Judge: Barbara M. Scheper, Case: 22STCV17336, Date: 2022-10-25 Tentative Ruling
Case Number: 22STCV17336 Hearing Date: October 25, 2022 Dept: 30
Dept. 30
Calendar No.
Carr, et. al. vs. Cal-Penn Inc.,
et. al., Case No. 22STCV05633
Tentative Ruling re:
Defendant’s Demurrer to Complaint; Motion to Strike
Defendant Cal-Penn, Inc. (Defendant) demurs to the third
through sixth causes of action in the Complaint of Plaintiffs Christine Carr,
Erik Stabenau, Spencer Carr Reed, and Lauren Carr Reed (collectively,
Plaintiffs). The demurrer is sustained as to the third through fifth causes of
action, and overruled as to the sixth cause of action. Defendant is ordered to answer within ten
(10) days of today’s date.
In reviewing the legal sufficiency
of a complaint against a demurrer, a court will treat the demurrer as admitting
all material facts properly pleaded, but not contentions, deductions, or
conclusions of law. (Blank v. Kirwan
(1985) 39 Cal.3d 311, 318 (Blank); C & H Foods Co. v. Hartford Ins. Co.
(1984) 163 Cal.App.3d 1055, 1062.) It is well settled that a “demurrer lies
only for defects appearing on the face of the complaint[.]” (Stevens v. Superior Court (1999) 75
Cal.App.4th 594, 601.) “The rules by which the sufficiency of a complaint is
tested against a general demurrer are well settled. We not only treat the
demurrer as admitting all material facts properly pleaded, but also give the
complaint a reasonable interpretation, reading it as a whole and its parts in
their context.” (Guclimane Co. v. Stewart
Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (internal quotes omitted).) For
purposes of ruling on a demurrer, the complaint must be construed liberally by
drawing reasonable inferences from the facts pleaded. (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.)
When ruling on a demurrer, the
Court may only consider the complaint’s allegations or matters which may be
judicially noticed. (Blank, supra, 39
Cal.3d at 318.) The Court may not consider any other extrinsic evidence or
judge the credibility of the allegations plead or the difficulty a plaintiff
may have in proving his allegations. (Ion
Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) A demurrer is
properly sustained only when the complaint, liberally construed, fails to state
facts sufficient to constitute any cause of action. (Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 578.)
Plaintiffs are tenants of the property located at 23561
Malibu Colony Road, Malibu, CA (the Malibu Property). (Comp. ¶¶ 3-6.) Plaintiffs
allege that the Malibu Property is owned by Defendant Walter S. Buckley, III or
The Walter S. Buckley III Family Trust. (Comp. ¶ 8.) Moving Defendant Cal-Penn,
Inc. is alleged to have been the property manager for the Malibu Property
during Plaintiffs’ lease. (Comp. ¶ 7.) The lease agreement attached to the
Complaint is made between Plaintiff Christine Carr as tenant and Walter S.
Buckley III as landlord. (Comp. Ex. A [27].)
Plaintiffs’ third through six causes of action against
Defendant are for (3) Breach of Contract, (4) Breach of Implied Warranty of
Habitability, (5) Breach of Implied Warranty of Peaceful and Quiet Enjoyment, and
(6) Fraud/Concealment. Defendant demurs to the third through fifth causes of
action on the basis that it was not a party to the written lease agreement
underlying these contract-based claims. Plaintiffs concede that the demurrer
should be sustained as to these causes of action. The parties’ remaining
dispute concerns Plaintiffs’ sixth cause of action against Defendant for
Fraud/Concealment.
Sixth Cause of Action for Fraud/Concealment
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.” (Graham
v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606 (Graham.)
The liberal construction of pleadings does not apply
to a fraud claim. Instead, a fraud claim must be pled with specificity. (Tenet
Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821,
837.) Fraud must be pleaded with specificity rather than with general and
conclusory allegations. (Small v. Fritz
Companies, Inc. (2003) 30 Cal.4th 167, 184 (Small).) Specifically, “th[e] particularity requirement
necessitates pleading facts which show how, when, where, to whom, and by what
means the representations were tendered.” (Lazar
v. Superior Court (1996) 12 Cal.4th 631, 645 (Lazar).) In the case of a corporate defendant, the plaintiff must
allege the names of the persons 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. (Ibid.; West v. JPMorgan Chase
Bank, N.A. (2013) 214 Cal.App.4th 780, 793 (West).)
The rule of specificity
of pleading is intended to apply only to affirmative representations and not to
fraud by concealment. (Alfaro v.
Community Housing Improvement System & Planning Assn., Inc. (2009) 171
Cal.App.4th 1356, 1384; Jones, 198 Cal.App.4th at 1199-1200.) In
addition, “[l]ess specificity is required when ‘it appears from the nature of
the allegations that the defendant must necessarily possess full information
concerning the facts of the controversy....’” (Committee on Children's
Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216; see¿Quelimane
Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47.)
Here,
Plaintiffs allege that serious maintenance problems existed at the Malibu
Property from the start of their lease on November 28, 2018, including
flooding, leaks, vermin and insect infestations, and sewage leaks. (Comp. ¶
25.) Defendants were given written notice of the issues. (Ibid.)
Defendants did not obtain on-site professional inspection or testing of the
property. (Comp. ¶ 26.)
In
July 2020, Plaintiffs hired a firm to conduct environmental and air quality
testing on the property, which revealed dangerous levels of toxic molds,
elevated counts of air spores and surface fungal growth in seven areas, and rat
droppings and urine in the kitchen and in sink cabinets. (Comp. ¶ 30.) A
plumbing inspection revealed that the plumbing systems had been improperly
maintained and found continuing leaks in various areas. (Comp. ¶ 31.) A doctor
advised Plaintiffs to leave the Malibu Property, and Plaintiffs were also
forced to move out on July 29, 2020, due to the water intrusion and ventilation
issues. (Comp. ¶ 39-40.) The issues caused Plaintiffs significant health
problems, damage to personal property, and lose of use of the Malibu Property.
(Comp. ¶ 32.)
Under
the sixth cause of action, Plaintiffs allege that Defendants “at the time of
presenting the [lease agreement] to Plaintiffs, made false representations to
Plaintiffs, including without limit falsely representing the safety of the
Malibu Property for a residence and the nature, duration, and scope of water intrusions
and mold problems at the Malibu Property.” (Comp. ¶ 128.) Defendants also
failed to disclose complaints and maintenance records regarding the conditions
of the Property. (Comp. ¶¶ 127, 132.)
Plaintiffs have not pled with
specificity any affirmative misrepresentation made by Defendant prior to
execution of the lease agreement on November 28, 2018. Plaintiffs have also not
sufficiently pled any fraudulent misrepresentation made by Defendants after
entering into the lease agreement; while Plaintiffs allege generally that they “reasonably
relied on the Defendants’ assurances that the problems would be rectified in a
reasonable and timely manner” (Comp. ¶ 66), Plaintiffs have not pled “how, when, where, to whom, and by what means” any assurances
from Defendants were made.
However,
Plaintiffs have alleged sufficient facts to constitute a cause of action for
fraudulent concealment against Defendant. Plaintiffs allege that Defendant
concealed facts regarding the condition and habitability of the Malibu
Property, including similar complaints from previous tenants, and the
Property’s prior history of mold or fungus problems. (Comp. ¶¶ 128, 132.) Plaintiffs allege that
this information was in the possession and control of Defendants and was not
accessible or available to Plaintiffs prior to the tenancy. (Comp. ¶ 132.) Defendants continued to conceal material facts
regarding the conditions of the property after receiving notice of those issues
from Plaintiffs. (Comp. ¶ 133.) Plaintiffs also allege that they have
discovered evidence of Defendants’ prior knowledge of the water conditions, in
the form of “wood chips strewn in the crawlspace to absorb continuing and
unabated water intrusion.” (Comp. ¶ 130.) Plaintiffs reasonably relied on
Defendant’s concealment by remaining in the property while the conditions were
being investigated, causing additional exposure and further injury. (Comp. ¶
137.) Because this claim is one for fraudulent concealment and the allegations
indicate that Defendant possessed complete information regarding the material
facts concealed, less specificity is required in pleading. (Alfaro,
supra, 171 Cal.App.4th at 1384.)
Accordingly,
the demurrer is overruled as to the sixth cause of action, and sustained as to
the third through fifth cause of action.
Motion
to strike
Defendant moves to strike
Plaintiffs’ allegations related to recovery of punitive damages and attorney’s
fees. (Comp. ¶ 74; Prayer Nos. 3, 6.)
Punitive damages
Civil
Code § 3294, subd. (a) authorizes the recovery of punitive damages where the
defendant has been guilty of oppression, fraud, or malice, express or implied. “Malice” means conduct which is intended by the defendant to cause
injury to the plaintiff or despicable conduct which is carried on by the
defendant with a willful and conscious disregard of the rights or safety of
others. (Civ. Code § 3294(c)(1).) “Oppression” is despicable conduct that
subjects a person to cruel and unjust hardship in conscious disregard of that
person’s rights. (Civ. Code § 3294(c)(2).) “Fraud” means an intentional
misrepresentation, deceit, or concealment of a material fact known to the
defendant with the intention on the party of the defendant of thereby depriving
a person of property or legal rights or otherwise causing injury. (Civ. Code §
3294(c)(3).)¿
The
allegations that Defendant fraudulently concealed facts regarding mold, leaks,
infestations, and other issues at the Malibu Property are sufficient to show
grounds for recovery of punitive damages. Accordingly, the motion to strike is
denied as to the allegations related to punitive damages.
Attorney’s fees
A
party is to bear its own attorney’s fees unless a statute or the agreement of
the parties provides otherwise. (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498,
504;
Code Civ. Proc. § 1021.) Under Civ. Code § 1717, “[i]n any action on a contract, where the
contract specifically provides that attorney’s fees and costs, which are
incurred to enforce that contract, shall be awarded either to one of the
parties or to the prevailing party,” such fees and costs shall be awarded to
the prevailing party. (Civ. Code § 1717, subd. (a); see Code
Civ. Proc. § 1021.)
The parties’ Lease Agreement,
attached to the Complaint, contains the provision that “In any action or
proceeding arising out of this Agreement, the prevailing party between Landlord
and Tenant shall be entitled to reasonable attorney fees and costs,
collectively not to exceed $1,000 . . . except as provided in paragraph 35A.”
(Comp., Ex. A, p. 6 ¶ 36 [32].) Paragraph 35A provides for division of
mediation fees between the parties for mediation of any dispute or claim
arising from the Agreement. (Ibid.)
The
Lease Agreement does not provide for recovery of attorney’s fees by Plaintiffs
against moving Defendant, as Paragraph 36 provides for recovery only by “the
prevailing party between Landlord and Tenant.” Defendant William S. Buckley
III, not moving Defendant, is the Landlord in the Agreement. Accordingly, the
motion to strike is granted as to the prayer for attorney’s fees against
Defendant.