Judge: Carolyn M. Caietti, Case: 37-2023-00012296-CU-BC-CTL, Date: 2023-10-20 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 19, 2023

10/20/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00012296-CU-BC-CTL I ZAK DDS PROF DENTAL CORP VS RIEDLER [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 06/13/2023

Defendants Mark Riedler and Valerie Riedler's Demurrer to the First Amended Complaint is OVERRULED IN PART and SUSTAINED IN PART WITH LEAVE TO AMEND (fourth cause of action).

Defendants Mark Riedler and Valerie Riedler's Motion to Strike the First Amended Complaint is DENIED.

Allegations Plaintiff's First Amended Complaint (FAC) alleges Defendants agreed to sell real property, a dental office, to Plaintiff by a lease including an option to purchase. (FAC, at ¶ 11.) Plaintiff exercised the option to purchase and paid a refundable deposit. (FAC, at ¶ 14.) Defendant Mark Riedler requested the parties use a specific appraiser, Plaintiff agreed and retained the appraiser. (Id., at ¶¶ 15-16.) The appraiser appraised the property at $920,000. (Id., at ¶ 17.) The parties jointly agreed the appraisal sum would be the purchase price and Defendant confirmed same in text messages. (Id., at ¶ 20.) However, Defendant Riedler then had serious doubts about the appraisal, falsely accused the appraiser of forming the appraisal sum to benefit Plaintiff, attempted to discredit the appraiser's methods and demanded he overhaul the appraisal. Defendants refuse to convey the property under the terms of the purchase option. (Id., at ¶ 29.) The FAC asserts causes of action for: (1) specific performance of contract for sale of real property; (2) breach of contract; (3) breach of covenant of good faith and fair dealing; (4) unfair business practices; (5) fraud – intentional misrepresentation; (6) fraud – negligent misrepresentation; and (7) declaratory relief.

Demurrer This demurrer is to the first through sixth causes of action.

Plaintiff's opposition request for judicial notice is granted and notice will be taken to the extent permitted.

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) No other extrinsic evidence can be considered (i.e., no 'speaking demurrers'). (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) Calendar No.: Event ID:  TENTATIVE RULINGS

2975041  42 CASE NUMBER: CASE TITLE:  I ZAK DDS PROF DENTAL CORP VS RIEDLER [IMAGED]  37-2023-00012296-CU-BC-CTL The complaint must be liberally construed and given a reasonable interpretation, with a view to substantial justice between the parties. (Amarel v. Connell (1988) 202 Cal.App.3d 137, 140–141; see also, Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-12 [in ruling on demurrers, courts treat as being true 'not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged'].) The first cause of action sufficiently alleges facts to constitute specific performance. In liberally construing the FAC, it states there is no adequate remedy at law. Civil Code section 3387 also requires it 'to be presumed that the breach of an agreement to transfer real property cannot be adequately relieved by pecuniary compensation.' (E.g., FAC, at ¶¶ 13, 30.) Thus, the demurrer to the first cause of action is OVERRULED.

The second cause of action sufficiently alleges facts to constitute breach of contract. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) Assuming the truth of the allegations, the parties entered into a contract with an option to purchase the property, Plaintiff performed by exercising the option, Defendants' refuse to convey the property under the terms of the purchase option, resulting in damage to Plaintiff. (E.g., FAC, at ¶¶ 10, 13, 14, 24-25.) Contrary to Defendants' argument, the FAC does not 'admit' Plaintiff failed to properly exercise the option. The reply also raises a new argument regarding the statute of frauds. This argument will not be considered as 'points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.' (Doe v. McLaughlin (2022) 83 Cal.App.5th 640, 653.) Thus, the demurrer to the second cause of action is OVERRULED.

The third cause of action sufficiently alleges facts to constitute breach of the covenant of good faith and fair dealing. The FAC alleges Defendant Mark Riedler decided the purchase price was unfair, falsely accused the appraiser of facts that were untrue, tried to discredit the appraiser and demanded he overhaul his appraisal. (FAC, at ¶¶ 24-25.) These are facts sufficient pleaded to show Defendant unfairly frustrated Plaintiff's right to receive the benefits of the agreement actually made. (See, Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-50.) Thus, the demurrer to the third cause of action is OVERRULED.

The demurrer to the fourth cause of action is SUSTAINED WITH LEAVE TO AMEND. The FAC alleges, as a result of Defendants' unfair business practices, Plaintiff has been damaged in an amount to be proven at trial, but an amount no less than $125,000. (FAC, at ¶ 44; see also, Prayer, at p. 10:21-23 [seeking monetary damages].) Plaintiff does not oppose Defendants' argument that such a claim is equitable in nature and damages cannot be recovered. (Memo., at p. 8:25-27, citing De La Torre v. CashCall, Inc. (2018) 5 Cal.5th 966, 993 [The unfair competition law, while broad in scope, is limited in remedies and private individuals may win restitution or injunctive relief, but they cannot obtain damages or attorney fees].) As to the fourth cause of action, Plaintiff only prays for monetary damages. Leave to amend will be allowed.

The fifth and sixth causes of action sufficiently allege facts to constitute fraud by intentional misrepresentation and negligent misrepresentation, respectively. The elements of intentional misrepresentation 'are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.' (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) The elements of negligent misrepresentation are: '(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.' (Id., at p. 1245-46.) Here, the FAC alleges Defendant Riedler made misrepresentations Defendants would sell the property to Plaintiff, committed to using his proposed appraiser and agreed to the $920,000 purchase price.

(FAC, at ¶ 46.) Defendant Riedler knew the statements were false (FAC, at ¶ 46.) Plaintiff relied on Defendant Riedler's representations by paying the appraiser to appraise the property and agreeing to Calendar No.: Event ID:  TENTATIVE RULINGS

2975041  42 CASE NUMBER: CASE TITLE:  I ZAK DDS PROF DENTAL CORP VS RIEDLER [IMAGED]  37-2023-00012296-CU-BC-CTL the purchase price. (FAC, at ¶¶ 15-19, 46-48.) The FAC also alleges Defendant Riedler made these representations without a reasonable basis to believe they were true, yet intending Plaintiff to rely on them. (FAC, ¶ 53.) Thus, the demurrer to the fifth and sixth causes of action are OVERRULED.

For these reasons, the demurrer is OVERRULED IN PART and SUSTAINED IN PART WITH LEAVE TO AMEND.

Motion to Strike A motion to strike a complaint in whole or in part is governed by C.C.P. sections 435 through 437. C.C.P.

section 436, provides that '[t]he court may, upon a motion ... (a) [s]trike out any irrelevant, false or improper matter...(b) [s]trike out 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.' The grounds for a motion to strike must appear on the face of the challenged pleading or matter subject to judicial notice. (C.C.P., § 437(a).) In ruling on a motion to strike, courts must assume the truth of the complaint's allegations and liberally construe the allegations with a view to substantial justice. (Dawes v. Sup. Ct. (1980) 111 Cal.App.3d 82, 91 & C.C.P., § 452.) A pleading that fails to adequately allege facts supporting a claim for punitive damages is subject to a motion to strike. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 164.) To recover punitive damages, a plaintiff must plead specific facts demonstrating malice, oppression or fraud. (Civ. Code, § 3294(a).) Malice, oppression and fraud are defined at Civil Code section 3294(c)(1)-(3). As relevant to this motion, fraud 'an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.' (Id., at subd. (c)(3).) Plaintiff's opposition request for judicial notice is granted and notice will be taken to the extent permitted.

Here, Defendants seek to strike paragraph 50, in the sixth cause of action for intentional misrepresentation, and the prayer for punitive damages. As discussed above, sufficient facts are alleged to supporting a claim of fraud and, thus, a basis to award punitive damages.

Thus, the motion to strike is DENIED.

Concluding Orders Plaintiff is ordered to file and serve an amended complaint (with regard to the fourth cause of action only) by November 3, 2023.

If the tentative ruling is confirmed without modification, it will be the Court's final ruling. Defendants are also ordered to serve written notice of the Court's final ruling by October 24, 2023.

The parties are reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of all motion paperwork.

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