Judge: John J. Kralik, Case: 20BBCV00477, Date: 2023-01-27 Tentative Ruling
Case Number: 20BBCV00477 Hearing Date: January 27, 2023 Dept: NCB
North
Central District
|
Anthony
Bozanich, Plaintiff, v. sang hyuk park, Defendant. |
Case No.: 20BBCV00477 Hearing Date: January 27, 2023 [TENTATIVE]
order RE: Demurrer; motion to strike |
BACKGROUND
A.
Allegations
Plaintiff Anthony Bozanich (“Plaintiff”)
alleges that on August 8, 2016, Plaintiff and Defendant Sang Hyuk Park (“Park”)
executed a California Residential Purchase Agreement and Joint Escrow
Instructions (“Purchase Agreement”) for Plaintiff’s purchase of residential
property located at 12407 Moorpark Street, #105, Studio City, CA 91604. Defendant Forward Wilshire Inc. dba Keller
Williams Realty Larchmont (“Forward Wilshire”) was Park’s real estate
broker. As part of the escrow process,
Park prepared and signed several California Association Realtors forms,
including the Transfer Disclosure Statement (“TDS”) and Seller Property
Questionnaire (“SPQ”). In his TDS, Park
stated that he was unaware of the presence of mold at the property and in the
TDS and SPQ, Park did not disclose any ongoing water leaks/intrusion at the
property.
Plaintiff alleges that escrow closed on
September 27, 2016 and he moved into the property in November 2016. Plaintiff alleges that he learned about
issues with the HVAC in late spring/early summer of 2017 when he first ran the
unit, which created excessive moisture and pooling of water that caused
mold. Plaintiff alleges that in
late-June 2017, water began pouring down from the ceiling smoke detector
outside of the property’s spare bedroom, which was water leaking from the
neighboring unit above the property.
Plaintiff also alleges that he discovered
construction defect issues with the exterior balcony, which included a negative
slope that caused water to pool along the property’s exterior walls.
Plaintiff alleges that he later discovered
that Park had actual knowledge of the issues with the HVAC unit, the leaking
water from the above unit, and the balcony defects prior to executing the
Purchase Agreement.
The first amended complaint (“FAC”), filed
September 15, 2022, alleges causes of action for: (1) breach of contract
against Park; (2) fraud against Park; (3) negligent misrepresentation against
Park; (4) breach of duty of disclosure by seller’s agent to buyer against Forward
Wilshire; and (5) conspiracy to commit fraud against Park and Forward Wilshire.
On March 24, 2021, Plaintiff amended the
complaint to name Forward Wilshire Inc. dba Keller Williams Realty Larchmont as
Doe 1.
B.
Motions on Calendar
On January 6, 2023, Defendant Sang Hyuk
Park filed a demurrer and a motion to strike portions of the FAC.
On January 17, 2023, Plaintiff filed an
opposition to the demurrer only.
On January 19, 2023, Park filed a reply
brief to the demurrer. Park also filed a
notice of non-opposition to the motion to strike, stating that Park was not in
receipt of an opposition brief from Plaintiff.
DISCUSSION
RE DEMURRER
Park demurs to the 1st,
2nd, 3rd, and 5th causes of action in the FAC.
A.
Breach of Written Contract – 1st cause of
action
The essential elements of a cause of
action for breach of contract are: “(1) the existence of the contract, (2)
plaintiff's performance or excuse for nonperformance, (3) defendant's breach,
and (4) the resulting damages to plaintiff.”
(Oasis West Realty, LLC v. Goldman
(2011) 51 Cal.4th 811, 821.) “A
written contract may be pleaded either by
its terms—set out verbatim in the complaint or a copy of
the contract attached to the complaint and incorporated therein
by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142
Cal.App.4th 1457, 1489.)
In the 1st cause of action,
Plaintiff alleges that he and Park entered into the Purchase Agreement on
August 8, 2016 and that he performed the material obligations of the Purchase
Agreement, except those he was prevented from performing due to Park’s wrongful
conduct. (FAC, ¶¶24-25.) Plaintiff alleges that Park failed to
disclose material defects of which he was aware to Plaintiff as required by the
Purchase Agreement, such that Plaintiff was damaged. (Id., ¶¶26-27.)
Park demurs to the 1st cause of
action, arguing that the contract document is not attached to the FAC and that
the material terms of the contract are not alleged. A copy of the Purchase Agreement is not
attached to the FAC. Further, while the
FAC alleges that Plaintiff and Park entered into the Purchase Agreement,
Plaintiff has not alleged the material terms of the Purchase Agreement, such as
terms regarding whether Park had a contractual duty to disclose material
defects, Plaintiff’s duties thereto, etc. (FAC, ¶9.)
At most, Plaintiff alleges that as a part of the escrow process, Park
prepared and signed the TDS and SPQ, but he has not alleged whether this was a
term of the Purchase Agreement.
The demurrer to the 1st cause
of action is sustained with leave to amend.
B.
Fraud and Conspiracy to Defraud – 2nd and 5th
causes of action
To allege a cause
of action for fraud, the requisite elements are: (1) a representation, usually of fact, which is false; (2) knowledge of its
falsity;
(3) intent to defraud; (4) justifiable reliance upon the
misrepresentation; and (5) damage resulting from that justifiable
reliance. (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.) This cause of action is a tort of
deceit and the facts constituting each element must be alleged with
particularity; the claim cannot be saved by referring to the policy favoring
liberal construction of pleadings. (Committee on Children's Television, Inc. v. General Foods Corp.
(1983) 35 Cal.3d 197, 216.) Since
the claim must be pleaded with particularity, the cause of action based on
misrepresentations must allege facts showing how, when, where, to whom, and by
what means the misrepresentations were tendered. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)
In the 2nd cause of
action for fraud, Plaintiff alleges that from August 8, 2016 to September 27,
2016 (close of escrow), Defendants made fraudulent representations and
concealed material facts for the express purpose of inducing Plaintiff to enter
into the Purchase Agreement and close escrow.
(FAC, ¶30.) He alleges that
Defendants made false representations and intentionally concealed material
defects regarding the condition of the property that were known to Defendants
and that Plaintiff could not have known.
(Id., ¶31.) Plaintiff alleges that
Defendants knew from the very beginning that their representations were false,
but nevertheless convinced Plaintiff to purchase the property. (Id., ¶32.)
Plaintiff alleges he reasonably relied on the representations by
executing the Purchase Agreement and closing escrow and that had he known about
the true facts, he would not have executed the Purchase Agreement or closed
escrow. (Id., ¶¶33-34.)
In the 5th
cause of action for conspiracy to commit fraud, Plaintiff alleges that Forward
Wilshire was aware that Park planned to commit fraud with respect to concealing
material defects elated to the property and Park was likewise aware that
Forward Wilshire planned to commit fraud to realize commission on the sale of
the property. (FAC, ¶57.) Plaintiff alleges that Forward Wilshire and
Park agreed with one another, intended the fraud against him, and worked
together so that the fraud could be accomplished. (Id.,
¶¶58-59.)
Park
demurs to the fraud causes of action, arguing that Plaintiff fails to allege
facts with the requisite specificity.
For the
fraud claim alleged against Park, Plaintiff has alleged that Park prepared the
TDS and SPQ during the escrow process and that this was sometime between August
8, 2016 and September 27, 2016. (FAC,
¶¶11, 30.) Plaintiff has alleged facts
showing how, when, where, to whom, and by what means the alleged
misrepresentations about the property were tendered. As such, the demurrer on this ground will be
overruled.
Next,
Park argues that the FAC fails to allege facts showing that Park knew of the
issues regarding the HVAC and mold. In
the FAC, Plaintiff alleges that he later discovered that Park had actual
knowledge of both the issue with the HVAC and the water leak from the
neighboring unit above the property, prior to executing the Purchase Agreement,
but fails to allege with particularity the element of Park’s knowledge of the
falsity of his representations. Further
facts should be provided to support this element of fraud.
As such,
the demurrer to the 2nd cause of action is sustained with leave to
amend. As the 5th cause of
action for conspiracy to defraud is essentially dependent on the 2nd
cause of action for fraud, the demurrer to the 5th cause of action
is sustained with leave to amend.
C.
Negligent Misrepresentation - 3rd cause of
action
To allege a cause of action for negligent misrepresentation, the requisite elements are: (1) a misrepresentation of a past or existing material fact; (2) without
reasonable grounds for believing it to be true; (3) with intent to induce
another's reliance on the fact misrepresented; (4) ignorance of the truth and
justifiable reliance thereon by the party to whom the misrepresentation was
directed; and (5) damages. (B.L.M. v. Sabo & Deitsch (1997)
55 Cal. App. 4th 823, 834.) Negligent
misrepresentation, unlike fraud, does not require knowledge of falsity. (Apollo
Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226,
243.) However, like fraud, “[e]ach element in a
cause of action for. . . negligent misrepresentation must be factually and specifically
alleged.” (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th
513, 519.)
The 3rd cause of action for
negligent misrepresentation alleges similar facts as the fraud cause of
action. (See FAC., ¶¶38-42.)
For the same reasons discussed above
regarding the demurrer to the fraud cause of action, the Court sustains the demurrer
to the 3rd cause of action with leave to amend.
DISCUSSION
RE MOTION TO STRIKE
In light of the ruling on the
demurrer, the Court takes the motion to strike portions of the complaint
off-calendar.
CONCLUSION
AND ORDER
Defendant Sang Hyuk Park’s demurrer to the
1st, 2nd, 3rd, and 5th causes of
action in the First Amended Complaint is sustained with 20 days leave to amend.
Defendant Forward Wilshire Inc. dba Keller
Williams Realty Larchmont’s motion to strike is taken off-calendar as moot, in
light of the ruling on the demurrer.
Defendant shall provide notice of this
order.