation against Defendants. “The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.” (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)

“The elements of a cause of action for intentional misrepresentation are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4) actual and justifiable reliance, and (5) resulting damage.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) “It is hornbook law that an actionable misrepresentation must be made about past or existing facts; statements regarding future events are merely deemed opinions.’” (San Francisco Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 43–44.)

Fairness requires that allegations of fraud be pled “with particularity” so that the court can weed out nonmeritorious actions before a defendant is required to answer. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The particularity requirement necessitates pleading facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Here, Moving Defendants argue that “Plaintiffs’ Amended Complaint fails to comply with the required heightened pleading requirements required for fraudulent concealment and intentional misrepresentation.” (Dem. 7:20–21.) Specifically, Moving Defendants argue that “the Amended Complaint lacks facts showing how, when, where, to whom, and by what means the representations were made and in the case of corporate defendant, Pinnacle Estate Properties, Inc., Plaintiffs must allege but failed to allege the names of the person(s) who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote and when the representation was made.” (Id. at 7:7–11.) Moving Defendants further contend that the alleged misrepresentations do not concern past or existing facts, but nonactionable future events. (Id. at 4:3–16.)

In opposition, Plaintiffs argue that “the Brokers here made misrepresentations of past or existing material fact as to the overall square footage of the home and the permitting of the Guest House and its fitness for occupancy.” (Pls.’ Opp. 7:6–8.) The Court agrees with Plaintiffs that “the Property’s total square footage and whether the Guest House was permitted for occupancy were not future predictions of anything. They were not fluctuating forecasts or representations of opinion, but two definite facts, set in stone, that were misrepresented by Defendants.” (Id. at 7:20–23.)

Plaintiffs further argue that they have sufficiently alleged that “the misrepresentations were made by Pope and Goodman to Plaintiffs on December 31, 2020 that and that each of the three Broker Defendants knew that the true facts of the square footage were in the Private Remarks of the Listing and inaccessible to Plaintiffs. (Pls.’ Opp. 8:21–23, citing FAC ¶¶ 55–58; see also FAC ¶¶ 88–108.) The Court agrees with Plaintiffs that Moving “Defendants have cited no specific examples of omitted facts to defeat any of these claims at the pleading stage.” (Pls.’ Opp. 10:10–11.)

Based on the foregoing, the Court finds that Plaintiffs have alleged facts sufficient to constitute their causes of action for Fraud – Concealment and Intentional Misrepresentation. Accordingly, the demurrer is overruled as to Plaintiff’s second through sixth causes of action. As discussed earlier, to the extent that Moving Defendants demur against Plaintiff’s seventh and eighth causes of action for Negligent Misrepresentation and Negligence, Moving Defendants have not stated as such in their Notice of Demurrer, therefore the Court is unclear as to any arguments against those causes of action. (Cal. Rules of Court, rule 3.1110(a).)

MOTION TO STRIKE

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression by clear and convincing evidence. (Civ. Code § 3294, subd. (a).) “Malice” is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Id. at subd. (c); Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person’s rights. (Ibid.) “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Ibid.) Punitive damages must be supported by factual allegations. Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042; Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643.)

Here, Moving Defendants argue that their “alleged failure to advise Plaintiffs that the guesthouse did not have a certificate of occupancy and that the 5,129 square footage of the main residence includes the guesthouse square footage does not rise to the level of conduct required by California law to impose punitive damages.” (MTS 5:9–12.) The Court disagrees and reiterates its finding that Plaintiffs have sufficiently their fraud causes of action against Moving Defendants.

However, with respect to Plaintiffs’ seventh cause of action for Negligent Misrepresentation, Moving Defendants assert that “punitive damages are not recoverable for negligent misrepresentation.” (Id. at 8:1–2, citing Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241 [“Punitive damages are recoverable in those fraud actions involving intentional, but not negligent, misrepresentations.”].) “Plaintiffs agree and do not oppose striking the request for punitive damages from the prayer for relief in the Seventh Cause of Action for Negligent Misrepresentation and from paragraph 119 in the Seventh Cause of Action in the FAC.” (MTS Opp. 4:14–16.)

Accordingly, the motion to strike Plaintiff’s references to punitive damages is granted as to Plaintiff’s seventh cause of action only, without leave to amend, and denied as to the remainder.

CONCLUSION

The demurrer is overruled. The motion to strike is granted as to paragraph 119, and as to the prayer for punitive damages with respect to Plaintiffs’ seventh cause of action, without leave to amend. The remainder of the motion to strike is denied. Moving Defendants to file their answer to the FAC within 30 days.