Judge: Andrew E. Cooper, Case: 24CHCV01540, Date: 2025-03-04 Tentative Ruling

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Case Number: 24CHCV01540    Hearing Date: March 4, 2025    Dept: F51

Dept. F-51¿ 

Date: 3/4/25

Case #24CHCV01540

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER

Demurrer Filed: 10/30/24

MOVING PARTY: Cross-Defendants Pinnacle Estate Properties, Inc.; and Margaret Volk (collectively, “Cross-Defendants”)

RESPONDING PARTY: Defendants/Cross-Complainants Michael Pirillo; and Rachel Hannon (collectively, “Cross-Complainants”)

NOTICE: OK

RELIEF REQUESTED: Cross-Defendants demur against Cross-Complainants’ entire cross-complaint.

TENTATIVE RULING: The demurrer is overruled. Cross-Defendants to file their answer to the cross-complaint within 30 days.

BACKGROUND

This is an action involving certain real property located at 25929 Adolfo Court, Santa Clarita, California 91355. (Compl. ¶ 10.) Plaintiffs allege that they purchased the subject property from Defendants/Cross-Complainants on 8/24/20. (Id. at ¶ 14.) In connection with the purchase agreement, Defendants/Cross-Complainants executed certain disclosures about defects existing at the subject property. (Id. at ¶ 16.) Plaintiffs allege that they discovered mold at the subject property, caused by excessive moisture that Defendants/Cross-Complainants failed to disclose, in breach of the purchase agreement disclosures. (Id. at ¶¶ 24–44.)

On 4/24/24, Plaintiffs filed their complaint, alleging against Defendants/Cross-Complainants the following causes of action: (1) Breach of Contract; (2) Breach of Covenant of Good Faith and Fair Dealing; (3) Fraud; and (4) Negligent Misrepresentation. On 9/20/24, Cross-Complainants filed their answer and cross-complaint, alleging against Cross-Defendants the following causes of action: (1) Implied Indemnity; (2) Implied Equitable Indemnity; (3) Declaratory Relief; (4) Breach of Contract; (5) Breach of Fiduciary Duty; and (6) Negligence.

“Cross-Defendant Pinnacle was and is a licensed real estate brokerage firm and was the responsible broker for Cross-Defendant Volk, a licensed real estate salesperson and agent” who acted as Cross-Complainant’s real estate agent. (Cross-Compl. ¶¶ 14–16.)

On 10/30/24, Cross-Defendants filed the instant demurrer. On 2/14/25, Cross-Complainants filed their opposition. No reply has been filed to date.

ANALYSIS

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” and is uncertain, meaning “ambiguous and unintelligible.” (Code Civ. Proc., § 430.10, subds. (e) and (f).) 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, Defendant demurs to Plaintiff’s third 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, Cross-Defendants’ counsel declares that on 10/7/24, she sent Cross-Complainants’ counsel a meet and confer letter discussing the issues raised in the instant demurrer. (Decl. of Alana Anaya ¶ 2.) On 10/23/24, counsel for the parties met and conferred telephonically, but 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).

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B.     Implied Indemnity; Implied Equitable Indemnity

Cross-Complainants’ first and second causes of action respectively allege (1) Implied Indemnity and (2) Implied Equitable Indemnity on a Comparative Fault Basis against Cross-Defendants. Here, Cross-Defendants do not challenge the factual sufficiency of these causes of action, rather Cross-Defendants argue that the causes of action are duplicative of one another. (Dem. 3:15–16.)

Cross-Complainants argue in opposition that their first and second causes of action are not duplicative because “implied contractual indemnity extends to the parties to a contract, while equitable indemnity extends beyond contracting parties to include other tortfeasors.” (Opp. 7:20–22.) The Court agrees and observes that Cross-Complainants’ first cause of action for Implied Indemnity alleges that Cross-Defendants should indemnify Cross-Complainants for any liability to Plaintiffs for Cross-Complainants’ conduct. (Cross-Compl. ¶¶ 29–31.) In contrast, Cross-Complainants’ second cause of action for Equitable Indemnity on a Comparative Fault Basis alleges that Plaintiffs’ injuries were caused, in part, by Cross-Defendants’ conduct. (Id. at ¶¶ 33–35.)

Based on the foregoing, the Court finds that Cross-Complainants’ first and second causes of action are not duplicative of one another. Moreover, the Court notes that “this is not a ground on which a demurrer may be sustained,” and “it is a waste of time and judicial resources to entertain a motion challenging part of a pleading on the sole ground of repetitiveness.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 890.) Accordingly, the demurrer is overruled as to Cross-Complainants’ first and second causes of action.

C.    Declaratory Relief

Cross-Complainants’ third cause of action alleges Declaratory Relief against Cross-Defendants. “To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

Here, Cross-Complainants allege that “an actual controversy exists between Cross-Complainants and Cross-Defendants in that the alleged conduct of Cross-Defendants led to a dispute and suit whereupon Cross Complainants were named as defendants. … A declaration of rights and duties as to the responsibilities of Cross-Complainants and Cross-Defendants is appropriate at this time in order to permit Cross-Complainants to ascertain its rights and duties with respect to the Plaintiffs’ allegations.” (Cross-Compl. ¶¶ 37–38.)

Cross-Defendants argue that “Paragraphs 37-38 do not specify what the ‘probable’ future controversy is between the parties because there is no future controversy.” (Dem. 4:10–11.) Cross-Complainants argue in opposition that “here an actual controversy exists because Cross-Complainants have been sued and have demanded Cross-Defendants indemnify them and assume their defense.” (Opp. 8:23–24, citing Cross-Compl. ¶¶ 11, 24, 28, 30–31, 35, 36–38.)

Based on the foregoing, the Court finds that Cross-Complainants have alleged acts sufficient to constitute a cause of action for Declaratory Relief. Accordingly, the demurrer is overruled as to Cross-Complainants’ third cause of action.

D.    Breach of Contract

Cross-Complainants’ fourth cause of action alleges Breach of Contract against Cross-Defendants. To state a cause of action for breach of contract, a plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, 51 Cal.4th at 821.) Here, Cross-Complainants allege that:

“Upon information and belief, Cross-Complainants allege that Cross-Defendants breached the Listing Agreement by failing to exercise reasonable effort and due diligence and failing to properly and completely communicate all disclosures made by Cross-Complainants regarding the Adolfo property, by conveying a different and incomplete SPQ to Plaintiffs, by failing to properly advise Cross-Complainants, and by failing to perform all such duties and obligations required of them as broker and agent by applicable law and their agreements with Cross-Complainants.” (Cross-Compl. ¶ 42 [emphasis added].)

Cross-Defendants argue that Cross-Complainants have failed to allege Cross-Defendants’ breach because they are “not permitted to allege a breach based on ‘information and belief.’” (Dem. 5:3–4, citing Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 174.) In opposition, Cross-Complainants argue that “Cross-Defendants fail to cite any authority holding that a breach can’t be alleged on information or belief, or that doing so makes it uncertain.” (Opp. 9:20–22.) Cross-Complainants argue that the Melican case cited by Cross-Defendants is inapposite because “Melican did not involve allegations on information and belief.” (Id. at 9:24.) Cross-Complainants instead assert that a “Plaintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true.” (Opp. 10:3–4, quoting Pridonoff v. Balokovich (1951) 36 Cal.2d 788, 792.) The Court agrees, and notes that unlike here, Melican involved a factual allegation that the defendant “might have” breached the contract. (151 Cal.App.4th at 174.)

Based on the foregoing, the Court finds that Cross-Complainants have alleged acts sufficient to constitute a cause of action for Breach of Contract. Accordingly, the demurrer is overruled as to Cross-Complainants’ fourth cause of action.

E.     Breach of Fiduciary Duty; Negligence

Cross-Complainants’ fifth and sixth causes of action respectively allege (5) Breach of Fiduciary Duty; and (6) Negligence against Cross-Defendants. Here, Cross-Defendants argue that these causes of action are time-barred under the two-year statute of limitations for professional negligence claims. (Dem. 5:9–15, 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 on 8/24/20, the date the sale of the subject property closed. (Dem. 6:1–2.)

In opposition, Cross-Complainants argue that their Breach of Fiduciary Duty cause of action is distinct from a professional negligence claim. (Opp. 10:12–14, citing 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.” (198 Cal.App.4th at 606.)

Cross-Complainants further assert that “even though the Listing Agreement was signed and the property was sold in 2020, the final element (actual and appreciable harm or damages suffered by Cross-Complainants) did not occur until much later, within two years before the Cross-Complaint was filed. The Cross-Complaint alleges that Plaintiffs filed their Complaint on April 24, 2024 (which is within two years prior to the filing of the Cross-Complaint), and that Cross-Complainants suffered damages and incurred attorneys’ fees and costs in defense of the Complaint. … Therefore, these two causes of action are not time barred under either the two year or four year statute of limitations because the last element of both causes of action – suffering actual and appreciable harm and damages – occurred within two years prior to the filing of the Cross-Complaint.” (Opp. 11:2–11, citing Cross-Compl., ¶¶ 50, 58.)

The Court agrees with Cross-Complainants that their causes of action did not accrue until Plaintiffs filed the instant action against them on 4/4/24, thereby causing them the injuries alleged in the cross-complaint. Therefore, the Court finds that Cross-Complainants’ claims fall within both the four-year statute of limitations for breach of fiduciary duty claims, and the two-year statute of limitations for negligence claims. The Court further notes that Cross-Defendants have failed to file any reply argument to Cross-Defendants’ opposition.

Based on the foregoing, the Court finds that Cross-Complainants have alleged facts sufficient to constitute causes of action for Breach of Fiduciary Duty and Negligence against Cross-Defendants. Accordingly, the demurrer is overruled as to Cross-Complainants’ fifth and sixth causes of action.

CONCLUSION

The demurrer is overruled. Cross-Defendants to file their answer to the cross-complaint within 30 days.