Judge: Douglas W. Stern, Case: 21STCV41144, Date: 2022-12-07 Tentative Ruling
Case Number: 21STCV41144 Hearing Date: December 7, 2022 Dept: 68
Lorey Andres, et al. vs. First American Title Insurance
Company, Case No. 21STCV41144
MOVING PARTY: Defendant
First American Title Insurance Company
RESPONDING PARTY: Plaintiffs
Lorey Andres and Sandra Andres
MOTION: Demurrer
to Second Amended Complaint
BACKGROUND
Plaintiffs
Second Amended Complaint alleges four causes of action against Defendants for
(1) Breach of Contract; (2) Intentional Misrepresentation; (3) Negligent
Misrepresentation; and (4) Bad Faith. Plaintiffs purchased title insurance from
Defendant. This action arises out of Plaintiffs’ claim that Defendant’s
attorney, who was one of the attorneys representing Plaintiffs in a quiet title
action, allegedly induced them to sign a settlement agreement by making
misrepresentations to Plaintiffs. Defendant now seeks a demurrer as to
Plaintiffs’ second and third causes of action.
Procedural
This action was originally filed by Plaintiffs
on November 8, 2021. Defendant demurred as to Plaintiffs’ First Amended
Complaint, and this Court partially sustained the Demurrer with leave to amend
on July 28, 2022. The Demurrer was sustained with leave to amend as to the two
causes of action now before the Court: intentional misrepresentation and
negligent misrepresentation. Plaintiffs filed a Second Amended Complaint on August
26, 2022. Defendant demurred as to the SAC on October 5, 2022. Plaintiffs filed
their opposition on November 28, 2022. Defendant replied on November 30, 2022.
Request for Judicial Notice
Defendant has requested the Court take judicial notice of
several court documents related to this case, including prior iterations of the
complaint and prior court orders. The Court will take judicial notice of these
documents.
MOVING
PARTY’S GROUNDS
FOR THE DEMURRER
Defendant demurs to Plaintiffs’ cause of action
for intentional misrepresentation and negligent misrepresentation on the basis
that they fail to state facts sufficient to constitute a cause of action against
Defendant pursuant to CCP § 430.10(e).
The
Demurrer
As a general matter, in a demurrer
proceeding, the defects must be apparent on the face of the pleading or via
proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer
tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As
such, the court assumes the truth of the complaint’s properly pleaded or
implied factual allegations. (Id.)
The only issue a demurrer is concerned with is whether the complaint, as it
stands, states a cause of action. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740,
747.)
Where a demurrer is sustained, leave to amend
must be allowed where there is a reasonable possibility of successful
amendment. (Goodman v. Kennedy (1976)
18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a
pleading can be amended successfully. (Id.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
Cause
of Action for Intentional Misrepresentation
The essential
elements of fraud are (1) a misrepresentation, (2) knowledge of falsity, (3)
intent to induce reliance, (4) actual and justifiable reliance, and (5)
resulting damage. (Chapman v. Skype, Inc. (2013) 220 Cal.App.4th 217,
230-231, citing Lazar v. Sup. Court (1996) 12 Cal.4th 631, 638.) Every
element of the cause of action must be alleged in full: factually and
specifically. The
policy of liberal construction of pleadings will not be invoked to sustain a
defective pleading in any material respect.
(Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d
1324, 1332.) General and conclusory allegations of fraud do not suffice. “This
particularity requirement necessitates pleading facts which ‘show how, when,
where, to whom, and by what means the representations were tendered.’
[Citation.]” (Lazar, supra, 12 Cal.4th at 645.)
Plaintiffs allege
that several misrepresentations were made, including regarding what the new
boundary line of the property would be and what the provisions of the
Settlement Agreement would be. However, Plaintiffs fail to plead the
misrepresentations with particularly. They make the statement but do not
include further factual details that would indicate how the alleged actions
rise to intentional misrepresentation. For instance, they claim that attorney Reider
told them that they would receive further financial compensation from Defendant
First American. And they allege that they received $35,000 from First
American. (¶ 19.) They vaguely reference
misrepresenting the boundary lines. But the pleading does not state in what way
the boundary was misrepresented, and indeed it suggests that the boundary was
not actually set by agreement. (“Reider advised plaintiffs that if plaintiffs
were dissatisfied with the adjusted boundary lines after they were prepared…” ¶
12.) Nor do Plaintiffs allege when, where, and how the representations were
made, which is a required part of the pleadings. Plaintiffs also fail to allege
facts sufficient to show the intent element of the cause of action.
The Court also
notes that Plaintiffs allege that they had independent counsel during the prior
quiet title action. In light of that
admission, and the heightened pleading requirements for the cause of action, more
than the conclusory allegations should be pleaded regarding their claimed “justifiable
reliance” on the various claimed representations.
Accordingly,
Defendant’s demurrer as to Plaintiffs’ cause of action for intentional
misrepresentation is SUSTAINED. Because Plaintiffs have had prior chances to
amend their pleadings to state sufficient facts and have failed to do so, the Court
is inclined to sustain the demurrer without leave to amend. The parties
should be prepared to address this issue of leave to amend.
Cause
of Action for Negligent Misrepresentation
Defendant demurs to
Plaintiffs’ cause of action for negligent misrepresentation on the basis that
it fails to state facts sufficient to constitute a cause of action under CCP §
430.10(e).
The essential
elements of a claim for negligent misrepresentation are the same as intentional
misrepresentation except that it does not require knowledge of falsity but
instead requires a misrepresentation of fact by a person who has no reasonable
grounds for believing it to be true. (Civ. Code § 1710(2); Gagne v. Bertran
(1954) 43 Cal.2d 481, 488; West v. JPMorgan Chase Bank, N.A. (2013) 214
Cal.App.4th 780, 792.) Causes of action for intentional and negligent
misrepresentation sound in fraud and, therefore, each element must be pleaded
with specificity. (Chapman, 220 Cal.App.4th at 231; Small v. Fritz
Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The specificity requirement
means a plaintiff must allege facts showing how, when, where, to whom, and by
what means the representations were made, and, 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.” (West,
214 Cal.App.4th at 793.)
Plaintiffs’ claims
for negligent misrepresentation fail for much the same reasons as their claim
for intentional misrepresentation. Plaintiffs have failed to plead with
specificity the facts and circumstances of the alleged misrepresentations. As
such, Plaintiffs cannot maintain a cause of action for negligent misrepresentation.
Accordingly,
Defendant’s demurrer as to Plaintiffs’ cause of action for negligent misrepresentation
is SUSTAINED. Because Plaintiffs have had prior chances to amend their
pleadings to state sufficient facts and have failed to do so, the Court is
inclined to sustain the demurrer without leave to amend. The parties
should be prepared to address this issue of leave to amend.
Defendant’s Demurrer as to Plaintiffs’ Causes
of Action for intentional misrepresentation and negligent misrepresentation are
sustained. The Court shall allow the
parties to address all matters, including whether leave to amend should be
granted.