Judge: Gail Killefer, Case: 21STCV08065, Date: 2022-10-18 Tentative Ruling
Case Number: 21STCV08065 Hearing Date: October 18, 2022 Dept: 37
HEARING DATE: October 18, 2022
CASE NUMBER: 21STCV08065
CASE NAME: Rikki Selby v. Greg Stangl ¿
PROCEEDING: Defendant’s Demurrer to the
First Amended Complaint
MOVING PARTY: Defendant, Greg Stangl
RESPONDING PARTY: Plaintiff, Rikki Selby
OPPOSITION: October 5, 2022
REPLY: October
11, 2022
TENTATIVE: Defendant’s demurrer is
sustained, without leave to amend. Defendant is to give notice.
This is an action for breach of fiduciary duty arising in
connection with real property located at 1155 S. Grand Avenue, Unit #1016, Los
Angeles, California (the “Property”). Rikki
Selby (“Plaintiff”) brings this action against Defendant Greg Stangl
(“Stangl”), who she alleges to be her representative in connection with
purchase of the Property. According to the Complaint, Plaintiff entered into a
Residential Purchase Agreement and Joint Escrow Instructions (the “RPA”) for
purchase of the Property on March 27, 2017. Plaintiff was later provided a
“Real Estate Transfer Disclosure Statement and a Seller Property
Questionnaire,” which was allegedly not properly completed because it indicated
“Yes” in response to the question “any occupant of the Property smoking on or
in the Property” without providing an explanation. Plaintiff then later
discovered that Seller was a heavy smoker, and that the Property was severely
contaminated by cigarette smoke. Plaintiff allegedly began demolishing the
Property in 2018 after Seller refused to rescind the sale and take the Property
back.
On May 24, 2022, the court granted Stangl’s motion for
judgment on the pleadings and granted Plaintiff 30 days leave to amend the
Complaint (“May 24 Order”)(RJN #5).
On August 11, 2022, Plaintiff filed her operative First
Amended Complaint (“FAC’), alleging causes of action for: (1) breach of
fiduciary duty; (2) financial elder abuse; and (3) tort of another.
Stangl now demurrers to the entire FAC. Plaintiff opposes
the demurrer.
Request
for Judicial Notice
Stangl requests
judicial notice of the following in support of his demurrer:
Stangl’s requests
are granted. The existence and legal significance of these documents are proper
matters for judicial notice. (Evidence Code § 452(d), (h).)
Discussion
I.
Meet and Confer Efforts
Stangl submits the declaration
of his attorney, Robert T. Dolan (“Dolan”), to demonstrate that he has
fulfilled its statutory meet and confer obligations prior to filing the instant
demurrer pursuant to CCP § 430.41 Dolan attests he “had
a telephone conversation with one of Plaintiff Rikki Selby’s attorneys of
record, Brian Jacobs, to discuss the issues raised by this demurrer, and the
legal bases on which the Demurrer would be based… My conversation with Mr.
Jacobs prior to filing this Demurrer did not resolve the issues raised by this Demurrer.”
(Dolan Decl. ¶ 2.) The Dolan Declaration is sufficient for purposes of CCP
§ 430.41. The court finds that the meet and confer efforts of Defendant are sufficient
prior to filing the instant motion for judgment on the pleadings.
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
As part of the May
24 Order, this court highlighted the procedural posture of this action:
“In the underlying
litigation between Plaintiff and Seller of the Subject Property, Case No. BC694960,
in the matter of Rikki Selby v. Gary Conrad, et al. (“Underlying
Matter”), Plaintiff had alleged causes of action for intentional and negligent
misrepresentation; fraudulent concealment; and breaches of common law duty and
contract against the Seller. (Plaintiff’s Ex. 2.) In the arbitration award in
that matter, the arbitrator determined “[t]o put it succinctly, Buyer was not
defrauded or deceived, nor was any material adverse fact concealed. The history
of smoking in the Unit was disclosed. Although not disclosed in detail, it was
disclosed in a manner that complied with the law.” (Defendant’s Ex. 1, Exhibit
H, 6.) The arbitrator further affirmed “Civil Code section 2079.5 makes it
clear that a prospective buyer of residential property has a ‘duty to exercise
reasonable care to protect himself or herself, including those facts which are
known to or within the diligent attention and observation of the buyer or
prospective buyer.’ This principle was recited and emphasized to Buyer multiple
times in the transaction documents” and Plaintiff failed to exercise such
reasonable care to protect herself in light of the disclosed facts. (Id.)
The arbitrator highlighted:
‘the fact that after Seller disclosed the history of smoking
in the Unit and Buyer so acknowledged in writing (Exh. 6), Buyer (and her
agent) failed to request any further elaboration. She also waived a
professional home inspection, which may (no one, of course, knows for sure)
have detected the odor of prior smoking in the premises. She also failed to do
her final walk-through of the Unit prior to accepting its condition, which
would have given another opportunity to inspect the Unit, and potentially
detect the odor. In short, Buyer made two visits to the Unit and decided to
purchase it. Thereafter, she acknowledged in writing her duty of reasonable care
and then ignored the express smoking disclosure, failed to request any further
elaboration, declined to have a professional inspection, and declined a final
walk-through. It is not hyperbole to conclude that Buyer, although a very fine
person and acting in good faith, simply did not do anything to protect herself
from the very problem she now faces, even though she was advised to do so and
had every opportunity to do so.’
(Id. at 7.) The
arbitrator concluded no misrepresentations, concealments, or breaches were
made, stating “[Seller] was required to state truthfully if an occupant of the
property had smoked in or on the property. He truthfully responded “Yes.” More
was not required.” (Id. at 8.) The arbitrator therefore concluded that “the
record in this case is manifestly clear that Buyer did nothing, literally
nothing, to protect herself from the very condition she now finds intolerable.”
(Id. at 7.) As such, the arbitrator deemed that the disclosure of the
history of smoking from the Seller was sufficient, that such notice was given
to Plaintiff, and that such notice did not cause Plaintiff’s damages. (Id.
at 6-7.)
...
Defendant correctly points out that the arbitrator’s findings
concluded that Plaintiff did not protect her own interest, that the disclosures
of the history of smoking in the Property were sufficient to put Plaintiff on
notice, “that further elaboration regarding smoking would not have made a
difference to the outcome, and that Plaintiff’s knowing waiver of any
inspection rights, and warnings of the possible consequences of her knowing
waiver, vitiated her complaint that she had sustained damages caused by any
failure to disclose facts pertaining to smoking.” (Motion, 18-19.) Defendant
contends that since Plaintiff alleges liability and damages based on Defendant
allegedly not calling her attention to the disclosures and usage of fans,
arbitrator’s findings regarding her own failure to exercise reasonable care as
the cause of her damages are fatal to Plaintiff’s allegations. (Motion, 19.)
...
In Reply, Defendant contends that Plaintiff’s entire claim
rests on two pieces of information: (1) information regarding the history of
smoking in the Property, and (2) the alleged significance of the fan used
during open houses in the Property. (Reply, 2.) Defendant contends that the
arbitrator decided on both contentions by ruling that the “Yes” marked on the
SPQ was sufficient notice, and that any further information beyond that
response “was not necessary in order to alert Buyer of the history of smoking
in the residence” and that the use of the fan during open houses of the
Property would have been a normal practice for a real estate showing. (Id.;
Defendant’s Ex.1 H.) Defendant further correctly identifies that the arbitrator
in the Underlying Matter concluded that Plaintiff was put on notice of the
history of smoking sufficiently, and as such Defendant would not be obligated
to provide further notice beyond the requisite disclosures, which Plaintiff
waived further inspection of. (Reply, 5-6.) Defendant further contends that
after notice was made to Plaintiff of the history of smoking in the residence,
Plaintiff still moved forward with the deal, waiving her right to further
factfinding before completing the agreement. (Reply, 7.) Further, Defendant
correctly contends that the use of collateral estoppel applies towards findings
made against Plaintiff in the Underlying Matter, as she was a party to that
litigation. (Reply, 8-9.) As the arbitrator in the Underlying Matter determined
Plaintiff was given sufficient notice through the SPQ of the history of
smoking, the use of the fan during a showing was a commonplace practice in the
real estate industry, and that Plaintiff’s failure to exercise reasonable care,
here waiving further inspection and acknowledging the disclosure of smoking
history while moving forward with the deal, caused her own damages, the court
agrees with Defendant that the binding arbitration in the Underlying Matter
made a final decision which necessarily involved the factual issues and damages
Plaintiff alleges in this case. Therefore, the court agrees that collateral
estoppel prevents Plaintiff from relitigating the sufficiency of the
disclosure, the commonplace nature of the use of a fan during a real estate
showing, and the causation of Plaintiff’s damages due to her own failure to
exercise reasonable case.” (May 24 Order, RJN Exh. 4.)
Defendant here again demurs to the FAC, alleging no new
factual allegations have been added to support the three causes of action
against Stangl. (Demurrer, 14-17.) Stangl notes Plaintiff’s allegations in the
Complaint and FAC are contradictory at parts, including an allegation in the
FAC that Stangl failed to inspect the property. (Demurrer, 16-17.) Defendant
further contends that the May 24 Order’s finding of issue preclusion means
Plaintiff “is collaterally estopped from relitigating facts and issues
determined against her in the prior arbitration,” including any factual or
legal findings as to all three causes of action, since the arbitration was a
final judgment on the factual issues being relitigated here. (Demurrer, 18-20.)
Defendant thus contends the arbitration’s “findings are fatal to all of
Plaintiff’s claims” as it involved a final decision on necessary issues to all
of Plaintiff’s claims. (Demurrer, 20-21.) Defendant correctly points out that
as the arbitration award has negated the causation element necessary for the
second cause of action, and as Plaintiff was not the prevailing party in
arbitration, Plaintiff’s second and third causes of action are precluded by the
arbitration. (Demurrer, 21-22.)
In Opposition, Plaintiff first argues that no actual
demurrer has been filed as “there is a notice of demurrer and a memorandum of
points and authorities, but no demurrer.” In reply, Defendant correctly shows
compliance with CCP § 430.10, and points out “Plaintiffs [sic] also rely
on Dikkers v. Superior Court (1948) 88 Cal.App.2d 816, a case decided 23
years before Code of Civil Procedure section 430.10, governing demurrers, was
enacted.” (Reply, 3-4.) Finding a demurrer has actually been filed, the court
disregards this portion of the opposition and continues with analysis of the
merits of parties’ arguments.
In the opposition, Plaintiff again attempts to argue a misstatement
of the arbitrator’s findings—“[i]t is the gravamen of the FAC that it was
because of Stangl’s failure to perform his duties as Selby’s broker that this
additional investigation did not take place.” (Opp., 5.) However, Plaintiff
fails to explain how the arbitrator’s findings regarding no causation on the
part of Stangl would allow for findings of new liability here. Plaintiff
further seeks to find new liabilities and duties upon Stangl in the opposition,
without explaining how the arbitrator’s findings regarding the sufficiency of
Stangl’s actions do not entirely do away with new allegations of liability.
(Opp., 6-10.)
In Reply, Defendant again contends this demurrer “is based
on the missing element of [causation].” (Reply, 4.) Defendant correctly explains
“the cause of her damages was purportedly that she was not sufficiently aware
of the alleged existence, or potential existence, of possible smoke odor due to
the prior occupant of the Property being a smoker.” (Id.) As such,
Defendant correctly points out, “the arbitrator expressly found, against
Selby’s argument to the contrary, that Selby did in fact have sufficient
information to make an informed decision regarding whether or not to purchase a
property she knew had been occupied by a smoker.” (Reply, 4-5.) As such,
Defendant contends the arbitrator found there was adequate disclosure and
notice to Plaintiff to make her own decision, and that further information “was
not necessary in order to alert Buyer of the history of smoking in the
residence.” (Reply, 5.) Defendant then contends that such a finding negates the
causation element required to prove any of Plaintiff’s claims. (Reply, 5-10.)
The court agrees.
In order to maintain consistency with prior rulings, and in
light of the preclusive effect of the arbitrator’s findings regarding the
sufficiency of Defendant’s disclosures, a review of the FAC shows no new
factual allegations which may support a finding of liability for Defendant,
Plaintiff’s real estate agent. While Plaintiff may point to things which
Defendant may have done and did not, Plaintiff does not address or explain why
the arbitrator’s findings of sufficient disclosure do not close that question
entirely.
Therefore, the court again agrees that collateral estoppel
prevents Plaintiff from relitigating the sufficiency of the disclosure and the
causation of Plaintiff’s damages due to her own failure to exercise reasonable
case.
The court therefore sustains
Defendant’s demurrer to the FAC.
Conclusion
Defendant’s demurrer is sustained, without leave to amend. Defendant
is to give notice.