Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

This action arises from alleged construction defects.  Plaintiff Samron & Associates (“Samron”) purchased a remodeled single-family residence from Defendant 3523 Greenfield, LLC (“Greenfield”).  The home is located at 3523 Greenfield Ave, Los Angeles, California (the “Property”). 

Greenfield was the owner and developer of the Property.  Defendant Verono LLC (“Verono”) is a company affiliated with Greenfield that was involved in the development of the Property.  Defendant Andrew William Raitt (“Raitt”) is the manager of both Greenfield and Verono.  Defendant C&S Builders, Inc. formerly known as Paloso was the general contractor.  Defendants Greenfield, Verono, Raitt and Paloso are hereinafter referred to as the “Greenfield Defendants.” 

Greenfield represented to Samron that the contractor who remodeled the Property was JZJB CNST INV (“JZJB”).  Juan Gerardo Zuniga is the principal of JZCB.  In connection with the sale of the Property, JZJB issued a written builder’s warranty.  JZCB and Zuniga are hereinafter referred to as the “Zuniga Defendants.”   

Samron claims JZJB’s builder’s warranty was false, and Paloso, not Zuniga, was actually the general contractor for the remodeling of the Property.  Samron also claims Defendants knew but failed to disclose that material portions of the remodeling were performed by unskilled and unlicensed subcontractors, and that JZJB was without assets and unable to fulfill the requirements of the warranty.    

After Samron purchased the Property, it claims it discovered latent defects including roofing errors, waterproofing mistakes, interior defects, failing stucco, failing concrete and other deficiencies.  Samron gave the Zuniga Defendants notice of the defects, but the Zuniga Defendants allegedly failed to properly repair the deficiencies.    

The operative complaint alleges claims for (1) breach of contract against the Greenfield Defendants, (2) breach of contract against the Zuniga Defendants, (3) breach of third party beneficiary contract, (4) negligence, (5) breach of implied warranty and (6) intentional misrepresentation.   

This hearing is on 3523 Greenfield LLC, Andrew Raitt and Verono, LLC’s (“Moving Defendants’”) demurrer and motion to strike.  Moving Defendants demur on the ground that Plaintiff has failed to allege fraud with particularity, and Moving Defendants move to strike the associated prayer for punitive damages.   

LEGAL STANDARD 

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  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.  (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents).)  For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Further, the court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading.  (Code Civ. Proc. § 436, subd. (a).)  The court may also strike 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. (Code Civ. Proc. § 436, subd. (b).)  The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc. § 437.) 

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”); Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 (“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

 

MEET AND CONFER¿ 

Code Civ. Proc. §§ 430.41 and 435.5 requires that before the filing of a demurrer or motion to strike, the moving party “shall meet and confer in person or by telephone” with the party who filed the pleading that is subject to demurrer or motion to strike for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer or motion to strike.¿ (Code Civ. Proc. §§ 430.41(a), 435.5(a).)¿ The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. §§ 430.41(a)(2), 435.5(a)(2).)¿ Thereafter, the moving party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc. §§ 430.41(a)(3), 435.5(a)(3).)¿ Moving Defendants submit the Declaration of Jonathan Beltram, which avers counsel met and conferred by phone prior to bringing this demurrer and motion to strike.¿ This satisfies the requirements of §§430.41 and 435.5.¿ 

DISCUSSION 

Fraud Claim 

Moving Defendants argue that Samron has not alleged fraud with particularity, as Samron’s allegations do not specify how, when, where, to whom, and by what means the alleged misrepresentations were made.  Moving Defendants’ argument ignores that Samron’s fraud claim is based on concealment, not affirmative misrepresentations.  Samron alleges that Moving Defendants knew but failed to disclose (1) that work was done by unskilled and unlicensed contractors, (2) that JZJB was not the general contractor, and (3) that JZJB was without assets and unable to fulfill the requirements of the warranty.  (SAC  ¶78.)      

The elements of a claim for fraudulent concealment are: “(1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose that 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 she had known of the concealed or suppressed fact; and (5) plaintiff sustained damages as a result of the concealment or suppression of the fact.” (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)   

As it is a species of fraud and deceit, such claim must be plead with specificity.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 (specificity means pleading the who, where, when, what, and how).)  But this rule for fraud by concealment, unlike fraud by an affirmative misrepresentation, must be applied differently in the case of non-disclosure because it is difficult to allege “who” or “how” or “by what means” something was not disclosed or “when” or “where” a statement was not made. (Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc. (2009) 171 Cal.App.4th 1356, 1384.)  Because of the nature of such fraud and the fact such facts supporting concealment are more likely to be known by defendant, less particularity is required. (Id.) 

Here, Plaintiff has sufficiently alleged a claim for fraudulent concealment.  Plaintiff has alleged (1) three material facts that Moving Defendants concealed (SAC ¶78), (2) that as a seller or an owner or agent of the seller, Moving Defendants had a duty to disclose these facts (Id. ¶77), (3) that they intended to conceal these material facts (Id. ¶ 80), (4) that plaintiff was unaware of the facts and would not have acted as it did if it had known of the concealed facts (Id. ¶¶ 79, 80, 81), and (5) that Plaintiff sustained damages as a result of the concealment (Id. ¶84.)  Accordingly, the Court overrules the demurrer.   

Punitive Damages 

Moving Defendants argue that for fraud arising out of the purchase of property, Civ. Code 3343 only allows a plaintiff to recover his “out of pocket damages.”  But our Supreme Court has held that the “out-of-pocket” measure of damages under the section as a whole does not preclude the recovery of punitive damages.  (Eatwell v. Beck (1953) 41 Cal.2d 128, 134-135; see also Esparza v. Specht (1976) 55 Cal.App.3d 1, 10.) 

Moving Defendants next argue that Samron has failed to allege fraud with particularity.  As discussed above, this argument fails.   

Finally, Moving Defendants argue that even if fraud is alleged, the claim for punitive damages should be stricken because the SAC does not include allegations of the sort of vile or despicable conduct required to support an award of punitive damages.  Section 3294 specifically allows for recovery for punitive damages where fraud is alleged.  Moving Defendants cite no case which has stricken punitive damages in the face of a viable fraud claim.   

Accordingly, the Court denies the motion to strike.   

CONCLUSION 

Based on the foregoing, the Court OVERRULES Moving Defendants’ demurrer and DENIES the motion to strike.   

 

IT IS SO ORDERED. 

 

DATED: March 5, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court