Judge Holly J. Fujie, Case Number: 24STCV05116, Date: 2025-06-05 Tentative Ruling

MOVING PARTY: Defendants/Cross-Defendants Compass California, Inc, Rachel Staman, Benjamin Joseph Kahle, Rouanne Garcia, and Lexi Newman (collectively, “Compass”)

RESPONDING PARTY: Defendants/Cross-Complainants Gregory Kay and Jodie Mendelson (collectively, “Sellers”)

This action arises from the purchase and sale of real property located at 416 S. Spring St., Apt. 809, Los Angeles, CA 90013 (the “Subject Property”). Plaintiff Haydee Lindo (“Buyer”) sues Defendants Gregory Kay, individually and as Trustee of the Kay/Mendelson Living Trust, Jodie Mendelson, individually and as Trustee of the Kay/Mendelson Living Trust, Rachel Staman, Benjamin Joseph Kahle, Rouanne Garcia, Lexi Newman a/k/a Alexandra Elyse Newman, Compass California, Inc. and Does 1-100, inclusive, pursuant to a February 29, 2024 complaint (“Complaint”) alleging causes of action for: (1) fraud [intentional misrepresentation]; (2) fraud [failure to disclose]; (3) breach of fiduciary duty; (4) negligence; (5) breach of written agreement; (6) breach of oral contract; (7) breach of the implied covenant of good faith and fair dealing; (8) unjust enrichment/quantum meruit; and (9) civil conspiracy.

On August 26, 2024, Sellers filed a cross-complaint against Compass. The currently operative first amended cross-complaint (“FAXC”) alleges causes of action for: (1) breach of fiduciary duty; (2) negligence; (3) fraudulent concealment; and (4) equitable indemnity.

On December 18, 2024, Compass filed the instant demurrer (“Demurrer”) to the FAXC. On May 22, 2025, Sellers filed an opposition (the “Opposition”). On May 29, 2025, Compass filed a reply (the “Reply”).

Pursuant to Evidence Code section 452, subdivision (d), the Court may take judicial notice of “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States”.

The court, however, may not take judicial notice of the truth of the contents of the documents. (Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) Documents are only judicially noticeable to show their existence and what orders were made such that the truth of the facts and findings within the documents are not judicially noticeable. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 885.)

Pursuant to Compass’s request, the Court takes judicial notice of the following: (1) the Complaint filed in this matter; (2) the First-Amended Cross-Complaint filed in this matter; and (3) the Cross-Complaint filed in this matter.

A demurrer for sufficiency tests whether a complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code of Civil Procedure (“CCP”) § 430.10, subd. (e).)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

A demurrer for uncertainty lies where the pleading is uncertain, ambiguous, or unintelligible. (CCP, § 430.10, subd. (f).)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616, disapproved on other grounds in Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 46 [holding claims for unfair business practices need not be pled specifically, impliedly disapproving Khoury].) As a result, a special demurrer for uncertainty is not intended to reach failure to incorporate sufficient facts in the pleading but is directed only at uncertainty existing in the allegations already made. (People v. Taliaferro (1957) 149 Cal.App.2d 822, 825, disapproved on other grounds in Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 719-720 [statute of limitations question].)

Where a complaint is sufficient to state a cause of action and to apprise a defendant of issues he is to meet, it is not properly subject to a special demurrer for uncertainty. (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643 [“A special demurrer [for uncertainty] should be overruled where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet”].)

To establish a cause of action for breach of fiduciary duty, a plaintiff must allege: (1) a fiduciary duty; (2) breach of the duty; and (3) damage caused by the breach. (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 182; Stanley v. Richmond (1995) 35 Cal.App.4th 1070 1086.)

The FAXC alleges that Compass has a fiduciary duty to Sellers as their real estate broker. (FAXC, ¶ 35.) The FAXC alleges that “According to Buyer, [Compass] informed her that the two parking spaces were included as part of the purchase price for the Property without any additional fees. If such representations were made to Buyer, [Compass] breached their fiduciary duty to Seller by failing to investigate, learn, and independently verify facts related to parking before making such representations to Buyer.” (FAXC, ¶¶ 37-38.) The FAXC further alleges that Sellers are entitled to “disgorgement of all fees paid to [Compass]” and that Sellers have “sustained damages in an amount to be established according to proof at trial.” (FAXC, ¶¶ 40-41.)

Compass contends that its alleged failure to disclose the parking fee to Buyer does not constitute a breach of its duty owed to Sellers, as Sellers were aware of the parking fee. (Demurrer, p. 7:10-19.) Compass also argues that Sellers have not alleged any damages resulting from the alleged breach of fiduciary duty. (Demurrer, pp. 7:20-8:7.) In the Opposition, Sellers assert that “If Buyer’s allegations are true, then [Compass] breached fiduciary duties to Seller by falsely representing to Buyer that two parking spaces had no additional fees, since Seller explicitly disclosed that there are such fees.” (Opp., p. 12:22-24 [italics added].)

“It is clear that mere possibility, or even probability, that an event causing damage will result from a wrongful act does not render the act actionable.” (Walker v. Pacific Indem. Co.¿(1960) 183 Cal.App.2d 513, 517.) In this case, the fact of any damage to Sellers is completely uncertain until judgment on the Complaint. The FAXC alleges that if Compass made certain representations to Buyer, then Compass breached its fiduciary duties to Sellers. (FAXC, ¶ 38.) Sellers assert that the alleged misrepresentations to Buyer expose Compass to liability for breach of fiduciary duty. Exposure to and imposition of liability are different. Based on the allegations as they are pled in the FAXC, until there is a judgment on Buyer’s allegations in the Complaint regarding the purported misrepresentations, no liability is imposed on Compass that would support a cause of action by Sellers for breach of fiduciary duty. Thus, Sellers have failed to allege facts sufficient to state non-speculative damages and therefore have not stated a viable cause of action for breach of fiduciary duty.

To plead a cause of action for negligence, one must allege (1) a legal duty owed to plaintiffs to use due care; (2) breach of duty; (3) causation; and (4) damage to plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 318.) “In order to state a cause of action for negligence, the complaint must allege facts sufficient to show a legal duty on the part of the defendant to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.” (Bellah v. Greenson (1978) 81 Cal.App.3d 614, 619)

Sellers’ negligence cause of action is based on the same factual allegations underlying their breach of fiduciary duty claim, and as such, is subject to the same deficiency. The FAXC merely asserts that if the allegations in Buyer’s Complaint are true, then Compass has breached its duty. Accordingly, Sellers’ negligence claim is contingent upon a judgment to that effect in the underlying Complaint and has not yet accrued. In addition, the mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm—not yet realized—does not suffice to create a cause of action for negligence. (see Roger E. Smith, Inc. v. SHN Consulting Engineers & Geologists, Inc. (2001) 89 Cal.App.4th 638, 651; see also Shalabi v. City of Fontana (2019) 35 Cal.App.5th 639, 642.)

Causes of action for ‘fraud’ ‘concealment’ and ‘intentional misrepresentation’ are all causes of action sounding in “deceit based on intentional misrepresentation.” (Manderville v. PCG&S Group (2007) 146 Cal. App. 4th 1486, 1498, fn. 4.) The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay¿v.¿Cobert¿(2006) 145 Cal.App.4th 170, 184.)¿

In California, fraud, including negligent misrepresentation, must be pled¿with specificity. (Small v. Fritz Companies, Inc.¿(2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino¿v. Bank of America¿(2014) 224 Cal.App.4th 1462, 1469.) Fraud allegations need not be liberally construed, general pleading of the legal conclusion of fraud is insufficient, and every element of the cause of action for fraud must be alleged fully, factually and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331; see also Quelimane Co., Inc. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47.)

The FAXC alleges that “[Compass] intentionally failed to disclose to Seller (i) that having two free parking spaces as part of the purchase of the Property was an important deal point for Buyer; (ii) that Buyer believed that two free parking spaces were included as part of the purchase of the Property with no monthly parking fee; and (iii) that one or more of the [Compass] told Buyer that two free parking spaces were included as part of the purchase of the Property with no monthly parking fee. Although Seller disputes the foregoing items (i) through (iii), they are assumed to be true for the purposes of this cause of action and are based on the allegations in Buyer’s Complaint.” (FAXC, ¶ 50.) Sellers cannot simultaneously deny that Compass made the alleged misrepresentations while also asserting that Compass did make them in order to support their claim for fraud.

A cause of action for equitable indemnity requires the following elements: (1) the same harm for which claimant may be held liable and (2) is properly attributable wholly or partly to cross-defendant. (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal. App. 3d 1439, 1445.)

The FAXC alleges that Compass was a dual agent and owed fiduciary duties to both Buyer and Sellers. (FAXC, ¶ 57.) The FAXC alleges that because of Compass’s conduct, “Buyer has filed this lawsuit against Seller, causing Seller to incur attorneys’ fees and costs.” (FAXC, ¶ 59.) The FAXC generally alleges that Buyer’s claims against Sellers are due to Compass’s conduct. (FAXC, ¶¶ 1-6, 19-33.) This is sufficient to state a claim for equitable indemnity.

The Demurrer is OVERRULED as to the fourth causes of action and SUSTAINED, with 20 days leave to amend, as to the first, second and third causes of action.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court