Judge Holly J. Fujie, Case Number: 24STCV10436, Date: 2024-10-10 Tentative Ruling

This is an action arising from an intra-family dispute concerning the breach of an alleged series of oral contracts between two brothers establishing ownership of a piece of real property. On April 25, 2024, Plaintiff Alejandro Melendrez (“Plaintiff” or “Alejandro”) filed the operative Complaint against Defendant Joseph Melendrez (“Defendant” or “Joseph”) for the following three causes of action: (1) constructive trust; (2) fraud; and (3) unjust enrichment.

Defendant Joseph demurs to all three causes of action for uncertainty and failure to state facts sufficient to establish a claim. Defendant also argues that the demurrer as to all three causes of action should be sustained because (1) the causes of action are all barred by the relevant statute of limitations; (2) the causes of action all violate the statute of frauds; and (3) Plaintiff alleges facts in the Complaint which contradict the attached exhibits therein.

Defendant contends that the Complaint alleges several oral agreements concerning the Subject Property which correspond with the following dates:

o “Plaintiff and Defendant agreed to purchase a residence in which both parties and their families would live together” and “Plaintiff and Defendant orally agreed that the property would be Plaintiff's property and that title to reflect this ownership would be forthcoming.” (Complaint, ¶¶ 4-5.)

o “Defendant agreed that Plaintiff was the actual owner of the subject property and [ . . . ] explained to Plaintiff that Defendant must remain as part owner of the property because the mortgage was in his name alone.” (Id., ¶ 8.)

o Plaintiff requested a modification of the mortgage to move from variable interest rate to a fixed interest rate, and Defendant agreed. (Id., ¶ 11.)

o “Plaintiff requested that Defendant place Plaintiff on title to the subject property [ . . .] reflecting Plaintiff's interest on said subject property" and Defendant refused.” (Id., ¶ 12.)

The statute of limitations to bring an action on an oral contract is two years from the discovery of the loss or damage suffered by the aggrieved party and is three years for any action for relief on ground of fraud or mistake. (Cal. Code Civ. Proc. §§ 338(d) – 339.) Defendant argues Plaintiff’s actions are all time barred because at latest, Plaintiff could possibly argue the statute of limitations was triggered in late 2018 when Defendant refused to change the state of the title from sole ownership to Joint-Tenancy with Plaintiff. (Compl., ¶ 12.) The Court agrees.

Given that Defendant’s refusal resulted in the estrangement of the families of Plaintiff and Defendant and that all communication between them ceased—late 2018 represents the latest point by which Plaintiff can reasonably assert he discovered the loss or damage of the alleged breach of oral agreements. Although the Court notes that it was not until November 2023 that Defendant served Plaintiff with a Notice of Unlawful Detainer Complaint (based upon a Sixty Day Notice to terminate occupancy), the Court finds that Plaintiff cannot (and does not) reasonably argue that such date would have been the date that triggered the statute of limitations. Considering Plaintiff asserts his family became estranged from Defendant’s family in late 2018, this establishes Plaintiff was already suffering loss and damage as an aggrieved party by such date as a result of the alleged breach.

Thus, the Court finds all three causes of action are barred by the statute of limitations.

California law requires for certain contracts to be enforceable—including e.g. contracts for the sale, gift, transfer, or financing of real property, and contracts whose performance will not be completed within one year—they must be memorialized in a writing that satisfies the statute of frauds. (Cal. Civ. Code § 1624.) Defendant argues that because Plaintiff’s allegations solely concern purported oral agreements related to the ownership and/or transfer of real property, and for which Plaintiff had to pay more than one year of monthly payments—the alleged contract falls within the statute of frauds. (Dem., pg. 7.) Accordingly, Defendant contends such oral contracts are unenforceable.

The Court agrees with Defendant that Plaintiff’s allegations represent unenforceable oral contracts because such contracts concern the ownership of real property. Given all three causes of action rely not on the written contracts or grants but only the alleged oral contracts, said contracts violate the statute of frauds.

Defendant provides that as a matter of law, if the allegations in the complaint conflict with attached exhibits, any recitals in the document contrary to allegations in the complaint must be given precedence. (SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83; Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505; see also Kalnoki v First Am. Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th 23, 39, (facts appearing in attached exhibits control over contradictory factual allegations in complaint).)

The Court agrees that Plaintiff’s allegations of oral agreements contradict the attached exhibits which evidence the written Grant Deeds which provide for Defendant’s ownership.

Thus, Plaintiff’s allegations and causes of action therein are also precluded by the attached evidentiary exhibits.

Defendant demurs to the first cause of action for constructive trust on the grounds that such claim is uncertain, that Plaintiff does not have the legal capacity to sue, and that constructive trust is merely a remedy which fails in this case because the underlying causes of action are barred by the statute of limitations. The remedy of a constructive trust necessarily fails if that substantive right is barred by the statute of limitations. (Reid v. City of San Diego (2018) 24 Cal.App.5^th 343, 362.)

The Court finds that in addition to constructive trust being barred as a cause of action due to the statute of frauds, it is also barred due to the statute of limitations. Thus, Defendant’s demurrer is sustained with respect to the first cause of action for constructive trust, without leave to amend.

Defendant demurs to Plaintiff’s second cause of action on the basis that fraud allegations must be pleaded with more detail than other causes of action. (Heritage Pac. Fin., LLC v Monroy (2013) 215 Cal.App.4th 972, 989, (policy of liberal construction of pleadings does not apply to fraud causes of action).) The facts constituting the fraud, including every element of the cause of action, must be alleged “factually and specifically,” i.e., the plaintiff must plead facts showing the defendant's misrepresentation (or omission that the defendant had a duty to disclose), the defendant's knowledge of falsity (“scienter”), the defendant's intent to defraud (i.e., to induce the plaintiff's reliance on the misrepresentation), the plaintiff's justifiable reliance, and the resulting damage. (Kalnoki v First Am. Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th 23, 35. See Rossberg v Bank of America, N.A. (2013) 219 1481, 1498, (promissory fraud claim must also be alleged with particularity); Knox v Dean (2012) 205 Cal.App.4th 417, 434, (constructive fraud must also be pleaded with specificity).)

The Court finds that Plaintiff has not pled facts in a manner that is sufficiently specific and particular as required to state a cause of action for fraud. As such, Plaintiff’s cause of action for fraud is not only time-barred and precluded by the statute of frauds, it is also not pled with facts sufficient to state a cause of action.

Thus, the Court sustains Defendant’s demurrer as to Plaintiff’s second cause of action for fraud without leave to amend.

Defendant demurs to Plaintiff’s third cause of action for unjust enrichment on the grounds that unjust enrichment is not a cause of action but merely a restitution claim. (Dem., pg. 10.) Thus, Defendant argues that such a cause of action cannot proceed and is subject to general demurrer. (De Havilland v FX Networks, LLC (2018) 21 Cal.App.5th 845, 870. See Reid v City of San Diego (2018) 24 Cal.App.5th 343, 362, (restitution is a remedy, not a freestanding cause of action).) Here, given the Court has found Plaintiff’s causes of action barred by both the statute of limitations and statute of frauds, Plaintiff’s third cause of action is unsupported.

Thus, the Court sustains Defendant’s demurrer as to Plaintiff’s third cause of action for unjust enrichment without leave to amend.

In sum, the Demurrer is SUSTAINED as to its entirety for all three causes of action, WITHOUT LEAVE TO AMEND.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT56@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