Judge: Gail Killefer, Case: 20STCV33007, Date: 2022-08-17 Tentative Ruling
Case Number: 20STCV33007 Hearing Date: August 17, 2022 Dept: 37
HEARING DATE: August 17, 2022
CASE NUMBER: 20STCV33007
CASE NAME: Jose Vilchis v. Renovate America, Inc., et al.
MOVING PARTIES: Defendants, County of Los Angeles
OPPOSING PARTY: Plaintiff, Jose Vilchis
TRIAL DATE: None set
PROOF OF SERVICE: OK
MOTION: Defendant County of Los Angeles’
Demurrer to Plaintiff’s Second Amended Complaint, Defendants’
Motion to Strike Portions of the Second Amended Complaint
MOVING PARTY: Defendant, County of Los Angeles
OPPOSING PARTIES: Plaintiff, Jose Vilchis
OPPOSITION: August 3, 2022
REPLY: August 10, 2022
TENTATIVE: Defendant
County’s demurrer is sustained, without leave to amend. County’s motion to
strike is moot. Defendants are to provide notice.
This action arises out of Defendants’ unfair business
practices relating to home improvements.
Plaintiff Jose Vilchis alleges that, in or around August 2017, he was approached
by a representative, who was acting within the scope of his employment with
Defendants Aleman Electric/Eco Solar Plus LLC (“Eco Solar”) and Max and Son,
Inc. (“M&S”) (collectively “Contractor”) and as a solicitor for Defendant
Renovate America, Inc. (“Renovate”), to discuss potential home improvements on
Plaintiff’s home. Plaintiff was provided
with a Eco Solar pamphlet and a follow-up call was planned. On the follow-up call, Contractor’s
representative proposed adding a separate unit to Plaintiff’s home, including
two rooms, a kitchen, and a bathroom for $66,000 and Plaintiff was agreeable to
the project. Subsequently Plaintiff was
told by Contractor that the additional unit was not approved by the City and
that, instead, they could build a laundry room, one bedroom and a bathroom for
the same price. Plaintiff alleges
Contractor informed him that proceeding with the additions would be financed
through a government project wherein monthly payments of approximately $459
would be made until the project total was paid off. Plaintiff was not informed that a loan would
be arranged, secured by a lien on Plaintiff’s home, and involve property tax
assessments and carry interest. Plaintiff
alleges Contractor, on behalf of themselves and Renovate, surreptitiously
arranged the financing documentation with Renovate for a tax assessment to be
levied against Plaintiff’s home without Plaintiff’s knowledge, consent, or
signature.
Plaintiff alleges that, between August 2017 and February
2018, he was led to believe the improvements could not be done because
Contractor was waiting on building permits.
Plaintiff alleges that after he found out Eco Solar’s office was
shuttered, he called Renovate and was informed the money for the project had
already been disbursed. The documents
showed a disbursement date in November 2017, prior to any work being done. Renovate’s records also showed financed
improvements that including wall insulation, attic insulation, exterior
windows, and exterior doors with a lien amount of $73,202.44. Plaintiff never received such improvements
and, other than a replacement of windows that was based on Contractor’s
fraudulent representation that the windows were not up to code, no work was
done on Plaintiff’s home. Plaintiff
alleges Renovate took no action to remove the fraudulently obtained tax lien.
On August 28, 2020, Plaintiff Vilchis filed a complaint
against Defendants Renovate, Eco Solar, M&S, Suretec Indemnity Company
(“Suretec”), and Does 1 through 11 for (1) violations of the CLRA, (2) unfair
business acts and practices, (3) rescission/cancellation, (4) violation of the
HSSA, (5) fraud or negligent misrepresentation, (6) concealment, (7)
cancellation of tax, and (8) recovery of the bond.
On August 18, 2021, Plaintiff filed an amendment to the complaint,
substituting in County of Los Angeles (“County”) for Doe 1. On March 22, 2022,
Plaintiff filed his First Amended Complaint (“FAC”) alleging: (1) violations of
the CLRA-Renovate, (2) unfair business acts and practices-Renovate, Eco Solar,
M&S, (3) rescission/cancellation-County, Renovate, Eco Solar, M&S, (4)
violation of the HSSA-Renovate, Eco Solar, M&S, (5) fraud or negligent
misrepresentation-Eco Solar, M&S, (6) concealment-Renovate, Eco Solar,
M&S, (7) cancellation of tax-County, Renovate, and (8) recovery of the bond-Suretec.
On May 17, 2022, this court sustained County’s demurrer to
the entire Complaint (“May 17 Order”). On June 15, 2022, Plaintiff filed his
Second Amended Complaint (“SAC”) alleging: (1) unfair business acts and
practices-Renovate, Eco Solar, M&S, (2) rescission/cancellation-County,
Renovate, Eco Solar, M&S, (3) violation of the HSSA-Renovate, Eco Solar,
M&S, (4) fraud or negligent misrepresentation-Eco Solar, M&S, (5)
concealment-Renovate, Eco Solar, M&S, and (6) recovery of the bond-Suretec.
Defendant County demurs to the entire SAC, as well as to the
second causes of action.
Discussion
Request
for Judicial Notice
Defendant
County again requests judicial notice of the following in support of its demurrer:
Defendant
County’s request is granted. The existence and legal significance of these
documents are proper matters for judicial notice. (Evidence Code §§ 452(d),
(h).)
I.
Meet
and Confer Efforts
Defendant
County submits the declaration of their counsel, Katrina Trinh (“Trinh”), to
demonstrate that counsel has fulfilled their statutory meet and confer
obligations prior to filing their demurrer and motion to strike. Trinh also
attests that counsel sent a letter on July 6, 2022, to Plaintiff’s counsel
outlining their arguments, and Plaintiff’s counsel did not respond. (Trinh Decl. ¶ 2-4.) Trinh further attests that
on July 13, 2022, counsel followed up regarding the meet and confer process
with Plaintiff’s counsel and did not receive a response (Trinh Decl. ¶ 3.)
The
court finds that the meet and confer efforts of Defendant County are insufficient
prior to filing the instant demurrers and motions to strike, as the declaration
makes clear the parties did not meet and confer around the issues prior to the
filing of this demurrer. (CCP § 430.41.)
However, as failure to meet and confer are not grounds to overrule the
demurrer, the court continues with the merits of the motion.
II.
Legal Standard
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. (CCP
§ 430.30(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.) 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.) “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.” (CCP § 452; see also Stevens v. Sup. Ct. (1999) 75
Cal.App.4th 594, 601.) “When a court
evaluates a complaint, the plaintiff is entitled to reasonable inferences from
the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)
The general rule is that the plaintiff need only allege
ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42
Cal.4th 531, 550.) “All that is required
of a plaintiff, as a matter of pleading, even as against a special demurrer, is
that his complaint set forth the essential facts of the case with reasonable
precision and with sufficient particularity to acquaint the defendant with the
nature, source and extent of his cause of action.” (Rannard
v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and
are granted only if the pleading is so incomprehensible that a defendant cannot
reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017)
14 Cal.App.5th 841, 848, fn. 3, citing Lickiss
v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some
respects uncertain, courts strictly construe a demurrer for uncertainty
“because ambiguities can be clarified under modern discovery procedures.” (Khoury
v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)
Demurrers do not lie as to only parts
of causes of action where some valid claim is alleged but “must dispose of an
entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.) “Generally it is an abuse
of discretion to sustain a demurrer without leave to amend if there is any
reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d
335, 349.)
III.
Analysis
County’s Demurrer
A.
Entire
Complaint
As part of the May
17 Order, this court found:
“As section 4986 specifically instructs
the auditor to cancel a tax or assessment, as the court has taken judicial
notice of the form used by the County Auditor in reviewing the cancellation of
such taxes, as precedent supports the contention that Plaintiff was obligated
to pay the assessment and seek redress later, and as the court finds guidance
in Williams & Fickett v. County of Fresno (2017) 2 Cal.5th 1258,
this court agrees that the complaint is insufficiently pled to show how
Plaintiff has exhausted his administrative remedies, or operates within an
exception to such requirements.” (May 17 Order, 5.)
Defendant County now
again demurs to the entire complaint on the basis that Plaintiff has failed to
comply with the procedural requirements of exhausting his administrative
remedies before bringing an action in court. (Demurrer, 11-18.) Here, County
again alleges that “[i]n the context of property taxes,
application of the exhaustion principle means that a taxpayer cannot file or
pursue a court action relating to a tax, like the instant action, without
completing the administrative tax refund claim process. (Campbell v. Regents
of University of California (2005) 25 Cal.4th 311, 333).” (Dem., 11.) Further,
County again explains that since the subject PACE assessment were collected at
the same time and same manner as county taxes on real property, they
functionally operate as taxes for purposes of judicial interpretation. (Rev.
& Tax. Code, § 4801).
County further contends that any
communications with Renovate do not exhaust administrative remedies as the
administrative body is the County of Los Angeles, not Renovate (Dem., 12.)
County further contends “Plaintiff here
fails to provide any support showing that exhausting their administrative
claims is inadequate, would be futile or that it is absolutely clear that
exhaustion would be of no use whatsoever. (Dem., 13-14.) County also asserts
“County also previously instructed Plaintiff on how to exhaust administrative
remedies when it filed its initial Demurrer. Yet Plaintiff still failed to
submit a proper administrative claim with County...” (Dem., 14.)
“No injunction or writ of mandate or
other legal or equitable process shall issue in any suit, action, or proceeding
in any court against any county, municipality, or district, or any officer
thereof, to prevent or enjoin the collection of property taxes sought to be
collected. In the case of a collection of taxes pursuant to a bankruptcy
proceeding, the county may request a reasonable amount of attorney's fees.” (Rev.
& Tax. Code, § 4807.) “As used in this part, “taxes” includes assessments
collected at the same time and in the same manner as county taxes.” (Rev. &
Tax. Code § 4801.) County here further
asserts “state officers and state agencies have no power to estop the state
from collecting a tax.” (Dem., 15; citing Transamerica Occidental Life Ins.
Co. v. State Board of Equalization (1991) 232 Cal.App.3d 1048, 1055.)
County further asserts Plaintiff’s
claims are barred as Plaintiff failed to file the government claim prior to
bringing this action. (Dem., 16.)
“A government claim is required when a
plaintiff is requesting money or damages from a public entity. Gov. Code
§945.4. Claims for personal injury must be presented no later than six months
after the accrual of the cause of action, and claims relating to any other
cause of action must be filed within one year of the accrual of the cause of
action. (Gov. Code, § 911.2, subd. (a)). Accrual of a cause of action for
purposes of the government claims statute is the date of accrual that would
pertain under the statute of limitations applicable to a dispute between
private litigants. (Gov. Code, § 901; Whitfield v. Roth (1974) 10 Cal.3d 874, 884–
885; Jefferson v. County of Kern (2002) 98 Cal.App.4th 606, 615; Dujardin v.
Ventura County Gen. Hosp. (1977) 69 Cal.App.3d 350, 355).” (Id.)
County argues Plaintiff is now
requesting damages from a public entity, he needed to file a government claim
“no later than 2019.” (Dem., 17.) As such, County further contends Plaintiff’s
claims are time barred. (Id.) Lastly, County contends “County cannot be
liable for such acts or omissions relating to the application of a law relating
to tax on the subject property.” (Dem., 18; citing Freeny v. City of San
Buenaventura (2013) 216 Cal. App. 4th 1333; Gov. Code, § 860.2.)
The court notes that Plaintiff, in
direct contravention to the May 17 Order made by this court, again alleges an
exception to the exhaustion of administrative remedies requirement in the SAC.
Specifically, the SAC alleges:
“38. Plaintiff is not required to
exhaust administrative remedies regarding cancellation of the assessment lien
because Rev. & Tax. Code § 4986 does not require a taxpayer to pursue
administrative remedies, the administrative remedy is inadequate, and there
will be irreparable harm to the Plaintiff if this civil remedy is not granted.
Because the first mortgage holder will continue to pay the assessment throughout
the administrative appeal process the Plaintiff will be obliged to pay the
first mortgage holder for moneys that the taxing authority would cancel if
unpaid. While the Plaintiff could refuse to pay these funds to the tax
authority who may postpone a tax sale, he cannot refuse to pay the first mortgage
holder who will not postpone a non-judicial foreclosure. Therefore, the administrative
remedy is inadequate, and he will be irreparably harmed if the Court requires this
claim to go through an administrative proceeding. Furthermore, if the court
finds fraud in the execution of the contracts and rescinds them, then the
assessment lien is void as a matter of law and an administrative determination
is unnecessary, duplicative and would unnecessarily delay Plaintiff’s remedy.”
(SAC ¶38.)
The SAC provides no
support as to any of the conclusory statements, namely the inadequacy of the
administrative remedy. Further, the SAC cites no supporting authority in its
direct contradicting of this court’s prior ruling.
In Opposition, Plaintiff again seeks to
relitigate whether the PACE assessments are a tax, disregarding this court’s
prior ruling. (Opposition, 4-7.) Plaintiff then asks this court to infer that
the PACE tax is illegal, without providing any support for this court to make
such a claim. (Opp., 6-7.) Further, Plaintiff asserts
“given Renovate’s bankruptcy, there are
no administrative remedies for Plaintiff to pursue to address Plaintiff’s
PACE-related grievances. (Id. at ¶20.) The appropriate administrative agency,
PACE program administrator Renovate, cannot provide an adequate remedy as it is
bankrupt and no longer in business. (Id.) Given the bankruptcy, no
administrative remedy is available as Renovate cannot issue the “final
decision” that was exclusively in its jurisdiction. (Cal. Code Regs., tit. 10.
§ 1620.08.) The proposed “refund” form proffered by CoLA is also a futile
remedy as the forged PACE contract would remain in place until the year 2043.
Forged contracts should be cancelled, not maintained.” (Opp., 8.)
Plaintiff provides no support as to
this assertion, and directly disregards this court’s prior ruling finding the
appropriate administrative remedy to be the County Auditor form which this
court has taken judicial notice of on two separate occasions now. (May 17
Order, 4-5.)
As further part of the May 17 Order,
this court found:
“Plaintiff argues that exceptions exist
to the administrative remedy requirement, but fails to show how the
circumstances in this present action provide for an inadequate remedy, that
administrative remedies would be futile, or that this case involves important
questions of public interest, as explained by City of San Jose v. Operating
Engineers Local Union No. 3 (2010) 49 Cal.4th 597, 609. Further, Defendant
points out that the section cited by Plaintiff as authority for his claim for
cancellation of the tax assessment, Revenue and Taxation Code section 4986, specifically
provides that ‘all or any portion of any tax, penalty, or costs, heretofore or
hereafter levied, shall, on satisfactory proof, be canceled by the
auditor if it was levied or charged [listing options].’ (Rev. &
Tax. Code, § 4986.)” (May 17 Order, 5.)
Plaintiff provides no supporting
authority, nor does the SAC allege different facts, to show how the court’s
ruling regarding the interpretation of section 4986 does not apply here.
In reply, the County reiterates its
earlier arguments: (1) the PACE assessments are treated as a tax pursuant to
section 4801; (2) Plaintiff has again failed to show how exhausting
administrative remedies would be futile; (3) section 4807 bars Plaintiff’s
claims; and (4) Plaintiff must “pay first, litigate later.” (Reply, 2-7; citing
State Board of Equalization v. Superior Court (1985) 39 Cal.3d 633, 639.)
As Plaintiff has failed to show that he
has exhausted administrative remedies, has failed to address this court’s prior
rulings regarding the futility of the administrative remedies as the SAC
alleges, and has failed to show how relevant portions of the Revenue and Tax
Code do not bar his claims as this court has found in prior rulings, the court
finds Plaintiff to have not alleged sufficient facts to state a claim and the
SAC is without merit regarding the exhaustion of administrative remedies.
For these reasons, County’s demurrer to
the SAC is sustained.
MOTION TO
STRIKE
Having sustained Defendants’ demurrer, the court finds
County’s motion to strike moot.
Conclusion
Defendant County’s demurrer is sustained, without leave to
amend. County’s motion to strike is moot. Defendants are to provide notice.