Judge: David B. Gelfound, Case: 24CHCV03039, Date: 2024-12-10 Tentative Ruling

Case Number: 24CHCV03039    Hearing Date: December 10, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

DEMURRER

Motion filed: 10/23/24

MOVING PARTY: Defendant Chad M. Schott

RESPONDING PARTY: Plaintiffs Richard Jones and Olivia Chan-Jones

NOTICE: OK.

RELIEF REQUESTED: An order sustaining Defendant Chad M. Schott’s Demurrer to Plaintiffs’ Complaint.

TENTATIVE RULING: The Demurrer is OVERRULED.

BACKGROUND

This action arises from an alleged breach of an oral agreement between the parties regarding the sale of the property located at 24400 Cavaliani Place, Valencia, CA 91355-6054 (the “Subject Property”). (Comp. ¶ 1.)

On August 23, 2024, Plaintiffs Richard Jones and Olivia Chan-Jones (collectively, “Plaintiffs”) filed the Complaint against Defendants Chad M. Schott (“Chad”), Brooke K. Schott (“Brooke”) (collectively, “Defendants”), alleging the following causes of action: (1) Breach of Contract, (2) Fraud, and (3) Declaratory Relief.

On October 23, 2024, Defendant Chad filed the instant Demurrer to the Complaint. Subsequently, Plaintiffs filed their Opposition on November 25, 2024, and Defendant Chad filed a Reply on November 27, 2024.

ANALYSIS

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.)

At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against them. (Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 721.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law[.]” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

A.    Meet and Confer

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41, subd. (a).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., § 430.41, subd. (a)(4).)

Here, Defendants’ counsel, Christina Hahn (“Hahn”), declares on September 13, 2024, she telephoned Plaintiffs’ counsel of record, Howard S. Rosen (“Rosen”) to meet and confer, discussing Defendants’ intention to file the Demurrer and the supporting legal grounds. (Hahn Decl. ¶ 2.) Following the call, Hahn sent an email confirming the phone conversation. (Ibid.) On September 18, 2024, Rosen responded by email, indicating that Plaintiffs would not amend the Complaint. (Hahn Decl. ¶ 3.) Subsequently, on September 23, 2024, Defendants filed a Declaration of Demurring or Moving Party in support of Automatic Extension, extending the deadline to file a responsive pleading to November 6, 2024, from the initial deadline of October 7, 2024. (Id. ¶ 4.)

Based on the above records, the Court finds that Defendant Chad’s meet and confer efforts satisfy the requirements for an in-person or telephonic meet and confer, as mandated by the Code of Civil Procedure section 430.41, subdivision (a).

B.     First Cause of Action – Breach of Contract

A plaintiff must plead the following elements for a breach of contract cause of action: (1) the existence of contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s’ breach (or anticipatory breach), and (4) resulting damage to plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.)

“A written contract may be pleaded either by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect. [Citations.] In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’ [Citation.]” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993.)

“An oral contract may be pleaded generally as to its effect ... because it is rarely possible to allege the exact words. Further, a demurrer for uncertainty is strictly construed, even where the complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.)

Defendant Chad contends that the first cause of action for Breach of Contract fails to allege facts sufficient to constitute a cause of action, arguing that the Complaint is vague, ambiguous and uncertain regarding the terms of the contract. (Dem. at p. 2.) Specifically, Chad asserts that specific terms of the alleged contract – such as duties of the parties, conditions and expiration of the agreement, and which defendant spoke to which plaintiff – were not made known to the Defendants. (Ibid.) Additionally, Chad claims that the Complaint suffers from uncertainty due to the significant time gap between 2010 to 2024, with insufficient information provided to address this period. (Ibid.)

The Court notes that the Complaint alleges that “PLAINTIFFS and SCHOTTS entered into an oral agreement for the sale of the property to PLAINTIFFS for a maximum of $270,000, minus a reduction in the principal of the mortgage from the amount of the inflated monthly mortgage Payments PLAINTIFFS were making, at a time when PLAINTIFFS could qualify for a mortgage in their own names. In the interim PLAINTIFFS agreed to occupy the PROPERTY, and make the inflated mortgage payments to SCHOTTS to keep the existing mortgage current, prevent foreclosure and reduce the principal owed on the mortgage loan for the benefit of PLAINTIFFS.” (Compl. ¶ 4.)

The Court finds that the above allegations set forth with specificity the legal effect of the alleged oral agreement, including its essential terms and each party’s respective duties.

Additionally, the Court finds that the timeline as alleged in the Complaint is clear and specific. The Complaint states: “Plaintiffs moved into the PROPERTY in 2010 and began making mortgage payments directly to SCHOTT .... On or about June 5, 2024, PLAINTIFFS notified SCHOTTS that PLAINTIFFS were then prepared to obtain their own mortgage and have the PROPERTY placed in their names. SCHOTTS refused to abide by the terms of the oral agreement...” (Compl. ¶ 6.)

Defendant Chad fails to cite any legal authorities supporting his argument that the alleged 14-year period of continued performance by Plaintiffs is unfairly uncertain or negates any required elements of the cause of action. (See Khoury, supra, 14 Cal.App.4th at p. 616 [“Although appellant alleged no specific duration of the agreement, the law implies a reasonable term and, even assuming the contract to be terminable at will, requires the giving of reasonable notice prior to termination.”])

Therefore, the Court finds Chad’s argument as to the sufficiency and uncertainties for the first cause of action to be unpersuasive.

Accordingly, the Court OVERRULES the Demurrer as to the first cause of action.

C.    Second Cause of Action – Fraud

To state a claim for fraud, a plaintiff 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.) Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Particularity requires facts that 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).)

Defendant Chad asserts that Plaintiffs do not provide the information of the names of the persons who made the representations, to whom they spoke, what they said and wrote, or when it was said or written, failing to meet the strict requirements of particularity in pleading. (Dem. at p. 3.)

Plaintiffs contend that the factual allegations satisfy the requirements of particularity. Specifically, the Complaint alleges that Defendants made misrepresented that they would sell the Subject Property to Plaintiffs for a maximum of $270,000 minus a reduction in the principal of the mortgage from the amount of the inflated monthly mortgage payments Plaintiffs were making. (Compl. ¶¶ 4, 11(a), (b), (f), and (g), and 16.) “At the time SCHOTTS made the above representations, SCHOTTS knew the statements were false and SCHOTTS made the statements knowing that PLAINTIFFS would, and did in fact, reasonably rely on them.” (Id. ¶ 17.) Plaintiffs allege that, in reasonable reliance on SCHOTTS’s representations: they “... lived in the PROPERTY since 2010, made mortgage over and above the real mortgage payment amount, made numerous expensive upgrades and repairs to the PROPERTY and refrained from entering into the residential real estate market other than in the transaction with SCHOTTS.” (Id. ¶ 19.) Additionally, Plaintiffs claim to have sustained damages “in an amount to be proven at trial but at a minimum in the sum of $789,600.00.” (Id. ¶ 20.) The Court may also reasonably infer that the misrepresentation occurred “in or about January 2010,” as alleged in the same paragraph where the representation is alleged. (Compl. ¶ 4.)

Accordingly, the Court finds that the Complaint’s factual allegations, on their face, satisfy the requirements of particularity and adequately plead all required elements for a fraud cause of action.

Therefore, the Court OVERRULES the Demurrer as to the second cause of action.

D.    Third Cause of Action – Declaratory Relief

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.) A complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a contract and requests that these rights and duties be adjudged by the court. Maguire v. Hibernia Savings & Loan Soc. (1945) 23 Cal.2d 719.)

The Complaint alleges that “PLAINTIFFS repeat and re-allege Paragraph 1 through 7 ... and Paragraph 9 through 13 inclusive of the First Cause of Action and Paragraph 16 through 19 of the Second Cause of Action ...” (Compl. ¶ 23.) Furthermore, Plaintiff asserts that “[a]n actual controversy has arisen and now exists between the parties as to the right to own the PROPERTY.” (Id. ¶ 24.)

The allegations here leave no doubt of the asserted existence of actual controversies between the parties, including disputes regarding the validity of the 2010 oral agreement, the respective rights and duties of the parties, and Plaintiff’s right to own the Subject Property.

Based on the above, the Court OVERRULES the Demurrer as to the third cause of action.

CONCLUSION

Defendant Chad M. Schott’s Demurrer to the Complaint is OVERRULED.

Defendant Chad M. Schott is ordered to serve and file an Answer to the Complaint within 30 days.

Moving party to give notice.