Judge: Gary Y. Tanaka, Case: 21TRCV00212, Date: 2022-09-20 Tentative Ruling
Case Number: 21TRCV00212 Hearing Date: September 20, 2022 Dept: B
LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT
Honorable Gary Y. Tanaka Tuesday, September 20, 2022
Department B Calendar No. 10
PROCEEDINGS
Juan Luis Hernandez v. Margarita Chicas, et al.
21TRCV00212
Margarita Chicas’ Motion for Leave to File Second Amended Cross-Complaint
Juan Luis Hernandez’s Demurrer to First Amended Cross-Complaint
Juan Luis Hernandez’s Motion for Sanctions
TENTATIVE RULING
Margarita Chicas’ Motion for Leave to File Second Amended Cross-Complaint is denied without prejudice.
Juan Luis Hernandez’s Demurrer to First Amended Cross-Complaint is sustained with 20 days leave to amend.
Juan Luis Hernandez’s Motion for Sanctions is denied.
Background
Plaintiff filed his Complaint on March 22, 2021. Due to legal troubles, in 2007, Plaintiff was required to leave the country. During this time, Plaintiff and Defendant had an agreement that Defendant would manage the real property owned by Plaintiff located at 10234 S. 10th Ave. Inglewood, CA 90303. However, instead, Defendant obtained title to Plaintiff’s real property through fraud and forgery of the deed. Plaintiff alleges the following causes of action: 1. Quiet Title; 2. Slander of Title; 3. Cancellation of Instrument; 4. Fraud; 5. Breach of Oral Contract.
On October 29, 2021, Defendant filed a Cross-Complaint alleging the following causes of action: 1. Quiet Title; 2. Breach of Implied in Fact Contract; 3. Adverse Possession; 4. Partition of Real Property. Cross-Complainant alleges that she and Cross-Defendant had an agreement whereby the property was transferred to Cross-Complainant. Cross-Complainant also alleges that Cross-Defendant abandoned the property. Cross-Defendant’s demurrer was sustained with 20 days leave to amend. Cross-Complainant filed a First Amended Cross-Complaint on June 27, 2022 alleging the same four causes of action.
Motion for Leave to Amend
The court may, in furtherance of justice, and on such terms as may be proper, allow a party to amend any pleading. Code Civ. Proc., §§ 473 & 576. Judicial policy favors resolution of all disputed matters between the parties and, therefore, leave to amend is generally liberally granted. Ordinarily, the court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature. However, the court does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment. Cal. Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 281.
The application for leave to amend should be made as soon as the need to amend is discovered. The closer the trial date, the stronger the showing required for leave to amend. If the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the court has the discretion to deny leave to amend. Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490. Prejudice exists where the amendment would require delaying the trial, resulting in loss of critical evidence, or added costs of preparation such as an increased burden of discovery. Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 486-488.
Pursuant to Cal. Rules of Court, Rule 3.1324(a): A motion for leave to amend must: “(1) Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) State what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.”
Cal. Rules of Court, Rule 3.1324(b) also requires that the moving party must submit a separate declaration specifying:
“(1) The effect of the amendment;
(2) Why the amendment is necessary and proper;
(3) When the facts giving rise to the amended allegations were discovered; and
(4) The reasons why the request for amendment was not made earlier.”
Defendant moves for an order to grant leave to file a Second Amended Cross-Complaint. The authority set forth in the notice of motion is CCP §§ 426.50 and 428.50. Cross-Complainant seeks to add a cause of action for Declaratory Relief and to amend other portions of the First Amended Cross-Complaint. The Court notes that Cross-Complainant failed to recite to any applicable legal authority. CCP §§ 426.50 and 428.50 do not apply here as a Cross-Complaint has already been filed.
Here, Cross-Complainant did not fully comply with Rule 3.1324(a). While Cross-Complainant did provide where certain allegations were to be added or deleted by page, paragraph number, and line number, (Decl., Mark S. Martinez, ¶¶ 9-18) other relevant information was omitted on paragraphs 19 and 20 of the declaration including the additions and deletions by page, paragraph, and line number, and the changes, if any, to the prayer for relief.
Cross-Complainant submitted a declaration setting forth facts to meet the elements of Rule 3.1324(b)(1) to (2). (Decl., Martinez, ¶¶ 5-6). However, Cross-Complainant failed to set forth a declaration to meet the elements of Rule 3.1324(b)(3) and (4). There are no facts as to when the newly proposed allegations were first discovered. In addition, declarant’s excuse stated the following for why the amendment was not brought earlier: “This motion was not made earlier because to co-align the facts and align with legal theories is an evolving process.” (Id. at ¶ 7). This statement is vague and devoid of any facts.
Therefore, Cross-Complainant’s motion for leave to file Second Amended Cross-Complaint is denied without prejudice.
Demurrer to First Amended Cross-Complaint
Meet and Confer
Cross-Defendant set forth a meet and confer declaration in sufficient compliance with CCP §§ 430.41 and 435.5. (Decls., Grant K. Peto, ¶ 2).
Request for Judicial Notice
Cross-Defendant’s request for judicial notice is granted pursuant to Evidence Code section 452(d) and (h).
Objections
Cross-Complainant’s objections are overruled.
Demurrer
A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v. Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P., § 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)
Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.) Under Code Civil Procedure § 430.10(f), a demurrer may also be sustained if a complaint is “uncertain.” Uncertainty exists where a complaint’s factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)
Cross-Defendant demurs to the First Amended Cross-Complaint and the first through fourth causes of action on the grounds that the causes of action are uncertain and fail to state sufficient facts to constitute a cause of action against Cross-Defendant. Also, Cross-Defendant contends that it cannot be ascertained from the pleading whether the contract is written, oral, or implied by conduct.
Cross-Defendant’s demurrer to the First Amended Cross-Complaint is sustained with 20 days leave to amend. Cross-Complainant fails to state facts sufficient to state a cause of action and the First Amended Cross-Complaint is uncertain.
The First Amended Cross-Complaint is uncertain because, in the Answer to the Complaint filed by Cross-Complainant, Cross-Complainant denied the material allegations stating that the 2007 Deed was unenforceable. (RJN, Ex. 2; Answer to paragraphs 12, 16, 20, 21, 28, 30, 35). Yet, the Cross-Complainant’s causes of action are not based on the enforceability of the Deed, but, instead, apparently on other grounds such as abandonment, implied contract, and adverse possession. In addition, the allegations of the First Amended Cross-Complaint are rendered uncertain by statements made in Cross-Complainant’s deposition to which the Court may take judicial notice. In her deposition, Cross-Complainant testified that Cross-Defendant told Cross-Complainant to continue to make payments while Cross-Defendant was in jail and that Cross-Defendant did not want Cross-Complainant to have the property. (RJN, Ex. 4; Deposition, 84:2 to 84:10). This contradicts the allegations of the second cause of action for Breach of Implied Contract. In addition, Cross-Complainant’s same statements contradict the “hostile” element of the third cause of action for Adverse Possession.
First Cause of Action to Quiet Title
The elements necessary to state a cause of action to Quiet Title are set forth in Code of Civil Procedure § 761.020 which states:
“The complaint shall be verified and shall include all of the following:
(a) A description of the property that is the subject of the action. In the case of tangible personal property, the description shall include its usual location. In the case of real property, the description shall include both its legal description and its street address or common designation, if any.
(b) The title of the plaintiff as to which a determination under this chapter is sought and the basis of the title. If the title is based upon adverse possession, the complaint shall allege the specific facts constituting the adverse possession.
(c) The adverse claims to the title of the plaintiff against which a determination is sought.
(d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall include a statement of the reasons why a determination as of that date is sought.
(e) A prayer for the determination of the title of the plaintiff against the adverse claims.”
Here, the element - “basis” of the title - fails to be supported with facts and is uncertain. Again, on the surface, it would appear that the “basis” would simply be the grant deed dated July 11, 2007, which was purportedly signed by Cross-Defendant. However, allegations that Cross-Defendant had “abandoned” property render the cause of action uncertain as it makes it appear that the basis for title is not simply upon the plain terms of the grant deed, but on some other theory such as Breach of Implied Contract or Adverse Possession. As shown below, these theories also fail to state sufficient facts and/or are uncertain.
Second Cause of Action for Breach of Implied in Fact Contract
As to the second cause of action for Breach of Implied Contract, Cross-Complainant fails to state facts sufficient to state a cause of action and the cause of action is uncertain for the same reasons noted above. In addition, Civ. Code, § 1091 states: “An estate in real property, other than an estate at will or for a term not exceeding one year, can be transferred only by operation of law, or by an instrument in writing, subscribed by the party disposing of the same, or by his agent thereunto authorized by writing.” Here, again, it is uncertain as to whether Cross-Complainant is relying upon a written instrument, or upon some other agreement which was apparently implied. Again, the allegations appear to be relying upon some other agreement outside the terms of the written grant deed.
Rendering the cause of action even more uncertain is the allegation that the terms of the purported contract were that Cross-Defendant “abandon” the property (FACC, ¶ 60) and that the contract was implied not only by the conduct of Cross-Defendant, but, other unnamed individuals. (Id.) It is uncertain as to why an individual would agree to a term wherein that party would abandon real property. It is also uncertain as to how unnamed individuals, apparently not a party to the contract, could craft the terms of the contract. Then, only two paragraphs later, Cross-Complainant appears to disregard this theory of abandonment, but states that Cross-Defendant agreed to sell the property to Cross-Complainant. (FACC, ¶ 62). Thus, the cause of action is uncertain and fails to state sufficient facts.
Third Cause of Action for Adverse Possession
As to the third cause of action for Adverse Possession, Cross-Complainant fails to state facts sufficient to state a cause of action and the cause of action is uncertain. “To establish adverse possession, the claimant must prove: (1) possession under claim of right or color of title; (2) actual, open, and notorious occupation of the premises constituting reasonable notice to the true owner; (3) possession which is adverse and hostile to the true owner; (4) continuous possession for at least five years; and (5) payment of all taxes assessed against the property during the five-year period." Hansen v. Sandridge Partners, L.P. (2018) 22 Cal.App.5th 1020, 1032. “Unless each one of these elements is established by the evidence, the plaintiff has not acquired title by adverse possession.” Newman v. Cornelius (1970) 3 Cal.App.3d 279, 289. Here, as noted above, the cause of action is uncertain and fails to state facts because, first, it contradicts the terms of the grant deed which appear, on its face, to establish possession based on a specific written instrument. In addition, the cause of action is contradicted by specific deposition testimony which appears to show that the possession was not adverse and hostile to the owner.
Fourth Cause of Action for Partition of Real Property
Finally, the fourth cause of action for Partition, which is based on the substantive first through third causes of action, fails to state sufficient facts and is uncertain for the same reasons noted above. In addition, it is uncertain as to how a party could seek to partition real property to which that party does not appear to allege contains a co-owner.
Thus, Cross-Defendant’s demurrer to First Amended Cross-Complaint is sustained with 20 days leave to amend. The Court believes that, in light of the Court’s ruling on Cross-Complainant’s Motion for Leave to File Second Amended Cross-Complaint, it is proper to instruct the parties of the following authority. Generally, upon the sustaining of the demurrer, the scope of leave to amend is to amend the existing causes of action and not to add new causes of action. See People ex rel. Dept. of Pub. Wks. v. Clausen (1967) 248 Cal.App.2d 770, 785. Addition of a new cause of action may be proper, however, when it “directly responds to the court's reason for sustaining the earlier demurrer.” Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.
Motion for Sanctions
Pursuant to Code of Civil Procedure section 128.7, subdivision (a), every pleading, petition, written notice of motion, or other similar paper must be signed by at least one attorney of record in the attorney’s individual name or, if the party is not represented by an attorney, must be signed by the party. An attorney or unrepresented party who presents a pleading, motion or similar paper to the court makes an implied “certification” as to its legal and factual merit; and is subject to sanctions for violation of this certification. The purpose of the statute is “to check abuses in the filing of pleadings, petitions, written notices of motions or similar papers.” Musaelian v. Adams (2009) 45 Cal.4th 512, 514.
“By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met:
(1) Proper purpose: It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation;
(2) Legal merit: The claims, defenses, and other legal contentions stated in the pleading or other paper are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;
(3) Evidentiary support: The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and
(4) The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.”
Code Civ. Proc., § 128.7, subd. (b).
A violation of any of these certifications may give rise to sanctions. (Eichenbaum v. Alon (2003) 106 Cal.App.4th 967, 976.) The certification is designed to create an affirmative duty of investigation as to both law and fact, and thus to deter frivolous actions and costly meritless maneuvers. (See, Business Guides, Inc. v. Chromatic Communications Enterprises, Inc. (1991) 498 U.S. 533, 550 [interpreting Federal Rule 11].) Whether the certificate is violated is tested objectively: i.e., whether the paper filed is frivolous, legally unreasonable or without factual foundation. “The actual belief standard ... requires a well-founded belief. We measure the truth-finding inquiry’s reasonableness under an objective standard and apply this standard both to attorneys and to their clients.” (Bockrath v. Aldrich Chem. Co., Inc. (1999) 21 Cal.4th 71, 82.)
A Code of Civil Procedure section 128.7 motion involves a two-step process. The moving party first serves the sanctions motion on the offending party without filing it. The opposing party then has 21 days to withdraw the improper pleading and avoid sanctions (the so-called “safe harbor” waiting period). At the end of the waiting period, if the pleading is not withdrawn, the moving party may then file the motion. (Code Civ. Proc., § 128.7, subd. (c)(1); Martorana v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698-699; see Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 826.) Code of Civil Procedure section 128.7 expressly applies to “petitions” and “pleadings.” “Pleadings” includes allegations and defenses contained in complaints, cross-complaints, answers and demurrers. (Code Civ. Proc., §§ 420, 422.10.)
To avoid sanctions, the party need only “appropriately” correct the violation. (Code Civ. Proc., § 128.7, subd. (c)(1).) Normally, this means the party must withdraw the challenged pleading or paper or at least acknowledge its lack of factual or legal merit at the present time. This can be done either formally or informally; e.g., by filing amendments to challenged pleadings or declarations, or formally withdrawing a challenged motion, or simply writing a letter to opposing counsel stating the challenged argument is withdrawn, etc. Parties who comply by withdrawing papers that are the subject of a Code of Civil Procedure section 128.7 motion must notify the moving party of such compliance before the end of the “safe harbor” period to avoid the imposition of sanctions. Without such notice, the moving party may not realize the problem has been resolved and may incur the expense and effort of filing the sanctions motions. (Liberty Mut. Fire Ins. Co. v. McKenzie (2001) 88 Cal.App.4th 681, 692.)
If the Code of Civil Procedure section 128.7 certification is violated, the court may impose an “appropriate” sanction upon the attorneys, law firms or parties responsible for the violation. (Code Civ. Proc., § 128.7, subd. (c).) Sanctions under section 128.7 are discretionary. The court is not required to impose a monetary sanction or any sanction at all. (See Code Civ. Proc., § 128.7, subd. (c); See Kojababian v. Genuine Home Loans, Inc. (2009) 174 Cal.App.4th 408, 421.)
Non-monetary sanctions may include striking the offending pleading; issuing a reprimand; requiring participation in continuing legal education programs; or referring the matters to disciplinary authorities. Monetary sanctions include both fines and penalties payable to the court; and an award to the opposing party for some or all of the “reasonable attorney's fees and other expenses incurred as a direct result of the violation.” (Code Civ. Proc., § 128.7, subd. (d).) “If warranted,” the court may award the prevailing party its reasonable expenses and attorney fees “incurred in presenting or opposing the motion.” (Code Civ. Proc., § 128.7, subd. (c)(1).)
Sanctions may be awarded against the persons—whether attorneys, law firms, or parties—who have violated Code of Civil Procedure section 128.7, subdivision (b), or who are responsible for the violation. (Code Civ. Proc., § 128.7, subd. (c).) “Absent exceptional circumstances,” a law firm must be held jointly responsible for violations by its partners, associates or employees, and sanctioned accordingly. (Code Civ. Proc., § 128.7, subd. (c)(1).) Where the violation consists of meritless contentions of law (see, Code Civ. Proc., § 128.7, subd. (b)(2)), no monetary sanctions may be awarded against the client. (Code Civ. Proc., § 128.7, subd. (d)(1); see, Cromwell v. Cummings (1998) 65 Cal.App.4th Supp. 10, 13, fn. 4 [“Monetary responsibility for such violations is more properly placed solely on the party’s attorneys”]; Burkle v. Burkle (2006) 144 Cal.App.4th 387, 407.)
CCP § 128.7 Safe Harbor Provision
CCP § 128.7(c)(1) states, in relevant part: “Notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court unless, within 21 days after service of the motion, or any other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.”
Here, Cross-Defendant served the motion on June 29, 2022. Cross-Defendant filed the motion on July 25, 2022. Thus, Cross-Defendant complied with the safe harbor provision.
CCP 128.7 Motion for Sanctions
Cross-Defendant moves for the imposition of monetary sanctions in the amount of $6,000 against Defendant Margarita Chicas and her counsel of record, Mark S. Martinez, jointly and severally, for their continued prosecution of a cross-complaint in this action that they know or reasonably should have known was frivolous pursuant to Code of Civil Procedure section 128.7. (Notice of Motion, pages 1-2.) The Court will presume that moving party is referring to the First Amended Cross-Complaint. The basis for the motion, for the most part, repeats the arguments made in the demurrer to the First Amended Cross-Complaint. Cross-Defendant contends that the First Amended Cross-Complaint is uncertain, frivolous, and contradicted by deposition testimony of Cross-Complainant.
However, the Court finds that Cross-Defendant has failed to establish that the First Amended Cross-Complaint is being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. CCP 128.7(b)(1). In addition, the Court finds that Cross-Defendant failed to establish that Cross-Complainant presented and maintained the First Amended Cross-Complaint without a showing that the factual contentions have evidentiary support, or that the factual contentions are likely to have evidentiary support. CCP 128.7(b)(3).
It is true that Cross-Defendant’s demurrers to the original Cross-Complaint and the First Amended Cross-Complaint have been sustained. However, it is also true that leave to amend was provided after both rulings. A review of both pleadings reveal that the defects of the Cross-Complaint or First Amended Cross-Complaint may not necessarily be based on a complete lack of facts to support a legal theory of recovery in favor of Cross-Complainant but on Cross-Complainant’s counsel’s inability to fully articulate legal theories. This failure on the part of counsel may be in not fully articulating the distinction between alternative theories of recovery and inconsistent facts. Cross-Defendant does not show that this failure on the part of counsel was frivolous, solely caused to delay, solely to harass or increase the cost of litigation, and/or brought without any factual support. The Court finds that, perhaps, leave to amend may lend to rectifying this problem. In addition, the opposition to the motion does appear to demonstrate that Cross-Complainant may have some factual support to assert some legal theory of recovery. (Cross-Complainant’s Exs. 1, 2.) Also, Cross-Complainant has stated that it still seeking further discovery from Cross-Defendant. (Decl., Martinez, ¶ 7.)
For purposes of this motion, the Court finds that Cross-Complainant has adequately shown that the allegations may have evidentiary support or that discovery may lead to the discovery of evidentiary support. The Court notes that many of the arguments made by Cross-Defendant may rely on disputed facts which will ultimately involve adjudication of factual and evidentiary issues. Ruling on such matters with a CCP § 128.7 motion for sanctions appears to be premature.
Therefore, the Court finds that Cross-Complainant and her counsel have not violated Section 128.7 by filing and maintaining the First Amended Cross-Complaint. Thus, Defendants’ Motion for Sanctions is denied.
Cross-Defendant is ordered to give notice of this ruling.