Judge: Gary I. Micon, Case: 24CHCV04467, Date: 2025-06-11 Tentative Ruling

Case Number: 24CHCV04467    Hearing Date: June 11, 2025    Dept: F43

Dept. F43

Date: 06-11-25

Case # 24CHCV04467, Corral v. CLPM, Inc., et al.

Trial Date: None set.

DEMURRER

MOVING PARTIES: Defendants CLPM, Inc., Colin Lightfoot, and Arlene Hernandez

RESPONDING PARTY: Plaintiff Arthur Corral

RELIEF REQUESTED

Order sustaining demurrer to the complaint.

RULING: Demurrer is overruled because Defendants are currently in default.

SUMMARY OF ACTION

This action arises out of a dispute involving a lease listing agreement between plaintiff Arthur Corral (Plaintiff) and defendants CLPM, Inc., (CLPM), Colin Lightfoot (Lightfoot) and Arlene Hernandez (Hernadez), (collectively Defendants).  Plaintiff owns property located at 9617 Gierson Avenue in Chatsworth, CA 91311.  (Compl., ¶ 1.)  CLPM is a real estate broker, Lightfoot is CLPM’s main shareholder, and Hernandez is a licensed real estate salesperson employed by CLPM.  (Compl., ¶¶ 3-5.)  On August 10, 2023, Plaintiff entered into a lease listing agreement under which CLPM would list Plaintiff’s property for leasing and procure potential tenants in exchange for monetary compensation.  (Compl., ¶ 10.)  Once CLPM procured a tenant and executed the lease, Plaintiff would pay CLPM.  (Compl., ¶ 11.)

Plaintiff alleges that Defendants procured and recommended Shawn and Alexandria Campell (the Campbells) as tenants.  (Comp., ¶¶ 13-15.)  Based on the Campbells’ representations about their income and savings and on Hernandez’s and CLPM’s recommendations, Plaintiff entered into a lease agreement with the Campbells on August 22, 2023.  (Compl., ¶ 16.)  The lease was for a one-year term, with monthly rent payments of $6,200 and a one-time payment of $9,300 due at the time of execution.  (Compl., ¶ 16.)  Upon the lease’s execution, Plaintiff paid CLPM and Hernandez as required under the lease listing agreement.  (Compl., ¶ 17.)

The Campbells remained in possession of the property for seven months, without paying rent, until Plaintiff obtained a writ of possession and a lockout was scheduled.  (Compl., ¶ 16.)  Plaintiffs allege that they later learned that the Campbells were “con artists” who defrauded landlords and lived in properties for free.  (Compl., ¶ 19.)  The Campbells submitted to Defendants forged bank statements, paystubs, and FICO scores, and were party to several bankruptcy cases that were used to defraud landlords.  (Compl., ¶ 19.)

On December 4, 2024, Plaintiff filed this action alleging that Defendants breached their duties as real estate professionals by failing to run the appropriate background checks, credit report, or vetting of the Campbells before recommending them as tenants.  (Compl., ¶ 21.)  As a result, Plaintiff relied on their recommendations, and suffered damages in lost rent, property damage, attorneys’ fees, and emotional damages.  The complaint alleges six causes of action: (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) breach of fiduciary duty; (4) negligent misrepresentation; (5) negligence; and (6) violation of Bus. & Prof. Code § 17200.

On January 27, 2025, the default was entered against CLPM, Lightfoot, and Hernandez.

Defendants claim that Plaintiff agreed to allow Defendants to file a responsive pleading no later than February 28, 2025.  Because a family emergency and travel plans prevented the parties from meeting and conferring before the February 28th deadline, Defendant filed a declaration for a 30-day automatic extension on February 28, 2025.  (Dec. of Demurring Party - filed 2/28/25.) 

On April 29, 2025, Defendants filed a demurrer to the entire Complaint. Plaintiff opposes.  No reply has been filed.

MEET AND CONFER

Before filing a demurrer, the parties must meet and confer “in person, by telephone, or by video conference.”  (Code Civ. Proc., § 430.41, subd. (a).)  The moving party must file and serve a meet and confer declaration stating either: (1) the means by which the parties met and conferred, that the parties did not reach an agreement resolving the issues raised in the demurrer; or (2) that the party who filed the pleading subject to the demurrer failed to respond to the meet and confer request or failed to meet and confer in good faith.  (Code Civ. Proc., §§ 430.41, subd. (a)(3).)  In Department F43, meet and confer means in person or via phone.  A letter or email does not suffice.  (Department F43 Courtroom Information, p. 2.)

Defense counsel emailed plaintiff’s counsel a meet and confer email on February 25, 2025.  (Declaration of Wansong DuMarier, ¶ 2.)  Counsel met and conferred telephonically on March 4, 2025 about the Complaint and agreed to meet again.  (Id. ¶ 3.)  However, the follow-up discussion never occurred.

Although it appears that the parties sufficiently met and conferred, the court notes that attorney DuMarier’s declaration is unverified because it is missing a signature.

SUMMARY OF ARGUMENTS

Defendants assert that Plaintiff’s entire complaint is barred by the lease listing agreement’s indemnity clause which protects the broker, CLPM, from claims arising out of the leasing of the property, except in case of willful misconduct or gross negligence.  Because the agreement does not impose a duty on the broker to vet or run background checks on potential tenants, Defendants’ actions are not willful misconduct or gross negligence.  Based on the facts as set forth in the Complaint and the Lease Listing Agreement, Defendant fulfilled its requirements of the contract when Defendant listed the property and provided the plaintiff with information of interested parties responding to the listing(s).  The second cause of action fails to allege facts showing Defendants acted in bad faith or engaged in conduct that frustrated Plaintiff’s rights under the lease listing agreement.  The broker’s failure to vet potential renters does not rise to the level of a breach of the covenant of good faith and fair dealing when the contract was based on a Lease Listing Agreement that only required the broker to list and advertise the property and submit to the property owner the information and responses of potential renters in responding to those listings.  The third cause of action fails to allege which fiduciary duty Defendants breached beyond the duties outlined in the lease listing agreement, which Defendants fulfilled.  The fourth cause of action for negligent misrepresentation fails because Plaintiff does not allege that Defendants did not have reasonable grounds for believing the alleged misrepresentation that the “Campbells would be a reasonably acceptable tenant with financial suitability to rent the property from Plaintiff” to be true.  The fifth cause of action fails because the listing agreement outlines Defendants’ duties, and the Complaint does not allege that Defendants failed to perform the duties in the listing agreement.  Finally, Plaintiff fails to allege facts to constitute fraud or misrepresentation on Defendants’ part when Plaintiff had access to and reviewed the same information available to Defendants.

Plaintiff asserts that Defendants’ demurrer is wholly improper because Defendants reference items beyond the Complaint’s four corners.  First, the cited indemnity clause cannot be enforced to shield real estate professional from liability for their own negligence, breach of fiduciary duty, or other misconduct.  The indemnity clause is void under section Civ. Code, § 1668 and unconscionable.  The Complaint sufficiently alleges a breach of contract claim based on Defendants’ failure to exercise reasonable care and skill in evaluating prospective tenants.  Plaintiff also sufficiently alleges that Defendants’ failure to perform their contractual obligations honestly and in good faith directly interfered with Plaintiff’s right to benefit from the lease listing agreement.  The Complaint also alleges negligent misrepresentation based on Defendants’ statements concerning the Campbells’ financial qualifications and suitability without reasonable grounds for believing the statements to be true.  Plaintiff also sufficiently alleges negligence based on Defendants’ breach of their fiduciary duties and their negligent misrepresentations of the Campbells’ financial position and suitability.  The Complaint also sufficiently alleges an unfair business practice cause of action by alleging facts showing that Defendants violated statutory provisions and obligations by recommending the Campbells without running a background check or verifying their financial information.  Finally, the court should overrule the demurrer on procedural grounds because Defendants failed to serve their responsive pleading in a timely manner.  Plaintiff agreed to set aside the default if Defendants filed and served their responsive pleading no later than April 23, 2025.  Defendants did not file or serve their demurrer until April 29, 2025.

No reply has been filed.

ANALYSIS

Demurrer

A¿ party may respond to a pleading against it by demurrer based on any single or combination of eight enumerated grounds, including¿that¿“the pleading does not state facts sufficient to constitute a cause of action” and is uncertain, meaning “ambiguous and unintelligible.”  (Code Civ. Proc., § 430.10, subds. (e), (f).)  The grounds for demurring must be 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.)  “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.)  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.)

Procedural Issues: Defendants’ demurrer is procedurally defective because it is untimely and Defendants filed and served the demurrer while in default.

A person served with a complaint has 30 days from service to demur to the complaint.  (Code Civ. Proc., § 430.40, subd. (a).)  The parties must meet and confer at least five (5) days before the responsive pleading is due.  (Code Civ. Proc., § 435.5, subd. (a)(2).)  If the parties cannot meet and confer by this deadline, the moving party is granted an automatic 30-day extension to file a responsive pleading.  (Ibid.)  The extension begins on the day the responsive pleading was previously due.  (Ibid.)

Plaintiff personally served Hernandez on December 6, 2024, and Lightfoot on December 9, 2024.  (Hernandez Proof of Service - filed 12/10/24; Lightfoot Proof of Service - filed 12/10/24.)  Plaintiff served CLPM via substituted service on December 9, 2024.  (CLPM Proof of Service - filed 12/10/24.)  Responsive pleadings were due no later than January 6 or 9, 2025.  Because Defendants did not file by their respective deadlines, Plaintiff moved for default which was entered on January 27, 2025.

Defendants claim the parties agreed to extend the deadline to file a responsive pleading to February 28, 2025 (Dec. of Demurring Party.)—making the deadline March 31, 2025.  However, Plaintiff claims he agreed to set aside the default if Defendants filed and served a responsive pleading by April 23, 2025.  (Opposition, p. 15:8-10.)  Defendants filed their demurrer on April 29, 2025, meaning they failed to comply with either agreement.

“[A] party who is in default is barred from further participation in the proceedings[.]”  (Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 343.)  A party may request to set aside default if they demonstrate the default was due to inadvertence, mistake, surprise, or excusable neglect.  (Code Civ. Proc., § 473, subd. (b).)  A party has six months after default is entered to file a motion to set aside the default.  (Code Civ. Proc., § 473, subd. (b).)  The six-month period runs from the entry of default.  (Kramer v. Traditional Escrow, Inc. (2020) 56 Cal.App.5th 13, 39.)

Because Defendants have not moved to vacate the default or filed a joint stipulation showing that Plaintiff agreed to vacate the default, Defendants’ demurrer is procedurally improper.

Therefore, the court overrules Defendants’ demurrer on the sole ground that Defendants are currently in default and barred from appearing until the default is vacated.

CONCLUSION

Defendants CLPM, Inc., Colin Lightfoot, and Arlene Hernandez’s demurrer to the Complaint is overruled.

Defendants to give notice.