Judge: Armen Tamzarian, Case: 24STCV16044, Date: 2024-10-10 Tentative Ruling

Case Number: 24STCV16044    Hearing Date: October 10, 2024    Dept: 52

Tentative Ruling:

            Defendants Tyrod Taylor and 22594 Zaltana Street, LLC’s Demurrer and Motion to Strike Portions of Complaint       

Demurrer

            Defendants Tyrod Taylor and 22594 Zaltana Street, LLC demur to all seven causes of action alleged by plaintiff Andraya Howard. 

1st through 4th Causes of Action

            Plaintiffs’ first four causes of action are: (1) breach of contract, (2) breach of implied-in-fact contract and/or part oral and part implied contract, (3) specific performance of contract, and (4) breach of implied covenant of good faith and fair dealing.  All four causes of action require an enforceable contract.  Plaintiff does not allege sufficient facts for an enforceable contract.

            Plaintiff alleges she entered a contract with defendant 22594 Zaltana Street, LLC giving her an option to purchase real property.  (Comp., ¶¶ 8-14, 17-18, 22-23, 26-28, 32-33.)  Agreements to transfer real property “are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent.”  (Civ. Code, § 1624(a)(3).)  “A memorandum satisfies the statute of frauds if it identifies the subject of the parties’ agreement, shows that they made a contract, and states the essential contract terms with reasonable certainty.”  (Sterling v. Taylor (2007) 40 Cal.4th 757, 766.) 

            To satisfy the statute of frauds, plaintiff relies on an email sent by Aaron R. Parthemer, Sr. on November 7, 2023.  (Comp., pp. 41-42.)  Assuming the email would otherwise satisfy the statute of frauds, plaintiff does not allege sufficient facts for that purpose.  The email was a counteroffer.  “ ‘[A] qualified acceptance amounts to a new proposal or counteroffer putting an end to the original offer.’ ”  (Panagotacos v. Bank of America (1998) 60 Cal.App.4th 851, 856.)  In the email, Parthemer told plaintiff’s agents, “Thank you for your time today and for sending over the proposed offers from Draya.  Unfortunately, the terms are not acceptable for Tyrod.”  (Comp., p. 41.)  Parthemer proposed additional terms, including a higher sale price.  (Comp., p. 42.)  The email did not accept plaintiff’s prior offer and, at most, gave her the power to accept a new offer with different terms. 

            Plaintiff does not allege facts showing she accepted the counteroffer.  An offer “is revoked … [b]y the lapse of the time prescribed in the proposal for its acceptance or, if no time is prescribed, the lapse of a reasonable time without communication of the acceptance.”  (Civ. Code, § 1587, subd. (b); accord Jeffrey Kavin, Inc. v. Frye (2012) 204 Cal.App.4th 35, 44; Rest.2d Contracts, §§ 41(1), 60.)  “If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to.”  (Civ. Code, § 1582.) 

Parthemer sent the subject email to plaintiff’s agents on November 7, 2023.  (Comp., p. 41.)  He prescribed a time of 30 days for acceptance and prescribed the conditions of communicating acceptance: “If Draya does want to purchase the property Tyrod will give Draya 30 days to provide a formal proof of funds letter and/or a preapproval letter from an approved lender that clearly illustrates her financial ability to make this purchase.  …  If Draya is not able or willing to provide the proof of funds or preapproval in the next 30 days, Tyrod would want to place the house for sale and provide her with a notice to vacate.”  (Ibid.)  On behalf of defendants, Parthemer gave plaintiff 30 days to accept and prescribed that she could only accept if she presented formal proof of funds or preapproval from an approved lender. 

Plaintiff does not allege she met that condition or otherwise communicated valid acceptance within the 30 days allowed.  “An essential element of any contract is the consent of the parties, or mutual assent.”  (Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 270.)  “Mutual assent usually is manifested by an offer communicated to the offeree and an acceptance communicated to the offeror.”  (Id. at pp. 270-271.)  The complaint alleges, “On or about January 12, 2024, Ms. Howard accepted the Defendants’ offer by providing them with a mortgage preapproval letter.”  (Comp., ¶ 13.)  That was more than 60 days after November 7, 2023.  Plaintiff does not allege she communicated acceptance or provided proof of funds or preapproval of a loan within the time prescribed.  The counteroffer had already lapsed when she attempted to accept it.  She had no power to accept it in January.  Plaintiff thus does not allege she objectively manifested her assent to the counteroffer within the time allowed or in the manner prescribed.  Based on these allegations, the parties did not enter an enforceable contract.

The email also cannot serve as a written memorandum satisfying the statute of frauds because it was an offer that was revoked before plaintiff accepted it.  The statute of frauds therefore bars plaintiff’s first through fourth causes of action.

5th Cause of Action: Promissory Estoppel

            Plaintiff alleges sufficient facts to constitute a cause of action for promissory estoppel.  “ ‘The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” ’ ”  (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734 (Flintco).)

            Defendants make a conclusory argument that plaintiff has not alleged any of the elements.  (Demurrer, p. 11.)  She alleges sufficient facts for each element.  First, plaintiff alleges that in August 2022, “Taylor promised that any contributions she made towards either improving or satisfying the mortgage of the Property will be applied towards the purchase value of the Property when she decides she wishes to transfer title.”  (Comp., ¶ 8.) 

Second, plaintiff alleges she relied on that promise by “ma[king] substantial improvements and payments to the Defendants in reliance on Mr. Taylor’s promise that she would acquire ownership over the Property.”  (¶ 10.)  She alleges that “between September 2023 and January 2024 she had spent a total of $270,000.00 in improving the Property.”  (¶ 13.) 

Third, plaintiff alleges sufficient facts showing her reliance was reasonable and foreseeable.  “[W]hether the reliance was reasonable is a question of fact unless reasonable minds could reach only one conclusion based on the evidence, in which case the question is one of law.”  (Flintco, supra, 1 Cal.App.5th at p. 734.)  She alleges, “Ms. Howard and Mr. Taylor were in an intimate relationship at the time the [purported] Contract was entered into between the parties.  Consequently, Mr. Taylor was not only Ms. Howard’s boyfriend but her landlord.”  (Comp., ¶ 37.)  A reasonable trier of fact could find plaintiff’s reliance on the alleged promise was reasonable and foreseeable.

Finally, plaintiff alleges she was injured by her reliance.  She alleges she “was deceived into making improvements and paying the mortgage on a property that Defendants knew she was neither going to own nor benefit from any appreciation.”  (Comp., ¶ 40.)

Defendants also argue plaintiff cannot bring this claim while alleging an enforceable contract.  As discussed above, plaintiff does not allege sufficient facts for an enforceable contract.  Even if she had, the claims alleging an enforceable contract are against defendant 22594 Zaltana Street, LLC only.  The fifth cause of action for promissory estoppel is against defendant Tyrod Taylor only.  Plaintiff does not allege an enforceable contract between herself and Tayor.  The alleged existence of an enforceable contract with the LLC would not preclude plaintiff from alleging promissory estoppel against Taylor.

6th Cause of Action: Unjust Enrichment

            Plaintiff alleges sufficient facts for unjust enrichment.  “ ‘In general, “[a] person who has been unjustly enriched at the expense of another is required to make restitution to the other.” ’ ”  (Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 627.)  “ ‘Ordinarily the benefit to the one and the loss to the other are co-extensive, and the result ... is to compel the one to surrender the benefit which he has received and thereby to make restitution to the other for the loss which he has suffered.’ ”  (Ibid.) 

            Defendants argue plaintiff has not alleged unjust enrichment because she received what she paid for: possession of the property and improvements that she “enjoyed … and which may be removed by Plaintiff prior to the expiration of her lease.”  (Demurrer, pp. 11-12.)  The complaint alleges plaintiff spent $270,000 on improvements at the property.  (Comp., ¶ 13.)  Nothing in the complaint provides a basis to conclude plaintiff can remove and take $270,000 in improvements with her.  The theory of unjust enrichment is available to prohibit defendant from retaining the benefit of those improvements at plaintiff’s expense. 

7th Cause of Action: Declaratory Relief

            Plaintiff does not allege sufficient facts for declaratory relief.  A plaintiff may bring an action for declaratory relief about the parties’ rights under a contract.  (Code Civ. Proc., § 1060; Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 846.)  As discussed above, plaintiff does not allege sufficient facts to establish the parties entered an enforceable contract.  Issuing a judicial declaration of plaintiff’s rights under a contract is therefore not appropriate. 

Motion to Strike

            Defendants move to strike three portions of plaintiff’s complaint.  Courts may strike a “demand for judgment requesting relief not supported by the allegations of the complaint.”  (Code Civ. Proc., § 431.10, subd. (b)(3).) 

            Defendants move to strike two portions of the complaint about plaintiff’s emotional distress.  Striking them is warranted because plaintiff cannot recover emotional distress damages.  “[U]nder the economic loss rule, tort recovery for breach of a contract duty is generally barred … unless two conditions are satisfied.  A plaintiff must first demonstrate the defendant’s injury-causing conduct violated a duty that is independent of the duties and rights assumed by the parties when they entered the contract.  Second, the defendant’s conduct must have caused injury to persons or property that was not reasonably contemplated by the parties when the contract was formed.”  (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20-21 (Rattagan).)

Plaintiff relies solely on Seaman’s Direct Buying Service, Inc. v. Standard Oil Co. (1984) 36 Cal.3d 752, 769 (Seaman’s) which stated, “[A] party to a contract may incur tort remedies when, in addition to breaching the contract, it seeks to shield itself from liability by denying, in bad faith and without probable cause, that the contract exists.”  That rule was abrogated almost 30 years ago.  The California Supreme Court overruled Seaman’s in Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85.  (See Rattagan, supra, 17 Cal.5th at p. 25 [“The Freeman court repudiated the Seaman’s holding”].)

Plaintiff does not allege sufficient facts to establish an enforceable contract.  She alleges sufficient facts for promissory estoppel, which similarly prohibits recovering emotional distress or other tort damages.  “A promissory estoppel claim generally entitles a plaintiff to the same damages available on a breach of contract claim”, including the limits on damages under “ ‘the economic loss rule.’ ”  (State Ready Mix, Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, 1233.)

Defendants also move to strike the prayer for attorney fees.  A plaintiff may only recover attorney fees when authorized by contract, statute, or other law.  (Code Civ. Proc., § 1033.5, subd. (a)(10).)  Plaintiff relies on attorney fee provisions in written contracts that defendants did not sign.  (Comp., option agreement, residential purchase agreement.)  Plaintiff has not alleged facts showing defendants entered those contracts.  Plaintiff cannot recover attorney fees under them.

Disposition

            Defendants Tyrod Taylor and 22594 Zaltana Street, LLC’s demurrer to plaintiff Andraya Howard’s first, second, third, fourth, and seventh causes of action is sustained with 20 days’ leave to amend.  Defendants’ demurrer to the fifth and sixth causes of action is overruled.

Defendants’ motion to strike portions of the complaint is granted with leave to amend.  The court hereby strikes the following portions of the complaint with 20 days’ leave to amend: (1) “caused emotional distress” (Comp., ¶ 18, page 5, lines 11-12); (2) “For Plaintiff’s emotional distress and mental anguish” (¶ 52, page 9, line 21); and (3) “attorneys’ fees and” (¶ 55, page 9, line 24).