Judge: Armen Tamzarian, Case: 23STCV14071, Date: 2024-02-08 Tentative Ruling
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Case Number: 23STCV14071 Hearing Date: February 8, 2024 Dept: 52
Defendants Navigators Real
Estate, Inc. d/b/a Pinnacle Real Estate Group (Pinnacle) and Qing Guan demur to
the first, second, fourth, and fifth causes of action alleged in the complaint
by plaintiffs Min-Hsiung Chien, Nancy M. Chien, Stan Chien, and Allen
Chien.
Summary of Allegations
Plaintiffs’ causes
of action against Pinnacle and Guan arise from plaintiffs’ sale of real
property at 2120 Mountain View Rd. in South El Monte. (Comp., ¶¶ 35-45.) Plaintiffs Min-Hsiung Chen and Nancy M. Chien
conveyed title to the property to the Chien Family Trust. (¶ 36.)
Min-Hsiung and Nancy M. Chien served as the trustees until May
2022. (¶ 47.) Their children, Stan Chien and Allen Chien, then
succeeded them as trustees. (Ibid.)
Plaintiffs allege,
“On or about March 1, 2022, GUAN and PINNACLE …
contacted and presented to Plaintiffs, MIN-HSIUNG CHIEN and NANCY M.
CHIEN a listing agreement to list the South El Monte Property for sale at the
proposed price $2,300,000.00 and to act as a fiduciary in the capacity of real
estate broker and agent for Plaintiffs.”
(¶ 37.) The complaint further
alleges Guan and Pinnacle “represented to MIN-HSIUNG CHIEN and NANCY M. CHIEN
that the proposed listing amount of $2,300,000.00 was the fair market value of
the South El Monte Property.” (¶ 38.)
Plaintiffs allege
Pinnacle and Guan “knew or should have known that the proposed listing amount
of $2,300,000.00 was significantly lower than the fair market value of the
South El Monte Property in March 2022 of approximately $2,950,000.00.” (¶ 39.)
“MIN-HSIUNG CHIEN and NANCY M. CHIEN trusted and relied upon the
purported knowledge, experience, expertise, education, licensing, and Realtor
status of GUAN and PINNACLE … in considering and accepting the proposed listing
amount of $2,300,000.00 for the South El Monte Property.” (¶ 41.)
“Based upon the advice and recommendation of GUAN and PINNACLE …,
MIN-HSIUNG CHIEN and NANCY M. CHIEN agreed to and executed a listing agreement
to list the South El Monte Property for sale at $2,300,000.00 on or about March
1, 2022 with a proposed public listing date of March 4, 2022.” (¶ 42.)
Plaintiffs also
allege, “Less than coincidentally, within 9 days of listing the South El Monte
Property for sale, GUAN and PINNACLE … obtained and presented to MIN-HSIUNG
CHIEN and NANCY M. CHIEN a purchase offer in the amount of $2,300,000.00 from
‘Yantao Lin and/or assignees’ and proposed dual agents, GUAN and PINNACLE …, to
purportedly represent both the buyer and the seller as a fiduciary to both.” (¶ 43.)
“In trust and reliance on GUAN and PINNACLE … , MIN-HSIUNG CHIEN and
NANCY M. CHIEN accepted and executed the purchase offer of $2,300,000.00 for
the South El Monte Property on March 13, 2022 and performed all necessary tasks
under the purchase and sale agreement.”
(¶ 45.)
Demurring
defendants do not apply the correct standard on demurrer
In reviewing
a complaint challenged by demurrer, the court must “accept as true all the
material facts properly pleaded” and does not “go beyond the four corners of
the complaint, except as to matters which may be judicially noticed.” (Thornburn v. Department of Corrections (1998)
66 Cal.App.4th 1284, 1287-1288.) Any
ambiguity in the complaint is viewed in favor of the plaintiff. This is because the court must liberally
construe the complaint and make all reasonable inferences in favor of the party
asserting the claims. (Robertson v.
Saadat (2020) 48 Cal.App.5th 630, 639.)
Throughout
their memorandum supporting their demurrer, defendants ignore this standard by improperly
attempting to interject facts not pled and requesting the court to make
inferences in their favor. This the
court cannot do.
For example,
defendants argue this action is “nothing more than a classic case of seller’s
remorse.” (Defendants’ Mem., p. 9.) The complaint, however, does not allege
anything about “seller’s remorse,” and the law requires the court to make the
opposite inference. This fatal flaw in
defendants’ analysis permeates all of their arguments.
First Cause of Action: Financial Elder Abuse
Plaintiffs allege sufficient facts for this cause of
action. Elder abuse occurs when someone
“[t]akes, secretes, appropriates, obtains, or retains real or personal
property of an elder ... for a wrongful use or with intent to defraud.” (Welf. & Inst. Code, § 15610.30(a)(1);
accord Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th
639, 656 [the statute “broadly defines financial abuse of an elder”].) For elder abuse claims, “the facts
constituting the [unlawful conduct] and establishing the causal link between [it]
and the injury ‘must be pleaded with particularity,’ in accordance with the
pleading rules governing statutory claims.”
(Carter v. Prime Healthcare Paradise Valley LLC (2011) 198
Cal.App.4th 396, 407.)
Defendants argue, “Plaintiff
Parents’ willingly and voluntarily executed a Listing Agreement to sell the
South El Monte Property for $2,300,000.”
(Demurrer, p. 8.) The complaint,
however, alleges they did so because they relied on Guan and Pinnacle’s
“knowledge, experience, expertise, education, licensing, and Realtor status’ (¶
41) and their “advice and recommendation” (¶ 42). The Elder Abuse and Dependent Adult Civil
Protection Act specifically anticipates that obtaining the victims’ consent is
among the primary ways people take property from the elderly. (See Welf. & Inst. Code, § 15610.30,
subd. (a)(3) [taking “by undue influence”] & subd. (c) [taking “by means of
an agreement, donative transfer, or testamentary bequest”].)
Defendants also contend
plaintiffs “attempt to circumvent the absence of fraud by claiming that the
sale of the South El Monte Property was not valid because the Chien Family
Trust had ‘changed’ trustees.” (Demurrer,
p. 8.) Plaintiffs do not do so. They do not claim the sale was “not
valid.” They do not seek to rescind it. They seek damages because the sale price was
allegedly too low. That Stan Chien and
Allen Chien became the trustees is not alleged to satisfy a necessary substantive
element of any cause of action against Guan and Pinnacle. Again, defendants improperly ask the court to
review the complaint in a light most favorable to them.
Second Cause of Action: Breach of
Fiduciary Duty
Plaintiffs allege
sufficient facts for this cause of action against Guan and Pinnacle. “ ‘The elements of a cause of action for
breach of fiduciary duty are the existence of a fiduciary relationship,
its breach, and damage proximately caused by that breach.’ ” (Knox v. Dean (2012) 205
Cal.App.4th 417, 432.)
Defendants argue plaintiffs
fail to specifically allege the facts.
Assuming this heightened standard of pleading applies (see Pierce v.
Lyman (1991) 1 Cal.App.4th 1093, 1107 [rejecting argument on specificity
because the complaint alleges “participation in various breaches of fiduciary
duty” that “are sufficiently specific to put respondents on notice of the
charges against them”]), plaintiffs’ complaint meets it. It makes clear and specific factual
allegations for each element of breach of fiduciary duty. (Comp., ¶¶ 35-45, 67-76.)
Defendants contend the
allegation that “the sale of the South El Monte Property could have possibly
brought more money to Plaintiff Parents … is nothing more than speculation and
conjecture by the Plaintiffs.”
(Demurrer, p. 10.) That the
property was truly worth $2,950,000 is an ultimate fact the court must accept
on demurrer. Defendants’ argument that
plaintiffs are “speculating” about the value of the property is wholly improper
on demurrer. Defendants are effectively
asking the court to sit as a trier of fact at the pleading stage. The court rejects this approach because it is
contrary to law.
Defendants also
argue they owed no fiduciary duty to plaintiffs Stan Chien and Allen Chien because
they did not sign the listing agreement or accept the purchase offer. (Comp., ¶¶ 37, 40-45.) Only their parents signed the agreement and
accepted the offer. (Ibid.) But that does not negate the alleged fiduciary
duty. A real estate broker’s duty is not
purely contractual. “ ‘Real estate
brokers are subject to two sets of duties: those imposed by regulatory
statutes, and those arising from the general law of agency.’ ” (Ryan v. Real Estate of the Pacific, Inc.
(2019) 32 Cal.App.5th 637, 646.) “[A]
broker acting as a dual agent owes fiduciary duties to both buyer and
seller.” (Horiike v. Coldwell Banker
Residential Brokerage Co. (2016) 1 Cal.5th 1024, 1028.)
The complaint
alleges sufficient facts to establish defendants’ fiduciary duty to all four
plaintiffs. “Legal title to property owned by a trust is held by the
trustee, and common law viewed the trustee as the owner of the trust’s
property.” (Galdjie v. Darwish (2003)
113 Cal.App.4th 1331, 1343.) “[R]evocable trusts have no right to sue or be
sued.” (Boshernitsan v. Bach
(2021) 61 Cal.App.5th 883, 891.)
When they
executed the listing agreement in March 1, 2022 (Comp., ¶¶ 42), Min-Hsiung and
Nancy M. Chien were the trustees of the Chien Family Trust (¶ 47) and therefore
held title to the subject property. Stan
and Allen Chien became the trustees in May 2022 (¶¶ 47-48) and therefore held
title to the subject property when escrow closed on October 1, 2022 (¶
52). The complaint’s allegations suffice
to state Guan and Pinnacle owed a fiduciary duty to each plaintiff as a trustee
of the trust that held nominal title to the subject property.
Fourth Cause of Action: Negligence
Plaintiffs allege sufficient
facts for this cause of action.
Defendants argue, based on paragraphs 85-88 of the complaint, plaintiffs
make only conclusory allegations. Paragraphs
35 to 45 and 50-56 of the complaint make specific factual allegations that meet
the elements of negligence.
Defendants also argue this
cause of action merely duplicates the third cause of action for professional
negligence. “ ‘[A] party may plead in
the alternative and may make inconsistent allegations.’ ” (Third
Eye Blind, Inc. v. Near North Entertainment Ins. Services, LLC (2005)
127 Cal.App.4th 1311, 1323.) Defendants
cite no authority stating that a duplicative count “does not state facts
sufficient to constitute a cause of action.”
(CCP § 430.10(e).)
Fifth Cause of Action: Negligent
Misrepresentation
Plaintiffs allege sufficient
facts for this cause of action. Defendants
argue that an agent’s statement of a property’s value is an opinion, not an
actionable representation.
Plaintiffs allege sufficient facts for an
exception to the general rule. “Under
certain circumstances, expressions of professional opinion are treated as
representations of fact. When a
statement, although in the form of an opinion, is ‘not a casual expression of
belief’ but ‘a deliberate affirmation of the matters stated,’ it may be
regarded as a positive assertion of fact.
[Citation.] Moreover, when a
party possesses or holds itself out as possessing superior knowledge or special
information or expertise regarding the subject matter and a plaintiff is so
situated that it may reasonably rely on such supposed knowledge, information,
or expertise, the defendant’s representation may be treated as one of material
fact.” (Bily v. Arthur Young &
Co. (1992) 3 Cal.4th 370, 408.)
The complaint alleges defendants proposed
listing the subject property for $2.3 million (¶ 37) and they “knew or should
have known that … was significantly lower than the fair market value” (¶ 39). The complaint alleges plaintiffs “trusted and
relied upon the purported knowledge, experience, expertise, education,
licensing, and Realtor status of GUAN and PINNACLE.” (¶ 41.)
It further alleges Qing Guan was “a licensed real estate salesperson
(DRE License #02073090).” (¶ 6.) It therefore alleges defendants held
themselves out as experts on the value of real property such that their opinion
can be treated as a representation of material fact.
Defendants’ reliance on Padgett
v. Phariss (1997) 54 Cal.App.4th 1270 is misplaced. That case was an appeal from an order
granting summary judgment (id. at p. 1275) based on the evidence, not the
sufficiency of the pleadings. The court
stated plaintiff “failed to show the [real estate] agents were in possession of
facts about the value of the property, other than by speculating they must have
known more than they said.” (Id.
at p. 1284.) On demurrer, this complaint’s
factual allegations suffice to make defendants’ representation actionable.
Disposition
Defendants Navigators Real
Estate, Inc. d/b/a Pinnacle Real Estate Group and Qing Guan’s demurrer is overruled. Defendants shall answer plaintiffs’ complaint
within 20 days.