Judge: Colin Leis, Case: 23STCV24668, Date: 2024-06-12 Tentative Ruling
Case Number: 23STCV24668 Hearing Date: June 12, 2024 Dept: 74
SAMAN
SENEVIRATNE, et al. v. MELVIN AVANZADO, et al.
Plaintiffs/Cross-Defendants Saman
Seneviratne’ (individually and as trustee) Demurrer to
Defendant/Cross-Complainant Melvin Avanzado’s verified First Amended
Cross-Complaint
BACKGROUND
Plaintiffs
Saman Seneviratne, individually and as Trustee of the Seneviratne Family
Residence Trust of 2018 filed this action on October 10, 2023 against defendants
Melvin Avanzado, The Avanzado Law Firm, Kirsch & Jansen, LLP, and Does 1 to
20 for breach of written contract and declaratory relief. The complaint sets
forth a cause of action for declaratory relief against Melvin Avanzado arising
from the right to purchase property, and a second cause of action against The
Avanzado Law Firm and Kirsch & Jansen, LLP for breach of written contract
for unpaid expert witness services.
On
February 7, 2024, defendant Melvin Avanzado (Cross-Complainant) filed a
verified First Amended Cross-Complaint (“FACC”) against Saman Seneviratne (“Saman”)
and Wilma Seneviratne (“Wilma”), both individually and as Trustees of the
Seneviratne Family Residence Trust, and Saman as trustee of the Seneviratne
Family Residence Trust of 2018 (collectively, “Cross-Defendants”) for (1) quiet
title, (2) breach of written contract, (3) breach of oral contract, (4) fraud
and deceit, (5) promissory estoppel, (6) rescission, (7) declaratory relief,
(8) slander of title, (9) cancellation of written instrument, and (10)
ejectment to recover possession of real property.
Cross-Defendants
demur to the first, second, third, fourth, fifth, and sixth causes of action of
the FACC. Cross-Complainant opposes the motion, and Cross-Defendants filed a
reply.
LEGAL STANDARD
¿¿ 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¿¿.) “¿To
survive a demurrer, the complaint need only allege facts sufficient to state a
cause of action; each evidentiary fact that might eventually form part of the
plaintiff’s proof need not be alleged.¿” (¿¿C.A. v. William S. Hart Union
High School Dist. (2012) 53 Cal.4th 861, 872¿¿.) For the purpose of testing
the sufficiency of the cause of action, the demurrer admits the truth of all
material facts properly pleaded. (¿Aubry v. Tri-City Hospital Dist.
(1992) 2 Cal.4th 962, 966-967¿.) A demurrer “¿does not admit contentions,
deductions or conclusions of fact or law.¿” (¿¿Daar v. Yellow Cab Co.
(1967) 67 Cal.2d 695, 713¿¿.)
REQUEST FOR JUDICIAL NOTICE
Cross-Defendants
request the Court take judicial notice of (1) the August 20, 2021 recorded Deed
of Trust secured by the property at 2601 Basil Lane, Los Angeles, CA 90077 (the
"Property") for a debt of $996,000 from Melvin N.A. Avanzado to Roy
D. Hall, and (2) the March 20, 2023
recorded Deed of Trust secured by the Property for a debt of $1,150,000 from
Melvin N.A. Avanzado to Rathncw Corporation.
The
unopposed requests are granted. (Evid. Code 452(h).)
DISCUSSION
First
Cause of Action: Quiet Title
The
FACC alleges that Saman, Wilma, and the Trust (referred to collectively as
“Buyers”) breached the agreement by failing to complete the purchase
transaction pursuant to the agreement attached as Exhibit “A”. (FACC ¶ 15, 24.)
Cross-Defendants assert that the first cause of action is improper against Saman
and Wilma as individuals because they were not individual parties to the
agreements. In opposition, Cross-Complainant contends that some of the
agreements were signed by Wilma and Saman as individuals. Cross-Complainant
references Addendum 2 on page 39 of the FACC, and the “rent to own” signature
page of the agreement on page 37. In reply, Cross-Defendants assert that the
January 16, 2018 Residential Purchase Agreement and Joint Escrow Instructions
(“RPA”) lists the “Buyer” as “Seniviratne Family Trust” and that Addendum 2 is
a typo as to the buyer.
“A
quiet title action is a statutory action that seeks to declare the rights of
the parties in realty. (Civ. Code, section 760.020;¿Western Aggregates, Inc.
v. County of Yuba¿(2002) 101 Cal.App.4th 278, 305, 130 Cal.Rptr.2d 436.) “
“‘The object of the action is to finally settle and determine, as between the
parties, all conflicting claims to the property in controversy, and to decree
to each such interest or estate therein as he may be entitled to.”’” (Western
Aggregates, supra, at p. 305, 130 Cal.Rptr.2d 436.)
Here,
the RPA clearly defines “Buyer” as “Seniviratne Family Trust.” However,
Addendum 2 to the RPA names “Wilma Seniviratne” as the “Buyer/Tenant.” Although
Cross-Defendants assert that this was erroneous, and that there was no agreement
to sell the property to any individual, the arguments concerning Addendum 2’s
materiality as it relates to the RPA is outside the scope of a demurrer. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740, 747 [“‘The only issue involved in a
demurrer hearing is whether the complaint, as it stands, unconnected with
extraneous matters, states a cause of action.'”].) Indeed, as Cross-Defendants
contend, the Court “will not close their eyes to situations where a complaint
contains allegations of fact inconsistent with attached documents, or
allegations contrary to facts which are judicially noticed.” (Del E. Webb
Corp. v. Structural Materials Co. (1981) 123 Cal. App. 3d 593, 604.) At the
pleading stage, the incorporated agreements do not contain any facts that are directly
contrary to the allegations pled in the FACC in terms of Wilma’s involvement
with the RPA.
In
relation to Saman, the parties refer to the “Rent to Own Agreement”. (FACC Exh.
A at p. 35-37.) The “Rent to Own Agreement” defines the buyer as “Wilma Seniviratne
on behalf of Seniviratne Family Trust.” (Id. at p. 35.) Even if Saman
also signed the agreement on page 37, the agreement was conducted on behalf of
the “Seniviratne Family Trust”. Nothing in the “Rent to Own Agreement” contemplates
any individual as a party. Cross-Complainant does not reference any other
portion of the incorporated agreements which names Saman as a purchaser in his
individual capacity.
Therefore,
the demurrer to the first cause of action is sustained as it relates to Saman only.
The demurrer as it pertains to Wilma is overruled.
Second
Cause of Action: Breach of Written Contract
“[T]he
elements of a cause of action for breach of contract are (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.”¿ (Thrifty
Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230,
1244.)¿Cross-Complainant alleges that Cross-Defendants failed to complete the purchase
transaction on or before January 2023 as set forth in the agreement. (FACC ¶
35.)
Cross-Defendants
raise the same argument that neither Saman nor Wilma were individual parties to
the purchase agreement. For the same reasons as above, the demurrer to the
second cause of action is sustained as to Saman only, but overruled as it
relates to Wilma.
Third
Cause of Action: Breach of Oral Contract
¿The
FACC alleges in pertinent part Saman and Buyers, in which “Buyers” is defined
as “Seneviratne [Saman], Wilma, and the Trust”, agreed to purchase certain
personal property from Cross-Complainant. (FACC ¶¶ 5, 15, 40.) Further, “Seneviratne
agreed that Buyers would pay Cross-Complainant twenty-six thousand dollars
($26,000.00) for the projector, screen, speakers and other personal property
equipment (“Equipment”) in the screening room.” (Id. at ¶ 41.) “Seneviratne
told Cross-Complainant that he would pay for the Equipment at the time Buyers
completed the purchase of the Property and took title thereof, which was to
occur no later than January 2023.” (Id. at ¶ 44.)
Cross-Defendants
contend the oral agreement, as alleged, is not enforceable pursuant to CCP §§1624(a)(1)
and 1624.5 because (1) there was a five-year gap between the equipment purchase
and property being sold and (2) the purchase price exceeded $5,000. It stands
to reason that as an alleged oral agreement, no writing or “note or memorandum
thereof” exists. (CCP 1624(a).) But there was a possibility that the contract
would occur within one year because the FACC states the contract was to be
performed at the time of the sale, thus obviating the need to comply with the Statute
of Frauds. Additionally, the FACC describes the equipment as “affixed,”
rendering them fixtures, not personal property, making section 1624.5 inapplicable.
(¶ 41.)
The
demurrer to the third cause of action is overruled.
Fourth Cause of Action: Fraud and
Deceit
Cross-Defendants
demur on the grounds that the FACC does not allege Wilma, as an individual made
any representations, and that therefore the cause of action must fail as it
applies to her. As to Saman, Cross-Defendants contend there are no allegations
amounting to fraud, and that an alleged breach of contract does not support the
finding of fraud. In opposition, Cross-Complainant asserts that the FACC has
sufficiently alleged that Cross-Defendants did not have any intention to
perform on the contract.
A
claim for fraud must plead all of the following elements: (1)
misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4)
justifiable reliance; and (5) resulting damage. (Odorizzi v. Bloomfield
School Dist. (1966) 246 Cal.App.2d 123, 128; Wilhelm v. Pray, Price,
Williams & Russell (1986) 186 Cal.App.3d 1324, 1332.) In California,
fraud, including negligent misrepresentation, must be pled with specificity. (Small
v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity
demands that a plaintiff plead facts which show how, when, where, to whom, and
by what means the representations were tendered.” (Cansino v. Bank of
America (2014) 224 Cal.App.4th 1462, 1469.)¿¿
Here,
the FACC alleges that Saman promised that “Buyers” would provide funds so that
Cross-Complainant could keep the mortgage current, and that the promise was
made with the intent to deceive Cross-Complainant into giving Cross-Defendants
possession of the Property and Equipment. (Id. ¶¶ 50-51.) Indeed, there
are no allegations that Wilma, in particular, made any promises to
Cross-Complainant. Further, as it relates to Saman, fraud allegations must be
pled with particularity because it involves “a serious attack on character, and
fairness to the defendant demands that he should receive the fullest possible
details of the charge in order to prepare his defense.” (Hills Transp. Co.
v. Sw. Forest Indus., Inc (1968), 266 Cal. App. 2d 702, 707.) The
allegations are substantially similar to the cause of action for breach of
written contract, and the FACC has not specifically pled facts supporting each
element. General and conclusory allegations are insufficient. (Lazar v.
Superior Ct. (1996) 12 Cal. 4th 631, 645).
The
demurrer to the fourth cause of action is therefore sustained.
Fifth Cause of Action:
Promissory Estoppel
“Promissory estoppel applies whenever a ‘promise which the
promissor should reasonably expect to induce action or forbearance on the part
of the promisee or a third person and which does induce such action or
forbearance’ would result in an ‘injustice’ if the promise were not enforced.”¿
(Advanced Choices, Inc. v. State Dept. of Health Servs. (2010) 182
Cal.App.4th 1661, 1671-1672.)¿ “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.’”¿ (Ibid.)¿ The party claiming estoppel must specifically plead all
facts relied on to establish its elements.¿ (Smith v. City and County of San
Francisco (1990) 225 Cal.App.3d 38, 48.)¿ “Under this doctrine a promisor
is bound when he should reasonably expect a substantial change of position,
either by act or forbearance, in reliance on his promise, if injustice can be
avoided only by its enforcement.”¿(Ibid.)¿¿¿
The fifth cause of action realleges the factual allegations of the
third cause of action for breach of oral contract, in that “Cross-Defendants
took possession of the Equipment from Cross-Complainant upon a promise to pay Cross-Complainant
twenty-six thousand dollars ($26,000.00) for that purchase” (FACC ¶ 58) and
that they failed to pay for the Equipment (Id. ¶ 60.) Cross-Defendants’ contend
this cause of action does not apply to fixtures, and that the equipment was
included as part of the property sale. Cross-Defendants do not, however, cite any
authority that promissory estoppel does not apply to fixtures. “[P]romissory
estoppel is an equitable doctrine to allow enforcement of a promise that would
otherwise be unenforceable, courts are given wide discretion in its
application.” (US Ecology, Inc. v. State of California (2005) 129 Cal.
App. 4th 887, 902.)
The demurrer to the fifth cause of action is therefore overruled.
Sixth Cause of Action:
Rescission
The sixth cause of action realleges the prior allegations
concerning fraudulent representations, promise to provide funds to keep the
mortgage current, and oral contract regarding purchase of equipment. (FACC ¶¶
65-66.) Cross-Complainant alleges that as a “direct result of the fraudulent
promises,” that Cross-Complainant is entitled to a rescission of the parties’
agreements, such that the property and equipment should be returned to
Cross-Complainant. (Id. at ¶¶ 75-76.)
Cross-Defendants demur on the grounds that recission is a
remedy, not a separate cause of action. Indeed, rescission of contract “is not
a cause of action; it is a remedy.” (Nakash v. Superior Court (1987) 196
Cal.App.3d 59, 70.) Even though Cross-Complainant pleads rescission as a cause
of action, “the nature of a cause of action does not depend on the label the
plaintiff gives it or the relief the plaintiff seeks but on the primary right
involved.” (Bird, Marella, Boxer & Wolpert v. Superior Court (2003) 106
Cal.App.4th 419, 427.) Here, Cross-Complainant premises rescission on
“fraudulent representations and promises in the parties’ agreement.” (FACC ¶
65.)
“A party to a contract has two different remedies when it has been
injured by a breach of contract or fraud and lacks the ability or desire to
keep the contract alive.
[Citation.] The party may
disaffirm the contract, treating it as rescinded, and recover damages resulting
from the rescission. [Citation.] Alternatively, the party may affirm the contract,
treating it as repudiated, and recover damages for breach of contract or
fraud. [Citation.]” (Wong v. Stoler
(2015) 237 Cal.App.4th 1375, 1384.) Cross-Complainant
must first sufficiently plead a fraud claim; only upon establishing such claim,
may Cross-Complainant elect his remedy of either rescission or damages.
The demurrer to the sixth cause of action is therefore sustained.
CONCLUSION
Based
on the foregoing, the Court rules as follows:
The
demurrer to the first and second causes of action are sustained in part as it
relates to Saman only, without leave to amend.
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
demurrer to the fifth cause of action is overruled.
The
demurrer to the sixth cause of action is sustained with leave to amend.
Cross-Defendants
are ordered to give notice of this ruling.